• 4Q19 total revenue up 10.6% to $239.4 million; FY19 up 14.0% to $939.4 million
  • 4Q19 other states direct premiums written up 23.3%; FY19 other states up 27.6%
  • 4Q19 diluted GAAP earnings per share (EPS) of $(1.55), non-GAAP adjusted EPS1 of $(1.57)
  • FY19 diluted GAAP EPS of $1.36, non-GAAP adjusted EPS1 of $1.18
  • FY19 return on average equity of 9.2%; Debt-to-equity ratio of 2.0%
  • Full year EPS driven by 4Q19 pre-tax charges, $43.7 million in prior years adverse development, $40.7 million reduction in prior years anticipated subrogation recoveries, $24.7 million in current year strengthening, and $16.7 million in strengthening for current year weather events above plan
  • FY19 returned a record $92.3 million to shareholders through share repurchases and dividends
  • UPCIC filed for a 12.4% overall primary rate increase in Florida
  • Over 75% of reinsurance capacity for June 1st, 2020 renewals already secured
  • Initiating FY20 guidance: GAAP and non-GAAP adjusted EPS1 of $2.80 - $3.10 (assuming no extraordinary weather events in 2020); ROAE 17% - 20%

Universal Insurance Holdings (NYSE: UVE) (the “Company”) reported 2019 fourth quarter diluted EPS of $(1.55) on a GAAP basis and $(1.57) non-GAAP adjusted EPS1. Quarterly direct premiums written were up 12.5% from the year-ago quarter to $302.7 million. Book value per share grew to $15.13, an increase of 4.9% with a return on average equity of 9.2% for the year.

1 Excludes net realized and unrealized gains and losses on investments as well as extraordinary reinstatement premiums and associated commissions (“non-GAAP adjusted EPS”). Reconciliations of GAAP to non-GAAP financial measures are provided in the attached tables.

“We ended the year with strong top line growth thanks to our effective marketing strategy, agent relations and customer service,” said Stephen J. Donaghy, Chief Executive Officer. “Since taking over as CEO in July of 2019, we have continued to respond to the well-documented current Florida dynamics that have affected all industry participants. In spite of these challenges, we produced an annualized return on average equity of 9.2%. This annual result includes enhanced conservatism across many different fronts, including the run up of claims prior to the effective date of new AOB legislation, the impact of a hardening reinsurance market, and the overall influence of social inflation. We focused on prior and current years along with our subrogation expectation even though 2019 was our highest subrogation receivable in company history. Our financial strength, along with filing for double digit primary rate increases in Florida and our direct to consumer platform, CloveredSM, have positioned us for long-term, sustainable bottom line growth going forward into 2020 and beyond. We believe the diligent work we have put forth, puts us in position to provide FY20 guidance of a GAAP and non-GAAP adjusted EPS range of $2.80 - $3.10 assuming no extraordinary weather events in 2020, and a Return on Average Equity of 17% - 20%.”

Summary Financial Results

($thousands, except per share data)

Fourth Quarter

 

 

Full Year

 

FY19

 

FY18

 

Change

 

 

FY19

 

FY18

 

Change

(GAAP comparison)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total revenue

$

239,402

 

 

$

216,373

 

 

10.6 %

 

 

$

939,351

 

 

$

823,816

 

 

14.0%

Income (loss) before income taxes

(69,053

)

 

(11,241

)

 

NM

 

 

63,517

 

 

152,873

 

 

(58.5)%

Income (loss) before income taxes margin

(28.8

)%

 

(5.2

)%

 

(23.6) pts

 

 

6.8

%

 

18.6

%

 

(11.8) pts

Diluted EPS

(1.55

)

 

(0.19

)

 

NM

 

 

1.36

 

 

3.27

 

 

(58.4)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Annualized return on average equity (ROE)

NM

 

 

NM

 

 

NM

 

 

9.2

%

 

24.1

%

 

(14.9) pts

Book value per share, end of period

15.13

 

