Effective January 1, 2012, the Company will adopt new accounting guidance that clarifies which costs associated with the acquisition of insurance contracts should be capitalized and deferred for recognition during the coverage period. Adoption of this guidance will have an impact on the consolidated financial position and operating results of the Company since certain costs associated with contract acquisition that are currently deferred do not meet the criteria for deferral under this new guidance. The Company is adopting this guidance retrospectively, which will result in a decline in consolidated stockholders’ equity at December 31, 2011 of approximately $6.4 million, net of tax, and a corresponding decline in book value of approximately $0.50 per share. If this guidance had been in effect during 2011, operating results would have been reduced by approximately $640,000, net of tax ($0.05 per share).Management is projecting that 2012 operating income will be within a range of $1.30 to $1.55 per share. This guidance is based on a projected GAAP combined ratio of 104.9 percent for the year.
EMC Insurance Group Inc. Reports 2011 Fourth Quarter And Year-End Results And 2012 Operating Income Guidance
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