American National Announces Fourth Quarter and Full Year 2018 Results
February 25 2019 - 5:04PM
American National Insurance Company (NASDAQ: ANAT) reported net
income for the year ended December 31, 2018 of $159.0 million, down
from $493.7 million for 2017 largely due to the effects of tax
changes for 2017 and new accounting guidance for 2018. Net income
for the year ended December 31, 2018 was reduced by the inclusion
of $84.7 million in net unrealized losses on equity securities as
required by new accounting guidance(1) which was not effective in
2017. Additionally, net income for 2017 was increased by a $206.4
million benefit resulting from the enactment of the U.S Tax Cut and
Jobs Act of 2017 ("Tax Reform"). Net income for 2018 included
after-tax realized investment earnings of $28.8 million or $1.07
per diluted share compared to $113.7 million or $4.22 per share for
2017.
After-tax adjusted operating income(2) for 2018 increased to
$214.9 million or $7.99 per diluted share compared to $173.6
million or $6.44 per diluted share for 2017. The increase is
primarily attributable to improved performance in our Life,
Corporate and Other, and Health segments.
For the fourth quarter of 2018, we reported a net loss of $117.4
million or $4.37 per diluted share primarily due to the inclusion
of $199.8 million in net unrealized losses on equity securities as
required by new accounting guidance(1) which was not effective in
2017. Also, net income for the fourth quarter of 2017 was increased
by the $206.4 million benefit resulting from the enactment of Tax
Reform. Net income for the fourth quarter of 2018 included
after-tax realized investment earnings of $8.1 million or $0.30 per
diluted share compared to $56.4 million or $2.09 per diluted share
for the same period of 2017 as a result of increased gains from
sales of equity securities and certain real estate holdings during
2017.
After-tax adjusted operating income(2) for the fourth quarter of
2018 was $74.3 million or $2.76 per diluted share compared to $81.8
million or $3.04 per diluted share for the same period of 2017. The
decrease was primarily due to lower earnings in our Annuity and
Property and Casualty segments.
(1) Reflects the January 1, 2018 adoption of ASU 2016-01,
Financial Instruments: Recognition and Measurement of Financial
Assets and Financial Liabilities (2) In the fourth quarter of 2018,
American National replaced the use of the term "operating income"
with "Adjusted operating income." Adjusted operating income is a
non-GAAP measure as defined beneath the table below.
Additional Highlights Summary:
- Premiums and other policy revenues for the year ended December
31, 2018 increased 8.6% or $198.0 million to $2.5 billion compared
to $2.3 billion for the same period last year.
- Total life insurance in force increased by $7.3 billion to
$110.4 billion since December 31, 2017.
American National Consolidated Financial
Highlights |
|
(Preliminary & Unaudited in
millions) |
|
|
|
|
|
|
|
|
|
Quarters Ended December 31, |
|
Years Ended December 31, |
|
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
Revenues (GAAP
basis) |
|
$ |
518.7 |
|
|
$ |
924.4 |
|
|
$ |
3,326.4 |
|
|
$ |
3,411.0 |
|
|
Net realized investment
gains |
|
(7.4 |
) |
|
(43.6 |
) |
|
(16.9 |
) |
|
(91.2 |
) |
|
Net losses on equity
securities |
|
252.9 |
|
|
— |
|
|
107.2 |
|
|
— |
|
|
Adjusted Revenues(1)
(non-GAAP basis)* |
|
$ |
764.2 |
|
|
$ |
880.8 |
|
|
$ |
3,416.7 |
|
|
$ |
3,319.8 |
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) (GAAP
basis) |
|
$ |
(117.4 |
) |
|
$ |
344.6 |
|
|
$ |
159.0 |
|
|
$ |
493.7 |
|
|
Net
losses on equity securities |
|
199.8 |
|
|
— |
|
|
84.7 |
|
|
— |
|
|
Net
realized investment earnings |
|
(8.1 |
) |
|
(56.4 |
