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Transatlantic Holdings, Inc. and Subsidiaries
Second Quarter 2009 Financial Supplement
Financial Information as of June 30, 2009(Unaudited)
The following supplement is provided to assist your understanding of Transatlantic Holdings, Inc. It should be read in conjunction with documents filed with the SEC by Transatlantic Holdings, Inc., including the Company’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and the second quarter 2009 earnings press release.
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Transatlantic Holdings, Inc. & Subsidiaries
Cautionary Statement Regarding Forward-Looking Information and Use of Non-GAAP Financial Information
This presentation may include statements which may constitute “forward-looking statements” within the meaning of the U.S. federal securities laws. These statements are not historical facts but instead represent only Transatlantic Holdings, Inc. and its subsidiaries’ (collectively, “TRH”) belief regarding future events and financial performance, many of which, by their nature, are inherently uncertain and outside of TRH’s control. These statements may address, among other things, TRH’s strategy and expectations for growth, product development, government and industry regulatory actions, legal matters, financial, credit and industry market conditions, financial results and reserves, as well as the expected impact on TRH of natural and man-made (e.g., terrorist attacks) catastrophic events and political, economic, legal and social conditions. It is possible that TRH’s actual results, financial condition and expected outcomes may differ, possibly materially, from those anticipated in these forward-looking statements.
Please refer to the Transatlantic Holdings, Inc. Annual Report on Form 10-K for the year ended December 31, 2008 and the Transatlantic Holdings, Inc. Quarterly Report on Form 10-Q for the quarter ended March 31, 2009 as well as Transatlantic Holdings, Inc.’s future filings and reports filed with or furnished to the Securities and Exchange Commission for a description of the business environment in which TRH operates and important factors, risks and uncertainties that may affect its business and financial results. TRH is not under any obligation to (and expressly disclaims any such obligations to) update or alter its forward-looking statements whether as a result of new information, future events or otherwise.
The financial information in this financial supplement includes performance measures called Net Operating Income (“NOI”), NOI Per Common Share (diluted) and Annualized Operating Return on Equity (“Annualized Operating ROE”) which are based on a methodology other than generally accepted accounting principles in the United States (“GAAP”). NOI is defined as GAAP net income excluding realized net capital (losses) gains and gain on early extinguishment of debt, net of taxes. NOI Per Common Share (diluted) represents NOI divided by Average Common Shares Outstanding on a diluted basis. GAAP annualized return on equity is defined as GAAP net income divided by the average of beginning and ending stockholders’ equity multiplied by four (for the three month periods) or two (for the six month periods). Annualized Operating ROE is defined as NOI divided by the average of beginning and ending stockholders’ equity multiplied by four (for the three month periods) or two (for the six month periods). TRH uses these measures in analyzing its performance as these measures focus on the core fundamentals of the Company’s operations. While TRH considers realized capital gains and losses and the gain on early extinguishment of debt as an integral part of its business and results, such items are not indicative of the core fundamentals of the Company’s operations. TRH believes these measures are of interest to the investment community because they provide additional meaningful methods of evaluating certain aspects of TRH’s operating performance from period to period on bases that are not otherwise apparent under GAAP. These non-GAAP measures, namely, NOI, NOI Per Common Share (diluted) and Annualized Operating ROE should not be viewed as substitutes for GAAP net income, GAAP net income percommon share and GAAP annualized return on equity, respectively. Reconciliations of NOI, NOI Per Common Share (diluted) and Annualized Operating ROE to GAAP net income, GAAP net income per common share on a diluted basis and GAAP annualized return on equity, respectively, the most directly comparable GAAP measures, are included on page 24.
