Kemper Reports Strong Fourth Quarter and Full Year 2018 Operating Results

CHICAGO–(BUSINESS WIRE)–Kemper Corporation (NYSE: KMPR) reported
net income of $6.5 million, or $0.10 per diluted share, for the fourth
quarter of 2018, compared to $36.9 million, or $0.71 per diluted share,
for the fourth quarter of 2017. In the fourth quarter of 2018, net
income included a $60.4 million after-tax loss, or $0.93 per diluted
share, attributable to the change in fair value of equity and
convertible securities. As adjusted for the acquisition of Infinity
Property and Casualty Corporation1, net income was $27.0
million, or $0.41 per diluted share, for the fourth quarter of 2018,
compared to $51.6 million, or $0.79 per diluted share, for the fourth
quarter of 2017.

Adjusted consolidated net operating income2 was $59.9
million, or $0.91 per diluted share, for the fourth quarter of 2018,
compared to $31.0 million, or $0.60 per diluted share, for the fourth
quarter of 2017. These results increased primarily from the continued
profitable growth in Specialty Property & Casualty Insurance segment and
continued improvement in Preferred Property & Casualty Insurance
segment, partially offset by the amortization of the Infinity purchase
accounting adjustments.

Highlights of the quarter include:

  • Consolidated earned premiums increased by 76 percent, or $457.7
    million in the quarter, as reported, 12 percent, or $111.9 million, as
    adjusted
    1
  • Specialty Property & Casualty Insurance segment’s earned
    premiums increased by 165 percent, or $447.1 million in the quarter,
    as reported, or 16 percent, or $101.3 million, as adjusted
    1
  • Investment portfolio generated a pre-tax equivalent annualized book
    yield of 4.6 percent in the quarter

Kemper had a great 2018 with strong earnings and solid operating
performance in our core businesses, and the achievement of several
notable milestones,” said Joseph P. Lacher, Jr., President and CEO.
Investments in our franchise resulted in record-setting sales and
premium growth in our specialty personal auto business, with
consistently strong results in our health and life businesses and
improving results in our preferred auto and homeowners lines. The close
of our acquisition of Infinity and our refreshed brand represent
meaningful steps forward in the progress on our strategic plan to focus
on long-term, profitable growth.”

 
  Three Months Ended   Year Ended
(Dollars in Millions, Except Per Share Amounts) (Unaudited) Dec 31,
2018
  Dec 31,
2017
Dec 31,
2018
  Dec 31,
2017
Net Income $ 6.5 $ 36.9 $ 190.1 $ 120.9
Income from Continuing Operations $ 5.0 $ 35.9 $ 188.4 $ 119.9
Adjusted Consolidated Net Operating Income2 $ 59.9 $ 31.0 $ 258.4 $ 92.5
 
Impact of Catastrophe Losses and Related Loss Adjustment Expense
(LAE) on Net Income
$ (19.5 ) $ (33.0 ) $ (75.8 ) $ (120.2 )
 
Diluted Net Income Per Share From:
Net Income $ 0.10 $ 0.71 $ 3.22 $ 2.33
Income from Continuing Operations $ 0.08 $ 0.69 $ 3.19 $ 2.31
Adjusted Consolidated Net Operating Income2 $ 0.91 $ 0.60 $ 4.37 $ 1.78
 
Impact of Catastrophe Losses and Related LAE on Net Income Per
Share
$ (0.30 ) $ (0.64 ) $ (1.30 ) $ (2.32 )
 
1   As Adjusted is a non-GAAP measure, which is computed by excluding
the impact of purchase accounting and including the historical
results of Legacy Kemper and Legacy Infinity in periods prior to the
acquisition date of July 2, 2018. See “Use of Non-GAAP Financial
Measures” for additional information.
2 Adjusted consolidated net operating income is an after-tax, non-GAAP
financial measure. See “Use of Non-GAAP Financial Measures” for
additional information.
 

