Condensed Consolidating Financial Information Provided in Connection with Outstanding Debt of Subsidiaries

9 Months Ended

Sep. 30, 2019

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Condensed Consolidating Financial Information Provided in Connection with Outstanding Debt of Subsidiaries

14. Condensed Consolidating Financial Information Provided in Connection with Outstanding Debt of Subsidiaries

The following tables present condensed consolidating balance sheets at September 30, 2019 and December 31, 2018, condensed consolidating statements of operations and condensed consolidating statements of comprehensive income for the quarters and nine months ended September 30, 2019 and 2018, and condensed consolidating statements of cash flows for the nine months ended September 30, 2019 and 2018.  Global Indemnity Group, Inc. (“GIGI”) is a 100% owned subsidiary of the Company.  See Note 11 of the notes to the consolidated financial statements in Item 8 Part II of the Company’s 2018 Annual Report on Form 10-K for information on the Company’s debt obligations.

Condensed Consolidating Balance Sheets at September 30, 2019 (Dollars in thousands)	Global Indemnity Limited (Parent co- obligor)		Global Indemnity Group, Inc. (Subsidiary co-obligor)			Other Global Indemnity Limited Subsidiaries and Eliminations (non-co-obligor subsidiaries) (1)			Consolidating Adjustments (2)			Global Indemnity Limited Consolidated
ASSETS
Total investments	$	47,732	$	255,817		$	1,233,305		$	—		$	1,536,854
Cash and cash equivalents		3,604		22,966			51,611			—			78,181
Investments in subsidiaries		1,195,308		335,425			15,264			(1,545,997	)		—
Due from subsidiaries and affiliates		314		(24,170	)		23,856			—			—
Notes receivable – affiliate		—		80,049			847,808			(927,857	)		—
Interest receivable – affiliate		—		4,731			17,258			(21,989	)		—
Premiums receivable, net		—		—			112,992			—			112,992
Reinsurance receivables, net		—		—			83,012			—			83,012
Funds held by ceding insurers		—		—			48,751			—			48,751
Federal income taxes receivable		—		12,461			(1,325	)		—			11,136
Deferred federal income taxes		—		38,847			(2,368	)		—			36,479
Deferred acquisition costs		—		—			70,861			—			70,861
Intangible assets		—		—			21,623			—			21,623
Goodwill		—		—			6,521			—			6,521
Prepaid reinsurance premiums		—		—			17,763			—			17,763
Receivable for securities sold		—		59			(59	)		—			-
Other assets		7,013		14,770			45,255			(7,055	)		59,983
Total assets	$	1,253,971	$	740,955		$	2,592,128		$	(2,502,898	)	$	2,084,156
LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities:
Unpaid losses and loss adjustment expenses	$	—	$	—		$	633,287		$	—		$	633,287
Unearned premiums		—		—			316,797			—			316,797
Ceded balances payable		—		—			36,431			—			36,431
Payable for securities purchased		—		—			848			—			848
Contingent commissions		—		—			10,035			—			10,035
Debt		—		304,379			—			(7,055	)		297,324
Notes payable – affiliates		520,498		402,310			5,049			(927,857	)		—
Accrued interest payable – affiliates		20,131		—			1,858			(21,989	)		—
Other liabilities		5,958		19,002			57,090			—			82,050
Total liabilities		546,587		725,691			1,061,395			(956,901	)		1,376,772
Shareholders’ equity
Total shareholders’ equity		707,384		15,264			1,530,733			(1,545,997	)		707,384
Total liabilities and shareholders’ equity	$	1,253,971	$	740,955		$	2,592,128		$	(2,502,898	)	$	2,084,156

(1) Includes all other subsidiaries of Global Indemnity Limited and eliminations

(2) Includes Parent co-obligor and subsidiary co-obligor consolidating adjustments

