SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC. 20549
FORM 11-K
ANNUAL REPORT PURSUANT TO
SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (FEE REQUIRED)
For the Fiscal Year ended December 31, 1997
EMPLOYEE SAVINGS AND STOCK OWNERSHIP PLAN
OF
GENERAL RE CORPORATION
AND ITS DOMESTIC SUBSIDIARIES
(full title of plan)
General Re Corporation
Financial Centre
695 East Main Street
Stamford, Connecticut 06904-2350
(Name of issuer and address of principal executive office)
<PAGE>
FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements - See accompanying Report of Examination of
Independent Accountants.
(b) Exhibit 1 - Consent of Independent Accountants.
<PAGE>
SIGNATURES
The Plan: Pursuant to the requirements of the Securities Exchange Act of 1934,
the plan administrator has duly caused this annual report to be signed by the
undersigned hereunto duly authorized.
PLAN: EMPLOYEES SAVINGS AND STOCK OWNERSHIP
PLAN OF GENERAL RE CORPORATION AND ITS
DOMESTIC SUBSIDIARIES
PLAN
ADMINISTRATOR: GENERAL RE CORPORATION
By:
Elizabeth A. Monrad
Date:
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statement of
General Re Corporation and subsidiaries on Form S-8 (File number 2-75489) of our
report dated June 17, 1998 on our audits of the financial statements and
financial statement schedules of the Employee Savings and Stock Ownership Plan
of General Re Corporation and Its Domestic Subsidiaries as of December 31, 1997
and 1996, and for the year ended December 31, 1997, which report is included in
this Annual Report on Form 11-K.
New York, New York
June 24, 1998.
<PAGE>
EMPLOYEE SAVINGS AND STOCK OWNERSHIP PLAN
OF GENERAL RE CORPORATION
AND ITS DOMESTIC SUBSIDIARIES
Financial Statements
For the Years Ended December 31, 1997 and 1996
and Supplemental Schedules
EMPLOYEE SAVINGS AND STOCK OWNERSHIP PLAN OF
GENERAL RE CORPORATION AND ITS DOMESTIC SUBSIDIARIES
INDEX OF FINANCIAL STATEMENTS AND SCHEDULES
Page(s)
Report of Independent Accountants 2-3
Financial Statements:
Statements of Net Assets Available for Plan
Benefits, with fund information at
December 31, 1997 and 1996 4-5
Statement of Changes in Net Assets Available
for Plan Benefits, with fund information
for the year ended December 31, 1997 6-7
Notes to Financial Statements 8-19
Supplemental Schedules:
Line 27a - Schedule of Assets Held for Investment Purposes
at December 31, 1997 20
Schedules other than those listed above have been omitted since they are either
not required or are not applicable.
1
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees of the Employee Savings and Stock Ownership Plan of General Re
Corporation and Its Domestic Subsidiaries:
We have audited the accompanying statements of net assets available for
plan benefits of the Employee Savings and Stock Ownership Plan of General Re
Corporation and Its Domestic Subsidiaries (the "Plan") as of December 31, 1997
and 1996 and the related statement of changes in net assets available for plan
benefits for the year ended December 31, 1997. These financial statements are
the responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the net assets available for plan benefits of the Plan
as of December 31, 1997 and 1996 and the changes in net assets available for
plan benefits for the year ended December 31, 1997, in conformity with generally
accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on the
basic financial statements taken as a whole. The supplemental schedule of assets
held for investment purposes at December 31, 1997, is presented for the purpose
of additional analysis and is not a required part of the basic financial
statements but is supplementary information required by the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974. The Fund Information in the statement of
net assets available for plan benefits and the statement of changes in net
assets available for plan benefits is presented for purposes of additional
analysis rather than to present the net assets available for plan benefits and
changes in net assets available for plan benefits of each fund. The supplemental
schedule and Fund Information have been subjected to the auditing procedures
applied in the audits of the basic financial statements and, in our opinion, are
fairly stated in all material respects in relation to the basic financial
statements taken as a whole.
2
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS (continued)
The Schedule of Assets Held for Investment Purposes that accompanies the
Plan's financial statements does not disclose the historical cost of the
investments. Disclosure of this information is required by the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974.
New York, New York
June 17, 1998, except for Note 8, as
to which the date is June 19, 1998.
3
<PAGE>
<TABLE>
EMPLOYEE SAVINGS AND STOCK OWNERSHIP PLAN
of GENERAL RE CORPORATION and ITS DOMESTIC SUBSIDIARIES
STATEMENTS OF NET ASSETS AVAILABLE for PLAN BENEFITS, with fund information
December 31, 1997 and 1996
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
General Re General Re PIMCO PIMCO Templeton
Corporation Corporation Founders Global High Developing Janus
Preferred Unitized Balanced Bond Yield Markets Worldwide
Stock Stock Fund Fund Fund Fund Trust Fund
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
December 31, 1997
ASSETS:
Allocated Investments, at
fair value (Note 4) $ 95,332,626 $30,993,976 $2,742,611 $60,474 $577,107 $1,638,280 $8,189,124
Unallocated Investments, at
fair value (Note 4) 268,142,758 - - - - - -
Participant loans receivable - - - - - - -
Interest-bearing cash - 451,828 - - - - -
- ------------------------------------------------------------------------------------------------------------------------------------
Total assets 363,475,384 31,445,804 2,742,611 60,474 577,107 1,638,280 8,189,124
- ------------------------------------------------------------------------------------------------------------------------------------
LIABILITIES:
Loan payable to General Re Corporation
142,286,776 - - - - - -
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets available for plan benefits
December 31, 1997 $221,188,608 $31,445,804 $2,742,611 $60,474 $577,107 $1,638,280 $8,189,124
====================================================================================================================================
Number of shares or units 1,700,231 2,117,345 241,640 6,273 50,009 126,606 216,758
Net asset value per share or unit $130.09 $14.85 $11.35 $9.64 $11.54 $12.94 $37.78
December 31, 1996
ASSETS:
Allocated Investments, at
fair value (Note 4) $ 63,075,357 $26,654,213 $590,052 $55,185 $347,913 $568,709 $2,785,185
Unallocated Investments, at
fair value (Note 4)
209,974,134 - - - - - -
Participant loans receivable
- - - - - - -
- ------------------------------------------------------------------------------------------------------------------------------------
Total assets 273,049,491 26,654,213 590,052 55,185 347,913 568,709 2,785,185
- ------------------------------------------------------------------------------------------------------------------------------------
LIABILITIES:
Loan payable to General Re Corporation 144,286,347 - - - - - -
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets available for plan benefits
December 31, 1996 $128,763,144 $26,654,213 $590,052 $55,185 $347,913 $568,709 $2,785,185
====================================================================================================================================
Number of shares or units 1,711,907 2,434,175 55,613 5,301 31,064 36,929 82,671
Net asset value per share or unit $75.22 $10.95 $10.61 $10.41 $11.20 $15.40 $33.69
