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NWNL REPORTS PRETAX OPERATING EARNINGS INCREASE OF 24 PERCENT IN THE THIRD QUARTER

 Third Quarter and Year-to-Date Highlights
 -- Third quarter pretax operating earnings increased 24 percent
 -- Third quarter net income increased 18 percent
 -- Year-to-date net income increased 24 percent
 -- NWNL received rating upgrades from Moody's, S&P
 MINNEAPOLIS, Oct. 28 /PRNewswire/ -- The NWNL Companies (NYSE: NWN) today reported third quarter pretax earnings (excluding realized investment gains and losses) of $41.8 million, an increase of 24 percent compared with $33.6 million reported in the same period last year.
 Third Quarter Only
 (In millions, except per share amounts)
 1993 1992 Pct. change
 Pretax operating income $41.8 $33.6 24
 After-tax operating income 25.3 22.9 10
 Income after realized investment losses 20.8 16.5 26
 Net income $19.4 $16.5 18
 PER COMMON SHARE FULLY DILUTED
 After-tax operating income (excluding
 effect of tax rate increase) $.83 $.78 6
 After-tax operating income .77 .78 (1)
 Income after realized investment losses .63 .55 15
 Net income $.58 $.55 5
 After-tax third quarter operating income (excluding realized investment gains and losses) was $25.3 million, an increase of 10 percent compared with $22.9 million reported in the third quarter last year. On a fully diluted basis, third quarter operating income was 77 cents per common share (83 cents before the effect of the 1-percent tax rate increase) compared with 78 cents per common share a year ago.
 Third quarter net income reached $19.4 million, an increase of 18 percent compared with $16.5 million a year ago. On a fully diluted basis, third quarter net income was 58 cents per common share, compared with 55 cents per common share for the same period last year.
 Third quarter net income reflects a $1.5 million reduction (5 cents per common share fully diluted) for the 1-percent rate increase in the federal income tax (retroactive to Jan. 1, 1993) resulting from the 1993 tax act. It also reflects a $1.4 million extraordinary charge (5 cents per common share fully diluted) stemming from the prepayment of $22.9 million of bank debt and related interest rate swaps.
 "Our third quarter results continue NWNL's strong earnings performance for the year," said John G. Turner, NWNL chairman and chief executive officer. "We're especially pleased with the 18-percent increase in net income, despite some one-time charges."
 YEAR-TO-DATE RESULTS
 (In millions, except per share amounts)
 Nine months
 1993 1992 Pct. change
 Pretax operating income $119.5 $90.3 32
 After-tax operating income 76.7 60.1 28
 Income after realized investment losses 60.4 43.0 40
 Net income $51.5 $41.7 24
 PER COMMON SHARE, FULLY DILUTED
 After-tax operating income (excluding effect
 of tax rate increase) $2.41 $2.04 18
 After-tax operating income 2.35 2.04 15
 Income after realized investment losses 1.81 1.40 29
 Net income $1.52 $1.35 13
 Year-to-date results set new records for operating income, net income and net income per share. Net income for the nine months reached this record level after the effects of extraordinary charges and accounting changes: the $1.4 million after-tax extraordinary charge in the third quarter of 1993 stemming from the prepayment of $22.9 million of bank debt and related interest swaps; and a $7.5 million after-tax charge in the first quarter of 1993 for the cumulative effect of the adoption of new accounting pronouncements. Excluding extraordinary charges and accounting changes, income for the first nine months of 1993 was $60.4 million, an increase of 40 percent over $43 million in the same period last year.
 OPERATIONS
 Total third quarter sales as measured by new premium increased 3 percent compared to third quarter 1992. For the first nine months of 1993, total sales as measured by new premium were up 18 percent compared with the same period last year.
 "Our individual insurance segment had very strong sales in the third quarter, with individual life and annuity new premium up 17 percent compared with last year," said John H Flittie, NWNL president and chief operating officer. "While group life and health, and reinsurance sales were off this quarter, we're optimistic that both of these segments will meet or exceed 1992 sales for the year."
 In the individual segment, third quarter operating income was down slightly due to the effect of the tax rate increase. However, year-to- date operating income for this segment increased 11 percent over the same period last year, excluding a $1.5 million effect of the tax rate increase on the segment and the one-time $4.5 million after-tax contribution to earnings during the first quarter of 1992 resulting from the SFAS No. 97 effects of repricing certain life policies for the 1990 Deferred Acquisition Cost (DAC) Tax.
