ACE Limited Reports Third Quarter Earnings Highlights.Business Editors HAMILTON Hamilton, city, Bermuda Hamilton, city (1990 est. pop. 3,100), capital of Bermuda, on Bermuda Island. It is a port at the head of Great Sound, a huge lagoon and deepwater harbor protected by coral reefs. , Bermuda--(BUSINESS WIRE)--Oct. 25, 2001 ACE Limited (NYSE NYSE See: New York Stock Exchange : ACE) today reported a net loss excluding net realized gains Realized Gain A gain resulting from selling an asset at a price higher than the original purchase price. Notes: There may be tax consequences for a realized profit. (losses) of $390.1 million for the quarter ended September September: see month. 30, 2001, or a loss, after deducting preferred dividends preferred dividend n. a payment of a corporation's profits to holders of preferred shares of stock. (See: preferred stock) , of $1.66 per share, compared with income excluding net realized gains (losses) of $150.6 million for the quarter ended September 30, 2000, or earnings per share of $0.62. The net loss for the quarter ended September 30, 2001 was $442.6 million compared with net income of $140.8 million in 2000 and the loss per share, after deducting preferred dividends, was $1.88 for the current quarter compared with earnings per share of $0.58 for the same quarter last year. Earnings per share calculations above are based on the weighted average number of shares calculated in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with FAS 128 on a diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. basis. The Company's third quarter results were reduced by $558.8 million after tax ($636.9 million on a pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta basis) as a result of the September 11, 2001 tragedy. Excluding the impact of this event, the Company's income excluding net realized gains (losses) for the quarter ended September 30, 2001 would have been $168.7 million and earnings per share excluding net realized gains (losses), after deducting preferred dividends, would have been $0.68 per share on a diluted basis. Gross premiums written When a non-life insurance company closes a contract to provide insurance against loss, the revenues (premiums) expected to be received over the life of the contract are called gross premiums written. during the quarter increased by 25.1 percent to $2.5 billion, compared with $2 billion for the comparable quarter last year. Net premiums written during the quarter increased by 9.0 percent to $1.3 billion compared with $1.2 billion for the same quarter last year. Net premiums earned during the quarter increased to $1.4 billion from $1.2 billion for the same quarter last year. For the first nine months of fiscal 2001, gross premiums written increased by 25.6 percent to $7.5 billion compared with the same period last year and net premiums written increased by 16.6 percent to $4.5 billion compared with the first nine months of fiscal 2000. Net premiums earned for the nine months ended September 30, 2001 were $4.2 billion compared with $3.4 billion for the same period last year. Net investment income which excludes net realized gains (losses) on investments, was $192.9 million for the fiscal 2001 third quarter, compared with $197.6 million for the same period last year. For the first nine months of fiscal 2001, net investment income, was $593.6 million compared with $561.5 million for the same period last year. During the 2001 third quarter, ACE had net realized losses Realized Loss A loss recognized when assets are sold for a price lower than the original purchase price. Notes: A portion of the realized loss may be applied against a capital gain or realized profit to reduce taxes. , net of tax, of $52.5 million, compared with net realized losses of $9.8 million for the same quarter last year. For the nine months ended September 30, 2001, net realized losses, net of tax, were $54.7 million, compared with net realized gains of $11.5 million for the nine months ended September 30, 2000. As previously announced, ACE has commenced a public offering of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $1 billion of its ordinary shares, plus up to an additional $150 million of ordinary shares to cover over-allotments. Subject to market and other conditions, ACE expects the transaction to be completed in the near future. ACE intends to deploy the new capital by, among other things, expanding its net underwriting Underwriting 1. The process by which investment bankers raise investment capital from investors on behalf of corporations and governments that are issuing securities (both equity and debt). 