Additional Information
A copy of this press release, the Company’s financial supplement,
summary details of Primus Financial’s consolidated credit swap portfolio
as of
Economic Results
In managing its business and assessing its profitability from a strategic and financial planning perspective, the Company believes it is appropriate to consider both its U.S. GAAP net income (loss) available to common shares as well as certain non-GAAP financial measures called “Economic Results”. We define Economic Results as GAAP net income (loss) available to common shares, adjusted as follows:
The Company believes that quarterly fluctuations in the fair market value of Primus Financial’s consolidated credit swap portfolio have little or no effect on the Company's business operations and that Economic Results provides a useful, alternative view of the Company’s economic performance.
About
Forward-Looking Statements
Some of the statements included in this press release and other
statements
Primus Guaranty, Ltd. |
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June 30, | December 31, | ||||||||
2013 | 2012 | ||||||||
Assets | |||||||||
Cash and cash equivalents |
$ |
41,612 | $ | 51,860 | |||||
Investments, at fair value | 113,395 | 213,107 | |||||||
Restricted cash and investments | 104,816 | 144,077 | |||||||
Accrued interest and premiums | 1,788 | 3,210 | |||||||
Unrealized gain on credit swaps, at fair value | 78 | 721 | |||||||
Debt issuance costs, net | - | 510 | |||||||
Other assets (includes $2,034 and $2,701 at fair value as of | |||||||||
June 30, 2013 and December 31, 2012, respectively) | 2,899 | 4,019 | |||||||
Total assets | $ | 264,588 | $ | 417,504 | |||||
Liabilities and Equity | |||||||||
Liabilities | |||||||||
Accounts payable and accrued expenses | $ | 3,724 | $ | 5,202 | |||||
Unrealized loss on credit swaps, at fair value | 14,827 | 43,682 | |||||||
Payable for credit events | - | 1,280 | |||||||
Long-term debt | - | 57,700 | |||||||
Other liabilities (includes $2,018 and $2,205 at fair value as of | |||||||||
June 30, 2013 and December 31, 2012, respectively) | 2,380 | 2,721 | |||||||
Total liabilities | $ | 20,931 | $ | 110,585 | |||||
Equity | |||||||||
Common shares, $0.08 par value, 62,500,000 shares authorized, | |||||||||
24,123,564 and 26,125,564 shares issued and outstanding | |||||||||
at June 30, 2013 and December 31, 2012, respectively | 1,930 | 2,090 | |||||||
Additional paid-in capital | 182,803 | 203,232 | |||||||
Accumulated other comprehensive income | 1,016 | 2,723 | |||||||
Retained earnings | 57,908 | 22,619 | |||||||
Total shareholders’ equity of Primus Guaranty, Ltd | 243,657 | 230,664 | |||||||
Preferred securities of subsidiary | - | 76,255 | |||||||
Total equity | 243,657 | 306,919 | |||||||
Total liabilities and equity | $ | 264,588 | $ | 417,504 | |||||
Primus Guaranty, Ltd. |
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Three Months Ended |
Six Months Ended |
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2013 | 2012 | 2013 | 2012 | ||||||||||||
Revenues | |||||||||||||||
Net credit swap revenue |
$ |
16,524 |
$ |
823 |
$ |
36,832 |
$ |
266,940 | |||||||
Interest income | 1,176 | 2,501 | 2,860 | 5,049 | |||||||||||
Gain on retirement of long-term debt | - | 1,097 | - | 1,425 | |||||||||||
Other income | 621 | 152 | 1,402 | 190 | |||||||||||
Total revenues | 18,321 | 4,573 | 41,094 | 273,604 | |||||||||||
Expenses | |||||||||||||||
Compensation and employee benefits | 740 | 1,944 | 2,338 | 3,831 | |||||||||||
Professional and legal fees | 330 | 361 | 649 | 798 | |||||||||||
Interest expense | - | 2,236 | 692 | 4,544 | |||||||||||
Other | 444 | 1,035 | 995 | 1,848 | |||||||||||
Total expenses | 1,514 | 5,576 | 4,674 | 11,021 | |||||||||||
Income from continuing operations before provision | |||||||||||||||
for income taxes | 16,807 | (1,003 | ) | 36,420 | 262,583 | ||||||||||
Provision for income taxes | - | 8 | 19 | 22 | |||||||||||
Income from continuing operations, net of tax | 16,807 | (1,011 | ) | 36,401 | 262,561 | ||||||||||
Income from discontinued operations, net of tax | 154 | 3,256 | 238 | 3,633 | |||||||||||
Net income | 16,961 | 2,245 | 36,639 | 266,194 | |||||||||||
Less: | |||||||||||||||
Distributions on preferred securities of subsidiary | 578 | 599 | 1,350 | 1,530 | |||||||||||
