| Senior Unsecured Fixed Rate Notes |
Senior Unsecured Fixed Rate Notes In September 2012, Argo Group (the “Parent Guarantor”), through its subsidiary Argo Group US (the “Subsidiary Issuer”), issued $143,750,000 aggregate principal amount of the Subsidiary Issuer’s 6.5% Senior Notes due September 15, 2042 (the “Notes”). The Notes are unsecured and unsubordinated obligations of the Subsidiary Issuer and rank equally in right of payment with all of the Subsidiary Issuer’s other unsecured and unsubordinated debt. The Notes are guaranteed on a full and unconditional senior unsecured basis by the Parent Guarantor. The Notes may be redeemed, for cash, in whole or in part, on or after September 15, 2017, at the Subsidiary Issuer’s option, at any time and from time to time, prior to maturity at a redemption price equal to 100% of the principal amount of the Notes to be redeemed, plus accrued but unpaid interest on the principal amount being redeemed to, but not including, the redemption date. In accordance with ASU 2015-3, “Simplifying the Presentation of Debt Issuance Costs” (Topic 835), we present the unamortized debt issuance costs in the balance sheet as a direct deduction from the carrying value of the debt liability. At September 30, 2018 and December 31, 2017, the Notes consisted of the following: | | | | | | | | | | (in millions) | | September 30, 2018 | | December 31, 2017 | Senior unsecured fixed rate notes | | | | | Principal | | $ | 143.8 |
| | $ | 143.8 |
| Less: unamortized debt issuance costs | | (4.0 | ) | | (4.2 | ) | Senior unsecured fixed rate notes, less unamortized debt issuance costs | | $ | 139.8 |
| | $ | 139.6 |
|
In accordance with Article 10 of SEC Regulation S-X, we have elected to present condensed consolidating financial information in lieu of separate financial statements for the Subsidiary Issuer. The following tables present condensed consolidating financial information at September 30, 2018 and December 31, 2017 and for the three and nine months ended September 30, 2018 and 2017, of the Parent Guarantor and the Subsidiary Issuer. The Subsidiary Issuer is an indirect wholly-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 certain of the debt of the Subsidiary Issuer. Condensed consolidating financial information of the Subsidiary Issuer is presented on a consolidated basis and consists principally of the net assets, results of operations and cash flows of operating insurance company subsidiaries. CONDENSED CONSOLIDATING BALANCE SHEET SEPTEMBER 30, 2018 (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 | | $ | 0.4 |
| | $ | 3,205.9 |
| | $ | 1,658.4 |
| | $ | — |
| | $ | 4,864.7 |
| Cash | | 1.7 |
| | 34.0 |
| | 82.8 |
| | — |
| | 118.5 |
| Accrued investment income | | — |
| | 18.6 |
| | 7.7 |
| | — |
| | 26.3 |
| Premiums receivable | | — |
| | 239.6 |
| | 469.3 |
| | — |
| | 708.9 |
| Reinsurance recoverables | | — |
| | 1,559.7 |
| | 648.5 |
| | — |
| | 2,208.2 |
| Goodwill and other intangible assets, net | | 42.2 |
| | 124.0 |
| | 105.7 |
| | — |
| | 271.9 |
| Deferred acquisition costs, net | | — |
| | 89.9 |
| | 84.7 |
| | — |
| | 174.6 |
| Ceded unearned premiums | | — |
| | 236.0 |
| | 279.6 |
| | — |
| | 515.6 |
| Other assets | | 8.4 |
| | 193.7 |
| | 188.9 |
| | — |
| | 391.0 |
| Intercompany note receivable | | — |
| | 53.0 |
| | (53.0 | ) | | — |
| | — |
| Investments in subsidiaries | | 1,941.9 |
| | — |
| | — |
| | (1,941.9 | ) | | — |
| Total assets | | $ | 1,994.6 |
| | $ | 5,754.4 |
| | $ | 3,472.6 |
| | $ | (1,941.9 | ) | | $ | 9,279.7 |
| Liabilities and Shareholders' Equity | | | | | | | | | | | Reserves for losses and loss adjustment expenses | | $ | — |
| | $ | 2,645.3 |
| | $ | 1,646.4 |
| | $ | — |
| | $ | 4,291.7 |
| Unearned premiums | | — |
| | 794.2 |
| | 593.3 |
| | — |
| | 1,387.5 |
| Funds held and ceded reinsurance payable, net | | — |
| | 745.2 |
| | 179.0 |
| | — |
| | 924.2 |
| Debt | | 153.4 |
| | 284.7 |
| | 142.5 |
| | — |
| | 580.6 |
| Current income taxes payable, net | | — |
| | 8.9 |
| | (0.8 | ) | | — |
| | 8.1 |
| Deferred tax liabilities, net | | — |
| | 15.5 |
| | (1.5 | ) | | — |
| | 14.0 |
| Accrued underwriting expenses and other liabilities | | 13.1 |
| | 94.6 |
| | 147.8 |
| | — |
| | 255.5 |
| Due to (from) affiliates | | 10.0 |
| | 5.3 |
| | (5.3 | ) | | (10.0 | ) | | — |
| Intercompany note payable | | — |
| | 18.9 |
| | (18.9 | ) | | — |
| | — |
| Total liabilities | | 176.5 |
| | 4,612.6 |
| | 2,682.5 |
| | (10.0 | ) | | 7,461.6 |
| Total shareholders' equity | | 1,818.1 |
| | 1,141.8 |
| | 790.1 |
| | (1,931.9 | ) | | 1,818.1 |
| Total liabilities and shareholders' equity | | $ | 1,994.6 |
| | $ | 5,754.4 |
| | $ | 3,472.6 |
| | $ | (1,941.9 | ) | | $ | 9,279.7 |
|
| | (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 BALANCE SHEET DECEMBER 31, 2017 (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 | | $ | 0.4 |
| | $ | 3,079.0 |
| | $ | 1,663.5 |
| | $ | — |
| | $ | 4,742.9 |
| Cash | | 0.9 |
| | 47.8 |
| | 127.9 |
| | — |
| | 176.6 |
| Accrued investment income | | — |
| | 18.0 |
| | 5.5 |
| | — |
| | 23.5 |
| Premiums receivable | | — |
| | 216.5 |
| | 382.1 |
| | — |
| | 598.6 |
| Reinsurance recoverables | | — |
| | 1,487.3 |
| | 606.0 |
| | — |
| | 2,093.3 |
| Goodwill and other intangible assets, net | | 43.2 |
| | 124.9 |
| | 90.1 |
| | — |
| | 258.2 |
| Current income taxes receivable, net | | — |
| | 2.4 |
| | (1.0 | ) | | — |
| | 1.4 |
| Deferred acquisition costs, net | | — |
| | 80.7 |
| | 79.7 |
| | — |
| | 160.4 |
| Ceded unearned premiums | | — |
| | 198.5 |
| | 201.0 |
| | — |
| | 399.5 |
| Other assets | | 9.2 |
| | 171.5 |
| | 128.9 |
| | — |
| | 309.6 |
| Intercompany note receivable | | — |
| | 50.9 |
| | (50.9 | ) | | — |
| | — |
| Investments in subsidiaries | | 1,940.0 |
| | — |
| | — |
| | (1,940.0 | ) | | — |
| Total assets | | $ | 1,993.7 |
| | $ | 5,477.5 |
| | $ | 3,232.8 |
| | $ | (1,940.0 | ) | | $ | 8,764.0 |
| Liabilities and Shareholders' Equity | | | | | | | | | | | Reserves for losses and loss adjustment expenses | | $ | — |
| | $ | 2,483.9 |
| | $ | 1,717.1 |
| | $ | — |
| | $ | 4,201.0 |
| Unearned premiums | | — |
| | 704.0 |
| | 503.7 |
| | — |
| | 1,207.7 |
| Funds held and ceded reinsurance payable, net | | — |
| | 799.4 |
| | (22.7 | ) | | — |
| | 776.7 |
| Long-term debt | | 153.4 |
| | 284.5 |
| | 142.8 |
| | — |
| | 580.7 |
| Deferred tax liabilities, net | | — |
| | 32.5 |
| | (1.2 | ) | | — |
| | 31.3 |
| Accrued underwriting expenses and other liabilities | | 8.9 |
| | 95.0 |
| | 43.0 |
| | — |
| | 146.9 |
| Due to (from) affiliates | | 11.7 |
| | (0.4 | ) | | 0.4 |
| | (11.7 | ) | | — |
| Total liabilities | | 174.0 |
| | 4,398.9 |
| | 2,383.1 |
| | (11.7 | ) | | 6,944.3 |
| Total shareholders' equity | | 1,819.7 |
| | 1,078.6 |
| | 849.7 |
| | (1,928.3 | ) | | 1,819.7 |
| Total liabilities and shareholders' equity | | $ | 1,993.7 |
| | $ | 5,477.5 |
| | $ | 3,232.8 |
| | $ | (1,940.0 | ) | | $ | 8,764.0 |
|
| | (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 SEPTEMBER 30, 2018 (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 | | $ | — |
| | $ | 222.9 |
| | $ | 224.0 |
| | $ | — |
| | $ | 446.9 |
| Net investment (expense) income | | (0.6 | ) | | 21.1 |
| | 14.0 |
| | — |
| | 34.5 |
| Fee and other income | | — |
| | 2.2 |
| | 1.1 |
| | — |
| | 3.3 |
| Net realized investment (losses) gains | | (0.3 | ) | | 16.2 |
| | (1.7 | ) | | — |
| | 14.2 |
| Total revenue | | (0.9 | ) | | 262.4 |
| | 237.4 |
| | — |
| | 498.9 |
| Expenses: | | | | | | | | | | | Losses and loss adjustment expenses | | — |
| | 136.9 |
| | 140.6 |
| | — |
| | 277.5 |
| Underwriting, acquisition and insurance expenses | | 3.3 |
| | 85.0 |
| | 79.7 |
| | — |
| | 168.0 |
| Interest expense | | 1.6 |
| | 4.6 |
| | 1.7 |
| | — |
| | 7.9 |
| Fee and other expense | | — |
| | 1.2 |
| | 0.7 |
| | — |
| | 1.9 |
| Foreign currency exchange losses (gains) | | — |
| | — |
| | (1.7 | ) | | — |
| | (1.7 | ) | Total expenses | | 4.9 |
| | 227.7 |
| | 221.0 |
| | — |
| | 453.6 |
| (Loss) income before income taxes | | (5.8 | ) | | 34.7 |
| | 16.4 |
| | — |
| | 45.3 |
| Provision for income taxes | | — |
| | 4.7 |
| | — |
| | — |
| | 4.7 |
| Net (loss) income before equity in earnings of subsidiaries | | (5.8 | ) | | 30.0 |
| | 16.4 |
| | — |
| | 40.6 |
| Equity in undistributed earnings of subsidiaries | | 46.4 |
| | — |
| | — |
| | (46.4 | ) | | — |
| Net income | | $ | 40.6 |
| | $ | 30.0 |
| | $ | 16.4 |
| | $ | (46.4 | ) | | $ | 40.6 |
|
| | (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 SEPTEMBER 30, 2017 (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 | | $ | — |
| | $ | 145.3 |
| | $ | 244.0 |
| | $ | — |
| | $ | 389.3 |
| Net investment (expense) income | | (1.1 | ) | | 16.5 |
| | 15.5 |
| | — |
| | 30.9 |
| Fee and other income | | — |
