SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 28, 1995
AMERICAN PREMIER UNDERWRITERS, INC.
(Exact name of registrant as specified in charter)
Pennsylvania 1-1569 23-6000765
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
One East Fourth Street, Cincinnati, Ohio 45202
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (513) 579-6600
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Item 5. Other Events.
Registrant is making this filing in order that the
information contained herein will be incorporated by reference into
Registrant's Proxy Statement/Prospectus dated February 17, 1995 for
the Special Meeting of Shareholders of Registrant to be held on March
23, 1995 to consider and act upon the proposal that the Registrant
acquire all of the outstanding common stock of American Financial
Corporation ("AFC") pursuant to the Agreement and Plan of Acquisition
and Reorganization, as amended, filed as Exhibit 2 hereto. The
information contained herein should be read in conjunction with such
Proxy Statement/Prospectus.
------------------------------
The following summary of consolidated underwriting results
of Great American Insurance Company ("GAI") and its subsidiaries was
derived from the Annual Statements filed by GAI and such subsidiaries
with the insurance departments of their respective states of domicile
on or about March 1, 1995. GAI is a wholly owned subsidiary of AFC.
GAI and Subsidiaries
--------------------
(Statutory basis)
Year ended December 31,
---------------------------
(Dollars in millions, except ratios) 1994 1993
- ------------------------------------ ------------ ------------
Premiums written $1,481.9 $1,287.3
Premiums earned $1,376.3 $1,242.5
Underwriting loss* $ (82.9) $ (62.9)
Combined ratio data*
Loss ratio 58.1% 58.7%
Loss adjustment expense ratio 14.1% 12.1%
Underwriting expense ratio 30.9% 33.1%
Policyholder dividend ratio .6% -
Combined ratio after dividends 103.7% 103.9%
* 1994 ratio data does not reflect a third quarter charge of $26
million recorded by GAI in response to the California Supreme
Court's third quarter 1994 decision upholding Proposition 103,
an insurance reform measure passed by California voters in 1988
pursuant to which the California Insurance Commissioner mandated
rate rollbacks for most lines of property and casualty insurance.
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The consolidated financial results of American Annuity
Group, Inc. ("AAG") and its subsidiaries were reported by AAG in its
press release issued February 28, 1995, which is filed as Exhibit 99.1
hereto and incorporated by reference herein. AAG is an 80%-owned
subsidiary of AFC.
------------------------------
The consolidated financial results of Citicasters Inc.
("Citicasters") and its subsidiaries were reported by Citicasters in
its press release issued March 2, 1995, which is filed as Exhibit 99.2
hereto and incorporated by reference herein. AFC owns 37.5% of the
outstanding common stock of Citicasters, and this investment is
accounted for by AFC by the equity method of accounting.
Item 7. Financial Statements, Pro Forma Financial Information
-----------------------------------------------------
and Exhibits
------------
(c) Exhibits:
Exhibit Number
(Referenced to
Item 601 of
Regulation S-K)
2 Agreement and Plan of Acquisition and Reorganization
by and among American Premier Group, Inc., the
Registrant, American Premier Sub, Inc., American
Financial Corporation and AFC Sub, Inc. dated as
of December 9, 1994, as amended, incorporated by
reference to Exhibit 2 to the Registration Statement
on Form S-4 No. 33-56813 (effective February 17, 1995)
of American Premier Group, Inc.
99.1 Press release of American Annuity Group, Inc. dated
February 28, 1995.
99.2 Press release of Citicasters Inc. dated March 2, 1995.
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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 author-
ized.
AMERICAN PREMIER UNDERWRITERS, INC.
Date: March 3, 1995 By: Robert W. Olson
-----------------------------
Robert W. Olson
Senior Vice President,
General Counsel and Secretary
EXHIBIT 99.1
----------------
AMERICAN ANNUITY GROUP, INC.