Condensed Consolidating Balance Sheets at December 31, 2018 (Dollars in thousands)	Global Indemnity Limited (Parent co-obligor)		Global Indemnity Group, Inc. (Subsidiary co-obligor)			Other Global Indemnity Limited Subsidiaries and Eliminations (non-co-obligor subsidiaries) (1)			Consolidating Adjustments (2)			Global Indemnity Limited Consolidated
ASSETS
Total investments	$	55,377	$	233,479		$	1,121,799		$	—		$	1,410,655
Cash and cash equivalents		2,221		26,039			71,237			—			99,497
Investments in subsidiaries		1,105,032		296,357			(19,922	)		(1,381,467	)		—
Due from subsidiaries and affiliates		584		(2,133	)		1,549			—			—
Notes receivable – affiliate		—		80,049			847,808			(927,857	)		—
Interest receivable – affiliate		—		3,869			17,425			(21,294	)		—
Premiums receivable, net		—		—			87,679			—			87,679
Reinsurance receivables, net		—		—			114,418			—			114,418
Funds held by ceding insurers		—		—			49,206			—			49,206
Federal income taxes receivable		—		4,631			6,235			—			10,866
Deferred federal income taxes		—		44,481			4,108			—			48,589
Deferred acquisition costs		—		—			61,676			—			61,676
Intangible assets		—		—			22,020			—			22,020
Goodwill		—		—			6,521			—			6,521
Prepaid reinsurance premiums		—		—			20,594			—			20,594
Receivable for securities sold		—		—			15			—			15
Other assets		8,461		5,085			22,237			(7,253	)		28,530
Total assets	$	1,171,675	$	691,857		$	2,434,605		$	(2,337,871	)	$	1,960,266
LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities:
Unpaid losses and loss adjustment expenses	$	—	$	—		$	680,031		$	—		$	680,031
Unearned premiums		—		—			281,912			—			281,912
Ceded balances payable		—		—			14,994			—			14,994
Contingent commissions		—		—			10,636			—			10,636
Debt		—		295,818			—			(7,253	)		288,565
Notes payable – affiliates		520,498		402,310			5,049			(927,857	)		—
Accrued interest payable – affiliates		19,499		—			1,795			(21,294	)		—
Other liabilities		2,619		13,651			38,799			—			55,069
Total liabilities		542,616		711,779			1,033,216			(956,404	)		1,331,207
Shareholders’ equity
Total shareholders’ equity		629,059		(19,922	)		1,401,389			(1,381,467	)		629,059
Total liabilities and shareholders’ equity	$	1,171,675	$	691,857		$	2,434,605		$	(2,337,871	)	$	1,960,266

(1) Includes all other subsidiaries of Global Indemnity Limited and eliminations

(2) Includes Parent co-obligor and subsidiary co-obligor consolidating adjustments

Condensed Consolidating Statements of Operations for the Quarter Ended September 30, 2019 (Dollars in thousands)	Global Indemnity Limited (Parent co-obligor)			Global Indemnity Group, Inc. (Subsidiary co-obligor)			Other Global Indemnity Limited Subsidiaries and Eliminations (non-co-obligor subsidiaries) (1)			Consolidating Adjustments (2)			Global Indemnity Limited Consolidated
Revenues:
Net premiums earned	$	—		$	—		$	133,312		$	—		$	133,312
Net investment income		393			2,798			8,442			(285	)		11,348
Net realized investment gains (losses)		(101	)		(3,525	)		936			—			(2,690	)
Other income		—			—			264			—			264
Total revenues		292			(727	)		142,954			(285	)		142,234
Losses and Expenses:
Net losses and loss adjustment expenses		—			—			73,583			—			73,583
Acquisition costs and other underwriting expenses		—			—			53,366			—			53,366
Corporate and other operating expenses		1,320			2,159			379			—			3,858
Interest expense		278			4,957			73			(285	)		5,023
Income (loss) before equity in net income (loss) of subsidiaries and income taxes		(1,306	)		(7,843	)		15,553			—			6,404
Equity in net income (loss) of subsidiaries		8,027			1,699			(4,462	)		(5,264	)		—
Income (loss) before income taxes		6,721			(6,144	)		11,091			(5,264	)		6,404
Income tax expense (benefit)		—			(1,682	)		1,365			—			(317	)
Net income (loss)	$	6,721		$	(4,462	)	$	9,726		$	(5,264	)	$	6,721

(1) Includes all other subsidiaries of Global Indemnity Limited and eliminations

(2) Includes Parent co-obligor and subsidiary co-obligor consolidating adjustments

Condensed Consolidating Statements of Operations for the Quarter Ended September 30, 2018 (Dollars in thousands)	Global Indemnity Limited (Parent co-obligor)			Global Indemnity Group, Inc. (Subsidiary co-obligor)			Other Global Indemnity Limited Subsidiaries and Eliminations (non-co-obligor subsidiaries) (1)			Consolidating Adjustments (2)			Global Indemnity Limited Consolidated
Revenues:
Net premiums earned	$	—		$	—		$	120,528		$	—		$	120,528
Net investment income		146			2,492			18,318			(9,206	)		11,750
Net realized investment gains (losses)		(101	)		5,321			99			—			5,319
Other income (loss)		—			(12	)		423			—			411
Total revenues		45			7,801			139,368			(9,206	)		138,008
Losses and Expenses:
Net losses and loss adjustment expenses		—			—			80,493			—			80,493
Acquisition costs and other underwriting expenses		—			—			48,680			—			48,680
Corporate and other operating expenses		982			2,089			404			—			3,475
Interest expense		2,017			12,035			78			(9,206	)		4,924
Income (loss) before equity in net income (loss) of subsidiaries and income taxes		(2,954	)		(6,323	)		9,713			-			436
Equity in net income (loss) of subsidiaries		6,682			(3,995	)		(8,434	)		5,747			—
Income (loss) before income taxes		3,728			(10,318	)		1,279			5,747			436
Income tax benefit		—			(1,884	)		(1,408	)		—			(3,292	)
Net Income (loss)	$	3,728		$	(8,434	)	$	2,687		$	5,747		$	3,728

(1) Includes all other subsidiaries of Global Indemnity Limited and eliminations

(2) Includes Parent co-obligor and subsidiary co-obligor consolidating adjustments

Condensed Consolidating Statements of Operations for the Nine Months Ended September 30, 2019 (Dollars in thousands)	Global Indemnity Limited (Parent co-obligor)			Global Indemnity Group, Inc. (Subsidiary co-obligor)			Other Global Indemnity Limited Subsidiaries and Eliminations (non-co-obligor subsidiaries) (1)		Consolidating Adjustments (2)			Global Indemnity Limited Consolidated
Revenues:
Net premiums earned	$	—		$	—		$	383,602	$	—		$	383,602
Net investment income		1,764			5,743			25,747		(861	)		32,393
Net realized investment gains		298			7,969			3,023		—			11,290
Other income		—			30			1,244		—			1,274
Total revenues		2,062			13,742			413,616		(861	)		428,559
Losses and Expenses:
Net losses and loss adjustment expenses		—			—			201,979		—			201,979
Acquisition costs and other underwriting expenses		—			—			153,643		—			153,643
Corporate and other operating expenses		4,306			6,406			990		—			11,702
Interest expense		829			14,875			245		(861	)		15,088
Income (loss) before equity in net income of subsidiaries and income taxes		(3,073	)		(7,539	)		56,759		—			46,147
Equity in net income of subsidiaries		44,057			16,597			10,903		(71,557	)		—
Income before income taxes		40,984			9,058			67,662		(71,557	)		46,147
Income tax expense (benefit)		—			(1,845	)		7,008		—			5,163
Net income	$	40,984		$	10,903		$	60,654	$	(71,557	)	$	40,984

(1) Includes all other subsidiaries of Global Indemnity Limited and eliminations

(2) Includes Parent co-obligor and subsidiary co-obligor consolidating adjustments

