Net Income per Diluted Share was $1.12 for the Quarter and $3.15 Year to Date
ERIE, Pa., Oct. 26, 2017 /PRNewswire/ -- Erie Indemnity Company (NASDAQ: ERIE) today announced financial results for the quarter ending September 30, 2017. Net income was $58.5 million, or $1.12 per diluted share, in the third quarter of 2017, compared to $57.4 million, or $1.09 per diluted share, in the third quarter of 2016. Net income was $164.9 million, or $3.15 per diluted share, in the first nine months of 2017, compared to $164.6 million, or $3.14 per diluted share, in the first nine months of 2016.
3Q and Nine Months 2017 |
||||||||||||||
(dollars in thousands) |
3Q'17 |
3Q'16 |
2017 |
2016 |
||||||||||
Operating income |
$ |
80,836 |
$ |
82,255 |
$ |
230,414 |
$ |
235,679 |
||||||
Investment income, net of interest expense |
8,029 |
4,326 |
20,640 |
14,289 |
||||||||||
Income before income taxes |
88,865 |
86,581 |
251,054 |
249,968 |
||||||||||
Income tax expense |
30,322 |
29,205 |
86,108 |
85,388 |
||||||||||
Net income |
$ |
58,543 |
$ |
57,376 |
$ |
164,946 |
$ |
164,580 |
||||||
Gross margin from operations |
18.3 |
% |
19.7 |
% |
17.9 |
% |
19.4 |
% |
||||||
3Q 2017 Highlights |
Operating income decreased $1.4 million, or 1.7 percent, in the third quarter of 2017 compared to the third quarter of 2016.
Income from investments before taxes and net of interest expense totaled $8.0 million in the third quarter of 2017 compared to $4.3 million in the third quarter of 2016. Earnings from limited partnerships were $1.5 million in the third quarter of 2017 compared to losses of $1.7 million in the third quarter of 2016.
Nine Months 2017 Highlights |
Operating income decreased $5.3 million, or 2.2 percent, in the first nine months of 2017 compared to the first nine months of 2016.
Income from investments before taxes and net of interest expense totaled $20.6 million in the first nine months of 2017 compared to $14.3 million in the first nine months of 2016. Net investment income was $18.2 million in the first nine months of 2017 compared to $14.9 million in the first nine months of 2016, while earnings from limited partnerships were $1.9 million in the first nine months of 2017 compared to losses of $0.3 million in the first nine months of 2016.
Webcast Information
Indemnity has scheduled a conference call and live audio broadcast on the Web for 10:00 AM ET on October 27, 2017. Investors may access the live audio broadcast by logging on to http://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 website by 12:30 PM ET.
Erie Insurance Group
According to A.M. Best Company, Erie Insurance Group, based in Erie, Pennsylvania, is the 10th largest homeowners insurer and 11thlargest automobile insurer in the United States based on direct premiums written and the 15th 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 more than 5 million policies in force and operates in 12 states and the District of Columbia. Erie Insurance Group is a FORTUNE 500 company.
News releases and more information about Erie Insurance Group are available at http://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, 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:
A forward-looking statement speaks only as of the date on which it is made and reflects our analysis only as of that date. We undertake 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 |
||||||||||||||||
Statements of Operations |
||||||||||||||||
(dollars in thousands, except per share data) |
||||||||||||||||
Three months ended September 30, |
Nine months ended September 30, |
|||||||||||||||
2017 |
2016 |
2017 |
2016 |
|||||||||||||
(Unaudited) |
(Unaudited) |
|||||||||||||||
Operating revenue |
||||||||||||||||
Management fee revenue, net |
$ |
435,214 |
$ |
411,139 |
$ |
1,268,591 |
$ |
1,195,262 |
||||||||
Service agreement revenue |
7,278 |
7,267 |
21,781 |
21,756 |
||||||||||||
Total operating revenue |
442,492 |
418,406 |
1,290,372 |
1,217,018 |
||||||||||||
Operating expenses |
||||||||||||||||
Commissions |
248,677 |
232,455 |
720,538 |
676,963 |
||||||||||||
Salaries and employee benefits |
