EX-99.1 8 y17923exv99w1.htm EX-99.1: PRESS RELEASE EX-99.1:
 

Exhibit 99.1
     
Contact:
  Lily Outerbridge
 
  Investor Relations
 
  (441) 298-0760
PLATINUM UNDERWRITERS HOLDINGS, LTD. REPORTS
FOURTH QUARTER AND YEAR ENDED DECEMBER 31, 2005
FINANCIAL RESULTS AND QUARTERLY DIVIDEND
HAMILTON, BERMUDA, FEBRUARY 26, 2006 — Platinum Underwriters Holdings, Ltd. (NYSE: PTP) today reported a net loss to common shareholders of $103.3 million, or $1.94 per basic common share, for the quarter ended December 31, 2005 and a net loss of $138.2 million, or $3.01 per basic common share, for the year ended December 31, 2005.
The results for the quarter ended December 31, 2005 include the estimated net after-tax negative impact of approximately $153.4 million from hurricane Wilma, adverse development of $30.9 million related to hurricanes Katrina and Rita, net favorable development of $12.0 million from prior years and net investment income of $37.2 million, an increase of 41.7% from the quarter ended December 31, 2004.
The results for the year ended December 31, 2005 include the aggregate estimated net after-tax negative impact of approximately $459.0 million from hurricanes Katrina, Rita and Wilma, net favorable development of $79.3 million from prior years and net investment income of $129.4 million, an increase of 53.1% from the year ended December 31, 2004.
Michael D. Price, Chief Executive Officer, commented: “2005 was the worst year on record for insured catastrophe losses and a challenging year for Platinum. Our share of these losses overshadowed the strong underwriting results in our non-catastrophe business.”
Mr. Price added, “Despite the unprecedented events of 2005, we were well-positioned for the January 1, 2006 renewal season and we competed successfully. Market conditions are good in many classes of business and we believe we have strong underwriting prospects for the remainder of the year.”
Results for the quarter ended December 31, 2005 were summarized as follows:
•   Net loss was $103.3 million or $1.94 per basic common share.
•   Net premiums written were $390.8 million and net premiums earned were $442.8 million.
•   GAAP combined ratio was 131.9%.
•   Net investment income, including interest on funds held, was $37.2 million.

1

 

Results for the quarter ended December 31, 2005 compared to the quarter ended December 31, 2004 were summarized as follows:
•   Net loss of $103.3 million compared to net income of $49.9 million.
•   Net premiums written decreased $4.1 million (or 1.0%) and net premiums earned increased $9.9 million (or 2.3%).
•   GAAP combined ratio increased by 42.2 percentage points.
•   Net investment income, which includes funds held, increased $11.0 million (or 41.7%).
Net premiums written for Platinum’s Property and Marine, Casualty and Finite Risk segments for the quarter ended December 31, 2005 were $121.7 million, $187.8 million and $81.3 million, respectively, representing 31.1%, 48.1% and 20.8%, respectively, of the total net premiums written. Combined ratios for these segments were 191.3%, 96.4% and 108.0%, respectively, for the quarter. Compared to the quarter ended December 31, 2004, net premiums written increased by $11.0 million (or 10.0%) for Platinum’s Property and Marine segment and $19.1 million (or 11.3%) for the Casualty segment. Net premiums written decreased by $34.2 million (or 29.6%) for the Finite Risk segment.
Results for the year ended December 31, 2005 were summarized as follows:
•   Net loss was $138.2 million or $3.01 per basic common share.
•   Net premiums written were $1.72 billion and net premiums earned were $1.71 billion.
•   GAAP combined ratio was 114.5%.
•   Net investment income, including interest on funds held, was $129.4 million.
Results for the year ended December 31, 2005 compared to the year ended December 31, 2004 were summarized as follows:
•   Net loss of $138.2 million as compared to net income of $84.8 million.
•   Net premiums written increased $71.7 million (or 4.4%) and net premiums earned increased by $266.8 million (or 18.4%).
•   GAAP combined ratio increased by 17.8 percentage points.
•   Net investment income, including interest on funds held, increased $44.9 million (or 53.1%).
Net premiums written for Platinum’s Property and Marine, Casualty and Finite Risk segments for the year ended December 31, 2005 were $575.1 million, $809.0 million and $333.6