FOR IMMEDIATE RELEASE
- ---------------------
For: American Annuity Group, Inc. Contact: S. Craig Lindner
250 E. Fifth Street President, AAG
Cincinnati, OH 45202 513-579-2529
AMERICAN ANNUITY GROUP'S
1994 NET OPERATING EARNINGS INCREASE 17% FROM 1993
- -----------------------------------------------------------------
CINCINNATI, OH, February 28, 1995 - American Annuity Group, Inc.
(NYSE:AAG) today announced that its net operating earnings for
1994 were $41.0 million ($1.05/share), up 17% from the comparable
1993 figure of $35.1 million ($.90/share). Increases in interest
margins and the growth in invested assets contributed to the
improvement. AAG's return on common equity exceeded 19% for 1994
and 1993. AAG's return is based on net operating earnings and
excludes the adjustments to common equity for unrealized gains
(losses) on marketable securities that results from applying
Financial Accounting Standard No. 115. For the fourth quarter of
1994, net operating earnings of $10.2 million ($.26/share) were
unchanged from the comparable period in 1993. Net operating
earnings exclude realized investment gains (losses) and
nonrecurring charges.
Net income, consisting of operating earnings, realized investment
gains (losses) and nonrecurring items, was $36.1 million
($.92/share) for 1994 compared to $40.0 million ($1.04/share) for
1993. Net income for the fourth quarter of 1994 was $9.7 million
($.25/share) compared to $4.8 million ($.11/share) for the fourth
quarter of 1993. Further details are given in the accompanying
condensed statement of income.
OPERATIONS
- ----------
Revenues from operations increased 6% for both the fourth quarter
and full year of 1994 over the comparable 1993 periods. This
improvement is attributable primarily to investment income, which
increased principally as a result of AAG's growing investment
base. Total assets topped the $5.0 billion mark during the
fourth quarter of 1994; average invested assets were $4.8 billion
in 1994 compared to $4.5 billion in 1993. AAG has an extremely
high quality investment portfolio, with 94% of its bonds rated
investment grade. Investments in real estate and mortgage loans
represent less than 2% of total assets.
Great American Life Insurance Company's ("GALIC") annuity
premiums increased 23% during the fourth quarter of 1994 compared
to the same period in 1993 and increased 10.6% in the full year
of 1994 over 1993. The respective increases are due to strong
growth in sales of single premium products. Robert A. Adams,
Chairman and President of GALIC, commented, "The strong premium
production in the fourth quarter of 1994 reinforces our
expectation of excellent premium growth in 1995."
CAPITAL TRANSACTIONS
- --------------------
During 1994, AAG repurchased a total of $56.0 million principal
amount of its 9-1/2% Senior Notes (including $15 million in the
fourth quarter) and $21.1 million principal amount of its 11-1/8%
Senior Subordinated Notes, utilizing available cash, borrowing
$30 million under its revolving credit agreement, and issuing
approximately 810,000 shares of Common Stock. AAG also acquired
all 450,000 shares of its Series A Preferred Stock in exchange
for 3.2 million shares of Common Stock. As a result of these
1994 transactions, AAG's preferred dividends and consolidated
interest payments have been reduced by over $8.6 million
annually.
To provide additional financial flexibility, AAG increased its
borrowing capacity under its revolving credit agreement from $30
million to $50 million in December 1994.
----------------------------
American Annuity Group sells individual and group annuities
nationwide to the savings and retirement markets through its
wholly-owned subsidiaries, Great American Life Insurance Company,
Lifestyle Financial Investments, Inc. and T'N'T Marketing, Inc.
Great American Life Insurance Company is licensed in 49 states,
the District of Columbia and the Virgin Islands.
American Financial Corporation owns 80% of AAG's outstanding
Common Stock.
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<TABLE>
<CAPTION>
AMERICAN ANNUITY GROUP, INC.
