Alleghany Corporation Announces 2005 Second Quarter 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 -- 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-Y) in the second quarter of 2005 were $36.9 million, or $4.67 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 $44.0 million, or $5.61 per share, in the second quarter of 2004, 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 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 June: see month. 30, 2005 was $233.29, an increase of 3.0% from common stockholders' equity per share of $226.50 as of December December: see month. 31, 2004 (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 2005). 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 approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $2.65 billion at June 30, 2005, an increase of 7.3% from approximately $2.47 billion at December 31, 2004. Alleghany had net catastrophe Catastrophe, from the Greek Καταστροφή (katastrephein), literally means "to turn" (strephein) "downwards" (kata-). losses after tax of $3.6 million, or $0.46 per share, in the 2005 second quarter, compared with $1.7 million, or $0.22 per share in the corresponding 2004 period. In the second quarter of 2005, net gains on investment transactions after tax were $0.4 million, or $0.05 per share, compared with $2.8 million, or $0.36 per share, in the 2004 second quarter. Second quarter 2005 net earnings from continuing operations adjusted to exclude net catastrophe losses after tax and net gains on investment transactions after tax were $40.1 million, or $5.08 per share, compared with $42.9 million, or $5.47 per share, in the corresponding 2004 period.
Three Months Ended June 30,
-----------------------------
Per Share(1)
---------------------
(in millions, except for
per share and share
amounts) 2005 2004 2005 2004
---------- ---------- ---------- ----------
Net earnings from
continuing operations
Adjustments: $36.9 $44.0 $4.67 $5.61
Add: Net catastrophe
losses after tax 3.6 1.7 0.46 0.22
Deduct: Net gains on
investment
transactions
after tax (0.4) (2.8) (0.05) (0.36)
---------- ---------- ---------- ----------
Net earnings from
continuing operations, as
adjusted (2) $40.1 $42.9 $5.08 $5.47
Average number of
outstanding shares of
common stock (3) 7,917,555 7,854,462
(1) Represents diluted earnings per share of common stock and includes
the impact on net earnings resulting from the inclusion of
dilutive securities under the "if-converted method".
(2) Adjusted to exclude net catastrophe losses after tax and net gains
on investment transactions after tax.
(3) Adjusted to reflect the dividend of common stock declared in March
2005.
2005 second quarter net earnings were $31.4 million, or $3.97 per share, compared with $48.7 million, or $6.21 per share, in the corresponding 2004 period. 2005 second quarter pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta earnings from continuing operations were $52.5 million, compared with $66.2 million in the 2004 second quarter. Discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. 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 and the operations of World Minerals, Inc. prior to its disposition in July July: see month. 2005. In the first six months of 2005, Alleghany's net earnings from continuing operations were $98.1 million, or $12.43 per share, compared with $102.0 million, or $13.00 per share, in the first six months of 2004. Alleghany had net catastrophe losses after tax of $9.1 million, or $1.15 per share, in the first six months of 2005, compared with $2.0 million, or $0.26 per share in the corresponding 2004 period. In the first six months of 2005, net gains on investment transactions after tax were $31.1 million, or $3.93 per share, compared with $24.4 million, or $3.11 per share, in the first half of 2004. Net earnings from continuing operations adjusted to exclude net catastrophe losses after tax and net gains on investment transactions after tax were $76.2 million, or $9.65 per share, in the first half of 2005 compared with $79.6 million, or $10.15 per share, in the corresponding 2004 period.
Six Months Ended June 30,
---------------------------
Per Share(1)
---------------------
(in millions, except for
per share and share
amounts) 2005 2004 2005 2004
---------- ---------- ---------- ----------
Net earnings from
continuing operations
Adjustments: $98.2 $102.0 $12.43 $13.00
Add: Net catastrophe
losses after tax 9.1 2.0 1.15 0.26
Deduct: Net gains on
investment
transactions
after tax (31.1) (24.4) (3.93) ( 3.11)
---------- ---------- ---------- ----------
Net earnings from
continuing operations, as
adjusted (2) $76.2 $79.6 $9.65 $10.15
Average number of
outstanding shares of
common stock (3) 7,905,073 7,844,981
(1) Represents diluted earnings per share of common stock and includes
the impact on net earnings resulting from the inclusion of
dilutive securities under the "if-converted method".
