AmerUs Group Reports First Quarter Operating Earnings Per Share of $0.75.Business Editors DES MOINES Des Moines, city, United States Des Moines (dĭ moin`), city (1990 pop. 193,187), state capital and seat of Polk co., S central Iowa, at the junction of the Des Moines and Raccoon rivers; inc. , Iowa--(BUSINESS WIRE)--May 9, 2001 AmerUs Group (NYSE NYSE See: New York Stock Exchange :AMH AMH Abington Memorial Hospital (Abington, PA) AMH Anti-Müllerian Hormone AMH Australian Medicines Handbook AMH Automated Material Handling AMH Aviation Structural Mechanic (Hydraulics) US Navy Rating ) today announced first quarter adjusted net 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 of $22.8 million or $0.75 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share compared to $22.1 million or $0.73 per diluted share in the fourth quarter of 2000. The company's return on equity also increased to 10.7 percent compared to 10.5 percent in the fourth quarter of 2000. First quarter results of 2001 are not comparable to the first quarter of 2000 due to the impact of the company's demutualization Demutualization The process of changing corporate structure from a mutual fund company to some other form, such as a limited liability or corporation. Notes: This means mutual/life insurance companies convert from policyholder companies to stock companies. in 2000. "Our first quarter results are indicative indicative: see mood. of our continued success in the execution of our plan to grow earnings and return on equity," said Roger K. Brooks Brooks , Gwendolyn Elizabeth 1917-2000. American poet known for her verse detailing the dreams and struggles of African Americans. An early volume of poems, Annie Allen (1949), was awarded a Pulitzer Prize. Noun 1. , chairman, president and chief executive officer of AmerUs Group. "We continue to focus on growing our asset base, improving our margins and controlling our costs." Net Income Net income 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 was $19.5 million, or $0.64 per diluted share as compared to $18.0 million, or $0.59 per diluted share for the fourth quarter of 2000. The increase was primarily attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to growth in invested assets and improved product margins. Net income for the first quarter of 2001 was $11.6 million after a one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. charge of $8.2 million from the adoption of Statement of Financial Accounting Standards No.133, "Accounting for Certain Derivative Instruments Derivative instruments Contracts such as options and futures whose price is derived from the price of an underlying financial asset. and Hedging hedging, in commerce, method by which traders use two counterbalancing investment strategies so as to minimize any losses caused by price fluctuations. It is generally used by traders on the commodities market. Activities" on January January: see month. 1, 2001. Net income for the fourth quarter of 2000 was $18.0 million. 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. Sales Annuity sales for the first quarter increased by 19 percent to $521 million, compared to $439 million for the fourth quarter of 2000. The greatest gains were in the company's traditional fixed and multi-choice annuity products. "We expect strong growth in annuity sales to continue throughout the year though at a slightly lower growth rate than we experienced in the first quarter," said Brooks. Life Sales During the first quarter, life sales through AmerUs distribution increased by more than five percent to $13.6 million compared to the fourth quarter of 2000, primarily due to higher variable life sales in the company's joint venture. "Despite a difficult equity market, our variable life sales were very strong. Additionally, our new equity-indexed life product line showed excellent results this quarter, comprising over 50 percent of our new fixed life sales. Going forward, we expect these products to represent at least half of our new life sales," said Brooks. Combination with Indianapolis Indianapolis (ĭn'dēənă`pəlĭs), city (1990 pop. 731,327), state capital and seat of Marion co., central Ind., on the White River; selected 1820 as the site of the state capital (which was moved there in 1825), inc. 1847. Life Substantial progress was made toward completing the combination with Indianapolis Life Insurance Company. Two public hearings were held in March by the Indiana Indiana, state, United States Indiana, midwestern state in the N central United States. It is bordered by Lake Michigan and the state of Michigan (N), Ohio (E), Kentucky, across the Ohio R. (S), and Illinois (W). Insurance Commissioner to review Indianapolis Life's plan of conversion and combination with AmerUs Group, and the Commissioner subsequently issued orders approving the transactions. Also in March, AmerUs Group held a special meeting of shareholders at which they approved the issuance of additional shares of common stock in connection with the combination. Finally, Indianapolis Life's voting members approved the proposal to demutualize demutualize or -ise Verb [-izing, -ized] or -ising, -ised (of a mutual savings or life-assurance organization) to convert to a public limited company and combine with AmerUs Group. The demutualization and combination are expected to