þ
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the Quarterly Period Ended June 30, 2007 | ||
OR
|
||
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the Transition Period From to |
Bermuda
|
N/A
|
|
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
Page | ||||||||
PART I
FINANCIAL INFORMATION
|
||||||||
Financial Statements: | 1 | |||||||
|
1 | |||||||
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2 | |||||||
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3 | |||||||
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4 | |||||||
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5 | |||||||
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6 | |||||||
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20 | |||||||
Managements Discussion and Analysis of Financial Condition and Results of Operations | 21 | |||||||
Quantitative and Qualitative Disclosures About Market Risk | 34 | |||||||
Controls and Procedures | 34 | |||||||
Legal Proceedings | 34 | |||||||
Risk Factors | 34 | |||||||
Submission of Matters to a Vote of Security Holders | 35 | |||||||
Other Information | 44 | |||||||
Exhibits | 45 | |||||||
46 | ||||||||
Certification pursuant to
Rule 13a-14(a)/15d-14(a)
|
||||||||
Certification pursuant to
Rule 13a-14(a)/15d-14(a)
|
||||||||
Certification pursuant to
18 U.S.C. Section 1350
|
||||||||
Certification pursuant to
18 U.S.C. Section 1350
|
||||||||
AMENDED AND RESTATED EMPLOYMENT AGREEMENT | ||||||||
DELOITTE & TOUCHE LETTER REGARDING UNAUDITED INTERIM FINANCIAL INFORMATION | ||||||||
CERTIFICATION OF CHIEF EXECUTIVE OFFICER | ||||||||
CERTIFICATION OF CHIEF FINANCIAL OFFICER | ||||||||
CERTIFICATION SECTION 906 OF CHIEF EXECUTIVE OFFICER | ||||||||
CERTIFICATION SECTION 906 OF CHIEF FINANCIAL OFFICER |
Item 1. | FINANCIAL STATEMENTS |
June 30, |
December 31, |
|||||||
2007 | 2006 | |||||||
(expressed in thousands of U.S. dollars, except share and per share data) | ||||||||
ASSETS
|
||||||||
Short-term investments and fixed
maturities, available for sale, at fair value (amortized cost:
2007 $242,905; 2006 $279,137)
|
$ | 242,803 | $ | 279,137 | ||||
Fixed maturities, held to maturity,
at amortized cost (fair value: 2007 $308,063;
2006 $328,183)
|
312,435 | 332,750 | ||||||
Fixed maturities, trading, at fair
value (amortized cost: 2007 $302,180;
2006 $93,581)
|
296,659 | 93,221 | ||||||
Other investments, at fair value
|
68,395 | 42,421 | ||||||
Total investments
|
920,292 | 747,529 | ||||||
Cash and cash equivalents
|
724,120 | 450,817 | ||||||
Restricted cash and cash equivalents
|
178,461 | 62,746 | ||||||
Accrued interest receivable
|
10,610 | 7,305 | ||||||
Accounts receivable, net
|
11,284 | 17,758 | ||||||
Reinsurance balances receivable, net
|
493,064 | 408,142 | ||||||
Investment in partly-owned company
|
| 17,998 | ||||||
Goodwill
|
21,222 | 21,222 | ||||||
Other assets
|
97,447 | 40,735 | ||||||
TOTAL ASSETS
|
$ | 2,456,500 | $ | 1,774,252 | ||||
LIABILITIES
|
||||||||
Losses and loss adjustment expenses
|
$ | 1,627,276 | $ | 1,214,419 | ||||
Reinsurance balances payable
|
218,938 | 62,831 | ||||||
Accounts payable and accrued
liabilities
|
11,659 | 29,191 | ||||||
Income taxes payable
|
126 | 1,542 | ||||||
Loans payable
|
70,942 | 62,148 | ||||||
Other liabilities
|
55,790 | 29,991 | ||||||
TOTAL LIABLITIES
|
1,984,731 | 1,400,122 | ||||||
MINORITY INTEREST
|
59,935 | 55,520 | ||||||
SHAREHOLDERS EQUITY
|
||||||||
Share capital
|
||||||||
Authorized issued and fully paid,
par value $1 each (Authorized 2007: 156,000,000; 2006:
99,000,000) Ordinary shares (Issued and Outstanding 2007:
11,920,377; 2006: 18,885)
|
11,920 | 19 | ||||||
Non-voting convertible ordinary
shares (Issued 2007: 2,972,892; 2006: Nil)
|
2,973 | | ||||||
Treasury stock at cost (non-voting
convertible ordinary shares 2007: 2,972,892; 2006: Nil)
|
(421,559 | ) | | |||||
Additional paid-in capital
|
590,504 | 111,371 | ||||||
Accumulated other comprehensive
income
|
5,207 | 4,565 | ||||||
Retained earnings
|
222,789 | 202,655 | ||||||
TOTAL SHAREHOLDERS EQUITY
|
411,834 | 318,610 | ||||||
TOTAL LIABILITIES AND
SHAREHOLDERS EQUITY
|
$ | 2,456,500 | $ | 1,774,252 | ||||
1
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, |
June 30, |
June 30, |
June 30, |
|||||||||||||
2007 | 2006 | 2007 | 2006 | |||||||||||||
(expressed in thousands of U.S. dollars, |
||||||||||||||||
except share and per share data) | ||||||||||||||||
INCOME
|
||||||||||||||||
Consulting fees
|
$ | 3,826 | $ | 5,251 | $ | 8,487 | $ | 11,600 | ||||||||
Net investment income
|
16,976 | 11,145 | 34,756 | 20,805 | ||||||||||||
Net realized (losses) gains
|
(132 | ) | (79 | ) | 439 | (79 | ) | |||||||||
20,670 | 16,317 | 43,682 | 32,326 | |||||||||||||
EXPENSES
|
||||||||||||||||
Net (reduction) increase in loss
and loss adjustment
|
||||||||||||||||
expense liabilities
|
(805 | ) | (4,323 | ) | 1,705 | (6,780 | ) | |||||||||
Salaries and benefits
|
10,360 | 6,491 | 23,162 | 14,440 | ||||||||||||
General and administrative expenses
|
7,915 | 4,995 | 13,588 | 8,133 | ||||||||||||
Interest expense
|
1,307 | 532 | 2,325 | 532 | ||||||||||||
Net foreign exchange gain
|
(3,069 | ) | (7,497 | ) | (3,015 | ) | (7,967 | ) | ||||||||
15,708 | 198 | 37,765 | 8,358 | |||||||||||||
EARNINGS BEFORE INCOME TAXES,
MINORITY INTEREST AND SHARE OF NET EARNINGS OF PARTLY-OWNED
COMPANY
|
4,962 | 16,119 | 5,917 | 23,968 | ||||||||||||
INCOME TAXES RECOVERY
|
8,109 | 581 | 7,093 | 795 | ||||||||||||
MINORITY INTEREST
|
(2,167 | ) | (4,974 | ) | (4,415 | ) | (5,186 | ) | ||||||||
SHARE OF NET EARNINGS OF
PARTLY-OWNED COMPANY
|
| 151 | | 263 | ||||||||||||
EARNINGS BEFORE EXTRAORDINARY GAIN
|
10,904 | 11,877 | 8,595 | 19,840 | ||||||||||||
EXTRAORDINARY GAIN
NEGATIVE GOODWILL (2006: NET OF MINORITY INTEREST OF $4,329)
|
| | 15,683 | 4,347 | ||||||||||||
NET EARNINGS
|
$ | 10,904 | $ | 11,877 | $ | 24,278 | $ | 24,187 | ||||||||
PER SHARE DATA:
|
||||||||||||||||
Basic earnings per share before
extraordinary gain basic
|
$ | 0.92 | $ | 1.21 | $ | 0.74 | $ | 2.02 | ||||||||
Extraordinary gain per
share basic
|
| | 1.36 | 0.44 | ||||||||||||
Basic earnings per share
|
$ | 0.92 | $ | 1.21 | $ | 2.10 | $ | 2.46 | ||||||||
Diluted earnings per share before
extraordinary gain diluted
|
$ | 0.89 | $ | 1.19 | $ | 0.73 | $ | 2.00 | ||||||||
Extraordinary gain per
share diluted
|
| | 1.33 | 0.44 | ||||||||||||
Diluted earnings per share
|
$ | 0.89 | $ | 1.19 | $ | 2.06 | $ | 2.44 | ||||||||
Dividends declared per ordinary
share
|
$ | | $ | 2.92 | $ | | $ | 2.92 | ||||||||
