UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 26, 2011
MAIDEN HOLDINGS, LTD.
(Exact name of registrant as specified in its charter)
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Bermuda
(State or other jurisdiction
of incorporation)
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001-34042
(Commission File
Number)
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98-0570192
(IRS Employer
Identification No.)
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131 Front Street, Hamilton HM12, Bermuda
(Address of principal executive offices and zip code)
(441) 292-7090
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Item 1.01
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Entry into a Material Definitive Agreement.
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Endorsement No. 1 to Amended and Restated Quota Share Reinsurance Agreement
On September 17, 2007, pursuant to the First Amendment to Master Agreement between and Maiden Holdings, Ltd. (the “Company”) and AmTrust Financial Services, Inc. (the “AmTrust”), the parties caused the Company’s Bermuda subsidiary, Maiden Insurance Company Ltd. (“Maiden Bermuda”) and AmTrust’s Bermuda subsidiary, AmTrust International Insurance, Ltd. (“AII”) to enter into a quota share reinsurance agreement (the “Quota Share”), by which AII retrocedes to Maiden Bermuda an amount equal to 40% of the premium written by AmTrust’s U.S., Irish and U.K. insurance companies (the “AmTrust Ceding Insurers”), net of the cost of unaffiliated inuring reinsurance (and in the case of AmTrust’s U.K. insurance subsidiary, AmTrust Europe Limited (“AEL”), net of commissions) and 40% of losses with respect to the lines of business (workers’ compensation, extended warranty and specialty risk and specialty program business for commercial property and casualty risks, including general liability, commercial property, commercial automobile liability and auto physical damage, but excluding certain specialty risk programs that AmTrust commenced writing after the effective date and risks, other than workers’ compensation risks and certain business written by AmTrust’s Irish subsidiary, AmTrust International Underwriters Limited (“AIUL”), for which the AmTrust Ceding Insurers’ net retention exceeds $5,000,000) then being written by AmTrust (the “Covered Business”). In addition, the Quota Share requires that Maiden Bermuda provide to AII sufficient collateral to secure its proportionate share of AII’s obligations to AmTrust’s U.S. insurance company subsidiaries. AII is required to return to Maiden Bermuda any assets of Maiden Bermuda in excess of the amount required to secure its proportionate share of AII’s collateral requirements, subject to certain deductions.
The existing terms of the Quota Share provide that AII receives a ceding commission of 31% of ceded written premiums with respect to all Covered Business and 34.375% for retail commercial package business, which AmTrust began writing in 2008. From the inception of the Quota Share during the third quarter of 2007 through the end of 2008, workers’ compensation and commercial property and casualty program business made up 59.5% of the Covered Business, while specialty risk and extended warranty made up 40.5%. As of March 31, 2011, specialty risk and extended warranty business, which generally has lower policy acquisition expenses than workers’ compensation and commercial property and casualty program business, constituted 50.2% of the Covered Business, while workers’ compensation and commercial property and casualty program business constituted 49.8% of the Covered Business. Therefore, the parties agreed to adjust the ceding commission to reflect the change in the Covered Business and the effect on AmTrust’s expenses, effective April 1, 2011, subject to approval of the Company’s and AmTrust’s respective Audit Committees.
On July 26, 2011, after receipt of approval from each of the respective Audit Committees, the Company and AmTrust executed the amendment to the Quota Share effective April 1, 2011. From April 1, 2011 through December 31, 2011, AII will receive a ceding commission of 30% of ceded written premiums with respect to all Covered Business. Commencing January 1, 2012, the ceding commission, excluding the retail package business ceding commission (which remains at 34.375%), will be adjusted within a range of 30% (if specialty risk and extended warranty subject premium, excluding ceded premium related to AmTrust’s European hospital liability business discussed below, is greater than 42% of the total subject premium excluding retail package business) to 31% (if the specialty risk and extended warranty subject premium is less than 38% of the total subject premium excluding retail package business). In addition, the parties agreed to extend the term of the Quota Share one extra year through June 30, 2014 and for Maiden Bermuda to continue to provide AII with sufficient collateral to secure its proportionate share of AII’s obligations under the Quota Share with respect to business written by AmTrust’s insurance company subsidiaries (foreign and domestic).
Quota Share Reinsurance Agreement for European Hospital Liability business
Maiden Bermuda entered into a separate reinsurance agreement with AEL and AIUL by which AEL and AIUL cede 40% of their European hospital liability business, including business in force at April 1, 2011, to Maiden Bermuda (the “European Hospital Liability Quota Share”). The European Hospital Liability Quota Share has an initial term of one year, effective April 1, 2011, and can be terminated at April 1, 2012 or any April 1 thereafter by either party on four months’ notice. Maiden Bermuda pays AEL and AIUL a 5% ceding commission, and AEL and AIUL will earn a profit commission of 50% of the amount by which the ceded loss ratio is lower than 65%. In addition, Maiden Bermuda pays AmTrust’s subsidiary, AII Reinsurance Broker, Ltd., brokerage fees in the amount of 1.25% of net premiums ceded.
Item 2.02 Results of Operations and Financial Condition.
On July 27, 2011, the Company issued a press release announcing its results of operations for the fiscal quarter ended June 30, 2011. A copy of the press release is furnished herewith as Exhibit 99.1 and incorporated herein by reference.