Condensed Consolidating Statements of Operations for the Nine Months Ended September 30, 2018 (Dollars in thousands)	Global Indemnity Limited (Parent co-obligor)			Global Indemnity Group, Inc. (Subsidiary co-obligor)			Other Global Indemnity Limited Subsidiaries and Eliminations (non-co-obligor subsidiaries) (1)			Consolidating Adjustments (2)			Global Indemnity Limited Consolidated
Revenues:
Net premiums earned	$	—		$	—		$	342,447		$	—		$	342,447
Net investment income		483			8,404			58,258			(33,037	)		34,108
Net realized investment gains (losses)		(121	)		8,167			(213	)		—			7,833
Other income		—			—			1,289			—			1,289
Total revenues		362			16,571			401,781			(33,037	)		385,677
Losses and Expenses:
Net losses and loss adjustment expenses		—			—			195,426			—			195,426
Acquisition costs and other underwriting expenses		—			—			141,196			—			141,196
Corporate and other operating expenses		9,959			12,734			960			—			23,653
Interest expense		12,715			34,773			274			(33,037	)		14,725
Income (loss) before equity in net income (loss) of subsidiaries and income taxes		(22,312	)		(30,936	)		63,925			—			10,677
Equity in net income (loss) of subsidiaries		38,933			6,770			(21,335	)		(24,368	)		—
Income (loss) before income taxes		16,621			(24,166	)		42,590			(24,368	)		10,677
Income tax expense (benefit)		—			(2,831	)		(3,226	)		113			(5,944	)
Net income (loss)	$	16,621		$	(21,335	)	$	45,816		$	(24,481	)	$	16,621

(1) Includes all other subsidiaries of Global Indemnity Limited and eliminations

(2) Includes Parent co-obligor and subsidiary co-obligor consolidating adjustments

Condensed Consolidating Statements of Comprehensive Income for the Quarter Ended September 30, 2019 (Dollars in thousands)	Global Indemnity Limited (Parent co-obligor)		Global Indemnity Group, Inc. (Subsidiary co-obligor)			Other Global Indemnity Limited Subsidiaries and Eliminations (non-co-obligor subsidiaries) (1)			Consolidating Adjustments (2)			Global Indemnity Limited Consolidated
Net income	$	6,721	$	(4,462	)	$	9,726		$	(5,264	)	$	6,721
Other comprehensive income, net of tax:
Unrealized holding gains (losses)		—		—			9,421			—			9,421
Equity in other comprehensive income of unconsolidated subsidiaries		8,772		4,711			4,703			(18,186	)		—
Portion of other-than-temporary impairment losses recognized in other comprehensive income		—		—			(2	)		—			(2	)
Reclassification adjustment for gains included in net income		—		(8	)		(839	)		—			(847	)
Unrealized foreign currency translation gains		—		—			200			—			200
Other comprehensive income, net of tax		8,772		4,703			13,483			(18,186	)		8,772
Comprehensive income, net of tax	$	15,493	$	241		$	23,209		$	(23,450	)	$	15,493

(1) Includes all other subsidiaries of Global Indemnity Limited and eliminations

(2) Includes Parent co-obligor and subsidiary co-obligor consolidating adjustments

Condensed Consolidating Statements of Comprehensive Income for the Quarter Ended September 30, 2018 (Dollars in thousands)	Global Indemnity Limited (Parent co-obligor)			Global Indemnity Group, Inc. (Subsidiary co-obligor)			Other Global Indemnity Limited Subsidiaries and Eliminations (non-co-obligor subsidiaries) (1)			Consolidating Adjustments (2)		Global Indemnity Limited Consolidated
Net income (loss)	$	3,728		$	(8,434	)	$	2,687		$	5,747	$	3,728
Other comprehensive income (loss), net of tax:
Unrealized holding losses		(63	)		(845	)		(716	)		—		(1,624	)
Equity in other comprehensive loss of unconsolidated subsidiaries		(1,392	)		(603	)		(789	)		2,784		—
Portion of other-than-temporary impairment losses recognized in other comprehensive loss		—			—			7			—		7
Reclassification adjustment for (gains) losses included in net income (loss)		101			659			(43	)		—		717
Unrealized foreign currency translation losses		—			—			(454	)		—		(454	)
Other comprehensive loss, net of tax		(1,354	)		(789	)		(1,995	)		2,784		(1,354	)
Comprehensive income (loss), net of tax	$	2,374		$	(9,223	)	$	692		$	8,531	$	2,374

(1) Includes all other subsidiaries of Global Indemnity Limited and eliminations

(2) Includes Parent co-obligor and subsidiary co-obligor consolidating adjustments

Condensed Consolidating Statements of Comprehensive Income for the Nine Months Ended September 30, 2019 (Dollars in thousands)	Global Indemnity Limited (Parent co-obligor)			Global Indemnity Group, Inc. (Subsidiary co-obligor)		Other Global Indemnity Limited Subsidiaries and Eliminations (non-co-obligor subsidiaries) (1)			Consolidating Adjustments (2)			Global Indemnity Limited Consolidated
Net income	$	40,984		$	10,903	$	60,654		$	(71,557	)	$	40,984
Other comprehensive income, net of tax:		—			—		—			—
Unrealized holding gains		880			1,567		46,436			—			48,883
Equity in other comprehensive income (loss) of unconsolidated subsidiaries		46,226			24,201		26,003			(96,430	)		—
Portion of other-than-temporary impairment losses recognized in other comprehensive income		—			—		(4	)		—			(4	)
Reclassification adjustment for (gains) losses included in net income		(561	)		235		(2,339	)		—			(2,665	)
Unrealized foreign currency translation gains		—			—		331			—			331
Other comprehensive income, net of tax		46,545			26,003		70,427			(96,430	)		46,545
Comprehensive income, net of tax	$	87,529		$	36,906	$	131,081		$	(167,987	)	$	87,529

(1) Includes all other subsidiaries of Global Indemnity Limited and eliminations

(2) Includes Parent co-obligor and subsidiary co-obligor consolidating adjustments

Condensed Consolidating Statements of Comprehensive Income for the Nine Months Ended September 30, 2018 (Dollars in thousands)	Global Indemnity Limited (Parent co-obligor)			Global Indemnity Group, Inc. (Subsidiary co-obligor)			Other Global Indemnity Limited Subsidiaries and Eliminations (non-co-obligor subsidiaries) (1)			Consolidating Adjustments (2)			Global Indemnity Limited Consolidated
Net income (loss)	$	16,621		$	(21,335	)	$	45,816		$	(24,481	)	$	16,621
Other comprehensive loss, net of tax:
Unrealized holding losses		(210	)		(2,930	)		(19,492	)		—			(22,632	)
Equity in other comprehensive loss of unconsolidated subsidiaries		(22,695	)		(9,633	)		(11,515	)		43,843			—
Portion of other-than-temporary impairment losses recognized in other comprehensive losses		—			—			(1	)		—			(1	)
Reclassification adjustment for losses included in net income (loss)		121			1,048			234			—			1,403
Unrealized foreign currency translation losses		—			—			(1,554	)		—			(1,554	)
Other comprehensive loss, net of tax		(22,784	)		(11,515	)		(32,328	)		43,843			(22,784	)
Comprehensive income (loss), net of tax	$	(6,163	)	$	(32,850	)	$	13,488		$	19,362		$	(6,163	)

(1) Includes all other subsidiaries of Global Indemnity Limited and eliminations

(2) Includes Parent co-obligor and subsidiary co-obligor consolidating adjustments

Condensed Consolidating  Statements of Cash Flows at September 30, 2019  (Dollars in thousands)	Global Indemnity Limited (Parent co-obligor)			Global Indemnity Group, Inc. (Subsidiary co-obligor)			Other Global Indemnity Limited Subsidiaries and Eliminations (non-co-obligor subsidiaries) (1)			Global Indemnity Limited Consolidated
Cash flows from operating activities:
Net cash provided by operating activities	$	1,718		$	2,593		$	41,619		$	45,930
Cash flows from investing activities:
Proceeds from sale of fixed maturities		48,393			101,525			492,131			642,049
Proceeds from sale of equity securities		7,300			198,912			—			206,212
Proceeds from maturity of fixed maturities		—			—			113,480			113,480
Proceeds from other invested assets		3,161			11,040			—			14,201
Amounts paid in connection with derivatives		—			(12,516	)		—			(12,516	)
Purchases of fixed maturities		(10,548	)		(24,280	)		(666,856	)		(701,684	)
Purchases of equity securities		(40,564	)		(285,408	)		—			(325,972	)
Purchases of other invested assets		—			(3,500	)		—			(3,500	)
Net cash provided by (used for) investing activities		7,742			(14,227	)		(61,245	)		(67,730	)
Cash flows from financing activities:
Net borrowings under margin borrowing facility		—			8,561			—			8,561
Dividends paid to shareholders		(7,130	)		—			—			(7,130	)
Purchase of A ordinary shares		(947	)		—			—			(947	)
Net cash provided by (used for) financing activities		(8,077	)		8,561			—			484
Net change in cash and cash equivalents		1,383			(3,073	)		(19,626	)		(21,316	)
Cash and cash equivalents at beginning of period		2,221			26,039			71,237			99,497
Cash and cash equivalents at end of period	$	3,604		$	22,966		$	51,611		$	78,181

(1) Includes all other subsidiaries of Global Indemnity Limited and eliminations

Condensed Consolidating  Statements of Cash Flows at September 30, 2018  (Dollars in thousands)	Global Indemnity Limited (Parent co-obligor)			Global Indemnity Group, Inc. (Subsidiary co-obligor)			Other Global Indemnity Limited Subsidiaries and Eliminations (non-co-obligor subsidiaries) (1)			Global Indemnity Limited Consolidated
Cash flows from operating activities:
Net cash provided by (used for) operating activities	$	(19,280	)	$	(618	)	$	65,769		$	45,871
Cash flows from investing activities:
Proceeds from sale of fixed maturities		28,118			44,760			156,484			229,362
Proceeds from sale of equity securities		—			28,141			—			28,141
Proceeds from maturity of fixed maturities		5,431			7,600			30,272			43,303
Proceeds from other invested assets		—			1,058			7,294			8,352
Amounts received in connection with derivatives		—			7,599			—			7,599
Purchases of fixed maturities		(32,933	)		(39,314	)		(256,755	)		(329,002	)
Purchases of equity securities		—			(22,931	)		—			(22,931	)
Purchases of other invested assets		—			(15,800	)		—			(15,800	)
Acquisition of business		—			(3,515	)		—			(3,515	)
Net cash provided by (used for) investing activities		616			7,598			(62,705	)		(54,491	)
Cash flows from financing activities:
Net repayments under margin borrowing facility		—			(12,825	)		—			(12,825	)
Proceeds / (issuance) of notes to affiliates		230,000			(230,000	)		—			—
Debt restructuring		(230,000	)		230,000			—			—
Dividends paid to shareholders		(10,510	)		—			—			(10,510	)
Dividends from subsidiaries		20,000			—			(20,000	)		—
Purchase of A ordinary shares		(1,813	)		—			—			(1,813	)
Net cash provided by (used for) financing activities		7,677			(12,825	)		(20,000	)		(25,148	)
Net change in cash and cash equivalents		(10,987	)		(5,845	)		(16,936	)		(33,768	)
Cash and cash equivalents at beginning of period		11,089			7,749			55,576			74,414
Cash and cash equivalents at end of period	$	102		$	1,904		$	38,640		$	40,646

(1) Includes all other subsidiaries of Global Indemnity Limited and eliminations