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Alterra Capital Reports Third Quarter 2012 Results

Stock quotes in this article: ALTE

Non-GAAP Financial Measures

In presenting Alterra’s results, management has included and discussed net operating income, net operating income per diluted share, annualized net operating return on average shareholders’ equity and diluted tangible book value per share. These measures are “non-GAAP financial measures” as defined in Regulation G. Management believes that these non-GAAP financial measures, which may be defined differently by other companies, allow for a more complete understanding of Alterra’s business. These measures, however, should not be viewed as a substitute for measures determined in accordance with U.S. GAAP. The reconciliation of these measures to their respective most directly comparable U.S. GAAP financial measures is presented in the attached financial information in accordance with Regulation G.

Cautionary Note Regarding Forward-Looking Statements

This release includes forward-looking statements that reflect Alterra’s current views with respect to future events and financial performance. In particular, statements regarding future rate movements are forward looking statements. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those suggested by such statements. For further information regarding cautionary statements and factors affecting Alterra’s future results, please refer to the most recent reports on Form 10-K and Form 10-Q and other documents filed by Alterra with the SEC. Alterra undertakes no obligation to update or revise publicly any forward-looking statement whether as a result of new information, future developments or otherwise.

ALTERRA CAPITAL HOLDINGS LIMITED

 

CONSOLIDATED BALANCE SHEETS

(Expressed in thousands of United States Dollars, except per share and share amounts)

   
September 30, 2012 December 31, 2011
(Unaudited)
ASSETS
Cash and cash equivalents $ 405,809 $ 469,477
Fixed maturities, trading, at fair value 376,498 229,206
Fixed maturities, available for sale, at fair value 5,728,640 5,501,925
Fixed maturities, held to maturity, at amortized cost (fair value $1,032,100) 837,348 874,259
Other investments 376,870 286,515
Restricted cash and cash equivalents 245,747 453,367
Accrued interest income 65,236 71,322
Premiums receivable 872,948 715,154
Losses and benefits recoverable from reinsurers 1,149,684 1,068,119
Deferred acquisition costs 166,128 145,850
Prepaid reinsurance premiums 303,171 212,238
Trades pending settlement 77,802 22,887
Goodwill and intangible assets 55,371 56,111
Other assets 72,758 79,417
   
Total assets $ 10,734,010   $ 10,185,847
 
LIABILITIES
Property and casualty losses $ 4,460,045 $ 4,216,538
Life and annuity benefits 1,148,317 1,190,697
Deposit liabilities 139,518 151,035
Funds withheld from reinsurers 93,190 112,469
Unearned property and casualty premiums 1,192,203 1,020,639
Reinsurance balances payable 214,202 134,354
Accounts payable and accrued expenses 93,810 110,380
Trades pending settlement 29,022
Senior notes 440,527 440,500
   
Total liabilities 7,810,834   7,376,612
 
SHAREHOLDERS’ EQUITY
Common shares (par value $1.00 per share);95,985,461 (2011—102,101,950) shares issued and outstanding 95,985 102,102
Additional paid-in capital 1,715,748 1,847,034
Accumulated other comprehensive income 265,232 166,957
Retained earnings 846,211 693,142
   
Total shareholders’ equity 2,923,176   2,809,235
 
Total liabilities and shareholders’ equity $ 10,734,010   $ 10,185,847
 
Book value per share $ 30.45   $ 27.51
 
Diluted book value per share $ 29.57   $ 26.91
 
Diluted tangible book value per share [a] $ 29.01   $ 26.37
 
Diluted shares outstanding 98,850,961 104,406,779
 

[a] Non-GAAP financial measure as defined by Regulation G.

