Exhibit 1
PartnerRe
News Release
PartnerRe Ltd. Reports Record Second Quarter and First Half 2003 Results
o Second Quarter Net Income of $2.00 per share; Operating Earnings of
$1.57 per share
o Net Premium Written Growth of 49%
o Annualized Net Income ROE of 23%; Annualized Operating ROE of 18%
o Book Value per Share of $38.98, a 10% increase in the Second Quarter
PEMBROKE, Bermuda, August 4, 2003 -- PartnerRe Ltd. (NYSE:PRE) today reported
record results for the second quarter and first half of 2003.
PartnerRe President & Chief Executive Officer, Patrick Thiele, commented, "We
had an exceptional second quarter. In addition to setting a new record for
operating income, we continued to achieve significant levels of written premium
and book value growth, clearly indicating that we are benefiting from both our
operating strategies and the current attractive market conditions."
For the three months ended June 30, 2003, net income was $121.9 million, or
$2.00 per share on a fully diluted basis. Net income includes a net after-tax
realized gain on investments of $23.1 million or $0.43 per share. This
quarter's per share result includes one-time preferred share charges of $9.6
million or $0.18 per share relating to the issuance of new Series C Preferred
Shares and redemption of the Series A Preferred Shares. The Company also began
recognizing compensation expense relating to its stock incentive plans under
the fair-value method of Financial Accounting Standard No. 123 "Accounting for
Stock-Based Compensation" (FAS 123). This added $1.1 million or $0.02 per share
to operating expenses during the second quarter. Net income for the second
quarter of 2002, including a net after-tax realized loss on investments of $9.7
million or $0.19 per share, was $66.6 million or $1.19 per share.
Operating earnings for the second quarter 2003 were $84.2 million or $1.57 per
share on a fully diluted basis. Operating earnings exclude net realized
investment gains or losses and are calculated after payment of preferred
dividends. Operating results for this quarter also reflect the impact of the
refinancing of the Series A Preferred Shares and the expense related to stock
incentives. This compares to operating earnings of $71.3 million, or $1.38 per
share for the second quarter of 2002.
PartnerRe Ltd. Telephone +1 441 292 0888
Chesney House, Fax +1 441 292 6080
96 Pitts Bay Road www.partnerre.com
Pembroke, Bermuda HM 08
PartnerRe
News Release
Summary unaudited consolidated financial data for the period is set out below.
- ----------------------------------------------------------------------------------------------------------
U.S.$ thousands (except per share amounts) Three months ended June 30 Six months ended June 30
- ----------------------------------------------------------------------------------------------------------
2003 (b) 2002 2003 (b) 2002
- ----------------------------------------------------------------------------------------------------------
Net Premiums Written $838,860 $563,300 $2,073,607 $1,387,773
- ----------------------------------------------------------------------------------------------------------
Net Premiums Earned $862,848 $565,669 $1,669,084 $1,045,143
- ----------------------------------------------------------------------------------------------------------
Non-life Combined Ratio 92.6% 94.4% 93.5% 93.5%
- ----------------------------------------------------------------------------------------------------------
Net Income $121,915 $66,589 $246,284 $129,844
- ----------------------------------------------------------------------------------------------------------
Net Income per share (a) $2.00 $1.19 $4.22 $2.32
- ----------------------------------------------------------------------------------------------------------
Net Operating Earnings (a) $84,209 $71,320 $165,127 $138,107
- ----------------------------------------------------------------------------------------------------------
Net Operating Earnings per share (a) $1.57 $1.38 $3.07 $2.67
- ----------------------------------------------------------------------------------------------------------
(a) Net income per share is defined as net income available to common
shareholders divided by the number of fully diluted shares. 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. Per share results are on a fully-diluted basis.
(b) As a result of the refinancing of the Series A Preferred Shares and
issuance of the Series C Preferred Shares, the Company recognized a
charge of $7.8 million relating to the redemption of the Series A
Preferred Shares as well as $1.8 million in additional preferred
dividends as a result of the overlap of the two securities. Net
income per share, operating earnings and operating earnings per share
include the total impact of $9.6 million or $0.18 per share.
