Maiden Holdings, Ltd.
Feb 27, 2018
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Maiden Holdings, Ltd. Announces Fourth Quarter and Full Year 2017 Financial Results

Highlights for the Fourth Quarter and Full Year Ended December 31, 2017

HAMILTON, Bermuda, Feb. 27, 2018 (GLOBE NEWSWIRE) -- Maiden Holdings, Ltd. (NASDAQ:MHLD) ("Maiden" or "the Company") today reported a fourth quarter 2017 net loss attributable to Maiden common shareholders of $133.6 million or $1.59 per diluted common share compared to net loss attributable to Maiden common shareholders of $74.7 million or $0.87 per diluted common share in the fourth quarter of 2016.  The non-GAAP operating loss(11) was $138.7 million, or $1.65 per diluted common share compared with a non-GAAP operating loss of  $69.7 million, or $0.81 per diluted common share in the fourth quarter of 2016.

"While we are disappointed with our results for the fourth quarter, we believe we have taken significant steps to strengthen our reserves for losses which will help to accelerate a return to profitability in 2018 and beyond," said Art Raschbaum, Chief Executive Officer of Maiden.  "Our reserve actions in the fourth quarter reflect a more aggressive response to observed development in the quarter and throughout the year on the AmTrust Reinsurance segment as well as our Diversified segment. Despite these actions, Maiden's inception to date AmTrust underwriting results remain profitable and with the exception of pre-2016 underwriting year commercial auto liability the balance of our U.S. Diversified segment historical portfolio and more recent underwriting years continue to perform profitably and within expectations."
           
"Notwithstanding the reserve actions and re-underwriting processes that have been implemented, we are also actively engaged in efforts to develop and implement further initiatives and strategies aimed at strengthening shareholder value," said Raschbaum. "We are committed to do whatever is necessary to deliver greater value for shareholders, customers, and employees." 

Consolidated Results for the Fourth Quarter Ended December 31, 2017

Maiden reported a fourth quarter 2017 net loss attributable to Maiden common shareholders of $133.6 million or $1.59 per diluted common share compared to net loss attributable to Maiden common shareholders of $74.7 million or $0.87 per diluted common share in the fourth quarter of 2016.   The non-GAAP operating loss(11) was $138.7 million, or $ 1.65 per diluted common share compared with a non-GAAP operating loss of $69.7 million, or $0.81 per diluted common share in the fourth quarter of 2016.

In the fourth quarter of 2017, gross premiums written decreased 2.7% to $556.5 million from $572.1 million in the fourth quarter of 2016. Net premiums written totaled $560.0 million in the fourth quarter of 2017, an increase of 7.5% compared to the same period in 2016.  Net premiums earned were $658.3 million, an increase of 6.8% compared to the fourth quarter of 2016. 

Net loss and loss adjustment expenses of $614.9 million compared to $522.5 million in the fourth quarter of 2016.  The loss ratio(6) in the fourth quarter of 2017 was 93.1% compared to 84.5% reported in the fourth quarter of 2016.

Commission and other acquisition expenses increased 4.9% to $195.2 million in the fourth quarter of 2017, compared to $186.2 million in the fourth quarter of 2016.  General and administrative expenses for the fourth quarter of 2017 totaled $18.3 million, a 6.2% increase compared with $17.2 million in the fourth quarter of 2016. The general and administrative expense ratio(8) remained unchanged at 2.8% in the fourth quarter of 2017, while the expense ratio(9) was 32.4% in the fourth quarter of 2017 compared with 32.9% in the same quarter last year.   

The combined ratio(10) for the fourth quarter of 2017 totaled 125.5% compared with 117.4% in the fourth quarter of 2016. 

Net investment income of $42.9 million in the fourth quarter of 2017 representing an increase of 11.0% compared to the fourth quarter of 2016.  As of December 31, 2017, the average yield on the fixed income portfolio (excluding cash) is 3.1% with an average duration of 4.5 years. 

