<PAGE> 1
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_______________
FORM 10-Q
(Mark One)
[ X ] Quarterly report pursuant to section 13 or 15(d) of the Securities
Exchange Act of 1934 For the quarterly period ended June 30, 1996 or
[ ] Transition report pursuant to section 13 or 15(d) of the
Securities Exchange Act of 1934 For the Transition period from
to
------------------ ---------------------
Commission file number 1-12922
AMERICAN EAGLE GROUP, INC.
(Exact name of registrant as specified in its charter)
Delaware 75-2100622
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
12801 North Central Expressway, Suite 800, Dallas, Texas 75243
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (214) 448-1400
- --------------------------------------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last year.)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
---------- ----------
APPLICABLE ONLY TO CORPORATE ISSUERS:
As of August 8, 1996, the number of shares outstanding of each of the
issuer's classes of common stock was as follows:
Common Stock .......... 7,049,398 shares, par value $.01 per share
================================================================================
<PAGE> 2
AMERICAN EAGLE GROUP, INC.
INDEX TO FORM 10-Q
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed consolidated balance sheets as of
June 30, 1996 (unaudited) and
December 31, 1995 . . . . . . . . . . . . . . . . . . . . . . 3
Condensed consolidated statements of operations
for the periods ended June 30, 1996
(unaudited) and June 30, 1995 (unaudited) . . . . . . . . . . 4
Condensed consolidated statements of cash flows
for the periods ended June 30, 1996
(unaudited) and June 30, 1995 (unaudited) . . . . . . . . . . 5
Notes to condensed consolidated financial
statements (unaudited) . . . . . . . . . . . . . . . . . . . 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations . . . . . . . . . . 7
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . 10
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
</TABLE>
2
<PAGE> 3
AMERICAN EAGLE GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
(Unaudited)
ASSETS December 31, June 30,
1995 1996
------------ -----------
<S> <C> <C>
Cash and investments $106,792 $ 82,578
Accounts receivable 56,890 54,896
Reinsurance recoverable, net 101,125 95,904
Deferred policy acquisition costs 15,296 14,701
Deferred reinsurance premiums 19,829 16,090
Other assets 18,337 16,437
-------- --------
Total assets $318,269 $280,606
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Reserve for losses and loss adjustment expenses $136,528 $129,800
Unearned premiums 79,605 69,865
Other policy liabilities 20,196 3,689
Agency payables to insurance companies, net 1,736 1,359
Note payable 11,250 13,250
Accounts payable and other liabilities 13,859 12,798
-------- --------
Total liabilities 263,174 230,761
-------- --------
Commitments and contingent liabilities
Series B Cumulative Preferred Stock, $.01 par value; 162,857 shares
authorized, 162,857 shares issued and outstanding 1,629 1,629
Stockholders' equity:
Common Stock, $.01 par value, 21,000,000 shares authorized,
7,123,380 shares issued 71 71
Additional paid-in-capital 45,532 45,548
Unrealized apprec.(deprec.) on investment securities, net of deferred taxes 1,029 (317)
Retained earnings 6,921 3,001
Less - 73,882 shares of common stock held in the treasury, at cost (87) (87)
-------- --------
Total stockholders' equity 53,466 48,216
-------- --------
Total liabilities and stockholders' equity $318,269 $280,606
======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
3
<PAGE> 4
AMERICAN EAGLE GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
FOR THE PERIODS ENDED
(UNAUDITED)
(IN THOUSANDS EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30, June 30, June 30,
1995 1996 1995 1996
---------- ---------- --------- ----------
<S> <C> <C> <C> <C>
Revenues
Earned premiums, net of reinsurance $ 24,595 $ 33,497 $ 45,244 $ 66,331
Agency operations, net 41 (20) 292 (53)
Investment income, net 1,466 1,044 2,810 2,447
Realized investment gains (losses), net 0 (55) 6 98
---------- ---------- --------- ----------
Total revenues 26,102 34,466 48,352 68,823
---------- ---------- --------- ----------
Expenses
Losses and loss adjustment expenses, net of
reinsurance 15,642 21,140 29,247 48,659
Policy acquisition and other underwriting
expenses 7,552 13,716 14,505 24,474
Interest expense 237 285 477 535
---------- ---------- --------- ----------
Total expenses 23,431 35,141 44,229 73,668
---------- ---------- --------- ----------
Income (loss) before income tax expense 2,671 (675) 4,123 (4,845)
Income tax expense (benefit) 815 (119) 1,280 (1,537)
---------- ---------- --------- ----------
Net income (loss) $ 1,856 $ (556) $ 2,843 $ (3,308)
========== ========== ========= ==========
Net income (loss) available for common stockholders (1) $ 1,831 $ (580) $ 2,794 $ (3,357)
========== ========== ========= ==========
Weighted average number of common shares
outstanding 7,053,998 7,049,898 7,054,498 7,050,098
========== ========== ========= ==========
Net income (loss) per share of common stock (1) $ 0.26 $ (0.08) $ 0.40 $ (0.48)
</TABLE>
(1) After deduction of preferred dividends
The accompanying notes are an integral part of these financial statements.
