Exhibit

EX-99.1 2 ex9919302017.htm EXHIBIT 99.1 Exhibit

Exhibit 99.1

TIPTREE REPORTS THIRD QUARTER 2017 RESULTS


•	Revenues of $164.5 million for the quarter, up 24.5% from $132.2 million in the prior year period.


•	Net loss of $3.4 million for the quarter, a decrease of $11.2 million from the prior year period, primarily driven by unrealized losses on equity securities.


•	Net loss attributable to Class A stockholders of $3.1 million for the quarter, a decrease of $9.0 million from the prior year period.


•	Adjusted EBITDA⁽¹⁾ of $4.8 million for the quarter, down from $20.1 million in the prior year period.


•	Book value per share, as exchanged⁽¹⁾of $9.67, down 2.6% compared to $9.93 as of September 30, 2016.


•	Declared dividend of $0.03 per share to Class A stockholders of record on November 20, 2017 with a payment date of November 27, 2017.

New York, New York - November 7, 2017 - Tiptree Inc. (NASDAQ:TIPT) (“Tiptree” or the “Company”), which operates in the specialty insurance, asset management, senior living and specialty finance industries, today announced its financial results for the three and nine months ended September 30, 2017.

Summary Consolidated Statements of Operations



($ in millions, except for per share information)	Three Months Ended September 30,					Nine Months Ended September 30,
GAAP:	2017			2016		2017			2016
Total revenues	$	164.5		$	132.2	$	486.3		$	395.1
Net income before non-controlling interests	(3.4		)	7.8		(7.4		)	22.3
Net income attributable to Tiptree Inc. Class A common stockholders	(3.1		)	5.9		(6.5		)	17.6
Diluted earnings per share	(0.11		)	0.19		(0.22		)	0.53
Cash dividends paid per common share	0.03			0.025		0.09			0.075

Non-GAAP: ⁽¹⁾
Adjusted EBITDA	$	4.8		$	20.1	$	23.3		$	52.9
Book Value per share, as exchanged	9.67			9.93		9.67			9.93


(1)	For a reconciliation to U.S. GAAP, see “Non-GAAP Reconciliations” below.

Earnings Conference Call

Tiptree will host a conference call on Wednesday, November 8, 2017 at 10:00 a.m. Eastern Time to discuss its third quarter 2017 financial results. A copy of our investor presentation, to be used during the conference call, as well as this press release, will be available in the Investor Relations section of the Company’s website, located at www.tiptreeinc.com.

The conference call will be available via live or archived webcast at http://www.investors.tiptreeinc.com. To listen to a live broadcast, go to the site at least 15 minutes prior to the scheduled start time in order to register, download and install any necessary audio software. To participate in the telephone conference call, please dial 1-877-407-4018 (domestic) or 1-201-689-8471 (international). Please dial in at least five minutes prior to the start time.

A replay of the call will be available from Wednesday, November 8, 2017 at 1:00 p.m. Eastern Time, until midnight Eastern on Wednesday, November 15, 2017. To listen to the replay, please dial 1-844-512-2921 (domestic) or 1-412-317-6671 (international), Passcode: 13672827.

Page 1

3Q’17 Financial Overview

Consolidated Highlights


•	Net loss for the three and nine months primarily driven by unrealized losses on our equities of $11.1 million and $21.2 million, respectively.

•

Our specialty insurance operations continued to change the product mix to achieve a balance between growing near-term earned premiums and increasing investable assets. Gross written premiums were $209.2 million, up 15.3% from the prior year period, driven by growth in warranty products with longer contract durations. Net written premiums were $119.0 million, up from $56.0 million in the prior year period, driven by the assumption of a portion of our credit reinsurance book in late 2016. Net investments⁽¹⁾ grew to $364.0 million, an increase of 20.6% year-over-year.


•	On October 16, 2017, our insurance business completed a 40 year $125 million Junior Subordinated Note offering which was used to repay the existing credit facility and reposition the balance sheet, strengthening our long-term capital position for future growth.


