<PAGE> 1
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
------------------------
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER 0-23625
ANNUITY AND LIFE RE (HOLDINGS), LTD.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
BERMUDA NOT APPLICABLE
(STATE OR OTHER JURISDICTION OF (IRS EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
</TABLE>
CUMBERLAND HOUSE, VICTORIA STREET, HAMILTON, BERMUDA
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
441-296-7667
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes [X] No [ ]
The number of the Registrant's Common Shares (par value $1.00 per share)
outstanding as of November 12, 1998 was 25,499,999.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
INDEX TO FORM 10-Q
PART I -- FINANCIAL INFORMATION
<TABLE>
<CAPTION>
PAGE
-----
<S> <C> <C>
Item 1. Unaudited Consolidated Financial Statements
Consolidated Balance Sheets
3
September 30, 1998 and December 31, 1997....................
Consolidated Statements of Operations
4
Three and Nine Months ended September 30, 1998..............
Consolidated Statements of Comprehensive Income
5
Three and Nine Months ended September 30, 1998..............
Consolidated Statements of Cash Flows
6
Three and Nine Months ended September 30, 1998..............
Consolidated Statements of Changes in Stockholders' Equity
7
Three and Nine Months ended September 30, 1998..............
8-9
Notes to Unaudited Consolidated Financial Statements........
Item 2. Management's Discussion and Analysis of
10-12
Financial Condition and Results of Operations...............
PART II -- OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K............................ 12
Signatures........................................................... 12
Exhibits.............................................................
</TABLE>
2
<PAGE> 3
ANNUITY AND LIFE RE (HOLDINGS), LTD.
CONSOLIDATED BALANCE SHEETS
UNAUDITED
(EXPRESSED IN UNITED STATES DOLLARS)
<TABLE>
<CAPTION>
SEPTEMBER 30, 1998 DECEMBER 31, 1997
------------------ -----------------
<S> <C> <C>
ASSETS
Cash and cash equivalents................................ $ 14,554,274 $250,000
Fixed maturity investments, available for sale, at fair
value (amortized cost of $341,963,820 at September 30,
1998: December 31, 1997: $nil)........................ 349,496,258 --
Funds withheld at interest............................... 983,216,793 --
Accrued investment income................................ 4,781,291 --
Receivable for investments sold.......................... 1,009,112 --
Deferred policy acquisition costs........................ 127,981,918 --
Reinsurance receivables.................................. 21,422,575 --
Other assets............................................. 390,781 233,000
-------------- --------
Total Assets..................................... $1,502,853,002 $483,000
============== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Reserves for future policy benefits...................... $ 19,831,500 $ --
Interest-sensitive contracts liabilities................. 1,057,701,804 --
Other reinsurance liabilities............................ 53,496,907 --
Accounts payable and accrued expenses.................... 858,127 233,000
-------------- --------
Total Liabilities................................ $1,131,888,338 $233,000
-------------- --------
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; 25,499,999 shares outstanding;
1997 -- 12,000)....................................... 25,499,999 12,000
Additional paid-in capital............................... 329,513,726 238,000
Notes receivable from stock sales........................ (1,367,690) --
Accumulated other comprehensive income................... 7,532,438 --
Retained earnings........................................ 9,786,191 --
-------------- --------
Total Stockholders' Equity....................... $ 370,964,664 $250,000
-------------- --------
Total Liabilities and Stockholders' Equity....... $1,502,853,002 $483,000
============== ========
</TABLE>
See accompanying notes to consolidated financial statements.
3
<PAGE> 4
ANNUITY AND LIFE RE (HOLDINGS), LTD.
