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Watford Reports 2019 Fourth Quarter Results and the Authorization of a New $50 Million Share Repurchase Program

Watford Reports 2019 Fourth Quarter Results and the Authorization of a New $50 Million Share Repurchase Program

PEMBROKE, Bermuda, Feb. 11, 2020 (GLOBE NEWSWIRE) -- WATFORD HOLDINGS LTD. (“Watford” or the “Company”) (WTRE) today reported a net loss of $16.9 million, after $1.2 million of preference dividends, for the three months ended December 31, 2019, compared to a net loss of $95.3 million, after payment of $4.9 million of preference dividends, in the same period in 2018. Book value per diluted common share was $43.49 at December 31, 2019, an increase of 10.9% from December 31, 2018.  The quarterly results included:

  • Net loss available to common shareholders of $16.9 million, or $(0.79) per diluted common share, compared to a net loss of $95.3 million, or $(4.20) per diluted common share, for the 2018 fourth quarter;
  • Combined ratio of 128.3%, comprised of a 100.9% loss ratio, a 22.3% acquisition expense ratio and a 5.1% general and administrative expense ratio, compared to a combined ratio of 115.4% for the prior year fourth quarter, comprised of a 87.9% loss ratio, a 23.4% acquisition expense ratio and a 4.1% general and administrative expense ratio;
  • Net interest income of $29.8 million, a 1.4% yield on average net assets, for the 2019 fourth quarter, compared to net interest income of $30.0 million and a 1.5% yield on average net assets for the 2018 fourth quarter;
  • Net investment income of $32.1 million, a 1.5% return on average net assets, for the 2019 fourth quarter, compared to a net investment loss of $61.1 million and a (3.0)% return on average net assets for the 2018 fourth quarter;
  • The Company repurchased 2,789,405 common shares at an average price of $26.89 per share, fully utilizing the Company's previously announced $75 million share repurchase program.
  • In addition, the Board of Directors has authorized a new share repurchase program under which the Company may repurchase up to $50 million of its outstanding common shares from time to time on the open market or in privately negotiated transactions.

Commenting on the 2019 fourth quarter financial results, John Rathgeber, CEO of Watford, said:

"As reported in our press release of January 28, 2020, our results for the 2019 fourth quarter were negatively impacted by prior year loss reserve strengthening of $24 million and current accident year loss reserve strengthening of approximately $4 million. The reserve increase primarily relates to two large casualty reinsurance contracts, one of which is in run-off, and one of which has been renewed at progressively smaller participations over the past several years.

While painful in the short term, this was the prudent and responsible course of action based on the level of ceding company reported losses compared to actuarial projections. Our response to the data was decisive and we feel confident about the overall level of our net loss reserves, which stand at $1.1 billion.

Our investment income was quite strong, both for the quarter and the year. The net investment income return on net invested assets was 1.5% for the 2019 fourth quarter and 6.0% for the full year. The ratio of net invested assets to equity was 2.5:1 as of December 31, 2019, which points to the return on equity potential of the business going forward.

We fully utilized our $75 million share repurchase program during the 2019 fourth quarter. The Board has authorized a new share repurchase program for up to $50 million.  The exact timing and magnitude of further share repurchases is dependent on a number of factors, but will likely be deployed at a slower pace than our prior program in order to pursue opportunities in an improving insurance market.

Our ultimate objective is to steadily grow book value per share over time. By this measure, we are pleased to report 3.4% quarterly growth in book value per diluted common share, which stands at $43.49 as of December 31, 2019. For the 2019 full year, the increase in book value per diluted common share was 10.9%.

As we enter the new year, we are optimistic about the prospects for further book value growth due to the overall positive insurance rate environment, the composition of our in-force insurance and reinsurance portfolio, the strength of our balance sheet, the earnings power of our fixed-income investment portfolio, and the potential material accretive benefit of our new share repurchase program.”

