Delaware | 001-31978 | 39-1126612 | ||
(State or Other Jurisdiction of Incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
28 Liberty Street, 41st Floor New York, New York | 10005 | |
(Address of Principal Executive Offices) | (Zip Code) |
☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CR 230.425) |
☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
ASSURANT, INC. | |||
Date: August 7, 2018 | By: | /s/ Carey S. Roberts | |
Carey S. Roberts | |||
Executive Vice President, Chief Legal Officer and Secretary |
Exhibit No. | Description |
Key Financial Highlights for Second Quarter 2018: |
- $120.9 million of net operating income, excluding reportable catastrophes, up 34 percent year-over-year1 |
- $2.11 of operating earnings per diluted share, excluding reportable catastrophes, up 29 percent year-over-year2 |
- 7.8 percent annualized GAAP ROE for the first half of 2018 |
- 11.0 percent annualized operating ROE, excluding AOCI and reportable catastrophes3 for the first half of 2018 |
- Approximately $497 million of corporate capital available at quarter end |
(UNAUDITED) | 2Q | 2Q | 6 Months | 6 Months | |||||||||||
(in millions, net of tax) | 2018 | 2017 | 2018 | 2017 | |||||||||||
Global Housing | $ | 72.6 | $ | 56.2 | $ | 143.8 | $ | 118.1 | |||||||
Global Lifestyle | 68.1 | 40.2 | 123.9 | 92.6 | |||||||||||
Global Preneed | 14.7 | 12.8 | 24.5 | 22.7 | |||||||||||
Corporate and other | (17.5 | ) | (10.6 | ) | (37.5 | ) | (20.7 | ) | |||||||
Interest expense | (14.4 | ) | (8.1 | ) | (24.0 | ) | (16.3 | ) | |||||||
Preferred stock dividends | (1.6 | ) | — | (1.6 | ) | — | |||||||||
Net operating income | 121.9 | 90.5 | 229.1 | 196.4 | |||||||||||
Adjustments: | |||||||||||||||
Assurant Health runoff operations | 0.2 | 3.5 | 2.2 | 11.4 | |||||||||||
Net realized (losses) gains on investments | (9.0 | ) | 8.6 | (8.6 | ) | 10.8 | |||||||||
Amortization of deferred gains on disposal of businesses | 11.9 | 15.2 | 26.5 | 39.3 | |||||||||||
Net TWG acquisition related charges(1) | (32.5 | ) | — | (53.0 | ) | — | |||||||||
Loss on net assets held for sale | (34.4 | ) | — | (34.4 | ) | — | |||||||||
Other adjustments | 4.1 | 2.4 | 6.4 | 6.1 | |||||||||||
GAAP net income attributable to common stockholders | $ | 62.2 | $ | 120.2 | $ | 168.2 | $ | 264.0 |
(1) | 2Q 2018 and Six Months 2018 net TWG acquisition-related charges include charges related to pre-close interest expense for the amortization of net premiums on certain interest rate derivative contracts used to hedge the acquisition debt, pre-close interest expense and preferred dividends related to the acquisition financing, transaction costs, financing costs, and integration costs net of pre-close investment income on the proceeds from the acquisition financing and a tax benefit realized after the close. |
• | Net income declined to $62.2 million, or $1.09 per diluted share, compared to second quarter 2017 net income of $120.2 million, or $2.16 per diluted share, primarily reflecting the $34.4 million loss on net assets held for sale related to Global Housing’s mortgage solutions business and $32.5 million of net charges related to the acquisition of TWG. |
• | Net operating income4 increased to $121.9 million, or $2.13 per diluted share, compared to second quarter 2017 net operating income of $90.5 million, or $1.63 per diluted share. Results reflected a lower effective tax rate of 19.6 percent, compared to 32.4 percent, following the enactment of the U.S. Tax Cuts and Jobs Act (TCJA), organic growth in the Global Lifestyle and Global Housing segments and $9.4 million of net operating income from TWG for the month of June. |
• | Net earned premiums, fees and other income from Global Housing, Global Lifestyle and Global Preneed segments totaled $1.69 billion, compared to $1.43 billion in second quarter 2017. The increase primarily reflects the $202.6 million revenue contribution from TWG for the month of June, as well as organic growth from mobile programs in Connected Living and continued expansion of Assurant’s Global Automotive and multifamily housing businesses. This was partially offset by expected declines in lender-placed and mortgage solutions. |
