EX-99.1 2 ex991.htm EXHIBIT 99.1 EARNINGS PRESS RELEASE DATED JULY 23, 2009 ex991.htm
NEWS BULLETIN
 
For Further Information:
 
AT OLD REPUBLIC:
AT FINANCIAL RELATIONS BOARD:
A.C. Zucaro
Leslie Loyet
 
Chairman & CEO
Analysts/Investors
   
(312) 346-8100
(312) 640-6672
   
 
lloyet@mww.com
   
       
   
FOR IMMEDIATE RELEASE
NYSE:  ORI
THURSDAY, JULY 23, 2009
 
 
OLD REPUBLIC REPORTS SECOND QUARTER AND FIRST HALF 2009 RESULTS
 
 

CHICAGO – July 23, 2009 – Old Republic International Corporation (NYSE: ORI), today reported the following results for the second quarter and first half of 2009:
 
Financial Highlights
(unaudited; amounts in millions except per share data and percentages)
     
   
Quarters Ended June 30,
   
Six Months Ended June 30,
 
   
2009
 
2008
 
Change
   
2009
 
2008
 
Change
 
 
Operating Revenues
$
912.2
 
$
937.4
 
-2.7
%
   
$
1,790.7
 
$
1,888.1
 
-5.2
%
 
 
Net Operating Income (Loss)
 
(49.6)
   
(49.9)
 
0.7
       
(103.5)
   
(69.6)
 
-48.7
   
 
Net Income (Loss)
$
(15.8)
 
$
(364.7)
 
95.6
%
   
$
(69.8)
 
$
(383.8)
 
81.8
%
 
 
Diluted Earnings Per Share:
                                     
 
Net Operating Income (Loss)
$
(0.21)
 
$
(0.22)
 
4.5
%
   
$
(0.44)
 
$
(0.30)
 
-46.7
%
 
 
Net Income (Loss)
$
(0.07)
 
$
(1.58)
 
95.6
%
   
$
(0.30)
 
$
(1.66)
 
81.9
%
 
                                         
 
Cash Dividends Per Share
$
0.17
 
$
0.17
 
-
%
   
$
0.34
 
$
0.33
 
3.0
%
 
 
Ending Book Value Per Share
                   
$
15.93
 
$
17.59
 
-9.4
%
 
                             
                             
The Company’s second quarter operating results, which exclude net realized investment gains or losses, were basically flat year-over-year, while first half 2009 performance reflected a greater operating loss when compared to the same period one year ago. Second quarter operating results were enhanced mostly by lower production and operating expenses in Old Republic’s mortgage guaranty line and much stronger revenue growth in its title insurance segment. General insurance pretax earnings for both the quarter and year-to-date periods were dampened by the combination of lower earned premiums and moderately higher loss costs for certain coverages.

The net loss for the latest quarter and first half was reduced by deferred income tax credits that could not be recognized previously due to the requirements of accounting rules. The tax credits apply to losses from other than temporary investment impairments originally recorded in the second quarter of 2008.

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Old Republic International Corporation
Add 1


Consolidated Results – The major components of Old Republic’s consolidated results and other data for the periods reported upon are shown below:
 
 
Quarters Ended June 30,
 
Six Months Ended June 30,
 
2009
 
2008
 
Change
 
2009
 
2008
 
Change
Operating revenues:
                                 
General insurance
$
507.0
 
$
561.3
 
-9.7
%
 
$
1,030.8
 
$
1,142.9
 
-9.8
%
Mortgage guaranty
 
166.5
   
173.6
 
-4.1
     
337.8
   
346.1
 
-2.4
 
Title insurance
 
219.0
   
179.3
 
22.1
     
379.3
   
346.4
 
9.5
 
Corporate and other
 
19.5
   
22.9
         
42.7
   
52.5
     
Total
$
912.2
 
$
937.4
 
-2.7
%
 
$
1,790.7
 
$
1,888.1
 
-5.2
%
Pretax operating income (loss):
                                 
General insurance
$
46.4
 
$
56.3
 
-17.5
%
 
$
104.6
 
$
146.1
 
-28.4
%
Mortgage guaranty
 
(137.9)
   
(140.7)
 
2.0
     
(282.5)
   
(263.1)
 
-7.4
 
Title insurance
 
5.6
   
(4.5)
 
222.7
     
(3.4)
   
(17.2)
 
80.0
 
Corporate and other
 
(0.1)
   
1.4
         
2.4
   
6.0
     
Sub-total
 
(86.0)
   
(87.5)
 
1.7
     
(178.8)
   
(128.1)
 
-39.6
 
Realized investment gains (losses):
                                 
