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TheStreet Open House

Arch Capital Group Ltd. Reports 2012 Third Quarter Results

Stock quotes in this article: ACGL

The following table summarizes, on an after-tax basis, the Company’s consolidated financial data, including a reconciliation of after-tax operating income available to common shareholders to net income available to common shareholders and related diluted per share results:

       
Three Months Ended Nine Months Ended
September 30, September 30,
(U.S. dollars in thousands, except share data) 2012     2011   2012     2011  
 
After-tax operating income available to common
shareholders $ 120,247 $ 107,176 $ 375,307 $ 174,491
Net realized gains, net of tax 58,904 28,458 133,052 94,842
Net impairment losses recognized in earnings, net of tax (2,379 ) (2,739 ) (5,353 ) (7,103 )
Equity in net income (loss) of investment funds
accounted for using the equity method, net of tax 24,330 (30,549 ) 56,943 5,097
Net foreign exchange (losses) gains, net of tax   (16,930 )   59,948     (5,363 )   4,121  
Net income available to common shareholders $ 184,172   $ 162,294   $ 554,586   $ 271,448  
 
Diluted per common share results:
After-tax operating income available to common
shareholders $ 0.87 $ 0.78 $ 2.72 $ 1.26
Net realized gains, net of tax 0.42 0.21 0.96 0.68
Net impairment losses recognized in earnings, net of tax (0.02 ) (0.02 ) (0.04 ) (0.05 )
Equity in net income (loss) of investment funds
accounted for using the equity method, net of tax 0.18 (0.22 ) 0.41 0.04
Net foreign exchange (losses) gains, net of tax   (0.12 )   0.43     (0.04 )   0.03  
Net income available to common shareholders $ 1.33   $ 1.18   $ 4.01   $ 1.96  
 
Weighted average common shares and common
share equivalents outstanding – diluted 138,696,934 137,140,929 138,235,995 138,542,558
 

The Company’s investment portfolio continues to be comprised primarily of high quality fixed income securities with an average credit quality of “AA/Aa2.” The average effective duration of the investment portfolio was 2.90 years at September 30, 2012, compared to 3.01 years at June 30, 2012 and 2.99 years at December 31, 2011. Including the effects of foreign exchange, total return on the Company’s investment portfolio was a positive 2.45% for the 2012 third quarter, compared to a negative 0.23% for the 2011 third quarter. Excluding the effects of foreign exchange, total return was a positive 2.17% for the 2012 third quarter, compared to a positive 0.38% for the 2011 third quarter.

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