Maiden Holdings, Ltd. (NASDAQ: MHLD) (“Maiden” or “the Company”)
today reported a fourth quarter 2018 net loss attributable to
Maiden common shareholders of $269.2 million or $3.25 per diluted
common share, compared to a net loss attributable to Maiden common
shareholders of $133.6 million or $1.59 per diluted common share in
the fourth quarter of 2017. The non-GAAP operating loss (11) was
$212.4 million, or $2.56 per diluted common share, compared with a
non-GAAP operating loss of $126.4 million, or $1.51 per diluted
common share in the fourth quarter of 2017. Book value per common
share (1) was $1.08 at December 31, 2018.
Commenting on the Company’s results, Maiden’s President and
Chief Executive Officer, Lawrence F. Metz said, “We recognize that
2018 was an extremely difficult year for all of our shareholders
and dedicated employees. With our recently announced revised
LPT/ADC transaction with Enstar, we believe we are nearing the end
of our strategic review process. Since our third quarter report we
have continued to take decisive action, completing the sale of our
US reinsurance business to Enstar, mutually agreeing with AmTrust
to first amend and then terminate our quota share reinsurance
contracts effective January 1, 2019, completing the sale of certain
of our European subsidiaries, and entering into a new LPT/ADC
agreement with Enstar. We look forward to now taking the necessary
steps to enhance our business and create lasting shareholder
value.”
Patrick J. Haveron, Maiden’s Chief Financial Officer and Chief
Operating Officer added, “Since September 1, 2018 the series of
strategic measures we have implemented have materially de-risked
our balance sheet, improved liquidity, significantly strengthened
our capital position relative to regulatory requirements, and cured
our breach of the Bermuda Enhanced Capital Requirement. Looking
ahead, we have also reduced our annual total operating expenses by
more than $50 million and look to improve on that to reflect the
significant changes in our business during 2018 and 2019. The new
LPT/ADC with Enstar will further solidify the progress we have made
by protecting our reserves while retaining more assets for
investment. Maiden enters 2019 with a stronger balance sheet and we
expect to further improve our solvency ratios as we look to rebuild
shareholder value and begin re-positioning our business for the
future.”
New LPT/ADC with Enstar
On March 1, 2019, the Company and Enstar Group Limited
(“Enstar”) terminated the Master Agreement between the parties
dated as of November 9, 2018 (the “Old MTA”) and simultaneously
signed a new agreement (the "New MTA") pursuant to which an Enstar
subsidiary will assume liabilities for loss reserves as of December
31, 2018 associated with the quota share reinsurance agreements
between the Company’s wholly-owned subsidiary Maiden Reinsurance
Ltd. ("Maiden Bermuda") and AmTrust Financial Services, Inc. or its
subsidiaries ("AmTrust") in excess of a $2.44 billion retention up
to $675 million. The $2.44 billion retention will be subject to
adjustment for paid losses since December 31, 2018. The New MTA and
associated pending reinsurance agreement will provide Maiden
Bermuda with $175 million in adverse development cover over its
carried AmTrust reserves at December 31, 2018. The transaction is
subject to regulatory approvals and other closing conditions.
The Company’s entry into a New MTA with Enstar, which is smaller
than the Old MTA, reflects the cumulative positive impact of
measures already implemented since the third quarter of 2018 that
have significantly improved the Company’s capital position. The New
MTA also provides Maiden with more investable assets and reserve
protection than the Old MTA, which will further support its
improving solvency ratios. Additional information regarding the New
MTA with Enstar can be found in the Company’s Annual Report on Form
10-K filing.
Discontinued Operations
As part of its strategic review announced in early 2018, during
the fourth quarter of 2018, the Company divested its U.S.
reinsurance treaty operations. Except as explicitly described as
held for sale or as discontinued operations, and unless otherwise
noted, all discussions and amounts presented herein relate to the
Company’s continuing operations except for net loss, net loss
attributable to Maiden and net loss attributable to Maiden common
shareholders.
