UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
May 10, 2019
MAIDEN HOLDINGS, LTD.
(Exact name of registrant as specified in its charter)
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| | | | |
Bermuda (State or other jurisdiction of incorporation) | | 001-34042 (Commission File Number) | | 98-0570192 (IRS Employer Identification No.) |
94 Pitts Bay Road, Pembroke HM08, Bermuda
(Address of principal executive offices and zip code)
(441) 298-4900
(Registrant's telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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| | | | |
| | | o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | | |
| | | o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | | |
| | | o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | | |
| | | o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | | |
Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company o
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. o
Securities registered pursuant to Section 12(b) of the Act:
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| | | | |
| Title of Each Class | | Trading symbol(s) | | Name of Each Exchange on Which Registered |
| Common Shares, par value $0.01 per share | | MHLD | | NASDAQ Global Select Market |
| Series A Preference Shares, par value $0.01 per share | | MH.PA | | New York Stock Exchange, Inc. |
| Series C Preference Shares, par value $0.01 per share | | MH.PC | | New York Stock Exchange, Inc. |
| Series D Preference Shares, par value $0.01 per share | | MH.PD | | New York Stock Exchange, Inc. |
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| |
| Item 2.02 | Results of Operations and Financial Condition. |
On May 10, 2019, the Company issued a press release announcing its results of operations for the three months ended March 31, 2019. A copy of the press release is furnished herewith as Exhibit 99.1 and incorporated herein by reference.
The information contained in this Item 2.02 and in the accompanying exhibit shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act") or otherwise subject to the liabilities of that section, or incorporated by reference in any filing under the Exchange Act or the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.
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| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibit
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| | |
| Exhibit | | |
| No. | | Description |
| | | |
| 99.1 | | |
| | | |
* Schedules and Exhibits have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The Registrant hereby agrees to supplementally furnish to the SEC upon request any omitted schedule or exhibit to the Master Agreement.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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| | | |
| Date: | May 10, 2019 | MAIDEN HOLDINGS, LTD. |
| | | | |
| | | By: | /s/ Denis M. Butkovic |
| | | | Denis M. Butkovic |
| | | | Senior Vice President, General Counsel and Secretary |
EXHIBIT INDEX
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| | |
| Exhibit | | |
| No. | | Description |
| | | |
| 99.1 | | |
Exhibit 99.1
PRESS RELEASE
Maiden Holdings, Ltd. Announces
First Quarter 2019 Financial Results
PEMBROKE, Bermuda, May 10, 2019 - Maiden Holdings, Ltd. (NASDAQ: MHLD) ("Maiden" or the "Company") today reported a first quarter 2019 net loss attributable to Maiden common shareholders of $36.6 million or $0.44 per diluted common share, compared to a net income attributable to Maiden common shareholders of $13.7 million or $0.16 per diluted common share in the first quarter of 2018. The non-GAAP operating loss(11) was $26.9 million, or $0.32 per diluted common share compared with a non-GAAP operating income of $5.8 million, or $0.07 per diluted common share in the first quarter of 2018.
Maiden's book value per common share(1) was $1.44 at March 31, 2019, an increase of 33.3% from December 31, 2018.
Consolidated Results for the Quarter Ended March 31, 2019
In the first quarter of 2019, gross premiums written were $(561.1) million, compared to $623.3 million in the prior year quarter, primarily due to the termination of both quota share contracts in the AmTrust Reinsurance segment and the return of unearned premiums on certain lines covered by the Partial Termination Agreement with AmTrust. As previously reported, both terminations were effective January 1, 2019. Net premiums earned were $183.1 million in first quarter 2019, compared to $516.8 million in first quarter 2018 due to the combined impact of the terminated quota share contracts within the AmTrust Reinsurance segment and non-renewals in Maiden's European Capital Solutions business and a reduction in the German Auto programs produced by the Company's IIS unit within its Diversified Reinsurance segment.