be effective late in May 2001. Corporate Actions During the first quarter, the company repurchased 10,000 shares of its common stock at an average price of $29.90 per share. The company also exercised its option to increase its ownership in its variable product joint venture by five percent, increasing the total ownership to 39 percent. Conference Call, Audio Replay and Additional Financial Information Interested parties may listen to a conference call with AmerUs Group's management discussing first quarter 2001 results by calling 800-937-6563 (international 801-983-4013) at 9:30 a.m. CDT CDT abbr. Central Daylight Time CDT Central Daylight Time CDT n abbr (US) (= Central Daylight Time) → hora de verano del centro; (BRIT on May 10, 2001. An audio replay of AmerUs Group's first quarter 2001 earnings conference call will be available at 1 p.m. CDT, May 10, 2001, through May 17, 2001. The call can be accessed by dialing 800-801-6000 (international: 913-383-5731), PIN 3096. More detailed financial information, including operating segment income, investment composition, 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. and product distribution by channel, can be found in AmerUs Group's Financial Supplement, which is available by accessing the company's web site at www.amerus.com or by contacting the company's investor relations Investor relations The process by which the corporation communicates with its investors. department. AmerUs Group Co. is an Iowa corporation located in Des Moines, Iowa “Des Moines” redirects here. For other uses, see Des Moines (disambiguation). Des Moines (pronounced /dɪˈmɔɪn/ in English, , engaged through its subsidiaries in the business of marketing, underwriting Underwriting 1. The process by which investment bankers raise investment capital from investors on behalf of corporations and governments that are issuing securities (both equity and debt). 2. The process of issuing insurance policies. and distributing individual life insurance and annuity products in 49 states, the District of Columbia District of Columbia, federal district (2000 pop. 572,059, a 5.7% decrease in population since the 1990 census), 69 sq mi (179 sq km), on the east bank of the Potomac River, coextensive with the city of Washington, D.C. (the capital of the United States). and the U.S. Virgin Islands. Its wholly-owned subsidiaries include AmerUs Life Insurance Company and AmVestors Financial Corporation, with three wholly-owned operating subsidiaries An operating subsidiary is a business term frequently used within the United States railroad industry. In the case of a railroad, it refers to a company that is a subsidiary but operates with its own identity and rolling stock. -- American American, river, 30 mi (48 km) long, rising in N central Calif. in the Sierra Nevada and flowing SW into the Sacramento River at Sacramento. The discovery of gold at Sutter's Mill (see Sutter, John Augustus) along the river in 1848 led to the California gold rush of Investors Life Insurance Company, Inc., Delta Life and Annuity Company and Financial Benefit Life Insurance Company. As of March 31, 2001, AmerUs Group's total assets were $11.8 billion and 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. totaled $876.0 million, including accumulated other comprehensive income In 1997 the Financial Accounting Standards Board issued a Statement on Financial Accounting Standards entitled “Comprehensive Income”. This statement required all income statement items to be reported either as a regular item in the income statement and or a special item as . Certain statements made by the company which are not historical facts may be considered forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. , including, without limitation, statements as to sales targets, sales and earnings trends, management's beliefs, expectations, goals and opinions, which are based upon a number of assumptions concerning future conditions that ultimately may prove to be inaccurate. Such forward-looking statements are subject to risks and uncertainties and may be affected by various factors that may cause actual results to differ materially from those in the forward-looking statements. For further information which could cause actual results to differ from the company's expectations as well as other factors which could affect the company's financial statements, please refer to the company's filings with the Securities and Exchange Commission. AmerUs Group Co. Selected Financial Data First Quarter 2001 For more detailed financial information, including operating segment income, investment composition, operating expenses and product distribution by channel, please refer to AmerUs Group's Financial Supplement, which is available by accessing the company's web site at www.amerus.com or by contacting the company's investor relations department. FOR CERTAIN ITEMS, FIRST QUARTER 2001 RESULTS ARE NOT COMPARABLE TO FIRST QUARTER 2000 RESULTS DUE TO THE DEMUTUALIZATION OF THE COMPANY IN 2000. THE ITEMS PRIMARILY AFFECTED ARE NET INCOME, ADJUSTED NET OPERATING INCOME Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. , AND EARNINGS PER SHARE. FOR AFFECTED ITEMS, A MORE RELEVANT COMPARISON IS TO THE FORMER PUBLIC COMPANY, AMERUS LIFE HOLDINGS, INC. PLEASE REFER TO THE FIRST QUARTER 2000 FINANCIAL SUPPLEMENT.
