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NWNL COMPANIES' ANNUAL AND QUARTERLY NET INCOME HIT HIGHEST LEVELS SINCE 1989 DEMUTUALIZATION

 -- 1992 net income increases 26 percent to $59.3 million
 -- Fourth quarter 1992 net income rises 38 percent to $17.6 million
 -- Problem investments and related earnings charges decline
 -- Total sales for 1992 below 1991 levels
 MINNEAPOLIS, Feb. 8 /PRNewswire/ -- The NWNL Companies' (NYSE: NWN) net income for 1992 reached the highest annual level since the company demutualized in 1989, and net income for the fourth quarter of the year was also a record since demutualization.
 Net income for 1992 totaled $59.3 million compared with $46.9 million in 1991. For the fourth quarter of 1992, net income was $17.6 million, up from $12.8 million for the final quarter of the previous year.
 Earnings per common share on a primary basis rose to $4.04 for 1992 from $3.40 for 1991. Fully diluted earnings per common share for 1992 were $3.77 compared with $3.19 for the year before.
 Income from continuing operations excluding realized investment gains and losses also increased on both an annual and quarterly basis. For 1992, it was $82.8 million, up 19 percent from 1991. The total for the fourth quarter of 1992 rose 40 percent over the same period of 1991, reaching $22.7 million.
 NWNL President and Chief Executive Officer John G. Turner said, "During the past two years, we've been working on major initiatives to position the company for profitable growth. Those initiatives have been successful in resolving the issues we faced, and I believe that our 1992 financial performance reflects this success. As a result, we can now concentrate on achieving growth in revenue and earnings."
 The company's major initiatives are:
 Asset quality improvement. NWNL has significantly reduced its below investment grade bonds and commercial mortgages since the end of 1990. This improvement in asset quality, combined with a gradual improvement in the economy, has reduced the company's remaining exposure on problem investments.
 The decline in problem investments has, in turn, led to reduced write-offs and allowances for these problem investments. Write-offs and allowances for 1992 were $31 million, after tax, compared with $42 million, after tax, in 1991. (These losses are reported as a component of realized investment gains and losses.)
 Expense reduction. Early in 1992, NWNL announced its objective of reducing annualized expenses by $30 million by the end of 1994. The company exceeded that amount by identifying more than $34 million of reductions and has largely implemented these changes.
 This initiative resulted in pre-tax savings of approximately $10 million in 1992, which is net of $6.6 million of restructuring charges taken in connection with expense reduction changes and an extraordinary charge. The company will realize most of the financial benefits of expense reduction in 1993, with the full impact taking effect in 1994.
 Capital structure. NWNL has taken several major steps to improve its capital structure in the past two years. The most recent was the October 1992 sale of common stock which generated $50.3 million in net proceeds.
 These actions provided funds to support the growth of the company's businesses and improve NWNL's financial strength as viewed by rating agencies.
 Focus on core operations. NWNL has narrowed its business focus and now concentrates on its core operations in individual life insurance and annuities, employee benefits, and life and health reinsurance. These operations continue to refine their strategies to take advantage of new market trends, and they are launching new initiatives to assure profitable growth.
 In the aggregate, the earnings performance of NWNL's businesses was strong in 1992. Operating income for its businesses increased 19 percent compared with 1991.
 Total sales in 1992 as measured by new premium did not reach the previous year's level. While 1992 sales of group insurance and life and health reinsurance exceeded 1991 amounts, sales of individual life insurance and annuities declined, and the cessation of Guaranteed Investment Contract sales in mid-1991 also affected year-to-year comparisons.
 Turner said, "Recent sales activity has been encouraging in the Employee Benefits and Retirement Plans divisions, and this activity will be reflected in new premium resultso?r 1993. We are also taking initiatives to increase sales in other areas, and we are putting great emphasis on these activities in 1993."