The information contained in this Item 2.02 and in the accompanying exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or otherwise subject to the liabilities of that section, or incorporated by reference in any filing under the Exchange Act or the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.
Item 8.01 Other Events.
On July 27, 2011, the Company also issued a press release announcing a quarterly cash dividend of $0.08 per share of common stock payable on October 17, 2011 to shareholders of record as of October 3, 2011. A copy of the press release is hereby filed with the Commission and incorporated by reference herein as Exhibit 99.2.
Item 9.01 Financial Statements and Exhibits.
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(d)
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Exhibits
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Exhibit
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No.
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Description
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99.1
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Press Release of Maiden Holdings, Ltd., dated July 27, 2011.
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99.2
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Press Release of Maiden Holdings, Ltd., dated July 27, 2011.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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Date: July 27, 2011
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MAIDEN HOLDINGS, LTD.
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By:
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/s/ Lawrence F. Metz | |
| Lawrence F. Metz | |||
| Senior Vice President, General Counsel and Secretary | |||
EXHIBIT INDEX
Exhibit
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No.
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Description
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99.1
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Press Release of Maiden Holdings, Ltd., dated July 27, 2011.
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99.2
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Press Release of Maiden Holdings, Ltd., dated July 27, 2011.
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July 27, 2011
Maiden Holdings, Ltd. Reports Second Quarter Operating Earnings of $11.2 Million; Net Loss of $24.4 Million Result of Previously Announced Charges for Senior Debt Offering and U.S. Storm Activity
Book Value of $10.52 per Share(5) Up 1.2% Since Year-End 2010
Second Quarter 2011 Financial Highlights
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·
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Net operating earnings(1) of $11.2 million compared with $21.2 million in second quarter of 2010; Operating EPS(1) of $0.15 per share compared to $0.30 per share in second quarter of 2010
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·
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Second quarter 2011 results include previously announced $9.5 million or $0.13 per share underwriting impact from second quarter U.S. thunderstorm and tornado activity
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·
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Net written premium of $437.0 million increased 39.6% from second quarter of 2010
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·
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Net earned premium of $367.8 million increased 29.6% from second quarter of 2010
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·
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Net investment income of $19.8 million up 5.0% from second quarter of 2010
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·
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Successful $107.5 million Senior Notes offering to reduce interest expense by $6.2 million or $.08 per share on an on annualized basis
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·
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Total assets of $3.3 billion increased 10.4% from year-end 2010
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·
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Annualized operating return on equity(1) of 5.9% for the second quarter 2011 and 8.3% 2011 year to date
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·
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Net loss of $24.4 million the result of $35.4 million or $0.49 per share in non-recurring charges related to recently completed public debt offering
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·
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Combined ratio(10) of 99.8% compared with 96.3% in the second quarter of 2010
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·
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U.S. storm activity increased combined ratio by 2.6% in second quarter 2011
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HAMILTON, Bermuda - Maiden Holdings, Ltd. (Nasdaq: MHLD) today reported a second quarter 2011 net loss of $24.4 million or ($0.34) per diluted share(4) and net operating earnings(1) of $11.2 million or $0.15 per diluted share.
Commenting on Maiden’s results, Maiden’s CEO Art Raschbaum said “Despite the impact of non-recurring debt issuance related charges and unprecedented frequency and severity of storms in the second quarter, we continued our efforts to strengthen earnings by strategically expanding the underwriting portfolio in a disciplined manner, growing our asset base and reducing the debt cost of capital. Notwithstanding the impact of the unusual frequency and severity of weather related losses in the quarter, Maiden maintained profitable underwriting results for the quarter and through the first six months reflecting our continued focus on serving the non-catastrophe needs of our regional and specialty insurer clients."
At June 30, 2011, shareholders' equity of $759.3 million grew 1.2% from year-end 2010 and book value per share(5) increased 1.2% to $10.52 from $10.40 at year-end 2010.
Maiden Holdings, Ltd.
Second Quarter 2011 Earnings Report
July 27, 2011
Page 2
Second Quarter 2011 Results
On June 24, 2011, Maiden completed a $107.5 million offering of 8.25% Senior Notes which mature on June 15, 2041. On July 15, 2011, Maiden redeemed a like amount of junior subordinated debt related to its 2009 TRUPS Offering. As a result of these transactions, in the second quarter 2011 Maiden incurred certain non-recurring charges, including an early redemption charge of $15.1 million or $0.21 per share, as well as a non-cash charge of $20.3 million or $0.28 per share related to accelerated amortization of discount and issuance costs of junior subordinated debt redeemed on July 15, 2011.
Net written premium totaled $437.0 million compared with $313.1 million in the second quarter of 2010. Net earned premium of $367.8 million increased 29.6% from $283.8 million for the same period last year.
Net investment income of $19.8 million grew 5.0% from $18.9 million in the second quarter of 2010.
Loss and loss adjustment expenses of $250.6 million rose $75.2 million from $175.4 million in the second quarter of 2010. Results reflected a loss ratio(7) of 67.7% compared with 61.8% for the same period a year ago.
