Alleghany Announces 2004 Results.NEW YORK New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of -- Alleghany Corporation (NYSE-Y) reported net earnings from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the in 2004 of $117.9 million, or $15.34 per share (per share information throughout is presented on a diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. basis), compared with net earnings from continuing operations of $166.2 million, or $21.79 per share, in 2003, Weston Weston, town (1990 pop. 10,200), Middlesex co., E Mass., W of Boston; settled c.1642, set off from Watertown and inc. 1713. The town is mainly residential. Regis College, the Weston College Geophysical Observatory, and many 18th-century buildings are there. M. Hicks Hicks , Edward 1780-1849. American painter of primitive works, notably The Peaceable Kingdom, of which nearly 100 versions exist. , President and chief executive officer of Alleghany, announced today. Alleghany's common stockholders' equity Stockholders' Equity The portion of the balance sheet that includes capital received from investors in exchange for stock (paid-in capital), donated capital, and retained earnings. This is equal to total assets minus liabilities, preferred stock and intangible assets. per share at December December: see month. 31, 2004 was $228.77, an increase of 11.9% percent from common stockholders' equity per share of $204.44 as of December 31, 2003 (as adjusted for the stock dividend declared de·clare v. de·clared, de·clar·ing, de·clares v.tr. 1. To make known formally or officially. See Synonyms at announce. 2. To state emphatically or authoritatively; affirm. 3. in March 2004). On a consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: basis, cash and invested assets were $2.5 billion at December 31, 2004, an increase of 30.8 % from approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $1.9 billion at December 31, 2003. "We are pleased that our insurance subsidiaries recorded an underwriting profit Underwriting profit is a term used in the insurance industry. It consists of the earned premium remaining after losses have been paid and administrative expenses have been deducted. It does not include any investment income earned on held premiums. of $74.2 million in 2004, despite significant catastrophe Catastrophe, from the Greek Καταστροφή (katastrephein), literally means "to turn" (strephein) "downwards" (kata-). loss activity in the 2004 third quarter, and that our common stockholders' equity per share has increased 11.9% since the end of 2003" said Mr. Hicks. 2004 net catastrophe losses (including reinsurance The contract made between an insurance company and a third party to protect the insurance company from losses. The contract provides for the third party to pay for the loss sustained by the insurance company when the company makes a payment on the original contract. reinstatement Reinstatement The restoration of an insurance policy after it has lapsed for nonpayment of premiums. premiums and net of reinsurance), after tax ("after tax" throughout assumes tax at the federal income tax rate) were $106.5 million, or $13.83 per share, compared with $12.1 million, or $1.59 per share, in 2003. Alleghany's 2004 results include net gains on investment transactions after tax of $56.5 million, or $7.33 per share, compared with $98.7 million, or $12.92 per share, in 2003. 2004 net earnings from continuing operations adjusted to exclude gains on investment transactions after tax and net catastrophe losses after tax were $167.9 million, or $21.84 per share, compared with $79.6 million, or $10.46 per share, in 2003.
Years Ended December 31,
Per Share(1)
---------------------
(in millions, except for per
share and share amounts) 2004 2003 2004 2003
Net earnings from continuing
operations $117.9 $166.2 $15.34 $21.79
Adjustments:
Add: Net catastrophe
losses (2) 106.5 12.1 13.83 1.59
Deduct: Net gains on
investment transactions (3) (56.5) (98.7) (7.33) (12.92)
------- -------- ---------- ----------
Net earnings from continuing
operations, as adjusted (4) $167.9 $79.6 $21.84 $10.46
Average number of outstanding
shares of common stock (5) 7,699,981 7,639,459
(1) Represents diluted earnings per share of common stock and includes
the impact to net earnings which arises when dilutive securities
are included following the "if-converted" method.
(2) Including reinsurance reinstatement premiums and net of
reinsurance, after tax.
(3) After tax.
