- Revenues of $208.5 million for Q4’19 and $772.7 million for
FY’19, up 36.8% and 23.5%, respectively from Q4’18 and from
FY’18.
- Net income of $4.2 million for Q4’19, up from $0.1
million in Q4’18, driven by growth in our Insurance
operations and improved returns in Tiptree Capital. Net income of
$18.4 million for FY’19, down $5.5 million from prior year driven
by non-recurring gain from sale of Care in 2018, partially offset
by improved performance in Insurance operations and Tiptree
Capital.
- Operating EBITDA(1) of $21.0 million for the quarter and
$63.6 million for the year, an increase of 26.5% and 15.8%,
respectively, from Q4’18 and FY’18, driven by growth in insurance
operations and contributions from our shipping and mortgage
operations within Tiptree Capital.
- Book value per share as of December 31, 2019 was $11.52,
which including dividends paid represents a 8.2%(2) year over year
return.
- Declared a dividend of $0.04 per share to stockholders of
record on March 23, 2020 with a payment date of March 30,
2020.
Tiptree Inc. (NASDAQ:TIPT) (“Tiptree” or the “Company”), a
holding company that combines specialty insurance operations with
investment management, today announced its financial results for
the year ended December 31, 2019.
Summary Consolidated
Statements of Operations
($ in millions, except per share
information)
Three Months Ended December
31,
Year Ended December
31,
GAAP:
2019
2018
2019
2018
Total revenues
$
208.5
$
152.4
$
772.7
$
625.8
Net income attributable to Common
Stockholders
$
4.2
$
0.1
$
18.4
$
23.9
Diluted earnings per share
$
0.11
$
0.01
$
0.50
$
0.69
Cash dividends paid per common share
$
0.040
$
0.035
$
0.155
$
0.135
Non-GAAP:
(1)
Operating EBITDA
$
21.0
$
16.6
$
63.6
$
54.9
Adjusted EBITDA
$
19.3
$
5.6
$
63.0
$
28.8
Book value per share
$
11.52
$
10.79
$
11.52
$
10.79
(1)
For further information relating to the
Company’s Operating EBITDA, Adjusted EBITDA and Book value per
share, including a reconciliation to GAAP financials, see
“—Non-GAAP Reconciliations” below.
(2)
Total return per share as of December 31,
2019 defined as cumulative dividends paid of $0.155 per share plus
growth in book value per share from December 31, 2018.
Earnings Conference Call
Tiptree will host a conference call on Thursday, March 12, 2020
at 9:00 a.m. Eastern Time to discuss its Q4 and full year 2019
financial results. A copy of our investor presentation, to be used
during the conference call, as well as this press release, will be
available in the Investor Relations section of the Company’s
website, located at www.tiptreeinc.com.
The conference call will be available via live or archived
webcast at http://www.investors.tiptreeinc.com. To listen to
a live broadcast, go to the site at least 15 minutes prior to the
scheduled start time in order to register, download and install any
necessary audio software. To participate in the telephone
conference call, please dial 1-877-407-4018 (domestic) or
1-201-689-8471 (international). Please dial in at least five
minutes prior to the start time.
A replay of the call will be available from Thursday, March 12,
2020 at 1:00 p.m. Eastern Time, until midnight Eastern on Thursday,
March 19, 2020. To listen to the replay, please dial 1-844-512-2921
(domestic) or 1-412-317-6671 (international), Passcode:
13697617.
Financial Overview
2019 and early 2020 highlights include:
Overall:
- Delivered total annual return of 8.2%, as measured by growth in
book value per share plus dividends paid.
- In 2019, we purchased and retired 1,472,730 shares of our
Common Stock for $9.1 million.
- Increased our dividends for the third consecutive year to
$0.155 per share, a 14.8% increase over the prior year.
Tiptree Insurance:
- Gross written premiums for 2019 were $1,015 million, up 17.0%
from the prior year. Net written premiums were $537.2 million, up
15.1%, driven by growth in all product lines.
- Our insurance investments earned a total return of 5.4%, up
from 0.3% from the prior year period, driven primarily by improved
mark-to-market on equities and fixed income investments.
- In January 2020, we acquired Smart AutoCare, a growing vehicle
warranty administrator in the United States. The transaction valued
the business at $160 million of enterprise value, inclusive of $50
million of earn out consideration, representing a multiple of 8.3x
modified cash EBITDA (excluding anticipated revenue and expense
synergies).
