8-K
ASSURANT, INC. (AIZ)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 5, 2021 (August 2, 2021)
Assurant, Inc.
(Exact Name of Registrant as Specified in its Charter)
| Delaware | 001-31978 | 39-1126612 |
|---|---|---|
| (State or Other Jurisdiction<br>of Incorporation) | (Commission<br>File Number) | (I.R.S. Employer<br>Identification No.) |
55 Broadway, Suite 2901
New York, New York 10006
(212) 859-7000
(Address, including zip code, and telephone number, including area code, of Registrant’s Principal Executive Offices)
N/A
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| --- | --- |
Securities registered pursuant to Section 12(b) of the Act:
| Title of Each Class | Trading<br>Symbol(s) | Name of Each Exchange<br> <br>on Which Registered |
|---|---|---|
| Common Stock, $0.01 Par Value | AIZ | New York Stock Exchange |
| 5.25% Subordinated Notes due 2061 | AIZN | New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 2.01. | Completion of Acquisition or Disposition of Assets. |
|---|
On August 2, 2021, Assurant, Inc., a Delaware corporation (the “Company”), and Interfinancial Inc., a Georgia corporation and direct wholly owned subsidiary of the Company (“Interfinancial”), completed the previously announced sale (the “Transaction”) of all of the issued and outstanding equity of (i) Preneed Holdings, LLC, a Delaware limited liability company, direct wholly owned subsidiary of Interfinancial and the owner of all of the issued and outstanding capital stock of American Memorial Life Insurance Company, a South Dakota insurance company, and Union Security Insurance Company, a Kansas insurance company, and (ii) ALOC Holdings ULC, a Canadian unlimited liability corporation, direct wholly owned subsidiary of Interfinancial and the owner of all of the issued and outstanding capital stock of Assurant Life of Canada, a Canadian life insurance company (collectively, with their subsidiaries, the “Acquired Companies”). The Acquired Companies comprised the Company’s Global Preneed segment and related legal entities and assets, and were acquired by CMFG Life Insurance Company, an Iowa stock life and accident & health insurance company (“CMFG”), and TruStage Global Holdings, ULC, an Alberta unlimited liability company (together with CMFG, “Buyer”), pursuant to the previously disclosed Equity Purchase Agreement, dated as of March 8, 2021 (the “Equity Purchase Agreement”), by and among the Company, Interfinancial and Buyer.
The aggregate purchase price at closing paid by Buyer to Interfinancial for the sale of the Acquired Companies was approximately $1.35 billion in cash, which was comprised of a base purchase price of $1.25 billion, adjusted for (i) the amount of Leakage (as defined in the Equity Purchase Agreement) paid by the Acquired Companies after December 31, 2020 and at or prior to the closing of the transaction (the “Closing”), (ii) the amount of any Transaction Related Expenses (as defined in the Equity Purchase Agreement) paid by the Acquired Companies after the Closing, (iii) the difference between the book value of certain assets in the Acquired Companies’ investment portfolio as of December 31, 2020 and the value of cash paid in substitution for the fair market value of such assets and (iv) the accrual of interest on the base purchase price, as adjusted pursuant to clauses (i) to (iii), at a rate of 6% per annum during the period beginning on January 1, 2021 and ending on the date immediately prior to the date of the Closing. The purchase price is subject to a post-closing true-up mechanism as set forth in the Equity Purchase Agreement, which is expected to be determined within approximately 120 days from the date of the Closing.
| Item 7.01. | Regulation FD Disclosure. |
|---|
On August 2, 2021, the Company issued a news release announcing the completion of the sale of the businesses previously reported as the Global Preneed segment and related legal entities and assets. The news release is being furnished as Exhibit 99.1 to this Form 8-K.
The information and exhibit being furnished pursuant to this Item 7.01 shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities under that Section 18, and shall not be deemed to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Exchange Act, except as may be expressly set forth by specific reference in any such filing.
