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Section 1: 10-Q (10-Q)

Document

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
(Mark One)
 
x
Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the Quarterly period ended June 30, 2019
OR
o
Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period from            to            
Commission File Number: 001-33549
Tiptree Inc.
(Exact name of Registrant as Specified in Its Charter)
Maryland
 
38-3754322
(State or Other Jurisdiction of
 
(IRS Employer
Incorporation of Organization)
 
Identification No.)
 
 
 
 
 
 
299 Park Avenue, 13th Floor, New York, New York
 
10171
(Address of Principal Executive Offices)
 
(Zip Code)
Registrant’s Telephone Number, Including Area Code: (212) 446-1400
 
Former Address: 780 Third Avenue, 21st Floor, New York, New York, 10017
 
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock, par value $0.001 per share
TIPT
Nasdaq Capital Market
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes   x No ¨ 
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    
Yes   x     No   ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer ¨                    Accelerated filer x
Non-accelerated filer ¨                    Smaller reporting company ¨
Emerging growth company ¨
If an emerging 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. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.)    Yes  ¨    No  x
As of August 1, 2019, there were 34,552,301 shares, par value $0.001, of the registrant’s Common Stock outstanding.



Tiptree Inc.
Quarterly Report on Form 10-Q
June 30, 2019

Table of Contents
ITEM
 
Page Number
 
Item 1. Financial Statements (Unaudited)
 
 
 
 
 
 
 
 
 
 
 
(5) Investments
 
 
 
 
 
 
 
 
 
(14) Other Assets and Other Liabilities and Accrued Expenses
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 



PART I. FINANCIAL INFORMATION
Forward-Looking Statements

Except for the historical information included and incorporated by reference in this Quarterly Report on Form 10-Q, the information included and incorporated by reference herein are “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. Forward-looking statements provide our current expectations or forecasts of future events and are not statements of historical fact. These forward-looking statements include information about possible or assumed future events, including, among other things, discussion and analysis of our future financial condition, results of operations and our strategic plans and objectives. When we use words such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “seek,” “may,” “might,” “plan,” “project,” “should,” “target,” “will,” or similar expressions, we intend to identify forward-looking statements.

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 forecasted 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 our Annual Report on Form 10-K for the fiscal year ended December 31, 2018 and in our other public filings with the SEC.
 
The factors described herein 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 applicable law, we undertake no obligation to update any forward-looking statements.

Market and Industry Data

Certain market data and industry data included in this Quarterly Report on Form 10-Q 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.

Note to Reader

In reading this Quarterly Report on Form 10-Q, references to:
“A.M. Best” means A.M. Best Company, Inc.
“Care” means Care Investment Trust LLC.
“CLOs” means collateralized loan obligations.
“Common Stock” means Class A common stock $0.001 par value for periods prior to June 7, 2018 and thereafter the common stock $0.001 par value.
“Corvid Peak” means collectively, Corvid Peak Holdings, L.P., Corvid Peak Capital Management, LLC, Corvid Peak GP Holdings, LLC and Corvid Peak Holdings GP, LLC., formerly known as “Tricadia”.
“EBITDA” means earnings before interest, taxes, depreciation and amortization.
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
“Fortress” means Fortress Credit Corp., as administrative agent, collateral agent and lead arranger, and affiliates of Fortress that are lenders under the Credit Agreement among the Company, Fortress and the lenders party thereto.
“Fortegra” means Fortegra Financial Corporation.
“GAAP” means U.S. generally accepted accounting principles.
“Invesque” means Invesque Inc.
“Luxury” means Luxury Mortgage Corp.
“NAIC” means the National Association of Insurance Commissioners.
“NPL” means nonperforming residential real estate mortgage loans.
“Operating Company” means Tiptree Operating Company, LLC.
“Reliance” means Reliance First Capital, LLC.
“REO” means real estate owned.
“SEC” means the U.S. Securities and Exchange Commission.
“Securities Act” means the Securities Act of 1933, as amended.

F- 1


“Tax Act” means Public Law no. 115-97, commonly referred to as the Tax Cuts and Jobs Act.
“TFP” means Tiptree Financial Partners, L.P.
“Tiptree”, the “Company”, “we”, “its”, “us” and “our” means, unless otherwise indicated by the context, Tiptree Inc. and its consolidated subsidiaries.
“Transition Services Agreement” means the Amended and Restated Transition Services Agreement between Corvid Peak and Tiptree Inc., effective as of January 1, 2019.
“Tricadia” means, collectively, Tricadia Holdings, L.P., Tricadia Capital Management, LLC, Tricadia Holdings GP, LLC, Tricadia Holdings and Tricadia GP Holdings LLC.

F- 2

TIPTREE INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets (Unaudited)
(in thousands, except share data)

Item 1. Financial Statements (Unaudited)
 
As of
 
June 30, 2019
 
December 31, 2018
Assets:
 
 
 
Investments:
 
 
 
Available for sale securities, at fair value
$
269,054

 
$
283,563

Loans, at fair value
92,053

 
215,383

Equity securities
154,578

 
122,979

Other investments
74,257

 
75,002

Total investments
589,942

 
696,927

Cash and cash equivalents
175,835

 
86,003

Restricted cash
13,531

 
10,521

Notes and accounts receivable, net
233,393

 
223,105

Reinsurance receivables
427,415

 
420,351

Deferred acquisition costs
192,683

 
170,063

Goodwill
91,562

 
91,562

Intangible assets, net
48,084

 
52,121

Other assets
70,420

 
46,034

Assets held for sale
77,501

 
68,231

Total assets
$
1,920,366

 
$
1,864,918


 
 
 
Liabilities and Stockholders’ Equity
 
 
 
