Exhibit 99.1
Contact: | Justin Cressall | |
Treasurer | ||
(441) 298-0753 |
PLATINUM UNDERWRITERS HOLDINGS, LTD. REPORTS
SECOND QUARTER 2005 FINANCIAL RESULTS
HAMILTON, BERMUDA, JULY 28, 2005 –Platinum Underwriters Holdings, Ltd. (NYSE: PTP) today reported results for the quarter ended June 30, 2005. Highlights for the second quarter of 2005 are as follows:
• | Net income was $68.0 million. | ||
• | Basic and diluted net income per common share was $1.57 and $1.39, respectively. | ||
• | Net premiums written were $423.0 million and net premiums earned were $431.5 million. | ||
• | GAAP combined ratio was 84.2%. | ||
• | Net investment income, including interest on funds held, was $28.9 million. |
Net premiums written for Platinum’s Property and Marine, Casualty and Finite Risk segments for the quarter ended June 30, 2005 were $135.0 million, $188.9 million and $99.1 million, respectively, representing 31.9%, 44.7% and 23.4%, respectively, of the total net premiums written. Combined ratios for these segments were 68.6%, 92.8% and 89.4%, respectively.
As of June 30, 2005 total assets were $4.20 billion. Total assets increased $777.2 million (or 22.7%) from $3.42 billion as of December 31, 2004. Cash and fixed maturity investments were $3.14 billion as of June 30, 2005. Cash and fixed maturity investments increased $681.4 million (or 27.7%) from $2.46 billion as of December 31, 2004, due primarily to strong cash flow from operations and the receipt of the net proceeds from the offering of $250 million aggregate principal amount of Series A 7.50% Notes due 2017.
As of June 30, 2005 shareholders’ equity was $1.27 billion and book value per share was $29.32. Shareholders’ equity increased $139.7 million (or $3.02 per share) from $1.13 billion (or $26.30 per share) as of December 31, 2004.
Steven H. Newman, Chairman of the Board, commented: “We had a very successful second quarter with excellent financial results and other important accomplishments. The completion of our $250 million debt offering and the affirmation of our A.M. Best rating of A (Excellent) provide us with a solid platform for the future.”
Gregory Morrison, Chief Executive Officer, commented: “Our second quarter results were excellent with strong net income and solid growth in book value. Business growth has been good and the reinsurance markets generally remain attractive.”
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The results for the quarter ended June 30, 2005, compared to the quarter ended June 30, 2004, are as follows:
• | Net income increased $18.2 million (or 36.5%). | ||
• | Basic and diluted net income per common share increased $0.42 (or 36.5%) and $0.38 (or 37.6%), respectively. | ||
• | Net premiums written increased $92.4 million (or 28.0%). Net premiums earned rose by $120.6 million (or 38.8%). | ||
• | GAAP combined ratio decreased by 1.7 percentage points. | ||
• | Net investment income, including interest on funds held, increased $9.5 million (or 49.2%). |
Compared to the quarter ended June 30, 2004, net premiums written increased by $33.1 million (or 32.5%) for Platinum’s Property and Marine segment and $76.1 million (or 67.5%) for the Casualty segment. Net premiums written decreased by $16.8 million (or 14.5%) for the Finite Risk segment.
Highlights for the six months ended June 30, 2005 are as follows:
• | Net income was $141.1 million. | ||
• | Basic and diluted net income per common share was $3.26 and $2.88, respectively. | ||
• | Net premiums written were $916.8 million and net premiums earned were $842.5 million. | ||
• | GAAP combined ratio was 84.4%. | ||
• | Net investment income, including interest on funds held, was $55.8 million. |
Net premiums written for Platinum’s Property and Marine, Casualty and Finite Risk segments for the six months ended June 30, 2005 were $320.0 million, $404.6 million and $192.2 million, respectively, representing 34.9%, 44.1% and 21.0%, respectively, of the total net premiums written. Combined ratios for these segments were 69.2%, 92.6% and 89.0%, respectively.
The results for the six months ended June 30, 2005, compared to the six months ended June 30, 2004, are as follows:
• | Net income increased $36.5 million (or 34.9%). | ||
• | Basic and diluted net income per common share increased $0.84 (or 34.7%) and $0.76 (or 35.8%), respectively. | ||
• | Net premiums written increased $106.1 million (or 13.1%). Net premiums earned rose by $210.6 million (or 33.3%). | ||
• | GAAP combined ratio decreased by 0.1 percentage points. |
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• | Net investment income, including interest on funds held, increased $18.9 million (or 51.4%). |
Compared to the six months ended June 30, 2004, net premiums written increased by $46.9 million (or 17.2%) for Platinum’s Property and Marine segment and $67.8 million (or 20.1%) for the Casualty segment. Net premiums written decreased by $8.6 million (or 4.3%) for the Finite Risk segment.
