filings.toolsItem 16. FORM 10-K Summary
21K characters. Original on sec.gov ·
Item 16. FORM 10-K Summary
None.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
W. R. BERKLEY CORPORATION
| By | /s/ W. Robert Berkley, Jr. | |
| W. Robert Berkley, Jr., President and Chief Executive Officer |
February 22, 2019
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
| Signature | Title | Date | ||
| /s/ William R. Berkley | Executive Chairman | February 22, 2019 | ||
| William R. Berkley | of the Board of Directors | |||
| /s/ W. Robert Berkley, Jr. | President, Chief Executive Officer | February 22, 2019 | ||
| W. Robert Berkley, Jr. | and Director | |||
| (Principal executive officer) | ||||
| /s/ Christopher L. Augostini | Director | February 22, 2019 | ||
| Christopher L. Augostini | ||||
| /s/ Ronald E. Blaylock | Director | February 22, 2019 | ||
| Ronald E. Blaylock | ||||
| /s/ Mark E. Brockbank | Director | February 22, 2019 | ||
| Mark E. Brockbank | ||||
| /s/ Mary C. Farrell | Director | February 22, 2019 | ||
| Mary C. Farrell | ||||
| /s/ María Luisa Ferré | Director | February 22, 2019 | ||
| María Luisa Ferré | ||||
| /s/ Jack H. Nusbaum | Director | February 22, 2019 | ||
| Jack H. Nusbaum | ||||
| /s/ Leigh A. Pusey | Director | February 22, 2019 | ||
| Leigh Ann Pusey | ||||
| /s/ Mark L. Shapiro | Director | February 22, 2019 | ||
| Mark L. Shapiro | ||||
| /s/ Richard M. Baio | Senior Vice President, | February 22, 2019 | ||
| Richard M. Baio | Chief Financial Officer and Treasurer | |||
| (Principal financial officer and principal accounting officer) |
Schedule II
W. R. Berkley Corporation
Condensed Financial Information of Registrant
Balance Sheets (Parent Company)
| December 31, | |||||||
| (In thousands) | 2018 | 2017 | |||||
| Assets: | |||||||
| Cash and cash equivalents | $ | 83,950 | $ | 45,062 | |||
| Fixed maturity securities available for sale at fair value (cost $1,317,058 and $1,059,834 at December 31, 2018 and 2017, respectively) | 1,307,347 | 1,052,240 | |||||
| Loans receivable | 51,544 | 53,019 | |||||
| Equity securities, at fair value (cost $3,430 in 2018 and 2017) | 3,430 | 3,430 | |||||
| Investment in subsidiaries | 6,786,999 | 7,140,108 | |||||
| Current federal income taxes | 9,068 | — | |||||
| Deferred federal income taxes | 66,995 | — | |||||
| Property, furniture and equipment at cost, less accumulated depreciation | 13,391 | 14,421 | |||||
| Other assets | 12,340 | 10,819 | |||||
| Total assets | $ | 8,335,064 | $ | 8,319,099 | |||
| Liabilities and stockholders’ equity | |||||||
| Liabilities: | |||||||
| Due to subsidiaries | $ | 116,125 | $ | 232,756 | |||
| Other liabilities | 115,562 | 128,002 | |||||
| Current federal income taxes | — | 10,486 | |||||
| Deferred federal income taxes | — | 51,757 | |||||
| Subordinated debentures | 907,491 | 728,218 | |||||
| Senior notes | 1,758,035 | 1,756,536 | |||||
| Total liabilities | 2,897,213 | 2,907,755 | |||||
| Stockholders’ equity: | |||||||
| Preferred stock | — | — | |||||
| Common stock | 47,024 | 47,024 | |||||
| Additional paid-in capital | 1,063,144 | 1,048,283 | |||||
| Retained earnings (including accumulated undistributed net income of subsidiaries of $5,068,139 and $5,073,268 at December 31, 2018 and 2017, respectively) | 7,558,619 | 6,956,882 | |||||
| Accumulated other comprehensive income | (510,470 | ) | 68,541 | ||||
| Treasury stock, at cost | (2,720,466 | ) | (2,709,386 | ) | |||
| Total stockholders’ equity | 5,437,851 | 5,411,344 | |||||
| Total liabilities and stockholders’ equity | $ | 8,335,064 | $ | 8,319,099 |
See Report of Independent Registered Public Accounting Firm and note to condensed financial statements.
