Exhibit 99.1
-- For Immediate Release --
EVEREST RE GROUP, LTD.
c/o ABG Financial & Management Services, Inc.
Parker House, Wildey Business Park,
Wildey Road, St. Michael, Barbados
Contact:
James H. Foster
Senior Vice President, Investor Relations
Everest Global Services, Inc.
908.604.3169
EVEREST RE GROUP ANNOUNCES FOURTH QUARTER 2001 RESULTS
AND INCREASE IN DIVIDEND
ST. MICHAEL, Barbados - February 19, 2002 -- Everest Re Group, Ltd. (NYSE:
RE) reported fourth quarter 2001 after-tax operating income, which excludes
realized capital gains and losses, of $45.3 million, or $0.96 per diluted share,
compared to $50.6 million, or $1.08 per diluted share in 2000. Net income was
$35.4 million, or $0.75 per diluted share, compared to $51.4 million, or $1.10
per diluted share, in the fourth quarter of 2000. This quarter's results were
significantly impacted by the previously announced losses associated with the
collapse of Enron as well as by $16.8 million or $0.36 per diluted share of
income received in connection with the demutualization of a former client.
For the full year, in which the Company's results were also substantially
affected by losses resulting from the September 11 terrorist attacks, after-tax
operating income was $115.8 million, or $2.46 per diluted share, compared to
$185.9 million, or $4.01 per diluted share for 2000. Net income for the full
year 2001 was $99.0 million, or $2.10 per diluted share, compared to $186.4
million, or $4.02 per diluted share in 2000.
Gross premiums written for the fourth quarter were $459.7 million in 2001,
a 15.0% increase compared to $399.6 million in 2000. The Company's GAAP combined
ratio was 108.7% for this quarter, compared to 103.7% in 2000. Net investment
income for the fourth quarter was $83.2 million, compared to $83.1 million in
2000. Cash flow from operations for the quarter was $190.6 million.
For the full year, gross written premiums written were $1.87 billion, a
35.3% increase compared to $1.39 billion in 2000. The GAAP combined ratio for
2001 was 113.5%, compared to 102.9% for 2000. Net investment income for the year
was $340.4 million, a 12.9% increase compared to $301.5 million in 2000. Cash
flow from operations for 2001 was $406.0 million.
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Commenting on the Company's results, Chairman and Chief Executive Officer
Joseph V. Taranto said, "I am extremely pleased with our execution, as we have
used our many corporate advantages to capitalize on the much-improved
marketplace. Accordingly, we are revising our 2002 earnings estimates to a range
of $5.50--$6.00, absent unusual loss activity."
At December 31, 2001, the Company's total assets were $7.80 billion and
shareholders' equity was $1.72 billion, or a book value of $37.19 per share, an
8.7% increase from shareholders' equity of $1.58 billion ($34.40 per share) at
December 31, 2000.
The Company also announced today that its Board of Directors increased the
amount of its quarterly dividend and declared a dividend of $0.08 per share
payable on or before March 22, 2002 to all shareholders of record as of March 4,
2002.
Statements made in connection with this release that are not purely
historical may be deemed forward-looking statements. Such statements, including
in particular any Company estimates of losses and reinsurance recoveries,
together with estimates of future earnings and premium volume, are subject to
various risks and uncertainties, including but not limited to the impact of
competition, product demand, insurance and reinsurance pricing, trends in paid
and incurred losses, catastrophes, interest rates and other risks detailed from
time to time in the Company's filings with the Securities and Exchange
Commission. These risks could cause the Company's actual results to differ
materially from those expressed in any forward-looking statement that may be
made by or on behalf of the Company. The Company undertakes no obligation to
publicly update or revise any forward-looking statements, including estimates
of future earnings, whether as a result of new information, future events or
otherwise.
Everest Re Group, Ltd. is a Bermuda holding company that operates through
the following subsidiaries: Everest Reinsurance Company provides reinsurance to
property and casualty insurers in both the US and international markets. Everest
Reinsurance (Bermuda), Ltd. provides reinsurance to property and casualty and
life insurers in both the Bermuda and international markets. Everest National
Insurance Company and Everest Security Insurance Company provide property and
casualty insurance to policyholders in the United States. Everest Indemnity
Insurance Company offers excess and surplus lines insurance in the United
States. Additional information on Everest Re Group companies can be found at the
Group's web site at www.everestre.com.
