AmerUs Group Reports Record Fourth Quarter Operating Earnings Per Share of $0.73.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)--Feb. 5, 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 ), successor 1. SuccessoR - A language for distributed computing derived from SR. ["SuccessoR: Refinements to SR", R.A. Olsson et al, TR 84-3, U Arizona 1984]. 2. successor - daughter to AmerUs Life Holdings, Inc., today announced record fourth 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 , resulting in earnings 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 of $0.73 versus $0.69 per diluted share for same period in 1999. Fourth quarter 2000 adjusted net operating earnings totaled $22.1 million, compared to $12.1 million in 1999. For the year, adjusted net operating earnings totaled $62.3 million versus $49.1 million in 1999. Diluted operating earnings per share rose from $2.81 in 1999 to $2.96 in 2000. "These results reflect a truly outstanding year of accomplishments," 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've we've Contraction of we have. we've have continued to grow our business, exceeded our earnings goal for 2000, and completed the most significant organizational change in our company's history. Key drivers of our results were aggressive spread management, continued growth in assets due to strong sales growth, and the elimination of minority interest as a result of the 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. ." Net Income Net income for the quarter increased to $18.0 million, or $0.60 per diluted share, from $3.9 million, or $0.22 per diluted share in the prior year. For the year, net income increased to $51.8 million versus $38.4 million in 1999. Diluted net income per share rose from $2.20 in 1999 to $2.46 in 2000. The increase was primarily due to lower 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 the elimination of minority interest related to the company's recent demutualization. Net Investment Income Net investment income for the fourth quarter of 2000 grew to $150.6 million, an increase of nearly four percent from $145.4 million a year ago. For the year, net investment income grew to $586.6 million compared to $557.3 million in 1999. The improvement was primarily attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to higher invested assets, which increased by more than $425 million. The effective yield on the entire investment portfolio increased slightly to 6.92 percent in 2000, compared to 6.91 percent in 1999. Strong 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 fourth quarter increased by more than 65 percent to $439 million, compared to $266 million for the same period in 1999. Year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. , annuity sales increased 58 percent to nearly $1.5 billion, compared to $939 million in 1999. The traditional fixed and multi-choice annuities showed the most growth during the quarter. Life Sales During the fourth quarter, repetitive life sales increased more than six percent to $11.4 million, compared to $10.7 million for the comparable period of 1999. Year-to-date, life sales were 4.7 percent over 1999 levels, with life sales of $39.5 in 2000, compared to $37.7 million in 1999. "Our life sales showed continued improvement during the quarter, driven once again by our equity-linked universal life products. As consumer demand continues to shift away from traditional whole life products, we expect to see continued growth in our equity-linked life products," said Brooks. AmerUs Group / 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 Merger Combination Substantial progress has been made towards completing the combination with Indianapolis Life Insurance Company (Indianapolis Life). Meeting materials related to special shareholder and member meetings are expected to be mailed in about two weeks and the company expects the transaction to close in the second quarter of 2001, subject to regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. , member and shareholder approvals. Corporate Actions On October October: see month. 23, 2000, the company began distributing cash, policy credits and common stock with a combined value of nearly $800 million to its former members in connection with the company's demutualization. The distribution consisted of 17.4 million shares of common stock valued at $452 million and nearly $340 million in cash and policy credits. Additionally, the company's board of directors declared de·clare v. de·clared, de·clar·ing, de·clares v.tr. 1. To make known formally or officially. See Synonyms at announce. 2. To state emphatically or authoritatively; affirm. 3. an annual dividend of $0.40 per share to shareholders of record on November November: see month. 17, 2000, payable on November 30, 2000. Conference Call, Audio Replay and Additional Financial Information Interested parties may listen to a conference call with AmerUs Group's management discussing fourth quarter 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 February February: see month. 6, 2001. An audio replay of AmerUs Group's fourth quarter earnings 2000 conference call will be available at 11 a.m. CDT on Tuesday Tuesday: see week. , February 6, 2001, through Tuesday, February 13, 2001. The call can be accessed by dialing 800-801-6000 (international: 913-383-5731), PIN# 3096. More detailed financial information, including investment composition, operating expenses 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. 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 December December: see month. 31, 2000, AmerUs Group's total assets were $11.5 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 $834.0 million, including accumulated other comprehensive income In 1997 the Financial Accounting Standards Board issued a Statement on Financial Accounting Standards entitled “Comprehensive Income”. This statement required all income statement items to be reported either as a regular item in the income statement and or a special item as . Certain statements made by the company which are not historical facts may be considered forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. , including, without limitation, statements as to sales targets, sales and earnings trends, management's beliefs, expectations, goals and opinions, which are based upon a number of assumptions concerning future conditions that ultimately may prove to be inaccurate. Such forward-looking statements are subject to risks and uncertainties and may be affected by various factors that may cause actual results to differ materially from those in the forward-looking statements. For further information which could cause actual results to differ from the company's expectations as well as other factors which could affect the company's financial statements, please refer to the company's filings with the Securities and Exchange Commission.
