Annuity & Life Re Fourth Quarter 2004 Earnings Report HAMILTON,
Bermuda, March 14 /PRNewswire-FirstCall/ -- Annuity and Life Re
(Holdings), Ltd. (OTC:ANNRF.OB) (BULLETIN BOARD: 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." 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 http://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 http://www.alre.bm/reports.html .
ANNUITY AND LIFE RE (HOLDINGS), LTD. CONSOLIDATED BALANCE SHEETS
(U.S. dollars) December 31, December 31, 2004 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 CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited and
in U.S. dollars) For the Three Months Ended For the Year Ended
December 31, 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
principle $(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) CONSOLIDATED STATEMENTS OF SEGMENT (LOSS) INCOME
(Unaudited and in U.S. dollars) Life Annuity Reinsurance
Reinsurance Corporate Consolidated Three Months Ended December 31,
2004 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 accouting 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 DATASOURCE: Annuity and Life Re
(Holdings), Ltd. CONTACT: John Lockwood, Annuity & Life Re
(Holdings), Ltd., +1-441-296- 7667
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