Liabilities:
 
 
 
Debt, net
$
296,558

 
$
354,083

Unearned premiums
646,109

 
599,444

Policy liabilities and unpaid claims
128,690

 
131,611

Deferred revenue
80,101

 
75,754

Reinsurance payable
123,671

 
117,597

Other liabilities and accrued expenses
166,067

 
124,190

Liabilities held for sale
72,132

 
62,980

Total liabilities
$
1,513,328

 
$
1,465,659


 
 
 
Stockholders’ Equity:
 
 
 
Preferred stock: $0.001 par value, 100,000,000 shares authorized, none issued or outstanding
$

 
$

Common Stock: $0.001 par value, 200,000,000 shares authorized, 34,540,432 and 35,870,348 shares issued and outstanding, respectively
35

 
36

Additional paid-in capital
324,321

 
331,892

Accumulated other comprehensive income (loss), net of tax
1,389

 
(2,058
)
Retained earnings
70,340

 
57,231

Total Tiptree Inc. stockholders’ equity
396,085

 
387,101

Non-controlling interests - Other
10,953

 
12,158

Total stockholders’ equity
407,038

 
399,259

Total liabilities and stockholders’ equity
$
1,920,366

 
$
1,864,918













See accompanying notes to condensed consolidated financial statements.

F- 3

TIPTREE INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations (Unaudited)
(in thousands, except share data)


 
Three Months Ended June 30,
 
Six Months Ended 
 June 30,
 
2019
 
2018
 
2019
 
2018
Revenues:

 

 
 
 
 
Earned premiums, net
$
116,576

 
$
100,044

 
$
235,549

 
$
201,689

Service and administrative fees
26,728

 
24,891

 
52,623

 
49,467

Ceding commissions
3,048

 
2,242

 
5,552

 
4,525

Net investment income
3,428

 
4,927

 
7,729

 
9,132

Net realized and unrealized gains (losses)
24,875

 
12,317

 
45,026

 
19,701

Other revenue
16,417

 
8,288

 
28,496

 
16,267

Total revenues
191,072

 
152,709

 
374,975

 
300,781

Expenses:

 

 
 
 
 
Policy and contract benefits
39,422

 
34,174

 
80,263

 
70,800

Commission expense
72,737

 
62,562

 
147,640

 
125,195

Employee compensation and benefits
30,969

 
27,188

 
60,122

 
54,976

Interest expense
6,532

 
6,655

 
13,452

 
12,601

Depreciation and amortization
3,291

 
2,953

 
6,385

 
5,910

Other expenses
22,416

 
17,600

 
46,253

 
36,765

Total expenses
175,367

 
151,132

 
354,115

 
306,247

Income (loss) before taxes from continuing operations
15,705

 
1,577

 
20,860

 
(5,466
)
Less: provision (benefit) for income taxes
3,501

 
701

 
4,355

 
(867
)
Net income (loss) from continuing operations
12,204

 
876

 
16,505

 
(4,599
)
Discontinued operations:

 

 
 
 
 
Income (loss) before taxes from discontinued operations

 

 

 
624

Gain on sale of discontinued operations

 

 

 
46,184

Less: Provision (benefit) for income taxes

 

 

 
12,327

Net income (loss) from discontinued operations

 

 

 
34,481

Net income (loss) before non-controlling interests
12,204

 
876

 
16,505

 
29,882

Less: net income (loss) attributable to non-controlling interests - TFP

 
108

 

 
5,500

Less: net income (loss) attributable to non-controlling interests - Other
458

 
(58
)
 
834

 
(4
)
Net income (loss) attributable to Common Stockholders
$
11,746

 
$
826

 
$
15,671

 
$
24,386

 

 

 
 
 
 
Net income (loss) per Common Share:

 

 
 
 
 
Basic, continuing operations, net
$
0.33

 
$
0.02

 
$
0.44

 
$
(0.11
)
Basic, discontinued operations, net

 

 

 
0.84

Basic earnings per share
$
0.33

 
$
0.02

 
$
0.44

 
$
0.73

 

 

 
 
 
 
Diluted, continuing operations, net
0.32

 
0.02

 
0.43

 
(0.11
)
Diluted, discontinued operations, net

 

 

 
0.84

Diluted earnings per share
$
0.32

 
$
0.02

 
$
0.43

 
$
0.73

 

 

 
 
 
 
Weighted average number of Common Shares:
 
 
 
 
 
 
 
Basic
34,527,230

 
36,593,154

 
34,599,739

 
33,245,921

Diluted
34,527,230

 
37,386,319

 
34,599,739

 
33,245,921

 
 
 
 
 
 
 
 
Dividends declared per Common Share
$
0.040

 
$
0.035

 
$
0.080

 
$
0.070










See accompanying notes to condensed consolidated financial statements.

F- 4

TIPTREE INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited)
(in thousands)



 
Three Months Ended June 30,
 
Six Months Ended 
 June 30,
 
2019
 
2018
 
2019
 
2018
Net income (loss) before non-controlling interests
$
12,204

 
$
876

 
$
16,505

 
$
29,882

 
 
 
 
 
 
 
 
Other comprehensive income (loss), net of tax:
 
 
 
 
 
 
 
Unrealized gains (losses) on available-for-sale securities:
 
 
 
 
 
 
 
Unrealized holding gains (losses) arising during the period
2,531

 
(752
)
 
5,659

 
(3,045
)
Related tax (expense) benefit
(561
)
 
174

 
(1,274
)
 
678

Reclassification of (gains) losses included in net income
(1,046
)
 
(4
)
 
(1,041
)
 
