ERIE, Pa., Feb. 26, 2015 /PRNewswire/ -- Erie Indemnity
Company (NASDAQ: ERIE) today
announced financial results for the full year and the quarter
ending December 31, 2014. Net
income per diluted share was $3.18
for the full year 2014 compared to $3.08 for 2013. Net income per diluted
share in the fourth quarter of 2014 was $0.48 compared to $0.67 in the fourth quarter of 2013.
"ERIE continues to achieve
strong results through sound execution of our business strategy and
the steadfast commitment of our Agents, Customers and Employees,"
said Terry Cavanaugh, President and
CEO. "As we celebrate our 90th anniversary in
2015, we are well positioned for continued long-term growth and
value creation."
4Q and Total Year
2014 - Results of Indemnity Shareholder Interest
|
|
(dollars in
millions)
|
4Q'13
|
4Q'14
|
|
2013
|
|
2014
|
|
|
|
Management
operations
|
$41
|
|
$35
|
|
|
$209
|
|
$223
|
|
|
|
Investment
operations
|
13
|
|
2
|
|
|
38
|
|
28
|
|
|
|
Income before income
taxes
|
54
|
|
37
|
|
|
247
|
|
251
|
|
|
|
Provision for income
taxes
|
18
|
|
11
|
|
|
84
|
|
83
|
|
|
|
Net income
|
$36
|
|
$26
|
|
|
$163
|
|
$168
|
|
|
|
Gross margin from
management operations
|
13.2%
|
|
10.5%
|
|
|
16.1%
|
|
15.8%
|
|
|
|
Return on
equity
|
|
|
|
|
|
23.6%
|
|
23.3%
|
|
|
|
2014 Total Year
Highlights
Income from management operations before taxes increased
$14 million, or 6.5 percent, in 2014
compared to the prior year.
- Revenue from management operations increased $110 million, or 8.5 percent. Direct
written premium from the property and casualty insurance
operations, upon which the management fee is calculated, increased
8.6 percent for the year due to a 4.3 percent increase in policies
in force and a 4.2 percent increase in the year-over-year average
premium per policy at December 31, 2014.
- Commissions increased $73
million, or 10.3 percent, in 2014 compared to the prior year
primarily due to the 8.6 percent increase in direct written premium
from the property and casualty insurance operations.
Commission growth outpaced direct premium written growth primarily
due to an increase in agent incentive costs related to profitable
growth.
- Non-commission expense increased $23
million, or 6.2 percent, in 2014 compared to 2013.
Information technology costs increased $13
million, which included $6
million of professional fees, $4
million of personnel costs, and $3
million of hardware and software costs. Underwriting
and policy processing costs increased $7
million due to the increased cost of underwriting reports,
postage, and printing costs related to increased volume.
Customer service costs increased $4
million due to an increase of $2
million in credit card processing fees and $2 million in personnel costs. All other
operating costs decreased $1
million.
Income from investment operations before taxes totaled
$28 million in 2014 compared to
$38 million in the prior year.
Earnings from limited partnerships were $11
million in 2014 compared to earnings of $22 million in 2013.
In 2014, Indemnity returned $119
million to shareholders as dividends and $20 million through share repurchases of Class A
nonvoting common stock.
4Q 2014 Highlights
Income from management operations before taxes decreased
$6 million, or 13.3 percent, in the
fourth quarter of 2014 compared to the fourth quarter of 2013.
- Revenue from management operations increased $28 million, or 9.1 percent, in the fourth
quarter of 2014 compared to the fourth quarter of 2013.
- Commissions increased $24
million, or 13.3 percent, in the fourth quarter of 2014
compared to the fourth quarter of 2013 primarily due to the 9.0
percent increase in direct written premium from the property and
casualty insurance operations. Commission growth outpaced
direct premium written growth primarily due to an increase in agent
incentive costs related to profitable growth.
- Non-commission expense increased $10
million, or 11.1 percent, in the fourth quarter of 2014
compared to the fourth quarter of 2013. Administrative and
other costs increased $5 million in
the quarter, primarily due to increased costs associated with the
long term incentive plan and the Director's deferred compensation
plan. These plans include a component based on Indemnity
share price and the share price increased substantially during the
fourth quarter of 2014. Additionally, certain employee
incentive plan costs increased due to the improved underwriting
results in the quarter. Information technology costs
increased $3 million, which included
a $1 million increase in professional
fees, personnel costs and hardware and software costs. All
other operating costs increased $2
million.