 

ALTERRA CAPITAL HOLDINGS LIMITED

 

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (Unaudited)

(Expressed in thousands of United States Dollars, except per share and share amounts)

   

Three Months Ended September 30,

Nine Months Ended September 30,

2012

 

2011

2012

 

2011

REVENUES
Gross premiums written $ 386,228 $ 386,328 $ 1,614,415 $ 1,578,083
Reinsurance premiums ceded (123,477 ) (90,891 ) (537,818 ) (364,874 )
Net premiums written $ 262,751   $ 295,437   $ 1,076,597   $ 1,213,209  
 
Earned premiums $ 483,222 $ 452,931 $ 1,457,928 $ 1,385,201
Earned premiums ceded (150,584 ) (105,889 ) (436,337 ) (309,331 )
Net premiums earned 332,638 347,042 1,021,591 1,075,870
 
Net investment income 53,518 60,335 166,925 177,766
Net realized and unrealized gains (losses) on investments 20,436 (7,972 ) 59,410 (32,564 )
 
Total other-than-temporary impairment losses (522 ) (692 ) (6,409 ) (2,003 )
Portion of loss recognized in other comprehensive income (loss), before taxes (70 ) (169 ) (122 ) (240 )
Net impairment losses recognized in earnings (592 ) (861 ) (6,531 ) (2,243 )
 
Other income 1,586 1,473 8,876 3,379
       
Total revenues 407,586   400,017   1,250,271   1,222,208  
 
LOSSES AND EXPENSES
Net losses and loss expenses 228,529 198,521 631,322 714,060
Claims and policy benefits 11,838 14,538 38,576 44,818
Acquisition costs 61,923 61,434 183,818 196,722
Interest expense 9,026 11,303 27,289 30,392
Net foreign exchange (gains) losses (82 ) (147 ) (89 ) 2,065
General and administrative expenses 57,515 61,555 176,374 202,417
       
Total losses and expenses 368,749   347,204   1,057,290   1,190,474  
 
INCOME BEFORE TAXES 38,837 52,813 192,981 31,734
 
Income tax expense (benefit) 1,185   4,427   (2,635 ) (2,600 )
 
NET INCOME 37,652 48,386 195,616 34,334
 
Holding gains on available for sale securities arising in period [a] 57,314 66,329 117,251 97,610
Net realized gains on available for sale securities included in net income [a] (3,083 ) (4,958 ) (22,809 ) (8,076 )
Portion of other-than-temporary impairment losses recognized in other comprehensive income [a] 70 169 122 240
Foreign currency translation adjustment 8,702   (20,733 ) 3,711   (15,695 )
Other comprehensive income 63,003 40,807 98,275 74,079
       
COMPREHENSIVE INCOME $ 100,655   $ 89,193   $ 293,891   $ 108,413  
 
Net income per share $ 0.39   $ 0.46   $ 1.98   $ 0.32  
Net income per diluted share $ 0.38   $ 0.46   $ 1.93   $ 0.32  
Net operating income per diluted share [b] $ 0.33   $ 0.47   $ 1.67   $ 0.61  
 
Weighted average common shares outstanding—basic 95,791,466   104,830,300   98,785,999   105,866,771  
Weighted average common shares outstanding—diluted 98,610,267   105,665,282   101,252,927   107,092,882  
 

[a] Net of tax.

[b] Non-GAAP financial measure as defined by Regulation G.

 

ALTERRA CAPITAL HOLDINGS LIMITED

 

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Unaudited)

(Expressed in thousands of United States Dollars)

 
Nine Months Ended September 30,

2012

 

2011

Common shares
Balance, beginning of period $ 102,102 $ 110,963
Issuance of common shares, net 765 1,384
Repurchase of shares (6,882 ) (8,023 )
Balance, end of period 95,985   104,324  
 
Additional paid-in capital
Balance, beginning of period 1,847,034 2,026,045
Issuance of common shares, net 2,483 632
Stock based compensation expense 18,005 28,014
Repurchase of shares (151,774 ) (163,928 )
Balance, end of period 1,715,748   1,890,763  
 