 

14.42

 

 

4.9%

 

 

15.13

 

 

14.42

 

 

4.9%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Non-GAAP comparison) 2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Operating Income

(69,687

)

 

3,324

 

 

NM

 

 

55,833

 

 

192,842

 

 

(71.0)%

Adjusted EPS

(1.57

)

 

0.12

 

 

NM

 

 

1.18

 

 

4.11

 

 

(71.3)%

2 Reconciliation of GAAP to non-GAAP financial measures are provided in the attached tables. Adjusted operating income excludes net realized and unrealized gains and losses on investments, interest expense, and extraordinary reinstatement premiums and associated commissions. Non-GAAP adjusted EPS excludes net realized and unrealized gains and losses on investments, as well as extraordinary reinstatement premiums and associated commissions.

NM = Not Meaningful

Total revenue grew double digits for both the quarter and the year, driven primarily by higher organic premium volume and retention due to our marketing and customer service efforts, premium pricing flowing through the book, and our investment portfolio performance, partially offset by increased reinsurance costs. Income before income tax was down 58.5% for the year and adjusted operating income was down 71.0% for the year, primarily impacted by a lower benefit from our claims adjusting business as prior years’ catastrophe claims conclude, current year reserve strengthening, and current year weather events above plan. Income before income tax produced a 6.8% margin for the year. GAAP diluted EPS and non-GAAP adjusted EPS results for the quarter and the year benefited from premium growth, investment performance, and commission revenue, offset by the aforementioned items. The Company produced an annualized return on average equity of 9.2% and book value per share growth of 4.9% for the year, despite where the industry sits in the current cycle and the number of factors affecting Florida.

Underwriting

($thousands, except policies in force)

 

 

 

 

 

 

 

 

 

 

 

 

Fourth Quarter

 

 

Full Year

 

FY19

 

FY18

 

Change

 

 

FY19

 

FY18

 

Change

Policies in force

888,361

 

 

828,653

 

 

7.2%

 

 

888,361

 

 

828,653

 

 

7.2%

In-force premium

$

1,296,416

 

 

$

1,193,019

 

 

8.7%

 

 

$

1,296,416

 

 

$

1,193,019

 

 

8.7%

 

 

 

 

 

 

 

 

 

 

 

 

 

Direct premiums written

302,655

 

 

268,934

 

 

12.5%

 

 

1,292,721

 

 

1,190,875

 

 

8.6%

Direct premiums earned

321,571

 

 

296,948

 

 

8.3%

 

 

1,233,121

 

 

1,121,640

 

 

9.9%

Net premiums earned

215,819

 

 

204,595

 

 

5.5%

 

 

842,502

 

 

768,382

 

 

9.6%

 

 

 

 

 

 

 

 

 

 

 

 

 

Expense ratio 3

29.6

%

 

31.7

%

 

(2.1) pts

 

 

32.3

%

 

33.4

%

 

(1.1) pts

Loss & LAE ratio

113.3

%

 

79.5

%

 

33.8 pts

 

 

71.6

%

 

53.9

%

 

17.7 pts

Combined ratio

142.9

%

 

111.2

%

 

31.7 pts

 

 

103.9

%

 

87.3

%

 

16.6 pts

3 Expense ratio excludes interest expense.

Direct premiums written were up double digits for the quarter, led by the continued impact of rate increases in Florida and other states, as well as strong direct premium growth of 23.3% in Other States (non-Florida). For the year, direct premiums written were up 8.6% led by the rate increases, as well as strong direct premium growth of 27.6% in Other States and a slightly improved policy retention.

