Chartwell Re Corporation reports third consecutive quarter of record operating earnings.STAMFORD Stamford, town, England Stamford, town (1991 pop. 18,127), in the Parts of Kesteven, Lincolnshire, E central England, on the Welland River. It is a market town. Products include diesel engines, electrical equipment, bricks, and tiles. , Conn.--(BUSINESS WIRE)--Nov. 6, 1996--Chartwell Re Corporation ("Chartwell") (NYSE NYSE See: New York Stock Exchange : CWL CWL Catholic Women's League CWL Campus Wide Login CWL Center for Writing and Learning CWL Concealed Weapons License CWL Cardiff, Wales, United Kingdom - Cardiff-Wales (Airport Code) CWL Congestion Window Limit CWL Crying With Laughter ) reported record after-tax af·ter-tax also af·ter·tax adj. Relating to or being that which remains after payment, especially of income taxes: after-tax profits. operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. of $5,958,000 for the three months ended September September: see month. 30, 1996, excluding net realized capital gains on the sale of investments, compared with $1,262,000 for the same period last year. On a per share basis, after-tax operating income increased 82% to $0.62 per share for the three months ended September 30, 1996 compared to $0.34 per share for the same period in 1995. For the first nine months of 1996, after-tax operating income amounted to $15,938,000 compared to $3,416,000 reported for the same period in 1995. On a per share basis, after-tax operating income increased 96% to $1.78 per share from $0.91 per share for the comparable period in 1995. Net income before extraordinary items of $16,589,000 for the first nine months of 1996 is more than triple the comparable figure for 1995 and, on a per share basis, increased 54% to $1.86 for the first nine months of 1996 from $1.21 reported a year ago. Net income for the nine month period ended September 30, 1996 included an extraordinary charge of $1,874,000, or $0.21 per share, attributable to the redemption of 35% of Chartwell Re Holdings Corporation's 10 1/4% Senior Notes which occurred on April 8, 1996. The 1996 results include the effects of the December December: see month. 1995 merger (the "Merger") with Piedmont Piedmont, region, Italy Piedmont (pēd`mŏnt), Ital. Piemonte, region (1991 pop. 4,302,565), 9,807 sq mi (25,400 sq km), NW Italy, bordering on France in the west and on Switzerland in the north. Management Company Inc. and the resulting acquisition of its principal operating subsidiary 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. , The Insurance Corporation of New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of ("INSCORP") (formerly, The 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. Corporation of New York). 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. increased 105% to $196,080,000 for the first nine months of 1996 from $95,681,000 recorded for the same period in 1995. The composite 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. result (defined as 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. less losses and loss adjustment expenses and policy acquisition expenses) improved 85% to $5,082,000 for the first nine months of 1996 compared to $2,748,000 for the same period in 1995. Catastrophe Catastrophe, from the Greek Καταστροφή (katastrephein), literally means "to turn" (strephein) "downwards" (kata-). losses were insignificant in both periods. Net investment income increased 126% to $33,369,000 for the first nine months of 1996 compared to $14,743,000 reported a year ago. Service and other revenue increased 537% to $5,068,000 for the first nine months of 1996 compared to $796,000 for the comparable period in 1995, principally attributable to increases in both advisory fees and equity in the earnings of investee companies. Total revenues for the first nine months of 1996 increased 84% to $192,625,000 compared to $104,601,000 recorded for the same period in 1995. Richard Ri·chard , Joseph Henri Maurice Known as "Rocket." 1921-2000. Canadian hockey player. A right wing for the Montreal Canadiens (1942-1960), he led his team to eight Stanley Cup championships and was the first player to score 50 goals in a E. Cole, Chairman and Chief Executive Officer of Chartwell, said that, "We are pleased to report record operating earnings Operating Earnings Profits after subtracting expenses such as marketing, cost of goods sold, administration and general operating costs from revenue. Notes: Tax and interest expenses are not subtracted - operating earnings are synonymous with EBIT (earnings before for the third consecutive quarter. Chartwell is quite proud of its earnings trend given that the competition for quality business throughout 1996 has increased and pricing has softened soft·en v. soft·ened, soft·en·ing, soft·ens v.tr. 1. To make soft or softer. 