-2-
| Item 9.01. | Financial Statements and Exhibits. |
|---|---|
| (b) | Pro forma financial information |
| --- | --- |
The pro forma financial information required by Article 11 of Regulation S-X is being filed as Exhibit 99.2 to this Form 8-K and is incorporated by reference herein.
| (d) | Exhibits |
|---|---|
| Exhibit<br>No. | Exhibit |
| --- | --- |
| 99.1 | News Release, dated August 2, 2021. |
| 99.2 | Unaudited Pro Forma Condensed Consolidated Financial Statements. |
| 104 | The cover page from this Current Report on Form 8-K, formatted in Inline XBRL. |
-3-
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| ASSURANT, INC. | ||
|---|---|---|
| Date: August 5, 2021 | By: | /s/ Jay Rosenblum |
| Name: | Jay Rosenblum | |
| Title: | Executive Vice President, Chief Legal Officer |
-4-
EX-99.1
Exhibit 99.1
Assurant Closes $1.35 Billion Sale of Global Preneed Business
NEW YORK, August 2, 2021 — Assurant, Inc. (NYSE:AIZ), a leading global provider of lifestyle and housing solutions that support, protect and connect major consumer purchases, today announced it closed the sale of its prearranged funeral insurance and final expense business, Global Preneed, and related legal entities and assets to CUNA Mutual Group, a broad financial services provider, for approximately $1.35 billion in cash.
“This sale marks an important milestone in the transformation of Assurant, sharpening our focus on our market-leading lifestyle and housing businesses, and better positioning our company to capitalize on future growth opportunities emerging around the connected consumer,” said Assurant CEO Alan Colberg. “I want to thank all Global Preneed employees for their dedication to serving their two million policyholders and for building a business that will be a great strategic fit as a part of CUNA Mutual Group.”
The Global Preneed sale will generate approximately $1.2 billion of net proceeds. As previously disclosed, the company intends to return approximately $900 million of the net proceeds to shareholders through share repurchases within one year of closing. This is in addition to returning $470 million in 2021 via share repurchases and common stock dividends under the company’s existing three-year, $1.35 billion capital return plan, which is expected to be completed by the end of the year.
The company intends to invest the remainder of the net proceeds primarily in support of its connected world businesses, comprised of Connected Living, Global Automotive and Multifamily Housing, to enable long-term profitable growth and further strengthen its competitive position.
About Assurant
Assurant, Inc. (NYSE: AIZ) is a leading global provider of lifestyle and housing solutions that support, protect and connect major consumer purchases. Anticipating the evolving needs of consumers, Assurant partners with the world’s leading brands to develop innovative products and services and to deliver an enhanced customer experience. A Fortune 500 company with a presence in 21 countries, Assurant offers mobile device solutions; extended service contracts; vehicle protection services; pre-funded funeral insurance; renters insurance; lender-placed insurance products; and other specialty products. The Assurant Foundation strengthens communities by supporting charitable partners that help protect where people live and can thrive, connect with local resources, inspire inclusion and prepare leaders of the future.
Learn more at assurant.com or on Twitter @AssurantNews.
Media Contact
Linda Recupero
Senior Vice President, Enterprise Communication
201.519.9773
linda.recupero@assurant.com
Investor Relations Contacts
Suzanne Shepherd
Senior Vice President, Investor Relations and Sustainability
201.788.4324
suzanne.shepherd@assurant.com
Sean Moshier
Assistant Vice President, Investor Relations
914.204.2253
sean.moshier@assurant.com
Safe Harbor Statement
Some of the statements included in this news release, including our financial plans and any statements regarding the company’s anticipated future financial performance, business prospects, growth and operating strategies and similar matters, may constitute forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995.
You can identify forward-looking statements by the use of words such as “outlook,” “will,” “may,” “can,” “anticipates,” “expects,” “estimates,” “projects,” “intends,” “plans,” “believes,” “targets,” “forecasts,” “potential,” “approximately,” and the negative version of those words and other words and terms with a similar meaning. Any forward-looking statements contained in this news release are based upon our historical performance and on current plans, estimates and expectations. The inclusion of this forward-looking information should not be regarded as a representation by us or any other person that our future plans, estimates or expectations will be achieved. Our actual results might differ materially from those projected in the forward-looking statements. We undertake no obligation to update or review any forward-looking statement, whether as a result of new information, future events or other developments. For additional information on factors that could affect our actual results, please refer to the factors identified in the reports we file with the U.S. Securities and Exchange Commission (the “SEC”), including the risk factors identified in our most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, each as filed with the SEC.
