As in effect
3/1/61
FORM 10K/A
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
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AMENDMENT TO APPLICATION OR REPORT
Filed Pursuant to Sections 12, 13, or 15 (d) of
THE SECURITIES EXCHANGE ACT OF 1934
OLD REPUBLIC INTERNATIONAL CORPORATION
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(Exact name of registrant as specified in charter)
AMENDMENT NO. 5
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The undersigned registrant hereby amends the following items, financial
statements, exhibits or other portions of its ANNUAL REPORT FOR 2003 on
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Form 10-K as set forth in the pages attached hereto: (List all such items,
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financial statements, exhibits or other portions amended)
FORM 11-K
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this amendment to be signed on its behalf by the
undersigned, thereunto duly authorized.
OLD REPUBLIC INTERNATIONAL CORPORATION
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(Registrant)
Date: May 26, 2004 By: /s/ John S. Adams
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(Signature)
John S. Adams
Senior Vice President and
Chief Financial Officer
Total Pages: 14
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 11-K
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ANNUAL REPORT
Pursuant to Section 15(d) of the
Securities Exchange Act of 1934
For The Fiscal Year Ended December 31, 2003
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REPUBLIC MORTGAGE INSURANCE COMPANY AND AFFILIATED COMPANIES
PROFIT SHARING PLAN
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OLD REPUBLIC INTERNATIONAL CORPORATION
307 NORTH MICHIGAN AVENUE
CHICAGO, ILLINOIS 60601
SIGNATURE
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Pursuant to the requirements of the Securities Exchange Act of 1934, the
Administration Committee has duly caused this Annual Report to be signed on
behalf of the undersigned, thereunto duly authorized.
THE REPUBLIC MORTGAGE INSURANCE COMPANY AND
AFFILIATED COMPANIES PROFIT SHARING PLAN
(Registrant)
By: /s/ John Gerke
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John Gerke, Member of the Administration Committee
By: /s/ Donna Ball
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Donna Ball, Member of the Administration Committee
Date: April 22, 2004
The Republic Mortgage Insurance Company
and Affiliated Companies
Profit Sharing Plan
Financial Statements and
Supplemental Schedule
December 31, 2003 and 2002
Tax Identification Number: 56-1031043
The Republic Mortgage Insurance Company and Affiliated Companies
Profit Sharing Plan
Index
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Pages
Report of Independent Auditors..............................................1
Financial Statements
Statements of Net Assets Available for Benefits
December 31, 2003 and 2002..................................................2
Statement of Changes in Net Assets Available for Benefits
Year Ended December 31, 2003................................................3
Notes to Financial Statements..............................................4-7
Supplemental Schedule
Schedule H, line 4i - Schedule of Assets (Held at End of Year)
Year Ended December 31, 2003................................................8
Report of Independent Auditors
To the Participants and Administrator of
The Republic Mortgage Insurance Company and Affiliated Companies
Profit Sharing Plan
In our opinion, the accompanying statements of net assets available for benefits
and the related statement of changes in net assets available for benefits
present fairly, in all material respects, the net assets available for benefits
of The Republic Mortgage Insurance Company and Affiliated Companies Profit
Sharing Plan (the "Plan") at December 31, 2003 and 2002, and the changes in net
assets available for benefits for the year ended December 31, 2003 in conformity
with accounting principles generally accepted in the United States of America.
These financial statements are the responsibility of the Plan's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these statements in accordance with
auditing standards generally accepted in the United States of America, which
require that we plan and perform the audits to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The Supplemental Schedule H, line 4i -
Schedule of Assets (Held at End of Year) is presented for the purpose of
additional analysis and is not a required part of the basic financial statements
but is supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. This Supplemental Schedule is the responsibility of the
Plan's management. The Supplemental Schedule has been subjected to the auditing
procedures applied in the audits of the basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
/s/ PricewaterhouseCoopers LLP
April 22, 2004
Charlotte, North Carolina
1
The Republic Mortgage Insurance Company and Affiliated Companies
Profit Sharing Plan
Statements of Net Assets Available for Benefits
December 31, 2003 and 2002
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2003 2002
Assets
Investments, at fair value
Insurance separate accounts
Domestic equity $ 9,087,239 $ 5,680,843
Asset allocation 2,458,256 1,700,224
Fixed income 1,317,075 1,354,546
International equity 847,092 475,249
Flexible equity 436,690 138,852
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14,146,352 9,349,714
ORI common stock pooled account 5,107,879 3,902,479
Participant loans 795,822 602,882
Insurance company guaranteed intrest fund,
at contract value 21,972,863 17,924,476
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Total investments 42,022,916 31,779,551
Employer contributions receivable 3,921,203 3,757,895
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Total assets 45,944,119 35,537,446
Liabilities
Refund of excess participant contributions 142,684 162,700
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Net assets available for benefits $ 45,801,435 $ 35,374,746
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The accompanying notes are an integral part of these financial statements.
