8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 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): August 5, 2004

ANNUITY AND LIFE RE (HOLDINGS), LTD.

(Exact Name of Registrant as Specified in Charter)

Bermuda	1-16561	66-0619270
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

Cumberland House, 1 Victoria Street, Hamilton, Bermuda	HM 11
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s telephone number, including area code: (441) 296-7667

N/A
(Former Name or Former Address, if Changed Since Last Report)

TABLE OF CONTENTS

	Item 12. Results of Operations and Financial Condition.
SIGNATURE
EXHIBIT INDEX
PRESS RELEASE DATED AUGUST 5, 2004
UNAUDITED SUPPLEMENTAL FINANCIAL INFORMATION

Item 12. Results of Operations and Financial Condition.

     The following information, furnished under “Item 12. Results of Operations and Financial Condition,” shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such a filing.

     On August 5, 2004, Annuity and Life Re (Holdings), Ltd. (the “Company”) issued a press release, which is attached hereto as Exhibit 99.1 and incorporated herein by reference. The press release disclosed the Company’s financial results for the three month period ended June 30, 2004. Also on August 5, 2004, the Company posted on its website unaudited supplemental financial information, which is attached hereto as Exhibit 99.2 and incorporated herein by reference.

SIGNATURE

     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.

	ANNUITY AND LIFE RE (HOLDINGS), LTD.
Date: August 5, 2004	By:	/s/ John W. Lockwood
		John W. Lockwood
		Chief Financial Officer

EXHIBIT INDEX

99.1	Press Release dated August 5, 2004
99.2	Unaudited Supplemental Financial Information

EX-99.1

Cumberland House
1 Victoria Street
Hamilton HM 11
P.O. Box HM 98
Hamilton HM AX
Bermuda
(441) 296-7667
fax (441) 296-7665

FOR IMMEDIATE RELEASE

CONTACT:  John Lockwood
Annuity & Life Re (Holdings), Ltd.
441-296-7667

ANNUITY & LIFE RE JUNE 30, 2004 EARNINGS REPORT

Hamilton, Bermuda, August 5, 2004, 6:00 p.m. ET – Annuity and Life Re (Holdings), Ltd. (OTC Pink Sheets: ANNRF) today reported financial results for the three month period ended June 30, 2004. The Company reported a net loss of $(6,430,378) or $(0.25) per fully diluted share for the three month period ended June 30, 2004, as compared to a net loss of $(68,716,440) or $(2.66) per fully diluted share for the three month period ended June 30, 2003. The second quarter 2004 loss includes a $5 million charge for the expected cost of settling the purported shareholder class action lawsuit against the Company and certain of its present and former officers and directors, as well as a net loss of $1.8 million on the Company’s annuity reinsurance agreement with Transamerica. The net loss on the Transamerica contract is primarily the result of minimum interest guarantee payments of $3.6 million, amortization of deferred acquisition costs of $2.8 million and reduced investment income from the contract, partially offset by a contingency reserve release of $5.0 million as a result of the recently announced settlement of the Company’s dispute with Transamerica.

Net realized investment losses for the three month period ended June 30, 2004 were $(137,885), as compared with net realized investment gains of $4,896,176 for the three month period ended June 30, 2003.

Unrealized losses on the Company’s investments were $(768,803) as of June 30, 2004, as compared to gains of $1,840,849 at December 31, 2003. The Company’s investment portfolio currently maintains an average credit quality of AA. Cash used by operations for the six months ended June 30, 2004 was $28,918,798, as compared to cash used by operations of $86,149,537 for the six month period ended June 30, 2003. The cash used by operations in the six months ended June 30, 2004 includes payments made in connection with the settlement of the Met Life recapture and payments made to Transamerica under an annuity reinsurance agreement.

Book value per share at June 30, 2004 was $4.81, as compared to $5.11 at December 31, 2003. The Company adopted SOP 03-1 effective as of January 1, 2004, which required it to increase its liabilities by approximately $36.6 million and its deferred acquisition costs by approximately $36.2 million. As a result, the Company’s tangible book value, which is GAAP book value less deferred acquisition costs, declined from $2.50 per share at December 31, 2003 to $1.12 as of January 1, 2004. Tangible book value per share then decreased to $1.07 at June 30, 2004.

