-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Mv4DHlUK+VyJYg7/2KE9izFV+MF6aIn6O2uZ0T4Dx8DmYGD32gAHJWc+Dq3YIrS/ BtPgP2Zd6+1rt+Qp9euYjw== 0000950172-03-001495.txt : 20030508 0000950172-03-001495.hdr.sgml : 20030508 20030508171223 ACCESSION NUMBER: 0000950172-03-001495 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20030508 ITEM INFORMATION: Other events ITEM INFORMATION: Regulation FD Disclosure FILED AS OF DATE: 20030508 FILER: COMPANY DATA: COMPANY CONFORMED NAME: OHIO CASUALTY CORP CENTRAL INDEX KEY: 0000073952 STANDARD INDUSTRIAL CLASSIFICATION: FIRE, MARINE & CASUALTY INSURANCE [6331] IRS NUMBER: 310783294 STATE OF INCORPORATION: OH FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-05544 FILM NUMBER: 03688653 BUSINESS ADDRESS: STREET 1: 9450 SEWARD ROAD CITY: FAIRFIELD STATE: OH ZIP: 45014 BUSINESS PHONE: 5136032600 MAIL ADDRESS: STREET 1: 9450 SEWARD ROAD CITY: FAIRFIELD STATE: OH ZIP: 45014 8-K 1 s754976.txt =============================================================================== SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): May 8, 2003 OHIO CASUALTY CORPORATION (Exact name of Registrant as specified in its charter) Ohio 0-5544 31-0783294 (State of incorporation) (Commission file number) (I.R.S. employer identification no.) 9450 Seward Road Fairfield, Ohio 45014 (Address of principal executive offices) (Zip code) (513) 603-2600 (Registrant's telephone number, including area code) Not Applicable (Former name or former address, if changed since last report) ================================================================================ Item 5. Other Events Item 12. Results of Operations and Financial Condition The Securities and Exchange Commission (the "SEC") recently issued Regulation G and amended Item 10 of Regulation S-K concerning the use of non-GAAP financial measures. These regulations became effective on March 28, 2003. Prior to the effective date of the regulations, Ohio Casualty Corporation (the "Corporation") included in its Annual Report on Form 10-K for the fiscal year ended December 31, 2002 (the "Form 10-K") references to statutory accounting information, which are financial measures that are required to be filed with insurance industry regulators, and non-GAAP financial measures, which include operating income and after-tax realized investment gain. In anticipation of the filing of registration statements that incorporate by reference information from the Corporation's Form 10-K, the Corporation is filing this Form 8-K solely for the purpose of conforming the Form 10-K to the new requirements of SEC Regulation G and Item 10 of Regulation S-K. Management uses statutory information and non-GAAP financial measures to analyze operating results, compare other insurance company results, and to compare insurance industry data. Due to the degree of regulation in the insurance industry and the impact of regulation on an insurance company's business, it is useful to view financial performance and capital adequacy in terms of financial measures used by insurance regulators. The Corporation included in its Form 10-K statutory accounting financial measures and non-GAAP financial measures in its description of its business and in Management's Discussion and Analysis ("MD&A") of financial condition and results of operations. For additional information on the differences between statutory accounting principles and generally accepted accounting principles ("GAAP"), refer to item 16 on pages 67 and 68 of the Corporation's Form 10-K. The primary statutory accounting financial measures are reconciled to GAAP basis data on the Corporation's consolidated statement of income statement in the following table.
