-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, BnT0jSR1gQq9UN9QCiQEVu3KclkHCOliWBCyIIbHgn5GWg1CC+YLacNiuPALNCNI gFzsjqJ+WrzGwXy2XKGnwQ== 0000950123-06-005708.txt : 20060504 0000950123-06-005708.hdr.sgml : 20060504 20060504080922 ACCESSION NUMBER: 0000950123-06-005708 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20060504 ITEM INFORMATION: Results of Operations and Financial Condition FILED AS OF DATE: 20060504 DATE AS OF CHANGE: 20060504 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ASSURANT INC CENTRAL INDEX KEY: 0001267238 STANDARD INDUSTRIAL CLASSIFICATION: ACCIDENT & HEALTH INSURANCE [6321] IRS NUMBER: 391126612 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-31978 FILM NUMBER: 06806032 MAIL ADDRESS: STREET 1: ONE CHASE MANHATTAN PLAZA CITY: NEW YORK STATE: NY ZIP: 10005 8-K 1 y20542e8vk.htm FORM 8-K 8-K
Table of Contents

 
 
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report: May 4, 2006
Assurant, Inc.
 
(Exact Name of Registrant as Specified in Charter)
         
Delaware   001-31978   39-1126612
         
(State or Other Jurisdiction
of Incorporation) 		  (Commission File Number)   (I.R.S. Employer
Identification No.)
     
One Chase Manhattan Plaza, 41st Floor    
New York, New York   10005
 
(Address of Principal Executive Offices)   (Zip Code)
Registrant’s telephone number, including area code: (212) 859-7000
N/A
 
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
     
o
  Written communications pursuant to Rule 425 under the Securities Act (17 CR 230.425)
 
    
o
  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
    
o
  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
    
o
  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
 

 

TABLE OF CONTENTS

Item 2.02 Results of Operations and Financial Condition
SIGNATURE
EX-99.1: PRESS RELEASE
EX-99.2: PRESENTATION OF FINANCIAL SUPPLEMENT

Table of Contents

Item 2.02 Results of Operations and Financial Condition
     On May 4, 2006, Assurant, Inc. issued a press release reporting on its financial results for the three months ended March 31, 2006 and 2005. The text of the press release, which is attached at Exhibit 99.1, and the statistical supplement which accompanied the press release, which is attached at Exhibit 99.2, are each incorporated by reference into this Item.
Exhibits
  99.1   Press Release Dated May 4, 2006.
 
  99.2   Presentation entitled “Assurant, Inc. Financial Supplement as of March 31, 2006”.

- 2 -

Table of Contents

SIGNATURE
     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
             
 
                 ASSURANT, INC.    
 
            
Date: May 4, 2006
  By:         /s/ Katherine Greenzang
 
    
    Katherine Greenzang    
    Senior Vice President, General Counsel and Secretary    

- 3 -

EX-99.1 2 y20542exv99w1.htm EX-99.1: PRESS RELEASE EX-99.1
 

Exhibit 99.1
(ASSURANT LOGO)
         
Press Contact:
  Investor Relations:    
Drew Guthrie
  Melissa Kivett   Larry Cains
Manager, Communications
  Vice President   Senior Vice President
and Media Relations
  Investor Relations   Investor Relations
Phone: 212-859-7002
  Phone: 212-859-7029   Phone: 212-859-7045
Fax: 212-859-5893
  Fax: 212-859-5893   Fax: 212-859-5893
drew.guthrie@assurant.com
  melissa.kivett@assurant.com   larry.cains@assurant.com
FOR IMMEDIATE RELEASE
Assurant Reports Q1 2006 Net Operating Income of $164 Million ($1.24 per diluted share),
and Net Income of $162 Million ($1.23 per diluted share), Both Up 42% Over 2005
New York — May 4, 2006 — Assurant, Inc. (“Assurant”) (NYSE: AIZ), a premier provider of specialized insurance and insurance-related products and services, today reported its results for the first quarter 2006.
Net income in the first quarter of 2006 increased 42% to $162.5 million, or $1.23 per diluted share, versus first quarter 2005 net income of $114.4 million, or $0.82 per diluted share.
Net operating income (see footnote 1 at the end of this release) for the first quarter of 2006 increased 42% to $163.8 million, or $1.24 per diluted share, compared to first quarter 2005 net operating income of $115.1 million, or $0.82 per diluted share.
Robert B. Pollock, president and chief executive officer, said: “We are pleased with Assurant’s strong first quarter performance, the best in our history. Tremendous results in our Solutions and Specialty Property businesses were the primary driver of improved net operating income. Our diversified specialty insurance strategy continues to deliver strong profitability and we are pleased with our progress in generating long-term profitable growth.”
Net earned premiums of $1.7 billion in the first quarter of 2006 increased 2% from the same period in 2005. Excluding the sale of the preneed U.S. independent franchise, net earned premiums would be up 5%, primarily driven by 20% net earned premium growth in Solutions and Specialty Property.
Net investment income in the first quarter of 2006 increased to $192.6 million from $164.2 million in the first quarter of 2005 primarily as a result of improved yields. Excluding $14.7 million of investment income from a real estate partnership in the

 

 

quarter, the yield on average invested assets and cash and cash equivalents was 5.75% in the first quarter of 2006, compared to 5.54% in the fourth quarter of 2005, and 5.51% in the first quarter of 2005.
Reconciliation of Net operating income to Net income
                 
    For the Three Months Ended  
    March 31,     March 31,  
    2006     2005  
    (UNAUDITED)  
    (amounts in millions, net of tax)  
Assurant Solutions and Assurant Specialty Property
   $ 97.3     $ 54.8  
Assurant Health
     45.1       49.7  
Assurant Employee Benefits
     19.2       16.4  
Assurant Preneed
     6.9       7.0  
Amortization of deferred gain on disposal of businesses
     5.7       7.7  
Interest expense
     (10.0 )     (10.0 )
Corporate and other
     (0.4 )     (10.5 )
 
            
Net operating income
     163.8       115.1  
 
                
Adjustments:
                
Net realized gains (losses) on investments
     (2.9 )     0.3  
Expenses directly related to stock offerings
     —       (1.0 )
 
            
Net income before cumulative effect of change in accounting principle
   $ 160.9     $ 114.4  
 
