Provides Revised 2022 Outlook for Adjusted
EBITDA and Adjusted EPS, Both Ex. Catastrophes
Assurant, Inc. (NYSE: AIZ), a leading global business services
company that supports, protects and connects major consumer
purchases, today announced preliminary third quarter 2022 results
and an updated outlook for full-year 2022.
“Preliminary third quarter 2022 results came in below our
expectations in Global Lifestyle, reflecting the challenging global
macroeconomic environment. Foreign exchange remained a headwind in
the quarter, and the combination of lower program volumes and
higher claims costs in select regions reduced profitability. While
we experienced elevated catastrophe losses, underlying performance
in Global Housing was aligned with our expectations,” said Assurant
President and CEO Keith Demmings.
“Looking at the full year, we still expect Global Lifestyle to
generate high single-digit growth, and we are repositioning Global
Housing to drive improved results in the future, with signs of
early progress in the third quarter. We have continued simplifying
our business portfolio, strengthening key client partnerships, and
sustaining strong employee engagement. As challenging market
conditions are likely to persist, we are taking decisive action to
realize additional expense efficiencies and better position
Assurant for sustained profitable growth next year,” Demmings
added.
Preliminary Third Quarter 2022 Results
(Unaudited and estimated)
Preliminary
Q3'22
Q3'21
$ in millions, except per share
data
GAAP net income
7
151
Adjusted
EBITDA
Global Lifestyle
166
176
Global Housing
(25)
15
Corporate and Other
(25)
(23)
Adjusted EBITDA1
116
169
Reportable catastrophes
124
102
Adjusted EBITDA,
ex. reportable catastrophes
Global Lifestyle2
165
176
Global Housing2
99
117
Corporate and Other
(25)
(23)
Adjusted EBITDA, ex. reportable
catastrophes2
240
270
GAAP net income per diluted
share
$0.14
$2.54
Adjusted earnings per diluted
share3
$1.01
$1.69
Adjusted earnings, ex. reportable
catastrophes, per diluted share4
$2.81
$3.04
Note: As previously disclosed, the company
revised all quarterly and annual results for full year 2020 through
first quarter 2022 to reflect certain changes. More information and
a full reconciliation of certain historical revised key measures of
performance and metrics can be found in the second quarter 2022
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 news release refer to net
income from continuing operations. Some of the metrics throughout
this news 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.
For the third quarter 2022, GAAP net income and GAAP net income
per diluted share are expected to decline year-over-year, primarily
due to the absence of net unrealized gains from Assurant Ventures
in third quarter 2021 and an increase in net realized losses from
sales of fixed maturity securities.
Adjusted EBITDA1 is expected to decrease compared to the prior
year period due to reduced segment earnings and higher reportable
catastrophes. The company expects to record $124 million pre-tax in
reportable catastrophes for the third quarter 2022 primarily
related to Hurricane Ian. This includes the company’s $80 million
pre-tax per-event retention and $35 million of associated
reinstatement premiums to restore up to Layer 3 of the company’s
U.S. catastrophe reinsurance program.
Global Lifestyle Adjusted EBITDA is expected to decrease
year-over-year largely reflecting the challenging macroeconomic
environment. Excluding a one-time $11 million client contract
benefit in the quarter, underlying results were impacted by
unfavorable foreign exchange in Asia Pacific and Europe, higher
claims costs in Connected Living and reduced mobile trade-in
margins that are expected to normalize in the fourth quarter. This
was partially offset by continued mobile subscriber growth in North
America.
Global Housing Adjusted EBITDA is expected to decrease
year-over-year primarily due to higher reportable catastrophes.
Excluding reportable catastrophes, Global Housing Adjusted EBITDA2
is expected to decrease primarily due to higher non-catastrophe
loss experience across all major products, including prior period
loss development. In lender-placed, the elevated loss experience,
as well as higher catastrophe reinsurance costs, are expected to be
largely offset by higher average insured values and premium
rates.
Adjusted earnings, excluding reportable catastrophes, per
diluted share4, is expected to decrease year-over-year, as lower
earnings are expected to be partially offset by share repurchase
activity.
As of September 30, 2022, holding company liquidity is expected
to total $529 million, or $304 million above the company’s current
targeted minimum level of $225 million. Share repurchases and
common stock dividends amounted to $117 million in third quarter
2022, which included the repurchase of 500 thousand shares of
common stock for $80 million and the payment of $37 million in
common stock dividends.