60,499 |
53,265 |
181,013 |
161,579 |
||||||||||||
All other operating expenses |
52,480 |
50,431 |
158,407 |
142,797 |
||||||||||||
Total operating expenses |
361,656 |
336,151 |
1,059,958 |
981,339 |
||||||||||||
Operating income |
80,836 |
82,255 |
230,414 |
235,679 |
||||||||||||
Investment income |
||||||||||||||||
Net investment income |
5,970 |
5,331 |
18,184 |
14,884 |
||||||||||||
Net realized investment gains |
899 |
718 |
1,539 |
29 |
||||||||||||
Net impairment losses recognized in earnings |
0 |
0 |
(182) |
(345) |
||||||||||||
Equity in earnings (losses) of limited partnerships |
1,537 |
(1,723) |
1,899 |
(279) |
||||||||||||
Total investment income |
8,406 |
4,326 |
21,440 |
14,289 |
||||||||||||
Interest expense, net |
377 |
— |
800 |
— |
||||||||||||
Income before income taxes |
88,865 |
86,581 |
251,054 |
249,968 |
||||||||||||
Income tax expense |
30,322 |
29,205 |
86,108 |
85,388 |
||||||||||||
Net income |
$ |
58,543 |
$ |
57,376 |
$ |
164,946 |
$ |
164,580 |
||||||||
Earnings Per Share |
||||||||||||||||
Net income per share |
||||||||||||||||
ClassA common stock – basic |
$ |
1.26 |
$ |
1.23 |
$ |
3.54 |
$ |
3.53 |
||||||||
ClassA common stock – diluted |
$ |
1.12 |
$ |
1.09 |
$ |
3.15 |
$ |
3.14 |
||||||||
ClassB common stock – basic |
$ |
189 |
$ |
185 |
$ |
531 |
$ |
530 |
||||||||
ClassB common stock – diluted |
$ |
189 |
$ |
185 |
$ |
531 |
$ |
529 |
||||||||
Weighted average shares outstanding – Basic |
||||||||||||||||
ClassA common stock |
46,188,949 |
46,188,980 |
46,186,109 |
46,188,971 |
||||||||||||
ClassB common stock |
2,542 |
2,542 |
2,542 |
2,542 |
||||||||||||
Weighted average shares outstanding – Diluted |
||||||||||||||||
ClassA common stock |
52,316,876 |
52,411,303 |
52,342,450 |
52,442,697 |
||||||||||||
ClassB common stock |
2,542 |
2,542 |
2,542 |
2,542 |
||||||||||||
Dividends declared per share |
||||||||||||||||
ClassA common stock |
$ |
0.7825 |
$ |
0.7300 |
$ |
2.3475 |
$ |
2.1900 |
||||||||
ClassB common stock |
$ |
117.375 |
$ |
109.500 |
$ |
352.125 |
$ |
328.500 |
Erie Indemnity Company |
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Statements of Financial Position |
||||||||
(in thousands) |
||||||||
September 30, |
December 31, |
|||||||
(Unaudited) |
||||||||
Assets |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ |
184,628 |
$ |
189,072 |
||||
Available-for-sale securities |
65,318 |
56,138 |
||||||
Receivables from Erie Insurance Exchange and affiliates |
428,500 |
378,540 |
||||||
Prepaid expenses and other current assets |
35,797 |
30,169 |
||||||
Federal income taxes recoverable |
0 |
5,260 |
||||||
Accrued investment income |
6,435 |
6,337 |
||||||
Total current assets |
720,678 |
665,516 |
||||||
Available-for-sale securities |
683,948 |
657,153 |
||||||
Limited partnership investments |
49,451 |
58,159 |
||||||
Fixed assets, net |
75,370 |
69,142 |
||||||
Deferred income taxes, net |
47,558 |
53,889 |
||||||
Note receivable from Erie Family Life Insurance Company |
25,000 |
25,000 |
||||||
Other assets |
29,424 |
20,096 |
||||||
Total assets |
$ |
1,631,429 |
$ |
1,548,955 |
||||
Liabilities and shareholders' equity |
||||||||
Current liabilities: |
||||||||
Commissions payable |
$ |
236,056 |
$ |
210,559 |
||||
Agent bonuses |
93,448 |
114,772 |
||||||
Accounts payable and accrued liabilities |
99,331 |
88,153 |
||||||
Dividends payable |
36,441 |
36,441 |
||||||
Deferred executive compensation |
12,794 |
19,675 |
||||||
Federal income taxes payable |
5,331 |
0 |
||||||
Total current liabilities |
483,401 |
469,600 |
||||||
Defined benefit pension plans |
208,528 |
221,827 |
||||||
Employee benefit obligations |
330 |
756 |
||||||
Deferred executive compensation |
12,777 |
13,233 |
||||||
Long-term borrowings |
49,734 |
24,766 |
||||||
Other long-term liabilities |
1,509 |
1,863 |
||||||
Total liabilities |
756,279 |
732,045 |
||||||
Shareholders' equity |
875,150 |
816,910 |
||||||
Total liabilities and shareholders' equity |
$ |
1,631,429 |
$ |
1,548,955 |
CONTACT: Scott Beilharz, 814-870-7312, scott.beilharz@erieinsurance.com