Jay Burke, the Company’s Chief Executive Officer, commented:

“While we reported a loss for the quarter, it was primarily driven by the tentative settlement of the purported shareholder class action lawsuit.

We also had a loss from the Transamerica contract. This loss was the result of poor performance of the underlying assets, which are managed by AMERUS Capital Management, and would have been substantially larger had we not been able to release the $5.0 million of contingency reserves.

As we previously announced we have been delisted from the New York Stock Exchange. We are currently trading in the pink sheets and are attempting to move to the OTC – Bulletin Board. We plan to seek a listing on the NASDAQ – Small Cap Market.”

Annuity and Life Re (Holdings), Ltd. provides annuity and life reinsurance to insurers through its wholly owned subsidiaries, Annuity and Life Reassurance, Ltd. and Annuity and Life Reassurance America, Inc.

Conference Call Information

August 6, 2004 9:00 a.m. Eastern Time
719-457-2661 or 800-946-0785, Code # 310728

The call will be available for replay for seven days following the conference call. The replay numbers are: 719-457-0820 or 888-203-1112, Code # 310728

The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements made by the Company or on its behalf. All statements which address operating performance, events, or developments that the Company expects or anticipates may occur in the future are forward-looking statements. These statements are made on the basis of management’s views and assumptions; as a result, there can be no assurance that management’s expectations will necessarily come to pass. The Company cautions that actual results could differ materially from those expressed or implied in forward-looking statements. Important factors that could materially and adversely affect the Company’s operations and financial condition and/or cause the Company’s actual results of operations or financial condition to differ from those expressed or implied in the Company’s forward-looking statements include, but are not necessarily limited to, the Company’s ability to meet the obligations associated with the Company’s current business and to fund the Company’s continuing operations; the Company’s ability to reduce or otherwise satisfy the Company’s collateral obligations; the outcome of pending legal proceedings involving the Company; the Company’s ability to obtain adequate financial ratings; the ability of the Company’s cedents to manage successfully assets they hold on the Company’s behalf; the Company’s success in managing its investments; the Company’s ability to list its common shares on a national exchange or automated quotation system; changes in mortality, morbidity and claims experience; the Company’s ability to make accurate estimates and assumptions regarding future mortality, persistency, lapses, expenses and investment performance based upon historical results and information provided to it by its cedents; the Company’s ability to underwrite business; unanticipated withdrawal or surrender activity; changes in market conditions, including changes in interest rate levels; the competitive environment; the impact of recent and possible future terrorist attacks and the U.S. government’s response thereto; the Company’s ability to attract and retain clients; the loss of a key executive; regulatory changes (such as changes in U.S. tax law and insurance regulation that directly affect the competitive environment for the Company’s products); and a prolonged economic downturn. Investors are also directed to consider the risks and uncertainties discussed in documents the Company has filed with the Securities and Exchange Commission, and in particular, the Company’s Annual Report on Form 10-K for the year ended December 31, 2003, as amended. The Company does not undertake to update any forward-looking statement that may be made from time to time by or on the Company’s behalf.

This press release and the attached financial statements are available in the “Press Releases” section of the Company’s website at www.alre.bm/releases_2004.html. Certain financial information that has been made available to financial analysts, and which may be discussed on the conference call, is available in the “Financial Reports” section of the Company’s website at www.alre.bm/reports.html.

