EX-99.1 2 ex991er6302019.htm EXHIBIT 99.1 Exhibit

Exhibit 99.1

tiptlogoa14.jpg
TIPTREE REPORTS SECOND QUARTER 2019 RESULTS
Revenues of $191.1 million for the quarter, up 25.1% from the prior year period.

Net income before non-controlling interests of $12.2 million for the quarter, an increase of $11.3 million from the prior year period, driven by improved insurance operating performance and realized and unrealized gains on investments.

Operating EBITDA(1) of $12.7 million for the quarter, a decrease of $2.3 million, or 15.3% from the prior year period, driven by re-balancing of our investment portfolio.

Book value per share(2) as of June 30, 2019 was $11.47, which including dividends paid represents a 8.1%(3) year over year return.

Declared a dividend of $0.04 per share to stockholders of record on August 19, 2019 with a payment date of August 26, 2019.

New York, New York - August 5, 2019 - Tiptree Inc. (NASDAQ:TIPT) (“Tiptree” or the “Company”), a holding company that combines specialty insurance operations with investment management, today announced its financial results for the six months ended June 30, 2019
Summary Consolidated Statements of Operations
($ in millions, except per share information)
Three Months Ended  
 June 30,
 
Six Months Ended 
 June 30,
GAAP:
2019
 
2018
 
2019
 
2018
Total revenues
$
191.1

 
$
152.7

 
$
375.0

 
$
300.8

Net income (loss) before non-controlling interests
12.2

 
0.9

 
16.5

 
29.9

Net income (loss) attributable to Common Stockholders
11.8

 
0.8

 
15.7

 
24.4

Diluted earnings per share
0.32

 
0.02

 
0.43

 
0.73

Cash dividends paid per common share
0.075

 
0.065

 
0.075

 
0.065

 
 
 
 
 
 
 
 
Non-GAAP: (1)
 
 
 
 
 
 
 
Operating EBITDA
12.7

 
15.0

 
25.3

 
23.9

Adjusted EBITDA
22.9

 
10.1

 
37.5

 
15.5

Book value per share (2)
11.47

 
10.74

 
11.47

 
10.74


(1) For further information relating to the Company’s Operating EBITDA, Adjusted EBITDA and Book value per share, including a reconciliation to GAAP financials, see “—Non-GAAP Reconciliations” below.
(2) For periods prior to April 10, 2018, book value per share assumed full exchange of limited partnership units of Tiptree Financial Partners, L.P. (“TFP”) for common stock.
(3) Total return per share as of June 30, 2019 defined as cumulative dividends paid of $0.145 per share plus growth in book value per share from June 30, 2018.

Earnings Conference Call
Tiptree will host a conference call on Tuesday, August 6, 2019 at 9:00 a.m. Eastern Time to discuss its second quarter 2019 financial results. A copy of our investor presentation, to be used during the conference call, as well as this press release, will be available in the Investor Relations section of the Company’s website, located at www.tiptreeinc.com.

The conference call will be available via live or archived webcast at http://www.investors.tiptreeinc.com. To listen to a live broadcast, go to the site at least 15 minutes prior to the scheduled start time in order to register, download and install any necessary audio software. To participate in the telephone conference call, please dial 1-877-407-4018 (domestic) or 1-201-689-8471 (international). Please dial in at least five minutes prior to the start time.

A replay of the call will be available from Tuesday, August 6, 2019 at 1:00 p.m. Eastern Time, until midnight Eastern on Tuesday, August 13, 2019. To listen to the replay, please dial 1-844-512-2921 (domestic) or 1-412-317-6671 (international), Passcode: 13691896.


Page 1



Q2’19 Financial Overview

Overall:
Delivered a year-to-date return of 7.0%, as measured by growth in book value per share plus dividends paid.
Year-to-date 2019, we purchased and retired 1,472,730 shares of our Common Stock for $9.1 million through open market purchases and block purchases.
Increased our quarterly dividend for the third consecutive year to $0.04 per share, a 14.3% increase.

