AmerUs Life Holdings Reports Third-Quarter 1998 Results.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)--Nov. 11, 1998--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 that third quarter 1998 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 expected, were $12.1 million, or $0.36 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 $13.0 million, or $0.56 per diluted share, in the third quarter of 1997. For the first nine months of 1998, operating earnings were $52.1 million, or $1.50 per diluted share, compared with $36.8 million, or $1.59 per diluted share, in the comparable period of 1997. Per-share results for both 1998 periods reflect an approximate ap·prox·i·mate v. To bring together, as cut edges of tissue. adj. 1. Relating to the contact surfaces, either proximal or distal, of two adjacent teeth; proximate. 2. Close together. 50 percent increase in shares outstanding as the result of the acquisition of AmVestors Financial Corporation in the fourth quarter of 1997. On October October: see month. 6, 1998, AmerUs announced that operating earnings for the third quarter would be adversely affected by an after-tax af·ter-tax also af·ter·tax adj. Relating to or being that which remains after payment, especially of income taxes: after-tax profits. loss of $6.5 million, or $0.19 per share, related to the decrease in market value of several limited partnership investments. "The fundamentals that drive the company continue to be strong. In particular, our year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. sales, mortality, persistency, and expenses have essentially met our expectations," 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. "The performance of our limited partnerships and other alternative investments distorted what otherwise would have been a very solid quarter for AmerUs." Effective in the fourth quarter, the company has instituted measures to reduce volatility Volatility 1. A statistical measure of the tendency of a market or security to rise or fall sharply within a period of time. 2. A variable in option pricing formulas that denotes the extent to which the return of the underlying asset will fluctuate between now and the in earnings by liquidating or restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). its limited partnership and other alternative investments. "While we continue to believe those investments will produce long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. economic value, it is very clear that the short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. earnings volatility they introduce is unacceptable," Brooks said. Net income, which includes all gains and losses from sales of investments, was $6.9 million, or $0.20 per share on a diluted basis, for the 1998 third quarter, compared with $16.5 million, or $0.71 per diluted share, in the third quarter of 1997. These quarterly figures include an after-tax realized loss Realized Loss A loss recognized when assets are sold for a price lower than the original purchase price. Notes: A portion of the realized loss may be applied against a capital gain or realized profit to reduce taxes. of $5.5 million in 1998 compared to an after-tax realized gain 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. of $3.6 million in 1997. Net income for the nine-month period of 1998 was $49.5 million, or $1.43 per diluted share, compared with $45.5 million, or $1.96 per diluted share, a year ago. Included in the net income figures were an after-tax realized capital loss of $1.6 million in 1998 and an after-tax realized capital gain of $9.3 million in 1997. The company noted that it achieved strong sales gains, despite weaker sales trends for the industry as a whole. Repetitive life insurance sales, excluding variable life, for the nine-month period in 1998 increased 15.7 percent over the same period in 1997. "We're we're Contraction of we are. we're we are achieving the results we anticipated from the marketing, product and distribution initiatives we unveiled during 1998," Brooks said. Reflecting the impact of AmerUs' acquisitions of AmVestors and Delta Life Corporation, total 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 increased substantially, to $175.2 million in the third quarter of 1998 from $11.9 million in the comparable quarter of 1997, and to $564.9 million in the nine months of 1998 from $37.5 million in the prior year. On a proforma Proforma A financial projection based on assumptions. basis, including AmVestors' and Delta's 1997 results, annuity sales for the quarter and nine-month period were down 21.1 percent and 10.6 percent, respectively, with increases at AmVestors' offset by continued lower sales at Delta. AMAL Corp., of which AmerUs has a 34 percent ownership interest, continued to show strong sales results, up $5.4 million, or 26.7 percent and $18.8 million, or 31.8 