Capital

Total Shareholders’ Equity at the end of the quarter was $3,050.1
million, an increase of $934.5 million, or 44 percent, since year-end
2017 driven by the acquisition of Infinity and net income. During the
fourth quarter of 2018, Kemper repaid $215 million of the $250 million
term loan facility that was used to facilitate the funding of the
acquisition of Infinity. Kemper ended the quarter with cash and
investments at the holding company of $100.6 million, and the $300
million revolving credit agreement was undrawn.

During the fourth quarter of 2018, Kemper paid dividends of $15.6
million.

Kemper ended the quarter with a book value per share of $47.10, an
increase of 15 percent from $41.11 at the end of 2017. Book value per
share excluding net unrealized gains on fixed maturities was $45.40, up
28 percent from $35.57 at the end of 2017, driven by the Infinity
acquisition and net income, partially offset by dividends paid to
shareholders.

Revenues

Total revenues for the fourth quarter of 2018 increased $397.4 million,
or 57 percent, to $1,094.7 million, compared to the fourth quarter of
2017, driven by $447.1 million of higher Specialty earned premiums. On
an as adjusted basis, revenues for the fourth quarter of 2018 increased
$41.2 million, or 4 percent, to $1,094.7 million, compared to the fourth
quarter of 2017, driven by $101.3 million of higher Specialty earned
premiums primarily from higher policies in-force, partially offset by
$76.4 million of lower revenues from the decrease in the fair values of
equity and convertible securities. Net investment income increased $8.7
million to $91.3 million in the fourth quarter of 2018, primarily from
an $8.9 million increase in interest on fixed income securities and a
$4.3 million increase in dividends on equity securities, partially
offset by a $6.6 million reduction in net investment income on the
alternative investments portfolio. Net realized investment gains were
$16.4 million in the fourth quarter of 2018, compared to $11.5 million
last year. Other income increased $0.9 million to $2.0 million in the
fourth quarter of 2018.

Segment Results

Unless otherwise noted, (i) the segment results discussed below are
presented on an after-tax basis, (ii) prior-year development includes
both catastrophe and non-catastrophe losses and LAE, (iii) catastrophe
losses and LAE exclude the impact of prior-year development, (iv)
underlying loss ratio includes loss and LAE, and (v) all comparisons are
made to the prior year quarter unless otherwise stated.

 
  Three Months Ended   Year Ended
(Dollars in Millions) (Unaudited) Dec 31,
2018
  Dec 31,
2017
Dec 31,
2018
  Dec 31,
2017
Segment Net Operating Income (Loss):
Preferred Property & Casualty Insurance $ 6.0 $ (11.7 ) $ 25.7 $ (45.4 )
Specialty Property & Casualty Insurance 48.5 14.3 115.8 56.3
Life & Health Insurance 13.6   25.7   91.5   91.9  
Total Segment Net Operating Income 68.1 28.3 233.0 102.8
Corporate and Other Net Operating Income (Loss) (8.2 ) 2.7   25.4   (10.3 )
Adjusted Consolidated Net Operating Income 59.9 31.0 258.4 92.5
Net Income (Loss) From:
Change in Fair Value of Equity and Convertible Securities (60.4 ) (50.8 )
Net Realized Gains on Sales of Investments 13.0 7.4 20.9 36.7
Net Impairment Losses Recognized in Earnings (1.8 ) (2.5 ) (3.6 ) (9.3 )
Acquisition Related Transaction, Integration and Other Costs (5.7 )   (36.5 )  
Income from Continuing Operations $ 5.0   $ 35.9   $ 188.4   $ 119.9  
 

The Preferred Property & Casualty Insurance segment reported net
operating income of $6.0 million for the fourth quarter of 2018,
compared to a loss of $11.7 million in 2017. Results increased primarily
from Personal Automobile Insurance premium growth and underlying loss
ratio improvements, and lower net catastrophe losses in Homeowners
Insurance, largely due to recoveries from the aggregate catastrophe
reinsurance program. The Preferred Property & Casualty Insurance
segment’s combined ratio improved 13.9 percentage points to 103.9
percent, while the underlying combined ratio increased 4.7 percentage
points to 94.6 percent in the fourth quarter of 2018. The increase in
the underlying combined ratio was driven mainly by an increase in the
underlying loss ratio in Homeowners associated with both the additional
reinsurance purchased and the strong fourth quarter 2017 comparative
underlying results.

