Third Point Reinsurance Ltd.
Financial Supplement
December 31, 2014
(UNAUDITED)
This financial supplement is for informational purposes only. It should be read in conjunction with documents filed with the Securities and Exchange Commission by Third Point Reinsurance Ltd., including the Company’s Annual Report on Form 10-K.
The Waterfront, Chesney House, 1st Floor Manoj Gupta - SVP Underwriting
96 Pitts Bays Road Tel: (441) 542-3701
Pembroke HM 08 Email: investorrelations@thirdpointre.bm
Bermuda Website: www.thirdpointre.bm
Third Point Reinsurance Ltd.
Basis of Presentation and Non-GAAP Financial Measures:
Unless the context otherwise indicates or requires, as used in this financial supplement references to “we,” “our,” “us,” and the “Company,” refer to Third Point Reinsurance Ltd. and its directly and indirectly owned subsidiaries, including Third Point Reinsurance Company Ltd. (“Third Point Re”) and Third Point Reinsurance (USA) Ltd. (“Third Point Re USA”), as a combined entity, except where otherwise stated or where it is clear that the terms mean only Third Point Reinsurance Ltd. exclusive of its subsidiaries. We refer to Third Point Reinsurance Investment Management Ltd. as the “Catastrophe Fund Manager,” Third Point Reinsurance Opportunities Fund Ltd. as the “Catastrophe Fund” and Third Point Re Cat Ltd. as the “Catastrophe Reinsurer.” We have made rounding adjustments to reach some of the figures included in this financial supplement and, unless otherwise indicated, percentages presented in this financial supplement are approximate.
In presenting the Company’s results, management has included financial measures that are not calculated under standards or rules that comprise accounting principles generally accepted in the United States (GAAP). Such measures, including book value per share, diluted book value per share and return on beginning shareholders’ equity, are referred to as non-GAAP measures. These non-GAAP measures may be defined or calculated differently by other companies. Management believes these measures allow for a more complete understanding of the underlying business. These measures are used to monitor our results and should not be viewed as a substitute for those determined in accordance with GAAP. Reconciliations of such measures to the most comparable GAAP figures are included in the attached financial information in accordance with Regulation G.
Safe Harbor Statement Regarding Forward-Looking Statements:
This Financial Supplement includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are subject to known and unknown risks and uncertainties, many of which may be beyond the Company’s control. The Company cautions you that the forward-looking information presented in this press release is not a guarantee of future events, and that actual events may differ materially from those made in or suggested by the forward-looking information contained in this press release. In addition, forward-looking statements generally can be identified by the use of forward-looking terminology such as “may,” “plan,” “seek,” “comfortable with,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “believe” or “continue” or the negative thereof or variations thereon or similar terminology. Actual events, results and outcomes may differ materially from our expectations due to a variety of known and unknown risks, uncertainties and other factors. Although it is not possible to identify all of these risks and factors, they include, among others, the following: (i) limited historical information about the Company; (ii) operational structure currently is being developed; (iii) fluctuation in results of operations; (iv) more established competitors; (v) losses exceeding reserves; (vi) downgrades or withdrawal of ratings by rating agencies; (vii) dependence on key executives; (viii) dependence on letter of credit facilities that may not be available on commercially acceptable terms; (ix) potential inability to pay dividends; (x) inability to service indebtedness; (xi) limited cash flow and liquidity due to indebtedness; (xii) unavailability of capital in the future; (xiii) fluctuations in market price of the Company's common shares; (xiv) dependence on clients’ evaluations of risks associated with such clients’ insurance underwriting; (xv) suspension or revocation of reinsurance licenses; (xvi) potentially being deemed an investment company under U.S. federal securities law; (xvii) potential characterization of the Company and/or Third Point Reinsurance Company Ltd. as a PFIC; (xviii) dependence on Third Point LLC to implement the Company’s investment strategy; (xix) termination by Third Point LLC of the investment management agreements; (xx) risks associated with the Company’s investment strategy being greater than those faced by competitors; (xxi) increased regulation or scrutiny of alternative investment advisers affecting the Company’s reputation; (xxii) the Company potentially becoming subject to U.S. federal income taxation; (xxiii) the Company potentially becoming subject to U.S. withholding and information reporting requirements under the FATCA provisions; and (xxiv) other risks and factors listed under “Risk Factors” in our most recent Annual Report on Form 10-K and other periodic and current disclosures filed with the Securities and Exchange Commission. All forward-looking statements speak only as of the date made and the Company undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.
Third Point Reinsurance Ltd.
Table of Contents
|
| | |
| | | Page: |
| Key Performance Indicators | | |
| | |
| | | |
| Consolidated Financial Statements | | |
| | 4 |
| | 5 |
| | 6 |
| | | |
| Operating Segment Information | | |
| | 7 |
| | 8 |
| | 9 |
| | 10 |
| | 11 |
| | 12 |
| | | |
| Investments | | |
| | 13 |
| | 14 |
| | | |
| Other | | |
| | 15 |
| Book value per share and diluted book value per share - by Quarter | | 16 |
| | 17 |
| Return on beginning shareholders' equity - by Quarter and Year | | 18 |
Third Point Reinsurance Ltd.
Key Performance Indicators
December 31, 2014 and 2013
(expressed in thousands of U.S. dollars, except per share data and ratios)
|
| | | | | | | | | | | | | | | |
| | For the three months ended | | For the years ended |
| | December 31, 2014 | | December 31, 2013 | | December 31, 2014 | | December 31, 2013 |
| | | | | | | | |
| Key underwriting metrics for Property and Casualty Reinsurance segments: | | | | | | | |
Net underwriting loss(1) | $ | (542 | ) | | $ | (3,593 | ) | | $ | (9,552 | ) | | $ | (15,828 | ) |
Combined ratio(1) | 100.2 | % | | 106.3 | % | | 102.2 | % | | 107.5 | % |
| | | | | | | | |
| Key investment return metrics: | | | | | | | |
Net investment income (loss)(2) | $ | (6,490 | ) | | $ | 89,321 |
| | $ | 85,582 |
| | $ | 258,125 |
|
| Net investment return on investments managed by Third Point LLC | (0.4 | )% | | 6.0 | % | | 5.1 | % | | 23.9 | % |
| | | | | | | | |
| Key shareholders' value creation metrics: | | | | | | | |
Book value per share(3) | $ | 14.04 |
| | $ | 13.48 |
| | $ | 14.04 |
| | $ | 13.48 |
|
Diluted book value per share(3) | $ | 13.55 |
| | $ | 13.12 |
| | $ | 13.55 |
| | $ | 13.12 |
|
Growth in diluted book value per share(3) | (1.0 | )% | | 6.2 | % | | 3.3 | % | | 20.5 | % |
Return on beginning shareholders' equity(4) | (1.0 | )% | | 6.1 | % | | 3.6 | % | | 23.4 | % |
(1) Refer to accompanying "Segment Reporting" results for an explanation and calculation of net underwriting loss and combined ratio.
(2) Prior to 2014, deposit liabilities and reinsurance contracts investment expense and changes in the estimated fair value of embedded derivatives were recorded in net investment income. As these amounts have become more prominent, the presentation has been modified, and deposit liabilities and reinsurance contracts investment expense and changes in the estimated fair value of embedded derivatives are now recorded in other expenses in the condensed consolidated statements of income (loss). As a result, investment expenses of $2.2 million and $4.9 million that were previously reported in net investment income for the three months and year ended December 31, 2013, respectively, are now reported in other expenses to conform to the current period’s presentation.
(3) Book value per share and diluted book value per share are non-GAAP financial measures. Refer to accompanying "Book value per share - by Quarter" for calculation of basic and diluted book value per share.
