<PAGE>
1
SECURITIES AND EXCHANGE COMMISSION
OF THE SECURITIES EXCHANGE ACT OF 1934
FORM 10 - Q
[X] Quarterly report pursuant to section 13 or 15(d) of the Securities
Exchange Act of 1934 for the quarterly period ended June 30, 1996 or
[ ] Transition report pursuant to section 13 or 15(d) of the Securities
Exchange Act of 1934
Commission File Number 0-4625
OLD REPUBLIC INTERNATIONAL CORPORATION
-----------------------------------------
(Exact name of registrant as specified in its charter)
Delaware No. 36-2678171
- ------------------------------- ---------------------------------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
307 North Michigan Avenue, Chicago, Illinois 60601
- -------------------------------------------------------------------------
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code: 312-346-8100
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 thepas 90 days. Yes _X_ No ___
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the close of the period covered by this report.
Shares Outstanding
Class June 30, 1996
--------------------------- --------------------------
Common Stock / $1 par value 86,544,575 *
* Excludes 6,658,901 common shares issued, outstanding and held by an
affiliate, which are classified as treasury stock for financial
accounting purposes only.
There are 12 pages contained in this report.
<PAGE>
2
OLD REPUBLIC INTERNATIONAL CORPORATION
Report on Form 10-Q / June 30, 1996
INDEX
- -------------------------------------------------------------------------
PAGE NO.
-----------
PART I FINANCIAL INFORMATION:
CONSOLIDATED SUMMARY BALANCE SHEETS 3
CONSOLIDATED SUMMARY STATEMENTS OF INCOME 4
CONSOLIDATED SUMMARY STATEMENTS OF CASH FLOWS 5
NOTES TO CONSOLIDATED SUMMARY FINANCIAL STATEMENTS 6
MANAGEMENT ANALYSIS OF FINANCIAL POSITION AND
RESULTS OF OPERATIONS 7 - 8
PART II OTHER INFORMATION 10 - 12
<PAGE>
3
<TABLE>
OLD REPUBLIC INTERNATIONAL CORPORATION
CONSOLIDATED SUMMARY BALANCE SHEETS (Unaudited)
($ in Millions)
- ---------------------------------------------------------------------------------------------------------------
June 30, December 31,
1996 1995
------------ ------------
Assets
<S> <C> <C>
Investments: Held to maturity:
Fixed maturity securities (at amortized cost)
(fair value: $1,802.5 and $1,759.0) $1,806.8 $1,714.1
Other long-term investments (at cost) 24.8 26.9
------------ ------------
Total 1,831.7 1,741.1
------------ ------------
Available for sale:
Fixed maturity securities (at fair value)
(cost: $2,001.3 and $2,068.9) 2,005.4 2,146.0
Equity securities (at fair value) (cost: $98.9 and $95.7) 138.6 126.1
Short-term investments (at fair value which approximates cost) 277.7 312.7
------------ ------------
Total 2,421.8 2,584.9
------------ ------------
Total investments 4,253.5 4,326.0
------------ ------------
Other Assets:Cash 25.9 19.4
Accrued investment income 72.9 69.7
Accounts and notes receivable 311.3 313.6
Reinsurance balances and funds held 118.7 125.1
Reinsurance recoverable: Paid losses 29.3 24.7
Policy and claim reserves 1,441.7 1,416.1
Deferred policy acquisition costs 107.3 107.8
Sundry assets 188.7 190.6
------------ ------------
2,296.2 2,267.4
------------ ------------
Total Assets $6,549.8 $6,593.5
============ ============
- --------------------------------------------------------------------------------------------------------------
Liabilities, Preferred Stock and
Common Shareholders' Equity
Liabilities: Future policy benefits $179.4 $186.0
Losses, claims and settlement expenses 3,579.1 3,519.8
Unearned premiums 389.9 406.7
Other policyholders' benefits and funds 66.8 75.4
------------ ------------
Total policy liabilities and accruals 4,215.4 4,188.0
Commissions, expenses, fees and taxes 104.7 110.3
Reinsurance balances and funds 160.9 169.3
Federal income tax payable: Current 10.9 11.5
Deferred 11.1 10.1
Debt and debt equivalents 119.3 320.5
Sundry liabilities 73.9 98.4
------------ ------------
Total liabilities 4,696.4 4,908.4
------------ ------------
Preferred Redeemable convertible preferred stock 19.6 17.0
Stock: Convertible preferred stock 1.0 0.6
Cumulative preferred stock 54.8 54.8
------------ ------------
Total preferred stock 75.5 72.5
------------ ------------
Common Common stock 95.6 58.8
Shareholders'Additional paid-in capital 570.7 463.4
Equity: Net unrealized appreciation of securities 28.3 70.3
Retained earnings 1,121.6 1,058.3
Treasury stock (at cost) (38.4) (38.4)
------------ ------------
Total Common Shareholders' Equity 1,777.9 1,612.5
------------ ------------
Total Liabilities, Preferred Stock
and Common Shareholders' Equity $6,549.8 $6,593.5
============ ============
</TABLE>
See accompanying notes.