Diversified Reinsurance Segment

 Three Months Ended December 31,
  2017 2016% Change
Gross premiums written$  138,938$  156,953-11.5%
Net premiums written 135,482 139,597-2.9%
Net premiums earned 199,791 185,9727.4%
    
 

Underwriting Ratios
  % Point
Change
Net loss and LAE ratio(6) 80.9% 97.7%(16.8)
Commission and other acquisition expense ratio(7) 22.9% 25.8%(2.9)
General and administrative expense ratio(8) 4.9% 4.8%0.1
Expense ratio(9) 27.8% 30.6%(2.8)
Combined ratio(10) 108.7% 128.3%(19.6)

Gross premiums written and net premiums written decreased in the fourth quarter of 2017 primarily as a result of commutations and non-renewals earlier in the year.  The segment experienced adverse loss development in 2017 of $31.9 million due to higher than expected loss emergence emanating largely from two commercial auto contracts.

AmTrust Reinsurance Segment

 Three Months Ended December 31,
  2017 2016% Change
Gross premiums written$  417,801$  414,7440. 7%
Net premiums written 424,876 381,03911.5%
Net premiums earned 458,833 429,9226.7%
    
 

Underwriting Ratios
  % Point
Change
Net loss and LAE ratio(6) 98.4% 76.1%22.3
Commission and other acquisition expense ratio(7) 32.5% 31.9%0.6
General and administrative expense ratio(8) 0.2% 0.1%0.1
Expense ratio(9) 32.7% 32.0%0.7
Combined ratio(10) 131.1% 108.1%23.0

Gross premiums written increased slightly during the fourth quarter, with the lower growth attributed to AmTrust underwriting actions.  Net premiums written increased more than gross due to reduced usage of retrocession. The segment experienced adverse loss development of $139.0 million due primarily to workers' compensation and general liability lines of business and, to a lesser extent, commercial auto liability. 

Consolidated Results for the Twelve Months Ended December 31, 2017

Net loss attributable to Maiden common shareholders was $199.1 million or $2.32 per diluted common share in 2017 compared to net income attributable to Maiden common shareholders of $15.2 million or $0.19 per diluted common share in 2016.  The non-GAAP net operating loss(11) for 2017 was $184.9 million, or $2.16 per diluted common share compared with non-GAAP operating income(11) of $17.3 million, or $0.22 per diluted common share in 2016.

In 2017, gross premiums written totaled $2.8 billion, relatively unchanged compared to 2016. In 2017, net premiums written totaled $2.8 billion, an increase of 4.0% compared to 2016.  Net premiums earned of $2.7 billion increased 6.4% compared to $2.6 billion in 2016. 

Net loss and loss adjustment expenses of $2.2 billion were up 18.7% compared to $1.8 billion in 2016. The loss ratio(6) increased to 78.8% compared to 70.6% reported in 2016.

Commission and other acquisition expenses, increased 6.1% to $820.8 million in 2017 compared to $773.7 million in 2016. General and administrative expenses for 2017 totaled $70.6 million compared with $67.0 million in 2016. The general and administrative expense ratio(8) was unchanged at 2.6% in 2017 and the expense ratio(9) declined incrementally to 32.5% compared to 32.6% in 2016.

The combined ratio(10) for 2017 was 111.3% an increase from the 103.2% combined ratio reported for 2016. 

Net investment income of $166.3 million in 2017 increased 14.0% compared to $145.9 million in 2016 due to an increase in investable assets and incrementally higher portfolio yields.

Diversified Reinsurance Segment

  Twelve Months Ended December 31,
   2017 2016% Change
Gross premiums written$  822,777$  824,341-0.2%
Net premiums written 807,362 766,1195.4%
Net premiums earned 823,365 724,12413.7%
     
 

Underwriting Ratios
   % Point
Change
Net loss and LAE ratio(6) 78.1% 78.9%(0.8)
Commission and other acquisition expense ratio(7) 24.7% 25.6%(0.9)
General and administrative expense ratio(8) 4.3% 4.9%(0.6)
Expense ratio(9) 29.0% 30.5%(1.5)
Combined ratio(10) 107.1% 109.4%(2.3)

Gross premiums written decreased modestly in 2017 due primarily to the commutation and return of unearned premium of a large account in the second quarter of 2017.  Net premiums written increased   as a result of the reduction of corporate retrocessional programs in 2017. The segment experienced adverse development of $71.4 million in 2017 compared to $96.8 million in 2016 due to higher than expected loss emergence with over half from two commercial auto accounts.
             

