Third Point Reinsurance Ltd.
Financial Supplement
September 30, 2019
(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 Quarterly Report on Form 10-Q.
|
| | |
| Point House | Christopher S. Coleman - Chief Financial Officer |
| 3 Waterloo Lane | Tel: (441) 542-3333 |
| 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. (“Third Point Re”) and its directly and indirectly owned subsidiaries, including Third Point Reinsurance Company Ltd. (“Third Point Re BDA”) 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 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 basic 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 financial 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, if any, 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: results of operations fluctuate and may not be indicative of our prospects; more established competitors; losses exceeding reserves; highly cyclical property and casualty reinsurance industry; losses from catastrophe exposure; downgrade, withdrawal of ratings or change in rating outlook by rating agencies; significant decrease in our capital or surplus; dependence on key executives; dependence on letter of credit facilities that may not be available on commercially acceptable terms; inability to service our indebtedness; limited cash flow and liquidity due to our indebtedness; inability to raise necessary funds to pay principal or interest on debt; potential lack of availability of capital in the future; credit risk associated with the use of reinsurance brokers; future strategic transactions such as acquisitions, dispositions, mergers or joint ventures; technology breaches or failures, including cyber-attacks; lack of control over Third Point Enhanced LP (“TP Fund”); lack of control over the allocation and performance of TP Fund’s investment portfolio; dependence on Third Point LLC to implement TP Fund’s investment strategy; limited ability to withdraw our capital accounts from TP Fund; decline in revenue due to poor performance of TP Fund’s investment portfolio; TP Fund’s investment strategy involves risks that are greater than those faced by competitors; termination by Third Point LLC of our or TP Fund’s investment management agreements; potential conflicts of interest with Third Point LLC; losses resulting from significant investment positions; credit risk associated with the default on obligations of counterparties; ineffective investment risk management systems; fluctuations in the market value of TP Fund’s investment portfolio; trading restrictions being placed on TP Fund’s investments; limited termination provisions in our investment management agreements; limited liquidity and lack of valuation data on certain TP Fund’s investments; U.S. and global economic downturns; specific characteristics of investments in mortgage-backed securities and other asset-backed securities, in securities of issues based outside the U.S., and in special situation or distressed companies; loss of key employees at Third Point LLC; Third Point LLC’s compensation arrangements may incentivize investments that are risky or speculative; increased regulation or scrutiny of alternative investment advisers affecting our reputation; suspension or revocation of our reinsurance licenses; potentially being deemed an investment company under U.S. federal securities law; failure of reinsurance subsidiaries to meet minimum capital and surplus requirements; changes in Bermuda or other law and regulation that may have an adverse impact on our operations; Third Point Re and/or Third Point Re BDA potentially becoming subject to U.S. federal income taxation; potential characterization of Third Point Re and/or Third Point Re BDA as a passive foreign investment company; subjection of our affiliates to the base erosion and anti-abuse tax; potentially becoming subject to U.S. withholding and information reporting requirements under the Foreign Account Tax Compliance Act; and and other risks and factors listed under “Risk Factors” in the Company’s 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 we undertake 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
|
| | |
| | | |
| Key Performance Indicators | | |
| | |
| | | |
| Consolidated Financial Statements | | |
| | |
| | |
| | |
| | | |
| Operating Segment Information | | |
| Segment Reporting - Three and nine months ended September 30, 2019 and 2018 | | |
| | |
| Gross Premiums Written by Lines and Type of Business - by Quarter | | |
| Underwriting Ratios - by Quarter | | |
| | | |
| Investments | | |
| | |
| Net Investment Return by Investment Strategy - by Quarter | | |
| | | |
| Other | | |
| General and Administrative Expenses - by Quarter | | |
| Basic and Diluted Book Value per Share - by Quarter | | |
| Earnings (Loss) per Share - by Quarter | | |
| Return on Beginning Shareholders’ Equity - by Quarter | | |
Third Point Reinsurance Ltd.
Key Performance Indicators
September 30, 2019 and 2018
(expressed in thousands of U.S. dollars, except per share data and ratios)
|
| | | | | | | | | | | | | | | |
| | Three months ended | | Nine months ended |
| | September 30,
2019 | | September 30,
2018 | | September 30,
2019 | | September 30,
2018 |
| | | | | | | | |
| Key underwriting metrics for Property and Casualty Reinsurance segment: | | | | | | | |
Net underwriting loss (1) | $ | (5,495 | ) | | $ | (6,317 | ) | | $ | (12,892 | ) | | $ | (17,734 | ) |
Combined ratio (1) | 102.7 | % | | 104.9 | % | | 102.6 | % | | 104.3 | % |
| | | | | | | | |
| Key investment return metrics: | | | | | | | |
| Net investment income (loss) | $ | (3,138 | ) | | $ | (3,590 | ) | | $ | 220,946 |
| | $ | 25,377 |
|
| Net investment return on net investments managed by Third Point LLC | (0.2 | )% | | (0.2 | )% | | 10.2 | % | | 0.6 | % |
| | | | | | | | |
| Key shareholders’ value creation metrics: | | | | | | | |
Basic book value per share (2) (3) | $ | 15.04 |
| | $ | 13.15 |
| | $ | 15.04 |
| | $ | 13.15 |
|
Diluted book value per share (2) (3) | $ | 14.76 |
| | $ | 12.98 |
| | $ | 14.76 |
| | $ | 12.98 |
|
Increase (decrease) in diluted book value per share (2) | (0.8 | )% | | (0.4 | )% | | 13.7 | % | | 0.4 | % |
Return on beginning shareholders’ equity attributable to Third Point Re common shareholders (2) | (1.1 | )% | | (0.8 | )% | | 14.2 | % | | (1.2 | )% |
| |
| (1) | Refer to accompanying “Segment Reporting - Three and nine months ended September 30, 2019 and 2018” for a calculation of net underwriting loss and combined ratio. |
| |
| (2) | Basic book value per share, diluted book value per share and return on beginning shareholders’ equity attributable to Third Point Re common shareholders are non-GAAP financial measures. There are no comparable GAAP measures. In the third quarter of 2019, the Company changed its method for calculating the impact of options and warrants on diluted book value per share to the treasury stock method, refer to accompanying “Basic book value per share and diluted book value per share - by Quarter” for calculation of basic and diluted book value per share and “Return on beginning shareholders’ equity - by Quarter” for calculation of return on beginning shareholders' equity attributable to Third Point Re common shareholders. |
| |
| (3) | Prior year comparatives represent amounts as of December 31, 2018. |
Third Point Reinsurance Ltd.