Insurance:
Gross written premiums for year-to-date 2019 were $461.0 million, up 17.0% from the prior year. Net written premiums were $274.6 million, up 34.0%, driven by growth in all product lines.
Within our insurance investment portfolio, we reduced our exposure to levered credit by selling approximately $110.0 million of assets and repaying asset-based debt.

Tiptree Capital:
In 2019, began re-positioning our asset management platform, by agreeing to invest $75 million to seed new investment funds in Corvid Peak (formerly known as Tricadia).
On April 22, 2019, we sold our CLO management business (Telos Asset Management) for an approximate $7.6 million pre-tax gain and a future contingent earn-out.

Consolidated Results of Operations
Revenues

For the three months ended June 30, 2019, revenues were $191.1 million, which increased $38.4 million, or 25.1%, over the prior year period. For the six months ended June 30, 2019, revenues were $375.0 million, which increased $74.2 million, or 24.7%, over the prior year period. The increase for both periods was primarily driven by growth in earned premiums, service and administrative fees, and realized and unrealized gains and other revenues. Earned premiums were $235.5 million for the six months ended June 30, 2019, up from $201.7 million in the comparable 2018 period driven by growth in net written premiums. The combination of unearned premiums and deferred revenues on the balance sheet grew by $136.1 million, or 23.1%, from June 30, 2018 to June 30, 2019 as a result of increased written premiums in credit protection, warranty and other specialty programs.

Net Income before non-controlling interests

For the three months ended June 30, 2019, net income before non-controlling interests was $12.2 million compared to $0.9 million in the 2018 period, an increase of $11.3 million. The increase was driven by improved insurance operating performance and increased realized and unrealized gains on investments within Tiptree Capital and our insurance investment portfolio.

For the six months ended June 30, 2019, net income before non-controlling interests was $16.5 million compared to $29.9 million in the 2018 period, a decrease of $13.4 million. The decrease was driven by the non-repeat gain on sale of Care which occurred in 2018, partially offset by improved insurance operating performance and increased realized and unrealized gains on investments within Tiptree Capital and our insurance investment portfolio.

Net Income Available to Common Stockholders

For the three months ended June 30, 2019, net income available to Common Stockholders was $11.7 million, an increase of $10.9 million from the prior year period. For the six months ended June 30, 2019, net income available to Common Stockholders was $15.7 million, a decrease of $8.7 million from the prior year period. The key drivers of net income available to Common Stockholders were the same factors which impacted the net income before non-controlling interests.

Income before taxes (from continuing and discontinued operations)

The table below highlights key drivers impacting our consolidated results on a pre-tax basis. Many of our investments are carried at fair value and marked to market through unrealized gains and losses. As a result, we expect our earnings relating to these investments to be relatively volatile between periods in contrast to our fixed income securities, which are marked to market through accumulated other comprehensive income (“AOCI”) in stockholders equity. On February 1, 2018, we sold our senior living operations to Invesque in exchange for a net of 16.6 million shares of Invesque common stock which resulted in a pre-tax gain on sale of $56.9 million in 2018, of which $46.2 million was recorded in the six months ended June 30, 2018.

Page 2



($ in millions)
Three Months Ended  
 June 30,
 
Six Months Ended 
 June 30,

2019
 
2018
 
2019
 
2018
Net realized and unrealized gains (losses)(1)
$
12.4

 
$
(3.8
)
 
$
16.4

 
$
(6.0
)
Discontinued operations (Care)(2)
$

 
$

 
$

 
$
46.8

(1) Excludes Mortgage realized and unrealized gains and losses - Performing and NPLs. Three months ended June 30, 2019 includes $7.6 million gain on sale of the CLO business.
(2) Represents Care for the three months ended March 31, 2018 including a $46.2 million pre-tax gain on sale.