Sale of Maiden Reinsurance North
America, Inc. (“Maiden US”) to Enstar
On December 27, 2018, Maiden announced that its subsidiary,
Maiden Holdings North America, Ltd., had completed the sale of
Maiden US to Enstar for initial net consideration of $272.4
million, including estimated closing adjustments. At closing,
approximately $1.3 billion of legacy reinsurance liabilities for
Maiden’s US Diversified Business were acquired by Enstar. In its
consolidated results for the fourth quarter and year-ended December
31, 2018, Maiden has booked estimated post-closing adjustments
which reduce this aggregate purchase price by $8.2 million. During
the fourth quarter ended December 31, 2018, the Company reported a
loss from discontinued operations of $52.5 million, due primarily
to the realized loss recognized on disposal of Maiden US. This loss
also included recognition of unrealized losses on investments in
Maiden US of $26.6 million. For the year ended December 31, 2018,
the Company’s loss from discontinued operations totaled $94.1
million. In addition to the fourth quarter impacts of the sale, the
loss was also due to the write-off of goodwill and related
intangible assets of $74.2 million that had previously been
reported in the third quarter, offset by results of discontinued
operations of $25.1 million through the third quarter and gain from
the sale of Maiden US’ renewal rights of $7.5 million. Additional
information regarding the Company’s discontinued operations can be
found in the Company’s Annual Report on Form 10-K filing made
concurrent with this news release.
Consolidated Results for the Quarter
Ended December 31, 2018
In the fourth quarter of 2018, gross premiums written were
$388.5 million, compared to $427.3 million in the fourth quarter of
2017 primarily due to decreases in the premiums from the AmTrust
Reinsurance segment. Net premiums written totaled $388.1 million in
the fourth quarter of 2018, compared to $434.0 million in the
fourth quarter of 2017. Net premiums earned were $484.9 million in
the fourth quarter of 2018, compared to $480.2 million in the
fourth quarter of 2017.
In the fourth quarter of 2018, net loss and loss adjustment
expenses increased to $556.6 million from $464.8 million in the
fourth quarter of 2017, due primarily to higher adverse prior
year-loss development for the AmTrust Reinsurance segment. The loss
ratio (6) in the fourth quarter of 2018 was 114.3% compared to
96.4% reported in the fourth quarter of 2017. The increase in the
loss ratio was due to adverse development of prior year losses of
$152.8 million in 2018 compared to $136.0 million for the same
period in 2017. This development was primarily in our AmTrust
Reinsurance segment for each respective period, which also recorded
higher initial loss ratios on current year premiums earned during
2018 factoring, in both market conditions and recent loss trends
and experience.
Commission and other acquisition expenses were $157.7 million in
the fourth quarter of 2018, compared to $156.0 million in the
fourth quarter of 2017, resulting in commission and other
acquisition expense ratios of 32.4% for both periods. General and
administrative expenses for the fourth quarter of 2018 totaled
$15.2 million, compared to $14.0 million in the same period one
year ago. The general and administrative expense ratio(8) in the
fourth quarter of 2018 increased modestly to 3.1% from 2.9% in the
fourth quarter of 2017, while the expense ratio(9) was 35.5% in the
fourth quarter of 2018 compared with 35.3% for the same period last
year.
The combined ratio(10) for the fourth quarter of 2018 totaled
149.8%, compared with 131.7% in the fourth quarter of 2017.
Net investment income increased modestly to $34.7 million in the
fourth quarter of 2018 from $33.0 million in the same period last
year and was largely due to the growth in average investable assets
of 8.1% from the same period in 2017.
As of December 31, 2018, the average yield on the fixed income
portfolio excluding discontinued operations was 3.20% while the
average duration of investable assets was 4.6 years.
Additional information regarding the Company’s results of
operations can be found in the Company’s Annual Report on Form 10-K
filing made concurrent with this news release.
Consolidated Results for the Twelve
Months Ended December 31, 2018
The net loss attributable to Maiden common shareholders was
$570.3 million or $6.87 per diluted common share in 2018, compared
to a net loss attributable to Maiden common shareholders of $199.1
million or $2.32 per diluted common share in 2017. The non-GAAP
operating loss(11) for 2018 was $471.6 million, or $5.68 per
diluted common share, compared with a non-GAAP operating loss of
$169.6 million, or $1.98 per diluted common share, in 2017.