EX-99.2
Exhibit 99.2
Unaudited Pro Forma Condensed Consolidated Financial Statements
On August 2, 2021, Assurant, Inc. (the “Company”) completed the sale of the legal entities which comprise the businesses previously reported as the Global Preneed segment and certain businesses previously disposed of through reinsurance (collectively, the “disposed Global Preneed business”) to subsidiaries of CUNA Mutual Group (“CUNA”) for a base purchase price of $1.25 billion, subject to certain purchase price adjustments at closing (the “Sale”). Following the entry into a definitive agreement in March 2021 to sell the disposed Global Preneed business to CUNA, the disposed Global Preneed business was classified as held for sale and was reported as discontinued operations beginning in the first quarter of 2021.
The following unaudited pro forma condensed consolidated financial statements and accompanying notes reflect the impact of the Sale as if it occurred: on June 30, 2021 for the unaudited pro forma condensed consolidated balance sheet as of June 30, 2021; and on January 1, 2018 for the unaudited pro forma condensed consolidated statements of operations for the six months ended June 30, 2021 and the years ended December 31, 2020, 2019 and 2018. In accordance with Article 11 of Regulation S-X under the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended, the transaction accounting adjustments for the Sale consist of those necessary to account for the disposal of the disposed Global Preneed business.
The unaudited pro forma condensed consolidated financial statements and accompanying notes are based on information currently available, are provided for illustrative purposes only and are not intended to reflect what the Company’s actual results of operations or financial position would have been had the Sale occurred on the dates indicated above, nor is it necessarily indicative of the Company’s future results of operations or financial position after the Sale. Actual and future results may vary significantly from the results reflected in the unaudited pro forma condensed consolidated financial statements.
The unaudited pro forma condensed consolidated financial statements have been derived from and should be read in conjunction with the historical unaudited consolidated financial statements included in the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2021 and the historical audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020.
Assurant, Inc.
Pro Forma Condensed Consolidated Balance Sheet (unaudited)
| (in millions, except share amounts) | Disposed GlobalPreneedBusiness (a) | TransactionAccountingAdjustments | Notes | Pro Forma | |||||||||
| Assets | |||||||||||||
| Investments: | |||||||||||||
| Fixed maturities available for sale, at fair value | 6,574.0 | $ | — | $ | — | $ | 6,574.0 | ||||||
| Equity securities at fair value | 305.4 | — | — | 305.4 | |||||||||
| Commercial mortgage loans on real estate, at amortized cost | 177.9 | — | — | 177.9 | |||||||||
| Short-term investments | 147.6 | — | — | 147.6 | |||||||||
| Other investments | 689.1 | — | — | 689.1 | |||||||||
| Total investments | 7,894.0 | — | — | 7,894.0 | |||||||||
| Cash and cash equivalents | 2,746.0 | — | 1,306.3 | (b) | 4,052.3 | ||||||||
| Premiums and accounts receivable, net | 1,693.6 | — | — | 1,693.6 | |||||||||
| Reinsurance recoverables | 6,708.8 | — | — | 6,708.8 | |||||||||
| Accrued investment income | 62.4 | — | — | 62.4 | |||||||||
| Deferred acquisition costs | 8,136.6 | — | — | 8,136.6 | |||||||||
| Property and equipment, at cost less accumulated depreciation | 495.2 | — | — | 495.2 | |||||||||
| Goodwill | 2,588.7 | — | — | 2,588.7 | |||||||||
| Value of business acquired | 841.3 | — | — | 841.3 | |||||||||