(4) Return on beginning shareholders’ equity is a non-GAAP financial measure. Refer to accompanying "Return on beginning shareholders' equity - by Quarter and Year" for calculation of return on beginning shareholders' equity.
Third Point Reinsurance Ltd.
Condensed Consolidated Balance Sheets - by Quarter
(expressed in thousands of U.S. dollars) |
| | | | | | | | | | | | | | | | | | | | |
| | | December 31, 2014 | | September 30, 2014 | | June 30, 2014 | | March 31, 2014 | | December 31, 2013 |
| Assets | | | | | | | | | | |
| Equity securities, trading, at fair value | | $ | 1,177,796 |
| | $ | 956,604 |
| | $ | 1,162,363 |
| | $ | 1,116,554 |
| | $ | 954,111 |
|
| Debt securities, trading, at fair value | | 569,648 |
| | 660,677 |
| | 551,453 |
| | 558,648 |
| | 441,424 |
|
| Other investments, at fair value | | 83,394 |
| | 97,765 |
| | 93,412 |
| | 77,387 |
| | 65,329 |
|
| Total investments in securities and commodities | | 1,830,838 |
| | 1,715,046 |
| | 1,807,228 |
| | 1,752,589 |
| | 1,460,864 |
|
| Cash and cash equivalents | | 28,734 |
| | 32,693 |
| | 35,977 |
| | 33,938 |
| | 31,625 |
|
| Restricted cash and cash equivalents | | 417,307 |
| | 261,966 |
| | 222,124 |
| | 221,044 |
| | 193,577 |
|
| Due from brokers | | 58,241 |
| | 182,927 |
| | 74,046 |
| | 101,819 |
| | 98,386 |
|
| Securities purchased under an agreement to sell | | 29,852 |
| | 19,897 |
| | 33,850 |
| | 36,778 |
| | 38,147 |
|
| Derivative assets, at fair value | | 21,130 |
| | 37,260 |
| | 22,516 |
| | 28,134 |
| | 39,045 |
|
| Interest and dividends receivable | | 2,602 |
| | 5,032 |
| | 3,747 |
| | 5,214 |
| | 2,615 |
|
| Reinsurance balances receivable | | 303,649 |
| | 269,747 |
| | 245,832 |
| | 221,541 |
| | 191,763 |
|
| Deferred acquisition costs, net | | 155,901 |
| | 124,373 |
| | 130,860 |
| | 93,283 |
| | 91,193 |
|
| Unearned premiums ceded | | — |
| | 91 |
| | — |
| | — |
| | — |
|
| Loss and loss adjustment expenses recoverable | | 814 |
| | 1,412 |
| | 10,274 |
| | 10,277 |
| | 9,277 |
|
| Other assets | | 3,512 |
| | 3,701 |
| | 3,283 |
| | 2,950 |
| | 3,398 |
|
| Total assets | | $ | 2,852,580 |
| | $ | 2,654,145 |
| | $ | 2,589,737 |
| | $ | 2,507,567 |
| | $ | 2,159,890 |
|
| Liabilities and shareholders' equity | | | | | | | | | | |
| Liabilities | | | | | | | | | | |
| Accounts payable and accrued expenses | | $ | 10,085 |
| | $ | 7,521 |
| | $ | 5,456 |
| | $ | 3,739 |
| | $ | 9,456 |
|
| Reinsurance balances payable | | 27,040 |
| | 21,651 |
| | 26,856 |
| | 25,647 |
| | 9,081 |
|
| Deposit liabilities | | 145,430 |
| | 142,990 |
| | 121,959 |
| | 121,374 |
| | 120,946 |
|
| Unearned premium reserves | | 433,809 |
| | 363,666 |
| | 346,271 |
| | 279,512 |
| | 265,187 |
|
| Loss and loss adjustment expense reserves | | 277,362 |
| | 187,313 |
| | 184,627 |
| | 164,624 |
| | 134,331 |
|
| Securities sold, not yet purchased, at fair value | | 82,485 |
| | 45,667 |
| | 46,994 |
| | 53,958 |
| | 56,056 |
|
| Due to brokers | | 312,609 |
| | 306,927 |
| | 281,091 |
| | 333,478 |
| | 44,870 |
|
| Derivative liabilities, at fair value | | 11,015 |
| | 12,346 |
| | 10,528 |
| | 7,569 |
| | 8,819 |
|
| Performance fee payable to related party | | — |
| | 21,837 |
| | 22,002 |
| | 12,295 |
| | — |
|
| Interest and dividends payable | | 697 |
| | 589 |
| | 816 |
| | 800 |
| | 748 |
|
| Total liabilities | | 1,300,532 |
| | 1,110,507 |
| | 1,046,600 |
| | 1,002,996 |
| | 649,494 |
|
| Commitments and contingent liabilities | | | | | | | | | | |
| Shareholders' equity | | | | | | | | | | |
| Preference shares | | — |
| | — |
| | — |
| | — |
| | — |
|
| Common shares | | 10,447 |
| | 10,403 |
| | 10,393 |
| | 10,392 |
| | 10,389 |
|
| Additional paid-in capital | | 1,065,489 |
| | 1,063,254 |
| | 1,060,183 |
| | 1,057,939 |
| | 1,055,690 |
|
| Retained earnings | | 375,977 |
| | 390,656 |
| | 396,653 |
| | 365,361 |
| | 325,582 |
|
| Shareholders' equity attributable to shareholders | | 1,451,913 |
| | 1,464,313 |
| | 1,467,229 |
| | 1,433,692 |
| | 1,391,661 |
|
| Non-controlling interests | | 100,135 |
| | 79,325 |
| | 75,908 |
| | 70,879 |
| | 118,735 |
|
| Total shareholders' equity | | 1,552,048 |
| | 1,543,638 |
| | 1,543,137 |
| | 1,504,571 |
| | 1,510,396 |
|
| Total liabilities and shareholders' equity | | $ | 2,852,580 |
| | $ | 2,654,145 |
| | $ | 2,589,737 |
| | $ | 2,507,567 |
| | $ | 2,159,890 |
|
Third Point Reinsurance Ltd.