Income from investment operations before taxes totaled
$2 million in the fourth quarter of
2014, compared to $13 million in the
fourth quarter of 2013. Losses from limited partnerships were
$2 million in the fourth quarter of
2014 compared to earnings of $9
million in the fourth quarter of 2013.
Webcast Information
Indemnity has scheduled a conference call and live audio
broadcast on the Web for 10:00 AM ET on February 27,
2015. Investors may access the live audio broadcast by
logging on to www.erieinsurance.com. Indemnity recommends
visiting the website at least 15 minutes prior to the Webcast to
download and install any necessary software. A Webcast audio
replay will be available on the Investor Relations page of the Erie
Insurance Group's website by 12:30 PM
ET.
About the Erie Insurance Group
According to A.M. Best Company, Erie Insurance Group, based in
Erie, Pennsylvania, is the
11th largest homeowners insurer and 12th
largest automobile insurer in the United
States based on direct premiums written and the
16th 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 nearly 5.0 million policies in force and operates in
12 states and the District of Columbia. Erie Insurance Group
is a FORTUNE 500 and Barron's 500 company. Erie Insurance is
proud to have received the J.D. Power award for "Highest in
Customer Satisfaction with the Auto Insurance Purchase Experience"
two years in a row. ERIE has
also been recognized by Forbes as one of America's 50 Most
Trustworthy Financial Companies and is on the list of Ward's 50
Group of top performing insurance companies, which analyzes the
financial performance of 3,000 property and casualty companies and
recognizes the top performers for achieving outstanding results in
safety, consistency and financial performance over a five-year
period (2009-2013).
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:
- dependence on Indemnity's relationship with the Exchange and
the management fee under the agreement with the subscribers at the
Exchange;
- costs of providing services to the Exchange under the
subscriber's agreement;
- ability to attract and retain talented management and
employees;
- ability to maintain uninterrupted business operations;
- factors affecting the quality and liquidity of Indemnity's
investment portfolio;
- credit risk from the Exchange;
- Indemnity's ability to meet liquidity needs and access capital;
and
- outcome of pending and potential litigation.
Risk factors related to the non-controlling interest owned by
the Exchange, which includes the Property and Casualty Group and
EFL:
- general business and economic conditions;
- dependence upon the independent agency system;
- ability to maintain our reputation for customer service;
- factors affecting insurance industry competition;
- changes in government regulation of the insurance
industry;
- premium rates and reserves must be established from forecasts
of ultimate costs;
- emerging claims, coverage issues in the industry, and changes
in reserve estimates related to the property and casualty
business;
- changes in reserve estimates related to the life business;
- severe weather conditions or other catastrophic losses,
including terrorism and pandemic events;
- the Exchange's ability to acquire reinsurance coverage and
collectability from reinsurers;
- factors affecting the quality and liquidity of the Exchange's
investment portfolio;
- the Exchange's ability to meet liquidity needs and access
capital;
- the Exchange's ability to maintain acceptable financial
strength ratings;
- outcome of pending and potential litigation; and
- dependence upon the service provided by Indemnity.
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.
(ERIE-F)
