Alleghany Announces Earnings.NEW YORK--(BUSINESS WIRE)--July 26, 1999-- 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 of Alleghany Corporation (NYSE NYSE See: New York Stock Exchange : Y) were $20.9 million, or $2.85 per share of common stock in the second quarter of 1999 compared with $17.2 millio Jr., President and chief executive officer of e, in the first six months of 1998. 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 $62.9 million, or $8.46 per share, in the first six months of 1998. Net gains on investment transactions from continuing operations before taxes in the second quarter of 1999 totalled $12.5 million, compared with net gains of $2.5 million in the second quarter of 1998. The gains in 1999 principally resulted from the sale by Alleghany of its holdings in Armco, Inc. In the second quarter of 1999, Alleghany's Alleghany Asset Management and World Minerals 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 recorded higher revenues and pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta earnings as compared with the second quarter of 1998. Alleghany Asset Management's improved results are largely due to an increase in assets under management Assets Under Management (AUM) is a term used by financial services companies in the mutual fund and money management or investment management business to gauge how much money they are managing. . As of June June: see month. 30, 1999, Alleghany Asset Management had $43.3 billion of assets under management, compared with $31.7 billion as of the same date in 1998. World Minerals' results improved largely due to the absence in 1999 of El Nino storms that impacted 1998 results. While Underwriters Re Group recorded higher revenues, it recorded lower pre-tax earnings as compared with the second quarter of 1998, primarily reflecting the soft 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. and insurance markets worldwide. In addition, Underwriters Re Group's 1999 second quarter results included a pre-tax gain of $232 thousand on sales of equity investments, compared with a pre-tax gain of $2.5 million in the second quarter of 1998.
Highlights are as follows
(in millions, except for shares and per share amounts):
Three Months Ended Six Months Ended
June 30 June 30
1999 1998 1999 1998
---- ---- ---- ----
Revenues from
continuing operations $339.3 $232.2 $615.4 $439.0
====== ====== ====== ======
Earnings from
continuing operations,
before taxes $36.7 $25.7 $60.6 $43.5
===== ===== ===== =====
Earnings from continuing
operations, net $20.9 $17.2 $36.8 $30.2
Earnings from
discontinued operations,
net (Chicago Title) $-- $11.5 $-- $32.7
--- ----- --- -----
Net earnings $20.9 $28.7 $36.8 $62.9
===== ===== ===== =====
Basic earnings per share
of common stock from
continuing operations(a) $2.85 $2.34 $5.01 $4.06
Basic earnings per share
of common stock from
discontinued operations
(Chicago Title)(a) $-- $1.56 $-- $4.40
--- ----- --- -----
Basic earnings per share
of common stock(a) $2.85 $3.90 $5.01 $8.46
===== ===== ===== =====
Diluted earnings per share
of common stock from
continuing operations(a) $2.80 $2.30 $4.93 $3.99
Diluted earnings per share
of common stock from
discontinued operations
(Chicago Title)(a) $-- $1.53 $-- $4.32
--- ----- --- -----
Diluted earnings per
share of common
stock(a) $2.80 $3.83 $4.93 $8.31
===== ===== ===== =====
Average number of
outstanding shares of
common stock(a) 7,331,284 7,373,312 7,347,323 7,435,518
(a) Adjusted to reflect the dividend of common stock declared
in March 1999.