- As part of our strategy to grow our insurance operations in
Europe, in July 2019, we acquired a majority interest in Defend, an
automotive finance and insurance administrator operating in the
Czech Republic, Poland, Hungary, Slovakia, and the UK.
Tiptree Capital:
- Operating EBITDA grew year over year, driven primarily by the
inclusion of a full year of our maritime transportation operations
and improvements in specialty finance.
- Increased invested capital, primarily due to additional
investments in vessels.
Consolidated Results of Operations
Revenues
For the three months ended December 31, 2019, revenues were
$208.5 million, which increased $56.1 million, or 36.8%, over the
prior year period. For the year ended December 31, 2019, revenues
were $772.7 million, which increased $146.9 million, or 23.5%, over
the prior year period. The increase was primarily driven by growth
in earned premiums, lower unrealized losses on Invesque,
improvements in specialty finance results, the inclusion of revenue
from shipping operations and the gain on sale of our CLO management
business. Earned premiums were $499.1 million for the year ended
December 31, 2019, up $71.3 million, or 16.7%, driven by growth in
net written premiums. The combination of unearned premiums and
deferred revenues on the balance sheet grew by $174.4 million, or
25.8%, from December 31, 2018 to December 31, 2019 as a result of
increased written premiums, primarily in credit protection and
warranty programs.
Net Income Available to Common Stockholders
For the three months ended December 31, 2019, net income
available to Common Stockholders was $4.2 million, an increase of
$4.1 million from the prior year period. The increase was primarily
driven by increased investment gains in the period.
For the year ended December 31, 2019, net income available to
Common Stockholders was $18.4 million, a decrease of $5.5 million.
The decrease was primarily driven by income from discontinued
operations of $43.8 million in 2018, which included the gain on
sale of Care. This non-recurring gain was offset by improved
insurance operating performance, the realized gain on the sale of
our CLO management business, and increased realized and unrealized
gains on investments in 2019.
Income before taxes (from continuing and discontinued
operations)
The table below highlights key drivers impacting our
consolidated results on a pre-tax basis. Many of our investments
are carried at fair value and marked to market through unrealized
gains and losses. As a result, we expect our earnings relating to
these investments to be relatively volatile between periods in
contrast to our fixed income securities, which are marked to market
through AOCI in stockholders’ equity. On February 1, 2018, we sold
our senior living operations to Invesque in exchange for a net of
16.6 million shares of Invesque common stock which resulted in a
pre-tax gain on sale of $56.9 million in 2018.
($ in millions)
Three Months Ended December
31,
Year Ended December
31,
2019
2018
2019
2018
Net realized and unrealized gains
(losses)(1)
$
0.6
$
(7.4
)
$
9.8
$
(14.0
)
Net realized and unrealized gains (losses)
- Invesque
$
0.5
$
(10.7
)
$
(1.2
)
$
(20.7
)
Discontinued operations (Care)(2)
$
—
$
10.7
$
—
$
57.5
(1)
Excludes Invesque, Mortgage realized and
unrealized gains and losses and NPLs. The year ended December 31,
2019 includes $7.6 million gain on sale of our CLO business.
(2)
Represents Care for the year ended
December 31, 2018 including a $56.9 million pre-tax gain on
sale.
Non-GAAP
Management uses Operating EBITDA, Adjusted EBITDA and book value
per share as measurements of operating performance which are
non-GAAP measures. Management believes the use of Operating EBITDA
and Adjusted EBITDA provides supplemental information useful to
investors as they are frequently used by the financial community to
analyze financial performance, and to analyze a company’s ability
to service its debt and to facilitate comparison among companies.
Management uses Operating EBITDA as part of its capital allocation
process and to assess comparative returns on invested capital
amongst our businesses and investments. Adjusted EBITDA is also
used in determining incentive compensation for the Company’s
executive officers. Operating EBITDA and Adjusted EBITDA are not
measurements of financial performance or liquidity under GAAP and
should not be considered as an alternative or substitute for GAAP
net income. Management believes the use of book value per share
provides supplemental information useful to investors as it is
frequently used by the financial community to analyze company
growth on a relative per share basis.