Weighted average ordinary shares
outstanding basic
|
11,916,013 | 9,849,321 | 11,540,318 | 9,802,832 | ||||||||||||
Weighted average ordinary shares
outstanding diluted
|
12,204,562 | 9,945,994 | 11,817,225 | 9,930,359 |
2
Three Months |
Six Months |
|||||||||||||||
Ended | Ended | |||||||||||||||
June 30, |
June 30, |
June 30, |
June 30, |
|||||||||||||
2007 | 2006 | 2007 | 2006 | |||||||||||||
(expressed in thousands of U.S. dollars) | ||||||||||||||||
NET EARNINGS
|
$ | 10,904 | $ | 11,877 | $ | 24,278 | $ | 24,187 | ||||||||
Other comprehensive income:
|
||||||||||||||||
Unrealized holding (losses) gains
on investments arising during the period
|
(176 | ) | 1,511 | 395 | 1,391 | |||||||||||
Reclassification adjustment for
net realized losses (gains) included in net earnings
|
132 | 79 | (439 | ) | 79 | |||||||||||
Currency translation adjustment
|
46 | 492 | 686 | 577 | ||||||||||||
Other comprehensive income:
|
2 | 2,082 | 642 | 2,047 | ||||||||||||
COMPREHENSIVE INCOME
|
$ | 10,906 | $ | 13,959 | $ | 24,920 | $ | 26,234 | ||||||||
3
2007 | 2006 | |||||||
(expressed in thousands of U.S. dollars) | ||||||||
Share capital
ordinary shares
|
||||||||
Balance, beginning of period
|
$ | 19 | $ | 22,661 | ||||
Redemption of Class E shares
|
| (22,642 | ) | |||||
Conversion of shares
|
6,029 | | ||||||
Issue of shares
|
5,775 | | ||||||
Shares repurchased
|
(7 | ) | | |||||
Share awards granted/vested
|
104 | | ||||||
Balance, end of period
|
$ | 11,920 | $ | 19 | ||||
Share capital
non-voting convertible ordinary shares
|
||||||||
Balance, beginning of period
|
$ | | $ | | ||||
Conversion of shares
|
2,973 | | ||||||
Balance, end of period
|
$ | 2,973 | $ | | ||||
Treasury stock
|
||||||||
Balance, beginning of period
|
$ | | $ | | ||||
Shares acquired, at cost
|
(421,559 | ) | | |||||
Balance, end of period
|
$ | (421,559 | ) | $ | | |||
Additional paid-in
capital
|
||||||||
Balance, beginning of period
|
$ | 111,371 | $ | 89,090 | ||||
Reclassification of deferred
compensation
|
| (112 | ) | |||||
Share awards granted/vested
|
3,665 | 21,210 | ||||||
Shares repurchased
|
(16,755 | ) | | |||||
Issue of shares
|
490,269 | | ||||||
Amortization of share awards
|
1,954 | | ||||||
Balance, end of period
|
$ | 590,504 | $ | 110,188 | ||||
Deferred compensation
|
||||||||
Balance, beginning of period
|
$ | | $ | (112 | ) | |||
Reclassification of deferred
compensation
|
| 112 | ||||||
Balance, end of period
|
$ | | $ | | ||||
Accumulated other comprehensive
income
|
||||||||
Balance, beginning of period
|
$ | 4,565 | $ | 1,010 | ||||
Other comprehensive income (loss)
|
642 | 2,047 | ||||||
Balance, end of period
|
$ | 5,207 | $ | 3,057 | ||||
Retained earnings
|
||||||||
Balance, beginning of period
|
$ | 202,655 | $ | 148,257 | ||||
Adjustment to initially apply
FIN 48
|
4,858 | | ||||||
Adjusted balance, beginning of
period
|
207,513 | 148,257 | ||||||
Conversion of shares
|
(9,002 | ) | | |||||
Dividend paid
|
| (27,948 | ) | |||||
Net earnings
|
24,278 | 24,187 | ||||||
Balance, end of period
|
$ | 222,789 | $ | 144,496 | ||||
4
2007 | 2006 | |||||||
(expressed in thousands of U.S. dollars) | ||||||||
OPERATING ACTIVITIES:
|
||||||||
Net earnings
|
$ | 24,278 | $ | 24,187 | ||||
Adjustments to reconcile net
earnings to cash flows provided by (used in) operating
activities:
|
||||||||
Minority interest
|
4,415 | 5,186 | ||||||
Negative goodwill (2006: net of
minority interest of $4,329)
|
(15,683 | ) | (4,347 | ) | ||||
Share of net earnings of
partly-owned companies
|
| (263 | ) | |||||
Amortization of deferred
compensation
|
| 112 | ||||||
Amortization of bond premiums or
discounts
|
(104 | ) | 1,362 | |||||
Share-based compensation expense
|
1,954 | 21,098 | ||||||
Net realized and unrealized
investments (gain) loss
|
(439 | ) | 79 | |||||
Other items
|
1,217 | 310 | ||||||
Changes in assets and liabilities:
|
||||||||
Sales of trading securities
|
133,227 | | ||||||
Reinsurance balances receivable
|
66,151 | 4,604 | ||||||
Other assets
|
484 | 24,381 | ||||||
Losses and loss adjustment expenses
|
(24,276 | ) | (27,881 | ) | ||||
Reinsurance balances payable
|
(39,783 | ) | 4,522 | |||||
Accounts payable and accrued
liabilities
|
(15,387 | ) | (23,142 | ) | ||||
Other liabilities
|
89 | (14,820 | ) | |||||
Net cash flows provided by
operating activities
|
136,143 | 15,388 | ||||||
INVESTING ACTIVITIES:
|
||||||||
Acquisition, net of cash acquired
|
29,651 | 29,015 | ||||||
Purchase of available-for-sale
securities
|
(52,148 | ) | (62,358 | ) | ||||
Sales and maturities of
available-for-sale securities
|
147,073 | 197,263 | ||||||
Purchase of held-to-maturity
securities
|
(2,476 | ) | | |||||
Maturity of held-to-maturity
securities
|
77,492 | 30,066 | ||||||
Movement in restricted cash and
cash equivalents
|
(69,334 | ) | 14,100 | |||||
Funding of other investments
|
(267 | ) | | |||||
Other investing activities
|
(453 | ) | (721 | ) | ||||
Net cash flows provided by
investing activities
|
129,538 | 207,365 | ||||||
FINANCING ACTIVITIES:
|
||||||||
Redemption of shares
|
| (22,642 | ) | |||||
Distribution of capital to minority
shareholders
|
| (11,765 | ) | |||||
Contribution to surplus of
subsidiary by minority interest
|
| 22,918 | ||||||
Dividend paid
|
| (27,948 | ) | |||||
Receipt of loan
|
26,825 | 44,356 | ||||||
Repayment of loan
|
(2,571 | ) | (25,156 | ) | ||||
Repayment of vendor loan note
|
| (20,970 | ) | |||||
Repurchase of shares
|
(16,762 | ) | | |||||
Net cash flows provided by (used
in) financing activities
|
7,492 | (41,207 | ) | |||||
Translation adjustment
|
130 | 330 | ||||||
NET INCREASE IN CASH AND CASH
EQUIVALENTS
|
273,303 | 181,876 | ||||||
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD
|
450,817 | 280,212 | ||||||
CASH AND CASH EQUIVALENTS, END OF
PERIOD
|
$ | 724,120 | $ | 462,088 | ||||
Supplemental Cash Flow
Information
|
||||||||
Income taxes (paid) recovered
|
$ | (2,598 | ) | $ | 603 | |||
Interest (paid)
|
$ | (2,571 | ) | $ | | |||
5
1. | BASIS OF PREPARATION AND CONSOLIDATION |
6
2. | ACQUISITIONS |
Purchase price
|
$ | 506,189 | ||
Direct costs of acquisition
|
3,149 | |||
Total purchase price
|
$ | 509,338 | ||
Net assets acquired at fair value
|
$ | 514,986 | ||
Excess of net assets over purchase
price
|
$ | (5,648 | ) | |
7
2. | ACQUISITIONS (contd) |
Allocation of |
||||||||||||
Net Assets |
Excess of Net |
Adjusted Net |
||||||||||
Acquired at |
Assets Over |
Assets Acquired |
||||||||||
Fair Value | Purchase Price | at Fair Value | ||||||||||
Cash
|
$ | 83,111 | $ | | $ | 83,111 | ||||||
Other investments