CONSOLIDATED STATEMENTS OF OPERATIONS
UNAUDITED
(EXPRESSED IN UNITED STATES DOLLARS)
<TABLE>
<CAPTION>
THREE MONTHS NINE MONTHS
ENDED ENDED
SEPTEMBER 30, 1998 SEPTEMBER 30, 1998
------------------ ------------------
<S> <C> <C>
REVENUES
Net premiums............................................. $15,027,750 $15,027,750
Investment income, net of related expenses............... 5,366,566 9,666,181
Net realized investment gains............................ 1,018,990 1,167,664
----------- -----------
Total Revenues................................... $21,413,306 $25,861,595
----------- -----------
BENEFITS AND EXPENSES
Claims and policy benefits............................... $ 8,399,500 $ 8,399,500
Policy acquisition costs and other insurance expenses.... 5,162,175 5,162,175
Operating expenses....................................... 1,191,465 2,444,690
Organizational expenses.................................. -- 69,039
----------- -----------
Total Benefits and Expenses........................... $14,753,140 $16,075,404
----------- -----------
Net Income............................................ $ 6,660,166 $ 9,786,191
=========== ===========
NET INCOME PER COMMON SHARE (NOTE 3):
Basic.................................................... $ 0.26 $ 0.44
Diluted.................................................. $ 0.25 $ 0.42
</TABLE>
See accompanying notes to consolidated financial statements
4
<PAGE> 5
ANNUITY AND LIFE RE (HOLDINGS), LTD.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
UNAUDITED
(EXPRESSED IN UNITED STATES DOLLARS)
<TABLE>
<CAPTION>
THREE MONTHS NINE MONTHS
ENDED ENDED
SEPTEMBER 30, 1998 SEPTEMBER 30, 1998
------------------ ------------------
<S> <C> <C>
Net Income for period...................................... $ 6,660,166 $ 9,786,191
Other comprehensive income;
Unrealized holding gains on securities arising during
period................................................... 6,620,084 7,532,438
----------- -----------
Total Comprehensive income....................... $13,280,250 $17,318,629
=========== ===========
</TABLE>
See accompanying notes to consolidated financial statements
5
<PAGE> 6
ANNUITY AND LIFE RE (HOLDINGS), LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
UNAUDITED
(EXPRESSED IN UNITED STATES DOLLARS)
<TABLE>
<CAPTION>
THREE MONTHS NINE MONTHS
ENDED ENDED
SEPTEMBER 30, 1998 SEPTEMBER 30, 1998
------------------ ------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income................................................. $ 6,660,166 $ 9,786,191
Adjustments to reconcile net income to cash flow
from operating activities:
Net realized investment gains.............................. (1,018,990) (1,167,664)
Changes in:
Accrued investment income.................................. (143,956) (4,781,291)
Reinsurance receivables.................................... (21,422,575) (21,422,575)
Other assets............................................... (133,184) (157,781)
Reserves for future policy benefits........................ 19,831,500 19,831,500
Accounts payable........................................... 349,689 625,127
------------- ------------------
Net cash provided by operating activities................ 4,122,650 2,713,507
------------- ------------------
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sales of fixed maturity securities........... 124,415,991 285,078,492
Purchase of fixed maturity securities...................... (171,905,715) (626,907,138)
Net sales of short term investments........................ 51,506,706 --
------------- ------------------
Net cash provided (used) by investing activities......... 4,016,982 (341,828,646)
------------- ------------------
CASH FLOWS FROM FINANCING ACTIVITIES
Net proceeds from sale of company stock.................... -- 353,419,413
------------- ------------------
Net cash provided by financing activities................ -- 353,419,413
------------- ------------------
Increase in cash and cash equivalents...................... 8,139,632 14,304,274
Cash and cash equivalents, beginning of period............. 6,414,642 250,000
------------- ------------------
Cash and cash equivalents, end of period................... $ 14,554,274 $ 14,554,274
============= ==================
</TABLE>
See accompanying notes to consolidated financial statements.
6
<PAGE> 7
ANNUITY AND LIFE RE (HOLDINGS), LTD.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
UNAUDITED
(EXPRESSED IN UNITED STATES DOLLARS)
<TABLE>
<CAPTION>
THREE MONTHS NINE MONTHS
ENDED ENDED
SEPTEMBER 30, 1998 SEPTEMBER 30, 1998
------------------ ------------------
<S> <C> <C>
PREFERRED SHARES PAR VALUE $1.00
Balance at beginning and end of period..................... $ -- $ --
------------ ------------
COMMON SHARES PAR VALUE $1.00
Balance of beginning of period............................. $ 25,499,999 $ 12,000
Issuance of shares......................................... -- 25,499,999
Retirement of shares....................................... -- (12,000)
------------ ------------
Balance at end of period................................. $ 25,499,999 $ 25,499,999
------------ ------------
ADDITIONAL PAID-IN CAPITAL
Balance at beginning of period............................. $329,513,726 $ 238,000
Issuance of shares......................................... -- 334,049,964
Direct equity offering expenses............................ -- (4,774,238)
------------ ------------
Balance at end of period................................. $329,513,726 $329,513,726
------------ ------------
NOTES RECEIVABLE FROM STOCK SALES
Balance at beginning of period............................. $ (1,344,312) $ --
Notes issued............................................... -- (1,325,000)
Accrued interest during period............................. (23,378) (42,690)
------------ ------------
Balance at end of period................................. $ (1,367,690) $ (1,367,690)
------------ ------------
ACCUMULATED OTHER COMPREHENSIVE INCOME
Balance at beginning of period............................. $ 912,354 $ --
Net unrealized holding gains on securities................. 6,620,084 7,532,438
------------ ------------
Balance at end of period................................. $ 7,532,438 $ 7,532,438
------------ ------------
RETAINED EARNINGS
Balance at beginning of period............................. $ 3,126,025 $ --
Net income................................................. 6,660,166 9,786,191
------------ ------------
Balance at end of period................................. 9,786,191 9,786,191
------------ ------------
Total Stockholders' Equity....................... $370,964,664 $370,964,664
============ ============
</TABLE>
See accompanying notes to consolidated financial statements.
