CONSOLIDATED STATEMENTS OF INCOME >17 See notes to consolidated financial statements. Year Ended December 31 (in thousands, except per-share amounts) 2001 2000 1999 REVENUES: Premiums written: Direct $753,392 $592,734 $496,646  Assumed 90,917 80 93  Ceded (60,665) (48,542) (44,922) Net premiums written 783,644 544,272 451,817  (Increase) decrease in unearned premiums (67,764) (23,401) 20,818  Net premiums earned 715,880 520,871 472,635  Net investment income 147,487 82,946 67,259  Equity in net income of affiliates 41,309 — — Other income 42,525 7,438 11,349  947,201 611,255 551,243  EXPENSES: Provision for losses 208,136 154,326 174,143  Policy acquisition costs 84,262 51,471 58,777  Other operating expenses 132,516 57,167 62,659  Interest expense 17,803 — — Merger expenses — — 37,766  442,717 262,964 333,345  GAINS AND LOSSES: Net gains on sales of investments 6,824 4,179 1,568  Change in fair value of derivative instruments (5,777) — — 1,047 4,179 1,568  Pretax income 505,531 352,470 219,466  Provision for income taxes 145,112 103,532 71,328  Net income 360,419 248,938 148,138  Dividends to preferred stockholder 3,300 3,300 3,300  Net income available to common stockholders $357,119 $245,638 $144,838  Basic net income per share $ 3.95 $ 3.26 $ 1.96  Diluted net income per share $ 3.88 $ 3.22 $ 1.91  Average number of common shares outstanding – basic 90,474 75,268 73,950  Average number of common and common equivalent shares outstanding – diluted 91,958 76,298 75,712 