- ------------------------------------------------------------------------------------------------------------------------------------
See Notes to Financial Statements
4
<PAGE>
EMPLOYEE SAVINGS AND STOCK OWNERSHIP PLAN
of GENERAL RE CORPORATION and ITS DOMESTIC SUBSIDIARIES
STATEMENTS OF NET ASSETS AVAILABLE for PLAN BENEFITS, with fund information
December 31, 1997 and 1996
- -----------------------------------------------------------------------------------------------------------------------------------
Fidelity
Fidelity Fidelity Investment Fidelity
Fidelity Equity - Growth Grade Intermediate Fidelity Fidelity
Magellan Income Company Bond Bond Overseas Real Estate
Fund Fund Fund Fund Fund Fund Fund
- -----------------------------------------------------------------------------------------------------------------------------------
December 31, 1997
ASSETS:
Allocated Investments, at
fair value (Note 4) $35,380,845 $34,711,812 $13,856,560 $1,766,271 $10,155,539 $6,622,703 $1,836,165
Unallocated Investments, at
fair value (Note 4) - - - - - - -
Participant loans receivable - - - - - - -
Interest-bearing cash - - - - - - -
- -----------------------------------------------------------------------------------------------------------------------------------
Total assets 35,380,845 34,711,812 13,856,560 1,766,271 10,155,539 6,622,703 1,836,165
- -----------------------------------------------------------------------------------------------------------------------------------
LIABILITIES:
Loan payable to General Re Corporation
- - - - - - -
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets available for plan benefits
December 31, 1997 $35,380,845 $34,711,812 $13,856,560 $1,766,271 $10,155,539 $6,622,703 $1,836,165
===================================================================================================================================
Number of shares or units 371,374 662,313 319,865 242,620 998,578 203,525 89,788
Net asset value per share or unit $95.27 $52.41 $43.32 $7.28 $10.17 $32.54 $20.45
December 31, 1996
ASSETS:
Allocated Investments, at
fair value (Note 4) $30,860,025 $24,782,210 $11,421,815 $1,144,566 $9,852,933 $7,848,523 $354,756
Unallocated Investments, at
fair value (Note 4) - - - - - - -
Participant loans receivable - - - - - - -
- -----------------------------------------------------------------------------------------------------------------------------------
Total assets 30,860,025 24,782,210 11,421,815 1,144,566 9,852,933 7,848,523 354,756
- -----------------------------------------------------------------------------------------------------------------------------------
LIABILITIES:
Loan payable to General Re Corporation
- - - - - - -
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets available for plan benefits
December 31, 1996 $30,860,025 $24,782,210 $11,421,815 $1,144,566 $9,852,933 $7,848,523 $354,756
===================================================================================================================================
Number of shares or units 382,641 578,618 282,299 160,754 977,474 254,492 19,676
Net asset value per share or unit $80.65 $42.83 $40.46 $7.12 $10.08 $30.84 $18.03
- -----------------------------------------------------------------------------------------------------------------------------------
See Notes to Financial Statements
4a
<PAGE>
EMPLOYEE SAVINGS AND STOCK OWNERSHIP PLAN
of GENERAL RE CORPORATION and ITS DOMESTIC SUBSIDIARIES
STATEMENTS OF NET ASSETS AVAILABLE for PLAN BENEFITS, with fund information
December 31, 1997 and 1996
- -----------------------------------------------------------------------------------------------------------------------------------
Fidelity Fidelity Fidelity Fidelity Fidelity
Fidelity Asset Asset Emerging Asset Small Cap
Balanced Manager Manager: Markets Manager: Selector
Fund Fund Growth Fund Fund Income Fund Fund
- -----------------------------------------------------------------------------------------------------------------------------------
December 31, 1997
ASSETS:
Allocated Investments, at
fair value (Note 4) $2,434,320 $1,830,884 $ 3,163,938 $130,434 $334,106 $5,474,886
Unallocated Investments, at
fair value (Note 4) - - - - - -
Participant loans receivable - - - - - -
Interest-bearing cash - - - - - -
- -----------------------------------------------------------------------------------------------------------------------------------
Total assets 2,434,320 1,830,884 3,163,938 130,434 334,106 5,474,886
- -----------------------------------------------------------------------------------------------------------------------------------
LIABILITIES:
Loan payable to General Re Corporation - - - - - -
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets available for plan benefits
December 31, 1997 $2,434,320 $1,830,884 $ 3,163,938 $130,434 $334,106 $5,474,886
===================================================================================================================================
Number of shares or units 159,418 99,776 171,209 13,587 27,431 343,684
Net asset value per share or unit $15.27 $18.35 $18.48 $9.60 $12.18 $15.93
December 31, 1996
ASSETS:
Allocated Investments, at
fair value (Note 4) $1,888,213 $1,401,557 $1,782,166 $107,617 $174,841 $2,862,463
Unallocated Investments, at
fair value (Note 4) - - - - - -
Participant loans receivable - - - - - -
- -----------------------------------------------------------------------------------------------------------------------------------
Total assets 1,888,213 1,401,557 1,782,166 107,617 174,841 2,862,463
- -----------------------------------------------------------------------------------------------------------------------------------
LIABILITIES:
Loan payable to General Re Corporation - - - - - -
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets available for plan benefits
December 31, 1996 $1,888,213 $1,401,557 $1,782,166 $107,617 $174,841 $2,862,463
===================================================================================================================================
Number of shares or units 134,106 85,098 109,001 6,475 15,060 211,096
Net asset value per share or unit $14.08 $16.47 $16.35 $16.62 $11.61 $13.56
- -----------------------------------------------------------------------------------------------------------------------------------
See Notes to Financial Statements
5
<PAGE>
EMPLOYEE SAVINGS AND STOCK OWNERSHIP PLAN
of GENERAL RE CORPORATION and ITS DOMESTIC SUBSIDIARIES
STATEMENTS OF NET ASSETS AVAILABLE for PLAN BENEFITS, with fund information
December 31, 1997 and 1996
- -----------------------------------------------------------------------------------------------------------------------------------
Fidelity Fidelity Fidelity Spartan
Retirement Retirement Managed U.S. Equity
Money Market Government Income Index
Portfolio Portfolio Portfolio Fund Other Total
- -----------------------------------------------------------------------------------------------------------------------------------
December 31, 1997
ASSETS:
Allocated Investments, at
fair value (Note 4) $14,756,416 $4,581,184 $8,280,150 $8,653,942 - $293,504,353
Unallocated Investments, at
fair value (Note 4) - - - - - 268,142,758
Participant loans receivable - - - - 7,076,227 7,076,227
Interest-bearing cash - - - - - 451,828
- -----------------------------------------------------------------------------------------------------------------------------------
Total assets 14,756,416 4,581,184 8,280,150 8,653,942 7,076,227 569,175,166