Condensed Consolidated Balance Sheets - by Quarter
(expressed in thousands of U.S. dollars) |
| | | | | | | | | | | | | | | | | | | | |
| | | September 30,
2019 | | June 30,
2019 | | March 31,
2019 | | December 31,
2018 | | September 30,
2018 |
| Assets | | | | | | | | | | |
| Investment in related party investment fund, at fair value | | $ | 818,600 |
| | $ | 824,352 |
| | $ | 1,475,995 |
| | $ | 1,284,004 |
| | $ | 1,627,924 |
|
| Debt securities, trading, at fair value | | 220,045 |
| | 567,354 |
| | 241,059 |
| | 239,640 |
| | 244,876 |
|
| Other investments, at fair value | | 3,500 |
| | 3,010 |
| | 3,087 |
| | 84 |
| | 196 |
|
| Total investments | | 1,042,145 |
| | 1,394,716 |
| | 1,720,141 |
| | 1,523,728 |
| | 1,872,996 |
|
| Cash and cash equivalents | | 693,105 |
| | 93,757 |
| | 54,319 |
| | 104,183 |
| | 49,786 |
|
| Restricted cash and cash equivalents | | 816,519 |
| | 656,146 |
| | 616,844 |
| | 609,154 |
| | 581,134 |
|
| Subscription receivable from related party investment fund | | — |
| | — |
| | 15,000 |
| | — |
| | 30,000 |
|
| Redemption receivable from related party investment fund | | — |
| | 400,000 |
| | — |
| | — |
| | — |
|
| Due from brokers | | — |
| | — |
| | 637 |
| | 1,411 |
| | 12,853 |
|
| Interest and dividends receivable | | 2,932 |
| | 1,792 |
| | 1,891 |
| | 1,316 |
| | 1,975 |
|
| Reinsurance balances receivable | | 680,630 |
| | 696,170 |
| | 758,816 |
| | 602,448 |
| | 577,382 |
|
| Deferred acquisition costs, net | | 166,968 |
| | 208,027 |
| | 233,108 |
| | 203,842 |
| | 231,286 |
|
| Unearned premiums ceded | | 14,370 |
| | 15,473 |
| | 16,139 |
| | 17,552 |
| | 16,772 |
|
| Loss and loss adjustment expenses recoverable | | 4,270 |
| | 3,655 |
| | 2,751 |
| | 2,031 |
| | 1,576 |
|
| Other assets | | 17,808 |
| | 19,715 |
| | 20,488 |
| | 20,569 |
| | 13,082 |
|
| Total assets | | $ | 3,438,747 |
| | $ | 3,489,451 |
| | $ | 3,440,134 |
| | $ | 3,086,234 |
| | $ | 3,388,842 |
|
| Liabilities | | | | | | | | | | |
| Accounts payable and accrued expenses | | $ | 14,607 |
| | $ | 14,843 |
| | $ | 9,225 |
| | $ | 7,261 |
| | $ | 9,200 |
|
| Reinsurance balances payable | | 98,766 |
| | 88,670 |
| | 76,766 |
| | 69,701 |
| | 71,070 |
|
| Deposit liabilities | | 174,405 |
| | 148,845 |
| | 144,782 |
| | 145,342 |
| | 146,961 |
|
| Unearned premium reserves | | 592,319 |
| | 702,398 |
| | 767,352 |
| | 602,936 |
| | 693,333 |
|
| Loss and loss adjustment expense reserves | | 1,060,000 |
| | 1,021,776 |
| | 986,639 |
| | 937,157 |
| | 822,180 |
|
| Due to brokers | | — |
| | — |
| | — |
| | — |
| | 16 |
|
| Participation agreement with related party investment fund | | — |
| | — |
| | 1,521 |
| | 2,297 |
| | 23,149 |
|
| Interest and dividends payable | | 1,026 |
| | 3,022 |
| | 1,015 |
| | 3,055 |
| | 1,157 |
|
| Senior notes payable, net of deferred costs | | 114,044 |
| | 113,999 |
| | 113,955 |
| | 113,911 |
| | 113,866 |
|
| Total liabilities | | 2,055,167 |
| | 2,093,553 |
| | 2,101,255 |
| | 1,881,660 |
| | 1,880,932 |
|
| Commitments and contingent liabilities | | | | | | | | | | |
| Shareholders’ equity | | | | | | | | | | |
| Preference shares | | — |
| | — |
| | — |
| | — |
| | — |
|
| Common shares | | 9,422 |
| | 9,399 |
| | 9,429 |
| | 9,364 |
| | 9,417 |
|
| Additional paid-in capital | | 926,949 |
| | 924,191 |
| | 920,207 |
| | 918,882 |
| | 924,153 |
|
| Retained earnings | | 447,209 |
| | 462,308 |
| | 409,243 |
| | 276,328 |
| | 574,340 |
|
| Shareholders’ equity attributable to Third Point Re common shareholders | | 1,383,580 |
| | 1,395,898 |
| | 1,338,879 |
| | 1,204,574 |
| | 1,507,910 |
|
| Total liabilities, noncontrolling interests and shareholders’ equity | | $ | 3,438,747 |
| | $ | 3,489,451 |
| | $ | 3,440,134 |
| | $ | 3,086,234 |
| | $ | 3,388,842 |
|
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 | | Nine months ended |
| | September 30,
2019 | | September 30,
2018 | | September 30,
2019 | | September 30,
2018 |
| Revenues | | | | | | | |
| Gross premiums written | $ | 95,388 |
| | $ | 30,064 |
| | $ | 497,616 |
| | $ | 458,189 |
|
| Gross premiums ceded | (1,116 | ) | | — |
| | (3,301 | ) | | (18,125 | ) |
| Net premiums written | 94,272 |
| | 30,064 |
| | 494,315 |
|
| 440,064 |
|
| Change in net unearned premium reserves | 108,976 |
| | 97,929 |
| | 7,435 |
| | (28,092 | ) |
| Net premiums earned | 203,248 |
| | 127,993 |
| | 501,750 |
| | 411,972 |
|
| Net investment income (loss) from investment in related party investment fund (1) | (5,751 | ) | | (1,926 | ) | | 207,597 |
| | (1,926 | ) |
| Net investment income before management and performance fees to related parties | 2,613 |
| | 3,641 |
| | 13,349 |
| | 57,148 |
|
| Management and performance fees to related parties | — |
| | (5,305 | ) | | — |
| | (29,845 | ) |
| Net investment income (loss) | (3,138 | ) | | (3,590 | ) | | 220,946 |
| | 25,377 |
|
| Total revenues | 200,110 |
| | 124,403 |
| | 722,696 |
| | 437,349 |
|
| Expenses | | | | | | | |
| Loss and loss adjustment expenses incurred, net | 85,703 |
| | 88,706 |
| | 263,105 |
| | 265,326 |
|
| Acquisition costs, net | 118,271 |
| | 40,841 |
| | 233,775 |
| | 149,830 |
|
| General and administrative expenses | 9,237 |
| | 9,511 |
| | 41,019 |
| | 28,688 |
|
| Other (income) expenses | 5,058 |
| | (1,362 | ) | | 12,994 |
| | 6,616 |
|
| Interest expense | 2,074 |
| | 2,074 |
| | 6,154 |
| | 6,154 |
|
| Foreign exchange gains | (4,921 | ) | | (1,979 | ) | | (6,663 | ) | | (4,215 | ) |
| Total expenses | 215,422 |
| | 137,791 |
| | 550,384 |
| | 452,399 |
|
| Income (loss) before income tax (expense) benefit | (15,312 | ) | | (13,388 | ) | | 172,312 |
| | (15,050 | ) |
| Income tax (expense) benefit | 213 |
| | 111 |
| | (1,431 | ) | | (4,407 | ) |
| Net income (loss) | (15,099 | ) | | (13,277 | ) | | 170,881 |
| | (19,457 | ) |
| Net income attributable to noncontrolling interests in related party | — |
| | (4 | ) | | — |
| | (223 | ) |
| Net income (loss) available to Third Point Re common shareholders | $ | (15,099 | ) | | $ | (13,281 | ) | | $ | 170,881 |
