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8-K - PLATINUM UNDERWRITERS HOLDINGS LTDfourthquarter2012_8k.htm
EX-99.1 - PLATINUM UNDERWRITERS HOLDINGS LTDearningsreleaseq4_2012.htm
 
Exhibit 99.2

 

 
Financial Supplement
 
 
Financial Information
as of December 31, 2012
 
(UNAUDITED)
 

 
The following supplement of information is provided to assist in your understanding of
Platinum Underwriters Holdings, Ltd.

This report is for informational purposes only. It should be read in conjunction with
documents filed with the Securities and Exchange Commission by Platinum Underwriters Holdings, Ltd.,
including the Company's Annual Report on Form 10-K.

Our Investor Relations Department can be reached at (203) 252-5833.

 
 

 
 
Platinum Underwriters Holdings, Ltd.
Overview
December 31, 2012

Address:
Investor Information:
Platinum Underwriters Holdings, Ltd.
Kenneth A. Kurtzman
The Belvedere Building
Tel:  (203) 252-5833
69 Pitts Bay Road
Email: kkurtzman@platinumre.com
Pembroke, HM 08 Bermuda
Website: www.platinumre.com


Definitions and presentation:
All financial information contained herein is unaudited except for the information for the fiscal year ended December 31, 2011.  Amounts may not reconcile exactly due to rounding differences.
 
In presenting the Company's results, management has included certain schedules containing financial measures that are not calculated under standards or rules that comprise accounting principles generally accepted in the United States (GAAP). Such measures, including segment underwriting income or loss (pages 14-18), operating income or loss (page 7), related underwriting ratios (pages 14-18), book value per common share and fully converted book value per common share (page 11), are referred to as non-GAAP measures. These non-GAAP measures may be defined or calculated differently by other companies.  Management believes these measures, which are used to monitor the results of operations, allow for a more complete understanding of the underlying business.  These measures should not be viewed as a substitute for those determined in accordance with GAAP.  Reconciliations of such measures to the most comparable GAAP figures are included within this financial supplement in accordance with Regulation G.

Safe Harbor Statement Regarding Forward-Looking Statements:
This financial supplement contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.  Forward-looking statements are based on our current plans or expectations that are inherently subject to significant business, economic and competitive uncertainties and contingencies.  These uncertainties and contingencies can affect actual results and could cause actual results to differ materially from those expressed in any forward-looking statements made by, or on behalf of, us.  In particular, statements using words such as “may,” “should,” “estimate,” “expect,” “anticipate,” “intend,” “believe,” “predict,” “potential,” or words of similar import generally involve forward-looking statements.  The inclusion of forward-looking statements in this financial supplement should not be considered as a representation by us or any other person that our current plans or expectations will be achieved.  Numerous factors could cause our actual results to differ materially from those in forward-looking statements, including, but not limited to, the occurrence of severe natural or man-made catastrophic events; the effectiveness of our loss limitation methods and pricing models; the adequacy of our ceding companies’ ability to assess the risks they underwrite; the adequacy of our liability for unpaid losses and loss adjustment expenses; the effects of emerging claim and coverage issues on our business; our ability to maintain our A.M. Best and S&P ratings; our ability to raise capital on acceptable terms if necessary; our exposure to credit loss from counterparties in the normal course of business; our ability to provide reinsurance from Bermuda to insurers domiciled in the United States; the effect on our business of the cyclicality of the property and casualty reinsurance business; the effect on our business of the highly competitive nature of the property and casualty reinsurance industry; losses that we could face from terrorism, political unrest and war; our dependence on the business provided to us by reinsurance brokers and our exposure to credit risk associated with our brokers during the premium and loss settlement process; the availability of retrocessional reinsurance on acceptable terms; foreign currency exchange rate fluctuation; our ability to maintain and enhance effective operating procedures and internal controls over financial reporting; our need to make many estimates and judgments in the preparation of our financial statements; the limitations placed on our financial and operational flexibility by the representations, warranties and covenants in our debt and credit facilities; our ability to retain key executives and attract and retain additional qualified personnel in the future; the performance of our investment portfolio; the effects of changes in market interest rates on our investment portfolio; the concentration of our investment portfolio in any particular industry, asset class or geographic region; the effects that the imposition of U.S. corporate income tax would have on Platinum Underwriters Holdings, Ltd. and its non-U.S. subsidiaries; the risk that U.S. persons who hold our shares will be subject to adverse U.S. federal income tax consequences under certain circumstances; the risk that U.S. persons who dispose of our shares may be subject to U.S. federal income taxation at the rates applicable to dividends on all or a portion of their gains, if any; the risk that holders of 10% or more of our shares may be subject to U.S. income taxation under the “controlled foreign corporation” rules; the effect of changes in U.S. federal income tax law on an investment in our shares; the possibility that we may become subject to taxes in Bermuda; the effect on our business of potential changes in the regulatory system under which we operate; the impact of regulatory regimes and changes to accounting rules on our financial results, irrespective of business operations; the uncertain impact on our business of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010; the dependence of the cash flows of Platinum Underwriters Holdings, Ltd., a holding company, on dividends, interest and other permissible payments from its subsidiaries to meet its obligations; the risk that our shareholders may have greater difficulty in protecting their interests than would shareholders of a U.S. corporation; and limitations on the ownership, transfer and voting rights of our common shares.  As a consequence, our future financial condition and results may differ from those expressed in any forward-looking statements made by, or on behalf of, us.  The foregoing factors should not be construed as exhaustive.  Additionally, forward-looking statements speak only as of the date they are made, and we undertake no obligation to revise or update forward-looking statements to reflect new information or circumstances after the date hereof or to reflect the occurrence of future events.