Condensed Consolidated Statements of Income (Loss)
(expressed in thousands of U.S. dollars, except share and per share data)
|
| | | | | | | | | | | | | | | | |
| | | Three Months Ended December 31, | | Years ended December 31, |
| | | 2014 | | 2013 | | 2014 | | 2013 |
| Revenues | | | | | | | | |
| Gross premiums written | | $ | 253,802 |
| | $ | 162,277 |
| | $ | 613,300 |
| | $ | 401,937 |
|
| Gross premiums ceded | | — |
| | — |
| | (150 | ) | | (9,975 | ) |
| Net premiums written | | 253,802 |
| | 162,277 |
| | 613,150 |
| | 391,962 |
|
| Change in net unearned premium reserves | | (70,230 | ) | | (103,767 | ) | | (168,618 | ) | | (171,295 | ) |
| Net premiums earned | | 183,572 |
| | 58,510 |
| | 444,532 |
| | 220,667 |
|
Net investment income (loss)(1) | | (6,490 | ) | | 89,321 |
| | 85,582 |
| | 258,125 |
|
| Total revenues | | 177,082 |
| | 147,831 |
| | 530,114 |
| | 478,792 |
|
| Expenses | | | | | | | | |
| Loss and loss adjustment expenses incurred, net | | 132,364 |
| | 36,133 |
| | 283,147 |
| | 139,812 |
|
| Acquisition costs, net | | 43,875 |
| | 18,833 |
| | 137,206 |
| | 67,944 |
|
| General and administrative expenses | | 10,310 |
| | 8,965 |
| | 40,008 |
| | 33,036 |
|
Other expenses(1) | | 2,606 |
| | 2,247 |
| | 7,395 |
| | 4,922 |
|
| Total expenses | | 189,155 |
| | 66,178 |
| | 467,756 |
| | 245,714 |
|
| Income (loss) before income tax expense | | (12,073 | ) | | 81,653 |
| | 62,358 |
| | 233,078 |
|
| Income tax expense | | (1,731 | ) | | — |
| | (5,648 | ) | | — |
|
| Net income (loss) including non-controlling interests | | (13,804 | ) | | 81,653 |
| | 56,710 |
| | 233,078 |
|
| Income (loss) attributable to non-controlling interests | | (875 | ) | | (1,565 | ) | | (6,315 | ) | | (5,767 | ) |
| Net income (loss) | | $ | (14,679 | ) | | $ | 80,088 |
| | $ | 50,395 |
| | $ | 227,311 |
|
Earnings (loss) per share(2) | | | | | | | | |
| Basic | | $ | (0.14 | ) | | $ | 0.77 |
| | $ | 0.48 |
| | $ | 2.58 |
|
| Diluted | | $ | (0.14 | ) | | $ | 0.75 |
| | $ | 0.47 |
| | $ | 2.54 |
|
| Weighted average number of common shares used in the determination of earnings (loss) per share | | | | | | | | |
| Basic | | 103,324,616 |
| | 103,264,616 |
| | 103,287,693 |
| | 87,505,540 |
|
| Diluted | | 103,324,616 |
| | 106,390,339 |
| | 106,391,059 |
| | 88,970,531 |
|
(1) Prior to 2014, deposit liabilities and reinsurance contracts investment expense and changes in the estimated fair value of embedded derivatives were recorded in net investment income. As these amounts have become more prominent, the presentation has been modified, and deposit liabilities and reinsurance contracts investment expense and changes in the estimated fair value of embedded derivatives are now recorded in other expenses in the condensed consolidated statements of income (loss). As a result, investment expenses of $2.2 million and $4.9 million that were previously reported in net investment income for the three months and year ended December 31, 2013, respectively, are now reported in other expenses to conform to the current period’s presentation.
(2) Basic earnings per share is based on the weighted average number of common shares and participating securities outstanding during the period. The weighted average number of common shares excludes any dilutive effect of outstanding warrants, options and convertible securities such as unvested restricted shares. Diluted earnings per share are based on the weighted average number of common shares and share equivalents including any dilutive effects of warrants, options and other awards under stock plans using the treasury stock method. U.S. GAAP requires that unvested share awards that contain non-forfeitable rights to dividends or dividend equivalents, whether paid or unpaid (referred to as ‘‘participating securities”), be included in the number of shares outstanding for both basic and diluted earnings per share calculations. We treat certain of our unvested restricted stock as participating securities. In the event of a net loss, the participating securities are excluded from the calculation of both basic and diluted loss per share.
Third Point Reinsurance Ltd.
Condensed Consolidated Statements of Income (Loss) - by Quarter
(expressed in thousands of U.S. dollars, except share and per share data)
|
| | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended |
| | | December 31, 2014 | | September 30, 2014 | | June 30, 2014 | | March 31, 2014 | | December 31, 2013 |
| Revenues | | | | | | | | | | |
| Gross premiums written | | $ | 253,802 |
| | $ | 126,403 |
| | $ | 145,508 |
| | $ | 87,587 |
| | $ | 162,277 |
|
| Gross premiums ceded | | — |
| | (150 | ) | | — |
| | — |
| | — |
|
| Net premiums written | | 253,802 |
| | 126,253 |
| | 145,508 |
| | 87,587 |
| | 162,277 |
|
| Change in net unearned premium reserves | | (70,230 | ) | | (17,305 | ) | | (66,758 | ) | | (14,325 | ) | | (103,767 | ) |
| Net premiums earned | | 183,572 |
| | 108,948 |
| | 78,750 |
| | 73,262 |
| | 58,510 |
|
Net investment income (loss)(1) | | (6,490 | ) | | 1,552 |
| | 40,485 |
| | 50,035 |
| | 89,321 |
|
| Total revenues | | 177,082 |
| | 110,500 |
| | 119,235 |
| | 123,297 |
| | 147,831 |
|
| Expenses | | | | | | | | | | |
| Loss and loss adjustment expenses incurred, net | | 132,364 |
| | 60,115 |
| | 44,409 |
| | 46,259 |
| | 36,133 |
|
| Acquisition costs, net | | 43,875 |
| | 38,317 |
| | 29,583 |
| | 25,431 |
| | 18,833 |
|
| General and administrative expenses | | 10,310 |
| | 10,124 |
| | 9,549 |
| | 10,025 |
| | 8,965 |
|
Other expenses(1) | | 2,606 |
| | 2,982 |
| | 1,020 |
| | 787 |
| | 2,247 |
|
| Total expenses | | 189,155 |
| | 111,538 |
| | 84,561 |
| | 82,502 |
| | 66,178 |
|
| Income (loss) before income tax expense | | (12,073 | ) | | (1,038 | ) | | 34,674 |
| | 40,795 |
| | 81,653 |
|
| Income tax expense | | (1,731 | ) | | (1,542 | ) | | (2,375 | ) | | — |
| | — |
|
| Net income (loss) including non-controlling interests | | (13,804 | ) | | (2,580 | ) | | 32,299 |
| | 40,795 |
| | 81,653 |
|
| Income (loss) attributable to non-controlling interests | | (875 | ) | | (3,417 | ) | | (1,007 | ) | | (1,016 | ) | | (1,565 | ) |
| Net income (loss) | | $ | (14,679 | ) | | $ | (5,997 | ) | | $ | 31,292 |
| | $ | 39,779 |
| | $ | 80,088 |
|
Earnings (loss) per share(2) | | | | | | | | | | |
| Basic | | $ | (0.14 | ) | | $ | (0.06 | ) | | $ | 0.30 |
| | $ | 0.38 |
| | $ | 0.77 |
|
| Diluted | | $ | (0.14 | ) | �� | $ | (0.06 | ) | | $ | 0.29 |
| | $ | 0.37 |
| | $ | 0.75 |
|
| Weighted average number of common shares used in the determination of earnings (loss) per share | | | | | | | | | | |
| Basic | | 103,324,616 |
| | 103,295,920 |
| | 103,264,616 |
| | 103,264,616 |
| | 103,264,616 |
|
| Diluted | | 103,324,616 |
| | 103,295,920 |
| | 106,433,881 |
| | 106,413,580 |
| | 106,390,339 |
|
(1) Prior to 2014, deposit liabilities and reinsurance contracts investment expense and changes in the estimated fair value of embedded derivatives were recorded in net investment income. As these amounts have become more prominent, the presentation has been modified, and deposit liabilities and reinsurance contracts investment expense and changes in the estimated fair value of embedded derivatives are now recorded in other expenses in the condensed consolidated statements of income (loss). As a result, investment expenses of $2.2 million that were previously reported in net investment income for the three months ended December 31, 2013, are now reported in other expenses to conform to the current period’s presentation.
(2) Basic earnings per share is based on the weighted average number of common shares and participating securities outstanding during the period. The weighted average number of common shares excludes any dilutive effect of outstanding warrants, options and convertible securities such as unvested restricted shares. Diluted earnings per share are based on the weighted average number of common shares and share equivalents including any dilutive effects of warrants, options and other awards under stock plans using the treasury stock method. U.S. GAAP requires that unvested share awards that contain non-forfeitable rights to dividends or dividend equivalents, whether paid or unpaid(referred to as ‘‘participating securities”), be included in the number of shares outstanding for both basic and diluted earnings per share calculations. We treat certain of our unvested restricted stock as participating securities. In the event of a net loss, the participating securities are excluded from the calculation of both basic and diluted loss per share.
