AmerUs Life Holdings Annnounces Second Quarter Operating Earnings of $0.60 Per Diluted Share.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. 9, 1999-- AmerUs Life Holdings, Inc. (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 1999 adjusted 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 $0.60 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 $0.57 per diluted share in the comparable period of 1998. "We continue to make excellent progress toward reaching our financial and operational goals for 1999," 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 Life Holdings, Inc. "Another solid quarter by our investment department, widening investment spreads on 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 strong sales contributed to second quarter adjusted operating earnings that slightly exceeded consensus estimates." Net investment income for the quarter rose to $130.4 million from $126.8 million a year ago primarily due to an increase in total invested assets while the portfolio rate between quarters remained relatively stable. Repetitive life production increased 20 percent from $15.9 million in the first half of 1998 to $19.1 million this year. For the second quarter, repetitive life production increased 10 percent from $8.7 million to $9.6 million. 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. sales from wholly-owned subsidiaries increased 9 percent for the six-month period ending June June: see month. 30, 1999, from $389.7 million in 1998 to $424.3 million in 1999. For the quarter ending June 30, 1999, annuity sales decreased 14 percent to $186.0 million, from $215.0 million in 1998. "While annuity production was down during the months of May and June, we saw a rebound rebound (rē´bownd), n/v 1. a recovery from illness. n 2. an outbreak of fresh reflex activity after withdrawal of a stimulus rebound adjective in July July: see month. ," Brooks said. "In fact, AmVestors' sales were up over 25 percent in July 1999 versus July 1998, and through July, total sales of fixed annuities Fixed annuities Contracts in which an insurance company or issuing financial institution pays a fixed dollar amount of money per period. at AmerUs increased over 11 percent. We remain confident we will end the year with double digit Noun 1. double digit - a two-digit integer; from 10 to 99 integer, whole number - any of the natural numbers (positive or negative) or zero; "an integer is a number that is not a fraction" sales growth in fixed annuities." Total production at AMAL Corp., the company's variable products joint venture, increased over 44 percent for the six months ending June 30, 1999, from $171.1 million in 1998 to $246.7 million in 1999. Income from core operations for the second quarter increased $2.7 million from a year ago on a lower capital base. However, increased interest expense and a higher effective tax rate resulted in lower adjusted 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. . These factors, as well as a decrease in non-core realized gains Realized Gain A gain resulting from selling an asset at a price higher than the original purchase price. Notes: There may be tax consequences for a realized profit. from the sale of investments totaling $2.2 million, caused net income to decline to $16.6 million, or $0.54 per diluted share, for the 1999 second quarter, compared with $20.9 million, or $0.60 per diluted share, in the second quarter of 1998. "We are pleased with the improvement in our core profitability and are focusing efforts on further improving sales, managing expense levels and adding value for our shareholders," said Brooks. During the second quarter, the company repurchased 17,000 of its own shares in the open market at an average cost of $24.01 per share. The company has essentially completed its Year 2000 efforts and total expenses will be within the range announced earlier. Expenses associated with Year 2000 remediation and testing efforts during the quarter and year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. totaled $1.7 million and $3.8 million, respectively. Expenses since the beginning of the Year 2000 Project total $8.0 million. AmerUs Life Holdings, Inc. 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, Delta Life Corporation, and its operating subsidiary 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. , Delta Life and Annuity Company, and AmVestors Financial Corporation, located in Topeka, Kansas This article is about the state capital of Kansas. For other uses, see Topeka (disambiguation). Topeka is the capital of the U.S. state of Kansas and the county seat of Shawnee County, which is named after the Shawnee Indians. , with two wholly-owned operating subsidiaries -- 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. and Financial Benefit Life Insurance Company. As of June 30, 1999, AmerUs Life Holdings' total assets were $10.6 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 $823.1 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 . (Quarterly Financial Results Attached) 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 trends, management's beliefs, expectations 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 10Q report filed with the Securities and Exchange Commission. -0-
AMERUS LIFE HOLDINGS, INC.
