UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the period ended June 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from______to______
Commission file number 1-8993
FUND AMERICAN ENTERPRISES HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
Delaware 94-2708455
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
80 South Main Street, Hanover, New Hampshire 03755-2053
(Address of principal executive offices including zip code)
(603) 643-1567
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
----- -----
As of August 12, 1996, 7,201,719 shares of Common Stock with a par value of
$1.00 per share were outstanding.
FUND AMERICAN ENTERPRISES HOLDINGS, INC.
Table of Contents
PART I. FINANCIAL INFORMATION Page No.
-------
Item 1. Financial Statements
Condensed Consolidated Balance Sheets,
June 30, 1996 (Unaudited), and December 31, 1995 3
Condensed Consolidated Income Statements (Unaudited),
Three Months and Six Months Ended June 30, 1996 and 1995 4
Condensed Consolidated Statements of Cash Flows (Unaudited),
Six Months Ended June 30, 1996 and 1995 5
Notes to Condensed Consolidated Financial
Statements (Unaudited) 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 6-10
Part II. OTHER INFORMATION
Items 1 through 6 11
SIGNATURES 12
-2-
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
FUND AMERICAN ENTERPRISES HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(dollars in millions, except per share amounts)
June 30, December 31,
1996 1995
----------- ------------
(Unaudited)
Assets
Common equity securities, at fair value (cost: $87.6 and $232.1) $ 115.0 $ 274.5
Fixed maturity investments, at fair value (cost: $155.7 and $109.8) 153.3 110.7
Other investments (cost: $120.7 and $86.7) 147.5 95.9
Short-term investments, at amortized cost (which approximated market value) 46.3 103.6
---------- ------------
Total investments 462.1 584.7
Cash 1.8 2.7
Capitalized mortgage servicing, net of accumulated amortization 435.4 397.1
Mortgage loans held for sale 439.5 381.0
Other mortgage origination and servicing assets 165.2 164.4
Insurance premiums receivable 55.3 45.3
Investments in unconsolidated insurance affiliates 202.5 96.2
Other assets 212.3 200.5
---------- ------------
Total Assets $ 1,974.1 $ 1,871.9
========== ============
Liabilities
Short-term debt $ 482.3 $ 445.4
Long-term debt 406.8 407.3
Loss and loss adjustment expense reserves 44.9 44.1
Unearned insurance premiums 69.1 35.0
Accounts payable and other liabilities 211.8 196.4
---------- ------------
Total liabilities 1,214.9 1,128.2
---------- ------------
Minority Interest - preferred stock of subsidiary 44.0 44.0
---------- ------------
Shareholders' Equity
Common stock at $1 par value per share - authorized 125,000,000 shares;
issued 32,558,729 and 32,719,279 shares 32.6 32.7
Common paid-in surplus 373.6 375.5
Retained earnings 1,142.5 1,124.6
Common stock in treasury, at cost - 25,034,939 shares (871.0) (871.0)
Net unrealized gains on investment securities 37.5 37.9
---------- ------------
Total shareholders' equity 715.2 699.7
---------- ------------
Total Liabilities, Minority Interest and Shareholders' Equity $ 1,974.1 $ 1,871.9
========== ============
See Notes to Condensed Consolidated Financial Statements.