 
- 1 -

 

Platinum Underwriters Holdings, Ltd.
Table of Contents
 
   
Section:
Page:
 
   
Financial Highlights:
   
   
a. Financial Highlights
3
 
         
   
Balance Sheet:
   
   
a. Condensed Consolidated Balance Sheets - by Quarter
4
 
         
   
Statements of Operations:
   
   
a. Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)
5
 
   
b. Condensed Consolidated Statements of Operations and Comprehensive Income - by Quarter
6
 
         
   
Other Company Data:
   
   
a. Computation of Net Operating Income (Loss) and Net Operating Income (Loss) per Diluted Common Share
7
 
   
b. Key Ratios, Share Data, Ratings
8
 
         
   
Earnings (Loss) and Book Value Per Common Share Analysis:
   
   
a. Computation of Basic and Diluted Earnings (Loss) Per Common Share
9
 
   
b. Computation of Basic and Diluted Earnings Per Common Share - by Quarter
10
 
   
c. Book Value Per Common Share – by Quarter
11
 
         
   
Statements of Cash Flow:
   
   
a. Condensed Consolidated Statements of Cash Flows
12
 
   
b. Condensed Consolidated Statements of Cash Flows - by Quarter
13
 
         
   
Segment Data:
   
   
a. Segment Reporting - Three Month Summary
14
 
   
b. Segment Reporting - Twelve Month Summary
15
 
   
c. Property and Marine Segment - by Quarter
16
 
   
d. Casualty Segment - by Quarter
17
 
   
e. Finite Risk Segment - by Quarter
18
 
         
   
Net Premiums Written Data:
   
   
a. Net Premiums Written - Supplemental Information
19
 
   
b. Premiums by Line of Business - Three Month Summary
20
 
   
c. Premiums by Line of Business - Twelve Month Summary
21
 
         
   
Investments:
   
   
a. Investments
22
 
   
b. Fixed Maturity Available-for-Sale Securities Detail
23
 
   
c. Corporate Bonds Detail
24
 
   
d. Municipal Bonds Detail
25
 
   
e. Net Realized Gains (Losses) on Investments and Net Impairment Losses on Investments
26
 
         
   
Loss Reserves:
   
   
a. Analysis of Losses and Loss Adjustment Expenses
27
 
   
b. Summary of Favorable (Unfavorable) Development of Losses and Related Premiums and Commissions
28
 
