Condensed Consolidated Guarantor Financial Statements (Tables)

3 Months Ended

Mar. 31, 2016

Unaudited Condensed Consolidating Balance Sheet:



As of March 31, 2016	Allied World Switzerland (Parent Guarantor)		Allied World Bermuda (Subsidiary Issuer)		Other Allied World Subsidiaries		Consolidating Adjustments			Allied World Switzerland Consolidated
ASSETS:
Investments	$	—	$	—	$	8,710.4	$	—		$	8,710.4
Cash and cash equivalents	18.5		1.4		752.1		—			772.0
Insurance balances receivable	—		—		885.4		—			885.4
Funds held	—		—		353.2		—			353.2
Reinsurance recoverable	—		—		1,512.0		—			1,512.0
Reinsurance recoverable on paid losses	—		—		82.7		—			82.7
Net deferred acquisition costs	—		—		186.9		—			186.9
Goodwill and intangible assets	—		—		505.4		—			505.4
Balances receivable on sale of investments	—		—		24.6		—			24.6
Investments in subsidiaries	3,422.4		4,493.7		—		(7,916.1		)	—
Due from subsidiaries	97.8		16.8		10.5		(125.1		)	—
Other assets	2.4		—		693.0		—			695.4
Total assets	$	3,541.1	$	4,511.9	$	13,716.2	$	(8,041.2	)	$	13,728.0
LIABILITIES:
Reserve for losses and loss expenses	$	—	$	—	$	6,575.1	$	—		$	6,575.1
Unearned premiums	—		—		1,796.9		—			1,796.9
Reinsurance balances payable	—		—		221.6		—			221.6
Balances due on purchases of investments	—		—		148.0		—			148.0
Senior notes	—		1,293.3		—		—			1,293.3
Other long-term debt	—		—		23.3		—			23.3
Due to subsidiaries	2.4		8.1		114.6		(125.1		)	—
Other liabilities	3.3		21.6		109.5		—			134.4
Total liabilities	5.7		1,323.0		8,989.0		(125.1		)	10,192.6
Total shareholders’ equity	3,535.4		3,188.9		4,727.2		(7,916.1		)	3,535.4
Total liabilities and shareholders’ equity	$	3,541.1	$	4,511.9	$	13,716.2	$	(8,041.2	)	$	13,728.0



As of December 31, 2015	Allied World Switzerland (Parent Guarantor)		Allied World Bermuda (Subsidiary Issuer)		Other Allied World Subsidiaries		Consolidating Adjustments			Allied World Switzerland Consolidated
ASSETS:
Investments	$	—	$	—	$	8,571.2	$	—		$	8,571.2
Cash and cash equivalents	21.8		1.0		585.2		—			608.0
Insurance balances receivable	—		—		745.9		—			745.9
Funds held	—		—		640.8		—			640.8
Reinsurance recoverable	—		—		1,480.0		—			1,480.0
Reinsurance recoverable on paid losses	—		—		96.4					96.4
Net deferred acquisition costs	—		—		165.2		—			165.2
Goodwill and intangible assets	—		—		504.7		—			504.7
Balances receivable on sale of investments	—		—		36.9		—			36.9
Investments in subsidiaries	3,347.0		4,396.3		—		(7,743.3		)	—
Due from subsidiaries	173.1		36.4		16.8		(226.3		)	—
Other assets	1.8		0.1		660.9		—			662.8
Total assets	$	3,543.7	$	4,433.8	$	13,504.0	$	(7,969.6	)	$	13,511.9
LIABILITIES:
Reserve for losses and loss expenses	$	—	$	—	$	6,456.2	$	—		$	6,456.2
Unearned premiums	—		—		1,683.3		—			1,683.3
Reinsurance balances payable	—		—		214.4		—			214.4
Balances due on purchases of investments	—		—		125.1		—			125.1
Senior notes	—		1,292.9		—		—			1,292.9
Other long-term debt	—		—		23.0					23.0
Due to subsidiaries	8.6		8.3		209.5		(226.4		)	—
Other liabilities	2.6		22.2		159.7		—			184.5
Total liabilities	11.2		1,323.4		8,871.2		(226.4		)	9,979.4
Total shareholders’ equity	3,532.5		3,110.4		4,632.8		(7,743.2		)	3,532.5
Total liabilities and shareholders’ equity	$	3,543.7	$	4,433.8	$	13,504.0	$	(7,969.6	)	$	13,511.9

Unaudited Condensed Consolidating Statement of Operations and Comprehensive Income:



Three Months Ended March 31, 2016	Allied World Switzerland (Parent Guarantor)			Allied World Bermuda (Subsidiary Issuer)			Other Allied World Subsidiaries			Consolidating Adjustments			Allied World Switzerland Consolidated
Net premiums earned	$	—		$	—		$	580.1		$	—		$	580.1
Net investment income	—			—			53.3			—			53.3
Net realized investment gains	—			—			18.9			—			18.9
Other income	—			—			0.6			—			0.6
Net losses and loss expenses	—			—			(372.4		)	—			(372.4		)
Acquisition costs	—			—			(88.3		)	—			(88.3		)
General and administrative expenses	0.6			0.5			(97.5		)	—			(96.4		)
Other expense	—			—			(1.1		)	—			(1.1		)
Amortization of intangible assets	—			—			(2.5		)	—			(2.5		)
Interest expense	—			(19.4		)	(0.6		)	—			(20.0		)
Foreign exchange gain (loss)	—			—			3.0			—			3.0
Income tax (expense) benefit	(0.3		)	—			(0.8		)	—			(1.1		)
Equity in earnings of consolidated subsidiaries	73.8			95.9			—			(169.7		)	—
NET INCOME (LOSS)	$	74.1		$	77.0		$	92.7		$	(169.7	)	$	74.1
Other comprehensive income	3.1			—			3.1			(3.1		)	3.1
COMPREHENSIVE INCOME (LOSS)	$	77.2		$	77.0		$	95.8		$	(172.8	)	$	77.2



Three Months Ended March 31, 2015	Allied World Switzerland (Parent Guarantor)			Allied World Bermuda (Subsidiary Issuer)			Other Allied World Subsidiaries			Consolidating Adjustments			Allied World Switzerland Consolidated
Net premiums earned	$	—		$	—		$	568.5		$	—		$	568.5
Net investment income	—			—			44.6			—			44.6
Net realized investment gains	—			—			45.0			—			45.0
Other income	—			—			0.9			—			0.9
Net losses and loss expenses	—			—			(325.2		)	—			(325.2		)
Acquisition costs	—			—			(78.7		)	—			(78.7		)
General and administrative expenses	(9.4		)	0.2			(87.9		)	—			(97.1		)
Other expense	—			—			(1.8		)	—			(1.8		)
Amortization of intangible assets	—			—			(0.6		)	—			(0.6		)
Interest expense	—			(13.9		)	(0.5		)	—			(14.4		)
Foreign exchange gain (loss)	—			—			(9.9		)	—			(9.9		)
Income tax (expense) benefit	(0.6		)	—			(6.3		)	—			(6.9		)
Equity in earnings of consolidated subsidiaries	134.4			143.7			—			(278.1		)	—
NET INCOME (LOSS)	$	124.4		$	130.0		$	148.1		$	(278.1	)	$	124.4
Other comprehensive income	—			—			—			—			—
COMPREHENSIVE INCOME (LOSS)	$	124.4		$	130.0		$	148.1		$	(278.1	)	$	124.4

Unaudited Condensed Consolidating Statement of Cash Flows:



Three Months Ended March 31, 2016	Allied World Switzerland (Parent Guarantor)			Allied World Bermuda (Subsidiary Issuer)			Other Allied World Subsidiaries			Consolidating Adjustments			Allied World Switzerland Consolidated
CASH FLOWS PROVIDED BY (USED IN) OPERATING ACTIVITIES	$	69.7		$	78.9		$	377.4		$	(176.7	)	$	349.3
CASH FLOWS PROVIDED BY (USED IN) INVESTING ACTIVITIES:
Purchases of trading securities	—			—			(1,530.0		)	—			(1,530.0		)
Purchases of other invested assets	—			—			(8.1		)	—			(8.1		)
Sales of trading securities	—			—			1,414.6			—			1,414.6
Sales of other invested assets	—			—			38.7			—			38.7
Other	—			—			(27.4		)	—			(27.4		)
Net cash provided by (used in) investing activities	—			—			(112.2		)	—			(112.2		)
CASH FLOWS PROVIDED BY (USED IN) FINANCING ACTIVITIES:
Dividends paid	(23.4		)	—			—			—			(23.4		)
Intercompany dividends paid	—			(78.5		)	(98.2		)	176.7			—
Proceeds from the exercise of stock options	0.4			—			—			—			0.4
Repayment of other long-term debt	—			—			(0.1		)	—			(0.1		)
Share repurchases	(50.0		)	—			—			—			(50.0		)
Net cash provided by (used in) financing activities	(73.0		)	(78.5		)	(98.3		)	176.7			(73.1		)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	(3.3		)	0.4			166.9			—			164.0
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD	21.8			1.0			585.2			—			608.0
CASH AND CASH EQUIVALENTS, END OF PERIOD	$	18.5		$	1.4		$	752.1		$	—		$	772.0



Three Months Ended March 31, 2015	Allied World Switzerland (Parent Guarantor)			Allied World Bermuda (Subsidiary Issuer)			Other Allied World Subsidiaries			Consolidating Adjustments			Allied World Switzerland Consolidated
CASH FLOWS PROVIDED BY (USED IN) OPERATING ACTIVITIES:	$	71.6		$	80.4		$	339.7		$	(179.0	)	$	312.7
CASH FLOWS PROVIDED BY (USED IN) INVESTING ACTIVITIES:
Purchases of trading securities	—			—			(1,723.4		)	—			(1,723.4		)
Purchases of other invested assets	—			—			(233.3		)	—			(233.3		)
Sales of trading securities	—			—			1,561.9			—			1,561.9
Sales of other invested assets	—			—			56.5			—			56.5
Other	—			—			19.1			—			19.1
Net cash provided by (used in) investing activities	—			—			(319.2		)	—			(319.2		)
CASH FLOWS PROVIDED BY (USED IN) FINANCING ACTIVITIES:
Dividends paid	(21.7		)	—			—			—			(21.7		)
Intercompany dividends paid	—			(80.0		)	(99.0		)	179.0			—
Proceeds from the exercise of stock options	4.2			—			—			—			4.2
Share repurchases	(50.3		)	—			—			—			(50.3		)
Net cash provided by (used in) financing activities	(67.8		)	(80.0		)	(99.0		)	179.0			(67.8		)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	3.8			0.4			(78.5		)	—			(74.3		)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD	32.6			1.7			555.0			—			589.3
CASH AND CASH EQUIVALENTS, END OF PERIOD	$	36.4		$	2.1		$	476.5		$	—		$	515.0