Exhibit 99.2
Assurant, Inc. (AIZ)
Financial Supplement as of June 30, 2007
ASSURANT, INC. AND SUBSIDIARIES
EARNINGS RELEASE SUPPLEMENT
AS OF JUNE 30, 2007
INDEX TO SUPPLEMENT
Page: | ||
REGULATION G – NON GAAP MEASURES |
1 | |
SUMMARY FINANCIAL HIGHLIGHTS (unaudited) |
2 | |
SEGMENTED 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) |
15 | |
INVESTMENT RESULTS BY ASSET CATEGORY & ANNUALIZED YIELDS (unaudited) |
16 | |
SUMMARY OF NET OPERATING INCOME DISCLOSED ITEMS (unaudited) |
17 |
About Assurant:
Assurant is a premier provider of specialized insurance products and related services in North America and selected other international markets. The four key businesses – Assurant Solutions; Assurant Specialty Property; Assurant Health; and Assurant Employee Benefits – 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 debt protection administration; credit-related insurance; warranties and service contracts; pre-funded funeral insurance; creditor-placed homeowners insurance; manufactured housing homeowners insurance; individual health and small employer group health insurance; group dental insurance; group disability insurance; and group life insurance.
Assurant, a Fortune 500 company and a member of the S&P 500, is traded on the New York Stock Exchange under the symbol AIZ. Assurant has more than $25 billion in assets and $7 billion in annual revenue. Assurant has more than 13,000 employees and is headquartered in New York’s financial district. www.assurant.com.
Safe Harbor Statement:
Some of the statements included in this statistical supplement, particularly those anticipating future financial performance, business prospects, growth and operating strategies and similar matters, are forward-looking statements that involve a number of risks and uncertainties. For those statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. For a discussion of the factors that could affect our actual results please refer to the risk factors identified from time to time in our SEC reports, including, but not limited to our 10-K, as filed with the SEC.
Regulation G – Non GAAP Measures
Assurant uses the following non-GAAP financial measures to analyze the company’s operating performance for the periods presented in the press release. Because Assurant’s calculation of these measures may differ from similar measures used by other companies, investors should be careful when comparing Assurant’s non-GAAP financial measures to those of other companies.
(1) Assurant uses net operating income as an important measure of the company’s operating performance. Net operating income equals net income, excluding net realized gains (losses) on investments and unusual and/or infrequent items. The company believes net operating income provides investors a valuable measure of the performance of the company’s ongoing business, because it excludes both the effect of realized gains (losses) on investments that tend to be highly variable from period to period, and those events that are unusual and/or unlikely to recur.
Page 1
Assurant, Inc. and Subsidiaries
Summary Financial Highlights
(Unaudited)
For the Three Months Ended June 30, |
For the Six Months Ended June 30, |
|||||||||||||
($ in thousands, except shares and per share amounts) | 2007 | 2006 | 2007 | 2006 | ||||||||||
Net operating income (1) |
$ | 168,286 | $ | 149,659 | $ | 344,122 | $ | 313,478 | ||||||
Net realized (losses) gains on investments |
(2,006 | ) | 1,477 | 1,615 | (1,417 | ) | ||||||||
Net income before cumulative effect of change in accounting principle |
166,280 | 151,136 | 345,737 | 312,061 | ||||||||||
Cumulative effect of change in accounting principle |
— | — | — | 1,547 | ||||||||||
Net income |
$ | 166,280 | $ | 151,136 | $ | 345,737 | $ | 313,608 | ||||||
Total revenues |
$ | 2,064,727 | $ | 1,949,090 | $ | 4,121,990 | $ | 3,878,872 | ||||||
PER SHARE AND SHARE DATA: |
||||||||||||||
Basic earnings per share |
||||||||||||||
Net operating income |
$ | 1.39 | $ | 1.16 | $ | 2.83 | $ | 2.43 | ||||||
Net income before cumulative effect of change in accounting principle |
$ | 1.38 | $ | 1.18 | $ | 2.85 | $ | 2.42 | ||||||
Net income |
$ | 1.38 | $ | 1.18 | $ | 2.85 | $ | 2.43 | ||||||
Weighted average of common shares outstanding - basic |
120,657,052 | 128,488,126 | 121,399,339 | 129,239,104 | ||||||||||
Diluted earnings per share |
||||||||||||||
Net operating income |
$ | 1.37 | $ | 1.15 | $ | 2.79 | $ | 2.39 | ||||||
Net income before cumulative effect of change in accounting principle |
$ | 1.36 | $ | 1.16 | $ | 2.80 | $ | 2.38 | ||||||
Net income |
$ | 1.36 | $ | 1.16 | $ | 2.80 | $ | 2.39 | ||||||
Weighted average of common shares outstanding - diluted |
122,492,504 | 130,327,634 | 123,334,227 | 131,197,145 |
Page 2
Assurant, Inc. and Subsidiaries
Summary Financial Highlights (continued)
(Unaudited)
As of June 30, |
As of December 31, |
|||||||
($ in thousands, except shares and per share amounts) | 2007 | 2006 | ||||||
Total assets |
$ | 25,772,955 | $ | 25,165,148 | ||||
Total stockholders’ equity |
$ | 3,814,392 | $ | 3,832,597 | ||||
Total stockholders’ equity (excluding AOCI) |
$ | 3,862,608 | $ | 3,744,533 | ||||
Basic book value per share |
$ | 31.82 | $ | 31.26 | ||||
Basic book value per share (excluding AOCI) (2) |
$ | 32.22 | $ | 30.54 | ||||
Shares outstanding for basic book value per share calculation |
119,883,278 | 122,618,317 | ||||||
Diluted book value per share |
$ | 31.41 | $ | 30.68 | ||||
Diluted book value per share (excluding AOCI) (2) |
$ | 31.81 | $ | 29.97 | ||||
Shares outstanding for diluted book value per share calculation |
121,443,537 | 124,926,639 | ||||||
Debt to total capital ratio (excluding AOCI) |
20.5 | % | 21.0 | % |
Page 3
Assurant, Inc. and Subsidiaries
Segmented Condensed Balance Sheets
At June 30, 2007 and December 31, 2006
(Unaudited)
At June 30, 2007 | ||||||||||||||||||||
