AXIS Capital's Net Income Doubles to $532.3 Million for 2003.Business Editors PEMBROKE Pembroke, town, Canada Pembroke (pĕm`brōk), town (1991 pop. 13,997), SE Ont., Canada, NW of Ottawa, on the Ottawa River. It is a lumbering center and also has steel and electric-products factories. , Bermuda--(BUSINESS WIRE)--Feb. 11, 2004 AXIS Capital Holdings Limited ("AXIS Capital") (NYSE NYSE See: New York Stock Exchange : AXS AXS Access AXS Anomalous X-Ray Scattering AXS Alpha Chi Sigma AXS Alpha X-Ray Spectrometer AXS Activex Script ) today reported a 100% increase in net income for the year ended December December: see month. 31, 2003 of $532.3 million, or $3.42 per 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. share, compared to $265.1 million, or $1.91 per diluted share, for the year ended December 31, 2002, an increase of $267.2 million, or $1.51 per diluted share. Net income for the quarter ended December 31, 2003 rose 44.2% to $160.5 million, or $0.97 per diluted share, from $111.3 million, or $0.80 per diluted share, for the fourth quarter ended December 31, 2002. Net income 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. and losses on investments, net of tax for the year ended December 31, 2003 was $509.2 million, or $3.28 per diluted share, compared with $239.2 million, or $1.72 per diluted share, for the year ended December 31, 2002. Net income excluding net realized gains and losses on investments, net of tax for the fourth quarter of 2003 was $158.4 million, or $0.96 per diluted share, compared with $101.6 million, or $0.73 per diluted share, for the quarter ended December 31, 2002. Net income excluding net realized gains and losses on investments, net of tax is a non-GAAP financial measure. A reconciliation of this measure to net income is presented at the end of this release. Shareholders' equity Shareholders' Equity A firms' total assets minus its total liabilities. Equivalently, it is share capital plus retained earnings minus treasury shares. Shareholders' equity is the amount by which a company is financed through common and preferred shares. was in excess of $2.8 billion at December 31, 2003. This includes the net proceeds Net Proceeds The amount received after all costs are deducted from the sale of a piece of property or security. Notes: In the case of an investor selling a security, net proceeds represent the proceeds from the sale minus any trading costs (i.e. commissions). of $316.0 million received from the Company's initial public offering completed in July July: see month. 2003. Diluted book value per share at December 31, 2003 was $17.48, compared to $13.96 at December 31, 2002. Diluted book value per share is a non-GAAP financial measure. A reconciliation of this measure to book value per share is presented at the end of this release. John Charman John R Charman (born 1953), is an English businessman, who has made his career in insurance. He is currently CEO/President/Director at Bermuda based Axis Capital Holdings Ltd. , President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. , commented: "During 2003, we have generated over a 100% increase in our gross written premiums, $1.3 billion of operating cash flow Operating cash flow Earnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements. as well as a 100% increase in net income. Our return on equity was in excess of 22%. Against every measure of financial performance we have clearly demonstrated the continuing, outstanding daily achievements of AXIS since our inception INCEPTION. The commencement; the beginning. In making a will, for example, the writing is its inception. 3 Co. 31 b; Plowd. 343. Vide Consummation; Progression. . We have been and will continue to be dedicated in our pursuit of creating real, significant and strategic long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. value for our shareholders." 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. for the year ended December 31, 2003 were $2,273.6 million compared to $1,108.0 million for the year ended December 31, 2002. Of these premiums written: $980.7 million were derived de·rive v. de·rived, de·riv·ing, de·rives v.tr. 1. To obtain or receive from a source. 