AmerUs Group Reports Third Quarter Results.DES MOINES, Iowa “Des Moines” redirects here. For other uses, see Des Moines (disambiguation). Des Moines (pronounced /dɪˈmɔɪn/ in English, -- 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 ), a leading producer of life insurance and annuity products, today reported quarterly results, with third quarter 2006 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. 1 for the third quarter of $52.4 million, or $1.22 per diluted share, a seven percent increase compared to $48.6 million, or $1.14 per diluted share a year ago. Excluding the effects of capital transactions associated with the Aviva merger, pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma adjusted net operating income for the quarter would have been $1.27 per diluted share. On a year-to-date basis, adjusted net operating income was $154.9 million, or $3.68 per diluted share, an increase of more than 10 percent compared to $142.3 million, or $3.33 per diluted share a year ago. Net income for the quarter was $5.3 million, or $0.12 per diluted share compared to $38.6 million, or $0.91 per diluted share in the third quarter of 2005. Significant factors contributing to the decline in net income during the quarter include the net effect of FAS 133 market value adjustments ($24.3 million) and the loss on the redemption of the company's preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. ($11.4 million). On a year-to-date basis, AmerUs Group's net income was $128.8 million, or $3.06 per diluted share, compared to $135.7 million or $3.17 per diluted share a year ago. 2006 reported net income and adjusted net operating income figures include the impact of expensing stock options (full year impact of approximately $0.05 per diluted common share). The expensing of stock options commenced January 1, 2006 in accordance with Statement of Financial Accounting Standards 123R, Share-Based Payment, A Revision of Accounting for Stock-Based Compensation. Protection Product Sales (2) and Results Third quarter fixed life sales increased 13 percent to $33.5 million, compared to $29.6 million in the third quarter of 2005. Year-to-date sales of indexed life products, driven by consumer demand, increased to $89.6 million, or 93 percent of total fixed life sales, compared to $66.1 million, or 76 percent, in 2005. Total fixed life sales for this period increased 11 percent to $96.6 million compared to $86.7 million a year ago. Pre-tax operating income for the protection segment increased five percent to $42.4 million compared to $40.3 million in the third quarter of 2005. The increase was primarily attributable to the growing block of indexed life business. Year-to-date, pre-tax operating income increased to $127.4 million compared to $125.6 million in 2005. Accumulation Product Sales (2) and Results Sales of fixed annuity Fixed Annuity An insurance contract in which the insurance company makes fixed dollar payments to the annuitant for the term of the contract, usually until the annuitant dies. The insurance company guarantees both earnings and principal. products for the quarter totaled $687 million, compared with $686 million in the third quarter of 2005. Indexed annuity products, driven by consumer demand, comprised 93 percent of third quarter sales compared to 92 percent a year ago. Year-to-date, fixed annuity sales declined seven percent to $1.83 billion compared to $1.97 billion during the first nine months of 2005, with indexed annuity products comprising 93 percent of total fixed annuity sales. During the third quarter of 2006, the company issued $436 million of funding agreements Funding Agreement Illiquid insurance contracts that provide guaranteed principal repayment and interest payments for a predetermined period of time. Notes: Funding agreements are marketed to mutual fund companies and municipal reinvestments. . Year-to-date, the company has issued $610.7 million in funding agreements. Pre-tax operating income for the accumulation segment increased 11 percent to $53.2 million during the third quarter of 2006 compared to $47.9 million a year ago. The increase was due to higher assets under management Assets Under Management (AUM) is a term used by financial services companies in the mutual fund and money management or investment management business to gauge how much money they are managing. and wider product margins. Year-to-date, pre-tax operating income increased 25 percent to $162.5 million compared to $130.4 million for the first nine months of 2005. Net Investment Income Net investment income was $291 million in the third quarter of 2006 compared to $279 million in the third quarter of 2005. Growth in invested assets and higher yields on investments contributed to the increase. The weighted average book yield was 5.80 percent at September 30, 2006. Corporate Actions During the third quarter, the company completed the following corporate actions: * Settled the terms of the PRIDES security which matured on August 16, 2006; * Redeemed all issued and outstanding shares of the company's Series A Non-Cumulative Perpetual Preferred Stock. On October 19, 2006, AmerUs Group shareholders approved the agreement and plan of merger with Aviva plc entered into on July 12, 2006, with nearly 98 percent of shareholders who voted approving the merger. Regulatory approvals are still required from Iowa, Indiana, Kansas and 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 . The Company currently expects that the closing will occur before December 31, 2006. Additional Financial Information Further 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. Cautionary Statement Regarding 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. This press release contains statements which constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995, including statements relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc trends in our operations and financial results and our business and products, which include words such as "anticipate," "believe," "plan," "estimate," "expect," "intend" and other similar expressions. Forward-looking statements are made based upon management's current expectations and beliefs concerning future developments and their potential effects on us. Such forward-looking statements are not guarantees of future performance. Factors that may cause our actual results to differ materially from those contemplated by these forward-looking statements include, among others, the