 "Northern Life, our unit that specializes in tax-sheltered annuities for K-12 teachers, continued its strong sales and earnings performance in the third quarter," Flittie said. "Individual annuity new premium increased 23 percent for the quarter, and over the last 12 months, invested assets have grown 19 percent. If you exclude the approximately $1 million effect of less favorable life insurance mortality, Northern's pretax operating earnings increased 21 percent in the third quarter compared with a year ago."
 In the employee benefits segment, operating income for the third quarter was unchanged compared to a year go, but the segment posted a 20-percent increase for the nine-month period ended Sept. 30, 1993. Operating income for the life and health reinsurance segment increased 32 percent during the third quarter and was up 27 percent for the first nine months of 1993 compared with the same period last year. Third quarter deposits for NWNL's 401(k) retirement plan operation reached $23.3 million, double third quarter 1992 deposits. For the year to date, 401(k) deposits were $77 million, more than three times the deposit levels for full-year 1992.
 Aside from the results in core operations, NWNL's Guaranteed Investment Contract (GIC) and Par Group Annuity lines of business reported a small net loss, reflecting the comparatively high level of problem investments in this declining block of business. NWNL ceased writing new GIC business in 1991.
 NWNL's net exposure on its problem investments as of Sept. 30, 1993, was $242 million, down 12 percent from $275 million at year-end 1992, and down 22 percent from $310 million at Sept. 30, 1992. On an after- tax basis, write-offs and allowances for problem investments in the third quarter were $5.3 million, down from $7.6 million in the second quarter of 1993 and down from $6.6 million in the third quarter last year.
 "The third quarter was rewarding in many respects," Turner said. "In addition to strong financial results, we received several affirmations from external constituencies that we are on the right track. Two of these were rating upgrades from Moody's and Standard & Poor's. We're pleased that the rating agencies are recognizing the steps we've taken to strengthen our financial position."
 As of Sept. 30, 1993, insurance in force was $114.5 billion, and total assets were $9.8 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 Nine Months Ended
 9/30/93(d) 9/30/92 9/30/93(d) 9/30/92
 Premium revenues(a) $151,086 $146,950 $482,835 $437,991
 Total revenues 364,183 344,134 1,105,044 1,024,860
 Income excluding
 realized investment
 gains (losses)(b) 25,259 22,890 76,739 60,106
 Realized investment gains
 (losses)(after tax)(b) (4,386) (6,366) (16,335) (17,123)
 Income before extra-
 ordinary charge and
 u?lative effect of
 accounting changes 20,873 16,524 60,404 42,983
 Extraordinary charge (1,443) -- (1,443) (1,251)
 Cumulative effect of
 accounting changes -- -- (7,464) --
 Net income $19,430 $16,524 $51,497 $41,732
 Per common share:
 Primary:
 Income excluding
 realized investment
 gains (losses)(b) $.83 $.84 $2.55 $2.20
 Realized investment gains
 (losses) (after tax)(b) (.16) (.26) (.59) (.71)
 Income before extraordinary
 charge and cumulative effect
 of accounting changes .67 .58 1.96 1.49
 Extraordinary charge (.05) -- (.05) (.05)
 Cumulative effect of
 accounting changes -- -- (.27) --
 Net income $.62 $.58 $1.64 $1.44
 Fully diluted:
 Income excluding
 realized investment
 gains (losses)(b) $.77 $.78 $2.35 $2.04
 Realized investment gains
 (losses) (after tax)(b) (.14) (.23) (.54) (.64)
 Income before extraordinary
 charge and cumulative effect
 of accounting changes .63 .55 1.81 1.40
 Extraordinary charge (.05) -- (.05) (.05)
 Cumulative effect of
 accounting changes -- -- (.24) --
 Net income $.58 $.55 $1.52 $1.35
 Average common and
 common equivalent
 shares (primary) 27,869 24,361 27,656 24,152
 Average common shares
 assuming maximum dilution
 (fully diluted) 30,629 27,030 30,488 26,934
 New premiums (c):
 Individual life $15,821 $14,547 $46,792 $45,881
 Individual annuity 91,886 77,181 257,581 229,228
 Group life 4,543 9,188 20,528 22,797
 Group health 14,996 19,877 64,984 44,016
 Group premium
 equivalents 15,272 23,297 121,204 131,509
 Reinsurance 2,940 7,954 21,871 23,038
 Retirement plan deposits 23,287 10,547 76,569 18,739
 Guaranteed investment
 contract deposits -- 760 -- 2,971
 Total $168,745 $163,351 $609,529 $518,179
 (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.
 (d) Net income reflects $1.5 million in additional tax expense due to the 1 percent federal tax rate increase enacted in August, 1993.
 -0- 10/28/93
 /CONTACT: Ruth Weber of The NWNL Companies, 612-372-5628/
 (NWN)


CO: The NWNL Companies, Inc. ST: Minnesota IN: INS SU: ERN

DS-DB -- MN009 -- 8183 10/28/93 17:17 EDT
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Date:Oct 28, 1993
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