Attached files
| file | filename |
|---|---|
| 8-K/A - FORM 8-K/A - Enstar Group LTD | d629709d8ka.htm |
| EX-23.1 - EX-23.1 - Enstar Group LTD | d629709dex231.htm |
| EX-99.1 - EX-99.1 - Enstar Group LTD | d629709dex991.htm |
| EX-99.2 - EX-99.2 - Enstar Group LTD | d629709dex992.htm |
| EX-99.3 - EX-99.3 - Enstar Group LTD | d629709dex993.htm |
Exhibit 99.4
ENSTAR GROUP LIMITED
UNAUDITED PRO FORMA CONDENSED COMBINED CONSOLIDATED
FINANCIAL STATEMENTS
The following unaudited pro forma condensed combined consolidated statements of earnings are based on the historical financial statements of Enstar Group Limited (“Enstar”) and the consolidated results of Arden Reinsurance Company Ltd. (“Arden Re”).
The unaudited condensed combined consolidated pro forma statement of earnings for the six months ended June 30, 2013 is presented as if Enstar had completed the acquisition of Arden Re as of January 1, 2013. The unaudited condensed combined consolidated pro forma statement of earnings for the year ended December 31, 2012 is presented as if Enstar had completed the acquisition of Arden Re as of January 1, 2012.
The unaudited condensed combined consolidated pro forma financial information reflects the purchase of Arden Re under the purchase method of accounting for business combinations and represents a current estimate of the financial information based on information available as of the date of this Current Report on Form 8-K/A.
The unaudited pro forma condensed combined consolidated balance sheet as of June 30, 2013 has not been included in this filing because the acquisition was reflected in Enstar’s actual balance sheet as of September 30, 2013, which was included within Enstar’s Quarterly Report on Form 10-Q filed with the U.S Securities and Exchange Commission (“SEC”) on November 7, 2013.
The pro forma information includes adjustments to record the assets and liabilities of Arden Re at their estimated fair values under the purchase method of accounting for business combinations. To the extent there are significant changes to Arden Re’s business, the assumptions and estimates herein could change significantly. The pro forma financial information is presented for informational purposes only under one set of assumptions and does not reflect the financial results of the combined companies had consideration been given to other assumptions or to the impact of possible operating efficiencies, asset dispositions, and other factors. Further, the pro forma financial information does not necessarily reflect the historical results of the combined company that actually would have occurred had the transaction been in effect during the period indicated or that may be obtained in the future.
The unaudited pro forma condensed combined consolidated statements of earnings should be read in conjunction with: (i) Enstar’s “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and historical financial statements, including the related notes, with respect to the year ended December 31, 2012 included in Enstar’s Annual Report on Form 10-K for the fiscal year ended December 31, 2012, which was filed with the SEC on February 28, 2013; (ii) Enstar’s subsequent Quarterly Reports on Form 10-Q filed with the SEC; and (iii) the historical financial statements of Arden Re included in Exhibits 99.1, 99.2 and 99.3 to this Current Report on Form 8-K/A.
ENSTAR GROUP LIMITED
UNAUDITED PRO FORMA CONDENSED COMBINED CONSOLIDATED STATEMENT OF EARNINGS
For the Year Ended December 31, 2012
(Expressed in thousands of U.S dollars)
| Enstar | Arden Re | Adjustment Entries |
Combined | |||||||||||||
| INCOME |
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| Net premiums earned |
$ | — | $ | 171,016 | $ | — | $ | 171,016 | ||||||||
| Consulting fees |
8,570 | — | — | 8,570 | ||||||||||||
| Other income |
— | 55,011 | — | 55,011 | ||||||||||||
| Net investment income |
77,760 | 8,147 | — | 85,907 | ||||||||||||
| Net realized and unrealized gains |
73,612 | 20,751 | — | 94,363 | ||||||||||||
| Net foreign exchange losses |
— | (1,071 | ) | 1,071 | (a) | — | ||||||||||
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| 159,942 | 253,854 | 1,071 | 414,867 | |||||||||||||
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| EXPENSES |
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| Net (reduction) increase in losses and loss adjustment expense liabilities |
(241,764 | ) | 70,047 | (3,568 | )(b) | (175,285 | ) | |||||||||
| Acquisition costs |
— | 14,520 | — | 14,520 | ||||||||||||
| Salaries and benefits |
100,473 | — | 6,791 | (c) | 107,264 | |||||||||||
| General and administrative expenses |
56,592 | 22,388 | (6,791 | )(c) | 72,189 | |||||||||||
| Interest expense |
8,426 | — | 1,855 | (d) | 10,281 | |||||||||||
| Net foreign exchange losses |
406 | — | 1,071 | (a) | 1,477 | |||||||||||
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| (75,867 | ) | 106,955 | (642 | ) | 30,446 | |||||||||||