<PAGE>
4
<TABLE>
OLD REPUBLIC INTERNATIONAL CORPORATION
CONSOLIDATED SUMMARY STATEMENTS OF INCOME (Unaudited)
($ in Millions, Except Common Share Data)
- -----------------------------------------------------------------------------------------------------------------
Quarters Ended Six Months Ended
June 30, June 30,
----------------------- -----------------------
1996 1995 1996 1995
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Revenues: Net premiums earned $341.7 $317.1 $661.9 $609.7
Title, escrow and other fees 40.6 29.4 74.3 53.2
Net investment income 63.9 62.4 129.5 123.6
Realized investment gains 1.3 1.9 7.1 5.7
Other income 5.5 5.8 11.3 10.3
----------- ----------- ----------- -----------
Net revenues 453.3 416.9 884.2 802.7
----------- ----------- ----------- -----------
Expenses: Benefits, claims and settlement expenses 193.6 201.1 376.1 371.6
Underwriting, acquisition and
insurance expenses 172.2 146.3 337.3 298.2
Interest and other expenses 3.7 6.7 9.9 13.5
----------- ----------- ----------- -----------
Total expenses 369.6 354.2 723.4 683.3
----------- ----------- ----------- -----------
Income before income taxes and items below 83.7 62.6 160.8 119.4
----------- ----------- ----------- -----------
Income Taxes: Currently payable 13.3 10.7 27.8 21.8
Deferred 13.7 9.4 23.4 16.7
----------- ----------- ----------- -----------
Total income taxes 27.0 20.2 51.2 38.5
----------- ----------- ----------- -----------
56.6 42.3 109.6 80.8
Other items - net 0.4 (0.3) 0.8 0.2
----------- ----------- ----------- -----------
Income before extraordinary item 57.0 42.0 110.5 81.0
Extraordinary item (net of tax credits
of $.6 and $2.4, respectively) (1.1) -- (4.4) --
----------- ----------- ----------- -----------
Net Income: $55.9 $42.0 $106.0 $81.0
=========== =========== =========== ===========
Earnings and
Dividends Per
Common Share: Primary Earnings:
Before extraordinary item $0.59 $0.48 $1.17 $0.92
Extraordinary item (0.01) --- (0.05) ---
----------- ----------- ----------- -----------
Net income $0.58 $0.48 $1.12 $0.92
=========== =========== =========== ===========
Fully Diluted Earnings:
Before extraordinary item $0.59 $0.45 $1.15 $0.87
Extraordinary item (0.01) --- (0.05) ---
----------- ----------- ----------- -----------
Net income $0.58 $0.45 $1.10 $0.87
=========== =========== =========== ===========
Cash dividends $0.110 $0.087 $0.197 $0.167
=========== =========== =========== ===========
Stock dividends --% --% 50% --%
=========== =========== =========== ===========
Average number of common and common
equivalent shares outstanding:
Primary 94,113,365 85,531,874 92,546,115 85,467,608
========== ========== ========== ==========
Fully Diluted 94,420,963 92,286,309 94,454,866 92,267,724
========== ========== ========== ==========
</TABLE>
See accompaning notes.