(4) Adjusted to exclude net gains on investment transactions after tax
and net catastrophe losses after tax.
(5) Adjusted to reflect the dividend of common stock declared in March
2004.
2004 net earnings including discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. were $117.7 million, or $15.31 per share, compared with $162.4 million, or $21.29 per share, in 2003. Discontinued operations consist of the operations of Heads & Threads International LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control prior to its disposition Act of disposing; transferring to the care or possession of another. The parting with, alienation of, or giving up of property. The final settlement of a matter and, with reference to decisions announced by a court, a judge's ruling is commonly referred to as disposition, regardless of in December 2004. In the fourth quarter of 2004, Alleghany's net earnings from continuing operations were $57.6 million, or $7.47 per share, compared with $76.7 million, or $10.00 per share, in the fourth quarter of 2003. Net gains on investment transactions after tax were $27.7 million, or $3.60 per share, in the 2004 fourth quarter, compared with $44.9 million, or $5.86 per share, in the 2003 fourth quarter. Alleghany had no fourth quarter 2004 catastrophe losses, compared with $1.4 million, or $0.18 per share, of after tax catastrophe losses, net of reinsurance, in the 2003 fourth quarter. Fourth quarter 2004 net earnings from continuing operations adjusted to exclude gains on investment transactions after tax and net catastrophe losses after tax were $29.9 million, or $3.87 per share, compared with $33.2 million, or $4.32 per share, in the corresponding 2003 period.
Three Months Ended December 31,
Per Share(1)
---------------------
(in millions, except for per
share and share amounts) 2004 2003 2004 2003
Net earnings from continuing
operations $57.6 $76.7 $7.47 $10.00
Adjustments:
Add: Net catastrophe
losses (2) $ -- $1.4 $ -- $0.18
Deduct: Net gains on
investment transactions (3) (27.7) (44.9) (3.60) (5.86)
-------- -------- ---------- ----------
Net earnings from continuing
operations, as adjusted (4) $29.9 $33.2 $3.87 $4.32
Average number of outstanding
shares of common stock (5) 7,708,146 7,668,601
(1) Represents diluted earnings per share of common stock and includes
the impact to net earnings which arises when dilutive securities
are included following the "if-converted" method.
(2) Including reinsurance reinstatement premiums and net of
reinsurance, after tax.
(3) After tax.
(4) Adjusted to exclude net gains on investment transactions after tax
and net catastrophe losses after tax.
(5) Adjusted to reflect the dividend of common stock declared in March
2004.
2004 fourth quarter net earnings including discontinued operations were $53.9 million, or $6.99 per share, compared with $73.8 million, or $9.62 per share, in the corresponding 2003 period. The comparative contributions to earnings (losses) before taxes made by Alleghany's operating units operating unit A type of operating company that engages in transactions with outsiders and that is owned by another business. For example, in 1995 the stockholders of Capital Cities/ABC approved a $19 billion merger with the Walt Disney Company, whereupon Alleghany Insurance Holdings LLC ("AIHL AIHL Australian Ice Hockey League ," a holding company for Alleghany's property and casualty insurance businesses, consisting of RSUI RSUI Rescue Swimmer Under Instruction (USMC) Group, Inc. ("RSUI") (from July July: see month. 1, 2003), Capitol Capitol, seat of the U.S. Congress Capitol, seat of the U.S. government at Washington, D.C. It is the city's dominating monument, built on an elevated site that was chosen by George Washington in consultation with Major Pierre L'Enfant. Transamerica Corporation Transamerica Corporation is a holding company for various life insurance companies and investment firms doing business primarily in the United States. Transamerica began as a holding company controlled by A. P. ("CATA Cat´a 1. The Latin and English form of a Greek preposition, used as a prefix to signify
Three Months Ended Years Ended
December 31, December 31,
