AmerUs Group Reports Record Fourth Quarter Operating Income of $33.2 Million; $114.0 Million For Full Year.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, 2002 AmerUs Group Co. (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 fourth quarter 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. of $33.2 million, or $0.79 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 with $22.1 million, or $0.73 per diluted share, in the fourth quarter of 2000. Adjusted net operating income for 2001 was $114.0 million, or $3.05 per diluted share, compared with $62.3 million, or $2.96 per diluted share, a year ago. Adjusted net operating income excludes items such as net non-core realized capital gains and losses, restructuring charges restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. , extraordinary losses and the cumulative effect of accounting changes. "These results demonstrate that our focus on core businesses is working," 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. "In 2002, we will continue to execute To run a program, which causes the computer to carry out its instructions. See executable code, instruction and EXE file. execute - execution our strategy of expanding distribution, growing assets, improving margins and reducing expenses." 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 $19.1 million, or $0.45 per diluted share, compared with $18.0 million, or $0.59 per diluted share, for the fourth quarter of 2000. Year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. net income from continuing operations was $79.3 million, or $2.12 per diluted share, compared with $51.1 million, or $2.43 per diluted share, a year ago. 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 28 percent to $562 million, compared with $439 million for the fourth quarter of 2000. Year-to-date, annuity sales increased $481 million or 32 percent to $1,962 million, compared to $1,482 million in 2000. "AmerUs Annuity Group had another strong year, surpassing their goal of $1.8 billion in annuity production," said Brooks. "We anticipate sales of asset accumulation Accumulation 1) In the context of individual investing, it is the process of contributing cash to invest in securities over a period of time in order to build a portfolio of desired value. Dividends and capital gains are also reinvested during this process. products to be in the $1.8 - $2.0 billion range in 2002." Excellent Life Sales Results During the fourth quarter, fixed life sales increased more than 185 percent to $32.5 million, compared to $11.4 million in the fourth quarter of 2000. For the year, fixed life sales increased nearly 106 percent to $81.3 million, compared to $39.5 million a year ago. "These are truly outstanding sales results and give further evidence of the success of the 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 acquisition," said Brooks. "These results demonstrate that we are a dramatically different company than we were a year ago." Net Investment Income Net investment income was $253.0 million for the fourth quarter of 2001 compared with $180.1 million for the same period in 2000. The increase was primarily attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to the acquisition of Indianapolis Life and higher invested assets. Net investment income in 2001 was $873.2 million compared to $699.5 million in 2000. The portfolio yield during the fourth quarter was 6.61 percent, compared with 7.34 percent in the fourth quarter of 2000. For the year, the portfolio yield was 6.72 percent, compared with 7.10 percent in 2000. The lower yields were primarily due to the acquisition of Indianapolis Life, which holds a significant amount of convertible securities. Corporate Actions During the fourth quarter, the company repurchased 176,200 shares of its common stock at an average price of $34.27 per share. AmerUs Group currently has board authorization The right or permission to use a system resource; the process of granting access. See access control. to repurchase re·pur·chase tr.v. re·pur·chased, re·pur·chas·ing, re·pur·chas·es To buy (something) again. n. The act of buying something that one previously sold or owned. Noun 1. approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 1.6 million additional shares. Conference Call, Audio Replay and Additional Financial Information Interested parties may listen to a conference call with AmerUs Group's management discussing fourth quarter 2001 results by calling 800-937-6563 (international 801-983-4013) at 10:30 a.m. EST EST electroshock therapy. EST abbr. electroshock therapy on February February: see month. 6, 2002. An audio replay of AmerUs Group's call will be available at 1 p.m. EST P.M. also p.m. or p.m. abbr. post meridiem Usage Note: By definition, 12 a.m. , February 6, 2002, through February 28, 2002. The replay can be accessed by dialing 800-839-0860 (international: 402-220-1490), PIN 1313. 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 and 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. individual life insurance and annuity products in 50 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 subsidiaries include: AmerUs Life Insurance Company, 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., Bankers Life Insurance Company of New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of , Delta Life and Annuity Company, Financial Benefit Life Insurance Company, IL Annuity and Insurance Company, Indianapolis Life Insurance Company and Western Security Life Insurance Company. As of December December: see month. 31, 2001, AmerUs Group's total assets were $18.3 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 $1,236.2 million, including accumulated other comprehensive income In 1997 the Financial Accounting Standards Board issued a Statement on Financial Accounting Standards entitled “Comprehensive Income”. This statement required all income statement items to be reported either as a regular item in the income statement and or a special item as . Certain statements made by the company which are not historical facts may be considered forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. , including, without limitation, statements as to sales targets, sales and earnings trends, management's beliefs, expectations, goals and opinions, which are based upon a number of assumptions concerning future conditions that ultimately may prove to be inaccurate. Such forward-looking statements are subject to risks and uncertainties and may be affected by various factors that may cause actual results to differ materially from those in the forward-looking statements. For further information which could cause actual results to differ from the company's expectations as well as other factors which could affect the company's financial statements, please refer to the company's filings with the Securities and Exchange Commission.
