<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
FORM 10-Q
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1994
[ ] 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 1-9627
ZENITH NATIONAL INSURANCE CORP.
[Exact name of registrant as specified in its charter]
DELAWARE 95-2702776
[State or other jurisdiction of [I.R.S. Employer
incorporation or organization] identification No.]
21255 Califa Street, Woodland Hills, California 91367-5021
[Address of principal executive offices] [Zip Code]
[818] 713-1000
[Registrant's telephone number, including area code]
Not Applicable
[Former name, former address and former fiscal year, if changed
since last report.]
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 / /
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date. At April 30, 1994, 18,871,000
shares of common stock were outstanding, net of 5,069,000 shares of treasury
stock.
Page 1
<PAGE>
PART I FINANCIAL INFORMATION
ZENITH NATIONAL INSURANCE CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET (UNAUDITED)
<TABLE>
<CAPTION>
ITEM 1:
Dollars and Shares in Thousands MAR. 31,1994 DEC. 31, 1993
<S> <C> <C>
ASSETS
Investments
Fixed maturities:
At amortized cost (market $415,461 & $438,705) $ 399,827 $ 401,337
At fair value (cost $789,483 & $687,075) 775,302 705,682
Floating rate preferred stocks, at fair value (cost $22,780 & $30,582) 23,836 31,495
Convertible and non redeemable preferred stocks, at fair value
(cost $11,545 & $11,545) 10,667 11,246
Common stocks, at fair value (cost $21,323 & $14,485) 21,246 15,575
Mortgage loans on real estate 1,495 4,515
Policy loans 39,766 39,609
Short-term investments (at cost, which approximates fair value) 184,797 276,841
Other investments 21,664 14,097
---------- ----------
TOTAL INVESTMENTS 1,478,600 1,500,397
Cash 8,690 8,560
Accrued investment income 20,412 21,635
Premiums receivable 67,070 59,188
Premium notes receivable, collateralized by letters of credit 646 1,647
Receivable from reinsurers and prepaid reinsurance premiums 57,290 57,426
Earned but unbilled premiums receivable 4,358 4,586
Deferred policy acquisition costs 109,100 108,416
Properties and equipment, less accumulated depreciation 48,059 47,042
Excess of cost over net assets acquired and purchased intangibles and other assets 24,877 25,225
Other assets 28,907 23,668
---------- ----------
TOTAL ASSETS $ 1,848,009 $ 1,857,790
---------- ----------
---------- ----------
LIABILITIES
Policy liabilities and accruals
Unpaid losses and loss expenses $ 506,913 $ 513,270
Future policy benefits for life insurance contracts 155,391 154,501
Deposits on deferred annuity contracts 554,728 545,956
Policy and contract claims 5,288 5,934
Unearned premiums 119,335 111,896
Policyholders' dividends accrued and accumulated 36,228 30,378
Other policyholder funds 16,296 16,857
Reserves on loss portfolio transfers 10,642 11,119
Senior notes payable, less unamortized issue costs of $980 & $1,011 74,020 73,989
Federal income tax 2,093 14,255
Other liabilities 36,160 30,170
---------- ----------
TOTAL LIABILITIES 1,517,094 1,508,325
---------- ----------
STOCKHOLDERS' EQUITY
Preferred stock, $1 par - shares authorized 1,000; issued and outstanding,
none in 1994 and 1993
Common stock, $1 par - shares authorized 50,000; issued 23,935,
outstanding 18,866, 1994; issued 23,910, outstanding 18,841, 1993 23,935 23,910
Additional paid-in capital 249,538 249,092
Retained earnings 151,533 148,043
Net unrealized appreciation (depreciation) on investments, net of $4,400 of
deferred tax benefit in 1994 and $7,093 deferred tax expense in 1993 (9,335) 13,176
---------- ----------
415,671 434,221
Less treasury stock at cost (5,069 shares, 1994 and 1993) (84,756) (84,756)
---------- ----------
TOTAL STOCKHOLDERS' EQUITY 330,915 349,465
---------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 1,848,009 $ 1,857,790
---------- ----------
---------- ----------
</TABLE>
The accompanying notes are an integral part of this statement.