First quarter 2019 net loss and loss adjustment expenses decreased to $152.7 million from $353.2 million in the first quarter of 2018, due primarily to lower earned premiums for the AmTrust Reinsurance segment. The first quarter 2019 loss ratio(6) was 83.0% compared to 67.9% reported in first quarter 2018. The increase in the loss ratio was primarily due to a change in the mix of business resulting from the Partial Termination Amendment entered into with AmTrust. Prior year adverse loss development was $7.3 million for the first quarter of 2019, compared to $9.8 million for the same period in 2018.
Commission and other acquisition expenses decreased to $69.6 million in first quarter 2019, from $166.6 million in the first quarter of 2018 due to significantly lower earned premiums resulting from the terminations in the AmTrust Reinsurance segment. The commission and other acquisition expense ratio increased 5.9 points to 37.9% for the first quarter of 2019 from 32.0% for the same period in 2018 as a result of the additional ceding commission agreed to as part of the Partial Termination Amendment with AmTrust.
General and administrative expenses for the first quarter of 2019 totaled $15.9 million, compared to $15.7 million in the first quarter of 2018. Non-recurring expenses were $3.0 million during the first quarter of 2019, primarily related to salaries and related benefits for headcount reductions occurring in 2019. The general and administrative expense ratio(8) in the first quarter of 2019 increased to 8.7% from 3.0% in first quarter 2018 primarily as a result of lower earned premiums, while the total expense ratio(9) was 46.6% in first quarter 2019 compared with 35.0% for the same period last year.
The combined ratio(10) for first quarter 2019 totaled 129.6%, compared with 102.9% in first quarter 2018.
First quarter 2019 net investment income decreased modestly to $32.0 million from $32.9 million in the first quarter of 2018 largely due to the decline in average yield to 3.1% from 3.2% in the same period in 2018.
Additional information regarding the Company’s results of operations can be found in the Company’s Quarterly Report on Form 10-Q filing made concurrent with this news release.
Quarterly Dividends
The Company's Board of Directors did not authorize any quarterly dividends related to either its common shares or any series of its preferred shares. Additional information regarding the Company’s dividends can be found in the Company’s Quarterly Report on Form 10-Q filing made concurrent with this news release.
Other Financial Matters
Total assets were $4.6 billion at March 31, 2019, compared to $5.3 billion at December 31, 2018. Shareholders' equity was $584.3 million at March 31, 2019, compared to $554.3 million at December 31, 2018.
(1)(11) Please see the Non-GAAP Financial Measures table for additional information on these non-GAAP financial measures and reconciliation of these measures to GAAP measures.
(6)(7)(8)(9)(10) Loss ratio, commission and other acquisition expense ratio, general and administrative expense ratio, expense ratio and combined ratio are non-GAAP operating metrics. Please see the additional information on these measures under Non-GAAP Financial Measures tables.
About Maiden Holdings, Ltd.
Maiden Holdings, Ltd. is a Bermuda-based holding company formed in 2007. The Company is focused on serving the needs of regional and specialty insurers in Europe and select other global markets by providing innovative reinsurance solutions designed to support their capital needs.
Forward Looking Statements
This release contains "forward-looking statements" which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The forward-looking statements are based on the Company's current expectations and beliefs concerning future developments and their potential effects on the Company. There can be no assurance that actual developments will be those anticipated by the Company. Actual results may differ materially from those projected as a result of significant risks and uncertainties, including non-receipt of the expected payments, changes in interest rates, effect of the performance of financial markets on investment income and fair values of investments, developments of claims and the effect on loss reserves, accuracy in projecting loss reserves, the impact of competition and pricing environments, changes in the demand for the Company's products, the effect of general economic conditions and unusual frequency of storm activity, adverse state and federal legislation, regulations and regulatory investigations into industry practices, developments relating to existing agreements, heightened competition, changes in pricing environments, and changes in asset valuations. In addition, the Company may not be able to complete the proposed transaction with Enstar on the terms summarized above or other acceptable terms, or at all, due to a number of factors, including but not limited to failure to obtain governmental and regulatory approvals or to satisfy other closing conditions. Additional information about these risks and uncertainties, as well as others that may cause actual results to differ materially from those projected is contained in Item 1A. Risk Factors in the Company's Annual Report on Form 10-K for the year ended December 31, 2018 as updated in periodic filings with the SEC. However these factors should not be construed as exhaustive. Forward-looking statements speak only as of the date they are made and the Company undertakes no obligation to update or revise any forward-looking statement that may be made from time to time, whether as a result of new information, future developments or otherwise, except as required by law.