 

 

million, respectively, representing 33.5%, 47.1% and 19.4%, respectively, of the total net premiums written. Combined ratios for these segments were 154.1%, 92.5% and 100.2%, respectively for the year. Compared to the year ended December 31, 2004, net premiums written increased by $70.6 million (or 14.0%) for Platinum’s Property and Marine segment and $131.6 million (or 19.4%) for the Casualty segment. Net premiums written decreased by $130.5 million (or 28.1%) for the Finite Risk segment.
Total assets were $5.15 billion as of December 31, 2005, an increase of $1.73 billion (or 50.6%) from $3.42 billion as of December 31, 2004. Cash and fixed maturity investments were $3.83 billion as of December 31, 2005, an increase of $1.37 billion (or 55.9%) from $2.46 billion as of December 31, 2004, due primarily to strong cash flow from operations and the receipt of the proceeds from the offerings of senior notes, common shares and mandatory convertible preferred shares issued during 2005.
Shareholders’ equity was $1.54 billion as of December 31, 2005, an increase of $407.2 million (or 35.9%) from $1.13 billion as of December 31, 2004. Book value per common share was $23.22 as of December 31, 2005 based on 59.1 million common shares outstanding, a decrease of $3.08 (or 11.7%) from $26.30 based on 43.1 million common shares outstanding as of December 31, 2004.
Quarterly Dividend
Platinum also announced that its Board of Directors has declared a quarterly dividend of $0.08 per common share, which is payable on March 31, 2006 to shareholders of record on March 2, 2006.
Financial Supplement
Platinum has posted a financial supplement on the Financial Reports page of the Investor Relations section of its website (Financial Supplement). The financial supplement provides additional detail regarding the financial performance of Platinum and its business segments.
Teleconference
Platinum will host a teleconference to discuss its financial results on Monday, February 27, 2006 at 9:00 a.m. Eastern Time. The call can be accessed by dialing 800-289-0493 (US callers) or 913-981-5510 (international callers) or in a listen-only mode via the Investor Relations section of Platinum’s website at www.platinumre.com. Those who intend to access the teleconference should register at least ten minutes in advance to ensure access to the call.
The teleconference will be recorded and a replay will be available from 11:00 a.m. Eastern Time on Monday, February 27, 2006 until midnight Eastern Time on Monday March 6, 2006. To access the replay by telephone, dial 888-203-1112 (US callers) or 719-457-0820 (international callers) and specify passcode: 4636274. The teleconference will also be archived on the Investor Relations section of Platinum’s website at www.platinumre.com for the same period of time.
Non-GAAP Financial Measures
In presenting the Company’s results, management has included and discussed certain schedules containing financial measures that are not calculated under standards or rules that comprise accounting principles generally accepted in the United States (GAAP). Such measures,

 

 