Accumulated other comprehensive income
Unrealized holdings gains on investments:
Balance, beginning of period 204,301 118,197
Holding gains on available for sale fixed maturities arising in period, net of tax 117,251 97,610
Net realized gains on available for sale securities included in net income, net of tax (22,809 ) (8,076 )
Portion of other-than-temporary impairment losses recognized in other comprehensive income, net of tax 122   240  
Balance, end of period 298,865   207,971  
Cumulative foreign currency translation adjustment:
Balance, beginning of period (37,344 ) (19,251 )
Foreign currency translation adjustment 3,711   (15,695 )
Balance, end of period (33,633 ) (34,946 )
Total accumulated other comprehensive income, end of period 265,232   173,025  
 
Retained earnings
Balance, beginning of period 693,142 682,316
Net income 195,616 34,334
Dividends (42,547 ) (40,024 )
Balance, end of period 846,211   676,626  
 
Total shareholders’ equity $ 2,923,176   $ 2,844,738  
 

ALTERRA CAPITAL HOLDINGS LIMITED

 

CONSOLIDATED STATEMENTS OF CASHFLOWS (Unaudited)

(Expressed in thousands of United States Dollars)

 
Nine Months Ended September 30,

 

2012

 

2011

OPERATING ACTIVITIES
Net income $ 195,616 $ 34,334
Adjustments to reconcile net income to net cash provided by operating activities:
Stock based compensation 18,005 28,014
Amortization of premium on fixed maturities 23,282 15,383
Accretion of deposit liabilities 2,430 4,245
Net realized and unrealized (gains) losses on investments (59,410 ) 32,564
Net impairment losses recognized in earnings 6,531 2,243
Changes in:
Accrued interest income 6,127 4,370
Premiums receivable (154,967 ) (188,751 )
Losses and benefits recoverable from reinsurers (77,861 ) (123,268 )
Deferred acquisition costs (19,764 ) (54,495 )
Prepaid reinsurance premiums (90,053 ) (65,156 )
Other assets (513 ) 5,652
Property and casualty losses 231,665 293,119
Life and annuity benefits (35,517 ) (47,023 )
Funds withheld from reinsurers (19,279 ) 3,524
Unearned property and casualty premiums 168,203 244,206
Reinsurance balances payable 79,739 75,643
Accounts payable and accrued expenses (16,996 )   10,871  
Cash provided by operating activities 257,238     275,475  
 
INVESTING ACTIVITIES
Purchases of available for sale securities (1,701,243 ) (1,929,474 )
Sales of available for sale securities 754,150 1,126,984
Redemptions/maturities of available for sale securities 852,480 660,245
Purchases of trading securities (358,770 ) (50,971 )
Sales of trading securities 194,355 24,563
Redemptions/maturities of trading securities 27,219 44,231
Purchases of held to maturity securities (2,580 )
Redemptions/maturities of held to maturity securities 28,667 18,251
Net (purchases) sales of other investments (121,706 ) 27,353
Dividends from equity method investments 8,694
Change in restricted cash and cash equivalents 207,620   (98,165 )
Cash used in investing activities (108,534 ) (179,563 )
 
FINANCING ACTIVITIES
Net proceeds from issuance of common shares 3,248 2,016
Repurchase of common shares (158,656 ) (171,951 )
Dividends paid (42,317 ) (39,894 )
Additions to deposit liabilities 8,725 334
Payments of deposit liabilities (22,672 ) (5,056 )
Cash used in financing activities (211,672 ) (214,551 )
 
Effect of exchange rate changes on foreign currency cash and cash equivalents (700 ) (15,157 )
 
Net decrease in cash and cash equivalents (63,668 ) (133,796 )
 
Cash and cash equivalents, beginning of period 469,477   561,694  
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 405,809   $ 427,898  
 

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

Interest paid totaled $25,138 and $25,320 for the nine months ended September 30, 2012 and 2011, respectively.

