Exhibit 99.1
HCC INSURANCE HOLDINGS REPORTS
RECORD FIRST QUARTER NET EARNINGS
AND EARNINGS PER SHARE
Highlights:
· Net earnings of $107.9 million, or $1.07 per diluted share
· GAAP combined ratio of 83.0%
· Gross written premium increased 4% to $746.7 million
· Net written premium increased 2% to $590.2 million
· Annualized return on equity of 11.6%
· Annualized operating return on equity(a) of 10.8%
· Book value per share increased 3% to $37.79
HOUSTON (April 29, 2014) . . .
HCC Insurance Holdings, Inc. (NYSE: HCC) today released results for its first quarter ended March 31, 2014.
Net earnings were $107.9 million, or $1.07 per diluted share, in the first quarter of 2014, compared to $105.9 million, or $1.05 per diluted share, in the same quarter of 2013.
The Company’s combined ratio was 83.0% for the first quarter of 2014, compared to 83.8% for the same quarter of 2013. The net paid loss ratio was 63.1% and 53.4% for the respective periods. HCC had no reserve development in either the first quarter of 2014 or 2013. The 2014 and 2013 results included accident year pretax net catastrophe losses of $4.6 million and $5.2 million, respectively, which reduced net earnings by $0.03 per share in both quarters.
“We are pleased to begin 2014 with the best first quarter financial performance in HCC’s history. Our businesses continue to deliver consistent, profitable results highlighted by a combined ratio of 83.0%,” said Christopher J.B. Williams, HCC’s Chief Executive Officer.
Gross written premium increased 4% to $746.7 million in the first quarter of 2014, compared to $720.2 million in the same quarter of 2013. Net written premium increased 2% to $590.2 million versus $579.2 million in the respective quarters. Net earned premium was $562.6 million in the first quarter of 2014, compared to $561.2 million in the same quarter of 2013.
Investment income increased to $56.8 million in the first quarter of 2014, compared to $55.8 million in the same quarter of 2013. As of March 31, 2014, HCC’s fixed maturity securities portfolio had an average rating of AA, with a duration of 5.0 years and an average long-term tax equivalent yield of 4.4%.
HCC generated cash flow from operations of $95.5 million in the first quarter of 2014, compared to $2.1 million in the same quarter of 2013. The Company’s cash flow was decreased by U.S. Surety collateral repayments of $6.1 million in 2014 and $67.1 million in 2013. At March 31, 2014, the Company had $500.2 million of cash and short-term investments and $169.1 million of available capacity under its $600.0 million revolving loan facility.
The Company purchased 0.7 million shares of its common stock during the first quarter of 2014 for $31.4 million at an average cost of $42.66 per share.
As of March 31, 2014, total assets were $10.6 billion, shareholders’ equity was $3.8 billion and the Company’s debt to total capital ratio was 16.1%.
In the first quarter of 2014, HCC changed the presentation of certain lines of business within its existing segment reporting structure to further enhance the transparency of the Company’s segment results. The reclassifications did not impact the individual segment results. All prior data has been recast to be comparative with the 2014 presentation.
For further information about HCC’s 2014 first quarter earnings results, see the supplemental financial schedules that are available in the Investor Relations section of the Company’s website at http://ir.hcc.com.
HCC will hold an open conference call beginning at 8:00 a.m. Central Daylight Time on Wednesday, April 30. To participate, the number for domestic calls is (800) 374-0290 and the number for international calls is (706) 634-0161. There will also be a live webcast available on a listen-only basis that can be accessed through the Investor Relations section of the Company’s website at http://ir.hcc.com. The webcast replay will be archived in the Investor Relations section of the HCC website through Friday, August 1, 2014.
Headquartered in Houston, Texas, HCC Insurance Holdings, Inc. is a leading specialty insurer with offices in the United States, the United Kingdom, Spain and Ireland. HCC’s major domestic and international insurance companies have financial strength ratings of “AA (Very Strong)” from Standard & Poor’s Corporation, “A+ (Superior)” from A.M. Best Company, Inc., “AA (Very Strong)” from Fitch Ratings, and “A1 (Good Security)” from Moody’s Investors Service, Inc.
