Assured Guaranty Ltd. Reports Second Quarter 2005 Net Income of $66.8 Million.HAMILTON Hamilton, city, Bermuda Hamilton, city (1990 est. pop. 3,100), capital of Bermuda, on Bermuda Island. It is a port at the head of Great Sound, a huge lagoon and deepwater harbor protected by coral reefs. , Bermuda Bermuda (bûrmy  `də), British dependency (2005 est. pop. 65,400), 21 sq mi (53 sq km), comprising some 150 coral rocks, islets, and islands (of which some 20 are inhabited), in the -- Assured Guaranty As a verb, to agree to be responsible for the payment of another's debt or the performance of another's duty, liability, or obligation if that person does not perform as he or she is legally obligated to do; to assume the responsibility of a guarantor; to warrant. Ltd. (NYSE NYSESee: New York Stock Exchange :AGO) reported net income of $66.8 million, or $0.90 per 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. share, for the second quarter ended June June: see month. 30, 2005, an increase of 55% compared with net income of $43.1 million, or $0.57 per diluted share, earned in the second quarter of 2004. Dominic Dominic hound who travels widely. [Children’s Lit.: Dominic] See : Dogs Frederico Frederico may refer to: In literature:
An insurer is frequently an insurance company and is also known as an underwriter. financial strength ratings, a key element of our strategic objectives, were significantly enhanced. Standard and Poor's Noun 1. Standard and Poor's - a broadly based stock market index Standard and Poor's Index announced a Stable outlook on their AAA AAA: see American Automobile Association. (Triple A) A common single-cell battery used in a myriad of electronic devices of all variety. Like its double A (AA) cousin, it provides 1.5 volts of DC power. When used in series, the voltage is multiplied. rating and Fitch Ratings Fitch Ratings An international rating agency for financial institutions, insurance companies, and corporate, sovereign, and municipal debt. Fitch Ratings has headquarters in New York and London and is wholly owned by FIMALAC of Paris. announced a new AAA rating with a Stable outlook for Assured Guaranty Corp., our U.S. direct financial guaranty insurer. We continue to expand our financial guaranty direct platform, as well as receive a strong flow of facultative facultative /fac·ul·ta·tive/ (fak´ul-ta?tiv) not obligatory; pertaining to the ability to adjust to particular circumstances or to assume a particular role. fac·ul·ta·tive adj. 1. submissions in our Bermuda-based reinsurance The contract made between an insurance company and a third party to protect the insurance company from losses. The contract provides for the third party to pay for the loss sustained by the insurance company when the company makes a payment on the original contract. company."
Analysis of Net Income
($ in millions)
%
2Q-05 2Q-04 Change
--------- --------- ---------
Net income $66.8 $43.1 55%
Less: After-tax realized gains on
investments 1.2 6.3 (81%)
Less: After-tax unrealized (losses)
gains on derivatives (9.7) 9.0 NMF
--------- ---------
Operating income $75.2 $27.9 170%
Weighted average shares outstanding (in
millions):
Basic 73.8 75.0 (2%)
Diluted 74.1 75.0 (1%)
Per Diluted Share
%
2Q-05 2Q-04 Change
--------- --------- ---------
Net income $0.90 $0.57 58%
Less: After-tax realized gains on
investments 0.02 0.08 (75%)
Less: After-tax unrealized (losses)
gains on derivatives (0.13) 0.12 NMF
--------- ---------
Operating income $1.02 $0.37 176%
To assist analysts and investors in evaluating the Company's financial results, this press release references several non-GAAP financial measures. These non-GAAP financial measures are defined in the "Explanation of Non-GAAP Financial Measures" section of this press release. In each case, the most directly comparable GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). financial measure is presented and a reconciliation of the non-GAAP financial measure and GAAP measure is provided. This presentation is consistent with the way that Company management, analysts and investors evaluate the Company's financial results and is comparable to the earnings per share estimates published by analysts in their research reports on the Company. The non-GAAP financial measures included in this press release are: operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. , present value of financial guaranty and mortgage guaranty gross written premiums ("PVP See portable video player. "), net present value of estimated future installment Regular, partial portion of the same debt, paid at successive periods as agreed by a debtor and creditor. An installment loan is designed to be repaid in certain specified, ordinarily equal amounts over a designated period, such as a year or a number of months. premiums in force and adjusted book value. Operating income, a