Company Website:
http://www.axiscapital.com/
PEMBROKE, Bermuda -- (Business Wire)
AXIS Capital Holdings Limited (“AXIS Capital”) (NYSE:AXS) today
announced information on its expected preliminary results for the fourth
quarter of 2014, which are as follows:
- Fourth quarter operating income1 between $117
million and $123 million
- Fourth quarter operating income per diluted common share between
$1.15 and $1.21
- Fourth quarter annualized operating return on average common equity1
between 9.0% and 9.5%
- Diluted book value of between $50.60 and $50.65 per common share
- Diluted tangible book value1 of between $49.73
and $49.79 per common share
AXIS Capital will report final 2014 results for the fourth quarter and
full year after the market close on Tuesday, February 3, 2015.
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Operating income, operating return on average common equity and
diluted tangible book value per common share are “non-GAAP financial
measures” as defined in Regulation G. A reconciliation of operating
income to net income available to common shareholders (the nearest
GAAP financial measure) and a reconciliation of the diluted tangible
book value per common share to the diluted book value per common
share (the nearest GAAP financial measure) are provided in this
release, as is a discussion of the rationale for the presentation of
these items.
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Conference Call
Albert Benchimol, President and CEO, and Joseph C. Henry, CFO, will host
an investor teleconference, including a question and answer period, on
Wednesday, February 4, 2015, at 8:00 a.m. (Eastern) to discuss the
fourth quarter results as well as related matters.
The teleconference can be accessed by dialing (888) 317-6003 (U.S.
callers) or (412) 317-6061 (international callers) and entering the
passcode 1-8-6-2-2-4-9approximately 10 minutes in advance of the
call. A live, listen-only webcast of the call will also be available via
the Investor Information section of the Company’s website at www.axiscapital.com.
A replay of the teleconference will be available for three weeks by
dialing (877) 344-7529 (U.S. callers) or (412) 317-0088 (international
callers) and entering the passcode 1-0-0-5-8-8-2-1. The webcast will be
archived in the Investor Information section of the Company’s website.
AXIS Capital is a Bermuda-based global provider of specialty lines
insurance and treaty reinsurance with total shareholders’ equity
attributable to AXIS Capital at September 30, 2014 of $5.8 billion and
locations in Bermuda, the United States, Europe, Singapore, Canada,
Australia and Latin America. Its operating subsidiaries have been
assigned a rating of “A+” (“Strong”) by Standard & Poor’s and “A+”
(“Superior”) by A.M. Best. For more information about AXIS Capital,
visit our website at www.axiscapital.com.
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| Non-GAAP Financial Measures Reconciliation | |
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| OPERATING INCOME AND DILUTED TANGIBLE BOOK VALUE PER COMMON SHARE
[a] | |
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OPERATING INCOME | | | | | | |
| | | | | Quarter ended December 31, | |
| | | | | 2014 | |
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| | | | | (in thousands, except per share amounts) | |
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| Net income available to common shareholders | | | | | $160,000 - $166,000 | |
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Adjustment for [c]:
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Net realized investment losses, net of tax
| | | | | 1,000 | |
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Foreign exchange gains, net of tax
| | | | | (44,000) | |
| Operating income | | | | | $117,000 - $123,000 | |
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| Net earnings per share - diluted | | | | | $1.57 - $1.63 | |
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Adjustment for [c]:
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Net realized investment losses, net of tax
| | | | | 0.01 | |
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Foreign exchange gains, net of tax
| | | | | (0.43) | |
| Operating income per share - diluted | | | | | $1.15 - $1.21 | |
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| Weighted average common share and common share equivalents -
diluted | | | | | 102,038 | |
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DILUTED TANGIBLE BOOK VALUE PER COMMON
SHARE - TREASURY STOCK METHOD [b] | | | | | | |
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| Common shareholders' equity | | | | | $5,189,986 - $5,195,986 | |
| Less: goodwill and intangible assets | | | | | (88,960) | |
| Tangible common shareholders' equity | | | | | $5,101,026 - $5,107,026 | |
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| Outstanding diluted common shares net of treasury shares | | | | | 102,577 | |
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| Diluted book value per common share | | | | | $50.60 - $50.65 | |
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| Diluted tangible book value per common share |
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| $49.73 - $49.79 | |
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[a]
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Operating income and diluted tangible book value per common share
are “non-GAAP financial measures” as defined by Regulation G.
Reconciliations of operating income to net income available to
common shareholders and diluted tangible book value per common share
to diluted book value per common share are presented above.
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[b]
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This method assumes that proceeds received upon exercise of options
will be used to repurchase our common shares at the closing market
price. Unvested restricted stocks and units and unrestricted phantom
stock units are also added to determine the diluted common shares
outstanding. Cash-settled restricted stock unit awards are excluded.
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[c]
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Represents management's best estimate.