Operating EBITDA for the three months ended December 31, 2019
was $21.0 million compared to $16.6 million for the 2018 period, an
increase of $4.4 million, or 26.5%. Operating EBITDA for the year
ended December 31, 2019 was $63.6 million, an increase of $8.7
million, or 15.8%. The increase for both periods were driven
primarily by improved performance in Tiptree Capital.
Total stockholders’ equity was $411.5 million as of December 31,
2019 compared to $399.3 million as of December 31, 2018, primarily
driven by net income, offset by share repurchases and dividends
paid. In 2019, Tiptree returned $14.4 million to shareholders
through share repurchases and dividends paid. Book value per share
for the year ended December 31, 2019 was $11.52, an increase from
book value per share of $10.79 as of December 31, 2018. The key
drivers of the period-over-period impact were earnings per share
and the purchase of 1.5 million shares at an average 40% discount
to book value. Those increases were offset by dividends paid of
$0.155 per share and officer compensation share issuances.
Results by Segment
Tiptree is a holding company that combines insurance operations
with investment management capabilities. Our principal operating
subsidiary is a leading provider of specialty insurance products
and related services. We also allocate capital across a broad
spectrum of businesses, assets and other investments, which we
refer to as Tiptree Capital. As such, we classify our business into
one reportable segment, specialty insurance, with the remainder of
our non-insurance operations aggregated into Tiptree Capital.
Corporate activities include holding company interest expense,
employee compensation and benefits, and other expenses. The
following table presents the components of total pre-tax income
including continuing and discontinued operations.
Pre-tax Income
($ in millions)
Three Months Ended December
31,
Year Ended December
31,
2019
2018
2019
2018
Tiptree Insurance
$
12.6
$
2.8
$
41.0
$
18.6
Tiptree Capital
4.8
(6.6
)
21.0
(7.8
)
Corporate
(7.5
)
(9.4
)
(32.9
)
(30.6
)
Pre-tax income (loss) from continuing
operations
$
9.9
$
(13.2
)
$
29.1
$
(19.8
)
Pre-tax income (loss) from discontinued
operations (1)
$
—
$
10.7
$
—
$
57.5
(1)
Represents Care for the year ended
December 31, 2018 which includes $56.9 million pre-tax gain on
sale.
Operating EBITDA - Non-GAAP (1)
The following tables present the
components of Operating EBITDA.
($ in millions)
Three Months Ended December
31,
Year Ended December
31,
2019
2018
2019
2018
Tiptree Insurance
$
18.8
$
19.4
$
63.3
$
64.5
Tiptree Capital (2)
7.5
2.3
22.8
13.7
Corporate
(5.3
)
(5.1
)
(22.5
)
(23.3
)
Operating EBITDA
$
21.0
$
16.6
$
63.6
$
54.9
(1)
For further information relating to the
Company’s Operating EBITDA, including a reconciliation to GAAP
pre-tax income, see “—Non-GAAP Reconciliations.”
(2)
Includes discontinued operations related
to Care. As of February 1, 2018, invested capital from Care
discontinued operations is represented by our investment in
Invesque common shares. For more information, see “Note—(3)
Dispositions, Assets Held for Sale and Discontinued Operations” in
our Form 10-K for the year ended December 31, 2019.
About Tiptree
Tiptree Inc. (NASDAQ: TIPT) is a holding company that allocates
capital across a broad spectrum of businesses, assets and other
investments. Our principal operating business, Tiptree Insurance,
along with its subsidiaries, is a leading provider of specialty
insurance, warranty products and related administration services.
We also allocate capital to a diverse group of select investments
that we refer to as Tiptree Capital. For more information, please
visit www.tiptreeinc.com.
Forward-Looking
Statements
This release contains “forward-looking statements” which involve
risks, uncertainties and contingencies, many of which are beyond
the Company’s control, which may cause actual results, performance,
or achievements to differ materially from anticipated results,
performance, or achievements. All statements contained in this
release that are not clearly historical in nature are
forward-looking, and the words “anticipate,” “believe,” “estimate,”
“expect,” “intend,” “may,” “might,” “plan,” “project,” “should,”
“target,” “will,” or similar expressions are intended to identify
forward-looking statements. Such forward-looking statements
include, but are not limited to, statements about the Company’s
plans, objectives, expectations and intentions. The forward-looking
statements are not guarantees of future performance and are subject
to risks, uncertainties and other factors, many of which are beyond
our control, are difficult to predict and could cause actual
results to differ materially from those expressed or forecast in
the forward-looking statements. Our actual results could differ
materially from those anticipated in these forward-looking
statements as a result of various factors, including, but not
limited to those described in the section entitled “Risk Factors”
in the Company’s Annual Report on Form 10-K, and as described in
the Company’s other filings with the Securities and Exchange
Commission. Readers are cautioned not to place undue reliance on
these forward-looking statements, which speak only as to the date
of this release. The factors described therein are not necessarily
all of the important factors that could cause actual results or
developments to differ materially from those expressed in any of
our forward-looking statements. Other unknown or unpredictable
factors also could affect our forward-looking statements.
