Toggle SGML Header (+)


Section 1: 8-K (8-K)

Document


 
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 6, 2018
 
 
 
TIPTREE INC.
(Exact Name of Registrant as Specified in Charter)
 
 
  
 
 
 
 
 
 
Maryland
 
001-33549
 
38-3754322
(State or Other Jurisdiction
of Incorporation)
 
(Commission
File Number)
 
(I.R.S. Employer
Identification No.)
 
 
 
780 Third Avenue, 21st Floor
New York, New York
 
10017
(Address of Principal Executive Offices)
 
(Zip Code)

Registrant’s telephone number, including area code: (212) 446-1400
(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 (see General Instruction A.2. below): 
¨

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))

Indicate by check mark whether the registrant is an emerging growth company as defined in 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 2.02
Results of Operations and Financial Condition.

On August 6, 2018, Tiptree Inc. (the “Company” or “Tiptree”) issued a press release announcing its results of operations for the quarter ended June 30, 2018. A copy of the press release is furnished as Exhibit 99.1 hereto and incorporated herein by reference.

Item 7.01
Regulation FD Disclosure.

Included in the press release furnished as Exhibit 99.1 was an announcement that the board of directors of the Company has declared a cash dividend of $0.035 per share to Tiptree’s stockholders, with a record date of August 20, 2018 and a payment date of August 27, 2018.

On August 6, 2018, the Company posted an investor presentation dated August 2018 on the Investor Resources section of www.tiptreeinc.com. The investor presentation is furnished as Exhibit 99.2 to this Form 8-K and incorporated herein by reference. Tiptree’s website is not intended to function as a hyperlink, and the information contained on such website is not a part of this Form 8-K.

The information in Items 2.02 and 7.01 of this Current Report on Form 8-K, including the information contained in Exhibits 99.1 and 99.2, shall not be deemed “filed” for the 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. Furthermore, the information in Items 2.02 and 7.01 of this Current Report on Form 8-K, including the information contained in Exhibits 99.1 and 99.2, shall not be deemed to be incorporated by reference into the filings of the Company under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

Item 9.01
Financial Statements and Exhibits.

(d) List of Exhibits:

99.1    Tiptree Inc. press release, dated August 6, 2018
99.2    Tiptree Inc. Investor Presentation - August 2018









SIGNATURES
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.
 
 
 
 
 
 
 
TIPTREE INC.
 
 
 
 
Date:
August 6, 2018
By:
/s/ Jonathan Ilany
 
 
 
Name: Jonathan Ilany
 
 
 
Title: Chief Executive Officer



(Back To Top)

Section 2: EX-99.1 (EXHIBIT 99.1)

Exhibit

Exhibit 99.1

394528938_tiptlogoa08.jpg
TIPTREE REPORTS SECOND QUARTER 2018 RESULTS
Revenues of $152.7 million for the quarter, up 9.7% from $139.2 million in the prior year period.

Net income (loss) before non-controlling interests of $0.9 million for the quarter, an increase of $6.2 million from the prior year period, primarily driven by increased income from specialty insurance operations and reduced corporate expenses.

Operating EBITDA(1) of $15.1 million for the quarter, up 5.6% compared to $14.3 million in the prior year period.

Book value per share(2) of $10.74, up 8.8% compared to $9.87 as of June 30, 2017.

Declared a dividend of $0.035 per share to stockholders of record on August 20, 2018 with a payment date of August 27, 2018.

New York, New York - August 6, 2018 - 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 three and six months ended June 30, 2018
Summary Consolidated Statements of Operations
($ in millions, except for per share information)
Three Months Ended June 30,
 
Six Months Ended June 30,
GAAP:
2018
 
2017
 
2018
 
2017
Total revenues
$
152.7

 
$
139.2

 
$
300.8

 
$
285.4

Net income (loss) before non-controlling interests
$
0.9

 
$
(5.3
)
 
$
29.9

 
$
(4.0
)
Net income (loss) attributable to Common Stockholders
$
0.8

 
$
(4.4
)
 
$
24.4

 
$
(3.3
)
Diluted earnings per share
$
0.02

 
$
(0.15
)
 
$
0.73

 
$
(0.12
)
Cash dividends paid per common share
$
0.065

 
$
0.06

 
$
0.065

 
$
0.06

 
 
 
 
 
 
 
 
Non-GAAP: (1)
 
 
 
 
 
 
 
Operating EBITDA
$
15.1

 
$
14.3

 
$
24.0

 
$
26.7

Adjusted EBITDA
$
10.2

 
$
6.8

 
$
15.5

 
$
18.6

Book value per share (2)
$
10.74

 
$
9.87

 
$
10.74

 
$
9.87

_______________________________
(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)
For periods prior to April 10, 2018, book value per share assumed full exchange of the limited partners units of TFP for Common Stock.

Earnings Conference Call
Tiptree will host a conference call on Tuesday, August 7, 2018 at 9:00 a.m. Eastern Time to discuss its second quarter 2018 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 Tuesday, August 7, 2018 at 1:00 p.m. Eastern Time, until midnight Eastern on Tuesday, August 14, 2018. To listen to the replay, please dial 1-844-512-2921 (domestic) or 1-412-317-6671 (international), Passcode: 13681062.


Page 1



Q2’18 Year-To-Date Financial Overview

Insurance:
Gross written premiums were $393.7 million, up 12.0%, driven by growth in credit and other specialty programs.
Net written premiums were $205.0 million, up 11.8%, driven by growth in credit and warranty products.
On March 28, 2018, we expanded our insurance operations into Europe with the creation of Fortegra Europe Insurance Company Limited.

Tiptree Capital:
On February 1, 2018, we sold our senior living operations to Invesque in exchange for a net 16.4 million shares, which was $0.91 accretive to our book value per share, as exchanged, or a 9.1% increase over our December 31, 2017 book value per share, as exchanged.

Corporate:
On March 23, 2018, we initiated an up to $20 million share buy-back plan split evenly between open market and opportunistic large block purchases. As of June 30, 2018, we repurchased 1,372,739 shares at an average price of $6.45.
On April 10, 2018, we completed a corporate reorganization that eliminated Tiptree’s dual class stock structure.
On May 4, 2018, we extended our Fortress credit agreement to September 2020 and up-sized our borrowings under that facility to $75 million while reducing the interest rate by 100 basis points.

Consolidated Results of Operations
Revenues

For the three months ended June 30, 2018, revenues were $152.7 million, which increased $13.5 million, or 9.7%, over prior year period. For the six months ended June 30, 2018, revenues were $300.8 million, which increased $15.3 million, or 5.4%, over prior year period. The increase for both periods was driven by growth in earned premiums and service and administrative fees, partially offset by reduced other income and unrealized losses on investments. Earned premiums were $201.7 million for the six months ended June 30, 2018, up from $176.7 million in the comparable 2017 period. This was consistent with our strategy of growing written premiums to increase investable assets and investment income. The combination of unearned premiums and deferred revenues on the balance sheet grew by $94.7 million or 19.1%, from June 30, 2017 to June 30, 2018 as we continue to grow credit protection and warranty written premiums.

Net Income (Loss) before non-controlling interests

For the three months ended June 30, 2018, net income before non-controlling interests was $0.9 million, compared to a loss of $5.3 million in the prior year period. The increase was driven by increased income from specialty insurance operations and reduced corporate expenses, which was partially offset by unrealized losses on Invesque common shares and lower distributions as we reduced our exposure to asset management related investments.

For the six months ended June 30, 2018, net income before non-controlling interests was $29.9 million compared to a loss of $4.0 million in the 2017 period, an increase of $33.9 million. In addition to the factors that impacted the three month period, the year-to-date increase was driven by $34.5 million of income from discontinued operations including the net gain on sale of Care.

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 accumulated other comprehensive income (“AOCI”) in stockholders equity. For the six months ended June 30, 2018, we incurred $7.2 million of unrealized losses on our Invesque common shares, all of which was the result of mark to market movement from the date of the Care sale (February 1, 2018). During 2017, we made a strategic decision to decrease our overall exposure to CLO subordinated notes, which resulted in deconsolidation and decreased our earnings from CLO distributions and gains on sales of investments when comparing 2018 versus 2017 periods.