Income taxes paid totaled $7,013 and $172 for the nine months ended September 30, 2012 and 2011, respectively.

 

ALTERRA CAPITAL HOLDINGS LIMITED

 
SCHEDULE OF SUPPLEMENTAL SEGMENT DATA - THREE MONTHS ENDED SEPTEMBER 30, 2012 (Unaudited)
(Expressed in thousands of United States Dollars)
Property & Casualty   Life & Annuity Reinsurance   Corporate   Consolidated
Global Insurance   U.S. Insurance   Reinsurance   Alterra at Lloyd’s   Total      
Gross premiums written $ 81,627   $ 88,006   $ 172,796   $ 43,074   $ 385,503 $ 725 $ $ 386,228
Reinsurance premiums ceded (44,157 )   (40,083 )   (30,318 )   (8,835 )   (123,393 )   (84 )       (123,477 )
Net premiums written $ 37,470     $ 47,923     $ 142,478     $ 34,239     $ 262,110     $ 641     $     $ 262,751  
 
Earned premiums $ 92,526 $ 100,187 $ 223,231 $ 66,553 $ 482,497 $ 725 $ $ 483,222
Earned premiums ceded (48,392 )   (52,222 )   (36,446 )   (13,440 )   (150,500 )   (84 )       (150,584 )
Net premiums earned 44,134 47,965 186,785 53,113 331,997 641 332,638
 
Net losses and loss expenses (31,631 ) (46,489 ) (98,067 ) (52,342 ) (228,529 ) (228,529 )
Claims and policy benefits (11,838 ) (11,838 )
Acquisition costs (124 ) (4,404 ) (47,159 ) (10,104 ) (61,791 ) (132 ) (61,923 )
General and administrative expenses (6,328 ) (11,337 ) (16,259 ) (7,342 ) (41,266 ) (74 ) (41,340 )
Other income         1,560     1     1,561             1,561  
Underwriting income (loss) $ 6,051 $ (14,265 ) $ 26,860 $ (16,674 ) $ 1,972 n/a n/a
Net investment income 13,224 40,294 53,518
Net realized and unrealized gains on investments 20,436 20,436
Net impairment losses recognized in earnings (592 ) (592 )
Corporate other income 25 25
Interest expense (9,026 ) (9,026 )
Net foreign exchange gains 82 82
Corporate general and administrative expenses     (16,175 )   (16,175 )
Income before taxes $ 1,821     $ 35,044     $ 38,837  
Loss ratio (a) 71.7 % 96.9 % 52.5 % 98.5 % 68.8 %
Acquisition cost ratio (b) 0.3 % 9.2 % 25.2 % 19.0 % 18.6 %
General and administrative expense ratio (c) 14.3 %   23.6 %   8.7 %   13.8 %   12.4 %
Combined ratio (d) 86.3 %   129.7 %   86.5 %   131.4 %   99.9 %
 
SCHEDULE OF SUPPLEMENTAL SEGMENT DATA - NINE MONTHS ENDED SEPTEMBER 30, 2012 (Unaudited)
(Expressed in thousands of United States Dollars)
Property & Casualty Life & Annuity Reinsurance Corporate Consolidated
Global Insurance   U.S. Insurance   Reinsurance   Alterra at Lloyd’s   Total      
Gross premiums written $ 273,674 $ 304,474 $ 772,823 $ 261,225 $ 1,612,196 $ 2,219 $ $ 1,614,415
Reinsurance premiums ceded (140,632 )   (162,101 )   (160,335 )   (74,493 )   (537,561 )   (257 )       (537,818 )
Net premiums written $ 133,042     $ 142,373     $ 612,488     $ 186,732     $ 1,074,635     $ 1,962     $     $ 1,076,597  
 
Earned premiums $ 279,432 $ 296,728 $ 670,767 $ 208,782 $ 1,455,709 $ 2,219 $ $ 1,457,928
Earned premiums ceded (140,892 )   (137,168 )   (101,423 )   (56,597 )   (436,080 )   (257 )       (436,337 )
Net premiums earned 138,540 159,560 569,344 152,185 1,019,629 1,962 1,021,591
 
