-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, RkTq2yTVnkUvT3fBCj1cCNM1u5ufLDbesjElZnguzhMmw0TTTqRRX4slFne+poaE W8h49QpvyhofthaqFoH7Cg== 0000073952-05-000028.txt : 20050428 0000073952-05-000028.hdr.sgml : 20050428 20050428092245 ACCESSION NUMBER: 0000073952-05-000028 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20050331 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20050428 DATE AS OF CHANGE: 20050428 FILER: COMPANY DATA: COMPANY CONFORMED NAME: OHIO CASUALTY CORP CENTRAL INDEX KEY: 0000073952 STANDARD INDUSTRIAL CLASSIFICATION: FIRE, MARINE & CASUALTY INSURANCE [6331] IRS NUMBER: 310783294 STATE OF INCORPORATION: OH FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-05544 FILM NUMBER: 05778417 BUSINESS ADDRESS: STREET 1: 9450 SEWARD ROAD CITY: FAIRFIELD STATE: OH ZIP: 45014 BUSINESS PHONE: 5136032400 MAIL ADDRESS: STREET 1: 9450 SEWARD ROAD CITY: FAIRFIELD STATE: OH ZIP: 45014 8-K 1 f8k4-27.txt OHIO CASUALTY CORP FORM 8-K ITEMS 2.02 AND 9.01 1Q EARNINGS RESULTS ============================================================================== UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934 Date of Report (Date of earliest event reported) April 27, 2005 -------------- OHIO CASUALTY CORPORATION (Exact name of registrant as specified in its charter) OHIO 0-5544 31-0783294 (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification No.) 9450 Seward Road, Fairfield, Ohio 45014 (Address of principal executive offices) (Zip Code) (513) 603-2400 (Registrant's telephone number, including area code) Not Applicable (Former name or former address, if changed since last report) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule l4a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Page 1 of 3 ============================================================================== ITEM 2.02. Results of Operations and Financial Condition - --------- (a) On April 27, 2005, Ohio Casualty Corporation (the "Corporation") issued a press release announcing its earnings for the first quarter ended March 31, 2005. The Corporation also issued on April 27, 2005 certain Supplemental Financial Information with respect to its earnings for the first quarter ended March 31, 2005. The press release and the Supplemental Financial Information were posted on the Corporation's website at http://www.ocas.com and are attached hereto as Exhibits 99.1 and 99.2, respectively, and hereby incorporated by reference. ITEM 9.01. Financial Statements and Exhibits. - --------- (c) Exhibits Exhibit No. Description ---------- ----------- 99.1 Press release dated April 27, 2005 issued by Ohio Casualty Corporation and posted on the Corporation's website at http://www.ocas.com. 99.2 Supplemental Financial Information issued by Ohio Casualty Corporation on April 27, 2005 and posted on the Corporation's website at http://www.ocas.com. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. OHIO CASUALTY CORPORATION ------------------------- (Registrant) April 28, 2005 /s/David L. Santez --------------------------- David L. Santez, Assistant Vice President, Associate General Counsel and Assistant Secretary Page 2 of 3 Exhibit Index ------------- Current Report on Form 8-K Dated April 27, 2005 Exhibit No. Description - ---------- ----------- 99.1 Press release dated April 27, 2005 issued by Ohio Casualty Corporation and posted on the Corporation's website at http://www.ocas.com. 99.2 Supplemental Financial Information issued by Ohio Casualty Corporation on April 27, 2005 and posted on the Corporation's website at http://www.ocas.com. Page 3 of 3 EX-99 2 exh99-1.txt EXH 99.1 - APRIL 27, 2005 PRESS RELEASE 1Q EARNINGS RESULTS Exhibit 99.1 Analyst contact: Dennis E. McDaniel Vice President, Investor Relations 513-603-2197 dennis.mcdaniel@ocas.com Media contact: Cindy L. Denney Assistant Vice President, Corporate Communications 513-603-2074 (ofc.), 513-703-7372 (cell) cindy.denney@ocas.com For Immediate Release OHIO CASUALTY CORPORATION REPORTS NET INCOME UP 96% FOR FIRST QUARTER FAIRFIELD, OHIO, April 27, 2005 --- Ohio Casualty Corporation (NASDAQ:OCAS) today announced the following results for its first quarter ended March 31, 2005, compared with the same period of the prior year: - Net income of $37.7 million, or $0.55 per diluted