AmerUs Group Reports Second 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)--Aug. 6, 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 second 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 $25.8 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 with $11.2 million, or $0.65 per diluted share, in the second quarter of 2000. Adjusted net operating earnings for the first six months of 2001 were $48.6 million, or $1.50 per diluted share, compared with $26.1 million, or $1.50 per diluted share, a year ago. "AmerUs recorded a number of positive achievements in the second quarter, including strong sales of both our 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. products and equity-indexed life products and the completion of the acquisition of 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," 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. 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 $19.7 million, or $0.57 per diluted share, compared with $7.7 million, or $0.44 per diluted share, for the second 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 was $39.1 million, or $1.21 per diluted share, compared with $22.7 million, or $1.30 per diluted share, a year ago. 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 the third quarter of 2000 had an impact on net income from continuing operations for the second quarter and first six months of 2001. Annuity Sales Annuity sales for the second quarter increased nearly 25 percent to $437.8 million, compared with $351.1 million for the second quarter of 2000. Traditional fixed and equity-index annuity products showed the greatest gain during the quarter. "The annuity division had another outstanding quarter and our expectation is to finish the year at or above the $1.8 billion level in annuity sales," said Brooks. Year-to-date, annuity sales increased $310.7 million or 48 percent to $959.2 million, compared to $648.5 million in the second quarter of 2000. Life Sales During the second quarter, fixed life sales nearly doubled to $16.1 million, compared to $8.1 million in the second quarter of 2000. "The Indianapolis Life acquisition has substantially added to our life sales and our equity-indexed life product was once again the leading product. We expect this trend to continue for the year and expect our annual life sales running rate to approach $100 million per year," said Brooks. For the year, fixed life sales increased 37% to $26.4 million, compared to $19.3 million a year ago. Net Investment Income Net investment income was $207.1 million for the second quarter of 2001 compared with $170.1 million for the same period 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, including the acquisition of Indianapolis Life. Net investment income through June June: see month. 30, 2001 was $388.2 million compared to $343.8 million a year ago. The portfolio yield during the second quarter was 6.72%, compared with 6.91% in the second quarter of 2000. For the first six months of 2001, the portfolio yield was 7.00%, compared with 7.02% for the same period a year ago. The lower yields are primarily due to the acquisition of Indianapolis Life, which holds a significant amount of convertible fixed maturity investments in its investment portfolio. Corporate Actions On July July: see month. 27, 2001, the company's adjustable conversion-rate equity security units (ACES) matured, causing the company to issue 3.8 million shares and retire retire v. 1) to stop working at one's occupation. 2) to pay off a promissory note, and thus "retire" the loan. 3) for a jury to go into the jury room to decide on a verdict after all evidence, argument and jury instructions have been completed. approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $129 million in debt. Additionally, on July 31, 2001, AmerUs Group began distributing 9.0 million shares of common stock and $9 million in cash and policy credits to Indianapolis Life policyholders. The acquisition was completed May 18, 2001. Finally, during the second quarter, the company repurchased 16,900 shares of its common stock at an average price of $32.99 per share. Conference Call, Audio Replay and Additional Financial Information Interested parties may listen to a conference call with AmerUs Group's management discussing second 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 August 7, 2001. An audio replay of AmerUs Group's second quarter 2001 earnings conference call will be available at 1 p.m. CDT, August 7, 2001, through August 14, 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 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., Banker's 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 June 30, 2001, AmerUs Group's total assets were $17.6 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 $1,108.9 million, including accumulated other comprehensive income In 1997 the Financial Accounting Standards Board issued a Statement on Financial Accounting Standards entitled “Comprehensive Income”. This statement required all income statement items to be reported either as a regular item in the income statement and or a special item as . Certain statements made by the company which are not historical facts may be considered forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. , including, without limitation, statements as to sales targets, sales and earnings trends, management's beliefs, expectations, goals and opinions, which are based upon a number of assumptions concerning future conditions that ultimately may prove to be inaccurate. Such forward-looking statements are subject to risks and uncertainties and may be affected by various factors that may cause actual results to differ materially from those in the forward-looking statements. For further information which could cause actual results to differ from the company's expectations as well as other factors which could affect the company's financial statements, please refer to the company's filings with the Securities and Exchange Commission.
