Fisker 8-K Flagstone Re Reports Basic Book Value per Share of $13.59 for end of Third Quarter 2007

Flagstone Reinsurance Holdings Limited

INVESTOR FINANCIAL SUPPLEMENT        

THIRD QUARTER 2007         

Flagstone Reinsurance Holdings Limited

Crawford House

23 Church Street

Hamilton    HM 11, Bermuda

Contact Information:

Brenton Slade 

Director of Investor Relations

#441 - 278-4003 

Website Information:

http://www.flagstonere.bm

This report is for informational purposes only.  It should be read in conjunction

with the documents that we file with the Securities and Exchange Commission

pursuant to the Securities Act of 1933 and the Securities Exchange Act of 1934.

Flagstone Reinsurance Holdings Limited
FINANCIAL SUPPLEMENT TABLE OF CONTENTS
		Page(s)
	Basis of Presentation	i
	Cautionary Note Regarding Forward Looking Statements	ii
	Regulation G - Non GAAP Financial Measures	iii
	I. Financial Highlights	1
	II. Income Statements
	a. Consolidated Statements of Income - Quarterly	2
	b. Gross Premium Written by Line of Business	3
	III. Balance Sheets
	a. Consolidated Balance Sheets	4
	IV. Loss Reserve Analysis
	a. Paid to Incurred Analysis	5
	V. Share Analysis
	a. Capitalization	6
	b. Earnings Per Common Share Analysis - As Reported	7
	c. Book Value Per Common Share Analysis	8
	VI. Mont Fort Consolidation
	a. Balance Sheet Consolidation	9
	b. Income Statement Consolidation	10

Flagstone Reinsurance Holdings Limited
BASIS OF PRESENTATION
	DEFINITIONS AND PRESENTATION
	●	Unless otherwise noted, all data is in thousands, except for share and per share amounts and ratio information.
	●	The debt to capitalization ratio is an indication of the leverage of the Company. It is calculated by dividing the Company's long term debt by the total capital.  Total capital represents the sum of shareholders' equity plus long term debt.
	●	N/A - means not applicable
	●	In presenting the Company's results, management has included and discussed certain "non-GAAP" financial measures, as such term is defined in Regulation G promulgated by the SEC.  Management believes that these non-GAAP measures, which may be defined differently by the other companies, better explain the Company's results of operations in a manner that allows a more complete understanding of the underlying trends in the Company's business.  However, these measures should not be viewed as a substitute for those determined in accordance with GAAP.  The reconciliation of such non-GAAP financial measures to their respective most directly comparable GAAP financial measures in accordance with Regulation G is included in this financial supplement.

i

Flagstone Reinsurance Holdings Limited
	Cautionary Note Regarding Forward-Looking Statements:
	This report may include forward-looking statements which reflect our current views with respect to future events and financial performance. Statements which include the words "expect," "intend," "plan," "believe," "project," "anticipate," "will" and similar statements of a future or forward-looking nature identify forward-looking statements for purposes of the U.S. federal securities laws or otherwise.
	These statements include forward-looking statements both with respect to us specifically and our industry in general. These statements are based on certain assumptions and analyses made by us in light of our experience and perception of historical trends, current conditions and expected future developments, as well as other factors believed to be appropriate in the circumstances. However, whether actual results and developments will conform to our expectations and predictions is subject to a number of risks and uncertainties that could cause actual results to differ materially from expectations, including, but not limited to, the following:
	●	The risks discussed on our Form S-1 filed with SEC on March 30, 2007 beginning on page 12
	●	Cyclicality of demand and pricing of reinsurance market
	●	Unpredictability and severity of catastrophic events
	●	Adequacy of our risk management and loss estimation methods
	●	Adequacy of our loss reserves
	●	Our limited operating history
	●	Dependence on key personnel
	●	Dependence on the policies, procedures and expertise of ceding companies
	●	Potential loss of business from one or more major reinsurance brokers
	●	Potential for financial strength rating downgrade
	●	Risks inherent to the Company's acquisition strategy
	●	Highly competitive business environment
	●	Other factors, most of which are beyond the Company's control.
	Accordingly, all of the forward-looking statements made in this report are qualified by these cautionary statements, and there can be no assurance that the actual results or developments anticipated by us will be realized or, even if substantially realized, that they will have the expected consequences to, or effects on, us or our business or operations. We undertake no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise. All subsequent written and oral forward-looking statements attributable to us or individuals acting on our behalf are expressly qualified in their entirety by this paragraph. You should specifically consider the factors identified in our Form S-1 filed with the SEC on March 30, 2007 which could cause actual results to differ before making an investment decision.