From sales
 
0.3
   
6.8
         
0.3
   
7.7
     
From impairments
 
-
   
(437.3)
         
-
   
(437.3)
     
Net realized investment
                                 
gains (losses)
 
0.3
   
(430.5)
         
0.3
   
(429.6)
     
Consolidated pretax income (loss)
 
(85.6)
   
(518.1)
 
83.5
     
(178.4)
   
(557.7)
 
68.0
 
Income taxes (credits)
 
(69.8)
   
(153.3)
 
54.5
     
(108.6)
   
(173.9)
 
37.5
 
Net income (loss)
$
(15.8)
 
$
(364.7)
 
95.6
%
 
$
(69.8)
 
$
(383.8)
 
81.8
%

Consolidated underwriting ratio:
                                 
Benefits and claims ratio
78.8
%
 
82.0
%
       
81.3
%
 
79.3
%
     
Expense ratio
42.3
   
39.1
         
41.0
   
39.1
       
Composite ratio
121.1
%
 
121.1
%
       
122.3
%
 
118.4
%
     

Components of diluted
                                 
earnings per share:
                                 
Net operating income (loss)
$
(0.21)
 
$
(0.22)
 
4.5
%
 
$
(0.44)
 
$
(0.30)
 
-46.7
%
Net realized investment
                                 
gains (losses)
 
0.14
   
(1.36)
         
0.14
   
(1.36)
     
Net income (loss)
$
(0.07)
 
$
(1.58)
 
95.6
%
 
$
(0.30)
 
$
(1.66)
 
81.9
%
                                   
Cash dividends paid per share
$
0.17
 
$
0.17
 
-
%
 
$
0.34
 
$
0.33
 
3.0
%
                                   
   Note: In this and all other tables and statements:  • Dollar amounts are stated in millions, except per share data.
   • Calculations of book value and earnings per share exclude certain shares owned by the Company’s Employee
   Savings and Stock Ownership Plan. Refer to Note (a) of the Notes to Accompanying Financial Summaries.

The above table shows both operating and net income to highlight the effects of realized investment gain or loss recognition and any non-recurring items on period-to-period comparisons. Operating income, however, does not replace net income computed in accordance with the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) as a measure of total profitability.

The recognition of realized investment gains or losses can be highly discretionary and arbitrary due to such factors as the timing of individual securities sales, recognition of estimated losses from write-downs for impaired securities, tax-planning considerations, and changes in investment management judgments relative to the direction of securities markets or the future prospects of individual investees or industry sectors. Likewise, non-recurring items which may emerge from time to time, can distort the comparability of the Company’s results from period to period. Accordingly, management uses net operating income, a non-ASC financial measure, to evaluate and better explain operating performance, and believes its use enhances an understanding of Old Republic’s basic business results.
 
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Old Republic International Corporation
Add 2


General Insurance Results – First half 2009 general insurance pretax operating earnings were largely affected by an approximate 11 percent reduction in premium volume and slightly higher claims and expense ratios. The following table shows these effects.

 
General Insurance Group
 
Quarters Ended June 30,
 
Six Months Ended June 30,
 
2009
 
2008
 
Change
 
2009
 
2008
 
Change
Net premiums earned
$
440.7
 
$
494.2
 
-10.8
%
 
$
898.1
 
$
1,007.0
 
-10.8
%
Net investment income
 
63.5
   
62.6
 
1.4
     
127.0
   
127.1
 
-0.1
 
Pretax operating income (loss)
$
46.4
 
$
56.3
 
-17.5
%
 
$
104.6
 
$
146.1
 
-28.4
%

Claims ratio
75.9
%
 
76.0
%
     
75.3
%
 
72.9
%
   
Expense ratio
26.8
   
24.5
       
26.2
   
24.5
     
Composite ratio
102.7
%
 
100.5
%
     
101.5
%
 
97.4
%
   


Earned premiums for a large majority of insurance coverages continued to trend lower in this year’s first half. As in the recent past, premium growth has been constrained by the combination of a moderately declining rate environment during the last three years or so and by recessionary economic conditions. These conditions affect such factors as sales and employment levels, both of which are important bases upon which premium rates are applied.

Overall claim ratios did not change measurably quarter-over-quarter, but registered a 3.3 percent rise in the claim ratio to 75.3 percent in this year’s first half. Except for the consumer credit indemnity (“CCI”) coverage which continued to reflect increases in both loss frequencies and severity due to the downturn in the housing and financial services fields, aggregate claims experience for other coverages did not exhibit significantly adverse trends. Production and general operating expenses edged down in this year’s first half but nonetheless resulted in a moderately higher ratio as the expense reduction lagged the larger drop in earned premiums.