-2-

EX-99.2

Annuity & Life Re (Holdings), Ltd.
Quarterly Statement of Net Income and Other Financial Data

	6/30/2004			3/31/2004			12/31/2003			9/30/2003			6/30/2003			3/31/2003
Revenues
Net Premiums	$	10,348,881		$	14,310,641		$	18,385,942		$	28,657,263		$	58,563,721		$	61,365,914
Investment Income		3,844,066			9,250,735			(1,101,429	)		16,250,225			5,734,738			8,158,689
Realized gains (losses)		(137,885	)		678,925			(101,432	)		(52,025	)		4,896,176			1,663,868
Net Change in FV of ED’s		518,786			607,388			1,846,939			2,808,427			(1,717,537	)		13,754,859
Other Revenue		1,510,568			1,074,932			1,235,993			1,667,997			3,002,778			1,390,247
Total Revenues	$	16,084,416			25,922,621			20,266,013			49,331,887			70,479,876			86,333,577
Benefits and Expenses
Claims and Benefits	$	8,769,049		$	10,244,658		$	19,413,255			19,075,004			84,425,206			75,089,440
Annuity Interest		1,822,643			3,529,250			(2,750,729	)		7,642,151			4,217,542			4,871,759
Policy Acquisition & Insurance costs		4,654,527			8,180,997			8,620,567			22,796,448			44,631,210			52,501,064
Financing Costs		—			—			—			—			—			—
Operating Expenses		7,268,575			2,767,362			2,160,343			3,605,189			5,922,358			6,346,130
Total Benefits and Expenses	$	22,514,794			24,722,267			27,443,436			53,118,792			139,196,316			138,808,393
Cumulative Effect		—			(365,960	)		—			—			—			—
Net Income (Loss)	$	(6,430,378	)	$	834,394		$	(7,177,423	)	$	(3,786,905	)	$	(68,716,440	)	$	(52,474,816	)
Adjustments to Net Income to Get to Operating Income, Excluding Transamerica
Realized Gains & Losses		(137,885	)		678,925			(101,432	)		(52,025	)		4,896,176			1,663,868
Net Change in FV of ED’s (3)		518,786			607,388			1,846,939			2,808,427			(1,717,537	)		13,754,859
Change in DAC Amort from ED’s		—			—			—			—			—			(6,953,904	)
Shareholder lawsuit settlement		(5,000,000	)		—			—			—			—			—
Transamerica		(1,779,533	)		930,342			602,126			(4,449,469	)		(102,918	)		883,041
Operating (Loss) Income, X-TA	$	(31,746	)	$	(1,382,261	)	$	(9,525,056	)	$	(2,093,838	)	$	(71,792,162	)	$	(61,822,680	)
Net Income (Loss) per Share
Basic
Shares		25,874,495			25,786,161			25,957,081			25,893,861			25,841,057			25,796,195
Earnings	$	(0.25	)	$	0.03		$	(0.28	)	$	(0.15	)	$	(2.66	)	$	(2.03	)
Diluted
Shares		25,874,495			26,126,451			25,957,081			25,893,861			26,324,716			26,325,845
Earnings	$	(0.25	)	$	0.03		$	(0.28	)	$	(0.15	)	$	(2.66	)	$	(2.03	)
Operating (Loss) Income, per fully diluted share X-TA (2)	$	(0.00	)	$	(0.05	)	$	(0.37	)	$	(0.08	)	$	(2.73	)	$	(2.35	)
Life Insurance In force
Face Amount (000’s)	$	16,446,500		$	16,695,700		$	17,510,100		$	30,488,600		$	60,397,300		$	68,989,300
Premium	$	51,200,000		$	56,000,000		$	54,580,000		$	96,281,000		$	156,300,000		$	261,541,595
Annuity Deposits (000s)	$	643,402		$	677,459		$	670,718		$	704,798		$	815,685		$	998,609
Expense Ratio as a % of Revenue, x-Change in FV of Embedded Derivatives
Current Quarter		46.70	%		10.93	%		11.73	%		7.75	%		8.20	%		8.74	%
YTD		24.55	%		10.93	%		8.60	%		8.30	%		8.47	%		8.74	%
Book Value per Share (1)	$	4.81		$	5.18		$	5.11		$	5.39		$	5.52		$	8.23

[Additional columns below]

[Continued from above table, first column(s) repeated]