share, versus $19.2 million, or $0.31 per diluted share; - All Lines combined ratio (GAAP) of 95.6%, an 8.2 point improvement; and - Operating income (A) of $37.7 million versus $18.4 million, a $19.3 million or 104.9% increase. President and Chief Executive Officer Dan Carmichael commented, "I am very pleased with our financial results, which are significantly better than the same period last year. Overall this reflects our strong commitment to disciplined underwriting and pricing even as competition increases. Our operating income more than doubled and our combined ratio improved by more than 8.0 points. On the other hand, competition makes the hunt for profitable growth opportunities more challenging. As a result, our net written premiums decreased 1.5% in the quarter. We are devoting substantially more attention in 2005 to identify new markets that our research indicates we can serve and grow profitably. The improved earnings were driven by a 7.5 point improvement in our underwriting expense ratio. Nearly half of that improvement, or 3.7 points, relates to changes in the accrual of a surplus guarantee for business sold to Proformance in 2001. For all of 2004, we accrued $15.6 million toward this surplus guarantee, of which $9.0 million was recorded in the first quarter of 2004. At the end of last year, the amount accrued was $8.8 million which was reduced late in the first quarter by $4.4 million as a result of new information received from Proformance subsequent to the Corporation filing its Annual Report on Form 10-K for the year ended December 31, 2004. The first quarter expense ratio improvement also demonstrated the benefits of our Cost Structure Efficiency initiative, which began in 2003 and is continuing. Processing efficiencies developed under the initiative led to the elimination of 322 staff positions in the first quarter of 2004, and nearly 500 positions for all of 2004. Approximately 1.9 points of the ratio improvement came from personnel and professional cost savings primarily related to the initiative. The loss and loss adjustment expense ratio also showed a slight improvement for the quarter, a result of favorable frequency trends and $3.8 million of favorable reserve development. Catastrophe losses decreased slightly to $2.5 million from $3.0 million in the first quarter a year ago. I remain impressed by the commitment and support we continue to receive from our agents and employees and very appreciative of the job they're doing to produce our improved underwriting results." The major components of net income are summarized in the table below:
Three Months Summary Income Statement Ended March 31, ($ in millions, except share data) 2005 2004 - ---------------------------------- ---- ---- Premiums and finance charges earned $362.3 $361.1 Investment income less expenses 48.4 50.5 Investment gains realized, net - 3.7 -------------------- Total revenues 410.7 415.3 Losses and benefits for policyholders 191.1 195.2 Loss adjustment expenses 42.9 41.3 Underwriting expenses 112.2 138.5 Corporate and other expenses 14.8 10.4 -------------------- Total expenses 361.0 385.4 Income tax expense: On investment gains realized - 1.3 On all other income 12.0 7.8 -------------------- Total income tax expense 12.0 9.1 Cumulative effect of an accounting change - (1.6) -------------------- Net income $37.7 $19.2 ==================== Average shares outstanding - diluted 71,675,055 62,143,049 Net income, per share - diluted $0.55 $0.31
In connection with the adoption of Emerging Issues Task Force ("EITF") Consensus 04-8 "The Effect of Contingently Convertible Debt on Diluted Earnings per Share" in the fourth quarter 2004, the Company is required to restate the average shares outstanding-diluted and net income per share- diluted for the three months ended March 31, 2004. However, since the impact of the restatement for this period would have been anti-dilutive, no restatement was made. Consolidated before-tax net investment income for the first quarter 2005 decreased $2.1 million over the same period in 2004. This decline in before- tax investment income is primarily the result of our decision in 2004 to significantly increase our investment in tax exempt securities. On an after-tax basis, net investment income increased $1.5 