2. from global insurance compared to $793.8 million in the prior year; $462.9 million from global 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. compared to $314.2 million in the prior year; $625.9 million from U.S. insurance; and $204.1 million from U.S. reinsurance. Included within our global segments for 2002 was some business that is now included within our U.S. segments. Our U.S. segments, which were fully operational by the end of the first quarter of 2003, have no comparatives for the period in 2002. For the year ended December 31, 2003 compared to the year ended December 31, 2002, net premiums written rose to $1,908.4 million from $1,018.3 million and net premiums earned increased to $1,436.2 million from $536.9 million. For the year ended December 31, 2003, net investment income was $74.0 million and realized gains were $22.6 million, compared with $71.3 million in net investment income and $26.1 million in realized gains for the year ended December 31, 2002. Cash flow generated from operations was $1.3 billion compared with $660.6 million for the year ended December 31, 2003. For the year ended December 31, 2003, the Company generated a combined ratio of 73.7%, a loss ratio of 51.1% and an expense ratio of 22.6% compared to 70.7%, 42.7% and 28.0%, respectively, for the year ended December 31, 2002. Over the past two years, our loss ratios have benefited from limited loss activity. In 2003, our expense ratio improved as our earned premium Earned premium is the portion of an insurance written premium which is considered "earned" by the insurer, based on the part of the policy period that the insurance has been in effect, and during which the insurer has been exposed to loss. base accelerated. Gross premiums written for the fourth quarter of 2003 were $479.7 million compared to $329.3 million for the fourth quarter 2002. Of these premiums written: $280.1 million were derived from global insurance compared to $309.9 million in the corresponding quarter of 2002; $16.7 million from global reinsurance compared to $19.4 million in the corresponding quarter of 2002; $174.8 million from U.S. insurance; and $8.1 million from U.S. reinsurance. Included within our global segments for 2002 was some business that is now included within our U.S. segments. Our U.S. segments, which were fully operational by the end of the first quarter of 2003, have no comparatives for the period in 2002. For the quarter ended December 31, 2003 compared to the quarter ended December 31, 2002, net premiums written rose to $384.0 million from $323.7 million and net premiums earned increased to $400.7 million from $219.1 million. For the quarter ended December 31, 2003, net investment income was $27.4 million and realized gains were $1.4 million, compared with $16.0 million in net investment income and $9.7 million in realized gains for the quarter ended December 31, 2002. For the fourth quarter of 2003, the Company generated a combined ratio of 72.1%, a loss ratio of 51.9% and an expense ratio of 20.2% compared to 64.6%, 36.8% and 27.8%, respectively, for the fourth quarter of 2002. The Company's loss ratios have benefited from relatively benign benign /be·nign/ (be-nin´) not malignant; not recurrent; favorable for recovery. be·nign adj. Of no danger to health, especially relating to a tumorous growth; not malignant. catastrophic loss activity. In 2003, our expense ratio improved as our earned premium base accelerated. AXIS Capital will host a conference call on Thursday Thursday: see week. , February February: see month. 12, 2004 at 8:30 AM (Eastern) to discuss the fourth quarter and year end financial results. This presentation will be available through an audio webcast accessible through the Investor Information section of the Company's website at www.axiscapital.com. In addition, a financial supplement relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the Company's financial results for the fourth quarter is available in the Investor Information section of our website. AXIS Capital is a Bermuda-based global provider of specialty A contract under seal. A specialty is a written document that has been sealed and delivered and is given as security for the payment of a specifically indicated debt. lines insurance and treaty reinsurance with shareholders' equity of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $2.8 billion and locations in Bermuda Bermuda (bûrmy  `də), British dependency (2005 est. pop. 65,400), 21 sq mi (53 sq km), comprising some 150 coral rocks, islets, and islands (of which some 20 are inhabited), in the , the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. and Europe Europe (y r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). . Its 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. have been assigned as·sign tr.v. as·signed, as·sign·ing, as·signs 1. To set apart for a particular purpose; designate: assigned a day for the inspection. 2. a rating of "A" ("Excellent") by A.M. Best and a rating of "A" ("Strong") by Standard & Poor's. For more information about AXIS Capital, visit the Company's website at www.axiscapital.com.