ii

Flagstone Reinsurance Holdings Limited

REGULATION G

NON-GAAP FINANCIAL MEASURES

In presenting the Company’s results, management has included and discussed non-GAAP financial measures.  Management believes that these non-GAAP measures, which may be defined differently by other companies, better explain the Company's results of operations in a manner that allows for a more complete understanding of the underlying trends in the Company's business.   However, these measures should not be viewed as a substitute for those determined in accordance with GAAP.

DILUTED BOOK VALUE PER SHARE

The Company has included diluted book value per common share because it takes into account the effect of dilutive securities, therefore, the Company believes it is a better measure of calculating shareholder returns than book value per common share.  Diluted book value per common share is defined as total shareholders' equity divided by the number of common shares and common share equivalents outstanding at the end of the period including all potentially dilutive securities such as the warrant, PSU's and RSU's.  When the effect of securities would be anti-dilutive, these securities are excluded from the calculation of diluted book value per common share.  The warrant was anti dilutive and was excluded from the calculation of diluted book value per common share as at September 30, 2007 and September 30, 2006.

iii

Flagstone Reinsurance Holdings Limited
FINANCIAL HIGHLIGHTS (Unaudited)
$ in thousands, except per share amounts
HIGHLIGHTS	Three months ended						Nine months ended
	September 30, 2007			September 30, 2006			September 30, 2007			September 30, 2006
Gross premiums written	$	123,704		$	61,914		$	512,062		$	275,981
Net premiums written	$	91,132		$	50,525		$	471,245		$	255,990
Net premiums earned	$	138,799		$	63,481		$	351,867		$	119,728
Net investment income	$	17,022		$	9,849		$	51,184		$	24,650
Net income	$	66,249		$	56,909		$	116,553		$	88,755
Comprehensive income	$	74,559		$	59,701		$	122,846		$	88,015
Cash flow from operating activities	$	105,479		$	65,315		$	272,761		$	123,436
Reserve for losses and loss expenses	$	161,442		$	16,944		$	161,442		$	16,944
Total shareholders' equity	$	1,158,933		$	802,416		$	1,158,933		$	802,416
PER COMMON SHARE AND
COMMON SHARE DATA
Basic earnings per common share	$	0.78		$	0.79		$	1.44		$	1.28
Diluted earnings per common share	$	0.77		$	0.79		$	1.44		$	1.27
Basic weighted average common shares outstanding		85,413,479			71,595,793			80,816,529			69,530,742
Diluted weighted average common shares outstanding		85,491,561			71,705,036			80,937,061			69,618,644
Book value per common share	$	13.59		$	11.22		$	13.59		$	11.22
Diluted book value per common share	$	13.30		$	11.09		$	13.30		$	11.09
Dividend per share	$	0.04		$	-		$	0.04		$	-
FINANCIAL RATIOS
Growth in diluted book value per share (1)		7.1	%		8.0	%		11.7	%		12.5	%
Loss ratio		27.0%	%		15.3	%		46.2%	%		16.3	%
Acquisition cost ratio		20.7	%		17.2	%		16.0	%		15.9	%
General and administrative expense ratio		14.2	%		12.0	%		13.7	%		20.0	%
Combined ratio		61.9	%		44.5	%		75.9	%		52.2	%
INVESTMENT DATA
Total assets	$	2,066,696		$	1,131,390		$	2,066,696		$	1,131,390
Total cash and investments (2)	$	1,756,710		$	964,158		$	1,756,710		$	964,158

 (1) Growth in fully diluted book value per share represents the increase in fully diluted book value per share in the period plus dividends paid.

 (2) Cash and investments represents the total cash and cash equivalents, fixed maturity investments, short term investments, equites, other investments, accrued interest receivable and net payable for investments purchased.

