UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q



x☒	Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended ~~September~~June 30, ~~2018~~2019



¨☐	Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from to

Assurant, Inc.

(Exact name of registrant as specified in its charter)



Delaware	001-31978	39-1126612
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

28 Liberty Street, 41st Floor

New York, New York10005

~~(212)~~ (212) 859-7000

(Address, including zip code, and telephone number, including area code, of Registrant’s Principal Executive Offices)

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, $0.01 Par Value	AIZ	New York Stock Exchange
6.50% Series D Mandatory Convertible Preferred Stock, $1.00 Par Value	AIZP	New York Stock Exchange

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~~Yes x☒ NONo ¨☐

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~~(§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~~Yes x☒ NONo ¨☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and ~~"emerging~~“emerging growth ~~company"~~company” in Rule 12b-2 of the Exchange Act.



Large accelerated filer	x☒	Accelerated filer	¨☐

Non-accelerated filer	¨ ☐	Smaller reporting company	¨☐

		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. ¨☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ~~YES~~Yes ¨☐ NONo x☒

The number of shares of the registrant’s Common Stock outstanding at ~~November~~August 2, ~~2018~~2019 was ~~62,053,935.~~61,130,900.

ASSURANT, INC.

QUARTERLY REPORT ON FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED ~~SEPTEMBER~~JUNE 30, ~~2018~~2019

TABLE OF CONTENTS


Item Number		Page Number		Page Number
	PART I FINANCIAL INFORMATION		PART I FINANCIAL INFORMATION

1.	Consolidated Financial Statements (unaudited) of Assurant, Inc.:		Consolidated Financial Statements (unaudited) of Assurant, Inc.:

	Consolidated Balance Sheets (unaudited) at September 30, 2018 and December 31, 2017	3	Consolidated Balance Sheets (unaudited) as of June 30, 2019 and December 31, 2018	2

	Consolidated Statements of Operations (unaudited) for the three and nine months ended September 30, 2018 and 2017	5	Consolidated Statements of Operations (unaudited) for the three and six months ended June 30, 2019 and 2018	4

	Consolidated Statements of Comprehensive Income (unaudited) for the three and nine months ended September 30, 2018 and 2017	6	Consolidated Statements of Comprehensive Income (unaudited) for the three and six months ended June 30, 2019 and 2018	5

	Consolidated Statements of Changes in Stockholders’ Equity (unaudited) for the three and nine months ended September 30, 2018 and 2017	7	Consolidated Statements of Changes in Equity (unaudited) for the three and six months ended June 30, 2019 and 2018	6

	Consolidated Statements of Cash Flows (unaudited) for the nine months ended September 30, 2018 and 2017	9	Consolidated Statements of Cash Flows (unaudited) for the six months ended June 30, 2019 and 2018	8

	Notes to Consolidated Financial Statements (unaudited)	11	Notes to Consolidated Financial Statements (unaudited)	10

2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	45	Management’s Discussion and Analysis of Financial Condition and Results of Operations	42

3.	Quantitative and Qualitative Disclosures About Market Risk	69	Quantitative and Qualitative Disclosures About Market Risk	64

4.	Controls and Procedures	69	Controls and Procedures	64

	PART II OTHER INFORMATION		PART II OTHER INFORMATION

1.	Legal Proceedings	70	Legal Proceedings	65

1A.	Risk Factors	70	Risk Factors	65

2.	Unregistered Sales of Equity Securities and Use of Proceeds	70	Unregistered Sales of Equity Securities and Use of Proceeds	65

6.	Exhibits	70	Exhibits	66

	Signatures	72	Signatures	67

Amounts are presented in United States of America (“U.S.”) dollars and all amounts are in millions, except number of shares and per share amounts.

Assurant, Inc.

Consolidated Balance Sheets (unaudited)

~~At September~~As of June 30, ~~2018~~2019 and December 31, ~~2017~~2018

~~Assurant, Inc.~~

~~Consolidated Balance Sheets (unaudited)~~

~~At September 30, 2018 and December 31, 2017~~


	September 30, 2018			December 31, 2017			June 30, 2019			December 31, 2018
	(in millions except number of shares and per share amounts)						(in millions, except number of shares and per share amounts)
Assets
Investments:
Fixed maturity securities available for sale, at fair value (amortized cost - $10,669.2 in 2018 and $8,756.5 in 2017)	$	11,116.6		$	9,662.6
Equity securities, at fair value (cost - $349.3 in 2018 and $316.3 in 2017)	385.4			368.0
Fixed maturity securities available for sale, at fair value (amortized cost - $11,107.7 and $10,834.0 at June 30, 2019 and December 31, 2018, respectively)							$	12,228.8		$	11,257.1
Equity securities at fair value							392.2			378.8
Commercial mortgage loans on real estate, at amortized cost	757.9			670.2			783.1			759.6
Short-term investments	604.8			284.1			357.5			373.2
Other investments	633.5			568.6			668.1			635.2
Total investments	13,498.2			11,553.5			14,429.7			13,403.9
Cash and cash equivalents	1,306.6			996.8			1,490.4			1,254.0
Premiums and accounts receivable, net	1,601.0			1,237.3			1,745.7			1,643.5
Reinsurance recoverables	11,256.8			9,790.2			9,162.6			9,166.0
Accrued investment income	133.7			105.4			126.9			125.5
Deferred acquisition costs	4,270.1			3,484.5			5,767.6			5,103.0
Property and equipment, at cost less accumulated depreciation	381.7			347.6			419.2			392.5
Tax receivable	42.7			126.3
Goodwill	2,312.5			917.7			2,338.0			2,321.8
Value of business acquired	3,905.5			24.4			2,554.7			3,157.8
Other intangible assets, net	642.8			288.6			564.1			622.4
Other assets	587.6			387.1			622.6			603.8
Assets held in separate accounts	1,904.4			1,837.1			1,831.3			1,609.7
Assets of consolidated investment entities (1)	1,599.5			746.5			2,086.7			1,685.4
Total assets	$	43,443.1		$	31,843.0		$	43,139.5		$	41,089.3
Liabilities
Future policy benefits and expenses	$	10,464.9		$	10,397.4		$	9,445.9		$	9,240.9
Unearned premiums	15,497.2			7,038.6			15,934.6			15,648.0
Claims and benefits payable	3,764.7			3,782.2			2,722.2			2,813.7
Commissions payable	316.9			365.1			447.8			338.6
Reinsurance balances payable	302.7			145.3			321.8			330.9
Funds held under reinsurance	279.0			179.8			308.0			272.0
Deferred gains on disposal of businesses	81.9			128.1
Accounts payable and other liabilities	2,212.1			2,046.3			2,598.5			2,240.5
Debt	2,005.4			1,068.2			2,007.3			2,006.0
Liabilities related to separate accounts	1,904.4			1,837.1			1,831.3			1,609.7
Liabilities of consolidated investment entities (1)	1,374.2			573.4			1,761.8			1,455.1
Total liabilities	38,203.4			27,561.5			37,379.2			35,955.4
Commitments and contingencies (Note 18)
Commitments and contingencies (Note 17)
Stockholders’ equity
6.50% Series D mandatory convertible preferred stock, $1.00 par value, 2,875,000 shares authorized, 2,875,000 issued and outstanding at September 30, 2018	2.9			—
Common stock, par value $0.01 per share, 800,000,000 shares authorized, 161,134,668 and 150,392,604 shares issued and 62,376,266 and 52,417,812 shares outstanding at September 30, 2018 and December 31, 2017, respectively	1.6			1.5
6.50% Series D mandatory convertible preferred stock, par value $1.00 per share, 2,875,000 shares authorized, issued and outstanding at June 30, 2019 and December 31, 2018							2.9			2.9
Common stock, par value $0.01 per share, 800,000,000 shares authorized, 161,489,702 and 161,153,454 shares issued and 61,207,965 and 61,908,979 shares outstanding at June 30, 2019 and December 31, 2018, respectively							1.6			1.6
Additional paid-in capital	4,478.8			3,197.9			4,509.2			4,495.6
Retained earnings	5,777.1			5,697.3			5,980.9			5,759.7
Accumulated other comprehensive (loss) income	(97.7		)	234.0
Treasury stock, at cost; 98,758,402 and 97,974,792 shares at September 30, 2018 and December 31, 2017, respectively	(4,943.3		)	(4,860.1		)
Accumulated other comprehensive income (loss)							328.7			(155.4		)
Treasury stock, at cost; 100,259,737 and 99,244,475 shares at June 30, 2019 and December 31, 2018, respectively							(5,093.1		)	(4,992.4		)
Total Assurant, Inc. stockholders’ equity	5,219.4			4,270.6			5,730.2			5,112.0
Non-controlling interest	20.3			10.9
Non-controlling interests							30.1			21.9
Total equity	5,239.7			4,281.5			5,760.3			5,133.9
Total liabilities and equity	$	43,443.1		$	31,843.0		$	43,139.5		$	41,089.3


(1)	The following table presents information on assets and liabilities related to consolidated investment entities as of ~~September~~June 30, ~~2018~~2019 and December 31, ~~2017.~~2018.

Assurant, Inc.

Consolidated Balance Sheets (unaudited)

~~At September~~As of June 30, ~~2018~~2019 and December 31, ~~2017~~2018



	June 30, 2019		December 31, 2018
	(in millions)
Assets
Cash and cash equivalents	$	84.8	$	62.6
Investments, at fair value	1,977.1		1,576.2
Other receivables	24.8		46.6
Total assets	$	2,086.7	$	1,685.4
Liabilities
Collateralized loan obligation notes, at fair value	1,616.5		1,316.7
Other liabilities	145.3		138.4
Total liabilities	$	1,761.8	$	1,455.1

September 30, 2018 December 31, 2017
(in millions)
Assets
Cash and cash equivalents $ 125.3
$ 69.8
Investments, at fair value 1,450.9
655.0
Other receivables 23.3
21.7
Total assets $ 1,599.5
$ 746.5
Liabilities
Collateralized loan obligation notes, at fair value 1,177.7
450.7
Other liabilities 196.5
122.7
Total liabilities $ 1,374.2
$ 573.4

See the accompanying Notes to Consolidated Financial Statements

Assurant, Inc.

Consolidated Statements of Operations (unaudited)

Three and ~~Nine~~Six Months Ended ~~September~~June 30, ~~2018~~2019 and ~~2017~~2018


	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017			2019			2018			2019			2018
	(in millions except number of shares and per share amounts)												(in millions, except number of shares and per share amounts)
Revenues
Net earned premiums	$	1,853.6		$	1,073.1		$	4,316.8		$	3,238.7		$	2,032.7		$	1,338.3		$	3,937.1		$	2,463.2
Fees and other income	257.9			349.1			976.6			1,016.2			336.1			354.2			664.4			718.7
Net investment income	151.8			132.6			417.6			374.9			154.2			135.6			320.5			265.8
Net realized (losses) gains on investments, excluding other-than-temporary impairment losses	(5.2		)	8.9			(16.1		)	26.0
Net realized gains (losses) on investments, excluding other-than-temporary impairment losses													18.4			(11.4		)	47.5			(10.9		)
Other-than-temporary impairment losses recognized in earnings	(0.5		)	(0.4		)	(0.5		)	(0.9		)	(0.6		)	—			(0.9		)	—
Amortization of deferred gains on disposal of businesses	12.7			23.1			46.2			83.5			4.7			15.0			12.5			33.5
Total revenues	2,270.3			1,586.4			5,740.6			4,738.4			2,545.5			1,831.7			4,981.1			3,470.3
Benefits, losses and expenses
Policyholder benefits	680.9			682.2			1,586.1			1,456.6			687.0			490.6			1,301.7			905.2
Amortization of deferred acquisition costs and value of business acquired	750.6			332.5			1,560.2			993.7			815.8			463.2			1,593.1			809.6
Underwriting, general and administrative expenses	736.5			667.1			2,229.7			1,964.7			832.9			773.6			1,633.0			1,493.2
Interest expense	26.5			12.2			74.0			37.2			26.5			26.0			53.0			47.5
Total benefits, losses and expenses	2,194.5			1,694.0			5,450.0			4,452.2			2,362.2			1,753.4			4,580.8			3,255.5
Income (loss) before provision (benefit) for income taxes	75.8			(107.6		)	290.6			286.2
Provision (benefit) for income taxes	22.8			(50.3		)	64.6			79.5
Net income (loss)	53.0			(57.3		)	226.0			206.7
Income before provision for income taxes													183.3			78.3			400.3			214.8
Provision for income taxes													40.7			11.3			89.1			41.8
Net income													142.6			67.0			311.2			173.0
Less: Net loss (income) attributable to non-controlling interests													1.5			—			(1.4		)	—
Net income attributable to stockholders													144.1			67.0			309.8			173.0
Less: Preferred stock dividends	(4.7		)	—			(9.5		)	—			(4.6		)	(4.8		)	(9.3		)	(4.8		)
Net income (loss) attributable to common stockholders	$	48.3		$	(57.3	)	$	216.5		$	206.7
Net income attributable to common stockholders													$	139.5		$	62.2		$	300.5		$	168.2

Earnings Per Share
Earnings Per Common Share
Basic	$	0.76		$	(1.05	)	$	3.73		$	3.75		$	2.24		$	1.09		$	4.82		$	3.05
Diluted	$	0.76		$	(1.05	)	$	3.72		$	3.73		$	2.21		$	1.09		$	4.73		$	3.02
Share Data
Weighted average shares outstanding used in basic per share calculations	63,621,184			54,524,874			57,988,570			55,096,933
Weighted average common shares outstanding used in basic per common share calculations													62,222,090			57,060,313			62,407,429			55,125,584
Plus: Dilutive securities	179,163			—			205,370			312,318			3,066,357			204,095			3,153,501			2,147,844
Weighted average shares used in diluted per share calculations	63,800,347			54,524,874			58,193,940			55,409,251
Weighted average common shares used in diluted per common share calculations													65,288,447			57,264,408			65,560,930			57,273,428

See the accompanying Notes to Consolidated Financial Statements

Assurant, Inc.

Consolidated Statements of Comprehensive Income (unaudited)

Three and ~~Nine~~Six Months Ended ~~September~~June 30, ~~2018~~2019 and ~~2017~~2018

Three Months Ended September 30, Nine Months Ended September 30,
2018 2017 2018 2017
(in millions)
Net income

$ 53.0
$ (57.3 ) $ 226.0
$ 206.7
Other comprehensive (loss) income:
Change in unrealized gains on securities, net of taxes of $13.7, $4.0, $89.7 and $(53.7), respectively (47.0 ) (7.7 ) (328.1 ) 98.6
Change in unrealized gains on derivative transactions, net of taxes of $0.1 and $(5.3) for the three and nine months ended September 30, 2018, respectively 0.1
—
21.0
—
Change in other-than-temporary impairment losses, net of taxes of $0.1, $0.5, $1.4 and $1.5, respectively (0.5 ) (1.0 ) (5.4 ) (2.8 )
Change in foreign currency translation, net of taxes of $(0.8), $(1.5), $0.7 and $(2.8), respectively 4.8
27.6
(69.1 ) 65.1
Amortization of pension and postretirement unrecognized net periodic benefit cost, net of taxes of $(0.2), $(0.3), $(0.5) and $(0.5), respectively 0.8
0.6
1.8
0.9
Total other comprehensive (loss) income (41.8 ) 19.5
(379.8 ) 161.8
Total comprehensive income (loss) $ 11.2
$ (37.8 ) $ (153.8 ) $ 368.5



	Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018
	(in millions)
Net income	$	142.6		$	67.0		$	311.2		$	173.0
Other comprehensive income (loss):
Change in unrealized gains on securities, net of taxes of $(60.0), $28.2, $(129.0) and $76.0 for the three and six months ended June 30, 2019 and 2018, respectively	228.5			(105.9		)	477.4			(281.1		)
Change in unrealized gains on derivative transactions, net of taxes of $0.1, $0.2, $0.3 and $(5.4) for the three and six months ended June 30, 2019 and 2018, respectively	(2.9		)	(0.2		)	(3.2		)	20.9
Change in other-than-temporary impairment losses, net of taxes of $(0.2), $0.4, $(0.1) and $1.3 for the three and six months ended June 30, 2019 and 2018, respectively	0.7			(1.4		)	0.5			(4.9		)
Change in foreign currency translation, net of taxes of $(0.8), $1.0, $(1.4) and $1.5 for the three and six months ended June 30, 2019 and 2018, respectively	(1.2		)	(83.1		)	9.0			(73.9		)
Amortization of pension and postretirement unrecognized net periodic benefit cost, net of taxes of $(0.1), $(0.3), $(0.1) and $(0.3) for the three and six months ended June 30, 2019 and 2018, respectively	0.2			1.0			0.4			1.0
Total other comprehensive income (loss)	225.3			(189.6		)	484.1			(338.0		)
Total comprehensive income (loss)	367.9			(122.6		)	795.3			(165.0		)
Less: Comprehensive loss (income) attributable to non-controlling interests	1.5			—			(1.4		)	—
Total comprehensive income (loss) attributable to stockholders	$	369.4		$	(122.6	)	$	793.9		$	(165.0	)

See the accompanying Notes to Consolidated Financial Statements

Assurant, Inc.

Consolidated Statements of ~~Stockholders’~~Changes in Equity (unaudited)

Three and ~~Nine~~Six Months Ended ~~September~~June 30, ~~2018~~2019 and ~~2017~~2018

Three Months Ended September 30, 2018

Common
Stock
Preferred Stock
Additional
Paid-in
Capital

Retained
Earnings

Accumulated
Other
Comprehensive
Income

Treasury
Stock
Non-controlling Interest Total
(in millions)
Balance at June 30, 2018 $ 1.6
$ 2.9
$ 4,459.7
$ 5,846.3
$ (137.9 ) $ (4,860.1 ) $ 20.4
$ 5,332.9
Cumulative effect of change in accounting principles (1) —
—
—
(82.0 ) 82.0
—
—
—
Stock plan exercises —
—
1.7
—
—
—
—
1.7
Stock plan compensation expense —
—
17.4
—
—
—
—
17.4
Common stock dividends ($0.56 per share) —
—
—
(35.5 ) —
—
—
(35.5 )
Acquisition of common stock —
—
—
—
—
(83.2 ) —
(83.2 )
Net income —
—
—
53.0
—
—
—
53.0
Preferred stock dividends ($1.63 per share) —
—
—
(4.7 ) —
—
—
(4.7 )
Change in equity of non-controlling interest —
—
—
—
—
—
(0.1 ) (0.1 )
Other comprehensive loss —
—
—
—
(41.8 ) —
—
(41.8 )
Balance at September 30, 2018 $ 1.6
$ 2.9
$ 4,478.8
$ 5,777.1
$ (97.7 ) $ (4,943.3 ) $ 20.3
$ 5,239.7



	Three Months Ended June 30, 2019
	Preferred Stock		Common Stock		Additional Paid-in Capital			Retained Earnings			Accumulated Other Comprehensive Income		Treasury Stock			Non-controlling Interests			Total
	(in millions)
Balance at March 31, 2019	$	2.9	$	1.6	$	4,496.0		$	5,879.7		$	103.4	$	(5,043.0	)	$	31.1		$	5,471.7
Stock plan exercises	—		—		(1.0		)	—			—		—			—			(1.0		)
Stock plan compensation expense	—		—		14.2			—			—		—			—			14.2
Common stock dividends ($0.60 per share)	—		—		—			(38.3		)	—		—			—			(38.3		)
Acquisition of common stock	—		—		—			—			—		(50.1		)	—			(50.1		)
Net income	—		—		—			144.1			—		—			(1.5		)	142.6
Preferred stock dividends ($1.63 per share)	—		—		—			(4.6		)	—		—			—			(4.6		)
Change in equity of non-controlling interests	—		—		—			—			—		—			0.5			0.5
Other comprehensive income	—		—		—			—			225.3		—			—			225.3
Balance at June 30, 2019	$	2.9	$	1.6	$	4,509.2		$	5,980.9		$	328.7	$	(5,093.1	)	$	30.1		$	5,760.3


~~(1)~~	Amounts relate to the reclassification from accumulated other comprehensive income ("AOCI") to retained earnings for stranded tax effects resulting from the U.S. Tax Cuts and Jobs Act ("TCJA"). See Note 3 for additional information.

Three Months Ended September 30, 2017

Common
Stock

Additional
Paid-in
Capital

Retained
Earnings

Accumulated
Other
Comprehensive
Income

Treasury
Stock
Total
(in millions)
Balance at June 30, 2017 $ 1.5
$ 3,172.4
$ 5,500.7
$ 236.9
$ (4,686.9 ) $ 4,224.6
Stock plan exercises —
2.7
—
—
—
2.7
Stock plan compensation expense —
11.7
—
—
—
11.7
Common stock dividends ($0.53 per share) —
—
(28.8 ) —
—
(28.8 )
Acquisition of common stock —
—
—
—
(34.2 ) (34.2 )
Net income —
—
(57.3 ) —
—
(57.3 )
Other comprehensive income —
—
—
19.5
—
19.5
Balance at September 30, 2017 $ 1.5
$ 3,186.8
$ 5,414.6
$ 256.4
$ (4,721.1 ) $ 4,138.2



	Three Months Ended June 30, 2018
	Preferred Stock		Common Stock		Additional Paid-in Capital			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Treasury Stock			Non-controlling Interests		Total
	(in millions)
Balance at March 31, 2018	$	2.9	$	1.5	$	3,478.8		$	5,815.0		$	51.7		$	(4,860.1	)	$	11.2	$	4,501.0
Stock plan exercises	—		—		(6.6		)	—			—			—			—		(6.6		)
Stock plan compensation expense	—		—		12.1			—			—			—			—		12.1
Common stock dividends ($0.56 per share)	—		—		—			(30.9		)	—			—			—		(30.9		)
Net income	—		—		—			67.0			—			—			—		67.0
Issuance of common stock	—		0.1		975.4			—			—			—			—		975.5
Preferred stock dividends ($1.68 per share)	—		—		—			(4.8		)	—			—			—		(4.8		)
Change in equity of non-controlling interests	—		—		—			—			—			—			9.2		9.2
Other comprehensive loss	—		—		—			—			(189.6		)	—			—		(189.6		)
Balance at June 30, 2018	$	2.9	$	1.6	$	4,459.7		$	5,846.3		$	(137.9	)	$	(4,860.1	)	$	20.4	$	5,332.9

Assurant, Inc.

Consolidated Statements of ~~Stockholders’~~Changes in Equity (unaudited)

Three and ~~Nine~~Six Months Ended ~~September~~June 30, ~~2018~~2019 and ~~2017~~2018



	Six Months Ended June 30, 2019
	Preferred Stock		Common Stock		Additional Paid-in Capital			Retained Earnings			Accumulated Other Comprehensive (Loss) Income			Treasury Stock			Non-controlling Interests		Total
	(in millions)
Balance at December 31, 2018	$	2.9	$	1.6	$	4,495.6		$	5,759.7		$	(155.4	)	$	(4,992.4	)	$	21.9	$	5,133.9
Stock plan exercises	—		—		(12.1		)	—			—			—			—		(12.1		)
Stock plan compensation expense	—		—		25.7			—			—			—			—		25.7
Common stock dividends ($1.20 per share)	—		—		—			(75.7		)	—			—			—		(75.7		)
Acquisition of common stock	—		—		—			—			—			(100.7		)	—		(100.7		)
Net income	—		—		—			309.8			—			—			1.4		311.2
Preferred stock dividends ($3.25 per share)	—		—		—			(9.3		)	—			—			—		(9.3		)
Change in equity of non-controlling interests	—		—		—			(3.6		)	—			—			6.8		3.2
Other comprehensive income	—		—		—			—			484.1			—			—		484.1
Balance at June 30, 2019	$	2.9	$	1.6	$	4,509.2		$	5,980.9		$	328.7		$	(5,093.1	)	$	30.1	$	5,760.3

Nine Months Ended September 30, 2018

Common
Stock
Preferred
Stock
Additional
Paid-in
Capital

Retained
Earnings

Accumulated
Other
Comprehensive
Income

Treasury
Stock
Non-controlling Interest Total
(in millions)
Balance at December 31, 2017 $ 1.5
$ —
$ 3,197.9
$ 5,697.3
$ 234.0
$ (4,860.1 ) $ 10.9
$ 4,281.5
Cumulative effect of
  change in accounting
  principles, net of taxes (1)
—
—
—
(40.6 ) 48.1
—
—
7.5
Stock plan exercises —
—
(7.1 ) —
—
—
—
(7.1 )
Stock plan compensation expense —
—
39.1
—
—
—
—
39.1
Common stock dividends ($1.68 per share) —
—
—
(96.1 ) —
—
—
(96.1 )
Acquisition of common stock —
—
—
—
—
(83.2 ) —
(83.2 )
Net income —
—
—
226.0
—
—
—
226.0
Issuance of preferred
  stock
—
2.9
273.5
—
—
—
—
276.4
Issuance of common stock 0.1
—
975.4
—
—
—
—
975.5
Preferred stock dividends ($3.30 per share) —
—
—
(9.5 ) —
—
—
(9.5 )
Change in equity of non-controlling interest —
—
—
—
—
—
9.4
9.4
Other comprehensive
loss
—
—
—
—
(379.8 ) —
—
(379.8 )
Balance, September 30, 2018 $ 1.6
$ 2.9
$ 4,478.8
$ 5,777.1
$ (97.7 ) $ (4,943.3 ) $ 20.3
$ 5,239.7

~~(1)~~

Amounts relate to 1) the requirement to recognize the changes in fair value of equity securities directly within income (resulting in a reclassification of unrealized gains as of December 31, 2017 between AOCI and retained earnings); 2) the impact of adoption of the new revenue recognition standard for revenues from service contracts and sales of products; and 3) the reclassification from AOCI to retained earnings for stranded tax effects resulting from the U.S. Tax Cuts and Jobs Act ("TCJA"). See Note 3 for additional information.



	Six Months Ended June 30, 2018
	Preferred Stock		Common Stock		Additional Paid-in Capital			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Treasury Stock			Non-controlling Interests		Total
	(in millions)
Balance at December 31, 2017	$	—	$	1.5	$	3,197.9		$	5,697.3		$	234.0		$	(4,860.1	)	$	10.9	$	4,281.5
Cumulative effect of change in accounting principles, net of taxes	—		—		—			41.4			(33.9		)	—			—		7.5
Stock plan exercises	—		—		(8.8		)	—			—			—			—		(8.8		)
Stock plan compensation expense	—		—		21.7			—			—			—			—		21.7
Common stock dividends ($1.12 per share)	—		—		—			(60.6		)	—			—			—		(60.6		)
Net income	—		—		—			173.0			—			—			—		173.0
Issuance of preferred stock	2.9		—		273.5			—			—			—			—		276.4
Issuance of common stock	—		0.1		975.4			—			—			—			—		975.5
Preferred stock dividends ($1.68 per share)	—		—		—			(4.8		)	—			—			—		(4.8		)
Change in equity of non-controlling interests	—		—		—			—			—			—			9.5		9.5
Other comprehensive loss	—		—		—			—			(338.0		)	—			—		(338.0		)
Balance at June 30, 2018	$	2.9	$	1.6	$	4,459.7		$	5,846.3		$	(137.9	)	$	(4,860.1	)	$	20.4	$	5,332.9

Nine Months Ended September 30, 2017

Common
Stock

Additional
Paid-in
Capital

Retained
Earnings

Accumulated
Other
Comprehensive
Income

Treasury
Stock
Total
(in millions)
Balance at December 31, 2016 $ 1.5
$ 3,175.9
$ 5,296.7
$ 94.6
$ (4,470.6 ) $ 4,098.1
Stock plan exercises —
(12.1 ) —
—
—
(12.1 )
Stock plan compensation expense —
23.0
—
—
—
23.0
Common stock dividends ($1.59 per share) —
—
(88.8 ) —
—
(88.8 )
Acquisition of common stock —
—
—
—
(250.5 ) (250.5 )
Net income —
—
206.7
—
—
206.7
Other comprehensive income —
—
—
161.8
—
161.8
Balance at September 30, 2017 $ 1.5
$ 3,186.8
$ 5,414.6
$ 256.4
$ (4,721.1 ) $ 4,138.2

See the accompanying Notes to Consolidated Financial Statements

Assurant, Inc.

Consolidated Statements of Cash Flows (unaudited)

~~Nine~~Six Months Ended ~~September~~June 30, ~~2018~~2019 and ~~2017~~2018

Nine Months Ended September 30,
2018 2017
(in millions)
Net cash provided by operating activities (1) $ 454.6
$ 366.4
Investing activities
Sales of:
Fixed maturity securities available for sale 2,616.3
2,270.3
Equity securities 62.7
59.1
Other invested assets 47.1
72.6
Subsidiary, net of cash transferred (2) 36.7
—
Maturities, calls, prepayments, and scheduled redemption of:
Fixed maturity securities available for sale 593.8
631.5
Commercial mortgage loans on real estate 102.8
102.9
Purchases of:
Fixed maturity securities available for sale (2,941.0 ) (2,734.2 )
Equity securities (44.5 ) (18.8 )
Commercial mortgage loans on real estate (192.6 ) (124.0 )
Other invested assets (25.0 ) (71.6 )
Property and equipment and other (58.9 ) (43.4 )
Subsidiaries, net of cash transferred (3) (1,213.5 ) (127.4 )
Consolidated investment entities (4):
Purchases of investments (1,362.2 ) (265.3 )
Sale of investments 573.7
36.2
Change in short-term investments (101.4 ) (31.7 )
Other 1.6
1.8
Net cash used in investing activities (1,904.4 ) (242.0 )
Financing activities
Issuance of mandatory convertible preferred stock, net of issuance costs (5) 276.4
—
Issuance of debt, net of issuance costs (5) 1,285.7
—
Repayment of debt (5) (350.0 ) —
Issuance of collateralized loan obligation notes 831.4
—
Issuance of debt for consolidated investment entities (4) 509.0
157.7
Repayment of debt for consolidated investment entities (4) (591.6 ) —
Acquisition of common stock (87.2 ) (256.8 )
Common stock dividends paid (96.1 ) (88.8 )
Preferred stock dividends paid (9.5 ) —
Non-controlling interest 7.6
—
Withholding on stock based compensation 14.6
18.2
Other 0.1
—
Net cash provided by (used in) financing activities 1,790.4
(169.7 )
Effect of exchange rate changes on cash and cash equivalents (30.8 ) 6.1
Change in cash and cash equivalents 309.8
(39.2 )
Cash and cash equivalents at beginning of period 996.8
1,032.0
Cash and cash equivalents at end of period $ 1,306.6
$ 992.8

~~(1)~~

The increase in net cash from operating activities for the nine months ended September 30, 2018 as compared to the comparable 2017 period was primarily due to the absence of an $85.0 million payment made in 2017 related to the lender-placed market conduct examination settlement agreements. Also contributing was an increase of sales in our Connected Living business, lower inventory purchases in our mobile business and a $26.7 million increase in cash from the settlement of a series of derivative transactions that we entered into in 2017 to hedge interest rate risk related to the anticipated



	Six Months Ended June 30,
	2019			2018
	(in millions)
Operating activities
Net income attributable to stockholders	$	309.8		$	173.0
Adjustments to reconcile net income to net cash provided by operating activities:
Noncash revenues, expenses, gains and losses included in income:
Deferred tax expense	53.6			24.7
Amortization of deferred gains on disposal of businesses	(12.5		)	(33.5		)
Depreciation and amortization	60.1			54.9
Net realized (gains) losses on investments	(46.6		)	10.9
Loss on business classified as held for sale	—			34.4
Stock based compensation expense	25.7			21.7
Other intangible asset impairment	14.6			—
Changes in operating assets and liabilities:
Change in insurance policy reserves and expenses	501.0			(434.0		)
Change in premiums and accounts receivable	(99.4		)	(39.6		)
Change in reinsurance recoverable	85.1			644.8
Change in reinsurance balance payable	(12.7		)	(3.4		)
Change in funds withheld under reinsurance	34.4			(31.2		)
Change in deferred acquisition costs and value of business acquired	(438.6		)	(206.1		)
Change in accounts payable	194.3			(285.1		)
Change in other assets and other liabilities	12.7			103.4
Change in taxes payable	30.1			103.2
Other	14.1			34.2
Net cash provided by operating activities	725.7			172.3
Investing activities
Sales of:
Fixed maturity securities available for sale	1,262.3			1,465.8
Equity securities	52.5			57.2
Other invested assets	22.1			35.6
Maturities, calls, prepayments, and scheduled redemption of:
Fixed maturity securities available for sale	295.9			377.1
Commercial mortgage loans on real estate	32.2			78.3
Purchases of:
Fixed maturity securities available for sale	(1,731.7		)	(1,646.8		)
Equity securities	(43.8		)	(39.4		)
Commercial mortgage loans on real estate	(52.3		)	(131.6		)
Other invested assets	(24.9		)	(19.7		)
Property and equipment and other	(57.8		)	(38.1		)
Subsidiaries, net of cash transferred	—			(1,213.5		)
Consolidated investment entities (1):
Purchases of investments	(874.0		)	(828.3		)
Sale of investments	488.5			294.8
Change in short-term investments	18.9			94.9
Other	2.5			(1.1		)
Net cash used in investing activities	(609.6		)	(1,514.8		)

Assurant, Inc.

Consolidated Statements of Cash Flows (unaudited)

~~Nine~~Six Months Ended ~~September~~June 30, ~~2018~~2019 and ~~2017~~2018

borrowings to be used for the TWG acquisition (all in 2018). These are partially offset by a $41.5 million payment of an accrued indemnification liability in 2018 related to the previous sale of our general agency business and claim payments made, net of reinsurance, related to losses from 2017 reportable catastrophes.



Financing activities
Issuance of mandatory convertible preferred stock, net of issuance costs (2)	—			276.4
Issuance of debt, net of issuance costs (3)	—			1,286.1
Repayment of debt (3)	—			(350.0		)
Issuance of collateralized loan obligation notes (1)	416.4			404.9
Issuance of debt for consolidated investment entities (1)	189.1			385.4
Repayment of debt for consolidated investment entities (1)	(318.1		)	(296.3		)
Acquisition of common stock	(98.5		)	(6.9		)
Common stock dividends paid	(75.7		)	(60.6		)
Preferred stock dividends paid	(9.3		)	(4.8		)
Withholding on stock based compensation	14.7			6.1
Non-controlling interest	—			7.7
Other	—			(3.5		)
Net cash provided by financing activities	118.6			1,644.5
Effect of exchange rate changes on cash and cash equivalents	1.7			(22.8		)
Cash included in business classified as held for sale	—			(22.3		)
Change in cash and cash equivalents	236.4			256.9
Cash and cash equivalents at beginning of period	1,254.0			996.8
Cash and cash equivalents at end of period	$	1,490.4		$	1,253.7


(1)	Relates to cash flows from our variable interest entities. Refer to Note 8 for further information.


(2)	~~Relates to the sale of Mortgage Solutions, refer~~Refer to Note ~~20 - Dispositions~~14 for additional information.

(3)

Amounts for the nine months ended September 30, 2018 primarily consist of $1.49 billion of cash used to fund a portion of the total purchase of the TWG acquisition, inclusive of the $595.9 million repayment of pre-existing TWG debt at the Acquisition Date (such debt was not legally assumed by Assurant), net of $380.1 million in TWG cash acquired. The remaining consideration for the TWG acquisition was funded by the issuance of 10,399,862 common shares. Refer to Note ~~4 - Acquisitions~~11 for additional information.


~~(4)~~	~~Relates to cash flows from our consolidated variable interest entities. Refer to Note 8 - Variable Interest Entities for further information.~~


~~(5)~~	~~Refer to Note 12 - Debt for additional information.~~

See the accompanying Notes to Consolidated Financial Statements

Assurant, Inc.

Notes to Consolidated Financial Statements (unaudited)

(In millions, except number of shares and per share amounts)

1. Nature of Operations

Assurant, Inc. (the “Company”) is a global provider of risk management solutions in the housing and lifestyle markets, protecting where people live and the goods they buy. ~~Assurant~~The Company operates in North America, Latin America, Europe and Asia Pacific through three operating segments: Global Housing, Global Lifestyle and Global Preneed. ~~Assurant~~The Company partners with clients who are leaders in their industries to provide consumers a diverse range of protection products and services. Through its Global Housing segment, ~~Assurant~~the Company provides lender-placed ~~homeowners; manufactured housing insurance; flood insurance; and~~homeowners insurance (referred to as “Lender-placed Insurance”); renters insurance and related products (referred to as ~~our “multi-family housing” business)~~“Multifamily Housing”); manufactured housing and flood insurance and other specialty products (referred to as “Specialty and Other”). Through its Global Lifestyle segment, ~~Assurant~~the Company provides mobile device protection products and related services and extended service products and related services for consumer electronics and appliances (referred to as ~~our~~ “Connected Living” ~~business)~~); vehicle protection and related services (referred to as ~~our~~ “Global Automotive” ~~business)~~); and credit ~~insurance~~ and other insurance (referred to as ~~our “Financial Services” business)~~“Global Financial Services and Other”). Through its Global Preneed segment, the Company provides pre-funded funeral insurance and annuity products. On May 31, 2018, the Company completed its acquisition of TWG Holdings Limited and its subsidiaries (“TWG”). Refer to Note 4 for additional information. On August 1, 2018, the Company sold its valuation and field services business (referred to as our "mortgage solutions" business). Refer to Note 20 for additional information.

The ~~Company~~Company’s common stock is traded on the New York Stock Exchange under the symbol ~~“AIZ”.~~“AIZ.”

2. Basis of Presentation

The accompanying unaudited interim ~~consolidated financial statements~~Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information. Accordingly, these statements do not include all of the information and notes required by GAAP for complete financial statements. ~~The consolidated financial statements include the results of TWG from June 1, 2018.~~

The interim financial data as of ~~September~~June 30, ~~2018~~2019 and for the three and ~~nine~~six months ended ~~September~~June 30, 2019 and 2018 ~~and 2017~~ is ~~unaudited; in~~unaudited. In the opinion of management, the interim data includes all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of the results for the interim periods. The unaudited interim ~~consolidated financial statements~~Consolidated Financial Statements include the accounts of the Company and all of its wholly owned subsidiaries. All inter-company transactions and balances are eliminated in consolidation.

Management generally identifies highly inflationary markets as those markets whose cumulative inflation rates over a three-year period exceeds 100%, in addition to considering other qualitative and quantitative factors. Beginning July 1, 2018, as a result of the classification of Argentina's economy as highly inflationary, the functional currency of our Argentina subsidiaries changed from the local currency to U.S. Dollars. The subsidiaries' non-U.S. Dollar denominated monetary assets and liabilities were subject to remeasurement for the period between July 1, 2018 and September 30, 2018. Following a 43% decline in the exchange rate during this period, the remeasurement resulted in $17.9 million of net pre-tax losses which we classified within underwriting, general and administrative expenses in the consolidated statements of operations. Based on the relative size of our subsidiaries' operations and net assets subject to remeasurement, we do not anticipate the ongoing remeasurement to have a material impact on our results of operations or financial condition.

Operating results for the three and ~~nine~~six months ended ~~September~~June 30, ~~2018~~2019 are not necessarily indicative of the results that may be expected for the year ending December 31, ~~2018.~~2019. The accompanying unaudited interim ~~consolidated financial statements~~Consolidated Financial Statements should be read in conjunction with the audited ~~consolidated financial statements~~Consolidated Financial Statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2017 (the “2017 annual financial statements”).~~2018.