Commission and other acquisition expenses together with general and administrative expenses of $118.7 million increased $20.7 million from the year ago quarter and reflected a total expense ratio of 32.1% compared with 34.5%. General and administrative expenses for the quarter totaled $12.8 million compared with $9.5 million in the second quarter of 2010. These results reflected a general and administrative expense ratio(9) of 3.5% compared to 3.3% in the second quarter of 2010.
The combined ratio(10) for the second quarter totaled 99.8% compared with 96.3% in the second quarter of 2010.
Total assets of $3.3 billion increased 10.4% from $3.0 billion from year end 2010. Total investable assets(3) of $2.45 billion which include total investments, cash, restricted cash, cash equivalents, funds withheld and a loan to a related party, increased $96.1 million from year end 2010. Shareholders' equity totaled $759.3 million up 1.2% from $750.2 million at year end 2010.
As previously disclosed, on June 24, 2011, the Company issued $107.5 million of 8.25% Senior Notes which mature on June 15, 2041. On July 15, 2011, the Company completed a redemption of a like amount of junior subordinated debentures associated with its 2009 TRUPS Offering. The Senior Notes commenced trading on the New York Stock Exchange on July 21, 2011 under the ticker symbol “MHNA”.
During the second quarter of 2011, the Board of Directors declared a dividend of $0.07 per share.
Maiden Holdings, Ltd.
Second Quarter 2011 Earnings Report
July 27, 2011
Page 3
2011 Year-to-Date Results
Net written premium of $886.5 million increased 42.0% from $624.3 million during the first half of 2010. Net earned premium of $714.3 million grew $166.6 million, or 30.4%, from $547.7 million for the same period last year.
Net investment income of $39.0 million increased 6.9% from $36.5 million in the first six months of 2010.
Loss and loss adjustment expenses of $471.8 million rose $126.1 million from $345.6 million in the first half of 2010. Results reflected a loss ratio of 65.4% compared with 63.1% for the same period a year ago. U.S. storm activity in 2011 increased the loss ratio by 1.3 points.
Commission and other acquisition expenses together with general and administrative expenses of $238.0 million increased $54.1 million from the first half of last year and reflected a total expense ratio of 33.0% compared with 33.6%. General and administrative expenses for the period totaled $25.1 million compared with $18.0 million in 2010. These results reflected a general and administrative expense ratio of 3.5% compared to 3.3% in the first half of 2010.
The combined ratio(10) for the first half of 2011 totaled 98.4% compared with 96.7% in the first half of 2010.
Conference Call
Maiden CEO Art Raschbaum and CFO John Marshaleck will review these results tomorrow morning via teleconference and live audio webcast beginning at 10:00 a.m. AT (9:00 a.m. ET).
To participate please access one of the following no later than 9:55 a.m. AT (8:55 a.m. ET):
1.877.734.5373 for U.S. callers
1. 973.200.3059 for callers outside the U.S.
Webcast: http://www.maiden.bm/presentations_conferences
A replay of the conference call will be available beginning at 1:00 p.m. AT (12:00 p.m. ET), July 28, 2011 through midnight on August 4, 2011. To listen to the replay please dial toll free: 1.855.859.2056 (U.S. callers) or toll 1.404.537.3406 (callers outside the U.S.) and enter the Passcode: 83404930; or access http://www.maiden.bm/presentations_conferences.
About Maiden Holdings, Ltd.
Maiden Holdings, Ltd. is a Bermuda-based holding company formed in 2007. Through our subsidiaries which are each A- rated (excellent) by A.M. Best, we are focused on providing non-catastrophic, customized reinsurance products and services, to small and mid-size insurance companies in the United States and Europe. As of June 30, 2011, the Company had $3.3 billion in assets and total capital(6) of $1,082.1 million including shareholders' equity of $759.3 million. MHLD-G
Maiden Holdings, Ltd.
Second Quarter 2011 Earnings Report
July 27, 2011
Page 4
You may access the Maiden Holdings, Ltd. Logo via http://www.globenewswire.com/newsroom/prs/?pkgid=5006
(1)(3)(4)(5)(6)Please see the Non-GAAP Financial Measures table for additional information on these non-GAAP financial measures and reconciliation of these measures to GAAP measures.
(7)(10) Loss ratio and combined ratio are operating metrics. Please see the additional information on these measures under Segment information tables.
Forward Looking Statements
This release contains "forward-looking statements" which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The forward-looking statements are based on the Company's current expectations and beliefs concerning future developments and their potential effects on the Company. There can be no assurance that actual developments will be those anticipated by the Company. Actual results may differ materially from those projected as a result of significant risks and uncertainties, including non-receipt of the expected payments, changes in interest rates, effect of the performance of financial markets on investment income and fair values of investments, developments of claims and the effect on loss reserves, accuracy in projecting loss reserves, the impact of competition and pricing environments, changes in the demand for the Company's products, the effect of general economic conditions and unusual frequency of storm activity, adverse state and federal legislation, regulations and regulatory investigations into industry practices, developments relating to existing agreements, heightened competition, changes in pricing environments, and changes in asset valuations. Additional information about these risks and uncertainties, as well as others that may cause actual results to differ materially from those projected is contained in Item 1A. Risk Factors in the Company's Annual Report on Form 10-K for the year ended December 31, 2010 as updated in periodic filings with the SEC. The Company undertakes no obligation to publicly update any forward-looking statements, except as may be required by law.