-3-
CONDENSED CONSOLIDATED INCOME STATEMENTS
Unaudited
(millions, except per share amounts)
Three Months Ended Six Months Ended
June 30, June 30,
------------------- -------------------
1996 1995 1996 1995
-------- -------- -------- --------
Revenues:
Mortgage servicing revenue $ 33.5 $ 34.2 $ 68.1 $ 75.4
Amortization of capitalized servicing 9.8 23.1 10.0 37.1
Net loss on interest rate contracts 1.9 - 4.9 -
-------- -------- -------- --------
Net servicing revenue 21.8 11.1 53.2 38.3
Net gain on sales of mortgages 11.4 2.3 24.5 5.7
Gain on sale of mortgage servicing - - - 28.2
Other mortgage operations revenue 4.6 3.5 9.5 7.0
Insurance premuims earned 25.8 - 45.3 -
Equity in earnings of unconsolidated insurance affiliates 1.8 2.4 3.1 4.0
Other insurance operations revenue 2.0 9.7 5.3 9.7
Investment income 15.4 14.3 29.6 27.2
-------- -------- -------- --------
Total revenues 82.8 43.3 170.5 120.1
-------- -------- -------- --------
Expenses:
Compensation and benefits 25.5 62.9 47.9 80.7
General expenses 21.3 13.8 41.2 27.4
Interest expense 12.9 10.1 27.0 22.1
Insurance losses and loss adjustment expenses 17.3 - 30.5 -
-------- -------- -------- --------
Total expenses 77.0 86.8 146.6 130.2
-------- -------- -------- --------
Pretax operating earnings (loss) 5.8 (43.5) 23.9 (10.1)
Net realized investment gains 1.3 10.4 29.7 27.4
-------- -------- -------- --------
Pretax earnings (loss) 7.1 (33.1) 53.6 17.3
Income tax provision (benefit) 3.6 (10.6) 21.3 7.8
-------- -------- -------- --------
After tax earnings (loss) 3.5 (22.5) 32.3 9.5
Tax benefit from sale of discontinued operations - 66.0 - 66.0
Loss on early extinguishment of debt, after tax - (.2) - (.4)
-------- -------- -------- --------
Net Income 3.5 43.3 32.3 75.1
Less dividends on preferred stock - 1.7 - 3.3
-------- -------- -------- --------
Net income applicable to common stock $ 3.5 $ 41.6 $ 32.3 $ 71.8
======== ======== ======== ========
Primary earnings per share:
After tax earnings (loss) $ .42 $ (2.95) $ 3.87 $ .72
Net income .42 5.08 3.87 8.40
Fully diluted earnings per share:
After tax earnings (loss) .42 (2.44) 3.87 .99
Net income .42 4.68 3.87 7.82
See Notes to Condensed Consolidated Financial Statements
-4-
FUND AMERICAN ENTERPRISES HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Unaudited
(millions)
Six Months Ended
June 30,
------------------------
1996 1995
-------- --------
Cash flows from operations:
Net income $ 32.3 $ 75.1
Charges (credits) to reconcile net income to cash flows from operations:
Tax benefit from sale of discontinued operations - (66.0)
Loss on early extinguishment of debt, after tax - .4
Undistributed equity in earnings of unconsolidated insurance affiliates (2.7) (3.6)
Compensation expense resulting from warrant extension - 46.2
Net realized investment gains (29.7) (27.4)
Increase in mortgage loans held for sale (58.5) (143.6)
Gain on sale of mortgage servicing - (28.2)
Increase in unearned insurance premiums 34.1 -
Increase in insurance premiums receivable (10.0) -
Increase in deferred insurance policy acquisition costs (5.7) -
Depreciation and amortization 14.3 39.5
Net loss on interest rate contracts 4.9 -
Capitalized excess mortgage servicing income (5.4) (2.0)
Changes in current income taxes receivable and payable (1.0) 24.1
Deferred income tax expense (benefit) 22.7 (16.6)
Other, net 14.0 47.8
-------- --------
Net cash flows provided from (used for) operating activities 9.3 (54.3)
-------- --------
Cash flows from investing activities:
Net decrease (increase) in short-term investments 57.3 (45.3)
Sales of common equity securities and other investments 192.9 133.2
Sales and maturities of fixed maturity investments 24.8 -
Purchases of common equity securities and other investments (55.2) (42.9)
Purchases of fixed maturity investments (78.6) -
Acquisition of consolidated affiliate (13.2) -
Investments in unconsolidated insurance affiliates (107.6) (33.8)
Collections on mortgage origination and servicing assets 88.6 80.9
Additions to purchased mortgage servicing rights (16.4) (28.4)
Originated mortgage servicing rights (25.3) (9.6)
Proceeds from sale of mortgage servicing - 169.8
Additions to other mortgage origination and servicing assets (94.4) (86.0)
Net (purchases) sales of fixed assets (2.9) .4
-------- --------
Net cash flows (used for) provided from investing activities (30.0) 138.3
-------- --------
Cash flows from financing activities:
Net issuances (repayments) of short-term debt 61.8 74.4
Repayments of long-term debt (25.2) (93.7)
Purchases of common stock retired (12.8) (56.4)
Dividends paid to shareholders (3.1) (3.3)
Other (.9) -
-------- --------
Net cash provided from (used for) financing activities 19.8 (79.0)
-------- --------
Net (decrease) increase in cash during period (.9) 5.0
Cash balance at beginning of period 2.7 1.5
-------- --------
Cash balance at end of period $ 1.8 $ 6.5
======== ========
Supplemental cash flows information:
Interest paid $ (26.2) $ (24.1)
Net income tax receipts (payments) $ .3 $ (.3)
See Notes to Condensed Consolidated Financial Statements.
