Progressive Earnings 2020-03-31

Progressive Earnings 2020-03-31

PGR 10Q Quarterly Report

Quick10K

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Progressive

Financials

Price	77.03	EPS	5
Shares	587	P/E	16
MCap	45,240	P/FCF	9
Net Debt	5,067	EBIT	3,969
TEV	50,307	TEV/EBIT	13
TTM 2019-09-30, in MM, except price, ratios

Filings

10-Q	2020-03-31	Filed 2020-05-05
10-K	2019-12-31	Filed 2020-03-02
10-Q	2019-09-30	Filed 2019-11-06
10-Q	2019-06-30	Filed 2019-08-07
10-Q	2019-03-31	Filed 2019-05-01
10-K	2018-12-31	Filed 2019-02-27
10-Q	2018-09-30	Filed 2018-10-31
10-Q	2018-06-30	Filed 2018-07-31
10-Q	2018-03-31	Filed 2018-05-02
10-K	2017-12-31	Filed 2018-02-27
10-Q	2017-09-30	Filed 2017-11-02
10-Q	2017-06-30	Filed 2017-08-02
10-Q	2017-03-31	Filed 2017-05-03
10-K	2016-12-31	Filed 2017-03-01
10-Q	2016-09-30	Filed 2016-11-03
10-Q	2016-06-30	Filed 2016-08-03
10-Q	2016-03-31	Filed 2016-05-05
10-K	2015-12-31	Filed 2016-02-29
10-Q	2015-09-30	Filed 2015-11-05
10-Q	2015-06-30	Filed 2015-08-05
10-Q	2015-03-31	Filed 2015-05-11
10-K	2014-12-31	Filed 2015-03-02
10-Q	2014-09-30	Filed 2014-10-29
10-Q	2014-06-30	Filed 2014-07-30
10-Q	2014-03-31	Filed 2014-05-12
10-K	2013-12-31	Filed 2014-02-26
10-Q	2013-09-30	Filed 2013-11-12
10-Q	2013-06-30	Filed 2013-08-06
10-Q	2013-03-31	Filed 2013-05-02
10-K	2012-12-31	Filed 2013-02-26
10-Q	2012-09-30	Filed 2012-11-01
10-Q	2012-06-30	Filed 2012-08-02
10-Q	2012-03-31	Filed 2012-05-07
10-K	2011-12-31	Filed 2012-02-28
10-Q	2011-09-30	Filed 2011-11-07
10-Q	2011-06-30	Filed 2011-08-09
10-Q	2011-03-31	Filed 2011-05-09
10-K	2010-12-31	Filed 2011-03-01
10-Q	2010-06-30	Filed 2010-08-05
10-Q	2010-03-31	Filed 2010-05-10
10-K	2009-12-31	Filed 2010-03-01

Reports

8-K	2020-07-15	Earnings, Exhibits
8-K	2020-06-17
8-K	2020-05-20
8-K	2020-05-08
8-K	2020-04-15
8-K	2020-04-08
8-K	2020-03-26
8-K	2020-03-17
8-K	2020-03-17
8-K	2020-02-19
8-K	2020-01-29
8-K	2019-12-11
8-K	2019-11-13
8-K	2019-10-16
8-K	2019-09-13
8-K	2019-08-14
8-K	2019-07-17
8-K	2019-06-12
8-K	2019-05-15
8-K	2019-04-16
8-K	2019-03-21
8-K	2019-03-13
8-K	2019-02-13
8-K	2019-01-23
8-K	2018-12-12
8-K	2018-11-14
8-K	2018-10-18
8-K	2018-10-16
8-K	2018-09-13
8-K	2018-08-20
8-K	2018-08-15
8-K	2018-07-17
8-K	2018-06-13
8-K	2018-05-16
8-K	2018-05-11
8-K	2018-04-17
8-K	2018-03-21
8-K	2018-03-14
8-K	2018-03-09
8-K	2018-02-14
8-K	2018-02-07
8-K	2018-01-24

Balance Sheet	Income Statement	Cash Flow
Assets, Equity	Rev, G Profit, Net Income	Ops, Inv, Fin

Document

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)



☒	Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended March 31, 2020



☐	Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from to

Commission File Number: 001-09518

THE PROGRESSIVE CORPORATION

(Exact name of registrant as specified in its charter)



Ohio			34-0963169
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

6300 Wilson Mills Road,	Mayfield Village,	Ohio	44143
(Address of principal executive offices)			(Zip Code)

(440) 461-5000

(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:



Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Shares, $1.00 Par Value	PGR	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Common Shares, $1.00 par value: 585,298,466 outstanding at March 31, 2020

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

The Progressive Corporation and Subsidiaries

Consolidated Statements of Comprehensive Income

(unaudited)