Schedule II, Continued
W. R. Berkley Corporation
Condensed Financial Information of Registrant, Continued
Statements of Income (Parent Company)
| Year Ended December 31, | |||||||||||
| (In thousands) | 2018 | 2017 | 2016 | ||||||||
| Management fees and investment income including dividends from subsidiaries of $639,477, $694,462 and $700,664 for the years ended December 31, 2018, 2017 and 2016, respectively | $ | 697,687 | $ | 738,923 | $ | 726,742 | |||||
| Net investment (losses) gains | (1,685 | ) | (4,286 | ) | 909 | ||||||
| Other income | 530 | 805 | 376 | ||||||||
| Total revenues | 696,532 | 735,442 | 728,027 | ||||||||
| Operating costs and expense | 191,873 | 182,145 | 171,967 | ||||||||
| Interest expense | 155,082 | 146,929 | 139,216 | ||||||||
| Income before federal income taxes | 349,577 | 406,368 | 416,844 | ||||||||
| Federal income taxes: | |||||||||||
| Federal income taxes provided by subsidiaries on a separate return basis | 409,439 | 115,597 | 327,520 | ||||||||
| Federal income tax expense on a consolidated return basis | (113,138 | ) | (195,261 | ) | (246,389 | ) | |||||
| Net expense (benefit) | 296,301 | (79,664 | ) | 81,131 | |||||||
| Income before undistributed equity in net income of subsidiaries | 645,878 | 326,704 | 497,975 | ||||||||
| Equity in undistributed net (loss) income of subsidiaries | (5,129 | ) | 222,390 | 103,941 | |||||||
| Net income | $ | 640,749 | $ | 549,094 | $ | 601,916 |
See Report of Independent Registered Public Accounting Firm and note to condensed financial statements.
Schedule II, Continued
W. R. Berkley Corporation
Condensed Financial Information of Registrant, Continued
Statements of Cash Flows (Parent Company)
| Year Ended December 31, | |||||||||||
| (In thousands) | 2018 | 2017 | 2016 | ||||||||
| Cash flows from operating activities: | |||||||||||
| Net income | $ | 640,749 | $ | 549,094 | $ | 601,916 | |||||
| Adjustments to reconcile net income to net cash from operating activities: | |||||||||||
| Net investment losses | 1,685 | 4,286 | 3,649 | ||||||||
| Depreciation and amortization | 9,441 | 2,039 | 2,744 | ||||||||
| Equity in undistributed earnings of subsidiaries | 5,129 | (222,390 | ) | (103,941 | ) | ||||||
| Tax payments received from subsidiaries | 282,084 | 98,313 | 414,386 | ||||||||
| Federal income taxes provided by subsidiaries on a separate return basis | (409,439 | ) | (115,597 | ) | (327,520 | ) | |||||
| Stock incentive plans | 28,531 | 38,075 | 37,174 | ||||||||
| Change in: | |||||||||||
| Federal income taxes | (77,415 | ) | 2,711 | 44,839 | |||||||
| Other assets | 1,348 | (877 | ) | 1,772 | |||||||
| Other liabilities | 109,016 | 18,661 | (88,282 | ) | |||||||
| Accrued investment income | (2,870 | ) | (2,818 | ) | (2,743 | ) | |||||
| Net cash from operating activities | 588,259 | 371,497 | 583,994 | ||||||||
| Cash used in investing activities: | |||||||||||
| Proceeds from sales of fixed maturity securities | 668,447 | 849,330 | 373,252 | ||||||||
| Proceeds from maturities and prepayments of fixed maturity securities | 255,528 | 316,611 | 210,904 | ||||||||
| Cost of purchases of fixed maturity securities | (1,188,821 | ) | (1,329,379 | ) | (1,285,101 | ) | |||||
| Change in loans receivable | 1,475 | (29,600 | ) | (23,419 | ) | ||||||
| Investments in and advances to subsidiaries, net | (184,597 | ) | (21,139 | ) | 11,471 | ||||||
| Net additions to real estate, furniture & equipment | (264 | ) | (1,055 | ) | (3,042 | ) | |||||
| Net cash used in investing activities | (448,232 | ) | (215,232 | ) | (715,935 | ) | |||||
| Cash (used in) from financing activities: | |||||||||||
| Net proceeds from issuance of senior notes | 178,562 | — | 386,830 | ||||||||
| Repayment of senior notes | — | — | (9,353 | ) | |||||||
| Purchase of common treasury shares | (24,750 | ) | (47,807 | ) | (132,392 | ) | |||||
| Cash dividends to common stockholders | (254,951 | ) | (188,199 | ) | (183,999 | ) | |||||
| Net cash (used in) from financing activities | (101,139 | ) | (236,006 | ) | 61,086 | ||||||
| Net increase (decrease) in cash and cash equivalents | 38,888 | (79,741 | ) | (70,855 | ) | ||||||
| Cash and cash equivalents at beginning of year | 45,062 | 124,803 | 195,658 | ||||||||
| Cash and cash equivalents at end of year | $ | 83,950 | $ | 45,062 | $ | 124,803 |
See Report of Independent Registered Public Accounting Firm and note to condensed financial statements.