Net premiums written for the second quarter were $838.9 million, a 49% increase
over the comparable period in 2002. Total revenues increased 54% in the quarter
to $952.9 million, including $862.8 million of net premiums earned - an
increase of 53%, net investment income of $63.8 million - an increase of 7%,
and net realized investment gains of $24.5 million. For the second quarter of
2002, revenues were $620.3 million, with $565.7 million of net premiums earned,
net investment income of $59.5 million, and net realized investment losses of
$6.3 million.
For the six months ended June 30, 2003, net premiums written were $2.1 billion,
an increase of 49% from the prior year. Net income was $246.3 million or $4.22
per share. Net income for the period includes a net after-tax realized gain on
investments of $61.6 million or $1.15 per share. Operating earnings were $165.1
million or $3.07 per share on a fully diluted basis. These results also include
the impact of the refinancing of the Series A Preferred Shares and
PartnerRe Ltd. Telephone +1 441 292 0888
Chesney House, Fax +1 441 292 6080
96 Pitts Bay Road www.partnerre.com
Pembroke, Bermuda HM 08
2
PartnerRe
News Release
the expense related to stock incentives. Net income for the first six months of
2002 was $129.8 million, or $2.32 per share after net after-tax realized losses
of $18.3 million or $0.35 per share. Operating earnings for the same period in
2002 were $138.1 million or $2.67 per share on a fully diluted basis.
At June 30, 2003, total assets were $10.5 billion, total capitalization was
$3.0 billion, and total shareholders' equity was $2.4 billion. This compares to
total assets of $8.7 billion, total capitalization of $2.7 billion, and total
shareholders' equity of $2.1 billion at December 31, 2002. Book value per
common share was $38.98 on a fully diluted basis, compared to $34.02 per share
at December 31, 2002, representing an increase of 15% for the first six months
of 2003.
Separately, the Company announced in June that its Board of Directors had
increased the annual common share dividend by 7% to $1.24 from $1.16. Today,
the Board declared a quarterly dividend of $0.31 per share representing this
increased level of dividend. The dividend will be payable on September 2, 2003,
to common shareholders of record on August 22, 2003, with the stock trading
ex-dividend commencing August 20, 2003.
Results of Operations
"Growth in net written premium during the second quarter continued to be
strong, representing a 49% increase over the second quarter of 2002," Mr.
Thiele said. "Given our strong second quarter growth on top of the 50% growth
in the first three months of 2003, we now expect a higher level of growth for
2003, closer to 30%.
"Again, this level of growth reflects our solid and differentiated market
position, both in the US and in Europe," Mr. Thiele continued. "It is
indicative of our ability to attract quality business across a diversified
portfolio of reinsurance lines, our broad geographical spread and the access we
have to both the direct and broker markets.
"Our Non-Life segment continued to perform very well, with a combined ratio of
92.6%. This represents the high volume of profitable business written over the
last several quarters, and a moderate level of catastrophe losses during the
quarter.
"In the Life segment, we continued to take advantage of opportunities in
European life business, virtually doubling life premiums for the first six
months of 2003 over the comparable period in 2002. We are confident we are
building value which will benefit our income statement in future periods."
PartnerRe Ltd. Telephone +1 441 292 0888
Chesney House, Fax +1 441 292 6080
96 Pitts Bay Road www.partnerre.com
Pembroke, Bermuda HM 08
3
PartnerRe
News Release
Results by Segment
The Non-Life segment reported net premiums written of $772.9 million for the
quarter, an increase of 46%, reflecting growth in all lines of business. The
Non-Life technical result increased 70% to $113.3 million. The combined ratio
was 92.6% for the second quarter compared to 94.4% for the same period in 2002.
For the first six months of 2003, Non-Life net premiums written were $1.9
billion, representing an increase of 47% over the first half year of 2002. The
Non-Life technical result increased 51% to $201.0 million. The combined ratio
was steady at 93.5% for the first six months.