Mortgage Guaranty Results – Mortgage guaranty operating results benefited from lower production and operating expenses, but were affected adversely by slightly higher claim ratios. Key indicators of the Mortgage Guaranty Group’s evolving performance are shown in the following table.

 
Mortgage Guaranty Group
 
Quarters Ended June 30,
 
Six Months Ended June 30,
 
2009
 
2008
 
Change
 
2009
 
2008
 
Change
Net premiums earned
$
141.5
 
$
149.1
 
-5.1
%
 
$
286.8
 
$
296.7
 
-3.3
%
Net investment income
 
22.2
   
21.4
 
3.5
     
44.6
   
42.9
 
3.8
 
Pretax operating income (loss)
$
(137.9)
 
$
(140.7)
 
2.0
%
 
$
(282.5)
 
$
(263.1)
 
-7.4
%

Claims ratio
197.7
%
 
192.5
%
     
198.8
%
 
186.9
%
   
Expense ratio
14.2
   
16.2
       
14.0
   
16.3
     
Composite ratio
211.9
%
 
208.7
%
     
212.8
%
 
203.2
%
   

The decline in earned premium in this year’s first half resulted mostly from the more selective underwriting criteria applied since late 2007, an overall decline in the industry’s business penetration, and from higher premium refunds related to claim rescissions. These factors were attenuated somewhat by rising persistency of business produced in prior years and a decline in reinsurance ceded premiums.
 
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Old Republic International Corporation
Add 3


Claim ratios were up slightly year over year in both the second quarter and first half of 2009. Greater claim rescissions and a moderate decline in claim severity offset to some extent the impact on claim reserve provisions from a continuing uptrend in outstanding delinquent cases. The effect of periodic paid losses and reserve provisions on reported mortgage guaranty incurred loss ratios is shown in the following table:

 
Quarters Ended
 
Six Months Ended
 
June 30,
 
June 30,
 
2009
 
2008
 
2009
 
2008
Incurred loss ratio from:
                     
Paid losses
111.6
%
 
60.0
%
 
109.3
%
 
57.5
%
Reserve provisions
86.1
   
132.5
   
89.5
   
129.4
 
Total
197.7
%
 
192.5
%
 
198.8
%
 
186.9
%

Mortgage guaranty production and operating expenses declined as a percentage of net premiums earned mostly due to lower personnel and certain other costs. Investment income trends benefited from a greater invested asset base.

Title Insurance Results – Old Republic’s title insurance business registered a quarterly operating gain for the first time since the second quarter of 2007. Key operating performance indicators are shown in the following table:
 
Title Insurance Group
 
Quarters Ended June 30,
 
Six Months Ended June 30,
 
2009
 
2008
 
Change
 
2009
 
2008
 
Change
Net premiums and fees earned
$
213.0
 
$
172.9
 
23.1
%
 
$
367.3
 
$
333.7
 
10.1
%
Net investment income
 
6.0
   
6.3
 
-5.2
     
11.9
   
12.8
 
-7.1
 
Pretax operating income (loss)
$
5.6
 
$
(4.5)
 
222.7
%
 
$
(3.4)
 
$
(17.2)
 
80.0
%

Claims ratio
7.6
%
 
6.8
%
     
7.2
%
 
6.9
%
   
Expense ratio
92.2
   
99.4
       
96.7
   
101.9
     
Composite ratio
99.8
%
 
106.2
%
     
103.9
%
 
108.8
%
   

Growth in net premiums and fees resulted from a surge in refinance activity and the benefit of market share gains stemming from title industry dislocations and consolidations. Claims costs rose at a quicker pace however, as the Company added moderately to reserve provisions to address recent loss emergence trends. Production and general operating expenses, while relatively lower as a percentage of premium and fees revenues, rose dollar-wise in reflection of greater personnel and other production costs related to the higher revenues attained and anticipated.

Corporate and Other Operations – The Company’s small life and health insurance business and the net costs associated with the parent holding company and internal services subsidiaries produced a much lower gain in this year’s first half. Period-to-period variations in the results of these relatively minor elements of Old Republic’s operations usually stem from the volatility inherent to the small scale of its life and health business, fluctuations in the costs of external debt, and net interest on intra-system financing arrangements. Substantially all of the year-over-year decline in earnings was due to foreign exchange adjustments for U.S. dollar conversions from the currency of Old Republic’s Canadian life and health insurance subsidiary.
 