Condensed Statement of Income
(In Millions, Except Per Share Amounts)
Three months ended Twelve months ended
December 31, December 31,
1994 1993 1994 1993
------------------- -------------------
<S> <C> <C> <C> <C>
Revenues $93.3 $87.7 $371.3 $351.7
Benefits and expenses:
Benefits to annuity
policyholders 61.2 54.9 241.9 228.6
Interest and other
debt expenses 4.7 6.1 21.4 22.6
Other expenses 11.7 11.6 44.7 48.0
----- ----- ------ ------
Total benefits
and expenses 77.6 72.6 308.0 299.2
----- ----- ------ ------
Operating earnings 15.7 15.1 63.3 52.5
Income tax expense 5.5 4.9 22.3 17.4
----- ----- ------ ------
Net Operating Earnings 10.2 10.2 41.0 35.1
Non-operating items,
after tax:
Realized investment
gains (losses) (0.6) 4.2 (0.1) 23.1
Relocation expense - - - (5.2)
Discontinued
operations(1) - (9.6) (2.6) (9.6)
Extraordinary gain
(loss) on retirement
of debt 0.1 - (1.7) (3.4)
Cumulative effect of
accounting change (2) - - (0.5) -
----- ------ ------ ------
NET INCOME $ 9.7 $ 4.8 $ 36.1 $ 40.0
----- ------ ------ ------
----- ------ ------ ------
Less preferred dividend
requirement (3) - $ 0.9 $ 0.9 $ 3.6
Net Income Applicable
to Common Stock $ 9.7 $ 3.9 $ 35.2 $ 36.4
----- ------ ------ ------
----- ------ ------ ------
Average common shares
outstanding 39.1 35.1 38.1 35.1
Earnings Per Share Data:
Net operating
earnings $0.26 $0.26 $1.05 $0.90
Realized investment
gains (losses) (0.01) 0.12 - 0.66
Relocation expense - - - (0.15)
Discontinued
operations (1) - (0.27) (0.07) (0.27)
Extraordinary gain
(loss) on retirement
of debt - - (0.05) (0.10)
Cumulative effect of
accounting change (2) - - (0.01) -
----- ------- ------- -------
Net income per
common share $0.25 $0.11 $0.92 $1.04
----- ------- ------- -------
----- ------- ------- -------
- ------------------------
(1) Discontinued operations in 1994 reflects primarily additional
reserves for potential environmental liabilities related to AAG's
former manufacturing operations. In 1993, the loss relates
primarily to a reduction in the discount rate used to value
future pension obligations and other estimated expenses for the
former manufacturing units.
(2) Cumulative effect of accounting change reflects adoption of
Statement of Financial Accounting Standards No. 112, "Employers'
Accounting for Postemployment Benefits".
(3) On March 31, 1994, AAG retired all of its preferred stock in
exchange for 3.2 million common shares.
</TABLE>
EXHIBIT 99.2
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CITICASTERS NEWS RELEASE
- ----------------------------------------------------------------
Date: March 2, 1995 Contact: Gregory C. Thomas
For Release: Immediately Telephone:(513) 562-8007
CITICASTERS ANNOUNCES FOURTH QUARTER AND YEAR END RESULTS
Citicasters Inc. today reported financial results for the
fourth quarter and year ended December 31, 1994. Operating results
for the two television stations and the radio group once again
showed dramatic improvement over comparable periods of 1993.
Operating cash flow increased 57% in the fourth quarter to $15.4
million and 27% for the year to $43.6 million.
Consolidated results for 1994 are not comparable to the
results of 1993 because of several non-recurring transactions
including: the reorganization in 1993, the refinancing in 1994,
and the sale of four television stations in 1994. The results for
1994 and 1993, assuming that these three non-recurring transactions
had occurred at the end of 1992, are as follows (in millions except
earnings per share):
<TABLE>
<CAPTION>
Fourth Qtr. Year
--------------- ---------------
1994 1993 1994 1993
------ ------- ------ -------
<S> <C> <C> <C> <C>
Net revenue $36.3 $31.5 $128.4 $ 119.6
Operating expenses $20.9 $21.7 $ 84.8 $ 85.2
------ ------ ------ ------
Operating cash flow $15.4 $ 9.8 $ 43.6 $ 34.4
------ ------ ------ ------
------ ------ ------ ------
Operating income $12.3 $ 6.6 $ 30.6 $ 20.1
------ ------ ------ ------
------ ------ ------ ------
Net earnings $ 6.8 $ .8 $ 11.6 $ 4.2
------ ------ ------ ------
------ ------ ------ ------
Earnings per share $0.69 $0.07 $1.05 $ 0.37
------ ------ ------ ------
------ ------ ------ ------
</TABLE>
Net revenues for the two television stations increased 27% in
the quarter and 14% in the year ended December 31, 1994. Radio
group net revenues increased 5% in the quarter and 2% in the year
ended December 31, 1994, despite the inclusion of an additional FM
station in the 1993 results.
