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(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For Fiscal Year Ended December 31, 2002
COMMISSION FILE NO. 0-15981
HILB, ROGAL AND HAMILTON COMPANY
(Exact name of registrant as specified in its charter)
Virginia (State or other jurisdiction of incorporation or organization) 4951 Lake Brook Drive, Suite 500 Glen Allen, Virginia (Address of principal executive offices) | 54-1194795 (I.R.S. Employer Identification No.) 23060 (Zip Code) |
(804) 747-6500
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of Class Common Stock, no par value | Name of Exchange on Which Registered New York Stock Exchange |
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 X No _____
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 [ ].
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act).
Yes X No _____
State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter.
$1,039,821,289 as of June 28, 2002
Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date.
Class Common Stock, no par value | Outstanding at March 3, 2003 33,849,203 |
Documents Incorporated by Reference
Portions of the registrant’s Proxy Statement for the 2003 Annual Meeting of Shareholders are incorporated by reference into Part III hereof.
EXPLANATORY NOTE
Hilb, Rogal and Hamilton Company (the “Company”) hereby amends its Annual Report on Form 10-K for the fiscal year ended December 31, 2002 (the “Form 10-K”) (filed on March 28, 2003) as set forth in this Annual Report on Form 10-K/A (Amendment No. 1) (the “Form 10-K/A”). This Form 10-K/A includes amendments to the following sections of the Form 10-K to correct typographical and related errors:
1.
Item 8. Financial Statements and Supplementary Data. This Item is included in the Form 10-K/A following the signature page and the Rule 13a-14 certifications. The only changes are:
(a)
Page F-3 of the Consolidated Financial Statements. Under “Net Income Per Share – Assuming Dilution:”, the figure for “Cumulative effect of accounting change, net of tax” in the column for 2002 has been changed; and
(b)
Page F-23, Note L to the Consolidated Financial Statements. The pro forma per share figures under “Income per share before cumulative effect of accounting change and extraordinary item” and “Net income per share” in the column for 2002 have been changed.
2.
Item 15. Exhibits, Financial Statement Schedules and Reports on Form 8-K. This Item is amended to reflect the addition of updated Exhibits, numbers 23, 99.1 and 99.2.
3.
Exhibit Index. The Exhibit Index has been amended to reflect the addition of updated Exhibits, numbers 23, 99.1 and 99.2.
2
PART II
ITEM 8.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The response to this Item is submitted in a separate section of this report.
3
PART IV
ITEM 15.
EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a)
(1) and (2). The response to this portion of Item 15 is submitted as a separate section of this report.
(a)
(3) 2002 Exhibits
Exhibit No. | Document |
2.1 | Purchase Agreement, dated May 10, 2002, by and among the Company, Hobbs, LLC (Hobbs), the members of Hobbs (other than Hobbs IRA Corp. (HIRAC)) and the shareholders of HIRAC (incorporated by reference to Exhibit 2.1 to the Company’s Form 8-K dated July 16, 2002, File No. 0-15981) |
3.1 | Articles of Incorporation (incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S-3, File No. 33-56488, effective March 1, 1993) |
3.2 | Amended and Restated Bylaws (incorporated by reference to Exhibit 3.2 to the Company’s Form 10-K for the year ended December 31, 1998, File No. 0-15981) |
10.1 | Risk Management Agreement dated as of May 3, 1999 by and between Phoenix Home Life Mutual Insurance Company and the Company (incorporated by reference to Exhibit 10.3 to the Company’s Form 10-Q for the quarter ended March 31, 1999, File No. 0-15981) |