523

Related tax expense (benefit)
222

 
7

 
221

 
(105
)
Unrealized gains (losses) on available-for-sale securities, net of tax
1,146

 
(575
)
 
3,565

 
(1,949
)
 
 
 
 
 
 
 
 
Interest rate swaps (cash flow hedges):
 
 
 
 
 
 
 
Unrealized gains (losses) on interest rate swaps

 

 

 
1,111

Related tax (expense) benefit

 

 

 
(276
)
Reclassification of (gains) losses included in net income (1)

 

 

 
(3,845
)
Related tax expense (benefit)

 

 

 
936

Unrealized (losses) gains on interest rate swaps from cash flow hedges, net of tax

 

 

 
(2,074
)
 
 
 
 
 
 
 
 
Other comprehensive income (loss), net of tax
1,146

 
(575
)
 
3,565

 
(4,023
)
Comprehensive income (loss)
13,350

 
301

 
20,070

 
25,859

Less: Comprehensive income (loss) attributable to non-controlling interests - TFP

 
108

 

 
4,937

Less: Comprehensive income (loss) attributable to non-controlling interests - Other
466

 
(58
)
 
853

 
(440
)
Comprehensive income (loss) attributable to Common Stockholders
$
12,884

 
$
251

 
$
19,217

 
$
21,362


(1) 
Deconsolidated as part of the sale of Care. See Note (3) Dispositions, Assets Held for Sale & Discontinued Operations.























See accompanying notes to condensed consolidated financial statements.

F- 5

TIPTREE INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Changes in Stockholders’ Equity (Unaudited)
(in thousands, except shares)

The statements below represent the stockholders’ equity for the six months and three months ended June 30, 2019.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Common Stock
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of shares
 
Par value
 
Additional paid in capital
 
Accumulated other comprehensive income (loss)
 
Retained earnings
 
Total stockholders’ equity to Tiptree Inc.
 
Non-controlling interests - Other
 
Total stockholders' equity
Balance at December 31, 2018
35,870,348

 
$
36

 
$
331,892

 
$
(2,058
)
 
$
57,231

 
$
387,101

 
$
12,158

 
$
399,259

Adoption of accounting standard (1)

 

 

 
(99
)
 
99

 

 

 

Amortization of share-based incentive compensation

 

 
1,533

 

 

 
1,533

 
1,313

 
2,846

Vesting of share-based incentive compensation (2)
142,814

 

 
(20
)
 

 

 
(20
)
 
(2,236
)
 
(2,256
)
Shares purchased under stock purchase plan
(1,472,730
)
 
(1
)
 
(9,084
)
 

 

 
(9,085
)
 

 
(9,085
)
Non-controlling interest contributions

 

 

 

 

 

 
50

 
50

Non-controlling interest distributions

 

 

 

 

 

 
(1,185
)
 
(1,185
)
Dividends declared

 

 

 

 
(2,661
)
 
(2,661
)
 

 
(2,661
)
Other comprehensive income, net of tax

 

 

 
3,546

 

 
3,546

 
19

 
3,565

Net income

 

 

 

 
15,671

 
15,671

 
834

 
16,505

Balance at June 30, 2019
34,540,432

 
$
35

 
$
324,321

 
$
1,389

 
$
70,340

 
$
396,085

 
$
10,953

 
$
407,038

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance at March 31, 2019
34,505,781

 
$
35

 
$
323,334

 
$
251

 
$
60,015

 
$
383,635

 
$
11,020

 
$
394,655

Amortization of share-based incentive compensation

 

 
863

 

 

 
863

 
652

 
1,515

Vesting of share-based incentive compensation (2)
34,651

 

 
124

 

 

 
124

 

 
124

Non-controlling interest distributions

 

 

 

 

 

 
(1,185
)
 
(1,185
)
Dividends declared

 

 

 

 
(1,421
)
 
(1,421
)
 

 
(1,421
)
Other comprehensive income, net of tax

 

 

 
1,138

 

 
1,138

 
8

 
1,146

Net income

 

 

 

 
11,746

 
11,746

 
458

 
12,204

Balance at June 30, 2019
34,540,432

 
$
35

 
$
324,321

 
$
1,389

 
$
70,340

 
$
396,085

 
$
10,953

 
$
407,038


(1) 
Amounts reclassified due to adoption of ASU 2018-02. See Note (2) Summary of Significant Accounting Policies.
(2) 
Includes subsidiary RSUs exchanged for Tiptree Common Stock. See Note (18) Stock Based Compensation.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 














See accompanying notes to condensed consolidated financial statements.

F- 6

TIPTREE INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Changes in Stockholders’ Equity (Unaudited)
(in thousands, except shares)

The statements below represent the stockholders’ equity for the six months and three months ended June 30, 2018.
 
Number of Shares
 
Par Value
 
Additional paid in capital
 
Accumulated
other
comprehensive
income (loss)
 
Retained
earnings
 
Shares held by subsidiaries
 
Total stockholders’ equity to Tiptree Inc.
 
