Exhibit 99.2
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NAC RE CORP. AND SUBSIDIARIES
CONSOLIDATED FINANCIAL SUPPLEMENT
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(Unaudited)
Three months ended March 31,
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SUMMARY PERFORMANCE DATA: 1999 1998 % Chg
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Gross premiums written $181.1 $165.4 9.5%
Net premiums written 142.9 136.2 4.9
Net investment income:
- After-tax 26.5 25.6 3.4
- Pretax 32.9 32.1 2.6
Cash flow from operations (1.8) 13.9 (112.8)
Statutory composite ratio:
- Domestic 102.4% 102.8%
- International 104.1% 108.9%
- Consolidated 102.6% 103.5%
PER SHARE DATA:
Basic:
Average shares outstanding 18,411 18,355
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Operating, excluding investment gains $1.04 $0.97 7.2%
Investment gains, net of tax 0.09 0.28
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Net income $1.13 $1.25 (9.6)%
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Diluted (assuming conversion of
dilutive convertible securities):
Average shares outstanding 21,000 20,954
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Operating, excluding investment gains $0.95 $0.90 5.6%
Investment gains, net of tax 0.08 0.24
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Net income $1.03 $1.14 (9.6)%
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MARCH 31, DECEMBER 31, %
1993 1998 Chg
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BALANCE SHEET DATA:
Total assets $3,248.3 $3,227.6 .6%
Cash and invested assets (A) 2,413.9 2,448.8 (1.4)
Stockholders' equity 752.7 750.7 .3
Per basic share (B)(C) 40.79 40.86 (.2)
Per diluted share 41.62 41.69 (.2)
Statutory surplus 732.9 737. (.6)
(A) Excluding net investment payables of $7.6 million for 1999 and 1998.
(B) Shares outstanding are 18,452,660 and 18.374,355, respectively.
(C) Assuming bonds are carried at amortized cost, stockholders' equity per
basic share would be $38.77 and $37.96, respectively.
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NAC RE CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
(In thousands, except per share amounts)
(Unaudited)
Three months ended March 31,
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1999 1998
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PREMIUMS AND OTHER REVENUES
Net premiums written $142,871 $136,190
Increase in unearned premiums (10,206) (2,836)
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Premiums earned 132,665 133,354
Net investment income 32,905 32,085
Net investment gains 2,673 7,874
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Total revenues 168,243 173,313
Operating Costs and Expenses
Claims and claims expenses 84,022 88,692
Commissions and brokerage 35,980 33,443
Other operating expenses 17,966 17,126
Interest expense 5,402 5,426
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Total operating costs and expenses 143,370 144,687
INCOME
Income before income taxes 24,873 28,626
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Federal and foreign income taxes:
Current 3,793 6,684
Deferred 252 (1,064)
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Income tax expense (benefit) 4,045 5,620
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Net income $20,828 $23,006
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PER SHARE DATA
Basic:
Average shares outstanding 18,411 18,355
Operating, excluding investment gains $1.04 $0.97
Investment gains, net of tax 0.09 0.28
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Net income $1.13 $1.25
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Diluted (assuming conversion of
dilutive convertible securities):
Average shares outstanding 21,000 20,954
Operating, excluding investment gains $0.95 $0.90
Investment gains, net of tax 0.08 0.24
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Net income $1.03 $1.14
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Cash dividends declared per share $0.09 $0.075
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NAC RE CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(In thousands)
(Unaudited)
March 31, December 31,
1999 1998
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ASSETS
Investments:
Available for sale:
Fixed maturities (amortized cost: 1999, $2,122,326; 1998, $2,108,692) $2,179,670 $2,190,617
Equity securities (cost: 1999, $87,517; 1998, $108,276) 92,140 115,064
Short-term investments 136,669 146,828
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TOTAL INVESTMENTS 2,408,479 2,452,509
Cash 13,042 3,915
Accrued investment income 37,318 36,270
Premiums receivable 249,875 239,674
Reinsurance recoverable balances, net 284,897 262,872
Reinsurance recoverable on unearned premiums 43,017 49,962
Deferred policy acquisition costs 101,944 98,874
Excess of cost over net assets acquired 7,861 8,013
Deferred tax asset, net 48,211 37,481
Other assets 53,657 38,062
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TOTAL ASSETS $3,248,301 $3,227,632
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LIABILITIES
Claims and claims expenses $1,732,095 $1,718,237
Unearned premiums 344,133 341,443
8% Notes due 1999 100,000 100,000
7.15% Notes due 2005 99,951 99,949
5.25% Convertible Subordinated Debentures due 2002 100,000 100,000
