RLI Reports Second Quarter Earnings.PEORIA, Ill. -- RLI RLI Realtors Land Institute RLI Reserve Life Index (oil industry) RLI Rhodesian Light Infantry (Rhodesian Army Unit) RLI Retail & Leisure International RLI Resource List Interoperability Corp. (NYSE NYSE See: New York Stock Exchange : RLI) - RLI Corp. reported second quarter 2008 net earnings of $38.7 million ($1.77 per share). For the six months ended June 30, 2008, net earnings were $64.1 million ($2.91 per share). [TABLE OMITTED] Highlights for the quarter included: * Operating earnings Operating Earnings Profits after subtracting expenses such as marketing, cost of goods sold, administration and general operating costs from revenue. Notes: Tax and interest expenses are not subtracted - operating earnings are synonymous with EBIT (earnings before of $33.4 million ($1.53 per share). * Combined ratio of 78.0. * Book value per share of $34.72. * Net operating cash flow Operating cash flow Earnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements. of $38.5 million. * Favorable development from prior years' loss reserves of $17.4 million pretax ($0.52 per share), net of bonus and profit-sharing related expenses. * Midwest flood property losses of $2.2 million pretax ($0.06 per share). "We are pleased with our second quarter results. Our results demonstrate the positive influence of our commitment to underwriting discipline especially in the face of today's soft market," said RLI Corp. President & 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. Jonathan E. Michael. "We continue to optimistically look to the future as we build capabilities through our profit-driven, underwriting-focused business model." Operating earnings for the first six months of 2008 were $56.4 million ($2.56 per share) versus $69.6 million ($2.83 per share) for the comparable period last year. Please refer to the table on Page 2 of this release for the quarterly and year-to-date impact of specific items. Second quarter underwriting results RLI achieved $29.1 million of underwriting income Underwriting income For an insurance company, the difference between the premiums earned and the costs of settling claims. in the second quarter of 2008 on a 78.0 combined ratio, compared to $39.1 million of underwriting income on a 71.6 combined ratio in the same quarter for 2007. [TABLE OMITTED] RLI reported year-to-date underwriting income of $43.8 million representing an 83.6 combined ratio versus the $64.7 million underwriting income representing a 76.5 combined ratio for the same period last year. Other income For the quarter, investment income grew 2.8% to $19.6 million. For the six month period ended June 30, 2008, investment income was $38.9 million, up 2.1% over the same period last year. The investment portfolio's total return for the quarter was -0.5%; the bond portfolio was -0.2% and the equity portfolio was -1.9%. Through six months, the investment portfolio's total return was -0.6% with the bond portfolio returning 1.4% and equities returning -8.9%. Our investment returns continue to outpace out·pace tr.v. out·paced, out·pac·ing, out·pac·es To surpass or outdo (another), as in speed, growth, or performance. outpace Verb [-pacing, the leading market indices including the U.S. Lehman Aggregate, 1.1% return year to date, and the S&P 500, -11.9% return year to date. Comprehensive earnings, which include after-tax unrealized gains/losses from the investment portfolio, were $13.3 million for the quarter ($0.61 per share) versus $34.9 million ($1.43 per share) over the same period in 2007. Year-to-date comprehensive earnings were $19.9 million, or $0.91 per share, compared to $68.0 million ($2.77 per share) for the same period last year. Supplemental disclosure regarding the earnings impact of specific items [TABLE OMITTED] Other news During the quarter, the company announced the creation of a new product division, RLI Fidelity. The group will focus on financial fidelity and commercial crime insurance products, and will be located in New York City New York City: see New York, city. New York City City (pop., 2000: 8,008,278), southeastern New York, at the mouth of the Hudson River. The largest city in the U.S. . In the second quarter of 2008, we repurchased 318,000 of our shares at an average cost of $49.96 ($15.9 million). As of June 30, 2008, we have $40.1 million of remaining capacity from the $200 million repurchase program approved in 2007. The company paid a second quarter cash dividend of $0.25 per share on July 15, 2008. The dividend is a two-cent, or 9% increase over the prior quarter's dividend. RLI's cumulative dividends, including this recent payment, are more than $166 million paid in 128 consecutive quarterly dividends. The company's dividend yield would be 2.2%, based on the $1.00 annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. dividend and today's closing stock price of $44.64. At 10 a.m. CDT CDT abbr. Central Daylight Time CDT Central Daylight Time CDT n abbr (US) (= Central Daylight Time) → hora de verano del centro; (BRIT tomorrow, July 16, 2008, RLI management will hold a conference call to discuss quarterly results with insurance industry analysts. Interested parties may listen to the discussion through the Internet at RLI's website, www.rlicorp.com. Underwriting income, operating earnings, earnings per share (EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. ) from operations and other per share items are non-GAAP financial measures, and we believe that investors' understanding of RLI's core operating performance is enhanced by our disclosure of these financial measures. Underwriting income or profit represents the pretax profitability of our insurance operations and is derived by subtracting losses and settlement expenses, policy acquisition costs, and insurance operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. from net premium earned. Operating earnings and EPS from operations consist of our net earnings reduced by net realized investment gains and taxes related to net realized gains. Our definitions of these items may not be comparable to the definitions used by other companies. Net earnings and net earnings per share are the GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). financial measures that are most directly comparable to operating earnings and EPS from operations. All earnings per share data are calculated using fully diluted shares. Combined ratio refers to a GAAP combined ratio. S&P 500 returns provided by Standard and Poor's Noun 1. Standard and Poor's - a broadly based stock market index Standard and Poor's Index . U.S. Lehman Aggregate returns provided by Lehman Brothers Lehman Brothers Holdings Inc. (NYSE: LEH), founded in 1850, is a diversified, global financial services firm. It is a participant in investment banking, equity and fixed income sales, research and trading, investment management, private equity, and private banking. . Except for historical information, this news release may include forward-looking statements (within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934) including, without limitation, statements reflecting our current expectations about the future performance of our company or our business segments or about future market conditions. These statements are subject to certain risk factors that could cause actual results to differ materially. Various risk factors that could affect future results are listed in the company's filings with the Securities and Exchange Commission, including the 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. Annual Report for the year ended December 31, 2007. RLI, a specialty insurance company, offers a diversified portfolio of property and casualty coverages and surety bonds serving "niche" or underserved markets. RLI operates in all 50 states from office locations across the country. The company's talented associates have delivered underwriting profits in 27 of the last 31 years, including the last 12. RLI's insurance subsidiaries - RLI Insurance Company, Mt. Hawley Insurance Company and RLI Indemnity Company - are rated A+ "Superior" by A.M. Best Company and A+ "Strong" by Standard & Poor's. For additional information, contact Treasurer John Robison John Robison is the name of:
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