Income from continuing operations was $19.4 million, or $0.56 per share, for 2003 compared to $2.1 million, or $0.06 per share, for 2002. Income from the discontinued operations of Pyramid Life was $3.6 million, or $0.11 per share, (which included $3.9 million of net realized investment gains, $1.9 million of operating income and an additional loss on the sale of $2.2 million) for 2003, compared to a loss of $4.5 million, or $0.13 per share for 2002, (which included $0.2 million of net realized investment gains, $6.9 million of operating income and a loss on the sale of $11.6 million). For 2003, net income was $22.9 million, or $0.67 per share, compared to a loss of $2.4 million, or $0.07 per share for 2002.
a significant reduction in our major medical claims reserves as of December 31, 2004;
In December 2003, Continental General committed to invest $5.0 million in a limited partnership, NYLIM-GCR Fund I-2002, L.P., for an ownership share of approximately 4.13%. Investments by this Fund are expected to consist primarily of a diversified pool of subordinated real estate mezzanine debt and sub-tranche loans with an expected concentration in office assets located in major metropolitan areas. These capital commitments can be called by the partnership at any time during the commitment period to fund working capital needs or to purchase new investments. Once the commitment period expires, we are under no obligation to fund the remaining unfunded commitment, but may elect to do so. In 2004, the partnership made capital calls on Continental General’s limited partnership commitment of $4.4 million. At December 31, 2004, we had outstanding unfunded commitments totaling $0.6 million related to this limited partnership.
Dividends from our regulated insurance subsidiaries are subject to, and limited by, state insurance regulations. In 2005, Continental General could pay a dividend to Ceres Group, the parent company, of up to $10.3 million without prior approval of the state regulator. In 2005, Central Reserve is prohibited from paying any dividends without prior approval of its state regulator due to its statutory level of unassigned surplus. However, on February 24, 2005, Central Reserve received approval from the Ohio Department of Insurance to pay an extraordinary dividend of $12.0 million to Ceres Group. If our non-regulated subsidiaries do not generate sufficient fee income or we are unable to take dividends from our insurance subsidiaries to service all of our debt obligations, there may be a material adverse effect on our business, financial condition and results of operations, and a significant adverse effect on the market value of our common stock. In addition, if necessary, additional financing may not be available on terms favorable to us or at all.
our ability to meet risk-based or statutory capital requirements and the outcome of our efforts to meet these capital requirements;
A portion of the purchase price paid for Continental General Corporation was allocated to the value of business acquired based on the actuarially-determined present value of the expected pre-tax future profits from the business assuming a discount rate of 15.0%. Interest is accrued on the balance annually at a rate consistent with the rate credited on the acquired policies on the acquisition date, which ranges from 4.0% to 8.75%. Recoverability of the value of business acquired is evaluated periodically by comparing the current estimate of the present value of expected pre-tax future profits to the unamortized asset balance. If the current estimate is less than the existing asset balance, the difference would be charged to expense, and if the current estimate is higher than the existing asset balance, the difference will emerge into profits as earned.
Goodwill represents the excess of purchase price over the fair value of tangible and identifiable intangible net assets acquired. At December 31, 2004, goodwill was $10.7 million, all of which related to the Senior and Other segment, and represented approximately 1.4% of our total assets. Additionally, other intangible assets represent purchased assets that also lack physical substance, but can be distinguished from goodwill because of other legal rights or because the assets are capable of being sold or exchanged either on its own or in combination with a related contract asset or liability. At December 31, 2004, our other intangible assets consisted of $3.4 million in licenses, which represented 0.4% of our total assets.
accounted for as a deferred reinsurance gain in the accompanying audited consolidated financial statements and is being amortized into income based upon the emerging profit stream of the in force business.
We have authorized 1,900,000 Non-Voting Preferred Shares, $.001 par value. We have never issued any Non-Voting Preferred Shares. However, our Board is authorized at any time to provide for the issuance of
Investment securities - Fair value for fixed maturity securities is based on quoted market prices, where available. For fixed maturity securities not actively traded, fair value is estimated using values obtained from independent pricing services.