Investment accounts payable 7,612 7,612
Revolving credit agreement 12,924 12,924
Other liabilities 98,903 96,742
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TOTAL LIABILITIES 2,495,618 2,476,907
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STOCKHOLDERS' EQUITY Preferred stock, $1.00 par value:
1,000 shares authorized, none issued
(Includes 277.5 shares of Series A Junior Preferred Stock) - -
Common stock, $.10 par value:
25,000 shares authorized (1999, 22,069; 199 8, 21,991 shares issued) 2,207 2,199
Additional paid-in capital 271,587 268,468
Accumulated other comprehensive income 42,411 62,778
Retained earnings 535,204 516,036
Less treasury stock, at cost (1999, 3,616; 1998, 3,617 shares) (98,726) (98,756)
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TOTAL STOCKHOLDERS' EQUITY 752,683 750,725
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $3,248,301 $3,227,632
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NAC RE CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
(In thousands)
(Unaudited)
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Accumulated
Other Total
Common Paid-in Comprehensive Retained Treasury Comprehensive Stockholders'
Stock Capital Income Earnings Stock Income Equity
----- ------- ------ -------- ----- ------ ------
Balance, At December 31, 1998 $2,199 $268,468 $516,036 ($98,756) $62,778 $750,725
Comprehensive income:
Net income $20,828 20,828 20,828
Other comprehensive income,
net of tax:
Unrealized depreciation of
investments (17,382) (17,382)
Currency translation adjustments (2,985) (2,985)
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Other comprehensive income (20,367) (20,367)
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Total comprehensive income $461
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Issuance of shares 8 3,119 3,127
Dividends declared on common stock (1,660) (1,660)
Reissuance of treasury shares 30 30
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Balance at March 31, 1999 $2,207 $271,587 $535,204 ($98,726) $42,411 $752,683
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(Unaudited)
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Accumulated
Other Total
Common Paid-in Comprehensive Retained Treasury Comprehensive Stockholders'
Stock Capital Income Earnings Stock Income Equity
----- ------- ------ -------- ----- ------ ------
Balance, At December 31, 1997 $2,171 $255,424 $426,309 ($87,832) $60,989 $657,061
Comprehensive income:
Net income $23,006 23,006 23,006
Other comprehensive income,
net of tax:
Unrealized appreciation of
investments 3,384 3,384
Currency translation adjustments 908 908
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Other comprehensive income 4,292 4,292
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Total comprehensive income $27,298
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Issuance of shares 7 2,482 2,489
Dividends declared on common stock (1,377) (1,377)
Purchase of treasury shares, net of
reissuance (2,326) (2,326)
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Balance at March 31, 1998 $2,178 $257,906 $447,938 ($90,158) $65,281 $683,145
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NAC RE CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(In thousands)
(Unaudited)
Three months ended March 31,
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1999 1998
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OPERATING ACTIVITIES
Net income $20,828 $23,006
Adjustments to reconcile net income to net cash
provided by operating activities:
Reserve for claims and claims expenses, net (4,866) 4,929
Unearned premiums, net 10,347 2,819
Premiums receivable (11,077) (1,991)
Accrued investment income (1,111) 2,848
Reinsurance balances, net 4,834 6,508
Deferred policy acquisition costs (3,233) (805)
Net investment gains (2,654) (7,874)
Deferred tax asset, net 231 (1,082)
Other liabilities 6,787 (4,002)
Other items, net (21,872) (10,455)
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NET CASH (USED FOR) PROVIDED BY OPERATING ACTIVITIES (1,786) 13,901
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INVESTING ACTIVITIES
Sales of fixed maturity investments 230,481 310,627
Maturities of fixed maturity investments 4,237 3,522
Purchases of fixed maturity investments (253,546) (340,404)
Net sales of short-term investments 8,458 21,753
Sales of equity securities 34,655 7,951
Purchases of equity securities (13,863) (14,296)
Purchases of furniture and equipment (691) (1,799)
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NET CASH PROVIDED BY (USED FOR) INVESTING ACTIVITIES 9,731 (12,646)
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FINANCING ACTIVITIES
Issuance of shares 2,780 2,309
Net reissuance (purchase) of treasury shares 30 (2,326)
Cash dividends paid to stockholders (1,652) (1,372)
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NET CASH PROVIDED BY (USED FOR) FINANCING ACTIVITIES 1,158 (1,389)
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Effects of exchange rate changes on cash 24 142
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Increase in cash 9,127 8
Cash - beginning of year 3,915 8,430
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Cash - end of period $13,042 $8,438
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