TRENWICK GROUP LTD.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
AND COMPREHENSIVE INCOME - UNAUDITED
(Amounts expressed in thousands of dollars, except per share data)
THREE MONTHS ENDED MARCH 31, 2003 AND 2002
Three Months
-------------------------
2003 2002
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REVENUES:
Net premiums earned $221,505 $266,024
Net investment income 19,638 29,255
Net realized investment gains 373 1,457
Other income (expense) (2,033) 2,602
----------- ------------
Total revenues 239,483 299,338
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EXPENSES:
Claims and claims expenses incurred 137,580 207,577
Policy acquisition costs 62,429 73,072
Underwriting expenses 23,994 23,007
General and administrative expenses 3,738 3,318
Interest expense and subsidiary
preferred share dividends 11,766 9,936
Foreign currency losses (gains) 1,367 (678)
----------- ------------
Total expenses 240,874 316,232
----------- ------------
Income (loss) before income taxes
and cumulative effect of change in
accounting principle (1,391) (16,894)
Applicable income taxes (benefit) (1,840) (3,984)
----------- ------------
Net income (loss) before cumulative
effect of change in accounting
principle 449 (12,910)
Cumulative effect of change
in accounting principle - (41,653)
----------- ------------
Net income (loss) 449 (54,563)
Dividends on convertible preferred stock 1,072 -
----------- ------------
Net loss available to
common shareholders $(623) $(54,563)
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TRENWICK GROUP LTD.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
AND COMPREHENSIVE INCOME - UNAUDITED (Continued)
(Amounts expressed in thousands of dollars, except per share data)
THREE MONTHS MARCH 31, 2003 AND 2002
Three Months
-------------------------
2003 2002
----------- ------------
EARNINGS PER COMMON SHARE
Basic and diluted loss per
common share before cumulative effect
of change in accounting principle $(0.02) $(0.35)
Cumulative effect of change in
accounting
principle - (1.13)
----------- ------------
Basic and diluted loss per common share $(0.02) $(1.48)
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COMPREHENSIVE INCOME (LOSS):
Net income (loss) $449 $(54,563)
----------- ------------
Other comprehensive income:
Net unrealized investment gains
(losses) 4,844 (12,755)
Foreign currency translation
adjustments (855) 1,113
----------- ------------
Total other comprehensive income (loss) 3,989 (11,642)
----------- ------------
Comprehensive income (loss) $4,438 $(66,205)
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TRENWICK GROUP LTD.
CONDENSED CONSOLIDATED BALANCE SHEET
(Amounts expressed in thousands of dollars, except share and per
share data)
MARCH 31, 2003 ( UNAUDITED) AND DECEMBER 31, 2002
2003 2002
----------- -----------
ASSETS
Debt securities available for sale, at fair
value $1,693,533 $1,492,834
Equity securities, at fair value 8,821 8,849
Cash and cash equivalents 568,207 814,235
Accrued investment income 25,079 19,223
Premiums receivable 470,737 519,866
Reinsurance recoverable balances, net 1,828,055 1,803,011
Prepaid reinsurance premiums 219,776 262,802
Deferred policy acquisition costs 117,310 127,200
Security deposit held by Chubb Re 50,482 50,207
Other assets 152,660 179,755
----------- -----------
Total assets $5,134,660 $5,277,982
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LIABILITIES
Unpaid claims and claims expenses $3,687,552 $3,718,124
Unearned premium income 645,231 721,624
Reinsurance balances payable 299,123 374,397
Indebtedness 76,753 76,498
Other liabilities 162,074 126,549
----------- -----------
Total liabilities 4,870,733 5,017,192
----------- -----------
MINORITY INTEREST
Mandatorily redeemable preferred capital
securities of subsidiary trust holding
solely junior subordinated
debentures of U.S. subsidiary 68,334 68,320
Minority interest in preferred shares of
Bermuda subsidiary 75,000 75,000
----------- -----------
Total minority interest 143,334 143,320
----------- -----------
CONVERTIBLE PREFERRED STOCK 40,000 40,000
----------- -----------
COMMON SHAREHOLDERS' EQUITY
Common shares, $0.10 par value, 36,786,842 and
36,801,545
shares issued and outstanding 3,679 3,680
Additional paid in capital 575,276 576,567
Deferred compensation under share award plans (1,563) (2,615)
Retained earnings (accumulated deficit) (492,969) (492,343)
Accumulated other comprehensive income (3,830) (7,819)
----------- -----------
Total common shareholders' equity 80,593 77,470
----------- -----------
Total liabilities, minority interest,
convertible preferred stock and
common shareholders' equity $5,134,660 $5,277,982
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TRENWICK GROUP LTD.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS - UNAUDITED
(Amounts expressed in thousands of dollars)
THREE MONTHS MARCH 31, 2003 AND 2002
Three Months
-------------------
2003 2002
--------- ---------
OPERATING ACTIVITIES
Cash from (for) underwriting activities $(99,262) $51,285
Net investment income received 24,323 33,952
Interest expense and preferred share dividends paid (612) (7,075)
Income taxes recovered 882 60
Cash from (for) other operating activities 4,766 (1,569)
--------- ---------
Cash from (for) operating activities (69,903) 76,653
INVESTING ACTIVITIES
Cash for investing activities (175,687) (39,957)
FINANCING ACTIVITIES
Cash for financing activities (438) (3,115)
--------- ---------
Change in cash and cash equivalents (246,028) 33,581
Cash and cash equivalents, beginning of period 814,235 331,350
--------- ---------
Cash and cash equivalents, end of period $568,207 $364,931
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