) |
|
(28.8 |
) |
|
(113.7 |
) |
|
Effects
of Tax Reform(3) |
|
— |
|
|
(206.4 |
) |
|
— |
|
|
(206.4 |
) |
|
Adjusted operating
income(2) (non-GAAP basis)* |
|
$ |
74.3 |
|
|
$ |
81.8 |
|
|
$ |
214.9 |
|
|
$ |
173.6 |
|
|
|
|
|
|
|
|
|
|
|
|
Per diluted share |
|
|
|
|
|
|
|
|
|
Net income (loss) (GAAP
basis) |
|
$ |
(4.37 |
) |
|
$ |
12.78 |
|
|
$ |
5.91 |
|
|
$ |
18.31 |
|
|
Net
losses on equity securities |
|
7.43 |
|
|
— |
|
|
3.15 |
|
|
— |
|
|
Net
realized investment earnings |
|
(0.30 |
) |
|
(2.09 |
) |
|
(1.07 |
) |
|
(4.22 |
) |
|
Effects
of Tax Reform(3) |
|
— |
|
|
(7.65 |
) |
|
— |
|
|
(7.65 |
) |
|
Adjusted operating
income(2) (non-GAAP basis)* |
|
$ |
2.76 |
|
|
$ |
3.04 |
|
|
$ |
7.99 |
|
|
$ |
6.44 |
|
|
|
|
|
|
|
|
|
|
|
|
Book value per diluted
share |
|
|
|
|
|
$ |
195.32 |
|
|
$ |
194.61 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number
of diluted shares upon which computations are based |
|
26,893,823 |
|
|
26,968,634 |
|
|
26,916,643 |
|
|
26,960,695 |
|
|
* These measures are non-GAAP because they are not based on
accounting principles generally accepted in the United
States. These non-GAAP measures are used by the Company to
enhance comparability between periods and to eliminate the impact
of certain excluded items listed in the footnotes below, which can
fluctuate in a manner unrelated to core operations due to factors
such as market volatility, interest rate changes and credit risk.
In the opinion of the Company’s management, inclusion of these
non-GAAP measures is meaningful to provide investors with an
understanding of the significant factors that comprise the
Company’s periodic results of operations and financial
condition.
(1) Adjusted revenues exclude the pre-tax impact of net gains
(losses) on equity securities and net realized investment gains
(losses).
(2) Adjusted operating income excludes the after-tax impact of
net gains (losses) on equity securities and realized investment
earnings. Realized investment earnings are comprised of realized
investment gains (losses), equity in earnings of unconsolidated
affiliates and income from non-controlling interests. Adjusted
operating income also excludes the effect of a change in tax laws
and tax rates at enactment date.
(3) In 2018, our effective tax rate was favorably impacted
by accelerating certain deductions into the 2017 tax year.
American National is a family of companies that has, on a
consolidated GAAP basis, $26.9 billion in assets, $21.6 billion in
liabilities and $5.3 billion in stockholders’ equity. American
National, founded in 1905 and headquartered in Galveston, Texas,
and its subsidiaries offer a broad line of products and services,
which include life insurance, annuities, health insurance, credit
insurance, pension products and property and casualty insurance.
The American National companies operate in all 50 states. Major
insurance subsidiaries include American National Life Insurance
Company of Texas, American National Life Insurance Company of New
York, American National Property and Casualty Company, Garden State
Life Insurance Company, Standard Life and Accident Insurance
Company, Farm Family Casualty Insurance Company and United Farm
Family Insurance Company.
American National Insurance Company, the parent company, has
been assigned an ‘A’ rating by A.M. Best Company and an ‘A’ rating
by Standard & Poor’s, both of which are nationally recognized
rating agencies, and is licensed to conduct the business of
insurance in all states except New York.
For more information, including company news and investor
relations information, visit the company’s web site at
www.AmericanNational.com.
Contact: Timothy A. Walsh (409) 766-6553
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