Solutions | Specialty Property |
Health | Employee Benefits |
Corporate & Other(1) |
Consolidated | |||||||||||||||
($ in thousands) | ||||||||||||||||||||
Assets |
||||||||||||||||||||
Investments and cash and cash equivalents |
$ | 7,254,138 | $ | 1,864,820 | $ | 1,133,736 | $ | 2,614,366 | $ | 993,741 | $ | 13,860,801 | ||||||||
Reinsurance recoverables |
683,135 | 255,992 | 4,320 | 17,918 | 2,904,082 | 3,865,447 | ||||||||||||||
Deferred acquisition costs |
2,410,781 | 155,724 | 42,767 | 25,225 | — | 2,634,497 | ||||||||||||||
Goodwill |
— | — | — | — | 791,195 | 791,195 | ||||||||||||||
Assets held in separate accounts |
261,973 | — | — | — | 3,053,909 | 3,315,882 | ||||||||||||||
Other assets |
524,707 | 295,342 | 120,207 | 209,222 | 155,655 | 1,305,133 | ||||||||||||||
Total assets |
11,134,734 | 2,571,878 | 1,301,030 | 2,866,731 | 7,898,582 | 25,772,955 | ||||||||||||||
Liabilities |
||||||||||||||||||||
Policyholder benefits and claims payable |
4,293,002 | 290,818 | 543,312 | 1,922,684 | 3,171,972 | 10,221,788 | ||||||||||||||
Unearned premiums |
3,780,690 | 893,820 | 127,265 | 13,543 | 44,758 | 4,860,076 | ||||||||||||||
Debt |
— | — | — | — | 971,818 | 971,818 | ||||||||||||||
Mandatorily redeemable preferred stock |
— | — | — | — | 22,160 | 22,160 | ||||||||||||||
Liabilities related to separate accounts |
261,973 | — | — | — | 3,053,909 | 3,315,882 | ||||||||||||||
Accounts payable and other liabilities |
1,252,363 | 455,271 | 222,459 | 290,253 | 346,493 | 2,566,839 | ||||||||||||||
Total liabilities |
9,588,028 | 1,639,909 | 893,036 | 2,226,480 | 7,611,110 | 21,958,563 | ||||||||||||||
Stockholders’ equity |
||||||||||||||||||||
Equity, excluding accumulated other comprehensive loss |
1,546,706 | 931,969 | 407,994 | 640,251 | 335,688 | 3,862,608 | ||||||||||||||
Accumulated other comprehensive loss |
— | — | — | — | (48,216 | ) | (48,216 | ) | ||||||||||||
Total stockholders’ equity |
1,546,706 | 931,969 | 407,994 | 640,251 | 287,472 | 3,814,392 | ||||||||||||||
Total liabilities and stockholders’ equity |
$ | 11,134,734 | $ | 2,571,878 | $ | 1,301,030 | $ | 2,866,731 | $ | 7,898,582 | $ | 25,772,955 | ||||||||
At December 31, 2006 | ||||||||||||||||||
Solutions | Specialty Property |
Health | Employee Benefits |
Corporate & Other(1) |
Consolidated | |||||||||||||
($ in thousands) | ||||||||||||||||||
Assets |
||||||||||||||||||
Investments and cash and cash equivalents |
$ | 6,875,585 | $ | 1,473,357 | $ | 1,150,679 | $ | 2,569,710 | $ | 1,347,486 | $ | 13,416,817 | ||||||
Reinsurance recoverables |
721,134 | 290,653 | 5,239 | 22,872 | 2,875,074 | 3,914,972 | ||||||||||||
Deferred acquisition costs |
2,168,708 | 148,635 | 53,059 | 27,504 | — | 2,397,906 | ||||||||||||
Goodwill |
— | — | — | — | 790,519 | 790,519 | ||||||||||||
Assets held in separate accounts |
255,784 | — | — | — | 3,042,759 | 3,298,543 | ||||||||||||
Other assets |
615,941 | 277,028 | 69,131 | 186,251 | 198,040 | 1,346,391 | ||||||||||||
Total assets |
10,637,152 | 2,189,673 | 1,278,108 | 2,806,337 | 8,253,878 | 25,165,148 | ||||||||||||
Liabilities |
||||||||||||||||||
Policyholder benefits and claims payable |
4,253,205 | 278,664 | 556,726 | 1,936,662 | 3,153,252 | 10,178,509 | ||||||||||||
Unearned premiums |
3,431,658 | 820,533 | 119,934 | 12,694 | 45,074 | 4,429,893 | ||||||||||||
Debt |
— | — | — | — | 971,774 | 971,774 | ||||||||||||
Mandatorily redeemable preferred stock |
— | — | — | — | 22,160 | 22,160 | ||||||||||||
Liabilities related to separate accounts |
255,784 | — | — | — | 3,042,759 | 3,298,543 | ||||||||||||
Accounts payable and other liabilities |
1,131,710 | 337,563 | 184,683 | 241,369 | 536,347 | 2,431,672 | ||||||||||||
Total liabilities |
9,072,357 | 1,436,760 | 861,343 | 2,190,725 | 7,771,366 | 21,332,551 | ||||||||||||
Stockholders’ equity |
||||||||||||||||||
Equity, excluding accumulated other comprehensive income |
1,564,795 | 752,913 | 416,765 | 615,612 | 394,448 | 3,744,533 | ||||||||||||
Accumulated other comprehensive income |
— | — | — | — | 88,064 | 88,064 | ||||||||||||
Total stockholders’ equity |
1,564,795 | 752,913 | 416,765 | 615,612 | 482,512 | 3,832,597 | ||||||||||||
Total liabilities and stockholders’ equity |
$ | 10,637,152 | $ | 2,189,673 | $ | 1,278,108 | $ | 2,806,337 | $ | 8,253,878 | $ | 25,165,148 | ||||||
(1) | Corporate and Other segment includes Accumulated Other Comprehensive Income (Loss), Reinsurance Recoverables related to the disposal of FFG and LTC businesses, goodwill, separate accounts related to the disposal of FFG business and all of Assurant, Inc.’s debt. |
Page 4
Assurant, Inc. and Subsidiaries
Reconciliation of Net Operating Income to Net Income
(Unaudited)
For the Three Months Ended | For the Six Months Ended |
|||||||||||||||||||||||||||||||
($ in thousands, net of tax) | June 30, 2007 |
March 31, 2007 |
December 31, 2006 |
September 30, 2006 |
June 30, 2006 |
March 31, 2006 |
June 30, 2007 |
June 30, 2006 |
||||||||||||||||||||||||
Assurant Solutions |
$ | 30,210 | $ | 44,069 | $ | 39,810 | $ | 41,707 | $ | 37,148 | $ | 39,747 | $ | 74,279 | $ | 76,895 | ||||||||||||||||
Assurant Specialty Property |
90,207 | 74,434 | 63,956 | 53,445 | 59,276 | 64,444 | 164,641 | 123,720 | ||||||||||||||||||||||||
Assurant Health |
33,838 | 40,524 | 36,960 | 44,847 | 41,016 | 45,096 | 74,362 | 86,112 | ||||||||||||||||||||||||
Assurant Employee Benefits |
21,475 | 28,957 | 19,428 | 24,400 | 20,590 | 19,185 | 50,432 | 39,775 | ||||||||||||||||||||||||
Corporate and other |
(2,862 | ) | (7,632 | ) | (19,908 | ) | (7,535 | ) | (4,930 | ) | (439 | ) | (10,494 | ) | (5,369 | ) | ||||||||||||||||
Amortization of deferred gains on disposal of businesses |
5,360 | 5,427 | 5,861 | 6,128 | 6,514 | 5,741 | 10,787 | 12,255 | ||||||||||||||||||||||||
Interest expense |