| | $ | (19,680 | ) |
| Earnings (loss) per share available to Third Point Re common shareholders | | | | | | | |
| Basic earnings (loss) per share available to Third Point Re common shareholders (2) | $ | (0.16 | ) | | $ | (0.14 | ) | | $ | 1.86 |
| | $ | (0.20 | ) |
| Diluted earnings (loss) per share available to Third Point Re common shareholders (2) | $ | (0.16 | ) | | $ | (0.14 | ) | | $ | 1.84 |
| | $ | (0.20 | ) |
| Weighted average number of common shares used in the determination of earnings (loss) per share | | | | | | | |
| Basic | 91,903,556 |
| | 95,671,385 |
| | 91,784,268 |
| | 98,768,442 |
|
| Diluted | 91,903,556 |
| | 95,671,385 |
| | 92,709,421 |
| | 98,768,442 |
|
(1) Effective August 31, 2018, Third Point Reinsurance Ltd., Third Point Reinsurance Company Ltd. (“Third Point Re BDA”) and Third Point Reinsurance (USA) Ltd. (“Third Point Re USA”) and together with Third Point Re BDA, the “TPRE Limited Partners”, entered into a Limited Partnership Agreement (the “2018 LPA”) to invest in Third Point Enhanced LP (“TP Fund”), a related party investment fund. As a result, the management and performance fees are presented within net investment income from investment in related party investment fund from the effective date of the 2018 LPA. Management and performance fees incurred prior to the effective date of the 2018 LPA are reflected in management and performance fees to related parties.
(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 unvested restricted shares. Diluted earnings per share is based on the weighted average number of common shares and participating securities outstanding and includes any dilutive effects of warrants, options and unvested restricted shares under share plans and are determined 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 treated in the same manner as outstanding shares for earnings per share calculations. The Company treats certain of its unvested restricted shares as participating securities. In the event of a net loss, all participating securities, outstanding warrants, options and restricted shares are excluded from both basic and diluted loss per share since their inclusion would be anti-dilutive.
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 |
| | | September 30,
2019 | | June 30,
2019 | | March 31,
2019 | | December 31,
2018 | | September 30,
2018 |
| Revenues | | | | | | | | | | |
| Gross premiums written | | $ | 95,388 |
| | $ | 82,637 |
| | $ | 319,591 |
| | $ | 120,063 |
| | $ | 30,064 |
|
| Gross premiums ceded | | (1,116 | ) | | (1,473 | ) | | (712 | ) | | (1,770 | ) | | — |
|
| Net premiums written | | 94,272 |
| | 81,164 |
| | 318,879 |
| | 118,293 |
| | 30,064 |
|
| Change in net unearned premium reserves | | 108,976 |
| | 64,288 |
| | (165,829 | ) | | 91,177 |
| | 97,929 |
|
| Net premiums earned | | 203,248 |
| | 145,452 |
| | 153,050 |
| | 209,470 |
| | 127,993 |
|
| Net investment income (loss) from investment in related party investment fund (1) | | (5,751 | ) | | 66,357 |
| | 146,991 |
| | (278,921 | ) | | (1,926 | ) |
| Net investment income before management and performance fees to related parties | | 2,613 |
| | 2,774 |
| | 7,962 |
| | 2,111 |
| | 3,641 |
|
| Management and performance fees to related parties | | — |
| | — |
| | — |
| | — |
| | (5,305 | ) |
| Net investment income (loss) | | (3,138 | ) | | 69,131 |
| | 154,953 |
| | (276,810 | ) | | (3,590 | ) |
| Total revenues | | 200,110 |
| | 214,583 |
| | 308,003 |
| | (67,340 | ) | | 124,403 |
|
| Expenses | | | | | | | | | | |
| Loss and loss adjustment expenses incurred, net | | 85,703 |
| | 82,334 |
| | 95,068 |
| | 173,088 |
| | 88,706 |
|
| Acquisition costs, net | | 118,271 |
| | 58,006 |
| | 57,498 |
| | 56,668 |
| | 40,841 |
|
| General and administrative expenses | | 9,237 |
| | 19,650 |
| | 12,132 |
| | 7,553 |
| | 9,511 |
|
| Other (income) expenses | | 5,058 |
| | 3,811 |
| | 4,125 |
| | 2,994 |
| | (1,362 | ) |
| Interest expense | | 2,074 |
| | 2,051 |
| | 2,029 |
| | 2,074 |
| | 2,074 |
|
| Foreign exchange (gains) losses | | (4,921 | ) | | (4,260 | ) | | 2,518 |
| | (3,288 | ) | | (1,979 | ) |
| Total expenses | | 215,422 |
| | 161,592 |
| | 173,370 |
| | 239,089 |
| | 137,791 |
|
| Income (loss) before income tax (expense) benefit | | (15,312 | ) | | 52,991 |
| | 134,633 |
| | (306,429 | ) | | (13,388 | ) |
| Income tax (expense) benefit | | 213 |
| | 74 |
| | (1,718 | ) | | 8,417 |
| | 111 |
|
| Net income (loss) | | (15,099 | ) | | 53,065 |
| | 132,915 |
| | (298,012 | ) | | (13,277 | ) |
| Net income attributable to noncontrolling interests in related party | | — |
| | — |
| | — |
| | — |
| | (4 | ) |
| Net income (loss) available to Third Point Re common shareholders | | $ | (15,099 | ) | | $ | 53,065 |
| | $ | 132,915 |
| | $ | (298,012 | ) | | $ | (13,281 | ) |
| Earnings (loss) per share available to Third Point Re common shareholders | | | | | | | | | | |
| Basic earnings (loss) per share available to Third Point Re common shareholders (2) | | $ | (0.16 | ) | | $ | 0.58 |
| | $ | 1.45 |
| | $ | (3.24 | ) | | $ | (0.14 | ) |
| Diluted earnings (loss) per share available to Third Point Re common shareholders (2) | | $ | (0.16 | ) | | $ | 0.57 |
| | $ | 1.43 |
| | $ | (3.24 | ) | | $ | (0.14 | ) |
| Weighted average number of common shares used in the determination of earnings (loss) per common share | | | | | | | | | | |
| Basic | | 91,903,556 |
| | 91,776,870 |
| | 91,669,810 |
| | 91,967,831 |
| | 95,671,385 |
|
| Diluted | | 91,903,556 |
| | 92,801,799 |
| | 92,578,933 |
| | 91,967,831 |
| | 95,671,385 |
|
(1) As a result of the 2018 LPA, the management and performance fees are presented within net investment income (loss) from investment in related party investment fund from the effective date of the 2018 LPA. Management and performance fees incurred prior to the effective date of the 2018 LPA are reflected in management and performance fees to related parties.