including segment underwriting income (or loss) and related underwriting ratios are referred to as non-GAAP. These non-GAAP measures may be defined or calculated differently by other companies. Management believes these measures, which are used to monitor the results of operations, allow for a more complete understanding of the underlying business. These measures should not be viewed as a substitute for those determined in accordance with GAAP. A reconciliation of such measures to the most comparable GAAP figures such as income before income tax expense and total shareholders’ equity is presented in the attached financial information in accordance with Regulation G.
About Platinum
Platinum Underwriters Holdings, Ltd. (NYSE: PTP) is a leading provider of property, casualty and finite risk reinsurance coverages, through reinsurance intermediaries, to a diverse clientele on a worldwide basis. Platinum operates through its principal subsidiaries in Bermuda, the United States and the United Kingdom. The Company has a financial strength rating of A (Excellent) from A.M. Best Company, Inc. For further information, please visit Platinum’s website at www.platinumre.com.
Safe Harbor Statement Regarding Forwarding-Looking Statements
Management believes certain statements in this press release may constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements include all statements that do not relate solely to historical or current facts, and can be identified by the use of words such as “may,” “should,” “estimate,” “expect,” “anticipate,” “intend,” “believe,” “predict,” “potential,” or words of similar import. Forward-looking statements are necessarily based on estimates and assumptions that are inherently subject to significant business, economic and competitive uncertainties and risks, many of which are subject to change. These uncertainties and risks include, but are not limited to, conducting operations in a competitive environment; our ability to maintain our A.M. Best Company rating; significant weather-related or other natural or man-made disasters over which the Company has no control; the effectiveness of our loss limitation methods and pricing models; the adequacy of the Company’s liability for unpaid losses and loss adjustment expenses; the availability of retrocessional reinsurance on acceptable terms; our ability to maintain our business relationships with reinsurance brokers; general political and economic conditions, including the effects of civil unrest, war or a prolonged U.S. or global economic downturn or recession; the cyclicality of the property and casualty reinsurance business; market volatility and interest rate and currency exchange rate fluctuation; tax, regulatory or legal restrictions or limitations applicable to the Company or the property and casualty reinsurance business generally; and changes in the Company’s plans, strategies, objectives, expectations or intentions, which may happen at any time at the Company’s discretion. As a consequence, current plans, anticipated actions and future financial condition and results may differ from those expressed in any forward-looking statements made by or on behalf of the Company. Additionally, forward-looking statements speak only as of the date they are made, and we undertake no obligation to release publicly the results of any future revisions or updates we may make to forward-looking statements to reflect new information or circumstances after the date hereof or to reflect the occurrence of future events.
# # #

 

 

Platinum Underwriters Holdings, Ltd.
Consolidated Statements of Income and Comprehensive Income
For The Quarter and Year Ended December 31, 2005 and 2004 (Unaudited)
($ in thousands, except per share amounts)
                                 
    Three Months Ended     Twelve Months Ended  
    December 31, 2005     December 31, 2004     December 31, 2005     December 31, 2004  
Revenue
                                
Net premiums earned
   $ 442,825     $ 432,936     $ 1,714,723     $ 1,447,935  
Net investment income
     37,195       26,242       129,445       84,532  
Net realized capital gains (losses)
     (1,984 )     520       (3,046 )     1,955  
Other income (expense)
     (385 )     1,074       (586 )     3,211  
 
                        
Total revenue
     477,651       460,772       1,840,536       1,537,633  
 
                        
 
                                
Expenses
                                
Losses and loss adjustment expenses
     462,257       283,645       1,505,425       1,019,804  
Acquisition expenses
     107,100       94,935       403,135       327,821  
Other underwriting expenses
     14,467       10,053       55,669       53,137  
Corporate expenses
     3,792       2,844       14,158       13,196  
Net foreign currency exchange (gains) losses
     241       (399 )     2,111       (725 )
Interest expense
     6,820       2,316       20,006       9,268  
Loss on repurchase of debt
     2,486       —       2,486       —  
 
                        
Total expenses
     597,163       393,394       2,002,990       1,422,501  
 
                                
 
                        
Income (loss) before income tax expense
     (119,512 )     67,378       (162,454 )     115,132  
 
                                
Income tax expense (benefit)
     (16,976 )     17,456       (24,967 )     30,349  
 
                                
 
                        
Net income (loss)
     (102,536 )     49,922       (137,487 )     84,783  
 
                                
Preferred dividends
     737       —       737       —  
 
                                
 
                        
Net income (loss) available to common shareholders
   $ (103,273 )   $ 49,922     $ (138,224 )   $ 84,783  
 
                        
 
                                
Basic
                                
Weighted average shares outstanding
     53,339       43,073       45,915       43,158  
Basic earnings (loss) per share
   $ (1.94 )   $ 1.16     $ (3.01 )   $ 1.96  
 
                                
Diluted
                                
Weighted average shares outstanding
     53,339       49,819       45,915       50,261  
Diluted earnings (loss) per share
   $ (1.94 )   $ 1.03     $ (3.01 )   $ 1.81  
 