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Cautionary Note Regarding Forward-Looking Statements
This release contains forward-looking statements within the meaning of
the U.S. federal securities laws. Forward-looking statements contained
in this release include our expectations regarding market conditions and
information regarding our estimates of losses related to natural
disasters. These statements involve risks, uncertainties and
assumptions. Actual events or results may differ materially from our
expectations. Important factors that could cause actual events or
results to be materially different from our expectations include (1) the
occurrence and magnitude of natural and man-made disasters, (2) actual
claims exceeding our loss reserves, (3) general economic, capital, and
credit market conditions, (4) the failure of any of the loss limitation
methods we employ, (5) the effects of emerging claims, coverage and
regulatory issues, including uncertainty related to coverage
definitions, limits, terms and conditions, (6) the failure of our
cedants to adequately evaluate risks, (7) inability to obtain additional
capital on favorable terms, or at all, (8) the loss of one or more key
executives, (9) a decline in our ratings with rating agencies, (10) the
loss of business provided to us by our major brokers, (11) changes in
accounting policies or practices, (12) the use of industry catastrophe
models and changes to these models, (13) changes in governmental
regulations, (14) increased competition, (15) changes in the political
environment of certain countries in which we operate or underwrite
business, (16) fluctuations in interest rates, credit spreads, equity
prices and/or currency values, and (17) the other factors set forth in
our most recent report on Form 10-K, Form 10-Q and other documents on
file with the Securities and Exchange Commission. We undertake no
obligation to update or revise publicly any forward-looking statements,
whether as a result of new information, future events or otherwise.
Non-GAAP Financial Measures
In this release, we present operating income and diluted tangible book
value per common share which are “non-GAAP financial measures” as
defined in Regulation G.
Operating income represents after-tax operational results without
consideration of after-tax net realized investment gains (losses) and
foreign exchange (losses) gains. We also present diluted operating
earnings per share and operating return on average common equity
("operating ROACE"), which are derived from the non-GAAP operating
income measure. Reconciliations of operating income and diluted
operating earnings per share to the nearest GAAP financial measures
(based on net income available to common shareholders) are included
above.
Tangible book value is defined as common shareholders' equity excluding
goodwill and intangible assets. Diluted tangible book value per common
share uses this measure as the numerator, with the denominator being
outstanding diluted common shares calculated under the treasury stock
method. A reconciliation of diluted tangible book value per common share
to diluted book value per common share (the nearest GAAP financial
measure) is included above.
We present our results of operations in the way we believe will be most
meaningful and useful to investors, analysts, rating agencies and others
who use our financial information to evaluate our performance. This
includes the presentation of “operating income” (in total and on a per
share basis), “annualized operating ROACE” (which is based on the
“operating income” measure) and diluted tangible book value per common
share.
Operating Income
Although the investment of premiums to generate income and realized
investment gains (or losses) is an integral part of our operations, the
determination to realize investment gains (or losses) is independent of
the underwriting process and is heavily influenced by the availability
of market opportunities. Furthermore, many users believe that the timing
of the realization of investment gains (or losses) is somewhat
opportunistic for many companies.
Foreign exchange (losses) gains in our Consolidated Statements of
Operations are primarily driven by the impact of foreign exchange rate
movements on net insurance-related liabilities. However, this movement
is only one element of the overall impact of foreign exchange rate
fluctuations on our financial position. In addition, we recognize
unrealized foreign exchange (losses) gains on our available-for-sale
investments in other comprehensive income and foreign exchange (losses)
gains realized upon the sale of these investments in net realized
investment (losses) gains. These unrealized and realized foreign
exchange movements generally offset a large portion of the foreign
exchange (losses) gains reported separately in earnings, thereby
minimizing the impact of foreign exchange rate movements on total
shareholders’ equity. As such, the Consolidated Statements of Operations
foreign exchange (losses) gains in isolation are not a fair
representation of the performance of our business.
In this regard, certain users of our financial statements evaluate
earnings excluding after-tax net realized investment gains (losses) and
foreign exchange (losses) gains and losses. We believe that showing net
income available to common shareholders exclusive of net realized gains
(losses) and foreign exchange (losses) gains reflects the underlying
fundamentals of our business. In addition, we believe that this
presentation enables investors and other users of our financial
information to analyze performance in a manner similar to how our
management analyzes the underlying business performance. We also believe
this measure follows industry practice and, therefore, facilitates
comparison of our performance with our peer group. We believe that
equity analysts and certain rating agencies that follow us, and the
insurance industry as a whole, generally exclude these items from their
analysis for the same reasons.
Diluted Tangible Book Value per Common Share
Diluted tangible book value per common share removes certain effects of
purchase accounting. We believe that this measure, in combination with
diluted book value per common share, is useful in assessing value
generated for our common shareholders.
Contacts:
Investor
AXIS Capital Holdings Limited
Linda Ventresca,
441-405-2727
investorrelations@axiscapital.com
or
Media
Kekst
and Company
Michael Herley, 212-521-4897
michael-herley@kekst.com
Source: AXIS Capital Holdings Limited
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