non-GAAP financial measure, was $75.2 million, or $1.02 per diluted share, in the second quarter of 2005, an increase of 170% from $27.9 million, or $0.37 per diluted share, in the second quarter of 2004. Assured Guaranty's second quarter 2005 operating income included net 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. income of $41.4 million, or $0.56 per diluted share, related to the CFS-Related Securities Fraud Litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. settlement ("CFS CFS abbr. chronic fatigue syndrome CFS, n.pr See syndrome, chronic fatigue. CFS Chronic fatigue syndrome, see there Settlement"), net after-tax income of $1.9 million, or $0.03 per diluted share, related to the novation The substitution of a new contract for an old one. The new agreement extinguishes the rights and obligations that were in effect under the old agreement. A novation ordinarily arises when a new individual assumes an obligation to pay that was incurred by the original party of Financial Security Assurance Inc.'s reinsurance book from Assured Guaranty Corp. ("AGC AGC Automatic Gain Control AGC Automotive Glass Cartridge (fuse) AGC Associated General Contractors AGC Associated General Contractors of America AGC Atypical Glandular Cells AGC Attorney-General's Chambers ") to Assured Guaranty Re Ltd. ("FSA FSA Financial Services Authority FSA Food Standards Agency (UK) FSA Farm Service Agency (USDA) FSA Financial Services Agency (Japan) Transaction"), and net after-tax expenses of $1.3 million, or $0.02 per diluted share, related to AGC's $200 million contingent Fortuitous; dependent upon the possible occurrence of a future event, the existence of which is not assured. The word contingent denotes that there is no present interest or right but only a conditional one which will become effective upon the happening of the capital facility ("AGC Contingent Capital Facility"). Assured Guaranty's second quarter 2004 operating income included net after-tax expenses of $9.6 million, or $0.13 per diluted share, for IPO-related accelerated vesting Vesting The process by which employees accrue non-forfeitable rights over employer contributions that are made to the employee's qualified retirement plan account. Notes: and replacement of stock rewards, and a net after-tax operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. of $5.9 million, or $0.08 per diluted share, from our other segment, which consists of transactions and lines of business that we exited as part of our IPO (Initial Public Offering) The first time a company offers shares of stock to the public. While not a computer term per se, many founders, employees and insiders of computer companies have found this acronym more exciting than any tech term they ever heard. in April 2004 (together, the "IPO-related transactions"), and after-tax operating income of $3.6 million, or $0.05 per diluted share for the commutation of a mortgage guaranty excess of loss reinsurance transaction ("Mortgage Guaranty Commutation").
Income Statement Highlights:
Net Written Premiums by Segment
($ in millions)
%
2Q-05 2Q-04 Change
---------- --------- ----------
Financial guaranty direct $20.4 $17.3 18%
Mortgage guaranty 1.9 0.9 111%
Financial guaranty reinsurance 8.0 35.8 (78%)
---------- ---------
Total financial guaranty 30.2 54.0 (44%)
Other - (84.0) NMF
---------- ---------
Total $30.2 $(29.9) NMF
Net written premiums include the effect of the FSA Transaction in the second quarter of 2005 and IPO-related transactions in the second quarter of 2004. On a segment basis, net written premiums in the financial guaranty direct segment were $20.4 million, up 18% over the prior year period, principally due to the Company's U.S. public finance business. Mortgage guaranty net written premiums were $1.9 million versus $0.9 million in the prior year period. Net written premiums in the financial guaranty reinsurance segment were $8.0 million, a decline of 78% over the prior year period, as net written premiums in the 2005 reporting period were reduced by net premium cessions of $18.4 million related to the FSA Transaction, as well as lower upfront premium volume compared to the prior year quarter. The other segment, which includes businesses sold or discontinued dis·con·tin·ue v. dis·con·tin·ued, dis·con·tin·u·ing, dis·con·tin·ues v.tr. 1. To stop doing or providing (something); end or abandon: as part of our IPO, has not generated net written or earned premiums Earned premium is the portion of an insurance written premium which is considered "earned" by the insurer, based on the part of the policy period that the insurance has been in effect, and during which the insurer has been exposed to loss. since the second quarter of 2004. The $(84.0) million of net written premiums in the second quarter of 2004 reflects the impact of IPO-related transactions.