                                
Comprehensive income (loss)
                                
Net income (loss)
   $ (102,536 )   $ 49,922     $ (137,487 )   $ 84,783  
Other comprehensive income (loss), net of tax
     (15,000 )     (4,193 )     (52,970 )     (6,522 )
 
                        
Comprehensive income (loss)
   $ (117,536 )   $ 45,729     $ (190,457 )   $ 78,261  
 
                        

 

 

Platinum Underwriters Holdings, Ltd.
Condensed Consolidated Balance Sheets
As of December 31, 2005 and 2004
($ in thousands, except per share data)
                 
    December 31, 2005     December 31, 2004  
Assets
                
Investments
   $ 3,000,889     $ 2,246,971  
Short term investments and cash and cash equivalents
     829,539       209,897  
Receivables
     567,449       580,048  
Accrued investment income
     29,230       23,663  
Reinsurance balances (prepaid and recoverable)
     76,109       4,892  
Deferred acquisition costs
     130,800       136,038  
Funds held
     291,629       198,048  
Other assets
     228,730       22,438  
 
            
Total assets
   $ 5,154,375     $ 3,421,995  
 
            
 
                
Liabilities
                
Unpaid losses and loss adjustment expenses
   $ 2,323,990     $ 1,380,955  
Unearned premiums
     502,018       502,423  
Debt obligations
     292,840       137,500  
Commissions payable
     186,654       181,925  
Other liabilities
     308,624       86,189  
 
            
Total liabilities
     3,614,126       2,288,992  
 
                
Total shareholders’ equity
     1,540,249       1,133,003  
 
            
Total liabilities and shareholders’ equity
   $ 5,154,375     $ 3,421,995  
 
            
 
                
 
            
Book value per common share
   $ 23.22     $ 26.30  
 
            

 

 

Platinum Underwriters Holdings, Ltd.
Segment Reporting
For the Three Months Ended December 31, 2005 and 2004 (Unaudited)
($ in thousands)
Three Months Ended December 31, 2005
                                 
    Property                    
    and Marine     Casualty     Finite Risk     Total  
Segment underwriting results
                                
Net premiums written
   $ 121,703       187,813       81,262     $ 390,778  
Net premiums earned
     154,454       201,088       87,283       442,825  
 
                        
Losses and loss adjustment expenses
     264,442       136,422       61,393       462,257  
Acquisition expenses
     24,546       51,135       31,419       107,100  
Other underwriting expenses
     6,479       6,511       1,477       14,467  
 
                        
Total underwriting expenses
     295,467       194,068       94,289       583,824  
 
                        
Segment underwriting income (loss)
   $ (141,013 )     7,020       (7,006 )     (140,999 )
 
                          
Net investment income
                             37,195  
Net realized capital losses
                             (1,984 )
Net foreign currency exchange losses
                             (241 )
Other expense
                             (385 )
Corporate expenses not allocated to segments
                             (3,792 )
Interest expense
                             (6,820 )
Loss on repurchase of debt
                             (2,486 )
 
                              
Loss before income tax benefit
                           $ (119,512 )
 
                              
GAAP underwriting ratios:
                                
Losses and LAE
     171.2 %     67.8 %     70.3 %     104.4 %
Acquisition expense
     15.9 %     25.4 %     36.0 %     24.2 %
Other underwriting expense
     4.2 %     3.2 %     1.7 %     3.3 %
 
                        
Combined
     191.3 %     96.4 %     108.0 %     131.9 %
 
                        
 
                                
Three Months Ended December 31, 2004
                                
Segment underwriting results
                                
Net premiums written
   $ 110,675       168,706       115,504     $ 394,885  
Net premiums earned
     131,712       186,929       114,295       432,936  
 
                        
Losses and loss adjustment expenses
     64,510       124,621       94,514       283,645  
Acquisition expenses
     18,869       45,884       30,182       94,935  
Other underwriting expenses
     6,547       3,107       399       10,053  
 
                        
Total underwriting expenses
     89,926       173,612       125,095       388,633  
 
