<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the Quarterly Period Ended June 30, 1999
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from __________ to ___________
Commission File Number 333-34829
DELPHI INTERNATIONAL LTD.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
Bermuda (441) 295-3688 N/A
- ------------------------------- ------------------------------- -------------------------------
(State or other Jurisdiction of (Registrant's telephone number, (I.R.S. Employer Identification
incorporation or organization) including area code) Number)
</TABLE>
Chevron House, 11 Church Street, Hamilton, Bermuda HM 11
(Address of principal executive offices) (Zip Code)
Indicate by check mark whether 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 filing requirements
for the past 90 days:
Yes [X] No [ ]
As of August 6, 1999, the Registrant had 4,079,014 shares of
Common Stock outstanding.
<PAGE> 2
DELPHI INTERNATIONAL LTD.
FORM 10-Q
INDEX
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION Page
----
<S> <C>
Consolidated Statements of Income and Comprehensive
Income for the Three Months Ended June 30, 1999 and
1998, the Six Months Ended June 30, 1999, and the Period
from January 27, 1998 to June 30, 1998 3
Consolidated Balance Sheets at June 30, 1999
and December 31, 1998 4
Consolidated Statements of Cash Flows for the
Six Months Ended June 30, 1999 and for the
Period from January 27, 1998 to June 30, 1998 5
Notes to Consolidated Financial Statements 6
Management's Discussion and Analysis of Financial
Condition and Results of Operations 8
PART II. OTHER INFORMATION 11
</TABLE>
2
<PAGE> 3
PART I. FINANCIAL INFORMATION
DELPHI INTERNATIONAL LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(EXPRESSED IN US DOLLARS)
(UNAUDITED)
<TABLE>
<CAPTION>
Period from
Three Months Three Months Six Months January 27, 1998
Ended Ended Ended To
June 30, 1999 June 30, 1998 June 30, 1999 June 30, 1998
------------ ------------ ------------- -------------
<S> <C> <C> <C> <C>
REVENUES:
Premiums written $ 1,626,914 $ -- $ 4,054,282 $120,833,950
Premiums ceded -- -- -- --
------------ ------------ ------------ ------------
Premiums earned 1,626,914 -- 4,054,282 120,833,950
Net investment income 9,389,024 (1,390,109) 12,513,480 6,191,023
Net realized gains on sales of investments 1,552 -- 211,707 --
------------ ------------ ------------ ------------
Total revenues 11,017,490 (1,390,109) 16,779,469 127,024,973
------------ ------------ ------------ ------------
LOSSES AND EXPENSES:
Losses and loss expenses incurred 2,992,027 (4,370,993) 6,412,387 112,567,176
Underwriting and acquisition expenses 4,636,301 931,688 4,799,880 7,672,228
Interest expense 703,442 673,151 1,392,164 1,183,562
General and administrative expenses 507,656 426,738 1,023,918 674,157
Incorporation costs -- 166,484 -- 1,320,588
------------ ------------ ------------ ------------
Total losses and expenses 8,839,426 (2,172,932) 13,628,349 123,417,711
------------ ------------ ------------ ------------
Net income 2,178,064 782,823 3,151,120 3,607,262
Dividends on Preferred Shares (237,500) -- (475,000) --
------------ ------------ ------------ ------------
Net income attributable to Common Shares $ 1,940,564 $ 782,823 $ 2,676,120 $ 3,607,262
============ ============ ============ ============
Basic and diluted net income per Common Share $ 0.48 $ 0.19 $ 0.66 $ 0.88
Comprehensive income:
Net income $ 2,178,064 $ 782,823 $ 3,151,120 $ 3,607,262
Other comprehensive (loss) income:
Change in unrealized (losses) gains on fixed
maturity securities, net of reclassification
adjustments (891,763) 258,052 (1,380,359) 376,102
------------ ------------ ------------ ------------
Comprehensive income $ 1,286,301 $ 1,040,875 $ 1,770,761 $ 3,983,364
============ ============ ============ ============
</TABLE>
See notes to consolidated financial statements
3
<PAGE> 4
DELPHI INTERNATIONAL LTD. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(EXPRESSED IN US DOLLARS)
(UNAUDITED)
<TABLE>
<CAPTION>
June 30, 1999 December 31, 1998
------------- -----------------
<S> <C> <C>
ASSETS:
Investments:
Balances with independent investment managers $ 103,861,109 $ 77,197,580
Fixed maturity securities, available for sale 19,293,850 18,306,720
------------- -------------
123,154,959 95,504,300
Cash and cash equivalents 22,233,461 26,152,550
Funds withheld by ceding reinsurer 17,111,448 16,000,000
Due from investment managers 1,285,172 28,106,350
Deferred acquisition costs 1,117,715 1,147,923
Other assets 276,054 185,005
Assets held for participating shareholder - cash and cash equivalents 2,800,397 2,875,000
------------- -------------
Total assets $ 167,979,206 $ 169,971,128
============= =============
LIABILITIES:
Reserves for losses and loss expenses $ 118,061,068 $ 125,191,823