Third Point Reinsurance Ltd.
Segment Reporting - Three months ended December 31, 2014 and 2013
(expressed in thousands of U.S. dollars) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended December 31, 2014 | | Three Months Ended December 31, 2013 |
| | | Total Property and Casualty Reinsurance(7) | | Catastrophe Risk Management | | Corporate | | Total | | Total Property and Casualty Reinsurance(7) | | Catastrophe Risk Management | | Corporate | | Total |
| Revenues | | | | | | | | | |
| Gross premiums written | | $ | 253,810 |
| | $ | (8 | ) | | $ | — |
| | $ | 253,802 |
| | $ | 162,359 |
| | $ | (82 | ) | | $ | — |
| | $ | 162,277 |
|
| Gross premiums ceded | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
|
| Net premiums written | | 253,810 |
| | (8 | ) | | — |
| | 253,802 |
| | 162,359 |
| | (82 | ) | | — |
| | 162,277 |
|
| Change in net unearned premium reserves | | (72,789 | ) | | 2,559 |
| | — |
| | (70,230 | ) | | (105,598 | ) | | 1,831 |
| | — |
| | (103,767 | ) |
| Net premiums earned | | 181,021 |
| | 2,551 |
| | — |
| | 183,572 |
| | 56,761 |
| | 1,749 |
| | — |
| | 58,510 |
|
| Expenses | | | | | | | | | | | | | | | | |
| Loss and loss adjustment expenses incurred, net | | 132,391 |
| | (27 | ) | | — |
| | 132,364 |
| | 36,325 |
| | (192 | ) | | — |
| | 36,133 |
|
| Acquisition costs, net | | 43,677 |
| | 198 |
| | — |
| | 43,875 |
| | 18,628 |
| | 205 |
| | — |
| | 18,833 |
|
| General and administrative expenses | | 5,495 |
| | 953 |
| | 3,862 |
| | 10,310 |
| | 5,401 |
| | 1,131 |
| | 2,433 |
| | 8,965 |
|
| Total expenses | | 181,563 |
| | 1,124 |
| | 3,862 |
| | 186,549 |
| | 60,354 |
| | 1,144 |
| | 2,433 |
| | 63,931 |
|
| Net underwriting loss | | (542 | ) | | n/a |
| | n/a |
| | n/a |
| | (3,593 | ) | | n/a |
| | n/a |
| | n/a |
|
Net investment income (loss)(1) | | (2,153 | ) | | 284 |
| | (4,621 | ) | | (6,490 | ) | | 11,825 |
| | 1,211 |
| | 76,285 |
| | 89,321 |
|
Other expenses(1) | | (2,606 | ) | | — |
| | — |
| | (2,606 | ) | | (2,247 | ) | | — |
| | — |
| | (2,247 | ) |
| Income tax expense | | — |
| | — |
| | (1,731 | ) | | (1,731 | ) | | — |
| | — |
| | — |
| | — |
|
| Segment income (loss) including non-controlling interests | | (5,301 | ) | | 1,711 |
| | (10,214 | ) | | (13,804 | ) | | 5,985 |
| | 1,816 |
| | 73,852 |
| | 81,653 |
|
| Segment income (loss) attributable to non-controlling interests | | — |
| | (871 | ) | | (4 | ) | | (875 | ) | | — |
| | (1,019 | ) | | (546 | ) | | (1,565 | ) |
| Segment income (loss) | | $ | (5,301 | ) | | $ | 840 |
| | $ | (10,218 | ) | | $ | (14,679 | ) | | $ | 5,985 |
| | $ | 797 |
| | $ | 73,306 |
| | $ | 80,088 |
|
| Underwriting ratios: | | | | | | | | | | | | | | | | |
Loss ratio(2) | | 73.1 | % | | | | | | | | 64.0 | % | | | | | | |
Acquisition cost ratio(3) | | 24.1 | % | | | | | | | | 32.8 | % | | | | | | |
Composite ratio(4) | | 97.2 | % | | | | | | | | 96.8 | % | | | | | | |
General and administrative expense ratio(5) | | 3.0 | % | | | | | | | | 9.5 | % | | | | | | |
Combined ratio(6) | | 100.2 | % | | | | | | | | 106.3 | % | | | | | | |
(1) Prior to 2014, deposit liabilities and reinsurance contracts investment expense and changes in the estimated fair value of embedded derivatives were recorded in net investment income. As these amounts have become more prominent, the presentation has been modified, and deposit liabilities and reinsurance contracts investment expense and changes in the estimated fair value of embedded derivatives are now recorded in other expenses in the condensed consolidated statements of income (loss). As a result, investment expenses of $2.2 million that were previously reported in net investment income for the three months ended December 31, 2013, are now reported in other expenses to conform to the current period’s presentation.
(2) Loss ratio is calculated by dividing loss and loss adjustment expenses incurred, net by net premiums earned.
(3) Acquisition cost ratio is calculated by dividing acquisition costs, net by net premiums earned.
(4) Composite ratio is calculated by dividing the sum of loss and loss adjustment expenses incurred, net and acquisition costs, net by net premiums earned.
(5) General and administrative expense ratio is calculated by dividing general and administrative expenses related to underwriting activities by net premiums earned.
(6) Combined ratio is calculated by dividing the sum of loss and loss adjustment expenses incurred, net, acquisition costs, net and general and administrative expenses related to underwriting activities by net premiums earned.
(7) Effective January 1, 2014, the Company modified the presentation of its operating segments to allocate net investment income from float to the Property and Casualty Reinsurance segment. Prior period segment results have been adjusted to conform to this presentation.
Third Point Reinsurance Ltd.
