SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended September 30, 2000 Commission file number 0-15981
HILB, ROGAL AND HAMILTON COMPANY
--------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Virginia 54-1194795
----------------------------- -------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
P. O. Box 1220, Glen Allen, VA 23060-1220
-------------------------------------------- ------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (804) 747-6500
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
------- ------
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding at October 31, 2000
--------------------------- -------------------------------
Common stock, no par value 13,245,349
<PAGE>
HILB, ROGAL AND HAMILTON COMPANY
INDEX
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Page
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Part I. FINANCIAL INFORMATION
Item 1. Financial Statements
Statement of Consolidated Income
for the three months and nine months
ended September 30, 2000 and 1999 3
Consolidated Balance Sheet,
September 30, 2000 and December
31, 1999 4
Statement of Consolidated Shareholders'
Equity for the nine months ended
September 30, 2000 and 1999 5
Statement of Consolidated Cash Flows
for the nine months ended September
30, 2000 and 1999 6
Notes to Consolidated Financial
Statements 7-10
Item 2. Management's Discussion and Analysis
of Financial Condition and
Results of Operations 11-14
Item 3. Qualitative and Quantitative Disclosures
About Market Risk 14
Part II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 14
2
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
STATEMENT OF CONSOLIDATED INCOME
HILB, ROGAL AND HAMILTON COMPANY AND SUBSIDIARIES
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPT. 30, 2000 SEPT. 30, 1999 SEPT. 30, 2000 SEPT. 30, 1999
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Revenues
Commissions and fees $ 64,643,935 $ 61,374,665 $ 191,379,918 $ 161,450,343
Investment income 744,130 571,809 1,801,202 1,426,323
Other 386,382 1,260,162 1,821,648 5,468,827
-------------- -------------- -------------- --------------
65,774,447 63,206,636 195,002,768 168,345,493
Operating expenses
Compensation and
employee benefits 36,139,046 35,192,027 108,070,188 91,736,458
Other operating expenses 13,650,250 13,284,188 40,450,501 35,185,372
Amortization of
intangibles 3,080,862 2,980,643 9,063,474 7,619,861
Interest expense 2,111,634 2,144,184 6,137,198 4,349,347
Integration charge - - - 1,900,000
-------------- -------------- -------------- --------------
54,981,792 53,601,042 163,721,361 140,791,038
-------------- -------------- -------------- --------------
INCOME BEFORE
INCOME TAXES 10,792,655 9,605,594 31,281,407 27,554,455
Income taxes 4,640,639 3,689,601 13,451,005 11,157,967
-------------- -------------- -------------- --------------
NET INCOME $ 6,152,016 $ 5,915,993 $ 17,830,402 $ 16,396,488
============== ============== ============== ==============
NET INCOME PER
COMMON SHARE:
Basic $0.47 $0.45 $1.36 $1.28
===== ===== ===== =====
Dilutive $0.43 $0.42 $1.26 $1.23
===== ===== ===== =====
</TABLE>
See notes to consolidated financial statements.
3
<PAGE>
CONSOLIDATED BALANCE SHEET
HILB, ROGAL AND HAMILTON COMPANY AND SUBSIDIARIES
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
2000 1999
---- ----
(UNAUDITED)
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 35,966,180 $ 22,336,722
Investments 1,869,526 2,939,238
Receivables:
Premiums, less allowance for doubtful
accounts of $1,659,000 and $1,456,000,
respectively 75,272,202 61,853,039
Other 14,150,015 13,418,165
------------ ------------
89,422,217 75,271,204
Prepaid expenses and other current assets 5,612,347 10,653,387
------------ ------------
TOTAL CURRENT ASSETS 132,870,270 111,200,551
INVESTMENTS 1,880,940 1,761,463
PROPERTY AND EQUIPMENT, NET 15,789,755 15,412,623
INTANGIBLE ASSETS 238,787,636 229,130,542
Less accumulated amortization 52,993,514 45,082,914
------------ ------------
185,794,122 184,047,628
OTHER ASSETS 7,965,960 5,559,054
------------ ------------
$344,301,047 $317,981,319
============ ============
LIABILITIES AND SHAREHOLDERS'
EQUITY
CURRENT LIABILITIES
Premiums payable to insurance companies $112,165,740 $ 87,752,334
Accounts payable and accrued expenses 14,124,895 17,496,667
Premium deposits and credits due customers 14,210,147 15,192,499
Current portion of long-term debt 4,413,528 3,865,137
------------ ------------
TOTAL CURRENT LIABILITIES 144,914,310 124,306,637
LONG-TERM DEBT 106,338,712 111,826,434
OTHER LONG-TERM LIABILITIES 11,480,153 10,672,472
SHAREHOLDERS' EQUITY
Common Stock, no par value;
authorized 50,000,000 shares;
outstanding 13,156,147 and
13,058,978 shares, respectively 17,420,664 18,248,712
Retained earnings 64,147,208 52,927,064
------------ ------------
81,567,872 71,175,776
------------ ------------
$344,301,047 $317,981,319
============ ============
</TABLE>
See notes to consolidated financial statements.