Erie Indemnity
Company
|
Consolidated
Statements of Operations
|
(dollars in
millions, except per share data)
|
|
|
|
|
Three months
ended
December 31,
|
|
Twelve months
ended
December 31,
|
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
Revenues
|
|
(Unaudited)
|
|
|
Premiums
earned
|
|
$
|
1,382
|
|
|
$
|
1,267
|
|
|
$
|
5,344
|
|
|
$
|
4,898
|
|
Net investment
income
|
|
111
|
|
|
106
|
|
|
446
|
|
|
422
|
|
Net realized
investment gains
|
|
89
|
|
|
270
|
|
|
193
|
|
|
771
|
|
Net impairment losses
recognized in earnings
|
|
(3)
|
|
|
(3)
|
|
|
(4)
|
|
|
(13)
|
|
Equity in earnings of
limited partnerships
|
|
2
|
|
|
49
|
|
|
113
|
|
|
161
|
|
Other
income
|
|
8
|
|
|
8
|
|
|
32
|
|
|
32
|
|
Total
revenues
|
|
1,589
|
|
|
1,697
|
|
|
6,124
|
|
|
6,271
|
|
Benefits and
expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
Insurance losses and
loss expenses
|
|
863
|
|
|
896
|
|
|
3,958
|
|
|
3,467
|
|
Policy acquisition
and underwriting expenses
|
|
349
|
|
|
331
|
|
|
1,336
|
|
|
1,237
|
|
Total benefits and
expenses
|
|
1,212
|
|
|
1,227
|
|
|
5,294
|
|
|
4,704
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from
operations before income taxes and noncontrolling
interest
|
|
377
|
|
|
470
|
|
|
830
|
|
|
1,567
|
|
Provision for income
taxes
|
|
124
|
|
|
156
|
|
|
257
|
|
|
519
|
|
Net
income
|
|
$
|
253
|
|
|
$
|
314
|
|
|
$
|
573
|
|
|
$
|
1,048
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: Net income
attributable to noncontrolling interest in consolidated entity –
Exchange
|
|
227
|
|
|
278
|
|
|
405
|
|
|
885
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to Indemnity
|
|
$
|
26
|
|
|
$
|
36
|
|
|
$
|
168
|
|
|
$
|
163
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings Per
Share
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to Indemnity per share
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A common
stock – basic
|
|
$
|
0.54
|
|
|
$
|
0.75
|
|
|
$
|
3.59
|
|
|
$
|
3.46
|
|
Class A
common stock – diluted
|
|
$
|
0.48
|
|
|
$
|
0.67
|
|
|
$
|
3.18
|
|
|
$
|
3.08
|
|
Class B common
stock – basic
|
|
$
|
81
|
|
|
$
|
113
|
|
|
$
|
539
|
|
|
$
|
520
|
|
Class B common
stock – diluted
|
|
$
|
81
|
|
|
$
|
113
|
|
|
$
|
538
|
|
|
$
|
519
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares outstanding attributable to Indemnity –
Basic
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A common
stock
|
|
46,189,068
|
|
|
46,520,232
|
|
|
46,247,876
|
|
|
46,660,651
|
|
Class B common
stock
|
|
2,542
|
|
|
2,542
|
|
|
2,542
|
|
|
2,542
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares outstanding attributable to Indemnity –
Diluted
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A common
stock
|
|
52,601,010
|
|
|
52,715,338
|
|
|
52,616,234
|
|
|
52,855,757
|
|
Class B common
stock
|
|
2,542
|
|
|
2,542
|
|
|
2,542
|
|
|
2,542
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends declared
per share
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A common
stock
|
|
$
|
0.6810
|
|
|
$
|
0.6350
|
|
|
$
|
2.5860
|
|
|
$
|
2.4125
|
|
Class B common
stock
|
|
$
|
102.1500
|
|
|
$
|
95.2500
|
|
|
$
|
387.9000
|
|
|
$
|
361.8750
|
|
Erie Indemnity
Company
|
Results of the
Erie Insurance Group's Operations by Interest
(Unaudited)
|
(in
millions)
|
|
|
|
Indemnity
shareholder interest
|
|
Noncontrolling interest
(Exchange)
|
|
Eliminations of
related
party transactions
|
|
Erie Insurance
Group
|
|
|
Three months
ended
December 31,
|
|
Three months
ended
December 31,
|
|
Three months
ended
December 31,
|
|
Three months
ended
December 31,
|
|
|
2014
|
2013
|
|
2014
|
2013
|
|
2014
|
2013
|
|
2014
|
2013
|
Management
operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Management fee