Non-GAAP

Management uses Operating EBITDA, Adjusted EBITDA and book value per share as measurements of operating performance which are non-GAAP measures. Management believes the use of Operating EBITDA and Adjusted EBITDA provides supplemental information useful to investors as they are frequently used by the financial community to analyze financial performance, and to analyze a company’s ability to service its debt and to facilitate comparison among companies. Management uses Operating EBITDA as part of its capital allocation process and to assess comparative returns on invested capital amongst our businesses and investments. Adjusted EBITDA is also used in determining incentive compensation for the Company’s executive officers. Operating EBITDA and Adjusted EBITDA are not measurements of financial performance or liquidity under GAAP and should not be considered as an alternative or substitute for GAAP net income. Management believes the use of book value per share provides supplemental information useful to investors as it is frequently used by the financial community to analyze company growth on a relative per share basis.

Operating EBITDA for the three months ended June 30, 2019 was $12.7 million compared to $15.0 million for the 2018 period, a decrease of $2.3 million, or 15.3%. For the three month period, the decline was driven by the re-balancing of our investment portfolio with a higher portion held in cash. Operating EBITDA for the six months ended June 30, 2019 was $25.3 million compared to $23.9 million for the 2018 period, an increase of $1.4 million, or 5.9%. For the six month period, the key drivers of the increase were driven by improved performance in Tiptree Capital.

Total stockholders’ equity was $407.1 million as of June 30, 2019 compared to $400.8 million as of June 30, 2018, primarily driven by net income, partially offset by share repurchases and dividends paid. Over the past twelve months, Tiptree returned $19.5 million to shareholders through share repurchases and dividends paid. Book value per share for the period ended June 30, 2019 was $11.47, an increase from book value per share of $10.74 as of June 30, 2018. The key drivers of the period-over-period impact were earnings per share and the purchase of 1.5 million shares at an average 40% discount to book value. Those increases were partially offset by dividends paid of $0.145 per share and officer compensation share issuances.

Results by Segment

Tiptree is a holding company that combines insurance operations with investment management capabilities. Our principal operating subsidiary is a leading provider of specialty insurance products and related services. We also allocate capital across a broad spectrum of businesses, assets and other investments, which we refer to as Tiptree Capital. As such, we classify our business into one reportable segment, specialty insurance, with the remainder of our non-insurance operations aggregated into Tiptree Capital. Corporate activities include holding company interest expense, employee compensation and benefits, and other expenses. The following table presents the components of total pre-tax income including continuing and discontinued operations.

Pre-tax Income
($ in millions)
Three Months Ended  
 June 30,
 
Six Months Ended 
 June 30,

2019
 
2018
 
2019
 
2018
Specialty Insurance
$
12.0

 
$
8.7

 
$
20.1

 
$
10.1

Tiptree Capital
11.7

 
(0.5
)
 
17.6

 
(2.2
)
Corporate
(7.9
)
 
(6.6
)
 
(16.8
)
 
(13.4
)
Pre-tax income (loss) from continuing operations
$
15.8

 
$
1.6

 
$
20.9

 
$
(5.5
)
Pre-tax income (loss) from discontinued operations (1)
$

 
$

 
$

 
$
46.8

(1)
Represents Care for the six months ended June 30, 2018 which includes $46.2 million pre-tax gain on sale.


Page 3



Operating EBITDA - Non-GAAP (1) 
The following tables present the components of Operating EBITDA.
($ in millions)
Three Months Ended  
 June 30,
 
Six Months Ended 
 June 30,

2019
 
2018
 
2019
 
2018
Specialty Insurance
$
14.8

 
$
16.2

 
$
28.5

 
$
29.5

Tiptree Capital (2)
3.6

 
3.6

 
8.3

 
6.9

Corporate
(5.7
)
 
(4.8
)
 
(11.5
)
 
(12.5
)
Operating EBITDA
$
12.7

 
$
15.0

 
$
25.3

 
$
23.9

(1)  
For further information relating to the Company’s Total Capital and Operating EBITDA, including a reconciliation to GAAP total stockholders equity and pre-tax income, see “—Non-GAAP Reconciliations.”
(2)
Includes discontinued operations related to Care. As of February 1, 2018, invested capital from Care discontinued operations is represented by our investment in Invesque common shares. For more information, see “Note—(3) Dispositions, Assets Held for Sale and Discontinued Operations” in our Form 10-Q for the quarter ended June 30, 2019.

