Erie Indemnity Reports Fourth Quarter and Total Year 2012 Results

      Erie Indemnity Reports Fourth Quarter and Total Year 2012 Results

PR Newswire

ERIE, Pa., Feb. 26, 2013

ERIE, Pa., Feb. 26, 2013 /PRNewswire-FirstCall/ --

4Q 2012 Highlights - Indemnity Shareholder Interest
  oNet income attributable to Indemnity per share-diluted was $0.56 per share
    in the fourth quarter of 2012, compared to net income per share-diluted of
    $0.49 per share in the fourth quarter of 2011.
  oOperating income attributable to Indemnity per share-diluted (excluding
    net realized gains or losses, impairments on investments and related
    taxes) was $0.54 per share in the fourth quarter of 2012, compared to
    operating income per share-diluted of $0.47 per share in the fourth
    quarter of 2011.
  oIndemnity's management operations pretax income totaled $34 million in
    both the fourth quarters of 2012 and 2011. The gross margin from
    management operations was 12.2 percent in the fourth quarter of 2012,
    compared to 13.0 percent in the fourth quarter of 2011.
  oIndemnity's investment operations pretax income totaled $10 million for
    the fourth quarter of 2012, compared to $7 million for the fourth quarter
    of 2011.

2012 Highlights - Indemnity Shareholder Interest
  oNet income attributable to Indemnity per share-diluted was $2.99 per share
    for the year ended December31, 2012, compared to net income per
    share-diluted of $3.08 per share for the year ended December31, 2011.
  oOperating income attributable to Indemnity per share-diluted (excluding
    net realized gains or losses, impairments on investments and related
    taxes) was $2.92 per share for the year ended December31, 2012, compared
    to $3.04 per share-diluted for the year ended December31, 2011.
  oIndemnity's management operations pretax income totaled $205 million for
    the year ended December31, 2012, compared to $208 million for the year
    ended December31, 2011. The gross margin from management operations was
    17.3 percent for the year ended December31, 2012, compared to 18.9
    percent for the year ended December31, 2011.
  oIndemnity's investment operations pretax income totaled $36 million for
    the year ended December31, 2012, compared to $45 million for the year
    ended December31, 2011.

Erie Indemnity Company (NASDAQ: ERIE) today announced fourth quarter 2012
earnings of $30 million, compared to earnings of $26 million in the fourth
quarter of 2011. Operating income was $29 million in the fourth quarter of
2012, compared to operating income of $25 million in the fourth quarter of
2011.

(Logo: http://photos.prnewswire.com/prnh/20041112/ERIELOGO )

For the year ended December31, 2012, Erie Indemnity Company's earnings
totaled $160 million, compared to earnings of $169 million for the year ended
December31, 2011. Operating income was $157 million for the year ended
December31, 2012, compared to operating income of $167 million or the year
ended December31, 2011.

Note: The accompanying consolidated financial statements of Erie Indemnity
Company ("Indemnity") reflect the consolidated results of Indemnity and the
Erie Insurance Exchange ("Exchange"), which we refer to collectively as the
"Erie Insurance Group." Indemnity, or Indemnity shareholder interest, refers
to the interest in Erie Indemnity Company owned by the Class A and Class B
shareholders. The Exchange refers to the noncontrolling interest held for the
interest of the subscribers (policyholders), and includes its interest in its
property and casualty subsidiaries and Erie Family Life Insurance Company
("EFL").

The following tables show the consolidated results of the Erie Insurance Group
by operating segment for the fourth quarter of 2012.