4
<PAGE>
STATEMENT OF CONSOLIDATED SHAREHOLDERS' EQUITY
HILB, ROGAL AND HAMILTON COMPANY AND SUBSIDIARIES
(UNAUDITED)
<TABLE>
<CAPTION>
Common Stock Retained Earnings
------------ -----------------
<S> <C> <C>
Balance at January 1, 2000 $ 18,248,712 $ 52,927,064
Issuance of 213,869 shares of
Common Stock 2,256,863
Purchase of 116,700 shares of
Common Stock (3,084,911)
Payment of dividends ($.505 per share) (6,610,258)
Net income 17,830,402
------------ ------------
Balance at September 30, 2000 $ 17,420,664 $ 64,147,208
============ ============
Balance at January 1, 1999 $ 3,831,208 $ 41,879,167
Issuance of 1,166,163 shares of
Common Stock 19,386,042
Purchase of 164,900 shares of
Common Stock (3,399,290)
Payment of dividends ($.49 per share) (6,269,489)
Net income 16,396,488
------------ ------------
Balance at September 30, 1999 $ 19,817,960 $ 52,006,166
============ ============
</TABLE>
See notes to consolidated financial statements.
5
<PAGE>
STATEMENT OF CONSOLIDATED CASH FLOWS
HILB, ROGAL AND HAMILTON COMPANY AND SUBSIDIARIES
(UNAUDITED)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPT. 30, 2000 SEPT. 30, 1999
-------------- --------------
<S> <C> <C>
OPERATING ACTIVITIES
Net income $ 17,830,402 $ 16,396,488
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 3,903,409 3,322,138
Amortization of intangible assets 9,063,474 7,619,861
-------------- --------------
Net income plus amortization and depreciation 30,797,285 27,338,487
Provision for losses on accounts receivable 631,709 323,661
Gain on sale of assets (921,674) (4,683,747)
Changes in operating assets and liabilities
net of effects from insurance agency
acquisitions and dispositions:
(Increase) decrease in accounts receivable (14,876,571) 16,708,403
Decrease in prepaid expenses 5,041,040 1,203,811
Increase (decrease) in premiums payable to
insurance companies 23,435,463 (14,581,358)
Increase (decrease) in premium deposits and
credits due customers (934,944) 4,952,409
Decrease in accounts payable and accrued
expenses (3,311,357) (6,298,247)
Other operating activities 761,011 1,212,552
-------------- --------------
NET CASH PROVIDED BY OPERATING
ACTIVITIES 40,621,962 26,175,971
INVESTING ACTIVITIES
Proceeds from maturities of held-to-maturity
investments 2,911,316 4,063,767
Purchase of investments (1,961,081) (2,270,972)
Purchase of property and equipment (4,920,582) (5,489,904)
Purchase of insurance agencies, net of cash acquired (11,770,179) (27,857,257)
Proceeds from sale of assets 4,660,028 5,304,771
Other investing activities (1,327,634) (2,620,131)
-------------- --------------
NET CASH USED IN INVESTING ACTIVITIES (12,408,132) (28,869,726)
FINANCING ACTIVITIES
Proceeds from long-term debt 3,000,000 93,000,000
Principal payments on long-term debt (10,424,816) (62,184,553)
Proceeds from issuance of Common Stock 2,535,613 2,454,792
Repurchase of Common Stock (3,084,911) (3,399,291)
Dividends (6,610,258) (6,269,489)
-------------- --------------
NET CASH (USED IN) PROVIDED BY
FINANCING ACTIVITIES (14,584,372) 23,601,459
-------------- --------------
INCREASE IN CASH AND CASH EQUIVALENTS 13,629,458 20,907,704
Cash and cash equivalents at beginning of period 22,336,722 19,394,958
-------------- --------------
CASH AND CASH EQUIVLENTS AT END OF
PERIOD $ 35,966,180 $ 40,302,662
============== ==============
</TABLE>
See notes to consolidated financial statements.
