XML 30 R19.htm IDEA: XBRL DOCUMENT v3.7.0.1
Condensed Consolidated Guarantor Financial Statements
3 Months Ended
Mar. 31, 2017
Condensed Financial Information of Parent Company Only Disclosure [Abstract]  
Condensed Consolidated Guarantor Financial Statements
CONDENSED CONSOLIDATED GUARANTOR FINANCIAL STATEMENTS

The following tables present unaudited condensed consolidating financial information as of March 31, 2017 and December 31, 2016 and for the three months ended March 31, 2017 and 2016 for Allied World Switzerland (the “Parent Guarantor”) and Allied World Bermuda (the “Subsidiary Issuer”). The Subsidiary Issuer is a direct, 100%-owned subsidiary of the Parent Guarantor. Investments in subsidiaries are accounted for by the Parent Guarantor under the equity method for purposes of the supplemental consolidating presentation. Earnings of subsidiaries are reflected in the Parent Guarantor’s investment accounts and earnings. The Parent Guarantor fully and unconditionally guarantees the senior notes issued by the Subsidiary Issuer.

Unaudited Condensed Consolidating Balance Sheet:
As of March 31, 2017
Allied World
Switzerland
(Parent
Guarantor)
 
Allied World
Bermuda
(Subsidiary
Issuer)
 
Other Allied
World
Subsidiaries
 
Consolidating
Adjustments
 
Allied World
Switzerland
Consolidated
ASSETS:
 
 
 
 
 
 
 
 
 
Investments
$

 
$

 
$
7,694.9

 
$

 
$
7,694.9

Cash and cash equivalents
14.8

 
25.8

 
1,244.3

 

 
1,284.9

Insurance balances receivable

 

 
862.2

 

 
862.2

Funds held

 

 
297.1

 

 
297.1

Reinsurance recoverable

 

 
1,725.6

 

 
1,725.6

Reinsurance recoverable on paid losses

 

 
119.9

 

 
119.9

Net deferred acquisition costs

 

 
148.9

 

 
148.9

Goodwill and intangible assets

 

 
492.8

 

 
492.8

Balances receivable on sale of investments

 

 
23.9

 

 
23.9

Investments in subsidiaries
3,068.0

 
3,608.3

 

 
(6,676.3
)
 

Due from subsidiaries
567.4

 
22.9

 
17.0

 
(607.3
)
 

Other assets
1.1

 
0.8

 
775.4

 

 
777.3

Total assets
$
3,651.3

 
$
3,657.8

 
$
13,402.0

 
$
(7,283.6
)
 
$
13,427.5

LIABILITIES:
 
 
 
 
 
 
 
 
 
Reserve for losses and loss expenses
$

 
$

 
$
6,762.7

 
$

 
$
6,762.7

Unearned premiums

 

 
1,813.2

 

 
1,813.2

Reinsurance balances payable

 

 
202.9

 

 
202.9

Balances due on purchases of investments

 

 
58.2

 

 
58.2

Senior notes

 
794.4

 

 

 
794.4

Other long-term debt

 

 
22.6

 

 
22.6

Due to subsidiaries
9.4

 
7.6

 
590.3

 
(607.3
)
 

Other liabilities
3.6

 
15.3

 
116.3

 

 
135.2

Total liabilities
13.0

 
817.3

 
9,566.2

 
(607.3
)
 
9,789.2

Total shareholders’ equity
3,638.3

 
2,840.5

 
3,835.8

 
(6,676.3
)
 
3,638.3

Total liabilities and shareholders’ equity
$
3,651.3

 
$
3,657.8

 
$
13,402.0

 
$
(7,283.6
)
 
$
13,427.5

 
As of December 31, 2016
Allied World
Switzerland
(Parent
Guarantor)
 
Allied World
Bermuda
(Subsidiary
Issuer)
 
Other Allied
World
Subsidiaries
 
Consolidating
Adjustments
 
Allied World
Switzerland
Consolidated
ASSETS:
 
 
 
 
 
 
 
 
 
Investments
$

 
$

 
$
7,942.3

 
$

 
$
7,942.3

Cash and cash equivalents
13.1

 
0.8

 
707.0

 

 
720.9

Insurance balances receivable

 

 
784.0

 

 
784.0

Funds held

 

 
466.8

 

 
466.8

Reinsurance recoverable

 

 
1,625.0

 

 
1,625.0

Reinsurance recoverable on paid losses

 

 
104.4

 


 
104.4

Net deferred acquisition costs

 

 
121.1

 

 
121.1

Goodwill and intangible assets

 

 
494.4

 

 
494.4

Balances receivable on sale of investments

 

 
114.7

 

 
114.7

Investments in subsidiaries
3,433.7

 
4,020.1

 

 
(7,453.8
)
 

Due from subsidiaries
115.6

 

 
29.9

 
(145.5
)
 

Other assets
1.8

 
0.8

 
802.8

 

 
805.4

Total assets
$
3,564.2

 
$
4,021.7

 
$
13,192.4

 
$
(7,599.3
)
 
$
13,179.0

LIABILITIES:
 
 
 
 
 
 
 
 
 
Reserve for losses and loss expenses
$

 
$

 
$
6,639.2

 
$

 
$
6,639.2

Unearned premiums

 

 
1,688.1

 

 
1,688.1

Reinsurance balances payable

 

 
223.3

 

 
223.3

Balances due on purchases of investments

 

 
79.7

 

 
79.7

Senior notes

 
794.2

 

 

 
794.2

Other long-term debt

 

 
22.0

 

 
22.0

Due to subsidiaries
10.0

 
20.0

 
115.6

 
(145.6
)
 

Other liabilities
2.4

 
5.7

 
172.6

 

 
180.7

Total liabilities
12.4

 
819.9

 
8,940.5

 
(145.6
)
 
9,627.2

Total shareholders’ equity
3,551.8

 
3,201.8

 
4,251.9

 
(7,453.7
)
 
3,551.8

Total liabilities and shareholders’ equity
$
3,564.2

 
$
4,021.7

 
$
13,192.4

 
$
(7,599.3
)
 
$
13,179.0




Unaudited Condensed Consolidating Statement of Operations and Comprehensive Income:
 
Three Months Ended March 31, 2017
Allied World
Switzerland
(Parent
Guarantor)
 
Allied World
Bermuda
(Subsidiary
Issuer)
 
Other Allied
World
Subsidiaries
 
Consolidating
Adjustments
 
Allied World
Switzerland
Consolidated
Net premiums earned
$

 
$

 
$
544.9

 
$

 
$
544.9

Net investment income

 

 
52.3

 

 
52.3

Net realized investment gains

 

 
40.7

 

 
40.7

Other income

 

 
1.3

 

 
1.3

Net losses and loss expenses

 

 
(359.0
)
 

 
(359.0
)
Acquisition costs

 

 
(77.1
)
 

 
(77.1
)
General and administrative expenses
(9.1
)
 
(0.3
)
 
(94.7
)
 

 
(104.1
)
Other expense
(0.9
)
 
(0.1
)
 
(6.1
)
 

 
(7.1
)
Amortization of intangible assets

 

 
(2.3
)
 

 
(2.3
)
Interest expense

 
(9.8
)
 
(0.6
)
 

 
(10.4
)
Foreign exchange gain (loss)

 

 
(1.4
)
 

 
(1.4
)
Income tax (expense) benefit
(0.9
)
 

 
3.4

 

 
2.5

Equity in earnings of consolidated subsidiaries
91.2

 
106.5

 

 
(197.7
)
 

NET INCOME (LOSS)
$
80.3

 
$
96.3

 
$
101.4

 
$
(197.7
)
 
$
80.3

Other comprehensive income (loss)
5.7

 

 
5.7

 
(5.7
)
 
5.7

COMPREHENSIVE INCOME (LOSS)
$
86.0

 
$
96.3

 
$
107.1

 
$
(203.4
)
 
$
86.0

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 (loss)
3.1

 

 
3.1

 
(3.1
)
 
3.1

COMPREHENSIVE INCOME (LOSS)
$
77.2

 
$
77.0

 
$
95.8

 
$
(172.8
)
 
$
77.2




Unaudited Condensed Consolidating Statement of Cash Flows:
Three Months Ended March 31, 2017
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:
$
0.3

 
$
35.0

 
$
181.3

 
$
(20.0
)
 
$
196.6

CASH FLOWS PROVIDED BY (USED IN) INVESTING ACTIVITIES:
 
 
 
 
 
 
 
 
 
Purchases of trading securities

 

 
(779.8
)
 

 
(779.8
)
Purchases of other invested assets

 

 
(11.4
)
 

 
(11.4
)
Sales of trading securities

 

 
1,141.9

 

 
1,141.9

Sales of other invested assets

 

 
0.5

 

 
0.5

Other

 

 
14.9

 

 
14.9

Net cash provided by (used in) investing activities

 

 
366.1

 

 
366.1

CASH FLOWS PROVIDED BY (USED IN) FINANCING ACTIVITIES:
 
 
 
 
 
 
 
 


Dividends paid

 

 

 

 

Intercompany dividends paid

 
(10.0
)
 
(10.0
)
 
20.0

 

Proceeds from the exercise of stock options
1.4

 

 

 

 
1.4

Repayment of other long-term debt


 

 
(0.1
)
 

 
(0.1
)
Net cash provided by (used in) financing activities
1.4

 
(10.0
)
 
(10.1
)
 
20.0

 
1.3

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
1.7

 
25.0

 
537.3

 

 
564.0

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
13.1

 
0.8

 
707.0

 

 
720.9

CASH AND CASH EQUIVALENTS, END OF PERIOD
$
14.8

 
$
25.8

 
$
1,244.3

 
$

 
$
1,284.9

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



Notes to Parent Guarantor Condensed Financial Information

a) Dividends

Allied World Switzerland received cash dividends from its subsidiaries of $10.0 million and $78.5 million for the three months ended March 31, 2017 and 2016, respectively. Such dividends are included in “cash flows provided by (used in) operating activities” in the unaudited condensed consolidating cash flows.