On the expense side, the combined ratio increased 31.7 points for the quarter and 16.6 points for the year. The increases were driven primarily by reduced benefits from claim settlement fees as prior years’ catastrophe claims conclude, conservatism on prior years’ anticipated subrogation recoveries, current year reserve strengthening, and weather events above plan, partially offset by an improvement in the expense ratio as set forth below:

  • The expense ratio improved 2.1 points for the quarter driven by a 1.8 point improvement in the other operating expense ratio, further aided by a 30 basis point decrease in the policy acquisition cost ratio. For the year, the expense ratio improved 1.1 points driven by a 1.7 point improvement in the other operating expense ratio, partially offset by a 60 basis point increase in the policy acquisition cost ratio.
  • The net loss and loss adjustment expense ratio increased 33.8 points for the quarter and 17.7 points for the year. Quarterly and full year drivers for 2019 include:
    • Prior year reserve development was primarily made up of a $40.7 million reduction in anticipated subrogation recoveries in the fourth quarter, and $43.7 million of prior accident years adverse development in the fourth quarter resulting in a total of $84.4 million or 39.1 points for the quarter and $88.1 million or 10.4 points for the year.
    • Weather events in excess of plan of $16.7 million or 7.7 points ($9.8 million in 4Q18) for the quarter were directly related to strengthening IBNR for weather events in 2019. For the full year, weather events in excess of plan were $38.7 million or 4.6 points ($14.8 million in FY18).
    • All other losses and loss adjustment expense of $143.4 million or 66.5 points for the quarter and $476.7 million or 56.6 points for the year, were primarily related to diversified growth, $24.7 million in the fourth quarter of incremental reserve strengthening for accident year 2019 as the industry continues to see increased severity in represented claims, and a reduced benefit from our adjusting business as prior years’ catastrophe claims conclude.

Services

($thousands)

Fourth Quarter

 

 

Full Year

 

FY19

 

FY18

 

Change

 

 

FY19

 

FY18

 

Change

Commission revenue

$

7,168

 

 

$

5,800

 

 

23.6%

 

 

$

26,101

 

 

$

22,438

 

 

16.3%

Policy fees

4,973

 

 

4,532

 

 

9.7%

 

 

21,560

 

 

20,275

 

 

6.3%

Other revenue

2,603

 

 

1,905

 

 

36.6%

 

 

7,972

 

 

7,163

 

 

11.3%

Total

14,744

 

 

12,237

 

 

20.5%

 

 

55,633

 

 

49,876

 

 

11.5%

Total services revenue increased 20.5% for the quarter and 11.5% for the full year. The increase was driven by commission revenue earned on ceded premiums and an increase in policy fees and other revenue related to volume.

Investments

($thousands)

Fourth Quarter

 

 

Full Year

 

FY19

 

FY18

 

Change

 

 

FY19

 

FY18

 

Change

Net investment income

$

7,578

 

 

$

7,603

 

 

(0.3)%

 

 

$

30,743

 

 

$

24,816

 

 

23.9%

Realized gains (losses)

437

 

 

4

 

 

NM

 

 

(12,715

)

 

(2,089

)

 

NM

Unrealized gains (losses)

824

 

 

(8,066

)

 

NM

 

 

23,188

 

 

(17,169

)

 

NM

NM = Not Meaningful

Net investment income decreased 0.3% for the quarter, but increased 23.9% for the year, primarily due to increased assets under management and an asset mix shift to higher yielding investment grade bonds during 2018 and 2019. These results were partially offset by a lower trend in yields on cash and short term investments during the second half of 2019. Realized losses in 2019 resulted primarily from the sale of equity securities. Unrealized gains were driven by market volatility in equity securities.

Capital Deployment

During the fourth quarter, the Company repurchased approximately 567 thousand shares at an aggregate cost of $16.3 million. For the full year the Company repurchased approximately 2.3 million shares at an aggregate cost of $66.2 million. The Company’s current share repurchase authorization program has $28.3 million remaining as of December 31, 2019 and runs through December 31, 2021.

On February 11th, 2020 the Board of Directors of the Company declared a quarterly cash dividend of 16 cents per share of common stock, payable March 19, 2020, to shareholders of record as of the close of business on March 12, 2020.