Segment Reporting - Years ended December 31, 2014 and 2013
(expressed in thousands of U.S. dollars)
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Year Ended December 31, 2014 | | Year Ended December 31, 2013 |
| | | Total Property and Casualty Reinsurance(7) | | Catastrophe Risk Management | | Corporate | | Total | | Total Property and Casualty Reinsurance(7) | | Catastrophe Risk Management | | Corporate | | Total |
| Revenues | | | | | | | | | |
| Gross premiums written | | $ | 601,305 |
| | $ | 11,995 |
| | $ | — |
| | $ | 613,300 |
| | $ | 393,588 |
| | $ | 8,349 |
| | $ | — |
| | $ | 401,937 |
|
| Gross premiums ceded | | (150 | ) | | — |
| | — |
| | (150 | ) | | (9,975 | ) | | — |
| | — |
| | (9,975 | ) |
| Net premiums written | | 601,155 |
| | 11,995 |
| | — |
| | 613,150 |
| | 383,613 |
| | 8,349 |
| | — |
| | 391,962 |
|
| Change in net unearned premium reserves | | (168,858 | ) | | 240 |
| | — |
| | (168,618 | ) | | (171,006 | ) | | (289 | ) | | — |
| | (171,295 | ) |
| Net premiums earned | | 432,297 |
| | 12,235 |
| | — |
| | 444,532 |
| | 212,607 |
| | 8,060 |
| | — |
| | 220,667 |
|
| Expenses | | | | | | | | | | | | | | | | |
| Loss and loss adjustment expenses incurred, net | | 283,180 |
| | (33 | ) | | — |
| | 283,147 |
| | 139,616 |
| | 196 |
| | — |
| | 139,812 |
|
| Acquisition costs, net | | 136,154 |
| | 1,052 |
| | — |
| | 137,206 |
| | 66,981 |
| | 963 |
| | — |
| | 67,944 |
|
| General and administrative expenses | | 22,515 |
| | 3,113 |
| | 14,380 |
| | 40,008 |
| | 21,838 |
| | 3,852 |
| | 7,346 |
| | 33,036 |
|
| Total expenses | | 441,849 |
| | 4,132 |
| | 14,380 |
| | 460,361 |
| | 228,435 |
| | 5,011 |
| | 7,346 |
| | 240,792 |
|
| Net underwriting loss | | (9,552 | ) | | n/a |
| | n/a |
| | n/a |
| | (15,828 | ) | | n/a |
| | n/a |
| | n/a |
|
| Net investment income | | 11,305 |
| | 1,227 |
| | 73,050 |
| | 85,582 |
| | 26,953 |
| | 4,421 |
| | 226,751 |
| | 258,125 |
|
Other expenses(1) | | (7,395 | ) | | — |
| | — |
| | (7,395 | ) | | (4,922 | ) | | — |
| | — |
| | (4,922 | ) |
| Income tax expense | | — |
| | — |
| | (5,648 | ) | | (5,648 | ) | | — |
| | — |
| | — |
| | — |
|
| Segment income (loss) including non-controlling interests | | (5,642 | ) | | 9,330 |
| | 53,022 |
| | 56,710 |
| | 6,203 |
| | 7,470 |
| | 219,405 |
| | 233,078 |
|
| Segment income (loss) attributable to non-controlling interests | | — |
| | (4,725 | ) | | (1,590 | ) | | (6,315 | ) | | — |
| | (4,046 | ) | | (1,721 | ) | | (5,767 | ) |
| Segment income (loss) | | $ | (5,642 | ) | | $ | 4,605 |
| | $ | 51,432 |
| | $ | 50,395 |
| | $ | 6,203 |
| | $ | 3,424 |
| | $ | 217,684 |
| | $ | 227,311 |
|
| Underwriting ratios: | | | | | | | | | | | | | | | | |
Loss ratio(2) | | 65.5 | % | | | | | | | | 65.7 | % | | | | | | |
Acquisition cost ratio(3) | | 31.5 | % | | | | | | | | 31.5 | % | | | | | | |
Composite ratio(4) | | 97.0 | % | | | | | | | | 97.2 | % | | | | | | |
General and administrative expense ratio(5) | | 5.2 | % | | | | | | | | 10.3 | % | | | | | | |
Combined ratio(6) | | 102.2 | % | | | | | | | | 107.5 | % | | | | | | |
(1) Prior to 2014, deposit liabilities and reinsurance contracts investment expense and changes in the estimated fair value of embedded derivatives were recorded in net investment income. As these amounts have become more prominent, the presentation has been modified, and deposit liabilities and reinsurance contracts investment expense and changes in the estimated fair value of embedded derivatives are now recorded in other expenses in the condensed consolidated statements of income (loss). As a result, investment expenses of $4.9 million that were previously reported in net investment income for the year ended December 31, 2013, are now reported in other expenses to conform to the current period’s presentation.
(2) Loss ratio is calculated by dividing loss and loss adjustment expenses incurred, net by net premiums earned.
(3) Acquisition cost ratio is calculated by dividing acquisition costs, net by net premiums earned.
(4) Composite ratio is calculated by dividing the sum of loss and loss adjustment expenses incurred, net and acquisition costs, net by net premiums earned.
(5) General and administrative expense ratio is calculated by dividing general and administrative expenses related to underwriting activities by net premiums earned.
(6) Combined ratio is calculated by dividing the sum of loss and loss adjustment expenses incurred, net, acquisition costs, net and general and administrative expenses related to underwriting activities by net premiums earned.
(7) Effective January 1, 2014, the Company modified the presentation of its operating segments to allocate net investment income from float to the Property and Casualty Reinsurance segment. Prior period segment results have been adjusted to conform to this presentation.
Third Point Reinsurance Ltd.
Property and Casualty Reinsurance Segment - by Quarter
(expressed in thousands of U.S. dollars)
|
| | | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended | |
| | | December 31, 2014 | | September 30, 2014 | | June 30, 2014 | | March 31, 2014 | | December 31, 2013 | |
| Revenues | | | | | | | | | | | |
| Gross premiums written | | $ | 253,810 |
| | $ | 124,931 |
| | $ | 140,422 |
| | $ | 82,142 |
| | $ | 162,359 |
| |
| Gross premiums ceded | | — |
| | (150 | ) | | — |
| | — |
| | — |
| |
| Net premiums written | | 253,810 |
| | 124,781 |
| | 140,422 |
| | 82,142 |
| | 162,359 |
| |
| Change in net unearned premium reserves | | (72,789 | ) | | (23,294 | ) | | (62,934 | ) | | (9,841 | ) | | (105,598 | ) | |
| Net premiums earned | | 181,021 |
| | 101,487 |
| | 77,488 |
| | 72,301 |
| | 56,761 |
| |
| Expenses | | | | | | | | | | | |
| Loss and loss adjustment expenses incurred, net | | 132,391 |
| | 60,121 |
| | 44,409 |
| | 46,259 |
| | 36,325 |
| |
| Acquisition costs, net | | 43,677 |
| | 37,571 |
| | 29,507 |
| | 25,399 |
| | 18,628 |
| |
| General and administrative expenses | | 5,495 |
| | 5,556 |
| | 5,655 |
| | 5,809 |
| | 5,401 |
| |
| Total expenses | | 181,563 |
| | 103,248 |
| | 79,571 |
| | 77,467 |
| | 60,354 |
| |
| Net underwriting loss | | (542 | ) | | (1,761 | ) | | (2,083 | ) | | (5,166 | ) | | (3,593 | ) | |
Net investment income (loss)(1)(2) | | (2,153 | ) | | (137 | ) | | 6,282 |
| | 7,313 |
| | 11,825 |
| |
Other expenses(2) | | (2,606 | ) | | (2,982 | ) | | (1,020 | ) | | (787 | ) | | (2,247 | ) | |
| Segment income (loss) | | $ | (5,301 | ) | | $ | (4,880 | ) | | $ | 3,179 |
| | $ | 1,360 |
| | $ | 5,985 |
| |
| | | | | | | | | | | | |
| Underwriting ratios: | | | | | | | | | | | |
Loss ratio(3) | | 73.1 | % | | 59.2 | % | | 57.3 | % | | 64.0 | % | | 64.0 | % | |
Acquisition cost ratio(4) | | 24.1 | % | | 37.0 | % | | 38.1 | % | | 35.1 | % | | 32.8 | % | |
Composite ratio(5) | | 97.2 | % | | 96.2 | % | | 95.4 | % | | 99.1 | % | | 96.8 | % | |
General and administrative expense ratio(6) | | 3.0 | % | | 5.5 | % | | 7.3 | % | | 8.0 | % | | 9.5 | % | |
Combined ratio(7) | | 100.2 | % | | 101.7 | % | | 102.7 | % | | 107.1 | % | | 106.3 | % | |
(1) Effective January 1, 2014, the Company modified the presentation of its operating segments to allocate net investment income from float to the Property and Casualty Reinsurance segment. Prior period segment results have been adjusted to conform to this presentation.
(2) Prior to 2014, deposit liabilities and reinsurance contract’s investment expense and changes in the estimated fair value of embedded derivatives were recorded in net investment income. As these amounts have become more prominent, the presentation has been modified, and deposit liabilities and reinsurance contracts investment expense and changes in the estimated fair value of embedded derivatives are now recorded in other expenses in the condensed consolidated statements of income (loss). As a result, investment expenses of $2.2 million that were previously reported in net investment for the three months ended December 31, 2013, are now reported in other expenses to conform to the current period’s presentation.