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| EARNINGS BEFORE INCOME TAXES AND NONCONTROLLING INTEREST |
235,809 | 146,899 | 1,713 | 384,421 | ||||||||||||
| INCOME TAXES |
(44,290 | ) | (159 | ) | — | (44,449 | ) | |||||||||
| NONCONTROLLING INTEREST |
(23,502 | ) | — | (59,381 | )(e) | (82,883 | ) | |||||||||
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| NET EARNINGS |
$ | 168,017 | $ | 146,740 | $ | (57,668 | ) | $ | 257,089 | |||||||
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| Earnings per share - basic |
$ | 10.22 | $ | 15.64 | ||||||||||||
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| Earnings per share - diluted |
$ | 10.10 | $ | 15.45 | ||||||||||||
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| Weighted average ordinary shares outstanding - basic |
16,441,461 | 16,441,461 | ||||||||||||||
| Weighted average ordinary shares outstanding - diluted |
16,638,021 | 16,638,021 | ||||||||||||||
Notes
| (a) | Adjustments to reclassify Arden Re’s net foreign exchange losses to conform to Enstar’s accounting presentation. |
| (b) | Represents amortization of fair value adjustments of losses and loss adjustment expenses. |
| (c) | Adjustments to reclassify Arden Re’s salaries and benefits out of general and administrative expenses to conform to Enstar’s accounting presentation. |
| (d) | Represents interest expense on the borrowing under Enstar’s revolving credit facility based on the assumption that the borrowing used to fund the acquisition was made as at January 1, 2012. |
| (e) | Represents the 40% share of Arden Re’s net earnings for the year ended December 31, 2012 that is attributable to noncontrolling interest, as well as the noncontrolling interest’s 40% share of the cumulative adjustment entries. |
ENSTAR GROUP LIMITED
UNAUDITED PRO FORMA CONDENSED COMBINED CONSOLIDATED STATEMENT OF EARNINGS
For the Six Months Ended June 30, 2013
(Expressed in thousands of U.S dollars)
| Enstar | Arden Re | Adjustment Entries |
Combined | |||||||||||||
| INCOME |
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| Net premiums earned |
$ | 107,257 | $ | 15,314 | $ | — | $ | 122,571 | ||||||||
| Consulting fees |
5,407 | — | — | 5,407 | ||||||||||||
| Other income |
— | 40 | — | 40 | ||||||||||||
| Net investment income |
45,215 | 371 | — | 45,586 | ||||||||||||
| Net realized and unrealized gains |
2,201 | 154 | — | 2,355 | ||||||||||||
| Net foreign exchange gains |
— | 174 | (174 | )(a) | — | |||||||||||
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| 160,080 | 16,053 | (174 | ) | 175,959 | ||||||||||||
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| EXPENSES |
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| Net (reduction) increase in loss and loss adjustment expense liabilities |
(10,162 | ) | 16,954 | (1,784 | )(b) | 5,008 | ||||||||||
| Life and annuity policy benefits |
30,223 | — | — | 30,223 | ||||||||||||
| Acquisition costs |
— | 1,720 | — | 1,720 | ||||||||||||
| Salaries and benefits |
49,297 | — | — | 49,297 | ||||||||||||
| General and administrative expenses |
37,948 | 105 | — | 38,053 | ||||||||||||
| Interest expense |
5,526 | — | 778 | (c) | 6,304 | |||||||||||
| Net foreign exchange gains |
(3,321 | ) | — | (174 | )(a) | (3,495 | ) | |||||||||
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| 109,511 | 18,779 | (1,180 | ) | 127,110 | ||||||||||||
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| EARNINGS (LOSS) BEFORE INCOME TAXES AND NONCONTROLLING INTEREST |
50,569 | (2,726 | ) | 1,006 | 48,849 | |||||||||||
| INCOME TAXES |
(12,386 | ) | (40 | ) | — | (12,426 | ) | |||||||||
| NONCONTROLLING INTEREST |
(7,027 | ) | — | 704 | (d) | (6,323 | ) | |||||||||
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| NET EARNINGS (LOSS) |
$ | 31,156 | $ | (2,766 | ) | $ | 1,710 | $ | 30,100 | |||||||
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| Earnings per share - basic |
$ | 1.89 | $ | 1.82 | ||||||||||||
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| Earnings per share - diluted |
$ | 1.87 | $ | 1.80 | ||||||||||||
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| Weighted average ordinary shares outstanding - basic |
16,519,640 | 16,519,640 | ||||||||||||||
| Weighted average ordinary shares outstanding - diluted |
16,685,444 | 16,685,444 | ||||||||||||||
Notes
| (a) | Adjustments to reclassify Arden Re’s net foreign exchange losses to conform to Enstar’s accounting presentation. |
| (b) | Represents amortization of fair value adjustments of losses and loss adjustment expenses. |
| (c) | Represents interest expense on the borrowing under Enstar’s revolving credit facility based on the assumption that the borrowing used to fund the acquisition was made as at January 1, 2013. |
| (d) | Represents the 40% share of Arden Re’s net loss for the six months ended June 30, 2013 that is attributable to noncontrolling interest, as well as the noncontrolling interest’s 40% share of the cumulative adjustment entries. |