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KEMPER CORPORATION REPORTS FOURTH-QUARTER OPERATING LOSS OF $36.3 MILLION, 1992 OPERATING EARNINGS OF $15.6 MILLION

 LONG GROVE, Ill., Feb. 11 /PRNewswire/ -- Kemper Corporation (NYSE:KEM) today reported an operating loss (including discontinued operations) of $36.3 million, or $.74 per share, for the quarter ended Dec. 31, 1992, compared with operating earnings of $38.7 million, or $.80 per share, for the same period in 1991.
 For the fourth quarter of 1992, the company reported a net loss (including discontinued operations) of $198.2 million, or $4.02 per share, compared with net income of $43.9 million, or $.91 per share, for the same three-month period of 1991. Revenue from continuing operations for the 1992 period declined to $357.1 million from $613.0 million in 1991, primarily due to additions to the company's provision for real estate-related losses.
 As previously announced, the fourth-quarter 1992 results include an increase in the company's provision for real estate-related losses of $263.6 million pretax, or $173.5 million after tax. Including these real estate-related losses, the after-tax realized investment losses were $161.9 million, or $3.28 per share, in the fourth quarter. This amount also includes $2.2 million after tax in write-downs of certain below investment-grade securities. In the fourth quarter of 1991, the company reported after-tax realized investment gains of $5.2 million, or $.11 per share. The 1991 results reflected after-tax charges of $89.1 million for real estate-related losses and $17.2 million to write down certain below investment-grade securities.
 The increase in Kemper's provision for real estate-related losses primarily reflects the company's fourth-quarter decision to reserve for its estimates of the entire current deficiency on its loans without regard to credit from values available from other projects, collateral or guarantees. The provision includes both additions to reserves on loans and write-downs of certain assets transferred to real estate owned.
 The reserve for the entire current deficiency prudently recognizes the effect of the depression in the real estate markets, which has reduced the number of projects providing positive support to the portfolio. Our actions reflect the increased intensity the company is applying to its real estate-related portfolio in this economic environment,'' said David B. Mathis, chairman and chief executive officer.
 Over the first three quarters of 1992, the company added $64.5 million in the aggregate to its provision for real estate-related losses. If there is further deterioration in the real estate markets in which the company's portfolio is located, the company will consider subsequent additions to its provision.
 It also is important to note that most of the reserves and write downs do not affect our life insurance companies. Our life companies' statutory capital ratios are solid, and the companies are positioned for growth,'' Mathis added.
 Twelve-Month Results
 Kemper Corporation reported operating earnings (including discontinued operations) of $15.6 million, or $.32 per share, for 1992, compared with $202.2 million, or $4.20 per share, in 1991. Lower investment income, catastrophe losses, higher-than-expected litigation costs and the adoption of SFAS 106, which changes the way postretirement benefits are accounted for, all contributed to the earnings decline. Lower investment income was due to a combination of factors, including foregone investment income, lower investment yields and the company's actions to reposition the life insurance segment's investment portfolio. It also reflects higher real estate joint venture operating losses, which increased to $70.2 million in 1992, from $28.7 million in 1991, mainly due to $22 million in write-downs by joint ventures in the fourth quarter of 1992. Most of the joint venture operating losses are in the other operations and corporate category.
 Kemper's asset management, risk management and property-casualty
businesses performed well in 1992,'' Mathis said. These gains, however, were outweighed by disappointing performance in our other segments. To improve profitability, we've taken added steps to reduce expenses within our life insurance and securities brokerage businesses.''
 The one-time effect of the adoption of SFAS 106 is a $27.0 million, or $.55 per share, after-tax charge to 1992 operating earnings. This charge primarily affected the securities brokerage and discontinued property-casualty operations.
 The company reported a net loss (including discontinued operations) for 1992 of $203.4 million, or $4.16 per share, compared with net income of $204.5 million, or $4.25 per share, in 1991. Revenue from continuing operations declined to $2.20 billion in 1992 from $2.49 billion in 1991, primarily due to increased realized investment losses and lower investment income.
 The net loss in 1992 includes after-tax realized investment losses of $219.0 million, or $4.48 per share, related to a $221.1 million after tax increase in the company's provision for real estate-related losses and $22.4 million after tax in write-downs and restructurings of certain below investment-grade securities. In 1991, the company reported after- tax realized investment gains of $2.4 million, or $.05 per share. The 1991 results were net of charges of $89.1 million after tax for real estate-related losses and $64.5 million after tax to write down certain below investment-grade securities. (See Kemper Corporation's consolidated results.)