         
   
Exposures:
   
   
a. Estimated Exposure to Peak Zone Property Catastrophe Losses
29
 

 
- 2 -

 

Platinum Underwriters Holdings, Ltd.
Financial Highlights
December 31, 2012 and 2011
($ and amounts in thousands, except per share data)


   
Three Months Ended
   
Twelve Months Ended
 
   
December 31,
   
December 31,
   
December 31,
   
December 31,
 
   
2012
   
2011
   
2012
   
2011
 
Highlights
                       
Net premiums written
  $ 133,901     $ 153,718     $ 565,000     $ 651,514  
Net premiums earned
    144,621       167,322       566,496       689,452  
Underwriting income (loss)
    107,817       (3,719 )     212,217       (296,726 )
Net investment income
    22,031       29,758       99,947       125,863  
Net operating income (loss) (1)
    104,633       19,237       246,851       (207,643 )
Net realized gains on investments
    18,455       718       88,754       3,934  
Net impairment losses on investments
    (149 )     (14,746 )     (3,031 )     (22,370 )
Net income (loss)
  $ 121,545     $ 7,064     $ 327,228     $ (224,064 )
                                 
Total assets
  $ 4,333,303     $ 4,551,611     $ 4,333,303     $ 4,551,611  
Investments and cash
    3,947,694       4,170,044       3,947,694       4,170,044  
Total shareholders' equity
    1,894,534       1,690,859       1,894,534       1,690,859  
Unpaid losses and loss adjustment expenses
  $ 1,961,282     $ 2,389,614     $ 1,961,282     $ 2,389,614  
                                 
Per share data
                               
Common shares outstanding - end of period
    32,722       35,526       32,722       35,526  
Weighted average common shares outstanding - basic
    32,674       36,117       33,714       36,901  
Adjusted weighted average common shares outstanding - diluted
    33,048       36,302       33,981       37,260  
Basic earnings (loss) per common share
  $ 3.71     $ 0.20     $ 9.67     $ (6.04 )
Diluted earnings (loss) per common share (2)
    3.67       0.19       9.60       (6.04 )
Operating income (loss) per common share - diluted (1)
    3.16       0.53       7.26       (5.63 )
Dividends per common share
    0.08       0.08       0.32       0.32  
Book value per common share (3)
  $ 57.90     $ 47.59     $ 57.90     $ 47.59  

(1)  
See computation of net operating income (loss) and net operating income (loss) per diluted common share on page 7.
(2)  
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.
(3)  
See computation of basic book value per common share on page 11.

 
- 3 -

 

Platinum Underwriters Holdings, Ltd.
Condensed Consolidated Balance Sheets – by Quarter
($ in thousands, except per share data)

   
December 31,
   
September 30,
   
June 30,
   
March 31,
   
December 31,
 
   
2012
   
2012
   
2012
   
2012
   
2011
 
Assets
                             
Investments:
                             
Fixed maturity securities
  $ 2,054,498     $ 2,293,094     $ 2,423,834     $ 2,743,760     $ 2,788,700  
Short-term investments
    172,801       165,741       167,778       216,047       588,834  
Cash and cash equivalents
    1,720,395       1,662,679       1,465,983       1,167,848       792,510  
Accrued investment income
    21,299       23,856       24,541       29,337       29,440  
Reinsurance premiums receivable
    128,517       150,775       145,132       148,126       159,387  
Reinsurance balances (prepaid and recoverable)
    6,560       4,335       4,538       7,393       14,662  
Funds held by ceding companies
    114,090       113,310       111,408       95,357       94,546  
Deferred acquisition costs
    28,112       29,189       27,620       28,203       28,779  
Reinsurance deposit asset
    50,693       -       -       -       -  
Other assets
    36,338       49,943       54,103       52,349       54,753  
Total assets
  $ 4,333,303     $ 4,492,922     $ 4,424,937     $ 4,488,420     $ 4,551,611  
                                         