(9,942 | ) | (9,943 | ) | (9,949 | ) | (9,950 | ) | (9,955 | ) | (9,955 | ) | (19,885 | ) | (19,910 | ) | ||||||||||||||||
Net operating income |
168,286 | 175,836 | 136,158 | 153,042 | 149,659 | 163,819 | 344,122 | 313,478 | ||||||||||||||||||||||||
Adjustments: |
||||||||||||||||||||||||||||||||
Net realized (losses) gains on investments |
(2,006 | ) | 3,621 | 75,868 | (1,739 | ) | 1,477 | (2,894 | ) | 1,615 | (1,417 | ) | ||||||||||||||||||||
Assurant Solutions legal settlement |
— | — | 40,481 | — | — | — | — | — | ||||||||||||||||||||||||
Net income before cumulative effect of change in |
||||||||||||||||||||||||||||||||
accounting principle |
166,280 | 179,457 | 252,507 | 151,303 | 151,136 | 160,925 | 345,737 | 312,061 | ||||||||||||||||||||||||
Cumulative effect of change in accounting principle |
— | — | — | — | — | 1,547 | — | 1,547 | ||||||||||||||||||||||||
Net income |
$ | 166,280 | $ | 179,457 | $ | 252,507 | $ | 151,303 | $ | 151,136 | $ | 162,472 | $ | 345,737 | $ | 313,608 | ||||||||||||||||
Page 5
Assurant, Inc. and Subsidiaries
Consolidated Condensed Statements of Operations
(Unaudited)
For the Three Months Ended | For the Six Months Ended |
|||||||||||||||||||||||||||||||
($ in thousands) | June 30, 2007 |
March 31, 2007 |
December 31, 2006 |
September 30, 2006 |
June 30, 2006 |
March 31, 2006 |
June 30, 2007 |
June 30, 2006 |
||||||||||||||||||||||||
Revenues: |
||||||||||||||||||||||||||||||||
Net earned premiums and other considerations |
$ | 1,798,687 | $ | 1,759,509 | $ | 1,768,160 | $ | 1,717,640 | $ | 1,685,322 | $ | 1,672,653 | $ | 3,558,196 | $ | 3,357,975 | ||||||||||||||||
Net investment income |
190,302 | 216,896 | 183,014 | 180,672 | 180,438 | 192,562 | 407,198 | 373,000 | ||||||||||||||||||||||||
Net realized (losses) gains on investments |
(3,086 | ) | 5,570 | 116,720 | (2,675 | ) | 2,272 | (4,452 | ) | 2,484 | (2,180 | ) | ||||||||||||||||||||
Amortization of deferred gains on disposal of businesses |
8,246 | 8,349 | 9,017 | 9,428 | 10,022 | 8,833 | 16,595 | 18,855 | ||||||||||||||||||||||||
Fees and other income* |
70,578 | 66,939 | 130,722 | 79,014 | 71,036 | 60,186 | 137,517 | 131,222 | ||||||||||||||||||||||||
2,064,727 | 2,057,263 | 2,207,633 | 1,984,079 | 1,949,090 | 1,929,782 | 4,121,990 | 3,878,872 | |||||||||||||||||||||||||
Benefits, losses and expenses: |
||||||||||||||||||||||||||||||||
Policyholder benefits |
903,081 | 890,449 | 886,747 | 888,317 | 874,204 | 889,679 | 1,793,530 | 1,763,883 | ||||||||||||||||||||||||
Selling, underwriting, general and administrative expenses |
893,876 | 873,999 | 915,398 | 849,414 | 827,408 | 782,432 | 1,767,875 | 1,609,840 | ||||||||||||||||||||||||
Interest expense |
15,296 | 15,297 | 15,306 | 15,307 | 15,315 | 15,315 | 30,593 | 30,630 | ||||||||||||||||||||||||
1,812,253 | 1,779,745 | 1,817,451 | 1,753,038 | 1,716,927 | 1,687,426 | 3,591,998 | 3,404,353 | |||||||||||||||||||||||||
Income before income taxes and cumulative effect of change in accounting principle |
252,474 | 277,518 | 390,182 | 231,041 | 232,163 | 242,356 | 529,992 | 474,519 | ||||||||||||||||||||||||
Income taxes |
86,194 | 98,061 | 137,675 | 79,738 | 81,027 | 81,431 | 184,255 | 162,458 | ||||||||||||||||||||||||
Net income before cumulative effect of change in accounting principle |
166,280 | 179,457 | 252,507 | 151,303 | 151,136 | 160,925 | 345,737 | 312,061 | ||||||||||||||||||||||||
Cumulative effect of change in accounting principle |
— | — | — | — | — | 1,547 | — | 1,547 | ||||||||||||||||||||||||
Net income |
$ | 166,280 | $ | 179,457 | $ | 252,507 | $ | 151,303 | $ | 151,136 | $ | 162,472 | $ | 345,737 | $ | 313,608 | ||||||||||||||||
Share repurchase program: |
||||||||||||||||||||||||||||||||
Shares repurchased |
1,984,400 | 1,421,833 | 1,826,416 | 3,081,000 | 2,140,000 | 1,416,800 | 3,406,233 | 3,556,800 | ||||||||||||||||||||||||
Average repurchase price per share |
$ | 58.56 | $ | 54.48 | $ | 54.45 | $ | 50.34 | $ | 48.43 | $ | 45.17 | $ | 56.86 | $ | 47.13 | ||||||||||||||||
Repurchase price |
$ | 116,216 | $ | 77,460 | $ | 99,444 | $ | 155,109 | $ | 103,630 | $ | 64,001 | $ | 193,676 | $ | 167,631 | ||||||||||||||||
AIZ Closing stock price (NYSE) |
$ | 58.92 | $ | 53.63 | $ | 55.25 | $ | 53.41 | $ | 48.40 | $ | 49.25 | $ | 58.92 | $ | 48.40 | ||||||||||||||||
Investment yield (1) |
5.69 | % | 5.66 | % | 5.73 | % | 5.66 | % | 5.83 | % | 5.75 | % | 5.68 | % | 5.77 | % | ||||||||||||||||
Real estate investment income (1) |
$ | 2,972 | $ | 33,540 | $ | 614 | $ | 3,229 | $ | — | $ | 14,735 | $ | 36,512 | $ | 14,735 |
(1) | Investment yield excludes investment income from real estate partnerships. |
* | The three months ended December 31, 2006 includes $62,278 related to a legal settlement in Assurant Solutions. See page 7. |
Page 6
Assurant Solutions
Condensed Statements of Operations
(Unaudited)
For the Three Months Ended | For the Six Months Ended | |||||||||||||||||||||||
($ in thousands) | June 30, 2007 |
March 31, 2007 |
December 31, 2006 |
September 30, 2006 |
June 30, 2006 |
March 31, 2006 |
June 30, 2007 |
June 30, 2006 | ||||||||||||||||
Revenues: |
||||||||||||||||||||||||
Net earned premiums and other considerations |
$ | 618,675 | $ | 583,011 | $ | 617,798 | $ | 591,237 | $ | 592,182 | $ | 570,388 | $ | 1,201,686 | $ | 1,162,570 | ||||||||
Net investment income |
100,784 | 112,017 | 99,852 | 96,625 | 98,951 | 97,082 | 212,801 | 196,033 | ||||||||||||||||
Fees and other income* |
40,957 | 38,051 | 38,516 | 47,262 | 39,525 | 34,170 | 79,008 | 73,695 | ||||||||||||||||
760,416 | 733,079 | 756,166 | 735,124 | 730,658 | 701,640 | 1,493,495 | 1,432,298 | |||||||||||||||||
Benefits, losses and expenses: |
||||||||||||||||||||||||
Policyholder benefits |
258,527 | 243,344 | 252,296 | 250,886 | 247,208 | 248,380 | 501,871 | 495,588 | ||||||||||||||||
Selling, underwriting, general and administrative expenses |
