Non-GAAP Financial Measures
1. Assurant uses Adjusted EBITDA, excluding reportable catastrophes (which represents individual catastrophic events that generate losses in excess of $5.0 million, pre-tax, net of reinsurance and client profit sharing adjustments and including reinstatement and other premiums), as an important measure of the company’s operating performance. Assurant defines Adjusted EBITDA as net income (or net income from continuing operations), excluding net realized losses (gains) on investments and fair value changes to equity securities, COVID-19 direct and incremental expenses, (gain) loss on extinguishment of debt, non-core operations, interest expense, provision (benefit) for income taxes, depreciation expense, amortization of purchased intangible assets, restructuring costs related to strategic exit activities, as well as other highly variable or unusual items. The company believes this metric provides investors with an important measure of the company's operating performance because it excludes items that do not represent the ongoing operations of the company, and therefore (i) enhances management’s and investors’ ability to analyze the ongoing operations of its businesses and (ii) facilitates comparisons of its operating performance over multiple periods, as the amortization expense associated with purchased intangible assets may fluctuate from period to period based on the timing, size, nature and number of acquisitions. Although the company excludes amortization of purchased intangible assets from Adjusted EBITDA, revenue generated from such intangible assets is included within the revenue in determining Adjusted EBITDA. It also excludes reportable catastrophes, which can be volatile. The comparable GAAP measure is net income (or net income from continuing operations).
| (Unaudited) | Twelve Months | ||
|---|---|---|---|
| ($ in millions) | 2023 | 2022 | 2021 |
| GAAP net income from continuing operations | 2023: $642.5 | 2022: $276.6 | 2021: $602.9 |
| Less: | |||
| Interest expense | 2023: 108.0 | 2022: 108.3 | 2021: 111.8 |
| Provision for income taxes | 2023: 164.3 | 2022: 73.3 | 2021: 168.4 |
| Depreciation expense | 2023: 109.3 | 2022: 86.3 | 2021: 73.8 |
| Amortization of purchased intangible assets | 2023: 77.9 | 2022: 69.7 | 2021: 65.8 |
| Adjustments, pre-tax: | |||
| Net realized losses (gains) on investments and fair value changes to equity securities | 2023: 68.7 | 2022: 179.7 | 2021: (128.2) |
| Non-core operations | 2023: 50.4 | 2022: 79.5 | 2021: 14.4 |
| Restructuring costs | 2023: 34.3 | 2022: 53.1 | 2021: 11.8 |
| COVID-19 direct and incremental expenses | 2023: — | 2022: 4.7 | 2021: 10.0 |
| (Gain) loss on extinguishment of debt | 2023: (0.1) | 2022: 0.9 | 2021: 20.7 |
| Other adjustments5 | 2023: 2.2 | 2022: 24.1 | 2021: 14.5 |
| Adjusted EBITDA | 2023: 1,257.5 | 2022: 956.2 | 2021: 965.9 |
| Reportable catastrophes | 2023: 111.8 | 2022: 172.1 | 2021: 155.6 |
| Adjusted EBITDA, excluding reportable catastrophes | 2023: $1,369.3 | 2022: $1,128.3 | 2021: $1,121.5 |
2. 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 (or 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, (gain) loss on extinguishment of debt, non-core operations, restructuring costs related to strategic exit activities, as well as other highly variable or unusual items, plus any dilutive preferred stock dividends, 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. It also excludes reportable catastrophes, which can be volatile. The comparable GAAP measure is net income (or net income from continuing operations) per diluted share, defined as net income (or net income from continuing operations) plus any dilutive preferred stock dividends, divided by the weighted average diluted shares outstanding.
| (Unaudited) | Twelve Months | ||
|---|---|---|---|
| 2023 | 2022 | 2021 | |
| GAAP net income from continuing operations per diluted share6 | 2023: $11.95 | 2022: $5.05 | 2021: $10.03 |
| Adjustments per diluted share, pre-tax: | |||
| Net realized losses (gains) on investments and fair value changes to equity securities | 2023: 1.28 | 2022: 3.28 | 2021: (2.14) |
| Non-core operations | 2023: 0.94 | 2022: 1.45 | 2021: 0.23 |
| Restructuring costs | 2023: 0.64 | 2022: 0.97 | 2021: 0.22 |
| Amortization of purchased intangible assets | 2023: 1.45 | 2022: 1.27 | 2021: 1.10 |
| COVID-19 direct and incremental expenses | 2023: — | 2022: 0.08 | 2021: 0.17 |
| Loss on extinguishment of debt | 2023: — | 2022: 0.02 | 2021: 0.34 |
| Other adjustments7 | 2023: 0.03 | 2022: 0.45 | 2021: 0.31 |
| Benefit for income taxes | 2023: (0.80) | 2022: (1.44) | 2021: (0.02) |
| Adjusted earnings per diluted share | 2023: 15.49 | 2022: 11.13 | 2021: 10.24 |
| Reportable catastrophes, pre-tax | 2023: 2.08 | 2022: 3.14 | 2021: 2.59 |
| Tax impact of reportable catastrophes | 2023: (0.44) | 2022: (0.66) | 2021: (0.55) |
| Adjusted earnings, excluding reportable catastrophes, per diluted share | 2023: $17.13 | 2022: $13.61 | 2021: $12.28 |
- 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 https://ir.assurant.com/investor-relations/default.aspx.
- Information on the share counts used in the per share calculations are included in the Financial Supplement located on Assurant’s Investor Relations website https://ir.assurant.com/investor-relations/default.aspx
- 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 https://ir.assurant.com/investor-relations/default.aspx