AmerUs Group Co.
Adjusted Net Operating Income
For the Three Months Ended For the Year Ended
December 31, December 31,
2000 1999 2000 1999
--------------------- -------------------
($ in thousands,
except per share data)
Net Income $18,039 $3,913 $51,840 $38,436
Net non-core realized
(gains) losses (A) 4,868 5,797 5,153 6,030
Net amortization of deferred policy
acquisition costs due to
non-core realized gains
or losses (B) (1,597) 150 (4,028) 805
Reorganization costs (C) 828 4,449 10,063 6,322
Discontinued operations (D) (62) (2,196) (717) (2,504)
--------------------- -------------------
Adjusted Net
Operating Income $22,076 $12,113 $62,311 $49,089
===================== ===================
Adjusted Net Operating Income
per common share:
Basic $0.74 $0.70 $2.98 $2.82
===================== ===================
Diluted $0.73 $0.69 $2.96 $2.81
===================== ===================
Weighted average common
shares outstanding (E):
Basic 29,933,019 17,390,165 20,922,371 17,390,165
===================== ======================
Diluted 30,239,946 17,463,260 21,035,518 17,467,132
===================== ======================
(A) Represents total realized gains or losses on investments less
core realized gains or losses (defined as gains or losses on
the convertible preferred stock and bond portfolio) adjusted
for income taxes and minority interest on such amounts.
Non-core realized gains or losses may vary widely between
periods. Such amounts are determined by management's timing of
individual transactions and do not necessarily correspond to
the underlying operating trends.
(B) Represents amortization of deferred policy acquisition costs
on the non-core realized gains or losses that are included in
product margins, adjusted for income taxes and minority
interest on such amounts.
(C) Represents costs directly related to the Company's
reorganization and merger with ALHI, adjusted for minority
interest on such amounts. These costs consist primarily of
legal, actuarial and consulting expenses.
(D) Represents the net income from the Company's discontinued
operations.
(E) The Company was formed in 1996 as a mutual holding company and
therefore, had no shares of common stock outstanding until its
demutualization on September 20, 2000. At that time, the
Company distributed 17.4 million shares of its common stock to
its former members and exchanged its common stock for the 12.9
million shares of common stock held by the public in ALHI on a
one-for-one basis. Adjusted net operating income per share has
been calculated on the basis that the 17.4 million shares
distributed to members were outstanding from January 1, 1999
and the shares exchanged for ALHI shares were outstanding from
the date of demutualization.
AMERUS GROUP CO.
CONSOLIDATED STATEMENTS OF INCOME
($ in thousands, except per share data)
Three Months Ended Year Ended
December 31, December 31,
2000 1999 2000 1999
--------------------- -------------------
Revenues:
Insurance premiums $23,516 $22,480 $88,857 $89,521
Universal life and
annuity product charges 21,965 22,849 87,455 78,334
Net investment income 150,635 145,354 586,619 557,280
Realized gains (losses)
on investments (7,744) (8,913) (8,620) (2,095)
Other income 11,903 6,291 34,575 20,291
Contribution from the
Closed Block 7,377 6,045 24,503 25,166
------------------- -------------------
207,652 194,106 813,389 768,497
------------------- -------------------
Benefits and expenses:
Policyowner benefits 120,736 118,560 451,223 446,086
Underwriting, acquisition
and other expenses 31,905 32,390 122,052 116,367
Reorganization costs 828 5,189 11,265 7,062
Amortization of deferred policy
acquisition costs and value of
business acquired 21,476 15,612 77,796 67,780
Dividends to policyowners 1,677 1,107 6,014 4,526
------------------- -------------------
176,622 172,858 668,350 641,821
------------------- -------------------
Income from continuing
operations 31,030 21,248 145,039 126,676
Interest expense 7,293 7,015 29,723 28,983
------------------- -------------------
Income before income tax expense
and minority interest 23,737 14,233 115,316 97,693
Income tax expense 5,760 5,703 42,516 33,654
Minority interest - 6,813 21,677 28,107
------------------- -------------------
Net income from continuing
operations 17,977 1,717 51,123 35,932
Discontinued operations
(net of tax):
Income (loss) from
discontinued operations 62 2,196 717 2,504
------------------- -------------------
Net income $18,039 $3,913 $51,840 $38,436
=================== ===================
Net income from continuing
operations per common share:
Basic $0.60 $0.10 $2.44 $2.07
=================== ===================
Diluted $0.59 $0.10 $2.43 $2.06
=================== ===================
Net income per common share:
Basic $0.60 $0.23 $2.48 $2.21
=================== ===================
Diluted $0.60 $0.22 $2.46 $2.20
=================== ===================
Weighted average common shares
outstanding:
Basic 29,933,019 17,390,165 20,922,371 17,390,165
===================== ========== ==========
Diluted 30,239,946 17,463,260 21,035,518 17,467,132
===================== ========== ==========
AMERUS GROUP CO.