The comparative contributions to earnings from continuing operations, before taxes made by Alleghany's operating units Underwriters Re Group, Inc. (reinsurance and insurance businesses), Alleghany Asset Management, Inc. (financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. business) and World Minerals Inc. (industrial minerals), as well as by Alleghany's parent company and other operations, were as follows (in millions):
Three Months Ended Six Months Ended
June 30 June 30
1999 1998 1999 1998
---- ---- ---- ----
Underwriters Re Group $ 9.9 $15.3 $21.0 $25.0
Alleghany Asset Management 13.9 9.2 28.3 17.2
World Minerals 7.0 4.9 11.4 8.5
Parent company and other 5.9 (3.7) (0.1) (7.2)
--- --- ---- ----
$36.7 $25.7 $60.6 $43.5
===== ===== ===== =====
On a per-share, after-tax basis After-tax basis The comparison basis used to analyze the net after-tax returns on a corporate taxable bond and a municipal tax-free bond. , the foregoing earnings contributions may be broken down as follows:
Three Months Ended June 30
Under- Alleghany Parent Total Discontinued
writers Asset World company from operations
Re Manage- Miner- and continuing (Chicago
Group ment als other operations Title) Total
-----------------------------------------------------------
1999
Operations $1.02 $1.04 $0.57 $(0.85) $1.78 $ -- $1.78
Security
transactions 0.02 -- -- 1.05 1.07 -- 1.07
------ ------ ------ ------- ------ ------ ------
Total $1.04 $1.04 $0.57 $ 0.20 $2.85 $ -- $2.85
===== ===== ===== ====== ===== ===== =====
1998
Operations $1.32 $0.76 $0.39 $(0.35) $2.12 $1.55 $3.67
Security
transactions 0.22 -- -- -- 0.22 0.01 0.23
------ ------ ------ ----- ------ ----- ------
Total $1.54 $0.76 $0.39 $(0.35) $2.34 $1.56 $3.90
===== ===== ===== ====== ===== ===== =====
Six Months Ended June 30
Under- Alleghany Parent Total Discontinued
writers Asset World company from operations
Re Manage- Miner- and continuing (Chicago
Group ment als other operations Title) Total
-----------------------------------------------------------
1999
Operations $2.05 $2.24 $0.95 $(1.33) $3.91 $ -- $3.91
Security
transactions 0.05 -- -- 1.05 1.10 -- 1.10
------ ------ ------ ----- ------ ----- ------
Total $2.10 $2.24 $0.95 $(0.28) $5.01 $ -- $5.01
===== ===== ===== ====== ===== ===== =====
1998
Operations $2.33 $1.42 $0.72 $(0.63) $3.84 $4.36 $8.20
Security
transactions 0.22 -- -- -- 0.22 0.04 0.26
------ ------ ------ ----- ------ ----- ------
Total $2.55 $1.42 $0.72 $(0.63) $4.06 $4.40 $8.46
===== ===== ===== ====== ===== ===== =====
As of June 30, 1999, Alleghany beneficially owned approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 22.29 million shares, or 4.7 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 $691.0 million, or $31.00 per share, compared with a market value on December December: see month. 31, 1998 of $763.4 million, or $34.25 per share. The aggregate cost of such shares is approximately $253.7 million, or $11.38 per share. Alleghany 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 June 30, 1999 (adjusted for the March 1999 stock dividend) was $163.26 per share, a 3 percent decrease from common stockholders' equity per share of $169.12 as of December 31, 1998, reflecting a decline in market prices of Alleghany's securities holdings.
ALLEGHANY CORPORATION AND SUBSIDIARIES
COMBINING STATEMENTS OF EARNINGS
(dollars in thousands)
(unaudited)
THREE MONTHS ENDED JUNE 30, 1999
UNDER- ALLEGHANY
WRITERS RE ASSET WORLD CORP.
GROUP MGMT. MINERALS ACT. COMBINED
Revenues
Investment management
fees $0 $40,579 $0 $0 $40,579
Net property and
casualty premiums earned 186,136 0 0 0 186,136
Interest, dividend and
other income 24,366 549 83 22,067 47,065
Net mineral and
filtration sales 0 0 53,420 0 53,420
Net gain (loss) on
investment transactions 232 0 0 11,878 12,110
Total revenues 210,734 41,128 53,503 33,945 339,310
Costs and expenses
Commissions and
brokerage expenses 40,062 0 0 0 40,062
Salaries, administrative
and other
operating expenses 20,260 27,205 10,117 19,991 77,573
Property and casualty
losses & LAE 136,496 0 0 0 136,496
Cost of mineral and
filtration sales 0 0 35,124 0 35,124
Interest expense 4,008 0 1,250 3,783 9,041
Corporate administration 0 0 0 4,288 4,288
--------- -------- -------
Total costs and expenses 200,826 27,205 46,491 28,062 302,584
Earnings (loss) from
continuing operations,
before income taxes $9,908 $13,923 $7,012 $5,883 36,726
Income taxes 15,839
Earnings from continuing
operations 20,887
Discontinued operations,
net of tax 0
Net earnings $20,887
THREE MONTHS ENDED JUNE 30, 1998
UNDER- ALLEGHANY
WRITERS RE ASSET WORLD CORP.