Subordinated notes 31,350,000 30,000,000
Other liabilities 5,986,286 3,893,611
Liabilities relating to participating shareholder - reserves for losses
and loss expenses 2,800,397 2,875,000
------------- -------------
Total liabilities 158,197,751 161,960,434
------------- -------------
SHAREHOLDERS' EQUITY:
Preferred Shares, $0.01 par value; 5,000,000 shares authorized,
100,000 shares issued and outstanding 1,000 1,000
Participating Preferred Shares, $0.01 par value; 1,000 shares issued
and outstanding 10 10
Common Shares, $0.01 par value; 10,000,000 shares authorized
4,079,014 shares issued and outstanding 40,790 40,790
Additional paid-in capital 30,864,147 30,864,147
Provision for dividends on Preferred Shares 475,000 --
Accumulated other comprehensive (loss) income (1,020,573) 359,786
Retained deficit (20,578,919) (23,255,039)
------------- -------------
Total shareholders' equity 9,781,455 8,010,694
------------- -------------
Total liabilities and shareholders' equity $ 167,979,206 $ 169,971,128
============= =============
</TABLE>
See notes to consolidated financial statements
4
<PAGE> 5
DELPHI INTERNATIONAL LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(EXPRESSED IN US DOLLARS)
(UNAUDITED)
<TABLE>
<CAPTION>
Period From
Six Months January 27, 1998
Ended To
June 30, 1999 June 30, 1998
------------- -------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 3,151,120 3,607,262
Adjustments to reconcile net income to net cash provided by
operating activities:
Realized gains on balances with independent investment managers (211,707) --
Net unrealized gains on balances with independent investment
managers (11,130,041) (5,539,771)
Amortization on fixed maturity securities (44,691) (1,634)
Changes in assets and liabilities:
Funds withheld by ceding reinsurer (1,111,448) (15,514,073)
Reinsurance premium receivable -- (10,395,000)
Deferred acquisition costs 30,209 --
Incorporation costs -- 1,316,437
Other assets (91,049) (157,440)
Reserves for losses and loss expenses (7,130,754) 109,281,481
Due from independent investment managers 26,821,178 --
Provision for annuity reinsurance payments -- 10,500,000
Other liabilities 3,442,674 5,161,385
Assets held for participating shareholder (74,603) --
Liabilities relating to participating shareholder 74,603 --
------------- -------------
Net cash provided by operating activities 13,725,491 98,258,647
------------- -------------
Cash flows from investing activities:
Proceeds from sales of fixed maturity securities 197,064 --
Withdrawals from balances with independent investment managers 5,498,219 --
Purchases of investments with independent investment managers (20,820,000) (129,108,629)
Purchases of fixed maturity securities (2,519,863) (8,742,953)
Incorporation costs -- (1,316,437)
------------- -------------
Net cash used by investing activities (17,644,580) (139,168,019)
------------- -------------
Cash flows from financing activities:
Proceeds from issuance of subordinated notes -- 30,000,000
Proceeds from issuance of common shares -- 20,254,947
------------- -------------
Net cash provided by financing activities -- 50,254,947
------------- -------------
(Decrease) increase in cash and cash equivalents (3,919,089) 9,345,575
Cash and cash equivalents at beginning of period 26,152,550 --
------------- -------------
Cash and cash equivalents at the end of period $ 22,233,461 $ 9,345,575
============= =============
</TABLE>
See notes to consolidated financial statements
5
<PAGE> 6
DELPHI INTERNATIONAL LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE A - SIGNIFICANT ACCOUNTING POLICIES
The financial statements included herein were prepared in conformity with
generally accepted accounting principles for interim financial information and
with the instructions to Form 10-Q and Article 10 of Regulation S-X.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
Such principles were applied on a basis consistent with those reflected in the
Company's report on Form 10-K for the year ended December 31, 1998. The
information furnished includes all adjustments and accruals of a normal
recurring nature which are, in the opinion of management, necessary for a fair
presentation of results for the interim periods. Operating results for the six
months ended June 30, 1999 are not necessarily indicative of the results that
may be expected for the year ended December 31, 1999. Certain reclassifications
have been made in the 1998 financial statements to conform to the 1999
presentation. For further information refer to the consolidated financial
statements and footnotes thereto included in the Company's report on Form 10-K
for the year ended December 31, 1998. Capitalized terms used herein without
definition have the meanings ascribed to them in the Company's report on Form
10-K for the year ended December 31, 1998.