Non-controlling
interests - TFP
 
Non-controlling
interests - Other
 
Total stockholders' equity
 
Common Stock
 
Class B
 
Common Stock
 
Class B
 
 
 
 
Common Stock
 
Common Stock Amount
 
Class B Shares
 
Class B Amount
 
 
 
 
Balance at December 31, 2017
35,003,004

 
8,049,029

 
$
35

 
$
8

 
$
295,582

 
$
966

 
$
38,079

 
(5,197,551
)
 
$
(34,585
)
 
(8,049,029
)
 
$
(8
)
 
$
300,077

 
$
77,494

 
$
19,203

 
$
396,774

Amortization of share-based incentive compensation

 

 

 

 
1,204

 

 

 

 

 

 

 
1,204

 

 
1,080

 
2,284

Vesting of share-based incentive compensation

 

 

 

 
(1,041
)
 

 

 
161,574

 
1,050

 

 

 
9

 

 

 
9

Shares purchased under stock purchase plan
(1,372,739
)
 

 
(1
)
 

 
(8,857
)
 

 

 

 

 

 

 
(8,858
)
 

 

 
(8,858
)
Reorganization merger (1)
8,049,029

 
(8,049,029
)
 
8

 
(8
)
 
82,523

 
(341
)
 

 

 

 
8,049,029

 
8

 
82,190

 
(82,190
)
 

 

Cancellation of treasury shares
(5,035,977
)
 

 
(5
)
 

 
(33,530
)
 

 

 
5,035,977

 
33,535

 

 

 

 

 

 

Non-controlling interest contributions

 

 

 

 

 

 

 

 

 

 

 

 

 
1,418

 
1,418

Non-controlling interest distributions

 

 

 

 

 

 

 

 

 

 

 

 
(241
)
 

 
(241
)
Net changes in non-controlling interest

 

 

 

 
(132
)
 

 

 

 

 

 

 
(132
)
 

 
(14,097
)
 
(14,229
)
Dividends declared

 

 

 

 

 

 
(2,200
)
 

 

 

 

 
(2,200
)
 

 

 
(2,200
)
Other comprehensive income, net of tax

 

 

 

 

 
(3,024
)
 

 

 

 

 

 
(3,024
)
 
(563
)
 
(436
)
 
(4,023
)
Net income

 

 

 

 

 

 
24,386

 

 

 

 

 
24,386

 
5,500

 
(4
)
 
29,882

Balance at June 30, 2018
36,643,317

 

 
$
37

 
$

 
$
335,749

 
$
(2,399
)
 
$
60,265

 

 
$

 

 
$

 
$
393,652

 
$

 
$
7,164

 
$
400,816

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance at March 31, 2018
35,003,004

 
8,049,029

 
35

 
8

 
294,678

 
(1,483
)
 
60,741

 
(5,080,943
)
 
(33,823
)
 
(8,049,029
)
 
(8
)
 
320,148

 
82,082

 
5,430

 
407,660

Amortization of share-based incentive compensation

 

 

 

 
619

 

 

 

 

 

 

 
619

 

 
432

 
1,051

Vesting of share-based incentive compensation

 

 

 

 
(38
)
 

 

 
15,601

 
101

 

 

 
63

 

 

 
63

Shares purchased under stock purchase plan
(1,372,739
)
 

 
(1
)
 

 
(8,857
)
 

 

 

 

 

 

 
(8,858
)
 

 

 
(8,858
)
Shares purchased under stock purchase plan and canceled

 

 

 

 

 

 

 
29,365

 
187

 

 

 
187

 

 

 
187

Reorganization merger (1)
8,049,029

 
(8,049,029
)
 
8

 
(8
)
 
82,523

 
(341
)
 

 

 

 
8,049,029

 
8

 
82,190

 
(82,190
)
 

 

Cancellation of treasury shares
(5,035,977
)
 

 
(5
)
 

 
(33,530
)
 

 

 
5,035,977

 
33,535

 

 

 

 

 

 

Non-controlling interest contributions

 

 

 

 

 

 

 

 

 

 

 

 

 
1,418

 
1,418

Net changes in non-controlling interest

 

 

 

 
354

 

 

 

 

 

 

 
354

 

 
(58
)
 
296

Dividends declared

 

 

 

 

 

 
(1,302
)
 

 

 

 

 
(1,302
)
 

 

 
(1,302
)
Other comprehensive income, net of tax

 

 

 

 

 
(575
)
 

 

 

 

 

 
(575
)
 

 

 
(575
)
Net income

 

 

 

 

 

 
826

 

 

 

 

 
826

 
108

 
(58
)
 
876

Balance at June 30, 2018
36,643,317

 

 
$
37

 
$

 
$
335,749

 
$
(2,399
)
 
$
60,265

 

 
$

 

 
$

 
$
393,652

 
$

 
$
7,164

 
$
400,816


(1) 
Includes the exchange of 424,399 units of TFP for 1,187,468 shares of Common Stock.
See accompanying notes to condensed consolidated financial statements.

F- 7

TIPTREE INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows (Unaudited)
(in thousands)


 
Six months ended June 30,
 
2019
 
2018
Operating Activities:
 
 
 
Net income (loss) attributable to Common Stockholders
$
15,671

 
$
24,386

Net income (loss) attributable to non-controlling interests - TFP

 
5,500

Net income (loss) attributable to non-controlling interests - Other
834

 
(4
)
Net income (loss)
16,505

 
29,882

Adjustments to reconcile net income to net cash provided by (used in) operating activities
 
 
 
Net realized and unrealized (gains) losses
(45,026
)
 
(19,701
)
Net (gain) on sale of businesses
(7,598
)
 
(46,184
)
Non cash compensation expense
2,998

 
2,284

Amortization/accretion of premiums and discounts
508

 
430

Depreciation and amortization expense
6,385

 
5,911

Bad debt expense
57

 
126

Amortization of deferred financing costs
392

 
523

Loss on extinguishment of debt
1,241

 
428

Deferred tax expense (benefit)
3,943

 
11,460

Changes in operating assets and liabilities:
 
 
 
Mortgage loans originated for sale
(807,184
)
 
(730,657
)
Proceeds from the sale of mortgage loans originated for sale
816,933

 
778,671

(Increase) decrease in notes and accounts receivable
(2,574
)
 
(8,994
)
(Increase) decrease in reinsurance receivables
(7,064
)
 
