Enstar Group Limited Reports 2020 Year-End Results
March 01 2021 - 7:52AM
Enstar Group Limited (Nasdaq: ESGR) filed its annual report on Form
10-K with the SEC earlier today, reporting its earnings and
financial position for the year ended December 31, 2020.
Enstar reported consolidated net earnings of
$1.7 billion (or earnings of $78.80 per fully diluted ordinary
share) for the year ended December 31, 2020, compared to
consolidated net earnings of $902.2 million (or earnings of $41.43
per fully diluted ordinary share) for the year ended December 31,
2019.
The key driver of net earnings for the year
ended December 31, 2020 was net realized and unrealized gains of
$1.6 billion for the year ended December 31, 2020, including $1.3
billion relating to other investments and equities and $306.3
million relating to fixed income securities.
Non-GAAP operating income1 was $1.6 billion (or
$71.14 per fully diluted ordinary share) for the year ended
December 31, 2020, compared to $558.0 million (or $25.62 per fully
diluted ordinary share) for the year ended December 31, 2019.
Enstar's ordinary shareholders' equity at
December 31, 2020 amounted to $6.2 billion (or $281.20 per fully
diluted ordinary share), compared to $4.3 billion (or $197.93 per
fully diluted ordinary share) at December 31, 2019. The Form 10-K,
which is available on Enstar's website, www.enstargroup.com,
contains a more detailed description of Enstar's business and
financial results.
_________1 Non-GAAP operating income (loss) and
non-GAAP operating income (loss) per fully diluted ordinary share
are non-GAAP financial measures as defined in SEC Regulation G. The
reconciliations of these non-GAAP measures to the most comparable
GAAP financial measures (net earnings (loss) attributable to Enstar
ordinary shareholders and diluted net earnings (loss) per ordinary
share, respectively) are provided below, along with a discussion of
the rationale for the presentation of these items.
About Enstar
Enstar is a NASDAQ-listed leading global
insurance group that offers innovative capital release solutions
through its network of group companies in Bermuda, the United
States, the United Kingdom, Continental Europe, Australia, and
other international locations. A market leader in completing legacy
acquisitions, Enstar has acquired over 100 companies and portfolios
since its formation in 2001. For further information about Enstar,
see www.enstargroup.com.
Non-GAAP Financial Measures
In addition to presenting net earnings (loss)
attributable to Enstar ordinary shareholders and diluted earnings
(loss) per ordinary share determined in accordance with U.S. GAAP,
we believe that presenting non-GAAP operating income (loss)
attributable to Enstar ordinary shareholders and diluted non-GAAP
operating income (loss) per ordinary share, non-GAAP financial
measures as defined in SEC Regulation G, provides investors with
valuable measures of our performance.
Non-GAAP operating income (loss) excludes: (i)
net realized and unrealized (gains) losses on fixed maturity
investments and funds held - directly managed included in net
earnings (loss), (ii) change in fair value of insurance contracts
for which we have elected the fair value option, (iii) gain (loss)
on sale of subsidiaries, if any, (vi) net earnings (loss) from
discontinued operations, if any, (v) tax effect of these
adjustments where applicable, and (vi) attribution of share of
adjustments to noncontrolling interest where applicable. We
eliminate the impact of net realized and unrealized (gains) losses
on fixed maturity investments and funds held - directly managed and
change in fair value of insurance contracts for which we have
elected the fair value option because these items are subject to
significant fluctuations in fair value from period to period,
driven primarily by market conditions and general economic
conditions, and therefore their impact on our earnings is not
reflective of the performance of our core operations. We
eliminate the impact of gain (loss) on sale of subsidiaries and net
earnings (loss) from discontinued operations because these are not
reflective of the performance of our core operations. Diluted
Non-GAAP operating income (loss) per ordinary share is diluted net
earnings per ordinary share excluding the per diluted share amounts
of each of the adjustments used to calculate non-GAAP operating
income.
We believe these non-GAAP measures enable
readers of our consolidated financial statements to analyze our
results in a way that is more aligned with the manner in which our
management measures our underlying performance. We believe that
presenting these non-GAAP financial measures, which may be defined
and calculated differently by other companies, improves the
understanding of our consolidated results of operations. These
measures should not be viewed as substitutes for those calculated
in accordance with U.S. GAAP.