NOTE B - PREFERRED SHARES
The Company's Series A Preferred Shares (the "Preferred Shares") are entitled to
a cumulative dividend of 9.5% per annum on the issue price of the shares. The
dividend is payable solely in additional Preferred Shares issued and redeemable
at $100 per share. No dividend has been declared at June 30, 1999, but a
provision for the cumulative dividend at June 30, 1999 has been recorded as an
appropriation of retained deficit.
NOTE C - INVESTMENTS
At June 30, 1999, the Company had fixed maturity securities available for sale
with a carrying value of $19,293,850 and an amortized cost of $20,314,423 and
balances with independent investment managers with a carrying value and a fair
value of $103,861,109. At December 31, 1998 the Company had fixed maturity
securities available for sale with a carrying value of $18,306,720 and an
amortized cost of $17,946,934 and balances with independent investment managers
with a carrying value and a fair value of $77,197,580. The amounts invested with
independent investment managers are, with certain limited exceptions,
withdrawable at least annually, subject to applicable notice requirements.
NOTE D - STATEMENTS OF CASH FLOWS - NON-CASH FINANCING ACTIVITIES
Pursuant to the terms of the Subordinated Notes, interest of $1,350,000 due on
such notes has been paid by the issuance of additional Subordinated Notes in
lieu of cash payments.
6
<PAGE> 7
DELPHI INTERNATIONAL LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE E - COMPUTATION OF NET INCOME PER COMMON SHARE
The following table sets forth the numerators and denominators used to calculate
basic and diluted results per share:
<TABLE>
<CAPTION>
Three Three Six Period From
Months Months Months January 27,
Ended Ended Ended 1998 to
June 30, June 30, June 30, June 30,
1999 1998 1999 1998
----------- ---------- ----------- ----------
<S> <C> <C> <C> <C>
Numerator:
Net income $ 2,178,064 $ 782,823 $ 3,151,120 $3,607,262
Dividends on Preferred Shares (237,500) -- (475,000) --
----------- ---------- ----------- ----------
Net income attributable to common shareholders $ 1,940,564 $ 782,823 $ 2,676,120 $3,607,262
=========== ========== =========== ==========
Denominator:
Weighted average common shares outstanding 4,079,014 4,079,014 4,079,014 4,079,014
Effect of dilutive securities 2,505 242 1,252 142
----------- ---------- ----------- ----------
Weighted average common shares outstanding,
assuming dilution 4,081,519 4,079,256 4,080,266 4,079,156
=========== ========== =========== ==========
</TABLE>
7
<PAGE> 8
DELPHI INTERNATIONAL LTD.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
GENERAL
The following is an analysis of the results of operations and financial
condition of Delphi International Ltd. (the "Company," which term includes the
Company and its consolidated subsidiaries unless the context indicates
otherwise). This analysis should be read in conjunction with the Consolidated
Financial Statements and related notes included in this document, as well as the
Company's report on Form 10-K for the year ended December 31, 1998. Capitalized
terms used herein without definition have the meanings ascribed to them in the
Company's report on Form 10-K for the year ended December 31, 1998.
RESULTS OF OPERATIONS
Six Months Ended June 30, 1999 Compared to
Period From January 27, 1998 to June 30, 1998
Underwriting Income. Premiums for the six months ended June 30, 1999 were $4.1
million as compared to $120.8 million for the period ended June 30, 1998.
Premiums in the first six months of 1999 were derived from a workers'
compensation quota share reinsurance agreement with Safety National. Premiums in
the period ended June 30, 1998 were derived from workers' compensation aggregate
excess of loss reinsurance assumed from Safety National in the amount of $81.0
million and from group long-term disability quota share reinsurance assumed from
RSL in the amount of $39.8 million, both of which transactions were consummated
concurrently with the completion of the rights offering pursuant to which the
Company was initially capitalized.