-more-
 
 
 
 
Old Republic International Corporation
Add 4

 
Cash, Invested Assets, and Shareholders’ Equity – The following table reflects Old Republic’s consolidated cash and invested assets as well as shareholders’ equity at the dates shown:
               
% Change
   
June
 
December
 
June
 
June '09/
 
June '09/
   
2009
 
2008
 
2008
 
Dec '08
 
June '08
Cash and invested assets:  fair value basis
 
$
9,389.9
 
$
8,855.1
 
$
8,691.0
 
6.0
%
 
8.0
%
                                     :  original cost basis
 
$
9,521.9
 
$
9,210.0
 
$
9,050.6
 
3.4
%
 
5.2
%
                               
Shareholders’ equity:
                             
Total
 
$
3,753.1
 
$
3,740.3
 
$
4,058.9
 
0.3
%
 
-7.5
%
Per common share
 
$
15.93
 
$
15.91
 
$
17.59
 
0.1
%
 
-9.4
%
                               
Composition of shareholders’ equity per share:
                             
Equity before items below
 
$
15.46
 
$
16.10
 
$
17.33
 
-4.0
%
 
-10.8
%
Unrealized investment gains (losses) and other
                             
accumulated comprehensive income (loss)
   
0.47
   
(0.19)
   
0.26
           
Total
 
$
15.93
 
$
15.91
 
$
17.59
 
0.1
%
 
-9.4
%

Consolidated cash flow from operating activities amounted to $280.4 million for the first half of 2009 versus $328.8 million for the same period in 2008.

The investment portfolio reflects a current allocation of approximately 85 percent to fixed-maturity securities and 4 percent to equities. As has been the case for many years, Old Republic’s invested assets are managed in consideration of enterprise-wide risk management objectives intended to assure solid funding of its subsidiaries’ long-term obligations to insurance policyholders and other beneficiaries, as well as evaluations of their long-term effect on the stability of capital accounts. The portfolio contains little or no direct insurance risk-correlated asset exposures to real estate, mortgage-backed securities, collateralized debt obligations (“CDO’s”), derivatives, junk bonds, hybrid securities, or illiquid private equity investments. In a similar vein, the Company does not engage in hedging or securities lending transactions, nor does it invest in securities whose values are predicated on non-regulated financial instruments exhibiting amorphous or unfunded counter-party risk attributes.

Substantially all changes in the shareholders’ equity account reflect the Company’s net income or loss, dividend payments to shareholders, and changes in market valuations and impairments of invested assets during the periods shown below:
 
   
Shareholders’ Equity Per Share
   
Quarter
 
Six Months
   
Ended
 
Ended
   
June 30,
 
June 30,
   
2009
 
2009
 
2008
Beginning balance
 
$
15.47
 
$
15.91
 
$
19.71
Changes in shareholders’ equity for the periods:
                 
Net operating income (loss)
   
(0.21)
   
(0.44)
   
(0.30)
Net realized investment gains (losses):
                 
From sales
   
-
   
-
   
0.02
From impairements
   
0.14
   
0.14
   
(1.38)
Subtotal
   
0.14
   
0.14
   
(1.36)
Net unrealized investment gains (losses)
   
0.65
   
0.61
   
(0.13)
Total realized and unrealized investment gains (losses)
   
0.79
   
0.75
   
(1.49)
Cash dividends
   
(0.17)
   
(0.34)
   
(0.33)
Stock issuance, foreign exchange, and other transactions
   
0.05
   
0.05
   
-
Net change
   
0.46
   
0.02
   
(2.12)
Ending balance
 
$
15.93
 
$
15.93
 
$
17.59
 
-more-
 
 
 
 
Old Republic International Corporation
Add 5

 
Old Republic’s significant investments in the stocks of two leading publicly held mortgage guaranty (“MI”) businesses (MGIC Investment Corp. and The PMI Group) account for a substantial portion of the realized and unrealized investment losses incurred in 2008, as reflected in the above and following tables. Unrealized losses, including losses on securities categorized as other-than-temporarily impaired (“OTTI”), represent the net difference between the most recently established cost and the fair values of the investments at a point in time. The aggregate original and impaired costs, fair value, and latest reported underlying equity values of the aforementioned two mortgage guaranty investments are shown below.
 
   
June 30,
 
December 31,
   
2009
 
2008
 
2007
Total value of the two investments:
Original cost
$
416.4
 
$
416.4
 
$
429.7
 
Impaired cost
 
106.8
   
106.8
   
N/A
 
Fair value
 
100.1
   
82.7
   
375.1
 
Underlying equity(*)
$
430.2
 
$
515.9
 
$
679.7
                     
(*) Underlying equity based on latest reports (which may lag by one quarter) issued by investees.

