Delaware | 001-31978 | 39-1126612 | ||
(State or Other Jurisdiction of Incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
28 Liberty Street, 41st Floor New York, New York | 10005 | |
(Address of Principal Executive Offices) | (Zip Code) |
☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CR 230.425) |
☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
ASSURANT, INC. | |||
Date: August 1, 2017 | By: | /s/ Bart R. Schwartz | |
Bart R. Schwartz | |||
Executive Vice President, Chief Legal Officer & Secretary |
Exhibit No. | Description |
$90.5 million of net operating income, $1.63 per diluted share, excluding catastrophe losses1, 2 | |
12.7 percent annualized GAAP ROE year-to-date, 10.0 percent annualized operating ROE, excluding AOCI and catastrophe losses3 year-to-date | |
$142 million returned to shareholders in share repurchases and dividends in 2Q 2017 | |
$625 million in corporate capital at quarter end |
(UNAUDITED) | 2Q | 2Q | 6 Months | 6 Months | ||||||||||||
(in millions, net of tax) | 2017 | 2016 | 2017 | 2016 | ||||||||||||
Global Housing | $ | 56.2 | $ | 56.9 | $ | 118.1 | $ | 133.3 | ||||||||
Global Lifestyle | 40.2 | 50.1 | 92.6 | 91.5 | ||||||||||||
Global Preneed | 12.8 | 11.3 | 22.7 | 17.0 | ||||||||||||
Corporate and other | (10.6 | ) | (19.4 | ) | (20.7 | ) | (33.3 | ) | ||||||||
Interest expense | (8.1 | ) | (9.9 | ) | (16.3 | ) | (19.3 | ) | ||||||||
Net operating income | 90.5 | 89.0 | 196.4 | 189.2 | ||||||||||||
Adjustments: | ||||||||||||||||
Assurant Health runoff operations | 3.5 | (5.4 | ) | 11.4 | (32.6 | ) | ||||||||||
Assurant Employee Benefits | — | — | — | 10.5 | ||||||||||||
Net realized gains on investments | 8.6 | 14.0 | 10.8 | 119.1 | ||||||||||||
Amortization of deferred gains and gains on disposal of businesses | 15.2 | 81.8 | 39.3 | 112.7 | ||||||||||||
Other adjustments | 2.4 | (10.1 | ) | 6.1 | (9.2 | ) | ||||||||||
GAAP net income | $ | 120.2 | $ | 169.3 | $ | 264.0 | $ | 389.7 |
• | Net income was $120.2 million, or $2.16 per diluted share, compared to second quarter 2016 net income of $169.3 million, or $2.70 per diluted share. The decline primarily reflects a lower amortization of deferred gains from the sale of Assurant Employee Benefits, partially offset by improvements in Health and other items. |
• | Net operating income4 increased to $90.5 million, or $1.63 per diluted share, compared to second quarter 2016 net operating income of $89.0 million, or $1.42 per diluted share. Results benefitted primarily from lower Corporate and other expenses, partially offset by lower contributions from Global Lifestyle driven by the absence of an $18 million one-time tax benefit in the year-ago quarter. Assurant incurred no reportable catastrophe losses in second quarter 2017, compared to $16 million of reportable catastrophe losses in second quarter 2016. |
• | Net earned premiums, fees and other income from the Global Housing, Global Lifestyle and Global Preneed segments totaled $1.43 billion compared to $1.52 billion in second quarter 2016, driven by a change in program structure implemented in fourth quarter 2016 for a large service contract client in Global Lifestyle. Absent this change, revenue increased, reflecting growth from all major business lines in Global Lifestyle as well as from multi-family housing in Global Housing, partially offset by lower lender-placed premiums. |
(in millions) | 2Q17 | 2Q16 | % Change | 6M17 | 6M16 | % Change | ||||||||||||||||
Net operating income | $ | 56.2 | $ | 56.9 | (1 | )% | $ | 118.1 | $ | 133.3 | (11 | )% | ||||||||||
Net earned premiums, fees and other | $ | 550.2 | $ | 561.1 | (2 | )% | $ | 1,081.9 | $ | 1,138.5 | (5 | )% |
• | Net operating income was generally level with second quarter 2016, reflecting $16 million of lower reportable catastrophes year over year. Excluding catastrophe losses, second quarter 2017 results declined, primarily due to ongoing lender-placed insurance normalization and higher non-catastrophe losses, including claims that did not reach Assurant’s reportable catastrophe threshold. |