6
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
HILB, ROGAL AND HAMILTON COMPANY AND SUBSIDIARIES
September 30, 2000
(UNAUDITED)
NOTE A--BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements of the Company have
been prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and Article
10 of Regulation S-X. Accordingly, they do not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the nine month period ended September 30,
2000, are not necessarily indicative of the results that may be expected for the
year ending December 31, 2000. For further information, refer to the
consolidated financial statements and footnotes thereto included in the
Company's Form 10-K for the year ended December 31, 1999.
NOTE B--ACCOUNTING PRONOUNCEMENTS
In June, 1998, the FASB issued Statement No. 133, "Accounting for Derivative
Instruments and Hedging Activities" which is required to be adopted in years
beginning after June 15, 2000. Because of the Company's minimal use of
derivatives, management does not anticipate that the new statement will have a
significant effect on earnings or the financial position of the Company.
On December 3, 1999, the Securities and Exchange Commission staff issued Staff
Accounting Bulletin No. 101 (SAB 101), "Revenue Recognition in Financial
Statements" which is required to be implemented no later than the fourth quarter
of fiscal years beginning after December 15, 1999. Management does not
anticipate that SAB 101 will have a significant effect on earnings or financial
position of the Company.
NOTE C--INCOME TAXES
The Company files a consolidated federal income tax return. Deferred taxes
result from temporary differences between the carrying amounts of assets and
liabilities for financial statement purposes and the amounts used for income tax
purposes. The Company's effective rate varies from the statutory rate primarily
due to state income taxes and non-deductible amortization.
7
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
HILB, ROGAL AND HAMILTON COMPANY AND SUBSIDIARIES
September 30, 2000
(UNAUDITED)
NOTE D--ACQUISITIONS
On May 3, 1999, the Company acquired all of the issued and outstanding shares of
American Phoenix Corporation, a subsidiary of Phoenix Home Life Mutual Insurance
Company, from Phoenix Home Life Mutual Insurance Company and Martin L. Vaughan,
III. The shares were acquired in exchange for approximately $49 million in cash,
$32 million face value in 5.25% Convertible Subordinated Debentures due 2014,
with a conversion price of $22.75 per share, callable in 2009, and 1,000,000
shares of Common Stock of the Company. The Company funded the cash portion of
the purchase price with a credit facility obtained in connection with the
acquisition. The acquisition has been accounted for by the purchase method of
accounting. Intangible assets of approximately $97 million, created by the
acquisition, will be amortized over 25 years. The assets and liabilities of
American Phoenix Corporation have been revalued to their respective fair market
values. The financial statements of the Company reflect the combined operations
of the Company and American Phoenix Corporation from the closing date of the
acquisition.
Pursuant to EITF 94-3, "Liability Recognition for Certain Employee Termination
Benefits and Other Costs to Exit an Activity", the Company has recorded a charge
of $1.9 million in the second quarter of 1999 related to severance, termination
costs and other restructuring costs necessary to integrate the operations of
American Phoenix Corporation with the Company. Costs incurred to exit certain
leases and physically merge common locations comprised $950,000 of this amount.
The remaining amount relates to employee severance and other integration costs.
As of September 30, 2000, the Company had paid approximately $1,300,000 of these
integration costs. These charges have been included in the following pro forma
amounts. Similar costs related to
8
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
HILB, ROGAL AND HAMILTON COMPANY AND SUBSIDIARIES
September 30, 2000
(UNAUDITED)
NOTE D--ACQUISITIONS-Continued
American Phoenix Corporation's severance and termination costs were
approximately $2,700,000, and were capitalized as part of the purchase. The
following unaudited pro forma results of operations of the Company give effect
to the acquisition of American Phoenix Corporation as though the transaction had
occurred on January 1, 1999.