455,140 | 427,645 | 446,185 | 424,284 | 424,429 | 394,878 | 882,785 | 819,307 | ||||||||||||||||
713,667 | 670,989 | 698,481 | 675,170 | 671,637 | 643,258 | 1,384,656 | 1,314,895 | |||||||||||||||||
Income before income taxes |
46,749 | 62,090 | 57,685 | 59,954 | 59,021 | 58,382 | 108,839 | 117,403 | ||||||||||||||||
Income taxes* |
16,539 | 18,021 | 17,875 | 18,247 | 21,873 | 18,635 | 34,560 | 40,508 | ||||||||||||||||
Net operating income* |
$ | 30,210 | $ | 44,069 | $ | 39,810 | $ | 41,707 | $ | 37,148 | $ | 39,747 | $ | 74,279 | $ | 76,895 | ||||||||
Net earned premiums and other considerations: |
||||||||||||||||||||||||
Domestic: |
||||||||||||||||||||||||
Credit |
$ | 76,109 | $ | 80,921 | $ | 86,185 | $ | 88,470 | $ | 98,206 | $ | 95,851 | $ | 157,030 | $ | 194,057 | ||||||||
Service contracts |
280,274 | 261,863 | 278,691 | 255,962 | 256,135 | 249,982 | 542,137 | 506,117 | ||||||||||||||||
Other |
15,517 | 16,689 | 19,791 | 18,034 | 19,759 | 23,699 | 32,206 | 43,458 | ||||||||||||||||
Total Domestic |
371,900 | 359,473 | 384,667 | 362,466 | 374,100 | 369,532 | 731,373 | 743,632 | ||||||||||||||||
International: |
||||||||||||||||||||||||
Credit |
92,413 | 96,877 | 104,288 | 104,372 | 97,612 | 88,210 | 189,290 | 185,822 | ||||||||||||||||
Service contracts |
62,543 | 42,717 | 41,449 | 18,868 | 24,416 | 14,761 | 105,260 | 39,177 | ||||||||||||||||
Other |
10,260 | 8,979 | 15,158 | 24,327 | 13,311 | 13,933 | 19,239 | 27,244 | ||||||||||||||||
Total International |
165,216 | 148,573 | 160,895 | 147,567 | 135,339 | 116,904 | 313,789 | 252,243 | ||||||||||||||||
Preneed |
81,559 | 74,965 | 72,236 | 81,204 | 82,743 | 83,952 | 156,524 | 166,695 | ||||||||||||||||
Total |
$ | 618,675 | $ | 583,011 | $ | 617,798 | $ | 591,237 | $ | 592,182 | $ | 570,388 | $ | 1,201,686 | $ | 1,162,570 | ||||||||
Fee income: |
||||||||||||||||||||||||
Domestic: |
||||||||||||||||||||||||
Debt protection |
$ | 7,469 | $ | 8,750 | $ | 13,523 | $ | 13,698 | $ | 13,750 | $ | 13,082 | $ | 16,219 | $ | 26,832 | ||||||||
Service contracts |
17,190 | 16,877 | 15,872 | 23,556 | 14,432 | 12,567 | 34,067 | 26,999 | ||||||||||||||||
Other |
5,205 | 6,493 | 4,092 | 4,884 | 4,796 | 4,022 | 11,698 | 8,818 | ||||||||||||||||
Total Domestic |
29,864 | 32,120 | 33,487 | 42,138 | 32,978 | 29,671 | 61,984 | 62,649 | ||||||||||||||||
International |
4,384 | 4,492 | 4,433 | 4,069 | 4,165 | 4,276 | 8,876 | 8,441 | ||||||||||||||||
Preneed |
6,709 | 1,439 | 596 | 1,055 | 2,382 | 223 | 8,148 | 2,605 | ||||||||||||||||
Total |
$ | 40,957 | $ | 38,051 | $ | 38,516 | $ | 47,262 | $ | 39,525 | $ | 34,170 | $ | 79,008 | $ | 73,695 | ||||||||
* | For supplemental purposes, segment net operating income for the three months ended December 31, 2006 excludes $62,278 of fees and other income and related tax expense of $21,797 resulting from a third-party legal settlement. These amounts are included in the Consolidated Statements of Operations for the three months and year ended December 31, 2006 in this disclosure (see Page 5). In compliance with GAAP standards and SEC reporting requirements, the impact of this legal settlement is included in the Assurant Solutions segment statements of operations in Assurant, Inc.’s annual report on Form 10-K for the fiscal year ended December 31, 2006 filed with the SEC. |
Page 7
Assurant Solutions (continued)
Condensed Statements of Operations
(Unaudited)
For the Three Months Ended | For the Six Months Ended |
|||||||||||||||||||||||||||||||
($ in thousands) | June 30, 2007 |
March 31, 2007 |
December 31, 2006 |
September 30, 2006 |
June 30, 2006 |
March 31, 2006 |
June 30, 2007 |
June 30, 2006 |
||||||||||||||||||||||||
Gross written premiums: |
||||||||||||||||||||||||||||||||
Domestic: |
||||||||||||||||||||||||||||||||
Credit |
$ | 167,738 | $ | 161,843 | $ | 179,255 | $ | 184,120 | $ | 182,489 | $ | 168,927 | $ | 329,581 | $ | 351,416 | ||||||||||||||||
Service contracts |
448,143 | 454,404 | 468,820 | 398,170 | 378,636 | 354,962 | 902,547 | 733,598 | ||||||||||||||||||||||||
Other |
22,014 | 20,865 | 26,905 | 25,851 | 24,335 | 31,478 | 42,879 | 55,813 | ||||||||||||||||||||||||
Total Domestic |
637,895 | 637,112 | 674,980 | 608,141 | 585,460 | 555,367 | 1,275,007 | 1,140,827 | ||||||||||||||||||||||||
International: |
||||||||||||||||||||||||||||||||
Credit |
201,353 | 191,415 | 184,448 | 175,417 | 159,208 | 161,024 | 392,768 | 320,232 | ||||||||||||||||||||||||
Service contracts |
86,948 | 79,582 | 112,893 | 91,407 | 71,330 | 66,256 | 166,530 | 137,586 | ||||||||||||||||||||||||
Other |
13,933 | 10,422 | 10,048 | 11,353 | 11,817 | 11,437 | 24,355 | 23,254 | ||||||||||||||||||||||||
Total International |
302,234 | 281,419 | 307,389 | 278,177 | 242,355 | 238,717 | 583,653 | 481,072 | ||||||||||||||||||||||||
Total |
$ | 940,129 | $ | 918,531 | $ | 982,369 | $ | 886,318 | $ | 827,815 | $ | 794,084 | $ | 1,858,660 | $ | 1,621,899 | ||||||||||||||||
Preneed (face sales) |
$ | 102,360 | $ | 86,058 | $ | 84,246 | $ | 105,031 | $ | 120,545 | $ | 123,688 | $ | 188,418 | $ | 244,233 | ||||||||||||||||
Combined ratios (a): |
||||||||||||||||||||||||||||||||
Domestic |
100.8 | % | 100.9 | % | 100.1 | % | 98.4 | % | 99.1 | % | 100.0 | % | 100.9 | % | 99.5 | % | ||||||||||||||||
International |
109.7 | % | 102.1 | % | 99.3 | % | 101.7 | % | 100.0 | % | 95.2 | % | 106.1 | % | 97.8 | % | ||||||||||||||||
Preneed yield (1) |
6.27 | % | 6.29 | % | 6.36 | % | 6.21 | % | 6.35 | % | 6.32 | % | 6.25 | % | 6.32 | % | ||||||||||||||||
Preneed average invested assets |
$ | 3,650,784 | $ | 3,600,420 | $ | 3,600,069 | $ | 3,644,564 | $ | 3,565,666 | $ | 3,468,298 | $ | 3,610,906 | $ | 3,529,311 | ||||||||||||||||
Investment yield (1) |
5.83 | % | 5.80 | % | 5.93 | % | 5.67 | % | 5.94 | % | 5.77 | % | 5.82 | % | 5.87 | % | ||||||||||||||||
Real estate investment income (1) |