The Specialty Property & Casualty Insurance segment reported net
operating income of $48.5 million for the fourth quarter of 2018,
compared to $14.3 million in 2017. Results increased primarily from
strong Personal Automobile growth and profitability, partially offset by
the impact of the amortization of the Infinity purchase accounting
adjustments. On an as adjusted basis, the segment’s net operating income
was $69.3 million in the fourth quarter of 2018, compared to $26.4
million in 2017. The segment’s underlying combined ratio improved 1.1
percentage points to 94.5 percent in the fourth quarter of 2018,
primarily from an improvement in the underlying loss and LAE ratio in
both Personal Automobile and Commercial Automobile, partially offset by
an increase in the insurance expense ratio due to the amortization of
the Infinity purchase accounting adjustments.

The Life & Health Insurance segment reported net operating income of
$13.6 million for the fourth quarter of 2018, compared to $25.7 million
in 2017, primarily driven by higher benefits costs, an increase in
expenses and a reduction in investment income. The Benefits’ ratio was
impacted by an increase in the frequency of claims in comparison to the
fourth quarter of 2017. In terms of the expense increase, about $2
million of the expense increase is related to one-time items. Most of
the remaining increase in expense is tied to volume and non-run rate
business investments that are expensed on as occurred basis.

Unaudited condensed consolidated statements of income for the three
months and year ended December 31, 2018 and 2017 are presented below.

 
  Three Months Ended   Year Ended
(Dollars in Millions, Except Per Share Amounts) Dec 31,
2018
  Dec 31,
2017
Dec 31,
2018
  Dec 31,
2017
Revenues:
Earned Premiums $ 1,063.6 $ 605.9 $ 3,384.4 $ 2,350.0
Net Investment Income 91.3 82.6 340.9 327.2
Other Income 2.0 1.1 42.2 4.0
Loss from Change in Fair Value of Equity and Convertible Securities (76.4 ) (64.3 )
Net Realized Gains on Sales of Investments 16.4 11.5 26.4 56.5
Other-than-temporary Impairment Losses:
Total Other-than-temporary Impairment Losses (2.2 ) (3.7 ) (4.5 ) (14.4 )
Portion of Losses Recognized in Other Comprehensive Income   (0.1 )   0.1  
Net Impairment Losses Recognized in Earnings (2.2 ) (3.8 ) (4.5 ) (14.3 )
Total Revenues 1,094.7   697.3   3,725.1   2,723.4  
Expenses:
Policyholders’ Benefits and Incurred Losses and Loss Adjustment
Expenses
772.8 472.5 2,466.5 1,837.4
Insurance Expenses 273.2 159.1 900.5 644.3
Interest and Other Expenses 42.6   21.5   159.0   80.6  
Total Expenses 1,088.6   653.1   3,526.0   2,562.3  
Income from Continuing Operations before Income Taxes 6.1 44.2 199.1 161.1
Income Tax Expense (1.1 ) (8.3 ) (10.7 ) (41.2 )
Income from Continuing Operations 5.0 35.9 188.4 119.9
Income from Discontinued Operations 1.5   1.0   1.7   1.0  
Net Income $ 6.5   $ 36.9   $ 190.1   $ 120.9  
 
Income from Continuing Operations Per Unrestricted Share:
Basic $ 0.08   $ 0.69   $ 3.22   $ 2.32  
Diluted $ 0.08   $ 0.69   $ 3.19   $ 2.31  
 
Net Income Per Unrestricted Share:
Basic $ 0.10   $ 0.71   $ 3.25   $ 2.34  
Diluted $ 0.10   $ 0.71   $ 3.22   $ 2.33  
 
Weighted-average Outstanding (Shares in Thousands):
Unrestricted Shares – Basic 64,748.2   51,456.3   58,149.4   51,345.6  
Unrestricted Shares and Equivalent Shares – Diluted 65,448.8   51,870.8   58,751.9   51,577.9  
 
Dividends Paid to Shareholders Per Share $ 0.24   $ 0.24   $ 0.96   $ 0.96  
 

Unaudited business segment revenues for the three months and year
ended December 31, 2018 and 2017 are presented below.

