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United States Securities and Exchange Commission Washington, D.C. 20549
 FORM 10-K þ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2004  ̈ 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 0-49762 Triple-S Management Corporation Puerto Rico
(STATE OF INCORPORATION)
    
    66-0555678
(I.R.S. ID)
 1441 F.D. Roosevelt Avenue, San Juan, PR 00920 (787) 749-4949 Securities registered pursuant to Section 12(b) of the Act:None Securities registered pursuant to Section 12(g) of the Act:Common Stock, $40.00 Par Value 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 þ NO  ̈ Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is
not contained herein, and will not be contained, to the best of registrants knowledge, in
definitive proxy or information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. þ Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of
the Exchange Act).  ̈ YES þ NO The aggregate market value of common stock held by non-affiliates of the registrant as of December
31, 2004 was $356,160. * The number of shares outstanding of the registrants common stock as of March 15, 2005 was 8,904. The Articles of Incorporation of Triple-S Management Corporation (TSM) provide for redemption of
the common stock of TSM at the original amount paid by the shareholder. There is no established
public trading market for TSMs common stock. DOCUMENTS INCORPORATED BY REFERENCE Portions of the definitive Proxy Statement to be delivered to shareholders in connection with the
Annual Meeting of Shareholders to be held April 25, 2005 are incorporated by reference into Part
III of this Annual Report on Form 10-K.




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Triple-S Management Corporation FORM 10-K For The Fiscal Year Ended December 31, 2004  
 INDEX Part IItem 1.
    
    Business
    
    
    3Item 2.
    
    Properties
    
    
    10Item 3.
    
    Legal Proceedings
    
    
    11Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    
    13Part IIItem 5.
    
    Market for Registrants Common Equity, Related Stockholder Matters
    
    
    13Item 6.
    
    Selected Financial Data
    
    
    14Item 7.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    15Item 7a.
    
    Quantitative and Qualitative Disclosures about Market Risk
    
    
    30Item 8.
    
    Financial Statements and Supplementary Data
    
    
    34Item 9.
    
    Changes in and Disagreements with Accountants on Accounting and Financial Disclosures
    
    
    34Item 9A.
    
    Controls and Procedures
    
    
    34Item 9B.
    
    Other Information
    
    
    34Part IIIItem 10.
    
    Directors and Executive Officers of the Registrant
    
    
    34Item 11.
    
    Executive Compensation
    
    
    35Item 12.
    
    Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
    
    
    35Item 13.
    
    Certain Relationships and Related Transactions
    
    
    35Item 14.
    
    Principal Accountant Fees and Services
    
    
    35Part IVItem 15.
    
    Exhibits and Financial Statements Schedules
    
    
    35Signatures
    
    
    37EX-13.1 ANNUAL REPORTEX-31.1 CERTIFICATION OF THE PRESIDENT AND CEOEX-31.2 CERTIFICATION OF THE VP OF FINANCE & CFOEX-32.1 CERTIFICATION OF THE PRESIDENT AND CEOEX-32.2 CERTIFICATION OF THE VP OF FINANCE & CFO




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Part I 
 Item 1. Business. General Description of Business and Recent Developments Triple-S Management Corporation (TSM) is incorporated under the laws of the Commonwealth of Puerto
Rico. It is the holding company of several entities, through which it offers a wide range of
insurance products and services. These products and services are offered through the following TSM
wholly-owned subsidiaries:  
    Triple-S, Inc. (TSI), a health insurance company serving two major segments: the
Commercial Program and the Commonwealth of Puerto Rico Health Reform Program (the Reform);
    Seguros Triple-S, Inc. (STS), a property and casualty insurance company; and
    Seguros de Vida Triple-S, Inc. (SVTS), a life and disability insurance and annuity products company. TSMs insurance subsidiaries, as well as other insurers doing business in Puerto Rico, are subject
to the regulations and supervision of the Office of the Commissioner of Insurance of the
Commonwealth of Puerto Rico (the Commissioner of Insurance). The regulations and supervision of
the Commissioner of Insurance consists primarily of: the approval of policy forms and rates, when
applicable, the standards of solvency that must be met and maintained by insurers and their agents,
and the nature of and limitations on investments, deposits of securities for the benefit of
policyholders, methods of accounting, periodic examinations and the form and content of reports of
financial condition required to be filed, among others. In general, such regulations are for the
protection of policyholders rather than security holders. In addition to the insurance subsidiaries mentioned above, TSM has the following other wholly-owned
subsidiaries: Interactive Systems, Inc. (ISI) and Triple-C, Inc. (TCI). ISI provides data
processing services to Triple-S Management Corporation and its subsidiaries (the Corporation). TCI
is currently engaged as the third-party administrator in the administration of the Corporations
Reform segment described under Health Insurance  Reform Segment. It also provides healthcare
advisory services to TSI and other health-related services. All of the premiums generated by the insurance subsidiaries are generated from customers within
Puerto Rico. In addition, long-lived assets, other than financial instruments, including deferred
policy acquisition costs and deferred tax assets of the Corporation, are located in Puerto Rico. TSI was exempt through 2002 from Puerto Rico income taxes under a ruling issued by the Department
of the Treasury. On June 18, 2003, the Department of the Treasury notified the TSM and TSI that
the ruling recognizing TSIs exemption was terminated effective December 31, 2002. The termination
of the ruling responded to a new public policy set by the Department of the Treasury according to
which tax exemptions under Section 1101(6) of the Puerto Rico Internal Revenue Code of 1994 (the
P.R. Code), as amended, will not apply to corporations organized as for-profit, which is TSIs
case. On July 31, 2003, TSM and TSI executed a closing agreement with the Department of the Treasury. In
general, the terms of the closing agreement established the termination of TSIs tax exemption
effective December 31, 2002. Accordingly, effective January 1, 2003 TSI is subject to Puerto Rico
income taxes as an other-than-life insurance entity, as defined in the P.R. Code. The closing agreement also stipulates that TSM will pay taxes on TSIs accumulated statutory net
income, in accordance with the income recognition methodology applied by the Secretary of the
Treasury in the closing agreement and the ruling mentioned above. This tax ruling established the
following methodology for TSM to determine its tax liability:  
    TSIs accumulated statutory net income while operating under the tax exemption,
amounting to $132.8 million, was deemed distributed to TSM.
    For tax purposes, TSM recognized the exempt accumulated statutory net income as gross
income. On this amount, TSM recognized an income tax liability amounting to $51.8
million, which was determined by




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applying a tax rate of 39% to the exempt accumulated statutory net income deemed
distributed to TSM. This income tax liability was recorded by TSM within the current
income tax expense in the 2003 consolidated statements of earnings. Of this tax $37.0
million were paid on July 31, 2003, the date of the closing agreement, and $14.8 million on
April 15, 2004. The Corporation has not declared or distributed dividends on its common stock by virtue of an
affirmative vote of its stockholders. However, a resolution was approved by the Corporations
stockholders at the Annual Meeting held on April 27, 2003, acknowledging that the Board of
Directors (the Board) of the Corporation may declare dividends subject to the Boards determination
that in its best judgment the payment of dividends is financially and legally feasible. The amount of TSMs net income available for distribution to stockholders had excluded TSIs
results of operations for the year 2002 and prior years due to a prohibition on declaring dividends
contained in the tax exemption ruling. Since TSIs tax exemption
ended effective December 31,
2002, its earnings are now available for distribution to TSMs stockholders. Available Information TSM files annual, quarterly and current reports and other information with the Securities and
Exchange Commission (the SEC). The SEC maintains a website that contains annual, quarterly and
current reports and other information that issuers (including TSM) file electronically with the
SEC. The SECs website is www.sec.gov. The filings of TSM with the SEC are not available in its
website address (ssspr.com) since the Corporations stock has no established public trading market.
The information on our website is not incorporated by reference into this report. The website
addresses listed above are provided for the information of the reader and are not intended to be
active links. The Corporation will provide free of charge copies of its filings to any shareholder
that requests them at the following address: Triple-S Management Corporation; Office of the
Secretary of the Board; PO Box 363628; San Juan, P.R. 00936-3628. Cautionary Statement Regarding Forward-Looking Information This Annual Report on Form 10-K and other publicly available documents of TSM may include
statements that constitute forward looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995, including, among other things, statements concerning the
financial condition, results of operations and business of the Corporation. These statements are
not historical, but instead represent TSMs belief regarding future events, many of which, by their
nature, are inherently uncertain and outside of the Corporations control. These statements may
address, among other things, future financial results, strategy for growth, and market position.
It is possible that the Corporations actual results and financial condition may differ, possibly
materially, from the anticipated results and financial condition indicated in these forward-looking
statements. The factors that could cause actual results to differ from those in the
forward-looking statements are discussed throughout this Form 10-K. TSM is not under any
obligation to update or alter any forward-looking statement (and expressly disclaims any such
obligations), whether as a result of new information, future events or otherwise. Factors that may
cause actual results to differ materially from those contemplated by such forward looking
statements include, but are not limited to, rising healthcare costs, business conditions and
competition in the different insurance segments, government action and other regulatory issues. Puerto Ricos Economy Key economic indicators published by the government of Puerto Rico for 2003, latest official
figures published, suggested that the economy had begun a slow recovery during that year. The
indicators published by the government for 2003 presented a growth in the local economy of 0.3%,
after three years of economic slowdown. This recovery appears to have gained strength during 2004
but a slower pace than anticipated. In February 2004, the government forecasted that during 2004
the economy would grow by approximately 2.9% which, even when higher than the growth during 2003,
is still lower than the growth experienced prior to the 2002 recession. The governments forecast
for 2005 projects an increase in economic growth of approximately 2.7%. The sluggish performance
of the Puerto Rico economy during the last several years is due to many factors. First, the slow
growth of the United States economy in past years has had a direct impact on the Puerto Rican
economy. On a local level, the fiscal crisis of the government of Puerto Rico has led to tax
increases and the postponement of several tax-cut measures, which is not only a discouraging factor
for economic growth but also creates doubts that tend to slow investments. In addition, due to the
fiscal crisis, the government of Puerto Rico is immersed in an analysis of different alternatives
to increase its revenues, including the possibility of a tax reform. The real growth rate of the
economy in Puerto Rico will be directly affected by the expected U.S. economy growth.




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The overall growth of the U.S. economy is the most important variable exerting an impact on Puerto
Ricos economy. The U. S. government reported that its economy grew 4.4% during 2004, following a
growth of 3.0% during 2003. The economic growth experienced is the fastest since 1999. The
economists believe that the U.S. economy will keep growing at a solid pace in 2005, but at lower
rates than during the extraordinary expansion of the second half of the nineties. Even with the
apparent rebound in the economy, rising interest rates, the possibility of another terrorist
attack, continuing concerns with international politics and corporate and accounting irregularities
might damper the economic rebound in the U.S. and Puerto Rico economies. Insurance Industry The insurance industry in Puerto Rico is highly competitive and is comprised of both local and
foreign entities. The approval of the Gramm-Leach-Bliley Act of 1999, which applies to financial
institutions domiciled in Puerto Rico, has opened the insurance market to new competition since
financial institutions are permitted to enter into the insurance business. At the moment, several
banks in Puerto Rico have established subsidiaries that operate as insurance agencies. Natural disasters, which have affected Puerto Rico greatly over the past ten years, have prompted
local government to create property and casualty insurance reserves through legislation in order to
provide coverage for catastrophic events. The auto insurance market has also been affected by
government regulation, with the Compulsory Auto Insurance Law, which was passed in 1995. This law
requires vehicle owners to maintain a minimum of $3,000 in public liability insurance.
Additionally, the healthcare insurance sector has experienced significant changes in the past ten
years due to the implementation of the Reform Program (the Program). This Program provides
healthcare coverage to Puerto Ricos medically indigent population (as defined by the law),
estimated at over 1.3 million lives as of December 31, 2004. The Corporation is the leader in the insurance industry in Puerto Rico, as measured by the share of
its consolidated premiums of the total insurance premiums subscribed in Puerto Rico. The
Corporations health insurance company, TSI, is the leader in the health insurance industry. TSIs
participation in the health insurance industry, considering both the Commercial and Reform
segments, provide this subsidiary with a market share of approximately 34.8% as of December 31,
2004. The property and casualty and the life insurance subsidiaries also have important positions
in their respective markets. As of December 31, 2004, STS had a market share of approximately 7.9%
in the property and casualty insurance industry in Puerto Rico. During 2003 SVTS had a market
share of approximately 18.0% in the group life insurance market in Puerto Rico. Almost all of the Corporations business is done within Puerto Rico and as such, it is subject to
the risks associated with Puerto Ricos economy and its geographic location. The operations of the Corporation are conducted principally through three business segments, which
are identified according to the type of insurance products offered. These segments and a
description of their respective operations are as follows: Health Insurance  Commercial Segment The Corporation participates in the commercial health insurance marketplace through TSI. Total
premiums in the Commercial segment represented 55.4%, 55.0% and 54.6% of the Corporations
consolidated total premiums for the years 2004, 2003 and 2002, respectively. TSI is a Blue Cross and Blue Shield Association large-affiliated licensee, which allows TSI to use
the Blue Shield brand in Puerto Rico. TSIs participation in the health insurance industry with
the Commercial and Reform segments provide this subsidiary with a market share of approximately
34.8% as of December 31, 2004. TSI offers a variety of health insurance products, and is the
leader by market share in almost every health insurance market sector, as measured by the share of
premiums subscribed. Its market share is more than double that of its nearest competitor (Medical
Card Systems, which has a market share of approximately 15.1%) and is three times larger than that
of its second nearest competitor (Humana, which has a market share of approximately 11.6%). In
addition to the Reform segment described below, TSI offers its products to five distinct market
sectors in Puerto Rico. During 2004, TSI had the following market share within each sector:
Corporate Accounts (groups), 43.3%; Federal Employees, 99.2%; Local Government Employees, 8.1%;
Individual Accounts, 56.5%; and approximately 68.7% in the Medicare supplemental sector. Within
the Corporate Accounts sector, employer groups may choose various funding options ranging from
fully insured to self-funded financial arrangements. While self-funded clients participate in
TSIs networks, the clients bear the claims risk. Through a contract with the United States Office
of Personnel Management (OPM), TSI provides health benefits to federal employees in Puerto Rico
under the Federal Employees Health Benefits Program. This contract is subject to termination in
the event of a noncompliance not corrected to the satisfaction of OPM. TSI also provides health
insurance coverage to certain employees of the government of Puerto Rico and its instrumentalities.