|
18,139 | (223 | ) | 17,916 | ||||||||
Investment in Enstar Group Limited
|
426,797 | (5,238 | ) | 421,559 | ||||||||
Investment in BH
|
15,246 | (187 | ) | 15,059 | ||||||||
Accounts receivable
|
4,931 | | 4,931 | |||||||||
Reinsurance balances payable (net)
|
(509 | ) | | (509 | ) | |||||||
Losses and loss adjustment expenses
|
(11,901 | ) | | (11,901 | ) | |||||||
Accounts payable
|
(20,828 | ) | | (20,828 | ) | |||||||
Net assets acquired at fair value
|
$ | 514,986 | $ | (5,648 | ) | $ | 509,338 | |||||
Purchase price
|
$ | 57,201 | ||
Direct costs of acquisition
|
303 | |||
Total purchase price
|
$ | 57,504 | ||
Net assets acquired at fair value
|
$ | 73,187 | ||
Excess of net assets over purchase
price (negative goodwill)
|
$ | (15,683 | ) | |
Cash, restricted cash and
investments
|
$ | 479,760 | ||
Accounts receivable and accrued
interest
|
5,620 | |||
Reinsurance balances receivable
|
149,043 | |||
Losses and loss adjustment expenses
|
(415,551 | ) | ||
Insurance and reinsurance balances
payable
|
(145,317 | ) | ||
Accounts payable
|
(368 | ) | ||
Net assets acquired at fair value
|
$ | 73,187 | ||
8
2. | ACQUISITIONS (contd) |
Enstar |
||||||||||||||||||||||||||||||||
Enstar |
Group |
|||||||||||||||||||||||||||||||
Group |
Proforma |
Proforma |
Limited |
|||||||||||||||||||||||||||||
Three Months Ended June 30, 2007:
|
Limited | BH | EGI | Adjustment | Sub-Total | Inter-Ocean | Adjustment | Proforma | ||||||||||||||||||||||||
Total Income
|
$ | 16,972 | 1,567 | 1,222 | (1,492 | ) | 18,269 | 679 | (187 | ) | 18,761 | |||||||||||||||||||||
Total Expenses
|
(16,865 | ) | (773 | ) | 7,820 | 1,072 | (8,746 | ) | (206 | ) | 187 | (8,765 | ) | |||||||||||||||||||
Net Earnings
|
$ | 107 | 794 | 9,042 | (420 | ) | 9,523 | 473 | | 9,996 | ||||||||||||||||||||||
Net Earnings per Ordinary
Share Basic
|
$ | 0.84 | ||||||||||||||||||||||||||||||
Net Earnings per Ordinary
Share Diluted
|
$ | 0.82 | ||||||||||||||||||||||||||||||
Weighted Average Shares
Basic
|
11,916,013 | |||||||||||||||||||||||||||||||
Weighted Average Shares
Diluted
|
12,204,562 | |||||||||||||||||||||||||||||||
Three Months Ended
June 30, 2006:
|
||||||||||||||||||||||||||||||||
Total Income
|
$ | 16,317 | 613 | 1,173 | (119 | ) | 17,984 | 1,219 | (188 | ) | 19,015 | |||||||||||||||||||||
Total Expenses
|
(4,440 | ) | (277 | ) | (41 | ) | (3,947 | ) | (8,705 | ) | (718 | ) | 188 | (9,235 | ) | |||||||||||||||||
Net Earnings
|
$ | 11,877 | 336 | 1,132 | (4,066 | ) | 9,279 | 501 | | 9,780 | ||||||||||||||||||||||
Net Earnings per Ordinary
Share Basic
|
$ | 0.99 | ||||||||||||||||||||||||||||||
Net Earnings per Ordinary
Share Diluted
|
$ | 0.98 | ||||||||||||||||||||||||||||||
Weighted Average Shares
Basic
|
9,849,321 | |||||||||||||||||||||||||||||||
Weighted Average Shares
Diluted
|
9,945,994 | |||||||||||||||||||||||||||||||
9
2. | ACQUISITIONS (contd) |
Enstar |
||||||||||||||||||||||||||||||||
Enstar |
Group |
|||||||||||||||||||||||||||||||
Group |
Proforma |
Proforma |
Limited |
|||||||||||||||||||||||||||||
Six Months Ended June 30, 2007:
|
Limited | BH | EGI | Adjustment | Sub-Total | Inter-Ocean | Adjustment | Proforma | ||||||||||||||||||||||||
Total Income
|
$ | 38,769 | 2,819 | 2,280 | (2,025 | ) | 41,843 | 1,837 | (375 | ) | 43,305 | |||||||||||||||||||||
Total Expenses
|
(41,993 | ) | (1,547 | ) | 907 | 1,605 | (41,028 | ) | (244 | ) | 375 | (40,897 | ) | |||||||||||||||||||
Net (Loss) Earnings before
Extraordinary Gain
|
(3,224 | ) | 1,272 | 3,187 | (420 | ) | 815 | 1,593 | | 2,408 | ||||||||||||||||||||||
Extraordinary Gain
|
15,683 | | | | 15,683 | | 15,683 | |||||||||||||||||||||||||
Net Earnings
|
$ | 12,459 | 1,272 | 3,187 | (420 | ) | 16,498 | 1,593 | | 18,091 | ||||||||||||||||||||||
Net Earnings per Ordinary Share
before Extraordinary Gains Basic
|
$ | 0.21 | ||||||||||||||||||||||||||||||
Extraordinary Gain Basic
|
1.36 | |||||||||||||||||||||||||||||||
Net Earnings per Ordinary
Share Basic
|
$ | 1.57 | ||||||||||||||||||||||||||||||
Net Earnings per Ordinary Share
before Extraordinary Gains Diluted
|
$ | 0.20 | ||||||||||||||||||||||||||||||
Extraordinary Gain
Diluted
|
1.33 | |||||||||||||||||||||||||||||||
Net Earnings per Ordinary
Share Diluted
|
$ | 1.53 | ||||||||||||||||||||||||||||||
Weighted Average Shares
Basic
|
11,540,318 | |||||||||||||||||||||||||||||||
Weighted Average Shares
Diluted
|
11,817,225 | |||||||||||||||||||||||||||||||
Six Months Ended
June 30, 2006:
|
||||||||||||||||||||||||||||||||
Total Income
|
$ | 32,326 | 1,156 | 2,257 | (626 | ) | 35,113 | 2,271 | (376 | ) | 37,008 | |||||||||||||||||||||
Total Expenses
|
(12,486 | ) | (572 | ) | 703 | (6,232 | ) | (18,587 | ) | (2,191 | ) | 376 | (20,402 | ) | ||||||||||||||||||
Net Earnings (Loss) before
Extraordinary Gain
|
19,840 | 584 | 2,960 | (6,858 | ) | 16,526 | 80 | | 16,606 | |||||||||||||||||||||||
Extraordinary Gain
|
4,347 | | 875 | (875 | ) | 4,347 | | | 4,347 | |||||||||||||||||||||||
Net Earnings (Loss)
|
$ | 24,187 | 584 | 3,835 | (7,733 | ) | 20,873 | 80 | | 20,953 | ||||||||||||||||||||||
Net Earnings per Ordinary Share
before Extraordinary Gains Basic
|
$ | 1.69 | ||||||||||||||||||||||||||||||
Extraordinary gain Basic
|
0.44 | |||||||||||||||||||||||||||||||
Net Earnings per Ordinary
Share Basic
|
$ | 2.13 | ||||||||||||||||||||||||||||||
Net Earnings per Ordinary Share
before Extraordinary Gains Diluted
|
$ | 1.67 | ||||||||||||||||||||||||||||||
Extraordinary
Gain Diluted
|
$ | 0.44 | ||||||||||||||||||||||||||||||
Net Earnings per Ordinary
Share Diluted
|
$ | 2.11 | ||||||||||||||||||||||||||||||
Weighted Average Shares
Basic
|
9,802,832 | |||||||||||||||||||||||||||||||
Weighted Average Shares
Diluted
|
9,930,359 | |||||||||||||||||||||||||||||||
Purchase price
|
$ | 5,788 | ||
Direct costs of acquisition
|
85 | |||
Total purchase price
|
$ | 5,873 | ||
Net assets acquired at fair value
|
$ | 5,873 | ||
10
2. | ACQUISITIONS (contd) |
Cash, restricted cash and
investments
|
$ | 16,794 | ||
Reinsurance balances receivable
|
223 | |||
Losses and loss adjustment expenses
|
(11,144 | ) | ||
Net assets acquired at fair value
|
$ | 5,873 | ||
3. | EMPLOYEE BENEFITS |
Nonvested
January 1, 2007
|
92,293 | |||
Granted
|
38,357 | |||
Vested
|
(104,788 | ) | ||
Forfeited
|
| |||
Nonvested
June 30, 2007
|
25,862 | |||
11
3. | EMPLOYEE BENEFITS (contd) |
Weighted |
||||||||
Average |
||||||||
Number of |
Exercise |
|||||||
Shares | Price | |||||||
Outstanding
January 1, 2007
|
| $ | | |||||
Granted
|
490,371 | 25.40 | ||||||
Exercised
|
| | ||||||
Forfeited
|
| | ||||||
