PartnerRe Ltd. Reports Fourth Quarter and Record Full Year 2004 Results and Increase in Dividend
| • | Fourth Quarter Net Income per share of $2.54; Operating Earnings per share of $2.25 |
PEMBROKE, Bermuda, February 7, 2005 -- PartnerRe Ltd. (NYSE:PRE) today reported net income of $143.7 million, or $2.54 per share on a fully diluted basis, for the fourth quarter of 2004. This net income includes net after-tax realized gains on investments of $16.1 million or $0.29 per share. Net income for the fourth quarter of 2003, including net after-tax realized gains on investments of $9.3 million or $0.17 per share, was $104.5 million or $1.84 per share. Operating earnings for the fourth quarter of 2004 were $120.8 million or $2.25 per share on a fully diluted basis. Operating earnings exclude net after-tax realized investment gains and losses and are calculated after payment of preferred dividends. This compares to operating earnings of $90.3 million, or $1.67 per share, for the fourth quarter of 2003. All references to per share amounts are on a fully diluted basis.
For the year ended December 31, 2004, net income was $492.4 million or $8.71 per share. Net income for the period includes a net after-tax realized gain on investments of $78.1 million or $1.44 per share. Operating earnings were $392.8 million, or $7.27 per share. Net income for the full year 2003 was $467.7 million or $8.13 per share including net after-tax realized gains of $80.0 million, or $1.48 per share. Operating earnings for the same period in 2003 were $358.3 million or $6.65 per share.
Commenting on the 2004 results, PartnerRe President & Chief Executive Officer Patrick Thiele said, “We had an excellent fourth quarter to close out 2004 with record results that are well ahead of our stated plan. Despite facing a challenging year in terms of the number of natural catastrophes and magnitude of losses associated with them, PartnerRe performed exceptionally well, achieving a full year operating return on equity of 17% and growing book value by 20% to year-end book value per share of $50.99. Our achievements in 2004 underscore the strength of the Company both financially and operationally.”
Summary unaudited consolidated financial data for the period is set out below.
| U.S.$ thousands (except per share amounts and ratios) | | Three months ended December 31 | | | | Twelve months ended December 31 | |
|
|
|
|
|
|
|
|
| | 2004 | | | | 2003 | | | | 2004 | | | | 2003 | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net Premiums Written | $ | 682,998 | | | $ | 772,509 | | | $ | 3,852,672 | | | $ | 3,589,641 | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net Premiums Earned | $ | 942,332 | | | $ | 946,148 | | | $ | 3,733,740 | | | $ | 3,503,442 | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Non-Life Combined Ratio | | 94.5 | % | | | 95.1 | % | | | 94.3 | % | | | 93.2 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net Income | $ | 143,669 | | | $ | 104,530 | | | $ | 492,353 | | | $ | 467,679 | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net Income per share (a) | $ | 2.54 | | | $ | 1.84 | | | $ | 8.71 | | | $ | 8.13 | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net Operating Earnings (a) | $ | 120,813 | | | $ | 90,286 | | | $ | 392,751 | | | $ | 358,319 | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net Operating Earnings per share (a) | $ | 2.25 | | | $ | 1.67 | | | $ | 7.27 | | | $ | 6.65 | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| | (a) | Net income per share is defined as net income available to common shareholders divided by the weighted average number of fully diluted shares outstanding for the period. Net income available to common shareholders is defined as net income less preferred dividends. Net operating earnings is net income available to common shareholders excluding after-tax net realized gains/losses on investments. Net operating earnings per share is defined as net operating earnings divided by the weighted average number of fully diluted shares outstanding for the period. Per share results are on a fully diluted basis. |
| |
Net premiums written for the fourth quarter 2004 were $683.0 million, a 12% decrease over the comparable period in 2003. Total revenues for the quarter were essentially flat with the fourth quarter of 2003 at $1.1 billion, including $942.3 million of net premiums earned; net investment income of $80.0 million – an increase of 9%; and net realized investment gains of $38.6 million.
For the year ended December 31, 2004, net premiums written were $3.9 billion, a 7% increase over the full year 2003. Total revenues for 2004 were $4.2 billion, including $3.7 billion of net premiums earned, net investment income of $298.0 million, and net realized investment gains of $117.3 million. Total revenues for 2003 were $3.9 billion.
At December 31, 2004, total assets were $12.5 billion, total capitalization was $3.8 billion, and total shareholders’ equity was $3.4 billion. This compares to total assets of $10.9 billion, total capitalization of $3.2 billion and total shareholders’ equity of $2.6 billion at December 31, 2003. Book value per common share at December 31, 2004 was $50.99 on a fully diluted basis, compared to $42.48 per share at December 31, 2003.
The Company is continuing its share repurchase program which was initiated during the second quarter of 2004. During 2004, the Company repurchased 2.9 million common shares, including 2 million common shares which were part of an accelerated share repurchase agreement executed on December 30, 2004. This partially offset the issuance of 3,478,400 common shares on December 31, 2004, following settlement of the stock purchase contracts associated with the 8% Premium Equity Participating Security (PEPS) Units, which were subsequently retired.
Separately, the Company announced today that its Board of Directors has increased the annual common share dividend by 12% to $1.52 per share from $1.36 per share. Today, the Board declared a regular quarterly dividend of $0.38 per common share, representing the increased level of dividend. The dividend will be payable on March 1, 2005, to common shareholders of record on February 18, 2005, with the stock trading ex-dividend commencing February 16, 2005.
Results of Operations“Our results this year clearly demonstrate the excellent level of portfolio diversification that we have achieved,” Mr. Thiele said. “While there were variations in results across operating units, overall we achieved excellent underwriting profitability with a Non-Life combined ratio of 94.3% .
“Our Worldwide Specialty operations posted an exceptional 71.2% technical ratio on $1.5 billion in net premiums earned for the year. These outstanding results helped to offset results in both our U.S. and Global Property & Casualty operations, which were impacted by reserve strengthening and the significant natural catastrophes of the third and fourth quarters. We continued to grow both our ART and Life segments, and they are increasingly important components of our overall diversification strategy.