                
Cumulative effect of change in accounting principle
     1.6       —  
     
Net income
   $ 162.5     $ 114.4  
     
Assurant Solutions and Assurant Specialty Property
Assurant Solutions and Assurant Specialty Property first quarter 2006 net operating income was $97.3 million, up 78% from first quarter 2005 net operating income of $54.8 million. Net operating income for the first quarter 2006 increased primarily due to low combined ratios. First quarter 2006 includes $7.8 million pre tax of reimbursements received for processing and adjudicating services under the National Flood Insurance Program. Results were also favorably impacted by a 22% increase in investment income including $2.5 million pre tax of investment income from a real estate partnership and a 20% increase in fee income during the quarter.
Assurant Solutions and Assurant Specialty Property first quarter 2006 net earned premiums increased 20% to $739.2 million from $615.2 million in the same year-ago period. The increase is a result of premium growth in all of our Specialty Property

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businesses, especially in creditor-placed homeowners, as well as growth in Solutions’ domestic and international extended service contracts.
Assurant Health
Assurant Health first quarter 2006 net operating income decreased 9% to $45.1 million from $49.7 million in the same period in 2005. The decrease is primarily the result of a decline in small group membership and an increase in expenses aimed at growing the individual markets business. Results benefited from $7.4 million pre tax of investment income from a real estate partnership. The combined ratio for the quarter was 91.6% as a result of stable loss ratios.
Assurant Health first quarter 2006 net earned premiums of $523.4 million decreased 5% from $549.5 million in the same period in 2005, due to the decline in small group premiums. Individual medical premiums increased despite a small decline in membership.
Assurant Employee Benefits
Assurant Employee Benefits first quarter 2006 net operating income increased 17% to $19.2 million from net operating income of $16.4 million in the same period of 2005. Net operating income for the first quarter 2006 increased primarily due to improved disability and dental loss experience.
Assurant Employee Benefits first quarter 2006 net earned premiums decreased 6% to $326.1 million from $345.9 million in the same period of 2005. The decrease was driven primarily by lower sales and persistency due to changes to support the business’ small case strategy. Disability premiums include single premium amounts of $33.9 million in the quarter related to the assumption of closed blocks compared to $26.7 million in the first quarter of 2005.
Assurant Preneed
Assurant Preneed first quarter 2006 net operating income decreased 1% to $6.9 million from net operating income of $7.0 million in the same period of 2005. The first quarter includes $1.9 million pre tax of transaction expenses related to the sale of the preneed U.S. independent franchise.
Assurant Preneed first quarter 2006 net earned premiums decreased 31% to $84.0 million from $121.2 million in the same period of 2005 primarily due to the sale of the preneed U.S. independent franchise. Lower U.S. premium growth was partially offset by continued growth in Canada.

3

 

Corporate
Corporate and other net operating loss for the first quarter of 2006 was $0.4 million, compared to a loss of $10.5 million in the first quarter of 2005. The improvement in results is primarily the result of a reduction in expenses associated with the required change in accounting methodology for stock appreciation rights costs. Also, Corporate and other results include $4.8 million pre tax of investment income from a real estate partnership.
Financial Position
At March 31, 2006 total assets were $24.7 billion. Stockholders’ equity, excluding Accumulated Other Comprehensive Income (AOCI), was $3.6 billion and book value per diluted share, excluding AOCI, was up 4% to $27.18 from $26.25 at December 31, 2005. Debt to total capital, excluding AOCI, dropped to 21.8%.
Earnings Conference Call
Assurant will host a conference call Thursday, May 4, 2006 at 10:00 A.M. (ET) with access available via Internet and telephone. Investors and analysts may participate in the live conference call by dialing 800-473-6123 (toll-free domestic) or 973-582-2706 (international); passcode: 7188715. Please call to register at least 10 minutes before the conference call begins. A replay of the call will be available for one week via the telephone starting at approximately 12:00 P.M. (ET) on May4, 2006 and can be accessed at 877-519-4471 (toll-free domestic) or 973-341-3080 (international); passcode: 7188715 The webcast will be archived for one month on Assurant’s website.
About Assurant
Assurant is a premier provider of specialized insurance products and related services in North America and selected other international markets. The five key businesses — Assurant Employee Benefits; Assurant Health; Assurant Preneed; Assurant Solutions; and Assurant Specialty Property — have partnered with clients who are leaders in their industries and have built leadership positions in a number of specialty insurance market segments in the U.S. and selected international markets. The Assurant business units provide creditor-placed homeowners insurance; manufactured housing homeowners insurance; debt protection administration; credit-related insurance; warranties and extended service contracts; individual health and small employer group health insurance; group dental insurance; group disability insurance; group life insurance; and pre-funded funeral insurance.
The company, which is traded on the New York Stock Exchange under the symbol AIZ, has over $20 billion in assets and $7 billion in annual revenue. Assurant has more than

4

 

12,000 employees worldwide and is headquartered in New York’s financial district. www.assurant.com
Safe Harbor Statement
Some of the statements included in this press release, particularly those anticipating future financial performance, business prospects, growth and operating strategies and similar matters, are forward-looking statements that involve a number of risks and uncertainties. For those statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. For a discussion of the factors that could affect our actual results please refer to the risk factors identified from time to time in our SEC reports, including, but not limited to, our 10-K, as filed with the SEC.
Non-GAAP Financial Measures
Assurant uses the following non-GAAP financial measure to analyze the company’s operating performance for the periods presented in this press release. Because Assurant’s calculation may differ from similar measures used by other companies, investors should be careful when comparing Assurant’s non-GAAP financial measure to those of other companies.
(1) Assurant uses net operating income as an important measure of the company’s operating performance. Net operating income equals net income excluding net realized gains (losses) on investments and other unusual and/or infrequent items. The company believes net operating income provides investors a valuable measure of the performance of the company’s ongoing business, because it excludes both the effect of realized gains (losses) on investments that tend to be highly variable from period to period, and those events that are unusual and/or unlikely to recur.

5

 

Assurant, Inc. and Subsidiaries
Consolidated Statement of Operations (unaudited)
Three months Ended March 31, 2006 and 2005
                 
    Three Months Ended March 31,  
    2006     2005  
    (in thousands except number of shares and  
    per share amounts)  
Revenues
                
Net earned premiums and other considerations
   $ 1,672,653     $ 1,631,894  
Net investment income
     192,562       164,200  
Net realized (loss) gain on investments
     (4,452 )     492  
Amortization of deferred gain on disposal of businesses
     8,833       11,863  
Fees and other income
     60,186       53,905  
 
            
Total revenues
     1,929,782       1,862,354  
Benefits, losses and expenses
                
Policyholder benefits
     889,679       943,524  
Selling, underwriting, general and administrative expenses
     782,432       726,793  
Interest expense
     15,315       15,314  
 
            
Total benefits, losses and expenses
     1,687,426       1,685,631  
 
            
Income before income taxes and cumulative effect of change in accounting principle
     242,356       176,723  
Income tax expense
     81,431       62,325  
 
            
Net income before cumulative effect of change in accounting principle
     160,925       114,398  
Cumulative effect of change in accounting principle
     1,547       —  
 