About Tiptree
Tiptree Inc. (NASDAQ: TIPT) is a holding company that combines insurance operations with investment management capabilities. The Company’s principal operating subsidiary is a leading provider of specialty insurance products and related services, including credit protection, warranty, and programs which underwrite niche personal and commercial lines of insurance. The Company also allocates capital across a broad spectrum of investments, which is referred to as Tiptree Capital. Today, Tiptree Capital consists of asset management operations, mortgage operations and other investments. For more information, please visit www.tiptreeinc.com.
Forward-Looking Statements

This release contains “forward-looking statements” which involve risks, uncertainties and contingencies, many of which are beyond the Company’s control, which may cause actual results, performance, or achievements to differ materially from anticipated results, performance, or achievements. All statements contained in this release that are not clearly historical in nature are forward-looking, and the words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “project,” “should,” “target,” “will,” or similar expressions are intended to identify forward-looking statements. Such forward-looking statements include, but are not limited to, statements about the Company’s plans, objectives, expectations and intentions. The forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, many of which are beyond our control, are difficult to predict and could cause actual results to differ materially from those expressed or forecast in the forward-looking statements. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including, but not limited to those described in the section entitled “Risk Factors” in the Company’s Annual Report on Form 10-K, and as described in the Company’s other filings with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as to the date of this release. The factors described therein are not necessarily all of the important factors that could cause actual results or developments to differ materially from those expressed in any of our forward-looking statements. Other unknown or unpredictable factors also could affect our forward-looking statements. Consequently, our actual performance could be materially different from the results described or anticipated by our forward-looking statements. Given these uncertainties, you should not place undue reliance on these forward-looking statements. Except as required by the federal securities laws, we undertake no obligation to update any forward-looking statements.




Page 4



Tiptree Inc.
Condensed Consolidated Balance Sheet
($ in thousands, except share data)
 
As of
 
June 30, 2019
 
December 31, 2018
Assets:
 
 
 
Investments:
 
 
 
Available for sale securities, at fair value
$
269,054

 
$
283,563

Loans, at fair value
92,053

 
215,383

Equity securities
154,578

 
122,979

Other investments
74,257

 
75,002

Total investments
589,942

 
696,927

Cash and cash equivalents
175,835

 
86,003

Restricted cash
13,531

 
10,521

Notes and accounts receivable, net
233,393

 
223,105

Reinsurance receivables
427,415

 
420,351

Deferred acquisition costs
192,683

 
170,063

Goodwill
91,562

 
91,562

Intangible assets, net
48,084

 
52,121

Other assets
70,420

 
46,034

Assets held for sale
77,501

 
68,231

Total assets
$
1,920,366

 
$
1,864,918


 
 
 
Liabilities and Stockholders’ Equity
 
 
 
Liabilities:
 
 
 
Debt, net
$
296,558

 
$
354,083

Unearned premiums
646,109

 
599,444

Policy liabilities and unpaid claims
128,690

 
131,611

Deferred revenue
80,101

 
75,754

Reinsurance payable
123,671

 
117,597

Other liabilities and accrued expenses
166,067

 
124,190

Liabilities held for sale
72,132

 
62,980

Total liabilities
$
1,513,328

 
$
1,465,659


 
 
 
Stockholders’ Equity:
 
 
 
Preferred stock: $0.001 par value, 100,000,000 shares authorized, none issued or outstanding
$

 
$

Common Stock: $0.001 par value, 200,000,000 shares authorized, 34,540,432 and 35,870,348 shares issued and outstanding, respectively
35