Guidance

Universal initiated the following guidance for fiscal 2020:

  • GAAP and Non-GAAP Adjusted EPS in a range of $2.80 - $3.10 (assuming no extraordinary weather events in 2020)
  • Annualized return on average equity in a range of 17% - 20%

Conference Call and Webcast

  • Tuesday, March 3, 2020 at 9:00 a.m. ET
  • U.S. Dial-in Number: (855) 752-6647
  • International: (503) 343-6667
  • Participant code: 4299054
  • Listen to live webcast and view presentation: UniversalInsuranceHoldings.com
  • Replay of the call will be available on the UVE website and by phone at (855) 859-2056 or internationally at (404) 537-3406 using the participant code: 4299054 through March 18, 2020

About Universal Insurance Holdings, Inc.

Universal Insurance Holdings (UVE) is a holding company offering property and casualty insurance and value-added insurance services. We develop, market, and write insurance products for consumers predominantly in the personal residential homeowners lines of business and perform substantially all other insurance-related services for our primary insurance entities, including risk management, claims management and distribution. We sell insurance products through both our appointed independent agents and through our direct online distribution channels in the United States across 18 states (primarily Florida). Learn more at UniversalInsuranceHoldings.com.

Non-GAAP Financial Measures

This press release contains non-GAAP financial measures within the meaning of Regulation G promulgated by the U.S. Securities and Exchange Commission (“SEC”), including adjusted earnings per diluted share, which excludes the impact of the net realized and unrealized gains and losses on investments as well as extraordinary reinstatement premiums and associated commissions. Extraordinary reinstatement premiums are not covered by reinstatement premium protection and attach just below the Florida Hurricane Catastrophe Fund (“FHCF”) reinsurance layer. Adjusted operating income excludes the impact of the net realized and unrealized gains and losses on investments, as well as interest expense and extraordinary reinstatement premiums and associated commissions. A “non-GAAP financial measure” is generally defined as a numerical measure of a company’s historical or future performance that excludes or includes amounts, or is subject to adjustments, so as to be different from the most directly comparable measure calculated and presented in accordance with generally accepted accounting principles (“GAAP”). UVE management believes that these non-GAAP financial measures, when considered together with the GAAP financial measures, provide information that is useful to investors in understanding period-over-period operating results separate and apart from items that may, or could, have a disproportionately positive or negative impact on results in any particular period. UVE management also believes that these non-GAAP financial measures enhance the ability of investors to analyze UVE’s business trends and to understand UVE’s performance. UVE’s management utilizes these non-GAAP financial measures as guides in long-term planning. Non-GAAP financial measures should be considered in addition to, and not as a substitute for or superior to, financial measures presented in accordance with GAAP.

Forward-Looking Statements

This press release may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. The words “believe,” “expect,” “predict,” “project,” “should,” “anticipate,” “will,” “plan,” and similar expressions identify forward-looking statements, which speak only as of the date the statements were made and include, but are not limited to, statements regarding the outlook for the Company’s future business and financial performance. Such statements may also include commentary on plans, products and lines of business, marketing arrangements, reinsurance programs and other business developments and assumptions relating to the foregoing. Such forward-looking statements are based on the current beliefs of our management as well as assumptions made by and information currently available to them, which are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. Future results could differ materially from those described, and the Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. For further information regarding risk factors that could affect the Company’s operations and future results, refer to the Company’s reports filed with the Securities and Exchange Commission, including the Company’s Annual Report on Form 10-K.