AMERUS GROUP CO.
ADJUSTED NET OPERATING INCOME
($ in thousands, except share data)
(Unaudited)
Adjusted net operating income reflects net income adjusted to
eliminate certain items, such as non-core realized gains and losses,
restructuring costs and discontinued operations. Adjusted net
operating income shown below does not constitute our net income
computed in accordance with GAAP.
For The 3 Months Ended For The Year Ended
December 31, December 31,
2001 2000 2001 2000
----------------------- -----------------------
Net Income $ 19,534 $ 18,039 $ 72,907 $ 51,840
Net non-core realized
(gains) losses(A) 10,896 4,868 25,475 5,153
Net amortization of
deferred policy
acquisition costs due
to non-core realized
gains or losses(B) 2,311 (1,597) (3,613) (4,028)
Net effect of accounting
differences from the
adoption of SFAS 133(C) (878) - 6,417 -
Demutualization costs(D) 518 828 969 10,063
Restructuring costs(E) 1,287 - 5,476 -
Discontinued operations(F) (446) (62) (1,820) (717)
Cumulative effect of
change in accounting
for derivatives(G) - - 8,236 -
----------------------- -----------------------
Adjusted Net Operating
Income $ 33,222 $ 22,076 $ 114,047 $ 62,311
======================= =======================
Adjusted Net Operating
Income per common
share(H):
Basic $ 0.80 $ 0.74 $ 3.09 $ 2.98
======================= =======================
Diluted $ 0.79 $ 0.73 $ 3.05 $ 2.96
======================= =======================
Weighted average
common shares
outstanding(H):
Basic 41,741,649 29,933,019 36,949,198 20,922,371
======================= =======================
Diluted 42,288,468 30,239,946 37,453,428 21,035,518
======================= =======================
(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 our
product margins, adjusted for income taxes and minority interest
on such amounts.
(C) Represents the net effect of Statement of Financial Accounting
Standard (SFAS) No. 133, "Accounting for Derivative Instruments
and Hedging Activities," related accounting entries, adjusted for
income taxes. The accounting entries consist of market value
adjustments on trading securities, derivatives, certain annuity
contracts, and the associated change in amortization of deferred
acquisition costs resulting from such adjustments.
(D) For the 2001 periods presented, represents costs directly related
to ILICO's demutualization. For the 2000 periods presented,
represents costs directly related to our demutualization and
merger with ALHI, adjusted for minority interest on such amounts.
The costs consist primarily of legal, actuarial and consulting
expenses.
(E) Represents costs of restructuring our life insurance and annuity
operations to eliminate duplicative functions, adjusted for income
taxes. The costs consist primarily of severance and termination
benefits.
(F) Represents the net income (loss) from our discontinued operations.
(G) Represents the cumulative effect of change in accounting for
derivatives, net of income taxes, as of January 1, 2001, resulting
from the Company's adoption of SFAS No. 133. This statement is
effective for fiscal years beginning after June 15, 2000.
(H) Our predecessor, AMHC, was originally formed in 1996 as a mutual
holding company and, therefore, had no shares of common stock
outstanding until the demutualization of our group on September
20, 2000. On September 20, 2000, we distributed 17.4 million
shares of our common stock to our former members and exchanged our
common stock for the 12.9 million shares of common stock held by
the public in ALHI, our former subsidiary and another of our
predecessor entities, on a one-for-one basis. Our operating income
primarily reflects the operating income of ALHI. Therefore,
adjusted net operating income per share was calculated based on
the number of shares of stock of ALHI we owned from January 1,
1996 through September 20, 2000. Since then, adjusted net
operating income per share has been calculated based on the shares
of our common shares actually outstanding.
AMERUS GROUP CO.
