EXHIBIT 99.1
[ASSURANT LOGO]
PRESS CONTACT: INVESTOR RELATIONS:
Drew Guthrie Melissa Kivett Larry Cains
Manager, Communications Vice President Senior Vice President
and Media Relations Investor Relations Investor Relations
Phone: 212-859-7002 Phone: 212-859-7029 Phone: 212-859-7045
Fax: 212-859-5893 Fax: 212-859-5893 Fax: 212-859-5893
drew.guthrie@assurant.com melissa.kivett@assurant.com larry.cains@assurant.com
FOR IMMEDIATE RELEASE
ASSURANT REPORTS 2004 NET INCOME OF $350.6 MILLION ($2.48 PER PRO FORMA SHARE),
NET OPERATING INCOME OF $345.0 MILLION ($2.44 PER PRO FORMA SHARE)
New York - February 15, 2005 - Assurant, Inc. ("Assurant") (NYSE: AIZ), a
premier provider of specialized insurance and insurance-related products and
services, today reported its results for the fourth quarter and the year ended
December 31, 2004.
J. Kerry Clayton, President and Chief Executive Officer, said: "One year after
our initial public offering, Assurant continues to increase shareholder value
and generate profitable growth through our leading specialty insurance
businesses. Our ability to grow net operating income, in spite of the very rare
occurrence of four significant hurricanes during the year, demonstrates the
inherent strength of our diversified platform."
FOURTH QUARTER RESULTS:
Net income in the fourth quarter of 2004 was $86.1 million, or $0.61 per pro
forma share (see footnote 1 at the end of this release), versus a fourth quarter
2003 net loss of $77.6 million, or $(0.55) per pro forma share. Pursuant to the
American Jobs Creation Act, Assurant in the fourth quarter of 2004 repatriated
$110 million of capital from its Puerto Rico affiliate, which resulted in an
additional tax charge, net of certain other tax adjustments, of $8.7 million.
The year-ago period included a one-time after tax interest premium of $133.8
million on the redemption of mandatorily redeemable preferred securities prior
to the initial public offering.
Net operating income (see footnote 2 at the end of this release) for the fourth
quarter of 2004 increased 15.6% to $86.5 million, or $0.62 per pro forma share,
compared to fourth quarter 2003 net operating income of $74.8 million, or $0.53
per pro forma share. Net operating income was reduced by the one time $8.7
million or $0.06 per share tax adjustment. Net operating income excludes capital
gains and losses, IPO-related expenses and interest premium on redemption of
mandatorily redeemable preferred securities.
Net earned premiums of $1.6 billion in the fourth quarter of 2004 are up
slightly from the same period in 2003.
Net investment income in the fourth quarter of 2004 increased to $163.3 million
from $150.7 million in the fourth quarter of 2003 primarily as a result of an
increase in invested assets. The yield on average invested assets and cash and
cash equivalents was 5.55% in the fourth quarter of 2004, compared to 5.47% in
the fourth quarter of 2003.
TWELVE-MONTH RESULTS:
Net income in 2004 grew 88.8% to $350.6 million, or $2.48 per pro forma share,
versus 2003 net income of $185.7 million or $1.31 per pro forma share. Excluding
the 2003 one-time interest premium paid of $133.8 million on the redemption of
preferred securities of subsidiary trusts prior to the initial public offering,
2004 net income grew 9.7%.
Net operating income for the twelve months of 2004 grew 4.8% to $345.0 million,
or $2.44 per pro forma share, compared to twelve months 2003 net operating
income of $329.2 million, or $2.31 per pro forma share. Net operating income
excludes capital gains, loss on disposal of business, IPO-related expenses and
interest premium on redemption of mandatorily redeemable preferred securities.
Net earned premiums in 2004 grew 5.3% to $6.5 billion from $6.2 billion in 2003,
driven primarily by premium growth in Assurant Health and Assurant Solutions.
Net investment income in the twelve months of 2004 increased to $634.7 million
from $607.3 million in the twelve months of 2003 as a result of an increase in
invested assets. The yield on average invested assets and cash and cash
equivalents was 5.46% for the twelve months of 2004, compared to 5.61% for the
twelve months of 2003.