The U.S. Property and Casualty business, which represented approximately 26% of
total net premiums written for the quarter, reported net premiums written of
$221.3 million, a 26% increase over the prior year's second quarter, with
substantial growth in specialty casualty lines. Net premiums earned increased
57% during the quarter when compared to the same period in 2002. The technical
result for the second quarter increased to $10.1 million from a loss of $4.3
million in 2002, representing both higher premiums earned and a lower technical
ratio. The technical ratio for this segment was 95.3%, compared to 103.1% in
the second quarter of 2002, reflecting solid underwriting results in most
lines. For the six-month period, net premiums written increased 54% to $539.1
million, with a technical ratio of 95.6% as compared to 98.5% for the prior
year period. The technical result increased to $18.0 million for the first half
of 2003 from $3.8 million in 2002.
The Global (Non-U.S.) Property and Casualty business, which represented
approximately 22% of total net premiums written, reported net premiums written
of $185.5 million for the second quarter of 2003, a 69% increase over the prior
year, with the strongest growth in property business. Net premiums earned
during the quarter increased 56%. The technical result for the second quarter
grew to $12.6 million from $2.7 million in 2002, representing both higher
premiums earned and improvements in most lines of business. The technical ratio
for this segment was 94.2% compared to 98.1% for the same period in 2002. For
the six-month period, net premiums written increased 58% to $490.3 million with
a technical ratio of 93.2% as compared to 97.8% for the first six months of
2002. The six month technical result increased five-fold to $28.2 million from
$5.6 million in 2002.
The Worldwide Specialty business, which represented approximately 44% of total
net premiums written for the quarter, reported net premiums written of $366.1
million for the second quarter, a 50% increase over the prior year period. Net
premiums earned increased 42% during the quarter. The technical result for the
quarter increased 33% to $90.6 million compared to $68.1 million in 2002. This
unit's technical ratio of 75.2%, compared to 73.5%
PartnerRe Ltd. Telephone +1 441 292 0888
Chesney House, Fax +1 441 292 6080
96 Pitts Bay Road www.partnerre.com
Pembroke, Bermuda HM 08
4
PartnerRe
News Release
for the second quarter of 2002, reflects strong results across most lines, most
significantly in catastrophe, aviation, and energy. For the six-month period,
net premiums written increased 37% to $896.4 million with a technical ratio of
77.9% compared to 73.2% for the comparable period in 2002. The six-month
technical result grew to $154.8 million from $124.1 million in 2002.
The Life segment, which markets coverages primarily in Europe, Canada and Latin
America, and represented approximately 8% of total net premiums written,
reported net premiums written of $66.0 million for the quarter, as compared to
$33.4 million for the second quarter 2002, representing an increase of 98%. The
net technical result for the quarter was a gain of $5.4 million, compared to
$4.3 million for the comparable period in 2002. For the first six months, net
premium written increased 100% to $147.8 million, with a net technical result
of $10.5 million as compared to $7.2 million for the first six months of 2002.
Commentary and Outlook
"Virtually all of our operations are performing well this year, our tenth
anniversary year," Mr. Thiele said. "The current market is allowing PartnerRe
to demonstrate its strengths in underwriting, financial capacity and client
relationships.
"These strengths were exhibited in our July 1 renewals where we experienced 17%
growth in estimated premium production over the expiring premium base. The
growth of well-priced business plus expected growth in our non-life investment
income account makes us optimistic about results through this year and next.
"We remain confident that we will achieve our plan results for 2003 of
operating ROE of a minimum of 17% and
earnings per share of at least $5.70, absent a large loss in the third or
fourth quarter of 2003. We expect net written premium will be in excess of $3.5
billion for the year."
---------------------------------------------
The Company uses operating earnings, diluted operating earnings per share and
operating return on beginning 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
PartnerRe Ltd. Telephone +1 441 292 0888
Chesney House, Fax +1 441 292 6080
96 Pitts Bay Road www.partnerre.com
Pembroke, Bermuda HM 08
5
PartnerRe
News Release
expenses. All references to per share amounts in this press release are on the
basis of fully diluted shares.
