UNITED STATES
SECURITIES AND
EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
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QUARTERLY REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE |
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For the quarterly period ended June 30, 2004 |
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OR |
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TRANSITION REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE |
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For the transition period from to |
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Commission File Number: 1-8993 |
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SAFETY INSURANCE GROUP, INC.
(Exact name of registrant as specified in its charter)
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Delaware |
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13-4181699 |
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(State or other jurisdiction of incorporation or organization) |
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(I.R.S. Employer Identification No.) |
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20 Custom House Street, Boston, Massachusetts 02110 |
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(Address of principal executive offices including zip code) |
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(617) 951-0600 |
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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. 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). Yes ý No o
As of August 6, 2004, 15,353,605 Common Shares with a par value of $0.01 per share were outstanding.
SAFETY INSURANCE GROUP, INC.
Table of Contents
2
PART I. FINANCIAL INFORMATION
Safety Insurance Group, Inc. and Subsidiaries
(Dollars in thousands, except share data)
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June 30, |
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December 31, |
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(Unaudited) |
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Assets |
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Investment securities available for sale: |
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Fixed maturities, at fair value (amortized cost: $643,456 and $654,175, respectively) |
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$ |
646,756 |
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$ |
673,636 |
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Cash and cash equivalents |
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89,455 |
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26,284 |
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Accounts receivable, net of allowance for doubtful accounts |
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159,072 |
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134,145 |
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Accrued investment income |
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6,927 |
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7,224 |
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Taxes receivable |
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1,390 |
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1,484 |
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Receivable from reinsurers related to paid loss and loss adjustment expenses |
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21,563 |
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47,503 |
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Receivable from reinsurers related to unpaid loss and loss adjustment expenses |
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80,461 |
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73,539 |
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Prepaid reinsurance premiums |
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42,856 |
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33,474 |
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Deferred policy acquisition costs |
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45,872 |
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40,177 |
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Deferred income taxes |
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15,078 |
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8,692 |
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Equity and deposits in pools |
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36,015 |
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26,989 |
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Other assets |
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3,120 |
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3,149 |
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Total assets |
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$ |
1,148,565 |
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$ |
1,076,296 |
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Liabilities |
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Loss and loss adjustment expense reserves |
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$ |
421,564 |
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$ |
383,551 |
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Unearned premium reserves |
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357,123 |
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301,227 |
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Accounts payable and accrued liabilities |
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23,173 |
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37,497 |
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Outstanding claims drafts |
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19,554 |
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20,045 |
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Payable to reinsurers |
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35,066 |
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45,338 |
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Capital lease obligations |
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592 |
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662 |
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Debt |
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19,956 |
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19,956 |
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Total liabilities |
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877,028 |
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808,276 |
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Commitments and contingencies (Note 6) |
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Shareholders’ equity |
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Common stock: $0.01 par value; 30,000,000 shares authorized; and 15,353,405 shares and 15,259,991 shares issued and outstanding, respectively |
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154 |
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153 |
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Additional paid-in capital |
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111,464 |
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111,074 |
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Accumulated other comprehensive income, net of taxes |
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2,145 |
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12,650 |
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Promissory notes receivable from management |
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— |
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(34 |
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Retained earnings |
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157,774 |
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144,177 |
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Total shareholders’ equity |
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271,537 |
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268,020 |
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Total liabilities and shareholders’ equity |
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$ |
1,148,565 |
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$ |
1,076,296 |
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The accompanying notes are an integral part of these financial statements
3
Safety Insurance Group, Inc. and Subsidiaries
Consolidated Statements of Operations
(Unaudited)
(Dollars in thousands, except per share and share data)
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Three Months Ended |
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Six Months Ended |
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2004 |
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2003 |
2004 |
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2003 |
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Net earned premiums |
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$ |
146,584 |
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$ |
133,271 |
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$ |
290,510 |
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$ |
265,341 |
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Investment income |
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6,633 |
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6,959 |
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13,456 |
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13,988 |
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Net realized gains on investments |
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87 |
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10,100 |
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604 |
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9,371 |
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Finance and other service income |
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3,855 |
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