Legal Disclaimer
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Transatlantic Holdings, Inc. & Subsidiaries
Financial HighlightsStatement of Operations Data 4Balance Sheet Data 6
Net Premiums WrittenBy Office 7Other Premium Information 8
Loss and LAE ReservesChange in Loss and LAE Reserves 9
Segment ResultsThree Months Ended June 30, 2009 10Three Months Ended June 30, 2008 11Six Months Ended June 30, 2009 12Six Months Ended June 30, 2008 13
Investment DataInvestment Revenue 14Investment Portfolio Profile 15Fixed Maturity Portfolio Ratings 16Fixed Maturity Portfolio By Contractual Maturity 18Fixed Maturity Portfolio Details 19Equity Portfolio Details 22
Operating Company Data 23
Reconciliation of Non-GAAP Measures 24
Table of Contents
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Transatlantic Holdings, Inc. & SubsidiariesFinancial HighlightsStatement of Operations Data (in millions, except ratios)
2009 2008 2009 2008
Gross premiums written 1,066$ 1,065$ 2,201$ 2,196$ Net premiums written 1,006 989 2,053 2,024 Net premiums earned 1,028 1,023 2,005 2,040 Underwriting profit (1) 68 62 115 123 Net investment income 111 120 221 238 Total realized net capital losses (25) (60) (86) (75) Gain on early extinguishment of debt - - 10 - Income before income taxes 138 107 228 252 Net income 112 90 188 205
Net operating income 129 129 237 254
Ratios:Loss 66.5 % 66.5 % 67.5 % 66.5 %Underwriting expense 27.1 27.8 26.8 27.7 Combined 93.6 % 94.3 % 94.3 % 94.2 %
(1) Underw riting profit (loss) represents net premiums earned less net losses and loss adjustment expenses and underw riting expenses plus (minus) the increase (decrease) in deferred acquisition costs.
June 30,Six Months Ended
June 30,Three Months Ended
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Transatlantic Holdings, Inc. & SubsidiariesFinancial HighlightsStatement of Operations Data
2009 2008 2009 2008
Net income per common share:Basic 1.69$ 1.35$ 2.83$ 3.10$ Diluted 1.68 1.34 2.81 3.08
Net operating income per common share (diluted) 1.93$ 1.93$ 3.55$ 3.80$
GAAP annualized return on equity 13.1 % 10.6 % 11.1 % 12.2 %
Annualized operating return on equity 15.0 % 15.2 % 14.1 % 15.0 %
June 30,Six Months Ended
June 30,Three Months Ended
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Transatlantic Holdings, Inc. & SubsidiariesFinancial Highlights Balance Sheet Data(dollars in millions, except per share amounts)
As of June 30,
2009
As of December 31,
2008
Total investments 10,965$ 10,230$ Cash and cash equivalents 334 289 Total assets 14,085 13,377 Unpaid losses and loss adjustment expenses 8,424 8,124
Capitalization:5.75% senior notes due December 14, 2015 697$ 722$ Total stockholders' equity 3,549 3,198
Total capitalization 4,246$ 3,920$
Debt to total capitalization ratio 16.4 % 18.4 %
As of June 30,
2009
As of March 31,
2009
As of December 31,
2008
Book value per common share 53.47$ 50.04$ 48.19$
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(in millions)
Net Premiums WrittenBy Office
2009 2008 2009 2008
Domestic 511$ 455$ 1,095$ 1,003$
International:
Europe:London 188 209 369 416 Paris 67 103 129 195 Zurich 101 94 206 177
356 406 704 788
Other:Toronto 20 17 37 37 Miami 73 65 141 119 Hong Kong 19 23 37 46 Tokyo 27 23 39 31
139 128 254 233
Total international 495 534 958 1,021
Total net premiums written 1,006$ 989$ 2,053$ 2,024$
June 30,Six Months Ended
June 30,Three Months Ended
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Transatlantic Holdings, Inc. & SubsidiariesNet Premiums WrittenOther Premium Information(dollars in millions)
2009 2008 2009 2008Property:
Catastrophe 105$ 97$ 205$ 181$ Other 197 215 380 422
Total property 302 312 585 603
Casualty:Specialty(1) 366 317 790 684 Other 338 360 678 737
Total casualty 704 677 1,468 1,421
Total net premiums written 1,006$ 989$ 2,053$ 2,024$
Net premiums written originated by AIG subsidiaries:Originated by AIG subsidiaries 68$ 81$ 143$ 162$ Percentage of total net premiums written 6.7 % 8.2 % 7.0 % 8.0 %
Net effect of changes in foreign currency exchange rates on the change in net premiums written in 2009 as compared to 2008:
Three Months Ended
June 30,
Six Months Ended
June 30,Increase excluding foreign exchange 6.5 % 7.6 %Foreign exchange effect (4.7) (6.2) Increase as reported in U.S. dollars 1.8 % 1.4 %
(1) Principally includes directors' and off icers' liability, errors and omissions liability, medical malpractice and accident and health premiums.