3. Recent Accounting Pronouncements

Adopted

~~Revenue recognition from contracts with customers:~~Lease accounting: On January 1, ~~2018,~~2019, the Company adopted the new lease guidance ~~related to revenue recognition from contracts with customers.~~on a modified retrospective basis and therefore did not restate comparative periods. The new guidance ~~was adopted using~~requires that entities recognize assets and liabilities associated with leases on the ~~modified retrospective approach, whereby~~balance sheet and disclose key information about leasing arrangements. The Company and its subsidiaries lease office space and equipment under operating lease arrangements for which the ~~cumulative effect~~Company is the lessee. Therefore, the primary change at the time of adoption involved the recognition of right-of-use assets and lease liabilities related to ~~retained earnings was recognized as~~operating leases with terms in excess of 12 months in which the Company is the lessee. Upon adoption, the Company elected the package of practical expedients permitted under the transition guidance, which allowed the carryforward of 1) historical lease classifications, 2) the prior assessment of whether a contract is or contains a lease, and 3) initial direct costs for any leases that existed prior to adoption. As of January 1, ~~2018~~2019, the new lease liability and ~~the~~right-of-use asset was

~~Assurant, Inc.~~

~~Notes to Consolidated Financial Statements (unaudited)~~

~~(In millions, except number~~$85.3 million and $78.0 million, respectively. Deferred rent liability of ~~shares and per share amounts)~~

~~comparative information~~$7.3 million, which was ~~not restated and continues to be reported~~required under the ~~accounting standards in effect for those periods.~~previous guidance, was reversed. There was an immaterial impact on equity upon adoption.

The guidance affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards. Insurance and similar contracts issued by insurance entities are specifically excluded from the scope of the amended revenue recognition guidance. As such, this standard only applies to the Company’s service contracts and sales of products, including those related to providing administrative services, mobile device related services, mortgage property risk management services and similar fee for service arrangements. Revenues from these contracts correspond to approximately 15% of the Company’s total revenues for the nine months ended September 30, 2018. The standard utilizes a five-step approach that emphasizes the recognition of revenue when the performance obligations are met by the Company in order to reflect the transfer of promised goods or services to customers in an amount that reflects the consideration the Company expects to receive.

As of June 30, 2019, the ~~adoption date,~~lease liability and right-of-use asset was $84.7 million and $76.7 million, respectively. These balances are included in accounts payable and other liabilities ~~decreased by $10.0 million,~~and other assets, ~~decreased by $0.3 million, retained earnings increased by $7.5 million, and deferred taxes increased by $2.2 million due to a change~~respectively, in the revenue recognition associated with certain mobile upgrade programs. The change reflects the recognition of mobile device upgrade revenue in proportion to the pattern of rights expected to be exercised as opposed to recognition when the event (upgrade or end of term) occurs. The comparable mobile upgrade programs impacted by this change were immaterial in prior periods.

Upon adoption of the new revenue recognition guidance, the Company’s revenues for service contracts and sales of products are subject to additional disclosure requirements, such as those related to providing disaggregated revenue disclosure, changes in contract balances, enhanced description of performance obligations, basis of determining costs and related significant judgments used in determining appropriate revenue recognition procedures. Refer to Note 6 for additional information on contract revenues.

~~Financial instruments measurement and classification:~~ On January 1, 2018, the Company adopted the amended guidance on the measurement and classification of financial instruments whereby all common and preferred stocks are measured at fair value with changes in fair value recognized through income. Upon adoption, the Company recorded a cumulative effect adjustment to increase retained earnings by $33.9 million, which represents a reclassification of the unrealized gains on common and preferred stock as of the date of adoption from AOCI. The Company's other-than-temporary impairment policies have been updated to reflect that the change in value for preferred and common stocks are now reported in net income. For certain private equity investments recorded in Other investments, the Company elected the measurement alternative to record these investments at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for an identical or similar investment of the same issuer. This measurement alternative has been applied on a prospective basis.

~~Income tax consequences for intra-entity transfers of assets:~~ On January 1, 2018, the Company adopted the amended guidance on tax accounting for intra-entity transfers of assets. The amended guidance requires an entity to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs as opposed to when it has been sold to an outside party. Additionally, the amended guidance eliminates the exception for an intra-entity transfer of an asset other than inventory. The adoption of this amended guidance did not have an impact on the Company’s financial position and results of operations.

~~Statement of cash flows presentation and classification:~~ On January 1, 2018, the Company adopted the amended guidance on presentation and classification in the statement of cash flows. The amended guidance addresses certain specific cash flow issues including debt prepayment and debt extinguishment costs; settlement of zero-coupon or insignificant coupon debt instruments; contingent consideration payments made after a business combination; proceeds from the settlement of insurance claims; proceeds from the settlement of corporate-owned life insurance policies (including bank-owned life insurance policies); distributions received from equity method investees; beneficial interests in securitization transactions; and guidance related to the identification of the primary source for separately identifiable cash flows. The adoption of this amended guidance did not have an impact on the Company’s financial position and results of operations.

~~Accounting for hedging activities~~: On January 1, 2018, the Company adopted the amended guidance related to hedge effectiveness testing requirements, income statement presentation and disclosure and hedge accounting qualification criteria. The amended guidance requires that realized gains and losses on forecasted transactions are recorded in the financial statement

~~Assurant, Inc.~~

~~Notes to Consolidated Financial Statements (unaudited)~~

~~(In millions, except number of shares and per share amounts)~~

line item to which the underlying forecasted transactions relates; simplifies the ongoing effectiveness testing; and reduces the complexity of hedge accounting requirements for new derivative contracts. The adoption of this amended guidance did not have a material impact on the Company's financial position and results of operations.

~~Classification of certain tax effects from accumulated other comprehensive income:~~ In February 2018, the Financial Accounting Standards Board ("FASB") issued amended guidance on reclassifying the stranded tax effects from the Tax Cuts and Jobs Act of 2017 ("TCJA") from accumulated other comprehensive income to retained earnings. The amended guidance is effective in fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Therefore, the Company is required to adopt the guidance on January 1, 2019. Early adoption is permitted including adoption in any interim period for reporting periods in which financial statements have not yet been issued. The amendments in this guidance should be applied either in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the U.S. federal corporate income tax rate in the TCJA is recognized. During the three months ended September 30, 2018, the Company early adopted the new guidance with application in the period of adoption and reclassified $(82.0) million from accumulated other comprehensive income to retained earnings, with no impact on net income or total stockholders’ equity. Accounting standards require the effect of a change in tax laws or rates on deferred tax liabilities or assets be included in net income in the reporting period that includes the enactment date, even though the related income tax effects may have been originally charged or credited to accumulated other comprehensive income. The amounts reclassified relate to the difference between the original tax effect of items included in other comprehensive income, such as unrealized gains or losses on securities and unamortized net losses on pension plans, and the revised tax effects from the TCJA.

~~Not Yet Adopted~~

~~Targeted Improvements to the Accounting for Long-duration Contracts~~: In August 2018, the FASB issued guidance that provides targeted improvements to the accounting for long-duration contracts. The guidance includes the following primary changes: assumptions supporting benefit reserves will no longer be locked-in but must be updated at least annually with the impact of changes to the liability reflected in earnings (except for discount rates); the discount rate assumptions will be based on an upper-medium grade (low credit risk) fixed-income instruments instead of the earnings rate of invested assets; the discount rate must be evaluated at each reporting date and the impact of changes to the liability estimate as a result of updating the discount rate assumption is required to be recognized in other comprehensive income; the provision for adverse deviation is eliminated; and premium deficiency testing is eliminated. Other noteworthy changes include the following: differing models for amortizing deferred acquisition costs will become uniform for all long-duration contracts based on a constant rate over the expected term of the related in-force contracts; all market risk benefits associated with deposit contracts must be reported at fair value with changes reflected in income except for changes related to credit risk which will be recognized in other comprehensive income; and disclosures will be expanded to include disaggregated roll forwards of the liability for future policy benefits, policyholder account balances, market risk benefits, separate account liabilities, and deferred acquisition costs, as well as information about significant inputs, judgments, assumptions and methods used in measurement.

For public business entities, the guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. Early adoption is permitted. Generally, the amendments are applied retrospectively as of the beginning of the earliest period presented with two transition options available for the changing the assumptions.

This guidance will apply to the Company’s preneed life insurance policies, as well as its annuity and universal life products (which are no longer offered and are in runoff). The Company is evaluating the requirements of this guidance and the potential impact on the Company’s financial position and results of operations.

~~Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract:~~ In August 2018, the FASB issued guidance aligning the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The accounting for the service element of a hosting arrangement that is a service contract is not affected by the amendments. The guidance is effective for public business entities for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption is permitted, including adoption in any interim period. The guidance is required to be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. The Company is evaluating the requirements of this guidance and the potential impact on the Company’s financial position and results of operations.consolidated balance sheets.

Assurant, Inc.

Notes to Consolidated Financial Statements (unaudited)

(In millions, except number of shares and per share amounts)

~~Reporting~~For the three and six months ended June 30, 2019, the operating lease cost recognized for leases with terms in excess of 12 months was $5.6 million and $11.4 million, respectively, and related cash outflows reducing the lease liability was $5.5 million and $10.6 million, respectively. At June 30, 2019, the weighted average remaining lease term and discount rate was 6.7 years and 4.5%, respectively.

Not Yet Adopted

Measurement of credit losses ~~of assets~~on financial instruments held at amortized cost (“CECL”): In June 2016, the ~~FASB~~Financial Accounting Standards Board (“FASB”) issued amended guidance on reporting credit losses for assets held at amortized cost and available for sale debt securities. For assets held at amortized cost, the amended guidance eliminates the probable recognition threshold and instead requires an entity to reflect the current estimate of all expected credit losses. For available for sale debt securities, credit losses will be measured in a manner similar to current accounting requirements; however, the amended guidance requires that credit losses be presented as an allowance rather than as a permanent impairment. The amendments 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 ~~amended guidance is effective in fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Therefore, the~~ Company ~~is required~~expects to adopt the amended guidance on its effective date of January 1, 2020. ~~Early adoption is permitted as of the fiscal years beginning after December 15, 2018, including interim periods within those fiscal years.~~ The Company is evaluating the requirements of this amended guidance and the potential impact on the Company’s financial position and results of operations. While the Company expects an increase in its allowances for credit losses related to financial assets within scope of the standard, principally reinsurance receivables and commercial mortgage loans on real estate, the amount of the allowance will be dependent on the asset composition and economic conditions at that time of adoption.

~~Lease~~Financial Instruments—Credit Losses: Targeted Transition Relief: In May 2019, the FASB issued guidance which provides transition relief for entities adopting CECL. The transition relief will allow companies to irrevocably elect, upon adoption of CECL, the fair value option on financial instruments that were previously measured at amortized cost basis. The fair value option election does not apply to held-to-maturity debt securities. Entities are required to make this election on an instrument-by-instrument basis.

The effective date of the guidance will be the same as the effective date for CECL. An entity may early adopt the guidance in any interim period after its issuance if the entity has adopted CECL. The transition amendments should be applied on a modified-retrospective basis by means of a cumulative-effect adjustment to the opening balance of retained earnings balance in the statement of financial position as of the date that an entity adopted the amendments in CECL. The Company is evaluating the cost and benefit of the transition relief from this guidance in its overall adoption of the guidance under CECL and the potential impact on the Company’s financial position and results of operations.

Customer’s accounting for implementation costs incurred in a cloud computing arrangement that is a service contract: In ~~February 2016,~~August 2018, the FASB issued ~~new~~ guidance ~~on leases, which replaces~~aligning the ~~current lease guidance. The new~~requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. For these arrangements, the guidance ~~requires that entities recognize~~also limits the ~~assets and liabilities associated with leases~~period to expense capitalized implementation costs based on the ~~balance sheet and disclose key information about leasing arrangements.~~term of the hosting agreement, including the noncancellable period of the arrangement plus periods covered by options to extend the arrangement that are reasonably certain of exercise. The ~~new~~accounting for the service element of a hosting arrangement that is a service contract is not affected by the amendments. The guidance is effective infor public business entities for fiscal years beginning after December 15, ~~2018, including~~2019, and interim periods within those fiscal years. ~~Therefore, the Company~~Early adoption is permitted, including adoption in any interim period. The guidance is required to ~~adopt~~be applied either retrospectively or prospectively to all implementation costs incurred after the ~~guidance on January 1, 2019. Early adoption is permitted.~~date of adoption. The Company is evaluating the requirements of this guidance and ~~its subsidiaries lease office space and equipment under operating lease arrangements. Therefore,~~ the ~~primary change at~~potential impact on the time of adoption is anticipated to be the recognition of right-of-use assets and lease liabilities related to operating leases with terms in excess of 12 months in which the Company is the lessee. The Company does not expect the adoption of the standard to have a material effect on itsCompany’s financial position orand results of operations.

~~4. Acquisitions~~

~~TWG Acquisition~~

~~On May 31,~~Targeted improvements to the accounting for long-duration contracts: In August 2018, ~~(the “Acquisition Date”),~~ the ~~Company completed~~FASB issued guidance that provides targeted improvements to the ~~acquisition~~accounting for long-duration contracts. The guidance includes the following primary changes: assumptions supporting benefit reserves will no longer be locked-in but must be updated at least annually with the impact of ~~TWG Holdings Limited (“TWG”)~~changes to the liability reflected in earnings (except for discount rates); the discount rate assumptions will be based on an upper-medium grade (low credit risk) fixed-income instrument yield instead of the earnings rate of invested assets; the discount rate must be evaluated at each reporting date and ~~its subsidiaries for a total enterprise value~~the impact of ~~$2.47 billion. This amount included $894.9 million in cash,~~changes to the ~~repayment of TWG’s $595.9 million pre-existing debt and $975.5 million in newly-issued Assurant, Inc. common stock. As~~liability estimate as a result of updating the ~~equityholders of TWG, including TPG Capital, received a total of 10,399,862 shares of Assurant, Inc. common stock. TWG specializes~~discount rate assumption is required to be recognized in other comprehensive income; the ~~underwriting, administration~~provision for adverse deviation is eliminated; and ~~marketing of service~~premium deficiency testing is eliminated. Other noteworthy changes include the following: differing models for amortizing deferred acquisition costs will become uniform for all long-duration contracts based on a ~~wide variety of consumer goods, including automobiles, consumer electronics and major home appliances. The acquisition will enhance~~constant rate over the ~~Company's position as a leading lifestyle provider, particularly within the Global Automotive business, with significant operating synergies~~ expected and a deepened global footprint. The Company financed the cash consideration and repayment of TWG's pre-existing debt through a combination of available cash and external financing. Refer to Notes 12 and 15 for more information on the issuances of debt and mandatory convertible preferred stock, respectively, related to the financingterm of the ~~acquisition.~~

~~Acquisition Consideration~~

~~The table below details the purchase consideration:~~

~~Calculation of acquisition consideration~~related in-force contracts; all market risk benefits associated with deposit contracts must be reported at fair

Common stock shares issued to TWG equityholders 10,399,862
Volume weighted average common share price of Assurant, Inc. on May 31, 2018 $ 93.80
Share issuance consideration $ 975.5
Aggregate cash consideration 894.9
Repayment of pre-existing TWG debt 595.9
Total acquisition consideration $ 2,466.3

~~Fair Value of Net Assets Acquired and Liabilities Assumed~~

~~The fair values listed below are estimates and are subject to adjustment, including assessment of the value of business~~

Assurant, Inc.

Notes to Consolidated Financial Statements (unaudited)

(In millions, except number of shares and per share amounts)

~~acquired ("VOBA")~~value with changes reflected in income except for changes related to credit risk which will be recognized in other comprehensive income; and ~~other intangible assets,~~disclosures will be expanded to include disaggregated roll forwards of the liability for future policy benefits, policyholder account balances, market risk benefits, separate account liabilities, and deferred acquisition costs, as well as information about significant inputs, judgments, assumptions and methods used in measurement.

For public business entities, the guidance is effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. Early adoption is permitted. Generally, the amendments are applied retrospectively as of the beginning of the earliest period presented with two transition options available for changing the assumptions. In July 2019, the FASB voted for a proposal to extend the effective date of this guidance. If adopted, the proposal would extend the effective date for public business entities that are SEC filers to fiscal years beginning after December 15, 2021 (with early adoption permitted).

4. Acquisitions

TWG Acquisition

On May 31, 2018 (the “Acquisition Date”), the Company acquired TWG Holdings Limited and its subsidiaries (as subsequently reorganized, “TWG”) for total consideration of $2.47 billion. This amount included $894.9 million in cash, the repayment of TWG’s $595.9 million pre-existing debt and issuance of $975.5 million of Assurant, Inc. common stock. As a result, the equityholders of TWG, including TPG Capital and certain ~~components~~ of ~~deferred tax liabilities included within accounts payable~~its affiliates (“TPG”), received a total of 10.4 million shares of Assurant, Inc. common stock. In March 2019, TPG sold all remaining shares of common stock held by certain of its affiliates in an underwritten secondary public offering. TWG specializes in the underwriting, administration and ~~other liabilities.~~ marketing of service contracts on a wide variety of consumer goods, including automobiles, consumer electronics and major home appliances.

Fair Value of Net Assets Acquired and Liabilities Assumed

The initial accounting for the net assets acquired and liabilities assumed included certain provisional amounts recorded as of June 30, 2018 (the end of the reporting period in which the acquisition occurred). InDuring the ~~third quarter~~measurement period (which included the period from June 1, 2018 to May 31, 2019), the Company ~~made adjustments to~~adjusted the provisional amounts to reflect new information obtained about facts and circumstances that existed as of the Acquisition Date, ~~that,~~which, if known, would have affected the measurement of the amounts recognized as of that date. Such adjustments impacted certain identifiable assets acquired and liabilities assumed, resulting in a net increase to total identifiable net assets acquired and a corresponding decrease in goodwill of ~~$55.8~~$25.7 million. The adjustments to income that would have been recognized in previous periods if the ~~revisions~~measurement period adjustments had been completed as of the Acquisition Date were immaterial. ~~The Company may recognize additional measurement period adjustments~~

Assurant, Inc.

Notes to ~~the provisional amounts in future periods until one year from the Acquisition Date.~~Consolidated Financial Statements (unaudited)

(In millions, except number of shares and per share amounts)

Assets acquired and (liabilities) assumed ~~(updated as of September 30, 2018)~~


Fixed maturity securities available for sale	$	2,268.8		$	2,268.8
Equity securities	49.4			49.4
Short-term investments	165.5			165.5
Other investments	100.9			100.9
Cash and cash equivalents	380.1			380.1
Premiums and accounts receivable, net	274.2			286.2
Reinsurance recoverables	1,917.5			1,908.7
Accrued investment income	31.6			31.6
Property and equipment	15.4			15.4
Value of business acquired	4,048.0			3,973.0
Other intangible assets	459.3			459.7
Other assets	214.1			200.0
Unearned premiums and contract fees	(7,598.1		)	(7,512.6		)
Claims and benefits payable	(420.5		)	(419.9		)
Commissions payable				(106.8		)
Reinsurance balances payable	(186.1		)	(186.1		)
Funds held under reinsurance	(200.8		)	(202.2		)
Accounts payable and other liabilities	(459.2		)	(381.7		)
Non-controlling interest	(1.8		)	(1.8		)
Total identifiable net assets acquired	1,058.3			1,028.2
Goodwill	1,408.0			1,438.1
Total acquisition consideration	$	2,466.3		$	2,466.3

Total goodwill of ~~$1.41~~$1.44 billion is mainly attributable to expected growth and profitability, none of which is expected to be deductible for income tax purposes. ~~Total~~

VOBA and Other Intangible Assets

The following table shows the purchase price allocation to value of ~~$4.05 billion~~business acquired (“VOBA”) and ~~amortizable~~ other intangible assets, including the effect of ~~$447.7~~measurement period adjustments to provisional estimates as described above.



	Amount
Value of business acquired (1)	$	3,973.0

Finite life (1):
Customer related intangibles (distribution network)	$	390.3
Technology based intangibles	57.8
Total finite life other intangible assets	448.1
Indefinite life:
Contract based intangibles	11.6
Total other intangible assets	$	459.7


(1)	Refer to future estimated amortization table below for the amortization pattern of VOBA and other intangible assets with finite lives.

Total amortization of VOBA related to TWG for the three months ended June 30, 2019 and 2018 was $294.0 million ~~will be amortized over their~~and $34.2 million, respectively, and for the six months ended June 30, 2019 and 2018 was $592.4 million and $34.2 million,

Assurant, Inc.

Notes to Consolidated Financial Statements (unaudited)

(In millions, except number of shares and per share amounts)

respectively. Total amortization of other intangible assets related to TWG for the three months ended June 30, 2019 and 2018 was $4.6 million and $1.4 million, respectively, and for the six months ended June 30, 2019 and 2018 was $9.1 million and $1.4 million, respectively. At June 30, 2019, the estimated ~~useful~~amortization of VOBA and other intangible assets with finite lives ~~ranging from 3~~related to ~~15 years. Refer to Note 11~~TWG for ~~additional information.~~the remainder of 2019, the next five years and thereafter is as follows:



Period	VOBA		Other Intangible Assets (with Finite Lives)
July 1 - December 31, 2019	$	503.9	$	9.5
2020	812.7		26.1
2021	570.6		31.0
2022	350.8		34.9
2023	203.7		36.2
2024	91.7		36.6
Thereafter	7.5		254.1
Total	$	2,540.9	$	428.4

Acquisition-related Costs

Transaction costs related to the acquisition were expensed as incurred. These costs include advisory, legal, accounting, valuation and other professional or consulting fees, as well as general and administrative costs. Transaction costs incurred to date in connection with the acquisition of TWG totaled ~~$39.5 million, including $0.2 million and $30.2 million~~$40.4 million. There were no significant transactions costs for the three and ~~nine~~six months ended ~~September~~June 30, 2019. Transaction costs included in the three and six months ended June 30, 2018 ~~respectively, which~~were $24.8 million and $30.0 million, respectively. Transaction costs were reported through the underwriting, general and administrative expenses line item in the consolidated statements of operations.

As a part of the ongoing integration of ~~TWG's~~TWG’s operations, the Company has incurred, and will continue to incur, costs associated with restructuring systems, processes and workforce. These costs include such items as severance, retention, facilities and consulting. Integration costs incurred to date in connection with the acquisition of TWG totaled $47.1 million, including $6.2 million and $10.5 million for the three months ended June 30, 2019 and 2018, respectively, and $16.6 million and $12.8 million for the six months ended June 30, 2019 and 2018, respectively, which were reported through the underwriting, general and administrative expenses line item in the consolidated statements of operations.

5. Segment Information

As of June 30, 2019, the Company had four reportable segments, which are defined based on the manner in which our chief operating decision maker, the Chief Executive Officer (“CEO”), reviews the business to assess performance and allocate resources, and align to the nature of the products and services offered:

Global Housing: provides lender-placed homeowners insurance; renters insurance and related products (referred to as “Multifamily Housing”); and manufactured housing and flood insurance and other specialty products (referred to as “Specialty and Other”);

Global Lifestyle: provides mobile device protection products and related services and extended service products and related services for consumer electronics and appliances (referred to as “Connected Living”); vehicle protection and related services (referred to as “Global Automotive”); and credit and other insurance (referred to as “Global Financial Services and Other”);

Global Preneed: provides pre-funded funeral insurance and annuity products; and

Assurant, Inc.

Notes to Consolidated Financial Statements (unaudited)

(In millions, except number of shares and per share amounts)

facilities and consulting. Integration costs incurred to date in connection with the acquisition of TWG totaled $23.6 million, including $10.1 million and $22.9 million for the three and nine months ended September 30, 2018, respectively, which were reported through the underwriting, general and administrative expenses line item in the consolidated statements of operations.

~~Financial Results~~

The following table summarizes the results of the acquired TWG operations since the Acquisition Date that have been included within our consolidated statements of operations (based on how TWG was allocated to the Company's reportable segments).

June 1, 2018 to September 30, 2018
Global Lifestyle Corporate and Other (1) Total
Total revenues $ 863.9
$ (5.2 ) $ 858.7
Net income $ 39.3
$ (17.6 ) $ 21.7

~~(1)~~

The TWG operating results allocated to the Corporate and Other segment included $11.6 million of net pre-tax losses as a result of the remeasurement of the Argentina subsidiary's non-U.S. Dollar denominated monetary assets and liabilities, pre-tax integration expenses and net realized losses on investments, partially offset by income tax benefits, which include a $5.7 million tax structuring benefit. Refer to Note 2 - Basis of Presentation for further information on the net losses due to remeasurement and Note 19 - Income Taxes for further information on the income tax benefit.

~~Supplemental Pro Forma Information~~

The following table provides unaudited supplemental pro forma consolidated information for the nine months ended September 30, 2018 and 2017, as if TWG had been acquired as of January 1, 2017. The unaudited supplemental pro forma consolidated financial information is presented solely for informational purposes and is not necessarily indicative of the consolidated results of operations that might have been achieved had the transaction been completed as of the date indicated, nor are they meant to be indicative of any anticipated consolidated future results of operations that the combined company will experience after the transaction.

Nine Months Ended
September 30,
2018 2017
Total revenues $ 6,790.2
$ 6,331.6
Net income $ 306.8
$ 247.1

For the nine months ended September 30, 2017, pro forma net income includes $26.0 million of nonrecurring transaction and integration costs, net of taxes. For the pro forma presentation, given the assumed acquisition date of January 1, 2017, transaction and integration costs that were incurred at, or subsequent to, the actual acquisition date have been included in the 2017 pro forma net income, whereas transaction and integration costs that were incurred prior to the actual acquisition date have been excluded from the 2017 pro forma net income.

~~Prior year acquisition~~

On February 1, 2017, the Company acquired 100% of Green Tree Insurance Holdings, Corp. and its subsidiaries Green Tree Insurance Agency and Green Tree Insurance Agency Reinsurance Limited (collectively “Green Tree”) for $125.0 million in cash with a potential earn-out of up to $25.0 million, based on future performance. Green Tree sells housing protection products, including voluntary homeowners and manufactured housing policies, and other insurance products. In connection with the acquisition, including measurement period adjustments, the Company recorded $10.4 million of net liabilities and $69.6 million of agency relationship and renewal rights intangible assets, all of which are amortizable over periods ranging from 7 to 16 years, and $65.8 million of goodwill, none of which is tax-deductible. The primary factors contributing to the recognition of goodwill is future expected growth of this business and operating synergies within Global Housing.

~~Assurant, Inc.~~

~~Notes to Consolidated Financial Statements (unaudited)~~

~~(In millions, except number of shares and per share amounts)~~

~~5. Segment Information~~

As of September 30, 2018, the Company had four reportable segments, which are defined based on the manner in which our Chief Operating Decision Makers, the Chief Executive Officer ("CEO") and the Chief Operating Officer ("COO"), review the business to assess performance and allocate resources, and align to the nature of the products and services offered:

•~~Global Housing: provides lender-placed homeowners; manufactured housing and flood insurance; and renters insurance and related products (referred to as multifamily housing).~~

•Global Lifestyle: provides mobile device protection and related services and extended service products and related services (referred to as Connected Living); vehicle protection services (referred to as Global Automotive) and credit insurance and other insurance (referred to as Financial Services).

•~~Global Preneed: provides pre-funded funeral insurance.~~

•~~Total~~ Corporate and Other: ~~Corporate and Other~~ includes activities of the holding company, financing and interest expenses, net realized gains (losses) on investments, interest income earned from short-term investments held and income (expenses) primarily related to the ~~Company's~~Company’s frozen benefit plans. Corporate and Other also includes the amortization of deferred gains associated with the sales of ~~Fortis Financial Group, Long-Term Care and Assurant Employee Benefits ("AEB")~~businesses through reinsurance agreements, expenses related to the acquisition of TWG, foreign currency gains (losses) from remeasurement of monetary assets and liabilities, the gain or loss on the sale of businesses and other unusual or infrequent items. Additionally, the ~~Total~~ Corporate and Other segment includes amounts related to the runoff of the Assurant Health ~~business, which is in runoff. As Assurant Health was a reportable segment in prior years, these amounts are disclosed separately in the following segment tables for comparability.~~business.

The following tables summarize selected financial information by segment:



	Three Months Ended June 30, 2019

	Global Housing		Global Lifestyle		Global Preneed		Corporate and Other			Consolidated
Revenues
Net earned premiums	$	471.8	$	1,545.5	$	15.4	$	—		$	2,032.7
Fees and other income	38.3		263.6		34.2		—			336.1
Net investment income	18.8		56.5		70.6		8.3			154.2
Net realized gains on investments	—		—		—		17.8			17.8
Amortization of deferred gains on disposal of businesses	—		—		—		4.7			4.7
Total revenues	528.9		1,865.6		120.2		30.8			2,545.5
Benefits, losses and expenses
Policyholder benefits	207.8		412.9		66.2		0.1			687.0
Amortization of deferred acquisition costs and value of business acquired	57.5		740.7		17.6		—			815.8
Underwriting, general and administrative expenses (1)	173.3		570.2		14.7		74.7			832.9
Interest expense	—		—		—		26.5			26.5
Total benefits, losses and expenses	438.6		1,723.8		98.5		101.3			2,362.2
Segment income (loss) before provision (benefit) for income tax	90.3		141.8		21.7		(70.5		)	183.3
Provision (benefit) for income taxes	18.8		32.5		4.8		(15.4		)	40.7
Segment income (loss) after taxes	71.5		109.3		16.9		(55.1		)	142.6
Less: Net loss attributable to non-controlling interests	—		—		—		1.5			1.5
Net income (loss) attributable to stockholders	71.5		109.3		16.9		(53.6		)	144.1
Less: Preferred stock dividends	—		—		—		(4.6		)	(4.6		)
Net income (loss) attributable to common stockholders	$	71.5	$	109.3	$	16.9	$	(58.2	)	$	139.5
	As of June 30, 2019

Segment assets:	$	4,029.6	$	22,113.9	$	7,264.6	$	9,731.4		$	43,139.5


(1)	Corporate and Other includes a $14.6 million impairment of certain intangible assets from the acquisition of Green Tree Insurance Agency (“Green Tree”) as a result of recent developments related to the financial status of a business partner providing new and renewal business to Green Tree.

Assurant, Inc.

Notes to Consolidated Financial Statements (unaudited)

(In millions, except number of shares and per share amounts)



	Three Months Ended June 30, 2018

	Global Housing		Global Lifestyle		Global Preneed		Corporate and Other			Consolidated
Revenues
Net earned premiums	$	449.7	$	874.3	$	14.2	$	0.1		$	1,338.3
Fees and other income	92.8		227.9		32.7		0.8			354.2
Net investment income	15.9		36.6		67.9		15.2			135.6
Net realized losses on investments	—		—		—		(11.4		)	(11.4		)
Amortization of deferred gains on disposal of businesses	—		—		—		15.0			15.0
Total revenues	558.4		1,138.8		114.8		19.7			1,831.7
Benefits, losses and expenses
Policyholder benefits	187.2		239.3		65.0		(0.9		)	490.6
Amortization of deferred acquisition costs and value of business acquired	50.4		395.6		17.2		—			463.2
Underwriting, general and administrative expenses	229.3		419.6		13.8		110.9			773.6
Interest expense	—		—		—		26.0			26.0
Total benefits, losses and expenses	466.9		1,054.5		96.0		136.0			1,753.4
Segment income (loss) before provision (benefit) for income tax	91.5		84.3		18.8		(116.3		)	78.3
Provision (benefit) for income taxes	18.9		16.2		4.1		(27.9		)	11.3
Segment income (loss) after taxes	72.6		68.1		14.7		(88.4		)	67.0
Less: Preferred stock dividends	—		—		—		(4.8		)	(4.8		)
Net income (loss) attributable to common stockholders	$	72.6	$	68.1	$	14.7	$	(93.2	)	$	62.2

Three Months Ended September 30, 2018
Total Corporate and Other
Global Housing Global Lifestyle Global Preneed
Corporate
and
Other
Health Total Consolidated
Revenues
Net earned premiums $ 463.0
$ 1,376.0
$ 14.6
$ —
$ —
$ —
$ 1,853.6
Fees and other income 58.6
165.5
33.5
0.2
0.1
0.3
257.9
Net investment income 17.1
54.7
70.1
9.3
0.6
9.9
151.8
Net realized gains on investments —
—
—
(5.7 ) —
(5.7 ) (5.7 )
Amortization of deferred gains on disposal of businesses (1) —
—
—
12.7
—
12.7
12.7
Total revenues 538.7
1,596.2
118.2
16.5
0.7
17.2
2,270.3
Benefits, losses and expenses
Policyholder benefits (2) 264.8
352.2
64.5
—
(0.6 ) (0.6 ) 680.9
Amortization of deferred
  acquisition costs and value of
  business acquired
51.2
681.5
17.9
—
—
—
750.6
Underwriting, general and
  administrative expenses
198.7
463.0
14.4
59.1
1.3
60.4
736.5
Interest expense —
—
—
26.5
—
26.5
26.5
Total benefits, losses and
  expenses
514.7
1,496.7
96.8
85.6
0.7
86.3
2,194.5
Segment income before
  provision for income tax
24.0
99.5
21.4
(69.1 ) —
(69.1 ) 75.8
Provision for income taxes 4.6
23.6
4.6
(9.8 ) (0.2 ) (10.0 ) 22.8
Segment income after tax 19.4
75.9
16.8
(59.3 ) 0.2
(59.1 ) 53.0
Less: Preferred stock dividends —
—
—
(4.7 ) —
(4.7 ) (4.7 )
Net income attributable to
  common stockholders
$ 19.4
$ 75.9
$ 16.8
$ (64.0 ) $ 0.2
$ (63.8 ) $ 48.3
As of September 30, 2018

Segment assets: $ 4,242.4
$ 20,931.7
$ 7,045.2
$ 11,162.2
$ 61.6
$ 11,223.8
$ 43,443.1

Assurant, Inc.

Notes to Consolidated Financial Statements (unaudited)

(In millions, except number of shares and per share amounts)


	Three Months Ended September 30, 2017																			Six Months Ended June 30, 2019
								Total Corporate and Other
	Global Housing			Global Lifestyle		Global Preneed		Corporate and Other			Health			Total			Consolidated			Global Housing		Global Lifestyle		Global Preneed		Corporate and Other			Consolidated
Revenues
Net earned premiums	$	423.0		$	636.0	$	14.0	$	—		$	0.1		$	0.1		$	1,073.1		$	931.9	$	2,974.0	$	31.2	$	—		$	3,937.1
Fees and other income	107.3			205.7		30.6		4.5			1.0			5.5			349.1			78.2		516.7		67.5		2.0			664.4
Net investment income	23.6			33.1		66.4		8.6			0.9			9.5			132.6			44.2		115.4		139.7		21.2			320.5
Net realized gains on investments	—			—		—		8.5			—			8.5			8.5			—		—		—		46.6			46.6
Amortization of deferred gains on disposal of businesses ~~(1)~~	—			—		—		23.1			—			23.1			23.1			—		—		—		12.5			12.5
Total revenues	553.9			874.8		111.0		44.7			2.0			46.7			1,586.4			1,054.3		3,606.1		238.4		82.3			4,981.1
Benefits, losses and expenses
Policyholder benefits ~~(2)~~	436.7			190.6		62.6		—			(7.7		)	(7.7		)	682.2			406.7		760.1		134.8		0.1			1,301.7
Amortization of deferred acquisition costs and value of business acquired	49.7			266.1		16.7		—			—			—			332.5			111.4		1,446.5		35.2		—			1,593.1
Underwriting, general and administrative expenses	235.0			371.9		13.3		38.2			8.7			46.9			667.1
Underwriting, general and administrative expenses (1)																				354.0		1,126.0		31.6		121.4			1,633.0
Interest expense	—			—		—		12.2			—			12.2			12.2			—		—		—		53.0			53.0
Total benefits, losses and expenses	721.4			828.6		92.6		50.4			1.0			51.4			1,694.0			872.1		3,332.6		201.6		174.5			4,580.8
Segment income before provision for income tax	(167.5		)	46.2		18.4		(5.7		)	1.0			(4.7		)	(107.6		)
Provision for income taxes	(57.2		)	3.6		6.1		(3.7		)	0.9			(2.8		)	(50.3		)
Segment income after tax	$	(110.3	)	$	42.6	$	12.3	$	(2.0	)	$	0.1		$	(1.9	)	$	(57.3	)
Segment income (loss) before provision (benefit) for income tax																				182.2		273.5		36.8		(92.2		)	400.3
Provision (benefit) for income taxes																				38.0		63.6		8.1		(20.6		)	89.1
Segment income (loss) after taxes																				144.2		209.9		28.7		(71.6		)	311.2
Less: Net income attributable to non-controlling interests																				—		—		—		(1.4		)	(1.4		)
Net income (loss) attributable to stockholders																				144.2		209.9		28.7		(73.0		)	309.8
Less: Preferred stock dividends																				—		—		—		(9.3		)	(9.3		)
Net income (loss) attributable to common stockholders																				$	144.2	$	209.9	$	28.7	$	(82.3	)	$	300.5


(1)	Corporate and Other includes a $14.6 million impairment of certain intangible assets from the acquisition of Green Tree as a result of recent developments related to the financial status of a business partner providing new and renewal business to Green Tree.

Assurant, Inc.