Reconciliation of Net operating income to Net income
For the Three Months Ended For the Years Ended
-------------------------- ---------------------------
December 31, December 31, December 31, December 31,
2004 2003 2004 2003
(UNAUDITED)
(amounts in millions, net of tax)
Assurant Solutions $ 44.6 $ 33.1 $ 126.2 $ 133.2
Assurant Health 33.7 28.4 158.3 121.0
Assurant Employee Benefits 20.0 12.9 62.2 61.6
Assurant Preneed 8.7 8.2 34.2 36.0
Amortization of deferred gain on disposal of businesses 9.3 10.5 37.5 44.4
Interest expense and distributions on mandatorily
redeemable preferred securities (10.0) (17.1) (38.1) (74.2)
Corporate and other (19.8) (1.2) (35.3) 7.2
-------- -------- --------- ----------
Net operating income 86.5 74.8 345.0 329.2
Adjustments:
Net realized gains (losses) on investments 1.2 (8.4) 15.8 1.2
Loss on disposal of business - - (6.3) -
Expenses directly related to the initial and
secondary public offerings (1.6) (10.2) (3.9) (10.9)
Interest premiums on redemption of mandatorily
redeemable preferred securities - (133.8) - (133.8)
-------- -------- --------- ----------
Net income $ 86.1 $ (77.6) $ 350.6 $ 185.7
-------- -------- --------- ----------
ASSURANT SOLUTIONS
Assurant Solutions fourth quarter 2004 net operating income was $44.6 million,
up 34.7% from fourth quarter 2003 net operating income of $33.1 million. Net
operating income for the fourth quarter increased due to significantly reduced
loss experience in the specialty property business. Net operating income for the
twelve months in 2004 was $126.2 million, down 5.3% from $133.2 million in the
twelve months of 2003. Net operating income decreased due to the unprecedented
claims activity from four hurricanes during the third quarter of 2004. Total
pre-tax catastrophe losses, net of reinsurance recoveries, for 2004 were $93.1
million, compared with $29.7 million in 2003.
Assurant Solutions fourth quarter 2004 net earned premiums decreased 2.0% to
$612.2 million from $625.0 million in the same year-ago period. Net earned
premiums for the year grew 3.7% to $2.45 billion from $2.36 billion in 2003. The
change in net earned premiums was primarily due to overall growth in the
specialty property business, extended service contract business and
international businesses, offset somewhat by the runoff in domestic credit
insurance.
ASSURANT HEALTH
Assurant Health fourth quarter 2004 net operating income increased 18.7% to
$33.7 million from $28.4 million in the same period in 2003. Net operating
income for the twelve months of 2004 grew 30.8% to $158.3 million from $121.0
million in the twelve months of 2003. The increases in net operating income for
the fourth quarter and the twelve -month period of 2004 were primarily due to
individual medical premium growth, and a favorable combined ratio, offset
somewhat by expenses related to second-generation HSA product development and
pilot testing of direct-to-consumer marketing programs.
Assurant Health fourth quarter 2004 net earned premiums grew 4.5% to $557.8
million from $533.7 million in the same period in 2003. Net earned premiums in
2004 increased 11.1% to $2.2 billion from $2.0 billion in 2003. Net earned
premium growth is attributable to the individual medical insurance business,
including premium rate increases and the successful introduction of individual
medical insurance policies that included an HSA.
ASSURANT EMPLOYEE BENEFITS
Assurant Employee Benefits fourth quarter 2004 net operating income increased
54.3% to $20.0 million from net operating income of $12.9 million in the same
period of 2003. Net operating income for 2004 increased 1.0% to $62.2 million
from $61.6 million in 2003. Excluding a 2003 after tax reserve release of $11.5
million, net operating income for 2004 increased 24.2%. Net operating income for
the fourth quarter and twelve months of 2004 increased primarily due to
continued improvements in loss experience in disability insurance and increased
investment income.
Assurant Employee Benefits fourth quarter 2004 net earned premiums grew 2.3% to
$343.8 million from $336.1 million in the same period of 2003. Net earned
premiums in
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2004 grew 1.6% to $1.28 billion from $1.26 billion in 2003. Net earned premium
increases were primarily driven by higher disability premiums.
ASSURANT PRENEED
Assurant Preneed fourth quarter 2004 net operating income increased 6.6% to $8.7
million from net operating income of $8.2 million in the same period of 2003.
Net operating income for 2004 decreased 5.0% to $34.2 million from $36.0 million
in 2003. The decrease in net operating income in 2004 was attributable to a
reduction in investment yields resulting from continued low new money rates. The
increase in net operating income for the fourth quarter is due to the reduction
of policy crediting rates and expenses.
Assurant Preneed fourth quarter 2004 net earned premiums decreased 2.8% to
$124.8 million from $128.4 million in the same period of 2003. Assurant Preneed
twelve months 2004 net earned premiums of $526.1 million decreased 0.6% from
$529.3 million in the twelve months of 2003, a result of a slight sales decrease
due to lower policy crediting rates.