Page 2
<PAGE>
ZENITH NATIONAL INSURANCE CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS
ENDED MARCH 31,
1994 1993
( Dollars in Thousands,
except per share data)
<S> <C> <C>
CONSOLIDATED REVENUES:
Property and casualty premium income $ 97,871 $ 97,246
Health and life premium income and other policy charges 15,422 16,689
Net investment income 23,143 24,324
Realized gains on investments 1,816 4,997
--------- ---------
Total revenues 138,252 143,256
EXPENSES:
Property and casualty losses and loss expenses incurred 59,456 67,183
Health and life benefits and other policy credits 19,650 22,296
Policy acquisition costs 19,492 18,496
Other underwriting and operating expenses 16,850 13,692
Policyholders' dividends and participation 8,848 3,814
Interest expense 1,572 1,774
--------- ---------
Total expenses 125,868 127,255
--------- ---------
Net income before federal income tax 12,384 16,001
Federal income tax 4,184 3,401
--------- ---------
NET INCOME $ 8,200 $ 12,600
--------- ---------
--------- ---------
EARNINGS PER SHARE:
Net Income per share $ 0.43 $ 0.66
--------- ---------
--------- ---------
</TABLE>
The accompanying notes are an integral part of this statement.
Page 3
<PAGE>
ZENITH NATIONAL INSURANCE CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
<TABLE>
<CAPTION>
FOR THE THREE
MONTHS ENDED
Dollars in thousands 1994 1993
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Premiums collected $ 116,293 $ 119,779
Investment income received 24,002 22,605
Deposits on universal life-type contracts 3,571 4,916
Losses & loss adjustment expenses paid (66,144) (69,032)
Health claims paid (7,703) (8,107)
Death and surrender benefits paid (4,084) (2,703)
Underwriting & other operating expenses paid (31,055) (31,841)
Real estate construction in progress (4,030)
Reinsurance premiums paid (6,401) (3,422)
Dividends paid to policyholders (3,343) (4,329)
Special policyholders' dividend - Proposition 103 rollback refund (18,350)
Interest paid (26) (56)
Interest on deferred annuity contracts (7,954) (8,565)
Income taxes (paid) refunded (4,801) 109
Purchase of trading portfolio investments (8,021)
Proceeds from sales of trading portfolio investments 114,696
---------- ----------
Net cash flows from operating activities 115,000 1,004
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of invested assets:
Debt and equity securities - Held-to-Maturity (15,286)
Debt and equity securities - Available-for-Sale (429,941)
Other debt and equity securities and other investments (7,488) (181,130)
Proceeds from maturities and exchanges of investments:
Debt and equity securities - Held-to-Maturity 16,734
Debt and equity securities - Available-for-Sale 51,136
Other debt and equity securities and other investments 3,320 34,804
Proceeds from sales of investments:
Debt and equity securities - Available-for-Sale 170,951
Other debt and equity securities and other investments 1,239 116,945
Capital and other expenditures (2,206) (782)
Losses and loss adjustment expenses paid under portfolio transfers (477) (756)
Net decrease in short-term investments 92,682 14,337
---------- ----------
Net cash flows from investing activities (119,336) (16,582)
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash dividends paid to common stockholders (4,709) (4,709)
Proceeds from exercise of stock options 420 4,653
Deposits on deferred annuity contracts 10,774 17,049
Acquisition costs of deferred annuity contracts, deferred (1,015) (1,890)
Annuitization & return of policyholders' balances on deferred annuity contracts (8,958) (4,354)
Interest on deferred annuity contracts 7,954 8,565
Purchase of treasury shares (284)
---------- ----------
Net cash flows from financing activities 4,466 19,030
---------- ----------
Net increase in cash 130 3,452
Cash at beginning of period 8,560 1,856
---------- ----------
Cash at March 31, $ 8,690 $ 5,308
---------- ----------
---------- ----------
</TABLE>
Page 4
(continued)
<PAGE>
ZENITH NATIONAL INSURANCE CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
(continued)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS
ENDED MARCH 31,
1994 1993
( Dollars in Thousands)
<S> <C> <C>
RECONCILIATION OF NET INCOME TO NET CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 8,200 $ 12,600
Adjustments to reconcile net income to net cash
flows from operating activities:
Depreciation 1,192 1,218
Amortization of intangibles and discount on notes 379 352
Net (accretion) amortization of bonds and preferred stocks (433) 384
Realized gains on investments (1,816) (4,997)
Decrease (increase) in:
Accrued investment income 1,223 (2,185)
Premiums receivable (6,653) (1,574)
Receivable from reinsurers 136 2,368
Deferred policy acquisition costs 331 (3,342)
Federal income taxes (617) 3,510
Increase (decrease) in:
Unpaid losses and loss expenses (6,357) (2,235)
Future policy benefits for life insurance contracts 890 4,250
Policy and contract claims (646) 615
Unearned premiums 7,439 4,718
Policyholders' dividends accrued and accumulated 5,850 221
Special policyholders' dividend - Proposition 103 rollback refund (18,111)
Other policyholder funds (561) 152
Net cash from trading portfolio 106,675
Other (232) 3,060
--------- ---------
Net cash flows from operating activities $ 115,000 $ 1,004
--------- ---------
--------- ---------
</TABLE>
The accompanying notes are an integral part of this statement.