Notes to Consolidated Financial Statements (unaudited)

(In millions, except number of shares and per share amounts)

Nine Months Ended September 30, 2018
Total Corporate and Other
Global Housing Global Lifestyle Global Preneed
Corporate
and
Other
Health Total Consolidated
Revenues
Net earned premiums $ 1,349.1
$ 2,923.9
$ 43.4
$ —
$ 0.4
$ 0.4
$ 4,316.8
Fees and other income 238.1
638.3
97.8
2.0
0.4
2.4
976.6
Net investment income 53.2
123.4
203.8
34.9
2.3
37.2
417.6
Net realized gains on investments —
—
—
(16.6 ) —
(16.6 ) (16.6 )
Amortization of deferred gains on disposal of businesses (1) —
—
—
46.2
—
46.2
46.2
Total revenues 1,640.4
3,685.6
345.0
66.5
3.1
69.6
5,740.6
Benefits, losses and expenses
Policyholder benefits (2) 621.1
773.1
196.2
—
(4.3 ) (4.3 ) 1,586.1
Amortization of deferred
  acquisition costs and value of
  business acquired
151.2
1,357.4
51.6
—
—
—
1,560.2
Underwriting, general and
  administrative expenses
662.9
1,298.4
44.4
219.5
4.5
224.0
2,229.7
Interest expense —
—
—
74.0
—
74.0
74.0
Total benefits, losses and
  expenses
1,435.2
3,428.9
292.2
293.5
0.2
293.7
5,450.0
Segment income before
  provision for income tax
205.2
256.7
52.8
(227.0 ) 2.9
(224.1 ) 290.6
Provision for income taxes 42.0
56.9
11.5
(46.3 ) 0.5
(45.8 ) 64.6
Segment income after tax 163.2
199.8
41.3
(180.7 ) 2.4
(178.3 ) 226.0
Less: Preferred stock dividends —
—
—
(9.5 ) —
(9.5 ) (9.5 )
Net income attributable to
  common stockholders
$ 163.2
$ 199.8
$ 41.3
$ (190.2 ) $ 2.4
$ (187.8 ) $ 216.5

~~Assurant, Inc.~~

~~Notes to Consolidated Financial Statements (unaudited)~~

~~(In millions, except number of shares and per share amounts)~~


	Nine Months Ended September 30, 2017																Six Months Ended June 30, 2018
							Total Corporate and Other
	Global Housing		Global Lifestyle		Global Preneed		Corporate and Other		Health			Total			Consolidated		Global Housing		Global Lifestyle		Global Preneed		Corporate and Other			Consolidated
Revenues
Net earned premiums	$	1,301.8	$	1,887.8	$	43.8	$	—	$	5.3		$	5.3		$	3,238.7	$	886.1	$	1,547.9	$	28.8	$	0.4		$	2,463.2
Fees and other income	310.4		594.8		91.3		16.3		3.4			19.7			1,016.2		179.5		472.8		64.3		2.1			718.7
Net investment income	59.6		86.0		195.6		28.0		5.7			33.7			374.9		36.1		68.7		133.7		27.3			265.8
Net realized gains on investments	—		—		—		25.1		—			25.1			25.1
Net realized losses on investments																	—		—		—		(10.9		)	(10.9		)
Amortization of deferred gains on disposal of businesses ~~(1)~~	—		—		—		83.5		—			83.5			83.5		—		—		—		33.5			33.5
Total revenues	1,671.8		2,568.6		330.7		152.9		14.4			167.3			4,738.4		1,101.7		2,089.4		226.8		52.4			3,470.3
Benefits, losses and expenses
Policyholder benefits ~~(2)~~	788.2		517.3		190.7		—		(39.6		)	(39.6		)	1,456.6		356.3		420.9		131.7		(3.7		)	905.2
Amortization of deferred acquisition costs and value of business acquired	147.4		800.7		45.6		—		—			—			993.7		100.0		675.9		33.7		—			809.6
Underwriting, general and administrative expenses	723.2		1,067.2		42.5		95.7		36.1			131.8			1,964.7		464.2		835.4		30.0		163.6			1,493.2
Interest expense	—		—		—		37.2		—			37.2			37.2		—		—		—		47.5			47.5
Total benefits, losses and expenses	1,658.8		2,385.2		278.8		132.9		(3.5		)	129.4			4,452.2		920.5		1,932.2		195.4		207.4			3,255.5
Segment income before provision for income tax	13.0		183.4		51.9		20.0		17.9			37.9			286.2
Provision for income taxes	5.2		48.2		16.9		2.8		6.4			9.2			79.5
Segment income after tax	$	7.8	$	135.2	$	35.0	$	17.2	$	11.5		$	28.7		$	206.7
Segment income (loss) before provision (benefit) for income tax																	181.2		157.2		31.4		(155.0		)	214.8
Provision (benefit) for income taxes																	37.4		33.3		6.9		(35.8		)	41.8
Segment income (loss) after taxes																	143.8		123.9		24.5		(119.2		)	173.0
Less: Preferred stock dividends																	—		—		—		(4.8		)	(4.8		)
Net income (loss) attributable to common stockholders																	$	143.8	$	123.9	$	24.5	$	(124.0	)	$	168.2


~~(1)~~	The three months ended September 30, 2018 and 2017 include $10.0 million and $20.4 million, respectively, and the nine months ended September 30, 2018 and 2017 include $39.0 million and $75.2 million, respectively, related to the amortization of deferred gains associated with the 2016 sale of AEB. The remaining AEB unamortized deferred gain as of September 30, 2018 was $24.7 million.

~~(2)~~

The presentation of Assurant Health policyholder benefits includes the impact of the total current period net utilization of premium deficiency reserves for claim costs and claim adjustment expenses included in policyholder benefits, as well as maintenance costs, which are included within underwriting, general and administrative expenses. For the three months ended September 30, 2018 and 2017, the premium deficiency reserve liability decreased $0.1 million and $6.9 million, respectively, through an offset to policyholder benefit expense. For the nine months ended September 30, 2018 and 2017, the premium deficiency reserve liability decreased $0.9 million and $28.8 million, respectively, through an offset to policyholder benefit expense. In addition, there was favorable claims development experienced through September 30, 2018, in excess of actual benefit expense, which contributed to the credit balance within policyholder benefits expenses.

The Company principally operates in the U.S., as well as Europe, Latin America, Canada and Asia. Revenue is based in the country where the product was sold. For the nine months ended September 30, 2018, the Company generated 77% of its revenue from the United States and 23% of its revenue from foreign countries. For the nine months ended September 30, 2017, the Company generated 78% of its revenue from the United States and 22% of its revenue from foreign countries.

6. Contract Revenues

~~Assurant~~The Company partners with clients to provide consumers a diverse range of protection products and services. The Company’s revenues from protection products ~~(approximately 85% of total revenues)~~ are accounted for as insurance contracts and ~~therefore~~ are ~~not subject to~~recognized over the ~~new revenue standard adopted as~~term of ~~January 1, 2018 described in Note 3.~~the insurance protection provided. Revenue from service contracts and sales of products ~~(approximately 15% of total revenues) are recognized in accordance with the new revenue recognition~~

~~Assurant, Inc.~~

~~Notes to Consolidated Financial Statements (unaudited)~~

~~(In millions, except number of shares and per share amounts)~~

~~standard. Specifically, these revenues~~ are recognized as the contractual performance obligations are satisfied or the products are delivered. Revenue is measured as the amount of consideration ~~we expect~~the Company expects to be entitled to in exchange for performing the services or transferring products. If payments are received before the related revenue is recognized, the amount is recorded as unearned revenue or advance payment liabilities, until the performance obligations are satisfied or the products are transferred.

The disaggregated revenues ~~subject to the new revenue recognition standard and~~from service contracts included in fees and other income on the consolidated statement of operations are ~~$48.5~~$27.4 million and ~~$208.8~~$84.2 million for Global Housing and ~~$147.4~~$218.2 million and ~~$471.2~~$151.2 million for Global Lifestyle for the three ~~and nine~~ months ended ~~September~~June 30, 2019 and 2018, respectively. The disaggregated revenues included in fees and other income on the consolidated statement of operations are $57.6 million and $160.3 million for Global Housing and $425.8 million and $324.8 million for Global Lifestyle for the six months ended June 30, 2019 and 2018, respectively.

Assurant, Inc.

Notes to Consolidated Financial Statements (unaudited)

(In millions, except number of shares and per share amounts)

Global Housing

In ~~our~~the Company’s Global Housing segment, revenues from service contracts and sales of products are primarily from ~~our mortgage solutions (until~~the Company’s Lender-placed Insurance business. Under the Company’s Lender-placed Insurance business, the Company provides loan and claim payment tracking services for lenders. Until the sale of the Mortgage Solutions business on August 1, 2018, ~~as described in Note 20) and lender-placed insurance businesses. Under our mortgage solutions business, we~~the Company previously offered valuation and title services and products across the origination, home equity and default markets, as well as field services, inspection services, restoration and real estate owned ~~(“REO”)~~ asset management services to mortgage servicing clients and investors. ~~Under our lender-placed insurance business, we provide loan and claim payment tracking services for lenders. We~~The Company generally ~~invoice our~~invoices its customers weekly or monthly based on the volume of services provided during the billing period with payment due within a short-term period. Each service is an individual performance obligation with a standalone selling price. ~~We recognize~~The Company recognizes revenue as ~~we invoice~~it invoices, which corresponds to the value transferred to the customer.

Global Lifestyle

In ~~our~~the Company’s Global Lifestyle segment, ~~revenue~~revenues from service contracts and sales of products isare primarily from ~~our~~the Company’s Connected Living business. Through partnerships with mobile carriers, ~~we provide~~the Company provides administrative services related to ~~our~~its mobile device protection products including program design and marketing strategy, risk management, data analytics, customer support and claims handling, supply chain and service delivery, repair and logistics, and device disposition. Administrative fees are generally billed monthly based on the volume of services provided during the billing period (for example, based on the number of mobile subscribers) with payment due within a short-term period. Each service or bundle of services, depending on the contract, is an individual performance obligation with a standalone selling price. ~~We recognize~~The Company recognizes revenue as ~~we invoice~~it invoices, which corresponds to the value transferred to the customer.

WeThe Company also ~~sell~~sells repaired or refurbished mobile and other electronic devices. Revenue from products sold is recognized when risk of ownership transfers to customers, generally upon shipment. Each product has a standalone selling price that is determined through analysis of various factors including market data, historical costs and product lifecycle status. Payments are generally due prior to shipment or within a short-term period.

Contract Balances

The receivables and unearned revenue under these contracts were ~~$148.6~~$175.0 million and ~~$91.5~~$93.4 million, respectively, as of ~~September~~June 30, 2019, and $183.7 million and $88.7 million, respectively, as of December 31, 2018. These balances are included in premiums and accounts receivable and the accounts payable and other liabilities, respectively, in the consolidated balance ~~sheet.~~sheets. Revenue from service contracts and sales of products recognized during the three and ~~nine~~six months ended ~~September~~June 30, ~~2018~~2019 that was included in unearned revenue as of December 31, ~~2017~~2018 was ~~$4.9~~$14.6 million and ~~$12.5~~$30.2 million, respectively.

In certain circumstances, the Company ~~pre-pays~~defers upfront commissions and other costs in connection with client contracts in excess of one year where the Company can demonstrate future economic benefit. For these contracts, expense is recognized as revenues are earned. The Company periodically assesses recoverability based on the performance of the related contracts. As of ~~September~~June 30, 2019 and December 31, 2018, the Company has approximately ~~$11.2~~$31.0 million and $29.0 million, respectively, of such intangible assets that will be expensed over the term of the client contracts.

Assurant, Inc.

Notes to Consolidated Financial Statements (unaudited)

(In millions, except number of shares and per share amounts)

7. Investments

The following tables show the cost or amortized cost, gross unrealized gains and losses, fair value and other-than-temporary impairment (“OTTI”) included within ~~accumulated other comprehensive income~~AOCI of the ~~Company's~~Company’s fixed maturity securities ~~(and equity securities for 2017)~~ as of the dates ~~indicated.~~indicated:


	September 30, 2018											June 30, 2019
	Cost or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		OTTI in AOCI (a)		Cost or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		OTTI in AOCI (1)
Fixed maturity securities:
U.S. government and government agencies and authorities	$	333.9	$	2.0	$	(3.3	)	$	332.6	$	—	$	225.0	$	6.1	$	(0.1	)	$	231.0	$	—
States, municipalities and political subdivisions	226.7		15.6		(0.9		)	241.4		—		236.4		26.2		—			262.6		—
Foreign governments	846.6		51.2		(3.1		)	894.7		—		878.7		102.5		(0.1		)	981.1		—
Asset-backed	502.5		1.2		(1.0		)	502.7		—		517.1		1.5		(2.2		)	516.4		—
Commercial mortgage-backed	256.3		0.4		(3.5		)	253.2		—		222.8		10.4		(0.8		)	232.4		—
Residential mortgage-backed	1,248.4		12.3		(29.0		)	1,231.7		5.3		1,212.5		52.0		(2.1		)	1,262.4		4.2
U.S. corporate	5,207.6		345.9		(44.3		)	5,509.2		15.4		5,684.6		690.1		(3.7		)	6,371.0		15.5
Foreign corporate	2,047.2		121.1		(17.2		)	2,151.1		—		2,130.6		242.1		(0.8		)	2,371.9		—
Total fixed maturity securities	$	10,669.2	$	549.7	$	(102.3	)	$	11,116.6	$	20.7	$	11,107.7	$	1,130.9	$	(9.8	)	$	12,228.8	$	19.7

	December 31, 2017											December 31, 2018
	Cost or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		OTTI in AOCI (a)		Cost or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		OTTI in AOCI (1)
Fixed maturity securities:
U.S. government and government agencies and authorities	$	180.6	$	3.2	$	(1.2	)	$	182.6	$	—	$	381.4	$	4.4	$	(1.2	)	$	384.6	$	—
States, municipalities and political subdivisions	302.3		24.0		(0.1		)	326.2		—		238.9		17.6		(0.3		)	256.2		—
Foreign governments	524.8		72.3		(0.3		)	596.8		—		856.3		58.8		(3.0		)	912.1		—
Asset-backed	188.4		1.9		(0.1		)	190.2		1.0		513.6		0.5		(9.6		)	504.5		—
Commercial mortgage-backed	38.6		0.2		(0.7		)	38.1		—		79.1		2.2		(1.6		)	79.7		—
Residential mortgage-backed	1,084.2		32.5		(7.3		)	1,109.4		9.2		1,399.1		21.5		(14.8		)	1,405.8		5.0
U.S. corporate	4,774.2		602.1		(5.0		)	5,371.3		17.4		5,337.0		315.7		(59.7		)	5,593.0		14.1
Foreign corporate	1,663.4		188.6		(4.0		)	1,848.0		—		2,028.6		110.7		(18.1		)	2,121.2		—
Total fixed maturity securities	$	8,756.5	$	924.8	$	(18.7	)	$	9,662.6	$	27.6	$	10,834.0	$	531.4	$	(108.3	)	$	11,257.1	$	19.1
Equity securities:
Common stocks	$	9.3	$	8.4	$	—		$	17.7	$	—
Non-redeemable preferred stocks	307.0		43.8		(0.5		)	350.3		—
Total equity securities	$	316.3	$	52.2	$	(0.5	)	$	368.0	$	—


~~(a)~~(1)	Represents the amount of OTTI recognized in AOCI. Amount includes unrealized gains and losses on impaired securities relating to changes in the value of such securities subsequent to the impairment measurement date.

Assurant, Inc.

Notes to Consolidated Financial Statements (unaudited)

(In millions, except number of shares and per share amounts)

The ~~Company's~~Company’s state, municipality and political subdivision holdings are highly diversified across the U.S., with no individual state, municipality or political subdivision exposure (including both general obligation and revenue securities) exceeding 0.3% and 0.4% of the overall investment portfolio as of ~~September~~June 30, ~~2018~~2019 and December 31, ~~2017,~~2018, respectively. As of ~~September~~June 30, ~~2018~~2019 and December 31, ~~2017, these~~2018, the securities ~~include~~included general obligation and revenue bonds issued by states, cities, counties, school districts and similar issuers, including ~~$58.5~~$59.2 million and ~~$137.7~~$58.4 million, respectively, of advance refunded or escrowed-to-maturity bonds (collectively referred to as “pre-refunded bonds”), which are bonds for which an irrevocable trust has been established to fund the remaining payments of principal and interest. As of ~~September~~June 30, ~~2018~~2019 and December 31, ~~2017,~~2018, revenue bonds ~~account~~accounted for ~~51% and 53%~~56% of the ~~holdings, respectively.~~holdings. Excluding pre-refunded ~~revenue~~ bonds, the activities supporting the income streams of the Company’s revenue bonds ~~span~~are across a broad range of sectors, primarily ~~highway,~~ water, airport and marina, specifically pledged tax revenues, leases and other miscellaneous sources such as bond banks, finance authorities and appropriations.

The Company’s investments in foreign government fixed maturity securities are held mainly in countries and currencies where the Company has policyholder liabilities, to facilitate matching of assets to the related liabilities. As of ~~September~~June 30, 2019, approximately 57%, 18%, 6% and 6% of the foreign government securities were held in Canadian government/provincials and the governments of Brazil, Mexico, and the United Kingdom, respectively. As of December 31, 2018, approximately ~~54%~~55%, 18% and 8% of the foreign government securities were held in Canadian government/provincials and the governments of Brazil and the United Kingdom, respectively. ~~As of December 31, 2017, approximately 79%, 12% and 4% of the foreign government securities were held in Canadian government/provincials and the governments of Brazil and Germany, respectively.~~ No other country represented more than 7%4% and 3%6% of the ~~Company's~~Company’s foreign government securities as of ~~September~~June 30, ~~2018~~2019 and December 31, ~~2017,~~2018, respectively.

The Company had European investment exposure in its corporate fixed maturity securities of ~~$766.8~~$809.4 million with a net unrealized gain of ~~$27.0~~$69.1 million as of ~~September~~June 30, ~~2018~~2019 and ~~$578.4~~$800.9 million with a net unrealized gain of ~~$58.9~~$27.7 million as of December 31, ~~2017.~~2018. Approximately ~~29% and 24%~~27% of the corporate fixed maturity European exposure was held in the financial industry as of ~~September~~June 30, ~~2018~~2019 and December 31, ~~2017, respectively.~~2018. The ~~Company's~~Company’s largest European country exposure (the United Kingdom) represented approximately 4% and 5% of the fair value of the ~~Company's~~Company’s corporate fixed maturity securities as of ~~September~~June 30, ~~2018~~2019 and December 31, ~~2017.~~2018, respectively. The ~~Company's~~Company’s international investments are managed as part of the overall portfolio with the same approach to risk management and focus on diversification.

The cost or amortized cost and fair value of fixed maturity securities as of ~~September~~June 30, ~~2018~~2019 by contractual maturity are shown below. Actual maturities may differ from contractual maturities because issuers of the securities may have the right to call or prepay obligations with or without call or prepayment penalties.


	Cost or Amortized Cost		Fair Value		Cost or Amortized Cost		Fair Value
Due in one year or less	$	274.9	$	276.9	$	330.5	$	332.6
Due after one year through five years	2,523.1		2,533.3		2,553.4		2,638.1
Due after five years through ten years	2,154.8		2,177.5		2,478.9		2,673.6
Due after ten years	3,709.2		4,141.3		3,792.5		4,573.3
Total	8,662.0		9,129.0		9,155.3		10,217.6
Asset-backed	502.5		502.7		517.1		516.4
Commercial mortgage-backed	256.3		253.2		222.8		232.4
Residential mortgage-backed	1,248.4		1,231.7		1,212.5		1,262.4
Total	$	10,669.2	$	11,116.6	$	11,107.7	$	12,228.8

Assurant, Inc.

Notes to Consolidated Financial Statements (unaudited)

(In millions, except number of shares and per share amounts)

The following table sets forth the net realized gains (losses), including OTTI, recognized in the statement of ~~operations:~~operations for the periods indicated:


	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017			2019			2018			2019			2018
Net realized gains (losses) on investments:
Net realized gains (losses) related to sales and other:
Fixed maturity securities	$	(7.7	)	$	2.3		$	(17.9	)	$	16.8		$	8.0		$	(7.6	)	$	7.7		$	(10.2	)
Equity securities (1)	2.3			3.0			(1.4		)	6.8			7.0			(5.9		)	36.9			(3.7		)
Other investments	—			3.6			2.5			2.4			5.2			1.2			5.1			2.5
Consolidated investment entities (2)	0.2			—			0.7			—			(1.8		)	0.9			(2.2		)	0.5
Total net realized gains (losses) on investments	(5.2		)	8.9			(16.1		)	26.0
Total net realized gains (losses) related to sales and other													18.4			(11.4		)	47.5			(10.9		)
Net realized losses related to other-than-temporary impairments:
Fixed maturity securities	—			—			—			(0.4		)	(0.6		)	—			(0.9		)	—
Other investments	(0.5		)	(0.4		)	(0.5		)	(0.5		)
Total net realized losses related to other-than- temporary impairments	(0.5		)	(0.4		)	(0.5		)	(0.9		)
Total net realized gains (losses)	$	(5.7	)	$	8.5		$	(16.6	)	$	25.1		$	17.8		$	(11.4	)	$	46.6		$	(10.9	)

(1)

~~Nine~~Six months ended ~~September~~June 30, 2019 and 2018 includes ~~$10.8~~$10.4 million and $7.8 million, respectively, of gains on ~~two~~ equity investment holdings accounted for under the measurement ~~alternative based~~alternative. There were no changes in fair value recorded on ~~an observable market event where the implied value increased based on new~~equity investments ~~in such holdings. Equity investments~~holdings accounted for under the measurement alternative ~~are included within Other investments on~~for the ~~consolidated balance sheet.~~three months ended June 30, 2019 and 2018.


(2)	Consists of net realized ~~losses~~gains (losses) from the change in fair value of the ~~Company's~~Company’s direct investment in collateralized loan obligations ~~("CLOs"~~(“CLOs”). Refer to Note 8 ~~- Variable Interest Entities~~ for ~~further detail.~~additional information.

The following table sets forth the portion of unrealized gains (losses) related to equity securities during the three and ~~nine~~six months ended ~~September 30,~~March 31, 2019 and 2018:



	Three Months Ended June 30,					Six Months Ended June 30,
	2019		2018			2019			2018
Net gains (losses) recognized on equity securities	$	7.0	$	(5.9	)	$	36.9		$	(3.7	)
Less: Net realized gains (losses) related to sales of equity securities	0.1		2.3			(0.9		)	3.7
Total net unrealized gains (losses) on equity securities held	$	6.9	$	(8.2	)	$	37.8		$	(7.4	)

Three Months Ended
September 30, Nine Months Ended
September 30,
2018 2018
Net gains (losses) recognized on equity securities $ 2.3
$ (1.4 )
Less: Net realized gains related to sales of equity securities 0.2
3.9
Total net unrealized gains (losses) on equity securities held (1) $ 2.1
$ (5.3 )


~~(1)~~	Net gains for 2018 are required to be reported through the income statement in accordance with the 2018 accounting guidance on financial instruments. Net unrealized gains of $6.0 million and $15.0 million in the three and nine months ended September 30, 2017, respectively, were reported through AOCI.

~~The carrying value of equity securities accounted for under the measurement alternative was $51.7 million and $36.1 million as of September 30, 2018 and December 31, 2017, respectively.~~

Assurant, Inc.

Notes to Consolidated Financial Statements (unaudited)

(In millions, except number of shares and per share amounts)

The investment category and duration of the Company’s gross unrealized losses on fixed maturity securities as of ~~September~~June 30, ~~2018~~2019 and December 31, ~~2017~~2018 were as follows:


	September 30, 2018															June 30, 2019
	Less than 12 months					12 Months or More					Total					Less than 12 months					12 Months or More					Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
Fixed maturity securities:
U.S. government and government agencies and authorities	$	252.8	$	(2.2	)	$	61.4	$	(1.1	)	$	314.2	$	(3.3	)	$	—	$	—		$	46.0	$	(0.1	)	$	46.0	$	(0.1	)
States, municipalities and political subdivisions	41.2		(0.7		)	3.1		(0.2		)	44.3		(0.9		)
Foreign governments	378.5		(2.8		)	6.7		(0.3		)	385.2		(3.1		)	49.7		(0.1		)	—		—			49.7		(0.1		)
Asset-backed	202.2		(0.9		)	2.2		(0.1		)	204.4		(1.0		)	206.5		(1.9		)	23.5		(0.3		)	230.0		(2.2		)
Commercial mortgage-backed	199.8		(2.2		)	11.9		(1.3		)	211.7		(3.5		)	1.8		(0.1		)	18.3		(0.7		)	20.1		(0.8		)
Residential mortgage-backed	778.2		(17.5		)	187.8		(11.5		)	966.0		(29.0		)	11.5		(0.1		)	148.6		(2.0		)	160.1		(2.1		)
U.S. corporate	2,178.3		(38.5		)	87.2		(5.8		)	2,265.5		(44.3		)	64.2		(1.6		)	62.3		(2.1		)	126.5		(3.7		)
Foreign corporate	879.3		(13.3		)	99.7		(3.9		)	979.0		(17.2		)	32.5		(0.4		)	22.3		(0.4		)	54.8		(0.8		)
Total fixed maturity securities	$	4,910.3	$	(78.1	)	$	460.0	$	(24.2	)	$	5,370.3	$	(102.3	)	$	366.2	$	(4.2	)	$	321.0	$	(5.6	)	$	687.2	$	(9.8	)


	December 31, 2017															December 31, 2018
	Less than 12 months					12 Months or More					Total					Less than 12 months					12 Months or More					Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
Fixed maturity securities:
U.S. government and government agencies and authorities	$	104.2	$	(0.7	)	$	43.3	$	(0.5	)	$	147.5	$	(1.2	)	$	11.2	$	(0.1	)	$	89.5	$	(1.1	)	$	100.7	$	(1.2	)
States, municipalities and political subdivisions	—		—			2.4		(0.1		)	2.4		(0.1		)	31.5		(0.1		)	3.1		(0.2		)	34.6		(0.3		)
Foreign governments	24.4		(0.2		)	0.8		(0.1		)	25.2		(0.3		)	136.4		(2.8		)	9.2		(0.2		)	145.6		(3.0		)
Asset-backed	27.6		(0.1		)	—		—			27.6		(0.1		)	370.6		(9.6		)	—		—			370.6		(9.6		)
Commercial mortgage-backed	—		—			12.4		(0.7		)	12.4		(0.7		)	29.4		(0.7		)	12.4		(0.9		)	41.8		(1.6		)
Residential mortgage-backed	217.3		(2.4		)	162.9		(4.9		)	380.2		(7.3		)	378.2		(3.7		)	309.6		(11.1		)	687.8		(14.8		)
U.S. corporate	562.8		(4.5		)	30.0		(0.5		)	592.8		(5.0		)	1,860.4		(49.5		)	173.1		(10.2		)	2,033.5		(59.7		)
Foreign corporate	266.7		(3.5		)	19.0		(0.5		)	285.7		(4.0		)	706.6		(12.9		)	149.5		(5.2		)	856.1		(18.1		)
Total fixed maturity securities	$	1,203.0	$	(11.4	)	$	270.8	$	(7.3	)	$	1,473.8	$	(18.7	)	$	3,524.3	$	(79.4	)	$	746.4	$	(28.9	)	$	4,270.7	$	(108.3	)
Equity securities:
Non-redeemable preferred stock	$	13.8	$	(0.2	)	$	8.7	$	(0.3	)	$	22.5	$	(0.5	)

Total gross unrealized losses represented approximately 2%1% and 1%3% of the aggregate fair value of the related securities ~~with such unrealized losses~~ as of ~~September~~June 30, ~~2018~~2019 and December 31, ~~2017,~~2018, respectively. Approximately ~~76%~~43% and ~~61%~~73% of these gross unrealized losses ~~have~~had been in a continuous loss position for less than twelve months as of ~~September~~June 30, ~~2018~~2019 and December 31, ~~2017,~~2018, respectively. The total gross unrealized losses are comprised of ~~2,501~~332 and ~~679~~2,642 individual securities as of ~~September~~June 30, ~~2018~~2019 and December 31, ~~2017,~~2018, respectively. In accordance with its policy, the Company concluded that for these securities, other-than-temporary impairments of the gross unrealized losses was not warranted as of ~~September~~June 30, ~~2018~~2019 and December 31, ~~2017.~~2018.

The Company has entered into commercial mortgage loans, collateralized by the underlying real estate, on properties located throughout the U.S. and Canada. As of ~~September~~June 30, ~~2018,~~2019, approximately ~~34%~~35% of the outstanding principal balance of commercial mortgage loans was concentrated in the states of California, ~~Oregon,~~Utah and ~~Utah.~~Oregon. Although the Company has a diversified loan portfolio, an economic downturn could have an adverse impact on the ability of its debtors to repay their loans. The outstanding balance of commercial mortgage loans range in size from $0.1 million to $12.4 million as of June 30, 2019 and from $0.1 million to $12.5 million as of December 31, 2018.

Assurant, Inc.

Notes to Consolidated Financial Statements (unaudited)

(In millions, except number of shares and per share amounts)

diversified loan portfolio, an economic downturn could have an adverse impact on the ability of its debtors to repay their loans. The outstanding balance of commercial mortgage loans range in size from less than $0.1 million to $12.6 million as of September 30, 2018 and less than $0.1 million to $12.7 million as of December 31, 2017.

8. Variable Interest Entities

In the normal course of business, the Company is involved with various types of investment entities ~~which~~that may be considered variable interest entities ~~("VIEs"~~(“VIEs”). The Company evaluates its involvement with each entity to determine whether consolidation is required. The Company’s maximum risk of loss is limited to the carrying value and unfunded commitments of its investments in the VIEs.

Consolidated VIEs

One of ~~our~~the Company’s subsidiaries is registered with the U.S. Securities and Exchange Commission (the ~~"SEC"~~“SEC”) as an investment ~~adviser and~~adviser. The subsidiary (or one of its affiliates) manages and invests in CLOs and a real estate ~~fund~~funds and may conduct other forms of investment activities. The Company has determined that the CLOs and real estate ~~fund~~funds are VIEs and consolidated each because the Company was deemed to be the primary beneficiary of these entities due to (i) its role as collateral manager, which gives it the power to direct the activities that most significantly impact the economic performance of the entities, and (ii) its economic interest in the entities, which exposes it to losses and the right to receive benefits that could potentially be significant to the entities.

In connection with ~~planned~~the formation of CLO structures, the Company forms special purpose entities capitalized by contributions from the ~~Company's~~Company’s wholly owned subsidiaries. Subsequent to capitalization, the special purpose entities purchase senior secured leveraged loans funded by contributions from the Company and a short-term warehousing credit facility. Borrowings from the warehousing credit facility are non-recourse to the Company and are fully repaid once the CLO closes. Additionally, the amounts contributed by the Company to fund the initial capitalization are returned after the CLO closes. The Company may elect to use the return of capital to purchase a direct investment in the CLO.

Collateralized Loan Obligations: The CLO entities are collateralized financing entities. The carrying value of the CLO ~~liabilities is equal to~~debt equals the fair value of the CLO assets (senior secured leveraged loans) as the assets have more observable fair values. The CLO liabilities are reduced by the beneficial interests the Company retains in the CLO. CLO earnings attributable to the Company’s shareholders are measured by the change in the fair value of the Company’s CLO investments, net investment income earned and investment management and contingent performance fees earned. Investment management fees are reported as a reduction to investment expenses in the consolidated statements of operations. The assets of the CLOs are legally isolated from the Company’s creditors ~~of the Company~~ and can only be used to settle the obligations of the CLOs. The liabilities of the CLOs are non-recourse to the Company and the Company has no obligations to satisfy the liabilities of the CLOs.

~~The Company's third CLO closed in August 2018.~~ As of ~~September~~June 30, ~~2018,~~2019, the Company and its subsidiaries ~~hold~~held a range of ~~3.4%~~43.8% to ~~9.4%~~100.0% of the most subordinated debt tranches of ~~its three CLOs~~four CLO entities and ~~4.6%~~5.0% of senior debt tranches in one ~~CLO. At September~~CLO entity, which represents a range of 6.0% to 8.8% overall ownership in each of the CLO entities. As of June 30, ~~2018,~~2019, a ~~fourth~~fifth CLO structure was funded with ~~$20.0~~$73.0 million in contributions from the ~~Company's~~Company’s wholly owned subsidiaries. The carrying value of the Company’s investment in the CLOs that have closed was ~~$21.4~~$90.1 million ~~in a senior debt tranche~~ and ~~$74.1~~$55.2 million in subordinated debt tranches and $21.2 million and $21.0 million in senior debt tranches as of ~~September~~June 30, ~~2018.~~2019 and December 31, 2018, respectively.

Real Estate ~~Fund:~~Funds: The Company’s real estate fund investments are closed ended funds that include contributions from third party investors, which are recorded as non-controlling interests. Real estate fund earnings attributable to the Company’s shareholders are measured by the net investment income of the real estate ~~fund,~~funds, which includes the change in fair value of the Company’s investments in the real estate ~~fund,~~funds and investment management fees earned. During the six months ended June 30, 2019, the Company formed a second real estate fund capitalized with $15.4 million of contributions from the Company’s wholly owned subsidiaries. The Company has a majority investment in ~~this fund~~the real estate funds in the form of an equity ~~interest.~~interests. The carrying value of the Company’s investment in the real estate ~~fund~~funds was ~~$83.3~~$116.2 million ~~with unfunded commitments of $3.4~~and $91.5 million as of ~~September~~June 30, ~~2018.~~2019 and December 31, 2018, respectively. The Company’s unfunded commitment in the real estate funds was $3.8 million as of June 30, 2019.

For all consolidated investment entities, intercompany transactions are eliminated upon consolidation.

Fair Value of VIE Assets and Liabilities

The Company categorizes its fair value measurements according to a three-level hierarchy. See Note 9 for the definition of the three levels of the fair value hierarchy. The following table presents the ~~balances of assets and liabilities held by consolidated investment entities measured at~~Company’s fair value ~~on a recurring basis. Amounts presented are as of September 30, 2018 and December 31, 2017, respectively.~~hierarchy for financial

Assurant, Inc.

Notes to Consolidated Financial Statements (unaudited)

(In millions, except number of shares and per share amounts)

September 30, 2018
Total Level 1 Level 2 Level 3
Financial Assets
Investments:
Cash and cash equivalents $ 125.3
$ 125.3
(1) $ —
$ —
Corporate debt securities 1,348.8
—
1,348.8
—
Real estate fund 102.1
—
—
102.1
Total financial assets $ 1,576.2
$ 125.3
$ 1,348.8
$ 102.1

Financial Liabilities
Collateralized loan obligation notes $ 1,177.7
$ —
$ 1,177.7
$ —
Total financial liabilities $ 1,177.7
$ —
$ 1,177.7
$ —
assets and liabilities held by consolidated investment entities measured at fair value on a recurring basis as of the dates indicated:


	December 31, 2017									June 30, 2019
	Total		Level 1			Level 2		Level 3		Total		Level 1			Level 2		Level 3
Financial Assets
Investments:
Cash and cash equivalents	$	54.5	$	54.5	(1)	$	—	$	—	$	84.8	$	84.8	(1)	$	—	$	—
Corporate debt securities	570.3		—			570.3		—		1,838.9		—			1,838.9		—
Real estate fund	84.7		—			—		84.7
Real estate funds										138.2		—			—		138.2
Total financial assets	$	709.5	$	54.5		$	570.3	$	84.7	$	2,061.9	$	84.8		$	1,838.9	$	138.2

Financial Liabilities
Collateralized loan obligation notes	$	450.7	$	—		$	450.7	$	—	$	1,616.5	$	—		$	1,616.5	$	—
Total financial liabilities	$	450.7	$	—		$	450.7	$	—	$	1,616.5	$	—		$	1,616.5	$	—



	December 31, 2018
	Total		Level 1			Level 2		Level 3
Financial Assets
Investments:
Cash and cash equivalents	$	62.6	$	62.6	(1)	$	—	$	—
Corporate debt securities	1,464.2		—			1,464.2		—
Real estate funds	112.0		—			—		112.0
Total financial assets	$	1,638.8	$	62.6		$	1,464.2	$	112.0

Financial Liabilities
Collateralized loan obligation notes	$	1,316.7	$	—		$	1,316.7	$	—
Total financial liabilities	$	1,316.7	$	—		$	1,316.7	$	—


(1)	Amounts consist of money market funds.

Level 2 Securities

Corporate debt securities: These assets are comprised of senior secured leveraged loans. The Company values these securities using estimates of fair value from a pricing service which utilizes the market valuation technique. The primary observable market inputs used by the pricing service are prices of reported trades from dealers. The fair value is calculated using a simple average of the prices received.

Collateralized loan obligation notes: As the Company elected the measurement alternative, the carrying value of the CLO ~~liabilities~~debt is ~~set~~ equal to the fair value of the CLO assets. The CLO notes are classified within Level 2 of the fair value hierarchy, consistent with the classification of the majority of the CLO financial assets.

Level 3 Securities

Real estate ~~fund:~~funds: These assets are comprised of investments in limited partnerships whose underlying investments are real estate properties. The market, income and cost approach valuation techniques are used to calculate fair value as appropriate given the type of real estate property, as well as the use of independent external appraisals. Significant unobservable inputs, including capitalization rates, discount rates, market comparables, expense growth rates, leasing assumptions and replacement costs, are used as appropriate to calculate fair value.

The following table summarizes the change in balance sheet carrying value associated with Level 3 assets held by consolidated investment entities measured at fair value during the three and nine months ended September 30, 2018:

Assurant, Inc.

Notes to Consolidated Financial Statements (unaudited)

(In millions, except number of shares and per share amounts)


							Three Months Ended June 30,					Six Months Ended June 30,
	Three Months Ended September 30, 2018			Nine Months Ended September 30, 2018			2019		2018			2019		2018
Balance, beginning of period	$	102.5		$	84.7		$	121.4	$	86.8		$	112.0	$	84.7
Purchases	—			23.0			15.4		23.0			15.4		23.0
Sales	—			(6.8		)	—		(6.8		)	—		(6.8		)
Total (loss) income included in earnings	(0.4		)	1.2
Total income (loss) included in retained earnings							1.4		(0.5		)	10.8		1.6
Balance, end of period	$	102.1		$	102.1		$	138.2	$	102.5		$	138.2	$	102.5

9. Fair Value Disclosures

Fair Values, Inputs and Valuation Techniques for Financial Assets and Liabilities Disclosures

The fair value measurements and disclosures guidance defines fair value and establishes a framework for measuring fair value. 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. In accordance with this guidance, the Company has categorized its recurring fair value basis financial assets and liabilities into a three-level fair value hierarchy based on the priority of the inputs to the valuation technique.

The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the fair value measurement in its entirety falls has been determined based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and takes into account factors specific to the asset or liability.

The levels of the fair value hierarchy are described below:

Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company can access.

Level 2 inputs utilize other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the ~~asset.~~asset or liability. Level 2 inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active and inputs other than quoted prices that are observable in the marketplace for the ~~asset.~~asset or liability. The observable inputs are used in valuation models to calculate the fair value for the ~~asset.~~asset or liability.

Level 3 inputs are unobservable but are significant to the fair value measurement for the asset or liability, and include situations where there is little, if any, market activity for the ~~asset.~~asset or liability. These inputs reflect management’s own assumptions about the assumptions a market participant would use in pricing the ~~asset.~~asset or liability.

The Company reviews fair value hierarchy classifications on a quarterly basis. Changes in the observability of valuation inputs may result in a reclassification of levels for certain securities within the fair value hierarchy. In such instances, the transfer between levels is reported as of the beginning of the reporting period.

The following tables present the Company’s fair value hierarchy for assets and liabilities measured at fair value on a recurring basis as of ~~September~~June 30, ~~2018~~2019 and December 31, ~~2017.~~2018. The amounts presented below for ~~Short-term~~short-term investments, ~~Other~~other investments, ~~Cash~~cash equivalents, ~~Other~~other receivables, other assets, ~~Assets~~assets held in and ~~Liabilities held in~~liabilities related to separate accounts and ~~Other~~other liabilities differ from the amounts presented in the consolidated balance sheets because only certain investments or certain assets and liabilities within these line items are measured at estimated fair value. Other investments are comprised of investments in the Assurant Investment Plan (“AIP”), the American Security Insurance Company Investment Plan, the Assurant Deferred Compensation Plan, a modified coinsurance ~~arrangements~~arrangement and other derivatives. Other liabilities are comprised of investments in the Assurant Investment Plan, contingent considerations related to business combinations and other derivatives. The fair value amount and the majority of the associated levels presented for Other investments and Assets and Liabilities held in separate accounts are received directly from third parties.

Assurant, Inc.

Notes to Consolidated Financial Statements (unaudited)

(In millions, except number of shares and per share amounts)

investments in the AIP, contingent considerations related to business combinations and other derivatives. The fair value amount and the majority of the associated levels presented for other investments and assets and liabilities held in separate accounts are received directly from third parties.