4Q 2012 Highlights - Indemnity Shareholder Interest
Results of the Erie Insurance Group's Operations
                      Indemnity  Noncontrolling Elimination of  Erie
                                                                 Insurance
                      shareholder interest       related party
                                                                 Group
                      interest    (Exchange)     transactions
(dollars in millions) 4Q'12 4Q'11 4Q'12   4Q'11  4Q'12   4Q'11   4Q'12  4Q'11
Management operations $ 34  $ 34  $  —    $ —    $ (26)  $ (26)  $ 8    $ 8
Property and casualty —     —     (61)    68     30      30      (31)   98
insurance operations
Life insurance        —     —     12      12     (1)     (1)     11     11
operations
Investment operations 10    7     170     304    (3)     (3)     177    308
Income from
operations before
income
                      44    41    121     384    —       —       165    425
taxes and
noncontrolling
interest
Provision for income  14    15    32      129    —       —       46     144
taxes
Net income            $ 30  $ 26  $  89   $ 255  $ —     $ —     $ 119  $ 281



Management Operations
                  Indemnity      Noncontrolling Elimination of
                                                                   Erie
                  shareholder     interest       related party     Insurance
                                                                   Group
                  interest        (Exchange)     transactions
(dollars in       4Q'12   4Q'11   4Q'12    4Q'11 4Q'12    4Q'11    4Q'12 4Q'11
millions)
Management fee    $ 275   $ 251   $   —    $  —  $ (275)  $ (251)  $  —  $  —
revenue, net
Service agreement 8       8       —        —     —        —        8     8
revenue
Total revenue
from management   283     259     —        —     (275)    (251)    8     8
operations
Cost of
management        249     225     —        —     (249)    (225)    —     —
operations
Income from
management
operations        $ 34    $ 34    $   —    $  —  $ (26)   $ (26)   $  8  $  8

before taxes
Gross margin      12.2  % 13.0  %

  oThe management fee rate was 25 percent for both the fourth quarters of
    2012 and 2011. Direct written premium of the property and casualty
    insurance operations, upon which the management fee is calculated,
    increased 9.9 percent in the fourth quarter of 2012, due to a 3.9 percent
    increase in policies in force and a 4.3 percent increase in the
    year-over-year average premium per policy for all lines of business at
    December31, 2012.
  oCommissions increased $18 million in the fourth quarter of 2012, compared
    to the fourth quarter of 2011, primarily as a result of the 9.9 percent
    increase in direct written premium of the property and casualty insurance
    operations, combined with a slight increase in other agent bonuses and
    incentives.
  oNon-commission expense increased $6 million in the fourth quarter of 2012,
    compared to the fourth quarter of 2011. Sales, policy issuance,
    advertising, and underwriting costs increased $3 million. Information
    technology costs increased $1 million, which included an increase of $3
    million in software costs offset by a $2 million decrease in professional
    fees. Personnel and all other operating costs, excluding information
    technology related costs, increased $2 million as a result of a $1 million
    increase related to higher staffing levels and a $2 million increase in
    pension and medical costs, offset by a $1 million decrease in incentive
    plan compensation.

Property and Casualty Insurance Operations *
              Indemnity                      Elimination of
                          Noncontrolling                     Erie
              shareholder                     related party  Insurance
                          interest (Exchange)                Group
              interest                        transactions
(dollars in   4Q'12 4Q'11 4Q'12     4Q'11     4Q'12    4Q'11 4Q'12    4Q'11
millions)
Net premiums  $  —  $  —  $ 1,143   $ 1,060   $  —     $ —   $ 1,143  $ 1,060
earned
Losses and    —     —     883       696       (1)      (1)   882      695
loss expenses
Policy
acquisition
and other     —     —     321       296       (29)     (29)  292      267
underwriting
expenses
Total losses  —     —     1,204     992       (30)     (30)  1,174    962
and expenses
(Loss) income
from property
and casualty
              $  —  $  —  $ (61)    $ 68      $  30    $ 30  $ (31)   $ 98
 insurance
operations
before taxes
Combined      —     —     105.5   % 93.5    %
ratio

* All property and casualty insurance underwriting results accrue to the
interest of the subscribers (policyholders) of the Exchange, or noncontrolling
interest.

