AXIS CAPITAL HOLDINGS LIMITED

CONDENSED BALANCE SHEETS – PARENT COMPANY

DECEMBER 31, 2015 AND 2014



	2015			2014
	(in thousands)
Assets
Investments in subsidiaries on equity basis	$	5,943,182		$	6,114,436
Cash and cash equivalents	8,098			7,041
Other assets	9,381			2,642
Total assets	$	5,960,661		$	6,124,119

Liabilities
Intercompany payable	$	32,837		$	213,149
Dividends payable	52,237			48,197
Other liabilities	8,705			41,652
Total liabilities	93,779			302,998

Shareholders’ equity
Preferred shares	627,843			627,843
Common shares (2015: 176,240; 2014: 175,478 shares issued and 2015: 96,066; 2014: 99,426 shares outstanding)	2,202			2,191
Additional paid-in capital	2,241,388			2,285,016
Accumulated other comprehensive loss	(188,465		)	(45,574		)
Retained earnings	6,194,353			5,715,504
Treasury shares, at cost (2015: 80,174; 2014: 76,052 shares)	(3,010,439		)	(2,763,859		)
Total shareholders’ equity	5,866,882			5,821,121
Total liabilities and shareholders’ equity	$	5,960,661		$	6,124,119


(1)	AXIS Capital has fully and unconditionally guaranteed all obligations of AXIS Specialty Finance LLC, a 100% owned finance subsidiary, related to the issuance of $500 million aggregate principal amount of 5.875% senior unsecured notes. AXIS Capital’s obligations under this guarantee are unsecured and senior and rank equally with all other senior obligations of AXIS Capital.

(2)

AXIS Capital has fully and unconditionally guaranteed all obligations of AXIS Specialty Finance PLC,, a 100% owned finance subsidiary, related to the issuance of $250 million aggregate principal amount of 2.65% and $250 million aggregate principal amount of 5.15% senior unsecured notes. AXIS Capital's obligations under this guarantee are unsecured and senior and rank equally with all other senior obligations of AXIS Capital.


(3)	AXIS Capital has fully and unconditionally guaranteed the obligations of AXIS Specialty Finance LLC, AXIS Specialty Finance PLC and AXIS Specialty Holdings Bermuda Limited related to the $250 million credit facility issued by a syndication of lenders. At December 31, 2015 and 2014, debt outstanding under the credit facility was $nil.


(4)	AXIS Capital has fully and unconditionally guaranteed the derivative instrument obligations of certain of its 100% owned operating subsidiaries. At December 31, 2015, the notional value of guaranteed obligations utilized aggregated to $70 million (2014: $68 million).

SCHEDULE II

AXIS CAPITAL HOLDINGS LIMITED

CONDENSED STATEMENTS OF OPERATIONS – PARENT COMPANY

YEARS ENDED DECEMBER 31, 2015, 2014 AND 2013



	2015		2014			2013
	(in thousands)
Revenues
Net investment income	$	1	$	3		$	5
Termination fee received	280,000		—			—
Total revenues	280,001		3			5

Expenses
General and administrative expenses	8,012		57,998			40,565
Interest expense and financing costs	—		26,749			29,201
Total expenses	8,012		84,747			69,766

Income (loss) before equity in net earnings of subsidiaries	271,989		(84,744		)	(69,761		)
Equity in net earnings of subsidiaries	369,642		895,489			797,226
Net income	641,631		810,745			727,465
Preferred share dividends	40,069		40,088			40,474
Loss on repurchase of preferred shares	—		—			3,081
Net income available to common shareholders	$	601,562	$	770,657		$	683,910

Comprehensive income	$	498,740	$	641,165		$	482,668

SCHEDULE II

AXIS CAPITAL HOLDINGS LIMITED

CONDENSED STATEMENTS OF CASH FLOWS – PARENT COMPANY

YEARS ENDED DECEMBER 31, 2015, 2014 AND 2013



	2015			2014			2013
	(in thousands)
Cash flows from operating activities:
Net income	$	641,631		$	810,745		$	727,465
Adjustments to reconcile net income to net cash provided by operating activities:
Equity in net earnings of subsidiaries	(369,642		)	(895,489		)	(797,226		)
Change in intercompany payable	(180,312		)	8,272			(38,375		)
Dividends received from subsidiaries	420,000			724,000			566,000
Other items	(23,614		)	53,865			34,803
Net cash provided by operating activities	488,063			701,393			492,667

Cash flows from investing activities:
Capital repaid from subsidiary	—			496,593			—
Net cash provided by investing activities	—			496,593			—

Cash flows from financing activities:
Repurchase of common shares	(332,252		)	(543,202		)	(472,263		)
Dividends paid - common shares	(118,652		)	(117,619		)	(118,426		)
Dividends paid - preferred shares	(40,088		)	(40,088		)	(39,193		)
Proceeds from issuance of common shares	3,986			5,550			20,339
Redemption of senior notes	—			(500,000		)	—
Net proceeds from issuance of preferred shares	—			—			218,449
Repurchase of preferred shares	—			—			(100,000		)
Net cash used in financing activities	(487,006		)	(1,195,359		)	(491,094		)

Increase in cash and cash equivalents	1,057			2,627			1,573
Cash and cash equivalents - beginning of year	7,041			4,414			2,841
Cash and cash equivalents - end of year	$	8,098		$	7,041		$	4,414

Supplemental disclosures of cash flow information:
Interest paid	$	—		$	28,750		$	28,750