Gross premiums written were $2.02 billion in 2018 compared to
$2.08 billion in 2017 as declines in the AmTrust Reinsurance
segment were offset by modest increases in the Diversified
Reinsurance segment from the Company’s international business. Net
premiums written totaled $2.01 billion in 2018 compared to $2.04
billion in 2017. Net premiums earned were $2.03 billion in 2018
compared to $1.99 billion in 2017.
Net loss and loss adjustment expenses of $1.88 billion compared
to $1.56 billion in 2017. The loss ratio(6) for 2018 was 92.3%,
compared to 77.7% reported for 2017. The increase in the loss ratio
was due to adverse development of prior year losses of $403.2
million in 2018 compared to $247.2 million for the same period in
2017. This development was primarily in our AmTrust Reinsurance
segment for each respective period, which also recorded higher
initial loss ratios on current year premiums earned during 2018,
factoring in both market conditions and recent loss trends and
experience.
Commission and other acquisition expenses were $654.7 million in
2018, compared to $643.8 million in 2017, resulting in a commission
and other acquisition expense ratio of 32.2%, which was unchanged
from the prior year. Total general and administrative expenses for
2018 totaled $64.9 million, compared with $53.0 million in 2017.
The general and administrative expense ratio(8) in 2018 was 3.2%,
compared to 2.6% in 2017, while the expense ratio(9) was 35.4% in
2018, compared with 34.8% in 2017.
The combined ratio(10) for 2018 totaled 127.7%, compared with
112.5% in 2017.
Net investment income was $136.3 million in 2018, compared to
$124.1 million in 2017 and was largely due to the growth in average
investable assets of 8.1% from the same period in 2017.
Additional information regarding the Company’s results of
operations can be found in the Company’s Annual Report on Form 10-K
filing made concurrent with this news release.
Quarterly Dividends
On February 26, 2019, the Company's Board of Directors did not
authorize any quarterly dividends related to either its common
shares or any series of its preferred shares. Additional
information regarding the Company’s dividends can be found in the
Company’s Annual Report on Form 10-K filing made concurrent with
this news release.
Other Financial Matters
- Total assets were $5.3 billion at
December 31, 2018, compared to $6.5 billion at September 30, 2018.
Shareholders' equity was $554.3 million at December 31, 2018,
compared to $772.6 million at September 30, 2018.
(1)(11) 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.
(6)(7)(8)(9)(10) Loss ratio, commission and other acquisition
expense ratio, general and administrative expense ratio, expense
ratio and combined ratio are non-GAAP operating metrics. Please see
the additional information on these measures under Non-GAAP
Financial Measures tables.
About Maiden Holdings, Ltd.
Maiden Holdings, Ltd. is a Bermuda-based holding company formed
in 2007. The Company is focused on serving the needs of regional
and specialty insurers in Europe and select other global markets by
providing innovative reinsurance solutions designed to support
their capital needs.
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. In addition,
the Company may not be able to complete the proposed transaction
with Enstar on the terms summarized above or other acceptable
terms, or at all, due to a number of factors, including but not
limited to failure to obtain governmental and regulatory approvals
or to satisfy other closing conditions. 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, 2018 as updated
in periodic filings with the SEC. However these factors should not
be construed as exhaustive. Forward-looking statements speak only
as of the date they are made and the Company undertakes no
obligation to update or revise any forward-looking statement that
may be made from time to time, whether as a result of new
information, future developments or otherwise, except as required
by law.
