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) February 13, 1995
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20th Century Industries
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(Exact name of registrant as specified in its charter)
CALIFORNIA
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(State or other jurisdiction of incorporation)
0-6964 95-1935264
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(Commission File Number) (IRS Employer Identification No.)
6301 Owensmouth Avenue, Suite 700, Woodland Hills, CA 91367
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(Address of principal executive offices)
Registrant's telephone number, including area code ( 818 ) 704 - 3700
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(Former name or address, if changed since last report) NONE
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Item 5 Other Events
On February 13, 1995, the Registrant issued the attached News Release
announcing 20th Century Industries 1994 financial results including Proposition
103 settlement and an increase to the company's earthquake claim reserves.
SIGNATURES
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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.
20TH CENTURY INDUSTRIES
Date: February 17, 1995 by John R. Bollington
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Secretary, Senior Vice President
and General Counsel
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20th Century Industries
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NEWS
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Jeanne Ouellette or
Rob Williams at 213/629-4974
Company contact: Rick Dinon
or Ric Hill at 818/704-3595
FOR IMMEDIATE RELEASE February 13, 1995
20TH CENTURY INDUSTRIES ANNOUNCES 1994 FINANCIAL RESULTS
(WOODLAND HILLS, CA) -- 20th Century Industries (NYSE: TW), the Woodland Hills-
based insurance holding company, today reported a net loss for the year ended
December 31, 1994, of $ 498.0 million, or $ 9.69 per share, on revenues of $ 1.1
billion. Earnings for 1993 were $ 112.6 million, or $ 2.19 per share, on
revenues of $1.1 billion.
Excluding the effect of the January 17, 1994, Northridge earthquake, including
additional cost of catastrophe reinsurance, realized gains, bank interest and
Proposition 103, operating pre-tax earnings were $ 107.6 million, or $ 2.10 per
share, vs. $ 113.7 million and $ 2.21 per share in 1993.
The company reported a loss for the fourth quarter ended December 31, 1994, of
$ 48.7 million, or $ 0.95 per share, on revenues of $ 275.3 million. The
corresponding figures for fourth quarter 1993 were a profit of $ 22.8 million,
or $ 0.44 per share, on revenues of $ 286.5 million.
Results for the quarter include a reduction of $ 44 million in the Proposition
103 liability under the terms of the settlement reached with California
Insurance Commissioner Quackenbush announced on January 27, 1995. The benefit
was offset by a $ 40 million increase to the company's earthquake claim
reserves. The order also calls for payment of $ 46 million in refunds to
customers insured between November 8, 1988, and November 7, 1989, and payment of
an additional $ 32 million (both fully reserved for as of December 31, 1994)
unless earthquake claims exceed $ 950 million. In that event, the $ 32 million
may be used to pay earthquake claims and expenses.
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6301 Owensmouth Avenue | Woodland Hills, California 91367
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20TH CENTURY INDUSTRIES
Add One
The effects of the Northridge earthquake include claims for automobile damage in
excess of $ 20 million, as well as homeowner claims covered without specific
earthquake coverage of $ 20 million. Expenses for contract adjusting services
and other specialists during the year reached approximately $ 50 million. As of
December 31, 1994, paid earthquake claims and expense totalled $ 785.4 million,
and reserves total $ 154.5 million.
In addition to the earthquake claims and expenses, $ 50.5 million in reinsurance
premiums were expended in 1994 for reinstating and increasing the company's
catastrophe reinsurance program. In comparison, the company's reinsurance cost
in 1993 was $ 12 million.
The effect on earnings per share of the net incurred earthquake losses and loss
adjustment expenses plus additional reinsurance premiums was a reduction of
approximately $ 11.50.
Other 1994 financial notes include:
Net premiums written in 1994 remained constant with 1993 at
approximately $ 1.0 billion. Net premiums written in the fourth
quarter were $ 253.2 million, down from $ 261.9 million in the same
period last year. The net premiums written for 1994 includes a
reduction for additional reinsurance costs incurred during 1994.
Net investment income was $ 84.8 million for the year and $ 20.0
million for the quarter, compared to $ 97.6 million and $ 24.8 million
respectively in 1993. Invested assets at year-end 1994 were $ 942.2
million compared to $ 1.4 billion in 1993. Invested assets do not
include cash and cash equivalents which totalled $ 249.8 million at
year-end 1994, compared to $ 17.9 million a year ago.
Realized pre-tax investment gains for 1994 were $ 61.6 million, or
$1.20 per share, compared to $ 16.7 million, or $ 0.33 per share, a
year ago. Gains for the fourth quarter were four thousand dollars, or
nil per share, compared to $ 4.0 million and $ 0.08 per share for the
fourth quarter 1993.
