Consolidated net income of Wesco Financial Corporation (NYSE AMEX:WSC) and its subsidiaries for the fourth quarter of 2010 amounted to $10,867,000 compared with $11,302,000 for the fourth quarter of 2009. Consolidated net income for the year ended December 31, 2010 was $72,212,000 compared with $54,073,000 for calendar 2009. The 2010 figures included after-tax net investment gains of $1,820,000 and “other-than-temporary” impairment (“OTTI”) losses of $13,664,000 realized in the fourth quarter, explained below, and after-tax net investment gains of $4,252,000 realized in the calendar year. No investment gains or losses or OTTI losses were realized in 2009.
Following is a breakdown of consolidated net income into useful business components. All figures are on an after-tax basis and are in thousands except for per-share amounts, which are based on 7,119,807 shares outstanding.
|Quarter Ended December 31,||Year Ended December 31,|
|Wesco-Financial and Kansas Bankers|
|CORT furniture rental business||141||(1,951||)||11,480||(1,359||)|
|Precision Steel businesses||773||211||1,079||(648||)|
|Other income (loss)||(3,008||)||(6,565||)||(3,986||)||(6,923||)|
|Realized net investment gains||1,820||---||4,252||---|
|Other-than-temporary impairment losses|
|Consolidated net income||$||10,867||$||11,302||$||72,212||$||54,073|
*At 2010 yearend, Wesco determined that an “other than temporary impairment” had occurred in the fair values of certain purchase lots of an equity investment that had been below cost for more than two years. Because Wesco’s consolidated balance sheet reflects investments carried at fair value, with net unrealized gains, after applicable income tax effect, included in shareholders’ equity, the realization of the OTTI loss merely resulted in a reclassification from net unrealized gains to retained earnings, another component of shareholders’ equity.
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