Net Earned Premiums by Segment
($ in millions)
%
2Q-05 2Q-04 Change
--------- --------- ---------
Financial guaranty direct $16.0 $16.1 (1%)
Mortgage guaranty 5.1 15.0 (66%)
Financial guaranty reinsurance 27.2 25.6 6%
--------- ---------
Total financial guaranty 48.3 56.7 (15%)
Other - (66.0) NMF
--------- ---------
Total $48.3 $(9.3) NMF
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: net earned premium comparisons with the prior year period are materially affected by the IPO-related transactions in the other segment in the second quarter of 2004. On a segment basis, financial guaranty direct net earned premiums were $16.0 million in the second quarter of 2005 compared with $16.1 million in the second quarter of 2004, which included $1.9 million of net earned premiums from the Company's single name credit default swap Credit Default Swap A swap designed to transfer the credit exposure of fixed income products between parties. Notes: The buyer of a credit swap receives credit protection, whereas the seller of the swap guarantees the credit worthiness of the product. business that was sold in the first quarter of 2005. Mortgage guaranty net earned premiums declined to $5.1 million in the second quarter of 2005 from $15.0 million in the second quarter of 2004 due to the run-off run-off n (in contest, election) → desempate m (= extra race); carrera de desempate run-off n (in contest, election) → of the Company's quota share For This article is about quota shares (shares of the quota). For other usages of quota, see, see . A quota share is a specified number or percentage of the allotment as a whole (quota), that is prescribed to each individual entity (see Non-tariff barriers to trade). mortgage guaranty 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 and $8.8 million of net earned premium in the second quarter of 2004 due to the Mortgage Guaranty Commutation. Financial guaranty reinsurance net earned premiums including municipal bond refundings were $27.2 million, up 6% over the second quarter of 2004. Municipal bond refunding Reimbursing funds in restitution or repayment. The process of refinancing or borrowing money, ordinarily through the sale of bonds, to pay off an existing debt with the proceeds derived therefrom. net earned premiums, which are included in the financial guaranty reinsurance segment, were $3.6 million ($0.02 per diluted share) in the current period compared with $4.4 million ($0.02 per diluted share) in the second quarter of 2004.
Underwriting Results by Segment
($ in millions)
%
2Q-05 2Q-04 Change
--------- --------- ---------
Underwriting gain (loss):
Financial guaranty direct $1.1 $5.3 (79%)
Mortgage guaranty 3.1 11.2 (72%)
Financial guaranty reinsurance 73.8 14.6 405%
--------- ---------
Total financial guaranty 77.9 31.0 151%
Other - (8.8) NMF
--------- ---------
Total $77.9 $22.3 249%
Consolidated 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. results were affected by the CFS Settlement in the second quarter of 2005 and by the impact of IPO-related transactions in the other segment in the second quarter of 2004. Assured Guaranty reported a consolidated underwriting gain of $77.9 million in the second quarter of 2005, including the $63.7 million recovery from the CFS Settlement, compared to an underwriting gain of $22.3 million in the second quarter of 2004. On a segment basis, the underwriting gain for the financial guaranty direct segment was $1.1 million in the second quarter of 2005, down from $5.3 million in the second quarter of 2004, due to a $4.5 million case loss reserve established on a sub-prime mortgage transaction in the second quarter of 2005. The mortgage guaranty segment's underwriting results declined 72% in the second quarter of 2005 to $3.1 million from $11.2 million in the second quarter of 2004, which included a $5.5 million underwriting gain on the Mortgage Guaranty Commutation. The underwriting gain for the financial guaranty reinsurance segment in the second quarter of 2005 rose 405% to $73.8 million, including the $63.7 million loss recovery from the CFS Settlement. The segment's underwriting results in the second quarter of 2005 also included a $1.2 million case loss reserve on a manufactured housing Manufactured housing (also known as prefab housing) is a type of housing unit that is largely assembled in factories and then transported to sites of use. In the United States, the term "manufactured home" specifically refers to a house built entirely in a protected transaction and a $2.8 million underwriting loss on the FSA Transaction.