Net losses and loss expenses (72,437 ) (121,386 ) (313,452 ) (124,047 ) (631,322 ) (631,322 )
Claims and policy benefits (38,576 ) (38,576 )
Acquisition costs (422 ) (18,269 ) (137,739 ) (26,981 ) (183,411 ) (407 ) (183,818 )
General and administrative expenses (19,722 ) (35,809 ) (52,631 ) (24,293 ) (132,455 ) (227 ) (132,682 )
Other income 816     81     7,896     8     8,801             8,801  
Underwriting income (loss) $ 46,775 $ (15,823 ) $ 73,418 $ (23,128 ) $ 81,242 n/a n/a
Net investment income 41,466 125,459 166,925
Net realized and unrealized gains on investments 59,410 59,410
Net impairment losses recognized in earnings (6,531 ) (6,531 )
Corporate other income 75 75
Interest expense (27,289 ) (27,289 )
Net foreign exchange gains 89 89
Corporate general and administrative expenses     (43,692 )   (43,692 )
Income before taxes $ 4,218     $ 107,521     $ 192,981  
Loss ratio (a) 52.3 % 76.1 % 55.1 % 81.5 % 61.9 %
Acquisition cost ratio (b) 0.3 % 11.4 % 24.2 % 17.7 % 18.0 %
General and administrative expense ratio (c) 14.2 %   22.4 %   9.2 %   16.0 %   13.0 %
Combined ratio (d) 66.8 %   110.0 %   88.5 %   115.2 %   92.9 %
 

(a) The loss ratio is calculated by dividing net losses and loss expenses by net premiums earned.

(b) The acquisition cost ratio is calculated by dividing acquisition costs by net premiums earned.

(c) The general and administrative expense ratio is calculated by dividing general and administrative expenses by net premiums earned.

(d) The combined ratio is calculated by dividing the sum of net losses and loss expenses, acquisition costs and general and administrative expenses by net premiums earned.

n/a Not applicable

Percentage totals may not add due to rounding.

 

Segment Re-presentation

Effective July 1, 2012, the Company redefined its reporting segments by combining the reinsurance and Latin America segments into a single reinsurance segment. The Latin America segment comprised reinsurance business written for clients in Latin America through the Company's Rio de Janeiro, Bogota and Buenos Aires offices. This business will now be combined with and reported as part of the reinsurance segment. Segment disclosures for comparative periods have been re-presented to reflect this change.

ALTERRA CAPITAL HOLDINGS LIMITED

 
SCHEDULE OF SUPPLEMENTAL SEGMENT DATA - THREE MONTHS ENDED SEPTEMBER 30, 2011 (Unaudited)
(Expressed in thousands of United States Dollars)
Property & Casualty   Life & Annuity Reinsurance   Corporate   Consolidated
Global Insurance   U.S. Insurance   Reinsurance   Alterra at Lloyd’s   Total      
Gross premiums written $ 73,297   $ 84,858   $ 182,535   $ 44,816   $ 385,506 $ 822 $ $ 386,328
Reinsurance premiums ceded (37,625 )   (30,579 )   (15,874 )   (6,723 )   (90,801 )   (90 )       (90,891 )
Net premiums written $ 35,672     $ 54,279     $ 166,661     $ 38,093     $ 294,705     $ 732     $     $ 295,437  
 
Earned premiums $ 93,467 $ 83,279 $ 224,829 $ 50,534 $ 452,109 $ 822 $ $ 452,931
Earned premiums ceded (48,456 )   (28,004 )   (18,489 )   (10,850 )   (105,799 )   (90 )       (105,889 )
Net premiums earned 45,011 55,275 206,340 39,684 346,310 732 347,042
 
