##### 



Odyssey Re Holdings Corp. Reports Third Quarter 2005 Results




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##### 



(1)
    
    Operating income (loss) after tax is a non-GAAP financial measure often used by investors
to evaluate performance in the insurance and reinsurance industry. Operating income (loss)
after tax is equal to net income (loss), excluding net realized capital gains as reported,
net realized capital gains of an equity investee included in net investment income, and
losses on the early extinguishment of debt. Although realized capital gains or losses are an
integral part of the Companys operations, the amount recognized during any particular period
cannot be reasonably estimated and can vary significantly. Management believes that
providing operating income (loss) after tax to investors is a useful supplement to GAAP
information concerning the Companys performance. A reconciliation of net income (loss) to
operating income (loss) after tax and related amounts per common share is as follows (in
millions, except per share amounts):
 Three months ended, (unaudited)September 30, 2005
    
    
    September 30, 2004Per Diluted
    
    
    
    
    
    
    Per Diluted$
    
    
    Share
    
    
    $
    
    
    ShareNet (loss) income
    
    $
    (96.9
    )
    
    $
    (1.51
    )
    
    $
    18.0
    
    
    $
    0.27Net realized capital gains, after tax
    
    
    (57.4
    )
    
    
    (0.89
    )
    
    
    (21.3
    )
    
    
    (0.31
    )Net realized capital gains of an equity investee
included in investment income, after tax
    
    
    (0.8
    )
    
    
    (0.01
    )
    
    
    (0.1
    )
    
    
    Loss on early extinguishment of debt
    
    
    1.7
    
    
    
    0.02
    
    
    
    
    
    
    
    Operating (loss) income, after tax
    
    $
    (153.4
    )
    
    $
    (2.39
    )
    
    $
    (3.4
    )
    
    $
    (0.04
    )
 Nine months ended, (unaudited)September 30, 2005
    
    
    September 30, 2004Per Diluted
    
    
    
    
    
    
    Per Diluted$
    
    
    Share
    
    
    $
    
    
    ShareNet (loss) income
    
    $
    (17.7
    )
    
    $
    (0.28
    )
    
    $
    136.0
    
    
    $
    1.97Net realized capital gains, after tax
    
    
    (62.5
    )
    
    
    (0.98
    )
    
    
    (65.1
    )
    
    
    (0.93
    )Net realized capital gains of an equity investee
included in investment income, after tax
    
    
    (18.1
    )
    
    
    (0.28
    )
    
    
    (0.3
    )
    
    
    Loss on early extinguishment of debt
    
    
    3.7
    
    
    
    0.06
    
    
    
    
    
    
    
    Operating (loss) income, after tax
    
    $
    (94.6
    )
    
    $
    (1.48
    )
    
    $
    70.6
    
    
    $
    1.04




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##### 



ODYSSEY RE HOLDINGS CORP.
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 2005 (UNAUDITED) AND DECEMBER 31, 2004
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
 September 30,
    
    
    December 31,2005
    
    
    2004ASSETSInvestments and cash:Fixed income securities, at fair value (amortized cost $2,642,126 and $2,478,614, respectively)
    
    $
    2,617,077
    
    
    $
    2,505,630Equity securities:Common stocks, at fair value (cost $473,390 and $435,279, respectively)
    
    
    460,314
    
    
    
    453,580Common stocks, at equity
    
    
    556,773
    
    
    
    402,555Short-term investments, at cost which approximates fair value
    
    
    203,066
    
    
    
    213,403Other invested assets
    
    
    186,391
    
    
    
    149,075Cash and cash equivalents
    
    
    1,417,841
    
    
    
    1,150,748Cash collateral for borrowed securities
    
    
    240,987
    
    
    
    176,518Total investments and cash
    
    
    5,682,449
    
    
    
    5,051,509Investment income due and accrued
    
    
    30,163
    
    
    
    39,592Premiums receivable
    
    
    578,457
    
    
    
    550,198Reinsurance recoverables on loss payments
    
    
    127,198
    
    
    
    89,912Reinsurance recoverables on unpaid losses
    
    
    1,177,766
    
    
    
    1,092,082Prepaid reinsurance premiums
    
    
    88,515
    
    
    
    93,774Funds held by ceding insurers
    
    
    174,061
    
    
    
    192,346Deferred acquisition costs
    
    
    177,571
    
    
    
    171,083Federal and foreign income taxes
    
    
    184,388
    
    
    
