-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, TaHv6ekIy4VmW4paZxxOecJIBZOmXNDd5fuKV1XIW5RV8SvD+tgGdm5ydszmSoc0 pkEY6wXv0u21jT8+96fcsQ== 0000893220-98-001698.txt : 19981113 0000893220-98-001698.hdr.sgml : 19981113 ACCESSION NUMBER: 0000893220-98-001698 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19980930 FILED AS OF DATE: 19981112 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ANNUITY & LIFE RE HOLDINGS LTD CENTRAL INDEX KEY: 0001051628 STANDARD INDUSTRIAL CLASSIFICATION: LIFE INSURANCE [6311] IRS NUMBER: 000000000 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-23625 FILM NUMBER: 98743804 BUSINESS ADDRESS: STREET 1: VICTORIA HALL STREET 2: VICTORIA STREET, PO BOX HM 1262 CITY: HAMILTON, HM BERMUDA BUSINESS PHONE: 4412951422 MAIL ADDRESS: STREET 1: VICTORIA HALL, VICTORIA STREET STREET 2: PO BOX HM 1262, HAMILTON, HM FX CITY: BERMUDA 10-Q 1 FOR 10-Q ANNUITY AND LIFE RE (HOLDINGS), LTD. 1 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 ------------------------ FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1998 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 COMMISSION FILE NUMBER 0-23625 ANNUITY AND LIFE RE (HOLDINGS), LTD. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) BERMUDA NOT APPLICABLE (STATE OR OTHER JURISDICTION OF (IRS EMPLOYER INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
CUMBERLAND HOUSE, VICTORIA STREET, HAMILTON, BERMUDA (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) 441-296-7667 (REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ] The number of the Registrant's Common Shares (par value $1.00 per share) outstanding as of November 12, 1998 was 25,499,999. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 2 INDEX TO FORM 10-Q PART I -- FINANCIAL INFORMATION
PAGE ----- Item 1. Unaudited Consolidated Financial Statements Consolidated Balance Sheets 3 September 30, 1998 and December 31, 1997.................... Consolidated Statements of Operations 4 Three and Nine Months ended September 30, 1998.............. Consolidated Statements of Comprehensive Income 5 Three and Nine Months ended September 30, 1998.............. Consolidated Statements of Cash Flows 6 Three and Nine Months ended September 30, 1998.............. Consolidated Statements of Changes in Stockholders' Equity 7 Three and Nine Months ended September 30, 1998.............. 8-9 Notes to Unaudited Consolidated Financial Statements........ Item 2. Management's Discussion and Analysis of 10-12 Financial Condition and Results of Operations............... PART II -- OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K............................ 12 Signatures........................................................... 12 Exhibits.............................................................
2 3 ANNUITY AND LIFE RE (HOLDINGS), LTD. CONSOLIDATED BALANCE SHEETS UNAUDITED (EXPRESSED IN UNITED STATES DOLLARS)
SEPTEMBER 30, 1998 DECEMBER 31, 1997 ------------------ ----------------- ASSETS Cash and cash equivalents................................ $ 14,554,274 $250,000 Fixed maturity investments, available for sale, at fair value (amortized cost of $341,963,820 at September 30, 1998: December 31, 1997: $nil)........................ 349,496,258 -- Funds withheld at interest............................... 983,216,793 -- Accrued investment income................................ 4,781,291 -- Receivable for investments sold.......................... 1,009,112 -- Deferred policy acquisition costs........................ 127,981,918 -- Reinsurance receivables.................................. 21,422,575 -- Other assets............................................. 390,781 233,000 -------------- -------- Total Assets..................................... $1,502,853,002 $483,000 ============== ======== LIABILITIES AND STOCKHOLDERS' EQUITY Reserves for future policy benefits...................... $ 19,831,500 $ -- Interest-sensitive contracts liabilities................. 1,057,701,804 -- Other reinsurance liabilities............................ 53,496,907 -- Accounts payable and accrued expenses.................... 858,127 233,000 -------------- -------- Total Liabilities................................ $1,131,888,338 $233,000 -------------- -------- 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; 25,499,999 shares outstanding; 1997 -- 12,000)....................................... 25,499,999 12,000 Additional paid-in capital............................... 329,513,726 238,000 Notes receivable from stock sales........................ (1,367,690) -- Accumulated other comprehensive income................... 7,532,438 -- Retained earnings........................................ 9,786,191 -- -------------- -------- Total Stockholders' Equity....................... $ 370,964,664 $250,000 -------------- -------- Total Liabilities and Stockholders' Equity....... $1,502,853,002 $483,000 ============== ========