Investment Income. Investment income for the six months ended June 30, 1999 was
$12.5 million as compared to $6.2 million for the period ended June 30, 1998.
The Company's investment results are derived primarily from the performance of
investment vehicles of independent investment managers. Investment income for
the first six months of 1999 primarily resulted from a recovery in numerous
sectors of the global financial markets during the period, which impacted
positively upon the performance of the investment portfolios of the independent
investment managers.
During the third quarter of 1999, the Company liquidated a substantial portion
of its investments in vehicles of independent investment managers and reinvested
the proceeds in preferred and common securities of a special purpose company,
the assets of which are invested in similar vehicles. Ninety percent of the
Company's investment consists of preferred securities carrying a cumulative
fixed dividend of 15.5% per annum. The Company expects that, in the future, the
amount of such fixed dividends will be included in investment income, which
would serve to mitigate the income volatility associated with this portion of
the Company's investment portfolio. However, such dividends will be subject to
the financial ability of the special purpose company to meet such dividends, as
to which no assurance can be given.
Underwriting and Other Expenses. Losses and loss expenses for the six months
ended June 30, 1999 were $6.4 million as compared to $112.6 million for the
period ended June 30, 1998. Losses and loss expenses in the first half of 1999
primarily reflect the provision for losses assumed under the workers'
compensation quota share reinsurance agreement with Safety National and the
accretion of the discounted values of existing reserves. Losses and loss
expenses incurred for the period ended June 30, 1998 include the discounted
value of the loss portfolios assumed under the reinsurance treaties with Safety
National and RSL.
8
<PAGE> 9
DELPHI INTERNATIONAL LTD.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Underwriting and acquisition expenses totaled $4.8 million for the six months
ended June 30, 1999 as compared to $7.7 million in the period ended June 30,
1998. Underwriting and acquisition expenses in the 1999 period reflect $4.5
million of profit sharing commissions payable under the Safety National and RSL
reinsurance agreements for the period from inception through June 30, 1999.
Underwriting and acquisition expenses of $7.7 million in the 1998 period include
ceding commissions of $4.8 million, profit sharing commissions and other
underwriting expenses of $1.6 million and federal excise taxes of $1.3 million
related to the reinsurance agreements with Safety National and RSL.
Interest expense and other operating expenses for the six months ended June 30,
1999 totaled $2.4 million as compared to $1.9 million in the period ended June
30, 1998. This increase primarily reflects a full six month period of operations
in 1999.
Three Months Ended June 30, 1999 Compared to
Three Months Ended June 30, 1998
Underwriting Income. Premiums for the second quarter of 1999 of $1.6 million
were derived from a workers' compensation quota share reinsurance agreement with
Safety National. There were no premiums in the corresponding period of 1998.
Investment Income (Loss). Investment income for the second quarter of 1999 was
$9.4 million as compared with an investment loss of $1.4 million in the second
quarter of 1998. The Company's investment results are derived primarily from the
performance of investment vehicles of independent investment managers.
Investment income in the second quarter of 1999 primarily resulted from a
continued recovery in numerous sectors of the global financial markets during
the quarter, which impacted positively upon the performance of the investment
portfolios of the independent investment managers. Losses in the second quarter
of 1998 were caused by a decline in the equity markets within certain emerging
market countries.
During the third quarter of 1999, the Company liquidated a substantial portion
of its investments in vehicles of independent investment managers and reinvested
the proceeds in certain preferred and common securities. See the related
discussion above under the caption "Investment Income" on page 8 of this Form
10-Q.
Underwriting and Other Expenses. Losses and loss expenses of $3.0 million in the
second quarter of 1999 primarily reflect the provision for losses assumed under
the workers' compensation quota share reinsurance agreement with Safety National
and the accretion of the discounted values of existing reserves. Losses and loss
expenses incurred in the second quarter of 1998 reflect a $5.4 million reduction
in reserves which resulted from the Company's review of its methods for
estimating and establishing reserves at June 30, 1998, partially offset by the
accretion of the discounted values of existing reserves.
Underwriting and acquisition expenses totaled $4.6 million in the second quarter
of 1999 as compared to $0.9 million in the second quarter of 1998. Underwriting
and acquisition expenses in the second quarter of 1999 reflect $4.5 million of
profit sharing commissions payable under the Safety National and RSL reinsurance
agreements for the period from inception through June 30, 1999. Underwriting and
acquisition expenses in the second quarter of 1998 primarily consist of profit
sharing commissions and other underwriting expenses.
