15
Non-GAAP Reconciliations – Adjusted Net Income
The footnotes below correspond to the tables above, under
“—Adjusted Net Income - Non-GAAP and “—Adjusted
Return on Average Equity - Non-GAAP” (annualized).
Adjusted net income is presented before the impacts of
non-controlling interests. Tiptree’s subsidiary ownership
percentage as of December 31, 2023 was Fortegra 79.5%,
Tiptree Marine 100%, Reliance (Mortgage) 100%.
(1) Net realized and unrealized gains (losses) added back
in Adjusted net income excludes net realized and
unrealized gains (losses) from the mortgage segment,
those relating to our held-for-sale mortgage originator
(Luxury), and unrealized gains (losses) on mortgage
servicing rights.
(2) Specifically associated with acquisition purchase
accounting. See Note (9) Goodwill and Intangible Assets,
net.
(3) Included in other expenses were expenses related to
banker and legal fees associated with the acquisitions of
Premia and ITC.
(4) Non-cash fair-value adjustments represent a change in
fair value of the Fortegra Additional Warrant liability which
are added-back to adjusted net income. For the 2022
periods, maritime transportation depreciation and
amortization was deducted as a reduction in the value of
the vessel.
(5) For the three and twelve months ended December 31,
2023, included in the adjustment is an add-back of $8.9
million and $19.1 million, respectively, related to deferred
tax expense from the WP Transaction. For the three and
twelve months ended December 31, 2022, included in the
adjustment is an add-back of $9.0 million and $33.1 million,
respectively, related to deferred tax expense from the WP
Transaction.
(6) Tax on adjustments represents the tax applied to the
total non-GAAP adjustments and includes adjustments for
non-recurring or discrete tax impacts.
(7) Total adjusted return on average equity, after non-
controlling interests was 13.6% and 9.9% for the three
months ended December 31, 2023 and 2022, respectively,
based on $13.9 million and $9.7 million of Adjusted net
income over $406.5 million and $392.3 million of average
Tiptree Inc. stockholders’ equity, and 15.2% and 13.6% for
the years ended December 31, 2023 and 2022,
respectively, based on $61.9 million and $53.0 million of
Adjusted net income over $407.1 million and $390.2 million
of average Tiptree Inc. stockholders’ equity.
Insurance Mortgage Other Corporate Total Insurance Mortgage Other Corporate Total
Income (loss) before taxes 44,232$ (2,391)$ 333$ (12,109)$ 30,065$ 29,093$ (2,476)$ 10,935$ (12,521)$ 25,031$
Less: Income tax (benefit) expense (5,288) 606 (266) (8,989) (13,937) (10,152) 511 (2,076) (7,196) (18,913)
Less: Net realized and unrealized gains (losses)
(1)
(6,395) 2,794 (596) - (4,197) (2,804) 973 (10,495) - (12,326)
Plus: Intangibles amortization
(2)
4,252 - - - 4,252 4,083 - - - 4,083
Plus: Stock-based compensation expense 780 - - 1,219 1,999 47 - (98) 1,656 1,605
Plus: Non-recurring expenses
(3)
348 - - - 348 1,813 - 140 - 1,953
Plus: Non-cash fair value adjustments
(4)
842 - - - 842 (939) - 1 - (938)
Plus: Impact of tax deconsolidation of Fortegra
(5)
- - - 8,891 8,891 - - - 9,029 9,029
Less: Tax on adjustments
(6)
(6,167) (702) (185) (671) (7,725) 2,798 (150) 1,948 448 5,044
Adjusted net income (before NCI) 32,604$ 307$ (714)$ (11,659)$ 20,538$ 23,939$ (1,142)$ 355$ (8,584)$ 14,568$
Less: Impact of non-controlling interests (6,684) - - - (6,684) (4,884) - - - (4,884)
Adjusted net income 25,920$ 307$ (714)$ (11,659)$ 13,854$ 19,055$ (1,142)$ 355$ (8,584)$ 9,684$
Average stockholders’ equity 422,327$ 53,188$ 128,827$ (44,272)$ 560,070$ 326,431$ 55,726$ 70,628$ 73,789$ 526,574$
Adjusted return on average equity
(7)
30.9% 2.3% (2.2)% NM% 14.7% 29.3% (8.2)% 2.0% NM% 11.1%
Insurance Mortgage Other Corporate Total Insurance Mortgage Other Corporate Total
Income (loss) before taxes 129,816$ (3,285)$ (3,264)$ (40,214)$ 83,053$ 68,150$ 874$ 31,403$ (46,416)$ 54,011$
Less: Income tax (benefit) expense (28,224) 837 153 (15,822) (43,056) (21,251) (363) (5,545) (23,291) (50,450)
Less: Net realized and unrealized gains (losses)
(1)
4,207 1,861 5,289 - 11,357 20,347 (7,003) (18,788) - (5,444)
Plus: Intangibles amortization
(2)
16,919 - - - 16,919 16,229 - - - 16,229
Plus: Stock-based compensation expense 2,018 - - 6,251 8,269 2,423 - - 7,093 9,516
Plus: Non-recurring expenses
(3)
2,824 - - - 2,824 3,374 - (729) 2,108 4,753
Plus: Non-cash fair value adjustments
(4)
(1,769) - - - (1,769) (939) - 3,555 - 2,616
Plus: Impact of tax deconsolidation of Fortegra
(5)
- - - 19,101 19,101 1,560 - - 31,573 33,133
Less: Tax on adjustments
(6)
(10,086) (495) (1,255) 797 (11,039) (6,061) 1,834 3,731 (467) (963)
Adjusted net income (before NCI) 115,705$ (1,082)$ 923$ (29,887)$ 85,659$ 83,832$ (4,658)$ 13,627$ (29,400)$ 63,401$
Less: Impact of non-controlling interests (23,742) - - - (23,742) (10,367) - - - (10,367)
Adjusted net income 91,963$ (1,082)$ 923$ (29,887)$ 61,917$ 73,465$ (4,658)$ 13,627$ (29,400)$ 53,034$
Average stockholders’ equity 395,661$ 53,520$ 100,325$ 5,564$ 555,070$ 321,320$ 57,575$ 98,373$ (10,390)$ 466,878$
Adjusted return on average equity
(7)
29.2% (2.0)% 0.9% NM% 15.4% 26.1% (8.1)% 13.9% NM% 13.6%
Year Ended December 31, 2022
Three Months Ended December 31, 2022
Three Months Ended December 31, 2023
Year Ended December 31, 2023