AmTrust Reinsurance Segment

 Twelve Months Ended December 31,
  2017 2016% Change
Gross premiums written$  1,993,478$  2,006,646(0.7%)
Net premiums written 1,954,856 1,888,4283.5%
Net premiums earned 1,909,644 1,843,6213.6%
    
 

Underwriting Ratios
  % Point
Change
Net loss and LAE ratio(6) 78.4% 66.5%11.9
Commission and other acquisition expense ratio(7) 32.2% 31.7%0.5
General and administrative expense ratio(8) 0.2% 0.2%0.0
Expense ratio(9) 32.4% 31.9%0.5
Combined ratio(10) 110.8% 98.4%12.4

Gross premiums written decreased marginally due to slower organic growth offset by reductions in AmTrust's Specialty Program segment reflecting underwriting initiatives focused on improving the profitability of these classes of business.  Net premiums written increased in 2017 compared to 2016 due to the lower utilization of retrocessional capacity in 2017. The segment experienced adverse loss development of $239.9 million during 2017 compared to $54.0 million in 2016.  More than half of the loss development in 2017 was from workers' compensation with general liability and, to a lesser extent, commercial auto, contributing to the adverse result.

Other Financial Matters

(1)(11) Please see the Non-GAAP Financial Measures table for additional information on these non-GAAP financial measures and reconciliation of these measures to GAAP measures.

(6)(8)(9)(10) Loss ratio, general and administrative expense ratio, expense ratio and combined ratio are non-GAAP operating metrics. Please see the additional information on these measures under Non-GAAP Financial Measures tables.

Conference Call
Maiden's Chief Executive Officer, Art Raschbaum and Chief Financial Officer, Karen Schmitt will review these results on Wednesday, February 28, 2018 via teleconference and live audio webcast beginning at 8:30 a.m. ET.

To participate in the conference call, please access one of the following at least five minutes prior to the start time: U.S. Callers: 1.877.734.5373, Outside U.S. Callers: 1.973.200.3059, Passcode: 7193318, Webcast: http://www.maiden.bm/news_events

A replay of the conference call will be available beginning at 11:30 a.m. ET on February 28, 2018 through 11:30 a.m. ET on March 8, 2018. To listen to the replay, please dial toll free: 1.855.859.2056 (U.S. Callers) or toll: 1.404.537.3406 (callers outside the U.S.) and enter the Passcode: 7193318; or access http://www.maiden.bm/news_events

About Maiden Holdings, Ltd.
Maiden Holdings, Ltd. is a Bermuda-based holding company formed in 2007.  Through its subsidiaries, which are each A rated (excellent) by A.M. Best, the Company is focused on providing non-catastrophic, customized reinsurance products and services to small and mid-size insurance companies in the United States and Europe. As of December 31, 2017, Maiden had $6.6 billion in assets and shareholders' equity of $1.2 billion.

Forward Looking Statements
This release contains "forward-looking statements" which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The forward-looking statements are based on the Company's current expectations and beliefs concerning future developments and their potential effects on the Company. There can be no assurance that actual developments will be those anticipated by the Company. Actual results may differ materially from those projected as a result of significant risks and uncertainties, including non-receipt of the expected payments, changes in interest rates, effect of the performance of financial markets on investment income and fair values of investments, developments of claims and the effect on loss reserves, accuracy in projecting loss reserves, the impact of competition and pricing environments, changes in the demand for the Company's products, the effect of general economic conditions and unusual frequency of storm activity, adverse state and federal legislation, regulations and regulatory investigations into industry practices, developments relating to existing agreements, heightened competition, changes in pricing environments, and changes in asset valuations. Additional information about these risks and uncertainties, as well as others that may cause actual results to differ materially from those projected is contained in Item 1A. Risk Factors in the Company's Annual Report on Form 10-K for the year ended December 31, 2016 as updated in periodic filings with the SEC. However these factors should not be construed as exhaustive. Forward-looking statements speak only as of the date they are made and the Company undertakes no obligation to update or revise any forward-looking statement that may be made from time to time, whether as a result of new information, future developments or otherwise, except as required by law. 

