Odyssey Re Holdings Corp. Unveils Q4 Report

Odyssey Re Holdings Corp. this week reported its fourth quarter and full year 2004 results.

Net income amounted to $50.9 million, or $0.74 per common share for the quarter ended Dec. 31, 2004, compared to $47.6 million or $0.69 per common share for the quarter ended Dec. 31, 2003. Included in the fourth quarter 2004 and 2003 net income were net realized capital gains of $12.6 million and $15.7 million, respectively, which on an after-tax basis, amounted to $8.2 million and $10.2 million, or $0.12 and $0.14 per common share, respectively.

For the year ended Dec. 31, 2004, net income was $186.9 million, or $2.71 per common share, compared to net income of $249.2 million, or $3.59 per common share, for the year ended Dec. 31, 2003. Net after-tax realized capital gains for the year ended Dec. 31, 2004 were $73.8 million, or $1.05 per common share, compared to $131.8 million, or $1.87 per common share, for the year ended Dec. 31, 2003.

Operating income (1) after tax, which excludes realized capital gains, for the fourth quarter 2004 was $42.7 million, or $0.62 per common share, compared to $37.4 million, or $0.55 per common share, for the fourth quarter 2003. Operating income after tax was $113.1 million, or $1.66 per common share, and $117.4 million, or $1.72 per common share, for the years ended Dec. 31, 2004 and 2003, respectively. The net combined ratio for the fourth quarter 2004 was 95.0%, compared to 95.9% for the fourth quarter 2003.

Commenting on the fourth quarter and full year results, Andrew Barnard, president and CEO, stated, “We are pleased to report a 14% increase in stockholders’ equity for the year which follows increases of over 20% for each of the previous two years. OdysseyRe’s strategic efforts of the past few years to diversify geographically and by product line provided the capability to post solid results, despite record hurricane catastrophe events in the U.S. and Caribbean.”

Gross premiums written for the three months ended Dec. 31, 2004 were $660.8 million, a decrease of 3.0%, compared to $681.5 million for the three months ended Dec. 31, 2003. For the year ended Dec. 31, 2004, gross premiums written were $2.7 billion, an increase of 3.8%, compared to $2.6 billion for the year ended Dec. 31, 2003. The premium growth for the year is attributable to increases in EuroAsia of 35.7%, London Market of 2.2% and U.S. Insurance of 23.4%, offset by a decrease in the Americas of 11.1%.

Total net investment results, which include net investment income and net realized capital gains, amounted to $60.5 million in the fourth quarter 2004, compared to $58.8 million in the fourth quarter 2003. Net investment income, excluding net realized capital gains, amounted to $47.9 million for the fourth quarter 2004, compared to $43.1 million for the fourth quarter 2003. Net realized capital gains decreased to $12.6 million for the three months ended Dec. 31, 2004 from $15.7 million for the fourth quarter of 2003. For the years ended Dec. 31, 2004 and 2003, total net investment results were $278.2 million and $336.9 million, respectively. For the year ended Dec. 31, 2004, net realized capital gains were $113.5 million, compared to $202.7 million for the year ended Dec. 31, 2003. Pre-tax unrealized capital gains were $129.9 million at Dec. 31, 2004.

For the three months ended Dec. 31, 2004, net cash flow from operations was $147.5 million, compared to net cash flow from operations of $168.9 million for the fourth quarter 2003. For the year ended Dec. 31, 2004, net cash flow from operations amounted to $603.2 million, a 6.9% increase over the 2003 figure of $564.1 million.

At Dec. 31, 2004 investments and cash totaled $5,236.5 million, an increase of $999.2 million from Dec. 31, 2003. Total assets amounted to $7.7 billion at Dec. 31, 2004. Net book value per common share at Dec. 31, 2004 was $24.48, an increase of $3.09 per share compared to $21.39 at Dec. 31, 2003.

OdysseyRe paid a cash dividend of $0.03125 per share on Dec. 31, 2004. The total dividend payment amounted to approximately $2.0 million in the fourth quarter of 2004.

(1) “Operating income” after taxes is a non-GAAP financial measure often used to evaluate performance. Operating income after taxes is equal to net income, excluding net realized capital gains or losses, after taxes.