7
<PAGE> 8
ANNUITY AND LIFE RE (HOLDINGS), LTD.
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
1. ORGANIZATION
Annuity and Life Re (Holdings), Ltd. ("Holdings") was incorporated on
December 2, 1997 under the laws of Bermuda to provide annuity and life
reinsurance to insurers and reinsurers through its wholly-owned subsidiary,
Annuity and Life Reassurance, Ltd. ("Annuity Reassurance" and, together with
Holdings, the "Company"). Annuity Reassurance is licensed under the insurance
laws of Bermuda as a long term insurer.
2. BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements of the Company
have been prepared in accordance with generally accepted accounting principles
for interim financial information and in accordance with the instructions as to
Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all
of the information and footnotes required by generally accepted accounting
principles for complete financial statements. These consolidated financial
statements should be read in conjunction with the audited consolidated financial
statements and notes thereto contained in the Company's Registration Statement
(File No. 333-43301) dated April 8, 1998. In the opinion of management, all
adjustments considered necessary for a fair presentation have been included in
these financial statements.
It should be noted that, in view of the Company's limited operating
history, the financial data included herein is not necessarily indicative of the
results of operations or financial condition of the Company in the future.
During the period from the date of its inception to December 31, 1997, the
Company did not incur any income or expenses that are required to be reported in
a statement of income or a statement of cash flows under United States generally
accepted accounting principles. Therefore, consolidated statements of income and
cash flows have not been presented for that comparative fiscal period.
3. EARNINGS PER SHARE
The following table sets forth the computation of basic and diluted
earnings per share. The Company was nominally capitalized with 12,000 common
shares of par value $1.00 each during the period from its incorporation to the
date of the initial public offering and did not commence operations until April
17, 1998. For this reason the calculation of earnings per share for the nine
months ended September 30, 1998 is based upon the earnings and number of shares
outstanding since April 17, 1998, the effective date of the public offering, as
this is the most meaningful presentation in the opinion of management.
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, 1998 SEPTEMBER 30, 1998
------------------ ------------------
<S> <C> <C>
Net Income....................................... $ 6,660,166 $10,235,177
Weighted average number of common shares
outstanding.................................... 25,499,999 23,270,491
Weighted average number of common shares
outstanding including shares issuable from
exercise of options and warrants............... 26,629,834 24,574,727
Earnings per share............................... $0.26 $0.44
Earnings per share assuming dilution............. $0.25 $0.42
</TABLE>
4. COMPREHENSIVE INCOME
In June 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards Board ("SFAS") No. 130, "Reporting Comprehensive
Income", effective for years beginning after December 15, 1997. SFAS No. 130
establishes standards for reporting and display of comprehensive income and its
components (revenues, expenses, gains and losses) in a full set of
general-purpose financial statements.
8
<PAGE> 9
ANNUITY AND LIFE RE (HOLDINGS), LTD.
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
The most significant items of comprehensive income are net income, the change in
unrealized gains and losses on securities, and the change in foreign currency
translation. The adoption of FAS No. 130 does not affect results of operations
or financial position, but affects their presentations and disclosure. The
Company has adopted SFAS No. 130 as of January 1, 1998.
5. ORGANIZATIONAL EXPENSES
All formation and organization costs incurred have been expensed in the
nine-month period ending September 30, 1998.
6. STOCKHOLDERS' EQUITY
On April 17, 1998 the Company completed an initial public offering of
19,640,579 common shares; total proceeds received net of underwriting discounts
and commissions were $276,932,164. Simultaneous with the initial closing of the
public offering, direct sales of 5,859,420 common shares and 397,500 Class B
warrants were made to strategic investors, certain members of the Board of
Directors and Company management; total net proceeds were $82,617,806.
