Delaware | 001-11462 | 13-3427277 | ||
(State or other jurisdiction | (Commission | (IRS Employer | ||
of incorporation) | File Number) | Identification No.) |
(a) | Not applicable. | |
(b) | Not applicable. | |
(c) | Not applicable. | |
(d) | Exhibits. |
Exhibit Number | Description of Exhibits | |
99.1
|
Registrants July 26, 2011 press release. |
DELPHI FINANCIAL GROUP, INC. |
||||
/s/ ROBERT ROSENKRANZ | ||||
Robert Rosenkranz | ||||
Chairman of the Board and Chief Executive Officer (Principal Executive Officer) | ||||
![]() |
News |
| Core premium income of $366.5 million, an increase of 8.5% from the second quarter of 2010; | ||
| Annuity sales of $149.0 million, an increase of 90.9% from the second quarter of 2010; | ||
| Total premium and fee income of $385.0 million, an increase of 9.2% from the second quarter of 2010; | ||
| Combined ratio of 93.8%, a decrease of 80 basis points from the second quarter of 2010; | ||
| Net investment income of $83.2 million, an increase of 6.3% from the second quarter of 2010; | ||
| Annualized operating return on beginning shareholders equity in the second quarter of 2011 of 12.2%, compared to 12.9% in the second quarter of 2010; | ||
| Diluted book value per share of $29.28 at June 30, 2011, up 14.2% from June 30, 2010. |
(1) | Information regarding this and other non-GAAP financial measures included in this press release is contained under Non-GAAP Financial Measures above. | ||
(2) | In October 2010, the FASB issued guidance limiting the extent to which an insurer may capitalize costs incurred in the acquisition of an insurance contract. The guidance provides that, in order to be capitalized, such costs must be incremental and directly related to the acquisition of a new or renewal insurance contract. Insurers may only capitalize costs related to successful efforts in attaining a contract and advertising costs may only be capitalized if certain direct response advertising criteria are met. This guidance is effective for interim and annual reporting periods beginning after December 15, 2011, with either prospective or retrospective adoption permitted. Effective January 1, 2011, Delphi elected to adopt this guidance on a retrospective basis, which resulted in the write-off of the portion of its cost of business acquired that does not satisfy the standards for being capitalized under such guidance, as well as the restatement of certain of Delphis financial information for prior periods. Accordingly, the 2010 financial information has been restated to reduce operating earnings per share for the second quarter of 2010 by $0.04, and to reduce diluted book value per share at June 30, 2010 by $1.10. Detailed financial data concerning these matters is contained in the Companys Second Quarter 2011 Financial Supplement, which is available on the Companys website at www.delphifin.com/financial/stats11.html. |
Contact: |
Bernard J. Kilkelly | |
Vice President, Investor Relations | ||
Delphi Financial Group, Inc. | ||
Phone: |
212-303-4349 | |
E-mail: |
bkilkelly@dlfi.com |
Three Months Ended | Six Months Ended | |||||||||||||||
Income Statement Data | 06/30/2011 | 06/30/2010 | 06/30/2011 | 06/30/2010 | ||||||||||||
Operating earnings |
$ | 48,697 | $ | 43,818 | $ | 100,203 | $ | 90,153 | ||||||||
Net realized investment gains (losses) (A) |
730 | (9,018 | ) | (552 | ) | (18,837 | ) | |||||||||
Loss on early retirement of senior notes (B) |
| (138 | ) | | (138 | ) | ||||||||||
Net income attributable to shareholders (GAAP measure) |
$ | 49,427 | $ | 34,662 | $ | 99,651 | $ | 71,178 | ||||||||
Diluted results per share of common stock attributable to shareholders: |
||||||||||||||||
Operating earnings |
$ | 0.86 | $ | 0.79 | $ | 1.76 | $ | 1.62 | ||||||||
Net realized
investment gains (losses) (A) |
0.01 | (0.17 | ) | (0.01 | ) | (0.34 | ) | |||||||||
Loss on
early retirement of senior notes (B) |