2
The Republic Mortgage Insurance Company and Affiliated Companies
Profit Sharing Plan
Statement of Changes in Net Assets Available for Benefits
Year Ended December 31, 2003
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Additions to net assets attributed to
Investment income
Net appreciation in fair value of investments $ 4,918,456
Interest, guaranteed intrest fund 1,001,053
Dividends, common stock pooled account 260,491
Interest, participant loans 33,122
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Investment income 6,213,122
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Contributions
Employer 3,921,203
Participants 1,484,332
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5,405,535
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Total additions 11,618,657
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Deductions from net assets attributed to
Benefits and withdrawals 1,185,587
Administrative expenses 6,381
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Total deductions 1,191,968
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Net increase 10,426,689
Net assets available for benefits
Beginning of year 35,374,746
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End of year $ 45,801,435
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The accompanying notes are an integral part of these financial statements.
3
The Republic Mortgage Insurance Company and Affiliated Companies
Profit Sharing Plan
Notes to Financial Statements
December 31, 2003 and 2002
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1. Description of Plan
The following description of The Republic Mortgage Insurance Company and
Affiliated Companies Profit Sharing Plan (the "Plan") is a qualified
defined contribution plan covering all employees of Republic Mortgage
Insurance Company, RMIC Corporation, and Republic Mortgage Insurance
Company of North Carolina (the "Sponsor"). Employees are eligible for
coverage at the start of their employment and must elect to enroll in
the plan. The Plan is subject to the provisions of the Employee
Retirement Income Security Act of 1974 (ERISA).
See the Summary Plan Description for additional information regarding
the Plan.
Contributions
The Sponsor makes contributions to the Plan at the discretion of the
Sponsor's Board of Directors at a sum determined by the Board without
regard to current and accumulated profits for the taxable year, for
years ending with or within such Plan year. Participants may contribute
up to 25% of their compensation pre-tax and 25% after-tax for a combined
maximum of 50% of compensation any Plan year. Contributions are subject
to certain limitations as prescribed by the IRS. Excess contributions to
be returned to participants based on qualification testing totaled
$142,684 and $162,700 for the years ended December 31, 2003 and 2002,
respectively.
Vesting
Participant's account balances provided by Sponsor contributions and
related allocated earnings become 40% vested after one year of service.
Vesting percentages increase by 10% for each additional year, with full
vesting after seven years of service.
Account balances provided by participant contributions and allocated
Plan earnings are always fully vested.
Participant Accounts
A separate account balance is maintained for each participant and is
credited with participant contributions and allocations of Sponsor
contributions, Plan earnings, and forfeitures of terminated
participants' nonvested accounts. Allocations of Plan earnings are based
on participants' daily account balances. Sponsor contributions and
forfeitures are allocated based on annual compensation of participants.
Unallocated forfeitures totalled $465,175 at December 31, 2003.
Payment of Benefits
In the event of retirement, disability, or death, accumulated benefits
become vested and are distributed to participants or designated
beneficiaries by lump-sum payment or through various annuity options.
In the event of termination of employment, participants have the option
of receiving vested accumulated benefits through lump-sum distributions,
leaving the vested value of their accounts in the Plan until retirement,
or transferring amounts into an individual retirement account.
Participants may withdraw their voluntary contributions at anytime.
4
The Republic Mortgage Insurance Company and Affiliated Companies
Profit Sharing Plan
Notes to Financial Statements
December 31, 2003 and 2002
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Participants may elect to take early withdrawals of employer
contributions if they have participated in the Plan for at least five
years. Such early withdrawals will not result in suspension of
allocations of Sponsor contributions.
Participant Loans
Participants may borrow a minimum of $1,000 from their accounts up to a
maximum equal to the lesser of $50,000 or 50% of their vested account
balance. Participants may have no more than two loans outstanding at one
time. Loans plus interest must be repaid within five years through
payroll deductions. These loans bear interest at the prevailing prime
rate at the loan inception date. The loans are collateralized by the
vested balance in the participant's account.
2. Summary of Significant Accounting Policies
General
The Plan prepares its financial statements under accounting principles
generally accepted in the United States of America.
Investment Valuation and Income Recognition
The Plan's guaranteed interest account is valued at contract value.
Insurance separate accounts are reported by Massachusetts Mutual Life
Insurance Company (the "Trustee") at the fair value of the underlying
investments. The pooled account invests solely in the common stock of
Old Republic International ("ORI"), the ultimate parent of the Sponsor.
The value of the pooled ORI common stock account is based on the
underlying quoted market value of the ORI common stock. Participant
loans are valued at unpaid principal balance, which approximates fair
value. Net appreciation (depreciation) in fair value of investments
includes unrealized and realized gains and losses. Interest income is
recorded on the accrual basis. Dividends are recorded on the ex-dividend
date.
Benefits and Withdrawals
Benefits and withdrawals are recorded when paid. At December 31, 2003
and 2002, there were no significant amounts due but unpaid to
participants.
Income Tax Status
The Plan obtained its latest determination letter on April 3, 1995, in
which the Internal Revenue Service stated that the Plan, as then
designed, was in compliance with the applicable requirements of the
Internal Revenue Code. The Plan has been amended since receiving the
determination letter. However, the Plan administrator believes that the
Plan is currently designed and being operated in compliance with the
applicable requirements of the Internal Revenue Code.
