Continued Momentum in Global Lifestyle While
Weaker Global Housing Performance Lowered Results
Revised 2022 Outlook for Adjusted EBITDA to 3
to 6 Percent Growth and Adjusted EPS to 14 to 18 Percent Growth,
Both Ex. Catastrophes
Assurant, Inc. (NYSE: AIZ), a leading global business services
company that supports, protects and connects major consumer
purchases, today reported results for the second quarter ended June
30, 2022.
“Overall, we were pleased by the continued earnings growth
momentum of our services-oriented businesses in Global Lifestyle.
Second quarter results were impacted by higher-than-expected costs
in Global Housing associated with the current inflationary
environment. We have initiated actions aimed at managing near-term
macro volatility and positioning the business for long-term
success,” said Assurant President and CEO Keith Demmings.
“We have revised our full-year outlook for 2022 and remain
confident that our combined Lifestyle and Housing business
portfolio will continue to deliver attractive profitable growth,
strong cash flow generation and superior shareholder returns
relative to the broader market,” Demmings added.
(Unaudited)
Q2'22
Q2'21
Change
6M'22
6M'21
Change
$ in millions, except where
noted
GAAP net income
52.2
187.1
(72)%
201.2
327.9
(39)%
Adjusted EBITDA1
257.1
299.7
(14)%
566.0
544.9
4%
Adjusted EBITDA, ex. reportable
catastrophes2
277.4
302.9
(8)%
592.4
594.2
—%
GAAP net income per diluted
share
0.95
3.05
(69)%
3.61
5.33
(32)%
Adjusted earnings per diluted
share3
2.95
3.24
(9)%
6.85
5.74
19%
Adjusted earnings, ex. reportable
catastrophes, per diluted share4
3.25
3.28
(1)%
7.22
6.37
13%
Note: The Company has revised all quarterly and annual results
for full year 2020 through first quarter 2022 to reflect:
- a change in the Adjusted EBITDA calculation to exclude certain
businesses which the Company now expects to fully exit, including
the long-tail commercial liability businesses in Global Housing
(sharing economy and small commercial businesses) as well as
certain legacy long-duration insurance policies within Global
Lifestyle (collectively referred to as “non-core operations”);
and
- the correction of an error identified in second quarter 2022
related to reinsurance of claims and benefits payables within the
Global Lifestyle segment occurring in late 2018 through first
quarter 2022; the correction of an error in the classification of
Hurricane Eta from fourth quarter 2020, which should have been
classified as a reportable catastrophe; and other unrelated
immaterial out-of-period errors.
The impact of these changes, individually or in the aggregate,
is not material to the Company’s results for any prior period. A
full reconciliation of certain revised key measures of performance
and metrics can be found on pages 18-19 in the Financial Supplement
located on Assurant’s Investor Relations website:
https://ir.assurant.com/investor/default.aspx.
References to net income, including to net income per diluted
share, throughout this press release refer to net income from
continuing operations. Some of the metrics throughout this press
release are non-GAAP measures of performance. A full reconciliation
of each non-GAAP measure to the most comparable GAAP measure can be
found in the Non-GAAP Financial Measures section.
Second Quarter 2022
Summary
- GAAP net income decreased 72 percent versus prior year period,
while net income per diluted share decreased 69 percent
- Adjusted EBITDA, excluding reportable catastrophes2, decreased
8 percent to $277 million
- Adjusted earnings, excluding reportable catastrophes, per
diluted share4, decreased 1 percent to $3.25
- Holding company liquidity was $595 million
- Share repurchases and common stock dividends totaled $271
million
2022 Outlook
The company now expects:
- 3 to 6 percent growth in Adjusted EBITDA, excluding reportable
catastrophes5, driven by profitable growth in Global Lifestyle,
partially offset by a decline in Global Housing
- 14 to 18 percent growth in Adjusted earnings, excluding
reportable catastrophes, per diluted share5, driven by share
repurchases and continued profitable earnings growth
Second Quarter 2022 Consolidated Results
(Unaudited)
Q2'22
Q2'21
Change
6M'22
6M'21
Change
$ in millions
GAAP net income
52.2
187.1
(72)%
201.2
327.9
(39)%
Adjusted
EBITDA
Global Lifestyle
206.8
184.2
12%
421.4
369.7
14%
Global Housing
75.2
132.4
(43)%
191.7
220.0
(13)%
Corporate and Other
(24.9)
(16.9)
(47)%
(47.1)
(44.8)
(5)%
Adjusted EBITDA1
257.1
299.7
(14)%
566.0
544.9
4%
Reportable catastrophes
20.3
3.2
26.4
49.3
Adjusted
EBITDA, ex. reportable catastrophes
Global Lifestyle2
206.8
184.2
12%
421.3
369.7
14%
Global Housing2
95.5
135.5
(30)%
218.2
269.1
(19)%
Corporate and Other2
(24.9)
(16.8)
(48)%
(47.1)
(44.6)
(6)%
Adjusted EBITDA, ex.