- -----------------------------------------------------------------------------------------------------------------------------------
LIABILITIES:
Loan payable to General Re Corporation - - - - - 142,286,776
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets available for plan benefits
December 31, 1997 $14,756,416 $4,581,184 $8,280,150 $8,653,942 $7,076,227 $426,888,390
===================================================================================================================================
Number of shares or units 14,756,416 4,581,184 8,280,150 247,397 - -
Net asset value per share or unit $1.00 $1.00 $1.00 $34.98 - -
December 31, 1996
ASSETS:
Allocated Investments, at
fair value (Note 4) $12,501,203 $1,138,786 $7,930,358 $5,277,244 - $215,405,890
Unallocated Investments, a
fair value (Note 4) - - - - - 209,974,134
Participant loans receivable - - - - 6,521,305 6,521,305
- -----------------------------------------------------------------------------------------------------------------------------------
Total assets 12,501,203 1,138,786 7,930,358 5,277,244 6,521,305 431,901,329
- -----------------------------------------------------------------------------------------------------------------------------------
LIABILITIES:
Loan payable to General Re Corporation - - - - - 144,286,347
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets available for plan benefits
December 31, 1996 $12,501,203 $1,138,786 $7,930,358 $5,277,244 $6,521,305 $287,614,982
===================================================================================================================================
Number of shares or units 12,501,203 1,138,786 7,930,358 195,816 - -
Net asset value per share or unit $1.00 $1.00 $1.00 $26.95 - -
- -----------------------------------------------------------------------------------------------------------------------------------
See Notes to Financial Statements
5a
<PAGE>
EMPLOYEE SAVINGS AND STOCK OWNERSHIP PLAN
of GENERAL RE CORPORATION and ITS DOMESTIC SUBSIDIARIES
STATEMENT of CHANGES in NET ASSETS
AVAILABLE for PLAN BENEFITS,
with fund information for the
year ended December 31, 1997
- ------------------------------------------------------------------------------------------------------------------------------------
General Re General Re PIMCO PIMCO Templeton
Corporation Corporation Founders Global High Developing Janus
Preferred Unitized Balanced Bond Yield Markets Worldwide
Stock Stock Fund Fund Fund Fund Trust Fund
- ------------------------------------------------------------------------------------------------------------------------------------
Additions to net assets attributed to:
Investment income:
Net appreciation (depreciation)
in fair value of investments $92,578,839 $8,533,888 $(19,977) $(4,792) $19,374 $(468,150) $434,970
Interest - 114,341 4,757 462 6,350 5,808 25,517
Dividends 10,541,433 - 221,836 3,813 51,433 113,668 563,514
- ------------------------------------------------------------------------------------------------------------------------------------
103,120,272 8,648,229 206,616 (517) 77,157 (348,674) 1,024,001
- ------------------------------------------------------------------------------------------------------------------------------------
Contributions:
Participants' - 1,381,648 155,919 12,269 69,923 188,095 977,966
Employer's 4,804,628 - - - - - -
Loan repayments - 421,727 21,340 945 13,490 33,969 110,588
Interest-bearing cash - 451,828 - - - - -
National Re transfers in - - 1,651,749 - - - 254,685
- ------------------------------------------------------------------------------------------------------------------------------------
Total additions 107,924,900 10,903,432 2,035,624 12,697 160,570 (126,610) 2,367,240
- ------------------------------------------------------------------------------------------------------------------------------------
Deductions from net assets attributed to:
Benefits paid to participants 2,116,032 1,123,960 65,784 21 156,819 124,046 15,226
Loans written - 658,594 28,758 170 5,311 15,488 79,724
Administrative fee -
Interest expense 13,346,487 - - - - - -
- ------------------------------------------------------------------------------------------------------------------------------------
Total deductions 15,462,519 1,782,554 94,542 191 162,130 139,534 94,950
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase/(decrease) prior to
interfund transfers 92,462,381 9,120,878 1,941,082 12,506 (1,560) (266,144) 2,272,290
Interfund transfers (36,917) (4,329,287) 211,477 (7,217) 230,754 1,335,715 3,131,649
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase / (decrease) 92,425,464 4,791,591 2,152,559 5,289 229,194 1,069,571 5,403,939
Net assets available for benefits:
Beginning of year 128,763,144 26,654,213 590,052 55,185 347,913 568,709 2,785,185
- ------------------------------------------------------------------------------------------------------------------------------------
End of year $221,188,608 $31,445,804 $2,742,611 $60,474 $577,107 $1,638,280 $8,189,124
====================================================================================================================================
See Notes to Financial Statements
6
<PAGE>
EMPLOYEE SAVINGS AND STOCK OWNERSHIP PLAN
of GENERAL RE CORPORATION and ITS DOMESTIC SUBSIDIARIES
STATEMENT of CHANGES in NET ASSETS
AVAILABLE for PLAN BENEFITS,
with fund information for the
year ended December 31, 1997
- ------------------------------------------------------------------------------------------------------------------------------------
Fidelity Fidelity Fidelity
Fidelity Equity - Growth Investment Fidelity Fidelity Fidelity
Magellan Income Company Grade Intermediate Overseas Real Estate
Fund Fund Fund Bond Fund Bond Fund Fund Fund
- ------------------------------------------------------------------------------------------------------------------------------------
Additions to net assets attributed to:
Investment income:
Net appreciation (depreciation) in fair
value of investments $5,275,937 $5,777,868 $814,099 $32,594 $90,037 $456,629 $159,995
Interest 98,177 70,833 48,194 4,792 23,935 32,898 4,707
Dividends 2,294,421 1,875,624 1,321,226 87,678 631,411 330,341 100,734
- ------------------------------------------------------------------------------------------------------------------------------------
7,668,535 7,724,325 2,183,519 125,064 745,383 819,868 265,436
- ------------------------------------------------------------------------------------------------------------------------------------
Contributions:
Participants' 1,648,698 1,678,016 1,303,147 133,352 534,733 556,860 220,438
Employer's - - - - - - -
Loan repayments 297,188 231,927 188,869 17,220 80,011 95,647 11,238
Interest-bearing cash - - - - - - -
National Re transfers in 225,488 2,156,979 - 208,164 - - -
- ------------------------------------------------------------------------------------------------------------------------------------
Total additions 9,839,909 11,791,247 3,675,535 483,800 1,360,127 1,472,375 497,112
- ------------------------------------------------------------------------------------------------------------------------------------
Deductions from net assets attributed to:
Benefits paid to participants 1,820,917 1,671,285 892,066 38,774 239,196 770,066 4,018
Loans written 364,476 241,110 149,904 19,975 78,478 97,936 2,978
Administrative fee 2,278 1,886 225 202 858 128 730
Interest expense - - - - - - -
- ------------------------------------------------------------------------------------------------------------------------------------
Total deductions 2,187,671 1,914,281 1,042,195 58,951 318,532 868,130 7,726