Page 5
<PAGE>
ZENITH NATIONAL INSURANCE CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
<TABLE>
<CAPTION>
Note 1. Computation of Earnings per Share: FOR THE THREE MONTHS
ENDED MARCH 31,
1994 1993
<S> <C> <C>
(A) Net income $ 8,200,000 $ 12,600,000
------------ ------------
------------ ------------
(B) Number of shares used in calculating
primary earnings per share:
Weighted average outstanding shares
during the period 18,853,000 18,932,000
Additional common shares issuable under
employee stock options using the
treasury stock method (1) 182,000 294,000
------------ ------------
19,035,000 19,226,000
------------ ------------
------------ ------------
Net income per share (A)/(B) $ 0.43 $ 0.66
------------ ------------
------------ ------------
(C) Number of fully diluted shares:
Weighted average outstanding shares
during the period 18,853,000 18,932,000
Additional common shares issuable under
employee stock options using the
treasury stock method (2) 182,000 380,000
------------ ------------
19,035,000 19,312,000
------------ ------------
------------ ------------
Net income per share (A)/(C) $ 0.43 $ 0.65
------------ ------------
------------ ------------
<FN>
(1) Based on the average market price during the period.
(2) Based on the higher of the average market price or price at the end of each
period.
</TABLE>
Note 2. Subsequent event
In April 1994, Zenith executed a letter of intent to sell its wholly owned
subsidiary, CalFarm Life Insurance Company ("CalFarm Life"), a California life
insurance company, to Conseco Capital Partners II, L.P. for approximately
$120,000,000, with Zenith retaining the health insurance written by CalFarm
Life. The transaction is subject, among other things, to the negotiation of a
definitive agreement and the receipt of all necessary regulatory approvals.
Page 6
<PAGE>
ZENITH NATIONAL INSURANCE CORP. AND SUBSIDIARIES
PART I FINANCIAL INFORMATION
In the opinion of management, all adjustments necessary for a fair
presentation of the results of operations for the periods presented
(consisting only of normal recurring adjustments) have been included.
The results of operations for an interim period are not necessarily
indicative of the results for an entire year.
On March 17, 1994, the Board of Directors declared a regular quarterly
cash dividend of $.25 per share on the outstanding shares, payable May
13, 1994 to stockholders of record at the close of business on April 29,
1994.
ITEM 2:
MANAGEMENT'S DISCUSSION AND ANALYSIS OF CONSOLIDATED
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of operations of Zenith's business segments were as follows:
<TABLE>
<CAPTION>
- - -------------------------------------------------------------------------------------------------------
Dollars in Thousands, Three Months Ended March 31,
except per share data 1994 Per 1993 Per
Share Share
- - -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Income (loss) after tax and before realized gains:
Property and Casualty $6,765 $7,537
Health and Life 1,970 1,901
Parent (1,715) (1,835)
-------------------------------------
Total 7,020 $0.37 7,603 $0.40
Realized gains( losses) on investments after tax:
Property and Casualty 1,160 1,508
Health and Life 19 2,979
Parent 1 510
-------------------------------------
Total 1,180 0.06 4,997 0.26
Net income (loss)
Property and Casualty 7,925 9,045
Health and Life 1,989 4,880
Parent (1,714) (1,325)
-------------------------------------
Total $8,200 $0.43 $12,600 $0.66
- - -------------------------------------------------------------------------------------------------------
</TABLE>
Following is a discussion of the comparative results of Zenith's business
segments:
PROPERTY AND CASUALTY OPERATIONS:
Results of operations of the Property and Casualty segment declined for
the quarter ended March 31,1994 compared to the corresponding period in
1993 due to a decline in investment income of $1.1 million after tax,
offset by an overall increase in underwriting income of $300,000 after
tax, despite the earthquake losses hereinafter described. See page 10 for
a discussion of investment income and yields.