Life Insurance Operations *
                    Indemnity                      Elimination of
                                Noncontrolling                     Erie
                    shareholder                     related party  Insurance
                                interest (Exchange)                Group
                    interest                        transactions
(dollars in         4Q'12 4Q'11 4Q'12      4Q'11    4Q'12   4Q'11  4Q'12 4Q'11
millions)
Total revenue       $  —  $  —  $   45     $  43    $  (1)  $ (1)  $ 44  $ 42
Total benefits and  —     —     33         31       0       0      33    31
expenses
Income from life
insurance
operations          $  —  $  —  $   12     $  12    $  (1)  $ (1)  $ 11  $ 11

before taxes

* All life insurance underwriting results accrue to the interest of the
subscribers (policyholders) of the Exchange, or noncontrolling interest.

Investment Operations
                        Indemnity  Noncontrolling Elimination of
                                                                  Erie
                        shareholder interest      related party  Insurance
                                    (Exchange)                    Group
                        interest                   transactions
(dollars in millions)   4Q'12 4Q'11 4Q'12   4Q'11  4Q'12   4Q'11  4Q'12 4Q'11
Net investment income   $ 4   $  4  $  87   $ 83   $  (3)  $ (3)  $ 88  $ 84
Net realized gains on   1     2     56      227    —       —      57    229
investments
Net impairment losses
recognized in           0     0     0       (1)    —       —      0     (1)

earnings
Equity in earnings
(losses) of limited     5     1     27      (5)    —       —      32    (4)

 partnerships
Income from investment  $ 10  $  7  $170    $ 304  $  (3)  $ (3)  $177  $ 308
operations before taxes

  oIncome from investment operations before taxes increased to $10 million in
    the fourth quarter of 2012, from $7 million in the fourth quarter of 2011,
    due to a $4 million increase in equity in earnings of limited
    partnerships, offset by a $1 million decrease in net realized gains on
    investments.

The following table shows the consolidated results of the Erie Insurance Group
by operating segment for the year ended December31, 2012.

2012 Highlights - Indemnity Shareholder Interest
Results of the Erie Insurance Group's Operations *
                  Indemnity    Noncontrolling Elimination of
                                                                 Erie
                  shareholder   interest       related party     Insurance
                                                                 Group
                  interest      (Exchange)     transactions
(dollars in       2012   2011   2012    2011   2012     2011     2012   2011
millions)
Management        $ 205  $ 208  $  —    $  —   $ (174)  $ (175)  $ 31   $ 33
operations
Property and
casualty          —      —      (246)   (378)  187      188      (59)   (190)
insurance
operations
Life insurance    —      3      46      47     (2)      (2)      44     48
operations
Investment        36     45     858     433    (11)     (11)     883    467
operations
Income from
operations before
income
                  241    256    658     102    —        —        899    358
taxes and
noncontrolling
interest
Provision for     81     87     199     3      —        —        280    90
income taxes
Net income        $ 160  $ 169  $  459  $  99  $ —      $ —      $ 619  $ 268

* Prior to and through March31, 2011,Indemnity retained a 21.6% ownership
interest in EFL, which accrued to the Indemnity shareholder interest, and the
Exchange retained a 78.4% ownership interest in EFL, which accrued to the
interest of the subscribers (policyholders) of the Exchange, or noncontrolling
interest. Due to the sale of Indemnity's 21.6% ownership interest in EFL to
the Exchange on March31, 2011, 100% of EFL's life insurance results accrue to
the interest of the subscribers (policyholders) of the Exchange, or
noncontrolling interest, after March31, 2011.

Share Repurchase Program

In the fourth quarter of 2012, we repurchased 234,837 shares of our
outstanding Class A nonvoting common stock at a total cost of $16 million in
conjunction with our current stock repurchase program. For the year through
February15, 2013, we repurchased 134,245 shares under this program at a total
cost of $10 million. In October2011, our Board of Directors approved a
continuation of the current stock repurchase program for a total of $150
million, with no time limitation. This repurchase authority included, and was
not in addition to, any unspent amounts remaining under the prior
authorization. As of February15, 2013, we had approximately $59 million in
repurchase authority remaining under the program.