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Earned premium revenue related to government of Puerto Rico health plans amounted to $67.1 million,
$65.9 million and $64.6 million for the three years ended December 31, 2004, 2003 and 2002,
respectively. In addition, TSI processes and pays claims as carrier for the Medicare  Part B
Program in Puerto Rico and the United States Virgin Islands. As a carrier for Medicare-Part B, TSI
allocates operating expenses to determine reimbursement due for services rendered in accordance
with the contract. TSIs premiums are generated from customers within Puerto Rico. The premiums for the Commercial
segment are mainly originated through TSIs internal sales force and a network of brokers and
independent agents. For purposes of segment reporting, the Reform sector is considered a different
segment and is separately analyzed. (See Health Insurance Reform Segment.) TSIs business is subject to changing federal and local legal, legislative and regulatory
environments. Some of the more significant current issues that may affect TSIs business include:  
    efforts to expand the tort liability of health plans,
    initiatives to increase healthcare regulation,
    local government initiatives for mandatory benefits,
    Medicare reform legislation. The U.S. Congress continues to debate legislation containing various patient protection
initiatives, including provisions that could expose insurance companies to economic damages, and
certain punitive damages, for making a determination denying benefits or for delaying members
receipt of benefits as well as for other coverage determinations. This situation is also an issue
at the local level. Given the political process, it is not possible to determine whether any
federal and/or local legislation or regulation will be enacted into law in 2005 or what form any
such legislation might take. The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) became law in
December 2003. With this Act the Federal government, through the Centers for Medicare and Medicaid
Services (CMS), will replace the current Title 18 fiscal intermediary (FI) and carrier contracts
with competitively procured contracts that conform to the Federal Acquisition Regulation under the
new Medicare Administrative Contractor (MAC) contracting authority. CMS has six years, between
2006 and 2011, to complete the transition of Medicare fee-for-service claims processing activities
from the FIs and carriers to the MACs. TSI is currently engaged in the analysis and evaluation
of this transition process and the effect that it may have in the existing organizational structure
as a Medicare carrier. Title II of MMA established the Medicare Advantage Program, one of the most significant elements in
the Medicare reform, which will have a significant impact in the local and national healthcare
industry. Under this Title, and subject to a certification process from CMS, private healthcare
organizations will be able to provided medical services to the Medicare program beneficiaries. On
November 2004, TSI was certified by CMS as a Medicare Advantage Preferred Provider Organization
(PPO), being at this time, the only PPO certified in Puerto Rico. TSIs Medicare Advantage
Program, known as Medicare Optimo, was successfully launched in January 2005. The Health Insurance Portability and Accountability Act of 1996 (HIPAA) authorizes the U.S.
Department of Health and Human Services (HHS) to issue standards for administrative simplification,
as well as privacy and security of medical records and other individually identifiable health
information. The regulations under the HIPAA Administrative Simplification section impose a number
of additional obligations on issuers of health insurance coverage and health benefit plan sponsors.
HIPAA Administrative Simplification section requirements apply to self-funded group plans, health
insurers and HMOs, health care clearinghouses and health care providers who transmit health
information electronically (covered entities). Regulations adopted to implement HIPAA
Administrative Simplification also require that business associates acting for or on behalf of
HIPAA-covered entities be contractually obligated to meet HIPAA standards. The regulations of the
Administrative Simplification section establish significant criminal penalties and civil sanctions
for noncompliance. HHS has released rules mandating the use of new standard formats with respect to certain health
care transactions (e.g. health care claims information, plan eligibility, referral certification
and authorization, claims status, plan enrollment and disenrollment, payment and remittance advice,
plan premium payments and coordination of benefits). HHS also has published rules requiring the
use of standardized code sets and unique identifiers by employers and providers. TSI was required
to comply with the transactions and code set standards by October 16, 2003 and with the employer
identifier rules by July 2004 and believes that it has met all relevant requirements. TSI is
required to comply with provider identifier rules by May 2007. HHS also sets standards relating to the privacy of individually identifiable health information.
In general, these regulations restrict the use and disclosure of medical records and other
individually identifiable health information held




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by health plans and other affected entities in any form, whether communicated electronically, on
paper or orally, subject only to limited exceptions. In addition, the regulations provide patients
new rights to understand and control how their health information is used. HHS has also published
security regulations designed to protect member health information from unauthorized use or
disclosure. TSI is required to comply with these security regulations by April 2005. TSI is moving forward with implementation efforts to comply with HIPAA regulations on the required
due dates. The most significant challenge facing the healthcare industry continues to be the raising trend of
healthcare costs, driven by the direct and indirect effect of legislative and regulatory actions.
Insurance companies are focused in developing programs and new strategies that consider a
combination of competitive premium pricing to sustain market share and cost reduction initiatives
to achieve a satisfactory yield in the healthcare cost inflation scenario. Recently developed
models strive for new products that essentially shift costs, and therefore the burden of decision
making to the consumer. These new products, through higher deductible and co-payments, try to
create consumers awareness and control the use of medical services. The development and
consistent self-improvement of effectively-designed benefit management programs has become more
relevant to the insurance industry profitability model. These trends have caused the health
insurance industry to adopt strategies that emphasize benefits management (such as a defined
contribution product) and to move away from more restrictive medical management strategies (such as
the pre-authorization of certain procedures). During past years, and as a result of increases in claims costs, TSI implemented procedures to
assure that all its businesses are priced with adequate premium rates that reflect the actual
claims trend of each particular business. In spite of this, TSI has achieved and exceeded
projected retention rates. The retention rate, which is the percentage of existing business
retained in the renewal process, was 95.7% in 2004, 95.0% in 2003, and 94.4% in 2002. In addition,
TSI has maintained its overall market share during the last three years. TSI has established healthcare management program strategies that seek to control claims costs
while striving to fulfill the needs of highly informed and demanding healthcare consumers. Among
these strategies is the implementation of disease and case management programs. These programs
empower consumers by providing them with education and engaging them in actively maintaining or
improving their own health. Early identification of patients and inter-program referrals are the
milestones of these programs, which provide for integrated and optimal service. Other strategies
include innovative partnerships and business alliances with other entities to provide new products
and services such as: a 24-hour telephone based triage and health information service; an employee
assistance program; and, the promotion of evidence-based protocols and patient safety programs
among our providers. TSI has also implemented a hospital concurrent review program, the goal of
which is to monitor the appropriateness of high admission rate diagnoses and high cost stays. To
stem the rising tide in pharmacy benefit costs, TSI has implemented a three-tier formulary product,
which has proved to be very effective, an exclusive provider organization and benefits design
changes. TSI expects to remain competitive in the markets in which it operates, particularly the Corporate
Groups segment. Health Insurance Reform Segment The Corporation participates in the medically indigent health insurance market through TSI. The
Health Insurance - Reform segment comprises TSIs participation in the Reform. The Reform segment
premiums represented 37.1%, 37.5%, and 37.5% of the Corporations consolidated total premiums for
the years 2004, 2003 and 2002, respectively. In 1994, the government of the Commonwealth of Puerto Rico (the government) privatized the delivery
of services to the medically indigent population in Puerto Rico, as defined by the government, by
contracting with private health insurance companies instead of providing health services directly
to such population. The government divided the Island into ten geographical areas. By December 31,
2001, the Reform had been fully implemented in each of the geographical areas. Each geographical
area is awarded to a health insurer doing business in Puerto Rico through a competitive process
requesting proposals from the industry. The government has been asking insurers to control the increase of Reform expenditures, which
represent approximately 13.0% of total government expenditures. Several measures have been
undertaken by the government to control Reform costs. Some of these measures include closer and
continuous scrutiny of participants (members) eligibility, decreasing the number of areas in order
to take advantage of economies of scale and establishing disease management programs. Mental
health benefits are currently offered to Reform beneficiaries by behavioral healthcare and mental
healthcare companies. The government is considering carving-out additional benefits provided by
the insurers. Effective July 1, 2003, the government began a pilot project in which it is
contracting directly with a provider medical group, instead of through the health insurance
companies. This project was not implemented in any of the




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areas served by TSI, but the government is not precluded from implementing a similar project in
areas served by TSI in the future. In 2002 the government redistributed the geographical areas, merging two of the existing areas with
the remaining ones, thus reducing geographical areas to eight. As a result of the reorganization
of the geographical areas, the Northwest area (previously administered by TSI) was merged into the
West area. In addition, and as a result of the same reorganization, six new municipalities were
merged into areas administered by TSI. Commencing on July 1, 2002, TSI was awarded three of the
eight resulting geographical areas: North, Metro-North and Southwest. All Reform contracts were
negotiated for a term of three years; the contracts expire on June 30, 2005. The premium rates of
each contract, however, are negotiated annually. As part of the annual premiums renegotiation
process, effective July 1, 2004 and for a twelve month-period ending June 30, 2005, premium rates
under all the contracts were increased by approximately 4.35%. The contracts include a provision,
however, that if the net income of a geographical area for any given contract year, as defined,
resulting from the provision of services under the contract exceeds 2.5% of earned premiums, the
insurance company is required to return 75.0% of the excess to the government. In case the
contract renewal process is not completed by a contracts expiration date, the contract may be
extended by the government, upon acceptance by TSI, for any subsequent period of time if deemed to
be in the best interests of the beneficiaries and the government. The terms of a contract,
including premiums, can be renegotiated if the term of the contract is extended. The Reform
contracts negotiation process was scheduled to begin during the month of February 2005. However,
on this month TSI was notified of the governments interest in extending the contracts until
December 31, 2005. TSI has agreed to this request and is in the process of determining any
contract terms, including premiums, which may need to be modified. TSI expects to participate in
the contracts bidding process and to submit proposals to renew each of the existing contracts. The contract for each geographical area is subject to termination in the event of any
non-compliance by the insurance company which is not corrected or cured to the satisfaction of the
government entity overseeing the Reform, or in the event that the government determines that there
is an insufficiency of funds to finance the Reform. This last event will require prior written
notice of at least ninety days. The loss of any or all of TSIs three Reform contracts would have
a material adverse effect on the Corporations operating results. This could include the
downsizing of certain personnel, the cancellation of lease agreements of certain premises and of
certain contracts, and severance payments, among others. Also, this would result in a significant
decrease in TSIs volume of premiums, claims and operating expenses. As of December 31, 2004, three insurance companies were participating in the Reform. The three
insurance companies and their related market shares as of June 30, 2004 were the following: TSI
(39%), Medical Card System (34%) and Humana (27%). Once the Reform was fully in place, any
participating insurance companys growth in this segment depends on winning a geographical area
serviced by another insurance company or through the restructuring of the geographical areas. The
health insurance companies that decide to participate in this business compete against each other
during the contract adjudication process. Management believes that the Corporations Reform
segments competitive strengths include TSIs highly efficient administrative structure and quality
of services. To provide services to its Reform membership, TSI established a managed care program, similar to a
Health Maintenance Organization (HMO), that integrates both the financing and delivery of services
in order to manage the accessibility, cost and quality of care. The established managed care model
includes disease and demand management as well as preventive healthcare services. Management
believes that all of these programs and TSIs effective administrative and pricing structure have
made TSI one of the most attractive participants in the Reform. TSI has established a network of Independent Practice Associations (IPA) to provide service to its
Reform beneficiaries in the Reform areas serviced by TSI. TSI believes it has designed the
economic model that best suits the IPAs and the primary care physicians (PCP). The risks covered
by the Reform policy are divided among those assumed by the IPAs and those retained by TSI. The
IPA receives an amount per capita, and it assumes the costs of services provided and referred by
its PCPs, including procedures and in-patient services not related to risks assumed by TSI. As
part of its services, TSI retains a portion of the capitation payments to the IPAs as a reserve to
provide for incurred, but not reported claims (IBNR) for services rendered by providers other than
PCPs. TSI retains the risk associated with services provided to the beneficiaries with special
healthcare needs, such as: neonatal, obstetrical, AIDS, cancer, cardiovascular, and dental
services, among others. Effective October 1, 2001, mental healthcare services were carved-out by
the government and contracted with behavioral healthcare companies. Reform contracts have generally been for twelve-month periods. Premiums need to be determined
taking into consideration future costs of services. Since premium levels for this significant
block of business are determined on a yearly basis, TSI is exposed to a significant underwriting
risk. TSI entered into a service agreement with TCI for the administration of the Reform segment
operations in exchange for a service fee that will cover TCIs operating expenses plus a profit.




