ANNUITY AND LIFE RE (HOLDINGS), LTD.

                      CONDENSED CONSOLIDATED BALANCE SHEETS

                                (In U.S. dollars)

 

                                            March 31, 2005  December 31, 2004

    Assets                                     (Unaudited)

 

    Cash and cash equivalents                  $36,497,436       $56,394,484

    Fixed income investments at fair

     value (amortized cost of $63,976,362

     and $80,767,893 at March 31, 2005, and

     December 31, 2004                          63,855,193        82,034,410

    Funds withheld at interest                  55,902,525        56,415,386

    Accrued investment income                      840,696         1,155,762

    Receivable for reinsurance ceded            79,524,877        82,433,270

    Other reinsurance receivables                4,122,913         4,306,931

    Deferred policy acquisition costs            5,926,854         6,084,488

    Other assets                                   363,674           580,625

 

     Total Assets                             $247,034,168      $289,405,356

 

    Liabilities

 

    Reserves for future policy benefits       $109,115,788      $109,860,843

    Interest sensitive

     contracts liability                        56,574,414        57,754,009

    Other reinsurance liabilities               14,589,434        49,186,297

    Accounts payable and accrued expenses        2,096,101         6,186,995

 

     Total Liabilities                         182,375,737       222,988,143

 

    Stockholders' Equity

 

    Preferred shares (par value $1.00;

     50,000,000 shares authorized;

     no shares outstanding)                             --                --

    Common shares (par value $1.00;

     100,000,000 shares authorized;

     26,338,528 and 26,338,528 shares

     outstanding at March 31, 2005,

     and December 31, 2004)                     26,338,528        26,338,528

    Additional paid-in capital                 333,807,041       333,810,766

    Stock warrants                               1,350,000         1,350,000

    Unamortized stock-based compensation          (346,600)         (490,415)

    Accumulated other

     comprehensive income                         (113,947)        1,016,260

    Accumulated deficit                       (296,376,591)     (295,607,926)

 

     Total Stockholders' Equity                 64,658,431        66,417,213

 

     Total Liabilities and

      Stockholders' Equity                    $247,034,168      $289,405,356

 

 

 

                       ANNUITY AND LIFE RE (HOLDINGS), LTD.

                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

                         (Unaudited and in U.S. dollars)

 

                                          For the Three Months Ended March 31,

                                                    2005               2004

    Revenues

 

    Net premiums                                $5,488,266        $14,310,641

    Investment income, net

     of related expenses                         1,666,008          9,250,735

    Net realized investment gains                  401,150            678,925

    Net change in fair value

     of embedded derivatives                       487,145            607,388

    Surrender fees and other revenues               30,636          1,074,932

 

    Total Revenues                               8,073,205         25,922,621

 

    Benefits and Expenses

 

    Claims and policy benefits                   4,602,443         10,244,658

    Interest credited to interest

     sensitive products                            369,178          3,529,250

    Policy acquisition costs and

     other insurance expenses                    1,356,238          8,180,997

    Operating expenses                           2,514,011          2,767,362

 

    Total Benefits and Expenses                  8,841,870         24,722,267

 

    (Loss) income before cumulative

     effect of a change in

     accounting principle                        $(768,665)        $1,200,354

 

    Cumulative effect of a change

     in accounting principle                            --           (365,960)

 

    Net (Loss) Income                            $(768,665)          $834,394

 

    (Loss) income per common share before

     cumulative effect of a change in

     accounting principle

      Basic                                         $(0.03)             $0.04

      Diluted                                       $(0.03)             $0.04

 

    Cumulative effect of a change in

     accounting principle per

     common share

      Basic                                            $--             $(0.01)

      Diluted                                          $--             $(0.01)

 

    Net (loss) income per common share

      Basic                                         $(0.03)             $0.03

      Diluted                                       $(0.03)             $0.03

 

 

 

                       ANNUITY AND LIFE RE (HOLDINGS), LTD.

            CONDENSED CONSOLIDATED STATEMENTS OF SEGMENT INCOME (LOSS)

                         (Unaudited and in U.S. dollars)

 

    Three Months Ended

     March 31, 2005

                            Life        Annuity

                        Reinsurance   Reinsurance    Corporate    Consolidated

 

     Revenues           $5,967,919    $1,193,807     $911,478      $8,073,205

     Benefits and

      Expenses           5,788,237       756,650    2,296,983       8,841,870

 

     Segment Income

      (Loss)              $179,682      $437,158  $(1,385,505)      $(768,665)

 

     Total Assets     $128,305,222   $58,374,414  $60,354,532    $247,034,168

 

     Fully Diluted

      Earnings

      per Share              $0.00         $0.02       $(0.05)         $(0.03)

 

     Book Value

      per share                 --            --           --           $2.45

 

    Three Months Ended

     March 31, 2004

 

     Revenues          $14,615,501    $9,920,074   $1,387,046     $25,922,621

     Benefits and

      Expenses          14,440,920     8,586,461    1,694,885      24,722,266

 

     Segment Income

      (Loss)              $174,580    $1,333,613    $(307,839)     $1,200,355

     Cumulative effect

      of adopting

      SOP 03-1                  --      (365,960)          --        (365,960)

     Net Segment

      Income (Loss)       $174,580      $967,653    $(307,839)       $834,395

 

     Total Assets     $216,526,756  $702,159,200  $84,886,362  $1,003,572,318

 

     Fully Diluted

      Earnings

      per Share              $0.00         $0.04       $(0.01)          $0.03

 

     Book Value

      per share                 --            --           --           $5.18