At December 31, 1997 all outstanding common shares of the Company were
owned by the Annuity Re Purpose Trust, a Bermuda trust. The Trust was
established for the sole purpose of providing the initial capitalization to the
Company. Subsequent to the initial closing of the initial public offering of the
Company's common shares on April 17, 1998, the Purpose Trust sold such common
shares to the Company for an aggregate purchase price of $12,000 and such common
shares were then canceled.
At September 30, 1998 total capitalization of the Company after deducting
the offering costs incurred directly by the Company of $4,774,238 and related
loans to management in the amount of $1,367,690 was $370,964,664. The net
proceeds from the offering were used to provide working capital and to
capitalize the operating subsidiary, Annuity Reassurance, in support of its
reinsurance underwriting capacity with all funds being invested in accordance
with the Company's investment guidelines.
7. ACCOUNTING STANDARDS
In June 1997, the Financial Accounting Standards Board (FASB) issued SFAS
No. 131, "Disclosure about Segments of an Enterprise and Related Information",
which is effective for the years beginning after December 15, 1997. SFAS No. 131
requires that a public company report financial and descriptive information
about its reportable operating segments pursuant to criteria that may differ
from current accounting practice.
Operating segments, as defined, are components of an enterprise about which
separate financial information is available that is evaluated regularly by the
chief operating decision-maker in deciding how to allocate resources and in
assessing performance. The adoption of SFAS No. 131 will not affect the
Company's results of operations or financial position, but may affect the
disclosure of segment information. The Company plans to adopt SFAS No. 131
during 1998, however SFAS No. 131 need not be applied to interim financial
information in the initial year of its application.
In February 1998, the FASB issued SFAS No. 132 "Employers Disclosures about
Pensions and other Post Retirement Benefits". This Statement is effective for
fiscal years beginning after December 15, 1997. The Company considers it
unlikely that this Statement will affect its disclosures significantly.
In June 1998, the FASB issued SFAS No. 133 "Accounting for Derivative
Instruments and Hedging Activities". This Statement is effective for all fiscal
quarters of fiscal years beginning after June 15, 1999. The Company is currently
reviewing the impact of this standard on its financial reporting.
9
<PAGE> 10
ANNUITY AND LIFE RE (HOLDINGS), LTD.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
1. GENERAL
Annuity and Life Re (Holdings), Ltd. ("Holdings") was incorporated on
December 2, 1997 under the laws of Bermuda to provide annuity and life
reinsurance to insurers and reinsurers through its wholly-owned subsidiary,
Annuity and Life Reassurance, Ltd. ("Annuity Reassurance" and together with
Holdings, the "Company"). Annuity Reassurance is licensed under the insurance
laws of Bermuda as a long term insurer.
2. OPERATING RESULTS
For the initial six-month operating period ending September 30, 1998, the
Company had consolidated net Income of approximately $10,235,000 which is $0.44
per common share or $0.42 per common share on a fully diluted basis.
Consolidated net income before realized capital gains was approximately
$9,067,000. A loss of approximately $449,000 was incurred during the three month
period ended March 31, 1998 relating to expenses and costs incurred in the
formation and organization of the Company. Earnings per share for the nine
months ended September 30, 1998 is calculated using earnings and number of
shares outstanding since the effective date of the Company's initial public
offering.
With insurance operations beginning in mid April following completion of
the initial public offering and direct sales of its Common Shares, the Company
is in the early stages of a start up operation.
During the initial operating period of less than six months, management has
focused its efforts on developing its underwriting and pricing systems and
marketing the Company to the leading purchasers of annuity and life reinsurance.
The Company did execute a number of reinsurance contracts during the three month
period ending September 30, 1998 including two significant contracts -- a life
contract estimated to develop annual gross premiums of $59 million and an
annuity contract with an estimated $1 billion of deposits. The Company is
working on a number of other reinsurance programs which, if successfully
finalized, are expected to be recorded over the next several months.
Net Premiums. Net premium revenue was $15.0 million from contracts
executed in the three-month period ending September 30, 1998.
Net Investment Income. Net investment income during the six-month
operating period ending September 30, 1998 was $9.7 million. The average earned
yield rate on an annualized basis for this period was approximately 6.07%.
The net proceeds from the initial public offering were invested by the
Company in short term and fixed maturity securities in accordance with the
Company investment guidelines. The entire portfolio of fixed maturity securities
has been classified as available for sale.