4
<PAGE> 5
AMERICAN EAGLE GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED
(UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
June 30, June 30,
1995 1996
-------- --------
<S> <C> <C>
Cash and cash equivalents derived from:
Total provided by (used in) operating activities $ 544 $(22,637)
Investing activities-
Net proceeds (purchases) of short-term investments 9,748 26,688
Purchases of fixed income securities (13,297) (22,677)
Proceeds from sales of fixed income securities 2,969 16,468
Proceeds from maturities of fixed income securities 2,249 1,710
Purchases of property and equipment (624) (849)
-------- --------
Total provided by investing activities 1,045 21,340
-------- --------
Financing activities-
Dividends paid on Series B and C Cumulative Preferred Stock (49) (49)
Dividends paid on common stock (423) (564)
Proceeds of note payable 2,000 2,000
Increase in common stock outstanding 16 -----
-------- --------
Total provided by financing activities 1,544 1,387
-------- --------
Net change in cash and cash equivalents 3,133 90
Cash and cash equivalents, beginning of period 1,530 2,922
-------- --------
Cash and cash equivalents, end of period $ 4,663 $ 3,012
======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
<PAGE> 6
AMERICAN EAGLE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIODS ENDED
JUNE 30, 1995 AND 1996
(UNAUDITED)
BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements of
the American Eagle Group, Inc. (the "Company") and subsidiaries for the
periods ended June 30, 1996 and 1995 have been prepared in accordance with
the instructions to the Form 10-Q and 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 only normal
recurring accruals) considered necessary for a fair presentation of the
results for the interim period have been included. Operating results for
the periods ended June 30, 1996 are not necessarily indicative of the
results that may be expected for the year ending December 31, 1996. These
statements should be read in conjunction with the financial statements and
notes thereto for the year ended December 31, 1995 included in the
Company's Annual Report.
6
<PAGE> 7
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
SECOND QUARTER OF 1996 COMPARED TO THE SECOND QUARTER OF 1995
Gross Premiums Produced
Gross premiums produced for the second quarter of 1996 compared to the
second quarter of 1995 were as follows (in millions):
<TABLE>
<CAPTION>
SECOND QUARTER
1995 1996
----- -----
<S> <C> <C>
Gross premiums produced $49.1 $41.3
For other companies (4.2) (3.4)
Assumed from other companies 1.9 2.7
----- -----
Gross premiums written 46.8 40.6
Ceded premiums (14.6) (12.8)
----- -----
Net premiums written $32.2 $27.8
===== =====
</TABLE>
Gross premiums produced decreased 15.8% to $41.3 million for the second
quarter of 1996 from $49.1 million in the second quarter of 1995. Of this
decrease, 10.9% was in the Aviation Division and 7.6% was in the Property &
Casualty Division (the "P&C Division"), while the Marine Division had an
increase of 2.7%. The decreases in the Aviation and P&C Divisions resulted
primarily from actions taken during 1995 and the first six months of 1996
to eliminate unprofitable segments of the operations. The increase in the
Marine Division is due to an increase in policies in force.
The gross premiums produced for other companies decreased 18.2% to $3.4
million in the second quarter of 1996 from $4.2 million in the second
quarter of 1995. This decrease is primarily a result of a decline in the
airport segment in which certain coverages are placed with other companies
in the excess and surplus lines market.
The gross premiums assumed from other companies increased 39.3% to $2.7
million in the second quarter of 1996 from $1.9 million in the second
quarter of 1995 primarily as a result of increased use of other companies'
policies, where insureds require policies issued by companies with an A.M.