            
Net income
   $ 162,472     $ 114,398  
 
            
 
                
Net income per share:
                
Basic
   $ 1.25     $ 0.82  
Diluted
   $ 1.23     $ 0.82  
 
                
Dividends per share
   $ 0.08     $ 0.07  
 
                
Share Data:
                
Basic weighted average shares outstanding
     129,998,426       139,736,533  
 
Diluted weighted average shares outstanding
     132,000,306       139,833,013  

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Assurant, Inc. and Subsidiaries
Consolidated Condensed Balance Sheets
At March 31, 2006 (unaudited) and December 31, 2005
                 
    March 31,     December 31,  
    2006     2005  
    (in thousands)  
Assets
                
Investments and cash and cash equivalents
   $ 12,899,640     $ 13,371,392  
Reinsurance recoverables
     4,075,817       4,447,810  
Goodwill
     804,889       804,864  
Assets held in separate accounts
     3,498,093       3,472,435  
Other assets
     3,402,245       3,268,952  
 
            
Total assets
     24,680,684       25,365,453  
 
            
Liabilities
                
Policyholder liability
     14,164,008       14,391,691  
Debt
     971,711       971,690  
Mandatorily redeemable preferred stock
     23,160       24,160  
Liabilities related to separate accounts
     3,498,093       3,472,435  
Accounts payable and other liabilities
     2,370,143       2,805,918  
 
            
Total liabilities
     21,027,115       21,665,894  
 
                
Stockholders’ equity
                
Equity, excluding accumulated other comprehensive income
     3,575,169       3,480,060  
Accumulated other comprehensive income
     78,400       219,499  
 
            
Total stockholders’ equity
     3,653,569       3,699,559  
 
            
 
Total liabilities and stockholders’ equity
   $ 24,680,684     $ 25,365,453  
 
            

7

EX-99.2 3 y20542exv99w2.htm EX-99.2: PRESENTATION OF FINANCIAL SUPPLEMENT EX-99.2
 

Exhibit 99.2
(ASSURANT LOGO)
Assurant, Inc. (AIZ)
Financial Supplement as of March 31, 2006

 

 

(ASSURANT LOGO)
ASSURANT, INC. AND SUBSIDIARIES
EARNINGS RELEASE SUPPLEMENT
AS OF MARCH 31, 2006
INDEX TO SUPPLEMENT
         
    Page:
REGULATION G — NON GAAP MEASURES
     1  
 
        
SUMMARY FINANCIAL HIGHLIGHTS (unaudited)
     2  
 
        
CONSOLIDATED CONDENSED BALANCE SHEETS (unaudited)
     4  
 
        
RECONCILIATION OF NET OPERATING INCOME TO NET INCOME (unaudited)
     5  
 
        
CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS (unaudited)
     6  
 
        
CONDENSED SEGMENT STATEMENTS OF OPERATIONS (unaudited)
     7  
 
        
INVESTMENTS (unaudited)
     14  
 
        
INVESTMENT RESULTS BY ASSET CATEGORY & ANNUALIZED YIELDS (unaudited)
     15  
About Assurant:
Assurant is a premier provider of specialized insurance products and related services in North America and selected other markets. The four key business segments – Assurant Employee Benefits; Assurant Health; Assurant Preneed; and Assurant Solutions — have partnered with clients who are leaders in their industries and have built leadership positions in a number of specialty insurance markets in the U.S. and selected international markets. The Assurant business segments provide creditor-placed homeowners insurance; manufactured housing homeowners insurance; debt protection administration; credit insurance; warranties and extended services contracts; individual health and small employer group health insurance; group dental insurance; group disability insurance; group life insurance; and pre-funded funeral insurance.
The company, which is traded on the New York Stock Exchange under the symbol AIZ, has over $20 billion in assets and $7 billion in annual revenue. Assurant has more than 12,000 employees and is headquartered in New York’s financial district.
Safe Harbor Statement:
Some of the statements included in this statistical supplement, particularly those anticipating future financial performance, business prospects, growth and operating strategies and similar matters, are forward-looking statements that involve a number of risks and uncertainties. For those statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. For a discussion of the factors that could affect our actual results please refer to the risk factors identified from time to time in our SEC reports, posted on the Assurant website at www.assurant.com.

 

 

(ASSURANT LOGO)
Regulation G — Non GAAP Measures
Assurant uses the following non-GAAP financial measures to analyze the company’s operating performance for the periods presented in the press release. 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 net operating income as an important measure of the company’s operating performance. Net operating income equals net income, excluding net realized gains (losses) on investments and unusual and/or infrequent items. The company believes net operating income provides investors a valuable measure of the performance of the company’s ongoing business, because it excludes both the effect of realized gains (losses) on investments that tend to be highly variable from period to period, and those events that are unusual and/or unlikely to recur.
(2) Pro forma earnings per share has been included as a measure of operating performance. In February 2004, Assurant completed a significant capital restructuring in conjunction with its initial public offering of common stock. Pro forma earnings per share reflects earnings per share adjusted as if this capital restructuring had occurred on January 1, 2003. This restructuring included: a stock split and conversion of Class B and C shares resulting in total outstanding shares of 109,222,276; the issuance of 32,976,854 shares of Assurant common stock to Fortis Insurance N.V. in exchange for a capital contribution of $725.5 million, and the issuance of 68,976 restricted shares of Assurant common stock to certain officers and directors of the company pursuant to specific restricted stock grants. These transactions occurred subsequent to the December 31, 2003 balance sheet, but management believes that this adjusted measure provides a better indication of operating performance than the corresponding GAAP measure, earnings per share.
(3) Book value per share excluding accumulated other comprehensive income (AOCI) has been included as a measure of stockholder value. The company believes book value per share excluding AOCI provides investors a better measure of stockholder value than book value per share because it excludes the effect of unrealized gains (losses) on investments and foreign currency translation, which tend to be highly variable from period to period.
 Page 1

 

 

(ASSURANT LOGO)
Assurant, Inc. and Subsidiaries
Summary Financial Highlights
(Unaudited)
                                 
    For the Three-Months Ended     For the Year Ended  
    March 31,     December 31,  
($ in thousands, except per share amounts)   2006     2005     2005     2004  
Net operating income (1)
   $ 163,819     $ 115,118     $ 513,289     $ 344,991  
 
                                
Net realized (loss) gains from investments
     (2,894 )     320       7,369       15,800  
 
                                
Excess of loss reinsurance program (1995-1997)
     —       —       (40,263 )     —  
 
                                
Loss on disposal of business
     —       —       —       (6,337 )
 
