Argo Group International Holdings, Ltd. (NASDAQ: AGII) today
announced financial results for the three and six months ended June
30, 2015.
"Argo Group’s second quarter results demonstrate continued
momentum in the first half of 2015," said CEO Mark E. Watson III.
"The improvement in our underwriting income is a direct result of
the ongoing focus on underwriting as well as a disciplined approach
to profitable growth in our niche markets.”
HIGHLIGHTS FOR THE SECOND QUARTER ENDED JUNE 30,
2015:
- Gross written premiums were up 7.2% to
$557.8 million from $520.1 million in the second quarter of
2014.
- After-tax operating income was $25.9
million or $0.91 per diluted share, compared to $23.7 million or
$0.81 per diluted share for the second quarter of 2014.
- Net income was $27.9 million or $0.98
per diluted share, compared to $38.6 million or $1.32 per diluted
share for the second quarter of 2014.
- Pre-tax underwriting income increased
12.0% to $15.9 million in the second quarter of 2015 from $14.2
million in 2014.
- The combined ratio was 95.4% compared
to 95.8% for the second quarter of 2014. The loss and expense
ratios for the quarter were 55.1% and 40.3%, respectively compared
to 55.1% and 40.7% for the second quarter of 2014.
- Included in underwriting expenses was a
non-cash, equity-based compensation charge of $10.4 million
(representing 3.0 combined ratio points), compared to $6.8 million
(representing 2.0 combined ratio points) in the second quarter of
2014, resulting from the increase in the Company’s stock price
during the quarter of each year.
- Net favorable prior-year reserve
development was $5.0 million (benefiting the combined ratio by 1.4
points), compared with $14.4 million (benefiting the combined ratio
by 4.3 points) for the second quarter of 2014.
- Estimated pre-tax catastrophe losses
were $2.3 million or 0.6 points on the combined ratio, compared to
$4.2 million or 1.3 points on the combined ratio for the second
quarter of 2014.
- The loss ratio excluding catastrophes
and reserve development was 55.9% for the second quarter of 2015,
compared to 58.1% for the second quarter of 2014.
- During the quarter, the Company
repurchased $6.8 million or 136,042 shares of its common stock at
an average price of $49.80 per share.
HIGHLIGHTS FOR THE SIX MONTHS ENDED JUNE 30, 2015:
- Gross written premiums were up 5.2% to
$1.035 billion from $983.2 million in the first half of 2014.
- After-tax operating income was $55.4
million or $1.94 per diluted share, compared to $48.7 million or
$1.65 per diluted share for the first half of 2014.
- Net income was $86.7 million or $3.03
per diluted share, compared to $78.8 million or $2.67 per diluted
share for the first half of 2014.
- Pre-tax underwriting income increased
29.6% to $37.2 million in the first half of 2015 from $28.7 million
in 2014.
- The combined ratio was 94.5% compared
to 95.7% for the first half of 2014. The loss and expense ratios
for the first half of 2015 were 55.0% and 39.5%, respectively
compared to 55.6% and 40.1% for the first half of 2014.
- Included in underwriting expenses was a
non-cash, equity-based compensation charge of $15.3 million,
(representing 2.2 combined ratio points), compared to $11.1 million
(representing 1.6 combined ratio points), in the first half of
2014, resulting from the increase in the Company’s stock price
during the first six months of each year.
- Net favorable prior-year reserve
development was $8.7 million (benefiting the combined ratio by 1.3
points), compared with $23.3 million (benefiting the combined ratio
by 3.5 points) for the first half of 2014.
- Estimated pre-tax catastrophe losses
were $5.3 million or 0.8 points on the combined ratio, compared to
$8.4 million or 1.3 points on the combined ratio for the first half
of 2014.
- The current accident year loss ratio
excluding catastrophes was 55.5% for the first half of 2015,
compared to 57.8% for the first half of 2014.
- In the first half of 2015, the Company
repurchased $24.9 million or 489,096 shares of its common stock at
an average share price of $50.93, which represents 1.7% of net
shares outstanding at December 31, 2014.
