Aetna reports fourth quarter and year-end 1995 earnings.HARTFORD Hartford, city (1990 pop. 139,739), state capital, Hartford co., central Conn., on the west bank of the Connecticut River; settled as Newtown 1635–36 on the site of a Dutch trading post (1633; abandoned 1654), inc. 1784. , Conn.--(BUSINESS WIRE)--Feb. 7, 1996--Aetna (NYSE NYSE See: New York Stock Exchange : AET AET Aetna, Inc. AET After Extra Time AET Actual Evapotranspiration AET Alliance for Environmental Technology AET Alpha-Ethyltryptamine AET Applied Extrusion Technologies, Inc. ) today announced fourth quarter 1995 operating earnings Operating Earnings Profits after subtracting expenses such as marketing, cost of goods sold, administration and general operating costs from revenue. Notes: Tax and interest expenses are not subtracted - operating earnings are synonymous with EBIT (earnings before (a) (excluding a special charge) of $238.3 million, or $2.07 per share, compared with $199.1 million, or $1.77 per share, in the fourth quarter of 1994. This includes results from Aetna's property-casualty operations, which are reflected on a discontinued dis·con·tin·ue v. dis·con·tin·ued, dis·con·tin·u·ing, dis·con·tin·ues v.tr. 1. To stop doing or providing (something); end or abandon: basis. On November November: see month. 29, 1995, Aetna Aetna, volcano: see Etna, Italy. announced its agreement to sell its property-casualty operations to Travelers Insurance Group Inc. for approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $4 billion in cash. Aetna reported fourth quarter 1995 operating earnings from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the (which excludes property-casualty) of $118.6 million or $1.03 per share, compared with $129.3 million, or $1.15 per share, for fourth quarter 1994. Total revenues from continuing operations for the fourth quarter were $3.4 billion in 1995, an 8 percent increase over the $3.1 billion recorded in 1994's fourth quarter. "In 1995, we refocused our businesses on opportunities for growth, and total revenues grew for both the quarter and the year," Aetna Chairman Ronald E. Compton Compton, city (1990 pop. 90,454), Los Angeles co., S Calif., a suburb between Los Angeles and Long Beach; inc. 1888. It has aircraft, electronic, and steel industries. Largely African American, Compton is a noted center for rap music. said. "In our core health business, earnings declined as we made strategic investments to build our managed care infrastructure and contain medical costs. The success of these efforts contributed to a significant rise in managed care membership." "We also targeted the growing retirement services market in the U.S., and expanded our presence in the Pacific Rim Pacific Rim, term used to describe the nations bordering the Pacific Ocean and the island countries situated in it. In the post–World War II era, the Pacific Rim has become an increasingly important and interconnected economic region. ," Compton said. Including a special $218.1 million after-tax af·ter-tax also af·ter·tax adj. Relating to or being that which remains after payment, especially of income taxes: after-tax profits. charge in the discontinued property-casualty operations for increases to asbestos asbestos, mineral asbestos, common name for any of a variety of silicate minerals within the amphibole and serpentine groups that are fibrous in structure and more or less resistant to acid and fire. reserves, fourth quarter 1995 operating earnings were $20.2 million, or $0.18 per share. The asbestos charge will not affect the value of the property-casualty transaction. 1995 Results Full-year 1995 operating earnings from continuing operations were $444.4 million or $3.90 per share, compared with operating earnings of $450.6 million or $3.99 per share for 1994. Total 1995 revenues from continuing operations were $13.0 billion, a 6 percent increase over the $12.2 billion in total revenues from continuing operations reported in 1994. Segment Results Aetna Health Plans, the nation's third largest health care company, providing health, specialty A contract under seal. A specialty is a written document that has been sealed and delivered and is given as security for the payment of a specifically indicated debt. health and group insurance products, reported 1995 fourth quarter operating earnings of $71.8 million, compared