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Property and Casualty Insurance Segment The Corporation participates in the property and casualty insurance market through STS. The
property and casualty insurance segment premiums represented 6.6%, 6.2% and 4.9% of the
Corporations consolidated total premiums for the years 2004, 2003 and 2002, respectively. STS is a multiple line insurer that underwrites substantially all lines of property and casualty
insurance. Its predominant lines of business are commercial multiple peril, auto physical damage,
auto liability and dwelling insurance. The segments commercial lines underwriting targets small
to medium size accounts with low to average exposures to catastrophe losses and the dwelling
portfolio targets rate stability and a very low exposure to catastrophe losses. Business is
exclusively subscribed in Puerto Rico through approximately twenty general agencies, including
Signature Insurance Agency, Inc. (SIA), and independent insurance agents and brokers. SIA is STSs
wholly-owned subsidiary and placed approximately 53%, 46% and 45% of STSs total premium volume
during 2004, 2003 and 2002. In 2004, STSs is in the fifth position in the property and casualty market in Puerto Rico, with a
market share of approximately 7.9%. The segments nearest competitors and their market share of
the property and casualty insurance market in Puerto Rico were: National Insurance Company (5.8%)
and ACE Insurance Co. (4.6%). The market leaders in the property and casualty insurance industry
in Puerto Rico are the Cooperativa de Seguros Múltiples Group (which now includes Real Legacy
Assurance Company, formerly Royal and Sunalliance Insurance PR, Inc.) and Universal Insurance
Group, with market shares of 18.6% and 18.2% in 2004, respectively. The property and casualty insurance market in Puerto Rico is extremely competitive. In addition,
soft market conditions prevailed during 2004 in the region, including United States, Puerto Rico
and Latin America. In the local market, such conditions mostly affected the commercial risks,
precluding rate increases and even provoking lower premiums on both renewals and new business. Due
to the slow growth in the economy, there are no new sources that provide continued growth; thus,
property and casualty insurance companies tend to compete for the same accounts through price
and/or more favorable policy terms and better quality of services. STS competes by reasonably
pricing its products and providing efficient services to producers, agents and clients. Management
believes that the knowledgeable, experienced personnel employed by the segment is also an incentive
for professional producers to conduct business with STS. The property and casualty insurance market has been affected by increased costs of reinsurance.
The international reinsurance market, although affected by catastrophes each year, has experienced
stability on reinsurance premium rates. However the Puerto Rico property and casualty insurance
market is significantly affected by the reinsurance cost and must pass on these additional costs to
its customers, in spite of the economic slowdown. Due to its geographical location, the property and casualty insurance operations in Puerto Rico are
subject to natural catastrophic activity. Puerto Rico is exposed to two major natural perils
(hurricanes and earthquakes), which lead local insurers to rely on the international reinsurance
market in order to provide enough capacity. Other issues that have plagued the industry over the
years, such as asbestos and pollution, have not affected the segments portfolio since STS is a
young organization and existing policies exclude such hazards. STS maintains a comprehensive
reinsurance program as a means of protecting its surplus in the event of a catastrophe. In addition to its catastrophic reinsurance coverage, STS is required by local regulatory
authorities to establish and maintain a trust fund (the Trust) to protect STS from its dual
exposure to hurricanes and earthquakes. The Trust is intended to be used as STSs first layer of
catastrophe protection. As of December 31, 2004 and 2003, STS had $23.4 million and $21.8 million,
respectively, invested in securities deposited in the Trust (see note 19 of the audited
consolidated financial statements). Considering the significance of reinsurance in protecting its capital base and ensuring ongoing
operations, STS is aware of the need to exercise careful business judgment in the selection and
approval of its reinsurers. Management believes that a comprehensive and sound reinsurance program
has been established to provide the level of protection that STS desires. These reinsurance
arrangements do not relieve STS from its direct obligations to its insureds. However, STS believes
that the credit risk arising from recoverable balances of reinsurance, if any, is immaterial. STS
policy is to enter into reinsurance agreements only with reinsurers considered to be financially
sound. The segments policy is to require an A.M. Best rating of A- or better or an equivalent
rating from other rating agencies. Management believes that STS commitment to sound underwriting practices, efficient claims reserve
monitoring, extensive catastrophe reinsurance programs, and underwriting expense controls, have
enabled it to maintain one of the best combined ratios in the local industry. STS, as well as most
of its property and casualty peers, uses the loss ratio, the expense ratio and the combined ratio
as measures of performance. A controlled business expansion in the commercial market and better
underwriting performance of its auto business, evidenced by declining loss ratios, have




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also contributed to such favorable results. In addition, prudent reinsurance utilization through a
sound strategy to control exposures by means of a strict underwriting criteria and protection of
retained exposures have also enhanced underwriting results. Financial Information About Segments Total revenue (with intersegment premiums/service revenues shown separately), net income and total
assets attributable to the reportable segments are set forth in note 3 to the consolidated
financial statements for the years ended December 31, 2004, 2003 and 2002. Trademarks The Corporation considers its trademarks of Triple-S and SSS very important and material to all
segments in which it is engaged. In addition to these, other trademarks used by TSMs subsidiaries
that are considered important have been duly registered with the Department of State of Puerto Rico
and the United States Patent and Trademark Office. It is the Corporations policy to register all
its important and material trademarks in order to protect its rights under applicable corporate and
intellectual property laws. Human Resources and Labor Matters As of February 28, 2005, the Corporation had 1,457 full-time employees and 279 temporary employees.
TSI has a collective bargaining agreement with the Unión General de Trabajadores, which represents
381 of TSIs 777 regular employees. The collective bargaining agreement expires on July 31, 2006.
The Corporation considers its relations with employees to be good. 
 Item 2. Properties TSM owns a seven story (including the basement floor) building located at 1441 F.D. Roosevelt
Avenue, in San Juan, Puerto Rico where the main offices of TSM, TSI and ISI are located, and two
adjacent buildings that houses TCI and certain offices of TSI, as well as the adjoining parking
lot. In addition, TSM is the owner of five floors of a fifteen-story building located at 1510 F.D.
Roosevelt Avenue, in Guaynabo, Puerto Rico. These floors house the Internal Auditing Office of
TSM, the main offices of SVTS and STS and some divisions of TSI. The Corporation is planning the
construction, on land already owned, of a new six-story building that will basically house the
operations of some divisions of TSI and STS and the operations of ISI, including its mainframe
facilities. ISIs mainframe facilities are currently located in a leased property that will be
vacated once the project is completed. In addition, as part of this project the Corporation is
also planning the construction of a multi-level parking building which will add approximately 500
parking spaces. The cost of this project is estimated to be approximately $22.0 million. This
project is expected to be completed during 2007-2008. In addition to the properties described above, TSM or its subsidiaries are parties to operating
leases that are entered into in the ordinary course of business. TSM believes that the facilities of the Corporation are in good condition and that the facilities,
together with anticipated capital improvements and additions, are adequate to meet its operating
needs for the foreseeable future. The need for expansion, upgrading and refurbishment of
facilities is continually evaluated in order to remain competitive and to take advantage of market
opportunities. 
 Item 3. Legal Proceedings.  (a)
    As of December 31, 2004, the Corporation is a defendant in various lawsuits arising out
of the ordinary course of business. Management believes, based on the opinion of legal
counsel, that the aggregate liabilities, if any, arising from such actions would not have
a material adverse effect on the Corporations consolidated financial position or results
of operations.(b)
    Drs. Carlyle Benavent and Ibrahim Pérez (the plaintiffs) caused the initiation of an
administrative proceeding before the Puerto Rico Insurance Commissioner against TSI and
TSM alleging the illegality of the repurchase and subsequent sale of 1,582 shares of TSIs
common stock due to the fact that the ultimate purchasers of said shares were selected on
an improper and selective basis by the Corporation in violation of the Puerto Rico
Insurance Code. The plaintiffs alleged that they were illegally excluded from
participation in the sale of




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shares by TSI due to the illegally selective nature of the sale of shares and that,
consequently, the sale of shares should be annulled.On December 1996, the Commissioner of Insurance issued an order to annul the sale of the
1,582 shares that TSI had repurchased from the estate of deceased stockholders. TSI
contested such order through an administrative and judicial review process. Consequently,
the sale of 1,582 shares was cancelled and the purchase price was returned to each former
stockholder. In the year 2000, the Commissioner of Insurance issued a pronouncement
providing further clarification of the content and effect of the order. This order also
required that all corporate decisions undertaken by TSI through the vote of its
stockholders of record, be ratified in a stockholders meeting or in a subsequent
referendum. In November 2000, TSM, as the sole stockholder of TSI, ratified all such
decisions. Furthermore, on November 19, 2000, TSM held a special stockholders meeting,
where a ratification of these decisions was undertaken except for the resolution related to
the approval of the reorganization of TSI and its subsidiaries. This resolution did not
reach the two thirds majority required by the order because the number of shares that were
present and represented at the meeting was below such amount (total shares present and
represented in the stockholders meeting was 64%). As stipulated in the order, TSM began
the process to conduct a referendum among its stockholders in order to ratify such
resolution. The process was later suspended because upon further review of the scope of
the order, the Commissioner of Insurance issued an opinion in a letter dated January 8,
2002 which indicated that the ratification of the corporate reorganization was not
required.In another letter dated March 14, 2002, the Commissioner of Insurance stated that the
ratification of the corporate reorganization was not required and that TSI had complied
with the Commissioners order of December 6, 1996 related to the corporate reorganization.
Thereafter, the plaintiffs filed a petition for review of the Commissioners determination
before the Puerto Rico Circuit Court of Appeals. Such petition was opposed by TSI and by
the Commissioner of Insurance.Pursuant to that review, on September 24, 2002, the Puerto Rico Circuit Court of Appeals
issued an order requiring the Commissioner of Insurance to order that a meeting of
shareholders be held to ratify TSIs corporate reorganization and the change of name of TSI
from Seguros de Servicios de Salud de Puerto Rico, Inc. to Triple-S, Inc. The Puerto Rico
Circuit Court of Appeals based its decision on administrative and procedural issues
directed at the Commissioner of Insurance. The Commissioner of Insurance filed a motion of
reconsideration with the Puerto Rico Circuit Court of Appeals on October 11, 2002. TSM and
TSI also filed a motion of reconsideration.On October 25, 2002, the Puerto Rico Circuit Court of Appeals dismissed the Commissioner of
Insurances Motion for Reconsideration and ordered the plaintiffs to reply to TSIs Motion
of Reconsideration.On May 18, 2003, the Puerto Rico Circuit Court of Appeals granted TSIs and TSMs Motion of
Reconsideration. The Puerto Rico Circuit Court of Appeals held that the Commissioner of
Insurance had the authority to waive the celebration of a referendum to ratify TSIs
reorganization and that therefore the reorganization of TSI, inasmuch as the 1,582 shares
annulled were not decisive, was approved by the stockholders.On June 26, 2003, the two stockholders presented a writ of certiorari before the Supreme
Court of Puerto Rico. TSI and TSM filed a motion opposing the issuance of the writ. The
writ was issued by the Supreme Court on August 22, 2003 when it ordered the Puerto Rico
Circuit Court of Appeals to transmit the record of the case. On December 1, 2003, the
plaintiffs filed a motion submitting their case on the basis of their original petition.
TSI and TSM filed its brief on December 30, 2003, while the Commissioner of Insurance, in
turn, filed a separate brief on December 31, 2003. On June 24, 2004 the Supreme Court of
Puerto Rico ordered the plaintiffs to file a brief in support of their allegations. The
outcome of the case is pending before the Supreme Court of Puerto Rico. It is the opinion
of the management and its legal counsels that the corporate reorganization as approved is
in full force and effect.(c)
    On September 4, 2003, José Sánchez and others filed a putative class action complaint
against the Corporation, present and former directors of TSM and TSI, and others, in the
United States District Court for the District of Puerto Rico, alleging violations under
the Racketeer Influenced and Corrupt Organizations Act, better known as the RICO Act. The
suit, among other allegations, alleges a scheme to defraud the plaintiffs by acquiring
control of TSI through illegally capitalizing TSI and later converting it to a for-profit
corporation and depriving the stockholders of their ownership rights. The plaintiffs base
their later allegations on the supposed decisions of TSIs board of directors and
stockholders, allegedly made in 1979, to operate with certain restrictions in order to
turn TSI into a charitable corporation, basically forever. While this case is still in the
very early preliminary stages and has not been certified as a class action, a Motion to
Dismiss was