• | Net earned premiums, fees and other income decreased in second quarter 2017, primarily due to expected lower placement rates in lender-placed insurance and reduced demand for originations and field services in mortgage solutions. Growth in multi-family housing and from new lender-placed clients partially offset the decline. |
• | Combined ratio for risk-based businesses(a) was 87.0 percent in the second quarter 2017 compared to 87.3 percent in prior-year quarter. This improvement resulted from lower reportable catastrophe losses, partially offset by higher frequency and severity of non-catastrophe claims, as well as expenses to support new lender-placed clients. |
• | Pre-tax margin for fee-based, capital-light businesses(b) was 11.7 percent, up from 11.2 percent from the second quarter of 2016. The improvement resulted from growth in multi-family housing, largely through expansion within our affinity channels. This increase was partially offset by ongoing market weakness and lower client volumes in mortgage solutions. Actions taken to lower expenses in these businesses helped mitigate declines. |
(a) | Combined ratio for the Global Housing risk-based businesses is equal to total policyholder benefits, losses and expenses, including reportable catastrophe losses, divided by net earned premiums and fees and other income, for lender-placed and manufactured housing and other businesses. |
(b) | Pre-tax margin for the Global Housing fee-based, capital-light businesses is equal to income before provision for income taxes divided by total net earned premiums, fees and other income, for multi-family housing and mortgage solutions businesses. |
(in millions) | 2Q17 | 2Q16 | % Change | 6M17 | 6M16 | % Change | ||||||||||||||||
Net operating income | $ | 40.2 | $ | 50.1 | (20 | )% | $ | 92.6 | $ | 91.5 | 1 | % | ||||||||||
Net earned premiums, fees and other | $ | 836.0 | $ | 914.9 | (9 | )% | $ | 1,640.9 | $ | 1,849.2 | (11 | )% |
• | Net operating income decreased in second quarter 2017 due to an $18 million one-time tax benefit in the prior-year quarter. Excluding the tax benefit, second quarter 2017 net operating income increased, primarily due to improved |
• | Net earned premiums, fees and other income decreased compared to the prior-year period entirely due to a change in program structure in fourth quarter 2016 for a large service contract client in Connected Living. Excluding this $138 million reduction, second quarter 2017 revenue increased across all major lines of business, primarily in mobile and extended service contracts. Foreign exchange volatility partially offset the increase. |
• | Combined ratio for risk-based businesses(a) increased to 97.0 percent from 95.8 percent in second quarter 2016, driven largely by less favorable experience in vehicle protection. |
• | Pre-tax margin for fee-based, capital-light businesses(b) was 6.4 percent, up from 3.2 percent in second quarter 2016. The increase was driven in part by the change in client program structure. Higher contributions from Connected Living and ongoing expense management efforts also contributed to the improvement. |
(a) | Combined ratio for the Global Lifestyle risk-based businesses is equal to total policyholder benefits, losses and expenses, divided by net earned premiums and fees and other income, for vehicle protection, credit and other businesses. |
(b) | Pre-tax margin for the Global Lifestyle fee-based, capital-light businesses is equal to income before provision for income taxes divided by total net earned premiums, fees and other income, for Connected Living, including mobile, extended service contracts and assistance services. |
(in millions) | 2Q17 | 2Q16 | % Change | 6M17 | 6M16 | % Change | ||||||||||||||||
Net operating income | $ | 12.8 | $ | 11.3 | 13 | % | $ | 22.7 | $ | 17.0 | 34 | % | ||||||||||
Net earned premiums, fees and other | $ | 46.3 | $ | 43.3 | 7 | % | $ | 90.5 | $ | 86.0 | 5 | % |
• | Net operating income increased primarily due to higher fee and investment income, partially offset by higher expenses. |