| Other intangible assets, net | 654.4 | — | — | 654.4 | |||||||||
| Other assets | 514.1 | — | — | 514.1 | |||||||||
| Assets held in separate accounts | 11.6 | — | — | 11.6 | |||||||||
| Assets held for sale | 13,648.1 | (13,648.1 | ) | — | — | ||||||||
| Total assets | 45,994.8 | $ | (13,648.1 | ) | $ | 1,306.3 | $ | 33,653.0 | |||||
| Liabilities | |||||||||||||
| Future policy benefits and expenses | 1,338.2 | $ | — | $ | — | $ | 1,338.2 | ||||||
| Unearned premiums | 17,948.0 | — | — | 17,948.0 | |||||||||
| Claims and benefits payable | 1,602.6 | — | — | 1,602.6 | |||||||||
| Commissions payable | 742.3 | — | — | 742.3 | |||||||||
| Reinsurance balances payable | 444.1 | — | — | 444.1 | |||||||||
| Funds held under reinsurance | 359.3 | — | — | 359.3 | |||||||||
| Accounts payable and other liabilities | 2,604.9 | — | 30.6 | (c) | 2,635.5 | ||||||||
| Debt | 2,550.5 | — | — | 2,550.5 | |||||||||
| Liabilities related to separate accounts | 11.6 | — | — | 11.6 | |||||||||
| Liabilities held for sale | 12,484.9 | (12,484.9 | ) | — | — | ||||||||
| Total liabilities | 40,086.4 | (12,484.9 | ) | 30.6 | 27,632.1 | ||||||||
| Stockholders’ Equity | |||||||||||||
| Common stock, par value 0.01 per share | 0.7 | — | — | 0.7 | |||||||||
| Additional paid-in capital | 1,786.2 | — | — | 1,786.2 | |||||||||
| Retained earnings | 3,640.3 | — | 726.8 | (d) (e) | 4,367.1 | ||||||||
| Accumulated other comprehensive income | 604.0 | — | (614.3 | ) | (e) | (10.3 | ) | ||||||
| Treasury stock, at cost | (122.8 | ) | — | — | (122.8 | ) | |||||||
| Total Assurant, Inc. stockholders equity | 5,908.4 | — | 112.5 | 6,020.9 | |||||||||
| Non-controlling interest | — | — | — | ||||||||||
| Total equity | 5,908.4 | — | 112.5 | 6,020.9 | |||||||||
| Total liabilities and equity | 45,994.8 | $ | (12,484.9 | ) | $ | 143.1 | $ | 33,653.0 |
All values are in US Dollars.
See the accompanying Notes to Pro Forma Condensed Consolidated Financial Statements (unaudited).
Assurant, Inc.
Pro Forma Condensed Consolidated Statements of Operations (unaudited)
| For the Six Months Ended June 30, 2021 | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| (in millions, except per share amounts) | Historical | Disposed GlobalPreneedBusiness (f) | TransactionAccountingAdjustments | Notes | Pro Forma | |||||
| Revenues | ||||||||||
| Net earned premiums | $ | 4,256.2 | $ | — | $ | — | $ | 4,256.2 | ||
| Fees and other income | 548.4 | — | 2.8 | (g) | 551.2 | |||||
| Net investment income | 159.2 | — | — | 159.2 | ||||||
| Net realized gains on investments | 11.1 | — | — | 11.1 | ||||||
| Total revenues | 4,974.9 | — | 2.8 | 4,977.7 | ||||||
| Benefits, losses and expenses | ||||||||||
| Policyholder benefits | 1,067.0 | — | — | 1,067.0 | ||||||
| Amortization of deferred acquisition costs and value of business acquired | 1,938.1 | — | — | 1,938.1 | ||||||
| Underwriting, general and administrative expenses | 1,482.9 | — | 2.8 | (g) | 1,485.7 | |||||
| Interest expense | 57.2 | — | — | 57.2 | ||||||
| Total benefits, losses and expenses | 4,545.2 | — | 2.8 | 4,548.0 | ||||||
| Income before provision for income taxes | 429.7 | — | — | 429.7 | ||||||
| Provision for income taxes | 96.5 | — | — | 96.5 | ||||||
| Net income from continuing operations | $ | 333.2 | $ | — | $ | — | $ | 333.2 | ||
| Earnings Per Common Share | ||||||||||
| Net income from continuing operations - Basic | $ | 5.47 | $ | — | $ | — | $ | 5.47 | ||
| Net income from continuing operations - Diluted | $ | 5.41 | $ | — | $ | — | $ | 5.41 | ||
| Weighted average common shares outstanding - Basic | 60,096,711 | — | — | 60,096,711 | ||||||
| Weighted average common shares outstanding - Diluted | 61,554,002 | — | — | 61,554,002 |
See the accompanying Notes to Pro Forma Condensed Consolidated Financial Statements (unaudited).