reportable catastrophes2
277.4
302.9
(8)%
592.4
594.2
—%
Note: Some of the metrics throughout this press release are
non-GAAP measures of performance. A full reconciliation of each
non-GAAP measure to the most comparable GAAP measure can be found
in the Non-GAAP Financial Measures section. Adjusted EBITDA of the
Global Lifestyle, Global Housing and Corporate and Other segments
is the segment measure of profitability in our GAAP financial
statements and includes reportable catastrophes. Additional details
regarding key financial metrics are included in the Financial
Supplement located on Assurant’s Investor Relations website:
https://ir.assurant.com/investor/default.aspx
Second Quarter 2022 Consolidated Results
- GAAP net income was $52.2 million, compared to second
quarter 2021 of $187.1 million. The decline was primarily due to a
decrease in net unrealized gains from changes in fair value of
equity securities, lower earnings contributions from Global
Housing, and a $29.4 million after-tax decrease in earnings from
non-core operations, mostly driven by adverse prior year reserve
development from sharing economy.
- GAAP net income per diluted share was $0.95,
compared to second quarter 2021 of $3.05. The decrease was
primarily driven by the factors noted above, partially offset by
ongoing share repurchases.
- Adjusted EBITDA1 decreased 14 percent compared to the
prior year period. Pre-tax reportable catastrophes increased $17.1
million. Excluding reportable catastrophes, Adjusted EBITDA2
decreased 8 percent to $277.4 million, primarily due to higher
non-catastrophe loss experience and catastrophe reinsurance costs
in Global Housing. This was partially offset by double-digit growth
in Global Lifestyle from continued strong results in Connected
Living and Global Automotive.
- Adjusted earnings, excluding reportable catastrophes, per
diluted share4, decreased 1 percent to $3.25, as lower earnings
were partially offset by ongoing share repurchases.
- Revenue from the Global Lifestyle and Global Housing
segments totaled $2.48 billion compared to $2.43 billion in second
quarter 2021, up 2 percent, primarily due to Global Automotive
growth within Global Lifestyle.
Note: Throughout this press release, revenue refers to net
earned premiums, fees and other income. GAAP revenue is equal to
net earned premiums, fees and other income, net investment income
and net realized gains (losses) on investments.
Global Lifestyle
$ in millions
Q2'22
Q2'21
Change
6M'22
6M'21
Change
Adjusted EBITDA
206.8
184.2
12%
421.4
369.7
14%
Revenue
1,983.3
1,935.7
2%
3,943.2
3,795.8
4%
- Adjusted EBITDA increased compared to the prior year
period from continued strong results across Connected Living and
Global Automotive. Connected Living growth was primarily led by
mobile from higher device protection contributions in North
America, including subscriber growth and more favorable loss
experience. Global Automotive increased primarily from higher
investment income mainly from the sale of a real estate joint
venture partnership and higher yields, as well as favorable loss
experience in select ancillary products. Growth was partially
offset by the unfavorable impact of foreign exchange.
- Revenue increased compared to the prior year period,
primarily led by Global Automotive premium growth from strong prior
period sales. Connected Living decreased modestly, mainly from the
impact of runoff mobile programs, partially offset by higher mobile
fee income driven by an increase in global devices serviced, as
well as device protection growth in North America.
Global Housing
$ in millions
Q2'22
Q2'21
Change
6M'22
6M'21
Change
Adjusted EBITDA
75.2
132.4
(43)%
191.7
220.0
(13)%
Reportable catastrophes
20.3
3.1
26.5
49.1
Adjusted EBITDA, ex. reportable
catastrophes2
95.5
135.5
(30)%
218.2
269.1
(19)%
Revenue
495.7
496.8
—%
981.7
976.5
1%
- Adjusted EBITDA decreased compared to the prior year
period. Pre-tax reportable catastrophes increased $17.2 million,
primarily due to prior period development from Hurricane Eta and
current period losses from Tropical Storm Alex. Excluding
reportable catastrophes, Adjusted EBITDA2 decreased $40.0 million
year-over-year. Approximately $25.0 million of the decrease was
driven by higher non-catastrophe loss experience, largely within
lender-placed, from higher claims severity related to inflation.
