EXHIBIT 99.2
PXRE Consolidated Balance Sheets
Group Ltd. (Dollars in thousands, except par value per share)
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September 30, December 31,
2003 2002
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(Unaudited)
Assets Investments:
Fixed maturities:
Available-for-sale (amortized cost $581,883
and $465,963, respectively), $ 592,128 $ 478,878
Trading (cost $18,323 and $19,521, respectively) 21,006 21,871
Short-term investments 232,646 133,318
Hedge funds (cost $81,927 and $84,915, respectively) 115,065 113,105
Other invested assets (cost $9,295 and $10,522,
respectively) 9,939 11,529
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Total investments 970,784 758,701
Cash 40,515 46,630
Accrued investment income 6,348 5,788
Premiums receivable, net 67,857 77,290
Other receivables 46,121 27,052
Reinsurance recoverable on paid losses 26,717 29,653
Reinsurance recoverable on unpaid losses 146,533 207,444
Ceded unearned premiums 18,848 10,496
Deferred acquisition costs 7,781 22,721
Income tax recoverable 7,676 -
Other assets 48,911 51,367
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Total assets $ 1,388,091 $ 1,237,142
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Liabilities Losses and loss expenses $ 437,310 $ 447,829
Unearned premiums 55,668 63,756
Debt payable - 30,000
Reinsurance balances payable 60,002 81,090
Deposit liabilities 75,817 35,149
Subordinated trust preferred securities 126,839 -
Income tax payable - 2,486
Payable for securities purchased 82,940 22
Other liabilities 29,383 29,011
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Total liabilities 867,959 689,343
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Minority interest in consolidated subsidiary:
Company-obligated mandatorily redeemable
capital trust pass-through securities of
subsidiary trusts holding solely a company-
guaranteed related subordinated debt - 94,335
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Shareholders' Serial convertible preferred shares, $1.00 par value,
Equity $10,000 stated value -- 10 million shares
authorized, 0.02 million shares issued and outstanding 168,814 159,077
Common shares, $1.00 par value -- 50 million shares
authorized, 12.2 million and 12.0 million shares issued
and outstanding, respectively 12,177 12,030
Additional paid-in capital 172,214 168,866
Accumulated other comprehensive income net of deferred income
tax expense of $2,795 and $2,866, respectively 5,826 7,142
Retained earnings 164,939 108,062
Restricted shares at cost (0.3 million and 0.2 million
shares, respectively) (3,838) (1,713)
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Total shareholders' equity 520,132 453,464
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Total liabilities and shareholders' equity $ 1,388,091 $ 1,237,142
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The accompanying notes are an integral part of these statements.
PXRE Consolidated Statements of Income and Comprehensive Income
Group Ltd. (Dollars in thousands, except per share amounts)
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Three Months Ended Nine Months Ended
September 30, September 30,
2003 2002 2003 2002
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(Unaudited)
Revenues Net premiums earned $ 69,082 $ 75,741 $ 237,870 $ 180,661
Net investment income 5,994 5,011 20,026 17,543
Net realized investment gains 502 4,782 611 5,785
Fee income 1,148 928 3,533 2,766
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76,726 86,462 262,040 206,755
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Losses and Losses and loss expenses incurred 35,387 48,264 113,041 84,350
Expenses Commissions and brokerage 3,218 13,489 37,863 31,208
Other operating expenses 10,573 6,696 29,586 21,790
Interest expense - 698 2,504 2,197
Interest expense - trust
preferred securities 2,817 2,127 7,350 6,550
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51,995 71,274 190,344 146,095
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Income before income taxes 24,731 15,188 71,696 60,660
Income tax provision 1,007 4,179 2,887 12,375
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Net income before convertible
preferred share dividends $ 23,724 $ 11,009 $ 68,809 $ 48,285
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Convertible preferred share dividends 3,310 3,058 9,737 5,958
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Net income available to common shareholders $ 20,414 $ 7,951 $ 59,072 $ 42,327
============ ============ ============ ============
Comprehensive Net income before convertible
Income, Net preferred share dividends $ 23,724 $ 11,009 $ 68,809 $ 48,285
of Tax Net unrealized (depreciation)
appreciation on investments (4,008) 6,262 (2,262) 10,771
Net unrealized (depreciation)
appreciation on cash flow hedge - (346) 946 (284)
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Comprehensive income $ 19,716 $ 16,925 $ 67,493 $ 58,772
============ ============ ============ ============
Per Share Basic:
Net income before convertible
preferred share dividends $ 1.99 $ 0.93 $ 5.77 $ 4.10
Convertible preferred share dividends (0.28) (0.26) (0.82) (0.51)
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Net income available to common shareholders $ 1.71 $ 0.67 $ 4.95 $ 3.59
============ ============ ============ ============
Average shares outstanding (000's) 11,925 11,817 11,931 11,778
============ ============ ============ ============
Diluted:
Net income $ 1.01 $ 0.50 $ 2.97 $ 2.59
============ ============ ============ ============
Average shares outstanding (000's) 23,583 22,137 23,201 18,630
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The accompanying notes are an integral part of these statements.