CONTACT:
 
Bill Horning, Senior Vice President, Investor Relations
Maiden Holdings, Ltd.
Phone: 856.359.2532
E-mail: Bhorning@maiden.bm

 


Maiden Holdings, Ltd.
Consolidated Balance Sheets 
(in thousands (000's), except per share data)
 
   December 31, 2017  December 31, 2016
    (Unaudited)  (Audited)
 Assets     
 Fixed maturities, available-for-sale, at fair value (Amortized cost 2017: $4,027,993 ; 2016: $4,005,642)$  4,044,370   $  3,971,666  
 Fixed maturities, held-to-maturity, at amortized cost (Fair value 2017: $1,125,626; 2016: $766,135)   1,097,801      752,212  
 Other investments, at fair value (Cost 2017: $5,219; 2016: $10,057)   6,600      13,060  
 Total investments   5,148,771      4,736,938  
 Cash and cash equivalents   67,919      45,747  
 Restricted cash and cash equivalents   123,584      103,788  
 Accrued investment income   34,993      36,517  
 Reinsurance balances receivable, net    345,043      410,166  
 Reinsurance recoverable on unpaid losses   117,611      99,936  
 Loan to related party    167,975      167,975  
 Deferred commission and other acquisition expenses, net   439,597      424,605  
 Goodwill and intangible assets, net   75,583      77,715  
 Other assets   123,113      148,912  
 Total Assets$  6,644,189   $  6,252,299  
 Liabilities and  Equity     
 Liabilities     
 Reserve for loss and loss adjustment expenses$  3,547,248   $  2,896,496  
 Unearned premiums    1,477,038      1,475,506  
 Accrued expenses and other liabilities   132,795      167,736  
 Senior notes - principal amount   262,500      362,500  
 Less: unamortized debt issuance costs   8,018      11,091  
 Senior notes, net   254,482      351,409  
 Total Liabilities   5,411,563      4,891,147  
       
 Commitments and Contingencies     
       
 Equity     
 Preference Shares   465,000      315,000  
 Common shares   877      873  
 Additional paid-in capital   748,113      749,256  
 Accumulated other comprehensive income   13,354      14,997  
 Retained earnings   35,472      285,662  
 Treasury shares, at cost   (30,642)    (4,991)
 Total Maiden Shareholders' Equity   1,232,174      1,360,797  
 Noncontrolling interest in subsidiaries   452      355  
 Total Equity   1,232,626      1,361,152  
 Total Liabilities and Equity$  6,644,189   $  6,252,299  
       
       
 Book value per common share(1)$  9.25   $  12.12  
       
 Common shares outstanding 82,974,895   86,271,109 
       
       
     -      -  
       

 

Maiden Holdings, Ltd.
Consolidated Statements of Income
(in thousands (000's), except per share data)
(Unaudited)
            
 For the Three Months Ended December 31,  For the Year Ended December 31, 
Revenues: 2017 2016 2017 2016
Gross premiums written$  556,454   $  572,058   $  2,816,051   $  2,831,348  
Net premiums written$  560,038   $  521,041   $  2,761,988   $  2,654,952  
Change in unearned premiums   98,266     95,258     (29,209)    (86,802)
Net premiums earned   658,304     616,299     2,732,779     2,568,150 
Other insurance revenue   1,986     2,121     9,802     10,817 
Net investment income   42,853     38,601     166,345     145,892 
Net realized gains on investment    3,906     2,263     12,222     6,774 
Total revenues   707,049     659,284     2,921,148     2,731,633 
Expenses:           
Net loss and loss adjustment expenses   614,854     522,545     2,160,011     1,819,906 
Commission and other acquisition expenses    195,228     186,163     820,758     773,664 
General and administrative expenses   18,308     17,246     70,560     66,984 
Total expenses   828,390     725,954     3,051,329     2,660,554 
            
Non-GAAP (loss) income from operations(2)   (121,341)    (66,670)    (130,181)    71,079  
            
Other expenses:           
Interest and amortization expenses   (4,830)    (6,859)    (23,260)    (28,173)
Accelerated amortization of senior note issuance cost   -      -      (2,809)    (2,345)
Amortization of intangible assets   (533)    (615)    (2,132)    (2,461)
Foreign exchange (losses) gains   (2,728)    5,138     (14,921)    11,612 
Total other expenses   (8,091)    (2,336)    (43,122)    (21,367)
            