Higher loss experience included a $12.0 million year-over-year
increase in reserves for prior and current year periods along with
elevated severity in the current quarter, particularly from fire
claims. The remainder of the decline was mainly from higher
catastrophe reinsurance costs, largely driven by increased
exposures.
- Revenue was flat year-over-year, as growth in
lender-placed from higher average insured values and premium rates
were offset by higher catastrophe reinsurance costs.
Corporate and Other
$ in millions
Q2'22
Q2'21
Change
6M'22
6M'21
Change
Adjusted EBITDA
(24.9)
(16.9)
(47)%
(47.1)
(44.8)
(5)%
- Adjusted EBITDA loss increased in second quarter 2022
compared to the prior year period, primarily driven by higher
employee-related and technology expenses.
Holding Company Liquidity Position
- Holding company liquidity totaled $595 million as of
June 30, 2022, or $370 million above the company’s current targeted
minimum level of $225 million.
Dividends paid by operating segments to the holding company in
second quarter 2022 totaled $189 million. In addition to quarterly
interest and Corporate and Other expenses, the company had $82
million of cash outflows, including a $75 million repayment in
principal of its 2023 Senior Notes as well as $6 million of
investments within Assurant Ventures.
- Share repurchases and common stock dividends totaled
$271 million in second quarter 2022. During second quarter 2022,
Assurant repurchased 1.3 million shares of common stock for $232
million and paid $39 million in common stock dividends. From July 1
through July 31, 2022, the company repurchased an additional 175
thousand shares for approximately $30 million, with $338 million
remaining under the current repurchase authorization.
2022 Company Outlook5
$ in millions, unless
otherwise noted
FY 2021 As Reported
FY 2021
As Revised
Q2'22 YTD
2022 Outlook5
Adjusted EBITDA, ex. reportable
catastrophes2
1,107.5
1,121.5
592.4
3 to 6 percent growth
Global Lifestyle
714.2
702.1
421.4
Mid- to high-teens growth
Global Housing, ex. reportable
catastrophes2
486.4
512.2
218.2
Low- to mid-teens decline
Corporate and Other
(93.3)
(93.3)
(47.1)
~(105.0)
Adjusted earnings, ex. reportable
catastrophes, per diluted share4
$12.12
$12.28
$7.22
14 to 18 percent growth
For full-year 2022, the company now expects:
- Adjusted EBITDA, excluding reportable catastrophes, to grow 3
to 6 percent, driven by growth in Global Lifestyle.
- Global Lifestyle Adjusted EBITDA is expected to increase by
mid- to high-teens, driven mainly by mobile in Connected Living
from global expansion in existing and new clients across device
protection and trade-in and upgrade programs. This will be
partially offset by unfavorable impacts of foreign exchange and
strategic investments to support new business opportunities. Global
Automotive is also expected to increase, driven by higher
investment income and more favorable loss experience in select
ancillary products.
- Global Housing Adjusted EBITDA, excluding reportable
catastrophes, is expected to decrease by low- to mid-teens,
primarily due to higher non-catastrophe loss experience related to
elevated inflationary trends, mainly in lender-placed, as well as
increased catastrophe reinsurance costs. The decline will be
partially offset by higher average insured values and premium rates
in lender-placed, along with ongoing expense initiatives.
- Corporate and Other Adjusted EBITDA loss is expected to be
approximately $105.0 million, reflecting higher employee-related
and technology expenses.
- Adjusted earnings, excluding reportable catastrophes, per
diluted share to increase 14 to 18 percent, driven by share
repurchases, including the return of net proceeds from the sale of
Global Preneed, and earnings growth in Global Lifestyle. Assurant’s
consolidated effective tax rate is expected to be approximately 22
to 24 percent, which reflects the impact of the first quarter tax
benefit.
- Business segment dividends to be moderately below the company’s
average annual target of approximately three quarters of segment
Adjusted EBITDA, including reportable catastrophes. This is subject
to the growth of the businesses, investment portfolio performance,
and rating agency and regulatory capital requirements.
- Capital to be deployed to support business growth by funding
investments and M&A, and to return capital to shareholders in
the form of share repurchases and dividends, subject to Board
approval and market conditions.