2. To undermine or reduce the strength, morale, or resistance of. 3. . This positive trend is attributable to Chartwell's balanced book of business, tightly controlled catastrophe risk and loss reserve protection. We remain committed to this disciplined underwriting strategy to provide quality products and services to the broker market, and we believe that this commitment in conjunction with our ability to identify and complete strategic acquisitions such as the pending Archer Group Holdings plc transaction will lead to increased stockholder value through profitable growth. "In addition, during the third quarter, Chartwell moved to the New York Stock Exchange New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. from the Nasdaq Stock Market Nasdaq stock market The first electronic stock market listing over 5000 companies. The Nasdaq stock market comprises two separate markets, namely the Nasdaq National Market, which trades large, active securities and the Nasdaq Smallcap Market that trades emerging growth companies. . As a NYSE listed company listed company n → compañía cotizable listed company n → société cotée en Bourse listed company list n → , Chartwell will have greater access to institutional, individual and foreign investors. As a result, Chartwell's stockholders should benefit from increased liquidity, lower transaction costs Transaction Costs Costs incurred when buying or selling securities. These include brokers' commissions and spreads (the difference between the price the dealer paid for a security and the price they can sell it). and improved trading efficiencies. Finally, I am also pleased to announce that Bryan Bryan, city (1990 pop. 55,002), seat of Brazos co., E central Tex.; inc. 1872. Settled in the early 19th cent. in an area of large plantations, Bryan was long a cotton center. Kellett, Chairman of Archer, has been elected to Chartwell's Board of Directors." Stockholders' equity Stockholders' Equity The portion of the balance sheet that includes capital received from investors in exchange for stock (paid-in capital), donated capital, and retained earnings. This is equal to total assets minus liabilities, preferred stock and intangible assets. increased 39% from $152,482,000 at December 31, 1995 to $212,414,000 at September 30, 1996. GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). book value per share increased from $21.35 at June June: see month. 30, 1996 to $22.16 at September 30, 1996, but decreased from $22.23 reported at December 31, 1995 due to the decline in market value of the Company's fixed income securities portfolio resulting from the increase in market interest rates, offset by earnings for the nine month period. Chartwell's ratio of long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. to total capitalization Total capitalization The total long-term debt and all types of equity of a company that constitutes its capital structure. total capitalization See capitalization. was 24.5% as of September 30, 1996, an improvement from 38.4 % reported at December 31, 1995. The Company's Board of Directors declared a quarterly cash dividend of $0.04 per share, payable on December 4, 1996 to stockholders of record as of November November: see month. 20, 1996. Mr. Cole also noted that statutory policyholders' surplus of Chartwell Reinsurance Company increased from $188,037,000 at December 31, 1995 to an all-time all-time adj. Exceeding all others up to the present time: an all-time speed skating record. all-time Adjective Informal high of $229,946,000 at September 30, 1996. The principal reasons for the increase were the contribution by Chartwell, in the first quarter of 1996, of $20,000,000 to Chartwell Reinsurance Company's statutory surplus and the strong earnings of Chartwell Reinsurance Company's wholly-owned subsidiary, INSCORP, which increased its statutory surplus by 24% to $93,421,000 at September 30, 1996 from $75,562,000 at December 31, 1995. The combined ratio -- a measure of performance that excludes investment income -- improved to 104.1% for the third quarter of 1996 from 106.5% reported for the same period last year. For the nine month period ended September 30, 1996, the combined ratio amounted to 104.4% compared to 104.9% a year ago. Chartwell's loss ratio for the third quarter and first nine months of 1996 improved to 72.1% and 72.2%, respectively, compared to 73.1% and 73.3% recorded for the same periods in 1995. The acquisition expense ratio for the three months ended September 30, 1996 decreased to 24.1% from 24.4% for the same period in 1995; however, for the nine month period ended September 30, 1996, the acquisition expense ratio is moderately higher at 24.5% compared to 23.6% last year due to a larger component of proportional proportional values expressed as a proportion of the total number of values in a series. proportional dwarf the patient is a miniature without disproportionate reductions or enlargements of body parts. business in the first half of the year. The overhead expense ratio for the three and nine month periods ended September 30, 1996 improved to 7.9% and 7.7%, respectively, compared to 9.0% and 8.0% for the same periods in 1995. These improvements reflect the operating efficiencies of the Merger. On a pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma basis, as if the Merger occurred on January January: see month. 