“Our investment operations also added significant value during the year,” said Mr. Thiele. “Investment income increased 14% partially driven by our excellent cash flow of $1.3 billion, and we generated over $117 million in realized capital gains.”
Results by SegmentThe Non-Life segment reported net premiums written of $561.8 million for the quarter, down 17% as compared to the same period in 2003. Timing differences in the recording of written premiums affect quarterly year-over-year comparisons, and therefore, the full year written
premium growth rate is the more relevant measure. For the full year, Non-Life net premiums written were $3.4 billion, representing an increase of 5%. The combined ratio was 94.5% for the fourth quarter compared to 95.1% for the same period in 2003. The Non-Life technical result was $93.5 million in the fourth quarter of 2004 compared to $87.7 million for the prior year period. The results for this quarter include $26 million in estimated claims from the Indian Ocean tsunami, as well as $8 million of net reductions to prior year reserves. The full year technical result was $384.1 million, compared to $391.4 million for the same period in 2003. The combined ratio for the year was 94.3% compared to 93.2% in 2003.
The U.S. Property and Casualty business, which represented approximately 26% of total net premiums written for the year, reported net premiums written of $179.9 million, down 1% from the prior year’s fourth quarter. Net premiums earned decreased 5% during the quarter when compared to the same period in 2003. The technical ratio for this sub-segment was 97.9% compared to 112.8% in the fourth quarter of 2003. For the full year of 2004, net premiums written increased 8% to $990.3 million. The full year technical ratio was 101.0% compared to 101.9% in 2003.
The Global (Non-U.S.) Property and Casualty business, which represented approximately 24% of total net premiums written for the year, reported net premiums written of $123.8 million for the fourth quarter of 2004, compared to $193.9 million for the same period in 2003. Timing differences in the recording of premiums affect the quarterly comparison. For the full-year 2004, net premiums written increased 11% to $944.8 million. Net premiums earned during the quarter were $231.5 million, up 1% from $229.6 million in the fourth quarter 2003. The technical ratio for this sub-segment was 113.3% for the fourth quarter compared to 98.2% for the same period in 2003, primarily reflecting $23 million in net additions to prior year reserves, as increases in motor excess of loss reserves were partially offset by reductions in reserves for property business. The full year technical ratio was 104.2%, compared to 99.3% in 2003.
The Worldwide Specialty business, which represented approximately 39% of total net premiums written for the year, reported net premiums written of $258.1 million for the fourth quarter, down 14% from the fourth quarter of 2003. Net premiums earned were down 6% for the quarter, compared to the same period in 2003. This sub-segment’s technical ratio was 68.1%, compared to 72.3% for the fourth quarter of 2003, reflecting the low level of catastrophe activity during the quarter, as well as net reserve reductions for prior years of approximately $33 million. For the full year, net premiums written were essentially flat with 2003 at $1.5 billion. The full year technical ratio was 71.2%, compared to 73.5% in 2003.
The Life segment, which markets coverages primarily in Europe, Canada and Latin America, and represented approximately 11% of total net premiums written for the year, reported net premiums written of $120.3 million for the quarter, realizing 31% growth over the fourth quarter of 2003. The allocated underwriting result was a loss of $1 million, compared to a gain of $3 million for the fourth quarter 2003, reflecting approximately $5 million in estimated claims from the Indian Ocean tsunami. For the full year, net premiums written increased 35% to $404.0 million, with an allocated underwriting loss of $4 million, compared to a gain of $6 million in 2003.
The ART (Alternative Risk Transfer) segment comprises finite reinsurance, structured finance, weather related products, and the results of the Company’s investment in Channel Re. Premiums are not a representative measure of activity in ART, as reinsurance accounting does not apply for much of the business in this segment. The ART segment recognizes reinsurance revenues, gross margins, net spreads, or changes in the value of derivative instruments on its various transactions either on the “premium written”, “premium earned”, “investment income”, or “other income” lines of the income statement, in accordance with the applicable accounting guidance. The underwriting result for this segment was a gain of $1 million for the fourth quarter of 2004, compared to a gain of $10 million in the fourth quarter of 2003. For the full year, the ART segment posted a gain of $3 million, compared to a gain of $11 million for 2003. Fourth quarter and full year 2004 results were adversely impacted by weather and catastrophe-related losses.
Commentary and Outlook“Following an exceptional year in 2004, the January 2005 renewal season was mixed for PartnerRe in terms of pricing and potential future profitability,” Mr. Thiele said. “While the U.S. was rationally competitive with pricing in most lines at reasonable profitability levels, European and international markets were somewhat more competitive than expected. Our financial strength and franchise allowed us to gain a fair amount of new business. However, many customers increased their retentions and we also reduced our participation in those instances where competitive pressures pushed prices and terms and conditions below our standards. As a result, we underwrote a diversified portfolio priced to achieve profitability above our long-term objective, but we expect total consolidated net written premiums to be flat to down 5% in 2005, barring unusual market conditions.”
The Company uses operating earnings, diluted operating earnings per share and operating return on beginning common shareholders’ equity to measure performance, as these measures focus on the underlying fundamentals of our operations without the influence of
realized gains and losses from the sale of investments, which is driven by the timing of the disposition of investments and not by our operating performance. For planning purposes, the Company does not anticipate realized investment gains or losses. The Company also uses technical ratio and technical result as measures of underwriting performance. These metrics exclude overhead expenses. All references to per share amounts in this press release are on the basis of fully diluted shares. Certain reclassifications have been made to prior year consolidated financial statement amounts to conform to the current year presentation and the new segment presentation.
PartnerRe Ltd. is a leading global reinsurer, providing multi-line reinsurance to insurance companies. Risks reinsured include property, casualty, motor, agriculture, aviation/space, catastrophe, credit/surety, engineering/energy, marine, special risks, other lines, life/annuity and health, and alternative risk transfer solutions. At December 31, 2004, total revenues were $4.2 billion, total assets were $12.5 billion, total capitalization was $3.8 billion and total shareholders’ equity was $3.4 billion. Our major reinsurance operations have ratings of AA- from Standard & Poor’s, Aa3 from Moody’s, A+ from A.M. Best, and AA from Fitch.
