Erie, Pa., August 2, 2011 - Erie Indemnity Company (NASDAQ: ERIE) today announced second quarter 2011 earnings of $52 million, compared to earnings of $49 million in the second quarter of 2010. Operating income was $48 million in the second quarter of 2011 compared to $51 million for the same period one year ago.
Note: The accompanying consolidated financial statements of Erie Indemnity Company ("Indemnity") reflect the consolidated results of Indemnity and the Erie Insurance Exchange ("Exchange"), which we refer to collectively as the "Erie Insurance Group."
Indemnity or Indemnity shareholder interest refers to the interest in Erie Indemnity Company owned by the Class A and Class B shareholders. The Exchange refers to the noncontrolling interest held for the interest of the subscribers (policyholders) and includes its interest in its property and casualty subsidiaries and Erie Family Life Insurance Company ("EFL").
The following table shows the consolidated results of the Erie Insurance Group by operating segment:
The following sections highlight and discuss the results of management operations, property and casualty insurance operations, life insurance operations and investment operations related to the Indemnity shareholder interest.
Six-Month 2011 Results
Net income attributable to Indemnity per share-diluted increased to $1.72 per share for the six months ended June 30, 2011 from net income per share-diluted of $1.68 per share for the six months ended June 30, 2010. The net income for 2011 and 2010 includes $0.02 and $0.21 per share, respectively, related to operations sold to the Exchange.
Operating income attributable to Indemnity per share-diluted (excluding net realized gains or losses, impairments on investments and related taxes) was $1.64 per share in the first half of 2011 compared to $1.66 in the first half of 2010. The 2011 and 2010 operating income amounts include $0.02 and $0.18 per share, respectively, related to operations sold to the Exchange.
Share Repurchase Program
In the second quarter of 2011, we repurchased 0.8 million shares of our outstanding Class A nonvoting common stock at a total cost of $54 million in conjunction with our current stock repurchase plan. For the year through July 22, 2011, shares repurchased under this program totaled 1.4 million at a total cost of $95 million. In December 2010, our Board of Directors approved a continuation of the current stock repurchase program for a total of $150 million. As of July 22, 2011, we had approximately $51 million in repurchase authority remaining under the program.
According to A.M. Best Company, Erie Insurance Group, based in Erie, Pennsylvania, is the 13th largest automobile and homeowners insurer in the United States based on direct premiums written and the 19th largest property/casualty insurer in the United States based on total lines net premium written. The Group, rated A+ (Superior) by A.M. Best Company, has over 4.3 million policies in force and operates in 11 states and the District of Columbia. Erie Insurance Group is a FORTUNE 500 company.
Erie Insurance is proud to be named a J.D. Power and Associates' 2011 Customer Service Champion and is only one of 40 companies so named in the U.S. Erie Insurance has also been recognized on the list of Ward's 50 Group of top performing insurance companies. The Ward's 50 award analyzes the financial performance of 3,000 property and casualty companies and recognizes the top performers for achieving outstanding financial results in safety and consistency over a five-year period (2006-2010).
News releases and more information about Erie Insurance Group are available at www.erieinsurance.com.
"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995:
Statements contained herein that are not historical fact are forward-looking statements and, as such, are subject to risks and uncertainties that could cause actual events and results to differ, perhaps materially, from those discussed herein. Forward-looking statements relate to future trends, events or results and include, without limitation, statements and assumptions on which such statements are based that are related to our plans, strategies, objectives, expectations, intentions and adequacy of resources. Examples of forward-looking statements are discussions relating to premium and investment income, expenses, operating results, agency relationships, and compliance with contractual and regulatory requirements. Forward-looking statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements. Among the risks and uncertainties, in addition to those set forth in our filings with the Securities and Exchange Commission, that could cause actual results and future events to differ from those set forth or contemplated in the forward-looking statements include the following:
Risk factors related to the Indemnity shareholder interest:
Risk factors related to the non-controlling interest owned by the Exchange, which includes the Property and Casualty Group and EFL:
A forward-looking statement speaks only as of the date on which it is made and reflects Indemnity's analysis only as of that date. Indemnity undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, changes in assumptions, or otherwise.
Karen Kraus Phillips, Investor Relations
1-800-458-0811 ext. 4665 or 814/870-4665