with $86.2 million in the prior-year period. Fourth quarter total revenues were $1.9 billion in 1995, compared with $1.8 billion for 1994 s fourth quarter. For the year, operating earnings were $293.1 million, compared with $355.3 million in 1994. Total revenues increased to $7.6 billion in 1995 compared with $7.1 billion in 1994 due to growth in managed care membership. Managed care membership grew by 14 percent in 1995 to 8 million, or 67 percent, of Aetna Health Plans 12 million health members. Earnings for the fourth quarter and 1995 are lower primarily as a result of significant investments in managed care infrastructure and in the development of primary care physician practices. In addition, a deterioration de·te·ri·o·ra·tion n. The process or condition of becoming worse. in the medical trend in the indemnity Recompense for loss, damage, or injuries; restitution or reimbursement. An indemnity contract arises when one individual takes on the obligation to pay for any loss or damage that has been or might be incurred by another individual. and Preferred Provider (PPO PPO abbr. preferred provider organization PPO Managed care Preferred provider organization, see there Infectious disease Pleuropneumonia-like organism, see there ) products in the first half of the year contributed to the earnings decline. This trend leveled off in the latter half of the year. Strong medical management in Aetna's commercial HMO HMO health maintenance organization. HMO n. A corporation that is financed by insurance premiums and has member physicians and professional staff who provide curative and preventive medicine within certain financial, product led to an 8 percent decline in costs (PMPM PMPM Per Member Per Month PMPM Pilgrim Monument and Provincetown Museum (Massachusetts) ), which helped boost HMO earnings by approximately 33 percent in 1995. Aetna Life Insurance & Annuity annuity: see insurance. annuity Payment made at a fixed interval. A common example is the payment received by retirees from their pension plan. There are two main classes of annuities: annuities certain and contingent annuities. , which markets life insurance, retirement and investment products, and mutual funds to individuals and small businesses, reported fourth quarter 1995 operating earnings of $46.3 million, compared with $40.5 million in the prior-year period. Operating earnings for 1995 were $171.0 million, compared with $162.9 million recorded in 1994. The increase in earnings for the quarter and the full year was attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to strong sales growth, as well as increased assets under management Assets Under Management (AUM) is a term used by financial services companies in the mutual fund and money management or investment management business to gauge how much money they are managing. , partially offset by higher expenses to support business growth. International, which primarily sells life insurance and financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. products in selected emerging markets, reported level fourth quarter operating earnings: $24.5 million in 1995 compared with $24.6 million in 1994. Full-year 1995 operating earnings were $88.7 million versus $69.1 million in 1994. The increase in 1995 earnings was primarily generated from continued growth in the Pacific Rim, in addition to increased investment income from Mexico Mexico, city, Mexico Mexico or Mexico City, Span. Ciudad de México (Méjico), city (1990 pop. 8,236,960; 1991 met. area est. 20,899,000), central Mexico, capital and largest city of Mexico. . Large Case Pensions, which markets a variety of retirement and other savings products to large customers, reported fourth quarter earnings of $21.0 million in 1995 versus $21.5 million for 1994. Full-year 1995 operating earnings were $78.2 million, up from the $71.4 million reported for 1994. Corporate reported net operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. of $45.0 million in 1995's fourth quarter, compared with $43.5 million in 1994's fourth quarter. In 1995, net operating expenses from the corporate segment decreased 10 percent to $186.6 million from the $208.1 million in operating expenses recorded for 1994. This decrease was due to significantly lower corporate staff expenses, partially offset by higher interest expense. The