EX-99.2
3
exhibit992-proformaconsoli.htm
EXHIBIT 99.2
Exhibit
Exhibit 99.2
Assurant, Inc.
Pro Forma Consolidated Statement of Operations
Year Ended December 31, 2015
As Reported
Pro Forma Adjustment (1)
Note
Pro Forma
(in thousands except number of shares and per share amounts)
(Unaudited)
Revenues
Net earned premiums
$
8,350,997
$
(1,066,754
)
$
7,284,243
Net investment income
626,217
(110,998
)
515,219
Net realized gains on investments, excluding other-than-temporary
impairment losses
36,850
-
36,850
Total other-than-temporary impairment losses
(7,212
)
-
(7,212
)
Portion of net loss recognized in other comprehensive income,
before taxes
2,188
-
2,188
Net other-than-temporary impairment losses recognized in earnings
(5,024
)
-
(5,024
)
Amortization of deferred gain on disposal of business
12,988
392,000
(2)
404,988
Fees and other income
1,303,466
(25,006
)
1,278,460
Total revenues
10,325,494
(810,758
)
9,514,736
Benefits, losses and expenses
Policyholder benefits
4,742,535
(730,192
)
4,012,343
Amortization of deferred acquisition costs and value of business
acquired
1,402,573
(32,836
)
1,369,737
Underwriting, general and administrative expenses
3,924,089
(371,728
)
(3)
3,552,361
Interest expense
55,116
-
55,116
Total benefits, losses and expenses
10,124,313
(1,134,756
)
8,989,557
Income before provision for income taxes
201,181
323,998
525,179
Provision for income taxes
59,626
112,745
(2)(3)
172,371
Net income
$
141,555
$
211,253
$
352,808
Earnings Per Share
Basic
$
2.08
$
5.18
Diluted
$
2.05
$
5.11
Dividends per share
$
1.37
$
1.37
Share Data
Weighted average shares outstanding used in basic per share
calculations
68,163,825
68,163,825
Plus: Dilutive securities
853,384
853,384
Weighted average shares used in diluted per share calculations
69,017,209
69,017,209
See Explanatory Notes to Pro Forma Consolidated Statement of Operations
Assurant, Inc.
Explanatory Notes to Pro Forma Consolidated Statement of Operations
December 31, 2015
(dollar amounts in thousands, unless otherwise stated)
(Unaudited)
(1) These pro forma adjustments reflect the elimination of revenues and benefits, losses and expenses of the business sold
assuming the transaction occurred on January 1, 2015. See Explanatory Notes to the Consolidated Pro Forma Balance
Sheet for information related to the form of the sale transaction and the estimated gain on the sale transaction.
(2) This pro forma adjustment reflects the estimate of a full year amortization of the deferred gain on disposal of business.
The deferred gain on disposal of business is subject to change pending final determination of the net assets of the
business and other adjustments as shown in the Consolidated Pro Forma Balance Sheet and changes to information used
to determine the amortization pattern.
(3) This pro forma adjustment includes the removal of the direct incremental costs specific to the disposal.
Assurant, Inc.
Pro Forma Consolidated Balance Sheet
At December 31, 2015
As Reported
Pro Forma Adjustment
Note
Pro Forma
(in thousands except number of shares and per share amounts)
(Unaudited)
Assets
Investments:
Fixed maturity securities available for sale, at fair value (amortized
cost - $9,470,795 as reported, $8,217,916 pro forma)
$
10,215,328
$
(1,396,296
)
$
8,819,032
Equity securities available for sale, at fair value (cost - $450,563 as
reported, $393,940 pro forma)
500,057
(59,178
)
440,879
Commercial mortgage loans on real estate, at amortized cost
1,151,256
(269,473
)
881,783
Policy loans
43,858
(1,685
)
42,173
Short-term investments
508,950
(1,109
)
507,841
Other investments
575,323
34,558
609,881
Total investments
12,994,772
(1,693,183
)
(1)
11,301,589
Cash and cash equivalents
1,288,305
930,411
(9)
2,218,716
Premiums and accounts receivable, net
1,260,717
(17,779
)
(3)
1,242,938
Reinsurance recoverables
7,470,403
1,146,727
(2)
8,617,130
Accrued investment income
129,743
(19,309
)
(1)
110,434
Deferred acquisition costs
3,150,934
(33,474
)
(4)
3,117,460
Property and equipment, at cost less accumulated depreciation