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase/(decrease) prior to
interfund transfers 7,652,238 9,876,966 2,633,340 424,849 1,041,595 604,245 489,386
Interfund transfers (3,131,418) 52,636 (198,595) 196,856 (738,989) (1,830,065) 992,023
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase / (decrease) 4,520,820 9,929,602 2,434,745 621,705 302,606 (1,225,820) 1,481,409
Net assets available for benefits:
Beginning of year 30,860,025 24,782,210 11,421,815 1,144,566 9,852,933 7,848,523 354,756
====================================================================================================================================
End of year $35,380,845 $34,711,812 $13,856,560 $1,766,271 $10,155,539 $6,622,703 $1,836,165
====================================================================================================================================
See Notes to Financial Statements
6a
<PAGE>
EMPLOYEE SAVINGS AND STOCK OWNERSHIP PLAN
of GENERAL RE CORPORATION and ITS DOMESTIC SUBSIDIARIES
STATEMENT of CHANGES in NET ASSETS
AVAILABLE for PLAN BENEFITS,
with fund information for the
year ended December 31, 1997
- ------------------------------------------------------------------------------------------------------------------------------------
Fidelity Fidelity Fidelity
Fidelity Asset Fidelity Asset Small
Fidelity Asset Manager: Emerging Manager: Cap
Balanced Manager Growth Markets Income Selector
Fund Fund Fund Fund Fund Fund
- ------------------------------------------------------------------------------------------------------------------------------------
Additions to net assets attributed to:
Investment income:
Net appreciation (depreciation) in fair
value of investments $140,130 $158,227 $226,104 $(81,131) $10,050 $478,936
Interest 7,479 9,332 11,895 588 2,299 15,576
Dividends 283,422 156,828 329,001 2,879 19,789 378,093
- ------------------------------------------------------------------------------------------------------------------------------------
431,031 324,387 567,000 (77,664) 32,138 872,605
- ------------------------------------------------------------------------------------------------------------------------------------
Contributions:
Participants' 198,441 185,221 325,328 67,679 77,624 424,159
Employer's - - - - - -
Loan repayments 27,536 27,845 47,972 5,416 6,080 42,972
Interest-bearing cash - - - - - -
National Re transfers in - 81,813 328,541 - 65,996 1,091,331
- ------------------------------------------------------------------------------------------------------------------------------------
Total additions 657,008 619,266 1,268,841 (4,569) 181,838 2,431,067
- ------------------------------------------------------------------------------------------------------------------------------------
Deductions from net assets attributed to:
Benefits paid to participants 45,243 99,256 13,154 898 8,072 435,484
Loans written 49,909 37,107 48,411 2,793 8,743 57,827
Administrative fee 495 - - 801 - 1,214
Interest expense - - - - - -
- ------------------------------------------------------------------------------------------------------------------------------------
Total deductions 95,647 136,363 61,565 4,492 16,815 494,525
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase/(decrease) prior to
interfund transfers 561,361 482,903 1,207,276 (9,061) 165,023 1,936,542
Interfund transfers (15,254) (53,576) 174,496 31,878 (5,758) 675,881
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase / (decrease) 546,107 429,327 1,381,772 22,817 159,265 2,612,423
Net assets available for benefits:
Beginning of year 1,888,213 1,401,557 1,782,166 107,617 174,841 2,862,463
====================================================================================================================================
End of year $2,434,320 $1,830,884 $3,163,938 $130,434 $334,106 $5,474,886
====================================================================================================================================
See Notes to Financial Statements
7
<PAGE>
EMPLOYEE SAVINGS AND STOCK OWNERSHIP PLAN
of GENERAL RE CORPORATION and ITS DOMESTIC SUBSIDIARIES
STATEMENT of CHANGES in NET ASSETS
AVAILABLE for PLAN BENEFITS,
with fund information for the
year ended December 31, 1997
- ------------------------------------------------------------------------------------------------------------------------------------
Fidelity Spartan
Retirement Fidelity Fidelity U.S.
Money Retirement Managed Equity
Market Government Income Index
Portfolio Portfolio Portfolio Fund Other Total
- ------------------------------------------------------------------------------------------------------------------------------------
Additions to net assets attributed to:
Investment income:
Net appreciation (depreciation) in fair
value of investments - - - $1,792,643 - $116,406,270
Interest 29,905 4,664 31,528 22,852 - 576,889
Dividends 709,983 143,448 465,863 183,671 - 20,810,109
- ------------------------------------------------------------------------------------------------------------------------------------
739,888 148,112 497,391 1,999,166 - 137,793,268
- ------------------------------------------------------------------------------------------------------------------------------------
Contributions:
Participants' 695,505 63,432 428,883 742,273 - 12,069,609
Employer's - - - - - 4,804,628
Loan repayments 81,919 12,172 99,293 57,461 (1,932,825) -
Interest-bearing cash - - - - - 451,828
National Re transfers in - 2,991,721 - - 235,626 9,292,093
- ------------------------------------------------------------------------------------------------------------------------------------
Total additions 1,517,312 3,215,437 1,025,567 2,798,900 (1,697,199) 164,411,426
- ------------------------------------------------------------------------------------------------------------------------------------
Deductions from net assets attributed to:
Benefits paid to participants 439,366 284,344 440,637 846,052 129,477 11,780,193
Loans written 223,318 20,212 128,046 62,330 (2,381,598) -
Administrative fee 2,955 360 1,491 15 - 13,638
Interest expense - - - - - 13,346,487
- ------------------------------------------------------------------------------------------------------------------------------------
Total deductions 665,639 304,916 570,174 908,397 (2,252,121) 25,140,318
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase/(decrease) prior to interfund transfers 851,673 2,910,521 455,393 1,890,503 554,922 139,271,108
Interfund transfers 1,403,540 531,877 (105,601) 1,486,195 - 2,300
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase / (decrease) 2,255,213 3,442,398 349,792 3,376,698 554,922 139,273,408
Net assets available for benefits:
Beginning of year 12,501,203 1,138,786 7,930,358 5,277,244 6,521,305 287,614,982
- ------------------------------------------------------------------------------------------------------------------------------------
End of year $14,756,416 $4,581,184 $8,280,150 $8,653,942 $7,076,227 $426,888,390
====================================================================================================================================
See Notes to Financial Statements
7a
</TABLE>
<PAGE>
EMPLOYEE SAVINGS AND STOCK OWNERSHIP PLAN OF
GENERAL RE CORPORATION AND ITS DOMESTIC SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
1. Description of Plan
The following description of the Employee Savings and Stock Ownership Plan
of General Re Corporation and Its domestic subsidiaries (the "Plan")
provides only general information. Participants should refer to the Plan
agreement for a more complete description of the Plan's provisions.