Reconciliation of Non-GAAP Financial
Measures
Non-GAAP operating income attributable to Enstar
ordinary shareholders is calculated by the addition or subtraction
of certain items from within our consolidated statements of
earnings to or from net earnings attributable to Enstar ordinary
shareholders, the most directly comparable GAAP financial measure,
as illustrated in the table below:
|
Year Ended |
|
December 31, |
|
2020 |
|
2019 |
|
2018 |
|
|
|
In thousands of U.S. dollars (except for
per share data) |
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings (loss) attributable to Enstar ordinary
shareholders |
$ |
1,719,344 |
|
|
$ |
902,175 |
|
|
$ |
(162,354 |
) |
Adjustments: |
|
|
|
|
|
Net realized and unrealized (gains) losses on fixed maturity
investments and funds held - directly managed (1) |
(306,284 |
) |
|
(515,628 |
) |
|
237,262 |
|
Change in fair value of insurance contracts for which we have
elected the fair value option |
119,046 |
|
|
117,181 |
|
|
6,664 |
|
Gain on sale of subsidiary |
(3,375 |
) |
|
— |
|
|
— |
|
Net earnings from discontinued operations |
(16,251 |
) |
|
(7,375 |
) |
|
(1,489 |
) |
Tax effects of adjustments (2) |
27,534 |
|
|
47,091 |
|
|
(15,364 |
) |
Adjustments attributable to noncontrolling interest (3) |
12,087 |
|
|
14,524 |
|
|
(6,665 |
) |
Non-GAAP operating income attributable to Enstar Group Limited
ordinary shareholders (4) |
$ |
1,552,101 |
|
|
$ |
557,968 |
|
|
$ |
58,054 |
|
|
|
|
|
|
|
Diluted net earnings (loss) per ordinary share (5) |
$ |
78.80 |
|
|
$ |
41.43 |
|
|
$ |
(7.84 |
) |
Adjustments: |
|
|
|
|
|
Net realized and unrealized (gains) losses on fixed maturity
investments and funds held - directly managed (1) |
(14.04 |
) |
|
(23.68 |
) |
|
11.42 |
|
Change in fair value of insurance contracts for which we have
elected the fair value option |
5.46 |
|
|
5.38 |
|
|
0.32 |
|
Gain on sale of subsidiary |
(0.15 |
) |
|
— |
|
|
— |
|
Net earnings from discontinued operations |
(0.74 |
) |
|
(0.34 |
) |
|
(0.07 |
) |
Tax effects of adjustments (2) |
1.26 |
|
|
2.16 |
|
|
(0.73 |
) |
Adjustments attributable to noncontrolling interest (3) |
0.55 |
|
|
0.67 |
|
|
(0.32 |
) |
Diluted non-GAAP operating income per ordinary share (4) |
$ |
71.14 |
|
|
$ |
25.62 |
|
|
$ |
2.78 |
|
|
|
|
|
|
|
Weighted average ordinary shares outstanding: |
|
|
|
|
|
Basic |
21,551,408 |
|
|
21,482,617 |
|
|
20,698,310 |
|
Diluted |
21,818,294 |
|
|
21,775,066 |
|
|
20,904,176 |
|
(1) Represents the net realized and unrealized
gains and losses related to fixed maturity securities. Our fixed
maturity securities are held directly on our balance sheet and also
within the "Funds held - directly managed" balance. Refer to Note 6
- "Investments" in the notes to our consolidated financial
statements included within Item 8 of our Annual Report on Form 10-K
for further details on our net realized and unrealized gains and
losses.(2) Represents an aggregation of the tax expense or benefit
associated with the specific country to which the pre-tax
adjustment relates, calculated at the applicable jurisdictional tax
rate.(3) Represents the impact of the adjustments on the net
earnings (loss) attributable to noncontrolling interest associated
with the specific subsidiaries to which the adjustments relate.(4)
Non-GAAP financial measure.(5) During a period of loss, the basic
weighted average ordinary shares outstanding is used in the
denominator of the diluted loss per ordinary share computation as
the effect of including potentially dilutive securities would be
anti-dilutive.
Cautionary Statement
This press release contains certain
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. These statements include
statements regarding the intent, belief or current expectations of
Enstar and its management team. Investors are cautioned that any
such forward-looking statements speak only as of the date they are
made, are not guarantees of future performance and involve risks
and uncertainties, and that actual results may differ materially
from those projected in the forward-looking statements as a result
of various factors, including the ongoing COVID-19 pandemic and the
related uncertainty and volatility in the financial markets.
Important risk factors regarding Enstar can be found under the
heading "Risk Factors" in our Form 10-K for the year ended December
31, 2020 and are incorporated herein by reference. Furthermore,
Enstar undertakes no obligation to update any written or oral
forward-looking statements or publicly announce any updates or
revisions to any of the forward-looking statements contained
herein, to reflect any change in its expectations with regard
thereto or any change in events, conditions, circumstances or
assumptions underlying such statements, except as required by
law.
Contact: |
Group Communications |
Telephone: |
+1 (441) 292-3645 |
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