---------------------------------------------
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. At year-end 2002,
total revenues were $2.7 billion. As of June 30, 2003, total assets were $10.5
billion, total capitalization was $3.0 billion and total shareholders' equity
was $2.4 billion.
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 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 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. Telephone +1 441 292 0888
Chesney House, Fax +1 441 292 6080
96 Pitts Bay Road www.partnerre.com
Pembroke, Bermuda HM 08
6
PartnerRe Ltd.
Consolidated Statements of Operations and Comprehensive Income
(Expressed in thousands of U.S dollars, except per share data)
(Unaudited)
For the three For the three For the six For the six
months ended months ended month ended months ended
June 30, June 30, June 30, June 30,
2003 2002 2003 2002
Revenues
Gross premiums written $ 837,302 $ 567,667 $ 2,098,892 $ 1,414,519
=========== =========== =========== ===========
Net premiums written $ 838,860 $ 563,300 $ 2,073,607 $ 1,387,773
Decrease (increase) in unearned premiums 23,988 2,369 (404,523) (342,630)
----------- ----------- ----------- -----------
Net premiums earned 862,848 565,669 1,669,084 1,045,143
Net investment income 63,795 59,526 125,474 118,230
Net realized investment gains (losses) 24,504 (6,273) 65,456 (14,154)
Other income 1,761 1,348 3,260 2,023
----------- ----------- ----------- -----------
Total Revenues 952,908 620,270 1,863,274 1,151,242
----------- ----------- ----------- -----------
Expenses
Losses and loss expenses including life policy benefits 554,273 381,767 1,110,270 693,621
Acquisition costs 201,599 120,667 371,321 224,714
Other operating expenses 58,078 39,729 109,349 76,665
Interest expense 3,231 3,231 6,426 6,427
Net foreign exchange losses 3,375 2,487 294 6,090
----------- ----------- ----------- -----------
Total Expenses 820,556 547,881 1,597,660 1,007,517
----------- ----------- ----------- -----------
Income before distributions related to Trust Preferred
and Mandatorily Redeemable Preferred Securities and taxes 132,352 72,389 265,614 143,725
Distributions related to Trust Preferred and Mandatorily
Redeemable Preferred Securities 6,815 6,815 13,630 13,630
Income tax expense (benefit) 3,622 (1,015) 5,700 251
----------- ----------- ----------- -----------
Net income $ 121,915 $ 66,589 $ 246,284 $ 129,844
=========== =========== =========== ===========
Preferred dividends $ 14,567 $ 5,000 $ 19,567 $ 10,000
=========== =========== =========== ===========
Operating earnings available to common shareholders $ 84,209 $ 71,320 $ 165,127 $ 138,107
=========== =========== =========== ===========
Comprehensive income $ 224,054 $ 136,604 $ 326,491 $ 168,498
=========== =========== =========== ===========
Per Share Data:
Earnings per common share:
Basic operating earnings $ 1.58 $ 1.42 $ 3.13 $ 2.75
Net realized investment gains (losses), net of tax 0.44 (0.20) 1.16 (0.37)
----------- ----------- ----------- -----------
Basic net income $ 2.02 $ 1.22 $ 4.29 $ 2.38
=========== =========== =========== ===========
Weighted average number of common shares
outstanding 53,221.8 50,280.5 52,810.3 50,283.6
Diluted operating earnings $ 1.57 $ 1.38 $ 3.07 $ 2.67
Net realized investment gains (losses), net of tax 0.43 (0.19) 1.15 (0.35)
----------- ----------- ----------- -----------
Diluted net income $ 2.00 $ 1.19 $ 4.22 $ 2.32
=========== =========== =========== ===========
Weighted average number of common and
common equivalent shares outstanding 53,698.7 51,706.4 53,716.4 51,739.1
7
PartnerRe Ltd.
