Assurant 2010 Annual Report Download - page 135

ASSURANT-2010 Annual Report4
(3) Assurant uses book value per diluted share, excluding AOCI, as an
important measure of the Company’s stockholder value. Book value per
diluted share excluding AOCI equals total stockholders’ equity excluding
AOCI divided by diluted shares outstanding. The Company believes book
value per diluted share excluding AOCI provides investors a valuable
measure of stockholder value because it excludes the effect of unrealized
gains (losses) on investments, which tend to be highly variable and other
accumulated comprehensive income items. The comparable GAAP measure
would be book value per diluted share, defi ned as total stockholders’ equity
divided by diluted shares outstanding. Book value per diluted share was
$45.81 and $41.03 as of Dec. 31, 2010 and 2009, respectively, as shown in
the reconciliation table.
2010 2009
Book value per diluted share
(excluding AOCI) $43.08 $40.47
Changes due to effect
of including AOCI $2.73 $0.56
Book value per diluted share $45.81 $41.03
2010 2009 2008 2007
(dollars in millions, net of tax)
Assurant Solutions $103.2 $120.1 $112.2 $143.9
Assurant Specialty Property 424.3 406.0 405.2 379.2
Assurant Health 54.0 (30.2) 120.3 151.7
Assurant Employee Benefi ts 63.5 42.2 70.6 87.0
Corporate and other (52.3) (48.3) (50.4) (49.4)
Amortization of deferred gain on disposal
of businesses 6.8 14.6 19.1 21.5
Interest expense (39.4) (39.5) (39.6) (39.7)
Net operating income 560.1 464.9 637.4 694.2
Adjustments:
Net realized gains (losses) on investments 31.5 (34.8) (278.6) (40.5)
Tax benefi t realized from the sale of an inactive subsidiary - - 89.0 -
Change in tax valuation allowance (6.0) - - -
Legal settlement and related expenses - 83.5 - -
Goodwill impairments (306.4) (83.0) - -
Net income $279.2 $430.6 $447.8 $653.7
(1) Assurant uses operating return on equity (“ROE”) as an important
measure of the Company’s operating performance. Operating ROE equals
full-year net operating income for the periods presented divided by
average stockholders’ equity for the year, excluding accumulated other
comprehensive income (loss) (“AOCI”). The Company believes Operating
ROE provides investors a valuable measure of the performance of the
Company’s ongoing business, because it excludes the effect of net realized
gains (losses) on investments that tend to be highly variable and those
events that are unusual and/or unlikely to recur. The comparable GAAP
measure would be GAAP ROE, defi ned as full-year net income divided by
average stockholders’ equity for the year. GAAP ROE for the year ended
Dec. 31, 2010 was 5.8 percent, as shown in the following reconciliation
table.
Non-GAAP Financial Measures
2010
Operating return on average equity
(excluding AOCI) 12.1%
Net realized gains
on investments 0.7%
Change in tax valuation allowance -0.1%
Goodwill impairment -6.6%
Change due to effect
of including AOCI -0.3%
GAAP return
on average equity 5.8%
(2) Assurant uses net operating income as an important measure of the
Company’s operating performance. As shown in the following table, net
operating income equals net income excluding net realized gains (losses)
on investments and other unusual and/or infrequent items. The Company
believes net operating income provides investors a valuable measure of the
performance of the Company’s ongoing business, because it excludes the
effect of net realized gains (losses) on investments that tend to be highly
variable and those events that are unusual and/or unlikely to recur.