    102,298Other assets
    
    
    159,143
    
    
    
    138,016Total assets
    
    $
    8,379,711
    
    
    $
    7,520,810LIABILITIESUnpaid losses and loss adjustment expenses
    
    $
    4,932,703
    
    
    $
    4,228,021Unearned premiums
    
    
    875,532
    
    
    
    832,305Reinsurance balances payable
    
    
    151,288
    
    
    
    122,182Funds held under reinsurance contracts
    
    
    162,359
    
    
    
    179,867Debt obligations
    
    
    469,823
    
    
    
    376,040Obligation to return borrowed securities
    
    
    89,919
    
    
    
    56,191Other liabilities
    
    
    146,101
    
    
    
    140,704Total liabilities
    
    
    6,827,725
    
    
    
    5,935,310STOCKHOLDERS EQUITYPreferred stock, $0.01 par value; 200,000,000 shares authorized; 0 shares issued
    
    
    
    
    
    
    Common stock, $0.01 par value; 500,000,000 shares authorized; 65,142,857 shares issued
    
    
    651
    
    
    
    651Additional paid-in capital
    
    
    793,923
    
    
    
    794,055Treasury stock, at cost (34,156 and 387,879 shares, respectively)
    
    
    (843
    )
    
    
    (9,426
    )Unearned compensation
    
    
    (12,103
    )
    
    
    (4,977
    )Accumulated other comprehensive income, net of deferred income taxes
    
    
    125,768
    
    
    
    136,849Retained earnings
    
    
    644,590
    
    
    
    668,348Total stockholders equity
    
    
    1,551,986
    
    
    
    1,585,500Total liabilities and stockholders equity
    
    $
    8,379,711
    
    
    $
    7,520,810




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##### 



ODYSSEY RE HOLDINGS CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
NINE AND THREE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004
(UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
 Nine Months
    
    
    Nine Months
    
    
    Three Months
    
    
    Three MonthsEnded
    
    
    Ended
    
    
    Ended
    
    
    EndedSeptember 30,
    
    
    September 30,
    
    
    September 30,
    
    
    September 30,2005
    
    
    2004
    
    
    2005
    
    
    2004REVENUESGross premiums written
    
    $
    2,020,231
    
    
    $
    1,995,691
    
    
    $
    736,763
    
    
    $
    754,232Ceded premiums written
    
    
    232,675
    
    
    
    221,158
    
    
    
    102,505
    
    
    
    82,949Net premiums written
    
    
    1,787,556
    
    
    
    1,774,533
    
    
    
    634,258
    
    
    
    671,283Increase in unearned premiums
    
    
    (52,419
    )
    
    
    (58,151
    )
    
    
    (41,131
    )
    
    
    (81,276
    )Net premiums earned
    
    
    1,735,137
    
    
    
    1,716,382
    
    
    
    593,127
    
    
    
    590,007Net investment income
    
    
    162,020
    
    
    
    115,650
    
    
    
    46,858
    
    
    
    45,083Net realized investment gains
    
    
    96,151
    
    
    
    100,110
    
    
    
    88,208
    
    
    
    32,854Total revenues
    
    
    1,993,308
    
    
    
    1,932,142
    
    
    
    728,193
    
    
    
    667,944EXPENSESLosses and loss adjustment expenses
    
    
    1,518,222
    
    
    
    1,219,936
    
    
    
    711,923
    
    
    
    472,618Acquisition costs
    
    
    352,982
    
    
    
    385,400
    
    
    
    111,386
    
    
    
    127,911Other underwriting expenses
    
    
    104,024
    
    
    
    94,189
    
    
    
    36,659
    
    
    
    30,309Other expense, net
    
    
    19,612
    
    
    
    7,804
    
    
    
    5,347
    
    
    
    2,848Interest expense
    
    
    21,992
    
    
    
    19,205
    
    
    
    8,075
    
    
    
    6,406Loss on early extinguishment of debt
    
    
    3,738
    
    
    
    
    
    
    
    1,678
    
    
    
    Total expenses
    
    
    2,020,570
    
    
    
    1,726,534
    
    
    
    875,068
    
    
    
    640,092(Loss) income before income taxes
    
    
    (27,262
    )
    
    
    205,608
    
    
    
    (146,875
    )
    
    
    27,852Federal and foreign income tax provision (benefit):Current
    
    
    47,717
    
    
    
    83,123
    
    
    
    (5,421
    )
    
