Old Republic Reports Second Quarter and First Half Results Supported by Continued Strength of General Insurance Lines
July 28, 2006
CHICAGO,-- Old Republic International Corporation (NYSE: ORI), announced the following results for the second quarter and first half of 2006:
Financial Highlights (unaudited; amounts in millions except per share data and percentages; all per share amounts are shown on a diluted basis and have been restated retroactively to reflect the 25% stock dividend issued in December 2005)
|Six Months Ended
|Net Operating Income||$121.3||$163.9*||-26.0%||$233.8||$273.0*||-14.4%|
|Diluted Earnings Per Share:|
|Net operating income:|
|Before non-recurring tax benefit||$0.5||$0.51||2.0%||$1.01||$0.98||3.1%|
|2005 non-recurring tax benefit||- 0.20||- 0.20|
|Net realizedinvestment gains||0.02||0.03||0.04||.06|
Second quarter and first half 2006 earnings were constrained by the accelerated recognition of stock option expenses of $4.1 million ($2.6 million after tax or one cent per diluted share). The additional charge stems from second quarter option grants to employees who meet certain age and service criteria, typically long-term employees who are ages 57 or older. Under the recently issued Statement of Financial Accounting Standards No. 123R, "Share- Based Payment", the values attributed to such options must be expensed immediately. On the other hand, second quarter and first half 2005 earnings were enhanced by the posting of a non-recurring recovery of income taxes and related accumulated interest of $57.9 million ($45.9 million net of tax, or 20 cents per diluted share). The recovery stemmed from a favorable resolution of the Company's claim for a permanent Federal income tax refund applicable to the three years ended December 31, 1990.
Source: Old Republic International Corporation
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