Liabilities
                                       
Unpaid losses and loss adjustment expenses
  $ 1,961,282     $ 2,160,154     $ 2,229,603     $ 2,315,527     $ 2,389,614  
Unearned premiums
    113,960       122,150       114,759       121,553       121,164  
Debt obligations
    250,000       250,000       250,000       250,000       250,000  
Commissions payable
    64,849       67,489       64,304       62,083       62,773  
Other liabilities
    48,678       103,183       44,444       32,362       37,201  
Total liabilities
  $ 2,438,769     $ 2,702,976     $ 2,703,110     $ 2,781,525     $ 2,860,752  
                                         
Shareholders' Equity
                                       
Common shares
  $ 327     $ 328     $ 332     $ 348     $ 355  
Additional paid-in capital
    209,897       211,546       227,482       285,503       313,730  
Accumulated other comprehensive income
    137,690       150,387       148,562       140,458       146,635  
Retained earnings
    1,546,620       1,427,685       1,345,451       1,280,586       1,230,139  
Total shareholders' equity
  $ 1,894,534     $ 1,789,946     $ 1,721,827     $ 1,706,895     $ 1,690,859  
                                         
Total liabilities and shareholders' equity
  $ 4,333,303     $ 4,492,922     $ 4,424,937     $ 4,488,420     $ 4,551,611  
                                         
Book value per common share (1)
  $ 57.90     $ 54.60     $ 51.84     $ 49.00     $ 47.59  

(1)
Book value per common share is a non-GAAP financial measure as defined by Regulation G.  See computation of book value per common share on page 11.
 
 
- 4 -

 

Platinum Underwriters Holdings, Ltd.
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)
($ and amounts in thousands, except per share data)

   
Three Months Ended
   
Twelve Months Ended
 
   
December 31,
   
December 31,
   
December 31,
   
December 31,
 
   
2012
   
2011
   
2012
   
2011
 
Revenue
                       
Net premiums earned
  $ 144,621     $ 167,322     $ 566,496     $ 689,452  
Net investment income
    22,031       29,758       99,947       125,863  
Net realized gains on investments
    18,455       718       88,754       3,934  
Net impairment losses on investments
    (149 )     (14,746 )     (3,031 )     (22,370 )
Other income (expense)
    527       (193 )     (239 )     645  
Total revenue
    185,485       182,859       751,927       797,524  
                                 
Expenses
                               
Net losses and loss adjustment expenses
    (7,770 )     125,032       183,660       805,437  
Net acquisition expenses
    28,412       34,904       115,437       133,177  
Operating expenses
    23,808       14,168       80,453       63,179  
Net foreign currency exchange losses (gains)
    292       (294 )     1,055       (473 )
Net changes in fair value of derivatives
    -       (965 )     -       4,329  
Interest expense
    4,777       4,770       19,098       19,072  
Total expenses
    49,519       177,615       399,703       1,024,721  
Income (loss) before income taxes
    135,966       5,244       352,224       (227,197 )
Income tax expense (benefit)
    14,421       (1,820 )     24,996       (3,133 )
Net income (loss)
  $ 121,545     $ 7,064     $ 327,228     $ (224,064 )
                                 
Basic
                               
Weighted average common shares outstanding
    32,674       36,117       33,714       36,901  
Basic earnings (loss) per common share
  $ 3.71     $ 0.20     $ 9.67     $ (6.04 )
                                 
Diluted
                               
Adjusted weighted average common shares outstanding
    33,048       36,302       33,981       37,260  
Diluted earnings (loss) per common share (1)
  $ 3.67     $ 0.19     $ 9.60     $ (6.04 )
                                 
Comprehensive income (loss)
                               
Net income (loss)
  $ 121,545     $ 7,064     $ 327,228     $ (224,064 )
Other comprehensive income (loss), net of deferred taxes
    (12,697 )     19,797       (8,945 )     171,123  
Comprehensive income (loss)
  $ 108,848     $ 26,861     $ 318,283     $ (52,941 )

(1)  
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.
 