Earnings Conference Call
The second quarter 2022 earnings conference call and webcast
will be held Wednesday, August 3, 2022 at 8:00 a.m. ET. The live
and archived webcast, along with supplemental information, will be
available on Assurant’s Investor Relations website:
https://ir.assurant.com/investor/default.aspx
About Assurant
Assurant, Inc. (NYSE: AIZ) is a leading global business services
company that supports, protects and connects major consumer
purchases. A Fortune 500 company with a presence in 21 countries,
Assurant supports the advancement of the connected world by
partnering with the world’s leading brands to develop innovative
solutions and to deliver an enhanced customer experience through
mobile device solutions, extended service contracts, vehicle
protection services, renters insurance, lender-placed insurance
products and other specialty products.
Learn more at assurant.com or on Twitter @Assurant.
Safe Harbor Statement
Some of the statements included in this news release and its
exhibits, including our business and financial plans and any
statements regarding the company’s anticipated future financial
performance, business prospects, growth and operating strategies
and similar matters, may constitute forward-looking statements
within the meaning of the U.S. Private Securities Litigation Reform
Act of 1995.
You can identify forward-looking statements by the use of words
such as “outlook,” “objective,” “will,” “may,” “can,”
“anticipates,” “expects,” “estimates,” “projects,” “intends,”
“plans,” “believes,” “targets,” “forecasts,” “potential,”
“approximately,” and the negative version of those words and other
words and terms with a similar meaning. Any forward-looking
statements contained in this news release or its exhibits are based
upon our historical performance and on current plans, estimates and
expectations. The inclusion of this forward-looking information
should not be regarded as a representation by us or any other
person that our future plans, estimates or expectations will be
achieved. Our actual results might differ materially from those
projected in the forward-looking statements. We undertake no
obligation to update or review any forward-looking statement,
whether as a result of new information, future events or other
developments. The following factors could cause our actual results
to differ materially from those currently estimated by management,
including those projected in the company outlook:
- the loss of significant clients, distributors or other parties
with whom we do business, or if we are unable to renew contracts
with them on favorable terms, or if those parties face financial,
reputational or regulatory issues;
- significant competitive pressures, changes in customer
preferences and disruption;
- the failure to execute our strategy, including through the
continuing service of key executives, senior leaders,
highly-skilled personnel and a high-performing workforce;
- the failure to find suitable acquisitions at attractive prices,
integrate acquired businesses effectively or identify new areas for
organic growth;
- our inability to recover should we experience a business
continuity event;
- the failure to manage vendors and other third parties on whom
we rely to conduct business and provide services to our
clients;
- risks related to our international operations;
- declines in the value of mobile devices, or export compliance
or other risks in our mobile business;
- our inability to develop and maintain distribution sources or
attract and retain sales representatives and executives with key
client relationships;
- risks associated with joint ventures, franchises and
investments in which we share ownership and management with third
parties;
- the impact of catastrophe and non-catastrophe losses, including
as a result of the current inflationary environment and climate
change;
- negative publicity relating to our business or industry;
- the impact of general economic, financial market and political
conditions and conditions in the markets in which we operate,
including the current inflationary environment (that has increased
the costs of paying claims, including for materials and labor, as
well as our employee wages), any prolonged recessionary environment
and the conflict in Ukraine;
- the impact of the COVID-19 pandemic and measures taken in
response thereto;
- the adequacy of reserves established for claims and our
inability to accurately predict and price for claims;
- a decline in financial strength ratings of our insurance
subsidiaries or in our corporate senior debt ratings;
- fluctuations in exchange rates;
- an impairment of goodwill or other intangible assets;
- the failure to maintain effective internal control over
financial reporting;
- unfavorable conditions in the capital and credit markets;
- a decrease in the value of our investment portfolio, including
due to market, credit and liquidity risks, and changes in interest
rates;
- an impairment in the value of our deferred tax assets;
- the unavailability or inadequacy of reinsurance coverage and
the credit risk of reinsurers, including those to whom we have sold
business through reinsurance;
- the credit risk of some of our agents, third-party
administrators and clients;
- the inability of our subsidiaries to pay sufficient dividends
to the holding company and limitations on our ability to declare
and pay dividends or repurchase shares;
- limitations in the analytical models we use to assist in our
decision-making;
- the failure to effectively maintain and modernize our
information technology systems and infrastructure, or the failure
to integrate those of acquired businesses;
- breaches of our information systems or those of third parties
with whom we do business, or the failure to protect the security of
data in such systems, including due to cyberattacks and as a result
of working remotely;
- the costs of complying with, or the failure to comply with,
extensive laws and regulations to which we are subject, including
those related to privacy, data security, data protection or
tax;
- the impact of litigation and regulatory actions;
- reductions or deferrals in the insurance premiums we
charge;
- changes in insurance, tax and other regulations;
- volatility in our common stock price and trading volume;
and
- employee misconduct.