Outstanding
June 30, 2007
|
490,371 | $ | 25.40 | |||||
Ranges of |
Weighted Average |
|||||||||||
Exercise |
Number of |
Weighted Average |
Remaining |
|||||||||
Prices
|
Options | Exercise Price | Contractual Life | |||||||||
$10 - 20
|
323,645 | $ | 17.20 | 3.6 years | ||||||||
40 - 60
|
166,726 | 41.32 | 6.2 years |
12
4. | EARNINGS PER SHARE |
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, |
June 30, |
June 30, |
June 30, |
|||||||||||||
2007 | 2006 | 2007 | 2006 | |||||||||||||
Basic earnings per share
|
||||||||||||||||
Net earnings
|
$ | 10,904 | $ | 11,877 | $ | 24,278 | $ | 24,187 | ||||||||
Weighted average shares
outstanding basic
|
11,916,013 | 9,849,321 | 11,540,318 | 9,802,832 | ||||||||||||
Basic earnings per share
|
$ | 0.92 | $ | 1.21 | $ | 2.10 | $ | 2.46 | ||||||||
Diluted earnings per share
|
||||||||||||||||
Net earnings
|
$ | 10,904 | $ | 11,877 | $ | 24,278 | $ | 24,187 | ||||||||
Weighted average shares
outstanding basic
|
11,916,013 | 9,849,321 | 11,540,318 | 9,802,832 | ||||||||||||
Share equivalents:
|
||||||||||||||||
Unvested shares
|
30,242 | 96,673 | 61,096 | 127,527 | ||||||||||||
Options
|
258,307 | | 215,811 | | ||||||||||||
Weighted average shares
outstanding diluted
|
12,204,562 | 9,945,994 | 11,817,225 | 9,930,359 | ||||||||||||
Diluted earnings per share
|
$ | 0.89 | $ | 1.19 | $ | 2.06 | $ | 2.44 | ||||||||
5. | COMMITMENTS |
13
6. | RELATED PARTY TRANSACTIONS |
| On June 19, 2007 and December 22, 2006, the Company received management fees for advisory services provided to J.C. Flowers II L.P. (the Flowers Fund), a private investment fund, totaling $1,365. Of this amount $455 was earned during the six months ended June 30, 2007. | |
| On June 7, 2006, the commitment made by the Company in March 2006 to invest an aggregate of $75,000 in the Flowers Fund was accepted by the Flowers Fund. In addition, as a result of the merger with EGI, the commitment made by EGI of $25,000 to the Flowers Fund increases the Companys total commitment to $100,000. The Companys commitment may be drawn down by the Flowers Fund over approximately the next six years. As at June 30, 2007 the Flowers Fund had drawn down a total of $21,664 of the Companys $100,000 commitment to the Flowers Fund. |
7. | TAXATION |
14
8. | SEGMENT INFORMATION |
15
8. | SEGMENT INFORMATION (contd) |
Three Months Ended June 30, 2007 | ||||||||||||
Consulting | Reinsurance | Total | ||||||||||
Consulting fees
|
$ | 10,479 | $ | (6,653 | ) | $ | 3,826 | |||||
Net investment income
|
778 | 16,198 | 16,976 | |||||||||
Net realized losses
|
| (132 | ) | (132 | ) | |||||||
11,257 | 9,413 | 20,670 | ||||||||||
Net reduction in loss and loss
adjustment expense liabilities
|
| (805 | ) | (805 | ) | |||||||
Salaries and benefits
|
8,121 | 2,239 | 10,360 | |||||||||
General and administrative expenses
|
5,217 | 2,698 | 7,915 | |||||||||
Interest expense
|
| 1,307 | 1,307 | |||||||||
Net foreign exchange loss (gain)
|
26 | (3,095 | ) | (3,069 | ) | |||||||
13,364 | 2,344 | 15,708 | ||||||||||
Earnings (loss) before income
taxes and minority interest
|
(2,107 | ) | 7,069 | 4,962 | ||||||||
Income taxes
|
175 | 7,934 | 8,109 | |||||||||
Minority interest
|
| (2,167 | ) | (2,167 | ) | |||||||
Net (loss) earnings
|
$ | (1,932 | ) | $ | 12,836 | $ | 10,904 | |||||
16
8. | SEGMENT INFORMATION (contd) |
Three Months Ended June 30, 2006 | ||||||||||||
Consulting | Reinsurance | Total | ||||||||||
Consulting fees
|
$ | 10,487 | $ | (5,236 | ) | $ | 5,251 | |||||
Net investment income
|
336 | 10,809 | 11,145 | |||||||||
Net realized losses
|
| (79 | ) | (79 | ) | |||||||
10,823 | 5,494 | 16,317 | ||||||||||
Net reduction in loss and loss
adjustment expense liabilities
|
| (4,323 | ) | (4,323 | ) | |||||||
Salaries and benefits
|
4,723 | 1,768 | 6,491 | |||||||||
General and administrative expenses
|
3,543 | 1,452 | 4,995 | |||||||||
Interest expense
|
| 532 | 532 | |||||||||
Net foreign exchange loss (gain)
|
1,275 | (8,772 | ) | (7,497 | ) | |||||||
9,541 | (9,343 | ) | 198 | |||||||||
Earnings before income taxes,
minority interest and share of income of partly-owned company
|
1,282 | 14,837 | 16,119 | |||||||||
Income taxes
|
574 | 7 | 581 | |||||||||
Minority interest
|
| (4,974 | ) | (4,974 | ) | |||||||
Share of income of partly-owned
company
|
| 151 | 151 | |||||||||
Net earnings before extraordinary
gain
|
1,856 | 10,021 | 11,877 | |||||||||
Extraordinary gain
|
| | | |||||||||
Net earnings
|
$ | 1,856 | $ | 10,021 | $ | 11,877 | ||||||
17
8. | SEGMENT INFORMATION (contd) |
Six Months Ended June 30, 2007 | ||||||||||||
Consulting | Reinsurance | Total | ||||||||||
Consulting fees
|
$ | 21,338 | $ | (12,851 | ) | $ | 8,487 | |||||
Net investment income
|
1,471 | 33,285 | 34,756 | |||||||||
Net realized gains
|
| 439 | 439 | |||||||||
22,809 | 20,873 | 43,682 | ||||||||||
Net increase in loss and loss
adjustment expense liabilities
|
| 1,705 | 1,705 | |||||||||
Salaries and benefits
|
18,059 | 5,103 | 23,162 | |||||||||
General and administrative expenses
|
8,585 | 5,003 | 13,588 | |||||||||
Interest expense
|
| 2,325 | 2,325 | |||||||||
Net foreign exchange loss (gain)
|
73 | (3,088 | ) | (3,015 | ) | |||||||
26,717 | 11,048 | 37,765 | ||||||||||
Earnings (loss) before income
taxes and minority interest
|
(3,908 | ) | 9,825 | 5,917 | ||||||||
Income taxes
|
(733 | ) | 7,826 | 7,093 | ||||||||
Minority interest
|
| (4,415 | ) | (4,415 | ) | |||||||
Net (loss) earnings before
extraordinary gain
|
(4,641 | ) | 13,236 | 8,595 | ||||||||
Extraordinary gain
|
| 15,683 | 15,683 | |||||||||
Net (loss) earnings
|
$ | (4,641 | ) | $ | 28,919 | $ | 24,278 | |||||
18
8. | SEGMENT INFORMATION (contd) |
Six Months Ended June 30, 2006 | ||||||||||||
Consulting | Reinsurance | Total | ||||||||||
Consulting fees
|
$ | 20,422 | $ | (8,822 | ) | $ | 11,600 | |||||
Net investment income
|
577 | 20,228 | 20,805 | |||||||||
Net realized losses
|
| (79 | ) | (79 | ) | |||||||
20,999 | 11,327 | 32,326 | ||||||||||
Net reduction in loss and loss
adjustment expense liabilities
|
| (6,780 | ) | (6,780 | ) | |||||||
Salaries and benefits
|
10,821 | 3,619 | 14,440 | |||||||||
General and administrative expenses
|
6,004 | 2,129 | 8,133 | |||||||||
Interest expense
|
| 532 | 532 | |||||||||
Net foreign exchange loss (gain)
|
1,249 | (9,216 | ) | (7,967 | ) | |||||||
18,074 | (9,716 | ) | 8,358 | |||||||||
Earnings before income taxes,
minority interest and share of income of partly-owned company
|
2,925 | 21,043 | 23,968 | |||||||||
Income taxes
|
751 | 44 | 795 | |||||||||
Minority interest
