<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED FEBRUARY 29, 1996
Commission File Number 1-10804
EXEL LIMITED
-----------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Cayman Islands 98-0058718
------------------------ --------------------
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
Cumberland House, 1 Victoria Street, Hamilton, Bermuda HM 11
- - ------------------------------------------------------------
(Address of principal executive offices and zip code)
Registrant's telephone number, including area code (441) 292-8515
--------------
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 registrant's Ordinary Shares ($0.01 par value) outstanding as of
March 29, 1996 was 47,023,500 excluding 8,353,500 shares held in treasury.
<PAGE>
2
EXEL LIMITED
INDEX TO FORM 10-Q
Part I. FINANCIAL INFORMATION
-----------------------------
Page No.
-------
Item 1. Financial Statements:
Consolidated Balance Sheets
February 29, 1996 (unaudited) and
November 30, 1995 3
Consolidated Statements of Income
Three Months Ended February 29, 1996
and February 28, 1995 (unaudited) 5
Consolidated Statements of Cash Flows
Three Months Ended February 29, 1996
and February 28,1995 (unaudited) 6
Notes to Unaudited Consolidated
Financial Statements 8
Item 2. Management's Discussion and Analysis
of Results of Operations and
Financial Condition 10
Part II. OTHER INFORMATION
--------------------------
Item 6. Exhibits and Reports on Form 8-K 17
Signatures 18
<PAGE>
3
EXEL LIMITED
CONSOLIDATED BALANCE SHEETS
(U.S. dollars in thousands, except per share amounts)
<TABLE>
<CAPTION>
February 29, November 30,
1996 1995
------------- ------------
<S> <C> <C>
(Unaudited)
ASSETS
Investments:
Fixed maturities, at market............
value (amortized cost : 1996 -
$2,588,339;
1995 - $2,343,143)..................... $2,583,690 $2,434,470
Equity securities, at market...........
value (cost: 1996 - $522,180;
1995 - $652,847)....................... 660,507 838,132
Short-term investments, at market
value (amortized cost: 1996 - $182,777;
1995 - $82,696)........................ 182,774 82,693
------------ -----------
Total Investments 3,426,971 3,355,295
Cash and cash equivalents............... 606,327 673,433
Investment in affiliate
(cost: 1996 - $186,515; 1995 - $200,042) 367,714 351,669
Accrued investment income............... 45,577 53,149
Deferred acquisition costs.............. 34,013 40,954
Prepaid reinsurance premiums............ 39,955 2,438
Premiums receivable..................... 304,407 234,028
Reinsurance balances receivable 15,135 1,002
Other assets............................ 13,722 12,938
------------ -----------
Total Assets........................... $4,853,821 $4,724,906
============ ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Unpaid losses and loss expenses........ $1,998,319 $1,920,500
Unearned premium....................... 610,268 539,296
Premium received in advance............ 1,838 4,880
Accounts payable and accrued
liabilities........................... 29,917 17,806
Payable for investments purchased...... 177,594 236,291
------------ -----------
Total Liabilities...................... $2,817,936 $2,718,773
============ ===========
</TABLE>
<PAGE>
4
<TABLE>
<CAPTION>
February 29, November 30,
1996 1995
------------ ------------
(Unaudited)
<S> <C> <C>
Contingencies
Shareholders' Equity:
Ordinary shares (par value $0.01:
authorized, 999,990,000 shares;
issued and outstanding, 47,019,382 shares
(excluding 8,353,500 shares held in
treasury)
at February 29, 1996 and 47,275,395
shares
(excluding 8,000,000 shares held in
treasury)
at November 30, 1995................... 471 473
Contributed surplus.................... 298,177 295,209
Net unrealized appreciation on
investments........................... 144,898 283,289
Deferred compensation.................. (4,727) (1,657)
Retained earnings...................... 1,597,066 1,428,819
------------ -----------
Total shareholders' equity............. $2,035,885 $2,006,133
------------ -----------
Total liabilities and
shareholders' equity................... $4,853,821 $4,724,906
============ ===========
See accompanying notes to Consolidated Financial Statements.