<PAGE>
5
<TABLE>
OLD REPUBLIC INTERNATIONAL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
($ in Millions)
- -----------------------------------------------------------------------------------------------------------------
Six Months Ended
June 30,
--------------------------
1996 1995
------------ ------------
<S> <C> <C>
Cash flows from operating activities:
Net income $106.0 $81.0
Change in non-cash items:
Deferred policy acquisition costs 0.9 (0.3)
Premiums and other receivables 9.3 (14.6)
Unpaid claims and related items 28.0 87.1
Future policy benefits and policyholders' funds (21.5) 1.1
Income taxes 21.5 22.1
Reinsurance balances and funds (5.9) 18.5
Accounts payable, accrued expenses and other (19.4) 0.8
------------ ------------
Total 118.9 195.9
------------ ------------
Cash flows from investing activities:
Sales of fixed maturity securities:
Held to maturity:
Maturities and early calls 52.5 59.2
Other --- ---
Available for sale:
Maturities and early calls 105.7 38.0
Other 47.5 35.0
Sales of equity securities 10.9 41.4
Sales of other investments 3.2 2.3
Sales of fixed assets for company use 1.0 1.6
Purchases of fixed maturity securities:
Held to maturity (144.9) (241.9)
Available for sale (87.3) (56.1)
Purchases of equity securities (13.7) (23.2)
Purchases of other investments (1.1) (2.4)
Purchases of fixed assets for company use (5.7) (3.0)
Purchases of investment in subsidiaries (1.0) ---
Other-net (6.9) 2.5
------------ ------------
Total (39.9) 146.4
------------ ------------
Cash flows from financing activities:
Increase in term loans 52.0 ---
Issuance of preferred and common stocks 12.2 1.4
Repayments of term loans (47.1) (8.5)
Redemption of debentures and notes (105.0) ---
Dividends on common shares (16.8) (13.0)
Dividends on preferred shares (3.9) (3.9)
Purchase of treasury stock --- (0.9)
Issuance of treasury stock --- 2.3
Other-net 1.2 0.3
------------ ------------
Total (107.4) (22.2)
------------ ------------
Increase (decrease) in cash and short-term investments (28.4) 27.2
Cash and short-term investments, beginning of period 332.1 203.3
------------ ------------
Cash and short-term investments, end of period $303.7 $230.5
------------ ------------
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest $10.4 $11.6
------------ ------------
Income taxes $28.4 $18.5
============ ============
</TABLE>
See accompanying notes.
<PAGE>
6
OLD REPUBLIC INTERNATIONAL CORPORATION
NOTES TO CONSOLIDATED SUMMARY FINANCIAL STATEMENTS (Unaudited)
($ in Millions, Except Share Data)
- -------------------------------------------------------------------------
1.Accounting Policies and Basis of Presentation:
----------------------------------------------
The accompanying consolidated summary financial statements have been
prepared in conformity with generally accepted accounting principles as
described in the Corporation's latest annual report to shareholders or
as disclosed herein. The financial accounting and reporting process
relies on estimates and on the exercise of judgement, but in the opinion
of management all adjustments, consisting of normal recurring accruals,
necessary to a fair presentation of the accompanying statements have
been reflected therein. Realized gains or losses on dispositions of
investment securities have been reflected in the operating results for
each period presented.
2.Common Share Data:
------------------
Earnings per share have been calculated on the basis of average common
and common equivalent shares outstanding for the quarters and six months
ended June 30, 1996 and 1995. Retroactive adjustment has been made for
all stock dividends and splits declared through June 30, 1996. Primary
earnings per share calculations give effect to the deduction of dividend
requirements applicable to preferred stock of $1.2 and $2.4 for the
quarters and six months ended June 30, 1996 and 1995, respectively.
Fully diluted earnings per share are similarly calculated, after taking
into account substantially all convertible securities and options
includable for each period.
Common shares outstanding were 86,544,575 at June 30, 1996 after
elimination of 6,658,901 shares issued and outstanding, which are held
by a consolidated affiliate. These shares are classified as treasury
stock for financial accounting purposes only.