10.2 | Hilb, Rogal and Hamilton Company 2000 Stock Incentive Plan (incorporated by reference to Exhibit A of the Company’s definitive Proxy Statement for the Annual Meeting of Shareholders held on May 2, 2000) |
10.3 | Hilb, Rogal and Hamilton Company 1989 Stock Plan, as amended and restated (incorporated by reference to Exhibit 10.7 to the Company’s Form 10-K for the year ended December 31, 1998, File No. 0-15981) |
4
Exhibit No. | Document |
10.4 | Hilb, Rogal and Hamilton Company Non-employee Directors Stock Incentive Plan, as amended and restated (incorporated by reference to Exhibit 10.10 to the Company’s Form 10-K for the year ended December 31, 1998, File No. 0-15981) |
10.5 | Amended and Restated Voting and Standstill Agreement dated as of November 7, 2002 made by and among the Company, The Phoenix Companies, Inc., Phoenix Life Insurance Company and PM Holdings, Inc. (incorporated by reference to Exhibit 10.1 to the Company’s Form 10-Q for the quarter ended September 30, 2002, File No. 0-15981) |
10.6 | Form of Change of Control Employment Agreement for the following executive officers: Andrew L. Rogal, Timothy J. Korman, Martin L. Vaughan, III, Carolyn Jones, Walter L. Smith, Vincent P. Howley, Henry C. Kramer, Robert W. Blanton, Jr., A. Brent King and William C. Widhelm (incorporated by reference to Exhibit 10.12 to the Company’s Form 10-K for the year ended December 31, 1998, File No. 0-15981) |
10.7 | Form of Change of Control Employment Agreement for the following executive officers: John P. McGrath, William C. Chaufty, Steven C. Deal, Michael A. Janes, Robert B. Lockhart, Benjamin A. Tyler, Karl E. Manke and Richard F. Galardini (incorporated by reference to Exhibit 10.13 to the Company’s Form 10-K for the year ended December 31, 1998, File No. 0-15981) |
10.8 | Form of Hilb, Rogal and Hamilton Employee Non-qualified Stock Option Agreement with schedule of optionees and amounts of options granted (incorporated by reference to Exhibit 10.28 to the Company’s Form 10-K for the year ended December 31, 2000, File No. 0-15981) |
10.9 | Form of Hilb, Rogal and Hamilton Restricted Stock Agreement with schedule of grantees and amounts of restricted stock granted (incorporated by reference to Exhibit 10.29 to the Company’s Form 10-K for the year ended December 31, 2000, File No. 0-15981) |
5
Exhibit No. | Document |
10.10 | Form of Split-Dollar Agreement for the following executive officers: Andrew L. Rogal, Timothy J. Korman and John P. McGrath (incorporated by reference to Exhibit 10.30 to the Company’s Form 10-K for the year ended December 31, 2000, File No. 0-15981) |
10.11 | Form of Split-Dollar Agreement for the following named executive officers: Martin L. Vaughan, III and Steven C. Deal (incorporated by reference to Exhibit 10.31 to the Company’s Form 10-K for the year ended December 31, 2000, File No. 0-15981) |
10.12 | Second Amended and Restated Credit Agreement dated July 1, 2002 among the Company, as Borrower; the lenders named therein; Wachovia Bank, National Association (formerly known as First Union National Bank), as administrative agent; PNC Bank, National Association, as documentation agent; and Bank of America Securities, LLC, as syndication agent (incorporated by reference to Exhibit 99.1 to the Company’s Form 8-K dated July 16, 2002, File No. 0-15981) |
10.13 | Amended and restated Consulting Agreement between the Company and Robert H. Hilb (incorporated by reference to Exhibit 10.3 to the Company’s Form 10-Q for the quarter ended June 30, 2002, File No. 0-15981) |
10.14 | Senior Executive Employment Agreement of Andrew L. Rogal dated December 1, 2001 by and between Hilb, Rogal and Hamilton Company and Andrew L. Rogal (incorporated by reference to Exhibit 10.19 to the Company’s Form 10-K for the year ended December 31, 2001, File No. 0-15981) |
10.15 | Senior Executive Employment Agreement of Martin L. Vaughan, III dated December 1, 2001 by and between Hilb, Rogal and Hamilton Company and Martin L. Vaughan, III (incorporated by reference to Exhibit 10.20 to the Company’s Form 10-K for the year ended December 31, 2001, File No. 0-15981) |