Consequently, our actual performance could be materially different
from the results described or anticipated by our forward-looking
statements. Given these uncertainties, you should not place undue
reliance on these forward-looking statements. Except as required by
the federal securities laws, we undertake no obligation to update
any forward-looking statements.
Tiptree Inc.
Condensed Consolidated Balance
Sheet
($ in thousands, except share data)
As of December 31,
2019
2018
Assets:
Investments:
Available for sale securities, at fair
value
$
335,192
$
283,563
Loans, at fair value
108,894
215,383
Equity securities
155,378
122,979
Other investments
137,472
75,002
Total investments
736,936
696,927
Cash and cash equivalents
133,117
86,003
Restricted cash
11,473
10,521
Notes and accounts receivable, net
286,968
223,105
Reinsurance receivables
539,833
420,351
Deferred acquisition costs
166,493
170,063
Goodwill
99,147
91,562
Intangible assets, net
47,974
52,121
Other assets
68,510
46,034
Assets held for sale
107,835
68,231
Total assets
$
2,198,286
$
1,864,918
Liabilities and Stockholders’
Equity
Liabilities:
Debt, net
$
374,454
$
354,083
Unearned premiums
754,993
599,444
Policy liabilities and unpaid claims
144,384
131,611
Deferred revenue
94,601
75,754
Reinsurance payable
143,869
117,597
Other liabilities and accrued expenses
172,140
124,190
Liabilities held for sale
102,430
62,980
Total liabilities
$
1,786,871
$
1,465,659
Stockholders’ Equity:
Preferred stock: $0.001 par value,
100,000,000 shares authorized, none issued or outstanding
$
—
$
—
Common Stock: $0.001 par value,
200,000,000 shares authorized, 34,562,553 and 35,870,348 shares
issued and outstanding, respectively
35
36
Additional paid-in capital
326,140
331,892
Accumulated other comprehensive income
(loss), net of tax
1,698
(2,058
)
Retained earnings
70,189
57,231
Total Tiptree Inc. stockholders’
equity
398,062
387,101
Non-controlling interests - Other
13,353
12,158
Total stockholders’ equity
411,415
399,259
Total liabilities and stockholders’
equity
$
2,198,286
$
1,864,918
Tiptree Inc.
Condensed Consolidated Statements of
Operations
($ in thousands, except share data)
Three Months Ended December
31,
Year Ended December
31,
2019
2018
2019
2018
Revenues:
Earned premiums, net
$
134,396
$
109,995
$
499,108
$
427,837
Service and administrative fees
27,558
26,680
106,239
102,315
Ceding commissions
2,458
2,869
9,608
9,651
Net investment income
3,304
5,237
14,017
19,179
Net realized and unrealized gains
(losses)
25,122
(3,130
)
83,868
28,782
Other revenue
15,730
10,726
59,888
38,062
Total revenues
208,568
152,377
772,728
625,826
Expenses:
Policy and contract benefits
46,425
36,804
170,681
152,095
Commission expense
77,987
68,043
303,057
262,460
Employee compensation and benefits
35,181
29,611
129,479
113,557
Interest expense
6,876
7,078
27,059
27,013
Depreciation and amortization
3,661
3,486
13,569
12,596
Other expenses
28,561
20,547
99,744
77,901
Total expenses
198,691
165,569
743,589
645,622
Income (loss) before taxes from continuing
operations
9,877
(13,192
)
29,139
(19,796
)
Less: provision (benefit) for income
taxes
5,311
(4,431
)
9,017
(5,909
)
Net income (loss) from continuing
operations
4,566
(8,761
)
20,122
(13,887
)
Discontinued operations:
Income (loss) before taxes from
discontinued operations
—
—
—
624
Gain on sale of discontinued
operations
—
10,676
—
56,860
Less: Provision (benefit) for income
taxes
1,387
—
13,714
Net income (loss) from discontinued
operations
—
9,289
—
43,770
Net income (loss) before
non-controlling interests
4,566
528
20,122
29,883
Less: net income (loss) attributable to
non-controlling interests - TFP
—
—
—
5,500
Less: net income (loss) attributable to
non-controlling interests - Other
419
363
1,761
450
Net income (loss) attributable to
Common Stockholders
$
4,147
$
165
$
18,361
$
23,933
Net income (loss) per Common
Share:
Basic, continuing operations, net
$
0.12
$
(0.25
)
$
0.52
$
(0.38
)
Basic, discontinued operations, net
—
0.26
—
1.07
Basic earnings per share
$
0.12
$
0.01
$
0.52
$
0.69
Diluted, continuing operations, net
0.11
(0.25
)
0.50
(0.38
)
Diluted, discontinued operations, net
—
0.26
—
1.07
Diluted earnings per share
$
0.11
$
0.01
$
0.50
$
0.69
Weighted average number of Common
Shares:
Basic
34,562,219
35,921,632
34,578,292
34,715,852
Diluted
34,578,357
35,921,632
34,578,292
34,715,852
Dividends declared per Common Share
$
0.040
$
0.035
$
0.16
$
0.14
Tiptree Inc.