	September 30, 2018											June 30, 2019
	Total		Level 1			Level 2			Level 3			Total		Level 1			Level 2			Level 3
Financial Assets
Fixed maturity securities:
U.S. government and government agencies and authorities	$	332.6	$	—		$	332.6		$	—		$	231.0	$	—		$	231.0		$	—
State, municipalities and political subdivisions	241.4		—			241.4			—
States, municipalities and political subdivisions												262.6		—			262.6			—
Foreign governments	894.7		0.4			894.3			—			981.1		0.5			980.6			—
Asset-backed	502.7		—			500.7			2.0			516.4		—			514.8			1.6
Commercial mortgage-backed	253.2		—			195.3			57.9			232.4		—			192.8			39.6
Residential mortgage-backed	1,231.7		—			1,231.7			—			1,262.4		—			1,258.6			3.8
U.S. corporate	5,509.2		—			5,496.9			12.3			6,371.0		—			6,359.7			11.3
Foreign corporate	2,151.1		—			2,100.0			51.1			2,371.9		—			2,320.8			51.1
Equity securities:
Mutual funds	45.5		45.5			—			—			44.2		44.2			—			—
Common stocks	17.5		16.8			0.7			—			18.8		18.1			0.7			—
Non-redeemable preferred stocks	322.4		—			320.2			2.2			329.2		—			327.0			2.2
Short-term investments	558.8		354.2		(2)	204.6			—			321.9		216.1		(2)	105.8			—
Other investments	231.3		70.2		(1)	159.6		(3)	1.5		(4)	235.0		70.6		(1)	163.9		(3)	0.5		(4)
Cash equivalents	608.6		607.1		(2)	1.5		(3)	—			607.8		604.0		(2)	3.8		(3)	—
Other receivables	4.9		—			—			4.9		(6)	5.0		—			—			5.0		(6)
Other assets	5.5		—			2.4		(5)	3.1			4.7		—			0.7		(5)	4.0		(5)
Assets held in separate accounts	1,870.8		1,685.8		(1)	185.0		(3)	—			1,799.1		1,621.4		(1)	177.7		(3)	—
Total financial assets	$	14,781.9	$	2,780.0		$	11,866.9		$	135.0		$	15,594.5	$	2,574.9		$	12,900.5		$	119.1

Financial Liabilities
Other liabilities	$	117.0	$	70.2	(1)	$	—		$	46.8	(6)	$	123.9	$	70.6	(1)	$	0.2	(5)	$	53.1	(6)
Liabilities related to separate accounts	1,870.8		1,685.8		(1)	185.0		(3)	—			1,799.1		1,621.4		(1)	177.7		(3)	—
Total financial liabilities	$	1,987.8	$	1,756.0		$	185.0		$	46.8		$	1,923.0	$	1,692.0		$	177.9		$	53.1

Assurant, Inc.

Notes to Consolidated Financial Statements (unaudited)

(In millions, except number of shares and per share amounts)


	December 31, 2017											December 31, 2018
	Total		Level 1			Level 2			Level 3			Total		Level 1			Level 2			Level 3
Financial Assets
Fixed maturity securities:
U.S. government and government agencies and authorities	$	182.6	$	—		$	182.6		$	—		$	384.6	$	—		$	384.6		$	—
State, municipalities and political subdivisions	326.2		—			326.2			—
States, municipalities and political subdivisions												256.2		—			256.2			—
Foreign governments	596.8		1.0			595.8			—			912.1		0.5			911.6			—
Asset-backed	190.2		—			150.8			39.4			504.5		—			504.5			—
Commercial mortgage-backed	38.1		—			9.5			28.6			79.7		—			40.8			38.9
Residential mortgage-backed	1,109.4		—			1,109.4			—			1,405.8		—			1,405.8			—
U.S. corporate	5,371.3		—			5,350.2			21.1			5,593.0		—			5,580.3			12.7
Foreign corporate	1,848.0		—			1,802.7			45.3			2,121.2		—			2,071.7			49.5
Equity securities:
Mutual funds												45.0		45.0			—			—
Common stocks	17.7		17.0			0.7			—			15.3		14.6			0.7			—
Non-redeemable preferred stocks	350.3		—			348.1			2.2			318.5		—			316.3			2.2
Short-term investments	284.1		141.6		(2)	142.5			—			336.0		188.9		(2)	147.1			—
Other investments	253.9		71.2		(1)	172.7		(3)	10.0		(4)	224.9		62.9		(1)	161.5		(3)	0.5		(4)
Cash equivalents	544.9		519.1		(2)	25.8		(3)	—			527.7		523.6		(2)	4.1		(3)	—
Other receivables												5.0		—			—			5.0		(6)
Other assets	2.1		—			—			2.1		(5)	2.6		—			—			2.6		(5)
Assets held in separate accounts	1,800.6		1,635.2		(1)	165.4		(3)	—			1,575.7		1,400.1		(1)	175.6		(3)	—
Total financial assets	$	12,916.2	$	2,385.1		$	10,382.4		$	148.7		$	14,307.8	$	2,235.6		$	11,960.8		$	111.4

Financial Liabilities
Other liabilities	$	128.7	$	71.2	(1)	$	1.0	(5)	$	56.5	(6)	$	104.8	$	62.9	(1)	$	0.7	(5)	$	41.2	(6)
Liabilities related to separate accounts	1,800.6		1,635.2		(1)	165.4		(3)	—			1,575.7		1,400.1		(1)	175.6		(3)	—
Total financial liabilities	$	1,929.3	$	1,706.4		$	166.4		$	56.5		$	1,680.5	$	1,463.0		$	176.3		$	41.2


(1)	Primarily includes mutual funds and related obligations.


(2)	Primarily includes money market funds.


(3)	Primarily includes fixed maturity securities and related obligations.


(4)	Primarily includes fixed maturity securities and other derivatives.


(5)	Primarily includes other derivative assets and liabilities.


(6)	Primarily includes contingent consideration ~~assets/~~receivables/liabilities ~~related to business combinations, dispositions~~ and ~~other derivatives.~~


~~(7)~~	~~Primarily includes fixed maturity securities and certificates of deposit.~~derivative financial instruments.

Assurant, Inc.

Notes to Consolidated Financial Statements (unaudited)

(In millions, except number of shares and per share amounts)

The following tables disclose the carrying value, fair value ~~amount~~ and hierarchy level of the financial instruments that are not recognized or are not carried at fair value in the consolidated balance ~~sheets:~~sheets as of the dates indicated:


	September 30, 2018										June 30, 2019
			Fair Value										Fair Value
	Carrying Value		Total		Level 1		Level 2		Level 3		Carrying Value		Total		Level 1		Level 2		Level 3
Financial Assets
Commercial mortgage loans on real estate	$	757.9	$	730.3	$	—	$	—	$	730.3	$	783.1	$	811.6	$	—	$	—	$	811.6
Other investments	94.6		94.6		34.5		—		60.1		139.2		139.2		31.3		—		107.9
Other assets	44.2		44.2		—		—		44.2		36.9		36.9		—		—		36.9
Total financial assets	$	896.7	$	869.1	$	34.5	$	—	$	834.6	$	959.2	$	987.7	$	31.3	$	—	$	956.4
Financial Liabilities
Policy reserves under investment products (Individual and group annuities, subject to discretionary withdrawal) (1)	$	605.5	$	598.0	$	—	$	—	$	598.0	$	564.4	$	568.9	$	—	$	—	$	568.9
Funds withheld under reinsurance	279.0		279.0		279.0		—		—		308.0		308.0		308.0		—		—
Debt	2,005.4		2,080.7		—		2,080.7		—		2,007.3		2,169.3		—		2,169.3		—
Total financial liabilities	$	2,889.9	$	2,957.7	$	279.0	$	2,080.7	$	598.0	$	2,879.7	$	3,046.2	$	308.0	$	2,169.3	$	568.9

	December 31, 2017										December 31, 2018
			Fair Value										Fair Value
	Carrying Value		Total		Level 1		Level 2		Level 3		Carrying Value		Total		Level 1		Level 2		Level 3
Financial Assets
Commercial mortgage loans on real estate	$	670.2	$	679.2	$	—	$	—	$	679.2	$	759.6	$	735.1	$	—	$	—	$	735.1
Other investments	84.4		84.4		36.3		—		48.1		124.9		124.9		33.9		—		91.0
Other assets											43.0		43.0		—		—		43.0
Total financial assets	$	754.6	$	763.6	$	36.3	$	—	$	727.3	$	927.5	$	903.0	$	33.9	$	—	$	869.1
Financial Liabilities
Policy reserves under investment products (Individual and group annuities, subject to discretionary withdrawal) (1)	$	634.3	$	642.5	$	—	$	—	$	642.5	$	570.6	$	556.8	$	—	$	—	$	556.8
Funds withheld under reinsurance	179.8		179.8		179.8		—		—		272.0		272.0		272.0		—		—
Debt	1,068.2		1,174.4		—		1,174.4		—		2,006.0		2,058.7		—		2,058.7		—
Total financial liabilities	$	1,882.3	$	1,996.7	$	179.8	$	1,174.4	$	642.5	$	2,848.6	$	2,887.5	$	272.0	$	2,058.7	$	556.8


(1)	Only the fair value of the Company’s policy reserves for investment-type contracts (those without significant mortality or morbidity risk) are reflected in the table above.

Reinsurance Recoverables Credit Disclosures

A key credit quality indicator for reinsurance is the A.M. Best Company (“A.M. Best”) financial strength rating of the reinsurer. The A.M. Best ratings are an independent opinion of a reinsurer’s ability to meet ongoing obligations to policyholders. The A.M. Best ratings for new reinsurance agreements where there is material credit exposure are reviewed at the time of execution. The A.M. Best ratings for existing reinsurance agreements are reviewed on a quarterly basis, or sooner based on developments. The A.M. Best ratings for the Company’s four largest reinsurers associated with previously disposed businesses (consisting of Sun Life Assurance Company of Canada, John Hancock Life Insurance Company, Talcott Resolution Life and Annuity Insurance Company and Employers Reassurance Corporation (“ERAC”)) have not changed significantly since December 31, ~~2017,~~2018, except for ~~an increase in reinsurance recoverables that are included in~~ERAC which was affirmed as B+ with a stable outlook and subsequently withdrawn at the Not Rated category as a result of the acquisition of TWG. Specifically, legacy TWG reinsurance recoverables included $1.70 billion as of September 30, 2018 related to captive reinsurance arrangements with dealers which are substantially collateralized in the form of a letter of credit, trust account and funds withheld.

Assurant, Inc.

Notes to Consolidated Financial Statements (unaudited)

(In millions, except number of shares and per share amounts)

request of ERAC in March 2019. As of June 30, 2019 and December 31, 2018, the Company had $777.2 million and $775.9 million, respectively, of reinsurance recoverables from ERAC.

An allowance for doubtful accounts for reinsurance recoverables is recorded on the basis of periodic evaluations of balances due from reinsurers (net of collateral), reinsurer solvency, management’s experience and current economic conditions. The Company carried an allowance for doubtful accounts for reinsurance recoverables of $0.3 million as of ~~September~~June 30, ~~2018~~2019 and December 31, ~~2017.~~2018.

10. Reserves

Reserve Roll Forward

The following table provides a roll forward of the Company’s beginning and ending claims and benefits payable balances. Claims and benefits payable is the liability for unpaid loss and loss adjustment expenses and is comprised of case and incurred but not reported ~~("IBNR"~~(“IBNR”) reserves.

Since unpaid loss and loss adjustment expenses are estimates, the Company’s actual losses incurred may be more or less than the Company’s previously developed estimates, which is referred to as either unfavorable or favorable development, respectively.

The best estimate of ultimate loss and loss adjustment expense is generally selected from a blend of methods that are applied consistently each period. There have been no significant changes in the methodologies and assumptions utilized in estimating the liability for unpaid loss and loss adjustment expenses for any of the periods presented.


	For the Nine Months Ended September 30,						For the Six Months Ended June 30,
	2018			2017			2019			2018
Claims and benefits payable, at beginning of period	$	3,782.2		$	3,301.2		$	2,813.7		$	3,782.2
Less: Reinsurance ceded and other	(3,193.3		)	(2,718.2		)	(2,053.7		)	(3,193.3		)
Net claims and benefits payable, at beginning of period	588.9			583.0			760.0			588.9
Acquired reserves as of Acquisition Date (1)	139.9			—			—			140.7
Incurred losses and loss adjustment expenses related to:
Current year	1,603.6			1,539.4			1,339.4			940.3
Prior years	(12.1		)	(54.3		)	(37.7		)	(30.6		)
Total incurred losses and loss adjustment expenses	1,591.5			1,485.1			1,301.7			909.7
Paid losses and loss adjustment expenses related to:
Current year	1,168.8			954.5			882.9			624.6
Prior years	398.6			327.8			409.2			336.4
Total paid losses and loss adjustment expenses	1,567.4			1,282.3			1,292.1			961.0
Net claims and benefits payable, at end of period	752.9			785.8			769.6			678.3
Plus: Reinsurance ceded and other(2)	3,011.8			4,008.4			1,952.6			2,824.8
Claims and benefits payable, at end of period	$	3,764.7		$	4,794.2
Claims and benefits payable, at end of period (2) (3)							$	2,722.2		$	3,503.1


(1)	Acquired reserves from TWG on ~~May 31, 2018 (the~~the Acquisition ~~Date)~~Date include ~~$420.5~~$419.9 million of gross claims and benefits payable, and ~~$280.6~~$279.2 million of ceded claims and benefits payable. The reserve roll forward includes the activity of TWG from June 1, 2018 to ~~September~~June 30, 2018.

The Company experienced favorable development in both nine month periods presented in the roll forward table above. Global Housing and Global Lifestyle contributed $10.8 million and $45.6 million to the net favorable development during the nine months ended September 30, 2018 and 2017, respectively. Global Housing experienced unfavorable development from Hurricane Maria in 2018, partially offset by favorable development on non-catastrophe losses. Development on catastrophes was unfavorable by $13.3 million and favorable by $5.2 million for the nine months ended September 30, 2018 and 2017, respectively. Excluding catastrophes, favorable development decreased for lender-placed homeowners products due to increased severity on fire claims associated with prior periods and an increase in losses related to the runoff of REO policies. Favorable development for Global Lifestyle decreased in the nine months ended September 30, 2018 from the comparable period in 2017 primarily from extended service contracts and credit insurance products. This reduction was attributable to changing mix of business and consideration of prior development trends. Certain of these contracts and products contain retrospective commission provisions that would result in offsetting underwriting, general and administrative increases or decrease in expense dependent on if the development were favorable or unfavorable. Assurant Health, subject to continuing


(2)	Includes reinsurance recoverables and claims and benefits payable of $83.2 million and $89.6 million as of June 30, 2019 and 2018, respectively, which was ceded to the U.S. government. The Company acts as an administrator for the U.S. government under the voluntary National Flood Insurance Program.


(3)	Claims and benefits payable and related reinsurance ceded were reduced by $730.0 million in December 2018 as result of the sale of Time Insurance Company, a legal entity associated with the previously exited Assurant Health business.

Assurant, Inc.

Notes to Consolidated Financial Statements (unaudited)

(In millions, except number of shares and per share amounts)

~~runoff,~~The Company experienced favorable development in both six month periods presented in the roll forward table above. Global Lifestyle contributed ~~$0.7~~$30.3 million and $20.8 million to the net favorable development during the six months ended June 30, 2019 and 2018, respectively. The net favorable development in 2019 was primarily attributable to mobile device protection products and business acquired from TWG, where losses from more recent accident years were favorable to expectations. The net favorable development in 2018 was primarily attributable to lower than expected losses from extended service contracts and mobile device protection products. Many of these contracts and products contain retrospective commission (profit sharing) provisions that would result in offsetting increases or decreases in expense dependent on if the development was favorable or unfavorable. Global Housing contributed $3.9 million and $3.6 million of net favorable development for the ~~nine~~six months ended ~~September~~June 30, 2019 and 2018, ~~compared~~respectively. The net favorable development in 2019 was primarily attributable to ~~$8.2~~prior catastrophes, whereby increased subrogation associated with the 2017 and 2018 California wildfires was partially offset by net unfavorable development from Hurricane Michael. The net favorable development in 2018 was also primarily attributable to prior catastrophes of $2.9 million. Global Preneed, Assurant Health and other contributed $3.5 million and $6.2 million in net favorable development for the ~~comparable 2017 period.~~six months ended June 30, 2019 and 2018, respectively.

11. ~~Goodwill~~Debt

The following table shows the principal amount and ~~Other Intangible Assets~~

~~As a result~~carrying value of the ~~May 2018 acquisition~~Company’s outstanding debt, less unamortized

discount and issuance costs as applicable, as of ~~TWG, the Company's Goodwill, VOBA~~June 30, 2019 and ~~other intangible assets increased. Refer to Note 4 - Acquisitions and disclosures below for additional information.~~

~~Goodwill~~

~~The Company has goodwill attributable to its Global Housing, Global Lifestyle and Global Preneed segments. A roll forward of goodwill by segment is provided below.~~December 31, 2018:

Global Housing Global Lifestyle Global Preneed Consolidated
Balance at December 31, 2017 (1) $ 386.7
$ 392.8
$ 138.2
$ 917.7
Acquisitions (2) —
1,408.0
—
1,408.0
Impairments (3) (7.2 ) —
—
(7.2 )
Foreign currency translation and other —
(5.8 ) (0.2 ) (6.0 )
Balance at September 30, 2018 $ 379.5
$ 1,795.0
$ 138.0
$ 2,312.5



			June 30, 2019		December 31, 2018
	Principal Amount		Carrying Value
Floating Rate Senior Notes due March 2021 (1)	$	300.0	$	298.4	$	298.1
4.00% Senior Notes due March 2023	350.0		348.3		348.1
4.20% Senior Notes due September 2023	300.0		297.1		296.8
4.90% Senior Notes due March 2028	300.0		297.7		297.6
6.75% Senior Notes due February 2034	375.0		371.0		370.9
7.00% Fixed-to-Floating Rate Subordinated Notes due March 2048 (2)	400.0		394.8		394.5
Total debt			$	2,007.3	$	2,006.0


(1)	~~Net of $1.26 billion of accumulated impairment losses.~~Bears floating interest at a rate equal to three-month LIBOR plus 1.25%.


(2)	~~Refer~~Bears a 7.00% annual interest rate from March 2018 to ~~Note 4 for additional information~~March 2028 and annual interest rate equal to three-month LIBOR plus 4.135% thereafter.

2021, 2023 and 2028 Senior Notes:In March 2018, the Company issued three series of senior notes with an aggregate principal amount of $900.0 million.

•

2021 Senior Notes: The first series of senior notes is $300.0 million in principal amount, bears floating interest rate equal to three-month LIBOR plus 1.25% (3.58% as of June 30, 2019) and is payable in a single installment due March 2021 (“2021 Senior Notes”). Interest on the ~~TWG acquisition (including~~2021 Senior Notes is payable quarterly. Commencing on or after March 2019, the ~~application~~Company may redeem the 2021 Senior Notes at any time in whole or from time to time in part at a redemption price equal to 100% of ~~measurement period adjustments during~~ the ~~three months ended September 30, 2018).~~principal amount being redeemed plus accrued and unpaid interest.

~~(3)~~•

~~Refer to Note 20 for additional information~~

2023 Senior Notes: The second series of senior notes is $300.0 million in principal amount, bears interest at 4.20% per year, is payable in a single installment due September 2023 and was issued at a 0.233% discount (“2023 Senior Notes”). Interest on the ~~impairment loss on~~2023 Senior Notes is payable semi-annually. Prior to August 2023, the ~~mortgage solutions business.~~Company may redeem the 2023 Senior Notes at any time in whole or from time to time in part at a make-whole premium plus accrued and unpaid interest. On or after that date, the Company may redeem the 2023 Senior Notes at any time in whole or from time to time in part at a redemption price equal to 100% of the principal amount being redeemed plus accrued and unpaid interest.

~~VOBA and Other Intangible Assets~~

~~VOBA and Other intangible assets were $3,905.5~~

•

2028 Senior Notes: The third series of senior notes is $300.0 million in principal amount, bears interest at 4.90% per year, is payable in a single installment due March 2028 and was issued at a 0.383% discount (“2028 Senior Notes”).~~$642.8 million, respectively, at September 30, 2018 and~~ ~~$24.4 million~~ ~~and~~ ~~$288.6 million~~, respectively, at December 31, 2017. The increases reflect the additions from the TWG acquisition. The following table shows the preliminary purchase price allocation to VOBA and other intangible assets, including the effect of measurement period adjustments to provisional estimates as described in Note 4, and the related estimated useful lives.

Amount Estimated Useful Life
VOBA $ 4,048.0
9 years

Finite life:
Distribution network 390.3
15 years
Technology based intangibles 57.4
9 years
Total finite life other intangible assets 447.7

Indefinite life:
Licenses $ 11.6
Indefinite
Total other intangible assets $ 459.3

Total amortization of VOBA for the three months ended September 30, 2018 and 2017 was $107.2 million and $1.9 million, respectively, and for the nine months ended September 30, 2018 and 2017 was $145.2 million and $6.0 million, respectively. Total amortization of other intangible assets for the three months ended September 30, 2018 and 2017 was $19.0 million and $16.9 million, respectively, and for the nine months ended September 30, 2018 and 2017 was $58.1 million and $53.2 million, respectively. At September 30, 2018, the estimated amortization of VOBA and other intangible assets for the remainder of 2018, the next five years and thereafter is as follows:

Assurant, Inc.

Notes to Consolidated Financial Statements (unaudited)

(In millions, except number of shares and per share amounts)

VOBA Other Intangible Assets (With Finite Lives)
Related to TWG Acquisition Other Total Related to TWG Acquisition Other Total
October 1 - December 31, 2018 $ 104.5
$ 1.8
$ 106.3
$ 4.1
$ 14.4
$ 18.5
2019 511.4
6.6
518.0
19.4
42.1
61.5
2020 629.6
6.3
635.9
27.6
35.7
63.3
2021 703.2
0.8
704.0
31.3
26.5
57.8
2022 768.5
0.7
769.2
35.0
17.0
52.0
2023 777.9
0.6
778.5
36.2
11.6
47.8
Thereafter 391.4
2.2
393.6
287.8
40.4
328.2
Total $ 3,886.5
$ 19.0
$ 3,905.5
$ 441.4
$ 187.7
$ 629.1

~~12. Debt~~

~~As of September 30, 2018,~~Interest on the 2028 Senior Notes is payable semi-annually. Prior to December 2027, the Company ~~had $2.00 billion of outstanding debt. In addition to~~may redeem the debt issuances described below, we have $350.0 million in senior notes due 2023 and $375.0 million in senior notes due 2034, as well as a $450.0 million senior revolving credit facility, under which no borrowings have been made.

~~Debt Issuances~~

2028 Senior ~~Notes:~~In March 2018, the Company issued three series of senior notes with an aggregate principal amount of $900.0 million. The first series of senior notes is $300.0 million in principal amount, bears floating interest rate equal to three-month LIBOR plus 1.25% and is payable in a single installment due March 2021 (the “2021 Senior Notes”). The second series is $300.0 million in principal amount, bears interestNotes at 4.20% per year, is payable in a single installment due September 2023 and was issued at a 0.233% discount (the “2023 Senior Notes”). The third series is $300.0 million in principal amount, bears interest at 4.90% per year, is payable in a single installment due March 2028 and was issued at a 0.383% discount (the “2028 Senior Notes”). At any time in whole or from time to time in part of a make-whole premium plus accrued and unpaid interest. On or after that date, the Company may redeem the ~~2021 Senior Notes on or after March 2019, the 2023 Senior Notes prior to August 2023 and the~~ 2028 Senior Notes ~~prior~~at any time in whole or from time to ~~December 2027.~~time in part at a redemption price equal to 100% of the principal amount being redeemed plus accrued and unpaid interest.

~~Interest~~The interest rate payable on each of the 2021 Senior Notes, ~~is payable quarterly in March, June, September and December of each year, beginning in June 2018. Interest on~~ the 2023 Senior Notes and the 2028 ~~Senior Notes is payable semi-annually in March and September of each year, beginning in September 2018. The interest rate payable on any series of the~~ Senior Notes will be subject to adjustment from time to time, if either Moody’s Investor Service, Inc. (“Moody’s”) or S&P Global Ratings, a division of S&P Global Inc. (“S&P”) downgrades the credit rating assigned to such series of ~~Senior Notes~~senior notes to Ba1 or below or to BB+ or below, respectively, or subsequently upgrades the credit ratings once the ~~Senior Notes~~senior notes are at or below such levels. The following table details the increase in interest rate over the issuance rate by rating with the impact equal to the sum of the number of basis points next to such rating for a maximum increase of 200 basis points over the issuance rate:



	Rating Agencies
Rating Levels	~~Moody's~~Moody’s (1)	S&P (1)	Interest Rate Increase (2)
1	Ba1	BB+	25 basis points
2	Ba2	BB	50 basis points
3	Ba3	BB-	75 basis points
4	B1 or below	B+ or below	100 basis points


(1)	Including the equivalent ratings of any substitute rating agency.


(2)	Applies to each rating agency individually.

~~Assurant, Inc.~~Subordinated Notes

~~Notes to Consolidated Financial Statements (unaudited)~~

~~(In millions, except number of shares and per share amounts)~~

~~Subordinated Notes:~~In March 2018, the Company issued fixed-to-floating rate subordinated notes due March 2048 with principal amount of $400.0 million (the “Subordinated Notes” ~~and, together with the 2021 Senior Notes, 2023 Senior Notes and the 2028 Senior Notes, the “Notes”~~) which bear interest from March 2018 to March 2028, at an annual rate of 7.00%, payable ~~semi-annually in March and September of each year, beginning in September 2018 and ending in March 2028.~~semi-annually. The Subordinated Notes will bear interest at an annual rate equal to three-month LIBOR plus 4.135%, payable quarterly, ~~in March, June, September and December of each year,~~ beginning in June 2028. ~~The~~On or after March 2028, the Company may redeem the Subordinated Notes, in whole ~~but not in part,~~ at any time on or ~~after March 2028 and prior~~in part from time to ~~maturity~~time at a redemption price ~~set forth~~equal to their principal amount plus accrued and unpaid interest; provided that if they are not redeemed in ~~the subordinated notes indenture, dated March 27, 2018 (the "Subordinated Notes Indenture").~~whole, a minimum amount must remain outstanding. At any time prior to March 2028, the Company may redeem the Subordinated Notes ~~will be redeemable~~ in whole but not in part after the occurrence of a tax event, rating agency event or regulatory capital event as defined in the global note representing the Subordinated Notes, ~~Indenture.~~ at a redemption price equal to (i) with respect to the rating agency, 102% of their principal amount and (ii) with respect to a tax event or regulatory capital event, their principal amount, in each case plus accrued and unpaid interest.

In addition, so long as no event of default with respect to the Subordinated Notes has occurred and is continuing, the Company has the right, on one or more occasions, to defer the payment of interest on the Subordinated Notes for one or more consecutive interest periods for up to five years as described in the global note representing the Subordinated Notes. During a deferral period, interest will continue to accrue on the Subordinated Notes ~~Indenture.~~at the then-applicable interest rates. At any time when the Company has given notice of its election to defer interest payments on the Subordinated Notes, the Company generally may not make payments on or redeem or purchase any shares of the Company’s capital stock or any of its debt securities or guarantees that rank upon ~~our~~the Company’s liquidation on a parity with or junior to the Subordinated Notes, subject to certain limited exceptions.

The net proceeds from the sale of the Notes were $1.29 billion, after deducting the underwriting discounts and offering expenses. The Company used the proceeds from the 2021 Senior Notes, the 2023 Senior Notes, the 2028 Senior Notes and the Subordinated Notes, together with the proceeds from the issuance of its 6.50% Series D ~~mandatory convertible preferred stock (“MCPS”~~Mandatory Convertible Preferred Stock, par value of $1.00 per share (the “MCPS”), available cash on hand at closing and common stock consideration, to fund the TWG acquisition and pay related fees and expenses. A portion of the aggregate proceeds was used to repay the Company’s then-outstanding $350.0 million of 2.50% ~~senior notes~~Senior Notes upon maturity in March 2018.

~~Term Loan~~Other Notes

Assurant, Inc.

Notes to Consolidated Financial Statements (unaudited)

(In millions, except number of shares and ~~Bridge Loan Facilities~~per share amounts)

In March ~~2018,~~2013, the ~~commitments~~Company issued two series of senior notes with an aggregate principal amount of $700.0 million. The first series was $350.0 million in principal amount, bore interest at 2.50% per year and was repaid in a single installment in March 2018. The second series is $350.0 million in principal amount and was issued at a 0.365% discount. This series bears interest at 4.00% per year and is payable in a single installment due March 2023. Interest is payable semi-annually. The Company may redeem the outstanding series of senior notes in whole or in part at any time and from time to time before maturity at the redemption price set forth in the global note representing the outstanding series of senior notes.

In February 2004, the Company issued senior notes with an aggregate principal amount of $475.0 million at a 0.61% discount, which bear interest at 6.75% per year and are payable in a single installment due February 2034. Interest is payable semi-annually. These senior notes are not redeemable prior to maturity. In December 2016, the Company completed a cash tender offer and purchased $100.0 million in aggregate principal amount of such senior notes.

Credit Facility

The Company has a senior unsecured $450.0 million revolving credit agreement (the “Credit Facility”) with a syndicate of banks arranged by JPMorgan Chase Bank, N.A. and Wells Fargo Bank, National Association. The Credit Facility provides for revolving loans and the issuance of multi-bank, syndicated letters of credit and letters of credit from a sole issuing bank in an aggregate amount of $450.0 million, which may be increased up to $575.0 million. The Credit Facility is available until December 2022, provided the Company is in compliance with all covenants. The Credit Facility has a sub-limit for letters of credit issued thereunder of $50.0 million. The proceeds from these loans may be used for our commercial paper program or for general corporate purposes. As of June 30, 2019, no borrowings have been made under the ~~Company's $1.50 billion senior unsecured bridge loan~~Credit facility, ~~were terminated. In May 2018, the commitments~~$441.0 million was available under the ~~Company's senior unsecured term loan facility~~Credit Facility and $9.0 million letters of credit were terminated. During the three and nine months ended September 30, 2018, the Company incurred $0.2 million and $9.8 million, respectively, of expense related to the amortization of costs capitalized in connection with such facilities.outstanding.

Interest Rate Derivatives

In March 2018, the Company exercised a series of derivative transactions it had entered into in 2017 to hedge the interest rate risk related to expected borrowing to finance the TWG acquisition. The Company determined that the derivatives qualified for hedge accounting as effective cash flow hedges and recognized a deferred gain of $26.7 million upon settlement that was reported through ~~OCI.~~other comprehensive income. The deferred gain ~~will be~~is being recognized as a reduction in interest expense related to the 2023 Senior Notes, the 2028 Senior Notes and the Subordinated Notes on an effective yield basis. The amortization of the deferred gain for the ~~nine~~three and six months ended ~~September~~June 30, 2019 was $0.8 million and $1.5 million, respectively. The amortization of the deferred gain for the three and six months ended June 30, 2018 was ~~$1.6~~$0.9 million. The remaining deferred gain as of ~~September~~June 30, ~~2018~~2019 was ~~$25.1~~$23.0 million. Additionally, the Company expensed $8.6 million of the premium paid for the derivatives as a component of interest expense for the ~~nine~~six months ended ~~September~~June 30, 2018.

In March 2018, the Company entered into a three-year interest rate swap under which the Company pays interest on $150.0 million of the 2021 Senior Notes at a fixed rate of 2.72% to the counterparty who in return pays the Company a variable rate indexed to the three-month LIBOR rate. The Company determined that the swap qualifies for hedge accounting as an effective cash flow hedge.

~~13.~~12. Accumulated Other Comprehensive Income

Certain amounts included in the consolidated statements of comprehensive income are net of reclassification adjustments. The following tables summarize those reclassification adjustments (net of taxes): for the periods indicated:

Three Months Ended September 30, 2018

Foreign
currency
translation
adjustment

Net unrealized
gains on
securities
Net unrealized gains on derivative transactions OTTI Unamortized net (losses) on Pension Plans
Accumulated
other
comprehensive
income
Balance at June 30, 2018 $ (355.4 ) $ 266.2
$ 20.9
$ 13.0
$ (82.6 ) $ (137.9 )



	Three Months Ended June 30, 2019
	Foreign currency translation adjustment			Net unrealized gains on securities		Net unrealized gains on derivative transactions		OTTI		Unamortized net (losses) on Pension Plans			Accumulated other comprehensive income
Balance at March 31, 2019	$	(365.4	)	$	549.9	$	18.1	$	14.9	$	(114.1	)	$	103.4

Assurant, Inc.

Notes to Consolidated Financial Statements (unaudited)

(In millions, except number of shares and per share amounts)

Change in accumulated other
  comprehensive (loss) income
  before reclassifications
4.8
(51.0 ) 0.5
(0.5 ) —
(46.2 )
Amounts reclassified from
  accumulated other comprehensive
  income (loss)
—
4.0
(0.4 ) —
0.8
4.4
Net current-period other
  comprehensive income (loss)
4.8
(47.0 ) 0.1
(0.5 ) 0.8
(41.8 )
Cumulative effect of change in
  accounting principles (1)
0.1
96.0
—
3.9
(18.0 ) 82.0
Balance at September 30, 2018 $ (350.5 ) $ 315.2
$ 21.0
$ 16.4
$ (99.8 ) $ (97.7 )

Three Months Ended September 30, 2017

Foreign
currency
translation
adjustment

Net unrealized
gains on
securities
Net unrealized gains on derivative transactions OTTI Unamortized net (losses) on Pension Plans
Accumulated
other
comprehensive
income
Balance at June 30, 2017 $ (284.6 ) $ 565.6
$ —
$ 18.8
$ (62.9 ) $ 236.9
Change in accumulated other
  comprehensive (loss) income
  before reclassifications
27.6
(4.2 ) —
(1.0 ) —
22.4
Amounts reclassified from
  accumulated other comprehensive
  (loss) income
—
(3.5 ) —
—
0.6
(2.9 )
Net current-period other
  comprehensive income (loss)

27.6
(7.7 ) —
(1.0 ) 0.6
19.5
Balance at September 30, 2017 $ (257.0 ) $ 557.9
$ —
$ 17.8
$ (62.3 ) $ 256.4



Change in accumulated other comprehensive (loss) income before reclassifications	(1.2		)	233.1			(2.3		)	0.7			—			230.3
Amounts reclassified from accumulated other comprehensive (loss) income	—			(4.6		)	(0.6		)	—			0.2			(5.0		)
Net current-period other comprehensive (loss) income	(1.2		)	228.5			(2.9		)	0.7			0.2			225.3
Balance at June 30, 2019	$	(366.6	)	$	778.4		$	15.2		$	15.6		$	(113.9	)	$	328.7

	Three Months Ended June 30, 2018
	Foreign currency translation adjustment			Net unrealized gains on securities			Net unrealized gains on derivative transactions			OTTI			Unamortized net (losses) on Pension Plans			Accumulated other comprehensive income
Balance at March 31, 2018	$	(272.3	)	$	372.1		$	21.1		$	14.4		$	(83.6	)	$	51.7
Change in accumulated other comprehensive (loss) income before reclassifications	(83.1		)	(110.6		)	0.5			(1.4		)	—			(194.6		)
Amounts reclassified from accumulated other comprehensive (loss) income	—			4.7			(0.7		)	—			1.0			5.0
Net current-period other comprehensive (loss) income	(83.1		)	(105.9		)	(0.2		)	(1.4		)	1.0			(189.6		)
Balance at June 30, 2018	$	(355.4	)	$	266.2		$	20.9		$	13.0		$	(82.6	)	$	(137.9	)

Assurant, Inc.

Notes to Consolidated Financial Statements (unaudited)

(In millions, except number of shares and per share amounts)


																			Six Months Ended June 30, 2019
																			Foreign currency translation adjustment			Net unrealized gains on securities			Net unrealized gains on derivative transactions			OTTI			Unamortized net (losses) on Pension Plans			Accumulated other comprehensive income
Balance at December 31, 2018																			$	(375.6	)	$	301.0		$	18.4		$	15.1		$	(114.3	)	$	(155.4	)
Change in accumulated other comprehensive income (loss) before reclassifications																			9.0			480.4			(2.0		)	0.5			—			487.9
Amounts reclassified from accumulated other comprehensive income (loss)																			—			(3.0		)	(1.2		)	—			0.4			(3.8		)
Net current-period other comprehensive income (loss)																			9.0			477.4			(3.2		)	0.5			0.4			484.1
Balance at June 30, 2019																			$	(366.6	)	$	778.4		$	15.2		$	15.6		$	(113.9	)	$	328.7

	Nine Months Ended September 30, 2018																		Six Months Ended June 30, 2018
	Foreign currency translation adjustment			Net unrealized gains on securities			Net unrealized gains on derivative transactions			OTTI			Unamortized net (losses) on Pension Plans			Accumulated other comprehensive income			Foreign currency translation adjustment			Net unrealized gains on securities			Net unrealized gains on derivative transactions			OTTI			Unamortized net (losses) on Pension Plans			Accumulated other comprehensive income
Balance at December 31, 2017	$	(281.5	)	$	581.2		$	—		$	17.9		$	(83.6	)	$	234.0		$	(281.5	)	$	581.2		$	—		$	17.9		$	(83.6	)	$	234.0
Change in accumulated other comprehensive (loss) income before reclassifications	(69.1		)	(339.5		)	22.1			(5.4		)	—			(391.9		)	(73.9		)	(288.5		)	21.6			(4.9		)	—			(345.7		)
Amounts reclassified from accumulated other comprehensive income (loss)	—			11.4			(1.1		)	—			1.8			12.1
Amounts reclassified from accumulated other comprehensive (loss) income																			—			7.4			(0.7		)	—			1.0			7.7
Net current-period other comprehensive (loss) income	(69.1		)	(328.1		)	21.0			(5.4		)	1.8			(379.8		)	(73.9		)	(281.1		)	20.9			(4.9		)	1.0			(338.0		)
Cumulative effect of change in accounting principles (1)	0.1			62.1			—			3.9			(18.0		)	48.1			—			(33.9		)	—			—			—			(33.9		)
Balance at September 30, 2018	$	(350.5	)	$	315.2		$	21.0		$	16.4		$	(99.8	)	$	(97.7	)

	Nine Months Ended September 30, 2017
	Foreign currency translation adjustment			Net unrealized gains on securities			Net unrealized gains on derivative transactions			OTTI			Unamortized net (losses) on Pension Plans			Accumulated other comprehensive income
Balance at December 31, 2016	$	(322.1	)	$	459.3		$	—		$	20.6		$	(63.2	)	$	94.6
Change in accumulated other comprehensive (loss) income before reclassifications	65.1			112.9			—			(2.8		)	—			175.2
Amounts reclassified from accumulated other comprehensive (loss) income	—			(14.3		)	—			—			0.9			(13.4		)
Net current-period other comprehensive income (loss)	65.1			98.6			—			(2.8		)	0.9			161.8
Balance at September 30, 2017	$	(257.0	)	$	557.9		$	—		$	17.8		$	(62.3	)	$	256.4
Balance at June 30, 2018																			$	(355.4	)	$	266.2		$	20.9		$	13.0		$	(82.6	)	$	(137.9	)


(1)	See Note 3 for additional information.

Assurant, Inc.