 
- 5 -

 
 
Platinum Underwriters Holdings, Ltd.
Condensed Consolidated Statements of Operations and Comprehensive Income – by Quarter
($ and amounts in thousands, except per share data)

   
Three Months Ended
 
   
December 31,
   
September 30,
   
June 30,
   
March 31,
   
December 31,
 
   
2012
   
2012
   
2012
   
2012
   
2011
 
Revenue
                             
Net premiums earned
  $ 144,621     $ 138,588     $ 145,075     $ 138,212     $ 167,322  
Net investment income
    22,031       23,209       26,155       28,552       29,758  
Net realized gains on investments
    18,455       22,982       24,978       22,339       718  
Net impairment losses on investments
    (149 )     (699 )     (1,113 )     (1,070 )     (14,746 )
Other income (expense)
    527       (96 )     (191 )     (479 )     (193 )
Total revenue
    185,485       183,984       194,904       187,554       182,859  
                                         
Expenses
                                       
Net losses and loss adjustment expenses
    (7,770 )     45,117       67,117       79,196       125,032  
Net acquisition expenses
    28,412       26,168       30,200       30,657       34,904  
Operating expenses
    23,808       19,966       19,696       16,983       14,168  
Net foreign currency exchange losses (gains)
    292       541       (310 )     532       (294 )
Net changes in fair value of derivatives
    -       -       -       -       (965 )
Interest expense
    4,777       4,775       4,774       4,772       4,770  
Total expenses
    49,519       96,567       121,477       132,140       177,615  
Income before income taxes
    135,966       87,417       73,427       55,414       5,244  
Income tax expense (benefit)
    14,421       2,553       5,895       2,127       (1,820 )
Net income
  $ 121,545     $ 84,864     $ 67,532     $ 53,287     $ 7,064  
                                         
Basic
                                       
Weighted average common shares outstanding
    32,674       32,996       33,914       35,291       36,117  
Basic earnings per common share
  $ 3.71     $ 2.56     $ 1.98     $ 1.50     $ 0.20  
                                         
Diluted
                                       
Adjusted weighted average common shares outstanding
    33,048       33,272       34,104       35,510       36,302  
Diluted earnings per common share (1)
  $ 3.67     $ 2.54     $ 1.97     $ 1.49     $ 0.19  
                                         
Comprehensive income
                                       
Net income
  $ 121,545     $ 84,864     $ 67,532     $ 53,287     $ 7,064  
Other comprehensive income (loss), net of deferred taxes
    (12,697 )     1,825       8,104       (6,177 )     19,797  
Comprehensive income
  $ 108,848     $ 86,689     $ 75,636     $ 47,110     $ 26,861  

(1)  
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.
 
 
- 6 -

 

Platinum Underwriters Holdings, Ltd.
Computation of Net Operating Income (Loss) and Net Operating Income (Loss) per Diluted Common Share
($ and amounts in thousands, except per share data)

   
Three Months Ended
   
Twelve Months Ended
 
   
December 31,
   
December 31,
   
December 31,
   
December 31,
 
   
2012
   
2011
   
2012
   
2011
 
Net income (loss) attributable to common shareholders
  $ 121,545     $ 7,064     $ 327,228     $ (224,064 )
Portion allocated to participating common shareholders (1)
    (265 )     (17 )     (1,076 )     1,189  
Net income (loss) allocated to common shareholders
  $ 121,280     $ 7,047     $ 326,152     $ (222,875 )
                                 
Adjustments for:
                               
Net realized gains on investments, net of tax
  $ (17,023 )   $ (718 )   $ (83,102 )   $ (4,556 )
Net impairment losses on investments, net of tax
    112       13,134       2,729       20,275  
Net foreign currency exchange losses (gains), net of tax
    264       (226 )     1,072       (487 )
Net operating income (loss) (2)
  $ 104,633     $ 19,237     $ 246,851     $ (207,643 )
                                 
Per diluted common share:
                               
Net income (loss)
  $ 3.67     $ 0.19     $ 9.60     $ (6.04 )
Adjustments for:
                               