(20,178
)
(Increase) decrease in deferred acquisition costs
(22,620
)
 
280

(Increase) decrease in other assets
9,041

 
(17,468
)
Increase (decrease) in unearned premiums
46,665

 
22,836

Increase (decrease) in policy liabilities and unpaid claims
(2,921
)
 
10,287

Increase (decrease) in deferred revenue
4,347

 
7,052

Increase (decrease) in reinsurance payable
6,074

 
2,934

Increase (decrease) in other liabilities and accrued expenses
(18,261
)
 
(19,759
)
Net cash provided by (used in) operating activities
1,841

 
10,163

 
 
 
 
Investing Activities:
 
 
 
Purchases of investments
(146,773
)
 
(182,886
)
Proceeds from sales and maturities of investments
292,713

 
122,511

Proceeds from the sale of real estate
6,201

 
9,384

Purchases of fixed assets
(6,035
)
 
(2,032
)
Proceeds from the sale of businesses
18,079

 
3,561

Proceeds from notes receivable
15,902

 
14,923

Issuance of notes receivable
(23,826
)
 
(15,040
)
Net cash provided by (used in) investing activities
156,261

 
(49,579
)
 
 
 
 
Financing Activities:
 
 
 
Dividends paid
(2,661
)
 
(2,200
)
Non-controlling interest contributions
50

 
1,418

Non-controlling interest distributions
(1,185
)
 
(241
)
Payment of debt issuance costs
(79
)
 
(657
)
Proceeds from borrowings and mortgage notes payable
874,999

 
786,705

Principal paydowns of borrowings and mortgage notes payable
(926,572
)
 
(776,031
)
Repurchases of Common Stock
(9,085
)
 
(8,858
)
Net cash provided by (used in) financing activities
(64,533
)
 
136

Net increase (decrease) in cash, cash equivalents and restricted cash
93,569

 
(39,280
)
Cash, cash equivalents and restricted cash – beginning of period
96,524

 
142,237

Cash, cash equivalents and restricted cash – beginning of period - held for sale
2,860

 
10,533

Cash, cash equivalents and restricted cash – end of period (1)
192,953

 
113,490

Less: Reclassification of cash to assets held for sale
3,587

 
3,852

Cash, cash equivalents and restricted cash– end of period
$
189,366

 
$
109,638

 
 
 
 
Supplemental Schedule of Non-Cash Investing and Financing Activities:
 
 
 
Right-of-use asset obtained in exchange for lease liability
$
33,558

 
$

Acquired real estate properties through, or in lieu of, foreclosure of the related loan
$
2,596

 
$
5,100

Equity securities acquired through the sale of a subsidiary and asset sales
$

 
$
134,083

Acquisition of non-controlling interest
$

 
$
82,190

Cancellation of treasury shares
$

 
$
33,535

 
 
 
 
 
As of
Reconciliation of cash, cash equivalents and restricted cash shown in the statement of cash flows
June 30, 2019
 
December 31, 2018
Cash and cash equivalents
$
175,835

 
$
86,003

Restricted cash
13,531

 
10,521

Total cash, cash equivalents and restricted cash shown in the statement of cash flows
$
189,366

 
$
96,524

(1) 
Includes cash in assets held for sale
See accompanying notes to condensed consolidated financial statements.

F- 8

TIPTREE INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (Unaudited)
June 30, 2019
(in thousands, except share data)



(1) Organization

Tiptree Inc. (together with its consolidated subsidiaries, collectively, Tiptree, the Company, or we) is a Maryland Corporation that was incorporated on March 19, 2007. Tiptree’s Common Stock trades on the Nasdaq Capital Market under the symbol “TIPT”. Tiptree is a holding company that combines specialty insurance operations with investment management capabilities. We allocate our capital across our insurance operations and other investments. We classify our business into one reportable segment: Specialty Insurance. We refer to our non-insurance operations, assets and other investments, which is comprised of our non-reportable segments and other business activities, as Tiptree Capital.

In this report “Common Stock” means Class A common stock $0.001 par value for periods prior to June 7, 2018 and thereafter the common stock $0.001 par value.

(2) Summary of Significant Accounting Policies

Basis of Presentation and Principles of Consolidation

The accompanying unaudited condensed consolidated financial statements of Tiptree have been prepared in accordance with generally accepted accounting principles in the United States of America (GAAP) and include the accounts of the Company and its subsidiaries. The condensed consolidated financial statements are presented in U.S. dollars, the main operating currency of the Company. The unaudited condensed consolidated financial statements presented herein should be read in conjunction with the annual audited financial statements included in the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2018. In the opinion of management, the accompanying unaudited interim financial information reflects all adjustments, including normal recurring adjustments necessary to present fairly the Company’s financial position, results of operations, comprehensive income and cash flows for each of the interim periods presented. The results of operations for the three and six months ended June 30, 2019 are not necessarily indicative of the results that may be expected for the full year ending on December 31, 2019.

As a result of changes in presentation made in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018, certain prior period amounts have been reclassified to conform to the current presentation. These reclassifications had no effect on the reported results of operations.

Tiptree consolidates those entities in which it has an investment of 50% or more of voting rights or has control over significant operating, financial and investing decisions of the entity as well as variable interest entities (VIEs) in which Tiptree is determined to be the primary beneficiary. VIEs are defined as entities in which equity investors do not have the characteristics of a controlling financial interest or do not have sufficient equity risk for the entity to finance its activities without additional subordinated financial support from other parties.

A VIE is required to be consolidated only by its primary beneficiary, which is defined as the party who has the power to direct the activities of a VIE that most significantly impact its economic performance and who has the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE. Tiptree’s consolidated VIEs are entities which Tiptree is considered the primary beneficiary through its controlling financial interests.