Notes to Consolidated Financial Statements (unaudited)

(In millions, except number of shares and per share amounts)

The following tables summarize the reclassifications out of accumulated other comprehensive income for the three and ~~nine~~six months ended ~~September~~June 30, ~~2018~~2019 and ~~2017:~~2018:


Details about accumulated other comprehensive income components	Amount reclassified from accumulated��other comprehensive income						Affected line item in the statement where net income is presented	Amount reclassified from accumulated other comprehensive income						Affected line item in the statement where net income is presented
	Three Months Ended September 30,							Three Months Ended June 30,
	2018			2017				2019			2018
Net unrealized losses (gains) on securities	$	5.1		$	(5.3	)	Net realized gains on investments, excluding other-than-temporary impairment losses
Net unrealized (gains) losses on securities								$	(5.9	)	$	6.0		Net realized gains on investments, excluding other-than-temporary impairment losses
	(1.1		)	1.8			Provision for income taxes	1.3			(1.3		)	Provision for income taxes
	$	4.0		$	(3.5	)	Net of tax	$	(4.6	)	$	4.7		Net of tax
Unrealized gains on derivative transactions	$	(0.5	)	$	—		Interest Expense	$	(0.8	)	$	(0.9	)	Interest Expense
	0.1			—			Provision for income taxes	0.2			0.2			Provision for income taxes
	$	(0.4	)	$	—		Net of tax	$	(0.6	)	$	(0.7	)	Net of tax
Amortization of pension and postretirement unrecognized net periodic benefit cost:
Amortization of net loss	$	0.7		$	0.9		(1)	$	0.3		$	1.2		(1)
Settlement gain	0.4			—			(1)
	1.1			0.9			Total before tax
	(0.3		)	(0.3		)	Provision for income taxes	(0.1		)	(0.2		)	Provision for income taxes
	$	0.8		$	0.6		Net of tax	$	0.2		$	1.0		Net of tax
Total reclassifications for the period	$	4.4		$	(2.9	)	Net of tax	$	(5.0	)	$	5.0		Net of tax

Details about accumulated other comprehensive income components	Amount reclassified from accumulated other comprehensive income						Affected line item in the statement where net income is presented	Amount reclassified from accumulated other comprehensive income						Affected line item in the statement where net income is presented
	Nine Months Ended September 30,							Six Months Ended June 30,
	2018			2017				2019			2018
Net unrealized losses (gains) on securities	$	14.5		$	(22.0	)	Net realized gains on investments, excluding other-than-temporary impairment losses
Net unrealized (gains) losses on securities								$	(3.8	)	$	9.4		Net realized gains on investments, excluding other-than-temporary impairment losses
	(3.1		)	7.7			Provision for income taxes	0.8			(2.0		)	Provision for income taxes
	$	11.4		$	(14.3	)	Net of tax	$	(3.0	)	$	7.4		Net of tax
Unrealized gains on derivative transactions	$	(1.4	)	$	—		Interest Expense	$	(1.5	)	$	(0.9	)	Interest Expense
	0.3			—			Provision for income taxes	0.3			0.2			Provision for income taxes
	$	(1.1	)	$	—		Net of tax	$	(1.2	)	$	(0.7	)	Net of tax
Amortization of pension and postretirement unrecognized net periodic benefit cost:
Amortization of net loss	$	1.9		$	2.0		(1)	$	0.6		$	1.2		(1)
Settlement gain	0.4			(0.6		)	(1)
	2.3			1.4			Total before tax
	(0.5		)	(0.5		)	Provision for income taxes	(0.2		)	(0.2		)	Provision for income taxes
	$	1.8		$	0.9		Net of tax	$	0.4		$	1.0		Net of tax
Total reclassifications for the period	$	12.1		$	(13.4	)	Net of tax	$	(3.8	)	$	7.7		Net of tax


(1)	These accumulated other comprehensive income components are included in the computation of net periodic pension cost. See Note ~~17 - Retirement and Other Employee Benefits~~16 for additional information.

~~Assurant, Inc.~~

~~Notes to Consolidated Financial Statements (unaudited)~~

~~(In millions, except number of shares and per share amounts)~~

~~14.~~13. Stock Based Compensation

Under the Assurant, Inc. 2017 Long-Term Equity Incentive Plan (“ALTEIP”), as amended ~~and restated~~ in May ~~2017,~~2019, the Company is authorized to issue up to ~~1,500,000~~1,588,797 new shares of the ~~Company's~~Company’s common stock to employees, officers and non-employee directors. Under the ALTEIP, the Company may grant awards based on shares of its common stock, including stock options, stock appreciation rights (“SARs”), restricted stock (including performance shares), unrestricted stock, restricted stock units (“RSUs”), performance share units (“PSUs”) and dividend equivalents. All share-based grants are awarded under the ALTEIP.

Assurant, Inc.

Notes to Consolidated Financial Statements (unaudited)

(In millions, except number of shares and per share amounts)

Restricted Stock Units

The following table shows a summary of RSU activity during the three and ~~nine~~six months ended ~~September~~June 30, ~~2018~~2019 and ~~2017:~~2018:


	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017			2019			2018			2019			2018
RSU compensation expense	$	10.9		$	6.3		$	24.7		$	17.1		$	7.4		$	8.7		$	14.4		$	13.8
Income tax benefit	(1.9		)	(2.2		)	(4.2		)	(6.0		)	(1.4		)	(1.5		)	(2.7		)	(2.3		)
RSU compensation expense, net of tax	$	9.0		$	4.1		$	20.5		$	11.1		$	6.0		$	7.2		$	11.7		$	11.5
RSUs granted	91,579			31,720			513,408			236,919			31,554			32,330			225,396			421,829
Weighted average grant date fair value per unit	$	103.41		$	103.64		$	92.92		$	99.77		$	96.18		$	89.56		$	97.56		$	90.64
Total fair value of vested RSUs	$	3.5		$	2.4		$	22.3		$	26.2		$	5.0		$	2.6		$	26.8		$	18.8

As of ~~September~~June 30, ~~2018,~~2019, there was ~~$36.7~~$31.2 million of unrecognized compensation cost related to outstanding RSUs. That cost is expected to be recognized over a weighted-average period of ~~1.4~~1.3 years.

Performance Share Units

The following table shows a summary of PSU activity during the three and ~~nine~~six months ended ~~September~~June 30, ~~2018~~2019 and ~~2017:~~2018:


	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017			2019			2018			2019			2018
PSU compensation expense	$	6.1		$	4.9		$	13.4		$	5.0		$	6.6		$	3.1		$	10.8		$	7.3
Income tax benefit	(0.8		)	(1.7		)	(2.1		)	(1.7		)	(0.9		)	(0.4		)	(1.5		)	(1.3		)
PSU compensation expense, net of tax	$	5.3		$	3.2		$	11.3		$	3.3		$	5.7		$	2.7		$	9.3		$	6.0
PSUs granted	164,957			336			164,957			237,959			—			—			246,219			—
Weighted average grant date fair value per unit	$	123.51		$	112.32		$	123.51		$	112.32		$	—		$	—		$	105.23		$	—
Total fair value of vested PSUs	$	1.9		$	0.3		$	27.5		$	29.7		$	—		$	25.6		$	17.7		$	25.6

Portions of the compensation expense recorded in prior years were reversed in the three and nine months ended September 30, 2017 related to the Company’s level of actual performance as measured against pre-established performance goals and peer group results. As of ~~September 30, 2018,~~March 31, 2019, there was ~~$29.3~~$38.2 million of unrecognized compensation cost related to outstanding PSUs. That cost is expected to be recognized over a weighted-average period of ~~0.9 year.~~1.3 years.

The fair value of PSUs with market conditions was estimated as of the date of grant using a Monte Carlo simulation model, which utilizes multiple variables that determine the probability of satisfying the market condition stipulated in the award. Expected volatilities for awards issued during the ~~nine~~six months ended ~~September~~June 30, ~~2018~~2019 and ~~2017~~2018 were based on the historical stock prices of the Company’s stock and peer group. The expected term for grants issued during the ~~nine~~six months ended ~~September~~June 30, ~~2018~~2019 and ~~2017~~2018 was assumed to equal the average of the vesting period of the PSUs. The risk-free rate was based on the U.S. Treasury yield curve in effect at the time of grant.

14. Equity Transactions

Stock Repurchase

During the six months ended June 30, 2019, the Company repurchased 1,037,262 shares of the Company’s outstanding common stock at a cost of $100.7 million, exclusive of commissions, leaving $660.5 million remaining under the total repurchase authorizations as of June 30, 2019. There were no share repurchases during the six months ended June 30, 2018.

The timing and the amount of future repurchases will depend on market conditions, the Company’s financial condition, results of operations and liquidity and other factors.

Assurant, Inc.

Notes to Consolidated Financial Statements (unaudited)

(In millions, except number of shares and per share amounts)

In March 2018, the Compensation Committee of the Company’s Board of Directors granted RSUs to the Company’s management committee, including its named executive officers. The RSUs had a three-year annual vesting schedule and reflected half of each executive’s annual target long-term incentive opportunity. The Compensation Committee elected to wait to grant PSUs to the management committee until the closing of the TWG acquisition in order to align the performance metrics for the PSUs with the Company’s expectations regarding its post-closing financial performance.

In July 2018, the Compensation Committee granted PSUs to the management committee that reflect the remaining half of each executive’s annual target long-term incentive opportunity plus an additional opportunity to further incentivize and retain executives with respect to the TWG acquisition. Payout for the PSUs is determined by reference to two metrics measured over a thirty-month performance period: (i) total shareholder return relative to the S&P 500 Index (weighted at 60%) and (ii) the realization of net pre-tax synergies in connection with the TWG acquisition (weighted at 40%) provided that a net operating earnings per share (excluding catastrophes) goal is met in 2020. The aggregate grant date fair value of the additional target opportunity provided to all members of the management committee, including the Company’s CEO and other named executive officers, was $11.1 million. The additional target opportunity granted to the Company’s CEO had a grant date fair value of $4.0 million.

~~15. Equity Transactions~~

~~Stock Repurchase~~

During the nine months ended September 30, 2018, the Company repurchased 783,610 shares of the Company's outstanding common stock at a cost of $83.2 million, exclusive of commissions, leaving $210.3 million remaining under the total repurchase authorization as of September 30, 2018. The Company repurchased 2,535,457 shares of the Company’s outstanding common stock at a cost of $250.5 million during the nine months ended September 30, 2017, exclusive of commissions.

~~On November 5, 2018, the Board of Directors authorized the Company to repurchase up to an additional $600.0 million of its outstanding common stock.~~

~~The timing and the amount of future repurchases will depend on market conditions, the Company's financial condition, results of operations, liquidity and other factors.~~

Issuance of Mandatory Convertible Preferred Stock

In March 2018, the Company issued 2,875,000 shares of the MCPS ~~with a par value of $1.00 per share~~ at a public offering price of $100.00 per ~~share and liquidation preference of $100.00 per share, which included the underwriters' exercise in full of their option to purchase 375,000 additional shares of MCPS to cover over-allotments.~~share. The net proceeds from the sale of the MCPS was $276.4 million after deducting the underwriting discounts and offering expenses. Refer to Note 1211 for further details on the use of proceeds from this offering.

Each outstanding share of MCPS will convert automatically on March 15, 2021 ~~(the "mandatory conversion date")~~ into between ~~0.9354~~0.9365 (the “minimum conversion rate”) and ~~1.1225~~1.1239 shares of common stock, ~~(respectively, the “minimum conversion rate” and “maximum conversion rate”),~~ subject to customary anti-dilution adjustments. The number of shares of the common stock issuable on conversion of the MCPS will be determined based on the average volume weighted average price per share of the Company's common stock over the 20 consecutive trading day period preceding the mandatory conversion date. At any time prior to March 2021, holders may elect to convert each share of ~~the~~ MCPS into shares of common stock at the minimum conversion rate or in the event of a fundamental change at the specified rates as defined in the ~~certificate~~Certificate of ~~designations~~Designations of the MCPS.

Dividends on our MCPS will be payable on a cumulative basis when, as and if declared, at an annual rate of 6.50% of the liquidation preference of $100.00 per share. The Company ~~paid preferred stock dividends of $4.7 million and $9.5 million for the three and nine months ended September 30, 2018, respectively. We~~ may pay declared dividends in cash or, subject to certain limitations, in shares of the ~~Company's~~Company’s common stock, or in any combination of cash and shares of the Company’s common stock ~~in March, June, September and December of each year,~~quarterly, commencing in June 2018 and ending in March 2021. No dividend or distribution may be declared or paid on common stock or any other class or series of junior stock, and no common stock or any other class or series of junior stock or parity stock may be purchased, redeemed or otherwise acquired for consideration ~~by the Company~~

~~Assurant, Inc.~~

~~Notes to Consolidated Financial Statements (unaudited)~~

~~(In millions, except number of shares and per share amounts)~~

unless all accumulated and unpaid dividends on the MCPS for all preceding dividend periods have been declared and paid in full, subject to certain limited exceptions. The Company paid preferred stock dividends of $4.6 million and $9.3 million for the three and six months ended June 30, 2019, respectively. The Company paid preferred stock dividends of $4.8 million for the three and six months ended June 30, 2018.

~~16.~~15. Earnings Per Common Share

The following table presents net income, the weighted average common shares used in calculating basic earnings per common share (“EPS”) and those used in calculating diluted EPS for each period presented below. Diluted EPS reflects the incremental common shares from: (1) common shares issuable upon vesting of PSUs and ESPP using the treasury stock method; and (2) common shares issuable upon conversion of the MCPS using the if-converted method. Refer to ~~Note~~Notes 13 and 14 ~~- Stock Based Compensation and Note 15 - Equity Transactions~~ for further information regarding potential common ~~share~~stock issuances. The outstanding RSUs have non-forfeitable rights to dividend equivalents and are therefore included in calculating basic and diluted EPS under the two-class method.

Three Months Ended
September 30, Nine Months Ended
September 30,
2018 2017 2018 2017
Numerator
Net income $ 53.0
$ (57.3 ) $ 226.0
$ 206.7
Less: Preferred stock dividends (4.7 ) —
(9.5 ) —
Net income attributable to common stockholders 48.3
(57.3 ) 216.5
206.7
Less: Common stock dividends paid (35.5 ) (28.8 ) (96.1 ) (88.8 )
Undistributed earnings $ 12.8
$ (86.1 ) $ 120.4
$ 117.9
Denominator
Weighted average shares outstanding used in basic
earnings per share
63,621,184
54,524,874
57,988,570
55,096,933
Incremental common shares from:
PSUs 179,163
—
205,370
312,275
ESPP —
—
—
43
MCPS —
—
—
—
Weighted average shares used in diluted earnings per
share calculations
63,800,347
54,524,874
58,193,940
55,409,251
Earnings per common share - Basic
Distributed earnings $ 0.56
$ 0.53
$ 1.66
$ 1.61
Undistributed earnings 0.20
(1.58 ) 2.07
2.14
Net income attributable to common stockholders $ 0.76
$ (1.05 ) $ 3.73
$ 3.75
Earnings per common share - Diluted (1)
Distributed earnings $ 0.56
$ 0.53
$ 1.65
$ 1.60
Undistributed earnings 0.20
(1.58 ) 2.07
2.13
Net income attributable to common stockholders $ 0.76
$ (1.05 ) $ 3.72
$ 3.73


~~(1)~~	~~In accordance with earnings per share guidance, diluted per share amounts are computed in the same manner as basic per share amounts when a loss from operations exists.~~

Average PSUs totaling 69,624 for the three months ended September 30, 2018, and 31,363 and 68,439 for the nine months ended September 30, 2018 and 2017, respectively, were anti-dilutive and thus not included in the computation of diluted EPS under the treasury stock method. Average MCPS totaling 2,715,438 and 2,161,123 for the three and nine months ended September 30, 2018 were anti-dilutive and thus not included in the computation of diluted EPS under the if-converted method.

Assurant, Inc.

Notes to Consolidated Financial Statements (unaudited)

(In millions, except number of shares and per share amounts)

~~17.~~



	Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018
Numerator
Net income attributable to stockholders	$	144.1		$	67.0		$	309.8		$	173.0
Less: Preferred stock dividends	(4.6		)	(4.8		)	(9.3		)	(4.8		)
Net income attributable to common stockholders	139.5			62.2			300.5			168.2
Less: Common stock dividends paid	(38.3		)	(30.9		)	(75.7		)	(60.6		)
Undistributed earnings	$	101.2		$	31.3		$	224.8		$	107.6
Denominator
Weighted average common shares outstanding used in basic earnings per common share calculations	62,222,090			57,060,313			62,407,429			55,125,584
Incremental common shares from:
PSUs	114,502			163,596			172,321			217,455
ESPP	42,642			40,499			42,642			40,499
MCPS	2,909,213			—			2,938,538			1,889,890
Weighted average common shares used in diluted earnings per common share calculations	65,288,447			57,264,408			65,560,930			57,273,428
Earnings per common share - Basic
Distributed earnings	$	0.62		$	0.54		$	1.21		$	1.10
Undistributed earnings	1.62			0.55			3.61			1.95
Net income attributable to common stockholders	$	2.24		$	1.09		$	4.82		$	3.05
Earnings per common share - Diluted
Distributed earnings	$	0.59		$	0.54		$	1.16		$	1.06
Undistributed earnings	1.62			0.55			3.57			1.96
Net income attributable to common stockholders	$	2.21		$	1.09		$	4.73		$	3.02

Average PSUs totaling 95,899 and 4,171 for the three months ended June 30, 2019 and 2018, respectively, and 137,588 and 4,171 for the six months ended June 30, 2019 and 2018, respectively, were anti-dilutive and thus not included in the computation of diluted EPS under the treasury stock method. Average MCPS totaling 3,056,700 for the three months ended June 30, 2018 were anti-dilutive and thus not included in the computation of diluted EPS under the if-converted method.

16. Retirement and Other Employee Benefits

The Company and its subsidiaries participate in a non-contributory, qualified defined benefit pension plan (“Assurant Pension Plan”) covering substantially all employees. The Company also has various non-contributory, non-qualified supplemental plans covering certain employees including the Assurant Executive Pension Plan and the Assurant Supplement Executive Retirement Plan. The qualified and non-qualified plans are referred to as “Pension Benefits” unless otherwise noted. In addition, the Company provides certain life and health care benefits (“Retirement Health Benefits”) for retired employees and their dependents. The Pension Benefits and Retirement Health Benefits (together, the “Plans”) were frozen on March 1, 2016.

Assurant, Inc.

Notes to Consolidated Financial Statements (unaudited)

(In millions, except number of shares and per share amounts)

The following tables present the components of net periodic benefit cost for the ~~Company’s qualified pension benefits plan, nonqualified pension benefits plan and retirement health benefits plan~~Plans for the three and ~~nine~~six months ended ~~September~~June 30, ~~2018~~2019 and ~~2017 were as follows:~~2018:


	Qualified Pension Benefits									Unfunded Nonqualified Pension Benefits					Retirement Health Benefits						Qualified Pension Benefits						Unfunded Non-qualified Pension Benefits				Retirement Health Benefits
	For the Three Months Ended September 30,									For the Three Months Ended September 30,					For the Three Months Ended September 30,						For the Three Months Ended June 30,						For the Three Months Ended June 30,				For the Three Months Ended June 30,
	2018			2017 Plan 1			2017 Plan 2			2018		2017			2018			2017			2019			2018			2019		2018		2019			2018
Interest cost	$	5.9		$	2.5		$	3.2		$	0.7	$	0.7		$	0.8		$	0.9		$	6.6		$	5.8		$	0.7	$	0.7	$	0.9		$	0.9
Expected return on plan assets	(9.0		)	(5.4		)	(6.7		)	—		—			(0.5		)	(0.8		)	(9.0		)	(9.1		)	—		—		(0.5		)	(0.6		)
Amortization of net loss	0.3			—			0.4			0.4		0.5			—			—			—			0.2			0.3		0.3		—			—
Settlement loss	—			—			—			0.4		—			—			—
Net periodic benefit cost	$	(2.8	)	$	(2.9	)	$	(3.1	)	$	1.5	$	1.2		$	0.3		$	0.1		$	(2.4	)	$	(3.1	)	$	1.0	$	1.0	$	0.4		$	0.3

	Qualified Pension Benefits									Unfunded Nonqualified Pension Benefits					Retirement Health Benefits						Qualified Pension Benefits						Unfunded Nonqualified Pension Benefits				Retirement Health Benefits
	For the Nine Months Ended September 30,									For the Nine Months Ended September 30,					For the Nine Months Ended September 30,						For the Six Months Ended June 30,						For the Six Months Ended June 30,				For the Six Months Ended June 30,
	2018			2017 Plan 1			2017 Plan 2			2018		2017			2018			2017			2019			2018			2019		2018		2019			2018
Interest cost	$	17.5		$	8.3		$	9.4		$	2.1	$	2.2		$	2.5		$	2.6		$	13.1		$	11.6		$	1.4	$	1.4	$	1.8		$	1.7
Expected return on plan assets	(27.2		)	(17.6		)	(20.3		)	—		—			(1.6		)	(2.3		)	(18.0		)	(18.2		)	—		—		(0.9		)	(1.1		)
Amortization of net loss	0.7			—			1.0			1.2		1.1			—			—			—			0.4			0.6		0.8		—			—
Settlement loss (gain)	—			—			—			0.4		(0.7		)	—			—
Net periodic benefit cost	$	(9.0	)	$	(9.3	)	$	(9.9	)	$	3.7	$	2.6		$	0.9		$	0.3		$	(4.9	)	$	(6.2	)	$	2.0	$	2.2	$	0.9		$	0.6

The ~~Company's qualified and non-qualified pension benefit plans were frozen on March 1, 2016. Effective December 31, 2017~~ Assurant Pension Plan No. 1 ("Plan No. 1") and Assurant Pension Plan No. 2 ("Plan No. 2") were merged into the Assurant Pension Plan (the "Plan"). The expected long-term return on plan assets for 2018 is 4.75%, reflecting a decrease from 6.75% in 2017 due to the reallocation of plan assets through 2018. The Plan's funded status ~~increased to $85.1~~was $63.5 million at ~~September~~June 30, 2019 and $65.1 million at December 31, 2018 ~~from $81.3 million~~ (based on the fair value of the assets compared to the accumulated benefit obligation) ~~at December 31, 2017.~~. This equates to a ~~113%~~109% and ~~111%~~110% funded status at ~~September~~June 30, ~~2018~~2019 and December 31, ~~2017,~~2018, respectively. NoDuring the first six months of 2019, no cash was contributed to the ~~Plan during the first nine months of 2018.~~Assurant Pension Plan. Due to the ~~Plan's~~Assurant Pension Plan’s current funded status, no additional cash is expected to be contributed to the Assurant Pension Plan over the remainder of ~~2018.~~2019.

~~18.~~17. Commitments and Contingencies

Letters of Credit

In the normal course of business, letters of credit are issued primarily to support reinsurance arrangements in which the Company is the reinsurer. These letters of credit are supported by commitments under which the Company is required to indemnify the financial institution issuing the letter of credit if the letter of credit is drawn. The Company had ~~$16.8~~$12.1 million and ~~$18.1~~$13.2 million of letters of credit outstanding as of ~~September~~June 30, ~~2018~~2019 and December 31, ~~2017,~~2018, respectively.

Legal and Regulatory Matters

The Company is involved in a variety of litigation and legal and regulatory proceedings relating to its current and past business operations and, from time to time, it may become involved in other such actions. In particular, the Company is a defendant in class actions in a number of jurisdictions regarding its ~~lender-placed insurance~~Lender-placed Insurance programs. These cases assert a variety of claims under a number of legal

~~Assurant, Inc.~~

~~Notes to Consolidated Financial Statements (unaudited)~~

~~(In millions, except number of shares and per share amounts)~~

theories. The plaintiffs typically seek premium refunds and other relief. The Company continues to defend itself vigorously in these class actions. ~~We have~~The Company has participated and may participate in settlements on terms that ~~we consider reasonable given~~ the ~~strength of our defenses and other factors.~~Company considers reasonable.

The Company has established an accrued liability for ~~various~~certain legal and regulatory proceedings. ~~However, the~~The possible loss or range of loss resulting from such litigation and regulatory proceedings, if any, in excess of the amounts accrued is inherently unpredictable and uncertain. Consequently, no estimate can be made of any possible loss or range of loss in excess of the accrual. Although the Company cannot predict the outcome of any pending legal or regulatory ~~action,~~proceeding, or the potential losses, fines, penalties or equitable relief, if any, that may result, it is possible that such outcome could have a material adverse effect on the Company’s consolidated results of operations or cash flows for an individual reporting period. However, on the basis of currently available information, management does not believe that the pending matters are likely to have a material adverse effect, individually or in the aggregate, on the Company’s financial condition.

~~Guaranty Fund Assessments~~

Under state guaranty association laws, certain insurance companies can be assessed (up to prescribed limits) for certain obligations to the policyholders and claimants of impaired or insolvent insurance companies that write the same line or similar lines of business. In 2009, the Pennsylvania Insurance Commissioner (the “Commissioner”) placed long-term care insurer Penn Treaty Network America Insurance Company and one of its subsidiaries (collectively, “Penn Treaty”) in rehabilitation, an intermediate action before insolvency, and subsequently petitioned a state court to convert the rehabilitation into a liquidation. The state court began a hearing in July 2015 to consider the Commissioner’s most recent proposed rehabilitation plan, which contemplates a partial liquidation of Penn Treaty. In March 2017, the order of liquidation was granted. During the nine months ended September 30, 2018 and 2017, the Company accrued an additional $2.1 million and $0.8 million of expense, respectively, related to Penn Treaty due to a revised estimated total loss liability and had a net liability of $6.4 million as of September 30, 2018 for remaining obligations related to the insolvency.

~~19. Income Taxes~~

On December 22, 2017, the TCJA was signed into law implementing numerous changes to tax law including a permanent reduction in the U.S. federal corporate income tax rate from 35% to 21% effective for taxable years beginning on or after January 1, 2018. In accordance with Staff Accounting Bulletin 118 issued by the SEC in December 2017, the Company recorded provisional amounts for certain items for which the income tax accounting was not complete. In connection with the initial analysis of the impact of the TCJA, the Company recorded a net discrete provisional tax benefit of $177.0 million as of December 31, 2017. During the three months ended September 30, 2018, the Company finalized the provisional adjustment, recording an expense of $1.5 million, to reduce its final net discrete benefit to $175.5 million. Similarly, the Company recorded a $0.5 million adjustment to increase the assumed provisional tax liability from the TWG acquisition to $6.5 million. Such adjustment was accounted for as a measurement period adjustment and therefore did not impact the consolidated statements of operations.

As disclosed in Note 2, Argentina's economy was classified as highly inflationary beginning July 1, 2018, changing the functional currency of our Argentina subsidiaries from the local currency to U.S. Dollars. When the functional currency is the reporting currency, deferred tax benefits resulting from the remeasurement of non-U.S. Dollar denominated monetary assets and liabilities cannot be recognized for accounting purposes. As a result, there was no tax benefit during the three and nine months ended September 30, 2018 related to the $17.9 million of net pre-tax losses from the classification of Argentina's economy as highly inflationary. During the nine months ended September 30, 2018, the Company recorded net tax benefits of $3.9 million in the Global Lifestyle segment, as a result of changes in estimates related to international taxes, and $5.7 million in the Corporate segment, as a result of the structuring of the combined Assurant and TWG legal entities. The benefits and expenses are reflected in the provision for income taxes line item in the consolidated statements of operations.

During the nine months ended September 30, 2017, the Company recorded net tax benefits of $9.6 million in the Global Lifestyle segment. The tax benefit was driven by two factors, including an international restructuring, in which there was a dividend and release of foreign tax credits which resulted in a future tax benefit of $6.2 million, as well as a reduction in a valuation allowance of $3.4 million for an international subsidiary due to improved outlook. The benefit for these future credits has been reflected within the provision for income taxes in the consolidated statements of operations.

Assurant, Inc.

Notes to Consolidated Financial Statements (unaudited)

(In millions, except number of shares and per share amounts)

~~20. Dispositions~~

~~On August 1, 2018,~~basis of currently available information, management does not believe that the ~~Company sold its mortgage solutions business~~pending matters are likely to ~~Xome, an indirectly wholly owned subsidiary of WMIH Corp., for $36.7 million (comprised of $35.0 million cash consideration and $1.7 million working capital adjustment based~~have a material adverse effect, individually or in the aggregate, on the terms of the agreement) and potential future payments based on revenue retention targets and certain types of new business. The sale includes Assurant Services, LLC and its wholly owned subsidiaries Assurant Field Services, Assurant Valuations Originations, Assurant Valuations Default and Assurant Title. The Company has entered into a transition services agreement to provide ongoing services for one year for fees approximating the cost of such services. During the nine months ended September 30, 2018, the Company recorded total pre-tax losses of $41.0 million, which include (i) a pre-tax impairment loss of $43.5 million for the period ended June 30, 2018 when comparing the net assets held for sale to the estimated fair value less selling costs prior to the close, partly offset by (ii) a net adjustment of $2.5 million for the three months ended September 30, 2018 to update for actual losses through the closing date. The loss is classified in underwriting, general and administrative expenses in the consolidated statements of operations.Company’s financial condition.

~~21. Subsequent Event~~

~~Hurricane Michael~~

During October 2018, Hurricane Michael made landfall in Florida. At the time of this filing, the claims process continues and our current view of the pre-tax loss estimate is $75.0 million to $105.0 million, which is below the 2018 catastrophe reinsurance program per event retention of $120.0 million pre-tax. There is inherent variability in estimates of early loss projections and claims severity, particularly in high-damage regions, and therefore, the estimate may change as additional information emerges. The fourth quarter 2018 will include losses from this event.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

(~~Dollar amounts in~~In millions, except number of shares and per share amounts)

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with ~~Management's~~Management’s Discussion and Analysis of Financial Condition and Results of Operations ("(“MD~~&A"~~&A”) and the annual audited consolidated financial statements for the year ended December 31, ~~2017~~2018 included in our Annual Report on Form 10-K for the year ended December 31, ~~2017~~2018 (the ~~"2017~~“2018 Annual ~~Report"~~Report”) filed with the U.S. Securities and Exchange Commission (the “SEC”) and the unaudited consolidated financial statements for the three and ~~nine~~six months ended ~~September~~June 30, ~~2018~~2019 and accompanying notes (the “Consolidated Financial Statements”) included elsewhere in this Quarterly Report on Form 10-Q (this ~~"Report"~~“Report”).

Some of the statements included in this MD&A and elsewhere in this Report, particularly those anticipating future financial performance, business prospects, growth and operating strategies and similar matters, as well as estimated reportable catastrophe losses, are forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. You can identify these statements by the use of words such as “will,” “may,” “can,” “anticipates,” “expects,” “estimates,” “projects,” “intends,” “plans,” “believes,” “targets,” “forecasts,” “potential,” “approximately,” orand the negative version of those words and other words and terms with a similar meaning. Any forward-looking statements contained in this Report are based upon our historical performance and on current plans, estimates and expectations. The inclusion of this forward-looking information should not be regarded as a representation by us or any other person that ~~the~~our future plans, estimates or expectations ~~contemplated by us~~ will be achieved. Our actual results might differ materially from those projected in the forward-looking statements. ~~The Company undertakes~~We undertake no obligation to update or review any forward-looking statement, whether as a result of new information, future events or other developments. The following factors could cause our actual results to differ materially from those currently estimated by management:


(i)	the ~~effective integration~~loss of ~~The Warranty Group acquisition;~~significant clients, distributors or other parties with whom we do business or those parties facing financial, reputational or regulatory issues;


(ii)	~~the loss of~~ significant ~~client relationships or business, distribution sources~~competitive pressures, changes in customer preferences and ~~contracts;~~disruption;


(iii)	the failure to find suitable acquisitions, integrate completed acquisitions, including that of The Warranty Group (“TWG”), or grow organically, and risks associated with joint ventures;


(iv)	the impact of general economic, financial market and political ~~conditions;~~conditions, including unfavorable conditions in the capital and credit markets, and conditions in the markets in which we operate;


~~(iv)~~	~~the adequacy of reserves established for future claims;~~


(v)	~~the impact of catastrophic losses, including human-made catastrophic losses;~~


~~(vi)~~	~~a decline in our credit or financial strength ratings;~~


~~(vii)~~	risks related to our international operations ~~including~~or fluctuations in exchange rates;


~~(viii)~~(vi)	~~an impairment~~the impact of the Company’s goodwill or other intangible assets resulting from a sustained significant decline in the Company’s stock price, a decline in actual or expected future cash flows or income, a significant adverse change in the business climate or slower growth rate, among other circumstances;catastrophic and non-catastrophe losses;


~~(ix)~~(vii)	our inability to recover should we experience a ~~failure to effectively maintain and modernize our information technology systems;~~business continuity event;


~~(x)~~(viii)	~~the Company’s vulnerability to system security threats, data protection breaches, cyber-attacks and data breaches compromising client information and privacy;~~


~~(xi)~~	~~significant competitive pressures in~~ our ~~businesses or changes in customer preferences;~~


~~(xii)~~	~~the failure to find and integrate suitable acquisitions and new ventures;~~


~~(xiii)~~	~~a decline in the sales of our products and services resulting from an~~ inability to develop and maintain distribution sources or attract and retain sales representatives;


(ix)	the failure to manage vendors and other third parties on whom we rely to conduct business and provide services to our clients;


(x)	declines in the value of mobile devices or export compliance risk in our mobile business;


(xi)	negative publicity relating to our products and services or the markets in which we operate;


(xii)	the failure to implement our strategy and to attract and retain key personnel, including senior management;


(xiii)	employee misconduct;


(xiv)	the adequacy of reserves established for claims and our inability to accurately predict and price for claims;


(xv)	a decline in financial strength ratings or corporate senior debt ratings;


(xvi)	an impairment of goodwill or other intangible assets;


(xvii)	the failure to maintain effective internal control over financial reporting;


(xviii)	a decrease in the value of our investment ~~portfolio;~~


~~(xv)~~	~~the impact of recently enacted tax reform legislation in the U.S.;~~


~~(xvi)~~	~~the impact from litigation, other contingent liabilities~~portfolio including due to market, credit and ~~loss contingencies, regulatory investigations, reviews and markets studies to which we are or may become subject;~~


~~(xvii)~~	the extensive laws and regulations to which we are and may become subject, including relating to data privacy (such as the new privacy acts in the European Union and in California), could increase our costs, restrict the conduct of our business and limit our growth;


~~(xviii)~~	~~the failure to successfully manage outsourcing activities, such as call center services;~~liquidity risks;


(xix)	~~a decline in~~ the ~~value~~impact of ~~mobile devices in our inventory or those that are subject to guaranteed buyback provisions;~~U.S. tax reform legislation and impairment of deferred tax assets;


(xx)	the unavailability or inadequacy of reinsurance ~~coverage;~~coverage and the credit risk of reinsurers, including those to whom we have sold business through reinsurance;


(xxi)	the ~~insolvency~~credit risk of ~~third parties to whom we have sold or may sell businesses through reinsurance or modified co-insurance;~~some of our agents;


(xxii)	~~the credit risk of some of our agents that we are exposed to due to the structure of our commission program;~~


~~(xxiii)~~	the inability of our subsidiaries to pay sufficient dividends to the holding ~~company;~~company and limitations on our ability to declare and pay dividends;


(xxiii)	changes in the method for determining LIBOR or the replacement of LIBOR;


(xxiv)	the failure to ~~attract~~effectively maintain and ~~retain key personnel~~modernize our information technology systems and infrastructure, or the failure to ~~provide for succession~~integrate those of ~~senior management~~acquired businesses;


(xxv)	breaches of our information systems or those of third parties with whom we do business, or the failure to protect data in such systems, including due to cyber-attacks;


(xxvi)	the costs of complying with, or the failure to comply with, extensive laws and ~~key executives.~~regulations to which we are subject, including those related to privacy, data security and data protection;


(xxvii)	the impact from litigation and regulatory actions;


(xxviii)	reductions in the insurance premiums we charge; and


(xxix)	changes in insurance and other regulation.

For additional information on factors that could affect our actual results, please refer to ~~"Critical~~“Critical Factors Affecting ~~Results"~~Results” below and in Item 7 of our ~~2017~~2018 Annual Report, and ~~"Item 1A-Risk Factors"~~“Item 1A—Risk Factors” in our ~~2017~~2018 Annual Report.

General

As of ~~September~~June 30, ~~2018,~~2019, the Company has four reportable segments, which are defined based on the nature of the products and services offered:

Global Housing: provides lender-placed ~~homeowners; manufactured housing and flood insurance; and~~homeowners insurance (referred to as “Lender-placed Insurance”); renters insurance and related products (referred to as ~~multifamily housing).~~“Multifamily Housing”); and manufactured housing and flood insurance and other specialty products (referred to as “Specialty and Other”);

Global Lifestyle: provides mobile device protection products and related services and extended service products and related services for consumer electronics and appliances (referred to as ~~Connected Living)~~“Connected Living”); vehicle protection and related services (referred to as ~~Global Automotive)~~“Global Automotive”); and credit ~~insurance~~ and other insurance (referred to as “Global Financial ~~Services).~~Services and Other”);

Global Preneed: provides pre-funded funeral ~~insurance.~~insurance and annuity products; and

~~Total~~ Corporate and Other: ~~Corporate and Other~~ includes activities of the holding company, financing and interest expenses, net realized gains (losses) on investments, interest income earned from short-term investments held and income (expenses) primarily related to the ~~Company's~~Company’s frozen benefit plans. Corporate and Other also includes the amortization of deferred gains associated with the sales of ~~Fortis Financial Group, Long-Term Care and the Assurant Employee Benefits~~ businesses through reinsurance agreements, expenses related to the acquisition of ~~The Warranty Group (see below),~~TWG, foreign ~~exchange~~currency gains (losses) from remeasurement of monetary assets and liabilities, the gain or loss on the sale of ~~mortgage solutions~~businesses and other unusual or infrequent items. Additionally, the ~~Total~~ Corporate and Other segment includes amounts related to the runoff of the Assurant Health business. ~~As Assurant Health was a reportable segment in prior years, these amounts are disclosed for comparability.~~

The following discussion covers the three and ~~nine~~six months ended ~~September~~June 30, ~~2018~~2019 (“~~Third~~Second Quarter ~~2018"~~2019” and ~~"Nine~~“Six Months ~~2018"~~2019”) and the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2018 (“~~Third~~Second Quarter ~~2017”~~2018” and ~~"Nine~~“Six Months ~~2017"~~2018”).

Executive Summary

Items Impacting Comparability of Financial Results:

On May 31, 2018, ~~the Company closed its acquisition of~~we acquired TWG Holdings Limited ~~(“TWG Holdings,”~~ and ~~together with~~ its subsidiaries (as subsequently reorganized, “TWG”)~~, a Bermuda limited company and a global provider~~ for total consideration of ~~protection plans and related programs. Our results of operations for the Nine Months 2018 included the results of operations from TWG for the period June 1, 2018 through September 30, 2018.~~$2.47 billion. For more information regarding the acquisition, see Note 4 to the Consolidated Financial Statements included elsewhere in this Report.

On August 1, 2018, ~~the Company~~we sold ~~its mortgage solutions~~our valuation and field services business (referred to as “Mortgage Solutions”) to Xome, an indirectly wholly owned subsidiary of WMIH Corp.~~, for cash consideration~~

In July 2019, we finalized our 2019 property catastrophe reinsurance program. The U.S. per-event catastrophe coverage provides $1.16 billion of ~~approximately $35.0~~protection in excess of $80.0 million ~~and potential future payments based on performance. The sale includes all~~ of ~~Assurant’s mortgage solutions businesses consisting of title, valuations and field services. The disposition resulted in a total pre-tax loss of $41.0 million~~retention, which was ~~included~~reduced from $120.0 million in the ~~consolidated statements~~2018 program. The coverage was placed with more than 45 reinsurers that are all rated A- or better by A.M. Best. See “Catastrophe Reinsurance Program” below.