(2) Adjusted to exclude net catastrophe losses after tax and net gains
on investment transactions after tax.
(3) Adjusted to reflect the dividend of common stock declared in March
2005.
The comparative contributions to earnings from continuing operations before taxes made by 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"), 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 Six Months Ended
June 30, June 30,
------------------ ------------------
2005 2004 2005 2004
AIHL $58.0 $75.3 $135.2 $165.9
Corporate activities (5.5) (9.1) 9.6 (11.5)
-------- -------- -------- --------
Total $52.5 $66.2 $144.8 $154.4
======== ======== ======== ========
AIHL recorded pre-tax earnings of $58.0 million on revenues of $234.0 million in the 2005 second quarter, compared with pre-tax earnings of $75.3 million on revenues of $217.0 million in the second quarter of 2004, and pre-tax earning of $135.2 million on revenues of $487.0 million in the first six months of 2005, compared with pre-tax earnings of $165.9 million on revenues of $448.3 million in the corresponding 2004 period. AIHL's 2005 second quarter pre-tax earnings include investment income before tax of $14.7 million and net gains on investment transactions before tax of $0.6 million, compared with $9.4 million and $4.4 million, respectively, in the corresponding 2004 period. AIHL's 2005 first half pre-tax earnings include investment income before tax of $29.0 million and net gains on investment transactions before tax of $25.8 million, compared with $19.7 million and $35.8 million, respectively, in the first six months of 2004. 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 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 RSUI, CATA and Darwin were as follows (in millions, except ratios):
Three Months Ended June 30,
-----------------------------
RSUI CATA Darwin(1) AIHL
---------- ---------- ---------- ----------
2005
----
Gross premiums written (2) $325.3 $45.7 $36.7 $407.7
Net premiums written (2) 168.2 43.7 20.8 232.7
Net premiums earned $158.2 $40.5 $20.0 $218.7
Loss and loss adjustment
expenses 83.0 17.8 13.5 114.3
Underwriting expenses 31.4 17.9 6.1 55.4
---------- ---------- ---------- ----------
Underwriting profit (3) $43.8 $4.8 $0.4 49.0
========== ========== ==========
Interest, dividend and
other income 14.7
Net gain on investment
transactions 0.6
Other expenses (6.3)
----------
Earnings before income
taxes $58.0
==========
Loss ratio (4) 52.5% 44.0% 67.6% 52.3%
Expense ratio (5) 19.8% 44.1% 30.9% 25.3%
Combined ratio (6) 72.3% 88.1% 98.5% 77.6%
2004
----
Gross premiums written (2) $308.1 $46.7 $20.2 $375.0
Net premiums written (2) 171.8 42.2 14.6 228.6
Net premiums earned $154.0 $39.5 $9.7 $203.2
Loss and loss adjustment
expenses 63.4 22.6 6.0 92.0
Underwriting expenses 23.5 15.6 3.7 42.8
---------- ---------- ---------- ----------
Underwriting profit (3) $67.1 $1.3 $-- 68.4
========== ========== ==========
Interest, dividend and
other income 9.4
Net gain on investment
transactions 4.4
Other expenses (6.9)
----------
Earnings before income
taxes $75.3
==========
Loss ratio (4) 41.2% 57.2% 62.3% 45.3%
Expense ratio (5) 15.2% 39.4% 38.0% 21.0%
Combined ratio (6) 56.4% 96.6% 100.3% 66.3%
Six Months Ended June 30,
---------------------------
RSUI CATA Darwin(1) AIHL
---------- ---------- ---------- ----------
2005
----
Gross premiums written (2) $596.3 $88.9 $70.5 $755.7
Net premiums written (2) 309.8 84.8 41.4 436.0
Net premiums earned $313.7 $79.8 $38.7 $432.2
Loss and loss adjustment
expenses 165.4 37.8 26.4 229.6
Underwriting expenses 61.3 35.6 11.5 108.4
---------- ---------- ---------- ----------
Underwriting profit (3) $87.0 $6.4 $0.8 94.2
========== ========== ==========
Interest, dividend and
other income 29.0
Net gain on investment
transactions 25.8
Other expenses (13.8)
----------
Earnings before income
taxes $135.2
==========
Loss ratio (4) 52.7% 47.4% 68.2% 53.1%
Expense ratio (5) 19.6% 44.6% 29.7% 25.1%
Combined ratio (6) 72.3% 92.0% 97.9% 78.2%
2004
----
Gross premiums written (2) $602.5 $88.4 $40.8 $731.7
Net premiums written (2) 309.5 79.0 28.6 417.1
Net premiums earned $302.3 $74.0 $16.6 $392.9
Loss and loss adjustment
expenses 133.4 41.4 10.4 185.2
Underwriting expenses 47.0 30.8 6.6 84.4
---------- ---------- ---------- ----------
Underwriting profit
(loss) (3) $121.9 $1.8 $(0.4) 123.3
========== ========== ==========
Interest, dividend and
other income 19.7
Net gain on investment
transactions 35.8
Other expenses (12.9)
----------
Earnings before income
taxes $165.9
==========
Loss ratio (4) 44.1% 56.0% 62.4% 47.1%
Expense ratio (5) 15.5% 41.6% 40.0% 21.5%
Combined ratio (6) 59.6% 97.6% 102.4% 68.6%
(1) 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.