| (0.00 | ) | | (0.00 | ) | ||||||||||
Net income attributable to shareholders (GAAP measure) |
$ | 0.87 | $ | 0.62 | $ | 1.75 | $ | 1.28 | ||||||||
Annualized operating return on beginning shareholders equity |
12.2 | % | 12.9 | % | 13.1 | % | 13.9 | % | ||||||||
Annualized net income return on beginning shareholders equity (GAAP measure) |
12.4 | % | 10.2 | % | 13.0 | % | 11.0 | % |
(A) | Net of an income tax expense (benefit) of $0.4 million, $(4.9) million, $(0.3) million, $(10.1) million, or $0.01 per diluted share, $(0.09) per diluted share, $(0.01) per diluted share, $(0.18) per diluted share for the three and six months ended 06/30/2011 and 06/30/2010, respectively. The tax effect is calculated using the Companys statutory tax rate of 35%. | |
(B) | Net of an income tax benefit of $0.07 million or $0.00 per diluted share for the three and six months ended 06/30/2010. The tax effect is calculated using the Companys statutory tax rate of 35%. |
Balance Sheet Data | 6/30/2011 | 12/31/2010 | ||||||
Shareholders equity, excluding accumulated other comprehensive income |
$ | 1,596,205 | $ | 1,499,564 | ||||
Add: Accumulated other comprehensive income |
78,231 | 30,932 | ||||||
Shareholders equity (GAAP measure) |
$ | 1,674,436 | $ | 1,530,496 | ||||
Diluted book value per share of common stock, excluding accumulated other comprehensive
income |
$ | 28.00 | $ | 26.57 | ||||
Add: Accumulated other comprehensive income |
1.28 | 0.52 | ||||||
Diluted book value per share of common stock (GAAP measure) |
$ | 29.28 | $ | 27.09 | ||||
Three Months Ended | Six Months Ended | |||||||||||||||
06/30/2011 | 06/30/2010 | 06/30/2011 | 06/30/2010 | |||||||||||||
Revenue: |
||||||||||||||||
Premium and fee income |
$ | 385,012 | $ | 352,566 | $ | 761,411 | $ | 700,329 | ||||||||
Net investment income |
83,191 | 78,234 | 175,485 | 162,284 | ||||||||||||
Net realized investment gains (losses): |
||||||||||||||||
Total other than temporary impairment losses |
(7,775 | ) | (21,659 | ) | (15,314 | ) | (48,932 | ) | ||||||||
Less: Portion of other than temporary impairment
losses
recognized in other comprehensive income |
2,432 | 826 | 953 | 5,101 | ||||||||||||
Net impairment losses recognized in earnings |
(5,343 | ) | (20,833 | ) | (14,361 | ) | (43,831 | ) | ||||||||
Other net realized investment gains |
6,466 | 6,959 | 13,512 | 14,851 | ||||||||||||
Net realized investment gains (losses) |
1,123 | (13,874 | ) | (849 | ) | (28,980 | ) | |||||||||
Loss on early retirement of senior notes |
| (212 | ) | | (212 | ) | ||||||||||
Total revenue |
469,326 | 416,714 | 936,047 | 833,421 | ||||||||||||
Benefits and expenses: |
||||||||||||||||
Benefits, claims and interest credited to policyholders |
273,163 | 244,687 | 544,428 | 491,008 | ||||||||||||
Commissions and expenses |
121,137 | 116,460 | 240,575 | 229,789 | ||||||||||||
394,300 | 361,147 | 785,003 | 720,797 | |||||||||||||
Operating income |
75,026 | 55,567 | 151,044 | 112,624 | ||||||||||||
Interest expense: |
||||||||||||||||
Corporate debt |
6,007 | 8,264 | 12,017 | 15,587 | ||||||||||||
Junior subordinated debentures |
3,248 | 3,248 | 6,490 | 6,489 | ||||||||||||
Income tax expense |
15,762 | 9,385 | 32,157 | 19,297 | ||||||||||||
Net income |
50,009 | 34,670 | 100,380 | 71,251 | ||||||||||||
Less: Net income attributable to noncontrolling
interest |
582 | 8 | 729 | 73 | ||||||||||||
Net income attributable to shareholders |
$ | 49,427 | $ | 34,662 | $ | 99,651 | $ | 71,178 | ||||||||
Basic results per share of common stock: |
||||||||||||||||
Net income attributable to shareholders |
$ | 0.88 | $ | 0.63 | $ | 1.78 | $ | 1.29 | ||||||||
Weighted average shares outstanding |
56,091 | 55,287 | 56,006 | 55,224 | ||||||||||||
Diluted results per share of common stock: |
||||||||||||||||
Net income attributable to shareholders |
$ | 0.87 | $ | 0.62 | $ | 1.75 | $ | 1.28 | ||||||||
