Alleghany Notes 1stQ Results

Net earnings of Alleghany Corporation in the first quarter of 2003 were $7.7 million, or $1.04 per share of common stock, compared with net earnings of $25.8 million, or $3.44 per share of common stock, in the first quarter of 2002, according to John Burns, Jr., president and CEO of Alleghany.

Net gains on investment transactions after taxes in the first quarter of 2003 totalled $2.1 million, or $0.29 per share, compared with $22.5 million, or $3.00 per share, in the corresponding 2002 period. Operating income before the effect of investment transactions in the first quarter of 2003 was $5.6 million, or $0.75 per share, compared with $3.3 million, or $0.44 per share, in the corresponding 2002 period.

Alleghany Insurance Holdings, a holding company for Alleghany’s insurance operations, consisting principally of Capitol Transamerica Corporation, recorded pre-tax earnings of $4.9 million on revenues of $38.7 million in the first quarter of 2003, compared with pre-tax earnings of $1.2 million on revenues of $30.7 million in the 2002 first quarter. Alleghany Insurance Holdings recorded pre-tax investment income of $4.4 million and realized pre-tax investment gains of $0.9 million in the 2003 first quarter compared with pre-tax investment income of $3.3 million and realized pre-tax investment losses of $1.6 million in the corresponding 2002 period.

World Minerals recorded pre-tax earnings of $4.9 million on revenues of $62.1 million in the 2003 first quarter, compared with pre-tax earnings of $2.9 million on revenues of $56.9 million in the 2002 first quarter. World Minerals’ 2003 results reflect the favorable impact that the strengthening of the Euro against the dollar had on World Minerals’ reported revenues, somewhat lower energy costs (particularly natural gas), cost controls and, despite continued sluggish demand, a modest increase in tonnage volume shipped.

Heads & Threads recorded pre-tax earnings of $0.1 million on revenues of $28.0 million in the 2003 first quarter, compared with pre-tax earnings of $0.5 million on revenues of $27.9 million in the 2002 first quarter. The 2003 results primarily reflect reduced demand in the U.S. economy, competitive pricing pressures and increases in the cost of steel from China.