-------------- ---------------
2004 2003 2004 2003
AIHL $89.0 $52.2 $173.4 $134.8
World Minerals 4.4 7.4 21.2 25.7
Corporate activities (8.8) 56.3 (24.5) 84.8
------ ------- ------- -------
Total $84.6 $115.9 $170.1 $245.3
====== ======= ======= =======
AIHL recorded pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta earnings of $89.0 million on revenues of $268.4 million in the 2004 fourth quarter, compared with pre-tax earnings of $52.2 million on revenues of $213.1 million in the fourth quarter of 2003, and pre-tax earnings of $173.4 million on revenues of $933.1 million in 2004, compared with pre-tax earnings of $134.8 million on revenues of $511.5 million in 2003. AIHL's 2004 pre-tax earnings include net investment income after tax of $33.6 million and net gains on investment transactions after tax of $54.9 million, compared with $19.5 million and $35.7 million in 2003. The comparative pre-tax contributions Pre-tax contribution Payment to an account made with funds from a worker's paycheck before federal income taxes are deducted. to AIHL's results made by its operating units RSUI, CATA and Darwin, and total AIHL results, were as follows (in millions, except ratios):
Three Months Ended December 31,
RSUI(1) CATA(2) Darwin(3) AIHL
--------- --------- --------- -------
2004
--------------------------------
Gross premiums written (4) $315.9 $41.9 $34.4 $392.2
Net premiums written (4) 165.3 38.0 24.7 228.0
Net premiums earned 159.5 38.3 16.1 213.9
Loss and loss adjustment
expenses 78.1 25.0 10.2 113.3
Underwriting expenses 32.3 19.6 5.7 57.5
--------- --------- --------- -------
Underwriting profit (loss) (5) $49.2 $(6.3) $0.2 $43.1
========= ========= ========= -------
Interest, dividend and other
income 12.4
Net gains on investment
transactions 42.0
Other expenses 8.5
-------
Earnings before income taxes $89.0
=======
Loss ratio (6) 48.9% 65.3% 63.5% 53.0%
Expense ratio (7) 20.2% 51.2% 35.2% 26.9%
Combined ratio (8) 69.2% 116.5% 98.7% 79.9%
2003
--------------------------------
Gross premiums written (4) $441.5(9) $39.2 $15.9 $496.6
Net premiums written (4) 165.8 34.5 10.6 210.9
Net premiums earned 158.0 35.2 2.9 196.1
Loss and loss adjustment
expenses 68.4 39.8 1.7 109.9
Underwriting expenses 26.5 17.1 1.7 45.3
--------- --------- --------- -------
Underwriting profit (loss) (5) $63.1 $(21.7) $(0.5) $40.9
========= ========= ========= -------
Interest, dividend and other
income 9.1
Net gains on investment
transactions 7.8
Other expenses 5.6
-------
Earnings before income taxes $52.2
=======
Loss ratio (6) 43.3% 113.0% 59.1% 56.0%
Expense ratio (7) 16.8% 48.5% 58.0% 23.1%
Combined ratio (8) 60.1% 161.5% 117.1% 79.1%
Year Ended December 31,
RSUI(1) CATA(2) Darwin(3) AIHL
--------- --------- --------- ---------
2004
------------------------------
Gross premiums written (4) $1,223.8 $174.0 $100.5 $1,498.3
Net premiums written (4) 630.5 156.1 70.5 857.2
Net premiums earned 609.3 150.0 46.1 805.4
Loss and loss adjustment
expenses 423.6 87.6 29.3 540.6
Underwriting expenses 102.5 71.3 16.8 190.6
--------- --------- --------- ---------
Underwriting profit (loss) (5) $83.2 $(8.9) $(0.0) $74.2
========= ========= ========= ---------
Interest, dividend and other
income 43.2
Net gain on investment
transactions 84.5
Other expenses 28.5
---------
Earnings before income taxes $173.4
=========
Loss ratio (6) 69.5% 58.4% 63.6% 67.1%
Expense ratio (7) 16.8% 47.5% 36.5% 23.7%
Combined ratio (8) 86.3% 105.9% 100.1% 90.8%
2003
------------------------------
Gross premiums written (4) $931.3(9) $162.7 $24.2 $1,118.2
Net premiums written (4) 622.9 141.4 18.2 782.5
Net premiums earned 293.8 133.0 4.1 430.9
Loss and loss adjustment
expenses 150.1 97.6 2.5 250.2
Underwriting expenses 52.0 56.8 4.9 113.7
--------- --------- --------- ---------
Underwriting profit (loss) (5) $91.8 $(21.4) $(3.3) $67.0
========= ========= ========= ---------
Interest, dividend and other
income 25.7
Net gain on investment
transactions 54.9
Other expenses 12.8
---------
Earnings before income taxes $134.8
=========
Loss ratio (6) 51.1% 73.4% 60.8% 58.1%
Expense ratio (7) 17.7% 42.7% 120.1% 26.4%
Combined ratio (8) 68.8% 116.1% 180.9% 84.5%
(1) Since July 1, 2003.