CONTACT:
Sard Verbinnen & Co.
Maiden-SVC@sardverb.com
MAIDEN HOLDINGS, LTD.
CONSOLIDATED BALANCE SHEETS
(In thousands of U.S. dollars, except share and per share data)
|
| | | | | | | | |
| | | March 31,
2019 | | December 31, 2018 |
| ASSETS | | (Unaudited) | | (Audited) |
| Investments: | | | | |
| Fixed maturities, available-for-sale, at fair value (amortized cost 2019 - $3,130,981; 2018 - $3,109,980) | | $ | 3,131,934 |
| | $ | 3,051,568 |
|
| Fixed maturities, held-to-maturity, at amortized cost (fair value 2018 - $998,012) | | — |
| | 1,015,681 |
|
| Other investments, at fair value | | 24,693 |
| | 23,716 |
|
| Total investments | | 3,156,627 |
| | 4,090,965 |
|
| Cash and cash equivalents | | 89,521 |
| | 200,841 |
|
| Restricted cash and cash equivalents | | 42,334 |
| | 130,148 |
|
| Accrued investment income | | 27,788 |
| | 27,824 |
|
| Reinsurance balances receivable, net | | 72,867 |
| | 67,308 |
|
| Loan to related party | | 167,975 |
| | 167,975 |
|
| Deferred commission and other acquisition expenses, net | | 161,976 |
| | 388,442 |
|
| Funds withheld receivable | | 652,087 |
| | 27,039 |
|
| Other assets | | 14,729 |
| | 12,443 |
|
| Assets held for sale | | 177,452 |
| | 174,475 |
|
| Total assets | | $ | 4,563,356 |
| | $ | 5,287,460 |
|
| LIABILITIES | | | | |
| Reserve for loss and loss adjustment expenses | | $ | 2,980,113 |
| | $ | 3,055,976 |
|
| Unearned premiums | | 455,175 |
| | 1,200,419 |
|
| Reinsurance balances payable, net | | 117,943 |
| | 52,594 |
|
| Accrued expenses and other liabilities | | 12,087 |
| | 12,900 |
|
| Senior notes - principal amount | | 262,500 |
| | 262,500 |
|
| Less: unamortized debt issuance costs | | 7,753 |
| | 7,806 |
|
| Senior notes, net | | 254,747 |
| | 254,694 |
|
| Liabilities held for sale | | 159,002 |
| | 155,961 |
|
| Total liabilities | | 3,979,067 |
| | 4,732,544 |
|
| Commitments and Contingencies | | | | |
| EQUITY | | | | |
| Preference shares | | 465,000 |
| | 465,000 |
|
| Common shares | | 881 |
| | 879 |
|
| Additional paid-in capital | | 750,670 |
| | 749,418 |
|
| Accumulated other comprehensive loss | | (220 | ) | | (65,616 | ) |
| Accumulated deficit | | (600,527 | ) | | (563,891 | ) |
| Treasury shares, at cost | | (31,515 | ) | | (31,515 | ) |
| Total Maiden Shareholders’ Equity | | 584,289 |
| | 554,275 |
|
| Noncontrolling interest in subsidiaries | | — |
| | 641 |
|
| Total Equity | | 584,289 |
| | 554,916 |
|
| Total Liabilities and Equity | | $ | 4,563,356 |
| | $ | 5,287,460 |
|
| | | | | |
Book value per common share(1) | | $ | 1.44 |
| | $ | 1.08 |
|
| | | | | |
| Common shares outstanding | | 83,064,173 |
| | 82,948,577 |
|
MAIDEN HOLDINGS, LTD.