Three Months EndedJune 30,
Six Months EndedJune 30,
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Transatlantic Holdings, Inc. & SubsidiariesLoss and LAE ReservesChange in Loss and LAE Reserves(in millions)
2009 2008 2009 2008
At beginning of period:Unpaid losses and LAE 8,138$ 8,070$ 8,124$ 7,926$ Less reinsurance recoverable (783) (934) (775) (1,026)
Unpaid losses and LAE, net of reinsurance recoverable 7,355 7,136 7,349 6,900
Net losses and LAE incurred in respect of losses occuring in:
Current year 689 683 1,361 1,355 Prior years (5) (2) (7) 1
Total 684 681 1,354 1,356
Net losses and LAE paid 613 523 1,228 992
Foreign exchange effect 210 23 161 53
At end of period:Unpaid losses and LAE, net of reinsurance recoverable 7,636 7,317 7,636 7,317 Plus reinsurance recoverable 788 928 788 928
Unpaid losses and LAE 8,424$ 8,245$ 8,424$ 8,245$
June 30,Six Months Ended
June 30,Three Months Ended
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Transatlantic Holdings, Inc. & SubsidiariesSegment ResultsThree Months Ended June 30, 2009(in millions, except ratios)
DomesticInternational -
EuropeInternational -
Other ConsolidatedNet premiums written 511$ 356$ 139$ 1,006$
Net premiums earned 514$ 372$ 142$ 1,028$ Net losses and loss adjustment expenses incurred (321) (293) (70) (684) Net commissions (120) (77) (40) (237) Other underwriting expenses (18) (13) (5) (36) (Decrease) increase in deferred acquisition costs - (4) 1 (3) Underwriting profit (loss) 55 (15) 28 68
Net investment income 71 32 8 111 Total realized net capital (losses) gains (28) 2 1 (25) Gain on early extinguishment of debt - - - - Interest on senior notes (10) - - (10) Other expenses, net (6) - - (6) Income before income taxes 82$ 19$ 37$ 138$
Catastrophe (costs) savings:Net losses and LAE incurred from catastrophe events (1)$ 1$ -$ -$ Net assumed (ceded) reinstatement premiums (1) - - (1)
Net catastrophe (costs) savings (2)$ 1$ -$ (1)$
Ratios:Loss 62.4 % 78.9 % 48.9 % 66.5 %Underwriting expense 27.2 25.2 31.9 27.1 Combined 89.6 % 104.1 % 80.8 % 93.6 %
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Transatlantic Holdings, Inc. & SubsidiariesSegment ResultsThree Months Ended June 30, 2008(in millions, except ratios)
DomesticInternational -
EuropeInternational -
Other ConsolidatedNet premiums written 455$ 406$ 128$ 989$
Net premiums earned 486$ 418$ 119$ 1,023$ Net losses and loss adjustment expenses incurred (356) (272) (53) (681) Net commissions (104) (99) (38) (241) Other underwriting expenses (17) (12) (5) (34) (Decrease) increase in deferred acquisition costs (6) (3) 4 (5) Underwriting profit 3 32 27 62
Net investment income 73 39 8 120 Total realized net capital losses (53) (6) (1) (60) Gain on early extinguishment of debt - - - - Interest on senior notes (11) - - (11) Other expenses, net (5) - 1 (4) Income before income taxes 7$ 65$ 35$ 107$
Catastrophe (costs) savings:Net losses and LAE incurred from catastrophe events -$ 3$ -$ 3$ Net assumed (ceded) reinstatement premiums - - - -
Net catastrophe (costs) savings -$ 3$ -$ 3$
Ratios:Loss 73.2 % 65.1 % 44.6 % 66.5 %Underwriting expense 26.5 27.4 33.5 27.8 Combined 99.7 % 92.5 % 78.1 % 94.3 %
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Transatlantic Holdings, Inc. & SubsidiariesSegment ResultsSix Months Ended June 30, 2009(in millions, except ratios)
DomesticInternational -
EuropeInternational -
Other ConsolidatedNet premiums written 1,095$ 704$ 254$ 2,053$
Net premiums earned 1,030$ 728$ 247$ 2,005$ Net losses and loss adjustment expenses incurred (676) (552) (126) (1,354) Net commissions (260) (157) (64) (481) Other underwriting expenses (35) (24) (10) (69) Increase (decrease) in deferred acquisition costs 18 (6) 2 14 Underwriting profit (loss) 77 (11) 49 115
Net investment income 143 62 16 221 Total realized net capital losses (82) - (4) (86) Gain on early extinguishment of debt 10 - - 10 Interest on senior notes (20) - - (20) Other expenses, net (12) - - (12) Income before income taxes 116$ 51$ 61$ 228$
Catastrophe (costs) savings:Net losses and LAE incurred from catastrophe events (2)$ 4$ -$ 2$ Net assumed (ceded) reinstatement premiums (2) - - (2)
Net catastrophe (costs) savings (4)$ 4$ -$ -$
Ratios:Loss 65.6 % 75.9 % 50.7 % 67.5 %Underwriting expense 27.0 25.6 29.1 26.8 Combined 92.6 % 101.5 % 79.8 % 94.3 %
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Transatlantic Holdings, Inc. & SubsidiariesSegment ResultsSix Months Ended June 30, 2008(in millions, except ratios)