(2) Includes the results of Platte River Insurance Company, which was
acquired contemporaneously with CATA in January 2002 and operates
in conjunction with CATA.
(3) Although Darwin is an underwriting manager for Platte River and
certain subsidiaries of CATA, Darwin is managed on an operating
unit basis and therefore, the results of business generated by
Darwin have been separated from CATA's results for purposes of
this table.
(4) Amounts do not reflect the impact of an inter-company pooling
agreement.
(5) Represents net premiums earned less loss and loss adjustment
expenses and underwriting expenses, all as determined in
accordance with generally accepted accounting principles in the
United States of America ("GAAP"), and does not include interest,
dividend and other income or net gains on investment transactions.
Underwriting profit (loss) does not replace net income (loss)
determined in accordance with GAAP as a measure of profitability;
rather, Alleghany believes that underwriting profit (loss), which
does not include interest, dividend and other income or net gains
on investments transactions, enhances the understanding of AIHL's
insurance operating units' operating results by highlighting net
income attributable to their underwriting performance. With the
addition of interest, dividend and other income and net gains on
investment transactions, reported pre-tax net income (a GAAP
measure) may show a profit despite an underlying underwriting
loss. Where such underwriting losses persist over extended
periods, an insurance company's ability to continue as an ongoing
concern may be at risk. Therefore, Alleghany views underwriting
(loss) profit as an important measure in the overall evaluation of
performance.
(6) Loss and loss adjustment expenses divided by net premiums earned,
all as determined in accordance with GAAP.
(7) Underwriting expenses divided by net premiums earned, all as
determined in accordance with GAAP.
(8) The sum of the Loss Ratio and Expense Ratio, all as determined in
accordance with GAAP, representing the percentage of each premium
dollar an insurance company has to spend on losses (including loss
adjustment expenses) and underwriting expenses.
(9) Includes $320.8 million of unearned premiums which were acquired
with RSUI in July 2003 and $169.9 million of premiums assumed on a
net basis.