3.Unrealized Appreciation of Investments:
---------------------------------------
Cumulative net unrealized gains on fixed maturity securities available
for sale and equity securities credited to a separate account in common
shareholders' equity amounted to $28.3 at June 30, 1996. Unrealized
appreciation of investments, before applicable income taxes of $15.9, at
June 30, 1996 included gross unrealized gains and (losses) of $66.4 and
$(22.1), respectively.
For the six months ended June 30, 1996 and 1995, net unrealized
appreciation (depreciation) of investments, net of deferred income
taxes, amounted to $(42.0) and $54.6, respectively.
<PAGE>
7
OLD REPUBLIC INTERNATIONAL CORPORATION
MANAGEMENT ANALYSIS OF FINANCIAL POSITION AND RESULTS OF OPERATIONS
Six Months Ended June 30, 1996 and 1995
- -------------------------------------------------------------------------
OVERVIEW
This analysis pertains to the consolidated accounts of Old Republic
International Corporation. The Company conducts its business through four
major segments, namely its General (property and liability coverages),
Mortgage Guaranty, Title, and Life insurance groups.
FINANCIAL POSITION
Old Republic's financial position at June 30, 1996 reflected decreases in
assets of 0.7%, liabilities of 4.3%, and an increase in common
shareholders' equity of 10.3% when compared to the immediately preceding
year-end. As indicated below, the largest changes in the liabilities and
equity accounts were due to debt redemptions and conversions. Cash and
invested assets represented 66.5% and 67.0% of consolidated assets as of
June 30, 1996 and December 31, 1995, respectively. Relatively high
short-term maturity investment positions continued to be maintained as of
June 30, 1996 to provide necessary liquidity for specific operating needs
and to enhance flexibility in investment strategy. Changes in short-term
investments reflect a large variety of seasonal and intermediate-term
factors including seasonal operating cash needs, investment strategy, and
expectations as to trends in interest yields. Accordingly, the future
level of short-term investments will vary and respond to the dynamics of
these factors and may, as a result, increase or decrease from current
levels. During the first six months of 1996, the Corporation committed
substantially all investable funds in short to intermediate-term fixed
maturity securities. Old Republic continues to adhere to its long-term
policy of investing primarily in investment grade, marketable securities;
the Corporation has not directed its investable funds to so-called "junk
bonds" or derivative types of securities. During the first six months of
1996, Old Republic's commitment to equity securities increased by 9.8%
vis-a-vis the related invested balance at year-end 1995. As of June 30,
1996, the carrying value of fixed maturity securities in default as to
principal or interest was immaterial in relation to consolidated assets or
shareholders' equity.
Consolidated operations produced positive cash flows in the first half of
1996. The parent holding company has met its liquidity and capital needs
principally through dividends paid by its subsidiaries. The insurance
subsidiaries' ability to pay cash dividends to the parent company is
generally restricted by law or subject to approval of the insurance
regulatory authorities of the states in which they are domiciled.
Additionally, the terms of guarantees by the Company of bank loans to the
trustee of the Company's Employees Savings and Stock Ownership Plan
require the Company to maintain a minimum consolidated tangible net worth
and restrict the amount of debt the Company may incur, both of which
covenants are being met.
Old Republic's capitalization of $1.97 billion at June 30, 1996 consisted
of debt and debt equivalents of $119.3 million, redeemable convertible
preferred stock of $19.6 million (excluding $8.8 million of such stock
classified as a debt equivalent), convertible preferred stock of $1.0
million, cumulative preferred stock of $54.8 million, and common
shareholders' equity of $1.77 billion. The increase in the common
shareholders' equity account during the six months ended June 30, 1996
reflects primarily the retention of earnings in excess of dividends
declared on outstanding preferred and common shares, and the issuance of
additional shares to effect the debt conversion noted below; this was
offset to some degree by a decline in the value of bonds and stocks
carried at market value. The Company's Board of Directors authorized the
reacquisition of up to $150.0 million of common and preferred shares at
their May 16, 1996 meeting.