(3) Loss ratio is calculated by dividing loss and loss adjustment expenses incurred, net by net premiums earned.
(4) Acquisition cost ratio is calculated by dividing acquisition costs, net by net premiums earned.
(5) Composite ratio is calculated by dividing the sum of loss and loss adjustment expenses incurred, net and acquisition costs, net by net premiums earned.
(6) General and administrative expense ratio is calculated by dividing general and administrative expenses related to underwriting activities by net premiums earned.
(7) Combined ratio is calculated by dividing the sum of loss and loss adjustment expenses incurred, net, acquisition costs, net and general and administrative expenses related to underwriting activities by net premiums earned.
Third Point Reinsurance Ltd.
Catastrophe Risk Management Segment - by Quarter
(expressed in thousands of U.S. dollars)
|
| | | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended | |
| | | December 31, 2014 | | September 30, 2014 | | June 30, 2014 | | March 31, 2014 | | December 31, 2013 | |
| Revenues | | | | | | | | | | | |
| Gross premiums written | | $ | (8 | ) | | $ | 1,472 |
| | $ | 5,086 |
| | $ | 5,445 |
| | $ | (82 | ) | |
| Gross premiums ceded | | — |
| | — |
| | — |
| | — |
| | — |
| |
| Net premiums written | | (8 | ) | | 1,472 |
| | 5,086 |
| | 5,445 |
| | (82 | ) | |
| Change in net unearned premium reserves | | 2,559 |
| | 5,989 |
| | (3,824 | ) | | (4,484 | ) | | 1,831 |
| |
| Net premiums earned | | 2,551 |
| | 7,461 |
| | 1,262 |
| | 961 |
| | 1,749 |
| |
| Expenses | | | | | | | | | | | |
| Loss and loss adjustment expenses incurred, net | | (27 | ) | | (6 | ) | | — |
| | — |
| | (192 | ) | |
| Acquisition costs, net | | 198 |
| | 746 |
| | 76 |
| | 32 |
| | 205 |
| |
| General and administrative expenses | | 953 |
| | 648 |
| | 678 |
| | 834 |
| | 1,131 |
| |
| Total expenses | | 1,124 |
| | 1,388 |
| | 754 |
| | 866 |
| | 1,144 |
| |
| Net investment income | | 284 |
| | 881 |
| | 33 |
| | 29 |
| | 1,211 |
| |
| Other expenses | | — |
| | — |
| | — |
| | — |
| | — |
| |
| Income tax expense | | — |
| | — |
| | — |
| | — |
| | — |
| |
| Segment income including non-controlling interests | | 1,711 |
| | 6,954 |
| | 541 |
| | 124 |
| | 1,816 |
| |
| Segment income attributable to non-controlling interests | | (871 | ) | | (3,325 | ) | | (338 | ) | | (191 | ) | | (1,019 | ) | |
| Segment income (loss) | | $ | 840 |
| | $ | 3,629 |
| | $ | 203 |
| | $ | (67 | ) | | $ | 797 |
| |
Note: In December 2014, we announced that we would no longer accept investments in the Catastrophe Fund, that no new business would be written in the Catastrophe Reinsurer and that we would be redeeming all existing investments in the Catastrophe Fund. Despite the Catastrophe Fund’s solid investment returns from its inception, we are winding it down due to challenging market conditions and competition with other collateralized reinsurance and insurance-linked securities vehicles. The Catastrophe Fund Manager will continue to manage the runoff of the remaining exposure in the Catastrophe Fund.
Third Point Reinsurance Ltd.
Corporate Function - by Quarter
(expressed in thousands of U.S. dollars)
|
| | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended |
| | | December 31, 2014 | | September 30, 2014 | | June 30, 2014 | | March 31, 2014 | | December 31, 2013 |
| Revenues | | | | | | | | | | |
| Gross premiums written | | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
|
| Gross premiums ceded | | — |
| | — |
| | — |
| | — |
| | — |
|
| Net premiums written | | — |
| | — |
| | — |
| | — |
| | — |
|
| Change in net unearned premium reserves | | — |
| | — |
| | — |
| | — |
| | — |
|
| Net premiums earned | | — |
| | — |
| | — |
| | — |
| | — |
|
| Expenses | | | | | | | | | | |
| Loss and loss adjustment expenses incurred, net | | — |
| | — |
| | — |
| | — |
| | — |
|
| Acquisition costs, net | | — |
| | — |
| | — |
| | — |
| | — |
|
| General and administrative expenses | | 3,862 |
| | 3,920 |
| | 3,216 |
| | 3,382 |
| | 2,433 |
|
| Total expenses | | 3,862 |
| | 3,920 |
| | 3,216 |
| | 3,382 |
| | 2,433 |
|
| Net investment income | | (4,621 | ) | | 808 |
| | 34,170 |
| | 42,693 |
| | 76,285 |
|
| Other expenses | | — |
| | — |
| | — |
| | — |
| | — |
|
| Income tax expense | | (1,731 | ) | | (1,542 | ) | | (2,375 | ) | | — |
| | — |
|
| Segment income including non-controlling interests | | (10,214 | ) | | (4,654 | ) | | 28,579 |
| | 39,311 |
| | 73,852 |
|
| Segment income attributable to non-controlling interests | | (4 | ) | | (92 | ) | | (669 | ) | | (825 | ) | | (546 | ) |
| Segment income (loss) | | $ | (10,218 | ) | | $ | (4,746 | ) | | $ | 27,910 |
| | $ | 38,486 |
| | $ | 73,306 |
|
Third Point Reinsurance Ltd.
Gross Premiums Written by Lines of Business - by Quarter
(expressed in thousands of U.S. dollars)
|
| | | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended | |
| | | December 31, 2014 | | September 30, 2014 | | June 30, 2014 | | March 31, 2014 | | December 31, 2013 | |
| | | | | | | | | | | | |
| Property | | $ | 28,258 |
| | $ | (2,810 | ) | | $ | 74,505 |
| | $ | 6,881 |
| | $ | 40,977 |
| |
| | | | | | | | | | | | |
| Workers Compensation | | 8,327 |
| | 17,698 |
| | 2,511 |
| | 47,496 |
| | 1,487 |
| |
| Auto | | 14,029 |
| | 70,581 |
| | 48,709 |
| | 2,927 |
| | 97,509 |
| |
| General Liability | | 172 |
| | 40,190 |
| | 14,123 |
| | — |
| | — |
| |
| Casualty | | 22,528 |
| | 128,469 |
| | 65,343 |
| | 50,423 |
| | 98,996 |
| |
| | | | | | | | | | | | |
| Agriculture | | 26 |
| | 84 |
| | (1 | ) | | 1 |
| | (92 | ) | |
| Credit & Financial lines | | 8,026 |
| | (141 | ) | | (29 | ) | | 2,531 |
| | 22,478 |
| |
| Multi-line | | 194,972 |
| | (671 | ) | | 604 |
| | 22,306 |
| | — |
| |
| Specialty | | 203,024 |
| | (728 | ) | | 574 |
| | 24,838 |
| | 22,386 |
| |
| | | | | | | | | | | | |
| Total property and casualty reinsurance segment | | 253,810 |
| | 124,931 |
| | 140,422 |
| | 82,142 |
| | 162,359 |
| |
| Catastrophe risk management | | (8 | ) | | 1,472 |
| | 5,086 |
| | 5,445 |
| | (82 | ) | |
| | | $ | 253,802 |
| | $ | 126,403 |
| | $ | 145,508 |
| | $ | 87,587 |
| | $ | 162,277 |
| |
Third Point Reinsurance Ltd.
