ASPEN INSURANCE HOLDINGS LTD - FORM 8-K - EX-99.2 - EARNINGS RELEASE SUPPLEMENT

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8-K - FORM 8-K - ASPEN INSURANCE HOLDINGS LTD	d338907d8k.htm
EX-99.1 - PRESS RELEASE OF THE REGISTRANT - ASPEN INSURANCE HOLDINGS LTD	d338907dex991.htm

Exhibit 99.2



		FINANCIAL SUPPLEMENT
		As of March 31, 2012
		Aspen Insurance Holdings Limited
		This financial supplement is for information purposes only. It should be read in conjunction with other documents filed or to be filed by Aspen Insurance Holdings Limited with the United States Securities and Exchange Commission.
		www.aspen.co
		Investor Contact:
		Aspen Insurance Holdings Limited
		Kerry Calaiaro, Senior Vice President, Investor Relations
		T: +1 646-502-1076
		email: kerry.calaiaro@aspen.co

		AHL: NYSE



		ASPEN INSURANCE HOLDINGS LIMITED
		Table Of Contents


	Page

Basis of Presentation		1

Change in Definition - Return on Equity and Operating Return on Equity		2

Financial Highlights		3

Consolidated Statements of Operations - Quarterly Results		4

Consolidated Statements of Operations - Year to Date Results		5

Consolidated Balance Sheets		6

Earnings Per Share and Book Value Per Share		7

Return on Average Equity		8

Consolidated Underwriting Results by Operating Segment		9

Operating Segment - Quarterly Results		10-11

Written and Earned Premiums by Segment and Line of Business		12

Accident Year Loss Ratios		13

Consolidated Statements of Changes in Shareholders’ Equity		14

Consolidated Statements of Comprehensive Income		15

Consolidated Statements of Cash Flows		16

Reserves for Losses and Loss Adjustment Expenses		17

Reserves by Operating Segment		18

Prior Year Reserve Releases		19

Ratings of Reinsurers		20

Consolidated Investment Portfolio		21-22

Investment Analysis		23

Book Value Per Ordinary Share		24

Diluted Share Analysis		25

Operating Income/(Loss) Reconciliation		26

ASPEN INSURANCE HOLDINGS LIMITED

Basis of Presentation

Definitions and presentation: All financial information contained herein is unaudited except for information for the fiscal year ended December 31, 2011. Unless otherwise noted, all data is in U.S. dollars millions, except for per share amounts, percentages and ratio information.

In presenting Aspen’s results, management has included and discussed certain “non-GAAP financial measures”, as such term is defined in Regulation G. Management believes that these non-GAAP measures, which may be defined differently by other companies, better explain Aspen’s results of operations in a manner that allows for a more complete understanding of the underlying trends in Aspen’s business. However, these measures should not be viewed as a substitute for those determined in accordance with GAAP. The reconciliation of such non-GAAP financial measures to their respective most directly comparable GAAP financial measures in accordance with Regulation G is included in this financial supplement.

Operating income (a non-GAAP financial measure): Operating income is an internal performance measure used by Aspen in the management of its operations and represents after-tax operational results excluding, as applicable, after-tax net realized capital gains or losses, including net realized and unrealized gains and losses on interest rate swaps, and after-tax net foreign exchange gains or losses, including net realized and unrealized gains and losses on foreign exchange contracts.

Aspen excludes these items from its calculation of operating income because the amount of these gains or losses is heavily influenced by, and fluctuates in part, according to the availability of market opportunities. Aspen believes these amounts are largely independent of its business and underwriting process and including them would distort the analysis of trends in its operations. In addition to presenting net income in accordance with GAAP, Aspen believes that showing operating income enables investors, analysts, rating agencies and other users of its financial information to more easily analyze Aspen’s results of operations in a manner similar to how management analyzes Aspen’s underlying business performance. Operating income should not be viewed as a substitute for GAAP net income. Please see page 26 for a reconciliation of operating income to net income.

Annualized Operating Return on Average Equity (“Operating ROE”) (a non-GAAP financial measure): Annualized Operating Return on Average Equity is calculated using operating income, as defined above, and average equity calculated as the arithmetic average on a monthly basis for the stated periods of shareholders’ equity excluding the aggregate value of the liquidation preferences of our preference shares.

Aspen presents Operating ROE as a measure that is commonly recognized as a standard of performance by investors, analysts, rating agencies and other users of its financial information. See page 26 for a reconciliation of operating income to net income and page 8 for a reconciliation of average equity to closing shareholders’ equity.

Diluted Operating Earnings Per Share and Basic Operating Earnings Per Share (non-GAAP financial measures): Aspen believes that the presentation of diluted operating earnings per share and basic operating earnings per share supports meaningful comparison from period to period and the analysis of normal business operations. Diluted operating earnings per share and basic operating earnings per share are calculated by dividing operating income by the diluted or basic weighted average number of shares outstanding for the period. See page 26 for a reconciliation of diluted and basic operating earnings per share to basic earnings per share.

Diluted book value per ordinary share (is not a non-GAAP financial measure): Aspen has included diluted book value per ordinary share as it illustrates the effect on basic book value per share of dilutive securities thereby providing a better benchmark for comparison with other companies. Diluted book value per share is calculated using the treasury stock method, defined on page 24.

Underwriting ratios (GAAP financial measures): Aspen, along with others in the industry, uses underwriting ratios as measures of performance. The loss ratio is the ratio of net claims and claims adjustment expenses to net premiums earned. The acquisition expense ratio is the ratio of underwriting expenses (commissions, premium taxes, licenses and fees, as well as other underwriting expenses) to net premiums earned. The general and administrative expense ratio is the ratio of general and administrative expenses to net premiums earned. The combined ratio is the sum of the loss ratio, the acquisition expense ratio and the general and administrative expense ratio. These ratios are relative measurements that describe for every $100 of net premiums earned, the cost of losses and expenses, respectively. The combined ratio presents the total cost per $100 of earned premium. A combined ratio below 100% demonstrates underwriting profit; a combined ratio above 100% demonstrates underwriting loss.

GAAP combined ratios differ from U.S. statutory combined ratios primarily due to the deferral of certain third-party acquisition expenses for GAAP reporting purposes and the use of net premiums earned rather than net premiums written in the denominator when calculating the acquisition expense and the general and administrative expense ratios.

Accident Year Ratios (a non-GAAP financial measure): In addition to the underwriting ratios described above, management also uses accident year ratios to evaluate current underwriting performance. The accident year ratios exclude the effect of prior years’ premium adjustments and reserve developments. This ratio focuses on the relationship between current premiums earned and losses incurred related to the current period. Please see page 13 for a reconciliation of accident year ratios to underwriting ratios calculated in accordance with U.S. GAAP.

