Ct Healthmarket via BizWire
07-31-2003, 04:50 PM
NEW YORK--(BUSINESS WIRE)--July 31, 2003--Odyssey Re Holdings
Corp. (NYSE: ORH; TSX: ORH) today reported its second quarter results,
which include record net income, premium volume and growth in book
value.
Net income after tax amounted to $112.7 million, or $1.73 per
common share for the quarter ended June 30, 2003, compared to $32.8
million or $0.50 per common share for the quarter ended June 30, 2002.
All references to per share amounts in this earnings release are on a
diluted basis. Included in the second quarter 2003 and 2002 net income
were net realized capital gains of $131.6 million and $18.2 million,
respectively, which on an after-tax basis, amounted to $85.5 million
and $11.8 million, or $1.31 and $0.18 per common share, respectively.
For the six months ended June 30, 2003, net income after tax was
$159.3 million, or $2.45 per common share, compared to net income
after tax of $89.1 million, or $1.37 per common share for the six
months ended June 30, 2002, which included a gain of $36.9 million, or
$0.57 per common share, resulting from the full amortization of
negative goodwill in accordance with new accounting principles in
2002. Net after-tax realized capital gains for the six months ended
June 30, 2003 were $110.4 million, or $1.70 per common share, compared
to $12.3 million, or $0.19 per common share for the six months ended
June 30, 2002.
Operating income after taxes, which excludes realized capital
gains and the amortization of goodwill, for the second quarter 2003
was $27.2 million, or $0.42 per common share, compared to $21.0
million, or $0.32 per common share for the second quarter 2002.
Operating income after tax was $48.9 million, or $0.75 per common
share, and $39.9 million, or $0.61 per common share for the six months
ended June 30, 2003 and 2002, respectively.
The net combined ratio for the second quarter 2003 was 96.4%
compared to 98.8% for the second quarter 2002. For the six months
ended June 30, 2003, the combined ratio improved by 1.2 percentage
points to 97.6% from 98.8% for the first half of 2002.
Stockholders' equity amounted to $1.3 billion at June 30, 2003, an
increase of $228.8 million, or 21.7%, compared to December 31, 2002
and an increase of $326.6 million, or 34.1%, compared to June 30,
2002.
Commenting on the second quarter and first half results, Andrew A.
Barnard, President and Chief Executive Officer, stated, "We are
pleased to report record levels of revenue and income for the second
quarter. Most importantly, OdysseyRe's book value per share has grown
at a pace significantly ahead of our target return on equity of 15%.
This performance has resulted from the combination of our disciplined
underwriting with a total return, value oriented investment approach."
Gross premiums written for the three months ended June 30, 2003
were $609.9 million, an increase of $181.7 million, or 42.4%, compared
to $428.2 million for the three months ended June 30, 2002. Net
premiums written for the second quarter 2003 were $542.7 million, an
increase of 46.3% over the prior year's second quarter net premiums
written of $370.9 million. Premium growth was evident throughout
OdysseyRe's four business divisions - the Americas, EuroAsia, London
Market and U.S. Insurance. Gross premiums written increased in the
second quarter 2003 compared to the second quarter 2002 by 22.4% in
the Americas, 64.5% in EuroAsia, 73.9% in the London Market, and
105.8% in the U.S. Insurance division. Effective January 1, 2003,
insurance business underwritten by Hudson Insurance Company, which was
previously included in the Americas division, and the 2003 new and
renewal Healthcare business have been combined into a new business
division, U.S. Insurance. For comparative purposes, the 2002 division
information included in this earnings release has been restated on a
basis consistent with the 2003 structure.
Total net investment results, which include net investment income
and net realized gains, amounted to $158.3 million in the second
quarter 2003, compared to $48.2 million in the second quarter 2002.
Net investment income, excluding net realized capital gains, amounted
to $26.7 million for the second quarter 2003, compared to $30.0
million for the second quarter 2002. Net realized capital gains
increased to $131.6 million for the three months ended June 30, 2003
from $18.2 million for the second quarter of 2002. The Company
recognized net realized capital gains of $286.7 million over the last
twelve month period. Realized capital gains were predominately from
the sale of fixed income securities. Pre-tax unrealized capital gains
were $128.0 million at June 30, 2003.
For the three months ended June 30, 2003, net cash flow from
operations was $101.8 million, compared to cash flow from operations
of $42.0 million for the second quarter 2002. For the six months ended
June 30, 2003 net cash flow from operations amounted to $213.2
million, compared to the year ago six months figure of $57.5 million.
At June 30, 2003 investments and cash totaled $3.6 billion, an
increase of $527.7 million from December 31, 2002; total assets
amounted to $5.7 billion at June 30, 2003. Net book value per common
share at June 30, 2003 was $19.77, an increase of $3.52 per share from
$16.25 at December 31, 2002.
OdysseyRe paid a cash dividend of $0.025 per share on June 30,
2003. The total dividend payment amounted to approximately $1.6
million.
Odyssey Re Holdings Corp. is a leading worldwide underwriter of
property and casualty treaty, program and facultative reinsurance, as
well as specialty insurance. OdysseyRe operates through its
subsidiaries, Odyssey America Reinsurance Corporation, Hudson
Insurance Company and Newline Underwriting Management Limited.
