NUCLEAR ELECTRIC INSURANCE LIMITED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

YEARS ENDED DECEMBER 31, 2002 AND 2001 (In thousands of U.S. Dollars)

2002 2001

Premiums earned $ 181,221 $ 182,788
Reinsurance premiums assumed 54,067 17,561
Reinsurance premiums ceded (32,112) (34,605)

Net Premiums Earned 203,176 165,744

Losses and loss expenses 77,786 90,947
Administrative expenses 16,137 14,286
Commissions 5,262 3,099

Total underwriting expenses 99,185 108,332

Earnings from Underwriting Operations 103,991 57,412
Investment income 122,539 133,637
Net realized (losses) gains on sales and write-downs of investments (46,490) 211,012
Investment expenses (4,288) (4,812)

Earnings Before Distribution to Policyholders and Income Taxes 175,752 397,249
Distribution to policyholders 250,000 400,000

Loss Before Income Taxes (74,248) (2,751)
Income tax benefit (25,159) (7,979)

Net (Loss) Income (49,089) 5,228

Other Comprehensive Loss, Net of Income Taxes
Foreign currency translation adjustment
[net of income taxes of $22,421 - 2002 and ($525) - 2001] 41,639 975

Unrealized losses arising during the period
[net of income taxes of ($167,526) - 2002 and ($149,480) - 2001]
(311,119) (277,606)
Less: Reclassification adjustments for (losses) gains including net (loss) income
[net of income taxes of ($16,272) - 2002 and $73,854 - 2001]
(30,219) 137,158

Total unrealized losses arising during the period (280,900) (414,764)

Other Comprehensive Loss, Net of Income Taxes (239,261) (413,789)

Comprehensive Loss $(288,350) $(408,561)

See notes to consolidated financial statements