Company expects to reduce corporate operating expenses further following the close of the property-casualty transaction. Discontinued Operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. , which includes both personal and commercial property-casualty insurance, recorded a fourth quarter operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. of $98.4 million in 1995, versus earnings of $37.6 million for the comparable period in 1994. The 1995 amount includes the $218.1 million after-tax charge for asbestos reserves in the quarter, compared with $10.1 million of asbestos charges and $22.1 million of environmental charges in 1994 s fourth quarter. For the year, property-casualty recorded an operating loss of $328.2 million, compared with operating earnings of $59.5 million in 1994. Including the fourth quarter asbestos charge, full-year earnings reflect a total of $259.5 million of asbestos charges, and $505.7 million of previously announced environmental charges, compared with $25.4 million of asbestos charges and $149.9 million in environmental charges in 1994. Capital Gains/Losses Fourth quarter 1995 results include $155.5 million in total net realized capital gains. Of this amount, $29.2 million in realized capital gains relate to continuing operations and $126.3 million relate to realized capital gains primarily from the sale of equity securities held in discontinued operations. In the fourth quarter of 1994, net income included a net realized capital loss of $6.9 million: a net realized capital loss of $7.6 million in continuing operations and a net realized capital gain of $0.7 million in discontinued operations. In 1995, total net realized capital gains were $135.5 million: $29.5 million from continuing operations and $106.0 million from discontinued operations. In 1994, net income included a total net realized capital loss of $42.6 million: a net realized capital loss of $41.2 million in continuing operations and a net realized capital loss of $1.4 million in discontinued operations. Net Income Fourth quarter net income was $175.7 million, or $1.53 per share, compared with $160.0 million, or $1.42 per share, in the fourth quarter of 1994. Aetna posted total net income for 1995 of $251.7 million, (or $2.21 per share) versus $467.5 million (or $4.14 per share) in 1994. Net income from Discontinued Operations in 1995's fourth quarter was $27.9 million, compared with $38.3 million in the fourth quarter of 1994. Shareholders Equity Total shareholders equity increased 32 percent to $7.3 billion ($63.39 per common share) at December December: see month. 31, 1995 from $5.5 billion ($48.85 per common share) at December 31, 1994, primarily reflecting the change in the value of debt securities, which are carried at market value. (a) -- net income excluding net realized capital gains or losses capital gains or losses n. particularly when calculating the tax liability of an individual or business, this is the difference between the original cost plus the cost of capital improvements, excluding maintenance, called "basis" and the sales price. -0-
Consolidated Statements of Income
(Millions, except per share data)
3 Months Ended 12 Months Ended
December 31, December 31,
1995 1994 1995 1994
Revenue:
Premiums $1,896.4 $1,751.0 $7,431.4 $6,901.3
Net investment income $901.6 $904.3 $3,575.1 $3,631.4
Fees and other income $511.3 $449.5 $1,924.3 $1,741.5
Net realized capital gains
(losses) $41.2 ($9.1) $47.2 ($55.2)
Total Revenue $3,350.5 $3,095.7 $12,978.0 $12,219.0
Benefits and expenses: Current and future benefits $2,291.0 $2,160.1 $9,027.2 $8,652.0 Operating expenses $797.7 $714.6 $3,087.5 $2,805.9 Amortization of deferred policy acquisition costs $36.6 $40.2 $137.1 $133.6 Total benefits and expenses $3,125.3 $2,914.9 $12,251.8 $11,591.5 Income from Continuing Operations before income taxes $225.2 $180.8 $726.2 $627.5
Federal and foreign income taxes (benefits):
Current $89.8 ($55.7) $261.8 ($18.1)
Deferred ($12.4) $114.8 ($9.5) $236.2
Total federal and foreign
income taxes $77.4 $59.1 $252.3 $218.1
Income from Continuing Operations $147.8 $121.7 $473.9 $409.4 Income (Loss) from Discontinued Operations, net of tax $27.9 $38.3 ($222.2) $58.1 Net Income $175.7 $160.0 $251.7 $467.5 Total Assets $84,323.7 $75,486.7 Shareholders' Equity $7,272.8 $5,503.0 -0-
Consolidated Statements of Income (Cont'd)(B)