1, 1995, the total expense ratio (acquisition expense and overhead expense ratios) decreased to 32.2% for the first nine months of 1996 compared to 34.0% for 1995. For the nine months ended September 30, 1996, net investment income increased 126% to $33,369,000, compared to $14,743,000 for the same period last year. After-tax net investment income for the nine months ended September 30, 1996 amounted to $22,884,000 or $2.57 per share, compared to $10,017,000 or $2.67 per share in 1995. The average annual tax equivalent yield on invested assets, before investment expenses, increased to 6.78% for the first nine months of 1996 compared to 6.48% for the same period in 1995. Chartwell realized net capital gains of $1,002,000 in the first nine months of 1996 compared to $1,707,000 for the same period in 1995. The 1996 gains were realized principally to reposition certain sectors of the investment portfolio and to modify the portfolio to improve credit quality without sacrificing yield. The Company's invested asset base increased 2% to $721,497,000 at September 30, 1996 from $705,448,000 at December 31, 1995, resulting primarily from 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). provided by the public stock offering in the first half of the year, as well as continued positive cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses of $7,240,000 offset by a decline in the value of marked to market investments of $19,200,000. Finally, in a press release issued yesterday, Chartwell announced that the Recommended Cash Offer for the whole of the issued share capital of Archer Group Holdings plc ("Archer") not already owned by Chartwell Re Corporation or its subsidiaries, has been declared unconditional HEIR, UNCONDITIONAL. A term used in the civil law, adopted by the Civil Code of Louisiana. Unconditional heirs are those who inherit without any reservation, or without making an inventory, whether their acceptance be express or tacit. Civ. Code of Lo. art. 878. UNCONDITIONAL. in all respects, and that by the close of business in London London, city, Canada London, city (1991 pop. 303,165), SE Ont., Canada, on the Thames River. The site was chosen in 1792 by Governor Simcoe to be the capital of Upper Canada, but York was made capital instead. London was settled in 1826. on Tuesday Tuesday: see week. , November 5, 1996, Chartwell Holdings Limited had received valid acceptances in respect of, or had acquired, Archer ordinary shares representing, in aggregate, approximately 93.5% of Archer's issued share capital. The pending acquisition (the "Acquisition") is progressing on schedule, and the transaction is expected to close by the end of the month. On a pro forma basis, combining the 1996 premium capacity managed by Archer of over $600 million with the approximately $200 million of premium capacity of New London New London, city (1990 pop. 24,540), New London co., SE Conn., on the Thames River near its mouth on Long Island Sound; laid out 1646 by John Winthrop, inc. 1784. Capital plc, which is advised by Chartwell Advisers Limited, and Chartwell's own consolidated premiums written of over $200 million, total annual premiums managed, written or advised by Chartwell now exceeds $1.0 billion. Pro forma financial statements Pro forma financial statements A firm's financial statements as adjusted to reflect a projected or planned transaction. "What-if" analysis. reflecting the effect of the Acquisition on Chartwell's Statement of Operations See Income statement. and Balance Sheet for the period ending September 30, 1996 are presented later in this press release. Chartwell Re Corporation conducts business principally through its three wholly-owned subsidiaries, Chartwell Reinsurance Company, INSCORP and Chartwell Advisers Limited. Chartwell Reinsurance Company writes property and casualty reinsurance for specialty, regional and global ceding cede tr.v. ced·ed, ced·ing, cedes 1. To surrender possession of, especially by treaty. See Synonyms at relinquish. 