10-K/A 1 a2078179z10-ka.htm FORM 10-K/A
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K/A
AMENDMENT NO. 1

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(  )
OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2001
Commission file number 000-2348

ESG RE LIMITED
(Exact name of registrant as specified in its charter)

Bermuda
(State or other jurisdiction of
Incorporation of organization)		   Not Applicable
(I.R.S. Employer Identification No.)

16 Church Street
Hamilton HM11, Bermuda
(Address of executive offices, zip code)

(441) 295-2185
(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Common Shares, $1.00 par value

Name of each exchange on which registered
Nasdaq National Market

Securities registered pursuant to Section 12(g) of the Act: None

        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 if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. Yes ý    No o

        The aggregate market value of the voting stock held by non-affiliates of the Registrant, as of March 15, 2002, was $33,365,143 based on the closing price of $3.85 on that date.

        The number of the Registrant's common shares (par value $1.00 per share) outstanding as of March 15, 2002, was 11,831,818.

        The sole purpose of this Amendment No. 1 is to file SCHEDULE II—CONDENSED FINANCIAL INFORMATION OF THE REGISTRANT and SCHEDULE IV—REINSURANCE to the Annual Report on Form 10-K filed by the Registrant on April 1, 2002.


PART IV.
ITEM 14.    SCHEDULE II—CONDENSED FINANCIAL INFORMATION OF THE REGISTRANT
CONDENSED BALANCE SHEET
(U.S. dollars in thousands except share and per share data)

 
   December 31,
2001
   December 31,
2000
  
ASSETS              
Investments — available for sale, at fair value (cost: $5,661 and $7,909)   $ 5,592   $ 7,762  
Cash and cash equivalents     851     239  
Investments in subsidiaries, at equity in the underlying net assets     92,791     88,391  
Other investments     4,831     16,310  
   
 
 
  Total investments and cash     104,065     112,702  
Accrued investment income     57     564  
Intangible assets     —     1,355  
Due from affiliates     —     2,438  
Other assets     1,226     146  
   
 
 
TOTAL ASSETS   $ 105,348   $ 117,205  
   
 
 
LIABILITIES              
Due to affiliates     2,854     —  
Other liabilities     1,722     789  
   
 
 
  Total liabilities     4,576     789  
   
 
 
SHAREHOLDERS' EQUITY              
Preference shares, 50,000,000 shares authorized; no shares issued and outstanding for 2001 and 2000     —     —  
Class B common shares, 100,000,000 shares authorized; no shares issued and outstanding for 2001 and 2000     —     —  
Common shares, par value $1 per share; 100,000,000 shares authorized; 11,831,063 shares issued and outstanding for 2001 and 11,777,086 shares issued and outstanding for 2000     11,831     11,777  
Additional paid-in capital     208,221     208,539  
Unearned compensation     (333 )   (893 )
Accumulated other comprehensive income:              
  Foreign currency translation adjustments     —     —  
  Unrealized gains on securities, net of tax     (16 )   (516 )
   
 
 
Accumulated other comprehensive income     (16 )   (516 )
   
 
 
Retained (deficit)     (118,931 )   (102,491 )
   
 
 
  Total shareholders' equity     100,772     116,416  
   
 
 
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY   $ 105,348   $ 117,205  
   
 
 

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PART IV.
ITEM 14.    SCHEDULE II—CONDENSED FINANCIAL INFORMATION OF THE REGISTRANT
CONDENSED STATEMENT OF OPERATIONS
(U.S. dollars in thousands)

 
   For Years Ended December 31,
  
 
   2001
   2000
   1999
  
REVENUES                    
Net investment income     724     1,097     3,978  
Gain/(loss) on equity investments     (2,682 )   181     (205 )
Net realized investment gain/(loss)     (12,274 )   (938 )   (526 )
Equity in undistributed change in retained earnings of subsidiaries     5,244     —     —  
   
 
 
 
      (8,988 )   340     3,247  
EXPENSES                    
Other expenses     7,452     12,951     20,919  
Equity in undistributed change in retained earnings of subsidiaries     —     49,185     24,322  
   
 
 
 
INCOME (LOSS) BEFORE TAXES     (16,440 )   (61,796 )   (41,994 )
Income tax expense     —     —     —  
   
 
 
 
NET INCOME (LOSS)   $ (16,440 ) $ (61,796 ) $ (41,994 )
   
 
 
 

3


PART IV.
ITEM 14. SCHEDULE II—CONDENSED FINANCIAL INFORMATION OF THE REGISTRANT
CONDENSED STATEMENT OF CASHFLOWS
(U.S. dollars in thousands)

 
   For Years Ended December 31,
  
 
   2001
   2000
   1999
  
CASH FLOWS FROM OPERATING ACTIVITIES                    
Net cash used by operating activities   $ (3,962 ) $ (10,496 ) $ (7,430 )
   
 
 
 
CASH FLOWS FROM INVESTING ACTIVITIES                    
  Cost of fixed maturity investments acquired — available for sale     (10,718 )   (4,476 )   (45,635 )
  Proceeds from sale of fixed maturity investments — available for sale     13,142     23,883     79,834  
  Funding of other investments     —     (6,345 )   (4,678 )
  Proceeds from other investments     500     800     —  
  Disposals/(purchases) of intangible assets     1,355     (1,355 )   —  
   
 
 
 
Net cash provided/(used) by investing activities     4,279     12,507     29,521  
   
 
 
 
CASH FLOWS FROM FINANCING ACTIVITIES                    
  Dividends paid     —     (2,859 )   (3,342 )
  Grant/repurchase of common shares     295     (542 )   (17,316 )
   
 
 
 
Net cash used in financing activities     295     (3,401 )   (20,658 )
   
 
 
 
Net increase/(decrease) in cash     612     (1,390 )   1,433  
Cash and cash equivalents at January 1     239     1,629     196  
   
 
 
 
Cash and cash equivalents at December 31   $ 851   $ 239   $ 1,629  
   
 
 
 

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PART IV.
ITEM 14.    SCHEDULE IV—REINSURANCE
(Dollars in thousands)

 
   Gross amount
   Ceded to
other companies
   Assumed
from other companies
   Net
amount
   Percentage
of amount
assumed to net
As at December 31, 2001                            
Total accident and health insurance earned premium   $ 8,699   $ 7,341   $ 151,862   $ 153,220   99.1%

As at December 31, 2000
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total accident and health insurance earned premium   $ 25,662   $ 22,046   $ 233,004   $ 236,620   98.5%

As at December 31, 1999
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total accident and health insurance earned premium   $ 7,701   $ 6,748   $ 248,172   $ 249,125   99.6%

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SIGNATURES

        Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized

Dated: April 26, 2002

 
 
ESG RE LIMITED

 
 
By:
/s/  CONOR HEERY      
Name: Conor Heery
Title: Controller and Chief Accounting Officer

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PART IV. ITEM 14. SCHEDULE II—CONDENSED FINANCIAL INFORMATION OF THE REGISTRANT CONDENSED BALANCE SHEET (U.S. dollars in thousands except share and per share data)
PART IV. ITEM 14. SCHEDULE II—CONDENSED FINANCIAL INFORMATION OF THE REGISTRANT CONDENSED STATEMENT OF OPERATIONS (U.S. dollars in thousands)
PART IV. ITEM 14. SCHEDULE II—CONDENSED FINANCIAL INFORMATION OF THE REGISTRANT CONDENSED STATEMENT OF CASHFLOWS (U.S. dollars in thousands)
PART IV. ITEM 14. SCHEDULE IV—REINSURANCE (Dollars in thousands)
SIGNATURES