| Guarantor Financial Information | Guarantor Financial Information The following tables present condensed consolidating balance sheets at June 30, 2017 and December 31, 2016 , condensed consolidating statements of income and comprehensive income for the three and six months ended June 30, 2017 and 2016 and condensed consolidating statements of cash flows for the six months ended June 30, 2017 and 2016 for XL Group, XLIT, a 100% owned subsidiary of XL Group, and XL Group's other subsidiaries (excluding XL-Ireland), which are all 100% directly or indirectly owned subsidiaries of XLIT. For purposes of this disclosure, the results of XL-Ireland, which is currently in liquidation proceedings and whose assets are otherwise immaterial, at June 30, 2017 and December 31, 2016 and for the three and six months ended June 30, 2017 have been included within the results of XL Group. See Note 1, "Significant Accounting Policies ," for information regarding changes in the Company's organizational structure as a result of the Redomestication. For a discussion of debt instruments issued by XLIT, see Note 9, "Notes Payable and Debt and Financing Arrangements ." June 30, 2017 Condensed Consolidating Balance Sheet (U.S. dollars in thousands, except share data) XL-Group (1) XLIT Other XL Group Subsidiaries Consolidating Adjustments and Eliminations XL Group Consolidated ASSETS Investments: Total investments available for sale $ — $ 570,576 $ 32,032,542 $ — $ 32,603,118 Total investments trading — — 1,772,877 — 1,772,877 Investments in affiliates — — 2,127,115 — 2,127,115 Other investments — — 1,126,741 — 1,126,741 Total investments $ — $ 570,576 $ 37,059,275 $ — $ 37,629,851 Cash and cash equivalents 1,144 423,398 2,709,280 — 3,133,822 Restricted cash — — 181,230 — 181,230 Investments in subsidiaries (2) 11,068,864 14,645,048 — (25,713,912 ) — Accrued investment income 10 2,484 268,246 (10 ) 270,730 Deferred acquisition costs and value of business acquired — — 1,143,671 — 1,143,671 Ceded unearned premiums — — 2,566,652 — 2,566,652 Premiums receivable — — 6,973,206 — 6,973,206 Reinsurance balances receivable — — 755,511 — 755,511 Unpaid losses and loss expenses recoverable — — 5,858,369 — 5,858,369 Receivable from investments sold — 46,375 395,964 — 442,339 Goodwill and other intangible assets — — 2,219,390 — 2,219,390 Deferred tax asset — — 293,219 — 293,219 Amounts due from subsidiaries/parent 14,706 — 66,053 (80,759 ) — Other assets 12,311 32,335 869,614 — 914,260 Total assets $ 11,097,035 $ 15,720,216 $ 61,359,680 $ (25,794,681 ) $ 62,382,250 LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities: Unpaid losses and loss expenses $ — $ — $ 26,822,346 $ — $ 26,822,346 Deposit liabilities — — 1,123,628 — 1,123,628 Future policy benefit reserves — — 3,591,573 — 3,591,573 Funds withheld on GreyCastle life retrocession arrangements — — 918,304 — 918,304 Unearned premiums — 8,848,374 — 8,848,374 Notes payable and debt — 3,207,339 — — 3,207,339 Reinsurance balances payable — — 3,428,302 — 3,428,302 Payable for investments purchased — — 268,771 — 268,771 Deferred tax liability — — 97,879 — 97,879 Amounts due to subsidiaries/parent — 66,053 14,706 (80,759 ) — Other liabilities 16,483 33,460 923,384 — 973,327 Total liabilities $ 16,483 $ 3,306,852 $ 46,037,267 $ (80,759 ) $ 49,279,843 Shareholders' Equity: Shareholders' equity attributable to XL Group Ltd $ 11,080,552 $ 11,063,364 $ 14,645,048 $ (25,708,412 ) $ 11,080,552 Non-controlling interest in equity of