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NWNL COMPANIES STRENGTHENS BALANCE SHEET IN THIRD QUARTER AND OPERATIONS REMAIN STRONG; NET INCOME IS $11.9 MILLION

       NWNL COMPANIES STRENGTHENS BALANCE SHEET IN THIRD QUARTER
       AND OPERATIONS REMAIN STRONG; NET INCOME IS $11.9 MILLION
    MINNEAPOLIS, Nov. 11 /PRNewswire/ -- The NWNL Companies (NYSE: NWN) strengthened its balance sheet in the third quarter of 1991 by substantially improving the quality and liquidity of its investments, and its business operations continued to produce favorable results.
    Third quarter income from continuing operations excluding realized investment losses was up 6 percent to $18.1 million, or $1.34 per common share on a primary basis ($1.24 fully diluted), compared with $17.0 million, or $1.37 per share, in the third quarter of 1990. Per-share figures for 1991 are affected by dividends on preferred stock issued in 1991.
    Net income for the quarter was $11.9 million compared with $12.1 million for the same period last year.
    "In response to growing public concern about the insurance industry's ability to meet its obligations, NWNL is moving very aggressively to improve the quality and liquidity of its investments," NWNL President and Chief Executive Officer John G. Turner said.
    "However, the price of higher asset quality and greater liquidity is generally lower investment yield," he continued.  "Third quarter earnings reflected this impact, and we expect fourth quarter earnings to be affected as well.  At the beginning of 1992, however, we have the opportunity to annually adjust crediting rates on most of our existing individual life insurance and annuity contracts, consistent with industry practice.  Given the current emphasis on financial strength in the industry, we believe that improved asset quality and liquidity are in the best interest of both our shareholders and policyholders."
    Evidence of NWNL's balance sheet improvement included:
    -- The sale of $150 million, or about 15 percent, of below investment grade securities (both marketable bonds and private placements) in the third quarter.
    -- Below investment grade marketable bonds decreased to 3.1 percent of invested assets as of Sept. 30, 1991, from 4.3 percent at the end of the second quarter.  Similarly, below investment grade private placements declined to 8.8 percent of invested assets on Sept. 30, 1991, from 9.6 percent at the end of the prior quarter.
    -- Commercial mortgage loans have declined by $183 million, or more than 10 percent, during the first three quarters of 1991 and now make up less than 23 percent of invested assets, down from 30 percent at the beginning of 1990.
    -- New commercial mortgage loan problems continued to emerge at a slower rate during the third quarter, continuing a trend which began in 1990.
    -- NWNL's mortgage problems, according to the industry definition, comprised 3.5 percent of the mortgage loan portfolio on Sept. 30, a decline of 30 percent since the beginning of 1991.  In contrast, mortgage loan problems for the entire industry are increasing, standing at 5.3 percent of total mortgages according to the most recent report by the American Council of Life Insurance.
    -- NWNL's total problem investments (securities and mortgages combined) according to the industry definition decreased to 3.26 percent of invested assets on Sept. 30, 1991, compared with 3.69 percent on June 30.
    Turner said that he is pleased with the performance of NWNL's business operations.  "Operating income for the year is up in individual insurance, employee benefits and life and health reinsurance, and sales have also been very good overall in these areas," he said.  "Results like these tell us that our strategies are working."
    Highlights of sales achievements for the year to date include annuity sales in the individual insurance segment, which are significantly higher than last year at this time, and a gain of 7 percent in new individual life insurance premium through Sept. 30. In comparison, life insurance sales for the industry as a whole are down slightly.
    In addition, NWNL's group premium for the first three quarters of the year was up compared with 1990, and life and health reinsurance sales for the first nine months of 1991 were nearly double the total for the same period last year.
    Several factors had a negative effect on NWNL's third quarter results.
    Pension earnings were down significantly from the same period last year.  Reduced investment yield was a significant factor in the decrease.  NWNL's GIC sales and, as a result, liabilities have been diminishing since 1989 due to difficult market conditions and the consequent lack of acceptable profit margins.
    Net income for the third quarter was affected by realized investment losses.  Writeoffs and additions to reserves for problem investments were higher than in recent quarters but were partially offset by increased gains on the sales of assets.