Best rating of "A-" or better.
Gross premiums written decreased 13.4% to $40.6 million in the second
quarter of 1996 from $46.8 million in the second quarter of 1995 as a
result of the decrease in gross premiums produced.
Ceded premiums decreased 12.3% to $12.8 million in the second quarter of
1996, compared to $14.6 million in the second quarter of 1995. This
decrease is primarily a result of a
7
<PAGE> 8
decline in business written in the airport segment that is reinsured with
other companies under a facultative reinsurance agreement, and a decrease
in ceded excess of loss reinsurance premiums for both Aviation and P&C
Divisions.
Net premiums written decreased 13.8% to $27.8 million in the second quarter
of 1996, compared to $32.2 million in the second quarter of 1995.
Revenues
Earned premiums, net of reinsurance, increased 36.2% to $33.5 million in
the second quarter of 1996 from $24.6 million in the second quarter of
1995. Of this increase, 26.6% was related to the Aviation Division, 3.9%
to the P&C Division, and 5.7% to the Marine Division. The growth in earned
premiums, net of reinsurance, in comparison to the decline in net premiums
written, is due to a higher level of written premiums in earlier quarters,
which is now becoming earned premiums.
Agency operations, net, decreased to a minimal loss in the second quarter
of 1996 from a minimal gain in the second quarter of 1995.
Investment income, net, decreased 28.8% to $1.0 million in the second
quarter of 1996 from $1.5 million in the second quarter of 1995. The net
tax-effected investment yield on average invested assets for the second
quarter of 1996 decreased to 5.2% from 6.3% in the comparable quarter of
1995. This decrease is the result of the general market decline in
investment yields for fixed maturities. Average invested assets decreased
$16.8 million in the second quarter of 1996, compared to the second quarter
of 1995, primarily as a result of cash flow used in operating activities,
as discussed below.
Realized investment gains (losses), net, were insignificant in the second
quarter of 1996 and 1995.
Operating Expenses
Losses and loss adjustment expenses, net of reinsurance, were 63.1% of
earned premiums, net of reinsurance, in the second quarter of 1996,
compared to 63.6% in the second quarter of 1995. The second quarter of
1996 results were largely driven by the continued improvement in the
underwriting results of the Aviation Division as a result of previous
underwriting actions in the under-performing segments of the commercial
aviation line of business. Second quarter results were negatively affected
by a continued high level of reported claims for the transportation segment
of the P&C Division. The Aviation Division loss ratio decreased 9.7
percentage points to 53.3% in the second quarter 1996, from 63.0% in the
second quarter of 1995, and the P&C Division loss ratio increased 22.5
percentage points to 88.1% in the second quarter of 1996, from 65.6% in the
second quarter of 1995. The Marine Division loss ratio in the second
quarter of 1996 was 47.2%.
8
<PAGE> 9
Policy acquisition and other underwriting expenses were 40.9% of earned
premiums in the second quarter of 1996 and 30.7% of earned premiums in the
second quarter of 1995. The increase in the expense ratio in the second
quarter of 1996 results from the increased amortization of previously
deferred acquisition costs due to the decline in the level of net premiums
written in the second quarter of 1996 compared to the second quarter of
1995.
The Company's combined ratio increased 9.7 percentage points to 104.0% in
the second quarter of 1996 from 94.3% in the second quarter of 1995 as a
result of the factors discussed above. A combined ratio below 100%
generally indicates profitable underwriting prior to the consideration of
investment income.
Interest expense increased 20.3% to $0.29 million in the second quarter of
1996, from $0.24 million in the second quarter of 1995, due primarily to an
increase in the Company's note payable of $2.0 million.
Income
The income tax benefit was 17.6% of loss before tax benefit in the second
quarter of 1996 and income tax expense was 30.5% of income before tax
expense in the second quarter of 1995. The decrease in the effective tax
rate in the second quarter of 1996 is due, in part, to adjusting the
year-end estimated tax provision to equal the actual filed 1995 federal
income tax return.
The second quarter of 1996 net loss was $0.6 million, as compared to net
income of $1.9 million in the second quarter of 1995.
Net income (loss) available for common stockholders in the second quarter
of 1996 was ($0.6) million, or ($0.08) per share, as compared to net income
of $1.8 million, or $0.26 per share, in the second quarter of 1995.