With $1.3 billion in stockholders' equity at June 30, 2003, the
Company underwrites through four divisions: Americas, EuroAsia, London
Market and U.S. Insurance, with major underwriting centers in the
United States, London, Paris, Singapore, Latin America and Toronto.
Odyssey Re Holdings Corp. is listed on the New York Stock Exchange
and the Toronto Stock Exchange under the symbol ORH. OdysseyRe is
rated "A" (Excellent) by A.M. Best Company and "A-" (Strong) by
Standard & Poor's.
Certain statements contained herein may constitute forward-looking
statements and are made pursuant to the "safe harbor" provisions of
the Private Securities Litigation Reform Act of 1995. Such
forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause the actual results,
performance or achievements of the Company to be materially different
from any future results, performance or achievements expressed or
implied by such forward-looking statements. Such factors include,
among others, the following: the occurrence of catastrophic events
with a frequency or severity exceeding the Company's estimates; the
lowering or loss of one of the Company's financial or claims-paying
ratings, including those of the Company's subsidiaries; changes in
interest rates; changes in premium volumes; increased competition;
regulatory and legislative changes; changes in loss payment patterns;
changes in estimated overall adequacy of loss and LAE reserves;
changes in key management personnel; changes in general market or
economic conditions; and other factors which are described in the
Company's filings with the Securities and Exchange Commission.
Visit OdysseyRe's Web site - www.odysseyre.com - for additional
information about the Company. In addition, anyone may view the
Company's historical press releases and filings with the Securities
and Exchange Commission, which provide additional data regarding the
Company's prior quarterly and year-to-date results. This historical
information may be found on OdysseyRe's web site under "Financial
Information."
Consolidated financial and division information follows:
ODYSSEY RE HOLDINGS CORP.
CONSOLIDATED BALANCE SHEETS
JUNE 30, 2003 (UNAUDITED) AND DECEMBER 31, 2002
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
June December
30, 31,
2003 2002
---------- ----------
ASSETS
Investments and cash:
Fixed income securities, at fair
value (amortized cost $1,402,692
and $1,964,758, respectively) $1,493,345 $1,992,574
Redeemable preferred stock, at
fair value (cost $13,398 and
$13,398, respectively) 13,780 12,694
Equity securities:
Common stocks, at fair value
(cost $147,041 and $146,028,
respectively) 173,833 152,560
Common stocks, at equity 107,557 101,021
Short-term investments, at cost
which approximates fair value 136,494 189,161
Other invested assets 166,919 149,649
Cash and cash equivalents 1,518,191 484,744
---------- ----------
Total investments and cash 3,610,119 3,082,403
Investment income due and accrued 21,365 26,358
Reinsurance balances receivable 526,226 430,491
Reinsurance recoverable on loss payments 151,826 80,473
Reinsurance recoverable on unpaid losses 907,958 1,026,979
Prepaid reinsurance premiums 83,242 92,525
Funds held by ceding insurers 132,247 112,747
Deferred acquisition costs 144,546 128,890
Deferred federal and foreign income taxes 75,875 108,314
Other assets 65,658 215,780
---------- ----------
Total assets $5,719,062 $5,304,960
========== ==========
LIABILITIES
Unpaid losses and loss adjustment expenses $3,065,532 $2,871,552
Unearned premiums 700,782 602,562
Debt obligations 206,121 206,340
Reinsurance balances payable 159,382 108,257
Funds held under reinsurance contracts 145,165 238,233
Current federal and foreign income taxes 33,019 1,285
Other liabilities 124,208 220,648
---------- ----------
Total liabilities 4,434,209 4,248,877
========== ==========
STOCKHOLDERS' EQUITY
Preferred stock, $0.01 par value; 200,000,000
shares authorized; 0 shares issued - -
Common stock, $0.01 par value; 500,000,000
shares authorized; 65,142,857 shares issued 651 651
Additional paid-in capital 793,334 793,334
Treasury stock, 138,894 shares, at cost (2,305) (2,305)
Unearned compensation (4,005) (4,572)
Accumulated other comprehensive income,
net of deferred income taxes 93,923 21,736
Retained earnings 403,255 247,239
---------- ----------
Total stockholders' equity 1,284,853 1,056,083
---------- ----------
Total liabilities and
stockholders' equity $5,719,062 $5,304,960
========== ===========
ODYSSEY RE HOLDINGS CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
SIX MONTHS AND THREE MONTHS ENDED JUNE 30, 2003 AND 2002 (UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
Six Months Six Months Three Months Three Months
Ended Ended Ended Ended
June 30, June 30, June 30, June 30,
2003 2002 2003 2002
REVENUES
Gross premiums
written $ 1,173,717 $ 831,927 $ 609,876 $ 428,174
Ceded premiums
written 141,074 98,234 67,162 57,302
------------ ------------ ------------ -----------
Net premiums
written 1,032,643 733,693 542,714 370,872
Increase in
unearned premiums (104,172) (98,519) (61,566) (19,013)
------------ ------------ ------------ -----------
Net premiums
earned 928,471 635,174 481,148 351,859
Net investment
income 59,140 58,228 26,740 30,025
Net realized
investment gains 169,815 18,950 131,551 18,213
------------ ------------ ------------ -----------
Total revenues 1,157,426 712,352 639,439 400,097
------------ ------------ ------------ -----------
EXPENSES
Losses and loss
adjustment
expenses 627,459 436,910 321,734 245,560
Acquisition costs 233,095 157,466 116,997 85,860
Other underwriting