$ | 1,045 | $ | 14,448 | $ | 276 | $ | 1,453 | $ | — | $ | 2,506 | $ | 15,493 | $ | 2,506 |
(a) | The combined ratio is equal to total benefits, losses and expenses divided by net earned premiums and other considerations and fees and other income excluding the preneed business. |
(1) | Investment yield excludes investment income from real estate partnerships. |
Page 8
Assurant Specialty Property
Condensed Statements of Operations
(Unaudited)
For the Three Months Ended | For the Six Months Ended |
|||||||||||||||||||||||||||||||
($ in thousands) | June 30, 2007 |
March 31, 2007 |
December 31, 2006 |
September 30, 2006 |
June 30, 2006 |
March 31, 2006 |
June 30, 2007 |
June 30, 2006 |
||||||||||||||||||||||||
Revenues: |
||||||||||||||||||||||||||||||||
Net earned premiums and other considerations |
$ | 393,614 | $ | 367,041 | $ | 350,946 | $ | 313,644 | $ | 290,972 | $ | 252,749 | $ | 760,655 | $ | 543,721 | ||||||||||||||||
Net investment income |
23,667 | 21,869 | 20,204 | 19,584 | 17,923 | 16,790 | 45,536 | 34,713 | ||||||||||||||||||||||||
Fees and other income |
12,654 | 12,596 | 13,050 | 13,329 | 13,587 | 9,458 | 25,250 | 23,045 | ||||||||||||||||||||||||
429,935 | 401,506 | 384,200 | 346,557 | 322,482 | 278,997 | 831,441 | 601,479 | |||||||||||||||||||||||||
Benefits, losses and expenses: |
||||||||||||||||||||||||||||||||
Policyholder benefits |
130,866 | 116,787 | 112,409 | 115,379 | 110,474 | 70,459 | 247,653 | 180,933 | ||||||||||||||||||||||||
Selling, underwriting, general and administrative expenses |
159,292 | 170,799 | 173,454 | 148,540 | 122,369 | 109,089 | 330,091 | 231,458 | ||||||||||||||||||||||||
290,158 | 287,586 | 285,863 | 263,919 | 232,843 | 179,548 | 577,744 | 412,391 | |||||||||||||||||||||||||
Income before income taxes |
139,777 | 113,920 | 98,337 | 82,638 | 89,639 | 99,449 | 253,697 | 189,088 | ||||||||||||||||||||||||
Income taxes |
49,570 | 39,486 | 34,381 | 29,193 | 30,363 | 35,005 | 89,056 | 65,368 | ||||||||||||||||||||||||
Net operating income |
$ | 90,207 | $ | 74,434 | $ | 63,956 | $ | 53,445 | $ | 59,276 | $ | 64,444 | $ | 164,641 | $ | 123,720 | ||||||||||||||||
Net Earned Premiums for selected product groupings: |
||||||||||||||||||||||||||||||||
Homeowners (Creditor Placed & Voluntary) |
$ | 276,663 | $ | 250,889 | $ | 233,181 | $ | 198,733 | $ | 178,363 | $ | 142,892 | $ | 527,552 | $ | 321,255 | ||||||||||||||||
Manufactured Housing (Creditor Placed & Voluntary) |
50,452 | 50,670 | 51,774 | 52,535 | 54,184 | 55,968 | 101,122 | 110,152 | ||||||||||||||||||||||||
Other |
66,499 | 65,482 | 65,991 | 62,376 | 58,425 | 53,889 | 131,981 | 112,314 | ||||||||||||||||||||||||
Total |
$ | 393,614 | $ | 367,041 | $ | 350,946 | $ | 313,644 | $ | 290,972 | $ | 252,749 | $ | 760,655 | $ | 543,721 | ||||||||||||||||
Gross Written Premiums for selected product groupings: |
||||||||||||||||||||||||||||||||
Homeowners (Creditor Placed & Voluntary) |
$ | 380,099 | $ | 319,053 | $ | 330,882 | $ | 271,632 | $ | 247,538 | $ | 184,096 | $ | 699,152 | $ | 431,634 | ||||||||||||||||
Manufactured Housing (Creditor Placed & Voluntary) |
77,042 | 67,785 | 73,590 | 82,401 | 80,981 | 69,610 | 144,827 | 150,591 | ||||||||||||||||||||||||
Other |
150,435 | 112,322 | 121,711 | 130,820 | 127,555 | 101,386 | 262,757 | 228,941 | ||||||||||||||||||||||||
Total |
$ | 607,576 | $ | 499,160 | $ | 526,183 | $ | 484,853 | $ | 456,074 | $ | 355,092 | $ | 1,106,736 | $ | 811,166 | ||||||||||||||||
Ratios: |
||||||||||||||||||||||||||||||||
Loss ratio (a) |
33.2 | % | 31.8 | % | 32.0 | % | 36.8 | % | 38.0 | % | 27.9 | % | 32.6 | % | 33.3 | % | ||||||||||||||||
Expense ratio (b) |
39.2 | % | 45.0 | % | 47.7 | % | 45.4 | % | 40.2 | % | 41.6 | % | 42.0 | % | 40.8 | % | ||||||||||||||||
Combined ratio (c) |
71.4 | % | 75.8 | % | 78.5 | % | 80.7 | % | 76.5 | % | 68.5 | % | 73.5 | % | 72.8 | % | ||||||||||||||||
Investment yield (1) |
5.28 | % | 5.51 | % | 5.54 | % | 5.62 | % | 5.70 | % | 5.82 | % | 5.39 | % | 5.70 | % | ||||||||||||||||
Real estate investment income (1) |
$ | 297 | $ | 159 | $ | — | $ | — | $ | — | $ | — | $ | 456 | $ | — |
(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 Health
Condensed Statements of Operations
(Unaudited)
For the Three Months Ended | For the Six Months Ended | |||||||||||||||||||||||
($ in thousands) | June 30, 2007 |
March 31, 2007 |
December 31, 2006 |
September 30, 2006 |
June 30, 2006 |
March 31, 2006 |
June 30, 2007 |
June 30, 2006 | ||||||||||||||||
Revenues: |
||||||||||||||||||||||||
Net earned premiums and other considerations |
$ | 513,936 | $ | 512,784 | $ | 519,438 | $ | 521,527 | $ | 519,587 | $ | 523,405 | $ | 1,026,720 | $ | 1,042,992 | ||||||||
Net investment income |
16,290 | 19,270 | 16,415 | 17,689 | 17,110 | 24,001 | 35,560 | 41,111 | ||||||||||||||||
Fees and other income |
10,445 | 9,688 | 10,549 | 11,035 | 10,250 | 9,726 | 20,133 | 19,976 | ||||||||||||||||
540,671 | 541,742 | 546,402 | 550,251 | 546,947 | 557,132 | 1,082,413 | 1,104,079 | |||||||||||||||||
Benefits, losses and expenses: |
||||||||||||||||||||||||
Policyholder benefits |
329,327 | 317,784 | 328,769 | 325,325 | 321,322 | 325,401 | 647,111 | 646,723 | ||||||||||||||||
Selling, underwriting, general and administrative expenses |
159,088 | 161,410 | 160,411 | 155,186 | 163,019 | 162,712 | 320,498 | 325,731 | ||||||||||||||||
488,415 | 479,194 | 489,180 | 480,511 | 484,341 | 488,113 | 967,609 | 972,454 | |||||||||||||||||
Income before income taxes |
52,256 | 62,548 | 57,222 | 69,740 | 62,606 | 69,019 | 114,804 | 131,625 | ||||||||||||||||
Income taxes |
18,418 | 22,024 | 20,262 | 24,893 | 21,590 | 23,923 | 40,442 | 45,513 | ||||||||||||||||
Net operating income |
$ | 33,838 | $ | 40,524 | $ | 36,960 | $ | 44,847 | $ | 41,016 | $ | 45,096 | $ | 74,362 | $ | 86,112 | ||||||||
Net earned premiums and other considerations: |
||||||||||||||||||||||||
Individual: |