</TABLE>
<PAGE>
5
EXEL LIMITED
CONSOLIDATED STATEMENTS OF INCOME
(U.S. dollars in thousands, except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended
February 29, February 28,
1996 1995
------------ -------------
(Unaudited)
<S> <C> <C>
Revenues:
Net premiums earned.................. $130,258 $130,746
Net investment income................ 47,773 50,170
Net realized gains (losses) on
sale of investments.................. 136,059 (6,874)
Equity in net earnings of affiliate.. 16,113 5,053
-------- --------
Total revenues....................... 330,203 179,095
-------- --------
Expenses:
Losses and loss expenses............. 104,206 102,279
Acquisition costs.................... 8,572 12,592
Administration expenses.............. 9,099 7,045
-------- --------
Total expenses....................... 121,877 121,916
Income before income tax expense...... 208,326 57,179
Income tax expense.................... 1,237 297
-------- --------
Net income............................ $207,089 $ 56,882
======== ========
Weighted average number of
ordinary shares and
ordinary shares equivalents
outstanding.......................... 47,802 53,735
Net income per ordinary
share and ordinary share equivalent $ 4.33 $ 1.06
Dividends declared per share.......... $ 0.40 $ 0.33
See accompanying notes to Consolidated Financial Statements.
</TABLE>
<PAGE>
6
EXEL LIMITED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(U.S. dollars in thousands)
<TABLE>
<CAPTION>
Three Months Ended
February 29, February 28,
1996 1995
------------- -------------
<S> <C> <C>
(Unaudited)
Cash flows from operating activities
Net income............................. $ 207,089 $ 56,882
Adjustments to reconcile net income
to net cash provided by operating
activities:
Net realized (gains) losses on sale of
investments............................ (136,059) 6,874
Unrealized gains on foreign exchange... - (1,145)
Amortization of premium on fixed
maturities............................ 1,131 977
Amortization of deferred compensation 314 434
Equity in earnings of affiliate net of
dividends received..................... (13,705) (5,053)
Unpaid losses and loss expenses........ 77,819 12,491
Unearned premiums...................... 70,972 7,327
Premiums received in advance........... (3,042) 3,229
Deferred acquisition costs............. 6,941 (1,023)
Prepaid reinsurance premiums........... (37,517) -
Premiums receivable.................... (70,379) 8,694
Reinsurance balances receivable........ (14,133) -
Accrued investment income 7,572 7,597
Accounts payable and accrued
liabilities........................... 12,111 (2,359)
---------- -----------
Total adjustments...................... (97,975) 38,043
Net cash provided by operating
activities 109,114 94,925
---------- -----------
Cash flows provided by (used in)
investing activities:
Proceeds from sale of fixed maturities
and short-term investments............. 2,108,284 574,141
Proceeds from redemption of fixed
maturities and short-term
investments............................ 40,500 69,000
</TABLE>
<PAGE>
7
<TABLE>
<CAPTION>
Three Months Ended
February 29, February 28,
1996 1995
------------ ------------
(Unaudited)
<S> <C> <C>
Proceeds from sale of equity securities 319,973 42,850
Purchases of fixed maturities and
short-term investments................. (2,506,587) (788,553)
Purchases of equity securities......... (100,549) (74,034)
Deferred gains on forward hedge
contracts............................. 2,203 8,610
Other assets........................... (784) (1,402)
------------ -----------
Net cash used in investing
activities............................. (136,960) (169,388)
------------ -----------
Cash flow (used in) provided by
financing
activities:
Dividends paid......................... (18,856) (17,654)
Issuance of shares..................... 126 126
Proceeds from exercise of options...... 1,625 810
Repurchase of treasury shares.......... (22,155) (9,599)
------------ -----------
Net cash used in financing activities (39,260) (26,317)
------------ -----------
Decrease in cash and cash
equivalents............................ (67,106) (100,780)
------------ -----------
Cash and cash equivalents - beginning
of period.............................. 673,433 456,176
------------ -----------
Cash and cash equivalents - end
of period.............................. $ 606,327 $ 355,396
============ ===========
See accompanying notes to Consolidated Financial Statements.
</TABLE>
<PAGE>
8
EXEL LIMITED
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
----------------------------------------------------
NOTE A - BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements of EXEL
Limited (the "Company") have been prepared in accordance with generally accepted
accounting principles for interim financial information and with the
instructions 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. In the
opinion of management, these unaudited financial statements reflect all
adjustments (consisting of normal recurring accruals) considered necessary for a
fair presentation of financial position and results of operations as of the end
of and for the periods presented. The results of operations for any interim
period are not necessarily indicative of the results for a full year. The
November 30, 1995 balance sheet data was derived from audited financial
statements, but does not include all disclosures required by generally accepted
accounting principles. For further information, refer to the consolidated
financial statements for the fiscal year ended November 30, 1995, and footnotes
thereto, included in the Company's Annual Report on Form 10-K (No. 1-10804).