•	Our asset management operations contributed $3.0 million of pre-tax income, down from $6.5 million in the prior year period as investments in CLO subordinated notes reduced from 2016. In the quarter, we completed our first risk retention compliant CLO, with a vertical tranche purchased in our insurance investment portfolio.


•	We continue to focus on returning capital to shareholders through dividends and share buybacks, totaling $10.6 million year-to-date


•	Additional senior living acquisitions have increased our gross investments to $430 million as of October.


•	As of October 1, 2017, we exited our position in Siena.


(1)	For a reconciliation to U.S. GAAP, see “Non-GAAP Reconciliations” below.

Consolidated Results of Operations

Revenues

For the three months ended September 30, 2017, the Company reported revenues of $164.5 million, an increase of $32.4 million, or 24.5% from the three months ended September 30, 2016. For the nine months ended September 30, 2017, revenues were $486.3 million, an increase of $91.2 million or 23.1% from the nine months ended September 30, 2016. The primary drivers of the increase in revenues for the three and nine months were growth in earned premiums and net investment income in our specialty insurance segment, increases in rental income attributable to acquisitions of seniors housing properties and improved specialty finance originations margins, partially offset by reduced service and administrative fees, ceding commissions, and unrealized losses, as compared to prior period gains, in our specialty insurance segment investment portfolio.

Net Income before non-controlling interests

For the three months ended September 30, 2017, the Company incurred a net loss of $3.4 million compared to net income of $7.8 million in the 2016 period. The primary drivers of the decline were the unrealized losses in our specialty insurance investment portfolio in the three months ended September 30, 2017 compared to unrealized gains in the 2016 period, run-off in our older vintage CLOs resulting in reduced management fees, and reduced CLO distributions as the Company reduced its investments over the last twelve months.

For the nine months ended September 30, 2017, the Company incurred a net loss of $7.4 million compared to net income of $22.3 million in the 2016 period, a decrease of $29.6 million. The decline was primarily a result of the unrealized losses in our specialty insurance investment portfolio in the nine months ended September 30, 2017, compared to unrealized gains in the prior period, combined with increased stock-based compensation expense in the specialty insurance segment and an increase in the fair value of the contingent earn-out liability associated with our Reliance acquisition. These drivers were partially offset by reduced losses in our senior living and improved operating results in our specialty finance segments, excluding the impact of the Reliance earn-out. Additionally, the tax provision has increased year-over-year as a result of a $4.0 million tax benefit in the three months ended March 31, 2016 which was driven by the tax reorganization effective January 1, 2016. A discussion of the changes in revenues, expenses and net income is presented below and in more detail in our segment analysis.

Page 2

The following table highlights certain non-cash, key drivers impacting our results for the three and nine months ended September 30, 2017 and 2016. We believe highlighting these significant, non-cash items provides useful additional information to investors. For a further discussion on these key drivers, see —“Management’s Discussion and Analysis of Financial Conditions and Results of Operations — Results of Operations — Consolidated Results of Operations” in our Form 10-Q for the quarter ended September 30, 2017 and 2016.

Key Non-Cash Drivers of Pre-tax Income and Adjusted EBITDA



($ in thousands)	Three Months Ended September 30,									Nine Months Ended September 30,
	2017			2016			Variance			2017			2016			Variance
Unrealized & realized gains (losses) on equity securities	$	(11,125	)	$	1,365		$	(12,490	)	$	(21,183	)	$	10,787		$	(31,970	)
Stock-based compensation	(1,135		)	(633		)	(502		)	(4,275		)	(1,597		)	(2,678		)
Reliance contingent earn-out liability⁽¹⁾	422			—			422			(3,039		)	—			(3,039		)
Depreciation and amortization⁽¹⁾	(7,775		)	(6,437		)	(1,338		)	(23,781		)	(21,899		)	(1,882		)

________________________________


(1)	Added back to Adjusted EBITDA. For a reconciliation of Adjusted EBITDA to GAAP financials, see “—Non-GAAP Reconciliations.”