CONSOLIDATED STATEMENTS OF INCOME
($ in thousands, except share data)
For The 3 Months Ended For The Year Ended
December 31, December 31,
2001 2000 2001 2000
----------------------- -----------------------
(unaudited) (unaudited)
Revenues:
Insurance premiums $ 92,249 $ 70,089 $ 313,650 $ 274,207
Universal life and
annuity product
charges 39,535 24,997 146,055 99,940
Net investment income 253,010 180,101 873,174 699,525
Realized/unrealized
gains (losses) on
investments 6,680 (17,423) (90,629) (28,975)
Other income 11,460 11,903 45,204 34,575
----------------------- -----------------------
402,934 269,667 1,287,454 1,079,272
----------------------- -----------------------
Benefits and expenses:
Policyowner benefits 255,056 162,428 760,748 632,413
Underwriting,
acquisition and other
expenses 33,216 31,647 140,471 123,467
Demutualization costs 518 828 969 11,265
Restructuring costs 2,039 - 8,566 -
Amortization of deferred
policy acquisition
costs and value of
business acquired 46,387 25,622 132,899 92,750
Dividends to
policyowners 30,529 18,112 98,945 74,338
----------------------- -----------------------
367,745 238,637 1,142,598 934,233
----------------------- -----------------------
Income from continuing
operations 35,189 31,030 144,856 145,039
Interest expense 5,295 7,293 26,011 29,723
----------------------- -----------------------
Income before income
tax expense and
minority interest 29,894 23,737 118,845 115,316
Income tax expense 10,806 5,760 39,522 42,516
Minority interest - - - 21,677
----------------------- -----------------------
Net income from
continuing operations 19,088 17,977 79,323 51,123
Discontinued operations
(net of tax):
Income (loss) from
discontinued
operations 446 62 1,820 717
----------------------- -----------------------
Net income before
cumulative effect of
change in accounting
for derivatives 19,534 18,039 81,143 51,840
Cumulative effect of
change in accounting
for derivatives, net
of tax - - (8,236) -
----------------------- -----------------------
Net income $ 19,534 $ 18,039 $ 72,907 $ 51,840
======================= =======================
Net income from
continuing operations
per common share:
Basic $ 0.46 $ 0.60 $ 2.15 $ 2.44
======================= =======================
Diluted $ 0.45 $ 0.59 $ 2.12 $ 2.43
======================= =======================
Net income from
discontinued operations
per common share:
Basic $ 0.01 $ - $ 0.05 $ 0.03
======================= =======================
Diluted $ 0.01 $ - $ 0.05 $ 0.03
======================= =======================
Net income per common
share:
Basic $ 0.47 $ 0.60 $ 1.97 $ 2.48
======================= =======================
Diluted $ 0.46 $ 0.60 $ 1.95 $ 2.46
======================= =======================
Weighted average common
shares outstanding:
Basic 41,741,649 29,933,019 36,949,198 20,922,371
======================= =======================
Diluted 42,288,468 30,239,946 37,453,428 21,035,518
======================= =======================
AMERUS GROUP CO.
CONSOLIDATED BALANCE SHEETS
($ in thousands)
December 31,
2001 2000
-------------------------
(unaudited)
Assets
Investments:
Securities available-for-sale at fair value:
Fixed maturity securities $ 11,012,726 $ 8,261,647
Equity securities 55,865 152,903
Short-term investments 14,881 20,861
Securities held for trading purposes:
Fixed maturity securities 2,175,106 -
Equity securities 12,013 -
Short-term investments 4,212 -
Loans 944,532 534,857
Real estate 1,405 3,226
Policy loans 506,318 312,662
Other investments 300,676 320,650
-------------------------
Total investments 15,027,734 9,606,806
Cash and cash equivalents 179,376 65,485
Accrued investment income 174,238 114,034
Premiums, fees and other receivables 9,920 9,652
Reinsurance receivables 428,847 6,529
Deferred policy acquisition costs 642,680 437,312
Value of business acquired 601,315 468,430
Goodwill 195,484 183,491
Property and equipment 83,221 56,101
Other assets 573,588 491,296
Separate Account assets 328,385 -
Assets of discontinued operations 34,528 32,386
-------------------------
Total assets $ 18,279,316 $11,471,522
=========================
AMERUS GROUP CO.