Updated Full-Year 2022 Outlook5
$ in millions, except per share
data
FY 2021
2022 Outlook5
Adjusted EBITDA, ex. reportable
catastrophes2
1,121.5
Modest decline to flat
Global Lifestyle
702.1
High single-digit growth
Global Housing, ex. reportable
catastrophes2
512.2
Low- to mid-teens decline
Corporate and Other
(93.3)
~(105.0)
Adjusted earnings, ex. reportable
catastrophes, per diluted share4
$12.28
High single-digit growth
Based on current market conditions, for full-year 2022, the
company now expects Adjusted EBITDA, excluding reportable
catastrophes, to be modestly down to flat compared to 2021 results.
Global Lifestyle is expected to grow high single-digits despite
more substantial headwinds from unfavorable foreign exchange and
lower international contributions than originally anticipated.
The company now expects Adjusted earnings, excluding reportable
catastrophes, per diluted share, to grow high single-digits due to
lower earnings, partially offset by share repurchase activity.
Looking ahead, Assurant is implementing several initiatives to
drive greater expense efficiencies and position the company for
profitable growth in 2023. These include actions to optimize its
organizational structure, real estate rationalization and targeted
investments to accelerate the adoption of digital-first solutions
to deliver a superior customer experience and drive operational
efficiencies.
Third Quarter 2022 Results and Conference Call
The third quarter 2022 results will be announced after-market on
Tuesday, November 1, 2022, with the earnings conference call and
webcast to be held on Wednesday, November 2, 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 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, including in the current
environment;
- 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, including the
Inflation Reduction Act of 2022;
- 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,
including the risk factors identified in our most recent Annual
Report on Form 10-K and Quarterly Reports on Form 10-Q.
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 $5.0 million, pre-tax, net of
reinsurance and client profit sharing adjustments and including
reinstatement and other premiums), as another important measure of
the company’s performance. The company believes this metric
provides investors with an important measure of the company’s
performance for the reasons noted above, and because it excludes
reportable catastrophes, which can be volatile. The comparable GAAP
measure is net income from continuing operations.
(UNAUDITED)
Prelim. 3Q
3Q
Prelim. 9 Months
9 Months
FY 2021
($ in millions)
2022
2021
2022
2021
GAAP net income from continuing
operations
$
7.3
$
151.0
$
208.5
$
478.9
$
602.9
Less:
Interest expense
26.3
27.5
80.4
84.7
111.8
Provision for income taxes
1.2
37.2
45.1
133.8
168.4
Depreciation expense
22.6
18.1
64.7
52.4
73.8
Amortization of purchased intangible
assets
17.3
15.7
51.9
50.0
65.8
Adjustments, pre-tax:
Net realized losses (gains) on investments
and fair value changes to equity securities
27.4
(112.1
)
166.2
(123.2
)
(128.2
)
COVID-19 direct and incremental
expenses
1.1
2.0
3.6
7.2
10.0
Loss on extinguishment of debt
—
20.7
0.9
20.7
20.7
Non-core operations
2.9
8.2
45.1
2.6
14.4
Other adjustments(1)
9.9
0.2
15.6
6.3
26.3
Adjusted EBITDA
116.0
168.5
682.0
713.4
965.9
Reportable catastrophes
123.6
101.8
150.0
151.1
155.6
Adjusted EBITDA, excluding reportable
catastrophes
$
239.6
$
270.3
$
832.0
$
864.5
$
1,121.5
- Additional details about the components of Other adjustments
and other key financial metrics throughout this news release are
included in the Financial Supplement located on Assurant’s Investor
Relations website:
https://ir.assurant.com/investor/default.aspx
(UNAUDITED)
Prelim. 3Q 2022
3Q 2021
Global Lifestyle
Global Housing
Global Lifestyle
Global Housing
($ in millions)
Adjusted EBITDA
$
165.9
$
(25.0
)
$
176.3
$
15.2
Reportable catastrophes
(0.5
)
124.1
0.1
101.7
Adjusted EBITDA, excluding reportable
catastrophes