(Loss) income before income taxes   (129,432)    (69,006)    (173,303)    49,712  
Less: income tax (benefit) expense   (4,575)    368     (3,558)    1,574 
            
Net (loss) income   (124,857)    (69,374)    (169,745)    48,138  
Add: net (income) loss attributable to noncontrolling interest   (185)    676     (151)    842 
Net (loss) income attributable to Maiden    (125,042)    (68,698)    (169,896)    48,980  
Dividends on preference shares(3)   (8,545)    (6,033)    (29,156)    (33,756)
Net (loss) income attributable to Maiden common shareholders$  (133,587) $  (74,731) $  (199,052) $  15,224  
            
Basic (loss) earnings per common share attributable to Maiden shareholders$  (1.59) $  (0.87) $  (2.32) $  0.20  
Diluted (loss) earnings  per common share attributable to Maiden shareholders(15)$  (1.59) $  (0.87) $  (2.32) $  0.19  
Dividends declared per common share$  0.15   $  0.15   $  0.60   $  0.57  
Annualized return on average common equity -61.5%  -26.0%  -22.0%  1.6%
            
Weighted average number of common shares - basic   83,962,325     86,198,686     85,678,232     77,534,860 
Adjusted weighted average number of common shares and assumed conversions - diluted(15)   83,962,325     86,198,686     85,678,232     78,686,943 
            

 

Maiden Holdings, Ltd.
Supplemental Financial Data - Segment Information
(in thousands (000's))
(Unaudited)
                 
For the Three Months Ended December 31, 2017 Diversified Reinsurance  AmTrust Reinsurance  Other  Total 
Gross premiums written $  138,938   $  417,801   $  (285)  $  556,454  
Net premiums written $  135,482   $  424,876   $  (320)  $  560,038  
Net premiums earned $199,791   $458,833   $  (320)  $658,304  
Other insurance revenue  1,986      -       -     1,986  
Net loss and loss adjustment expenses ("loss and LAE")    (163,157)     (451,659)     (38)     (614,854) 
Commissions and other acquisition expenses    (46,238)     (148,988)     (2)     (195,228) 
General and administrative expenses(4)    (9,998)     (812)     -       (10,810) 
Underwriting loss(5)  $  (17,616)  $  (142,626)  $  (360)  $  (160,602) 
                 
Reconciliation to net loss                
Net investment income and realized gains on investment                46,759  
Interest and amortization expenses                (4,830) 
Amortization of intangible assets                (533) 
Foreign exchange losses                (2,728) 
Other general and administrative expenses(4)                (7,498) 
Income tax benefit                4,575  
Net loss             $  (124,857) 
                 
                 
Net loss and LAE ratio(6)  80.9%   98.4%       93.1% 
Commission and other acquisition expense ratio(7)  22.9%   32.5%       29.6% 
General  and administrative expense ratio(8)  4.9%   0.2%       2.8% 
Expense ratio(9)  27.8%   32.7%       32.4% 
Combined ratio(10)  108.7%   131.1%       125.5% 
                 
                 
                 
                 
For the Three Months Ended December 31, 2016 Diversified Reinsurance  AmTrust Reinsurance  Other  Total 
Gross premiums written $  156,953   $  414,744   $  361   $  572,058  
Net premiums written $  139,597   $  381,039   $  405   $  521,041  
Net premiums earned $185,972   $429,922   $  405   $  616,299  
Other insurance revenue  2,121      -       -       2,121  
Net loss and LAE    (183,802)     (327,127)     (11,616)     (522,545) 
Commissions and other acquisition expenses    (48,611)     (137,216)     (336)     (186,163) 
General and administrative expenses(4)    (8,964)     (588)     -       (9,552) 
Underwriting loss(5)  $  (53,284)  $  (35,009)  $  (11,547)  $  (99,840) 
                 
Reconciliation to net loss                
Net investment income and realized gains on investment                40,864  
Interest and amortization expenses                (6,859) 
Amortization of intangible assets                (615) 
Foreign exchange gains                5,138  
Other general and administrative expenses(4)                (7,694) 
Income tax expense                (368) 
Net loss             $  (69,374) 
                 