When making investment decisions, management considers the Company’s ability to retain its holdings for a period sufficient to recover their cost and to obtain a competitive long-term total return. It also considers such factors as balance sheet effects of potential changes in market valuations, asset-liability matching objectives, long term ability to hold securities, tax planning considerations, and the investees’ reported book values and ability to continue as going concerns. The above-noted mortgage guaranty holdings were acquired as passive long-term investment additions for a core segment of Old Republic’s business in anticipation of a turn-around for the MI industry in 2010. In management’s judgment, the currently depressed market valuations of companies operating in the housing and mortgage-lending sectors of the American economy have been impacted significantly by the cyclical and macroeconomic conditions affecting these sectors, and by the recent dysfunctionality of the banking and mortgage lending industries.

For external financial reporting purposes, however, Old Republic uses relatively short time frames in recognizing OTTI adjustments in its income statement. In this context, absent issuer-specific circumstances that would result in a contrary conclusion, all unrealized investment losses pertaining to any equity security reflecting a 20 percent or greater decline for a six month period is considered OTTI. Unrealized losses that are deemed temporary and all unrealized gains are recorded directly as a separate component of the shareholders’ equity account and in the consolidated statement of comprehensive income. As a result of accounting idiosyncrasies, however, OTTI losses recorded in the income statement of one period can not be offset in the income statement of a subsequent period by fair value gains on the previously impaired securities unless the gains are realized through actual sales. Such unrealized fair value gains can only be recognized through direct credits in the shareholders’ equity account and in the consolidated statement of comprehensive income.


-more-
 
 
 
 
Old Republic International Corporation
Add 6


Conference Call Information
Old Republic has scheduled a conference call at 3:00 p.m. EST (2:00 p.m. CST) today, to discuss its second quarter 2009 performance and to review major operating trends and business developments. To access this call, please log on to www.oldrepublic.com 15 minutes before the call to download the necessary software.

Investors may access a replay of the call by dialing 888-203-1112, passcode 6234880, which will be available through July 30, 2009. The replay will also be available on Old Republic International’s website through August 22, 2009.

About Old Republic
Chicago-based Old Republic International Corporation is an insurance holding company whose subsidiaries market, underwrite and provide risk management services for a wide variety of coverages primarily in the property & liability, mortgage guaranty, and title insurance fields. One of the nation’s 50 largest publicly owned insurance organizations, Old Republic has assets of approximately $13.71 billion and shareholders’ equity of $3.75 billion or $15.93 per share. Its current stock market valuation is approximately $2.30 billion, or $9.57 per share.

The nature of Old Republic’s business requires that it be managed for the long run. For the 25 years ended in 2008, the Company’s total market return, with dividends reinvested, has grown at a compounded annual rate of 9.6 percent per share. For the same period, the total market return, with dividends reinvested, for the S&P 500 Index has grown at a 9.8 percent annual compound rate. During those years, Old Republic’s shareholders’ equity account, inclusive of cash dividends, has risen at an average annual rate of 12.1 percent per share, and the regular cash dividend has grown at a 10.3 percent annual compound rate. According to the most recent edition of Mergent’s Dividend Achievers, Old Republic is one of just 120 companies, out of 10,000-plus publicly held corporations, that have posted at least 25 consecutive years of annual dividend growth.

     
     
Accompanying Financial Data:
·  
Summary Financial Statements and Common Stock Statistics
·  
Segmented Operating Summary
·  
Segmented Operating Statistics
·  
Notes and Safe Harbor Statement

-more-
 
 
 
 
Old Republic International Corporation
Add 7

Old Republic International Corporation
Financial Summary (Unaudited)
           
   
June 30,
 
December 31,
 
June 30,
SUMMARY BALANCE SHEETS:
 
2009
 
2008
 
2008
Assets:
                 
Cash and fixed maturity securities                                                              
 
$
8,879.6
 
$
8,358.9
 
$
8,019.6
Equity securities                                                                                               
   
365.9
   
350.3
   
521.0
Other invested assets                                                        
   
144.3
   
145.8
   
150.2
     Cash and invested assets                                                                       
   
9,389.9
   
8,855.1
   
8,691.0
Accounts and premiums receivable                                                     
   
830.6
   
806.7
   
857.3
Federal income tax recoverable: Current                                                 
   
16.8
   
41.0
   
4.8
Reinsurance balances recoverable                                                         
   
2,578.3
   
2,448.0
   
2,368.8
Prepaid federal income taxes                                                                      
   
221.4
   
463.4
   
501.3
Sundry assets                                                                                               
   
681.3
   
651.7
   
681.2
     Total                                                                                             
 
$
13,718.6
 
$
13,266.0
 
$
13,104.5
Liabilities and Shareholders’ Equity:
                 