million as a result of this change in investment strategy. This investment strategy results in the Corporation's before-tax investment income declining when compared to prior periods when the strategy was to invest in taxable securities. As a result, the Corporation's effective tax rate on investment income is lower when compared to prior periods. Investment income continues to be impacted by reinvestment yields that are below our average portfolio yields, somewhat offset by the growth in our investment portfolio, as the insurance operations continue to generate positive cash flows. For a more detailed discussion of the financial condition and the results of operations at March 31, 2005 and for the three months then ended, please see the Quarterly Report on Form 10-Q for this period, filed with the Securities and Exchange Commission (SEC). Supplemental financial information for the first quarter 2005, including certain financial measures, is available on Ohio Casualty Corporation's website at www.ocas.com and was also filed on Form 8-K with the SEC. A discussion of the differences between statutory accounting principles and accounting principles generally accepted in the United States is included in Item 15 of the Corporation's Form 10-K for the year ended December 31, 2004. Investors are advised to read the safe harbor statement at the end of this release. Conference Call The Corporation will conduct a teleconference call to discuss information included in this news release and related matters at 9:00 a.m. EDT on Thursday, April 28, 2005. The call is being webcast by Vcall and can be accessed at Ohio Casualty Corporation's website at www.ocas.com. The webcast is also being distributed over PrecisionIR's Investor Distribution network to both institutional and individual investors. Investors can listen to the call through PrecisionIR's webcast site at www.vcall.com or by visiting any of the investor sites in PrecisionIR's Investor Network. The webcast will be available for replay through July 28, 2005. To listen to call playback by telephone, dial 1-800-252-6030, then enter ID code 39971274. Call playback begins at 5 p.m. EDT on April 28, 2005 and extends through midnight on April 30, 2005. Quiet Period The Corporation observes a quiet period and will not comment on financial results or expectations during quiet periods. The quiet period for the second quarter will start July 1, 2005 extending through the time of the earnings conference call scheduled for July 27, 2005. Corporate Profile Ohio Casualty Corporation is the holding company of The Ohio Casualty Insurance Company, which is one of six property-casualty subsidiary companies that make up Ohio Casualty Group. The Ohio Casualty Insurance Company was founded in 1919 and is licensed in 49 states. Ohio Casualty Group is ranked 48th among U.S. property/casualty insurance groups based on net premiums written (Best's Review, July 2004). The Group's member companies write auto, home and business insurance. Ohio Casualty Corporation trades on the NASDAQ Stock Market under the symbol OCAS and had assets of approximately $5.8 billion as of March 31, 2005. Safe Harbor Statement Ohio Casualty Corporation publishes forward-looking statements relating to such matters as anticipated financial performance, business prospects and plans, regulatory developments and similar matters. The statements contained in this news release that are not historical information, are forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995. The operations, performance and development of the Corporation's business are subject to risks and uncertainties, which may cause actual results to differ materially from those contained in or supported by the forward-looking statements in this release. The risks and uncertainties that may affect the operations, performance, development and results of the Corporation's business include the following: changes in property and casualty reserves; catastrophe losses; premium and investment growth; product pricing environment; availability of credit; changes in government regulation; performance of financial markets; fluctuations in interest rates; availability and pricing of reinsurance; litigation and administrative proceedings; rating agency actions; acts of