In addition to the reclassification, there is an adjustment recorded on these redeemable non-controlling interest balances. As of the end of each reporting period, the carrying value of the redeemable non-controlling interest is adjusted to the calculated redemption value if that price is higher than the current carrying value. The purpose of the adjustment is to record the potential cash obligations we may have to the non-controlling interest shareholders.

This quarter, redeemable non-controlling interest balances were marked up by $8.2 million. The adjustment is recorded to retained earnings and reduces net income to shareholders when calculating earnings per share. You can find the earnings per share calculation in Footnote 2 and additional information regarding our contingent obligations to the non-controlling shareholders in Footnote 8.

The second item I would like to point out was previously discussed in our first quarter conference call and filings, but I’d like to remind everyone that we chose to prospectively adopt the new DAC accounting standards. As of June 30th, 2012, we have recognized approximately $35 million or 3 points of expenses related to the prospective adoption of the new standards.

Now that we have covered these new items, I will review the 2012 financial results. I will follow the same format in discussing results as in past quarters. I will start by discussing our underwriting operations, followed by a brief discussion of our investment results, and bring the two together with a discussion of our total results.

Our total operating revenues grew 12% to $1.4 billion in 2012 from $1.3 billion in 2011. The increase is due to a 10% increase in revenue from our insurance operations and a 30% increase in revenue from our non-insurance operations which we refer to as Markel Ventures.

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