Page 2



($ in thousands)
Three Months Ended June 30,

Six Months Ended June 30,

2018

2017

2018

2017
Unrealized and realized gains (losses)(1)
$
(3,829
)

$
(6,866
)

$
(11,534
)

$
(6,166
)
Discontinued operations (Care)(2)
$


$
(2,294
)

$
46,808


$
(3,824
)
Asset management - credit investments
$
(1,135
)

$
2,670


$
(858
)

$
7,838

_______________________________
(1) Excludes Mortgage realized and unrealized gains and losses - Performing and NPLs. Includes $7.2 million of unrealized losses attributable to Invesque shares from the date of the Care sale (February 1, 2018).
(2) Includes pre-tax Gain on sale of Discontinued Operations of $46.2 million.

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.

For the three months ended June 30, 2018, Operating EBITDA was $15.1 million compared to $14.3 million in the prior year period, an increase of $0.8 million, or 5.6%. Operating EBITDA for the six months ended June 30, 2018 was $24.0 million compared to $26.7 million for the 2017 period, a decrease of $2.7 million, or 10.1%. The key drivers of the change in Operating EBITDA were increased income from specialty insurance operations and reduced corporate expenses, which were more than offset by lower distributions on asset management related investments.

Total stockholders’ equity was $400.8 million as of June 30, 2018 compared to $390.7 million as of June 30, 2017. Book value per share for the period ended June 30, 2018 was $10.74, an increase from book value per share, as exchanged, of $9.87 as of June 30, 2017. The key drivers of the period-over-period impact were basic earnings per share of $1.04 over the last four quarters and the purchase of 1.4 million shares at an average 39% discount to book value. Those increases were partially offset by dividends paid of $0.125 per share and officer and director compensation share issuances. Over the past twelve months, Tiptree returned $13.7 million to shareholders through share repurchases and dividends paid.

Results by Segment

Tiptree is a holding company that combines insurance operations with investment management expertise. In addition to our specialty insurance operations, we allocate our capital across our investments in other companies and assets which we refer to as Tiptree Capital. As of June 30, 2018, Tiptree Capital consists of asset management operations, mortgage operations and other investments (including Invesque common shares). As such, we classify our business into three reportable segments– specialty insurance, asset management and mortgage. 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 thousands)
Three Months Ended June 30,
 
Six Months Ended June 30,

2018

2017
 
2018

2017
Specialty Insurance
$
8,731

 
$
(732
)
 
$
10,074


$
4,069

Tiptree Capital:
 
 
 
 



Asset management
(614
)
 
4,529

 
278


10,110

Mortgage
354

 
(1,300
)
 
507


(999
)
Other
(245
)
 
1,226

 
(2,962
)

1,310

Corporate
(6,649
)
 
(8,628
)
 
(13,363
)

(15,357
)
Pre-tax income (loss) from continuing operations
$
1,577

 
$
(4,905
)
 
$
(5,466
)

$
(867
)
Pre-tax income (loss) from discontinued operations (1)
$

 
$
(2,294
)
 
$
46,808


$
(3,824
)
_______________________________
(1)
Includes Care for 2017 and 2018. Includes $46.2 million pre-tax gain on sale of Care in 2018.

Page 3




Operating EBITDA and Invested Capital - Non-GAAP (1) 
($ in thousands)
Three Months Ended June 30,

Six Months Ended June 30,

2018

2017

2018

2017
Specialty Insurance
$
16,180


$
12,762


$
29,500


$
25,020

Tiptree Capital
3,659


8,256


7,007


15,091

Asset management
652


3,330


1,572


6,678

Mortgage
294


2,076


604


2,963

Other (2)
2,713


2,850


4,831


5,450

Corporate
(4,786
)

(6,717
)

(12,556
)

(13,441
)
Total Operating EBITDA
$
15,053


$
14,301


$
23,951


$
26,670


Management evaluates the return on Invested Capital and Total Capital, which are non-GAAP financial measures, when making capital investment decisions. Invested Capital represents its total cash investment, including any re-investment of earnings, and acquisition costs, net of tax. Total Capital represents Invested Capital plus Corporate Debt. Management believes the use of these financial measures provide supplemental information useful to investors as they are frequently used by the financial community to analyze how the Company has allocated capital over-time and provide a basis for determining the return on capital to shareholders.

As of June 30,
($ in thousands)
Invested Capital

Total Capital

2018

2017

2018

2017
Specialty Insurance
$
288,433


$
265,156


$
448,433


$
410,416

Tiptree Capital
163,724


201,121


163,724


201,121

Asset management
2,498


60,503


2,498


60,503

Mortgage
31,217


22,071


31,217


22,071

Other (2)
130,009


118,547


130,009


118,547

Corporate
(14,852
)

(33,121
)

59,178


24,379

Total Tiptree
$
437,305


$
433,156


$
671,335


$
635,916

_______________________________
(1)  
For further information relating to the Company’s Invested Capital, Total Capital and Operating EBITDA, including a reconciliation to GAAP total stockholders equity and 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 & Discontinued Operations, in the Form 10-Q for the quarter ended June 30, 2018.

About Tiptree
Tiptree Inc. (NASDAQ: TIPT) is a holding company that combines insurance operations with investment management expertise. The Company’s principal operating subsidiary is a leading provider of specialty insurance products and related services, including credit protection, warranty, and programs which underwrite niche personal and commercial lines of insurance. The Company also allocates capital across a broad spectrum of investments, which is referred to as Tiptree Capital. Today, Tiptree Capital consists of asset management operations, mortgage operations and other investments. 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.

Page 4



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.

Page 5



Tiptree Inc.
Condensed Consolidated Balance Sheet
($ in thousands, except share data)

As of

June 30, 2018

December 31, 2017
Assets:



Investments:




Available for sale securities, at fair value
$
234,361


$
182,448

Loans, at fair value
233,535


258,173

Equity securities, at fair value
140,132


25,536

Other investments
56,442


59,142

Total investments
664,470


525,299

Cash and cash equivalents
91,490


110,667

Restricted cash
18,148


31,570

Notes and accounts receivable, net
194,971


186,422

Reinsurance receivables
373,145


352,967

Deferred acquisition costs
146,882


147,162

Goodwill
91,562


91,562

Intangible assets, net
56,936


64,017

Other assets
40,329


31,584

Assets held for sale
51,598


448,492

Total assets
$
1,729,531


$
1,989,742





Liabilities and Stockholders’ Equity



Liabilities:



Debt, net
$
366,215


$
346,081

Unearned premiums
526,282


503,446

Policy liabilities and unpaid claims
122,290


112,003

Deferred revenue
63,797


56,745

Reinsurance payable
93,488


90,554

Other liabilities and accrued expenses
110,379


121,321

Liabilities held for sale
46,264


362,818

Total liabilities
$
1,328,715


$
1,592,968





Stockholders’ Equity: (1)



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, 36,643,317 and 35,003,004 shares issued and outstanding, respectively
37


35

Common stock - Class B: $0.001 par value, none and 50,000,000 shares authorized, none and 8,049,029 shares issued and outstanding, respectively


8

Additional paid-in capital
335,749


295,582

Accumulated other comprehensive income (loss), net of tax
(2,399
)

966

Retained earnings
60,265


38,079

Common Stock held by subsidiaries, 0 and 5,197,551 shares, respectively


(34,585
)
Class B common stock held by subsidiaries, none and 8,049,029 shares, respectively


(8
)
Total Tiptree Inc. stockholders’ equity
393,652


300,077

Non-controlling interests - TFP


77,494

Non-controlling interests - Other
7,164


19,203

Total stockholders’ equity
400,816


396,774

Total liabilities and stockholders’ equity
$
1,729,531


$
1,989,742

_______________________________
(1) For information related to changes in the Company’s equity capitalization, see “Note—(16) Stockholders’ Equity” in the Form 10-Q for the quarter ended June 30, 2018.