For the 3 Months Ended For the 6 Months Ended
June 30, June 30,
2001 2000 2001 2000
---------------------- ----------------------
($ in thousands, except per share data)
Net Income $20,227 $ 7,877 $31,863 $22,657
Net non-core realized
(gains) losses (A) 4,677 299 9,494 (1,058)
Net amortization of
deferred policy
acquisition costs due
to non-core realized
gains or losses (B) (1,317) (1,635) (2,823) (1,401)
Net effect of accounting
differences from the
adoptions of SFAS
133 (C) 2,541 - 2,541 -
Reorganization costs (D) 202 4,834 202 5,855
Discontinued
operations (E) (532) (147) (946) 58
Cumulative effect of
change in accounting
for derivatives (F) - - 8,236 -
---------------------- ---------------------
Adjusted Net Operating
Income $25,798 $11,228 $48,567 $26,111
====================== =====================
Adjusted Net Operating
Income per common
share (G):
Basic $ 0.75 $ 0.65 $ 1.51 $ 1.50
====================== =====================
Diluted $ 0.75 $ 0.65 $ 1.50 $ 1.50
====================== =====================
Weighted average common
shares outstanding (G):
Basic 34,364,932 17,390,165 32,181,646 17,390,165
====================== ======================
Diluted 34,528,541 17,407,252 32,325,847 17,416,085
====================== ======================
(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 the net effect of SFAS No. 133 related accounting
entries during the quarter, 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 reorganization. For the 2000 periods presented,
represents costs directly related to the Company's reorganization
and merger with ALHI, adjusted for minority interest on such
amounts. The costs consist primarily of legal, actuarial and
consulting expenses.
(E) Represents the net income from the Company's discontinued
operations.
(F) 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.
(G) 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.
The Company's operating income is primarily from its former
subsidiary, ALHI. The Company has owned shares of ALHI common
stock since 1996. Adjusted net operating income per share has been
calculated on the basis that the shares of stock the Company owned
of ALHI were distributed to members and outstanding from January
1, 1996 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)
For The 3 Months Ended For The 6 Months Ended
June 30, June 30,
2001 2000 2001 2000
------------------------ -----------------------
Revenues:
Insurance premiums $ 81,137 $ 69,137 $ 147,729 $ 138,264
Universal life and
annuity product
charges 34,847 25,519 59,113 48,794
Net investment income 207,093 170,143 388,221 343,755
Realized/unrealized
gains (losses) on
investments (11,825) (7,162) (51,660) (4,259)
Other income 11,952 7,345 22,284 13,878
----------------------- -----------------------
323,204 264,982 565,687 540,432
----------------------- -----------------------
Benefits and expenses:
Policyowner benefits 198,788 148,622 328,697 312,326
Underwriting,
acquisition and
other expenses 35,121 34,252 66,455 61,247
Reorganization costs 202 5,495 202 6,705
Amortization of
deferred policy
acquisition costs
and value of
business acquired 29,971 20,142 55,242 46,189
Dividends to
policyowners 23,067 21,326 42,225 37,496
----------------------- -----------------------
287,149 229,837 492,821 463,963
----------------------- -----------------------
Income from continuing
operations 36,055 35,145 72,866 76,469
Interest expense 7,410 7,681 14,742 14,827
----------------------- -----------------------
Income before income
tax expense and
minority interest 28,645 27,464 58,124 61,642
Income tax expense 8,950 11,070 18,971 23,657
Minority interest - 8,664 - 15,270
----------------------- -----------------------
Net income from
continuing operations 19,695 7,730 39,153 22,715
Discontinued operations
(net of tax):
Income (loss) from
discontinued
operations 532 147 946 (58)
----------------------- -----------------------
Net income before
cumulative effect of
change in accounting
for derivatives 20,227 7,877 40,099 22,657
Cumulative effect of
change in accounting
for derivatives, net
of tax - - (8,236) -
----------------------- -----------------------
Net income $ 20,227 $ 7,877 $ 31,863 $ 22,657
======================= =======================
Net income from
continuing operations
per common share:
Basic $ 0.57 $ 0.44 $ 1.22 $ 1.31
======================= =======================
Diluted $ 0.57 $ 0.44 $ 1.21 $ 1.30
======================= =======================
Net income from
discontinued
operations per common
share:
Basic $ 0.02 $ 0.01 $ 0.03 $ (0.01)
======================= =======================
Diluted $ 0.02 $ 0.01 $ 0.03 $ -
======================= =======================
Net income per common share:
Basic $ 0.59 $ 0.45 $ 0.99 $ 1.30
======================= =======================
Diluted $ 0.59 $ 0.45 $ 0.99 $ 1.30
======================= =======================
Weighted average common
shares outstanding:
Basic 34,364,932 17,390,165 32,181,646 17,390,165
======================= =======================
Diluted 34,528,541 17,407,252 32,325,847 17,416,085
======================= =======================
See accompanying notes to consolidated financial statements.
