Exhibit 99.2
PXRE Consolidated Balance Sheets
Group Ltd. (Dollars in thousands, except par value per share)
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December 31,
2003 2002
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(Unaudited)
Assets Investments:
Fixed maturities:
Available-for-sale (amortized cost $613,833 and $465,963, respectively) $ 617,658 $ 478,878
Trading (cost $20,370 and $19,521, respectively) 21,451 21,871
Short-term investments 175,771 133,318
Hedge funds (cost $87,691 and $84,915, respectively) 121,466 113,105
Other invested assets (cost $9,365 and $10,522, respectively) 10,173 11,529
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Total investments 946,519 758,701
Cash 65,808 46,630
Accrued investment income 5,490 5,788
Premiums receivable, net 79,501 77,290
Other receivables 30,695 27,052
Reinsurance recoverable on paid losses 15,494 29,653
Reinsurance recoverable on unpaid losses 146,924 207,444
Ceded unearned premiums 10,454 10,496
Deferred acquisition costs 2,495 22,721
Income tax recoverable 14,133 -
Other assets 42,134 51,367
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Total assets $ 1,359,647 $ 1,237,142
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Liabilities Losses and loss expenses $ 450,635 $ 447,829
Unearned premiums 21,566 63,756
Debt payable - 30,000
Reinsurance balances payable 53,373 81,090
Deposit liabilities 80,583 35,149
Income tax payable - 2,486
Other liabilities 32,133 29,033
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Total liabilities 638,290 689,343
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Minority interest in consolidated subsidiaries:
Company-obligated mandatorily redeemable capital trust
pass-through securities of subsidiary trusts holding solely a
company-guaranteed related subordinated debt 156,841 94,335
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Shareholders' Serial convertible preferred shares, $1.00 par value, $10,000 stated
Equity value -- 10 million shares authorized, 0.02 million shares
issued and outstanding 172,190 159,077
Common shares, $1.00 par value -- 50 million shares
authorized, 13.3 million and 12.0 million shares issued
and outstanding, respectively 13,277 12,030
Additional paid-in capital 192,078 168,866
Accumulated other comprehensive income net of deferred income
tax expense of $1,242 and $2,866, respectively 1,692 7,142
Retained earnings 188,670 108,062
Restricted shares at cost (0.3 million and 0.2 million shares, respectively) (3,391) (1,713)
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Total shareholders' equity 564,516 453,464
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Total liabilities and shareholders' equity $ 1,359,647 $ 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 Twelve Months Ended
December 31, December 31,
2003 2002 2003 2002
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(Unaudited)(Unaudited) (Unaudited)
Revenues Net premiums earned $ 83,063 $ 88,700 $320,933 $269,360
Net investment income 6,906 7,350 26,931 24,893
Net realized investment gains 1,836 3,196 2,447 8,981
Fee income 1,481 665 5,014 3,432
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93,286 99,911 355,325 306,666
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Losses and Losses and loss expenses incurred 45,447 42,512 158,488 126,862
Expenses Commissions and brokerage 9,497 22,183 47,360 53,391
Other operating expenses 9,369 10,664 38,954 32,454
Interest expense - 742 2,506 2,939
Minority interest in consolidated subsidiaries 3,179 2,095 10,528 8,646
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67,492 78,196 257,836 224,292
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Income before income taxes 25,794 21,715 97,489 82,374
Income tax (benefit) provision (2,046) 5,454 841 17,829
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Net income before convertible preferred share dividends $ 27,840 $ 16,261 $ 96,648 $ 64,545
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Convertible preferred share dividends 3,376 3,119 13,113 9,077
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Net income available to common shareholders $ 24,464 $ 13,142 $ 83,535 $ 55,468
========= ========= ========= =========
Comprehensive Net income before convertible preferred share dividends $ 27,840 $ 16,261 $ 96,648 $ 64,545
Income, Net Net unrealized (depreciation) appreciation on investments (4,134) (3,107) (6,396) 7,664
of Tax Net unrealized appreciation (depreciation) on cash flow hedge - 61 946 (223)
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Comprehensive income $ 23,706 $ 13,215 $ 91,198 $ 71,986
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Per Share Basic:
Net income before convertible preferred share dividends $ 2.30 $ 1.37 $ 8.06 $ 5.47
Convertible preferred share dividends (0.28) (0.26) (1.09) (0.77)
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Net income available to common shareholders $ 2.02 $ 1.11 $ 6.97 $ 4.70
========= ========= ========= =========
Average shares outstanding (000's) 12,123 11,863 11,992 11,802
========= ========= ========= =========
Diluted:
Net income $ 1.14 $ 0.73 $ 4.10 $ 3.28
========= ========= ========= =========
Average shares outstanding (000's) 24,462 22,420 23,575 19,662
========= ========= ========= =========
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 Twelve Months Ended
December 31, December 31,
2003 2002 2003 2002
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(Unaudited) (Unaudited) (Unaudited)
Convertible Balance at beginning of period $ 168,814 $ 155,958 $ 159,077 $ -
Preferred Shares Issuance of shares, net - - - 150,000
Dividends to convertible preferred shareholders 3,376 3,119 13,113 9,077
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Balance at end of period $ 172,190 $ 159,077 $ 172,190 $ 159,077
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Common Shares Balance at beginning of period $ 12,177 $ 12,031 $ 12,030 $ 11,873
Issuance of shares, net 1,100 (1) 1,247 157
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Balance at end of period $ 13,277 $ 12,030 $ 13,277 $ 12,030
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Additional Balance at beginning of period $ 172,214 $ 168,932 $ 168,866 $ 175,405
Paid-in Capital Issuance of shares 19,767 (48) 23,026 (6,468)
Other 97 (18) 186 (71)
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Balance at end of period $ 192,078 $ 168,866 $ 192,078 $ 168,866
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Accumulated Balance at beginning of period $ 5,826 $ 10,188 $ 7,142 $ (299)
Other Change in unrealized gains (4,134) (3,107) (6,396) 7,664
Comprehensive Change in cash flow hedge - 61 946 (223)
Income ---------- ---------- ---------- ----------
Balance at end of period $ 1,692 $ 7,142 $ 1,692 $ 7,142
========== ========== ========== ==========
Retained Balance at beginning of period $ 164,938 $ 95,644 $ 108,062 $ 55,473
Earnings Net income before convertible preferred share dividends 27,840 16,261 96,648 64,545
Dividends to convertible preferred shareholders (3,376) (3,119) (13,113) (9,077)
Dividends to common shareholders (732) (724) (2,927) (2,879)
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Balance at end of period $ 188,670 $ 108,062 $ 188,670 $ 108,062
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Restricted Shares Balance at beginning of period $ (3,838) $ (2,252) $ (1,713) $ (2,672)
Issuance of restricted shares - 163 (4,582) (886)
Amortization of restricted shares 447 376 2,904 1,845
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Balance at end of period $ (3,391) $ (1,713) $ (3,391) $ (1,713)
========== ========== ========== ==========
Total Balance at beginning of period $ 520,132 $ 440,501 $ 453,464 $ 239,780
Shareholders' Issuance of convertible preferred shares - - - 150,000
Equity Issuance of shares 20,867 (49) 24,273 (6,311)
Restricted shares, net 446 539 (1,678) 959
Unrealized (depreciation) appreciation on investments,
net of deferred income tax (4,134) (3,107) (6,396) 7,664
Unrealized appreciation (depreciation) on cash flow
hedge, net of deferred income tax - 61 946 (223)
Net income before convertible preferred share dividends 27,840 16,261 96,648 64,545
Dividends to common shareholders (732) (724) (2,927) (2,879)
Other 97 (18) 186 (71)
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Balance at end of period $ 564,516 $ 453,464 $ 564,516 $ 453,464
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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 Twelve Months Ended
December 31, December 31,
2003 2002 2003 2002
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(Unaudited) (Unaudited) (Unaudited)
Cash Flow Net income before convertible preferred share dividends $ 27,840 $ 16,261 $ 96,648 $ 64,545
from Operating Adjustments to reconcile net income to net cash
Activities provided by operating activities:
Losses and loss expenses 13,325 10,933 2,807 (5,876)
Unearned premiums (25,709) 14,590 (42,148) 25,088
Deferred acquisition costs 5,286 (9,902) 20,226 (15,409)
Receivables 3,781 17,239 (5,855) 3,143
Reinsurance balances payable (6,629) (19,005) (27,717) 2,913
Reinsurance recoverable 10,831 9,301 74,678 25,018
Income taxes (4,807) 14,087 (14,808) 25,017
Equity in earnings of limited partnerships (3,632) (3,227) (13,373) (9,323)
Trading portfolio purchased (15,919) - (21,607) (30,886)
Trading portfolio disposed 16,687 25,752 25,183 38,123
Deposit liability 4,766 1,927 45,434 21,818
Other 9,361 1,952 14,789 (4,789)
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Net cash provided by operating activities 35,181 79,908 154,257 139,382
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Cash Flow Fixed maturities available for sale purchased (170,579) (82,222) (527,249) (430,722)
from Investing Fixed maturities available for sale disposed or matured 139,607 78,011 378,996 189,969
Activities Payable for securities (82,923) (3,784) (4) (82)
Net change in short-term investments 56,875 (14,532) (42,453) 20,185
Hedge funds purchased (23,000) (4,000) (35,000) (30,366)
Hedge funds disposed 20,073 (22,528) 40,009 14,265
Other invested assets purchased (181) 275 (314) (8)
Other invested assets disposed 105 1,903 1,673 10,283
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Net cash used by investing activities (60,023) (46,877) (184,342) (226,476)
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Cash Flow Proceeds from issuance of convertible preferred shares - - - 140,892
from Financing Proceeds from issuance of common shares 20,867 56 21,538 2,128
Activities Proceeds from issuance of minority interest in
consolidated subsidiaries 30,000 - 62,500 -
Cash dividends paid to common shareholders (732) (724) (2,927) (2,879)
Repayment of debt - - (30,000) (25,000)
Repurchase of minority interest in consolidated subsidiary - (806) - (3,773)
Cost of shares repurchased - 57 (1,848) (532)
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Net cash (used) provided by financing activities 50,135 (1,417) 49,263 110,836
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Net change in cash 25,293 31,614 19,178 23,742
Cash, beginning of period 40,515 15,016 46,630 22,888
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Cash, end of period $ 65,808 $ 46,630 $ 65,808 $ 46,630
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Supplemental disclosure of cash flow information:
Interest paid $ 1,053 $ 545 $ 11,229 $ 11,136
Income taxes paid $ 2,878 $ (8,401) $ 15,680 $ (7,123)
The accompanying notes are an integral part of these statements.