A conference call discussing the fourth quarter results will be held at
8:30 a.m. Eastern time on February 20, 2002. The call will be available on the
Internet through the Group's web site or at www.streetevents.com.
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Anyone receiving this release by wire or through the Internet may visit the
Group's web site to view supplemental financial information on the Group's
results. The supplemental information is located at www.everestre.com in the
"Financials/Financial Reports" section. The supplemental financial information
may also be obtained by contacting the Company directly.
-- Financial Details Follow - -
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EVEREST RE GROUP, LTD.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Dollars in thousands, except per share amounts)
Three Months Ended Twelve Months Ended
December 31, December 31,
-------------------- ------------------------
2001 2000 2001 2000
-------- -------- ---------- ----------
(unaudited) (unaudited)
REVENUES:
Premiums earned $395,343 $331,028 $1,467,477 $1,174,183
Net investment
income 83,198 83,140 340,441 301,493
Net realized
capital (loss)
/gain (14,667) 1,266 (22,313) 807
Net derivative
(expense) (10,625) - (12,218) -
Other income 27,479 2,296 28,158 3,341
-------- -------- ---------- ----------
Total revenues 480,728 417,730 1,801,545 1,479,824
-------- -------- ---------- ----------
CLAIMS AND EXPENSES:
Incurred loss and
loss adjustment
expenses 305,881 234,605 1,209,517 884,616
Commission,
brokerage, taxes
and fees 108,016 94,654 396,797 272,447
Other underwriting
expenses 16,043 14,091 58,884 51,633
Interest expense
on senior notes 9,727 9,723 38,903 30,896
Interest expense on
credit facility 1,011 3,039 7,101 8,490
-------- -------- ---------- ----------
Total claims and
expenses 440,678 356,112 1,711,202 1,248,082
-------- -------- ---------- ----------
INCOME BEFORE TAXES 40,050 61,618 90,343 231,742
Income tax expense
/(benefit) 4,688 10,212 (8,675) 45,362
-------- -------- ---------- ----------
NET INCOME $ 35,362 $ 51,406 $ 99,018 $ 186,380
======== ======== ========== ==========
Other comprehensive
(loss) income,
net of tax (32,869) 57,424 41,034 89,547
-------- -------- ---------- ----------
COMPREHENSIVE
INCOME $ 2,493 $108,830 $ 140,052 $ 275,927
======== ======== ========== ==========
PER SHARE DATA:
Average shares
outstanding
(000's) 46,264 45,949 46,174 45,873
Net income per
common share
- basic $ 0.76 $ 1.12 $ 2.14 $ 4.06
======== ======== ========== ==========
Average diluted
shares
outstanding
(000's) 47,263 46,889 47,114 46,358
Net income per
common share
- diluted $ 0.75 $ 1.10 $ 2.10 $ 4.02
======== ======== ========== ==========
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EVEREST RE GROUP, LTD.