                                
Expenses directly related to the initial and secondary public offerings
     —       (1,040 )     (1,040 )     (3,894 )
 
                        
 
                                
Net income before cumulative effect of change in accounting principle
     160,925       114,398       479,355       350,560  
 
                                
Cumulative effect of change in accounting principle
     1,547       —       —       —  
 
                                
 
                        
Net income
   $ 162,472     $ 114,398     $ 479,355     $ 350,560  
 
                        
 
                                
Total revenues
   $ 1,929,782     $ 1,862,354     $ 7,497,675     $ 7,410,714  
 
                                
PER SHARE AND SHARE DATA:
                                
 
                                
Basic earnings per share
                                
Net operating income
   $ 1.26     $ 0.82     $ 3.78     $ 2.49  
Net income before cumulative effect of change in accounting principle
   $ 1.24     $ 0.82     $ 3.53     $ 2.53  
Net income
   $ 1.25     $ 0.82     $ 3.53     $ 2.53  
Weighted average of common shares outstanding — basic
     129,998,426       139,736,533       135,773,551       138,358,767  
 
                                
Diluted earnings per share
                                
Net operating income
   $ 1.24     $ 0.82     $ 3.75     $ 2.49  
Net income before cumulative effect of change in accounting principle
   $ 1.22     $ 0.82     $ 3.50     $ 2.53  
Net income
   $ 1.23     $ 0.82     $ 3.50     $ 2.53  
Weighted average of common shares outstanding — diluted
     132,000,306       139,833,013       136,945,310       138,467,564  
 
                                
Pro forma earnings per share (2)
                                
Net operating income
     N/A       N/A       N/A     $ 2.44  
Net income before cumulative effect of change in accounting principle
     N/A       N/A       N/A     $ 2.48  
Net income
     N/A       N/A       N/A     $ 2.48  
Pro forma common shares outstanding
     N/A       N/A       N/A       141,622,001  
 Page 2

 

 

(ASSURANT LOGO)
Assurant, Inc. and Subsidiaries
Summary Financial Highlights (continued)
(Unaudited)
                         
    As of     As of  
    March 31,     December 31,  
($ in thousands, except per share amounts)   2006     2005     2004  
Total assets
   $ 24,680,684     $ 25,365,453     $ 24,548,106  
 
                        
Total stockholders’ equity
   $ 3,653,569     $ 3,699,559     $ 3,635,431  
 
                        
Total stockholders’ equity (excluding AOCI)
   $ 3,575,169     $ 3,480,060     $ 3,297,268  
 
                        
Basic book value per share
   $ 28.25     $ 28.33     $ 26.01  
Basic book value per share (excluding AOCI) (3)
   $ 27.64     $ 26.65     $ 23.59  
Shares outstanding for basic book value per share calculation
     129,329,491       130,591,834       139,766,177  
 
                        
Diluted book value per share
   $ 27.77     $ 27.90     $ 25.99  
Diluted book value per share (excluding AOCI) (3)
   $ 27.18     $ 26.25     $ 23.57  
Shares outstanding for diluted book value per share calculation
     131,547,132       132,598,736       139,901,760  
 
                        
Debt to total capital ratio (excluding AOCI)
     21.8 %     22.2 %     23.2 %
 Page 3

 

 

(ASSURANT LOGO)
Assurant, Inc. and Subsidiaries
Consolidated Condensed Balance Sheets
(Unaudited)
                         
    As of     As of  
    March 31,     December 31,  
($ in thousands)   2006     2005     2004  
Assets
                        
Investments and cash and cash equivalents
   $ 12,899,640     $ 13,371,392     $ 12,955,128  
Reinsurance recoverables
     4,075,817       4,447,810       4,196,810  
Goodwill
     804,889       804,864       823,054  
Assets held in separate accounts
     3,498,093       3,472,435       3,717,149  
Other assets
     3,402,245       3,268,952       2,855,965  
 
                  
Total assets
     24,680,684       25,365,453       24,548,106  
 
                  
 
                        
Liabilities
                        
Policyholder liability
     14,164,008       14,391,691       13,381,936  
Debt
     971,711       971,690       971,611  
Mandatorily redeemable preferred stock
     23,160       24,160       24,160  
Liabilities related to separate accounts
     3,498,093       3,472,435       3,717,149  
Accounts payable and other liabilities
     2,370,143       2,805,918       2,817,819  
 
                  
Total liabilities
     21,027,115       21,665,894       20,912,675  
 
                        
Stockholders’ equity
                        
Equity, excluding accumulated other comprehensive income
     3,575,169       3,480,060       3,297,268  
Accumulated other comprehensive income
     78,400       219,499       338,163  
 
                  
Total stockholders’ equity
     3,653,569       3,699,559       3,635,431  
 
                  
 
Total liabilities and stockholders’ equity
   $ 24,680,684     $ 25,365,453     $ 24,548,106  
 
                  
 Page 4

 

 

(ASSURANT LOGO)
Assurant, Inc. and Subsidiaries
Reconciliation of Net Operating Income to Net Income
(Unaudited)
                                                         
    For the Three Months Ended     For the Year Ended  
    March 31,     December 31,     September 30,     June 30,     March 31,     December 31,     December 31,  
($ in thousands, net of tax)   2006     2005     2005     2005     2005     2005     2004  
Assurant Solutions
   $ 97,339     $ 69,636     $ 53,149     $ 63,765     $ 54,770     $ 241,320     $ 126,158  
Assurant Health
     45,096       33,297       45,718       49,367       49,673       178,055       158,287  
Assurant Employee Benefits
     19,185       19,329       22,846       9,812       16,379       68,366       62,210  
Assurant Preneed
     6,852       4,783       10,475       12,840       6,956       35,054       34,235  
Corporate and other
     (439 )     20,701       (4,289 )     (3,314 )     (10,417 )     2,681       (35,282 )
Amortization of deferred gain on disposal of businesses
     5,741       4,651       7,609       7,660       7,711       27,631       37,461  
Interest expense
     (9,955 )     (9,955 )     (9,955 )     (9,954 )     (9,954 )     (39,818 )     (38,078 )
 
                                          
Net operating income
     163,819       142,442       125,553       130,176       115,118       513,289       344,991  
 
                                                        
Adjustments:
                                                        
Net realized (loss) gains on investments
     (2,894 )     (5,396 )     9,794       2,651       320       7,369       15,800  
Excess loss of reinsurance program (1995-1997)
     —       —       (35,060 )     (5,203 )     —       (40,263 )     —  
Loss on disposal of business
     —       —       —       —       —       —       (6,337 )
Expenses directly related to the initial and secondary public offerings
     —       —       —       —       (1,040 )     (1,040 )     (3,894 )
 