<PAGE>
9
NOTE B - INVESTMENT IN AFFILIATE
Summarized condensed financial information of Mid Ocean Limited, a 28% owned
affiliate, which is accounted for by the equity method, is as follows (U.S.
dollars in thousands):
<TABLE>
<CAPTION>
Quarter ended January 31,
Income Statement Data 1996 1995
----------- -----------
<S> <C> <C>
(Unaudited)
Net premiums earned $ 102,106 $ 90,311
Net investment income 19,046 17,300
Net realized gains (losses) on sale
of
investments 9,181 (22,815)
Net income $ 57,814 $ 18,064
=========== ===========
Company's share of net income $ 16,113 $ 5,053
=========== ===========
January 31, October 31,
Balance Sheet Data 1996 1995
----------- -----------
(Unaudited)
Cash, investments and accrued $1,353,156 $1,275,588
interest
Other assets 563,274 379,920
----------- -----------
Total assets $1,916,430 $1,655,508
=========== ===========
Reserves for losses and loss expenses $ 353,679 $ 338,990
Reserves for unearned premiums 386,906 200,859
Other liabilities 149,405 133,072
Shareholders' equity 1,026,440 982,587
----------- -----------
Total liabilities and shareholders'
equity $1,916,430 $1,655,508
=========== ===========
Company's share of shareholders'
equity $ 286,069 $ 273,867
=========== ===========
</TABLE>
The Company received dividends from its affiliate of $2.4 million and $nil for
the quarters ended January 31, 1996 and 1995, respectively.
<PAGE>
10
EXEL LIMITED
------------
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
---------------------------------------
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
---------------------------------------------
Results of Operations for the Three Months Ended February 29,1996
-----------------------------------------------------------------
Compared to the Three Months Ended February 28, 1995
----------------------------------------------------
The following table presents an analysis of the Company's underwriting
revenues for the periods indicated:
<TABLE>
<CAPTION>
Three Months Ended
February 29, February 28,
1996 1995 % Change
------------ ------------ ---------
(unaudited)
<S> <C> <C> <C>
Gross premiums written $219,130 138,113 58.7%
Net premiums written 163,713 138,073 18.6
Net premiums earned 130,258 130,746 (0.4)
</TABLE>
The increase in gross premiums written in 1996 was predominantly due to the
growth in specialty reinsurance assumed (SRA), written primarily by the
Company's newly formed subsidiary, X.L. Reinsurance Company, Ltd. (XLRe). These
premiums are generally multi-year premiums reflecting net future year premiums
of $38 million of the total $41.2 million recognized in the quarter. Gross
premiums written adjusted for this multi-year effect was $177.9 million
compared to adjusted premiums for the 1995 quarter of $152.4 million, an
increase of 16.7%.
<PAGE>
11
The following table presents the split of gross premiums written by X.L.
Insurance Company, Ltd. (X.L.) and X.L. Europe Insurance (X.L.E.)and XLRe and
reflects the growth in SRA for the periods indicated, adjusted for the effects
of multi-year premiums:
<TABLE>
<CAPTION>
Three Months Ended
February 29, 1996 February 28, 1995
X.L. X.L.E. XLRe Total X.L. X.L.E. Total
------- ------ ------- ------- -------- ------ -------
(Unaudited)
<S> <C> <C> <C> <C> <C> <C> <C>
General liability 83,301 20,645 - 103,946 98,968 23,903 122,871
Directors and officers
liability 4,513 454 - 4,967 3,880 817 4,697
Professional liability 3,804 992 - 4,796 4,473 1,650 6,123
Property 3,787 - - 3,787 229 - 229
Speciality reinsurance
assumed 10,150 9,723 40,562 60,435 6,375 12,146 18,521
------- ------ ------- ------- -------- ------ -------
Annualized premiums 105,555 31,814 40,562 177,931 113,925 38,516 152,441
Multi-year premiums (28,400) 77 69,522 41,199 (14,559) 231 (14,328)
------- ------ ------- ------- -------- ------ -------
Gross premiums written 77,155 31,891 110,084 219,130 99,366 38,747 138,113
======= ====== ======= ======= ======== ====== =======
</TABLE>
XLRe is the primary writer of SRA. The SRA premiums written by X.L.
represent the culmination of specific deals where the negotiations commenced
prior to the incorporation of XLRe. SRA policyholders are few in number with
substantial multi-year premiums. These policies characteristically allow for
the return of significant levels of premiums in the event no losses are
incurred by the end of the policy term. Premiums assumed in the first quarter
are not indicative of future periods.