Net Income (Loss) Available to Class A Common Stockholders

For the three months ended September 30, 2017, net loss available to Class A common stockholders was $3.1 million, a decrease of $9.0 million from the prior year period. For the nine months ended September 30, 2017, net income available to Class A common stockholders was $6.5 million, a decrease of $24.1 million from the prior year period. The key drivers of net income available to Class A common stockholders were the same factors which impacted the net income before non-controlling interests.

Non-GAAP

Management uses Adjusted EBITDA and book value per share, as exchanged as measurements of operating performance which are non-GAAP measures. Management believes that use of Adjusted EBITDA provides supplemental information useful to investors as it is frequently used by the financial community to analyze financial performance, and to analyze a company’s ability to service its debt and to facilitate comparison among companies. Adjusted EBITDA is also used in determining incentive compensation for the Company’s executive officers. Adjusted EBITDA is not a measurement of financial performance or liquidity under GAAP and should not be considered as an alternative or substitute for GAAP net income. Book value per share, as exchanged assumes full exchange of the limited partners units of TFP for Tiptree Class A common stock. Management believes that use of this financial measure provides supplemental information useful to investors as it is frequently used by the financial community to analyze company growth on a relative per share basis.

Total Adjusted EBITDA for the three months ended September 30, 2017 was $4.8 million compared to $20.1 million for the 2016 period, a decrease of $15.3 million, or 76.0%. Total Adjusted EBITDA for the nine months ended September 30, 2017 was $23.3 million compared to $52.9 million for the 2016 period, a decrease of $29.5 million, or 55.8%. The key drivers of the change in Adjusted EBITDA were the same as those which impacted our net income, excluding the increase in the Reliance earn-out and the year-over-year change in the tax provision. See “— Non-GAAP Reconciliations” for a reconciliation to GAAP net income.

As exchanged book value per share for the period ended September 30, 2017 was $9.67, down from $9.93 as of September 30, 2016. The key drivers of the year-over-year impact were increases from trailing twelve month diluted earnings per share and re-purchases of 1.0 million shares at an average 28% discount to book value. Those increases were more than offset by cumulative dividends paid of $0.115, officer and director compensation share issuances over the last twelve months and the exercise of the Tricadia Option in June 2017 resulting in 1.5 million shares being issued at $5.36 per share. Given the strike price of the option, the impact was a $0.19 reduction to book value per share.

Page 3

Results by Segment

Effective December 31, 2016, Tiptree realigned the principal investments formerly reported in the corporate and other segment into their new reportable segments to align with the Company’s operating strategy. The table below reflects the credit and equity investments contributed to our insurance subsidiary in the specialty insurance segment and the CLO subordinated notes and related warehouse income in the asset management segment for the three and nine months ended September 30, 2017 and 2016.



($ in thousands)	Three Months Ended September 30,						Nine Months Ended September 30,
	2017			2016			2017			2016
Specialty insurance	$	(2,345	)	$	10,659		$	1,724		$	35,627
Asset management	2,973			6,475			13,083			14,672
Senior living	(1,535		)	(473		)	(5,359		)	(5,487		)
Specialty finance	2,595			4,181			2,629			5,510
Corporate and other	(7,118		)	(9,292		)	(22,198		)	(22,751		)
Pre-tax income	$	(5,430	)	$	11,550		$	(10,121	)	$	27,571



	Adjusted EBITDA⁽¹⁾
($ in thousands)	Three Months Ended September 30,						Nine Months Ended September 30,
	2017			2016			2017			2016
Specialty insurance	$	2,318		$	14,220		$	15,566		$	45,556
Asset management	2,973			6,475			13,083			14,672
Senior living	2,859			2,869			8,293			7,194
Specialty finance	2,382			4,479			6,288			6,327
Corporate and other	(5,756		)	(7,915		)	(19,897		)	(20,867		)
Adjusted EBITDA	$	4,776		$	20,128		$	23,333		$	52,882


(1)	For further information relating to the Company’s Adjusted EBITDA, including a reconciliation of the Company’s segments’ Adjusted EBITDA to GAAP pre-tax income, see “—Non-GAAP Reconciliations” below.

