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AMERICAN RE REPORTS NET OPERATING INCOME OF $.47 PER SHARE BEFORE AN EXTRAORDINARY CHARGE, ON 47.7 PERCENT INCREASE IN GROSS PREMIUMS

 PRINCETON, N.J., May 11 /PRNewswire/ -- American Re Corporation (ARC) (NYSE: ARN) reported a first quarter net loss of $5.1 million or $.11 per share after realized capital losses and an extraordinary charge. Realized capital losses, net of tax, were $717,000 or a loss of $.01 per share. As expected, there was an extraordinary non-cash charge, net of tax, of $24.8 million or $.55 per share for the quarter due to the write-off of capitalized financing fees related to ARC's predecessor bank credit facility which was repaid as part of its January 1993 initial public offering and capital enhancement program. Net income excluding realized capital losses and the extraordinary charge was $21.3 million or $.47 per share. Per share amounts were computed using 45.2 million shares outstanding on a weighted average basis during the first quarter 1993.
 Statutory gross premiums written by ARC's reinsurance subsidiary, American Re-Insurance, increased 47.7 percent to $434.4 million for the first quarter 1993, and net premiums written increased 30.7 percent to $327.7 million. American Re-Insurance's statutory combined ratio improved to 100.4 percent in the first quarter 1993, compared to 100.7 percent in the first quarter 1992. Losses from the World Trade Center bombing and the March winter storm were immaterial to first quarter 1993 results.
 According to Edward B. Jobe, Chairman and Chief Executive Officer, "The January treaty renewal period was the most active in recent memory, as can be seen by the growth in gross premium writings and the attractive combined ratio. We are very pleased with the solid results being produced at the operating company level."
 At March 31, 1993, ARC's consolidated total assets were $6.1 billion and consolidated stockholders' equity totaled $696.2 million. Statutory surplus of the reinsurance subsidiary, American Re-Insurance, was $1.004 billion at March 31, 1993.
 ARC is, through its wholly-owned subsidiary, American Re-Insurance, a direct writer of treaty and facultative reinsurance and related services, with approximately 1,200 employees in 13 domestic and 13 international offices.
 Pro Forma Results and Financial Condition
 The following pro forma results of ARC are provided for comparison purposes. They assume that ARC's acquisition of American Re-Insurance, initial public stock offering, and capital enhancement program took place on January 1 of the respective years (that is, on January 1, 1992, in the case of pro forma results for 1992, and on January 1, 1993, in the case of pro forma results for 1993).
 Pro forma net income for the first quarter 1993 would have been $23.6 million or $.48 per share, an increase of over 35 percent compared with pro forma net income of $17.4 million or $.35 per share for the first quarter 1992. Realized capital losses would have been $717,000 or $.01 per share, compared to realized capital gains for the first quarter 1992 of $199,000 or less than $.01 per share. Pro forma per share amounts were computed using 49.4 million shares outstanding on a weighted average basis for both the first quarter 1992 and 1993.
 AMERICAN RE CORPORATION
 MARCH 31, 1993 FINANCIAL HIGHLIGHTS
 (Dollars in millions, except per share data)
 Three month period ended March 31,
 CONSOLIDATED STATEMENT OF INCOME: Reported Pro Forma Pro Forma
 1993 1993 1992
 Revenue:
 Gross premiums written $ 440.4 $ 440.4 $ 299.5
 Net premiums written 360.4 360.4 253.4
 Net premiums earned (net of premiums
 ceded of $87.0 for March 31, 1993) 289.7 289.7 208.5
 Net investment income 44.8 44.8 48.3
 Realized capital gains (losses) (1.3) (1.3) 0.1
 Other income 6.0 6.0 3.6
 Total revenue 339.1 339.1 260.5
 Losses and expenses:
 Loss & loss adjustment expenses
 (net of reinsurance recoveries of
 $74.0 for March 31,1993) 187.0 187.0 143.3
 Underwriting expenses 103.0 103.0 70.4
 Interest expense 20.0 15.5 16.1
 Other expenses 2.8 2.8 10.4
 Total losses and expenses 312.9 308.3 240.2
 Income before income taxes 26.2 30.8 20.3
 Federal & foreign income taxes 5.6 7.2 2.9
 Income before extraordinary loss and
 paid-in-kind preferred dividend 20.6 23.6 17.4
 Extraordinary loss on early
 extinguishment of debt,
 net of tax of $12.8 (24.8) --- ---
 Net income (loss) before
 preferred dividend (4.2) 23.6 17.4
 Paid-in-kind preferred dividend 0.9 --- ---
 Net income (loss) to common
 stockholders $(5.1) $23.6 $17.4
 Earnings per share and common
 stock equivalents:
 Weighted average shares and common
 stock equivalents outstanding 45,227,529 49,383,919 49,383,919
 Primary earnings (loss) per share:
 Operating, excluding realized
 capital (losses) $0.47 $0.49 $0.35
 Realized capital gains (losses),
 net of tax (0.01) (0.01) ---
 Income before extraordinary loss 0.46 0.48 0.35
 Extraordinary loss, net of applicable
 income tax effects (0.55) --- ---
 Net income (loss) before
 preferred dividend (0.09) 0.48 0.35
 Paid-in-kind preferred dividend (0.02) --- ---
 Net income (loss) per common share $(0.11) $0.48 $0.35
 CASH FLOW DATA:
 Cash used in operations $(14.9) --- ---
 MARCH 31,1993 FINANCIAL HIGHLIGHTS
 (Dollars in millions)
 Three month period ended March 31 1993 1992
 Statutory combined ratio (percent): 100.4 100.7
 BALANCE SHEET DATA: March 31, 1993 Dec. 31, 1992
 Cash and invested assets $2,884.6 $2,833.8
 Long-term debt 775.0 1,025.0
 Stockholders' equity 696.2 386.3
 American Re-Insurance Company's
 statutory surplus 1,004.4 875.8
 Note: For American Re Corporation, comparisons to dates and periods prior to October 1, 1992 are pro forma, since American Re Corporation did not purchase American Re-Insurance Company until September 30, 1992. Pro forma data reflect adjustments necessary to give effect to the Capital Enhancement Program transactions entered into in connection with the initial public offering that occurred on January 29, 1993, and the subsequent pay down of $100 million in bank debt that occurred on February 23, 1993, as if those transactions had occurred on January 1 of the respective year (i.e., on January 1, 1992 in the case of 1992 pro forma data and on January 1, 1993 in the case of 1993 pro forma data.)
 /delval/
 -0- 5/11/93
 /CONTACT: James R. Fisher, 609-243-4602, or Thomas H. Walker Jr., 609-243-4679, both of ARC/
 (ARN)


CO: American Re Corporation; American Re-Insurance Company ST: New Jersey IN: INS SU: ERN

CC -- PH032 -- 7307 05/11/93 19:24 EDT
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Date:May 11, 1993
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