In February 1996, the Company called for redemption its 10% debentures of
2018 ($75.0 million principal amount) and its 5.75% convertible
subordinated debentures of 2002 ($110.0 million principal amount); in
April 1996, the Company called for redemption its 11.5% debentures of 2015
($30.0 million principal amount); redemption of the debentures was
effected with available funds, while the subordinated debentures were
converted into approximately 6.4 million Old Republic common shares. As
a result of these redemptions and conversions, the Company's debt declined
by $215.0 million while its common shareholders' equity account rose by
$108.7 million. Later in 1996, the Company may, at its sole option, redeem
all or part of approximately $54.8 million of its Series "H" cumulative
preferred stock.
At its March 14, 1996 meeting, the Company's Board of Directors declared
a 50 percent stock dividend on its common shares. Retroactive adjustment
has been made for the stock dividend in all per share calculations.
RESULTS OF OPERATIONS
Revenues:
Net premiums and fees earned in the first half of 1996 amounted to $736.2
million and were 11.0% above the amount reported for the first half of
1995. For the second quarter of 1996, net premiums and fees earned
amounted to $382.4 million and were 10.4% above the amount reported for
the second quarter of 1995. For the second quarter of 1996, the Company's
General Insurance Group
<PAGE>
8
posted a 1.6% decrease in earned premiums to $223.1 million as premium
growth continues at a slow pace due to soft pricing in this sector of the
insurance industry. Premium growth in the Mortgage Guaranty Group was
enhanced by continued expansion of the marketing territory and from higher
volume driven by reasonably stable mortgage rates; as a result, earned
premiums increased by 36.5% to $54.9 million from $40.2 million in the
year-ago quarter. Title Group premium and fee revenues increased by 36.0%
to $93.9 million in the second quarter of 1996 when compared to $69.0
million in the same quarter of 1995; greater housing and mortgage finance
and refinance activity were the drivers of these revenue trends. The Life
Group earned premiums were approximately the same in the second quarter of
1996 and 1995.
The General Insurance Group's net premiums earned increased 0.3% to $428.3
million in the first half of 1996. The Title Insurance Group reported
premiums and fees in the first half of $177.6 million, up from $136.2
million in the year-ago period, while the Mortgage Guaranty Group
continued to experience double-digit growth in production and reported net
premiums earned of $106.2 million, an increase of 34.9%. Life and health
premiums also rose during these 1996 periods, but remained approximately
3% of consolidated premiums and fees.
Consolidated net investment income was $129.5 million in the first half of
1996 and $63.9 million in the second quarter of 1996 compared to $123.6
million and $62.4, respectively in the same quarter and six month period
of 1995. The growth in this revenue reflects lower operating cash flow and
the use of certain internal funds to refund $105.0 million of high cost
debt in the first six months of 1996. Equities made up about 3.3% of
total investments at the end of the first half of 1996 compared to 7.0%
one year ago. The average annualized yield on investments was
approximately 6.0% and 6.3% at the end of June 30, 1996 and 1995,
respectively. In the past eighteen months the Company has committed a
larger percentage of investable funds to tax-exempt fixed maturity
securities.
The Company's investment policies have not been designed to maximize
realized investment gains. Realized gains of $7.1 million in the first
six months of 1996 were mostly due to the sale of equity securities. For
the first six months of 1996, approximately 77% of total dispositions
represented maturities and early calls of existing holdings; for the year
1995 these transactions amounted to approximately 59%.
Expenses:
Consolidated benefit, claim and settlement costs, as a percentage of net
premiums and fees earned, were approximately 51% and 56% in the first six
months of 1996 and 1995, respectively. For the second quarter of each
year these ratios were 51% in 1996 and 58% in 1995. Claims experience for
property and liability coverages improved slightly in both periods due
mostly to reduced losses from involuntary pool assessments as well as
reduced claim frequencies and severity. Mortgage Guaranty claim costs
increased in the second quarter and first half of 1996, when compared to
the same periods of 1995, because of a higher default rate in several
recent quarters. Title insurance claim provisions were much lower in the
second quarter and first six months of 1996 as a result of a continuing
drop in claim frequencies and severity on business underwritten since
1992. Life Group claim costs were basically stable in both quarterly and
six month periods.