- Book value per share increased to
$59.76, up 2.6% from $58.22 at Dec. 31, 2014.
- At June 30, 2015, cash and investments
totaled $4.2 billion with a net pre-tax unrealized gain of
approximately $166.5 million.
Notes:
All per share amounts, except for number of
shares repurchased, are adjusted for the 10% stock dividend that
was paid on March 16, 2015, to stockholders of record on March 2,
2015.
All references to catastrophe losses are
pre-tax and net of reinsurance and estimated reinstatement
premiums. Point impacts on the combined ratio are calculated as the
difference between the reported combined ratio and the combined
ratio excluding incurred catastrophe losses and associated
reinstatement premiums.
After-tax operating income is defined as net
income excluding net realized investment gains/losses and foreign
currency exchange gains/losses at an assumed 20% effective tax
rate.
CASH DIVIDEND DECLARED
Argo Group also announced today its board of directors has
declared a quarterly cash dividend of $0.20 per share on the
company's common stock. The dividend will be paid on September 15,
2015, to shareholders of record on September 1, 2015.
FINANCIAL HIGHLIGHTS BY SEGMENT
Excess and Surplus Lines
The Excess and Surplus Lines segment in the second quarter
reported gross written premiums of $196.2 million, up $20.4 million
or 11.6%, compared to $175.8 million in the second quarter of 2014.
The primary driver of growth in the quarter was in the core
casualty product area. Net written premiums were up 12.7% to $166.1
million, and earned premiums were up 4.6% to $131.1 million, when
compared to the second quarter of 2014. Underwriting income was
$16.7 million for the quarter, compared to $20.8 million for the
second quarter of 2014. The second quarter 2015 combined ratio of
87.3% compares to 83.4% for the prior-year quarter. Net favorable
prior-year reserve development was $6.8 million for the second
quarter of 2015, benefitting the combined ratio by 5.2 points,
compared to net favorable prior-year reserve development of $13.7
million or 10.9 points for the second quarter of 2014. Catastrophe
losses for the quarter were $1.5 million or 1.2 points on the
combined ratio, compared to $0.6 million or 0.4 points for the
second quarter of 2014. The second quarter 2015 loss ratio,
excluding catastrophe losses and reserve development, was 58.8%
compared to 61.8% for the second quarter of 2014.
For the six months ended June 30, 2015, gross written premiums
were $358.8 million, up $43.0 million or 13.6%, compared to $315.8
million in the first half of 2014. Net written premiums were up
19.0% to $292.2 million, and earned premiums were up 4.8% to $254.2
million, when compared to the first half of 2014. Underwriting
income was $34.4 million compared to $33.2 million for the first
half of 2014. The first half 2015 combined ratio of 86.5% compares
to 86.3% for the first half of 2014. Net favorable prior-year
reserve development was $15.0 million for the first half of 2015,
benefitting the combined ratio by 5.9 points, compared to net
favorable prior-year reserve development of $21.7 million or 8.9
points for the first half of 2014. Catastrophe losses for the first
half of 2015 were $2.0 million or 0.8 points on the combined ratio,
compared to $2.4 million or 0.9 points for the first half of 2014.
The first half 2015 loss ratio, excluding catastrophe losses and
reserve development, was 59.1% compared to 61.2% for the first half
of 2014.
Commercial Specialty
The Commercial Specialty segment reported gross written premiums
of $92.5 million, up $8.9 million or 10.6%, compared to $83.6
million in the second quarter of 2014. The primary drivers of
growth in the second quarter were program business and Argo Surety.