9
<PAGE> 10
FIRST SIX MONTHS OF 1996 COMPARED TO THE FIRST SIX MONTHS OF 1995
Gross Premiums Produced
Gross premiums produced for the first six months of 1996 as compared to the
first six months of 1995 were as follows (in millions):
<TABLE>
<CAPTION>
FIRST SIX MONTHS
1995 1996
----- -----
<S> <C> <C>
Gross premiums produced $ 90.7 $ 83.7
For other companies (7.6) (6.0)
Assumed from other companies 3.1 4.2
------ ------
Gross premiums written 86.2 81.9
Ceded premiums (27.7) (21.5)
------ ------
Net premiums written $ 58.5 $ 60.4
====== ======
</TABLE>
Gross premiums produced decreased 7.7% to $83.7 million for the first six
months of 1996 from $90.7 million in the first six months of 1995. Of
this decrease, 5.3% was in the Aviation Division, and 5.0% was in the P&C
Division. The Marine Division gross premium produced increased 2.6%. The
decreases in the Aviation and P&C Divisions' gross premiums produced
result primarily from actions taken during 1995 and the first six months
of 1996 to eliminate unprofitable segments of the operations. The
increase in the Marine Division is due to an increase in policies in
force.
The gross premiums produced for other companies decreased 20.4% to $6.0
million in the first six months of 1996 from $7.6 million in the first six
months of 1995. This decrease is primarily a result of a decline in the
airport segment, in which certain coverages are placed with other
companies in the excess and surplus lines market.
The gross premiums assumed from other companies increased 34.7% to $4.2
million in the first six months of 1996 from $3.1 million in the first six
months of 1995 primarily as a result of the increased use of other
companies' policies, where insureds require policies issued by companies
with an A.M. Best rating of "A-" or better.
Gross premiums written decreased 5.1% to $81.9 million in the first six
months of 1996 from $86.3 million in the first six months of 1995
primarily as a result of the decrease in gross premiums produced.
Ceded premiums decreased 22.6% to $21.5 million in the first six months of
1996, compared to $27.8 million in the first six months of 1995. This
decrease is a result of a decline in business written in the airport
segment that is reinsured with other companies under a facultative
reinsurance agreement and a decrease in ceded excess of loss reinsurance
premiums for both Aviation and P&C Divisions.
10
<PAGE> 11
Net premiums written increased 3.3% to $60.4 million in the first six
months of 1996, compared to $58.5 million in the first six months of 1995,
as a result of the decrease in ceded premiums.
Revenues
Earned premiums, net of reinsurance, increased 46.6% to $66.3 million in
the first six months of 1996 from $45.2 million in the first six months of
1995. Of this increase, 37.1% was related to the Aviation Division, 3.4%
to the Marine Division, and 6.1% to the P&C Division. The growth in earned
premiums, net of reinsurance, in comparison to the decline in net written
premiums, is due to a higher level of written premiums in earlier quarters,
which is now becoming earned premiums.
Agency operations, net, decreased 118.2% to a minimal loss in the first six
months of 1996 from a gain of $0.3 million in the first six months of 1995.
Investment income, net, decreased 12.9% to $2.4 million in the first six
months of 1996 from $2.8 million in the first six months of 1995. The net
tax-effected investment yield on average invested assets for the first six
months of 1996 decreased to 5.7% from 6.1% for the comparable period in
1995. This decrease was a result of a decrease of $6.8 million in average
invested assets in the first six months of 1996 compared to the first six
months of 1995 and a general market decline in investment yields for fixed
maturities.
Realized investment gains, net, were insignificant in the first six months
of 1996 and 1995.
Operating Expenses
Losses and loss adjustment expenses, net of reinsurance, were 73.4% of
earned premiums, net of reinsurance, in the first six months of 1996,
compared to 64.6% in the first six months of 1995. The Aviation Division
loss ratio decreased 2.0 percentage points to 62.5% in the first six months
1996, from 64.5% in the first six months of 1995, and the P&C Division loss
ratio increased 37.9 percentage points to 103.3% in the first six months of
1996 from 65.4% in the first six months of 1995. The increase in the P&C
Division loss ratio is driven by a high level of reported claims for the
transportation segment of the P&C Division. The Marine Division loss ratio
for the first six months of 1996 was 47.9%.