See accompanying notes to consolidated financial statements. 3 4 ANNUITY AND LIFE RE (HOLDINGS), LTD. CONSOLIDATED STATEMENTS OF OPERATIONS UNAUDITED (EXPRESSED IN UNITED STATES DOLLARS)
THREE MONTHS NINE MONTHS ENDED ENDED SEPTEMBER 30, 1998 SEPTEMBER 30, 1998 ------------------ ------------------ REVENUES Net premiums............................................. $15,027,750 $15,027,750 Investment income, net of related expenses............... 5,366,566 9,666,181 Net realized investment gains............................ 1,018,990 1,167,664 ----------- ----------- Total Revenues................................... $21,413,306 $25,861,595 ----------- ----------- BENEFITS AND EXPENSES Claims and policy benefits............................... $ 8,399,500 $ 8,399,500 Policy acquisition costs and other insurance expenses.... 5,162,175 5,162,175 Operating expenses....................................... 1,191,465 2,444,690 Organizational expenses.................................. -- 69,039 ----------- ----------- Total Benefits and Expenses........................... $14,753,140 $16,075,404 ----------- ----------- Net Income............................................ $ 6,660,166 $ 9,786,191 =========== =========== NET INCOME PER COMMON SHARE (NOTE 3): Basic.................................................... $ 0.26 $ 0.44 Diluted.................................................. $ 0.25 $ 0.42
See accompanying notes to consolidated financial statements 4 5 ANNUITY AND LIFE RE (HOLDINGS), LTD. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME UNAUDITED (EXPRESSED IN UNITED STATES DOLLARS)
THREE MONTHS NINE MONTHS ENDED ENDED SEPTEMBER 30, 1998 SEPTEMBER 30, 1998 ------------------ ------------------ Net Income for period...................................... $ 6,660,166 $ 9,786,191 Other comprehensive income; Unrealized holding gains on securities arising during period................................................... 6,620,084 7,532,438 ----------- ----------- Total Comprehensive income....................... $13,280,250 $17,318,629 =========== ===========
See accompanying notes to consolidated financial statements 5 6 ANNUITY AND LIFE RE (HOLDINGS), LTD. CONSOLIDATED STATEMENTS OF CASH FLOWS UNAUDITED (EXPRESSED IN UNITED STATES DOLLARS)
THREE MONTHS NINE MONTHS ENDED ENDED SEPTEMBER 30, 1998 SEPTEMBER 30, 1998 ------------------ ------------------ CASH FLOWS FROM OPERATING ACTIVITIES Net income................................................. $ 6,660,166 $ 9,786,191 Adjustments to reconcile net income to cash flow from operating activities: Net realized investment gains.............................. (1,018,990) (1,167,664) Changes in: Accrued investment income.................................. (143,956) (4,781,291) Reinsurance receivables.................................... (21,422,575) (21,422,575) Other assets............................................... (133,184) (157,781) Reserves for future policy benefits........................ 19,831,500 19,831,500 Accounts payable........................................... 349,689 625,127 ------------- ------------------ Net cash provided by operating activities................ 4,122,650 2,713,507 ------------- ------------------ CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from sales of fixed maturity securities........... 124,415,991 285,078,492 Purchase of fixed maturity securities...................... (171,905,715) (626,907,138) Net sales of short term investments........................ 51,506,706 -- ------------- ------------------ Net cash provided (used) by investing activities......... 4,016,982 (341,828,646) ------------- ------------------ CASH FLOWS FROM FINANCING ACTIVITIES Net proceeds from sale of company stock.................... -- 353,419,413 ------------- ------------------ Net cash provided by financing activities................ -- 353,419,413 ------------- ------------------ Increase in cash and cash equivalents...................... 8,139,632 14,304,274 Cash and cash equivalents, beginning of period............. 6,414,642 250,000 ------------- ------------------ Cash and cash equivalents, end of period................... $ 14,554,274 $ 14,554,274 ============= ==================