For additional information on factors that could affect our
actual results, please refer to the factors identified in the
reports we file with the U.S. Securities and Exchange Commission
(the “SEC”), including the risk factors identified in our most
recent Annual Report on Form 10-K and Quarterly Reports on Form
10-Q, each as filed with the SEC.
Non-GAAP Financial Measures
Assurant uses the following non-GAAP financial measures to
analyze the company’s operating performance. Assurant’s non-GAAP
financial measures should not be considered in isolation or as a
substitute for GAAP financial measures. Because Assurant’s
calculation of these measures may differ from similar measures used
by other companies, investors should be careful when comparing
Assurant’s non-GAAP financial measures to those of other
companies.
(1) Assurant uses Adjusted EBITDA as an important measure of the
company’s operating performance. Assurant defines Adjusted EBITDA
as net income from continuing operations, excluding net realized
losses (gains) on investments and fair value changes to equity
securities, COVID-19 direct and incremental expenses, loss on
extinguishment of debt, non-core operations, net income (loss)
attributable to non-controlling interests, interest expense,
provision (benefit) for income taxes, depreciation expense,
amortization of purchased intangible assets, restructuring costs
related to strategic exit activities (outside of normal periodic
restructuring and cost management activities), as well as other
highly variable or unusual items. The company believes this metric
provides investors with an important measure of the company’s
operating performance because it excludes items that do not
represent the ongoing operations of the company, and therefore (i)
enhances management’s and investors’ ability to analyze the ongoing
operations of its businesses and (ii) facilitates comparisons of
its operating performance over multiple periods, including because
the amortization expense associated with purchased intangible
assets may fluctuate from period to period based on the timing,
size, nature and number of acquisitions. Although the company
excludes amortization of purchased intangible assets from Adjusted
EBITDA, revenue generated from such intangible assets is included
within the revenue in determining Adjusted EBITDA. The comparable
GAAP measure is net income from continuing operations. See Note 2
below for a full reconciliation.
(2) Adjusted EBITDA, Excluding Reportable Catastrophes: Assurant
uses Adjusted EBITDA (defined above), excluding reportable
catastrophes (which represents individual catastrophic events that
generate losses in excess of $5.0 million, pre-tax, net of
reinsurance and client profit sharing adjustments and including
reinstatement and other premiums), as another important measure of
the company’s performance. The company believes this metric
provides investors with an important measure of the company’s
performance for the reasons noted above, and because it excludes
reportable catastrophes, which can be volatile. The comparable GAAP
measure is net income from continuing operations.
(UNAUDITED)
2Q
2Q
6 Months
6 Months
($ in millions)
2022
2021
2022
2021
GAAP net income from continuing
operations
$
52.2
$
187.1
$
201.2
$
327.9
Less:
Interest expense
27.2
28.8
54.1
57.2
Provision for income taxes
17.7
52.6
43.9
96.6
Depreciation expense
21.8
17.5
42.1
34.3
Amortization of purchased intangible
assets
17.0
17.3
34.6
34.3
Adjustments, pre-tax:
Net realized losses (gains) on investments
and fair value changes to equity securities
76.4
(10.3
)
138.8
(11.1
)
COVID-19 direct and incremental
expenses
1.1
2.2
2.5
5.2
Loss on extinguishment of debt
0.9
—
0.9
—
Non-core operations
36.7
(0.5
)
42.2
(5.6
)
Other adjustments(1)
6.1
5.2
5.7
6.1
Loss attributable to non-controlling
interests
—
(0.2
)
—
—
Adjusted EBITDA
257.1
299.7
566.0
$
544.9
Reportable catastrophes
20.3
3.2
26.4
49.3
Adjusted EBITDA, excluding reportable
catastrophes
$
277.4
$
302.9
$
592.4
$
594.2
(UNAUDITED)
FY 2021
FY 2021
($ in millions)
As Reported
As Revised
GAAP net income from continuing
operations
$
613.5
$
602.9
Less:
Interest expense
111.8
111.8
Provision for income taxes
169.5
168.4
Depreciation expense
73.8
73.8
Amortization of purchased intangible
assets
65.8
65.8
Adjustments, pre-tax:
Net realized losses (gains) on investments
and fair value changes to equity securities
(128.4
)
(128.2
)
COVID-19 direct and incremental
expenses
10.0
10.0
Loss on extinguishment of debt
20.7
20.7
Non-core operations
—
14.4
Other adjustments(1)
26.5
26.3
Loss attributable to non-controlling
interests
—
—
Adjusted EBITDA
$
963.2
965.9
Reportable catastrophes
144.3
155.6
Adjusted EBITDA, excluding reportable
catastrophes
$
1,107.5
$
1,121.5
- Throughout this press release, additional details about the
components of Other adjustments and other key financial metrics are
included in the Financial Supplement located on Assurant’s Investor
Relations website:
https://ir.assurant.com/investor/default.aspx
(UNAUDITED)
2Q 2022
2Q 2021
Global Lifestyle
Global Housing
Corporate and Other
Global Lifestyle
Global Housing
Corporate and Other
($ in millions)
Adjusted EBITDA
$
206.8
$
75.2
$
(24.9
)
$
184.2
$
132.4
$
(16.9
)
Reportable catastrophes
—
20.3
—
—
3.1
0.1
Adjusted EBITDA, excluding reportable
catastrophes
$
206.8
$
95.5
$
(24.9
)
$
184.2
$
135.5
$
(16.8
)
(UNAUDITED)
6 Months 2022
6 Months 2021
Global Lifestyle
Global Housing
Corporate and Other
Global Lifestyle
Global Housing
Corporate and Other
($ in millions)
Adjusted EBITDA
$
421.4
$
191.7
$
(47.1
)
$
369.7
$
220.0
$
(44.8
)
Reportable catastrophes
(0.1
)
26.5
—
—
49.1
0.2
Adjusted EBITDA, excluding reportable
catastrophes
$
421.3
$
218.2
$
(47.1
)
$
369.7
$
269.1
$
(44.6
)
(UNAUDITED)
FY 2021 As
Reported
FY 2021 As
Revised
Global Lifestyle
Global Housing
Corporate and Other
Global Lifestyle
Global Housing
Corporate and Other
($ in millions)
Adjusted EBITDA
$
714.2
$
342.3
$
(93.3
)
$
702.1
$
357.1
$
(93.3
)
Reportable catastrophes
$
0.2
$
144.1
$
—
$
0.2
$
155.1
$
0.3
Adjusted EBITDA, excluding reportable
catastrophes
$
714.4
$
486.4
$
(93.3
)
$
702.3
$
512.2
$
(93.0
)
(3) Adjusted Earnings per Diluted Share: Assurant uses Adjusted
earnings per diluted share as an important measure of the company’s
stockholder value. Assurant defines Adjusted earnings per diluted
share as net income from continuing operations, excluding net
realized losses (gains) on investments and fair value changes to
equity securities, amortization of purchased intangible assets,
COVID-19 direct and incremental expenses, loss on extinguishment of
debt, non-core operations, net income (loss) attributable to
non-controlling interests, restructuring costs related to strategic
exit activities (outside of normal periodic restructuring and cost
management activities), as well as other highly variable or unusual
items, plus any dilutive preferred stock dividends, divided by the
weighted average diluted shares outstanding. The company believes
this metric provides investors with an important measure of
stockholder value because it excludes items that do not represent
the ongoing operations of the company, and therefore (i) enhances
management’s and investors’ ability to analyze the ongoing
operations of its businesses and (ii) facilitates comparisons of
its operating performance over multiple periods, including because
the amortization expense associated with purchased intangible
assets may fluctuate from period to period based on the timing,
size, nature and number of acquisitions. Although the company
excludes amortization of purchased intangible assets from Adjusted
earnings, revenue generated from such intangible assets is included
within the revenue in determining Adjusted earnings. The comparable
GAAP measure is net income from continuing operations per diluted
share, defined as net income from continuing operations plus any
dilutive preferred stock dividends less net income from
non-controlling interests, divided by the weighted average diluted
shares outstanding. See Note 4 below for a full reconciliation.
(4) Adjusted Earnings, Excluding Reportable Catastrophes, per
Diluted Share: Assurant uses Adjusted earnings, excluding
reportable catastrophes, per diluted share (each as defined above)
as another important measure of the company's stockholder value.
The company believes this metric provides investors with an
important measure of stockholder value for the reasons noted above,
and because it excludes reportable catastrophes, which can be
volatile. The comparable GAAP measure is net income from continuing
operations per diluted share (defined above).