Non-GAAP Reconciliations (Unaudited)
Non-GAAP Financial Measures — Adjusted
EBITDA and Operating EBITDA
The Company defines Adjusted EBITDA as GAAP net income of the
Company adjusted to add (i) corporate interest expense,
consolidated income taxes and consolidated depreciation and
amortization expense, (ii) adjust for the effect of purchase
accounting, (iii) adjust for non-cash fair value adjustments, and
(iv) any significant non-recurring expenses. Operating EBITDA
represents Adjusted EBITDA plus stock based compensation expense,
less realized and unrealized gains and losses and less third party
non-controlling interests. Operating EBITDA and Adjusted EBITDA are
not measurements of financial performance or liquidity under GAAP
and should not be considered as an alternative or substitute for
GAAP net income.
($ in millions)
Three Months Ended December
31,
Year Ended December
31,
2019
2018
2019
2018
Net income (loss) attributable to Common
Stockholders
$
4.2
$
0.1
$
18.4
$
23.9
Add: net (loss) income attributable to
noncontrolling interests
0.4
0.4
1.7
6.0
Less: net income from discontinued
operations
—
9.3
—
43.8
Income (loss) from continuing
operations
$
4.6
$
(8.8
)
$
20.1
$
(13.9
)
Corporate debt related interest
expense(1)
4.8
4.9
19.7
18.2
Consolidated income tax expense
(benefit)
5.3
(4.4
)
9.0
(5.9
)
Depreciation and amortization
expense(2)
3.6
3.4
13.1
11.6
Non-cash fair value adjustments(3)
(0.7
)
(0.5
)
(3.1
)
(0.4
)
Non-recurring expenses(4)
1.7
0.3
4.2
2.4
Adjusted EBITDA from continuing
operations
$
19.3
$
(5.1
)
$
63.0
$
12.0
Add: Stock based compensation expense
1.9
2.9
6.4
6.7
Add: Vessel depreciation, net of capital
expenditures
1.0
0.9
2.9
0.9
Less: Realized and unrealized gains
(losses)(5)
1.1
(18.1
)
8.6
(34.7
)
Less: Third party non-controlling
interests(6)
0.1
0.2
0.1
—
Operating EBITDA from continuing
operations
$
21.0
$
16.6
$
63.6
$
54.3
Income (loss) from discontinued
operations
$
—
$
9.3
$
—
$
43.8
Consolidated income tax expense
(benefit)
—
1.4
—
13.7
Non-cash fair value adjustments (3)
—
—
—
(40.7
)
Adjusted EBITDA from discontinued
operations
$
—
$
10.7
$
—
$
16.8
Less: Realized and unrealized gains
(losses) (5)
—
10.7
—
16.2
Operating EBITDA from discontinued
operations
$
—
$
—
$
—
$
0.6
Total Adjusted EBITDA
$
19.3
$
5.6
$
63.0
$
28.8
Total Operating EBITDA
$
21.0
$
16.6
$
63.6
$
54.9
(1)
Corporate debt interest expense includes
interest expense from secured corporate credit agreements, junior
subordinated notes and preferred trust securities. Interest expense
associated with asset-specific debt in Tiptree Insurance and
Tiptree Capital is not added-back for Adjusted EBITDA and Operating
EBITDA.