 
36

Additional paid-in capital
324,321

 
331,892

Accumulated other comprehensive income (loss), net of tax
1,389

 
(2,058
)
Retained earnings
70,340

 
57,231

Total Tiptree Inc. stockholders’ equity
396,085

 
387,101

Non-controlling interests - Other
10,953

 
12,158

Total stockholders’ equity
407,038

 
399,259

Total liabilities and stockholders’ equity
$
1,920,366

 
$
1,864,918





Page 5



Tiptree Inc.
Condensed Consolidated Statements of Operations
($ in thousands, except share data)
 
Three Months Ended June 30,
 
Six Months Ended 
 June 30,
 
2019
 
2018
 
2019
 
2018
Revenues:

 

 
 
 
 
Earned premiums, net
$
116,576

 
$
100,044

 
$
235,549

 
$
201,689

Service and administrative fees
26,728

 
24,891

 
52,623

 
49,467

Ceding commissions
3,048

 
2,242

 
5,552

 
4,525

Net investment income
3,428

 
4,927

 
7,729

 
9,132

Net realized and unrealized gains (losses)
24,875

 
12,317

 
45,026

 
19,701

Other revenue
16,417

 
8,288

 
28,496

 
16,267

Total revenues
191,072

 
152,709

 
374,975

 
300,781

Expenses:

 

 
 
 
 
Policy and contract benefits
39,422

 
34,174

 
80,263

 
70,800

Commission expense
72,737

 
62,562

 
147,640

 
125,195

Employee compensation and benefits
30,969

 
27,188

 
60,122

 
54,976

Interest expense
6,532

 
6,655

 
13,452

 
12,601

Depreciation and amortization
3,291

 
2,953

 
6,385

 
5,910

Other expenses
22,416

 
17,600

 
46,253

 
36,765

Total expenses
175,367

 
151,132

 
354,115

 
306,247

Income (loss) before taxes from continuing operations
15,705

 
1,577

 
20,860

 
(5,466
)
Less: provision (benefit) for income taxes
3,501

 
701

 
4,355

 
(867
)
Net income (loss) from continuing operations
12,204

 
876

 
16,505

 
(4,599
)
Discontinued operations:

 

 
 
 
 
Income (loss) before taxes from discontinued operations

 

 

 
624

Gain on sale of discontinued operations

 

 

 
46,184

Less: Provision (benefit) for income taxes

 

 

 
12,327

Net income (loss) from discontinued operations

 

 

 
34,481

Net income (loss) before non-controlling interests
12,204

 
876

 
16,505

 
29,882

Less: net income (loss) attributable to non-controlling interests - TFP

 
108

 

 
5,500

Less: net income (loss) attributable to non-controlling interests - Other
458

 
(58
)
 
834

 
(4
)
Net income (loss) attributable to Common Stockholders
$
11,746

 
$
826

 
$
15,671

 
$
24,386

 

 

 
 
 
 
Net income (loss) per Common Share:

 

 
 
 
 
Basic, continuing operations, net
$
0.33

 
$
0.02

 
$
0.44

 
$
(0.11
)
Basic, discontinued operations, net

 

 

 
0.84

Basic earnings per share
$
0.33

 
$
0.02

 
$
0.44

 
$
0.73

 

 

 
 
 
 
Diluted, continuing operations, net
0.32

 
0.02

 
0.43

 
(0.11
)
Diluted, discontinued operations, net

 

 

 
0.84

Diluted earnings per share
$
0.32

 
$
0.02

 
$
0.43

 
$
0.73

 

 

 
 
 
 
Weighted average number of Common Shares:
 
 
 
 
 
 
 
Basic
34,527,230

 
36,593,154

 
34,599,739

 
33,245,921

Diluted
34,527,230

 
37,386,319

 
34,599,739

 
33,245,921

 
 
 
 
 
 
 
 
Dividends declared per Common Share
$
0.040

 
$
0.035

 
$
0.080

 
$
0.070



Page 6



Tiptree Inc.
Non-GAAP Reconciliations (Unaudited)

