Primus Guaranty, Ltd. Standalone Financial Statements

12 Months Ended

Dec. 31, 2011

Primus Guaranty, Ltd. Standalone Financial Statements [Abstract]

Primus Guaranty, Ltd. Standalone Financial Statements

22. Primus Guaranty, Ltd. — Standalone Financial Statements

Primus Guaranty, Ltd.

Statements of Financial Condition


(in thousands)	December 31,
	2011			2010
Assets
Cash and cash equivalents	$	9,118		$	19,439
Available-for-sale investments		8,412			4,251
Accrued interest receivable		60			57
Prepaid expenses		2			—
Intercompany receivable		356			2,565
Intercompany loans		—			11,541
Debt issuance costs, net		2,579			2,735
Other assets		1			2,603

Total assets	$	20,528		$	43,191

Liabilities and shareholders’ equity
Accounts payable and accrued expenses	$	929		$	340
Long-term debt		88,334			93,028
Intercompany payable		66			1,255
Losses of subsidiaries in excess of investments		76,837			39,705

Total liabilities		166,166			134,328

Common shares		2,787			3,046
Additional paid-in-capital		260,258			275,453
Accumulated other comprehensive income		1,086			3,333
Retained earnings (deficit)		(409,769	)		(372,969	)

Total shareholders’ equity (deficit)		(145,638	)		(91,137	)

Total liabilities and shareholders’ equity	$	20,528		$	43,191

Standalone Financial Statements

Primus Guaranty, Ltd.

Statements of Operations


(in thousands)	Year Ended December 31,
	2011			2010		2009
Revenues
Interest income	$	213		$	993	$	1,001
Intercompany revenue^a		6,953			11,722		—
Intercompany interest income		516			996		984
Gain on retirement of long-term debt		384			1,068		8,174
Other income, net		12			1,455		18

Total revenues		8,078			16,234		10,177

Expenses
Intercompany expenses^b		3,501			6,796		5,239
Share compensation		220			400		317
Interest expense		2,152			2,278		2,974
Professional and legal fees		1,381			3,125		2,820
Other		294			1,146		398

Total expenses		7,548			13,745		11,748

Income (loss) before equity in earnings (loss) of subsidiaries		530			2,489		(1,571	)
Equity in earnings (loss) of subsidiaries, net of tax		(37,330	)		252,985		1,461,851

Net income (loss)	$	(36,800	)	$	255,474	$	1,460,280

(a)	Charges billed to subsidiaries for allocated expenses incurred.

(b)	Charges for services provided by subsidiaries under modified intercompany service agreement.

Standalone Financial Statements

Primus Guaranty, Ltd.

Statements of Cash Flows


(in thousands)	Year Ended December 31,
	2011			2010			2009
Cash flows from operating activities:
Net income (loss)	$	(36,800	)	$	255,474		$	1,460,280
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Share-based compensation		2,929			7,903			4,728
Amortization of debt issuance costs		105			107			113
Net amortization of premium and discount on securities		70			367			131
Change in accumulated comprehensive (income) loss of subsidiaries		(2,152	)		1,076			(236	)
Gain on retirement of long-term debt		(384	)		(1,068	)		(8,173	)
Equity in subsidiaries’ (earnings) loss, net of tax		37,330			(252,985	)		(1,461,851	)
Other		(11	)		—			—
Increase (decrease) in cash resulting from changes in:
Intercompany receivables/payables and loans		12,561			(352	)		(204	)
Accrued interest receivable		(3	)		263			76
Prepaid expenses and other assets		(2	)		2,685			(1,167	)
Accounts payable and accrued expenses		589			108			(213	)

Net cash provided by (used in) operating activities		14,232			13,578			(6,516	)
Cash flows from investing activities:
Purchases of available-for-sale investments		(4,326	)		(7,849	)		(20,566	)
Maturities and sales of available-for-sale investments		—			29,344			17,154
Net return from (investment in) subsidiaries		883			(12,011	)		(3,679	)

Net cash provided by (used in) investing activities		(3,443	)		9,484			(7,091	)
Cash flows from financing activities:
Payments for retirement of long-term debt		(1,646	)		(2,986	)		(6,437	)
Purchase and retirement of common shares		(19,464	)		(13,150	)		(10,352	)

Net cash used in financing activities		(21,110	)		(16,136	)		(16,789	)
Net increase (decrease) in cash		(10,321	)		6,926			(30,396	)
Cash and cash equivalents at beginning of year		19,439			12,513			42,909

Cash and cash equivalents at end of year	$	9,118		$	19,439		$	12,513

- Definition

The entire disclosure for condensed financial information, including the financial position, cash flows, and the results of operations of the registrant (parent company) as of the same dates or for the same periods for which audited consolidated financial statements are being presented. Alternatively, the details of this disclosure can be reported by the specific parent company taxonomy elements, indicating the appropriate date and period contexts in an instance document.

+ References+ Details

PRIMUS GUARANTY LTD 10-K