Endurance Specialty Holdings Ltd. (ticker: ENH, exchange: New York Stock Exchange (.N))
News Release -
4-Nov-2003
Endurance Specialty Holdings Reports Third Quarter 2003 Results; Net Income Increases 96% to $56.5 Million HAMILTON, Bermuda--(BUSINESS WIRE)--Nov. 4, 2003--First table,
Consolidated Balance Sheets, should read:
Additional paid-in capital 1,188,793 1,009,415
sted
Additional paid-in capital 1,183,793 1,009,415
The corrected release reads:
ENDURANCE SPECIALTY HOLDINGS REPORTS THIRD QUARTER 2003 RESULTS;
NET INCOME INCREASES 96% TO $56.5 MILLION
Endurance Specialty Holdings Ltd. (NYSE:ENH), today reported third
quarter 2003 net income of $56.5 million or $0.83 per diluted share
versus net income of $28.9 million or $0.48 per diluted share in the
third quarter of 2002. In the third quarter of 2003, operating income,
which excludes after-tax realized investment gains and losses and
foreign exchange gains, was $55.2 million or $0.81 per diluted share,
112% higher than for the third quarter of 2002. For the nine months
ended September 30, 2003, net income was $174.5 million or $2.68 per
diluted share. Operating income for the nine months ended September
30, 2003 was $161.4 million or $2.48 per diluted share, up 175% from
the same period of 2002.
Annualized operating return on average equity during the third
quarter of 2003 was 14.2% and annualized operating return on average
equity for the nine months ended 2003 was 15.5%.
Kenneth J. LeStrange, Chairman and Chief Executive Officer,
commented, "Endurance continues to produce outstanding results for our
shareholders in 2003. Despite seasonal catastrophe losses, every
segment of our business performed well. As a result, during the first
nine months of our second year of operation, we have exceeded our
annualized return on average equity objective of 14-15%."
"Our broad based strategy continues to show success. During the
third quarter, growth from our U.S. operations and casualty lines
accelerated, allowing us to benefit from the operating platform which
we have assembled. Our acquisition of the Hart Re portfolio continues
to perform very well, generating a $17 million underwriting profit in
the quarter."
Gross premiums written were $325.1 million for the quarter ended
September 30, 2003, an increase of 42% from the $228.3 million in
gross premiums written for the third quarter of 2002. For the nine
months ended September 30, 2003, Endurance had gross premiums written
and acquired of $1.3 billion. Earned premiums in the quarter were
$335.8 million, an increase of 201% from the third quarter of 2002.
The combined ratio was 88.5% in the third quarter of 2003 compared
to 88.4% in the third quarter of 2002. The loss ratio was 59.2% in the
quarter compared to 62.1% in the third quarter of 2002, reflecting
lower relative levels of catastrophe losses. During the third quarter
the company incurred moderate losses from Hurricanes' Fabian and
Isabel as well as the loss of the Telstar Galaxy IV satellite, which
adversely affected our aerospace business. These three losses totaled
$17 million in the quarter.
The acquisition expense ratio increased from 16.6% in the third
quarter of 2002 to 20.7% in the third quarter of 2003 as a result of
an increase in the portion of the Company's business underwritten as
reinsurance. The general and administrative expense ratio decreased to
8.6% in the third quarter of 2003, reflecting a significant increase
in premiums earned from business written in prior periods.
At September 30, 2003, the Company's GAAP shareholder's equity was
$1.6 billion or $23.19 per diluted share. Total assets were $3.4
billion and cash and invested assets were $2.5 billion, up over $1.3
billion since the Company's formation in December 2001. The Company
made a scheduled $38.4 million principal repayment on its outstanding
three year term loan, leaving $103 million in debt outstanding at the
end of September. Endurance utilized operating cash flow to make the
principal repayment.
Net operating cash flow was $287 million in the third quarter of
2003 and $674 million for the nine months ended September 30, 2003,
reflecting the continued strong cash flows.