Net loss and LAE ratio(6)  97.7%   76.1%       84.5% 
Commission and other acquisition expense ratio(7)  25.8%   31.9%       30.1% 
General  and administrative expense ratio(8)  4.8%   0.1%       2.8% 
Expense ratio(9)  30.6%   32.0%       32.9% 
Combined ratio(10)  128.3%   108.1%       117.4% 
                 

 

Maiden Holdings, Ltd.
Supplemental Financial Data - Segment Information
(in thousands (000's))
(Unaudited)
                
                
                
For the Year Ended December 31, 2017 Diversified Reinsurance  AmTrust Reinsurance  Other  Total
Gross premiums written $822,777   $  1,993,478   $  (204)  $  2,816,051 
Net premiums written $807,362   $1,954,856   $  (230)  $  2,761,988 
Net premiums earned $823,365   $1,909,644   $  (230)  $  2,732,779 
Other insurance revenue    9,802      -       -       9,802 
Net loss and LAE    (650,916)     (1,498,881)     (10,214)     (2,160,011)
Commissions and other acquisition expenses    (205,982)     (614,777)     1      (820,758)
General and administrative expenses(4)    (35,817)     (3,052)     -       (38,869)
Underwriting loss(5)  $  (59,548)  $  (207,066)  $  (10,443)  $  (277,057)
                
Reconciliation to net loss               
Net investment income and realized gains on investment                178,567 
Interest and amortization expenses                (23,260)
Accelerated amortization of senior note issuance cost                (2,809)
Amortization of intangible assets                (2,132)
Foreign exchange losses                (14,921)
Other general and administrative expenses(4)                (31,691)
Income tax benefit                3,558 
                
Net loss             $  (169,745)
                
Net loss and LAE ratio(6)  78.1%   78.4%       78.8%
Commission and other acquisition expense ratio(7)  24.7%   32.2%       29.9%
General  and administrative expense ratio(8)  4.3%   0.2%       2.6%
Expense ratio(9)  29.0%   32.4%       32.5%
Combined ratio(10)  107.1%   110.8%       111.3%
                
                
For the Year Ended December 31, 2016 Diversified Reinsurance  AmTrust Reinsurance  Other  Total
Gross premiums written $  824,341   $  2,006,646   $  361   $  2,831,348 
Net premiums written $  766,119   $1,888,428   $  405   $  2,654,952 
Net premiums earned $724,124   $1,843,621   $  405   $2,568,150 
Other insurance revenue    10,817      -       -     10,817 
Net loss and LAE    (579,520)     (1,225,830)     (14,556)     (1,819,906)
Commissions and other acquisition expenses    (188,506)     (584,820)     (338)     (773,664)
General and administrative expenses(4)    (35,681)     (2,896)     -       (38,577)
Underwriting (loss) income(5)  $  (68,766)  $  30,075   $  (14,489)  $  (53,180)
                
Reconciliation to net income               
Net investment income and realized gains on investment                152,666 
Interest and amortization expenses                (28,173)
Accelerated amortization of senior note issuance cost                (2,345)
Amortization of intangible assets                (2,461)
Foreign exchange gains                11,612 
Other general and administrative expenses(4)                (28,407)
Income tax expense                (1,574)
Net income             $  48,138 
                
Net loss and LAE ratio(6)  78.9%   66.5%       70.6%
Commission and other acquisition expense ratio(7)  25.6%   31.7%       30.0%
General  and administrative expense ratio(8)  4.9%   0.2%       2.6%
Expense ratio(9)  30.5%   31.9%       32.6%
Combined ratio(10)  109.4%   98.4%       103.2%
                

 

Maiden Holdings, Ltd.
Non - GAAP Financial Measures
(in thousands (000's), except per share data)
(Unaudited)
             
  For the Three Months Ended December 31,  For the Year Ended December 31, 
  2017  2016  2017  2016 
            