Page 7
<PAGE>
Premiums earned, underwriting results and combined ratios for the three
months ended March 31, 1994 and 1993 were as follows:
<TABLE>
<CAPTION>
- - -------------------------------------------------------------------------------------------------------
Three Months Ended March 31,
%
Dollars in Thousands 1994 1993 Increase
(Decrease)
- - -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Premiums earned
Workers' Compensation $52,968 $57,975 (9%)
Automobile and Other Property & Casualty 36,525 33,409 9%
Reinsurance 8,378 5,862 43%
-----------------------
Total $97,871 $97,246 1%
-----------------------
-----------------------
Underwriting Income (Loss) Before Taxes
Worker's Compensation $5,219 $2,407
Automobile and Other Property & Casualty (2,098) (2,745)
Reinsurance (1,557) 1,367
----------------------
Total $1,564 $1,029
Combined Ratios
Workers'Compensation 90.1% 95.8%
Automobile and Other Property & Casualty 105.7% 108.2%
Reinsurance 118.6% 76.7%
Total 98.4% 98.9%
- - -------------------------------------------------------------------------------------------------------
</TABLE>
Workers' Compensation premiums decreased in the quarter ended March 31,
1994 compared to the corresponding period in 1993 principally because of
decreases in minimum rates in July 1993 and January 1994 and a decrease
in new and renewal surcharge business due to favorable industry trends,
offset in part by increased new business, principally in the Los Angeles
area and Texas. The increases in premiums earned in the Automobile and
Other Property and Casualty and Reinsurance operations were principally
attributable to new business and rate increases for Farmowners' and
Homeowners' policies in the Automobile and Other Property and Casualty
operation. Workers' Compensation underwriting income increased in the
quarter ended March 31, 1994 compared to the corresponding period in
1993 primarily because of favorable loss frequency and loss development
trends, partially offset by $2.0 million of expenses attributable to
repairs to Zenith's home office building and operating costs relating
to the Northridge earthquake in January 1994. Results of operations
in the first quarter of 1994 in the Automobile and Other Property and
Casualty operation and the Reinsurance operation were adversely affected
by $2.3 million and $4.8 million, respectively, of losses attributable
to claims arising out of the Northridge earthquake.
An uncertain political and regulatory environment, both state and
federal, including proposals relating to National Health Insurance, a
proposed California initiative to create a single payer health system and
the 1993 workers' compensation legislation in California and other areas;
the lack of economic growth in parts of California; a highly competitive
Page 8
<PAGE>
insurance industry; and the changing environment for controlling medical,
legal and rehabilitation costs, as well as fraud and abuse, are all
factors that continue to impact our environment. Although management is
currently unable to predict the effect of any of the foregoing, these
trends and uncertainties could have a material effect on Zenith's future
operations and financial condition.
HEALTH AND LIFE:
Results of operations of the Health and Life segment were relatively
unchanged for the quarter ended March 31, 1994 compared to the
corresponding period in 1993.
In April 1994, Zenith executed a letter of intent to sell its wholly
owned subsidiary, CalFarm Life, for approximately $120,000,000, with
Zenith retaining the health insurance business written by CalFarm Life.
The transaction is subject to, among other things, the negotiation of a
definitive agreement and the receipt of all the necessary regulatory
approvals. Premiums earned from health insurance in the first quarter of
1994 were $9,618,000 compared to $11,279,000 for the corresponding period
in 1993 and the after tax results of operations attributable to the
health insurance business were $479,000 compared to $518,000 for the
first quarter of 1994 and 1993, respectively.