PXRE Consolidated Statements of Shareholders' Equity
Group Ltd. (Dollars in thousands)
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Three Months Ended Nine Months Ended
September 30, September 30,
2003 2002 2003 2002
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(Unaudited)
Convertible Balance at beginning of period $ 165,504 $ 152,900 $ 159,077 $ -
Preferred Shares Issuance of shares, net - - - 150,000
Dividends to convertible
preferred shareholders 3,310 3,058 9,737 5,958
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Balance at end of period $ 168,814 $ 155,958 $ 168,814 $ 155,958
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Common Shares Balance at beginning of period $ 12,169 $ 11,966 $ 12,030 $ 11,873
Issuance of shares, net 8 65 147 158
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Balance at end of period $ 12,177 $ 12,031 $ 12,177 $ 12,031
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Additional Balance at beginning of period $ 172,096 $ 168,034 $ 168,866 $ 175,405
Paid-in Capital Issuance of shares 118 916 3,259 (6,420)
Other - (18) 89 (53)
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Balance at end of period $ 172,214 $ 168,932 $ 172,214 $ 168,932
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Accumulated Balance at beginning of period $ 9,834 $ 4,272 $ 7,142 $ (299)
Other Change in unrealized gains (4,008) 6,262 (2,262) 10,771
Comprehensive Change in cash flow hedge - (346) 946 (284)
Income ------------- ------------ ------------- -------------
Balance at end of period $ 5,826 $ 10,188 $ 5,826 $ 10,188
============= ============ ============= =============
Retained Balance at beginning of period $ 145,256 $ 88,414 $ 108,062 $ 55,473
Earnings Net income before convertible
preferred share dividends 23,724 11,009 68,809 48,285
Dividends to convertible
preferred shareholders (3,310) (3,058) (9,737) (5,958)
Dividends to common shareholders (731) (721) (2,195) (2,156)
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Balance at end of period $ 164,939 $ 95,644 $ 164,939 $ 95,644
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Restricted Shares Balance at beginning of period $ (4,328) $ (2,644) $ (1,713) $ (2,672)
Issuance of restricted shares 26 (9) (4,582) (1,049)
Amortization of restricted shares 464 401 2,457 1,469
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Balance at end of period $ (3,838) $ (2,252) $ (3,838) $ (2,252)
============= ============ ============= =============
Total Balance at beginning of period $ 500,531 $ 422,942 $ 453,464 $ 239,780
Shareholders' Issuance of convertible preferred shares - - - 150,000
Equity Issuance of shares 126 981 3,406 (6,262)
Restricted shares, net 490 392 (2,125) 420
Unrealized (depreciation) appreciation
on investments, net of
deferred income tax (4,008) 6,262 (2,262) 10,771
Unrealized (depreciation) appreciation
on cash flow hedge,
net of deferred income tax - (346) 946 (284)
Net income before convertible
preferred share dividends 23,724 11,009 68,809 48,285
Dividends to common shareholders (731) (721) (2,195) (2,156)
Other - (18) 89 (53)
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Balance at end of period $ 520,132 $ 440,501 $ 520,132 $ 440,501
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The accompanying notes are an integral part of these statements.
PXRE Consolidated Statements of Cash Flows
Group Ltd. (Dollars in thousands)
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Three Months Ended Nine Months Ended
September 30, September 30,
2003 2002 2003 2002
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(Unaudited)
Cash Flow Net income before convertible
from Operating preferred share dividends $ 23,724 $ 11,009 $ 68,809 $ 48,285
Activities Adjustments to reconcile net income to net
cash provided by operating activities:
Losses and loss expenses (5,687) 11,729 (10,518) (16,809)
Unearned premiums 960 (8,932) (16,439) 10,498
Deferred acquisition costs 1,646 904 14,940 (5,508)
Receivables (19,197) (7,008) (9,636) (14,096)
Reinsurance balances payable (6,500) 1,835 (21,088) 21,917
Reinsurance recoverable 15,480 16,128 63,847 15,717
Income taxes (259) 3,242 (10,001) 10,930
Equity in earnings of limited partnerships (1,892) (691) (9,741) (6,097)
Trading portfolio purchased - (10,913) (5,688) (30,886)
Trading portfolio disposed - 12,371 8,496 12,371
Deposit liability 6,450 3,196 40,668 19,891
Other (3,059) (6,682) 5,427 (6,738)
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Net cash provided by operating activities 11,666 26,188 119,076 59,475
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Cash Flow Fixed maturities available for sale purchased (204,877) (104,852) (356,670) (348,500)
from Investing Fixed maturities available for sale
Activities disposed or matured 177,479 100,245 239,389 111,958
Payable for securities 45,548 (10,590) 82,919 3,702
Net change in short-term investments (88,880) (17,666) (99,328) 34,716
Hedge funds purchased (5,000) - (12,000) (26,366)
Hedge funds disposed 3,095 3,639 19,936 36,793
Other invested assets purchased (12) (283) (133) (283)
Other invested assets disposed 530 665 1,568 8,380
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Net cash used by investing activities (72,117) (28,842) (124,319) (179,600)
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Cash Flow Proceeds from issuance of convertible
from Financing preferred shares - (46) - 140,892
Activities Proceeds from issuance of common shares 129 880 671 2,073
Proceeds from issuance of minority interest
in consolidated subsidiaries - - 32,500 -
Cash dividends paid to common shareholders (731) (722) (2,195) (2,156)
Repayment of debt - (5,000) (30,000) (25,000)
Repurchase of minority interest in
consolidated subsidiary - - - (2,967)
Cost of shares repurchased 24 (31) (1,848) (589)
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Net cash (used) provided by
financing activities (578) (4,919) (872) 112,253
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Net change in cash (61,029) (7,573) (6,115) (7,872)
Cash, beginning of period 101,544 22,589 46,630 22,888
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Cash, end of period $ 40,515 $ 15,016 $ 40,515 $ 15,016
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The accompanying notes are an integral part of these statements.
Supplemental disclosure of cash flow information:
Interest paid 5,381 4,816 10,175 10,591
Income taxes paid 1,174 666 12,793 3,668