expenses 45,963 33,112 25,204 16,277
Other expense, net 3,697 1,653 730 927
Interest expense 4,929 4,396 2,883 2,214
------------ ------------ ------------ -----------
Total expenses 915,143 633,537 467,548 350,838
------------ ------------ ------------ -----------
Income before
income taxes
and
cumulative
effect of
a change in
accounting
principle 242,283 78,815 171,891 49,259
------------ ------------ ------------ -----------
Federal and foreign
income tax provision
(benefit):
Current 89,448 - 55,728 -
Deferred (6,431) 26,589 3,476 16,434
------------ ------------ ------------ -----------
Total federal
and foreign
income tax
provision 83,017 26,589 59,204 16,434
------------ ------------ ------------ -----------
Income before
cumulative effect
of a change in
accounting
principle 159,266 52,226 112,687 32,825
Cumulative effect
of a change in
accounting
principle - 36,862 - -
------------ ------------ ------------ -----------
NET INCOME $ 159,266 $ 89,088 $ 112,687 $ 32,825
============ ============ ============= ==========
BASIC
Weighted average
shares outstanding 64,721,288 64,745,993 64,732,356 64,750,028
============ ============ ============ ===========
Basic earnings per
share $ 2.46 $ 1.38 $ 1.74 $ 0.51
============ ============ ============ ===========
DILUTED
Weighted average
shares outstanding 65,085,416 65,134,081 65,121,690 65,127,351
============ ============ ============ ===========
Diluted earnings
per share $ 2.45 $ 1.37 $ 1.73 $ 0.50
============ ============ ============ ===========
DIVIDENDS
Dividends declared
per share $ 0.05 $ 0.05 $ 0.025 $ 0.025
============ ============ ============ ===========
COMPREHENSIVE
INCOME
Net income $ 159,266 $ 89,088 $ 112,687 $ 32,825
Other comprehensive
income, net of tax 72,187 52,013 44,704 56,448
------------ ------------ ------------ -----------
Comprehensive
income $ 231,453 $ 141,101 $ 157,391 $ 89,273
============ ============ ============ ===========
ODYSSEY RE HOLDINGS CORP.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
SIX MONTHS ENDED JUNE 30, 2003 AND 2002 (UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
Six Months Six Months
Ended Ended
June 30, June 30,
2003 2002
COMMON STOCK
Balance, beginning and end of period $ 651 $ 651
------------ ------------
ADDITIONAL PAID-IN CAPITAL
Balance, beginning and end of period 793,334 793,334
------------ ------------
TREASURY STOCK
Balance, beginning of period (2,305) -
Purchases during period - (1,181)
Reissuance during period - 100
------------ ------------
Balance, end of period (2,305) (1,081)
------------ ------------
UNEARNED COMPENSATION
Balance, beginning of period (4,572) (5,704)
Amortization during the period 567 568
------------ ------------
Balance, end of period (4,005) (5,136)
------------ ------------
ACCUMULATED OTHER COMPREHENSIVE INCOME
(LOSS), NET OF
DEFERRED INCOME TAXES
Balance, beginning of period 21,736 (12,985)
Net increase during the period 72,187 52,013
------------ ------------
Balance, end of period 93,923 39,028
------------ ------------
RETAINED EARNINGS
Balance, beginning of period 247,239 45,576
Net income 159,266 89,088
Dividends to stockholders (3,250) (3,256)
------------ ------------
Balance, end of period 403,255 131,408
------------ ------------
TOTAL STOCKHOLDERS' EQUITY $ 1,284,853 $ 958,204
============ ============
COMMON SHARES (SHARES OUTSTANDING)
Balance, beginning of period 65,003,963 65,142,857
Net treasury shares acquired - (67,294)
------------ ------------
Balance, end of period 65,003,963 65,075,563
============ ============
ODYSSEY RE HOLDINGS CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED JUNE 30, 2003 AND 2002 (UNAUDITED)
(IN THOUSANDS)
Six Months Six Months
Ended Ended
June 30, 2003 June 30, 2002
OPERATING ACTIVITIES
Net income $ 159,266 $ 89,088
Less: cumulative effect of a change
in accounting Principle - (36,862)
------------- ------------
Income before cumulative effect of
a change in accounting principle 159,266 52,226
Adjustments to reconcile net income to net
cash provided by operating activities:
Reinsurance balances and funds held,
net (228,532) (107,142)
Unearned premiums 107,504 99,603
Unpaid losses and loss adjustment
expenses 313,000 1,370
Federal and foreign income taxes 25,304 26,508
Other assets and liabilities, net 26,361 27,554
Deferred acquisition costs (15,656) (22,845)
Net realized investment gains (169,815) (18,950)
Bond discount amortization, net (4,263) (802)
------------- ------------
Net cash provided by operating
activities 213,169 57,522
------------- ------------
INVESTING ACTIVITIES
Maturities of fixed income securities 17,050 2,318
Sales of fixed income securities 3,766,631 388,418
Purchases of fixed income securities (3,019,833) (503,625)
Sales of equity securities 71,752 31,014
Purchases of equity securities (67,079) (56,499)
Purchases of other invested assets (6,327) (3,881)
Decrease in short-term investments 52,667 12,213
------------- ------------
Net cash provided by (used in)
investing activities 814,861 (130,042)
------------- ------------
FINANCING ACTIVITIES
Dividends (3,250) (3,256)
Additional borrowings - 107,494
Repayment of debt principal - (110,000)
Sale of interest rate contract 8,667 -
Purchase of treasury stock - (1,181)
------------- ------------
Net cash provided by (used in)
financing activities 5,417 (6,943)
------------- ------------
Increase (decrease) in cash and cash
equivalents 1,033,447 (79,463)
Cash and cash equivalents, beginning of
period 484,744 375,142
------------- ------------
Cash and cash equivalents, end of
period $ 1,518,191 $ 295,679
============= ============
ODYSSEY RE HOLDINGS CORP.