(2) Amounts do not reflect the impact of an inter-company pooling
agreement.
(3) Represents net premiums earned less loss and loss adjustment
expenses and underwriting expenses, all as determined in
accordance with U.S. generally accepted accounting principles
("GAAP"), and does not include interest, dividend and other income
or net gains on investment transactions. Underwriting profit
(loss) does not replace net earnings (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
investment transactions, enhances the understanding of AIHL's
insurance operating units' operating results by highlighting net
earnings attributable to their underwriting performance. With the
addition of interest, dividend and other income and net gains on
investment transactions, reported pre-tax net earnings (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.
(4) Loss and loss adjustment expenses divided by net premiums earned,
all as determined in accordance with GAAP.
(5) Underwriting expenses divided by net premiums earned, all as
determined in accordance with GAAP.
(6) 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.
The decrease in RSUI's 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. in the second quarter and first half of 2005 compared with the corresponding 2004 periods primarily reflects an increase in the percentage of total business written by RSUI attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to casualty lines of business as such business is recorded at a higher loss ratio compared with property lines of business, an increase in loss and loss adjustment expenses in property due primarily to one large non-catastrophe weather-related loss and higher 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 mainly due to the absence of profit sharing profit sharing, arrangement by which employees receive, in addition to their wages, a share of the net profits of a business. The purpose is to give them an incentive to increase their output through enhanced morale, less wasteful use of materials, better care of payments under certain property 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 resulting from catastrophe losses in 2004. The increase in CATA's underwriting profit in the second quarter and first half of 2005 compared with the corresponding 2004 periods primarily reflects a $2.4 million pre-tax reduction in prior year loss reserves in the 2005 second quarter (compared with a $2.9 million increase in prior year loss reserves in the 2004 second quarter) and a decrease in 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. costs. Darwin reported an increase in underwriting profits in the second quarter and first half of 2005 from the corresponding 2004 periods, primarily reflecting a significant increase in net premiums earned due to increased levels 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. across all lines of business, partially offset by increased loss and loss adjustment expenses and underwriting expenses primarily attributable to such premium growth. Corporate activities recorded a pre-tax loss of $5.5 million on revenues of $6.8 million in the 2005 second quarter, compared with a pre-tax loss of $9.1 million on revenues of $2.2 million in the corresponding period in 2004, and pre-tax earnings of $9.6 million on revenues of $32.3 million in the first six months of 2005, compared with a pre-tax loss of $11.5 million on revenues of $10.1 million in the corresponding 2004 period. Corporate activities' 2005 and 2004 second quarter results include no gains on investment transactions before tax, and corporate activities' 2005 first half results include $22.0 million of net gains on investment transactions before tax, compared with $1.7 million in the first six months of 2004. On July 14, 2005, Alleghany completed the sale of its world-wide industrial minerals business, World Minerals Inc., to Imerys Imerys is a French multinational company listed on Euronext Paris (ticker: NK). It is a constituent of the CAC Next 20 index. It specialises in the mining and distribution of industrial minerals. USA, Inc., a wholly owned subsidiary Wholly Owned Subsidiary A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. of Imerys, S.A., for a purchase price of $216.8 million The sale resulted in a modest after-tax af·ter-tax also af·ter·tax adj. Relating to or being that which remains after payment, especially of income taxes: after-tax profits. gain that will be reported in the 2005 third