<PAGE>
FORM 8-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January 24, 2000
-----------------------------
DELPHI FINANCIAL GROUP, INC.
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(Exact name of registrant as specified in its charter)
Delaware 001-11462 13-3427277
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
1105 North Market Street, Suite 1230, P.O. Box 8985, Wilmington, DE 19899
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(Address of principal executive offices) (ZIP Code)
Registrant's telephone number, including area code 302-478-5142
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<PAGE>
Item 5. Other Events
On January 24, 2000, the Registrant issued a press release announcing it
has received releases from liability relating to the Unicover matter from
the Unicover retrocessionaires and pool and facility members. The releases
were obtained in connection with a global resolution involving Reliance Group
Holdings, Inc., its retrocessionaires and a group of ceding companies and
brokers. Delphi contributed to this process by agreeing to rescind a quota
share reinsurance contract with Reliance Insurance Company. Accordingly,
Delphi has restated its financial results to exclude the effects of this
contract. A copy of such press release, including restated consolidated
statements of income for the first three quarters of 1999, is attached as
Exhibit 99.1 to this Current Report on Form 8-K and incorporated by reference
herein.
Item 7. Financial Statements and Exhibits
(c) Exhibits.
Exhibit Number Description of Exhibits
-------------- -----------------------
27.1 Restated Financial Data Schedule - March 31, 1999
27.2 Restated Financial Data Schedule - June 30, 1999
27.3 Restated Financial Data Schedule - September 30, 1999
99.1 Registrant's January 24, 2000 press release.
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 hereunto duly authorized.
DELPHI FINANCIAL GROUP, INC.
By: /s/ ROBERT ROSENKRANZ
---------------------------
Robert Rosenkranz
Chairman of the Board, President
and Chief Executive Officer
Dated: January 24, 2000
<TABLE> <S> <C>
<ARTICLE> 7
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET AS OF MARCH 31, 1999 (UNAUDITED), AS RESTATED,
AND THE CONSOLIDATED STATEMENT OF INCOME FOR THE THREE MONTHS ENDED
MARCH 31, 1999 (UNAUDITED), AS RESTATED, AND IS QUALIFIED IN ITS ENTIRETY
BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<DEBT-HELD-FOR-SALE> 2,022,174
<DEBT-CARRYING-VALUE> 0
<DEBT-MARKET-VALUE> 0
<EQUITIES> 0
<MORTGAGE> 0
<REAL-ESTATE> 0
<TOTAL-INVEST> 2,323,409
<CASH> 196,439
<RECOVER-REINSURE> 371,033
<DEFERRED-ACQUISITION> 112,885
<TOTAL-ASSETS> 3,339,099
<POLICY-LOSSES> 1,095,268
<UNEARNED-PREMIUMS> 0
<POLICY-OTHER> 0
<POLICY-HOLDER-FUNDS> 667,370
<NOTES-PAYABLE> 226,098
100,000<F1>
0
<COMMON> 204
<OTHER-SE> 523,720
<TOTAL-LIABILITY-AND-EQUITY> 3,339,099
125,361
<INVESTMENT-INCOME> 43,801
<INVESTMENT-GAINS> (1,117)
<OTHER-INCOME> 0
<BENEFITS> 96,903
<UNDERWRITING-AMORTIZATION> 6,576
<UNDERWRITING-OTHER> 34,022
<INCOME-PRETAX> 30,544
<INCOME-TAX> 9,502
<INCOME-CONTINUING> 19,529
<DISCONTINUED> (13,847)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,682
<EPS-BASIC> 0.27<F2>
<EPS-DILUTED> 0.26<F2>
<RESERVE-OPEN> 0
<PROVISION-CURRENT> 0
<PROVISION-PRIOR> 0
<PAYMENTS-CURRENT> 0
<PAYMENTS-PRIOR> 0
<RESERVE-CLOSE> 0
<CUMULATIVE-DEFICIENCY> 0
<FN>
<F1>Represents Company-obligated mandatorily redeemable Capital Securities of
Delphi Funding L.L.C. holding solely junior subordinated deferrable interest
debentures of the Company.
<F2>Reflects the 2% stock dividends distributed on June 8, 1999 and
December 15, 1999.
