AmerUs Life Holdings Announces Record Operating Earnings Per Share For Fourth Quarter and 1999.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. 3, 2000 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 its fourth quarter 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 increased 19 percent to $0.64 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 from $0.54 per diluted share in the same period in 1998. For the year, adjusted operating earnings per diluted share were $2.43, also up 19 percent over the $2.04 figure for 1998. The fourth quarter and full year operating earnings per share results were both new record highs for the company. The fourth quarter 1999 adjusted operating earnings were $19.2 million, compared to $16.7 million in 1998. For the year ended December December: see month. 31, 1999, adjusted operating earnings were $73.7 million, compared to $68.9 million in 1998. &uot;We're we're Contraction of we are. we're we are very pleased with our fourth quarter and full year results and our continued growth throughout 1999,&uot; 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. &uot;This marks five consecutive quarters of consistent earnings growth, which have been driven by our strong life insurance and 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, higher net investment income, and improved spreads.&uot; Net Income Net income for the quarter increased to $16.4 million, or $0.55 per diluted share, compared to $13.3 million, or $0.43 per diluted share, for the same period in 1998. Net income in 1999 increased to $66.7 million, or $2.20 per diluted share, compared to $62.8 million, or $1.86 per diluted share. Net Investment Income Net investment income for the fourth quarter of 1999 rose to $141.9 million from $129.1 million a year ago. In 1999, net investment income increased to $540.1 million, compared to $503.4 million in 1998, primarily due to higher invested assets and a higher effective yield compared to 1998. Life and Annuity Sales Improvements Annuity sales for the quarter increased 17 percent to $265.8 million compared to $227.6 million for the same period in 1998. Annuity sales in 1999 increased more than 18 percent to $938.9 million, compared to $792.5 million in 1998. In the fourth quarter of 1999, total repetitive life sales increased more than 17 percent to $10.7 million, from $9.2 million for the comparable period of 1998. Repetitive life production for the year increased 11 percent to $37.7 million, from $34.1 million in 1998. &uot;Our 1999 production results exceeded the targets we set at the beginning of the year. Our goal for 2000 is another year of double-digit dou·ble-dig·it adj. Being between 10 and 99 percent: double-digit inflation. growth in life and annuity sales, &uot; said Brooks. Merger Update The company continues to make progress on its proposed merger with 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 Insurance Company (ILICo). As part of this transaction, 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 Mutual Holding Company, the parent company of AmerUs Life Holdings, will move forward with its 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. plan and expects to complete the process during the third quarter of 2000. ILICo will also move forward with its demutualization, and expects to complete the process by year end. The company also released selected five-year historical financial information provided by ILICo. &uot;We expect this transaction to be accretive to operating earnings per share as well as return on equity immediately upon the combination of the two companies, with modest contributions to earnings in 2000. We conservatively estimate annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta cost savings of $15 million within two years of the date of the combination,&uot; said Brooks. Corporate Actions During the fourth quarter, the company repurchased 128,100 of its Class A common shares in the open market at an average cost of $21.68 per share. 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 Investors Life Insurance Company, Inc. and Financial Benefit Life Insurance Company. As of December 31, 1999, AmerUs Life Holdings' total assets were $10.7 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 $733.0 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 . (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, 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 10K report filed with the Securities and Exchange Commission.
AmerUs Life Holdings
Adjusted Operating Income
For the For the
Three Months Ended Twelve Months Ended
December 31, December 31,
1999 1998 1999 1998
---------------------- ---------------------
(In thousands, except per share amounts)
Net Income $ 16,418 $ 13,347 $ 66,654 $ 62,829
Net realized (gains)
losses on investments (A) 599 1,626 (2,108) 72
Core realized gains
(losses) (B) 752 976 6,608 6,110
Amortization of deferred
policy acquisition
costs due to realized
gains or losses (C) 258 784 1,387 (129)
Reorganization costs (D) 1,145 -- 1,145
---------------------- -------------------
Adjusted Operating Income $ 19,172 $ 16,733 $ 73,686 $ 68,882
===================== ====================
Adjusted Operating Income
per common share:
Basic $ 0.64 $ 0.55 $ 2.44 $ 2.06
Diluted $ 0.64 $ 0.54 $ 2.43 $ 2.04
Weighted Average
Shares Outstanding:
Basic 29,992 30,680 30,230 33,458
Diluted 30,065 30,712 30,307 33,696
(A) Represents realized gains or losses on investments adjusted for
income taxes on such amounts. 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 gains on the 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) Represents costs in 1999 directly related to the Company's
proposed merger with its controlling shareholder, American Mutual
Holding Company (AMHC), following the proposed demutualization of
AMHC. These costs consist primarily of legal and consulting
expenses.