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except par value per share)
December 31, December 31,
------------ ------------
2001 2000
------------ ------------
(unaudited)
ASSETS:
Fixed maturities - available
for sale, at market value
(amortized cost: 2001,
$5,288,860; 2000,
$4,849,679) $ 5,461,584 $ 4,951,893
Equity securities, at market
value (cost: 2001, $66,357;
2000, $22,340) 67,311 36,491
Short-term investments 148,851 398,542
Other invested assets 33,899 29,211
Cash 71,878 76,823
------------ ------------
Total investments and cash 5,783,523 5,492,960
Accrued investment income 83,088 77,312
Premiums receivable 468,897 394,137
Reinsurance receivables 895,061 508,998
Funds held by reinsureds 149,969 161,350
Deferred acquisition costs 130,709 106,638
Prepaid reinsurance premiums 47,185 58,196
Deferred tax asset 178,507 174,482
Other assets 59,221 39,022
------------ ------------
TOTAL ASSETS $ 7,796,160 $ 7,013,095
============ ============
LIABILITIES:
Reserve for losses and
adjustment expenses $ 4,278,267 $ 3,786,178
Future policy benefit reserve 238,753 206,589
Unearned premium reserve 489,171 401,148
Funds held under reinsurance
treaties 267,105 110,464
Losses in the course of payment 89,492 102,167
Contingent commissions 2,119 9,380
Other net payable to reinsurers 66,462 60,564
Current federal income taxes (30,459) (8,209)
8.5% Senior notes due 3/15/2005 249,694 249,615
8.75% Senior notes due 3/15/2010 199,077 199,004
Revolving credit agreement
borrowings 105,000 235,000
Accrued interest on debt and
borrowings 11,944 12,212
Other liabilities 109,013 65,631
------------ ------------
Total liabilities 6,075,638 5,429,743
------------ ------------
SHAREHOLDERS' EQUITY:
Preferred shares, par value:
$0.01; 50 million shares
authorized; no shares
issued and outstanding - -
Common shares, par value:
$0.01; 200 million shares
authorized; 46.3 million
shares issued in 2001 and
46.0 million shares issued
in 2000 463 460
Additional paid-in capital 269,945 259,958
Unearned compensation (115) (170)
Accumulated other
comprehensive income, net
of deferred income taxes
of $40.8 million in 2001
and $30.4 million in 2000 113,880 72,846
Retained earnings 1,336,404 1,250,313
Treasury shares, at cost;
0.0 million shares in 2001
and 2000 (55) (55)
------------ ------------
Total shareholders' equity 1,720,522 1,583,352
------------ ------------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $ 7,796,160 $ 7,013,095
============ ============
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EVEREST RE GROUP, LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
Three Months Ended Twelve Months Ended
December 31, December 31,
------------------- ---------------------
2001 2000 2001 2000
-------- -------- --------- ---------
(unaudited) (unaudited)
CASH FLOWS FROM
OPERATING ACTIVITIES: $190,570 $ 41,108 $ 406,034 $ 89,964
CASH FLOWS FROM
INVESTING ACTIVITIES:
Proceeds from
investments sold 308,185 331,623 793,335 814,691
Proceeds from
investments maturing
or called 110,732 41,080 454,389 191,850
Cost of investments
acquired (607,955) (286,949) (1,767,398) (1,768,216)
Net sales (purchases)
of short-term
investments 24,817 (215,017) 244,509 (256,421)
Payment for purchase
of subsidiary, net
of cash acquired - (9,613) - 340,130
-------- -------- --------- ---------
Net cash (used in)
investing activities (164,221) (138,876) (275,165) (677,966)
-------- -------- --------- ---------
CASH FLOWS FROM
FINANCING ACTIVITIES:
Acquisition of
treasury stock net
of reissuances - - - (16,533)
Common stock issued
during the period 997 6,435 9,990 7,545
Dividends paid to
shareholders (3,238) (2,759) (12,927) (11,008)
Proceeds from issuance
of senior notes - - - 448,507
Borrowings on
revolving credit
agreement - 98,000 22,000 176,000
Repayments on
revolving credit
agreement (29,000) - (152,000) -
-------- -------- --------- ---------
Net cash (used in)
provided by
financing activities (31,241) 101,676 (132,937) 604,511
EFFECT OF EXCHANGE
RATE CHANGES ON CASH (2,945) 6,589 (2,877) (1,913)
-------- -------- --------- ---------
Net (decrease)
increase in cash (7,837) 10,497 (4,945) 14,596
Cash, beginning of
period 79,715 66,326 76,823 62,227
-------- -------- --------- ---------
Cash, end of period $ 71,878 $ 76,823 $ 71,878 $ 76,823
======== ======== ========= =========
In the quarter ended December 31, 2000, the Company purchased all of the capital
stock of AFC Re Ltd. for $16,573. In conjnction with the acquisition, the fair
value of assets acquired was $231,874 and liabilities assumed was $215,301.
In the quarter ended September 30, 2000, the Company purchased all of the
capital stock of Mt. McKinley Insurance Company for $51,800. In conjunction with
the acquisition, the fair value of assets acquired was $679,672 and liabilities
assumed was $627,872.
(Contact: James H. Foster, Vice President, Investor Relations, 908.604.3169)
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