Consolidated Balance Sheets
(Expressed in thousands of U.S. dollars, except per share
data and parenthetical share data)
June 30, December 31,
2003 2002
(Unaudited) (Audited)
Assets
Investments and cash
Fixed maturities, at fair value
(amortized cost: 2003, $4,645,327; 2002, $3,998,382) $ 4,807,038 $ 4,145,594
Short-term investments, at fair value
(amortized cost: 2003, $24,392; 2002, $3,787) 24,373 3,801
Equities, at fair value
(cost: 2003, $538,778; 2002, $493,893) 568,177 473,163
Trading securities, at fair value (cost: 2003, $107,507; 2002, $72,998) 113,477 75,284
Cash and cash equivalents, at fair value, which approximates amortized cost 957,649 710,640
Other invested assets 4,111 3,630
------------ ------------
Total investments and cash 6,474,825 5,412,112
Accrued investment income 106,625 66,980
Reinsurance balances receivable 1,415,542 994,502
Reinsurance recoverable on paid and unpaid losses 220,681 216,681
Funds held by reinsured companies 817,180 726,722
Deferred acquisition costs 355,358 304,873
Deposit assets 477,608 359,606
Taxes recoverable 83,684 100,002
Goodwill 429,519 429,519
Other 132,091 126,977
------------ ------------
Total Assets $ 10,513,113 $ 8,737,974
============ ============
Liabilities
Unpaid losses and loss expenses $ 4,100,680 $ 3,658,416
Policy benefits for life and annuity contracts 926,195 815,978
Unearned premiums 1,330,761 869,925
Funds held under reinsurance treaties 33,081 32,359
Deposit liabilities 497,088 356,091
Long-term debt 220,000 220,000
Net payable for securities purchased 487,622 190,110
Accounts payable, accrued expenses and other 119,291 117,913
------------ ------------
Total Liabilities 7,714,718 6,260,792
------------ ------------
Trust Preferred and Mandatorily Redeemable Preferred Securities 400,000 400,000
------------ ------------
Shareholders' Equity
Common shares (par value $1.00, issued and outstanding:
2003, 53,613,221; 2002, 52,375,938) 53,613 52,376
Preferred shares (par value $1.00, issued and outstanding: 2003, 11,600,000;
2002, 10,000,000; aggregate liquidation preference, 2003, $290,000,000;
2002, $250,000,000) 11,600 10,000
Additional paid-in capital 1,019,835 977,714
Deferred compensation (193) (261)
Accumulated other comprehensive income:
Net unrealized gains on investments, net of tax 171,765 119,605
Currency translation adjustment (2,773) (30,820)
Retained earnings 1,144,548 948,568
------------ ------------
Total Shareholders' Equity 2,398,395 2,077,182
------------ ------------
Total Liabilities, Trust Preferred and Mandatorily Redeemable
Preferred Securities and Shareholders' Equity $ 10,513,113 $ 8,737,974
============ ============
Shareholders' Equity Per Common Share $ 39.33 $ 34.89
============ ============
Diluted Book Value Per Common and Common Equivalent
Share (assuming exercise of warrants and stock options) $ 38.98 $ 34.02
============ ============
Number of Diluted Common Shares Outstanding 54,090.1 53,702.3
============ ============
8
PartnerRe Ltd.