2. companies. INSCORP writes property and casualty insurance for specialty program administrators. Chartwell Reinsurance Company and INSCORP are rated A (Excellent) and A- (Excellent), respectively, by A.M. Best Company and are 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. an A- claims paying ability rating by Standard & Poor's. Chartwell Advisers Limited provides advisory services advisory services advisory services provided to the public, in their capacity as owners and managers of animals, are an important part of veterinary science. They may be provided by government bureaux, by commercial companies who deal in pharmaceuticals or animals or animal to New London Capital plc, a publicly traded company publicly traded company A company whose shares of common stock are held by the public and are available for purchase by investors. The shares of publicly traded firms are bought and sold on the organized exchanges or in the over-the-counter market. which provides capital to select syndicates at Lloyd's of London Not to be confused with Lloyds Bank or Lloyd's Register. Lloyd's of London is a British insurance market. It serves as a meeting place where multiple financial backers or “members”, whether individuals (traditionally known as . -0-
Following is a comparative table for the third quarter
(dollars in thousands):
Three Month Periods Nine Month Periods
Ended September 30, Ended September 30,
1996 1995 (1) 1996 1995(1)
---- -------- ---- -------
Gross Premiums Written $63,613 $29,553 $196,080 $95,681
======= ======= ======== =======
Net Premiums Written $45,237 $28,095 $140,960 $92,376
======= ======= ======== =======
REVENUES:
Premiums earned $47,982 $25,988 $153,186 $87,355
Net investment income 11,791 5,375 33,369 14,743
Net realized capital gains 81 304 1,002 1,707
Service and other revenue 1,842 265 5,068 796
----- --- ----- ---
Total revenue 61,696 31,932 192,625 104,601
------ ------ ------- -------
LOSSES AND EXPENSES INCURRED:
Loss and loss adjustment
expenses 34,579 18,899 110,593 63,712
Policy acquisition costs 11,566 6,353 37,511 20,598
Other expenses 4,697 2,644 13,659 7,846
Interest and amortization 2,253 1,996 7,456 5,750
----- ----- ----- -----
Total losses and expenses
incurred 53,095 29,892 169,219 97,906
------ ------ ------- ------
Income before income taxes
and extraordinary item 8,601 2,040 23,406 6,695
Income tax expense 2,590 577 6,817 2,152
Net income before extraordinary
item 6,011 1,463 16,589 4,543
Extraordinary item, net of
income tax 0 0 (1,874) 0
------ ------ ------ ------
Net income $6,011 $1,463 $14,715 $4,543
====== ====== ======= ======
Per Share Data:
Net income before extraordinary
item $0.63 $0.39 $1.86 $1.21
Extraordinary item, net of
income tax (0.21)
----- ----- ----- -----
Net income per common share $0.63 $0.39 $1.65 $1.21
===== ===== ===== =====
Weighted average shares
outstanding 9,583,811 3,755,312 8,914,552 3,755,312
Cash flow from operations ($198) $7,170 $7,240 $21,438
===== ====== ====== =======
GAAP Combined Ratio:
Loss and loss adjustment
expenses 72.1% 73.1% 72.2% 73.3%
Policy acquisition costs 24.1% 24.4% 24.5% 23.6%
Other expenses (2) 7.9% 9.0% 7.7% 8.0%
----- ----- ----- -----
GAAP Combined Ratio 104.1% 106.5% 104.4% 104.9%
===== ===== ===== =====
(1) Includes the results of Chartwell prior to the merger with
Piedmont Management Company Inc. because the transaction occurred
in December 1995.
(2) Excludes expenses related to non-underwriting operations.
Balance Sheet information (dollars in thousands):
September 30, December 31,
1996 1995
------------- -----------
Total investments and cash $721,497 $705,448
Total assets 1,184,624 1,132,838
Reserves for loss and loss
adjustment expense 736,267 741,467
Long-term debt 68,750 95,000
Common stockholders' equity 212,414 152,482
Book value per common share 22.16 22.23
Statutory policyholders' surplus:
Chartwell Reinsurance Company 229,946 188,037
The Insurance Corporation of New York $93,421 $75,562
PRO FORMA FINANCIAL INFORMATION
The following condensed consolidated pro forma balance sheet at
September 30, 1996 and condensed consolidated pro forma statement of
operations for the nine months ended September 30, 1996 reflect the
financial position and results of operations of Chartwell after
giving effect to the Acquisition of Archer, the issuance of 2,725,000
common shares and the related redemption of 35% of the $75,000,000
principal amount of Senior Notes due 2004 which occurred in April
1996 as described in the notes hereto. These pro forma statements
should be read in conjunction with the historical financial
statements of Chartwell and the notes thereto. The condensed
consolidated pro forma information is not necessarily indicative of
the results of operations or financial position of Chartwell that
would have been reported if the Acquisition and related transactions
had occurred at the dates assumed for purposes of preparation of such
information or of the future results of operations or financial
position of Chartwell. The format of the income statement below has
been changed from that presented in Chartwell's historical financial
statements to segment the Underwriting, Service and Corporate
operations. This segmentation highlights the increasing importance
of the Service segment following the Archer acquisition.