Non-GAAP Financial Measures — Adjusted EBITDA and Operating EBITDA

The Company defines Adjusted EBITDA as GAAP net income of the Company adjusted to add (i) corporate interest expense, consolidated income taxes and consolidated depreciation and amortization expense, (ii) adjust for the effect of purchase accounting, (iii) adjust for non-cash fair value adjustments, and (iv) any significant non-recurring expenses. Operating EBITDA represents Adjusted EBITDA plus stock based compensation expense, less realized and unrealized gains and losses and less third party non-controlling interests. Operating EBITDA and Adjusted EBITDA are not measurements of financial performance or liquidity under GAAP and should not be considered as an alternative or substitute for GAAP net income.
($ in millions)
Three Months Ended  
 June 30,
 
Six Months Ended 
 June 30,

2019
 
2018
 
2019
 
2018
Net income (loss) attributable to Common Stockholders
$
11.8

 
$
0.8

 
$
15.7

 
$
24.4

Add: net (loss) income attributable to noncontrolling interests
0.4

 
0.1

 
0.8

 
5.5

Less: net income from discontinued operations

 

 

 
34.5

Income (loss) from continuing operations
$
12.2

 
$
0.9

 
$
16.5

 
$
(4.6
)
Corporate Debt related interest expense(1)
4.9

 
4.6

 
9.9

 
8.4

Consolidated income tax expense (benefit)
3.5

 
0.7

 
4.4

 
(0.9
)
Depreciation and amortization expense(2)
3.1

 
2.7

 
6.1

 
5.5

Non-cash fair value adjustments(3)
(0.8
)
 

 
(1.4
)
 
0.1

Non-recurring expenses(4)

 
1.2

 
2.0

 
0.9

Adjusted EBITDA from continuing operations
$
22.9

 
$
10.1

 
$
37.5

 
$
9.4

Add: Stock-based compensation expense
1.6

 
1.1

 
3.0

 
2.3

Add: Vessel depreciation, net of capital expenditures
0.6

 

 
1.2

 

Less: Realized and unrealized gain (loss)(5)
12.4

 
(3.8
)
 
16.4

 
(11.5
)
Less: Third party non-controlling interests(6)

 

 

 
(0.1
)
Operating EBITDA from continuing operations
$
12.7

 
$
15.0

 
$
25.3

 
$
23.3



 

 

 

Income (loss) from discontinued operations
$

 
$

 
$

 
$
34.5

Consolidated income tax expense (benefit)

 

 

 
12.3

Non-cash fair value adjustments (3)

 

 

 
(40.7
)
Adjusted EBITDA from discontinued operations
$

 
$

 
$

 
$
6.1

Less: Realized and unrealized gain (loss) (5)

 

 

 
5.5

Operating EBITDA from discontinued operations
$

 
$

 
$

 
$
0.6

Total Adjusted EBITDA
$
22.9

 
$
10.1

 
$
37.5

 
$
15.5

Total Operating EBITDA
$
12.7

 
$
15.0

 
$
25.3

 
$
23.9

_______________________________
(1)
Corporate Debt interest expense includes Secured corporate credit agreements, junior subordinated notes and preferred trust securities. Interest expense associated with asset-specific debt in specialty insurance and asset management, mortgage and other operations is not added-back for Adjusted EBITDA and Operating EBITDA.
(2)
Represents total depreciation and amortization expense less purchase accounting amortization related adjustments at the Insurance Company. Following the purchase accounting adjustments, current period expenses associated with deferred costs were more favorably stated and current period income associated with deferred revenues were less favorably stated. Thus, the purchase accounting effect related to our Insurance company increased EBITDA above what the historical basis of accounting would have generated.
(3)
For our specialty insurance operations, depreciation and amortization on senior living real estate that is within net investment income is added back to Adjusted EBITDA. For Care (Discontinued Operations), the reduction in EBITDA is related to accumulated depreciation and amortization, and certain operating expenses, which were previously included in Adjusted EBITDA in prior periods.
(4)
Acquisition, start-up and disposition costs including debt extinguishment, legal, taxes, banker fees and other costs. In 2018, includes payments pursuant to a separation agreement, dated November 10, 2015.
(5)
Adjustment excludes Mortgage realized and unrealized gains and losses - Performing and NPLs as those are recurring in nature and align with those business models.
(6)
Removes the Operating EBITDA associated with third party non-controlling interests. Does not remove the non-controlling interests related to employee based shares.


