Exhibit 99.2
Erie Indemnity Company
Statements of Operations
(dollars in thousands, except per share data)
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
(Unaudited) | (Unaudited) | |||||||||||||||
Operating revenue | ||||||||||||||||
Management fee revenue - policy issuance and renewal services, net | $ | 451,361 | $ | 435,214 | $ | 1,311,911 | $ | 1,268,591 | ||||||||
Management fee revenue - administrative services, net | 13,521 | — | 39,894 | — | ||||||||||||
Administrative services reimbursement revenue | 140,172 | — | 432,642 | — | ||||||||||||
Service agreement revenue | 7,072 | 7,278 | 21,297 | 21,781 | ||||||||||||
Total operating revenue | 612,126 | 442,492 | 1,805,744 | 1,290,372 | ||||||||||||
Operating expenses | ||||||||||||||||
Cost of operations - policy issuance and renewal services | 375,259 | 361,253 | 1,103,517 | 1,058,745 | ||||||||||||
Cost of operations - administrative services | 140,172 | — | 432,642 | — | ||||||||||||
Total operating expenses | 515,431 | 361,253 | 1,536,159 | 1,058,745 | ||||||||||||
Operating income | 96,695 | 81,239 | 269,585 | 231,627 | ||||||||||||
Investment income | ||||||||||||||||
Net investment income | 7,659 | 5,982 | 21,583 | 18,202 | ||||||||||||
Net realized investment gains (losses) | 0 | 899 | (497 | ) | 1,539 | |||||||||||
Net impairment losses recognized in earnings | 0 | 0 | (646 | ) | (182 | ) | ||||||||||
Equity in earnings of limited partnerships | 772 | 1,537 | 361 | 1,899 | ||||||||||||
Total investment income | 8,431 | 8,418 | 20,801 | 21,458 | ||||||||||||
Interest expense, net | 709 | 377 | 1,864 | 800 | ||||||||||||
Other income (expense) | 54 | (415 | ) | 156 | (1,231 | ) | ||||||||||
Income before income taxes | 104,471 | 88,865 | 288,678 | 251,054 | ||||||||||||
Income tax expense | 24,025 | 30,322 | 62,768 | 86,108 | ||||||||||||
Net income | $ | 80,446 | $ | 58,543 | $ | 225,910 | $ | 164,946 | ||||||||
Net income per share | ||||||||||||||||
Class A common stock – basic | $ | 1.73 | $ | 1.26 | $ | 4.85 | $ | 3.54 | ||||||||
Class A common stock – diluted | $ | 1.54 | $ | 1.12 | $ | 4.32 | $ | 3.15 | ||||||||
Class B common stock – basic | $ | 259 | $ | 189 | $ | 728 | $ | 531 | ||||||||
Class B common stock – diluted | $ | 259 | $ | 189 | $ | 727 | $ | 531 | ||||||||
Weighted average shares outstanding – Basic | ||||||||||||||||
Class A common stock | 46,188,941 | 46,188,949 | 46,188,522 | 46,186,109 | ||||||||||||
Class B common stock | 2,542 | 2,542 | 2,542 | 2,542 | ||||||||||||
Weighted average shares outstanding – Diluted | ||||||||||||||||
Class A common stock | 52,317,438 | 52,316,876 | 52,313,642 | 52,342,450 | ||||||||||||
Class B common stock | 2,542 | 2,542 | 2,542 | 2,542 | ||||||||||||
Dividends declared per share | ||||||||||||||||
Class A common stock | $ | 0.8400 | $ | 0.7825 | $ | 2.5200 | $ | 2.3475 | ||||||||
Class B common stock | $ | 126.000 | $ | 117.375 | $ | 378.000 | $ | 352.125 |
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Erie Indemnity Company
Statements of Financial Position
(in thousands)
September 30, 2018 | December 31, 2017 | |||||||
(Unaudited) | ||||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 244,688 | $ | 215,721 | ||||
Available-for-sale securities | 105,031 | 71,190 | ||||||
Receivables from Erie Insurance Exchange and affiliates | 463,620 | 418,328 | ||||||
Prepaid expenses and other current assets | 44,014 | 34,890 | ||||||
Federal income taxes recoverable | 0 | 29,900 | ||||||
Note receivable from Erie Family Life Insurance Company | 25,000 | 25,000 | ||||||
Accrued investment income | 6,504 | 6,853 | ||||||
Total current assets | 888,857 | 801,882 | ||||||
Available-for-sale securities | 599,164 | 687,523 | ||||||
Equity securities | 12,511 | — | ||||||
Limited partnership investments | 37,088 | 45,122 | ||||||
Fixed assets, net | 121,684 | 83,149 | ||||||
Deferred income taxes, net | 37,660 | 19,390 | ||||||
Other assets | 62,539 | 28,793 | ||||||
Total assets | $ | 1,759,503 | $ | 1,665,859 | ||||
Liabilities and shareholders' equity | ||||||||
Current liabilities: | ||||||||
Commissions payable | $ | 257,015 | $ | 228,124 | ||||
Agent bonuses | 79,308 | 122,528 | ||||||
Accounts payable and accrued liabilities | 113,204 | 104,533 | ||||||
Dividends payable | 39,119 | 39,116 | ||||||
Contract liability | 34,086 | — | ||||||
Deferred executive compensation | 11,071 | 15,605 | ||||||
Federal income taxes payable | 9,310 | 0 | ||||||
Current portion of long-term borrowings | 1,395 | 0 | ||||||
Total current liabilities | 544,508 | 509,906 | ||||||
Defined benefit pension plans | 154,736 | 207,530 | ||||||
Employee benefit obligations | 69 | 423 | ||||||
Contract liability | 17,903 | — | ||||||
Deferred executive compensation | 13,104 | 14,452 | ||||||
Long-term borrowings | 98,332 | 74,728 | ||||||
Other long-term liabilities | 9,828 | 1,476 | ||||||
Total liabilities | 838,480 | 808,515 | ||||||
Shareholders’ equity | 921,023 | 857,344 | ||||||
Total liabilities and shareholders’ equity | $ | 1,759,503 | $ | 1,665,859 |
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