Senior Unsecured Fixed Rate Notes (Tables)

3 Months Ended

Mar. 31, 2020

Schedule Of Unamortized Debt Issuance Costs Deducted From Carrying Value Of Debt Liability

At March 31, 2020 and December 31, 2019, the Notes consisted of the following:


(in millions)	March 31, 2020		December 31, 2019
Senior unsecured fixed rate notes
Principal	$	143.8	$	143.8
Less: unamortized debt issuance costs	(3.8)		(3.8)
Senior unsecured fixed rate notes, less unamortized debt issuance costs	$	140.0	$	140.0

Condensed Consolidating Balance Sheet

CONDENSED CONSOLIDATING BALANCE SHEET

MARCH 31, 2020

(in millions)

(Unaudited)


	Argo Group International Holdings, Ltd. (Parent Guarantor)		Argo Group US, Inc. and Subsidiaries (Subsidiary Issuer)		Other Subsidiaries and Eliminations ⁽¹⁾		Consolidating Adjustments ⁽²⁾		Total
Assets
Investments	$	0.3	$	3,323.3	$	1,487.8	$	—	$	4,811.4
Cash	1.8		40.4		116.5		—		158.7
Accrued investment income	—		16.7		6.5		—		23.2
Premiums receivable	—		264.4		474.7		—		739.1
Reinsurance recoverables	—		1,724.9		1,096.0		—		2,820.9
Goodwill and other intangible assets, net	40.3		123.4		89.2		—		252.9

Deferred tax assets, net	—		40.1		4.4		—		44.5
Deferred acquisition costs, net	—		86.3		71.7		—		158.0
Ceded unearned premiums	—		336.2		316.7		—		652.9
Operating lease right-of-use assets	7.1		57.5		24.5		—		89.1
Other assets	18.4		152.8		264.2		—		435.4
Assets held for sale	—		15.2		—		—		15.2
Intercompany note receivable	—		57.4		(57.4)		—		—
Investments in subsidiaries	1,796.7		—		—		(1,796.7)		—
Total assets	$	1,864.6	$	6,238.6	$	3,894.8	$	(1,796.7)	$	10,201.3
Liabilities and Shareholders' Equity
Reserves for losses and loss adjustment expenses	$	—	$	3,128.0	$	1,939.6	$	—	$	5,067.6
Unearned premiums	—		897.1		562.9		—		1,460.0
Funds held and ceded reinsurance payable, net	—		691.7		463.1		—		1,154.8
Debt	153.4		284.3		139.8		—		577.5
Current income taxes payable, net	—		23.1		(5.4)		—		17.7

Accrued underwriting expenses and other liabilities	9.2		74.2		101.9		—		185.3
Operating lease liabilities	7.3		66.5		27.8		—		101.6
Due to (from) affiliates	57.9		(25.6)		25.6		(57.9)		—

Total liabilities	227.8		5,139.3		3,255.3		(57.9)		8,564.5
Total shareholders' equity	1,636.8		1,099.3		639.5		(1,738.8)		1,636.8
Total liabilities and shareholders' equity	$	1,864.6	$	6,238.6	$	3,894.8	$	(1,796.7)	$	10,201.3

⁽¹⁾Includes all other subsidiaries of Argo Group International Holdings, Ltd. and all intercompany eliminations.

⁽²⁾Includes all Argo Group parent company eliminations.

CONDENSED CONSOLIDATING BALANCE SHEET

DECEMBER 31, 2019

(in millions)


	Argo Group International Holdings, Ltd. (Parent Guarantor)		Argo Group US, Inc. and Subsidiaries (Subsidiary Issuer)		Other Subsidiaries and Eliminations ⁽¹⁾		Consolidating Adjustments⁽²⁾		Total
Assets
Investments	$	0.6	$	3,405.6	$	1,693.2	$	—	$	5,099.4
Cash	1.9		31.6		104.3		—		137.8
Accrued investment income	—		18.2		7.5		—		25.7
Premiums receivable	—		231.3		456.9		—		688.2
Reinsurance recoverables	—		1,689.4		1,415.2		—		3,104.6
Goodwill and other intangible assets, net	40.6		123.4		89.2		—		253.2
Deferred tax assets, net	—		0.4		5.7		—		6.1
Deferred acquisition costs, net	—		88.4		71.8		—		160.2
Ceded unearned premiums	—		306.4		238.6		—		545.0
Operating lease right-of-use assets	7.1		59.6		25.1		—		91.8
Other assets	7.8		165.8		213.5		—		387.1
Assets held for sale	—		15.4		—		—		15.4
Intercompany note receivable	—		56.7		(56.7)		—		—
Investments in subsidiaries	1,916.7		—		—		(1,916.7)		—
Total assets	$	1,974.7	$	6,192.2	$	4,264.3	$	(1,916.7)	$	10,514.5
Liabilities and Shareholders' Equity
Reserves for losses and loss adjustment expenses	$	—	$	3,037.5	$	2,120.1	$	—	$	5,157.6
Unearned premiums	—		899.8		511.1		—		1,410.9
Funds held and ceded reinsurance payable, net	—		645.9		607.8		—		1,253.7
Debt	153.4		284.3		141.0		—		578.7
Current income taxes payable, net	—		8.2		(7.4)		—		0.8

Accrued underwriting expenses and other liabilities	13.6		87.6		124.8		—		226.0
Operating lease liabilities	7.3		68.9		29.5		—		105.7
Due to (from) affiliates	19.3		(13.4)		13.4		(19.3)		—

Total liabilities	193.6		5,018.8		3,540.3		(19.3)		8,733.4
Total shareholders' equity	1,781.1		1,173.4		724.0		(1,897.4)		1,781.1
Total liabilities and shareholders' equity	$	1,974.7	$	6,192.2	$	4,264.3	$	(1,916.7)	$	10,514.5

⁽¹⁾Includes all other subsidiaries of Argo Group International Holdings, Ltd. and all intercompany eliminations.

⁽²⁾Includes all Argo Group parent company eliminations.

Condensed Consolidating Statement of Income

CONDENSED CONSOLIDATING STATEMENT OF (LOSS) INCOME

FOR THE THREE MONTHS ENDED MARCH 31, 2020

(in millions)

(Unaudited)


	Argo Group International Holdings, Ltd. (Parent Guarantor)		Argo Group US, Inc. and Subsidiaries (Subsidiary Issuer)		Other Subsidiaries and Eliminations ⁽¹⁾		Consolidating Adjustments ⁽²⁾		Total
Premiums and other revenue:
Earned premiums	$	—	$	301.5	$	133.5	$	—	$	435.0
Net investment income	—		24.6		10.9		—		35.5
Fee and other income	—		0.8		1.3		—		2.1
Net realized investment (losses) gains	(0.1)		(40.6)		4.6		—		(36.1)
Total revenue	(0.1)		286.3		150.3		—		436.5
Expenses:
Losses and loss adjustment expenses	—		190.5		90.4		—		280.9
Underwriting, acquisition and insurance expenses	5.8		101.8		60.4		—		168.0
Other corporate expenses	2.6		0.7		—		—		3.3
Interest expense	1.4		4.3		2.0		—		7.7
Fee and other expense	—		0.7		0.5		—		1.2
Foreign currency exchange gains	—		(1.0)		(2.0)		—		(3.0)
Total expenses	9.8		297.0		151.3		—		458.1
Loss before income taxes	(9.9)		(10.7)		(1.0)		—		(21.6)
(Benefit) provision for income taxes	—		(5.9)		3.1		—		(2.8)
Net loss before equity in earnings of subsidiaries	(9.9)		(4.8)		(4.1)		—		(18.8)
Equity in undistributed earnings of subsidiaries	(8.9)		—		—		8.9		—
Net loss	$	(18.8)	$	(4.8)	$	(4.1)	$	8.9	$	(18.8)

⁽¹⁾Includes all other subsidiaries of Argo Group International Holdings, Ltd. and all intercompany eliminations.

⁽²⁾Includes all Argo Group parent company eliminations.

CONDENSED CONSOLIDATING STATEMENT OF INCOME

FOR THE THREE MONTHS ENDED MARCH 31, 2019

(in millions)

(Unaudited)


	Argo Group International Holdings, Ltd. (Parent Guarantor)		Argo Group US, Inc. and Subsidiaries (Subsidiary Issuer)		Other Subsidiaries and Eliminations ⁽¹⁾		Consolidating Adjustments ⁽²⁾		Total
Premiums and other revenue:
Earned premiums	$	—	$	266.5	$	154.0	$	—	$	420.5
Net investment (expense) income	(0.7)		23.8		10.8		—		33.9
Fee and other income	—		1.1		1.2		—		2.3
Net realized investment (losses) gains	(0.1)		45.9		6.7		—		52.5
Total revenue	(0.8)		337.3		172.7		—		509.2
Expenses:
Losses and loss adjustment expenses	—		158.0		79.9		—		237.9
Underwriting, acquisition and insurance expenses	0.2		104.1		55.9		—		160.2
Other corporate expenses	0.5		—		—		—		0.5
Interest expense	1.7		4.7		2.1		—		8.5
Fee and other expense	—		0.8		0.5		—		1.3
Foreign currency exchange gains	—		0.3		0.4		—		0.7
Total expenses	2.4		267.9		138.8		—		409.1
(Loss) income before income taxes	(3.2)		69.4		33.9		—		100.1
Provision (benefit) for income taxes	—		10.0		(1.1)		—		8.9
Net (loss) income before equity in earnings of subsidiaries	(3.2)		59.4		35.0		—		91.2
Equity in undistributed earnings of subsidiaries	94.4		—		—		(94.4)		—
Net income	$	91.2	$	59.4	$	35.0	$	(94.4)	$	91.2

⁽¹⁾Includes all other subsidiaries of Argo Group International Holdings, Ltd. and all intercompany eliminations.

⁽²⁾Includes all Argo Group parent company eliminations.

Condensed Consolidating Statement of Cash Flows

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

FOR THE THREE MONTHS ENDED MARCH 31, 2020

(in millions)

(Unaudited)


	Argo Group International Holdings, Ltd. (Parent Guarantor)		Argo Group US, Inc. and Subsidiaries (Subsidiary Issuer)		Other Subsidiaries and Eliminations⁽¹⁾		Consolidating Adjustments⁽²⁾		Total
Net cash flows from operating activities	$	10.0	$	35.7	$	(77.1)	$	—	$	(31.4)
Cash flows from investing activities:
Proceeds from sales of investments	—		309.4		328.7		—		638.1
Maturities and mandatory calls of fixed maturity investments	—		100.5		57.7		—		158.2
Purchases of investments	—		(583.0)		(266.2)		—		(849.2)
Change in short-term investments and foreign regulatory deposits	0.3		128.8		(12.9)		—		116.2
Settlements of foreign currency exchange forward contracts	—		—		3.1		—		3.1

Purchases of fixed assets and other, net	—		17.4		(22.5)		—		(5.1)
Cash provided by (used in) investing activities	0.3		(26.9)		87.9		—		61.3
Cash flows from financing activities:



Activity under stock incentive plans	0.3		—		—		—		0.3

Payment of cash dividend to common shareholders	(10.7)		—		—		—		(10.7)
Cash used in financing activities	(10.4)		—		—		—		(10.4)
Effect of exchange rate changes on cash	—		—		1.4		—		1.4
Change in cash	(0.1)		8.8		12.2		—		20.9
Cash, beginning of year	1.9		31.6		104.3		—		137.8
Cash, end of period	$	1.8	$	40.4	$	116.5	$	—	$	158.7

⁽¹⁾Includes all other subsidiaries of Argo Group International Holdings, Ltd. and all intercompany eliminations.

⁽²⁾Includes all Argo Group parent company eliminations

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

FOR THE THREE MONTHS ENDED MARCH 31, 2019

(in millions)

(Unaudited)


	Argo Group International Holdings, Ltd. (Parent Guarantor)		Argo Group US, Inc. and Subsidiaries (Subsidiary Issuer)		Other Subsidiaries and Eliminations⁽¹⁾		Consolidating Adjustments⁽²⁾		Total
Net cash flows from operating activities	$	8.8	$	29.5	$	17.3	$	—	$	55.6
Cash flows from investing activities:
Proceeds from sales of investments	—		156.6		115.9		—		272.5
Maturities and mandatory calls of fixed maturity investments	—		51.3		14.5		—		65.8
Purchases of investments	—		(249.0)		(135.2)		—		(384.2)
Change in short-term investments and foreign regulatory deposits	1.9		35.3		0.8		—		38.0
Settlements of foreign currency exchange forward contracts	—		0.3		3.3		—		3.6


Purchases of fixed assets and other, net	—		(3.3)		(24.1)		—		(27.4)
Cash (used in) provided by investing activities	1.9		(8.8)		(24.8)		—		(31.7)
Cash flows from financing activities:

Payment on the intercompany note	—		(19.1)		19.1		—		—
Activity under stock incentive plans	0.3		—		—		—		0.3

Payment of cash dividend to common shareholders	(10.8)		—		—		—		(10.8)
Cash (used in) provided by financing activities	(10.5)		(19.1)		19.1		—		(10.5)
Effect of exchange rate changes on cash	—		—		0.1		—		0.1
Change in cash	0.2		1.6		11.7		—		13.5
Cash, beginning of year	1.7		31.7		105.8		—		139.2
Cash, end of period	$	1.9	$	33.3	$	117.5	$	—	$	152.7

⁽¹⁾Includes all other subsidiaries of Argo Group International Holdings, Ltd. and all intercompany eliminations.

⁽²⁾Includes all Argo Group parent company eliminations.