Supplementary Information
(in millions of U.S. dollars)
(Unaudited)
For the three For the three For the six For the six
months ended months ended months ended months ended
June 30, June 30, June 30, June 30,
2003 2002 2003 2002
SEGMENT INFORMATION
NON-LIFE SEGMENT
US Property and Casualty
Net premiums written $ 221.3 $ 176.0 $ 539.1 $ 350.2
Net premiums earned 214.9 136.6 410.7 257.1
Loss and loss expense ratio(1) 68.7% 77.4% 69.5% 72.2%
Acquisition expense ratio(2) 26.6 25.7 26.1 26.3
--------- --------- --------- ---------
Technical ratio(3) 95.3 103.1 95.6 98.5
Global (Non-US) Property and Casualty
Net premiums written $ 185.5 $ 109.6 $ 490.3 $ 310.4
Net premiums earned 214.6 137.7 416.4 258.9
Loss and loss expense ratio(1) 67.8% 72.9% 68.0% 73.4%
Acquisition expense ratio(2) 26.4 25.2 25.2 24.4
--------- --------- --------- ---------
Technical ratio(3) 94.2 98.1 93.2 97.8
Worldwide Specialty
Net premiums written $ 366.1 $ 244.3 $ 896.4 $ 653.4
Net premiums earned 366.0 257.4 699.5 462.6
Loss and loss expense ratio(1) 55.2% 56.4% 58.6% 56.2%
Acquisition expense ratio(2) 20.0 17.1 19.3 17.0
--------- --------- --------- ---------
Technical ratio(3) 75.2 73.5 77.9 73.2
TOTAL NON-LIFE SEGMENT
Gross premiums written $ 769.2 $ 532.9 $ 1,943.8 $ 1,336.3
Net premiums written 772.9 529.9 1,925.8 1,314.0
Net premiums earned 795.5 531.7 1,526.6 978.6
Loss and loss expense ratio(1) 62.2% 66.1% 64.1% 64.9%
Acquisition expense ratio(2) 23.6 21.4 22.8 21.4
--------- --------- --------- ---------
Technical ratio(3) 85.8 87.5 86.9 86.3
Other overhead expense ratio(4) 6.8 6.9 6.6 7.2
--------- --------- --------- ---------
Combined ratio(5) 92.6% 94.4% 93.5% 93.5%
========= ========= ========= =========
LIFE SEGMENT
Gross premiums written 68.1 $ 34.8 $ 155.1 $ 78.2
Net premiums written 66.0 33.4 147.8 73.8
Net premiums earned 67.3 34.0 142.5 66.5
Technical result (6) $ (6.3) $ (3.2) $ (13.5) $ (6.7)
Allocated investment income 11.7 7.5 24.0 13.9
--------- --------- --------- ---------
Net technical result $ 5.4 $ 4.3 $ 10.5 $ 7.2
========= ========= ========= =========
(1) Loss and loss expense ratio is obtained by dividing losses and loss
adjustment expenses by net premiums earned.
(2) Acquisition expense ratio is obtained by dividing acquisition costs by net
premiums earned.
(3) Technical ratio is defined as the sum of the losses and loss adjustment
expenses ratio and the acquisition expense 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 loss and loss expense ratio and the
expense ratio. The expense ratio is defined as the sum of the acquisition
expense ratio and the other overhead expense ratio.
(6) Technical result is defined as net premiums earned less loss and loss
adjustment expenses and acquisition costs.
9
PartnerRe Ltd.
Supplementary Information
(Unaudited)
For the three For the three For the six For the six
months ended months ended months ended months ended
June 30, June 30, June 30, June 30,
2003 2002 2003 2002
Distribution of Net Premiums Written by
Line of Business:
Non-Life
Property and Casualty
Property 22% 23% 20% 20%
Casualty 19 18 20 16
Motor 8 10 10 11
Worldwide Specialty
Agriculture 5 6 3 5
Aviation/Space 8 9 6 6
Catastrophe 7 10 14 18
Credit/Surety 7 5 5 4
Engineering/Energy 9 6 7 5
Marine 2 2 2 3
Special Risk 5 4 6 6
Other - 1 - 1
Life 8 6 7 5
Geographic Distribution of Gross Premiums Written:
Europe 36% 32% 41% 36%
North America 45 49 43 47
Asia, Australia and New Zealand 14 14 11 11
Latin America and the Caribbean 4 4 4 5
Africa 1 1 1 1
As at
June 30,
2003
Credit Ratings (Financial Strength Ratings):
Standard & Poor's AA
Moodys Aa3
A.M. Best A+
As at As at
June 30, December 31,
2003 2002
(in thousands of U.S. dollars) (in thousands of U.S. dollars)
Capital Structure:
Debt $ 220,000 7% $ 220,000 8%
Trust Preferred 200,000 7 200,000 7
Series B Cumulative Redeemable Preferred Shares (PEPS) 200,000 7 200,000 7
8% Series A Cumulative Preferred Shares - - 242,163 9
6.75% Series C Cumulative Preferred Shares 280,865 9 - -
Common Shareholders' Equity 2,117,530 70 1,835,019 69
---------- ---------- ---------- ----------
Total Capital $3,018,395 100% $2,697,182 100%
========== ========== ========== ==========
10
PartnerRe Ltd.
