Liberty Mutual Group Reports Third Quarter 2006 Results.BOSTON -- Under header Year-to-Date Highlights, third bullet, first sentence should read: ...nine months ended September 30, 2006 was $1.681 billion (sted $1.681 million). The corrected release reads: Liberty Mutual Group Reports Third Quarter 2006 Results Liberty Mutual Group ("LMG LMG Light Machine Gun LMG Laurence M. Gould (Antarctic Research Support Vessel, USAP) LMG Local Marketing Group LMG Loaf's Merry Guild LMG Laboratory Molecular Genetics LMG Liquid Methane Gas " or the "Company") today reported net income of $556 million and $1.171 billion for the three and nine months ended September 30, 2006, respectively, an increase of $678 million and $397 million over the same periods in 2005. The increase in both periods primarily reflects the continuation of strong current accident year underwriting and investment results and lower catastrophe losses. "Our results in the third quarter across all financial measures were excellent," said Edmund F. Kelly, Liberty Mutual Group Chairman, President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. . "Fundamentally our operating results were very good, revenue growth continued at a strong pace, and favorable weather conditions contributed to making this an exceptional quarter." Third Quarter Highlights * Revenues for the three months ended September 30, 2006 were $6.014 billion, an increase of $628 million or 11.7% over the same period in 2005. * Net written premium for the three months ended September 30, 2006 was $5.159 billion, an increase of $613 million or 13.5% over the same period in 2005. * Pre-tax income for the three months ended September 30, 2006 was $794 million, an increase of $984 million over the same period in 2005. Results in the quarter include an $840 million decrease in catastrophe losses from the same period in 2005, as prior year results included the impact of Hurricanes Katrina and Rita. Results in the period also include an increase of $69 million in realized capital gains. * Cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses for the three months ended September 30, 2006 was $1.234 billion, a decrease of $173 million or 12.3% from the same period in 2005. * The combined ratio before catastrophes, net incurred losses attributable to prior years and discount accretion for the three months ended September 30, 2006 was 94.7%, an increase of 3.1 points over the same period in 2005. Including the impact of catastrophes, net incurred losses attributable to prior years and discount accretion, the Company's combined ratio decreased 20.3 points from 2005 to 98.0% in 2006. Year-to-Date Highlights * Revenues for the nine months ended September 30, 2006 were $17.512 billion, an increase of $1.865 billion or 11.9% over the same period in 2005. * Net written premium for the nine months ended September 30, 2006 was $15.813 billion, an increase of $2.189 billion or 16.1% over the same period in 2005. * Pre-tax income for the nine months ended September 30, 2006 was $1.681 billion, an increase of $836 million or 98.9% over the same period in 2005. Results year-to-date include a $668 million decrease in catastrophe losses from the same period in 2005, as prior year results included the impact of Hurricanes Katrina and Rita. Results in the period also include a decrease of $68 million in realized capital gains. * Cash flow from operations for the nine months ended September 30, 2006 was $2.858 billion, a decrease of $296 million or 9.4% from the same period in 2005. * The combined ratio before catastrophes, net incurred losses attributable to prior years and discount accretion for the nine months ended September 30, 2006 was 95.1%, an increase of 0.6 points over the same period in 2005. Including the impact of catastrophes, net incurred losses attributable to prior years and discount accretion, the Company's combined ratio decreased 6.0 points from 2005 to 99.7% in 2006. Financial Condition as of September 30, 2006 * Total assets were $84.156 billion as of September 30, 2006, an increase of $5.332 billion or 6.8% over December 31, 2005. * Policyholders' equity was $10.006 billion as of September 30, 2006, an increase of $1.148 billion or 13.0% over December 31, 2005. * Statutory surplus as regards policyholders for the combined operations For the department of the British War Office during World War II, see . In the military, combined operations are operations conducted by forces of two or more allied nations acting together for the accomplishment of a single mission. See also
LMIC Labor Market Information Center LMIC Livestock Marketing Information Center LMIC Liberty Mutual Insurance Company LMIC Low or Middle-Income Countries LMIC Left Message for Incoming Call ") and its U.S. affiliates was $11.508 billion as of September 30, 2006, an increase of $1.639 billion or 16.6% over December 31, 2005. * The consolidated debt-to-capital ratio including accumulated other comprehensive income In 1997 the Financial Accounting Standards Board issued a Statement on Financial Accounting Standards entitled “Comprehensive Income”. This statement required all income statement items to be reported either as a regular item in the income statement and or a special item as ("AOCI AOCI Accumulated Other Comprehensive Income AOCI Airport Operators Council International (now Airports Association Council International) AOCI Airborne Ocean Color Imager AOCI Accredited Off-Campus Instruction AOCI Adoption Option Committee, Inc. ") as of September 30, 2006 was 25.0%, an increase of 1.6 points over December 31, 2005. Excluding AOCI, the consolidated debt-to-capital ratio was 25.7%, an increase of 1.5 points from December 31, 2005. [TABLE OMITTED] Financial Information: Liberty Mutual Group's financial results, management's discussion and analysis Management's discussion and analysis (MD&A) A report from management to shareholders that accompanies the firm's financial statements in the annual report. It explains the period's financial results and enables management to discuss topics that may not be apparent in the financial of operating results and financial condition, accompanying financial statements and other supplemental financial information for the three and nine months ended September 30, 2006 are available on the Company's Investor Relations Investor relations The process by which the corporation communicates with its investors. web site at www.libertymutual.com/investors. Conference Call Information: At 1:00 p.m. EST today, Edmund F. Kelly, Liberty Mutual Group Chairman, President and CEO, will host a conference call to discuss the Company's financial results. To listen to the call and participate in Q&A, please dial 877-825-5811 fifteen minutes before the starting time Noun 1. starting time - the time at which something is supposed to begin; "they got an early start"; "she knew from the get-go that he was the man for