ASPEN INSURANCE HOLDINGS LIMITED

Change of Definition

In this financial supplement, we present data for return on equity based on average equity including all components of shareholders’ equity other than the aggregate liquidation preferences of our preference shares. Previously, we excluded net unrealized investment and foreign exchange gains included in Other Comprehensive Income from the definition of average equity for this purpose. This change applies for Net Income ROE and Operating ROE.

Aspen has made this change to bring its definition into line with that used by the majority of our market peers and because we believe it better represents the performance relative to total ordinary shareholders’ accumulated investment in the business and retained earnings. The following table shows the effect of the change in the Annual Operating ROE reported in our financial supplements for the years ended December 31, 2006, 2007, 2008, 2009, 2010 and 2011.


	Annual Operating ROE
		2006	2007	2008	2009	2010	2011
Old Basis		18.4%	21.1%	5.4%	18.0%	9.1%	(3.7%	)
New Basis		18.3%	20.6%	5.2%	16.6%	8.0%	(3.4%	)

All comparative disclosure of ROE in this financial supplement is on the new basis.


		ASPEN INSURANCE HOLDINGS LIMITED

		Financial Highlights

Three Months Ended March 31,

(in US$ millions except for percentages, share and per share amounts)

2012

2011

Change

Gross written premium

$ 782.1

$ 671.3

16.5%

Net written premium

$ 633.5

$ 509.6

24.3%

Net earned premium

$ 495.4

$ 452.4

9.5%

Net income/(loss) after tax ⁽¹⁾

$ 78.7

$ (152.8)

Operating income/(loss) after tax⁽¹⁾

$ 70.5

$ (161.7)

Net investment income

$ 52.4

$ 55.5

Underwriting income/(loss) ⁽¹⁾

$ 30.5

$ (220.4)

Earnings Per Share and Book Value Per Share

Basic earnings per ordinary share

Net income/(loss) adjusted for preference share dividend ⁽¹⁾

$ 1.03

$ (2.25)

Operating income/(loss) adjusted for preference share dividend ⁽¹⁾

$ 0.92

$ (2.38)

Diluted earnings per ordinary share

Net income/(loss) adjusted for preference share dividend ⁽¹⁾

$ 0.99

$ (2.25)

Operating income/(loss) adjusted for preference share dividend ⁽¹⁾

$ 0.88

$ (2.38)

Weighted average number of ordinary shares outstanding (in millions of shares)

70.944

70.552

Diluted weighted average number of ordinary shares outstanding (in millions of shares)

73.832

70.552

Book value per ordinary share⁽¹⁾

$ 39.96

$ 37.96

Diluted book value per ordinary share⁽¹⁾

$ 38.58

$ 36.48

Ordinary shares outstanding at March 31, 2012 and March 31, 2011 (in millions of shares)

71.496

70.731

Diluted ordinary shares outstanding at March 31, 2012 and March 31, 2011 (in millions of shares)

74.064

73.599

Underwriting Ratios

Loss ratio

57.3%

116.9%

Policy acquisition expense ratio

19.4%

18.0%

General, administrative and corporate expense ratio ⁽¹⁾

17.1%

13.8%

Expense ratio⁽¹⁾

36.5%

31.8%

Combined ratio ⁽¹⁾

93.8%

148.7%

Return On Equity

Average equity⁽²⁾

$ 2,829.9

$ 2,780.6

Return on average equity

Net income/(loss) adjusted for preference share dividend ⁽¹⁾

2.6%

(5.7%)

Operating income/(loss) adjusted for preference share dividend ⁽¹⁾

2.3%

(6.0%)

Annualized return on average equity

Net income/(loss) ⁽¹⁾

10.4%

(22.8%)

Operating income/(loss) ⁽¹⁾

9.2%

(24.0%)

See pages 8, 24 and 26 for a reconciliation of non-GAAP financial measures to their most directly comparable GAAP financial measures.

(1) In the current quarter, Aspen adopted the provision of ASU 2010-26, “Accounting for Costs Associated with Acquiring or Renewing Insurance Contracts.” Under the standard, Aspen is required to expense the proportion of its general and administrative deferred acquisition costs not directly related to successful business acquisition. The application of this standard has resulted in a net $16.0 million write down of deferred acquisition costs through retained earnings brought forward and the restatement of our quarterly balance sheets from December 31, 2010 to December 31, 2011.

(2) Average equity excludes preference shares.

ASPEN INSURANCE HOLDINGS LIMITED

Consolidated Statements of Operations - Quarterly


(in US$ millions except for percentages and per share amounts)	Q1 2012		Q4 2011		Q3 2011		Q2 2011		Q1 2011

UNDERWRITING REVENUES
Gross written premiums		$ 782.1		$ 458.7		$ 495.6		$ 582.2		$ 671.3
Premiums ceded		(148.6)		(27.5)		(33.0)		(56.5)		(161.7)

Net written premiums		633.5		431.2		462.6		525.7		509.6
Change in unearned premiums		(138.1)		58.2		24.3		(65.9)		(57.2)

Net earned premiums		495.4		489.4		486.9		459.8		452.4


UNDERWRITING EXPENSES
Losses and loss adjustment expenses		284.0		394.5		306.2		326.4		528.9
Policy acquisition expenses		96.1		85.5		93.4		86.7		81.4
General, administrative and corporate expenses ⁽¹⁾		84.8		79.3		72.1		70.7		62.5

Total underwriting expenses		464.9		559.3		471.7		483.8		672.8

Underwriting income/(loss) including corporate expenses ⁽¹⁾		30.5		(69.9)		15.2		(24.0)		(220.4)


OTHER OPERATING REVENUE AND EXPENSES
Net investment income		52.4		54.2		57.3		58.6		55.5
Interest (expense)		(7.7)		(7.7)		(7.7)		(7.7)		(7.7)
Other (expense)/income		(0.3)		3.6		(9.1)		6.8		(8.1)

Total other operating revenue		44.4		50.1		40.5		57.7		39.7


OPERATING INCOME/(LOSS) BEFORE TAX ⁽¹⁾		74.9		(19.8)		55.7		33.7		(180.7)

Net realized and unrealized exchange gains/(losses) ⁽²⁾		3.7		2.3		0.3		(7.7)		2.9
Net realized and unrealized investment gains/(losses) ⁽³⁾		5.5		6.0		(32.9)		(15.7)		8.5

INCOME/(LOSS) BEFORE TAX ⁽¹⁾		84.1		(11.5)		23.1		10.3		(169.3)
Income tax (expense)/recovery		(5.4)		23.9		(2.0)		(1.2)		16.5

