Exhibit 99
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News Release dated August 15, 2003,
containing financial results
of The Progressive Corporation
for the month of July 2003
NEWS
[PROGRESSIVE LOGO] RELEASE
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The Progressive Corporation COMPANY CONTACT:
6300 Wilson Mills Road Jeffrey W. Basch
Mayfield Village, Ohio 44143 (440) 446-2851
http://www.progressive.com
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FOR IMMEDIATE RELEASE
MAYFIELD VILLAGE, OHIO -- August 15, 2003 -- The Progressive Corporation today
reported the following for July 2003:
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(millions) 2003 2002 Change
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Net premiums written $1,212.1 $969.0 25%
Net premiums earned 1,110.0 872.0 27%
Net income 141.9 83.4 70%
Per share .64 .38 68%
Combined ratio 85.9 89.6 3.7 pts.
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See the "Income Statement" for further information.
In July 2003, the Company received notice from the Internal Revenue Service
that the Joint Committee of Taxation of Congress had completed its review of a
Federal income tax settlement agreed to by the Internal Revenue Service,
primarily attributable to the amount of loss reserves deductible for tax
purposes. As a result, the Company will receive an income tax refund of
approximately $58 million, which the Company had previously recorded as a
deferred tax asset (i.e. no impact on results of operations). In addition, the
Company will receive interest, which is currently estimated at $30.4 million, or
$.09 per share, and is reflected as "Other income."
Progressive's Personal Lines business units write insurance for private
passenger automobiles and recreation vehicles. Progressive's Commercial Auto
business unit writes primary liability, physical damage and other auto-related
insurance for automobiles and trucks owned by small businesses. The Company's
other businesses principally include writing lenders' collateral protection and
directors' and officers' liability insurance. See "Supplemental Information" for
July's results.
Since this is the first time the Company has provided monthly net income
and share repurchase information, an Income Statement of the Trailing 12-months
is provided for reference.
The Progressive group of insurance companies ranks third in the nation for
auto insurance, offering its products by phone at 1-800-PROGRESSIVE, online at
progressive.com and through more than 30,000 independent agencies. The
Progressive Corporation, the holding company, is publicly traded at NYSE:PGR.
THE PROGRESSIVE CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL INFORMATION
JULY 31, 2003
($ in millions)(unaudited)
CURRENT MONTH
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DESCRIPTION PERSONAL LINES COMMERCIAL
------------------------------------ AUTO OTHER COMPANYWIDE
AGENT DIRECT TOTAL BUSINESS BUSINESSES TOTAL
----------- ----------- ------------ ---------- ---------- -----------
Net Premiums Written $739.2 $333.5 $1,072.7 $132.3 $7.1 $1,212.1
% Growth in NPW 23% 26% 24% 32% 29% 25%
Premiums Earned $679.7 $303.3 $983.0 $120.0 $7.0 $1,110.0
% Growth in Premiums Earned 25% 31% 27% 36% (14)% 27%
Loss/LAE Ratio 68.2 64.4 67.0 62.0 64.7 66.4
Expense Ratio 18.7 20.1 19.2 20.5 42.2 19.5
Combined Ratio 86.9 84.5 86.2 82.5 106.9 85.9
Actuarial Adjustments(a) -
Reserve Decrease/(Increase) $2.2 $2.5 $4.7 -- -- $4.7
YEAR-TO-DATE
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DESCRIPTION PERSONAL LINES COMMERCIAL
------------------------------------ AUTO OTHER COMPANYWIDE
AGENT DIRECT TOTAL BUSINESS BUSINESSES TOTAL
----------- ----------- ------------ ---------- ---------- -----------
Net Premiums Written $4,325.4 $1,928.2 $6,253.6 $816.3 $44.3 $7,114.2
% Growth in NPW 27% 32% 28% 38% (28)% 29%
Premiums Earned $3,985.3 $1,766.1 $5,751.4 $688.3 $43.5 $6,483.2
% Growth in Premiums Earned 28% 34% 30% 45% (33)% 30%
Loss/LAE Ratio 68.7 67.5 68.4 63.2 57.4 67.7
Expense Ratio 19.3 20.1 19.5 19.9 42.2 19.8
Combined Ratio 88.0 87.6 87.9 83.1 99.6 87.5
Actuarial Adjustments(a) -
Reserve Decrease/(Increase) $(1.4) $.4 $(1.0) $(10.5) $.9 $(10.6)
July July
POLICIES IN FORCE 2003 2002 Change
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(in thousands)
Agent - Auto 3,849 3,167 22%
Direct - Auto 1,763 1,416 25%
Other Personal Lines(b) 1,939 1,608 21%
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Total Personal Lines 7,551 6,191 22%
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Commercial Auto Business 343 267 28%
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(a) Represents adjustments based solely on the Company's corporate actuarial
review.