Shareholders' Equity Highlights:
(amounts in millions except per share data)
As of
-------------------------
June 30, December 31,
2005 2004
------------ ------------
Book value $1,619.5 $1,527.6
Net UPR less DAC - after-tax(1) 304.2 268.6
Net present value of estimated
installment
premiums in-force - after-tax(2) 300.6 297.1
------------ ------------
Adjusted book value $2,224.3 $2,093.3
============ ============
Shares outstanding at the end of period (in
millions) 74.9 75.7
Book value per share outstanding:
Book value $21.63 $20.19
Net UPR less DAC - after-tax(1) 4.06 3.55
Net present value of estimated
installment
premiums in-force - after-tax(2) 4.01 3.93
------------ ------------
Adjusted book value $29.71 $27.67
============ ============
(1) Unearned premium reserve (UPR) less pre-paid reinsurance
premiums and deferred acquisition costs (DAC), all after-tax.
(2) Due to reporting lag by our ceding companies, the present value of
estimated installment premiums in force in our reinsurance segment
is reported on a one-quarter lag.
At June 30, 2005, the Company's book value per share was $21.63, an increase of 7% over the book value of $20.19 reported at December December: see month. 31, 2004 due to the increase in retained earnings Retained Earnings The percentage of net earnings not paid out in dividends, but retained by the company to be reinvested in its core business or to pay debt. It is recorded under shareholders equity on the balance sheet. since year end. Adjusted book value per share, a non-GAAP financial measure, was $29.71 at June 30, 2005, up 7% from December 31, 2004, reflecting the growth in net unearned premium reserves and net after-tax present value of estimated installment premiums in force, a non-GAAP financial measure.
New Business Production:
Analysis of Present Value of Gross Written Premiums ("PVP")
($ in millions)
Three Months Ended
June 30,
---------------------
2005 2004
---------------------
Premium analysis:
Gross written premiums (GWP) analysis:
Present value of financial guaranty & mortgage
guaranty GWP (PVP) (1):
Financial guaranty direct $22.7 $14.4
Mortgage guaranty - -
Financial guaranty reinsurance 35.2 40.1
---------------------
Total PVP 57.9 54.4
Less: Installment premium PVP 38.3 31.6
---------------------
Upfront financial guaranty & mortgage
guaranty GWP 19.6 22.9
Less: Upfront premium due to healthcare
reassumption 18.4 -
Plus: Installment GWP 29.8 31.5
---------------------
Financial guaranty & mortgage guaranty GWP 31.0 54.4
Other segment GWP 9.5 10.0
---------------------
Total gross written premiums $40.5 $64.4
=====================
(1) Due to reporting lags by our ceding companies, PVP for installment
premiums from our financial guaranty reinsurance segment is
reported on a one-quarter lag.
New business production, as measured by PVP, a non-GAAP financial measure, rose to $57.9 million in the second quarter of 2005, up 6% from the $54.4 million written in the second quarter of 2004. The financial guaranty direct segment generated $22.7 million of PVP, a 58% increase over second quarter 2004 PVP of $14.4 million, and reflects the expansion of the Company's direct financial guaranty business. The number of transactions in the second quarter of 2005 increased materially compared to the first quarter of 2005 and the second quarter of 2004, but did not include any deals with PVP in excess of $5 million. The Company closed two deals in the first quarter of 2005 and one deal in the fourth quarter of 2004 that had PVP in excess of $5.0 million. The financial guaranty reinsurance segment's second quarter 2005 PVP was $35.2 million, a decrease of 12% from the segment's second quarter 2004 PVP of $40.1 million. The second quarter of 2004 included $12.0 million in PVP on two reinsurance contracts that are no longer in force. Investor Conference Call: The Company will host a conference call for investors at 8:30 a.m. Eastern Daylight For other uses, see Daylight (disambiguation). Daylight or the light of day is the combination of all direct and indirect sunlight outdoors during the daytime (and perhaps twilight). Time (9:30 a.m. Atlantic Daylight Time) on Friday Friday: see Sabbath; week. Friday young Indian rescued by Crusoe and kept as servant and companion. [Br. Lit.: Robinson Crusoe] See : Servant , August 5, 2005. The earnings conference call will be available via live and archived webcast in the Investor Information section of the Company's website at http://www.assuredguaranty.com or by dialing 1-800-901-5247 (in the U.S.) or 1-617-786-4501 (International), passcode 59514532. A replay of the call will be available through September September: see month. 