NET INCOME/(LOSS) AFTER TAX ⁽¹⁾		78.7		12.4		21.1		9.1		(152.8)
Dividends paid on ordinary shares		(10.6)		(10.7)		(10.6)		(10.6)		(10.6)
Dividends paid on preference shares		(5.7)		(5.7)		(5.7)		(5.7)		(5.7)
Proportion due to non-controlling interest		0.1		(0.1)		(0.3)		0.2		0.2

Retained income/(loss) ⁽¹⁾		$ 62.5		$ (4.1)		$ 4.5		$ (7.0)		$ (168.9)

Components of net income/(loss) after tax
Operating income/(loss) ⁽¹⁾		$ 70.5		$ 5.0		$ 55.4		$ 30.8		$ (161.7)
Net realized and unrealized exchange gains/(losses) after tax ⁽²⁾		3.0		3.7		(0.8)		(4.8)		1.8
Net realized and unrealized investment gains/(losses) after tax ⁽³⁾		5.2		3.7		(33.5)		(16.9)		7.1

NET INCOME/(LOSS) AFTER TAX ⁽¹⁾		$ 78.7		$ 12.4		$ 21.1		$ 9.1		$ (152.8)


Loss ratio		57.3%		80.6%		62.9%		71.0%		116.9%
Policy acquisition expense ratio		19.4%		17.5%		19.2%		18.9%		18.0%
General, administrative and corporate expense ratio		17.1%		16.2%		14.8%		15.4%		13.8%
Expense ratio		36.5%		33.7%		34.0%		34.3%		31.8%
Combined ratio		93.8%		114.3%		96.9%		105.3%		148.7%

Basic earnings/(losses) per share ⁽⁴⁾		$ 1.03		$ 0.09		$ 0.22		$ 0.05		$ (2.25)
Diluted earnings (losses) per share ⁽⁴⁾		$ 0.99		$ 0.09		$ 0.21		$ 0.05		$ (2.25)

Annualized return on average equity
Net income/(loss) ⁽¹⁾		10.4%		0.8%		2.4%		0.4%		(22.8%)
Operating income/(loss) ⁽¹⁾		9.2%		-		7.2%		3.6%		(24.0%)

See pages 8, 24 and 26 for a reconciliation of non-GAAP financial measures to their most directly comparable GAAP financial measures.

(2) Includes the net realized and unrealized gains/(losses) from foreign exchange contracts.

(3) Includes the net realized and unrealized gains/(losses) from interest rate swaps.

(4) Adjusted for preference share dividend.

ASPEN INSURANCE HOLDINGS LIMITED

Consolidated Statements of Operations – Year To Date


	Three Months Ended March 31,
(in US$ millions except for percentages)	2012		2011		2010
UNDERWRITING REVENUES
Gross written premiums		$ 782.1		$ 671.3		$ 702.8
Premiums ceded		(148.6)		(161.7)		(122.7)

Net written premiums		633.5		509.6		580.1
Change in unearned premiums		(138.1)		(57.2)		(112.5)

Net earned premiums		495.4		452.4		467.6


UNDERWRITING EXPENSES
Losses and loss adjustment expenses		284.0		528.9		378.8
Policy acquisition expenses		96.1		81.4		84.5
General, administrative and corporate expenses ⁽¹⁾		84.8		62.5		52.5

Total underwriting expenses		464.9		672.8		515.8

Underwriting income/(loss) including corporate expenses ⁽¹⁾		30.5		(220.4)		(48.2)


OTHER OPERATING REVENUE AND EXPENSES
Net investment income		52.4		55.5		59.4
Interest (expense)		(7.7)		(7.7)		(3.8)
Other (expense)		(0.3)		(8.1)		(0.9)

Total other operating revenue		44.4		39.7		54.7


OPERATING INCOME/(LOSS) BEFORE TAX ⁽¹⁾		74.9		(180.7)		6.5

Net realized and unrealized exchange gains ⁽²⁾		3.7		2.9		1.5
Net realized and unrealized investment gains ⁽³⁾		5.5		8.5		12.3

INCOME/(LOSS) BEFORE TAX ⁽¹⁾		84.1		(169.3)		20.3
Income tax (expense)/recovery		(5.4)		16.5		(2.0)

NET INCOME/(LOSS) AFTER TAX ⁽¹⁾		78.7		(152.8)		18.3
Dividends paid on ordinary shares		(10.6)		(10.6)		(11.8)
Dividends paid on preference shares		(5.7)		(5.7)		(5.7)
Proportion due to non-controlling interest		0.1		0.2		-

Retained income/(loss) ⁽¹⁾		$ 62.5		$ (168.9)		$ 0.8

Components of net income after tax
Operating income/(loss) ⁽¹⁾		$ 70.5		$ (161.7)		$ 6.1
Net realized and unrealized exchange gains after tax ⁽²⁾		3.0		1.8		1.0
Net realized and unrealized investment gains after tax ⁽³⁾		5.2		7.1		11.2

NET INCOME/(LOSS) AFTER TAX ⁽¹⁾		$ 78.7		$ (152.8)		$ 18.3


Loss ratio		57.3%		116.9%		81.0%
Policy acquisition expense ratio		19.4%		18.0%		18.1%
General, administrative and corporate expense ratio		17.1%		13.8%		11.2%
Expense ratio		36.5%		31.8%		29.3%
Combined ratio		93.8%		148.7%		110.3%

See pages 8, 24 and 26 for a reconciliation of non-GAAP financial measures to their most directly comparable GAAP financial measures.

(2) Includes the net realized and unrealized gains/(losses) from foreign exchange contracts.

(3) Includes the net realized and unrealized gains/(losses) from interest rate swaps.