Endurance will host a conference call on Wednesday, November 5,
2003 at 8:30 AM Eastern to discuss its financial results. A live
broadcast of the conference call will be available at the investor
relations section of Endurance's website, http://www.endurance.bm. The
conference call can also be accessed via telephone by dialing
800-289-0730 (toll-free) or 913-981-5509 (international). A telephone
replay of the conference call will be available through November 19,
2003 by dialing 888-203-1112 (toll-free) or 719-457-0820
(international) and entering the pass code: 211051. Please refer to
our website under Investors.
A copy of the Company's financial supplement for the third quarter
of 2003 may be obtained on the Company's website at
http://www.endurance.bm or by contacting the Company directly.
About Endurance Specialty Holdings
Endurance Specialty Holdings Ltd. is a global provider of property
and casualty insurance and reinsurance. Through its operating
subsidiaries, Endurance currently writes property per risk treaty
reinsurance, property catastrophe reinsurance, casualty treaty
reinsurance, property individual risks, casualty individual risks, and
other specialty lines. Endurance's operating subsidiaries have been
assigned a group rating of A (Excellent) from A.M. Best and A- from
Standard & Poor's. Endurance's headquarters are located at Wellesley
House, 90 Pitts Bay Road, Pembroke HM 08, Bermuda and its mailing
address is Endurance Group, Suite No. 784, No. 48 Par-la-Ville Road,
Hamilton HM 11, Bermuda. For more information about Endurance, please
visit http://www.endurance.bm/.
Safe Harbor for Forward-Looking Statements
Some of the statements in this press release may include
forward-looking statements which reflect our current views with
respect to future events and financial performance. Such statements
may include forward-looking statements both with respect to us in
general and the insurance and reinsurance sectors specifically, both
as to underwriting and investment matters. Statements which include
the words "expect," "intend," "plan," "believe," "project,"
"anticipate," "seek," "will," and similar statements of a future or
forward-looking nature identify forward-looking statements in this
press release for purposes of the U.S. federal securities laws or
otherwise. We intend these forward-looking statements to be covered by
the safe harbor provisions for forward-looking statements in the
Private Securities Litigation Reform Act of 1995.
All forward-looking statements address matters that involve risks
and uncertainties. Accordingly, there are or may be important factors
that could cause actual results to differ from those indicated in the
forward-looking statements. These factors include, but are not limited
to, competition, possible terrorism or the outbreak of war, the
frequency or severity of unpredictable catastrophic events, changes in
demand for insurance or reinsurance, rating agency actions,
uncertainties in our reserving process, a change in our tax status,
acceptance of our products, the availability of reinsurance or
retrocessional coverage, retention of key personnel, political
conditions, changes in accounting policies, changes in general
economic conditions and other factors described in our Final
Prospectus (File No. 333-102026) filed with the U.S. Securities and
Exchange Commission on February 28, 2003 in connection with our
initial public offering.
Forward-looking statements speak only as of the date on which they
are made, and we undertake no obligation publicly to update or revise
any forward-looking statement, whether as a result of new information,
future developments or otherwise.
ENDURANCE SPECIALTY HOLDINGS LTD.