Assurant, Inc.
Pro Forma Condensed Consolidated Statements of Operations (unaudited)
| For the Year Ended December 31, 2020 | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (in millions, except per share amounts) | Historical | Disposed GlobalPreneedBusiness (f) | TransactionAccountingAdjustments | Notes | Pro Forma | |||||||||
| Revenues | ||||||||||||||
| Net earned premiums | $ | 8,342.7 | $ | (66.9 | ) | $ | — | $ | 8,275.8 | |||||
| Fees and other income | 1,182.7 | (142.5 | ) | 7.9 | (g) | 1,048.1 | ||||||||
| Net investment income | 574.9 | (289.3 | ) | — | 285.6 | |||||||||
| Net realized losses on investments | (16.2 | ) | 8.0 | — | (8.2 | ) | ||||||||
| Amortization of deferred gain on disposal of businesses | 10.7 | (8.6 | ) | — | 2.1 | |||||||||
| Total revenues | 10,094.8 | (499.3 | ) | 7.9 | 9,603.4 | |||||||||
| Benefits, losses and expenses | ||||||||||||||
| Policyholder benefits | 2,549.3 | (284.4 | ) | — | 2,264.9 | |||||||||
| Amortization of deferred acquisition costs and value of business acquired | 3,672.0 | (80.5 | ) | — | 3,591.5 | |||||||||
| Underwriting, general and administrative expenses | 3,110.0 | (62.1 | ) | 8.5 | (g) | 3,056.4 | ||||||||
| Goodwill impairment | 137.8 | (137.8 | ) | — | — | |||||||||
| Iké net losses | 5.9 | — | — | 5.9 | ||||||||||
| Interest expense | 104.5 | — | — | 104.5 | ||||||||||
| Total benefits, losses and expenses | 9,579.5 | (564.8 | ) | 8.5 | 9,023.2 | |||||||||
| Income before provision for income taxes | 515.3 | 65.5 | (0.6 | ) | 580.2 | |||||||||
| Provision for income taxes | 72.6 | (12.2 | ) | (0.1 | ) | (h) | 60.3 | |||||||
| Net income from continuing operations | $ | 442.7 | $ | 77.7 | $ | (0.5 | ) | $ | 519.9 | |||||
| Earnings Per Common Share | ||||||||||||||
| Net income from continuing operations - Basic | $ | 7.04 | $ | 1.29 | $ | (0.01 | ) | $ | 8.32 | |||||
| Net income from continuing operations - Diluted | $ | 6.99 | $ | 1.23 | $ | (0.01 | ) | $ | 8.21 | |||||
| Weighted average common shares outstanding - Basic | 60,114,670 | — | — | 60,114,670 | ||||||||||
| Weighted average common shares outstanding - Diluted | 63,179,938 | — | — | 63,179,938 |
See the accompanying Notes to Pro Forma Condensed Consolidated Financial Statements (unaudited).
Assurant, Inc.