war and terrorist activities; ability to appoint and/or retain agents; ability to achieve targeted expense savings; ability to achieve premium targets and profitability goals; and general economic and market conditions. Ohio Casualty Corporation undertakes no obligation to publicly release any revisions to the forward-looking statements contained in this release, or to update them to reflect events or circumstances occurring after the date of this release, or to reflect the occurrence of unanticipated events. Investors are also advised to consult any further disclosures made on related subjects in the Company's reports filed with the Securities and Exchange Commission or in subsequent press releases. (A) Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures Reconciliation of Net Income to Operating Income Management of the Corporation believes the significant volatility of realized investment gains and losses limits the usefulness of net income as a measure of current operating performance. Accordingly, management uses the non-GAAP financial measure of operating income to further evaluate current operating performance. Operating income, both in dollar amounts and per share amounts, are reconciled to net income and net income per share in the table below:
Three Months Ended March 31 ($ in millions) 2005 2004 - --------------- ---- ---- Operating income $37.7 $18.4 After-tax net realized gains - 2.4 Cumulative effect of accounting change - (1.6) ------ ------ Net income $37.7 $19.2 Operating income per share - diluted $0.55 $0.30 After-tax net realized gains per share - diluted - 0.04 Cumulative effect of accounting change per share - diluted - (0.03) ----- ------ Net income per share - diluted $0.55 $0.31
As mentioned previously, in connection with the adoption of EITF 04-8 in the fourth quarter 2004, the Company is required to restate per share amounts for the three months ended March 31, 2004. However, since the impact of the restatement for this period would have been anti-dilutive, these amounts were not restated. Reconciliation of Net Income Return on Equity to Operating Income Return on Equity Operating income return on equity is a ratio management calculates using non- GAAP financial measures. It is calculated by dividing the annualized consolidated operating income (see calculation below) for the most recent quarter by the adjusted average shareholders' equity for the quarter using a simple average of beginning and ending balances for the quarter, excluding from equity after-tax unrealized investment gains and losses. This ratio provides management with an additional measure to evaluate the results excluding the unrealized changes in the valuation of the investment portfolio that can fluctuate between periods. The following table reconciles operating income return on equity to net income return on equity, the most directly comparable GAAP measure:
Three Months Ended March 31 ($ in millions) 2005 2004 - --------------- ---- ---- Net income $ 37.7 $ 19.2 Average shareholders' equity 1,293.3 1,190.3 Return on equity based on annualized net income 11.7% 6.5% ===== ===== Operating income $ 37.7 $ 18.4 Adjusted average shareholders' equity 1,030.0 883.6 Return on equity based on annualized operating income 14.6% 8.4% ===== ===== Average shareholders' equity $1,293.3 $1,190.3 Average unrealized gains 263.3 306.7 -------- -------- Adjusted average shareholders' equity $1,030.0 $ 883.6 ======== ========
EX-99 3 exh99-2.txt EXH 99.2 - 1Q SUPPLEMENTAL FINANCIAL INFORMATION Exhibit 99.2 OHIO CASUALTY CORPORATION SUPPLEMENTAL FINANCIAL INFORMATION FOR THE PERIOD ENDING MARCH 31, 2005 Contents: Page 1 GAAP Income Statement Data Page 2 GAAP P&C Data Page 3 Consolidated Balance Sheet Data and Related Information Page 4 Supplemental Information Ohio Casualty Corporation publishes forward-looking statements relating to such matters as anticipated financial performance, business prospects and plans, regulatory developments and similar matters. The statements contained in this release that are not historical information, are forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995. The operations, performance and development of the Corporation's business are subject to risks and uncertainties, which may cause actual results