    
    22,110Deferred
    
    
    (57,309
    )
    
    
    (13,542
    )
    
    
    (44,513
    )
    
    
    (12,279
    )Total federal and foreign income tax (benefit) provision
    
    
    (9,592
    )
    
    
    69,581
    
    
    
    (49,934
    )
    
    
    9,831NET (LOSS) INCOME
    
    $
    (17,670
    )
    
    $
    136,027
    
    
    $
    (96,941
    )
    
    $
    18,021BASICWeighted average common shares outstanding
    
    
    64,087,642
    
    
    
    64,332,561
    
    
    
    64,155,438
    
    
    
    64,228,782Basic (loss) earnings per common share
    
    $
    (0.28
    )
    
    $
    2.11
    
    
    $
    (1.51
    )
    
    $
    0.28DILUTEDWeighted average common shares outstanding
    
    
    64,087,642
    
    
    
    70,318,165
    
    
    
    64,155,438
    
    
    
    70,186,153Diluted (loss) earnings per common share
    
    $
    (0.28
    )
    
    $
    1.97
    
    
    $
    (1.51
    )
    
    $
    0.27DIVIDENDSDividends declared per common share
    
    $
    0.094
    
    
    $
    0.094
    
    
    $
    0.031
    
    
    $
    0.031COMPREHENSIVE (LOSS) INCOMENet (loss) income
    
    $
    (17,670
    )
    
    $
    136,027
    
    
    $
    (96,941
    )
    
    $
    18,021Other comprehensive loss, net of tax
    
    
    (11,081
    )
    
    
    (111,093
    )
    
    
    (62,803
    )
    
    
    (8,245
    )Comprehensive (loss) income
    
    $
    (28,751
    )
    
    $
    24,934
    
    
    $
    (159,744
    )
    
    $
    9,776




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##### 



ODYSSEY RE HOLDINGS CORP.
BUSINESS SEGMENTS
NINE AND THREE MONTHS ENDED
SEPTEMBER 30, 2005 AND 2004
(UNAUDITED)
(IN THOUSANDS)
 Nine Months
    
    
    Nine Months
    
    
    
    
    
    
    Three Months
    
    
    Three MonthsEnded
    
    
    Ended
    
    
    
    
    
    
    Ended
    
    
    EndedSeptember 30,
    
    
    September 30,
    
    
    %
    
    
    September 30,
    
    
    September 30,
    
    
    %2005
    
    
    2004
    
    
    Change
    
    
    2005
    
    
    2004
    
    
    ChangeGROSS PREMIUMS WRITTENAmericas
    
    $
    872,680
    
    
    $
    964,118
    
    
    
    (9.5
    )%
    
    $
    315,426
    
    
    $
    345,239
    
    
    
    (8.6
    )%EuroAsia
    
    
    418,439
    
    
    
    420,192
    
    
    
    (0.4
    )
    
    
    135,648
    
    
    
    151,776
    
    
    
    (10.6
    )London Market
    
    
    337,405
    
    
    
    328,428
    
    
    
    2.7
    
    
    
    142,594
    
    
    
    140,827
    
    
    
    1.3U.S. Insurance
    
    
    391,707
    
    
    
    282,953
    
    
    
    38.4
    
    
    
    143,095
    
    
    
    116,390
    
    
    
    22.9Total
    
    $
    2,020,231
    
    
    $
    1,995,691
    
    
    
    1.2
    %
    
    $
    736,763
    
    
    $
    754,232
    
    
    
    (2.3
    )%NET PREMIUMS WRITTENAmericas
    
    $
    823,123
    
    
    $
    918,684
    
    
    
    (10.4
    )%
    
    $
    286,885
    
    
    $
    326,454
    
    
    
    (12.1
    )%EuroAsia
    
    
    396,615
    
    
    
    403,225
    
    
    
    (1.6
    )
    
    
    126,222
    
    
    
    147,523
    
    
    
    (14.4
    )London Market
    
    
    293,494
    
    
    
    287,309
    
    
    
    2.2
    
    
    
    119,182
    
    
    
    125,929
    
    
    
    (5.4
    )U.S. Insurance
    
    
    274,324
    
    
    
    165,315
    
    
    
    65.9
    
    
    
    101,969
    
    
    
    71,377
    
    
    
    42.9Total
    
    $
    1,787,556
    
    
    $
    1,774,533
    
    
    
    0.7
    %
    
    $
    634,258
    
    
    $
    671,283
    
    
    