(b) Includes insurance for motorcycles, recreation vehicles, mobile homes,
watercraft, snowmobiles, homeowners and similar items.
THE PROGRESSIVE CORPORATION AND SUBSIDIARIES
INCOME STATEMENT
JULY 31, 2003
(millions - except per share amounts)
(unaudited)
Current Year-to
Month Date
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Direct premiums written $1,237.6 $7,278.5
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Net premiums written $1,212.1 $7,114.2
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Revenues:
Premiums earned $1,110.0 $6,483.2
Recurring investment income(1) 35.8 264.3
Net realized gains (losses) on securities (2.2) 17.8
Service revenues 4.0 23.3
Other income(2) 30.4 30.4
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Total revenues 1,178.0 6,819.0
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Expenses:
Losses and loss adjustment expenses 737.5 4,391.3
Underwriting expenses 215.8 1,278.8
Investment expenses 1.0 6.6
Service expenses 2.1 14.8
Interest expense 8.0 55.8
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Total expenses 964.4 5,747.3
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Income before income taxes 213.6 1,071.7
Provision for income taxes 71.7 352.0
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Net income $ 141.9 $ 719.7
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COMPUTATION OF EARNINGS PER SHARE
Basic:
Average shares outstanding 217.4 217.7
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Per share $ .65 $ 3.31
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Diluted:
Average shares outstanding 217.4 217.7
Net effect of dilutive stock options 3.7 3.7
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Total equivalent shares 221.1 221.4
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Per share $ .64 $ 3.25
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(1) The following table sets forth the total return for the periods ended July
31, 2003:
Current Year-to
Month Date
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Fully taxable equivalent total return:
Fixed income securities (2.1)% 1.9%
Common stocks 2.0 % 13.8%
Total portfolio (1.5)% 3.6%
(2) Amount represents the estimated interest earned through July on the income
tax refund the Company will receive.
THE PROGRESSIVE CORPORATION AND SUBSIDIARIES
BALANCE SHEET AND OTHER INFORMATION
(millions- except per share amounts)
(unaudited)
JULY 31, 2003
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CONDENSED GAAP BALANCE SHEETS:(1)
Investments -
Available-for-sale:
Fixed maturities, at market (amortized cost: $7,535.5) $7,655.2
Equity securities, at market
Preferred stocks (cost: $785.4) 809.2
Common equities (cost: $1,591.9) 1,750.8
Short-term investments, at amortized cost (market: $1,965.1) 1,965.1
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Total investments 12,180.3
Net premiums receivable 2,099.1
Deferred acquisition costs 429.2
Other assets 1,116.8
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Total assets $15,825.4
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Unearned premiums $3,955.3
Loss and loss adjustment expense reserves 4,234.9
Other liabilities(2) 1,792.8
Debt 1,489.4
Shareholders' equity 4,353.0
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Total liabilities and shareholders' equity $15,825.4
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Common Shares outstanding 217.0
Shares repurchased - July .5
Average cost per share $66.37
Book value per share $20.06
Return on average shareholders' equity 27.2%
(1) Pursuant to SFAS 113, "Accounting and Reporting for Reinsurance of
Short-Duration and Long-Duration Contracts," loss and loss adjustment
expense reserves are stated gross of reinsurance recoverables on unpaid
losses of $204.9 million at July 31, 2003.
(2) Amounts include net unsettled security acquisitions of $599.8 million at
July 31, 2003, including repurchase commitment transactions.