Underwriting

The following table summarizes the Company’s underwriting results on a consolidated basis:

  Three Months Ended
December 31,
  Year Ended
December 31,
  2019   2018   % Change   2019   2018   % Change
  ($ in thousands)
Gross premiums written $ 156,254     $ 160,937     (2.9 )%   $ 754,881     $ 735,015     2.7 %
Net premiums written 112,353     132,360     (15.1 )%   532,862     604,175     (11.8 )%
Net premiums earned 133,446     146,973     (9.2 )%   556,690     578,862     (3.8 )%
Underwriting income (loss) (1) (37,819 )   (22,660 )   (66.9 )%   (54,076 )   (25,840 )   (109.3 )%
                       
          % Point Change           % Point Change
Loss ratio 100.9 %   87.9 %   13.0 %   81.4 %   76.2 %   5.2 %
Acquisition expense ratio 22.3 %   23.4 %   (1.1 )%   22.8 %   24.4 %   (1.6 )%
General & administrative expense ratio 5.1 %   4.1 %   1.0 %   5.5 %   3.9 %   1.6 %
Combined ratio 128.3 %   115.4 %   12.9 %   109.7 %   104.5 %   5.2 %
Adjusted combined ratio (2) 126.4 %   114.2 %   12.2 %   107.3 %   103.3 %   4.0 %

(1) Underwriting income (loss) is a non-U.S. GAAP financial measure and is calculated as net premiums earned, less loss and loss adjustment expenses, acquisition expenses and general and administrative expenses. See “Comments on Regulation G” for further discussion, including a reconciliation of underwriting income (loss) to net income (loss) available to common shareholders.

(2) Adjusted combined ratio is a non-U.S. GAAP financial measure and is calculated by dividing the sum of loss and loss adjustment expenses, acquisition expenses and general and administrative expenses, less certain corporate expenses, by the sum of net premiums earned and other underwriting income (loss). See “Comments on Regulation G” for further discussion, including a reconciliation of our adjusted combined ratio to our combined ratio.

The following table provides summary information regarding premiums written and earned by line of business:

  Three Months Ended
December 31,
  Year Ended
December 31,
  2019   2018   2019   2018
  ($ in thousands)
Gross premiums written:              
Casualty reinsurance $ 26,680     $ 52,025     $ 279,967     $ 274,661  
Other specialty reinsurance 34,931     45,087     119,518     196,170  
Property catastrophe reinsurance 844     1,684     16,226     10,424  
Insurance programs and coinsurance 93,799     62,141     339,170     253,760  
Total $ 156,254     $ 160,937     $ 754,881     $ 735,015  
               
Net premiums written:              
Casualty reinsurance $ 26,532     $ 51,379     $ 225,758     $ 273,048  
Other specialty reinsurance 33,078     42,837     114,876     181,096  
Property catastrophe reinsurance 874     1,678     15,517     10,193  
Insurance programs and coinsurance 51,869     36,466     176,711     139,838  
Total $ 112,353     $ 132,360     $ 532,862     $ 604,175  
               
Net premiums earned:              
Casualty reinsurance $ 55,352     $ 72,124     $ 238,437     $ 278,656  
Other specialty reinsurance 30,929     37,420     149,688     162,691  
Property catastrophe reinsurance 3,692     3,555     13,399     10,998  
Insurance programs and coinsurance 43,473     33,874     155,166     126,517  
Total $ 133,446     $ 146,973     $ 556,690     $ 578,862  

The following table shows the components of our loss and loss adjustment expenses for the three months and years ended December 31, 2019 and 2018:

  Three Months Ended
December 31,
  Year Ended
December 31,
  2019   2018   2019   2018
  Loss and Loss Adjustment Expenses   % of Earned Premiums   Loss and Loss Adjustment Expenses   % of Earned Premiums   Loss and Loss Adjustment Expenses   % of Earned Premiums   Loss and Loss Adjustment Expenses   % of Earned Premiums
  ($ in thousands)
Current year $ 110,510     82.8 %   $ 129,101     87.8 %   $ 429,322     77.1 %   $ 443,482     76.6 %
Prior year development (favorable)/adverse 24,145     18.1 %   67     0.1 %   23,813     4.3 %   (2,227 )   (0.4 )%
Loss and loss adjustment expenses $ 134,655     100.9 %   $ 129,168     87.9 %   $ 453,135     81.4 %   $ 441,255     76.2 %

Results for the three months ended December 31, 2019 versus 2018:

Gross and net premiums written in the 2019 fourth quarter were 2.9% and 15.1% lower, respectively, than the 2018 fourth quarter.  The decrease in premiums reflected a reduction in reinsurance premiums, offset in part by an increase of new and renewal business bound in insurance programs and coinsurance in the 2019 fourth quarter.