(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 unvested restricted shares. Diluted earnings per share is based on the weighted average number of common shares and participating securities outstanding and includes any dilutive effects of warrants, options and unvested restricted shares under share plans and are determined 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 treated in the same manner as outstanding shares for earnings per share calculations. The Company treats certain of its unvested restricted shares as participating securities. In the event of a net loss, all participating securities, outstanding warrants, options and restricted shares are excluded from both basic and diluted loss per share since their inclusion would be anti-dilutive.
Third Point Reinsurance Ltd.
Segment Reporting - Three and nine months ended September 30, 2019 and 2018
(expressed in thousands of U.S. dollars) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three months ended | | Nine months ended |
| | September 30, 2019 | | September 30, 2018 | | September 30, 2019 | | September 30, 2018 |
| | Property and Casualty Reinsurance | | Total | | Property and Casualty Reinsurance | | Total | | Property and Casualty Reinsurance | | Total (1) | | Property and Casualty Reinsurance | | Total (1) |
| Revenues | | | | | | | | | | | |
| Gross premiums written | $ | 95,388 |
| | $ | 95,388 |
| | $ | 30,064 |
| | $ | 30,064 |
| | $ | 497,616 |
| | $ | 497,616 |
| | $ | 458,189 |
| | $ | 458,189 |
|
| Gross premiums ceded | (1,116 | ) | | (1,116 | ) | | — |
| | — |
| | (3,301 | ) | | (3,301 | ) | | (18,125 | ) | | (18,125 | ) |
| Net premiums written | 94,272 |
| | 94,272 |
| | 30,064 |
| | 30,064 |
| | 494,315 |
| | 494,315 |
| | 440,064 |
| | 440,064 |
|
| Change in net unearned premium reserves | 108,976 |
| | 108,976 |
| | 97,929 |
| | 97,929 |
| | 7,435 |
| | 7,435 |
| | (28,092 | ) | | (28,092 | ) |
| Net premiums earned | 203,248 |
| | 203,248 |
| | 127,993 |
| | 127,993 |
| | 501,750 |
| | 501,750 |
| | 411,972 |
| | 411,972 |
|
| Expenses | | | | | | | | | | | | | | | |
| Loss and loss adjustment expenses incurred, net | 85,703 |
| | 85,703 |
| | 88,706 |
| | 88,706 |
| | 263,105 |
| | 263,105 |
| | 265,326 |
| | 265,326 |
|
| Acquisition costs, net | 118,271 |
| | 118,271 |
| | 40,841 |
| | 40,841 |
| | 233,775 |
| | 233,775 |
| | 149,830 |
| | 149,830 |
|
| General and administrative expenses | 4,769 |
| | 4,769 |
| | 4,763 |
| | 4,763 |
| | 17,762 |
| | 17,762 |
| | 14,550 |
| | 14,550 |
|
| Total expenses | 208,743 |
| | 208,743 |
| | 134,310 |
| | 134,310 |
| | 514,642 |
| | 514,642 |
| | 429,706 |
| | 429,706 |
|
| Net underwriting loss | $ | (5,495 | ) | | (5,495 | ) | | $ | (6,317 | ) | | (6,317 | ) | | $ | (12,892 | ) | | (12,892 | ) | | $ | (17,734 | ) | | (17,734 | ) |
| Net investment income (loss) | | | (3,138 | ) | | | | (3,590 | ) | | | | 220,946 |
| | | | 25,377 |
|
| Corporate expenses | | | (4,468 | ) | | | | (4,748 | ) | | | | (23,257 | ) | | | | (14,138 | ) |
| Other income (expense) | | | (5,058 | ) | | | | 1,362 |
| | | | (12,994 | ) | | | | (6,616 | ) |
| Interest expense | | | (2,074 | ) | | | | (2,074 | ) | | | | (6,154 | ) | | | | (6,154 | ) |
| Foreign exchange gains | | | 4,921 |
| | | | 1,979 |
| | | | 6,663 |
| | | | 4,215 |
|
| Income tax (expense) benefit | | | 213 |
| | | | 111 |
| | | | (1,431 | ) | | | | (4,407 | ) |
| Net income attributable to noncontrolling interests in related party | | | — |
| | | | (4 | ) | | | | — |
| | | | (223 | ) |
| Net income (loss) available to Third Point Re common shareholders | | | $ | (15,099 | ) | | | | $ | (13,281 | ) | | | | $ | 170,881 |
| | | | $ | (19,680 | ) |
| | | | | | | | | | | | | | | | |
| Property and Casualty Reinsurance - Underwriting Ratios (1): | | | | | | | | | | | | | | | |
| Loss ratio | 42.2 | % | | | | 69.3 | % | | | | 52.4 | % | | | | 64.4 | % | | |
| Acquisition cost ratio | 58.2 | % | | | | 31.9 | % | | | | 46.6 | % | | | | 36.4 | % | | |
| Composite ratio | 100.4 | % | | | | 101.2 | % | | | | 99.0 | % | | | | 100.8 | % | | |
| General and administrative expense ratio | 2.3 | % | | | | 3.7 | % | | | | 3.6 | % | | | | 3.5 | % | | |
| Combined ratio | 102.7 | % | | | | 104.9 | % | | | | 102.6 | % | | | | 104.3 | % | | |
(1) Underwriting ratios are calculated by dividing the related expense by net premiums earned.