RSUI reported an underwriting profit of $83.2 million in 2004, despite recording $157.2 million of pre-tax catastrophe losses (including $10.5 million of reinsurance reinstatement premiums), net of reinsurance, related to 2004 third quarter hurricane hurricane, tropical cyclone in which winds attain speeds greater than 74 mi (119 km) per hr. Wind speeds reach over 190 mi (289 km) per hr in some hurricanes. activity. RSUI's underwriting profit of $91.8 million for the period July 1, 2003 through year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. 2003 reflected strong markets in its lines of business and aggregate pre-tax catastrophe losses of $18.7 million. RSUI reported $1,223.8 million of gross premiums written When a non-life insurance company closes a contract to provide insurance against loss, the revenues (premiums) expected to be received over the life of the contract are called gross premiums written. in 2004, reflecting strong markets in all lines of business except property, with the increase in underwriting Underwriting 1. The process by which investment bankers raise investment capital from investors on behalf of corporations and governments that are issuing securities (both equity and debt). 2. The process of issuing insurance policies. expenses in 2004 primarily reflecting costs incurred in transitioning from a managing agency to an integrated insurance company and the increase in the growth of the business. The significant increase in loss and loss adjustment expenses in 2004 reflects gross property catastrophe losses of $401.8 million from the 2004 third quarter hurricanes as well as a full year of operations in 2004. This increase in loss reserves was partially offset by an $18.1 million net reduction in property loss reserves due to better than expected loss emergence in the 2003 accident year. CATA's 2004 underwriting loss of $8.9 million primarily reflects $10.9 million of prior year reserve strengthening upon completion of a reserve analysis during the 2004 fourth quarter which showed higher than expected emergence for construction defect defect - bug claims, as well as higher underwriting expenses, partially offset by better underwriting margins on the current accident year. With respect to the prior year reserve strengthening, $9.7 million related to commercial multiple peril The designated contingency, risk, or hazard against which an insured seeks to protect himself or herself when purchasing a policy of insurance. Among the various types of perils for which insurance coverage is available are fire, theft, illness, and death. PERIL. lines, principally construction defect claims. CATA's 2003 underwriting loss of $21.4 million primarily reflects $20.7 million of loss reserve strengthening related to assumed reinsurance treaties Reinsurance Treaty (June 18, 1887) Secret agreement between Germany and Russia. Arranged by Otto von Bismarck after the collapse of the Three Emperors' League, it provided that each party would remain neutral if either became involved in a war with a third nation, and that written by Capitol Indemnity Recompense for loss, damage, or injuries; restitution or reimbursement. An indemnity contract arises when one individual takes on the obligation to pay for any loss or damage that has been or might be incurred by another individual. between 1969 and 1976. CATA's increase in gross premiums written during the two-year period ended December 31, 2004 primarily reflects the expansion of its business into the excess and surplus markets. Underwriting expenses have increased during the same two-year period, primarily reflecting the growth of the business, information technology initiatives and personnel costs. Darwin's underwriting loss of $36,000 in 2004 and $3.3 million in 2003 reflect organizational build-up build·up also build-up n. 1. The act or process of amassing or increasing: a military buildup; a buildup of tension during the strike. 2. expenses incurred to support premium levels, as well as increased competition across all of its lines of business. Darwin generated approximately $100.5 million of gross premiums written in 2004, its first full-year of operations, compared with $24.2 million during the period from May 2003 to 2003 year-end. World Minerals recorded pre-tax earnings of $21.2 million on revenues of $285.4 million in 2004, compared with pre-tax earnings of $25.7 million on revenues of $266.3 million in 2003. Revenues in 2004 reflect a 7.3 percent increase in net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight over 2003, primarily due to increased demand, particularly with respect to the diatomite business, as well as the favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. impact of the strengthening of the Euro against the dollar (had the Euro to dollar exchange rate remained constant with that of 2003, World Minerals' revenues would have increased by approximately four percent). The 17.5 percent decrease in pre-tax earnings in 2004 from 2003 primarily