consolidated subsidiaries — 1,350,000 677,365 (5,510 ) 2,021,855 Total shareholders' equity $ 11,080,552 $ 12,413,364 $ 15,322,413 $ (25,713,922 ) $ 13,102,407 Total liabilities and shareholders' equity $ 11,097,035 $ 15,720,216 $ 61,359,680 $ (25,794,681 ) $ 62,382,250 ____________ (1) Results for the period include XL-Ireland, which prior to the Redomestication was the ultimate parent and is now in liquidation proceedings as outlined in Note 1, "Significant Accounting Policies ." The Company expects the net assets of XL-Ireland to ultimately be distributed to XL Group upon completion of the liquidation. (2) XL Group balance includes investment in $5.5 million of XLIT Series D Preference Ordinary Shares and XLIT Series E Non-Cumulative Preference Ordinary Shares. December 31, 2016 Condensed Consolidating Balance Sheet (U.S. dollars in thousands, except share data) XL Group (1) XLIT Other XL Group Subsidiaries Consolidating Adjustments and Eliminations XL Group Consolidated ASSETS Investments: Total investments available for sale $ — $ 638,236 $ 31,280,890 $ — $ 31,919,126 Total investments trading — — 1,626,577 — 1,626,577 Investments in affiliates — — 2,177,645 — 2,177,645 Other investments — 9 1,164,555 — 1,164,564 Total investments $ — $ 638,245 $ 36,249,667 $ — $ 36,887,912 Cash and cash equivalents 1,022 84,286 3,341,680 — 3,426,988 Restricted cash — — 153,504 — 153,504 Investments in subsidiaries 10,897,195 14,238,698 — (25,135,893 ) — Accrued investment income 55 2,981 281,385 (55 ) 284,366 Deferred acquisition costs and value of business acquired — — 946,721 — 946,721 Ceded unearned premiums — — 1,687,864 — 1,687,864 Premiums receivable — — 5,522,976 — 5,522,976 Reinsurance balances receivable — — 577,479 — 577,479 Unpaid losses and loss expenses recoverable — — 5,491,297 — 5,491,297 Receivable from investments sold — — 128,411 — 128,411 Goodwill and other intangible assets — — 2,203,653 — 2,203,653 Deferred tax asset — — 310,542 — 310,542 Amounts due from subsidiaries/parent 42,780 — 72,962 (115,742 ) — Other assets 15,188 40,108 757,093 — 812,389 Total assets $ 10,956,240 $ 15,004,318 $ 57,725,234 $ (25,251,690 ) $ 58,434,102 LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities: Unpaid losses and loss expenses $ — $ — $ 25,939,571 $ — $ 25,939,571 Deposit liabilities — — 1,116,233 — 1,116,233 Future policy benefit reserves — — 3,506,047 — 3,506,047 Funds withheld on GreyCastle life retrocession arrangements — — 998,968 — 998,968 Unearned premiums — — 7,293,028 — 7,293,028 Notes payable and debt — 2,647,677 — — 2,647,677 Reinsurance balances payable — — 2,451,717 — 2,451,717 Payable for investments purchased — — 226,009 — 226,009 Deferred tax liability — — 77,271 — 77,271 Amounts due to subsidiaries/parent — 72,962 42,780 (115,742 ) — Other liabilities 17,728 41,984 1,157,190 — 1,216,902 Total liabilities $ 17,728 $ 2,762,623 $ 42,808,814 $ (115,742 ) $ 45,473,423 Shareholders' Equity: Shareholders' equity attributable to XL Group Ltd $ 10,938,512 $ 10,897,195 $ 14,238,698 $ (25,135,893 ) $ 10,938,512 Non-controlling interest in equity of consolidated subsidiaries — 1,344,500 677,722 (55 ) 2,022,167 Total shareholders' equity $ 10,938,512 $ 12,241,695 $ 14,916,420 $ (25,135,948 ) $ 12,960,679 Total liabilities and shareholders' equity $ 10,956,240 $ 15,004,318 $ 57,725,234 $ (25,251,690 ) $ 58,434,102 ____________ (1) Results for the period include XL-Ireland, which prior to the Redomestication was the ultimate parent and is