For more information about HCC, please visit http://www.hcc.com.
a) Non-GAAP Financial Measure
Annualized operating return on equity is a non-GAAP financial measure under Regulation G and is calculated as net earnings excluding after-tax net realized investment gain/loss, other-than-temporary impairment credit losses, and foreign currency benefit/expense (collectively, operating earnings) divided by average shareholders’ equity excluding accumulated other comprehensive income. To annualize a quarterly rate, the result is multiplied by four. See the supplemental financial schedules for a reconciliation of this non-GAAP financial measure to corresponding GAAP amounts. Management believes annualized operating return on equity is a useful measure for understanding the Company’s profitability relative to shareholders’
equity before consideration of investment-related gains/losses and foreign currency benefit/expense, both of which management excludes when evaluating operating results internally.
Contact: | Doug Busker, Director of Investor Relations |
| HCC Insurance Holdings, Inc. |
| Telephone: (713) 996-1192 |
Forward-looking statements contained in this press release are made under “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995 and involve a number of risks and uncertainties. The types of risks and uncertainties which may affect the Company are set forth in its periodic reports filed with the Securities and Exchange Commission.
* * * * *
HCC Insurance Holdings, Inc. and Subsidiaries
Financial Highlights
(Unaudited, in thousands except per share data)
|
| Three months ended |
| ||||
|
| March 31, |
| ||||
|
| 2014 |
| 2013 |
| ||
|
|
|
|
|
| ||
Gross written premium |
| $ | 746,722 |
| $ | 720,205 |
|
|
|
|
|
|
| ||
Net written premium |
| 590,182 |
| 579,184 |
| ||
|
|
|
|
|
| ||
Net earned premium |
| 562,612 |
| 561,186 |
| ||
|
|
|
|
|
| ||
Net investment income |
| 56,806 |
| 55,765 |
| ||
|
|
|
|
|
| ||
Total revenue |
| 648,930 |
| 634,366 |
| ||
|
|
|
|
|
| ||
Net earnings |
| 107,911 |
| 105,850 |
| ||
|
|
|
|
|
| ||
Operating earnings* |
| 97,293 |
| 93,139 |
| ||
|
|
|
|
|
| ||
Earnings per share (diluted) |
| $ | 1.07 |
| $ | 1.05 |
|
|
|
|
|
|
| ||
Weighted-average shares outstanding |
| 98,913 |
| 99,287 |
| ||
|
|
|
|
|
| ||
Net loss ratio |
| 57.2 | % | 59.3 | % | ||
|
|
|
|
|
| ||
Expense ratio |
| 25.8 | % | 24.5 | % | ||
|
|
|
|
|
| ||
Combined ratio |
| 83.0 | % | 83.8 | % | ||
|
|
|
|
|
| ||
Paid loss ratio |
| 63.1 | % | 53.4 | % | ||
|
| March 31, |
| December 31, |
| ||
|
| 2014 |
| 2013 |
| ||
|
|
|
|
|
| ||
Total investments |
| $ | 6,949,415 |
| $ | 6,718,692 |
|
|
|
|
|
|
| ||
Total assets |
| 10,649,784 |
| 10,344,520 |
| ||
|
|
|
|
|
| ||
Shareholders’ equity |
| 3,782,113 |
| 3,674,430 | �� | ||
|
|
|
|
|
| ||
Debt to total capital ratio |
| 16.1 | % | 15.1 | % | ||
|
|
|
|
|
| ||
Book value per share |
| $ | 37.79 |
| $ | 36.62 |
|
* Non-GAAP financial measure under Regulation G. See calculation on S - 9. Management believes operating earnings is a useful measure for understanding the Company’s profitability before consideration of investment-related gains/losses and foreign currency benefit/expense, both of which management excludes when evaluating operating results internally.
