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AMERICAN GENERAL REPORTS RECORD RESULTS; PRETAX 3RD QUARTER EARNINGS UP 13 PCT TO $233 MILLION; YEAR-TO-DATE UP 20 PCT TO A RECORD $690 MILLION

 HOUSTON, Oct. 21 /PRNewswire/ -- American General Corporation (NYSE: NYSE) today reported pretax earnings for the third quarter of $233 million, up 13 percent from $206 million a year ago. Third quarter net income before one-time tax-related adjustments (discussed below) was $149 million or $.69 per share, up from $138 million or $.63 per share for the 1992 period. Third quarter net income after tax-related adjustments of $30 million was $119 million or $.55 per share.
 Third quarter operating earnings were $148 million or $.68 per share, up 8 percent from $136 million or $.63 per share for the 1992 third quarter.
 In commenting on these results, Harold S. Hook, chairman and chief executive officer, said, "We would characterize third quarter results as 'balanced performance.' These results keep American General on track for another record year."
 Year-to-date Results: Pretax Earnings Up 20 Percent
 Pretax earnings reached a record $690 million for the first nine months of 1993, up 20 percent over the year-ago period. Year-to-date operating earnings were a record $439 million or $2.02 per share, up 11 percent from $394 million or $1.81 per share in the comparable 1992 period.
 Net income before one-time tax and accounting charges of $67 million was $444 million or $2.05 per share for the first nine months of 1993, an 11 percent increase from $399 million or $1.83 per share for the year-ago period.
 Compared to a year ago:
 -- Assets increased 10 percent to $43 billion;
 -- Revenues and deposits for the last 12 months increased 9 percent to $7.8 billion; and
 -- Shareholders' equity increased 5 percent to $4.8 billion or $22.08 per share.
 One-time Accounting Adjustments
 For the first quarter, American General reported a one-time charge of $37 million or $.17 per share resulting from the required adoption of two financial accounting standards related to accounting for postretirement benefits and for income taxes.
 The Revenue Reconciliation Act of 1993 increased the federal corporate income tax rate from 34 percent to 35 percent. As a result, the new income tax accounting standard required the company to record a one-time charge in the third quarter of $30 million or $.14 per share, reflecting the effect of the increase in corporate rates on taxes relating to prior periods.
 The effect of the increase in corporate rates on taxes relating to the current quarter was a charge of $2 million or $.01 per share.
 Strategic Network
 American General is organized as a strategic network of financial service companies, designed, in part, to achieve steady growth through periods of interest rate change.
 The effect of American General's strategic network is seen in the results thus far in 1993. Earnings growth in both the retirement annuities and special markets segments reflects asset growth and active management of interest crediting rates. Declining interest rates lower investment income of the home service segment. Conversely, declining rates reduce the cost of borrowed funds for the consumer finance segment.
 Segment Reporting
 To facilitate a better understanding of the company's financial performance, American General divides its results into corporate operations and business segments. Corporate operations include interest expense on corporate debt, expenses not allocated to the business segments, earnings on corporate assets, and realized investment gains. The four business segments are: Retirement Annuities, Consumer Finance, Insurance - Special Markets, and Insurance - Home Service.
 Retirement Annuities: Assets Increase 16 Percent
 Earnings for the retirement annuities segment were $38 million for the third quarter, up 11 percent from $34 million for the same 1992 period. The increase in earnings reflects continued strong asset growth and improved net interest margins. Assets increased 16 percent to $20 billion from $17 billion a year earlier.
 For 30 years, VALIC, American General's retirement annuity company, has been a leading provider of tax-qualified retirement plans for teachers and other employees of not-for-profit organizations.
 Consumer Finance: Earnings Up 21 Percent
 Consumer finance segment earnings were $53 million for the third quarter, up 21 percent from $43 million in the 1992 period. This increase reflects lower costs of borrowed funds, growth in finance receivables, and a changing product mix. Net finance receivables at Sept. 30, 1993, were $6.3 billion, a 7 percent increase from a year ago. Loan delinquencies were 2.5 percent of average receivables outstanding, compared to 2.3 percent a year earlier, and loan charge-offs were 2.2 percent, compared to 2.1 percent.