-5-
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Unaudited
Note 1. Basis of Presentation
- ------------------------------
The accompanying condensed consolidated financial statements include the
accounts of Fund American Enterprises Holdings, Inc. (the "Company") and its
subsidiaries (collectively, "Fund American"). Fund American's principal
businesses are conducted through White Mountains Holdings, Inc. and its
operating subsidiaries ("White Mountains") and Source One Mortgage Services
Corporation and its subsidiaries ("Source One"). White Mountains is an
insurance holding company principally engaged through its affiliates in the
business of property and casualty insurance. Source One is one of the nation's
largest independent mortgage banking companies.
The financial statements have been prepared in accordance with generally
accepted accounting principles and include all adjustments (consisting of normal
recurring adjustments) considered necessary by management to fairly present the
financial position, results of operations and cash flows of Fund American.
These interim financial statements may not be indicative of financial results
for the full year and should be read in conjunction with the Company's 1995
Annual Report to Shareholders.
Note 2. Earnings Per Share
- ---------------------------
Primary earnings per share amounts are based on the weighted average number of
common and dilutive common equivalent shares outstanding of 8,320,959 and
8,190,455 for the three-month periods ended June 30, 1996 and 1995,
respectively, and 8,342,831 and 8,545,624 for the six month periods ended June
30, 1996 and 1995, respectively. Fully diluted earnings per share amounts are
based on the weighted average number of common shares outstanding, assuming full
dilution, of 8,320,974 and 9,245,268 for the three month periods ended June 30,
1996 and 1995, respectively, and 8,342,859 and 9,596,395 for the six month
periods ended June 30, 1996 and 1995, respectively.
Item 2. Management's Discussion and Analysis
- --------------------------------------------
Results of Operations -- Three-Month and Six-Month Periods Ended June 30, 1996
and 1995
Fund American reported net income of $32.3 million, or $3.87 per share, for the
six month period ended June 30, 1996, compared to net income of $75.1 million,
or $7.82 per share fully diluted, for the six month period ended June 30, 1995.
For the 1996 second quarter Fund American reported net income of $3.5 million,
or $.42 per share, versus $43.3 million, or $4.68 per share fully diluted, in
1995. Net income for the second quarter of 1995 includes three non-recurring
items: (i) a $46.2 million pretax charge to compensation expense related to
previously outstanding employee stock warrants, (ii) a $66.0 million favorable
tax development relating to the sale of a former subsidiary, and (iii) the
receipt of a $9.7 million breakup fee, net of related expenses, from Home
Holdings, Inc.
Book value per common and equivalent share increased to $86.92, an increase of
$3.64 from the December 31, 1995 book value per share of $83.28.
Insurance Operations. Property and casualty earned insurance premiums for the
1996 second quarter and year-to-date totalled $25.8 million and $45.3 million,
respectively. Earned premiums will continue to substantially lag net written
premiums until 1997, since Charter Indemnity Company ("Charter"), which writes
about $80 million of non-standard automobile insurance in Texas annually, began
for the first time in 1996 to retain virtually all its written premium. The
operations of Valley Insurance Company ("Valley"), a northwest, regional
property-casualty company which writes personal and commercial lines, posted a
combined ratio of 98.2% for the 1996 first half. Valley had $34.0 million of
earned premium for the 1996 first half and had net written premiums of $37.5
million. Charter posted a combined ratio of 99.1%
-6-
for the 1996 first half. Charter had $11.3 million of earned premium for the
1996 first half and had net written premiums of $41.6 million. Valley and
Charter were acquired by White Mountains on December 1, 1995. A summary of White
Mountains' consolidated insurance operating results follows:
- --------------------------------------------------------------------------------
Three Months Ended Six Months Ended
Dollars in millions June 30, 1996 June 30, 1996
- --------------------------------------------------------------------------------
Gross written premium $44.7 $82.8
Net written premium 42.7 79.2
Ending statutory surplus 79.6
Valley:
- -------
Loss and loss adjustment expense 63.8% 63.1%
Underwriting expense 33.6% 35.1%
----- -----
Combined ratio 97.4% 98.2%
===== =====
Charter:
- --------
Loss and loss adjustment expense 82.8% 80.0%
Underwriting expense 15.6% 19.1%
----- -----
Combined ratio 98.4% 99.1%
===========================================================================
Fund American holds a 24.9% economic interest in Financial Security Assurance
Holdings, Ltd. ("FSA"). FSA continued to post strong results for 1996 through
the second quarter. From insurance operations alone, FSA's adjusted book value
per share grew at an annualized rate of 15.1% driven by the addition of $117.3
million in present value premiums originated during the first half of 1996.