her" commencement, get-go, offset, outset, showtime, start, kickoff, beginning, first using conference ID number 7280170. A replay will be available until November 10, 2006 at 877-519-4471 using the reservation number 7280170. About Liberty Mutual Group Liberty Mutual Group is a diversified global insurer and sixth largest property and casualty insurer in the U.S. based on 2005 direct written premium. The Company also ranks 102nd on the Fortune 500 list of largest corporations in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. based on 2005 revenue. As of December 31, 2005, LMG had $78.824 billion in consolidated assets, $69.966 billion in consolidated liabilities, and $21.161 billion in annual consolidated revenue. LMG, through its subsidiaries and affiliated companies Affiliated Companies A situation that occurs when one company owns a minority interest (less than 50%) in another company. Also refers to companies that are related to each other in some way. Notes: An affiliated company is sometimes referred to as a subsidiary. , offers a wide range of property-casualty insurance products and services to individuals and businesses alike. In 2001 and 2002, the Company formed a mutual holding company structure, whereby the three principal mutual insurance companies, LMIC, Liberty Mutual Fire Insurance Company ("LMFIC LMFIC Liberty Mutual Fire Insurance Company ") and Employers Insurance Company of Wausau ("EICOW"), each became separate stock insurance companies under the ownership of Liberty Mutual Holding Company. Functionally, the Company conducts its business through four strategic business units: Personal Market, Commercial Markets, Agency Markets (formerly Regional Agency Markets but now includes Wausau and Surety) and International. Each business unit operates independently of the others and has dedicated sales, underwriting, claims, actuarial ac·tu·ar·y n. pl. ac·tu·ar·ies A statistician who computes insurance risks and premiums. [Latin , financial and certain information technology resources. Management believes this structure allows each business unit to execute its business strategy and/or to make acquisitions without impacting or disrupting the operations of the Company's other business units. LMG employs over 39,000 people in more than 900 offices throughout the world. For a full description of the Company's business operations Business operations are those activities involved in the running of a business for the purpose of producing value for the stakeholders. Compare business processes. The outcome of business operations is the harvesting of value from assets , products and distribution channels, please visit Liberty Mutual's Investor Relations web site at www.libertymutual.com/investors. Forward-Looking Statements This press release contains forward-looking statements concerning LMG's future financial and business performance. These statements represent LMG's beliefs concerning future operations, strategies, financial results or other developments, and contain words such as "may," "expects," "should," "believes," "estimates," or similar expressions. Because these forward-looking statements are based on assumptions that are subject to significant business, economic and competitive uncertainties, many of which are beyond LMG's control or are subject to change, actual results could be materially different. In particular, the sufficiency of LMG's reserves for asbestos, environmental and toxic tort A toxic tort is a special type of personal injury lawsuit in which the plaintiff claims that exposure to a chemical caused the plaintiff's toxic injury or disease. Different types Toxic torts arise in different contexts. claims, ("A&E"), as well as its results of operations, financial condition and liquidity, to the extent impacted by the sufficiency of the A&E reserves, are subject to a number of potential adverse developments, including adverse developments involving A&E claims and the related outcome of 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. , the willingness of parties to settle disputes, the interpretation of aggregate coverage limits, LMG's ability to recover 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. for A&E and other claims, the legal, economic, regulatory, and legislative environments, and their impact on the future development of A&E claims, and the impact of bankruptcies of various asbestos producers and related businesses. Other factors that could cause actual results to differ include: LMG's inability to obtain price increases due to competition or otherwise; the performance of LMG's investment portfolios, weakening U.S. and global economic conditions; insufficiency INSUFFICIENCY. What is not competent; not enough. of loss reserves; the occurrence of natural or man-made catastrophic events exceeding LMG's expectations; adverse changes in loss cost trends, adverse developments in the cost, availability and/or ability to collect reinsurance; the ability of LMG's subsidiaries to pay dividends to LMG; adverse results or other consequences from legal proceedings All actions that are authorized or sanctioned by law and instituted in a court or a tribunal for the acquisition of rights or the enforcement of remedies. or regulatory investigations or reforms, including governmental actions regarding the compensation of brokers and agents and the sale of nontraditional products and related disclosures; unusual loss activity resulting from adverse weather conditions, including storms, hurricanes, hail, snowfall and winter conditions; the tax impact of the repatriation Repatriation The process of converting a foreign currency into the currency of one's own country. Notes: If you are American, converting British Pounds back to U.S. dollars is an example of repatriation. of foreign earnings; larger than expected assessments for 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. funds and involuntary market pools; a downgrade in LMG's insurance subsidiaries' ratings; restrictions on LMG's ability to use credit scoring Credit scoring A statistical technique that combines several financial characteristics to form a single score to represent a customer's creditworthiness. in the pricing and underwriting of personal lines policies; and amendments and changes to the risk-based capital requirements Risk-Based Capital Requirement A stated requirement of liquid reserves placed upon banks and institutions that deal in risky ventures. Notes: These requirements exist for the protection of investors who hold an interest in these types of businesses. . LMG's forward-looking statements speak only as of the date of this release or as of the date they are made and should be regarded solely as LMG's current estimates and beliefs. LMG undertakes no obligation to update these forward-looking statements. For a further discussion of these and other risks and uncertainties, see LMG's web site at www.libertymutual.com/investors. |
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