DomesticInternational -
EuropeInternational -
Other ConsolidatedNet premiums written 1,003$ 788$ 233$ 2,024$
Net premiums earned 995$ 790$ 255$ 2,040$ Net losses and loss adjustment expenses incurred (729) (505) (122) (1,356) Net commissions (235) (188) (74) (497) Other underwriting expenses (33) (22) (9) (64) Increase (decrease) in deferred acquisition costs 4 1 (5) - Underwriting profit (loss) 2 76 45 123
Net investment income 145 76 17 238 Total realized net capital losses (65) (5) (5) (75) Gain on early extinguishment of debt - - - - Interest on senior notes (22) - - (22) Other expenses, net (12) - - (12) Income before income taxes 48$ 147$ 57$ 252$
Catastrophe (costs) savings:Net losses and LAE incurred from catastrophe events (2)$ 5$ -$ 3$ Net assumed (ceded) reinstatement premiums - (1) - (1)
Net catastrophe (costs) savings (2)$ 4$ -$ 2$
Ratios:Loss 73.2 % 64.0 % 47.9 % 66.5 %Underwriting expense 26.8 26.6 35.9 27.7 Combined 100.0 % 90.6 % 83.8 % 94.2 %
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Transatlantic Holdings, Inc. & SubsidiariesInvestment DataInvestment Revenues(in millions)
2009 2008 2009 2008
Net investment income:Fixed maturities 109$ 107$ 215$ 213$ Equities 3 5 7 8 Other invested assets (including alternative investments) (1) 5 (3) 10 Other 3 6 7 12
Total investment income 114 123 226 243 Investment expenses (3) (3) (5) (5)
Net investment income 111$ 120$ 221$ 238$
Realized net capital (losses) gains:Total other-than-temporary impairments (20)$ (69)$ (66)$ (78)$ Less: other-than-temporary impairments recognized in
other comprehensive income (loss) - - - - Other-than-temporary impairments charged to earnings (20) (69) (66) (78)
Sales and redemptions of securities (7) 17 (17) 17 Net foreign currency transaction gains (losses) 2 (8) (3) (14)
Total realized net capital losses (25)$ (60)$ (86)$ (75)$
Other-than-temporary impairments charged to earnings:Fixed maturities (8)$ -$ (29)$ -$ Equities (12) (5) (37) (14) Securities lending invested collateral - (64) - (64)
Total charged to earnings (20)$ (69)$ (66)$ (78)$
Six Months EndedJune 30,June 30,
Three Months Ended
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Transatlantic Holdings, Inc. & SubsidiariesInvestment DataInvestment Portfolio Profile(dollars in millions)
Amount Amount
Fixed Maturities:Held to maturity (at amortized cost):
Municipalities 1,216$ 11.1 % 1,219$ 11.9 %Available for sale (at fair value):
Corporate 2,174 19.8 2,094 20.5 U.S. government and government agencies 28 0.3 45 0.4 Foreign government 256 2.3 281 2.8 Municipalities 5,710 52.1 5,149 50.3 Asset-backed:
Commerical mortgage-backed securities 103 0.9 116 1.1 Residential mortgage-backed securities 350 3.2 291 2.8 Other asset-backed securities 38 0.4 37 0.4
Total available for sale 8,659 79.0 8,013 78.3 Total fixed maturities 9,875 90.1 9,232 90.2
Equities:Common stocks 451 4.1 426 4.2 Nonredeemable preferred stocks 48 0.4 98 0.9
Total equities 499 4.5 524 5.1
Other invested assets 260 2.4 244 2.4 Short-term investments, at cost (approximates fair value) 331 3.0 230 2.3
Total investments 10,965$ 100.0 % 10,230$ 100.0 %
PercentAs of June 30, 2009 As of December 31, 2008
Percent
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Transatlantic Holdings, Inc. & SubsidiariesInvestment DataFixed Maturity Portfolio Ratings(dollars in millions)
AAA AA A BBB
Below BBB or Not
Rated (2) TotalHeld to maturity:
Municipalities(3) 592$ 481$ 121$ 22$ -$ 1,216$
Available for sale:Corporate 272 853 982 57 10 2,174 U.S. government and government agencies 28 - - - - 28 Foreign government 95 130 31 - - 256 Municipalities(3) 2,470 2,714 512 - 14 5,710 Asset-backed:
Commerical mortgage-backed securities 82 - 9 11 1 103 Residential mortgage-backed securities 312 9 - - 29 350 Other asset-backed securities 25 - - 13 - 38
Total available for sale 3,284 3,706 1,534 81 54 8,659
Total fixed maturities 3,876$ 4,187$ 1,655$ 103$ 54$ 9,875$
Percentage of total fixed maturities 39.3% 42.4% 16.8% 1.0% 0.5% 100.0%
AAA AA A BBBBelow BBB or
Not Rated TotalInsured rating 1,206$ 1,357$ 475$ 32$ -$ 3,070$ Underlying rating 284 2,003 722 43 18 3,070
(3) Includes insured municipal bonds w ith ratings as follow s:(2) Consists of $19 million of BB rated securities, $15 million of B rated securities, $7 million of CCC rated securities and $13 million of not-rated securities.
