Attached files
| file | filename |
|---|---|
| 8-K - 8-K - ASSURANT, INC. | aiz-20160301xaebstandalone8k.htm |
| EX-99.1 - EXHIBIT 99.1 - ASSURANT, INC. | exhibit991-newsrelease.htm |
Exhibit 99.2
Assurant, Inc.
Pro Forma Consolidated Statement of Operations
Year Ended December 31, 2015
As Reported | Pro Forma Adjustment (1) | Note | Pro Forma | |||||||||
(in thousands except number of shares and per share amounts) | ||||||||||||
(Unaudited) | ||||||||||||
Revenues | ||||||||||||
Net earned premiums | $ | 8,350,997 | $ | (1,066,754 | ) | $ | 7,284,243 | |||||
Net investment income | 626,217 | (110,998 | ) | 515,219 | ||||||||
Net realized gains on investments, excluding other-than-temporary impairment losses | 36,850 | — | 36,850 | |||||||||
Total other-than-temporary impairment losses | (7,212 | ) | — | (7,212 | ) | |||||||
Portion of net loss recognized in other comprehensive income, before taxes | 2,188 | — | 2,188 | |||||||||
Net other-than-temporary impairment losses recognized in earnings | (5,024 | ) | — | (5,024 | ) | |||||||
Amortization of deferred gain on disposal of business | 12,988 | 392,000 | (2) | 404,988 | ||||||||
Fees and other income | 1,303,466 | (25,006 | ) | 1,278,460 | ||||||||
Total revenues | 10,325,494 | (810,758 | ) | 9,514,736 | ||||||||
Benefits, losses and expenses | ||||||||||||
Policyholder benefits | 4,742,535 | (730,192 | ) | 4,012,343 | ||||||||
Amortization of deferred acquisition costs and value of business acquired | 1,402,573 | (32,836 | ) | 1,369,737 | ||||||||
Underwriting, general and administrative expenses | 3,924,089 | (371,728 | ) | (3) | 3,552,361 | |||||||
Interest expense | 55,116 | — | 55,116 | |||||||||
Total benefits, losses and expenses | 10,124,313 | (1,134,756 | ) | 8,989,557 | ||||||||
Income before provision for income taxes | 201,181 | 323,998 | 525,179 | |||||||||
Provision for income taxes | 59,626 | 112,745 | (2)(3) | 172,371 | ||||||||
Net income | $ | 141,555 | $ | 211,253 | $ | 352,808 | ||||||
Earnings Per Share | ||||||||||||
Basic | $ | 2.08 | $ | 5.18 | ||||||||
Diluted | $ | 2.05 | $ | 5.11 | ||||||||
Dividends per share | $ | 1.37 | $ | 1.37 | ||||||||
Share Data | ||||||||||||
Weighted average shares outstanding used in basic per share calculations | 68,163,825 | 68,163,825 | ||||||||||
Plus: Dilutive securities | 853,384 | 853,384 | ||||||||||
Weighted average shares used in diluted per share calculations | 69,017,209 | 69,017,209 | ||||||||||
See Explanatory Notes to Pro Forma Consolidated Statement of Operations
Assurant, Inc.
Explanatory Notes to Pro Forma Consolidated Statement of Operations
December 31, 2015
(dollar amounts in thousands, unless otherwise stated)
(Unaudited)
(1) These pro forma adjustments reflect the elimination of revenues and benefits, losses and expenses of the business sold assuming the transaction occurred on January 1, 2015. See Explanatory Notes to the Consolidated Pro Forma Balance Sheet for information related to the form of the sale transaction and the estimated gain on the sale transaction. |
(2) This pro forma adjustment reflects the estimate of a full year amortization of the deferred gain on disposal of business. The deferred gain on disposal of business is subject to change pending final determination of the net assets of the business and other adjustments as shown in the Consolidated Pro Forma Balance Sheet and changes to information used to determine the amortization pattern. |
(3) This pro forma adjustment includes the removal of the direct incremental costs specific to the disposal. |
Assurant, Inc.
