Wesco Financial (AMEX:WSC)
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3 Years : From Dec 2010 to Dec 2013
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
Quarter Ended December 31,
Year Ended December 31,
Wesco-Financial and Kansas Bankers
CORT furniture rental business
Precision Steel businesses
Other income (loss)
Realized net investment gains
Other-than-temporary impairment losses
Consolidated net income
*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.
Wesco’s consolidated net income, excluding realized net investment gains
and OTTI losses, increased by $11.4 million for the fourth quarter of
2010 and by $27.6 million for the year, from the corresponding 2009
figures. Several factors were involved, including (1) improved
profitability of CORT’s furniture rental business due to a reduction in
operating expenses, (2) increased underwriting gain and investment
income of Wesco’s insurance businesses, and (3) improving economic
conditions. The operations of CORT and Precision Steel, although
improved, continue to reflect the effects of weak economic conditions.
On February 7, 2011, Wesco and Berkshire Hathaway (“Berkshire”)
announced that they had entered into a definitive merger agreement,
whereby Berkshire will acquire the remaining 19.9% of the shares of
Wesco’s common stock that it does not presently own in exchange for cash
or shares of Berkshire Class B common stock, at the election of each
Wesco shareholder. The transaction requires the affirmative vote of
holders of a majority of Wesco’s outstanding shares in favor of the
adoption of the merger agreement, which will be sought at a special
meeting of the shareholders of Wesco, and is subject to customary
closing conditions. The transaction is also subject to a non-waivable
condition that a majority of the outstanding shares not owned by
Berkshire (and excluding certain specified shareholders) vote in favor
of the adoption of the merger agreement. Berkshire has agreed to vote
the Wesco shares it owns in favor of the transaction. Closing is
expected to occur before the end of the second quarter of 2011.
Reference is made to the Form 8-K filed by Wesco with the Securities and
Exchange Commission (the “SEC”) on February 7, 2011 for the terms of the
transaction and additional information. That report is available at no
charge at Wesco’s website, www.wescofinancial.com,
or the SEC’s website, www.sec.gov.
Certain statements contained in this press release are “forward looking”
statements within the meaning of the Private Securities Litigation
Reform Act of 1995, including the statement as to the expected closing
of the merger with Berkshire. These statements are not guaranties of
future performance and actual results may differ materially from those
Wesco’s Form 10-K for the year ended December 31, 2010 will be filed
electronically with the Securities and Exchange Commission next week,
and we invite shareholders, the financial media and others to access it
through the SEC’s website (www.sec.gov).
The Form 10-K will contain complete, audited financial statements,
management’s discussion and analysis of financial condition and results
of operations, and other information.