|
| (5,186 | ) | (5,186 | ) | |||||||
Share of income of partly-owned
company
|
| 263 | 263 | |||||||||
Net earnings before extraordinary
gain
|
3,676 | 16,164 | 19,840 | |||||||||
Extraordinary gain
|
| 4,347 | 4,347 | |||||||||
Net earnings
|
$ | 3,676 | $ | 20,511 | $ | 24,187 | ||||||
19
20
Item 2. | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
21
Six Months Ended |
||||||||||||||||
Three Months Ended June 30, | June 30, | |||||||||||||||
2007 | 2006 | 2007 | 2006 | |||||||||||||
(in thousands of U.S. dollars) | ||||||||||||||||
INCOME
|
||||||||||||||||
Consulting fees
|
$ | 3,826 | $ | 5,251 | $ | 8,487 | $ | 11,600 | ||||||||
Net investment income
|
16,976 | 11,145 | 34,756 | 20,805 | ||||||||||||
Net realized (losses)/gains
|
(132 | ) | (79 | ) | 439 | (79 | ) | |||||||||
TOTAL INCOME
|
20,670 | 16,317 | 43,682 | 32,326 | ||||||||||||
EXPENSES
|
||||||||||||||||
Net (reduction) increase in loss
and loss adjustment expense liabilities
|
(805 | ) | (4,323 | ) | 1,705 | (6,780 | ) | |||||||||
Salaries and benefits
|
10,360 | 6,491 | 23,162 | 14,440 | ||||||||||||
General and administrative expenses
|
7,915 | 4,995 | 13,588 | 8,133 | ||||||||||||
Interest expense
|
1,307 | 532 | 2,325 | 532 | ||||||||||||
Net foreign exchange (gain)
|
(3,069 | ) | (7,497 | ) | (3,015 | ) | (7,967 | ) | ||||||||
TOTAL EXPENSES
|
15,708 | 198 | 37,765 | 8,358 | ||||||||||||
Earnings before income taxes,
minority interest and share of net earnings of partly-owned
company
|
4,962 | 16,119 | 5,917 | 23,968 | ||||||||||||
Income tax recovery
|
8,109 | 581 | 7,093 | 795 | ||||||||||||
Minority interest
|
(2,167 | ) | (4,974 | ) | (4,415 | ) | (5,186 | ) | ||||||||
Share of net earnings of
partly-owned company
|
0 | 151 | 0 | 263 | ||||||||||||
Earnings before extraordinary gain
|
10,904 | 11,877 | 8,595 | 19,840 | ||||||||||||
Extraordinary gain
Negative goodwill (2006:
|
||||||||||||||||
net of minority interest of $4,329)
|
0 | 0 | 15,683 | 4,347 | ||||||||||||
NET EARNINGS
|
$ | 10,904 | $ | 11,877 | $ | 24,278 | $ | 24,187 | ||||||||
22
Three Months Ended June 30, | ||||||||||||
2007 | 2006 | Variance | ||||||||||
(in thousands of U.S. dollars) | ||||||||||||
Consulting
|
$ | 10,479 | $ | 10,487 | $ | (8 | ) | |||||
Reinsurance
|
(6,653 | ) | (5,236 | ) | (1,417 | ) | ||||||
Total
|
$ | 3,826 | $ | 5,251 | $ | (1,425 | ) | |||||
Three Months Ended June 30, | ||||||||||||||||||||||||
Net Investment Income | Net Realized Gains/(Losses) | |||||||||||||||||||||||
2007 | 2006 | Variance | 2007 | 2006 | Variance | |||||||||||||||||||
(in thousands of U.S. dollars) | ||||||||||||||||||||||||
Consulting
|
$ | 778 | $ | 336 | $ | 442 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||
Reinsurance
|
16,198 | 10,809 | 5,389 | (132 | ) | (79 | ) | (53 | ) | |||||||||||||||
Total
|
$ | 16,976 | $ | 11,145 | $ | 5,831 | $ | (132 | ) | $ | (79 | ) | $ | (53 | ) | |||||||||
23
Three Months Ended June 30, | ||||||||
2007 | 2006 | |||||||
(in thousands of U.S. dollars) | ||||||||
Net Losses Paid
|
$ | (13,179 | ) | $ | (23,244 | ) | ||
Net Change in Case and LAE Reserves
|
6,399 | 8,229 | ||||||
Net Change in IBNR
|
7,585 | 19,338 | ||||||
Net Reduction in Loss and Loss
Adjustment
|
||||||||
Expense Liabilities
|
$ | 805 | $ | 4,323 | ||||
Three Months Ended June 30, | ||||||||
2007 | 2006 | |||||||
(in thousands of U.S. dollars) | ||||||||
Balance as of April 1
|
$ | 1,622,061 | $ | 1,042,608 | ||||
Less: Reinsurance Recoverables
|
316,487 | 251,001 | ||||||
1,305,574 | 791,607 | |||||||
Incurred Related to Prior Years
|
(805 | ) | (4,323 | ) | ||||
Paids Related to Prior Years
|
(13,179 | ) | (23,244 | ) | ||||
Effect of Exchange Rate Movement
|
7,531 | 7,970 | ||||||
Acquired on Acquisition of
Subsidiaries
|
11,029 | 0 | ||||||
Net Balance as at June 30
|
1,310,150 | 772,010 | ||||||
Plus: Reinsurance Recoverables
|
317,126 | 253,961 | ||||||
Balance as at June 30
|
$ | 1,627,276 | $ | 1,025,971 | ||||
Three Months Ended June 30, | ||||||||||||
2007 | 2006 | Variance | ||||||||||
(in thousands of U.S. dollars) | ||||||||||||
Consulting
|
$ | 8,121 | $ | 4,723 | $ | (3,398 | ) | |||||
Reinsurance
|
2,239 | 1,768 | (471 | ) | ||||||||
Total
|
$ | 10,360 | $ | 6,491 | $ | (3,869 | ) | |||||
24
Three Months Ended June 30, | ||||||||||||
2007 | 2006 | Variance | ||||||||||
(in thousands of U.S. dollars) | ||||||||||||
Consulting
|
$ | 5,217 | $ | 3,543 | $ | (1,674 | ) | |||||
Reinsurance
|
2,698 | 1,452 | (1,246 | ) | ||||||||
Total
|
$ | 7,915 | $ | 4,995 | $ | (2,920 | ) | |||||
Three Months Ended June 30, | ||||||||||||
2007 | 2006 | Variance | ||||||||||
(in thousands of U.S. dollars) | ||||||||||||
Consulting
|
$ | | $ | | $ | | ||||||
Reinsurance
|
1,307 | 532 | (775 | ) | ||||||||
Total
|
$ | 1,307 | $ | 532 | $ | (775 | ) | |||||
Three Months Ended June 30, | ||||||||||||
2007 | 2006 | Variance | ||||||||||
(in thousands of U.S. dollars) | ||||||||||||
Consulting
|
$ | (26 | ) | $ | (1,275 | ) | $ | 1,249 | ||||
Reinsurance
|
3,095 | 8,772 | (5,677 | ) | ||||||||
Total
|
$ | 3,069 | $ | 7,497 | $ | (4,428 | ) | |||||
25
Three Months Ended June 30, | ||||||||||||
2007 | 2006 | Variance | ||||||||||
(in thousands of U.S. dollars) | ||||||||||||
Consulting
|
$ | 175 | $ | 574 | $ | (399 | ) | |||||
Reinsurance
|
7,934 | 7 | 7,927 | |||||||||
Total
|
$ | 8,109 | $ | 581 | $ | 7,528 | ||||||
Three Months Ended June 30, | ||||||||||||
2007 | 2006 | Variance | ||||||||||
(in thousands of U.S. dollars) | ||||||||||||
Consulting
|
$ | | $ | | $ | | ||||||
Reinsurance
|
(2,167 | ) | (4,974 | ) | 2,807 | |||||||
Total
|
$ | (2,167 | ) | $ | (4,974 | ) | $ | 2,807 | ||||
26
Six Months Ended June 30, | ||||||||||||
2007 | 2006 | Variance | ||||||||||
(in thousands of U.S. dollars) | ||||||||||||
Consulting
|
$ | 21,338 | $ | 20,422 | $ | 916 | ||||||
Reinsurance
|
(12,851 | ) | (8,822 | ) | (4,029 | ) | ||||||
Total
|
$ | 8,487 | $ | 11,600 | $ | (3,113 | ) | |||||
Six Months Ended June 30, | ||||||||||||||||||||||||
Net Realized |
||||||||||||||||||||||||
Net Investment Income | Gains/(Losses) | |||||||||||||||||||||||
2007 | 2006 | Variance | 2007 | 2006 | Variance | |||||||||||||||||||
(in thousands of U.S. dollars) | ||||||||||||||||||||||||
Consulting
|
$ | 1,471 | $ | 577 | $ | 894 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||
Reinsurance
|
33,285 | 20,228 | 13,057 | 439 | (79 | ) | 518 | |||||||||||||||||
Total
|
$ | 34,756 | $ | 20,805 | $ | 13,951 | $ | 439 | $ | (79 | ) | $ | 518 | |||||||||||
27
Six Months Ended June 30, | ||||||||
2007 | 2006 | |||||||