1

Flagstone Reinsurance Holdings Limited
CONSOLIDATED STATEMENTS OF INCOME - QUARTERLY (unaudited)
	Quarter ended			Quarter ended			Quarter ended			Quarter ended			Quarter ended			YTD			YTD			Full Year
	September 30, 2007			June 30, 2007			March 31, 2007			December 31, 2006			September 30, 2006			September 30, 2007			YTD September 30, 2006			December 31, 2006
REVENUES
Gross premiums written	$	123,704		$	181,345		$	207,013		$	26,508		$	61,914		$	512,062		$	275,981		$	302,489
Reinsurance premiums ceded		(32,572	)		-			(8,245	)		-			(11,389	)		(40,817	)		(19,991	)		(19,991	)
Net premiums written		91,132			181,345			198,768			26,508			50,525			471,245			255,990			282,498
Change in net unearned premiums		47,667			(69,503	)		(97,542	)		45,827			12,956			(119,378	)		(136,262	)		(90,435	)
Net premiums earned		138,799			111,842			101,226			72,335			63,481			351,867			119,728			192,063
Net investment income		17,022			20,531			13,631			9,562			9,849			51,184			24,650			34,212
Net realized and unrealized gains (losses)		8,298			(1,901	)	��	4,514			10,041			10,827			10,911			2,206			12,247
Other income		1,961			251			673			2,874			1,216			2,885			3,225			6,099
Total revenues		166,080			130,723			120,044			94,812			85,373			416,847			149,809			244,621
EXPENSES
Loss and loss adjustment expenses		37,439			77,257			47,748			7,110			9,723			162,444			19,550			26,660
Acquisition costs		28,795			14,725			12,718			10,895			10,946			56,238			19,044			29,939
General and administrative expenses		19,763			13,800			14,669			10,843			7,649			48,232			23,898			34,741
Interest expense		5,873			3,520			3,264			3,357			1,291			12,657			1,291			4,648
Net foreign exchange gains		(1,842	)		(56	)		(1,282	)		(335	)		(419	)		(3,180	)		(1,744	)		(2,079	)
Total expenses		90,028			109,246			77,117			31,870			29,190			276,391			62,039			93,909
Income before income taxes, minority interest and
interest in earnings of equity investments		76,052			21,477			42,927			62,942			56,183			140,456			87,770			150,712
Provision for income tax		(229	)		(77	)		(45	)		(50	)		(78	)		(351	)		(78	)		(128	)
Minority interest		(9,317	)		(7,892	)		(7,733	)		-			-			(24,942	)		-			-
Interest in earnings of equity investments		(257	)		1,186			461			691			804			1,390			1,063			1,754
NET INCOME (1)	$	66,249		$	14,694		$	35,610		$	63,583		$	56,909		$	116,553		$	88,755		$	152,338
Change in net unrealized gains (losses)		-			-			-			(3,239	)		2,815			-			(769	)		(4,008	)
Change in currency translation adjustment		8,310			(1,741	)		(276	)		(549	)		(23	)		6,293			29			(520	)
COMPREHENSIVE INCOME	$	74,559		$	12,953		$	35,334		$	59,795		$	59,701		$	122,846		$	88,015		$	147,810
KEY RATIOS/PER COMMON SHARE DATA
Loss ratio		27.0	%		69.1	%		47.2	%		9.8	%		15.3	%		46.2	%		16.3	%		13.9	%
Acquisition cost ratio		20.7	%		13.2	%		12.6	%		15.1	%		17.2	%		16.0	%		15.9	%		15.6	%
General and administrative expense ratio		14.2	%		12.3	%		14.5	%		15.0	%		12.0	%		13.7	%		20.0	%		18.1	%
Combined ratio		61.9	%		94.6	%		74.3	%		39.9	%		44.5	%		75.9	%		52.2	%		47.6	%
														-
Weighted average common shares outstanding - basic		85,413,479			85,139,757			71,746,162			71,601,718			71,595,793			80,816,529			69,530,742			70,054,087
Weighted average common shares outstanding - diluted		85,491,561			85,198,147			72,010,501			71,968,704			71,705,036			80,937,061			69,618,644			70,393,821
Net income per common share outstanding - basic	$	0.78		$	0.17		$	0.50		$	0.89		$	0.79		$	1.44		$	1.28		$	2.17
Net income per common share outstanding - diluted	$	0.77		$	0.17		$	0.49		$	0.88		$	0.79		$	1.44		$	1.27		$	2.16