(2)
Represents total depreciation and
amortization expense less purchase accounting amortization related
adjustments at our insurance companies. Following the purchase
accounting adjustments, current period expenses associated with
deferred costs were more favorably stated and current period income
associated with deferred revenues were less favorably stated. Thus,
the purchase accounting effect related to our insurance companies
increased EBITDA above what the historical basis of accounting
would have generated.
(3)
For our insurance operations, depreciation
and amortization on senior living real estate that is within net
investment income is added back to Adjusted EBITDA. For Care
(Discontinued Operations), the reduction in EBITDA is related to
accumulated depreciation and amortization, and certain operating
expenses, which were previously included in Adjusted EBITDA in
prior periods.
(4)
Acquisition, start-up and disposition
costs, including debt extinguishment, legal, taxes, banker fees and
other costs. In 2018, includes payments pursuant to a separation
agreement, dated November 10, 2015.
(5)
Adjustment excludes Mortgage realized and
unrealized gains and losses - Performing and NPLs, as those are
recurring in nature and align with those business models.
(6)
Removes the Operating EBITDA associated
with third party non-controlling interests. Does not remove the
non-controlling interests related to employee based shares.
Non-GAAP Financial Measures — Adjusted
EBITDA and Operating EBITDA
The tables below present Adjusted EBITDA and Operating EBITDA by
business component.
Three Months Ended December
31, 2019
($ in millions)
Specialty Insurance
Tiptree Capital
Corporate Expenses
Total
Pre-tax income/(loss) from continuing
operations
$
12.6
$
4.8
$
(7.5
)
$
9.9
Adjustments:
Corporate debt related interest
expense(2)
3.3
—
1.5
4.8
Depreciation and amortization
expenses(3)
2.1
1.3
0.2
3.6
Non-cash fair value adjustments(4)
—
(0.7
)
—
(0.7
)
Non-recurring expenses(5)
2.0
—
(0.3
)
1.7
Adjusted EBITDA
$
20.0
$
5.4
$
(6.1
)
$
19.3
Add: Stock-based compensation expense
1.1
—
0.8
1.9
Add: Vessel depreciation, net of capital
expenditures
—
1.0
—
1.0
Less: Realized and unrealized gain
(loss)(6)
2.3
(1.2
)
—
1.1
Less: Third party non-controlling
interests(7)
—
0.1
—
0.1
Operating EBITDA
$
18.8
$
7.5
$
(5.3
)
$
21.0
Year Ended December 31,
2019
($ in millions)
Tiptree Insurance
Tiptree Capital
Corporate Expenses
Total
Pre-tax income/(loss) from continuing
operations
$
41.0
$
21.0
$
(32.9
)
$
29.1
Adjustments:
Corporate debt related interest
expense(2)
13.4
—
6.3
19.7
Depreciation and amortization
expense(3)
8.6
3.8
0.7
13.1
Non-cash fair value adjustments(4)
—
(3.1
)
—
(3.1
)
Non-recurring expenses(5)
3.7
0.2
0.3
4.2
Adjusted EBITDA
$
66.7
$
21.9
$
(25.6
)
$
63.0
Add: Stock based compensation expense
3.1
0.2
3.1
6.4
Add: Vessel depreciation, net of capital
expenditures
—
2.9
—
2.9
Less: Realized and unrealized gains
(losses)(6)
6.5
2.1
—
8.6
Less: Third party non-controlling
interests(7)
—
0.1
—
0.1
Operating EBITDA
$
63.3
$
22.8
$
(22.5
)
$
63.6
Three Months Ended December
31, 2018
($ in millions)
Specialty Insurance
Tiptree Capital
Corporate Expenses
Total
Pre-tax income/(loss) from continuing
operations
$
2.8
$
(6.6
)
$
(9.4
)
$
(13.2
)
Pre-tax income/(loss) from discontinued
operations(1)
—
10.7
—
10.7
Adjustments:
Corporate debt related interest
expense(2)
3.2
—
1.7
4.9
Depreciation and amortization
expenses(3)
2.2
1.1
0.1
3.4
Non-cash fair value adjustments(4)
—
(0.5
)
—
(0.5
)
Non-recurring expenses(5)
0.3
(1.5
)
1.5
0.3
Adjusted EBITDA
$
8.5
$
3.2
$
(6.1
)
$
5.6
Add: Stock-based compensation expense
1.9
—
1.0
2.9
Add: Vessel depreciation, net of capital
expenditures
—
0.9
—
0.9
Less: Realized and unrealized gain
(loss)(6)
(9.0
)
1.6
—
(7.4
)
Less: Third party non-controlling
interests(7)
—
0.2
—
0.2
Operating EBITDA