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filed by defendants. On March 15, 2004, plaintiffs filed a response to this motion. On
April 30, 2004 defendants filed a reply in support of the Motion to Dismiss. On March 4,
2005 the Court issued an Opinion and Order. In this Opinion and Order, of the twelve
counts included in the complaint, eight counts were dismissed for failing to assert an
actionable injury; six for lack of standing and two for failing to plead with sufficient
particularity in compliance with the Rules. All shareholder allegations, including those
described above, were dismissed in the Opinion and Order. The remaining four counts were
found standing, in a limited way, in the Opinion and Order. Finally, the Court ordered
that by March 24, 2005 one of the counts left standing be replead to conform to the Rules
and that by March 28, 2005 a proposed schedule for discovery and other submissions be
filed. This case is still pending before the United States District Court for the District
of Puerto Rico.(d)
    On April 24, 2002, Octavio Jordán, Agripino Lugo, Ramón Vidal, and others filed a
suit against TSM, TSI and others in the Court of First Instance for San Juan, Superior
Section, alleging, among other things, violations by the defendants of provisions of the
Puerto Rico Insurance Code, anti-monopolistic practices, unfair business practices and
damages in the amount of $12.0 million. They also requested that TSM sell shares to them.
After a preliminary review of the complaint, it appears that many of the allegations
brought by the plaintiffs have been resolved in favor of TSM and TSI in previous cases
brought by the same plaintiffs in the United States District Court for the District of
Puerto Rico and by most of the plaintiffs in the local courts. The defendants, including
TSM and TSI answered the complaint, filed a counterclaim and filed several motions to
dismiss this claim. On February 18, 2005 the plaintiffs informed their intention to amend
the complaint and the Court granted then 45 days to do so and 90 days to defendants to
file the corresponding motion to dismiss.(e)
    On May 22, 2003 a putative class action suit was filed by Kenneth A. Thomas, M.D. and
Michael Kutell, M.D., on behalf of themselves and all other similarly situated and the
Connecticut State Medical Society against the Blue Cross and Blue Shield Association
(BCBSA) and multiple other insurance companies including TSI. The case is pending before
the U.S. District Court for the Southern District of Florida, Miami District.The individual Plaintiffs bring this action on behalf of themselves and a class of
similarly situated physicians seeking redress for alleged illegal acts of the defendants
which they allege have resulted in a loss of their property and a detriment to their
business, and for declaratory and injunctive relief to end those practices and prevent
further losses. Plaintiffs alleged that the defendants, on their own and as part of a
common scheme, systematically deny, delay and diminish the payments due to doctors so that
they are not paid in a timely manner for the covered, medically necessary services they
render.The class action complaint alleges that the health care plans are the agents of BCBSA
licensed entities, and as such have committed the acts alleged above and acted within the
scope of their agency, with the consent, permission, authorization and knowledge of the
others, and in furtherance of both their interest and the interests of other defendants.Management believes that TSI was brought to this litigation for the sole reason of being
associated with the BCBSA. However, on June 18, 2004 the plaintiffs moved to amend the
complaint to include the Colegio de Médicos y Cirujanos de Puerto Rico (a compulsory
association grouping all physicians in Puerto Rico), Marissel Velázquez, MD, President of
the Colegio de Médicos y Cirujanos de Puerto Rico, and Andrés Meléndez, MD, as plaintiffs
against TSI. Later Marissel Velázquez, MD voluntarily dismissed her complaint against TSI.TSI, along with the other defendants, moved to dismiss the complaint under multiple
grounds, including but not limited to arbitration and applicability of the McCarran
Ferguson Act.(f)
    On December 8, 2003 a putative class action was filed by Jeffrey Solomon, MD and
Orlando Armstrong, MD, on behalf of themselves and all other similarly situated and the
American Podiatric Medical Association, Florida Chiropractic Association, California
Podiatric Medical Association, Florida Podiatric Medical Association, Texas Podiatric
Medical Association, and Independent Chiropractic Physicians, against the BCBSA and
multiple other insurance companies, including TSI, all members of the BCBSA.The individual plaintiffs bring this action on behalf of themselves and a class of
similarly situated physicians seeking redress for alleged illegal acts of the defendants
which they allege have resulted in a loss of their property and a detriment to their
business, and for declaratory and injunctive relief to end those practices and prevent
further losses. Plaintiffs alleged that the defendants, on their own and as part of a
common scheme,




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systematically deny, delay and diminish the payments due to doctors so that they are not
paid in a timely manner for the covered, medically necessary services they render.The class action complaint alleges that the health care plans are the agents of BCBSA
licensed entities, and as such have committed the acts alleged above and acted within the
scope of their agency, with the consent, permission, authorization and knowledge of the
others, and in furtherance of both their interest and the interests of other defendants.On June 25, 2004, plaintiffs amended the complaint but the allegations against TSI did not
vary.Management believes that TSI was made a party to this litigation for the sole reason that
TSI is associated with the BCBSA. TSI along with the other defendants, moved to dismiss
the complaint under multiple grounds, including but not limited to arbitration and
applicability of the McCarran Ferguson Act. 
 Item 4. Submissions of Matters to a Vote of Security Holders. Not applicable. 
 Part II 
 Item 5. Market for Registrants Common Equity and Related Stockholders Matters. Market Information There is no established public trading market for TSMs common stock. Sporadic sales of TSMs
common stock have been limited to redemption sales to TSM at the shares $40.00 par value or at the
amount originally paid for the stock, since the common stock of TSM is not transferable to the
general public. In determining the market value of common stock disclosed in the facing page of
this Annual Report on Form 10-K, the Corporation used the shares $40.00 par value, which is the
per share amount at which the last sales of common stock have been made. TSMs Articles of Incorporation and By-Laws establish that only physicians, dentists and certain
specified healthcare organizations shall be shareholders of the Corporation. In addition, the
Articles of Incorporation and By-Laws establish that no person may own more than 21 shares, or five
percent (5%) or more, of the Corporations Voting Shares issued and outstanding. Holders The only outstanding voting securities of TSM are shares of its common stock, par value $40.00 per
share. As of March 15, 2005, there were 8,904 shares of Common Stock outstanding. The number of
holders of TSMs common stock as of March 15, 2005 was 1,768. Dividends TSM has not declared nor paid any dividends since its incorporation. A resolution was approved by
the Stockholders at the Annual Meeting held on April 27, 2003 acknowledging that the Board of
Directors (the Board) may declare dividends on TSMs common stock, subject to the Boards
determination that in its best judgment the payment of dividends is financially and legally
feasible. Recent Sales of Unregistered Securities In September 30, 2004, TSI closed the issuance of the sale of $50.0 million of its 6.30% senior
unsecured notes due September 2019 (the notes). The notes are unconditionally guaranteed by TSM
(the guarantee) and were privately placed to various institutional accredited investors (the
purchasers) under a Note Purchase Agreement among TSI, TSM and the purchasers. Neither the notes
nor the guarantee have been or will be registered under the U.S. Securities Act of 1933 as amended
(the Securities Act) or any state securities laws. The notes were offered in reliance upon the
exemption from registration provided by Section 4(2) and Rule 506 of the Securities Act.




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##### Table of Contents



Item 6. Selected Financial Data. (Dollar amounts in thousands, except per share data)
    
    2004
    
    
    2003
    
    
    2002
    
    
    2001
    
    
    2000Statement of Earnings DataYears ended December 31,Premiums earned, net
    
    $
    1,296,423
    
    
    
    1,262,234
    
    
    
    1,236,647
    
    
    
    1,155,399
    
    
    
    1,096,125Amounts attributable to
self-funded arrangements
    
    
    181,702
    
    
    
    162,288
    
    
    
    150,684
    
    
    
    134,374
    
    
    
    117,542Less amounts attributable to claims under
self-funded arrangements
    
    
    (169,924
    )
    
    
    (151,806
    )
    
    
    (141,138
    )
    
    
    (126,295
    )
    
    
    (113,248
    )Premiums earned, net and fee revenue
    
    
    1,308,201
    
    
    
    1,272,716
    
    
    
    1,246,193
    
    
    
    1,163,478
    
    
    
    1,100,419Net investment income
    
    
    26,499
    
    
    
    24,679
    
    
    
    24,778
    
    
    
    25,405
    
    
    
    24,338Net realized investments gains
    
    
    10,968
    
    
    
    8,365
    
    
    
    185
    
    
    
    4,655
    
    
    
    6,377Net unrealized investment gain (loss)
on trading securities
    
    
    3,042
    
    
    
    14,893
    
    
    
    (8,322
    )
    
    
    (3,625
    )
    
    
    (3,737
    )Other income, net
    
    
    3,360
    
    
    
    4,703
    
    
    
    2,075
    
    
    
    483
    
    
    
    (410
    )Total revenue
    
    $
    1,352,070
    
    
    
    1,325,356
    
    
    
    1,264,909
    
    
    
    1,190,396
    
    
    
    1,126,987Net income (loss)
    
    $
    45,803
    
    
    
    26,229
    
    
    
    48,249
    
    
    
    21,715
    
    
    
    (1,512
    )Basic net income per share (1):
    
    $
    5,135
    
    
    
    2,857
    
    
    
    1,085
    
    
    
    1,052
    
    
    
    929Balance Sheet DataDecember 31,Total assets
    
    $
    919,657
    
    
    
    834,623
    
    
    
    721,892
    
    
    
    656,058
    
    
    
    562,153Long-term borrowings
    
    $
    95,730
    
    
    
    48,375
    
    
    
    50,015
    
    
    
    55,650
    
    
    
    58,040Total stockholders equity
    
    $
    301,433
    
    
    
    254,255
    
    
    
    231,664
    
    
    
    186,028
    
    
    
    159,693
   (1)
    
    Further details of the calculation of basic earnings per share are set forth in
notes 2 and 23 of the consolidated financial statements for the y ears ended December
31, 2004, 2003 and 2002. 
 Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations. The information required by this item is incorporated by reference to the section Managements
Discussion and Analysis of Financial Condition and Results of Operations included in the
Corporations Annual Report. 
 Item 7A. Quantitative and Qualitative Disclosures About Market Risk. The information required by this item is incorporated by reference to the section Quantitative
and Qualitative Disclosures About Market Risk included in the Corporations Annual Report. 
 Item 8. Financial Statements and Supplementary Data. Financial Statements For the consolidated financial statements as of December 31, 2004 and 2003 for the three years
ended December 31, 2004 see Index to financial statements in Item 15. Exhibits and Financial
Statement Schedules to this Annual Report on Form 10-K.




