SCHEDULE II – CONDENSED FINANCIAL INFORMATION OF REGISTRANT

Universal Insurance Holdings, Inc. had no long term obligations, guarantees or material contingencies as of December 31, 2015 and 2014. The following summarizes the major categories of the parent company’s financial statements (in thousands, except per share data):

CONDENSED BALANCE SHEETS

	As of December 31,
	2015			2014
ASSETS
Cash and cash equivalents	$	2,046		$	14,890
Investments in subsidiaries and undistributed earnings		291,793			216,656
Fixed maturities, at fair value		2,980			2,967
Equity maturities, at fair value		551			627
Income taxes recoverable		5,420			5,675
Deferred income taxes		13,912			11,850
Other assets		358			1,040
Total assets	$	317,060		$	253,705
LIABILITIES, CONTINGENTLY REDEEMABLE COMMON STOCK AND STOCKHOLDERS' EQUITY
LIABILITIES:
Accounts payable	$	—		$	169
Income taxes payable		—			1,799
Long-term debt		6,851			13,330
Other accrued expenses		17,117			19,491
Total liabilities		23,968			34,789

Contingently redeemable common stock		—			19,000
Issued shares - 0 and 1,000
Outstanding shares - 0 and 1,000
STOCKHOLDERS' EQUITY:
Cumulative convertible preferred stock, $.01 par value		—			—
Authorized shares - 1,000
Issued shares - 10 and 12
Outstanding shares - 10 and 12
Minimum liquidation preference - $9.99 and $8.49 per share
Common stock, $.01 par value		455			448
Authorized shares - 55,000
Issued shares - 45,525 and 43,769
Outstanding shares - 35,110 and 34,102
Treasury shares, at cost - 10,415 and 9,667		(80,802	)		(62,153	)
Additional paid-in capital		70,789			40,987
Accumulated other comprehensive income (loss), net of taxes		(4,006	)		(1,835	)
Retained earnings		306,656			222,469
Total stockholders' equity		293,092			199,916
Total liabilities, contingently redeemable common stock and stockholders' equity	$	317,060		$	253,705

See accompanying notes to condensed financial statements

CONDENSED STATEMENTS OF INCOME

	For the Years Ended December 31,
	2015			2014			2013
REVENUES
Net investment income (expense)	$	22		$	(23	)	$	207
Net realized gains (losses) on investments		66			625			(2,947	)
Net change in unrealized gains (losses) on investments		—			—			1,625
Management fee		140			121			134
Total premiums earned and other revenues		228			723			(981	)
OPERATING COSTS AND EXPENSES
General and administrative expenses		48,056			39,062			32,476
Total operating cost and expenses		48,056			39,062			32,476
LOSS BEFORE INCOME TAXES AND EQUITY IN NET EARNINGS OF SUBSIDIARIES		(47,828	)		(38,339	)		(33,457	)
Benefit from income taxes		(17,495	)		(16,403	)		(13,834	)
LOSS BEFORE EQUITY IN NET EARNINGS OF SUBSIDIARIES		(30,333	)		(21,936	)		(19,623	)
Equity in net income of subsidiaries		136,817			94,924			78,600
CONSOLIDATED NET INCOME	$	106,484		$	72,988		$	58,977

See accompanying notes to condensed financial statements

CONDENSED STATEMENTS OF CASH FLOWS

	For the Years Ended December 31,
	2015			2014			2013
Cash flows from operating activities
Net Income	$	106,484		$	72,988		$	58,977
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Equity in net income of subsidiaries		(136,817	)		(94,924	)		(78,600	)
Distribution of income from subsidiaries		58,224			55,805			26,898
Depreciation		4			2			—
Amortization of share-based compensation		17,386			12,342			6,417
Amortization of original issue discount on debt		521			840			601
Accretion of deferred credit		(521	)		(840	)		(601	)
Net realized (gains) losses on investments		(66	)		(625	)		2,947
Net change in unrealized (gains) losses on investments		—			—			(1,625	)
Deferred income taxes		(693	)		1,118			7,363
Excess tax benefits from share-based compensation		(5,310	)		(7,006	)		(359	)
Other		—			—			—
Net changes in assets and liabilities relating to operating activities:
Purchases of equity securities, trading		—			—			(3,972	)
Proceeds from sale of equity securities, trading		—			—			16,712
Income taxes recoverable		255			2,477			(5,558	)
Income taxes payable		3,510			6,239			2,226
Other operating assets and liabilities		(1,338	)		5,752			1,347
Net cash provided by (used in) operating activities		41,639			54,168			32,773
Cash flows from investing activities:
Capital contributions to subsidiaries		—			(5,585	)		(1,600	)
Purchases of equity securities, available for sale		(1,442	)		(15,836	)		(10,357	)
Purchase of fixed maturities, available for sale		—			(3,000	)		(750	)
Proceeds from sales of equity securities, available for sale		1,481			26,060			—
Proceeds from sales of fixed maturities, available for sale		—			770			—
Net cash provided by (used in) investing activities		39			2,409			(12,707	)
Cash flows from financing activities:
Proceeds from borrowings		—			—			20,000
Repayment of debt		(7,000	)		(6,000	)		—
Preferred stock dividend		(10	)		(13	)		(29	)
Common stock dividend		(22,287	)		(19,240	)		(17,725	)
Issuance of common stock		511			73			—
Purchase of treasury stock		(18,649	)		(29,736	)		(32,365	)
Purchase of preferred stock		(256	)		—			—
Proceeds received from issuance of contingently redeemable common stock		—			19,000			—
Payments related to tax withholding for share-based compensation		(12,141	)		(17,655	)		(3,161	)
Excess tax benefits (shortfall) from share-based compensation		5,310			7,006			359
Net cash provided by (used in) financing activities		(54,522	)		(46,565	)		(32,921	)
Net increase (decrease) in cash and cash equivalents		(12,844	)		10,012			(12,855	)
Cash and cash equivalents at beginning of period		14,890			4,878			17,733
Cash and cash equivalents at end of period	$	2,046		$	14,890		$	4,878

See accompanying notes to condensed financial statements

NOTE 1 – GENERAL

The financial statements of the Registrant should be read in conjunction with the consolidated financial statements in “Item 8.”

Nature of Operations and Basis of Presentation

Universal Insurance Holdings, Inc. (the “Company”) is a Delaware corporation incorporated in 1990. The Company is an insurance holding company whose wholly-owned subsidiaries perform all aspects of insurance underwriting, distribution and claims. Through its wholly-owned subsidiaries, including Universal Property & Casualty Insurance Company and American Platinum Property and Casualty Insurance Company, the Company is principally engaged in the property and casualty insurance business offered primarily through a network of independent agents. Risk from catastrophic losses is managed through the use of reinsurance agreements.

The Company generates revenues from earnings on investments and management fees. The Company also receives distributions of earnings from its insurance and non-insurance subsidiaries.

Certain amounts in the prior periods’ condensed financial statements have been reclassified in order to conform to current period presentation. Such reclassifications had no effect on net income or stockholders’ equity.

NOTE 2 – SUBSEQUENT EVENTS

The Company performed an evaluation of subsequent events through the date the financial statements were issued and determined there were no recognized or unrecognized subsequent events that would require an adjustment or additional disclosure in the consolidated financial statements as of December 31, 2015.

On January 14, 2016, the Company declared a dividend of $0.14 per share on its outstanding common stock payable on March 2, 2016, to shareholders of record on February 18, 2016.