now in liquidation proceedings as outlined in Note 1, "Significant Accounting Policies ." The Company expects the net assets of XL-Ireland to ultimately be distributed to XL Group upon completion of the liquidation. Three Months Ended June 30, 2017 Condensed Consolidating Statement of Income and Comprehensive Income (U.S. dollars in thousands, except per share data) XL Group (1) XLIT Other XL Group Subsidiaries Consolidating Adjustments and Eliminations XL Group Consolidated Revenues: Net premiums earned $ — $ — $ 2,516,917 $ — $ 2,516,917 Total net investment income 10 2,103 206,571 (10 ) 208,674 Total net realized gains (losses) on investments — 1,446 55,182 — 56,628 Net realized and unrealized gains (losses) on derivative instruments — — (906 ) — (906 ) Net realized and unrealized gains (losses) on life retrocession embedded derivative and derivative instruments - Life Funds Withheld Assets — — (34,596 ) — (34,596 ) Income (loss) from investment fund affiliates — — 30,818 — 30,818 Fee income and other — — 10,225 — 10,225 Total revenues $ 10 $ 3,549 $ 2,784,211 $ (10 ) $ 2,787,760 Expenses: Net losses and loss expenses incurred $ — $ — $ 1,529,083 $ — $ 1,529,083 Claims and policy benefits — — 7,595 — 7,595 Acquisition costs — — 433,584 — 433,584 Operating expenses 27,389 1,152 444,237 — 472,778 Exchange (gains) losses 936 26 (6,605 ) — (5,643 ) Interest expense — 35,277 18,741 — 54,018 Total expenses $ 28,325 $ 36,455 $ 2,426,635 $ — $ 2,491,415 Income (loss) before income tax and income (loss) from operating affiliates $ (28,315 ) $ (32,906 ) $ 357,576 $ (10 ) $ 296,345 Income (loss) from operating affiliates — — 42,704 — 42,704 Equity in net earnings (losses) of subsidiaries 329,935 362,841 — (692,776 ) — Provision (benefit) for income tax — — 29,006 — 29,006 Net income (loss) $ 301,620 $ 329,935 $ 371,274 $ (692,786 ) $ 310,043 Non-controlling interests — — 8,433 (10 ) 8,423 Net income (loss) attributable to common shareholders $ 301,620 $ 329,935 $ 362,841 $ (692,776 ) $ 301,620 Comprehensive income (loss) $ 377,811 $ 406,126 $ 439,032 $ (845,158 ) $ 377,811 ____________ (1) Results for the period include XL-Ireland, which prior to the Redomestication was the ultimate parent and is now in liquidation proceedings as outlined in Note 1, "Significant Accounting Policies ." The Company expects the net assets of XL-Ireland to ultimately be distributed to XL Group upon completion of the liquidation. Three Months Ended June 30, 2016 Condensed Consolidating Statement of Income and Comprehensive Income (U.S. dollars in thousands, except per share data) XL- Ireland XLIT Other XL-Ireland Subsidiaries Consolidating Adjustments and Eliminations XL-Ireland Consolidated Revenues: Net premiums earned $ — $ — $ 2,532,212 $ — $ 2,532,212 Total net investment income 64 3,096 211,747 481 215,388 Total net realized gains (losses) on investments — 976 103,274 367 104,617 Net realized and unrealized gains (losses) on derivative instruments — — 906 — 906 Net realized and unrealized gains (losses) on life retrocession embedded derivative and derivative instruments - Life Funds Withheld Assets — — (229,742 ) — (229,742 ) Income (loss) from investment fund affiliates — — 13,179 — 13,179 Fee income and other — — 10,862 — 10,862 Total revenues $ 64 $ 4,072 $ 2,642,438 $ 848 $ 2,647,422 Expenses: Net losses and loss expenses incurred $ — $ — $ 1,632,386 $ — $ 1,632,386 Claims and policy benefits — — 5,482 — 5,482 Acquisition costs — — 420,520 — 420,520 Operating