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Selected Quarterly Financial Data For the selected quarterly financial data corresponding to the years 2004, 2003 and 2002, see note
24 of the consolidated financial statements as of December 31, 2004, 2003 and 2002. 
 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosures. None. 
 Item 9A. Controls and Procedures. Evaluation of Disclosure Controls and Procedures The Corporations management, with the participation of the Chief Executive Officer and Chief
Financial Officer, has evaluated the effectiveness of the Corporations disclosure controls and
procedures as of December 31, 2004. Based on that evaluation, the Corporations Chief Executive
Officer and Chief Financial Officer concluded that the Corporations disclosure controls and
procedures were effective as of December 31, 2004. Changes in Internal Controls There were no significant changes in the Corporations disclosure controls and procedures, or in
factors that could significantly affect internal controls, subsequent to the date the Chief
Executive Officer and Chief Financial Officer completed the evaluation referred to above. 
 Item 9B. Other Information. Not applicable. 
 Part III 
 Item 10. Directors and Executive Officers of the Registrant. The Board of Directors has determined that at least one member of the Audit Committee is an
audit committee financial expert as defined by the SEC rules. Vicente J. León-Irizarry, CPA has
been designated as the audit committee financial expert by the Board of Directors. For the Code of Ethics adopted by Corporation, see Exhibit 14.1 to this Annual Report on Form 10-K. The remaining information required by this item is incorporated by reference to the sections
Election of Directors, Directors and Executive Officers, Section 16(a) Beneficial Ownership
Reporting Compliance and Principal Holders of the Shares included in the Corporations
definitive Proxy Statement. 
 Item 11. Executive Compensation. The information required by this item is incorporated by reference to the section Executive
Compensation, Report of the Board of Directors on Executive Compensation and Pension Plan
included in the Corporations definitive Proxy Statement.




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##### Table of Contents



Item 12. Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters. The information required by this item is incorporated by reference to the section Principal
Holders of the Shares included in the Corporations definitive Proxy Statement. 
 Item 13. Certain Relationships and Related Transactions. The information required by this item is incorporated by reference to the section Certain
Relationships and Related Transactions included in the Corporations definitive Proxy Statement. 
 Item 14. Principal Accountant Fees and Services The information required by this item is incorporated by reference to the section Disclosure
of Audit Fees included in the Corporations definitive Proxy Statement. 
 Item 15. Exhibits and Financial Statements Schedules. Financial Statements and Schedules A. The following financial statements and reports included on pages 2 through 83 of the Financial
Information 2004 section of the Corporations Annual Report to Shareholders are incorporated herein
by reference: (1) Financial Statements:  
    Independent Auditors Report
    Consolidated Balance Sheets as of December 31, 2004 and 2003
    Consolidated Statements of Earnings for the years ended December 31, 2004, 2003 and 2002
    Consolidated Statements of Stockholders Equity and Comprehensive Income for the years ended
December 31,
2004, 2003 and 2002
    Consolidated Statements of Cash Flows for the years ended December 31, 2004, 2003 and 2002
    Notes to Consolidated Financial Statements  December 31, 2004, 2003 and 2002 (2) Financial Statement Schedules:  
    Schedule I  Summary of Investments was omitted because the information is disclosed in the
notes to the
consolidated financial statements of the Corporation.
    Schedule II  Condensed Financial Information of the Registrant
    Schedule III  Supplementary Insurance Information
    Schedule IV  Reinsurance
    Schedule V  Valuation and Qualifying Accounts
    Schedule VI  Supplemental Information Concerning Property Casualty Insurance Operations was
omitted
because the schedule is not applicable to the Corporation. (3) Exhibits: The exhibits listed on the Exhibits Index on pages 17 through 18 of this report are filed
herewith or are incorporated herein by reference. Report on Form 8-K The Corporation filed with the Securities and Exchange Commission the following Current Reports on
Form 8-K: - Form 8-K dated October 6, 2004 indicating that on September 30, 2004, Triple-S, Inc.,
a wholly owned subsidiary of Triple-S Management Corporation closed the issuance of the sale of
$50,000,000 of its 6.30% Senior Unsecured Notes due September 2019.




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- Form 8-K dated December 27, 2004 indicating that on December 6, 2004, the Board of
Directors of Triple-S Management Corporation appointed Mr. Juan E. Rodríguez Díaz, Esq., to serve
as director and fill in the vacancy left by Mr. José Davison Lampón. Mr. Rodríguez Díaz will be
considered a member of the Board representative of the community, as was the case with Mr. Davison
Lampón. Exhibits Exhibits
    
    Description3(i)
    
    Articles of Incorporation of Triple-S Management Corporation as
amended (English Translation) (incorporated herein by reference
to Exhibit 3(i) to TSMs Quarterly Report on Form 10-Q for the
Quarter Ended June 30, 2002 (File No. 0-49762)).3(ii)
    
    By-Laws of Triple-S Management Corporation as amended (English
Translation) (incorporated herein by reference to Exhibit 3(ii)
to TSMs Quarterly Report on Form 10-Q for the Quarter Ended June
30, 2002 (File No. 0-49762)).10.1
    
    Puerto Rico Health Insurance Contract for the Metro-North Region
(incorporated herein by reference to Exhibit 10.1 to TSMs
Quarterly Report on Form 10-Q for the Quarter Ended June 30, 2003
(File No. 0-49762)).10.2
    
    Puerto Rico Health Insurance Contract for the North Region
(incorporated herein by reference to Exhibit 10.2 to TSMs
Quarterly Report on Form 10-Q for the Quarter Ended June 30, 2003
(File No. 0-49762)).10.3
    
    Puerto Rico Health Insurance Contract for the South-West Region
(incorporated herein by reference to Exhibit 10.3 to TSMs
Quarterly Report on Form 10-Q for the Quarter Ended June 30, 2003
(File No. 0-49762)).10.4
    
    Employment Contract with Mr. Ramón Ruiz Comas, CPA (incorporated
herein by reference to Exhibit 10.4 to TSMs Quarterly Report on
Form 10-Q for the Quarter Ended June 30, 2002 (File No.
0-49762)).10.5
    
    Employment Contract with Ms. Socorro Rivas, CPA (incorporated
herein by reference to Exhibit 10.5 to TSMs Quarterly Report on
Form 10-Q for the Quarter Ended June 30, 2002 (File No.
0-49762)).10.6
    
    Employment Contract with Dr. Alejandro Franco (incorporated
herein by reference to Exhibit 10.9 to TSMs General Form of
Registration of Securities on Form 10 (File No. 0-49762)).10.7
    
    Federal Employees Health Benefits Contract (incorporated herein
by reference to Exhibit 10.5 to TSMs General Form of
Registration of Securities on Form 10 (File No. 0-49762)).10.8
    
    Credit Agreement with FirstBank Puerto Rico in the amount of
$41,000,000 (incorporated herein by reference to Exhibit 10.6 to
TSMs General Form of Registration of Securities on Form 10 (File
No. 0-49762)).10.9
    
    Credit Agreement with FirstBank Puerto Rico in the amount of
$20,000,000 (incorporated herein by reference to Exhibit 10.7 to
TSMs General Form of Registration of Securities on Form 10 (File
No. 0-49762)).10.10
    
    Non-Contributory Retirement Program (incorporated herein by
reference to Exhibit 10.8 to TSMs General Form of Registration
of Securities on Form 10 (File No. 0-49762)).10.11
    
    License and other Agreements with Blue Shield (incorporated
herein by reference to Exhibit 10.10 to TSMs General Form of
Registration of Securities on Form 10 (File No. 0-49762)).11.1
    
    Statement re computation of per share earnings; an exhibit
describing the computation of the earnings per share for the
years ended December 31, 2004, 2003 and 2002 has been omitted as
the detail necessary to determine the computation of earnings per
share can be clearly determined from the notes to the
consolidated financial statements.12.1
    
    Statement re computation of ratios; an exhibit describing the
computation of the loss ratio, expense ratio and combined ratio
for the years ended December 31, 2004, 2003 and 2002 has been
omitted as the detail necessary to determine the computation of
earnings per share can be clearly determined from the material
contained in Part II of this Annual Report on Form 10-K.13.1
    
    Triple-S Management Corporation Annual Report to Shareholders for
the




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##### Table of Contents



Exhibits
    
    Descriptionyear ended December 31, 2004.14.1
    
    Code of Ethics (incorporated herein by reference from Exhibit
14.1 to TSMs Annual Report on Form 10-K for the year ended
December 31, 2003 (File No. 0-49762))31.1
    
    Certification of the President and Chief Executive Officer
required by Rule 13a-14(a)/15d-14(a).31.2
    
    Certification of the Vice President of Finance and Chief
Financial Officer required by Rule 13a-14(a)/15d-14(a).32.1
    
    Certification of the President and Chief Executive Officer
required pursuant to 18 U.S. Section 1350.32.2
    
    Certification of the Vice President of Finance and Chief
Financial Officer required pursuant to 18 U.S. Section 1350.21.1
    
    List of Subsidiaries of the Corporation (incorporated herein by
reference to Exhibit 21 to TSMs General Form of Registration of
Securities on Form 10 (File No. 0-49762)).
 All other exhibits for which provision is made in the applicable accounting regulation of the
United States Securities and Exchange Commission are not required under the related instructions or
are inapplicable, and therefore have been omitted. 
 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) 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. Triple-S Management Corporation
Registrant By:
    
    /s/ Ramón M. Ruiz-Comas
    
    Date:
    
    March 23, 2005Ramón M. Ruiz-ComasPresident and Chief Executive OfficerBy:
    
    /s/ Juan José Román
    
    Date:
    
    March 23, 2005Juan José RománVice President of Finance andChief Financial Officer




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##### Table of Contents



Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed
below by the following persons on behalf of the registrant and in the capacities and on the dates
indicated. By:
    
    /s/ Fernando Ysern-Borrás
    
    Date:
    
    March 23, 2005Fernando Ysern-Borrás, MDDirector and Chairman of the BoardBy:
    
    /s/ Wilmer Rodríguez-Silva
    
    Date:
    
    March 23, 2005Wilmer Rodríguez-Silva, MDDirector and Vice-Chairman of the BoardBy:
    
    /s/ Jesús R. Sánchez-Colón
    
    Date:
    
    March 23, 2005Jesús R. Sánchez-Colón, MDDirector and Secretary of the BoardBy:
    
    /s/ Arturo Córdova-López
    
    Date:
    
    March 23, 2005Arturo Córdova-López, MDDirector and Assistant Secretary of the BoardBy:
    
    /s/ Vicente J. León-Irizarry
    
    Date:
    
    March 23, 2005Vicente J. León-Irizarry, CPADirector and Treasurer of the BoardBy:
    
    /s/ Adamina Soto-Martínez
    
    Date:
    
    March 23, 2005Adamina Soto-Martínez, CPADirector and Assistant Treasurer of the BoardBy:
    
    /s/ Valeriano Alicea-Cruz
    
    Date:
    
    March 23, 2005Valeriano Alicea-Cruz, MDDirectorBy:
    
    /s/ José Árturo Álvarez-Gallardo
    
    Date:
    
    March 23, 2005Mr. José Árturo Álvarez-GallardoDirectorBy:
    
    /s/ Mario S. Belaval-Ferrer
    
    Date:
    
    March 23, 2005Mr. Mario S. Belaval-FerrerDirectorBy:
    
    /s/ Carmen Ana Culpeper-Ramírez
    
    Date:
    
    March 23, 2005Ms. Carmen Ana Culpeper-RamírezDirectorBy:
    
    /s/ Porfirio E. Díaz-Torres
    
    Date:
    
    March 23, 2005Porfirio E. Díaz-Torres, MDDirector




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##### Table of Contents



By:
    
    /s/ Manuel Figueroa-Collazo
    
    Date:
    
    March 23, 2005Manuel Figueroa-Collazo, Ph.D.DirectorBy:
    
    /s/ Fernando L. Longo-Rodrígez
    
    Date:
    
    March 23, 2005Fernando L. Longo-Rodrígez, MDDirectorBy:
    