Policy liabilities                                                                                               
 
$
1,291.4
 
$
1,293.0
 
$
1,358.8
Benefit and claim reserves                                                                          
   
7,577.5
   
7,241.3
   
6,762.7
Federal income tax payable:
Current                                                                
   
-
   
-
   
-
 
Deferred                                                                
   
10.8
   
77.3
   
188.2
Debt                                                                                               
   
372.2
   
233.0
   
66.3
Sundry liabilities                                                                                               
   
713.3
   
680.9
   
669.3
Shareholders’ equity                                                                                      
   
3,753.1
   
3,740.3
   
4,058.9
     Total                                                                                             
 
$
13,718.6
 
$
13,266.0
 
$
13,104.5
                   

   
Quarters Ended
 
Six Months Ended
 
Fiscal Twelve
Months Ended
SUMMARY INCOME STATEMENTS:
 
June 30,
 
June 30,
 
June 30,
   
2009
 
2008
 
2009
 
2008
 
2009
 
2008
Net premiums and fees earned
 
$
811.8
 
$
835.5
 
$
1,589.3
 
$
1,682.2
 
$
3,225.1
 
$
3,500.4
Net investment income
   
93.7
   
93.1
   
187.1
   
188.4
   
376.0
   
383.1
Other income
   
6.6
   
8.6
   
14.2
   
17.4
   
25.6
   
35.3
Net realized investment gains (losses)
   
0.3
   
(430.5)
   
0.3
   
(429.6)
   
(56.4)
   
(375.5)
     Total revenues
   
912.6
   
506.9
   
1,791.1
   
1,458.5
   
3,570.4
   
3,543.3
Benefits and claims
   
639.6
   
685.5
   
1,291.6
   
1,333.9
   
2,673.4
   
2,608.7
Sales and other expenses
   
358.6
   
339.4
   
677.9
   
682.3
   
1,336.8
   
1,436.8
     Total expenses
   
998.3
   
1,024.9
   
1,969.6
   
2,016.2
   
4,010.3
   
4,045.5
Pretax income (loss)
   
(85.6)
   
(518.1)
   
(178.4)
   
(557.7)
   
(439.9)
   
(502.2)
Income taxes (credits)
   
(69.8)
   
(153.3)
   
(108.6)
   
(173.9)
   
(195.5)
   
(167.9)
     Net income (loss)
 
$
(15.8)
 
$
(364.7)
 
$
(69.8)
 
$
(383.8)
 
$
(244.3)
 
$
(334.2)
                                     
COMMON STOCK STATISTICS (a):
                                   
   Net income (loss): Basic              
$
(.07)
 
$
(1.58)
 
$
(.30)
 
$
(1.66)
 
$
(1.05)
 
$
(1.44)
 
   Diluted         
 
$
(.07)
 
$
(1.58)
 
$
(.30)
 
$
(1.66)
 
$
(1.05)
 
$
(1.44)
Components of earnings per share:
                                   
  Basic, net operating income (loss)
 
$
(.21)
 
$
(.22)
 
$
(.44)
 
$
(.30)
 
$
(.95)
 
$
(.23)
  Realized investment gains (losses)
   
.14
   
(1.36)
   
.14
   
(1.36)
   
(.10)
   
(1.21)
   Basic net income (loss)          
 
$
(.07)
 
$
(1.58)
 
$
(.30)
 
$
(1.66)
 
$
(1.05)
 
$
(1.44)
  Diluted, net operating income (loss)
 
$
(.21)
 
$
(.22)
 
$
(.44)
 
$
(.30)
 
$
(.95)
 
$
(.23)
  Realized investment gains (losses)
   
.14
   
(1.36)
   
.14
   
(1.36)
   
(.10)
   
(1.21)
   Diluted net income (loss)        
 
$
(.07)
 
$
(1.58)
 
$
(.30)
 
$
(1.66)
 
$
(1.05)
 
$
(1.44)
Cash dividends on common stock
 
$
.17
 
$
.17
 
$
.34
 
$
.33
 
$
.68
 
$
.65
Book value per share                    
                         
$
15.93
 
$
17.59
Common shares outstanding:
                                   
  Average basic                            
   
235,562,774
   
230,702,352
   
235,414,346
   
230,692,358
   
233,826,822
   
230,830,812
  Average diluted                           
   
235,562,774
   
230,702,352
   
235,414,346
   
230,692,358
   
233,826,822
   
231,317,818
  Actual, end of period                   
                           
235,642,486
   
230,717,693
                                     
SUMMARY STATEMENTS OF COMPREHENSIVE INCOME (LOSS):
                     
Net income (loss) as reported
 
$
(15.8)
 