UNIVERSAL INSURANCE HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(in thousands, except per share data)

 

 

 

December 31,

 

December 31,

 

 

2019

 

2018

ASSETS

 

 

 

 

Invested Assets

 

 

 

 

Fixed maturities, at fair value

 

$

855,284

 

 

$

820,438

 

Equity securities, at fair value

 

43,717

 

 

63,277

 

Investment real estate, net

 

15,585

 

 

24,439

 

Total invested assets

 

914,586

 

 

908,154

 

Cash and cash equivalents

 

182,109

 

 

166,428

 

Restricted cash and cash equivalents

 

2,635

 

 

2,635

 

Prepaid reinsurance premiums

 

175,208

 

 

142,750

 

Reinsurance recoverable

 

193,236

 

 

418,603

 

Premiums receivable, net

 

63,883

 

 

59,858

 

Property and equipment, net

 

41,351

 

 

34,991

 

Deferred policy acquisition costs

 

91,882

 

 

84,686

 

Goodwill

 

2,319

 

 

2,319

 

Other assets

 

52,643

 

 

37,966

 

TOTAL ASSETS

 

$

1,719,852

 

 

$

1,858,390

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

LIABILITIES:

 

 

 

 

Unpaid losses and loss adjustment expenses

 

$

267,760

 

 

$

472,829

 

Unearned premiums

 

661,279

 

 

601,679

 

Advance premium

 

30,975

 

 

26,222

 

Reinsurance payable, net

 

122,581

 

 

93,306

 

Long-term debt

 

9,926

 

 

11,397

 

Other liabilities

 

133,430

 

 

151,324

 

Total liabilities

 

1,225,951

 

 

1,356,757

 

STOCKHOLDERS' EQUITY:

 

 

 

 

Cumulative convertible preferred stock ($0.01 par value) 4

 

 

 

 

Common stock ($0.01 par value) 5

 

467

 

 

465

 

Treasury shares, at cost - 14,069 and 11,731

 

(196,585

)

 

(130,399

)

Additional paid-in capital

 

96,036

 

 

86,353

 

Accumulated other comprehensive income (loss), net of taxes

 

20,364

 

 

(8,010

)

Retained earnings

 

573,619

 

 

553,224

 

Total stockholders' equity

 

493,901

 

 

501,633

 

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

 

$

1,719,852

 

 

$

1,858,390

 

 

 

 

 

 

Notes:

 

 

 

 

4 Cumulative convertible preferred stock ($0.01 par value): Authorized - 1,000 shares; Issued - 10 and 10 shares; Outstanding - 10 and 10 shares; Minimum liquidation preference - $9.99 and $9.99 per share.

5 Common stock ($0.01 par value): Authorized - 55,000 shares; Issued - 46,707 and 46,514 shares; Outstanding 32,638 and 34,783 shares.

UNIVERSAL INSURANCE HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME (LOSS) (UNAUDITED)

(in thousands)

 

 

 

Three Months Ended

 

 

Twelve Months Ended

 

 

December 31,

 

 

December 31,

 

 

2019

 

2018

 

 

2019

 

2018

REVENUES

 

 

 

 

 

 

 

 

 

Net premiums earned

 

$

215,819

 

 

$

204,595

 

 

 

$

842,502

 

 

$

768,382

 

Net investment income

 

7,578

 

 

7,603

 

 

 

30,743

 

 

24,816

 

Net realized gains/(losses) on investments

 

437

 

 

4

 

 

 

(12,715

)

 

(2,089

)

Net unrealized gains/(losses) on equity securities

 

824

 

 

(8,066

)

 

 

23,188

 

 

(17,169

)

Commission revenue

 

7,168

 

 

5,800

 

 

 

26,101

 

 

22,438

 

Policy fees

 

4,973

 

 

4,532

 

 

 

21,560

 

 

20,275

 

Other revenue

 

2,603

 

 

1,905

 

 

 

7,972

 

 

7,163

 

Total revenues

 

239,402

 

 

216,373

 

 

 

939,351

 

 

823,816

 

 

 

 

 

 

 

 

 

 

 

EXPENSES

 

 

 

 

 

 

 

 

 

Losses and loss adjustment expenses

 

244,445

 

 

162,740

 

 

 

603,406

 

 

414,455

 

Policy acquisition costs

 

44,667

 

 

42,994

 

 

 

177,530

 

 

157,327

 

Other operating expenses

 

19,298

 

 

21,792

 

 

 

94,650

 

 