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(In thousands of U.S. dollars, except share and per share data)
|
| | | | | | | | |
| | | For the Three Months Ended March 31, |
| | | 2019 | | 2018 |
| Revenues: | | | | |
| Gross premiums written | | $ | (561,139 | ) | | $ | 623,328 |
|
| Net premiums written | | $ | (561,530 | ) | | $ | 622,651 |
|
| Change in unearned premiums | | 744,632 |
| | (105,838 | ) |
| Net premiums earned | | 183,102 |
| | 516,813 |
|
| Other insurance revenue | | 750 |
| | 3,726 |
|
| Net investment income | | 32,022 |
| | 32,869 |
|
| Net realized (losses) gains on investment | | (11,101 | ) | | 357 |
|
| Total revenues | | 204,773 |
| | 553,765 |
|
| Expenses: | | | | |
| Net loss and loss adjustment expenses | | 152,689 |
| | 353,206 |
|
| Commission and other acquisition expenses | | 69,617 |
| | 166,628 |
|
| General and administrative expenses | | 15,939 |
| | 15,671 |
|
| Total expenses | | 238,245 |
| | 535,505 |
|
Non-GAAP (loss) income from operations(2) | | (33,472 | ) | | 18,260 |
|
| Other expenses | | | | |
| Interest and amortization expenses | | (4,829 | ) | | (4,829 | ) |
| Foreign exchange and other gains (losses) | | 4,979 |
| | (2,407 | ) |
| Total other expenses | | 150 |
| | (7,236 | ) |
| (Loss) income before income taxes | | (33,322 | ) | | 11,024 |
|
| Less: income tax benefit | | (38 | ) | | (1,324 | ) |
| Net (loss) income from continuing operations | | (33,284 | ) | | 12,348 |
|
| (Loss) income from discontinued operations, net of income tax | | (3,352 | ) | | 9,995 |
|
| Net (loss) income | | (36,636 | ) | | 22,343 |
|
| Net income attributable to noncontrolling interest | | — |
| | (71 | ) |
| Net (loss) income attributable to Maiden | | (36,636 | ) | | 22,272 |
|
Dividends on preference shares(3) | | — |
| | (8,545 | ) |
| Net (loss) income attributable to Maiden common shareholders | | $ | (36,636 | ) | | $ | 13,727 |
|
| Basic (loss) earnings from continuing operations per common share attributable to Maiden shareholders | | $ | (0.40 | ) | | $ | 0.05 |
|
| Basic (loss) earnings from discontinued operations per common share attributable to Maiden shareholders | | (0.04 | ) | | 0.12 |
|
| Basic (loss) earnings per common share attributable to Maiden shareholders | | $ | (0.44 | ) | | $ | 0.17 |
|
Diluted (loss) earnings from continuing operations per common share attributable to Maiden shareholders(15) | | $ | (0.40 | ) | | $ | 0.04 |
|
Diluted (loss) earnings from discontinued operations per common share attributable to Maiden shareholders(15) | | $ | (0.04 | ) | | $ | 0.12 |
|
Diluted (loss) earnings per common share attributable to Maiden shareholders(15) | | $ | (0.44 | ) | | $ | 0.16 |
|
| Dividends declared per common share | | $ | — |
| | $ | 0.15 |
|
| Annualized return on average common equity | | (142.5 | )% | | 7.6 | % |
| Weighted average number of common shares - basic | | 82,965,156 |
| | 83,040,413 |
|
Adjusted weighted average number of common shares and assumed conversions - diluted(15) | | 82,965,156 |
| | 83,318,542 |
|
MAIDEN HOLDINGS, LTD.