Summary of ~~operations in Nine Months 2018. For more information on the sale, see Note 20 to the Consolidated~~ Financial ~~Statements, included elsewhere in this Report.~~Results:

~~For Third Quarter 2018, consolidated~~Consolidated net income attributable to common stockholders ~~was $48.3~~increased $77.3 million, or 124%, to $139.5 million for Second Quarter 2019 compared with ~~a net loss of $57.3~~$62.2 million for ~~Third~~Second Quarter ~~2017. The increase in net income was~~2018, primarily driven by ~~lower reportable catastrophes (reportable catastrophe~~growth within our Global Lifestyle segment, including contributions from TWG, increased net realized gains on investments in Second Quarter 2019 compared to net realized losses ~~net of reinsurance and client profit sharing adjustments, and including reinstatement and other premiums). Net income for Third~~in Second Quarter 2018 and lower after-tax net charges associated with the TWG acquisition. Second Quarter 2018 also included ~~$67.7~~a $34.4 million of after-tax reportable catastrophes compared to $191.8 million of after-tax reportable catastrophes in Third Quarter 2017. Reportable catastrophes in 2018 reflect a tax benefit at the new U.S. corporate tax rate of 21% in comparisonloss on net assets held for sale related to the 35% effective tax rate in 2017 as a result of the enactment of the TCJA, which adversely impacted results due to the prior year net loss. Net income for Third Quarter 2018 included $29.9 million in earnings contributions in Global Lifestyle from TWG.Mortgage Solutions business. The increase was partially offset by ~~$18.3~~an $11.4 million after-tax impairment of ~~net losses from foreign exchange primarily related to the remeasurement of net monetary~~certain intangible assets from our ~~operations in Argentina.~~acquisition of Green Tree Insurance Agency (“Green Tree”).

Global Housing net income was $19.4 million for Third Quarter 2018 compared to a net loss of $110.3 million for Third Quarter 2017, primarily due to lower reportable catastrophes. Net income for Third Quarter 2018 included $66.6 million of after-tax reportable catastrophes related to wind and flood damage from Hurricane Florence in the Carolinas and an increase in reserves for claims on Hurricane Maria. This compares to $186.8 million in reportable catastrophes in the prior period. Results were adversely impacted by the year-over-year change in tax rate due to the prior year period net loss. Global Housing net income excluding reportable catastrophes also benefitted from the lower effective tax rate. Excluding reportable catastrophes and the impact of a lower effective tax rate, segment net income decreased primarily due to less favorable non-catastrophe loss experience and lower premiums in our lender-placed insurance business, partially offset by profitability in other specialty property offerings, including international dwelling, and growth in multifamily housing.

~~Net earned premiums and fees decreased $8.7~~$1.1 million, or 2%, to ~~$521.6~~$71.5 million for ~~Third~~Second Quarter ~~2018 from $530.3~~2019 compared with $72.6 million for ~~Third~~Second Quarter ~~2017,~~2018, primarily due to an increase in the frequency and severity of losses from our small commercial products and the cost of additional catastrophe reinsurance protection secured as part of the 2019 program, partially offset by growth in our Multifamily Housing business, positive contributions in our Lender-placed Insurance business and the absence of losses from Mortgage Solutions in Second Quarter 2018.

Global Housing net earned premiums, fees and other income decreased $32.4 million, or 6%, to $510.1 million for Second Quarter 2019 from $542.5 million for Second Quarter 2018, mainly reflecting the sale of ~~mortgage solutions.~~Mortgage Solutions. Excluding ~~mortgage solutions,~~Mortgage Solutions, net earned premiums, ~~and~~ fees ~~increased approximately 9% due to the absence of catastrophe reinsurance reinstatement~~ and other premiums (which are accounted for as reductions to premium) compared to the prior period and growth from other specialty property offerings such as commercial property and multifamily housing. The increase was partially offset by lower real-estate owned ("REO") volume and expected lower placement rates in our lender-placed insurance business.

~~For 2018, we expect Global Housing's net~~ income ~~excluding reportable catastrophes, to increase after reflecting a lower effective tax rate of approximately 20% to 21%, with a portion of the tax savings to be reinvested for future growth,~~increased primarily in the second half of 2018. Net income, excluding reportable catastrophes, is expected to decrease before taking into account the lower effective tax rate. Further declines in our lender-placed insurance business are expected to drive the decrease, partially offset by continued profitable growth in our multifamily housing business. We expect additional savings from expense

management efforts to be realized towards the end of 2018 and into 2019. Revenue is expected to contract from 2017 levels due to declines in our lender-placed insurance business and mortgage solutions business until its sale. Excluding mortgage solutions for the full year, revenue is expected to increase due to growth in ~~multifamily housing, international~~our Specialty and ~~other specialty property products. Fourth quarter will also include losses~~Other business, mostly driven by growth in ride sharing and small commercial products, and the continued growth from ~~Hurricane Michael. For~~our Multifamily Housing business, partially offset by the cost of additional ~~information, see Note 21~~catastrophe reinsurance protection.

Global Lifestyle segment net income increased $41.2 million, or 60%, to $109.3 million for Second Quarter 2019 from $68.1 million for Second Quarter 2018, benefiting from the ~~Consolidated Financial Statements, included elsewhere~~TWG acquisition. Excluding TWG, the increase was driven by organic mobile growth in ~~this Report.~~Connected Living, mainly from new and existing mobile clients in Asia Pacific and North America, as well as improved operating performance in our European mobile business, partially offset by the continued investments in those businesses to support growth.

Global Lifestyle net earned premiums, fees and other income increased ~~$33.3~~$706.9 million, or ~~78%~~64%, to ~~$75.9 million~~$1.81 billion for ~~Third~~Second Quarter 2019 from $1.10 billion for Second Quarter 2018, ~~from $42.6 million for Third Quarter 2017,~~ primarily ~~due~~attributable to $29.9 million in earnings contribution from TWG. Global Lifestyle net income for 2018 benefited modestly from the impact of a lower effective tax rate following the enactment of the TCJA compared to the prior period, which included a $9.6 million non-recurring tax benefit. Excluding the earnings contribution from TWG and the lower effective tax rate, Global Lifestyle net income increased due to growth from Connected Living as a result of new mobile business and expense management efforts within our extended service contracts business. This increase was partially offset by continued declines in Financial Services, primarily from expected discontinued partnerships.

Net earned premiums and fees increased $699.8 million, or 83%, to $1.54 billion for Third Quarter 2018 from $841.7 million for Third Quarter 2017, primarily due to the addition of $625.9 million of net earned premiums and fees from TWG. Excluding TWG, ~~net earned premiums and fees increased due to organic~~the increase was mostly driven by subscriber growth ~~in our Global Automotive business and~~from new mobile protection programs and organic growth in Global Automotive from strong prior period sales of warranty contracts, partially offset by ~~lower mobile trade-in volumes. Foreign exchange volatility also reduced net earned premium and fees.~~

For 2018, we expect Global Lifestyle's net income to increase after reflecting contributions from TWG including operating synergies, a lower effective tax rate of approximately 22% to 24% and organic growth. A portion of the tax savings is to be reinvested for future growth, primarily in the second half of 2018. The tax rate may fluctuate based on geographic mix of income. Net income is expected to increase modestly before taking into account the lower effective tax rate and contributions from TWG. We expect profitable growth to be driven primarily by newly launched mobile programs, Global Automotive expansion and ongoing expense management efforts, partially offset by ongoing declines in Financial Services due to discontinued client partnerships in the second half of 2018. Net income may be impacted byunfavorable foreign exchange volatility, notably from the impact of the Argentina highly inflationary designation. Mobile trade-in activity may vary based on the timing and availability of new smartphone introductions and carrier promotional activity. Revenue is expected to increase from worldwide growth in Connected Living and Global ~~Automotive.~~Financial Services.

Global Preneed segment net income increased $2.2 million, or 15%, to $16.9 million for Second Quarter 2019 from $14.7 million in Second Quarter 2018, primarily due to an increase in investment income, mainly from higher invested assets, and overall growth in the business from increased covered policies and a more profitable sales mix.

Global Preneed net earned premiums, fees and other income increased ~~$4.5~~$2.7 million, or ~~37%~~6%, to ~~$16.8~~$49.6 million for ~~Third~~Second Quarter ~~2018~~2019 from ~~$12.3~~$46.9 million ~~in Third~~for Second Quarter ~~2017~~2018, primarily due to the lower effective tax rate following the enactment of the TCJA. Excluding the impact of a lower effective tax rate, underlying results increased due to higher investment income and growth in the business.

~~Net earned premiums and fees increased $3.5 million, or 8%, to $48.1 million for Third Quarter 2018 from $44.6 million for Third Quarter 2017, driven by~~ growth in pre-funded funeral policies in the U.S. and ~~Canada, as well as prior period~~ sales of the pay for life (“Final ~~Need~~Need”) product.

For 2018, we expect Global Preneed's revenue and net income to increase modestly due to our alignment with market leaders, before taking into account recently enacted tax reform. Net income is expected to benefit from a lower effective tax rate of approximately 22%, with a portion of the tax savings to be reinvested for future growth, primarily in the second half of 2018.

Critical Factors Affecting Results

Our results depend on, among other things, the appropriateness of our product pricing, underwriting, ~~and~~ the accuracy of our reserving methodology ~~for the establishment of reserves~~ for future policyholder benefits and claims, the frequency and severity of reportable and non-reportable catastrophes, returns on and values of invested assets and our ability to manage our expenses and achieve expense ~~savings and the severity and frequency of catastrophes.~~savings. Our results will also depend on our ability to profitably grow our ~~fee-based, capital-light businesses, including~~ Connected Living, Multifamily Housing and ~~multifamily housing, as well as~~ Global Automotive businesses, and manage the pace of declines in placement rates in our ~~lender-placed~~Lender-placed Insurance business and the U.S. credit insurance ~~business.~~business in Global Financial Services and Other. In addition, our results will be impacted by our ability to integrate ~~TWG.~~TWG and achieve benefits and synergies from the acquisition. Factors affecting these items, including, but not limited to, conditions in financial markets, the global economy and the markets in which we operate, ~~and~~ fluctuations in exchange rates and inflation, may have a material adverse effect on our results of operations or financial condition. For more information on these and other factors that could affect our results, see “Item 1A—Risk Factors” and “Item 7—~~MD&A—~~Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Factors Affecting Results” in our ~~2017~~2018 Annual Report.

Our results may be impacted by our ability to continue to grow in the markets in which we operate, including in our Connected Living, Multifamily Housing and Global Automotive businesses, and to manage our Lender-placed Insurance business. Our mobile business is subject to volatility in mobile device trade-in volumes based on the release of new devices and carrier promotional programs, as well as to changes in the mobile device market dynamics. Our Lender-placed Insurance revenues will also be impacted by changes in the housing market. In addition, across many of our businesses, we must respond to the threat of disruption. See “Item 1A—Risk Factors—Business and Competitive Risks—Significant competitive pressures, changes in customer preferences and disruption could adversely affect our results of operations” in our 2018 Annual Report.

Management believes ~~the Company~~that we will have sufficient liquidity to satisfy ~~its~~our needs over the next twelve months, including the ability to pay interest on our debt and dividends on our common and preferred stock.

For the ~~nine~~six months ended ~~September~~June 30, ~~2018,~~2019, net cash provided by operating activities was ~~$454.6~~$725.7 million; net cash used in investing activities ~~totaled $1.90 billion~~was $609.6 million and net cash provided by financing activities ~~totaled $1.79 billion.~~was $118.6 million. We had

~~$1.31~~ $1.49 billion in cash and cash equivalents as of ~~September~~June 30, 2019 as compared to $1.25 billion as of December 31, 2018. Please see “—Liquidity and Capital Resources,” below for further details.

Critical Accounting Policies and Estimates

Our ~~2017~~2018 Annual Report describes the accounting policies and estimates that are critical to the understanding of our results of operations, financial condition and liquidity. The accounting policies and estimation process described in the ~~2017~~2018 Annual Report were consistently applied to the unaudited interim Consolidated Financial Statements for ~~Third~~Second Quarter ~~2018.~~2019.

Recent Accounting Pronouncements

For a discussion of recent accounting pronouncements, see Note 3 to the Consolidated Financial Statements included elsewhere in this Report.

Management generally identifies highly inflationary markets as those markets whose cumulative inflation rates over a three-year period exceeds 100%, in addition to considering other qualitative and quantitative factors. Beginning July 1, 2018, as a result of the classification of Argentina's economy as highly inflationary, the functional currency of our Argentina subsidiaries changed from the local currency to U.S. Dollars. The subsidiaries' non-U.S. Dollar denominated monetary assets and liabilities were subject to remeasurement for the period between July 1, 2018 and September 30, 2018 that resulted in $17.9 million of net losses that were reported through underwriting, general and administrative expenses, within the Consolidated Statements of Operations. Although we continue to evaluate the impact, we do not anticipate the ongoing remeasurement to have a material impact on our results of operations or financial condition when considering the foreign exchange volatility applied to the net monetary assets of our Argentina subsidiary.

Results of Operations

Assurant Consolidated

Overview

The table below presents information regarding our consolidated results of operations:


	For the Three Months Ended September 30,						For the Nine Months Ended September 30,					For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2018			2017			2018			2017		2019			2018			2019			2018
Revenues:
Net earned premiums	$	1,853.6		$	1,073.1		$	4,316.8		$	3,238.7	$	2,032.7		$	1,338.3		$	3,937.1		$	2,463.2
Fees and other income	257.9			349.1			976.6			1,016.2		336.1			354.2			664.4			718.7
Net investment income	151.8			132.6			417.6			374.9		154.2			135.6			320.5			265.8
Net realized (losses) gains on investments	(5.7		)	8.5			(16.6		)	25.1
Net realized gains (losses) on investments												17.8			(11.4		)	46.6			(10.9		)
Amortization of deferred gains on disposal of businesses	12.7			23.1			46.2			83.5		4.7			15.0			12.5			33.5
Total revenues	2,270.3			1,586.4			5,740.6			4,738.4		2,545.5			1,831.7			4,981.1			3,470.3
Benefits, losses and expenses:
Policyholder benefits	680.9			682.2			1,586.1			1,456.6		687.0			490.6			1,301.7			905.2
Amortization of deferred acquisition costs and value of business acquired	750.6			332.5			1,560.2			993.7		815.8			463.2			1,593.1			809.6
Underwriting, general and administrative expenses	736.5			667.1			2,229.7			1,964.7		832.9			773.6			1,633.0			1,493.2
Interest expense	26.5			12.2			74.0			37.2		26.5			26.0			53.0			47.5
Total benefits, losses and expenses	2,194.5			1,694.0			5,450.0			4,452.2		2,362.2			1,753.4			4,580.8			3,255.5
Income (loss) before provision (benefit) for income taxes	75.8			(107.6		)	290.6			286.2
Provision (benefit) for income taxes	22.8			(50.3		)	64.6			79.5
Net income (loss)	53.0			(57.3		)	226.0			206.7
Income before provision for income taxes												183.3			78.3			400.3			214.8
Provision for income taxes												40.7			11.3			89.1			41.8
Net income												142.6			67.0			311.2			173.0
Less: Net loss (income) attributable to non-controlling interest												1.5			—			(1.4		)	—
Net income attributable to stockholders												144.1			67.0			309.8			173.0
Less: Preferred stock dividends	(4.7		)	—			(9.5		)	—		(4.6		)	(4.8		)	(9.3		)	(4.8		)
Net income (loss) attributable to common stockholders	$	48.3		$	(57.3	)	$	216.5		$	206.7
Net income attributable to common stockholders												$	139.5		$	62.2		$	300.5		$	168.2

For the Three Months Ended ~~September~~June 30, ~~2018~~2019 Compared to the Three Months Ended ~~September~~June 30, ~~2017~~

~~Net Income (Loss) Attributable to Common Stockholders~~

~~Consolidated net income attributable to common stockholders was $48.3 million for Third Quarter~~ 2018 compared to a net loss of $57.3 million for Third Quarter 2017. The increase in net income was primarily driven by lower reportable catastrophes. Net income for Third Quarter 2018 included $67.7 million of after-tax reportable catastrophes compared to $191.8 million of after-tax reportable catastrophes in Third Quarter 2017. Reportable catastrophes in 2018 reflect a tax benefit at 21% as compared to 35% in 2017 as a result of the enactment of the TCJA and therefore, the change in tax rate negatively impacted results year over year due to the prior period loss. Net income excluding reportable catastrophes benefited from the aforementioned lower effective tax rate and our Global Lifestyle business, which included $29.9 million in earnings contributions from TWG. The increase was partially offset by $18.3 million of net losses from foreign exchange primarily related to the remeasurement of net monetary assets from our operations in Argentina, an unfavorable change in net realized gains (losses), additional interest expense from acquisition related financing, lower earnings contributions from our Global Housing business and an increase in expenses related to the integration of TWG.

~~For the Nine Months Ended September 30, 2018 Compared to the Nine Months Ended September 30, 2017~~

Net Income Attributable to Common Stockholders

Consolidated net income attributable to common stockholders increased ~~$9.8~~$77.3 million, or 5%124%, to ~~$216.5~~$139.5 million for ~~Nine Months 2018, compared to $206.7~~Second Quarter 2019 from $62.2 million for ~~Nine Months 2017.~~Second Quarter 2018. The increase ~~in net income~~ was primarily driven by lower reportable catastrophes, partially offset by other items described below. Net income for Nine Months 2018 included $74.1 million of after-tax reportable catastrophes compared to $192.4 million of after-tax reportable catastrophesgrowth in ~~Nine Months~~

2017. Reportable catastrophes in 2018 reflect a tax benefit at 21% as compared to 35% in 2017 as a result of the enactment of the TCJA. Net income excluding reportable catastrophes benefited from the impact of the aforementioned lower effective tax rate and our Global Lifestyle segment, benefiting from continued organic growth in Connected Living and the TWG acquisition, as well as an increase in net realized gains on investments (both from sales of investments and changes in fair value of equity securities) compared to a net realized loss in Second Quarter 2018. Additionally, Second Quarter 2018 included a $34.4 million after-tax loss on net assets held for sale related to our Mortgage Solutions business ~~which included $39.3~~and $27.4 million ~~in earnings contributions from TWG.~~of higher after-tax net charges associated with the TWG acquisition. The increase was partially offset by ~~a $58.6 million increase in after-tax net acquisition and integration expenses related to the TWG acquisition, a $32.4~~an $11.4 million after-tax ~~loss on the sale~~impairment of certain intangible assets from our ~~mortgage solutions business, an unfavorable change in net realized gains (losses),~~acquisition of Green Tree, lower after-tax amortization of deferred gains associated with the sale of Assurant Employee Benefits, ~~$14.5~~a $7.3 million after-tax unfavorable change in remeasurement related foreign exchange and a $5.8 million after-tax unfavorable change in the fair value of derivative instruments for acquisitions.

For the Six Months Ended June 30, 2019 Compared to the Six Months Ended June 30, 2018

Net Income Attributable to Common Stockholders

Consolidated net income attributable to common stockholders increased $132.3 million, or 79%, to $300.5 million for Six Months 2019 from $168.2 million for Six Months 2018. The increase was primarily driven by growth in our Global Lifestyle

segment, benefiting from contributions from the TWG acquisition and continued organic growth in Connected Living, as well as an increase in net realized gains on investments mostly related to a net increase in fair value of equity securities. Additionally, Second Quarter 2018 included $38.9 million of higher after-tax net charges associated with the TWG acquisition and a $34.4 million after-tax loss on net assets held for sale related to our Mortgage Solutions business. The increase was partially offset by additional after-tax interest expense and preferred dividends from acquisition related financing, lower after-tax amortization of deferred gains associated with the sale of Assurant Employee Benefits, an $11.6 million after-tax unfavorable change in remeasurement related foreign exchange (that included $5.3 million of net losses from ~~foreign exchange, primarily related to the remeasurement of net monetary assets from~~ our operations in ~~Argentina,~~Argentina) and an ~~increase in interest expense related to acquisition related financing.~~$11.4 million after-tax impairment of certain intangible assets.

Global Housing

Overview

The table below presents information regarding the Global ~~Housing’s segment~~Housing segment’s results of ~~operations:~~operations for the periods indicated:

For the Three Months Ended September 30, For the Nine Months Ended September 30,
2018 2017 2018 2017
Revenues:
Net earned premiums $ 463.0
$ 423.0
$ 1,349.1
$ 1,301.8
Fees and other income 58.6
107.3
238.1
310.4
Net investment income 17.1
23.6
53.2
59.6
Total revenues 538.7
553.9
1,640.4
1,671.8
Benefits, losses and expenses:
Policyholder benefits 264.8
436.7
621.1
788.2
Amortization of deferred acquisition costs and value
of business acquired
51.2
49.7
151.2
147.4
Underwriting, general and administrative expenses 198.7
235.0
662.9
723.2
Total benefits, losses and expenses 514.7
721.4
1,435.2
1,658.8
Segment income (loss) before provision (benefit) for income taxes 24.0
(167.5 ) 205.2
13.0
Provision (benefit) for income taxes 4.6
(57.2 ) 42.0
5.2
Segment net income (loss) $ 19.4
$ (110.3 ) $ 163.2
$ 7.8
Net earned premiums, fees and other:
Lender-placed insurance $ 288.9
$ 299.2
$ 867.1
$ 910.7
Multifamily housing 103.4
93.5
300.9
269.2
Mortgage solutions 17.3
67.3
116.1
197.9
Manufactured housing and other 112.0
70.3
303.1
234.4
Total $ 521.6
$ 530.3
$ 1,587.2
$ 1,612.2
Ratio:
Combined ratio for risk-based businesses (1) 103.4 % 154.9 % 91.7 % 107.5 %



	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2019		2018		2019		2018
Revenues:
Net earned premiums	$	471.8	$	449.7	$	931.9	$	886.1
Fees and other income	38.3		92.8		78.2		179.5
Net investment income	18.8		15.9		44.2		36.1
Total revenues	528.9		558.4		1,054.3		1,101.7
Benefits, losses and expenses:
Policyholder benefits	207.8		187.2		406.7		356.3
Amortization of deferred acquisition costs and value of business acquired	57.5		50.4		111.4		100.0
Underwriting, general and administrative expenses	173.3		229.3		354.0		464.2
Total benefits, losses and expenses	438.6		466.9		872.1		920.5
Segment income before provision for income taxes	90.3		91.5		182.2		181.2
Provision for income taxes	18.8		18.9		38.0		37.4
Segment net income	$	71.5	$	72.6	$	144.2	$	143.8
Net earned premiums, fees and other income:
Lender-placed Insurance	$	281.8	$	288.5	$	556.0	$	578.2
Multifamily Housing	106.6		100.3		210.6		197.5
Mortgage Solutions	—		53.3		—		98.8
Specialty and Other	121.7		100.4		243.5		191.1
Total	$	510.1	$	542.5	$	1,010.1	$	1,065.6


~~(1)~~	The combined ratio for risk-based businesses is equal to total policyholder benefits, losses and expenses, including reportable catastrophe losses, divided by net earned premiums and fees and other income for lender-placed and manufactured housing and other risk-based businesses.

For the Three Months Ended ~~September~~June 30, ~~2018~~2019 Compared to the Three Months Ended ~~September~~June 30, ~~2017~~2018

Net Income ~~(Loss)~~

Segment net income ~~was $19.4~~decreased $1.1 million, or 2%, to $71.5 million for ~~Third~~Second Quarter ~~2018 compared to a net loss of $110.3~~2019 from $72.6 million for ~~Third~~Second Quarter ~~2017,~~2018. The decrease was primarily due to ~~lower reportable catastrophes,~~higher non-catastrophe loss experience from an increase in the frequency and severity of losses from our small commercial product, as well as the cost of additional catastrophe reinsurance protection secured as part of the 2019 program and a decline in placement rates in Lender-placed Insurance. The decrease was partially offset by ~~other items described below. Segment income for Third~~premium rate increases in Lender-placed Insurance, the absence of losses from our Mortgage Solutions business in Second Quarter 2018 included $66.6 million of after-tax reportable catastrophes, primarily from Hurricane Florence, compared to $186.8 million of after-tax reportable catastrophes in Third Quarter 2017, primarily from Hurricanes Harvey, Irma and Maria, and the ~~Mexico City earthquake. Reportable catastrophes~~continued growth from renters insurance in 2018 reflect a tax benefit at 21% as compared to 35% in 2017 as a result of the enactment of the TCJA and therefore, the change in tax rate negatively impacted results year over year due to the prior period loss. Segment net income excluding reportable catastrophes decreased due to less favorable non-catastrophe loss experience in lender-placed insurance, the ongoing declines in placement rates and REO volume from our lender-placed insurance business and lower net investment income driven by lower income from real estate joint venture partnerships, partially offset by increased profitability in specialty property products, including international dwelling, and growth in multifamily housing.Multifamily Housing.

Total Revenues

Total revenues decreased ~~$15.2~~$29.5 million, or 3%5%, to ~~$538.7~~$528.9 million for ~~Third~~Second Quarter ~~2018~~2019 from ~~$553.9~~$558.4 million for ~~Third~~Second Quarter ~~2017. Net earned premiums increased $40.0 million, or 9%, primarily~~2018. The decrease was mainly due to ~~lower reinsurance reinstatement and other premiums related to 2017 catastrophes, additional premiums from new commercial property and liability business and~~

~~multifamily housing growth from renters insurance. The increase was partially offset by lower volumes from our REO insurance product and ongoing declines~~a decrease in ~~placement rates from our lender placed insurance business. Fees~~fees and other income ~~decreased $48.7~~of $54.5 million, or ~~45%~~59%, primarily due to the sale of our ~~mortgage solutions business on August 1, 2018. Investment income decreased $6.5~~Mortgage Solutions business. Net earned premiums increased $22.1 million, or ~~28%~~5%, primarily due to ~~lower~~the growth of our Specialty and Other business, mostly driven by growth in ride sharing and small commercial products, increased premium rates in Lender-placed Insurance and the continued growth from renters insurance in Multifamily Housing. The increase in net earned premiums was partially offset by the cost of additional catastrophe reinsurance protection and a decline in placement rates in Lender-placed Insurance. Net investment income ~~from real estate joint venture partnerships.~~increased $2.9 million, or 18%, primarily due to an increase in invested assets.

Total Benefits, Losses and Expenses

Total benefits, losses and expenses decreased ~~$206.7~~$28.3 million, or ~~29%~~6%, to ~~$514.7~~$438.6 million for ~~Third~~Second Quarter ~~2018~~2019 from ~~$721.4~~$466.9 million for ~~Third~~Second Quarter ~~2017. Total policyholder benefits decreased $171.9 million, or 39%, primarily due to a $179.4 million~~2018. The decrease in net reportable catastrophe losses partially offset by a reduction in favorable non-catastrophe loss experience from our lender-placed insurance business. Reportable catastrophe losses include only individual catastrophic events that impact the Company in excess of $5.0 million, pre-tax and net of reinsurance. Underwriting, general and administrative expenses decreased $36.3 million, or 15%,was primarily due to a decrease in underwriting, general and administrative expenses ~~related to the sale~~ of our mortgage solutions business on August 1, 2018, partially offset by an increase in commission expense for our new commercial property and liability business and higher information technology expenses.

~~For the Nine Months Ended September 30, 2018 Compared to the Nine Months Ended September 30, 2017~~

~~Net Income~~

Segment net income increased $155.4 million to $163.2 million for Nine Months 2018 from $7.8 million for Nine Months 2017, primarily due to lower reportable catastrophes. Segment income for Nine Months 2018 included $74.3 million of after-tax reportable catastrophes, mainly from Hurricane Florence, compared to $187.4 million of after-tax reportable catastrophes for Nine Months 2017. Reportable catastrophes in 2018 reflect a tax benefit at 21% as compared to 35% in 2017 as a result of the enactment of the TCJA. Segment net income excluding reportable catastrophes benefited from the aforementioned lower effective tax rate and growth in multifamily housing and other specialty property casualty products, including international dwelling, partially offset by the ongoing declines in placement rates in our lender-placed insurance business and lower REO volumes.

~~Total Revenues~~

~~Total revenues decreased $31.4~~$56.0 million, or 2%, to $1.64 billion for Nine Months 2018 from $1.67 billion for Nine Months 2017. Net earned premiums increased $47.3 million, or 4%, primarily due to lower reinsurance reinstatement and other premiums related to 2017 catastrophes, multifamily housing growth from renters insurance, additional premiums from new commercial property and liability business, lower ceded premiums in manufactured housing and continued growth in our international housing business. The increase was partially offset by lower volumes from our REO insurance product and the ongoing declines in placement rates in our lender-placed insurance business. Fees and other income decreased $72.3 million, or 23%24%, primarily due to the sale of our ~~mortgage solutions business on August 1, 2018. Investment income decreased $6.4~~Mortgage Solutions business. The decrease was partially offset by an increase in total policyholder benefits of $20.6 million, or 11%, primarily due to ~~lower~~unfavorable non-catastrophe loss experience from an increase in the frequency and severity of losses from our small commercial product, and an increase in the amortization of deferred acquisition costs of $7.1 million, or 14%, primarily related to the growth of our small commercial product.

For the Six Months Ended June 30, 2019 Compared to the Six Months Ended June 30, 2018

Net Income

Segment net income of $144.2 million for Six Months 2019 was relatively flat compared to segment net income of $143.8 million for Six Months 2018. Excluding Mortgage Solutions from Six Months 2018, segment net income decreased primarily due to higher non-catastrophe loss experience from an increase in the frequency and severity of losses from our small commercial product, the cost of additional catastrophe reinsurance protection secured as part of the 2019 program and a decline in placement rates in Lender-placed Insurance. The decrease was partially offset by premium rate increases in Lender-placed Insurance, an increase in net investment income and growth across various products including Multifamily Housing.

Total Revenues

Total revenues decreased $47.4 million, or 4%, to $1.05 billion for Six Months 2019 from $1.10 billion for Six Months 2018. The decrease was mainly due to a decrease in fees and other income of $101.3 million, or 56%, primarily due to the sale of our Mortgage Solutions business. Net earned premiums increased $45.8 million, or 5%, primarily due to growth from our small commercial and ride sharing products, increased premium rates in Lender-placed Insurance and the continued growth from renters insurance in Multifamily Housing. The increase in net earned premiums was partially offset by the cost of additional catastrophe reinsurance protection and a decline in placement rates in Lender-placed Insurance. Net investment income increased $8.1 million, or 22%, primarily due to higher income from real estate ~~joint venture partnerships.~~related investments and an increase in invested assets.

Total Benefits, Losses and Expenses

Total benefits, losses and expenses decreased ~~$223.6~~$48.4 million, or ~~13%~~5%, to ~~$1.44 billion~~$872.1 million for ~~Nine~~Six Months ~~2018~~2019 from ~~$1.66 billion~~$920.5 million for ~~Nine~~Six Months ~~2017. Total policyholder benefits decreased $167.1 million, or 21%, primarily due to a $174.5 million~~2018. The decrease in net reportable catastrophe losses, partially offset by higher non-catastrophe loss experience from our multifamily housing business. Underwriting, general and administrative expenses decreased $60.3 million, or 8%,was primarily due to a decrease in underwriting, general and administrative expenses ~~resulting from~~of $110.2 million, or 24%, primarily due to the sale of our ~~mortgage solutions business on August 1, 2018,~~Mortgage Solutions business. The decrease was partially offset by ~~higher information technology expenses.~~an increase in total policyholder benefits of $50.4 million, or 14%, primarily due to unfavorable non-catastrophe loss experience from our small commercial product and an increase in the amortization of deferred acquisition costs of $11.4 million, or 11%, primarily related to the growth of our small commercial product.

Global Lifestyle

Overview

The table below presents information regarding the Global ~~Lifestyle’s segment~~Lifestyle segment’s results of ~~operations:~~operations for the periods indicated:


	For the Three Months Ended September 30,						For the Nine Months Ended September 30,						For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2018			2017			2018			2017			2019		2018		2019		2018
Revenues:
Net earned premiums	$	1,376.0		$	636.0		$	2,923.9		$	1,887.8		$	1,545.5	$	874.3	$	2,974.0	$	1,547.9
Fees and other income	165.5			205.7			638.3			594.8			263.6		227.9		516.7		472.8
Net investment income	54.7			33.1			123.4			86.0			56.5		36.6		115.4		68.7
Total revenues	1,596.2			874.8			3,685.6			2,568.6			1,865.6		1,138.8		3,606.1		2,089.4
Benefits, losses and expenses:
Policyholder benefits	352.2			190.6			773.1			517.3			412.9		239.3		760.1		420.9
Amortization of deferred acquisition costs and value of business acquired	681.5			266.1			1,357.4			800.7			740.7		395.6		1,446.5		675.9
Underwriting, general and administrative expenses	463.0			371.9			1,298.4			1,067.2			570.2		419.6		1,126.0		835.4
Total benefits, losses and expenses	1,496.7			828.6			3,428.9			2,385.2			1,723.8		1,054.5		3,332.6		1,932.2
Segment income before provision for income taxes	99.5			46.2			256.7			183.4			141.8		84.3		273.5		157.2
Provision for income taxes	23.6			3.6			56.9			48.2			32.5		16.2		63.6		33.3
Segment net income	$	75.9		$	42.6		$	199.8		$	135.2		$	109.3	$	68.1	$	209.9	$	123.9
Net earned premiums, fees and other:
Global connected living (mobile, service contracts and assistance services)	$	735.3		$	543.0		$	1,966.7		$	1,568.6
Global automotive	679.6			188.0			1,243.3			571.0
Global financial services	126.6			110.7			352.2			343.0
Net earned premiums, fees and other income:
Connected Living (mobile and service contracts)													$	961.7	$	629.3	$	1,832.7	$	1,231.4
Global Automotive													731.4		361.2		1,425.0		563.7
Global Financial Services and Other													116.0		111.7		233.0		225.6
Total	$	1,541.5		$	841.7		$	3,562.2		$	2,482.6		$	1,809.1	$	1,102.2	$	3,490.7	$	2,020.7
Net earned premiums, fees and other:
Net earned premiums, fees and other income:
Domestic	$	1,098.8		$	534.5		$	2,414.5		$	1,570.0		$	1,251.1	$	736.2	$	2,442.4	$	1,315.7
International	442.7			307.2			1,147.7			912.6			558.0		366.0		1,048.3		705.0
Total	$	1,541.5		$	841.7		$	3,562.2		$	2,482.6		$	1,809.1	$	1,102.2	$	3,490.7	$	2,020.7
Ratios:
Combined ratio for risk-based businesses (1)	97.2		%	99.2		%	97.4		%	96.2		%
Pre-tax income margin for fee-based, capital-light businesses (2)	5.3		%	3.8		%	6.7		%	5.7		%


~~(1)~~	The combined ratio for risk-based businesses is equal to total policyholder benefits, losses and expenses divided by net earned premiums and fees and other income for Global Automotive and Financial Services.


~~(2)~~	The pre-tax income margin for fee-based, capital-light businesses equals income before provision for income taxes divided by net earned premiums and fees and other income for Connected Living, including mobile, extended service contracts and assistance services.

For the Three Months Ended ~~September~~June 30, ~~2018~~2019 Compared to the Three Months Ended ~~September~~June 30, ~~2017~~2018

Net Income

Segment net income increased ~~$33.3~~$41.2 million, or ~~78%~~60%, to ~~$75.9~~$109.3 million for ~~Third~~Second Quarter 2019 from $68.1 million for Second Quarter 2018, ~~from $42.6 million for Third Quarter 2017, benefitting mainly from~~primarily due to the TWG which contributed $29.9 million of income. Third Quarter 2018 also benefitted modestly from a lower effective tax rate following the enactment of the TCJA compared to Third Quarter 2017, which included a $9.6 million nonrecurring income tax benefit. Additionally, segment income for Third Quarter 2018 included $1.1 million of after-tax reportable catastrophes, mainly from Hurricane Florence, compared to $5.0 million of after-tax reportable catastrophes for Third Quarter 2017.acquisition. Excluding ~~the impact of these items,~~TWG, segment net income increased ~~primarily due to increased income from~~$19.1 million, or 33%, mostly driven by organic growth in our Connected Living business, ~~which was~~mainly from new and existing mobile protection programs, primarily ~~driven by growth from recently launched~~in Asia Pacific and North America, and higher operating performance in the European mobile ~~programs and expense management efforts,~~business, partially offset by an increase in expenses related to the continued ~~declines~~investments in our Connected Living and Global Automotive businesses. The increase in segment net income was also partially offset by $5.9 million of non-recurring benefits from Second Quarter 2018 that consisted of a $3.9 million income tax benefit in our Global Financial Services ~~primarily from expected discontinued partnerships.~~

business and $2.0 million of benefits in our Global Automotive business.

Total Revenues

Total revenues increased ~~$721.4~~$726.8 million, or ~~82%~~64%, to ~~$1.60~~$1.87 billion for ~~Third~~Second Quarter 2019 from $1.14 billion for Second Quarter 2018, ~~from $874.8 million for Third Quarter 2017. The increase in total revenue was largely attributed~~primarily attributable to ~~additional net earned premiums, fee and other income and net investment income from TWG of $652.0 million for Third Quarter 2018.~~TWG. Excluding the impact of TWG, net earned premiums increased ~~$106.7~~$181.1 million, or ~~17%~~26%, ~~primarily~~mostly driven by our Connected Living business, mainly due to subscriber growth from new mobile protection programs, and our Global Automotive business, ~~mainly from our third-party administrator distribution channel, as well as increased revenue from our Connected Living business~~ due to ~~growth from recently launched mobile programs,~~strong prior period sales of warranty contracts. The increase was partially offset by ~~the~~ unfavorable ~~impact of~~ foreign ~~exchange translation. Excluding the impact of TWG, fees~~exchange. Fees and other income ~~decreased $32.8~~increased $35.7 million, or 16%, primarily ~~driven by lower~~due to higher domestic trade-in volumes from our mobile ~~trade-in volume.~~repair and logistics business. Excluding the impact of TWG, net investment income ~~decreased $4.5~~increased $3.7 million, or 14%, primarily due to ~~lower income from real estate joint venture partnerships.~~an increase in invested assets, as the business grew, and higher yields.

Total Benefits, Losses and Expenses

Total benefits, losses and expenses increased ~~$668.1~~$669.3 million, or ~~81%~~63%, to ~~$1.50~~$1.72 billion for ~~Third~~Second Quarter 2019 from $1.05 billion for Second Quarter 2018, ~~from $828.6 million for Third Quarter 2017. The increase in total benefits, losses and expenses was~~ primarily ~~due~~attributable to TWG. Excluding the impact of TWG, policyholder benefits increased ~~$8.3~~$54.2 million, or 4%29%, primarily ~~due to~~driven by growth from our global mobile ~~protection~~ and ~~Global Automotive businesses.~~domestic automotive businesses, partially offset by more favorable loss experience in the European mobile business and favorable foreign exchange. Excluding the impact of TWG, amortization of deferred acquisition costs and value of business acquired increased ~~$40.6~~$40.7 million, or ~~15%~~14%, primarily due to growth in our ~~domestic automotive~~Global Automotive business. Excluding the impact of TWG, underwriting, general and administrative expenses increased ~~$6.0~~$107.5 million, or 2%28%, primarily due to ~~the~~higher trade-in volumes from our domestic mobile repair and logistics business, growth in our global mobile programs and continued investments in our Connected Living and Global Automotive ~~business and in our international mobile business,~~businesses, partially offset by ~~lower volumes in our domestic repair and logistics mobile programs.~~favorable foreign exchange.