                                          
Net income before cumulative effect of change in accounting principle
     160,925       137,046       100,287       127,624       114,398       479,355       350,560  
Cumulative effect of change in accounting principle
     1,547       —       —       —       —       —       —  
 
                                          
Net income
   $ 162,472     $ 137,046     $ 100,287     $ 127,624     $ 114,398     $ 479,355     $ 350,560  
 
                                          
 Page 5

 

 

(ASSURANT LOGO)
Assurant, Inc. and Subsidiaries
Consolidated Condensed Statement of Operations
(Unaudited)
                                                         
    For the Three Months Ended     For the Year Ended  
    March 31,     December 31,     September 30,     June 30,     March 31,     December 31,     December 31,  
($ in thousands)   2006     2005     2005     2005     2005     2005     2004  
Revenues:
                                                        
Net earned premiums and other considerations
   $ 1,672,653     $ 1,644,477     $ 1,621,186     $ 1,623,239     $ 1,631,894     $ 6,520,796     $ 6,482,871  
Net investment income
     192,562       170,864       175,175       177,018       164,200       687,257       634,749  
Net realized (loss) gain on investments
     (4,452 )     (8,301 )     11,965       4,079       492       8,235       24,308  
Loss on disposal of businesses
     —       —       —       —       —       —       (9,232 )
Amortization of deferred gain on disposal of businesses
     8,833       7,155       11,706       11,784       11,863       42,508       57,632  
Fees and other income
     60,186       67,382       59,409       58,183       53,905       238,879       220,386  
 
                                          
 
     1,929,782       1,881,577       1,879,441       1,874,303       1,862,354       7,497,675       7,410,714  
 
                                          
Benefits, losses and expenses:
                                                        
Policyholder benefits
     889,679       869,678       970,596       924,011       943,524       3,707,809       3,839,769  
Selling, underwriting, general and administrative expenses
     782,432       847,172       752,156       746,879       726,793       3,073,000       2,976,436  
Interest expense
     15,315       15,315       15,315       15,314       15,314       61,258       58,581  
 
                                          
 
     1,687,426       1,732,165       1,738,067       1,686,204       1,685,631       6,842,067       6,874,786  
 
                                          
 
                                                        
Income before income taxes and cumulative effect of change in accounting principle
     242,356       149,412       141,374       188,099       176,723       655,608       535,928  
Income taxes
     81,431       12,366       41,087       60,475       62,325       176,253       185,368  
 
                                          
Net income before cumulative effect of change in accounting principle
     160,925       137,046       100,287       127,624       114,398       479,355       350,560  
Cumulative effect of change in accounting principle
     1,547       —       —       —       —       —       —  
 
                                          
Net income
   $ 162,472     $ 137,046     $ 100,287     $ 127,624     $ 114,398     $ 479,355     $ 350,560  
 
                                          
 
                                                        
Share repurchase program:
                                                        
Shares repurchased
     1,416,800       2,014,468       3,910,926       2,797,500       710,000       9,432,894       2,411,500  
Average repurchase price per share
   $ 45.17     $ 38.00     $ 37.38     $ 34.32     $ 34.16     $ 36.36     $ 26.04  
Repurchase price
   $ 64,001     $ 76,551     $ 146,181     $ 96,006     $ 24,252     $ 342,990     $ 62,786  
 
                                                        
AIZ Closing stock price (NYSE)
   $ 49.25     $ 43.49     $ 38.06     $ 36.10     $ 33.70     $ 43.49     $ 30.55  
 
                                                        
Investment yield (1)
     5.75 %     5.54 %     5.71 %     5.63 %     5.51 %     5.54 %     5.46 %
 
                                                        
Real estate investment income (1)
   $ 14,735     $ —     $ 3,156     $ 9,409     $ —     $ 12,565     $ —  
 
(1)   Investment yield excludes investment income from real estate partnerships.

Page 6

 

(ASSURANT LOGO)
Assurant Solutions and Assurant Specialty Property
Condensed Statement of Operations
(Unaudited)
                                                         
    For the Three Months Ended     For the Year Ended  
    March 31,     December 31,     September 30,     June 30,     March 31,     December 31,     December 31,  
($ in thousands)   2006     2005     2005     2005     2005     2005     2004  
Revenues:
                                                        
Net earned premiums and other considerations
   $ 739,185     $ 713,068     $ 648,011     $ 636,688     $ 615,247     $ 2,613,014     $ 2,448,641  
Net investment income
     58,786       51,621       52,514       52,262       48,165       204,562       184,951  
Fees and other income
     43,405       50,365       39,991       40,938       36,103       167,397       143,718  
 
                                          
 
     841,376       815,054       740,516       729,888       699,515       2,984,973       2,777,310  
 
                                          
Benefits, losses and expenses:
                                                        
Policyholder benefits
     221,919       223,627       238,148       213,678       203,265       878,718       935,431  
Selling, underwriting, general and administrative expenses
     472,107       484,256       422,215       420,797       414,589       1,741,857       1,658,402  
 
                                          
 
     694,026       707,883       660,363       634,475       617,854       2,620,575       2,593,833  
 
                                          
 
                                                        
Income before income taxes
     147,350       107,171       80,153       95,413       81,661       364,398       183,477  
Income taxes
     50,011       37,535       27,004       31,648       26,891       123,078       57,319  
 
                                          
Net operating income
   $ 97,339     $ 69,636     $ 53,149     $ 63,765     $ 54,770     $ 241,320     $ 126,158  
 
                                          
 
                                                        
Net earned premiums and other considerations by major product groupings:
                                                        
Assurant Specialty Property
   $ 252,746     $ 230,692     $ 219,324     $ 207,723     $ 201,118     $ 858,857     $ 768,875  
Assurant Solutions
     486,439       482,376       428,687       428,965       414,129       1,754,157       1,679,766  
 
                                          
Total
   $ 739,185     $ 713,068     $ 648,011     $ 636,688     $ 615,247     $ 2,613,014     $ 2,448,641  
 
                                          
 
                                                        
Gross written premiums for selected product groupings:
                                                        
Domestic Credit
   $ 168,927     $ 199,082     $ 182,999     $ 194,667     $ 190,718     $ 767,466     $ 853,011  
International Credit
   $ 161,024     $ 160,858     $ 166,413     $ 157,449     $ 162,747     $ 647,467     $ 594,646  
Domestic extended service contracts
   $ 285,504     $ 326,974     $ 298,969     $ 241,035     $ 253,249     $ 1,120,227     $ 960,352  
International extended service contracts
   $ 66,256     $ 86,674     $ 62,669     $ 50,593     $ 47,570     $ 247,506     $ 73,103  
Specialty Property Solutions
   $ 355,088     $ 411,212     $ 378,474     $ 341,298     $ 299,357     $ 1,430,341     $ 1,275,357  
 
                                                        
Investment yield (1)
     5.14 %     4.75 %     5.10 %     5.28 %     4.87 %     4.88 %     4.78 %
 
                                                        
Real estate investment income (1)
   $ 2,506     $ —     $ —     $ —     $ —     $ —     $ —  
 
(1)   Investment yield excludes investment income from real estate partnerships.