Pro Forma Condensed Consolidated Statements of Operations (unaudited)
| For the Year Ended December 31, 2019 | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| (in millions, except per share amounts) | Historical | Disposed GlobalPreneedBusiness (f) | TransactionAccountingAdjustments | Notes | Pro Forma | ||||||
| Revenues | |||||||||||
| Net earned premiums | $ | 8,020.0 | $ | (61.2 | ) | $ | — | $ | 7,958.8 | ||
| Fees and other income | 1,311.2 | (139.7 | ) | — | 1,171.5 | ||||||
| Net investment income | 675.0 | (291.8 | ) | — | 383.2 | ||||||
| Net realized gains on investments | 66.3 | (9.3 | ) | — | 57.0 | ||||||
| Amortization of deferred gain on disposal of businesses | 14.3 | (15.7 | ) | — | (1.4 | ) | |||||
| Total revenues | 10,086.8 | (517.7 | ) | — | 9,569.1 | ||||||
| Benefits, losses and expenses | |||||||||||
| Policyholder benefits | 2,654.7 | (269.0 | ) | — | 2,385.7 | ||||||
| Amortization of deferred acquisition costs and value of business acquired | 3,322.1 | (84.9 | ) | — | 3,237.2 | ||||||
| Underwriting, general and administrative expenses | 3,250.5 | (64.0 | ) | — | 3,186.5 | ||||||
| Iké net losses | 163.0 | — | — | 163.0 | |||||||
| Interest expense | 110.6 | — | — | 110.6 | |||||||
| Loss on extinguishment of debt | 31.4 | — | — | 31.4 | |||||||
| Total benefits, losses and expenses | 9,532.3 | (417.9 | ) | — | 9,114.4 | ||||||
| Income before provision for income taxes | 554.5 | (99.8 | ) | — | 454.7 | ||||||
| Provision for income taxes | 167.7 | (19.4 | ) | — | 148.3 | ||||||
| Net income from continuing operations | $ | 386.8 | $ | (80.4 | ) | $ | — | $ | 306.4 | ||
| Earnings Per Common Share | |||||||||||
| Net income from continuing operations - Basic | $ | 5.87 | $ | (1.29 | ) | $ | — | $ | 4.58 | ||
| Net income from continuing operations - Diluted | $ | 5.84 | $ | (1.28 | ) | $ | — | $ | 4.56 | ||
| Weighted average common shares outstanding - Basic | 61,942,969 | — | — | 61,942,969 | |||||||
| Weighted average common shares outstanding - Diluted | 62,313,468 | — | — | 62,313,468 |
See the accompanying Notes to Pro Forma Condensed Consolidated Financial Statements (unaudited).
Assurant, Inc.
Pro Forma Condensed Consolidated Statements of Operations (unaudited)
| For the Year Ended December 31, 2018 | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (in millions, except per share amounts) | Historical | Disposed GlobalPreneedBusiness (f) | TransactionAccountingAdjustments | Notes | Pro Forma | |||||||
| Revenues | ||||||||||||
| Net earned premiums | $ | 6,156.9 | $ | (58.4 | ) | $ | — | $ | 6,098.5 | |||
| Fees and other income | 1,308.1 | (131.1 | ) | — | 1,177.0 | |||||||
| Net investment income | 598.4 | (286.1 | ) | — | 312.3 | |||||||
| Net realized losses on investments | (62.7 | ) | 26.9 | — | (35.8 | ) | ||||||
| Amortization of deferred gain on disposal of businesses | 56.9 | (53.6 | ) | — | 3.3 | |||||||
| Total revenues | 8,057.6 | (502.3 | ) | — | 7,555.3 | |||||||
| Benefits, losses and expenses | ||||||||||||
| Policyholder benefits | 2,342.6 | (263.4 | ) | — | 2,079.2 | |||||||
| Amortization of deferred acquisition costs and value of business acquired | 2,300.8 | (70.5 | ) | — | 2,230.3 | |||||||
| Underwriting, general and administrative expenses | 2,980.4 | (58.1 | ) | — | 2,922.3 | |||||||
| Interest expense | 100.3 | — | — | 100.3 | ||||||||
| Total benefits, losses and expenses | 7,724.1 | (392.0 | ) | — | 7,332.1 | |||||||
| Income before provision for income taxes | 333.5 | (110.3 | ) | — | 223.2 | |||||||
| Provision for income taxes | 80.9 | (22.2 | ) | — | 58.7 | |||||||
| Net income from continuing operations | $ | 252.6 | $ | (88.1 | ) | $ | — | $ | 164.5 | |||
| Earnings Per Common Share | ||||||||||||
| Net income from continuing operations - Basic | $ | 4.00 | $ | (1.49 | ) | $ | — | $ | 2.51 | |||
| Net income from continuing operations - Diluted | $ | 3.98 | $ | (1.48 | ) | $ | — | $ | 2.50 | |||
| Weighted average common shares outstanding - Basic | 59,239,608 | — | — | 59,239,608 | ||||||||
| Weighted average common shares outstanding - Diluted | 59,545,524 | — | — | 59,545,524 |
See the accompanying Notes to Pro Forma Condensed Consolidated Financial Statements (unaudited).