PartnerRe on the Internet:www.partnerre.com
Forward-looking statements contained in this press release are based on the Company’s assumptions and expectations concerning future events and financial performance and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements are subject to significant business, economic and competitive risks and uncertainties that could cause actual results to differ materially from those reflected in the forward-looking statements. PartnerRe’s forward-looking statements could be affected by numerous foreseeable and unforeseeable events and developments such as exposure to catastrophe, or other large property and casualty losses, adequacy of reserves, risks associated with implementing business strategies, levels and pricing of new and renewal business achieved, credit, interest, currency and other risks associated with the Company’s investment portfolio, changes in accounting policies, and other factors identified in the Company’s filings with the Securities and Exchange Commission. In light of the significant uncertainties inherent in the forward-looking information contained herein, readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the dates on which they are made. The Company disclaims any obligation to publicly update or revise any forward-looking information or statements.
| Contacts: | | PartnerRe Ltd. | | Citigate Sard Verbinnen |
| | (441) 292-0888 | | (212) 687-8080 |
| | Investor Contact: Robin Sidders | | Jim Barron/Hallie Bozzi |
| | Media Contact: Celia Powell | | |
PartnerRe Ltd.
Consolidated Statements of Operations and Comprehensive Income
(Expressed in thousands of U.S dollars, except per share data)
(Unaudited)
| | | For the three
months ended
December 31,
2004 | | | For the three
months ended
December 31,
2003 | | | For the
year ended
December 31,
2004 | | | For the
year ended
December 31,
2003 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| Revenues | | | | | | | | | | | | |
| Gross premiums written | $ | 686,551 | | $ | 775,321 | | $ | 3,887,516 | | $ | 3,624,518 | |
| |
|
| |
|
| |
|
| |
|
|
| | | | | | | | | | | | | |
| Net premiums written | $ | 682,998 | | $ | 772,509 | | $ | 3,852,672 | | $ | 3,589,641 | |
| Decrease (increase) in unearned premiums | | 259,334 | | | 173,639 | | | (118,932 | ) | | (86,199 | ) |
| |
|
| |
|
| |
|
| |
|
|
| Net premiums earned | | 942,332 | | | 946,148 | | | 3,733,740 | | | 3,503,442 | |
| Net investment income | | 79,961 | | | 73,156 | | | 297,997 | | | 261,697 | |
| Net realized investment gains | | 38,646 | | | 18,984 | | | 117,339 | | | 86,656 | |
| Other income | | 6,889 | | | 12,055 | | | 23,623 | | | 21,101 | |
| |
|
| |
|
| |
|
| |
|
|
| Total Revenues | | 1,067,828 | | | 1,050,343 | | | 4,172,699 | | | 3,872,896 | |
| |
|
| |
|
| |
|
| |
|
|
| | | | | | | | | | | | | |
| Expenses | | | | | | | | | | | | |
| Losses and loss expenses including life policy benefits | | 625,268 | | | 661,597 | | | 2,475,743 | | | 2,365,742 | |
| Acquisition costs | | 227,798 | | | 203,875 | | | 901,554 | | | 773,230 | |
| Other operating expenses | | 67,791 | | | 63,772 | | | 271,331 | | | 235,739 | |
| Interest expense | | 10,204 | | | 6,031 | | | 40,744 | | | 18,570 | |
| Net foreign exchange gains | | (14,680 | ) | | (2,744 | ) | | (16,586 | ) | | (11,824 | ) |
| |
|
| |
|
| |
|
| |
|
|
| Total Expenses | | 916,381 | | | 932,531 | | | 3,672,786 | | | 3,381,457 | |
| |
|
| |
|
| |
|
| |
|
|
| | | | | | | | | | | | | |
| Income before distributions related to trust preferred | | | | | | | | | | | | |
| and mandatorily redeemable preferred securities and taxes | | 151,447 | | | 117,812 | | | 499,913 | | | 491,439 | |
| Distributions related to trust preferred and mandatorily | | | | | | | | | | | | |
| redeemable preferred securities | | - | | | 4,010 | | | - | | | 21,650 | |
| Income tax expense | | 7,778 | | | 9,272 | | | 7,560 | | | 2,110 | |
| |
|
| |
|
| |
|
| |
|
|
| Net income | $ | 143,669 | | $ | 104,530 | | $ | 492,353 | | $ | 467,679 | |
| |
|
| |
|
| |
|
| |
|
|
| | | | | | | | | | | | | |
| Preferred dividends | $ | 6,804 | | $ | 4,970 | | $ | 21,485 | | $ | 29,390 | |
| |
|
| |
|
| |
|
| |
|
|
| | | | | | | | | | | | | |
| Operating earnings available to common shareholders | $ | 120,813 | | $ | 90,286 | | $ | 392,751 | | $ | 358,319 | |
| |
|
| |
|
| |
|
| |
|
|
| | | | | | | | | | | | | |
| Comprehensive income | $ | 245,827 | | $ | 135,414 | | $ | 576,289 | | $ | 562,043 | |
| |
|
| |
|
| |
|
| |
|
|
| | | | | | | | | | | | | |
| Per Share Data: | | | | | | | | | | | | |
| Earnings per common share: | | | | | | | | | | | | |
| Basic operating earnings | $ | 2.27 | | $ | 1.68 | | $ | 7.34 | | $ | 6.73 | |
| Net realized investment gains, net of tax | | 0.31 | | | 0.17 | | | 1.46 | | | 1.50 | |
| |
|
| |
|
| |
|
| |
|
|
| Basic net income | $ | 2.58 | | $ | 1.85 | | $ | 8.80 | | $ | 8.23 | |
| |
|
| |
|
| |
|
| |
|
|
| Weighted average number of common shares | | | | | | | | | | | | |
| outstanding | | 53,130.0 | | | 53,674.9 | | | 53,490.8 | | | 53,238.6 | |
| | | | | | | | | | | | | |
| Diluted operating earnings | $ | 2.25 | | $ | 1.67 | | $ | 7.27 | | $ | 6.65 | |
| Net realized investment gains, net of tax | | 0.29 | | | 0.17 | | | 1.44 | | | 1.48 | |
| |
|
| |
|
| |
|
| |
|
|
| Diluted net income | $ | 2.54 | | $ | 1.84 | | $ | 8.71 | | $ | 8.13 | |
| |
|
| |
|
| |
|
| |
|
|
| Weighted average number of common and | | | | | | | | | | | | |
| common equivalent shares outstanding | | 53,809.0 | | | 54,176.1 | | | 54,047.4 | | | 53,895.9 | |
7
PartnerRe Ltd.