ASPEN INSURANCE HOLDINGS LIMITED

Consolidated Balance Sheets


(in US$ millions except for per share amounts)	March 31, 2012		December 31, 2011		September 30, 2011		June 30, 2011		March 31, 2011		December 31, 2010
ASSETS
Investments
Fixed income maturities		$5,842.1		$5,820.2		$5,992.8		$5,972.8		$5,896.1		$5,766.6
Equity securities		188.1		179.5		163.8		178.1		173.5		-
Other investments		33.1		33.1		32.3		30.0		30.1		30.0
Short-term investments		433.8		302.3		295.9		202.8		187.6		289.7

Total investments		6,497.1		6,335.1		6,484.8		6,383.7		6,287.3		6,086.3

Cash and cash equivalents		1,173.3		1,239.1		1,038.8		1,074.1		1,116.9		1,179.1
Reinsurance recoverables
Unpaid losses		455.4		426.6		357.7		359.3		334.0		279.9
Ceded unearned premiums		175.3		87.8		129.9		146.2		167.4		62.4
Receivables
Underwriting premiums		1,061.2		894.4		957.2		1,054.3		940.0		821.7
Other		70.2		69.7		69.3		70.0		62.8		67.9
Funds withheld		86.9		90.7		65.1		81.9		86.3		83.3
Deferred policy acquisition costs ⁽¹⁾		215.3		184.5		192.1		191.0		178.2		155.1
Derivatives at fair value		0.9		1.3		5.8		5.7		7.4		6.8
Receivable for securities sold		2.0		1.1		0.5		21.2		10.6		0.2
Office properties and equipment		58.5		53.9		49.5		45.0		38.6		34.8
Income tax receivable		20.3		19.5		2.5		19.9		5.2		-
Other assets		31.1		36.8		31.2		30.2		29.4		21.9
Intangible assets		19.7		20.0		20.3		20.5		20.7		21.0

Total assets		$9,867.2		$9,460.5		$9,404.7		$9,503.0		$9,284.8		$8,820.4


LIABILITIES
Insurance reserves
Losses and loss adjustment expenses		$4,585.7		$4,525.2		$4,399.4		$4,391.7		$4,229.3		$3,820.5
Unearned premiums		1,146.3		916.1		1,014.5		1,086.2		1,028.3		859.0

Total insurance reserves		5,732.0		5,441.3		5,413.9		5,477.9		5,257.6		4,679.5

Payables
Reinsurance premiums		192.2		155.8		135.2		181.6		226.9		113.7
Taxation		22.9		18.5		35.2		49.1		45.3		60.2
Accrued expenses and other payables		208.9		187.8		186.0		204.8		214.5		238.0
Liabilities under derivative contracts		1.3		2.1		-		-		3.5		-

Total payables		425.3		364.2		356.4		435.5		490.2		411.9


Long-term debt		499.0		499.0		498.9		498.9		498.8		498.8

Total liabilities		6,656.3		6,304.5		6,269.2		6,412.3		6,246.6		5,590.2

SHAREHOLDERS’ EQUITY
Ordinary shares		0.1		0.1		0.1		0.1		0.1		0.1
Non-controlling interest		0.3		0.4		0.3		0.1		0.3		0.5
Preference shares		-		-		-		-		-		-
Additional paid-in capital		1,390.8		1,385.0		1,381.8		1,388.2		1,388.2		1,388.3
Retained earnings ⁽¹⁾		1,404.1		1,341.6		1,345.6		1,341.1		1,348.1		1,517.0
Accumulated other comprehensive income, net of taxes		415.6		428.9		407.7		361.2		301.5		324.3

Total shareholders’ equity		3,210.9		3,156.0		3,135.5		3,090.7		3,038.2		3,230.2

Total liabilities and shareholders’ equity		$9,867.2		$9,460.5		$9,404.7		$9,503.0		$9,284.8		$8,820.4


Book value per ordinary share		$39.96		$39.66		$39.41		$38.64		$37.96		$40.80


Book value per diluted ordinary share		$38.58		$38.21		$38.07		$37.24		$36.48		$38.74

See pages 8, 24 and 26 for a reconciliation of non-GAAP financial measures to their most directly comparable GAAP financial measures.

ASPEN INSURANCE HOLDINGS LIMITED

Earnings Per Share and Book Value Per Share


	Three Months Ended
(in US$ except for number of shares)	March 31, 2012		March 31, 2011

Basic earnings per ordinary share
Net income/(loss) adjusted for preference share dividend		$ 1.03		$ (2.25)
Operating income/(loss) adjusted for preference share dividend		$ 0.92		$ (2.38)
Diluted earnings per ordinary share
Net income/(loss) adjusted for preference share dividend		$ 0.99		$ (2.25)
Operating income/(loss) adjusted for preference share dividend		$ 0.88		$ (2.38)

Weighted average number of ordinary shares outstanding (in millions)		70.944		70.552
Weighted average number of ordinary shares outstanding and dilutive potential ordinary shares (in millions)		73.832		70.552

Book value per ordinary share		$ 39.96		$ 37.96
Diluted book value per ordinary share		$ 38.58		$ 36.48

Ordinary shares outstanding at end of the period (in millions)		71.496		70.731
Ordinary shares outstanding and dilutive potential ordinary shares at end of the period (in millions)		74.064		73.599

The basic and diluted number of ordinary shares for the three months ended March 31, 2011 is the same, as the inclusion of dilutive securities in a loss-making period would be anti-dilutive.

See pages 8, 24 and 26 for a reconciliation of non-GAAP financial measures to their most directly comparable GAAP financial measures.

ASPEN INSURANCE HOLDINGS LIMITED

Return On Average Equity


	Three Months Ended
(in US$ millions except for percentages)	March 31, 2012		March 31, 2011

Average shareholders’ equity⁽¹⁾		$3,183.5		$3,134.2
Average preference shares		(353.6)		(353.6)

Average equity⁽²⁾		$2,829.9		$2,780.6


Return on average equity:
Net income/(loss) adjusted for preference share dividend		2.6%		(5.7%)
Operating income/(loss) adjusted for preference share dividend		2.3%		(6.0%)

Annualized return on average equity:
Net income/(loss)		10.4%		(22.8%)
Operating income/(loss)		9.2%		(24.0%)

Components of return on average equity:
Return on average equity from underwriting activity ⁽³⁾		1.1%		(8.0%)
Return on average equity from investment and other activity ⁽⁴⁾		1.4%		2.3%
Pre-tax operating income/(loss) return on average equity		2.4%		(6.7%)
Post-tax operating income/(loss) return on average equity ⁽⁵⁾		2.3%		(6.0%)

See pages 24 and 26 for a reconciliation of non-GAAP financial measures to their most directly comparable GAAP financial measures.

(2) Using the revised definition of average equity detailed on page 2 which excludes other comprehensive income from the calculation as previously reported.

(3) Calculated by using underwriting income.

(4) Calculated by using total other operating revenue and other income/(expense) adjusted for preference share dividends.

(5) Calculated by using operating income after-tax adjusted for preference share dividends.