General - The Plan is a defined contribution plan covering employees of
General Re Corporation and Its Domestic Subsidiaries (the "Company") who
complete a twelve-month period of not less than one thousand hours of
service ("Company Service"). The Plan allows employees of the Company to
make after tax contributions as well as tax deferred contributions to the
Plan as permitted under Internal Revenue Code Section 401(k). In addition,
the Company contributes an amount (the "Company match") related to the
amount of employee investment. The Plan is subject to the provisions of the
Employee Retirement Income Security Act of 1974 ("ERISA").
Employee Stock Ownership Plan - In July 1989, the Company established a
leveraged Employee Stock Ownership Plan ("ESOP") which is designed to
comply with Section 4975(a)(7) and the regulations thereunder of the
Internal Revenue Code of 1986, as amended (the "Code") and is subject to
the applicable provisions of ERISA, as amended. The Plan entered into a
$150,000,000 term loan agreement with the Plan sponsor, General Re
Corporation. The agreement provides for the loan to be repaid to the
Company by 2014. The loan bears interest at 9.25%. Both the principal and
interest payments on the loan are due annually. The proceeds of this
borrowing were used by the ESOP to purchase 1,754,386 shares of 7-1/4%
cumulative convertible preferred stock (Preferred Stock) of General Re
Corporation. All Preferred Stock outstanding is held by the ESOP and is
convertible into common stock on a one-for-one basis. Preferred Stock must
be converted or redeemed into common stock or cash upon the participant's
withdrawal from the Plan.
The Preferred Stock is held by the ESOP trustee as collateral for the loan
from the Company. The Company is obligated to make contributions in cash to
the ESOP which, together with the dividend on the Preferred Stock, equal
the amount necessary to enable the plan to make its regularly scheduled
payments of principal and interest due on its term loan. As interest and
principal are repaid, a portion of the Preferred Stock is allocated to
participating employees. At a minimum, principal and interest payments are
sufficient to provide for allocation of Preferred Stock to meet the
requirements for the Company match under the Plan.
The borrowing is collateralized by the unallocated shares of stock and is
8
<PAGE>
EMPLOYEE SAVINGS AND STOCK OWNERSHIP PLAN OF
GENERAL RE CORPORATION AND ITS DOMESTIC SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS (continued)
guaranteed by the Company. The lender has no rights against shares once
they are allocated under the ESOP. Accordingly, the financial statements of
the Plan for the years 1997 and 1996 present separately the assets and
changes therein pertaining to:
(a) the accounts of employees with vested rights in allocated stock
(Allocated) and (b) stock not yet allocated to employees
(Unallocated).
During 1997, the Plan received a dividend on the Preferred Stock of
$10,541,433 and a Company contribution of $4,804,628. The Plan paid
$13,346,487 in interest expense. In 1997 and 1996, shares allocated to
employees were 50,336 and 50,697, respectively, net of retired shares of
11,676 and 12,129, respectively. There were 1,254,293 and 1,316,452 shares
of unallocated Preferred Stock at December 31, 1997 and 1996, respectively.
The current balance of the loan payment to the Company is $142,286,776. The
fair value of the loan payable is estimated using discounted cash flow
analyses, based on the Corporation's current incremental borrowing rates
for similar types of arrangements and was $182,675,589 at December 31,
1997. The scheduled amortization of the loan for the next five years and
thereafter is as follows:
1998 $ 1,652,058
1999 $ 1,852,693
2000 $ 2,069,445
2001 $ 2,305,497
2002 & thereafter $ 134,407,083
Contributions - Participants may contribute a maximum of 16% of their base
salary and allocate their investment among any of the Plan's funds.
However, the Internal Revenue Code limitation on employee salary deferral
(401(k)) contributions during 1997 was $9,500. The Company match is 100% of
an employee's contribution up to 6% of the employee's basic salary. In
January 1997, each participant received an additional employer contribution
of four preferred shares which was approved by the Trustees of the Plan.
Participant Accounts - Each participant's account is credited with the
participant's contribution and an allocation of the Company match, Plan
earnings and forfeitures of terminated participants' earnings or account
balances, as defined. Forfeitures, which are included in transfers from
other funds were $143,858 during 1997. The benefit to which a participant
is entitled is the benefit that can be provided from the participant's
vested account. Participant accounts are valued on the last business day of
each calendar quarter.
Vesting - All employee contributions become vested immediately. By
government restriction, an employee is not allowed to withdraw Company
match amounts that have not been in his/her account for at least two years.
While actively employed, an employee
9
<PAGE>
EMPLOYEE SAVINGS AND STOCK OWNERSHIP PLAN OF
GENERAL RE CORPORATION AND ITS DOMESTIC SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS (continued)
becomes 50%, 75%, and 100% vested in the value of the Company match after
2, 3 and 4 years, respectively, of Company service.
Transfers - With the exception of the Fidelity Managed Income Portfolio
which may be changed on a monthly basis, participants are permitted to
change the investment of their interests in any of the funds on a daily
basis subject to certain limits.
Loans - The Plan allows participants to borrow from the "before tax" and
"rollover" portions of their respective accounts. Loans may not exceed the
lesser of one half of the participant's vested account balance or $50,000.
Nonresidence loans are written for periods of 6 to 54 months. The Plan also
allows loans granted for purchases of principal residences to be repaid
over a 30-year period. A fixed interest rate of the prime rate plus one
percent calculated at the inception of the loan is charged over the life of
the loan. The interest rates ranged from 8.5% to 9.5% for 1997 and were
9.25% to 9.75% for 1996. Interest and principal repayments are credited
directly to the borrower's respective account and are repaid in monthly
installments by payroll deductions. Loan balances outstanding are reflected
as assets of the Plan. Market valuations are not readily determinable for
participant loans due to the multitude of interest rates and terms of the
various loans.
2. Investment Funds of the Plan
The Plan has an agreement with Fidelity Management Trust Company to perform
record keeping and investment management functions for the Plan. Certain
members of the Company's Board of Directors are also trustees of the
Fidelity Group of Mutual Funds.
A description of the investment funds of the Plan, as set forth in each
Fund's prospectus, at December 31, 1997 is as follows:
o General Re Corporation Unitized Stock Fund
The General Re Corporation Unitized Stock Fund is a growth fund. The
Fund seeks substantial long-term growth of capital by investing
exclusively in General Re Corporation common stock. Participants have
full voting rights for the shares of General Re Corporation common
stock in their accounts.
o Founders Balanced Fund
The Founders Balanced Fund is a growth and income fund. The Fund
focuses on common stocks with the potential for capital growth as well
as increased dividends. It invests in a broad variety of dividend
paying common stocks, both domestic and abroad, U.S. and foreign
government obligations and a variety of corporate bonds.