Third Point Reinsurance Ltd.
Property and Casualty Reinsurance Segment - by Quarter (1)
(expressed in thousands of U.S. dollars)
|
| | | | | | | | | | | | | | | | | | | | |
| | | Three months ended |
| | | September 30,
2019 | | June 30,
2019 | | March 31,
2019 | | December 31,
2018 | | September 30,
2018 |
| Revenues | | | | | | | | | | |
| Gross premiums written | | $ | 95,388 |
| | $ | 82,637 |
| | $ | 319,591 |
| | $ | 120,063 |
| | $ | 30,064 |
|
| Gross premiums ceded | | (1,116 | ) | | (1,473 | ) | | (712 | ) | | (1,770 | ) | | — |
|
| Net premiums written | | 94,272 |
| | 81,164 |
| | 318,879 |
| | 118,293 |
| | 30,064 |
|
| Change in net unearned premium reserves | | 108,976 |
| | 64,288 |
| | (165,829 | ) | | 91,177 |
| | 97,929 |
|
| Net premiums earned | | 203,248 |
| | 145,452 |
| | 153,050 |
| | 209,470 |
| | 127,993 |
|
| Expenses | | | | | | | | | | |
| Loss and loss adjustment expenses incurred, net | | 85,703 |
| | 82,334 |
| | 95,068 |
| | 173,088 |
| | 88,706 |
|
| Acquisition costs, net | | 118,271 |
| | 58,006 |
| | 57,498 |
| | 56,668 |
| | 40,841 |
|
| General and administrative expenses | | 4,769 |
| | 6,769 |
| | 6,224 |
| | 4,085 |
| | 4,763 |
|
| Total expenses | | 208,743 |
| | 147,109 |
| | 158,790 |
| | 233,841 |
| | 134,310 |
|
| Net underwriting loss | | $ | (5,495 | ) | | $ | (1,657 | ) | | $ | (5,740 | ) | | $ | (24,371 | ) | | $ | (6,317 | ) |
| | | | | | | | | | | |
Underwriting ratios (1) | | | | | | | | | | |
| Loss ratio | | 42.2 | % | | 56.6 | % | | 62.1 | % | | 82.6 | % | | 69.3 | % |
| Acquisition cost ratio | | 58.2 | % | | 39.9 | % | | 37.6 | % | | 27.0 | % | | 31.9 | % |
| Composite ratio | | 100.4 | % | | 96.5 | % | | 99.7 | % | | 109.6 | % | | 101.2 | % |
| General and administrative expense ratio | | 2.3 | % | | 4.6 | % | | 4.1 | % | | 2.0 | % | | 3.7 | % |
| Combined ratio | | 102.7 | % | | 101.1 | % | | 103.8 | % | | 111.6 | % | | 104.9 | % |
(1) Underwriting ratios are calculated by dividing the related expense by net premiums earned.
Third Point Reinsurance Ltd.
Gross Premiums Written by Lines and Type of Business - by Quarter
(expressed in thousands of U.S. dollars)
|
| | | | | | | | | | | | | | | | | | | | |
| | | Three months ended |
| | | September 30,
2019 | | June 30,
2019 | | March 31,
2019 | | December 31,
2018 | | September 30,
2018 |
| Line and Type of Business | | | | | | | | | | |
| Property Catastrophe | | $ | 6,127 |
| | $ | 15,843 |
| | $ | 41,514 |
| | $ | — |
| | $ | — |
|
| Other Property | | 578 |
| | 26,019 |
| | 12,467 |
| | 10,619 |
| | (3,578 | ) |
| Property | | 6,705 |
| | 41,862 |
| | 53,981 |
| | 10,619 |
| | (3,578 | ) |
| | | | | | | | | | | |
| Workers Compensation | | 2,227 |
| | 312 |
| | 22,810 |
| | 202 |
| | 6,948 |
|
| Auto | | 10,574 |
| | 14,136 |
| | 26,568 |
| | (5,790 | ) | | (1,295 | ) |
| Other Casualty | | 2,931 |
| | 9,081 |
| | 28,514 |
| | 7,619 |
| | 31,375 |
|
| Casualty | | 15,732 |
| | 23,529 |
| | 77,892 |
| | 2,031 |
| | 37,028 |
|
| | | | | | | | | | | |
| Credit & Financial Lines | | 7,265 |
| | 16,417 |
| | 17,310 |
| | 21,547 |
| | 1,190 |
|
| Multi-line | | 2,345 |
| | (1,028 | ) | | 174,130 |
| | 17,333 |
| | (4,607 | ) |
| Other Specialty | | 4,649 |
| | 1,857 |
| | 1,631 |
| | (1,346 | ) | | 31 |
|
| Specialty | | 14,259 |
| | 17,246 |
| | 193,071 |
| | 37,534 |
| | (3,386 | ) |
| | | | | | | | | | | |
| Total prospective reinsurance contracts | | $ | 36,696 |
| | $ | 82,637 |
| | $ | 324,944 |
| | $ | 50,184 |
| | $ | 30,064 |
|
| Retroactive reinsurance contracts | | 58,692 |
| | — |
| | (5,353 | ) | | 69,879 |
| | — |
|
| Total property and casualty reinsurance segment | | $ | 95,388 |
| | $ | 82,637 |
| | $ | 319,591 |
| | $ | 120,063 |
| | $ | 30,064 |
|
| | | | | | | | | | | |
Third Point Reinsurance Ltd.