ASPEN INSURANCE HOLDINGS LIMITED

Consolidated Underwriting Results by Operating Segment

Three Months Ended March 31, 2012

Three Months Ended March 31, 2011

(in US$ millions except for percentages)

Reinsurance

Insurance

Total

Reinsurance

Insurance

Total

Gross written premiums

$474.2

$307.9

$782.1

$437.1

$234.2

$671.3

Net written premiums

429.5

204.0

633.5

388.4

121.2

509.6

Gross earned premiums

290.2

266.9

557.1

284.8

224.0

508.8

Net earned premiums

271.0

224.4

495.4

272.0

180.4

452.4

Losses and loss adjustment expenses

135.6

148.4

284.0

410.1

118.8

528.9

Policy acquisition expenses

51.8

44.3

96.1

49.4

32.0

81.4

General and administrative expenses ⁽¹⁾

29.0

41.4

70.4

25.0

29.8

54.8

Underwriting income/(loss) ⁽¹⁾

$54.6

$(9.7)

$44.9

$(212.5)

$(0.2)

$(212.7)

Net investment income

52.4

55.5

Net realized and unrealized investment gains ⁽²⁾

5.5

8.5

Corporate (expenses)

(14.4)

(7.7)

Other (expenses)

(0.3)

(8.1)

Interest (expenses)

(7.7)

(7.7)

Net realized and unrealized foreign exchange gains ⁽³⁾

3.7

2.9

Income/(loss) before income taxes

$84.1

$(169.3)

Income tax (expense)/recovery

(5.4)

16.5

Net income/(loss)

$78.7

$(152.8)

Ratios

Loss ratio

50.0%

66.1%

57.3%

150.8%

65.9%

116.9%

Policy acquisition expense ratio

19.1%

19.7%

19.4%

18.2%

17.7%

18.0%

General and administrative expense ratio ^(1,4)

10.7%

18.4%

17.1%

9.2%

16.5%

13.8%

Expense ratio

29.8%

38.1%

36.5%

27.4%

34.2%

31.8%

Combined ratio

79.8%

104.2%

93.8%

178.2%

100.1%

148.7%

(2) Includes the net realized and unrealized gains/(losses) from interest rate swaps.

(3) Includes the net realized and unrealized gains/(losses) from foreign exchange contracts.

(4) The total group general and administrative expense ratio includes the impact from corporate expenses.

ASPEN INSURANCE HOLDINGS LIMITED

Reinsurance Segment - Quarterly Results


(in US$ millions except for percentages)	Q1 2012		Q4 2011		Q3 2011		Q2 2011		Q1 2011

Gross written premiums		$474.2		$186.3		$276.1		$288.0		$437.1
Net written premiums		429.5		182.3		270.5		256.9		388.4
Gross earned premiums		290.2		311.9		303.2		290.7		284.8
Net earned premiums		271.0		288.7		279.6		268.0		272.0
Net losses and loss adjustment expenses		135.6		278.1		188.8		206.3		410.1
Policy acquisition expenses		51.8		47.4		51.8		49.1		49.4
General and administrative expenses ⁽¹⁾		29.0		33.2		26.8		26.9		25.0

Underwriting income/(loss) ⁽¹⁾		$54.6		$(70.0)		$12.2		$(14.3)		$(212.5)


Ratios
Loss ratio		50.0%		96.3%		67.5%		77.0%		150.8%
Policy acquisition expense ratio		19.1%		16.4%		18.5%		18.3%		18.2%
General and administrative expense ratio		10.7%		11.5%		9.6%		10.0%		9.2%
Expense ratio		29.8%		27.9%		28.1%		28.3%		27.4%
Combined ratio		79.8%		124.2%		95.6%		105.3%		178.2%

ASPEN INSURANCE HOLDINGS LIMITED

Insurance Segment - Quarterly Results


(in US$ millions except for percentages)	Q1 2012		Q4 2011		Q3 2011		Q2 2011		Q1 2011

Gross written premiums		$307.9		$272.4		$219.5		$294.2		$234.2
Net written premiums		204.0		248.9		192.1		268.8		121.2
Gross earned premiums		266.9		245.7		246.7		234.1		224.0
Net earned premiums		224.4		200.7		207.3		191.8		180.4
Net losses and loss adjustment expenses		148.4		116.4		117.4		120.1		118.8
Policy acquisition expenses		44.3		38.1		41.6		37.6		32.0
General and administrative expenses ⁽¹⁾		41.4		33.5		34.9		29.8		29.8

Underwriting (loss)/income ⁽¹⁾		$(9.7)		$12.7		$13.4		$4.3		$(0.2)


Ratios
Loss ratio		66.1%		58.0%		56.6%		62.6%		65.9%
Policy acquisition expense ratio		19.7%		19.0%		20.1%		19.6%		17.7%
General and administrative expense ratio		18.4%		16.7%		16.8%		15.5%		16.5%
Expense ratio		38.1%		35.7%		36.9%		35.1%		34.2%
Combined ratio		104.2%		93.7%		93.5%		97.7%		100.1%

ASPEN INSURANCE HOLDINGS LIMITED

Written and Earned Premiums by Segment and Line of Business

(in US$ millions)


Gross Written Premium	Q1 2012		Q4 2011		Q3 2011		Q2 2011		Q1 2011
Reinsurance
Property Catastrophe Reinsurance		$152.9		$9.4		$53.5		$93.0		$151.0
Other Property Reinsurance		78.5		64.8		78.6		70.9		64.8
Casualty Reinsurance		138.9		42.5		83.4		44.6		138.6
Specialty Reinsurance		103.9		69.6		60.6		79.5		82.7

Total Reinsurance		$474.2		$186.3		$276.1		$288.0		$437.1

Insurance
Property Insurance		$73.6		$65.7		$42.5		$73.6		$38.6
Casualty Insurance		35.0		46.6		38.1		32.9		19.6
Marine, Energy and Transportation Insurance		149.6		107.6		70.5		130.3		123.8
Financial and Professional Lines Insurance		49.7		52.5		68.4		57.4		52.2

Total Insurance		$307.9		$272.4		$219.5		$294.2		$234.2



Total Gross Written Premiums		$782.1		$458.7		$495.6		$582.2		$671.3

Net Written Premium
Reinsurance
Property Catastrophe Reinsurance		$123.5		$9.2		$53.5		$69.6		$116.1
Other Property Reinsurance		64.8		61.0		73.8		63.5		53.3
Casualty Reinsurance		137.3		42.5		82.6		44.3		136.4
Specialty Reinsurance		103.9		69.6		60.6		79.5		82.6

Total Reinsurance		$429.5		$182.3		$270.5		$256.9		$388.4

Insurance
Property Insurance		$40.0		$58.7		$31.2		$65.2		$1.6
Casualty Insurance		26.4		34.7		31.2		24.9		10.5
Marine, Energy and Transportation Insurance		140.7		107.5		59.8		121.5		98.8
Financial and Professional Lines Insurance		(3.1)		48.0		69.9		57.2		10.3