Realized Investment Gains. Realized investment gains were $1.2 million
resulting from activity within the Company's investment portfolios. In addition,
at September 30, 1998 the Company's portfolio of fixed maturity securities had
unrealized gains of approximately $7.5 million which were included in Other
Comprehensive Income.
Claims and Policy Benefits. Claims and Policy Benefits were approximately
$8.4 million for the period ending September 30, 1998. This represents 56% of
the Net Premium.
The Company expects mortality to be fairly constant over long periods of
time, but it will fluctuate from period to period. Reserve levels will in part
be determined by the Company's experience and overall mortality trends.
Policy Acquisition and Other Insurance Expenses. Policy Acquisition and
Other Insurance Expenses, consisting primarily of allowances, were approximately
$5.2 million for the period ending September 30, 1998.
10
<PAGE> 11
This represents 34% of the Net Premium. Generally, policy acquisition costs and
other insurance expenses fluctuate with business volume and changes in product
mix.
Other Operating Expenses. Operating expenses for the period ending
September 30, 1998 were approximately $2.4 million and are in line with the
Company's plan to be a low cost provider.
3. LIQUIDITY AND CAPITAL RESOURCES
On April 17, 1998 the Company completed an initial public offering of
19,640,579 common shares; total proceeds received net of underwriting discounts
and commissions were $276,932,164. Simultaneous with the initial closing of the
public offering, direct sales of 5,859,420 common shares and 397,500 Class B
warrants were made to strategic investors, certain members of the Board of
Directors and Company management; total net proceeds were $82,617,806.
At December 31, 1997 all outstanding common shares of the Company were
owned by the Annuity Re Purpose Trust, a Bermuda trust. The trust was
established for the sole purpose of providing the initial capitalization to the
Company. Subsequent to the closing of the initial public offering of the
Company's common shares on April 15, 1998, the Purpose Trust sold such common
shares to the Company for an aggregate purchase price of $12,000 and such common
shares were then cancelled.
At September 30, 1998 total capitalization of the Company after deducting
offering costs incurred directly by the Company of $4,774,238 and related loans
to management in the amount of $1,367,690 was $370,964,664, The net proceeds
were used to provide working capital and to capitalize the operating subsidiary,
Annuity Reassurance, in support of its reinsurance underwriting capacity with
all funds being invested in accordance with the Company's investment guidelines.
At the October 29, 1998 Board of Directors meeting, a stockholder dividend
of $.04 per share was declared. The continued payment of dividends is dependent
on the ability of Annuity and Life Reassurance, Ltd., to achieve satisfactory
underwriting and investment results.
The Company does not presently anticipate that it will incur any material
indebtedness in the ordinary course of its business other than obtaining letters
of credit as security for certain of its reinsurance agreements.
The Company currently has no material commitments for capital expenditures.
4. YEAR 2000
All of the Company's data processing and related systems were purchased
since April 17, 1998 and are fully compliant with Year 2000 requirements. The
Company does not expect to incur any material costs in connection with Year 2000
related issues.
However, the Company will be exposed to the risk that its third party
service providers and client companies may be exposed to Year 2000 related
problems. The Company has no direct control over the Year 2000 compliance
efforts of its third party service providers and client companies. The Company
is monitoring whether such parties will be Year 2000 compliant on a timely basis
and has received assurances that they will be. There can be no assurance,
however, that the Company's operations will not experience material disruptions
due to the failure of the Company's third party service providers or client
companies to become fully Year 2000 compliant in a timely manner or that such
failure will not otherwise have an adverse effect on the Company. The Company
will continue to monitor developments relating to the issue, including the
development of contingency plans for providing back-up services in the event of
a systems failure.
5. FORWARD-LOOKING AND CAUTIONARY STATEMENTS
The Company and its representatives may from time to time make written or
oral forward-looking statements, including those contained in the foregoing
Management's Discussion and Analysis. In order to take advantage of the "safe
harbor" provisions of the Private Securities Litigation Reform Act of 1995, the
Company is hereby identifying certain important factors which could cause the
Company's actual results, performance or achievement to differ materially from
those that may be contained in or implied by any
11
<PAGE> 12
forward-looking statement made by or on behalf of the Company. The factors that
could cause such forward-looking statements not to be realized include, without
limitation, acceptance in the market of the Company's reinsurance products;
pricing competition; the amount of underwriting capacity from time to time in
the market; general economic conditions and conditions specific to the
reinsurance and investment markets in which the Company operates; material
fluctuations in interest rate levels; regulatory changes and conditions; rating
agency policies and practices; claims development; and loss of key executives.
