Erie Indemnity Company
Statements of Operations
(dollars in thousands, except per share data)
Three months ended
December 31,
2015
2014
(Unaudited)
Operating revenue
Management fee revenue, net
Service agreement revenue
Total operating revenue
$
Operating expenses
Commissions
Salaries and employee benefits
All other operating expenses
Total operating expenses
Net revenue from operations
Investment income
Net investment income
Net realized gains (losses) on investments
Net impairment losses recognized in earnings
Equity in earnings (losses) of limited partnerships
Total investment income
Income before income taxes
Income tax expense
Net income
Earnings Per Share
Net income per share
Class A common stock – basic
Class A common stock – diluted
Class B common stock – basic
Class B common stock – diluted
Twelve months ended
December 31,
2015
2014
348,885 $
7,495
356,380
329,382 $
7,874
337,256
1,475,511 $
29,997
1,505,508
1,376,190
30,929
1,407,119
206,691
55,998
51,852
314,541
41,839
195,499
53,417
52,927
301,843
35,413
847,880
226,713
198,374
1,272,967
232,541
783,017
206,690
194,565
1,184,272
222,847
$
4,469
617
(923)
81
4,244
46,083
15,950
30,133 $
4,312
(237)
0
(1,733)
2,342
37,755
12,459
25,296 $
17,791
492
(1,558)
16,983
33,708
266,249
91,571
174,678 $
$
$
$
$
0.65
0.57
97
97
0.54
0.48
81
81
3.75
3.33
563
562
$
$
$
$
$
$
$
$
$
$
$
$
16,536
1,057
(105)
10,929
28,417
251,264
83,759
167,505
3.59
3.18
539
538
Weighted average shares outstanding – Basic
Class A common stock
Class B common stock
46,179,559
2,542
46,189,068
2,542
46,186,671
2,542
46,247,876
2,542
Weighted average shares outstanding – Diluted
Class A common stock
Class B common stock
52,506,600
2,542
52,601,010
2,542
52,498,811
2,542
52,616,234
2,542
Dividends declared per share
Class A common stock
Class B common stock
$
$
0.730 $
109.50 $
1
0.681 $
102.15 $
2.773 $
415.95 $
2.586
387.90
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.
Our method of calculating this measure may differ from those used by other companies, and therefore comparability may be
limited.
We define operating income as net income excluding realized capital gains and losses, impairment losses, and related federal
income taxes.
We use operating income to evaluate the results of our 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 our overall profitability.
The following table reconciles operating income and net income for the years ended December 31:
(in thousands, except per share data)
Operating income
Net realized (losses) gains and impairments on investments
Income tax benefit (expense)
Realized (losses) gains and impairments, net of income taxes
Net income
Per Class A common share-diluted:
Operating income
Net realized (losses) gains and impairments on investments
Income tax benefit (expense)
Realized (losses) gains and impairments, net of income taxes
Net income
2
Three months ended
December 31,
2015
2014
(Unaudited)
$
30,332 $
25,449
(306)
(237)
107
84
(199)
(153)
$
30,133 $
25,296
$
$
$
$
0.58 $
(0.01)
0.00
(0.01)
0.57 $
0.48
0.00
0.00
0.00
0.48
Twelve months ended
December 31,
2015
2014
$
$
175,371 $
(1,066)
373
(693)
174,678 $
166,886
952
(333)
619
167,505
3.34 $
(0.02)
0.01
(0.01)
3.33 $
3.17
0.02
(0.01)
0.01
3.18
Erie Indemnity Company
Statements of Financial Position
(in thousands)
December 31, 2015
Assets
Current assets:
Cash and cash equivalents
Short-term investments
Receivables from Erie Insurance Exchange and affiliates
Prepaid expenses and other current assets
Federal income taxes recoverable
Accrued investment income
Total current assets
$
Available-for-sale securities
Limited partnership investments
Fixed assets, net
Deferred income taxes, net
Note receivable from Erie Family Life Insurance Company
Other assets
Total assets
$
Liabilities and shareholders' equity
Current liabilities:
Commissions payable
Agent bonuses
Accrued expenses and other current liabilities
Accounts payable
Dividends payable
Deferred executive compensation
Total current liabilities
$
Defined benefit pension plan
Employee benefit obligations
Deferred executive compensation
Other long-term liabilities
Total liabilities
Shareholders’ equity
Total liabilities and shareholders’ equity
$
3
December 31, 2014
182,889 $
62,067
348,055
24,697
11,947
5,491
635,146
91,747
63,278
335,220
26,020
11,448
5,538
533,251
537,874
88,535
59,087
40,686
25,000
20,968
1,407,296 $
526,492
112,617
62,991
37,321
25,000
21,526
1,319,198
195,542 $
106,752
42,006
46,526
33,996
20,877
445,699
189,918
88,228
39,560
35,844
31,714
14,891
400,155
172,700
1,234
16,580
1,580
637,793
188,820
1,889
24,087
1,113
616,064
769,503
1,407,296 $
703,134
1,319,198