to differ materially from those contained in or supported by the forward-looking statements in this release. The risks and uncertainties that may affect the operations, performance, development and results of the Corporation's business include the following: changes in property and casualty reserves; catastrophe losses; premium and investment growth; product pricing environment; availability of credit, changes in government regulation; performance of financial markets; fluctuations in interest rates; availability and pricing of reinsurance; litigation and administrative proceedings; rating agency actions; acts of war and terrorist activities; ability to appoint and/or retain agents; ability to achieve targeted expense savings; ability to achieve premium targets and profitability goals; and general economic and market conditions. Ohio Casualty Corporation undertakes no obligation to publicly release any revisions to the forward-looking statements contained in this release, or to update them to reflect events or circumstances occurring after the date of this release, or to reflect the occurrence of unanticipated events. Investors are also advised to consult any further disclosures made on related subjects in the Corporation's reports filed with the Securities and Exchange Commission or in subsequent releases. OHIO CASUALTY CORPORATION SUMMARY INCOME STATEMENT - GAAP BASIS, unless otherwise noted (in thousands, except per share data) FIRST QUARTER, 2005 (Data Unaudited)
Three Months Ended March 31, ---------------------------------------------- CONSOLIDATED 2005 2004 - ---------------------------------------- ---------------------------------------------- Premiums and finance charges earned $ 362,302 $ 361,166 Investment income less expenses 48,456 50,476 Investment gains/(losses) realized, net (6) 3,657 ----------- ----------- Total revenues 410,752 415,299 Losses 191,125 195,181 Loss adjustment expenses 42,968 41,272 Underwriting expenses 112,142 138,563 Corporate and other expenses 14,779 10,392 ----------- ----------- Total expenses 361,014 385,408 Income before income taxes 49,738 29,891 Income tax expense: On investment gains/(losses) realized (2) 1,280 On all other income 12,053 7,729 ----------- ----------- Total income tax expense 12,051 9,009 Cumulative effect of an accounting change - (1,648) ----------- ----------- Net income $ 37,687 $ 19,234 ============ ============ Average shares outstanding - diluted* 71,675 62,143 Net income, per share - diluted* $ 0.55 $ 0.31 Operating income** $ 37,691 $ 18,505 Operating income - earnings per share** $ 0.55 $ 0.30 Operating income - return on equity** 14.6% 8.4% KEY PROPERTY AND CASUALTY RATIOS GAAP Statutory GAAP Statutory - --------------------------------------- -------- --------- -------- --------- Losses 52.8% 52.8% 54.0% 54.0% Loss adjustment expenses 11.9% 11.9% 11.4% 10.6% Underwriting expenses 30.9% 30.0% 38.4% 36.1% -------- -------- --------- -------- Combined ratio 95.6% 94.7% 103.8% 100.7% Effective tax rate on investment income 26.9% 32.9% CORPORATE/OTHER - --------------------------------------- Investment income less expenses $ 3,311 $ 827 Investment gains realized, net - 600 Agent relationships asset expenses 4,395 7,214 Corporate expenses 10,384 3,178
CONSOLIDATED Year 2004 - ---------------------------------------- ----------------------- Premiums and finance charges earned $ 1,446,624 Investment income less expenses 201,244 Investment gains/(losses) realized, net 22,920 ----------- Total revenues 1,670,788 Losses 777,580 Loss adjustment expenses 158,697 Underwriting expenses 504,812 Corporate and other expenses 43,214 ----------- Total expenses 1,484,303 Income before income taxes 186,485 Income tax expense: On investment gains/(losses) realized 8,022 On all other income 48,442 ----------- Total income tax expense 56,464 Cumulative effect of an accounting change (1,648) ----------- Net income $ 128,373 ============ Average shares outstanding - diluted* 71,508 Net income, per share - diluted* $ 1.89 Operating income** $ 115,123 Operating income - earnings per share** $ 1.71 Operating income - return on equity** 12.3% KEY PROPERTY AND CASUALTY RATIOS GAAP Statutory - --------------------------------------- -------- -------- Losses 53.7% 53.8% Loss adjustment expenses 11.0% 10.7% Underwriting expenses 34.9% 33.9% -------- ------- Combined ratio 99.6% 98.4% Effective tax rate on investment income 31.5% CORPORATE/OTHER - --------------------------------------- Investment income less expenses $ 4,323 Investment gains realized, net 3,719 Agent relationships asset expenses 20,640 Corporate expenses 22,574