FSA's adjusted book value ended the 1996 first half at $32.45, up $1.29 from
$31.16 at December 31, 1995. The actual 1996 growth in book value from FSA's
operations was muted by unrealized investment losses caused by increasing market
interest rates. On June 17, 1996, Fund American purchased an additional one
million shares of the common stock of FSA in a private transaction for $26.5
million.
Mortgage Origination and Servicing. A summary of Source One's mortgage loan
production and mortgage servicing
portfolio activities follows:
- --------------------------------------------------------------------------------
Three Months Six Months
Ended June 30, Ended June
30,
-----------------------------------------------------
Millions 1996 1995 1996 1995
- --------------------------------------------------------------------------------
Mortgage loan production:
Retail originations $ 505 $ 332 $ 1,100 $ 525
Wholesale originations 602 278 1,212 414
---------------------------------------------------
Total $ 1,107 $ 610 $ 2,312 $ 939
- ---------------------------===================================================
Mortgage loan servicing
portfolio (a):
Beginning balance $ 31,605 $ 28,970 $ 31,831 $ 39,568
Mortgage loan
production 1,107 610 2,312 939
Regular payoffs (864) (479) (1,783) (863)
Sale of servicing - - - (9,893)
Other (519) (355) (1,031) (1,005)
-----------------------------------------------------
Ending balance $ 31,329 $ 28,746 $ 31,329 $ 28,746
================================================================================
-7-
The increase in mortgage loan production and payoffs for the 1996 first half
versus the comparable prior year period reflects lower market interest rates and
a corresponding increase in refinancing activity during the 1996 first half
versus the comparable 1995 period. Additional information regarding Source
One's mortgage loan servicing portfolio is shown below:
- --------------------------------------------------------------------------------
June 30, Dec. 31,
1996 1995
- --------------------------------------------------------------------------------
Mortgage loan servicing portfolio (a):
Number of loans 481,393 494,051
Weighted average interest rate 8.25% 8.33%
Percent delinquent (b) 5.27% 6.08%
================================================================================
(a) Includes loans subserviced for others of $3,884 million, $4,039 million and
$4,190 million as June 30, 1996, December 31, 1995 and June 30, 1995,
respectively.
(b) Includes loans in process of foreclosure.
Source One's net mortgage servicing revenue increased to $21.8 million and $53.2
million for the three and six month periods ended June 30, 1996, respectively,
from $11.1 million and $38.3 million for the comparable 1995 periods. The
increase in net servicing revenue during the 1996 periods is primarily the
result of $7.5 million and $27.5 million in pretax recoveries of Source One's
valuation allowance for the impairment of mortgage servicing rights for the
three and six month periods ended June 30, 1996, respectively. The 1996
recoveries reflect an increase in market interest rates which resulted in an
increase in the fair value of Source One's mortgage servicing rights from year-
end 1995 levels. Gross mortgage servicing revenue, however, decreased during
the 1996 second quarter and year-to-date periods due primarily to decreases in
both the size of the servicing portfolio and average servicing fee rates.
Source One utilizes interest rate floor contracts to mitigate the effect on
earnings of higher amortization and impairment of the capitalized servicing
asset caused by changes in market interest rates. Mortgage servicing revenue
for the three and six month periods ended June 30, 1996 has been reduced by $1.9
million and $4.9 million of pretax net losses, respectively, which represents
declines in the market value of Source One's investments in interest rate
contracts. Source One's total losses on its interest rate contracts, as of June
30, 1996, cannot exceed their original cost of $5.5 million.
Net gain on sales of mortgages increased to $11.4 million and $24.5 million for
the three and six month periods ended June 30, 1996, respectively, from $2.3
million and $5.7 million for the comparable 1995 periods, respectively. The
increases are primarily due to increased production and the related mortgage
loan sales volume during 1996 compared to 1995.
During the first quarter of 1995, Source One recognized a $28.2 million pretax
gain ($18.3 million after tax) resulting from the sale of $9.9 billion of its
mortgage servicing portfolio to a third party.