About Tiptree

Tiptree Inc. (NASDAQ: TIPT) is focused on enhancing shareholder value by generating consistent growth and profitability at its operating companies. The Company’s consolidated subsidiaries currently operate in the following businesses - specialty insurance, asset management, senior living and specialty finance. For more information about Tiptree visit www.tiptreeinc.com.

Forward-Looking Statements

This release contains “forward-looking statements” which involve risks, uncertainties and contingencies, many of which are beyond the Company’s control, which may cause actual results, performance, or achievements to differ materially from anticipated results, performance, or achievements. All statements contained in this release that are not clearly historical in nature are forward-looking, and the words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “project,” “should,” “target,” “will,” or similar expressions are intended to identify forward-looking statements. Such forward-looking statements include, but are not limited to, statements about the Company’s plans, objectives, expectations and intentions. The forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, many of which are beyond our control, are difficult to predict and could cause actual results to differ materially from those expressed or forecast in the forward-looking statements. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including, but not limited to those described in the section entitled “Risk Factors” in the Company’s Annual Report on Form 10-K, and as described in the Company’s other filings with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as to the date of this release. The factors described therein are not necessarily all of the important factors that could cause actual results or developments to differ materially from those expressed in any of our forward-looking statements. Other unknown or unpredictable factors also could affect our forward-looking statements. Consequently, our actual performance could be materially different from the results described or anticipated by our forward-looking statements. Given these uncertainties, you should not place undue reliance on these forward-looking statements. Except as required by the federal securities laws, we undertake no obligation to update any forward-looking statements.

Page 4

Tiptree Inc.

Condensed Consolidated Balance Sheet (Unaudited)

($ in thousands, except share data)



	As of
	September 30, 2017			December 31, 2016
Assets
Investments:
Available for sale securities, at fair value	$	164,093		$	146,171
Loans, at fair value	323,122			373,089
Loans at amortized cost, net	150,596			113,838
Equity securities, trading, at fair value	28,106			48,612
Real estate, net	371,137			309,423
Other investments	27,191			25,467
Total investments	1,064,245			1,016,600
Cash and cash equivalents	111,751			63,010
Restricted cash	23,400			24,472
Notes and accounts receivable, net	178,726			157,500
Reinsurance receivables	333,023			296,234
Deferred acquisition costs	139,471			126,608
Goodwill and intangible assets, net	176,820			178,245
Other assets	48,544			37,886
Assets of consolidated CLOs	372,774			989,495
Total assets	$	2,448,754		$	2,890,050

Liabilities and Stockholders’ Equity
Liabilities
Debt, net	$	865,629		$	793,009
Unearned premiums	475,047			414,960
Policy liabilities and unpaid claims	110,928			103,391
Deferred revenue	53,930			52,254
Reinsurance payable	81,887			70,588
Other liabilities and accrued expenses	115,858			133,735
Liabilities of consolidated CLOs	354,337			931,969
Total liabilities	$	2,057,616		$	2,499,906

Stockholders’ Equity
Preferred stock: $0.001 par value, 100,000,000 shares authorized, none issued or outstanding	$	—		$	—
Common stock - Class A: $0.001 par value, 200,000,000 shares authorized, 35,003,004 and 34,983,616 shares issued and outstanding, respectively	35			35
Common stock - Class B: $0.001 par value, 50,000,000 shares authorized, 8,049,029 and 8,049,029 shares issued and outstanding, respectively	8			8
Additional paid-in capital	296,476			297,391
Accumulated other comprehensive income (loss), net of tax	1,223			555
Retained earnings	28,913			37,974
Class A common stock held by subsidiaries, 5,209,523 and 6,596,000 shares, respectively	(34,664		)	(42,524		)
Class B common stock held by subsidiaries, 8,049,029 and 8,049,029 shares, respectively	(8		)	(8		)
Total Tiptree Inc. stockholders’ equity	291,983			293,431
Non-controlling interests (including $74,074 and $76,077 attributable to Tiptree Financial Partners, L.P., respectively)	99,155			96,713
Total stockholders’ equity	391,138			390,144
Total liabilities and stockholders’ equity	$	2,448,754		$	2,890,050

Page 5

Tiptree Inc.