SUPPLEMENTAL FINANCIAL DATA - SEGMENT INFORMATION (Unaudited)
(in thousands of U.S. dollars)
|
| | | | | | | | | | | | | | | | |
| For the Three Months Ended March 31, 2019 | | Diversified Reinsurance | | AmTrust Reinsurance | | Other | | Total |
| Gross premiums written | | $ | 15,338 |
| | $ | (576,477 | ) | | $ | — |
| | $ | (561,139 | ) |
| Net premiums written | | $ | 14,947 |
| | $ | (576,477 | ) | | $ | — |
| | $ | (561,530 | ) |
| Net premiums earned | | $ | 25,292 |
| | $ | 157,810 |
| | $ | — |
| | $ | 183,102 |
|
| Other insurance revenue | | 750 |
| | — |
| | — |
| | 750 |
|
| Net loss and loss adjustment expenses ("loss and LAE") | | (14,391 | ) | | (138,070 | ) | | (228 | ) | | (152,689 | ) |
| Commission and other acquisition expenses | | (9,261 | ) | | (60,356 | ) | | — |
| | (69,617 | ) |
General and administrative expenses(4) | | (3,031 | ) | | (1,266 | ) | | — |
| | (4,297 | ) |
Underwriting loss(5) | | $ | (641 | ) | | $ | (41,882 | ) | | $ | (228 | ) | | (42,751 | ) |
| Reconciliation to net loss from continuing operations | | | | | | | | |
| Net investment income and realized losses on investment | | | | | | | | 20,921 |
|
| Interest and amortization expenses | | | | | | | | (4,829 | ) |
| Foreign exchange and other gains | | | | | | | | 4,979 |
|
Other general and administrative expenses(4) | | | | | | | | (11,642 | ) |
| Income tax benefit | | | | | | | | 38 |
|
| Net loss from continuing operations | | | | | | | | $ | (33,284 | ) |
| | | | | | | | | |
Net loss and LAE ratio(6) | | 55.3 | % | | 87.5 | % | | | | 83.0 | % |
Commission and other acquisition expense ratio(7) | | 35.6 | % | | 38.2 | % | | | | 37.9 | % |
General and administrative expense ratio(8) | | 11.6 | % | | 0.8 | % | | | | 8.7 | % |
Expense Ratio(9) | | 47.2 | % | | 39.0 | % | | | | 46.6 | % |
Combined ratio(10) | | 102.5 | % | | 126.5 | % | | | | 129.6 | % |
MAIDEN HOLDINGS, LTD.
SUPPLEMENTAL FINANCIAL DATA - SEGMENT INFORMATION (Unaudited)
(in thousands of U.S. dollars)
|
| | | | | | | | | | | | | | | | |
| For the Three Months Ended March 31, 2018 | | Diversified Reinsurance | | AmTrust Reinsurance | | Other | | Total |
| Gross premiums written | | $ | 49,400 |
| | $ | 573,928 |
| | $ | — |
| | $ | 623,328 |
|
| Net premiums written | | $ | 48,271 |
| | $ | 574,380 |
| | $ | — |
| | $ | 622,651 |
|
| Net premiums earned | | $ | 25,515 |
| | $ | 491,298 |
| | $ | — |
| | $ | 516,813 |
|
| Other insurance revenue | | 3,726 |
| | — |
| | — |
| | 3,726 |
|
| Net loss and LAE | | (15,899 | ) | | (337,307 | ) | | — |
| | (353,206 | ) |
| Commission and other acquisition expenses | | (9,312 | ) | | (157,316 | ) | | — |
| | (166,628 | ) |
General and administrative expenses(4) | | (4,481 | ) | | (920 | ) | | — |
| | (5,401 | ) |
Underwriting loss(5) | | $ | (451 | ) | | $ | (4,245 | ) | | $ | — |
| | (4,696 | ) |
| Reconciliation to net income from continuing operations | | | | | | | | |
| Net investment income and realized gains on investment | | | | | | | | 33,226 |
|
| Interest and amortization expenses | | | | | | | | (4,829 | ) |
| Foreign exchange losses | | | | | | | | (2,407 | ) |
Other general and administrative expenses(4) | | | | | | | | (10,270 | ) |
| Income tax benefit | | | | | | | | 1,324 |
|
| Net income from continuing operations | | | | | | | | $ | 12,348 |
|
| | | | | | | | | |
Net loss and LAE ratio(6) | | 54.4 | % | | 68.7 | % | | | | 67.9 | % |
Commission and other acquisition expense ratio(7) | | 31.8 | % | | 32.0 | % | | | | 32.0 | % |
General and administrative expense ratio(8) | | 15.3 | % | | 0.2 | % | | | | 3.0 | % |
Expense Ratio(9) | | 47.1 | % | | 32.2 | % | | | | 35.0 | % |
Combined ratio(10) | | 101.5 | % | | 100.9 | % | | | | 102.9 | % |
MAIDEN HOLDINGS, LTD.