$
(364.7)
 
$
(69.8)
 
$
(383.8)
 
$
(244.3)
 
$
(334.2)
Post-tax net unrealized gains (losses)
   
154.7
   
81.0
   
144.8
   
(28.3)
   
95.1
   
14.5
Other adjustments                       
   
8.2
   
.7
   
8.8
   
(4.5)
   
(43.6)
   
19.0
Net adjustments            
   
163.0
   
81.8
   
153.7
   
(32.8)
   
51.5
   
33.5
Comprehensive income (loss)
 
$
147.1
 
$
(282.9)
 
$
83.9
 
$
(416.6)
 
$
(192.8)
 
$
(300.7)
                                     


-more-
 
 
 
 
Old Republic International Corporation
Add 8

Old Republic International Corporation
Segmented Operating Summary (Unaudited)
                                   
 
Net
                         
Pretax
 
Composite
 
Premiums
 
Net
             
Sales &
     
Operating
 
Under-
 
& Fees
 
Investment
 
Other
 
Operating
 
Benefits
 
Other
 
Total
 
Income
 
writing
 
Earned
 
Income
 
Income
 
Revenues
 
& Claims
 
Expenses
 
Expenses
 
(Loss)
 
Ratios
                                   
Quarter Ended June  30, 2009
                                         
                                                     
General
$
440.7
 
$
63.5
 
$
2.7
 
$
507.0
 
$
334.7
 
$
125.8
 
$
460.6
 
$
46.4
 
102.7
%
Mortgage
 
141.5
   
22.2
   
2.7
   
166.5
   
279.8
   
24.6
   
304.4
   
(137.9)
 
211.9
 
Title
 
213.0
   
6.0
   
             -
   
219.0
   
16.1
   
197.3
   
213.4
   
5.6
 
99.8
 
Other
 
16.5
   
1.9
   
1.0
   
19.5
   
8.9
   
10.7
   
19.7
   
(0.1)
 
             -
 
Consolidated
$
811.8
 
$
93.7
 
$
6.6
 
$
912.2
 
$
639.6
 
$
358.6
 
$
998.3
 
$
(86.0)
 
121.1
%
                                                     
Quarter Ended June 30, 2008
                                         
                                                     
General
$
494.2
 
$
62.6
 
$
4.4
 
$
561.3
 
$
375.7
 
$
129.3
 
$
505.0
 
$
56.3
 
100.5
%
Mortgage
 
149.1
   
21.4
   
3.0
   
173.6
   
287.2
   
27.1
   
314.4
   
(140.7)
 
208.7
 
Title
 
172.9
   
6.3
   
             -
   
179.3
   
11.7
   
172.1
   
183.9
   
(4.5)
 
106.2
 
Other
 
19.1
   
2.6
   
1.1
   
22.9
   
10.8
   
10.7
   
21.5
   
1.4
 
             -
 
Consolidated
$
835.5
 
$
93.1
 
$
8.6
 
$
937.4
 
$
685.5
 
$
339.4
 
$
1,024.9
 
$
(87.5)
 
121.1
%
                                                     
                                                     
Six Months Ended June 30, 2009
                                   
                                                     
General
$
898.1
 
$
127.0
 
$
5.6
 
$
1,030.8
 
$
676.7
 
$
249.4
 
$
926.1
 
$
104.6
 
101.5
%
Mortgage
 
286.8
   
44.6
   
6.3
   
337.8
   
570.3
   
50.0
   
620.4
   
(282.5)
 
212.8
 
Title
 
367.3
   
11.9
   
.1
   
379.3
   
26.4
   
356.4
   
382.8
   
(3.4)
 
103.9
 
Other
 
36.9
   
3.5
   
2.2
   
42.7
   
18.1
   
22.0
   
40.2
   
2.4
 
             -
 
Consolidated
$
1,589.3
 
$
187.1
 
$
14.2
 
$
1,790.7
 
$
1,291.6
 
$
677.9
 
$
1,969.6
 
$
(178.8)
 
122.3
%
                                                     
Six Months Ended June 30, 2008
                                   
                                                     
General
$
1,007.0
 
$
127.1
 
$
8.7
 
$
1,142.9
 
$
734.0
 
$
262.7
 
$
996.7
 
$
146.1
 
97.4
%
Mortgage
 
296.7
   
42.9
   
6.3
   
346.1
   
554.5
   
54.6
   
609.2
   
(263.1)
 
203.2
 
Title
 
333.7
   
12.8
   
             -
   
346.4
   
23.0
   
340.7
   
363.7
   
(17.2)
 
