Ohio Casualty (NASDAQ:OCAS)
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Ohio Casualty Corporation (NASDAQ:OCAS) today announced the following
results for its third quarter ended September 30, 2006, compared with
the same period of the prior year:
Net income of $55.3 million, or $0.89 per diluted share, versus
$55.5 million, or $0.85 per diluted share;
All Lines combined ratio (GAAP) of 93.9% versus 99.5%; and
Operating income (A) of $47.8 million ($0.77 per diluted share)
versus $32.7 million ($0.50 per diluted share).
Results for the nine months ended September 30, 2006, compared with the
same period of the prior year:
Net income of $142.8 million, or $2.24 per diluted share, versus
$135.4 million, or $2.02 per diluted share;
All Lines combined ratio (GAAP) of 96.1% versus 96.9%; and
Operating income (A) of $122.7 million ($1.92 per diluted share)
versus $103.6 million ($1.55 per diluted share).
President and Chief Executive Officer Dan Carmichael commented, “We
are pleased to deliver strong operating results across all segments for
the third quarter through a combination of disciplined underwriting,
lower catastrophe losses, efficiency gains and the benefit of favorable
loss frequency and prior accident year development trends. While we
remain focused on profitable, disciplined underwriting, good
opportunities for growth are harder to find in the increasingly
competitive market, however, I am encouraged by the acceptance of our
new technology applications and the increase in production of new
business by our agents.
“Last quarter’s
results support our positive outlook for our future, including our
ability to maintain solid underwriting results in a softening market and
creating more value for our shareholders. Rating agencies have expressed
similar confidence in our company through their actions during the
quarter. With Standard & Poor’s upgrading
its rating of us, now all four of the rating agencies that assess our
financial strength have assigned investment grade ratings with Fitch
subsequently upgrading their existing investment grade rating by one
notch. Finally, the Board’s decision in
September to approve a second, $100 million share repurchase program
reaffirms our commitment to maximize shareholder value as our overall
financial strength continues to grow.”
The major components of net income are summarized in the table below:
Summary Income Statement
Three Months
Nine Months
($ in millions,
Ended Sept 30,
Ended Sept 30,
except share data)
2006
2005
2006
2005
Premiums and finance charges earned
$356.3
$362.5
$1,069.5
$1,090.3
Investment income less expenses
51.3
51.4
154.1
148.4
Investment gains realized, net
11.4
22.4
30.9
36.2
Total revenues
419.0
436.3
1,254.5
1,274.9
Losses and benefits for policyholders
188.8
204.5
577.1
587.3
Loss adjustment expenses
35.8
42.5
115.2
125.8
Underwriting expenses
110.3
113.7
334.8
343.2
Corporate and other expenses
8.0
9.2
29.3
42.8
Total expenses
342.9
369.9
1,056.4
1,099.1
Income before income taxes
76.1
66.4
198.1
175.8
Income tax expense/(benefit):
On investment gains realized
3.9
(0.4)
10.8
4.4
On all other income
16.9
11.3
44.5
36.0
Total income tax expense
20.8
10.9
55.3
40.4
Net income
$55.3
$55.5
$142.8
$135.4
Average shares outstanding - diluted
62,441,227
65,656,774
63,868,978
68,012,120
Net income, per share - diluted
$0.89
$0.85
$2.24
$2.02
Net premiums written decreased 2.6% over the same quarter last year
primarily as a result of lower in-force policy counts and rate
reductions in Personal Lines. These decreases were partially offset by
increased new business premium production in Personal and Commercial
Lines, which is a positive reflection of the new marketing, sales and
product initiatives launched this year to profitably grow the business.
Results for the third quarter included $13.7 million of favorable
development in loss and loss adjustment expense reserves for prior
accident years, compared with unfavorable development of $3.1 million in
the third quarter of 2005. Reserve development was favorable for most
product lines during the third quarter 2006 with the exception of a
couple product lines, most notably workers’
compensation, which experienced adverse development.
Consolidated pre-tax net investment income for the quarter remained
relatively flat compared with the prior year. However, after giving
consideration in both three and nine month periods ending September 30,
2005 of the $2.5 million of interest income related to federal income
tax settlements with the Internal Revenue Service which was finalized
during the third quarter of 2005, investment income increased 4.9% and
5.6%, respectively. The increase in investment income is a result of
reduced investment related expenses, positive operating cash flows and
an improvement in reinvestment yields resulting from the upward movement
in interest rates compared with the prior year.
