Tower Group (TWGP)

Q3 2011 Earnings Call

November 08, 2011 9:00 am ET


William E. Hitselberger - Chief Financial Officer, Principal Accounting Officer and Senior Vice President

Michael H. Lee - Chairman, Chief Executive Officer and President


Adam Klauber - William Blair & Company L.L.C., Research Division

Randy Binner - FBR Capital Markets & Co., Research Division

Robert Farnam - Keefe, Bruyette, & Woods, Inc., Research Division

Richard W. Mortell - Piper Jaffray Companies, Research Division



Good morning, ladies and gentlemen. My name is Tyrone, I'll be your conference facilitator today. At this time, I would like to welcome everyone to Tower Group's Third Quarter 2011 Earnings Conference Call. [Operator Instructions] It is now my pleasure to turn the floor over to your host, Bill Hitselberger, Executive Vice President and Chief Financial Officer. Please go ahead, sir.

William E. Hitselberger

Thank you, Tyrone, and good morning, everyone. Before I turn the call over to Tower Group President and CEO, Michael Lee, I would like to remind you that some of the statements that will be presented during this call will be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results could differ materially from those presented in these forward-looking statements. For more information on the risks and other factors that may affect future performance, investors should review periodic reports that are filed by the company with the SEC from time to time.

As we noted in our earnings release, in October 2010, the Financial Accounting Standards Board issued new guidance concerning the accounting per cost associated with acquiring or renewing insurance contracts. We adopted this guidance effective January 1, 2011, and therefore adjusted our previously issued financial information. Adoption of this guidance reduced the carrying value of our deferred acquisition costs as of December 31, 2010, by $78.7 million, and Tower Group, Inc.'s stockholders equity by $42.6 million. Diluted earnings per share for the third quarter 2010 and for the 9-month ended September 30, 2010, were reduced by $0.12 and $0.27 per share, respectively as a result of this change in accounting.

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