expenses (499 ) 1,071 521,949 — 522,521 Exchange (gains) losses (470 ) (136 ) (18,494 ) — (19,100 ) Interest expense (9 ) 35,177 20,570 — 55,738 Total expenses $ (978 ) $ 36,112 $ 2,582,413 $ — $ 2,617,547 Income (loss) before income tax and income (loss) from operating affiliates $ 1,042 $ (32,040 ) $ 60,025 $ 848 $ 29,875 Income (loss) from operating affiliates — — 21,418 — 21,418 Equity in net earnings (losses) of subsidiaries 42,740 78,114 — (120,854 ) — Provision (benefit) for income tax — — 2,467 — 2,467 Net income (loss) $ 43,782 $ 46,074 $ 78,976 $ (120,006 ) $ 48,826 Non-controlling interests — 3,334 1,710 — 5,044 Net income (loss) attributable to common shareholders $ 43,782 $ 42,740 $ 77,266 $ (120,006 ) $ 43,782 Comprehensive income (loss) $ 357,812 $ 356,770 $ 391,296 $ (748,066 ) $ 357,812 Six Months Ended June 30, 2017 Condensed Consolidating Statement of Income and Comprehensive Income (U.S. dollars in thousands, except per share data) XL Group (1) XLIT Other XL Group Subsidiaries Consolidating Adjustments and Eliminations XL Group Consolidated Revenues: Net premiums earned $ — $ — $ 5,039,708 $ — $ 5,039,708 Total net investment income 94 4,416 404,790 (94 ) 409,206 Total net realized gains (losses) on investments — 669 93,245 — 93,914 Net realized and unrealized gains (losses) on derivative instruments — — (7,975 ) — (7,975 ) Net realized and unrealized gains (losses) on life retrocession embedded derivative and derivative instruments - Life Funds Withheld Assets — — (84,697 ) — (84,697 ) Income (loss) from investment fund affiliates — — 69,079 — 69,079 Fee income and other — — 23,886 — 23,886 Total revenues $ 94 $ 5,085 $ 5,538,036 $ (94 ) $ 5,543,121 Expenses: Net losses and loss expenses incurred $ — $ — $ 3,112,539 $ — $ 3,112,539 Claims and policy benefits — — 14,886 — 14,886 Acquisition costs — — 869,453 — 869,453 Operating expenses 43,570 1,661 895,585 — 940,816 Exchange (gains) losses 1,112 27 (10,118 ) — (8,979 ) Interest expense — 70,424 34,305 — 104,729 Total expenses $ 44,682 $ 72,112 $ 4,916,650 $ — $ 5,033,444 Income (loss) before income tax and income (loss) from operating affiliates $ (44,588 ) $ (67,027 ) $ 621,386 $ (94 ) $ 509,677 Income (loss) from operating affiliates — — 56,313 — 56,313 Equity in net earnings (losses) of subsidiaries 499,051 602,367 — (1,101,418 ) — Provision (benefit) for income tax — — 42,098 — 42,098 Net income (loss) $ 454,463 $ 535,340 $ 635,601 $ (1,101,512 ) $ 523,892 Non-controlling interests — 36,289 33,234 (94 ) 69,429 Net income (loss) attributable to common shareholders $ 454,463 $ 499,051 $ 602,367 $ (1,101,418 ) $ 454,463 Comprehensive income (loss) $ 660,082 $ 704,670 $ 807,986 $ (1,512,656 ) $ 660,082 ____________ (1) Results for the period include XL-Ireland, which prior to the Redomestication was the ultimate parent and is now in liquidation proceedings as outlined in Note 1, "Significant Accounting Policies ." The Company expects the net assets of XL-Ireland to ultimately be distributed to XL Group upon completion of the liquidation. Six Months Ended June 30, 2016 Condensed Consolidating Statement of Income and Comprehensive Income (U.S. dollars in thousands, except per share data) XL- Ireland XLIT Other XL-Ireland Subsidiaries Consolidating Adjustments and Eliminations XL-Ireland Consolidated Revenues: Net premiums earned $ — $ — $ 4,886,822 $ — $ 4,886,822 Total net investment income 177 4,881 415,054 1,162 421,274 Total net realized gains (losses) on investments — 1,253 194,214 1,900 197,367 Net realized and unrealized gains (losses) on derivative instruments — — (2,716 ) — (2,716 ) Net realized and unrealized gains (losses) on life retrocession embedded derivative and derivative instruments - Life Funds Withheld Assets — — (465,822 ) — (465,822 ) Income (loss) from investment fund affiliates — — 8,600 — 8,600 Fee income and other — — 19,124 — 19,124 Total revenues $ 177 $ 6,134 $ 5,055,276 $ 3,062 $ 5,064,649 Expenses: Net losses and loss expenses incurred $ — $ — $ 3,014,871 $ — $ 3,014,871 Claims and policy benefits — — 10,419 — 10,419 Acquisition costs — — 823,787 — 823,787 Operating expenses 2,775 2,566 1,032,561 — 1,037,902 Exchange (gains) losses (453 ) (172 ) (52,294 ) — (52,919 ) Loss on sale of life reinsurance subsidiary — — — — — Extinguishment of debt — — — — — Interest expense (15 ) 70,346 37,710 — 108,041 Total expenses $ 2,307 $ 72,740 $ 4,867,054 $ — $ 4,942,101 Income (loss) before income tax and income (loss) from operating affiliates $ (2,130 ) $ (66,606 ) $ 188,222 $ 3,062 $ 122,548 Income (loss) from operating affiliates — — 34,068 — 34,068 Gain on sale of operating affiliate — — — — — Equity in net earnings (losses) of subsidiaries 67,177 172,894 — (240,071 ) — Provision (benefit) for income tax (620 ) — 25,382 — 24,762 Net income (loss) $ 65,667 $ 106,288 $ 196,908 $ (237,009 ) $ 131,854 Non-controlling interests — 39,111 27,076 — 66,187 Net income (loss) attributable to common shareholders $ 65,667 $ 67,177 $ 169,832 $ (237,009 ) $ 65,667 Comprehensive income (loss) $ 787,638 $ 789,148 $ 891,803 $ (1,680,951 ) $ 787,638 Six Months Ended June 30, 2017 Condensed Consolidating Statement of Cash Flows (U.S. dollars in thousands) XL Group (1) XLIT Other XL Group Subsidiaries Consolidating Adjustments and Eliminations XL Group Consolidated Cash flows provided by (used in) operating activities: Net cash provided by (used in) operating activities $ 286,697 $ 332,788 $ (52,744 ) $ (695,987 ) $ (129,246 ) Cash flows provided by (used in) investing activities: Proceeds from sale of fixed maturities and short-term investments $ — $ 81,662 $ 6,305,948 $ — $ 6,387,610 Proceeds from redemption of fixed maturities and short-term investments — 82,392 2,001,790 — 2,084,182 Proceeds from sale of equity securities — 677 228,237 — 228,914 Purchases of fixed maturities and short-term investments — (143,851 ) (8,575,173 ) — (8,719,024 ) Purchases of equity securities — — (277,329 ) — (277,329 ) Proceeds from sale of affiliates — — 236,861 — 236,861 Purchases of affiliates — — (51,891 ) — (51,891 ) Returns of capital from subsidiaries 237,013 — — (237,013 ) — Change in restricted cash — — (27,726 ) — (27,726 ) Other, net — — 5,127 — 5,127 Net cash provided by (used in) investing activities $ 237,013 $ 20,880 $ (154,156 ) $ (237,013 ) $ (133,276 ) Cash flows provided by (used in) financing activities: Proceeds from issuance of common shares and exercise of stock options $ 42,630 $ — $ — $ — $ 42,630 Buybacks of common shares (450,629 ) — — — (450,629 ) Employee withholding on share-based compensation — — (23,957 ) — (23,957 ) Dividends paid on common shares (115,589 ) (295,987 ) (400,000 ) 695,987 (115,589 ) Return of capital — (237,013 ) — 237,013 — Distributions to non-controlling interests — (39,867 ) (33,841 ) — (73,708 ) Contributions from non-controlling interests — — 25 — 25 Proceeds from issuance of debt — 558,311 — — 558,311 Deposit liabilities — — (11,150 ) — (11,150 ) Net cash provided