Weighted average shares outstanding |
56,868 | 55,765 | 56,801 | 55,611 | ||||||||||||
Dividends paid per share of common stock |
$ | 0.12 | $ | 0.10 | $ | 0.23 | $ | 0.20 |
06/30/2011 | 12/31/2010 | |||||||
Assets: |
||||||||
Investments: |
||||||||
Fixed maturity securities, available for sale |
$ | 6,181,482 | $ | 5,717,090 | ||||
Short-term investments |
228,486 | 334,215 | ||||||
Other investments |
614,180 | 498,678 | ||||||
7,024,148 | 6,549,983 | |||||||
Cash |
90,271 | 72,806 | ||||||
Cost of business acquired |
140,872 | 149,325 | ||||||
Reinsurance receivables |
357,010 | 360,255 | ||||||
Goodwill |
93,929 | 93,929 | ||||||
Other assets |
337,274 | 311,577 | ||||||
Assets held in separate account |
126,213 | 123,674 | ||||||
Total assets |
$ | 8,169,717 | $ | 7,661,549 | ||||
Liabilities and Equity: |
||||||||
Policy liabilities and accruals |
$ | 3,098,737 | $ | 2,970,389 | ||||
Policyholder account balances |
1,884,029 | 1,753,744 | ||||||
Corporate debt |
375,000 | 375,000 | ||||||
Junior subordinated debentures |
175,000 | 175,000 | ||||||
Other liabilities and policyholder funds |
830,157 | 728,612 | ||||||
Liabilities related to separate account |
126,213 | 123,674 | ||||||
Total liabilities |
6,489,136 | 6,126,419 | ||||||
Equity: |
||||||||
Class A Common Stock |
567 | 565 | ||||||
Class B Common Stock |
60 | 60 | ||||||
Additional paid-in capital |
692,696 | 682,816 | ||||||
Accumulated other comprehensive income |
78,231 | 30,932 | ||||||
Retained earnings |
1,100,128 | 1,013,369 | ||||||
Treasury stock, at cost |
(197,246 | ) | (197,246 | ) | ||||
Total shareholders equity |
1,674,436 | 1,530,496 | ||||||
Noncontrolling interest |
6,145 | 4,634 | ||||||
Total equity |
1,680,581 | 1,535,130 | ||||||
Total liabilities and equity |
$ | 8,169,717 | $ | 7,661,549 | ||||
Six Months Ended | ||||||||
06/30/2011 | 06/30/2010 | |||||||
Operating activities: |
||||||||
Net income attributable to shareholders |
$ | 99,651 | $ | 71,178 | ||||
Adjustments to reconcile net income attributable to shareholders
to net cash provided by operating activities: |
||||||||
Change in policy liabilities and policyholder accounts |
149,619 | 84,646 | ||||||
Net change in reinsurance receivables and payables |
(4,016 | ) | (11,574 | ) | ||||
Amortization, principally the cost of business acquired and investments |
16,626 | 24,624 | ||||||
Deferred costs of business acquired |
(45,230 | ) | (34,273 | ) | ||||
Net realized losses on investments |
849 | 28,980 | ||||||
Net change in federal income taxes |
25,534 | (5,473 | ) | |||||
Other |
(45,373 | ) | (25,398 | ) | ||||
Net cash provided by operating activities |
197,660 | 132,710 | ||||||
Investing activities: |
||||||||
Purchases of investments and loans made |
(1,574,882 | ) | (936,660 | ) | ||||
Sales of investments and receipts from repayment of loans |
1,002,719 | 494,984 | ||||||
Maturities of investments |
171,331 | 176,718 | ||||||
Net change in short-term investments |
105,729 | 55,689 | ||||||
Change in deposit in separate account |
| (2,965 | ) | |||||
Net cash used by investing activities |
(295,103 | ) | (212,234 | ) | ||||
Financing activities: |
||||||||
Deposits to policyholder accounts |
252,096 | 122,809 | ||||||
Withdrawals from policyholder accounts |
(129,235 | ) | (54,905 | ) | ||||
Proceeds from issuance of 2020 Senior Notes |
| 250,000 | ||||||
Principal payments under bank credit facility |
| (222,000 | ) | |||||
Early retirement of senior notes |
| (5,000 | ) | |||||
Cash dividends paid on common stock |
(12,892 | ) | (11,054 | ) | ||||
Other financing activities |
4,939 | 2,095 | ||||||
Net cash provided by financing activities |
114,908 | 81,945 | ||||||
Increase in cash |
17,465 | 2,421 | ||||||
Cash at beginning of year |
72,806 | 65,464 | ||||||
Cash at end of period |
$ | 90,271 | $ | 67,885 | ||||
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