HCC Insurance Holdings, Inc. and Subsidiaries
Consolidated Balance Sheets
(Unaudited, in thousands)
|
| March 31, |
| December 31, |
| ||
|
| 2014 |
| 2013 |
| ||
ASSETS |
|
|
|
|
| ||
|
|
|
|
|
| ||
Investments |
|
|
|
|
| ||
Fixed maturity securities — available for sale, at fair value |
| $ | 6,095,626 |
| $ | 6,022,473 |
|
Equity securities — available for sale, at fair value |
| 426,089 |
| 517,466 |
| ||
Short-term investments |
| 427,700 |
| 178,753 |
| ||
|
|
|
|
|
| ||
Total investments |
| 6,949,415 |
| 6,718,692 |
| ||
Cash |
| 72,524 |
| 58,301 |
| ||
Restricted cash and securities |
| 122,950 |
| 125,777 |
| ||
Premium, claims and other receivables |
| 630,844 |
| 580,107 |
| ||
Reinsurance recoverables |
| 1,221,444 |
| 1,277,257 |
| ||
Ceded unearned premium |
| 311,372 |
| 305,438 |
| ||
Ceded life and annuity benefits |
| 55,599 |
| 56,491 |
| ||
Deferred policy acquisition costs |
| 210,356 |
| 201,698 |
| ||
Goodwill |
| 895,501 |
| 895,200 |
| ||
Other assets |
| 179,779 |
| 125,559 |
| ||
|
|
|
|
|
| ||
Total assets |
| $ | 10,649,784 |
| $ | 10,344,520 |
|
|
|
|
|
|
| ||
LIABILITIES |
|
|
|
|
| ||
|
|
|
|
|
| ||
Loss and loss adjustment expense payable |
| $ | 3,847,417 |
| $ | 3,902,132 |
|
Life and annuity policy benefits |
| 55,599 |
| 56,491 |
| ||
Reinsurance, premium and claims payable |
| 400,681 |
| 332,985 |
| ||
Unearned premium |
| 1,167,308 |
| 1,134,849 |
| ||
Deferred ceding commissions |
| 92,460 |
| 89,528 |
| ||
Notes payable |
| 724,136 |
| 654,098 |
| ||
Accounts payable and accrued liabilities |
| 580,070 |
| 500,007 |
| ||
|
|
|
|
|
| ||
Total liabilities |
| 6,867,671 |
| 6,670,090 |
| ||
|
|
|
|
|
| ||
SHAREHOLDERS’ EQUITY |
|
|
|
|
| ||
|
|
|
|
|
| ||
Common stock |
| 126,062 |
| 125,577 |
| ||
Additional paid-in capital |
| 1,082,735 |
| 1,073,105 |
| ||
Retained earnings |
| 3,170,912 |
| 3,085,501 |
| ||
Accumulated other comprehensive income |
| 162,221 |
| 118,651 |
| ||
Treasury stock |
| (759,817 | ) | (728,404 | ) | ||
|
|
|
|
|
| ||
Total shareholders’ equity |
| 3,782,113 |
| 3,674,430 |
| ||
|
|
|
|
|
| ||
Total liabilities and shareholders’ equity |
| $ | 10,649,784 |
| $ | 10,344,520 |
|
HCC Insurance Holdings, Inc. and Subsidiaries
Consolidated Statements of Earnings
(Unaudited, in thousands except per share data)
|
| Three months ended |
| ||||
|
| March 31, |
| ||||
|
| 2014 |
| 2013 |
| ||
|
|
|
|
|
| ||
REVENUE |
|
|
|
|
| ||
|
|
|
|
|
| ||