According to A.M. Best Company, Erie Insurance Group, based in Erie,
Pennsylvania, is the 15^th largest homeowners insurer and 12^th largest
automobile insurer in the United States based on direct premiums written and
the 20^th largest property/casualty insurer in the United States based on
total lines net premium written. The Group, rated A+ (Superior) by A.M. Best
Company, has more than 4.5 million policies in force and operates in 11 states
and the District of Columbia. Erie Insurance Group is a FORTUNE 500 company.
Erie Insurance is proud to be named a J.D. Power and Associates' 2012 Customer
Service Champion. ERIE is one of only 50 U.S. companies so named. Erie
Insurance is also recognized on the list of Ward's 50 Group of top performing
insurance companies, which analyzes the financial performance of 3,000
property and casualty companies and recognizes the top performers for
achieving outstanding results in safety, consistency and financial performance
over a five-year period (2007-2011).

News releases and more information about Erie Insurance Group are available at
www.erieinsurance.com.

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of
1995:

Statements contained herein that are not historical fact are forward-looking
statements and, as such, are subject to risks and uncertainties that could
cause actual events and results to differ, perhaps materially, from those
discussed herein. Forward-looking statements relate to future trends, events
or results and include, without limitation, statements and assumptions on
which such statements are based that are related to our plans, strategies,
objectives, expectations, intentions and adequacy of resources. Examples of
forward-looking statements are discussions relating to premium and investment
income, expenses, operating results, agency relationships, and compliance with
contractual and regulatory requirements. Forward-looking statements are not
guarantees of future performance and involve risks and uncertainties that are
difficult to predict. Therefore, actual outcomes and results may differ
materially from what is expressed or forecasted in such forward-looking
statements. Among the risks and uncertainties, in addition to those set forth
in our filings with the Securities and Exchange Commission, that could cause
actual results and future events to differ from those set forth or
contemplated in the forward-looking statements include the following:

Risk factors related to the Indemnity shareholder interest:

  odependence on Indemnity's relationship with the Exchange and the
    management fee under the agreement with the subscribers at the Exchange;
  ocosts of providing services to the Exchange under the subscriber's
    agreement;
  oability to attract and retain talented management and employees;
  oability to maintain uninterrupted business operations, including
    information technology systems;
  ofactors affecting the quality and liquidity of Indemnity's investment
    portfolio;
  ocredit risk from the Exchange;
  oIndemnity's ability to meet liquidity needs and access capital; and
  ooutcome of pending and potential litigations against Indemnity.

Risk factors related to the non-controlling interest owned by the Exchange,
which includes the Property and Casualty Group and EFL:

  ogeneral business and economic conditions;
  odependence upon the independent agency system;
  oability to maintain our reputation for customer service;
  ofactors affecting insurance industry competition;
  ochanges in government regulation of the insurance industry;
  opremium rates and reserves must be established from forecasts of ultimate
    costs;
  oemerging claims, coverage issues in the industry, and changes in reserve
    estimates related to the property and casualty business;
  ochanges in reserve estimates related to the life business;
  osevere weather conditions or other catastrophic losses, including
    terrorism;
  othe Exchange's ability to acquire reinsurance coverage and collectability
    from reinsurers;
  ofactors affecting the quality and liquidity of the Exchange's investment
    portfolio;
  othe Exchange's ability to meet liquidity needs and access capital;
  othe Exchange's ability to maintain acceptable financial strength rating;
  ooutcome of pending and potential litigations against the Exchange; and
  odependence upon the service provided by Indemnity.

A forward-looking statement speaks only as of the date on which it is made and
reflects Indemnity's analysis only as of that date. Indemnity undertakes no
obligation to publicly update or revise any forward-looking statement, whether
as a result of new information, future events, changes in assumptions, or
otherwise.

