2015 Q3 Form 10-Q Financial Statement

#000092262115000048 Filed on October 29, 2015

View on sec.gov

Income Statement

Concept 2015 Q3 2014 Q3
Revenue $396.6M $369.6M
YoY Change 7.3% -76.56%
Cost Of Revenue $939.0M $935.0M
YoY Change 0.43% 7.72%
Gross Profit -$542.4M -$565.4M
YoY Change -4.07% -179.74%
Gross Profit Margin -136.74% -152.95%
Selling, General & Admin $58.30M $341.0M
YoY Change -82.9% 9.65%
% of Gross Profit
Research & Development
YoY Change
% of Gross Profit
Depreciation & Amortization
YoY Change
% of Gross Profit
Operating Expenses $328.3M $308.6M
YoY Change 6.42% -86.91%
Operating Profit $68.29M -$873.9M
YoY Change -107.81% -47.0%
Interest Expense $7.700M $149.0M
YoY Change -94.83% 2.05%
% of Operating Profit 11.28%
Other Income/Expense, Net
YoY Change
Pretax Income $75.51M $68.69M
YoY Change 9.92% -82.74%
Income Tax $25.95M $42.00M
% Of Pretax Income 34.36% 61.14%
Net Earnings $49.56M $46.90M
YoY Change 5.68% 1.96%
Net Earnings / Revenue 12.5% 12.69%
Basic Earnings Per Share
Diluted Earnings Per Share $943.0K $803.4K
COMMON SHARES
Basic Shares Outstanding
Diluted Shares Outstanding

Balance Sheet

Concept 2015 Q3 2014 Q3
SHORT-TERM ASSETS
Cash & Short-Term Investments $618.0M $379.0M
YoY Change 63.06% -29.16%
Cash & Equivalents $122.1M $379.0M
Short-Term Investments
Other Short-Term Assets
YoY Change
Inventory
Prepaid Expenses
Receivables
Other Receivables
Total Short-Term Assets $618.0M $379.0M
YoY Change 63.06% -29.16%
LONG-TERM ASSETS
Property, Plant & Equipment
YoY Change
Goodwill
YoY Change
Intangibles
YoY Change
Long-Term Investments $927.0M $1.073B
YoY Change -13.61% -5.63%
Other Assets $1.430B $1.250B
YoY Change 14.4% 1.96%
Total Long-Term Assets $17.50B $17.20B
YoY Change 1.73% 8.52%
TOTAL ASSETS
Total Short-Term Assets $618.0M $379.0M
Total Long-Term Assets $17.50B $17.20B
Total Assets $18.12B $17.58B
YoY Change 3.05% 7.29%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable
YoY Change
Accrued Expenses
YoY Change
Deferred Revenue
YoY Change
Short-Term Debt $0.00 $0.00
YoY Change
Long-Term Debt Due
YoY Change
Total Short-Term Liabilities $8.880B $8.630B
YoY Change 2.9% 6.28%
LONG-TERM LIABILITIES
Long-Term Debt $0.00 $0.00
YoY Change
Other Long-Term Liabilities $827.0M $647.0M
YoY Change 27.82% -7.17%
Total Long-Term Liabilities $827.0M $647.0M
YoY Change 27.82% -7.17%
TOTAL LIABILITIES
Total Short-Term Liabilities $8.880B $8.630B
Total Long-Term Liabilities $827.0M $647.0M
Total Liabilities $9.990B $9.742B
YoY Change 2.55% 6.06%
SHAREHOLDERS EQUITY
Retained Earnings
YoY Change
Common Stock
YoY Change
Preferred Stock
YoY Change
Treasury Stock (at cost)
YoY Change
Treasury Stock Shares
Shareholders Equity $750.0M $771.0M
YoY Change
Total Liabilities & Shareholders Equity $18.12B $17.58B
YoY Change 3.05% 7.29%

Cashflow Statement

Concept 2015 Q3 2014 Q3
OPERATING ACTIVITIES
Net Income $49.56M $46.90M
YoY Change 5.68% 1.96%
Depreciation, Depletion And Amortization
YoY Change
Cash From Operating Activities $89.10M $304.0M
YoY Change -70.69% -15.32%
INVESTING ACTIVITIES
Capital Expenditures -$1.900M -$12.00M
YoY Change -84.17% 140.0%
Acquisitions
YoY Change
Other Investing Activities -$10.00M -$189.0M
YoY Change -94.71% 19.62%
Cash From Investing Activities -$11.90M -$201.0M
YoY Change -94.08% 23.31%
FINANCING ACTIVITIES
Cash Dividend Paid
YoY Change
Common Stock Issuance & Retirement, Net
YoY Change
Debt Paid & Issued, Net
YoY Change
Cash From Financing Activities -31.70M -24.00M
YoY Change 32.08% -7.69%
NET CHANGE
Cash From Operating Activities 89.10M 304.0M
Cash From Investing Activities -11.90M -201.0M
Cash From Financing Activities -31.70M -24.00M
Net Change In Cash 45.50M 79.00M
YoY Change -42.41% -53.53%
FREE CASH FLOW
Cash From Operating Activities $89.10M $304.0M
Capital Expenditures -$1.900M -$12.00M
Free Cash Flow $91.00M $316.0M
YoY Change -71.2% -13.19%