6
Exhibit No. | Document |
10.16 | Senior Executive Employment Agreement of John P. McGrath dated December 1, 2001 by and between Hilb, Rogal and Hamilton Company and John P. McGrath (incorporated by reference to Exhibit 10.21 to the Company’s Form 10-K for the year ended December 31, 2001, File No. 0-15981) |
10.17 | Senior Executive Employment Agreement of Timothy J. Korman dated December 1, 2001 by and between Hilb, Rogal and Hamilton Company and Timothy J. Korman (incorporated by reference to Exhibit 10.22 to the Company’s Form 10-K for the year ended December 31, 2001, File No. 0-15981) |
10.18 | Senior Executive Employment Agreement with Thomas A. Golub entered into May 10, 2002 (incorporated by reference to Exhibit 99.3 to the Company’s Form 8-K dated July 16, 2002, File No. 0-15981) |
10.19 | Employment Agreement of Steven C. Deal** |
10.20 | Hilb, Rogal and Hamilton Company Executive Voluntary Deferral Plan, as amended and restated effective November 25, 2002 (incorporated by reference to Exhibit 4.3 to the Company’s Registration Statement on Form S-8 dated February 14, 2003, File No. 333-103262) |
10.21 | Hilb, Rogal and Hamilton Company Outside Directors Deferral Plan, as amended and restated effective January 1, 2002 (incorporated by reference to Exhibit 4.3 to the Company’s Amendment No. 1 to Form S-8 dated February 12, 2002, File No. 333-74344) |
10.22 | Form of Hilb, Rogal and Hamilton Company Employee Non-Qualified Stock Option Agreement with schedule of optionees and amounts of options granted (incorporated by reference to Exhibit 10.25 to the Company’s Form 10-K for the year ended December 31, 2001, File No. 0-15981) |
7
Exhibit No. | Document |
10.23 | Form of Hilb, Rogal and Hamilton Company Restricted Stock Agreement with schedule of grantees and amounts of restricted stock granted (incorporated by reference to Exhibit 10.26 to the Company’s Form 10-K for the year ended December 31, 2001, File No. 0-15981) |
10.24 | Form of Hilb, Rogal and Hamilton Company Employee Non-Qualified Stock Option Agreement with schedule of optionees and amounts of options granted** |
10.25 | Form of Hilb, Rogal and Hamilton Company Restricted Stock Agreement with schedule of grantees and amounts of restricted stock granted** |
10.26 | Hilb, Rogal and Hamilton Company Supplemental Executive Retirement Plan, as amended and restated effective January 1, 2002 (incorporated by reference to Exhibit 10.27 to the Company’s Form 10-K for the year ended December 31, 2001, File No. 0-15981) |
10.27 | Hilb, Rogal and Hamilton Company Employee Stock Purchase Plan, as amended and restated, effective November 25, 2002 (incorporated by reference to Exhibit 4.3 to the Company’s Registration Statement on Form S-8 dated February 13, 2003, File No. 333-103191) |
10.28 | Registration Rights Agreement dated as of May 3, 1999 by and between the Company, PM Holdings, Inc., and Phoenix Home Life Mutual Insurance Company (incorporated by reference to Exhibit 10.6 to the Company’s Form 10-Q for the quarter ended March 31, 1999, File No. 0-15981) |
10.29 | Retirement Agreement by and between the Company and Andrew L. Rogal dated March 25, 2003** |
18.1 | Letter from Independent Auditors regarding preferability of accounting principle change (incorporated by reference to Exhibit 18.1 to the Company’s Form 10-Q for the quarter ended March 31, 2002, File No. 0-15981) |
8
Exhibit No. | Document |
21 | Subsidiaries of Hilb, Rogal and Hamilton Company** |
23 | Consent of Ernst & Young LLP* |
99.1 | Certification Statement of Chief Executive Officer pursuant to 18 U.S.C. Section 1350* |
99.2 | Certification Statement of Chief Financial Officer pursuant to 18 U.S.C. Section 1350* |
* Filed Herewith
**Previously Filed
(b)
Reports on Form 8-K
No reports on Form 8-K were filed during the fourth quarter of 2002.