(1) Effective January 1, 2007, the Company elected to adopt FAS 157 and FAS 159.  As a result of this election, all changes in unrealized gains (losses) associated with our fixed maturity and equity investments are included in net income for the three months ended March 31, 2007, June 30, 2007, and September 30, 2007 and the nine months ended September 30, 2007.  For all prior periods, certain of these changes are included in other comprehensive income.

2

Flagstone Reinsurance Holdings Limited
GROSS PREMIUM WRITTEN BY LINE OF BUSINESS (Unaudited)
	Three months ended September 30, 2007					Three months ended September 30, 2006
	Gross premiums written		% of total			Gross premiums written		% of total
Property catastrophe	$	68,505		55.4	%	$	41,260		66.6	%
Property		36,142		29.2	%		11,892		19.2	%
Short-tail specialty and casualty		19,057		15.4	%		8,762		14.2	%
Total	$	123,704		100.0	%	$	61,914		100.0	%
	Nine months ended September 30, 2007					Nine months ended September 30, 2006
	Gross premiums written		% of total			Gross premiums written		% of total
Property catastrophe	$	373,831		73.0	%	$	201,522		73.0	%
Property		84,473		16.5	%		53,643		19.4	%
Short-tail specialty and casualty		53,758		10.5	%		20,816		7.6	%
Total	$	512,062		100.0	%	$	275,981		100.0	%
	Three months ended September 30, 2007					Three months ended September 30, 2006
	Gross premiums written		% of total			Gross premiums written		% of total
Geographic area of risk insured(1)
North America	$	60,928		49.3	%	$	33,152		53.5	%
Worldwide risks(2)		19,339		15.6	%		3,372		5.5	%
Europe		3,521		2.8	%		5,601		9.0	%
Japan and Australasia		8,261		6.7	%		8,017		13.0	%
Caribbean		25,933		21.0	%		1,125		1.8	%
Other		5,722		4.6	%		10,647		17.2	%
Total	$	123,704		100.0	%	$	61,914		100.0	%
	Nine months ended September 30, 2007					Nine months ended September 30, 2006
	Gross premiums written		% of total			Gross premiums written		% of total
Geographic area of risk insured(1)
North America	$	275,361		53.8	%	$	153,053		55.5	%
Worldwide risks(2)		59,003		11.5	%		35,056		12.7	%
Europe		87,542		17.1	%		34,478		12.5	%
Japan and Australasia		37,774		7.4	%		26,797		9.7	%
Caribbean		40,988		8.0	%		13,491		4.9	%
Other		11,394		2.2	%		13,106		4.7	%
Total	$	512,062		100.0	%	$	275,981		100.0	%

(1)   Except as otherwise noted, each of these categories includes contracts that cover risks located primarily in the designated geographic area.

(2)   This geographic area includes contracts that cover risks primarily in two or more geographic zones.