Net premiums earned in the 2019 fourth quarter were 9.2% lower than the 2018 fourth quarter. The decrease in premiums reflected prior period reduced participations in casualty reinsurance and other specialty reinsurance, offset in part by increased writings in insurance programs and coinsurance.

The loss ratio was 100.9% in the 2019 fourth quarter compared to 87.9% in the 2018 fourth quarter. In the 2019 fourth quarter, we experienced $5.0 million in catastrophe losses, primarily due to Typhoon Hagibis in Japan. The increase in the loss ratio reflects 18.1 points of prior year and 2.9 points of current year loss reserve strengthening, primarily in the casualty reinsurance line of business. Casualty reinsurance prior year loss reserves were strengthened by $24.0 million, primarily due to a higher than anticipated level of reported losses on one professional lines quota share treaty program and one non-renewed multi-line quota share treaty. The loss reserve development in the prior year fourth quarter had essentially been flat.

The acquisition expense ratio was 22.3% in the 2019 fourth quarter, compared to 23.4% in the 2018 fourth quarter, reflecting changes in the mix and type of business.

The general and administrative expense ratio was 5.1% in the 2019 fourth quarter, compared to 4.1% in the 2018 fourth quarter. The 1.0 point increase versus the prior year fourth quarter was attributable to ongoing public company expenses. Removing certain corporate expenses, our adjusted general and administrative expense ratio was 3.7% in the 2019 fourth quarter compared to 3.4% in the 2018 fourth quarter.

Investments

The following table summarizes the Company’s key investment returns on a consolidated basis:

  Three Months Ended
December 31,
  Year Ended
December 31,
  2019   2018   2019   2018
  ($ in thousands)
Interest income $ 40,775     $ 43,086     $ 163,888     $ 152,916  
Investment management fees - related parties (4,807 )   (4,390 )   (18,392 )   (17,006 )
Borrowing and miscellaneous other investment expenses (6,142 )   (8,741 )   (29,285 )   (28,377 )
Net interest income 29,826     29,955     116,211     107,533  
Realized gains (losses) on investments (10,664 )   4,599     (7,948 )   (4,788 )
Unrealized gains (losses) on investments 16,769     (102,196 )   32,191     (109,046 )
Investment performance fees - related parties (3,849 )   6,558     (12,191 )   (48 )
Net investment income (loss) $ 32,082     $ (61,084 )   $ 128,263     $ (6,349 )
               
Unrealized gains on investments (balance sheet) $ 47,203     $ 17,109     $ 47,203     $ 17,109  
Unrealized losses on investments (balance sheet) (110,448 )   (134,494 )   (110,448 )   (134,494 )
Net unrealized gains (losses) on investments (balance sheet) $ (63,245 )   $ (117,385 )   $ (63,245 )   $ (117,385 )
               
Net interest income yield on average net assets (1) 1.4 %   1.5 %   5.4 %   5.4 %
Non-investment grade portfolio (1) 1.7 %   1.9 %   6.8 %   7.0 %
Investment grade portfolio (1) 0.6 %   0.5 %   2.5 %   1.9 %
Net investment income return on average net assets (1) 1.5 %   (3.0 )%   6.0 %   (0.3 )%
Non-investment grade portfolio (1) 1.7 %   (4.3 )%   6.8 %   (0.2 )%
Investment grade portfolio (1) 0.9 %   0.8 %   3.9 %   0.9 %
               
Net investment income return on average total investments (2) 1.2 %   (2.2 )%   4.6 %   (0.2 )%
Non-investment grade portfolio (2) 1.4 %   (3.4 )%   5.7 %   (0.1 )%
Investment grade portfolio (2) 0.9 %   0.8 %   3.9 %   0.9 %

(1) Net interest income yield on average net assets and net investment income return on average net assets are calculated by dividing net interest income, and net investment income (loss), respectively, by average net assets. Net assets is calculated as the sum of total investments, accrued investment income and receivables for securities sold, less revolving credit agreement borrowings, payable for securities purchased and payable for securities sold short. For the three- and twelve-month period, average net assets is calculated using the averages of each quarterly period. However, for the investment grade portfolio component of these returns, revolving credit agreement borrowings are not subtracted from the net assets calculation. The separate components of these returns (non-investment grade portfolio and investment grade portfolio) are non-U.S. GAAP financial measures. See “Comments on Regulation G” for further discussion, including a reconciliation of these components of our net interest income yield on average net assets and net investment income return on average net assets.