||||||||||||||||||||||||
Individual medical |
$ | 320,442 | $ | 314,662 | $ | 310,826 | $ | 305,246 | $ | 300,267 | $ | 297,338 | $ | 635,104 | $ | 597,605 | ||||||||
Short-term medical |
23,499 | 22,561 | 24,125 | 26,839 | 25,489 | 25,001 | 46,060 | 50,490 | ||||||||||||||||
Subtotal |
343,941 | 337,223 | 334,951 | 332,085 | 325,756 | 322,339 | 681,164 | 648,095 | ||||||||||||||||
Small employer group |
169,995 | 175,561 | 184,487 | 189,442 | 193,831 | 201,066 | 345,556 | 394,897 | ||||||||||||||||
Total |
$ | 513,936 | $ | 512,784 | $ | 519,438 | $ | 521,527 | $ | 519,587 | $ | 523,405 | $ | 1,026,720 | $ | 1,042,992 | ||||||||
Page 10
Assurant Health (continued)
Condensed Statements of Operations
(Unaudited)
For the Three Months Ended | For the Six Months Ended |
|||||||||||||||||||||||||||||||
($ in thousands) | June 30, 2007 |
March 31, 2007 |
December 31, 2006 |
September 30, 2006 |
June 30, 2006 |
March 31, 2006 |
June 30, 2007 |
June 30, 2006 |
||||||||||||||||||||||||
Sales (Annualized issued premiums): |
||||||||||||||||||||||||||||||||
Individual: |
||||||||||||||||||||||||||||||||
Individual medical |
$ | 100,468 | $ | 99,614 | $ | 88,154 | $ | 90,271 | $ | 76,616 | $ | 76,192 | $ | 200,082 | $ | 152,808 | ||||||||||||||||
Short-term medical |
33,606 | 31,939 | 29,078 | 34,841 | 33,612 | 35,014 | 65,545 | 68,626 | ||||||||||||||||||||||||
Subtotal |
134,074 | 131,553 | 117,232 | 125,112 | 110,228 | 111,206 | 265,627 | 221,434 | ||||||||||||||||||||||||
Small employer group |
28,307 | 29,520 | 28,652 | 33,336 | 32,527 | 34,573 | 57,827 | 67,100 | ||||||||||||||||||||||||
Total |
$ | 162,381 | $ | 161,073 | $ | 145,884 | $ | 158,448 | $ | 142,755 | $ | 145,779 | $ | 323,454 | $ | 288,534 | ||||||||||||||||
Membership by product line: |
||||||||||||||||||||||||||||||||
Individual: |
||||||||||||||||||||||||||||||||
Individual medical |
650 | 641 | 641 | 639 | 632 | 636 | 650 | 632 | ||||||||||||||||||||||||
Short-term medical |
99 | 85 | 87 | 99 | 105 | 100 | 99 | 105 | ||||||||||||||||||||||||
Subtotal |
749 | 726 | 728 | 738 | 737 | 736 | 749 | 737 | ||||||||||||||||||||||||
Small employer group |
181 | 191 | 207 | 216 | 226 | 239 | 181 | 226 | ||||||||||||||||||||||||
Total |
930 | 917 | 935 | 954 | 963 | 975 | 930 | 963 | ||||||||||||||||||||||||
Ratios: |
||||||||||||||||||||||||||||||||
Loss ratio (a) |
64.1 | % | 62.0 | % | 63.3 | % | 62.4 | % | 61.8 | % | 62.2 | % | 63.0 | % | 62.0 | % | ||||||||||||||||
Expense ratio (b) |
30.3 | % | 30.9 | % | 30.3 | % | 29.1 | % | 30.8 | % | 30.5 | % | 30.6 | % | 30.6 | % | ||||||||||||||||
Combined ratio (c) |
93.1 | % | 91.7 | % | 92.3 | % | 90.2 | % | 91.4 | % | 91.6 | % | 92.4 | % | 91.5 | % | ||||||||||||||||
Investment yield (1) |
5.84 | % | 5.70 | % | 5.69 | % | 5.76 | % | 5.83 | % | 5.70 | % | 5.80 | % | 5.76 | % | ||||||||||||||||
Real estate investment income (1) |
$ | 590 | $ | 3,535 | $ | 123 | $ | 646 | $ | — | $ | 7,372 | $ | 4,125 | $ | 7,372 |
(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 11
Assurant Employee Benefits
Condensed Statements of Operations
(Unaudited)
For the Three Months Ended | For the Six Months Ended | |||||||||||||||||||||||
($ in thousands) | June 30, 2007 |
March 31, 2007 |
December 31, 2006 |
September 30, 2006 |
June 30, 2006 |
March 31, 2006 |
June 30, 2007 |
June 30, 2006 | ||||||||||||||||
Revenues: |
||||||||||||||||||||||||
Net earned premiums and other considerations |
$ | 272,462 | $ | 296,673 | $ | 279,978 | $ | 291,232 | $ | 282,581 | $ | 326,111 | $ | 569,135 | $ | 608,692 | ||||||||
Net investment income |
39,408 | 51,887 | 39,049 | 39,893 | 38,744 | 40,839 | 91,295 | 79,583 | ||||||||||||||||
Fees and other income |
6,379 | 6,277 | 6,477 | 6,685 | 7,547 | 6,832 | 12,656 | 14,379 | ||||||||||||||||
318,249 | 354,837 | 325,504 | 337,810 | 328,872 | 373,782 | 673,086 | 702,654 | |||||||||||||||||
Benefits, losses and expenses: |
||||||||||||||||||||||||
Policyholder benefits |
184,361 | 212,534 | 193,273 | 196,727 | 195,195 | 245,439 | 396,895 | 440,634 | ||||||||||||||||
Selling, underwriting, general and administrative expenses |
101,062 | 98,026 | 102,353 | 103,726 | 101,827 | 99,114 | 199,088 | 200,941 | ||||||||||||||||
285,423 | 310,560 | 295,626 | 300,453 | 297,022 | 344,553 | 595,983 | 641,575 | |||||||||||||||||
Income before income taxes |
32,826 | 44,277 | 29,878 | 37,357 | 31,850 | 29,229 | 77,103 | 61,079 | ||||||||||||||||
Income taxes |
11,351 | 15,320 | 10,450 | 12,957 | 11,260 | 10,044 | 26,671 | 21,304 | ||||||||||||||||
Net operating income |
$ | 21,475 | $ | 28,957 | $ | 19,428 | $ | 24,400 | $ | 20,590 | $ | 19,185 | $ | 50,432 | $ | 39,775 | ||||||||
Net earned premiums and other considerations by: |
||||||||||||||||||||||||
Major product grouping: |
||||||||||||||||||||||||
Group dental |
$ | 102,567 | $ | 101,535 | $ | 104,448 | $ | 104,367 | $ | 108,010 | $ | 111,393 | $ | 204,102 | $ | 219,403 | ||||||||
Group disability single premiums for closed blocks |
— | 22,847 | — | 12,393 | — | 33,920 | 22,847 | 33,920 | ||||||||||||||||
All other group disability |
115,539 | 118,189 | 119,812 | 119,679 | 119,847 | 121,586 | 233,728 | 241,433 | ||||||||||||||||
Group life |
54,356 | 54,102 | 55,718 | 54,793 | 54,724 | 59,212 | 108,458 | 113,936 | ||||||||||||||||
Total |
$ | 272,462 | $ | 296,673 | $ | 279,978 | $ | 291,232 | $ | 282,581 | $ | 326,111 | $ | 569,135 | $ | 608,692 | ||||||||
Page 12
Assurant Employee Benefits (continued)
Condensed Statements of Operations
(Unaudited)
For the Three Months Ended | For the Six Months Ended |
|||||||||||||||||||||||||||||||
($ in thousands) | June 30, 2007 |
March 31, 2007 |
December 31, 2006 |
September 30, 2006 |
June 30, 2006 |
March 31, 2006 |
June 30, 2007 |
June 30, 2006 |
||||||||||||||||||||||||
Sales: |
||||||||||||||||||||||||||||||||
Group dental |