During the third quarter of 2005, settlements with the Internal Revenue
Service for tax years 1996 through 2001 were favorably concluded. The
result of these settlements was an increase to net income for the
quarter and nine months ended September 30, 2005 of $16.8 million ($0.26
per share for the quarter and $0.25 per share for the nine-months). The
effect on operating income, which excludes that portion of the
settlement applicable to taxes on realized capital gains and losses, was
an increase of $6.1 million, or $0.09 per share for both the third
quarter and nine months ended September 30, 2005. The above-referenced
items had the effect of lowering the overall effective income tax rate
for the nine months ended September 30, 2005 by 6.6 points.
Book value per share increased $1.60, or 7.1% to $24.14 at September 30,
2006, compared to $22.54 at December 31, 2005.
During the third quarter of 2006, the Corporation repurchased 249,186
shares of its common stock at an average cost of $25.87. These
repurchases complete the previous share repurchase program which was
authorized by the Corporation’s Board of
Directors in the third quarter of 2005. Under this program, four million
shares were repurchased at an average cost of $27.94. On September 28,
2006, the Board of Directors authorized another share repurchase program
with the ability to repurchase up to $100 million of the Corporation’s
common stock. Purchases may be made in the open market or in privately
negotiated transactions. As of October 31, 2006, the Corporation has
repurchased 227,200 shares under the new share repurchase program at an
average cost of $27.19.
On July 26, 2006, Standard and Poor’s (S&P)
announced that it had upgraded the senior unsecured debt rating of the
Corporation to BBB- and the insurance financial strength rating of its
operating subsidiaries to A-. In this same action, S&P changed the
outlook on ratings to stable. In addition, during the third quarter,
Fitch, Inc. (Fitch) announced that it has upgraded our financial
strength rating to A from A- and upgraded the Corporation’s
issuer default rating to BBB+ from BBB. At the same time, Fitch upgraded
the outstanding debt rating to BBB from BBB- and changed the outlook
from positive to stable.
For a more detailed discussion of the financial condition and the
results of operations at September 30, 2006, please see the Quarterly
Report on Form 10-Q for this period, filed with the Securities and
Exchange Commission (SEC).
Supplemental financial information for the third quarter ended September
30, 2006, including certain financial measures, is available on Ohio
Casualty Corporation's website at www.ocas.com
and was also filed on Form 8-K with the SEC. A discussion of the
differences between statutory accounting principles and accounting
principles generally accepted in the United States is included in Item
15 of the Ohio Casualty Corporation's Annual Report on Form 10-K for the
year ended December 31, 2005.
Investors are advised to read the safe harbor statement at the end of
this release.
Conference Call
Ohio Casualty Corporation will conduct a teleconference call to discuss
information included in this news release and related matters at 10:00
a.m. EST on Thursday, November 2, 2006. The call is being webcast by
Vcall and can be accessed directly through Ohio Casualty Corporation's
website www.ocas.com and Vcall’s
Investor Calendar website www.investorcalendar.com.
The webcast will be available for replay through February 3, 2007. To
listen to call playback by telephone, dial 1-800-642-1687, then enter ID
code 7349656. Call playback begins at 1 p.m. EST on November 2, 2006 and
extends through 11:59 p.m. on November 4, 2006.
Quiet Period
Ohio Casualty Corporation observes a quiet period and will not comment
on financial results or expectations during quiet periods. The quiet
period for the fourth quarter will start January 1, 2007 extending
through the time of the earnings conference call, tentatively scheduled
for February 8, 2007.
Corporate Profile
Ohio Casualty Corporation is the holding company of The Ohio Casualty
Insurance Company, which is one of six property-casualty insurance
companies that make up Ohio Casualty Group, collectively referred to as
Consolidated Corporation. The Ohio Casualty Insurance Company was
founded in 1919 and is licensed in 49 states. Ohio Casualty Group is
ranked 50th among U.S. property/casualty insurance groups based on net
premiums written (Best’s Review, July
2006). The Group’s member companies write
auto, home and business insurance. Ohio Casualty Corporation trades on
the NASDAQ Stock Market under the symbol OCAS and had assets of
approximately $5.8 billion as of September 30, 2006.