Consolidated Balance Sheets
(Expressed in thousands of U.S. dollars, except per share data and parenthetical share data)
(Unaudited)
| | | December 31,
2004 | | | December 31,
2003 | |
| | | | | | | |
| | | | | | | |
| Assets | | | | | | |
| Investments and cash | | | | | | |
| Fixed maturities, at fair value | | | | | | |
| (amortized cost: 2004, $6,611,683; 2003, $5,241,494) | $ | 6,723,580 | | $ | 5,343,651 | |
| Short-term investments, at fair value | | | | | | |
| (amortized cost: 2004, $28,691; 2003, $46,271) | | 28,694 | | | 46,307 | |
| Equities, at fair value | | | | | | |
| (cost: 2004, $887,006; 2003, $614,697) | | 1,010,777 | | | 713,950 | |
| Trading securities, at fair value (cost: 2004, $102,371; 2003, $113,385) | | 108,402 | | | 122,544 | |
| Cash and cash equivalents, at fair value, which approximates amortized cost | | 436,003 | | | 558,692 | |
| Other invested assets | | 90,268 | | | 11,776 | |
| |
|
| |
|
|
| Total investments and cash | | 8,397,724 | | | 6,796,920 | |
| Accrued investment income | | 151,871 | | | 132,291 | |
| Reinsurance balances receivable | | 1,356,771 | | | 1,214,269 | |
| Reinsurance recoverable on paid and unpaid losses | | 180,710 | | | 188,706 | |
| Funds held by reinsured companies | | 1,100,107 | | | 1,068,432 | |
| Deferred acquisition costs | | 409,332 | | | 354,854 | |
| Deposit assets | | 299,408 | | | 508,037 | |
| Taxes recoverable | | 81,235 | | | 80,835 | |
| Goodwill | | 429,519 | | | 429,519 | |
| Other | | 104,564 | | | 129,337 | |
| |
|
| |
|
|
| Total Assets | $ | 12,511,241 | | $ | 10,903,200 | |
| |
|
| |
|
|
| | | | | | | |
| Liabilities | | | | | | |
| Unpaid losses and loss expenses | $ | 5,766,629 | | $ | 4,755,059 | |
| Policy benefits for life and annuity contracts | | 1,277,101 | | | 1,162,016 | |
| Unearned premiums | | 1,194,778 | | | 1,035,450 | |
| Funds held under reinsurance treaties | | 21,875 | | | 27,399 | |
| Deposit liabilities | | 344,202 | | | 570,634 | |
| Long-term debt | | 220,000 | | | 220,000 | |
| Accounts payable, accrued expenses and other | | 128,606 | | | 132,064 | |
| Debt related to trust preferred securities | | 206,186 | | | 206,186 | |
| Mandatorily redeemable preferred securities | | - | | | 200,000 | |
| |
|
| |
|
|
| Total Liabilities | | 9,159,377 | | | 8,308,808 | |
| |
|
| |
|
|
| | | | | | | |
| Shareholders’ Equity | | | | | | |
| Common shares (par value $1.00, issued and outstanding: | | | | | | |
| 2004, 54,854,398; 2003, 53,741,553) | | 54,854 | | | 53,742 | |
| Series C cumulative preferred shares (par value $1.00, issued and outstanding: | | | | | | |
| 2004 and 2003, 11,600,000; aggregate liquidation preference: 2004 and 2003, $290,000,000) | | 11,600 | | | 11,600 | |
| Series D cumulative preferred shares (par value $1.00, issued and outstanding: 2004, 9,200,000; | | | | | | |
| 2003, nil; aggregate liquidation preference: 2004, $230,000,000; 2003, nil) | | 9,200 | | | - | |
| Additional paid-in capital | | 1,288,292 | | | 1,023,167 | |
| Deferred compensation | | (199 | ) | | (125 | ) |
| Accumulated other comprehensive income: | | | | | | |
| Net unrealized gains on investments, net of tax | | 194,575 | | | 166,492 | |
| Currency translation adjustment | | 72,510 | | | 16,657 | |
| Retained earnings | | 1,721,032 | | | 1,322,859 | |
| |
|
| |
|
|
| Total Shareholders' Equity | | 3,351,864 | | | 2,594,392 | |
| |
|
| |
|
|
| | | | | | | |
| Total Liabilities and Shareholders' Equity | $ | 12,511,241 | | $ | 10,903,200 | |
| |
|
| |
|
|
| | | | | | | |
| Shareholders’ Equity Per Common Share | $ | 51.63 | | $ | 42.88 | |
| |
|
| |
|
|
| | | | | | | |
| Diluted Book Value Per Common and Common Equivalent | | | | | | |
| Share (assuming exercise of stock options and warrants) | $ | 50.99 | | $ | 42.48 | |
| |
|
| |
|
|
| | | | | | | |
| Number of Diluted Common Shares Outstanding | | 55,533.4 | | | 54,242.8 | |
| |
|
| |
|
|
8
PartnerRe Ltd.