10
<PAGE>
EMPLOYEE SAVINGS AND STOCK OWNERSHIP PLAN OF
GENERAL RE CORPORATION AND ITS DOMESTIC SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS (continued)
o PIMCO Global Bond Fund
The PIMCO Global Bond Fund invests between 25% and 75% of its assets in
foreign bonds with the remainder invested in U.S. bonds. Investments in
bonds of emerging markets are also allowed but are limited by a 10%
maximum allocation to below investment grade securities. The Fund's
objective is to provide high total return that exceeds the aggregate of
major world bond markets.
o PIMCO High Yield Fund
The PIMCO High Yield Fund is an income fund. The Fund invests in
primarily U.S. dollar denominated bonds of domestic and foreign issuers
rated below investment grade but at least at B. It focuses its
investments on the relatively higher quality securities within the junk
bond ratings.
o Templeton Developing Markets Trust
The Templeton Developing Markets Trust is a growth-fund. The Trust
invests primarily in common stocks of companies in developing markets
and focuses on those developing market countries in which it believes
the economies are developing strongly.
o Janus Worldwide Fund
The Janus Worldwide Fund is a growth fund. The Fund invests primarily
in common stocks of foreign and domestic companies. It has the
flexibility to invest on a worldwide basis, in companies and
organizations of any size. The Fund normally invests in issuers from at
least five different countries.
.
o Fidelity Magellan Fund
The Fidelity Magellan Fund is an aggressive growth fund. The Fund seeks
long-term capital appreciation by investing in the stocks of both
well-known and lesser-known companies with above-average growth
potential and a correspondingly higher level of risk.
11
<PAGE>
EMPLOYEE SAVINGS AND STOCK OWNERSHIP PLAN OF
GENERAL RE CORPORATION AND ITS DOMESTIC SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS (continued)
o Fidelity Equity-Income Fund
The Fidelity Equity-Income Fund is a growth and income fund. The Fund
seeks a yield that exceeds the composite yield of the Standard & Poor's
500 Index, and considers the potential for capital appreciation when
selecting fund investments. The Fund invests primarily in common stocks
but can also invest in bonds and convertible securities. Dividend
amounts will vary depending on the yields of the securities held in the
portfolio.
o Fidelity Growth Company Fund
The Fidelity Growth Company Fund is a growth fund. It seeks long-term
capital appreciation by investing primarily in common stocks and
securities convertible into common stocks. It may invest in companies
of any size with above-average growth potential or companies that
appear undervalued relative to their potential return.
o Fidelity Investment Grade Bond Fund
The Fidelity Investment Grade Bond Fund (previously, the Flexible Bond
Portfolio) is an income fund. It seeks a high rate of current income
consistent with reasonable risk. It invests in a broad range of fixed
income securities. The Fund also seeks to protect investors' capital as
well as take advantage of opportunities to realize capital
appreciation, where appropriate.
o Fidelity Intermediate Bond Fund
The Fidelity Intermediate Bond Fund is an income fund. The Fund seeks a
high level of current income. The Fund invests in high and upper-medium
grade corporate bonds rated A or better with intermediate maturities,
mortgage securities, bank obligations, and U.S. Government and agency
securities. The Fund's average portfolio maturity ranges between three
and ten years.
o Fidelity Overseas Fund
The Fidelity Overseas Fund is an aggressive growth fund. The Fund seeks
growth of capital over the long term. The Fund invests primarily in
foreign securities, including common stock and securities convertible
into common stock, as well as debt instruments.
12
<PAGE>
EMPLOYEE SAVINGS AND STOCK OWNERSHIP PLAN OF
GENERAL RE CORPORATION AND ITS DOMESTIC SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS (continued)
o Fidelity Real Estate Fund
The Fidelity Real Estate Fund seeks to provide an above average level
of income, capital growth over time and a yield that exceeds that of
the S&P 500. The Fund invests primarily in stocks of domestic and
foreign companies in the real estate industry. As a result, its
investments are sensitive to conditions in real estate values, property
taxes, overbuilding and interest rates.
o Fidelity Balanced Fund
The Fidelity Balanced Fund is a growth and income fund. It seeks the
highest amount of income possible while preserving principal by
investing in investment grade or higher bonds and high-yielding
securities.
o Fidelity Asset Manager Fund
The Fidelity Asset Manager Fund seeks high total return with reduced
risk over the long-term. Its assets are allocated among and across
domestic and foreign equities, bonds and short-term instruments. The
Fund's assets are gradually shifted to take advantage of the outlook
for market conditions.
o Fidelity Asset Manager: Growth Fund
The Fidelity Asset Manager: Growth Fund seeks to maximize total return
over the long-term by allocating its assets among stocks, bonds,
short-term instruments and other investments. The Fund allocates its
assets among three principal asset classes: stocks, bonds, and
short-term instruments. It may invest in many types of domestic and
foreign securities.
The flexible approach to diversification allows the Fund to take
advantage of a wide variety of investment options in pursuit of high
total return but with reduced risk from allocating its investments
among the asset classes.
o Fidelity Emerging Markets Fund
The Fidelity Emerging Markets Fund is an international growth fund. The
Fund invests primarily in stocks of small and medium sized developing
companies with the potential to grow rapidly in earnings or revenues.
13
<PAGE>
EMPLOYEE SAVINGS AND STOCK OWNERSHIP PLAN OF
GENERAL RE CORPORATION AND ITS DOMESTIC SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS (continued)
o Fidelity Asset Manager: Income Fund
The Fidelity Asset Manager: Income Fund seeks a high level of current
income by maintaining a diversified portfolio of stocks, bonds,
short-term instruments, and other investments. The Fund emphasizes
investment in bonds and short-term instruments for income and price
stability, but allows some investment in stocks for their potential to
grow and keep pace with inflation. The asset mix is designed to provide
a relatively conservative asset allocation across various market
conditions.
o Fidelity Small Cap Selector Fund
The Fidelity Small Cap Selector Fund seeks long-term capital
appreciation. Using proprietary computer models and fundamental
research, the Fund invests in all types of equity securities issued by
companies with small market capitalizations. These companies may
include start-ups with good potential, firms that have recently gone
public, or companies that operate in small industries or regional
markets. The Fund may also invest a portion of its assets in stock
issued by companies with larger market capitalizations.
o Fidelity Retirement Money Market Portfolio
The Fidelity Retirement Money Market Portfolio is a money market fund.