Investment Operations. Fund American's investment income is comprised primarily
of interest income earned on mortgage loans originated by Source One and by the
fixed maturity investments of its consolidated insurance operations. Investment
income increased to $29.6 million for the 1996 first half, from $27.2 million
for the comparable prior year period. Investment income increased to $15.4
million for the 1996 second quarter, from $14.3 million for 1995. The increases
are primarily due to additional fixed maturity investments resulting from the
acquisition of Valley and Charter.
-8-
Total net investment gains and losses, before tax, were as follows:
- --------------------------------------------------------------------------------
Six Months
Ended June 30,
-------------------
Millions 1996 1995
- --------------------------------------------------------------------------------
Net realized gains $ 29.7 $ 27.4
Net unrealized gains (losses) (1.4) 8.7
-------------------
Total net investment gains, before tax $ 28.3 $ 36.1
================================================================================
During the first quarter of 1996, Fund American sold all its holdings (2,042,572
shares) of the common stock of Zurich Reinsurance Centre Holdings, Inc. ("ZRC")
back to ZRC in a private transaction for net proceeds of $61.8 million. Fund
American also sold all its holdings (2,928,100 shares) of the common stock of
The Louisiana Land and Exploration Company ("LLX") in a series of open market
transactions for net proceeds of $125.1 million. The sales of ZRC and LLX
represented the majority of the $29.7 million of realized net investment gains
reported for the first half of 1996.
Expenses. Excluding the previously announced $46.2 million one-time
compensation charge related to outstanding employee stock warrants which was
included in the Company's second quarter 1995 income statement, compensation and
benefits expense increased $13.4 million to $47.9 million during the 1996 first
half versus the comparable 1995 period. The increase is primarily a result of
higher mortgage loan production volumes experienced by Source One during 1996
and the inclusion of Valley and Charter's personnel costs in the 1996
consolidated financial statements.
General expenses increased to $21.3 million and $41.2 million for the 1996
second quarter and year-to-date periods, respectively, versus $13.8 million and
$27.4 million for the comparable prior year periods. The increases are
primarily due to the inclusion of Valley and Charter's operations in the 1996
consolidated financial statements.
Liquidity and Capital Resources
Parent Company. On April 2, 1996 Fund American purchased 3,142,906 shares of the
common stock of Travelers-Aetna Property Casualty Corp. ("TAP") for $50.8
million, including related expenses. John J. Byrne, Fund American's Chairman
and Chief Executive Officer, recently became a director of TAP.
On June 18, 1996 the Company accepted for purchase 129,279 shares of its Common
Stock ("Shares") that had been tendered pursuant to its cash offer to purchase
up to 400,000 Shares at $80.00 per Share. Since June 30, 1996 the Company has
purchased 322,071 Shares for $26.4 million in a series of open market
transactions. All such Shares purchased have since been retired. Immediately
following these purchases, the Company had remaining authority to repurchase
17,379 Shares.
Prospectively, the primary sources of cash inflows for the Company will be
distributions received from its operating subsidiaries, sales of investment
securities and investment income.
White Mountains and subsidiaries. On June 19, 1996 White Mountains completed its
purchase, for $79.9 million including related expenses, of a 50% interest in
Folksamerica Holding Company, Inc. ("Folksamerica"). Also on June 19, 1996,
Folksamerica completed its previously announced acquisition of Christiania
General Insurance Corporation ("Christiania") of New York for $88.0 million.
Folksamerica is a multi-line broker-market reinsurance company which in 1995 had
net written premiums of $159.7 million. At June 30, 1996, following the
acquisition of Christiania, Folksamerica had $1.0 billion in total assets,
shareholders' equity of $154.4 million and total capitalization of $229.9
million.
-9-
White Mountains' investment in Folksamerica includes (i) 6,920,000 shares of
ten-year 6.5% voting preferred stock having a liquidation preference of $79.4
million and (ii) ten-year warrants to purchase up to 6,920,000 shares of
Folksamerica Common Stock for $11.47 per share, subject to certain adjustments.
Folksamerica reported a book value per share at June 30, 1996 of $11.16.
Source One. Source One's investments, mortgage loans held for sale and mortgage
loan servicing portfolio provide a liquidity reserve since they may be sold to
meet cash needs.
Source One's working capital requirements have historically been funded through
its revolving credit and commercial paper programs. These borrowings are used
to fund mortgage loan production until the sale of such mortgage loans in the
secondary market.
