Argo Group International (ARGO-PA) 8-K Pxre Reports Second Quarter Results

Exhibit 99.2

PXRE	Consolidated Balance Sheets
Group Ltd.	(Dollars in thousands, except par value per share)

	June 30,			December 31,
	2007			2006
	(Unaudited)
Assets
Investments:
Fixed maturities, at fair value:
Available-for-sale (amortized cost $461,714 and $502,307, respectively)	$	460,858		$	502,254
Trading (cost $12,848 and $14,794, respectively)		13,720			15,497
Short-term investments, at fair value		532,229			671,197
Hedge funds, at fair value (cost $762 and $11,583, respectively)		1,077			12,766
Other invested assets, at fair value (cost $1,068 and $1,717, respectively)		1,722			2,427
Total investments		1,009,606			1,204,141
Cash		12,468			12,251
Accrued investment income		3,806			3,830
Premiums receivable, net		57,391			93,325
Other receivables		6,192			7,321
Reinsurance recoverable on paid losses		4,861			3,324
Reinsurance recoverable on unpaid losses		34,874			35,327
Ceded unearned premiums		4,375			—
Deferred acquisition costs		76			8
Other assets		35,099			41,816
Total assets	$	1,168,748		$	1,401,343
Liabilities
Losses and loss expenses	$	425,343		$	603,241
Unearned premiums		737			113
Subordinated debt		167,095			167,089
Reinsurance balances payable		8,930			34,649
Deposit liabilities		52,001			54,425
Income tax payable		575			597
Other liabilities		37,981			44,462
Total liabilities		692,662			904,576
Shareholders’ Equity
Serial convertible preferred shares, $1.00 par value, $10,000 stated value — 30 million shares authorized, 0.01 million and 0.01 million shares issued and outstanding, respectively		58,132			58,132
Common shares, $1.00 par value — 350 million shares authorized, 72.6 million and 72.4 million shares issued and outstanding, respectively		72,568			72,351
Additional paid-in capital		873,824			873,142
Accumulated other comprehensive loss		(650	)		(100	)
Accumulated deficit		(524,798	)		(503,711	)
Restricted shares at cost (0.4 million and 0.4 million shares, respectively)		(2,990	)		(3,047	)
Total shareholders’ equity		476,086			496,767
Total liabilities and shareholders’ equity	$	1,168,748		$	1,401,343

PXRE	Consolidated Statements of Operations and Comprehensive Operations
Group Ltd.	(Dollars in thousands, except per share amounts)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2007			2006			2007			2006
				(Unaudited)
Revenues
Net premiums earned	$	(7,111	)	$	15,309		$	(12,305	)	$	92,396
Net investment income		13,078			13,249			26,758			31,161
Net realized investment losses		(219	)		(3,379	)		(2,491	)		(8,038	)
Fee income		16			27			79			218
		5,764			25,206			12,041			115,737
Losses and Expenses
Losses and loss expenses incurred		968			850			(2,214	)		18,650
Commission and brokerage		(35	)		4,630			(428	)		16,525
Other reinsurance related expense		2,965			2,255			4,738			5,976
Operating expenses		9,937			11,392			21,778			22,357
Foreign exchange (gains) losses		(199	)		338			(377	)		1,265
Interest expense		3,625			3,601			7,237			7,212
		17,261			23,066			30,734			71,985
(Loss) income before income taxes and convertible preferred share dividends		(11,497	)		2,140			(18,693	)		43,752
Income tax provision		68			—			69			—
Net (loss) income before convertible preferred share dividends	$	(11,565	)	$	2,140		$	(18,762	)	$	43,752
Convertible preferred share dividends		1,162			1,375			2,325			2,538
Net (loss) income to common shareholders	$	(12,727	)	$	765		$	(21,087	)	$	41,214
Comprehensive Operations, Net of Tax
Net (loss) income before convertible preferred share dividends	$	(11,565	)	$	2,140		$	(18,762	)	$	43,752
Net change in unrealized depreciation on investments		(2,278	)		(4,087	)		(3,037	)		(11,715	)
Reclassification adjustments for losses included in net (loss) income		215			3,374			2,487			8,033
Minimum additional pension liability		—			—			—			123
Comprehensive (loss) income	$	(13,628	)	$	1,427		$	(19,312	)	$	40,193
Per Share
Basic:
(Loss) income before convertible preferred share dividends	$	(0.16	)	$	0.03		$	(0.26	)	$	0.61
Net (loss) income to common shareholders	$	(0.18	)	$	0.01		$	(0.29	)	$	0.57
Average shares outstanding (000’s)		72,147			71,986			72,095			71,927
Diluted:
Net (loss) income	$	(0.18	)	$	0.01		$	(0.29	)	$	0.57
Average shares outstanding (000’s)		72,147			71,986			72,095			77,025