Supplementary Information
(in millions of U.S. dollars)
(Unaudited)
SEGMENT INFORMATION
For the three months ended December 31, 2004
| | | U.S. P&C | | | Global (Non-
U.S. P&C) | | | Worldwide
Specialty | | | Total Non-Life
Segment | | | ART
Segment (A) | | | Life Segment | | | Corporate | | | Total | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Gross premiums written | $ | 180 | | $ | 124 | | $ | 258 | | $ | 562 | | $ | 1 | | $ | 124 | | $ | - | | $ | 687 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Net premiums written | $ | 180 | | $ | 124 | | $ | 258 | | $ | 562 | | $ | 1 | | $ | 120 | | $ | - | | $ | 683 | |
| Decrease in unearned premiums | | 28 | | | 107 | | | 119 | | | 254 | | | - | | | 5 | | | - | | | 259 | |
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
| Net premiums earned | $ | 208 | | $ | 231 | | $ | 377 | | $ | 816 | | $ | 1 | | $ | 125 | | $ | - | | $ | 942 | |
| Losses and loss expenses including | | | | | | | | | | | | | | | | | | | | | | | | |
| life policy benefits | | (150 | ) | | (203 | ) | | (172 | ) | | (525 | ) | | 1 | | | (101 | ) | | - | | | (625 | ) |
| Acquisition costs | | (54 | ) | | (60 | ) | | (84 | ) | | (198 | ) | | - | | | (30 | ) | | - | | | (228 | ) |
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
| Technical Result | $ | 4 | | $ | (32 | ) | $ | 121 | | $ | 93 | | $ | 2 | | $ | (6 | ) | $ | - | | $ | 89 | |
| Other income | | n/a | | | n/a | | | n/a | | | 6 | | | 1 | | | - | | | - | | | 7 | |
| Other operating expenses | | n/a | | | n/a | | | n/a | | | (48 | ) | | (2 | ) | | (6 | ) | | (12 | ) | | (68 | ) |
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
| Underwriting Result | | n/a | | | n/a | | | n/a | | $ | 51 | | $ | 1 | | $ | (12 | ) | | n/a | | $ | 28 | |
| Net investment income | | n/a | | | n/a | | | n/a | | | n/a | | | - | | | 11 | | | 69 | | | 80 | |
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
| Allocated Underwriting Result(6) | | n/a | | | n/a | | | n/a | | | n/a | | | n/a | | $ | (1 | ) | | n/a | | | n/a | |
| Net realized investment gains | | n/a | | | n/a | | | n/a | | | n/a | | | n/a | | | n/a | | | 39 | | | 39 | |
| Interest expense | | n/a | | | n/a | | | n/a | | | n/a | | | n/a | | | n/a | | | (10 | ) | | (10 | ) |
| Net foreign exchange gains | | n/a | | | n/a | | | n/a | | | n/a | | | n/a | | | n/a | | | 15 | | | 15 | |
| Income tax expense | | n/a | | | n/a | | | n/a | | | n/a | | | n/a | | | n/a | | | (8 | ) | | (8 | ) |
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
| Net income | | n/a | | | n/a | | | n/a | | | n/a | | | n/a | | | n/a | | | n/a | | $ | 144 | |
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Loss ratio (1) | | 72.3 | | % | 87.5 | | % | 45.7 | | % | 64.3 | | % | | | | | | | | | | | |
| Acquisition ratio (2) | | 25.6 | | | 25.8 | | | 22.4 | | | 24.2 | | | | | | | | | | | | | |
| |
|
| |
|
| |
|
| |
|
| | | | | | | | | | | | |
| Technical ratio (3) | | 97.9 | | % | 113.3 | | % | 68.1 | | % | 88.5 | | % | | | | | | | | | | | |
| Other overhead expense ratio (4) | | | | | | | | | | | 6.0 | | | | | | | | | | | | | |
| | | | | | | | | | |
|
| | | | | | | | | | | | |
| Combined ratio (5) | | | | | | | | | | | 94.5 | | % | | | | | | | | | | | |
| | | | | | | | | | |
|
| | | | | | | | | | | | |
| (A) | This segment includes the Company's share of Channel Re's net income in the amount of $2.5 million. The 2003 period includes no income from Channel Re as the Company acquired its equity ownership in the first quarter of 2004. |
For the three months ended December 31, 2003
| | | U.S. P&C | | | Global (Non-
U.S. P&C) | | | Worldwide
Specialty | | | Total Non-Life
Segment | | | ART
Segment (A) | | | Life Segment | | | Corporate | | | Total | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Gross premiums written | $ | 181 | | $ | 193 | | $ | 303 | | $ | 677 | | $ | 5 | | $ | 93 | | $ | - | | $ | 775 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Net premiums written | $ | 182 | | $ | 194 | | $ | 301 | | $ | 677 | | $ | 4 | | $ | 92 | | $ | - | | $ | 773 | |
| Decrease (increase) in unearned premiums | | 37 | | | 36 | | | 101 | | | 174 | | | (1 | ) | | - | | | - | | | 173 | |
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
| Net premiums earned | $ | 219 | | $ | 230 | | $ | 402 | | $ | 851 | | $ | 3 | | $ | 92 | | $ | - | | $ | 946 | |
| Losses and loss expenses including | | | | | | | | | | | | | | | | | | | | | | | | |
| life policy benefits | | (193 | ) | | (176 | ) | | (214 | ) | | (583 | ) | | (2 | ) | | (76 | ) | | - | | | (661 | ) |
| Acquisition costs | | (54 | ) | | (50 | ) | | (76 | ) | | (180 | ) | | - | | | (24 | ) | | - | | | (204 | ) |
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
| Technical Result | $ | (28 | ) | $ | 4 | | $ | 112 | | $ | 88 | | $ | 1 | | $ | (8 | ) | $ | - | | $ | 81 | |
| Other income | | n/a | | | n/a | | | n/a | | | - | | | 12 | | | - | | | - | | | 12 | |
| Other operating expenses | | n/a | | | n/a | | | n/a | | | (47 | ) | | (3 | ) | | (6 | ) | | (8 | ) | | (64 | ) |
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