Total Insurance		$204.0		$248.9		$192.1		$268.8		$121.2



Total Net Written Premiums		$633.5		$431.2		$462.6		$525.7		$509.6

Net Earned Premium
Reinsurance
Property Catastrophe Reinsurance		$62.9		$60.4		$52.1		$58.5		$71.6
Other Property Reinsurance		68.2		70.0		64.4		57.0		60.1
Casualty Reinsurance		66.9		75.7		95.3		75.7		82.4
Specialty Reinsurance		73.0		82.6		67.8		76.8		57.9

Total Reinsurance		$271.0		$288.7		$279.6		$268.0		$272.0

Insurance
Property Insurance		$42.4		$38.8		$28.0		$29.1		$28.2
Casualty Insurance		27.9		24.6		25.4		26.5		25.4
Marine, Energy and Transportation Insurance		102.6		100.4		96.6		99.2		93.3
Financial and Professional Lines Insurance		51.5		36.9		57.3		37.0		33.5

Total Insurance		$224.4		$200.7		$207.3		$191.8		$180.4



Total Net Earned Premiums		$495.4		$489.4		$486.9		$459.8		$452.4

ASPEN INSURANCE HOLDINGS LIMITED

Accident Year Ratios

Three Months Ended March 31, 2012

Three Months Ended March 31, 2011

Reinsurance

Insurance

Total

Reinsurance

Insurance

Total

Before Accident Year Adjustment

Loss ratio

50.0%

66.1%

57.3%

150.8%

65.9%

116.9%

Policy acquisition expense ratio

19.1

19.7

19.4

18.2

17.7

18.0

General and administrative expense ratio ^(1,2)

10.7

18.4

17.1

9.2

16.5

13.8

Expense ratio ⁽²⁾

29.8

38.1

36.5

27.4

34.2

31.8

Combined ratio ⁽²⁾

79.8%

104.2%

93.8%

178.2%

100.1%

148.7%

Accident Year Adjustment

Loss ratio

10.8%

6.4%

8.7%

8.3%

1.4%

5.8%

Policy acquisition expense ratio

0.2

(1.4)

(0.9)

General and administrative expense ratio ⁽¹⁾

0.1

0.6

0.3

0.2

0.1

Expense ratio

0.3

0.8

0.5

(1.4)

0.2

(0.8)

Combined ratio

11.1%

7.2%

9.2%

6.9%

1.6%

5.0%

Accident Year Ratios

Current accident year loss ratio

60.8%

72.5%

66.0%

159.1%

67.3%

122.7%

Policy acquisition expense ratio

19.3

19.9

19.6

16.8

17.7

17.1

General and administrative expense ratio ⁽¹⁾

10.8

19.0

17.4

9.2

16.7

13.9

Expense ratio

30.1

38.9

37.0

26.0

34.4

31.0

Combined ratio

90.9%

111.4%

103.0%

185.1%

101.7%

153.7%

(1) The total group general and administrative expense ratio includes the impact from corporate expenses.

(2) In the current quarter, Aspen adopted the provision of ASU 2010-26, “Accounting for Costs Associated with Acquiring or Renewing Insurance Contracts.” Under the standard, Aspen is required to expense the proportion of its general and administrative deferred acquisition costs not directly related to successful business acquisition. The application of this standard has resulted in a net $16.0 million write down of deferred acquisition costs through retained earnings brought forward and the restatement of our quarterly balance sheets from December 31, 2010 to December 31, 2011.

ASPEN INSURANCE HOLDINGS LIMITED

Consolidated Statements of Changes in Shareholders’ Equity


	Three Months Ended March 31,
(in US$ millions)	2012		2011
Ordinary shares
Beginning and end of period		$0.1		$0.1

Preference shares
Beginning and end of period		-		-

Non-Controlling interest
Beginning of period		0.4		0.5
Change in non-controlling interest for the period		(0.1)		(0.2)

End of period		0.3		0.3

Additional paid-in capital
Beginning of period		1,385.0		1,388.3
New shares issued		1.3		0.5
Ordinary shares repurchased		-		(1.7)
Share-based compensation		4.5		1.1

End of period		1,390.8		1,388.2

Retained earnings
Beginning of period ⁽¹⁾		1,341.6		1,517.0
Net income/(loss) for the period⁽¹⁾		78.7		(152.8)
Dividends paid on ordinary and preference shares		(16.3)		(16.3)
Proportion due to non-controlling interest		0.1		0.2

End of period ⁽¹⁾		1,404.1		1,348.1

Accumulated other comprehensive income:
Cumulative foreign currency translation adjustments, net of taxes:
Beginning of period		124.2		113.4
Change for the period		(1.5)		5.6

End of period		122.7		119.0

Loss on derivatives:
Beginning of period		(0.7)		(1.0)
Reclassification to interest payable		-		0.1

End of period		(0.7)		(0.9)

Unrealized appreciation/(depreciation) on investments, net of taxes:
Beginning of period		305.4		211.9
Change for the period		(11.8)		(28.5)

End of period		293.6		183.4

Total accumulated other comprehensive income		415.6		301.5

Total shareholders’ equity		$3,210.9		$3,038.2

ASPEN INSURANCE HOLDINGS LIMITED

Consolidated Statements of Comprehensive Income


	Three Months Ended March 31,
(in US$ millions)	2012		2011

Net income/(loss) ⁽¹⁾		$78.7		$(152.8)

Other comprehensive income/(loss), net of taxes:
Available for sale investments:
Reclassification adjustment for net realized (gains) included in net income		(0.9)		(7.0)
Change in net unrealized gains and losses on available for sale securities held		(10.9)		(21.5)
Loss on derivatives reclassified to interest expense		-		0.1
Change in foreign currency translation adjustment		(1.5)		5.6

Other comprehensive (loss)		(13.3)		(22.8)

Comprehensive income/(loss) ⁽¹⁾		$65.4		$(175.6)

ASPEN INSURANCE HOLDINGS LIMITED

Condensed Consolidated Statements of Cash Flows


	Three Months Ended March 31,
(in US$ millions)	2012		2011

Net cash from operating activities		$99.4		$154.9
Net cash (used in) investing activities		(156.3)		(214.8)
Net cash (used in) financing activities		(15.0)		(17.7)
Effect of exchange rate movements on cash and cash equivalents		6.1		15.4

Increase in cash and cash equivalents		(65.8)		(62.2)
Cash at beginning of period		1,239.1		1,179.1

Cash at end of period		$1,173.3		$1,116.9


		ASPEN INSURANCE HOLDINGS LIMITED

		Reserves for Losses and Loss Adjustment Expenses


(in US$ millions)	For the Three Months Ended March 31, 2012		For the Twelve Months Ended December 31, 2011