See accompanying notes to consolidated financial statements. 6 7 ANNUITY AND LIFE RE (HOLDINGS), LTD. CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY UNAUDITED (EXPRESSED IN UNITED STATES DOLLARS)
THREE MONTHS NINE MONTHS ENDED ENDED SEPTEMBER 30, 1998 SEPTEMBER 30, 1998 ------------------ ------------------ PREFERRED SHARES PAR VALUE $1.00 Balance at beginning and end of period..................... $ -- $ -- ------------ ------------ COMMON SHARES PAR VALUE $1.00 Balance of beginning of period............................. $ 25,499,999 $ 12,000 Issuance of shares......................................... -- 25,499,999 Retirement of shares....................................... -- (12,000) ------------ ------------ Balance at end of period................................. $ 25,499,999 $ 25,499,999 ------------ ------------ ADDITIONAL PAID-IN CAPITAL Balance at beginning of period............................. $329,513,726 $ 238,000 Issuance of shares......................................... -- 334,049,964 Direct equity offering expenses............................ -- (4,774,238) ------------ ------------ Balance at end of period................................. $329,513,726 $329,513,726 ------------ ------------ NOTES RECEIVABLE FROM STOCK SALES Balance at beginning of period............................. $ (1,344,312) $ -- Notes issued............................................... -- (1,325,000) Accrued interest during period............................. (23,378) (42,690) ------------ ------------ Balance at end of period................................. $ (1,367,690) $ (1,367,690) ------------ ------------ ACCUMULATED OTHER COMPREHENSIVE INCOME Balance at beginning of period............................. $ 912,354 $ -- Net unrealized holding gains on securities................. 6,620,084 7,532,438 ------------ ------------ Balance at end of period................................. $ 7,532,438 $ 7,532,438 ------------ ------------ RETAINED EARNINGS Balance at beginning of period............................. $ 3,126,025 $ -- Net income................................................. 6,660,166 9,786,191 ------------ ------------ Balance at end of period................................. 9,786,191 9,786,191 ------------ ------------ Total Stockholders' Equity....................... $370,964,664 $370,964,664 ============ ============
See accompanying notes to consolidated financial statements. 7 8 ANNUITY AND LIFE RE (HOLDINGS), LTD. NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS 1. ORGANIZATION Annuity and Life Re (Holdings), Ltd. ("Holdings") was incorporated on December 2, 1997 under the laws of Bermuda to provide annuity and life reinsurance to insurers and reinsurers through its wholly-owned subsidiary, Annuity and Life Reassurance, Ltd. ("Annuity Reassurance" and, together with Holdings, the "Company"). Annuity Reassurance is licensed under the insurance laws of Bermuda as a long term insurer. 2. BASIS OF PRESENTATION The accompanying unaudited consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles for interim financial information and in accordance with the instructions as to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto contained in the Company's Registration Statement (File No. 333-43301) dated April 8, 1998. In the opinion of management, all adjustments considered necessary for a fair presentation have been included in these financial statements. It should be noted that, in view of the Company's limited operating history, the financial data included herein is not necessarily indicative of the results of operations or financial condition of the Company in the future. During the period from the date of its inception to December 31, 1997, the Company did not incur any income or expenses that are required to be reported in a statement of income or a statement of cash flows under United States generally accepted accounting principles. Therefore, consolidated statements of income and cash flows have not been presented for that comparative fiscal period. 3. EARNINGS PER SHARE The following table sets forth the computation of basic and diluted earnings per share. The Company was nominally capitalized with 12,000 common shares of par value $1.00 each during the period from its incorporation to the date of the initial public offering and did not commence operations until April 17, 1998. For this reason the calculation of earnings per share for the nine months ended September 30, 1998 is based upon the earnings and number of shares outstanding since April 17, 1998, the effective date of the public offering, as this is the most meaningful presentation in the opinion of management.
THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30, 1998 SEPTEMBER 30, 1998 ------------------ ------------------ Net Income....................................... $ 6,660,166 $10,235,177 Weighted average number of common shares outstanding.................................... 25,499,999 23,270,491 Weighted average number of common shares outstanding including shares issuable from exercise of options and warrants............... 26,629,834 24,574,727 Earnings per share............................... $0.26 $0.44 Earnings per share assuming dilution............. $0.25 $0.42
4. COMPREHENSIVE INCOME In June 1997, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards Board ("SFAS") No. 130, "Reporting Comprehensive Income", effective for years beginning after December 15, 1997. SFAS No. 130 establishes standards for reporting and display of comprehensive income and its components (revenues, expenses, gains and losses) in a full set of general-purpose financial statements. 8 9 ANNUITY AND LIFE RE (HOLDINGS), LTD. NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) The most significant items of comprehensive income are net income, the change in unrealized gains and losses on securities, and the change in foreign currency translation. The adoption of FAS No. 130 does not affect results of operations or financial position, but affects their presentations and disclosure. The Company has adopted SFAS No. 130 as of January 1, 1998. 5. ORGANIZATIONAL EXPENSES All formation and organization costs incurred have been expensed in the nine-month period ending September 30, 1998. 6. STOCKHOLDERS' EQUITY On April 17, 1998 the Company completed an initial public offering of 19,640,579 common shares; total proceeds received net of underwriting discounts and commissions were $276,932,164. Simultaneous with the initial closing of the public offering, direct sales of 5,859,420 common shares and 397,500 Class B warrants were made to strategic investors, certain members of the Board of Directors and Company management; total net proceeds were $82,617,806. At December 31, 1997 all outstanding common shares of the Company were owned by the Annuity Re Purpose Trust, a Bermuda trust. The Trust was established for the sole purpose of providing the initial capitalization to the Company. Subsequent to the initial closing of the initial public offering of the Company's common shares on April 17, 1998, the Purpose Trust sold such common shares to the Company for an aggregate purchase price of $12,000 and such common shares were then canceled. At September 30, 1998 total capitalization of the Company after deducting the offering costs incurred directly by the Company of $4,774,238 and related loans to management in the amount of $1,367,690 was $370,964,664. The net proceeds from the offering were used to provide working capital and to capitalize the operating subsidiary, Annuity Reassurance, in support of its reinsurance underwriting capacity with all funds being invested in accordance with the Company's investment guidelines. 7. ACCOUNTING STANDARDS In June 1997, the Financial Accounting Standards Board (FASB) issued SFAS No. 131, "Disclosure about Segments of an Enterprise and Related Information", which is effective for the years beginning after December 15, 1997. SFAS No. 131 requires that a public company report financial and descriptive information about its reportable operating segments pursuant to criteria that may differ from current accounting practice. Operating segments, as defined, are components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision-maker in deciding how to allocate resources and in assessing performance. The adoption of SFAS No. 131 will not affect the Company's results of operations or financial position, but may affect the disclosure of segment information. The Company plans to adopt SFAS No. 131 during 1998, however SFAS No. 131 need not be applied to interim financial information in the initial year of its application. In February 1998, the FASB issued SFAS No. 132 "Employers Disclosures about Pensions and other Post Retirement Benefits". This Statement is effective for fiscal years beginning after December 15, 1997. The Company considers it unlikely that this Statement will affect its disclosures significantly. In June 1998, the FASB issued SFAS No. 133 "Accounting for Derivative Instruments and Hedging Activities". This Statement is effective for all fiscal quarters of fiscal years beginning after June 15, 1999. The Company is currently reviewing the impact of this standard on its financial reporting. 9 10 ANNUITY AND LIFE RE (HOLDINGS), LTD. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 1. GENERAL Annuity and Life Re (Holdings), Ltd. ("Holdings") was incorporated on December 2, 1997 under the laws of Bermuda to provide annuity and life reinsurance to insurers and reinsurers through its wholly-owned subsidiary, Annuity and Life Reassurance, Ltd. ("Annuity Reassurance" and together with Holdings, the "Company"). Annuity Reassurance is licensed under the insurance laws of Bermuda as a long term insurer. 