Net losses and loss expenses (21,288 ) (36,002 ) (116,769 ) (24,462 ) (198,521 ) (198,521 )
Claims and policy benefits (14,538 ) (14,538 )
Acquisition costs 748 (9,669 ) (46,138 ) (6,230 ) (61,289 ) (145 ) (61,434 )
General and administrative expenses (6,699 ) (10,228 ) (18,901 ) (8,007 ) (43,835 ) (145 ) (43,980 )
Other income     58     777     (27 )   808     (8 )       800  
Underwriting income (loss) $ 17,772 $ (566 ) $ 25,309 $ 958 $ 43,473 n/a n/a
Net investment income 12,131 48,204 60,335
Net realized and unrealized losses on investments (6,407 ) (1,565 ) (7,972 )
Net impairment losses recognized in earnings (861 ) (861 )
Corporate other income 673 673
Interest expense (11,303 ) (11,303 )
Net foreign exchange gains 147 147
Corporate general and administrative expenses     (17,575 )   (17,575 )
(Loss) income before taxes $ (8,380 )   $ 17,720     $ 52,813  
Loss ratio (a) 47.3 % 65.1 % 56.6 % 61.6 % 57.3 %
Acquisition cost ratio (b) (1.7 )% 17.5 % 22.4 % 15.7 % 17.7 %
General and administrative expense ratio (c) 14.9 %   18.5 %   9.2 %   20.2 %   12.7 %
Combined ratio (d) 60.5 %   101.1 %   88.1 %   97.5 %   87.7 %
 
SCHEDULE OF SUPPLEMENTAL SEGMENT DATA - NINE MONTHS ENDED SEPTEMBER 30, 2011 (Unaudited)
(Expressed in thousands of United States Dollars)
Property & Casualty Life & Annuity Reinsurance Corporate Consolidated
Global Insurance   U.S. Insurance   Reinsurance   Alterra at Lloyd’s   Total      
Gross premiums written $ 268,101 $ 272,417 $ 810,244 $ 225,134 $ 1,575,896 $ 2,187 $ $ 1,578,083
Reinsurance premiums ceded (131,282 )   (97,123 )   (81,438 )   (54,820 )   (364,663 )   (211 )       (364,874 )
Net premiums written $ 136,819     $ 175,294     $ 728,806     $ 170,314     $ 1,211,233     $ 1,976     $     $ 1,213,209  
 
Earned premiums $ 273,010 $ 246,993 $ 691,196 $ 171,815 $ 1,383,014 $ 2,187 $ $ 1,385,201
Earned premiums ceded (132,521 )   (79,640 )   (50,989 )   (45,970 )   (309,120 )   (211 )       (309,331 )
Net premiums earned 140,489 167,353 640,207 125,845 1,073,894 1,976 1,075,870
 
Net losses and loss expenses (76,601 ) (108,429 ) (435,053 ) (93,977 ) (714,060 ) (714,060 )
Claims and policy benefits (44,818 ) (44,818 )
Acquisition costs 1,601 (28,055 ) (141,014 ) (28,828 ) (196,296 ) (426 ) (196,722 )
General and administrative expenses (21,425 ) (32,872 ) (68,329 ) (24,033 ) (146,659 ) (581 ) (147,240 )
Other income 814     195     1,325     353     2,687     (31 )       2,656  
Underwriting income (loss) $ 44,878 $ (1,808 ) $ (2,864 ) $ (20,640 ) $ 19,566 n/a n/a
Net investment income 37,019 140,747 177,766
Net realized and unrealized losses on investments (4,899 ) (27,665 ) (32,564 )
Net impairment losses recognized in earnings (2,243 ) (2,243 )
Corporate other income 723 723
Interest expense (30,392 ) (30,392 )
Net foreign exchange losses (2,065 ) (2,065 )
Corporate general and administrative expenses     (55,177 )   (55,177 )
(Loss) income before taxes $ (11,760 )   $ 23,928     $ 31,734  
Loss ratio (a) 54.5 % 64.8 % 68.0 % 74.7 % 66.5 %
Acquisition cost ratio (b) (1.1 )% 16.8 % 22.0 % 22.9 % 18.3 %
General and administrative expense ratio (c) 15.3 %   19.6 %   10.7 %   19.1 %   13.7 %
Combined ratio (d) 68.6 %   101.2 %   100.7 %   116.7 %   98.4 %
 

(a) The loss ratio is calculated by dividing net losses and loss expenses by net premiums earned.