Use of Estimates
The presentation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported
amounts of assets, liabilities, and changes therein, and disclosure of
contingent assets and liabilities. Actual results could differ from
those estimates.
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The Republic Mortgage Insurance Company and Affiliated Companies
Profit Sharing Plan
Notes to Financial Statements
December 31, 2003 and 2002
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3. Investments
The Plan is invested in a group annuity contract with the Trustee. The
contract allows for a participant-directed investment program in
commingled subaccounts sponsored by the Trustee. Investment options
include fixed income, asset allocation, domestic equity, flexible
equity, international equity subaccount option and a guaranteed interest
fund. In addition to the investment options offered through the Trustee,
participants may also invest in a pooled account that invests solely in
common stock of the Sponsor's parent, Old Republic International.
2003 2002
Insurance company separate accounts at
fair value
Domestic equity subaccounts
Large cap value $ 2,472,478 * $ 1,808,112 *
Small cap equity 2,139,805 * 1,596,662 *
Indexed equity 2,072,008 1,453,749
Small cap growth 888,682 585,710
Mid cap value 1,261,717 152,922
Large cap growth 252,548 83,687
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9,087,238 5,680,843
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Asset allocation subaccounts
Balanced 2,458,256 * 1,700,224 *
Fixed income subaccount
Core bond 1,317,075 1,354,546
Flexible equity subaccount
Growth and income 436,690 138,852
International equity subaccount 847,093 475,249
ORI common stock pooled account 5,107,879 * 3,902,478 *
Participant loans 795,822 602,882
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$ 20,050,053 $ 13,855,075
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Investment at contract value
Guaranteed interest fund $ 21,972,863 * $ 17,924,476 *
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*Exceeds 5% of Plan assets at December 31, 2003 and 2002.
The net appreciation in fair value of the Plan's investments for the
year ended December 31, 2003, was $4,918,456.
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The Republic Mortgage Insurance Company and Affiliated Companies
Profit Sharing Plan
Notes to Financial Statements
December 31, 2003 and 2002
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4. Guaranteed Interest Fund
The Plan holds an investment contract with Massachusetts Mutual Life
Insurance Company. Massachusetts Mutual Life Insurance Company maintains
the contributions in a pooled account. The account is credited with
earnings on the underlying investments, charges for Plan withdrawals,
and a proportionate share of administrative expense charges by
Massachusetts Mutual Life Insurance Company. The contract is included in
the financial statements at contract value, (which represents
contributions made under the contract, plus earnings, less withdrawals
and administrative expenses) because it is considered fully
benefit-responsive. For example, participants may ordinarily direct the
withdrawal or transfer of all or a portion of their investment at
contract value. There are no reserves against contract value for credit
risk of the contract issuer or otherwise. The contract value of the
investment contract at December 31, 2003 and 2002 was $21,972,863 and
$17,924,476, respectively. The average yield and crediting rates ranged
from 4.7% and 6.00% for 2003 and 2002. The crediting rate is based on an
agreed-upon formula with the issuer, but cannot be less than 3%.
5. Related Party Transactions
Certain Plan investments are insurance separate accounts sponsored by
Massachusetts Mutual Life Insurance Company. Massachusetts Mutual Life
Insurance Company is the Trustee as defined by the Plan and, therefore,
these transactions qualify as party-in-interest transactions. Fees paid
by the Sponsor on behalf of the Plan for the investment management
services amounted to $67,118 for the year ended December 31, 2003. Other
Plan administrative expenses are also paid by the Sponsor.
6. Plan Termination
Although it has not expressed any intent to do so, the Sponsor has the
right under the Plan to discontinue its contributions at any time and to
terminate the Plan subject to the provisions of ERISA.
In the event of Plan termination, participants would become 100% vested
in their employer contributions.
7. Reconciliation to Form 5500
There are no reconciling items from these financial statements to the
Plan's Form 5500 for the year ended December 31, 2003.
7
Supplemental Schedule
Republic Mortgage Insurance Company and Affiliated Companies
Profit Sharing Plan
Schedule H, line 4i - Schedule of Assets (Held at End of Year)
December 31, 2003
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Number
of
Units Value
Insurance separate accounts
Domestic equity subaccount
Large cap value 17,562 $ 2,472,478
Small cap equity 2,539 2,139,805
Indexed equity 7,279 2,072,008
Small cap growth 6,674 888,682
Mid cap value 6,877 1,261,717
Large cap growth 1,844 252,548
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9,087,238
Asset allocation subaccount
Balanced 21,597 2,458,256
Fixed income subaccount
Core bond 1,008 1,317,075
Flexible equity subaccount
Growth and income 7,680 436,690
International equity subaccount 3,102 847,093
ORI common stock pooled account 178,838 5,107,879
Guaranteed interest fund 226,987 21,972,863
Participants loans 795,822
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$ 42,022,916
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Note: Historical cost not provided by the recordkeeper.
8