W. R. Berkley Corporation
Condensed Financial Information of Registrant, Continued
December 31, 2018
Note to Condensed Financial Statements (Parent Company)
The accompanying condensed financial statements should be read in conjunction with the notes to consolidated financial statements included elsewhere herein. Reclassifications have been made in the 2017 and 2016 financial statements as originally reported to conform them to the presentation of the 2018 financial statements.
The Company files a consolidated federal tax return with the results of its domestic insurance subsidiaries included on a statutory basis. Under present Company policy, federal income taxes payable by subsidiary companies on a separate-return basis are paid to W. R. Berkley Corporation, and the Company pays the tax due on a consolidated return basis.
Schedule III
W. R. Berkley Corporation and Subsidiaries
Supplementary Insurance Information
December 31, 2018**,** 2017 and 2016
| (In thousands) | Deferred Policy Acquisition Cost | Reserve for Losses and Loss Expenses | Unearned Premiums | Net Premiums Earned | Net Investment Income | Loss and Loss Expenses | Amortization of Deferred Policy Acquisition Cost | Other Operating Costs and Expenses | Net Premiums Written | ||||||||||||||||||||||||||
| December 31, 2018 | |||||||||||||||||||||||||||||||||||
| Insurance | $ | 439,945 | $ | 10,226,324 | $ | 3,131,018 | $ | 5,864,981 | $ | 518,733 | $ | 3,626,924 | $ | 811,178 | $ | 1,162,328 | $ | 5,952,861 | |||||||||||||||||
| Reinsurance | 57,684 | 1,740,124 | 228,973 | 506,524 | 94,291 | 347,778 | 104,068 | 86,826 | 480,366 | ||||||||||||||||||||||||||
| Corporate and adjustments | — | — | — | — | 61,211 | — | — | 218,821 | — | ||||||||||||||||||||||||||
| Total | $ | 497,629 | $ | 11,966,448 | $ | 3,359,991 | $ | 6,371,505 | $ | 674,235 | $ | 3,974,702 | $ | 915,246 | $ | 1,467,975 | $ | 6,433,227 | |||||||||||||||||
| December 31, 2017 | |||||||||||||||||||||||||||||||||||
| Insurance | $ | 435,967 | $ | 9,820,258 | $ | 3,039,343 | $ | 5,706,443 | $ | 436,178 | $ | 3,516,996 | $ | 929,793 | $ | 1,026,545 | $ | 5,715,871 | |||||||||||||||||
| Reinsurance | 71,582 | 1,850,150 | 250,837 | 604,976 | 91,146 | 485,352 | 181,696 | 44,349 | 544,637 | ||||||||||||||||||||||||||
| Corporate and adjustments | — | — | — | — | 48,464 | — | — | 254,549 | — | ||||||||||||||||||||||||||
| Total | $ | 507,549 | $ | 11,670,408 | $ | 3,290,180 | $ | 6,311,419 | $ | 575,788 | $ | 4,002,348 | $ | 1,111,489 | $ | 1,325,443 | $ | 6,260,508 | |||||||||||||||||
| December 31, 2016 | |||||||||||||||||||||||||||||||||||
| Insurance | $ | 442,317 | $ | 9,445,210 | $ | 2,975,060 | $ | 5,618,842 | $ | 431,489 | $ | 3,430,139 | $ | 964,064 | $ | 954,858 | $ | 5,743,620 | |||||||||||||||||
| Reinsurance | 95,573 | 1,751,985 | 308,240 | 674,506 | 102,617 | 415,661 | 191,890 | 71,305 | 680,293 | ||||||||||||||||||||||||||
| Corporate and adjustments | — | — | — | — | 30,057 | — | — | 213,502 | — | ||||||||||||||||||||||||||
| Total | $ | 537,890 | $ | 11,197,195 | $ | 3,283,300 | $ | 6,293,348 | $ | 564,163 | $ | 3,845,800 | $ | 1,155,954 | $ | 1,239,665 | $ | 6,423,913 |
See Report of Independent Registered Public Accounting Firm.