 
  Three Months Ended   Year Ended
(Dollars in Millions) Dec 31,
2018
  Dec 31,
2017
Dec 31,
2018
  Dec 31,
2017
REVENUES:
Preferred Property & Casualty Insurance:
Earned Premiums:
Preferred Automobile $ 115.2 $ 106.5 $ 440.2 $ 422.8
Homeowners 63.6 65.2 250.1 264.8
Other Personal 10.0   10.5   40.4   42.7  
Total Earned Premiums 188.8 182.2 730.7 730.3
Net Investment Income 14.0   13.0   61.8   58.9  
Total Preferred Property & Casualty Insurance Revenues 202.8   195.2   792.5   789.2  
Specialty Property & Casualty Insurance:
Earned Premiums:
Specialty Personal Automobile 660.5 257.8 1,889.5 954.3
Commercial Automobile Insurance 57.3   12.9   137.9   51.4  
Total Earned Premiums 717.8 270.7 2,027.4 1,005.7
Net Investment Income 22.6 9.4 63.4 39.2
Other Income 0.8   0.2   2.4   1.1  
Total Specialty Property & Casualty Insurance Revenues 741.2   280.3   2,093.2   1,046.0  
Life & Health Insurance:
Earned Premiums:
Life 94.1 94.1 378.4 379.7
Accident & Health 45.5 41.1 177.5 161.7
Property 17.4   17.8   70.4   72.6  
Total Earned Premiums 157.0 153.0 626.3 614.0
Net Investment Income 51.7 58.3 210.9 223.2
Other Income 1.1   0.7   4.0   2.6  
Total Life & Health Insurance Revenues 209.8   212.0   841.2   839.8  
Total Segment Revenues 1,153.8 687.5 3,726.9 2,675.0
Loss from Change in Fair Value of Equity and Convertible Securities (76.4 ) (64.3 )
Net Realized Gains on Sales of Investments 16.4 11.5 26.4 56.5
Net Impairment Losses Recognized in Earnings (2.2 ) (3.8 ) (4.5 ) (14.3 )
Other 3.1   2.1   40.6   6.2  
Total Revenues $ 1,094.7   $ 697.3   $ 3,725.1   $ 2,723.4  
 
 
KEMPER CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in Millions)

(Unaudited)

  Dec 31,
2018
  Dec 31,
2017
Assets:
Investments:
Fixed Maturities at Fair Value $ 6,424.2 $ 5,382.7
Equity Securities at Fair Value 684.4 526.0
Equity Securities at Modified Cost 41.5
Equity Method Limited Liability Investments at Cost Plus Cumulative
Undistributed Earnings
187.0 161.0
Convertible Securities at Fair Value 31.5
Fair Value Option Investments 77.5
Short-term Investments at Cost which Approximates Fair Value 286.1 235.5
Other Investments 414.8   422.2
Total Investments 8,069.5   6,804.9
Cash 75.1 45.7
Receivables from Policyholders 1,007.1 366.0
Other Receivables 245.4 194.3
Deferred Policy Acquisition Costs 470.0 365.3
Goodwill 1,112.4 323.0
Current Income Tax Assets 38.9 6.1
Other Assets 526.5   270.9
Total Assets $ 11,544.9   $ 8,376.2
 
Liabilities and Shareholders’ Equity:
Insurance Reserves:
Life & Health $ 3,558.7 $ 3,521.0
Property & Casualty 1,874.9   1,016.8
Total Insurance Reserves 5,433.6   4,537.8
Unearned Premiums 1,424.3 653.9
Deferred Income Tax Liabilities 26.2 14.8
Liabilities for Unrecognized Tax Benefits 4.4 8.1
Debt at Amortized Cost 909.0 592.3
Accrued Expenses and Other Liabilities 697.3   453.7
Total Liabilities 8,494.8   6,260.6
Shareholders’ Equity:
Common Stock 6.5 5.1
Paid-in Capital 1,666.3 673.1
Retained Earnings 1,355.5 1,243.0
Accumulated Other Comprehensive Income 21.8   194.4
Total Shareholders’ Equity 3,050.1   2,115.6
Total Liabilities and Shareholders’ Equity $ 11,544.9   $ 8,376.2
 

Unaudited selected financial information for the Preferred Property &
Casualty Insurance segment follows.