Erie Indemnity Company
Consolidated Statements of Operations
(dollars in millions, except per share data)
                            Three months ended        Twelve months ended
                            December 31,              December 31,
                            2012         2011         2012         2011
Revenues                    (Unaudited)
Premiums earned             $ 1,160      $  1,076     $  4,493     $ 4,214
Net investment income       112          107          438          433
Net realized investment     60           230          418          (4)
gains (losses)
Net impairment losses       0            (2)          0            (2)
recognized in earnings
Equity in earnings
(losses) of limited         32           (1)          131          149
partnerships
Other income                8            8            32           34
Total revenues              1,372        1,418        5,512        4,824
Benefits and expenses
Insurance losses and loss   909          720          3,480        3,444
expenses
Policy acquisition and      298          273          1,133        1,022
underwriting expenses
Total benefits and          1,207        993          4,613        4,466
expenses
Income from operations
before income taxes and     165          425          899          358
noncontrolling interest
Provision for income taxes  46           144          280          90
Net income                  119          281          619          268
Less: Net income
attributable to
noncontrolling interest in  89           255          459          99
consolidated

 entity – Exchange
Net income attributable to  $ 30         $  26        $  160       $ 169
Indemnity
Earnings Per Share
Net income attributable to
Indemnity per share
ClassA common stock –      $ 0.63       $  0.55      $  3.38      $ 3.45
basic
ClassA common stock –      $ 0.56       $  0.49      $  2.99      $ 3.08
diluted
ClassB common stock –      $ 94         $  82        $  505       $ 522
basic and diluted
Weighted average shares
outstanding attributable
to Indemnity – Basic
ClassA common stock        47,006,247   47,982,703   47,357,836   48,875,316
ClassB common stock        2,543        2,546        2,544        2,546
Weighted average shares
outstanding attributable
to Indemnity – Diluted
ClassA common stock        53,193,844   54,164,824   53,547,833   55,057,437
ClassB common stock        2,543        2,546        2,544        2,546
Dividends declared per
share
ClassA common stock        $ 2.5925     $  0.5525    $  4.25      $ 2.0975
ClassB common stock        $ 388.8750   $  82.8750   $  637.50    $ 314.6250



Erie Indemnity Company
Results of the Erie Insurance Group's operations by interest (Unaudited)
(in millions)
                        Indemnity                     Noncontrollinginterest  Eliminations of    Erie
                                                                               related            Insurance
                        shareholderinterest          (Exchange)                                  Group
                                                                               party transactions
                        Three monthsended            Three monthsended       Three              Three
                        December31,                  December31,             monthsended       monthsended
                                                                               December31,       December31,
                Percent 2012       2011       Percent 2012         2011        2012     2011      2012   2011
Management
operations:
Management fee  100.0%  $   275    $  251             $    —       $   —       $ (275)  $ (251)   $ —    $ —
revenue, net
Service
agreement       100.0%  8          8                  —            —           —        —         8      8
revenue
Total revenue
from
management              283        259                —            —           (275)    (251)     8      8

 operations
Cost of
management      100.0%  249        225                —            —           (249)    (225)     —      —
operations
Income from
management
                        34         34                 —            —           (26)     (26)      8      8
 operations
before taxes
Property and
casualty
insurance


operations:
Net premiums            —          —          100.0%  1,143        1,060       —        —         1,143  1,060
earned
Losses and              —          —          100.0%  883          696         (1)      (1)       882    695
loss expenses
Policy
acquisition
and                     —          —          100.0%  321          296         (29)     (29)      292    267
underwriting
expenses
(Loss) income
from property
and

 casualty            —          —                  (61)         68          30       30        (31)   98
insurance
operations

 before
taxes
Life insurance
operations:
^(1)
Total revenue           —          —          100.0%  45           43          (1)      (1)       44     42
Total benefits          —          —          100.0%  33           31          0        0         33     31
and expenses
Income from
life insurance
                        —          —                  12           12          (1)      (1)       11     11
 operations
before taxes
Investment
operations:
Net investment          4          4                  87           83          (3)      (3)       88     84
income
Net realized
gains on                1          2                  56           227         —        —         57     229
investments
Net impairment
losses
recognized in           0          0                  0            (1)         —        —         0      (1)