ADJUSTED OPERATING INCOME
For the Three For the Six
Months Ended Months Ended
June 30, June 30,
1999 1998 1999 1998
------------------- --------------------
(In thousands, except per share amounts)
Net Income $ 16,591 $ 20,864 $ 33,548 $ 42,621
Net realized (gains)
losses on
investments (A) (920) (2,967) (2,613) (7,573)
Core realized gains
(losses) (B) 1,857 1,751 3,787 3,586
Amortization of
deferred policy
acquisition costs due
to realized gains or
losses (C) 761 334 1,093 840
------------------- --------------------
Adjusted Operating
Income $ 18,289 $ 19,982 $ 35,815 $ 39,474
=================== ====================
Adjusted Operating
Income per common share:
Basic (D) $ 0.60 $ 0.58 $ 1.18 $ 1.14
Diluted (E) $ 0.60 $ 0.57 $ 1.17 $ 1.13
(A) Represents realized gains or losses on investments adjusted
for income taxes on such amounts. Realized gains 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 gains on convertible preferred stock and bond
portfolio, net of income taxes.
(C) Represents amortization of deferred policy acquisition costs
due to realized gains or losses being included in product margins
adjusted for income taxes on such amounts.
(D) Basic operating earnings per common share for the second
quarter of 1999 and 1998 is calculated using 30.43 million and
34.73 million shares, respectively.
(E) Diluted adjusted operating income per common share for the
second quarter of 1999 and 1998 is calculated using 30.52 million
and 35.02 million shares, respectively.
AMERUS LIFE HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
June 30, December 31,
1999 1998
-------------- --------------
(unaudited)
Assets
Investments:
Securities available
for sale at fair value:
Fixed maturity securities $ 6,782,652 $ 6,710,246
Equity securities 41,834 68,483
Short-term investments 255 22,428
Mortgage loans on real estate 599,590 566,403
Real estate 431 633
Policy loans 110,809 110,786
Other investments 208,573 205,790
-------------- --------------
Total investments 7,744,144 7,684,769
Cash and cash equivalents 35,674 60,090
Accrued investment income 84,442 79,921
Premiums and fees receivable 4,331 4,385
Reinsurance receivables 9,397 6,174
Deferred policy acquisition
costs 426,549 246,030
Value of business acquired 260,508 224,540
Investment in unconsolidated
subsidiaries 30,351 29,602
Goodwill 211,746 215,506
Property and equipment 24,121 23,249
Deferred income taxes 14,562 -
Other assets 360,795 401,239
Closed Block assets 1,424,379 1,453,305
-------------- --------------
Total assets $ 10,630,999 $10,428,810
============== ==============
Liabilities and Stockholders' Equity
Policy reserves and policyowner
funds:
Future life and annuity
policy benefits $ 7,207,705 $ 7,185,417
Policyowner funds 313,183 95,974
-------------- --------------
7,520,888 7,281,391
Accrued expenses 32,143 41,323
Dividends payable
to policyowners 1,878 1,168
Policy and contract claims 6,155 13,433
Income taxes payable 14,157 9,574
Deferred income - 11,398
Other liabilities 133,080 159,350
Debt 146,307 141,051
Closed Block liabilities 1,736,519 1,703,195
-------------- --------------
Total liabilities 9,591,127 9,361,883
-------------- --------------
Company-obligated mandatorily
redeemable preferred capital
securities of subsidiary trusts
holding solely junior
subordinated debentures of
the Company 216,729 216,729
-------------- --------------
Stockholders' equity:
Preferred Stock, no par
value, 20,000,000 shares
authorized, none issued - -
Common Stock, Class A, no
par value, 180,000,000
shares authorized: issued
and outstanding; 25,424,174
shares (net of 4,309,279
treasury shares) in 1999 and
25,425,983 (net of 4,308,936
treasury shares) in 1998 25,424 25,426
Common Stock, Class B, no
par value, 50,000,000 shares
authorized; 5,000,000 shares
issued and outstanding 5,000 5,000
Paid-in capital 290,025 290,091
Accumulated other
comprehensive income (27,550) 26,711
Unearned compensation (425) (240)
Retained earnings 530,669 503,210
-------------- --------------
Total stockholders' equity 823,143 850,198
-------------- --------------
Total liabilities and
stockholders' equity $ 10,630,999 $10,428,810
============== ==============
AMERUS LIFE HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except share data)
(Unaudited)
Three Months Six Months
Ended June 30, Ended June 30,
1999 1998 1999 1998
------------------- -----------------
Revenues:
Insurance premiums $ 20,385 $ 21,432 $ 44,220 $ 38,726
Universal life and
annuity product