• | Net earned premiums, fees and other income was up, driven mainly by increased volume in Canada. |
• | Face sales totaled $239.0 million, down from $245.6 million in second quarter 2016, reflecting lower volumes of final need policies. |
(in millions) | 2Q17 | 2Q16 | % Change | 6M17 | 6M16 | % Change | ||||||||||||||||
Net operating loss(5) | $ | (10.6 | ) | $ | (19.4 | ) | (45 | )% | $ | (20.7 | ) | $ | (33.3 | ) | (38 | )% |
• | Net operating loss5 declined compared to second quarter 2016 primarily due to lower taxes and fees associated with Assurant Employee Benefits, which was sold in March 2016, as well as reduced corporate expenses in second quarter 2017. |
• | Corporate capital approximated $625 million as of June 30, 2017. Deployable capital totaled approximately $375 million, net of the company’s $250 million risk buffer. |
• | Share repurchases and dividends totaled $142 million in second quarter 2017. Dividends to shareholders totaled $30 million, and Assurant repurchased approximately 1.1 million shares of common stock for $112 million. From July 1 through July 28, 2017, the company repurchased an additional 235,000 shares for approximately $25 million, with $442 million remaining under the current repurchase authorization. |
• | Assurant net operating income, excluding reportable catastrophe losses, to be roughly level with 2016 results, excluding catastrophe losses. Profitable growth primarily in fee-based, capital-light offerings and a lower net operating loss at Corporate to be offset by declines in lender-placed insurance and legacy businesses. |
• | Assurant operating earnings per diluted share, excluding catastrophe losses, to grow double-digits from 2016 primarily due to share repurchase activity. |
• | Global Housing net earned premiums and net operating income, excluding reportable catastrophe losses, to decrease from 2016 as a result of additional declines in lender-placed insurance reflecting lower placement rates anticipated for the second half of 2017, as well as reduced contributions from mortgage solutions. Ongoing expense management initiatives within Global Housing and growth in multi-family housing to partially mitigate declines. |
• | Global Lifestyle to increase net operating income as a result of improved performance in Connected Living, driven primarily by growth in mobile, as well as higher contributions from vehicle protection and from expense efficiencies. Declines in legacy credit insurance and retail clients to continue. Revenue expected to decrease, largely due to a change in program structure for a large service contract client. Under the new structure, the overall economics of the program are maintained with no impact to profitability, however net earned premiums will be lower by approximately $500 million compared to 2016 with a commensurate reduction in expenses. Excluding this, net earned premiums and fee income to increase from growth in Connected Living and vehicle protection globally. Results to be impacted by foreign exchange. |
• | Global Preneed fee income and earnings to increase due to sales growth across North America from our alignment with market leaders and operational efficiencies. |
• | Corporate & Other6 full-year net operating loss to be approximately $60 million, compared to $71 million in 2016, primarily reflecting lower tax and employee-related costs as well as reduced corporate expenditures. |
• | Capital to be deployed through a combination of share repurchases, common stock dividends, and reinvestments and acquisitions in the business, subject to market conditions and other factors. Business segment dividends from Global Housing, Global Lifestyle and Global Preneed to approximate segment net operating income including catastrophe losses, subject to the growth of the businesses, rating agency and regulatory capital requirements. In addition to the $86 million received year to date, approximately $15 million in dividends expected from Assurant Health and Assurant Employee Benefits, subject to regulatory approval. |