(in millions) | 2Q18 | 2Q17 | % Change | 6M18 | 6M17 | % Change | |||||||||||||||
Net operating income | $ | 72.6 | $ | 56.2 | 29 | % | $ | 143.8 | $ | 118.1 | 22 | % | |||||||||
Net earned premiums, fees and other | $ | 542.5 | $ | 550.2 | (1 | )% | $ | 1,065.6 | $ | 1,081.9 | (2 | )% |
• | Net operating income increased in second quarter 2018 primarily due to the impact of a lower effective tax rate following the enactment of the TCJA. Excluding the impact of a lower effective tax rate, underlying results grew mainly due to more favorable non-catastrophe loss experience in lender-placed insurance and profitable growth in multifamily housing, partially offset by ongoing lender-placed normalization. |
• | Net earned premiums, fees and other income decreased slightly in second quarter 2018, primarily due to lower real-estate owned volume, expected lower placement rates in lender-placed insurance and reduced client demand for originations and field services in mortgage solutions. This was partially offset by continued growth across multifamily housing, international and other housing products. |
• | Combined ratio for risk-based businesses(a) improved to 85.7 percent in the second quarter 2018 from 87.0 percent in prior-year quarter. This reflects fewer non-catastrophe claims and lower expenses. Second quarter 2018 included $1.3 million pre-tax of favorable development related to third quarter 2017 reportable catastrophes, compared to no reportable catastrophes in second quarter 2017. |
• | Pre-tax margin for fee-based, capital-light businesses(b) was 14.3 percent, up from 11.7 percent from the second quarter of 2017. The increase was primarily due to growth in multifamily housing. |
(in millions) | 2Q18 | 2Q17 | % Change | 6M18 | 6M17 | % Change | ||||||||||||||||
Net operating income | $ | 68.1 | $ | 40.2 | 69 | % | $ | 123.9 | $ | 92.6 | 34 | % | ||||||||||
Net earned premiums, fees and other | $ | 1,102.2 | $ | 836.0 | 32 | % | $ | 2,020.7 | $ | 1,640.9 | 23 | % |
• | Net operating income increased in second quarter 2018, benefitting from a lower effective tax rate following the enactment of the TCJA. Excluding the impact of a lower effective tax rate, underlying results increased driven by strong mobile growth including contributions from programs launched in 2017. This was partially offset by continued declines in Financial Services. The quarter also included a $3.9 million tax benefit and approximately $2.0 million in one-time benefits in the Global Automotive business. TWG contributed $9.4 million of net operating income for the month of June. |
• | Net earned premiums, fees and other income increased primarily due to the addition of $202.6 million of TWG revenue for the month of June, new and existing mobile protection programs and Assurant’s Global Automotive business, mainly from Assurant’s third-party administrator distribution channel. This was partially offset by lower average selling prices for the trade-in of mobile devices. |
• | Combined ratio for risk-based businesses(a) improved to 96.6 percent from 97.0 percent in second quarter 2017 driven by favorable loss experience and $2.5 million pre-tax of one-time items in Global Automotive. Excluding TWG, the combined ratio was unchanged at 96.6 percent for the quarter. |
• | Pre-tax margin for fee-based, capital-light businesses(b) was 7.1 percent, up from 6.4 percent in second quarter 2017, including service contract business from TWG. The increase was largely driven by profitable growth from global mobile programs launched in 2017. Excluding TWG, the margin was 7.6 percent. |
(in millions) | 2Q18 | 2Q17 | % Change | 6M18 | 6M17 | % Change | ||||||||||||||||
Net operating income | $ | 14.7 | $ | 12.8 | 15 | % | $ | 24.5 | $ | 22.7 | 8 | % | ||||||||||
Net earned premiums, fees and other | $ | 46.9 | $ | 46.3 | 1 | % | $ | 93.1 | $ | 90.5 | 3 | % |
• | Net operating income increased in second quarter 2018 due to the impact of a lower effective tax rate following the enactment of the TCJA. Excluding the impact of a lower effective tax rate, underlying results were flat. |
