Quarterly Financial Information (Unaudited)

A summary of selected quarterly information follows:



2016	First Quarter			Second Quarter			Third Quarter			Fourth Quarter			Full Year
	(dollars in millions, except per share data)
Revenues
Net earned premiums	$	183		$	214		$	231		$	236		$	864
Net investment income	99			98			94			117			408
Net realized investment gains (losses)	(13		)	10			(2		)	(24		)	(29		)
Net change in fair value of credit derivatives	(60		)	63			21			74			98
Fair value gains (losses) on CCS	(16		)	(11		)	(23		)	50			0
Fair value gains (losses) on FG VIEs	18			4			(11		)	27			38
Bargain purchase gain and settlement of pre-existing relationships	—			—			259			—			259
Other income (loss)	34			18			(3		)	(10		)	39
Expenses
Loss and LAE	90			102			(9		)	112			295
Amortization of DAC	4			5			4			5			18
Interest expense	26			25			26			25			102
Other operating expenses	60			63			65			57			245
Income (loss) before provision for income taxes	65			201			480			271			1,017
Provision (benefit) for income taxes	6			55			1			74			136
Net income (loss)	59			146			479			197			881
Earnings (loss) per share(1):
Basic	$	0.43		$	1.09		$	3.63		$	1.51		$	6.61
Diluted	$	0.43		$	1.09		$	3.60		$	1.49		$	6.56
Dividends per share	$	0.13		$	0.13		$	0.13		$	0.13		$	0.52



2015	First Quarter			Second Quarter			Third Quarter			Fourth Quarter			Full Year
	(dollars in millions, except per share data)
Revenues
Net earned premiums	$	142		$	219		$	213		$	192		$	766
Net investment income	101			98			112			112			423
Net realized investment gains (losses)	16			(9		)	(27		)	(6		)	(26		)
Net change in fair value of credit derivatives	124			90			86			428			728
Fair value gains (losses) on CCS	2			23			(15		)	17			27
Fair value gains (losses) on FG VIEs	(7		)	5			2			38			38
Bargain purchase gain and settlement of pre-existing relationships	—			214			—			—			214
Other income (loss)	(9		)	55			(3		)	(6		)	37
Expenses
Loss and LAE	18			188			112			106			424
Amortization of DAC	4			6			5			5			20
Interest expense	25			26			25			25			101
Other operating expenses	56			66			54			55			231
Income (loss) before provision for income taxes	266			409			172			584			1,431
Provision (benefit) for income taxes	65			112			43			155			375
Net income (loss)	201			297			129			429			1,056
Earnings (loss) per share(1):
Basic	$	1.29		$	1.97		$	0.88		$	3.05		$	7.12
Diluted	$	1.28		$	1.96		$	0.88		$	3.03		$	7.08
Dividends per share	$	0.12		$	0.12		$	0.12		$	0.12		$	0.48

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(1)

Per share amounts for the quarters and the full years have each been calculated separately. Accordingly, quarterly amounts may not sum up to the annual amounts because of differences in the average common shares outstanding during each period and, with regard to diluted per share amounts only, because of the inclusion of the effect of potentially dilutive securities only in the periods in which such effect would have been dilutive.