Maiden Holdings, Ltd. Consolidated Balance
Sheets (in thousands (000's), except per share data)
December 31, 2018 December 31, 2017
(Unaudited) (Audited) Assets
Fixed maturities, available-for-sale, at
fair value (Amortized cost 2018: $3,109,980 ; 2017:$2,699,297)
$ 3,051,568 $ 2,707,516
Fixed maturities, held-to-maturity, at
amortized cost (Fair value 2018: $998,012; 2017:$1,125,626)
1,015,681 1,097,801 Other investments
23,716 6,600 Total
investments 4,090,965 3,811,917 Cash and cash
equivalents
200,841 54,470 Restricted cash and cash
equivalents
130,148 94,905 Accrued investment income
27,824 28,798 Reinsurance balances receivable, net
67,308 72,494 Reinsurance recoverable on unpaid
losses Loan to related party
167,975 167,975 Deferred
commission and other acquisition expenses, net
388,442
380,204 Goodwill and intangible assets, net
-
- Other assets
39,482 131,608 Assets held for
sale
174,475 1,901,818
Total Assets $ 5,287,460 $
6,644,189 Liabilities and Equity
Liabilities Reserve for loss and loss adjustment expenses
$ 3,055,976 $ 2,386,722 Unearned
premiums
1,200,419 1,230,882 Accrued expenses and
other liabilities
65,494 90,069 Senior notes -
principal amount
262,500 262,500 Less: unamortized
debt issuance costs
7,806 8,018
Senior notes, net
254,694
254,482 Liabilities held for sale
155,961 1,449,408 Total
Liabilities 4,732,544
5,411,563 Commitments and Contingencies
Equity Preference Shares
465,000 465,000
Common shares
879 877 Additional paid-in capital
749,418 748,113 Accumulated other comprehensive
(loss) income
(65,616 ) 13,354 (Accumulated
deficit) retained earnings
(563,891 ) 35,472
Treasury shares, at cost
(31,515 )
(30,642 ) Total Maiden Shareholders’ Equity
554,275 1,232,174 Noncontrolling interest in
subsidiaries 641 452
Total Equity 554,916
1,232,626 Total Liabilities and Equity
$ 5,287,460 $ 6,644,189
Book value per common share(1) $
1.08 $ 9.25 Common shares
outstanding 82,948,577 82,974,895
Maiden Holdings, Ltd. Consolidated Statements of
Income (in thousands (000's), except per share data)
(Unaudited) For the Three
Months Ended December 31, For the Year Ended December
31, 2018 2017 2018 2017
Revenues: Gross premiums written
$ 388,451
$ 427,329 $ 2,017,798
$ 2,078,091 Net premiums written
$ 388,112 $ 433,963 $
2,014,597 $ 2,037,377 Change in unearned
premiums 96,812 46,259 11,605
(44,718 )
Net premiums earned 484,924 480,222
2,026,202 1,992,659 Other insurance revenue 2,052 1,986 9,681 9,802
Net investment income 34,737 32,960 136,285 124,135 Net realized
(losses) gains on investment (1,247 ) 3,906 (1,529 ) 12,222 Total
other-than-temporary impairment losses (5,353 ) - (5,832 ) -
Portion of loss recognized in other comprehensive income (loss)
- - - - Net
impairment losses recognized in earnings (5,353 ) -
(5,832 ) -
Total revenues
515,113 519,074 2,164,807
2,138,818
Expenses: Net loss and loss adjustment
expenses 556,618 464,825 1,880,121 1,555,433 Commission and other
acquisition expenses 157,714 156,026 654,740 643,797 General and
administrative expenses 15,201 14,034
64,940 53,004
Total expenses
729,533 634,885 2,599,801
2,252,234
Non-GAAP loss from
operations(2) (214,420 )
(115,811 ) (434,994 )
(113,416 ) Other expenses: Interest and
amortization expenses (4,831 ) (4,830 ) (19,318 ) (23,260 )
Accelerated amortization of senior note issuance cost - - - (2,809
) Foreign exchange and other gains (losses) 2,599
(2,728 ) 4,461 (14,921 )
Total other