Net realized gains on investments
    (0.52 )     (0.02 )     (2.45 )     (0.12 )
Net impairment losses on investments
    -       0.36       0.08       0.54  
Net foreign currency exchange losses (gains)
    0.01       -       0.03       (0.01 )
Net operating income (loss) per diluted common share (3)
  $ 3.16     $ 0.53     $ 7.26     $ (5.63 )
                                 
Adjusted weighted average common shares outstanding - diluted (4)
    33,048       36,302       33,981       36,901  
 
(1)  
Represents earnings attributable to holders of unvested restricted shares issued under the Company's share incentive plans that are considered to be participating securities.
(2)  
Net operating income (loss) is a non-GAAP measure as defined by Regulation G and represents net income (loss) after taxes excluding net realized gains and losses on investments, net impairment losses on investments and net foreign exchange gains and losses.
(3)  
Net operating income (loss) per diluted common share is also a non-GAAP measure and is calculated by dividing net operating income (loss) by diluted weighted average shares outstanding for the period.
(4)  
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.  The adjusted weighted average common shares outstanding - diluted for the twelve months ended December 31, 2011 was 37,260.
 
 
- 7 -

 
 
Platinum Underwriters Holdings, Ltd.
Key Ratios, Share Data, Ratings

   
As of and for the Three Months Ended
 
   
December 31,
   
September 30,
   
June 30,
   
March 31,
   
December 31,
 
   
2012
   
2012
   
2012
   
2012
   
2011
 
Key Ratios
                             
Combined ratio (%)
    25.4%       61.3%       76.3%       88.2%       102.2%  
Investable assets to shareholders' equity ratio
 
2.08:1
   
2.30:1
   
2.36:1
   
2.42:1
   
2.47:1
 
Debt to total capital (%)
    11.7%       12.3%       12.7%       12.8%       12.9%  
Net premiums written (annualized) to shareholders' equity
    0.28       0.33       0.33       0.34       0.36  
                                         
Share Data
                                       
Book value per common share (1)
  $ 57.90     $ 54.60     $ 51.84     $ 49.00     $ 47.59  
Common shares outstanding (000's)
    32,722       32,782       33,212       34,838       35,526  
                                         
Market Price Per Common Share
                                       
High
  $ 47.40     $ 43.08     $ 38.43     $ 37.64     $ 35.36  
Low
    40.89       37.58       34.97       32.94       27.53  
Close
  $ 46.00     $ 40.87     $ 38.10     $ 36.50     $ 34.11  
                                         
Industry Ratings
                                       
Financial Strength Ratings:
                                       
A.M. Best Company, Inc.
    A       A       A       A       A  
Standard & Poor's Ratings Services
    A-       A-       A-       A-       A-  
Counterparty Credit Ratings (senior unsecured):
                                       
A.M. Best Company, Inc.
 
bbb
   
bbb
   
bbb
   
bbb
   
bbb
 
Standard & Poor's Ratings Services
 
BBB
   
BBB
   
BBB
   
BBB
   
BBB
 
                                         
Supplemental Data
                                       
Total employees
    125       125       124       127       125  

(1)  
See computation of book value per common share on page 11.

 
- 8 -

 

Platinum Underwriters Holdings, Ltd.
Computation of Basic and Diluted Earnings (Loss) per Common Share
($ and amounts in thousands, except per share data)

   
Three Months Ended
   
Twelve Months Ended
 
   
December 31,
   
December 31,
 
   
2012
   
2011
   
2012
   
2011
 
Earnings (Loss)
                       
Basic and Diluted
                       
Net income (loss) attributable to common shareholders
  $ 121,545     $ 7,064     $ 327,228     $ (224,064 )
Portion allocated to participating common shareholders (1)
    (265 )     (17 )     (1,076 )     1,189  
Net income (loss) allocated to common shareholders
  $ 121,280     $ 7,047     $ 326,152     $ (222,875 )
                                 
Common Shares
                               
Basic
                               
Weighted average common shares outstanding
    32,674       36,117       33,714       36,901  
Diluted
                               