quarter. As mentioned above, Alleghany has classified the operations of World Minerals as a discontinued operation discontinued operation A segment of a business that has been abandoned or sold or for which plans for one or another of these actions have been approved. See also continuing operations. in its financial statements for all periods presented. Alleghany's net loss from discontinued operations was $5.9 million in the first six months of 2005, compared with net earnings from discontinued operations of $8.8 million in the corresponding period in 2004. World Minerals was unprofitable in the second quarter of 2005 due to competitive pricing pressures, rising energy and other operating costs operating costs npl → gastos mpl operacionales , a $5.7 million after-tax write-off Write-Off A reduction in the value of an asset or earnings by the amount of an expense or loss. Companies are able to write off certain expenses that are required to run the business, or have been incurred in the operation of the business and detract from retained revenues. related to foreign tax credits that will not be used as a result of the sale of World Minerals and a $2.8 million after-tax write-off related to the termination The point where a line, channel or circuit ends. See SCSI termination and hybrid. of a major systems project in connection with the sale of World Minerals. As of June 30, 2005, 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 $376.6 million, or $47.08 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 the second quarter of 2005, Alleghany did not make any such purchases of shares of its common stock. As of June 30, 2005, Alleghany had 7,889,136 shares of common stock outstanding (which includes the stock dividend declared in March 2005). Additional information regarding the 2005 second quarter results of Alleghany and its operating units is contained in Alleghany's Report of Form 10-Q Form 10-Q See 10-Q. for the quarter ended June 30, 2005, which will be filed with the U.S. Securities and Exchange Commission on August 9, 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 net catastrophe losses after tax 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 and gains on investment transactions can fluctuate significantly from period to period, 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 6/30/05
--------------------------------------
ALLEGHANY
INSURANCE CORPORATE
HOLDINGS ACTIVITIES COMBINED
------------ ------------ ------------
Revenues
Net premiums earned $218,654 $0 $218,654
Interest, dividend and other
income 14,738 6,836 21,574
Net gain (loss) on
investments transactions 620 (3) 617
------------ ------------ ------------
Total revenues 234,012 6,833 240,845
Costs and expenses
Loss and loss adjustment
expenses 114,305 0 114,305
Commissions and brokerage 55,378 0 55,378
Salaries, administrative and
other operating expenses 6,229 821 7,050
Corporate administration 99 10,532 10,631
Interest expense 0 1,000 1,000
------------ ------------ ------------
Total costs and
expenses 176,011 12,353 188,364
------------ ------------ ------------
Earnings (loss) from continuing
operations, before income
taxes $58,001 ($5,520) 52,481
============ ============
Income taxes 15,554
------------
Earnings from continuing
operations 36,927
Discontinued operations
Operations (including loss
on disposal of $1,166 in
2005) (2,178)
Income taxes 3,347
------------
(Loss) earnings from
discontinued operations, net (5,525)
------------
Net earnings $31,402
============
THREE MONTHS ENDED 6/30/04
--------------------------------------
ALLEGHANY
INSURANCE CORPORATE
HOLDINGS ACTIVITIES COMBINED
------------ ------------ ------------
Revenues
Net premiums earned $203,215 $0 $203,215
Interest, dividend and other
income 9,387 2,261 11,648
Net gain (loss) on
investments transactions 4,363 (11) 4,352
------------ ------------ ------------
Total revenues 216,965 2,250 219,215
Costs and expenses
Loss and loss adjustment
expenses 92,016 0 92,016
Commissions and brokerage 42,750 0 42,750
Salaries, administrative and
other operating expenses 6,842 752 7,594
Corporate administration 106 9,986 10,092
Interest expense 0 591 591
------------ ------------ ------------
Total costs and
expenses 141,714 11,329 153,043
------------ ------------ ------------
Earnings (loss) from continuing
operations, before income
taxes $75,251 ($9,079) 66,172
============ ============
Income taxes 22,126
------------
Earnings from continuing
operations 44,046