Safe Harbor Statement
Ohio Casualty Corporation publishes forward-looking statements relating
to such matters as anticipated financial performance, business prospects
and plans, regulatory developments and similar matters. The statements
contained in this news release that are not historical information, are
forward-looking statements within the meaning of The Private Securities
Litigation Reform Act of 1995. The operations, performance and
development of the Consolidated Corporation's business are subject to
risks and uncertainties, which may cause actual results to differ
materially from those contained in or supported by the forward-looking
statements in this release. The risks and uncertainties that may affect
the operations, performance, development and results of the Consolidated
Corporation's business include the following: changes in property and
casualty reserves; catastrophe losses; premium and investment growth;
product pricing environment; availability of credit; changes in
government regulation; performance of financial markets; fluctuations in
interest rates; availability and pricing of reinsurance; litigation and
administrative proceedings; rating agency actions; acts of war and
terrorist activities; ability to appoint and/or retain agents; ability
to achieve targeted expense savings; ability to achieve premium targets
and profitability goals; and general economic and market conditions.
Ohio Casualty Corporation undertakes no obligation to publicly release
any revisions to the forward-looking statements contained in this
release, or to update them to reflect events or circumstances occurring
after the date of this release, or to reflect the occurrence of
unanticipated events. Investors are also advised to consult any further
disclosures made on related subjects in Ohio Casualty Corporation’s
reports filed with the SEC or in subsequent press releases.
(A) Reconciliation of Non-GAAP Financial Measures to GAAP Financial
Measures
Reconciliation of Net Income to Operating Income
Management of the Consolidated Corporation believes the significant
volatility of realized investment gains and losses limits the usefulness
of net income as a measure of current operating performance.
Accordingly, management uses the non-GAAP financial measure of operating
income to further evaluate current operating performance. Operating
income, both in dollar amounts and per share amounts, are reconciled to
net income and net income per share in the table below:
Three Months
Nine Months
Ended Sept 30,
Ended Sept 30,
($ in millions, except per share data)
2006
2005
2006
2005
Operating income
$47.8
$32.7
$122.7
$103.6
After-tax net realized gains
7.5
22.8
20.1
31.8
Net income
$55.3
$55.5
$142.8
$135.4
Operating income per share - diluted
$0.77
$0.50
$1.92
$1.55
After-tax net realized gains per share - diluted
0.12
0.35
0.32
0.47
Net income per share - diluted
$0.89
$0.85
$2.24
$2.02
As noted above, results for the third quarter and nine months ended
September 30, 2005, include the effect of settlements with the Internal
Revenue Service related to tax years 1996 through 2001. The settlements
increased net income by $16.8 million ($0.26 per share for the third
quarter, $0.25 per share for the nine months), and operating income by
$6.1 million, or $0.09 per share for quarter and nine months.
Reconciliation of Net Income Return on Equity to Operating Income
Return on Equity
Operating income return on equity is a ratio management calculates using
non-GAAP financial measures. It is calculated by dividing the annualized
consolidated operating income (see calculation below) for the most
recent quarter by the adjusted average shareholders' equity for the
quarter using a simple average of beginning and ending balances for the
quarter, excluding from equity after-tax unrealized investment gains and
losses. This ratio provides management with an additional measure to
evaluate the results excluding the unrealized changes in the valuation
of the investment portfolio that can fluctuate between periods. The
following table reconciles operating income return on equity to net
income return on equity, the most directly comparable GAAP measure:
Three Months
Nine Months
Ended Sept 30,
Ended Sept 30,
($ in millions)
2006
2005
2006
2005
Net income
$ 55.3
$ 55.5
$ 142.8
$ 135.4
Average shareholders' equity
1,426.4
1,401.6
1,452.1
1,343.8
Return on equity based on annualized net income
15.5%
15.8%
13.1%
13.4%
Operating income
$ 47.8
$ 32.7
$ 22.7
$ 103.6
Adjusted average shareholders' equity
1,264.7
1,149.4
1,254.5
1,089.3
Return on equity based on annualized operating income
15.1%
11.4%
13.0%
12.7%
Average shareholders' equity
$1,426.4
$1,401.6
$1,452.1
$1,343.8
Average unrealized gains
161.7
252.2
197.6
254.5
Adjusted average shareholders' equity
$1,264.7
$1,149.4
$1,254.5
$1,089.3
Ohio Casualty Corporation (NASDAQ:OCAS) today announced the
following results for its third quarter ended September 30, 2006,
compared with the same period of the prior year:
-- Net income of $55.3 million, or $0.89 per diluted share,
versus $55.5 million, or $0.85 per diluted share;
-- All Lines combined ratio (GAAP) of 93.9% versus 99.5%; and
-- Operating income (A) of $47.8 million ($0.77 per diluted
share) versus $32.7 million ($0.50 per diluted share).