108.8
 
Other
 
44.7
   
5.4
   
2.4
   
52.5
   
22.2
   
24.2
   
46.5
   
6.0
 
             -
 
Consolidated
$
1,682.2
 
$
188.4
 
$
17.4
 
$
1,888.1
 
$
1,333.9
 
$
682.3
 
$
2,016.2
 
$
(128.1)
 
118.4
%
                                                     
                                                     
Fiscal Twelve Months Ended June 30, 2009
                                   
                                                     
General
$
1,880.4
 
$
253.4
 
$
9.9
 
$
2,143.8
 
$
1,395.0
 
$
495.8
 
$
1,890.9
 
$
252.9
 
99.2
%
Mortgage
 
582.6
   
88.5
   
10.6
   
681.8
   
1,196.5
   
99.1
   
1,295.6
   
(613.8)
 
219.9
 
Title
 
689.7
   
24.2
   
.1
   
714.2
   
49.0
   
697.7
   
746.7
   
(32.5)
 
107.9
 
Other
 
72.3
   
9.8
   
4.7
   
86.9
   
32.7
   
44.2
   
77.0
   
9.9
 
             -
 
Consolidated
$
3,225.1
 
$
376.0
 
$
25.6
 
$
3,626.8
 
$
2,673.4
 
$
1,336.8
 
$
4,010.3
 
$
(383.4)
 
123.0
%
                                                     
Fiscal Twelve Months Ended June 30, 2008
                                   
                                                     
General
$
2,100.2
 
$
260.5
 
$
18.2
 
$
2,379.0
 
$
1,495.1
 
$
531.4
 
$
2,026.5
 
$
352.4
 
94.9
%
Mortgage
 
572.0
   
84.0
   
12.0
   
668.0
   
1,023.8
   
102.9
   
1,126.8
   
(458.7)
 
194.9
 
Title
 
744.8
   
26.6
   
(0.1)
   
771.2
   
51.8
   
755.7
   
807.6
   
(36.3)
 
108.2
 
Other
 
83.3
   
11.9
   
5.2
   
100.5
   
37.9
   
46.6
   
84.6
   
15.9
 
             -
 
Consolidated
$
3,500.4
 
$
383.1
 
$
35.3
 
$
3,918.8
 
$
2,608.7
 
$
1,436.8
 
$
4,045.5
 
$
(126.6)
 
114.1
%
                                                     
                                                     
 

-more-
 
 
 
 
Old Republic International Corporation
Add 9

Old Republic International Corporation
Segmented Operating Statistics
 
   
Quarters Ended
 
Six Months Ended
 
Fiscal Twelve
 Months Ended
   
   
June 30,
 
June 30,
 
June 30,
   
   
2009
 
2008
 
2009
 
2008
 
2009
 
2008
   
General Insurance:
                                       
Benefits and claims ratio              
   
75.9%
   
76.0%
   
75.3%
   
72.9%
   
74.2%
   
71.2%
   
Expense ratio                           
   
26.8
   
24.5
   
26.2
   
24.5
   
25.0
   
23.7
   
Composite ratio                      
   
102.7%
   
100.5%
   
101.5%
   
97.4%
   
99.2%
   
94.9%
   
                                         
Paid loss ratio                          
   
74.1%
   
76.2%
   
75.6%
   
69.7%
   
72.7%
   
63.2%
   
                                         
                                         
Mortgage Guaranty:
                                       
New insurance written:
                                       
Traditional Primary                  
 
$
2,573.2
 
$
5,986.0
 
$
4,785.2
 
$
13,852.9
 
$
11,794.2
 
$
33,919.2
   
Bulk                                        
   
-
   
-
   
-
   
3.5
   
-
   
2,317.0
   
Other                                        
   
-
   
231.5
   
.5
   
712.6
   
411.4
   
1,367.4
   
Total                                        
 
$
2,573.2
 
$
6,217.5
 
$
4,785.8
 
$
14,569.1
 
$
12,205.6
 
$
37,603.7
   
                                         
Risk in force:
                                       
Traditional Primary                  
                         
$
19,202.8
 
$
20,254.2
   
Bulk                                        
                           
1,941.5
   
2,204.1
   
Other                                        
                           
330.3
   
478.1
   
Total                                        
                         
$
21,474.6
 
$
22,936.6
   
By loan type:
                                       
Traditional Primary:
                                       
Fixed rate                  
                           
95.9%
   
95.2%
   
Adjustable rate               
                           
4.1%
   
4.8%
   
Bulk:
                                       
Fixed rate                        
                           
75.3%
   
73.0%
   
Adjustable rate
                           
24.7%
   
27.0%
   
                                         
Balance Sheet Leverage Ratios (b):