3

Flagstone Reinsurance Holdings Limited
CONSOLIDATED BALANCE SHEETS  (unaudited)
	As at
	September 30, 2007			June 30, 2007			March 31, 2007			December 31, 2006			September 30, 2006
ASSETS
Investments:
Fixed maturity investments, at fair value	$	1,102,328		$	978,660		$	902,509		$	682,278		$	367,399
Short term investments, at fair value		14,242			25,583			4,974			-			227,698
Equity investments, at fair value		28,746			28,766			23,090			-			-
Other investments		289,340			157,438			151,272			74,496			48,513
Total investments		1,434,656			1,190,447			1,081,845			756,774			643,610
Cash and cash equivalents		322,768			422,045			191,191			261,352			326,758
Proceeds receivable from initial public offering		-			-			164,854			-			-
Reinsurance premium balances receivable		189,553			220,229			145,834			68,940			106,168
Unearned premiums ceded		22,491			4,211			7,484			8,224			13,003
Accrued interest receivable		7,534			7,719			5,965			6,331			4,779
Receivable for investments sold		-			-			-			3,599			-
Deferred acquisition costs		36,819			34,186			22,867			11,909			17,184
Funds withheld		6,606			5,138			5,069			-			-
Goodwill		11,556			6,602			5,624			5,624			4,264
Other assets		33,704			17,580			17,363			18,659			14,819
Due from related parties		1,009			2,291			1,094			3,090			805
TOTAL ASSETS	$	2,066,696		$	1,910,448		$	1,649,190		$	1,144,502		$	1,131,390
LIABILITIES
Loss and loss adjustment expense reserves	$	161,442		$	135,143		$	66,540		$	22,516		$	16,944
Unearned premiums		252,096			269,020			202,803			98,659			149,265
Insurance and reinsurance balances payable		22,728		��	883			6,235			-			-
Payable for investments purchased		8,248			1,201			7,246			9,531			10,989
Long term debt		264,469			238,290			137,361			137,159			136,476
Other liabilites		26,076			17,164			12,683			11,866			12,479
Due to related parties		-			1,283			1,359			252			1,274
TOTAL LIABILITIES		735,059			662,984			434,227			279,983			327,427
Temporary Equity		-			-			-			-			1,547
Minority Interest - Mont Fort Re(1) and Island Heritage		172,704			161,619			153,727			-			-
SHAREHOLDERS' EQUITY
Common shares		853			853			845			715			715
Additional paid-in capital		903,220			901,279			889,631			728,378			726,070
Accumulated other comprehensive income (loss)		5,774			(2,536	)		(795	)		(4,528	)		(740	)
Retained earnings		249,086			186,249			171,555			139,954			76,371
TOTAL SHAREHOLDERS' EQUITY		1,158,933			1,085,845			1,061,236			864,519			802,416
TOTAL LIABILITIES, TEMPORARY EQUITY, MINORITY INTEREST AND SHAREHOLDERS' EQUITY	$	2,066,696		$	1,910,448		$	1,649,190		$	1,144,502		$	1,131,390
Book value per common share	$	13.59		$	12.73		$	12.55		$	12.08		$	11.22
Diluted book value per common share adjusted for dividends	$	13.30		$	12.46		$	12.31		$	11.94		$	11.09
Debt to total capitalization (2)		18.6	%		18.0	%		11.5	%		13.7	%		14.5	%

(1) See Pages 9 and 10 for additional information.

(2) Comprises long term debt divided by the sum of long term debt plus shareholders' equity.

4

Flagstone Reinsurance Holdings Limited
RESERVE FOR LOSSES AND LOSS EXPENSES: PAID TO INCURRED ANALYSIS (Unaudited)
	Three months ended September 30, 2007									Three months ended June 30, 2007									Three months ended March 31, 2007									For the year ended December 31, 2006
Reserve for losses and loss expenses	Gross			Recoveries			Net			Gross			Recoveries			Net			Gross			Recoveries			Net			Gross			Recoveries			Net
Beginning of period	$	135,143		$	-		$	135,143		$	66,540		$	-		$	66,540		$	22,516		$	-		$	22,516		$	-		$	-		$	-
Incurred		37,439			-			37,439			77,257			-			77,257			47,748			-			47,748			26,660			-			26,660
Other (1)		5,542			-			5,542			-			-			-			-			-			-			-			-			-
Paid		(16,682	)		-			(16,682	)		(8,654	)		-			(8,654	)		(3,724	)		-			(3,724	)		(4,144	)		-			(4,144	)
End of period	$	161,442		$	-		$	161,442		$	135,143		$	-		$	135,143		$	66,540		$	-		$	66,540		$	22,516		$	-		$	22,516
Paid to incurred percentage		44.6	%		0.0	%		44.6	%		11.2	%		0.0	%		11.2	%		7.8	%		0.0	%		7.8	%		15.5	%		0.0	%		15.5	%

(1) This amount represents the movement in reserves as a result of foreign exchange movements and the reserves acquired upon acquistition of the controlling interest in Island Heritage.

