Aetna reports second quarter 1996 results.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)--July 26, 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 second quarter 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) 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 and before unusual items of $166.2 million, or $1.43 per share, compared with $111.7 million, or $0.99 per share, in the second quarter of 1995. "I am pleased to report increased underlying earnings in all of our core businesses," said Aetna Aetna, volcano: see Etna, Italy. 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. . "With the close of our merger with U.S. Healthcare U.S. Healthcare is a now-defunct healthcare company. The logo had an apple. The merger with Aetna In 1996, the company merged with Aetna, calling it Aetna U.S. Healthcare. The U.S. Healthcare apple logo was next to the Aetna name, and U.S. Healthcare under it. U.S. on July July: see month. 19, we are now positioned to become even more competitive and profitable, as we fulfill ful·fill also ful·fil tr.v. ful·filled, ful·fill·ing, ful·fills also ful·fils 1. To bring into actuality; effect: fulfilled their promises. 2. our dynamic growth strategy." Second quarter 1996 unusual items include $255.0 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. in previously announced facilities and severance The act of dividing, or the state of being divided. The term severance has unique meanings in different branches of the law. Courts use the term in both civil and criminal litigation in two ways: first, when dividing a lawsuit into two or more parts, and second, when charges related to the sale of Aetna's property-casualty operations and previously announced restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). actions in Aetna Health Plans. Also included is a $110.5 million after-tax benefit from a reduction in reserves related to 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: products. Including $2.6 million in net realized capital gains and the above unusual items, income from continuing operations for the second quarter 1996 was $24.3 million, or $0.21 per share, compared with $121.1 million, or $1.07 per share, for the second quarter of 1995, which includes $9.4 million in net realized capital gains. Net income for the second quarter 1996 was $288.0 million, or $2.47 per share, which reflects a $263.7 million after-tax gain on the sale of Aetna's property-casualty operations, which closed on April 2, 1996. Aetna reported a net loss of $296.9 million, or ($2.62) per share, in the second quarter of 1995 due to an after-tax charge of $488 million for environmental reserves in its discontinued property-casualty operations. Total revenues from continuing operations for the second quarter of 1996 were $3.2 billion, level with the $3.2 billion recorded in the second quarter of 1995. Segment Results Aetna Health Plans reported 1996 second quarter operating earnings, excluding a $19.5 million after-tax severance charge, of $81.0 million, an 11 percent increase over the $73.0 million recorded in the prior-year period. The increase in operating earnings was driven primarily by improvements in the group insurance business and the specialty health product line within the health business. Revenues for the quarter were $1.8 billion, down slightly from second quarter 1995 revenues of $1.9 billion. Managed care membership (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, , POS (1) See point of sale and packet over SONET. (2) "Parent over shoulder." See digispeak. POS - point of sale and PPO PPO abbr. preferred provider organization PPO Managed care Preferred provider organization, see there Infectious disease Pleuropneumonia-like organism, see there ) stood at 7.6 million or approximately 68 percent of Aetna Health Plans' 11.1 million members as of June June: see month. 