Policy acquisition and other underwriting expenses were 36.9% of earned
premiums in the first six months of 1996 and 32.1% of earned premiums in
the first six months of 1995. The increase in the expense ratio in the
first six months of 1996 results from the increased amortization of
previously deferred policy acquisition costs due to the decline in the
level of net premiums written in the first six months of 1996, compared to
1995.
11
<PAGE> 12
The Company's combined ratio increased 13.6 percentage points to 110.3% in
the first six months of 1996 from 96.7% in the first six months of 1995 as
a result of the factors discussed above. A combined ratio below 100%
generally indicates profitable underwriting prior to the consideration of
investment income.
Interest expense increased 12.2% to $0.54 million in the first six months
of 1996 from $0.48 million in the first six months of 1995 due primarily
to an increase in the Company's note payable of $2.0 million.
Income
The income tax benefit was 31.7% of loss before tax benefit in the first
six months of 1996, and income tax expense was 31.0% of income before tax
expense in the first six months of 1995.
Net loss for the first six months of 1996 was $3.3 million, compared to net
income of $2.8 million in the first six months of 1995. The decrease
resulted from the factors discussed above. Operating income (loss), defined
as net income (loss) less net realized investment gains or losses, net of
the associated income tax effect, was a loss of $3.4 million in the first
six months of 1996, compared to income of $2.8 million in the first six
months of 1995.
Net income (loss) available for common stockholders was ($3.4) million, or
($0.48) per share in the first six months of 1996, compared to $2.8
million, or $0.40 per share, in the first six months of 1995.
LIQUIDITY AND CAPITAL RESOURCES
The Company's consolidated cash flow used in operations was $22.6 million
in the first six months of 1996, compared to cash flow provided by
operations of $0.5 million in the first six months of 1995. The funds used
in the first six months of 1996 relate to the settlement of a large claim
incurred in 1995 and the payment of retrospectively rated reinsurance
premiums.
12
<PAGE> 13
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
See Index to Exhibits attached hereto and incorporated herein
by reference.
(b) Reports on Form 8-K
None.
13
<PAGE> 14
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.
AMERICAN EAGLE GROUP, INC.
Date: August 12, 1996 By: /s/ M. Philip Guthrie
- ---------------------- ---------------------------------------------
M. Philip Guthrie, Chairman of the Board and
Chief Executive Officer
Date: August 12, 1996 By: /s/ Richard M. Kurz
- ---------------------- ---------------------------------------------
Richard M. Kurz, Senior Vice President and
Chief Financial Officer (Principal Financial and
Accounting Officer)
14
<PAGE> 15
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT
- ------ -------
<S> <C> <C>
4.1 -- Specimen Certificate for shares of Common Stock, $.01 par value, of American Eagle (Previously
filed on May 11, 1994 with Registrant's Amendment No. 2 to Registration Statement on Form S-1,
File No. 33-75490, and incorporated herein by reference).
4.2 -- Registration Rights Agreement, dated as of March 21, 1995, by and among American Eagle, Mason
Best and Nelson Hurst (Previously filed on March 29, 1994 with Registrant's Amendment No. 1 to
Registration Statement on Form S-1, File No. 33-75490, and incorporated herein by reference).
10.1 -- American Eagle Group, Inc. 1991 Non-Qualified Stock Option Plan (Previously filed on February 18,
1994 with Registrant's Registration Statement on Form S-1, File No. 33-75490, and incorporated
herein by reference).
10.2 -- Amended and Restated P&C Stock Option Plan - Wise (Previously filed on February 18, 1994 with
Registrant's Registration Statement on Form S-1, File No. 33-75490, and incorporated herein by
reference).
10.3 -- Amended and Restated P&C Stock Option Plan - Hill (Previously filed on February 18, 1994 with
Registrant's Registration Statement on Form S-1, File No. 33-75490, and incorporated herein by
reference).
10.4 -- Amended and Restated P&C Stock Option Plan - Perkins (Previously filed on February 18, 1994 with
Registrant's Registration Statement on Form S-1, File No. 33-75490, and incorporated herein by
reference).
10.5 -- Amendment No. 1 to Amended and Restated P&C Stock Option Plan - Perkins, dated as of August 16,
1994, between American Eagle and J.B. Perkins (Previously filed on March 30, 1995 with
Registrant's Annual Report on Form 10-K, File No. 1-12922, and incorporated herein by reference).