    /s/ Wilfredo López-Hernández
    
    Date:
    
    March 23, 2005Wilfredo López-Hernández, MDDirectorBy:
    
    /s/ Manuel A. Marcial-Seoane
    
    Date:
    
    March 23, 2005Manuel A. Marcial-Seoane, MDDirectorBy:
    
    /s/ Miguel A. Nazario-Franco
    
    Date:
    
    March 23, 2005Mr. Miguel A. Nazario-FrancoDirectorBy:
    
    /s/ Juan E. Rodríguez-Díaz
    
    Date:
    
    March 23, 2005Juan E. Rodríguez-Díaz, Esq.DirectorBy:
    
    /s/ Manuel Suárez-Méndez
    
    Date:
    
    March 23, 2005Mr. Manuel Suárez-Méndez, P.E.Director




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##### Table of Contents



Schedule II TRIPLE-S MANAGEMENT CORPORATION
(Parent Company Only) Financial Statements December 31, 2004, 2003, and 2002 (With Independent Auditors Report Thereon)




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##### Table of Contents



Independent Auditors Report The Board of Directors and Stockholders
Triple S Management Corporation: Under date of March 4, 2005, we reported on the consolidated balance sheets of Triple-S Management
Corporation and Subsidiaries (the Company) as of December 31, 2004 and 2003, and the related
consolidated statements of earnings, stockholders equity and comprehensive income, and cash flows
for each of the years in the three-year period ended December 31, 2004 as contained in the 2004
annual report to stockholders. These consolidated financial statements and our report thereon are
incorporated by reference in the annual report on Form 10K for the year 2004. In connection with
our audits of the aforementioned consolidated financial statements, we also audited the related
financial statement schedules as listed in the Item 15. These financial statement schedules are the
responsibility of the Companys management. Our responsibility is to express an opinion on these
financial statement schedules based on our audits. In our opinion, such financial statement schedules, when considered in relation to the basic
consolidated financial statements taken as a whole, present fairly, in all material respects, the
information set forth therein. March 4, 2005 Stamp No. 1988694 of the Puerto Rico
Society of Certified Public Accountants
was affixed to the record copy of this report.




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##### Table of Contents



TRIPLE-S MANAGEMENT CORPORATION
(Parent Company Only) Balance Sheets December 31, 2004 and 2003 (Dollar amounts in thousands) 2004
    
    
    2003AssetsCurrent assets:Cash and cash equivalents
    
    $
    4,031
    
    
    
    1,640Receivables:Due from subsidiaries*
    
    
    766
    
    
    
    136Other
    
    
    102
    
    
    
    33Total receivables
    
    
    868
    
    
    
    169Investment in securities
    
    
    7,205
    
    
    
    7,025Prepaid income tax
    
    
    130
    
    
    
    Deferred tax assets
    
    
    404
    
    
    
    527Prepaid pension cost
    
    
    1,159
    
    
    
    Accrued interest
    
    
    96
    
    
    
    101Other assets
    
    
    15
    
    
    
    23Total current assets
    
    
    13,908
    
    
    
    9,485Notes receivable from subsidiary*
    
    
    26,000
    
    
    
    26,000Investment in securities
    
    
    1,000
    
    
    
    1,000Accrued interest on note receivable from subsidiary
    
    
    788
    
    
    
    54Deferred tax assets
    
    
    515
    
    
    
    597Investments in wholly owned subsidiaries*
    
    
    293,203
    
    
    
    261,730Property and equipment, net
    
    
    25,577
    
    
    
    26,656Total assets
    
    $
    360,991
    
    
    
    325,522Liabilities and Stockholders EquityCurrent liabilities:Current portion of long-term debt
    
    $
    3,140
    
    
    
    2,645Due to subsidiary*
    
    
    8,136
    
    
    
    861Accounts payable and accrued expenses
    
    
    5,440
    
    
    
    4,535Accrued pension cost
    
    
    
    
    
    
    2,804Income tax payable
    
    
    
    
    
    
    14,339Total current liabilities
    
    
    16,716
    
    
    
    25,184Additional minimum pension liability
    
    
    252
    
    
    
    353Long-term debt
    
    
    42,590
    
    
    
    45,730Total liabilities
    
    
    59,558
    
    
    
    71,267Stockholders equity:Common stock at $40 par value. Authorized 12,500 shares;
issued and outstanding 8,904 and 9,030 shares at
December 31, 2004 and 2003, respectively
    
    
    356
    
    
    
    361Additional paid-in capital
    
    
    150,408
    
    
    
    150,407Retained earnings
    
    
    134,531
    
    
    
    88,728Accumulated other comprehensive income
    
    
    16,138
    
    
    
    14,759301,433
    
    
    
    254,255Commitments and contingenciesTotal liabilities and stockholders equity
    
    $
    360,991
    
    
    
    325,522
   *
    
    Eliminated on consolidation. See accompanying independent auditors report and notes to financial statements. 2




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##### Table of Contents



TRIPLE-S MANAGEMENT CORPORATION
(Parent Company Only) Statements of Earnings Years ended December 31, 2004, 2003, and 2002 (Dollar amounts in thousands) 2004
    
    
    2003
    
    
    2002Rental income*
    
    $
    6,290
    
    
    
    6,082
    
    
    
    6,032General and administrative expenses
    
    
    (4,787
    )
    
    
    (5,570
    )
    
    
    (4,990
    )Operating income
    
    
    1,503
    
    
    
    512
    
    
    
    1,042Other revenue (expenses):Equity in net income of subsidiaries*
    
    
    45,451
    
    
    
    77,736
    
    
    
    48,405Interest expense, net of interest income of
$1,088, $958, and $1,092 in 2004, 2003,
and 2002, respectively *
    
    
    (863
    )
    
    
    (982
    )
    
    
    (1,058
    )Realized investment gains
    
    
    
    
    
    
    650
    
    
    
    111Total other revenue (expenses), net
    
    
    44,588
    
    
    
    77,404
    
    
    
    47,458Income before income taxes
    
    
    46,091
    
    
    
    77,916
    
    
    
    48,500Income tax expense (benefit):Current
    
    
    306
    
    
    
    51,834
    
    
    
    547Deferred
    
    
    (18
    )
    
    
    (147
    )
    
    
    (296
    )Total income tax expense, net
    
    
    288
    
    
    
    51,687
    
    
    
    251Net income
    
    $
    45,803
    
    
    
    26,229
    
    
    
    48,249
   *
    
    Eliminated on consolidation. See accompanying independent auditors report and notes to financial statements. 3




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##### Table of Contents



TRIPLE-S MANAGEMENT CORPORATION
(Parent Company Only) Statements of Stockholders Equity and Comprehensive Income Years ended December 31, 2004, 2003, and 2002 (Dollar amounts in thousands) AccumulatedAdditional
    
    
    
    
    
    
    otherCommon
    
    
    paid-in
    
    
    Retained
    
    
    comprehensivestock
    
    
    capital
    
    
    earnings
    
    
    income
    
    
    TotalBalance, December 31, 2001
    
    $
    389
    
    
    
    150,405
    
    
    
    14,250
    
    
    
    20,984
    
    
    
    186,028Stock redemption
    
    
    (16
    )
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    (15
    )Comprehensive income:Net income
    
    
    
    
    
    
    
    
    
    
    48,249
    
    
    
    
    
    
    
    48,249Net unrealized change in
investment securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,986
    
    
    
    5,986Net change in minimum
pension liability
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (8,114
    )
    
    
    (8,114
    )Net change in fair value of
cash-flow hedges
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (470
    )
    
    
    (470
    )Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    45,651Balance, December 31, 2002
    
    
    373
    
    
    
    150,406
    
    
    
    62,499
    
    
    
    18,386
    
    
    
    231,664Stock redemption
    
    
    (12
    )
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    (11
    )Comprehensive income:Net income
    
    
    
    
    
    
    
    
    
    
    26,229
    
    
    
    
    
    
    
    26,229Net unrealized change in
investment securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6,022
    )
    
    
    (6,022
    )Net change in minimum
pension liability
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,292
    
    
    
    2,292Net change in fair value of
cash-flow hedges
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    103
    
    
    
    103Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    22,602Balance, December 31, 2003
    
    
    361
    
    
    
    150,407
    
    
    
    88,728
    
    
    
    14,759
    
    
    
    254,255Stock redemption
    
    
    (5
    )
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    (4
    )Comprehensive income:Net income
    
    
    
    
    
    
    
    
    
    
    45,803
    
    
    
    
    
    
    
    45,803Net unrealized change in
investment securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,101
    
    
    
    1,101Net change in minimum
pension liability
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3
    )
    
    
    (3
    )Net change in fair value of
cash-flow hedges
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    281
    
    
    
    281Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    47,182Balance, December 31, 2004
    
    $
    356
    
    
    
    150,408
    
    
    
    134,531
    
    
    
    16,138
    
    
    
    301,433
 See accompanying independent auditors report and notes to financial statements. 4




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TRIPLE-S MANAGEMENT CORPORATION
(Parent Company Only) Statements of Cash Flows Years ended December 31, 2004, 2003, and 2002 (Dollar amounts in thousands) 2004
    
    
    2003
    
    
    2002Cash flows from operating activities:Net income
    
    $
    45,803
    
    
    
    26,229
    
    
    
    48,249Adjustments to reconcile net income to net cash (used in)
provided by operating activities:Equity in net income of subsidiaries*
    
    
    (45,451
    )
    
    
    (77,736
    )
    
    
    (48,405
    )Depreciation and amortization
    
    
    1,118
    
    
    
    1,110
    
    
    
    2,359Gain on sale of securities
    
    
    
    
    
    
    (650
    )
    
    
    (111
    )Accretion in value of securities
    
    
    (1
    )
    
    
    (1
    )
    
    
    Provision for obsolescence
    
    
    (44
    )
    
    
    (88
    )
    
    
    Provision for doubtful receivables
    
    
    
    
    
    
    (138
    )
    
    
    (55
    )Deferred income tax benefit
    
    
    (18
    )
    
    
    (147
    )
    
    
    (296
    )Changes in assets and liabilities:Receivables*
    
    
    (699
    )
    
    
    207
    
    
    
    38Accrued interest
    
    
    (729
    )
    
    
    4,759
    
    
    
    (826
    )Prepaid income tax, prepaid pension cost, and other assets
    
    
    (1,245
    )
    
    
    89
    
    
    
    84Accounts payable, accrued expenses, accrued
pension cost, and due to subsidiary*
    
    
    5,834
    
    
    
    (480
    )
    
    
    2,204Income tax payable
    
    
    (14,339
    )
    
    
    13,876
    
    
    
    463Net cash (used in) provided by operating activities
    
    
    (9,771
    )
    
    
    (32,970
    )
    
    
    3,704Cash flows from investing activities:Acquisition of investment in securities classified as available for sale
    
    
    (1,430
    )
    
    
    (8,892
    )
    
    
    (5,920
    )Proceeds from sale and maturities of investment in securities
classified as available for sale
    
    
    1,280
    
    
    
    6,689
    
    
    
    5,616Acquisition of property and equipment, net
    
    
    (39
    )
    
    
    (11
    )
    
    
    (96
    )Net cash used in investing activities
    
    
    (189
    )
    
    
    (2,214
    )
    
    
    (400
    )Cash flows from financing activities:Dividend received from wholly owned subsidiaries*
    
    
    15,000
    
    
    
    37,800
    
    
    
    227Payment of long-term debts
    
    
    (2,645
    )
    
    
    (1,640
    )
    
    
    (5,635
    )Redemption of common stock
    
    
    (4
    )
    
    
    (11
    )
    
    
    (15
    )Net cash provided by (used in) financing activities
    
    
    12,351
    
    
    
    36,149
    
    
    
    (5,423
    )Net increase (decrease) in cash and cash equivalents
    
    
    2,391
    
    
    
    965
    
    
    
    (2,119
    )Cash and cash equivalents, beginning of year
    
    
    1,640
    
    
    
    675
    
    
    
    2,794Cash and cash equivalents, end of year
    
    $
    4,031
    
    
    
    1,640
    
    
    
    675Supplemental information:Income tax paid
    
    $
    14,774
    
    
    
    37,958
    
    
    
    84Interest paid
    
    
    1,951
    
    
    
    1,867
    
    
    
    2,150Noncash activities:Change in net unrealized gain on securities available for sale of
the subsidiaries*
    