NON-GAAP FINANCIAL MEASURES (Unaudited)
(In thousands of U.S. dollars, except share and per share data) |
| | | | | | | | |
| | | For the Three Months Ended March 31, |
| | 2019 | | 2018 |
Non-GAAP operating (loss) income attributable to Maiden common shareholders(11) | | $ | (26,934 | ) | | $ | 5,782 |
|
Non-GAAP basic and diluted operating (loss) earnings per common share attributable to Maiden shareholders(15) | | $ | (0.32 | ) | | $ | 0.07 |
|
Annualized non-GAAP operating return on average common equity(12) | | (104.7 | )% | | 3.2 | % |
| Reconciliation of Net (loss) income attributable to Maiden common shareholders to Non-GAAP operating (loss) income attributable to Maiden common shareholders | | | | |
| Net (loss) income attributable to Maiden common shareholders | | $ | (36,636 | ) | | $ | 13,727 |
|
| Add (subtract): | | | | |
| Net realized losses (gains) on investment | | 11,101 |
| | (357 | ) |
| Foreign exchange and other (gains) losses | | (4,979 | ) | | 2,407 |
|
| Loss (income) from discontinued operations, net of income tax | | 3,352 |
| | (9,995 | ) |
| Divested NGHC Quota Share run-off | | 228 |
| | — |
|
Non-GAAP operating (loss) income attributable to Maiden common shareholders(11) | | $ | (26,934 | ) | | $ | 5,782 |
|
| | | | | |
| Weighted average number of common shares - basic | | 82,965,156 |
| | 83,040,413 |
|
Adjusted weighted average number of common shares and assumed conversions - diluted(15) | | 82,965,156 |
| | 83,318,542 |
|
| Reconciliation of Diluted (loss) earnings per common share attributable to Maiden shareholders to Non-GAAP diluted operating (loss) earnings per common share attributable to Maiden shareholders: | | | | |
| Diluted (loss) earnings per common share attributable to Maiden shareholders | | $ | (0.44 | ) | | $ | 0.16 |
|
| Add (subtract): | | | | |
| Net realized losses (gains) on investment | | 0.13 |
| | — |
|
| Foreign exchange and other (gains) losses | | (0.06 | ) | | 0.03 |
|
| Loss (income) from discontinued operations, net of income tax | | 0.04 |
| | (0.12 | ) |
| Divested NGHC Quota Share run-off | | 0.01 |
| | — |
|
| Non-GAAP diluted operating (loss) earnings per common share attributable to Maiden shareholders | | $ | (0.32 | ) | | $ | 0.07 |
|
| | | | | |
| Reconciliation of net (loss) income attributable to Maiden to non-GAAP (loss) income from operations: | | | | |
| Net (loss) income attributable to Maiden | | $ | (36,636 | ) | | $ | 22,272 |
|
| Add (subtract): | | | | |
| Foreign exchange and other (gains) losses | | (4,979 | ) | | 2,407 |
|
| Interest and amortization expenses | | 4,829 |
| | 4,829 |
|
| Income tax benefit | | (38 | ) | | (1,324 | ) |
| Loss (income) from discontinued operations, net of income tax | | 3,352 |
| | (9,995 | ) |
| Net income attributable to noncontrolling interest | | — |
| | 71 |
|
Non-GAAP (loss) income from operations(2) | | $ | (33,472 | ) | | $ | 18,260 |
|
MAIDEN HOLDINGS, LTD.