(in thousands of U.S. dollars) | ||||||||
Net Losses Paid
|
$ | (12,656 | ) | $ | (27,456 | ) | ||
Net Change in Case and LAE Reserves
|
(1,768 | ) | 16,121 | |||||
Net Change in IBNR
|
12,719 | 18,115 | ||||||
Net (Increase) Reduction in Loss
and Loss Adjustment
|
||||||||
Expense Liabilities
|
$ | (1,705 | ) | $ | 6,780 | |||
Six Months Ended June 30, | ||||||||
2007 | 2006 | |||||||
(in thousands of U.S. dollars) | ||||||||
Balance as of January 1,
|
$ | 1,214,419 | $ | 806,559 | ||||
Less: Reinsurance Recoverables
|
342,160 | 213,399 | ||||||
872,259 | 593,160 | |||||||
Incurred Related to Prior Years
|
1,705 | (6,780 | ) | |||||
Paids Related to Prior Years
|
(12,656 | ) | (27,456 | ) | ||||
Effect of Exchange Rate Movement
|
8,892 | 4,838 | ||||||
Acquired on Acquisition of
Subsidiaries
|
439,950 | 208,248 | ||||||
Net Balance as at June 30,
|
1,310,150 | 772,010 | ||||||
Plus: Reinsurance Recoverables
|
317,126 | 253,961 | ||||||
Balance as of June 30
|
$ | 1,627,276 | $ | 1,025,971 | ||||
Six Months Ended June 30, | ||||||||||||
2007 | 2006 | Variance | ||||||||||
(in thousands of U.S. dollars) | ||||||||||||
Consulting
|
$ | 18,059 | $ | 10,821 | $ | (7,238 | ) | |||||
Reinsurance
|
5,103 | 3,619 | (1,484 | ) | ||||||||
Total
|
$ | 23,162 | $ | 14,440 | $ | (8,722 | ) | |||||
28
Six Months Ended June 30, | ||||||||||||
2007 | 2006 | Variance | ||||||||||
(in thousands of U.S. dollars) | ||||||||||||
Consulting
|
$ | 8,585 | $ | 6,004 | $ | (2,581 | ) | |||||
Reinsurance
|
5,003 | 2,129 | (2,874 | ) | ||||||||
Total
|
$ | 13,588 | $ | 8,133 | $ | (5,455 | ) | |||||
Six Months Ended June 30, | ||||||||||||
2007 | 2006 | Variance | ||||||||||
(in thousands of U.S. dollars) | ||||||||||||
Consulting
|
$ | | $ | | $ | | ||||||
Reinsurance
|
2,325 | 532 | (1,793 | ) | ||||||||
Total
|
$ | 2,325 | $ | 532 | $ | (1,793 | ) | |||||
Six Months Ended June 30, | ||||||||||||
2007 | 2006 | Variance | ||||||||||
(in thousands of U.S. dollars) | ||||||||||||
Consulting
|
$ | (73 | ) | $ | (1,249 | ) | $ | 1,176 | ||||
Reinsurance
|
3,088 | 9,216 | (6,128 | ) | ||||||||
Total
|
$ | 3,015 | $ | 7,967 | $ | 4,952 | ||||||
29
Six Months Ended June 30, | ||||||||||||||||||||
2007 | 2006 | Variance | ||||||||||||||||||
(in thousands of U.S. dollars) | ||||||||||||||||||||
Consulting
|
$ | (733 | ) | $ | 751 | $ | (1,484 | ) | ||||||||||||
Reinsurance
|
7,826 | 44 | 7,782 | |||||||||||||||||
Total
|
$ | 7,093 | $ | 795 | $ | 6,298 | ||||||||||||||
Six Months Ended June 30, | ||||||||||||
2007 | 2006 | Variance | ||||||||||
(in thousands of U.S. dollars) | ||||||||||||
Consulting
|
$ | | $ | | $ | | ||||||
Reinsurance
|
(4,415 | ) | (5,186 | ) | 771 | |||||||
Total
|
$ | (4,415 | ) | $ | (5,186 | ) | $ | 771 | ||||
Six Months Ended June 30, | ||||||||||||
2007 | 2006 | Variance | ||||||||||
(in thousands of U.S. dollars) | ||||||||||||
Consulting
|
$ | | $ | | $ | | ||||||
Reinsurance
|
15,683 | 4,347 | 11,336 | |||||||||
Total
|
$ | 15,683 | $ | 4,347 | $ | 11,336 | ||||||
30
31
32
| risks associated with implementing our business strategies and initiatives; | |
| the adequacy of our loss reserves and the need to adjust such reserves as claims develop over time; | |
| risks relating to the availability and collectibility of our reinsurance; | |
| tax, regulatory or legal restrictions or limitations applicable to us or the insurance and reinsurance business generally; | |
| increased competitive pressures, including the consolidation and increased globalization of reinsurance providers; | |
| emerging claim and coverage issues; | |
| lengthy and unpredictable litigation affecting assessment of losses and/or coverage issues; | |
| loss of key personnel; | |
| changes in our plans, strategies, objectives, expectations or intentions, which may happen at any time at managements discretion; | |
| operational risks, including system or human failures; | |
| risks that we may require additional capital in the future which may not be available or may be available only on unfavorable terms; | |
| the risk that ongoing or future industry regulatory developments will disrupt our business, or mandate changes in industry practices in ways that increase our costs, decrease our revenues or require us to alter aspects of the way we do business; | |
| changes in Bermuda law or regulation or the political stability of Bermuda; | |
| changes in regulations or tax laws applicable to us or our subsidiaries, or the risk that we or one of our non-U.S. subsidiaries become subject to significant, or significantly increased, income taxes in the United States or elsewhere; | |
| losses due to foreign currency exchange rate fluctuations; | |
| changes in accounting policies or practices; and | |
| changes in economic conditions, including interest rates, inflation, currency exchange rates, equity markets and credit conditions which could affect our investment portfolio. |
33
Item 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
Item 4. | CONTROLS AND PROCEDURES |
Item 1. | LEGAL PROCEEDINGS |
Item 1A. | RISK FACTORS |
34
Item 4. | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS |
Nominee
|
Votes For | Votes Against | Votes Abstained | |||||||||
Gregory L. Curl
|
11,320,920 | 4,257 | 5,886 | |||||||||
Nimrod T. Frazer
|
11,281,676 | 43,626 | 5,261 | |||||||||
Paul J. OShea
|
11,282,268 | 43,134 | 5,161 |
Votes For | Votes Against | Votes Abstained | ||||||||
11,320,012 | 5,460 | 5,091 |
1. | CASTLEWOOD LIMITED |
Nominees:
|
For | Against | Abstain | |||||||||
Paul J. OShea
|
9,190,251 | 1,883 | 11,933 | |||||||||
Richard J. Harris
|
9,190,251 | 1,883 | 11,933 | |||||||||
Adrian Kimberley
|
9,190,251 | 1,833 | 11,933 | |||||||||
Elizabeth Dasilva
|
9,190,251 | 1,883 | 11,933 | |||||||||
Michael Smellie
|
9,190,251 | 1,883 | 11,933 |
2. | CASTLEWOOD (EU) HOLDINGS LTD. |
Nominees:
|
For | Against | Abstain | |||||||||
David Hackett
|
9,190,050 | 1,909 | 12,108 | |||||||||
Alan Turner
|
9,190,050 | 1,909 | 12,108 |
3. | CASTLEWOOD BROKERS LIMITED |
Nominees:
|
For | Against | Abstain | |||||||||
Richard J. Harris
|
9,190,251 | 1,883 | 11,933 | |||||||||
Elizabeth Dasilva
|
9,190,076 | 1,883 | 12,108 | |||||||||
Adrian Kimberley
|
9,190,076 | 1,883 | 12,108 | |||||||||
David Rocke
|
9,190,251 | 1,883 | 11,933 |
35
4. | CASTLEWOOD (EU) LIMITED |
Nominees:
|
For | Against | Abstain | |||||||||
David Hackett
|
9,190,076 | 1,883 | 12,108 | |||||||||
Alan Turner
|
9,190,076 | 1,883 | 12,108 | |||||||||
Steve Aldous
|
9,190,076 | 1,883 | 12,108 | |||||||||
Duncan McLaughlin
|