(c)
Exhibits
The response to this portion of Item 15 as listed in Item 15(a)(3) above is submitted as a separate section of this report.
(d)
Financial Statement Schedules
The response to this portion of Item 15 is submitted as a separate section of this report.
9
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant, Hilb, Rogal and Hamilton Company, has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
HILB, ROGAL AND HAMILTON COMPANY
By:
/s/ Carolyn Jones
Carolyn Jones, Senior Vice President,
Chief Financial Officer and Treasurer
Date:
April 18, 2003
10
CERTIFICATIONS
I, Andrew L. Rogal, Chief Executive Officer of Hilb, Rogal and Hamilton Company, certify that:
1.
I have reviewed this annual report on Form 10-K of Hilb, Rogal and Hamilton Company;
2.
Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;
3.
Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;
4.
The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a)
designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;
b)
evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the “Evaluation Date”); and
c)
presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;
5.
The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):
a)
all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and
b)
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and
6.
The registrant’s other certifying officers and I have indicated in this annual report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.
Date
April 16, 2003
/s/ Andrew L. Rogal
Andrew L. Rogal
Chief Executive Officer
11
I, Carolyn Jones, Senior Vice President, Chief Financial Officer and Treasurer of Hilb, Rogal and Hamilton Company, certify that:
1.
I have reviewed this annual report on Form 10-K of Hilb, Rogal and Hamilton Company;
2.
Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;
3.
Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;
4.
The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a)
designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;
b)
evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the “Evaluation Date”); and
c)
presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;
5.
The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):
a)
all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and
b)
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and
6.
The registrant’s other certifying officers and I have indicated in this annual report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.
Date
April 16, 2003
/s/ Carolyn Jones
Carolyn Jones
Senior Vice President, Chief
Financial Officer and Treasurer
12
ANNUAL REPORT ON FORM 10-K
ITEM 8, ITEMS 15 (a)(1) AND (2) AND (d)
INDEX OF FINANCIAL STATEMENTS AND
FINANCIAL STATEMENT SCHEDULES
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
FINANCIAL STATEMENT SCHEDULES
CERTAIN EXHIBITS
YEAR ENDED DECEMBER 31, 2002
HILB, ROGAL AND HAMILTON COMPANY
GLEN ALLEN, VIRGINIA
13
HILB, ROGAL AND HAMILTON COMPANY AND SUBSIDIARIES
INDEX TO FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES
The following consolidated financial statements of Hilb, Rogal and Hamilton Company and subsidiaries are included in Item 8 of this report:
Page
Report of Independent Auditors…………………………………………………………………………………………….F-1
Consolidated Balance Sheet, December 31, 2002 and 2001……………………………………………………………….F-2
Statement of Consolidated Income,
Years Ended December 31, 2002, 2001 and 2000………………………………………………………………………….F-3
Statement of Consolidated Shareholders’ Equity,
Years Ended December 31, 2002, 2001 and 2000………………………………………………………………………….F-4
Statement of Consolidated Cash Flows,
Years Ended December 31, 2002, 2001 and 2000………………………………………………………………………….F-5
Notes to Consolidated Financial Statements……………………………………………………………………………....F-6
The following consolidated financial statement schedule of Hilb, Rogal and Hamilton Company and subsidiaries is included in Item 15(d):
Page
Schedule II
Valuation and Qualifying Accounts
……………………………………………………F-26
All other schedules for which provision is made in the applicable accounting regulation of the Securities and Exchange Commission are not required under the related instructions or are inapplicable and therefore have been omitted.