Page 6



Tiptree Inc.
Condensed Consolidated Statements of Operations
($ in thousands, except share data)

Three Months Ended June 30,

Six Months Ended June 30,

2018

2017

2018

2017
Revenues:







Earned premiums, net
$
100,044


$
87,477


$
201,689


$
176,708

Service and administrative fees
24,891


23,067


49,467


46,843

Ceding commissions
2,242


2,017


4,525


4,288

Net investment income
4,927


3,687


9,132


8,192

Net realized and unrealized gains (losses)
11,472


11,445


18,078


27,657

Other revenue
9,133


11,552


17,890


21,746

Total revenues
152,709


139,245


300,781


285,434

Expenses:







Policy and contract benefits
34,174


29,802


70,800


62,794

Commission expense
62,562


56,546


125,195


113,339

Employee compensation and benefits
27,188


29,035


54,976


58,065

Interest expense
6,655


6,305


12,601


12,383

Depreciation and amortization
2,953


3,471


5,910


7,025

Other expenses
17,600


21,886


36,765


39,505

Total expenses
151,132


147,045


306,247


293,111

Other income:







Income attributable to consolidated CLOs


7,941




16,808

Expenses attributable to consolidated CLOs


5,046




9,998

Net income (loss) attributable to consolidated CLOs


2,895




6,810

Total other income


2,895




6,810

Income (loss) before taxes from continuing operations
1,577


(4,905
)

(5,466
)

(867
)
Less: provision (benefit) for income taxes
701


(1,305
)

(867
)

263

Net income (loss) from continuing operations
876


(3,600
)

(4,599
)

(1,130
)
Discontinued operations:







Income (loss) before taxes from discontinued operations


(2,294
)

624


(3,824
)
Gain on sale of discontinued operations, net




46,184



Less: Provision (benefit) for income taxes


(570
)

12,327


(972
)
Net income (loss) from discontinued operations


(1,724
)

34,481


(2,852
)
Net income (loss) before non-controlling interests
876


(5,324
)

29,882


(3,982
)
Less: net income (loss) attributable to non-controlling interests - TFP
108


(1,045
)

5,500


(837
)
Less: net income (loss) attributable to non-controlling interests - Other
(58
)

164


(4
)

198

Net income (loss) attributable to Common Stockholders
$
826


$
(4,443
)

$
24,386


$
(3,343
)








Net income (loss) per Common Share:







Basic, continuing operations, net
$
0.02


$
(0.11
)

$
(0.11
)

$
(0.05
)
Basic, discontinued operations, net


(0.04
)

0.84


(0.07
)
Basic earnings per share
$
0.02


$
(0.15
)

$
0.73


$
(0.12
)








Diluted, continuing operations, net
0.02


(0.11
)

(0.11
)

(0.05
)
Diluted, discontinued operations, net


(0.04
)

0.84


(0.07
)
Diluted earnings per share
$
0.02


$
(0.15
)

$
0.73


$
(0.12
)








Weighted average number of Common Shares:







Basic
36,593,154


28,832,975


33,245,921


28,630,027

Diluted
37,386,319


28,832,975


33,245,921


28,630,027









Dividends declared per Common Share
$
0.035


$
0.030


$
0.070


$
0.060





Page 7



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 thousands)
Three Months Ended June 30,

Six Months Ended June 30,

2018

2017

2018

2017
Net income (loss) attributable to Common Stockholders
$
826


$
(4,443
)

$
24,386


$
(3,343
)
Add: net (loss) income attributable to noncontrolling interests
50


(881
)

5,496


(639
)
Less: net income from discontinued operations


(1,724
)

34,481


(2,852
)
Income (loss) from continuing operations
$
876


$
(3,600
)

$
(4,599
)

$
(1,130
)
Corporate Debt related interest expense (1)
4,538


2,998


8,390


5,913

Consolidated income tax expense (benefit)
701


(1,305
)

(867
)

263

Depreciation and amortization expense (2)
2,751


3,036


5,460


6,125

Non-cash fair value adjustments (3)


3,174


66


3,687

Non-recurring expenses (4)
1,301




925


(1,736
)
Adjusted EBITDA from continuing operations
$
10,167


$
4,303


$
9,375


$
13,122

Add: Stock-based compensation expense
1,051


1,342


2,284


3,140

Less: Realized and unrealized gain (loss)
(3,829
)

(6,866
)

(11,534
)

(6,166
)
Less: Third party non-controlling interests
(6
)

357


(134
)

486

Operating EBITDA from continuing operations
$
15,053


$
12,154


$
23,327


$
21,942









Income (loss) from discontinued operations
$


$
(1,724
)

$
34,481


$
(2,852
)
Consolidated income tax expense (benefit)


(570
)

12,327


(972
)
Consolidated depreciation and amortization expense


4,726




8,981

Non-cash fair value adjustments (3)




(40,672
)


Non-recurring expenses (4)


36




277

Adjusted EBITDA from discontinued operations
$


$
2,468


$
6,136


$
5,434

Less: Realized and unrealized gain (loss) (5)


$


$
5,512


$

Less: Third party non-controlling interests


$
321


$


$
706

Operating EBITDA from discontinued operations
$


$
2,147


$
624


$
4,728

Total Adjusted EBITDA
$
10,167


$
6,771


$
15,511


$
18,556

Total Operating EBITDA
$
15,053


$
14,301


$
23,951


$
26,670

_______________________________
(1)
Corporate Debt interest expense includes Secured corporate credit agreements, junior subordinated notes and preferred trust securities. Interest expense associated with asset-specific debt in specialty insurance, asset management, mortgage and other operations is not added-back for Adjusted EBITDA and Operating EBITDA.
(2)
Represents total depreciation and amortization expense less purchase accounting amortization related adjustments at the Insurance Company. 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 company increased EBITDA above what the historical basis of accounting would have generated.
(3)
For Reliance, within our mortgage operations, Adjusted EBITDA excludes the impact of changes in contingent earn-outs. For our specialty 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 legal, taxes, banker fees and other costs.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.


Page 8



Non-GAAP Financial Measures — Adjusted EBITDA and Operating EBITDA

The tables below present EBITDA and Adjusted EBITDA by business component.

Three Months Ended June 30, 2018



Tiptree Capital




($ in thousands)
Specialty Insurance

Asset Management

Mortgage

Other

Discontinued Operations(1)

Tiptree Capital

Corporate Expenses

Total
Pre-tax income/(loss) from continuing ops
$
8,731


$
(614
)

$
354


$
(245
)

$


$
(505
)

$
(6,649
)

$
1,577

Pre-tax income/(loss) from discontinued ops















Adjustments:















Corporate Debt related interest expense(1)
3,357

 

 

 

 

 

 
1,181

 
4,538

Depreciation and amortization expenses(2)
2,495




136


58




194


62


2,751

Non-cash fair value adjustments(3)















Non-recurring expenses(4)
1,074






227




227




1,301

Adjusted EBITDA
$
15,657


$
(614
)

$
490


$
40


$


$
(84
)

$
(5,406
)

$
10,167

Add: Stock-based compensation expense
$
627


$


$
(196
)

$


$


$
(196
)

$
620


$
1,051

Less: Realized and unrealized gain (loss)(5)
104


(1,266
)



(2,667
)



(3,933
)



(3,829
)
Less: Third party non-controlling interests






(6
)



(6
)



(6
)
Operating EBITDA
$
16,180


$
652


$
294


$
2,713


$


$
3,659


$
(4,786
)

$
15,053

_______________________________
(1) Includes discontinued operations related to Care. For more information, see “Note—(3) Dispositions, Assets Held for Sale & Discontinued Operations” in the Form 10-Q for the quarter ended June 30, 2018.

Six Months Ended June 30, 2018



Tiptree Capital




($ in thousands)
Specialty Insurance

Asset Management

Mortgage

Other

Discontinued Operations(1)

Tiptree Capital

Corporate Expenses

Total
Pre-tax income/(loss) from continuing ops
$
10,074


$
278


$
507


$
(2,962
)

$


$
(2,177
)

$
(13,363
)

$
(5,466
)
Pre-tax income/(loss) from discontinued ops








46,808


46,808




46,808

Adjustments:















Corporate Debt related interest expense(1)
6,580

 

 

 

 

 

 
1,810

 
8,390

Depreciation and amortization expenses(2)
4,969

 

 
272

 
95

 
 
 
367

 
124

 
5,460

Non-cash fair value adjustments(3)
66








(40,672
)

(40,672
)



(40,606
)
Non-recurring expenses(4)
2,161






1,095




1,095


(2,331
)

925

Adjusted EBITDA
$
23,850


$
278


$
779


$
(1,772
)

$
6,136


$
5,421


$
(13,760
)

$
15,511

Add: Stock-based compensation expense
1,255




(175
)





(175
)

1,204


2,284

Less: Realized and unrealized gain (loss)(5)
(4,395
)

(1,294
)



(5,845
)

5,512


(1,627
)



(6,022
)
Less: Third party non-controlling interests






(134
)



(134
)



(134
)
Operating EBITDA
$
29,500


$
1,572


$
604


$
4,207


$
624


$
7,007


$
(12,556
)

$
23,951

_______________________________
(1) Includes discontinued operations related to Care. For more information, see “Note—(3) Dispositions, Assets Held for Sale & Discontinued Operations” in the Form 10-Q for the quarter ended June 30, 2018.