10.6 -- American Eagle Group, Inc. 1994 Stock Incentive Plan (Previously filed on March 29, 1994 with
Registrant's Amendment No. 1 to Registration Statement on Form S-1, File No. 33-75490, and
incorporated herein by reference).
10.7 -- American Eagle Group, Inc. 1994 Directors' Stock Option Plan, as amended. (Previously filed on
November 11, 1995 with Registrant's Quarterly Report on Form 10-Q, File No. 1-12922, and
incorporated herein by reference.)
10.8 -- American Eagle Group, Inc. 1994 Employee Restricted Stock Plan (Previously filed on March 29,
1994 with Registrant's Amendment No. 1 to Registration Statement on Form S-1, File No. 33-75490,
and incorporated herein by reference).
10.9 -- American Eagle Group, Inc. Employee Profit Sharing and Savings Plan (Previously filed on February
18, 1994 with Registrant's Registration Statement on Form S-1, File No. 33-75490, and
incorporated herein by reference).
10.10 -- American Eagle Group, Inc. Employee Stock Purchase Plan (Previously filed on March 30, 1995 with
Registrant's Annual Report on Form 10-K, File No. 1-12922, and incorporated herein by reference.
10.11 -- Amended and Restated Credit Agreement dated as of December 29, 1994 (the "Restated Credit
Agreement"), among American Eagle, the Lenders and The First National Bank of Chicago, as Agent
(Previously filed on March 30, 1995 with Registrant's Annual Report on Form 10-K, File No. 1-
12922, and incorporated herein by reference).
</TABLE>
15
<PAGE> 16
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT
- ------ -------
<S> <C> <C>
10.12 -- Amendment to the Restated Credit Agreement dated as of February 23, 1996 by and between American
Eagle and The First National Bank of Chicago, individually and as agent. (Previously filed on
March 28, 1996 with Registrant's Annual Report on Form 10-K, File No. 1-12922, and incorporated
herein by reference).
10.13 -- Employment Agreement, dated as of December 31, 1994, between American Eagle and M. Philip
Guthrie (Previously filed on March 30, 1995 with Registrant's Annual Report on Form 10-K, File
No. 1-12922, and incorporated herein by reference).
10.14 -- Employment Agreement, dated as of December 31, 1994, between American Eagle and George F. Cass
(Previously filed on March 30, 1995 with Registrant's Annual Report on Form 10-K, File No. 1-
12922, and incorporated herein by reference).
10.15 -- Employment Agreement, dated as of December 31, 1994, between AEIC and George C. Hill (Previously
filed on March 30, 1995 with Registrant's Annual Report on Form 10-K, File No. 1-12922, and
incorporated herein by reference).
10.16 -- Employment Agreement, dated as of December 31, 1994, between AEIC and David O. Daniels
(Previously filed on March 30, 1995 with Registrant's Annual Report on Form 10-K, File No. 1-
12922, and incorporated herein by reference).
10.17 -- Employment Agreement, dated as of December 31, 1994, between American Eagle and Frederick G.
Anderson (Previously filed on March 30, 1995 with Registrant's Annual Report on Form 10-K, File
No. 1-12922, and incorporated herein by reference).
10.18 -- Employment Agreement, dated as of December 31, 1994, between American Eagle and Richard M. Kurz
(Previously filed on March 30, 1995 with Registrant's Annual Report on Form 10-K, File No. 1-
12922, and incorporated herein by reference).
10.19 -- Employment Agreement, dated as of December 31, 1994, between American Eagle and Allen N. Walton
III (Previously filed on March 30, 1995 with Registrant's Annual Report on Form 10-K, File No. 1-
12922, and incorporated herein by reference).
10.20 -- Consulting Agreement, dated as of December 24, 1992, between American Eagle and Don D. Hutson
(Previously filed on February 18, 1994 with Registrant's Registration Statement on Form S-1, File
No. 33-75490, and incorporated herein by reference).
10.21 -- Agreement dated as of February 15, 1991, between Luther King Capital Management Corporation and
AEIC (Previously filed on February 18, 1994 with Registrant's Registration Statement on Form S-1,
File No. 33-75490, and incorporated herein by reference).