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 7
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET AS OF June 30, 1999 (UNAUDITED), AS RESTATED, AND
THE CONSOLIDATED STATEMENT OF INCOME FOR THE SIX MONTHS ENDED JUNE 30, 1999
(UNAUDITED), AS RESTATED, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> JUN-30-1999
<DEBT-HELD-FOR-SALE> 2,022,150
<DEBT-CARRYING-VALUE> 0
<DEBT-MARKET-VALUE> 0
<EQUITIES> 0
<MORTGAGE> 0
<REAL-ESTATE> 0
<TOTAL-INVEST> 2,392,294
<CASH> 134,009
<RECOVER-REINSURE> 372,561
<DEFERRED-ACQUISITION> 127,954
<TOTAL-ASSETS> 3,400,615
<POLICY-LOSSES> 1,125,297
<UNEARNED-PREMIUMS> 0
<POLICY-OTHER> 0
<POLICY-HOLDER-FUNDS> 672,215
<NOTES-PAYABLE> 242,039
100,000<F1>
0
<COMMON> 209
<OTHER-SE> 495,850
<TOTAL-LIABILITY-AND-EQUITY> 3,400,615
238,989
<INVESTMENT-INCOME> 88,154
<INVESTMENT-GAINS> (9,497)
<OTHER-INCOME> 0
<BENEFITS> 185,602
<UNDERWRITING-AMORTIZATION> 13,464
<UNDERWRITING-OTHER> 64,994
<INCOME-PRETAX> 53,586
<INCOME-TAX> 16,420
<INCOME-CONTINUING> 34,140
<DISCONTINUED> (13,847)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 20,293
<EPS-BASIC> 0.96<F2>
<EPS-DILUTED> 0.93<F2>
<RESERVE-OPEN> 0
<PROVISION-CURRENT> 0
<PROVISION-PRIOR> 0
<PAYMENTS-CURRENT> 0
<PAYMENTS-PRIOR> 0
<RESERVE-CLOSE> 0
<CUMULATIVE-DEFICIENCY> 0
<FN>
<F1>Represents Company-obligated mandatorily redeemable Capital Securities of
Delphi Funding L.L.C. holding solely junior subordinated deferrable interest
debentures of the Company.
<F2>Reflects the 2% stock dividend distributed on December 15, 1999.
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 7
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET AS OF SEPTEMBER 30, 1999 (UNAUDITED), AS RESTATED,
AND THE CONSOLIDATED STATEMENT OF INCOME FOR THE NINE MONTHS ENDED
SEPTEMBER 30, 1999 (UNAUDITED), AS RESTATED, AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> SEP-30-1999
<DEBT-HELD-FOR-SALE> 1,928,410
<DEBT-CARRYING-VALUE> 0
<DEBT-MARKET-VALUE> 0
<EQUITIES> 0
<MORTGAGE> 0
<REAL-ESTATE> 0
<TOTAL-INVEST> 2,306,958
<CASH> 174,794
<RECOVER-REINSURE> 371,251
<DEFERRED-ACQUISITION> 135,434
<TOTAL-ASSETS> 3,388,088
<POLICY-LOSSES> 1,151,501
<UNEARNED-PREMIUMS> 0
<POLICY-OTHER> 0
<POLICY-HOLDER-FUNDS> 677,751
<NOTES-PAYABLE> 246,989
100,000<F1>
0
<COMMON> 210
<OTHER-SE> 491,127
<TOTAL-LIABILITY-AND-EQUITY> 3,388,088
365,306
<INVESTMENT-INCOME> 134,412
<INVESTMENT-GAINS> (15,286)
<OTHER-INCOME> 0
<BENEFITS> 286,432
<UNDERWRITING-AMORTIZATION> 20,269
<UNDERWRITING-OTHER> 97,780
<INCOME-PRETAX> 79,951
<INCOME-TAX> 24,580
<INCOME-CONTINUING> 50,832
<DISCONTINUED> (13,847)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 36,985
<EPS-BASIC> 1.76<F2>
<EPS-DILUTED> 1.70<F2>
<RESERVE-OPEN> 0
<PROVISION-CURRENT> 0
<PROVISION-PRIOR> 0
<PAYMENTS-CURRENT> 0
<PAYMENTS-PRIOR> 0
<RESERVE-CLOSE> 0
<CUMULATIVE-DEFICIENCY> 0
<FN>
<F1>Represents Company-obligated mandatorily redeemable Capital Securities of
Delphi Funding L.L.C. holding solely junior subordinated deferrable interest
debentures of the Company.
<F2>Reflects the 2% stock dividend distributed on December 15, 1999.
</FN>
</TABLE>
<PAGE>
Delphi Financial Group, Inc.
Press Release
For Release at 8:00 am
Contact: Investor Relations
David Finkelstein (212) 303-4349
Jennifer Flaiano-Jones (215) 787-3943
DELPHI RELEASED FROM UNICOVER LIABILITY
Wilmington, Delaware -- January 24, 2000 -- Delphi Financial Group, Inc.
(NYSE: DFG) announced today that it has received releases from liability
relating to the Unicover matter from the Unicover retrocessionaires
and pool and facility members. The releases were obtained in connection
with a global resolution involving Reliance Group Holdings, Inc., its
retrocessionaires and a group of ceding companies and brokers. Delphi
contributed to this process by agreeing to rescind a quota share
reinsurance contract with Reliance Insurance Company. Accordingly, Delphi has
restated its financial results to exclude the effects of this contract which
had contributed five to seven cents per share to earnings in each of the
first three quarters of 1999. Delphi expects that a similar earnings
contribution will be excluded from net income for the fourth quarter of 1999.