Three Months Ended June 30, 2017



Tiptree Capital




($ in thousands)
Specialty Insurance

Asset Management

Mortgage

Other

Discontinued Operations(1)

Tiptree Capital

Corporate Expenses

Total
Pre-tax income/(loss) from continuing ops
$
(732
)

$
4,529


$
(1,300
)

$
1,226


$


$
4,455


$
(8,628
)

$
(4,905
)
Pre-tax income/(loss) from discontinued ops








(2,294
)

(2,294
)



(2,294
)
Adjustments:
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Corporate Debt related interest expense(1)
1,726

 

 

 

 

 

 
1,272

 
2,998

Depreciation and amortization expenses(2)
2,762

 

 
136

 
76

 
.
 
4,938

 
62

 
7,762

Non-cash fair value adjustments(3)
113




3,061






3,061




3,174

Non-recurring expenses(4)








36


36




36

Adjusted EBITDA
$
3,869


$
4,529


$
1,897


$
1,302


$
2,468


$
10,196


$
(7,294
)

$
6,771

Add: Stock-based compensation expense
586




179






179


577


1,342

Less: Realized and unrealized gain (loss)(5)
(8,307
)

1,199




242




1,441




(6,866
)
Less: Third party non-controlling interests






357


321


678




678

Operating EBITDA
$
12,762


$
3,330


$
2,076


$
703


$
2,147


$
8,256


$
(6,717
)

$
14,301

_______________________________
(1) Includes discontinued operations related to Care. For more information, see “Note—(3) Dispositions, Assets Held for Sale & Discontinued Operations” in the Form 10-Q for the quarter ended June 30, 2018.

Page 9




Six Months Ended June 30, 2017



Tiptree Capital




($ in thousands)
Specialty Insurance

Asset Management

Mortgage

Other

Discontinued Operations(1)

Tiptree Capital

Corporate Expenses

Total
Pre-tax income/(loss) from continuing ops
$
4,069


$
10,110


$
(999
)

$
1,310


$


$
10,421


$
(15,357
)

$
(867
)
Pre-tax income/(loss) from discontinued ops








(3,824
)

(3,824
)



(3,824
)
Adjustments:















Corporate Debt related interest expense(1)
3,361

 

 

 

 

 

 
2,552

 
5,913

Depreciation and amortization expenses(2)
5,591

 

 
274

 
136

 
8,981

 
9,391

 
124

 
15,106

Non-cash fair value adjustments(3)
226




3,461






3,461




3,687

Non-recurring expenses(4)








277


277


(1,736
)

(1,459
)
Adjusted EBITDA
$
13,247


$
10,110


$
2,736


$
1,446


$
5,434


$
19,726


$
(14,417
)

$
18,556

Add: Stock-based compensation expense
1,937




227






227


976


3,140

Less: Realized and unrealized gain (loss)(5)
(9,836
)

3,432




238




3,670




(6,166
)
Less: Third party non-controlling interests






486


706


1,192




1,192

Operating EBITDA
$
25,020


$
6,678


$
2,963


$
722


$
4,728


$
15,091


$
(13,441
)

$
26,670

_______________________________
(1) Includes discontinued operations related to Care. For more information, see “Note—(3) Dispositions, Assets Held for Sale & Discontinued Operations” in the Form 10-Q for the quarter ended June 30, 2018.

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 thousands, except per share information)
As of June 30,

2018

2017
Total stockholders’ equity
$
400,816

 
$
390,672

Less non-controlling interest - other
7,164

 
24,867

Total stockholders’ equity, net of non-controlling interests - other
$
393,652

 
$
365,805

Total Common shares outstanding
36,643

 
29,017

Total Class B shares outstanding

 
8,049

Total shares outstanding
36,643

 
37,066

Book value per share(1)
$
10.74

 
$
9.87

_______________________________
(1) For periods prior to April 10, 2018, book value per share assumes full exchange of the limited partners units of TFP for Common Stock.

Non-GAAP Financial Measures — Invested & Total Capital

Invested Capital represents its total cash investment, including any re-investment of earnings, and acquisition costs, net of tax. Total Capital represents Invested Capital plus Corporate Debt.

($ in thousands)
As of June 30,
 
2018

2017
Total stockholders’ equity
$
400,816

 
$
390,672

Less non-controlling interest - other
7,164

 
24,867

Total stockholders’ equity, net of non-controlling interests - other
$
393,652

 
$
365,805

Plus Specialty Insurance accumulated depreciation and amortization, net of tax
39,491

 
32,262

Plus Care accumulated depreciation and amortization - discontinued operations, net of tax and NCI

 
26,538

Plus acquisition costs
4,161

 
8,552

Invested Capital
$
437,304

 
$
433,157

Plus corporate debt
$
234,030

 
$
202,760

Total Capital
$
671,334

 
$
635,917


Page 10

(Back To Top)

Section 3: EX-99.2 (EXHIBIT 99.2)

ex9922q18investorpresent
Exhibit 99.2 NASDAQ: TIPT INVESTOR PRESENTATION - SECOND QUARTER 2018 August 2018 Financial information for six months ended June 30, 2018


 
DISCLAIMERS LIMITATIONS ON THE USE OF INFORMATION This presentation has been prepared by Tiptree Inc. and its consolidated subsidiaries (“Tiptree", "the Company" or "we”) solely for informational purposes, and not for the purpose of updating any information or forecast with respect to Tiptree, its subsidiaries or any of its affiliates or any other purpose. Tiptree reports a non-controlling interest in TFP that is not owned by Tiptree and certain other operating subsidiaries that are not wholly owned. Unless otherwise noted, all information is of Tiptree on a consolidated basis before non-controlling interest. Neither Tiptree nor any of its affiliates makes any representation or warranty, express or implied, as to the accuracy or completeness of the information contained herein and no such party shall have any liability for such information. These materials and any related oral statements are not all-inclusive and shall not be construed as legal, tax, investment or any other advice. You should consult your own counsel, accountant or business advisors. Performance information is historical and is not indicative of, nor does it guarantee future results. There can be no assurance that similar performance may be experienced in the future. SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS This document contains "forward-looking statements" which involve risks, uncertainties and contingencies, many of which are beyond Tiptree's control, which may cause actual results, performance, or achievements to differ materially from anticipated results, performance, or achievements. All statements contained herein 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 Tiptree'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 Tiptree’s Annual Report on Form 10-K, and as described in the Tiptree’s other filings with the SEC. 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. MARKET AND INDUSTRY DATA Certain market data and industry data used in this presentation were obtained from reports of governmental agencies and industry publications and surveys. We believe the data from third-party sources to be reliable based upon our management’s knowledge of the industry, but have not independently verified such data and as such, make no guarantees as to its accuracy, completeness or timeliness. NOT AN OFFER OR A SOLICIATION This document does not constitute an offer or invitation for the sale or purchase of securities or to engage in any other transaction with Tiptree, its subsidiaries or its affiliates. The information in this document is not targeted at the residents of any particular country or jurisdiction and is not intended for distribution to, or use by, any person in any jurisdiction or country where such distribution or use would be contrary to local law or regulation. NON-GAAP MEASURES In this document, we sometimes use financial measures derived from consolidated financial data but not presented in our financial statements prepared in accordance with U.S. generally accepted accounting principles (GAAP). Certain of these data are considered “non-GAAP financial measures” under the SEC rules. These non-GAAP financial measures supplement our GAAP disclosures and should not be considered an alternative to the GAAP measure. Management's reasons for using these non-GAAP financial measures and the reconciliations to their most directly comparable GAAP financial measures are posted in the Appendix. 1


 
OVERVIEW & FINANCIAL RESULTS Key Highlights


 
OVERVIEW First Half Financials Key highlights Revenue Specialty Insurance: þ $300.8 million Specialty Insurance executing on strategic initiatives • Gross written premiums year-to-date were $393.7 million, up 12.0%, driven by growth in vs. prior year 5.4% credit and other specialty programs • Net written premiums were $205.0 million, up 11.8%, driven by growth in credit and Net income1 warranty products million $29.9 Tiptree Capital: vs. prior year loss of $4.0 þ Sold our senior living operations to Invesque for consideration of 16.4m shares, which was million $0.91 accretive to our Q4'17 BVPS, or a $46.2m pre-tax gain Operating EBITDA2 Corporate: $24.0 million þ Eliminated dual class stock structure þ vs. prior year of $26.7 million Amended our existing credit facility • Increased borrowing capacity to $75m and reduced interest expense by 100bps Book Value • Well positioned to use recent liquidity for acquisitions and investments 2 per share þ Repurchased 1,372,739 shares for $11.1 million in the first half of 2018 $10.74 þ Increased the quarterly dividend by 16.7% to $0.035 per share 8.8% vs. 6/30/17 1 Net income before non-controlling interests which Includes continuing and discontinued operations. 2 For a reconciliation of Non-GAAP metrics Operating EBITDA and book value per share to GAAP financials, see the Appendix. 3