• | Net earned premiums, fees and other income was flat. Growth in U.S. driven by prior period sales of the Final Need product was offset by lower production in Canada compared to a favorable second quarter 2017. |
• | Face sales totaled $257 million in second quarter 2018 compared to $239.0 million in second quarter 2017 as Global Preneed continued to benefit from its alignment with market leaders. |
(in millions) | 2Q18 | 2Q17 | % Change | 6M17 | 6M16 | % Change | ||||||||||||||||
Net operating loss (5) | $ | (17.5 | ) | $ | (10.6 | ) | (65 | )% | $ | (37.5 | ) | $ | (20.7 | ) | (81 | )% |
• | Net operating loss5 increased in second quarter 2018, reflecting the adverse impact from the lower effective tax rate and higher employee-related and technology expenses. |
• | On May 31, 2018, Assurant closed the TWG acquisition. The transaction was funded with $1.2 billion acquisition-related financing completed in March 2018, the issuance of 10.4 million shares and cash available at the holding company at closing. |
• | As of June 30, 2018, corporate capital was approximately $497 million. Deployable capital totaled approximately $247 million, net of the company’s $250 million risk buffer. This excludes the $35 million of cash proceeds from the sale of mortgage solutions which will be included in third quarter 2018 holding company capital. |
• | Dividends paid to the holding company in the second quarter 2018 totaled $296 million, including $284 million from Assurant’s Global Housing, Global Lifestyle and Global Preneed operating segments, including the remaining $86 million of capital related to the reduction in deferred tax liabilities following the enactment of the TCJA. Assurant Employee Benefits and Assurant Health contributed $12 million in dividends. Overall, capital brought up to the holding company was accelerated during the quarter in preparation for the TWG close. |
• | Dividends to shareholders totaled $36 million, including $31 million in common stock dividends and $5 million in preferred stock dividends. There were no share repurchases during the quarter. From July 1 through August 3, 2018, the company repurchased an additional 319,000 shares for approximately $34 million, with $259 million remaining under the current repurchase authorization. |
• | Assurant net operating income, excluding reportable catastrophe losses, to increase between 20 to 25 percent from Assurant 2017 reported results of $413 million. Earnings growth to reflect contributions from TWG, a lower effective tax rate, and modest organic growth. Assurant to realize approximately $10 million after-tax of operating synergies from the TWG acquisition through year-end. |
• | Assurant operating earnings per diluted share, excluding catastrophe losses to grow reflecting earnings expansion and capital management, but at a slower rate than net operating income due to the effect of TWG-related share issuance without a full run-rate contribution of TWG income. |
• | Global Housing net operating income, excluding reportable catastrophes, to increase after reflecting a lower effective tax rate of approximately 20 to 21 percent, with a portion of the tax savings to be reinvested for future growth, primarily in the second half of 2018. Net operating income, excluding reportable catastrophes, to decrease before taking into account the benefit of lower effective tax rate. Declines in lender-placed insurance to be partially offset by continued profitable growth in multifamily housing. Additional savings from expense management efforts to be realized towards the end of 2018 and into 2019. Revenue expected to contract from 2017 levels due to declines in lender-placed and mortgage solutions through July 2018. Excluding mortgage solutions for the full year, revenue to increase due to growth in multifamily housing, international and other housing products. |