2. OPERATING RESULTS For the initial six-month operating period ending September 30, 1998, the Company had consolidated net Income of approximately $10,235,000 which is $0.44 per common share or $0.42 per common share on a fully diluted basis. Consolidated net income before realized capital gains was approximately $9,067,000. A loss of approximately $449,000 was incurred during the three month period ended March 31, 1998 relating to expenses and costs incurred in the formation and organization of the Company. Earnings per share for the nine months ended September 30, 1998 is calculated using earnings and number of shares outstanding since the effective date of the Company's initial public offering. With insurance operations beginning in mid April following completion of the initial public offering and direct sales of its Common Shares, the Company is in the early stages of a start up operation. During the initial operating period of less than six months, management has focused its efforts on developing its underwriting and pricing systems and marketing the Company to the leading purchasers of annuity and life reinsurance. The Company did execute a number of reinsurance contracts during the three month period ending September 30, 1998 including two significant contracts -- a life contract estimated to develop annual gross premiums of $59 million and an annuity contract with an estimated $1 billion of deposits. The Company is working on a number of other reinsurance programs which, if successfully finalized, are expected to be recorded over the next several months. Net Premiums. Net premium revenue was $15.0 million from contracts executed in the three-month period ending September 30, 1998. Net Investment Income. Net investment income during the six-month operating period ending September 30, 1998 was $9.7 million. The average earned yield rate on an annualized basis for this period was approximately 6.07%. The net proceeds from the initial public offering were invested by the Company in short term and fixed maturity securities in accordance with the Company investment guidelines. The entire portfolio of fixed maturity securities has been classified as available for sale. Realized Investment Gains. Realized investment gains were $1.2 million resulting from activity within the Company's investment portfolios. In addition, at September 30, 1998 the Company's portfolio of fixed maturity securities had unrealized gains of approximately $7.5 million which were included in Other Comprehensive Income. Claims and Policy Benefits. Claims and Policy Benefits were approximately $8.4 million for the period ending September 30, 1998. This represents 56% of the Net Premium. The Company expects mortality to be fairly constant over long periods of time, but it will fluctuate from period to period. Reserve levels will in part be determined by the Company's experience and overall mortality trends. Policy Acquisition and Other Insurance Expenses. Policy Acquisition and Other Insurance Expenses, consisting primarily of allowances, were approximately $5.2 million for the period ending September 30, 1998. 10 11 This represents 34% of the Net Premium. Generally, policy acquisition costs and other insurance expenses fluctuate with business volume and changes in product mix. Other Operating Expenses. Operating expenses for the period ending September 30, 1998 were approximately $2.4 million and are in line with the Company's plan to be a low cost provider. 3. LIQUIDITY AND CAPITAL RESOURCES On April 17, 1998 the Company completed an initial public offering of 19,640,579 common shares; total proceeds received net of underwriting discounts and commissions were $276,932,164. Simultaneous with the initial closing of the public offering, direct sales of 5,859,420 common shares and 397,500 Class B warrants were made to strategic investors, certain members of the Board of Directors and Company management; total net proceeds were $82,617,806. At December 31, 1997 all outstanding common shares of the Company were owned by the Annuity Re Purpose Trust, a Bermuda trust. The trust was established for the sole purpose of providing the initial capitalization to the Company. Subsequent to the closing of the initial public offering of the Company's common shares on April 15, 1998, the Purpose Trust sold such common shares to the Company for an aggregate purchase price of $12,000 and such common shares were then cancelled. At September 30, 1998 total capitalization of the Company after deducting offering costs incurred directly by the Company of $4,774,238 and related loans to management in the amount of $1,367,690 was $370,964,664, The net proceeds were used to provide working capital and to capitalize the operating subsidiary, Annuity Reassurance, in support of its reinsurance underwriting capacity with all funds being invested in accordance with the Company's investment guidelines. At the October 29, 1998 Board of Directors meeting, a stockholder dividend of $.04 per share was declared. The continued payment of dividends is dependent on the ability of Annuity and Life Reassurance, Ltd., to achieve satisfactory underwriting and investment results. The Company does not presently anticipate that it will incur any material indebtedness in the ordinary course of its business other than obtaining letters of credit as security for certain of its reinsurance agreements. The Company currently has no material commitments for capital expenditures. 