	12/31/02			9/30/02			6/30/02			3/31/02			12/31/01			9/30/01			6/30/01			3/31/01
Revenues
Net Premiums	$	89,090,406		$	84,934,401		$	92,065,743		$	78,006,891		$	69,837,478		$	66,813,664		$	61,628,943		$	53,513,153
Investment Income		20,055,130			31,127,396			26,366,669			24,589,790			24,194,090			24,239,602			19,605,194			23,089,810
Realized gains (losses)		8,935,951			9,297,351			1,837,672			(321,708	)		(195,145	)		1,078,933			320,629			25,621
Net Change in FV of ED’s		(7,591,580	)		(13,277,823	)		(6,566,805	)		1,590,098			8,596,369			(5,265,396	)		1,846,981			(148,927	)
Other Revenue		2,549,743			3,549,362			6,161,207			3,896,125			5,228,601			5,512,939			4,644,690			3,133,471
Total Revenues		113,039,650			115,630,687			119,864,486			107,761,196			107,661,393			92,379,742			88,046,437			79,613,128
Benefits and Expenses
Claims and Benefits		127,768,226			91,381,831			74,443,139			58,815,606			54,325,087			74,873,807			45,201,447			41,624,668
Annuity Interest		14,154,754			18,345,349			20,948,167			17,922,346			18,768,251			14,401,290			7,797,407			8,291,470
Policy Acquisition & Insurance costs		52,177,650			17,492,342			40,571,869			15,636,118			31,359,643			43,306,421			26,889,334			25,025,150
Financing Costs		6,867,795			3,731,580			1,053,037			1,295,704			1,200,000			—			—			—
Operating Expenses		11,951,126			3,826,602			3,142,272			3,657,792			3,719,608			2,478,698			2,689,045			2,665,070
Total Benefits and Expenses		212,919,551			134,777,704			140,158,484			97,327,566			109,372,589			135,060,216			82,577,233			77,606,358
Cumulative Effect		—			—			—			—			—			—			—			(3,665,735	)
Net Income (Loss)	$	(99,879,901	)	$	(19,147,017	)	$	(20,293,998	)	$	10,433,630		$	(1,711,196	)	$	(42,680,474	)	$	5,469,204		$	(1,658,965	)
Adjustments to Net Income to Get to Operating Income, Excluding Transamerica
Realized Gains & Losses		8,935,951			9,297,351			1,837,672			(321,708	)		(195,145	)		1,078,933			320,629			25,621
Net Change in FV of ED’s (3)		(7,591,580	)		(13,277,823	)		(6,566,805	)		1,590,098			8,596,369			(5,265,396	)		1,846,981			(3,814,662	)
Change in DAC Amort from ED’s		981,124			5,790,244			903,739			598,981			(2,730,908	)		269,009			257,264			884,451
Shareholder lawsuit settlement		—			—			—			—			—			—			—			—
Transamerica		(2,799,031	)		2,000			(24,123,300	)		(2,300	)		(15,778,360	)		(22,024,398	)		(7,222,726	)		(7,020,468	)
Operating (Loss) Income, X-TA	$	(99,406,365	)	$	(20,958,789	)	$	7,654,696		$	8,568,559		$	8,396,848		$	(16,738,622	)	$	10,267,056		$	8,266,093
Net Income (Loss) per Share
Basic
Shares		25,755,411			25,733,141			25,722,016			25,705,328			25,695,578			25,683,328			25,591,746			25,501,331
Earnings	$	(3.88	)	$	(0.74	)	$	(0.79	)	$	0.41		$	(0.07	)	$	(1.66	)	$	0.21		$	(0.07	)
Diluted
Shares		26,089,620			26,100,766			26,755,190			26,968,835			27,813,418			28,534,245			28,211,313			27,960,971
Earnings	$	(3.88	)	$	(0.74	)	$	(0.79	)	$	0.39		$	(0.07	)	$	(1.66	)	$	0.19		$	(0.07	)
Operating (Loss) Income, per fully diluted share X-TA (2)	$	(3.81	)	$	(0.80	)	$	0.29		$	0.32		$	0.30		$	(0.59	)	$	0.36		$	0.30
Life Insurance In force
Face Amount (000’s)	$	117,511,100		$	150,948,700		$	137,182,089		$	129,238,000		$	117,400,000		$	104,000,000		$	91,105,000		$	83,205,000
Premium	$	261,541,595		$	325,350,000		$	333,800,000		$	310,400,000		$	240,100,000		$	227,000,000		$	203,600,000		$	184,900,000
Annuity Deposits (000s)	$	1,443,143		$	1,464,668		$	1,464,394		$	1,503,144		$	1,516,796		$	1,629,042		$	1,550,816		$	1,553,352
Expense Ratio as a % of Revenue, x-Change in FV of Embedded Derivatives
Current Quarter		9.91	%		2.97	%		2.49	%		3.45	%		3.75	%		2.54	%		3.12	%		3.34	%
YTD		4.68	%		2.94	%		2.92	%		3.45	%		3.19	%		2.97	%		3.23	%		3.34	%
Book Value per Share (1)	$	10.28		$	14.73		$	15.21		$	15.78		$	15.65		$	15.91		$	17.36		$	17.33