Stockholders' equity was $ 317.9 million on December 31, 1994,
compared to $ 655.2 million a year ago.
Total assets were $ 1.70 billion, compared to $ 1.65 billion a year
ago.
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20TH CENTURY INDUSTRIES
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Book value per share was $ 6.18 at year-end 1994, compared to $ 12.74
on December 31, 1993.
1994 results reflect a contribution to capital of $ 216 million from
American International Group (NYSE: AIG) in exchange for preferred
stock and warrants, and a $ 160 million contribution under a $ 175
million bank credit agreement by First Chicago and Union Bank.
The combined ratio on a statutory basis was 152.4 for the fourth
quarter of 1994 and 182.9 for the year.
Total homeowner earthquake exposure decreased approximately 51 percent
in 1994. The company's earthquake endorsements will totally expire at
the end of July, 1995.
The number of automobiles, homes, condominiums and excess liability
policies underwritten by the insurance subsidiaries totaled 1,349,844,
compared to 1,375,232 a year ago, a decrease of 1.9 percent.
During 1994, the company was granted rate increases for automobile and homeowner
insurance. The average automobile insurance rate increase of six percent, which
took effect on October 7, 1994, will be fully earned after 12 months. The
August 1, 1994, homeowner insurance rate increase, which averages 17.1 percent,
will be fully earned after 24 months.
"20th Century overcame tremendous difficulties and challenges in 1994, and we
are looking forward to moving ahead in 1995," said Neil H. Ashley, chief
executive officer of 20th Century Industries. "With Proposition 103 finally
behind us, a responsible regulatory environment in place and the opportunity for
joint ventures with American International Group on the horizon, 20th Century is
enjoying a renewal of spirit unlike any in our history. Because of the
tremendous opportunity for market share growth in California and the resumption
of our marketing efforts, we anticipate an increase in our automobile business
of 7.5 percent in 1995. In addition, the possibility of expansion into other
western states will allow us to capitalize on our name recognition as a low-
cost, high-quality provider and serve the growing communities outside of
California. We are truly entering a new era for the company."
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20TH CENTURY INDUSTRIES
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20th Century Industries is a publicly-held company traded on the New York Stock
Exchange under the trading symbol TW. Wholly-owned subsidiaries are 20th
Century Insurance Company, which markets automobile and excess liability
insurance, and 21st Century Casualty Company, which markets automobile
insurance.
Both insurance subsidiaries sell directly to consumers without agents. 20th
Century Industries and subsidiaries' offices are located at 6301 Owensmouth
Avenue, Woodland Hills, CA 91367; 818-704-3514.
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Note: Condensed Financial Statements Are Attached
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20TH CENTURY INDUSTRIES AND SUBSIDIARIES
CONDENSED FINANCIAL STATEMENT
For the Fourth Quarter Ended December 31:
1994 1993
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(amounts in thousands, except share data)
Premiums Written --
Direct $ 266,962 $ 265,798
Net 253,154 261,870
Premiums Earned 256,194 257,880
Operating Loss and Other (98,327) (4,621)
Net Investment Income 19,996 24,762
Income (Loss) Before Tax (78,327) 24,129
Net Income (Loss) (48,653) 22,789
Operating Earnings (Loss) Per Common Share($ 0.95) $ 0.39
Earnings (Loss) Per Common Share ($ 0.95) $ 0.44
Weighted Average Number of Shares 51,367,892 51,414,310
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20TH CENTURY INDUSTRIES AND SUBSIDIARIES
CONDENSED FINANCIAL STATEMENT
For the Twelve Months Ended December 31:
1994 1993
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(amounts in thousands, except share data)
Premiums Written --
Direct $ 1,078,663 $ 1,033,895
Net 1,019,737 1,021,902
Premiums Earned 1,021,003 989,712
Operating Profit (Loss) (932,422) 12,643
Net Investment Income 84,761 97,574
Income (Loss) Before Tax and Cumulative
Effect of Accounting Change for
Income Taxes (786,107) 126,946
Income (Loss) Before Cumulative Effect
of Accounting Change for Income Taxes (498,020) 108,596
Net Income (Loss) (498,020) 112,555
Operating Earnings (Loss) Per Common Share ($ 10.47) $ 1.90
Earnings (Loss) Per Common Share ($ 9.69) * $ 2.19
Weighted Average Number of Shares 51,387,120 51,411,968
* Includes $ .08 from the cumulative effect of accounting change for income
taxes due to the implementation of FASB 109 "Accounting for Income Taxes."