The Company cautions that the foregoing list of important factors is not
intended to be, and is not, exhaustive, The Company does not undertake to update
any forward-looking statement that may be made from time to time by or on behalf
of the Company.
PART II -- OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits -- The following exhibits are filed as part of this report on
Form 10-Q:
11 Computation of Earnings per share
27 Financial Data Schedule
(b) Reports on Form 8-K -- There were no reports on Form 8-K filed during
the period ended September 30, 1998.
12
<PAGE> 13
ANNUITY AND LIFE RE (HOLDINGS), LTD.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
<TABLE>
<C> <S> <C>
Annuity and Life Re (Holdings), Ltd.
Date: November 12, 1998 /s/ LAWRENCE S. DOYLE
------------------------------------------------------
Name: Lawrence S. Doyle
Title: President and Chief Executive Officer
(Principal Executive Officer)
Date: November 12, 1998 /s/ WILLIAM W. ATKIN
------------------------------------------------------
Name: William W. Atkin
Title: Chief Financial Officer and Treasurer
(Principal Accounting and Financial Officer)
</TABLE>
13
<PAGE> 1
EXHIBIT 11
ANNUITY AND LIFE RE (HOLDINGS), LTD.
STATEMENT OF COMPUTATION OF NET INCOME PER COMMON SHARE
UNAUDITED
(EXPRESSED IN UNITED STATES DOLLARS EXCEPT FOR SHARE AMOUNTS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, 1998 SEPTEMBER 30, 1998
-------------------------- --------------------------
BASIC DILUTED BASIC DILUTED
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net Income:........................... $ 6,660,116 $ 6,660,166 $10,235,177 $10,235,177
----------- ----------- ----------- -----------
Net Income available to common
shareholders........................ $ 6,660,166 $ 6,660,166 $10,235,177 $10,235,177
----------- ----------- ----------- -----------
Number of shares:
Weighted average shares
outstanding...................... 25,499,999 26,629,834 23,270,491 24,574,727
=========== =========== =========== ===========
Earnings per share:................... $ 0.26 $ 0.25 $ 0.44 $ 0.42
</TABLE>
- ---------------
Note: Earnings per share for the nine months ended September 30, 1998 is
calculated using earnings and the number of shares outstanding since April
17, 1998, the effective date of the Company's initial public offering.
14
<TABLE> <S> <C>
<ARTICLE> 7
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM (A) THE
CONSOLIDATED BALANCE SHEET AS OF SEPTEMBER 30, 1998 (UNAUDITED) AND THE
CONSOLIDATED STATEMENT OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30,
1998 (UNAUDITED) AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
(B) FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-30-1998
<DEBT-HELD-FOR-SALE> 349,496,258
<DEBT-CARRYING-VALUE> 0
<DEBT-MARKET-VALUE> 0
<EQUITIES> 0
<MORTGAGE> 0
<REAL-ESTATE> 0
<TOTAL-INVEST> 1,332,713,051
<CASH> 14,554,274
<RECOVER-REINSURE> 0
<DEFERRED-ACQUISITION> 127,981,918
<TOTAL-ASSETS> 1,502,853,002
<POLICY-LOSSES> 19,831,500
<UNEARNED-PREMIUMS> 0
<POLICY-OTHER> 0
<POLICY-HOLDER-FUNDS> 1,057,701,804
<NOTES-PAYABLE> 0
0
0
<COMMON> 25,499,999
<OTHER-SE> 345,464,665
<TOTAL-LIABILITY-AND-EQUITY> 1,502,853,002
15,027,750
<INVESTMENT-INCOME> 9,666,181
<INVESTMENT-GAINS> 1,167,664
<OTHER-INCOME> 0
<BENEFITS> 8,399,500
<UNDERWRITING-AMORTIZATION> 5,162,175
<UNDERWRITING-OTHER> 2,513,729
<INCOME-PRETAX> 9,786,191
<INCOME-TAX> 0
<INCOME-CONTINUING> 9,786,191
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 9,786,191
<EPS-PRIMARY> 0.44
<EPS-DILUTED> 0.42
<RESERVE-OPEN> 0
<PROVISION-CURRENT> 0
<PROVISION-PRIOR> 0
<PAYMENTS-CURRENT> 0
<PAYMENTS-PRIOR> 0
<RESERVE-CLOSE> 0
<CUMULATIVE-DEFICIENCY> 0
</TABLE>