5

Flagstone Reinsurance Holdings Limited
CAPITALIZATION (Unaudited)          & #160;
	September 30, 2007			June 30, 2007			March 31, 2007			December 31, 2006			September 30, 2006
Long term debt	$	264,469		$	238,290		$	137,361		$	137,159		$	136,476
Shareholders' equity		1,158,933			1,085,845			1,061,236			864,519			802,416
Total Capitalization	$	1,423,402		$	1,324,135		$	1,198,597		$	1,001,678		$	938,892
Leverage ratio:
Debt to total capitalization		18.6	%		18.0	%		11.5	%		13.7	%		14.5	%
	September 30, 2007						December 31, 2006
	Debt or Facility Principal			In use			Debt or Facility Principal			In use
Debt and financing arrangements
Junior Subordinated Deferrable Debentures (a)	$	25,000		$	25,000		$	-		$	-
Junior Subordinated Deferrable Debentures (b)	$	100,000		$	100,000		$	-		$	-
Junior Subordinated Deferrable Debentures (c)	$	120,000		$	120,000		$	120,000		$	120,000
Junior Subordinated Deferrable Debentures (d)	€	13,000		€	13,000		€	13,000		€	13,000
Other long term debt	$	922		$	922		$	459		$	459
Letter of credit facility (e)	$	400,000		$	70,500		$	200,000		$	67,800
Letter of credit facility (f)	$	200,000		$	-		$	-		$	-

Notes:

(a) The Junior Subordinated Deferrable Debentures have a floating rate equal to LIBOR plus 310 basis points per annum reset quarterly.  The notes mature on September 15, 2037, and may be called at par

by the Issuer at any time after September 15, 2012.

(b) The Junior Subordinated Deferrable Debentures have a floating rate equal to LIBOR plus 300 basis points per annum reset quarterly.  The notes mature on July 30, 2037, and may be called at par

by the Issuer at any time after July 30, 2012.

(c) The Junior Subordinated Deferrable Debentures have a floating rate equal to LIBOR plus 354 basis points per annum reset quarterly.  The notes mature on September 15, 2036 and may be called at par

by the Issuer at any time after September 15, 2011.

(d) The Junior Subordinated Deferrable Debentures have a floating rate equal to EURIBOR plus 354 basis points per annum reset quarterly.  The notes mature on September 15, 2036 and may be called at par

by the Issuer at any time after September 15, 2011.

(e) $400.0 million uncommitted letter of credit facility agreement with Citibank N.A.  The drawn amount of the facility at September 30, 2006 was secured by $78.1 million of fixed maturity securities from the Company's investment portfolio.

(f) $200.0 million uncommitted letter of credit facility agreement with Wachovia Bank, N.A.  If drawn upon, the utilized portion of the facility will be secured by an appropriate portion of securities from the

Company’s investment portfolio.

6

Flagstone Reinsurance Holdings Limited
EARNINGS PER COMMON SHARE INFORMATION - AS REPORTED, GAAP (Unaudited)
	Three months ended				Nine months ended				As at Year ended
	September 30,				September 30,				December 31,
	2007		2006		2007		2006		2006
Net income available to common shareholders	$	66,249	$	56,909	$	116,553	$	88,755	$	152,338
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
Basic weighted average common shares outstanding (1)		85,413,479		71,595,793		80,816,529		69,530,742		70,054,087
Dilutive share equivalents:
Unvested performance share units		-		87,938		-		87,902		339,734
Unvested restricted share units		78,082		21,305		120,532		-		-
Diluted weighted average common shares outstanding		85,491,561		71,705,036		80,937,061		69,618,644		70,393,821
EARNINGS PER COMMON SHARE
Basic	$	0.78	$	0.79	$	1.44	$	1.28	$	2.17
Diluted	$	0.77	$	0.79	$	1.44	$	1.27	$	2.16