Underwriting Ratios - by Quarter (1)
(expressed in thousands of U.S. dollars)
|
| | | | | | | | | | | | | | | |
| | | Three months ended |
| | | September 30,
2019 | | June 30,
2019 | | March 31,
2019 | | December 31,
2018 | | September 30,
2018 |
Underwriting ratios (1) | | | | | | | | | | |
| Loss ratio | | 42.2 | % | | 56.6 | % | | 62.1 | % | | 82.6 | % | | 69.3 | % |
| Acquisition cost ratio | | 58.2 | % | | 39.9 | % | | 37.6 | % | | 27.0 | % | | 31.9 | % |
| Composite ratio | | 100.4 | % | | 96.5 | % | | 99.7 | % | | 109.6 | % | | 101.2 | % |
| General and administrative expense ratio | | 2.3 | % | | 4.6 | % | | 4.1 | % | | 2.0 | % | | 3.7 | % |
| Combined ratio | | 102.7 | % | | 101.1 | % | | 103.8 | % | | 111.6 | % | | 104.9 | % |
| | | | | | | | | | | |
Impact of catastrophe losses (2) | | | | | | | | | | |
| Loss ratio | | 7.1 | % | | — | % | | — | % | | 8.8 | % | | — | % |
| Acquisition cost ratio | | (0.9 | )% | | — | % | | — | % | | — | % | | — | % |
| Composite ratio | | 6.2 | % | | — | % | | — | % | | 8.8 | % | | — | % |
| | | | | | | | | | | |
Impact of reserve developments (2) | | | | | | | | | | |
| Loss ratio | | (37.6 | )% | | (5.6 | )% | | (2.6 | )% | | (2.8 | )% | | 1.1 | % |
| Acquisition cost ratio | | 35.7 | % | | 5.5 | % | | 2.4 | % | | 2.6 | % | | (2.7 | )% |
| Composite ratio | | (1.9 | )% | | (0.1 | )% | | (0.2 | )% | | (0.2 | )% | | (1.6 | )% |
| | | | | | | | | | | |
| Accident year ex-CAT underwriting ratios | | | | | | | | | | |
| Loss ratio | | 72.7 | % | | 62.2 | % | | 64.7 | % | | 76.6 | % | | 68.2 | % |
| Acquisition cost ratio | | 23.4 | % | | 34.4 | % | | 35.2 | % | | 24.4 | % | | 34.6 | % |
| Composite ratio | | 96.1 | % | | 96.6 | % | | 99.9 | % | | 101.0 | % | | 102.8 | % |
| General and administrative expense ratio | | 2.3 | % | | 4.6 | % | | 4.1 | % | | 2.0 | % | | 3.7 | % |
| Combined ratio | | 98.4 | % | | 101.2 | % | | 104.0 | % | | 103.0 | % | | 106.5 | % |
| | | | | | | | | | | |
(1) Underwriting ratios are calculated by dividing the related expense by net premiums earned.
(2) General and administrative expense ratio excluded because catastrophe losses and impact of reserve developments do not impact this ratio.
Third Point Reinsurance Ltd.
Net Investments Managed by Third Point LLC - by Quarter(1)
(expressed in thousands of U.S. dollars)
|
| | | | | | | | | | | | | | | | | | | |
| | September 30,
2019 | | June 30,
2019 | | March 31,
2019 | | December 31,
2018 | | September 30,
2018 |
| Assets | | | | | | | | | |
| TP Fund | $ | 818,600 |
| | $ | 824,352 |
| | $ | 1,475,995 |
| | $ | 1,284,004 |
| | $ | 1,627,924 |
|
| Debt securities, trading, at fair value | 220,045 |
| | 567,354 |
| | 241,059 |
| | 239,640 |
| | 244,876 |
|
| Total investments | 1,038,645 |
| | 1,391,706 |
| | 1,717,054 |
| | 1,523,644 |
| | 1,872,800 |
|
| Cash and cash equivalents | 611,442 |
| | 22,563 |
| | 3,647 |
| | 1,017 |
| | 10,387 |
|
| Restricted cash and cash equivalents | 816,519 |
| | 656,146 |
| | 616,844 |
| | 609,154 |
| | 581,134 |
|
| Redemption receivable from related party investment fund | — |
| | 400,000 |
| | — |
| | — |
| | — |
|
| Due from brokers | — |
| | — |
| | 637 |
| | 1,411 |
| | 12,853 |
|
| Interest and dividends receivable | 2,932 |
| | 1,792 |
| | 1,891 |
| | 1,316 |
| | 1,975 |
|
| Other assets | 6 |
| | 7 |
| | — |
| | — |
| | — |
|
| Total assets | $ | 2,469,544 |
| | $ | 2,472,214 |
| | $ | 2,340,073 |
| | $ | 2,136,542 |
| | $ | 2,479,149 |
|
| Liabilities and noncontrolling interests in related party | | | | | | | | | |
| Accounts payable and accrued expenses | $ | 324 |
| | $ | 227 |
| | $ | 188 |
| | $ | 114 |
| | $ | 740 |
|
| Due to brokers | — |
| | — |
| | — |
| | — |
| | 16 |
|
| Participation agreement with related party investment fund | — |
| | — |
| | 1,521 |
| | 2,297 |
| | 23,149 |
|
| Interest and dividends payable | — |
| | — |
| | — |
| | — |
| | 131 |
|
| Total liabilities and noncontrolling interests in related party | 324 |
| | 227 |
| | 1,709 |
| | 2,411 |
| | 24,036 |
|
| Total net investments managed by Third Point LLC | $ | 2,469,220 |
| | $ | 2,471,987 |
| | $ | 2,338,364 |
| | $ | 2,134,131 |
| | $ | 2,455,113 |
|
| | | | | | | | | | |
Third Point Reinsurance Ltd.
Net Investment Return by Investment Strategy - by Quarter
|
| | | | | | | | | | | | | | |
| Summary of net investment return on investments managed by Third Point LLC (1) | September 30,
2019 | | June 30,
2019 | | March 31,
2019 | | December 31,
2018 | | September 30,
2018 |
| | | | | | | | | | |
| Long | | | | | | | | | |
| Equity | 1.4 | % | | 3.2 | % | | 8.4 | % | | (13.3 | )% | | 1.9 | % |
| Credit | (0.7 | )% | | 0.6 | % | | 0.9 | % | | (1.0 | )% | | 0.2 | % |
| Other | (0.1 | )% | | 0.5 | % | | 0.7 | % | | (0.7 | )% | | (1.2 | )% |
| | 0.6 | % | | 4.3 | % | | 10.0 | % | | (15.0 | )% | | 0.9 | % |
| | | | | | | | | | |
| Short | | | | | | | | | |
| Equity | (0.7 | )% | | (1.2 | )% | | (2.4 | )% | | 3.1 | % | | (1.1 | )% |
| Credit | — | % | | — | % | | (0.3 | )% | | 0.1 | % | | — | % |
| Other | (0.1 | )% | | (0.2 | )% | | (0.1 | )% | | 0.4 | % | | — | % |
| | (0.8 | )% | | (1.4 | )% | | (2.8 | )% | | 3.6 | % | | (1.1 | )% |
| | | | | | | | | | |
| Net | | | | | | | | | |
| Equity | 0.7 | % | | 2.0 | % | | 6.0 | % | | (10.2 | )% | | 0.8 | % |
| Credit | (0.7 | )% | | 0.6 | % | | 0.6 | % | | (0.9 | )% | | 0.2 | % |
| Other | (0.2 | )% | | 0.3 | % | | 0.6 | % | | (0.3 | )% | | (1.2 | )% |
| | (0.2 | )% | | 2.9 | % | | 7.2 | % | | (11.4 | )% | | (0.2 | )% |
| | | | | | | | | | |
(1) Net investment return represents the return on our net investments managed by Third Point LLC, net of fees. The net investment return on net investments managed by Third Point LLC is the percentage change in value of a dollar invested over the reporting period on our net investment assets managed by Third Point LLC. Effective August 31, 2018, we transitioned from our separately managed account structure to investing in TP Fund. In addition, collateral assets and certain other investment assets are managed by Third Point LLC. The net investment return reflects the combined results of investments managed on behalf of Third Point Re BDA and Third Point Re USA prior to the transition date of August 31, 2018 and the investments in TP Fund, collateral assets and certain other investment assets subsequent to the date of transition. Prior to the transition date of August 31, 2018, the stated return was net of noncontrolling interests and net of withholding taxes, which were presented as a component of income tax expense in our condensed consolidated statements of income. Net investment return is the key indicator by which we measure the performance of Third Point LLC, TP Fund’s investment manager.