4. YEAR 2000 All of the Company's data processing and related systems were purchased since April 17, 1998 and are fully compliant with Year 2000 requirements. The Company does not expect to incur any material costs in connection with Year 2000 related issues. However, the Company will be exposed to the risk that its third party service providers and client companies may be exposed to Year 2000 related problems. The Company has no direct control over the Year 2000 compliance efforts of its third party service providers and client companies. The Company is monitoring whether such parties will be Year 2000 compliant on a timely basis and has received assurances that they will be. There can be no assurance, however, that the Company's operations will not experience material disruptions due to the failure of the Company's third party service providers or client companies to become fully Year 2000 compliant in a timely manner or that such failure will not otherwise have an adverse effect on the Company. The Company will continue to monitor developments relating to the issue, including the development of contingency plans for providing back-up services in the event of a systems failure. 5. FORWARD-LOOKING AND CAUTIONARY STATEMENTS The Company and its representatives may from time to time make written or oral forward-looking statements, including those contained in the foregoing Management's Discussion and Analysis. In order to take advantage of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, the Company is hereby identifying certain important factors which could cause the Company's actual results, performance or achievement to differ materially from those that may be contained in or implied by any 11 12 forward-looking statement made by or on behalf of the Company. The factors that could cause such forward-looking statements not to be realized include, without limitation, acceptance in the market of the Company's reinsurance products; pricing competition; the amount of underwriting capacity from time to time in the market; general economic conditions and conditions specific to the reinsurance and investment markets in which the Company operates; material fluctuations in interest rate levels; regulatory changes and conditions; rating agency policies and practices; claims development; and loss of key executives. The Company cautions that the foregoing list of important factors is not intended to be, and is not, exhaustive, The Company does not undertake to update any forward-looking statement that may be made from time to time by or on behalf of the Company. PART II -- OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits -- The following exhibits are filed as part of this report on Form 10-Q: 11 Computation of Earnings per share 27 Financial Data Schedule (b) Reports on Form 8-K -- There were no reports on Form 8-K filed during the period ended September 30, 1998. 12 13 ANNUITY AND LIFE RE (HOLDINGS), LTD. 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 thereunto duly authorized. Annuity and Life Re (Holdings), Ltd. Date: November 12, 1998 /s/ LAWRENCE S. DOYLE ------------------------------------------------------ Name: Lawrence S. Doyle Title: President and Chief Executive Officer (Principal Executive Officer) Date: November 12, 1998 /s/ WILLIAM W. ATKIN ------------------------------------------------------ Name: William W. Atkin Title: Chief Financial Officer and Treasurer (Principal Accounting and Financial Officer)
13 EX-11 2 COMPUTATION OF EARNINGS PER SHARE 1 EXHIBIT 11 ANNUITY AND LIFE RE (HOLDINGS), LTD. STATEMENT OF COMPUTATION OF NET INCOME PER COMMON SHARE UNAUDITED (EXPRESSED IN UNITED STATES DOLLARS EXCEPT FOR SHARE AMOUNTS)
THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30, 1998 SEPTEMBER 30, 1998 -------------------------- -------------------------- BASIC DILUTED BASIC DILUTED ----------- ----------- ----------- ----------- Net Income:........................... $ 6,660,116 $ 6,660,166 $10,235,177 $10,235,177 ----------- ----------- ----------- ----------- Net Income available to common shareholders........................ $ 6,660,166 $ 6,660,166 $10,235,177 $10,235,177 ----------- ----------- ----------- ----------- Number of shares: Weighted average shares outstanding...................... 25,499,999 26,629,834 23,270,491 24,574,727 =========== =========== =========== =========== Earnings per share:................... $ 0.26 $ 0.25 $ 0.44 $ 0.42
- --------------- Note: Earnings per share for the nine months ended September 30, 1998 is calculated using earnings and the number of shares outstanding since April 17, 1998, the effective date of the Company's initial public offering. 14 EX-27 3 FINANCIAL DATA SCHEDULE
7 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM (A) THE CONSOLIDATED BALANCE SHEET AS OF SEPTEMBER 30, 1998 (UNAUDITED) AND THE CONSOLIDATED STATEMENT OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998 (UNAUDITED) AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH (B) FINANCIAL STATEMENTS. 9-MOS DEC-31-1998 JAN-01-1998 SEP-30-1998 349,496,258 0 0 0 0 0 1,332,713,051 14,554,274 0 127,981,918 1,502,853,002 19,831,500 0 0 1,057,701,804 0 0 0 25,499,999 345,464,665 1,502,853,002 15,027,750 9,666,181 1,167,664 0 8,399,500 5,162,175 2,513,729 9,786,191 0 9,786,191 0 0 0 9,786,191 0.44 0.42 0 0 0 0 0 0 0
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