Page 7



Non-GAAP Financial Measures — Adjusted EBITDA and Operating EBITDA

The tables below present Adjusted EBITDA and Operating EBITDA by business component.
 
Three Months Ended June 30, 2019
($ in millions)
Specialty Insurance
 
Tiptree Capital (1)
 
Corporate Expenses
 
Total
Pre-tax income/(loss) from continuing ops
$
12.0

 
$
11.7

 
$
(7.9
)
 
$
15.8

Adjustments:
 
 
 
 
 
 
 
Corporate Debt related interest expense(2)
3.3

 

 
1.6

 
4.9

Depreciation and amortization expenses(3)
2.1

 
0.8

 
0.1

 
3.0

Non-cash fair value adjustments(4)

 
(0.8
)
 

 
(0.8
)
Non-recurring expenses(5)
0.1

 
0.2

 
(0.3
)
 

Adjusted EBITDA
$
17.5

 
$
11.9

 
$
(6.5
)
 
$
22.9

Add: Stock-based compensation expense
0.7

 
0.1

 
0.8

 
1.6

Add: Vessel depreciation, net of capital expenditures

 
0.6

 

 
0.6

Less: Realized and unrealized gain (loss)(6)
3.4

 
9.0

 

 
12.4

Operating EBITDA
$
14.8

 
$
3.6

 
$
(5.7
)
 
$
12.7


Six Months Ended June 30, 2019
($ in millions)
Specialty Insurance
 
Tiptree Capital (1)
 
Corporate Expenses
 
Total
Pre-tax income/(loss) from continuing ops
$
20.1

 
$
17.6

 
$
(16.8
)
 
$
20.9

Adjustments:
 
 
 
 
 
 
 
Corporate Debt related interest expense(2)
6.7

 

 
3.2

 
9.9

Depreciation and amortization expenses(3)
4.3

 
1.6

 
0.2

 
6.1

Non-cash fair value adjustments(4)

 
(1.4
)
 

 
(1.4
)
Non-recurring expenses(5)
1.4

 
0.2

 
0.4

 
2.0

Adjusted EBITDA
$
32.5

 
$
18.0

 
$
(13.0
)
 
$
37.5

Add: Stock-based compensation expense
1.3

 
0.2

 
1.5

 
3.0

Add: Vessel depreciation, net of capital expenditures

 
1.2

 

 
1.2

Less: Realized and unrealized gain (loss)(6)
5.3

 
11.1

 

 
16.4

Operating EBITDA
$
28.5

 
$
8.3

 
$
(11.5
)
 
$
25.3

 
Three Months Ended June 30, 2018
($ in millions)
Specialty Insurance
 
Tiptree Capital (1)
 
Corporate Expenses
 
Total
Pre-tax income/(loss) from continuing ops
$
8.8

 
$
(0.5
)
 
$
(6.7
)
 
$
1.6

Adjustments:
 
 
 
 
 
 
 
Corporate Debt related interest expense(2)
3.4

 

 
1.2

 
4.6

Depreciation and amortization expenses(3)
2.5

 
0.2

 

 
2.7

Non-cash fair value adjustments(4)
(0.1
)
 
0.1

 

 

Non-recurring expenses(5)
1.1

 
0.1

 

 
1.2

Adjusted EBITDA
$
15.7

 
$
(0.1
)
 
$
(5.5
)
 
$
10.1

Add: Stock-based compensation expense
0.6

 
$
(0.2
)
 
0.7

 
1.1

Less: Realized and unrealized gain (loss)(6)
0.1

 
(3.9
)
 