Net earned premium |
| $ | 562,612 |
| $ | 561,186 |
|
Net investment income |
| 56,806 |
| 55,765 |
| ||
Other operating income |
| 9,266 |
| 8,845 |
| ||
Net realized investment gain |
| 20,246 |
| 8,570 |
| ||
|
|
|
|
|
| ||
Total revenue |
| 648,930 |
| 634,366 |
| ||
|
|
|
|
|
| ||
EXPENSE |
|
|
|
|
| ||
|
|
|
|
|
| ||
Loss and loss adjustment expense, net |
| 321,844 |
| 332,697 |
| ||
Policy acquisition costs, net |
| 69,041 |
| 66,949 |
| ||
Other operating expense |
| 95,954 |
| 76,853 |
| ||
Interest expense |
| 7,119 |
| 6,471 |
| ||
|
|
|
|
|
| ||
Total expense |
| 493,958 |
| 482,970 |
| ||
|
|
|
|
|
| ||
Earnings before income tax expense |
| 154,972 |
| 151,396 |
| ||
Income tax expense |
| 47,061 |
| 45,546 |
| ||
|
|
|
|
|
| ||
Net earnings |
| $ | 107,911 |
| $ | 105,850 |
|
|
|
|
|
|
| ||
Net earnings attributable to unvested stock |
| (1,692 | ) | (1,782 | ) | ||
|
|
|
|
|
| ||
Net earnings available to common stock |
| $ | 106,219 |
| $ | 104,068 |
|
|
|
|
|
|
| ||
Basic earnings per share data: |
|
|
|
|
| ||
Net earnings per share |
| $ | 1.08 |
| $ | 1.05 |
|
|
|
|
|
|
| ||
Weighted-average shares outstanding |
| 98,662 |
| 99,056 |
| ||
|
|
|
|
|
| ||
Diluted earnings per share data: |
|
|
|
|
| ||
Net earnings per share |
| $ | 1.07 |
| $ | 1.05 |
|
|
|
|
|
|
| ||
Weighted-average shares outstanding |
| 98,913 |
| 99,287 |
| ||
|
|
|
|
|
| ||
Cash dividends declared, per share |
| $ | 0.225 |
| $ | 0.165 |
|
HCC Insurance Holdings, Inc. and Subsidiaries
Gross Written Premium
(Unaudited, in thousands)
|
| Three months ended March 31, |
| ||||||
|
| 2014 |
| 2013 |
| Change |
| ||
|
|
|
|
|
|
|
| ||
U.S. Property & Casualty |
|
|
|
|
|
|
| ||
Aviation |
| $ | 32,447 |
| $ | 36,998 |
| (12 | )% |
Liability |
| 43,472 |
| 37,093 |
| 17 |
| ||
Sports & Entertainment |
| 42,142 |
| 34,435 |
| 22 |
| ||
Public Risk |
| 20,723 |
| 21,441 |
| (3 | ) | ||
Other |
| 34,223 |
| 45,170 |
| (24 | ) | ||
|
| 173,007 |
| 175,137 |
| (1 | ) | ||
|
|
|
|
|
|
|
| ||
Professional Liability |
| 105,428 |
| 104,019 |
| 1 |
| ||
|
|
|
|
|
|
|
| ||
Accident & Health |
|
|
|
|
|
|
| ||
Medical Stop-loss |
| 215,398 |
| 202,808 |
| 6 |
| ||
Other |
| 20,519 |
| 12,753 |
| 61 |
| ||
|
| 235,917 |
| 215,561 |
| 9 |
| ||
U.S. Surety & Credit |
|
|
|
|
|
|
| ||
Surety |
| 37,202 |
| 37,696 |
| (1 | ) | ||
Credit |
| 13,850 |
| 14,553 |
| (5 | ) | ||
|
| 51,052 |
| 52,249 |
| (2 | ) | ||
International |
|
|
|
|
|
|