2005 Guidance
Based on the results for the six months ended June 30, 2005, Platinum currently estimates that, in the absence of any unusual catastrophe activity, its net premiums written and net premiums earned for 2005 will be approximately $1.6 billion and its GAAP combined ratio will be approximately 90% for the year. Platinum expects its combined portfolio of cash and fixed maturity investments to be approximately $3.5 billion at year-end 2005, including the proceeds from the forward purchase contracts forming a part of the Equity Security Units. On this basis, Platinum now projects that earnings for 2005 will exceed $4.25 per diluted common share based on an estimate of 47 million weighted average diluted common shares outstanding.
Financial Supplement
Platinum has posted a financial supplement on the Financial Reports page of the Investor Relations section of its website (Financial Supplement). The financial supplement provides additional detail regarding the financial performance of Platinum and its business segments.
Teleconference
Platinum will host a teleconference to discuss its financial results on Friday, July 29, 2005 at 8:00 am Eastern Time. The call can be accessed by dialing 877-502-9276 (US callers) or 913-981-5591 (international callers) or in a listen-only mode via the Investor Relations section of Platinum’swebsite at www.platinumre.com. Those who intend to access the teleconference should register at least ten minutes in advance to ensure access to the call.
The teleconference will be recorded and a replay will be available from 11:00 am Eastern Time on Friday, July 29, 2005 until midnight Eastern Time on Friday, August 5, 2005. To access the replay by telephone, dial 888-203-1112 (US callers) or 719-457-0820 (international callers) and specify passcode 4202335. The teleconference will also be archived on the Investor Relations section of Platinum’s website atwww.platinumre.com for the same period of time .
Non-GAAP Financial Measures
In presenting the Company’s results, management has included and discussed certain non-GAAP financial measures including segment underwriting income (or loss) and related underwriting ratios. Management believes these measures, which are used to monitor the results of operations, allow for a more complete understanding of the underlying business. These measures should not be viewed as a substitute for those determined in accordance with generally accepted accounting principles (GAAP). A reconciliation of such measures to the most comparable GAAP figures (income before income tax expense) in accordance with Regulation G is presented in the attached segment financial information.
About Platinum
Platinum Underwriters Holdings, Ltd. (NYSE: PTP) is a leading provider of property, casualty and finite risk reinsurance coverages, through reinsurance intermediaries, to a diverse clientele on a worldwide basis. Platinum operates through its principal subsidiaries in Bermuda, the United States
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and the United Kingdom. The Company has a financial strength rating of A (Excellent) from A.M. Best Company, Inc. For further information, please visit Platinum’s website atwww.platinumre.com.
Safe Harbor Statement Regarding Forwarding-Looking Statements
Management believes certain statements in this press release may constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements include all statements that do not relate solely to historical or current facts, and can be identified by the use of words such as “may,” “should,” “estimate,” “expect,” “anticipate,” “intend,” “believe,” “predict,” “potential,” or words of similar import. Forward-looking statements are necessarily based on estimates and assumptions that are inherently subject to significant business, economic and competitive uncertainties and risks, many of which are subject to change. These uncertainties and risks include, but are not limited to, conducting operations in a competitive environment; our ability to maintain our A.M. Best Company rating; significant weather-related or other natural or man-made disasters over which the Company has no control; the effectiveness of our loss limitation methods and pricing models; the adequacy of the Company’s liability for unpaid losses and loss adjustment expenses; the availability of retrocessional reinsurance on acceptable terms; our ability to maintain our business relationships with reinsurance brokers; general political and economic conditions, including the effects of civil unrest, war or a prolonged U.S. or global economic downturn or recession; the cyclicality of the property and casualty reinsurance business; market volatility and interest rate and currency exchange rate fluctuation; tax, regulatory or legal restrictions or limitations applicable to the Company or the property and casualty reinsurance business generally; and changes in the Company’s plans, strategies, objectives, expectations or intentions, which may happen at any time at the Company’s discretion. As a consequence, current plans, anticipated actions and future financial condition and results may differ from those expressed in any forward-looking statements made by or on behalf of the Company. Additionally, forward-looking statements speak only as of the date they are made, and we undertake no obligation to release publicly the results of any future revisions or updates we may make to forward-looking statements to reflect new information or circumstances after the date hereof or to reflect the occurrence of future events.