percent, for the quarter and nine-month periods, respectively. Total revenues from premium and product charges for the quarter and year-to-date, excluding the closed block, increased 81.5 percent and 70.4 percent, respectively, from the comparable periods in 1997, primarily reflecting the contributions of AmVestors and Delta. During the third quarter, AmerUs completed a previously announced $75 million stock buyback Stock buyback A corporation's purchase of its own outstanding stock, usually in order to raise the company's earnings per share. stock buyback See buyback. program, under which it purchased 2,711,000 shares of its stock. The company also noted that under an additional $25 million buyback Buyback The buying back of outstanding shares (repurchase) by a company in order to reduce the number of shares on the market. Companies will buyback shares either to increase the value of shares still available (reducing supply), or to eliminate any threats by shareholders who may program, it had, as of the end of October 1998, purchased 1,349,019 shares of its stock at a total cost of $21.2 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 September September: see month. 30, 1998, AmerUs Life Holdings' total assets were $10.3 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 $888.2 million, including FAS 115. 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 10K and 10Q reports filed with the Securities and Exchange Commission. -0-
AMERUS LIFE HOLDINGS, INC
Operating Earnings
For the Nine For the Three
Months Ended Months Ended
September 30, September 30,
1998 1997 1998 1997
(In thousands, except per share amounts)
Net income $49,482 $45,497 $6,862 $16,475
Net realized (gains)
losses on investments (A) (1,554) (9,307) 5,455 (3,567)
Core realized gains or
(losses)(B) 5,134 - 1,548 -
Deferred Policy Acquisition
Cost (DPAC Impact)(C) (913) 595 (1,754) 43
-------- -------- --------- ---------
Operating Earnings $52,149 $36,785 $12,111 $12,951
======= ======= ======= =======
Operating Earnings per
common share (D):
Basic $1.52 $1.59 $0.36 $0.56
Diluted $1.50 $1.59 $0.36 $0.56
(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 debt or convertible preferred
stock 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 nine months
ended and three months ended September 30, 1998 is calculated
using 34.4 million and 33.7 million weighted average shares
outstanding; diluted operating earnings per share for the three
months and nine months ended September 30, 1998 is calculated
using 34.0 million shares and 34.7 million shares, respectively;
diluted operating earnings per common share for the nine months
and three months ended September 30, 1997 is calculated using
23.2 million weighted average shares outstanding.
AMERUS LIFE HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
September 30, December 31,
1998 1997
---------------------------
(Unaudited)
Assets:
Investments:
Securities available-for-sale
at fair value
Fixed maturity securities 6,513,412 $6,851,427
Equity securities 78,652 61,480
Short - term investments 62,233 12,595
Securities held for trading
purposes at fair value
Fixed maturity securities 3,788 22,955
Equity securities 830 -
Mortgage loans on real estate 539,070 462,473
Real estate 445 8,670
Policy loans 110,852 117,865
Other investments 302,443 158,073
-----------------------
Total investments 7,611,725 7,695,538
Cash 99,987 58,081
Accrued investment income 85,330 84,713
Premiums and fees receivable 3,195 3,445
Reinsurance receivables 4,380 6,203
Deferred policy acquisition costs 167,313 118,896
Value of business acquired 245,194 266,014
Investment in unconsolidated 28,385 26,849
subsidiaries
Goodwill 217,874 220,250
Property and equipment 23,197 22,863
Other assets 363,856 359,308
Closed block assets 1,466,627 1,391,848
-----------------------
Total assets $10,317,063 $10,254,008
==============================
AMERUS LIFE HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
September 30, December 31,
1998 1997
--------------------------
(Unaudited)
Liabilities and Stockholders'
Equity:
Liabilities:
Policy reserves and
policyowner funds:
Future life and annuity $7,057,809 $7,074,444
policy benefit
Policyowner funds 107,650 89,641
-------------------------
Total 7,165,459 7,164,085
Accrued expenses 40,668 39,095
Dividends payable to 832 1,575
policyowners
Policy and contract claims 14,539 4,548
Income taxes payable 14,043 12,753
Deferred income taxes 11,424 16,914
Other liabilities 118,056 111,180
Debt 141,149 266,435
Closed block liabilities 1,691,701 1,623,432
-------------------------
Total Liabilities 9,197,871 9,240,017
Company-obligated
manditorily-redeemable
preferred capital securities
of subsidiary trust
holding solely junior
subordinated
debentures of the Company 230,963 86,000
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 1998; 75,000,000 shares