(UNAUDITED)
2Q
2Q
6 Months
6 Months
($ in millions)
2022
2021
2022
2021
GAAP net income from continuing
operations
$
52.2
$
187.1
$
201.2
$
327.9
Adjustments, pre-tax:
Net realized losses (gains) on investments
and fair value changes to equity securities
76.4
(10.3
)
138.8
(11.1
)
Amortization of purchased intangible
assets
17.0
17.3
34.6
34.3
COVID-19 direct and incremental
expenses
1.1
2.2
2.5
5.2
Loss on extinguishment of debt
0.9
—
0.9
—
Non-core operations
36.7
(0.5
)
42.2
(5.6
)
Other adjustments
6.1
6.1
5.7
7.9
(Benefit) provision for income taxes
(28.0
)
(2.8
)
(44.9
)
(5.4
)
Net loss attributable to non-controlling
interests
—
(0.2
)
—
—
Preferred stock dividends
—
—
—
(4.7
)
Adjusted earnings
162.4
198.9
381.0
348.5
Reportable catastrophes, pre-tax
20.3
3.2
26.4
49.3
Tax impact of reportable catastrophes
(4.2
)
(0.7
)
(5.5
)
(10.4
)
Adjusted earnings, excluding reportable
catastrophes
$
178.5
$
201.4
$
401.9
$
387.4
(UNAUDITED)
2Q
2Q
6 Months
6 Months
2022
2021
2022
2021
GAAP net income from continuing
operations per diluted share(1)
$
0.95
$
3.05
$
3.61
$
5.33
Adjusted, pre-tax:
Net realized losses (gains) on investments
and fair value changes to equity securities
1.39
(0.17
)
2.49
(0.18
)
Amortization of purchased intangible
assets
0.31
0.28
0.62
0.56
COVID-19 direct and incremental
expenses
0.02
0.04
0.04
0.08
Loss on extinguishment of debt
0.02
—
0.02
—
Non-core operations
0.67
(0.01
)
0.76
(0.09
)
Other adjustments
0.10
0.10
0.12
0.13
(Benefit) provision for income taxes
(0.51
)
(0.05
)
(0.81
)
(0.09
)
Adjusted earnings, per diluted
share
2.95
3.24
6.85
5.74
Reportable catastrophes, pre-tax
0.37
0.05
0.47
0.80
Tax impact of reportable catastrophes
(0.07
)
(0.01
)
(0.10
)
(0.17
)
Adjusted earnings, excluding reportable
catastrophes, per diluted share
$
3.25
$
3.28
$
7.22
$
6.37
(UNAUDITED)
FY 2021
FY 2021
($ in millions)
As Reported
As Revised
GAAP net income from continuing
operations
$
613.5
$
602.9
Adjustments, pre-tax:
Net realized losses (gains) on investments
and fair value changes to equity securities
(128.4
)
(128.2
)
Amortization of purchased intangible
assets
65.8
65.8
COVID-19 direct and incremental
expenses
10.0
10.0
Loss on extinguishment of debt
20.7
20.7
Non-core operations
—
14.4
Other adjustments
31.5
31.3
(Benefit) provision for income taxes
1.5
(1.3
)
Net loss attributable to non-controlling
interests
—
—
Preferred stock dividends
(4.7
)
(4.7
)
Adjusted earnings
609.9
610.9
Reportable catastrophes, pre-tax
144.3
155.6
Tax impact of reportable catastrophes
(30.2
)
(32.7
)
Adjusted earnings, excluding reportable
catastrophes
724.0
$
733.8
(UNAUDITED)
FY 2021
FY 2021
As Reported
As Revised
GAAP net income from continuing
operations per diluted share(1)
$
10.20
$
10.03
Adjusted, pre-tax:
Net realized losses (gains) on investments
and fair value changes to equity securities
(2.14
)
(2.14
)
Amortization of purchased intangible
assets
1.10
1.10
COVID-19 direct and incremental
expenses
0.17
0.17
Loss on extinguishment of debt
0.34
0.34
Non-core operations
—
0.23
Other adjustments
0.53
0.53
(Benefit) provision for income taxes
0.02
(0.02
)
Adjusted earnings, per diluted
share
10.22
10.24
Reportable catastrophes, pre-tax
2.40
2.59
Tax impact of reportable catastrophes
(0.50
)
(0.54
)
Adjusted earnings, excluding reportable
catastrophes, per diluted share
$
12.12
$
12.28
- Throughout this press release, information on the share counts
used in the per share calculations are included in the Financial
Supplement located on Assurant’s Investor Relations website:
https://ir.assurant.com/investor/default.aspx
(5) The company outlook for Adjusted earnings, excluding
reportable catastrophes, per diluted share and Adjusted EBITDA,
excluding reportable catastrophes, for Assurant and Global Housing
each constitute 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 the GAAP components cannot be reliably quantified due to
the combination of variability and volatility of such components
and may, depending on the size of the components, have a
significant impact on the reconciliation. The company is able to
quantify a full-year estimate of interest expense, depreciation
expense and amortization of purchased intangible assets, each on a
pre-tax basis, which are expected to be approximately $107 million,
$85 million and $70 million, respectively. The interest expense
estimate assumes no additional debt is incurred or extinguished in
the forecast period and excludes after-tax interest expenses
included in debt extinguishment and other related costs.