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Platinum Underwriters Holdings, Ltd.
Consolidated Statements of Income and Comprehensive Income
For The Three and Six Months Ended June 30, 2005 and 2004 (Unaudited)
($ in thousands, except per share amounts)
For The Three and Six Months Ended June 30, 2005 and 2004 (Unaudited)
($ in thousands, except per share amounts)
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, 2005 | June 30, 2004 | June 30, 2005 | June 30, 2004 | |||||||||||||
Revenues | ||||||||||||||||
Net premiums earned | $ | 431,470 | $ | 310,867 | $ | 842,510 | $ | 631,909 | ||||||||
Net investment income | 28,904 | 19,377 | 55,809 | 36,861 | ||||||||||||
Net realized capital losses | (555 | ) | (1,279 | ) | (183 | ) | (827 | ) | ||||||||
Other income | 588 | 605 | 232 | 1,116 | ||||||||||||
Total revenues | 460,407 | 329,570 | 898,368 | 669,059 | ||||||||||||
Expenses | ||||||||||||||||
Losses and loss adjustment expenses | 240,852 | 189,466 | 478,550 | 351,435 | ||||||||||||
Acquisition expenses | 103,928 | 62,694 | 197,177 | 151,615 | ||||||||||||
Other underwriting expenses | 18,545 | 15,045 | 35,152 | 30,850 | ||||||||||||
Corporate expenses | 4,935 | 4,217 | 8,336 | 7,186 | ||||||||||||
Net foreign currency exchange losses | 160 | 1,168 | 1,958 | 302 | ||||||||||||
Interest expense | 4,174 | 2,324 | 6,347 | 4,630 | ||||||||||||
Total expenses | 372,594 | 274,914 | 727,520 | 546,018 | ||||||||||||
Income before income tax expense | 87,813 | 54,656 | 170,848 | 123,041 | ||||||||||||
Income tax expense | 19,828 | 4,857 | 29,775 | 18,428 | ||||||||||||
Net income | $ | 67,985 | $ | 49,799 | $ | 141,073 | $ | 104,613 | ||||||||
Basic | ||||||||||||||||
Weighted average shares outstanding | 43,293 | 43,290 | 43,224 | 43,216 | ||||||||||||
Basic earnings per share | $ | 1.57 | $ | 1.15 | $ | 3.26 | $ | 2.42 | ||||||||
Diluted | ||||||||||||||||
Weighted average shares outstanding | 50,009 | 50,788 | 50,040 | 50,788 | ||||||||||||
Diluted earnings per share | $ | 1.39 | $ | 1.01 | $ | 2.88 | $ | 2.12 | ||||||||
Comprehensive income (loss) | ||||||||||||||||
Net income | $ | 67,985 | $ | 49,799 | $ | 141,073 | $ | 104,613 | ||||||||
Other comprehensive income (loss), net of tax | 33,005 | (52,479 | ) | (1,615 | ) | (33,335 | ) | |||||||||
Comprehensive income (loss) | $ | 100,990 | $ | (2,680 | ) | $ | 139,458 | $ | 71,278 | |||||||
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Platinum Underwriters Holdings, Ltd.
Condensed Consolidated Balance Sheets
As of June 30, 2005 and December 31, 2004
($ in thousands, except per share data)
As of June 30, 2005 and December 31, 2004
($ in thousands, except per share data)
June 30, 2005 | December 31, 2004 | |||||||
(Unaudited) | ||||||||
Assets | ||||||||
Investments and cash and cash equivalents | $ | 3,138,231 | $ | 2,456,868 | ||||
Receivables | 576,457 | 580,048 | ||||||
Accrued investment income | 28,316 | 23,663 | ||||||
Reinsurance balances (prepaid and recoverable) | 16,688 | 4,892 | ||||||
Deferred acquisition costs | 144,844 | 136,038 | ||||||
Funds held | 271,795 | 198,048 | ||||||
Other assets | 22,905 | 22,438 | ||||||
Total assets | $ | 4,199,236 | $ | 3,421,995 | ||||
Liabilities | ||||||||
Unpaid losses and loss adjustment expenses | $ | 1,559,092 | $ | 1,380,955 | ||||
Unearned premiums | 575,727 | 502,423 | ||||||
Debt obligations | 387,500 | 137,500 | ||||||
Commissions payable | 216,459 | 181,925 | ||||||
Other liabilities | 187,730 | 86,189 | ||||||
Total liabilities | 2,926,508 | 2,288,992 | ||||||
Total shareholders’ equity | 1,272,728 | 1,133,003 | ||||||
Total liabilities and shareholders’ equity | $ | 4,199,236 | $ | 3,421,995 | ||||
Book value per share | $ | 29.32 | $ | 26.30 | ||||
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Platinum Underwriters Holdings, Ltd.
