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%
* Includes non-recurring income tax and related accumulated interest recovery of $45.9 after tax.
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

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