Condensed Consolidated Statements of Operations (Unaudited)

($ in thousands, except share data)



	Three Months Ended September 30,					Nine Months Ended September 30,
	2017			2016		2017			2016
Revenues:
Earned premiums, net	$	96,073		$	47,609	$	272,781		$	138,516
Service and administrative fees	24,018			25,842		70,861			84,421
Ceding commissions	2,513			1,397		6,801			22,645
Net investment income	3,840			3,307		12,032			8,409
Net realized and unrealized gains (losses)	7,526			26,215		35,183			65,954
Rental and related revenue	19,170			15,371		54,819			43,389
Other income	11,379			12,419		33,820			31,725
Total revenues	164,519			132,160		486,297			395,059

Expenses:
Policy and contract benefits	31,570			25,881		94,364			72,436
Commission expense	63,066			24,032		176,405			91,906
Employee compensation and benefits	36,596			38,767		109,437			102,175
Interest expense	10,361			7,839		28,444			20,770
Depreciation and amortization	7,775			6,437		23,781			21,899
Other expenses	23,164			21,686		73,380			68,351
Total expenses	172,532			124,642		505,811			377,537

Results of consolidated CLOs:
Income attributable to consolidated CLOs	7,216			12,556		24,024			34,713
Expenses attributable to consolidated CLOs	4,633			8,524		14,631			24,664
Net income (loss) attributable to consolidated CLOs	2,583			4,032		9,393			10,049
Income (loss) before taxes	(5,430		)	11,550		(10,121		)	27,571
Less: provision (benefit) for income taxes	(2,052		)	3,712		(2,761		)	5,298
Net income (loss) before non-controlling interests	(3,378		)	7,838		(7,360		)	22,273
Less: net income (loss) attributable to non-controlling interests - Tiptree Financial Partners, L.P.	(595		)	1,362		(1,432		)	4,660
Less: net income (loss) attributable to non-controlling interests - Other	331			571		529			20
Net income (loss) attributable to Tiptree Inc. Class A common stockholders	$	(3,114	)	$	5,905	$	(6,457	)	$	17,593

Net income (loss) per Class A common share:
Basic earnings per share	$	(0.11	)	$	0.20	$	(0.22	)	$	0.53

Diluted earnings per share	$	(0.11	)	$	0.19	$	(0.22	)	$	0.53

Weighted average number of Class A common shares:
Basic	29,455,462			29,143,470		28,908,195			32,845,124
Diluted	29,455,462			37,230,650		28,908,195			32,912,516

Dividends declared per common share	$	0.030		$	0.025	$	0.090		$	0.075

Page 6

Tiptree Inc.

Non-GAAP Reconciliations (Unaudited)

Non-GAAP Financial Measures — EBITDA and Adjusted EBITDA

The Company defines EBITDA as GAAP net income of the Company adjusted to add consolidated interest expense, consolidated income taxes and consolidated depreciation and amortization expense as presented in its financial statements and Adjusted EBITDA as EBITDA adjusted to (i) subtract interest expense on asset-specific debt incurred in the ordinary course of its subsidiaries’ business operations, (ii) adjust for the effect of purchase accounting, (iii) add back significant acquisition related costs, (iv) adjust for significant relocation costs and (v) any significant one-time expenses.



($ in thousands)	Three Months Ended September 30,						Nine Months Ended September 30,
	2017			2016			2017			2016
Net income (loss) available to Class A common stockholders	$	(3,114	)	$	5,905		$	(6,457	)	$	17,593
Add: net (loss) income attributable to noncontrolling interests	(264		)	1,933			(903		)	4,680
Income (loss)	$	(3,378	)	$	7,838		$	(7,360	)	$	22,273
Consolidated interest expense	10,361			7,839			28,444			20,770
Consolidated income taxes	(2,052		)	3,712			(2,761		)	5,298
Consolidated depreciation and amortization expense	7,775			6,437			23,781			21,899
EBITDA	$	12,706		$	25,826		$	42,104		$	70,240
Consolidated non-corporate and non-acquisition related interest expense⁽¹⁾	(7,340		)	(4,989		)	(19,510		)	(13,223		)
Effects of Purchase Accounting ⁽²⁾	(306		)	(957		)	(1,205		)	(4,446		)
Non-cash fair value adjustments ⁽³⁾	(309		)	—			3,378			1,416
Significant acquisition expenses ⁽⁴⁾	25			248			302			631
Separation expense adjustments ⁽⁵⁾	—			—			(1,736		)	(1,736		)
Adjusted EBITDA of the Company	$	4,776		$	20,128		$	23,333		$	52,882

