Discontinued Operations Chaucer Business

3 Months Ended

Mar. 31, 2019

Discontinued Operations Chaucer Business

3. Discontinued Operations – Chaucer Business

On December 28, 2018, the Company completed the sale of its former subsidiary, Chaucer, to China Re. On February 14, 2019, the Company completed the sale of its Chaucer-related Irish entity for total proceeds of $28 million and on April 10, 2019, finalized the sale of the Australian entities for total proceeds of $13 million, completing the transfer of all Chaucer-related companies. Collectively, these entities constituted the Chaucer business in 2018 and prior, whereas just the Irish and Australian Chaucer-related entities comprised the Chaucer business reported in the Company’s results in 2019, until their respective sales to China Re.

Three months ended March 31, 2019

Revenues from the Chaucer business were $2.9 million during the first quarter of 2019 and operating losses in this business totaled $0.3 million during that period.

Three months ended March 31, 2018

The following table summarizes the results of Chaucer’s operations for the three months ended March 31, 2018:

	Three Months Ended
	March 31,
(in millions)	2018
Revenues
Net premiums earned	$	221.1
Net investment income		16.4
Other income		1.9
		239.4
Losses and operating expenses
Losses and LAE		115.0
Amortization of deferred acquisition costs		69.3
Other expenses		32.2
		216.5
Income from Chaucer business before income taxes and other items (previously presented as Chaucer's operating income)		22.9
Other items:
Interest expense		(1.1	)
Net realized and unrealized investment losses		(0.5	)
Other income		0.2
Income from Chaucer business before income taxes		21.5
Income tax expense		(4.2	)
Income from Chaucer business, net of income taxes	$	17.3

Total assets held-for-sale were $23.6 million at March 31, 2019 and $57.4 million at December 31, 2018. Total liabilities held-for-sale were $12.0 million at March 31, 2019 and $22.2 million at December 31, 2018. Assets and liabilities held-for-sale decreased in the quarter due to the aforementioned sale of the Chaucer-related Irish entity. These balances are reflected in the Consolidated Balance Sheets under the caption “Assets held-for-sale” and “Liabilities held-for-sale”, respectively.

The following table details the cash flows associated with the Chaucer business for the three months ended March 31, 2018:

	Three Months Ended
	March 31,
(in millions)	2018
Net cash used in operating activities	$	(5.9	)
Net cash provided by investing activities	$	47.7