30, 1996. Commercial HMO membership grew by 15 percent over the prior year. Aetna Health Plans' operations were merged with those of U.S. Healthcare on July 19, 1996 to create the nation's leading health care services business, providing health, specialty health, and group life and disability coverage to more than 23 million Americans. Aetna Retirement Services, which markets a wide array of life insurance, retirement and investment products to individuals and small businesses, reported second quarter 1996 operating earnings of $46.7 million, compared with $42.4 million in the prior-year period. The increase in earnings for the quarter was primarily attributable to continued growth in 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. . Total assets under management stood at $27.6 billion as of June 30, 1996, compared with $22.5 billion at the end of 1995's second quarter. Aetna 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 1996 second quarter operating earnings of $27.1 million, compared with $23.3 million in the second quarter of 1995. The increase in earnings for the quarter was primarily due to strong earnings in Chile and continued growth 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. , partially offset by lower earnings in 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. due to lower interest rates. Large Case Pensions, which markets a variety of retirement and other savings products to large customers, reported 1996 second quarter operating earnings, before an unusual item, of $25.7 million, compared with $19.9 million in the prior-year period, primarily due to higher investment margins. The unusual item was a $110.5 million after-tax benefit related to a reduction in discontinued products reserves. The discontinued products reserving action was a result of a regular, periodic review of reserves and primarily reflects continuing and recent favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. developments in real estate markets. 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. , excluding $235.5 million of facilities and severance charges, of $14.3 million in 1996's second quarter, compared with $46.9 million in 1995's second quarter. This decrease was primarily due to $30 million in income earned on the proceeds from the sale of Aetna's property-casualty operations. Six-Month Results Operating earnings from continuing operations, excluding unusual items, were $290.3 million, or $2.50 per share, for the first six months of 1996, compared with $214.7 million, or $1.90 per share, for the first half of 1995. Net income was $635.7 million, or $5.47 a share, for the first half of 1996, compared with a net loss of $136.1 million, or ($1.20) per share for the first half of 1995. Shareholders' Equity Shareholders' Equity A firms' total assets minus its total liabilities. Equivalently, it is share capital plus retained earnings minus treasury shares. Shareholders' equity is the amount by which a company is financed through common and preferred shares. Total shareholders' equity was $7.3 billion, or $63.46 per share, at June 30, 1996, compared with $7.3 billion, or $63.39 per share, at Dec. 31, 1995. (a) -- net income excluding net realized capital gains or losses capital gains or losses n. particularly when calculating the tax liability of an individual or business, this is the difference between the original cost plus the cost of capital improvements, excluding maintenance, called "basis" and the sales price. -0-
Consolidated Statements of Income(a)
($ in millions, except per share data)
3 Months 6 Months
Ended June 30, Ended June 30,
1996 1995 1996 1995
Revenue:
Premiums $1,710.8 $1,822.5 $3,554.7 $3,704.6
Net investment income 893.8 919.5 1,780.1 1,789.5
Fees and other income 548.1 486.3 1,066.3 939.7
Net realized capital gains 4.4 15.9 66.4 2.7
Total Revenue 3,157.1 3,244.2 6,467.5 6,436.5