(i) | loss of significant client relationships or business, distribution sources or contracts and reliance on a few clients; |
(ii) | general global economic, financial market and political conditions and conditions in the markets in which we operate, including uncertainty surrounding the new administration; |
(iii) | failure to adequately predict or manage claims and other costs; |
(iv) | inadequacy of reserves established for future claims; |
(v) | losses due to natural or man-made catastrophes; |
(vi) | a decline in our credit or financial strength ratings; |
(vii) | risks related to our international operations, including fluctuations in exchange rates; |
(viii) | deterioration in our market capitalization compared to its book value that could result in an impairment of goodwill; |
(ix) | failure to maintain effective internal control over financial reporting; |
(x) | failure to effectively maintain and modernize our information technology systems; |
(xi) | data breaches compromising client information and privacy; |
(xii) | cyber security threats and cyber-attacks; |
(xiii) | significant competitive pressures in our businesses; |
(xiv) | inability to execute strategic plans related to acquisitions, dispositions or new ventures or integrate them effectively; |
(xv) | failure to develop or maintain distribution sources or attract and retain sales representatives; |
(xvi) | diminished value of invested assets in our investment portfolio (due to, among other things, volatility in financial markets; the global economic slowdown; credit, currency and liquidity risk; other than temporary impairments and increases in interest rates); |
(xvii) | unfavorable outcomes in litigation and/or regulatory investigations that could negatively affect our results, business and reputation; |
(xviii) | current or new laws and regulations that could increase our costs and decrease our revenue; |
(xix) | uncertain tax positions, changes in tax laws and unexpected tax liabilities; |
(xx) | risks related to outsourcing activities; |
(xxi) | decline in the value of mobile devices in our inventory or subject to guaranteed buyback; |
(xxii) | employee misconduct; |
(xxiii) | unavailability, inadequacy and unaffordable pricing of reinsurance coverage; |
(xxiv) | insolvency of third parties to whom we have sold or may sell businesses through reinsurance or modified co-insurance; |
(xxv) | inability of reinsurers to meet their obligations; |
(xxvi) | credit risk of some of our agents; |
(xxvii) | inability of our subsidiaries to pay sufficient dividends; and |
(xxviii) | failure to successfully execute our transformation, retain and hire qualified personnel including key executives and provide for succession of key executives. |
(1) | Assurant uses net operating income (as defined below), excluding reportable catastrophe losses, as an important measure of the company’s operating performance. The company believes net operating income, excluding reportable catastrophe losses, provides investors a valuable measure of the performance of the company’s ongoing business because it excludes the effect of reportable catastrophe losses, which can be volatile. The comparable GAAP measure is net income. |
(UNAUDITED) | 2Q | 2Q | 6 Months | 6 Months | ||||||||||||
(in millions) | 2017 | 2016 | 2017 | 2016 | ||||||||||||
Global Housing, excluding catastrophe losses | $ | 56.2 | $ | 72.9 | $ | 118.7 | $ | 158.6 | ||||||||
Global Lifestyle | 40.2 | 50.1 | 92.6 | 91.5 | ||||||||||||
Global Preneed | 12.8 | 11.3 | 22.7 | 17.0 | ||||||||||||
Corporate and other | (10.6 | ) | (19.4 | ) | (20.7 | ) | (33.3 | ) | ||||||||
Interest expense | (8.1 | ) | (9.9 | ) | (16.3 | ) | (19.3 | ) | ||||||||
Net operating income | 90.5 | 105.0 | 197.0 | 214.5 | ||||||||||||
Adjustments, pre-tax: | ||||||||||||||||
Assurant Health runoff operations | 4.3 | (7.7 | ) | 16.9 | (42.0 | ) | ||||||||||
Assurant Employee Benefits | — | — | — | 16.8 | ||||||||||||
Net realized gains on investments | 13.2 | 21.6 | 16.6 | 183.3 | ||||||||||||
Reportable catastrophe losses | — | (24.6 | ) | (0.9 | ) | (39.0 | ) | |||||||||