Page 7

 

(ASSURANT LOGO)
Assurant Health
Condensed Statement of Operations
(Unaudited)
                                                         
    For the Three Months Ended     For the Year Ended  
    March 31,     December 31,     September 30,     June 30,     March 31,     December 31,     December 31,  
($ in thousands)   2006     2005     2005     2005     2005     2005     2004  
Revenues:
                                                        
Net earned premiums and other considerations
   $ 523,405     $ 531,345     $ 538,800     $ 544,294     $ 549,526     $ 2,163,965     $ 2,231,298  
Net investment income
     24,001       16,474       17,707       17,170       17,705       69,056       67,902  
Fees and other income
     9,726       9,323       10,420       10,270       10,331       40,344       38,708  
 
                                          
 
     557,132       557,142       566,927       571,734       577,562       2,273,365       2,337,908  
 
                                          
Benefits, losses and expenses:
                                                        
Policyholder benefits
     325,401       329,793       336,362       333,101       345,368       1,344,624       1,422,783  
Selling, underwriting, general and administrative expenses
     162,712       176,626       161,125       163,385       156,763       657,899       674,907  
 
                                          
 
     488,113       506,419       497,487       496,486       502,131       2,002,523       2,097,690  
 
                                          
 
                                                        
Income before income taxes
     69,019       50,723       69,440       75,248       75,431       270,842       240,218  
Income taxes
     23,923       17,426       23,722       25,881       25,758       92,787       81,931  
 
                                          
Net operating income
   $ 45,096     $ 33,297     $ 45,718     $ 49,367     $ 49,673     $ 178,055     $ 158,287  
 
                                          
 
                                                        
Net earned premiums and other considerations:
                                                        
Individual:
                                                        
Individual medical
   $ 297,338     $ 295,322     $ 291,817     $ 290,047     $ 287,312     $ 1,164,498     $ 1,100,869  
Short-term medical
     25,001       26,664       30,257       28,115       25,876       110,912       114,583  
 
                                          
Subtotal
     322,339       321,986       322,074       318,162       313,188       1,275,410       1,215,452  
Small employer group
     201,066       209,359       216,726       226,132       236,338       888,555       1,015,846  
 
                                          
 
                                                      
Total
   $ 523,405     $ 531,345     $ 538,800     $ 544,294     $ 549,526     $ 2,163,965     $ 2,231,298  
 
                                          

Page 8

 

(ASSURANT LOGO)
Assurant Health (continued)
Condensed Statement of Operations
(Unaudited)
                                                         
    For the Three Months Ended     For the Year Ended  
    March 31,     December 31,     September 30,     June 30,     March 31,     December 31,     December 31,  
($ in thousands)   2006     2005     2005     2005     2005     2005     2004  
Sales (Annualized issued premiums):
                                                        
Individual:
                                                        
Individual medical
   $ 76,192     $ 71,745     $ 69,343     $ 68,137     $ 76,389     $ 285,614     $ 344,794  
Short-term medical
     30,248       24,747       34,889       31,566       28,716       119,918       117,396  
 
                                          
Subtotal
     106,440       96,492       104,232       99,703       105,105       405,532       462,190  
Small employer group
     34,573       36,466       36,224       41,211       45,486       159,387       233,809  
 
                                          
Total
   $ 141,013     $ 132,958     $ 140,456     $ 140,914     $ 150,591     $ 564,919     $ 695,999  
 
                                          
 
                                                        
Membership by product line:
                                                        
Individual:
                                                        
Individual medical
     636       644       647       662       671       644       675  
Short-term medical
     100       102       122       129       116       102       107  
 
                                          
Subtotal
     736       746       769       791       787       746       782  
Small employer group
     239       255       267       287       308       255       333  
 
                                          
 
                                                      
Total
     975       1,001       1,036       1,078       1,095       1,001       1,115  
 
                                          
 
                                                        
Ratios:
                                                        
Loss ratio (a)
     62.2 %     62.1 %     62.4 %     61.2 %     62.8 %     62.1 %     63.8 %
Expense ratio (b)
     30.5 %     32.7 %     29.3 %     29.5 %     28.0 %     29.8 %     29.7 %
Combined ratio (c)
     91.6 %     93.7 %     90.6 %     89.5 %     89.7 %     90.8 %     92.4 %
 
                                                        
Investment yield (1)
     5.70 %     5.57 %     5.48 %     5.23 %     5.44 %     5.61 %     5.47 %
 
                                                        
Real estate investment income (1)
   $ 7,372     $ —     $ 596     $ —     $ —     $ 596     $ —  
 
(a)   The loss ratio is equal to policyholder benefits divided by net earned premiums and other considerations.
 
(b)   The expense ratio is equal to selling, underwriting and general expenses divided by net earned premiums and other considerations and fees and other income.
 
(c)   The combined ratio is equal to total benefits, losses and expenses divided by net earned premiums and other considerations and fees and other income.
 
(1)   Investment yield excludes investment income from real estate partnerships.

Page 9

 

(ASSURANT LOGO)
Assurant Employee Benefits
Condensed Statement of Operations
(Unaudited)
                                                         
    For the Three Months Ended     For the Year Ended  
    March 31,     December 31,     September 30,     June 30,     March 31,     December 31,     December 31,  
($ in thousands)   2006     2005     2005     2005     2005     2005     2004  
Revenues:
                                                        
Net earned premiums and other considerations
   $ 326,111     $ 308,568     $ 306,928     $ 316,420     $ 345,922     $ 1,277,838     $ 1,276,812  
Net investment income
     40,839       38,754       41,878       38,274       37,983       156,889       149,718  
Fees and other income
     6,832       6,056       6,976       6,993       6,189       26,214       29,306  
 
                                          
 
     373,782       353,378       355,782       361,687       390,094       1,460,941       1,455,836  
 
                                          
Benefits, losses and expenses:
                                                        
Policyholder benefits
     245,439       215,538       212,022       241,537       267,738       936,835       950,235  
Selling, underwriting, general and administrative expenses
     99,114       108,095       108,403       105,027       97,017       418,542       409,737  
 
                                          
 
     344,553       323,633       320,425       346,564       364,755       1,355,377       1,359,972  
 
                                          
 