CONSOLIDATED BALANCE SHEETS
($ in thousands)
December 31,
2001 2000
-------------------------
(unaudited)
Liabilities and Stockholders' Equity
Policy reserves and policyowner funds:
Future life and annuity policy benefits $15,102,001 $ 9,482,625
Policyowner funds 432,941 325,251
-------------------------
15,534,942 9,807,876
Accrued expenses and other liabilities 484,878 216,451
Dividends payable to policyowners 221,224 167,741
Policy and contract claims 33,147 11,890
Income taxes payable 11,892 8,825
Deferred income taxes 20,508 2,660
Notes and contracts payable 315,574 215,627
Separate Account liabilities 328,385 -
Liabilities of discontinued operations 23,551 14,806
-------------------------
Total liabilities 16,974,101 10,445,876
Company-obligated mandatorily redeemable
preferred capital securities of subsidiary
trusts holding solely junior subordinated
debentures of the Company 69,054 197,691
Stockholders' equity:
Preferred Stock, no par value, 20,000,000
shares authorized, none issued - -
Common Stock, no par value, 230,000,000
shares authorized; 41,759,450 shares issued
and outstanding in 2001 (net of 1,746,548
treasury shares) and 30,011,034 shares
issued and outstanding in 2000 41,759 30,011
Paid-in capital 1,122,853 809,894
Accumulated other comprehensive income
(loss) 10,313 (17,188)
Unearned compensation (727) (146)
Unallocated ESOP shares (224) (683)
Retained earnings 62,187 6,067
-------------------------
Total stockholders' equity 1,236,161 827,955
-------------------------
Total liabilities and stockholders'
equity $18,279,316 $11,471,522
=========================
AMERUS GROUP CO.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
December 31, 2001
($ in thousands)
Accumulated
Other
Compre-
Additional hensive Unearned
Common Paid-In Income Compen-
Stock Capital (Loss) sation
----------------------- -----------------------
Balance at December 31,
1998 $ - $ - $ (11,187) $ (137)
1999:
Net income - - - -
Net unrealized (loss)
on securities - - (56,951) -
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 $ - $ - $ (67,948) $ (187)
=========== =========== =========== ===========
2000:
Net income - - - -
Net unrealized gain
(loss) on securities - - 50,937 -
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 $ (17,188) $ (146)
=========== =========== =========== ===========
2001 (unaudited):
Net income - - - -
Change in accounting
for derivatives - - 2,661 -
Transfer related to
unrealized gain on
available-for-sale
securities reclassified
to trading - - (430) -
Net unrealized gain
(loss) on securities - - 31,203 -
Net unrealized gain
(loss) on derivatives
designated as cash
flow hedges - - (5,933) -
Stock issued under
various incentive plans,
net of forfeitures 338 8,921 - (581)
Dividends declared on
common stock - - - -
Purchase of treasury
stock (1,406) (43,579) - -
Acquisition of IL
Holdings 9,047 223,358 - -
Conversion of company-
obligated mandatorily
redeemable preferred
capital securities 3,769 123,779 - -
Allocation of shares
in leveraged ESOP - 480 - -
----------- ----------- ----------- -----------
Balance at December 31,
2001 $ 41,759 $1,122,853 $ 10,313 $ (727)
=========== =========== =========== ===========
Total
Unallocated Stock-
ESOP Unassigned Retained holders'
Shares Surplus Earnings Equity
----------- ----------- -----------------------
Balance at December 31,
1998 $ - $ 800,869 $ - $ 789,545
1999:
Net income - 38,436 - 38,436
Net unrealized (loss)
on securities - - - (56,951)
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 $ - $ 772,030
=========== =========== =========== ===========
2000:
Net income - 33,801 18,039 51,840
Net unrealized gain
(loss) on securities - - - 50,937
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 $ 827,955
=========== =========== =========== ===========
2001 (unaudited):
Net income - - 81,143 81,143
Change in accounting
for derivatives - - (8,236) (5,575)
Transfer related to
unrealized gain on
available-for-sale
securities reclassified
to trading - - - (430)
Net unrealized gain
(loss) on securities - - - 31,203
Net unrealized gain
(loss) on derivatives
designated as cash
flow hedges - - - (5,933)
Stock issued under
various incentive plans,
net of forfeitures - - - 8,678
Dividends declared on
common stock - - (16,787) (16,787)
Purchase of treasury
stock - - - (44,985)
Acquisition of IL
Holdings - - - 232,405
Conversion of company-
obligated mandatorily
redeemable preferred
capital securities - - - 127,548
Allocation of shares
in leveraged ESOP 459 - - 939
----------- ----------- ----------- -----------
Balance at December 31,
2001 $ (224) $ - $ 62,187 $1,236,161
=========== =========== =========== ===========
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