 KEMPER CORPORATION
 Asset Management -- Financial Highlights
 (In millions, except per share data and assets under management)
 Periods ended Dec. 31 12 months 3 months
 1992 1991 1992 1991
 Net income $ 88.3 $ 85.0 $ 24.5 $ 19.3
 Per share 1.81 1.77 .50 .41
 Revenue 600.9 540.9 152.8 140.9
 Assets under 12-31-92 12-31-91
 management at $69.3 $65.9
 (in billions)
 Kemper's asset management operations reported net income of $88.3 million, or $1.81 per share, for 1992, compared with $85.0 million, or $1.77 per share, for 1991.
 Kemper Financial Services performed well in 1992 despite significant cash outlays to enhance shareholder information systems and expand distribution channels,'' Mathis said.
 For the year, equity and fixed-income assets under management rose by 29.5 percent and 13.0 percent, respectively. Other assets under management fell by 3.5 percent, primarily reflecting a decline in investors' interest in money market accounts in the low interest rate environment.
 We continue to see strong prospects for our asset management business with the increasing interest in mutual funds from retirees and baby boomers searching for alternative investments to traditional savings vehicles,'' Mathis said.
 KEMPER CORPORATION
 Life Insurance
 Financial Highlights
 (in millions, except per share data)
 Periods ended Dec. 31 12 months 3 months
 1992 1991 1992 1991
 Operating earnings $ 44.9 $ 92.7 $ 0.7 $ 18.3
 Per share .92 1.94 .02 .38
 Net income (loss) (25.5) 45.8 (20.0) 13.2
 Per share (.52) .95 (.40) .27
 Revenue 668.4 803.4 169.0 200.5
 Sales 1,077.0 1,051.4 257.2 216.5
 The life insurance segment reported operating earnings of $44.9 million, or $.92 per share, for 1992, compared with $92.7 million, or $1.94 per share, for 1991. The results reflect lower investment income due to a combination of factors, including foregone investment income, lower investment yields and the company's actions to reposition the life insurance segment's investment portfolio.
 Lower investment income and an increased level of nonperforming real estate-related assets resulted in higher acquisition costs amortized in 1992. Also, higher guaranty fund assessments adversely affected the segment's 1992 results.
 The segment's operating earnings include after-tax gains of $3.3 million and $6.6 million in 1992 and 1991, respectively, from sales of blocks of fixed annuity business in reinsurance transactions. In connection with a reinsurance transaction effective in the fourth quarter of 1992, Kemper Investors Life Insurance Company sold $518.3 million in fixed annuity liabilities, together with related assets which included $154.4 million in mortgage loans, to Fidelity Life Association, a mutual insurance company that shares common management with Kemper's life insurance subsidiaries.
 For 1992, the segment reported after-tax realized investment losses of $70.4 million, or $1.44 per share, compared with $47.0 million, or $.99 per share, in 1991. The 1992 losses include $74.3 million after tax related to increases in the provision for real estate-related losses and $22.1 million after tax in write-downs and restructurings of certain below investment-grade securities. The 1991 losses include charges of $80.4 million after tax for real estate-related losses and $57.3 million after tax in write-downs of certain below investment grade securities.
 We expect improved profitability in 1993 for our life companies as a result of increased variable annuity sales, improved spread income and reduced expenses,'' Mathis said.
 Risk Management
 Kemper Corporation's share of the operating results of Kemper Risk Management Services totaled $9.1 million in 1992, compared with $10.0 million in 1991. The decline reflects Kemper's reduced share in the business, which dropped to 75 percent in 1992, from 87.5 percent for most of 1991. Kemper Corporation's share of the operating results of Kemper Risk Management Services decreases to 62.5 percent in 1993. In 1992, Kemper Risk Management Services' sales grew by 14.5 percent over 1991 levels on an annualized basis.
 KEMPER CORPORATION
 Securities Brokerage
 Financial Highlights
 (in millions, except per share data)
 Periods ended Dec. 31 12 months 3 months
 1992 1991 1992 1991
 Net income (loss) $ (38.4) $ 6.2 $ (13.1) $ 1.5
 Per share (.79) 0.13 (.27) 0.03
 Revenue 677.5 663.7 163.2 170.3
 The securities brokerage operations recorded a net loss of $38.4 million, or $.79 per share, in 1992, compared with net income of $6.2 million, or $.13 per share, in 1991. The 1992 results reflect the previously announced charges of $13.2 million after tax taken to increase legal reserves, as well as charges of $11.0 million for federal income tax adjustments, $10.0 million after tax related to the adoption of SFAS 106 and $3.0 million after tax for severance payments.
 In light of these bottom line results, our plan is to restore profitability through a disciplined program of expense reduction and greater focus on our brokerage operation's acknowledged retail strength,'' Mathis said.