Non-controlling interests on the condensed consolidated balance sheets represent the ownership interests in certain consolidated subsidiaries held by entities or persons other than Tiptree. Accounts and transactions between consolidated entities have been eliminated.

As a result of the adoption of ASU 2016-02, the Company’s operating leases are now recognized on the condensed consolidated balance sheets as of January 1, 2019. See Note (14) Other Assets and Other Liabilities and Accrued Expenses for additional information.


F- 9

TIPTREE INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (Unaudited)
June 30, 2019
(in thousands, except share data)


Use of Estimates

The preparation of the Company’s condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the Company’s condensed consolidated financial statements and accompanying notes. Management makes estimates and assumptions that include, but are not limited to, the determination of the following significant items:

Fair value of financial assets and liabilities, including, but not limited to, securities, loans and derivatives;
Value of acquired assets and liabilities;
Carrying value of goodwill and other intangibles, including estimated amortization period and useful lives;
Reserves for unpaid losses and loss adjustment expenses, estimated future claims and losses, potential litigation and other claims;
Valuation of contingent share issuances for compensation and purchase consideration, including estimates of number of shares and vesting schedules;
Revenue recognition including, but not limited to, the timing and amount of insurance premiums, service and administration fees, and loan origination fees; and
Other matters that affect the reported amounts and disclosure of contingencies in the condensed consolidated financial statements.

Although these and other estimates and assumptions are based on the best available estimates, actual results could differ materially from management’s estimates.

Fair Value Measurement

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. The three levels, from highest to lowest, are defined as follows:

Level 1 – Unadjusted, quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.

Level 2 – Significant inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly through corroboration with observable market data. Level 2 inputs include quoted prices for similar instruments in active markets, and inputs other than quoted prices that are observable for the asset or liability. The types of financial assets and liabilities carried at level 2 are valued based on one or more of the following:

a) Quoted prices for similar assets or liabilities in active markets;
b) Quoted prices for identical or similar assets or liabilities in nonactive markets;
c) Pricing models whose inputs are observable for substantially the full term of the asset or liability;
d) Pricing models whose inputs are derived principally from or corroborated by observable market data through correlation or other means for substantially the full term of the asset or liability.

Level 3 – Significant inputs that are unobservable inputs for the asset or liability, including the Company’s own data and assumptions that are used in pricing the asset or liability.

Fair Value Option

In addition to the financial instruments the Company is required to measure at fair value, the Company has elected to make an irrevocable election to utilize fair value as the initial and subsequent measurement attribute for certain eligible financial assets and liabilities. Unrealized gains and losses on items for which the fair value option has been elected are reported in Net realized and unrealized gains (losses) within the condensed consolidated statements of operations. The decision to elect the fair value option is determined on an instrument-by-instrument basis and must be applied to an entire instrument and is irrevocable once elected.


F- 10

TIPTREE INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (Unaudited)
June 30, 2019
(in thousands, except share data)


Recent Accounting Standards

Recently Adopted Accounting Pronouncements

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e., lessees and lessors). The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases today. The new standard requires lessors to account for leases using an approach that is substantially equivalent to existing guidance for sales-type leases, direct financing leases and operating leases. ASU 2016-02 supersedes the previous leases standard, Leases (Topic 840). The standard is effective on January 1, 2019, with early adoption permitted. The Company adopted the standard in the first quarter of 2019 under the modified retrospective approach without restating prior comparative periods. The adoption of the updated guidance resulted in the Company recognizing a right of use asset of $32,052 as part of other assets and a lease liability of $33,558 as part of other liabilities and accrued expenses in the condensed consolidated balance sheets, as well as de-recognizing the liability for deferred rent that was required under the previous guidance, for its operating lease agreements at January 1, 2019. We have elected the practical expedient to not separate lease components and non-lease components, and leases with an initial term of 12 months or less are not recorded on the balance sheet. The cumulative effect adjustment to the opening balance of retained earnings was zero.

In March 2017, the FASB issued ASU 2017-08, Receivables-Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities. The new guidance is effective for fiscal years beginning after December 15, 2018 and interim periods within those years. Early adoption is permitted for interim or annual reporting periods beginning after December 15, 2017. The guidance is to be applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. The guidance shortens the amortization period for certain callable debt securities held at a premium, requiring the premium to be amortized to the earliest call date. The adoption of this standard did not have a material impact on the Company’s condensed consolidated financial statements.

In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities, which amends the guidance on hedge accounting. The amendment will make more financial and nonfinancial hedging strategies eligible for hedge accounting and amend the presentation and disclosure requirements. It is intended to more closely align hedge accounting with companies’ risk management strategies, simplify the application of hedge accounting, and increase transparency as to the scope and results of hedging programs. ASU 2017-12 can be adopted immediately in any interim or annual period. The mandatory effective date for calendar year-end public companies is January 1, 2019. The adoption of this standard did not have a material impact on the Company’s condensed consolidated financial statements.

