Non-GAAP
Financial Measures
1. Adjusted EBITDA, excluding reportable catastrophes: Assurant uses adjusted EBITDA, excluding reportable catastrophes (which represents individual catastrophic events that generate losses in excess of $5.0 million, pre-tax, net of reinsurance and client profit sharing adjustments and including reinstatement and other premiums), as an important measure of the company’s operating performance. Assurant defines adjusted EBITDA as net income from continuing operations, excluding net realized losses (gains) on investments and fair value changes to equity securities, COVID-19 direct and incremental expenses, loss on extinguishment of debt, non-core operations, net income (loss) attributable to non-controlling interests, interest expense, provision (benefit) for income taxes, depreciation expense, amortization of purchased intangible assets, restructuring costs related to strategic exit activities (outside of normal periodic restructuring and cost management activities), as well as other highly variable or unusual items. The company believes this metric provides investors with an important measure of the company’s operating performance because it excludes items that do not represent the ongoing operations of the company and, therefore, (i) enhances management’s and investors’ ability to analyze the ongoing operations of its businesses and (ii) facilitates comparisons of its operating performance over multiple periods, as the amortization expense associated with purchased intangible assets may fluctuate from period to period based on the timing, size, nature, and number of acquisitions. Although the company excludes amortization of purchased intangible assets from adjusted EBITDA, revenue generated from such intangible assets is included within the revenue in determining adjusted EBITDA. In addition, it also excludes reportable catastrophes, which can be volatile. The comparable GAAP measure is net income from continuing operations.
| ($ in millions) | 2022 | 2021 | 2020 |
|---|---|---|---|
| GAAP net income from continuing operations | 2022: $276.6 | 2021: $602.9 | 2020: $519.4 |
| Less: | |||
| Interest expense | 2022: 108.3 | 2021: 111.8 | 2020: 104.5 |
| Provision for income taxes | 2022: 73.3 | 2021: 168.4 | 2020: 58.7 |
| Depreciation expense | 2022: 86.3 | 2021: 73.8 | 2020: 56.1 |
| Amortization of purchased intangible assets | 2022: 69.7 | 2021: 65.8 | 2020: 52.7 |
| Adjustments, pre-tax: | |||
| Net realized losses (gains) on investments and fair value changes to equity securities | 2022: 179.7 | 2021: (128.2) | 2020: 8.2 |
| COVID-19 direct and incremental expenses | 2022: 4.7 | 2021: 10.0 | 2020: 25.2 |
| Loss on extinguishment of debt | 2022: 0.9 | 2021: 20.7 | 2020: — |
| Non-core operations | 2022: 79.5 | 2021: 14.4 | 2020: (7.4) |
| Restructuring costs | 2022: 53.1 | 2021: 11.8 | 2020: — |
| Other adjustments10 | 2022: 24.1 | 2021: 14.5 | 2020: 13.4 |
| Net income attributable to non-controlling interests | 2022: — | 2021: — | 2020: (1.2) |
| Adjusted EBITDA | 2022: 956.2 | 2021: 965.9 | 2020: 829.6 |
| Reportable catastrophes | 2022: 172.1 | 2021: 155.6 | 2020: 178.5 |
| Adjusted EBITDA, excluding reportable catastrophes | 2022: $1,128.3 | 2021: $1,121.5 | 2020: $1,008.1 |
2. Adjusted earnings, excluding reportable catastrophes, per diluted share: Assurant uses adjusted earnings, excluding reportable catastrophes (defined above), per diluted share as an important measure of the company’s stockholder value. Assurant defines adjusted earnings per diluted share as net income from continuing operations, excluding net realized losses (gains) on investments and fair value changes to equity securities, amortization of purchased intangible assets, COVID-19 direct and incremental expenses, loss on extinguishment of debt, non-core operations, net income (loss) attributable to non-controlling interests, restructuring costs related to strategic exit activities (outside of normal periodic restructuring and cost management activities), as well as other highly variable or unusual items, plus any dilutive preferred stock dividends, less net income from non-controlling interests, divided by the weighted average diluted shares outstanding. The company believes this metric provides investors with an important measure of stockholder value because it excludes items that do not represent the ongoing operations of the company, and therefore (i) enhances management’s and investors’ ability to analyze the ongoing operations of its businesses and (ii) facilitates comparisons of its operating performance over multiple periods, as the amortization expense associated with purchased intangible assets may fluctuate from period to period based on the timing, size, nature, and number of acquisitions. Although the company excludes amortization of purchased intangible assets from adjusted earnings, revenue generated from such intangible assets is included within the revenue in determining adjusted earnings. In addition, it also excludes reportable catastrophes, which can be volatile. The comparable GAAP measure is net income from continuing operations per diluted share, defined as net income from continuing operations plus any dilutive preferred stock dividends less net income from non-controlling interests, divided by the weighted average diluted shares outstanding.