 earnings
Equity in
earnings
(losses) of
limited                 5          1                  27           (5)         —        —         32     (4)


partnerships
Income from
investment
operations              10         7                  170          304         (3)      (3)       177    308

 before
taxes
Income from
operations
before income
                        44         41                 121          384         —        —         165    425
 taxes and
noncontrolling
interest
Provision for           14         15                 32           129         —        —         46     144
income taxes
Net income              $   30     $  26              $    89      $   255     $ —      $ —       $ 119  $ 281

(1) Earnings on life insurance related invested assets are integral to the
evaluation of the life insurance operations because of the long duration of
life products. On that basis, for presentation purposes, the life insurance
operations in the table above include life insurance related investment
results.

Erie Indemnity Company
Results of the Erie Insurance Group's operations by interest
(in millions)


                          Indemnity                       Noncontrollinginterest  Eliminations of        Erie
                                                                                   related                Insurance
                          shareholderinterest            (Exchange)                                      Group
                                                                                   party transactions
                          Yearsended                     Yearsended              Yearsended            Yearsended
                          December31,                    December31,             December31,           December31,
                Percent   2012        2011      Percent   2012         2011        2012       2011        2012   2011
Management
operations:
Management fee  100.0%    $  1,157    $ 1,067             $   —        $    —      $ (1,157)  $ (1,067)   $ —    $ —
revenue, net
Service
agreement       100.0%    31          33                  —            —           —          —           31     33
revenue
Total revenue
from
management                1,188       1,100               —            —           (1,157)    (1,067)     31     33

 operations
Cost of
management      100.0%    983         892                 —            —           (983)      (892)       —      —
operations
Income from
management
                          205         208                 —            —           (174)      (175)       31     33
 operations
before taxes
Property and
casualty
insurance


operations:
Net premiums              —           —         100.0%    4,422        4,149       —          —           4,422  4,149
earned
Losses and                —           —         100.0%    3,384        3,349       (5)        (5)         3,379  3,344
loss expenses
Policy
acquisition
and                       —           —         100.0%    1,284        1,178       (182)      (183)       1,102  995
underwriting

 expenses
Loss from
property and
casualty
                          —           —                   (246)        (378)       187        188         (59)   (190)
 insurance
operations
before taxes
Life insurance
operations:
^(1) (2)
Total revenue   21.6%^(2) —           10        78.4%^(2) 178          167         (2)        (2)         176    175
Total benefits  21.6%^(2) —           7         78.4%^(2) 132          120         0          0           132    127
and expenses
Income from
life insurance
                          —           3                   46           47          (2)        (2)         44     48
 operations
before taxes
Investment
operations:
Net investment            16          16                  338          335         (11)       (11)        343    340
income
Net realized
gains (losses)            5           3                   404          (20)        —          —           409    (17)
on investments
Net impairment
losses
recognized in             0           0                   0            (1)         —          —           0      (1)

 earnings
Equity in
earnings of
limited                   15          26                  116          119         —          —           131    145


partnerships
Income from
investment
operations                36          45                  858          433         (11)       (11)        883    467

 before
taxes
Income from
operations
before income
                          241         256                 658          102         —          —           899    358
 taxes and
noncontrolling
interest
Provision for             81          87                  199          3           —          —           280    90
income taxes
Net income                $  160      $ 169               $   459      $    99     $ —        $ —         $ 619  $ 268

(1) Earnings on life insurance related invested assets are integral to the
evaluation of the life insurance operations because of the long duration of
life products. On that basis, for presentation purposes, the life insurance
operations in the table above include life insurance related investment
results.