*Average diluted shares outstanding and net income per share amounts for the three months ended March 31, 2004 would have been restated, as required, in accordance with Emerging Issues Task Force (EITF) 04-8 "The Effect of Contingently Convertible Debt on Diluted Earnings Per Share." This EITF requires earnings per share amounts for periods prior to December 31, 2004 be restated since the issuance of the convertible notes in March 2002 using the "if-converted" method. The "if-converted" method gives effect to the add back to net income of interest expense and amortization of debt issuance costs, net of tax, associated with the convertible instruments. However, since for this period the impact would have been anti-dilutive, these amounts were not restated. **Management of the Corporation believes the significant volatility of realized investment gains and losses limits the usefulness of net income as a measure of current operating performance. Accordingly, management uses the non-GAAP financial measure of operating income to further evaluate current operating performance. Operating income return on equity is calculated by dividing the annualized consolidated operating income for the most recent quarter by the average shareholders' equity for the quarter using a simple average of beginning and ending balances for the quarter, excluding from equity after-tax unrealized investment gains and losses. See press release dated April 27, 2005 for reconciliation of operating income both in dollar amounts and per share amounts and operating income return on equity to net income, net income per share and net income return on equity, respectively. -1- OHIO CASUALTY CORPORATION PROPERTY AND CASUALTY INSURANCE DATA - GAAP BASIS (in thousands, except ratio data) FIRST QUARTER, 2005 (Data Unaudited)
THREE MONTHS ENDED MARCH 31, ------------------------------------------------ 2005 2004 OPERATING SEGMENTS and ----------------------- ----------------------- SELECTED PRODUCT LINES or Net Premiums Combined Net Premiums Combined MARKETS Earned Ratio Earmed Ratio - -------------------------- ------------ -------- ------------ -------- Commercial Lines $ 205,598 106.3% $ 197,826 102.9% Workers' compensation 33,010 148.9% 33,077 114.4% Commercial auto 57,652 84.7% 56,846 95.6% General liability 22,414 120.1% 20,983 121.1% CMP, fire and inland marine 92,522 101.2% 86,920 98.9% Specialty Lines 35,075 96.3% 41,684 90.1% Commercial umbrella 22,578 102.1% 31,036 97.1% Fidelity and surety 12,497 85.9% 10,648 69.4% Personal Lines 121,629 77.2% 121,656 110.1% Personal auto incl. personal umbrella 72,822 77.2% 74,053 123.0% Personal property 48,807 77.1% 47,603 90.1% ------------ ------ ------------ ------ Total All Lines $ 362,302 95.6% $ 361,166 103.8%
YEAR 2004 OPERATING SEGMENTS and --------------------- SELECTED PRODUCT LINES or Net Premiums Combined MARKETS Earned Ratio - -------------------------- ------------ -------- Commercial Lines $ 807,925 100.6% Workers' compensation 132,625 114.0% Commercial auto 229,629 91.1% General liability 86,563 109.9% CMP, fire and inland marine 359,108 99.5% Specialty Lines 150,262 96.7% Commercial umbrella 105,089 103.2% Fidelity and surety 45,173 81.5% Personal Lines 488,437 98.9% Personal auto incl. personal umbrella 295,774 105.9% Personal property 192,663 88.1% ------------ ------ Total All Lines $ 1,446,624 99.6%
-2- OHIO CASUALTY CORPORATION CONSOLIDATED BALANCE SHEET DATA AND RELATED INFORMATION (in thousands, except share data) FIRST QUARTER, 2005 (2005 Data Unaudited)