BUSINESS DIVISIONS
FOR THE SIX AND THREE MONTHS ENDED
JUNE 30, 2003 AND 2002
(UNAUDITED)
(IN THOUSANDS)
Six Months Six Months
Ended Ended
June 30, June 30, %
2003 2002 Change
------------ ------------ -------------
Gross Premiums Written
Americas* $ 682,135 $ 565,421 20.6 %
EuroAsia 182,169 104,776 73.9
London Market 190,345 131,054 45.2
U.S. Insurance* 137,871 46,739 195.0
----------- ------------
Total $1,173,717 $ 831,927 41.1 %
=========== ============
Net Premiums Written
Americas $ 633,339 $ 521,051 21.6 %
EuroAsia 172,745 100,696 71.6
London Market 165,344 100,695 64.2
U.S. Insurance 61,215 11,251 444.1
----------- ------------
Total $1,032,643 $ 733,693 40.7 %
=========== ============
Net Premiums Earned
Americas $ 584,762 $ 462,321 26.5 %
EuroAsia 164,508 89,461 83.9
London Market 146,272 75,771 93.0
U.S. Insurance 32,929 7,621 332.1
----------- ------------
Total $ 928,471 $ 635,174 46.2 %
=========== ============
Three Months Three Months
Ended Ended
June 30, June 30, %
2003 2002 Change
------------ ------------ -------------
Gross Premiums Written
Americas* $ 340,747 $ 278,476 22.4 %
EuroAsia 99,274 60,342 64.5
London Market 117,275 67,447 73.9
U.S. Insurance* 57,272 27,835 105.8
------------ ------------
Total $ 609,876 $ 428,174 42.4 %
============ ============
Net Premiums Written
Americas $ 314,720 $ 254,435 23.7 %
EuroAsia 92,668 59,203 56.5
London Market 106,836 49,692 115.0
U.S. Insurance 28,490 7,542 277.8
------------ ------------
Total $ 542,714 $ 370,872 46.3 %
============ ============
Net Premiums Earned
Americas $ 293,483 $ 253,576 15.7 %
EuroAsia 86,925 54,696 58.9
London Market 82,305 38,843 111.9
U.S. Insurance 18,435 4,744 288.6
------------ ------------
Total $ 481,148 $ 351,859 36.7 %
============ ============
Six Months Six Months
Ended Ended Percentage
June 30, June 30, Point
2003 2002 Change
------------ ------------ -------------
Losses and Loss
Adjustment Expense Ratio
Americas 68.0 % 67.9 % 0.1 %
EuroAsia 68.6 72.0 (3.4)
London Market 63.8 69.0 (5.2)
U.S. Insurance 71.2 82.8 (11.6)
Total 67.6 % 68.8 % (1.2)%
Acquisition Cost and Other
Underwriting Expense Ratio
Americas 0.8
32.4 % 31.6 % %
EuroAsia 23.9 27.3 (3.4)
London Market 29.2 25.6 3.6
U.S. Insurance 22.6 10.8 11.8
Total 30.0 % 30.0 % 0.0 %
Combined Ratio
Americas 100.4 % 99.5 % 0.9 %
EuroAsia 92.5 99.3 (6.8)
London Market 93.0 94.6 (1.6)
U.S. Insurance 93.8 93.6 0.2
Total 97.6 % 98.8 % (1.2)%
Three Months Three Months
Ended Ended Percentage
June 30, June 30, Point
2003 2002 Change
------------ ------------ -------------
Losses and Loss
Adjustment Expense Ratio
Americas 66.4% 68.8% (2.4)%
EuroAsia 70.4 73.6 (3.2)
London Market 64.8 69.9 (5.1)
U.S. Insurance 66.6 78.3 (11.7)
Total 66.9% 69.8% (2.9)%
Acquisition Cost and Other
Underwriting Expense Ratio
Americas 31.4% 31.1% 0.3 %
EuroAsia 24.7 25.3 (0.6)
London Market 28.6 23.9 4.7
U.S. Insurance 28.0 2.7 25.3
Total 29.5% 29.0% 0.5 %
Combined Ratio
Americas 97.8% 99.9% (2.1)%
EuroAsia 95.1 98.9 (3.8)
London Market 93.4 93.8 (0.4)
U.S. Insurance 94.6 81.0 13.6
Total 96.4% 98.8% (2.4)%
*A portion of the Gross Premiums Written by the U.S. Insurance
division has been ceded to, and are also included in the Americas
division's Gross Premiums Written. Accordingly, the sum of the Gross
Premiums Written for each division does not agree to the total Gross
Premiums Written as shown in the table above and as reflected in the
Consolidated Statements of Operations.
Corp. (NYSE: ORH; TSX: ORH) today reported its second quarter results,
which include record net income, premium volume and growth in book
value.
Net income after tax amounted to $112.7 million, or $1.73 per
common share for the quarter ended June 30, 2003, compared to $32.8
million or $0.50 per common share for the quarter ended June 30, 2002.
All references to per share amounts in this earnings release are on a
diluted basis. Included in the second quarter 2003 and 2002 net income
were net realized capital gains of $131.6 million and $18.2 million,
respectively, which on an after-tax basis, amounted to $85.5 million
and $11.8 million, or $1.31 and $0.18 per common share, respectively.
For the six months ended June 30, 2003, net income after tax was
$159.3 million, or $2.45 per common share, compared to net income
after tax of $89.1 million, or $1.37 per common share for the six
months ended June 30, 2002, which included a gain of $36.9 million, or
$0.57 per common share, resulting from the full amortization of
negative goodwill in accordance with new accounting principles in
2002. Net after-tax realized capital gains for the six months ended
June 30, 2003 were $110.4 million, or $1.70 per common share, compared
to $12.3 million, or $0.19 per common share for the six months ended
June 30, 2002.
Operating income after taxes, which excludes realized capital
gains and the amortization of goodwill, for the second quarter 2003
was $27.2 million, or $0.42 per common share, compared to $21.0
million, or $0.32 per common share for the second quarter 2002.
Operating income after tax was $48.9 million, or $0.75 per common
share, and $39.9 million, or $0.61 per common share for the six months
ended June 30, 2003 and 2002, respectively.
The net combined ratio for the second quarter 2003 was 96.4%
compared to 98.8% for the second quarter 2002. For the six months
ended June 30, 2003, the combined ratio improved by 1.2 percentage
points to 97.6% from 98.8% for the first half of 2002.
Stockholders' equity amounted to $1.3 billion at June 30, 2003, an
increase of $228.8 million, or 21.7%, compared to December 31, 2002
and an increase of $326.6 million, or 34.1%, compared to June 30,
2002.
Commenting on the second quarter and first half results, Andrew A.
Barnard, President and Chief Executive Officer, stated, "We are
pleased to report record levels of revenue and income for the second
quarter. Most importantly, OdysseyRe's book value per share has grown
at a pace significantly ahead of our target return on equity of 15%.
This performance has resulted from the combination of our disciplined
underwriting with a total return, value oriented investment approach."
Gross premiums written for the three months ended June 30, 2003
were $609.9 million, an increase of $181.7 million, or 42.4%, compared
to $428.2 million for the three months ended June 30, 2002. Net
premiums written for the second quarter 2003 were $542.7 million, an
increase of 46.3% over the prior year's second quarter net premiums
written of $370.9 million. Premium growth was evident throughout
OdysseyRe's four business divisions - the Americas, EuroAsia, London
Market and U.S. Insurance. Gross premiums written increased in the
second quarter 2003 compared to the second quarter 2002 by 22.4% in
the Americas, 64.5% in EuroAsia, 73.9% in the London Market, and
105.8% in the U.S. Insurance division. Effective January 1, 2003,
insurance business underwritten by Hudson Insurance Company, which was
previously included in the Americas division, and the 2003 new and
renewal Healthcare business have been combined into a new business
division, U.S. Insurance. For comparative purposes, the 2002 division
information included in this earnings release has been restated on a
basis consistent with the 2003 structure.
Total net investment results, which include net investment income
and net realized gains, amounted to $158.3 million in the second
quarter 2003, compared to $48.2 million in the second quarter 2002.
Net investment income, excluding net realized capital gains, amounted
to $26.7 million for the second quarter 2003, compared to $30.0
million for the second quarter 2002. Net realized capital gains
increased to $131.6 million for the three months ended June 30, 2003
from $18.2 million for the second quarter of 2002. The Company
recognized net realized capital gains of $286.7 million over the last
twelve month period. Realized capital gains were predominately from
the sale of fixed income securities. Pre-tax unrealized capital gains
were $128.0 million at June 30, 2003.
For the three months ended June 30, 2003, net cash flow from
operations was $101.8 million, compared to cash flow from operations
of $42.0 million for the second quarter 2002. For the six months ended
June 30, 2003 net cash flow from operations amounted to $213.2
million, compared to the year ago six months figure of $57.5 million.
At June 30, 2003 investments and cash totaled $3.6 billion, an
increase of $527.7 million from December 31, 2002; total assets
amounted to $5.7 billion at June 30, 2003. Net book value per common
share at June 30, 2003 was $19.77, an increase of $3.52 per share from
$16.25 at December 31, 2002.
OdysseyRe paid a cash dividend of $0.025 per share on June 30,
2003. The total dividend payment amounted to approximately $1.6
million.
Odyssey Re Holdings Corp. is a leading worldwide underwriter of
property and casualty treaty, program and facultative reinsurance, as
well as specialty insurance. OdysseyRe operates through its
subsidiaries, Odyssey America Reinsurance Corporation, Hudson
Insurance Company and Newline Underwriting Management Limited.
With $1.3 billion in stockholders' equity at June 30, 2003, the
Company underwrites through four divisions: Americas, EuroAsia, London
Market and U.S. Insurance, with major underwriting centers in the
United States, London, Paris, Singapore, Latin America and Toronto.
Odyssey Re Holdings Corp. is listed on the New York Stock Exchange
and the Toronto Stock Exchange under the symbol ORH. OdysseyRe is
rated "A" (Excellent) by A.M. Best Company and "A-" (Strong) by
Standard & Poor's.
Certain statements contained herein may constitute forward-looking
statements and are made pursuant to the "safe harbor" provisions of
the Private Securities Litigation Reform Act of 1995. Such
forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause the actual results,
performance or achievements of the Company to be materially different
from any future results, performance or achievements expressed or
implied by such forward-looking statements. Such factors include,
among others, the following: the occurrence of catastrophic events
with a frequency or severity exceeding the Company's estimates; the
lowering or loss of one of the Company's financial or claims-paying
ratings, including those of the Company's subsidiaries; changes in
interest rates; changes in premium volumes; increased competition;
regulatory and legislative changes; changes in loss payment patterns;
changes in estimated overall adequacy of loss and LAE reserves;
changes in key management personnel; changes in general market or
economic conditions; and other factors which are described in the
Company's filings with the Securities and Exchange Commission.
Visit OdysseyRe's Web site - www.odysseyre.com - for additional
information about the Company. In addition, anyone may view the
Company's historical press releases and filings with the Securities
and Exchange Commission, which provide additional data regarding the
Company's prior quarterly and year-to-date results. This historical
information may be found on OdysseyRe's web site under "Financial
Information."
Consolidated financial and division information follows:
ODYSSEY RE HOLDINGS CORP.
CONSOLIDATED BALANCE SHEETS
JUNE 30, 2003 (UNAUDITED) AND DECEMBER 31, 2002
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
June December
30, 31,
2003 2002
---------- ----------
ASSETS
Investments and cash:
Fixed income securities, at fair
value (amortized cost $1,402,692
and $1,964,758, respectively) $1,493,345 $1,992,574
Redeemable preferred stock, at
fair value (cost $13,398 and
$13,398, respectively) 13,780 12,694
Equity securities:
Common stocks, at fair value
(cost $147,041 and $146,028,
respectively) 173,833 152,560
Common stocks, at equity 107,557 101,021
Short-term investments, at cost
which approximates fair value 136,494 189,161
Other invested assets 166,919 149,649
Cash and cash equivalents 1,518,191 484,744
---------- ----------
Total investments and cash 3,610,119 3,082,403
Investment income due and accrued 21,365 26,358
Reinsurance balances receivable 526,226 430,491
Reinsurance recoverable on loss payments 151,826 80,473
Reinsurance recoverable on unpaid losses 907,958 1,026,979
Prepaid reinsurance premiums 83,242 92,525
Funds held by ceding insurers 132,247 112,747
Deferred acquisition costs 144,546 128,890
Deferred federal and foreign income taxes 75,875 108,314
Other assets 65,658 215,780
---------- ----------
Total assets $5,719,062 $5,304,960
========== ==========
LIABILITIES
Unpaid losses and loss adjustment expenses $3,065,532 $2,871,552
Unearned premiums 700,782 602,562
Debt obligations 206,121 206,340
Reinsurance balances payable 159,382 108,257
Funds held under reinsurance contracts 145,165 238,233
Current federal and foreign income taxes 33,019 1,285
Other liabilities 124,208 220,648
---------- ----------
Total liabilities 4,434,209 4,248,877
========== ==========
STOCKHOLDERS' EQUITY
Preferred stock, $0.01 par value; 200,000,000
shares authorized; 0 shares issued - -
Common stock, $0.01 par value; 500,000,000
shares authorized; 65,142,857 shares issued 651 651
Additional paid-in capital 793,334 793,334
Treasury stock, 138,894 shares, at cost (2,305) (2,305)
Unearned compensation (4,005) (4,572)
Accumulated other comprehensive income,
net of deferred income taxes 93,923 21,736
Retained earnings 403,255 247,239
---------- ----------
Total stockholders' equity 1,284,853 1,056,083
---------- ----------
Total liabilities and
stockholders' equity $5,719,062 $5,304,960
========== ===========
ODYSSEY RE HOLDINGS CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
SIX MONTHS AND THREE MONTHS ENDED JUNE 30, 2003 AND 2002 (UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
Six Months Six Months Three Months Three Months
Ended Ended Ended Ended
June 30, June 30, June 30, June 30,
2003 2002 2003 2002
REVENUES
Gross premiums
written $ 1,173,717 $ 831,927 $ 609,876 $ 428,174
Ceded premiums
written 141,074 98,234 67,162 57,302
------------ ------------ ------------ -----------
Net premiums
written 1,032,643 733,693 542,714 370,872
Increase in
unearned premiums (104,172) (98,519) (61,566) (19,013)
------------ ------------ ------------ -----------
Net premiums
earned 928,471 635,174 481,148 351,859
Net investment
income 59,140 58,228 26,740 30,025
Net realized
investment gains 169,815 18,950 131,551 18,213
------------ ------------ ------------ -----------
Total revenues 1,157,426 712,352 639,439 400,097
------------ ------------ ------------ -----------
EXPENSES
Losses and loss
adjustment
expenses 627,459 436,910 321,734 245,560
Acquisition costs 233,095 157,466 116,997 85,860
Other underwriting
expenses 45,963 33,112 25,204 16,277
Other expense, net 3,697 1,653 730 927
Interest expense 4,929 4,396 2,883 2,214
------------ ------------ ------------ -----------
Total expenses 915,143 633,537 467,548 350,838
------------ ------------ ------------ -----------
Income before
income taxes
and
cumulative
effect of
a change in
accounting
principle 242,283 78,815 171,891 49,259
------------ ------------ ------------ -----------
Federal and foreign
income tax provision
(benefit):
Current 89,448 - 55,728 -
Deferred (6,431) 26,589 3,476 16,434
------------ ------------ ------------ -----------
Total federal
and foreign
income tax
provision 83,017 26,589 59,204 16,434
------------ ------------ ------------ -----------
Income before
cumulative effect
of a change in
accounting
principle 159,266 52,226 112,687 32,825
Cumulative effect
of a change in
accounting
principle - 36,862 - -
------------ ------------ ------------ -----------
NET INCOME $ 159,266 $ 89,088 $ 112,687 $ 32,825
============ ============ ============= ==========
BASIC
Weighted average
shares outstanding 64,721,288 64,745,993 64,732,356 64,750,028
============ ============ ============ ===========
Basic earnings per
share $ 2.46 $ 1.38 $ 1.74 $ 0.51
============ ============ ============ ===========
DILUTED
Weighted average
shares outstanding 65,085,416 65,134,081 65,121,690 65,127,351
============ ============ ============ ===========
Diluted earnings
per share $ 2.45 $ 1.37 $ 1.73 $ 0.50
============ ============ ============ ===========
DIVIDENDS
Dividends declared
per share $ 0.05 $ 0.05 $ 0.025 $ 0.025
============ ============ ============ ===========
COMPREHENSIVE
INCOME
Net income $ 159,266 $ 89,088 $ 112,687 $ 32,825
Other comprehensive
income, net of tax 72,187 52,013 44,704 56,448
------------ ------------ ------------ -----------
Comprehensive
income $ 231,453 $ 141,101 $ 157,391 $ 89,273
============ ============ ============ ===========
ODYSSEY RE HOLDINGS CORP.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
SIX MONTHS ENDED JUNE 30, 2003 AND 2002 (UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
Six Months Six Months
Ended Ended
June 30, June 30,
2003 2002
COMMON STOCK
Balance, beginning and end of period $ 651 $ 651
------------ ------------
ADDITIONAL PAID-IN CAPITAL
Balance, beginning and end of period 793,334 793,334
------------ ------------
TREASURY STOCK
Balance, beginning of period (2,305) -
Purchases during period - (1,181)
Reissuance during period - 100
------------ ------------
Balance, end of period (2,305) (1,081)
------------ ------------
UNEARNED COMPENSATION
Balance, beginning of period (4,572) (5,704)
Amortization during the period 567 568
------------ ------------
Balance, end of period (4,005) (5,136)
------------ ------------
ACCUMULATED OTHER COMPREHENSIVE INCOME
(LOSS), NET OF
DEFERRED INCOME TAXES
Balance, beginning of period 21,736 (12,985)
Net increase during the period 72,187 52,013
------------ ------------
Balance, end of period 93,923 39,028
------------ ------------
RETAINED EARNINGS
Balance, beginning of period 247,239 45,576
Net income 159,266 89,088
Dividends to stockholders (3,250) (3,256)
------------ ------------
Balance, end of period 403,255 131,408
------------ ------------
TOTAL STOCKHOLDERS' EQUITY $ 1,284,853 $ 958,204
============ ============
COMMON SHARES (SHARES OUTSTANDING)
Balance, beginning of period 65,003,963 65,142,857
Net treasury shares acquired - (67,294)
------------ ------------
Balance, end of period 65,003,963 65,075,563
============ ============
ODYSSEY RE HOLDINGS CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED JUNE 30, 2003 AND 2002 (UNAUDITED)
(IN THOUSANDS)
Six Months Six Months
Ended Ended
June 30, 2003 June 30, 2002
OPERATING ACTIVITIES
Net income $ 159,266 $ 89,088
Less: cumulative effect of a change
in accounting Principle - (36,862)
------------- ------------
Income before cumulative effect of
a change in accounting principle 159,266 52,226
Adjustments to reconcile net income to net
cash provided by operating activities:
Reinsurance balances and funds held,
net (228,532) (107,142)
Unearned premiums 107,504 99,603
Unpaid losses and loss adjustment
expenses 313,000 1,370
Federal and foreign income taxes 25,304 26,508
Other assets and liabilities, net 26,361 27,554
Deferred acquisition costs (15,656) (22,845)
Net realized investment gains (169,815) (18,950)
Bond discount amortization, net (4,263) (802)
------------- ------------
Net cash provided by operating
activities 213,169 57,522
------------- ------------
INVESTING ACTIVITIES
Maturities of fixed income securities 17,050 2,318
Sales of fixed income securities 3,766,631 388,418
Purchases of fixed income securities (3,019,833) (503,625)
Sales of equity securities 71,752 31,014
Purchases of equity securities (67,079) (56,499)
Purchases of other invested assets (6,327) (3,881)
Decrease in short-term investments 52,667 12,213
------------- ------------
Net cash provided by (used in)
investing activities 814,861 (130,042)
------------- ------------
FINANCING ACTIVITIES
Dividends (3,250) (3,256)
Additional borrowings - 107,494
Repayment of debt principal - (110,000)
Sale of interest rate contract 8,667 -
Purchase of treasury stock - (1,181)
------------- ------------
Net cash provided by (used in)
financing activities 5,417 (6,943)
------------- ------------
Increase (decrease) in cash and cash
equivalents 1,033,447 (79,463)
Cash and cash equivalents, beginning of
period 484,744 375,142
------------- ------------
Cash and cash equivalents, end of
period $ 1,518,191 $ 295,679
============= ============
ODYSSEY RE HOLDINGS CORP.
BUSINESS DIVISIONS
FOR THE SIX AND THREE MONTHS ENDED
JUNE 30, 2003 AND 2002
(UNAUDITED)
(IN THOUSANDS)
Six Months Six Months
Ended Ended
June 30, June 30, %
2003 2002 Change
------------ ------------ -------------
Gross Premiums Written
Americas* $ 682,135 $ 565,421 20.6 %
EuroAsia 182,169 104,776 73.9
London Market 190,345 131,054 45.2
U.S. Insurance* 137,871 46,739 195.0
----------- ------------
Total $1,173,717 $ 831,927 41.1 %
=========== ============
Net Premiums Written
Americas $ 633,339 $ 521,051 21.6 %
EuroAsia 172,745 100,696 71.6
London Market 165,344 100,695 64.2
U.S. Insurance 61,215 11,251 444.1
----------- ------------
Total $1,032,643 $ 733,693 40.7 %
=========== ============
Net Premiums Earned
Americas $ 584,762 $ 462,321 26.5 %
EuroAsia 164,508 89,461 83.9
London Market 146,272 75,771 93.0
U.S. Insurance 32,929 7,621 332.1
----------- ------------
Total $ 928,471 $ 635,174 46.2 %
=========== ============
Three Months Three Months
Ended Ended
June 30, June 30, %
2003 2002 Change
------------ ------------ -------------
Gross Premiums Written
Americas* $ 340,747 $ 278,476 22.4 %
EuroAsia 99,274 60,342 64.5
London Market 117,275 67,447 73.9
U.S. Insurance* 57,272 27,835 105.8
------------ ------------
Total $ 609,876 $ 428,174 42.4 %
============ ============
Net Premiums Written
Americas $ 314,720 $ 254,435 23.7 %
EuroAsia 92,668 59,203 56.5
London Market 106,836 49,692 115.0
U.S. Insurance 28,490 7,542 277.8
------------ ------------
Total $ 542,714 $ 370,872 46.3 %
============ ============
Net Premiums Earned
Americas $ 293,483 $ 253,576 15.7 %
EuroAsia 86,925 54,696 58.9
London Market 82,305 38,843 111.9
U.S. Insurance 18,435 4,744 288.6
------------ ------------
Total $ 481,148 $ 351,859 36.7 %
============ ============
Six Months Six Months
Ended Ended Percentage
June 30, June 30, Point
2003 2002 Change
------------ ------------ -------------
Losses and Loss
Adjustment Expense Ratio
Americas 68.0 % 67.9 % 0.1 %
EuroAsia 68.6 72.0 (3.4)
London Market 63.8 69.0 (5.2)
U.S. Insurance 71.2 82.8 (11.6)
Total 67.6 % 68.8 % (1.2)%
Acquisition Cost and Other
Underwriting Expense Ratio
Americas 0.8
32.4 % 31.6 % %
EuroAsia 23.9 27.3 (3.4)
London Market 29.2 25.6 3.6
U.S. Insurance 22.6 10.8 11.8
Total 30.0 % 30.0 % 0.0 %
Combined Ratio
Americas 100.4 % 99.5 % 0.9 %
EuroAsia 92.5 99.3 (6.8)
London Market 93.0 94.6 (1.6)
U.S. Insurance 93.8 93.6 0.2
Total 97.6 % 98.8 % (1.2)%
Three Months Three Months
Ended Ended Percentage
June 30, June 30, Point
2003 2002 Change
------------ ------------ -------------
Losses and Loss
Adjustment Expense Ratio
Americas 66.4% 68.8% (2.4)%
EuroAsia 70.4 73.6 (3.2)
London Market 64.8 69.9 (5.1)
U.S. Insurance 66.6 78.3 (11.7)
Total 66.9% 69.8% (2.9)%
Acquisition Cost and Other
Underwriting Expense Ratio
Americas 31.4% 31.1% 0.3 %
EuroAsia 24.7 25.3 (0.6)
London Market 28.6 23.9 4.7
U.S. Insurance 28.0 2.7 25.3
Total 29.5% 29.0% 0.5 %
Combined Ratio
Americas 97.8% 99.9% (2.1)%
EuroAsia 95.1 98.9 (3.8)
London Market 93.4 93.8 (0.4)
U.S. Insurance 94.6 81.0 13.6
Total 96.4% 98.8% (2.4)%
*A portion of the Gross Premiums Written by the U.S. Insurance
division has been ceded to, and are also included in the Americas
division's Gross Premiums Written. Accordingly, the sum of the Gross
Premiums Written for each division does not agree to the total Gross
Premiums Written as shown in the table above and as reflected in the
Consolidated Statements of Operations.