Segment Reporting
For the Three Months Ended June 30, 2005 and 2004 (Unaudited)
($ in thousands)
For the Three Months Ended June 30, 2005 and 2004 (Unaudited)
($ in thousands)
Property | ||||||||||||||||
and Marine | Casualty | Finite Risk | Total | |||||||||||||
Three Months Ended June 30, 2005 | ||||||||||||||||
Segment underwrting results | ||||||||||||||||
Net premiums written | $ | 134,953 | 188,890 | 99,116 | $ | 422,959 | ||||||||||
Net premiums earned | 140,669 | 198,723 | 92,078 | 431,470 | ||||||||||||
Losses and loss adjustment expenses | 58,499 | 127,531 | 54,822 | 240,852 | ||||||||||||
Acquisition expenses | 29,695 | 47,963 | 26,270 | 103,928 | ||||||||||||
Other underwriting expenses | 8,240 | 8,972 | 1,333 | 18,545 | ||||||||||||
Total underwriting expenses | 96,434 | 184,466 | 82,425 | 363,325 | ||||||||||||
Segment underwriting income | $ | 44,235 | 14,257 | 9,653 | 68,145 | |||||||||||
Net investment income | 28,904 | |||||||||||||||
Net realized capital losses | (555 | ) | ||||||||||||||
Net foreign currency exchange losses | (160 | ) | ||||||||||||||
Other income | 588 | |||||||||||||||
Corporate expenses | (4,935 | ) | ||||||||||||||
Interest expense | (4,174 | ) | ||||||||||||||
Income before income tax expense | $ | 87,813 | ||||||||||||||
GAAP underwriting ratios: | ||||||||||||||||
Loss and loss adjustment expense | 41.6 | % | 64.2 | % | 59.5 | % | 55.8 | % | ||||||||
Acquisition expense | 21.1 | % | 24.1 | % | 28.5 | % | 24.1 | % | ||||||||
Other underwriting expense | 5.9 | % | 4.5 | % | 1.4 | % | 4.3 | % | ||||||||
Combined | 68.6 | % | 92.8 | % | 89.4 | % | 84.2 | % | ||||||||
Three Months Ended June 30, 2004 | ||||||||||||||||
Segment underwrting results | ||||||||||||||||
Net premiums written | $ | 101,841 | 112,761 | 115,925 | $ | 330,527 | ||||||||||
Net premiums earned | 99,928 | 132,230 | 78,709 | 310,867 | ||||||||||||
Losses and loss adjustment expenses | 40,974 | 93,391 | 55,101 | 189,466 | ||||||||||||
Acquisition expenses | 14,905 | 31,994 | 15,795 | 62,694 | ||||||||||||
Other underwriting expenses | 7,174 | 5,305 | 2,567 | 15,046 | ||||||||||||
Total underwriting expenses | 63,053 | 130,690 | 73,463 | 267,206 | ||||||||||||
Segment underwriting income | $ | 36,875 | 1,540 | 5,246 | 43,661 | |||||||||||
Net investment income | 19,377 | |||||||||||||||
Net realized capital losses | (1,279 | ) | ||||||||||||||
Net foreign currency exchange losses | (1,168 | ) | ||||||||||||||
Other income | 605 | |||||||||||||||
Corporate expenses | (4,216 | ) | ||||||||||||||
Interest expense | (2,324 | ) | ||||||||||||||
Income before income tax expense | $ | 54,656 | ||||||||||||||
GAAP underwriting ratios: | ||||||||||||||||
Loss and loss adjustment expense | 41.0 | % | 70.6 | % | 70.0 | % | 60.9 | % | ||||||||
Acquisition expense | 14.9 | % | 24.2 | % | 20.1 | % | 20.2 | % | ||||||||
Other underwriting expense | 7.2 | % | 4.0 | % | 3.3 | % | 4.8 | % | ||||||||
Combined | 63.1 | % | 98.8 | % | 93.4 | % | 85.9 | % | ||||||||
The GAAP underwriting ratios are calculated by dividing each item above by net premiums earned.