Assurant, Inc.
Notes to Pro Forma Condensed Consolidated Financial Statements (unaudited)
| (a) | Reflects the disposition of assets and liabilities of the disposed Global Preneed business as if the Sale<br>occurred on June 30, 2021. |
|---|---|
| (b) | Reflects the aggregate purchase price at the closing of the Sale (the “Closing”) of approximately<br>$1.35 billion in cash, which was comprised of a base purchase price of $1.25 billion, adjusted for (i) the amount of Leakage (as defined in the Equity Purchase Agreement, dated as of March 8, 2021, by and among the Company,<br>Interfinancial Inc., CMFG Life Insurance Company and TruStage Global Holdings, ULC (the “Equity Purchase Agreement”)) paid by the disposed Global Preneed business after December 31, 2020 and at or prior to the Closing, (ii) the<br>amount of any Transaction Related Expenses (as defined in the Equity Purchase Agreement) paid by the disposed Global Preneed business after the Closing, (iii) the difference between the book value of certain assets in the disposed Global<br>Preneed business’s investment portfolio as of December 31, 2020 and the value of cash paid in substitution for the fair market value of such assets and (iv) the accrual of interest on the base purchase price, as adjusted pursuant to<br>clauses (i) to (iii), at a rate of 6% per annum during the period beginning on January 1, 2021 and ending on the date immediately prior to the date of the Closing. The purchase price is subject to a post-closing true-up mechanism as set forth in the Equity Purchase Agreement, which is expected to be determined within approximately 120 days from the date of the Closing. The net cash proceeds are net of $40.4 million of<br>transaction costs associated with the Sale. |
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| (c) | Reflects the estimated net income tax impact related to the estimated gain on the sale, excluding the portion<br>of the gain that was recognized from accumulated other comprehensive income. The $30.6 million amount includes an income tax payable of $62.3 million, partially offset by a realization of deferred taxes of $31.7 million.<br> |
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| (d) | Reflects the estimated net gain on the Sale, including $112.5 million representing the net cash proceeds<br>less the net assets of the disposed Global Preneed business and the recognition of $614.3 million from accumulated other comprehensive income as summarized in footnote (e) below. An estimated gain/loss is not included in the adjustments in<br>the unaudited pro forma consolidated statements of operations as this amount will be included in discontinued operations in the consolidated statements of operations of the Company beginning in the third quarter of 2021. |
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| (e) | Reflects the recognition of $614.3 million from accumulated other comprehensive income in retained<br>earnings, comprised of $782.2 million of net unrealized gains on investments and $2.0 million of foreign currency translation adjustments. These adjustments are subject to $169.9 million of income tax expense. |
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| (f) | Reflects the elimination of the results of the disposed Global Preneed business as if the Sale occurred on<br>January 1, 2018. |
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| (g) | Reflects the fee income earned and operating expense incurred in connection with the transition service<br>agreement (“TSA”) between the Company and CUNA, which will expire two years after the Sale. As this adjustment relates to a new contractual arrangement, the effects are limited in the unaudited pro forma condensed consolidated statements<br>of operations to the most recent full year and interim period presented. |
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| (h) | Reflects an adjustment for the estimated income tax effect of the pro forma adjustments. The estimated tax<br>effect on the pro forma adjustments was calculated using the historical statutory rate in effect for the period presented. |
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