• | Global Lifestyle net operating income to increase after reflecting contributions from TWG inclusive of operating synergies, a lower effective tax rate of approximately 22 to 24 percent and organic growth. A portion of the tax savings to be reinvested for future growth, primarily in the second half of 2018. The tax rate to fluctuate based on geographic mix of income across various jurisdictions. Before taking into account the benefit from a lower effective tax rate and contributions from TWG acquisition, net operating income to increase modestly. Profitable growth driven primarily by newly launched mobile programs, Global Automotive expansion and ongoing expense management efforts, partially offset by ongoing declines in Financial Services due to discontinued client partnerships in the second half of 2018. Mobile trade-in activity to vary based on the timing and availability of new smartphone introductions and carrier promotional activity. Revenue expected to increase from growth in Connected Living and Global Automotive, globally. |
• | Global Preneed revenue and earnings to increase modestly from our alignment with market leaders, before taking into account recently enacted tax reform. Results to benefit from a lower effective tax rate of roughly 22 percent, with a portion of the tax savings to be reinvested for future growth, primarily in the second half of 2018. |
• | Corporate & Other6 full-year net operating loss to be in the range of $80 to $85 million, after accounting for the adverse impact of lower effective tax rate of approximately 20 percent, increased investments for growth and additional expenses related to legacy TWG corporate functions. This will be partially offset by continued expense management efforts. |
• | Business segment dividends from Global Housing, Global Lifestyle and Global Preneed to exceed segment net operating income, including catastrophe losses, due to the impact of TCJA and TWG’s full-year dividend contributions. This is subject to the growth of the businesses and rating agency and regulatory capital requirements. |
• | Capital to be deployed primarily to fund the financing and integration of TWG and other ongoing capital needs of the business. Excess capital will be deployed primarily to fund other investments and return capital to shareholders in the form of share repurchase and dividends, subject to market conditions. |
(i) | the effective integration of The Warranty Group acquisition; |
(ii) | the loss of significant client relationships or business, distribution sources and contracts; |
(iii) | the impact of general economic, financial market and political conditions; |
(iv) | the adequacy of reserves established for future claims; |
(v) | the impact of catastrophic losses, including human-made catastrophic losses; |
(vi) | a decline in our credit or financial strength ratings; |
(vii) | risks related to our international operations, including fluctuations in exchange rates; |
(viii) | an impairment of the company’s goodwill or other intangible assets resulting from a sustained significant decline in the company’s stock price, a decline in actual or expected future cash flows or income, a significant adverse change in the business climate or slower growth rate, among other circumstances; |
(ix) | a failure to effectively maintain and modernize our information technology systems; |
(x) | the company’s vulnerability to system security threats, data protection breaches, cyber-attacks and data breaches compromising client information and privacy; |
(xi) | significant competitive pressures in our businesses or changes in customer preferences; |
(xii) | the failure to find and integrate suitable acquisitions and new ventures; |
(xiii) | a decline in the sales of our products and services resulting from an inability to develop and maintain distribution sources or attract and retain sales representatives; |
(xiv) | a decrease in the value of our investment portfolio; |
(xv) | the impact of recently enacted tax reform legislation in the U.S.; |
(xvi) | the impact from litigation, other contingent liabilities and loss contingencies, regulatory investigations, reviews and markets studies to which we are or may become subject; |