NINE MONTHS ENDED
SEPTEMBER 30, 1999
------------------
REVENUES $193,082,000
NET INCOME 17,694,000
NET INCOME PER
COMMON SHARE:
Basic $1.34
=====
Diluted $1.23
=====
WEIGHTED AVERAGE
SHARES OUTSTANDING:
Basic 13,222,112
Diluted 14,796,325
During the first nine months of 2000, the Company also acquired certain assets
and liabilities of eight insurance agencies for $12,150,000 ($9,665,000 in cash
and $2,485,000 in guaranteed future payments) in purchase accounting
transactions. These acquisitions are not material to the consolidated financial
statements individually or in the aggregate.
NOTE E--SALE OF ASSETS AND OTHER GAINS
During the nine months ended September 30, 2000 and 1999, the Company sold
certain insurance accounts and other assets resulting in gains of approximately
$922,000 and $3,678,000, including $36,000 of gains and $10,000 of gains during
the third quarters of 2000 and 1999, respectively. The Company also recorded a
non-taxable gain of $1,006,000 in the third quarter of 1999 from the receipt of
insurance proceeds on the life of a former subsidiary president. Revenues,
expenses and assets related to these dispositions were not material to the
consolidated financial statements.
9
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
HILB, ROGAL AND HAMILTON COMPANY AND SUBSIDIARIES
September 30, 2000
(UNAUDITED)
NOTE F--NET INCOME PER SHARE
The following table sets forth the computation of basic and diluted net income
per share.
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
Sept. 30, 2000 Sept. 30, 1999 Sept. 30, 2000 Sept. 30, 1999
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Numerator for basic net income
per share - net income $ 6,152,016 $ 5,915,993 $ 17,830,402 $ 16,396,488
Effect of dilutive securities:
5.25% convertible debenture 270,162 268,789 809,439 441,871
-------------- -------------- -------------- --------------
Numerator for dilutive net income per
share - net income available after
assumed conversions $ 6,422,178 $ 6,184,782 $ 18,639,841 $ 16,838,359
============== ============== ============== ==============
Denominator
Weighted average shares 13,035,624 13,112,666 13,026,800 12,681,912
Effect of guaranteed future shares to be
issued in connection with an agency
acquisition 37,429 79,800 46,507 95,756
-------------- -------------- -------------- --------------
Denominator for basic net income per
share 13,073,053 13,192,466 13,073,307 12,777,668
Effect of dilutive securities
Employee stock options 401,966 226,373 334,195 151,576
Employee non-vested stock 28,674 133 13,970 44
Contingent stock - acquisitions 16,326 21,649 7,769 15,999
5.25% convertible debenture 1,406,593 1,406,593 1,406,593 781,441
-------------- -------------- -------------- --------------
Dilutive potential common shares 1,853,559 1,654,748 1,762,527 949,060
-------------- -------------- -------------- --------------
Denominator for diluted net income per
share - adjusted weighted average
shares and assumed conversions 14,926,612 14,847,214 14,835,834 13,726,728
============== ============== ============== ==============
Net Income per Common Share:
Basic $0.47 $0.45 $1.36 $1.28
===== ===== ===== =====
Diluted $0.43 $0.42 $1.26 $1.23
===== ===== ===== =====
</TABLE>
10
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations:
---------------------
On May 3, 1999, the Company acquired all of the issued and outstanding shares of
common stock of American Phoenix Corporation, a subsidiary of Phoenix Home Life
Mutual Insurance Company, from Phoenix Home Life Mutual Insurance Company and
Martin L. Vaughan, III. The assets and liabilities of American Phoenix
Corporation have been revalued to their respective fair market values. The
financial statements of the Company reflect the combined operations of the
Company and American Phoenix Corporation from the closing date of the
acquisition.
Three Months Ended September 30, 2000
Net income for the three months ended September 30, 2000 was $6.2 million, or
$0.43 per share, compared with $5.9 million, or $0.42 per share. Excluding
non-recurring gains in both periods, net income was $6.1 million, a 25.0%
increase from $4.9 million last year. Net income per share on the same basis was
$0.43, compared with $0.35, an increase of 22.9%.