NON-GAAP FINANCIAL MEASURES (Unaudited)
(In thousands of U.S. dollars, except share and per share data)
|
| | | | | | | |
| | March 31, 2019 | | December 31, 2018 |
| Investable assets: | | | |
| Total investments | $ | 3,156,627 |
| | $ | 4,090,965 |
|
| Cash and cash equivalents | 89,521 |
| | 200,841 |
|
| Restricted cash and cash equivalents | 42,334 |
| | 130,148 |
|
| Loan to related party | 167,975 |
| | 167,975 |
|
| Funds withheld receivable | 652,087 |
| | 27,039 |
|
Total investable assets(13) | $ | 4,108,544 |
| | $ | 4,616,968 |
|
| | | | |
| | March 31, 2019 | | December 31, 2018 |
| Capital: | | | |
| Preference shares | $ | 465,000 |
| | $ | 465,000 |
|
| Common shareholders' equity | 119,289 |
| | 89,275 |
|
| Total Maiden shareholders' equity | 584,289 |
| | 554,275 |
|
| 2016 Senior Notes | 110,000 |
| | 110,000 |
|
| 2013 Senior Notes | 152,500 |
| | 152,500 |
|
Total capital resources(14) | $ | 846,789 |
| | $ | 816,775 |
|
| |
| (1) | Book value per common share is calculated using Maiden common shareholders’ equity (shareholders' equity excluding the aggregate liquidation value of our preference shares) divided by the number of common shares outstanding. |
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| (2) | Non-GAAP loss (income) from operations is a non-GAAP financial measure defined by the Company as net loss (income) attributable to Maiden excluding foreign exchange and other gains and losses, interest and amortization expenses, income tax (benefit) expense, loss (income) from discontinued operations, net of income tax and net income attributable to noncontrolling interest and should not be considered as an alternative to net loss (income). The Company’s management believes that non-GAAP loss (income) from operations is a useful measure of the Company’s underlying earnings fundamentals based on its underwriting and investment income before financing costs. This loss (income) from operations enables readers of this information to more clearly understand the essential operating results of the Company. The Company’s measure of non-GAAP loss (income) from operations may not be comparable to similarly titled measures used by other companies. |
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| (3) | Dividends on preference shares consist of $0 and $3,094 paid to Preference Shares - Series A for the three months ended March 31, 2019 and 2018, respectively, $0 and $2,939 paid to Preference Shares - Series C for the three months ended March 31, 2019 and 2018, respectively, and $0 and $2,512 paid to Preference Shares - Series D for the three months ended March 31, 2019 and 2018, respectively. |
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| (4) | Underwriting related general and administrative expenses is a non-GAAP measure and includes expenses which are segregated for analytical purposes as a component of underwriting loss. |
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| (5) | Underwriting loss is a non-GAAP measure and is calculated as net premiums earned plus other insurance revenue less net loss and LAE, commission and other acquisition expenses and general and administrative expenses directly related to underwriting activities. Management believes that this measure is important in evaluating the underwriting performance of the Company and its segments. This measure is also a useful tool to measure the profitability of the Company separately from the investment results and is also a widely used performance indicator in the insurance industry. |
(6) Calculated by dividing net loss and LAE by the sum of net premiums earned and other insurance revenue.
(7) Calculated by dividing commission and other acquisition expenses by the sum of net premiums earned and other insurance revenue.
(8) Calculated by dividing general and administrative expenses by the sum of net premiums earned and other insurance revenue.
(9) Calculated by adding together the commission and other acquisition expense ratio and the general and administrative expense ratio.
(10) Calculated by adding together the net loss and LAE ratio and the expense ratio.
(11) Non-GAAP operating (loss) income is a non-GAAP financial measure defined by the Company as net (loss) income attributable to Maiden common shareholders excluding realized investment gains and losses, foreign exchange and other gains and losses, loss from discontinued operations, net of income tax, and divested NGHC Quota Share run-off should not be considered as an alternative to net loss. The Company's management believes that non-GAAP operating (loss) income is a useful indicator of trends in the Company's underlying operations. The Company's measure of non-GAAP operating (loss) income may not be comparable to similarly titled measures used by other companies.
(12) Non-GAAP operating return on average common equity is a non-GAAP financial measure. Management uses non-GAAP operating return on average common shareholders' equity as a measure of profitability that focuses on the return to Maiden common shareholders. It is calculated using non-GAAP operating loss attributable to Maiden common shareholders divided by average Maiden common shareholders' equity.
(13) Investable assets is the total of the Company's investments, cash and cash equivalents, funds withheld receivable and loan to a related party.
(14) Total capital resources is the sum of the Company's principal amount of debt and Maiden shareholders' equity.
(15) During a period of loss, the basic weighted average common shares outstanding is used in the denominator of the diluted loss per common share computation as the effect of including potential dilutive shares would be anti-dilutive.