| ||
Marine & Energy |
| 37,748 |
| 34,622 |
| 9 |
| ||
Property Treaty |
| 67,992 |
| 72,345 |
| (6 | ) | ||
Surety & Credit |
| 26,357 |
| 21,166 |
| 25 |
| ||
Liability |
| 22,691 |
| 18,133 |
| 25 |
| ||
Other |
| 26,239 |
| 21,541 |
| 22 |
| ||
|
| 181,027 |
| 167,807 |
| 8 |
| ||
|
|
|
|
|
|
|
| ||
Exited Lines |
| 291 |
| 5,432 |
| nm |
| ||
|
|
|
|
|
|
|
| ||
Totals |
| $ | 746,722 |
| $ | 720,205 |
| 4 | % |
nm - Not meaningful
HCC Insurance Holdings, Inc. and Subsidiaries
Net Written Premium
(Unaudited, in thousands)
|
| Three months ended March 31, |
| ||||||
|
| 2014 |
| 2013 |
| Change |
| ||
|
|
|
|
|
|
|
| ||
U.S. Property & Casualty |
|
|
|
|
|
|
| ||
Aviation |
| $ | 25,323 |
| $ | 28,614 |
| (12 | )% |
Liability |
| 31,095 |
| 27,244 |
| 14 |
| ||
Sports & Entertainment |
| 7,065 |
| 5,773 |
| 22 |
| ||
Public Risk |
| 10,888 |
| 15,771 |
| (31 | ) | ||
Other |
| 15,637 |
| 26,480 |
| (41 | ) | ||
|
| 90,008 |
| 103,882 |
| (13 | ) | ||
|
|
|
|
|
|
|
| ||
Professional Liability |
| 69,601 |
| 67,626 |
| 3 |
| ||
|
|
|
|
|
|
|
| ||
Accident & Health |
|
|
|
|
|
|
| ||
Medical Stop-loss |
| 214,232 |
| 202,594 |
| 6 |
| ||
Other |
| 20,519 |
| 12,674 |
| 62 |
| ||
|
| 234,751 |
| 215,268 |
| 9 |
| ||
U.S. Surety & Credit |
|
|
|
|
|
|
| ||
Surety |
| 32,816 |
| 33,690 |
| (3 | ) | ||
Credit |
| 11,265 |
| 11,814 |
| (5 | ) | ||
|
| 44,081 |
| 45,504 |
| (3 | ) | ||
International |
|
|
|
|
|
|
| ||
Marine & Energy |
| 24,885 |
| 21,473 |
| 16 |
| ||
Property Treaty |
| 60,538 |
| 66,167 |
| (9 | ) | ||
Surety & Credit |
| 23,047 |
| 18,649 |
| 24 |
| ||
Liability |
| 21,144 |
| 16,570 |
| 28 |
| ||
Other |
| 21,836 |
| 18,613 |
| 17 |
| ||
|
| 151,450 |
| 141,472 |
| 7 |
| ||
|
|
|
|
|
|
|
| ||
Exited Lines |
| 291 |
| 5,432 |
| nm |
| ||
|
|
|
|
|
|
|
| ||
Totals |
| $ | 590,182 |
| $ | 579,184 |
| 2 | % |
nm - Not meaningful
HCC Insurance Holdings, Inc. and Subsidiaries
Net Earned Premium
(Unaudited, in thousands)
|
| Three months ended March 31, |
| ||||||
|
| 2014 |
| 2013 |
| Change |
| ||
|
|
|
|
|
|
|
| ||
U.S. Property & Casualty |
|
|
|
|
|
|
| ||
Aviation |
| $ | 26,759 |
| $ | 27,857 |
| (4 | )% |
Liability |
| 26,638 |
| 23,950 |
| 11 |
| ||
Sports & Entertainment |
| 8,137 |
| 6,312 |
| 29 |
| ||
Public Risk |
| 13,034 |
| 16,360 |
| (20 | ) | ||
Other |
| 22,484 |
| 19,052 |
| 18 |
| ||
|
| 97,052 |
| 93,531 |
| 4 |
| ||
|
|
|
|
|
|
|
| ||
Professional Liability |
| 85,450 |