AMERUS LIFE HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except share data)
Years ended December 31,
1999 1998 1997
------------------------------------
Revenues:
Insurance premiums $ 89,521 $ 81,197 $ 48,127
Universal life and annuity
product charges 74,676 72,981 47,306
Net investment income 540,072 503,372 224,431
Realized gains (losses) on
investments 3,244 (112) 13,791
Other income 1,467 1,700 -
Contribution from the
Closed Block 25,166 31,478 31,044
------------------------------------
734,146 690,616 364,699
------------------------------------
Benefits and expenses:
Policyowner benefits 442,428 430,756 195,976
Underwriting, acquisition,
and other expenses 93,881 81,416 49,999
Amortization of deferred
policy acquisition costs and
value of business acquired 67,780 60,214 23,776
Dividends to policyowners 4,526 2,558 1,587
------------------------------------
608,615 574,944 271,338
------------------------------------
Income from operations 125,531 115,672 93,361
Interest expense 28,320 27,075 14,980
------------------------------------
Income before income tax expense
and equity in earnings of
unconsolidated subsidiary 97,211 88,597 78,381
Income tax expense 32,115 28,422 22,022
------------------------------------
Income before equity in earnings
of unconsolidated subsidiary 65,096 60,175 56,359
Equity in earnings of
unconsolidated subsidiary 1,558 2,654 1,700
------------------------------------
Net income $ 66,654 $ 62,829 $ 58,059
====================================
Earnings per common share:
Basic $ 2.20 $ 1.88 $ 2.47
====================================
Diluted $ 2.20 $ 1.86 $ 2.46
====================================
Weighted average common shares
outstanding
Basic 30,229,682 33,458,140 23,536,666
====================================
Diluted 30,306,649 33,695,752 23,572,259
====================================
AMERUS LIFE HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
December 31,
1999 1998
----------------------------------
Assets
Investments:
Securities available for sale at fair value:
Fixed maturity securities $ 6,680,755 $ 6,746,544
Equity securities 14,585 32,185
Short-term investments 155 22,428
Mortgage loans on real estate 615,186 566,403
Real estate 1,538 633
Policy loans 109,864 110,786
Other investments 269,158 205,790
----------------------------------
Total investments 7,691,241 7,684,769
Cash and cash equivalents 23,090 60,090
Accrued investment income 91,591 79,921
Premiums and fees receivable 6,910 4,385
Reinsurance receivables 17,535 6,174
Deferred policy acquisition costs 529,663 246,030
Value of business acquired 230,542 224,540
Investment in unconsolidated subsidiary 30,683 29,602
Goodwill 206,324 215,506
Property and equipment 23,046 23,249
Deferred income taxes 65,436 -
Other assets 393,461 401,239
Closed Block assets 1,412,622 1,453,305
----------------------------------
Total assets $ 10,722,144 $10,428,810
==================================
AMERUS LIFE HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
December 31,
1999 1998
-------------------------
Liabilities and Stockholders' Equity
Policy reserves and policyowner funds:
Future life and annuity policy benefits $7,390,991 $7,185,417
Policyowner funds 282,026 98,019
-------------------------
7,673,017 7,283,436
Accrued expenses 36,309 41,323
Dividends payable to policyowners 2,248 2,104
Policy and contract claims 12,221 10,452
Income taxes payable 19,323 9,574
Deferred income taxes - 11,398
Other liabilities 102,083 159,350
Debt 173,088 141,051
Closed Block liabilities 1,756,064 1,703,195
-------------------------
Total liabilities 9,774,353 9,361,883
-------------------------
Company-obligated mandatorily redeemable preferred
capital securities of subsidiary trusts
holding solely junior subordinated
debentures of the Company 214,791 216,729
-------------------------
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; 25,070,854
shares (net of 4,662,305 treasury
shares) in 1999 and 25,425,983 shares
(net of 4,308,936 treasury shares)
in 1998 25,071 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 282,831 290,091
Accumulated other comprehensive income (135,964) 26,711
Unearned compensation (323) (240)
Unallocated ESOP shares (1,378) -
Retained earnings 557,763 503,210
-------------------------
Total stockholders' equity 733,000 850,198
-------------------------
Total liabilities and
stockholders' equity $10,722,144 $10,428,810
=========================
AMERUS LIFE HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
Years ended December 31, 1999, 1998 and 1997
(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
Net income
Net unrealized (loss)
on securities (163,635)
Minimum pension
liability adjustment 960
Stock issued under
various incentive
plans, net of
forfeitures 30 788
Purchase of
treasury stock (385) (8,531)
