CGU CORPORATION
(A Wholly-Owned Subsidiary of CGNU plc)
Consolidated Balance Sheet
March 31, 2001
(Dollars in Thousands, except for per share amount)
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2001
ASSETS
Fixed maturity investments at fair value (amortized cost $8,942,827, and $6,416,629) $ 9,047,350
Common equity securities at fair value (cost $8,218 and $1,635,130) 14,558
Preferred equity securities at fair value (cost $116,414 and $118,012) 144,500
Short-term investments, at amortized cost (which approximates fair value) 159,726
Other Investments 47,326
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Total investments 9,413,460
Cash 52,138
Insurance balances receivable 1,294,501
Reinsurance recoverable on paid and unpaid losses 1,587,291
Deferred policy acquisition costs 341,638
Investment income accrued 90,536
Net deferred federal income taxes 261,895
Other assets 559,001
Net assets of discontinued operations 508,000
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Total assets $ 14,108,460
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LIABILITIES
Loss and loss adjustment expense reserves $ 6,925,527
Unearned insurance premiums 1,926,041
Long-term debt 1,103,150
Net deferred federal income taxes -
Accounts payable and other liabilities 985,654
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Total liabilities 10,940,372
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SHAREHOLDERS' EQUITY
Common Stock, $1.00 par value; authorized 100,000 shares, 16,022 shares outstanding 16
Additional paid-in capital 753,200
Retained earnings 2,308,836
Accumulated other comprehensive income 106,036
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Total shareholders' equity 3,168,088
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Total liabilities and shareholders' equity $ 14,108,460
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CGU CORPORATION
(A Wholly-Owned Subsidiary of CGNU plc)
Consolidated Statements of Income and Comprehensive Income
For the Three Months Ended March 31, 2001 and 2000
(Dollars in Thousands)
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2001 2000
REVENUES:
Earned insurance premiums $ 1,043,088 $ 1,065,421
Net investment income 123,947 122,644
Net realized gains from investment securities and other investments 402,171 21,147
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Total revenues 1,569,206 1,209,212
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EXPENSES:
Losses and loss adjustment expenses 814,322 765,771
Underwriting and other operating expenses 435,863 339,225
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Total expenses 1,250,185 1,104,996
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Pretax Earnings 319,022 104,216
Federal income tax provision (129,872) (24,062)
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Net income from continuing operations 189,149 80,154
Income from discontinued operations - 7,234
Loss on disposal of discontinued operations (16,040) -
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NET INCOME 173,109 87,388
Other comprehensive income, net of tax;
Increase (decrease) in net unrealized appreciation of investments (196,155) 91,110
Loss on foreign currency exchange (7,572) (1,763)
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COMPREHENSIVE NET INCOME (LOSS) $ (30,618) $ 176,735
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CGU CORPORATION
(A Wholly-Owned Subsidiary of CGNU plc)
Consolidated Statements of Cash Flows
For the Three Months Ended March 31, 2001 and 2000
(Dollars in Thousands)
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2001 2000
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 173,109 $ 87,388
Adjustments to reconcile net income to net
cash provided by operating activities:
Loss on disposal of discontinued operations 16,040 -
Net income from discontinued operations - (7,234)
Amortization of bond premium and discount (26,502) (377)
Net realized gains from investment securities
and other assets (402,171) (21,147)
Depreciation and amortization 6,703 6,752
Deferred federal income taxes (34,174) (4,423)
Change in operating assets and liabilities:
Reinsurance recoverable on paid and unpaid losses 263,683 56,675
Deferred policy acquisition costs 79,172 (4,487)
Loss and loss adjustment expense reserves (57,201) (198,402)
Unearned insurance premiums (116,427) 13,658
Insurance balances receivable (167,753) (109,588)
Net change in other assets and liabilities 128,382 (31,964)
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Net cash used by operating activities (137,139) (213,149)
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CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of investments:
Fixed maturity investments (3,467,644) (1,246,646)
Common equity securities (24,677) (259,414)
Preferred equity securities - -
Net increase in short-term investments 161,447 180,944
Net increase in other invested assets 51,426 1,912
Proceeds from the sales of investments:
Fixed maturity investments 2,619,859 1,296,459
Common equity securities 733,438 282,030
Preferred equity securities 100 1,535
Maturities of fixed maturity investments 90,190 73,085
Purchases of equipment, net (2,195) (2,639)
Development of computer software (7,743) (8,118)
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Net cash provided by investing activities 154,201 319,148
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CASH FLOWS FROM FINANCING ACTIVITIES:
Long-term debt (10,750) -
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Net cash used by financing activities (10,750) -
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Net increase in cash 6,312 105,999
Cash and cash equivalents, beginning of period 45,826 50,800
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Cash and cash equivalents, end of period $ 52,138 $ 156,799
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