| 92,779 |
| (8 | ) | ||
|
|
|
|
|
|
|
| ||
Accident & Health |
|
|
|
|
|
|
| ||
Medical Stop-loss |
| 214,230 |
| 202,594 |
| 6 |
| ||
Other |
| 17,913 |
| 14,531 |
| 23 |
| ||
|
| 232,143 |
| 217,125 |
| 7 |
| ||
U.S. Surety & Credit |
|
|
|
|
|
|
| ||
Surety |
| 34,845 |
| 35,607 |
| (2 | ) | ||
Credit |
| 12,098 |
| 11,570 |
| 5 |
| ||
|
| 46,943 |
| 47,177 |
| — |
| ||
International |
|
|
|
|
|
|
| ||
Marine & Energy |
| 21,847 |
| 25,708 |
| (15 | ) | ||
Property Treaty |
| 24,765 |
| 28,755 |
| (14 | ) | ||
Surety & Credit |
| 19,936 |
| 18,213 |
| 9 |
| ||
Liability |
| 19,136 |
| 17,175 |
| 11 |
| ||
Other |
| 15,049 |
| 15,291 |
| (2 | ) | ||
|
| 100,733 |
| 105,142 |
| (4 | ) | ||
|
|
|
|
|
|
|
| ||
Exited Lines |
| 291 |
| 5,432 |
| nm |
| ||
|
|
|
|
|
|
|
| ||
Totals |
| $ | 562,612 |
| $ | 561,186 |
| — | % |
nm - Not meaningful
HCC Insurance Holdings, Inc. and Subsidiaries
Net Investment Income and Unrealized Gain
(Unaudited, in thousands)
|
| Three months ended |
| ||||
|
| March 31, |
| ||||
|
| 2014 |
| 2013 |
| ||
|
|
|
|
|
| ||
Sources of net investment income: |
|
|
|
|
| ||
|
|
|
|
|
| ||
Fixed maturity securities |
|
|
|
|
| ||
Taxable |
| $ | 23,260 |
| $ | 25,960 |
|
Exempt from U.S. income taxes |
| 28,583 |
| 27,889 |
| ||
Total fixed maturity securities |
| 51,843 |
| 53,849 |
| ||
Equity securities |
| 6,637 |
| 3,580 |
| ||
Other |
| 431 |
| (35 | ) | ||
Total investment income |
| 58,911 |
| 57,394 |
| ||
Investment expense |
| (2,105 | ) | (1,629 | ) | ||
|
|
|
|
|
| ||
Net investment income |
| $ | 56,806 |
| $ | 55,765 |
|
|
|
|
|
|
| ||
Unrealized gain on available for sale securities: |
|
|
|
|
| ||
|
|
|
|
|
| ||
Increase (decrease) in unrealized gain for period, before tax |
| $ | 65,834 |
| $ | (38,965 | ) |
|
|
|
|
|
| ||
Unrealized gain at: |
|
|
|
|
| ||
|
|
|
|
|
| ||
March 31, 2014 |
| $ | 219,898 |
|
|
| |
|
|
|
|
|
| ||
December 31, 2013 |
| $ | 154,064 |
|
|
| |
HCC Insurance Holdings, Inc. and Subsidiaries
Underwriting Ratios
(Unaudited)
|
| Three months ended |
| ||
|
| March 31, |
| ||
|
| 2014 |
| 2013 |
|
U.S. Property & Casualty |
|
|
|
|
|
Aviation |
| 60.0 | % | 61.7 | % |
Liability |
| 60.0 |
| 63.2 |
|
Sports & Entertainment |
| 47.7 |
| 49.3 |
|
Public Risk |
| 58.7 |
| 78.2 |
|
Other |
| 13.7 |
| 20.6 |
|
Loss Ratio |
| 48.1 |
| 55.8 |
|
Expense Ratio |
| 28.3 |
| 27.1 |
|
Combined Ratio |
| 76.4 | % | 82.9 | % |
|
|
|
|
|
|
Professional Liability |
|
|