SRA premiums assumed by X.L.E. relates solely to reinsurance protection
provided to a Bermuda insurer who provides certificates of financial
responsibility to ship owners for compliance with the U.S. Oil Pollution Act of
1990. The decline in premiums over the comparative quarter in 1995 reflects the
development of the market where capacity was previously unavailable. It is
expected additional premiums will be assumed on this program throughout the
fiscal year, although at a level markedly lower than the first quarter.
<PAGE>
12
The Company's property line continues to establish itself and remains to
be the only other area of growth. The Company's traditional product lines,
general, directors and officers, and professional liability continue to feel
the impact of the tremendous competitive pressures from the U.S. domestic
insurance market. These pressures are clearly reflected in an increase in the
average attachment point from $74 million to $95 million and a decrease in the
business retention rate from 89% to 86% for the Company's traditional product
lines, for the three months ended February 28, 1995 and February 29, 1996
respectively.
The following table presents certain underwriting information with respect
to the business written by the Company for the periods indicated:
<TABLE>
<CAPTION>
Gross Net Net
Premiums Written Premiums written Premiums earned
------------------- ------------------- ------------------
Three Months Ended
Feb. 29, Feb. 28, Feb. 29, Feb.28, Feb. 29, Feb. 28,
1996 1995 1996 1995 1996 1995
--------- -------- --------- -------- -------- --------
(Unaudited)
<S> <C> <C> <C> <C> <C> <C>
General liability $104,341 $107,893 $ 50,168 $107,893 $ 82,167 $105,320
Directors and officers
liability 4,967 4,697 4,967 4,697 6,275 7,161
Professional liability 5,555 6,773 5,555 6,773 13,371 13,088
Property 5,810 229 4,566 189 4,897 2,269
Speciality reinsurance
assumed 98,457 18,521 98,457 18,521 23,548 2,908
-------- -------- -------- -------- -------- --------
219,130 138,113 163,713 138,073 130,258 130,746
Adjustment for multi-
year premium (41,199) 14,328 (41,199) 14,328 - -
Reinsurance ceded - - 54,173 - 16,963 -
-------- -------- -------- -------- -------- --------
Adjusted premiums $177,931 $152,441 $176,687 $152,401 $147,221 $130,746
======== ======== ======== ======== ======== ========
</TABLE>
Net premiums written for the quarter ended February 29, 1996 was affected
by a quota share reinsurance policy entered into for most general liability
risks written on a guaranteed cost form, with certain exclusions, effective
December 1, 1995. X.L. cedes 20% of these risks with total limits up to $100
million and 25% with total limits in excess of $100 million. Of the $54.2
million of the premiums ceded under this program, $35.5 million related to the
cession of the Company's unearned premiums at December 1 1995 to provide
reinsurance coverage protection on in force policies from this date. Net
premiums written adjusted for the general liability quota share and multi-year
premiums, would have increased 15.9%.
<PAGE>
13
Net earned premiums were impacted by the growth in SRA premiums less the
expense of premiums ceded under the new quota share arrangement. If the general
liability quota share program was excluded, net earned premiums would have
increased by 12.6%.
The following table presents an analysis of the Company's revenues from
its portfolio of investments and its investment in affiliate:
<TABLE>
<CAPTION>
Three Months Ended
February 29, February 28,
1996 1995 % Change
------------ ------------ --------
(unaudited)
<S> <C> <C> <C>
Net investment income $ 47,773 $50,170 (4.8%)
Net realized gains (losses) 136,059 (6,874) N/M
Equity in net earnings
of affiliate 16,113 5,053 N/M
</TABLE>
Net investment income for the first quarter in 1995 included unrealized
currency gains of $1.1 million compared to $nil for the comparative quarter in
1996, resulting in adjusted decline of 2.6%. The decrease in investment income
was caused by several factors. The U.S. bond market had remained strong for
most of the first quarter of 1996 keeping yields low, unlike the comparable
1995 quarter which was weaker resulting in higher yields. The equity component
of the total investment portfolio also increased to 19.3% from 17.6% as at
February 28, 1995. In addition, the Company has liquidated two fixed maturity
portfolio and one equity portfolio due to similarities in strategies between
managers, creating an influx of cash and the realization of significant gains.
From the realized proceeds, $250 million was used to capitalize XLRe.