(xvii) | the extensive laws and regulations to which we are and may become subject, including relating to data privacy, could increase our costs; restrict the conduct of our business and limit our growth; |
(xviii) | the failure to successfully manage outsourcing activities, such as call center services; |
(xix) | a decline in the value of mobile devices in our inventory or those that are subject to guaranteed buyback provisions; |
(xx) | the unavailability or inadequacy of reinsurance coverage; |
(xxi) | the insolvency of third parties to whom we have sold or may sell businesses through reinsurance or modified co-insurance; |
(xxii) | the credit risk of some of our agents that we are exposed to due to the structure of our commission program; |
(xxiii) | the inability of our subsidiaries to pay sufficient dividends to the holding company; and |
(xxiv) | the failure to attract and retain key personnel and to provide for succession of senior management and key executives. |
(1) | Assurant uses net operating income (defined below), excluding reportable catastrophes (which represents catastrophe losses net of reinsurance and client profit sharing adjustments and including reinstatement and other premiums), as an important measure of the company’s operating performance. The company believes this metric provides investors a valuable measure of the performance of the company’s ongoing business because it excludes reportable catastrophes, which can be volatile. The comparable GAAP measure is net income attributable to common stockholders. |
(UNAUDITED) | 2Q | 2Q | 6 Months | 6 Months | |||||||||||
(in millions) | 2018 | 2017 | 2018 | 2017 | |||||||||||
Global Housing, excluding reportable catastrophes | $ | 71.6 | $ | 56.2 | $ | 151.5 | $ | 118.7 | |||||||
Global Lifestyle(1) | 68.1 | 40.2 | 122.6 | 92.6 | |||||||||||
Global Preneed | 14.7 | 12.8 | 24.5 | 22.7 | |||||||||||
Corporate and other | (17.5 | ) | (10.6 | ) | (37.5 | ) | (20.7 | ) | |||||||
Interest expense | (14.4 | ) | (8.1 | ) | (24.0 | ) | (16.3 | ) | |||||||
Preferred stock dividends | (1.6 | ) | — | (1.6 | ) | — | |||||||||
Net operating income, excluding reportable catastrophes | 120.9 | 90.5 | 235.5 | 197.0 | |||||||||||
Adjustments, pre-tax: | |||||||||||||||
Assurant Health runoff operations | 0.3 | 4.3 | 2.9 | 16.9 | |||||||||||
Net realized (losses) gains on investments | (11.4 | ) | 13.2 | (10.9 | ) | 16.6 | |||||||||
Reportable catastrophes | 1.3 | — | (8.1 | ) | (0.9 | ) | |||||||||
Amortization of deferred gains on disposal of businesses | 15.0 | 23.4 | 33.5 | 60.4 | |||||||||||
Net TWG acquisition related charges(2) | (38.5 | ) | — | (64.5 | ) | — | |||||||||
Loss on net assets held for sale | (43.5 | ) | — | (43.5 | ) | — | |||||||||
Other adjustments | 5.2 | 3.9 | 8.4 | 9.7 | |||||||||||
Benefit (provision) for income taxes | 13.0 | (15.1 | ) | 15.0 | (35.7 | ) | |||||||||
GAAP net income attributable to common stockholders | $ | 62.2 | $ | 120.2 | $ | 168.2 | $ | 264.0 |
(1) | Six months 2018 excludes a $1.3 million benefit after-tax ($1.6 million pre-tax) due to favorable development related to 3Q 2017 reportable catastrophes. |
(2) | Additional details about the components of net TWG acquisition related charges are included in the Financial Supplement located on Assurant’s Investor Relations website http://ir.assurant.com/investor/default.aspx |
(2) | Assurant uses net operating income per diluted share (defined below), excluding reportable catastrophes (defined above) as an important measure of the company's stockholder value. The company believes this metric provides investors a valuable measure of stockholder value because it excludes reportable catastrophes, which can be volatile. The comparable GAAP measure is net income attributable to common stockholders per diluted share, defined as net income plus any dilutive preferred stock dividends divided by weighted average diluted shares outstanding. |
(UNAUDITED) | 2Q | 2Q | 6 Months | 6 Months | |||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Net operating income, excluding reportable catastrophes, per diluted share(1)(2) | $ | 2.11 | $ | 1.63 | $ | 4.24 | $ | 3.51 | |||||||