INVESTMENTS:
During the first quarter of 1994, interest rates, which reached
historically low levels in 1993, began to increase with a corresponding
decline in the fair values of fixed maturity investments and some decline
in the value of certain equity securities. At March 31, 1994, the
unrealized loss on fixed maturities identified as available-for-sale was
$13,783,000, before deferred taxes, compared to an unrealized gain of
$18,755,000, before deferred taxes, at December 31,1993. This change caused
a decrease in stockholders' equity of $22,511,000, after deferred taxes,
between December 31, 1993 and March 31, 1994. In April 1994, bond prices
continued to decline. Stockholders' equity will continue to be affected by
future volatility, if any, in the bond markets.
PAGE 9
<PAGE>
Results of operations are significantly impacted by investment income,
which was as follows:
<TABLE>
<CAPTION>
- - -------------------------------------------------------------------------------------------------------
Investment Income Three Months Ended March 31,
Dollars in Thousands 1994 1993
- - -------------------------------------------------------------------------------------------------------
<S> <C> <C>
Property and Casualty Portfolio (incl. parent)
Pre-tax $8,712 $10,006
Post-tax 5,889 6,964
Health and Life Portfolio
Pre-tax 14,431 14,318
Post-tax 9,380 9,450
Consolidated
Pre-tax 23,143 24,324
Post-tax $15,269 $16,414
- - -------------------------------------------------------------------------------------------------------
</TABLE>
The yields on invested assets were as follows:
<TABLE>
<CAPTION>
- - -------------------------------------------------------------------------------------------------------
Investment Yields Three Months Ended March 31,
1994 1993
- - -------------------------------------------------------------------------------------------------------
<S> <C> <C>
Property and Casualty Portfolio (incl. parent)
Pre-tax 4.7% 5.7%
Post-tax 3.2% 4.0%
Health and Life Portfolio
Pre-tax 7.5% 8.3%
Post-tax 4.9% 5.5%
- - -------------------------------------------------------------------------------------------------------
</TABLE>
The decrease in yields was attributable to generally lower interest rates
during the first quarter of 1994 compared to the first quarter of 1993.
However, yields on invested assets were higher in the first quarter of
1994 than in the fourth quarter of 1993, reflecting the upward trend in
interest rates referred to above.
Zenith maintains a diversified portfolio consisting of common stocks,
preferred stocks, principally investment grade bonds and other
investments. The goal is to maintain safety and liquidity, enhance
principal values and achieve increased rates of return consistent with
regulatory constraints.
Page 10
<PAGE>
<TABLE>
<CAPTION>
The distribution of Zenith's consolidated
investment portfolio is shown in the following table:
- - -----------------------------------------------------------------------------------------------------------------------
AT MARCH 31,1994 AT DECEMBER 31,1993
Dollars in Thousands Carrying Fair Carrying Fair
Value % of Total Value Value % of Total Value
- - -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Bonds:
Investment grade
U.S. Government securities $457,706 31.0% $455,927 $442,369 29.4% $443,551
Other 662,630 44.8% 680,043 613,680 40.9% 649,866
Non-investment grade 21,830 1.5% 21,830 17,995 1.2% 17,995
Stocks:
Redeemable preferred:
Investment grade 30,597 2.1% 30,597 30,589 2.0% 30,589
Non-investment grade 2,366 0.2% 2,366 2,386 0.2% 2,386
Other preferred 34,503 2.3% 34,503 42,741 2.9% 42,741
Common 21,246 1.4% 21,246 15,575 1.0% 15,575
Short-term investments
U.S. Government securities 96,604 6.5% 96,604 124,306 8.3% 124,306
Other 88,193 6.0% 88,193 152,535 10.2% 152,535
Other investments 62,925 4.2% 58,221 3.9%
- - -----------------------------------------------------------------------------------------------------------------------
Total investments $1,478,600 100.0% $1,500,397 100.0%
- - -----------------------------------------------------------------------------------------------------------------------
</TABLE>
The carrying value of non-investment grade bonds and preferred stocks
owned by Zenith's property and casualty subsidiaries was 7.3% and 6.2% of
statutory surplus at March 31, 1994 and December 31, 1993, respectively.