Equity in net earnings in affiliate increased principally due to the
Company's equity share of realized gains of $2.6 million versus realized losses
of $6.4 million.
The following table sets forth the Company's combined ratios and the
components thereof for the periods indicated using U.S. generally accepted
accounting principles:
<PAGE>
14
<TABLE>
<CAPTION>
Three Months Ended
February 29, February 28,
1996 1995
------------- -------------
<S> <C> <C>
(unaudited)
Loss and loss expense ratio 80.0% 78.2%
Underwriting expense ratio 13.6% 15.0%
Combined ratio 93.6% 93.2%
</TABLE>
The increase in the loss and loss expense ratio reflects an increase in
the rate at which incurred but not reported reserves are established on the
Company's casualty lines of business, which commenced during the fourth quarter
of 1995. The higher ratio is reflective of continuing soft market conditions
which has required a degree of flexibility in premium rates.
The underwriting expense ratio decreased in the first quarter of 1996
compared to the same period of 1995 due to commissions earned on the new quota
share reinsurance program. Excluding this reinsurance arrangement, the
underwriting expense ratio for the said 1996 period would have been 14.9%.
Net income was $207.1 million or $4.33 per share and $56.9 million or
$1.06 per share for the quarters ended February 29, 1996 and February 28, 1995,
respectively, representing an increase of 308.5% per share. The increase in per
share amounts is largely attributable to realized investment gains of $130.7
million compared to losses of $6.9 million for the respective quarters.
Financial Condition and Liquidity
---------------------------------
As a holding company, the Company's assets consist primarily of its
investments in the stock of its subsidiaries and the Company's future cash
flows depend on the availability of dividends or other statutorily permissible
payments from its subsidiaries. In order to pay dividends, the amount of which
is limited to accumulated net realized profits, the Company's principal
subsidiary, X.L., must maintain certain minimum levels of statutory capital and
surplus, solvency and liquidity pursuant to Bermuda statutes and regulations.
At February 29, 1996, X.L. could have paid dividends in the amount of
approximately $1.1 billion. Neither the Company nor any of its subsidiaries
other than X.L. had any other restrictions preventing them from paying
dividends. No assurance, however, can be given that the Company or its
<PAGE>
15
subsidiaries will not be prevented from paying dividends in the future. The
Company's shareholders' equity at February 29, 1996 was $2.0 billion, of which
$1.6 billion was retained earnings.
At February 29, 1996, total investments and cash net of the payable for
investments purchased were $3.9 billion compared to $3.8 billion at November
30, 1995.
The Company's fixed income investments (including short-term investments
and cash and cash equivalents net of the payable for investments purchased) at
February 29, 1996 represented approximately 83% of invested assets and were
managed by several outside investment management firms with different
strategies. All fixed income securities are of investment grade and include
U.S. and non-U.S. sovereign government obligations and corporate and other
securities. Of the Company's fixed income portfolio, 76.6% is rated Aa or AA
or better by a nationally recognized rating agency or an investment manager.
Cash and cash equivalents net of the payable for investments purchased was
$428.7 million at February 29, 1996, compared to $437.3 million at November 30,
1995.
During the quarter ended February 29, 1996, the Company liquidated an
equity portfolio whose primary objective was to meet or exceed the performance
of the Standard & Poor's 500 Stock Index ("S&P 500"). The Company reinvested
these funds in a synthetic equity portfolio whereby S&P 500 stock index futures
are purchased with an exposure equal to the value of underlying fixed maturity
and short-term investments held in the portfolio. At February 29, 1996, the
Company held stock index futures with an exposure of $206 million.
The Company purchased a further 354,000 of its outstanding shares during
the quarter ended February 29, 1996, at a cost of $22.2 million, increasing its
treasury holding to 8.4 million shares. The Company has 2.6 million shares
remaining in its authorized share repurchase program.
In fiscal 1994, 1995 and in fiscal 1996 through February 29, the total
amount of losses paid by the Company was $138.7 million, $188.5 million and
$40.7 million, respectively.
Insurance practices and regulatory guidelines suggest that property and
casualty insurance companies maintain a ratio of net premiums written to
statutory capital and surplus of not greater than 3 to 1, with a lower ratio
considered to be more prudent for a company that insures the types of exposures
written by X.L. X.L. maintained a ratio of less than 0.9 to 1 for the year
ended November 30, 1995 and 0.5 to 1 (calculated on an annualized basis) for
the three months ended February 29, 1996. The decrease is reflective of a
decrease in multi-year contracts written, thereby impacting gross premiums
written and hence the ratio of net premiums written to statutory capital and
surplus and the new general liability quota share reinsurance program.