As of June 30, 2009(1)
(1) Standard & Poor's ratings.
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Transatlantic Holdings, Inc. & SubsidiariesInvestment DataFixed Maturity Portfolio Ratings(dollars in millions)
AAA AA A BBB
Below BBB or Not
Rated (2) TotalHeld to maturity:
Municipalities(3) 589$ 523$ 85$ 22$ -$ 1,219$
Available for sale:Corporate 303 942 800 37 12 2,094 U.S. government and government agencies 45 - - - - 45 Foreign government 120 128 33 - - 281 Municipalities(3) 2,196 2,703 235 11 4 5,149 Asset-backed:
Commerical mortgage-backed securities 97 - 11 - 8 116 Residential mortgage-backed securities 251 7 - 9 24 291 Other asset-backed securities 23 10 4 - - 37
Total available for sale 3,035 3,790 1,083 57 48 8,013
Total fixed maturities 3,624$ 4,313$ 1,168$ 79$ 48$ 9,232$
Percentage of total fixed maturities 39.3% 46.7% 12.6% 0.9% 0.5% 100.0%
AAA AA A BBBBelow BBB or
Not Rated TotalInsured rating 1,167$ 1,635$ 234$ -$ -$ 3,036$ Underlying rating 260 1,999 744 22 11 3,036
(3) Includes insured municipal bonds w ith ratings as follow s:(2) Consists of $32 million of BB rated securities and $16 million of CCC rated securities.
As of December 31, 2008(1)
(1) Standard & Poor's ratings.
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Transatlantic Holdings, Inc. & SubsidiariesInvestment Data Fixed Maturity Portfolio By Contractual Maturity(in millions)
Amortized Cost Fair Value
Amortized Cost Fair Value
Fixed maturity portfolio by contractual maturity:
Fixed maturities held to maturity:Due after five years through ten years 177$ 183$ 128$ 132$ Due after ten years 1,039 1,057 1,091 1,078
Total 1,216$ 1,240$ 1,219$ 1,210$
Fixed maturities available for sale:Due in one year or less 341$ 349$ 376$ 377$ Due after one year through five years 1,625 1,637 1,494 1,480 Due after five years through ten years 1,963 1,962 1,953 1,923 Due after ten years 4,241 4,220 3,938 3,789 Asset-backed(1) 672 491 534 444
Total 8,842$ 8,659$ 8,295$ 8,013$
As of June 30, 2009 As of December 31, 2008
(1) Asset-backed f ixed maturities by their nature do not generally have single maturity dates.
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Transatlantic Holdings, Inc. & SubsidiariesInvestment DataFixed Maturity Portfolio Details(in millions)
Ten largest holdings by issuer - municipalities: Fair ValueUnrealized Gain (Loss)
Florida State Board of Education 187$ 3$ Massachusetts, Commonwealth of 166 (11) Illinois, State of 161 6 Phoenix Arizona Civic Improvement Corporation 141 - Washington, State of 125 2 New York City Water Authority, NY 116 (1) New York State Thruway Authority 114 1 California, State of 101 (14) New York Metropolitan Transportation Authority 100 3 Connecticut, State of 97 3
Ten largest holdings by issuer - other than municipalities: Fair ValueUnrealized Gain (Loss)
Germany, Federal Republic of 105$ 2$ General Electric Company 104 (4) Japan, Government of 99 - HSBC Holdings, PLC 79 (1) Lloyds Banking Group PLC 72 (9) Bank of America Corp 69 (8) Royal Bank of Scotland Group PLC 67 (9) Total SA 67 2 ING Group NV 61 (6) Citigroup Inc. 57 (6)
(1) Standard & Poor's rating.