Retirement of
company-obligated
mandatorily
redeemable preferred
capital securities 355
Dividends declared
on common stock
Adoption of leveraged ESOP
Allocation of shares
in leveraged ESOP 128
--------- --------- ---------- -----------
Balance at
December 31, 1999 $25,071 $5,000 $282,831 $(135,964)
========= ========= ========== ===========
AMERUS LIFE HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
Years ended December 31, 1999, 1998 and 1997
(Dollars in thousands)
Unallocated Total
Unearned ESOP Retained Shareholders
Compensation Shares 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
Net income 66,654 66,654
Net unrealized (loss)
on securities (163,635)
Minimum pension
liability adjustment 960
Stock issued under
various incentive
plans, net of
forfeitures (83) 735
Purchase of
treasury stock (8,916)
Retirement of
company-obligated
mandatorily
redeemable preferred
capital securities 355
Dividends declared on
common stock (12,101) (12,101)
Adoption of
leveraged ESOP (1,778) (1,778)
Allocation of shares
in leveraged ESOP 400 528
---------- ----------- --------- ------------
Balance at
December 31, 1999 $(323) $(1,378) $557,763 $733,000
========== =========== ========= ============
Indianapolis Life Insurance Company
Consolidated Historical GAAP Financials
($ in thousands)
Years Ended December 31,
1995 1996 1997 1998 9/30/99
--------------------------------------------
(Income Statement
Information)
Premiums 162,932 167,658 168,505 169,293 127,910
Fee Income 30,111 32,748 38,996 46,257 45,310
Net Investment Income 121,378 125,727 143,592 192,572 187,680
--------------------------------------------
Total Revenues 314,421 326,133 351,094 408,122 360,900
Surrenders 39,482 43,756 46,901 53,306 47,382
Life/Annuity/Endowments 48,093 43,622 43,001 45,883 41,297
Interest 33,459 35,306 40,728 48,321 38,902
Increase in Reserves 73,824 83,507 94,884 112,394 98,880
Net Commissions (a) 7,727 7,567 1,987 923 (1,958)
Net Insurance Expense 31,914 37,159 40,508 49,899 37,428
Amortization of DAC 19,357 23,444 24,815 31,233 31,218
Amortization of Goodwill 919 880 929 860 666
Amortization of PVFP 2,009 2,542 1,652 2,280 1,279
--------------------------------------------
Total Expenses 256,784 277,783 295,403 345,100 295,094
Policyholder Dividends 33,849 34,025 34,252 32,349 25,378
Federal Income Tax 8,269 5,724 7,817 8,429 11,812
Net After-Tax Realized
Gains &Losses (c) (889) (656) 1,772 389 (6,750)
Minority Interest - - - 1,441 3,937
Extraordinary Item (d) - - - - (22,937)
--------------------------------------------
Net Income 14,629 7,944 15,393 21,192 (5,008)
Operating Earnings 19,626 10,871 15,076 19,490 29,835
Years Ended December 31,
1995 1996 1997 1998 9/30/99
--------- --------- --------- --------- ----------
(Balance Sheet
Information)
Assets 1,923,883 2,137,049 2,996,575 4,864,691 59,569,131
Minority Interest - - 8,910 57,676 75,176
Total Liabilities 1,635,788 1,854,102 2,691,144 4,537,311 5,651,905
Retained Earnings 264,289 272,233 287,627 308,819 303,811
FAS 115 23,806 10,714 17,804 18,561 415
--------------------------------------------------
Total Equity 288,095 282,947 305,431 327,380 304,226
(a) Net of reinsurance allowances and DAC capitalization
(b) Excluding Realized Capital Gains/Losses, and before Minority
Interest
(c) Net of DAC Impact
(d) After-tax one-time charge due to settlement of class action
litigation and reinsurance contract adjustment payment to
Transamerica
Adjusted Operating Earnings Calculation
1995 1996 1997 1998 9/30/99
-------------------------------------------
Net Income Before
Minority Interest $14,629 $7,944 $15,393 $22,633 ($1,071)
Adjustments For:
Net realized (gains) /
losses on investments (A) 1,055 915 (4,435) (8,201) 7,763
Deferred Policy
Acquisition Costs (DPAC)
due to realized
gains or losses (B) (165) (258) 2,664 7,812 (1,013)
Settlement of
Class Action Lawsuit (C) - - - - 20,993
Reinsurance
Contract Adjustment (D) - - - - 1,944
Equity Add-On Tax (E) 4,107 2,271 1,454 (2,754) 1,219
-------------------------------------------
Adjusted
Operating Earnings $19,626 $10,871 $15,076 $19,490 $29,835
===========================================
(A) Represents realized gains or losses in investments Realized gains
or losses may vary widely between periods. Such amounts are
determined by management's of individual transactions and do not
necessarily correspond to the underlying operating trends.
(B) 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.
(C) Represents after tax one-time charge due to settlement of class
action litigation
(D) Represents after tax reinsurance contract adjustment payment to
Transamerica
(E) Represents the mutual life insurance company equity add-on tax,
which is applicable only to mutual life insurance companies.
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