Weighted average common shares outstanding
    32,674       36,117       33,714       36,901  
Effect of dilutive securities:
                               
Common share options
    204       59       171       164  
Restricted share units
    170       126       96       195  
Adjusted weighted average common shares outstanding
    33,048       36,302       33,981       37,260  
                                 
Earnings (Loss) Per Common Share
                               
Basic earnings (loss) per common share
  $ 3.71     $ 0.20     $ 9.67     $ (6.04 )
Diluted earnings (loss) per common share (2)
  $ 3.67     $ 0.19     $ 9.60     $ (6.04 )

(1)  
Represents earnings attributable to holders of unvested restricted shares issued under the Company's share incentive plans that are considered to be participating securities.
(2)  
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.
 
 
- 9 -

 
 
Platinum Underwriters Holdings, Ltd.
Computation of Basic and Diluted Earnings per Common Share – by Quarter
($ and amounts in thousands, except per share data)

   
Three Months Ended
 
   
December 31,
   
September 30,
   
June 30,
   
March 31,
   
December 31,
 
   
2012
   
2012
   
2012
   
2012
   
2011
 
Earnings
                             
Basic and Diluted
                             
Net income attributable to common shareholders
  $ 121,545     $ 84,864     $ 67,532     $ 53,287     $ 7,064  
Portion allocated to participating common shareholders (1)
    (265 )     (234 )     (278 )     (208 )     (17 )
Net income allocated to common shareholders
  $ 121,280     $ 84,630     $ 67,254     $ 53,079     $ 7,047  
                                         
Common Shares
                                       
Basic
                                       
Weighted average common shares outstanding
    32,674       32,996       33,914       35,291       36,117  
Diluted
                                       
Weighted average common shares outstanding
    32,674       32,996       33,914       35,291       36,117  
Effect of dilutive securities:
                                       
Common share options
    204       179       142       135       59  
Restricted share units
    170       97       48       84       126  
Adjusted weighted average common shares outstanding
    33,048       33,272       34,104       35,510       36,302  
                                         
Earnings Per Common Share
                                       
Basic earnings per common share
  $ 3.71     $ 2.56     $ 1.98     $ 1.50     $ 0.20  
Diluted earnings per common share (2)
  $ 3.67     $ 2.54     $ 1.97     $ 1.49     $ 0.19  

(1)  
Represents earnings attributable to holders of unvested restricted shares issued under the Company's share incentive plans that are considered to be participating securities.
(2)  
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.
 
 
- 10 -

 

Platinum Underwriters Holdings, Ltd.
Book Value Per Common Share – by Quarter
($ and amounts in thousands, except per share data)

   
December 31,
   
September 30,
   
June 30,
   
March 31,
   
December 31,
 
   
2012
   
2012
   
2012
   
2012
   
2011
 
Price per share at period end
  $ 46.00     $ 40.87     $ 38.10     $ 36.50     $ 34.11  
                                         
Shareholders' equity
  $ 1,894,534     $ 1,789,946     $ 1,721,827     $ 1,706,895     $ 1,690,859  
Add: Assumed exercise of share options
    27,688       29,669       31,209       32,356       18,925  
Shareholders' equity - diluted
  $ 1,922,222     $ 1,819,615     $ 1,753,036     $ 1,739,251     $ 1,709,784  
                                         
Basic common shares outstanding (1)
    32,722       32,782       33,212       34,838       35,526  
Add: Management and directors' options (2)
    833       903       968       1,014       624  
Add: Directors' and officers' restricted share units
    536       515       406       405       321  
Diluted common shares outstanding
    34,091       34,200       34,586       36,257       36,471  
                                         
Book value per common share (3)
                                       
Book value per common share
  $ 57.90     $ 54.60     $ 51.84     $ 49.00     $ 47.59  
Fully converted book value per common share
  $ 56.39     $ 53.21     $ 50.69     $ 47.97     $ 46.88  
 
(1)
As of December 31, 2012, there were 32,722 common shares issued and outstanding.  Included in this number were 73 restricted shares issued but unvested.
(2)
As of December 31, 2012, these were options with a price below the closing share price of $46.00.
(3)
Book value per common share and fully converted book value per common share are non-GAAP financial measures as defined by Regulation G.