 
(3.8
)
Operating EBITDA
$
16.2

 
$
3.6

 
$
(4.8
)
 
$
15.0


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Six Months Ended June 30, 2018
($ in millions)
Specialty Insurance
 
Tiptree Capital (1)
 
Corporate Expenses
 
Total
Pre-tax income/(loss) from continuing ops
$
10.1

 
$
(2.2
)
 
$
(13.4
)
 
$
(5.5
)
Pre-tax income/(loss) from discontinued ops

 
46.8

 

 
46.8

Adjustments:
 
 
 
 
 
 
 
Corporate Debt related interest expense(2)
6.6

 

 
1.8

 
8.4

Depreciation and amortization expenses(3)
5.0

 
0.4

 
0.1

 
5.5

Non-cash fair value adjustments(4)

 
(40.6
)
 

 
(40.6
)
Non-recurring expenses(5)
2.2

 
1.0

 
(2.3
)
 
0.9

Adjusted EBITDA
$
23.9

 
$
5.4

 
$
(13.8
)
 
$
15.5

Add: Stock-based compensation expense
1.2

 
$
(0.2
)
 
1.3

 
2.3

Less: Realized and unrealized gain (loss)(6)
(4.4
)
 
(1.6
)
 

 
(6.0
)
Less: Third party non-controlling interests(7)

 
(0.1
)
 

 
(0.1
)
Operating EBITDA
$
29.5

 
$
6.9

 
$
(12.5
)
 
$
23.9

_______________________________
The footnotes below correspond to the tables above, under “—Adjusted EBITDA and Operating EBITDA - Non-GAAP”
(1)
Includes discontinued operations related to Care. For more information, see “Note—(3) Dispositions, Assets Held for Sale & Discontinued Operations” in our Form 10-Q for the quarter ended June 30, 2019.
(2)
Corporate Debt interest expense includes Secured corporate credit agreements, junior subordinated notes and preferred trust securities. Interest expense associated with asset-specific debt in specialty insurance and asset management, mortgage and other operations is not added-back for Adjusted EBITDA and Operating EBITDA.
(3)
Represents total depreciation and amortization expense less purchase accounting amortization related adjustments at the Insurance Company. Following the purchase accounting adjustments, current period expenses associated with deferred costs were more favorably stated and current period income associated with deferred revenues were less favorably stated. Thus, the purchase accounting effect related to our Insurance company increased EBITDA above what the historical basis of accounting would have generated.
(4)
For our specialty insurance operations, depreciation and amortization on senior living real estate that is within net investment income is added back to Adjusted EBITDA. For Care (Discontinued Operations), the reduction in EBITDA is related to accumulated depreciation and amortization, and certain operating expenses, which were previously included in Adjusted EBITDA in prior periods.
(5)
Acquisition, start-up and disposition costs including debt extinguishment, legal, taxes, banker fees and other costs. In 2018, includes payments pursuant to a separation agreement, dated November 10, 2015.
(6)
Adjustment excludes Mortgage realized and unrealized gains and losses - Performing and NPLs as those are recurring in nature and align with those business models.
(7)
Removes the Operating EBITDA associated with third party non-controlling interests. Does not remove the non-controlling interests related to employee based shares.

Non-GAAP Financial Measures — Book value per share

Management believes the use of this financial measure provides supplemental information useful to investors as book value is frequently used by the financial community to analyze company growth on a relative per share basis. The following table provides a reconciliation between total stockholders’ equity and total shares outstanding, net of treasury shares.
 ($ in millions, except per share information)
As of June 30,

2019

2018
Total stockholders’ equity
$
407.1

 
$
400.8

Less non-controlling interest - other
11.0

 
7.2

Total stockholders’ equity, net of non-controlling interests - other
$
396.1

 
$
393.6

Total Common shares outstanding
34.5

 
36.6

Book value per share(1)
$
11.47

 
$
10.74

(1) For periods prior to April 10, 2018, book value per share assumes full exchange of the limited partners units of TFP for Common Stock.


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