 Results in NWNL's operations for 1992 included:
 -- Operating income in the individual insurance segment rose 37 percent over 1991. Life insurance sales as measured by total premium declined 27 percent in 1992, and annuity sales were down 35 percent. However, sales of variable universal life insurance and variable annuities rose significantly in 1992 over the previous year.
 -- The employee benefits segment achieved record sales and operating earnings in 1992.
 -- Life and health reinsurance reported a reduction in operating income compared with 1991 due to less favorable morbidity and mortality. However, this division achieved a return on equity of 35 percent in 1992 and also increased its sales.
 -- Pension had a loss on a net income basis in 1992.
 Insurance in force increased to $108 billion at Dec. 31, 1992, and total assets at year-end 1992 were $9.0 billion.
 The NWNL Companies is a Minneapolis-based holding company specializing in the life and health insurance and annuity businesses.
 THE NWNL COMPANIES, INC.
 Financial Highlights
 (Unaudited)
 (In thousands, except per share data)
 Three Months Ended 12 Months Ended
 12/31/92 12/31/91 12/31/92 12/31/91
 Premium revenues (a) $151,929 $137,897 $589,920 $547,994
 Total revenues 353,144 336,140 1,378,004 1,339,790
 Income from continuing
 operations:
 Income excluding
 realized investment
 gains (losses) (b) 22,679 16,159 82,785 69,746
 Realized investment
 gains (losses)
 (after tax) (b) (5,099) (3,628) (22,222) (22,515)
 Income from continuing
 operations before
 extraordinary charge 17,580 12,531 60,563 47,231
 Income (loss) from
 discontinued operations
 (net of tax) -- 219 -- (350)
 Extraordinary charge on
 early extinguishment of
 debt (net of tax) -- -- (1,251) --
 Net income $17,580 $12,750 $59,312 $46,881
 Per common share:
 Primary:
 Income from continuing
 operations:
 Income excluding
 realized investment gains
 (losses) (b) $1.52 $1.15 $5.93 $5.30
 Realized investment gains
 (losses) (after tax) (b) (0.38) (0.30) (1.79) (1.87)
 Income from continuing
 operations before
 extraordinary charge 1.14 0.85 4.14 3.43
 Income (loss) from
 discontinued operations
 (net of tax) -- 0.02 -- (0.03)
 Extraordinary charge on
 early extinguishment of
 debt (net of tax) -- -- (0.10) --
 Net income $1.14 $0.87 $4.04 $3.40
 Fully diluted:
 Income from continuing
 operations:
 Income excluding
 realized investment gains
 (losses) (b) $1.42 $1.07 $5.46 $4.89
 Realized investment gains
 (losses) (after tax) (b) (0.35) (0.27) (1.60) (1.68)
 Income from continuing
 operations before
 extraordinary charge 1.07 0.80 3.86 3.21
 Income (loss) from
 discontinued operations
 (net of tax) -- 0.02 -- (0.02)
 Extraordinary charge on
 early extinguishment of
 debt (net of tax) -- -- (0.09) --
 Net income $1.07 $0.82 $3.77 $3.19
 Net income available
 to common shareholders $15,270 $10,436 $50,067 $40,943
 Average common and common
 equivalent shares (primary) 13,360 11,943 12,400 12,046
 Average common shares
 assuming maximum
 dilution (fully diluted) 14,779 13,291 13,894 13,423
 New premiums (c):
 Individual life $14,361 $18,243 $60,242 $82,067
 Individual annuity 81,562 109,096 310,790 475,394
 Group life 6,290 3,848 29,087 21,570
 Group health 13,665 17,727 57,681 54,095
 Group premium equivalents 19,443 47,548 150,952 147,287
 Reinsurance 4,642 1,559 27,680 22,603
 Retirement plan deposits 4,426 2,461 23,165 3,117
 Guaranteed investment
 contract deposits 695 3,870 3,666 235,489
 Total $145,084 $204,352 $663,263 $1,041,622
 (a) Premium revenues are determined in accordance with generally accepted accounting principles. Premium revenues are larger when presented on a statutory basis than when presented in accordance with generally accepted accounting principles.
 (b) Income excluding realized investment gains (losses) and after tax realized investment gains (losses) are not presented on the statement of operations, however they are shown here for analysis purposes.
 (c) New premiums represent amounts received on new business written. New premiums are annualized for individual and group life and health insurance. Group premium equivalents represent amounts received on Administrative Services Only and similar contracts.
 -0- 2/8/93
 /CONTACT: Jan Pedersen of the NWNL Companies, 612-372-5623/
 (NWN)


CO: The NWNL Companies ST: Minnesota IN: INS SU: ERN

TS-MP -- MNM002 -- 3911 02/08/93 08:09 EST
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Publication:PR Newswire
Date:Feb 8, 1993
Words:1433
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