CORPORATE
Amortization of deferred gains from businesses sold through reinsurance declined
consistent with the anticipated run-off of these businesses. Interest expense in
the fourth quarter of 2004 decreased by $7.1 million after tax compared to the
fourth quarter of 2003 due to lower levels of debt at lower interest rates.
Corporate and other net operating loss for the fourth quarter of 2004 was $19.8
million, compared to a loss of $1.2 million in the fourth quarter of 2003. The
fourth quarter of 2004 included a one-time tax provision on $110 million of
capital repatriated from Assurant's Puerto Rico affiliate pursuant to the
American Jobs Creation Act and other tax adjustments amounting to a net charge
of $8.7 million. 2004 corporate loss totaled $35.3 million versus net operating
income of $7.2 million in 2003. Expenses increased due to stock appreciation
rights costs and public company costs, including expenses related to
Sarbanes-Oxley 404 compliance.
FINANCIAL POSITION
At December 31, 2004 total assets were $24.0 billion and total invested assets,
cash and cash equivalents were $12.4 billion. In the fourth quarter of 2004,
Assurant had after-tax net capital gains of approximately $1.2 million compared
to net realized after-tax losses of $8.4 million in the fourth quarter of 2003.
On December 31, 2004, the Company had 139.8 million shares of common stock
outstanding.
EARNINGS CONFERENCE CALL
Assurant will host a conference call this morning, February 15th at 9:00 a.m.
(ET) with access available via Internet and telephone. Investors and analysts
may participate in the live conference call by dialing 800-473-6123 (toll-free
domestic) or 973-582-2706
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(international); passcode: Assurant. Please call to register at least 10 minutes
before the conference call begins. A replay of the call will be available for
one week via the telephone starting at approximately 11:00 am (ET) on February
15, 2005 and can be accessed at 877-519-4471 (toll-free domestic) or
973-341-3080 (international); passcode: 5568675. The webcast will be archived
for one month on Assurant's website.
ABOUT ASSURANT
Assurant is a premier provider of specialized insurance products and related
services in North America and selected other international markets. The four key
businesses -- Assurant Employee Benefits; Assurant Health; Assurant Preneed; and
Assurant Solutions -- have partnered with clients who are leaders in their
industries and have built leadership positions in a number of specialty
insurance market segments in the U.S. and selected international markets. The
Assurant business units provide creditor-placed homeowners insurance;
manufactured housing homeowners insurance; debt protection administration;
credit-related insurance; warranties and extended services contracts; individual
health and small employer group health insurance; group dental insurance; group
disability insurance; group life insurance; and pre-funded funeral insurance.
The company, which is traded on the New York Stock Exchange under the symbol
AIZ, has over $20 billion in assets and $7 billion in revenue. Assurant has more
than 12,000 employees worldwide and is headquartered in New York's financial
district. www.assurant.com
SAFE HARBOR STATEMENT
Some of the statements included in this press release, particularly those
anticipating future financial performance, business prospects, growth and
operating strategies and similar matters, are forward-looking statements that
involve a number of risks and uncertainties. For those statements, we claim the
protection of the safe harbor for forward-looking statements contained in the
Private Securities Litigation Reform Act of 1995. For a discussion of the
factors that could affect our actual results please refer to the risk factors
identified from time to time in our SEC reports, including, but not limited to,
our 10-K, as filed with the SEC.
NON-GAAP FINANCIAL MEASURES
Assurant uses the following non-GAAP financial measures to analyze the company's
operating performance for the periods presented in this press release. Because
Assurant's calculation of these measures may differ from similar measures used
by other companies, investors should be careful when comparing Assurant's
non-GAAP financial measures to those of other companies.
(1) Pro forma earnings per share has been included as a measure of operating
performance. In February 2004, Assurant completed a significant capital
restructuring in conjunction with its initial public offering of common stock.
Pro forma earnings per share reflects earnings per share adjusted as if this
capital restructuring had occurred on January 1, 2003. This restructuring
included: a stock split and conversion of Class B and C shares resulting in
total outstanding shares of 109,222,276; the issuance of 32,976,854 shares of
Assurant common stock to Fortis Insurance N.V. in exchange for a capital
contribution of $725.5 million, and the issuance of 68,976 restricted shares of
Assurant common stock to certain officers and directors of the
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company pursuant to specific restricted stock grants These transactions occurred
subsequent to the December 31, 2003 balance sheet, but management believes that
this adjusted measure provides a better indication of operating performance than
the corresponding GAAP measure, earnings per share.