                                                        
Income before income taxes
     29,229       29,745       35,357       15,123       25,339       105,564       95,864  
Income taxes
     10,044       10,416       12,511       5,311       8,960       37,198       33,654  
 
                                          
Net operating income
   $ 19,185     $ 19,329     $ 22,846     $ 9,812     $ 16,379     $ 68,366     $ 62,210  
 
                                          
 
                                                        
Net earned premiums and other considerations by:
                                                        
Major product grouping:
                                                        
Group dental
   $ 111,393     $ 121,444     $ 124,780     $ 128,323     $ 128,242     $ 502,789     $ 520,513  
Group disability single premiums for closed blocks
     33,920       —       —       —       26,700       26,700       40,906  
All other group disability
     121,586       123,390       118,595       123,078       124,777       489,840       465,517  
Group life
     59,212       63,734       63,553       65,019       66,203       258,509       249,876  
 
                                          
Total
   $ 326,111     $ 308,568     $ 306,928     $ 316,420     $ 345,922     $ 1,277,838     $ 1,276,812  
 
                                          

Page 10

 

(ASSURANT LOGO)
Assurant Employee Benefits (continued)
Condensed Statement of Operations
(Unaudited)
                                                         
    For the Three Months Ended     For the Year Ended  
    March 31,     December 31,     September 30,     June 30,     March 31,     December 31,     December 31,  
($ in thousands)   2006     2005     2005     2005     2005     2005     2004  
Sales:
                                                        
Group dental
   $ 26,979     $ 17,316     $ 21,588     $ 18,187     $ 41,757     $ 98,848     $ 119,064  
Group disability
     13,633       9,722       12,649       14,864       25,420       62,655       70,387  
Group life
     6,681       6,702       5,883       10,898       18,561       42,044       48,486  
 
                                          
Total
   $ 47,293     $ 33,740     $ 40,120     $ 43,949     $ 85,738     $ 203,547     $ 237,937  
 
                                          
Ratios:
                                                        
Loss ratio (a)
     75.3 %     69.9 %     69.1 %     76.3 %     77.4 %     73.3 %     74.4 %
Expense ratio (b)
     29.8 %     34.4 %     34.5 %     32.5 %     27.6 %     32.1 %     31.4 %
 
                                                        
Investment yield (1)
     6.47 %     6.15 %     6.29 %     6.14 %     6.12 %     6.19 %     6.22 %
 
                                                        
Real estate investment income (1)
   $ —     $ —     $ 2,560     $ —     $ —     $ 2,560     $ —  
 
(a)   The loss ratio is equal to policyholder benefits divided by net earned premiums and other considerations.
 
(b)   The expense ratio is equal to selling, underwriting and general expenses divided by net earned premiums and other considerations and fees and other income.
 
(1)   Investment yield excludes investment income from real estate partnerships.

Page 11

 

(ASSURANT LOGO)
Assurant Preneed
Condensed Statement of Operations
(Unaudited)
                                                         
    For the Three Months Ended     For the Year Ended  
    March 31,     December 31,     September 30,     June 30,     March 31,     December 31,     December 31,  
($ in thousands)   2006     2005     2005     2005     2005     2005     2004  
Revenues:
                                                        
Net earned premiums and other considerations
   $ 83,952     $ 91,496     $ 127,447     $ 125,837     $ 121,199     $ 465,979     $ 526,120  
Net investment income
     55,086       57,052       56,204       62,688       53,012       228,956       206,300  
Fees and other income
     223       587       1,922       (196 )     1,179       3,492       6,810  
 
                                          
 
     139,261       149,135       185,573       188,329       175,390       698,427       739,230  
 
                                          
Benefits, losses and expenses:
                                                        
Policyholder benefits
     96,920       100,720       129,916       127,900       127,153       485,689       531,320  
Selling, underwriting, general and administrative expenses
     31,860       40,814       39,570       40,732       37,531       158,647       156,486  
 
                                          
 
     128,780       141,534       169,486       168,632       164,684       644,336       687,806  
 
                                          
 
                                                        
Income before income taxes
     10,481       7,601       16,087       19,697       10,706       54,091       51,424  
Income taxes
     3,629       2,818       5,612       6,857       3,750       19,037       17,189  
 
                                          
Net operating income
   $ 6,852     $ 4,783     $ 10,475     $ 12,840     $ 6,956     $ 35,054     $ 34,235  
 
                                          
 
                                                        
Net earned premiums and other considerations by channel:
                                                        
AMLIC
   $ 60,248     $ 56,738     $ 64,210     $ 64,299     $ 64,589     $ 249,836     $ 273,147  
Independent — United States
     15,953       27,633       56,703       55,353       50,859       190,548       234,176  
Independent — Canada
     7,751       7,125       6,534       6,185       5,751       25,595       18,797  
 
                                          
Total
   $ 83,952     $ 91,496     $ 127,447     $ 125,837     $ 121,199     $ 465,979     $ 526,120  
 
                                          
 
                                                        
Life and annuity sales by channel:
                                                        
AMLIC
   $ 68,799     $ 60,631     $ 68,715     $ 72,531     $ 71,370     $ 273,247     $ 294,708  
Independent — United States (2)
     31,999       39,335       50,614       49,499       43,552       183,000       214,623  
Independent — Canada
     22,890       23,236       22,457       22,478       18,097       86,268       72,866  
 
                                          
Total
   $ 123,688     $ 123,202     $ 141,786     $ 144,508     $ 133,019     $ 542,515     $ 582,197  
 
                                          
 
                                                        
Investment yield (1)
     6.35 %     6.59 %     6.49 %     6.18 %     6.23 %     6.43 %     6.34 %
 
                                                        
Real estate investment income (1)
   $ —     $ —     $ —     $ 9,409     $ —     $ 9,409     $ —  
 
(1)   Investment yield excludes investment income from real estate partnerships.
 
(2)   Per the announced sale of the US preneed independent insurance franchise, all sales written by Assurant are 100% reinsured as of November 1, 2005.