CONSOLIDATED BALANCE SHEETS
December 31, 2000 and 1999
($ in thousands)
2000 1999
-----------------------
Assets
Investments:
Securities available-for-sale at fair value:
Fixed maturity securities $7,070,056 $6,680,755
Equity securities 152,903 45,268
Short-term investments 20,861 155
Loans 534,857 608,917
Real estate 3,226 45,757
Policy loans 111,570 109,864
Other investments 317,716 292,689
-----------------------
Total investments 8,211,189 7,783,405
Cash and cash equivalents 62,460 291,788
Accrued investment income 97,223 92,197
Premiums, fees and other receivables 2,590 9,798
Reinsurance receivables 6,529 17,535
Deferred policy acquisition costs 389,187 529,663
Value of business acquired 396,600 230,542
Goodwill 183,491 206,324
Property and equipment 56,101 51,626
Deferred income taxes - 76,457
Other assets 449,410 357,509
Closed Block assets 1,584,357 1,412,622
Assets of discontinued operations 32,386 38,241
-----------------------
Total assets $11,471,523 $11,097,707
=======================
AMERUS GROUP CO.
CONSOLIDATED BALANCE SHEETS
December 31, 2000 and 1999
($ in thousands)
2000 1999
-----------------------------
Liabilities and Stockholders' Equity
Policy reserves and policyowner funds:
Future life and annuity
policy benefits $7,827,841 $7,390,991
Policyowner funds 320,170 282,026
-----------------------------
8,148,011 7,673,017
Accrued expenses and other liabilities 186,904 157,480
Dividends payable to policyowners 3,870 2,248
Policy and contract claims 6,395 12,221
Income taxes payable 3,683 21,932
Deferred income taxes 5,904 -
Notes and contract payable 215,627 196,263
Closed Block liabilities 1,854,652 1,756,064
Liabilities of discontinued operations 14,806 10,340
-----------------------------
Total liabilities 10,439,852 9,829,565
Minority interest - 309,101
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: 30,011,034 shares
issued and outstanding in 2000 30,011 -
Paid-in capital 809,894 -
Accumulated other comprehensive
income (loss) (11,164) (78,628)
Unearned compensation (146) (187)
Unallocated ESOP shares (683) (797)
Unassigned surplus - 840,962
Retained earnings 6,067 -
-----------------------------
Total stockholders' equity 833,979 761,350
Total liabilities and
stockholders' equity $11,471,522 $11,097,707
=============================
AMERUS GROUP CO.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
Years ended December 31, 2000, 1999 and 1998
($ in thousands)
Accum-
ulated
Other
Compre-
Additional hensive Unearned
Common Paid-In Income Compen-
Stock Capital (Loss) sation
------- ---------- ------- --------
Balance at December 31, 1997 $ - $ - $26,853 $ -
1998:
Net income - - - -
Net unrealized gain (loss)
on securities - - (14,492) -
Stock issued under various incentive
plans, net of forfeitures - - - (137)
Retirement of company-obligated
mandatorily redeemable preferred
capital securities - - - -
Minority interest
ownership changes - - 3,968 -
----- ------ -------- ------
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) $(146)
======= ======== ========= ======
AMERUS GROUP CO.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
Years ended December 31, 2000, 1999 and 1998
($ in thousands)
Total
Unallocated Stock-
ESOP Unassigned Retained holders'
Shares Surplus Earnings Equity
------------ ---------- --------- --------
Balance at December 31, 1997 $ - $696,207 $ - $723,060
1998:
Net income - 103,499 - 103,499
Net unrealized gain (loss)
on securities - - - (14,492)
Stock issued under various
incentive plans,
net of forfeitures - 371 - 234
Retirement of
company-obligated
mandatorily redeemable
preferred capital
securities - 1,668 - 1,668
Minority interest
ownership changes - (876) - 3,092
--------- ---------- --------- ---------
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
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