The ratio of consolidated underwriting, acquisition and insurance expenses
to net premiums and fees earned was 46% and 45% in the first six months of
1996 and 1995, respectively. These ratios were 45% and 42% for the second
quarters of 1996 and 1995, respectively. Variations in these percentages
between comparative periods typically reflect changing patterns in the mix
of business and the varying production costs pertaining thereto.
Income from Operations and Net Income:
Income from operations before realized investment gains, taxes and other
items increased by 35.9% in the second quarter and 35.2% in the first six
months of 1996 when compared to the same periods one year ago. The
Corporation's General and Mortgage Guaranty insurance segments reflected
higher pre-tax operating earnings, and the Life segment reported lower
pre-tax earnings from operations. The Title insurance segment posted pre-
tax operating earnings for the first half and second quarter of 1996 while
posting a pre-tax operating loss in the same periods of 1995 for the
aforementioned reasons.
The effective consolidated income tax rate was 32% in the first six months
of 1996 and 1995, respectively, as well as in the second quarters of both
1996 and 1995. The rates for each period reflect primarily the varying
proportions of pre-tax operating income derived from tax-sheltered
investment income (principally tax-exempt interest) on the one hand, and
fully taxable investment and underwriting/service income on the other
hand.
The aforementioned early retirement of the Company's 10% debentures of
2018 produced a net of tax charge of $3.3 million (4 cents per share) that
has been reflected as an extraordinary item in this year's first quarter
while the retirement of the Company's 11.5% debentures of 2015 produced an
additional net of tax charge of $1.1 million (1 cent per share) that has
been reflected as an extraordinary item in this year's second quarter.
<PAGE>
9
OTHER INFORMATION
Historical data pertaining to the operating results, liquidity, and other
financial matters applicable to an insurance enterprise such as the
Company are not necessarily indicative of results to be achieved in
succeeding years. The long-term nature of the insurance business, seasonal
and annual patterns in premium production and incidence of claims, changes
in yields obtained on invested assets, changes in government policies and
free markets affecting inflation rates and general economic conditions,
and changes in legal precedents or the application of law affecting the
settlement of disputed claims are some of the factors which have a bearing
on quarter-to-quarter and year-to-year comparisons and future operating
results.
<PAGE>
10
OLD REPUBLIC INTERNATIONAL CORPORATION
FORM 10 - Q
PART II - OTHER INFORMATION
- --------------------------------------------------------------------------
Item 4 - Submission of Matters to a Vote of Security Holders
- ------------------------------------------------------------
(a) The annual meeting of registrant's shareholders was held on May 24,
1996.
(b) Proxies for the meeting were solicited by management pursuant to
Regulation 14A under the Security Exchange Act of 1934. There was no
solicitation in opposition to management's nominees for directors
as listed in the proxy statement and all such nominees were elected.
(c) At the meeting, the shareholders voted on the following matters:
1. The election of four Class III directors. There were at least
77,033,512 affirmative votes for each director and no more than
1,737,363 votes withheld.
Item 6 - Exhibits and reports on Form 8-K
- -----------------------------------------
(a) Exhibits
1. Earnings per share.
(b) Reports on Form 8-K
1. The registrant has not filed any reports on Form 8-K during the
quarter for which this report is filed.
Items other than those listed are omitted because they are not required.
<PAGE>
11
SIGNATURE
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.
