EX-99.1 2 w06852exv99w1.htm PRESS RELEASE DATED MARCH 14, 2005 exv99w1
 

Exhibit 99.1

     
(ANNUITY LIFE RE LOGO)   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 FOURTH QUARTER 2004 EARNINGS REPORT

Hamilton, Bermuda, March 14, 2005 6:00 p.m. EST – Annuity and Life Re (Holdings), Ltd. (ANNRF.OB) today reported financial results for the three months and year ended December 31, 2004. The Company reported a net loss of $(59,634,766) or $(2.30) per fully diluted share for the three months ended December 31, 2004, as compared to a net loss of $(7,177,423) or $(0.28) per fully diluted share for the three months ended December 31, 2003. The Company reported a net loss of $(68,326,455) or $(2.64) per fully diluted share for the year ended December 31, 2004, as compared to a net loss of $(132,155,584) or $(5.11) per fully diluted share for the year ended December 31, 2003. The fourth quarter 2004 loss included a $60,627,007 charge related to the termination of the Company’s annuity reinsurance agreement with Transamerica and the related novation of its two largest life reinsurance agreements to Transamerica.

Net realized investment losses for the three months ended December 31, 2004 were $(16,636), as compared with net realized investment losses of $(101,432) for the three months ended December 31, 2003. Net realized investment gains for the year ended December 31, 2004 were $439,536, as compared with net realized investment gains of $6,406,587 for the year ended December 31, 2003.

Gross unrealized gains on the Company’s investments were $1,266,517 as of December 31, 2004, as compared to gross unrealized gains of $2,218,246 at December 31, 2003. The Company’s investment portfolio currently maintains an average credit quality of AA. Cash used by operations for the year ended December 31, 2004 was $57,925,171 as compared to cash used by operations of $112,176,985 for the year ended December 31, 2003. The cash used by operations in the year ended December 31, 2004 includes payments made in connection with the settlement of the Met Life recapture, payments made to Transamerica under the annuity reinsurance agreement and payments related to the recapture of the Company’s GMDB/GMIB reinsurance agreement with CIGNA.

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

“We are very pleased that the Company and Transamerica were able to work together in a mutually beneficial way to terminate the annuity reinsurance agreement between the companies. The agreement had been a long standing source of losses for us. The termination of this agreement marks the resolution of a significant contingency that has impeded our ability to pursue strategic alternatives. We do, however, remain in discussions with Transamerica regarding its claim that we owe them an additional $2.0 million

 

 

related to one of the life reinsurance agreements that was novated to Transamerica as of December 31, 2004.”

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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.

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 pursue strategic alternatives on favorable terms; the loss of a key executive; 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; 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_2005.html. Certain financial information that has been made available to financial analysts is available in the “Financial Reports” section of the Company’s website at www.alre.bm/reports.html.

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ANNUITY AND LIFE RE (HOLDINGS), LTD.
CONSOLIDATED BALANCE SHEETS
(Unaudited and in U.S. dollars)

                 
    December 31, 2004     December 31, 2003  
Assets
                
 
                
Cash and cash equivalents
   $ 56,394,484     $ 80,068,310  
Fixed income investments at fair value (amortized cost of $80,767,893 and $115,594,199 at December 31, 2004 and December 31, 2003)
     82,034,410       117,812,445  
Funds withheld at interest
     56,415,386       667,824,819  
Accrued investment income
     1,155,762       1,491,170  
Receivable for reinsurance ceded
     82,433,270       88,480,172  
Other reinsurance receivables
     4,306,931       4,580,745  
Deferred policy acquisition costs
     6,084,488       68,942,628  
Other assets
     580,625       682,050  
 
            
Total Assets
   $ 289,405,356     $ 1,029,882,339  
 
            
 
                
Liabilities
                
 
                
Reserves for future policy benefits
   $ 109,860,843     $ 161,105,541  
Interest sensitive contracts liability
     57,754,009       670,717,546  
Other reinsurance liabilities
     49,186,297       55,826,940  
Accounts payable and accrued expenses
     6,186,995       7,059,733  
 
            
Total Liabilities
     222,988,144       894,709,760  
 
            
 
                
Stockholders’ Equity
                
 
                
Preferred shares (par value $1.00; 50,000,000 shares authorized; no shares outstanding)
     —       —  
Common shares (par value $1.00; 100,000,000 shares authorized; 26,338,528 and 26,454,195 shares outstanding at December 31, 2004 and December 31, 2003)
     26,338,528       26,454,195  
Additional paid-in capital
     333,810,766       334,418,029  
Stock warrants
     1,350,000       1,250,000  
Unamortized stock-based compensation
     (490,415 )     (1,509,022 )
Accumulated other comprehensive income
     1,016,260       1,840,849  
Accumulated deficit
     (295,607,927 )     (227,281,472 )
 
            
Total Stockholders’ Equity
     66,417,212       135,172,579  
 
            
Total Liabilities and Stockholders’ Equity
   $ 289,405,356     $ 1,029,882,339  
 
            

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ANNUITY AND LIFE RE (HOLDINGS), LTD.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited and in U.S. dollars)

                                 
    For the Three Months Ended December 31,     For the Year Ended December 31,  
    2004     2003     2004     2003  
Revenues
                                
 
                                
Net premiums
   $ 13,731,847     $ 18,385,942     $ 48,297,706     $ 166,972,840  
Investment income, net of related expenses
     3,822,551       (1,101,429 )     21,697,563       29,042,223  
Net realized investment (losses) gains
     (16,636 )     (101,432 )     439,536       6,406,587  
Net change in fair value of embedded derivatives
     488,957       1,846,939       2,181,070       16,692,688  
Surrender fees and other revenues
     865,786       1,235,993       4,475,691       7,297,015  
 