Net written premiums were down slightly to $55.5 million, and
earned premiums were up 0.8% to $71.7 million, when compared to the
second quarter of 2014. Underwriting income was $2.4 million for
the quarter, compared to an underwriting loss of $2.4 million for
the second quarter of 2014. The second quarter 2015 combined ratio
of 96.7% compares to 103.4% for the prior-year quarter. For the
second quarter of 2015, net unfavorable prior-year reserve
development was $4.4 million or 6.2 points on the combined ratio,
compared to net unfavorable prior-year reserve development of $2.9
million or 4.1 points for the second quarter of 2014. Catastrophe
losses for the quarter were $0.8 million or 1.2 points on the
combined ratio, compared to $2.6 million or 3.6 points for the
second quarter of 2014. The second quarter 2015 loss ratio,
excluding catastrophe losses and reserve development, was 57.8%
compared to 59.3% for the second quarter of 2014.
For the six months ended June 30, 2015, gross written premiums
were $199.5 million, up $10.0 million or 5.3%, compared to $189.5
million in the first half of 2014. Net written premiums were down
3.6% to $119.3 million, and earned premiums were up 1.0% to $144.3
million, when compared to the first half of 2014. Underwriting
income was $3.3 million compared to an underwriting loss of $3.5
million for the first half of 2014. The first half 2015 combined
ratio of 97.7% compares to 102.5% for the first half of 2014. For
the first half of 2015, net unfavorable prior-year reserve
development was $11.6 million or 8.0 points on the combined ratio,
compared to net unfavorable prior-year reserve development of $4.9
million or 3.4 points for the first half of 2014. Catastrophe
losses for the first half of 2015 were $1.3 million or 0.9 points
on the combined ratio, compared to $4.0 million or 2.8 points for
the first half of 2014. The first half 2015 loss ratio, excluding
catastrophe losses and reserve development, was 57.3% compared to
60.6% for the first half of 2014.
Syndicate 1200
The segment reported gross written premiums of $168.2 million in
the second quarter of 2015, up $4.7 million or 2.9% from the second
quarter of 2014. Growth versus a year ago primarily reflects the
marine and energy business and other new initiatives. Net written
premiums were $122.8 million versus $131.3 million in the second
quarter of 2014. Earned premiums were up 2.3% to $104.5 million,
when compared to the second quarter of 2014. Underwriting income
was $7.4 million for the quarter, compared to $7.0 million for the
second quarter of 2014, reflecting a combined ratio of 93.0%,
compared with 93.2% in the prior-year quarter. Net favorable
prior-year reserve development was $2.2 million or 2.1 points on
the combined ratio for the second quarter of 2015, compared to net
favorable prior-year reserve development of $6.4 million or 6.3
points for the second quarter of 2014. There was no impact from
catastrophes in the current quarter or in the second quarter of
2014. The second quarter 2015 loss ratio, excluding reserve
development, was 53.4%, compared to 57.4% in the second quarter of
2014.
For the six months ended June 30, 2015, gross written premiums
were $305.8 million, up $8.7 million or 2.9% from the first half of
2014. Net written premiums were $201.6 million versus $208.0
million in the first half of 2014. Earned premiums were up 2.4% to
$206.4 million, when compared to the first half of 2014.
Underwriting income was $16.5 million compared to $20.2 million for
the first half of 2014, reflecting a combined ratio of 92.0%,
compared with 90.0% in the first half of 2014. Net favorable
prior-year reserve development for the first half of 2015 was $2.5
million or 1.2 points on the combined ratio for the first half of
2015, compared to net favorable prior-year reserve development of
$15.2 million or 7.5 points for the first half of 2014. Catastrophe
losses for the first half of 2015 were $1.0 million or 0.5 points
on the combined ratio, compared to no catastrophe losses in the
first half of 2014. The first half 2015 loss ratio, excluding
catastrophe losses and reserve development, was 52.1%, compared to
56.0% in the first half of 2014.