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Platinum Underwriters Holdings, Ltd.
Segment Reporting
For the Six Months Ended June 30, 2005 and 2004 (Unaudited)
($ in thousands)
For the Six Months Ended June 30, 2005 and 2004 (Unaudited)
($ in thousands)
Property | ||||||||||||||||
and Marine | Casualty | Finite Risk | Total | |||||||||||||
Six Months Ended June 30, 2005 | ||||||||||||||||
Segment underwrting results | ||||||||||||||||
Net premiums written | $ | 320,002 | 404,559 | 192,197 | $ | 916,758 | ||||||||||
Net premiums earned | 268,866 | 383,491 | 190,153 | 842,510 | ||||||||||||
Losses and loss adjustment expenses | 118,539 | 245,969 | 114,042 | 478,550 | ||||||||||||
Acquisition expenses | 51,684 | 93,165 | 52,328 | 197,177 | ||||||||||||
Other underwriting expenses | 15,963 | 16,285 | 2,904 | 35,152 | ||||||||||||
Total underwriting expenses | 186,186 | 355,419 | 169,274 | 710,879 | ||||||||||||
Segment underwriting income | $ | 82,680 | 28,072 | 20,879 | 131,631 | |||||||||||
Net investment income | 55,809 | |||||||||||||||
Net realized capital losses | (183 | ) | ||||||||||||||
Net foreign currency exchange losses | (1,958 | ) | ||||||||||||||
Other income | 232 | |||||||||||||||
Corporate expenses | (8,336 | ) | ||||||||||||||
Interest expense | (6,347 | ) | ||||||||||||||
Income before income tax expense | $ | 170,848 | ||||||||||||||
GAAP underwriting ratios: | ||||||||||||||||
Loss and loss adjustment expense | 44.1 | % | 64.1 | % | 60.0 | % | 56.8 | % | ||||||||
Acquisition expense | 19.2 | % | 24.3 | % | 27.5 | % | 23.4 | % | ||||||||
Other underwriting expense | 5.9 | % | 4.2 | % | 1.5 | % | 4.2 | % | ||||||||
Combined | 69.2 | % | 92.6 | % | 89.0 | % | 84.4 | % | ||||||||
Six Months Ended June 30, 2004 | ||||||||||||||||
Segment underwrting results | ||||||||||||||||
Net premiums written | $ | 273,135 | 336,726 | 200,772 | $ | 810,633 | ||||||||||
Net premiums earned | 217,993 | 268,452 | 145,464 | 631,909 | ||||||||||||
Losses and loss adjustment expenses | 89,552 | 188,175 | 73,708 | 351,435 | ||||||||||||
Acquisition expenses | 36,657 | 66,830 | 48,128 | 151,615 | ||||||||||||
Other underwriting expenses | 15,324 | 10,362 | 5,164 | 30,850 | ||||||||||||
Total underwriting expenses | 141,533 | 265,367 | 127,000 | 533,900 | ||||||||||||
Segment underwriting income | $ | 76,460 | 3,085 | 18,464 | 98,009 | |||||||||||
Net investment income | 36,861 | |||||||||||||||
Net realized capital losses | (827 | ) | ||||||||||||||
Net foreign currency exchange losses | (302 | ) | ||||||||||||||
Other income | 1,116 | |||||||||||||||
Corporate expenses | (7,186 | ) | ||||||||||||||
Interest expense | (4,630 | ) | ||||||||||||||
Income before income tax expense | $ | 123,041 | ||||||||||||||
GAAP underwriting ratios: | ||||||||||||||||
Loss and loss adjustment expense | 41.1 | % | 70.1 | % | 50.7 | % | 55.6 | % | ||||||||
Acquisition expense | 16.8 | % | 24.9 | % | 33.1 | % | 24.0 | % | ||||||||
Other underwriting expense | 7.0 | % | 3.9 | % | 3.6 | % | 4.9 | % | ||||||||
Combined | 64.9 | % | 98.9 | % | 87.4 | % | 84.5 | % | ||||||||
The GAAP underwriting ratios are calculated by dividing each item above by net premiums earned.