The Board of Directors of the Erie Indemnity Company voted an 11.5 percent dividend increase on its common stock from 15.25 cents a share to 17 cents, while at the same time it recognized charges for capital losses in the fourth quarter totaling $21 million.
The increases were “a result of the Company’s continuing strong financial performance,” said the announcement. The Board also confirmed that in the year 2002 it would maintain the 25 percent management fee Erie receives as attorney-in-fact for managing the Erie Insurance Exchange.
Erie did recognize that “like many large institutional investors” it has suffered declines in the value of its investments over the past year. It took a $21 million charge during this quarter, and indicated that further charges might be made before the end of the year. The charges, however, said the Board will have no effect on the company’s overall value, or shareholders’ equity.
Realized losses from sales of investments in the last three months of the year totaled $12.2 million. Erie also recognized losses of around $4.5 million following the bankruptcy filing of energy giant Enron Corp.
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