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CONTACT:
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Maiden Holdings, Ltd.
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John Marshaleck
441.298.4902
irelations@maiden.bm
Maiden Holdings, Ltd.
Balance Sheet
(in thousands (000's), except per share data)
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June 30, 2011 (Unaudited)
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December 31, 2010 (Audited)
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|||||||
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Assets
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||||||||
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Fixed maturities, available-for-sale, at fair value (amortized cost $1,774,615; $1,819,775)
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$ | 1,850,779 | $ | 1,874,433 | ||||
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Fixed maturities, trading, at fair value (amortized cost $50,172)
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49,860 | - | ||||||
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Other investments, at fair value (cost $1,783; $5,751)
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1,962 | 5,847 | ||||||
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Total investments
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1,902,601 | 1,880,280 | ||||||
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Cash and cash equivalents
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198,356 | 96,151 | ||||||
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Restricted cash and cash equivalents
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67,207 | 89,756 | ||||||
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Accrued investment income
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12,294 | 14,091 | ||||||
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Reinsurance balances receivable, net
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379,806 | 226,333 | ||||||
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Funds withheld
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145,515 | 152,713 | ||||||
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Prepaid reinsurance premiums
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37,555 | 28,992 | ||||||
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Reinsurance recoverable on unpaid losses
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15,587 | 6,656 | ||||||
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Loan to related party
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167,975 | 167,975 | ||||||
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Deferred commission and other acquisition costs
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245,423 | 203,631 | ||||||
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Goodwill and intangible assets, net
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101,284 | 103,905 | ||||||
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Other assets
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19,688 | 12,079 | ||||||
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Total Assets
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$ | 3,293,291 | $ | 2,982,562 | ||||
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Liabilities and Equity
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||||||||
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Liabilities
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||||||||
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Reserve for loss and loss adjustment expenses
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$ | 1,279,709 | $ | 1,226,773 | ||||
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Unearned premiums
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841,017 | 657,556 | ||||||
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Accrued expenses and other liabilities
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90,206 | 56,368 | ||||||
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Securities sold under agreements to repurchase, at contract value
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- | 76,225 | ||||||
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Senior notes
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107,500 | - | ||||||
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Junior subordinated debt
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215,228 | 215,191 | ||||||
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Total Liabilities
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2,533,660 | 2,232,113 | ||||||
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Equity:
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||||||||
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Common shares
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731 | 731 | ||||||
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Additional paid-in capital
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577,904 | 577,135 | ||||||
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Accumulated other comprehensive income
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77,848 | 54,334 | ||||||
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Retained earnings
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106,654 | 121,775 | ||||||
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Treasury stock, at cost
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(3,801 | ) | (3,801 | ) | ||||
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Total Maiden Shareholders’ Equity
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759,336 | 750,174 | ||||||
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Noncontrolling interest in subsidiary
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295 | 275 | ||||||
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Total Equity
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759,631 | 750,449 | ||||||
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Total Liabilities and Equity
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$ | 3,293,291 | $ | 2,982,562 | ||||
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Book value per share (5)
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$ | 10.52 | $ | 10.40 | ||||
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Common shares outstanding
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72,150,630 | 72,107,100 | ||||||
Income Statement
(in thousands (000's), except per share data)
(Unaudited)
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For the Three Months Ended June 30, 2011
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For the Three Months Ended June 30, 2010
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For the Six Months Ended June 30, 2011
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For the Six Months Ended June 30, 2010
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|||||||||||||
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Revenues:
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||||||||||||||||