5, 2005. To listen to the replay dial: 1-888-286-8010 (in the U.S.) or 1-617-801-6888 (International), passcode 20152572. Please refer to the Assured Guaranty Financial Supplement - June 30, 2005, which is posted on the Company's website at http://www.assuredguaranty.com/investor/supplement.html for more detailed information on individual segment performance, together with additional disclosure on our financial guaranty portfolio and investment portfolio. Assured Guaranty Ltd. is a Bermuda-based holding company. Its operating subsidiaries An operating subsidiary is a business term frequently used within the United States railroad industry. In the case of a railroad, it refers to a company that is a subsidiary but operates with its own identity and rolling stock. provide credit enhancement Credit Enhancement A method whereby a company attempts to improve its debt or credit worthiness. Notes: Credit enhancements take many different forms. An example of a credit enhancement would be conversion rights added on to a debt instrument in order to lower the issuing products to the U.S. and international public finance, structured finance and mortgage markets. More information can be found at www.assuredguaranty.com. Explanation of Non-GAAP Financial Measures: The following section describes why the non-GAAP financial measures presented in this press release are useful for investors. Operating income, which is a non-GAAP financial measure, is defined as net income excluding after-tax realized gains Realized Gain A gain resulting from selling an asset at a price higher than the original purchase price. Notes: There may be tax consequences for a realized profit. (losses) on investments and after-tax unrealized gains Unrealized Gain A profit that results from holding on to an asset rather than cashing it in and using the funds. Notes: Let's say you own a stock that has doubled, but you haven't sold it yet. This is said to be an unrealized gain. (losses) on derivative derivative: see calculus. derivative In mathematics, a fundamental concept of differential calculus representing the instantaneous rate of change of a function. financial instruments. We believe the presentation of operating income enhances the understanding of our results of operations by highlighting the underlying profitability of our insurance business. We exclude net realized gains (losses) on investments and net unrealized gains (losses) on derivative financial instruments because the amount of these gains (losses) is heavily influenced by, and fluctuates in part according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. , the market interest rates, credit spreads and other factors that management cannot control or predict. This measure should not be viewed as a substitute for net income determined 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. Adjusted book value, which is a non-GAAP financial measure, is derived de·rive v. de·rived, de·riv·ing, de·rives v.tr. 1. To obtain or receive from a source. 2. by beginning with shareholder's equity (book value) and adding or subtracting the after-tax value of: the financial guaranty and mortgage guaranty unearned premium reserve net of prepaid pre·pay tr.v. pre·paid, pre·pay·ing, pre·pays To pay or pay for beforehand. pre·pay  ment n. reinsurance
premiums and deferred acquisition costs and the present value of
estimated future installment premiums (discounted at 6%) net of
reinsurance. The adjustments described above will not be realized until
future periods and may differ materially from the amounts used in
determining adjusted book value. Management, investors and analysts use
the calculation of adjusted book value to evaluate the net present value
of the Company's in-force premium and capital base.Present value of estimated installment premiums in-force, which is a non-GAAP financial measure, represents our estimated future premiums on our in-force book of installment premium business in our financial guaranty direct and financial guaranty reinsurance segments. Estimated future premiums may change from period to period due to changes in insured par outstanding due to actual prepayments Prepayments Payments made in excess of scheduled mortgage principal repayments. or amortizations differing from previous estimates or due to a change in future estimates due to market conditions, interest rates or other factors. It is calculated net of reinsurance ceded and using a discount rate of 6%. We believe present value of estimated installment premiums is a useful measure for management, equity analysts and investors, because it permits the evaluation of future estimated installment premiums, similar to the GAAP financial measure of unearned premium reserve. PVP, which is a non-GAAP financial measure, represents gross premiums and fees related to financial guaranty and mortgage guaranty contracts written in the current period, including upfront and installment premiums received on contracts written in the current period and the present value of estimated future installment premiums, discounted at 6% per year. We use 6% as the present value discount because it is the approximate ap·prox·i·mate v. To bring together, as cut edges of tissue. adj. 1. Relating to the contact surfaces, either proximal or distal, of two adjacent teeth; proximate. 2. Close together. taxable equivalent yield Taxable equivalent yield The return from a higher-paying but taxable investment that would equal the return from a tax-free investment. This depends on the investor's tax bracket. on our investment portfolio for the periods presented. We believe PVP is a useful measure for management, equity analysts and investors because it permits the evaluation of the value of new business production for Assured Guaranty by taking into account the value of installment premiums on new contracts underwritten in a reporting period, which the GAAP 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. does not adequately measure.