$
165.4
$
99.1
$
176.4
$
116.9
(UNAUDITED)
Prelim. 9 Months 2022
9 Months 2021
Global Lifestyle
Global Housing
Global Lifestyle
Global Housing
($ in millions)
Adjusted EBITDA
$
587.3
$
166.7
$
546.0
$
235.2
Reportable catastrophes
(0.6
)
150.6
0.3
150.8
Adjusted EBITDA, excluding reportable
catastrophes
$
586.7
$
317.3
$
546.3
$
386.0
(UNAUDITED)
FY 2021
Global Housing
($ in millions)
Adjusted EBITDA
$
357.1
Reportable catastrophes
155.1
Adjusted EBITDA, excluding reportable
catastrophes
$
512.2
(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)
Prelim. 3Q
3Q
Prelim. 9 Months
9 Months
($ in millions)
2022
2021
2022
2021
GAAP net income from continuing
operations
$
7.3
$
151.0
$
208.5
$
478.9
Adjustments, pre-tax:
Net realized losses (gains) on investments
and fair value changes to equity securities
27.4
(112.1
)
166.2
(123.2
)
Amortization of purchased intangible
assets
17.3
15.7
51.9
50.0
COVID-19 direct and incremental
expenses
1.1
2.0
3.6
7.2
Loss on extinguishment of debt
—
20.7
0.9
20.7
Non-core operations
2.9
8.2
45.1
2.6
Other adjustments
9.9
1.1
15.6
9.0
(Benefit) provision for income taxes
(11.2
)
13.7
(56.1
)
8.3
Preferred stock dividends
—
—
—
(4.7
)
Adjusted earnings
54.7
100.3
435.7
448.8
Reportable catastrophes, pre-tax
123.6
101.8
150.0
151.1
Tax impact of reportable catastrophes
(26.0
)
(21.4
)
(31.5
)
(31.8
)
Adjusted earnings, excluding reportable
catastrophes
$
152.3
$
180.7
$
554.2
$
568.1
(UNAUDITED)
Prelim. 3Q
3Q
Prelim. 9 Months
9 Months
2022
2021
2022
2021
GAAP net income from continuing
operations per diluted share(1)
$
0.14
$
2.54
$
3.78
$
7.87
Adjustments, pre-tax:
Net realized losses (gains) on investments
and fair value changes to equity securities
0.51
(1.88
)
3.01
(2.02
)
Amortization of purchased intangible
assets
0.32
0.26
0.94
0.82
COVID-19 direct and incremental
expenses
0.02
0.03
0.07
0.12
Loss on extinguishment of debt
—
0.35
0.02
0.34
Non-core operations
0.05
0.14
0.82
0.03
Other adjustments
0.18
0.02
0.28
0.15
(Benefit) provision for income taxes
(0.21
)
0.23
(1.02
)
0.14
Adjusted earnings, per diluted
share
1.01
1.69
7.90
7.45
Reportable catastrophes, pre-tax
2.28
1.71
2.72
2.48
Tax impact of reportable catastrophes
(0.48
)
(0.36
)
(0.57
)
(0.52
)
Adjusted earnings, excluding reportable
catastrophes, per diluted share
$
2.81
$
3.04
$
10.05
$
9.41
(UNAUDITED)
($ in millions)
FY 2021
GAAP net income from continuing
operations
$
602.9
Adjustments, pre-tax:
Net realized gains on investments and fair
value changes to equity securities
(128.2
)
Amortization of purchased intangible
assets
65.8
COVID-19 direct and incremental
expenses
10.0
Loss on extinguishment of debt
20.7
Non-core operations
14.4
Other adjustments
31.3
Benefit for income taxes
(1.3
)
Preferred stock dividends
(4.7
)
Adjusted earnings
610.9
Reportable catastrophes, pre-tax
155.6
Tax impact of reportable catastrophes
(32.7
)
Adjusted earnings, excluding reportable
catastrophes
$
733.8
(UNAUDITED)
FY 2021
GAAP net income from continuing
operations per diluted share(1)
$
10.03
Adjustments, pre-tax:
Net realized gains on investments and fair
value changes to equity securities
(2.14
)
Amortization of purchased intangible
assets
1.10
COVID-19 direct and incremental
expenses
0.17
Loss on extinguishment of debt
0.34
Non-core operations
0.23
Other adjustments
0.53
Benefit for income taxes
(0.02
)
Adjusted earnings, per diluted
share
10.24
Reportable catastrophes, pre-tax
2.59
Tax impact of reportable catastrophes
(0.55
)
Adjusted earnings, excluding reportable
catastrophes, per diluted share
$
12.28
- Information on the share counts used in the per share
calculations throughout this news release 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,
$88 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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20221025005969/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
Assurant (NYSE:AIZ)
Historical Stock Chart
Von Mär 2024 bis Apr 2024
Assurant (NYSE:AIZ)
Historical Stock Chart
Von Apr 2023 bis Apr 2024