Amortization of deferred gains and gains on disposal of businesses | 23.4 | 125.8 | 60.4 | 173.4 | ||||||||||||
Other adjustments | 3.9 | (15.6 | ) | 9.7 | (14.2 | ) | ||||||||||
Provision for income taxes | (15.1 | ) | (35.2 | ) | (35.7 | ) | (103.1 | ) | ||||||||
GAAP net income | $ | 120.2 | $ | 169.3 | $ | 264.0 | $ | 389.7 |
(2) | Assurant uses net operating income (as defined below) per diluted share, excluding reportable catastrophe losses, as an important measure of the company’s stockholder value. The company believes this metric provides investors a valuable measure of stockholder value because it excludes the effect of reportable catastrophe losses, which can be volatile. The comparable GAAP measure is net income per diluted share, defined as net income divided by weighted average diluted shares outstanding. |
(UNAUDITED) | 2Q | 2Q | 6 Months | 6 Months | ||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Net operating income, excluding catastrophe losses, per diluted share | $ | 1.63 | $ | 1.67 | $ | 3.51 | $ | 3.34 | ||||||||
Adjustments, pre-tax: | ||||||||||||||||
Assurant Health runoff operations | 0.08 | (0.12 | ) | 0.30 | (0.65 | ) | ||||||||||
Assurant Employee Benefits | — | — | — | 0.26 | ||||||||||||
Net realized gains on investments | 0.24 | 0.34 | 0.30 | 2.85 | ||||||||||||
Amortization of deferred gains and gains on disposal of businesses | 0.42 | 2.01 | 1.09 | 2.70 | ||||||||||||
Reportable catastrophe losses | — | (0.39 | ) | (0.02 | ) | (0.61 | ) | |||||||||
Other adjustments | 0.07 | (0.25 | ) | 0.17 | (0.22 | ) | ||||||||||
Provision for income taxes | (0.28 | ) | (0.56 | ) | (0.64 | ) | (1.61 | ) | ||||||||
Net income per diluted share | $ | 2.16 | $ | 2.70 | $ | 4.71 | $ | 6.06 |
(3) | Assurant uses operating return on equity (“Operating ROE”), excluding accumulated other comprehensive income (“AOCI”) and reportable catastrophe losses, as an important measure of the company’s operating performance. Operating ROE, excluding AOCI and reportable catastrophe losses, equals net operating income (as defined below) for the periods presented divided by average stockholders’ equity, excluding AOCI and reportable catastrophe losses, for the year to date period. The company believes Operating ROE excluding AOCI and reportable catastrophe losses provides investors a valuable measure of the performance of the company’s ongoing business, because it excludes the effect of Assurant Health runoff operations, the divested Assurant Employee Benefits business, which was sold on March 1, 2016, and reportable catastrophe losses, which can be volatile. The calculation also excludes net realized gains (losses) on investments, amortization of deferred gains and gains on disposal of businesses and those events that are highly variable and do not represent the ongoing operations of the company. The comparable GAAP measure is GAAP return on equity (“GAAP ROE”), defined as net income, for the period presented, divided by average stockholders’ equity for the year-to-date period. |
(UNAUDITED) | 2Q | 2Q | 6 Months | 6 Months | ||||||||
2017 | 2016 | 2017 | 2016 | |||||||||
Annual operating return on average equity, excluding AOCI and reportable catastrophe losses | 9.2 | % | 10.9 | % | 10.0 | % | 11.9 | % | ||||
Assurant Health runoff operations | 0.4 | % | (0.6 | )% | 0.6 | % | (1.8 | )% | ||||
Assurant Employee Benefits | — | — | — | 0.6 | % | |||||||
Net realized gains on investments | 0.9 | % | 1.5 | % | 0.6 | % | 6.6 | % | ||||
Amortization of deferred gains and gains on disposal of businesses | 1.5 | % | 8.5 | % | 2.0 | % | 6.3 | % | ||||
Reportable catastrophe losses | — | (1.7 | )% | — | (1.4 | )% | ||||||
Other adjustments: | ||||||||||||
Gain related to benefit plan activity | 0.4 | % | — | 0.5 | % | 1.0 | % | |||||
Amount related to the sale of AEB | — | — | — | (1.0 | )% | |||||||
Post-close cont. liab. on previous disposition | (0.1 | )% | — | (0.1 | )% | — | ||||||
Intangible asset impairment | — | (1.1 | )% | — | (0.5 | )% | ||||||
Change in derivative investment | (0.1 | )% | 0.1 | % | (0.1 | )% | — | |||||
