Liberty Mutual Holding Company Inc. and its subsidiaries reported net (loss) income of ($234) million and $829 million for the three and twelve months ended December 31, 2012, respectively, versus $285 million and $358 million in the same periods in 2011.

"Net income of $829 million for the year reflects the continued improvement in our operating results despite elevated levels of catastrophe losses," said David H. Long, President and CEO of Liberty Mutual Insurance. "Our net loss of $234 million in the quarter was principally driven by a $576 million after tax loss from Superstorm Sandy, and I'd like to express my gratitude to our claims professionals for their extraordinary response to help our policyholders post the event.

"Full year financial results also included a $125 million loss, after tax, from the refinancing of debt and a $64 million after tax loss associated with the realignment of our operating units.

"Net written premium growth remained robust at 7.6 percent for the year. I continue to be optimistic about future growth opportunities and with the momentum we have to improve profitability going forward."

In a release on March 1, the Company noted fourth quarter highlights:

-Revenues for the three months ended December 31, 2012 were $9.628 billion, an increase of $665 million or 7.4 percent over the same period in 2011.

-Net written premium ("NWP") for the three months ended December 31, 2012 was $8.491 billion, an increase of $783 million or 10.2 percent over the same period in 2011.

-Pre-tax operating loss before private limited partnership and limited liability company income for the three months ended December 31, 2012 was $622 million, which includes approximately $886 million of catastrophe losses due to Superstorm Sandy, versus pre-tax operating income ("PTOI") before LP and LLC income of $156 million in the same period in 2011.

-Pre-tax operating loss for the three months ended December 31, 2012 was $523 million versus PTOI of $263 million in the same period in 2011.

-Strategic Business Unit ("SBU") realignment expenses for the three months ended December 31, 2012 were $57 million versus zero for the same period in 2011.

-Loss on extinguishment of debt for the three months ended December 31, 2012 was $30 million, a decrease of $3 million or 9.1 percent from the same period in 2011. $56 million of debt with a weighted average interest rate of 10.75 percent was repurchased in the quarter. There was no debt issued and there were no debt maturities in the quarter.

-Net loss attributable to LMHC for the three months ended December 31, 2012 was $234 million versus $285 million net income attributable to LMHC in the same period in 2011.

-Cash flow from operations for the three months ended December 31, 2012 was $667 million, an increase of $31 million or 4.9 percent over the same period in 2011.

-The consolidated combined ratio before catastrophesA, net incurred losses attributable to prior yearsB and current accident year re-estimationC for the three months ended December 31, 2012 was 97.6 percent, a decrease of 0.8 points from the same period in 2011. Including the impact of catastrophes, net incurred losses attributable to prior years and current accident year re- estimation, the Company's combined ratio for the three months ended December 31, 2012 increased 8.7 points to 112.9 percent.

A Catastrophes include all current and prior accident year catastrophe losses excluding losses related to the Company's external reinsurance assumed lines except for Hurricane Isaac, the 2011 Australia floods, Cyclone Yasi, Japan earthquake and tsunami, New Zealand earthquakes, Hurricane Irene, Thailand floods, the 2011 and 2012 tornadoes and other severe storms in the U.S. including Superstorm Sandy. Catastrophe losses, where applicable, include the impact of accelerated earned catastrophe premiums and earned reinstatement premiums.B Net incurred losses attributable to prior years is defined as incurred losses attributable to prior years (excluding prior year losses related to natural catastrophes) including both earned premium attributable to prior years and amortization of retroactive reinsurance gains.CRe-estimation of the current accident year loss reserves for the nine months ended September 30, 2012 and September 30, 2011.

Year-to-Date Highlights

-Revenues for the twelve months ended December 31, 2012 were $36.944 billion, an increase of $2.273 billion or 6.6 percent over the same period in 2011.

-NWP for the twelve months ended December 31, 2012 was $33.555 billion, an increase of $2.360 billion or 7.6 percent over the same period in 2011.

-PTOI before LP and LLC income for the twelve months ended December 31, 2012 was $351 million versus $345 million of pre-tax operating loss before LP and LLC income in the same period in 2011.

-PTOI for the twelve months ended December 31, 2012 was $704 million, an increase of $466 million or 195.8 percent over the same period in 2011.

-SBU realignment expenses for the twelve months ended December 31, 2012 were $99 million versus zero for the same period in 2011.

-Loss on extinguishment of debt for the twelve months ended December 31, 2012 was $193 million, an increase of $83 million or 75.5 percent over the same period in 2011. $893 million of debt with a weighted average interest rate of 8.32 percent was repurchased in 2012, $1.800 billion was issued with a weighted average interest rate of 5.45 percent, and $204 million of debt matured.

-Net income attributable to LMHC for the twelve months ended December 31, 2012 was $829 million, an increase of $471 million or 131.6 percent over the same period in 2011.

-Cash flow from operations for the twelve months ended December 31, 2012 was $2.911 billion, an increase of $753 million or 34.9 percent over the same period in 2011.

-The consolidated combined ratio before catastrophes and net incurred losses attributable to prior years for the twelve months ended December 31, 2012 was 97.1 percent, a decrease of 0.5 points from the same period in 2011. Including the impact of catastrophes and net incurred losses attributable to prior years, the Company's combined ratio for the twelve months ended December 31, 2012 decreased 2.8 points to 104.7 percent.

Financial Condition as of December 31, 2012

-Total assets were $120.060 billion as of December 31, 2012, an increase of $3.209 billion over December 31, 2011.

-Total equity was $18.525 billion as of December 31, 2012, an increase of $926 million over December 31, 2011.

More information:

www.libertymutual.com/investors

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