Net income available to common shares | $ | 16,383 | $ | 1,646 | $ | 35,289 | $ | 264,664 | |||||||
Income per common share: | |||||||||||||||
Basic: | |||||||||||||||
Income from continuing operations | $ | 0.65 | $ | (0.05 | ) | $ | 1.37 | $ | 8.03 | ||||||
Income from discontinued operations | $ | - | $ | 0.10 | $ | 0.01 | $ | 0.11 | |||||||
Net income available to common shares | $ | 0.65 | $ | 0.05 | $ | 1.38 | $ | 8.14 | |||||||
Diluted: | |||||||||||||||
Income from continuing operations | $ | 0.65 | $ | (0.05 | ) | $ | 1.37 | $ | 8.01 | ||||||
Income from discontinued operations | $ | - | $ | 0.10 | $ | 0.01 | $ | 0.11 | |||||||
Net income available to common shares | $ | 0.65 | $ | 0.05 | $ | 1.38 | $ | 8.12 | |||||||
Weighted average common shares outstanding: | |||||||||||||||
Basic | 25,125 | 31,429 | 25,625 | 32,935 | |||||||||||
Diluted | 25,126 | 31,488 | 25,634 | 33,004 | |||||||||||
Note: Basic and diluted net income available to common shares for
Regulation G and Other Disclosure
Economic
Results
(Unaudited)
In managing its business and assessing its profitability from a strategic and financial planning perspective, the Company believes it is appropriate to consider both its U.S. GAAP net income (loss) available to common shares as well as certain non-GAAP financial measures called “Economic Results”. We define Economic Results as GAAP net income (loss) available to common shares, adjusted as follows:
The Company believes that quarterly fluctuations in the fair market value of Primus Financial’s consolidated credit swap portfolio have little or no effect on the Company's business operations and that Economic Results provides a useful, alternative view of the Company’s economic performance.
Economic Results per GAAP Diluted Share | |||||||||||||||||
(in 000's except per share amounts) |
Three Months Ended |
Six Months Ended |
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2013 | 2012 | 2013 | 2012 | ||||||||||||||
GAAP Net income available to common shares | $ | 16,383 | $ | 1,646 | $ | 35,289 | $ | 264,664 | |||||||||
Adjustments: | |||||||||||||||||
Change in unrealized fair value of credit swaps sold (gain) loss by Primus Financial | (12,255 | ) | 7,240 | (28,212 | ) | (252,389 | ) | ||||||||||
Amortization of realized gains from the early termination of credit swaps sold by Primus Financial | 2 | 2 | 4 | 4 | |||||||||||||
Net adjustment in provision for CDS on ABS credit events upon termination or principal write-down of credit swaps | - | 286 | 73 | 2,357 | |||||||||||||
Economic Results | $ | 4,130 | $ | 9,174 | $ | 7,154 | $ | 14,636 | |||||||||
Economic Results earnings per GAAP diluted share | $ | 0.16 | $ | 0.29 | $ | 0.28 | $ | 0.55 | |||||||||
Economic Results weighted average common shares - GAAP diluted | |||||||||||||||||
25,126 | 31,488 | 25,634 | 33,004 | ||||||||||||||
Note: Economic Results earnings per GAAP diluted share for the
six months ended June 30, 2012 includes the impact of a $3.5
million gain that resulted from |
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Economic Results Book Value per Share | |||||||||||||||||
(in 000's except per share amounts) | |||||||||||||||||
June 30, | December 31, | ||||||||||||||||
2013 | 2012 | ||||||||||||||||
GAAP Shareholders' equity of Primus Guaranty, Ltd. | $ | 243,657 | $ | 230,664 | |||||||||||||
Adjustments: | |||||||||||||||||
Accumulated other comprehensive (income) loss | (1,016 | ) | (2,723 | ) | |||||||||||||
Unrealized fair value of credit swaps sold (gain) loss by Primus Financial | 14,749 | 42,961 | |||||||||||||||
Realized gains from early termination of credit swaps sold by Primus Financial | (33,574 | ) | (33,574 | ) | |||||||||||||
Amortized realized gains from the early termination of credit swaps sold by Primus Financial | 33,571 | 33,567 | |||||||||||||||
Provision for CDS on ABS credit events | (4,483 | ) | (4,556 | ) | |||||||||||||
Economic Results Shareholders' Equity | $ | 252,904 | $ | 266,339 | |||||||||||||
Economic Results book value per share issued and outstanding | $ | 10.48 | $ | 10.19 | |||||||||||||
GAAP book value per share issued and outstanding | $ | 10.10 | $ | 8.83 | |||||||||||||
Common shares issued and outstanding | 24,124 | 26,126 |
Source:
Primus Guaranty, Ltd.
Nicole Stansell, 212-697-1992
investorrelations@primusguaranty.com