Provision for losses and loss adjustment expenses at the start of the period		$4,525.2		$3,820.5
Reinsurance recoverables		(426.6)		(279.9)

Net loss and loss adjustment expenses at the start of the period		4,098.6		3,540.6


Net loss and loss adjustment expenses disposed		(8.8)		(20.6)


Provision for losses and loss adjustment expenses for claims incurred
Current period		321.0		1,648.3
Prior period release		(37.0)		(92.3)

Total incurred		284.0		1,556.0


Losses and loss adjustment expenses payments for claims incurred		(260.8)		(982.2)


Foreign exchange losses		17.3		4.8


Net loss and loss adjustment expenses reserves at the end of the period		4,130.3		4,098.6
Reinsurance recoverables on unpaid losses at the end of the period		455.4		426.6

Gross loss and loss adjustment expenses reserves at the end of the period		$4,585.7		$4,525.2


		ASPEN INSURANCE HOLDINGS LIMITED

		Reserves by Operating Segment

(in US$ millions)

As At March 31, 2012

As At December 31, 2011

Gross

Reinsurance
Recoverables

Net

Gross

Reinsurance
Recoverables

Net

Reinsurance

$2,934.8

$(191.8)

$2,743.0

$2,953.5

$(183.5)

$2,770.0

Insurance

1,650.9

(263.6)

1,387.3

1,571.7

(243.1)

1,328.6

Total losses and loss adjustment expense reserves

$4,585.7

$(455.4)

$4,130.3

$4,525.2

$(426.6)

$4,098.6


		ASPEN INSURANCE HOLDINGS LIMITED

		Prior Year Reserve Releases

(in US$ millions)

Three Months Ended March 31, 2012

Three Months Ended March 31, 2011

Gross

Reinsurance
Recoverables

Net

Gross

Reinsurance
Recoverables

Net

Reinsurance

$24.5

$3.6

$28.1

$21.7

$(0.9)

$20.8

Insurance

3.4

5.5

8.9

(9.6)

10.7

1.1

Release in reserves for prior years during the period

$27.9

$9.1

$37.0

$12.1

$9.8

$21.9


		ASPEN INSURANCE HOLDINGS LIMITED

		Ratings of Reinsurers


(in US$ millions except for percentages)
	As at March 31, 2012			As at December 31, 2011

S&P
AA+		$6.6	1.4%		$6.6	1.5%
AA		1.4	0.3		0.1	-
AA-		99.7	22.0		110.4	25.9
A+		178.6	39.3		159.4	37.4
A		14.5	3.2		14.8	3.5
A-		13.7	3.0		17.5	4.1
BBB+		0.2	-		0.1	-
BBB		0.2	-		0.3	0.1
F ⁽¹⁾		0.6	0.1		0.6	0.1
Fully collateralized		98.9	21.7		95.1	22.3
Not rated		41.0	9.0		21.7	5.1

		$455.4	100.0%		$426.6	100.0%


A.M. Best
A++		$6.8	1.5%		$6.6	1.5%
A+		124.5	27.3		99.7	23.4
A		191.5	42.1		209.0	49.0
A-		15.8	3.5		10.5	2.5
F ⁽¹⁾		0.6	0.1		0.6	0.1
Fully collateralized		98.9	21.7		95.1	22.3
Not rated		17.3	3.8		5.1	1.2

		$455.4	100.0%		$426.6	100.0%

(1) The A.M. Best rating of “F” denotes liquidation. We have not reduced the carrying value of the recoverable from this particular reinsurer as a trust account exists to replace the potentially insufficient reserves.


		ASPEN INSURANCE HOLDINGS LIMITED

		Consolidated Investment Portfolio

(in US$ millions except for percentages)


	As At March 31, 2012
Marketable Securities - Available For Sale	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Market Value		As At March 31, 2012		As At December 31, 2011		As At September 30, 2011		As At June 30, 2011		As At March 31, 2011

U.S. government securities		$852.6		$45.8		$(0.6)		$897.8		11.6%		12.1%		11.8%		10.3%		10.6%
U.S. agency securities		309.2		22.1		-		331.3		4.3		3.9		3.7		3.8		3.9
Municipal securities		36.6		2.1		-		38.7		0.5		0.5		0.5		0.4		0.3
Corporate securities		1,757.8		132.4		(1.1)		1,889.1		24.5		24.1		26.0		26.6		26.4
Foreign government securities		594.2		25.4		(0.1)		619.5		8.0		8.7		9.0		9.9		9.7
Asset-backed securities		58.9		4.5		-		63.4		0.8		0.8		0.8		0.8		0.8
FDIC guaranteed		63.5		0.1		-		63.6		0.8		1.0		1.2		1.5		1.6
Bonds backed by foreign government		154.7		3.8		-		158.5		2.1		2.2		2.5		2.6		3.0
Mortgage-backed securities		1,306.3		76.7		(0.3)		1,382.7		17.9		17.8		18.6		18.6		17.9

Total fixed income maturities		5,133.8		312.9		(2.1)		5,444.6		70.5%		71.1%		74.1%		74.5%		74.2%
Short-term investments		423.5		-		-		423.5		5.5		3.9		3.8		2.7		2.4
Equity securities		174.8		18.4		(5.1)		188.1		2.4		2.4		2.2		2.4		2.3

Total Available For Sale		$5,732.1		$331.3		$(7.2)		$6,056.2		78.4%		77.4%		80.1%		79.6%		78.9%


Marketable Securities - Trading
U.S. government securities		$37.5		$0.2		$(0.3)		$37.4		0.5%		0.4%		0.2%		0.1%		0.1%
U.S. agency securities		1.6		0.2		-		1.8		0.1		-		-		-		-
Municipal securities		2.8		0.1		-		2.9		0.1		-		-		-		-
Corporate securities		324.5		18.3		(0.9)		341.9		4.4		4.6		4.6		4.8		4.6
Foreign government securities		12.0		0.9		-		12.9		0.2		0.1		0.1		0.1		0.1
Asset-backed securities		0.6		-		-		0.6		-		-		0.1		0.1		0.1

Total fixed income maturities		379.0		19.7		(1.2)		397.5		5.3%		5.1%		5.0%		5.1%		4.9%
Short-term investments		10.3		-		-		10.3		0.1		0.1		0.1		-		0.1

Total Trading		$389.3		$19.7		$(1.2)		$407.8		5.4%		5.2%		5.1%		5.1%		5.0%


Other investments								$33.1		0.4%		0.4%		0.4%		0.4%		0.4%

Cash								1,173.3		15.2%		16.3%		13.7%		14.2%		15.0%
Accrued interest								48.7		0.6		0.7		0.7		0.7		0.7

