Alleghany 2021 Full Year Performance Highlights
Non-GAAP Financial Measures
This document contains non-GAAP financial measures. Reconciliations of these non-GAAP financial measures to the most
direct comparable GAAP measures and related information are provided in our financial supplement and Form 10-K and
10-Q filings, which are available on our website at www.alleghany.com.
Adjusted Earnings (And Adjusted Earnings Per Share And Adjusted Return On Average Stockholders'
Equity)
Adjusted earnings (including in adjusted return on average stockholders' equity) and adjusted earnings per share exclude
(on an after-tax basis): (i) change in the fair value of equity securities; (ii) net realized capital gains; (iii) change in
allowance for credit losses for available on sale securities; (iv) amortization of intangible assets; and (v) gain on bargain
purchase, all as determined in accordance with GAAP. Alleghany uses adjusted earnings and adjusted earnings per share
as a supplement to net earnings attributable to Alleghany stockholders and earnings per share, respectively, the most
comparable GAAP financial measures, to provide useful additional information to investors by highlighting net earnings
and earnings per share attributable to its performance excluding change in the fair value of equity securities, realized
capital gains or losses, change in allowance for credit losses on available for sale securities, amortization of intangible
assets and gain on bargain purchase. A reconciliation of adjusted earnings and adjusted earnings per share to net
earnings attributable to Alleghany stockholders and earnings per share, respectively, is presented within "Adjusted
Earnings Reconciliation" on pages 37 and 38 of the Q4 2021 Financial Supplement.
Adjusted Earnings Before Income Taxes
Adjusted earnings before income taxes represents product and service revenues and net investment income less other
operating expenses and interest expense, and does not include: (i) change in the fair value of equity securities; (ii) net
realized capital gains; (iii) change in allowance for credit losses on available for sale securities; and (iv) amortization of
intangible assets. Because adjusted earnings before income taxes excludes income taxes, change in the fair value of equity
securities, net realized capital gains, change in allowance for credit losses on available for sale securities and
amortization of intangible assets, it provides an indication of economic performance that is not affected by investment
activity, levels of amortization resulting from acquisition accounting or effective tax rates. Alleghany uses adjusted
earnings before income taxes as a supplement to earnings before income taxes, the most comparable GAAP financial
measure, to evaluate the performance of certain of its noninsurance operating subsidiaries and investments. A
reconciliation of adjusted earnings before income taxes to earnings before income taxes is presented on page 23 of the Q4
2021 Financial Supplement.
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