    Chartwell Reinsurance Company's contribution to NWNL's earnings was 22 cents per share lower due to a change in business mix and an increase in its effective tax rate.  Turner said he does not expect these factors to have a permanent impact on Chartwell's future earnings.  NWNL is pursuing negotiations with outside parties to reduce its ownership in Chartwell.
    NWNL incurred assessments by the Minnesota Life and Health Guaranty Association.  The impact on the bottom line was 8 cents per share for the nine-month period.
    NWNL's total insurance in force at the end of the third quarter reached $103.5 billion compared with $95.7 billion at the same time in 1990.  Assets rose to $8.7 billion from $8.4 billion at Sept. 30, 1990.
    The NWNL Companies is a Minneapolis-based holding company specializing in insurance and financial services.
                        THE NWNL COMPANIES, INC
                    FINANCIAL HIGHLIGHTS (UNAUDITED)
                 (In thousands, except per-share data)
                                                  Three Months Ended
                                                 9/30/91      9/30/90
    Premium revenues                            $145,947     $137,093
    Total revenues                               349,209      330,869
    Income from continuing operations:
     Income excluding realized
      investment gains (losses) (a)               18,115       17,047
     Realized investment gains (losses)
      (after tax) (a)                             (6,192)      (4,953)
     Income from continuing operations            11,923       12,094
    Loss from discontinued operations                  0            0
    Net income                                   $11,923      $12,094
    Per common share:
    Primary:
     Income from continuing operations:
      Income excluding realized
       investment gains (losses) (a)               $1.34        $1.37
      Realized investment gains (losses)
       (after tax) (a)                             (0.52)       (0.40)
      Income from continuing operations             0.82         0.97
     Loss from discontinued operations              0.00         0.00
    Net income                                     $0.82        $0.97
    Fully diluted:
     Income from continuing operations:
      Income excluding realized
       investment gains (losses) (a)               $1.24        $1.37
      Realized investment gains (losses)
       (after tax) (a)                             (0.47)       (0.40)
      Income from continuing operations             0.77         0.97
     Loss from discontinued operations              0.00         0.00
    Net income                                     $0.77        $0.97
    Average common shares outstanding:
    Primary                                       11,924       12,428
    Fully diluted                                 13,270       12,428
                                                   Nine Months Ended
                                                 9/30/91      9/30/90(b)
    Premium revenues                            $430,226     $404,799
    Total revenues                             1,033,398      997,905
    Income from continuing operations:
     Income excluding realized
      investment gains (losses) (a)               56,164       68,624
     Realized investment gains (losses)
      (after tax) (a)                            (18,464)     (19,990)
     Income from continuing operations            37,700       48,634
    Loss from discontinued operations             (3,569)     (11,585)
    Net income                                   $34,131      $37,049
    Per common share:
    Primary:
     Income from continuing operations:
      Income excluding realized
       investment gains (losses) (a)               $4.35        $5.46
      Realized investment gains (losses)
       (after tax) (a)                             (1.53)       (1.59)
      Income from continuing operations             2.82         3.87
     Loss from discontinued operations             (0.30)       (0.92)
    Net income                                     $2.52        $2.95
    Fully diluted:
     Income from continuing operations:
      Income excluding realized
       investment gains (losses) (a)               $4.01        $5.46
      Realized investment gains (losses)
       (after tax) (a)                             (1.37)       (1.59)
      Income from continuing operations             2.64         3.87
     Loss from discontinued operations             (0.27)       (0.92)
    Net income                                     $2.37        $2.95
    Average common shares outstanding:
    Primary                                       12,086       12,558
    Fully diluted                                 13,432       12,558
    (a) Income excluding realized investment gains and losses and after tax realized investment gains (losses) are not presented on the statement of operations, however they are shown here for comparison purposes.
    (b) Included in income for the nine months ended Sept. 30, 1990 is the favorable effect from a reduction of accrued income taxes of $13,000,000 ($1.04 per share) as a result of the settlement of an IRS examination.
    -0-                    11/11/91
    /CONTACT:  Jan Pedersen of The NWNL Companies, 612-372-5623/
    (NWN) CO:  The NWNL Companies ST:  Minnesota IN:  INS SU:  ERN KH-JS -- MN001 -- 3145 11/11/91 16:12 EST
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Date:Nov 11, 1991
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