(2) Net investment income return on average total investments is calculated by dividing net investment income by average total investments. For the three- and twelve-month period, average total investments is calculated using the averages of each quarterly period. The separate components of these returns (non-investment grade portfolio and investment grade portfolio) are non-U.S. GAAP financial measures. See “Comments on Regulation G” for further discussion, including a reconciliation of these components of our net investment income return on average total investments.

The following chart shows the composition of our non-investment grade and investment grade portfolios as of December 31, 2019:

  As of December 31, 2019
  Non-Investment Grade
  ($ in millions)
Total non-investment grade investments $ 1,862.3  
   
Portfolio allocation by asset class:  
Term loans 57.1 %
Corporate bonds 11.5 %
Short-term investments 12.5 %
Asset-backed securities 10.2 %
Equities 6.7 %
Other investments 1.6 %
Mortgage-backed securities 0.4 %
Total 100.0 %


  As of December 31, 2019
  Investment Grade
  ($ in millions)
Total investment grade investments $ 846.9  
   
Portfolio allocation by asset class:  
U.S. government and government agency bonds 33.7 %
Corporate bonds 18.7 %
Asset-backed securities 17.2 %
Non-U.S. government and government agency bonds 15.8 %
Short-term investments 11.4 %
Mortgage-backed securities 2.9 %
Municipal government and government agency bonds 0.3 %
Total 100.0 %

Corporate Function

The Company has a corporate function that includes general and administrative expenses related to corporate activities, interest expense, net foreign exchange gains (losses), income tax expense and items related to the Company’s contingently redeemable preference shares.

The Company incurred an interest expense of $3.0 million for the three months ended December 31, 2019, in relation to the 6.5% senior notes issued on July 2, 2019. Interest is paid semi-annually in arrears on January 2 and July 2.

Net foreign exchange gains (losses), which relate to underwriting, fair value option investments, fair value through net income investments, cash and cash equivalents, revolving credit agreement borrowings and realized amounts for available-for-sale investments, are included in the consolidated statements of income (loss).

Unrealized net foreign exchange gains (losses), which relate to available-for-sale investments, are included in the statement of comprehensive income (loss) within "unrealized holding gains (losses) arising during the period".

The consolidated statements of income (loss) include net foreign exchange losses of $7.5 million for the 2019 fourth quarter, while the statement of comprehensive income (loss) includes unrealized net foreign exchange gains of $7.5 million for the 2019 fourth quarter.

Preference dividends were $1.2 million and $4.9 million for the three months ended December 31, 2019 and 2018, respectively.

The Board of Directors has authorized a new share repurchase program under which the Company may repurchase up to $50 million of its outstanding common shares.  Repurchases under the new $50 million authorization may be effected from time to time in open market or privately negotiated transactions. The timing and amount of the repurchase transactions under this program will depend on a variety of factors, including market conditions, the level of future earnings, and rating agency and regulatory considerations.

Conference Call

The Company will hold a conference call on Wednesday, February 12, 2020 at 1:00 p.m. Eastern time to discuss its 2019 fourth quarter results. A live webcast of this call will be available via the Investors section of the Company’s website at http://investors.watfordre.com. A replay of the conference call will also be available via the Investors section of the Company’s website beginning on February 13, 2020.

About Watford Holdings Ltd.

Watford Holdings Ltd. is a global property and casualty insurance and reinsurance company with approximately $1.1 billion in capital as of December 31, 2019, comprised of: $172.4 million of senior notes, $52.3 million of contingently redeemable preference shares and $872.4 million of common shareholders’ equity, with operations in Bermuda, the United States and Europe. Its operating subsidiaries have been assigned financial strength ratings of “A-” (Excellent) from A.M. Best and “A” from Kroll Bond Rating Agency.