AmerUs Group Co.
Adjusted Net Operating Income
For the Three Months Ended
March 31,
2001 2000
--------------------------
($ in thousands, except per share data)
Net Income $ 11,636 $ 14,780
Net non-core realized (gains) losses (A) 4,817 (1,357)
Net amortization of deferred policy
acquisition costs due to non-core
realized gains or losses (B) (1,506) 234
Reorganization costs (C) - 1,021
Discontinued operations (D) (414) 205
Cumulative effect of change in
accounting for derivatives (E) 8,236 -
-------------------------
Adjusted Net Operating Income $ 22,769 $ 14,883
=========================
Adjusted Net Operating Income
per common share (F):
Basic $ 0.76 $ 0.86
=========================
Diluted $ 0.75 $ 0.85
=========================
Weighted average common shares outstanding:
Basic (F) 29,973,039 17,390,165
=========================
Diluted 30,365,387 17,453,374
=========================
(A) Represents total realized gains or losses on investments less core
realized gains or losses (defined as gains or losses on the
convertible preferred stock and bond portfolio) adjusted for
income taxes and minority interest on such amounts. Non-core
realized gains or losses may vary widely between periods. Such
amounts are determined by management's timing of individual
transactions and do not necessarily correspond to the underlying
operating trends.
(B) Represents amortization of deferred policy acquisition costs on
the non-core realized gains or losses that are included in product
margins, adjusted for income taxes and minority interest on such
amounts.
(C) Represents costs directly related to the Company's reorganization
and merger with ALHI, adjusted for minority interest on such
amounts. These costs consist primarily of legal, actuarial and
consulting expenses.
(D) Represents the net income from the Company's discontinued
operations.
(E) Represents the cumulative effect of change in accounting for
derivatives, net of tax, resulting from the Company's adoption of
Statements of Financial Accounting Standards (SFAS) Nos. 133 and
138. These Statements are effective for fiscal years beginning
after June 15, 2000.
(F) The Company was formed in 1996 as a mutual holding company and
therefore, had no shares of common stock outstanding until its
demutualization on September 20, 2000. At that time, the Company
distributed 17.4 million shares of its common stock to its former
members and exchanged its common stock for the 12.9 million shares
of common stock held by the public in ALHI on a one-for-one basis.
Adjusted net operating income per share has been calculated on the
basis that the 17.4 million shares distributed to members were
outstanding from January 1, 1999 and the shares exchanged for ALHI
shares were outstanding from the date of demutualization.
AMERUS GROUP CO.