Interest expense and other operating expenses totaled $1.2 million in the second
quarter of 1999, in line with interest expense and other operating expenses of
$1.1 million in the second quarter of 1998.
9
<PAGE> 10
DELPHI INTERNATIONAL LTD.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
The Company's current liquidity needs at the holding company level include
funding operating expenses, interest payments on the Subordinated Notes and the
repayment of incorporation expenses paid by DFG. At the Company's option, the
Company may pay interest on the Subordinated Notes in additional Subordinated
Notes in lieu of cash payments during any five-year period. In the six-month
period to June 30, 1999, $1.4 million of interest due on the Subordinated Notes
was paid by the issuance of additional Subordinated Notes with an aggregate
principal amount of $1.4 million. As of June 30, 1999, the Company had $14.2
million in financial assets at the holding company level. The Company's other
source of liquidity at the holding company level consists of dividends from its
insurance subsidiary, Oracle Re. Dividend payments by Oracle Re to the Company
are subject to certain Bermuda regulatory restrictions as well as contractual
restrictions. Under the LOC Agreement, dividends by Oracle Re in any fiscal year
may generally not exceed the greater of (a) 50% of Oracle Re's statutory net
income for the preceding fiscal year and (b) the lesser of (i) $3,000,000 and
(ii) Oracle Re's statutory net income for the preceding fiscal year. Such
restriction does not permit the payment of dividends by Oracle Re in 1999.
The principal liquidity requirement of Oracle Re, in addition to funding
operating expenses, is the fulfillment of the obligations under its reinsurance
agreements. The primary source of funding for these obligations, in addition to
operating earnings, is the net cash flow from the investments included in Oracle
Re's investment portfolio. Each of Oracle Re's reinsurance agreements written in
the period to December 31, 1998 involved a one-time payment to Oracle Re at
inception and does not provide for ongoing reinsurance premiums. In May 1999,
Oracle Re and RSL agreed to the partial recapture of approximately 35% of the
group long term disability liabilities ceded to Oracle Re under its quota share
reinsurance agreement with RSL. In connection with the partial recapture by RSL
of these liabilities, $10 million in cash, the amount of the reserves
recaptured, was transferred to RSL.
In addition to Oracle Re's current liquidity requirements, Oracle Re is required
to provide collateral security with respect to letters of credit outstanding
under the LOC Agreement and otherwise. Under the LOC Agreement, the collateral
maintenance requirement is equal to up to 140% of the amount of the outstanding
letters of credit. In the event that sufficient collateral cannot be maintained
relative to these requirements, Oracle Re may be required to negotiate with its
reinsureds to reduce the size of the reinsurance transactions, thereby
decreasing the amounts of letters of credit and related collateral requirements
under the LOC Agreement. Moreover, if Oracle Re were unable to furnish
sufficient collateral or otherwise were to fail to satisfy any covenant or
requirement under the LOC Agreement, it may be required to liquidate all or a
substantial portion of its investment portfolio or otherwise secure its
obligations under its reinsurance agreements, which would likely have a material
adverse effect on the business and operations of the Company.
The Company believes that the sources of funding available at the holding
company and insurance subsidiary levels, respectively, will be adequate to
satisfy on both a short-term and long-term basis the companies' applicable
liquidity requirements.
IMPACT OF YEAR 2000
All of the Company's computer related systems are furnished by its third party
administrative services provider, a substantial and reputable firm which
provides similar services to other Bermuda based insurance companies. This firm
has provided the Company with an assurance that it has completed its Year 2000
assessment, and that its computer
10
<PAGE> 11
DELPHI INTERNATIONAL LTD.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
related systems are currently Year 2000 compliant, although such systems are, in
this regard, subject to any further modifications which may be advised by its
computer related systems suppliers. The Company's third party administrative
services provider plans to continue monitor and test its critical systems for
Year 2000 compliance throughout the remainder of 1999. The Company has also
requested assurances of Year 2000 compliance from its other significant business
partners and vendors in an effort to resolve any potential problems with the
products and services they provide. In most cases, alternative vendors could be
utilized in the event Year 2000 compliance problems are encountered. During
1999, the Company will develop appropriate contingency plans in the event any of
the computer systems of its administrative services provider, business partners
and vendors are not Year 2000 compliant. The costs of the Company's activities
relating to the Year 2000 issue have not been and are not expected to be
material to the Company's financial condition or results of operations. The
Company does not believe that the Year 2000 issue will have a material effect on
its operations; however, no assurance can be given in this regard.