Results for the nine months ended September 30, 2006, compared
with the same period of the prior year:
-- Net income of $142.8 million, or $2.24 per diluted share,
versus $135.4 million, or $2.02 per diluted share;
-- All Lines combined ratio (GAAP) of 96.1% versus 96.9%; and
-- Operating income (A) of $122.7 million ($1.92 per diluted
share) versus $103.6 million ($1.55 per diluted share).
President and Chief Executive Officer Dan Carmichael commented,
"We are pleased to deliver strong operating results across all
segments for the third quarter through a combination of disciplined
underwriting, lower catastrophe losses, efficiency gains and the
benefit of favorable loss frequency and prior accident year
development trends. While we remain focused on profitable, disciplined
underwriting, good opportunities for growth are harder to find in the
increasingly competitive market, however, I am encouraged by the
acceptance of our new technology applications and the increase in
production of new business by our agents.
"Last quarter's results support our positive outlook for our
future, including our ability to maintain solid underwriting results
in a softening market and creating more value for our shareholders.
Rating agencies have expressed similar confidence in our company
through their actions during the quarter. With Standard & Poor's
upgrading its rating of us, now all four of the rating agencies that
assess our financial strength have assigned investment grade ratings
with Fitch subsequently upgrading their existing investment grade
rating by one notch. Finally, the Board's decision in September to
approve a second, $100 million share repurchase program reaffirms our
commitment to maximize shareholder value as our overall financial
strength continues to grow."
The major components of net income are summarized in the table
below:
-0-
*T
Summary Income
Statement Three Months Nine Months
($ in millions, Ended Sept 30, Ended Sept 30,
except share data) 2006 2005 2006 2005
---------------------- ----------- ----------- ----------- -----------
Premiums and finance
charges earned $356.3 $362.5 $1,069.5 $1,090.3
Investment income less
expenses 51.3 51.4 154.1 148.4
Investment gains
realized, net 11.4 22.4 30.9 36.2
----------------------- -----------------------
Total revenues 419.0 436.3 1,254.5 1,274.9
Losses and benefits
for policyholders 188.8 204.5 577.1 587.3
Loss adjustment
expenses 35.8 42.5 115.2 125.8
Underwriting expenses 110.3 113.7 334.8 343.2
Corporate and other
expenses 8.0 9.2 29.3 42.8
----------------------- -----------------------
Total expenses 342.9 369.9 1,056.4 1,099.1
Income before income
taxes 76.1 66.4 198.1 175.8
Income tax
expense/(benefit):
On investment gains
realized 3.9 (0.4) 10.8 4.4
On all other income 16.9 11.3 44.5 36.0
----------------------- -----------------------
Total income tax
expense 20.8 10.9 55.3 40.4
Net income $55.3 $55.5 $142.8 $135.4
======================= =======================
Average shares
outstanding - diluted 62,441,227 65,656,774 63,868,978 68,012,120
Net income, per share
- diluted $0.89 $0.85 $2.24 $2.02
*T
Net premiums written decreased 2.6% over the same quarter last
year primarily as a result of lower in-force policy counts and rate
reductions in Personal Lines. These decreases were partially offset by
increased new business premium production in Personal and Commercial
Lines, which is a positive reflection of the new marketing, sales and
product initiatives launched this year to profitably grow the
business.
Results for the third quarter included $13.7 million of favorable
development in loss and loss adjustment expense reserves for prior
accident years, compared with unfavorable development of $3.1 million
in the third quarter of 2005. Reserve development was favorable for
most product lines during the third quarter 2006 with the exception of
a couple product lines, most notably workers' compensation, which
experienced adverse development.
Consolidated pre-tax net investment income for the quarter
remained relatively flat compared with the prior year. However, after
giving consideration in both three and nine month periods ending
September 30, 2005 of the $2.5 million of interest income related to
federal income tax settlements with the Internal Revenue Service which
was finalized during the third quarter of 2005, investment income
increased 4.9% and 5.6%, respectively. The increase in investment
income is a result of reduced investment related expenses, positive
operating cash flows and an improvement in reinvestment yields
resulting from the upward movement in interest rates compared with the
prior year.