expenses (2,232 ) (7,558 ) (14,857 )
(40,990 )
Loss before income taxes
(216,652 ) (123,369 ) (449,851
) (154,406 ) Less: income tax expense
(benefit) 40 (6,903 ) 441
(6,757 )
Net loss from continuing operations (216,692
) (116,466 ) (450,292 )
(147,649 ) Loss from discontinued operations, net
of income tax (52,504 )
(8,391 ) (94,113 )
(22,096 ) Net loss (269,196 )
(124,857 ) (544,405 ) (169,745
)
Add: net income from continuing operations
attributable to noncontrollinginterests
(39 ) (185 ) (219 ) (151 )
Net loss
attributable to Maiden (269,235 ) (125,042
) (544,624 ) (169,896 )
Dividends on preference shares(3) - (8,545 )
(25,636 ) (29,156 )
Net loss attributable to
Maiden common shareholders $ (269,235 )
$ (133,587 ) $ (570,260 )
$ (199,052 )
Basic and diluted loss from continuing
operations per share attributable to Maiden common
shareholders(15)
$ (2.61 ) $ (1.49 )
$ (5.74 ) $ (2.06 )
Basic and diluted loss from
discontinued operations per share attributable to Maiden
common shareholders(15)
(0.64 ) (0.10 )
(1.13 ) (0.26 )
Basic and diluted loss per share
attributable to Maiden common
shareholders(15)
$ (3.25 ) $ (1.59 )
$ (6.87 ) $ (2.32 )
Dividends declared per common share $ -
$ 0.15 $ 0.35 $
0.60 Annualized return on average common
equity -538.3 % -61.5 %
-133.2 % -22.0 % Weighted
average number of common shares - basic and diluted(15)
82,946,266 83,962,325 83,050,362 85,678,232
Maiden Holdings, Ltd.
Supplemental Financial Data - Segment Information (in
thousands (000's)) (Unaudited) For the Three
Months Ended December 31, 2018
Diversified Reinsurance
AmTrust Reinsurance
Other Total Gross premiums written $ 20,379 $
368,072 $ - $ 388,451 Net premiums written $
20,040 $ 368,072 $ - $ 388,112 Net
premiums earned $ 29,649 $ 455,275 $ - $ 484,924 Other insurance
revenue 2,052 - - 2,052 Net loss and loss adjustment expenses
("loss and LAE") (19,613 ) (536,689 ) (316 ) (556,618 ) Commissions
and other acquisition expenses (10,488 ) (147,226 ) - (157,714 )
General and administrative expenses(4) (4,066 ) (891
) - (4,957 )
Underwriting
loss(5) $ (2,466 ) $ (229,531 ) $ (316 ) $ (232,313 )
Reconciliation to net loss from continuing operations
Net investment income and realized losses on investment 33,490
Total other-than-temporary impairment losses (5,353 ) Interest and
amortization expenses (4,831 ) Foreign exchange and other gains
2,599 Other general and administrative expenses(4) (10,244 ) Income
tax expense (40 )
Net loss from continuing operations
$ (216,692 ) Net loss and LAE ratio(6) 61.9 %
117.9 % 114.3 % Commission and other acquisition
expense ratio(7) 33.1 % 32.3 % 32.4 % General and administrative
expense ratio(8) 12.8 % 0.2 % 3.1 % Expense
ratio(9) 45.9 % 32.5 % 35.5 %
Combined
ratio(10) 107.8 % 150.4 % 149.8 %
For the Three Months Ended December
31, 2017
Diversified Reinsurance
AmTrust Reinsurance
Other Total Gross premiums written $ 9,528 $
417,801 $ - $ 427,329 Net premiums written $
9,087 $ 424,876 $ - $ 433,963 Net
premiums earned $ 21,389 $ 458,833 $ - $ 480,222 Other insurance
revenue 1,986 - - 1,986 Net loss and LAE (13,166 ) (451,659 ) -
(464,825 ) Commissions and other acquisition expenses (7,036 )
(148,988 ) (2 ) (156,026 ) General and administrative expenses(4)
(4,145 ) (812 ) - (4,957 )
Underwriting loss(5) $ (972 ) $ (142,626 ) $ (2 ) $
(143,600 )
Reconciliation to net loss from continuing
operations Net investment income and realized gains on