[Additional columns below]

[Continued from above table, first column(s) repeated]

	12/31/00			9/30/00			6/30/00			3/31/00			12/31/99			9/30/99			6/30/99			3/31/99
Revenues
Net Premiums	$	49,901,622		$	44,588,022		$	37,684,372		$	36,230,006		$	43,114,344		$	21,101,366		$	18,372,285		$	18,247,102
Investment Income		60,286,132			23,745,266			25,819,232			26,797,697			26,724,547			19,528,879			20,677,325			18,159,060
Realized gains (losses)		(1,133,867	)		(702,549	)		(2,417,880	)		(562,825	)		(597,464	)		(793,008	)		(157,755	)		263,458
Net Change in FV of ED’s
Other Revenue		1,829,461			1,689,451			1,589,357			1,807,601			1,575,505			1,250,961			149,262			239,701
Total Revenues		110,883,348			69,320,190			62,675,081			64,272,479			70,816,932			41,088,198			39,041,117			36,909,321
Benefits and Expenses
Claims and Benefits		33,913,597			36,040,180			29,898,304			32,958,111			31,447,754			17,232,038			15,507,499			15,765,869
Annuity Interest		43,692,693			5,322,440			8,063,576			8,763,595			9,724,666			4,762,521			3,948,668			3,876,829
Policy Acquisition & Insurance costs		16,286,966			14,922,217			14,919,657			12,856,683			16,751,414			9,052,163			8,991,772			7,405,339
Financing Costs		—			—			—			—			—			—			—			—
Operating Expenses		3,926,303			2,328,514			2,165,313			1,991,214			3,133,536			1,326,416			1,846,935			1,378,915
Total Benefits and Expenses		97,819,559			58,613,351			55,046,850			56,569,603			61,057,370			32,373,138			30,294,874			28,426,952
Cumulative Effect		—			—			—			—			—			—			—			—
Net Income (Loss)	$	13,063,789		$	10,706,839		$	7,628,231		$	7,702,876		$	9,759,562		$	8,715,060		$	8,746,243		$	8,482,369
Adjustments to Net Income to Get to Operating Income, Excluding Transamerica
Realized Gains & Losses		(1,133,867	)		(702,549	)		(2,417,880	)		(562,825	)		(597,464	)		(793,008	)		(157,755	)		263,458
Net Change in FV of ED’s (3)		—			—			—			—			—			—			—			—
Change in DAC Amort from ED’s		—			—			—			—			—			—			—			—
Shareholder lawsuit settlement		—			—			—			—			—			—			—			—
Transamerica		2,842,156			4,120,238			4,011,938			4,008,208			3,446,911			3,429,323			4,062,300			2,653,060
Operating (Loss) Income, X-TA	$	11,355,500		$	7,289,150		$	6,034,173		$	4,257,493		$	6,910,115		$	6,078,745		$	4,841,698		$	5,565,851
Net Income (Loss) per Share
Basic
Shares		25,499,999			25,499,999			25,499,999			25,499,999			25,499,999			25,499,999			25,499,999			25,499,999
Earnings	$	0.51		$	0.42		$	0.30		$	0.30		$	0.38		$	0.34		$	0.34		$	0.33
Diluted
Shares		27,676,641			27,419,525			27,311,063			27,443,307			27,369,033			27,218,541			27,114,771			27,181,315
Earnings	$	0.47		$	0.39		$	0.28		$	0.28		$	0.36		$	0.32		$	0.32		$	0.31
Operating (Loss) Income, per fully diluted share X-TA (2)	$	0.41		$	0.27		$	0.22		$	0.16		$	0.25		$	0.22		$	0.18		$	0.20
Life Insurance In force
Face Amount (000’s)	$	77,016,000		$	61,419,000		$	55,467,000		$	52,654,000		$	45,407,000		$	36,558,000		$	31,229,000		$	29,960,000
Premium	$	159,000,000		$	140,600,000		$	136,700,000		$	131,200,000		$	110,000,000		$	79,200,000		$	73,700,000		$	73,000,000
Annuity Deposits (000s)	$	1,595,129		$	1,480,004		$	1,569,619		$	1,651,256		$	1,603,383		$	1,625,983		$	1,607,049		$	1,510,639
Expense Ratio as a % of Revenue, x-Change in FV of Embedded Derivatives
Current Quarter		3.54	%		3.36	%		3.45	%		3.10	%		4.42	%		3.23	%		4.73	%		3.74	%
YTD		3.39	%		3.30	%		3.27	%		3.10	%		4.09	%		3.89	%		4.25	%		3.74	%
Book Value per Share (1)	$	17.13		$	16.43		$	16.02		$	15.64		$	15.37		$	15.18		$	14.95		$	14.88