In the third quarter of 1996, Source One further utilized various derivative
financial instruments, including interest rate floors and principal-only swaps,
to mitigate the effect on earnings of higher amortization and impairment of the
capitalized servicing asset caused by changes in market interest rates. The
performance of these financial instruments is expected to have a material effect
on Fund American's future financial statements. Source One is expected to enter
into similar types of transactions to further reduce the sensitivity of its
earnings to changes in market interest rates.
-10-
Part II. OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 2. Changes in Securities
None.
Item 3. Defaults upon Senior Securities
None.
Item 4. Submission of Matters to a Vote by Security Holders
At the Company's 1996 Annual Meeting of shareholders, which was held on
May 16, 1996 in Hanover, New Hampshire, shareholders approved proposals
(as further described in the Company's 1996 Proxy Statement) calling
for the Election of Directors and the Appointment of Independent
Auditors. With respect to the Election of Directors, 4,678,736 votes
were cast in favor of the proposal and 56,344 votes were withheld. With
respect to the Appointment of Independent Auditors, 4,721,632 votes
were cast in favor of the proposal, 3,666 votes were cast against the
proposal and 9,782 votes abstained.
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
11 - Statement Re Computation of Per Share Earnings*
(b) Reports on Form 8-K
On June 28, 1996, the Company filed a Current Report on Form 8-K
announcing that on June 19, 1996,it purchased for $79.4 million a 50%
interest in Folksamerica Holding Company, Inc., parent company of
Folksamerica Reinsurance Company.
*Filed herewith.
-11-
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
FUND AMERICAN ENTERPRISES HOLDINGS, INC.
------------------------------------------
(Registrant)
Date: August 14, 1996 By: /s/
---------------------------------------
Michael S. Paquette
Vice President and Controller
-12-
EXHIBIT 11
FUND AMERICAN ENTERPRISES HOLDINGS, INC.
STATEMENT RE COMPUTATION OF PER SHARE EARNINGS
(in thousands, except per share earnings)
Unaudited
Three Months Ended Six Months Ended
June 30, June 30,
--------------------- ----------------------
1996 1995 1996 1995
--------- --------- --------- --------
Primary earnings per share:
Earnings per share numerator:
After tax earnings (loss) $ 3,466 $ (22,519) $ 32,300 $ 9,453
Preferred stock dividends - (1,641) - (3,281)
--------- --------- -------- --------
After tax earnings (loss) applicable to common stock 3,466 (24,160) 32,300 6,172
Tax benefit from sale of discontinued operations - 66,000 - 66,000
Loss on early extinguishment of debt, after tax - (227) - (400)
-------- --------- -------- --------
Net income for per share computation $ 3,466 $ 41,613 $ 32,300 $ 71,772
======== ========= ======== ========
Earnings per share denominator:
Average common shares outstanding 7,638 7,662 7,660 8,013
Dilutive options, warrants and performance shares 683 528 683 533
-------- --------- -------- --------
Shares for per share computation 8,321 8,190 8,343 8,546
======== ========= ======== ========
Primary earnings per share:
After tax earnings (loss) $ .42 $ (2.95) $ 3.87 $ .72
Net income .42 5.08 3.87 8.40
Fully diluted earnings per share
Earnings per share numerator:
After tax earnings (loss) $ 3,466 $ (22,519) $ 32,300 $ 9,453
Preferred stock dividends, if applicable - - - -
-------- --------- -------- --------
After tax earnings (loss) applicable to common stock 3,466 (22,519) 32,300 9,453
Tax benefit from sale of discontinued operations - 66,000 - 66,000
Loss on early extinguishment of debt, after tax - (227) - (400)
-------- --------- -------- --------
Net income for per share computation $ 3,466 $ 43,254 $ 32,300 $ 75,053
======== ========= ======== ========
Earnings per share denominator:
Average common shares outstanding 7,638 7,662 7,660 8,013
Dilution for options, warrants and performance shares 683 529 683 532
Dilution for preferred stock, if applicable - 1,054 - 1,051
-------- --------- -------- --------
Shares for per share computation 8,321 9,245 8,343 9,596
======== ========= ======== ========
Fully diluted earnings per share:
After tax earnings (loss) $ .42 $ (2.44) $ 3.87 $ .99
Net income .42 4.68 3.87 7.82
NOTE: The Voting Preferred Stock Series D is not a common stock equivalent.
5
1,000,000
6-MOS
DEC-31-1996
JAN-01-1996
JUN-30-1996
0
462
90
(14)
0
0
0
0
1,974
482
407
0
0
715
0
1,974
0
171
0
120
(30)
0
27
54
22
0
0
0
0
32
3.87
3.87