International Specialty
The International Specialty segment includes our property
reinsurance business as well as our insurance business in Bermuda
and Brazil. In the second quarter of 2015, gross written premiums
were $100.5 million, up $3.1 million or 3.2% from the second
quarter of 2014. Net written premiums were $66.8 million versus
$64.1 million in the second quarter of 2014. Modest growth was
driven by new business opportunities at Argo Re. Earned premiums
were up 1.9% to $38.3 million, when compared to the second quarter
of 2014. Underwriting income was $6.5 million for the quarter,
compared to $4.3 million for the second quarter of 2014, reflecting
a combined ratio of 82.5%, compared with 88.9% in the prior-year
quarter. Net favorable prior-year reserve development was $1.2
million or 3.3 points on the combined ratio for the second quarter
of 2015, compared to no prior-year reserve development in the
second quarter of 2014. There was no impact from catastrophes in
the current quarter, compared to $1.0 million or 2.7 points on the
combined ratio in the second quarter of 2014. The second quarter
2015 loss ratio, excluding catastrophe losses and reserve
development, was 49.3%, compared to 45.7% in the second quarter of
2014.
For the six months ended June 30, 2015, gross written premiums
were $170.3 million, down $10.3 million or 5.7% from the first half
of 2014. Net written premiums were $94.4 million versus $97.6
million in the first half of 2014. Earned premiums were up 1.3% to
$75.6 million, when compared to the first half of 2014.
Underwriting income was $13.5 million compared to $10.1 million for
the first half of 2014, reflecting a combined ratio of 82.0%,
compared with 86.5% in the first half of 2014. Net favorable
prior-year reserve development for the first half of 2015 was $3.7
million or 4.9 points on the combined ratio for the first half of
2015, compared to net unfavorable prior-year reserve development of
$0.4 million or 0.5 points for the first half of 2014. Catastrophe
losses for the first half of 2015 were $1.0 million or 1.3 points
on the combined ratio compared to $2.0 million or 2.7 points in the
first half of 2014. The first half 2015 loss ratio, excluding
catastrophe losses and reserve development, was 49.2%, compared to
46.4% in the first half of 2014.
CONFERENCE CALL
Argo Group management will conduct an investor conference call
tomorrow, Aug. 5, 2015, starting at 10 a.m. EDT (11 a.m. ADT). A
live webcast of the conference call can be accessed by visiting
http://services.choruscall.com/links/agii150805. Participants
inside the U.S. can access the call by phone by dialing (877)
291-5203. Callers dialing from outside the U.S. can access the call
by dialing (412) 902-6610. Please ask the operator to be connected
to the Argo Group earnings call.
A webcast replay will be available shortly after the conference
call and can be accessed at
http://services.choruscall.com/links/agii150805. In addition, a
telephone replay of the call will be available through August 12,
2015, to callers from inside the U.S. by dialing (877) 344-7529
(conference # 10070188). Callers dialing from outside the U.S. can
access the telephone replay by dialing (412) 317-0088 (conference #
10070188).
ABOUT ARGO GROUP INTERNATIONAL HOLDINGS, LTD.
Argo Group International Holdings, Ltd. (NASDAQ: AGII) is an
international underwriter of specialty insurance and reinsurance
products in the property and casualty market. Argo Group offers a
full line of products and services designed to meet the unique
coverage and claims handling needs of businesses in four primary
segments: Excess & Surplus Lines, Commercial Specialty,
Syndicate 1200 and International Specialty. Argo Group's insurance
subsidiaries are A. M. Best-rated 'A' (Excellent) (highest rating
out of 16 rating classifications) with a stable outlook, and Argo's
U.S. insurance subsidiaries are Standard and Poor's-rated 'A-'
(Strong) with a stable outlook. More information on Argo Group and
its subsidiaries is available at www.argolimited.com.
FORWARD-LOOKING STATEMENTS
This press release contains certain statements that are
“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, as amended. Such statements are qualified by
the inherent risks and uncertainties surrounding future
expectations generally and also may differ materially from actual
future experience involving any one or more of such statements. For
a more detailed discussion of such risks and uncertainties, see
Argo Group's filings with the SEC. The inclusion of a
forward-looking statement herein should not be regarded as a
representation by Argo Group that Argo Group's objectives will be
achieved. Argo Group undertakes no obligation to publicly update
forward-looking statements, whether as a result of new information,
future events or otherwise.