10.22 -- Investment Management Agreement, dated as of June 17, 1994, between American Eagle Insurance
Company and Aon Advisors, Inc. (Previously filed on March 30, 1995 with Registrant's Annual
Report on Form 10-K, File No. 1-12922, and incorporated herein by reference).
10.23 -- Agreement for the Purchase of all of the Outstanding Capital Stock of Aviation Office of America,
Inc. and American Eagle Insurance Company dated as of May 7, 1986, among Folmar Corporation, Crum
and Forster, Inc. and United States Fire Insurance Company (the "Purchase Agreement") (Previously
filed on March 29, 1994 with Registrant's Amendment No. 1 to Registration Statement on Form S-1,
File No. 33-75490, and incorporated herein by reference).
</TABLE>
16
<PAGE> 17
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT
- ------ -------
<S> <C> <C>
10.24 -- Amendment to Purchase Agreement dated as of June 6, 1987 (Previously filed on March 29, 1994 with
Registrant's Amendment No. 1 to Registration Statement on Form S-1, File No. 33-75490, and
incorporated herein by reference).
10.25 -- Amendment to Purchase Agreement dated as of December 11, 1987 (Previously filed on March 29, 1994
with Registrant's Amendment No. 1 to Registration Statement on Form S-1, File No. 33-75490, and
incorporated herein by reference).
10.26 -- First through Fifth General Aviation Liability Excess of Loss Reinsurance Agreement AR #4222 1994
Final Placement Slip (Previously filed on March 30, 1995 with Registrant's Annual Report on Form
10-K, File No. 1-12922, and incorporated herein by reference).
10.27 -- Casualty First and Second Excess of Loss Reinsurance Agreement AR #4038-94 1994 Final Placement
Slip (Previously filed on March 30, 1995 with Registrant's Annual Report on Form 10-K, File No.
1-12922, and incorporated herein by reference).
10.28 -- Special Underlying General Aviation Liability Excess of Loss Reinsurance Agreement AR #4221 1994
Final Placement Slip (Previously filed on March 30, 1995 with Registrant's Annual Report on Form
10-K, File No. 1-12922, and incorporated herein by reference).
10.29 -- General Aviation Hull Special Underlying Excess of Loss Reinsurance Agreement AR #4227 1994 Final
Placement Slip (Previously filed on March 30, 1995 with Registrant's Annual Report on Form 10-K,
File No. 1-12922, and incorporated herein by reference).
10.30 -- First Through Fifth General Aviation Liability Excess of Loss Reinsurance Agreement AR #4222 1995
Final Placement Slip (Previously filed on March 28, 1996 with Registrant's Annual Report on Form
10-K, File No. 1-12922, and incorporated herein by reference).
10.31 -- Special Underlying General Aviation Liability Excess of Loss Reinsurance Agreement AR #4221 1995
Final Placement Slip (Previously filed on March 28, 1996 with Registrant's Annual Report on Form
10-K, File No. 1-12922, and incorporated herein by reference).
10.32 -- General Aviation Hull Special Underlying Excess of Loss Reinsurance Agreement AR #4227 1995 Final
Placement Slip (Previously filed on March 28, 1996 with Registrant's Annual Report on Form 10-K,
File No. 1-12922, and incorporated herein by reference).
10.33 -- First and Second Property Excess of Loss Reinsurance Agreement--ARA #4039-91 (subject to a
request for confidential treatment) (Previously filed on March 28, 1996 with Registrant's Annual
Report on Form 10-K, File No. 1-12922, and incorporated herein by reference).
10.34 -- First and Second Casualty Excess of Loss Reinsurance Agreement--ARA #4038-91 (subject to a
request for confidential treatment) (Previously filed on March 28, 1996 with Registrant's Annual
Report on Form 10-K, File No. 1-12922, and incorporated herein by reference).
</TABLE>
17
<PAGE> 18
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT
- ------ -------
<S> <C> <C>
10.35 -- Casualty First and Second Excess of Loss Reinsurance Agreement--AR #4038-95 (subject to a request
for confidential treatment) (Previously filed on March 28, 1996 with Registrant's Annual Report
on Form 10-K, File No. 1-12922, and incorporated herein by reference).
10.36 -- First and Second Casualty Excess of Loss Reinsurance Agreement--AR #4038-95 (subject to a request
for confidential treatment) (Previously filed on March 28, 1996 with Registrant's Annual Report
on Form 10-K, File No. 1-12922, and incorporated herein by reference).