 
  Three Months Ended   Year Ended
(Dollars in Millions) Dec 31,
2018
  Dec 31,
2017
Dec 31,
2018
  Dec 31,
2017

Results of Operations

Net Premiums Written $ 184.7   $ 172.9   $ 748.8   $ 726.1  
 
Earned Premiums $ 188.8 $ 182.2 $ 730.7 $ 730.3
Net Investment Income 14.0   13.0   61.8   58.9  
Total Revenues 202.8   195.2   792.5   789.2  
Incurred Losses and LAE related to:
Current Year:
Non-catastrophe Losses and LAE 120.8 112.4 459.4 460.3
Catastrophe Losses and LAE 21.4 51.6 87.3 173.5
Prior Years:
Non-catastrophe Losses and LAE (3.0 ) (0.2 ) (0.1 ) 20.4
Catastrophe Losses and LAE (0.8 ) (0.6 ) (8.2 ) (4.7 )
Total Incurred Losses and LAE 138.4 163.2 538.4 649.5
Insurance Expenses 57.8   51.3   225.5   217.8  
Operating Income (Loss) 6.6 (19.3 ) 28.6 (78.1 )
Income Tax Benefit (Expense) (0.6 ) 7.6   (2.9 ) 32.7  
Segment Net Operating Income $ 6.0   $ (11.7 ) $ 25.7   $ (45.4 )
 

Ratios Based On Earned Premiums

Current Year Non-catastrophe Losses and LAE Ratio 64.0 % 61.7 % 62.9 % 62.9 %
Current Year Catastrophe Losses and LAE Ratio 11.3 28.3 11.9 23.8
Prior Years Non-catastrophe Losses and LAE Ratio (1.6 ) (0.1 ) 2.8
Prior Years Catastrophe Losses and LAE Ratio (0.4 ) (0.3 ) (1.1 ) (0.6 )
Total Incurred Loss and LAE Ratio 73.3 89.6 73.7 88.9
Insurance Expense Ratio 30.6   28.2   30.9   29.8  
Combined Ratio 103.9 % 117.8 % 104.6 % 118.7 %
 

Underlying Combined Ratio

Current Year Non-catastrophe Losses and LAE Ratio 64.0 % 61.7 % 62.9 % 62.9 %
Insurance Expense Ratio 30.6   28.2   30.9   29.8  
Underlying Combined Ratio 94.6 % 89.9 % 93.8 % 92.7 %
 

Non-GAAP Measure Reconciliation

Combined Ratio 103.9 % 117.8 % 104.6 % 118.7 %
Current Year Catastrophe Losses and LAE Ratio 11.3 28.3 11.9 23.8
Prior Years Non-catastrophe Losses and LAE Ratio (1.6 ) (0.1 ) 2.8
Prior Years Catastrophe Losses and LAE Ratio (0.4 ) (0.3 ) (1.1 ) (0.6 )
Underlying Combined Ratio 94.6 % 89.9 % 93.8 % 92.7 %
 

Unaudited selected financial information for the Specialty Property &
Casualty Insurance segment follows.

