In this discussion and analysis, the term “common share” refers to the summation of restricted voting shares and ordinary shares when used to describe loss or book value per common share.
profitability. The amount reported under net claims incurred in any period includes payments in the period net of the change in the value of the reserves for net claims incurred between the beginning and the end of the period.
Ceded premium written is equal to premium ceded under the terms of Atlas’ inforce reinsurance treaties. Ceded premium written increased 94.4% to $12.6 million for the year ended December 31, 2013 compared with $6.5 million for the year ended December 31, 2012. The primary driver of the increase in ceded premium written relates to the Gateway workers' compensation reinsurance
The purpose of liquidity management is to ensure there is sufficient cash to meet all financial commitments and obligations as they become due. The liquidity requirements of Atlas’ business have been met primarily by funds generated from operations, asset maturities and income and other returns received on securities. Cash provided from these sources is used primarily for payment of claims and operating expenses. The timing and amount of catastrophe claims are inherently unpredictable and may create increased liquidity requirements.
Beginning with the year ended December 31, 2012, Atlas has changed where certain items appear on its Consolidated Statements of Income and Comprehensive Income according to Rule 7-04 of Regulation S-X.
As of the year ended December 31, 2013 there were no outstanding warrants and 18 million preferred shares were repurchased on August 1, 2013. Atlas’ dilutive potential ordinary shares consist of outstanding stock options to purchase ordinary common shares and 2,000,000 preferred shares potentially convertible to ordinary common shares at the option of the holder at any date after December 31, 2015 at the rate of 0.1270 ordinary common shares for each preferred share. The effects of these convertible instruments are excluded from the computation of diluted earnings per share in periods in which the effect would be anti-dilutive. Convertible preferred shares are anti-dilutive when the amount of dividend declared or accumulated in the current period per common share obtainable upon conversion exceeds basic earnings per share. As of the year ended December 31, 2013 and the year ended December 31, 2012, convertible preferred shares and stock options were deemed to be dilutive.
At December 31, 2013, bonds and term deposits with a fair value of $14.5 million were on deposit with state and provincial regulatory authorities, versus $9.8 million at December 31, 2012. Also, from time to time, the Company pledges securities to third parties to collateralize liabilities incurred under its policies of insurance. At the year ended December 31, 2013, the amount of such pledged securities was $7.9 million versus $8.3 million at December 31, 2012. Collateral pledging transactions are conducted under terms that are common and customary to standard collateral pledging and are subject to the Company’s standard risk management controls. These assets and investment income related thereto remain the property of the Company while pledged. Neither the state and/or provincial regulatory authorities nor any other third party has the right to re-pledge or sell said securities held on deposit.
Amounts and expiration dates of the operating loss carry forwards as of December 31, 2013 are as follows (all amounts in '000s):
Warrants - On November 1, 2010, American Acquisition closed a private placement where it issued 1,327,840 subscription receipts for ordinary voting common shares of Atlas and warrants to purchase 1,327,840 ordinary voting common shares of Atlas for C$6.00 per share in connection with the merger. The subscription receipts were converted to Atlas ordinary common shares in connection with the merger. All the warrants were exercised on or before December 31, 2013 and 1,327,840 ordinary common shares were issued as a result. There were no warrants that had expired on December 31, 2013.