Adjustments, pre-tax: | |||||||||||||||
Dilutive effect from mandatory convertible preferred stock | — | — | (0.10 | ) | — | ||||||||||
Assurant Health runoff operations | — | 0.08 | 0.05 | 0.30 | |||||||||||
Net realized (losses) gains on investments | (0.20 | ) | 0.24 | (0.19 | ) | 0.30 | |||||||||
Reportable catastrophes | 0.02 | — | (0.14 | ) | (0.02 | ) | |||||||||
Amortization of deferred gains on disposal of businesses | 0.26 | 0.42 | 0.58 | 1.09 | |||||||||||
Net TWG acquisition related charges | (0.66 | ) | — | (1.07 | ) | — | |||||||||
Loss on net assets held for sale | (0.76 | ) | — | (0.76 | ) | — | |||||||||
Other adjustments | 0.09 | 0.07 | 0.15 | 0.17 | |||||||||||
Benefit (provision) for income taxes | 0.23 | (0.28 | ) | 0.26 | (0.64 | ) | |||||||||
Net income attributable to common stockholders per diluted share(1) | $ | 1.09 | $ | 2.16 | $ | 3.02 | $ | 4.71 |
(1) | Net operating income per diluted share and net income attributable to common stockholders per diluted share for 2Q 2018 exclude the effect of 1,041,293 and 3,056,700 shares, respectively, of potentially dilutive securities, based on the assumed conversion of the outstanding mandatory convertible preferred stock, which were anti-dilutive for the period. Since the mandatory convertible preferred stock is anti-dilutive for the period, the preferred stock dividends are not added back to the net operating income or net income attributable to common stockholders for the calculations. |
(2) | Net operating income per diluted share for Six Months 2018 excludes the effect of 1,362,083 of potentially dilutive securities, based on the assumed conversion of the outstanding mandatory convertible preferred stock, prior to the acquisition date. Net income attributable to common stockholders per diluted share for Six Months 2018 includes the effect of such dilutive securities. |
(3) | Assurant uses operating return on common stockholders’ equity ("Operating ROE"), excluding accumulated other comprehensive income ("AOCI") and reportable catastrophes (defined above), as an important measure of the company’s operating performance. Operating ROE, excluding AOCI and reportable catastrophe losses, equals net operating income (as defined below) for the periods presented divided by average common stockholders’ equity, excluding AOCI and reportable catastrophe losses, for the year to date period. The company believes this metric provides investors a valuable measure of the performance of the company’s ongoing business because it excludes the effect of reportable catastrophes, which can be volatile. The comparable GAAP measure is GAAP return on common stockholders’ equity (“GAAP ROE”), defined as net income attributable to common stockholders’, for the period presented, divided by average common stockholders’ equity for the year to date period. |
(UNAUDITED) | 2Q | 2Q | 6 Months | 6 Months | ||||||||
2018 | 2017 | 2018 | 2017 | |||||||||
Annual operating return on average common stockholders' equity, excluding AOCI and reportable catastrophes(1) | 10.7 | % | 9.2 | % | 11.0 | % | 10.0 | % | ||||
Assurant Health runoff operations | —% | 0.4 | % | 0.1 | % | 0.6 | % | |||||
Net realized (losses) gains on investments | (0.8 | )% | 0.9 | % | (0.4 | )% | 0.6 | % | ||||
Amortization of deferred gains on disposal of businesses | 1.1 | % | 1.5 | % | 1.2 | % | 2.0 | % | ||||
Net TWG acquisition related charges | (2.9 | )% | —% | (2.5 | )% | —% | ||||||
Reportable catastrophes | 0.1 | % | —% | (0.3 | )% | —% | ||||||
Loss on net assets held for sale | (3.1 | )% | —% | (1.6 | )% | —% | ||||||
Other adjustments | 0.4 | % | 0.2 | % | 0.3 | % | 0.3 | % | ||||
Change due to effect of including AOCI | 0.1 | % | (0.7 | )% | —% | (0.8 | )% | |||||
Annual GAAP return on average common stockholders' equity(1) | 5.6 | % | 11.5 | % | 7.8 | % | 12.7 | % |