Robert Rosenkranz, Chairman and Chief Executive Officer of Delphi, said: "We
believe that Delphi's shares are extremely undervalued due to continuing
investor skittishness over perceived Unicover exposure. Although we had no
legal liability, it seemed wise to us to participate in a global resolution
that should put these investor concerns firmly and definitively to rest."
Delphi Financial Group, Inc. is an integrated employee benefit services
company. We are a leader in managing all aspects of employee absence to
enhance the productivity of our clients and we provide the related insurance
coverages: short-term and long-term disability, primary and excess workers'
compensation, group life, and travel accident. Our asset accumulation
business emphasizes individual annuity products. Our common stock is listed
on the New York Stock Exchange under the symbol DFG and our corporate website
address is www.delphifin.com.
In connection with, and because it desires to take advantage of, the "safe
harbor" provisions of the Private Securities Litigation Reform Act of 1995,
Delphi cautions readers regarding certain forward-looking statements in the
foregoing discussion and in any other statement made by, or on behalf of,
Delphi, whether in future filings with the Securities and Exchange Commission
or otherwise. Forward-looking statements are statements not based on
historical information and which relate to future operations, strategies,
financial results or other developments. Some forward-looking statements may
be identified by the use of terms such as "expects," "believes,"
"anticipates," "intends" or "judgment." Forward-looking statements are
necessarily based upon estimates and assumptions that are inherently subject
to significant business, economic and competitive uncertainties and
contingencies, many of which are beyond Delphi's control and many of which,
with respect to future business decisions, are subject to change. Examples of
such uncertainties and contingencies include, among other important factors,
those affecting the insurance industry generally, such as the economic and
interest rate environment, legislative and regulatory developments and market
pricing and competitive trends relating to insurance products and services,
and those relating specifically to Delphi's business, such as the level of
its insurance premiums and fee income, the claims experience and other
factors affecting the profitability of its insurance products, the
performance of its investment portfolio, the successful completion of its
Year 2000 compliance program, acquisitions of companies or blocks of
business, and ratings by major rating organizations of its insurance
subsidiaries. These uncertainties and contingencies can affect actual results
and could cause actual results to differ materially from those expressed in
any forward-looking statements made by, or on behalf of, Delphi. Delphi
disclaims any obligation to update forward-looking information.
<PAGE>
DELPHI FINANCIAL GROUP, INC.
Restated Consolidated Statements of Income
(Unaudited; in thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Ended
--------------------------------------------
03/31/99 06/30/99 09/30/99
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<S> <C> <C> <C>
Revenue:
Premium and fee income $125,361 $113,628 $126,317
Net investment income 43,801 44,353 46,258
Realized investment losses (1,117) (8,380) (5,789)
-------- -------- --------
168,045 149,601 166,786
-------- -------- --------
Benefits and expenses:
Benefits, claims and interest credited to policyholders 96,903 88,699 100,830
Commissions and expenses 36,115 33,520 35,139
-------- -------- --------
133,018 122,219 135,969
-------- -------- --------
Operating income 35,027 27,382 30,817
Interest expense 4,483 4,340 4,452
Income tax expense 9,502 6,918 8,160
-------- -------- --------
Income from continuing operations before dividends
on Capital Securities of Delphi Funding L.L.C. 21,042 16,124 18,205
Dividends on Capital Securities of Delphi Funding L.L.C. 1,513 1,513 1,513
-------- -------- --------
Income from continuing operations 19,529 14,611 16,692
Loss on disposal of discontinued operations, net of taxes (13,847) - -
-------- -------- --------
Net income $ 5,682 $ 14,611 $ 16,692
======== ======== ========
Basis results per share of common stock*:
Income from continuing operations excluding realized
investment losses $ 0.95 $ 0.96 $ 0.98
Realized investment losses, net of taxes (0.03) (0.26) (0.18)
-------- -------- --------
Income from continuing operations 0.92 0.70 0.80
Loss on disposal of discontinued operations, net of taxes (0.65) - -
-------- -------- --------
Net income $ 0.27 $ 0.70 $ 0.80
======== ======== ========
Weighted average shares outstanding 21,274 20,904 20,864
Diluted results per share of common stock*:
Income from continuing operations excluding realized
investment losses $ 0.92 $ 0.93 $ 0.95
Realized investment losses, net of taxes (0.03) (0.25) (0.18)
-------- -------- --------
Income from continuing operations 0.89 0.68 0.77
Loss on disposal of discontinued operations, net of taxes (0.63) - -
-------- -------- --------
Net income $ 0.26 $ 0.68 $ 0.77
======== ======== ========
Weighted average shares outstanding 22,028 21,608 21,569
* Results per share have been restated to reflect stock dividends distributed in 1999.
</TABLE>