______________________



(1)	The consolidated non-corporate and non-acquisition related interest expense is subtracted from EBITDA to arrive at Adjusted EBITDA. This includes interest expense associated with asset-specific debt at subsidiaries in the specialty insurance, asset management, senior living and specialty finance segments.
(2)	Following the purchase accounting adjustments, current period expenses associated with deferred costs were more favorably stated and current period income associated with deferred revenues were less favorably stated. Thus, the purchase accounting effect related to Fortegra increased EBITDA above what the historical basis of accounting would have generated. The impact of this purchase accounting adjustments have been reversed to reflect an adjusted EBITDA without such purchase accounting effect. The impact for the three months ended September 30, 2017 and 2016 was an effective increase to pre-tax earnings of $307 thousand and $408 thousand, respectively.
(3)	For our senior living segment, Adjusted EBITDA excludes the impact of the change of fair value of interest rate swaps hedging the debt at the property level. For Reliance, within our specialty finance segment, Adjusted EBITDA excludes the impact of changes in contingent earn-outs. For our specialty insurance segment, depreciation and amortization on senior living real estate that is within net investment income is added back to Adjusted EBITDA.
(4)	Acquisition costs include legal, taxes, banker fees and other costs associated with senior living acquisitions in 2017 and 2016.
(5)	Consists of payments pursuant to a separation agreement, dated as of November 10, 2015.

Non-GAAP Financial Measures — Segment EBITDA and Adjusted EBITDA from continuing operations

The tables below present EBITDA and Adjusted EBITDA by our four reporting segments specialty insurance, asset management, senior living and specialty finance. Corporate and other contains corporate expenses no allocated to the operating business.



	Three Months Ended September 30,
($ in thousands)	Specialty insurance						Asset management					Senior living						Specialty finance						Corporate and other						Total
	2017			2016			2017			2016		2017			2016			2017			2016			2017			2016			2017			2016
Pre-tax income/(loss)	$	(2,345	)	$	10,659		$	2,973		$	6,475	$	(1,535	)	$	(473	)	$	2,595		$	4,181		$	(7,118	)	$	(9,292	)	$	(5,430	)	$	11,550
Add back:
Interest expense	3,499			2,322			5			—		3,609			2,271			1,949			1,932			1,299			1,314			10,361			7,839
Depreciation and amortization expenses	3,134			3,032			—			—		4,369			3,094			209			248			63			63			7,775			6,437
Segment EBITDA	$	4,288		$	16,013		$	2,978		$	6,475	$	6,443		$	4,892		$	4,753		$	6,361		$	(5,756	)	$	(7,915	)	$	12,706		$	25,826

EBITDA adjustments:
Asset-specific debt interest	(1,777		)	(836		)	(5		)	—		(3,609		)	(2,271		)	(1,949		)	(1,882		)	—			—			(7,340		)	(4,989		)
Effects of purchase accounting	(306		)	(957		)	—			—		—			—			—			—			—			—			(306		)	(957		)
Non-cash fair value adjustments	113			—			—			—		—			—			(422		)	—			—			—			(309		)	—
Significant acquisition expenses	—			—			—			—		25			248			—			—			—			—			25			248
Separation expenses	—			—			—			—		—			—			—			—			—			—			—			—
Segment Adjusted EBITDA	$	2,318		$	14,220		$	2,973		$	6,475	$	2,859		$	2,869		$	2,382		$	4,479		$	(5,756	)	$	(7,915	)	$	4,776		$	20,128