                        
Segment underwriting income (loss)
   $ 41,786       13,317       (10,800 )     44,303  
 
                          
Net investment income
                             26,242  
Net realized capital gains
                             520  
Net foreign currency exchange gains
                             399  
Other income
                             1,074  
Corporate expenses not allocated to segments
                             (2,844 )
Interest expense
                             (2,316 )
 
                              
Income before income tax expense
                           $ 67,378  
 
                              
 
                                
GAAP underwriting ratios:
                                
Losses and LAE
     49.0 %     66.7 %     82.7 %     65.5 %
Acquisition expense
     14.3 %     24.5 %     26.4 %     21.9 %
Other underwriting expense
     5.0 %     1.7 %     0.3 %     2.3 %
 
                        
Combined
     68.3 %     92.9 %     109.4 %     89.7 %
 
                        
The GAAP underwriting ratios are calculated by dividing each item above by net premiums earned.

 

 

Platinum Underwriters Holdings, Ltd.
Segment Reporting
For the Year Ended December 31, 2005 and 2004 (Unaudited)
($ in thousands)
Twelve Months Ended December 31, 2005
                                 
    Property                    
    and Marine     Casualty     Finite Risk     Total  
Segment underwriting results
                                
Net premiums written
   $ 575,055       809,031       333,636     $ 1,717,722  
Net premiums earned
     569,173       789,629       355,921       1,714,723  
 
                        
Losses and loss adjustment expenses
     756,742       511,609       237,074       1,505,425  
Acquisition expenses
     93,983       194,397       114,755       403,135  
Other underwriting expenses
     26,074       24,690       4,905       55,669  
 
                        
Total underwriting expenses
     876,799       730,696       356,734       1,964,229  
 
                        
Segment underwriting income (loss)
   $ (307,626 )     58,933       (813 )     (249,506 )
 
                          
Net investment income
                             129,445  
Net realized capital losses
                             (3,046 )
Net foreign currency exchange losses
                             (2,111 )
Other expense
                             (586 )
Corporate expenses not allocated to segments
                             (14,158 )
Interest expense
                             (20,006 )
Loss on repurchase of debt
                             (2,486 )
 
                              
Loss before income tax benefit
                           $ (162,454 )
 
                              
GAAP underwriting ratios:
                                
Losses and LAE
     133.0 %     64.8 %     66.6 %     87.8 %
Acquisition expense
     16.5 %     24.6 %     32.2 %     23.5 %
Other underwriting expense
     4.6 %     3.1 %     1.4 %     3.2 %
 
                        
Combined
     154.1 %     92.5 %     100.2 %     114.5 %
 
                        
 
                                
Twelve Months Ended December 31, 2004
                                
Segment underwriting results
                                
Net premiums written
   $ 504,439       677,399       464,175     $ 1,646,013  
Net premiums earned
     485,135       611,893       350,907       1,447,935  
 
                        
Losses and loss adjustment expenses
     349,557       418,355       251,892       1,019,804  
Acquisition expenses
     76,360       151,649       99,812       327,821  
Other underwriting expenses
     27,827       19,086       6,224       53,137  
 
                        
Total underwriting expenses
     453,744       589,090       357,928       1,400,762  
 
                        
Segment underwriting income (loss)
   $ 31,391       22,803       (7,021 )     47,173  
 
                          
Net investment income
                             84,532  
Net realized capital gains
                             1,955  
Net foreign currency exchange gains
                             725  
Other income
                             3,211  
Corporate expenses not allocated to segments
                             (13,196 )
Interest expense
                             (9,268 )
 
                              
Income before income tax expense
                           $ 115,132  
 
                              
 
                                
GAAP underwriting ratios:
                                
Losses and LAE
     72.1 %     68.4 %     71.8 %     70.4 %
Acquisition expense
     15.7 %     24.8 %     28.4 %     22.6 %
Other underwriting expense
     5.7 %     3.1 %     1.8 %     3.7 %
 
                        
 
     93.5 %     96.3 %     102.0 %     96.7 %
 
                        
The GAAP underwriting ratios are calculated by dividing each item above by net premiums earned.