Ohio Casualty Corporation & Subsidiaries Statutory Property and Casualty Results Reconciled to Consolidated GAAP Basis (In thousands) Year Ended December 31 2002 2001 2000 ---- ---- ---- Net premiums written-thousands (NPW) $1,448,628 $1,472,185 $1,505,393 Decrease in liability for unearned premiums 1,749 33,994 27,628 ------------------------------------------ Net premiums earned-thousands (NPE) 1,450,377 1,506,179 1,533,021 Investment Income less expenses 205,794 211,017 201,812 Investment gains (losses) realized, net 53,011 198,298 (5,904) ------------------------------------------ Total revenues-Statutory Basis 1,709,182 1,915,494 1,728,929 Statutory to GAAP adjustment and non-property and casualty revenues (6,390) (13,491) 7,740 ------------------------------------------ Total revenues-GAAP Basis 1,702,792 1,902,003 1,736,669 Losses incurred -thousands 902,201 1,001,590 1,116,270 -ratio to NPE 62.2% 66.5% 72.8% Loss adjustment expenses -thousands 227,081 202,444 177,894 -ratio to NPE 15.7% 13.4% 11.6% Underwriting expenses -thousands 506,204 520,833 523,477 -ratio to NPW 34.9% 35.4% 34.8% ------------------------------------------ Combined ratio 112.8% 115.3% 119.2% ------------------------------------------ Total expenses-Statutory Basis 1,635,486 1,724,867 1,817,641 Statutory to GAAP adjustment and non-property and casualty expenses 74,012 50,748 48,730 ------------------------------------------ Total expenses-GAAP Basis 1,709,498 1,775,615 1,866,371
In describing its business and in its MD&A in its Form 10-K, the Corporation includes the statutory accounting financial measure of net premiums written to describe and discuss insurance underwriting related revenues. This financial measure includes the premium amount for the insurance policy transactions recorded during that accounting period, and such policies may include coverage during other accounting periods. Net premiums written are adjusted as shown in the table above to reflect premiums earned during the accounting period based on the policy coverage period. Where net premiums written are shown the most comparable GAAP financial measure is premiums earned. In the Corporation's ten-year summary of operations, the statutory financial measures of net premiums written, statutory combined ratio and component ratios of the combined ratio are reconciled to the most comparable GAAP financial measures in the table above. Statutory policyholders surplus is a statutory financial measure required by regulators to measure capital adequacy. The most comparable GAAP financial measure is shareholder's equity. Statutory policyholders surplus is also included in the Corporation's description of its business and in its MD&A. The non-GAAP financial measures are reconciled to GAAP basis data on the Corporation's consolidated statement of income statement in the following table.
Ohio Casualty Corporation & Subsidiaries Other Reconciliations for 8-K (In thousands) Year Ended December 31 2002 2001 2000 After-tax realized investment gains 29,375 135,011 (1,554) Add back: income taxes on realized investment gains 15,817 47,929 (837) ----------------------------------- Investment gains (losses) realized, net 45,192 182,940 (2,391) (In thousands) Year Ended December 31 2002 2001 2000 Operating Income (30,266) (36,431) (77,695) Add back: after-tax realized investment gains 29,375 135,011 (1,554) ----------------------------------- Net income (loss) (891) 98,580 (79,249)
In describing its business and in its MD&A in its Form 10-K, the Corporation includes the non-GAAP financial measure of after-tax realized investment gains to describe and discuss investment results. The most comparable GAAP financial measure is investment gains (losses) realized, which is on a before-tax basis. The Corporation used in its MD&A in its Form 10-K, the non-GAAP financial measure of operating income. The most comparable GAAP financial measure is net income. Operating income differs from net income by the exclusion of realized investment gains (losses), net of tax. The timing of realized investment gains and losses can be influenced by management action for a variety of business reasons and therefore management believes it is important to understand the impact of realized investment gains on its operating results in order to measure current operating performance. Many analysts who follow the insurance industry use the above definition of operating income for their earnings forecasts and have done so for many years. Investors have been encouraged to evaluate the impact of realized gains and losses on net income in the insurance sector. In the MD&A disclosure in the Form 10-K, the combined ratio is shown as excluding New Jersey personal auto results or as excluding the 2001 New Jersey renewal obligation transfer fee. Management analyzes the impact of New Jersey personal auto results separately from other business because it stopped writing business in the New Jersey personal auto market beginning in March 2002 and management believes it has greater control of results in other markets where it is still pricing and selling its insurance products. The combined ratios impacted by the above described exclusion are shown on the following table on a basis that includes New Jersey personal auto results and the 2001 New Jersey renewal obligation transfer fee. The following table shows ratios that include New Jersey.