For the ~~Nine~~Six Months Ended ~~September~~June 30, ~~2018~~2019 Compared to the ~~Nine~~Six Months Ended ~~September~~June 30, ~~2017~~2018

Net Income

Segment net income increased ~~$64.6~~$86.0 million, or ~~48%~~69%, to ~~$199.8~~$209.9 million for ~~Nine~~Six Months ~~2018~~2019 from ~~$135.2~~$123.9 million for ~~Nine~~Six Months ~~2017,~~2018, primarily due to ~~$39.3 million in earnings contribution from~~the TWG ~~and the impact of a lower effective tax rate following the enactment of the TCJA, partially offset by nonrecurring income tax benefits in the prior year period.~~acquisition. Excluding ~~the impact of these items,~~TWG, segment net income increased ~~mainly due to increased income from~~$33.6 million, or 29%, primarily driven by organic growth in our Connected Living business, ~~which was mostly driven by growth~~mainly from ~~mobile programs launched in 2017~~new and ~~continued growth in~~ existing mobile ~~programs. The increase was partially offset by lower results~~protection programs, primarily in Asia Pacific and North America, improved operating performance in the European mobile business and higher domestic trade-in volumes and margins from our mobile repair and logistics business, partially offset by an increase in expenses related to the continued ~~runoff of our credit insurance products~~investments in our ~~Financial Services business~~Connected Living and ~~$7.5 million of after-tax income from one-time client recoverables included in the prior year period.~~Global Automotive businesses and unfavorable foreign exchange.

Total Revenues

Total revenues increased ~~$1.12~~$1.52 billion, or ~~43%~~73%, to ~~$3.69~~$3.61 billion for ~~Nine~~Six Months ~~2018~~2019 from ~~$2.57~~$2.09 billion for ~~Nine~~Six Months ~~2017. The increase was~~2018, primarily attributable to TWG. Excluding the impact of TWG, net earned premiums increased ~~$221.0~~$296.1 million, or ~~12%~~22%, mostly driven by ~~increased revenue from~~ our Connected Living business, mainly due to subscriber growth from ~~existing~~new mobile protection programs, and ~~recently launched mobile programs, as well as growth from~~ our Global Automotive ~~business. This~~business, due to strong prior period sales of warranty contracts. The increase was partially offset by unfavorable foreign ~~exchange volatility. Excluding the impact of TWG, fees~~exchange. Fees and other income increased ~~$30.1~~$43.9 million, or 5%9%, primarily ~~driven by growth from recently launched mobile programs, partially offset by a decrease~~due to higher trade-in average selling price and volumes from our mobile repair and logistics business ~~due to lower domestic volumes~~ and ~~average selling price.~~growth from recently launched mobile programs. Excluding the impact of TWG, net investment income ~~was consistent year over year.~~increased $5.2 million, or 9%, primarily due to higher invested assets and yields.

Total Benefits, Losses and Expenses

Total benefits, losses and expenses increased ~~$1.04~~$1.40 billion, or ~~44%~~72%, to ~~$3.43~~$3.33 billion for ~~Nine~~Six Months 2019 from $1.93 billion for Six Months 2018, ~~from $2.39 billion for Nine Months 2017. The increase in total benefits, losses and expenses was~~ primarily ~~due~~attributable to TWG. Excluding the impact of TWG, policyholder benefits increased ~~$51.4~~$67.9 million, or ~~10%~~18%, primarily ~~due to~~driven by growth from our global mobile ~~protection~~ and ~~Global Automotive businesses.~~domestic automotive businesses, partially offset by more favorable loss experience in the European mobile business and favorable foreign exchange. Excluding the impact of TWG, amortization of deferred acquisition costs and value of business acquired increased ~~$68.2~~$75.2 million, or 9%13%, primarily ~~driven by~~due to growth ~~from~~in our Global Automotive business. Excluding the impact of TWG, underwriting, general and administrative expenses increased ~~$111.1~~$154.2 million, or ~~10%~~19%, primarily due to higher trade-in volumes from our domestic mobile repair and logistics business, growth ~~from~~in our global mobile programs and continued investments in our Connected Living and Global Automotive ~~business.~~businesses, partially offset by favorable foreign exchange.

Global Preneed

Overview

The table below presents information regarding the Global Preneed’s segment results of ~~operations:~~operations for the periods indicated:


	For the Three Months Ended September 30,				For the Nine Months Ended September 30,				For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2018		2017		2018		2017		2019		2018		2019		2018
Revenues:
Net earned premiums	$	14.6	$	14.0	$	43.4	$	43.8	$	15.4	$	14.2	$	31.2	$	28.8
Fees and other income	33.5		30.6		97.8		91.3		34.2		32.7		67.5		64.3
Net investment income	70.1		66.4		203.8		195.6		70.6		67.9		139.7		133.7
Total revenues	118.2		111.0		345.0		330.7		120.2		114.8		238.4		226.8
Benefits, losses and expenses:
Policyholder benefits	64.5		62.6		196.2		190.7		66.2		65.0		134.8		131.7
Amortization of deferred acquisition costs and value of business acquired	17.9		16.7		51.6		45.6		17.6		17.2		35.2		33.7
Underwriting, general and administrative expenses	14.4		13.3		44.4		42.5		14.7		13.8		31.6		30.0
Total benefits, losses and expenses	96.8		92.6		292.2		278.8		98.5		96.0		201.6		195.4
Segment income before provision for income taxes	21.4		18.4		52.8		51.9		21.7		18.8		36.8		31.4
Provision for income taxes	4.6		6.1		11.5		16.9		4.8		4.1		8.1		6.9
Segment net income	$	16.8	$	12.3	$	41.3	$	35.0	$	16.9	$	14.7	$	28.7	$	24.5

For the Three Months Ended ~~September~~June 30, ~~2018~~2019 Compared to the Three Months Ended ~~September~~June 30, ~~2017~~2018

Net Income

Segment net income increased ~~$4.5~~$2.2 million, or ~~37%~~15%, to ~~$16.8~~$16.9 million in ~~Third~~Second Quarter 2019 from $14.7 million in Second Quarter 2018, ~~from $12.3 million in Third Quarter 2017,~~ primarily ~~due to a lower effective tax rate following the enactment of the TCJA. Absent the lower effective tax rate, Global Preneed net income increased~~ due to an increase in investment income as a result of an increase in invested assets, consistent with the growth ofin the domestic preneed ~~business and higher yields.~~business.

Total Revenues

Total revenues increased ~~$7.2~~$5.4 million, or 6%5%, to ~~$118.2~~$120.2 million for ~~Third~~Second Quarter ~~2018~~2019 from ~~$111.0~~$114.8 million for ~~Third~~Second Quarter ~~2017. Fees and other income increased $2.9 million, or 9%, primarily due to growth in the U.S. business. Net investment income increased $3.7 million, or 6%,~~2018, primarily due to an increase in net investment income of $2.7 million, or 4%, primarily due to increase in invested ~~assets~~assets. Growth in pre-funded funeral policies in the U.S. and ~~higher yields.~~sales of the Final Need product also contributed to the increase.

Total Benefits, Losses and Expenses

Total benefits, losses and expenses increased ~~$4.2~~$2.5 million, or 5%3%, to ~~$96.8~~$98.5 million for ~~Third~~Second Quarter ~~2018~~2019 from ~~$92.6~~$96.0 million for ~~Third~~Second Quarter ~~2017,~~2018, primarily due to an increase in ~~information technology expenses and~~policyholder benefits driven by the growth in the domestic preneed ~~business.~~business and an increase in general expenses.

For the ~~Nine~~Six Months Ended ~~September~~June 30, ~~2018~~2019 Compared to the ~~Nine~~Six Months Ended ~~September~~June 30, ~~2017~~2018

Net Income

Segment net income increased ~~$6.3~~$4.2 million, or ~~18%~~17%, to ~~$41.3~~$28.7 million in ~~Nine~~Six Months 2019 from $24.5 million in Six Months 2018, ~~from $35.0 million in Nine Months 2017,~~ primarily ~~due to a lower effective tax rate following the enactment of the TCJA. Absent the lower effective tax rate, Global Preneed net income increased~~ due to an increase in investment income as a result of an increase in invested assets, consistent with the growth ofin the domestic preneed business, and ~~higher yields,~~lower mortality in Six Months 2019 compared to Six Months 2018, partially offset by ~~an increase in information technology~~higher general expenses.

Total Revenues

Total revenues increased ~~$14.3~~$11.6 million, or 5%, to $238.4 million for Six Months 2019 from $226.8 million for Six Months 2018, primarily due to an increase of net investment income of $6.0 million, or 4%, ~~to $345.0 million for Nine Months 2018 from $330.7 million for Nine Months 2017. Fees and other income increased $6.5 million, or 7%,~~ primarily ~~due to growth in the U.S. business and the final need product as well as favorable impact of foreign exchange. Net investment income increased $8.2 million, or 4%,~~ due to an increase in

invested ~~assets~~assets. Growth in ~~line with~~pre-funded funeral policies in the ~~growth~~U.S. and sales of the ~~domestic preneed business and higher yields.~~Final Need product also contributed to the increase.

Total Benefits, Losses and Expenses

Total benefits, losses and expenses increased ~~$13.4~~$6.2 million, or 5%3%, to ~~$292.2~~$201.6 million for ~~Nine~~Six Months ~~2018~~2019 from ~~$278.8~~$195.4 million for ~~Nine~~Six Months ~~2017,~~2018, primarily due to an increase in policyholder benefits driven by the growth in the domestic preneed business and an increase in ~~benefits on policies in runoff pegged to the consumer price index and increased information technology expense.~~general expenses.

~~Total~~ Corporate and Other

Overview

The tables below present information regarding the ~~Total~~ Corporate and ~~Other segment’s~~Other’s segment results of ~~operations:~~operations for the periods indicated:

For the Three Months Ended September 30,
2018 2017
Corporate and Other Health Total Corporate and Other Corporate and Other Health Total Corporate and Other
Revenues:
Net earned premiums $ —
$ —
$ —
$ —
$ 0.1
$ 0.1
Fees and other income 0.2
0.1
0.3
4.5
1.0
5.5
Net investment income 9.3
0.6
9.9
8.6
0.9
9.5
Net realized (losses) gains on investments (5.7 ) —
(5.7 ) 8.5
—
8.5
Amortization of deferred gains on
disposal of businesses
12.7
—
12.7
23.1
—
23.1
Total revenues 16.5
0.7
17.2
44.7
2.0
46.7
Benefits, losses and expenses:
Policyholder benefits —
(0.6 ) (0.6 ) —
(7.7 ) (7.7 )
General and administrative expenses 59.1
1.3
60.4
38.2
8.7
46.9
Interest expense 26.5
—
26.5
12.2
—
12.2
Total benefits, losses and expenses 85.6
0.7
86.3
50.4
1.0
51.4
Segment (loss) income before (benefit) provision
for income taxes
(69.1 ) —
(69.1 ) (5.7 ) 1.0
(4.7 )
(Benefit) provision for income taxes (9.8 ) (0.2 ) (10.0 ) (3.7 ) 0.9
(2.8 )
Segment net (loss) income (59.3 ) 0.2
(59.1 ) (2.0 ) 0.1
(1.9 )
Less: Preferred stock dividends (4.7 ) —
(4.7 ) —
—
—
Net (loss) income attributable to common stockholders $ (64.0 ) $ 0.2
$ (63.8 ) $ (2.0 ) $ 0.1
$ (1.9 )

For the Nine Months Ended September 30,
2018 2017
Corporate and Other Health Total Corporate and Other Corporate and Other Health Total Corporate and Other
Revenues:
Net earned premiums $ —
0.4
0.4
$ —
$ 5.3
$ 5.3
Fees and other income 2.0
0.4
2.4
16.3
3.4
19.7
Net investment income 34.9
2.3
37.2
28.0
5.7
33.7
Net realized (losses) gains on investments (16.6 ) —
(16.6 ) 25.1
—
25.1
Amortization of deferred gains on
disposal of businesses
46.2
—
46.2
83.5
—
83.5
Total revenues 66.5
3.1
69.6
152.9
14.4
167.3
Benefits, losses and expenses:
Policyholder benefits —
(4.3 ) (4.3 ) —
(39.6 ) (39.6 )
General and administrative expenses 219.5
4.5
224.0
95.7
36.1
131.8
Interest expense 74.0
—
74.0
37.2
—
37.2
Total benefits, losses and expenses 293.5
0.2
293.7
132.9
(3.5 ) 129.4
Segment (loss) income before (benefit) provision
for income taxes
(227.0 ) 2.9
(224.1 ) 20.0
17.9
37.9
(Benefit) provision for income taxes (46.3 ) 0.5
(45.8 ) 2.8
6.4
9.2
Segment net (loss) income (180.7 ) 2.4
(178.3 ) 17.2
11.5
28.7
Less: Preferred stock dividends (9.5 ) —
(9.5 ) —
—
—
Net (loss) income attributable to common stockholders $ (190.2 ) $ 2.4
$ (187.8 ) $ 17.2
$ 11.5
$ 28.7

~~Corporate and Other~~



	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2019			2018			2019			2018
Revenues:
Net earned premiums	$	—		$	0.1		$	—		$	0.4
Fees and other income	—			0.8			2.0			2.1
Net investment income	8.3			15.2			21.2			27.3
Net realized gains (losses) on investments	17.8			(11.4		)	46.6			(10.9		)
Amortization of deferred gains on disposal of businesses	4.7			15.0			12.5			33.5
Total revenues	30.8			19.7			82.3			52.4
Benefits, losses and expenses:
Policyholder benefits	0.1			(0.9		)	0.1			(3.7		)
General and administrative expenses	74.7			110.9			121.4			163.6
Interest expense	26.5			26.0			53.0			47.5
Total benefits, losses and expenses	101.3			136.0			174.5			207.4
Segment loss before benefit for income taxes	(70.5		)	(116.3		)	(92.2		)	(155.0		)
Benefit for income taxes	(15.4		)	(27.9		)	(20.6		)	(35.8		)
Segment net loss	(55.1		)	(88.4		)	(71.6		)	(119.2		)
Less: Net loss (income) attributable to non-controlling interest	1.5			—			(1.4		)	—
Net loss attributable to stockholders	(53.6		)	(88.4		)	(73.0		)	(119.2		)
Less: Preferred stock dividends	(4.6		)	(4.8		)	(9.3		)	(4.8		)
Net loss attributable to common stockholders	$	(58.2	)	$	(93.2	)	$	(82.3	)	$	(124.0	)

For the Three Months Ended ~~September~~June 30, ~~2018~~2019 Compared to the Three Months Ended ~~September~~June 30, ~~2017~~2018

Net Loss Attributable to Common Stockholders

~~Results for Corporate and Other~~Segment net loss decreased ~~$62.0~~$35.0 million, or 38%, to a net loss ~~attributable to common stockholders~~ of ~~$64.0~~$58.2 million for ~~Third~~Second Quarter ~~2018~~2019 from a net loss ~~attributable to common stockholders~~ of ~~$2.0~~$93.2 million for ~~Third~~Second Quarter ~~2017.~~2018. The ~~decrease~~change was primarily due to ~~$18.3~~an increase in net realized gains on investments in Second Quarter 2019 compared to a net realized loss in Second Quarter 2018. Additionally, Second Quarter 2018 included a $34.4 million after-tax loss on net assets held for sale related to our Mortgage Solutions business and $27.4 million of higher after-tax net ~~losses from foreign exchange mostly related to~~charges associated with the ~~remeasurement~~TWG acquisition. The decrease in segment net loss was partially offset by an $11.4 million after-tax impairment of ~~net monetary~~certain intangible assets from our ~~operations~~acquisition of Green Tree, lower after-tax amortization of deferred gains associated with the sale of Assurant Employee Benefits, a $7.3 million after-tax unfavorable change in ~~Argentina, additional interest expense~~remeasurement related foreign exchange and ~~preferred stock dividends~~a $5.8 million after-tax unfavorable change in the fair value of derivative instruments for acquisitions.

Total Revenues

Total revenues increased $11.1 million, or 56%, to $30.8 million for Second Quarter 2019 from ~~TWG acquisition related financing and~~$19.7 million for Second Quarter 2018, primarily due to a $29.2 million favorable change in net realized ~~investment losses compared~~gains on investments, due to ~~investment~~net gains ~~in Third Quarter 2017. The decrease in~~from sales of fixed maturity securities and a net ~~income was also driven by an~~ increase in ~~expenses related to~~ the ~~integration~~fair value of ~~TWG and~~equity securities. The increase in total revenues was partially offset by lower amortization of deferred gains associated with the sale of Assurant Employee ~~Benefits.~~Benefits and a decrease in investment income mostly due to lower average cash and short term investment balances that were higher in Second Quarter 2018 in anticipation of the TWG acquisition.

Total ~~Revenues~~Expenses

Total ~~revenues~~benefits, losses and expenses decreased ~~$28.2~~$34.7 million, or ~~63%~~26%, to ~~$16.5~~$101.3 million for ~~Third~~Second Quarter 2019 from $136.0 million for Second Quarter 2018. The decrease was primarily related to the absence of a $43.5 million loss on net assets held for sale related to Mortgage Solutions in Second Quarter 2018 ~~from $44.7~~and to a $28.9 million ~~for Third Quarter 2017.~~decrease in transaction and integration expenses associated with the TWG acquisition. The decrease ~~included~~in total benefits, losses and expenses was partially offset by a ~~$14.2~~$14.6 million impairment of certain intangible assets, a $9.4 million unfavorable change in remeasurement related foreign exchange and an $8.1 million unfavorable change in the fair value of derivative instruments for acquisitions.

For the Six Months Ended June 30, 2019 Compared to the Six Months Ended June 30, 2018

Net Loss Attributable to Common Stockholders

Segment net ~~realized gains (losses) on investments mostly driven by fixed income securities that were sold at~~loss decreased $41.7 million, or 34%, to a net loss ~~in 2018 as compared to~~of $82.3 million for Six Months 2019 from a net ~~gain in 2017~~loss of $124.0 million for Six Months 2018. The change was primarily due to an increase in ~~interest rates~~net realized gains on investments. Additionally, Six Months 2018 included $38.9 million of higher after-tax net charges associated with the TWG acquisition and a ~~$10.4~~$34.4 million ~~reduction~~after-tax loss on net assets held for sale related to our Mortgage Solutions business. The decrease in segment net loss was partially offset by additional after-tax interest expense and preferred dividends from acquisition related financing and lower after-tax amortization of deferred gains ~~primarily~~ associated with the sale of Assurant Employee Benefits. ~~Additionally, the~~The decrease in segment net loss was ~~due to lower fee and other income mostly driven~~also partially offset by ~~a reduction~~$11.6 million unfavorable after-tax change in ~~transitional services provided in connection with the sale of Assurant Employee Benefits.~~

~~Total Expenses~~

~~Total expenses increased $35.2 million, or 70%, to $85.6 million for Third Quarter 2018 from $50.4 million for Third Quarter 2017. The increase was primarily~~remeasurement related ~~to $18.3~~foreign exchange (that included $5.3 million of net losses from ~~foreign exchange mostly related to the remeasurement~~our operations in Argentina) and an $11.4 million after-tax impairment of ~~net monetary~~certain intangible assets from our ~~operations in Argentina and $14.3 million~~acquisition of additional interest expense from acquisition related financing. The increase in expenses was also due to $10.1 million of integration expenses related to the TWG acquisition that were partially offset by a reduction in expenses associated with the lower transitional services provided in connection with the sale of Assurant Employee Benefits.

~~For the Nine Months Ended September 30, 2018 Compared to the Nine Months Ended September 30, 2017~~

~~Net (Loss) Income Attributable to Common Stockholders~~

Corporate and Other net loss attributable to common stockholders was $190.2 million for Nine Months 2018 compared to net income attributable to common stockholders of $17.2 million for Nine Months 2017. The decrease was primarily driven by a $58.6 million increase in after-tax net charges related to the TWG acquisition, $32.4 million after-tax net loss on the sale of our mortgage solutions business and an unfavorable change in net realized gains (losses). The decrease was also attributed to lower amortization of deferred gains primarily associated with Assurant Employee Benefits, additional interest expense from acquisition related financing and $14.5 million of net losses from foreign exchange primarily related to the remeasurement of net monetary assets from our operations in Argentina. The decrease was also due to lower net pension benefits and higher stock based compensation due to an increase in grants for 2018 and the reversal of certain performance based compensation expenses recorded in 2017.Green Tree.

Total Revenues

Total revenues ~~decreased $86.4~~increased $29.9 million, or 57%, to ~~$66.5~~$82.3 million for ~~Nine~~Six Months 2019 from $52.4 million for Six Months 2018, ~~from $152.9 million for Nine Months 2017. The decrease was~~ primarily ~~related~~due to a ~~$41.7~~$57.5 million ~~unfavorable~~favorable change in net realized gains ~~(losses)~~ on investments, mostly driven by a ~~$34.7 decrease from fixed income securities that were sold at a~~ net ~~loss in 2018 as compared to a net gain in 2017 due to an~~ increase in ~~interest rates. Additionally, 2018 includes $5.3 million of net unrealized losses from~~ the ~~change in~~ fair value of equity securities and, to a lesser extent, net gains from sales of fixed maturity securities. ~~Prior to 2018, the net unrealized gains and losses on equity securities were recorded~~The increase in ~~other comprehensive income. The remaining decrease in~~total revenues was ~~due to a $37.3 million reduction in~~partially offset by lower amortization of deferred gains ~~primarily~~ associated with the sale of Assurant Employee Benefits and a decrease in ~~fee and other from a reduction in transitional services provided in connection with the sale of Assurant Employee Benefits. These decreases were partially offset by an increase in net~~ investment income, mostly ~~driven by $4.0 million~~due to lower average cash and short-term investment balances that were higher in ~~third-party investment management fees from consolidated investment entities and a $2.4 million increase~~Six Months 2018 in ~~interest income from~~anticipation of the ~~reinvestment of proceeds from acquisition specific financing completed in March 2018.~~TWG acquisition.

Total Expenses

Total benefits, losses and expenses ~~increased $160.6~~decreased $32.9 million, or ~~121%~~16%, to ~~$293.5~~$174.5 million for ~~Nine~~Six Months ~~2018~~2019 from ~~$132.9~~$207.4 million for ~~Nine~~Six Months ~~2017.~~2018. The ~~increase~~decrease was primarily related to ~~$53.1~~the absence of a $43.5 million ofloss on net assets held for sale related to Mortgage Solutions in Six Months 2018, to a $25.7 million decrease in transaction and integration ~~related~~ expenses associated with the TWG acquisition and to a ~~$41.0~~$9.5 million ~~net loss on~~decrease in financing costs related to acquisition financing. The decrease in total benefits, losses and expenses was partially offset by a $14.6 million increase for the ~~sale~~impairment of ~~our mortgage solutions business. Additionally, the increase includes~~certain intangible assets, a ~~$13.5~~$13.6 million ~~reduction~~unfavorable change in ~~the net pension benefit and $13.2~~remeasurement related foreign exchange that included $5.3 million of net losses from ~~foreign exchange (primarily related to the remeasurement of net monetary assets from~~ our operations in ~~Argentina). Interest expense increased $36.8~~Argentina, an $8.4 million ~~due to additional~~unfavorable change in the fair value of acquisition related derivative instruments and an increase in interest expense from acquisition related financing. Interest expense for 2018 included $8.6 million in net premiums paid for a series of derivative transactions used to hedge the interest rate risk that was partially offset by $1.6 million in amortization of deferred gains related to ~~the settlement of those derivative transactions.~~

~~Assurant Health~~

~~Assurant began to wind down its medical insurance operations in June 2015, and the Company substantially completed its exit of the health insurance market in 2016.~~

~~The Affordable Care Act~~

The Affordable Care Act introduced new premium stabilization programs in 2014: reinsurance, risk adjustment, and risk corridor. As of September 30, 2018, we have no net reinsurance recoverables related to these programs and we have not recorded a net receivable under the risk corridor programs because payments from the U.S. Department of Health and Human Services are considered unlikely.

~~For the Three and Nine Months Ended September 30, 2018 Compared to the Three and Nine Months Ended September 30, 2017~~

~~Net Income~~

Net income was relatively flat at $0.2 million for Third Quarter 2018 compared to $0.1 million for Third Quarter 2017. Net income decreased $9.1 million to $2.4 million for Nine Months 2018 from $11.5 million for Nine Months 2017. The decrease was primarily due to a reduction in favorable claims development as we continue to run-off the business.

~~Total Revenues~~

Total revenues decreased to $0.7 million for Third Quarter 2018 from $2.0 million for Third Quarter 2017. Total revenues decreased to $3.1 million for Nine Months 2018 from $14.4 million for Nine Months 2017. The decreases were primarily due to our exit of the health insurance market.

~~Total Benefits, Losses and Expenses~~

Total benefits, losses and expenses in Third Quarter 2018 decreased to $0.7 million from $1.0 million for Third Quarter 2017. The change is primarily due to a decrease in general expenses, partially offset by a reduction in favorable claims development, as we continue to run off the business. Total benefits, losses and expenses in Nine Months 2018 increased to $0.2 million compared to the Nine Months 2017 net benefit of $3.5 million. The change is primarily due to a reduction in favorable claims development, partially offset by a decrease in general expenses, as we continue to run off the business.acquisition financing.

Investments

~~The Company~~We had total investments of ~~$13.50~~$14.43 billion and ~~$11.55~~$13.40 billion as of ~~September~~June 30, ~~2018~~2019 and December 31, ~~2017,~~2018, respectively. Net unrealized gains on ~~the Company's~~our fixed maturity securities portfolio ~~decreased $458.7~~increased $698.0 million during ~~Nine~~Six Months ~~2018,~~2019, from ~~$906.1~~$423.1 million as of December 31, ~~2017~~2018 to ~~$447.4 million~~$1.12 billion as of ~~September~~June 30, ~~2018.~~2019. This ~~decrease~~increase was mainly due to ~~an increase~~a decrease in U.S. Treasury yields and ~~a widening in~~tightening credit spreads.

The following table shows the credit quality of ~~the Company's~~our fixed maturity securities portfolio as of the dates indicated:


	As of								Fair value as of
Fixed Maturity Securities by Credit Quality (Fair Value)	September 30, 2018				December 31, 2017
Fixed Maturity Securities by Credit Quality									June 30, 2019				December 31, 2018
Aaa / Aa / A	$	7,148.6	64.3	%	$	6,155.4	63.7	%	$	7,980.9	65.3	%	$	7,329.8	65.1	%
Baa	3,297.5		29.7	%	2,982.5		30.9	%	3,660.0		29.9	%	3,322.7		29.5	%
Ba	455.7		4.1	%	400.8		4.1	%	454.2		3.7	%	447.9		4.0	%
B and lower	214.8		1.9	%	123.9		1.3	%	133.7		1.1	%	156.7		1.4	%
Total	$	11,116.6	100.0	%	$	9,662.6	100.0	%	$	12,228.8	100.0	%	$	11,257.1	100.0	%

~~Major~~The following table shows the major categories of net investment income ~~were as follows:~~for the periods indicated:


	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017			2019			2018			2019			2018
Fixed maturity securities	$	121.6		$	102.3		$	334.0		$	310.9		$	123.0		$	107.8		$	245.1		$	212.4
Equity securities	5.5			5.6			15.6			17.4			5.7			5.1			11.5			10.1
Commercial mortgage loans on real estate	8.7			7.6			24.8			23.8			9.2			7.8			17.7			16.1
Short-term investments	6.7			1.9			12.8			4.6			5.8			3.7			11.4			6.1
Other investments	5.0			16.1			14.9			23.3			4.7			3.8			12.3			9.9
Cash and cash equivalents	6.4			4.4			20.8			11.3			6.5			9.5			13.5			14.4
Revenue from consolidated investment entities (1)	24.4			—			55.3			—			23.9			17.4			64.6			30.9
Total investment income	178.3			137.9			478.2			391.3			178.8			155.1			376.1			299.9
Investment expenses	(8.0		)	(5.3		)	(16.9		)	(16.4		)	(6.4		)	(4.7		)	(12.0		)	(8.9		)
Expenses from consolidated investment entities (1)	(18.5		)	��			$	(43.7	)	$	—		(18.2		)	(14.8		)	$	(43.6	)	$	(25.2	)
Net investment income	$	151.8		$	132.6		$	417.6		$	374.9		$	154.2		$	135.6		$	320.5		$	265.8

(1)

The following table shows the net of revenues and expenses from consolidated investment entities ~~of $5.9 million~~ for ~~Third Quarter 2018 includes $(0.4) million and $4.5 million of investment (loss) income from~~ the ~~Company's direct investment~~periods indicated. Refer to Note 8 to the real estate fund and collateralized loan obligations ("CLOs"), respectively, and $1.8 million related to investment management fees. The net revenues and expenses from consolidated investment entities of $11.6 millionConsolidated Financial Statements included elsewhere in this Report for ~~Nine Months 2018 includes $1.2 million and $6.4 million of~~further detail.



	Three Months Ended June 30,					Six Months Ended June 30,
	2019		2018			2019		2018
Investment income (loss) from direct investments in:
Real estate funds (1)	$	1.4	$	(0.5	)	$	10.8	$	1.6
CLO entities	3.0		1.3			6.8		1.9
Investment management fees	1.3		1.8			3.4		2.2
Net investment income from consolidated investment entities	$	5.7	$	2.6		$	21.0	$	5.7

(1)

The investment income from the ~~Company's direct investment the~~ real estate ~~fund~~funds includes income (loss) attributable to non-controlling interest of $(0.6) million and ~~CLOs, respectively,~~$1.2 million for the three and ~~$4.0 million related~~six months ended June 30, 2019. There was no income attributable to ~~investment management fees. Refer to Note 8 - Variable Interest Entities~~non-controlling interest for ~~further detail.~~the three and six months ended June 30, 2018.

Net investment income increased ~~$19.2~~$18.6 million, or 14%, to ~~$151.8~~$154.2 million for ~~Third~~Second Quarter 2019 from $135.6 million for Second Quarter 2018, from $132.6 million for Third Quarter 2017. Net investment income for Third Quarter 2018 increased mainly due to a $26.1 million increase in investment income from TWG acquired investments and an increase of $5.9 million of investment incomebenefiting from the ~~consolidated investment entities, partially offset by a $14.5 million decrease in investment income~~investments acquired from ~~real estate joint venture partnerships. Absent these items,~~ the ~~increase in~~TWG acquisition. Excluding TWG, net investment income ~~was primarily~~increased $2.4 million, or 2%, due to an increase in overall invested ~~assets.~~assets consistent with the underlying growth of our business and a $3.1 million increase in income from consolidated investment entities (“CIEs”). The higher income from CIEs was primarily related to income from our direct investment in our real estate funds due to an increase in the fair market value of

certain real estate properties and additional Assurant-issued collateralized loan obligation (“CLO”) structures that were launched after Second Quarter 2018. Additionally, Second Quarter 2018 included $2.4 million of interest income from the reinvestment of debt proceeds in anticipation of the TWG acquisition and $1.0 million of income from the early payoff of a previously impaired security.

Net investment income increased ~~$42.7~~$54.7 million, or ~~11%~~21%, to ~~$417.6~~$320.5 million for ~~Nine~~Six Months 2019 from $265.8 million for Six Months 2018 benefiting from ~~$374.9 million for Nine Months 2017. Net~~the investments acquired from the TWG acquisition. Excluding TWG, net investment income ~~for Nine Months 2018~~ increased ~~mainly~~$13.2 million, or 5%, primarily due to ~~$35.4~~a $15.3 million increase in ~~investment~~ income from ~~TWG acquired investments,~~CIEs. The higher income from CIEs was primarily related to our direct investment in our real estate funds resulting from an increase in the fair market value of ~~$11.6 million of investment~~certain real estate properties and income from ~~the consolidated~~our direct investment ~~entities,~~in additional Assurant-issued CLO structures that were launched after Second Quarter 2018. Additionally, Second Quarter 2018 included $2.9 million of interest income ~~from~~related to the recovery of losses on certain mortgage-backed securities, $2.4 million of interest income from the reinvestment of debt proceeds in anticipation of the TWG acquisition and $1.0 million of income from the early payoff of a previously impaired structured security, partially offset by a decrease of $11.2 million of investment income from real estate joint ventures partnerships. Absent these items, the increase in net investment income was primarily due to an increase in invested assets.security.

As of ~~September~~June 30, ~~2018, the Company~~2019, we owned ~~$56.1~~$72.9 million of securities guaranteed by financial guarantee insurance companies. Included in this amount was ~~$51.4~~$60.0 million of municipal securities, whose credit rating was ~~AA-~~A+ with the guarantee, but would have had a rating of A- without the guarantee.

For more information on ~~the Company's~~our investments, see Notes 7 and 9 to the Consolidated Financial Statements included elsewhere in this Report.

Catastrophe Reinsurance Program

In July 2019, we finalized our 2019 property catastrophe reinsurance program. 2019 reinsurance premiums for this program are estimated to be approximately $165.0 million pre-tax reflecting the significant decrease in catastrophe per-event retention from $120.0 million to $80.0 million and modest growth in exposure. Coverage was placed with more than 45 reinsurers that are all rated A- or better by A.M. Best. Actual reinsurance premiums will vary if exposure changes significantly from estimates or if reinstatement premiums are required due to catastrophe events.

The U.S. per-occurrence catastrophe coverage includes a main reinsurance program providing $1.16 billion of coverage in excess of $80.0 million retention. In addition, it includes multi-year reinsurance contracts covering approximately 35% of the reinsurance layers. All layers of the program allow for one automatic reinstatement, except the first layer (which covers the first $40.0 million of losses in excess of the $80.0 million retention) which has two reinstatements, and include a cascading feature that provides multi-event protection in which higher coverage layers drop down to $120.0 million as the lower layers and reinstatement limit are exhausted. When combined with the Florida Hurricane Catastrophe Fund, the program is covered for gross Florida losses of up to $1.40 billion.

The 2019 catastrophe reinsurance program also includes Caribbean protection of up to $177.5 million of protection in excess of a $17.5 million retention and Latin America protection of up to $423.0 million of protection in excess of a $4.5 million retention (which is an extension of the 2018 reinsurance program that will renew on August 1, 2019 and is subject to changes in coverage amount, retention and cost).

Liquidity and Capital Resources

Regulatory Requirements

Assurant, Inc. is a holding company and, as such, has limited direct operations of its own. Our ~~holding company’s~~ assets consist primarily of the capital stock of our subsidiaries. Accordingly, our ~~holding company’s~~ future cash flows depend upon the availability of dividends and other statutorily permissible payments from our subsidiaries, such as payments under our tax allocation agreement and under management agreements with our subsidiaries. ~~The~~Our insurance subsidiaries’ ability to pay such dividends and to make such other payments ~~from our insurance subsidiaries~~ will be limited by applicable laws and regulations of the ~~states~~jurisdictions in which our subsidiaries are domiciled, which subject our subsidiaries to significant regulatory restrictions. The dividend requirements and regulations vary from ~~state~~jurisdiction to ~~state~~jurisdiction and by type of insurance provided by the applicable subsidiary. These laws and regulations require, among other things, our insurance subsidiaries to maintain minimum solvency requirements and limit the amount of dividends they can pay to the holding company. See “Item 1 — Business — Regulation — U.S. Insurance Regulation” and “Item 1A — Risk Factors — Legal and Regulatory Risks ~~Related to Our Industry~~ — Changes in insurance regulation may reduce our profitability and limit our growth” in our ~~2017~~2018 Annual Report. Along with solvency regulations, the primary driver in determining the amount of capital used for dividends is the level of capital needed to maintain desired financial strength ratings from A.M. ~~Best.~~ Best Company (“A.M. Best”).

Regulators or rating agencies could become more conservative in their methodology and criteria, increasing capital requirements for our insurance subsidiaries.

~~In 2018, in addition to assigning ratings to the Company’s new debt issuances the following actions were taken by the rating agencies:~~

~~A.M. Best~~

Affirmed all ratings of legacy Assurant entities with a stable outlook, except for a revised outlook on the financial strength ratings to negative from stable for our two subsidiaries that sold the Assurant Employee Benefits business through reinsurance due to their diminished profile following the sale.

~~Upgraded the financial strength ratings of rated TWG entities from A- to A with a stable outlook.~~

~~Moody's Investor Services ("Moody's")~~

~~In connection with the acquisition of TWG and the related financing, lowered the senior debt rating to Baa3 from Baa2, the subordinated debt rating to Ba1 from Baa3.~~

The insurance financial strength ratings of property and casualty operating subsidiaries revised to A3 from A2, life insurance subsidiaries revised to Baa1 from A3 and the commercial paper rating to P-3 from P-2, with a stable outlook on all ratings.

~~Standard and Poor’s (“S&P”)~~

~~In connection with the acquisition of TWG and the related financing, lowered the long-term issuer credit rating of the holding company from BBB+ to BBB with a stable outlook.~~

~~Affirmed the short-term issuer credit rating.~~

~~Financial strength ratings of rated operating subsidiaries were affirmed with a stable outlook.~~

For further information on our ratings and the risks of ratings downgrades, see “Item ~~1-Business”~~1 — Business — Ratings” and “Item ~~1A-Risk Factors-Risks Related to Our Company-~~1A — Risk Factors — Financial Risks — ~~A.M. Best, Moody’s and S&P rate~~A decline in the financial strength ratings of our insurance ~~company~~ subsidiaries ~~and a decline in these ratings~~ could adversely affect our ~~standing in the insurance industry~~results of operations and ~~cause our sales and earnings to decrease”~~financial condition” in our ~~2017~~2018 Annual Report.

For ~~2018,~~2019, the maximum amount of dividends our regulated U.S. domiciled insurance subsidiaries could pay us, under applicable laws and regulations without prior regulatory approval, is approximately ~~$340.0~~$353.3 million.

~~Liquidity~~

Holding Company

As of ~~September~~June 30, ~~2018,~~2019, we had approximately ~~$473.0~~$386.0 million in holding company ~~capital.~~liquidity, $161.0 million above our targeted minimum level of $225.0 million. The target minimum level of holding company liquidity, which can be used for unforeseen capital needs at our subsidiaries or liquidity needs at the holding company, is calibrated based on approximately one year of corporate operating and interest expenses and Mandatory Convertible Preferred Stock (“MCPS”) dividends. We use the term “holding company ~~capital”~~liquidity” to represent the portion of cash and other liquid marketable securities held at Assurant, Inc., out of a total of ~~$621.0~~$546.3 million of holding company investment securities and cash, which we are not otherwise holding for a specific purpose as of the balance sheet date. We can use such ~~capital~~assets for stock repurchases, stockholder dividends, acquisitions and other corporate purposes. ~~$250.0 million of the $473.0 million of holding company capital is intended to serve as a buffer against remote risks (such as large-scale catastrophes).~~

Dividends or returns of capital paid by our subsidiaries, ~~to the holding company,~~ net of infusions and excluding amounts used for acquisitions or received for dispositions, were approximately ~~$617.0~~$255.0 million for ~~Nine~~Six Months 2019. In 2018, ~~including~~dividends, net of infusions and excluding amounts used for acquisitions or received for dispositions, made to the holding company were $739.0 million, which included approximately ~~$605.0~~$727.0 million from ~~legal entities~~subsidiaries in our Global Housing, Global Lifestyle and Global Preneed operating

segments ~~including approximately $228.0 million related to the reduction in deferred tax liabilities following the enactment of the TCJA, as well as~~and approximately $12.0 million from Assurant Health and capital formerly backing Assurant Employee Benefits. In 2017, dividends, net of infusions and excluding amounts used for acquisitions, paid to the holding company from its subsidiaries were $374.0 million, which included approximately $229.0 million from legal entities in our Global Housing, Global Lifestyle and Global Preneed operating segments and approximately $145.0 million from Assurant Health and capital formerly backing Assurant Employee Benefits.