investment 36,866 Interest and amortization expenses (4,830 )
Foreign exchange losses (2,728 ) Other general and administrative
expenses(4) (9,077 ) Income tax benefit 6,903
Net
loss from continuing operations $ (116,466 ) Net loss
and LAE ratio(6) 56.3 % 98.4 % 96.4 %
Commission and other acquisition expense ratio(7) 30.1 % 32.5 %
32.4 % General and administrative expense ratio(8) 17.8 %
0.2 % 2.9 % Expense ratio(9) 47.9 %
32.7 % 35.3 %
Combined ratio(10) 104.2
% 131.1 % 131.7 %
Maiden Holdings, Ltd. Supplemental
Financial Data - Segment Information (in thousands
(000's)) (Unaudited) For the
Year Ended December 31, 2018
Diversified Reinsurance
AmTrust Reinsurance
Other Total Gross premiums written $ 131,518 $
1,886,280 $ - $ 2,017,798 Net premiums written
$ 129,319 $ 1,885,278 $ - $ 2,014,597
Net premiums earned $ 112,487 $ 1,913,715 $ - $ 2,026,202 Other
insurance revenue 9,681 - - 9,681 Net loss and LAE (71,441 )
(1,806,995 ) (1,685 ) (1,880,121 ) Commissions and other
acquisition expenses (38,749 ) (615,991 ) - (654,740 ) General and
administrative expenses(4) (17,396 ) (3,845 )
- (21,241 )
Underwriting loss(5) $
(5,418 ) $ (513,116 ) $ (1,685 ) $ (520,219 )
Reconciliation to net loss from continuing operations Net
investment income and realized losses on investment 134,756 Total
other-than-temporary impairment losses (5,832 ) Interest and
amortization expenses (19,318 ) Foreign exchange and other gains
4,461 Other general and administrative expenses(4) (43,699 ) Income
tax expense (441 )
Net loss from continuing
operations $ (450,292 ) Net loss and LAE ratio(6)
58.5 % 94.4 % 92.3 % Commission and other acquisition
expense ratio(7) 31.7 % 32.2 % 32.2 % General and administrative
expense ratio(8) 14.2 % 0.2 % 3.2 % Expense
ratio(9) 45.9 % 32.4 % 35.4 %
Combined
ratio(10) 104.4 % 126.8 % 127.7 %
For the Year Ended December 31, 2017
Diversified Reinsurance
AmTrust Reinsurance
Other Total Gross premiums written $ 84,613 $
1,993,478 $ - $ 2,078,091 Net premiums written
$ 82,521 $ 1,954,856 $ - $ 2,037,377
Net premiums earned $ 83,015 $ 1,909,644 $ - $ 1,992,659 Other
insurance revenue 9,802 - - 9,802 Net loss and LAE (54,714 )
(1,498,881 ) (1,838 ) (1,555,433 ) Commissions and other
acquisition expenses (29,018 ) (614,777 ) (2 ) (643,797 ) General
and administrative expenses(4) (15,976 ) (3,052 )
- (19,028 )
Underwriting loss(5)
$ (6,891 ) $ (207,066 ) $ (1,840 ) $ (215,797 )
Reconciliation to net loss from continuing operations Net
investment income and realized gains on investment 136,357 Interest
and amortization expenses (23,260 ) Accelerated amortization of
senior note issuance cost (2,809 ) Foreign exchange losses (14,921
) Other general and administrative expenses(4) (33,976 ) Income tax
benefit 6,757
Net loss from continuing
operations $ (147,649 ) Net loss and LAE ratio(6)
58.9 % 78.4 % 77.7 % Commission and other acquisition
expense ratio(7) 31.3 % 32.2 % 32.2 % General and administrative
expense ratio(8) 17.2 % 0.2 % 2.6 % Expense
ratio(9) 48.5 % 32.4 % 34.8 %
Combined
ratio(10) 107.4 % 110.8 % 112.5 %
Maiden Holdings, Ltd. Non - GAAP Financial
Measures (in thousands (000's), except per share data)
(Unaudited) For the Three
Months Ended December 31, For the Year Ended December
31, 2018 2017 2018
2017
Non-GAAP operating loss attributable to Maiden common
shareholders(11) $ (212,414 ) $ (126,372 ) $ (471,562 )
$ (169,608 )
Non-GAAP basic and diluted operating loss per share