Schedule IV
W. R. Berkley Corporation and Subsidiaries
Reinsurance
Years ended December 31, 2018**,** 2017 and 2016
| Premiums Written | ||||||||||||||||||
| (In thousands, other than percentages) | Direct Amount | Ceded to Other Companies | Assumed from Other Companies | Net Amount | Percentage of Amount Assumed to Net | |||||||||||||
| Year ended December 31, 2018 | ||||||||||||||||||
| Insurance | $ | 6,959,830 | $ | 1,204,509 | $ | 197,540 | $ | 5,952,861 | 3.3 | % | ||||||||
| Reinsurance | 13,386 | 64,758 | 531,738 | 480,366 | 110.7 | % | ||||||||||||
| Total | $ | 6,973,216 | $ | 1,269,267 | $ | 729,278 | $ | 6,433,227 | 11.3 | % | ||||||||
| Year ended December 31, 2017 | ||||||||||||||||||
| Insurance | $ | 6,707,916 | $ | 1,153,960 | $ | 161,915 | $ | 5,715,871 | 2.8 | % | ||||||||
| Reinsurance | 18,113 | 62,495 | 589,019 | 544,637 | 108.1 | % | ||||||||||||
| Total | $ | 6,726,029 | $ | 1,216,455 | $ | 750,934 | $ | 6,260,508 | 12.0 | % | ||||||||
| Year ended December 31, 2016 | ||||||||||||||||||
| Insurance | $ | 6,634,540 | $ | 1,051,887 | $ | 160,967 | $ | 5,743,620 | 2.8 | % | ||||||||
| Reinsurance | 13,060 | 67,901 | 735,134 | 680,293 | 108.1 | % | ||||||||||||
| Total | $ | 6,647,600 | $ | 1,119,788 | $ | 896,101 | $ | 6,423,913 | 13.9 | % |
See Report of Independent Registered Public Accounting Firm.
Schedule V
W. R. Berkley Corporation and Subsidiaries
Valuation and Qualifying Accounts
Years ended December 31, 2018**,** 2017 and 2016
| (In thousands) | Opening Balance | Additions- Charged to Expense | Deduction- Amounts Written Off | Ending Balance | |||||||||||
| Year ended December 31, 2018 | |||||||||||||||
| Premiums and fees receivable | $ | 39,926 | $ | 6,985 | $ | (7,817 | ) | $ | 39,093 | ||||||
| Due from reinsurers | 1,010 | 65 | (128 | ) | 947 | ||||||||||
| Deferred federal and foreign income taxes | 16,619 | 18,772 | (196 | ) | 35,195 | ||||||||||
| Loan loss reserves | 3,383 | — | — | 3,383 | |||||||||||
| Total | $ | 60,938 | $ | 25,822 | $ | (8,141 | ) | $ | 78,618 | ||||||
| Year ended December 31, 2017 | |||||||||||||||
| Premiums and fees receivable | $ | 26,569 | $ | 20,720 | $ | (7,363 | ) | $ | 39,926 | ||||||
| Due from reinsurers | 1,049 | (29 | ) | (10 | ) | 1,010 | |||||||||
| Deferred federal and foreign income taxes | 5,457 | 12,663 | (1,501 | ) | 16,619 | ||||||||||
| Loan loss reserves | 3,397 | (14 | ) | — | 3,383 | ||||||||||
| Total | $ | 36,472 | $ | 33,340 | $ | (8,874 | ) | $ | 60,938 | ||||||
| Year ended December 31, 2016 | |||||||||||||||
| Premiums and fees receivable | $ | 22,524 | $ | 10,006 | $ | (5,961 | ) | $ | 26,569 | ||||||
| Due from reinsurers | 1,020 | 20 | 9 | 1,049 | |||||||||||
| Deferred federal and foreign income taxes | 4,037 | 1,420 | — | 5,457 | |||||||||||
| Loan loss reserves | 2,094 | 1,303 | — | 3,397 | |||||||||||
| Total | $ | 29,675 | $ | 12,749 | $ | (5,952 | ) | $ | 36,472 |
See Report of Independent Registered Public Accounting Firm.
Schedule VI
W. R. Berkley Corporation and Subsidiaries
Supplementary Information Concerning Property-Casualty Insurance Operations
Years Ended December 31, 2018**,** 2017 and 2016
| (In thousands) | 2018 | 2017 | 2016 | ||||||||
| Deferred policy acquisition costs | $ | 497,629 | $ | 507,549 | $ | 537,890 | |||||
| Reserves for losses and loss expenses | 11,966,448 | 11,670,408 | 11,197,195 | ||||||||
| Unearned premiums | 3,359,991 | 3,290,180 | 3,283,300 | ||||||||
| Net premiums earned | 6,371,505 | 6,311,419 | 6,293,348 | ||||||||
| Net investment income | 674,235 | 575,788 | 564,163 | ||||||||
| Losses and loss expenses incurred: | |||||||||||
| Current year | 3,926,489 | 3,963,543 | 3,826,620 | ||||||||
| Prior years | 6,831 | (5,165 | ) | (29,904 | ) | ||||||
| Loss reserve discount accretion | 41,382 | 43,970 | 49,084 | ||||||||
| Amortization of deferred policy acquisition costs | 915,246 | 1,111,489 | 1,155,954 | ||||||||
| Paid losses and loss expenses | 3,664,885 | 3,589,955 | 3,454,174 | ||||||||
| Net premiums written | 6,433,227 | 6,260,508 | 6,423,913 |
See Report of Independent Registered Public Accounting Firm.
Previous: Item 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES