EX-99.3 5 d890863dex993.htm EX-99.3 EX-99.3

Exhibit 99.3

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

The unaudited pro forma condensed combined financial information that follows gives effect to certain pro forma events related to the acquisition of American Reliable. The unaudited pro forma adjustments are based upon currently available information and certain assumptions that the Company believes to be reasonable under the circumstances. The pro forma information does not purport to project the future financial position or operating results of the combined post-acquisition company.

You should read the following unaudited pro forma condensed combined financial information in conjunction with the consolidated financial statements and the accompanying notes of Global Indemnity plc (the “Company” or “Global Indemnity”) for the period ending December 31, 2013 included in Global Indemnity plc’s Annual Report on Form 10-K for the year ended December 31, 2013, and as of and for the period ending September 30, 2014 included in Global Indemnity plc’s Quarterly Report on Form 10-Q for the period ended September 30, 2014, as well as the consolidated financial statements and the accompanying notes of American Reliable Insurance Company (“American Reliable”) as of and for the period ending December 31, 2013 and September 30, 2014, which are included in Exhibit 99.1 and 99.2 of this Amendment No. 1.

The unaudited pro forma condensed combined financial information gives effect to:

 

    The purchase of American Reliable Insurance Company by Global Indemnity Group, Inc., a subsidiary of Global Indemnity plc, for approximately $117.9 million in cash, and the assumption of approximately $322.9 in customary insurance related liabilities, obligations, and mandates, which is subject to adjustment based on United States generally accepted accounting principles (“GAAP”) book value of the business as of the date of the closing of the transaction and the future development of loss reserves as further described in the stock purchase agreement relating to the purchase of American Reliable Insurance Company;

as if transactions were completed as of the date of the balance sheet data or at the beginning of the applicable period in the case of statement of operations data, as applicable. The unaudited pro forma condensed combined financial statement of operations data do not include any projected synergies relating to the transactions.

The ultimate purchase price allocation to acquisition consideration is subject to accounting procedures that are expected to be completed by June 30, 2015. The adjustments that will be recorded as of the completion of those procedures may differ materially from the information presented in these preliminary unaudited pro forma consolidated financial statements.

The Company previously reported on Form 8-K on January 5, 2015 an estimated purchase price of $114.0 million for American Reliable based on historical financial statement information available at that time. The following summarizes the Company’s most recent estimate of the purchase price of American Reliable based on most recent financial statement information available as of December 31, 2014:

 

     As of
12/31/2014
 

Stockholders’ Equity as of December 31, 2014

   $ 120,122   

Less: Purchase Price Adjustment

     (2,262
  

 

 

 

Estimated Purchase Price

$ 117,860   
  

 

 

 

 

1


Global Indemnity plc

Unaudited Pro Forma Condensed Combined Balance Sheet

As of September 30, 2014

(In thousands, except share amounts)

 

     Historical
Global
Indemnity
plc (1)
    Historical
American

Reliable
Insurance
Company
     Pro Forma
Adjustments
    Pro Forma
Combined
Global Indemnity
plc
 
ASSETS          

Fixed maturities:

         

Available for sale, at fair value

   $ 1,308,771      $ 191,688       $ 50,456     (2)    $ 1,550,915   

Equity securities:

         

Available for sale, at fair value

     120,736        14,206         (14,206 )   (2)      120,736   

Other invested assets:

         

Available for sale, at fair value

     21,118        36,250         (36,250 )   (2)      21,118   
  

 

 

   

 

 

    

 

 

   

 

 

 

Total investments

  1,450,625      242,144      —        1,692,769   

Cash and cash equivalents

  66,616      6,333      (2,749 )   (3)    70,200   

Premiums receivable, net

  62,211      28,208      —        90,419   

Reinsurance receivables, net

  178,193      20,652      (5,628 )   (4)    193,217   

Funds held by ceding insurers

  23,762      —        —        23,762   

Federal income tax recoverable

  —        1,134      1,632   (22)    2,766   

Deferred federal income taxes

  16,817      —        334   (22)    17,151   

Deferred acquisition costs

  26,090      21,961      (10,121 )   (5)    37,930   

Intangible assets

  17,725      213      27,500     (6)    45,438   

Goodwill

  4,820      118      2,451     (7)    7,389   

Prepaid reinsurance premiums

  5,464      77,672      (28,922 )   (8)    54,214   

Receivable for securities sold

  —        —        —        —     

Other assets

  27,492      15,127      —        42,619   
  

 

 

   

 

 

    

 

 

   

 

 

 

Total assets

$ 1,879,815    $ 413,562    $ (15,503 $ 2,277,874   
  

 

 

   

 

 

    

 

 

   

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

Liabilities:

Unpaid losses and loss adjustment expenses

$ 739,931    $ 60,080    $ 17,400     (9)  $ 817,411   

Unearned premiums

  127,798      166,472      15,557   (10)    309,827   

Federal income taxes payable

  1,567      —        334   (22)    1,901   

Deferred federal income taxes payable

  —        1,440      1,632   (22)    3,072   

Ceded balances payable

  4,150      5,003      —        9,153   

Contingent commissions

  12,511      3,227      —        15,738   

Payable for Securities

  2,865      —        —        2,865   

Margin borrowing facility

  62,274      —        102,000   (11)    164,274   

Funds held under reinsurance treaties

  —        44,509      (44,509 ) (12)    —     

Other liabilities

  30,624      24,914      —        55,538   
  

 

 

   

 

 

    

 

 

   

 

 

 

Total liabilities

  981,720      305,645      92,414      1,379,779   
  

 

 

   

 

 

    

 

 

   

 

 

 

Commitments and contingencies

  —        —        —        —     

Shareholders’ equity:

Ordinary shares

  3      4,200      (4,200 ) (13)    3   

Additional paid-in capital

  518,889      90,145      (90,145 ) (13)    518,889   

Accumulated other comprehensive income, net of taxes

  24,954      8,942      (8,942 ) (13)    24,954   

Retained earnings

  455,653      4,630      (4,630 ) (13)    455,653   

A ordinary shares in treasury

  (101,404   —        —        (101,404
  

 

 

   

 

 

    

 

 

   

 

 

 

Total shareholders’ equity

  898,095      107,917      (107,917   898,095   
  

 

 

   

 

 

    

 

 

   

 

 

 

Total liabilities and shareholders’ equity

$ 1,879,815    $ 413,562    $ (15,503 $ 2,277,874   
  

 

 

   

 

 

    

 

 

   

 

 

 

 

2


Global Indemnity plc

Unaudited Pro Forma Condensed Combined Statement of Operations

For the Nine Months Ended September 30, 2014

(In thousands, except shares and per share data)

 

     Historical
Global Indemnity
plc (1)
    Historical
American

Reliable
Insurance
Company
     Pro Forma
Adjustments
    Pro Forma
Combined
Global
Indemnity plc
 

Revenues:

         

Gross premiums written

   $ 227,200      $ 242,075       $ 18,000   (14)    $ 487,275   
  

 

 

   

 

 

    

 

 

   

 

 

 

Net premiums written

$ 212,495    $ 131,005    $ 61,631   (15)  $ 405,131   
  

 

 

   

 

 

    

 

 

   

 

 

 

Net premiums earned

$ 201,589    $ 127,249    $ 59,556   (16)  $ 388,394   

Net investment income

  22,488      7,209      (1,276 ) (17)    28,421   

Net realized investment gains:

Other than temporary impairment losses on investments

  (68   —        —        (68

Other net realized investment gains

  40,294      448      —        40,742   
  

 

 

   

 

 

    

 

 

   

 

 

 

Total net realized investment gains

  40,226      448      —        40,674   

Other income

  449      1,075      115   (18)    1,639   
  

 

 

   

 

 

    

 

 

   

 

 

 

Total revenues

  264,752      135,981      58,395      459,128   

Losses and Expenses:

Net losses and loss adjustment expenses

  113,496      73,661      35,694   (19)    222,851   

Acquisition costs and other underwriting expenses

  81,114      55,448      13,792   (20)    150,354   

Corporate and other operating expenses

  9,614      —        —        9,614   

Interest expense

  628      —        765   (21)    1,393   
  

 

 

   

 

 

    

 

 

   

 

 

 

Income before income taxes

  59,900      6,872      8,144      74,916   

Income tax expense

  8,108      2,242      1,257   (22)    11,607   
  

 

 

   

 

 

    

 

 

   

 

 

 

Net income

$ 51,792    $ 4,630    $ 6,887    $ 63,309   
  

 

 

   

 

 

    

 

 

   

 

 

 

Per share data:

Net income

Basic

$ 2.06    $ 0.18    $ 0.28    $ 2.52   
  

 

 

   

 

 

    

 

 

   

 

 

 

Diluted

$ 2.05    $ 0.18    $ 0.27    $ 2.50   
  

 

 

   

 

 

    

 

 

   

 

 

 

Weighted-average number of shares outstanding

Basic

  25,126,684      —        —        25,126,684   
  

 

 

   

 

 

    

 

 

   

 

 

 

Diluted

  25,323,187      —        —        25,323,187   
  

 

 

   

 

 

    

 

 

   

 

 

 

 

3


Global Indemnity plc

Unaudited Pro Forma Condensed Combined Statement of Operations

For the Year Ended December 31, 2013

(In thousands, except shares and per share data)

 

          Historical
Global
Indemnity plc (1)
    Historical
American

Reliable
Insurance
Company
     Pro Forma
Adjustments
    Pro Forma
Combined
Global Indemnity
plc
 

Revenues:

            

Gross premiums written

      $ 290,723      $ 348,416       $ 23,000   (14)    $ 662,139   
     

 

 

   

 

 

    

 

 

   

 

 

 

Net premiums written

$ 271,984    $ 170,893    $ 79,107   (15)  $ 521,984   
     

 

 

   

 

 

    

 

 

   

 

 

 

Net premiums earned

$ 248,722    $ 171,166    $ 78,734   (16)  $ 498,622   

Net investment income

  37,209      9,866      (1,316 ) (17)    45,759   

Net realized investment gains:

Other than temporary impairment losses on investments

  (1,239   —        —        (1,239

Other than temporary impairment losses on investments recognized in other comprehensive income

  —        —        —        —     

Other net realized investment gains

  28,651      720      —        29,371   
     

 

 

   

 

 

    

 

 

   

 

 

 

Total net realized investment gains

  27,412      720      —        28,132   

Other income

  5,791      1,458      142   (18)    7,391   
     

 

 

   

 

 

    

 

 

   

 

 

 

Total revenues

  319,134      183,210      77,560      579,904   

Losses and Expenses:

Net losses and loss adjustment expenses

  132,991      97,224      43,276   (19)    273,491   

Acquisition costs and other underwriting expenses

  105,651      72,773      19,220   (20)    197,644   

Corporate and other operating expenses

  11,614      —        —        11,614   

Interest expense

  6,169      —        1,020   (21)    7,189   
     

 

 

   

 

 

    

 

 

   

 

 

 

Income before income taxes

  62,709      13,213      14,044      89,966   

Income tax expense

  1,019      3,905      1,664   (22)    6,588   
     

 

 

   

 

 

    

 

 

   

 

 

 

Net income

$ 61,690    $ 9,308    $ 12,380    $ 83,378   
     

 

 

   

 

 

    

 

 

   

 

 

 

Per share data:

Net income

Basic

$ 2.46    $ 0.37    $ 0.50    $ 3.33   
     

 

 

   

 

 

    

 

 

   

 

 

 

Diluted

$ 2.45    $ 0.37    $ 0.49    $ 3.31   
     

 

 

   

 

 

    

 

 

   

 

 

 

Weighted-average number of shares outstanding

Basic

  25,072,712      —        —        25,072,712   
     

 

 

   

 

 

    

 

 

   

 

 

 

Diluted

  25,174,015      —        —        25,174,015   
     

 

 

   

 

 

    

 

 

   

 

 

 

 

4


NOTES TO UNAUDITED PRO FORMA

CONDENSED COMBINED FINANCIAL INFORMATION

Global Indemnity Group, Inc., an indirect wholly owned subsidiary of Global Indemnity, acquired American Reliable Insurance Company (“American Reliable”) on January 1, 2015. In connection with the acquisition of American Reliable, an allocation of the purchase price was made to the estimated fair value of assets acquired and liabilities acquired.

The unaudited pro forma condensed combined balance sheet as of September 30, 2014 reflects amounts contained in the unaudited balance sheets of Global Indemnity plc and American Reliable as of that date. The following adjustments have been reflected in the unaudited pro forma condensed combined balance sheet as if the acquisition of American Reliable occurred as of the date of the balance sheet.

The unaudited pro forma condensed combined statement of operations for the year ended December 31, 2013 reflects amounts contained in the combined statements of operations of Global Indemnity for the year ended December 31, 2013 and the audited statements of operations of American Reliable for the year ended December 31, 2013. The unaudited pro forma condensed consolidated statement of operations for the nine months ended September 30, 2014 reflects amounts contained in the unaudited statements of operations of Global Indemnity and American Reliable for that period. The following adjustments have been reflected in the unaudited pro forma condensed combined statements of operations as if the acquisition of American Reliable occurred at the beginning of the earliest period presented.

(1) For a discussion of certain factors that affected the historical results of operations of Global Indemnity for the year ended December 31, 2013 , see “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Global Indemnity’s Annual Report on Form 10-K for the year ended December 31, 2013. For a discussion of certain factors that affected the historical results of operations of Global Indemnity for the nine months ended September 30, 2014 , see “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Global Indemnity’s Report on Form 10-Q for the nine months ended September 30, 2014.

(2) Adjustment to reflect sale of equity securities and other invested assets by American Reliable to Assurant in exchange for fixed-maturities available for sale as a result of restructuring transaction in the 4th quarter of 2014.

(3) Adjustment of $2.7 million to consists of the following:

 

    Pro Forma Amount
(dollars in thousands)
 

Margin borrowing resulting in additional debt

  $ 102,000   

Reinsurance restructuring transactions:

 

New assumed reinsurance agreement for agriculture business between American Reliable Insurance Company and American Bankers Insurance Company effective December 1, 2014

  $ 27,446   

Termination of Quota Share agreement between American Reliable Insurance Company and Bankers Atlantic Reinsurance Company effective January 1, 2015

    (14,173

New ceded reinsurance agreement for various lines of business between American Reliable Insurance Company and American Bankers Insurance Company effective December 1, 2014

    (5,107
 

 

 

 
$ 8,166   

Purchase of American Reliable (a)

  (117,860

Adjustment in purchase price of American Reliable between 9/30/2014 and 12/31/2014 (a)

  4,945   
 

 

 

 
$ (2,749
 

 

 

 

 

(a) A summary of the estimated purchase price of American Reliable as of December 31, 2014 and related change to American Reliable’s stockholders’ equity between September 30, 2014 and December 31, 2014 is as follows:

 

     (Dollars in Thousands)  
     As of
12/31/2014
     As of
9/30/2014
     Difference  

Stockholders’ Equity

   $ 120,122       $ 107,917         —     

Add: Capital Contribution in 4th Quarter of 2014

     —           7,260         —     
  

 

 

    

 

 

    

 

 

 

Adjusted Stockholders Equity

$ 120,122    $ 115,177    $ 4,945   

Less: Purchase Price Adjustment

  (2,262   (2,262   —     
  

 

 

    

 

 

    

 

 

 

Estimated Purchase Price

$ 117,860    $ 112,915    $ 4,945   
  

 

 

    

 

 

    

 

 

 

 

5


NOTES TO UNAUDITED PRO FORMA

CONDENSED COMBINED FINANCIAL INFORMATION – (Continued)

 

(4) Adjustment of $5.6 million relates to consideration on reinsurance restructuring transactions primarily related to transfer unpaid loss and loss adjustment expenses and unearned premiums as follows:

 

    Pro Forma Amount
(dollars in thousands)
 

New assumed reinsurance agreement for agriculture business between American Reliable Insurance Company and American Bankers Insurance Company effective December 1, 2014

  $ 1,857   

Termination of quota share agreement between American Reliable Insurance Company and Bankers Atlantic Reinsurance Company effective January 1, 2015

    (12,575

New ceded reinsurance agreement for various lines of business between American Reliable Insurance Company and American Bankers Insurance Company effective December 1, 2014

    5,090   
 

 

 

 
$ (5,628
 

 

 

 

(5) Adjustment of $10.1 million to deferred acquisition costs consists of the following:

 

    Decrease of $21.9 million to reduce American Reliable’s deferred acquisition costs to fair value

 

    Increase of $11.8 million for termination of a quota share agreement between American Reliable Insurance Company and Bankers Atlantic Reinsurance Company effective January 1, 2015.

(6) Intangible assets of $27.5 million were recognized for the values of agency relationships, trade names, state insurance licenses and software technology. A summary of intangible assets, including estimated useful lives, is as follows:

 

     December 31, 2014  
     Pro Forma Amount      Estimated Useful Life  
     (dollars in thousands)  

Value of Business Acquired

   $ 19,000         1 Year   

State insurance licenses

     5,000         Indefinite   

Software

     2,000         5 years   

Agent Relationships

     900         10 years   

Trade Names

     600         7 years   
  

 

 

    
  27,500   
  

 

 

    

(7) Adjustment to record goodwill of $2.5 million for excess of the cash exchanged for American Reliable’s net assets. A summary of the preliminary purchase price allocation for the merger is as follows:

 

     (dollars in thousands)  

Estimated cash consideration

     117,860   

Less: Estimated fair value of net assets acquired

     115,409   
  

 

 

 

Goodwill

$ 2,451   
  

 

 

 

(8) Adjustment of $28.9 million to prepaid reinsurance premiums relates to termination of quota share agreement between American Reliable Insurance Company and Bankers Atlantic Reinsurance Company effective January 1, 2015.

 

6


NOTES TO UNAUDITED PRO FORMA

CONDENSED COMBINED FINANCIAL INFORMATION – (Continued)

 

(9) Adjustment of $17.4 million to unpaid loss and loss adjustment expenses consists of the following:

 

    Increase of $17.6 million for the related unpaid loss and loss adjustment expenses and unearned premiums on a new assumed reinsurance agreement for agriculture business between American Reliable Insurance Company American Bankers Insurance Company effective December 1, 2014.

 

    Decrease of $0.2 million to adjust loss and loss expenses to fair value using a discount rate of 0.2% for the risk free rates for the period that is equivalent to the duration of the reserves. No risk adjustment was considered necessary in determining fair value of unpaid losses and loss adjustment expenses based on preliminary analysis. The results of the reserve studies have not progressed to as stage to supply sufficient information to make a definitive allocation of acquisition consideration.

 

    The adjustments that will be recorded based upon completion of the reserve studies may differ materially from the information presented in these preliminary unaudited pro forma consolidated financial statements. American Bankers Insurance Company has agreed to indemnify Global Indemnity Group, Inc. to the extent that actual loss and loss adjustment expenses incurred exceed recorded unpaid loss and loss adjustment expense reserves of December 31, 2014. Global Indemnity Group, Inc. has agreed to indemnify American Bankers Insurance Company to the extent that loss and loss adjustment expenses incurred are lower than recorded unpaid loss and loss adjustment expense reserves as of December 31, 2014.

(10) Adjustment of $15.6 million to unearned premiums relates to new assumed reinsurance agreement for agriculture business between American Reliable Insurance Company and American Bankers Insurance Company effective December 1, 2014.

(11) Adjustment to additional debt obtained for financing of acquisition of American Reliable.

(12) Adjustment of $44.5 million to funds held under reinsurance treaties relates to settlement of funds from termination of quota share agreement between American Reliable Insurance Company and Bankers Atlantic Reinsurance Company effective January 1, 2015.

(13) Adjustment to eliminate American Reliable’s equity.

(14) Adjustment of $18.0 million for the nine months ended September 30, 2014 and $23.0 million for the year ended December 31, 2013 to gross written premium resulting from a reinsurance restructuring transaction of a new assumed reinsurance agreement for agriculture business between American Reliable Insurance Company and American Bankers Insurance Company effective December 1, 2014.

(15) Adjustment of $61.6 million for the nine months ended September 30, 2014 and $79.1 million for the year ended December 31, 2013 to net written premiums resulting from reinsurance restructuring transactions as follows:

 

    Pro Forma Amounts
(Dollars in Thousands)
 
    Nine Months
Ended
9/30/2014
    Twelve Months
Ended
12/31/2013
 

New assumed reinsurance agreement for agriculture business between American Reliable Insurance Company and American Bankers Insurance Company effective December 1, 2014

  $ 17,963      $ 22,143   

Termination of quota share agreement between American Reliable Insurance Company and Bankers Atlantic Reinsurance Company effective January 1, 2015

    43,668        56,964   
 

 

 

   

 

 

 
$ 61,631    $ 79,107   
 

 

 

   

 

 

 

 

7


NOTES TO UNAUDITED PRO FORMA

CONDENSED COMBINED FINANCIAL INFORMATION – (Continued)

 

(16) Adjustment of $59.6 million for the nine months ended September 30, 2014 and $78.7 million for the year ended December 31, 2013 to net earned premiums resulting from reinsurance restructuring transactions as follows:

 

    Pro Forma Amounts
(Dollars in Thousands)
 
    Nine Months
Ended
9/30/2014
    Twelve Months
Ended
12/31/2013
 

New assumed reinsurance agreement for agriculture business between American Reliable Insurance Company and American Bankers Insurance Company effective December 1, 2014

  $ 17,140      $ 21,679   

Termination of quota share agreement between American Reliable Insurance Company and Bankers Atlantic Reinsurance Company effective January 1, 2015

    42,416        57,055   
 

 

 

   

 

 

 
$ 59,556    $ 78,734   
 

 

 

   

 

 

 

(17) Net investment income adjusted for the following:

 

    Decrease of $2.1 million for the nine months ended September 30, 2014 and $2.9 million for the year ended December 31, 2013 resulting from an increase of $11.4 million of the cost basis of fixed maturities, available for sale, based on the fair value of investments at December 31, 2014;

 

    Increase of $0.9 million for the nine months ended September 30, 2014 and $1.5 million for the year ended December 31, 2013 resulting from reinsurance restructuring transactions as follows:

 

    Pro Forma Amounts
(Dollars in Thousands)
 
    Nine Months
Ended
9/30/2014
    Twelve Months
Ended
12/31/2013
 

New assumed reinsurance agreement for agriculture business between American Reliable Insurance Company and American Bankers Insurance Company effective December 1, 2014

  $ 600      $ 1,000   

Termination of quota share agreement between American Reliable Insurance Company and Bankers Atlantic Reinsurance Company effective January 1, 2015

    262        534   
 

 

 

   

 

 

 
$ 862    $ 1,534   
 

 

 

   

 

 

 

(18) Adjustment of $0.1 million for the nine months ended September 30, 2014 and for the year ended December 31, 2013 resulting from a reinsurance restructuring transaction of a new assumed reinsurance agreement for agriculture business between American Reliable Insurance Company and American Bankers Insurance Company effective December 1, 2014.

(19) Adjustment of $35.7 million for the nine months ended September 30, 2014 and $43.3 million for the year ended December 31, 2013 to unpaid losses and loss adjustment expenses resulting from reinsurance restructuring transactions as follows:

 

    Pro Forma Amounts
(Dollars in Thousands)
 
    Nine Months
Ended
9/30/2014
    Twelve Months
Ended
12/31/2013
 

New assumed reinsurance agreement for agriculture business between American Reliable Insurance Company and American Bankers Insurance Company effective December 1, 2014

  $ 11,140      $ 10,868   

Termination of quota share agreement between American Reliable Insurance Company and Bankers Atlantic Reinsurance Company effective January 1, 2015

    24,554        32,408   
 

 

 

   

 

 

 
$ 35,694    $ 43,276   
 

 

 

   

 

 

 

 

8


NOTES TO UNAUDITED PRO FORMA

CONDENSED COMBINED FINANCIAL INFORMATION – (Continued)

 

(20) Adjustment of $13.8 million for the nine months ended September 30, 2014 and $19.2 million for the twelve months ended December 31, 2013 for the following:

 

     Pro Forma Amounts
(Dollars in Thousands)
 
     Nine Months
Ended
9/30/2014
     Twelve Months
Ended
12/31/2013
 

Reinsurance Restructuring:

     

Commissions on new assumed reinsurance agreement for agriculture business between American Reliable Insurance Company and American Bankers Insurance Company effective December 1, 2014

   $ 4,285       $ 5,420   

Commissions on termination of quota share agreement between American Reliable Insurance Company and Bankers Atlantic Reinsurance Company effective January 1, 2015

     16,967         22,822   

Excise tax on new intercompany quota share reinsurance treaty with Global Indemnity Reinsurance Company, Ltd.

     934         1,250   
  

 

 

    

 

 

 
$ 22,186    $ 29,492   

Impact of amortization of fair value adjustments to assets acquired (a)

  (5,218   (6,957

Personnel costs transitioned from American Reliable to American Bankers Insurance Company in the 4th quarter of 2014

  (3,176   (3,315
  

 

 

    

 

 

 
$ 13,792    $ 19,220   
  

 

 

    

 

 

 

 

(a) Includes one-time reductions of $4.5 million for the nine months ended September 30, 2014 and $6.0 million for the year ended December 31, 2013 that will not reoccur.

(21) Adjustment of $0.8 million for the nine months ended September 30, 2014 and $1.0 million for twelve months ended December 31, 2013 for interest expense on $102.0 million of debt pursuant to the company’s margin borrowing facilities to finance the acquisition of American Reliable at a rate of 1.0%.

(22) Adjustment to income tax expense for the nine months ended September 30, 2014 and the year ended December 31, 2013, deferred income taxes as of September 30, 2014 and federal income tax recoverable as of September 30, 2014 were calculated using the a statutory tax rate of 35%.

 

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