 
- 11 -

 

Platinum Underwriters Holdings, Ltd.
Condensed Consolidated Statements of Cash Flows
($ in thousands)

   
Three Months Ended
   
Twelve Months Ended
 
   
December 31,
2012
   
December 31,
2011
   
December 31,
2012
   
December 31,
2011
 
                         
Net cash provided by (used in) operating activities
  $ (146,368 )   $ (71,852 )   $ (165,337 )   $ (33,706 )
                                 
Net cash provided by (used in) investing activities
    216,909       (207,148 )     1,219,400       (24,211 )
                                 
Net cash provided by (used in) financing activities
    (6,696 )     (63,601 )     (121,912 )     (153,093 )
                                 
Effect of foreign currency exchange rate changes on cash
    (6,129 )     7,806       (4,266 )     15,643  
                                 
Net increase (decrease) in cash and cash equivalents
  $ 57,716     $ (334,795 )   $ 927,885     $ (195,367 )


 
- 12 -

 

Platinum Underwriters Holdings, Ltd.
Condensed Consolidated Statements of Cash Flows – by Quarter
($ in thousands)

   
Three Months Ended
 
   
December 31,
2012
   
September 30,
2012
   
June 30,
2012
   
March 31,
2012
   
December 31,
2011
 
                               
Net cash provided by (used in) operating activities
  $ (146,368 )   $ 40,216     $ (26,496 )   $ (32,689 )   $ (71,852 )
                                         
Net cash provided by (used in) investing activities
    216,909       170,213       388,556       443,722       (207,148 )
                                         
Net cash provided by (used in) financing activities
    (6,696 )     (20,788 )     (62,533 )     (31,895 )     (63,601 )
                                         
Effect of foreign currency exchange rate changes on cash
    (6,129 )     7,055       (1,392 )     (3,800 )     7,806  
                                         
Net increase (decrease) in cash and cash equivalents
  $ 57,716     $ 196,696     $ 298,135     $ 375,338     $ (334,795 )


 
- 13 -

 

Platinum Underwriters Holdings, Ltd.
Segment Reporting – Three Month Summary
($ in thousands)

   
Three Months Ended December 31, 2012
   
Three Months Ended December 31, 2011
 
   
Property and Marine
   
Casualty
   
Finite Risk
   
Total
   
Property and Marine
   
Casualty
   
Finite Risk
   
Total
 
Net premiums written
  $ 61,458     $ 67,676     $ 4,767     $ 133,901     $ 76,836     $ 74,547     $ 2,335     $ 153,718  
                                                                 
Net premiums earned
    67,538       72,284       4,799       144,621       81,980       82,785       2,557       167,322  
Net losses and loss adjustment expenses
    47,200       (57,482 )     2,512       (7,770 )     76,194       52,459       (3,621 )     125,032  
Net acquisition expenses
    9,308       16,415       2,689       28,412       11,645       19,251       4,008       34,904  
Other underwriting expenses
    9,190       6,614       358       16,162       6,341       4,541       223       11,105  
Segment underwriting income (loss)*
  $ 1,840     $ 106,737     $ (760 )     107,817     $ (12,200 )   $ 6,534     $ 1,947       (3,719 )
                                                                 
Net investment income
                            22,031                               29,758  
Net realized gains on investments
                            18,455                               718  
Net impairment losses on investments
                            (149 )                             (14,746 )
Other income (expense)
                            527                               (193 )
Corporate expenses not allocated to segments
                            (7,646 )                             (3,063 )
Net foreign currency exchange (losses) gains
                            (292 )                             294  
Net changes in fair value of derivatives
                            -                               965  
Interest expense
                            (4,777 )                             (4,770 )
Income (loss) before income taxes
                          $ 135,966                             $ 5,244  
                                                                 
Underwriting ratios:*
                                                               
Net loss and loss adjustment expense
    69.9 %     (79.5 %)