$
19.4
$
2.3
$
(5.1
)
$
16.6
Year Ended December 31,
2018
($ in millions)
Tiptree Insurance
Tiptree Capital
Corporate Expenses
Total
Pre-tax income/(loss) from continuing
operations
$
18.6
$
(7.8
)
$
(30.6
)
$
(19.8
)
Pre-tax income/(loss) from discontinued
operations(1)
—
57.5
—
57.5
Adjustments:
Corporate debt related interest
expense(2)
13.2
—
5.0
18.2
Depreciation and amortization
expenses(3)
9.8
1.6
0.2
11.6
Non-cash fair value adjustments(4)
—
(41.1
)
—
(41.1
)
Non-recurring expenses(5)
3.1
—
(0.7
)
2.4
Adjusted EBITDA
$
44.7
$
10.2
$
(26.1
)
$
28.8
Add: Stock based compensation expense
3.8
0.1
2.8
6.7
Add: Vessel depreciation, net of capital
expenditures
—
0.9
—
0.9
Less: Realized and unrealized gains
(losses)(6)
(16.0
)
(2.5
)
—
(18.5
)
Less: Third party non-controlling
interests(7)
—
—
—
—
Operating EBITDA
$
64.5
$
13.7
$
(23.3
)
$
54.9
The footnotes below correspond to the tables above, under
“—Adjusted EBITDA and Operating EBITDA - Non-GAAP”
(1)
Includes discontinued operations related
to Care. For more information, see “Note—(3) Dispositions, Assets
Held for Sale & Discontinued Operations” in our Form 10-K for
the year ended December 31, 2019.
(2)
Corporate debt interest expense includes
interest expense from secured corporate credit agreements, junior
subordinated notes and preferred trust securities. Interest expense
associated with asset-specific debt in Tiptree Insurance and
Tiptree Capital is not added-back for Adjusted EBITDA and Operating
EBITDA.
(3)
Represents total depreciation and
amortization expense less purchase accounting amortization related
adjustments at our insurance companies. Following the purchase
accounting adjustments, current period expenses associated with
deferred costs were more favorably stated and current period income
associated with deferred revenues were less favorably stated. Thus,
the purchase accounting effect related to our insurance companies
increased EBITDA above what the historical basis of accounting
would have generated.
(4)
For our insurance operations, depreciation
and amortization on senior living real estate that is within net
investment income is added back to Adjusted EBITDA. For Care
(Discontinued Operations), the reduction in EBITDA is related to
accumulated depreciation and amortization, and certain operating
expenses, which were previously included in Adjusted EBITDA in
prior periods.
(5)
Acquisition, start-up and disposition
costs, including debt extinguishment, legal, taxes, banker fees and
other costs. In 2018, includes payments pursuant to a separation
agreement, dated November 10, 2015.
(6)
Adjustment excludes Mortgage realized and
unrealized gains and losses - Performing and NPLs, as those are
recurring in nature and align with those business models.
(7)
Removes the Operating EBITDA associated
with third party non-controlling interests. Does not remove the
non-controlling interests related to employee based shares.
Non-GAAP Financial Measures — Book
value per share
Management believes the use of this financial measure provides
supplemental information useful to investors as book value is
frequently used by the financial community to analyze company
growth on a relative per share basis. The following table provides
a reconciliation between total stockholders’ equity and total
shares outstanding, net of treasury shares.
($ in millions, except per share
information)
As of December 31,
2019
2018
Total stockholders’ equity
$
411.5
$
399.3
Less non-controlling interests - other
13.4
12.2
Total stockholders’ equity, net of
non-controlling interests - other
$
398.1
$
387.1
Total Common Shares outstanding
34.6
35.9
Book value per share
$
11.52
$
10.79
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200311005774/en/
Tiptree Inc. Investor Relations, 212-446-1400
ir@tiptreeinc.com
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