98,815

 

Interest expense

 

45

 

 

88

 

 

 

248

 

 

346

 

Total expenses

 

308,455

 

 

227,614

 

 

 

875,834

 

 

670,943

 

 

 

 

 

 

 

 

 

 

 

Income (loss) before income tax expense

 

(69,053

)

 

(11,241

)

 

 

63,517

 

 

152,873

 

Income tax expense (benefit)

 

(17,980

)

 

(4,773

)

 

 

17,003

 

 

35,822

 

NET INCOME (LOSS)

 

$

(51,073

)

 

$

(6,468

)

 

 

$

46,514

 

 

$

117,051

 

UNIVERSAL INSURANCE HOLDINGS, INC. AND SUBSIDIARIES

SHARE AND PER SHARE INFORMATION

(in thousands, except per share data)

     

 

 

Three Months Ended

 

 

Twelve Months Ended

 

 

December 31,

 

 

December 31,

 

 

2019

 

2018

 

 

2019

 

2018

Weighted average common shares outstanding - basic

 

32,889

 

 

34,814

 

 

 

33,893

 

 

34,856

 

Weighted average common shares outstanding - diluted

 

32,889

 

 

34,814

 

 

 

34,233

 

 

35,786

 

Shares outstanding, end of period

 

32,638

 

 

34,783

 

 

 

32,638

 

 

34,783

 

Basic earnings (loss) per common share

 

$

(1.55

)

 

$

(0.19

)

 

 

$

1.37

 

 

$

3.36

 

Diluted earnings (loss) per common share

 

$

(1.55

)

 

$

(0.19

)

 

 

$

1.36

 

 

$

3.27

 

Cash dividend declared per common share

 

$

0.29

 

 

$

0.29

 

 

 

$

0.77

 

 

$

0.73

 

Book value per share, end of period

 

$

15.13

 

 

$

14.42

 

 

 

$

15.13

 

 

$

14.42

 

Annualized return on average equity (ROE)

 

NM

 

 

NM

 

 

 

9.2

%

 

24.1

%

NM = Not Meaningful

UNIVERSAL INSURANCE HOLDINGS, INC. AND SUBSIDIARIES

SUPPLEMENTARY INFORMATION

(in thousands, except for Policies In-Force data)

 

 

 

Three Months Ended

 

 

Twelve Months Ended

 

 

December 31,

 

 

December 31,

 

 

2019

 

2018

 

 

2019

 

2018

Premiums

 

 

 

 

 

 

 

 

 

Direct premiums written - Florida

 

$

246,927

 

 

$

223,751

 

 

 

$

1,066,112

 

 

$

1,013,290

 

Direct premiums written - Other States

 

55,728

 

 

45,183

 

 

 

226,609

 

 

177,585

 

Direct premiums written - Total

 

$

302,655

 

 

$

268,934

 

 

 

$

1,292,721

 

 

$

1,190,875

 

Direct premiums earned

 

$

321,571

 

 

$

296,948

 

 

 

$

1,233,121

 

 

$

1,121,640

 

Net premiums earned

 

$

215,819

 

 

$

204,595

 

 

 

$

842,502

 

 

$

768,382

 

 

 

 

 

 

 

 

 

 

 

Underwriting Ratios - Net

 

 

 

 

 

 

 

 

 

Loss and loss adjustment expense ratio

 

113.3

%

 

79.5

%

 

 

71.6

%

 

53.9

%

Policy acquisition cost ratio

 

20.7

%

 

21.0

%

 

 

21.1

%

 

20.5

%

Other operating expense ratio6

 

8.9

%

 

10.7

%

 

 

11.2

%

 

12.9

%

General and administrative expense ratio6

 

29.6

%

 

31.7

%

 

 

32.3

%

 

33.4

%

Combined ratio

 

142.9

%

 

111.2

%

 

 

103.9

%

 

87.3

%

 

 

 

 

 

 

 

 

 

 

Other Items

 

 

 

 