NON-GAAP FINANCIAL MEASURES
In presenting the Company's results, management has included and
discussed in this press release certain non-generally accepted
accounting principles ("non-GAAP") financial measures within the
meaning of Regulation G as promulgated by the U.S. Securities and
Exchange Commission. Management believes that these non-GAAP
measures, which may be defined differently by other companies,
better explain the Company's results of operations in a manner that
allows for a more complete understanding of the underlying trends
in the Company's business. However, these measures should not be
viewed as a substitute for those determined in accordance with
generally accepted accounting principles ("U.S. GAAP").
“Underwriting income” is an internal performance measure used in
the management of the Company’s operations and represents net
amount earned from underwriting activities (net premiums earned
less underwriting expenses and claims incurred). Although this
measure of profit (loss) does not replace net income (loss)
computed in accordance with U.S. GAAP as a measure of
profitability, management uses this measure of profit (loss) to
focus our reporting segments on generating underwriting income.
"Operating income" is an internal performance measure used in
the management of the Company's operations and represents after-tax
operational results excluding, as applicable, net realized
investment gains or losses, net foreign exchange gain or loss, and
other non-recurring items. The Company excludes net realized
investment gains or losses, net foreign exchange gain or loss, and
other non-recurring items from the calculation of operating income
because these amounts are influenced by and fluctuate in part
according to the availability of market opportunities and other
factors. In addition to presenting net income determined in
accordance with U.S. GAAP, the Company believes that showing
operating income enables investors, analysts, rating agencies and
other users of the Company's financial information to more easily
analyze our results of operations and underlying business
performance. Operating income should not be viewed as a substitute
for U.S. GAAP net income.
"Annualized net income return on average equity" ("ROAE") is
calculated using average shareholders' equity. In calculating ROAE,
the net income available to shareholders for the period is
multiplied by the number of periods in a calendar year to arrive at
annualized net income available to shareholders. The Company
presents ROAE as a measure that is commonly recognized as a
standard of performance by investors, analysts, rating agencies and
other users of its financial information.
"Annualized operating return on average shareholders' equity" is
calculated using operating income (as defined above and annualized
in the manner described for net income (loss) available to
shareholders under ROAE above) and average shareholders' equity.
The assumed tax rate is 20%.
Reconciliations of these financial measures to their most
directly comparable U.S. GAAP measures are included in the attached
tables.
ARGO GROUP INTERNATIONAL HOLDINGS, LTD. CONSOLIDATED BALANCE
SHEETS (in millions, except per share amounts)
June 30, December 31, 2015 2014 (unaudited) Assets Total
investments $ 4,082.2 $ 4,097.9 Cash 106.5 81.0 Accrued investment
income 20.6 22.1 Receivables 1,468.1 1,350.8 Goodwill and
intangible assets 228.7 230.8 Deferred acquisition costs, net 139.3
124.6 Ceded unearned premiums 261.9 207.6 Other assets 236.7
241.5 Total assets $ 6,544.0 $ 6,356.3 Liabilities
and Shareholders' Equity Reserves for losses and loss adjustment
expenses $ 3,078.2 $ 3,042.4 Unearned premiums 896.4 817.2 Ceded
reinsurance payable, net 261.5 178.8 Senior unsecured fixed rate
notes 143.8 143.8 Other indebtedness 56.7 62.0 Junior subordinated
debentures 172.7 172.7 Other liabilities 265.8 292.7
Total liabilities 4,875.1 4,709.6 Total shareholders' equity
1,668.9 1,646.7 Total liabilities and shareholders'
equity $ 6,544.0 $ 6,356.3 Book value per common share $
59.76 $ 58.22
ARGO GROUP INTERNATIONAL HOLDINGS,
LTD.