14
Report of Independent Auditors
Shareholders and Board of Directors
Hilb, Rogal and Hamilton Company
We have audited the accompanying consolidated balance sheets of Hilb, Rogal and Hamilton Company and subsidiaries as of December 31, 2002 and 2001, and the related consolidated statements of income, shareholders’ equity and cash flows for each of the three years in the period ended December 31, 2002. Our audits also included the financial statement schedule listed in the Index at Item 15(d). These financial statements and schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements and schedule based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Hilb, Rogal and Hamilton Company and subsidiaries at December 31, 2002 and 2001, and the consolidated results of their operations and their cash flows for each of the three years in the period ended December 31, 2002, in conformity with accounting principles generally accepted in the United States. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein.
As discussed in Note B to the consolidated financial statements, in 2002 the Company changed its method of accounting for commissions on premiums billed and collected directly by insurance carriers on its middle-market property and casualty business and its method of accounting for goodwill and other intangible assets. Also, as discussed in Note B to the consolidated financial statements, in 2001 the Company changed its method of accounting for derivative instruments and hedging activities, and in 2000 the Company changed its method of accounting for policy cancellations.
/s/ Ernst & Young LLP
Richmond, Virginia
February 10, 2003
F-1
CONSOLIDATED BALANCE SHEET
HILB, ROGAL AND HAMILTON COMPANY AND SUBSIDIARIES
(in thousands)
December 31 | ||
2002 | 2001 | |
ASSETS | ||
CURRENT ASSETS | ||
Cash and cash equivalents, including $31,165 and $19,837, respectively, of restricted funds | $134,692 | $ 51,580 |
Investments | 1,334 | 3,500 |
Receivables: Premiums, less allowance for doubtful accounts of $5,567 and $3,374, respectively | 175,948 |
116,219 |
Other | 25,416 | 17,673 |
201,364 | 133,892 | |
Prepaid expenses and other current assets | 20,175 | 7,807 |
TOTAL CURRENT ASSETS | 357,565 | 196,779 |
INVESTMENTS |
1,260 |
1,336 |
| ||
PROPERTY AND EQUIPMENT, NET | 20,386 | 19,485 |
| ||
GOODWILL | 414,237 | 286,387 |
OTHER INTANGIBLE ASSETS | 83,283 | 33,517 |
Less accumulated amortization | 55,547 | 53,821 |
INTANGIBLE ASSETS, NET | 441,973 | 266,083 |
| ||
OTHER ASSETS | 11,840 | 10,393 |
$833,024 | $494,076 | |
| ||
LIABILITIES AND SHAREHOLDERS’ EQUITY CURRENT LIABILITIES |
| |
Premiums payable to insurance companies | $235,057 | $169,502 |
Accounts payable | 10,115 | 7,304 |
Accrued expenses | 39,142 | 20,303 |
Premium deposits and credits due customers | 33,998 | 20,940 |
Current portion of long-term debt | 5,733 | 6,996 |
TOTAL CURRENT LIABILITIES | 324,045 | 225,045 |
LONG-TERM DEBT | 177,151 | 114,443 |
OTHER LONG-TERM LIABILITIES | 21,180 | 11,786 |
SHAREHOLDERS’ EQUITY | ||
Common Stock, no par value; authorized 50,000 shares; outstanding 33,484 and 28,311 shares, respectively | 168,558 | 55,542 |
Retained earnings | 143,005 | 88,604 |
Accumulated other comprehensive income (loss) Unrealized loss on interest rate swaps, net of deferred tax benefit of $977 and $955 | (1,465) | (1,432) |
Other | 550 | 88 |
310,648 | 142,802 | |
$833,024 | $494,076 | |
See notes to consolidated financial statements.