CONSOLIDATED STATEMENTS OF INCOME
($ in thousands, except per share data)
(Unaudited)
Three Months Ended
March 31,
2001 2000
------------------------
Revenues:
Insurance premiums $66,592 $69,125
Universal life and annuity product charges 24,266 23,277
Net investment income 181,128 173,612
Realized/unrealized gains (losses) on
investments(G) (39,835) 2,903
Other income 10,332 6,533
------------------------
242,483 275,450
------------------------
Benefits and expenses:
Policyowner benefits(G) 129,909 163,704
Underwriting, acquisition and other expenses 31,334 26,997
Reorganization costs -- 1,210
Amortization of deferred policy acquisition
costs and value of business acquired(G) 25,271 26,047
Dividends to policyowners 19,158 16,169
------------------------
205,672 234,127
------------------------
Income from continuing operations 36,811 41,323
Interest expense 7,332 7,145
------------------------
Income before income tax expense and minority 29,479 34,178
interest
Income tax expense 10,021 12,587
Minority interest -- 6,606
------------------------
Net income from continuing operations 19,458 14,985
Discontinued operations (net of tax):
Income (loss) from discontinued operations 414 (205)
------------------------
Net income before cumulative effect of change
in accounting for derivatives 19,872 14,780
Cumulative effect of change in accounting for
derivatives, net of tax (8,236) --
------------------------
Net income $11,636 $14,780
========================
Net income from continuing operations per
common share:
Basic $0.65 $0.86
========================
Diluted $0.64 $0.86
========================
Net income per common share:
Basic $0.39 $0.85
========================
Diluted $0.38 $0.85
========================
Weighted average common shares outstanding:
Basic 29,973,039 17,390,165
========================
Diluted 30,365,387 17,453,374
========================
(G) Line items impacted by derivative activity related to the
Company's adoption of SFAS 133. Please refer to page 18 of AmerUs
Group's First Quarter 2001 Financial Supplement for additional
information.
AMERUS GROUP CO.
CONSOLIDATED BALANCE SHEETS
($ in thousands)
March 31, December 31,
2001 2000
------------------------
(unaudited)
Assets
Investments:
Securities available-for-sale at fair value:
Fixed maturity securities $8,612,195 $8,261,647
Equity securities 162,247 152,903
Short-term investments 13,198 20,861
Fixed maturity securities held for trading
purposes 36,441 --
Loans 563,638 534,857
Real estate 1,925 3,226
Policy loans 311,123 312,662
Other investments 294,868 320,650
------------------------
Total investments 9,995,635 9,606,806
Cash and cash equivalents 44,517 65,485
Accrued investment income 123,356 114,034
Premiums, fees and other receivables 8,086 9,652
Income taxes receivable 2,987 --
Reinsurance receivables 8,941 6,529
Deferred policy acquisition costs 423,293 437,312
Value of business acquired 430,601 468,430
Goodwill 186,420 183,491
Property and equipment 55,287 56,101
Other assets 483,164 491,296
Assets of discontinued operations 31,401 32,386
------------------------
Total assets $11,793,688 $11,471,522
========================
AMERUS GROUP CO.
CONSOLIDATED BALANCE SHEETS
($ in thousands)
March 31, December 31,
2001 2000
--------------------------
(unaudited)
Liabilities and Stockholders' Equity
Policy reserves and policyowner funds:
Future life and annuity policy benefits $9,712,279 $9,482,625
Policyowner funds 324,906 325,251
--------------------------
10,037,185 9,807,876
Accrued expenses and other liabilities 225,412 216,451
Dividends payable to policyowners 180,080 158,473
Policy and contract claims 11,815 11,890
Income taxes payable -- 8,825
Deferred income taxes 46,954 5,904
Notes and contracts payable 199,507 215,627
Liabilities of discontinued operations 19,065 14,806
--------------------------
Total liabilities 10,720,018 10,439,852
Company-obligated mandatorily redeemable
preferred capital securities of subsidiary
trusts holding solely junior subordinated
debentures of the Company 197,691 197,691
Stockholders' equity:
Preferred Stock, no par value, 20,000,000
shares authorized, none issued -- --
Common Stock, no par value, 230,000,000
