1
EXHIBIT 99
FINANCIAL SECURITY ASSURANCE INC.
AND SUBSIDIARIES
Condensed Consolidated Financial
Statements
March 31, 1994
2
FINANCIAL SECURITY ASSURANCE INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
THREE MONTHS ENDED MARCH 31, 1994 AND 1993
INDEX
FINANCIAL STATEMENTS:
Condensed Consolidated Balance Sheets 1
Condensed Consolidated Statements of Income 2
Condensed Consolidated Statements of Cash Flows 3
Notes to Condensed Consolidated Financial Statements 4
3
FINANCIAL SECURITY ASSURANCE INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands,
except share data)
March 31 December 31,
ASSETS 1994 1993
------ ---- ----
(unaudited)
Bonds at market value (amortized
cost of $701,198 and $683,176 $703,194 $736,872
Short-term investments 3,369 31,720
-------- --------
Total investments 706,563 768,592
Cash and cash equivalents 15,204 15,770
Deferred acquisition costs 83,833 81,992
Prepaid reinsurance premiums 126,422 127,849
Reinsurance recoverable on unpaid
losses 630 79
Receivable for securities sold 22,402 21
Other assets 36,001 34,878
-------- ----------
TOTAL ASSETS $991,055 $1,029,181
======== ==========
LIABILITIES AND SHAREHOLDER'S EQUITY
Unearned premiums $332,393 $328,165
Losses and loss adjustment expenses 37,397 36,094
Deferred federal income taxes 19,348 35,832
Ceded reinsurance balances payable 6,987 7,408
Payable for securities purchased 14,459 30,741
Amounts withheld on account for
others 25,566 25,649
Accrued expenses and other
liabilities 27,885 22,824
-------- --------
TOTAL LIABILITIES 464,035 486,713
-------- --------
Common stock (1,000 shares
authorized, issued and
outstanding; par value of
$15,000 per share) 15,000 15,000
Additional paid-in capital 497,506 497,506
Unrealized gain on investments
(net of deferred income
taxes of $699 and $18,788) 1,297 34,892
Accumulated earnings (deficit) 13,217 (4,930)
-------- ---------
TOTAL SHAREHOLDER'S EQUITY 527,020 542,468
-------- ---------
TOTAL LIABILITIES AND SHAREHOLDER'S
EQUITY $991,055 $1,029,181
======== ==========
See notes to condensed consolidated financial statements.
4
FINANCIAL SECURITY ASSURANCE INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
(Dollars in thousands)
Three Months Ended March 31,
1994 1993
---- ----
REVENUES:
Net premiums written (net of premiums
ceded of $8,406 and $11,332) $22,181 $16,772
Increase in unearned premiums (5,466) (3,600)
-------- --------
Premiums earned (net of premiums
ceded of $9,890 and $6,337) 16,715 13,172
Net investment income 11,181 11,837
Net realized gains 3,122 7,858
Other income 77 129
-------- --------
TOTAL REVENUES 31,095 32,996
-------- --------
EXPENSES:
Losses and loss adjustment
expenses (net of reinsurance
recoveries of $551 and $87) 754 498
Policy acquisition costs 3,636 3,245
Other operating expenses 2,797 5,047
-------- --------
TOTAL EXPENSES 7,187 8,790
-------- --------
INCOME BEFORE INCOME TAXES 23,908 24,206
Provision for income taxes 5,761 5,916
-------- --------
NET INCOME $18,147 $18,290
======== ========
See notes to condensed consolidated financial statements.
5
FINANCIAL SECURITY ASSURANCE INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(Dollars in thousands)
Three Months Ended March 31,
1994 1993
---- ----
Cash flows from operating activities:
Premiums received, net $ 17,276 $ 7,345
Policy acquisition and other
operating expenses paid, net (4,042) (2,571)
Loss and LAE recoverd (paid), net 560 (6,489)
Net investment income received 11,452 12,548
Federal income taxes recovered (paid) 508 (3,640)
Interest paid (460) (754)
Other, net (1,636) 888
--------- --------
Net cash provided by operating
activities 23,658 7,327
-------- --------
Cash flows from investing activities:
Proceeds from sales of bonds 107,646 128,107
Purchases of bonds (159,999) (134,332)
Purchases of property and equipment (207) (290)
Net decrease in short-term securities 28,336 5,351
--------- ---------
Net cash used for investing
activities (24,224) (1,164)
--------- ---------
Net increase (decrease) in cash and
cash equivalents (566) 6,163
Cash and cash equivalents at
beginning of period 15,770 13,483
--------- ---------
Cash and cash equivalents at
end of period $ 15,204 $ 19,646
========= =========
See notes to condensed consolidated financial statements.
6
FINANCIAL SECURITY ASSURANCE INC.
AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 1994 AND 1993
(UNAUDITED)
1. ORGANIZATION AND OWNERSHIP
Financial Security Assurance Inc. (the "Company"), a wholly
owned subsidiary of Financial Security Assurance Holdings Ltd.
(the "Parent"), is an insurance company domiciled in the State of
New York. The Company is engaged in providing financial guaranty
insurance on asset-backed financings and municipal obligations.
2. BASIS OF PRESENTATION
The accompanying condensed consolidated financial statements
have been prepared by the Company and are unaudited. In the
opinion of management, all adjustments, which include only normal
recurring adjustments, necessary to present fairly the financial
position, results of operations and cash flows at March 31, 1994
and for all periods presented have been made.
Certain information and footnote disclosures normally
included in financial statements prepared in accordance with
generally accepted accounting principles have been condensed or
omitted. These statements should be read in conjunction with the
Company's December 31, 1993 consolidated financial statements and
notes thereto. The year-end condensed balance sheet was derived
from audited financial statements, but does not include all
disclosures required by generally accepted accounting principles.
The results of operations for the periods ended March 31, 1994
and 1993 are not necessarily indicative of the operating results
for the full year.
Certain amounts in the 1993 financial statements have been
reclassed to conform to the 1994 presentation.