Third Point Reinsurance Ltd.
General and Administrative Expenses - by Quarter
(expressed in thousands of U.S. dollars)
|
| | | | | | | | | | | | | | | | | | | |
| | September 30,
2019 | | June 30,
2019 | | March 31,
2019 | | December 31,
2018 | | September 30,
2018 |
| Payroll and related | $ | 4,626 |
| | $ | 9,983 |
| | $ | 5,352 |
| | $ | 3,105 |
| | $ | 2,555 |
|
| Share compensation expenses | 894 |
| | 3,954 |
| | 1,458 |
| | — |
| | 2,398 |
|
| Legal and accounting | 1,376 |
| | 1,933 |
| | 1,917 |
| | 983 |
| | 1,651 |
|
| Travel and entertainment | 119 |
| | 713 |
| | 527 |
| | 460 |
| | 554 |
|
| IT related | 635 |
| | 730 |
| | 659 |
| | 656 |
| | 470 |
|
| Occupancy | 285 |
| | 345 |
| | 427 |
| | 396 |
| | 325 |
|
| Corporate insurance | 190 |
| | 202 |
| | 175 |
| | 187 |
| | 170 |
|
| Board of director and related | 233 |
| | 245 |
| | 203 |
| | 232 |
| | 242 |
|
| Credit facility fees | 380 |
| | 1,084 |
| | 962 |
| | 1,143 |
| | 756 |
|
| Other general and administrative expenses | 499 |
| | 461 |
| | 452 |
| | 391 |
| | 390 |
|
| | $ | 9,237 |
| | $ | 19,650 |
| | $ | 12,132 |
| | $ | 7,553 |
| | $ | 9,511 |
|
| | | | | | | | | | |
| G&A related to underwriting activities | $ | 4,769 |
| | $ | 6,769 |
| | $ | 6,224 |
| | $ | 4,085 |
| | $ | 4,763 |
|
| Corporate expenses | 4,468 |
| | 12,881 |
| | 5,908 |
| | 3,468 |
| | 4,748 |
|
| | $ | 9,237 |
| | $ | 19,650 |
| | $ | 12,132 |
| | $ | 7,553 |
| | $ | 9,511 |
|
Third Point Reinsurance Ltd.
Basic and Diluted Book Value per Share - by Quarter
(expressed in thousands of U.S. dollars)
|
| | | | | | | | | | | | | | | | | | | |
| | September 30,
2019 | | June 30,
2019 | | March 31,
2019 | | December 31,
2018 | | September 30,
2018 |
| Basic and diluted book value per share numerator: | | | | | | | | | |
| Shareholders' equity attributable to Third Point Re common shareholders | $ | 1,383,580 |
| | $ | 1,395,898 |
| | $ | 1,338,879 |
| | $ | 1,204,574 |
| | $ | 1,507,910 |
|
| Basic and diluted book value per share denominator: | | | | | | | | | |
| Common shares outstanding | 94,220,567 |
| | 93,994,924 |
| | 94,292,914 |
| | 93,639,610 |
| | 94,169,725 |
|
| Unvested restricted shares | (2,240,410 | ) | | (2,214,087 | ) | | (2,524,109 | ) | | (2,025,113 | ) | | (2,041,475 | ) |
| Basic book value per share denominator: | 91,980,157 |
| | 91,780,837 |
| | 91,768,805 |
| | 91,614,497 |
| | 92,128,250 |
|
| Effect of dilutive warrants issued to founders and an advisor (1) | — |
| | 108,371 |
| | 127,947 |
| | — |
| | 806,534 |
|
| Effect of dilutive stock options issued to directors and employees (1) | — |
| | 152,379 |
| | 179,904 |
| | — |
| | 1,166,589 |
|
| Effect of dilutive restricted shares issued to directors and employees (2) | 1,731,384 |
| | 1,777,266 |
| | 1,848,791 |
| | 1,209,285 |
| | 1,462,358 |
|
| Diluted book value per share denominator: | 93,711,541 |
| | 93,818,853 |
| | 93,925,447 |
| | 92,823,782 |
| | 95,563,731 |
|
| | | | | | | | | | |
Basic book value per share (2) | $ | 15.04 |
| | $ | 15.21 |
| | $ | 14.59 |
| | $ | 13.15 |
| | $ | 16.37 |
|
Diluted book value per share (2) | $ | 14.76 |
| | $ | 14.88 |
| | $ | 14.25 |
| | $ | 12.98 |
| | $ | 15.78 |
|
| | | | | | | | | | |
| Increase (decrease) in diluted book value per share | (0.8 | )% | | 4.4 | % | | 9.8 | % | | (17.7 | )% | | (0.4 | )% |
| |
| (1) | As of September 30, 2019 and December 31, 2018, there was no dilution a result of the Company’s share price being under the lowest exercise price for warrants and options. |
| |
| (2) | In the third quarter of 2019, we changed the method used for calculating diluted book value per share (“DBVPS”) to the treasury stock method. Under the treasury stock method, we compute the number of new shares that can potentially be created by unexercised in-the-money warrants and options. We then assume that the proceeds received from the exercise of in-the-money warrant and/or option are used to repurchase outstanding common shares in the market. The number of additional shares that are added back to the basic book value per share denominator is equal to the difference between (i) the number of new shares potentially created by unexercised in-the-money warrants and options and (ii) the number of shares that could be repurchased in the market. The previous method used did not contemplate repurchasing shares in the market, which we believe overstated the impact of dilution. Basic book value per share and diluted book value per share are non-GAAP financial measures and there are no comparable GAAP measures. Basic book value per share, as presented, is a non-GAAP financial measure and is calculated by dividing shareholders’ equity attributable to Third Point Re common shareholders by the number of common shares outstanding, excluding the total number of unvested restricted shares, at period end. Diluted book value per share, as presented, is a non-GAAP financial measure and is calculated using the treasury stock method. Under the treasury stock method, we assume that proceeds received from in-the-money options and/or warrants exercised are used to repurchase common shares in the market. For unvested restricted shares with a performance condition, we include the unvested restricted shares for which we consider vesting to be probable. Change in basic book value per share is calculated by taking the difference in basic book value per share for the periods presented divided by the beginning of period book value per share. Change in diluted book value per share is calculated by taking the difference in diluted book value per share for the periods presented divided by the beginning of period 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)