Non-GAAP operating (loss) earnings attributable to Maiden common shareholders(11)$  (138,673) $  (69,680) $  (184,899) $  17,294 
Non-GAAP basic operating (loss) earnings per common share attributable to Maiden shareholders$  (1.65) $  (0.81) $  (2.16) $  0.22 
Non-GAAP diluted operating (loss) earnings per common share attributable to Maiden shareholders(15)$  (1.65) $  (0.81) $  (2.16) $  0.22 
Annualized non-GAAP operating return on average common equity(12) -63.9%  -24.3%  -20.4%  1.9%
             
Reconciliation of net (loss) income attributable to Maiden common shareholders to non-GAAP operating (loss) earnings attributable to Maiden common shareholders:           
Net (loss) income attributable to Maiden common shareholders$  (133,587) $  (74,731) $  (199,052) $  15,224 
Add (subtract)           
 Net realized gains on investment    (3,906)    (2,263)    (12,222)    (6,774)
 Foreign exchange losses (gains)   2,728     (5,138)    14,921     (11,612)
 Amortization of intangible assets   533     615     2,132     2,461 
 Divested excess and surplus ("E&S") business and NGHC run-off   360     11,547     10,443     14,489 
 Accelerated amortization of senior note issuance cost   -      -      2,809     2,345 
 Non-cash deferred tax (benefit) expense    (4,801)    290     (3,930)    1,161 
Non-GAAP operating (loss) earnings attributable to Maiden common shareholders(11)$  (138,673) $  (69,680) $  (184,899) $  17,294  
             
Weighted average number of common shares - basic   83,962,325     86,198,686     85,678,232     77,534,860 
Adjusted weighted average number of common shares and assumed conversions - diluted(15)   83,962,325     86,198,686     85,678,232     78,686,943 
             
Reconciliation of diluted (loss) earnings per common share attributable to Maiden shareholders to non-GAAP diluted operating (loss) earnings per common share attributable to Maiden shareholders:           
Diluted (loss) earnings per common share attributable to Maiden shareholders(15)$  (1.59) $  (0.87) $  (2.32) $  0.19 
             
Add (subtract)           
 Net realized gains on investment    (0.05)    (0.03)    (0.14)    (0.09)
 Foreign exchange losses (gains)   0.03     (0.06)    0.17     (0.15)
 Amortization of intangible assets   0.01     0.02     0.03     0.03 
 Divested E&S business and NGHC run-off   0.01     0.13     0.12     0.19 
 Accelerated amortization of senior note issuance cost   -      -      0.03     0.03 
 Non-cash deferred tax (benefit) expense    (0.06)    -      (0.05)    0.02 
Non-GAAP diluted operating (loss) earnings per common share attributable to Maiden shareholders(15)$  (1.65) $  (0.81) $  (2.16) $  0.22  
             
Reconciliation of net (loss) income attributable to Maiden to non-GAAP (loss) income from operations:           
Net (loss) income attributable to Maiden $  (125,042) $  (68,698) $  (169,896) $  48,980 
Add (subtract)           
 Foreign exchange losses (gains)   2,728     (5,138)    14,921     (11,612)
 Amortization of intangible assets   533     615     2,132     2,461 
 Interest and amortization expenses   4,830     6,859     23,260     28,173 
 Accelerated amortization of senior note issuance cost   -      -      2,809     2,345 
 Income tax (benefit) expense    (4,575)    368     (3,558)    1,574 
 Net income (loss) attributable to noncontrolling interest   185     (676)    151     (842)
Non-GAAP (loss) income from operations(2)$  (121,341) $  (66,670) $  (130,181) $  71,079  
             

 

Maiden Holdings, Ltd. 
Non - GAAP Financial Measures 
(in thousands (000's), except per share data) 
(Unaudited) 
        
  December 31, 2017 December 31, 2016 
Investable assets:      
Total investments$  5,148,771 $  4,736,938 
Cash and cash equivalents   67,919    45,747 
Restricted cash and cash equivalents   123,584    103,788 
Loan to related party   167,975    167,975 
Total investable assets(13)$  5,508,249  $  5,054,448  
        
  December 31, 2017 December 31, 2016 
Capital:      
Preference shares$  465,000  $   315,000 
Common shareholders' equity   767,174    1,045,797 
Total Maiden shareholders' equity   1,232,174    1,360,797 
2016 Senior Notes   110,000    110,000 
2013 Senior Notes   152,500    152,500 
2012 Senior Notes   -     100,000 
Total capital resources(14)$  1,494,674  $  1,723,297  
        
        
        
(1) Book value per common share is calculated using Maiden common shareholders' equity (shareholders' equity excluding the aggregate liquidation value of our preference shares) divided by the number of common shares outstanding.
 