(2) Assurant uses net operating income as an important measure of the company's
operating performance. Net operating income equals net income excluding net
realized gains (losses) on investments and other unusual and/or infrequent
items. The company believes net operating income provides investors a valuable
measure of the performance of the company's ongoing business, because it
excludes both the effect of realized gains (losses) on investments that tend to
be highly variable from period to period, and those events that are unusual
and/or unlikely to recur.
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ASSURANT, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
THREE AND TWELVE MONTHS ENDED DECEMBER 31, 2004 (UNAUDITED) AND 2003
THREE MONTHS ENDED DECEMBER 31, YEAR ENDED DECEMBER 31,
-------------------------------- --------------------------------
2004 2003 2004 2003
-------------- -------------- -------------- --------------
(IN THOUSANDS EXCEPT NUMBER OF SHARES AND PER SHARE AMOUNT)
REVENUES
Net earned premiums and other considerations $ 1,638,612 $ 1,623,269 $ 6,482,871 $ 6,156,772
Net investment income 163,263 150,705 634,749 607,313
Net realized gain/(loss) on investments 1,861 (12,940) 24,308 1,868
Amortization of deferred gain on disposal of businesses 14,334 16,042 57,632 68,277
Loss on disposal of business - - (9,232) -
Fees and other income 58,625 59,219 213,136 231,983
-------------- -------------- -------------- --------------
Total revenues 1,876,695 1,836,295 7,403,464 7,066,213
BENEFITS, LOSSES AND EXPENSES
Policyholder benefits 950,821 1,001,438 3,839,769 3,657,763
Selling, underwriting, general and administrative expenses 770,691 737,148 2,969,186 2,829,138
Interest expense 15,314 1,175 56,418 1,175
Distributions on mandatorily redeemable preferred
securities - 25,104 2,163 112,958
Interest premiums on redemption of mandatorily
redeemable preferred securities - 205,822 - 205,822
-------------- -------------- -------------- --------------
Total benefits, losses and expenses 1,736,826 1,970,687 6,867,536 6,806,856
-------------- -------------- -------------- --------------
Income (loss) before income taxes 139,869 (134,392) 535,928 259,357
Income tax expense (benefit) 53,741 (56,759) 185,368 73,705
-------------- -------------- -------------- --------------
Net income $ 86,128 $ (77,633) $ 350,560 $ 185,652
============== ============== ============== ==============
NET INCOME PER SHARE:
Basic $ 0.62 $ (0.71) $ 2.53 $ 1.70
Diluted $ 0.61 $ (0.71) $ 2.53 $ 1.70
Pro forma $ 0.61 $ (0.55) $ 2.48 $ 1.31
DIVIDENDS PER SHARE $ 0.07 $ - $ 0.21 $ 1.66
SHARE DATA:
Basic weighted average shares outstanding 139,968,130 109,222,276 138,358,767 109,222,276
Diluted weighted average shares outstanding 140,054,287 109,222,276 138,467,564 109,222,276
Pro forma weighted average shares outstanding 140,054,287 142,208,676 141,622,001 142,208,676
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ASSURANT, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
AT DECEMBER 31, 2004 (UNAUDITED) AND DECEMBER 31, 2003
DECEMBER 31, DECEMBER 31,
--------------- ---------------
2004 2003
--------------- ---------------
(IN THOUSANDS)
ASSETS
Investments and cash and cash equivalents $ 12,419,797 $ 11,881,802
Reinsurance recoverables 4,133,660 4,445,265
Goodwill 823,054 828,523
Assets held in separate accounts 3,717,149 3,805,058
Other assets 2,874,905 2,747,329
--------------- ---------------
Total assets 23,968,565 23,707,977
=============== ===============
LIABILITIES
Policyholder liability 13,381,936 12,881,796
Debt 971,611 1,750,000
Mandatorily redeemable preferred securities - 196,224
Mandatorily redeemable preferred stock 24,160 24,160
Liabilities related to separate accounts 3,717,149 3,805,058
Accounts payable and other liabilities 2,238,278 2,418,636
--------------- ---------------
Total liabilities 20,333,134 21,075,874
STOCKHOLDERS' EQUITY
Equity, excluding accumulated other comprehensive income 3,297,268 2,313,576
Accumulated other comprehensive income 338,163 318,527
--------------- ---------------
Total stockholders' equity 3,635,431 2,632,103
--------------- ---------------
Total liabilities and stockholders' equity $ 23,968,565 $ 23,707,977
=============== ===============
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