Investments managed by Third Point LLC - by Quarter
(expressed in thousands of U.S. dollars)
|
| | | | | | | | | | | | | | | | | | | | |
| | December 31, 2014 | | September 30, 2014 | | June 30, 2014 | | March 31, 2014 | | December 31, 2013 | |
| Assets | | | | | | | | | | |
| Total investments in securities and commodities | $ | 1,828,761 |
| | $ | 1,713,000 |
| | $ | 1,805,225 |
| | $ | 1,752,589 |
| | $ | 1,460,864 |
| |
| Cash and cash equivalents | 3 |
| | 10,003 |
| | 9 |
| | 10 |
| | 869 |
| |
Restricted cash and cash equivalents(1) | 308,763 |
| | 160,618 |
| | 128,396 |
| | 131,598 |
| | 100,563 |
| |
| Due from brokers | 58,241 |
| | 182,927 |
| | 74,046 |
| | 101,819 |
| | 98,386 |
| |
| Securities purchased under an agreement to sell | 29,852 |
| | 19,897 |
| | 33,850 |
| | 36,778 |
| | 38,147 |
| |
| Derivative assets | 21,130 |
| | 37,260 |
| | 22,516 |
| | 28,134 |
| | 39,045 |
| |
| Interest and dividends receivable | 2,590 |
| | 5,021 |
| | 3,736 |
| | 5,204 |
| | 2,604 |
| |
| Other assets | 325 |
| | 799 |
| | 1,562 |
| | 752 |
| | 933 |
| |
| Total assets | $ | 2,249,665 |
| | $ | 2,129,525 |
| | $ | 2,069,340 |
| | $ | 2,056,884 |
| | $ | 1,741,411 |
| |
| Liabilities and non-controlling interest | | | | | | | | | | |
| Accounts payable and accrued expenses | $ | 464 |
| | $ | 299 |
| | $ | 247 |
| | $ | 617 |
| | $ | 1,759 |
| |
| Securities sold, not yet purchased, at fair value | 82,485 |
| | 45,667 |
| | 46,994 |
| | 53,958 |
| | 56,056 |
| |
| Due to brokers | 312,609 |
| | 306,927 |
| | 281,091 |
| | 333,478 |
| | 44,870 |
| |
| Derivative liabilities | 10,985 |
| | 12,113 |
| | 10,528 |
| | 7,569 |
| | 8,819 |
| |
| Performance fee payable to related party | — |
| | 21,837 |
| | 22,002 |
| | 12,295 |
| | — |
| |
| Interest and dividends payable | 697 |
| | 589 |
| | 816 |
| | 800 |
| | 748 |
| |
| Capital contribution received in advance | — |
| | 10,000 |
| | — |
| | — |
| | — |
| |
| Non-controlling interest | 40,242 |
| | 20,302 |
| | 20,210 |
| | 19,541 |
| | 69,717 |
| |
| Total liabilities and non-controlling interest | 447,482 |
| | 417,734 |
| | 381,888 |
| | 428,258 |
| | 181,969 |
| |
| Total net investments managed by Third Point LLC | $ | 1,802,183 |
| | $ | 1,711,791 |
| | $ | 1,687,452 |
| | $ | 1,628,626 |
| | $ | 1,559,442 |
| |
(1) Includes amounts advanced to the Company to fund collateral held in trust accounts.
Third Point Reinsurance Ltd.
Investment return by investment strategy - by Quarter
|
| | | | | | | | | | | | | | | |
| Summary of investment return on investments managed by Third Point LLC | December 31, 2014 | | September 30, 2014 | | June 30, 2014 | | March 31, 2014 | | December 31, 2013 | |
| | | | | | | | | | | |
| Long/short equities | 0.9 | % | | 0.3 | % | | 0.8 | % | | 0.8 | % | | 4.7 | % | |
| Asset-backed securities | 0.0 | % | | 0.5 | % | | 0.7 | % | | 1.8 | % | | 0.1 | % | |
| Corporate credit | (0.8 | )% | | (0.7 | )% | | 0.7 | % | | 0.8 | % | | 0.7 | % | |
| Macro and other | (0.5 | )% | | (0.1 | )% | | 0.1 | % | | (0.3 | )% | | 0.5 | % | |
| | (0.4 | )% | | (0.04 | )% | | 2.3 | % | | 3.1 | % | | 6.0 | % | |
Third Point Reinsurance Ltd.
General and administrative expenses - by Quarter
(expressed in thousands of U.S. dollars)
|
| | | | | | | | | | | | | | | | | | | | |
| | December 31, 2014 | | September 30, 2014 | | June 30, 2014 | | March 31, 2014 | | December 31, 2013 | |
| Payroll and related | $ | 3,638 |
| | $ | 4,184 |
| | $ | 3,928 |
| | $ | 4,297 |
| | $ | 3,404 |
| |
| Share compensation expenses | 2,279 |
| | 2,481 |
| | 2,246 |
| | 2,252 |
| | 2,186 |
| |
| Legal and accounting | 1,691 |
| | 1,462 |
| | 968 |
| | 1,129 |
| | 1,412 |
| |
| Travel and entertainment | 818 |
| | 672 |
| | 828 |
| | 746 |
| | 855 |
| |
| IT related | 500 |
| | 329 |
| | 330 |
| | 462 |
| | 386 |
| |
| Corporate insurance | 262 |
| | 273 |
| | 275 |
| | 313 |
| | 257 |
| |
| Credit facility fees | 418 |
| | 200 |
| | 220 |
| | 187 |
| | 161 |
| |
| Board of director and related | 157 |
| | 193 |
| | 162 |
| | 133 |
| | 127 |
| |
| Occupancy | 123 |
| | 124 |
| | 164 |
| | 121 |
| | 72 |
| |
| Other general and administrative expenses | 424 |
| | 206 |
| | 428 |
| | 385 |
| | 105 |
| |
| | $ | 10,310 |
| | $ | 10,124 |
| | $ | 9,549 |
| | $ | 10,025 |
| | $ | 8,965 |
| |
Third Point Reinsurance Ltd.