        
(2) Non-GAAP (loss) income from operations is a non-GAAP financial measure defined by the Company as net (loss) income attributable to Maiden excluding foreign exchange and other gains and losses, amortization of intangible assets, interest and amortization expenses, accelerated amortization of senior note issuance cost, income tax (benefit) expense and net income or loss attributable to noncontrolling interest and should not be considered as an alternative to net (loss) income.  The Company's management believes that non-GAAP (loss) income from operations is a useful measure of the Company's underlying earnings fundamentals based on its underwriting and investment income before financing costs. This (loss) income from operations enables readers of this information to more clearly understand the essential operating results of the Company. The Company's measure of non-GAAP (loss) income from operations may not be comparable to similarly titled measures used by other companies.  
        
(3) Dividends on preference shares consist of $3,093 and $12,375 paid to Preference shares - Series A for the three and twelve months ended December 31, 2017 and 2016, respectively, $2,940 paid to Preference shares - Series C for the three months ended December 31, 2017 and 2016, and $11,756 and $12,410 for the twelve months ended December 31, 2017 and 2016, respectively, and $2,512 and $5,025 paid to Preference shares - Series D for the three and twelve months ended December 31, 2017. It also includes $0 and $8,971 paid to Preference Shares - Series B during the three and twelve months ended December 31, 2016, respectively. On September 15, 2016, each of then outstanding Preference share - Series B were automatically converted into 12,069,090 of the Company's common shares at a conversion rate of 3.6573 per preference share.
 
        
(4) Underwriting related general and administrative expenses is a non-GAAP measure and includes expenses which are segregated for analytical purposes as a component of underwriting income. 
        
(5) Underwriting (loss) income is a non-GAAP measure and is calculated as net premiums earned plus other insurance revenue less net loss and LAE, commission and other acquisition expenses and general and administrative expenses directly related to underwriting activities. Management believes that this measure is important in evaluating the underwriting performance of the Company and its segments. This measure is also a useful tool to measure the profitability of the Company separately from the investment results and is also a widely used performance indicator in the insurance industry. 
        
(6) Calculated by dividing net loss and LAE by the sum of net premiums earned and other insurance revenue. 
        
(7) Calculated by dividing commission and other acquisition expenses by the sum of net premiums earned and other insurance revenue. 
        
(8) Calculated by dividing general and administrative expenses by the sum of net premiums earned and other insurance revenue. 
        
(9) Calculated by adding together the commission and other acquisition expense ratio and general and administrative expense ratio. 
        
(10) Calculated by adding together the net loss and LAE ratio and the expense ratio. 
        
(11) Non-GAAP operating (loss) earnings is a non-GAAP financial measure defined by the Company as net (loss) income attributable to Maiden common shareholders excluding realized and unrealized investment gains and losses, foreign exchange and other gains and losses, amortization of intangible assets, divested E&S business and NGHC run-off, accelerated amortization of senior note issuance cost and non-cash deferred tax (benefit) expense and should not be considered as an alternative to net (loss) income. The Company's management believes that non-GAAP operating (loss) earnings is a useful indicator of trends in the Company's underlying operations. The Company's measure of non-GAAP operating (loss) earnings may not be comparable to similarly titled measures used by other companies.  
        
(12) Non-GAAP operating return on average common equity is a non-GAAP financial measure. Management uses non-GAAP operating return on average common shareholders' equity as a measure of profitability that focuses on the return to Maiden common shareholders. It is calculated using non-GAAP operating (loss) earnings attributable to Maiden common shareholders divided by average Maiden common shareholders' equity.  
        
(13) Investable assets is the total of the Company's investments, cash and cash equivalents and loan to a related party. 
        
(14) Total capital resources is the sum of the Company's principal amount of debt and Maiden shareholders' equity. 
        
(15) During a period of loss, the basic weighted average common shares outstanding is used in the denominator of the diluted loss per common share computation as the effect of including potential dilutive shares would be anti-dilutive.