Benefits and expenses: Current and future benefits 2,059.4 2,256.2 4,296.3 4,531.9 Operating expenses 801.0 769.8 1,591.2 1,510.5 Amortization of deferred policy acquisition costs 38.1 36.6 75.1 69.1 Reduction of loss on discontinued products (170.0) 0.0 (170.0) 0.0 Facilities and severance charges 392.7 0.0 392.7 0.0 Total benefits and expenses 3,121.2 3,062.6 6,185.3 6,111.5 Income from Continuing Operations before income taxes 35.9 181.6 282.2 325.0 Federal and foreign income taxes 11.6 60.5 92.4 111.5 Income from Continuing Operations 24.3 121.1 189.8 213.5 Income (Loss) from Discontinued Operations, net of tax 0.0 (418.0) 182.2 (349.6) Gain on Sale of Discontinued Operations, net of tax 263.7 0.0 263.7 0.0 Net Income (Loss) $288.0 ($296.9) $635.7 ($136.1) Shareholders' Equity $7,342.3 $6,653.0 Results per common share: Income from Continuing Operations $0.21 $1.07 $1.63 $1.89 Income (Loss) from Discontinued Operations, net of tax 0.00 (3.69) 1.57 (3.09) Gain on sale of Discontinued Operations, net of tax 2.26 0.00 2.27 0.00 Net Income (Loss) $2.47 ($2.62) $5.47 ($1.20) Net realized capital gains (losses)from continuing operations, net of tax $0.02 $0.08 $0.38 ($0.01) Shareholders' equity $63.46 $58.76 Dividends declared (b) $0.69 $0.69 $1.38 Shares outstanding Weighted average common shares (and share equivalents in 1996) 116,490,454 113,033,255 116,297,376 112,871,537 (a) Additional information on the company's results is published in the 1996 Second Quarter Financial Supplement available from Amin Khalifa, Investor Relations, (860) 273-6184. (b) Common Stock Dividend of $.20 declared by Aetna Inc. on July 19, 1996, payable on August 15, 1996 to shareholders of record as of July 26, 1996. Holders of Aetna Inc. 6.25 percent Class C Voting Preferred Stock as of the indicated record date will receive $0.3701 per share in cash, representing that portion of the dividend accrued and payable from the merger date, July 19, 1996, to the payment date, Aug. 15, 1996. -0- Segment Information (in millions)(a)
3 Months Ended June 30, 6 Months Ended June 30,
1996 1995 1996 1995
Aetna Health Plans:
Premiums $1,355.7 $1,461.8 $2,907.8 $2,956.5
Adjusted Operating
Earnings $81.0 $73.0 $160.9 $149.4
Facilities and
Severance Charge ($19.5) $0.0 ($19.5) $0.0
Operating earnings $61.5 $73.0 $141.4 $149.4
Net realized capital
gains (losses) ($3.9) ($3.5) $17.6 ($6.3)
Net Income $57.6 $69.5 $159.0 $143.1
Aetna Retirement Services: Premiums $29.5 $49.6 $55.5 $92.0 Operating earnings $46.7 $42.4 $93.0 $84.0 Net realized capital gains $1.1 $4.1 $11.3 $6.0 Net Income $47.8 $46.5 $104.3 $90.0 International: Premiums $278.0 $252.3 $517.6 $472.9 Operating earnings $27.1 $23.3 $51.2 $40.2 Net realized capital gains (losses) $0.2 $0.3 $0.8 ($2.5) Net Income $27.3 $23.6 $52.0 $37.7 Large Case Pensions: Premiums $47.6 $58.8 $73.8 $183.2 Adjusted Operating Earnings $25.7 $19.9 $45.9 $36.2 Discontinued Products Reserve Release $110.5 $0.0 $110.5 $0.0 Operating earnings $136.2 $19.9 $156.4 $36.2 Net realized capital gains $1.7 $8.8 $8.3 $3.8 Net Income $137.9 $28.7 $164.7 $40.0 Corporate: Adjusted Net Operating Expenses ($14.3) ($46.9) ($60.7) ($95.1) Facilities and Severance Charge ($235.5) $0.0 ($235.5) $0.0 Net operating expenses ($249.8) ($46.9) ($296.2) ($95.1) Net realized capital gains (losses) $3.5 ($0.3) $6.0 ($2.2) Net Expense ($246.3) ($47.2) ($290.2) ($97.3) Continuing Operations: Premiums $1,710.8 $1,822.5 $3,554.7 $3,704.6 Adjusted Operating Earnings $166.2 $111.7 $290.3 $214.7 Facilities and Severance Charge ($255.0) $0.0 ($255.0) $0.0 Discontinued Products Reserve Release $110.5 $0.0 $110.5 $0.0 Operating Earnings $21.7 $111.7 $145.8 $214.7 Net realized capital gains (losses) $2.6 $9.4 $44.0 ($1.2) Income from Continuing Operations $24.3 $121.1 $189.8 $213.5 Discontinued Operations: Income (Loss) from Discontinued Operations, net of tax $0.0 ($418.0) $182.2 ($349.6) Gain on Sale of Discontinued Operations, net of tax $263.7 $0.0 $263.7 $0.0 Net Income (Loss) $263.7 ($418.0) $445.9 ($349.6) Total Company: Operating earnings $21.7 $111.7 $145.8 $214.7 Discontinued Operations, net of tax $263.7 ($418.0) $445.9 ($349.6) Net realized capital gains (losses) $2.6 $9.4 $44.0 ($1.2) Net Income (Loss) $288.0 ($296.9) $635.7 ($136.1) (a) Additional information on the company's results is published in the 1996 Second Quarter Financial Supplement available from Amin Khalifa, Investor Relations, (860) 273-6184. 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 Amin AMIN Arabic Media Internet Network Khalifa Khalifa (خليفة ẖalīfä) is Arabic for "stewardship" of nature and family, and is a key obligation of a Muslim. , 860/273-6184 |
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