SELECTIVE INSURANCE GROUP INC - FORM 8-K - EX-99.1 - October 30, 2009

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EX-2.1 - SELECTIVE INSURANCE GROUP INCv164221_ex2-1.htm

Exhibit 99.1
 
SELECTIVE INSURANCE GROUP, INC.
RESTATED UNAUDITED CONSOLIDATED STATEMENTS OF INCOME1
   
Quarters ended
  
($ in thousands, except per share amounts)
  
March
2009
    
June
 2009
    
September
2009
  
Revenues:
                  
Net premiums written
   $ 375,783       365,263       376,718  
Net increase in unearned premiums and prepaid reinsurance premiums
     (11,910 )     (6,952 )     (20,812 )
Net premiums earned
     363,873       358,311       355,906  
Net investment income earned
     15,717       26,368       36,585  
Net realized (losses) gains:
                        
Net realized investment (losses) gains
     3,075       1,181       (741 )
Other-than-temporary impairments
     (27,100 )     (12,534 )     (5,833 )
Other-than-temporary impairments on fixed maturity securities recognized in other comprehensive income
     -       59       1,591  
Total net realized investment losses
     (24,025 )     (11,294 )     (4,983 )
Other income
     1,281       3,810       2,667  
Total revenues
     356,846       377,195       390,175  
                         
Expenses:
                        
Losses incurred
     209,089       194,577       198,495  
Loss expenses incurred
     43,105       44,472       43,537  
Policy acquisition costs
     113,106       114,522       114,520  
Dividends to policyholders
     465       812       991  
Interest expense
     5,024       4,843       4,751  
Other expenses
     7,040       5,721       6,054  
Total expenses
     377,829       364,947       368,348  
                         
(Loss) income from continuing operations, before federal income tax
     (20,983 )     12,248       21,827  
                         
Federal income tax expense (benefit):
                        
Current
     5,875       (1,631 )     (426 )
Deferred
     (13,908 )     (1,479 )     1,647  
Total federal income tax (benefit) expense
     (8,033 )     (3,110 )     1,221  
                         
Net (loss) income from continuing operations
     (12,950 )     15,358       20,606  
                         
Income (loss) from discontinued operations
     61       383       (11,746 )
Federal income tax (benefit) expense
     (12 )     53       (4,147 )
Total income (loss) from discontinued operations, net of tax
     73       330       (7,599 )
                         
Net (loss) income
   $ (12,877 )     15,688       13,007  
                         
Earnings per share:
                        
Basic net (loss) income from continuing operations
     (0.25 )     0.29       0.39  
Basic net income (loss) from discontinued operations
     0.00       0.01       (0.14 )
Basic net (loss) income
   $ (0.25 )     0.30       0.25  
                         
Diluted net (loss) income from continuing operations
     (0.25 )     0.28       0.38  
Diluted net income (loss) discontinued operations
     0.00       0.01       (0.14 )
Diluted net (loss) income
   $ (0.25 )     0.29       0.24  
                         
Dividends to stockholders
   $ 0.13       0.13       0.13  
                         
Summary of Discontinued Operations:
                        
Other income
   $ 12,719       11,054       10,641  
Other expense
     (12,658 )     (10,671 )     (10,173 )
Goodwill impairment
     -       -       (12,214 )
Federal income tax benefit (expense)
     12       (53 )     4,147  
Income (loss) from discontinued operations
   $ 73       330       (7,599 )
 
1Amounts have been restated to reflect Selective HR Solutions Inc. as a discontinued operation for all periods presented.

 
12b
 
 
SELECTIVE INSURANCE GROUP, INC.
RESTATED UNAUDITED CONSOLIDATED STATEMENTS OF INCOME1
   
Quarters ended
  
($ in thousands, except per share amounts)
  
March
2008
    
June
 2008
    
September
 2008
    
December
2008
  
Revenues:
                        
Net premiums written
   $ 391,954       389,394       402,739       308,651  
Net (decrease) increase in unearned premiums and prepaid reinsurance premiums
     (8,567 )     (12,140 )     (28,031 )     60,187  
Net premiums earned
     383,387       377,254       374,708       368,838  
Net investment income earned
     37,866       38,515       36,134       18,517  
Net realized gains (losses):
                                
Net realized investment gains (losses)
     1,515       11,707       12,277       (21,851 )
Other-than-temporary impairments
     -       (9,784 )     (34,854 )     (8,462 )
Other-than-temporary impairments on fixed maturity securities recognized in other comprehensive income
     -       -       -       -  
Total net realized investment gains (losses)
     1,515       1,923       (22,577 )     (30,313 )
Other income
     1,161       2,163       946       (98 )
Total revenues
     423,929       419,855       389,211       356,944  
                                 
Expenses:
                                
Losses incurred
     210,130       209,915       215,095       210,516  
Loss expenses incurred
     42,946       42,889       39,453       40,600  
Policy acquisition costs
     127,677       122,966       119,825       115,234  
Dividends to policyholders
     535       1,579       1,151       1,946  
Interest expense
     5,309       5,127       5,036       5,036  
Other expenses
     11,466       2,135       7,175       6,031  
Total expenses
     398,063       384,611       387,735       379,363  
                                 
Income (loss) from continuing operations, before federal income tax
     25,866       35,244       1,476       (22,419 )
                                 
Federal income tax expense (benefit):
                                
Current
     11,060       12,828       10,252       (12,145 )
Deferred
     (5,190 )     (5,628 )     (17,016 )     1,905  
Total federal income tax expense (benefit)
     5,870       7,200       (6,764 )     (10,240 )
                                 
Net income (loss) from continuing operations
     19,996       28,044       8,240       (12,179 )
                                 
Income (loss) from discontinued operations
     736       841       1,090       (3,448 )
Federal income tax expense (benefit)
     229       (234 )     338       (1,239 )
Total income (loss) from discontinued operations, net of tax
     507       607       752       (2,209 )
                                 
Net income (loss)
   $ 20,503       28,651       8,992       (14,388 )
                                 
Earnings per share:
                                
Basic net income (loss) from continuing operations
     0.38       0.54       0.16       (0.24 )
Basic net income (loss) from discontinued operations
     0.01       0.01       0.01       (0.04 )
Basic net income
   $ 0.39       0.55       0.17       (0.28 )
                                 
Diluted net income (loss) from continuing operations
     0.37       0.53       0.16       (0.24 )
Diluted net income (loss) from discontinued operations
     0.01       0.01       0.01       (0.04 )
Diluted net income
   $ 0.38       0.54       0.17       (0.28 )
                                 
Dividends to stockholders
   $ 0.13       0.13       0.13       0.13  
                                 
                                 
Summary of Discontinued Operations:
                                
Other income
   $ 15,118       13,498       12,695       11,836  
Other expense
     (14,382 )     (12,657 )     (11,605 )     (11,284 )
Goodwill impairment
     -       -       -       (4,000 )
Federal income tax (expense) benefit
     (229 )     (234 )     (338 )     1,239  
Income (loss) from discontinued operations
   $ 507       607       752       (2,209 )
 
1Amounts have been restated to reflect Selective HR Solutions Inc. as a discontinued operation for all periods presented.

 
12c
 

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