Change due to effect of including AOCI | (0.7 | )% | (2.8 | )% | (0.8 | )% | (4.6 | )% | ||||
Annual GAAP return on average equity | 11.5 | % | 14.8 | % | 12.7 | % | 17.1 | % |
(4) | Assurant uses net operating income as an important measure of the company’s operating performance. Net operating income equals net income excluding Assurant Health runoff operations, Assurant Employee Benefits, net realized gains (losses) on investments, amortization of deferred gains and gains on disposal of businesses and other highly variable items. The company believes net operating income provides a valuable measure of the performance of the company’s ongoing business because it excludes the effect of Assurant Health runoff operations and the divested Assurant Employee Benefits business, which the company sold on March 1, 2016. The calculation also excludes net realized gains (losses) on investments, amortization of deferred gains and gains on disposal of businesses and those events that are highly variable and do not represent the ongoing operations of the company. The comparable GAAP measure is net income. |
(UNAUDITED) | 2Q | 2Q | 6 Months | 6 Months | ||||||||||||
(in millions) | 2017 | 2016 | 2017 | 2016 | ||||||||||||
Net operating income | $ | 90.5 | $ | 89.0 | $ | 196.4 | $ | 189.2 | ||||||||
Adjustments (pre-tax): | ||||||||||||||||
Assurant Health runoff operations | 4.3 | (7.7 | ) | 16.9 | (42.0 | ) | ||||||||||
Assurant Employee Benefits | — | — | — | 16.8 | ||||||||||||
Net realized gains on investments | 13.2 | 21.6 | 16.6 | 183.3 | ||||||||||||
Amortization of deferred gains and gains on disposal of businesses | 23.4 | 125.8 | 60.4 | 173.4 | ||||||||||||
Other adjustments | 3.9 | (15.6 | ) | 9.7 | (14.2 | ) | ||||||||||
Provision for income taxes | (15.1 | ) | (43.8 | ) | (36.0 | ) | (116.8 | ) | ||||||||
GAAP net income | $ | 120.2 | $ | 169.3 | $ | 264.0 | $ | 389.7 |
(5) | Assurant uses Corporate & Other net operating loss as an important measure of the corporate segment’s operating performance. Corporate & Other net operating loss equals Total Corporate & Other segment net income, excluding Health runoff operations net income (loss), amortization of deferred gains and gains on disposal of businesses, net realized gains (losses) on investments, interest expense and other highly variable items. The company believes Corporate & Other net operating loss provides a valuable measure of the performance of the company’s corporate segment because it excludes the effect of amortization of deferred gains and gains on disposal of businesses, net realized gains (losses) on investments, interest expense and those events that are highly variable and do not represent the ongoing operations of the company’s corporate segment. The comparable GAAP measure is Total Corporate & Other segment net income. |
(UNAUDITED) | 2Q | 2Q | 6 Months | 6 Months | ||||||||||||
(in millions) | 2017 | 2016 | 2017 | 2016 | ||||||||||||
GAAP Total Corporate & Other segment net income | $ | 11.0 | $ | 51.0 | $ | 30.6 | $ | 137.4 | ||||||||
Excluding: Health runoff operations net income (loss) | 3.5 | (5.4 | ) | 11.4 | (32.6 | ) | ||||||||||
GAAP Corporate & Other segment net income | 7.5 | 56.4 | 19.2 | 170.0 | ||||||||||||
Adjustments, pre-tax: | ||||||||||||||||
Amortization of deferred gains and gains on disposal of businesses | (23.4 | ) | (125.8 | ) | (60.4 | ) | (173.4 | ) | ||||||||
Interest expense | 12.4 | 15.2 | 25.0 | 29.7 | ||||||||||||
Net realized gains on investments | (13.2 | ) | (21.6 | ) | (16.6 | ) | (183.3 | ) | ||||||||
Other adjustments | (3.9 | ) | 15.6 | (9.7 | ) | 14.2 | ||||||||||
Provision for income taxes | 10.0 | 40.8 | 21.8 | 109.5 | ||||||||||||
Corporate & other net operating loss | $ | (10.6 | ) | $ | (19.4 | ) | $ | (20.7 | ) | $ | (33.3 | ) |
