UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
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Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
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For the quarterly period ended March 31, 2004 |
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or |
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Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
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For the transition period from to |
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Commission File Number: 0-6612 |
RLI Corp.
(Exact name of registrant as specified in its charter)
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ILLINOIS |
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37-0889946 |
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(State or other jurisdiction of |
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(I.R.S. Employer |
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9025 North Lindbergh Drive, Peoria, IL |
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61615 |
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(Address of principal executive offices) |
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(Zip Code) |
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(309) 692-1000 |
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(Registrant’s telephone number, including area code) |
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.
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Yes ý |
No o |
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).
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Yes ý |
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APPLICABLE ONLY TO CORPORATE ISSUERS:
As of April 23, 2004 the number of shares outstanding of the registrant’s Common Stock was 25,190,854.
PART I – FINANCIAL INFORMATION
RLI Corp. & Subsidiaries
Condensed Consolidated Statement of Earnings and Comprehensive Earnings
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For the
Three-Month Period |
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(Unaudited) |
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2004 |
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2003 |
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Net premiums earned |
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$ |
125,898,282 |
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$ |
109,145,725 |
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Net investment income |
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12,315,321 |
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10,659,885 |
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Net realized investment gains |
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2,435,593 |
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408,543 |
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140,649,196 |
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120,214,153 |
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Losses and settlement expenses |
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75,231,045 |
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63,286,269 |
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Policy acquisition costs |
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32,795,328 |
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29,503,660 |
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Insurance operating expenses |
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7,051,918 |
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6,683,870 |
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Interest expense on debt |
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1,740,176 |
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243,063 |
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General corporate expenses |
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1,284,738 |
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1,116,627 |
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118,103,205 |
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100,833,489 |
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Equity in earnings of uncons. investee |
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1,234,377 |
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1,175,703 |
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Earnings before income taxes |
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23,780,368 |
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20,556,367 |
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Income tax expense |
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6,836,856 |
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6,120,638 |
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Net earnings |
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$ |
16,943,512 |
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$ |
14,435,729 |
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Other comprehensive earnings (loss),net of tax |
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7,586,860 |
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(5,416,999 |
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Comprehensive earnings |
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$ |
24,530,372 |
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$ |
9,018,730 |
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Earnings per share: |
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Basic: |
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Basic net earnings per share |
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$ |
0.67 |
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$ |
0.58 |
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Basic comprehensive earnings per share |
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$ |
0.97 |
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$ |
0.36 |
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Diluted: |
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Diluted net earnings per share |
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$ |
0.65 |
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$ |
0.56 |
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Diluted comprehensive earnings per share |
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$ |
0.94 |
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$ |
0.35 |
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Weighted average number of common shares outstanding |
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Basic |
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25,176,221 |
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25,074,389 |
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Diluted |
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26,118,164 |
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25,653,550 |
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Cash dividends declared per common share |
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$ |
0.11 |
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$ |
0.09 |
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The accompanying notes are an integral part of the financial statements.
2
RLI Corp. and Subsidiaries Condensed Consolidated Balance Sheet
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March 31 |
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December 31 |
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(Unaudited) |
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ASSETS |
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Investments |
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Fixed maturities |
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Held-to-maturity, at amortized cost |
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$ |
177,170,988 |
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$ |
180,700,429 |
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Trading, at fair value |
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8,433,068 |
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8,405,629 |
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Available-for-sale, at fair value |
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871,085,192 |
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835,229,109 |
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Equity securities, at fair value |
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279,202,635 |
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276,021,362 |
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Short-term investments, at cost |
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51,674,691 |
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33,003,709 |
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Total investments |
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1,387,566,574 |
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1,333,360,238 |
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Accrued investment income |
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13,130,471 |
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12,914,660 |
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Premiums and reinsurance balances receivable |
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155,006,063 |
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152,859,640 |
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Ceded unearned premium |
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100,087,540 |
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101,748,341 |
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Reinsurance balances recoverable on unpaid losses |
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379,322,802 |
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372,047,884 |
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Deferred policy acquisition costs |
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65,618,273 |
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63,737,449 |
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Property and equipment |
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18,267,712 |
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18,615,651 |
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Investment in unconsolidated investee |
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31,884,550 |
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30,683,166 |
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Goodwill and indefinite-lived intangibles |
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26,214,491 |
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26,214,491 |
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Other assets |
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14,486,711 |
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22,182,273 |
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TOTAL ASSETS |
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$ |
2,191,585,187 |
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$ |
2,134,363,793 |
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LIABILITIES AND SHAREHOLDERS’ EQUITY |
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Liabilities: |
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Unpaid losses and settlement expenses |
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$ |
943,505,534 |
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903,440,601 |
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Unearned premiums |
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363,249,467 |
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367,642,210 |
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Reinsurance balances payable |
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78,303,591 |
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92,382,139 |
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Notes payable, short-term debt |
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47,560,000 |
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47,560,000 |
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Income taxes-current |
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12,690,397 |
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7,151,884 |
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Income taxes-deferred |
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42,008,831 |
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38,818,180 |
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Bonds payable, long-term debt |
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100,000,000 |
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100,000,000 |
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Other liabilities |
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28,155,677 |
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23,234,578 |
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TOTAL LIABILITIES |
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1,615,473,497 |
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1,580,229,592 |
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Shareholders’ Equity |
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Common stock ($1 par value) (30,975,607 shares issued at 3/31/04) (30,957,837 shares issued at 12/31/03) |
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30,975,607 |
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