Total Cash and Accrued Interest								$1,222.0		15.8%		17.0%		14.4%		14.9%		15.7%


Total Cash and Investments								$7,719.1		100.0%		100.0%		100.0%		100.0%		100.0%


		ASPEN INSURANCE HOLDINGS LIMITED

		Consolidated Investment Portfolio

(in US$ millions)

Maturity of Available For Sale Portfolio

As At March 31, 2012

As At December 31, 2011

Amortized
Cost

Fair Market
Value

Amortized
Cost

Fair Market
Value

Due in one year or less

$693.9

$702.8

$726.0

$732.9

Due after one year through five years

1,939.0

2,042.3

1,955.0

2,057.9

Due after five years through ten years

1,047.1

1,152.9

997.9

1,112.3

Due after ten years

88.6

100.5

91.4

108.0

Subtotal

3,768.6

3,998.5

3,770.3

4,011.1

Non-agency commercial mortgage-backed securities

75.4

84.6

77.1

85.4

Agency mortgage-backed securities

1,230.9

1,298.1

1,195.9

1,268.3

Other asset-backed securities

58.9

63.4

56.4

61.0

Total

$5,133.8

$5,444.6

$5,099.7

$5,425.8


		ASPEN INSURANCE HOLDINGS LIMITED

		Investment Analysis


(in US$ millions except for percentages)	Q1 2012		Q4 2011		Q3 2011		Q2 2011		Q1 2011

Net investment income from fixed income investments and cash		$51.0		$52.9		$55.6		$55.6		$55.3
Net investment income from equity securities		1.4		1.3		1.7		3.0		0.2

Net investment income		52.4		54.2		57.3		58.6		55.5
Net realized and unrealized investment gains ⁽¹⁾		9.0		8.9		3.2		9.8		8.4
Change in unrealized (losses)/gains on available for sale investments (gross of tax)		(11.7)		6.1		71.6		52.1		(33.6)

Total return on investments		$49.7		$69.2		$132.1		$120.5		$30.3



Portfolio Characteristics
Fixed income portfolio book yield		3.31%		3.37%		3.54%		3.64%		3.65%
Fixed income portfolio duration		3.0 years		2.9 years		3.1 years		3.1 years		3.2 years

(1) Excludes the net realized and unrealized gains/(losses) from the interest rate swaps and includes the net realized and unrealized gains/(losses) on the trading portfolio.


		ASPEN INSURANCE HOLDINGS LIMITED

		Book Value Per Ordinary Share


(in US$ millions except for number of shares and per share amounts)	March 31, 2012		December 31, 2011		September 30, 2011		June 30, 2011		March 31, 2011

Net assets⁽¹⁾		$3,210.9		$3,156.0		$3,135.5		$3,090.7		$3,038.2
Less: Preference shares		(353.6)		(353.6)		(353.6)		(353.6)		(353.6)

Total		$2,857.3		$2,802.4		$2,781.9		$2,737.1		$2,684.6


Ordinary shares outstanding (in millions)		71.496		70.656		70.595		70.833		70.731


Ordinary shares and dilutive potential ordinary shares (in millions)		74.064		73.339		73.079		73.492		73.599


Book value per ordinary share		$39.96		$39.66		$39.41		$38.64		$37.96

Diluted book value per ordinary share		$38.58		$38.21		$38.07		$37.24		$36.48

The dilutive effect of options has been calculated using the treasury stock method. The treasury stock method assumes that the proceeds received from the exercise of options will be used to purchase Aspen’s ordinary shares at the average market price during the period of calculation.


		ASPEN INSURANCE HOLDINGS LIMITED

		Diluted Share Analysis


	Three Months Ended March 31,
	2012		2011
Weighted average ordinary shares outstanding (millions)
Basic		70.944		70.552
Dilutive share equivalents:
Employee options		0.688		-
Options issued to Appleby Trust (Bermuda) Limited (Names’ Trust)		0.089		-
Performance shares		1.597		-
Restricted share units		0.514		-
PIERS ⁽¹⁾		-		-

Weighted average diluted shares outstanding		73.832		70.552

The basic and diluted number of ordinary shares for the three months ended March 31, 2011 is the same, as the inclusion of dilutive securities in a loss-making period would be anti-dilutive.

(1) Preferred Income Equity Replacement Securities (PIERS)


		ASPEN INSURANCE HOLDINGS LIMITED

		Operating Income/(Loss) Reconciliation

Net (loss)/income is adjusted to exclude after-tax change in net foreign exchange gains and losses and realized gains and losses in investments.


	Three Months Ended
	March 31, 2012		March 31, 2011
(in US$ millions except where stated)

Net income/(loss) as reported ⁽¹⁾		$78.7		$(152.8)
Preference share dividends		(5.7)		(5.7)

Net income/(loss) available to ordinary shareholders ⁽¹⁾		73.0		(158.5)

Add (deduct) after tax income:
Net foreign exchange (gains)		(3.0)		(1.8)
Net realized (gains) on investments		(5.2)		(7.1)

Operating income/(loss) after tax available to ordinary shareholders ⁽¹⁾		64.8		(167.4)

Tax on operating income/(loss)		4.4		(19.0)

Operating income/(loss) before tax available to ordinary shareholders ⁽¹⁾		$69.2		$(186.4)


Weighted average ordinary shares outstanding (millions)
Basic		70.944		70.552
Dilutive share equivalents:
Employee options		0.688		-
Options issued to Appleby Trust (Bermuda) Limited (Names Trust)		0.089		-
Performance shares		1.597		-
Restricted share units		0.514		-
PIERS ⁽²⁾		-		-

Weighted average diluted shares outstanding		73.832		70.552


Basic earnings per ordinary share
Net income/(loss) adjusted for preference share dividend ⁽¹⁾		$1.03		$(2.25)
Add (deduct) after tax income:
Net foreign exchange (gains)		(0.04)		(0.03)
Net realized (gains) on investments		(0.07)		(0.10)

Operating income/(loss) adjusted for preference shares dividend ⁽¹⁾		$0.92		$(2.38)


Diluted earnings per ordinary share
Net income/(loss) adjusted for preference share dividend ⁽¹⁾		$0.99		$(2.25)
Add (deduct) after tax income:
Net foreign exchange (gains)		(0.04)		(0.03)
Net realized (gains) on investments		(0.07)		(0.10)

Operating income/(loss) adjusted for preference shares dividend ⁽¹⁾		$0.88		$(2.38)

The basic and diluted number of ordinary shares for the three months ended March 31, 2011 in the table above is the same, as the inclusion of dilutive securities in a loss-making period would be anti-dilutive.

(2) Preferred Income Equity Replacement Securities (PIERS)

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