$ | 19,747 | $ | 42,212 | $ | 17,119 | $ | 20,678 | $ | 12,843 | $ | 26,979 | $ | 61,959 | $ | 39,822 | ||||||||||||||||
Group disability |
14,121 | 20,394 | 11,126 | 12,362 | 10,022 | 13,633 | 34,515 | 23,655 | ||||||||||||||||||||||||
Group life |
7,051 | 11,875 | 5,859 | 6,954 | 5,344 | 6,681 | 18,926 | 12,025 | ||||||||||||||||||||||||
Total |
$ | 40,919 | $ | 74,481 | $ | 34,104 | $ | 39,994 | $ | 28,209 | $ | 47,293 | $ | 115,400 | $ | 75,502 | ||||||||||||||||
Ratios: |
||||||||||||||||||||||||||||||||
Loss ratio (a) |
67.7 | % | 71.6 | % | 69.0 | % | 67.5 | % | 69.1 | % | 75.3 | % | 69.7 | % | 72.4 | % | ||||||||||||||||
Expense ratio (b) |
36.2 | % | 32.4 | % | 35.7 | % | 34.8 | % | 35.1 | % | 29.8 | % | 34.2 | % | 32.3 | % | ||||||||||||||||
Investment yield (1) |
6.21 | % | 6.09 | % | 6.32 | % | 6.25 | % | 6.17 | % | 6.47 | % | 6.17 | % | 6.32 | % | ||||||||||||||||
Real estate investment income (1) |
$ | 1,040 | $ | 14,164 | $ | 215 | $ | 1,130 | $ | — | $ | — | $ | 15,204 | $ | — |
(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 13
Assurant Corporate and Other
Condensed Statements of Operations
(Unaudited)
For the Three Months Ended | For the Six Months Ended |
|||||||||||||||||||||||||||||||
($ in thousands) | June 30, 2007 |
March 31, 2007 |
December 31, 2006 |
September 30, 2006 |
June 30, 2006 |
March 31, 2006 |
June 30, 2007 |
June 30, 2006 |
||||||||||||||||||||||||
Revenues: |
||||||||||||||||||||||||||||||||
Net earned premiums and other considerations |
$ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||
Net investment income |
10,153 | 11,853 | 7,494 | 6,881 | 7,710 | 13,850 | 22,006 | 21,560 | ||||||||||||||||||||||||
Net realized (losses) gains on investments |
(3,086 | ) | 5,570 | 116,720 | (2,675 | ) | 2,272 | (4,452 | ) | 2,484 | (2,180 | ) | ||||||||||||||||||||
Amortization of deferred gains on disposal of businesses |
8,246 | 8,349 | 9,017 | 9,428 | 10,022 | 8,833 | 16,595 | 18,855 | ||||||||||||||||||||||||
Fees and other income |
143 | 327 | (148 | ) | 703 | 127 | — | 470 | 127 | |||||||||||||||||||||||
15,456 | 26,099 | 133,083 | 14,337 | 20,131 | 18,231 | 41,555 | 38,362 | |||||||||||||||||||||||||
Benefits, losses and expenses: |
||||||||||||||||||||||||||||||||
Policyholder benefits |
— | — | — | — | 5 | — | — | 5 | ||||||||||||||||||||||||
Selling, underwriting, general and administrative expenses |
19,294 | 16,119 | 32,995 | 17,678 | 15,764 | 16,639 | 35,413 | 32,403 | ||||||||||||||||||||||||
Interest expense |
15,296 | 15,297 | 15,306 | 15,307 | 15,315 | 15,315 | 30,593 | 30,630 | ||||||||||||||||||||||||
34,590 | 31,416 | 48,301 | 32,985 | 31,084 | 31,954 | 66,006 | 63,038 | |||||||||||||||||||||||||
Loss before income taxes and cumulative effect of change in accounting principle |
(19,134 | ) | (5,317 | ) | 84,782 | (18,648 | ) | (10,953 | ) | (13,723 | ) | (24,451 | ) | (24,676 | ) | |||||||||||||||||
Income taxes |
(9,684 | ) | 3,210 | 32,910 | (5,552 | ) | (4,059 | ) | (6,176 | ) | (6,474 | ) | (10,235 | ) | ||||||||||||||||||
Net operating (loss) income before cumulative effect of change in accounting principle |
(9,450 | ) | (8,527 | ) | 51,872 | (13,096 | ) | (6,894 | ) | (7,547 | ) | (17,977 | ) | (14,441 | ) | |||||||||||||||||
Cumulative effect of change in accounting principle |
— | — | — | — | 1,547 | — | 1,547 | |||||||||||||||||||||||||
Net operating (loss) income |
$ | (9,450 | ) | $ | (8,527 | ) | $ | 51,872 | $ | (13,096 | ) | $ | (6,894 | ) | $ | (6,000 | ) | $ | (17,977 | ) | $ | (12,894 | ) | |||||||||
Real estate investment income |
$ | — | $ | 1,234 | $ | — | $ | — | $ | — | $ | 4,857 | $ | 1,234 | $ | 4,857 | ||||||||||||||||
Corporate and Other Reconciliation |
||||||||||||||||||||||||||||||||
Assurant Corporate and Other Segment Net Operating Income |
$ | (9,450 | ) | $ | (8,527 | ) | $ | 51,872 | $ | (13,096 | ) | $ | (6,894 | ) | $ | (6,000 | ) | $ | (17,977 | ) | $ | (12,894 | ) | |||||||||
Adjustments, net of tax: |
||||||||||||||||||||||||||||||||
Amortization of deferred gains on disposal of businesses |
(5,360 | ) | (5,427 | ) | (5,861 | ) | (6,128 | ) | (6,514 | ) | (5,741 | ) | (10,787 | ) | (12,255 | ) | ||||||||||||||||
Interest expense |
9,942 | 9,943 | 9,949 | 9,950 | 9,955 | 9,955 | 19,885 | 19,910 | ||||||||||||||||||||||||
Net realized losses (gains) on investments |
2,006 | (3,621 | ) | (75,868 | ) | 1,739 | (1,477 | ) | 2,894 | (1,615 | ) | 1,417 | ||||||||||||||||||||
Cumulative effect of change in accounting principle |
— | — | — | — | — | (1,547 | ) | — | (1,547 | ) | ||||||||||||||||||||||
Corporate and Other per Reconciliation of Net Operating Income to Net Income (page 5) |
$ | (2,862 | ) | $ | (7,632 | ) | $ | (19,908 | ) | $ | (7,535 | ) | $ | (4,930 | ) | $ | (439 | ) | $ | (10,494 | ) | $ | (5,369 | ) | ||||||||
Page 14
Assurant, Inc. and Subsidiaries
Investments
(Unaudited)
($ in thousands) | As of June 30, 2007 |
As of December 31, 2006 |
||||||||||
Investments by Type |
||||||||||||
Fixed maturities: available-for-sale, at fair value |
$ | 9,267,665 | $ | 9,118,049 | ||||||||
Equity Securities: available-for-sale, at fair value |
||||||||||||
Preferred stocks |
726,382 | 740,603 | ||||||||||
Common stocks |
788 | 1,036 | ||||||||||
Commercial mortgage loans on real estate, at amortized cost |
1,356,957 | 1,266,158 | ||||||||||
Policy loans |
57,872 | 58,733 | ||||||||||
Cash and short-term investments |
1,274,016 | 1,301,786 | ||||||||||
Collateral held under securities lending |
629,263 | 365,958 | ||||||||||
Other investments |
547,858 | 564,494 | ||||||||||
Total |
$ | 13,860,801 | $ | 13,416,817 | ||||||||
Fixed Maturity Securities by Credit Quality (Fair Value) |
||||||||||||
Aaa / Aa / A |
$ | 6,302,482 | 68 | % | $ | 6,127,830 | 67 | % | ||||
Baa |
2,373,027 | 26 | % | 2,386,317 | 26 | % | ||||||
Ba |
470,234 | 5 | % | 479,037 | 5 | % | ||||||
B and lower |