    (5.5
    )%NET PREMIUMS EARNEDAmericas
    
    $
    812,270
    
    
    $
    897,954
    
    
    
    (9.5
    )%
    
    $
    263,770
    
    
    $
    290,277
    
    
    
    (9.1
    )%EuroAsia
    
    
    394,917
    
    
    
    363,757
    
    
    
    8.6
    
    
    
    123,716
    
    
    
    131,935
    
    
    
    (6.2
    )London Market
    
    
    294,728
    
    
    
    319,552
    
    
    
    (7.8
    )
    
    
    117,177
    
    
    
    116,374
    
    
    
    0.7U.S. Insurance
    
    
    233,222
    
    
    
    135,119
    
    
    
    72.6
    
    
    
    88,464
    
    
    
    51,421
    
    
    
    72.0Total
    
    $
    1,735,137
    
    
    $
    1,716,382
    
    
    
    1.1
    %
    
    $
    593,127
    
    
    $
    590,007
    
    
    
    0.5
    %
 Nine Months
    
    
    Nine Months
    
    
    
    
    
    
    Three Months
    
    
    Three MonthsEnded
    
    
    Ended
    
    
    Percentage
    
    
    Ended
    
    
    Ended
    
    
    PercentageSeptember 30,
    
    
    September 30,
    
    
    Point
    
    
    September 30,
    
    
    September 30,
    
    
    Point2005
    
    
    2004
    
    
    Change
    
    
    2005
    
    
    2004
    
    
    ChangeLOSSES AND LOSS
ADJUSTMENT EXPENSES RATIOAmericas
    
    
    100.9
    %
    
    
    74.8
    %
    
    
    26.1
    
    
    
    151.1
    %
    
    
    91.7
    %
    
    
    59.4EuroAsia
    
    
    66.2
    
    
    
    62.2
    
    
    
    4.0
    
    
    
    64.3
    
    
    
    59.1
    
    
    
    5.2London Market
    
    
    97.5
    
    
    
    72.0
    
    
    
    25.5
    
    
    
    150.1
    
    
    
    82.5
    
    
    
    67.6U.S. Insurance
    
    
    64.3
    
    
    
    67.8
    
    
    
    (3.5
    )
    
    
    65.6
    
    
    
    63.2
    
    
    
    2.4Total
    
    
    87.5
    %
    
    
    71.1
    %
    
    
    16.4
    
    
    
    120.0
    %
    
    
    80.1
    %
    
    
    39.9ACQUISITION COSTS AND OTHER
UNDERWRITING EXPENSES RATIOAmericas
    
    
    29.7
    %
    
    
    31.7
    %
    
    
    (2.0
    )
    
    
    29.4
    %
    
    
    31.5
    %
    
    
    (2.1
    )EuroAsia
    
    
    26.5
    
    
    
    25.5
    
    
    
    1.0
    
    
    
    26.4
    
    
    
    24.1
    
    
    
    2.3London Market
    
    
    21.5
    
    
    
    24.2
    
    
    
    (2.7
    )
    
    
    16.6
    
    
    
    22.2
    
    
    
    (5.6
    )U.S. Insurance
    
    
    20.6
    
    
    
    18.5
    
    
    
    2.1
    
    
    
    20.7
    
    
    
    18.1
    
    
    
    2.6Total
    
    
    26.3
    %
    
    
    27.9
    %
    
    
    (1.6
    )
    
    
    25.0
    %
    
    
    26.8
    %
    
    
    (1.8
    )COMBINED RATIOAmericas
    
    
    130.6
    %
    
    
    106.5
    %
    
    
    24.1
    
    
    
    180.5
    %
    
    
    123.2
    %
    
    
    57.3EuroAsia
    
    
    92.7
    
    
    
    87.7
    
    
    
    5.0
    
    
    
    90.7
    
    
    
    83.2
    
    
    
    7.5London Market
    
    
    119.0
    
    
    
    96.2
    
    
    
    22.8
    
    
    
    166.7
    
    
    
    104.7
    
    
    
    62.0U.S. Insurance
    
    
    84.9
    
    
    
    86.3
    
    
    
    (1.4
    )
    
    
    86.3
    
    
    
    81.3
    
    
    
    5.0Total
    
    
    113.8
    %
    
    
    99.0
    %
    
    
    14.8
    
    
    
    145.0
    %
    
    
    106.9
    %
    
    
    38.1