The Company also has a five-year senior unsecured $450.0 million revolving credit agreement (the “2017 Credit Facility”) with a syndicate of banks arranged by JP Morgan and Wells Fargo. The 2017 Credit Facility provides for revolving loans and the issuance of multi-bank, syndicated letters of credit and/or letters of credit from a sole issuing bank in an aggregate amount of $450.0 million, which may be increased up to $575.0 million, and is available until December 2022, provided the Company is in compliance with all covenants. The 2017 Credit Facility has a sub-limit for letters of credit issued thereunder of $50.0 million.

In addition to paying expenses, making interest payments on indebtedness and making dividend payments on our preferred stock, our capital management strategy provides for several uses of the cash generated by our subsidiaries, including without limitation, returning capital to common stockholders through share repurchases and dividends, investing in our business to support growth in targeted areas and making prudent and opportunistic acquisitions. From time to time, ~~the Company~~we may also seek to purchase ~~its~~ outstanding debt in open market repurchases or privately negotiated transactions. WeDuring Six Months 2019 and the year ended December 31, 2018, we made ~~share~~common stock repurchases and paid dividends to our common stockholders of ~~$179.3~~$176.4 million and ~~$508.5~~$266.1 million, ~~during Nine Months 2018 and the year ended December 31, 2017,~~ respectively. We expect 2018 operating segment dividends from Global Housing, Global Lifestyle and Global Preneed to exceed segment net income, subject to the growth of the business, rating agency and regulatory capital requirements. In addition, in 2018, we expect to deploy capital primarily to ~~fund the financing and integration of TWG and other ongoing capital needs of the~~support business ~~and excess capital to~~growth, fund other investments and return capital to shareholders, subject to approval by the Company’s Board of Directors (the “Board”) and market conditions.

In 2014, we made aan approximately 40% investment in Iké Grupo, Iké Asistencia ~~(“Iké~~and certain of their subsidiaries (collectively “Iké”), a services assistance business, for which we paid approximately ~~$110~~$110.0 million. We ~~have~~also entered into a ~~call~~shareholders agreement with the majority shareholders that provided us with the right ~~and Iké has a put right relating~~ to ~~our acquisition of~~acquire the remainder of Iké from the ~~company by~~majority shareholders, and the majority shareholders the right to put their interests in Iké to us, in mid-2019. In April 2019, we entered into a cooperation agreement with the majority shareholders of Iké to explore strategic alternatives. We also agreed to delay the call and put rights to February 2020. There can be no assurance ~~whether~~that our efforts to identify strategic alternatives for Iké will be successful, or, if they are not, that we will ~~exercise our call right or~~ultimately acquire the remainder of Iké ~~will exercise their put right and the acquisition will be completed.~~

~~Acquisition of TWG~~

On May 31, 2018, the Company closed its acquisition of TWG. In connection with the acquisition of TWG, the equityholders of TWG Holdings received a total of 10,399,862 shares of Assurant common stock and $894.9 million in cash consideration. The cash consideration and repayment of $595.9 million of TWG's existing debt was financed through a combination of available cash and external financing, described below.

In March 2018, the Company issued 2,875,000 shares of its 6.50% Series D mandatory convertible preferred stock (“MCPS”), with a par value of $1.00 per share at a public offering price of $100.00 per share. Each outstanding share of MCPS will convert automatically on March 15, 2021 into between 0.9354 and 1.1225 shares of common stock, subject to customary anti-dilution adjustments. We may pay declared dividends in cash or, subject to certain limitations, in shares of our common stock, or in any combination of cash and shares of our common stock quarterly, commencing in June 2018 and ending in March 2021.

In March 2018, the Company issued three series of senior notes with an aggregate principal amount of $900.0 million. The first series of senior notes is $300.0 million in principal amount, bears floating interest rate equal to three-month LIBOR plus 1.25% and is payable in a single installment due March 2021 (the “2021 Senior Notes”). The second series is $300.0 million in principal amount, bears interest at 4.20% per year, is payable in a single installment due September 2023 and was issued at a 0.233% discount (the “2023 Senior Notes”). The third series is $300.0 million in principal amount, bears interest at 4.90% per year, is payable in a single installment due March 2028 and was issued at a 0.383% discount (the “2028 Senior Notes”). At any time in whole or from time to time in part, the Company may redeem the 2021 Senior Notes on or after March 2019, the 2023 Senior Notes prior to August 2023 and the 2028 Senior Notes prior to December 2027.

In March 2018, the Company issued subordinated notes due March 2048 with a principal amount of $400.0 million (the “Subordinated Notes” and, together with the 2021 Senior Notes, 2023 Senior Notes and the 2028 Senior Notes, the “Notes”) which bear interest from March 2018 to March 2028, at an annual rate of 7.00%. The Subordinated Notes will bear interest at an annual rate equal to three-month LIBOR plus 4.135%, beginning in June 2028. The Company may redeem the Subordinated Notes, in whole but not in part, at any time on or after March 27, 2028 and prior to maturity at a redemption price set forth in the indenture, dated as of March 27, 2018 (the "Subordinated Notes Indenture"). At any time prior to March 2028, the

~~Subordinated Notes~~In management’s opinion, dividends from our subsidiaries together with our income and gains from our investment portfolio will ~~be redeemable in whole but not in part after the occurrence of a tax event, rating agency event or regulatory capital event as defined~~provide sufficient liquidity to meet our needs in the ~~Subordinated Notes Indenture.~~

~~In March and May 2018, the commitments under the Company's senior unsecured bridge loan facility and senior unsecured term loan facility were terminated, respectively.~~

For additional information regarding the TWG acquisition, please see Note 4 to the Consolidated Financial Statements and for additional information regarding the Notes and the MCPS, see Notes 12 and 15 in the Consolidated Financial Statements included elsewhere in this Report.ordinary course of business.

Assurant Subsidiaries

The primary sources of funds for our subsidiaries consist of premiums and fees collected, proceeds from the sales and maturity of investments and net investment income. Cash is primarily used to pay insurance claims, agent commissions, operating expenses and taxes. We generally invest our subsidiaries’ excess funds in order to generate investment income.

We conduct periodic asset liability studies to measure the duration of our insurance liabilities, to develop optimal asset portfolio maturity structures for our significant lines of business and ultimately to assess that cash flows are sufficient to meet the timing of cash needs. These studies are conducted in accordance with formal company-wide Asset Liability Management guidelines.

To complete a study for a particular line of business, models are developed to project asset and liability cash flows and balance sheet items under a large, varied set of plausible economic scenarios. These models consider many factors including the current investment portfolio, the required capital for the related assets and liabilities, our tax position and projected cash flows from both existing and projected new business.

Alternative asset portfolio structures are analyzed for significant lines of business. An investment portfolio maturity structure is then selected from these profiles given our return hurdle and risk preference. Sensitivity testing of significant liability assumptions and new business projections is also performed.

Our liabilities generally have limited policyholder optionality, which means that the timing of payments is relatively insensitive to the interest rate environment. In addition, our investment portfolio is largely comprised of highly liquid fixed maturity securities with a sufficient component of such securities invested that are near maturity which may be sold with minimal risk of loss to meet cash needs. Therefore, we believe we have limited exposure to disintermediation risk.

Generally, our subsidiaries’ premiums, fees and investment income, along with planned asset sales and maturities, provide sufficient cash to pay claims and expenses. However, there may be instances when unexpected cash needs arise in excess of that available from usual operating sources. In such instances, we have several options to raise needed funds, including selling assets from the subsidiaries’ investment portfolios, using holding company cash (if available), issuing commercial paper, or drawing funds from ~~our~~the senior unsecured $450.0 million revolving credit ~~facility.~~agreement (the “Credit Facility”). In addition, on January 22, 2018, we filed an automatically effective shelf registration statement on Form S-3 with the SEC. This registration statement allows us to issue equity, debt or other types of securities through one or more methods of distribution. The terms of any offering would be established at the time of the offering, subject to market conditions. If we decide to make ~~any additional~~an offering of securities, we will consider the nature of the cash requirement as well as the cost of capital in determining what type of securities we may offer.

Dividends and Repurchases

We paid dividends of ~~$0.56~~$0.60 per common share on ~~September~~June 18, ~~2018~~2019 to stockholders of record as of ~~August 27, 2018,~~May 28, 2019, and dividends of $1.6250 per share of MCPS on June 17, 2019 to stockholders of record as of June 1, 2019. On July 19, 2019, the Board declared a quarterly dividend of $0.60 per common share payable on September ~~17, 2018~~16, 2019 to stockholders of record as of August 26, 2019 and a quarterly dividend of $1.6250 per share of MCPS payable on September 16, 2019 to stockholders of record as of September 1, ~~2018.~~2019. Any determination to pay future dividends will be at the discretion of ~~our~~the Board ~~of Directors~~ and will be dependent ~~upon:~~upon various factors, including: our subsidiaries’ payments of dividends ~~and/or~~and other statutorily permissible payments to us; our results of operations and cash flows; our financial ~~position~~condition and capital requirements; general business ~~conditions;~~conditions and growth prospects; legal, tax, regulatory and contractual restrictions on the payment of ~~dividends (including under the terms of our outstanding MCPS);~~dividends; and other factors ~~our~~the Board ~~of Directors~~ deems relevant. Payments of dividends on shares of common stock are subject to the preferential rights of the MCPS. The Credit Facility contains limitations on our ability to pay dividends to our stockholders if we are in default, or such dividend payments would cause us to be in default, of our obligations thereunder. In addition, if we defer the payment of interest on our Subordinated Notes, we generally may not make payments on our capital stock.

During ~~the nine months ended September 30, 2018,~~Six Months 2019, the Company repurchased ~~783,610~~1,037,262 shares of our outstanding common ~~stock.~~stock at a cost of $100.7 million, exclusive of commissions. As of ~~September~~June 30, ~~2018, $210.3~~2019, $660.5 million remained under the ~~current~~Board repurchase ~~authorization. On November 5, 2018, our Board of Directors authorized the Company to repurchase up to an additional $600.0 million of its outstanding common stock.~~authorizations. The timing and the amount of future repurchases will depend on market conditions, our financial condition, results of operations, liquidity and other factors.

Management believes ~~the Company~~that we will have sufficient liquidity to satisfy ~~its~~our needs over the next twelve months, including the ability to pay interest on our ~~senior and subordinated notes~~debt and dividends on our common and preferred ~~shares.~~stock.

Mandatory Convertible Preferred Stock

In March 2018, we issued 2,875,000 shares of our 6.50% MCPS, with a par value of $1.00 per share. Each outstanding share of MCPS will convert automatically on March 15, 2021 into between 0.9365 (the “minimum conversion rate”) and 1.1239 shares of common stock, subject to customary anti-dilution adjustments. At any time prior to March 2021, holders may elect to convert each share of MCPS into shares of common stock at the minimum conversion rate or in the event of a fundamental change at the specified rates defined in the Certificate of Designations of the MCPS.

Dividends on the MCPS will be payable on a cumulative basis when, as and if declared, at an annual rate of 6.50% of the liquidation preference of $100.00 per share. We may pay declared dividends in cash or, subject to certain limitations, in shares of our common stock, or in any combination of cash and shares of our common stock quarterly, commencing in June 2018 and ending in March 2021. No dividend or distribution may be declared or paid on common stock or any other class or series of junior stock, and no common stock or any other class or series of junior stock or parity stock may be purchased, redeemed or otherwise acquired for consideration unless all accumulated and unpaid dividends on the MCPS for all preceding dividend periods have been declared and paid in full, subject to certain limited exceptions. We paid preferred stock dividends of $4.6 million and $9.3 million for Second Quarter 2019 and Six Months 2019, respectively. For additional information regarding the MCPS, see Note 14 in the Consolidated Financial Statements included elsewhere in this Report.

Credit Facility

We have a Credit Facility with a syndicate of banks arranged by JPMorgan Chase Bank, N.A. and Wells Fargo Bank, National Association. The Credit Facility provides for revolving loans and the issuance of multi-bank, syndicated letters of credit and letters of credit from a sole issuing bank in an aggregate amount of $450.0 million, which may be increased up to $575.0 million. The Credit Facility is available until December 2022, provided we are in compliance with all covenants. The Credit Facility has a sub-limit for letters of credit issued thereunder of $50.0 million. The proceeds from these loans may be used for our commercial paper program or for general corporate purposes. As of June 30, 2019, $441.0 million was available under the Credit Facility and $9.0 million letters of credit were outstanding.

Senior and Subordinated Notes

The following table shows the principal amount and carrying value of our outstanding debt, less unamortized discount and issuance costs as applicable, as of June 30, 2019 and December 31, 2018:



			June 30, 2019		December 31, 2018
	Principal Amount		Carrying Value
Floating Rate Senior Notes due March 2021 (1)	$	300.0	$	298.4	$	298.1
4.00% Senior Notes due March 2023	350.0		348.3		348.1
4.20% Senior Notes due September 2023	300.0		297.1		296.8
4.90% Senior Notes due March 2028	300.0		297.7		297.6
6.75% Senior Notes due February 2034	375.0		371.0		370.9
7.00% Fixed-to-Floating Rate Subordinated Notes due March 2048 (2)	400.0		394.8		394.5
Total debt			$	2,007.3	$	2,006.0


(1)	Bears floating interest at a rate equal to three-month LIBOR plus 1.25%.


(2)	Bears a 7.00% annual interest rate from March 2018 to March 2028 and annual interest rate equal to three-month LIBOR plus 4.135% thereafter.

2021, 2023 and 2028 Senior Notes

In March 2018, we issued the following three series of senior notes with an aggregate principal amount of $900.0 million:

•

2021 Senior Notes: The first series of senior notes is $300.0 million in principal amount, bears floating interest rate equal to three-month LIBOR plus 1.25% (3.58% as of June 30, 2019) and is payable in a single installment due March 2021 (“2021 Senior Notes”). Interest on the 2021 Senior Notes is payable quarterly. Commencing on or after March 2019, we may redeem the 2021 Senior Notes at any time in whole or from time to time in part at a redemption price equal to 100% of the principal amount being redeemed plus accrued and unpaid interest.


•	2023 Senior Notes: The second series of senior notes is $300.0 million in principal amount, bears interest at 4.20% per year, is payable in a single installment due September 2023 and was issued at a 0.233% discount (“2023 Senior

Notes”). Interest on the 2023 Senior Notes is payable semi-annually. Prior to August 2023, we may redeem the 2023 Senior Notes at any time in whole or from time to time in part at a make-whole premium plus accrued and unpaid interest. On or after that date, we may redeem the 2023 Senior Notes at any time in whole or from time to time in part at a redemption price equal to 100% of the principal amount being redeemed plus accrued and unpaid interest.

•

2028 Senior Notes: The third series of senior notes is $300.0 million in principal amount, bears interest at 4.90% per year, is payable in a single installment due March 2028 and was issued at a 0.383% discount (“2028 Senior Notes”). Interest on the 2028 Senior Notes is payable semi-annually. Prior to December 2027, we may redeem the 2028 Senior Notes at any time in whole or from time to time in part of a make-whole premium plus accrued and unpaid interest. On or after that date, we may redeem the 2028 Senior Notes at any time in whole or from time to time in part at a redemption price equal to 100% of the principal amount being redeemed plus accrued and unpaid interest.

The interest rate payable on each of the 2021 Senior Notes, the 2023 Senior Notes and the 2028 Senior Notes will be subject to adjustment from time to time, if either Moody’s or S&P downgrades the credit rating assigned to such series of senior notes to Ba1 or below or to BB+ or below, respectively, or subsequently upgrades the credit ratings once the senior notes are at or below such levels. For more details on the increase in interest rate over the issuance rate by rating, see Note 11 to our Consolidated Financial Statements included elsewhere in this Report.

Subordinated Notes

In March 2018, we issued fixed-to-floating rate subordinated notes due March 2048 with a principal amount of $400.0 million (the “Subordinated Notes”), which bear interest from March 2018 to March 2028 at an annual rate of 7.00%, payable semi-annually. The Subordinated Notes will bear interest at an annual rate equal to three-month LIBOR plus 4.135%, payable quarterly, beginning in June 2028. On or after March 2028, we may redeem the Subordinated Notes in whole at any time or in part from time to time, at a redemption price equal to their principal amount plus accrued and unpaid interest provided that if they are not redeemed in whole, a minimum amount must remain outstanding. At any time prior to March 2028, we may redeem the Subordinated Notes in whole but not in part after the occurrence of a tax event, rating agency event or regulatory capital event as defined in the global note representing the Subordinated Notes, at a redemption price equal to (i) with respect to a rating agency event 102% of their principal amount and (ii) with respect to a tax event or regulatory capital event, their principal amount plus accrued and unpaid interest.

In addition, so long as no event of default with respect to the Subordinated Notes has occurred and is continuing, we have the right, on one or more occasions, to defer the payment of interest on the Subordinated Notes for one or more consecutive interest periods for up to five years as described in the global note representing the Subordinated Notes. During a deferral period, interest will continue to accrue on the Subordinated Notes at the then-applicable interest rate. At any time when we have given notice of our election to defer interest payments on the Subordinated Notes, we generally may not make payments on or redeem or purchase any shares of our capital stock or any of our debt securities or guarantees that rank upon our liquidation on a parity with or junior to the Subordinated Notes, subject to certain limited exceptions.

Other Notes

In March 2013, we issued two series of senior notes with an aggregate principal amount of $700.0 million. The first series was $350.0 million in principal amount, bore interest at 2.50% per year and was repaid in a single installment in March 2018. The second series is $350.0 million in principal amount and was issued at a 0.365% discount. This series bears interest at 4.00% per year and is payable in a single installment due March 2023. Interest is payable semi-annually. We may redeem the outstanding series of senior notes in whole or in part at any time and from time to time before maturity at the redemption price set forth in the global note representing the outstanding series of senior notes.

In February 2004, we issued senior notes with an aggregate principal amount of $475.0 million at a 0.61% discount, which bear interest at 6.75% per year and are payable in a single installment due February 2034. Interest is payable semi-annually. These senior notes are not redeemable prior to maturity. In December 2016, we completed a cash tender offer and purchased $100.0 million in aggregate principal amount of such senior notes.

Retirement and Other Employee Benefits

For information on our retirement and other employee benefits, see Note 1716 to the Consolidated Financial Statements, included elsewhere in this Report.

Cash Flows

We monitor cash flows at the consolidated, holding company and subsidiary levels. Cash flow forecasts at the consolidated and subsidiary levels are provided on a monthly basis, and we use trend and variance analyses to project future cash needs, making adjustments to the forecasts when needed.

The table below shows our net cash flows for the ~~nine months ended September 30, 2018 and 2017:~~periods indicated:


	For the Nine Months Ended September 30,						For the Six Months Ended June 30,
Net cash provided by (used in):	2018			2017			2019			2018
Operating activities	$	454.6		$	366.4		$	725.7		$	172.3
Investing activities	(1,904.4		)	(242.0		)	(609.6		)	(1,514.8		)
Financing activities	1,790.4			(169.7		)	118.6			1,644.5
Cash included in business classified as held for sale							—			(22.3		)
Effect of exchange rate changes on cash and cash equivalents	(30.8		)	6.1			1.7			(22.8		)
Net change in cash	$	309.8		$	(39.2	)	$	236.4		$	256.9

We typically generate operating cash inflows from premiums collected from our insurance products, fees ~~from other products~~received for services and income received from our investments while outflows consist of policy acquisition costs, benefits paid and operating expenses. These net cash flows are then invested to support the obligations of our insurance products and required capital supporting these products. Our cash flows from operating activities are affected by the timing of premiums, fees, and investment income received and expenses paid.

Net cash provided by operating activities was ~~$454.6~~$725.7 million for ~~Nine~~Six Months ~~2018~~2019 compared to ~~$366.4~~$172.3 million for ~~Nine~~Six Months ~~2017.~~2018. The increase in net cash ~~from~~provided by operating activities was primarily due to ~~the absence of~~a decrease in claim payments for reportable catastrophes and an ~~$85.0 million payment made~~increase in ~~Second Quarter 2017~~cash related ~~to the lender-placed market conduct examination settlement agreements. The increase was also due to higher cash from operations due~~ to the growth of our ~~Connected Living~~international mobile business and ~~$26.7 million of cash from the settlement of a series of derivative transactions exercised in connection acquisition related financing. The increases were partially offset by~~our Global Automotive business. Additionally, Six Months 2018 included a $41.5 million payment of an accrued indemnification liability related to the previous sale of our general agency business ~~and claim payments made, net of reinsurance, related to losses from 2017 reportable catastrophes.~~in the prior year.

Net cash used in investing activities was ~~$1.90~~$609.6 million for Six Months 2019 compared to $1.51 billion for ~~Nine~~Six Months ~~2018 compared to $242.0 million for Nine Months 2017.~~2018. The ~~increase~~decrease in net cash used in investing activities was primarily due to ~~cash used for~~ the acquisition of TWG ~~acquisition. In~~in the Second Quarter 2018 ~~we used~~when $1.49 billion of cash was used to fund a portion of the $2.47 billion purchase ~~price~~price. Partially offsetting this decrease was higher sales of the TWG acquisition (which was partially offset by TWG cash acquired of $380.1 million) compared to $125.0 million used in the first quarter of 2017 for the acquisition of Green Tree Insurance Agency, Inc. See Note 4 to the Consolidated Financial Statements for additional information. Additionally, net cash used by our consolidated investment entities to purchase senior secured leveraged loans ~~in connection with the planned formation of CLO structures increased by $559.4 million.~~from our CIEs. See Note 8 to ~~the~~ Consolidated Financial Statements, ~~for additional information. This increase was partially offset by $36.7 million of proceeds from the sale of our mortgage solutions business that was sold~~included elsewhere in ~~Third Quarter 2018. See Note 20 to the Consolidated Financial Statements~~this Report, for additional information.

Net cash provided by ~~(used in)~~ financing activities was ~~$1.79~~$118.6 million for Six Months 2019 compared to $1.64 billion for ~~Nine~~Six Months ~~2018 compared to $(169.7) million for Nine Months 2017.~~2018. The ~~increase~~decrease in net cash provided by financing activities was primarily due to acquisition related financing ~~related to~~obtained in Six Months 2018 in anticipation of the TWG acquisition. Net proceeds from the issuance of debt and preferred stock to finance the TWG acquisition were $1.29 billion and $276.4 million, respectively. The ~~company used $350.0 million to replace the senior notes that matured during the first quarter of 2018. Additionally,~~decrease in net cash provided by ~~the issuance~~financing activities also included a $206.6 million decrease in cash provided by our CIEs, net of ~~CLO notes~~repayments of borrowings to short-term warehouse facilities, primarily related to the ~~CLO structures that were closed during Nine Months 2018 and borrowings from short-term warehouse facilities to fund the planned formation~~timing of CLO structures ~~increased by $351.3 million. The increases were partially offset by $591.6 million~~launched in ~~repayment of borrowings from the short-term warehouse facilities related to CLO structures that closed during Nine Months 2018.~~

each year.

The table below shows our cash outflows for interest and dividends for the periods indicated:


	For the Nine Months Ended September 30,				For the Six Months Ended June 30,
	2018		2017		2019		2018
Interest paid on debt	$	72.5	$	48.1	$	53.3	$	26.7
Common stock dividends	96.1		88.8		75.7		60.6
Preferred stock dividends	9.5		—		9.3		4.8
Total	$	178.1	$	136.9	$	138.3	$	92.1

Letters of Credit

In the normal course of business, ~~we issue~~ letters of credit ~~for various purposes, including~~are issued primarily to support reinsurance ~~agreements.~~arrangements in which we are the reinsurer. These letters of credit are supported by commitments ~~with~~under which we are required to indemnify the financial ~~institutions.~~institution issuing the letter of credit if the letter of credit is drawn. We had ~~$16.8~~$12.1 million and ~~$18.1~~$13.2 million of letters of credit outstanding as of ~~September~~June 30, ~~2018~~2019 and December 31, ~~2017.~~2018, respectively.

Off-Balance Sheet Arrangements

The Company does not have any off-balance sheet arrangements that are reasonably likely to have a material effect on the financial condition, results of operations, liquidity or capital resources of the Company.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Our ~~2017~~2018 Annual Report ~~on Form 10-K~~ described our Quantitative and Qualitative Disclosures About Market Risk. The A.M. Best rating for Employers Reassurance Corporation (“ERAC”), one of our largest reinsurers, was affirmed as B+ with a stable outlook and subsequently withdrawn at the request of ERAC in March 2019. Refer to Note 9 to our Consolidated Financial Statements included elsewhere in this Report for more information. There were no other material changes to the assumptions or risks during ~~Third~~Second Quarter ~~2018.~~2019.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

~~The Company’s~~Our management, with the participation of our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”) ~~have~~, has evaluated the effectiveness of ~~the Company’s~~our disclosure controls and procedures pursuant to Rule ~~13a-15(e)~~13a-15(b) or ~~15d-15(e)~~15d-15(b) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of ~~September~~June 30, ~~2018. They have~~2019. Based on such evaluation, management, including our CEO and CFO, has concluded ~~except~~that as ~~noted below, that the Company’s~~of June 30, 2019, our disclosure controls and procedures ~~are~~were effective and provide reasonable assurance that information ~~the Company is~~we are required to disclose in ~~its~~our reports pursuant to Rule 13a-15(e) or 15d-15(e) under the Exchange Act is recorded, processed, summarized and reported within the ~~required~~ time periods specified by the SEC’s rules and forms. Our CEO and CFO also have concluded that as of June 30, 2019, information that we are required to disclose in our reports under the Exchange Act is accumulated and communicated to ~~the Company’s~~our management, including ~~the~~our CEO and CFO, as appropriate to allow timely decisions regarding required disclosure.

Internal Control Over Financial Reporting

On May 31, 2018, ~~the Company~~we completed ~~its~~our acquisition of TWG. During the quarter ended June 30, 2019, we continued to integrate TWG Holdings Limited and its subsidiaries (“TWG”). For the three and nine months ended September 30, 2018, TWG represented about 29% and 15% of consolidated revenues, respectively, and 26% and 10% of net income attributable to common stockholders, respectively. At September 30, 2018, TWG represented 26% of total assets. The Company is in the process of evaluatinginto our internal control over financial reporting for TWG, and accordingly, has excluded TWG this quarter from its evaluation of internal control over financial reporting for purposes of its evaluation of disclosure controls and procedures.

~~Internal Control over Financial Reporting~~

environment. There ~~have been~~were no other changes in our internal control over financial reporting ~~pursuant to~~(as defined in Rule 13a-15(f) or 15d-15(f) under the Exchange ~~Act~~Act) during the quarterly period ended June 30, 2019 that have materially affected, or are reasonably likely to materially affect, our internal control over financial ~~reporting during the quarter ended September 30, 2018.~~reporting.

PART II

OTHER INFORMATION

Item 1. Legal Proceedings

~~The Company is~~We are involved in litigation in the ordinary course of business, both as a defendant and as a plaintiff, and may from time to time be subject to a variety of legal and regulatory actions relating to our current and past business operations, including regulatory examinations, investigations and inquiries. ~~See Note 18 to the Consolidated Financial Statements for a description of certain matters, which description is incorporated herein by reference.~~ Although ~~the Company~~we cannot predict the outcome of any litigation or regulatory examinations, investigations or ~~investigations,~~inquiries, it is possible that the outcome of such matters could have a material adverse effect on ~~the Company’s~~our consolidated results of operations or cash flows for an individual reporting period. However, based on currently available information, management does not believe that ~~the~~ pending matters are likely to have a material adverse effect, individually or in the aggregate, on ~~the Company’s~~our financial condition. For additional information on certain legal and regulatory matters in which we are or have been involved, see Note 17 to the Consolidated Financial Statements included elsewhere in this Report.

Item 1A. Risk Factors

Certain factors may have a material adverse effect on our business, financial condition and results of operations, and you should carefully consider them. It is not possible to predict or identify all such factors. For discussion of potential risks or uncertainties affecting us, please refer to the information under the heading “Item ~~1A-Risk~~1A—Risk Factors” ~~included~~ in our ~~2017~~2018 Annual Report. There have been no material changes during ~~Third~~Second Quarter ~~2018.~~2019 to the risk factors disclosed in the 2018 Annual Report.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Repurchase of Equity Securities:

(Dollar amounts in millions, except number of shares and per share amounts)
Period in 2018
Total
Number of
Shares Repurchased

Average Price
Paid Per Share

Total Number of Shares
Repurchased as Part of
Publicly Announced
Programs (1)

Approximate
Dollar Value of
Shares that
May Yet be
Repurchased
Under the
Programs (1)
July 1-31 281,010
$ 107.28
281,010
$ 263.3
August 1-31 317,600
106.06
317,600
229.6
September 1-30 185,000
104.52
185,000
210.3
Total 783,610
$ 106.13
783,610
$ 210.3



(In millions, except number of shares and per share amounts)
Period in 2019	Total Number of Shares Repurchased	Average Price Paid Per Share		Total Number of Shares Repurchased as Part of Publicly Announced Programs (1)	Approximate Dollar Value of Shares that May Yet be Repurchased Under the Programs (1)
January 1 - 31	189,230	$	93.43	189,230	$	743.5
February 1 - 28	152,000	98.39		152,000	728.5
March 1 - 31	184,449	97.07		184,449	710.6
April 1 - 30	196,583	94.37		196,583	692.1
May 1 - 31	184,000	97.13		184,000	674.2
June 1 - 30	131,000	104.93		131,000	660.5
Total	1,037,262	$	97.09	1,037,262	$	660.5


(1)	Shares purchased pursuant to the November 14, 2016 publicly announced share repurchase authorization of up to $600.0 million of outstanding common stock. On November 5, 2018, our Board of Directors authorized the Company to repurchase up to an additional $600.0 million of its outstanding common stock.

Item 6. Exhibits

Pursuant to the rules and regulations of the SEC, ~~the Company has~~we have filed or incorporated by reference certain agreements as exhibits to this ~~quarterly Report on Form 10-Q.~~Report. These agreements may contain representations and warranties by the ~~parties.~~parties thereto. These representations and warranties have been made solely for the benefit of the other party or parties to such agreements and (i) may have been qualified by disclosures made to such other party or parties, (ii) were made only as of the date of such agreements or such other date(s) as may be specified in such agreements and are subject to more recent developments, which may not be fully reflected in ~~the Company’s~~our public disclosure, (iii) may reflect the allocation of risk among the parties to such agreements and (iv) may apply materiality standards different from what may be viewed as material to investors. Accordingly, these representations and warranties may not describe ~~the Company’s~~our actual state of affairs at the date hereof and should not be relied upon.

The following exhibits either (a) are filed with this Report or (b) have previously been filed with the SEC and are incorporated herein by reference to those prior filings. Exhibits are available upon request at the investor relations section of our website, located at www.assurant.com. ~~Our~~The information on our website is not a part of this Report and is not incorporated by reference in this Report.



10.1		Assurant, Inc. Amended and Restated Directors Compensation Plan, effective as of May 8, 2019. *

31.1		Rule 13a-14(a)/15d-14(a) Certification of Principal Executive Officer.

31.2		Rule 13a-14(a)/15d-14(a) Certification of Principal Financial Officer.

32.1		Certification of Chief Executive Officer of Assurant, Inc. pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2		Certification of Chief Financial Officer of Assurant, Inc. pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101		The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended ~~September~~June 30, ~~2018,~~2019, formatted in XBRL (Extensible Business Reporting Language): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations, (iii) the Consolidated Statements of Comprehensive Income, (iv) the Consolidated Statements of Changes in ~~Stockholders’~~ Equity, (v) the Consolidated Statements of Cash Flows, and (vi) Notes to Consolidated Financial Statements.

*Management contract or compensatory plans

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, ~~as amended,~~ the registrant has duly caused this ~~Report~~report to be signed on its behalf by the undersigned thereunto duly authorized.




	ASSURANT, INC.

~~Date: November 8, 2018~~	By:	/s/ ALAN B. COLBERG
	Name:	Alan B. Colberg
	Title:	President, Chief Executive Officer and Director

~~Date: November 8, 2018~~	By:	/s/ RICHARD S. DZIADZIO
	Name:	Richard S. Dziadzio
	Title:	Executive Vice President and Chief Financial Officer ~~and Treasurer~~

Date: August 8, 2019

7267



	Three Months Ended September 30, 2018
	Common Stock		Preferred Stock		Additional Paid-in Capital		Retained Earnings			Accumulated Other Comprehensive Income			Treasury Stock			Non-controlling Interest			Total
	(in millions)
Balance at June 30, 2018	$	1.6	$	2.9	$	4,459.7	$	5,846.3		$	(137.9	)	$	(4,860.1	)	$	20.4		$	5,332.9
Cumulative effect of change in accounting principles (1)	—		—		—		(82.0		)	82.0			—			—			—
Stock plan exercises	—		—		1.7		—			—			—			—			1.7
Stock plan compensation expense	—		—		17.4		—			—			—			—			17.4
Common stock dividends ($0.56 per share)	—		—		—		(35.5		)	—			—			—			(35.5		)
Acquisition of common stock	—		—		—		—			—			(83.2		)	—			(83.2		)
Net income	—		—		—		53.0			—			—			—			53.0
Preferred stock dividends ($1.63 per share)	—		—		—		(4.7		)	—			—			—			(4.7		)
Change in equity of non-controlling interest	—		—		—		—			—			—			(0.1		)	(0.1		)
Other comprehensive loss	—		—		—		—			(41.8		)	—			—			(41.8		)
Balance at September 30, 2018	$	1.6	$	2.9	$	4,478.8	$	5,777.1		$	(97.7	)	$	(4,943.3	)	$	20.3		$	5,239.7



	Nine Months Ended September 30, 2018
	Common Stock		Preferred Stock		Additional Paid-in Capital			Retained Earnings			Accumulated Other Comprehensive Income			Treasury Stock			Non-controlling Interest		Total
	(in millions)
Balance at December 31, 2017	$	1.5	$	—	$	3,197.9		$	5,697.3		$	234.0		$	(4,860.1	)	$	10.9	$	4,281.5
Cumulative effect of change in accounting principles, net of taxes (1)	—		—		—			(40.6		)	48.1			—			—		7.5
Stock plan exercises	—		—		(7.1		)	—			—			—			—		(7.1		)
Stock plan compensation expense	—		—		39.1			—			—			—			—		39.1
Common stock dividends ($1.68 per share)	—		—		—			(96.1		)	—			—			—		(96.1		)
Acquisition of common stock	—		—		—			—			—			(83.2		)	—		(83.2		)
Net income	—		—		—			226.0			—			—			—		226.0
Issuance of preferred stock	—		2.9		273.5			—			—			—			—		276.4
Issuance of common stock	0.1		—		975.4			—			—			—			—		975.5
Preferred stock dividends ($3.30 per share)	—		—		—			(9.5		)	—			—			—		(9.5		)
Change in equity of non-controlling interest	—		—		—			—			—			—			9.4		9.4
Other comprehensive loss	—		—		—			—			(379.8		)	—			—		(379.8		)
Balance, September 30, 2018	$	1.6	$	2.9	$	4,478.8		$	5,777.1		$	(97.7	)	$	(4,943.3	)	$	20.3	$	5,239.7



Common stock shares issued to TWG equityholders	10,399,862
Volume weighted average common share price of Assurant, Inc. on May 31, 2018	$	93.80
Share issuance consideration	$	975.5
Aggregate cash consideration	894.9
Repayment of pre-existing TWG debt	595.9
Total acquisition consideration	$	2,466.3



	June 1, 2018 to September 30, 2018
	Global Lifestyle		Corporate and Other (1)			Total
Total revenues	$	863.9	$	(5.2	)	$	858.7
Net income	$	39.3	$	(17.6	)	$	21.7



	VOBA						Other Intangible Assets (With Finite Lives)
	Related to TWG Acquisition		Other		Total		Related to TWG Acquisition		Other		Total
October 1 - December 31, 2018	$	104.5	$	1.8	$	106.3	$	4.1	$	14.4	$	18.5
2019	511.4		6.6		518.0		19.4		42.1		61.5
2020	629.6		6.3		635.9		27.6		35.7		63.3
2021	703.2		0.8		704.0		31.3		26.5		57.8
2022	768.5		0.7		769.2		35.0		17.0		52.0
2023	777.9		0.6		778.5		36.2		11.6		47.8
Thereafter	391.4		2.2		393.6		287.8		40.4		328.2
Total	$	3,886.5	$	19.0	$	3,905.5	$	441.4	$	187.7	$	629.1



Change in accumulated other comprehensive (loss) income before reclassifications	4.8			(51.0		)	0.5			(0.5		)	—			(46.2		)
Amounts reclassified from accumulated other comprehensive income (loss)	—			4.0			(0.4		)	—			0.8			4.4
Net current-period other comprehensive income (loss)	4.8			(47.0		)	0.1			(0.5		)	0.8			(41.8		)
Cumulative effect of change in accounting principles (1)	0.1			96.0			—			3.9			(18.0		)	82.0
Balance at September 30, 2018	$	(350.5	)	$	315.2		$	21.0		$	16.4		$	(99.8	)	$	(97.7	)

	Three Months Ended September 30, 2017
	Foreign currency translation adjustment			Net unrealized gains on securities			Net unrealized gains on derivative transactions			OTTI			Unamortized net (losses) on Pension Plans			Accumulated other comprehensive income
Balance at June 30, 2017	$	(284.6	)	$	565.6		$	—		$	18.8		$	(62.9	)	$	236.9
Change in accumulated other comprehensive (loss) income before reclassifications	27.6			(4.2		)	—			(1.0		)	—			22.4
Amounts reclassified from accumulated other comprehensive (loss) income	—			(3.5		)	—			—			0.6			(2.9		)
Net current-period other comprehensive income (loss)	27.6			(7.7		)	—			(1.0		)	0.6			19.5
Balance at September 30, 2017	$	(257.0	)	$	557.9		$	—		$	17.8		$	(62.3	)	$	256.4



(Dollar amounts in millions, except number of shares and per share amounts)
Period in 2018	Total Number of Shares Repurchased	Average Price Paid Per Share		Total Number of Shares Repurchased as Part of Publicly Announced Programs (1)	Approximate Dollar Value of Shares that May Yet be Repurchased Under the Programs (1)
July 1-31	281,010	$	107.28	281,010	$	263.3
August 1-31	317,600	106.06		317,600	229.6
September 1-30	185,000	104.52		185,000	210.3
Total	783,610	$	106.13	783,610	$	210.3