 
FINANCIAL RESULTS ($ in millions, except per share information) Consolidated financial metrics Key drivers Q2'17 Q2'18 Positives: Q2'17 Q2'18 YTD YTD • Accounting pre-tax gain of $46.2 million from sale of Care Total Revenues $ 139.2 $ 152.7 $ 285.4 $ 300.8 • Growth in insurance underwriting profitability Net income (loss) before NCI (5.3) 0.9 (4.0) 29.9 • Dividend income from investments (primarily Invesque) Diluted EPS (0.15) 0.02 (0.12) 0.73 Negatives: Operating EBITDA1 14.3 15.1 26.7 24.0 • Year-to-date unrealized investment losses (incl. Invesque) Adjusted EBITDA1 6.8 10.2 18.6 15.5 • Reduced earnings in asset management segment as a result Book Value per share1 $ 9.87 $ 10.74 of decreased investments in credit related assets Year-to-date 2018 Operating EBITDA to Pre-tax Income Bridge $46.2 $(5.9) $(8.4) $41.4 $(11.5) $(2.3) $(0.7) $24.0 Operating Care Gain Depreciation & Corporate Unrealized & Stock based Transaction Total pre-tax EBITDA (DiscOps) Amortization Interest Expense Realized Losses2 compensation Costs/other Income3 1 See the appendix for a reconciliation of Non-GAAP metrics including Invested Capital, Total Capital, Operating EBITDA, Adjusted EBITDA and Book Value per share. 2 Excludes Care Gain, and excludes Mortgage realized and unrealized gains and losses - Performing and NPLs. 3 Includes continuing and discontinued operations. 4


 
TIPTREE CAPITAL ALLOCATION ($ in millions, except per share information) Q2'18 Operating EBITDA Total Q2'17 Q2'18 1 Business Lines Capital LTM LTM Key drivers Operating EBITDA return on total capital of 8.9%, Specialty Insurance $ 448.4 $ 50.1 $ 57.8 down from prior year primarily driven by: - Underwriting 34.1 42.6 • Insurance Operating EBITDA of $57.8m, up Adds-back $160m Corporate Debt w/LTM 15.4% from growth across all product lines - Investments interest expense of $11.2m 16.0 15.2 • Continued efforts to reduce corporate expenses, down 23.9% Tiptree Capital $ 163.7 $ 40.2 $ 21.7 - Asset mgmt fees, net ($1.6B AUM) 1.3 4.7 2.4 More than offset by: - Invesque / Seniors Housing 103.0 10.0 9.1 • Reduced distributions in asset management - Other investments 59.4 25.5 10.2 from decreased investments in credit related assets 2 • Declines in mortgage origination and margins Corporate $ 59.2 $ (28.0) $ (21.3) as interest rates rise - Corporate expenses (20.9) (15.7) • Delayed reinvestment of ~$60m of cash Adds-back $75m Corporate - Corporate incentive comp expense Debt w/LTM interest (7.1) (5.6) available for investments and acquisitions expense of $4.1m Total Tiptree $ 671.3 $ 62.3 $ 58.2 - Total shares outstanding 37.1 36.6 1 See the appendix for a reconciliation of Non-GAAP metrics including Total Capital and Operating EBITDA. 2 Cash at HoldCo does not include available liquidity at subsidiaries. 5


 
SPECIALTY INSURANCE


 
PERFORMANCE HIGHLIGHTS ($ in millions) Financial metrics Q2'18 highlights & outlook Q2'17 Q2'18 Q2'17 Q2'18 YTD YTD 1 Continuing to expand product offerings and geographic Gross Written Premiums $186.0 $193.5 $351.4 $393.7 markets with a focus on growth in written premiums Pre-tax income $(0.7) $8.7 $4.1 $10.1 • $590m of unearned premiums and deferred revenue, 1 Operating EBITDA $12.8 $16.2 $25.0 $29.5 representing 19.1% year-over-year growth Net portfolio income1 $(4.1) $5.2 $(0.3) $4.8 • Net written premiums grew year-to-date by $21.7m, or Combined ratio1 92.4% 92.3% 93.6% 93.1% 11.8% driven by premium growth in credit and warranty Unearned premiums & products Deferred revenue $495.4 $590.1 Insurance products 2 Produced stable underwriting results which were partially offset by investments in growth initiatives Operating Net Written Underwriting 1 • Underwriting margin of $60.9m, up $7.1m driven by EBITDA Premiums Margin1 strong performance in our credit protection products $205.0 $60.9 $29.5 • Other expenses increased by $2.9m (transaction expenses $183.3 13.6 $53.8 4.4 Services/other $25.0 13.6 29.5 6.4 Programs & premium taxes) as we make additional investments in 9.2 5.3 27.4 4.7 our warranty and specialty programs products Investments 13.5 Warranty 9.5 12.2 161.9 3 Insurance 142.3 Year-to-date investment income of 9.2 million partially offset 20.3 36.6 Credit underwriting 15.5 31.6 protection by $7.6 million of unrealized losses on equity investments and consolidated loan funds Q2'17 Q2'18 Q2'17 Q2'18 Q2'17 Q2'18 YTD YTD YTD YTD YTD YTD 1 See the appendix for a reconciliation of Non-GAAP measures underwriting margin, combined ratio, Operating EBITDA and Investment Net portfolio income to GAAP financials. 7


 
INVESTMENT PORTFOLIO ($ in millions) Net Investments1 Investment approach $410.1 We actively manage our investment portfolio to achieve a balance of: 17.0 Other 14.6 • Cash and liquid securities to cover near-term claims obligations $346.2 36.9 4.0 Real Estate $307.1 24.4 • Enhanced risk-adjusted returns through selective alternative 74.21 39.2 86.1 Equities investments with a focus on longer-term higher yielding assets 33.3 Loans2 75.6 21.1 84.6 Cash & cash equivalents3 12.9 55.2 Highlights Available for sale Securities 234.4 • Net investment portfolio grew $63.9 million, or 18.4% from Q2'17 165.0 147.8 • Floating rate investments performed well in rising interest rate environment • Under-performing equity investments led to both a decrease in Q2'16 Q2'17 Q2'18 Year-to-date financials our dividend income and an unrealized loss year-to-date $ 5.9 $ (10.0) $ (7.6) Unrealized gains (losses) 3.1 5.0 5.6 Realized gains (losses) 5.1 8.2 9.1 Net investment income (1.0) (3.5) (2.4) Interest expense $ 13.1 $ (0.3) $ 4.7 Net Portfolio Income 8.9% (0.2)% 2.4% Average Annualized Yield4 $5.0 $(10.1) $(3.2) Equity realized and unrealized gains (losses) 1 See the appendix for a reconciliation of Non-GAAP measures Net Investments and Net Portfolio Income to GAAP financials. 2 Net of non-recourse asset based financing. 3 Cash and cash equivalents, plus restricted cash, net of due to/due from brokers. See appendix for reconciliation to GAAP financials. 4 Average Annualized Yield % represents the ratio of annualized net investment income, realized and unrealized gains (losses) less investment portfolio interest expense to the average of the prior five quarters total investments less investment portfolio debt plus cash. 8


 
TIPTREE CAPITAL


 
PERFORMANCE HIGHLIGHTS ($ in millions) Invested Capital1 Recent developments & outlook 3 + Corporate • Completed sale of Care in Q1 to Invesque for 16.4m shares $210.1 $201.1 Cash of $62m 15.2 15.8 • Liquidity from recent sales available for growth opportunities $163.7 74.6 102.7 Other3 21.5 130.0 Care4 22.1 Mortgage Q2'18 financial highlights 98.8 60.5 31.2 CLOs & credit Asset Management: AUM remains stable at $1.6B 2.5 investments • In late 2017 and Q1'18, we extended and re-priced three CLOs Q4'15 Q2'17 Q2'18 • Declines in pre-tax income driven by reduced incentive fees on $1.9 $1.6 $1.6 Fee-earning older vintage CLOs AUM ($B)2 Return on Invested Capital1 Credit Investments: Distributions and investment gains decreased as Pre-tax income Operating EBITDA we actively reduced our exposure to certain credit investments Q2'17 Q2'18 Q2'17 Q2'18 YTD YTD YTD YTD Asset mgmt fees, net $2.3 $1.1 $2.3 $1.1 Mortgage: Margin compression from recent interest rate increases had Credit investments 7.8 (0.8) 4.4 0.4 a negative impact on year-over-year Operating EBITDA Mortgage (1.0) 0.5 3.0 0.6 Other 1.3 (3.0) 0.7 4.2 Other: increase in Operating EBITDA driven by five months of Invesque 4 Care/DiscOps (3.8) 46.8 4.7 0.6 dividends Total $6.6 $44.6 $15.1 $6.9 • Unrealized losses on shares drove pre-tax losses 1 See the appendix for a reconciliation of Operating EBITDA and Invested Capital to GAAP financials. 2 AUM is estimated and unaudited. Consists of NOPCB for CLOs, excludes Credit Opportunities Fund as it was not earning third party fees as of 6/30/2018. 3 16.4m of Invesque common shares, 2.9m shares held in the insurance company investment portfolio. On balance sheet at fair value less restriction discount - $125.2 million, $103.2 million in Tiptree Capital. 4 Includes discontinued operations related to Care. For more information, see “—FN 4 Dispositions, Assets Held for Sale and Discontinued Operations.” 10