(1) | Average common stockholders' equity excludes $276.4 million of preferred stock for 2Q and Six Months 2018. In addition, 2Q 2018 and Six Months 2018 average common stockholders’ equity reflects the impact of the 10.4 million common shares issued in connection with the TWG acquisition for the period that they were outstanding. |
(4) | Assurant uses net operating income as an important measure of the company’s operating performance. Net operating income equals net income, excluding Assurant Health runoff operations, net realized gains on investments, amortization of deferred gains on disposal of businesses (including Assurant Employee Benefits), net TWG acquisition related charges, loss on net assets held for sale related to mortgage solutions and other highly variable or unusual items. The company believes net operating income provides investors a valuable measure of the performance of the company’s ongoing business because the excluded items do not represent the ongoing operations of the company. The comparable GAAP measure is net income attributable to common stockholders. |
(UNAUDITED) | 2Q | 2Q | 6 Months | 6 Months | |||||||||||
(in millions) | 2018 | 2017 | 2018 | 2017 | |||||||||||
Net operating income | $ | 121.9 | $ | 90.5 | $ | 229.1 | $ | 196.4 | |||||||
Adjustments (pre-tax): | |||||||||||||||
Assurant Health runoff operations | 0.3 | 4.3 | 2.9 | 16.9 | |||||||||||
Net realized (losses) gains on investments | (11.4 | ) | 13.2 | (10.9 | ) | 16.6 | |||||||||
Amortization of deferred gains on disposal of businesses | 15.0 | 23.4 | 33.5 | 60.4 | |||||||||||
Net TWG acquisition related charges(1) | (38.5 | ) | — | (64.5 | ) | — | |||||||||
Loss on net assets held for sale | (43.5 | ) | — | (43.5 | ) | — | |||||||||
Other adjustments | 5.2 | 3.9 | 8.4 | 9.7 | |||||||||||
Benefit (provision) for income taxes | 13.3 | (15.1 | ) | 13.3 | (36.0 | ) | |||||||||
GAAP net income attributable to common stockholders | $ | 62.2 | $ | 120.2 | $ | 168.2 | $ | 264.0 |
(1) | Additional details about the components of net TWG acquisition related charges are included in the Financial Supplement located on Assurant’s Investor Relations website http://ir.assurant.com/investor/default.aspx |
(5) | Assurant uses Corporate and Other net operating loss as an important measure of the corporate segment’s performance. Corporate and Other net operating loss equals Total Corporate and Other segment net (loss) income, excluding Health runoff operations net income, amortization of deferred gains on disposal of businesses, net TWG acquisition related charges, interest expense, net realized gains on investments, loss on net assets held for sale related to mortgage solutions and other highly variable or unusual items. The company believes Corporate and Other net operating loss provides investors a valuable measure of the performance of the company’s corporate segment because it excludes highly variable items that do not represent the ongoing results of the company’s corporate segment. The comparable GAAP measure is Total Corporate & Other segment net (loss) income attributable to common stockholders. |
(UNAUDITED) | 2Q | 2Q | 6 Months | 6 Months | |||||||||||
(in millions) | 2018 | 2017 | 2018 | 2017 | |||||||||||
GAAP Total Corporate & Other segment net (loss) income attributable to common stockholders | $ | (93.2 | ) | $ | 11.0 | $ | (124.0 | ) | $ | 30.6 | |||||
Excluding: Health runoff operations net income | 0.2 | 3.5 | 2.2 | 11.4 | |||||||||||
GAAP Corporate & Other segment net (loss) income attributable to common stockholders | (93.4 | ) | 7.5 | (126.2 | ) | 19.2 | |||||||||
Adjustments, pre-tax: | |||||||||||||||
Amortization of deferred gains on disposal of businesses | (15.0 | ) | (23.4 | ) | (33.5 | ) | (60.4 | ) | |||||||
Net TWG acquisition related charges(1) | 38.5 | — | 64.5 | — | |||||||||||
Interest expense | 18.2 | 12.4 | 30.4 | 25.0 | |||||||||||
Net realized losses (gains) on investments | 11.4 | (13.2 | ) | 10.9 | (16.6 | ) | |||||||||
Loss on net assets held for sale | 43.5 | — | 43.5 | — | |||||||||||
Other adjustments | (5.2 | ) | (3.9 | ) | (8.4 | ) | (9.7 | ) | |||||||
(Benefit) provision for income taxes | (17.1 | ) | 10.0 | (20.3 | ) | 21.8 | |||||||||