reflects lower operating margins Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: due to competitive pricing pressures and rising energy and operational costs, increased selling, general and administrative expenses, a $1.5 million write-down Write-Down Reducing the book value of an asset because it is overvalued compared to the market value. Notes: This is usually reflected in the company's income statement as an expense, thereby reducing net income. of certain assets in World Minerals' Quincy, Florida Quincy is a city in Gadsden County, Florida, United States. The population was 6,982 at the 2000 census. As of 2004, the population recorded by the U.S. Census Bureau is 6,975 [1]. It is the county seat of Gadsden CountyGR6. plant, higher interest expense and foreign exchange translation losses with respect to World Minerals' Latin Lat·in n. 1. a. The Indo-European language of the ancient Latins and Romans and the most important cultural language of western Europe until the end of the 17th century. b. American American, river, 30 mi (48 km) long, rising in N central Calif. in the Sierra Nevada and flowing SW into the Sacramento River at Sacramento. The discovery of gold at Sutter's Mill (see Sutter, John Augustus) along the river in 1848 led to the California gold rush of operations. World Minerals' 2003 results primarily reflect the favorable impact of the strengthening of the Euro against the dollar (had foreign exchange rates remained constant with those of 2002, World Minerals' revenues would have been approximately flat) and a modest increase in net sales offset by lower margins due to competitive pricing pressures and increased labor and benefit costs. An impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. charge in connection with an announced closing of a plant in the United Kingdom and expenses related to staff reductions negatively impacted results by approximately $2.0 million after tax in 2003. Corporate activities recorded a pre-tax loss of $24.5 million on revenues of $22.5 million in 2004, compared with pre-tax earnings of $84.8 million on revenues of $127.2 million in the corresponding period in 2003. Corporate activities' 2004 results include $1.6 million of net gains on investment transactions after tax, compared with $63.0 million in the corresponding 2003 period. As of December 31, 2004, Alleghany beneficially owned 8.0 million shares, or approximately 2.1 percent, of the outstanding common stock of Burlington Burlington, town, Canada Burlington, town (1991 pop. 129,575), SE Ont., Canada, on Lake Ontario. First settled (1798) by Mohawk Loyalist Joseph Brandt, Burlington's economy was built on the shipment of wheat, lumber, and quarried rock by waterway. Northern Santa Fe Santa Fe, city, Argentina Santa Fe, city (1991 pop. 341,000), capital of Santa Fe prov., NE Argentina, a river port near the Paraná, with which it is connected by canal. Corporation, which had an aggregate market value on that date of approximately $378.5 million, or $47.31 per share, compared with a market value on December 31, 2003 of $258.8 million, or $32.35 per share. The aggregate cost of such shares is approximately $96.6 million, or $12.07 per share. Alleghany has previously announced that it may purchase shares of its common stock in open market transactions from time to time. In 2004, Alleghany did not purchase any shares of its common stock. As of December 31, 2004, Alleghany had 7,676,197 shares of common stock outstanding (which includes the stock dividend declared in March 2004). Additional information regarding the 2004 results of Alleghany and its operating businesses is contained in Alleghany's Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended December 31, 2004, to be filed with the U.S. Securities and Exchange Commission on or about March 8, 2005. Comment on Regulation G This press release includes certain non-GAAP financial measures. The reconciliations of such measures to the most comparable GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). figures are included herein. Throughout the press release Alleghany presents its operations in the way it believes will be most meaningful and useful to the investing public and others who use such information in evaluating Alleghany's results. In addition to the GAAP presentations of net earnings (loss), Alleghany also shows net earnings (loss) as adjusted to exclude both catastrophe losses and net gains on investment transactions after tax, a non-GAAP financial measure, which is intended to assist investors in analyzing the impact of such items. Catastrophe losses are significant to Alleghany's 2004 results and, similar to gains on investment transactions, can fluctuate significantly, which could distort the analysis of trends and comparability of reported periods. Investors should consider these non-GAAP measures in addition to, and not as a substitute for, measures of financial performance prepared in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with GAAP.