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Gross premiums written
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$ | 462,395 | $ | 334,784 | $ | 933,172 | $ | 662,166 | ||||||||
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Net premiums written
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$ | 436,966 | $ | 313,050 | $ | 886,466 | $ | 624,341 | ||||||||
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Change in unearned premiums
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(69,183 | ) | (29,266 | ) | (172,148 | ) | (76,628 | ) | ||||||||
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Net premiums earned
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367,783 | 283,784 | 714,318 | 547,713 | ||||||||||||
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Other insurance revenue
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2,179 | - | 6,834 | - | ||||||||||||
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Net investment income
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19,818 | 18,875 | 38,959 | 36,456 | ||||||||||||
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Net realized and unrealized investment gains (losses)
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591 | 535 | 638 | 847 | ||||||||||||
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Total revenues
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390,371 | 303,194 | 760,749 | 585,016 | ||||||||||||
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Expenses:
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||||||||||||||||
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Net loss and loss adjustment expenses
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250,599 | 175,354 | 471,781 | 345,639 | ||||||||||||
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Commission and other acquisition expenses
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105,824 | 88,447 | 212,896 | 165,843 | ||||||||||||
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General and administrative expenses
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12,839 | 9,484 | 25,132 | 18,036 | ||||||||||||
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Total expenses
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369,262 | 273,285 | 709,809 | 529,518 | ||||||||||||
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Income from operations (2)
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21,109 | 29,909 | 50,940 | 55,498 | ||||||||||||
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Other expense
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||||||||||||||||
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Amortization of intangible assets
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(1,259 | ) | (1,452 | ) | (2,517 | ) | (2,904 | ) | ||||||||
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Foreign exchange gains (losses)
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939 | (414 | ) | 2,001 | (1,567 | ) | ||||||||||
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Interest and amortization expense
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(9,292 | ) | (9,116 | ) | (18,410 | ) | (18,231 | ) | ||||||||
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Accelerated amortization of junior subordinated debt discount and issuance cost
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(20,313 | ) | - | (20,313 | ) | - | ||||||||||
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Junior subordinated debt redemption expense
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(15,050 | ) | - | (15,050 | ) | - | ||||||||||
| (44,975 | ) | (10,982 | ) | (54,289 | ) | (22,702 | ) | |||||||||
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(Loss) income before income taxes
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(23,866 | ) | 18,927 | (3,349 | ) | 32,796 | ||||||||||
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Income taxes:
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||||||||||||||||
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Current tax expense
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211 | - | 1,096 | - | ||||||||||||
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Deferred tax expense
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295 | 290 | 582 | 590 | ||||||||||||
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Income tax expense
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506 | 290 | 1,678 | 590 | ||||||||||||
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Net (loss) income
|
$ | (24,372 | ) | $ | 18,637 | $ | (5,027 | ) | $ | 32,206 | ||||||
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Less: Loss attributable to noncontrolling interest
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6 | - | 3 | - | ||||||||||||
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Net (loss) income attributable to Maiden
|
(24,366 | ) | 18,637 | (5,024 | ) | 32,206 | ||||||||||
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Net operating earnings (1)
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$ | 11,204 | $ | 21,239 | $ | 30,982 | $ | 37,401 | ||||||||
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Basic (loss) earnings per common share attributable to Maiden shareholders
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$ | (0.34 | ) | $ | 0.27 | $ | (0.07 | ) | $ | 0.46 | ||||||
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Diluted (loss) earnings per common share attributable to Maiden shareholders (4)
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$ | (0.34 | ) | $ | 0.26 | $ | (0.07 | ) | $ | 0.46 | ||||||
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Basic operating earnings per common share attributable to Maiden shareholders
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$ | 0.16 | $ | 0.30 | $ | 0.43 | $ | 0.53 | ||||||||
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Diluted operating earnings per common share attributable to Maiden shareholders
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$ | 0.15 | $ | 0.30 | $ | 0.43 | $ | 0.53 | ||||||||
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Dividends declared per common share
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$ | 0.07 | $ | 0.065 | $ | 0.14 | $ | 0.13 | ||||||||
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Weighted average number of basic shares outstanding
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72,118,315 | 70,291,894 | 72,112,785 | 70,291,650 | ||||||||||||
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Weighted average number of diluted shares outstanding
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72,945,339 | 70,770,849 | 72,863,494 | 70,773,764 | ||||||||||||
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Net Loss and loss adjustment expense ratio (7)
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67.7 | % | 61.8 | % | 65.4 | % | 63.1 | % | ||||||||
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Commission and other acquisition expense ratio (8)
|
28.6 | % | 31.2 | % | 29.5 | % | 30.3 | % | ||||||||
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General and administrative expense ratio (9)