AAA+A+
As of June 30, 2009
AAA+A
Weighted Average Rating(1)
AA+AA+AA
A+AAAA
As of June 30, 2009Weighted
Average Rating(1)
AAA
AA+
AA
AA
AA+AAAAAA
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Transatlantic Holdings, Inc. & SubsidiariesInvestment DataFixed Maturity Portfolio Details(dollars in millions)
California municipal bonds as of June 30, 2009:
Fair value of California municipal bonds 674$
Percentage general obligations 39 %Percentage special revenues 61 Total 100 %
Fair Value PercentageCalifornia municipal bonds prefunded 45$ 7 %California municipal bonds prefunded and insured 43 6 California municipal bonds insured 521 77
Insurer: Percent InsuredNational Indemnity Company 34 %Financial Security Assurance, Inc. 26 Ambac Financial Group, Inc. 9 Other 8 Total Insured 77 %
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Transatlantic Holdings, Inc. & SubsidiariesInvestment DataFixed Maturity Portfolio Details
2009 2008 2009 2008Pre-tax yield on fixed maturity portfolio(1) 4.4 % 4.4 % 4.4 % 4.4 %
As of June 30,
2009
As of December 31,
2008Duration of fixed maturity portfolio 6.0 years 6.0 years
(1) Represents annualized pre-tax net investment income from fixed maturities (excluding f ixed maturities included in securities lending invested collateral) for the periods indicated divided by the average balance sheet carrying value of the related f ixed maturity for such periods.
Three Months Ended Six Months EndedJune 30, June 30,
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Transatlantic Holdings, Inc. & SubsidiariesInvestment Data Equity Portfolio Details(in millions)
Ten largest equity issuers: Fair ValueUnrealized Gain (Loss)
HSBC Government Bond Funds 91$ 4$ Apple Inc. 14 2 Occidental Petroleum Corp. 11 1 Monsanto Co. 10 (2) Exxon Mobil Corp. 9 - Capital One Financial Corp. 9 (1) Cisco Systems Inc. 8 1 Bank of America Corp. 8 - Chevron Corp. 7 (1) Sempra Energy 6 1
As of June 30, 2009
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Transatlantic Holdings, Inc. & SubsidiariesOperating Company Data(dollars in millions)
(Estimated) As of June 30,
2009As of December
31, 2008
Statutory Surplus of Transatlantic Reinsurance Company® 3,680$ 3,534$
Financial strength ratings as of June 30, 2009:A.M. Best Company Standard & Poor's
Moody's Investor Service
Transatlantic Reinsurance Company® A (Excellent)(1) A+(2) Aa3(3)
Trans Re Zurich A (Excellent)(1) A+(2) Not ratedPutnam Reinsurance Company A (Excellent)(1) A+(2) Not rated
(1) Rating assigned a negative outlook.(2) Rating assigned a stable outlook.(3) Rating under review for possible dow ngrade.
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Transatlantic Holdings, Inc. & Subsidiaries
(dollars in millions, except per share amounts)
2009 2008 2009 2008
Net income 112$ 90$ 188$ 205$ Total realized net capital losses, net of tax 17 39 55 49 (Gain) on early extinguishment of debt, net of tax - - (6) - Net operating income 129$ 129$ 237$ 254$
Net income per common share (diluted) 1.68$ 1.34$ 2.81$ 3.08$ Total realized net capital losses, net of tax 0.25 0.59 0.84 0.72 (Gain) on early extinguishment of debt, net of tax - - (0.10) - Net operating income per common share (diluted) 1.93$ 1.93$ 3.55$ 3.80$
GAAP annualized return on equity 13.1 % 10.6 % 11.1 % 12.2 %Total realized net capital losses, net of tax 1.9 4.6 3.4 2.8 (Gain) on early extinguishment of debt, net of tax - - (0.4) - Annualized operating return on equity 15.0 % 15.2 % 14.1 % 15.0 %
Three Months Ended Six Months EndedJune 30, June 30,
Reconciliation of Non-GAAP Measures