CONSOLIDATED BALANCE SHEETS
(in thousands of United States dollars, except per share amounts)
September December
30, 31,
2003 2002
----------- -----------
Assets (Unaudited)
Cash and cash equivalents $169,685 $256,840
Fixed maturity investments available for sale,
at fair value 2,306,164 1,406,409
Premiums receivable, net 603,634 264,355
Deferred acquisition costs 200,792 81,676
Prepaid reinsurance premiums 2,137 7,501
Accrued investment income 22,004 11,209
Intangible assets 33,334 14,344
Other assets 25,398 12,260
----------- -----------
Total Assets $3,363,148 $2,054,594
=========== ===========
Liabilities
Reserve for losses and loss expenses $673,850 $200,840
Reserve for unearned premiums 917,797 403,305
Reinsurance balances payable 24,447 16,443
Bank debt 103,029 192,000
Net payable for investments purchased 50,253 6,470
Other liabilities 29,126 18,036
----------- -----------
Total Liabilities 1,798,502 837,094
----------- -----------
Shareholders' Equity
Common shares
Ordinary - 62,973,185 issued and outstanding
(2002 - 54,061,185) 62,973 54,061
Class A - 938,815 issued and outstanding (2002
- 938,815) 939 939
Additional paid-in capital 1,188,793 1,009,415
Accumulated other comprehensive income 47,892 50,707
Retained earnings 264,049 102,378
----------- -----------
Total shareholders' equity 1,564,646 1,217,500
----------- -----------
Total liabilities and shareholders' equity $3,363,148 $2,054,594
=========== ===========
Book Value per Common Share
Dilutive common shares outstanding 67,459 56,017
Diluted book value per common share $23.19 $21.73
=========== ===========
ENDURANCE SPECIALTY HOLDINGS LTD.
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
(in thousands of United States dollars, except per share amounts)
Quarter Ended Nine Months Ended
------------------- ---------------------
September September September September
30, 30, 30, 30,
2003 2002 2003 2002
--------- --------- ----------- ---------
Revenues
Gross premiums written and
acquired $325,070 $228,285 $1,339,841 $623,472
========= ========= =========== =========
Net premiums written and
acquired $324,405 $216,819 $1,336,808 $590,513
Change in unearned premiums 11,425 (105,299) (518,859) (386,231)
--------- --------- ----------- ---------
Net premiums earned 335,830 111,520 817,949 204,282
Net investment income 18,736 13,488 49,758 29,355
Net foreign exchange gains
(losses) 2,123 (11) 6,717 1,107
Net realized gains (losses)
on sales of investments (932) 2,796 6,985 3,688
--------- --------- ----------- ---------
Total revenues 355,757 127,793 881,409 238,432
--------- --------- ----------- ---------
Expenses
Losses and loss expenses 198,665 69,282 468,341 115,146
Acquisition expenses 69,382 18,527 161,423 33,304
General and administrative
expenses 28,905 10,774 71,448 26,195
Amortization of intangibles 944 325 2,294 325
Interest expense 1,013 30 3,393 30
--------- --------- ----------- ---------
Total expenses 298,909 98,938 706,899 175,000
--------- --------- ----------- ---------
Income before income taxes 56,848 28,855 174,510 63,432
Income tax benefit (expense) (305) 56 25 56
--------- --------- ----------- ---------
Net income $56,543 $28,911 $174,535 $63,488
========= ========= =========== =========
Per share data
Weighted average number of
common and common
equivalent shares
outstanding:
Basic 64,414 59,837 62,557 59,945
Diluted 67,795 60,155 65,166 59,945
Basic earnings per share $0.88 $0.48 $2.79 $1.06
========= ========= =========== =========
Diluted earnings per
share $0.83 $0.48 $2.68 $1.06
========= ========= =========== =========
ENDURANCE SPECIALTY HOLDINGS LTD.
CONSOLIDATED FINANCIAL RATIOS
Quarter Ended Nine Months Ended
------------------- -------------------
September September September September
30, 30, 30, 30,
2003 2002 2003 2002
--------- --------- --------- ---------
GAAP Ratios
Losses and loss expenses ratio 59.2% 62.1% 57.3% 56.4%
Acquisition expense ratio 20.7% 16.6% 19.7% 16.3%
General and administrative
expense ratio 8.6% 9.7% 8.7% 12.8%
--------- --------- --------- ---------
Combined ratio 88.5% 88.4% 85.7% 85.5%
========= ========= ========= =========
CONTACT: Endurance Specialty Holdings Ltd.
Investor Relations:
Bryan Melgar, 441-278-0491
bmelgar@endurance.bm
or
Corporate Communications:
Marianne Navickas, 441-278-0420
mnavickas@endurance.bm
SOURCE: Endurance Specialty Holdings Ltd.
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Endurance Specialty Holdings Ltd.
