Old Republic Reports Higher Third Quarter and Year-to-Date Operating Earnings

October 28, 2005

Old Republic International Corporation (NYSE: ORI) reported operating earnings growth of 10.7 percent for the third quarter of 2005. Net operating income, which excludes realized investment gains or losses, was $119.2 million, or 64 cents per share in the quarter compared to $107.6 million, or 58 cents per share, in the same year-ago period. Net income in this year's third quarter totaled $121.6 million, or 65 cents per share, versus $109.1 million, or 59 cents per share, for the year-ago quarter.

For the first nine months of 2005, net operating income grew by 22.5 percent to $392.3 million, or $2.12 per share in 2005, compared to $320.1 million, or $1.73 per share, for 2004. Net income was $408.2 million, or $2.20 per share, versus $334.5 million, or $1.81 per share, for the same period of 2004. Net operating and net income for the first nine months of 2005 include a non-recurring recovery of income taxes and related accumulated interest of $57.9 million ($45.9 million net of tax or 25 cents per share).

The recovery stems from a recent favorable resolution of the Company's claim for a permanent Federal income tax refund applicable to the three years ended December 31, 1990. Consolidated pretax earnings for the first nine months of 2004 were affected adversely by required non-recurring stock option compensation charges of $5.6 million, (or 2 cents per share after tax) representing the expense of a vesting acceleration of stock option costs.

Financial Highlights
(unaudited; amounts in millions except share data and percentages; all per-share amounts are stated on a diluted basis)
Quarters Ended,September 30, Nine Months Ended September 30,
2005 2004 Change 2005 2004 Change
Total Revenues $954.7 $880.3 8.5% $2,779.9 $2,569.8 8.2%
Net Operating Income $119.2 $107.6 10.7% $392.3* $320.1 22.5%
Net Income $121.6 $109.1 11.5% $408.2* $334.5 22.0%
Diluted Earnings
Per Share6.15:5.69
4.914.Net Operating
Income $0.64 $0.58 10.3% $2.12* $1.73 22.5%
Net Income $0.65 $0.59 10.2% $2.20* $1.81 21.5%


* Includes non-recurring income tax and related accumulated interest recovery of $45.9 after tax, or 25 cents per share.

Source: Old Republic


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