 
OUTLOOK ($ in millions) First Half Highlights Book value per share1 ü Insurance company continues to execute on its growth initiatives $10.74 $9.87 ü Finalized sale of Care to Invesque ü Simplified corporate structure Looking ahead Q2'17 Q2'18 • Continue to focus on growth in specialty insurance operations Operating EBITDA1 – Growth in gross and net written premiums – Actively seeking acquisition opportunities $26.7 $24.0 • Expect growth and improvements in long-term, net investment income • Intend to use increased liquidity to improve financial performance and shareholder returns Q2'17 YTD Q2'18 YTD 1 See the appendix for a reconciliation of Book value per share and Operating EBITDA to GAAP financials. 11


 
APPENDIX


 
NON-GAAP RECONCILIATIONS Operating EBITDA and Adjusted EBITDA 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 it is 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. The Company defines EBITDA as GAAP net income of the Company adjusted to add consolidated interest expense, consolidated income taxes and consolidated depreciation and amortization expense as presented in its financial statements. Adjusted EBITDA represents EBITDA adjusted to (i) subtract interest expense on asset-specific debt incurred in the ordinary course of its subsidiaries’ business operations, (ii) adjust for the effect of purchase accounting, (iii) adjust for certain 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. Book value per share 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. Invested Capital and Total Capital Management evaluates the return on Invested Capital and Total Capital, which are non-GAAP financial measures, when making capital investment decisions. Invested Capital represents its total equity investment, including any re-investment of earnings, and acquisition costs, net of tax. Total Capital represents Invested Capital plus Corporate Debt. Management believes the use of these financial measures provide supplemental information useful to investors as they are frequently used by the financial community to analyze how the Company has allocated capital over-time and provide a basis for determining the return on capital to shareholders. Management uses both of these measures when making capital investment decisions, including reinvesting cash, and evaluating the relative performance of its businesses and investments. Insurance - Underwriting Margin We generally limit the underwriting risk we assume through the use of both reinsurance (e.g., quota share and excess of loss) and retrospective commission agreements with our partners (e.g., commissions paid adjust based on the actual underlying losses incurred), which manage and mitigate our risk. Period-over-period comparisons of revenues are often impacted by the PORCs and clients’ choice as to whether to retain risk, specifically with respect to the relationship between service and administration expenses and ceding commissions, both components of revenue, and the offsetting policy and contract benefits and commissions paid to our partners and reinsurers. Generally, when losses are incurred, the risk which is retained by our partners and reinsurers is reflected in a reduction in commissions paid. In order to better explain to investors the net financial impact of the risk retained by the Company of the insurance contracts written and the impact on profitability, we use the Non-GAAP metric - Underwriting Margin. Insurance - Combined Ratio Expressed as a percentage, the combined ratio represents the relationship of policy and contract benefits, commission expense (net of ceding commissions), employee compensation and benefits, and other expenses to net earned premiums, service and administrative fees, and other income. Investors use this ratio to evaluate our ability to profitably underwrite the risks we assume over time and manage our operating costs. As such, we believe that presenting underwriting margin and the combined ratio provides useful information to investors and aligns more closely to how management measures the underwriting performance of the business. Insurance Investment Portfolio - Net Investments and Net Portfolio Income In managing our investment portfolio we analyze net investments and net portfolio income, which are non-GAAP measures. Our presentation of net investments equals total investments plus cash and cash equivalents minus asset based financing of investments. Our presentation of net portfolio income equals net investment income plus realized and unrealized gains and losses and minus interest expense associated with asset based financing of investments. Net investments and net portfolio income are used to calculate average annualized yield, which management uses to analyze the profitability of our investment portfolio. Management believes this information is useful since it allows investors to evaluate the performance of our investment portfolio based on the capital at risk and on a non-consolidated basis. Our calculation of net investments and net portfolio income may differ from similarly titled non-GAAP financial measures used by other companies. Net investments and net portfolio income are not measures of financial performance or liquidity under GAAP and should not be considered a substitute for total investments or net investment income. 13


 
NON-GAAP RECONCILIATIONS - EBITDA, ADJUSTED & OPERATING EBITDA ($ in thousands) Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Net income (loss) attributable to Common Stockholders $ 826 $ (4,443) $ 24,386 $ (3,343) Add: net (loss) income attributable to noncontrolling interests 50 (881) 5,496 (639) Less: net income from discontinued operations — (1,724) 34,481 (2,852) Income (loss) from continuing operations $ 876 $ (3,600) $ (4,599) $ (1,130) Corporate Debt related interest expense (1) 4,538 2,998 8,390 5,913 Consolidated income tax expense (benefit) 701 (1,305) (867) 263 Depreciation and amortization expense (2) 2,751 3,035 5,460 6,125 Non-cash fair value adjustments (3) — 3,174 66 3,687 Non-recurring expenses (4) 1,301 — 925 (1,736) Adjusted EBITDA from continuing operations $ 10,167 $ 4,303 $ 9,375 $ 13,122 Add: Stock-based compensation expense 1,051 1,342 2,284 3,140 Less: Realized and unrealized gain (loss) (3,829) (6,866) (11,534) (6,166) Less: Third party non-controlling interests (6) 357 (134) 486 Operating EBITDA from continuing operations $ 15,053 $ 12,154 $ 23,327 $ 21,942 Income (loss) from discontinued operations $ — $ (1,724) $ 34,481 $ (2,852) Consolidated income tax expense (benefit) — (570) 12,327 (972) Consolidated depreciation and amortization expense — 4,726 — 8,981 Non-cash fair value adjustments (3) — — (40,672) — Non-recurring expenses (4) — 36 — 277 Adjusted EBITDA from discontinued operations $ — $ 2,468 $ 6,136 $ 5,434 Less: Realized and unrealized gain (loss) (5) — $ — $ 5,512 $ — Less: Third party non-controlling interests — $ 321 $ — $ 706 Operating EBITDA from discontinued operations $ — $ 2,147 $ 624 $ 4,728 Total Adjusted EBITDA $ 10,167 $ 6,771 $ 15,511 $ 18,556 Total Operating EBITDA $ 15,053 $ 14,301 $ 23,951 $ 26,670 (1) Corporate Debt interest expense includes Secured corporate credit agreements, junior subordinated notes and preferred trust securities. Interest expense associated with asset- specific debt in specialty insurance, asset management, mortgage and other operations is not added-back for Adjusted EBITDA and Operating EBITDA. (2) Represents total depreciation and amortization expense less purchase accounting amortization related adjustments at the Insurance Company. 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 company increased EBITDA above what the historical basis of accounting would have generated. (3) For Reliance, within our mortgage operations, Adjusted EBITDA excludes the impact of changes in contingent earn-outs. For our specialty 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 legal, taxes, banker fees and other costs.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. 14