FINANCIAL HIGHLIGHTS ALL SEGMENTS (in millions, except per share
amounts)
Three Months Ended Six Months Ended June 30, June 30, 2015
2014 2015 2014 (unaudited) (unaudited) Gross Written
Premiums $ 557.8 $ 520.1 $ 1,034.5 $ 983.2 Net Written Premiums
411.6 398.3 707.6 675.1 Earned Premiums 346.0 336.1 680.6
661.8 Net Investment Income 21.8 20.6 42.6 43.9 Net Realized
Investment and Other Gains 5.3 18.5 21.3
29.6 Total Revenue 373.1 375.2 744.5 735.3
Losses and Loss Adjustment Expenses 190.6 185.1 374.3 367.6
Underwriting, Acquisition and Insurance Expenses 139.5 136.8 269.1
265.5 Interest Expense 4.6 5.1 9.5 10.1 Fee Expense, net 0.7 0.1
1.1 1.5 Foreign Currency Exchange Loss (Gain) 3.0 3.4
(6.6 ) 3.2 Total Expenses 338.4 330.5 647.4 647.9
Income Before Taxes 34.7 44.7 97.1 87.4 Income Tax Provision
6.8 6.1 10.4 8.6 Net Income $
27.9 $ 38.6 $ 86.7 $ 78.8 Net Income per
Common Share (Basic) $ 1.00 $ 1.34 $ 3.09 $ 2.72
Net Income per Common Share (Diluted) $ 0.98 $ 1.32 $ 3.03
$ 2.67 Weighted Average Common Shares: Basic
27.9 28.8 28.0 29.0 Diluted 28.5
29.2 28.6 29.5 ARGO GROUP
INTERNATIONAL HOLDINGS, LTD. SEGMENT DATA (in millions)
Three Months Ended Six Months Ended
June 30 June 30 2015 2014 2015 2014
(unaudited) (unaudited)
Excess and Surplus
Lines
Gross Written Premiums $ 196.2 $ 175.8 $ 358.8 $ 315.8 Net Written
Premiums 166.1 147.4 292.2 245.6 Earned Premiums 131.1 125.3 254.2
242.7 Underwriting Income $ 16.7 $ 20.8 $ 34.4 $ 33.2 Net
Investment Income 9.0 9.0 17.5 18.3 Interest Expense (1.5 )
(1.6 ) (3.0 ) (3.2 ) Operating Income Before
Taxes $ 24.2 $ 28.2 $ 48.9 $ 48.3 Loss
Ratio 54.8 51.3 54.0 53.2 Expense Ratio 32.5
32.1 32.5 33.1 GAAP Combined
Ratio 87.3 % 83.4 % 86.5 % 86.3 %
Commercial
Specialty
Gross Written Premiums $ 92.5 $ 83.6 $ 199.5 $ 189.5 Net Written
Premiums 55.5 55.7 119.3 123.7 Earned Premiums 71.7 71.1 144.3
142.8 Underwriting Income (Loss) $ 2.4 $ (2.4 ) $ 3.3 $ (3.5 ) Net
Investment Income 4.7 4.6 9.2 9.3 Interest Expense (0.8 ) (0.8 )
(1.6 ) (1.6 ) Fee Expense, net (1.7 ) (1.9 )
(2.5 ) (3.0 ) Operating Income (Loss) Before Taxes $ 4.6
$ (0.5 ) $ 8.4 $ 1.2 Loss Ratio 65.2 67.0 66.2
66.8 Expense Ratio 31.5 36.4
31.5 35.7 GAAP Combined Ratio 96.7 %
103.4 % 97.7 % 102.5 %
Syndicate
1200
Gross Written Premiums $ 168.2 $ 163.5 $ 305.8 $ 297.1 Net Written
Premiums 122.8 131.3 201.6 208.0 Earned Premiums 104.5 102.2 206.4
201.5 Underwriting Income $ 7.4 $ 7.0 $ 16.5 $ 20.2 Net Investment
Income 2.4 2.1 4.6 5.8 Interest Expense (0.6 ) (0.8 ) (1.3 ) (1.6 )
Fee Income, net 0.9 1.8 1.3
1.5 Operating Income Before Taxes $ 10.1
$ 10.1 $ 21.1 $ 25.9 Loss Ratio 51.3
51.1 51.4 48.5 Expense Ratio 41.7 42.1
40.6 41.5 GAAP Combined Ratio