Three Months Ended March 31,	2020			2019
(millions — except per share amounts)
Revenues
Net premiums earned	$	9,430.7		$	8,459.8
Investment income	241.2			252.9
Net realized gains (losses) on securities:
Net realized gains (losses) on security sales	315.2			46.1
Net holding period gains (losses) on securities	(868.8		)	392.7
Net impairment losses recognized in earnings	0			(24.3		)
Total net realized gains (losses) on securities	(553.6		)	414.5
Fees and other revenues	153.5			130.2
Service revenues	51.6			42.6
Total revenues	9,323.4			9,300.0
Expenses
Losses and loss adjustment expenses	6,155.2			5,759.0
Policy acquisition costs	782.8			710.6
Other underwriting expenses	1,409.9			1,171.2
Investment expenses	5.3			6.2
Service expenses	47.5			38.1
Interest expense	48.0			47.4
Total expenses	8,448.7			7,732.5
Net Income
Income before income taxes	874.7			1,567.5
Provision for income taxes	175.6			484.7
Net income	699.1			1,082.8
Net (income) loss attributable to noncontrolling interest (NCI)	(6.4		)	(4.4		)
Net income attributable to Progressive	692.7			1,078.4
Other Comprehensive Income (Loss)
Changes in:
Total net unrealized gains (losses) on fixed-maturity securities	62.8			301.1
Net unrealized losses on forecasted transactions	0.2			0.2
Other comprehensive income (loss)	63.0			301.3
Other comprehensive (income) loss attributable to NCI	(0.5		)	(2.3		)
Comprehensive income attributable to Progressive	$	755.2		$	1,377.4
Computation of Earnings Per Common Share
Net income attributable to Progressive	$	692.7		$	1,078.4
Less: Preferred share dividends	6.7			6.7
Net income available to common shareholders	$	686.0		$	1,071.7
Average common shares outstanding - Basic	584.7			583.5
Net effect of dilutive stock-based compensation	2.2			3.1
Total average equivalent common shares - Diluted	586.9			586.6
Basic: Earnings per common share	$	1.17		$	1.84
Diluted: Earnings per common share	$	1.17		$	1.83

See notes to consolidated financial statements.

The Progressive Corporation and Subsidiaries

Consolidated Balance Sheets

(unaudited)



	March 31,						December 31,
(millions — except per share amount)	2020			2019			2019
Assets
Available-for-sale securities, at fair value:
Fixed maturities (amortized cost: $33,761.1, $27,574.5, and $32,643.1)	$	34,276.6		$	27,821.9		$	33,110.3
Short-term investments (amortized cost: $2,524.2, $2,584.7, and $1,798.8)	2,524.2			2,584.7			1,798.8
Total available-for-sale securities	36,800.8			30,406.6			34,909.1
Equity securities, at fair value:
Nonredeemable preferred stocks (cost: $1,017.5, $1,021.1, and $971.3)	933.4			1,095.4			1,038.9
Common equities (cost: $1,113.2, $1,194.3, and $1,125.5)	2,608.1			3,010.5			3,306.3
Total equity securities	3,541.5			4,105.9			4,345.2
Total investments	40,342.3			34,512.5			39,254.3
Cash and cash equivalents	369.5			158.0			226.2
Restricted cash	0.9			0.7			1.2
Total cash, cash equivalents, and restricted cash	370.4			158.7			227.4
Accrued investment income	171.6			172.1			181.3
Premiums receivable, net of allowance for doubtful accounts of $344.7, $236.9, and $283.2	7,568.3			7,189.8			7,507.3
Reinsurance recoverables	3,639.6			2,842.8			3,378.9
Prepaid reinsurance premiums	438.2			446.7			626.5
Deferred acquisition costs	1,095.8			999.1			1,056.5
Property and equipment, net of accumulated depreciation of $1,191.6, $1,064.9, and $1,138.1	1,215.1			1,127.3			1,213.7
Goodwill	452.7			452.7			452.7
Intangible assets, net of accumulated amortization of $328.5, $265.6, and $314.0	213.8			276.7			228.3
Net deferred income taxes	34.6			0			0
Other assets	722.8			671.9			768.4
Total assets	$	56,265.2		$	48,850.3		$	54,895.3
Liabilities
Unearned premiums	$	12,641.1		$	11,603.6		$	12,388.8
Loss and loss adjustment expense reserves	18,306.5			15,876.6			18,105.4
Net deferred income taxes	0			38.5			132.5
Accounts payable, accrued expenses, and other liabilities	5,346.5			4,594.3			5,962.7
Debt¹	5,394.0			4,405.4			4,407.1
Total liabilities	41,688.1			36,518.4			40,996.5
Redeemable noncontrolling interest (NCI)²	225.6			221.2			225.6
Shareholders’ Equity
Serial Preferred Shares (authorized 20.0)
Serial Preferred Shares, Series B, no par value (cumulative, liquidation preference $1,000 per share) (authorized, issued, and outstanding 0.5)	493.9			493.9			493.9
Common shares, $1.00 par value (authorized 900.0; issued 797.5, including treasury shares of 212.2, 213.5, and 212.9)	585.3			584.0			584.6
Paid-in capital	1,601.9			1,496.6			1,573.4
Retained earnings	11,266.2			9,358.1			10,679.6
Accumulated other comprehensive income (loss):
Net unrealized gains (losses) on fixed-maturity securities	423.6			195.5			360.8
Net unrealized losses on forecasted transactions	(16.2		)	(17.0		)	(16.4		)
Accumulated other comprehensive (income) loss attributable to NCI	(3.2		)	(0.4		)	(2.7		)
Total accumulated other comprehensive income (loss) attributable to Progressive	404.2			178.1			341.7
Total shareholders’ equity	14,351.5			12,110.7			13,673.2
Total liabilities, redeemable NCI, and shareholders’ equity	$	56,265.2		$	48,850.3		$	54,895.3

¹Consists of long-term debt. See Note 4 – Debt for further discussion.

²See Note 12 – Redeemable Noncontrolling Interest for further discussion.

See notes to consolidated financial statements.

The Progressive Corporation and Subsidiaries

Consolidated Statements of Changes in Shareholders’ Equity

(unaudited)



Three Months Ended March 31,	2020		2019
(millions — except per share amounts)
Serial Preferred Shares, No Par Value
Balance, beginning of period	$	493.9	$	493.9
Balance, end of period	493.9		493.9
Common Shares, $1.00 Par Value
Balance, beginning of period	584.6		583.2

EX-31.1	pgr-2020331exhibit311c.htm
EX-31.2	pgr-2020331exhibit312c.htm
EX-32.1	pgr-2020331exhibit321s.htm
EX-32.2	pgr-2020331exhibit322s.htm
EX-99	pgr-2020331exhibit99sh.htm

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company