 American General Finance reaches more than 2 million customers through 1,200 branch offices in 39 states and Puerto Rico -- representing one of the largest consumer finance branch office networks in the United States.
 Insurance - Special Markets: Continued Sales Growth
 Insurance - special markets third quarter segment earnings of $18 million were essentially unchanged from the third quarter of 1992. Revenues and deposits for the quarter increased 5 percent to $380 million reflecting continued growth in life insurance and annuity sales.
 American General's special market companies provide life insurance and annuity products to targeted customer groups for financial and estate planning needs.
 Insurance - Home Service: Improving Fundamentals
 Insurance - home service segment earnings were $59 million for the third quarter, compared to $63 million in the 1992 third quarter. Business fundamentals of this segment continued to improve with the eighth consecutive quarter of growth in premium-in-force. However, lower investment income and higher income tax expenses reduced home service earnings.
 American General Life and Accident Insurance Company, with 6,500 sales employees serving 2.2 million households and over 10 million policies in force, is the largest organization in the United States dedicated exclusively to the home service method of selling and servicing life insurance products.
 Invested Assets Reach $30 billion
 American General's invested assets totaled $30 billion at Sept. 30, 1993, up 10 percent from a year earlier. The bond portfolio continues to have an average credit rating of AA-(Very Strong), and the mortgage loan portfolio continues to outperform the life insurance industry.
 The market value of bonds increases as interest rates decline. Due to the extended decline in interest rates, the market value of American General's $24 billion bond portfolio was $2.2 billion greater than book value at Sept. 30, 1993. Below-investment-grade bonds represented 2.7 percent of total bonds, down from 3.3 percent a year ago. Non- performing bonds totaled $43 million or 0.2 percent of the bond portfolio.
 American General's commercial mortgage loans totaled $3.0 billion, down from $3.5 billion a year ago. Non-performing commercial mortgage loans, which include both delinquent and restructured loans, were $168 million or 5.3 percent of the mortgage loans outstanding at Sept. 30, 1993, compared to $184 million or 5.6 percent at June 30, 1993. The comparable non-performing ratio for the life insurance industry at June 30, 1993 was 14.7 percent.
 Ratings Update
 On Sept. 21, 1993, Duff & Phelps Credit Rating Co. reaffirmed their highest claims-paying ability rating ("AAA") for VALIC and American General Life Insurance Company. Additionally, American General's principal life insurance subsidiaries hold the highest claims-paying ability ratings from Standard & Poor's ("AAA") and A.M. Best ("A++").
 Share Repurchases
 American General's current share repurchase program was established in April 1987. During the third quarter, the company purchased 242,800 shares of its common stock at a cost of $8 million. Year-to-date purchases under the program totaled 544,800 shares at a cost of $17 million.
 American General, with $43 billion in assets, is one of the nation's largest consumer financial services organizations. Headquartered in Houston, it is a leading provider of retirement annuities, consumer loans, and life insurance. American General Corporation (AGC) common stock is listed on the New York, Pacific, London, and Swiss stock exchanges.
 AMERICAN GENERAL CORPORATION
 Comparative Results
 (In thousands, except per share data -- Unaudited)
 Quarter Ended Sept. 30,
 1993 1992
 Revenues and Deposits $1,951,925 $1,870,141
 Business Segment Earnings:
 Retirement Annuities $ 37,454 $ 33,866
 Consumer Finance 52,365 43,136
 Insurance - Special Markets 18,299 18,198
 Insurance - Home Service 58,621 62,675
 Total Business Segment Earnings 166,739 157,875
 Corporate Operations:
 Interest on Corporate Debt (18,732) (21,778)
 Expenses Not Allocated to Segments (5,128) (5,086)
 Earnings on Corporate Assets 4,293 5,458
 Realized Investment Gains 1,551 1,534
 Total Corporate Operations (18,016) (19,872)
 Income Before Accounting Changes and
 Tax-Related Adjustments 148,723 138,003
 Accounting Changes, Net (A) -- --
 Tax-Related Adjustments (B) (30,044) --
 Net Income $ 118,679 $ 138,003
 Per Share:
 Income Before Accounting Changes and
 Tax-Related Adjustments $ .69 $ .63
 Accounting Changes, Net (A) -- --
 Tax-Related Adjustments (B) (.14) --
 Net Income $ .55 $ .63
 Average Shares Outstanding 216,872 217,427
 Pretax Earnings $ 232,814 $ 205,431
 Operating Earnings (C) 147,123 136,469
 Operating Earnings Per Share (C) .68 .63
 As of Sept. 30,
 1993 1992
 (In millions, except per share data)
 Assets $ 42,945 $ 38,882
 Shareholders' Equity 4,778 4,540
 Book Value Per Share 22.08 20.96
 Market Price Per Share 32.75 24.63
 (A) Accounting Changes. Effective Jan. 1, 1993, the company adopted two required accounting standards relating to postretirement benefits (SFAS 106) and income taxes (SFAS 109). This resulted in a one-time net cumulative charge of $37 million in the first quarter of 1993.
