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ACA Capital Reports Financial and Economic Results for the Fourth Quarter and Year Ended December 31, 2006
NEW YORK February 14, 2007 ACA Capital Holdings, Inc. (NYSE: ACA) today announced fourth quarter 2006 net income of $16.5 million, or $0.49 per diluted share. This represents a 293% increase from fourth quarter 2005 net income of $4.2 million, and a 250% increase in earnings per diluted share of $0.14 in the fourth quarter of 2005.
For the year ended December 31, 2006, ACA Capital reported net income of $58.7 million, or $1.89 per diluted share. This represents a 104% increase as compared to the year ended December 31, 2005 net income of $28.8 million and a 97% increase in earnings per diluted share of $0.96 for this same period.
ACA Capitals fourth quarter results wrapped-up an exceptional 2006. Our business strategy has produced strong growth and revenue diversification while reducing our overall risk profile, said President and Chief Executive Officer Alan S. Roseman. Our record 2006 net income of $58.7 million and net economic income of $55.4 million is further evidence that our unique position in the alternative fixed income capital markets is leading to significant value creation for the stockholders of ACA Capital.
Net income and net income per diluted share are computed in accordance with accounting principles generally accepted in the United States of America (GAAP). Additionally, to assist investors in their understanding of the Companys quarterly results and their measurement of the Companys growth and profitability, ACA Capital provides other non-GAAP information, including net economic income and base economic income.
Net economic income for the fourth quarter 2006 was of $14.6 million, or $0.43 per diluted share. This represents a 165% increase from fourth quarter 2005 net economic income of $5.5 million, and a 139% increase in net economic income per diluted share of $0.18 in the fourth quarter of 2005.
For the year ended December 31, 2006, ACA Capital reported net economic income of $55.4 million, or $1.78 per diluted share. This represents a 68% increase as compared to the year ended December 31, 2005 net economic income of $32.9 million and a 62% increase in net economic income per diluted share of $1.10 for this same period.
Net Economic Income
In managing its business and measuring growth and profitability from a strategic and financial planning perspective, in addition to GAAP net income results, ACA Capitals management and Board of Directors consider a supplemental measurement, net economic income. Net economic income excludes the net income impact of:
1. Unrealized gains (losses) on derivatives included in:
a. Net insured credit swap revenue;
The following information was filed by Aca Capital Holdings Inc on Wednesday, February 14, 2007 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.
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