revenue, net
|
|
$
|
329
|
|
$
|
301
|
|
|
$
|
—
|
|
$
|
—
|
|
|
$
|
(329)
|
|
$
|
(301)
|
|
|
$
|
—
|
|
$
|
—
|
|
Service agreement
revenue
|
|
8
|
|
8
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
8
|
|
8
|
|
Total revenue from
management operations
|
|
337
|
|
309
|
|
|
—
|
|
—
|
|
|
(329)
|
|
(301)
|
|
|
8
|
|
8
|
|
Cost of management
operations
|
|
302
|
|
268
|
|
|
—
|
|
—
|
|
|
(302)
|
|
(268)
|
|
|
—
|
|
—
|
|
Income from
management operations before taxes
|
|
35
|
|
41
|
|
|
—
|
|
—
|
|
|
(27)
|
|
(33)
|
|
|
8
|
|
8
|
|
Property and
casualty insurance operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net premiums
earned
|
|
—
|
|
—
|
|
|
1,361
|
|
1,247
|
|
|
—
|
|
—
|
|
|
1,361
|
|
1,247
|
|
Losses and loss
expenses
|
|
—
|
|
—
|
|
|
843
|
|
870
|
|
|
(2)
|
|
(1)
|
|
|
841
|
|
869
|
|
Policy acquisition and
underwriting expenses
|
|
—
|
|
—
|
|
|
370
|
|
355
|
|
|
(31)
|
|
(36)
|
|
|
339
|
|
319
|
|
Income from
property and casualty insurance operations before
taxes
|
|
—
|
|
—
|
|
|
148
|
|
22
|
|
|
33
|
|
37
|
|
|
181
|
|
59
|
|
Life insurance
operations: (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
revenue
|
|
—
|
|
—
|
|
|
48
|
|
53
|
|
|
(1)
|
|
0
|
|
|
47
|
|
53
|
|
Total benefits and
expenses
|
|
—
|
|
—
|
|
|
32
|
|
39
|
|
|
0
|
|
0
|
|
|
32
|
|
39
|
|
Income from life
insurance operations before taxes
|
|
—
|
|
—
|
|
|
16
|
|
14
|
|
|
(1)
|
|
0
|
|
|
15
|
|
14
|
|
Investment
operations: (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment
income
|
|
4
|
|
4
|
|
|
87
|
|
82
|
|
|
(5)
|
|
(4)
|
|
|
86
|
|
82
|
|
Net realized gains on
investments
|
|
0
|
|
0
|
|
|
88
|
|
261
|
|
|
—
|
|
—
|
|
|
88
|
|
261
|
|
Net impairment losses
recognized in earnings
|
|
0
|
|
0
|
|
|
(3)
|
|
(3)
|
|
|
—
|
|
—
|
|
|
(3)
|
|
(3)
|
|
Equity in (losses)
earnings of limited partnerships
|
|
(2)
|
|
9
|
|
|
4
|
|
40
|
|
|
—
|
|
—
|
|
|
2
|
|
49
|
|
Income from
investment operations before taxes
|
|
2
|
|
13
|
|
|
176
|
|
380
|
|
|
(5)
|
|
(4)
|
|
|
173
|
|
389
|
|
Income from
operations before income taxes and noncontrolling
interest
|
|
37
|
|
54
|
|
|
340
|
|
416
|
|
|
—
|
|
—
|
|
|
377
|
|
470
|
|
Provision for income
taxes
|
|
11
|
|
18
|
|
|
113
|
|
138
|
|
|
—
|
|
—
|
|
|
124
|
|
156
|
|
Net
income
|
|
$
|
26
|
|
$
|
36
|
|
|
$
|
227
|
|
$
|
278
|
|
|
$
|
—
|
|
$
|
—
|
|
|
$
|
253
|
|
$
|
314
|
|
|
(1) Earnings on
life insurance related invested assets are integral to the
evaluation of the life insurance operations because of the long
duration of life products. On that basis, for presentation
purposes, the life insurance operations in the table above include
life insurance related investment results.
|
Erie Indemnity
Company
|
Results of the
Erie Insurance Group's Operations by Interest
|
(in
millions)
|
|
|
|
Indemnity
shareholder interest
|
|
Noncontrolling interest
(Exchange)
|
|
Eliminations of
related
party transactions
|
|
Erie Insurance
Group
|
|
|
Twelve months
ended
December 31,
|
|
Twelve months
ended
December 31,
|
|
Twelve months
ended
December 31,
|
|
Twelve months
ended
December 31,
|
|
|
2014
|
2013
|
|
2014
|
2013
|
|
2014
|
2013
|
|
2014
|
2013
|
Management
operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Management fee
revenue, net
|
|
$
|
1,376
|
|
$
|
1,266
|
|
|
$
|
—
|
|
$
|
—
|
|
|
$
|
(1,376)
|
|
$
|
(1,266)
|
|
|
$
|
—
|
|
$
|
—
|
|
Service agreement
revenue
|
|
31
|
|
31
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
31
|
|
31
|
|
Total revenue from
management operations
|
|
1,407
|
|
1,297
|
|
|
—
|
|
—
|
|
|
(1,376)
|
|
(1,266)
|
|
|
31
|
|
31
|
|
Cost of management
operations
|
|
1,184
|
|
1,088
|
|
|
—
|
|
—
|
|
|
(1,184)
|
|
(1,088)
|
|
|
—
|
|
—
|
|