 (B) Tax-Related Adjustments. The Revenue Reconciliation Act of 1993 increased the federal corporate income tax rate from 34 percent to 35 percent. As required by SFAS 109, the company recorded a one-time charge of $30 million in the third quarter of 1993.
 (C) Operating Earnings. Under generally accepted accounting principles, operating earnings, which exclude after-tax realized investment gains and one-time accounting changes and tax-related adjustments, are not separately presented. They are presented here as supplemental information.
 AMERICAN GENERAL CORPORATION
 Comparative Results
 (In thousands, except per share data -- Unaudited)
 Nine Months Ended Sept. 30,
 1993 1992
 Revenues and Deposits $5,872,300 $5,435,160
 Business Segment Earnings:
 Retirement Annuities $ 124,797 $ 104,686
 Consumer Finance 155,827 115,310
 Insurance - Special Markets 54,355 52,046
 Insurance - Home Service 164,648 188,824
 Total Business Segment Earnings 499,627 460,866
 Corporate Operations:
 Interest on Corporate Debt (61,735) (63,681)
 Expenses Not Allocated to Segments (16,708) (19,940)
 Earnings on Corporate Assets 17,385 17,175
 Realized Investment Gains 4,844 4,532
 Total Corporate Operations (56,214) (61,914)
 Income Before Accounting Changes and
 Tax-Related Adjustments 443,413 398,952
 Accounting Changes, Net (A) (36,680) --
 Tax-Related Adjustments (B) (30,044) --
 Net Income $ 376,689 $ 398,952
 Per Share:
 Income Before Accounting Changes and
 Tax-Related Adjustments $ 2.05 $ 1.83
 Accounting Changes, Net (A) (.17) --
 Tax-Related Adjustments (B) (.14) --
 Net Income $ 1.74 $ 1.83
 Average Shares Outstanding 216,954 217,874
 Pretax Earnings $ 690,275 $ 577,577
 Operating Earnings (C) 438,520 394,420
 Operating Earnings Per Share (C) 2.02 1.81
 As of Sept. 30,
 1993 1992
 (In millions, except per share data)
 Assets $ 42,945 $ 38,882
 Shareholders' Equity 4,778 4,540
 Book Value Per Share 22.08 20.96
 Market Price Per Share 32.75 24.63
 (A) Accounting Changes. Effective January 1, 1993, the company adopted two required accounting standards relating to postretirement benefits (SFAS 106) and income taxes (SFAS 109). This resulted in a one-time net cumulative charge of $37 million in the first quarter of 1993.
 (B) Tax-Related Adjustments. The Revenue Reconciliation Act of 1993 increased the federal corporate income tax rate from 34 percent to 35 percent. As required by SFAS 109, the company recorded a one-time charge of $30 million in the third quarter of 1993.
 (C) Operating Earnings. Under generally accepted accounting principles, operating earnings, which exclude after-tax realized investment gains and one-time accounting changes and tax-related adjustments, are not separately presented. They are presented here as supplemental information.
 -0- 10/21/93
 /CONTACT: Robert D. Mrlik, director-investor relations, 713-831-1137, or John E. Pluhowski, director-corporate communications, 713-831-1149, both of American General Corporation/
 (AGC)


CO: American General Corporation ST: Texas IN: FIN SU: ERN

PS -- NY055 -- 5200 10/21/93 12:14 EDT
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Date:Oct 21, 1993
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