Old Republic Reports Second Quarter and First Half Results Supported by Continued Strength of General Insurance Lines
July 28, 2006
CHICAGO,-- Old Republic International Corporation (NYSE: ORI), announced the following results for the second quarter and first half of 2006:
Financial Highlights (unaudited; amounts in millions except per share data and percentages; all per share amounts are shown on a diluted basis and have been restated retroactively to reflect the 25% stock dividend issued in December 2005)
| Quarters Ended June 30, |
Six Months Ended June 30, |
|||||
| 2006 | 2005 | Change | 2006 | 200 | Change | |
| Operating Revenues | $940.7 | $932.1 | .9% | $1,876.1 | $1,804.4 | 4.0% |
| Net Operating Income | $121.3 | $163.9* | -26.0% | $233.8 | $273.0* | -14.4% |
| Net Income | $126.6 | $172.3* | -26.5% | $244.0 | $286.6* | -14.8% |
| Diluted Earnings Per Share: | ||||||
| Net operating income: | ||||||
| Before non-recurring tax benefit | $0.5 | $0.51 | 2.0% | $1.01 | $0.98 | 3.1% |
| 2005 non-recurring tax benefit | - 0.20 | - 0.20 | ||||
| Total | 0.52 | 0.71 | -26.8% | 1.01 | 1.18 | -14.4% |
| Net realizedinvestment gains | 0.02 | 0.03 | 0.04 | .06 | ||
| Net income | $0.54 | $0.74 | -27.0% | $1.05 | $1.24 | -15.3% |
Second quarter and first half 2006 earnings were constrained by the accelerated recognition of stock option expenses of $4.1 million ($2.6 million after tax or one cent per diluted share). The additional charge stems from second quarter option grants to employees who meet certain age and service criteria, typically long-term employees who are ages 57 or older. Under the recently issued Statement of Financial Accounting Standards No. 123R, "Share- Based Payment", the values attributed to such options must be expensed immediately. On the other hand, second quarter and first half 2005 earnings were enhanced by the posting of a non-recurring recovery of income taxes and related accumulated interest of $57.9 million ($45.9 million net of tax, or 20 cents per diluted share). The recovery stemmed from a favorable resolution of the Company's claim for a permanent Federal income tax refund applicable to the three years ended December 31, 1990.
Source: Old Republic International Corporation
Contact ALTA at 202-296-3671 or [email protected].