Income from
management operations before taxes
|
|
223
|
|
209
|
|
|
—
|
|
—
|
|
|
(192)
|
|
(178)
|
|
|
31
|
|
31
|
|
Property and
casualty insurance operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net premiums
earned
|
|
—
|
|
—
|
|
|
5,260
|
|
4,820
|
|
|
—
|
|
—
|
|
|
5,260
|
|
4,820
|
|
Losses and loss
expenses
|
|
—
|
|
—
|
|
|
3,859
|
|
3,365
|
|
|
(6)
|
|
(5)
|
|
|
3,853
|
|
3,360
|
|
Policy acquisition and
underwriting expenses
|
|
—
|
|
—
|
|
|
1,502
|
|
1,387
|
|
|
(204)
|
|
(187)
|
|
|
1,298
|
|
1,200
|
|
(Loss) income
from property and casualty insurance operations before
taxes
|
|
—
|
|
—
|
|
|
(101)
|
|
68
|
|
|
210
|
|
192
|
|
|
109
|
|
260
|
|
Life insurance
operations: (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
revenue
|
|
—
|
|
—
|
|
|
192
|
|
192
|
|
|
(2)
|
|
(2)
|
|
|
190
|
|
190
|
|
Total benefits and
expenses
|
|
—
|
|
—
|
|
|
143
|
|
144
|
|
|
0
|
|
0
|
|
|
143
|
|
144
|
|
Income from life
insurance operations before taxes
|
|
—
|
|
—
|
|
|
49
|
|
48
|
|
|
(2)
|
|
(2)
|
|
|
47
|
|
46
|
|
Investment
operations: (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment
income
|
|
16
|
|
15
|
|
|
350
|
|
325
|
|
|
(16)
|
|
(12)
|
|
|
350
|
|
328
|
|
Net realized gains on
investments
|
|
1
|
|
1
|
|
|
183
|
|
753
|
|
|
—
|
|
—
|
|
|
184
|
|
754
|
|
Net impairment losses
recognized in earnings
|
|
0
|
|
0
|
|
|
(3)
|
|
(12)
|
|
|
—
|
|
—
|
|
|
(3)
|
|
(12)
|
|
Equity in earnings of
limited partnerships
|
|
11
|
|
22
|
|
|
101
|
|
138
|
|
|
—
|
|
—
|
|
|
112
|
|
160
|
|
Income from
investment operations before taxes
|
|
28
|
|
38
|
|
|
631
|
|
1,204
|
|
|
(16)
|
|
(12)
|
|
|
643
|
|
1,230
|
|
Income from
operations before income taxes and noncontrolling
interest
|
|
251
|
|
247
|
|
|
579
|
|
1,320
|
|
|
—
|
|
—
|
|
|
830
|
|
1,567
|
|
Provision for income
taxes
|
|
83
|
|
84
|
|
|
174
|
|
435
|
|
|
—
|
|
—
|
|
|
257
|
|
519
|
|
Net
income
|
|
$
|
168
|
|
$
|
163
|
|
|
$
|
405
|
|
$
|
885
|
|
|
$
|
—
|
|
$
|
—
|
|
|
$
|
573
|
|
$
|
1,048
|
|
|
(1) Earnings on
life insurance related invested assets are integral to the
evaluation of the life insurance operations because of the long
duration of life products. On that basis, for presentation
purposes, the life insurance operations in the table above include
life insurance related investment results.
|
Erie Indemnity Company
Reconciliation of Operating
Income to Net Income
Reconciliation of operating income to net income
We disclose operating income, a non-GAAP financial measure, to
enhance our investors' understanding of our performance related to
the Indemnity shareholder interest. Our method of calculating
this measure may differ from those used by other companies, and
therefore comparability may be limited.
Indemnity defines operating income as net income excluding
realized capital gains and losses, impairment losses and related
federal income taxes.
Indemnity uses operating income to evaluate the results of its
operations. It reveals trends that may be obscured by the net
effects of realized capital gains and losses including impairment
losses. Realized capital gains and losses, including
impairment losses, may vary significantly between periods and are
generally driven by business decisions and economic developments
such as capital market conditions which are not related to our
ongoing operations. We are aware that the price to earnings
multiple commonly used by investors as a forward-looking valuation
technique uses operating income as the denominator. Operating
income should not be considered as a substitute for net income
prepared in accordance with U.S. generally accepted accounting
principles ("GAAP") and does not reflect Indemnity's overall
profitability.