    $
    1,130
    
    
    
    (5,532
    )
    
    
    5,766Change in net unrealized gain on securities available for sale
    
    
    (29
    )
    
    
    (490
    )
    
    
    220Change in cash-flow hedges including deferred tax asset of
$56, $234, and $212 in 2004, 2003, and 2002, respectively
    
    
    281
    
    
    
    103
    
    
    
    (470
    )Change in minimum pension liability including related
intangible asset of $598, $645, and $694 in 2004, 2003, and
2002, respectively*
    
    
    (3
    )
    
    
    2,292
    
    
    
    (8,114
    )
   *
    
    Eliminated on consolidation. See accompanying independent auditors report and notes to financial statements. 5




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##### Table of Contents



TRIPLE-S MANAGEMENT CORPORATION
(Parent Company Only) Notes to Financial Statements December 31, 2004, 2003, and 2002 (Dollar amounts in thousands)  (1)
    OrganizationTriple-S Management Corporation (the Company or TSM) was incorporated under the laws of
the Commonwealth of Puerto Rico on January 17, 1997 to engage, among other things, as the
holding company of entities primarily involved in the insurance industry.The Company has the following wholly owned subsidiaries that are subject to the regulations of
the Commissioner of Insurance of the Commonwealth of Puerto Rico (the Commissioner of
Insurance): (1) Triple-S, Inc. (TSI) which provides hospitalization and health benefits to
subscribers through contracts with hospitals, physicians, dentists, laboratories, and other
organizations located mainly in Puerto Rico; (2) Seguros de Vida Triple-S, Inc. (SVTS), which
is engaged in the underwriting of life and disability insurance policies and the
administration of annuity contracts; and (3) Seguros Triple-S, Inc. (STS), which is engaged in
the underwriting of property and casualty insurance policies. The Company and TSI are members
of the Blue Cross and Blue Shield Association (BCBSA).The Company also has two other wholly owned subsidiaries, Interactive Systems, Inc. (ISI) and
Triple-C, Inc. (TC). ISI is mainly engaged in providing data processing services to the
Company and its subsidiaries. TC is mainly engaged as a third party administrator for TSI in
the administration of the Commonwealth of Puerto Rico Health Care Reforms business (the
Reform). Also, TC provides health care advisory services to TSI and other health
insurance-related services to the health insurance industry.A substantial majority of the Companys business activity is with insureds located throughout
Puerto Rico, and as such, the Company is subject to the risks associated with the Puerto Rico
economy.(2)
    Significant Accounting PoliciesThe significant accounting policies followed by the Company are set forth in the notes to the
consolidated financial statements of the Company incorporated by reference into Item 15 to the
Annual Report on Form 10K.(3)
    Property and Equipment, NetProperty and equipment as of December 31 are composed of the following: 2004
    
    
    2003Land
    
    $
    6,531
    
    
    
    6,531Buildings and leasehold improvements
    
    
    27,492
    
    
    
    27,45334,023
    
    
    
    33,984Less accumulated depreciation and amortization
    
    
    (8,446
    )
    
    
    (7,328
    )Property and equipment, net
    
    $
    25,577
    
    
    
    26,656
 (Continued) 6




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##### Table of Contents



TRIPLE-S MANAGEMENT CORPORATION
(Parent Company Only) Notes to Financial Statements December 31, 2004, 2003, and 2002 (Dollar amounts in thousands)  (4)
    Investment in Wholly Owned SubsidiariesSummarized combined financial information for the Companys wholly owned subsidiaries as of
and for the years ended December 31, 2004 and 2003 is as follows: 2004
    
    
    2003AssetsCash, cash equivalents, and investments
    
    $
    700,001
    
    
    
    642,631Receivables, net
    
    
    124,732
    
    
    
    95,712Other assets
    
    
    76,710
    
    
    
    69,231Total assets
    
    $
    901,443
    
    
    
    807,574LiabilitiesClaim liabilities
    
    $
    279,325
    
    
    
    247,920Unearned premiums
    
    
    84,583
    
    
    
    78,704Annuity contracts
    
    
    34,071
    
    
    
    26,661Accounts payable and other liabilities
    
    
    210,261
    
    
    
    192,559Total liabilities
    
    $
    608,240
    
    
    
    545,844Stockholders equity
    
    $
    293,203
    
    
    
    261,730
  The net income of the subsidiaries during the three-year period ended December 31, 2004 was
$45,451, $77,736, and $48,405. The Company allocates to its subsidiaries certain expenses
incurred in the administration of their operations. Total charges including other expenses
paid on behalf of the subsidiaries amounted to $3,945, $3,351, and $4,062 in the three-year
period ended December 31, 2004. 7




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##### Table of Contents



TRIPLE-S MANAGEMENT CORPORATION
(Parent Company Only) Notes to Financial Statements December 31, 2004, 2003, and 2002 (Dollar amounts in thousands)  (5)
    Loans Payable to BankA summary of the credit agreements entered by the Company with a commercial bank at December
31, 2004 and 2003 is as follows: 2004
    
    
    2003Secured loan payable of $41,000, payable in monthly
installments of $137 up to July 1, 2024, plus interest at a
rate reset periodically of 100 basis points over LIBOR
(which was 3.30% and 2.17% at December 31, 2004
and 2003, respectively)
    
    $
    30,730
    
    
    
    32,370Secured note payable of $20,000, payable in various different
installments up to August 31, 2007, with interest payable
on a monthly basis at a rate reset periodically of 130 basis
points over LIBOR (which was 3.32% and 2.45% at
December 31, 2004 and 2003, respectively)
    
    
    15,000
    
    
    
    16,00545,730
    
    
    
    48,375Less current maturities
    
    
    (3,140
    )
    
    
    (2,645
    )Total loans payable to bank
    
    $
    42,590
    
    
    
    45,730
 Aggregate maturities of the Companys credit agreements as of December 31, 2004 are summarized
as follows: 2005
    
    $
    3,1402006
    
    
    3,1402007
    
    
    13,6402008
    
    
    1,6402009
    
    
    1,640Thereafter
    
    
    22,530$
    45,730
 The proceeds of the $41,000 loan and of the $20,000 note payable were used by the Company for
the purchase of real estate properties from subsidiaries and for working capital needs. 8




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##### Table of Contents



TRIPLE-S MANAGEMENT CORPORATION
(Parent Company Only) Notes to Financial Statements December 31, 2004, 2003, and 2002 (Dollar amounts in thousands) The credit agreement related to the $20,000 calls for repayments of principal amount of not
less than $250 and in integral multiples of $50. The aggregate principal amounts shall be
reduced annually to the amounts specified on or before the dates described below: MaximumprincipaloutstandingDate
    
    balanceAugust 1, 2005
    
    $
    13,500August 1, 2006
    
    
    12,000August 1, 2007
    
    
    
  The loan and note payable previously described are secured by a first position held by the
bank on the Companys land, building, and substantially all leasehold improvements, as
collateral for the term of the loans under a continuing general security agreement. These
credit facilities contain certain covenants, which are normal in this type of credit facility,
which the Company has complied with at December 31, 2004 and 2003.Interest expense on the above debts amounted to $1,217, $1,302, and $2,150 in the three-year
period ended December 31, 2004.(6)
    Income TaxesThe Company is subject to Puerto Rico income taxes. Under Puerto Rico income tax law, the
Company is not allowed to file consolidated tax returns with its subsidiaries.TSI was exempt through 2002 from Puerto Rico income taxes under a ruling issued by the
Department of the Treasury. On June 18, 2003, the Department of the Treasury notified the
Company that the ruling recognizing TSIs tax exemption was terminated effective December 31,
2002. The termination of the ruling responds to a new public policy set by the Department of
the Treasury according to which tax exemptions under Section 1101(6) of the Puerto Rico Code
(P.R. Code) will not apply to corporations organized as for-profit, which is TSIs case.On July 31, 2003, TSM and TSI executed a closing agreement with the Department of the
Treasury. In general, the terms of the closing agreement established the termination of TSIs
tax exemption effective December 31, 2002. Accordingly, since TSIs tax status changed
effective January 1, 2003, TSI is subject to Puerto Rico income taxes as an other-than-life
insurance entity, as defined in the P.R. Code. 9




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##### Table of Contents



TRIPLE-S MANAGEMENT CORPORATION
(Parent Company Only) Notes to Financial Statements December 31, 2004, 2003, and 2002 (Dollar amounts in thousands) The closing agreement also stipulated that TSM will pay taxes (Department of the Treasury tax
assessment) on TSIs accumulated statutory net income, in accordance with the income
recognition methodology applied by the Secretary of the Treasury in the closing agreement and
the ruling mentioned above. This tax ruling established the following methodology for TSM to
determine its tax liability:  
    TSIs accumulated statutory net income while operating under the tax exemption,
amounting to $132,763, was deemed distributed to TSM.
    For tax purposes, TSM recognized the exempt accumulated statutory net income as gross
income. On this amount, TSM recognized an income tax liability amounting to $51,774,
which was determined by applying a tax rate of 39% to the exempt accumulated statutory net income
deemed distributed to TSM. The income tax was recorded by TSM within the current income
tax expense presented in the consolidated statements of earnings. Of this tax, $37,000
was paid on July 31, 2003, the date of the closing agreement, and $14,774 on April 15,
2004. The income tax expense differs from the amount computed by applying the Puerto Rico statutory
income tax rate to net income before income taxes as a result of the following: 2004
    
    
    2003
    
    
    2002Income tax expense at statutory
rate of 39%
    
    $
    17,975
    
    
    
    30,387
    
    
    
    18,915Increase (decrease) in taxes resulting from:Equity in net income of wholly owned
subsidiaries
    
    
    (17,726
    )
    
    
    (30,317
    )
    
    
    (18,878
    )Disallowances
    
    
    (169
    )
    
    
    50
    
    
    
    105Department of Treasury tax assessment
    
    
    
    
    
    
    51,774
    
    
    
    Other, net
    
    
    208
    
    
    
    (207
    )
    
    
    109Total income tax expense
    
    $
    288
    

    
    
    51,687
    
    
    
    251
 10




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##### Table of Contents



TRIPLE-S MANAGEMENT CORPORATION
(Parent Company Only) Notes to Financial Statements December 31, 2004, 2003, and 2002 (Dollar amounts in thousands) Deferred income taxes reflect the tax effects of temporary differences between carrying
amounts of assets and liabilities for financial reporting purposes and income tax purposes.
The net deferred tax asset at December 31, 2004 and 2003 is composed of the following: 2004
    
    
    2003Deferred tax assets:Reserve for obsolete supplies inventory
    
    $
    42
    
    
    
    59Cash-flow hedge
    
    
    56
    
    
    
    234Employee benefit plan
    
    
    68
    
    
    
    24Postretirement benefits
    
    
    11
    
    
    
    8Deferred compensation
    
    
    206
    
    
    
    173Unrealized holding losses on investments classified as
available for sale by the Company
    
    
    21
    
    
    
    29Deferred tax assets  current
    
    
    404
    
    
    
    527Additional minimum pension liability
    
    
    92
    
    
    
    129Nondeductible depreciation
    
    
    423
    
    
    
    468Total deferred tax assets
    
    $
    919
    
    
    
    1,124
 11




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##### Table of Contents



TRIPLE-S MANAGEMENT CORPORATION
(Parent Company Only) Notes to Financial Statements December 31, 2004, 2003, and 2002 (Dollar amounts in thousands)  In assessing the realizability of deferred tax assets, management considers whether it is more
likely than not that some portion or all of the deferred tax assets will not be realized. The
ultimate realization of deferred tax assets is dependent upon the generation of future taxable
income during the periods in which those temporary differences become deductible. Management
believes it is more likely than not that the Company will realize the benefits of these
deductible differences.(7)
    Transaction with Related PartiesThe following are the significant related-party transactions made for the three-year period
ended December 31, 2004: 2004
    
    
    2003
    
    
    2002Rent charges to subsidiaries
    
    $
    6,083
    
    
    
    5,772
    
    
    
    5,644Interest charged to subsidiary on
notes receivable
    
    
    734
    
    
    
    658
    
    
    
    829
  (8)
    ContingenciesAt December 31, 2004, the Company is defendant in various lawsuits in the ordinary course of
business. In the opinion of management, with the advice of its legal counsel, the ultimate
disposition of these matters will not have a material adverse effect on the consolidated
financial position and results of operations of the Company. 12