In February 2018, the FASB issued ASU 2018-02, Income Statement-Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (AOCI), which permits companies to reclassify stranded tax effects caused by Public Law no. 115-97, commonly referred to as the Tax Cuts and Jobs Act (Tax Act), from accumulated other comprehensive income (AOCI) to retained earnings. Deferred tax assets (DTA) related to available for sale (AFS) securities unrealized gains and losses that were revalued as of December 31, 2017 created stranded tax effects in accumulated other comprehensive income (AOCI) due to the enactment of the Tax Act, due to the nature of existing GAAP requiring recognition of tax rate change effects on the DTA revaluation related to AFS securities as an adjustment to the provision for income taxes. Specifically, ASU 2018-02 permits a reclassification from AOCI to retained earnings for stranded tax effects resulting from the Tax Act. Additionally, the ASU requires new disclosures by all companies, whether they opt to do the reclassification or not. The amendments in ASU 2018-02 are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, with early adoption permitted. The Company has adopted the standard effective January 1, 2019, and reclassified the stranded tax effects caused by the Tax Act from AOCI to retained earnings. The standard is applied in the period of adoption, and the impact to the Company’s condensed consolidated financial statements in the period of adoption is not material. The Company’s accounting policy for the release of stranded tax effects in AOCI is the aggregate portfolio approach.

Recently Issued Accounting Pronouncements, Not Yet Adopted

In June 2016, the FASB issued ASU 2016-13 Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses

F- 11

TIPTREE INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (Unaudited)
June 30, 2019
(in thousands, except share data)


on Financial Instruments, which amends guidance on reporting credit losses for assets held at amortized cost basis and available for sale debt securities. For assets held at amortized cost basis, Topic 326 eliminates the probable initial recognition threshold in current GAAP and, instead requires an entity to reflect its current estimate of all expected credit losses. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial assets to present the net amount expected to be collected. For available for sale debt securities, credit losses should be measured in a manner similar to current GAAP, however Topic 326 will require that credit losses be presented as an allowance rather than as a write-down. This ASU affects entities holding financial assets and net investment in leases that are not accounted for at fair value through net income. The amendments in ASU 2016-13 are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, with early adoption permitted as of the fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The amendments will affect loans, debt securities, trade receivables, net investments in leases, off balance sheet credit exposures, reinsurance receivables, and any other financial assets not excluded from the scope that have the contractual right to receive cash. The Company is currently evaluating the effect on its condensed consolidated financial statements.

In January 2017, the FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment. ASU 2017-04 does not change the qualitative assessment; however, it removes “the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test.” Instead, all reporting units, even those with a zero or negative carrying amount will apply the same impairment test. Therefore, as the FASB notes in the ASU’s Basis for Conclusions, the goodwill of reporting units with zero or negative carrying values will not be impaired, even when conditions underlying the reporting unit indicate that goodwill is impaired. Entities will, however, be required to disclose any reporting units with zero or negative carrying amounts and the respective amounts of goodwill allocated to those reporting units. The amendments in ASU 2017-04 are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, with early adoption permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company is currently evaluating the effect on its condensed consolidated financial statements.

In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Changes to the Disclosure Requirements for Fair Value Measurement, which modifies the disclosure requirements on fair value measurements in Topic 820. The modifications include the removal of certain requirements, modifications to existing requirements and additional requirements. The amendments in ASU 2018-13 are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, with early adoption permitted. The Company is currently evaluating the effect on its condensed consolidated financial statements.

(3) Dispositions, Assets Held for Sale and Discontinued Operations

Dispositions

On April 10, 2019, the Company completed the sale of the management contracts and related assets for the CLOs managed by Telos Asset Management, LLC (Telos). The pre-tax gain on sale for the three months ended June 30, 2019 was $7.6 million, which is included in other revenue. See Note (15) Other Revenue, Other Expenses and Other Income. The sale did not meet the requirements to be classified as a discontinued operation.

The sale agreement also contains a provision which provides for contingent consideration if the Telos business achieves specific performance metrics. This contingent consideration represents a gain contingency, and the Company will not recognize any additional gain unless such consideration is realized.

On February 1, 2018, the Company completed the sale of Care, as well as two senior living properties held in our specialty insurance business to Invesque Inc. (Invesque). The pre-tax comprehensive income on the sale for the six months ended June 30, 2018 was approximately $44.2 million, which consists of $46.2 million gain on sale of a subsidiary, $1.8 million of realized gain on the sale of the specialty insurance properties, offset by the reclassification of the interest rate swap from AOCI of $3.8 million. In December 2018, an additional gain on sale of a subsidiary of $10.7 million of earnout consideration was recognized as a result of a portfolio disposition by Invesque.

Total consideration received for the sale of Care was $150.7 million, including approximately 16.6 million shares of Invesque, resulting in an ownership of approximately 34% of the acquiring company at the time of sale. The Company has elected to apply the fair value option to the investment in Invesque. As such, these shares are held at fair value within equity securities.


F- 12

TIPTREE INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (Unaudited)
June 30, 2019
(in thousands, except share data)


When the Company entered into a purchase agreement on November 16, 2017 to sell Care, the Company concluded that the sale met the requirements to be classified as a discontinued operation. As a result, the Company reclassified the income and expenses attributable to Care to net income (loss) from discontinued operations through the completion of the sale.

The Company has entered into a definitive agreement to sell Luxury, which is pending a regulatory review, and is classified as held for sale at June 30, 2019 and December 31, 2018. The agreement did not meet the requirements to be classified as a discontinued operation.

As of June 30, 2019 and December 31, 2018, the Company did not record any impairments with respect to assets held for sale.

Assets Held for Sale

The following table presents detail of assets and liabilities held for sale in the condensed consolidated balance sheets for the following periods:
 
As of
 
June 30, 2019
 
December 31, 2018
Assets
 
 
 
Investments:
 
 
 
Loans, at fair value
$
70,715

 
$
63,340

Other investments
1,245

 
798

Total Investments
71,960

 
64,138

Cash and cash equivalents
3,587

 
2,860

Notes and accounts receivable, net
305

 
230

Other assets (1)
1,649

 
1,003

Assets held for sale
$
77,501

 
$
68,231

 
 
 
 
Liabilities
 
 
 
Debt, net
$
69,365

 
$
61,381

Other liabilities and accrued expenses (2)
2,767

 
1,599

Liabilities held for sale
$
72,132

 
$
62,980


(1) 
Includes $467 and $0 of a right of use asset as of June 30, 2019 and December 31, 2018, respectively.
(2) 
Includes $489 and $0 of a lease liability as of June 30, 2019 and December 31, 2018, respectively.