The following table reconciles operating income and net income
for the Indemnity shareholder interest:
|
|
Indemnity Shareholder
Interest
|
|
|
Three months
ended
December 31,
|
|
Twelve months
ended
December 31,
|
(in millions, except per share data)
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
|
(Unaudited)
|
|
|
Operating income
attributable to Indemnity
|
|
$
|
26
|
|
|
$
|
36
|
|
|
$
|
167
|
|
|
$
|
162
|
|
Net realized gains
and impairments on investments
|
|
0
|
|
|
0
|
|
|
1
|
|
|
1
|
|
Income tax
expense
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
Realized gains and
impairments, net of income taxes
|
|
0
|
|
|
0
|
|
|
1
|
|
|
1
|
|
Net income
attributable to Indemnity
|
|
$
|
26
|
|
|
$
|
36
|
|
|
$
|
168
|
|
|
$
|
163
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per Indemnity
Class A common share-diluted:
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
attributable to Indemnity
|
|
$
|
0.48
|
|
|
$
|
0.67
|
|
|
$
|
3.17
|
|
|
$
|
3.07
|
|
Net realized gains
and impairments on investments
|
|
0.00
|
|
|
0.00
|
|
|
0.02
|
|
|
0.01
|
|
Income tax
expense
|
|
0.00
|
|
|
0.00
|
|
|
(0.01)
|
|
|
0.00
|
|
Realized gains and
impairments, net of income taxes
|
|
0.00
|
|
|
0.00
|
|
|
0.01
|
|
|
0.01
|
|
Net income
attributable to Indemnity
|
|
$
|
0.48
|
|
|
$
|
0.67
|
|
|
$
|
3.18
|
|
|
$
|
3.08
|
|
Erie Indemnity
Company
|
Consolidated
Statements of Financial Position
|
(in
millions)
|
|
|
|
December 31,
2014
|
|
December 31,
2013
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
Investments –
Indemnity
|
|
|
|
|
|
|
Available-for-sale
securities, at fair value:
|
|
|
|
|
|
|
Fixed
maturities
|
|
$
|
564
|
|
|
$
|
526
|
|
Equity
securities
|
|
25
|
|
|
50
|
|
Limited
partnerships
|
|
113
|
|
|
146
|
|
Other invested
assets
|
|
1
|
|
|
1
|
|
Investments –
Exchange
|
|
|
|
|
|
|
Available-for-sale
securities, at fair value:
|
|
|
|
|
|
|
Fixed
maturities
|
|
9,007
|
|
|
8,162
|
|
Equity
securities
|
|
850
|
|
|
819
|
|
Trading securities,
at fair value
|
|
3,223
|
|
|
3,202
|
|
Limited
partnerships
|
|
866
|
|
|
940
|
|
Other invested
assets
|
|
20
|
|
|
20
|
|
Total
investments
|
|
14,669
|
|
|
13,866
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents (Exchange portion of $422 and $403,
respectively)
|
|
514
|
|
|
452
|
|
Premiums receivable
from policyholders – Exchange
|
|
1,281
|
|
|
1,167
|
|
Reinsurance
recoverable – Exchange
|
|
161
|
|
|
172
|
|
Deferred income taxes
– Indemnity
|
|
37
|
|
|
2
|
|
Deferred acquisition
costs – Exchange
|
|
595
|
|
|
566
|
|
Other assets
(Exchange portion of $374 and $337, respectively)
|
|
501
|
|
|
451
|
|
Total
assets
|
|
$
|
17,758
|
|
|
$
|
16,676
|
|
|
|
|
|
|
|
|
Liabilities and
shareholders' equity
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
Indemnity
liabilities
|
|
|
|
|
|
|
Other
liabilities
|
|
$
|
611
|
|
|
$
|
476
|
|
Exchange
liabilities
|
|
|
|
|
|
|
Losses and loss
expense reserves
|
|
3,853
|
|
|
3,747
|
|
Life policy and
deposit contract reserves
|
|
1,812
|
|
|
1,758
|
|
Unearned
premiums
|
|
2,834
|
|
|
2,598
|
|
Deferred income
taxes
|
|
490
|
|
|
450
|
|
Other
liabilities
|
|
175
|
|
|
97
|
|
Total
liabilities
|
|
9,775
|
|
|
9,126
|
|
|
|
|
|
|
|
|
Indemnity's
shareholders' equity
|
|
703
|
|
|
734
|
|
|
|
|
|
|
|
|
Noncontrolling
interest in consolidated entity – Exchange
|
|
7,280
|
|
|
6,816
|
|
Total
equity
|
|
7,983
|
|
|
7,550
|
|
Total liabilities,
shareholders' equity and noncontrolling interest
|
|
$
|
17,758
|
|
|
$
|
16,676
|
|
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SOURCE Erie Indemnity Company