AXIS CAPITAL HOLDINGS LIMITED
CONSOLIDATED BALANCE SHEETS
(Expressed in thousands of U.S. dollars, except share and per share
amounts)
December 31, December 31,
2003 2002
Assets
Cash and cash equivalents $ 605,175 $ 729,296
Investments at fair market value 3,385,576 1,702,990
(Amortized cost 2003:$3,359,102;
2002:$1,677,506)
Accrued interest receivable 29,530 16,502
Net receivable for investments sold 3,371 -
Insurance and reinsurance premium balances
receivable 660,530 327,615
Deferred acquisition costs 136,281 77,166
Prepaid reinsurance premiums 164,999 49,673
Reinsurance recoverable 124,899 1,703
Intangible assets 24,579 14,079
Other assets 37,333 19,204
------------ ------------
Total Assets $ 5,172,273 $ 2,938,228
============ ============
Liabilities
Reserve for losses and loss expenses $ 992,846 $ 215,934
Unearned premiums 1,143,447 555,962
Insurance and reinsurance balances payable 151,381 94,803
Accounts payable and accrued expenses 67,451 24,119
Net payable for investments purchased - 86,377
------------ ------------
Total Liabilities 2,355,125 977,195
------------ ------------
Shareholders' Equity
Share capital
(Authorized 800,000,000 common shares,
par value $0.0125; issued and
outstanding 2003;152,474,011:
2002; 138,168,520) 1,906 1,727
Additional paid-in-capital 2,000,731 1,686,599
Deferred compensation - (20,576)
Accumulated other comprehensive income 25,164 25,484
Retained earnings 789,347 267,799
------------ ------------
Total Shareholders' Equity 2,817,148 1,961,033
------------ ------------
Total Liabilities & Shareholders'
Equity $ 5,172,273 $ 2,938,228
============ ============
-
Book value per share $ 18.48 $ 14.19
============ ============
Diluted book value per share $ 17.48 $ 13.96
============ ============
AXIS CAPITAL HOLDINGS LIMITED
CONSOLIDATED STATEMENTS OF OPERATIONS
For the quarters and years ended December 31, 2003 and 2002
(Expressed in thousands of U.S. dollars,
except share and per share amounts)
Quarters ended December 31, Years ended December 31,
2003 2002 2003 2002
Revenues
Gross premiums
written $ 479,666 $ 329,343 $ 2,273,645 $ 1,108,003
Premiums ceded (95,622) (5,626) (365,258) (89,726)
Change in unearned
premiums 16,700 (104,643) (472,157) (481,427)
--------------- ------------ ------------ ------------
Net premiums
earned 400,744 219,074 1,436,230 536,850
Net investment
income 27,363 15,974 73,961 71,287
Net realized gains 1,378 9,738 22,567 26,070
Other insurance
related income 5,263 (639) 25,019 (639)
--------------- ------------ ------------ ------------
Total revenues 434,748 244,147 1,557,777 633,568
--------------- ------------ ------------ ------------
Expenses
Net losses and
loss expenses 207,884 80,637 734,019 229,265
Acquisition costs 54,963 43,778 229,712 103,703
General and
administrative
expenses 26,118 17,194 94,589 46,521
Foreign exchange
gains (12,899) (7,014) (32,215) (9,610)
--------------- ------------ ------------ ------------
Total expenses 276,066 134,595 1,026,105 369,879
--------------- ------------ ------------ ------------
Income before
income taxes 158,682 109,552 531,672 263,689
Income tax
recovery (1,813) (1,719) (678) (1,430)
--------------- ------------ ------------ ------------
Net Income $ 160,495 $ 111,271 $ 532,350 $ 265,119
=============== ============ ============ ============
Weighted average common
shares and common share
equivalents -
basic 152,464,156 135,975,617 144,262,881 135,442,240
=============== ============ ============ ============
Weighted average common
shares and common share
equivalents -
diluted 166,213,948 139,796,025 155,690,763 138,480,623
=============== ============ ============ ============
Net income per
share - basic $ 1.05 $ 0.82 $ 3.69 $ 1.96
=============== ============ ============ ============
Net income per
share - diluted $ 0.97 $ 0.80 $ 3.42 $ 1.91
=============== ============ ============ ============
Insurance Ratios
Loss ratio 51.9% 36.8% 51.1% 42.7%
Expense ratio 20.2% 27.8% 22.6% 28.0%
--------------- ------------ ------------ ------------
Combined ratio 72.1% 64.6% 73.7% 70.7%
=============== ============ ============ ============
Cautionary Note Regarding 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. This release may include forward-looking statements within the meaning of the U.S. federal securities laws. These statements involve risks, uncertainties and assumptions. Actual events or results may differ materially from the Company's expectations. Important factors that could cause actual events or results to be materially different from the Company's expectations include (1) the occurrence of natural and man-made disasters man-made disaster Technological disaster Public health An event in which a significant number of people are injured or die as a result of human devices or activities, unrelated to conflicts, and attributed to operator error–eg, Exxon Valdez , (2) actual claims exceeding our loss reserves, (3), failure of any of the loss limitation methods we employ, (4) effects of emerging claims and coverage issues, (5) a decline in our ratings with Standard & Poor's and A.M. Best, (6) loss of business provided to us by our major brokers, (7) general economic conditions, (8) increased competition on the basis of pricing, capacity, coverage terms or other factors and (9) changes in governmental regulations. The Company undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise. Non-GAAP Financial Measures In addition to the GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). financial measures included within this release, the Company has presented "net income excluding net realized gains and losses on investments, net of tax" and "diluted book value per share," which are non-GAAP financial measures. The Company has included the first measure as it believes that security analysts, rating agencies and investors believe that realized gains and losses are largely opportunistic opportunistic /op·por·tu·nis·tic/ (op?er-tldbomacn-is´tik) 1. denoting a microorganism which does not ordinarily cause disease but becomes pathogenic under certain circumstances. 2. and are a function of economic and interest rate conditions. As a result, the Company believes that they evaluate earnings before realized gains and losses, adjusted for tax to make performance comparisons with the Company's industry peers. The Company has included the second measure because it takes into account the effect of dilutive securities and, therefore, the Company believes that this is a better measure of calculating shareholder returns than book value per share.