AMERUS GROUP CO.
CONSOLIDATED BALANCE SHEETS
($ in thousands)
June 30, Dec. 31,
2001 2000
------------------------
(unaudited)
Assets
Investments:
Securities available-for-sale at fair value:
Fixed maturity securities $10,466,581 $ 8,261,647
Equity securities 76,740 152,903
Short-term investments 10,183 20,861
Securities held for trading purposes:
Fixed maturity securities 2,295,917 -
Equity securities 2,288 -
Loans 931,730 534,857
Real estate 2,531 3,226
Policy loans 508,742 312,662
Other investments 270,743 320,650
------------------------
Total investments 14,565,455 9,606,806
Cash and cash equivalents 113,377 65,485
Accrued investment income 175,393 114,034
Premiums, fees and other receivables 7,458 9,652
Income taxes receivable 5,574 -
Reinsurance receivables 307,202 6,529
Deferred policy acquisition costs 489,152 437,312
Value of business acquired 699,138 468,430
Goodwill 184,645 183,491
Property and equipment 89,477 56,101
Other assets 540,701 491,296
Separate Account assets 342,034 -
Assets of discontinued operations 34,142 32,386
------------------------
Total assets $17,553,748 $11,471,522
========================
See accompanying notes to consolidated financial statements.
AMERUS GROUP CO.
CONSOLIDATED BALANCE SHEETS
($ in thousands)
June 30, Dec. 31,
2001 2000
--------------------------
(unaudited)
Liabilities and Stockholders' Equity
Policy reserves and policyowner funds:
Future life and annuity policy benefits $11,380,715 $ 9,482,625
Policyowner funds 3,529,377 325,251
--------------------------
14,910,092 9,807,876
Accrued expenses and other liabilities 504,967 216,451
Dividends payable to policyowners 191,754 158,473
Policy and contract claims 23,224 11,890
Income taxes payable - 8,825
Deferred income taxes 25,770 5,904
Notes and contracts payable 229,156 215,627
Separate Account liabilities 342,034 -
Liabilities of discontinued operations 20,157 14,806
--------------------------
Total liabilities 16,247,154 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; 39,074,398 shares
issued and outstanding in 2001 (net of
20,382 treasury shares) and 30,011,034
shares issued and outstanding in 2000 39,074 30,011
Paid-in capital 1,033,752 809,894
Accumulated other comprehensive income
(loss) (1,060) (11,164)
Unearned compensation (110) (146)
Unallocated ESOP shares (683) (683)
Retained earnings 37,930 6,067
--------------------------
Total stockholders' equity 1,108,903 833,979
--------------------------
Total liabilities and stockholders'
equity $17,553,748 $11,471,522
==========================
See accompanying notes to consolidated financial statements.
AMERUS GROUP CO.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
June 30, 2001
($ in thousands)
Accumulated
Other Com-
Additional prehensive Unearned
Common Paid-In Income Compen-
Stock Capital (Loss) sation
-------------------- ----------- -----------
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 (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 - - 9,942 -
Net unrealized gain (loss)
on derivatives designated
as cash flow hedges - - (2,069) -
Stock issued under
various incentive plans,
net of forfeitures 46 1,414 - 36
Purchase of treasury stock (27) (830) - -
Acquisition of IL
Holdings 9,044 223,274 - -
-------- ----------- ----------- -----------
Balance at June 30, 2001 $39,074 $1,033,752 $ (1,060) $ (110)
======== =========== =========== ===========
Unallo- Total
cated Stock-
ESOP Unassigned Retained holders'
Shares Surplus Earnings Equity
-------- ----------- --------- ----------
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 (unaudited):
Net income - - 40,099 40,099
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 - - - 9,942
Net unrealized gain (loss)
on derivatives designated
as cash flow hedges - - - (2,069)
Stock issued under
various incentive plans,
net of forfeitures - - - 1,496
Purchase of treasury stock - - - (857)
Acquisition of IL Holdings - - - 232,318
-------- ----------- ----------- -----------
Balance at June 30, 2001 $ (683) $ - $ 37,930 $1,108,903
======== =========== =========== ===========
See accompanying notes to consolidated financial statements.
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