|
|
|
Loss Ratio |
| 59.8 | % | 60.8 | % |
Expense Ratio |
| 20.0 |
| 19.2 |
|
Combined Ratio |
| 79.8 | % | 80.0 | % |
|
|
|
|
|
|
Accident & Health |
|
|
|
|
|
Medical Stop-loss |
| 74.9 | % | 75.2 | % |
Other |
| 48.1 |
| 56.3 |
|
Loss Ratio |
| 72.8 |
| 73.9 |
|
Expense Ratio |
| 15.6 |
| 14.3 |
|
Combined Ratio |
| 88.4 | % | 88.2 | % |
|
|
|
|
|
|
U.S. Surety & Credit |
|
|
|
|
|
Surety |
| 25.1 | % | 25.0 | % |
Credit |
| 41.0 |
| 37.4 |
|
Loss Ratio |
| 29.2 |
| 28.0 |
|
Expense Ratio |
| 54.9 |
| 55.4 |
|
Combined Ratio |
| 84.1 | % | 83.4 | % |
|
|
|
|
|
|
International |
|
|
|
|
|
Marine & Energy |
| 47.8 | % | 49.6 | % |
Property Treaty |
| 20.9 |
| 24.3 |
|
Surety & Credit |
| 48.6 |
| 63.5 |
|
Liability |
| 51.3 |
| 49.9 |
|
Other |
| 43.1 |
| 39.5 |
|
Loss Ratio |
| 41.3 |
| 43.7 |
|
Expense Ratio |
| 38.0 |
| 33.7 |
|
Combined Ratio |
| 79.3 | % | 77.4 | % |
|
|
|
|
|
|
Consolidated |
|
|
|
|
|
Loss Ratio |
| 57.2 | % | 59.3 | % |
Expense Ratio |
| 25.8 |
| 24.5 |
|
Combined Ratio |
| 83.0 | % | 83.8 | % |
HCC Insurance Holdings, Inc. and Subsidiaries
Reconciliation of Non-GAAP Financial Measures to GAAP
(Unaudited, in thousands)
|
| Three months ended |
| ||||
|
| March 31, |
| ||||
|
| 2014 |
| 2013 |
| ||
|
|
|
|
|
| ||
Numerator: |
|
|
|
|
| ||
|
|
|
|
|
| ||
GAAP net earnings |
| $ | 107,911 |
| $ | 105,850 |
|
|
|
|
|
|
| ||
Exclude: |
|
|
|
|
| ||
Net realized investment gain* |
| 13,160 |
| 5,571 |
| ||
Foreign currency benefit (expense)* |
| (2,542 | ) | 7,140 |
| ||
Total items excluded from operating earnings |
| 10,618 |
| 12,711 |
| ||
|
|
|
|
|
| ||
Operating earnings |
| $ | 97,293 |
| $ | 93,139 |
|
|
|
|
|
|
| ||
Denominator: |
|
|
|
|
| ||
|
|
|
|
|
| ||
GAAP equity - beginning of period |
| $ | 3,674,430 |
| $ | 3,542,612 |
|
|
|
|
|
|
| ||
Exclude - Accumulated other comprehensive income |
| 118,651 |
| 295,271 |
| ||
|
|
|
|
|
| ||
Beginning equity, as adjusted |
| $ | 3,555,779 |
| $ | 3,247,341 |
|
|
|
|
|
|
| ||
GAAP equity - end of period |
| $ | 3,782,113 |
| $ | 3,585,249 |
|
|
|
|
|
|
| ||
Exclude - Accumulated other comprehensive income |
| 162,221 |
| 268,100 |
| ||
|
|
|
|
|
| ||
Ending equity, as adjusted |
| $ | 3,619,892 |
| $ | 3,317,149 |
|
|
|
|
|
|
| ||
Average equity, as adjusted |
| $ | 3,587,836 |
| $ | 3,282,245 |
|
|
|
|
|
|
| ||
Annualized operating return on equity |
| 10.8 | % | 11.4 | % | ||
* Net of tax, calculated using 35% statutory tax rate.