Condensed Consolidated Pro Forma Balance Sheet (Unaudited)
September 30, 1996
(Dollars in Thousands)
Historical Historical Pro forma Pro forma
Chartwell Archer Adjustments Chartwell
---------- --------- ----------- ---------
ASSETS:
Investments ...............$ 650,265 $ 3,644 $ (25,658)(1) $ 628,251
Cash and cash equivalents.. 71,232 8,708 (7,153)(2) 72,787
--------- ---------- ---------- ----------
Investments and cash ... 721,497 12,352 (32,811) 701,038
--------- ---------- ---------- ----------
Premiums in process of
collection ............ 97,057 97,057
Reinsurance recoverable ... 191,976 191,976
Accounts receivable ....... 31,644 25,758 (4) 34,115
(23,287)(2)
Prepaid reinsurance ....... 23,915 23,915
Deferred and current
income taxes ........... 51,976 159 (4,040)(6) 48,095
Deferred policy acquisition
costs .................. 18,333 18,333
Deposits .................. 18,221 18,221
Goodwill .................. 49,737 (3) 49,737
Other assets .............. 61,649 2,899 64,548
--------- ---------- ---------- ----------
Total assets ...........$1,184,624 $ 47,054 $ 15,357 $1,247,035
============ ========== ========== ==========
LIABILITIES:
Loss and loss adjustment
expenses ...............$ 736,267 $ -- $ -- $ 736,267
Unearned premiums ......... 85,117 85,117
Contingent interest notes . 27,011 27,011
Other reinsurance balances. 26,152 26,152
Accounts payable .......... 44,555 (30,441)(2) 14,114
Accrued expenses and other
liabilities ............ 28,913 10 13,517(5) 42,440
Loan notes ................ 8,815(1)(7) 8,815
Long term debt ............ 68,750 25,955(1) 94,705
--------- --------- ---------- ----------
Total liabilities....... 972,210 44,565 17,846 1,034,621
--------- --------- ---------- ----------
COMMON STOCKHOLDERS' EQUITY:
Common stock .............. 96 582 (582)(1) 96
Additional paid-in capital. 211,781 4,241 4,241 (1) 211,781
Net unrealized appreciation
(depreciation)........ (7,340) (7,340)
Foreign currency translation
adjustment............ 48 48
Retained earnings (deficit) 7,829 (2,334) 2,334 (1) 7,829
--------- --------- ---------- ----------
Total common stockholders'
equity............... 212,414 2,489 (2,489) 212,414
--------- --------- ---------- ----------
Total liabilities and
stockholders'equity..$1,184,624 $ 47,054 $ 15,357 $1,247,035
========== ========= ========= ==========
See notes to unaudited condensed consolidated
pro forma financial statements.