121,922 | 1 | % | 124,865 | 2 | % | ||||||
Total |
$ | 9,267,665 | 100 | % | $ | 9,118,049 | 100 | % | ||||
Fixed Maturity Securities by Issuer Type (Fair Value) |
||||||||||||
U.S government and government agencies and authorities |
$ | 309,686 | 3 | % | $ | 327,463 | 3 | % | ||||
State, municipalities and political subdivisions |
540,583 | 6 | % | 236,429 | 3 | % | ||||||
Foreign government |
745,476 | 8 | % | 652,662 | 7 | % | ||||||
Public utilities |
1,059,369 | 12 | % | 1,104,167 | 12 | % | ||||||
Mortgage backed securities |
1,043,707 | 11 | % | 1,206,597 | 14 | % | ||||||
All other corporate bonds |
5,568,844 | 60 | % | 5,590,731 | 61 | % | ||||||
Total |
$ | 9,267,665 | 100 | % | $ | 9,118,049 | 100 | % | ||||
Page 15
Assurant, Inc. and Subsidiaries
Investment Results by Asset Category and Annualized Yields
(Unaudited)
For the Three Months Ended June 30, 2007 |
For the Three Months Ended June 30, 2006 |
For the Six Months Ended June 30, 2007 |
For the Six Months Ended June 30, 2006 |
|||||||||||||||||||||||||||||||||||||||||
($ in thousands) | Yield | Investment Income |
Investment Gain (Loss) |
Yield | Investment Income |
Investment Gain (Loss) |
Yield | Investment Income |
Investment Gain (Loss) |
Yield | Investment Income |
Investment Gain (Loss) |
||||||||||||||||||||||||||||||||
Fixed maturities: available for sale, at fair value |
5.94 | % | $ | 137,417 | $ | (5,042 | ) | 5.76 | % | $ | 127,725 | $ | (258 | ) | 5.94 | % | $ | 271,671 | $ | (1,566 | ) | 5.78 | % | $ | 254,566 | $ | (2,875 | ) | ||||||||||||||||
Equity Securities: available for sale, at fair value |
6.42 | % | 11,898 | (1,077 | ) | 7.11 | % | 13,519 | 37 | 6.50 | % | 24,038 | (1,424 | ) | 6.81 | % | 25,302 | (1,617 | ) | |||||||||||||||||||||||||
Commercial mortgage loans on real estate, at amortized cost |
6.83 | % | 22,573 | — | 7.21 | % | 22,409 | (84 | ) | 6.77 | % | 44,133 | — | 7.43 | % | 45,762 | (209 | ) | ||||||||||||||||||||||||||
Policy loans |
8.41 | % | 1,222 | — | 9.78 | % | 1,457 | — | 7.19 | % | 2,095 | — | 7.75 | % | 2,330 | — | ||||||||||||||||||||||||||||
Cash and short-term investments |
4.59 | % | 14,152 | 9 | 4.59 | % | 10,417 | 7 | 4.62 | % | 29,015 | 26 | 3.75 | % | 20,473 | 148 | ||||||||||||||||||||||||||||
Other investments |
6.72 | % | 9,346 | 3,024 | 8.10 | % | 11,119 | 2,570 | 17.48 | % | 48,863 | 5,448 | 13.59 | % | 37,084 | 2,373 | ||||||||||||||||||||||||||||
Total |
196,608 | $ | (3,086 | ) | 186,646 | $ | 2,272 | 419,815 | $ | 2,484 | 385,517 | $ | (2,180 | ) | ||||||||||||||||||||||||||||||
Investment expenses |
(6,306 | ) | (6,208 | ) | (12,617 | ) | (12,517 | ) | ||||||||||||||||||||||||||||||||||||
Net investment income |
$ | 190,302 | $ | 180,438 | $ | 407,198 | $ | 373,000 | ||||||||||||||||||||||||||||||||||||
Gross investment gain |
$ | 11,846 | $ | 10,682 | $ | 21,187 | $ | 16,808 | ||||||||||||||||||||||||||||||||||||
Gross investment loss |
(14,932 | ) | (8,410 | ) | (18,703 | ) | (18,988 | ) | ||||||||||||||||||||||||||||||||||||
Write-downs on available for sale securities |
— | — | — | — | ||||||||||||||||||||||||||||||||||||||||
Net investment gain |
$ | (3,086 | ) | $ | 2,272 | $ | 2,484 | $ | (2,180 | ) | ||||||||||||||||||||||||||||||||||
Page 16
Assurant, Inc. and Subsidiaries
Summary of Net Operating Income Disclosed Items—(Note 1)
Income / (Expense) Items
(unaudited)
For the Three Months Ended | ||||||||||||||||||||||||||||||||||||||||
($ in millions, after-tax) | June 30, 2007 |
March 31, 2007 |
December 31, 2006 |
September 30, 2006 |
June 30, 2006 |
March 31, 2006 |
||||||||||||||||||||||||||||||||||
$ | Diluted EPS |
$ | Diluted EPS |
$ | Diluted EPS |
$ | Diluted EPS |
$ | Diluted EPS |
$ | Diluted EPS |
|||||||||||||||||||||||||||||
Assurant Solutions: |
||||||||||||||||||||||||||||||||||||||||
Closed block of extended service contracts(a) |
$ | — | — | $ | — | — | $ | — | — | $ | 5.4 | 0.04 | $ | — | — | $ | — | — | ||||||||||||||||||||||
Fees/(Expenses) from sale of US pre-need independent |
$ | 3.5 | 0.03 | $ | — | — | $ | — | — | $ | — | — | $ | (0.7 | ) | (0.01 | ) | $ | (1.3 | ) | (0.01 | ) | ||||||||||||||||||
Loss from restructured international product(b)(c) |
$ | (4.4 | ) | (0.04 | ) | $ | — | — | $ | — | — | $ | — | — | $ | — | — | $ | — | — | ||||||||||||||||||||
Reconciliation of commissions payable accounts(c) |
$ | 4.5 | 0.04 | $ | — | — | $ | — | — | $ | — | — | $ | — | — | $ | — | — | ||||||||||||||||||||||
Assurant Specialty Property: |
||||||||||||||||||||||||||||||||||||||||
Reconciliation of commissions payable accounts(c)(b) |
$ | 5.5 | 0.04 | $ | — | — | $ | — | — | $ | — | — | $ | — | — | $ | — | — | ||||||||||||||||||||||
Processing fees for the National Flood Insurance Program(b) |
$ | — | — | $ | — | — | $ | — | — | $ | 0.3 | 0.00 | $ | 1.3 | 0.01 | $ | 5.2 | 0.04 | ||||||||||||||||||||||
Catastrophe losses, net of reinsurance(b) |
$ | — | — | $ | — | — | $ | — | — | $ | — | — | $ | (4.5 | ) | (0.03 | ) | $ | — | — | ||||||||||||||||||||
Client related settlements |
$ | — | — | $ | — | — | $ | 5.5 | 0.04 | $ | — | — | $ | — | — | $ | — | — | ||||||||||||||||||||||
Assurant Health: |
||||||||||||||||||||||||||||||||||||||||
Legal related settlements(c) |
$ | — | — | $ | — | — | $ | — | — | $ | 2.6 | 0.02 | $ | — | — | $ | — | — | ||||||||||||||||||||||
Assurant Corporate and Other: |
||||||||||||||||||||||||||||||||||||||||
Assurant Foundation funding(c) |
$ | — | — | $ | — | — | $ | (3.3 | ) | (0.03 | ) | $ | — | — | $ | — | — | $ | — | — | ||||||||||||||||||||
Change in certain tax liabilities(d) |
$ | 2.9 | 0.02 | $ | (5.8 | ) | (0.05 | ) | $ | (6.2 | ) | (0.05 | ) | $ | — | — | $ | — | — | $ | — | — |
Statement of Operations line impact:
(a) | Fees and other income |
(b) | Policyholder benefits |
(c) | Selling, underwriting, general and administrative expenses |
(d) | Income taxes |
Page 17