(1) Includes weighted average vested restricted share units

7

Flagstone Reinsurance Holdings Limited
NON-GAAP FINANCIAL MEASURES RECONCILIATION
BASIC AND DILUTED BOOK VALUE PER COMMON SHARE (Unaudited)
	As at September 30,			As at June 30,			As at March 31,			As at December 31,			As at September 30,
	2007			2007			2007			2006			2006
DILUTIVE COMMON SHARES AS IF OUTSTANDING
Common shareholders' equity	$	1,158,933		$	1,085,845		$	1,061,236		$	864,519		$	802,416
Dividends declared and paid	$	3,412		$	-		$	-		$	-		$	-
Common shares outstanding		85,297,891			85,297,891			84,547,891			71,547,891			71,547,891
Basic book value per common share	$	13.59		$	12.73		$	12.55		$	12.08		$	11.22
Basic book value per common share adjusted for dividends	$	13.63		$	12.73		$	12.55		$	12.08		$	11.22
Diluted book value on an "as if converted basis"
Common shareholders' equity	$	1,158,933		$	1,085,845		$	1,061,236		$	864,519		$	802,416
add in:
proceeds on exercise of warrant (1)		-			-			-			-			-
Adjusted shareholders' equity	$	1,158,933		$	1,085,845		$	1,061,236		$	864,519		$	802,416
Dividends declared and paid	$	3,412		$	-		$	-		$	-		$	-
As if converted diluted shares outstanding
Common shares outstanding		85,297,891			85,297,891			84,547,891			71,547,891			71,547,891
add in:
vesting of performance share units		1,538,000			1,538,000			1,381,000			713,000			713,000
vesting of restricted share units		326,538			326,538			254,477			117,727			104,228
Diluted common shares outstanding		87,162,429			87,162,429			86,183,368			72,378,618			72,365,119
Diluted book value per common share	$	13.30		$	12.46		$	12.31		$	11.94		$	11.09
Diluted book value per common share adjusted for dividends (3)	$	13.34		$	12.46		$	12.31		$	11.94		$	11.09
Change in diluted book value per share: Quarter		6.7	%		1.2	%		3.1	%		7.7	%		8.0	%
Change in diluted book value per share adjusted for dividends (2): Quarter		7.1	%		1.2	%		3.1	%		7.7	%		8.0	%
Change in diluted book value per share adjusted for dividends (2): Rolling 12 months		20.3	%		21.3	%		23.3	%		21.2	%		n/a
Annualized change in diluted book value per share adjusted for dividends since inception		18.9	%		16.9	%		19.5	%		21.2	%		17.0	%

(1) Diluted book value per share incorporates the assumption that the warrant would not be exercised at the end of any period where the share price is less than the strike price.

⁽²⁾ Change in diluted book value adjusted for dividends is the internal rate of return of the increase in diluted book value per share in the period plus dividends declared.

⁽³⁾ Diluted book value per common share is calculated by dividing the sum of cumulative dividends and common shareholders' equity by diluted common shares outstanding.

8

Flagstone Reinsurance Holdings Limited
Summary Consolidating Balance Sheet - Mont Fort (unaudited)
	As at September 30, 2007
	Flagstone Consolidated Excluding Mont Fort		Mont Fort		Consolidation/Elimination			Flagstone Consolidated
ASSETS
Investments:
Fixed maturity investments, at fair value	$	1,008,133	$	94,195	$	-		$	1,102,328
Short term investments, at fair value		14,242		-		-			14,242
Equity investments, at fair value		28,746		-		-			28,746
Other investments		290,839		-		(1,499	)		289,340
Total investments		1,341,960		94,195		(1,499	)		1,434,656
Cash and cash equivalents		249,761		73,007		-			322,768
Reinsurance premium balances receivable		184,092		5,461		-			189,553
Unearned premiums ceded		37,963		-		(15,472	)		22,491
Accrued interest receivable		6,565		969		-			7,534
Deferred acquisition costs		36,097		1,579		(857	)		36,819
Funds withheld		6,606		-		-			6,606
Goodwill		11,556		-		-			11,556
Other assets		31,989		1,715		-			33,704
Due from related parties		4,022		-		(3,013	)		1,009
TOTAL ASSETS	$	1,910,611	$	176,926	$	(20,841	)	$	2,066,696
LIABILITIES
Loss and loss adjustment expense reserves	$	161,442		---		---		$	161,442
Unearned premiums		252,096		15,472		(15,472	)		252,096
Insurance and reinsurance balance payable		22,041		1,544		(857	)		22,728
Payable for investments purchased		8,248		-		-			8,248
Long term debt		264,469		-		-			264,469
Other liabilites		25,816		260		-			26,076
Due to related parties		36		2,977		(3,013	)		-
TOTAL LIABILITIES		734,148		20,253		(19,342	)		735,059
Minority Interest		17,530		-		155,174			172,704
SHAREHOLDERS' EQUITY
Common shares		853		128,118		(128,118	)		853
Additional paid-in capital		903,220		-		-			903,220
Accumulated other comprehensive (loss)		5,774		-		-			5,774
Retained earnings		249,086		28,555		(28,555	)		249,086
TOTAL SHAREHOLDERS' EQUITY		1,158,933		156,673		(156,673	)		1,158,933
TOTAL LIABILITIES, MINORITY INTEREST AND SHAREHOLDERS' EQUITY	$	1,910,611	$	176,926	$	(20,841	)	$	2,066,696