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

  (Unaudited)    
  December 31,   December 31,
  2019   2018
Assets ($ in thousands)
Investments:      
Term loans, fair value option (Amortized cost: $1,113,212 and $1,055,664) $ 1,061,934     $ 1,000,652  
Fixed maturities, fair value option (Amortized cost: $432,576 and $972,653) 416,594     922,819  
Short-term investments, fair value option (Cost: $325,542 and $281,959) 329,303     282,132  
Equity securities, fair value option 59,799     56,638  
Other investments, fair value option 30,461     49,762  
Investments, fair value option 1,898,091     2,312,003  
Fixed maturities, available for sale (Amortized cost: $739,456 and $397,509) 745,708     393,351  
Equity securities, fair value through net income 65,338     33,013  
Total investments 2,709,137     2,738,367  
Cash and cash equivalents 102,437     63,529  
Accrued investment income 14,025     19,461  
Premiums receivable 273,657     227,301  
Reinsurance recoverable on unpaid and paid losses and loss adjustment expenses 170,974     86,445  
Prepaid reinsurance premiums 132,577     61,587  
Deferred acquisition costs, net 64,044     80,858  
Receivable for securities sold 16,288     24,507  
Intangible assets 7,650     7,650  
Funds held by reinsurers 42,505     44,830  
Other assets 17,562     18,321  
Total assets $ 3,550,856     $ 3,372,856  
Liabilities      
Reserve for losses and loss adjustment expenses $ 1,263,628     $ 1,032,760  
Unearned premiums 438,907     390,114  
Losses payable 61,314     24,750  
Reinsurance balances payable 77,066     21,034  
Payable for securities purchased 18,180     60,142  
Payable for securities sold short 66,257     8,928  
Revolving credit agreement borrowings 484,287     693,917  
Senior notes 172,418      
Amounts due to affiliates 4,467     5,888  
Investment management and performance fees payable 17,762     3,807  
Other liabilities 21,912     20,916  
Total liabilities $ 2,626,198     $ 2,262,256  
Commitments and contingencies      
Contingently redeemable preference shares 52,305     220,992  
Shareholders’ equity      
Common shares ($0.01 par; shares authorized: 120 million; shares issued: 22,692,300 and 22,682,875) 227     227  
Additional paid-in capital 898,083     895,386  
Retained earnings (deficit) 43,470     (1,275 )
Accumulated other comprehensive income (loss) 5,629     (4,730 )
Common shares held in treasury, at cost (shares: 2,789,405 and Nil) (75,056 )    
Total shareholders’ equity 872,353     889,608  
Total liabilities, contingently redeemable preference shares and shareholders’ equity $ 3,550,856     $ 3,372,856  

CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS) (UNAUDITED)

  (Unaudited) (Unaudited)
  Three Months Ended
December 31,
Year Ended
December 31,
  2019   2018   2019   2018
Revenues ($ in thousands except share and per share data)
Gross premiums written $ 156,254     $ 160,937     $ 754,881     $ 735,015  
Gross premiums ceded (43,901 )   (28,577 )   (222,019 )   (130,840 )
Net premiums written 112,353     132,360     532,862     604,175  
Change in unearned premiums 21,093     14,613     23,828     (25,313 )
Net premiums earned 133,446     146,973     556,690     578,862  
Other underwriting income (loss) 568     630     2,412     2,722  
Interest income 40,775     43,086     163,888     152,916  
Investment management fees - related parties (4,807 )   (4,390 )   (18,392 )   (17,006 )
Borrowing and miscellaneous other investment expenses (6,142 )   (8,741 )   (29,285 )   (28,377 )
Net interest income 29,826     29,955     116,211     107,533  
Realized and unrealized gains (losses) on investments 6,105     (97,597 )   24,243     (113,834 )
Investment performance fees - related parties (3,849 )   6,558     (12,191 )   (48 )
Net investment income (loss) 32,082     (61,084 )   128,263     (6,349 )
Total revenues 166,096     86,519     687,365     575,235  
Expenses              
Loss and loss adjustment expenses (134,655 )   (129,168 )   (453,135 )   (441,255 )
Acquisition expenses (29,785 )   (34,428 )   (126,788 )   (141,136 )
General and administrative expenses (6,825 )   (6,037 )   (30,843 )   (22,311 )
Interest expense (2,950 )       (5,791 )    
Net foreign exchange gains (losses) (7,536 )   1,764     (8,247 )   3,611  
Non-recurring direct listing expenses     (9,000 )       (9,000 )
Total expenses (181,751 )   (176,869 )   (624,804 )   (610,091 )
Income (loss) before income taxes (15,655 )   (90,350 )   62,561     (34,856 )
Income tax expense         (20 )   (27 )
Net income (loss) before preference dividends (15,655 )   (90,350 )   62,541     (34,883 )
Preference dividends (1,209 )   (4,909 )   (13,632 )   (19,633 )
Accelerated amortization of costs related to the redemption of preference shares         (4,164 )    
Net income (loss) available to common shareholders $ (16,864 )   $ (95,259 )   $ 44,745     $ (54,516 )
Other comprehensive income (loss) net of income tax:              
Available-for-sale investments:              
Unrealized holding gains (losses) arising during the period (1) $ 5,847     $ (1,010 )   $ 16,021     $ (5,204 )
Reclassification of net realized (gains) losses, net of income taxes, included in net income (2,146 )   362     (5,611 )   1,046  
Foreign currency translation adjustments (384 )   160     (51 )   400  
Other comprehensive income (loss) net of income tax 3,317     (488 )   10,359     (3,758 )
Comprehensive income (loss) $ (13,547 )   $ (95,747 )   $ 55,104     $ (58,274 )
Earnings (loss) per share:              
Basic $ (0.79 )   $ (4.20 )   $ 2.00     $ (2.40 )
Diluted $ (0.79 )   $ (4.20 )   $ 2.00     $ (2.40 )
Weighted average number of ordinary shares used in the determination of earnings (loss) per share:              
Basic 21,277,287     22,682,875     22,366,682     22,682,875  
Diluted 21,277,287     22,682,875     22,373,968     22,682,875  