attributable to Maiden common shareholders $ (2.56 ) $ (1.51 )
$ (5.68 ) $ (1.98 )
Annualized non-GAAP operating return on
average common equity(12) -424.7 % -58.2 % -110.1 %
-18.7 %
Reconciliation of net loss attributable
to Maiden common shareholders to non-GAAP operating loss
attributable to Maiden common shareholders:
Net loss attributable to Maiden common shareholders $ (269,235 ) $
(133,587 ) $ (570,260 ) $ (199,052 ) Add (subtract) Net realized
losses (gains) on investment 1,247 (3,906 ) 1,529 (12,222 ) Total
other-than-temporary impairment losses 5,353 - 5,832 - Foreign
exchange and other (gains) losses (2,599 ) 2,728 (4,461 ) 14,921
Divested NGHC Quota Share run-off 316 2 1,685 1,840 Accelerated
amortization of senior note issuance cost - - - 2,809 Loss from
discontinued operations, net of income tax 52,504
8,391 94,113 22,096
Non-GAAP operating loss attributable to Maiden common
shareholders(11) $ (212,414 )
$ (126,372 ) $ (471,562 )
$ (169,608 ) Weighted average number
of common shares - basic and diluted(15) 82,946,266
83,962,325 83,050,362 85,678,232
Reconciliation of diluted loss per
share attributable to Maiden common shareholders to non-GAAP
diluted operating loss per share attributable to Maiden
common shareholders:
Diluted loss per share attributable to Maiden common shareholders $
(3.25 ) $ (1.59 ) $ (6.87 ) $ (2.32 ) Add (subtract) Net
realized losses (gains) on investment 0.02 (0.05 ) 0.02 (0.14 )
Total other-than-temporary impairment losses 0.07 - 0.07 - Foreign
exchange and other (gains) losses (0.03 ) 0.03 (0.05 ) 0.17
Divested NGHC Quota Share run-off - - 0.02 0.02 Accelerated
amortization of senior note issuance cost - - - 0.03 Loss from
discontinued operations, net of income tax 0.63
0.10 1.13 0.26
Non-GAAP diluted operating loss per share attributable to Maiden
common shareholders $ (2.56 ) $
(1.51 ) $ (5.68 ) $
(1.98 ) Reconciliation of net loss
attributable to Maiden to non-GAAP (loss) income from
operations: Net loss attributable to Maiden $ (269,235 ) $
(125,042 ) $ (544,624 ) $ (169,896 ) Add (subtract) Foreign
exchange and other (gains) losses (2,599 ) 2,728 (4,461 ) 14,921
Interest and amortization expenses 4,831 4,830 19,318 23,260
Accelerated amortization of senior note issuance cost - - - 2,809
Income tax expense (benefit) 40 (6,903 ) 441 (6,757 ) Net income
attributable to noncontrolling interest 39 185 219 151 Loss from
discontinued operations, net of income tax 52,504
8,391 94,113 22,096
Non-GAAP loss from operations(2) $
(214,420 ) $ (115,811 ) $
(434,994 ) $ (113,416 )
Maiden Holdings, Ltd. Non - GAAP
Financial Measures (in thousands (000's), except per share
data) (Unaudited) December 31,
2018 December 31, 2017 Investable assets: Total
investments $ 4,090,965 $ 3,811,917 Cash and cash equivalents
200,841 54,470 Restricted cash and cash equivalents 130,148 94,905
Loan to related party 167,975 167,975 Total
investable assets(13)
$ 4,589,929 $
4,129,267 December 31, 2018 December 31,
2017 Capital: Preference shares $ 465,000 $ 465,000
Common shareholders' equity 89,275 767,174
Total
Maiden shareholders' equity 554,275 1,232,174 2016 Senior Notes
110,000 110,000 2013 Senior Notes 152,500 152,500
Total capital resources(14) $ 816,775
$ 1,494,674 (1) Book value per common share is
calculated using Maiden common shareholders’ equity (shareholders'
equity excluding the aggregate liquidation value of our preference
shares) divided by the number of common shares outstanding.