 

 

 

 

 

(Favorable)/Unfavorable prior year reserve development

 

$

84,365

 

 

$

97,295

 

 

 

$

88,068

 

 

$

99,522

 

Points on the loss and loss adjustment expense ratio

 

39.1

pts

 

47.6

pts

 

 

10.4

pts

 

13.0

pts

6 Expense ratio excludes interest expense.

 

 

As of

 

 

December 31,

 

 

2019

 

2018

Policies in force

 

 

 

 

Florida

 

662,343

 

 

637,926

 

Other States

 

226,018

 

 

190,727

 

Total

 

888,361

 

 

828,653

 

 

 

 

 

 

In-force premium

 

 

 

 

Florida

 

$

1,070,034

 

 

$

1,015,666

 

Other States

 

226,382

 

 

177,353

 

Total

 

1,296,416

 

 

1,193,019

 

 

 

 

 

 

Total Insured Value

 

 

 

 

Florida

 

$

164,654,848

 

 

$

156,118,955

 

Other States

 

91,401,560

 

 

72,588,067

 

Total

 

256,056,408

 

 

228,707,022

 

UNIVERSAL INSURANCE HOLDINGS, INC. AND SUBSIDIARIES

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

(in thousands, except for per share data)

 

 

Fourth Quarter

 

 

Full Year

 

FY19

 

FY18

 

 

FY19

 

FY18

Income (Loss) Before Income Taxes

$

(69,053

)

 

(11,241

)

 

 

63,517

 

 

152,873

 

Adjustments:

 

 

 

 

 

 

 

 

Reinstatement premium, net of commissions 7

582

 

 

6,415

 

 

 

2,541

 

 

20,365

 

Net unrealized (gains)/losses on equity securities

(824

)

 

8,066

 

 

 

(23,188

)

 

17,169

 

Net realized (gains)/losses on investments

(437

)

 

(4

)

 

 

12,715

 

 

2,089

 

Interest Expense

45

 

 

88

 

 

 

248

 

 

346

 

Total Adjustments

(634

)

 

14,565

 

 

 

(7,684

)

 

39,969

 

Non-GAAP Adjusted Operating Income8

(69,687

)

 

3,324

 

 

 

55,833

 

 

192,842

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP Diluted EPS

$

(1.55

)

 

$

(0.19

)

 

 

$

1.36

 

 

$

3.27

 

Adjustments:

 

 

 

 

 

 

 

 

Reinstatement premium, net of commissions 7

0.02

 

 

0.18

 

 

 

0.07

 

 

0.57

 

Net unrealized (gains)/losses on equity securities

(0.03

)

 

0.23

 

 

 

(0.68

)

 

0.48

 

Net realized (gains)/losses on investments

(0.01

)

 

 

 

 

0.37

 

 

0.06

 

Total Pre-Tax Adjustments

(0.02

)

 

0.41

 

 

 

(0.24

)

 

1.11

 

Income Tax on Above Adjustments

 

 

(0.10

)

 

 

0.06

 

 

(0.27

)

Total Adjustments

(0.02

)

 

0.31

 

 

 

(0.18

)

 

0.84

 

Non-GAAP Adjusted EPS8

$

(1.57

)

 

$

0.12

 

 

 

$

1.18

 

 

$

4.11

 

7 Includes reinstatement premiums not covered by reinstatement premium protection and related commissions.

8 Adjusted operating income excludes net realized and unrealized gains and losses on investments, interest expense, and extraordinary reinstatement premiums and associated commissions. Non-GAAP adjusted EPS excludes net realized and unrealized gains and losses on investments, as well as extraordinary reinstatement premiums and associated commissions.

 

Media Relations Contact: Andy Brimmer / Mahmoud Siddig, 212-355-4449 Joele Frank, Wilkinson Brimmer Katcher

Investor Relations Contact: Rob Luther, 954-595-7272 VP, Corporate Development, Strategy & IR rluther@universalproperty.com

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