Condensed Consolidated Pro Forma Statement of Operations (Unaudited)
For the nine months ended September 30, 1996
(Dollars in Thousands, except per share amounts)
Adjusted Historical Pro Forma Pro Forma
Chartwell(8) Archer Adjustments Chartwell
---------- ----------- ----------- ---------
UNDERWRITING OPERATIONS:
Premiums earned $153,186 $153,186
Net investment income 32,590 ($1,299)(9) 31,291
Net realized capital gains 951 951
Total revenues 186,727 (1,299) 185,428
---------- ----------- ----------- ---------
Loss and loss adjustment
expenses 110,593 110,593
Policy acquisition costs 37,511 37,511
Operating expenses 12,039 12,039
Amortization of goodwill 99 99
---------- ----------- ----------- ---------
Total expenses 160,242 160,242
---------- ----------- ----------- ---------
Underwriting income
before taxes 26,485 (1,299) 25,186
---------- ----------- ----------- ---------
SERVICE OPERATIONS:
Service and other revenue 5,068 12,052 9,013 (10) 25,172
(960)(11)
Net investment income 5 250 255
---------- ----------- ----------- ---------
Total revenues 5,073 12,302 8,053 25,427
Operating expenses 777 13,550 1,751 (10) 13,449
(2,628)(11)
Amortization of goodwill 1,492 (12) 1,492
---------- ----------- ----------- ---------
Total expenses 777 13,550 614 14,941
---------- ----------- ----------- ---------
Service income before
taxes 4,296 (1,248) 7,438 10,486
---------- ----------- ----------- ---------
CORPORATE:
Net investment income 775 775
Net realized capital gains 51 51
---------- ----------- ----------- ---------
Total revenues 826 826
---------- ----------- ----------- ---------
Operating expenses 843 843
Interest expense 6,595 397(13) 8,354
1,363(14)
---------- ----------- ----------- ---------
Total expenses 7,438 1,759 9,197
---------- ----------- ----------- ---------
Corporate income (loss)
before taxes (6,612) (1,759) (8,371)
---------- ----------- ----------- ---------
Consolidated income
before taxes 24,168 (1,248) 4,380 27,300
---------- ----------- ----------- ---------
Income taxes 7,084 1,526 8,610
---------- ----------- ----------- ---------
Net income before
extraordinary items $ 17,084 $(1,248) $ 2,854 $ 18,690
========== =========== ========== =========
Net income per
common share $1.78 $1.95
========== ==========
Return on average equity 10.6% 11.6%
=========== ==========
Weighted average number
of common shares
outstanding (15) 9,583,811 9,583,811
========== ==========
See notes to unaudited condensed consolidated
pro forma financial statements.
NOTES TO CONDENSED con·dense v. con·densed, con·dens·ing, con·dens·es v.tr. 1. To reduce the volume or compass of. 2. To make more concise; abridge or shorten. 3. Physics a. CONSOLIDATED PRO FORMA FINANCIAL STATEMENTS (UNAUDITED) The condensed consolidated pro forma financial statements reflect the Acquisition of Archer by Chartwell. Pro forma adjustments related to the condensed consolidated pro forma statement Pro forma statement A financial statement showing the forecast or projected operating results and balance sheet, as in pro forma income statements, balance sheets, and statements of cash flows. of operations have been prepared assuming the Acquisition was consummated con·sum·mate tr.v. con·sum·mat·ed, con·sum·mat·ing, con·sum·mates 1. a. To bring to completion or fruition; conclude: consummate a business transaction. b. on January 1, 1996. The condensed consolidated pro forma balance sheet was prepared assuming the Acquisition and related transactions were consummated on September 30, 1996. The historical financial information has been derived from the historical financial statements of Chartwell and Archer. The condensed consolidated pro forma financial statements should be read in conjunction with the historical consolidated financial statements Consolidated Financial Statements The combined financial statements of a parent company and its subsidiaries. Notes: Because consolidated financial statements present an aggregated look at the financial position of a parent and its subsidiaries, they enable you to gauge of Chartwell and the notes thereto there·to adv. 1. To that, this, or it. 2. Archaic In addition to that; furthermore. thereto Adverb Formal 1. to that or it 2. . The historical financial information of Archer was obtained from the internal financial statements for the nine months ended June 30, 1996. All amounts in Pounds Sterling were translated to U.S. Dollars at an exchange rate of $1.59. Archer's historical financial information is prepared on a U.K GAAP basis and certain adjustments to reconcile to U.S. GAAP are shown below. The condensed consolidated pro forma financial statements have been prepared under the purchase method of accounting for the Acquisition of Archer. Under purchase accounting, the acquired assets and liabilities of Archer are recognized at their fair value at the time of the Acquisition. The purchase price of Archer is assumed to be $60.4 million and to consist of $25.6 million in cash, $8.8 