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Noncontrolling Interests | 9 Months Ended
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Sep. 30, 2011
Noncontrolling Interests |
Noncontrolling Interests |
NOTE 10. | NONCONTROLLING INTERESTS
Redeemable Noncontrolling Interest – DaVinciRe In October 2001, the Company formed DaVinciRe and DaVinci with other equity investors. RenaissanceRe owns a noncontrolling economic interest in DaVinciRe; however, because RenaissanceRe controls a majority of DaVinciRe's outstanding voting rights, the consolidated financial statements of DaVinciRe are included in the consolidated financial statements of the Company. The portion of DaVinciRe's earnings owned by third parties for the three and nine months ended September 30, 2011 and 2010 is recorded in the consolidated statements of operations as net loss (income) attributable to noncontrolling interests. The Company's ownership in DaVinciRe was 42.8% at September 30, 2011 (December 31, 2010 - 41.2%). DaVinciRe shareholders are party to a shareholders agreement (the "Shareholders Agreement") which provides DaVinciRe shareholders, excluding RenaissanceRe, with certain redemption rights that enable each shareholder to notify DaVinciRe of such shareholder's desire for DaVinciRe to repurchase up to half of such shareholder's initial aggregate number of shares held, subject to certain limitations, such as limiting the aggregate of all share repurchase requests to 25% of DaVinciRe's capital in any given year and satisfying all applicable regulatory requirements. If total shareholder requests exceed 25% of DaVinciRe's capital, the number of shares repurchased will be reduced among the requesting shareholders pro-rata, based on the amounts desired to be repurchased. Shareholders desiring to have DaVinci repurchase their shares must notify DaVinciRe before March 1 of each year. The repurchase price will be based on GAAP book value as of the end of the year in which the shareholder notice is given, and the repurchase will be effective as of such date. Payment will be made by April 1 of the following year, following delivery of the audited financial statements for the year in which the repurchase was effective. The repurchase price is subject to a true-up for development on outstanding loss reserves after settlement of all claims relating to the applicable years. Certain third party shareholders of DaVinciRe submitted repurchase notices on or before the required annual redemption notice date of March 1, 2010, in accordance with the Shareholders Agreement. The repurchase notices submitted on or before March 1, 2010, were for shares of DaVinciRe with a GAAP book value of $88.4 million at December 31, 2010. Furthermore, DaVinciRe resolved to return additional capital of $86.6 million to the remaining shareholders, including the Company, after the receipt of the repurchase notices described above. Effective January 1, 2011, DaVinciRe redeemed the shares and returned additional capital for an aggregate of $175.0 million, less a $17.5 million reserve holdback. As a result of the above transactions, the Company's ownership interest in DaVinciRe increased to 44.0% effective January 1, 2011. In advance of the March 1, 2011 redemption notice date, certain third party shareholders of DaVinciRe submitted repurchase notices, in accordance with the Shareholders Agreement, for shares of DaVinciRe with a GAAP book value of $8.9 million at September 30, 2011. On June 1, 2011, DaVinciRe completed an equity raise of $100.0 million from new and existing shareholders, including $30.0 million contributed by the Company. The capital raised will be used to support the ongoing underwriting activities of DaVinci, which primarily writes property catastrophe reinsurance and certain classes of specialty reinsurance. As a result of the equity raise, the Company's ownership in DaVinciRe decreased to 42.8% effective June 1, 2011, compared to 44.0% effective January 1, 2011. The Company expects its ownership in DaVinciRe to fluctuate over time. The activity in the Company's redeemable noncontrolling interest – DaVinciRe is detailed in the table below:
|  |  | 0000000000 |  |  |  | 0000000000 |
Three months ended September 30, |  | 2011 |  |  | 2010 |
(in thousands of U.S. dollars) |  |  |  |  |  |
Balance - July 1 |  | $ | 628,001 |  |  | $ | 707,541 |
Purchase of shares from redeemable noncontrolling interest |  |  | (136 | ) |  |  | (362 | )
Comprehensive income: |  |  |  |  |  |  |  |
Net income attributable to redeemable noncontrolling interest |  |  | 5,247 |  |  |  | 37,524 |