The Portfolio seeks as high a level of current income as is consistent
with the preservation of capital and liquidity. It invests in
high-quality, U.S. dollar-denominated money market instruments of
U.S. and foreign issuers. The Portfolio's objective is to be a
conservative, low-risk investment.
o Fidelity Retirement Government Money Market Portfolio
The Fidelity Retirement Government Money Market Portfolio is a money
market fund. It seeks as high a level of current income as is
consistent with the preservation of principal and liquidity. It invests
in obligations issued or guaranteed as to principal and interest by the
U.S. Government, its agencies or instrumentalities, and in repurchase
agreements secured by these obligations. The Portfolio's objective is
to be a conservative, relatively low-risk investment.
o Fidelity Managed Income Portfolio
The Fidelity Managed Income Portfolio (previously, the GIC Open-End
Portfolio) seeks preservation of capital and a competitive level of
income over time. The Portfolio
14
<PAGE>
EMPLOYEE SAVINGS AND STOCK OWNERSHIP PLAN OF
GENERAL RE CORPORATION AND ITS DOMESTIC SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS (continued)
purchases high-quality, short and long-term investment contracts
(GICs), bank investment contracts, short-term money market instruments,
and "synthetic" GICs (debt obligations issued by one institution and
insured by another as to payment of interest and return of principal at
maturity). While the Company has not expressed any intention to do so,
termination prior to maturity of the GICs would result in certain
penalties. The participants are exposed to credit loss in the event of
nonperformance by the companies with whom the guaranteed insurance
contracts are placed. However, the plan administrator does not
anticipate nonperformance by these companies.
o Spartan U.S. Equity Index Fund
The Spartan U.S. Equity Index Fund is a growth and income fund. It
seeks investment results that correspond to the total return
performance of the S&P 500 Index, which is comprised of common stocks.
The number of employees participating in each fund of the Plan at
December 31, 1997 and 1996 are as follows:
1997 1996
General Re Corporation Preferred Stock 2,307 2,118
General Re Corporation Unitized Stock Fund 1,185 1,202
Founders Balanced Fund 185 55
PIMCO Global Bond Fund 19 11
PIMCO High Yield Fund 55 18
Templeton Developing Markets Trust 170 45
Janus Worldwide Fund 567 203
Fidelity Magellan Fund 1,313 1,322
Fidelity Equity-Income Fund 1,231 1,034
Fidelity Growth Company Fund 815 709
Fidelity Investment Grade Bond Fund 201 169
Fidelity Intermediate Bond Fund 616 634
Fidelity Overseas Fund 653 686
Fidelity Real Estate Fund 168 35
Fidelity Balanced Fund 265 244
Fidelity Asset Manager Fund 149 104
Fidelity Asset Manager: Growth Fund 246 164
Fidelity Emerging Markets Fund 59 18
Fidelity Asset Manager: Income Fund 72 45
Fidelity Small Cap Selector Fund 397 269
Fidelity Retirement Money Market Portfolio 974 976
Fidelity Retirement Government Money Market Portfolio 203 93
Fidelity Managed Income Portfolio 507 518
Spartan US Equity Index Fund 486 298
15
<PAGE>
EMPLOYEE SAVINGS AND STOCK OWNERSHIP PLAN OF
GENERAL RE CORPORATION AND ITS DOMESTIC SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS (continued)
3. Summary of Significant Accounting Policies
The preparation of financial statements requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amount of change in net assets
available for plan benefits during the reporting period. Actual results
could differ from those estimates. The following summarizes the Plan's
significant accounting policies:
Investments - Investments in mutual, money market and common collective
trust shares are valued based on reported net asset values. Investments in
GICs are reported at contract value. Investments in stocks traded on a
national securities exchange are valued at the last reported sales price on
the last business day of the year. The financial statements include
securities valued at $363,475,384 and $273,049,491 at December 31, 1997 and
1996, respectively, (64% and 63% of total assets of the Plan, respectively)
whose values have been estimated by the trustees of the Plan in the absence
of readily ascertainable market values. Because of the inherent uncertainty
of valuation, those estimated values may differ significantly from the
values that would have been used had a ready market for the securities
existed, and the differences could be material. It is at least reasonably
possible that a change in the estimate will occur in the near term that may
have a material effect on the financial statements.
The Plan presents in the statement of changes in net assets the net
appreciation in the fair value of its investments which consists of the
realized gains or losses and the unrealized appreciation on those
investments.
Purchases and sales of investments are recorded as of the trade date.
Interest income is recorded as earned on the accrual basis. Dividend income
is recorded on the ex-dividend date.
Participant loans are carried at unpaid principal. Interest income on the
loans is recorded as earned on an accrual basis.
Contributions - Contributions from the employees and the employer are
recorded in the period in which the payroll deductions are made from Plan
participants' paychecks.
Employer contributions to the General Re Corporation Preferred Stock Fund
are made in shares of Preferred Stock.
16
<PAGE>
EMPLOYEE SAVINGS AND STOCK OWNERSHIP PLAN OF
GENERAL RE CORPORATION AND ITS DOMESTIC SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS (continued)
Expenses - The management and service fees of the Fidelity Group of Mutual
Funds are charged to operations of the respective funds. Certain
administrative expenses, primarily consulting and auditing fees, are paid
by the Company.
4. Investments
Investments held by the Plan at December 31, 1997 and 1996 are summarized
as follows:
<TABLE>
<CAPTION>
1997 1996
------------------------------ -----------------------------
<S> <C> <C> <C> <C>
Revalued Fair Revalued Fair
Cost Value Cost Value
Founders Balanced Fund $2,779,506 $2,742,611 $600,812 $590,052
PIMCO Global Bond Fund 63,456 60,474 56,236 55,185
PIMCO High Yield Fund 560,729 577,107 342,459 347,913
Templeton Developing Markets Trust 2,050,682 1,638,280 558,132 568,709
Janus Worldwide Fund 7,967,879 8,189,124 2,872,035 2,785,185
Fidelity Magellan Fund 26,917,703 35,380,845 26,473,166 30,860,025
Fidelity Equity Income Fund 23,736,789 34,711,812 18,533,585 24,782,210
Fidelity Growth Company Fund 11,779,210 13,856,560 9,597,662 11,421,815
Fidelity Investment Grade Bond Fund 1,753,319 1,766,271 1,168,813 1,144,566
Fidelity Intermediate Bond Fund 10,175,540 10,155,539 9,976,802 9,852,933
Fidelity Overseas Fund 5,793,052 6,622,703 7,042,937 7,848,523
Fidelity Real Estate Fund 1,656,835 1,836,165 310,617 354,756
Fidelity Balanced Fund 2,205,532 2,434,320 1,756,797 1,888,213
Fidelity Asset Manager Fund 1,627,129 1,830,884 1,316,876 1,401,557
Fidelity Asset Manager: Growth Fund 2,870,162 3,163,938 1,648,805 1,782,166
Fidelity Emerging Markets Fund 204,002 130,434 109,648 107,617
Fidelity Asset Manager: Income Fund 322,151 334,106 172,096 174,841
Fidelity Small Cap Selector Fund 4,955,074 5,474,886 2,633,134 2,862,463
Fidelity Retirement Money
Market Portfolio 14,756,416 14,756,416 12,501,203 12,501,203
Fidelity Retirement Government
Money Market Portfolio 4,581,184 4,581,184 1,138,786 1,138,786
Fidelity Managed Income Portfolio 8,280,150 8,280,150* 7,930,358 7,930,358*
Spartan U.S. Equity Index Fund 6,263,805 8,653,942 4,318,280 5,277,244
General Re Corporation Preferred Stock 145,369,751 363,475,384 146,368,049 273,049,491
General Re Corporation Unitized Stock Fund 16,265,626 31,445,804 17,469,695 26,654,213
------------- ------------- ------------- -------------
Total $302,935,682 $562,098,939 $274,896,983 $425,380,024
============ ============ ============ ============
* The Fidelity Managed Income Portfolio includes GICs which are reported at
contract value rather than fair value.