X.L. establishes reserves to provide for the estimated expenses of
settling claims, the general expenses of administering the claims adjustment
process and for losses incurred but not reported. X.L. calculates such
reserves by using actuarial and other reserving techniques to project the
estimated ultimate net liability for losses and loss expenses. No assurance
can be given that actual claims made and payments related thereto will not be
in excess of the amounts reserved.
Inflation can have an effect on the Company in that inflationary factors
can increase damage awards and potentially result in more claims exceeding
applicable minimum attachment points. The Company's underwriting philosophy is
to adjust premiums in response to inflation, although this may not always be
possible due to competitive pressures. Inflationary factors are considered in
determining the premium level on multi-year policies at the time the contracts
are written. In addition, the Company from time to time evaluates whether
minimum attachment points should be raised to take into account inflationary
factors; as of this date, no revisions to minimum attachment points have been
implemented.
<PAGE>
16
Outlook
-------
The Company believes competitive pressures will continue throughout fiscal
1996 and constrain growth in the Company's traditional product lines. However,
the Company believes specific opportunities will exist through the further
growth of the Company's property product line, XLRe and the recently announced
CIGNA Risk Solutions and X.L. Risk Solutions provided through a strategic
alliance between X.L. and CIGNA Property & Casualty. The alliance will offer
large commercial accounts a broad range of traditional property and casualty
protection and reinsurance placements from monoline coverages to a new multi-
line, long-term package focused on balance sheet protection. Combined limits of
up to $400 million and term limits up to $1 billion for multi-year programs of
three to five years will be available.
<PAGE>
17
EXEL LIMITED
PART II - OTHER INFORMATION
---------------------------
ITEM 6. - EXHIBITS AND REPORTS ON FORM 8-K
- - ------------------------------------------
(a) Exhibit 11. Statement regarding Computation of Per Share Earnings.
(b) The Company filed a Form 8-K on December 6, 1995 reporting the adoption
of a Shareholder Rights Plan. No other reports on Form 8-K were filed
during the three months ended February 29, 1996.
<PAGE>
18
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.
EXEL LIMITED
______________________
(Registrant)
March 29, 1996 /s/ Brian M. O'Hara
_______________________
Brian M. O'Hara
President and
Chief Executive Officer
March 29, 1996 /s/ Brian G. Walford
_______________________
Brian G. Walford
Executive Vice President and
Chief Financial Officer
<PAGE>
Exhibit 11
EXEL LIMITED
COMPUTATION OF EARNINGS PER ORDINARY SHARE AND
ORDINARY SHARE EQUIVALENT
<TABLE>
<CAPTION>
Three Months Ended
February 29, February 28,
1996 1995
(unaudited)
(U.S. dollars in thousands except
per share amounts)
<S> <C> <C>
(A) Earnings per ordinary
share and ordinary share
equivalent -- primary:
Weighted average shares
outstanding.............. 47,238 53,509
Average stock options
outstanding (net of
repurchased shares
under the treasury
stock method)............ 564 266
-------- -------
Weighted average ordinary
shares and ordinary
share equivalents
outstanding.............. 47,802 53,735
======== =======
Net income:
Actual net income........ $207,089 $56,882
Assumed earnings
on excess option
proceeds............... - -
-------- -------
Adjusted net income........ $207,089 $56,882
======== =======
Earnings per ordinary
share and ordinary
share equivalent....... $4.33 $1.06
======== =======
</TABLE>
<PAGE>
2
<TABLE>
<CAPTION>
Three Months Ended
February 29, February 28,
1996 1995
(unaudited)
(U.S. dollars in thousands except
per share amounts)
<S> <C> <C>
(B) Earnings per ordinary
share and ordinary share
equivalent -- assuming
full dilution:
Weighted average shares
outstanding.............. 47,238 53,509
Average stock options
outstanding (net of
repurchased shares
under the treasury
stock method)............ 613 291
-------- -------
Weighted average ordinary
shares and ordinary
share equivalents
outstanding.............. 47,851 53,800
======== =======
Net income:
Actual net income........ $207,089 $56,882
Assumed earnings
on excess option
proceeds............... - -
-------- -------
Adjusted net income........ $207,089 $56,882
======== =======
Earnings per ordinary
share and ordinary
share equivalent....... $ 4.33 $ 1.06
======== =======
</TABLE>