298,414
-
298,414
Income tax receivable
24,176
-
24,176
Goodwill
833,512
-
833,512
Value of business acquired
41,154
-
41,154
Other intangible assets, net
277,163
(12,972
)
(4)
264,191
Other assets
475,731
101,649
(6)(9)
577,380
Assets held in separate accounts
1,798,104
-
1,798,104
Total assets
$
30,043,128
$
402,070
$
30,445,198
Liabilities
Future policy benefits and expenses
$
9,466,694
$
(1,187
)
(3)
$
9,465,507
Unearned premiums
6,423,720
(90
)
(4)
6,423,630
Claims and benefits payable
3,896,719
(260,332
)
(3)
3,636,387
Commissions payable
393,260
(19,918
)
(4)
373,342
Reinsurance balances payable
132,728
-
132,728
Funds held under reinsurance
94,417
-
94,417
Deferred gain on disposal of businesses
92,327
529,724
(9)
622,051
Accounts payable and other liabilities
2,049,810
(75,235
)
(5)(6)(7)
1,974,575
Income taxes payable
-
239,686
(9)
239,686
Debt
1,171,382
-
1,171,382
Liabilities related to separate accounts
1,798,104
-
1,798,104
Total liabilities
25,519,161
412,648
25,931,809
Stockholders' Equity
Common stock
1,497
-
1,497
Additional paid-in capital
3,148,409
-
3,148,409
Retained earnings
4,856,674
84,304
(9)
4,940,978
Accumulated other comprehensive income
118,549
(94,882
)
(8)
23,667
Treasury stock, at cost
(3,601,162
)
-
(3,601,162
)
Total stockholders' equity
4,523,967
(10,578
)
4,513,389
Total liabilities and stockholders' equity
$
30,043,128
$
402,070
$
30,445,198
See Explanatory Notes to Pro Forma Consolidated Balance Sheet
Assurant, Inc.
Explanatory Notes to Pro Forma Consolidated Balance Sheet
December 31, 2015
(dollar amounts in thousands, unless otherwise stated)
(Unaudited)
(1) These pro forma adjustments reflect the transfer of invested assets and related accrued investment income to the buyer
and the reclassification of invested assets related to a modified coinsurance arrangement.
(2) Since this sale transaction is primarily in the form of reinsurance arrangements, the Company retains substantially all of
the policyholder liabilities of the sold business but records a reinsurance recoverable from buyer at closing.
(3) These pro forma adjustments reflect the novation of certain assumed reinsurance client contracts, therefore the insurance
assets and liabilities of the novated business are removed.
(4) These pro forma adjustments reflect removal and transfers of insurance contract-related assets and liabilities as part of the
reinsurance transaction and other assets sold.
(5) The pro forma adjustment to the deferred tax liability primarily reflects the elimination of the deferred tax liability
associated with unrealized appreciation on investments.
(6) Includes the disposition of the assets and liabilities of the legal entities and other assets previously presented as assets and
liabilities held for sale.
(7) Includes accruals for estimated transaction costs directly attributable to the sale of the business.
(8) Reflects the elimination of unrealized appreciation on investments transferred to the buyer.
(9) Using December 31, 2015 data, the following table reflects the estimated pre-tax and after-tax gain to be deferred and the
realized gain recognized at the time of closing the sale.
Adjusted purchase price, primarily comprised of a ceding commission
$
930,411
Adjusted book value of assets in excess of liabilities
(223,314
)
Removal of deferred acquisition cost
(33,474
)
Realized gain on disposal of business before transaction costs, pre-tax
(143,899
)
Deferred gain on disposal of business, pre-tax
$
529,724
Deferred gain on disposal of business, after-tax
$
344,321
Realized gain on disposal of business before transaction costs, pre-tax
$
143,899
Transaction costs accrued ($5,800 previously expensed)
(14,200
)
Realized gain on disposal of business, pre-tax
$
129,699
Realized gain on disposal of business, after-tax
$
84,304
The actual deferred gain and realized gain to be reported for the first quarter of 2016 is subject to change pending final determination of the net assets of the business, transaction costs and other adjustments.