GROUP MGMT. MINERALS ACT.COMBINED
Revenues
Investment management
fees $0 $30,745 $0 $0 $30,745
Net property and
casualty premiums earned 104,054 0 0 0 104,054
Interest, dividend and
other income 20,760 558 (363) 22,925 43,880
Net mineral and
filtration sales 0 0 50,979 0 50,979
Net gain (loss) on
investment transactions 2,485 (8) 0 33 2,510
Total revenues 127,299 31,295 50,616 22,958 232,168
Costs and expenses
Commissions and
brokerage expenses 25,105 0 0 0 25,105
Salaries, administrative
and other
operating expenses 10,067 22,107 17,422 14,259 63,855
Property and casualty
losses & LAE 72,852 0 0 0 72,852
Cost of mineral and
filtration sales 0 0 27,150 0 27,150
Interest expense 4,006 0 1,166 2,933 8,105
Corporate administration 0 0 0 9,414 9,414
Total costs and expenses 112,030 22,107 45,738 26,606 206,481
Earnings (loss) from
continuing operations,
before income taxes $15,269 $9,188 $4,878 ($3,648) 25,687
Income taxes 8,459
Earnings from
continuing operations 17,228
Discontinued operations,
net of tax 11,484
Net earnings $28,712
ALLEGHANY CORPORATION AND SUBSIDIARIES
COMBINING STATEMENTS OF EARNINGS
(dollars in thousands)
(unaudited)
SIX MONTHS ENDED JUNE 30, 1999
UNDER- ALLEGHANY
WRITERS RE ASSET WORLD CORP.
GROUP MGMT. MINERALS ACT. COMBINED
Revenues
Investment management
fees $0 $79,952 $0 $0 $79,952
Net property and
casualty premiums earned 330,373 0 0 0 330,373
Interest, dividend and
other income 45,384 1,113 (203) 43,974 90,268
Net mineral and
filtration sales 0 0 102,306 0 102,306
Net gain (loss) on
investment transactions 600 0 0 11,873 12,473
Total revenues 376,357 81,065 102,103 55,847 615,372
Costs and expenses
Commissions and
brokerage expenses 77,196 0 0 0 77,196
Salaries, administrative
and other
operating expenses 33,527 52,714 20,011 40,492 146,744
Property and casualty
losses & LAE 236,654 0 0 0 236,654
Cost of mineral and
filtration sales 0 0 68,446 0 68,446
Interest expense 8,016 0 2,290 6,485 16,791
Corporate administration 0 0 0 8,946 8,946
Total costs and expenses 355,393 52,714 90,747 55,923 554,777
Earnings (loss) from
continuing operations,
before income taxes $20,964 $28,351 $11,356 ($76) 60,595
Income taxes 23,754
Earnings from continuing
operations 36,841
Discontinued operations,
net of tax 0
Net earnings $36,841
=======
ALLEGHANY CORPORATION AND SUBSIDIARIES
COMBINING STATEMENTS OF EARNINGS
(dollars in thousands)
(unaudited)
SIX MONTHS ENDED JUNE 30, 1998
UNDER- ALLEGHANY
WRITERS RE ASSET WORLD CORP.
GROUP MGMT. MINERALS ACT. COMBINED
Revenues
Investment management
fees $0 $55,793 $0 $0 $55,793
Net property and
casualty premiums earned 198,104 0 0 0 198,104
Interest, dividend and
other income 40,352 961 (396) 42,993 83,910
Net mineral and
filtration sales 0 0 98,667 0 98,667
Net gain (loss) on
investment transactions 2,453 0 0 33 2,486
Total revenues 240,909 56,754 98,271 43,026 438,960
Costs and expenses
Commissions and
brokerage expenses 50,215 0 0 0 50,215
Salaries, administrative
and other
operating expenses 19,591 39,533 27,858 28,785 115,767
Property and casualty
losses & LAE 138,057 0 0 0 138,057
Cost of mineral and
filtration sales 0 0 59,698 0 59,698
Interest expense 8,012 11 2,259 5,153 15,435
Corporate administration 0 0 0 16,253 16,253
Total costs and expenses 215,875 39,544 89,815 50,191 395,425
Earnings (loss) from
continuing operations,
before income taxes $25,034 $17,210 $8,456 ($7,165) 43,535
Income taxes 13,348
Earnings from continuing
operations 30,187
Discontinued operations,
net of tax 32,725
Net earnings $62,912
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