Other comprehensive loss attributable to redeemable noncontrolling interest |  |  | — |  |  |  | (3,600 | )
Balance - September 30 |  | $ | 633,112 |  |  | $ | 741,103 |
|  |  | 0000000000 |  |  |  | 0000000000 |
Nine months ended September 30, |  | 2011 |  |  | 2010 |
(in thousands of U.S. dollars) |  |  |  |  |  |
Balance - January 1 |  | $ | 757,655 |  |  | $ | 786,647 |
Purchase of shares from redeemable noncontrolling interest |  |  | (135,754 | ) |  |  | (142,109 | )
Sale of shares to redeemable noncontrolling interest |  |  | 70,000 |  |  |  | — |
Comprehensive income: |  |  |  |  |  |  |  |
Net (loss) income attributable to redeemable noncontrolling interest |  |  | (58,783 | ) |  |  | 99,989 |
Other comprehensive loss attributable to redeemable noncontrolling interest |  |  | (6 | ) |  |  | (3,424 | )
Balance - September 30 |  | $ | 633,112 |  |  | $ | 741,103 |
Angus Fund L.P. (the "Angus Fund") In December 2010, REAL and RenRe Commodity Advisors Inc. ("RRCA"), both wholly owned subsidiaries of the Company, formed the Angus Fund with other equity investors. REAL, the general partner of the Angus Fund, invested $40 thousand in the Angus Fund, representing a 1.0% ownership interest at September 30, 2011 (December 31, 2010 - $40 thousand and 1.0%, respectively), and RRCA, a limited partner, invested $1.0 million in the Angus Fund, representing a 24.2% ownership interest at September 30, 2011 (December 31, 2010 - $1.0 million and 24.8%, respectively). The Angus Fund was formed to provide capital to, and make investments in, companies primarily in the heating oil and propane distribution industries to supplement the Company's weather and energy risk management operations. The Angus Fund meets the definition of a variable interest entity ("VIE"), and therefore the Company evaluated its ownership in the Angus Fund to determine if it is the primary beneficiary. The Company has concluded it is the primary beneficiary of the Angus Fund as it has the power to direct, and has a more than insignificant economic interest in, the activities of the Angus Fund and as such, the financial position and results of operations of the Angus Fund are consolidated. The Company expects its ownership in the Angus Fund to fluctuate over time. The portion of the Angus Fund's earnings owned by third parties for the three and nine months ended September 30, 2011 is recorded in the consolidated statements of operations as net loss (income) attributable to noncontrolling interests. The activity in noncontrolling interest is detailed in the table below:
Three months ended September 30, |  | 2011 |
(in thousands of U.S. dollars) |  |  |
Balance - July 1 |  | $ | 3,430 |
Net sale of shares to noncontrolling interest |  |  | — |
Net income attributable to noncontrolling interest |  |  | (203 | )
Balance - September 30 |  | $ | 3,227 |
Nine months ended September 30, |  | 2011 |
(in thousands of U.S. dollars) |  |  |
Balance - January 1 |  | $ | 2,889 |
Net sale of shares to noncontrolling interest |  |  | 100 |
Net income attributable to noncontrolling interest |  |  | 238 |
Balance - September 30 |  | $ | 3,227 |

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- Definition The entire disclosure for noncontrolling interest in consolidated subsidiaries, which could include the name of the subsidiary, the ownership percentage held by the parent, the ownership percentage held by the noncontrolling owners, the amount of the noncontrolling interest, the location of this amount on the balance sheet (when not reported separately), an explanation of the increase or decrease in the amount of the noncontrolling interest, the noncontrolling interest share of the net Income or Loss of the subsidiary, the location of this amount on the income statement (when not reported separately), the nature of the noncontrolling interest such as background information and terms, the amount of the noncontrolling interest represented by preferred stock, a description of the preferred stock, and the dividend requirements of the preferred stock. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.31) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 810 -SubTopic 10 -Section 50 -Paragraph 1A -URI http://asc.fasb.org/extlink&oid=6921930&loc=SL4573702-111684 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher AICPA -Name Accounting Research Bulletin (ARB) -Number 51 -Paragraph 38 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. + Details
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