Statutory Combined Ratios (by operating segment, Accident Accident Accident including Year Year Year selected major product lines) 2002 2002(a) 2001 2001(a) 2000 2000(a) ================================================================================================== Personal Lines 114.1% 111.8% 119.2% 116.7% 113.5% 117.3% Personal Auto 116.3% 113.6% 118.9% 117.0% 111.9% 114.9% - -------------------------------------------------------------------------------------------------- Total All Lines 112.8% 106.9% 115.3% 110.4% 119.2% 118.1% ================================================================================================== (a) The measurement date for Accident Year data is December 31, 2002.
Item 5. Other Events On May 8, 2003, the Corporation issued a press release announcing a Universal Shelf Registration on Form S-3. A copy of the press release is attached hereto as Exhibit 99.1. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. OHIO CASUALTY CORPORATION (Registrant) Dated: May 8, 2003 By: /s/ Debra K. Crane ------------------------------ Debra K. Crane Senior Vice President, General Counsel and Secretary INDEX TO EXHIBITS Exhibit Number Description of Exhibits - ------ ----------------------- 23.1 Consent of Ernst & Young LLP. 99.1 Press release, dated May 8, 2003. EX-23 3 exh23_1.txt EX. 23.1 Exhibit 23.1 CONSENT OF INDEPENDENT AUDITORS ------------------------------- We consent to the incorporation by reference on Form 8-K of the Ohio Casualty Corporation of our reports dated February 14, 2003, with respect to the consolidated financial statements of Ohio Casualty Corporation incorporated by reference in its Annual Report (Form 10-K) for the years ended December 31, 2002 and 2001, and the related financial statement schedules included therein, filed with the Securities and Exchange Commission. /s/ Ernst & Young, LLP Cincinnati, Ohio May 8, 2003 EX-99 4 ohioex99_1.txt EX. 99.1 Exhibit 99.1 Analyst contact: Dennis E. McDaniel Vice President and Controller 513-603-2197 dennis.mcdaniel@ocas.com Media contact: Cindy L. Denney Assistant Vice President, Corporate Communications 513-603-2074 (ofc.), 513-703-7372 (cell) cindy.denney@ocas.com For Immediate Release - --------------------- OHIO CASUALTY CORPORATION FILES UNIVERSAL SHELF REGISTRATION STATEMENT FAIRFIELD, Ohio, May 8, 2003 --- Ohio Casualty Corporation (NASDAQ:OCAS) announced today that it has filed a universal shelf registration statement on Form S-3 with respect to the issuance of up to $500 million of securities, including debt securities, common and preferred shares, warrants and share purchase contracts and units, as well as trust preferred securities or a combination of the above. This registration statement, when effective, will replace the company's previously filed shelf and provide the company greater flexibility and access to capital markets in the future. Although the company has no intention currently to issue securities from the new filing, after the registration statement becomes effective, the company may issue securities for general corporate purposes. The registration statement relating to the securities has been filed with the Securities and Exchange Commission but has not yet become effective. Securities may not be sold, nor may offers to buy be accepted, prior to the time the registration statement becomes effective. Once effective, the securities may be offered in one or more series, in amounts, at prices and on terms to be set forth in the prospectus contained in the registration statement and in one or more supplements to the prospectus. This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the securities in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state. Corporate Profile Ohio Casualty Corporation is the holding company of The Ohio Casualty Insurance Company, which is one of six property-casualty subsidiary companies that make up Ohio Casualty Group. The Ohio Casualty Insurance Company was founded in 1919 and is licensed in 49 states. The Group's member companies write auto, home and business insurance. -----END PRIVACY-ENHANCED MESSAGE-----