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3.5 | % | 3.3 | % | 3.5 | % | 3.3 | % | ||||||||
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Combined ratio (10)
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99.8 | % | 96.3 | % | 98.4 | % | 96.7 | % | ||||||||
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Annualized return on equity
|
(12.8 | %) | 10.4 | % | (1.3 | %) | 9.3 | % | ||||||||
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Annualized return on equity on operating earnings
|
5.9 | % | 11.9 | % | 8.3 | % | 10.8 | % | ||||||||
Maiden Holdings, Ltd.
Non - GAAP Financial Measure
(in thousands (000's), except per share data)
(Unaudited)
|
For the Three Months Ended June 30, 2011
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For the Three Months Ended June 30, 2010
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For the Six Months Ended June 30, 2011
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For the Six Months Ended June 30, 2010
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|||||||||||||
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Reconciliation of net income to net operating earnings:
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||||||||||||||||
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Net (loss) income attributable to Maiden
|
$ | (24,366 | ) | $ | 18,637 | $ | (5,024 | ) | $ | 32,206 | ||||||
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Add (subtract)
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||||||||||||||||
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Net realized and unrealized investment (gains) losses
|
(591 | ) | (535 | ) | (638 | ) | (847 | ) | ||||||||
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Foreign exchange (gains) losses
|
(939 | ) | 414 | (2,001 | ) | 1,567 | ||||||||||
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Amortization of intangible assets
|
1,259 | 1,452 | 2,517 | 2,904 | ||||||||||||
|
Accelerated amortization of junior subordinated debt discount and issuance cost
|
20,313 | - | 20,313 | - | ||||||||||||
|
Junior subordinated debt redemption expense
|
15,050 | - | 15,050 | - | ||||||||||||
|
Non-recurring general and administrative expenses relating to acquisition of GMAC International Insurance
|
183 | 981 | 183 | 981 | ||||||||||||
|
Non-cash deferred tax charge
|
295 | 290 | 582 | 590 | ||||||||||||
|
Net operating earnings attributable to Maiden (1)
|
$ | 11,204 | $ | 21,239 | $ | 30,982 | $ | 37,401 | ||||||||
|
Operating earnings per common share attributable to Maiden shareholders:
|
||||||||||||||||
|
Basic earnings per common share attributable to Maiden shareholders
|
$ | 0.16 | $ | 0.30 | $ | 0.43 | $ | 0.53 | ||||||||
|
Diluted earnings per common share attributable to Maiden shareholders
|
$ | 0.15 | $ | 0.30 | $ | 0.43 | $ | 0.53 | ||||||||
|
Reconciliation of net income to income from operations:
|
||||||||||||||||
|
Net (loss) income attributable to Maiden
|
$ | (24,366 | ) | $ | 18,637 | $ | (5,024 | ) | $ | 32,206 | ||||||
|
Add (subtract)
|
||||||||||||||||
|
Foreign exchange (gains) losses
|
(939 | ) | 414 | (2,001 | ) | 1,567 | ||||||||||
|
Amortization of intangible assets
|
1,259 | 1,452 | 2,517 | 2,904 | ||||||||||||
|
Interest and amortization expense
|
9,292 | 9,116 | 18,410 | 18,231 | ||||||||||||
|
Accelerated amortization of junior subordinated debt discount and issuance cost
|
20,313 | - | 20,313 | - | ||||||||||||
|
Junior subordinated debt redemption expense
|
15,050 | - | 15,050 | - | ||||||||||||
|
Income tax expense
|
506 | 290 | 1,678 | 590 | ||||||||||||
|
Loss attributable to noncontrolling interest
|
(6 | ) | - | (3 | ) | - | ||||||||||
|
Income from operations attributable to Maiden (2)
|
$ | 21,109 | $ | 29,909 | $ | 50,940 | $ | 55,498 | ||||||||
|
June 30,
2011
|
December 31,
2010
|
|||||||||||||||
|
Investable assets:
|
||||||||||||||||
|
Total investments
|
$ | 1,902,601 | $ | 1,880,280 | ||||||||||||
|
Cash and cash equivalents
|
198,356 | 96,151 | ||||||||||||||
|
Restricted cash and cash equivalents
|
67,207 | 89,756 | ||||||||||||||
|
Funds withheld (3)
|
113,100 | 119,000 | ||||||||||||||
|
Loan to related party
|
167,975 | 167,975 | ||||||||||||||
|
Total investable assets (3)
|
$ | 2,449,239 | $ | 2,353,162 | ||||||||||||
|
Capital:
|
||||||||||||||||
|
Junior subordinated debt
|
$ | 215,228 | $ | 215,191 | ||||||||||||
|
Senior notes
|
107,500 | - | ||||||||||||||
|
Total Maiden shareholders' equity
|
759,336 | 750,174 | ||||||||||||||
|
Total capital (6)
|
$ | 1,082,064 | $ | 965,365 | ||||||||||||
|
(1) Net operating earnings is a non-GAAP financial measure defined by the Company as net income attributable to Maiden excluding realized investment gains and losses, foreign exchange gains and losses, amortization of intangible assets, accelerated amortization of junior subordinated debt discount and issuance cost, junior subordinated debt redemption expense, non-recurring general and administrative expenses relating to acquisition and non-cash deferred tax charge and should not be considered as an alternative to net income. The Company's management believes that net operating earnings is a useful indicator of trends in the Company's underlying operations. The Company's measure of net operating earnings may not be comparable to similarly titled measures used by other companies.
|
|
(2) Income from Operations is a non-GAAP financial measure defined by the Company as net income attributable to Maiden excluding foreign exchange gains and losses, amortization of intangible assets, interest and amortization expense, accelerated amortization of junior subordinated debt discount and issuance cost, junior subordinated debt redemption expense, income tax expense and loss attributable to noncontrolling interest and should not be considered as an alternative to net income. The Company’s management believes that income from operations is a useful measure of the Company’s underlying earnings fundamentals based on its underwriting and investment income before financing costs. This income from operations enables readers of this information to more clearly understand the essential operating results of the Company. The Company’s measure of income from operations may not be comparable to similarly titled measures used by other companies.
|
|
(3) Investable assets is the total of the Company's investments, cash and cash equivalents, loan to a related party and the portion of the funds withheld balance that comprises fixed maturity securities and cash and cash equivalents.
|
|
(4) During a period of loss, the basic weighted average common shares outstanding is used in the denominator of the diluted loss per common share computation as the effect of including potential dilutive shares would be anti-dilutive.
|
|
(5) Calculated by dividing total Maiden shareholders' equity by total common shares outstanding.
|
|
(6) Capital is the total of the Company's junior subordinated debt, senior notes and shareholders' equity. The total capital as of June 30, 2011 is temporarily increased by $88,973, which represents the amount of junior subordinated debentures (net of accelerated amortization of discount) which were redeemed on July 15, 2011.
|
Maiden Holdings, Ltd.