The carrying value of non-investment grade bonds owned by Zenith's life
insurance subsidiary was 33.5% and 34.8% of statutory capital and surplus
at March 31, 1994 and December 31, 1993, respectively. The carrying
values of non-investment grade bonds and preferred stocks for these
comparisons are based upon values and ratings used by the Securities
Valuation Office of the National Association of Insurance Commissioners
("NAIC"). The NAIC may assign a non-investment grade rating to a
security that is rated investment grade by one or more rating agency.
Page 11
<PAGE>
<TABLE>
<CAPTION>
The change in the carrying value of Zenith's consolidated investment
portfolio during 1994 was as follows:
Dollars in thousands
- - -----------------------------------------------------------------------------------------------------
<S> <C> <C>
Carrying Value at December 31,1993 $1,500,397
Purchases at cost 460,736
Maturties and exchanges of investments (71,190)
Proceeds from sales of fixed maturity investments:
Available-for-sale (149,868)
Trading portfolio (103,042)
Held-to-maturity None
Proceeds from sales of other investments (33,976)
--------
Total proceeds from disposals of investments (286,886)
Realized gains from maturities and exchanges of investments:
Held-to-maturity 274
Available-for-sale 208
Realized gains from sales of investments:
Available-for-sale 300
Trading portfolio 332
Other investments 702
--------
Total realized gains on investments 1,816
Unrealized losses on investments (34,004)
Decrease in short-term investments (92,682)
Net accretion of bonds and preferred stocks and other changes 413
- - -----------------------------------------------------------------------------------------------------
Carrying Value at March 31, 1994 $1,478,600
- - -----------------------------------------------------------------------------------------------------
</TABLE>
REAL ESTATE:
At March 31, 1994, a total of $13.0 million was invested in real estate
under construction being operated by a 100% owned subsidiary of Zenith.
Sales of homes have commenced with closings scheduled in the second
quarter of 1994.
LIQUIDITY:
Zenith is principally dependent upon its portfolio of marketable
securities and the investment yields thereon, dividends from its
insurance subsidiaries, whose operations are supported by their own cash
flow, and available lines of credit ($50,000,000 at March 31, 1994) to
pay its expenses, service debt and pay any cash dividends which may be
declared to its stockholders. In the opinion of management, Zenith's
sources of liquidity are sufficient to fund its short-term and long-term
requirements for liquidity.
After adjusting for the effects of the cash flows from sales of assets
from the trading portfolio in 1994 and for the cash flow from Proposition
103 refunds in 1993, cash flow from operations decreased in the three
months ended March 31, 1994 compared to the corresponding period in 1993
by approximately $8 million. The decline was attributable, principally,
to real estate construction expenditures in 1994 and the timing of
federal income tax payments in the first quarter of 1994 compared to the
first quarter of 1993.
Page 12
<PAGE>
ZENITH NATIONAL INSURANCE CORP. AND SUBSIDIARIES
PART II OTHER INFORMATION
Item 6: Exhibits and Reports on Form 8-K
[a] Exhibits
[11] Statement re: computation of per share earnings
Part 1, Item 1, Note 1 of the consolidted financial statements is
incoporated herein by reference
[b] Reports on Form 8-K
None
Page 13
<PAGE>
ZENITH NATIONAL INSURANCE CORP. AND SUBSIDIARIES
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.
ZENITH NATIONAL INSURANCE CORP.
Registrant
Date: May 11, 1994 \STANLEY R. ZAX\
-------------------------------------------
Stanley R. Zax, Chairman of the Board
& President (Principal Executive Officer)
\FREDRICKA TAUBITZ\
-------------------------------------------
Date: May 11, 1994 Fredricka Taubitz, Executive Vice President
& Chief Financial Officer (Principal
Accounting Officer)
Page 14
<PAGE>
ZENITH NATIONAL INSURANCE CORP. AND SUBSIDIARIES
EXHIBIT INDEX
Exhibit No. Description Page
[11] Statement re: computation of per share earnings 6
incorporated herein by reference to Part I, Item 1,
Note 1 of the consolidated financial statements
Page 15