Discontinued operations
Operations (including loss
on disposal of $1,166 in
2005) 8,282
Income taxes 3,605
------------
(Loss) earnings from
discontinued operations, net 4,677
------------
Net earnings $48,723
============
ALLEGHANY CORPORATION
COMBINING STATEMENTS OF EARNINGS
(dollars in thousands)
(unaudited)
SIX MONTHS ENDED 6/30/05
--------------------------------------
ALLEGHANY
INSURANCE CORPORATE
HOLDINGS ACTIVITIES COMBINED
------------ ------------ ------------
Revenues
Net premiums earned $432,206 $0 $432,206
Interest, dividend and other
income 28,986 10,312 39,298
Net gain (loss) on
investments transactions 25,812 22,032 47,844
------------ ------------ ------------
Total revenues 487,004 32,344 519,348
Costs and expenses
Loss and loss adjustment
expenses 229,582 0 229,582
Commissions and brokerage 108,422 0 108,422
Salaries, administrative and
other operating expenses 13,583 1,620 15,203
Corporate administration 201 19,511 19,712
Interest expense 0 1,665 1,665
------------ ------------ ------------
Total costs and
expenses 351,788 22,796 374,584
------------ ------------ ------------
Earnings (loss) from continuing
operations, before income
taxes $135,216 $9,548 144,764
============ ============
Income taxes 46,614
------------
Earnings from continuing
operations 98,150
Discontinued operations
Operations (including loss
on disposal of $1,166 in
2005) (653)
Income taxes 5,224
------------
(Loss) earnings from
discontinued operations, net (5,877)
------------
Net earnings $92,273
============
SIX MONTHS ENDED 6/30/04
--------------------------------------
ALLEGHANY
INSURANCE CORPORATE
HOLDINGS ACTIVITIES COMBINED
------------ ------------ ------------
Revenues
Net premiums earned $392,883 $0 $392,883
Interest, dividend and other
income 19,660 8,432 28,092
Net gain (loss) on
investments transactions 35,800 1,735 37,535
------------ ------------ ------------
Total revenues 448,343 10,167 458,510
Costs and expenses
Loss and loss adjustment
expenses 185,114 0 185,114
Commissions and brokerage 84,388 0 84,388
Salaries, administrative and
other operating expenses 12,826 1,756 14,582
Corporate administration 139 18,755 18,894
Interest expense 0 1,123 1,123
------------ ------------ ------------
Total costs and
expenses 282,467 21,634 304,101
------------ ------------ ------------
Earnings (loss) from continuing
operations, before income
taxes $165,876 ($11,467) 154,409
============ ============
Income taxes 52,452
------------
Earnings from continuing
operations 101,957
Discontinued operations
Operations (including loss
on disposal of $1,166 in
2005) 15,823
Income taxes 6,993
------------
(Loss) earnings from
discontinued operations, net 8,830
------------
Net earnings $110,787
============
ALLEGHANY CORPORATION
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share amounts)
JUNE 30,
2005 DECEMBER 31,
(unaudited) 2004*
------------ ------------
ASSETS
Available for sale securities at fair
value:
Equity securities $692,138 $645,184
Debt securities 1,491,203 1,179,210
Short-term investments 389,694 374,391
------------ ------------
2,573,035 2,198,785
Cash 74,135 267,760
Notes receivable 91,536 91,665
Accounts receivable, net 2,484 16,776
Premium balances receivable 217,976 203,141
Reinsurance recoverables 708,145 623,325
Ceded unearned premium reserves 292,952 286,451
Deferred acquisition costs 56,890 56,165
Property and equipment - at cost, net of
accumulated depreciation and amortization 17,753 15,691
Goodwill and other intangibles, net of
amortization 171,750 172,707
Deferred tax assets 101,869 98,753
Assets of discontinued operations 335,820 336,584
Other assets 63,967 59,922
------------ ------------
$4,708,312 $4,427,725
============ ============
LIABILITIES AND COMMON STOCKHOLDERS' EQUITY
Losses and loss adjustment expenses $1,362,593 $1,232,337
Unearned premiums 761,407 751,131
Reinsurance payable 152,602 112,479
Deferred tax liabilities 186,500 206,250
Subsidiaries' debt 80,000 80,000
Current taxes payable 38,166 15,713
Liabilities of discontinued operations 146,957 136,397
Other liabilities 139,595 120,002
------------ ------------
Total liabilities 2,867,820 2,654,309
Common stockholders' equity 1,840,492 1,773,416
------------ ------------
$4,708,312 $4,427,725
============ ============
COMMON SHARES OUTSTANDING (adjusted for
stock dividends) 7,889,136 7,829,721
* Certain amounts have been reclassified to conform to the 2005
presentation.
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