Supplemental Financial Data - Segment Information
(in thousands (000's))
(Unaudited)
|
For the Three Months Ended June 30, 2011
|
Diversified Reinsurance
|
AmTrust Quota Share Reinsurance
|
ACAC Quota Share
|
Total
|
||||||||||||
|
Net premiums written
|
$
|
158,020
|
$
|
216,449
|
$
|
62,497
|
$
|
436,966
|
||||||||
|
Net premiums earned
|
170,288
|
136,299
|
61,196
|
367,783
|
||||||||||||
|
Other insurance revenue
|
2,179
|
-
|
-
|
2,179
|
||||||||||||
|
Net losses and loss expenses
|
(116,387)
|
(94,740)
|
(39,472)
|
(250,599)
|
||||||||||||
|
Commissions and other acquisition costs
|
(48,257)
|
(38,116)
|
(19,451)
|
(105,824)
|
||||||||||||
|
General and administrative expenses
|
(8,309)
|
(596)
|
(472)
|
(9,377)
|
||||||||||||
|
Underwriting (loss) income
|
$
|
(486)
|
$
|
2,847
|
$
|
1,801
|
$
|
4,162
|
||||||||
|
Reconciliation to net loss before income taxes
|
||||||||||||||||
|
Net investment income and realized and unrealized investment gains (losses)
|
20,409
|
|||||||||||||||
|
Amortization of intangible assets
|
(1,259)
|
|||||||||||||||
|
Foreign exchange gains
|
939
|
|||||||||||||||
|
Interest and amortization expense
|
(9,292)
|
|||||||||||||||
|
Accelerated amortization of junior subordinated debt discount and issuance cost
|
(20,313)
|
|||||||||||||||
|
Junior subordinated debt redemption expense
|
(15,050)
|
|||||||||||||||
|
Other general and administrative expenses
|
(3,462)
|
|||||||||||||||
|
|
||||||||||||||||
|
Net loss before income taxes
|
$
|
(23,866)
|
||||||||||||||
|
Net loss and loss expense ratio (7)
|
67.5%
|
69.5%
|
64.5%
|
67.7%
|
||||||||||||
|
Acquisition cost ratio (8)
|
28.0%
|
28.0%
|
31.8%
|
28.6%
|
||||||||||||
|
General and administrative expense ratio (9)
|
4.8%
|
0.4%
|
0.8%
|
3.5%
|
||||||||||||
|
Combined ratio (10)
|
100.3%
|
97.9%
|
97.1%
|
99.8%
|
||||||||||||
|
For the Three Months Ended June 30, 2010
|
Diversified Reinsurance
|
AmTrust Quota Share Reinsurance
|
ACAC Quota Share
|
Total
|
||||||||||||
|
Net premiums written
|
$
|
136,709
|
$
|
109,123
|
$
|
67,218
|
$
|
313,050
|
||||||||
|
Net premiums earned
|
161,779
|
101,664
|
20,341
|
283,784
|
||||||||||||
|
Net losses and loss expenses
|
(99,218)
|
(63,423)
|
(12,713)
|
(175,354)
|
||||||||||||
|
Commissions and other acquisition costs
|
(48,386)
|
(33,090)
|
(6,971)
|
(88,447)
|
||||||||||||
|
General and administrative expenses
|
(5,726)
|
(598)
|
-
|
(6,324)
|
||||||||||||
|
Underwriting income
|
$
|
8,449
|
$
|
4,553
|
$
|
657
|
$
|
13,659
|
||||||||
|
Reconciliation to net income before income taxes
|
||||||||||||||||
|
Net investment income and realized investment gains (losses)
|
19,410
|
|||||||||||||||
|
Amortization of intangible assets
|
(1,452)
|
|||||||||||||||
|
Foreign exchange losses
|
(414)
|
|||||||||||||||
|
Interest and amortization expense
|
(9,116)
|
|||||||||||||||
|
Other general and administrative expenses
|
(3,160)
|
|||||||||||||||
|
|
||||||||||||||||
|
Net income before income taxes
|
$
|
18,927
|
||||||||||||||
|
Net loss and loss expense ratio (7)
|
61.3%
|
62.4%
|
62.5%
|
61.8%
|
||||||||||||
|
Acquisition cost ratio (8)
|
29.9%
|
32.5%
|
34.3%
|
31.2%
|
||||||||||||
|
General and administrative expense ratio (9)
|
3.5%
|
0.6%
|
-
|
3.3%
|
||||||||||||
|
Combined ratio (10)
|
94.7%
|
95.5%
|
96.8%
|
96.3%
|
||||||||||||
(7) Calculated by dividing net losses and loss expenses by net earned premium and other insurance revenue.
(8) Calculated by dividing commission and other acquisition expenses by net earned premium and other insurance revenue.
(9) Calculated by dividing general and administrative expenses by net earned premium and other insurance revenue.
(10) Calculated by adding together net loss and loss expense ratio, acquisition cost ratio and general and administrative expense ratio.
Maiden Holdings, Ltd.