 KEMPER CORPORATION
 Reinsurance
 Financial Highlights
 (in millions, except per share data)
 Periods ended Dec. 21 12 months 3 months
 1992 1991 1992 1991
 Operating earnings (loss) $ (23.6) $ 20.6 $ (21.5) $ 6.8
 Per share (.48) .43 (.44) .14
 Net income (loss) (17.0) 35.4 (17.7) 9.1
 Per share (.35) .74 (.36) .19
 Revenue 603.1 586.0 150.2 165.6
 Net premiums
 written 558.8 526.0 129.7 158.5
 Statutory combined
 ratio (pct.) 117.9 105.3 140.2 100.7
 Kemper's reinsurance segment reported an operating loss of $23.6 million, or $.48 per share, in 1992, compared with operating earnings of $20.6 million, or $.43 per share, in 1991.
 Contributing to 1992's operating loss were catastrophe losses, including after-tax charges of $30.4 million related to hurricanes Andrew and Iniki. The loss also reflects a decline in investment income to $51.4 million in 1992 from $57.6 million in 1991, as a result of lower market interest rates along with reduced average invested assets.
 After-tax realized investment gains totaled $6.6 million, or $.13 per share, in 1992, compared with $14.8 million, or $.31 per share, in 1991. The 1991 after-tax realized investment results reflected favorable stock market conditions.
 The catastrophes of 1992 are creating a welcome tightening in the
property catastrophe reinsurance market,'' Mathis said. In the fourth quarter of 1992, we added $50 million in capital to our reinsurance operations to better position them to take advantage of the expected market upturn.''
 KEMPER CORPORATION
 Other Operations and Corporate
 Financial Highlights
 (in millions)
 Periods ended Dec. 31 12 months 3 months
 1992 1991 1992 1991
 Real estate subsidiaries $ (55.9) $ (19.4)$ (34.0) $ (11.5)
 Holding companies & other (32.4) (19.2) (8.5) (5.0)
 Operating loss (88.3) (38.6) (42.5) (16.5)
 Realized investment loss (153.2) (24.0) (146.5) (24.0)
 Net loss $(241.5) $(62.6) $(189.0) $ (40.5)
 Per share $ (4.94) $(1.31) $ (3.84) $ (.85)
 The other operations and corporate category includes the real estate subsidiaries and the holding company income and expenses of both Kemper Corporation and Kemper Financial Companies, Inc. The category reported an operating loss of $88.3 million, or $1.80 per share, for 1992, compared with an operating loss of $38.6 million, or $.82 per share, for 1991. The 1992 operating results reflect higher joint venture operating losses, including the previously mentioned $22 million in write-downs by joint ventures in the fourth quarter of 1992, and an increase in holding company overhead, including interest expense. The higher net loss in 1992 reflects increases in this category's provision for real estate- related losses.
 KEMPER CORPORATION
 Discontinued Operations
 Property-Casualty Insurance
 Financial Highlights
 (in millions, except per share data)
 Periods ended Dec. 31 12 months 3 months
 1992 1991 1992 1991
 Operating earnings $ 23.6 $ 26.2 $ 13.0 $ 7.6
 Per share .48 .54 .26 .15
 Net income 21.6 84.7 14.5 39.5
 Per share .45 1.76 .30 .82
 Revenue 565.7 646.0 146.2 191.2
 Net premiums
 written 526.2 525.1 130.0 132.4
 Statutory combined
 ratio (pct.) 99.0 101.6 94.3 102.0
 Excluding one-time charges of $10.9 million after tax related to SFAS 106, Kemper's discontinued operations (the property-casualty insurance segment) reported 1992 operating earnings of $34.5 million, or $.71 per share, compared with $26.2 million, or $.54 per share, in 1991. The improvement in the operations' statutory combined ratio reflects the segment's disciplined underwriting approach and favorable loss experience.
 The decrease in 1992 net income includes after-tax realized investment losses of $2.0 million, or $.03 per share, compared with gains of $58.6 million after tax, or $1.22 per share. In 1991, the segment capitalized on favorable stock market conditions.
 Kemper Corporation is a nonoperating holding company with subsidiaries in asset management, life insurance, risk management services, securities brokerage, reinsurance and property-casualty insurance.
 -0- 2/11/93
 /NOTE TO EDITOR: Operating earnings/loss denotes net income/loss excluding realized investment results/
 /CONTACTS: Janice Kalmar, 708-540-4465 or Ira Nathanson, 708-540-4463, both of Kemper Corporation communications department/
 (KEM)


CO: Kemper Corporation ST: Illinois IN: INS SU: ERN

TM -- NY101 -- 5968 02/11/93 20:05 EST
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