(2) Prior to and through March 31, 2011, Indemnity retained a 21.6%
ownership interest in EFL, which accrued to the Indemnity shareholder
interest, and the Exchange retained a 78.4% ownership interest in EFL, which
accrued to the interest of the subscribers (policyholders) of the Exchange, or
noncontrolling interest. Due to the sale of Indemnity's 21.6% ownership
interest in EFL to the Exchange on March 31, 2011, 100% of EFL's life
insurance results accrue to the interest of the subscribers (policyholders) of
the Exchange, or noncontrolling interest, after March 31, 2011.





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 related to the Indemnity
shareholder interest. Our method of calculating this measure may differ from
those used by other companies, and therefore comparability may be limited.

Indemnity defines operating income as net income excluding realized capital
gains and losses, impairment losses and related federal income taxes.

Indemnity uses operating income to evaluate the results of its 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 Indemnity's overall profitability.

The following table reconciles operating income and net income for the
Indemnity shareholder interest:

                                            Indemnity         Indemnity
                                            Shareholder       Shareholder

                                            Interest          Interest
                                            Three months      Years ended
                                            ended
                                                              December 31,
                                            December 31,
(inmillions,exceptpersharedata)        2012    2011      2012      2011
                                            (Unaudited)
Operating income attributable to          $ 29    $ 25      $ 157     $ 167
Indemnity
Net realized gains and impairments on       1       2         5         3
investments
Income tax expense                          0       (1)       (2)       (1)
Realized gains and impairments, net of      1       1         3         2
income taxes
Net income attributable to Indemnity      $ 30    $ 26      $ 160     $ 169
Per Indemnity ClassA common
share-diluted:
Operating income attributable to          $ 0.54  $ 0.47    $ 2.92    $ 3.04
Indemnity
Net realized gains and impairments on       0.02    0.03      0.10      0.06
investments
Income tax expense                          0.00    (0.01)    (0.03)    (0.02)
Realized gains and impairments, net of      0.02    0.02      0.07      0.04
income taxes
Net income attributable to Indemnity      $ 0.56  $ 0.49    $ 2.99    $ 3.08



Erie Indemnity Company
Consolidated Statements of Financial Position
(in millions)
                                          December31, 2012  December31, 2011
Assets
Investments – Indemnity
Available-for-sale securities, at fair
value:
Fixed maturities                          $    452           $    548
Equity securities                         55                 25
Trading securities, at fair value         0                  27
Limited partnerships                      180                208
Other invested assets                     1                  1
Investments – Exchange
Available-for-sale securities, at fair
value:
Fixed maturities                          7,707              7,292
Equity securities                         945                564
Trading securities, at fair value         2,417              2,308
Limited partnerships                      1,037              1,082
Other invested assets                     20                 19
Total investments                         12,814             12,074
Cash and cash equivalents (Exchange       400                185
portion of $388 and $174, respectively)
Premiums receivable from policyholders –  1,062              976
Exchange
Reinsurance recoverable – Exchange        168                166
Deferred income taxes – Indemnity         37                 19
Deferred acquisition costs – Exchange     504                487
Other assets (Exchange portion of $339    456                441
and $322, respectively)
Total assets                              $    15,441        $    14,348
Liabilities and shareholders' equity
Liabilities
Indemnity liabilities
Other liabilities                         $    515           $    455
Exchange liabilities
Losses and loss expense reserves          3,598              3,499
Life policy and deposit contract          1,708              1,671
reserves
Unearned premiums                         2,365              2,178
Deferred income taxes                     365                147
Other liabilities                         99                 105
Total liabilities                         8,650              8,055
Indemnity's shareholders' equity          642                781
Noncontrolling interest in consolidated   6,149              5,512
entity – Exchange
Total equity                              6,791              6,293
Total liabilities, shareholders' equity   $    15,441        $    14,348
and noncontrolling interest

SOURCE Erie Indemnity Company

Website: http://www.erieinsurance.com
Contact: Scott Beilharz, Investor Relations, +1-814-870-7312 or
+1-800-458-0811 ext. 7312, scott.beilharz@erieinsurance.com
 
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