following possibilities: (a) the parties may be unable to obtain governmental and regulatory approvals required for the merger, or required governmental and regulatory approvals may delay the merger or result in the imposition of conditions that could cause the parties to abandon the merger; (b) the parties may be unable to complete the merger because, among other reasons, conditions to the closing of the merger may not be satisfied or waived; (c) general economic conditions and other factors, including prevailing interest rate levels and stock and bond market performance, which may affect (1) our ability to sell our products, (2) the market value of our investments and consequently protection product and accumulation product margins and (3) the lapse rate lapse rate n. The rate of decrease of atmospheric temperature with increase in altitude. lapse rate The rate of change of any meteorological phenomenon, especially atmospheric temperature with altitude. and profitability of policies; (d) the performance of our investment portfolios which may be affected by general economic conditions, the continued credit quality of the companies whose securities we invest in and the impact of other investment transactions; (e) customer response to new products, distribution channels and marketing initiatives and increasing competition in the sale of insurance and annuities and the recruitment of sales representatives from companies that may have greater financial resources, broader arrays of products, higher ratings and stronger financial performance may impair our ability to retain existing customers, attract new customers and maintain our profitability; (f) our ratings and those of our subsidiaries by independent rating organizations which we believe are particularly important to the sale of our products; (g) mortality, morbidity, and other factors which may affect the profitability of our insurance products; (h) our ability to develop and maintain effective risk management policies and procedures Policies and Procedures are a set of documents that describe an organization's policies for operation and the procedures necessary to fulfill the policies. They are often initiated because of some external requirement, such as environmental compliance or other governmental and to maintain adequate reserves for future policy benefits and claims; (i) litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. or regulatory investigations or examinations; (j) regulatory changes, interpretations, initiatives or pronouncements, including those relating to the regulation of insurance companies and the regulation and sales of their products and the programs in which they are used; (k) changes in the federal income tax and other federal laws, regulations, and interpretations, including federal regulatory measures that may significantly affect the insurance business including limitations on antitrust immunity, the applicability of securities laws to insurance products, minimum solvency requirements, and changes to the tax advantages offered by life insurance and annuity products or programs with which they are used; (l) the impact of changes in standards of accounting; (m) our ability to achieve anticipated levels of operational efficiencies and cost-saving initiatives and to meet cash requirements based upon projected liquidity sources; and; (n) and various other factors discussed in the section entitled "Item 1A. Risk Factors" in our Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the period ended December 31, 2005 and in our Quarterly Report on Form 10-Q Form 10-Q See 10-Q. for the period ended September 30, 2006. There can be no assurance that other factors not currently anticipated by us will not materially and adversely affect our results of operations. You are cautioned not to place undue reliance on any forward-looking statements made by us or on our behalf. Forward-looking statements speak only as of the date the statement was made. We undertake no obligation to update or revise any forward-looking statement. AmerUs Group Co. is located in Des Moines, Iowa, and is engaged through its subsidiaries in the business of marketing individual life insurance and annuity products in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. . Its major subsidiaries include: AmerUs Life Insurance Company, American Investors Life Insurance Company, Inc., Bankers Life Insurance Company of New York and Indianapolis Life Insurance Company. As of September 30, 2006, AmerUs Group's total assets were $26.0 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 $1.7 billion, 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 . 1 The company views adjusted net operating income, a non-GAAP financial measure, as an important indicator of financial performance. When presented with net income, the combined presentation can enhance an investor's understanding of AmerUs Group's underlying profitability and normalized results from operations. The definition of 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 , as presented in this press release, excludes, on an after-tax basis After-tax basis The comparison basis used to analyze the net after-tax returns on a corporate taxable bond and a municipal tax-free bond. , from net income items such as open block realized gains and losses, deferred policy acquisition costs associated with open block realized gains and losses, non-insurance operations, the impact of derivative related market value adjustments and the release of income tax provisions. Non-GAAP measures are also used for goal setting, determining employee and management compensation and evaluating our performance on a basis comparable to that used by security analysts. A reconciliation of net income to adjusted net operating income has been included as part of this press release. 2 Sales for an insurance company are a performance measure. Sales are presented in accordance with industry practice and represent the amount of new business sold during the period. We believe sales are a measure of the productivity of our distribution networks. Sales are also a leading indicator Leading Indicator A measurable economic factor that changes before the economy starts to follow a particular pattern or trend. Leading indicators are used to predict changes in the economy, but are not always accurate. of future revenue trends. [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] |
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