Commissions and fees were $64.6 million, an increase of 5.3% from commissions
and fees of $61.4 million during the comparable period of the prior year.
Approximately $2.5 million of commissions were derived from purchase
acquisitions of new insurance agencies. This increase was offset by decreases of
approximately $2.3 million from the sale of certain offices and accounts in 2000
and 1999. Excluding the effect of acquisitions and dispositions, commissions and
fees from operations owned during both periods increased 5.2%.
Investment income increased $0.2 million or 30.1% due primarily to increased
invested assets and higher interest rates. Other income decreased $0.9 million
or 69.3% primarily due to a $1.0 million non-taxable gain from the receipt of
life insurance proceeds in 1999.
Expenses for the quarter increased $1.4 million or 2.6%. Compensation and
benefits and other operating expenses increased $0.9 million and $0.4 million,
respectively, primarily due to purchase acquisitions of new insurance agencies
and increased revenue production. Amortization of intangibles increased
approximately $0.1 million due primarily to the aforementioned purchase
acquisitions offset by sales of accounts in 2000. Interest expense remained
comparable to the same period.
The Company's overall tax rate for the three months ended September 30, 2000 was
43.0% compared to 38.4% for the same period of the prior year. The increase was
due to the non-taxable life insurance proceeds received in 1999.
Nine Months Ended September 30, 2000
For the nine months ended September 30, 2000, net income was $17.8 million, or
$1.26 per share, compared to $16.4 million, or $1.23 per share last year.
Excluding the effect of gains and
11
<PAGE>
the integration charge, net income was $17.3 million, or $1.22 per share, up
from $14.3 million or $1.08 per share a year ago.
Commissions and fees were $191.4 million, an increase of 18.5% from commissions
and fees of $161.5 million during the comparable period of the prior year.
Approximately $27.7 million of commissions were derived from purchase
acquisitions of new insurance agencies. This increase was offset by decreases of
approximately $4.9 million from the sale of certain offices and accounts in 2000
and 1999. Commissions and fees, excluding the effect of acquisitions and
dispositions, from operations owned during both periods increased 4.6%.
Investment income increased $0.4 million, or 26.3%, primarily due to increased
invested assets related to purchase acquisitions. Other income decreased $3.6
million or 66.7% from the prior year primarily due to the aforementioned life
insurance proceeds and the impact of nonrecurring gains from the sale of certain
insurance accounts and other assets.
Expenses increased by $22.9 million or 16.3%. Increases include $16.3 million in
compensation and benefits and $5.3 million in other operating expenses, due
primarily to purchase acquisitions of new insurance agencies and increased
revenue production. Amortization of intangibles increased approximately $1.4
million due primarily to purchase acquisitions. Interest expense increased by
$1.8 million due to increased bank borrowings and Subordinated Convertible
Debentures utilized to finance agency acquisition and stock repurchase programs
along with interest rate increases.
The Company's overall tax rate of 43.0% for the nine months ended September 30,
2000, increased from the rate of 40.5% for the nine months ended September 30,
1999 primarily due to increased nondeductible amortization in 2000 and the
non-taxable life insurance proceeds received in 1999.
The timing of contingent commissions, policy renewals and acquisitions may cause
revenues, expenses and net income to vary significantly from quarter to quarter.
As a result of the factors described above, operating results for the nine
months ended September 30, 2000 should not be considered indicative of the
results that may be expected for the entire year ending December 31, 2000.
Liquidity and Capital Resources:
-------------------------------
Net cash provided by operations totaled $40.6 million and $26.2 million for the
nine months ended September 30, 2000 and 1999, respectively, and is primarily
dependent upon the timing of the collection of insurance premiums from clients
and payment of those premiums to the appropriate insurance underwriters.