Discontinued Operations

The following table presents detail of revenues and expenses of discontinued operations in the condensed consolidated statements of operations for the following periods:
 
Three Months Ended June 30,
 
Six Months Ended 
 June 30,
 
2019
 
2018
 
2019
 
2018
Revenues:
 
 
 
 

 

Rental and related revenue
$

 
$

 
$

 
$
6,476

Other revenue

 

 

 
149

Total revenues

 

 

 
6,625

Expenses:
 
 
 
 
 
 
 
Employee compensation and benefits

 

 

 
2,788

Interest expense

 

 

 
1,252

Other expenses

 

 

 
1,961

Total expenses

 

 

 
6,001

Net income (loss) before taxes from discontinued operations

 

 

 
624

Gain on sale of discontinued operations

 

 

 
46,184

Less: provision (benefit) for income taxes

 

 

 
12,327

Net income (loss) from discontinued operations
$

 
$

 
$

 
$
34,481


F- 13

TIPTREE INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (Unaudited)
June 30, 2019
(in thousands, except share data)


The following table presents a summary of cash flows related to discontinued operations included in the condensed consolidated statements of cash flows for the following periods:
 
Six Months Ended 
 June 30,
 
2019
 
2018
Net cash provided by (used in):
 
 
 
Operating activities
$

 
$
(2,095
)
Investing activities

 
(592
)
Financing activities

 
(123
)
Net cash flows provided by discontinued operations
$

 
$
(2,810
)


(4) Operating Segment Data

Tiptree is a holding company that combines specialty insurance operations with investment management capabilities. We allocate our capital across our insurance operations and other investments. We classify our business into one reportable segment – Specialty Insurance. We refer to our non-insurance operations, assets and other investments, which is comprised of our non-reportable operating segments and other business activities, as Tiptree Capital. Corporate activities include holding company interest expense, employee compensation and benefits, and other expenses.

Our reportable segment’s income or loss is reported before income taxes, discontinued operations and non-controlling interests. Segment results incorporate the revenues and expenses of these subsidiaries since they commenced operations or were acquired. As of December 31, 2018, Mortgage and Asset Management, which previously were reportable segments, no longer met the quantitative threshold for disclosure. Those are now reported in Other, which we refer to as Tiptree Capital. Prior periods have been conformed to the current year presentation. Intercompany transactions are eliminated.

Descriptions of our reportable segment and of Tiptree Capital are as follows:

Specialty Insurance operations are conducted through Fortegra Financial Corporation (Fortegra), an insurance holding company. Fortegra underwrites and provides specialty insurance products, primarily in the United States, and is a leading provider of credit insurance and asset protection products. Fortegra’s range of products and services include credit protection insurance, warranty and service contract products, and other specialty insurance programs which underwrite niche personal and commercial lines of insurance. We also offer various other insurance related products and services throughout the U.S. through our non-regulated subsidiaries.

Tiptree Capital includes our asset management, mortgage and shipping operations, and other investments (including our Invesque shares).

The tables below present the components of revenue, expense, pre-tax income (loss), and assets for our reportable segment as well as Tiptree Capital for the following periods:
 
Three Months Ended June 30, 2019
 
Three Months Ended June 30, 2018
 
Specialty insurance
 
Tiptree Capital
 
Total
 
Specialty insurance
 
Tiptree Capital
 
Total
Total revenue
$
154,349

 
$
36,723

 
$
191,072

 
$
134,111

 
$
18,598

 
$
152,709

Total expense
(142,439
)
 
(25,024
)
 
(167,463
)
 
(125,380
)
 
(19,103
)
 
(144,483
)
Corporate expense

 

 
(7,904
)
 

 

 
(6,649
)
Income (loss) before taxes from continuing operations
$
11,910

 
$
11,699

 
$
15,705

 
$
8,731

 
$
(505
)
 
$
1,577

Less: provision (benefit) for income taxes
 
 
 
 
3,501

 
 
 
 
 
701

Net income (loss) before non-controlling interests
 
 
 
 
$
12,204

 
 
 
 
 
$
876

Less: net income (loss) attributable to non-controlling interests
 
 
 
 
458

 
 
 
 
 
50

Net income (loss) attributable to Common Stockholders
 
 
 
 
$
11,746

 
 
 
 
 
$
826

 
 
 
 
 
 
 
 
 
 

F- 14

TIPTREE INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (Unaudited)
June 30, 2019
(in thousands, except share data)


 
Six Months Ended June 30, 2019
 
Six Months Ended June 30, 2018
 
Specialty Insurance
 
Tiptree Capital
 
Total
 
Specialty Insurance
 
Tiptree Capital
 
Total
Total revenue
$
308,977

 
$
65,998

 
$
374,975

 
$
264,109

 
$
36,672

 
$
300,781

Total expense
(288,929
)
 
(48,381
)
 
(337,310
)
 
(254,035
)
 
(38,849
)
 
(292,884
)
Corporate expense

 

 
(16,805
)
 

 

 
(13,363
)
Income (loss) before taxes from continuing operations
$
20,048

 
$
17,617

 
$
20,860

 
$
10,074

 
$
(2,177
)
 
$
(5,466
)
Less: provision (benefit) for income taxes
 
 
 
 
4,355

 
 
 
 
 
(867