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Primus Guaranty Reports Second Quarter 2009 Financial Results.

Article Excerpt
Primus Guaranty, Ltd. ("Primus Guaranty" or "the Company") (NYSE:PRS) announced GAAP net income available to common shares of $596.9 million, or $14.46 per diluted share, for the second quarter of 2009, compared with GAAP net income available to common shares of $262.6 million, or $5.78 per diluted share, for the second quarter of 2008. Economic Results In managing its business and assessing its growth and profitability from a strategic and financial planning perspective, the Company believes it is appropriate to consider both its U.S. GAAP financial results as well as the impact on those results of fair value accounting and the early termination of credit default swaps ("CDS" or "credit swaps"). Therefore, the Company evaluates what its financial results would have been if it (1) excluded from revenue the amounts of any unrealized gains and losses on Primus Financial Products, LLC ("Primus Financial")'s portfolio of credit swaps sold and (2) excluded from revenue any realized gains from terminations of credit swaps sold prior to maturity (although Primus Financial amortizes those gains over the remaining original lives of the terminated contracts, except for credit swaps undertaken to offset credit risk). It refers to this evaluation as its "Economic Results." Economic Results also includes provisions for credit events caused by downgrades below CCC/Caa2 (S&P/Moody's) on CDS on asset-backed securities ("ABS"). The Company believes that quarterly fluctuations in the fair market value of Primus Financial's CDS portfolio have little or no effect on the Company's operations and that Economic Results provide a useful, alternative view of the Company's economic performance. For the second quarter of 2009, Economic Results were $47.5 million, or $1.15 per diluted share, compared with Economic Results of $18.5 million, or $0.41 per diluted share, for the second quarter of 2008. Economic Results primarily were driven by credit swap premium revenue of $22.2 million and a gain of $33.2 million on the purchases of the Company's and Primus Financial's debt.

"The credit markets showed further signs of stabilization and improvement during the second quarter, although financial and economic conditions remain uncertain," said Thomas W. Jasper, Chief Executive Officer, of the Company. "In this environment, we continued to...

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