 
  Three Months Ended   Year Ended
(Dollars in Millions) Dec 31,
2018
  Dec 31,
2017
Dec 31,
2018
  Dec 31,
2017

Results of Operations

Net Premiums Written $ 674.7   $ 260.4   $ 2,067.4   $ 1,043.5  
 
Earned Premiums $ 717.8 $ 270.7 $ 2,027.4 $ 1,005.7
Net Investment Income 22.6 9.4 63.4 39.2
Other Income 0.8   0.2   2.4   1.1  
Total Revenues 741.2   280.3   2,093.2   1,046.0  
Incurred Losses and LAE related to:
Current Year:
Non-catastrophe Losses and LAE 530.3 214.6 1,517.4 791.2
Catastrophe Losses and LAE 1.0 (0.8 ) 4.7 5.5
Prior Years:
Non-catastrophe Losses and LAE 1.7 2.0 4.1
Catastrophe Losses and LAE     (0.3 ) (0.3 )
Total Incurred Losses and LAE 531.3 215.5 1,523.8 800.5
Insurance Expenses 148.0 44.1 421.7 165.0
Other Expenses 0.4     2.1    
Operating Income (Loss) 61.5 20.7 145.6 80.5
Income Tax Benefit (Expense) (13.0 ) (6.4 ) (29.8 ) (24.2 )
Segment Net Operating Income $ 48.5   $ 14.3   $ 115.8   $ 56.3  
 

Ratios Based On Earned Premiums

Current Year Non-catastrophe Losses and LAE Ratio 73.9 % 79.3 % 74.9 % 78.7 %
Current Year Catastrophe Losses and LAE Ratio 0.1 (0.3 ) 0.2 0.5
Prior Years Non-catastrophe Losses and LAE Ratio 0.6 0.1 0.4
Prior Years Catastrophe Losses and LAE Ratio        
Total Incurred Loss and LAE Ratio 74.0 79.6 75.2 79.6
Insurance Expense Ratio 20.6 16.3 20.8 16.4
Impact on Ratio from Write-off of Long-lived Asset        
Combined Ratio 94.6 % 95.9 % 96.0 % 96.0 %
 

Underlying Combined Ratio

Current Year Non-catastrophe Losses and LAE Ratio 73.9 % 79.3 % 74.9 % 78.7 %
Insurance Expense Ratio 20.6   16.3   20.8   16.4  
Underlying Combined Ratio 94.5 % 95.6 % 95.7 % 95.1 %
 

Non-GAAP Measure Reconciliation

Combined Ratio 94.6 % 95.9 % 96.0 % 96.0 %
Current Year Catastrophe Losses and LAE Ratio 0.1 (0.3 ) 0.2 0.5
Prior Years Non-catastrophe Losses and LAE Ratio 0.6 0.1 0.4
Prior Years Catastrophe Losses and LAE Ratio        
Underlying Combined Ratio 94.5 % 95.6 % 95.7 % 95.1 %
 

Unaudited selected financial information for the Life & Health
Insurance segment follows.

 
  Three Months Ended   Year Ended
(Dollars in Millions) Dec 31,
2018
  Dec 31,
2017
Dec 31,
2018
  Dec 31,
2017

Results of Operations

Earned Premiums $ 157.0 $ 153.0 $ 626.3 $ 614.0
Net Investment Income 51.7 58.3 210.9 223.2
Other Income 1.1   0.7   4.0   2.6  
Total Revenues 209.8   212.0   841.2   839.8  
Policyholders’ Benefits and Incurred Losses and LAE 103.1 93.8 404.2 387.4
Insurance Expenses 88.4   78.9   321.1   312.2  
Operating Profit 18.3 39.3 115.9 140.2
Income Tax Expense (4.7 ) (13.6 ) (24.4 ) (48.3 )
Segment Net Operating Income $ 13.6   $ 25.7   $ 91.5   $ 91.9  
 

Use of Non-GAAP Financial Measures

Adjusted Consolidated Net Operating Income

Adjusted Consolidated Net Operating Income is an after-tax, non-GAAP
financial measure computed by excluding from Income from Continuing
Operations the after-tax impact of 1) loss from change in fair value of
equity and convertible securities, 2) net realized gains on sales of
investments, 3) net impairment losses recognized in earnings related to
investments, 4) acquisition related transaction, integration and other
costs, 5) loss from early extinguishment of debt and 6) significant
non-recurring or infrequent items that may not be indicative of ongoing
operations. Significant non-recurring items are excluded when (a) the
nature of the charge or gain is such that it is reasonably unlikely to
recur within two years and (b) there has been no similar charge or gain
within the prior two years. The most directly comparable GAAP financial
measure is Income from Continuing Operations.

