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Primus Guaranty, Ltd. Reports First Quarter 2014 Results (5/12/14)

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Enterprising Investor Member Level  Tuesday, 05/13/14 09:23:50 AM
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Primus Guaranty, Ltd. Reports First Quarter 2014 Results (5/12/14)

HAMILTON, Bermuda--(BUSINESS WIRE)--Primus Guaranty, Ltd. (“Primus Guaranty” or “the Company”) (OTC PINK:PRSG) today announced its financial results for the first quarter ended March 31, 2014.

• GAAP net income available to common shares for the first quarter 2014 was $1.9 million, or $0.09 per diluted share, compared with GAAP net income available to common shares of $18.9 million, or $0.72 per diluted share, for the first quarter 2013.

• Economic Results for the first quarter 2014 were $2.2 million, or $0.10 per diluted share, compared with Economic Results of $3.0 million, or $0.12 per diluted share, for the first quarter 2013.

• GAAP book value per common share was $8.97 at March 31, 2014, compared with GAAP book value per common share of $8.89 at December 31, 2013. Economic Results book value per common share was $8.92 at March 31, 2014, compared with Economic Results book value per common share of $8.82 at December 31, 2013.

• At March 31, 2014, the notional principal of Primus Financial Products, LLC (“Primus Financial”)’s consolidated credit swap portfolio totaled $3.0 billion, compared with $3.3 billion at December 31, 2013.

Additional Information

A copy of this press release, the Company’s financial supplement and the full year 2013 audited consolidated financial statements are available in the Investor Relations section of the Company’s Web site at www.primusguaranty.com. Also available on the Web site is a letter dated May 12, 2014 to the shareholders from Richard Claiden, Chief Executive Officer.

Economic Results

In managing its business and assessing its profitability from a strategic and financial planning perspective, the Company believes it is appropriate to consider both its U.S. GAAP net income (loss) available to common shares as well as certain non-GAAP financial measures called “Economic Results”. We define Economic Results as GAAP net income (loss) available to common shares, adjusted as follows:

• Unrealized gains (losses) on credit swaps sold by Primus Financial are excluded from GAAP net income (loss) available to common shares;

• Realized gains from early termination of credit swaps sold by Primus Financial are excluded from GAAP net income (loss) available to common shares;

• Realized gains from early termination of credit swaps sold by Primus Financial are amortized over the period that would have been the remaining life of the credit swap. The amortized gain is included in Economic Results; and

• A net adjustment in provision for credit default swaps on asset-backed securities (“CDS on ABS”) credit events, upon termination or principal write-down of credit swaps, is included in Economic Results.

The Company believes that quarterly fluctuations in the fair market value of Primus Financial’s consolidated credit swap portfolio have little or no effect on the Company's business operations and that Economic Results provides a useful, alternative view of the Company’s economic performance.

About Primus Guaranty

Primus Guaranty, Ltd. is a Bermuda company with offices in New York. Through its subsidiary, Primus Financial Products, LLC, the Company provides protection against the risk of default on primarily investment grade corporate reference entities. Its common shares trade on the OTC Pink Tier of the OTC market. Investors can find market information for the Company on www.otcmarkets.com.

http://www.businesswire.com/news/home/20140512006137/en/Primus-Guaranty-Ltd.-Reports-Quarter-2014-Results#.U3Icuq1OWUk

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