ALLEGHANY CORPORATION
COMBINING STATEMENTS OF EARNINGS
(dollars in thousands)
(unaudited)
THREE MONTHS ENDED DECEMBER 31, 2004
-----------------------------------------
ALLEGHANY
INSURANCE WORLD CORPORATE
HOLDINGS MINERALS ACTIVITIES COMBINED
-----------------------------------------
Revenues
Interest, dividend and
other income $12,446 $194 $4,238 $16,878
Net premiums earned 213,928 0 0 213,928
Net mineral and filtration
sales 0 73,984 0 73,984
Net gain (loss) on
investment transactions 41,990 0 657 42,647
-----------------------------------------
Total revenues 268,364 74,178 4,895 347,437
Costs and expenses
Underwriting expenses 57,569 0 0 57,569
Salaries, administrative
and other
operating expenses 8,423 14,009 981 23,413
Loss and loss adjustment
expenses 113,289 0 0 113,289
Cost of mineral and
filtration sales 0 55,129 0 55,129
Interest expense 0 656 709 1,365
Corporate administration 122 0 11,963 12,085
-----------------------------------------
Total costs and
expenses 179,403 69,794 13,653 262,850
-----------------------------------------
Earnings (loss) from continuing
operations
before income taxes $88,961 $4,384 ($8,758) 84,587
============================
Income taxes 26,972
Earnings from continuing operations 57,615
Discontinued operations
Loss from operations of disc.
operations (4,281)
Loss on disposal of disc. operations (1,950)
Income taxes (benefit) (2,529)
-------------
Losses from discontinued operations (3,702)
-------------
Net earnings $53,913
=============
THREE MONTHS ENDED DECEMBER 31, 2003
-------------------------------------
ALLEGHANY
INSURANCE WORLD CORPORATE
HOLDINGS MINERALS ACTIVITIES COMBINED
-------------------------------------
Revenues
Interest, dividend and other
income $9,103 ($31) $10,805 $19,877
Net premiums earned 196,155 0 0 196,155
Net mineral and filtration
sales 0 67,726 0 67,726
Net gain (loss) on investment
transactions 7,798 0 61,328 69,126
-------------------------------------
Total revenues 213,056 67,695 72,133 352,884
Costs and expenses
Underwriting expenses 45,308 0 0 45,308
Salaries, administrative and
other
operating expenses 5,590 10,972 1,454 18,016
Loss and loss adjustment
expenses 109,925 0 0 109,925
Cost of mineral and filtration
sales 0 48,853 0 48,853
Interest expense 0 493 718 1,211
Corporate administration 0 0 13,677 13,677
-------------------------------------
Total costs and expenses 160,823 60,318 15,849 236,990
-------------------------------------
Earnings (loss) from continuing
operations
before income taxes $52,233 $7,377 $56,284 115,894
============================
Income taxes 39,185
Earnings from continuing operations 76,709
Discontinued operations
Loss from operations of disc.
operations (3,643)
Loss on disposal of disc. operations 0
Income taxes (benefit) (722)
---------
Losses from discontinued operations (2,921)
---------
Net earnings $73,788
=========
ALLEGHANY CORPORATION
COMBINING STATEMENTS OF EARNINGS
(dollars in thousands)
(unaudited)
YEAR ENDED DECEMBER 31, 2004
-----------------------------------------------------
ALLEGHANY
INSURANCE WORLD CORPORATE
HOLDINGS MINERALS ACTIVITIES COMBINED
-----------------------------------------------------
Revenues Interest,
dividend and
other income $43,200 ($235) $20,088 $63,053
Net premiums
earned 805,417 0 0 805,417
Net mineral and
filtration sales 0 285,587 0 285,587
Net gain (loss)
on investment
transactions 84,478 0 2,392 86,870
----------------------------------------------------
Total
revenues 933,095 285,352 22,480 1,240,927
Costs and expenses
Underwriting
expenses 190,657 0 0 190,657
Salaries,
administrative
and other
operating
expenses 28,079 44,194 3,677 75,950
Loss and loss
adjustment
expenses 540,569 0 0 540,569
Cost of
mineral and
filtration
sales 0 217,546 0 217,546
Interest
expense 0 2,383 2,417 4,800
Corporate
administration 413 0 40,865 41,278