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us-gaap Payments For Repurchase Of Common Stock
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us-gaap Nature Of Operations
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<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">Note 1.&#160; Nature of Operations</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Erie Indemnity Company (&#8220;Indemnity&#8221;) is a publicly held Pennsylvania business corporation that has since its incorporation in 1925 served as the attorney-in-fact for the subscribers (policyholders) at the Erie Insurance Exchange (&#8220;Exchange&#8221;).&#160; The Exchange, which also commenced business in 1925, is a Pennsylvania-domiciled reciprocal insurer that writes property and casualty insurance.</font></div><div style="line-height:120%;font-size:8pt;"><font style="font-family:inherit;font-size:8pt;">&#160;</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Indemnity&#8217;s primary function, as attorney-in-fact, is to perform certain services for the Exchange relating to the sales, underwriting and issuance of policies on behalf of the Exchange.&#160; This is done in accordance with a subscriber&#8217;s agreement (a limited power of attorney) executed individually by each subscriber (policyholder), which appoints Indemnity as their common attorney-in-fact to transact certain business on their behalf and to manage the affairs of the Exchange.&#160; Pursuant to the subscriber&#8217;s agreement and for its services as attorney-in-fact,&#160;Indemnity earns a management fee calculated as a percentage of the direct premiums written by the Exchange and the other members of the Property and Casualty Group (defined below), which are assumed by the Exchange under an intercompany pooling arrangement.</font></div><div style="line-height:120%;font-size:8pt;"><font style="font-family:inherit;font-size:8pt;">&#160;</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Indemnity has the power to direct the activities of the Exchange that most significantly impact the Exchange&#8217;s economic performance by acting as the common attorney-in-fact and decision maker for the subscribers (policyholders) at the Exchange.</font></div><div style="line-height:120%;font-size:8pt;"><font style="font-family:inherit;font-size:8pt;">&#160;</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The Exchange, together with its wholly owned subsidiaries, Erie Insurance Company (&#8220;EIC&#8221;), Erie Insurance Company of New York (&#8220;ENY&#8221;), Erie Insurance Property and Casualty Company (&#8220;EPC&#8221;), and Flagship City Insurance Company (&#8220;Flagship&#8221;), operate as a property and casualty insurer and are collectively referred to as the &#8220;Property and Casualty Group&#8221;.&#160; The Property and Casualty Group operates in </font><font style="font-family:inherit;font-size:10pt;">12</font><font style="font-family:inherit;font-size:10pt;"> Midwestern, Mid-Atlantic and Southeastern states and the District of Columbia.</font></div><div style="line-height:120%;font-size:8pt;"><font style="font-family:inherit;font-size:8pt;">&#160;</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Erie Family Life Insurance Company (&#8220;EFL&#8221;), a wholly owned subsidiary of the Exchange, operates as a life insurer that underwrites and sells individual and group life insurance policies and fixed annuities.</font></div><div style="line-height:120%;font-size:8pt;"><font style="font-family:inherit;font-size:8pt;">&#160;</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">All property and casualty and life insurance operations are owned by the Exchange and Indemnity functions solely as the management company.</font></div><div style="line-height:120%;font-size:8pt;"><font style="font-family:inherit;font-size:8pt;">&#160;</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The consolidated financial statements of Erie Indemnity Company reflect the results of Indemnity and its variable interest entity, the Exchange, which we refer to collectively as the &#8220;Erie Insurance Group&#8221; 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us-gaap Use Of Estimates
UseOfEstimates
<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;text-decoration:underline;">Use of estimates</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.&#160; Actual results could differ from those estimates.</font></div><div style="line-height:120%;font-size:8pt;"><font style="font-family:inherit;font-size:8pt;">&#160;</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of our financial position, results of operations, and cash flows for the interim periods have been included.&#160; Operating results for the </font><font style="font-family:inherit;font-size:10pt;">nine months</font><font style="font-family:inherit;font-size:10pt;"> ended </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">September&#160;30, 2015</font><font style="font-family:inherit;font-size:10pt;"> are not necessarily indicative of the results that may be expected for the year ended </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">December&#160;31, 2015</font><font style="font-family:inherit;font-size:10pt;">.&#160; The accompanying consolidated financial statements and notes should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form&#160;10-K for the year ended </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">December&#160;31, 2014</font><font style="font-family:inherit;font-size:10pt;"> as filed with the Securities and Exchange Commission on </font><font style="font-family:inherit;font-size:10pt;">February&#160;26, 2015</font><font style="font-family:inherit;font-size:10pt;">.</font></div></div>

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