During the third quarter of 2005, settlements with the Internal
Revenue Service for tax years 1996 through 2001 were favorably
concluded. The result of these settlements was an increase to net
income for the quarter and nine months ended September 30, 2005 of
$16.8 million ($0.26 per share for the quarter and $0.25 per share for
the nine-months). The effect on operating income, which excludes that
portion of the settlement applicable to taxes on realized capital
gains and losses, was an increase of $6.1 million, or $0.09 per share
for both the third quarter and nine months ended September 30, 2005.
The above-referenced items had the effect of lowering the overall
effective income tax rate for the nine months ended September 30, 2005
by 6.6 points.
Book value per share increased $1.60, or 7.1% to $24.14 at
September 30, 2006, compared to $22.54 at December 31, 2005.
During the third quarter of 2006, the Corporation repurchased
249,186 shares of its common stock at an average cost of $25.87. These
repurchases complete the previous share repurchase program which was
authorized by the Corporation's Board of Directors in the third
quarter of 2005. Under this program, four million shares were
repurchased at an average cost of $27.94. On September 28, 2006, the
Board of Directors authorized another share repurchase program with
the ability to repurchase up to $100 million of the Corporation's
common stock. Purchases may be made in the open market or in privately
negotiated transactions. As of October 31, 2006, the Corporation has
repurchased 227,200 shares under the new share repurchase program at
an average cost of $27.19.
On July 26, 2006, Standard and Poor's (S&P) announced that it had
upgraded the senior unsecured debt rating of the Corporation to BBB-
and the insurance financial strength rating of its operating
subsidiaries to A-. In this same action, S&P changed the outlook on
ratings to stable. In addition, during the third quarter, Fitch, Inc.
(Fitch) announced that it has upgraded our financial strength rating
to A from A- and upgraded the Corporation's issuer default rating to
BBB+ from BBB. At the same time, Fitch upgraded the outstanding debt
rating to BBB from BBB- and changed the outlook from positive to
stable.
For a more detailed discussion of the financial condition and the
results of operations at September 30, 2006, please see the Quarterly
Report on Form 10-Q for this period, filed with the Securities and
Exchange Commission (SEC).
Supplemental financial information for the third quarter ended
September 30, 2006, including certain financial measures, is available
on Ohio Casualty Corporation's website at www.ocas.com and was also
filed on Form 8-K with the SEC. A discussion of the differences
between statutory accounting principles and accounting principles
generally accepted in the United States is included in Item 15 of the
Ohio Casualty Corporation's Annual Report on Form 10-K for the year
ended December 31, 2005.
Investors are advised to read the safe harbor statement at the end
of this release.
Conference Call
Ohio Casualty Corporation will conduct a teleconference call to
discuss information included in this news release and related matters
at 10:00 a.m. EST on Thursday, November 2, 2006. The call is being
webcast by Vcall and can be accessed directly through Ohio Casualty
Corporation's website www.ocas.com and Vcall's Investor Calendar
website www.investorcalendar.com. The webcast will be available for
replay through February 3, 2007. To listen to call playback by
telephone, dial 1-800-642-1687, then enter ID code 7349656. Call
playback begins at 1 p.m. EST on November 2, 2006 and extends through
11:59 p.m. on November 4, 2006.
Quiet Period
Ohio Casualty Corporation observes a quiet period and will not
comment on financial results or expectations during quiet periods. The
quiet period for the fourth quarter will start January 1, 2007
extending through the time of the earnings conference call,
tentatively scheduled for February 8, 2007.
Corporate Profile
Ohio Casualty Corporation is the holding company of The Ohio
Casualty Insurance Company, which is one of six property-casualty
insurance companies that make up Ohio Casualty Group, collectively
referred to as Consolidated Corporation. The Ohio Casualty Insurance
Company was founded in 1919 and is licensed in 49 states. Ohio
Casualty Group is ranked 50th among U.S. property/casualty insurance
groups based on net premiums written (Best's Review, July 2006). The
Group's member companies write auto, home and business insurance. Ohio
Casualty Corporation trades on the NASDAQ Stock Market under the
symbol OCAS and had assets of approximately $5.8 billion as of
September 30, 2006.