(See Note 3.)
</TABLE>
17
<PAGE>
EMPLOYEE SAVINGS AND STOCK OWNERSHIP PLAN OF
GENERAL RE CORPORATION AND ITS DOMESTIC SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS (continued)
The cost basis of nonresidence participant loans was $3,240,117 and
$3,038,329 at December 31, 1997 and 1996, respectively, and the cost basis
of participant loans for the purchase of a principal residence was
$3,836,110 and $3,482,976 at December 31, 1997 and 1996, respectively.
During 1997, the Plan's investments (including investments bought, sold and
held during the year) appreciated in value by $116,406,270 as follows:
Net Change in Fair Value
Year Ended
Investments at Fair Value December 31, 1997
------------------------- -----------------
Founders Balanced Fund ($19,977)
PIMCO Global Bond Fund (4,792)
PIMCO High Yield Fund 19,374
Templeton Developing Markets Trust (468,150)
Janus Worldwide Fund 434,970
Fidelity Magellan Fund 5,275,937
Fidelity Equity Income Fund 5,777,868
Fidelity Growth Company Fund 814,099
Fidelity Investment Grade Bond Fund 32,594
Fidelity Intermediate Bond Fund 90,037
Fidelity Overseas Fund 456,629
Fidelity Real Estate Fund 159,995
Fidelity Balanced Fund 140,130
Fidelity Asset Manager Fund 158,227
Fidelity Asset Manager: Growth Fund 226,104
Fidelity Emerging Markets Fund (81,131)
Fidelity Asset Manager: Income Fund 10,050
Fidelity Small Cap Selector Fund 478,936
Fidelity Retirement Money
Market Portfolio 0
Fidelity Retirement Government
Money Market Portfolio 0
Fidelity Managed Income Portfolio* 0
Spartan U.S. Equity Index Fund 1,792,643
General Re Corporation Unitized Stock Fund 8,533,888
Investments at Estimated Fair Value
General Re Corporation Preferred Stock 92,578,839
Total $116,406,270
* The Fidelity Managed Income Portfolio includes GICs which are reported at
contract value rather than fair value.(See Note 3.)
18
<PAGE>
EMPLOYEE SAVINGS AND STOCK OWNERSHIP PLAN OF
GENERAL RE CORPORATION AND ITS DOMESTIC SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS (continued)
Realized gains from securities transactions were $7,783,223 during 1997. At
December 31, 1997 and December 31, 1996, the Fidelity Magellan Fund,
Fidelity Equity Income Fund, General Re Corporation Preferred Stock and
General Re Corporation Unitized Stock Fund, each exceeded 5% of the net
assets available for plan benefits.
5. Plan Termination
The Company intends to continue the Plan indefinitely but reserves the
right to suspend contributions temporarily or to amend or terminate the
Plan. If the Plan were to be terminated, all members would become fully
vested, and all the Plan assets would be used solely to provide the
benefits payable to employees and their beneficiaries.
6. Tax Status
The Plan obtained its latest determination letter on April 28, 1995, in
which the Internal Revenue Service stated that the Plan, as then designed,
was in compliance with applicable requirements of the Internal Revenue
Code. The determination letter is subject to the Plan's adoption of the
proposed amendments submitted to the Internal Revenue Service in letters
dated March 21, 1995 and April 17, 1995, which were adopted in 1995. The
Plan has been amended since receiving the determination letter. However,
there were no amendments during 1997.
The Plan administrator and the Plan's tax counsel believe that the Plan is
currently designed and being operated in compliance with the applicable
requirements of the Internal Revenue Code. Therefore, no provision for
income taxes has been included in the Plan's financial statements.
7. National Reinsurance Corporation Transfers
In September 1997, approximately $9.3 million was transferred from the
former National Reinsurance Corporation ("National Re") 401(K) Savings Plan
into the Plan. The accounts of the former National Re employees were
initially allocated to Plan funds that were similar to those available
under their previous plan. The employees were then allowed to change the
investment of their interest in any of the funds in accordance with the
terms of the Plan. (See Note 2.)
8. Berkshire Hathaway Merger
On June 19, 1998 it was announced that General Re Corporation and Berkshire
Hathaway, Inc. had reached a definitive agreement to merge, subject to
receiving regulatory approvals.
19
<PAGE>
EMPLOYEE SAVINGS AND STOCK OWNERSHIP PLAN OF
GENERAL RE CORPORATION AND ITS DOMESTIC SUBSIDIARIES
SUPPLEMENTAL SCHEDULE
LINE 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
at December 31, 1997
Number of Historical Current
Shares Description Cost Value
(1)
Mutual Funds
241,640 Founders Balanced Fund $2,742,611
6,273 PIMCO Global Bond Fund 60,474
50,009 PIMCO High Yield Fund 577,107
126,606 Templeton Developing Markets Trust 1,638,280
216,758 Janus Worldwide Fund 8,189,124
371,374 Fidelity Magellan Fund 35,380,845
662,313 Fidelity Equity Income Fund 34,711,812
319,865 Fidelity Growth Company Fund 13,856,560
242,620 Fidelity Investment Grade Bond Portfolio 1,766,271
998,578 Fidelity Intermediate Bond Fund 10,155,539
203,525 Fidelity Overseas Fund 6,622,703
89,788 Fidelity Real Estate Fund 1,836,165
159,418 Fidelity Balanced Fund 2,434,320
247,397 Spartan U.S. Equity Index Fund 8,653,942
99,776 Fidelity Asset Manager Fund 1,830,884
171,209 Fidelity Asset Manager: Growth Fund 3,163,938
13,587 Fidelity Emerging Markets Fund 130,434
27,431 Fidelity Asset Manager: Income Fund 334,106
343,684 Fidelity Small Cap Selector Fund 5,474,886
Money Market Funds
14,756,416 Fidelity Retirement Money 14,756,416
Market Portfolio
4,581,184 Fidelity Retirement Government 4,581,184
Money Market Portfolio
Common/Collective Trusts
8,280,150 Fidelity Managed Income Portfolio 8,280,150
Preferred Stocks
1,700,231 General Re Corporation 363,475,384
Common Stocks
2,117,345 General Re Corporation Unitized Stock Fund 30,993,976
Interest-bearing Cash 451,828
Participant Loans
Residence, at cost 3,836,110
Nonresidence, at cost 3,240,117
Total $569,175,166
(1) The record keeper has informed the Plan's management that it is not
possible for the record keeper to provide historical cost.
The accompanying notes are an integral part of the supplemental schedule.
20