(2) Non-GAAP loss from operations is a non-GAAP financial measure
defined by the Company as net loss attributable to Maiden excluding
foreign exchange and other gains and losses, interest and
amortization expenses, accelerated amortization of senior note
issuance cost, income tax expense, net income or loss attributable
to noncontrolling interest and loss from discontinued operations,
net of income tax and should not be considered as an alternative to
net income (loss). The Company’s management believes that non-GAAP
loss from operations is a useful measure of the Company’s
underlying earnings fundamentals based on its underwriting and
investment income before financing costs. This loss from operations
enables readers of this information to more clearly understand the
essential operating results of the Company. The Company’s measure
of non-GAAP loss from operations may not be comparable to similarly
titled measures used by other companies. (3) Dividends on
preference shares consist of $0 and $3,093 paid to Preference
shares - Series A for the three months ended December 31, 2018 and
2017, respectively, $9,282 and $12,375 paid to Preference shares -
Series A for the twelve months ended December 31, 2018 and 2017,
respectively, $0 and $2,940 paid to Preference shares - Series C
for the three months ended December 31, 2018 and 2017,
respectively, $8,816 and $11,756 paid to Preference shares - Series
C for the twelve months ended December 31, 2018 and 2017,
respectively, and $0 and $2,512 paid to Preference shares - Series
D for the three months ended December 31, 2018 and 2017,
respectively, and $7,538 and $5,025 for the twelve months ended
December 31, 2018 and 2017, respectively. (4) Underwriting
related general and administrative expenses is a non-GAAP measure
and includes expenses which are segregated for analytical purposes
as a component of underwriting income. (5) Underwriting loss
is a non-GAAP measure and is calculated as net premiums earned plus
other insurance revenue less net loss and LAE, commission and other
acquisition expenses and general and administrative expenses
directly related to underwriting activities. Management believes
that this measure is important in evaluating the underwriting
performance of the Company and its segments. This measure is also a
useful tool to measure the profitability of the Company separately
from the investment results and is also a widely used performance
indicator in the insurance industry. (6) Calculated by
dividing net loss and LAE by the sum of net premiums earned and
other insurance revenue. (7) Calculated by dividing
commission and other acquisition expenses by the sum of net
premiums earned and other insurance revenue. (8) Calculated
by dividing general and administrative expenses by the sum of net
premiums earned and other insurance revenue. (9) Calculated
by adding together the commission and other acquisition expense
ratio and general and administrative expense ratio. (10)
Calculated by adding together the net loss and LAE ratio and the
expense ratio. (11) Non-GAAP operating loss is a non-GAAP
financial measure defined by the Company as net loss attributable
to Maiden common shareholders excluding realized and unrealized
investment gains and losses, total other-than-temporary impairment
losses, foreign exchange and other gains and losses, Divested NGHC
Quota Share run-off, accelerated amortization of senior note
issuance cost, and loss from discontinued operations, net of income
tax and should not be considered as an alternative to net loss. The
Company's management believes that non-GAAP operating loss is a
useful indicator of trends in the Company's underlying operations.
The Company's measure of non-GAAP operating loss may not be
comparable to similarly titled measures used by other companies.
(12) Non-GAAP operating return on average common equity is a
non-GAAP financial measure. Management uses non-GAAP operating
return on average common shareholders' equity as a measure of
profitability that focuses on the return to Maiden common
shareholders. It is calculated using non-GAAP operating loss
attributable to Maiden common shareholders divided by average
Maiden common shareholders' equity. (13) Investable assets
is the total of the Company's investments, cash and cash
equivalents and loan to a related party. (14) Total capital
resources is the sum of the Company's principal amount of debt and
Maiden shareholders' equity. (15) 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.
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version on businesswire.com: https://www.businesswire.com/news/home/20190315005079/en/
Sard Verbinnen & Co.Maiden-SVC@sardverb.com
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