March 31, December 31, 2005 2004 Assets --------- ------------ Investments: U.S. government fixed maturities $ 36,677 $ 30,823 Tax exempt fixed maturities 1,115,258 1,036,697 Taxable fixed maturities: Available-for-sale, at fair value 2,224,842 2,278,588 Held-to-maturity, at amortized cost 294,234 301,367 ------------ ------------ Total fixed maturities 3,671,011 3,647,475 Equity securities, at fair value 351,940 357,458 Short-term investments, at fair value 273,076 239,105 ------------ ------------ Total investments 4,296,027 4,244,038 Cash 11,449 13,461 Premiums and other receivables, net of allowance for bad debts of $4,300 327,662 350,761 Deferred policy acquisition costs 154,176 159,849 Property and equipment, net of accumulated depreciation of $169,674 and $167,362, respectively 82,346 82,946 Reinsurance recoverable, net of allowance of $2,336 701,369 666,501 Agent relationships, net of accumulated amortization of $42,064 and $41,438, respectively 117,600 121,994 Interest and dividends due or accrued 46,659 49,859 Other assets 40,661 25,607 ------------ ------------ Total assets $ 5,777,949 $ 5,715,016 ============ ============ Shares outstanding 62,632,366 62,209,129 Book value per share $20.62 $20.82 Unrealized gain component of book value per share* $3.71 $4.47
March 31, December 31, 2005 2004 Liabilities --------- ------------ Insurance reserves: Losses $ 2,318,458 $ 2,269,565 Loss adjustment expenses 492,700 486,767 Unearned premiums 698,067 715,486 Debt 378,903 383,266 Reinsurance treaty funds held 196,073 195,015 Deferred income taxes 3,866 21,950 Other liabilities 398,229 348,024 ------------ ------------ Total liabilities 4,486,296 4,420,073 Shareholders' Equity Common stock, $.125 par value Authorized: 150,000,000 Issued shares: 72,418,344; 72,418,344 9,052 9,052 Accumulated other comprehensive income 213,462 259,131 Retained earnings 1,198,647 1,161,510 Treasury stock, at cost: (Shares: 9,785,978; 10,209,215) (129,508) (134,750) ------------ ------------ Total shareholders' equity 1,291,653 1,294,943 ------------ ------------ Total liabilities and shareholders' equity $ 5,777,949 $ 5,715,016 ============ ============ Statutory Insurance Reserves Losses $ 1,754,944 $ 1,739,709 Loss adjustment expense 445,764 444,102 Unearned premiums 645,907 649,740
*The unrealized gain component of book value per share excludes $12.0 million and $12.7 million at March 31, 2005 and December 31, 2004, respectively, which relates to the unrealized holding period gain on the transfer of fixed maturity securities from the available-for-sale classification to the held-to-maturity classification. -3- OHIO CASUALTY CORPORATION SUPPLEMENTAL INFORMATION (in thousands, except ratios and accident year data) FIRST QUARTER, 2005 (Data Unaudited)
THREE MONTHS ENDED MARCH 31, YEAR 2005 2004 2004 ---------- ---------- ---------- Net Premiums Written - -------------------- Commercial Lines $ 205,596 $ 212,218 $ 828,216 Specialty Lines 39,092 34,810 135,499 Personal Lines 113,780 117,029 490,235 ---------- ---------- ---------- Total 358,468 364,057 1,453,950 Gross Premiums Written - ---------------------- Commercial Lines $ 211,177 $ 220,419 $ 856,212 Specialty Lines 53,178 61,833 251,505 Personal Lines 114,901 118,900 496,758 ---------- ---------- ---------- Total 379,256 401,152 1,604,475 New Business Gross Premiums Written - ----------------------------------- Commercial Lines $ 36,300 $ 43,026 $ 182,291 Commercial Umbrella 8,190 13,918 49,982 Personal Lines 8,784 10,066 41,322 Average Renewal Price Increase - ------------------------------ Commercial Lines 2.0% 6.9% 5.0% Commercial Umbrella 6.8% 12.9% 8.0% Catastrophe Loss Ratio - ---------------------- Commercial Lines 0.6% 0.8% 2.4% Specialty Lines 0.0% 0.0% 0.0% Personal Lines 1.0% 1.2% 4.9% Homeowners 1.1% 2.6% 11.8% Total All Lines 0.7% 0.8% 3.0% Prior Accident Year Loss & LAE by Segment - ----------------------------------------- Commercial Lines $ 12.2 $ (6.6) $ (15.0) Specialty Lines (2.8) (3.1) (9.3) Personal Lines (13.2) 7.2 2.6 ---------- ---------- ---------- Total All Lines Accident Year Development (3.8) (2.5) (21.7) Prior Accident Year Loss & LAE - ------------------------------ Accident Year 2004 $ (9.3) $ - $ - Accident Year 2003 (10.8) (14.1) (35.1) Accident Year 2002 and Prior 16.3 11.6 13.4 ---------- ---------- ---------- Total Accident Year Development (3.8) (2.5) (21.7)
Note: For information on differences between statutory accounting principles and generally accepted accounting principles (GAAP), refer to Item 15 on page 69 of the Corporation's Form 10-K for the year ended December 31, 2004. -4- -----END PRIVACY-ENHANCED MESSAGE-----