Assurant, Inc. Consolidated Statement of Operations
(unaudited) Three and Six Months Ended June 30, 2022 and
2021
2Q
6 Months
2022
2021
2022
2021
($ in millions except number
of shares and per share amounts)
Revenues
Net earned premiums
$
2,168.9
$
2,150.6
$
4,305.3
$
4,256.2
Fees and other income
325.2
298.5
647.6
548.4
Net investment income
92.0
82.9
178.3
159.2
Net realized (losses) gains on investments
and fair value changes to equity securities
(76.4
)
10.3
(138.8
)
11.1
Total revenues
2,509.7
2,542.3
4,992.4
4,974.9
Benefits, losses and expenses
Policyholder benefits
600.0
535.2
1,090.0
1,066.8
Underwriting, selling, general and
administrative expenses
1,811.7
1,738.6
3,602.3
3,426.4
Interest expense
27.2
28.8
54.1
57.2
Loss on extinguishment of debt
0.9
—
0.9
—
Total benefits, losses and expenses
2,439.8
2,302.6
4,747.3
4,550.4
Income from continuing operations before
provision for income taxes
69.9
239.7
245.1
424.5
Provision for income taxes
17.7
52.6
43.9
96.6
Net income from continuing operations
52.2
187.1
201.2
327.9
Net income from discontinued
operations
—
18.9
—
33.2
Net income
52.2
206.0
201.2
361.1
Less: Net loss attributable to
non-controlling interests
—
(0.2
)
—
—
Net income attributable to
stockholders
52.2
205.8
201.2
361.1
Less: Preferred stock dividends
—
—
—
(4.7
)
Net income attributable to common
stockholders
$
52.2
$
205.8
$
201.2
$
356.4
Net income from continuing operations
per share:
Basic
$
0.96
$
3.07
$
3.65
$
5.46
Diluted
$
0.95
$
3.05
$
3.61
$
5.33
Common stock dividends per
share
$
0.68
$
0.66
$
1.36
$
1.32
Share data:
Basic weighted average shares
outstanding
54,607,321
60,990,609
55,190,104
60,096,711
Diluted weighted average shares
outstanding
55,014,947
61,322,556
55,663,946
61,554,002
Assurant, Inc. Consolidated Condensed Balance Sheets
(unaudited) At June 30, 2022 and December 31, 2021
June 30,
December 31,
2022
2021
($ in millions)
Assets
Investments and cash and cash
equivalents
$
8,790.0
$
10,712.4
Reinsurance recoverables
6,094.8
6,181.2
Deferred acquisition costs
9,359.0
8,811.0
Goodwill
2,558.2
2,571.6
Value of business acquired
397.2
583.4
Other assets
4,529.5
3,984.1
Assets held for sale
—
1,076.9
Total assets
$
31,728.7
$
33,920.6
Liabilities
Policyholder benefits and claims
payable
$
1,944.1
$
2,018.0
Unearned premiums
19,219.5
18,623.7
Debt
2,128.8
2,202.5
Accounts payable and other liabilities
3,976.6
4,547.5
Liabilities held for sale
—
1,064.8
Total liabilities
27,269.0
28,456.5
Stockholders’ equity
Equity, excluding accumulated other
comprehensive income
5,281.9
5,614.1
Accumulated other comprehensive (loss)
income
(822.2
)
(150.0
)
Total equity
4,459.7
5,464.1
Total liabilities and equity
$
31,728.7
$
33,920.6
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220802005977/en/
Media: Linda Recupero Senior Vice President, Global
Enterprise Communications Phone: 201.519.9773
linda.recupero@assurant.com
Stacie Sherer Vice President, Corporate Communications Phone:
917.420.0980 stacie.sherer@assurant.com Investor Relations:
Suzanne Shepherd Senior Vice President, Investor Relations and
Sustainability Phone: 201.788.4324
suzanne.shepherd@assurant.com
Sean Moshier Vice President, Investor Relations Phone:
914.204.2253 sean.moshier@assurant.com
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