(6) | The company outlook for Corporate & Other full-year net operating loss constitutes forward-looking information and the company believes that it cannot reconcile such forward-looking information to the most comparable GAAP measure without unreasonable efforts. A reconciliation would require the company to quantify amortization of deferred gains and gains on disposal of businesses, interest expense, net realized gains on investments, and change in derivative investment. The last two components cannot be reliably quantified due to the combination of variability and volatility of such components and may, depending on the size of the components, have a significant impact on the reconciliation. The company is able to reasonably quantify a range for the first two components for the forecast period, based on certain assumptions relating to future reinsured premium on disposed business and level of interest on non-recourse debt during the forecast period. In addition, the company is assuming it does not incur additional recourse debt or extinguish recourse debt in the forecast period. Amortization of deferred gains and gains on disposal of businesses is expected to be approximately $62-72 million after-tax while interest expense is expected to be approximately $32-35 million after-tax. |
2Q | 6 Months | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
(in millions except number of shares and per share amounts) | ||||||||||||||||
Revenues | ||||||||||||||||
Net earned premiums | $ | 1,115.3 | $ | 1,202.3 | $ | 2,165.6 | $ | 2,617.5 | ||||||||
Fees and other income | 326.9 | 328.3 | 667.1 | 686.0 | ||||||||||||
Net investment income | 121.7 | 119.8 | 242.3 | 255.5 | ||||||||||||
Net realized gains on investments | 13.2 | 21.6 | 16.6 | 183.3 | ||||||||||||
Gain on pension plan curtailment | — | — | — | 29.6 | ||||||||||||
Amortization of deferred gains and gains on disposal of businesses | 23.4 | 125.8 | 60.4 | 173.4 | ||||||||||||
Total revenues | 1,600.5 | 1,797.8 | 3,152.0 | 3,945.3 | ||||||||||||
Benefits, losses and expenses | ||||||||||||||||
Policyholder benefits | 416.4 | 400.8 | 774.4 | 944.6 | ||||||||||||
Selling, underwriting, general and administrative expenses | 993.0 | 1,146.3 | 1,958.8 | 2,397.9 | ||||||||||||
Interest expense | 12.4 | 15.2 | 25.0 | 29.7 | ||||||||||||
Total benefits, losses and expenses | 1,421.8 | 1,562.3 | 2,758.2 | 3,372.2 | ||||||||||||
Income before provision for income taxes | 178.7 | 235.5 | 393.8 | 573.1 | ||||||||||||
Provision for income taxes | 58.5 | 66.2 | 129.8 | 183.4 | ||||||||||||
Net income | $ | 120.2 | $ | 169.3 | $ | 264.0 | $ | 389.7 | ||||||||
Net income per share: | ||||||||||||||||
Basic | $ | 2.18 | $ | 2.72 | $ | 4.74 | $ | 6.12 | ||||||||
Diluted | $ | 2.16 | $ | 2.70 | $ | 4.71 | $ | 6.06 | ||||||||
Dividends per share | $ | 0.53 | $ | 0.50 | $ | 1.06 | $ | 1.00 | ||||||||
Share data: | ||||||||||||||||
Basic weighted average shares outstanding | 55,230,367 | 62,244,778 | 55,713,172 | 63,665,856 | ||||||||||||
Diluted weighted average shares outstanding | 55,509,898 | 62,723,292 | 56,075,152 | 64,274,009 |
June 30, | December 31, | |||||||
2017 | 2016 | |||||||
(in millions) | ||||||||
Assets | ||||||||
Investments and cash and cash equivalents | $ | 12,488.4 | $ | 12,511.0 | ||||
Reinsurance recoverables | 8,953.2 | 9,083.2 | ||||||
Deferred acquisition costs | 3,326.6 | 3,267.4 | ||||||
Goodwill | 905.5 | 830.9 | ||||||
Assets held in separate accounts | 1,779.1 | 1,692.3 | ||||||
Other assets | 2,606.1 | 2,324.3 | ||||||
Total assets | $ | 30,058.9 | $ | 29,709.1 | ||||
Liabilities | ||||||||
Policyholder benefits and claims payable | $ | 13,371.4 | $ | 13,414.1 | ||||
Unearned premiums | 6,718.3 | 6,626.5 | ||||||
Debt | 1,136.6 | 1,067.0 | ||||||
Liabilities related to separate accounts | 1,779.1 | 1,692.3 | ||||||
Deferred gain on disposal of businesses | 170.1 | 232.2 | ||||||
Accounts payable and other liabilities | 2,658.8 | 2,578.9 | ||||||
Total liabilities | 25,834.3 | 25,611.0 | ||||||
Stockholders’ equity | ||||||||
Equity, excluding accumulated other comprehensive income | 3,987.7 | 4,003.5 | ||||||
Accumulated other comprehensive income | 236.9 | 94.6 | ||||||
Total stockholders’ equity | 4,224.6 | 4,098.1 | ||||||
Total liabilities and stockholders’ equity | $ | 30,058.9 | $ | 29,709.1 |