million in loan notes and $26.0 million of bank debt. The actual amounts of the components of the purchase price will vary depending on the amount of loan notes issued. The condensed consolidated pro forma financial statements do not purport To convey, imply, or profess; to have an appearance or effect. The purport of an instrument generally refers to its facial appearance or import, as distinguished from the tenor of an instrument, which means an exact copy or duplicate. PURPORT, pleading. to be indicative of the financial position or operating results which would have been achieved had the Acquisition been consummated as of the dates indicated and should not be construed as being representative of future financial position or operating results. The pro forma adjustments are based upon available information and assumptions that Chartwell believes are reasonable under the circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or . 1) To reflect the purchase of Archer which is assumed to be funded by a cash contribution from Chartwell, a loan from First Union Bank and the issuance of loan notes in the amounts stated above. 2) To eliminate the Intermediary Intermediary See: Financial intermediary intermediary See financial intermediary. Assets and Liabilities which have been included in Archer's historical balance sheet but should not be included on the balance sheet under U.S. GAAP. 3) The excess of the assumed purchase price over the net assets Net assets The difference between total assets on the one hand and current liabilities and noncapitalized long-term liabilities on the other hand. net assets See owners' equity. of Archer acquired would result in goodwill of approximately $49.7 million. The goodwill will be amortized over 25 years. 4) To accrue To increase; to augment; to come to by way of increase; to be added as an increase, profit, or damage. Acquired; falling due; made or executed; matured; occurred; received; vested; was created; was incurred. the estimated profit commission receivable, after deducting staff bonus entitlements of 20% payable, on a U.S. GAAP basis for the profits which have been earned but not yet received or recorded in the historical financial statements of Archer 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 U.K. accounting principles. 5) To accrue Archer's share of the "Pomeroy Pomeroy may refer to:
6) To reflect the deferred tax effect of the above transactions at the U.K. statutory rate of 33%. 7) Represents the estimated amount of loan notes assumed to be issued. The actual amount depends on the number of current shareholders who elect to receive loan notes in lieu of Instead of; in place of; in substitution of. It does not mean in addition to. cash for their shares. 8) Reflects the historical income statement of Chartwell for the nine months ended September 30, 1996 adjusted for the issuance of 2,725,000 common shares and the redemption of 35% of the $75,000,000 principal amount Senior Notes due 2004 which occurred in March 1996. A reconciliation of the pro forma net income is as follows (in thousands): Net income $14,715 Add extraordinary item 1,874 ------- Income before extraordinary item 16,589 ------- Decrease in interest expense, net of tax 495 Pro forma net income $17,084 ======= 9) To reflect the foregone fore·gone v. Past participle of forego1. adj. Having gone before; previous. Usage Note: The word foregone has recently developed a new meaning as a truncation of the phrase investment income on the cash assumed to be contributed from Chartwell using an estimated return of 6.75%. 10) To record an estimate of the profit commissions earned after deducting staff bonus entitlements of 20% payable on open underwriting years which have not been recorded by Archer in the historical financial statements. The commissions are based on a reasonable estimate of the syndicate Syndicate organized crime unit throughout major cities of the United States. [Am. Hist.: NCE, 2018] See : Gangsterism profits which would have been earned under U.S. GAAP revenue recognition criteria for the period. 11) To eliminate the revenues and expenses of certain Archer subsidiaries whose operations were sold in 1996. 12) To record amortization of the goodwill assumed to be generated from the transaction over a 25 year period. 13) To record interest on the loan notes at an estimated interest rate of 6.0% per annum Per annum Yearly. . 14) To record interest expense on the First Union loan at an estimated interest rate of 7.0% per annum. 15) The weighted average number common shares outstanding assumes the issuance of 2,725,000 common shares occurred on the first day of the period presented. CONTACT: Chartwell Re Corp. Steven J. Bensinger, President, 203/705-2520 Nancy B. Saltzman, Assistant Vice President, Investor Relations Investor relations The process by which the corporation communicates with its investors. , 203/705-2532. |
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