| Underwriting Result | | n/a | | | n/a | | | n/a | | $ | 41 | | $ | 10 | | $ | (14 | ) | | n/a | | $ | 29 | |
| Net investment income | | n/a | | | n/a | | | n/a | | | n/a | | | - | | | 17 | | | 56 | | | 73 | |
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
| Allocated Underwriting Result(6) | | n/a | | | n/a | | | n/a | | | n/a | | | n/a | | $ | 3 | | | n/a | | | n/a | |
| Net realized investment gains | | n/a | | | n/a | | | n/a | | | n/a | | | n/a | | | n/a | | | 19 | | | 19 | |
| Interest expense | | n/a | | | n/a | | | n/a | | | n/a | | | n/a | | | n/a | | | (6 | ) | | (6 | ) |
| Net foreign exchange gains | | n/a | | | n/a | | | n/a | | | n/a | | | n/a | | | n/a | | | 3 | | | 3 | |
| Income tax expense | | n/a | | | n/a | | | n/a | | | n/a | | | n/a | | | n/a | | | (9 | ) | | (9 | ) |
| Distributions related to trust preferred and | | | | | | | | | | | | | | | | | | | | | | | | |
| mandatorily redeemable preferred securities | | n/a | | | n/a | | | n/a | | | n/a | | | n/a | | | n/a | | | (4 | ) | | (4 | ) |
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
| Net income | | n/a | | | n/a | | | n/a | | | n/a | | | n/a | | | n/a | | | n/a | | $ | 105 | |
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Loss ratio (1) | | 88.1 | | % | 76.7 | | % | 53.4 | | % | 68.5 | | % | | | | | | | | | | | |
| Acquisition ratio (2) | | 24.7 | | | 21.5 | | | 18.9 | | | 21.1 | | | | | | | | | | | | | |
| |
|
| |
|
| |
|
| |
|
| | | | | | | | | | | | |
| Technical ratio (3) | | 112.8 | | % | 98.2 | | % | 72.3 | | % | 89.6 | | % | | | | | | | | | | | |
| Other overhead expense ratio (4) | | | | | | | | | | | 5.5 | | | | | | | | | | | | | |
| | | | | | | | | | |
|
| | | | | | | | | | | | |
| Combined ratio (5) | | | | | | | | | | | 95.1 | | % | | | | | | | | | | | |
| | | | | | | | | | |
|
| | | | | | | | | | | | |
| (1) | Loss ratio is obtained by dividing losses and loss expenses by net premiums earned. |
| (2) | Acquisition ratio is obtained by dividing acquisition costs by net premiums earned. |
| (3) | Technical ratio is defined as the sum of the loss ratio and the acquisition ratio. |
| (4) | Other overhead expense ratio is obtained by dividing other operating expenses by net premiums earned. |
| (5) | Combined ratio is the sum of the technical ratio and the other overhead expense ratio. |
| (6) | Allocated Underwriting Result is defined as net premiums earned and allocated investment income less losses and loss expenses, acquisition costs and other overhead expenses. |
9
PartnerRe Ltd.
Supplementary Information
(in millions of U.S. dollars)
(Unaudited)
SEGMENT INFORMATION
For the year ended December 31, 2004
| | | U.S. P&C | | | Global (Non-
U.S. P&C) | | | Worldwide
Specialty | | | Total Non-Life
Segment | | | ART
Segment (A) | | | Life Segment | | | Corporate | | | Total | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Gross premiums written | $ | 991 | | $ | 944 | | $ | 1,531 | | $ | 3,466 | | $ | 5 | | $ | 417 | | $ | - | | $ | 3,888 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Net premiums written | $ | 990 | | $ | 945 | | $ | 1,509 | | $ | 3,444 | | $ | 5 | | $ | 404 | | $ | - | | $ | 3,853 | |
| (Increase) decrease in unearned premiums | | (97 | ) | | (16 | ) | | (9 | ) | | (122 | ) | | 1 | | | 2 | | | - | | | (119 | ) |
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
| Net premiums earned | $ | 893 | | $ | 929 | | $ | 1,500 | | $ | 3,322 | | $ | 6 | | $ | 406 | | $ | - | | $ | 3,734 | |
| Losses and loss expenses including | | | | | | | | | | | | | | | | | | | | | | | | |
| life policy benefits | | (699 | ) | | (730 | ) | | (744 | ) | | (2,173 | ) | | (7 | ) | | (296 | ) | | - | | | (2,476 | ) |
| Acquisition costs | | (204 | ) | | (238 | ) | | (323 | ) | | (765 | ) | | (1 | ) | | (136 | ) | | - | | | (902 | ) |
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
| Technical Result | $ | (10 | ) | $ | (39 | ) | $ | 433 | | $ | 384 | | $ | (2 | ) | $ | (26 | ) | $ | - | | $ | 356 | |
| Other income | | n/a | | | n/a | | | n/a | | | 6 | | | 18 | | | - | | | - | | | 24 | |
| Other operating expenses | | n/a | | | n/a | | | n/a | | | (194 | ) | | (13 | ) | | (22 | ) | | (42 | ) | | (271 | ) |
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
| Underwriting Result | | n/a | | | n/a | | | n/a | | $ | 196 | | $ | 3 | | $ | (48 | ) | | n/a | | $ | 109 | |
| Net investment income | | n/a | | | n/a | | | n/a | | | n/a | | | - | | | 44 | | | 254 | | | 298 | |
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
| Allocated Underwriting Result(6) | | n/a | | | n/a | | | n/a | | | n/a | | | n/a | | $ | (4 | ) | | n/a | | | n/a | |
| Net realized investment gains | | n/a | | | n/a | | | n/a | | | n/a | | | n/a | | | n/a | | | 117 | | | 117 | |
| Interest expense | | n/a | | | n/a | | | n/a | | | n/a | | | n/a | | | n/a | | | (41 | ) | | (41 | ) |
| Net foreign exchange gains | | n/a | | | n/a | | | n/a | | | n/a | | | n/a | | | n/a | | | 17 | | | 17 | |
| Income tax expense | | n/a | | | n/a | | | n/a | | | n/a | | | n/a | | | n/a | | | (8 | ) | | (8 | ) |
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