(b) The acquisition cost ratio is calculated by dividing acquisition costs by net premiums earned.

(c) The general and administrative expense ratio is calculated by dividing general and administrative expenses by net premiums earned.

(d) The combined ratio is calculated by dividing the sum of net losses and loss expenses, acquisition costs and general and administrative expenses by net premiums earned.

n/a Not applicable

Percentage totals may not add due to rounding.

 

ALTERRA CAPITAL HOLDINGS LIMITED

 

SCHEDULE OF SUPPLEMENTAL PREMIUM DATA - NINE MONTHS ENDED SEPTEMBER 30, 2012 (Unaudited)

(Expressed in thousands of United States Dollars)

       
Nine Months Ended September 30, 2012 Nine Months Ended September 30, 2011
Gross Premiums Written   Percentage of Total Gross Premiums Written Movement on Prior Year Period Gross Premiums Written [a]   Percentage of Total Gross Premiums Written [a]
Property & Casualty:
Global Insurance:
Aviation S $ 11,252 0.7 % (6.0 )% $ 11,966 0.8 %
Excess Liability L 80,367 5.0 % 4.0 % 77,301 4.9 %
Professional Liability L 120,431 7.5 % 2.5 % 117,521 7.4 %
Property S 61,624   3.8 % 0.5 % 61,313   3.9 %
273,674 17.0 % 2.1 % 268,101 17.0 %
U.S. Insurance:
General/Excess Liability L 76,590 4.7 % 4.9 % 73,036 4.6 %
Marine S 79,168 4.9 % 22.4 % 64,687 4.1 %
Professional Liability L 41,526 2.6 % 46.0 % 28,449 1.8 %
Property S 107,190   6.6 % 0.9 % 106,245   6.7 %
304,474 18.9 % 11.8 % 272,417 17.3 %
Reinsurance:
Agriculture S 23,379 1.4 % (23.3 )% 30,496 1.9 %
Auto S 42,593 2.6 % (45.3 )% 77,812 4.9 %
Aviation S 27,801 1.7 % 77.6 % 15,654 1.0 %
Credit/Surety S 58,134 3.6 % 68.8 % 34,446 2.2 %
General Casualty L 49,763 3.1 % (19.1 )% 61,522 3.9 %
Marine & Energy S 23,264 1.4 % 12.9 % 20,605 1.3 %
Medical Malpractice L 24,946 1.5 % (30.1 )% 35,672 2.3 %
Other S 4,104 0.3 % 26.2 % 3,252 0.2 %
Professional Liability L 131,289 8.1 % (5.6 )% 139,023 8.8 %
Property S 347,019 21.5 % 5.1 % 330,146 20.9 %
Whole Account S/L 4,478 0.3 % (86.6 )% 33,392 2.1 %
Workers' Compensation L 36,053   2.2 % 27.7 % 28,224   1.8 %
772,823 47.9 % (4.6 )% 810,244 51.3 %
Alterra at Lloyd's:
Accident & Health S 35,256 2.2 % 12.1 % 31,447 2.0 %
Agriculture S 18,355 1.1 % n/m
Aviation S 8,620 0.5 % 11.8 % 7,707 0.5 %
Financial Institutions L 18,870 1.2 % (1.0 )% 19,068 1.2 %
International Casualty L 63,784 4.0 % 27.7 % 49,955 3.2 %
Marine S 7,022 0.4 % n/m
Professional Liability L 17,539 1.1 % (6.8 )% 18,828 1.2 %
Property S 91,779   5.7 % (6.5 )% 98,129   6.2 %
261,225 16.2 % 16.0 % 225,134 14.3 %
         
