If you look at our consolidated segment income statement on Page 12 and 35 in our investor supplement, you’ll see that we present, still, a Validus Re consolidated income statement, which is the summation of Validus Re sub-segment and the AlphaCat sub-segment. This is because when we prepare consolidated Validus Re financial statements, these segments are consolidated within the Validus Re legal entity.
For those of you who wish to measure financial models, you can break what you used to have as Validus Re into these two constituent parts. For those of you who prefer to analyze their business just on Validus Re and Talbot segments, we still provide you with the means to do so. You can call this Validus Re classic. However, effective with the second quarter, we’ll be consolidated PaCRe into the AlphaCat sub-segment, which will add substantially to the (inaudible) AlphaCat. So any work done on your models in advance for second quarter earnings will presumably be well worth it.
For this quarter the main earnings drivers for the AlphaCat segment are fees generated from this activities managing third party capital and the 22.3% equity method income in AlphaCat Re 2011’s earnings. To analyze this component, you’d need to use the 100% AlphaCat Re 2011 income statement. We’ve provided you with this on Page 35 of the supplement, along with the balance sheet on Page 34.
Next quarter we’ll do the same for PaCRe. You’ll need to add the unrealized investment gains or losses for PaCRe as another potentially significant source of earnings for AlphaCat. This would net of a 90% non-controlling interest in the $500 million PaCRe capital base.For those of you who want to move from modeling our company on a Validus classic basis to our new segmentation, we’ve also furnished an 8-K last evening showing the re-segmentation by quarter for all of 2011. Read the rest of this transcript for free on seekingalpha.com