2. The process of issuing insurance policies. capacity, either through internal growth and/or and/or conj. Used to indicate that either or both of the items connected by it are involved. Usage Note: And/or is widely used in legal and business writing. through acquisitions of lines of business or companies. The ACE Group of Companies provides insurance and reinsurance The contract made between an insurance company and a third party to protect the insurance company from losses. The contract provides for the third party to pay for the loss sustained by the insurance company when the company makes a payment on the original contract. for a diverse group of clients. The ACE Group conducts its business on a global basis with operating subsidiaries An operating subsidiary is a business term frequently used within the United States railroad industry. In the case of a railroad, it refers to a company that is a subsidiary but operates with its own identity and rolling stock. in nearly 50 countries. Additional information can be found at: http://www.acelimited.com. Application of the Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995: Any forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. made in this press release reflect the Company's current views with respect to 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 involve risks and uncertainties which may cause actual results to differ materially from those set forth in these statements. Among other things, the impact of the recent tragedy on the Company's financial results will depend on the number of insureds and reinsureds affected by the disaster, and the amount and timing of losses actually incurred and reported by insureds and reinsureds. Also, competition in the industry, levels of new and renewal business achieved, market acceptance, the frequency of unpredictable catastrophic events and economic, market, regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. , insurance and reinsurance business conditions and other factors identified in the Company's filings with the Securities and Exchange Commission could affect the forward-looking statements contained in this press release. 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 undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
ACE Limited
Summary Consolidated Financial Data
(in thousands of U.S. dollars, except share and per share data)
----------------------------------------------------------------------
Three Months Ended Nine Months Ended
September 30 September 30
---------------------- ----------------------
2001 2000 2001 2000
---------- ---------- ---------- ----------
Operations Data:
Gross premiums
written $2,502,371 $1,999,816 $7,466,670 $5,946,843
Net premiums
written 1,305,067 1,196,804 4,510,830 3,867,711
Net premiums
earned 1,399,429 1,174,782 4,153,732 3,447,424
Losses and loss
expenses 1,571,333 772,887 3,506,272 2,256,481
Policy acquisition
costs 204,666 168,258 558,996 482,628
Administrative
expenses 207,389 177,912 601,415 554,784
---------- ---------- ---------- ----------
Underwriting income
(loss) (583,959) 55,725 (512,951) 153,531
Net investment
income 192,909 197,584 593,606 561,548
Amortization of
goodwill 19,912 19,919 59,664 58,889
Interest expense 49,130 55,408 153,094 166,544
Income tax expense (69,978) 27,429 (21,254) 71,981
(benefit)
---------- ---------- ---------- ----------
Income (loss)
excluding net
realized gains
(losses),
non-recurring
expenses and
cumulative effect
of adopting a new
accounting
standard (390,114) 150,553 (110,849) 417,665
Non-recurring
expenses (a) - - (4,461) -
---------- ---------- ---------- ----------
Income (loss)
excluding net
realized gains
(losses) and
cumulative effect (390,114) 150,553 (115,310) 417,665
Net realized gains
(losses) (a) (52,476) (9,800) (54,699) 11,529
---------- ---------- ---------- ----------
Income (loss)
excluding
cumulative effect (442,590) 140,753 (170,009) 429,194
Cumulative effect
of adopting a new
accounting
standard (a) - - (22,670) -
---------- ---------- ---------- ----------
Net income (loss) $ (442,590) $ 140,753 $ (192,679) $ 429,194
========== ========== ========== ==========
(Basic earnings per share):(b)
Earnings (loss) per
share excluding net
realized gains
(losses),
non-recurring
expenses and
cumulative effect
of adopting a new
accounting standard $(1.72) $0.65 $(0.55) $1.86
Earnings (loss) per
share excluding net
realized gains
(losses) and
cumulative effect
of adopting a new
accounting standard $(1.72) $0.65 $(0.57) $1.86
Earnings (loss) per
share excluding
cumulative effect
of adopting a new
accounting standard $(1.95) $0.60 $(0.81) $1.92
Earnings (loss)
per share $(1.95) $0.60 $(0.90) $1.92
Weighted average
shares
outstanding 230,610,425 222,042,432 234,485,610 217,615,849
(Diluted earnings per share):(b)
Earnings (loss)
per share excluding
net realized gains
(losses),
non-recurring
expenses and
cumulative effect
of adopting a new
accounting standard $(1.66) $0.62 $(0.53) $1.83
Earnings (loss) per
share excluding net
realized gains
(losses) and
cumulative effect
of adopting a new
accounting standard $(1.66) $0.62 $(0.55) $1.83
Earnings (loss) per
share excluding
cumulative effect
of adopting a new
accounting standard $(1.88) $0.58 $(0.78) $1.88
Earnings (loss)
per share $(1.88) $0.58 $(0.87) $1.88