Aggregate Property & Casualty $ 1,612,196   99.9 % 2.3 % $ 1,575,896   99.9 %
 
Life & Annuity:
Annuity $ n/m $ 1,131 0.1 %
Life 2,219   0.1 % 110.1 % 1,056   0.1 %
 
Aggregate Life & Annuity $ 2,219   0.1 % 1.5 % $ 2,187   0.1 %
         
Aggregate Property & Casualty and Life & Annuity $ 1,614,415   100.0 % 2.3 % $ 1,578,083   100.0 %
 
 
S = Short tail lines $ 948,799 58.9 % $ 910,601 57.8 %
L = Long tail lines 663,397   41.1 % 665,295   42.2 %
Aggregate Property & Casualty $ 1,612,196   $ 1,575,896  
 
Property [b] $ 607,612 37.7 % $ 595,833 37.8 %
Casualty [c] 661,158 41.0 % 648,599 41.2 %
Specialty [d] 343,426   21.3 % 331,464   21.0 %
Aggregate Property & Casualty $ 1,612,196   $ 1,575,896  
 

[a] Comparative period has been re-presented to conform with the current period's presentation.

[b] Property includes property lines of business.

[c] Casualty includes excess liability, financial institutions, general liability, international casualty, medical malpractice, professional liability and workers' compensation lines of business.

[d] Specialty includes accident & health, agriculture, auto, aviation, credit, energy, marine, other, surety and whole account lines of business.

 
Percentage totals may not add due to rounding.
n/m Not meaningful.
 

ALTERRA CAPITAL HOLDINGS LIMITED

 

NON-GAAP FINANCIAL MEASURE RECONCILIATIONS (UNAUDITED)

Net Operating Income and Net Operating Income per Diluted Share

(Expressed in thousands of United States Dollars, except per share and share amounts)

   
Three Months Ended September 30, Nine Months Ended September 30,

2012

 

2011

2012

 

2011

 
Net income before tax $ 38,837 $ 52,813 $ 192,981 $ 31,734
Net realized and unrealized (gains) losses on investments not included in operating income, before tax [a] (6,348 ) 1,164 (28,076 ) 28,427
Foreign exchange (gains) losses, before tax (82 ) (147 ) (89 ) 2,065
Net operating income before tax $ 32,407   $ 53,830   $ 164,816   $ 62,226
 
Net income $ 37,652 $ 48,386 $ 195,616 $ 34,334
Net realized and unrealized (gains) losses on investments not included in operating income, net of tax [a] (5,465 ) 1,807 (26,732 ) 29,120
Foreign exchange (gains) losses, net of tax (54 ) (111 ) (68 ) 1,461
Net operating income $ 32,133   $ 50,082   $ 168,816   $ 64,915
 
Net income per diluted share $ 0.38 $ 0.46 $ 1.93 $ 0.32
Net realized and unrealized (gains) losses on investments not included in operating income, net of tax [a] (0.06 ) 0.02 (0.26 ) 0.27
Foreign exchange losses, net of tax       0.01
Net operating income per diluted share $ 0.33   $ 0.47   $ 1.67   $ 0.61
 
Weighted average shares outstanding - basic 95,791,466   104,830,300   98,785,999   105,866,771
Weighted average shares outstanding - diluted 98,610,267   105,665,282   101,252,927   107,092,882
 

[a] Net realized and unrealized (gains) losses on investments not included in operating income includes realized and unrealized (gains) losses on trading securities, realized (gains) losses on available for sale securities, net impairment losses recognized in earnings, earnings from equity method investments in run-off and changes in fair value of derivatives, catastrophe bonds and structured deposits.

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