93.0 % 93.2 % 92.0 % 90.0 %
International
Specialty
Gross Written Premiums $ 100.5 $ 97.4 $ 170.3 $ 180.6 Net Written
Premiums 66.8 64.1 94.4 97.6 Earned Premiums 38.3 37.6 75.6 74.6
Underwriting Income $ 6.5 $ 4.3 $ 13.5 $ 10.1 Net Investment Income
3.0 2.0 5.9 3.8 Interest Expense (0.7 ) (0.7 )
(1.5 ) (1.5 ) Operating Income Before Taxes $ 8.8 $
5.6 $ 17.9 $ 12.4 Loss Ratio 46.0 48.4 45.6
49.6 Expense Ratio 36.5 40.5
36.4 36.9 GAAP Combined Ratio 82.5 %
88.9 % 82.0 % 86.5 % ARGO GROUP
INTERNATIONAL HOLDINGS, LTD. (in millions) (unaudited)
For the
Three Months For the Six Months Ended June 30, Ended June 30, Net
Prior Year Development 2015 2014 2015 2014
(Favorable)/Unfavorable
Excess and Surplus Lines $ (6.8 ) $ (13.7 ) $ (15.0 ) $ (21.7 )
Commercial Specialty 4.4 2.9 11.6 4.9 Syndicate 1200 (2.2 ) (6.4 )
(2.5 ) (15.2 ) International Specialty (1.2 ) - (3.7 ) 0.4 Run-off
0.8 2.8 0.9 8.3
Total $ (5.0 ) $ (14.4 ) $ (8.7 ) $ (23.3 )
ARGO GROUP INTERNATIONAL HOLDINGS, LTD. RECONCILIATION OF OPERATING
INCOME (LOSS) TO NET INCOME (LOSS) (in millions, except per share
amounts)
Three Months Ended Six Months Ended June 30, June 30, 2015
2014 2015 2014 (unaudited) (unaudited) Income Before Taxes: From
Operations $ 32.4 $ 29.6 $ 69.2 $ 61.0 Foreign Currency Exchange
(Loss) Gain (3.0 ) (3.4 ) 6.6 (3.2 ) Net Realized Investment Gains
5.3 18.5 21.3 29.6
Income Before Taxes 34.7 44.7 97.1 87.4 Income Tax Provision
6.8 6.1 10.4 8.6
Net Income $ 27.9 $ 38.6 $ 86.7 $ 78.8
Net Income per Common Share (Diluted) $ 0.98
$ 1.32 $ 3.03 $ 2.67 Operating
Income per Common Share (Diluted) At Assumed Tax Rate: Income (a)
0.98 1.22 2.72 2.37 Foreign Currency Exchange Loss (Gains) (a) 0.08
0.09 (0.18 ) 0.09 Net Realized Investment Gains (a) (0.15 )
(0.50 ) (0.60 ) (0.81 ) Operating
Income per Common Share 0.91 0.81
1.94 1.65 (a) Per diluted share
at assumed tax rate of 20%. ARGO GROUP INTERNATIONAL
HOLDINGS, LTD. SHAREHOLDER RETURN ANALYSIS (in millions)
Six Months Ended June 30, 2015
2014 % Change Net income $ 86.7 $ 78.8 10.0 % Operating income (a)
55.4
48.7
13.6
%
Shareholders' Equity - Beginning of the period 1,646.7
1,563.0 5.4 % Shareholders' Equity - End of current period
1,668.9 1,633.1 2.2 % Average Shareholders'
Equity $ 1,657.8 $ 1,598.1 3.7 %
Annualized return on average
shareholders' equity 10.5 % 9.9 % Annualized operating return on
average shareholders' equity
6.7
%
6.1
%
(a) at assumed 20% tax rate
View source
version on businesswire.com: http://www.businesswire.com/news/home/20150804006737/en/
Argo Group International Holdings, Ltd.Susan Spivak Bernstein,
212-607-8835Senior Vice President, Investor Relations
Argo (NYSE:ARGO)
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