| 2022 | 2021 | 2020 | |
|---|---|---|---|
| GAAP net income from continuing operations per diluted share11 | 2022: $5.05 | 2021: $10.03 | 2020: $8.21 |
| Adjustments, pre-tax: | |||
| Net realized losses (gains) on investments and fair value changes to equity securities | 2022: 3.28 | 2021: (2.14) | 2020: 0.14 |
| Amortization of purchased intangible assets | 2022: 1.27 | 2021: 1.10 | 2020: 0.83 |
| COVID-19 direct and incremental expenses | 2022: 0.08 | 2021: 0.17 | 2020: 0.42 |
| CARES Act tax benefit (after-tax) | 2022: — | 2021: — | 2020: (1.34) |
| Loss on extinguishment of debt | 2022: 0.02 | 2021: 0.34 | 2020: — |
| Non-core operations | 2022: 1.45 | 2021: 0.23 | 2020: (0.12) |
| Restructuring costs | 2022: 0.97 | 2021: 0.22 | 2020: — |
| Other adjustments10 | 2022: 0.45 | 2021: 0.31 | 2020: 0.31 |
| Benefit for income taxes | 2022: (1.44) | 2021: (0.02) | 2020: (0.19) |
| Adjusted earnings per diluted share | 2022: 11.13 | 2021: 10.24 | 2020: 8.26 |
| Reportable catastrophes, pre-tax | 2022: 3.14 | 2021: 2.59 | 2020: 2.83 |
| Tax impact of reportable catastrophes | 2022: (0.66) | 2021: (0.55) | 2020: (0.60) |
| Adjusted earnings, excluding reportable catastrophes, per diluted share | 2022: $13.61 | 2021: $12.28 | 2020: $10.49 |
3. Constant currency: Represents a non-GAAP financial measure. Excludes the impact of changes in foreign currency exchange rates used in the translation of the income statement because they can be volatile. These amounts are calculated by translating the comparable prior period results at the weighted average foreign currency exchange rates used in the current period, and it excludes the impact of foreign exchange transaction gains (losses) associated with the remeasurement of non-functional currencies. The company believes this information allows investors to identify the significance of changes in foreign currency exchange rates in period-to-period comparisons.
| 2022 | |
|---|---|
| Percentage change in GAAP net income from continuing operations, including FX impact | 2022: (54.1%) |
| Percentage change in adjusted EBITDA, including FX impact | 2022: (1.0%) |
| Percentage change in adjusted EBITDA, excluding reportable catastrophes: | |
| Including FX impact | 2022: 0.6% |
| FX impact | 2022: (2.4%) |
| Excluding FX impact | 2022: 3.0% |
| Percentage change in Global Lifestyle adjusted EBITDA: | |
| Including FX impact | 2022: 7.3% |
| FX impact | 2022: (3.8%) |
| Excluding FX impact | 2022: 11.1% |
| Percentage change in Connected Living adjusted EBITDA: | |
| Including FX impact | 2022: 8.9% |
| FX impact | 2022: (5.8%) |
| Excluding FX impact | 2022: 14.7% |
Footnotes
10 Additional details about the components of other adjustments and other key financial metrics are included in the Financial Supplement located on Assurant’s Investor Relations website: ir.assurant.com/investor-relations
11 Information on the share counts used in the per share calculations are included in the Financial Supplement located on Assurant’s Investor Relations website ir.assurant.com/investor-relations.