Kemper believes that Adjusted Consolidated Net Operating Income provides
investors with a valuable measure of its ongoing performance because it
reveals underlying operational performance trends that otherwise might
be less apparent if the items were not excluded. Loss from Change in
Fair Value of Equity and Convertible Securities, Net Realized Gains on
Sales of Investments and Net Impairment Losses Recognized in Earnings
related to investments included in the Company’s results may vary
significantly between periods and are generally driven by business
decisions and external economic developments such as capital market
conditions that impact the values of the Company’s investments, the
timing of which is unrelated to the insurance underwriting process. Loss
from Early Extinguishment of Debt is driven by the Company’s financing
and refinancing decisions and capital needs, as well as external
economic developments such as debt market conditions, the timing of
which is unrelated to the insurance underwriting process. Acquisition
Related Transaction, Integration and Other Costs may vary significantly
between periods and are generally driven by the timing of acquisitions
and business decisions which are unrelated to the insurance underwriting
process. Significant non-recurring items are excluded because, by their
nature, they are not indicative of the Company’s business or economic
trends.

A reconciliation of Income from Continuing Operations to Adjusted
Consolidated Net Operating Income for the three months and year ended
December 31, 2018 and 2017 is presented below.

 
  Three Months Ended   Year Ended
(Dollars in Millions) (Unaudited) Dec 31,
2018
  Dec 31,
2017
Dec 31,
2018
  Dec 31,
2017
Income (Loss) from Continuing Operations $ 5.0 $ 35.9 $ 188.4 $ 119.9
Less Net Income (Loss) From:
Loss from Change in Fair Value of Equity and Convertible Securities (60.4 ) (50.8 )
Net Realized Gains on Sales of Investments 13.0 7.4 20.9 36.7
Net Impairment Losses Recognized in Earnings (1.8 ) (2.5 ) (3.6 ) (9.3 )
Acquisition Related Transaction, Integration and Other Costs (5.7 )   (36.5 )  
Adjusted Consolidated Net Operating Income $ 59.9   $ 31.0   $ 258.4   $ 92.5  
 

Diluted Adjusted Consolidated Net Operating Income
Per Unrestricted Share

Diluted Adjusted Consolidated Net Operating Income Per Unrestricted
Share is a non-GAAP financial measure computed by dividing Adjusted
Consolidated Net Operating Income attributed to unrestricted shares by
the weighted-average unrestricted shares and equivalent shares
outstanding. The most directly comparable GAAP financial measure is
Diluted Income from Continuing Operations Per Unrestricted Share.

A reconciliation of Diluted Income from Continuing Operations Per
Unrestricted Share to Diluted Adjusted Consolidated Net Operating Income
Per Unrestricted Share for the three months and year ended December 31,
2018 and 2017 is presented below.

 
  Three Months Ended   Year Ended
(Unaudited) Dec 31,
2018
  Dec 31,
2017
Dec 31,
2018
  Dec 31,
2017
Diluted Income from Continuing Operations Per Unrestricted Share $ 0.08 $ 0.69 $ 3.19 $ 2.31
Less Net Income (Loss) Per Unrestricted Share From:
Loss from Change in Fair Value of Equity and Convertible Securities (0.92 ) (0.86 )
Net Realized Gains on Sales of Investments 0.20 0.14 0.35 0.71
Net Impairment Losses Recognized in Earnings (0.02 ) (0.05 ) (0.06 ) (0.18 )
Acquisition Related Transaction and Integration Costs (0.09 )   (0.61 )  
Diluted Adjusted Consolidated Net Operating Income Per Unrestricted
Share
$ 0.91   $ 0.60   $ 4.37   $ 1.78  
 

Contacts

Investors: Michael Marinaccio
312.661.4930 or [email protected]

Media: Barbara Ciesemier
312.661.4521 or [email protected]

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