Supplemental Financial Data - Segment Information
(in thousands (000's))
(Unaudited)
|
For the Six Months Ended June 30, 2011
|
Diversified Reinsurance
|
AmTrust Quota Share Reinsurance
|
ACAC Quota Share
|
Total
|
||||||||||||
|
Net premiums written
|
$
|
416,838
|
$
|
343,163
|
$
|
126,465
|
$
|
886,466
|
||||||||
|
Net premiums earned
|
344,522
|
250,773
|
119,023
|
714,318
|
||||||||||||
|
Other insurance revenue
|
6,834
|
-
|
-
|
6,834
|
||||||||||||
|
Net losses and loss expenses
|
(226,732)
|
(168,279)
|
(76,770)
|
(471,781)
|
||||||||||||
|
Commissions and other acquisition costs
|
(99,677)
|
(75,353)
|
(37,866)
|
(212,896)
|
||||||||||||
|
General and administrative expenses
|
(16,337)
|
(1,264)
|
(1,015)
|
(18,616)
|
||||||||||||
|
Underwriting income
|
$
|
8,610
|
$
|
5,877
|
$
|
3,372
|
$
|
17,859
|
||||||||
|
Reconciliation to net loss before income taxes
|
||||||||||||||||
|
Net investment income and realized and unrealized investment gains (losses)
|
39,597
|
|||||||||||||||
|
Amortization of intangible assets
|
(2,517)
|
|||||||||||||||
|
Foreign exchange gains
|
2,001
|
|||||||||||||||
|
Interest and amortization expense
|
(18,410)
|
|||||||||||||||
|
Accelerated amortization of junior subordinated debt discount and issuance cost
|
(20,313)
|
|||||||||||||||
|
Junior subordinated debt redemption expense
|
(15,050)
|
|||||||||||||||
|
Other general and administrative expenses
|
(6,516)
|
|||||||||||||||
|
|
||||||||||||||||
|
Net loss before income taxes
|
$
|
(3,349)
|
||||||||||||||
|
Net loss and loss expense ratio (7)
|
64.5%
|
67.1%
|
64.5%
|
65.4%
|
||||||||||||
|
Acquisition cost ratio (8)
|
28.4%
|
30.0%
|
31.8%
|
29.5%
|
||||||||||||
|
General and administrative expense ratio (9)
|
4.6%
|
0.6%
|
0.9%
|
3.5%
|
||||||||||||
|
Combined ratio (10)
|
97.5%
|
97.7%
|
97.2%
|
98.4%
|
||||||||||||
|
For the Six Months Ended June 30, 2010
|
Diversified Reinsurance
|
AmTrust Quota Share Reinsurance
|
ACAC Quota Share
|
Total
|
||||||||||||
|
Net premiums written
|
$
|
304,623
|
$
|
230,679
|
$
|
89,039
|
$
|
624,341
|
||||||||
|
Net premiums earned
|
312,959
|
212,323
|
22,431
|
547,713
|
||||||||||||
|
Net losses and loss expenses
|
(198,635)
|
(132,985)
|
(14,019)
|
(345,639)
|
||||||||||||
|
Commissions and other acquisition costs
|
(88,900)
|
(69,238)
|
(7,705)
|
(165,843)
|
||||||||||||
|
General and administrative expenses
|
(11,598)
|
(1,072)
|
-
|
(12,670)
|
||||||||||||
|
Underwriting income
|
$
|
13,826
|
$
|
9,028
|
$
|
707
|
$
|
23,561
|
||||||||
|
Reconciliation to net income before income taxes
|
||||||||||||||||
|
Net investment income and realized investment gains (losses)
|
37,303
|
|||||||||||||||
|
Amortization of intangible assets
|
(2,904)
|
|||||||||||||||
|
Foreign exchange losses
|
(1,567)
|
|||||||||||||||
|
Interest and amortization expense
|
(18,231)
|
|||||||||||||||
|
Other general and administrative expenses
|
(5,366)
|
|||||||||||||||
|
|
||||||||||||||||
|
Net income before income taxes
|
$
|
32,796
|
||||||||||||||
|
Net loss and loss expense ratio (7)
|
63.5%
|
62.6%
|
62.5%
|
63.1%
|
||||||||||||
|
Acquisition cost ratio (8)
|
28.4%
|
32.6%
|
34.3%
|
30.3%
|
||||||||||||
|
General and administrative expense ratio (9)
|
3.7%
|
0.5%
|
-
|
3.3%
|
||||||||||||
|
Combined ratio (10)
|
95.6%
|
95.7%
|
96.8%
|
96.7%
|
||||||||||||
(7) Calculated by dividing net losses and loss expenses by net earned premium and other insurance revenue.
(8) Calculated by dividing commission and other acquisition expenses by net earned premium and other insurance revenue.
(9) Calculated by dividing general and administrative expenses by net earned premium and other insurance revenue.
(10) Calculated by adding together net loss and loss expense ratio, acquisition cost ratio and general and administrative expense ratio.
July 27, 2011
Maiden Holdings, Ltd. Announces 14% Increase in Quarterly Dividend
HAMILTON, Bermuda, July 27, 2011 (GLOBE NEWSWIRE) -- Maiden Holdings, Ltd. (Nasdaq: MHLD) today announced that its Board of Directors approved a quarterly cash dividend of $0.08 per share of common stock, a 14% increase from its prior quarterly dividend. The dividend will be payable on October 17, 2011 to shareholders of record as of October 3, 2011.
About Maiden Holdings, Ltd.
Maiden Holdings, Ltd. is a Bermuda-based holding company formed in 2007. Through our operating subsidiaries which are each A- rated (excellent) by A.M. Best, we are focused on providing non-catastrophic, customized reinsurance products and services, to small and mid-size insurance companies in the United States and Europe. As of June 30, 2011, the Company had $3.3 billion in assets and shareholders' equity of $759.3 million. MHLD-G
The Maiden Holdings, Ltd. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=5006
|
CONTACT:
|
Maiden Holdings, Ltd.
|
John Marshaleck
441.298.4902
irelations@maiden.bm