shares authorized: 30,018,217 shares
issued and outstanding in 2001 (net of
3,893 treasury shares) and 30,011,034
shares issued and outstanding in 2000 30,018 30,011
Paid-in capital 810,079 809,894
Accumulated other comprehensive income
(loss) 18,984 (11,164)
Unearned compensation (122) (146)
Unallocated ESOP shares (683) (683)
Retained earnings 17,703 6,067
--------------------------
Total stockholders' equity 875,979 833,979
--------------------------
Total liabilities and stockholders'
equity $11,793,688 $11,471,522
==========================
AMERUS GROUP CO.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
March 31, 2001
($ in thousands)
Accumu-
lated
Other
Compre-
Additional hensive Unearned
Common Paid-In Income Compen-
Stock Capital (Loss) sation
----------- ---------- --------- ---------
Balance at December 31, 1998 $ - $ - $ 16,329 $ (137)
1999:
Net income - - - -
Net unrealized gain (loss)
on securities - - (95,147) -
Stock issued under various
incentive plans, net of
forfeitures - - - (48)
Retirement of company-
obligated mandatorily
redeemable preferred
capital securities - - - -
Adoption of leveraged ESOP - - - -
Allocation of shares in
leveraged ESOP - - - -
Minority interest
ownership changes - - 190 (2)
----------- ---------- --------- ---------
Balance at December 31, 1999 $ - $ - $(78,628) $ (187)
2000:
Net income - - - -
Net unrealized gain (loss)
on securities - - 67,641 -
Stock issued under various
incentive plans, net of
forfeitures 6 169 - 105
Dividends declared on
common stock - - - -
Allocation of shares in
leveraged ESOP - 600 - -
Minority interest
ownership changes - - (177) -
Acquisition of minority
interest 12,615 285,405 - -
Demutualization of AmerUs
Group 17,390 518,535 - (64)
Other - 5,185 - -
----------- ---------- --------- ---------
Balance at December 31, 2000 $ 30,011 $ 809,894 $(11,164) $ (146)
=========== ========== ========= =========
2001:
Net income - - - -
Change in accounting for
derivatives - - 2,661 -
Net unrealized gain (loss)
on securities - - 30,296 -
Net unrealized gain (loss)
on derivatives - - (2,809) -
Stock issued under various
incentive plans, net of
forfeitures 17 474 - 24
Purchase of treasury stock (10) (289) - -
----------- ---------- --------- ---------
Balance at March 31, 2001 $ 30,018 $ 810,079 $ 18,984 $ (122)
=========== ========== ========= =========
Total
Unallocated Stock-
ESOP Unassigned Retained holders'
Shares Surplus Earnings Equity
----------- ---------- --------- ---------
Balance at December 31, 1998 $ - $ 800,869 $ - $817,061
1999:
Net income - 38,436 - 38,436
Net unrealized gain (loss)
on securities - - - (95,147)
Stock issued under various
incentive plans, net of
forfeitures - 473 - 425
Retirement of company-
obligated mandatorily
redeemable preferred
capital securities - 205 - 205
Adoption of leveraged ESOP (1,028) - - (1,028)
Allocation of shares in
leveraged ESOP 231 74 - 305
Minority interest
ownership changes - 905 - 1,093
----------- ---------- --------- ---------
Balance at December 31, 1999 $ (797) $ 840,962 $ - $761,350
2000:
Net income - 33,801 18,039 51,840
Net unrealized gain (loss)
on securities - - - 67,641
Stock issued under various
incentive plans, net of
forfeitures - 273 - 553
Dividends declared on
common stock - - (11,972) (11,972)
Allocation of shares in
leveraged ESOP 695 - - 1,295
Minority interest
ownership changes (2) 94 - (85)
Acquisition of minority
interest - - - 298,020
Demutualization of AmerUs
Group (579) (875,130) - (339,848)
Other - - - 5,185
----------- ---------- --------- ---------
Balance at December 31, 2000 $ (683) $ - $ 6,067 $833,979
=========== ========== ========= =========
2001:
Net income - - 19,872 19,872
Change in accounting for
derivatives - - (8,236) (5,575)
Net unrealized gain (loss)
on securities - - - 30,296
Net unrealized gain (loss)
on derivatives - - - (2,809)
Stock issued under various
incentive plans, net of
forfeitures - - - 515
Purchase of treasury stock - - - (299)
----------- ---------- --------- ---------
Balance at March 31, 2001 $ (683) $ - $ 17,703 $875,979
=========== ========== ========= =========
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