Assured Guaranty Ltd.
Consolidated Income Statements
Three Months Ended
June 30,
-------------------------
2005 2004
-------------------------
(dollars in millions)
Revenues
Gross written premiums $40.5 $64.4
Net written premiums 30.2 (29.9)
Net earned premiums 48.3 (9.3)
Net investment income 23.7 23.5
Other income (0.2) -
-------------------------
Total revenues $71.8 $14.2
Expenses
Loss and loss adjustment expenses (59.1) (60.0)
Profit commission expense 3.3 4.8
Acquisition costs 11.7 8.4
Other operating expenses 14.5 26.6
Other expenses 5.9 2.5
-------------------------
Total expenses $(23.7) $(17.6)
Income before provision for income taxes 95.5 31.8
Total provision for income taxes 20.3 3.9
-------------------------
Operating income $75.2 $27.9
After-tax net realized investment gains 1.2 6.3
After-tax unrealized (losses) gains on
derivative financial instruments (9.7) 9.0
-------------------------
Net income $66.8 $43.1
=========================
Assured Guaranty Ltd.
Consolidated Balance Sheets
As of:
-------------------------
June 30, December 31,
2005 2004
-------------------------
(dollars in millions)
Assets
Fixed maturity securities, at fair value $2,076.8 $1,965.1
Short-term investments, at cost which
approximates fair value 121.1 175.8
-------------------------
Total investments 2,197.9 2,140.9
Cash and cash equivalents 4.7 17.0
Accrued investment income 21.4 21.9
Deferred acquisition costs 188.2 186.4
Prepaid reinsurance premiums 13.8 15.2
Reinsurance recoverable on ceded losses 112.4 120.2
Loss recovery receivable 63.7 -
Premiums receivable 28.5 40.8
Goodwill 85.4 85.4
Unrealized gains on derivative financial
instruments 34.5 43.9
Other assets 21.0 22.3
-------------------------
Total assets $2,771.6 $2,694.0
=========================
Liabilities and shareholders' equity
Liabilities
Unearned premium reserves $530.2 $521.3
Reserves for losses and loss adjustment
expenses 206.4 226.5
Profit commissions payable 45.4 61.7
Reinsurance balances payable 21.9 25.1
Current income taxes 28.4 -
Deferred income taxes 18.2 40.1
Funds held by Company under reinsurance
contracts 53.8 50.8
Long-term debt 197.3 197.4
Other liabilities 50.5 43.7
-------------------------
Total liabilities 1,152.1 1,166.4
Shareholders' equity
Common stock 0.7 0.8
Treasury stock (7.9) (7.9)
Additional paid-in capital 884.4 894.2
Unearned stock grant compensation (10.1) (6.7)
Retained earnings 674.8 568.3
Accumulated other comprehensive income 77.5 79.0
-------------------------
Total shareholders' equity 1,619.5 1,527.6
-------------------------
Total liabilities and shareholders' equity $2,771.6 $2,694.0
=========================
Cautionary Statement Regarding Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. : Any forward-looking statements made in this press release reflect the Company's current views with respect to future events and financial performance and are made pursuant to the safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. provisions of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. Such statements involve risks and uncertainties that may cause actual results to differ materially from those set forth in these statements. For example, the Company's forward-looking statements, including its statements regarding PVP and present value of estimated installment premiums in force, could be affected by a significant reduction in the amount of reinsurance ceded by one or more of our principal ceding cede tr.v. ced·ed, ced·ing, cedes 1. To surrender possession of, especially by treaty. See Synonyms at relinquish. 2. companies, rating agency action such as a ratings downgrade Downgrade A negative change in the rating of a security. Notes: For example, an analyst may downgrade a stock from strong buy to buy, or a bond rating agency may downgrade a bond from AAA to AA. , difficulties with the execution of the Company's business strategy, contract cancellations, developments in the world's financial and capital markets, more severe or frequent losses associated with products affecting the adequacy of the Company's loss reserve, changes in regulation or tax laws, the Company's dependence on customers, decreased demand or increased competition, loss of key personnel, the effects of mergers, acquisitions and divestitures, changes in accounting policies or practices, and changes in general economic conditions, as well as management's response to these factors, and other risk factors identified in the Company's filings with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the dates on which they are made. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. |
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