[Additional columns below]

[Continued from above table, first column(s) repeated]

	12/31/98			9/30/98			6/30/98
Revenues
Net Premiums	$	17,878,140		$	10,065,750
Investment Income		14,464,369			5,366,566			4,299,615
Realized gains (losses)		1,505,617			1,018,990			148,674
Net Change in FV of ED’s
Other Revenue		311,243
Total Revenues		34,159,369			16,451,306			4,448,289
Benefits and Expenses
Claims and Benefits		14,897,615			8,399,500
Annuity Interest		1,989,000
Policy Acquisition & Insurance costs		6,341,697			200,175
Financing Costs		—			—			—
Operating Expenses		1,705,631			1,191,465			873,278
Total Benefits and Expenses		24,933,943			9,791,140			873,278
Cumulative Effect		—			—			—
Net Income (Loss)	$	9,225,426		$	6,660,166		$	3,575,011
Adjustments to Net Income to Get to Operating Income, Excluding Transamerica
Realized Gains & Losses		1,505,617			1,018,990			148,674
Net Change in FV of ED’s (3)		—			—			—
Change in DAC Amort from ED’s		—			—			—
Shareholder lawsuit settlement		—			—			—
Transamerica		2,242,565			—			—
Operating (Loss) Income, X-TA	$	5,477,244		$	5,641,176		$	3,426,337
Net Income (Loss) per Share
Basic
Shares		25,499,999			25,499,999			21,016,483
Earnings	$	0.36		$	0.26		$	0.17
Diluted
Shares		27,373,430			26,629,834			22,405,132
Earnings	$	0.34		$	0.25		$	0.16
Operating (Loss) Income, per fully diluted share X-TA (2)	$	0.20		$	0.21		$	0.15
Life Insurance In force
Face Amount (000’s)	$	22,538,000		$	15,000,000
Premium	$	54,900,000		$	40,000,000
Annuity Deposits (000s)	$	1,283,676		$	1,057,702
Expense Ratio as a % of Revenue, x-Change in FV of Embedded Derivatives
Current Quarter		4.99	%		7.24	%		19.63	%
YTD		6.85	%		9.88	%		19.63	%
Book Value per Share (1)	$	14.72		$	14.55		$	14.03

(1)	Computed as reported BV divided by outstanding shares.
(2)	Utilizes fully diluted shares even if they are anti-dilutive.
(3)	Includes cumulative effect of a change in accounting principle.