| Net income | | n/a | | | n/a | | | n/a | | | n/a | | | n/a | | | n/a | | | n/a | | $ | 492 | |
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Loss ratio (1) | | 78.2 | | % | 78.6 | | % | 49.6 | | % | 65.4 | | % | | | | | | | | | | | |
| Acquisition ratio (2) | | 22.8 | | | 25.6 | | | 21.6 | | | 23.0 | | | | | | | | | | | | | |
| |
|
| |
|
| |
|
| |
|
| | | | | | | | | | | | |
| Technical ratio (3) | | 101.0 | | % | 104.2 | | % | 71.2 | | % | 88.4 | | % | | | | | | | | | | | |
| Other overhead expense ratio (4) | | | | | | | | | | | 5.9 | | | | | | | | | | | | | |
| | | | | | | | | | |
|
| | | | | | | | | | | | |
| Combined ratio (5) | | | | | | | | | | | 94.3 | | % | | | | | | | | | | | |
| | | | | | | | | | |
|
| | | | | | | | | | | | |
| (A) | This segment includes the Company's share of Channel Re's net income in the amount of $6.0 million. The 2003 period includes no income from Channel Re as the Company acquired its equity ownership in the first quarter of 2004. |
For the year ended December 31, 2003
| | | U.S. P&C | | | Global (Non-
U.S. P&C) | | | Worldwide
Specialty | | | Total Non-Life
Segment | | | ART
Segment (A) | | | Life Segment | | | Corporate | | | Total | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Gross premiums written | $ | 920 | | $ | 848 | | $ | 1,542 | | $ | 3,310 | | $ | 5 | | $ | 310 | | $ | - | | $ | 3,625 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Net premiums written | $ | 920 | | $ | 849 | | $ | 1,517 | | $ | 3,286 | | $ | 4 | | $ | 300 | | $ | - | | $ | 3,590 | |
| (Increase) decrease in unearned premiums | | (77 | ) | | (10 | ) | | 1 | | | (86 | ) | | (1 | ) | | - | | | - | | | (87 | ) |
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
| Net premiums earned | $ | 843 | | $ | 839 | | $ | 1,518 | | $ | 3,200 | | $ | 3 | | $ | 300 | | $ | - | | $ | 3,503 | |
| Losses and loss expenses including | | | | | | | | | | | | | | | | | | | | | | | | |
| life policy benefits | | (645 | ) | | (625 | ) | | (827 | ) | | (2,097 | ) | | (2 | ) | | (267 | ) | | - | | | (2,366 | ) |
| Acquisition costs | | (214 | ) | | (209 | ) | | (289 | ) | | (712 | ) | | - | | | (61 | ) | | - | | | (773 | ) |
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
| Technical Result | $ | (16 | ) | $ | 5 | | $ | 402 | | $ | 391 | | $ | 1 | | $ | (28 | ) | $ | - | | $ | 364 | |
| Other income | | n/a | | | n/a | | | n/a | | | - | | | 21 | | | - | | | - | | | 21 | |
| Other operating expenses | | n/a | | | n/a | | | n/a | | | (176 | ) | | (11 | ) | | (19 | ) | | (30 | ) | | (236 | ) |
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
| Underwriting Result | | n/a | | | n/a | | | n/a | | $ | 215 | | $ | 11 | | $ | (47 | ) | | n/a | | $ | 149 | |
| Net investment income | | n/a | | | n/a | | | n/a | | | n/a | | | - | | | 53 | | | 209 | | | 262 | |
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
| Allocated Underwriting Result(6) | | n/a | | | n/a | | | n/a | | | n/a | | | n/a | | $ | 6 | | | n/a | | | n/a | |
| Net realized investment gains | | n/a | | | n/a | | | n/a | | | n/a | | | n/a | | | n/a | | | 87 | | | 87 | |
| Interest expense | | n/a | | | n/a | | | n/a | | | n/a | | | n/a | | | n/a | | | (18 | ) | | (18 | ) |
| Net foreign exchange gains | | n/a | | | n/a | | | n/a | | | n/a | | | n/a | | | n/a | | | 12 | | | 12 | |
| Income tax expense | | n/a | | | n/a | | | n/a | | | n/a | | | n/a | | | n/a | | | (2 | ) | | (2 | ) |
| Distributions related to trust preferred and | | | | | | | | | | | | | | | | | | | | | | | | |
| mandatorily redeemable preferred securities | | n/a | | | n/a | | | n/a | | | n/a | | | n/a | | | n/a | | | (22 | ) | | (22 | ) |
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
| Net income | | n/a | | | n/a | | | n/a | | | n/a | | | n/a | | | n/a | | | n/a | | $ | 468 | |
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Loss ratio (1) | | 76.5 | | % | 74.5 | | % | 54.5 | | % | 65.5 | | % | | | | | | | | | | | |
| Acquisition ratio (2) | | 25.4 | | | 24.8 | | | 19.0 | | | 22.2 | | | | | | | | | | | | | |
| |
|
| |
|
| |
|
| |
|
| | | | | | | | | | | | |
| Technical ratio (3) | | 101.9 | | % | 99.3 | | % | 73.5 | | % | 87.7 | | % | | | | | | | | | | | |
| Other overhead expense ratio (4) | | | | | | | | | | | 5.5 | | | | | | | | | | | | | |
| | | | | | | | | | |
|
| | | | | | | | | | | | |
| Combined ratio (5) | | | | | | | | | | | 93.2 | | % | | | | | | | | | | | |
| | | | | | | | | | |
|
| | | | | | | | | | | | |
| (1) | Loss ratio is obtained by dividing losses and loss expenses by net premiums earned. |
| (2) | Acquisition ratio is obtained by dividing acquisition costs by net premiums earned. |
| (3) | Technical ratio is defined as the sum of the loss ratio and the acquisition ratio. |
| (4) | Other overhead expense ratio is obtained by dividing other operating expenses by net premiums earned. |
| (5) | Combined ratio is the sum of the technical ratio and the other overhead expense ratio. |
| (6) | Allocated Underwriting Result is defined as net premiums earned and allocated investment income less losses and loss expenses, acquisition costs and other overhead expenses. |
10
PartnerRe Ltd.