----------------------------------------------------
Total
costs
and
expenses 759,718 264,123 46,959 1,070,800
----------------------------------------------------
Earnings (loss) from
continuing operations
before income
taxes $173,377 $21,229 ($24,479) 170,127
======== ======= =========
Income taxes 52,179
Earnings from continuing
operations 117,948
Discontinued
operations
Earnings (loss) from operations
of disc. operations 917
Loss on disposal of
disc. operations (1,950)
Income taxes
(benefit) (781)
------------------------
Losses from discontinued
operations (252)
------------------------
Net earnings
$117,696
========================
YEAR ENDED DECEMBER 31, 2003
-------------------------------------
ALLEGHANY
INSURANCE WORLD CORPORATE
HOLDINGS MINERALS ACTIVITIES COMBINED
-------------------------------------
Revenues
Interest, dividend and other
income $25,672 $134 $30,258 $56,064
Net premiums earned 430,914 0 0 430,914
Net mineral and filtration
sales 0 266,136 0 266,136
Net gain (loss) on investment
transactions 54,945 0 96,897 151,842
-------------------------------------
Total revenues 511,531 266,270 127,155 904,956
Costs and expenses
Underwriting expenses 113,688 0 0 113,688
Salaries, administrative and
other
operating expenses 12,847 39,628 4,739 57,214
Loss and loss adjustment
expenses 250,202 0 0 250,202
Cost of mineral and filtration
sales 0 199,148 0 199,148
Interest expense 0 1,815 2,911 4,726
Corporate administration 0 0 34,678 34,678
-------------------------------------
Total costs and expenses 376,737 240,591 42,328 659,656
-------------------------------------
Earnings (loss) from continuing
operations
before income taxes $134,794 $25,679 $84,827 245,300
======== ======= ======= =======
Income taxes 79,112
Earnings from continuing operations 166,188
Discontinued operations
Earnings (loss) from operations of
disc. operations (4,933)
Loss on disposal of disc. operations 0
Income taxes (benefit) (1,123)
---------
Losses from discontinued operations (3,810)
---------
Net earnings
$162,378
=========
ALLEGHANY CORPORATION
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share amounts)
DECEMBER DECEMBER
31, 31,
2004 2003*
(audited) (audited)
----------- -----------
ASSETS
Available for sale securities at fair value:
Equity securities $645,184 $620,754
Debt securities 1,179,210 917,270
Short-term investments 378,452 135,079
----------- -----------
2,202,846 1,673,103
Cash 288,436 230,929
Notes receivable 91,665 92,082
Accounts receivable, net 70,547 99,697
Premium balances receivable 203,141 279,682
Reinsurance recoverables 623,325 174,099
Ceded unearned premium reserves 286,451 231,166
Deferred acquisition costs 56,165 47,282
Property and equipment - at cost, net of
accumulated depreciation 168,316 174,097
Inventory 41,521 35,164
Goodwill and other intangibles, net of
amortization 223,706 227,595
Deferred tax assets 104,563 77,640
Other assets 67,043 90,809
Assets of discontinued operations 0 85,153
----------- -----------
$4,427,725 $3,518,498
=========== ===========
LIABILITIES AND COMMON STOCKHOLDERS' EQUITY
Losses and loss adjustment expenses $1,232,337 $437,994
Unearned premiums 751,131 644,068
Reinsurance payable 112,479 255,117
Deferred tax liabilities 224,847 190,402
Subsidiaries' debt 138,258 148,998
Current taxes payable 17,433 49,605
Other liabilities 195,140 193,204
Liabilities of discontinued operations 0 36,288
----------- -----------
Total liabilities 2,671,625 1,955,676
Common stockholders' equity 1,756,100 1,562,822
----------- -----------
$4,427,725 $3,518,498
=========== ===========
COMMON SHARES OUTSTANDING (adjusted for stock
dividends) 7,675,313 7,644,232
=========== ===========
* Certain amounts have been restated and reclassified to
conform to the 2004 presentation.
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