Page 12

 

(ASSURANT LOGO)
Assurant Corporate and Other
Condensed Statement of Operations
(Unaudited)
                                                         
    For the Three Months Ended     For the Year Ended  
    March 31,     December 31,     September 30,     June 30,     March 31,     December 31,     December 31,  
($ in thousands)   2006     2005     2005     2005     2005     2005     2004  
Revenues:
                                                        
Net earned premiums and other considerations
   $ —     $ —     $ —     $ —     $ —     $ —     $ —  
Net investment income (1)
     13,850       6,963       6,872       6,624       7,335       27,794       25,878  
Net realized (loss) gain on investments
     (4,452 )     (8,301 )     11,965       4,079       492       8,235       24,308  
Loss on disposal of businesses
     —       —       —       —       —       —       (9,232 )
Amortization of deferred gain on disposal of businesses
     8,833       7,155       11,706       11,784       11,863       42,508       57,632  
Fees and other income
     —       1,051       100       178       103       1,432       1,844  
 
                                          
 
     18,231       6,868       30,643       22,665       19,793       79,969       100,430  
 
                                          
Benefits, losses and expenses:
                                                        
Policyholder benefits
     —       —       54,148       7,795       —       61,943       —  
Selling, underwriting, general and administrative expenses
     16,639       37,381       20,843       16,938       20,893       96,055       76,904  
Interest expense
     15,315       15,315       15,315       15,314       15,314       61,258       58,581  
 
                                          
 
     31,954       52,696       90,306       40,047       36,207       219,256       135,485  
 
                                          
 
                                                        
Loss before income taxes and cumulative effect of change in accounting principle
     (13,723 )     (45,828 )     (59,663 )     (17,382 )     (16,414 )     (139,287 )     (35,055 )
Income taxes
     (6,176 )     (55,829 )     (27,762 )     (9,222 )     (3,034 )     (95,847 )     (4,725 )
 
                                          
Net operating (loss) income before cumulative effect of change in accounting principle
     (7,547 )     10,001       (31,901 )     (8,160 )     (13,380 )     (43,440 )     (30,330 )
Cumulative effect of change in accounting principle
     1,547       —       —       —       —       —       —  
 
                                          
Net operating (loss) income
   $ (6,000 )   $ 10,001     $ (31,901 )   $ (8,160 )   $ (13,380 )   $ (43,440 )   $ (30,330 )
 
                                          
 
                                                        
Real estate investment income
   $ 4,857     $ —     $ —     $ —     $ —     $ —     $ —  
 
                                                        
Corporate and Other Reconciliation
                                                        
Assurant Corporate and Other Segment Net Operating Income
   $ (6,000 )   $ 10,001     $ (31,901 )   $ (8,160 )   $ (13,380 )   $ (43,440 )   $ (30,330 )
 
                                                        
Adjustments, net of tax:
                                                        
Amortization of deferred gain on disposal of businesses
     (5,741 )     (4,651 )     (7,609 )     (7,660 )     (7,711 )     (27,631 )     (37,461 )
Interest expense
     9,955       9,955       9,955       9,954       9,954       39,818       38,078  
Net realized loss (gain) on investments
     2,894       5,396       (9,794 )     (2,651 )     (320 )     (7,369 )     (15,800 )
Excess loss of reinsurance program (1995-1997)
     —       —       35,060       5,203       —       40,263       —  
Loss on disposal of business
     —       —       —       —       —       —       6,337  
Expense directly related to the initial and secondary public offerings
     —       —       —       —       1,040       1,040       3,894  
Cumulative effect of change in accounting principle
     (1,547 )     —       —       —       —       —       —  
 
                                          
Corporate and other per Reconciliation of Net Operating Income to Net Income (page 5)
   $ (439 )   $ 20,701     $ (4,289 )   $ (3,314 )   $ (10,417 )   $ 2,681     $ (35,282 )
 
                                          

Page 13

 

(ASSURANT LOGO)
Assurant, Inc. and Subsidiaries
Investments
(Unaudited)
                                 
    As of             As of          
    March 31,             December 31,          
($ in thousands)   2006             2005          
Investments by Type
                                
Fixed maturities: available-for-sale, at fair value
   $ 8,847,534             $ 8,961,778          
Equity Securities: available-for-sale
                                
Preferred stocks
     735,773               691,523          
Common stocks
     10,258               1,578          
Commercial mortgage loans on real estate, at amortized cost
     1,234,185               1,212,006          
Policy loans
     60,044               61,043          
Cash and short-term investments
     912,887               1,283,043          
Collateral held under securities lending
     543,198               610,662          
Other investments
     555,761               549,759          
 
                            
Total
   $ 12,899,640             $ 13,371,392          
 
                            
 
                                
Fixed Maturity Securities by Credit Quality (Fair Value)
                                
Aaa / Aa / A
   $ 6,111,759       69 %   $ 6,211,058       69 %
Baa
     2,097,445       24 %     2,122,752       24 %
Ba
     509,981       6 %     515,740       6 %
B
     122,648       1 %     101,724       1 %
Caa and lower
     4,953       0 %     9,764       0 %
In or near default
     748       0 %     740       0 %
 
                        
Total
   $ 8,847,534       100 %   $ 8,961,778       100 %
 
                        
 
                                
Fixed Maturity Securities by Issuer Type (Fair Value)
                                
U.S government and government agencies and authorities
   $ 180,351       2 %   $ 207,711       2 %
State, municipalities and political subdivisions
     263,298       3 %     235,933       3 %
Foreign government
     570,428       6 %     589,353       6 %
Public utilities
     1,111,267       13 %     1,064,591       12 %
Mortgage backed securities
     1,467,888       17 %     1,492,684       17 %
All other corporate bonds
     5,254,302       59 %     5,371,506       60 %
 
                        
Total
   $ 8,847,534       100 %   $ 8,961,778       100 %
 
                        

Page 14

 

(ASSURANT LOGO)
Assurant, Inc.
Investment Results by Asset Category and Annualized Yields
(Unaudited)
                                                 
    For the Three Months Ended March 31, 2006     For the Three Months Ended March 31, 2005  
            Investment     Investment             Investment     Investment  
($ in thousands)   Yield     Income     Gain (Loss)     Yield     Income     Gain (Loss)  
Fixed maturities: available-for-sale, at fair value
     5.83 %   $ 126,841     $ (2,617 )     5.76 %   $ 125,248     $ 286  
Equity Securities: available-for-sale
     6.32 %     11,783       (1,653 )     6.68 %     9,267       278  
Commercial mortgage loans on real estate, at amortized cost
     7.64 %     23,353       (126 )     7.54 %     19,757       (425 )
Policy loans
     5.77 %     873       —       6.85 %     1,105       —  
Cash and short-term investments
     3.66 %     10,056       141       2.15 %     5,427       (2 )
Other investments
     18.79 %     25,965       (197 )     6.92 %     9,406       355  
 
                                        
Total
             198,871     $ (4,452 )             170,210     $ 492  
Investment expenses
             (6,309 )                     (6,010 )        
 
                                            
Net investment income
           $ 192,562                     $ 164,200          
 
                                            
 
                                                
Gross investment gain
                   $ 6,125                     $ 8,167  
Gross investment loss
                     (10,577 )                     (7,675 )
Write-downs on available-for-sale securities
                     —                       —  
 
                                            
Net investment gain (loss)
                   $ (4,452 )                   $ 492  
 
                                            

Page 15

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