10.37 -- General Aviation Hill Special Underlying Excess of Loss Reinsurance Agreement--AR #4227-94
(subject to a request for confidential treatment) (Previously filed on March 28, 1996 with
Registrant's Annual Report on Form 10-K, File No. 1-12922, and incorporated herein by reference).
10.38 -- Special Underlying General Aviation Liability Excess of Loss Reinsurance Agreement--AR #4221-94
(subject to a request for confidential treatment) (Previously filed on March 28, 1996 with
Registrant's Annual Report on Form 10-K, File No. 1-12922, and incorporated herein by reference).
10.39 -- First Through Fifth General Aviation Liability Excess of Loss Reinsurance Agreement--AR #4222-94
(subject to a request for confidential treatment) (Previously filed on March 28, 1996 with
Registrant's Annual Report on Form 10-K, File No. 1-12922, and incorporated herein by reference).
10.40 -- Amendment to the Restated Credit Agreement, as amended, dated as of March 18, 1996, by and
between American Eagle and The First National Bank of Chicago, individually and as Agent
(Previously filed on March 28, 1996 with Registrant's Annual Report on Form 10-K, File No. 1-
12922, and incorporated herein by reference).
10.41 -- Amendment to the Restated Credit Agreement, as amended, dated as of May 3, 1996,
by and between American Eagle and The First National Bank of Chicago, individually and as Agent
(Previously filed on May 10, 1996 with Registrant's Report on Form 10-Q for the period ended
March 31, 1996, File No. 1-12922, and incorporated herein by reference).
27 -- Financial Data Schedule.
</TABLE>
18
<TABLE> <S> <C>
<ARTICLE> 7
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM 6/30/95,
12/31/95 AND 6/30/96 CONDENSED CONSOLIDATED BALANCE SHEETS AND CONDENSED
CONSOLIDATED STATEMENTS OF INCOME AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH 6/30/95, 12/31/95 AND 6/30/96 FORM 10Q FILINGS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> 6-MOS 6-MOS
<FISCAL-YEAR-END> DEC-31-1996 DEC-31-1995
<PERIOD-START> JAN-01-1996 JAN-01-1995
<PERIOD-END> JUN-30-1996 JUN-30-1995
<DEBT-HELD-FOR-SALE> 45,899 59,747
<DEBT-CARRYING-VALUE> 28,756 29,462
<DEBT-MARKET-VALUE> 28,294 28,896
<EQUITIES> 0 0
<MORTGAGE> 0 0
<REAL-ESTATE> 0 0
<TOTAL-INVEST> 74,655 89,209
<CASH> 7,923 14,295
<RECOVER-REINSURE> 95,904 131,383
<DEFERRED-ACQUISITION> 14,701 17,717
<TOTAL-ASSETS> 280,606 345,879
<POLICY-LOSSES> 129,800 142,489
<UNEARNED-PREMIUMS> 69,865 74,450
<POLICY-OTHER> 3,689 8,961
<POLICY-HOLDER-FUNDS> 1,359 24,127
<NOTES-PAYABLE> 13,250 11,250
<COMMON> 71 71
1,629 1,629
0 0
<OTHER-SE> 53,395 69,248
<TOTAL-LIABILITY-AND-EQUITY> 280,606 345,879
66,331 45,244
<INVESTMENT-INCOME> 2,447 2,810
<INVESTMENT-GAINS> 98 6
<OTHER-INCOME> (53) 292
<BENEFITS> 48,659 29,247
<UNDERWRITING-AMORTIZATION> 24,474 14,505
<UNDERWRITING-OTHER> 24,002 19,013
<INCOME-PRETAX> (4,845) 4,123
<INCOME-TAX> (1,537) 1,280
<INCOME-CONTINUING> (3,308) 2,843
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (3,308) 2,843
<EPS-PRIMARY> (0.48) 0.40
<EPS-DILUTED> (0.48) 0.40
<RESERVE-OPEN> 57,852 50,451
<PROVISION-CURRENT> 26,018 11,553
<PROVISION-PRIOR> 30,776 23,473
<PAYMENTS-CURRENT> 16,258 12,386
<PAYMENTS-PRIOR> 33,460 32,286
<RESERVE-CLOSE> 56,794 35,026
<CUMULATIVE-DEFICIENCY> (6,384) (5,308)
</TABLE>