THE PROGRESSIVE CORPORATION AND SUBSIDIARIES
INCOME STATEMENT
TRAILING 12-MONTHS
(millions - except per share amounts)
(unaudited)
2002 2003
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JUL AUG SEP OCT NOV DEC JAN FEB MAR APR MAY JUN
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Direct premiums written $989.1 $790.1 $756.2 $ 989.0 $ 726.8 $743.1 $1,015.5 $958.4 $965.7 $1,223.8 $934.4 $943.1
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Net premiums written $969.0 $773.8 $742.5 $ 967.7 $ 711.2 $725.6 $ 992.5 $942.7 $944.1 $1,191.0 $910.9 $920.9
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Revenues:
Premiums earned $872.0 $712.2 732.3 $ 935.0 $ 762.4 $766.1 $ 967.4 $805.8 $825.1 $1,045.7 $853.9 $875.3
Recurring investment income 37.2 40.4 39.0 37.0 37.9 38.6 37.2 38.0 40.8 34.6 36.9 41.0
Net realized gains (losses)
on securities 2.2 4.2 (30.1) 32.7 23.4 (93.2) 8.7 20.1 (31.9) 8.4 11.7 3.0
Service revenues 3.5 2.8 2.9 3.2 2.6 2.7 3.5 2.5 2.8 3.8 3.4 3.3
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Total revenues 914.9 759.6 744.1 1,007.9 826.3 714.2 1,016.8 866.4 836.8 1,092.5 905.9 922.6
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Expenses:
Losses and loss adjustment
expenses 607.5 517.0 529.1 649.6 568.8 550.4 649.4 560.1 524.0 723.5 584.6 612.2
Underwriting expenses 173.3 153.5 148.2 205.4 165.1 159.8 189.8 163.2 166.9 199.8 169.3 174.0
Investment expenses 1.0 .9 .9 1.5 1.1 .8 1.3 1.4 .6 .5 .9 .9
Service expenses 2.1 2.0 1.8 2.0 1.9 1.7 2.1 2.0 1.8 2.6 2.1 2.1
Interest expense 5.6 6.0 6.0 6.0 6.7 8.1 8.0 8.0 8.1 8.1 8.0 7.6
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Total expenses 789.5 679.4 686.0 864.5 743.6 720.8 850.6 734.7 701.4 934.5 764.9 796.8
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Income before income taxes 125.4 80.2 58.1 143.4 82.7 (6.6) 166.2 131.7 135.4 158.0 141.0 125.8
Provision for income taxes 42.0 25.4 17.8 47.9 26.0 (6.6) 55.5 42.7 43.6 52.6 45.8 40.1
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Net income $ 83.4 $ 54.8 $ 40.3 $ 95.5 $ 56.7 $ -- $ 110.7 $ 89.0 $ 91.8 $ 105.4 $ 95.2 $ 85.7
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Computation of Earnings per
Share:
Basic:
Average shares outstanding 218.2 217.6 217.7 217.8 217.9 217.9 217.8 218.3 217.7 217.5 217.5 217.6
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Per share(1) $ .38 $.25 $.19 $.44 $.26 $ -- $.51 $.41 $.42 $.48 $.44 $.39
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Diluted:
Average shares outstanding 218.2 217.6 217.7 217.8 217.9 217.9 217.8 218.3 217.7 217.5 217.5 217.6
Net effect of dilutive
stock options 4.0 3.9 4.0 4.0 4.1 3.8 3.5 3.2 3.5 3.8 3.8 3.9
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Total equivalent shares 222.2 221.5 221.7 221.8 222.0 221.7 221.3 221.5 221.2 221.3 221.3 221.5
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Per share(1) $.38 $.25 $.18 $.43 $.26 $ -- $.50 $.40 $.42 $.48 $.43 $.39
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Common Shares Outstanding 217.5 217.7 217.7 217.8 217.9 217.9 217.6 217.7 217.0 217.4 217.6 217.4
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Shares Repurchased
(actual) 914,818 -- -- -- -- 4,476 400,000 696,355 735,500 836,000 206,000 300,000
Average cost per share $48.89 -- -- -- -- $50.25 $52.23 $50.68 $58.82 $67.83 $69.66 $74.57
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(1) The sum of the individual months may not equal the amount previously
reported for the quarter because the average equivalent shares differ in
the periods.
Note: To align with the financial market results, recurring investment income,
net realized gains (losses) on securities and interest expense are computed on a
calendar month basis versus the 5-4-4 week month convention used for operating
results.