Preferred stock dividends | 1.6 | — | 1.6 | — | |||||||||||
Corporate & other net operating loss | $ | (17.5 | ) | $ | (10.6 | ) | $ | (37.5 | ) | $ | (20.7 | ) |
(1) | Additional details about the components of net TWG acquisition related charges are included in the Financial Supplement located on Assurant’s Investor Relations website http://ir.assurant.com/investor/default.aspx |
(6) | The company outlook for Corporate & Other full-year net operating loss constitutes forward-looking information and the company believes that it cannot reconcile such forward-looking information to the most comparable GAAP measure without unreasonable efforts. Many of these components cannot be reliably quantified due to the combination of variability and |
2Q | 6 Months | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Revenues | |||||||||||||||
Net earned premiums | $ | 1,338.3 | $ | 1,115.3 | $ | 2,463.2 | $ | 2,165.6 | |||||||
Fees and other income | 354.2 | 326.9 | 718.7 | 667.1 | |||||||||||
Net investment income | 135.6 | 121.7 | 265.8 | 242.3 | |||||||||||
Net realized (losses) gains on investments | (11.4 | ) | 13.2 | (10.9 | ) | 16.6 | |||||||||
Amortization of deferred gains on disposal of businesses | 15.0 | 23.4 | 33.5 | 60.4 | |||||||||||
Total revenues | 1,831.7 | 1,600.5 | 3,470.3 | 3,152.0 | |||||||||||
Benefits, losses and expenses | |||||||||||||||
Policyholder benefits | 490.6 | 416.4 | 905.2 | 774.4 | |||||||||||
Selling, underwriting, general and administrative expenses | 1,236.8 | 993.0 | 2,302.8 | 1,958.8 | |||||||||||
Interest expense | 26.0 | 12.4 | 47.5 | 25.0 | |||||||||||
Total benefits, losses and expenses | 1,753.4 | 1,421.8 | 3,255.5 | 2,758.2 | |||||||||||
Income before provision for income taxes | 78.3 | 178.7 | 214.8 | 393.8 | |||||||||||
Provision for income taxes | 11.3 | 58.5 | 41.8 | 129.8 | |||||||||||
Net income | 67.0 | 120.2 | 173.0 | 264.0 | |||||||||||
Less: Preferred stock dividends | (4.8 | ) | — | (4.8 | ) | — | |||||||||
Net income attributable to common stockholders | $ | 62.2 | $ | 120.2 | $ | 168.2 | $ | 264.0 | |||||||
Net income attributable to common stockholders per share: | |||||||||||||||
Basic | $ | 1.09 | $ | 2.18 | $ | 3.05 | $ | 4.74 | |||||||
Diluted | $ | 1.09 | $ | 2.16 | $ | 3.02 | $ | 4.71 | |||||||
Common stock dividends per share | $ | 0.56 | $ | 0.53 | $ | 1.12 | $ | 1.06 | |||||||
Share data: | |||||||||||||||
Basic weighted average shares outstanding | 57,060,313 | 55,230,367 | 55,125,584 | 55,713,172 | |||||||||||
Diluted weighted average shares outstanding | 57,264,408 | 55,509,898 | 57,273,428 | 56,075,152 |
June 30, | December 31, | ||||||
2018 | 2017 | ||||||
(in millions) | |||||||
Assets | |||||||
Investments and cash and cash equivalents | $ | 14,642.9 | $ | 12,550.3 | |||
Reinsurance recoverables | 10,978.3 | 9,790.2 | |||||
Deferred acquisition costs | 3,882.7 | 3,484.5 | |||||
Goodwill | 2,369.2 | 917.7 | |||||
Value of business acquired | 3,962.5 | 24.4 | |||||
Assets held in separate accounts | 1,858.3 | 1,837.1 | |||||
Other assets | 3,362.2 | 2,492.3 | |||||
Assets of consolidated investment entities | 1,305.2 | 746.5 | |||||
Total assets | $ | 42,361.3 | $ | 31,843.0 | |||
Liabilities | |||||||
Policyholder benefits and claims payable | $ | 13,889.1 | $ | 14,179.6 | |||
Unearned premiums | 14,505.0 | 7,038.6 | |||||
Debt | 2,004.8 | 1,068.2 | |||||
Liabilities related to separate accounts | 1,858.3 | 1,837.1 | |||||
Deferred gain on disposal of businesses | 94.7 | 128.1 | |||||
Accounts payable and other liabilities | 3,590.0 | 2,736.5 | |||||
Liabilities of consolidated investment entities | 1,086.5 | 573.4 | |||||
Total liabilities | 37,028.4 | 27,561.5 | |||||
Stockholders' equity | |||||||
Equity, excluding accumulated other comprehensive income | 5,450.4 | 4,036.6 | |||||
Accumulated other comprehensive income | (137.9 | ) | 234.0 | ||||
Total Assurant, Inc. stockholders' equity | 5,312.5 | 4,270.6 | |||||
Non-controlling interest | 20.4 | 10.9 | |||||
Total equity | 5,332.9 | 4,281.5 | |||||
Total liabilities and equity | $ | 42,361.3 | $ | 31,843.0 |