 
NON-GAAP RECONCILIATIONS - ADJUSTED AND OPERATING EBITDA Three Months Ended June 30, 2018 Tiptree Capital Specialty Asset Discontinued Corporate ($ in thousands) Insurance Management Mortgage Other Operations(1) Tiptree Capital Expenses Total Pre-tax income/(loss) from continuing ops $ 8,731 $ (614) $ 354 $ (245) $ — $ (505) $ (6,649) $ 1,577 Pre-tax income/(loss) from discontinued ops — — — — — — — — Adjustments: Corporate Debt related interest expense(1) 3,357 — — — — — 1,181 4,538 Depreciation and amortization expenses(2) 2,495 — 136 58 194 62 2,751 Non-cash fair value adjustments(3) — — — — — — — — Non-recurring expenses(4) 1,074 — — 227 — 227 — 1,301 Adjusted EBITDA $ 15,657 $ (614) $ 490 $ 40 $ — $ (84) $ (5,406) $ 10,167 Add: Stock-based compensation expense $ 627 $ — $ (196) $ — $ — $ (196) $ 620 $ 1,051 Less: Realized and unrealized gain (loss)(5) 104 (1,266) — (2,667) — (3,933) — (3,829) Less: Third party non-controlling interests — — — (6) — (6) — (6) Operating EBITDA $ 16,180 $ 652 $ 294 $ 2,713 $ — $ 3,659 $ (4,786) $ 15,053 Three Months Ended June 30, 2017 Tiptree Capital Specialty Asset Discontinued Corporate ($ in thousands) Insurance Management Mortgage Other Operations(1) Tiptree Capital Expenses Total Pre-tax income/(loss) from continuing ops $ (732) $ 4,529 $ (1,300) $ 1,226 $ — $ 4,455 $ (8,628) $ (4,905) Pre-tax income/(loss) from discontinued ops — — — — (2,294) (2,294) — (2,294) Adjustments: — Corporate Debt related interest expense(1) 1,726 — — — — — 1,272 2,998 Depreciation and amortization expenses(2) 2,762 — 136 76 . 4,938 62 7,762 Non-cash fair value adjustments(3) 113 — 3,061 — — 3,061 — 3,174 Non-recurring expenses(4) — — — — 36 36 — 36 Adjusted EBITDA $ 3,869 $ 4,529 $ 1,897 $ 1,302 $ 2,468 $ 10,196 $ (7,294) $ 6,771 Add: Stock-based compensation expense 586 — 179 — — 179 577 1,342 Less: Realized and unrealized gain (loss)(5) (8,307) 1,199 — 242 — 1,441 — (6,866) Less: Third party non-controlling interests — — — 357 321 678 — 678 Operating EBITDA $ 12,762 $ 3,330 $ 2,076 $ 703 $ 2,147 $ 8,256 $ (6,717) $ 14,301 (1) Includes discontinued operations related to Care. For more information, see “Note—(3) Dispositions, Assets Held for Sale & Discontinued Operations.” 15


 
NON-GAAP RECONCILIATIONS - ADJUSTED AND OPERATING EBITDA Six Months Ended June 30, 2018 Tiptree Capital Specialty Asset Discontinued Corporate ($ in thousands) Insurance Management Mortgage Other Operations(1) Tiptree Capital Expenses Total Pre-tax income/(loss) from continuing ops $ 10,074 $ 278 $ 507 $ (2,962) $ — $ (2,177) $ (13,363) $ (5,466) Pre-tax income/(loss) from discontinued ops — — — — 46,808 46,808 — 46,808 Adjustments: Corporate Debt related interest expense(1) 6,580 — — — — — 1,810 8,390 Depreciation and amortization expenses(2) 4,969 — 272 95 367 124 5,460 Non-cash fair value adjustments(3) 66 — — — (40,672) (40,672) — (40,606) Non-recurring expenses(4) 2,161 — — 1,095 — 1,095 (2,331) 925 Adjusted EBITDA $ 23,850 $ 278 $ 779 $ (1,772) $ 6,136 $ 5,421 $ (13,760) $ 15,511 Add: Stock-based compensation expense 1,255 — (175) — — (175) 1,204 2,284 Less: Realized and unrealized gain (loss)(5) (4,395) (1,294) — (5,845) 5,512 (1,627) — (6,022) Less: Third party non-controlling interests — — — (134) — (134) — (134) Operating EBITDA $ 29,500 $ 1,572 $ 604 $ 4,207 $ 624 $ 7,007 $ (12,556) $ 23,951 Six Months Ended June 30, 2017 Tiptree Capital Specialty Asset Discontinued Corporate ($ in thousands) Insurance Management Mortgage Other Operations(1) Tiptree Capital Expenses Total Pre-tax income/(loss) from continuing ops $ 4,069 $ 10,110 $ (999) $ 1,310 $ — $ 10,421 $ (15,357) $ (867) Pre-tax income/(loss) from discontinued ops — — — — (3,824) (3,824) — (3,824) Adjustments: — Corporate Debt related interest expense(1) 3,361 — — — — — 2,552 5,913 Depreciation and amortization expenses(2) 5,591 — 274 136 8,981 9,391 124 15,106 Non-cash fair value adjustments(3) 226 — 3,461 — — 3,461 — 3,687 Non-recurring expenses(4) — — — — 277 277 (1,736) (1,459) Adjusted EBITDA $ 13,247 $ 10,110 $ 2,736 $ 1,446 $ 5,434 $ 19,726 $ (14,417) $ 18,556 Add: Stock-based compensation expense 1,937 — 227 — — 227 976 3,140 Less: Realized and unrealized gain (loss)(5) (9,836) 3,432 — 238 — 3,670 — (6,166) Less: Third party non-controlling interests — — — 486 706 1,192 — 1,192 Operating EBITDA $ 25,020 $ 6,678 $ 2,963 $ 722 $ 4,728 $ 15,091 $ (13,441) $ 26,670 (1) Includes discontinued operations related to Care. For more information, see “Note—(3) Dispositions, Assets Held for Sale & Discontinued Operations.” 16


 
NON-GAAP RECONCILIATIONS - ADJUSTED AND OPERATING EBITDA Last Twelve Months Ended June 30, 2018 Tiptree Capital Specialty Asset Discontinued Corporate ($ in thousands) insurance Management Mortgage Other Operations(1) Tiptree Capital Expenses Total Pre-tax income/(loss) from continuing ops $ 11,409 $ 4,414 $ 3,596 $ (271) $ — $ 7,739 $ (27,076) $ (7,928) Pre-tax income/(loss) from discontinued ops — — — — 44,410 44,410 — 44,410 Adjustments: Corporate Debt related interest expense(1) 11,245 — — — — — 4,069 15,314 Depreciation and amortization expenses(2) 10,745 — 546 205 6,664 7,415 248 18,408 Non-cash fair value adjustments(3) 348 — (422) — (40,672) (41,094) — (40,746) Non-recurring expenses(4) 3,818 — — 1,774 881 2,655 (986) 5,487 Adjusted EBITDA $ 37,565 $ 4,414 $ 3,720 $ 1,708 $ 11,283 $ 21,125 $ (23,745) $ 34,945 Add: Stock-based compensation expense 3,251 — 51 — — 51 2,400 5,702 Less: Realized and unrealized gain (loss)(5) (16,975) (859) — (6,126) 5,512 (1,473) — (18,448) Less: Third party non-controlling interests — — — 230 709 939 — 939 Operating EBITDA $ 57,791 $ 5,273 $ 3,771 $ 7,604 $ 5,062 $ 21,710 $ (21,345) $ 58,156 Last Twelve Months Ended June 30, 2017 Tiptree Capital Specialty Asset Discontinued Corporate ($ in thousands) insurance Management Mortgage Other Operations(1) Tiptree Capital Expenses Total Pre-tax income/(loss) from continuing ops $ 25,905 $ 27,177 $ 3,363 $ 4,005 $ — $ 34,545 $ (33,212) $ 27,238 Pre-tax income/(loss) from discontinued ops — — — — (4,634) (4,634) — (4,634) Adjustments: Corporate Debt related interest expense(1) 6,477 — — 95 — 95 5,162 11,734 Depreciation and amortization expenses(2) 9,829 — 542 321 15,607 16,470 248 26,547 Non-cash fair value adjustments(3) 226 — 4,738 — — 4,738 — 4,964 Non-recurring expenses(4) — — — — 605 605 (1,736) (1,131) Adjusted EBITDA $ 42,437 $ 27,177 $ 8,643 $ 4,421 $ 11,578 $ 51,819 $ (29,538) $ 64,718 Add: Stock-based compensation expense 2,798 — 346 — — 346 1,552 4,696 Less: Realized and unrealized gain (loss)(5) (4,831) 8,493 — 309 51 8,853 — 4,022 Less: Third party non-controlling interests — — — 1,567 1,544 3,111 — 3,111 Operating EBITDA $ 50,066 $ 18,684 $ 8,989 $ 2,545 $ 9,983 $ 40,201 $ (27,986) $ 62,281 (1) Includes discontinued operations related to Care. For more information, see “Note—(3) Dispositions, Assets Held for Sale & Discontinued Operations.” 17