Book value per share and diluted book value per share - by Quarter
(expressed in thousands of U.S. dollars)
|
| | | | | | | | | | | | | | | | | | | |
| | December 31, 2014 | | September 30, 2014 | | June 30, 2014 | | March 31, 2014 | | December 31, 2013 |
| Basic and diluted book value per share numerator: | | | | | | | | | |
| Total shareholders' equity | $ | 1,552,048 |
| | $ | 1,543,638 |
| | $ | 1,543,137 |
| | $ | 1,504,571 |
| | $ | 1,510,396 |
|
| Less: non-controlling interests | (100,135 | ) | | (79,325 | ) | | (75,908 | ) | | (70,879 | ) | | (118,735 | ) |
| Shareholders' equity attributable to shareholders | 1,451,913 |
| | 1,464,313 |
| | 1,467,229 |
| | 1,433,692 |
| | 1,391,661 |
|
| Effect of dilutive warrants issued to founders and an advisor | 46,512 |
| | 46,512 |
| | 46,512 |
| | 46,512 |
| | 46,512 |
|
| Effect of dilutive stock options issued to directors and employees | 61,705 |
| | 65,473 |
| | 69,223 |
| | 69,223 |
| | 101,274 |
|
| Fully diluted book value per share numerator: | $ | 1,560,130 |
| | $ | 1,576,298 |
| | $ | 1,582,964 |
| | $ | 1,549,427 |
| | $ | 1,539,447 |
|
| Basic and diluted book value per share denominator: | | | | | | | | | |
| Issued and outstanding shares | 103,397,542 |
| | 103,324,616 |
| | 103,264,616 |
| | 103,264,616 |
| | 103,264,616 |
|
| Effect of dilutive warrants issued to founders and an advisor | 4,651,163 |
| | 4,651,163 |
| | 4,651,163 |
| | 4,651,163 |
| | 4,651,163 |
|
| Effect of dilutive stock options issued to directors and employees | 6,151,903 |
| | 6,528,647 |
| | 6,797,949 |
| | 6,797,949 |
| | 8,784,861 |
|
| Effect of dilutive restricted shares issued to employees | 922,610 |
| | 706,840 |
| | 666,770 |
| | 660,281 |
| | 657,156 |
|
| Diluted book value per share denominator: | 115,123,218 |
| | 115,211,266 |
| | 115,380,498 |
| | 115,374,009 |
| | 117,357,796 |
|
| | | | | | | | | | |
| Basic book value per share | $ | 14.04 |
| | $ | 14.17 |
| | $ | 14.21 |
| | $ | 13.88 |
| | $ | 13.48 |
|
| Diluted book value per share | $ | 13.55 |
| | $ | 13.68 |
| | $ | 13.72 |
| | $ | 13.43 |
| | $ | 13.12 |
|
| | | | | | | | | | |
| Growth in diluted book value per share | (1.0 | )% | | (0.3 | )% | | 2.2 | % | | 2.4 | % | | 6.2 | % |
(1) Book value per share and diluted book value per share are non-GAAP financial measures. Book value per share is calculated by dividing shareholders’ equity attributable to shareholders, adjusted for subscriptions receivable, by the number of issued and outstanding shares at period end. Diluted book value per share is calculated by dividing shareholders’ equity attributable to shareholders, adjusted for subscriptions receivable, and adjusted to include unvested restricted shares and the exercise of all in-the-money options and warrants. Prior to Third Point Re’s initial public offering, the market share price was assumed to be equal to the fully diluted book value per share. We believe that long-term growth in diluted book value per share is the most important measure of our financial performance because it allows our management and investors to track over time the value created by the retention of earnings. In addition, we believe this metric is used by investors because it provides a basis for comparison with other companies in our industry that also report a similar measure.
Third Point Reinsurance Ltd.
Earnings (loss) per share - by Quarter
(expressed in thousands of U.S. dollars)
|
| | | | | | | | | | | | | | | | | | | | |
| | | December 31, 2014(1) | | September 30, 2014(1) | | June 30, 2014 | | March 31, 2014 | | December 31, 2013 |
| Weighted-average number of common shares outstanding | | | | | | | | | | |
| Basic number of common shares outstanding | | 103,324,616 |
| | 103,295,920 |
| | 103,264,616 |
| | 103,264,616 |
| | 103,264,616 |
|
| Dilutive effect of options | | — |
| | — |
| | 1,490,091 |
| | 1,386,722 |
| | 1,361,688 |
|
| Dilutive effect of warrants | | — |
| | — |
| | 1,679,174 |
| | 1,762,242 |
| | 1,764,149 |
|
| Diluted number of common shares outstanding | | 103,324,616 |
| | 103,295,920 |
| | 106,433,881 |
| | 106,413,580 |
| | 106,390,453 |
|
| | | | | | | | | | | |
| Basic net income (loss) per common share: | | | | | | | | | | |
| Net income (loss) | | $ | (14,679 | ) | | $ | (5,997 | ) | | $ | 31,292 |
| | $ | 39,779 |
| | $ | 80,088 |
|
| Income allocated to participating shares | | — |
| | — |
| | (200 | ) | | (252 | ) | | (496 | ) |
| Net income (loss) available to common shareholders | | $ | (14,679 | ) | | $ | (5,997 | ) | | $ | 31,092 |
| | $ | 39,527 |
| | $ | 79,592 |
|
| | | | | | | | | | | |
| Basic net income (loss) per common share | | $ | (0.14 | ) | | $ | (0.06 | ) | | $ | 0.30 |
| | $ | 0.38 |
| | $ | 0.77 |
|
| | | | | | | | | | | |
| Diluted net income (loss) per common share: | | | | | | | | | | |
| Net income (loss) | | $ | (14,679 | ) | | $ | (5,997 | ) | | $ | 31,292 |
| | $ | 39,779 |
| | $ | 80,088 |
|
| Income allocated to participating securities | | — |
| | — |
| | (194 | ) | | (245 | ) | | (482 | ) |
| Net income available to common shareholders | | $ | (14,679 | ) | | $ | (5,997 | ) | | $ | 31,098 |
| | $ | 39,534 |
| | $ | 79,606 |
|
| | | | | | | | | | | |
| Diluted net income (loss) per common share | | $ | (0.14 | ) | | $ | (0.06 | ) | | $ | 0.29 |
| | $ | 0.37 |
| | $ | 0.75 |
|
(1) As a result of the net loss in the three months ended September 30, 2014 and December 31, 2014, no allocation of the net loss has been made to participating shares in the calculation of basic and diluted net loss per common share.
Third Point Reinsurance Ltd.
Return on beginning shareholders' equity - by Quarter and Year
(expressed in thousands of U.S. dollars)
|
| | | | | | | | | | | | | | | | | | | | |
| | | Quarters ended |
| | | December 31, 2014 | | September 30, 2014 | | June 30, 2014 | | March 31, 2014 | | December 31, 2013 |
| Net income (loss) | | $ | (14,679 | ) | | $ | (5,997 | ) | | $ | 31,292 |
| | $ | 39,779 |
| | $ | 80,088 |
|
| Shareholders' equity attributable to shareholders - beginning of period | | $ | 1,464,313 |
| | $ | 1,467,229 |
| | $ | 1,433,692 |
| | $ | 1,391,661 |
| | $ | 1,309,384 |
|
| Return on beginning shareholders' equity | | (1.0 | )% | | (0.4 | )% | | 2.2 | % | | 2.9 | % | | 6.1 | % |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | Years ended December 31, | | | | |
| | | 2014 | | 2013 | | 2012 | | | | |
| Net income | | $ | 50,395 |
| | $ | 227,311 |
| | $ | 99,401 |
| | | | |
| | | | | | | | | | | |
| Shareholders' equity attributable to shareholders - beginning of period | | 1,391,661 |
| | 868,544 |
| | 585,425 |
| | | | |
| Subscription receivable | | — |
| | — |
| | 177,507 |
| | | | |
| Impact of weighting related to shareholders' equity from IPO | | — |
| | 104,502 |
| | — |
| | | | |
| Adjusted shareholders' equity attributable to shareholders - beginning of period | | $ | 1,391,661 |
| | $ | 973,046 |
| | $ | 762,932 |
| | | | |
| | | | | | | | | | | |
| Return on beginning shareholders' equity | | 3.6 | % | | 23.4 | % | | 13.0 | % | | | | |
(1) Return on beginning shareholders’ equity as presented is a non-GAAP financial measure. Return on beginning shareholders’ equity is calculated by dividing net income by the beginning of period shareholders’ equity attributable to shareholders. For purposes of determining December 31, 2011 shareholders’ equity attributable to shareholders, we add back the impact of subscriptions receivable to shareholders’ equity attributable to shareholders. For the year ended December 31, 2013, we have also adjusted the beginning shareholders’ equity for the impact of the issuance of shares in our IPO on a weighted average basis. These adjustments lower the stated returns on beginning shareholders’ equity. We believe this metric is used by investors to supplement measures of our profitability.