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##### Table of Contents



Schedule III Triple-S Management Corporation and Subsidiaries
Supplementary Insurance Information
For the years ended December 31, 2004, 2003 and 2002 (Dollar amounts in thousands) Deferred
    
    
    
    
    
    
    
    
    
    
    Other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Amortization ofPolicy
    
    
    
    
    
    
    
    
    
    
    Policy Claims
    
    
    
    
    
    
    Net
    
    
    
    
    
    
    Deferred Policy
    
    
    Other
    
    
    NetAcquisition
    
    
    Claim
    
    
    Unearned
    
    
    and Benefits
    
    
    Premium
    
    
    Investment
    
    
    Claims
    
    
    Acquisition
    
    
    Operating
    
    
    PremiumsSegment
    
    Costs
    
    
    Liabilities
    
    
    Premiums
    
    
    Payable
    
    
    Revenue
    
    
    Income
    
    
    Incurred
    
    
    Costs
    
    
    Expenses
    
    
    Written2004Health insurance  Commercial Program
    
    $
    
    
    
    $
    101,773
    
    
    $
    6,249
    
    
    $
    
    
    
    $
    724,734
    
    
    $
    12,590
    
    
    $
    620,750
    
    
    $
    
    
    
    $
    94,930
    
    
    $
    724,734Health insurance  Reform Program
    
    
    
    
    
    
    67,137
    
    
    
    
    
    
    
    
    
    
    
    484,742
    
    
    
    3,109
    
    
    
    437,835
    
    
    
    
    
    
    
    35,777
    
    
    
    484,742Property and casualty insurance
    
    
    17,825
    
    
    
    89,627
    
    
    
    77,853
    
    
    
    
    
    
    
    86,228
    
    
    
    7,668
    
    
    
    45,977
    
    
    
    22,388
    
    
    
    17,794
    
    
    
    89,659Other non-reportable segments, parent
company operations and net
consolidating entries.
    
    
    887
    
    
    
    20,788
    
    
    
    481
    
    
    
    
    
    
    
    12,497
    
    
    
    3,132
    
    
    
    11,231
    
    
    
    66
    
    
    
    924
    
    
    
    16,442Total
    
    $
    18,712
    
    
    $
    279,325
    
    
    $
    84,583
    
    
    $
    
    
    
    $
    1,308,201
    
    
    $
    26,499
    
    
    $
    1,115,793
    
    
    $
    22,454
    
    
    $
    149,425
    
    
    $
    1,315,5772003Health insurance  Commercial Program
    
    $
    
    
    
    $
    93,273
    
    
    $
    5,833
    
    
    $
    
    
    
    $
    702,853
    
    
    $
    10,734
    
    
    $
    584,448
    
    
    $
    
    
    
    $
    92,264
    
    
    $
    702,853Health insurance  Reform Program
    
    
    
    
    
    
    66,243
    
    
    
    
    
    
    
    
    
    
    
    477,614
    
    
    
    4,476
    
    
    
    428,045
    
    
    
    
    
    
    
    34,637
    
    
    
    477,614Property and casualty insurance
    
    
    16,179
    
    
    
    72,431
    
    
    
    72,785
    
    
    
    
    
    
    
    78,334
    
    
    
    6,824
    
    
    
    43,390
    
    
    
    19,461
    
    
    
    17,893
    
    
    
    84,357Other non-reportable segments, parent
company operations and net
consolidating entries.
    
    
    492
    
    
    
    15,973
    
    
    
    86
    
    
    
    
    
    
    
    13,915
    
    
    
    2,645
    
    
    
    9,467
    
    
    
    29
    
    
    
    894
    
    
    
    17,403Total
    
    $
    16,671
    
    
    $
    247,920
    
    
    $
    78,704
    
    
    $
    
    
    
    $
    1,272,716
    
    
    $
    24,679
    
    
    $
    1,065,350
    
    
    $
    19,490
    
    
    $
    145,688
    
    
    $
    1,282,2272002Health insurance  Commercial Program
    
    $
    
    
    
    $
    102,120
    
    
    $
    6,119
    
    
    $
    
    
    
    $
    680,313
    
    
    $
    10,577
    
    
    $
    574,874
    
    
    $
    
    
    
    $
    86,321
    
    
    $
    680,313Health insurance  Reform Program
    
    
    
    
    
    
    73,900
    
    
    
    
    
    
    
    
    
    
    
    487,000
    
    
    
    5,106
    
    
    
    445,039
    
    
    
    
    
    
    
    36,109
    
    
    
    487,000Property and casualty insurance
    
    
    13,747
    
    
    
    55,757
    
    
    
    64,757
    
    
    
    
    
    
    
    60,688
    
    
    
    6,579
    
    
    
    34,334
    
    
    
    13,728
    
    
    
    11,820
    
    
    
    72,475Other non-reportable segments, parent
company operations and net
consolidating entries.
    
    
    23
    
    
    
    12,805
    
    
    
    85
    
    
    
    
    
    
    
    12,216
    
    
    
    2,516
    
    
    
    7,733
    
    
    
    
    
    
    
    561
    
    
    
    14,482Total
    
    $
    13,770
    
    
    $
    244,582
    
    
    $
    70,961
    
    
    $
    
    
    
    $
    1,240,217
    
    
    $
    24,778
    
    
    $
    1,061,980
    
    
    $
    13,728
    
    
    $
    134,811
    
    
    $
    1,254,270




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##### Table of Contents



Schedule IV Triple-S Management Corporation and Subsidiaries
Reinsurance
For the years ended December 31, 2004, 2003 and 2002 (Dollar amounts in thousands) PercentageCeded to
    
    
    Assumed
    
    
    
    
    
    
    of AmountGross
    
    
    Other
    
    
    from Other
    
    
    Net
    
    
    AssumedAmount
    
    
    Companies (1)
    
    
    Companies
    
    
    Amount
    
    
    to Net2004Life insurance in force
    
    $
    4,575,470
    
    
    
    
    
    
    
    
    
    
    
    4,575,470
    
    
    
    0.0
    %Premiums:Life insurance
    
    $
    23,709
    
    
    
    7,267
    
    
    
    
    
    
    
    16,442
    
    
    
    0.0
    %Accident and health insurance
    
    
    1,210,584
    
    
    
    1,108
    
    
    
    
    
    
    
    1,209,476
    
    
    
    0.0
    %Property and casualty insurance
    
    
    141,874
    
    
    
    52,215
    
    
    
    
    
    
    
    89,659
    
    
    
    0.0
    %Total premiums
    
    $
    1,376,167
    
    
    
    60,590
    
    
    
    
    
    
    
    1,315,577
    
    
    
    0.0
    %2003Life insurance in force
    
    $
    6,027,145
    
    
    
    2,865,885
    
    
    
    
    
    
    
    3,161,260
    
    
    
    0.0
    %Premiums:Life insurance
    
    $
    24,703
    
    
    
    7,300
    
    
    
    
    
    
    
    17,403
    
    
    
    0.0
    %Accident and health insurance
    
    
    1,180,467
    
    
    
    
    
    
    
    
    
    
    
    1,180,467
    
    
    
    0.0
    %Property and casualty insurance
    
    
    128,127
    
    
    
    43,770
    
    
    
    
    
    
    
    84,357
    
    
    
    0.0
    %Total premiums
    
    $
    1,333,297
    
    
    
    51,070
    
    
    
    
    
    
    
    1,282,227
    
    
    
    0.0
    %2002Life insurance in force
    
    $
    5,039,598
    
    
    
    1,888,567
    
    
    
    
    
    
    
    3,151,031
    
    
    
    0.0
    %Premiums:Life insurance
    
    $
    20,929
    
    
    
    6,447
    
    
    
    
    
    
    
    14,482
    
    
    
    0.0
    %Accident and health insurance
    
    
    1,167,313
    
    
    
    
    
    
    
    
    
    
    
    1,167,313
    
    
    
    0.0
    %Property and casualty insurance
    
    
    112,281
    
    
    
    39,806
    
    
    
    
    
    
    
    72,475
    
    
    
    0.0
    %Total premiums
    
    $
    1,300,523
    
    
    
    46,253
    
    
    
    
    
    
    
    1,254,270
    
    
    
    0.0
    %2001Life insurance in force
    
    $
    3,984,033
    
    
    
    1,777,518
    
    
    
    
    
    
    
    2,206,515
    
    
    
    0.0
    %Premiums:Life insurance
    
    $
    17,997
    
    
    
    4,571
    
    
    
    
    
    
    
    13,426
    
    
    
    0.0
    %Accident and health insurance
    
    
    1,092,334
    
    
    
    
    
    
    
    
    
    
    
    1,092,334
    
    
    
    0.0
    %Property and casualty insurance
    
    
    96,831
    
    
    
    39,607
    
    
    
    
    
    
    
    57,224
    
    
    
    0.0
    %Total premiums
    
    $
    1,207,162
    
    
    
    44,178
    
    
    
    
    
    
    
    1,162,984
    
    
    
    0.0
    %2000Life insurance in force
    
    $
    3,507,903
    
    
    
    1,716,399
    
    
    
    
    
    
    
    1,791,504
    
    
    
    0.0
    %Premiums:Life insurance
    
    $
    15,590
    
    
    
    4,014
    
    
    
    
    
    
    
    11,576
    
    
    
    0.0
    %Accident and health insurance
    
    
    1,028,140
    
    
    
    
    
    
    
    
    
    
    
    1,028,140
    
    
    
    0.0
    %Property and casualty insurance
    
    
    87,128
    
    
    
    31,208
    
    
    
    
    
    
    
    55,920
    
    
    
    0.0
    %Total premiums
    
    $
    1,130,858
    
    
    
    35,222
    
    
    
    
    
    
    
    1,095,636
    
    
    
    0.0
    %1999Life insurance in force
    
    $
    2,237,830
    
    
    
    1,429,342
    
    
    
    
    
    
    
    808,488
    
    
    
    0.0
    %Premiums:Life insurance
    
    $
    13,697
    
    
    
    2,979
    
    
    
    
    
    
    
    10,718
    
    
    
    0.0
    %Accident and health insurance
    
    
    919,976
    
    
    
    
    
    
    
    
    
    
    
    919,976
    
    
    
    0.0
    %Property and casualty insurance
    
    
    77,250
    
    
    
    30,847
    
    
    
    
    
    
    
    46,403
    
    
    
    0.0
    %Total premiums
    
    $
    1,010,923
    
    
    
    33,826
    
    
    
    
    
    
    
    977,097
    
    
    
    0.0
    %
   (1)
    
    Premiums ceded on the life insurance business are net of commission income on reinsurance amounting
to $699, $516 and $510 for the years ended December 31, 2004, 2003 and 2002.




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##### Table of Contents



Schedule V Triple-S Management Corporation and Subsidiaries
Valuation and Qualifying Accounts
For the years ended December 31, 2004, 2003 and 2002 (Dollar amounts in thousands) AdditionsBalance at
    
    
    Charged to
    
    
    Charged to
    
    
    
    
    
    
    Balance atBeginning of
    
    
    Costs and
    
    
    Other Accounts
    
    
    Deductions -
    
    
    End ofPeriod
    
    
    Expenses
    
    
    - Describe (1)
    
    
    Describe (2)
    
    
    Period2004Allowance for doubtful receivables
    
    $
    9,015
    
    
    
    5,166
    
    
    
    
    
    
    
    (3,008
    )
    
    
    11,1732003Allowance for doubtful receivables
    
    $
    13,794
    
    
    
    3,068
    
    
    
    290
    
    
    
    (8,137
    )
    
    
    9,0152002Allowance for doubtful receivables
    
    $
    11,678
    
    
    
    5,402
    
    
    
    (55
    )
    
    
    (3,231
    )
    
    
    13,7942001Allowance for doubtful receivables
    
    $
    8,791
    
    
    
    4,592
    
    
    
    
    
    
    
    (1,705
    )
    
    
    11,6782000Allowance for doubtful receivables
    
    $
    8,410
    
    
    
    3,853
    
    
    
    72
    
    
    
    (3,544
    )
    
    
    8,7911999Allowance for doubtful receivables
    
    $
    10,569
    
    
    
    2,607
    
    
    
    
    
    
    
    (4,766
    )
    
    
    8,410
   (1)
    
    Represents the recovery of accounts previously written-off.(2)
    
    Deductions represent the write-off of accounts deemed uncollectible.