(1) Includes $7.5 million and $(1.4) million unrealized net foreign exchange gains (losses) for the three months ended December 31, 2019 and 2018. Includes $3.4 million and $(2.7) million unrealized net foreign exchange gains (losses) for the years ended December 31, 2019 and 2018.

 

  Three Months Ended
December 31,
  Year Ended
December 31,
  2019   2018   2019   2018
Numerator: ($ in thousands except share and per share data)
Net income (loss) before preference dividends $ (15,655 )   $ (90,350 )   $ 62,541     $ (34,883 )
Preference dividends (1,209 )   (4,909 )   (13,632 )   (19,633 )
Accelerated amortization of costs related to the redemption of preference shares         (4,164 )    
Net income (loss) available to common shareholders $ (16,864 )   $ (95,259 )   $ 44,745     $ (54,516 )
Denominator:              
Weighted average common shares outstanding - basic 21,277,287     22,682,875     22,366,682     22,682,875  
Effect of dilutive common share equivalents:              
Weighted average non-vested restricted share units (1)(2)         7,286      
Weighted average common shares outstanding - diluted 21,277,287     22,682,875     22,373,968     22,682,875  
Earnings (loss) per common share:              
Basic $ (0.79 )   $ (4.20 )   $ 2.00     $ (2.40 )
Diluted $ (0.79 )   $ (4.20 )   $ 2.00     $ (2.40 )

(1) During the second quarter of 2019, the Company granted 165,287 restricted share units and common shares to certain employees and directors, 82,360 of which are non-vested as of December 31, 2019.

(2) The weighted average non-vested restricted share units are excluded from the calculation of diluted weighted average common shares outstanding for the three months ended December 31, 2019, due to a net loss reported.

  December 31, 2019   September 30, 2019   June 30, 2019   March 31, 2019   December, 31, 2018
Numerator: ($ in thousands except share and per share data)
Total shareholders’ equity $ 872,353     $ 960,773     $ 961,296     $ 941,891     $ 889,608  
Denominator:                  
Common shares outstanding - basic   19,976,397       22,765,802       22,765,802       22,682,875       22,682,875  
Effect of dilutive common share equivalents:                  
Non-vested restricted share units (1)   82,360       82,360       82,360              
Common shares outstanding - diluted   20,058,757       22,848,162       22,848,162       22,682,875       22,682,875  
                   
Book value per common share $ 43.67     $ 42.20     $ 42.23     $ 41.52     $ 39.22  
Book value per diluted common share $ 43.49     $ 42.05     $ 42.07     $ 41.52     $ 39.22  

(1) During the second quarter of 2019, the Company granted 165,287 restricted share units and common shares to certain employees and directors, 82,360 of which are non-vested as of December 31, 2019.

Comments on Regulation G

Throughout this release, the Company presents its operations in the way it believes will be the most meaningful and useful to investors, analysts, rating agencies andnull