by (used in) financing activities $ (523,588 ) $ (14,556 ) $ (468,923 ) $ 933,000 $ (74,067 ) Effects of exchange rate changes on foreign currency cash — — 43,423 — 43,423 Increase (decrease) in cash and cash equivalents $ 122 $ 339,112 $ (632,400 ) $ — $ (293,166 ) Cash and cash equivalents – beginning of period 1,022 84,286 3,341,680 — 3,426,988 Cash and cash equivalents – end of period $ 1,144 $ 423,398 $ 2,709,280 $ — $ 3,133,822 ____________ (1) Results for the period include XL-Ireland, which prior to the Redomestication was the ultimate parent and is now in liquidation proceedings as outlined in Note 1, "Significant Accounting Policies ." The Company expects the net assets of XL-Ireland to ultimately be distributed to XL Group upon completion of the liquidation. Six Months Ended June 30, 2016 Condensed Consolidating Statement of Cash Flows (U.S. dollars in thousands) XL- Ireland XLIT Other XL-Ireland Subsidiaries Consolidating Adjustments and Eliminations XL-Ireland Consolidated Cash flows provided by (used in) operating activities: Net cash provided by (used in) operating activities $ 665,895 $ 656,809 $ (472,440 ) $ (655,063 ) $ 195,201 Cash flows provided by (used in) investing activities: Proceeds from sale of fixed maturities and short-term investments $ — $ 231,600 $ 7,796,365 $ (578,010 ) $ 7,449,955 Proceeds from redemption of fixed maturities and short-term investments — 42,744 2,045,573 — 2,088,317 Proceeds from sale of equity securities — — 114,958 — 114,958 Purchases of fixed maturities and short-term investments — (515,794 ) (8,418,324 ) 578,010 (8,356,108 ) Purchases of equity securities — — (255,442 ) — (255,442 ) Proceeds from sale of affiliates — — 153,928 — 153,928 Purchases of affiliates — — (408,886 ) — (408,886 ) Purchase of subsidiaries, net of acquired cash — — (69,745 ) — (69,745 ) Returns of capital from subsidiaries 132,374 — — (132,374 ) — Change in restricted cash — — (26,866 ) — (26,866 ) Other, net — — 108,095 — 108,095 Net cash provided by (used in) investing activities $ 132,374 $ (241,450 ) $ 1,039,656 $ (132,374 ) $ 798,206 Cash flows provided by (used in) financing activities: Proceeds from issuance of common shares and exercise of stock options $ 1,727 $ — $ — $ — $ 1,727 Buybacks of common shares (684,386 ) — — — (684,386 ) Employee withholding on share-based compensation — — (27,947 ) — (27,947 ) Dividends paid on common shares (113,731 ) (655,063 ) — 655,063 (113,731 ) Return of capital — (132,374 ) — 132,374 — Distributions to non-controlling interests — (38,862 ) (26,820 ) — (65,682 ) Contributions from non-controlling interests — — 1,130 — 1,130 Repayment of debt — — (8,248 ) — (8,248 ) Net proceeds from affiliated notional cash pooling programs (1) — 174,654 — (174,654 ) — Deposit liabilities — — (14,807 ) — (14,807 ) Net cash provided by (used in) financing activities $ (796,390 ) $ (651,645 ) $ (76,692 ) $ 612,783 $ (911,944 ) Effects of exchange rate changes on foreign currency cash — — (20,950 ) — (20,950 ) Increase (decrease) in cash and cash equivalents $ 1,879 $ (236,286 ) $ 469,574 $ (174,654 ) $ 60,513 Cash and cash equivalents – beginning of period 11,557 369,997 2,874,682 — 3,256,236 Cash and cash equivalents – end of period $ 13,436 $ 133,711 $ 3,344,256 $ (174,654 ) $ 3,316,749 ____________ (1) Net proceeds from affiliated notional cash pooling arrangements reflect the net impact of bank transfers to settle overdraft positions within the Company's multi-currency cash pool. |