                        
 
                                
Total Revenues
     18,892,505       20,266,013     $ 77,091,566       226,411,353  
 
                        
 
                                
Benefits and Expenses
                                
 
                                
Claims and policy benefits
     (10,581,972 )     19,413,255       14,101,129       198,002,905  
Interest credited to interest sensitive products
     (5,466,086 )     (2,750,729 )     5,399,460       13,980,723  
Policy acquisition costs and other insurance expenses
     92,393,679       8,620,567       110,922,948       128,549,288  
Operating expenses
     2,181,650       2,160,343       14,628,524       18,034,021  
 
                        
 
                                
Total Benefits and Expenses
     78,527,271       27,443,436     $ 145,052,061       358,566,937  
 
                        
 
                                
Loss before cumulative effect of a change in accounting
   $ (59,634,766 )   $ (7,177,423 )   $ (67,960,495 )     (132,155,584 )
 
                                
Cumulative effect of a change in accounting principle
     —       —       (365,960 )     —  
 
                        
 
                                
Net Loss
   $ (59,634,766 )   $ (7,177,423 )   $ (68,326,455 )   $ (132,155,584 )
 
                        
 
                                
Loss per common share before cumulative effect of a change in accounting principle
                                
 
                                
Basic
   $ (2.30 )   $ (0.28 )   $ (2.63 )   $ (5.11 )
 
                                
Diluted
   $ (2.30 )   $ (0.28 )   $ (2.63 )   $ (5.11 )
 
                                
Cumulative effect of a change in accounting principle per common share
                                
 
                                
Basic
   $ —     $ —     $ (0.01 )   $ —  
 
                                
Diluted
   $ —     $ —     $ (0.01 )   $ —  
 
                                
Net loss per common share
                                
 
                                
Basic
   $ (2.30 )   $ (0.28 )   $ (2.64 )   $ (5.11 )
 
                                
Diluted
   $ (2.30 )   $ (0.28 )   $ (2.64 )   $ (5.11 )

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ANNUITY AND LIFE RE (HOLDINGS), LTD.
CONSOLIDATED STATEMENTS OF SEGMENT (LOSS) INCOME
(Unaudited and in U.S. dollars)

                                 
    Life     Annuity              
Three Months Ended December 31, 2004   Reinsurance     Reinsurance     Corporate     Consolidated  
Revenues
   $ 14,402,116     $ 3,898,277     $ 592,112     $ 18,892,505  
Benefits and Expenses
     18,032,616       58,921,790       1,572,865       78,527,271  
 
                        
 
                                
Segment Loss
   $ (3,630,500 )   $ (55,023,513 )   $ (980,753 )   $ (59,634,766 )
 
                        
 
                                
Total Assets
   $ 163,747,140     $ 59,554,009     $ 66,104,207     $ 289,405,356  
 
                        
 
                                
Fully Diluted Earnings per Share
   $ (0.14 )   $ (2.12 )   $ (0.04 )   $ (2.30 )
 
                        
 
                                
Three Months Ended December 31, 2003
                                
                                 
 
                                
Revenues
   $ 18,642,054     $ 1,145,289     $ 478,670     $ 20,266,013  
Benefits and Expenses
     25,172,601       1,140,293       1,130,542       27,443,436  
 
                        
 
                                
Segment (Loss) Income
   $ (6,530,547 )   $ 4,996     $ (651,872 )   $ (7,177,423 )
 
                        
 
                                
Total Assets
   $ 250,732,481     $ 695,317,546     $ 83,832,312     $ 1,029,882,339  
 
                        
 
                                
Fully Diluted Earnings per Share
   $ (0.25 )   $ 0.00     $ (0.03 )   $ (0.28 )
 
                        
 
                                
Year Ended December 31, 2004
                                
                                 
 
                                
Revenues
   $ 50,153,025     $ 23,847,196     $ 3,091,345     $ 77,091,566  
Benefits and Expenses
     50,271,120       83,505,926       11,275,015       145,052,061  
 
                        
 
                                
Segment Loss before cumulative effect of a change in accounting principle
   $ (118,095 )   $ (59,658,730 )   $ (8,183,670 )   $ (67,960,495 )
Cumulative effect of a change in accounting principle
     —       (365,960 )     —       (365,960 )
 
                        
Segment Loss
   $ (118,095 )   $ (60,024,690 )   $ (8,183,670 )   $ (68,326,455 )
 
                        
 
                                
Total Assets
   $ 163,747,140     $ 59,554,009     $ 66,104,207     $ 289,405,356  
 
                        
 
                                
Fully Diluted Earnings per Share
   $ (0.00 )   $ (2.32 )   $ (0.32 )   $ (2.64 )
 
                        
 
                                
Book Value per share
                           $ 2.52  
 
                              
 
                                
 
                                
Year Ended December 31, 2003
                                
                                 
 
                                
Revenues
   $ 166,333,033     $ 52,122,419     $ 7,955,901     $ 226,411,353  
Benefits and Expenses
     256,769,309       96,493,357       5,304,271       358,566,937  
 
                        
 
                                
Segment (Loss) Income
   $ (90,436,276 )   $ (44,370,938 )   $ 2,651,630     $ (132,155,584 )
 
                        
 
                                
Total Assets
   $ 250,732,481     $ 695,317,546     $ 83,832,312     $ 1,029,882,339  
 
                        
 
                                
Fully Diluted Earnings per Share
   $ (3.49 )   $ (1.72 )   $ 0.10     $ (5.11 )
 
                        
 
                                
Book Value per share
                           $ 5.11  
 
                              

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