Weighted average
shares
outstanding 238,980,848 231,385,699 243,993,711 222,047,554
(a) Shown net of income tax
(b) EPS calculations provided on page 6 of this release
ACE Limited
Summary Consolidated Financial Data
(in thousands of U.S. dollars, except per share data)
----------------------------------------------------------------------
September 30, December 31,
2001 2000
------------- ------------
Balance Sheet Data:
Investments and Cash:
Fixed maturities available for sale,
at fair value
(amortized cost $11,051,756 and
$10,640,937) $11,375,713 $10,721,309
Equity securities, at fair value
(cost $525,325 and $495,049) 427,929 532,046
Short-term investments, at fair value
(amortized cost $1,439,235 and
$1,369,784) 1,439,235 1,369,784
Other investments, at fair value
(cost $568,745 and $518,130) 594,923 531,116
Cash 754,588 608,069
----------- -----------
Total investments and cash $14,592,388 $13,762,324
Reinsurance recoverable 10,701,733 8,994,940
Total assets $34,909,275 $31,689,526
Unpaid losses and loss expenses $19,883,757 $17,388,394
Total liabilities $29,580,445 $25,958,265
Mezzanine equity $ 311,050 $ 311,050
Shareholders' equity
Ordinary shares ($0.041666667 par value,
300,000,000 shares
authorized; 226,390,282 and 232,346,579
shares issued and outstanding) $ 9,433 $ 9,681
Additional paid-in capital 2,575,080 2,637,085
Unearned stock grant compensation (40,129) (29,642)
Retained earnings 2,320,704 2,733,633
Accumulated other comprehensive income 152,692 69,454
-----
------- ------
----------- -----------
Total shareholders' equity $ 5,017,780 $ 5,420,211
----------- -----------
Total liabilities, mezzanine equity
and shareholders' equity $34,909,275 $31,689,526
=========== ===========
Fully diluted book value per share $21.66 $23.25
ACE Limited
Consolidated Supplementary Information
Computation of Basic and Diluted Earnings per Share
(in thousands of U.S. dollars, except share and per share data)
Three Months Ended Nine Months Ended
September 30 September 30
---------------------- ---------------------
2001 2000 2001 2000
---- ---- ---- ----
Numerator:
Income (loss) excluding
net realized gains
(losses), non-recurring
expenses and cumulative
effect of adopting a
new accounting standard $(390,114) $ 150,553 $(110,849) $ 417,665
Feline PRIDES dividend (6,416) (6,537) (19,179) (11,862)
Income (loss) available ---------- ---------- ---------- ----------
to the holders of
ordinary shares,
excluding net realized
gains (losses),
non-recurring expenses
and cumulative effect
of adopting a new
accounting standard (396,530) 144,016 (130,028) 405,803
Non-recurring
expenses (a) - - (4,461) -
Net income (loss) ---------- ---------- ---------- ----------
available to the
holders of ordinary
shares, excluding net
realized gains (losses)
and cumulative effect (396,530) 144,016 (134,489) 405,803
Net realized gains
(losses)(a) (52,476) (9,800) (54,699) 11,529
Net income (loss) ---------- ---------- ---------- ----------
available to the
holders of ordinary
shares, excluding
cumulative effect (449,006) 134,216 (189,188) 417,332
Cumulative effect of
adopting a new
accounting standard (a) - - (22,670) -
Net income (loss) ---------- ---------- ---------- ----------
available to the
holders of
ordinary shares $(449,006) $ 134,216 $(211,858) $ 417,332
Denominator: ---------- ---------- ---------- ----------
Denominator for basic
earnings per share:
Weighted average
shares outstanding 230,610,425 222,042,432 234,485,610 217,615,849
Dilutive effect of
Feline PRIDES 2,462,861 2,663,691 3,067,185 -
Effect of other
dilutive securities 5,907,562 6,679,576 6,440,916 4,431,705
---------- ---------- ---------- ----------
Denominator for diluted
earnings per share:
Adjusted weighted
average shares
outstanding and
assumed conversions 238,980,848 231,385,699 243,993,711 222,047,554
Basic earnings per ----------- ----------- ----------- -----------
share:
Earnings (loss) per
share excluding net
realized gains
(losses), non-recurring
expenses and
cumulative effect of
adopting a new
accounting standard $(1.72) $0.65 $(0.55) $1.86
Earnings (loss) per
share excluding net
realized gains (losses)
and cumulative effect
of adopting a new
accounting standard $(1.72) $0.65 $(0.57) $1.86
Earnings (loss) per share
excluding cumulative
effect of adopting a
new accounting standard $(1.95) $0.60 $(0.81) $1.92
Earnings per share $(1.95) $0.60 $(0.90) $1.92
Diluted earnings per share:
Earnings (loss) per share
excluding net realized
gains (losses),
non-recurring expenses
and cumulative effect of
adopting a new
accounting standard $(1.66) $0.62 $(0.53) $1.83
Earnings (loss) per share
excluding net realized
gains (losses) and
cumulative effect of
adopting a new accounting
standard $(1.66) $0.62 $(0.55) $1.83
Earnings (loss) per share
excluding cumulative
effect of adopting a new
accounting standard $(1.88) $0.58 $(0.78) $1.88
Earnings per share $(1.88) $0.58 $(0.87) $1.88
(a) Shown net of income tax
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