PICO Holdings, Inc. Nasdaq: PICO May 19, 2008 Exhibit 99.1 |
Safe Harbor Statement This presentation may contain "forward-looking statements." Forward- looking statements often address current expected future business and financial performance, and may contain words such as "expects," "anticipates," "intends," "plans," "believes," "seeks," or "will." Forward-looking statements may address matters that are uncertain. These uncertainties may cause actual future results to be materially different than those expressed in the forward-looking statements. PICO does not undertake to update any forward- looking statements, and undue reliance should not be placed on forward-looking statements, which speak only as of the date they are made. Other risks and uncertainties are detailed from time to time in PICO's filings with the U.S. Securities and Exchange Commission, including those described under the heading "Risk Factors" in the Company’s annual report on Form 10-K. 2 |
PICO Holdings, Inc. We are a diversified holding company that seeks to acquire assets and businesses which we identify as significantly undervalued and are unique or strategic. Management’s participation in operations can result in the recognition of fair value for the business and create substantial additional value. Our objective is to generate superior long-term growth in book value per share. 3 |
Strong, Active Deal Flow Diverse, cross-industry transaction record Ample capital resources on hand Ready access to U.S. and international capital markets Expedient action when opportunities arise Multi-disciplined, experienced transaction team 4 |
Unique and Diversified Assets Insurance in Run-Off** Real Estate Operations* Business Acquisitions and Financing** Water Resource and Storage Operations* 5 38% 28% 20% 14% Net Book Value as of March 31, 2008 *Assets held at cost **Assets held at fair value |
Water: A Critical Issue for the Southwest 6 The opportunity stems from: Significant population growth relative to decreasing availability of water resources Key challenges: access to new sources of economic water limited and finite clean water supply inadequate water storage infrastructure policies influencing resource utilization |
Population Growth 6.4% 7.6% 13.3% 10.5% 20.2% 24.9% Total U.S. California Idaho Colorado Arizona Nevada April 1, 2000 – July 1, 2006 1.0% 0.8% 2.4% 2.0% 2.8% 2.9% Total U.S. California Idaho Colorado Arizona Nevada July 1, 2006 – July 1, 2007 Source: U.S. Census Bureau 7 |
8 Source: http://www.usbr.gov/water2025/supply.html Vidler Projects Water Crisis |
Water Resource and Storage Operations 9 |
Water Resource Development Science & engineering Economics Environment Politics Ready access to capital 10 |
Project: Fish Springs Ranch 11 Meet master-planned water demands of at least 12,000 acre – feet of water by providing new water supplies of 8,000 acre – feet to enhance regional water resource management Fish Springs water is the only economic available water to meet future indicated demand |
Project: Carson-Lyon Intertie 12 Water storage tank in Dayton, Lyon County, Nevada Agreement to connect Carson City and Lyon County, Nevada municipal water systems Development of Vidler-owned Carson River water rights to approximately 4,000 acre-feet of municipal water rights for use in the Dayton corridor area which has indicated demand of over 20,000 acre – feet of water Conveyance of water through newly - built water infrastructure |
Land Holdings: Nevada Land and Resource Company, LLC Sale of land and water rights when highest and best value has been achieved Development of water rights Development of land in and around growing municipalities Retention and management of all natural resources Water Geothermal Mineral rights 13 |
Land Holdings: Union Community Partners New land acquisition and development business established in 2008 to respond to current regional and national homebuilders’ liquidity crisis Business Plan: to acquire well-located finished lots, partially developed lots, and unentitled land in select California markets Rigorous due diligence and long-term holding horizon to beat target threshold returns 14 |
Other Businesses Description of Assets Strategy Insurance in Run-Off Two holdings: Physicians Insurance of Ohio – running off medical professional liability insurance loss reserves Citation Insurance Company – running off property and casualty and workers’ compensation loss reserves Insurance companies in “run off” obtain funds to pay claims from: Maturity of fixed-income securities Sale of investments Collections from reinsurance companies Excess investment returns to shareholders, not policy holders Business Acquisitions and Financing Consists of acquired businesses, strategic interests in businesses, and activities not included in other segments Acquisition of private companies and purchase of shares in public companies Participation in financing transactions and open market purchases 15 |
Management John Hart –CEO & President Maxim Webb – EVP & CFO Damian Georgino – EVP of Corporate Development & CLO Richard Sharpe – EVP & COO John Perri – VP, Controller Raymond Webb – VP, Investments Dorothy Timian-Palmer – President & COO, Vidler Water Co. & NLRC Stephen Hartman – EVP Corporate Development and Counsel, Vidler Water Co. & NLRC 16 |
Investment Considerations Unique, diversified assets Strategic water and land assets Opportunity for liquid investment in compelling but typically non-liquid businesses and asset classes Market drivers are further strengthening potential in core businesses Highly experienced, long-tenured management Consistent increases in book value per share 17 |