| | 12.3 |
| | 0.7 |
| | — |
| | 13.0 |
| Net realized investment gains (losses) | | — |
| | 6.6 |
| | (0.6 | ) | | — |
| | 6.0 |
| Total revenue | | (1.1 | ) | | 180.7 |
| | 259.6 |
| | — |
| | 439.2 |
| Expenses: | | | | | | | | | | | Losses and loss adjustment expenses | | — |
| | 99.1 |
| | 227.3 |
| | — |
| | 326.4 |
| Underwriting, acquisition and insurance expenses | | 5.6 |
| | 74.0 |
| | 86.5 |
| | — |
| | 166.1 |
| Interest expense | | 1.6 |
| | 4.2 |
| | 1.7 |
| | — |
| | 7.5 |
| Fee and other expense | | — |
| | 4.1 |
| | 0.9 |
| | — |
| | 5.0 |
| Foreign currency exchange (gains) losses | | — |
| | (0.1 | ) | | 0.2 |
| | — |
| | 0.1 |
| Total expenses | | 7.2 |
| | 181.3 |
| | 316.6 |
| | — |
| | 505.1 |
| (Loss) income before income taxes | | (8.3 | ) | | (0.6 | ) | | (57.0 | ) | | — |
| | (65.9 | ) | Provision (benefit) for income taxes | | — |
| | (0.6 | ) | | (4.0 | ) | | — |
| | (4.6 | ) | Net (loss) income before equity in earnings of subsidiaries | | (8.3 | ) | | — |
| | (53.0 | ) | | — |
| | (61.3 | ) | Equity in undistributed earnings of subsidiaries | | (53.0 | ) | | — |
| | — |
| | 53.0 |
| | — |
| Net income | | $ | (61.3 | ) | | $ | — |
| | $ | (53.0 | ) | | $ | 53.0 |
| | $ | (61.3 | ) |
| | (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 STATEMENT OF INCOME FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2018 (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 | | $ | — |
| | $ | 646.8 |
| | $ | 632.5 |
| | $ | — |
| | $ | 1,279.3 |
| Net investment (expense) income | | (2.0 | ) | | 62.2 |
| | 43.5 |
| | — |
| | 103.7 |
| Fee and other income | | — |
| | 3.7 |
| | 3.5 |
| | — |
| | 7.2 |
| Net realized investment (losses) gains | | (0.2 | ) | | 15.3 |
| | (6.1 | ) | | — |
| | 9.0 |
| Total revenue | | (2.2 | ) | | 728.0 |
| | 673.4 |
| | — |
| | 1,399.2 |
| Expenses: | | | | | | | | | | | Losses and loss adjustment expenses | | — |
| | 346.7 |
| | 413.5 |
| | — |
| | 760.2 |
| Underwriting, acquisition and insurance expenses | | 11.5 |
| | 250.2 |
| | 223.3 |
| | — |
| | 485.0 |
| Interest expense | | 4.5 |
| | 13.4 |
| | 5.5 |
| | — |
| | 23.4 |
| Fee and other expense | | — |
| | 3.7 |
| | 1.8 |
| | — |
| | 5.5 |
| Foreign currency exchange losses (gains) | | — |
| | 0.2 |
| | (2.5 | ) | | — |
| | (2.3 | ) | Total expenses | | 16.0 |
| | 614.2 |
| | 641.6 |
| | — |
| | 1,271.8 |
| (Loss) income before income taxes | | (18.2 | ) | | 113.8 |
| | 31.8 |
| | — |
| | 127.4 |
| Provision for income taxes | | — |
| | 17.9 |
| | 2.3 |
| | — |
| | 20.2 |
| Net (loss) income before equity in earnings of subsidiaries | | (18.2 | ) | | 95.9 |
| | 29.5 |
| | — |
| | 107.2 |
| Equity in undistributed earnings of subsidiaries | | 125.4 |
| | — |
| | — |
| | (125.4 | ) | | — |
| Net income | | $ | 107.2 |
| | $ | 95.9 |
| | $ | 29.5 |
| | $ | (125.4 | ) | | $ | 107.2 |
|
| | (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 INCOME FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2017 (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 | | $ | — |
| | $ | 411.7 |
| | $ | 756.1 |
| | $ | — |
| | $ | 1,167.8 |
| Net investment (expense) income | | (3.2 | ) | | 64.7 |
| | 43.5 |
| | — |
| | 105.0 |
| Fee and other income | | — |
| | 18.0 |
| | 2.4 |
| | — |
| | 20.4 |
| Net realized investment gains (losses) | | 0.5 |
| | 25.6 |
| | (1.0 | ) | | — |
| | 25.1 |
| Total revenue | | (2.7 | ) | | 520.0 |
| | 801.0 |
| | — |
| | 1,318.3 |
| Expenses: | | | | | | | | | | | Losses and loss adjustment expenses | | — |
| | 247.7 |
| | 531.8 |
| | — |
| | 779.5 |
| Underwriting, acquisition and insurance expenses | | 17.8 |
| | 190.7 |
| | 265.9 |
| | — |
| | 474.4 |
| Interest expense | | 3.0 |
| | 12.7 |
| | 4.7 |
| | — |
| | 20.4 |
| Fee and other expense | | — |
| | 10.7 |
| | 1.7 |
| | — |
| | 12.4 |
| Foreign currency exchange losses | | — |
| | (0.1 | ) | | 4.1 |
| | — |
| | 4.0 |
| Total expenses | | 20.8 |
| | 461.7 |
| | 808.2 |
| | — |
| | 1,290.7 |
| (Loss) income before income taxes | | (23.5 | ) | | 58.3 |
| | (7.2 | ) | | — |
| | 27.6 |
| Provision (benefit) for income taxes | | — |
| | 13.9 |
| | (7.7 | ) | | — |
| | 6.2 |
| Net (loss) income before equity in earnings of subsidiaries | | (23.5 | ) | | 44.4 |
| | 0.5 |
| | — |
| | 21.4 |
| Equity in undistributed earnings of subsidiaries | | 44.9 |
| | — |
| | — |
| | (44.9 | ) | | — |
| Net income | | $ | 21.4 |
| | $ | 44.4 |
| | $ | 0.5 |
| | $ | (44.9 | ) | | $ | 21.4 |
|
| | (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 NINE MONTHS ENDED SEPTEMBER 30, 2018 (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 | | $ | 57.7 |
| | $ | 151.3 |
| | $ | 22.0 |
| | $ | — |
| | $ | 231.0 |
| Cash flows from investing activities: | | | | | | | | | | | Proceeds from sales of investments | | — |
| | 963.2 |
| | 454.0 |
| | — |
| | 1,417.2 |
| Maturities and mandatory calls of fixed maturity investments | | — |
| | 302.5 |
| | 72.6 |
| | — |
| | 375.1 |
| Purchases of investments | | — |
| | (1,346.8 | ) | | (630.4 | ) | | — |
| | (1,977.2 | ) | Change in short-term investments and foreign regulatory deposits | | — |
| | (65.0 | ) | | 31.2 |
| | — |
| | (33.8 | ) | Settlements of foreign currency exchange forward contracts | | 0.2 |
| | 0.5 |
| | 1.3 |
| | — |
| | 2.0 |
| Cash included in acquisition of Ariscom | | — |
| | — |
| | 15.6 |
| | — |
| | 15.6 |
| Purchases of fixed assets and other, net | | (0.1 | ) | | (38.5 | ) | | 6.4 |
| | — |
| | (32.2 | ) | Cash used in investing activities | | 0.1 |
| | (184.1 | ) | | (49.3 | ) | | — |
| | (233.3 | ) | Cash flows from financing activities: | | | | | | | | | | | Borrowing under the intercompany note | | — |
| | 19.0 |
| | (19.0 | ) | | — |
| | — |
| Activity under stock incentive plans | | 1.0 |
| | — |
| | — |
| | — |
| | 1.0 |
| Repurchase of Company's common shares | | (30.0 | ) | | — |
| | — |
| | — |
| | (30.0 | ) | Payment of cash dividend to common shareholders | | (28.0 | ) | | — |
| | — |
| | — |
| | (28.0 | ) | Cash used in financing activities | | (57.0 | ) | | 19.0 |
| | (19.0 | ) | | — |
| | (57.0 | ) | Effect of exchange rate changes on cash | | — |
| | — |
| | 1.2 |
| | — |
| | 1.2 |
| Change in cash | | 0.8 |
| | (13.8 | ) | | (45.1 | ) | | — |
| | (58.1 | ) | Cash, beginning of year | | 0.9 |
| | 47.8 |
| | 127.9 |
| | — |
| | 176.6 |
| Cash, end of period | | $ | 1.7 |
| | $ | 34.0 |
| | $ | 82.8 |
| | $ | — |
| | $ | 118.5 |
|
| | (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 CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2017 (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 | | $ | 11.8 |
| | $ | 175.3 |
| | $ | 65.3 |
| | $ | — |
| | $ | 252.4 |
| Cash flows from investing activities: | | | | | | | | | | | Proceeds from sales of investments | | — |
| | 652.5 |
| | 625.5 |
| | — |
| | 1,278.0 |
| Maturities and mandatory calls of fixed maturity investments | | — |
| | 350.6 |
| | 142.6 |
| | — |
| | 493.2 |
| Purchases of investments | | — |
| | (1,140.8 | ) | | (919.4 | ) | | — |
| | (2,060.2 | ) | Change in short-term investments and foreign regulatory deposits | | 1.8 |
| | 29.6 |
| | 232.8 |
| | — |
| | 264.2 |
| Settlements of foreign currency exchange forward contracts | | 0.8 |
| | (5.5 | ) | | 4.7 |
| | — |
| | — |
| Acquisition of Maybrooke, net of cash and cash equivalents acquired | | (235.3 | ) | | — |
| | 130.1 |
| | — |
| | (105.2 | ) | Issuance of intercompany note, net | | — |
| | — |
| | (120.0 | ) | | 120.0 |
| | — |
| Purchases of fixed assets and other, net | | (0.1 | ) | | (5.3 | ) | | (30.6 | ) | | — |
| | (36.0 | ) | Cash (used in) provided by investing activities | | (232.8 | ) | | (118.9 | ) | | 65.7 |
| | 120.0 |
| | (166.0 | ) | Cash flows from financing activities: | | | | | | | | | | | Additional long-term borrowings | | 125.0 |
| | — |
| | — |
| | — |
| | 125.0 |
| Borrowing under intercompany note, net | | 120.0 |
| | — |
| | — |
| | (120.0 | ) | | — |
| Activity under stock incentive plans | | 0.9 |
| | — |
| | — |
| | — |
| | 0.9 |
| Repurchase of Company's common shares | | — |
| | (36.6 | ) | | — |
| | — |
| | (36.6 | ) | Payment of cash dividend to common shareholders | | (24.9 | ) | | — |
| | — |
| | — |
| | (24.9 | ) | Cash provided by (used in) financing activities | | 221.0 |
| | (36.6 | ) | | — |
| | (120.0 | ) | | 64.4 |
| Effect of exchange rate changes on cash | | — |
| | — |
| | (1.0 | ) | | — |
| | (1.0 | ) | Change in cash | | — |
| | 19.8 |
| | 130.0 |
| | — |
| | 149.8 |
| Cash, beginning of year | | — |
| | 53.7 |
| | 32.3 |
| | — |
| | 86.0 |
| Cash, end of period | | $ | — |
| | $ | 73.5 |
| | $ | 162.3 |
| | $ | — |
| | $ | 235.8 |
|
| | (1) | Includes all other subsidiaries of Argo Group International Holdings, Ltd. and all intercompany eliminations. |
| | (2) | Includes all Argo Group parent company eliminations. |
|