 
NON-GAAP RECONCILIATIONS - BVPS, INVESTED AND TOTAL CAPITAL Management uses Book value per share, which is a non-GAAP financial measure. Prior to April 10, 2018, book value per share assumes full exchange of the limited partners units of TFP for Common Stock. Management believes the use of this financial measure 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. Tiptree’s book value per share was $10.74 as of June 30, 2018 compared with book value per share, as exchanged, of $9.87 as of June 30, 2017. Total stockholders’ equity, net of other non-controlling interests for the Company was $393.7 million as of June 30, 2018, which comprised total stockholders’ equity of $400.8 million adjusted for $19.2 million attributable to non-controlling interest at certain operating subsidiaries that are not wholly owned by the Company, such as Luxury and management interests in subsidiaries. Total stockholders’ equity, net of other non-controlling interests for the Company was $365.8 million as of June 30, 2017, which comprised total stockholders’ equity of $390.7 million adjusted for $24.9 million attributable to non-controlling interest at subsidiaries that are not wholly owned by the Company. ($ in thousands, except per share information) As of June 30, 2018 2017 Total stockholders’ equity $ 400,816 $ 390,672 Less non-controlling interest - other 7,164 24,867 Total stockholders’ equity, net of non-controlling interests - other $ 393,652 $ 365,805 Total Common shares outstanding 36,643 29,017 Total Class B shares outstanding — 8,049 Total shares outstanding 36,643 37,066 Book value per share(1) $ 10.74 $ 9.87 (1) For periods prior to April 10, 2018, book value per share assumes full exchange of the limited partners units of TFP for Common Stock. Management evaluates the return on Invested Capital and Total Capital, which are non-GAAP financial measures, when making capital investment decisions. Invested capital represents its total cash investment, including any re-investment of earnings, and acquisition costs, net of tax. Total Capital represents Invested Capital plus Corporate Debt. Management believes the use of these financial measures provide supplemental information useful to investors as they are frequently used by the financial community to analyze how the Company has allocated capital over-time and provide a basis for determining the return on capital to shareholders. Management uses both of these measures when making capital investment decisions, including reinvesting distributable cash flow, and evaluating the relative performance of its businesses and investments. ($ in thousands) As of June 30, 2018 2017 Total stockholders’ equity $ 400,816 $ 390,672 Less non-controlling interest - other 7,164 24,867 Total stockholders’ equity, net of non-controlling interests - other $ 393,652 $ 365,805 Plus Specialty Insurance accumulated depreciation and amortization, net of tax(1) 39,491 32,262 Plus Care accumulated depreciation and amortization - discontinued operations, net of tax and NCI(1) — 26,538 Plus acquisition costs(2) 4,161 8,552 Invested Capital $ 437,304 $ 433,157 Plus corporate debt(3) $ 234,030 $ 202,760 Total Capital $ 671,334 $ 635,917 (1) As of June 30, 2018, add-back of $59.8 million of accumulated intangible amortization at Fortegra. On as exchanged basis, assumes 35% tax rate on total accumulated amortization before 2018 and 21% post 2018. (2) Add-back acquisition costs associated with acquiring Fortegra, Care senior living properties and Reliance net of Care NCI (86.6% ownership) and 35% tax rate. (3) Corporate debt consists of Secured Corporate Credit Agreements, plus preferred trust securities. 18


 
NON-GAAP RECONCILIATIONS - SPECIALTY INSURANCE The following table provides a reconciliation between underwriting margin and pre-tax income. We generally limit the underwriting risk we assume through the use of both reinsurance (e.g., quota share and excess of loss) and retrospective commission agreements with our partners (e.g., commissions paid adjust based on the actual underlying losses incurred), which manage and mitigate our risk. Period-over-period comparisons of revenues are often impacted by the PORCs and clients’ choice as to whether to retain risk, specifically with respect to the relationship between service and administration expenses and ceding commissions, both components of revenue, and the offsetting policy and contract benefits and commissions paid to our partners and reinsurers. Generally, when losses are incurred, the risk which is retained by our partners and reinsurers is reflected in a reduction in commissions paid. In order to better explain to investors the net financial impact of the risk retained by the Company of the insurance contracts written and the impact on profitability, we use the Non-GAAP metric - Underwriting Margin. Expressed as a percentage, the combined ratio represents the relationship of policy and contract benefits, commission expense (net of ceding commissions), employee compensation and benefits, and other expenses to net earned premiums, service and administrative fees, and other income. Investors use this ratio to evaluate our ability to profitably underwrite the risks we assume over time and manage our operating costs. As such, we believe that presenting underwriting margin and the combined ratio provides useful information to investors and aligns more closely to how management measures the underwriting performance of the business. ($ in thousands) Three Months Ended June 30, Six Months Ended June 30, Revenues: 2018 2017 2018 2017 Net earned premiums $ 100,044 $ 87,477 $ 201,689 $ 176,708 Service and administrative fees 24,891 23,067 49,467 46,843 Ceding commissions 2,242 2,017 4,525 4,288 Other income 590 985 1,286 2,050 Underwriting Revenues - Non-GAAP $ 127,767 $ 113,546 $ 256,967 $ 229,889 Less underwriting expenses: Policy and contract benefits 34,174 29,802 70,800 62,794 Commission expense 62,562 56,546 125,195 113,339 Underwriting Margin - Non-GAAP $ 31,031 $ 27,198 $ 60,972 $ 53,756 Less operating expenses: Employee compensation and benefits 11,055 9,718 22,004 20,727 Other expenses 10,292 9,050 21,484 18,562 Combined Ratio 92.3% 92.4% 93.1% 93.6% Plus investment revenues: Net investment income 4,927 3,687 9,132 8,192 Net realized and unrealized gains 1,417 (6,062) (1,990) (5,064) Less other expenses: Interest expense 4,600 3,590 9,133 7,035 Depreciation and amortization expenses 2,697 3,197 5,419 6,491 Pre-tax income (loss) $ 8,731 $ (732) $ 10,074 $ 4,069 19


 
NON-GAAP RECONCILIATIONS - SPECIALTY INSURANCE The investment portfolio consists of assets contributed by Tiptree, cash generated from operations, and from insurance premiums written. The investment portfolio of our regulated insurance companies, captive reinsurance company and warranty business are subject to different regulatory considerations, including with respect to types of assets, concentration limits, affiliate transactions and the use of leverage. Our investment strategy is designed to achieve attractive risk-adjusted returns across select asset classes, sectors and geographies while maintaining adequate liquidity to meet our claims payment obligations. In managing our investment portfolio we analyze net investments and net portfolio income, which are non-GAAP measures. Our presentation of net investments equals total investments plus cash and cash equivalents minus asset based financing of investments. Our presentation of net portfolio income equals net investment income plus realized and unrealized gains and losses and minus interest expense associated with asset based financing of investments. Net investments and net portfolio income are used to calculate average annualized yield, which management uses to analyze the profitability of our investment portfolio. Management believes this information is useful since it allows investors to evaluate the performance of our investment portfolio based on the capital at risk and on a non-consolidated basis. Our calculation of net investments and net portfolio income may differ from similarly titled non-GAAP financial measures used by other companies. Net investments and net portfolio income are not measures of financial performance or liquidity under GAAP and should not be considered a substitute for total investments or net investment income. ($ in thousands) Six Months Ended June 30, 2018 2017 2016 Total Investments $ 482,492 $ 431,416 $ 359,338 Investment portfolio debt (1) (93,471) (140,430) (65,119) Cash and cash equivalents 19,472 38,279 9,922 Restricted cash (2) 8,420 24,425 5,976 Receivable due from brokers (3) — 4,544 — Liability due to brokers (3) (6,840) (12,070) (3,042) Net investments - Non-GAAP $ 410,073 $ 346,164 $ 307,075 ($ in thousands) Six Months Ended June 30, 2018 2017 2016 Net investment income $ 9,132 $ 8,192 $ 5,102 Realized gains (losses) 5,617 4,963 3,131 Unrealized gains (losses) (7,607) (10,027) 5,891 Interest expense (2,376) (3,465) (1,011) Net portfolio income (loss) $ 4,766 $ (337) $ 13,113 Average Annualized Yield % (4) 2.4% (0.2)% 8.9% (1) Consists of asset-based financing on loans, at fair value including certain credit investments and NPLs, net of deferred financing costs, see Note 11 - Debt, net for further details. (2) Restricted cash available to invest within certain credit investment funds which are consolidated under GAAP. (3) Receivable due from and Liability due to brokers for unsettled trades within certain credit investment funds which are consolidated under GAAP. (4) Average Annualized Yield % represents the ratio of annualized net investment income, realized and unrealized gains (losses) less investment portfolio interest expense to the average of the prior two quarters (five quarters for trailing twelve months) total investments less investment portfolio debt plus cash. 20


 
(Back To Top)