UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): February 3, 2004
-----------------
RENAISSANCERE HOLDINGS LTD.
---------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Bermuda 34-0-26512 98-014-1974
------------- -------------------- --------------
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
Renaissance House
8-12 East Broadway, Pembroke
Bermuda HM 19
------------------------------------------ -----------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (441) 295-4513
--------------------
Not Applicable
-------------------------------------------------------------
(Former name or former address, if changed since last report)
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Not applicable.
(b) Not applicable.
(c) Exhibits.
The following exhibits are filed as part of this report:
Exhibit # Description
--------- -----------
99.1* Copy of Company's press release, issued February 3, 2004.
* Exhibit 99.1 is being furnished to the Securities and Exchange Commission
("SEC") pursuant to Item 12 and is not being filed with the SEC. Therefore,
this exhibit is not incorporated by reference in any of the registrant's
other SEC filings.
ITEM 12. RESULTS OF OPERATION AND FINANCIAL CONDITION.
On February 3, 2004, RenaissanceRe Holdings Ltd. (the "Company") issued a
press release (the "Press Release") announcing the Company's preliminary results
for the quarter and year ended December 31, 2003. A copy of the Press Release is
attached hereto as Exhibit 99.1 to this Form 8-K. This Form 8-K and Exhibit 99.1
hereto are each being furnished pursuant to Item 12 of Form 8-K and are
therefore not to be considered "filed" with the Securities and Exchange
Commission.
Non-GAAP Financial Measures
In addition to the GAAP financial measures set forth in the Press Release,
the Company has included certain non-GAAP financial measures in the Press
Release within the meaning of Regulation G. The Company has consistently
provided these financial measurements in previous earnings releases and the
Company's management believes that these measurements are important to investors
and other interested persons, and that investors and such other persons benefit
from having a consistent basis for comparison between quarters and for
comparison with other companies in the industry. These measures may not,
however, be comparable to similarly titled measures used by companies outside of
the insurance industry. Investors are cautioned not to place undue reliance on
these non-GAAP measure in assessing the Company's overall financial performance.
The Company has included in the Press Release "net operating income
available to common shareholders" of $151.4 million in the fourth quarter of
2003 (as compared with $105.8 million in the fourth quarter of 2002) and $524.1
million for the year ended December 31, 2003 (as compared with $363.8 million
for the year ended December 31, 2002). The Company has also included in the
Press Release "operating earnings per
common share" of $2.13 during the fourth quarter of 2003 (as compared with $1.50
per common share during the fourth quarter of 2002) and $7.38 per common share
for the year ended December 31, 2003 (as compared with $5.18 per common share
for the year ended December 31, 2002). Each of these measures is a non-GAAP
financial measure.
The Company uses "operating income" as a measure to evaluate the underlying
fundamentals of its operations and believes it to be a useful measure of its
corporate performance. "Operating income" differs from "net income," which the
Company believes is the most directly comparable GAAP measure, only by the
exclusion of realized gains and losses on investments and the cumulative effect
of a change in the Company's accounting for goodwill of $9.2 million in the
first quarter of 2002. In the Press Release, the Company provides that "net
income available to common shareholders" during the fourth quarter of 2003 was
$160.0 million (as compared with $102.2 million during the fourth quarter of
2002) and $604.6 million for the year ended December 31, 2003 (as compared with
$364.8 million for the year ended December 31, 2002). In the Press Release, the
Company also provides that "net income per common share" during the fourth
quarter of 2003 was $2.25 (as compared with $1.45 per common share during the
fourth quarter of 2002) and $8.52 per common share for the year ended December
31, 2003 (as compared with $5.20 per common share for the year ended December
31, 2002). In addition to the reasons for this presentation set forth above, the
Company's management also believes that presentation of "operating income" is
useful to investors because by excluding realized gains and losses on
investments, it more accurately measures and predicts the Company's results of
operations by removing the variability arising from the management of its
investment portfolio and from non-recurring matters such as changes in
accounting principles.
The Company has also included in the Press Release "managed catastrophe
premium" of $42.6 million in the fourth quarter of 2003 (as compared with $35.5
million in the fourth quarter of 2002) and of $720.4 million for the year ended
December 31, 2003 (as compared with $716.5 million for the year ended December
31, 2002), which is a non-GAAP financial measure. The principal difference
between "managed catastrophe premium" and "total catastrophe premium," which the
Company believes is the most directly comparable GAAP measure, is that
catastrophe premiums written by Top Layer Reinsurance Ltd., a joint venture,
which is accounted for under the equity method of accounting, and accordingly
its premiums are not consolidated in the Company's GAAP results. In the Press
Release, the Company provides that "total catastrophe premium" was $40.0 million
in the fourth quarter of 2003 (as compared with $35.5 million during the fourth
quarter of 2002) and was $643.7 million for the year ended December 31, 2003 (as
compared with $643.4 million for the year ended December 31, 2002).
The Company has also included in the Press Release "summary of income from
joint venture relationships" of $36.6 million in the fourth quarter of 2003 (as
compared with $31.8 million in the fourth quarter of 2002) and of $137.0 million
for the year ended December 31, 2003 (as compared with $112.8 million for the
year ended December 31, 2002), which is a non-GAAP financial measure. The
principal differences between "summary of income from joint venture
relationships" and "other income," which the
Company believes is the most directly comparable GAAP measure, are that the
results of DaVinci Reinsurance Ltd., a joint venture the financial results of
which are consolidated in the Company's financial statements, are reflected in
"summary of income from joint venture relationships" as if reported under the
equity accounting method, and that this presentation also includes fees earned
on certain quota share cessions of catastrophe business by the Company which are
reflected on its income statement as a reduction of acquisition and operational
expenses. In the Press Release, the Company provides that "other income" was
$6.3 million in the fourth quarter of 2003 (as compared with $8.6 million during
the fourth quarter of 2002) and was $27.1 million for the year ended December
31, 2003 (as compared with $32.8 million for the year ended December 31, 2002).
The Company has also included in the Press Release "operating return on
average common equity (annualized)" of 30.2% for the fourth quarter of 2003 (as
compared with 29.9% for the fourth quarter of 2002) and 29.2% for the year ended
December 31, 2003 (as compared with 29.0% for the year ended December 31, 2002),
which is a non-GAAP financial measure. The principal differences between
"operating return on average common equity (annualized)" and "return on average
common equity," which the Company believes is the most directly comparable GAAP
measure, are that "operating return on average equity" excludes realized gains
on investments and the cumulative effect of a change in the Company's accounting
for goodwill of $9.2 million in the first quarter of 2002. In the Press Release,
the Company provides that "return on average common equity" was 31.9% in the
fourth quarter of 2003 (as compared with 28.9% for the fourth quarter of 2002)
and was 33.7% for the year ended December 31, 2003 (as compared with 29.1% for
the year ended December 31, 2002).
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
RENAISSANCERE HOLDINGS LTD.
Date: February 3, 2004 By: /s/ John M. Lummis
---------------- ------------------------------
Name: John M. Lummis
Title: Executive Vice President and
Chief Financial Officer
INDEX TO EXHIBITS
Exhibit No. Description
----------- -----------
99.1* Copy of Company's press release, issued February 3, 2004.
* Exhibit 99.1 is being furnished to the SEC pursuant to Item 12 and is not
being filed with the SEC. Therefore, this exhibit is not incorporated by
reference in any of the registrant's other SEC filings.