Safe Harbor Statement
Ohio Casualty Corporation publishes forward-looking statements
relating to such matters as anticipated financial performance,
business prospects and plans, regulatory developments and similar
matters. The statements contained in this news release that are not
historical information, are forward-looking statements within the
meaning of The Private Securities Litigation Reform Act of 1995. The
operations, performance and development of the Consolidated
Corporation's business are subject to risks and uncertainties, which
may cause actual results to differ materially from those contained in
or supported by the forward-looking statements in this release. The
risks and uncertainties that may affect the operations, performance,
development and results of the Consolidated Corporation's business
include the following: changes in property and casualty reserves;
catastrophe losses; premium and investment growth; product pricing
environment; availability of credit; changes in government regulation;
performance of financial markets; fluctuations in interest rates;
availability and pricing of reinsurance; litigation and administrative
proceedings; rating agency actions; acts of war and terrorist
activities; ability to appoint and/or retain agents; ability to
achieve targeted expense savings; ability to achieve premium targets
and profitability goals; and general economic and market conditions.
Ohio Casualty Corporation undertakes no obligation to publicly
release any revisions to the forward-looking statements contained in
this release, or to update them to reflect events or circumstances
occurring after the date of this release, or to reflect the occurrence
of unanticipated events. Investors are also advised to consult any
further disclosures made on related subjects in Ohio Casualty
Corporation's reports filed with the SEC or in subsequent press
releases.
(A) Reconciliation of Non-GAAP Financial Measures to GAAP
Financial Measures
Reconciliation of Net Income to Operating Income
Management of the Consolidated Corporation believes the
significant volatility of realized investment gains and losses limits
the usefulness of net income as a measure of current operating
performance. Accordingly, management uses the non-GAAP financial
measure of operating income to further evaluate current operating
performance. Operating income, both in dollar amounts and per share
amounts, are reconciled to net income and net income per share in the
table below:
-0-
*T
Three Months Nine Months
Ended Sept 30, Ended Sept 30,
($ in millions, except per share data) 2006 2005 2006 2005
--------------------------------------- ------- ------ ------- -------
Operating income $47.8 $32.7 $122.7 $103.6
After-tax net realized gains 7.5 22.8 20.1 31.8
------- ------ ------- -------
Net income $55.3 $55.5 $142.8 $135.4
======= ====== ======= =======
Operating income per share - diluted $0.77 $0.50 $1.92 $1.55
After-tax net realized gains per share
- diluted 0.12 0.35 0.32 0.47
------- ------ ------- -------
Net income per share - diluted $0.89 $0.85 $2.24 $2.02
======= ====== ======= =======
*T
As noted above, results for the third quarter and nine months
ended September 30, 2005, include the effect of settlements with the
Internal Revenue Service related to tax years 1996 through 2001. The
settlements increased net income by $16.8 million ($0.26 per share for
the third quarter, $0.25 per share for the nine months), and operating
income by $6.1 million, or $0.09 per share for quarter and nine
months.
Reconciliation of Net Income Return on Equity to Operating Income
Return on Equity
Operating income return on equity is a ratio management calculates
using non-GAAP financial measures. It is calculated by dividing the
annualized consolidated operating income (see calculation below) for
the most recent quarter by the adjusted average shareholders' equity
for the quarter using a simple average of beginning and ending
balances for the quarter, excluding from equity after-tax unrealized
investment gains and losses. This ratio provides management with an
additional measure to evaluate the results excluding the unrealized
changes in the valuation of the investment portfolio that can
fluctuate between periods. The following table reconciles operating
income return on equity to net income return on equity, the most
directly comparable GAAP measure:
-0-
*T
Three Months Nine Months
Ended Sept 30, Ended Sept 30,
($ in millions) 2006 2005 2006 2005
------------------------------ --------- ------------------- ---------
Net income $55.3 $55.5 $142.8 $135.4
Average shareholders' equity 1,426.4 1,401.6 1,452.1 1,343.8
Return on equity based on
annualized net income 15.5% 15.8% 13.1% 13.4%
========= ========= ========= =========
Operating income $47.8 $32.7 $22.7 $103.6
Adjusted average shareholders'
equity 1,264.7 1,149.4 1,254.5 1,089.3
Return on equity based on
annualized operating income 15.1% 11.4% 13.0% 12.7%
========= ========= ========= =========
Average shareholders' equity $1,426.4 $1,401.6 $1,452.1 $1,343.8
Average unrealized gains 161.7 252.2 197.6 254.5
--------- --------- --------- ---------
Adjusted average shareholders'
equity $1,264.7 $1,149.4 $1,254.5 $1,089.3
========= ========= ========= =========
*T