AXIS CAPITAL HOLDINGS LIMITED
NON-GAAP FINANCIAL MEASURE RECONCILIATION
NET INCOME EXCLUDING REALIZED GAINS AND LOSSES ON INVESTMENTS,
NET OF TAX
For the quarters and years ended December 31, 2003 and 2002
(Expressed in thousands of U.S. dollars, except per share amounts)
Quarters ended Years ended
December 31, December 31,
2003 2002 2003 2002
Net income $ 160,495 $ 111,271 $ 532,350 $ 265,119
Adjustment for net
realized gains on
investments (1,378) (9,738) (22,567) (26,070)
Adjustment for associated
tax impact of net realized
gains on investments (669) 36 (616) 102
Net income excluding
realized gains on
investments, ------------ ------------ ------------ ------------
net of tax $ 158,448 $ 101,569 $ 509,167 $ 239,151
============ ============ ============ ============
Net income per
share - diluted $ 0.97 $ 0.80 $ 3.42 $ 1.91
============ ============ ============ ============
Adjustment for net
realized gains on
investments (0.01) (0.07) (0.14) (0.19)
Adjustment for
associated tax
impact of net
realized gains on
investments (0.00) 0.00 (0.00) 0.00
Net income excluding
realized gains on
investments, net of
tax per diluted ------------ ------------ ------------ ------------
share $ 0.96 $ 0.73 $ 3.28 $ 1.72
============ ============ ============ ============
Weighted average common
shares and common
share equivalents
- diluted 166,213,948 138,480,623 155,690,762 139,796,025
============ ============ ============ ============
AXIS CAPITAL HOLDINGS LIMITED
NON-GAAP FINANCIAL MEASURE RECONCILIATION
DILUTED BOOK VALUE PER SHARE
As at December 31, 2003 and December 31, 2002
(Expressed in thousands of U.S. dollars, except share
and per share amounts)
December 31, December 31,
2003 2002
Shareholders' equity $ 2,817,148 $ 1,961,033
Shares outstanding 152,474,011 138,168,520
------------- ------------
Book value per share $ 18.48 $ 14.19
============= ============
Diluted book value on an "as if
converted basis"
Shareholders' equity $ 2,817,148 $ 1,961,033
add in:
proceeds on exercise of options 62,630 58,323
proceeds on exercise of warrants 244,811 243,166
------------- ------------
Adjusted shareholders' equity $ 3,124,589 $ 2,262,522
------------- ------------
As if converted diluted shares outstanding
Shares outstanding 152,474,011 138,168,520
add in:
vesting of restricted stock 1,884,696 -
exercise of options 4,695,512 4,475,512
exercise of warrants 19,690,692 19,453,304
------------- ------------
Diluted shares outstanding 178,744,911 162,097,336
------------- ------------
------------- ------------
Diluted book value per share $ 17.48 $ 13.96
============= ============
In the fourth quarter of 2003, the Company adopted, prospectively, the fair value recognition provisions of SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System 123 "Accounting for Stock-Based Compensation", for all stock-based employee compensation granted, modified mod·i·fy v. mod·i·fied, mod·i·fy·ing, mod·i·fies v.tr. 1. To change in form or character; alter. 2. or settled after January January: see month. 1, 2003. In addition, with respect to unvested restricted stock awards, the amount of deferred compensation is eliminated from share capital and additional paid-in-capital. This charge impacts the calculation of "Book value per share" but has no impact on the calculation of "Diluted book value per share". |
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion