Allied World Reports $93.8 Million Net Income in Second Quarter 2011 Despite Catastrophe Losses; 3.3% Quarterly Increase in Diluted Book Value Per Share
By Allied World Assurance Company Holdings Ag, PRNETuesday, August 2, 2011
ZUG, Switzerland, August 3, 2011 -
Allied World Assurance Company Holdings, AG (NYSE: AWH) today reported net income of $93.8 million, or $2.36 per diluted share, for the second quarter of 2011 compared to net income of $184.0 million, or $3.47 per diluted share, for the second quarter of 2010. Net income for the six months ended June 30, 2011 was $102.4 million, or $2.57 per diluted share, compared to net income of $317.7 million, or $5.98 per diluted share, for the first six months of 2010.
The company reported operating income of $44.2 million, or $1.11 per diluted share, for the second quarter of 2011 compared to operating income of $95.7 million, or $1.80 per diluted share, for the second quarter of 2010. Operating income for the six months ended June 30, 2011 was $2.8 million, or $0.07 per diluted share, compared to operating income of $157.0 million, or $2.96 per diluted share, for the first six months of 2010.
President and Chief Executive Officer Scott Carmilani commented, “Allied World’s demonstrated track record of profitably managing our business through challenging markets was again on display this quarter. Despite continued industry-wide catastrophe losses, we have again contained our share of these losses as a percentage of equity well below the industry average. Simultaneously, we continue to build out our specialty insurance franchise highlighted by the 20% growth experienced in our U.S. insurance segment in the quarter. This segment continues to gain traction in targeted specialty lines due to our expansion efforts and new business initiatives over the last three years.
“During the quarter, the company’s financial strength rating was upgraded to A ‘Strong’ by Standard & Poor’s. We are gratified that our efforts in building a strong, well-controlled, profitable specialty insurance and reinsurance franchise have resulted in this upgrade.”
Mr. Carmilani continued, “We remain excited about our pending merger of equals with Transatlantic and believe that the combination will create a truly global insurance and reinsurance franchise. Upon closing the merger in the fourth quarter, Allied World and Transatlantic will become TransAllied, operating with very strong financial strength ratings, enhanced competitive strength and a significant global presence. I am confident we are well positioned for continued success as we build a more formidable franchise with a record of success throughout all turns in the insurance and reinsurance market cycle.”
Underwriting Results
Gross premiums written were $519.6 million in the second quarter of 2011, a 5.2% increase compared to $493.8 million in the second quarter of 2010. For the six months ended June 30, 2011, gross premiums written totaled $1,080.3 million, an 8.2% increase compared to $998.0 million in the first six months of 2010. These increases were primarily due to the expansion of our global operating platforms and the introduction of new products.
Net premiums written were $395.8 million in the second quarter of 2011, a 7.0% increase compared to $369.8 million in the second quarter of 2010. For the six months ended June 30, 2011, net premiums written totaled $876.7 million, a 9.2% increase compared to $803.1 million in the first six months of 2010.
The combined ratio was 97.4% in the second quarter of 2011 compared to 87.0% in the second quarter of 2010. The loss and loss expense ratio was 66.4% in the second quarter of 2011 compared to 55.7% in the second quarter of 2010. During the second quarter of 2011, the company recorded net favorable reserve development on prior loss years of $55.2 million. This favorable reserve development and the impact of a commutation adjustment resulted in a benefit of 15.8 percentage points to the company’s loss and loss expense ratio for the quarter. This compares to the second quarter of 2010, where the company recorded net favorable reserve development on prior loss years of $64.1 million, a benefit of 18.9 percentage points to the company’s loss and loss expense ratio for that quarter. Absent these adjustments, the loss and loss expense ratio for the second quarter of 2011 was 82.2% compared to 74.6% for the second quarter of 2010. The second quarter 2011 loss and loss expense ratio was impacted by $67.5 million of net losses, or 19.0 percentage points, from U.S. weather-related events during the quarter and additional losses developing from first quarter catastrophes. These catastrophe losses were comprised of $5.0 million from our U.S. insurance segment, $30.5 million from our international insurance segment and $32.0 million from our reinsurance segment. The second quarter 2010 loss and loss expense ratio was impacted by losses of $30.0 million, or 8.9 percentage points, from major loss events during that quarter.
The company’s expense ratio was 31.0% for the second quarter of 2011 compared to 31.3% for the second quarter of 2010. The expense ratio was 31.3% for the six months ended June 30, 2011 compared to 31.0% in the first six months of 2010.
Investment Results
The total return on the company’s investment portfolio for the three and six months ended June 30, 2011 was 1.3% and 2.2%, respectively. See table below for the components of our investment returns for the first half of 2011 and 2010:
(Expressed in thousands of SIX MONTHS ENDED SIX MONTHS ENDED
United States Dollars) JUNE 30, 2011 JUNE 30, 2010
Net investment income $102,576 $134,496
Net realized investment gains 109,254 176,378
Change in unrealized investment
gains (36,465) (12,294)
------- -------
Net investment income, realized
gains and unrealized gains $175,365 $298,580
======== ========
Average invested assets $7,888,212 $7,737,287
Financial statement portfolio
return 2.2% 3.9%
Note: net investment income, net realized gains/losses and change
in unrealized gains/losses are disclosed on a pre-tax basis.
Shareholders’ Equity
As of June 30, 2011, our total shareholders’ equity was $3.0 billion, compared to $3.1 billion as of December 31, 2010.
The company’s annualized net income return on average shareholders’ equity for the three and six months ended June 30, 2011 was 12.6% and 6.8%, respectively. The company’s annualized operating return on average shareholders’ equity for the three and six months ended June 30, 2011 was 6.0% and 0.2%, respectively.
Share Repurchase Program
As of June 30, 2011, diluted book value per share was $76.68, an increase of 3.2% compared to $74.29 as of December 31, 2010. For the first six months of 2011, the company repurchased 969,163 of its common shares under its share repurchase program at an average repurchase price of $61.91 per share for an aggregate cost of $60.0 million. This plan was inactive in the second quarter of 2011 because of the merger negotiations with Transatlantic Holdings, Inc. As of June 30, 2011, the company had $200.9 million of remaining capacity available under the share repurchase program.
Investment Supplement
Allied World will be providing additional information on its investment portfolio as of June 30, 2011. This information will be available at the “Investor Relations” section of the company’s website at www.awac.com.
Financial Supplement
A financial supplement relating to the second quarter of 2011 will be available at the “Investor Relations” section of the company’s website at www.awac.com.
Loss Reserve Triangles
Allied World announced today that it is publishing its 2010 Global Loss Triangles. The loss data in this report will be presented on an accident and treaty-year basis and will include information for the company’s cumulative paid and reported loss and allocated loss adjustment expenses as of December 31, 2010. This information will be presented both gross and net of external reinsurance and is organized into reserving classes of business that fall within the company’s direct insurance and reinsurance businesses. This report will be available at the “Investor Relations” section of the company’s website at www.awac.com.
Conference Call
Allied World will host a conference call on Thursday, August 4, 2011 at 9:00 a.m. (Eastern Time) to discuss the second quarter 2011 financial results. The public may access a live webcast of the conference call at the “Investor Relations” section of the company’s website at www.awac.com. In addition, the conference call can be accessed by dialing (877) 317-6701 (U.S. and Canada callers) or +1-412-317-6701 (international callers) and entering the passcode 5885208 approximately ten minutes prior to the call.
Following the conclusion of the presentation, a replay of the call will be available through Thursday, August 18, 2011 by dialing (877) 344-7529 (U.S. and Canada callers) or +1-412-317-0088 (international callers) and entering the passcode 10001916. In addition, the webcast will remain available online through Thursday, August 18, 2011 at www.awac.com.
Non-GAAP Financial Measures
In presenting the company’s results, management has included and discussed in this press release certain non-generally accepted accounting principles (”non-GAAP”) financial measures within the meaning of Regulation G as promulgated by the U.S. Securities and Exchange Commission. Management believes that these non-GAAP measures, which may be defined differently by other companies, better explain the company’s results of operations in a manner that allows for a more complete understanding of the underlying trends in the company’s business. However, these measures should not be viewed as a substitute for those determined in accordance with generally accepted accounting principles (”U.S. GAAP”).
“Operating income” is an internal performance measure used in the management of the company’s operations and represents after-tax operational results excluding, as applicable, net realized investment gains or losses, net impairment charges recognized in earnings, impairment of intangible assets and foreign exchange gain or loss. The company excludes net realized investment gains or losses, net impairment charges recognized in earnings and net foreign exchange gain or loss from the calculation of operating income because the amount of these gains or losses is heavily influenced by and fluctuates in part according to the availability of market opportunities and other factors. The company excludes impairment of intangible assets as these are non-recurring charges. In addition to presenting net income determined in accordance with U.S. GAAP, the company believes that showing operating income enables investors, analysts, rating agencies and other users of the company’s financial information to more easily analyze our results of operations and underlying business performance. Operating income should not be viewed as a substitute for U.S. GAAP net income.
The company has included “diluted book value per share” because it takes into account the effect of dilutive securities; therefore, the company believes it is an important measure of calculating shareholder returns.
“Annualized net income return on average shareholders’ equity” (”ROAE”) is calculated using average shareholders’ equity, excluding the average after tax unrealized gains (or losses) on investments. Unrealized gains (losses) on investments are primarily the result of interest rate and credit spread movements and the resultant impact on fixed income securities. Such gains (losses) are not related to management actions or operational performance, nor are they likely to be realized. Therefore, the company believes that excluding these unrealized gains (losses) provides a more consistent and useful measurement of operating performance, which supplements U.S. GAAP information. In calculating ROAE, the net income (loss) available to shareholders for the period is multiplied by the number of such periods in a calendar year in order to arrive at annualized net income (loss) available to shareholders. The company presents ROAE as a measure that is commonly recognized as a standard of performance by investors, analysts, rating agencies and other users of its financial information.
“Annualized operating return on average shareholders’ equity” is calculated using operating income (as defined above and annualized in the manner described for net income (loss) available to shareholders under ROAE above), and average shareholders’ equity, excluding the average after tax unrealized gains (losses) on investments. Unrealized gains (losses) are excluded from equity for the reasons outlined in the annualized net income return on average shareholders’ equity explanation above.
Reconciliations of these financial measures to their most directly comparable U.S. GAAP measures are included in the attached tables.
About Allied World Assurance Company
Allied World Assurance Company Holdings, AG, through its subsidiaries, is a global provider of innovative property, casualty and specialty insurance and reinsurance solutions, offering superior client service through a global network of offices and branches. All of Allied World’s rated insurance and reinsurance subsidiaries are rated A by A.M. Best Company, A by Standard & Poor’s, and A2 by Moody’s, and our Lloyd’s Syndicate 2232 is rated A+ by Standard & Poor’s and Fitch. Please visit www.awac.com for further information on Allied World.
Additional Information about the Proposed Merger and Where to Find It
This communication contains certain information relating to a proposed merger between Allied World and Transatlantic Holdings, Inc. (”Transatlantic”). In connection with the proposed merger, Allied World has filed with the U.S. Securities and Exchange Commission (the “SEC”) a registration statement on Form S-4 that includes a preliminary joint proxy statement/prospectus that provides details of the proposed merger and the attendant benefits and risks. This communication is not a substitute for the joint proxy statement/prospectus or any other document that Allied World or Transatlantic may file with the SEC or send to their shareholders in connection with the proposed merger. Investors and security holders are urged to read the registration statement on Form S-4, including the preliminary joint proxy statement/prospectus, and all other relevant documents filed with the SEC (including the definitive joint proxy statement/prospectus) or sent to shareholders as they become available because they will contain important information about the proposed merger. All documents, when filed, will be available free of charge at the SEC’s website (www.sec.gov). You may also obtain these documents by contacting Allied World’s Corporate Secretary, attn.: Wesley D. Dupont, at Allied World Assurance Company Holdings, AG, Lindenstrasse 8, 6340 Baar, Zug, Switzerland, or via e-mail at secretary@awac.com; or by contacting Transatlantic’s Investor Relations department at Transatlantic Holdings, Inc., 80 Pine Street, New York, New York 10005, or via e-mail at investor_relations@transre.com. This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval.
Participants in the Solicitation
Allied World, Transatlantic and their respective directors and executive officers may be deemed to be participants in any solicitation of proxies in connection with the proposed merger. Information about Allied World’s directors and executive officers is available in Allied World’s proxy statement dated March 17, 2011 for its 2011 Annual Meeting of Shareholders. Information about Transatlantic’s directors and executive officers is available in Transatlantic’s proxy statement dated April 8, 2011 for its 2011 Annual Meeting of Shareholders. Other information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, may be contained in the definitive joint proxy statement/prospectus and other relevant materials to be filed with the SEC regarding the merger when they become available. Investors should read the definitive joint proxy statement/prospectus carefully when it becomes available before making any voting or investment decisions
Cautionary Statement Regarding Forward-Looking Statements
Any forward-looking statements made in this communication reflect Allied World’s current views with respect to future events and financial performance and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements involve risks and uncertainties, which may cause actual results to differ materially from those set forth in these statements. For example, these forward-looking statements could be affected by the occurrence of any event, change or other circumstances that could give rise to the termination of the merger agreement; the inability to obtain Allied World’s or Transatlantic’s shareholder approval or the failure to satisfy other conditions to completion of the merger, including receipt of regulatory approvals; risks that the proposed transaction disrupts each company’s current plans and operations; the ability to retain key personnel; the ability to recognize the benefits of the merger; the amount of the costs, fees, expenses and charges related to the merger; pricing and policy term trends; increased competition; the impact of acts of terrorism and acts of war; greater frequency or severity of unpredictable catastrophic events; negative rating agency actions; the adequacy of Allied World’s loss reserves; Allied World or its non-U.S. subsidiaries becoming subject to significant income taxes in the United States or elsewhere; changes in regulations or tax laws; changes in the availability, cost or quality of reinsurance or retrocessional coverage; adverse general economic conditions; and judicial, legislative, political and other governmental developments, as well as management’s response to these factors, and other factors identified in Allied World’s filings with the SEC. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made. Allied World is under no obligation (and expressly disclaims any such obligation) to update or revise any forward-looking statement that may be made from time to time, whether as a result of new information, future developments or otherwise.
ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Expressed in thousands of United States dollars, except share and
per share amounts)
Quarter Ended June
30,
2011 2010
---- ----
Revenues:
Gross premiums written $519,598 $493,847
Premiums ceded (123,795) (124,052)
-------- --------
Net premiums written 395,803 369,795
Change in unearned premiums (40,496) (30,871)
------- -------
Net premiums earned 355,307 338,924
Net investment income 52,368 65,594
Net realized investment gains 58,878 94,933
Net impairment charges recognized
in earnings - -
Other income - 616
--- ---
Total revenue 466,553 500,067
------- -------
Expenses:
Net losses and loss expenses 235,813 188,722
Acquisition costs 42,971 37,938
General and administrative
expenses 67,201 68,089
Amortization and impairment of
intangible assets 766 891
Interest expense 13,745 9,531
Foreign exchange loss 1,184 559
----- ---
Total expenses 361,680 305,730
------- -------
Income before income taxes 104,873 194,337
Income tax expense 11,073 10,378
------ ------
NET INCOME $93,800 $183,959
======= ========
PER SHARE DATA:
Basic earnings per share $2.45 $3.66
Diluted earnings per share $2.36 $3.47
Weighted average common shares
outstanding 38,346,489 50,222,974
Weighted average common shares
and common share equivalents
outstanding 39,800,753 52,974,410
Dividends paid per share $- $0.20
Six Months Ended
June 30,
2011 2010
---- ----
Revenues:
Gross premiums written $1,080,286 $998,010
Premiums ceded (203,612) (194,923)
-------- --------
Net premiums written 876,674 803,087
Change in unearned premiums (186,491) (125,839)
-------- --------
Net premiums earned 690,183 677,248
Net investment income 102,576 134,496
Net realized investment gains 109,254 172,420
Net impairment charges recognized
in earnings - (168)
Other income - 913
--- ---
Total revenue 902,013 984,909
------- -------
Expenses:
Net losses and loss expenses 540,265 420,876
Acquisition costs 81,053 78,722
General and administrative
expenses 135,157 131,552
Amortization and impairment of
intangible assets 1,533 1,783
Interest expense 27,487 19,059
Foreign exchange loss 742 1,635
--- -----
Total expenses 786,237 653,627
------- -------
Income before income taxes 115,776 331,282
Income tax expense 13,356 13,583
------ ------
NET INCOME $102,420 $317,699
======== ========
PER SHARE DATA:
Basic earnings per share $2.69 $6.34
Diluted earnings per share $2.57 $5.98
Weighted average common shares
outstanding 38,061,724 50,123,945
Weighted average common shares
and common share equivalents
outstanding 39,873,418 53,086,708
Dividends paid per share $- $0.40
ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(Expressed in thousands of United States dollars, except
share and per share amounts)
As of As of
June 30, December 31,
ASSETS: 2011 2010
---- ----
Fixed maturity investments
available for sale, at fair
value (amortized cost: 2011:
$318,711; 2010: $828,544) $345,551 $891,849
Fixed maturity investments
trading, at fair value 6,201,034 5,769,097
Equity securities trading, at
fair value 393,913 174,976
Other invested assets trading,
at fair value 562,267 347,632
------- -------
Total investments 7,502,765 7,183,554
Cash and cash equivalents 807,657 853,368
Insurance balances receivable 653,002 529,927
Prepaid reinsurance 223,269 187,287
Reinsurance recoverable 1,013,951 927,588
Accrued investment income 39,582 40,520
Net deferred acquisition costs 112,083 96,803
Goodwill 268,376 268,376
Intangible assets 55,342 56,876
Net deferred tax assets 19,826 19,740
Other assets 54,760 75,184
Total assets $10,750,613 $10,239,223
----------- -----------
LIABILITIES:
Reserve for losses and loss
expenses $5,251,304 $4,879,188
Unearned premiums 1,184,676 962,203
Reinsurance balances payable 132,661 99,732
Net balances payable on
purchases and sales of
investments 252,351 318,570
Senior notes 797,823 797,700
Accounts payable and accrued
liabilities 87,381 106,010
Total liabilities $7,706,196 $7,163,403
---------- ----------
SHAREHOLDERS' EQUITY:
Common shares: par value CHF
15.00 per share (2011:
40,003,642; 2010: 40,003,642
shares issued and 2011:
37,945,043; 2010: 38,089,226
shares outstanding) 600,055 600,055
Additional paid-in capital 82,037 170,239
Treasury shares, at cost
(2011: 2,058,599; 2010:
1,914,416) (124,392) (112,811)
Retained earnings 2,463,622 2,361,202
Accumulated other
comprehensive income, net of
tax 23,095 57,135
------ ------
Total shareholders' equity 3,044,417 3,075,820
--------- ---------
Total liabilities and
shareholders' equity $10,750,613 $10,239,223
=========== ===========
ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG
UNAUDITED CONSOLIDATED SEGMENT DATA
(Expressed in thousands of United States dollars, except for
ratio information)
Quarter Ended June U.S. International
30, 2011 Insurance Insurance Reinsurance Total
------------------ --------- --------- ----------- -----
Gross premiums
written $226,738 $178,593 $114,267 $519,598
Net premiums
written 172,887 108,985 113,931 395,803
Net premiums
earned 145,857 79,956 129,494 355,307
Net losses and
loss expenses (92,595) (72,082) (71,136) (235,813)
Acquisition costs (18,876) 747 (24,842) (42,971)
General and
administrative
expenses (31,253) (20,653) (15,295) (67,201)
------- ------- ------- -------
Underwriting
income (loss) 3,133 (12,032) 18,221 9,322
Net investment income 52,368
Net realized investment gains 58,878
Amortization and impairment
of intangible assets (766)
Interest expense (13,745)
Foreign exchange loss (1,184)
------
Income before income taxes $104,873
========
GAAP Ratios:
Loss and loss
expense ratio 63.5% 90.2% 54.9% 66.4%
Acquisition cost
ratio 12.9% (0.9%) 19.2% 12.1%
General and
administrative
expense ratio 21.4% 25.8% 11.8% 18.9%
Combined ratio 97.8% 115.1% 85.9% 97.4%
==== ===== ==== ====
Quarter Ended June U.S. International
30, 2010 Insurance Insurance Reinsurance Total
------------------ --------- --------- ----------- -----
Gross premiums
written $189,663 $167,601 $136,583 $493,847
Net premiums written 135,238 98,509 136,048 369,795
Net premiums earned 125,659 89,427 123,838 338,924
Other income 616 - - 616
Net losses and loss
expenses (69,198) (64,580) (54,944) (188,722)
Acquisition costs (15,854) 66 (22,150) (37,938)
General and
administrative
expenses (30,683) (22,657) (14,749) (68,089)
------- ------- ------- -------
Underwriting income 10,540 2,256 31,995 44,791
Net investment income 65,594
Net realized investment gains 94,933
Amortization and impairment
of intangible assets (891)
Interest expense (9,531)
Foreign exchange loss (559)
----
Income before income taxes $194,337
========
GAAP Ratios:
Loss and loss
expense ratio 55.1% 72.2% 44.4% 55.7%
Acquisition cost
ratio 12.6% (0.1%) 17.9% 11.2%
General and
administrative
expense ratio 24.4% 25.3% 11.9% 20.1%
---- ---- ---- ----
Combined ratio 92.1% 97.4% 74.2% 87.0%
==== ==== ==== ====
ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG
UNAUDITED CONSOLIDATED SEGMENT DATA
(Expressed in thousands of United States dollars, except for
ratio information)
Six Months Ended U.S. International
June 30, 2011 Insurance Insurance Reinsurance Total
---------------- --------- --------- ----------- -----
Gross premiums
written $410,040 $289,918 $380,328 $1,080,286
Net premiums
written 312,789 183,895 379,990 876,674
Net premiums
earned 281,338 156,246 252,599 690,183
Other income - - - -
Net losses and
loss expenses (208,426) (143,266) (188,573) (540,265)
Acquisition costs (36,978) 2,603 (46,678) (81,053)
General and
administrative
expenses (62,052) (41,381) (31,724) (135,157)
------- ------- ------- --------
Underwriting loss (26,118) (25,798) (14,376) (66,292)
Net investment income 102,576
Net realized investment gains 109,254
Net impairment charges
recognized in earnings -
Amortization and impairment
of intangible assets (1,533)
Interest expense (27,487)
Foreign exchange loss (742)
----
Income before income taxes $115,776
========
GAAP Ratios:
Loss and loss
expense ratio 74.1% 91.7% 74.7% 78.3%
Acquisition cost
ratio 13.1% (1.7%) 18.5% 11.7%
General and
administrative
expense ratio 22.1% 26.5% 12.6% 19.6%
Combined ratio 109.3% 116.5% 105.8% 109.6%
===== ===== ===== =====
Six Months Ended U.S. International
June 30, 2010 Insurance Insurance Reinsurance Total
---------------- --------- --------- ----------- -----
Gross premiums
written $351,748 $289,023 $357,239 $998,010
Net premiums
written 266,793 179,590 356,704 803,087
Net premiums
earned 254,864 176,470 245,914 677,248
Other income 913 - - 913
Net losses and
loss expenses (167,623) (122,029) (131,224) (420,876)
Acquisition costs (32,814) - (45,908) (78,722)
General and
administrative
expenses (57,797) (44,502) (29,253) (131,552)
------- ------- ------- --------
Underwriting
(loss) income (2,457) 9,939 39,529 47,011
Net investment income 134,496
Net realized investment gains 172,420
Net impairment charges
recognized in earnings (168)
Amortization and impairment
of intangible assets (1,783)
Interest expense (19,059)
Foreign exchange loss (1,635)
------
Income before income taxes $331,282
========
GAAP Ratios:
Loss and loss
expense ratio 65.8% 69.1% 53.4% 62.1%
Acquisition cost
ratio 12.9% 0.0% 18.7% 11.6%
General and
administrative
expense ratio 22.7% 25.2% 11.9% 19.4%
---- ---- ---- ----
Combined ratio 101.4% 94.3% 84.0% 93.1%
===== ==== ==== ====
ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG
UNAUDITED OPERATING INCOME RECONCILIATION
(Expressed in thousands of United States dollars, except share and
per share amounts)
Quarter Ended June
30,
2011 2010
---- ----
Net income $93,800 $183,959
Add after tax affect of:
Net realized investment gains (50,795) (88,850)
Net impairment charges
recognized in earnings - -
Foreign exchange loss 1,184 559
----- ---
Operating income $44,189 $95,668
======= =======
Weighted average common
shares outstanding:
Basic 38,346,489 50,222,974
Diluted 39,800,753 52,974,410
Basic per share data:
Net income $2.45 $3.66
Add after tax affect of:
Net realized investment gains (1.32) (1.77)
Net impairment charges
recognized in earnings - -
Foreign exchange loss 0.02 0.01
---- ----
Operating income $1.15 $1.90
===== =====
Diluted per share data
Net income $2.36 $3.47
Add after tax affect of:
Net realized investment gains (1.28) (1.68)
Net impairment charges
recognized in earnings - -
Foreign exchange loss 0.03 0.01
---- ----
Operating income $1.11 $1.80
===== =====
Six Months Ended
June 30,
2011 2010
---- ----
Net income $102,420 $317,699
Add after tax affect of:
Net realized investment gains (100,320) (162,452)
Net impairment charges
recognized in earnings - 109
Foreign exchange loss 742 1,635
--- -----
Operating income $2,842 $156,991
====== ========
Weighted average common
shares outstanding:
Basic 38,061,724 50,123,945
Diluted 39,873,418 53,086,708
Basic per share data:
Net income $2.69 $6.34
Add after tax affect of:
Net realized investment gains (2.64) (3.24)
Net impairment charges
recognized in earnings - -
Foreign exchange loss 0.03 0.03
---- ----
Operating income $0.08 $3.13
===== =====
Diluted per share data
Net income $2.57 $5.98
Add after tax affect of:
Net realized investment gains (2.52) (3.05)
Net impairment charges
recognized in earnings - -
Foreign exchange loss 0.02 0.03
---- ----
Operating income $0.07 $2.96
===== =====
ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG
UNAUDITED DILUTED BOOK VALUE PER SHARE RECONCILIATION
(Expressed in thousands of United States dollars, except
share and per share amounts)
As of As of As of
June 30, December 31, June 30,
2011 2010 2010
---- ---- ----
Price per share at
period end $57.58 $59.44 $45.38
Total shareholders'
equity $3,044,417 $3,075,820 $3,468,543
Basic common shares
outstanding 37,945,043 38,089,226 49,407,301
Add: unvested
restricted share
units 473,967 571,178 804,644
Add: Performance
based equity awards 920,164 1,440,017 1,409,984
Add: employee
purchase plan - 10,576 -
Add: dilutive
options/warrants
outstanding 1,124,438 3,272,739 6,667,941
Weighted average
exercise price per
share $38.83 $35.98 $34.52
Deduct: options
bought back via
treasury method (758,342) (1,980,884) (5,072,455)
-------- ---------- ----------
Common shares and
common share
equivalents
outstanding 39,705,270 41,402,852 53,217,415
Basic book value per
common share $80.23 $80.75 $70.20
Diluted book value
per common share $76.68 $74.29 $65.18
ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG
UNAUDITED ANNUALIZED RETURN ON SHAREHOLDERS' EQUITY RECONCILIATION
(Expressed in thousands of United States dollars, except for
percentage information)
Quarter Ended June
30,
2011 2010
---- ----
Opening shareholders' equity $2,950,953 $3,338,807
Deduct: accumulated other
comprehensive income (32,963) (142,284)
------- --------
Adjusted opening
shareholders' equity 2,917,990 3,196,523
- -
Closing shareholders' equity $3,044,417 $3,468,543
Deduct: accumulated other
comprehensive income (23,095) (138,245)
------- --------
Adjusted closing
shareholders' equity 3,021,322 3,330,298
Average shareholders' equity $2,969,656 $3,263,411
========== ==========
Net income available to
shareholders $93,800 $183,959
Annualized net income
available to shareholders 375,200 735,836
Annualized return on average
shareholders' equity -net
income available to
shareholders 12.6% 22.5%
==== ====
Operating income available
to shareholders $44,189 $95,668
Annualized operating income
available to shareholders 176,756 382,672
Annualized return on average
shareholders' equity -
operating income available
to shareholders 6.0% 11.7%
=== ====
Six Months Ended
June 30,
2011 2010
---- ----
Opening shareholders' equity $3,075,820 $3,213,295
Deduct: accumulated other
comprehensive income (57,135) (149,849)
------- --------
Adjusted opening
shareholders' equity 3,018,685 3,063,446
Closing shareholders' equity $3,044,417 $3,468,543
Deduct: accumulated other
comprehensive income (23,095) (138,245)
------- --------
Adjusted closing
shareholders' equity 3,021,322 3,330,298
Average shareholders' equity $3,020,004 $3,196,872
========== ==========
Net income available to
shareholders $102,420 $317,699
Annualized net income
available to shareholders 204,840 635,398
Annualized return on average
shareholders' equity -net
income available to
shareholders 6.8% 19.9%
=== ====
Operating income available
to shareholders $2,842 $156,991
Annualized operating income
available to shareholders 5,684 313,982
Annualized return on average
shareholders' equity -
operating income available
to shareholders 0.2% 9.8%
=== ===
Media: Faye Cook, Vice President, Marketing & Communications, +1-441-278-5406, faye.cook at awac.com; Investors: Keith J. Lennox, Investor Relations Officer, +1-646-794-0750, keith.lennox at awac.com
Tags: Allied World Assurance Company Holdings Ag, August 3, Switzerland, Zug