3 Months Ended 12 Months Ended
December 31, December 31,
1995 1994 1995 1994
Results per common share:
Income from Continuing
Operations $1.28 $1.08 $4.16 $3.63
Income (Loss) from
Discontinued Operations,
net of tax $0.25 $0.34 ($1.95) $0.51
Net Income $1.53 $1.42 $2.21 $4.14
Net realized capital
gains (losses) net of tax:
Continuing Operations $0.25 ($0.07) $0.26 ($0.36)
Discontinued Operations $1.10 $0.01 $0.93 ($0.02)
Shareholders' equity $63.39 $48.85 Dividends declared $0.69 $0.69 $2.76 $2.76 Shares outstanding Weighted average common shares and share equivalents 115,200,844 112,718,982 113,897,633 112,848,653 Actual common shares at end of period 114,727,093 112,657,758 (b) Additional information on the company's results is published in the 1995 Fourth Quarter Financial Supplement available from Daniel S. Messina, Vice President, Financial Relations, (203) 273-1763. -0-
Segment Information
(Millions)
3 Months Ended 12 Months Ended
December 31, December 31,
1995 1994 1995 1994
Aetna Health Plans:
Premiums $1,491.9 $1,378.5 $5,949.7 $5,611.5
Operating earnings $71.8 $86.2 $293.1 $355.3
Net realized capital
gains (losses) $2.5 $1.8 ($7.1) ($13.6)
Net Income $74.3 $88.0 $286.0 $341.7
Aetna Life Insurance & Annuity: Premiums $48.6 $56.6 $178.3 $168.3 Operating earnings $46.3 $40.5 $171.0 $162.9 Net realized capital gains (losses) $15.4 ($2.3) $27.0 ($3.8) Net Income $61.7 $38.2 $198.0 $159.1 International: Premiums $290.6 $228.8 $1,038.5 $887.1 Operating earnings $24.5 $24.6 $88.7 $69.1 Net realized capital gains (losses) $1.9 ($1.4) ($2.1) $2.1 Net Income $26.4 $23.2 $86.6 $71.2 Large Case Pensions: Premiums $65.3 $87.1 $264.9 $234.4 Operating earnings $21.0 $21.5 $78.2 $71.4 Net realized capital gains (losses) $6.4 ($3.3) $11.0 ($17.0) Net Income $27.4 $18.2 $89.2 $54.4 Corporate: Net operating expenses ($45.0) ($43.5) ($186.6) ($208.1) Net realized capital gains (losses) $3.0 ($2.4) $0.7 ($8.9) Net Expense ($42.0) ($45.9) ($185.9) ($217.0) Continuing Operations: Premiums $1,896.4 $1,751.0 $7,431.4 $6,901.3 Operating earnings $118.6 $129.3 $444.4 $450.6 Net realized capital gains (losses) $29.2 ($7.6) $29.5 ($41.2) Income from Continuing Operations $147.8 $121.7 $473.9 $409.4 -0-
Segment Information (Cont'd)(b)
(Millions)
3 Months Ended 12 Months Ended
December 31, December 31,
1995 1994 1995 1994
Discontinued Operations:
Premiums $1,043.2 $1,101.1 $4,118.9 $4,390.8
Adjusted operating earnings $119.7 $69.8 $437.0 $234.8
Environmental charges - ($22.1) ($505.7) ($149.9)
Asbestos charges ($218.1) ($10.1) ($259.5) ($25.4)
Operating earnings (losses) ($98.4) $37.6 ($328.2) $59.5
Net realized capital
gains (losses) $126.3 $0.7 $106.0 ($1.4)
Income (Loss) from
Discontinued Operations $27.9 $38.3 ($222.2) $58.1
Total Company: Premiums $2,939.6 $2,852.1 $11,550.3 $11,292.1 Adjusted operating earnings $238.3 $199.1 $881.4 $685.4 Environmental charges - ($22.1) ($505.7) ($149.9) Asbestos charges ($218.1) ($10.1) ($259.5) ($25.4) Operating earnings $20.2 $166.9 $116.2 $510.1 Net realized capital gains (losses) $155.5 ($6.9) $135.5 ($42.6) Net Income $175.7 $160.0 $251.7 $467.5 -0- (b) Additional information on the company's results is published in the 1995 Fourth Quarter Financial Supplement available from Daniel S. Messina, Vice President, Financial Relations, (203) 273-1763. CONTACT: Aetna Joyce Joyce - A distributed language based on Pascal and CSP, by Per Brinch Hansen. ["Joyce - A Programming Language for Distributed Systems", Per Brinch Hansen, Soft Prac & Exp 17(1):29-50 (Jan 1987)]. A. Oberdorf Oberdorf is a German term generally meaning the higher part of a municipality. It is also the name of a number of places in Europe: Switzerland:
or Daniel S Daniel, book of the Bible Daniel, book of the Bible. It combines "court" tales, perhaps originating from the 6th cent. B.C., and a series of apocalyptic visions arising from the time of the Maccabean emergency (167–164 B.C. . Messina Messina (mās-sē`nä), city (1991 pop. 231,693), capital of Messina prov., NE Sicily, Italy, on the Strait of Messina, opposite the Italian mainland. It is a busy seaport and a commercial and light industrial center. , 203/273-6184 (For Investor Relations Investor relations The process by which the corporation communicates with its investors. ) |
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