PXRE	Consolidated Statements of Shareholders’ Equity
Group Ltd.	(Dollars in thousands)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2007			2006			2007			2006
				(Unaudited)
Convertible Preferred Shares
Balance at beginning and end of period	$	58,132		$	58,132		$	58,132		$	58,132
Common Shares
Balance at beginning of period	$	72,588		$	72,410		$	72,351		$	72,281
(Cancellation) issuance of common shares, net		(20	)		(2	)		217			127
Balance at end of period	$	72,568		$	72,408		$	72,568		$	72,408
Additional Paid-in Capital
Balance at beginning of period	$	873,929		$	875,228		$	873,142		$	875,224
(Cancellation) issuance of common shares, net		(105	)		(580	)		682			(576	)
Balance at end of period	$	873,824		$	874,648		$	873,824		$	874,648
Accumulated Other Comprehensive Operations
Balance at beginning of period	$	1,413		$	(8,314	)	$	(100	)	$	(5,468	)
Change in unrealized losses on investments		(2,063	)		(713	)		(550	)		(3,682	)
Change in minimum additional pension liability		—			—			—			123
Balance at end of period	$	(650	)	$	(9,027	)	$	(650	)	$	(9,027	)
(Accumulated Deficit)
Balance at beginning of period	$	(512,071	)	$	(486,900	)	$	(503,711	)	$	(527,349	)
Net (loss) income before convertible preferred share dividends		(11,565	)		2,140			(18,762	)		43,752
Dividends to convertible preferred shareholders		(1,162	)		(1,375	)		(2,325	)		(2,538	)
Balance at end of period	$	(524,798	)	$	(486,135	)	$	(524,798	)	$	(486,135	)
Restricted Shares
Balance at beginning of period	$	(3,694	)	$	(6,846	)	$	(3,047	)	$	(7,502	)
Cancellation (issuance) of restricted shares, net		204			743			(825	)		603
Amortization of restricted shares		500			615			882			1,411
Balance at end of period	$	(2,990	)	$	(5,488	)	$	(2,990	)	$	(5,488	)
Total Shareholders’ Equity
Balance at beginning of period	$	490,297		$	503,710		$	496,767		$	465,318
(Cancellation) issuance of common shares, net		(125	)		(582	)		899			(449	)
Restricted shares, net		704			1,358			57			2,014
Unrealized depreciation on investments		(2,063	)		(713	)		(550	)		(3,682	)
Minimum additional pension liability		—			—			—			123
Net (loss) income before convertible preferred share dividends		(11,565	)		2,140			(18,762	)		43,752
Dividends to convertible preferred shareholders		(1,162	)		(1,375	)		(2,325	)		(2,538	)
Balance at end of period	$	476,086		$	504,538		$	476,086		$	504,538

PXRE	Consolidated Statements of Cash Flows
Group Ltd.	(Dollars in thousands)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2007			2006			2007			2006
				(Unaudited)
Cash Flows from Operating Activities
Premiums collected, net of reinsurance	$	(17,383	)	$	(6,157	)	$	(5,841	)	$	136,501
Losses and loss adjustment expenses paid, net of reinsurance		(47,496	)		(139,269	)		(176,768	)		(402,590	)
Commission and brokerage (paid) received, net of fee income		(247	)		4,179			41			(4,816	)
Operating expenses paid		(10,782	)		(14,560	)		(23,042	)		(27,701	)
Net investment income received		11,959			9,472			24,075			27,400
Interest paid		(1,372	)		(1,360	)		(7,166	)		(7,154	)
Income taxes (paid) recovered		—			(123	)		(91	)		91
Trading portfolio purchased		—			(52,175	)		—			(101,714	)
Trading portfolio disposed		2,042			52,445			2,042			92,566
Deposit liabilities paid		(1,462	)		(8,275	)		(2,424	)		(11,812	)
Other		488			(726	)		(2,521	)		(3,607	)
Net cash used by operating activities		(64,253	)		(156,549	)		(191,695	)		(302,836	)
Cash Flows from Investing Activities
Fixed maturities available for sale purchased		(43,099	)		(47	)		(43,248	)		(67,038	)
Fixed maturities available for sale disposed or matured		66,658			34,304			82,491			603,837
Hedge funds purchased		—			—			—			(4,000	)
Hedge funds disposed		4,893			104,248			12,173			117,364
Other invested assets purchased		—			(35	)		—			(35	)
Other invested assets disposed		654			598			1,410			1,171
Net change in short-term investments		38,001			19,704			138,968			(342,334	)
Payable for securities		—			100			—			100
Net cash provided by investing activities		67,107			158,872			191,794			309,065
Cash Flows from Financing Activities
Proceeds from issuance of common shares		124			162			217			419
Cash dividends paid to preferred shareholders		—			(1,375	)		—			(2,538	)
Cost of shares repurchased		—			—			(99	)		(263	)
Net cash provided (used) by financing activities		124			(1,213	)		118			(2,382	)
Net change in cash		2,978			1,110			217			3,847
Cash, beginning of period		9,490			17,241			12,251			14,504
Cash, end of period	$	12,468		$	18,351		$	12,468		$	18,351
Reconciliation of net (loss) income to net cash used by operating activities:
Net (loss) income before convertible preferred share dividends	$	(11,565	)	$	2,140		$	(18,762	)	$	43,752
Adjustments to reconcile net (loss) income to net cash used by operating activities:
Losses and loss expenses		(44,639	)		(168,131	)		(177,898	)		(478,217	)
Unearned premiums		7,593			(43,215	)		(3,751	)		(41,408	)
Deferred acquisition costs		(76	)		9,825			(68	)		5,106
Receivables		7,706			24,902			37,063			102,161
Reinsurance balances payable		(25,043	)		(2,365	)		(25,719	)		(7,916	)
Reinsurance recoverable		(1,889	)		29,711			(1,084	)		59,125
Income taxes		68			(123	)		(22	)		91
Equity in earnings of limited partnerships		(654	)		(167	)		(1,188	)		(6,039	)
Trading portfolio purchased		—			(52,175	)		—			(101,714	)
Trading portfolio disposed		2,042			52,445			2,042			92,566
Deposit liability		(1,462	)		(8,275	)		(2,424	)		(11,812	)
Receivable on commutation		—			—			—			35,154
Other		3,666			(1,121	)		116			6,315
Net cash used by operating activities	$	(64,253	)	$	(156,549	)	$	(191,695	)	$	(302,836	)