Page 7



	Nine Months Ended September 30,
($ in thousands)	Specialty insurance						Asset management						Senior living						Specialty finance						Corporate and other						Total
	2017			2016			2017			2016			2017			2016			2017			2016			2017			2016			2017			2016
Pre-tax income/(loss)	$	1,724		$	35,627		$	13,083		$	14,672		$	(5,359	)	$	(5,487	)	$	2,629		$	5,510		$	(22,198	)	$	(22,751	)	$	(10,121	)	$	27,571
Add back:
Interest expense	10,534			6,018			7			746			9,309			6,220			4,743			4,352			3,851			3,434			28,444			20,770
Depreciation and amortization expenses	9,625			10,414			—			—			13,350			10,634			620			665			186			186			23,781			21,899
Segment EBITDA	$	21,883		$	52,059		$	13,090		$	15,418		$	17,300		$	11,367		$	7,992		$	10,527		$	(18,161	)	$	(19,131	)	$	42,104		$	70,240

EBITDA adjustments:
Asset-specific debt interest	(5,451		)	(2,057		)	(7		)	(746		)	(9,309		)	(6,220		)	(4,743		)	(4,200		)	—			—			(19,510		)	(13,223		)
Effects of purchase accounting	(1,205		)	(4,446		)	—			—			—			—			—			—			—			—			(1,205		)	(4,446		)
Non-cash fair value adjustments	339			—			—			—			—			1,416			3,039			—			—			—			3,378			1,416
Significant acquisition expenses	—			—			—			—			302			631			—			—			—			—			302			631
Separation expenses	—			—			—			—			—			—			—			—			(1,736		)	(1,736		)	(1,736		)	(1,736		)
Segment Adjusted EBITDA	$	15,566		$	45,556		$	13,083		$	14,672		$	8,293		$	7,194		$	6,288		$	6,327		$	(19,897	)	$	(20,867	)	$	23,333		$	52,882

Non-GAAP Financial Measures — Book value per share, as exchanged

Book value per share, as exchanged assumes full exchange of the limited partners units of TFP for Tiptree Class A common stock. Management believes the use of this financial measure provides supplemental information useful to investors as book value is frequently used by the financial community to analyze company growth on a relative per share basis. The following table provides a reconciliation between total stockholders’ equity and total shares outstanding, net of treasury shares, as of September 30, 2017 and September 30, 2016.



($ in thousands, except per share information)	Nine Months Ended September 30,
	2017		2016
Total stockholders’ equity	$	391,138	$	381,341
Less non-controlling interest - other	25,081		19,939
Total stockholders’ equity, net of non-controlling interests - other	$	366,057	$	361,402
Total Class A shares outstanding⁽¹⁾	29,793		28,351
Total Class B shares outstanding	8,049		8,049
Total shares outstanding	37,842		36,400
Book value per share, as exchanged	$	9.67	$	9.93

______________________

(1) As of September 30, 2017, excludes 5,209,523 shares of Class A common stock held by consolidated subsidiaries of the Company. For further discussion of potential dilution from warrants, see Note 23—Earnings per Share, in the Company’s Form 10-Q for the quarter ended September 30, 2017.

Non-GAAP Financial Measures — Specialty Insurance — Investment Portfolio

The following table provides a reconciliation between segment total investments and net investments for the following periods.



($ in thousands)	As of September 30,
	2017			2016
Total Investments	$	426,753		$	398,505
Investment portfolio debt⁽¹⁾	(122,999		)	(101,012		)
Cash and cash equivalents	62,790			16,555
Restricted cash⁽²⁾	3,637			$	6,683
Receivable due from brokers⁽³⁾	1,505			$	—
Liability due to brokers⁽³⁾	(7,733		)	$	(18,836	)
Net investments - Non-GAAP	$	363,953		$	301,895

______________________

(1) Consists of asset-based financing on loans, at fair value including certain credit investments and NPLs, net of deferred financing costs, For further details, see Note 11 - Debt, net, in the Company’s Form 10-Q for the quarter ended September 30, 2017.

(2) Restricted cash available to invest within certain credit investment funds which are consolidated under GAAP.

(3) Receivable due from and Liability due to brokers for unsettled trades within certain credit investment funds which are consolidated under GAAP.

Page 8