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thewarrantygroup.com

175 West Jackson Boulevard

Chicago, Illinois 60604

innovative

global

diversiied

secure

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csr

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board o directors

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tHe WarrantY grouP,inc.

Years ended deceMber 31,2009 and 2008

inancial suMMarY

Revenue

Premium earned

Contract fees and other income

Net investment income

investments recognized in income

Total revenue

Expenses

Benefits to policyholders

Amortization of deferred acquisition costs

Amortization of intangible assets

Profit commissions

Interest crediting

Interest expense

Other operating expenses

Total expenses

Income before income taxes

Income tax expense

Net income

For acopy of our 2008 Ernst & Young audited financialstatements, please call 312.3 56.2320.

December 31

Net realized available-for-sale investment gainsOther-than-temporary impairment losses on

Net realized losses

$

$

9

1

5

1

2

1,0

1

1,1

consolidated stateMent o incoMe ( h

consolidated balance sHeet ( h)

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consolidated balance sHeet ( h)

Liabilities and stockholders equity

Reserves:

Unearned premiums

Unearned contract feesClaims and benefits payable

Total reserves

Deferred income taxes

Ceded reinsurance premiums payable

Notes payable

Other liabilities

Total liabilities

Stockholders equity:

Preferred stock, par value $0.001 per share, 100,000

shares authorized, 51,132 shares issued and

outstanding

Common stock, par value $0.001 per share, 100,000

shares authorized, 57,340 and 55,824 shares issued and

outstanding at December 31, 2009 and 2008, respectively

Additional paid-in capital

Retained earnings

Accumulated other comprehensive (loss), net of taxes

Total stockholders equity

Total liabilities and stockholders equity

For acopy of our 2009 Ernst & Young audited financialstatements, please call 312.356.2 320.

$ 2,3

18

3,4

1

1

2

4,0

5

2

7

4,8$

December 31

Assets

Invested assets:

Fixed-maturity securities, at fair value (amortized

cost, 2008 $1,571,922; 2007 $1,542,643)Short-term investments

Dealer loans (net of allowance,

2008 $2,672; 2007 $0)

Equity securities, at fair value (cost,

2008 $27,225; 2007 $29,762)

Other investments

Total invested assets

Cash and cash equivalents

Receivables:

Reinsurance balances recoverable (net of allowance,

2008 $0; 2007 $807)

Ceded claims recoverable

Premiums and contract fees receivable (net of allowance,

2008 $3,782; 2007 $857)

Total receivables

Accrued investment income

Current income taxes receivable

Deferred income taxes

Deferred acquisition costs

Prepaid reinsurance premiums

Property and equipment, net

Goodwill

Value of business acquired

Other intangible assets

Other assets

Total assets

1,515,443474,357

26,173

17,653

2,818

2,036,444

46,762

34,804

928,773

118,485

1,082,062

21,373

2,626

36,358

430,804

560,541

41,130

343,659

124,025

99,929

69,596

4,895,309$

$$ 1,792,061328,365

25,304

23,915

4,421

2,174,066

57,326

32,842

716,908

138,925

888,675

24,784

3,158

15,116

465,110

570,876

42,801

343,659

62,851

80,292

94,421

4,823,135$

December 31 2009 2008