MARKET RISK
There have been no material changes in the Company's exposure to market risk or
its management of such risk since December 31, 1998.
CAUTIONARY STATEMENT REGARDING FORWARD LOOKING INFORMATION
In connection with and because it desires to take advantage of the "safe harbor"
provisions of the Private Securities Litigation Reform Act of 1995, the Company
cautions its readers regarding certain forward-looking statements in the
foregoing discussions and elsewhere in the Form 10-Q and in any other statement
made by, or on behalf of, the Company, whether or not in future filings with the
Securities and Exchange Commission. Forward-looking statements are statements
not based on historical information and which relate to future operations,
strategies, financial results or other developments. Some forward-looking
statements may be identified by the use of terms such as "expects," "believes,"
"anticipates," "intends," or "judgment." Forward-looking statements are
necessarily based upon estimates and assumptions that are inherently subject to
significant business, economic and competitive uncertainties and contingencies,
many of which are beyond the Company's control and many of which, with respect
to future business decisions, are subject to change. Examples of such
uncertainties and contingencies include changes in global economic and financial
conditions and markets, the Company's investment strategy and implementation
thereof, the performance of the Company's investment portfolio, the ability of
the Company to generate new business opportunities and submissions, changes in
insurance or other laws and regulations or governmental interpretations thereof,
and the ability of the Company's or significant third parties' computer systems
to process correctly dates in and after the year 2000. These uncertainties can
affect actual results and could cause actual results to differ materially from
those expressed in any forward-looking statements made by, or on behalf of, the
Company. The Company disclaims any obligation to update forward-looking
information.
11
<PAGE> 12
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
The Company held its Annual General Meeting of Shareholders on May 10,
1999. Three directors were elected at the meeting for a term of three
years. The voting results for all matters at the meeting were as
follows:
1) Election of Directors:
<TABLE>
<CAPTION>
VOTES
------------------------
Withhold
For Authority
--------- ---------
<S> <C> <C>
Colin O'Connor............................. 1,978,894 14,000
Edward A. Fox.............................. 1,978,894 14,000
Charles P. O'Brien......................... 1,893,676 99,218
</TABLE>
2) With regard to the adoption of the consolidated financial statements
of the Company for the period ended December 31, 1998, this proposal
received 1,977,872 votes for approval, 14,000 votes against approval
and 1,022 votes abstaining.
3) With regard to the appointment of Ernst & Young as the Company's
independent auditors for the fiscal year ending December 31, 1999,
this proposal received 1,973,214 votes for approval, 18,680 votes
against approval and 1,000 votes abstaining.
4) With regard to the approval of the Company's Director and Employee
Stock Option Plan, this proposal received 1,388,958 votes for
approval, 34,694 votes against approval and 4,000 votes abstaining.
5) With regard to the amendment of the Company's Bye-Law 42 concerning
the quorum required at General Meetings of the Company, this
proposal received 1,405,614 votes for approval, 15,174 votes against
approval and 6,864 votes abstaining.
6) With regard to proposals to be considered by the Company, as the
holder of all outstanding voting common shares of Oracle Reinsurance
Company Ltd. and O.R. Investments Ltd., at the Annual General
Meetings of Oracle Reinsurance Company Ltd. and O.R. Investments
Ltd., this proposal received 1,405,482 votes for approval, 15,500
votes against approval and 6,670 votes abstaining.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
11 - Computation of Net Income per Share of Common
Stock (incorporated by reference to Note E to
the Consolidated Financial Statements included
elsewhere herein)
27 - Financial Data Schedule
(b) Reports on Form 8-K
None
<PAGE> 13
SIGNATURES
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.
DELPHI INTERNATIONAL LTD. (Registrant)
/s/ C. O'CONNOR
---------------
C. O'Connor
President and Chief Executive Officer
(Principal Executive Officer)
/s/ D. EZEKIEL
--------------
D. Ezekiel
Vice President and Director
(Principal Accounting and Financial Officer)
Date: August 13, 1999
13
<TABLE> <S> <C>
<ARTICLE> 7
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET AS OF JUNE 30, 1999 (UNAUDITED) AND THE CONSOLIDATED
STATEMENT OF INCOME FOR THE PERIOD FROM JANUARY 1, 1999 TO JUNE 30, 1999
(UNAUDITED) AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> JUN-30-1999
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0
1,010
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4,054,282
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