The Company has historically generated sufficient funds internally to finance
capital expenditures for property and equipment. Cash expenditures for the
acquisition of property and equipment were $4.9 million and $5.5 million for the
nine months ended September 30, 2000 and 1999, respectively. The timing and
extent of the purchase and sale of investments is dependent upon
12
<PAGE>
cash needs and yields on alternate investments and cash equivalents. The
purchase of insurance agencies accounted for under the purchase method of
accounting utilized cash of $11.8 million and $27.9 million in the nine months
ended September 30, 2000 and 1999, respectively. Cash expenditures for such
insurance agency acquisitions have been primarily funded through operations and
long-term borrowings. In addition, a portion of the purchase price in such
acquisitions may be paid through Common Stock, deferred cash payments and, in
the case of the American Phoenix acquisition, issuance of Convertible
Subordinated Debentures. Cash proceeds from the sale of accounts and other
assets amounted to $4.7 million and $5.3 million in the nine months ended
September 30, 2000 and 1999, respectively. The Company did not have any material
capital expenditure commitments as of September 30, 2000.
Financing activities (utilized) provided cash of ($14.6) million and $23.6
million in the nine months ended September 30, 2000 and 1999, respectively. The
Company has consistently made debt payments and annually increased its dividend
rate. In addition, during the nine months ended September 30, 2000 and 1999, the
Company repurchased 116,700 and 164,900, respectively, shares of its Common
Stock under a stock repurchase program. The Company is currently authorized to
purchase an additional 390,100 shares. The Company anticipates the continuance
of its dividend policy. The Company has a bank credit facility for $107.8
million under which loans are due in various amounts through 2004 and $32.0
million face value of 5.25% Convertible Subordinated Debentures due 2014. At
September 30, 2000, there were loans of $72.8 million outstanding under the bank
agreement.
The Company had a current ratio (current assets to current liabilities) of 0.92
to 1.00 as of September 30, 2000. Shareholders' equity of $81.6 million at
September 30, 2000, is improved from $71.2 million at December 31, 1999. The
debt to equity ratio of 1.30 to 1.00 is decreased from the ratio at December 31,
1999 of 1.57 to 1.00 due to debt payments and net income.
The Company believes that cash generated from operations, together with proceeds
from borrowings, will provide sufficient funds to meet the Company's short and
long-term funding needs.
Market Risk
The Company has certain investments and utilizes (on a limited basis) derivative
financial instruments which are subject to market risk; however, the Company
believes that exposure to market risk associated with these instruments is not
material.
Forward-Looking Statements
The Company cautions readers that the foregoing discussion and analysis includes
"forward-looking statements" within the meaning of Section 21E of the Securities
Exchange Act of 1934, as amended, and are subject to the safe harbor created by
that Act. These forward-looking statements are believed by the Company to be
reasonable based upon management's current knowledge and assumptions about
future events, but are subject to the uncertainties generally inherent in any
such forward-looking statement, including factors discussed above as well as
other
13
<PAGE>
factors that may generally affect the Company's business, financial condition or
operating results. Reference is made to the discussion of "Forward-Looking
Statements" contained in "Management's Discussion and Analysis of Financial
Condition and Results of Operations" in the Company's Annual Report on Form 10-K
for the fiscal year ended December 31, 1999, regarding important risk factors
and uncertainties that could cause actual results, performance or achievements
to differ materially from future results, performance or achievements expressed
or implied in any forward-looking statement made by or on behalf of the Company.
Item 3. QUALITATIVE AND QUANTITATIVE DISCLOUSRES ABOUT MARKET RISK
The information required by this item is set forth under the caption
"Market Risk" in Item 2 -- Management's Discussion and Analysis of Financial
Condition and Results of Operations.
PART II - OTHER INFORMATION
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibits
Exhibit No. Document
----------- --------
27 Financial Data Schedule (filed
electronically only)*
*Filed Herewith
b) Reports on Form 8-K
None.
14
<PAGE>
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.
Hilb, Rogal and Hamilton Company
--------------------------------
(Registrant)
Date November 13, 2000 By: /s/ Andrew L. Rogal
------------------- ---------------------------------
Chairman and Chief Executive
Officer
(Principal Executive Officer)
Date November 13, 2000 By: /s/ Carolyn Jones
------------------- ---------------------------------
Senior Vice President and Chief
Financial Officer
(Principal Financial Officer)
Date November 13, 2000 By: /s/ Robert W. Blanton, Jr.
------------------- ---------------------------------
Vice President and Controller
(Chief Accounting Officer)
15
<PAGE>
HILB, ROGAL AND HAMILTON COMPANY
EXHIBIT INDEX
Exhibit No. Document
----------- --------
27 Financial Data Schedule (filed
electronically only)*
*Filed Herewith