Pro Forma Consolidated Balance Sheet
At December 31, 2015
As Reported | Pro Forma Adjustment | Note | Pro Forma | |||||||||
(in thousands except number of shares and per share amounts) | ||||||||||||
(Unaudited) | ||||||||||||
Assets | ||||||||||||
Investments: | ||||||||||||
Fixed maturity securities available for sale, at fair value (amortized cost - $9,470,795 as reported, $8,217,916 pro forma) | $ | 10,215,328 | $ | (1,396,296 | ) | $ | 8,819,032 | |||||
Equity securities available for sale, at fair value (cost - $450,563 as reported, $393,940 pro forma) | 500,057 | (59,178 | ) | 440,879 | ||||||||
Commercial mortgage loans on real estate, at amortized cost | 1,151,256 | (269,473 | ) | 881,783 | ||||||||
Policy loans | 43,858 | (1,685 | ) | 42,173 | ||||||||
Short-term investments | 508,950 | (1,109 | ) | 507,841 | ||||||||
Other investments | 575,323 | 34,558 | 609,881 | |||||||||
Total investments | 12,994,772 | (1,693,183 | ) | (1) | 11,301,589 | |||||||
Cash and cash equivalents | 1,288,305 | 930,411 | (9) | 2,218,716 | ||||||||
Premiums and accounts receivable, net | 1,260,717 | (17,779 | ) | (3) | 1,242,938 | |||||||
Reinsurance recoverables | 7,470,403 | 1,146,727 | (2) | 8,617,130 | ||||||||
Accrued investment income | 129,743 | (19,309 | ) | (1) | 110,434 | |||||||
Deferred acquisition costs | 3,150,934 | (33,474 | ) | (4) | 3,117,460 | |||||||
Property and equipment, at cost less accumulated depreciation | 298,414 | — | 298,414 | |||||||||
Income tax receivable | 24,176 | — | 24,176 | |||||||||
Goodwill | 833,512 | — | 833,512 | |||||||||
Value of business acquired | 41,154 | — | 41,154 | |||||||||
Other intangible assets, net | 277,163 | (12,972 | ) | (4) | 264,191 | |||||||
Other assets | 475,731 | 101,649 | (6)(9) | 577,380 | ||||||||
Assets held in separate accounts | 1,798,104 | — | 1,798,104 | |||||||||
Total assets | $ | 30,043,128 | $ | 402,070 | $ | 30,445,198 | ||||||
Liabilities | ||||||||||||
Future policy benefits and expenses | $ | 9,466,694 | $ | (1,187 | ) | (3) | $ | 9,465,507 | ||||
Unearned premiums | 6,423,720 | (90 | ) | (4) | 6,423,630 | |||||||
Claims and benefits payable | 3,896,719 | (260,332 | ) | (3) | 3,636,387 | |||||||
Commissions payable | 393,260 | (19,918 | ) | (4) | 373,342 | |||||||
Reinsurance balances payable | 132,728 | — | 132,728 | |||||||||
Funds held under reinsurance | 94,417 | — | 94,417 | |||||||||
Deferred gain on disposal of businesses | 92,327 | 529,724 | (9) | 622,051 | ||||||||
Accounts payable and other liabilities | 2,049,810 | (75,235 | ) | (5)(6)(7) | 1,974,575 | |||||||
Income taxes payable | — | 239,686 | (9) | 239,686 | ||||||||
Debt | 1,171,382 | — | 1,171,382 | |||||||||
Liabilities related to separate accounts | 1,798,104 | — | 1,798,104 | |||||||||
Total liabilities | 25,519,161 | 412,648 | 25,931,809 | |||||||||
Stockholders' Equity | ||||||||||||
Common stock | 1,497 | — | 1,497 | |||||||||
Additional paid-in capital | 3,148,409 | — | 3,148,409 | |||||||||
Retained earnings | 4,856,674 | 84,304 | (9) | 4,940,978 | ||||||||
Accumulated other comprehensive income | 118,549 | (94,882 | ) | (8) | 23,667 | |||||||
Treasury stock, at cost | (3,601,162 | ) | — | (3,601,162 | ) | |||||||
Total stockholders' equity | 4,523,967 | (10,578 | ) | 4,513,389 | ||||||||
Total liabilities and stockholders' equity | $ | 30,043,128 | $ | 402,070 | $ | 30,445,198 | ||||||
See Explanatory Notes to Pro Forma Consolidated Balance Sheet
Assurant, Inc.
Explanatory Notes to Pro Forma Consolidated Balance Sheet
December 31, 2015
(dollar amounts in thousands, unless otherwise stated)
(Unaudited)
(1) These pro forma adjustments reflect the transfer of invested assets and related accrued investment income to the buyer and the reclassification of invested assets related to a modified coinsurance arrangement. |
(2) Since this sale transaction is primarily in the form of reinsurance arrangements, the Company retains substantially all of the policyholder liabilities of the sold business but records a reinsurance recoverable from buyer at closing. |
(3) These pro forma adjustments reflect the novation of certain assumed reinsurance client contracts, therefore the insurance assets and liabilities of the novated business are removed. |
(4) These pro forma adjustments reflect removal and transfers of insurance contract-related assets and liabilities as part of the reinsurance transaction and other assets sold. |
(5) The pro forma adjustment to the deferred tax liability primarily reflects the elimination of the deferred tax liability associated with unrealized appreciation on investments. |
(6) Includes the disposition of the assets and liabilities of the legal entities and other assets previously presented as assets and liabilities held for sale. |
(7) Includes accruals for estimated transaction costs directly attributable to the sale of the business. |
(8) Reflects the elimination of unrealized appreciation on investments transferred to the buyer. |
(9) Using December 31, 2015 data, the following table reflects the estimated pre-tax and after-tax gain to be deferred and the realized gain recognized at the time of closing the sale. |
Adjusted purchase price, primarily comprised of a ceding commission | $ | 930,411 | |
Adjusted book value of assets in excess of liabilities | (223,314 | ) | |
Removal of deferred acquisition cost | (33,474 | ) | |
Realized gain on disposal of business before transaction costs, pre-tax | (143,899 | ) | |
Deferred gain on disposal of business, pre-tax | $ | 529,724 | |
Deferred gain on disposal of business, after-tax | $ | 344,321 | |
Realized gain on disposal of business before transaction costs, pre-tax | $ | 143,899 | |
Transaction costs accrued ($5,800 previously expensed) | (14,200 | ) | |
Realized gain on disposal of business, pre-tax | $ | 129,699 | |
Realized gain on disposal of business, after-tax | $ | 84,304 | |
The actual deferred gain and realized gain to be reported for the first quarter of 2016 is subject to change pending final determination of the net assets of the business, transaction costs and other adjustments. | |||