EX - 99 . 2 3 exhibit992 - proformaconsoli . htm EXHIBIT 99 . 2 Exhibit Exhibit 99 . 2 Assurant , Inc . Pro Forma Consolidated Statement of Operations Year Ended December 31 , 2015 As Reported Pro Forma Adjustment ( 1 ) Note Pro Forma ( in thousands except number of shares and per share amounts ) ( Unaudited ) Revenues Net earned premiums $ 8,350,997 $ ( 1,066,754 ) $ 7,284,243 Net investment income 626,217 ( 110,998 ) 515,219 Net realized gains on investments , excluding other - than - temporary impairment losses 36,850 - 36,850 Total other - than - temporary impairment losses ( 7,212 ) - ( 7,212 ) Portion of net loss recognized in other comprehensive income , before taxes 2,188 - 2,188 Net other - than - temporary impairment losses recognized in earnings ( 5,024 ) - ( 5,024 ) Amortization of deferred gain on disposal of business 12,988 392,000 ( 2 ) 404,988 Fees and other income 1,303,466 ( 25,006 ) 1,278,460 Total revenues 10,325,494 ( 810,758 ) 9,514,736 Benefits , losses and expenses Policyholder benefits 4,742,535 ( 730,192 ) 4,012,343 Amortization of deferred acquisition costs and value of business acquired 1,402,573 ( 32,836 ) 1,369,737 Underwriting , general and administrative expenses 3,924,089 ( 371,728 ) ( 3 ) 3,552,361 Interest expense 55,116 - 55,116 Total benefits , losses and expenses 10,124,313 ( 1,134,756 ) 8,989,557 Income before provision for income taxes 201,181 323,998 525,179 Provision for income taxes 59,626 112,745 ( 2 ) ( 3 ) 172,371 Net income $ 141,555 $ 211,253 $ 352,808 Earnings Per Share Basic $ 2 . 08 $ 5 . 18 Diluted $ 2 . 05 $ 5 . 11 Dividends per share $ 1 . 37 $ 1 . 37 Share Data Weighted average shares outstanding used in basic per share calculations 68,163,825 68,163,825 Plus : Dilutive securities 853,384 853,384 Weighted average shares used in diluted per share calculations 69,017,209 69,017,209 See Explanatory Notes to Pro Forma Consolidated Statement of Operations Assurant , Inc . Explanatory Notes to Pro Forma Consolidated Statement of Operations December 31 , 2015 ( dollar amounts in thousands , unless otherwise stated ) ( Unaudited ) ( 1 ) These pro forma adjustments reflect the elimination of revenues and benefits , losses and expenses of the business sold assuming the transaction occurred on January 1 , 2015 . See Explanatory Notes to the Consolidated Pro Forma Balance Sheet for information related to the form of the sale transaction and the estimated gain on the sale transaction . ( 2 ) This pro forma adjustment reflects the estimate of a full year amortization of the deferred gain on disposal of business . The deferred gain on disposal of business is subject to change pending final determination of the net assets of the business and other adjustments as shown in the Consolidated Pro Forma Balance Sheet and changes to information used to determine the amortization pattern . ( 3 ) This pro forma adjustment includes the removal of the direct incremental costs specific to the disposal . Assurant , Inc . Pro Forma Consolidated Balance Sheet At December 31 , 2015 As Reported Pro Forma Adjustment Note Pro Forma ( in thousands except number of shares and per share amounts ) ( Unaudited ) Assets Investments : Fixed maturity securities available for sale , at fair value ( amortized cost - $ 9,470,795 as reported , $ 8,217,916 pro forma ) $ 10,215,328 $ ( 1,396,296 ) $ 8,819,032 Equity securities available for sale , at fair value ( cost - $ 450,563 as reported , $ 393,940 pro forma ) 500,057 ( 59,178 ) 440,879 Commercial mortgage loans on real estate , at amortized cost 1,151,256 ( 269,473 ) 881,783 Policy loans 43,858 ( 1,685 ) 42,173 Short - term investments 508,950 ( 1,109 ) 507,841 Other investments 575,323 34,558 609,881 Total investments 12,994,772 ( 1,693,183 ) ( 1 ) 11,301,589 Cash and cash equivalents 1,288,305 930,411 ( 9 ) 2,218,716 Premiums and accounts receivable , net 1,260,717 ( 17,779 ) ( 3 ) 1,242,938 Reinsurance recoverables 7,470,403 1,146,727 ( 2 ) 8,617,130 Accrued investment income 129,743 ( 19,309 ) ( 1 ) 110,434 Deferred acquisition costs 3,150,934 ( 33,474 ) ( 4 ) 3,117,460 Property and equipment , at cost less accumulated depreciation 298,414 - 298,414 