Old Republic International Corporation
--------------------------------------
(Registrant)
Date: August 12, 1996
-----------------
/s/ P. D. Adams
-----------------------------------
P. D. Adams
Senior Vice President &
Chief Financial Officer
<PAGE>
12
<TABLE>
OLD REPUBLIC INTERNATIONAL CORPORATION
EARNINGS PER SHARE EXHIBIT
(Amounts in millions, except per share data)
- ----------------------------------------------------------------------------------------------------------------
Computation of Primary Earnings Per Share
-------------------------------------------------
Quarters Ended Six Months Ended
June 30, June 30
---------------------- ----------------------
1996 1995 1996 1995
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Weighted average number of common shares outstanding 86.5 77.6 84.9 77.6
Add: Weighted average number of assumed common shares to
be issued upon conversion or exercise of:
Redeemable and/or Convertible Preferred Stock 6.8 6.8 6.8 7.4
Stock Options 0.7 0.5 0.7 0.5
---------- ---------- ---------- ----------
Weighted average number of common and common equivalent share 94.1 85.5 92.5 85.4
========== ========== ========== ==========
Net income for the period $55.9 $42.0 $106.0 $81.0
Less dividends applicable to appropriate Series of
Redeemable and Convertible Preferred Stock 1.2 1.2 2.4 2.4
---------- ---------- ---------- ----------
Adjusted net income $54.7 $40.7 $103.5 $78.5
========== ========== ========== ==========
Primary earnings per share $0.58 $0.48 $1.12 $0.92
========== ========== ========== ===========
--------------------------------------------------------------------------------------------------------------
Computation of Fully Diluted Earnings Per Share
-------------------------------------------------
Quarters Ended Six Months Ended
June 30, June 30
---------------------- ----------------------
1996 1995 1996 1995
---------- ---------- ---------- ----------
Weighted average number of common shares outstanding 86.5 77.6 84.9 77.6
Add: Weighted average number of assumed common shares to
be issued upon conversion or exercise of:
Redeemable and/or Convertible Preferred Stock 7.0 7.5 7.0 7.5
Convertible Subordinated Debentures --- 6.3 1.5 6.3
Stock Options 0.8 0.6 0.9 0.6
---------- ---------- ---------- ----------
Weighted average number of common and common equivalent share 94.4 92.3 94.4 92.3
========== ========== ========== ==========
Net income for the period $55.9 $42.0 $106.0 $81.0
Less dividends applicable to appropriate Series of
Cumulative Preferred Stock 1.1 1.1 2.5 2.3
Plus interest applicable to Convertible Debentures --- 1.0 0.4 2.0
---------- ---------- ---------- ----------
Adjusted net income $54.7 $41.8 $104.0 $80.7
========== ========== ========== ==========
Fully diluted earnings per share $0.58 $0.45 $1.10 $0.87
========== ========== ========== ==========
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 7
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM OLD REPUBLIC INTERNATIONAL'S CONSOLIDATED BALANCE SHEET
AND CONSOLIDATED STATEMENT OF INCOME AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1000000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<DEBT-HELD-FOR-SALE> 2,005
<DEBT-CARRYING-VALUE> 1,806
<DEBT-MARKET-VALUE> 1,802
<EQUITIES> 138
<MORTGAGE> 9
<REAL-ESTATE> 0
<TOTAL-INVEST> 4,253
<CASH> 25
<RECOVER-REINSURE> 29
<DEFERRED-ACQUISITION> 107
<TOTAL-ASSETS> 6,549
<POLICY-LOSSES> 3,758
<UNEARNED-PREMIUMS> 389
<POLICY-OTHER> 0
<POLICY-HOLDER-FUNDS> 66
<NOTES-PAYABLE> 119
19
55
<COMMON> 95
<OTHER-SE> 1,682
<TOTAL-LIABILITY-AND-EQUITY> 6,549
661
<INVESTMENT-INCOME> 129
<INVESTMENT-GAINS> 7
<OTHER-INCOME> 85
<BENEFITS> 376
<UNDERWRITING-AMORTIZATION> 93
<UNDERWRITING-OTHER> 254
<INCOME-PRETAX> 160
<INCOME-TAX> 51
<INCOME-CONTINUING> 110
<DISCONTINUED> 0
<EXTRAORDINARY> (4)
<CHANGES> 0
<NET-INCOME> 106
<EPS-PRIMARY> 1.12
<EPS-DILUTED> 1.10
<RESERVE-OPEN> 0
<PROVISION-CURRENT> 0
<PROVISION-PRIOR> 0
<PAYMENTS-CURRENT> 0
<PAYMENTS-PRIOR> 0
<RESERVE-CLOSE> 0
<CUMULATIVE-DEFICIENCY> 0
</TABLE>