9,190,076 | 1,883 | 12,108 | |||||||||
Derek Reid
|
9,190,076 | 1,883 | 12,108 | |||||||||
Paul Thomas
|
9,190,076 | 1,883 | 12,108 | |||||||||
David Grisley
|
9,190,076 | 1,883 | 12,108 | |||||||||
David Atkins
|
9,190,076 | 1,883 | 12,108 | |||||||||
Steve Given
|
9,190,076 | 1,883 | 12,108 |
5. | CRANMORE (BERMUDA) LTD. |
Nominees:
|
For | Against | Abstain | |||||||||
Paul J. OShea
|
9,190,055 | 1,909 | 12,103 | |||||||||
Richard J. Harris
|
9,190,055 | 1,909 | 12,103 | |||||||||
Adrian Kimberley
|
9,189,880 | 1,909 | 12,278 | |||||||||
David Rocke
|
9,190,055 | 1,909 | 12,103 |
6. | CRANMORE ADJUSTERS LIMITED |
Nominees:
|
For | Against | Abstain | |||||||||
David Hackett
|
9,189,880 | 1,909 | 12,278 | |||||||||
Alan Turner
|
9,189,880 | 1,909 | 12,278 | |||||||||
Steve Norrington
|
9,189,906 | 1,883 | 12,278 | |||||||||
Phil Cooper
|
9,189,906 | 1,883 | 12,278 | |||||||||
Mark Wood
|
9,189,906 | 1,883 | 12,278 | |||||||||
David Ellis
|
9,189,880 | 1,883 | 12,278 |
7. | BANTRY HOLDINGS LTD. |
Nominees:
|
For | Against | Abstain | |||||||||
Tim Houston
|
9,189,906 | 1,883 | 12,278 | |||||||||
Duncan Scott
|
9,189,906 | 1,883 | 12,278 | |||||||||
Adrian Kimberley
|
9,189,880 | 1,909 | 12,278 |
8. | BLACKROCK HOLDINGS LTD. |
Nominees:
|
For | Against | Abstain | |||||||||
Tim Houston
|
9,189,880 | 1,909 | 12,278 | |||||||||
Duncan Scott
|
9,189,880 | 1,909 | 12,278 | |||||||||
Adrian Kimberley
|
9,189,880 | 1,909 | 12,278 |
36
9. | KENMARE HOLDINGS LIMITED |
Nominees:
|
For | Against | Abstain | |||||||||
Paul J. OShea
|
9,190,055 | 1,909 | 12,103 | |||||||||
Richard J. Harris
|
9,190,055 | 1,909 | 12,103 | |||||||||
Adrian Kimberley
|
9,189,880 | 1,909 | 12,278 | |||||||||
Dominic F. Silvester
|
9,189,906 | 1,883 | 12,278 | |||||||||
Nicholas A. Packer
|
9,189,880 | 1,909 | 12,278 | |||||||||
David Rocke
|
9,190,055 | 1,909 | 12,103 |
10. | KINSALE BROKERS LIMITED |
Nominees:
|
For | Against | Abstain | |||||||||
Phil Hernon
|
9,189,906 | 1,883 | 12,278 | |||||||||
Steve Western
|
9,189,906 | 1,883 | 12,278 | |||||||||
Alan Turner
|
9,189,880 | 1,909 | 12,278 | |||||||||
Steve Norrington
|
9,189,906 | 1,883 | 12,278 | |||||||||
Derek Reid
|
9,189,880 | 1,909 | 12,278 |
11. | REGIS AGENCIES LIMITED |
Nominees:
|
For | Against | Abstain | |||||||||
Alan Turner
|
9,189,880 | 1,909 | 12,278 | |||||||||
Steve Aldous
|
9,189,906 | 1,883 | 12,278 |
12. | FITZWILLIAM (SAC) INSURANCE LIMITED |
Nominees:
|
For | Against | Abstain | |||||||||
Paul J. OShea
|
9,190,055 | 1,909 | 12,103 | |||||||||
Richard J. Harris
|
9,190,055 | 1,909 | 12,103 | |||||||||
Adrian Kimberley
|
9,189,880 | 1,909 | 12,278 | |||||||||
Nicholas A. Packer
|
9,189,880 | 1,909 | 12,278 | |||||||||
David Rocke
|
9,190,055 | 1,909 | 12,278 |
13. | REVIR LIMITED |
Nominees:
|
For | Against | Abstain | |||||||||
Richard J. Harris
|
9,190,055 | 1,909 | 12,103 | |||||||||
Adrian Kimberley
|
9,190,081 | 1,883 | 12,103 | |||||||||
Elizabeth Dasilva
|
9,189,880 | 1,883 | 12,304 | |||||||||
David Rocke
|
9,190,055 | 1,909 | 12,103 |
14. | RIVER THAMES INSURANCE COMPANY |
Nominees:
|
For | Against | Abstain | |||||||||
Alan Turner
|
9,189,880 | 1,909 | 12,278 | |||||||||
Steve Aldous
|
9,190,055 | 1,909 | 12,103 | |||||||||
David Rocke
|
9,190,055 | 1,909 | 12,103 | |||||||||
Max Lewis
|
9,189,880 | 1,909 | 12,278 |
37
15. | OVERSEAS REINSURANCE COMPANY LIMITED |
Nominees:
|
For | Against | Abstain | |||||||||
Paul J. OShea
|
9,189,880 | 1,909 | 12,278 | |||||||||
Richard J. Harris
|
9,189,880 | 1,909 | 12,278 | |||||||||
Adrian Kimberley
|
9,189,880 | 1,909 | 12,278 | |||||||||
David Rocke
|
9,190,055 | 1,898 | 12,103 |
16. | HUDSON REINSURANCE COMPANY LIMITED |
Nominees:
|
For | Against | Abstain | |||||||||
Paul J. OShea
|
9,189,880 | 1,909 | 12,278 | |||||||||
Richard J. Harris
|
9,189,880 | 1,909 | 12,278 | |||||||||
Adrian Kimberley
|
9,189,880 | 1,909 | 12,278 | |||||||||
Duncan Scott
|
9,189,880 | 1,909 | 12,278 | |||||||||
David Rocke
|
9,189,880 | 1,909 | 12,278 |
17. | CAVELL HOLDINGS LIMITED (U.K.) |
Nominees:
|
For | Against | Abstain | |||||||||
Alan Turner
|
9,189,880 | 1,909 | 12,278 | |||||||||
David Rocke
|
9,190,055 | 1,909 | 12,103 | |||||||||
Steve Aldous
|
9,189,880 | 1,909 | 12,278 | |||||||||
Derek Reid
|
9,189,880 | 1,909 | 12,278 |
18. | HARPER HOLDINGS SARL |
Nominees:
|
For | Against | Abstain | |||||||||
Nicholas A. Packer
|
9,189,880 | 1,909 | 12,278 | |||||||||
Jean Baptiste Brekelmans
|
9,189,906 | 1,883 | 12,278 | |||||||||
Marc Torbick
|
9,189,906 | 1,883 | 12,278 |
19. | DENMAN HOLDINGS LIMITED |
Nominees:
|
For | Against | Abstain | |||||||||
Richard J. Harris
|
9,190,055 | 1,909 | 12,103 | |||||||||
John J. Oros
|
9,190,081 | 1,883 | 12,103 | |||||||||
Cameron Leamy
|
9,189,906 | 1,883 | 12,278 | |||||||||
Kenneth Thomson
|
9,189,906 | 1,883 | 12,278 |
20. | HARPER INSURANCE LIMITED |
Nominees:
|
For | Against | Abstain | |||||||||
Richard J. Harris
|
9,190,055 | 1,909 | 12,103 | |||||||||
Nicholas A. Packer
|
9,189,880 | 1,909 | 12,278 | |||||||||
Michael Handler
|
9,189,906 | 1,883 | 12,278 | |||||||||
Florian von Meiss
|
9,189,906 | 1,883 | 12,278 | |||||||||
Walter Boss
|
9,189,906 | 1,883 | 12,278 |
38
21. | HARPER FINANCING LIMITED |
Nominees:
|
For | Against | Abstain | |||||||||
Derek Reid
|
9,189,880 | 1,909 | 12,278 | |||||||||
Brian Walker
|
9,189,906 | 1,883 | 12,278 | |||||||||
Alan Turner
|
9,189,906 | 1,883 | 12,278 |
22. | CASTLEWOOD (US) INC. |
Nominees:
|
For | Against | Abstain | |||||||||
Cheryl D. Davis
|
9,189,880 | 1,909 | 12,278 | |||||||||
John J. Oros
|
9,190,055 | 1,909 | 12,103 | |||||||||
Karl Wall
|
9,189,880 | 1,909 | 12,278 | |||||||||
Donna Stolz
|
9,189,880 | 1,909 | 12,278 |
23. | CASTLEWOOD HOLDINGS (US) INC. |
Nominees:
|
For | Against | Abstain | |||||||||
Cheryl D. Davis
|
9,190,050 | 1,909 | 12,108 | |||||||||
John J. Oros
|
9,190,225 | 1,909 | 11,933 | |||||||||
Karl Wall
|
9,190,225 | 1,909 | 12,108 | |||||||||
Donna Stolz
|
9,190,050 | 1,909 | 12,108 |
24. | CRANMORE (US) INC. |
Nominees:
|
For | Against | Abstain | |||||||||
Cheryl D. Davis
|
9,189,880 | 1,909 | 12,278 | |||||||||
John J. Oros
|
9,190,055 | 1,909 | 12,103 | |||||||||
Karl Wall
|
9,189,880 | 1,909 | 12,278 | |||||||||
Donna Stolz
|
9,189,880 | 1,909 | 12,278 |
25. | CASTLEWOOD INVESTMENTS, INC. |
Nominees:
|
For | Against | Abstain | |||||||||
Cheryl D. Davis
|
9,190,050 | 1,909 | 12,108 | |||||||||
John J. Oros
|
9,190,225 | 1,909 | 11,933 | |||||||||
Karl Wall
|
9,190,050 | 1,909 | 12,108 | |||||||||
Donna Stolz
|
9,190,050 | 1,909 | 12,108 |