|
| | | | | | | | | | | | | | | | | | | | |
| | | September 30,
2019 | | June 30,
2019 | | March 31,
2019 | | December 31,
2018 | | September 30,
2018 |
| Weighted-average number of common shares outstanding: | | | | | | | | | | |
| Basic number of common shares outstanding | | 91,903,556 |
| | 91,776,870 |
| | 91,669,810 |
| | 91,967,831 |
| | 95,671,385 |
|
| Dilutive effect of options | | — |
| | 321,492 |
| | 291,248 |
| | — |
| | — |
|
| Dilutive effect of warrants | | — |
| | 228,643 |
| | 207,134 |
| | — |
| | — |
|
| Dilutive effect of restricted shares with service and performance condition | | — |
| | 474,794 |
| | 410,741 |
| | — |
| | — |
|
| Diluted number of common shares outstanding | | 91,903,556 |
| | 92,801,799 |
| | 92,578,933 |
| | 91,967,831 |
| | 95,671,385 |
|
| | | | | | | | | | | |
| Basic earnings (loss) per common share: | | | | | | | | | | |
| Net income (loss) available to Third Point Re common shareholders | | $ | (15,099 | ) | | $ | 53,065 |
| | $ | 132,915 |
| | $ | (298,012 | ) | | $ | (13,281 | ) |
| Net income allocated to Third Point Re participating common shareholders | | — |
| | (85 | ) | | (173 | ) | | — |
| | — |
|
| Net income (loss) allocated to Third Point Re common shareholders | | $ | (15,099 | ) | | $ | 52,980 |
| | $ | 132,742 |
| | $ | (298,012 | ) | | $ | (13,281 | ) |
| | | | | | | | | | | |
Basic earnings (loss) per share available to Third Point Re common shareholders (1) | | $ | (0.16 | ) | | $ | 0.58 |
| | $ | 1.45 |
| | $ | (3.24 | ) | | $ | (0.14 | ) |
| | | | | | | | | | | |
| Diluted earnings (loss) per common share: | | | | | | | | | | |
| Net income (loss) available to Third Point Re common shareholders | | $ | (15,099 | ) | | $ | 53,065 |
| | $ | 132,915 |
| | $ | (298,012 | ) | | $ | (13,281 | ) |
| Net income allocated to Third Point Re participating common shareholders | | — |
| | (84 | ) | | (171 | ) | | — |
| | — |
|
| Net income (loss) allocated to Third Point Re common shareholders | | $ | (15,099 | ) | | $ | 52,981 |
| | $ | 132,744 |
| | $ | (298,012 | ) | | $ | (13,281 | ) |
| | | | | | | | | | | |
Diluted earnings (loss) per share available to Third Point Re common shareholders (1) | | $ | (0.16 | ) | | $ | 0.57 |
| | $ | 1.43 |
| | $ | (3.24 | ) | | $ | (0.14 | ) |
| |
| (1) | 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 unvested restricted shares. Diluted earnings per share is based on the weighted average number of common shares and participating securities outstanding and includes any dilutive effects of warrants, options and unvested restricted shares under share plans and are determined 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 treated in the same manner as outstanding shares for earnings per share calculations. The Company treats certain of its unvested restricted shares as participating securities. In the event of a net loss, all participating securities, outstanding warrants, options and restricted shares are excluded from both basic and diluted loss per share since their inclusion would be anti-dilutive. |
Third Point Reinsurance Ltd.
Return on Beginning Shareholders’ Equity - by Quarter
(expressed in thousands of U.S. dollars)
|
| | | | | | | | | | | | | | | | | | | | |
| | | September 30,
2019 | | June 30,
2019 | | March 31,
2019 | | December 31,
2018 | | September 30,
2018 |
| Net income (loss) available to Third Point Re common shareholders | | $ | (15,099 | ) | | $ | 53,065 |
| | $ | 132,915 |
| | $ | (298,012 | ) | | $ | (13,281 | ) |
| Shareholders’ equity attributable to Third Point Re common shareholders - beginning of period | | 1,395,898 |
| | 1,338,879 |
| | 1,204,574 |
| | 1,507,910 |
| | 1,591,754 |
|
| Impact of weighting related to shareholders’ equity from shares repurchased | | — |
| | — |
| | — |
| | (1,750 | ) | | (24,447 | ) |
| Adjusted shareholders’ equity attributable to Third Point Re common shareholders - beginning of period | | $ | 1,395,898 |
| | $ | 1,338,879 |
| | $ | 1,204,574 |
| | $ | 1,506,160 |
| | $ | 1,567,307 |
|
Return on beginning shareholders’ equity attributable to Third Point Re common shareholders (1) | | (1.1 | )% | | 4.0 | % | | 11.0 | % | | (19.8 | )% | | (0.8 | )% |
| |
| (1) | Return on beginning shareholders’ equity attributable to Third Point Re common shareholders, as presented, is a non-GAAP financial measure. Return on beginning shareholders’ equity attributable to Third Point Re common shareholders is calculated by dividing net income (loss) available to Third Point Re common shareholders by the beginning shareholders’ equity attributable to Third Point Re common shareholders. We believe that return on beginning shareholders’ equity attributable to Third Point Re common shareholders is an important measure because it assists our management and investors in evaluating the Company’s profitability. We have also adjusted the beginning shareholders’ equity for the impact of the shares repurchased on a weighted average basis. For period where there is a loss, this adjustment decreased the stated returns on beginning shareholders’ equity and for period where there is a gain, this adjustment increased the stated returns on beginning shareholders’ equity. |