Supplementary Information
(Unaudited)
| | For the three
months ended
December 31,
2004 | For the three
months ended
December 31,
2003 | For the
year ended
December 31,
2004 | For the
year ended
December 31,
2003 |
| | | | | | | | | |
| Distribution of Net Premiums Written by | | | | | | | | |
| Line of Business: | | | | | | | | |
| | Non-Life | | | | | | | | |
| | Property and Casualty | | | | | | | | |
| | Property | 18 | % | 22 | % | 19 | % | 21 | % |
| | Casualty | 19 | | 17 | | 21 | | 19 | |
| | Motor | 7 | | 10 | | 10 | | 10 | |
| | Worldwide Specialty | | | | | | | | |
| | Agriculture | 5 | | 5 | | 4 | | 4 | |
| | Aviation/Space | 10 | | 11 | | 6 | | 8 | |
| | Catastrophe | 2 | | 2 | | 9 | | 10 | |
| | Credit/Surety | 8 | | 6 | | 6 | | 5 | |
| | Engineering/Energy | 6 | | 7 | | 6 | | 7 | |
| | Marine | 3 | | 2 | | 2 | | 3 | |
| | Special Risk | 4 | | 5 | | 6 | | 5 | |
| | ART | - | | 1 | | - | | - | |
| | Life | 18 | | 12 | | 11 | | 8 | |
| | | | | | | | | | |
| | | | | | | | | | |
| Geographic Distribution of Gross Premiums Written: | | | | | | | | |
| | Europe | 43 | % | 42 | % | 45 | % | 41 | % |
| | North America | 43 | | 45 | | 40 | | 44 | |
| | Asia, Australia and New Zealand | 8 | | 7 | | 9 | | 10 | |
| | Latin America and the Caribbean | 5 | | 5 | | 5 | | 4 | |
| | Africa | 1 | | 1 | | 1 | | 1 | |
| As at |
| December 31, |
| 2004 |
| | |
| Credit Ratings (Financial Strength Ratings): | |
| Standard & Poor's | AA- |
| Moodys | Aa3 |
| A.M. Best | A+ |
| Fitch | AA |
| | As at
December 31,
2004 | | As at
December 31,
2003 | |
| | (in thousands of U.S. dollars) | | (in thousands of U.S. dollars) | |
| Capital Structure: | | | | | | | | | | |
| Long-term debt | $ | 220,000 | | 6 | % | $ | 220,000 | | 7 | % |
| Trust Preferred Securities(1) | | 200,000 | | 5 | | | 200,000 | | 6 | |
| Series B Cumulative Redeemable Preferred Shares (PEPS) | | - | | - | | | 200,000 | | 6 | |
| 6.75% Series C Cumulative Preferred Shares, aggregate liquidation | | 290,000 | | 8 | | | 290,000 | | 9 | |
| 6.5% Series D Cumulative Preferred Shares, aggregate liquidation | | 230,000 | | 6 | | | - | | - | |
| Common Shareholders' Equity | | 2,831,864 | | 75 | | | 2,304,392 | | 72 | |
|
|
| |
| | |
| |
| |
| Total Capital | $ | 3,771,864 | | 100 | % | $ | 3,214,392 | | 100 | % |
| |
| |
| | |
| |
| |
(1)Neither the Trust that issued the securities nor PartnerRe Finance, which owns the Trust, meet the consolidation requirements of FIN 46(R). Accordingly, the Company shows the related intercompany debt of $206.2 million on its Consolidated Balance Sheets.
11
PartnerRe Ltd.
Supplementary Information
(Unaudited)
| | | As at
December 31,
2004 | As at
December 31,
2003 |
| Investment Portfolio: | | | | |
| Credit Quality | AAA | 62 | % | 57 | % |
| AA | 2 | | 3 | |
| A | 18 | | 19 | |
| BBB | 12 | | 14 | |
| Below Investment Grade/Unrated | 6 | | 7 | |
| | | | | | |
| | | | | | |
| By Class | U.S. Government | 5 | % | 7 | % |
| U.S. Mortgage/Asset Backed | 16 | | 17 | |
| U.S. Corporates | 23 | | 26 | |
| Foreign Fixed Income | 34 | | 31 | |
| Equities and Equity Substitutes | 16 | | 15 | |
| Cash (net of pending transactions) | 6 | | 4 | |
| | | | | | |
| Expected average duration | 3.4 | Yrs | 3.6 | Yrs |
| | | | | | |
| Average yield to maturity at market | 3.8 | % | 3.8 | % |
| (fixed income securities and cash) | | | | |
| | | | | |
| Average Credit Quality | AA | | AA | |
| | | For the three
months ended
December 31,
2004 | | | For the three
months ended
December 31,
2003 | | | For the
year ended
December 31,
2004 | | | For the
year ended
December 31,
2003 | |
| | (in thousands of U.S. dollars except per share data) |
| Reconciliation of GAAP and non-GAAP measures: | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| Net income | $ | 143,669 | | $ | 104,530 | | $ | 492,353 | | $ | 467,679 | |
| Less: | | | | | | | | | | | | |
| Net realized investment gains, net of tax | | 16,052 | | | 9,274 | | | 78,117 | | | 79,970 | |
| Dividends to preferred shareholders | | 6,804 | | | 4,970 | | | 21,485 | | | 29,390 | |
| |
|
| |
|
| |
|
| |
|
|
| Operating earnings available to common shareholders | $ | 120,813 | | $ | 90,286 | | $ | 392,751 | | $ | 358,319 | |
| |
|
| |
|
| |
|
| |
|
|
| | | | | | | | | | | | | |
| Diluted net income per common share | $ | 2.54 | | $ | 1.84 | | $ | 8.71 | | $ | 8.13 | |
| Less: | | | | | | | | | | | | |
| Net realized investment gains, net of tax, per common share | | 0.29 | | | 0.17 | | | 1.44 | | | 1.48 | |
| |
|
| |
|
| |
|
| |
|
|
| Diluted operating earnings per common share | $ | 2.25 | | $ | 1.67 | | $ | 7.27 | | $ | 6.65 | |
| |
|
| |
|
| |
|
| |
|
|
| | | | | | | | | | | | | |
| Annualized return on beginning common shareholders' equity | | | | | | | | | | | | |
| calculated with net income | | 23.8 | % | | 21.8 | % | | 20.4 | % | | 24.0 | % |
| Less: | | | | | | | | | | | | |
| Net realized investment gains, net of tax | | 2.8 | | | 2.0 | | | 3.4 | | | 4.4 | |
| |
|
| |
|
| |
|
| |
|
|
| Annualized operating return on equity | | 21.0 | % | | 19.8 | % | | 17.0 | % | | 19.6 | % |
| |
|
| |
|
| |
|
| |
|
|
12