Supplementary Information
(Unaudited)
As at As at
June 30, December 31,
2003 2002
Investment Portfolio:
Credit Quality AAA 46% 56%
AA 10 13
A 21 16
BBB 16 9
Below Investment Grade 7 6
By Class U.S. Government 8% 12%
U.S. Mortgage/Asset Backed 16 16
U.S. Corporates 25 22
Foreign Fixed Income 29 27
Equities and Equity Substitutes 14 13
Cash (net of pending transactions) 8 10
Expected average duration 3.4 Yrs 3.3 Yrs
Average yield to maturity at market 3.5% 3.5%
(fixed income securities and cash)
Average Credit Quality AA AA
For the three For the three For the six For the six
months ended months ended month ended months ended
June 30, June 30, June 30, June 30,
2003 2002 2003 2002
(in thousands of U.S. dollars except per share data)
Reconciliation of Net income to Operating earnings
available to common shareholders:
Net income $ 121,915 $ 66,589 $ 246,284 $ 129,844
Less:
Net realized investment gains (losses), net of tax 23,139 (9,731) 61,590 (18,263)
Dividends to preferred shareholders 14,567 5,000 19,567 10,000
----------- ----------- ----------- -----------
Operating earnings available to common shareholders $ 84,209 $ 71,320 $ 165,127 $ 138,107
=========== =========== =========== ===========
Diluted net income per common share $ 2.00 $ 1.19 $ 4.22 $ 2.32
Less:
Net realized investment gains (losses), net of tax, per common share 0.43 (0.19) 1.15 (0.35)
----------- ----------- ----------- -----------
Diluted operating earnings per common share $ 1.57 $ 1.38 $ 3.07 $ 2.67
=========== =========== =========== ===========
Return on beginning common shareholders' equity
calculated with net income 23.5% 16.4% 24.8% 16.0%
Less:
Net realized investment gains (losses) net of tax 5.1 (2.6) 6.7 (2.4)
----------- ----------- ----------- -----------
Operating return on equity 18.4% 19.0% 18.1% 18.4%
=========== =========== =========== ===========
11
PartnerRe Ltd.
Supplementary Information
(in millions of U.S. dollars)
(Unaudited)
For the three For the three For the six For the six
months ended months ended month ended months ended
June 30, June 30, June 30, June 30,
2003 2002 2003 2002
Reconciliation of technical result to net income
Non-Life technical result $ 113.3 $ 66.5 $ 201.0 $ 133.5
Life technical result (6.3) (3.3) (13.5) (6.7)
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Total technical result 107.0 63.2 187.5 126.8
Other operating expenses (58.1) (39.7) (109.4) (76.7)
Net investment income 63.8 59.5 125.5 118.2
Other income 1.8 1.3 3.3 2.0
Interest expense (3.2) (3.2) (6.4) (6.4)
Net foreign exchange losses (3.4) (2.5) (0.3) (6.1)
Income tax (expense) recovery on operating income (2.3) 4.5 (1.9) 3.9
Distribution related to Trust Preferred and Mandatorily
Redeemable Prefered Shares (6.8) (6.8) (13.6) (13.6)
Net realized investment gains (losses), net of tax 23.1 (9.7) 61.6 (18.3)
--------- --------- --------- ---------
Net income $ 121.9 $ 66.6 $ 246.3 $ 129.8
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