9

Flagstone Reinsurance Holdings Limited
Summary Consolidating Income Statements - Mont Fort (unaudited)
	Quarter ending September 30, 2007												YTD September 30, 2007
	Flagstone Consolidated Excluding Mont Fort			Mont Fort			Consolidation/Elimination			Flagstone Consolidated			Flagstone Consolidated Excluding Mont Fort			Mont Fort			Consolidation/Elimination			Flagstone Consolidated
REVENUES
Gross premiums written	$	123,704		$	3,097		$	(3,097	)	$	123,704		$	512,062		$	35,484		$	(35,484	)	$	512,062
Reinsurance premiums ceded		(35,669	)		-			3,097			(32,572	)		(76,301	)		-			35,484			(40,817	)
Net premiums written		88,035			3,097			-			91,132			435,761			35,484			-			471,245
Change in net unearned premiums		41,603			6,064			-			47,667			(111,243	)		(8,135	)		-			(119,378	)
Net premiums earned		129,638			9,161			-			138,799			324,518			27,349			-			351,867
Net investment income		14,858			2,164						17,022			44,875			6,309			-			51,184
Net realized and unrealized gains (losses)		9,443			(1,076	)		(69	)		8,298			13,653			(2,811	)		69			10,911
Other income		4,142			(1,334	)		(847	)		1,961			8,775			(4,435	)		(1,455	)		2,885
Total revenues		158,081			8,915			(916	)		166,080			391,821			26,412			(1,386	)		416,847
EXPENSES
Loss and loss adjustment expenses		37,439			-			-			37,439			162,444			-			-			162,444
Acquisition costs		28,790			921			(916	)		28,795			54,950			2,674			(1,386	)		56,238
General and administrative expenses		19,703			60			-			19,763			48,080			152			-			48,232
Interest expense		5,873			-			-			5,873			12,657			-			-			12,657
Net foreign exchange gains		(1,842	)		-			-			(1,842	)		(3,180	)		-			-			(3,180	)
Total expenses		89,962			981			(916	)		90,028			274,951			2,826			(1,386	)		276,391
Income before income taxes, minority interest
and interest in earnings of equity invetsments		68,118			7,934			-			76,052			116,870			23,586			-			140,456
Provision for income tax		(229	)		-			-			(229	)		(351	)		-			-			(351	)
Minority interest		(1,409	)		-			(7,908	)		(9,317	)		(1,410	)		-			(23,532	)		(24,942	)
Interest in earnings of equity investments		(231	)		-			(26	)		(257	)		1,444			-			(54	)		1,390
NET INCOME	$	66,249		$	7,934		$	(7,934	)	$	66,249		$	116,553		$	23,586		$	(23,586	)	$	116,553
Change in net unrealized losses		-			-			-			-			-			-			-			-
Change in currency translation adjustment		8,310			-			-			8,310			6,293			-			-			6,293
COMPREHENSIVE INCOME	$	74,559		$	7,934		$	(7,934	)	$	74,559		$	122,846		$	23,586		$	(23,586	)	$	122,846
KEY RATIOS
Loss ratio		28.9	%								27.0	%		50.1	%								46.2	%
Acquisition cost ratio		22.2	%								20.7	%		16.9	%								16.0	%
General and administrative expense ratio		15.2	%								14.2	%		14.8	%								13.7	%
Combined ratio		66.3	%								61.9	%		81.9	%								75.9	%

Note: Mont Fort was consolidated in starting in Q1, 2007, therefore Q3 2006 and YTD 2006 are not included on this page.

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