authorized 1997; 27,036,168 shares issued and outstanding in 1998;
29,734,918 shares issued and
outstanding in 1997 27,036 29,735
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 311,745 383,686
Accumulated other comprehensive
income 51,778 55,747
Retained earnings 492,917 453,823
Unearned compensation (247) -
------------------------
Total stockholders' 888,229 927,991
equity
------------------------
Total liabilities and $10,317,063 $10,254,008
stockholders' equity ========================
AMERUS LIFE HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except for per share data)
(Unaudited)
Nine Months Ended Three Months Ended
September 30, September 30,
------------------------------------
1998 1997 1998 1997
-------------------------------------
Revenues
Insurance premiums $61,368 $33,522 $22,642 $12,594
Universal life and annuity 54,287 34,332 20,035 10,921
product charges
Net investment income 375,991 149,774 115,997 50,548
Realized gains on investments 2,390 14,510 (8,393) 4,987
Contribution from the 24,036 21,652 7,200 8,242
Closed Block
------------------ ------------------
518,072 253,790 157,481 87,292
Benefits and expenses
Policyowner benefits 334,590 129,716 115,304 42,718
Underwriting, acquisition
and insurance
expenses 56,180 35,514 17,731 13,076
Amortization of deferred
policy
acquisition costs 38,848 16,767 8,160 5,794
Dividends to policyowners 1,619 835 909 661
------------------ ------------------
431,237 182,832 142,104 62,249
Income from operations 86,835 70,958 15,377 25,043
Interest expense 19,617 8,941 7,007 2,980
------------------ ------------------
Income before income tax expense
and equity in earnings
of unconsolidated
subsidiary 67,218 62,017 8,370 22,063
Income tax expense 19,271 17,694 1,952 6,108
------------------ ------------------
Income before equity
in earnings of
unconsolidated subsidiary 47,947 44,323 6,418 15,955
Equity in earnings
of unconsolidated
subsidiary 1,535 1,174 444 520
------------------ ------------------
Net income $49,482 $45,497 $6,862 $16,475
================== ==================
Earnings per common share:
Basic $1.44 $1.96 $0.20 $0.71
================== ==================
Diluted $1.43 $1.96 $0.20 $0.71
================== ==================
Weighted average common
shares outstanding:
Basic 34,393,079 23,155,989 33,726,221 23,155,989
========================= ========================
Diluted 34,695,353 23,155,989 33,951,365 23,155,989
========================= ========================
AMERUS LIFE HOLDINGS, INC.
Consolidated Statements of Shareholders' Equity
Common Stock Additional Unrealized
Class Class Paid-in Appreciation
A B Capital (Depreciation)
of
Available
for
Sale
Securities
-----------------------------------
Balance at December 31, 1996 14,500 5,000 -- 35,300
Net income -- -- -- --
Net unrealized depreciation -- -- -- 23,412
Dividends declared -- -- -- --
on common stock
Issuance of common stock 3,656 -- 51,371 --
-----------------------------------
Balance at September 30, 1997 18,156 5,000 51,371 58,712
Net income -- -- -- --
Net unrealized depreciation -- -- -- (2,965)
Dividends declared on -- -- -- --
common stock
Issuance of common stock 11,579 -- 332,315 --
-----------------------------------
Balance at December 31, 1997 29,735 5,000 383,686 55,747
Net income -- -- -- --
Net unrealized depreciation -- -- -- (3,969)
Dividends declared on -- -- -- --
common stock
Purchase of treasury stock (2,711) -- (72,240) --
Issuance of Capital -- -- (87) --
Securities
Stock issued under
various incentive
plans, net of forfeitures 12 -- 386 --
Issuance of common stock -- -- -- --
------------------------------------
Balance at 27,036 5,000 311,745 51,778
September 30, 1998 ====================================
AMERUS LIFE HOLDINGS, INC.
Consolidated Statements of Shareholders' Equity
Total
Unearned Retained Shareholders'
Compensation Earnings Equity
--------- -----------
Balance at December 31, 1996 402,710 457,510
Net income -- 45,497 45,497
Net unrealized depreciation -- - 23,412
Dividends declared on -- (4,632) (4,632)
common stock
Issuance of common stock -- 55,027
--------------------------------------
Balance at September 30, 1997 443,575 576,814
Net income -- 12,562 12,562
Net unrealized depreciation -- - (2,965)
Dividends declared on -- (2,314) (2,314)
common stock
Issuance of common stock -- - 343,894
--------------------------------------
Balance at December 31, 1997 453,823 927,991
Net income -- 49,482 49,482
Net unrealized depreciation -- - (3,969)
Dividends declared on -- (10,388) (10,388)
common stock
Purchase of treasury stock -- - (74,951)
Issuance of Capital -- (87)
Securities
Stock issued under various
incentive
plans, net of forfeitures (247) - 151
Issuance of common stock -- - -
-------------------------------------
Balance at September 30, 1998 (247) 492,917 888,229
=====================================
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