26. | LONGMYND INSURANCE COMPANY LTD. |
Nominees:
|
For | Against | Abstain | |||||||||
David Hackett
|
9,189,880 | 1,909 | 12,278 | |||||||||
David Rocke
|
9,190,055 | 1,909 | 12,103 | |||||||||
Steve Aldous
|
9,189,880 | 1,909 | 12,278 | |||||||||
Alan Turner
|
9,189,880 | 1,909 | 12,278 |
39
27. | MERCANTILE INDEMNITY COMPANY LTD. |
Nominees:
|
For | Against | Abstain | |||||||||
David Hackett
|
9,189,880 | 1,909 | 12,278 | |||||||||
David Rocke
|
9,190,055 | 1,909 | 12,103 | |||||||||
Alan Turner
|
9,189,880 | 1,909 | 12,278 | |||||||||
Steve Aldous
|
9,189,880 | 1,909 | 12,278 | |||||||||
Derek Reid
|
9,189,880 | 1,909 | 12,278 |
28. | FIELDMILL INSURANCE COMPANY LTD. |
Nominees:
|
For | Against | Abstain | |||||||||
David Hackett
|
9,189,880 | 1,909 | 12,278 | |||||||||
David Rocke
|
9,190,055 | 1,909 | 12,103 | |||||||||
Steve Aldous
|
9,189,880 | 1,909 | 12,278 | |||||||||
Alan Turner
|
9,189,880 | 1,909 | 12,278 |
29. | VIRGINIA HOLDINGS LTD. |
Nominees:
|
For | Against | Abstain | |||||||||
Paul J. OShea
|
9,190,055 | 1,909 | 12,103 | |||||||||
Richard J. Harris
|
9,190,055 | 1,909 | 12,103 | |||||||||
Adrian Kimberley
|
9,189,880 | 1,909 | 12,278 | |||||||||
David Rocke
|
9,190,055 | 1,909 | 12,103 |
30. | UNIONE ITALIANA (UK) REINSURANCE COMPANY |
Nominees:
|
For | Against | Abstain | |||||||||
David Rocke
|
9,190,055 | 1,909 | 12,103 | |||||||||
Alan Turner
|
9,189,880 | 1,909 | 12,278 | |||||||||
Steve Aldous
|
9,190,055 | 1,909 | 12,103 | |||||||||
Derek Reid
|
9,189,880 | 1,883 | 12,278 |
31. | CAVELL INSURANCE COMPANY LIMITED |
Nominees:
|
For | Against | Abstain | |||||||||
Alan Turner
|
9,189,880 | 1,909 | 12,278 | |||||||||
David Rocke
|
9,190,055 | 1,909 | 12,103 | |||||||||
Steve Aldous
|
9,190,055 | 1,909 | 12,103 | |||||||||
Derek Reid
|
9,189,880 | 1,909 | 12,278 | |||||||||
Darren Truman
|
9,189,906 | 1,883 | 12,278 |
32. | OCEANIA HOLDINGS LTD. |
Nominees:
|
For | Against | Abstain | |||||||||
Paul J. OShea
|
9,190,055 | 1,909 | 12,103 | |||||||||
David Rocke
|
9,190,055 | 1,909 | 12,103 | |||||||||
Richard J. Harris
|
9,190,055 | 1,909 | 12,103 | |||||||||
Adrian Kimberley
|
9,189,880 | 1,909 | 12,278 | |||||||||
Tim Houston
|
9,189,906 | 1,883 | 12,278 |
40
33. | CIRRUS RE COMPANY A/S |
Nominees:
|
For | Against | Abstain | |||||||||
Alan Turner
|
9,189,880 | 1,909 | 12,278 | |||||||||
David Rocke
|
9,190,055 | 1,909 | 12,103 | |||||||||
Steve Aldous
|
9,190,055 | 1,909 | 12,103 | |||||||||
Jan Endressen
|
9,189,906 | 1,883 | 12,278 |
34. | INTER-OCEAN HOLDINGS LIMITED |
Nominees:
|
For | Against | Abstain | |||||||||
Paul J. OShea
|
9,190,055 | 1,909 | 12,103 | |||||||||
Tim Houston
|
9,189,906 | 1,883 | 12,278 | |||||||||
Orla Gregory
|
9,189,906 | 1,883 | 12,103 | |||||||||
Richard J. Harris
|
9,190,055 | 1,909 | 12,278 | |||||||||
Adrian Kimberley
|
9,189,880 | 1,909 | 12,278 |
35. | ENSTAR USA, INC. |
Nominees:
|
For | Against | Abstain | |||||||||
John J. Oros
|
9,190,050 | 1,909 | 12,103 | |||||||||
Cheryl D. Davis
|
9,189,880 | 1,909 | 12,278 | |||||||||
Karl J. Wall
|
9,189,880 | 1,909 | 12,278 |
36. | INTER-OCEAN SERVICES LTD. |
Nominees:
|
For | Against | Abstain | |||||||||
Paul J. OShea
|
9,190,055 | 1,909 | 12,103 | |||||||||
Tim Houston
|
9,189,906 | 1,883 | 12,278 | |||||||||
Orla Gregory
|
9,189,906 | 1,883 | 12,278 | |||||||||
Richard J. Harris
|
9,190,055 | 1,909 | 12,103 | |||||||||
Adrian Kimberley
|
9,189,880 | 1,909 | 12,278 |
37. | INTER-OCEAN CREDIT PRODUCTS LTD. |
Nominees:
|
For | Against | Abstain | |||||||||
Paul J. OShea
|
9,190,055 | 1,909 | 12,103 | |||||||||
Orla Gregory
|
9,189,880 | 1,909 | 12,278 | |||||||||
Richard J. Harris
|
9,190,055 | 1,909 | 12,103 | |||||||||
Adrian Kimberley
|
9,189,880 | 1,909 | 12,278 |
38. | HILLCOT UNDERWRITING MANAGEMENT |
Nominees:
|
For | Against | Abstain | |||||||||
Alan Turner
|
9,189,880 | 1,909 | 12,278 | |||||||||
David Rocke
|
9,190,055 | 1,909 | 12,103 | |||||||||
Steve Aldous
|
9,190,055 | 1,909 | 12,103 |
41
39. | INTER-OCEAN REINSURANCE COMPANY LTD. |
Nominees:
|
For | Against | Abstain | |||||||||
Paul J. OShea
|
9,190,055 | 1,909 | 12,103 | |||||||||
Tim Houston
|
9,189,880 | 1,909 | 12,278 | |||||||||
Orla Gregory
|
9,189,880 | 1,909 | 12,278 | |||||||||
Richard J. Harris
|
9,190,055 | 1,909 | 12,103 | |||||||||
Adrian Kimberley
|
9,189,880 | 1,909 | 12,278 |
40. | INTER-OCEAN REINSURANCE (IRELAND) LTD. |
Nominees:
|
For | Against | Abstain | |||||||||
Richard J. Harris
|
9,190,055 | 1,909 | 12,103 | |||||||||
Nicholas A. Packer
|
9,189,880 | 1,909 | 12,278 | |||||||||
Orla Gregory
|
9,189,880 | 1,909 | 12,278 | |||||||||
Kevin OConnor
|
9,189,880 | 1,909 | 12,278 |
41. | ENSTAR FINANCIAL SERVICES, INC. |
Nominees:
|
For | Against | Abstain | |||||||||
John J. Oros
|
9,189,880 | 2,228 | 11,959 | |||||||||
Cheryl D. Davis
|
9,190,050 | 1,909 | 12,108 |
42. | HILLCOT HOLDINGS LIMITED |
Nominees:
|
For | Against | Abstain | |||||||||
Paul J. OShea
|
9,190,055 | 1,909 | 12,103 | |||||||||
Richard J. Harris
|
9,190,055 | 1,909 | 12,103 | |||||||||
Adrian Kimberley
|
9,189,880 | 1,909 | 12,278 | |||||||||
Mark Cutis
|
9,189,906 | 1,883 | 12,278 | |||||||||
Masazumi Kato
|
9,189,906 | 1,883 | 12,278 |
43. | HILLCOT REINSURANCE LIMITED |
Nominees:
|
For | Against | Abstain | |||||||||
Alan Turner
|
9,189,880 | 1,909 | 12,278 | |||||||||
Steve Aldous
|
9,190,055 | 1,909 | 12,103 | |||||||||
David Rocke
|
9,190,055 | 1,909 | 12,103 | |||||||||
Masazumi Kato
|
9,189,906 | 1,883 | 12,278 | |||||||||
Max Lewis
|
9,189,906 | 1,883 | 12,278 |
44. | BRAMPTON INSURANCE COMPANY LIMITED |
Nominees:
|
For | Against | Abstain | |||||||||
Alan Turner
|
9,189,880 | 1,909 | 12,278 | |||||||||
David Rocke
|
9,190,055 | 1,909 | 12,103 | |||||||||
Steve Aldous
|
9,190,055 | 1,909 | 12,103 | |||||||||
Max Lewis
|
9,189,880 | 1,909 | 12,278 |
42
45. | ENSTAR GROUP OPERATIONS, INC. |
Nominees:
|
For | Against | Abstain | |||||||||
John J. Oros
|
9,189,880 | 2,228 | 11,959 | |||||||||
Cheryl D. Davis
|
9,190,050 | 1,909 | 12,108 |
46. | B.H. ACQUISITION LTD. |
Nominees:
|
For | Against | Abstain | |||||||||
Adrian Kimberley
|
9,189,880 | 1,909 | 12,278 | |||||||||
Richard J. Harris
|
9,190,055 | 1,909 | 12,103 | |||||||||
Paul J. OShea
|
9,190,055 | 1,909 | 12,103 | |||||||||
David Rocke
|
9,190,055 | 1,909 | 12,103 |
47. | BRITTANY INSURANCE COMPANY LTD. |
Nominees:
|
For | Against | Abstain | |||||||||
Paul J. OShea
|
9,190,055 | 1,909 | 12,103 | |||||||||
Richard J. Harris
|
9,190,055 | 1,909 | 12,103 | |||||||||
Adrian Kimberley
|
9,189,880 | 1,909 | 12,278 |