F-2
STATEMENT OF CONSOLIDATED INCOME
HILB, ROGAL AND HAMILTON COMPANY AND SUBSIDIARIES
(in thousands, except per share amounts)
Year Ended December 31 | |||
2002 | 2001 | 2000 | |
Revenues | |||
Commissions and fees | $446,673 | $323,078 | $256,366 |
Investment income | 2,439 | 2,585 | 2,626 |
Other | 3,402 | 1,896 | 1,283 |
Non-operating gains | 212 | 2,708 | 1,844 |
452,726 | 330,267 | 262,119 | |
Operating expenses | |||
Compensation and employee benefits | 245,405 | 182,397 | 146,442 |
Other operating expenses | 80,308 | 62,095 | 50,165 |
Depreciation expense | 7,771 | 6,116 | 5,357 |
Amortization of intangibles | 5,320 | 13,868 | 12,239 |
Interest expense | 10,665 | 9,061 | 8,179 |
349,469 | 273,537 | 222,382 | |
INCOME BEFORE INCOME TAXES AND | |||
CUMULATIVE EFFECT OF ACCOUNTING | |||
CHANGE | 103,257 | 56,730 | 39,737 |
Income taxes | 42,082 | 24,381 | 17,610 |
INCOME BEFORE CUMULATIVE EFFECT OF ACCOUNTING CHANGE | 61,175 | 32,349 | 22,127 |
Cumulative effect of accounting change, net of tax | 3,944 | -- | (325) |
NET INCOME | $ 65,119 | $ 32,349 | $ 21,802 |
Net Income Per Share – Basic: | |||
Income before cumulative effect of accounting change | $2.09 | $1.18 | $0.84 |
Cumulative effect of accounting change, net of tax | 0.14 | -- | (0.01) |
Net income | $2.23 | $1.18 | $0.83 |
Net Income Per Share – Assuming Dilution: | |||
Income before cumulative effect of accounting change | $1.89 | $1.07 | $0.78 |
Cumulative effect of accounting change, net of tax | 0.12 | -- | (0.01) |
Net income | $2.01 | $1.07 | $0.77 |
See notes to consolidated financial statements.
F-3
STATEMENT OF CONSOLIDATED SHAREHOLDERS’ EQUITY
HILB, ROGAL AND HAMILTON COMPANY AND SUBSIDIARIES
(in thousands, except per share amounts)
ACCUMULATED | ||||
OTHER | ||||
COMMON | RETAINED | COMPREHENSIVE | ||
STOCK | EARNINGS | INCOME (LOSS) | ||
Balance at January 1, 2000 | $18,249 | $52,927 | $ -- | |
Issuance of 706 shares of Common Stock | 6,741 | |||
Purchase of 263 shares of Common Stock | (3,863) | |||
Income tax benefit from exercise of stock options | 1,234 | |||
Payment of dividends ($.3375 per share) | (8,868) | |||
Net income | 21,802 |
| ||
Balance at December 31, 2000 | 22,361 | 65,861 | -- | |
Issuance of 1,760 shares of Common Stock | 32,131 | |||
Purchase of 10 shares of Common Stock | (211) | |||
Income tax benefit from exercise of stock options | 1,261 | |||
Payment of dividends ($.3475 per share) | (9,606) | |||
Unrealized loss on derivative contracts, net of deferred tax benefit of $955 | (1,432) | |||
Other | 88 | |||
Net income | 32,349 | |||
Balance at December 31, 2001 | 55,542 | 88,604 | (1,344) | |
Issuance of 5,174 shares of Common Stock | 108,089 | |||
Income tax benefit from exercise of stock options | 4,927 | |||
Payment of dividends ($.3575 per share) | (10,718) | |||
Unrealized loss on derivative contracts, net of deferred tax benefit of $22 | (33) | |||
Other | 462 | |||
Net income | 65,119 | |||
Balance at December 31, 2002 | $168,558 | $143,005 | $ (915) | |
See notes to consolidated financial statements.