charges 18,900 17,872 36,086 34,252
Net investment
income 130,378 126,822 260,696 259,995
Realized gains on
investments 1,415 4,564 4,019 10,783
Contribution from
the Closed Block 6,372 7,861 12,914 16,836
------------------- ------------------
177,450 178,551 357,935 360,592
------------------- ------------------
Benefits and expenses:
Policyowner benefits 101,277 111,930 210,696 219,286
Underwriting,
acquisition, and
insurance expenses 23,584 17,234 44,640 38,449
Amortization of
deferred policy
acquisition costs
and value of
business acquired 19,586 15,731 36,571 30,688
Dividends to
policyowners 1,047 395 2,023 710
------------------- ------------------
145,494 145,290 293,930 289,133
------------------- ------------------
Income from
operations 31,956 33,261 64,005 71,459
Interest expense 7,541 5,928 14,770 12,610
------------------- ------------------
Income before income
tax expense and equity
in earnings of
unconsolidated
subsidiary 24,415 27,333 49,235 58,849
Income tax expense 8,324 7,142 16,695 17,319
------------------- ------------------
Income before equity
in earnings of
unconsolidated
subsidiary 16,091 20,191 32,540 41,530
Equity in earnings
of unconsolidated
subsidiary 500 673 1,008 1,091
------------------- ------------------
Net income $ 16,591 $ 20,864 $ 33,548 $ 42,621
=================== ==================
Earnings per
common share:
Basic $ 0.55 $ 0.60 $ 1.10 $ 1.23
=================== ==================
Diluted $ 0.54 $ 0.60 $ 1.10 $ 1.21
=================== ==================
Weighted average
common shares
outstanding
Basic 30,432,794 34,732,514 30,432,145 34,733,710
======================= ======================
Diluted
30,522,586 35,021,958 30,495,083 35,086,382
======================= ======================
AMERUS LIFE HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
June 30, 1999
(Dollars in thousands)
Accumulated
Additional Other
Common Stock Paid-In Comprehensive
Class A Class B Capital Income
------- ------- ------- -------------
Balance at
December 31, 1996 $14,500 $5,000 $ - $35,300
1997:
Net income
Net unrealized gain
on securities 20,447
Issuance of common stock 15,235 383,686
Dividends declared
on common stock
-------- --------- --------- ---------
Balance at
December 31, 1997 $29,735 $5,000 $383,686 $55,747
1998:
Net income
Net unrealized (loss)
on securities (28,076)
Minimum pension
liability adjustment (960)
Stock issued under
various incentive
plans, net
of forfeitures 14 635
Purchase of
treasury stock (4,325) 97,810)
Issuance of
treasury stock 2 661
Retirement of
company-obligated
mandatorily redeemable
preferred capital
securities 2,919
Dividends declared on
common stock
-------- --------- --------- ---------
Balance at
December 31, 1998 $25,426 $5,000 $290,091 $26,711
1999 (unaudited)
Net income
Net unrealized (loss)
on securities (54,261)
Stock issued under various
incentive plans, net of
forfeitures 15 325
Purchase of treasury stock (17) (391)
Dividends declared on
common stock
-------- --------- --------- ---------
Balance at June 30, 1999 $25,424 $5,000 $290,025 $(27,550)
======== ========= ========= =========
AMERUS LIFE HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
June 30, 1999
(Dollars in thousands)
Total
Unearned Retained Shareholders
Compensation Earnings Equity
-------------- --------- -------------
Balance at December 31, 1996 $ - $402,710 $457,510
1997:
Net income 58,059 58,059
Net unrealized gain
on securities 20,447
Issuance of common stock 398,921
Dividends declared
on common stock (6,946) (6,946)
------- -------- ----------
Balance at
December 31, 1997 $ - $453,823 $927,991
1998:
Net income 62,829 62,829
Net unrealized (loss) on securities (28,076)
Minimum pension liability adjustment (960)
Stock issued under various incentive
plans, net of forfeitures (240) 409
Purchase of treasury stock (102,135)
Issuance of treasury stock 663
Retirement of company-obligated
mandatorily redeemable preferred
capital securities 2,919
Dividends declared on common stock (13,442) (13,442)
------ -------- --------
Balance at December 31, 1998 $(240) $503,210 $850,198
1999 (unaudited)
Net income 33,548 33,548
Net unrealized (loss) on securities (54,261)
Stock issued under various incentive
plans, net of forfeitures (185) 155
Purchase of treasury stock (408)
Dividends declared on common stock (6,089) (6,089)
------- ---------- ---------
Balance at June 30, 1999 $(425) $530,669 $823,143
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