Income tax receivable 24,176 - 24,176 Goodwill 833,512 - 833,512 Value of business acquired 41,154 - 41,154 Other intangible assets , net 277,163 ( 12,972 ) ( 4 ) 264,191 Other assets 475,731 101,649 ( 6 ) ( 9 ) 577,380 Assets held in separate accounts 1,798,104 - 1,798,104 Total assets $ 30,043,128 $ 402,070 $ 30,445,198 Liabilities Future policy benefits and expenses $ 9,466,694 $ ( 1,187 ) ( 3 ) $ 9,465,507 Unearned premiums 6,423,720 ( 90 ) ( 4 ) 6,423,630 Claims and benefits payable 3,896,719 ( 260,332 ) ( 3 ) 3,636,387 Commissions payable 393,260 ( 19,918 ) ( 4 ) 373,342 Reinsurance balances payable 132,728 - 132,728 Funds held under reinsurance 94,417 - 94,417 Deferred gain on disposal of businesses 92,327 529,724 ( 9 ) 622,051 Accounts payable and other liabilities 2,049,810 ( 75,235 ) ( 5 ) ( 6 ) ( 7 ) 1,974,575 Income taxes payable - 239,686 ( 9 ) 239,686 Debt 1,171,382 - 1,171,382 Liabilities related to separate accounts 1,798,104 - 1,798,104 Total liabilities 25,519,161 412,648 25,931,809 Stockholders ' Equity Common stock 1,497 - 1,497 Additional paid - in capital 3,148,409 - 3,148,409 Retained earnings 4,856,674 84,304 ( 9 ) 4,940,978 Accumulated other comprehensive income 118,549 ( 94,882 ) ( 8 ) 23,667 Treasury stock , at cost ( 3,601,162 ) - ( 3,601,162 ) Total stockholders ' equity 4,523,967 ( 10,578 ) 4,513,389 Total liabilities and stockholders ' equity $ 30,043,128 $ 402,070 $ 30,445,198 See Explanatory Notes to Pro Forma Consolidated Balance Sheet Assurant , Inc . Explanatory Notes to Pro Forma Consolidated Balance Sheet December 31 , 2015 ( dollar amounts in thousands , unless otherwise stated ) ( Unaudited ) ( 1 ) These pro forma adjustments reflect the transfer of invested assets and related accrued investment income to the buyer and the reclassification of invested assets related to a modified coinsurance arrangement . ( 2 ) Since this sale transaction is primarily in the form of reinsurance arrangements , the Company retains substantially all of the policyholder liabilities of the sold business but records a reinsurance recoverable from buyer at closing . ( 3 ) These pro forma adjustments reflect the novation of certain assumed reinsurance client contracts , therefore the insurance assets and liabilities of the novated business are removed . ( 4 ) These pro forma adjustments reflect removal and transfers of insurance contract - related assets and liabilities as part of the reinsurance transaction and other assets sold . ( 5 ) The pro forma adjustment to the deferred tax liability primarily reflects the elimination of the deferred tax liability associated with unrealized appreciation on investments . ( 6 ) Includes the disposition of the assets and liabilities of the legal entities and other assets previously presented as assets and liabilities held for sale . ( 7 ) Includes accruals for estimated transaction costs directly attributable to the sale of the business . ( 8 ) Reflects the elimination of unrealized appreciation on investments transferred to the buyer . ( 9 ) Using December 31 , 2015 data , the following table reflects the estimated pre - tax and after - tax gain to be deferred and the realized gain recognized at the time of closing the sale . Adjusted purchase price , primarily comprised of a ceding commission $ 930,411 Adjusted book value of assets in excess of liabilities ( 223,314 ) Removal of deferred acquisition cost ( 33,474 ) Realized gain on disposal of business before transaction costs , pre - tax ( 143,899 ) Deferred gain on disposal of business , pre - tax $ 529,724 Deferred gain on disposal of business , after - tax $ 344,321 Realized gain on disposal of business before transaction costs , pre - tax $ 143,899 Transaction costs accrued ( $ 5,800 previously expensed ) ( 14,200 ) Realized gain on disposal of business , pre - tax $ 129,699 Realized gain on disposal of business , after - tax $ 84,304 The actual deferred gain and realized gain to be reported for the first quarter of 2016 is subject to change pending final determination of the net assets of the business , transaction costs and other adjustments .
O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O