Consolidated net earnings in 1994, including the operating
results of the four television stations through the dates of sale
and the gain on the sale, $63.1 million ($5.73 per share).
Approximately $50.1 million ($4.55 per share) of the net earnings
is attributable to the gain on the sale of the television
stations.
The economy and advertising expenditures continue to grow.
Citicasters expects increases in net revenues, operating cash flow
and operating income from the television stations and the radio
group in the first quarter of 1995 compared to the first quarter of
1994 for those same stations.
Citicasters operates 14 radio stations including ten FM and
four AM stations along with two network affiliated television
stations in major markets throughout the country.
Citicasters common stock is quoted on the NASDAQ National
Market System under the symbol CITI.
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<TABLE>
<CAPTION>
CITICASTERS INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(In thousands, except per share amounts)
<S> <C> <C> <C> <C>
Three months Three months Twelve months Twelve months
December 31, December 31, December 31, December 31,
1994 1993 (a) 1994 1993 (a)
------------ ------------ ------------- -------------
Net revenues:
Television broadcasting $ 19,931 $ 39,037 $130,418 $139,576
Radio broadcasting 17,332 16,514 66,625 65,592
-------- -------- -------- --------
37,263 55,551 197,043 205,168
Costs and expenses:
Operating expenses 9,391 17,648 60,682 71,730
Selling, general and
administrative 10,888 15,848 57,036 61,340
Corporate general and
administrative expenses 1,147 976 4,796 3,996
-------- -------- -------- --------
21,426 34,472 122,514 137,066
-------- -------- -------- --------
-------- --------- -------- --------
Operating income before deprecia-
tion and amortization 15,837 21,079 74,529 68,102
Depreciation and amortization 3,154 6,790 22,946 28,119
-------- -------- -------- --------
Operating income 12,683 14,289 51,583 39,983
Other income (expense):
Interest expense (3,967) (13,719) (31,979) (64,942)
Minority interest - (3,073) - (26,776)
Investment income 816 20 1,216 305
Miscellaneous, net 26,214 (2,915) 95,786 (494)
------- -------- ------- --------
23,063 (19,687) 65,023 (91,907)
------- -------- ------- --------
Earnings (loss) before income
taxes 35,746 (5,398) 116,606 (51,924)
Income tax provision 20,900 - 53,500 -
------- -------- ------- --------
Earnings (loss) before
reorganization items 14,846 (5,398) 63,106 (51,924)
Reorganization items - (14,872) - (14,872)
------- -------- ------- --------
Earnings (loss) before
extraordinary items 14,846 (20,270) 63,106 (66,796)
Extraordinary items, net of tax - 414,484 - 408,140
------- -------- ------- --------
NET EARNINGS (LOSS) $14,846 $394,214 $63,106 $341,344
------- -------- ------- --------
------- -------- ------- --------
NET EARNINGS PER SHARE $1.51 (b) $5.73 (b)
Weighted average common shares 9,843 (b) 11,012 (b)
NOTES:
- ------
Certain reclassifications have been made to conform to the current presentation.
(a) As a result of the Company's emergence from bankruptcy and its adoption of fresh-start reporting
as of December 31, 1993, the statements of operations for periods ending after December 31, 1993 will
not be comparable to prior periods presented above. Accordingly, the Company's results for the prior
year have been separated by a line.
(b) Share amounts are not presented due to the effects of the reorganization.
</TABLE>
