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[MONY LOGO] THE MONY GROUP INC. NEWS RELEASE
1740 Broadway MEDIA CONTACTS:
New York, NY 10019 Doug Myers, 212-708-2472,
212 708 2472 [email protected]
212 708 2399 Fax Christopher Breslin, 212-708-2435,
[email protected]
INVESTOR CONTACT:
Jay Davis, 212-708-2917,
[email protected]
THE MONY GROUP INC. REPORTS THIRD-QUARTER 2000 OPERATING EPS OF $1.13
NEW YORK (November 8, 2000) -- The MONY Group Inc. (NYSE: MNY) today reported
operating income for the quarter ended September 30, 2000 of $54.0 million or
$1.13 per share. For the quarter ended September 30, 1999, operating income was
$53.1 million or $1.11 per share before the non-recurring restructuring charge
of $38.3 million or $0.80 per share after tax. The after tax charge was for the
company's voluntary retirement and realignment program.
Net income was $66.2 million or $1.39 per share for the quarter ended September
30, 2000, and included net realized gains from investments of $13.2 million
after tax or $0.28 per share and included an extraordinary charge of $1.0
million or $0.02 per share. The extraordinary expense reflects the premium paid
to repurchase $6.5 million of surplus notes during the quarter as part of the
company's debt refinancing announced earlier this year. Comparably, net income
for the quarter ended September 30, 1999 was $27.6 million or $0.58 per share
after the non-recurring restructuring charge for the previously mentioned
voluntary retirement and realignment program. This included $14.7 million or
$0.31 per share of net realized gains on investments after tax, and an
extraordinary charge of $1.9 million or $0.04 per share for the expense of the
commission-free sale and purchase program offered to odd-lot shareholders.
"We are on track to meet our financial goals for 2000," said Michael I. Roth,
chairman and chief executive officer. "We continue to add significant
shareholder value by harvesting venture capital gains from our investment
portfolio. In addition, sales from our complementary distribution network have
already met or surpassed our 2000 plan for corporate-owned life insurance,
specialty-risk insurance and third-party mutual fund sales. Our challenge
remains growing our career agency system. Our continued effort to revitalize our
network through organizational and compensatory changes is about complete, the
results of which should be realized in 2001."
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"During the quarter, we achieved another milestone in our commitment to increase
shareholder value through our definitive agreement to acquire The Advest Group,
Inc." Mr. Roth continued. "Once the transaction is complete, Advest will create
immediate value for MONY shareholders. As our two organizations prepare for the
close of the transaction, it is becoming increasingly more evident that Advest
will make a strong contribution to The MONY Group, specifically with regard to
enhanced distribution channels, broadened product offering to our customers and
scale in terms of technology and marketing."
Operating income for the nine months ended September 30, 2000 was $229.2 million
or $4.81 per share, compared to $114.6 million or $2.40 per share for the nine
months ended September 30, 1999 before the previously mentioned non-recurring
restructuring charge. Net income for the first nine months of 2000 was $215.5
million or $4.53 per share and includes $24.0 million or $0.50 per share in net
realized gains after tax and a $37.7 million or $0.79 per share charge after tax
to repurchase $238 million of surplus notes as part of the company's debt
refinancing announced earlier this year. Comparably, net income for the first
nine months of 1999 was $135.0 million or $2.83 per share after the
non-recurring restructuring charge for the above mentioned voluntary retirement
and realignment program. Net income for the first nine months of 1999 includes
$60.6 million or $1.26 per share of net realized gains on investments after tax
and the $1.9 million or $0.04 per share extraordinary charge for the
commission-free sale and purchase program for odd-lot shareholders.
An earnings summary is as follows:
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
2000 1999 2000 1999
<S> <C> <C> <C> <C>
($ in millions except per share and share data
amounts)
Operating Income Excluding Early
Retirement and Realignment Charge $ 54.0 $ 53.1 $ 229.2 $ 114.6
Operating Income $ 54.0 $ 14.8 $ 229.2 $ 76.3
Net Income $ 66.2 $ 27.6 $ 215.5 $ 135.0
PER SHARE AMOUNTS (1):
Diluted Operating Income Excluding
Early Retirement and Realignment
Charge $ 1.13 $ 1.11 $ 4.81 $ 2.40
Diluted Operating Income $ 1.13 $ 0.31 $ 4.81 $ 1.60
Diluted Net Income $ 1.39 $ 0.58 $ 4.53 $ 2.83
SHARE DATA:
Weighted-average Shares Outstanding 46,147,359 47,238,166 46,572,467 47,238,166
Plus: Incremental Shares from Assumed
Conversion of Dilutive Securities 1,517,693 750,738 1,046,639 547,797
-------------- -------------- -------------- --------------
Weighted-average Shares Used in Diluted Per-
Share Calculations 47,665,052 47,988,904 47,619,106 47,785,963
============== ============== ============== ==============
</TABLE>
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THIRD-QUARTER HIGHLIGHTS INCLUDE:
- On August 24, 2000, The MONY Group signed a definitive agreement to acquire
The Advest Group, Inc. Since the announcement, the acquisition has received
both Hart-Scott-Rodino and NASD clearance. In addition, executives from
both companies are addressing critical business issues such as revenue
generating opportunities and business process alignment. A special meeting
for Advest shareholders is being held on November 20, 2000 to vote on the
transaction. The transaction will be closed once it is approved by the
Advest shareholders, the Office of Thrift Supervision and the Connecticut
Department of Banking. A.M. Best, Fitch, Moody's and Standard & Poor's
affirmed their ratings of The MONY Group following the announcement of the
company's intent to acquire The Advest Group.
- While accounting for less than 3% of the company's investment portfolio,
MONY's equity partnerships generated $46 million of pre-tax operating
income ($30 million or $0.62 per share after tax) during the quarter.
Year-to-date, the company generated $242 million of pre-tax operating
income ($157 million or $3.30 per share after tax). The company's 2000 plan
includes a total of $40 million of pre-tax operating earnings from the
equity partnership investments. Presently, the company has approximately
$60 million of potential pretax earnings related to its equity partnership
investments that may be realized in the future but are subject to market
fluctuations.
- Book value (excluding comprehensive income) increased to $42.47 per share,
a 9.5% increase from $38.79 per share at December 31, 1999.
- The MONY Group was added to the S&P MidCap 400 index and moved to the
Russell 1000 index from the Russell 2000 index.
- Enterprise Capital Management, Inc. formed an alliance with
Nicholas-Applegate under which Nicholas-Applegate will subadvise seven new
retail mutual funds. Separately, The Enterprise Group of Funds, Inc.
launched its first socially conscious investment vehicle, the Enterprise
Global Socially Responsive Fund.
BUSINESS SEGMENTS
Protection Segment
Through its protection segment, The MONY Group sells a wide range of life
insurance products (including whole life, term life, universal life, variable
universal life, last survivor life, and group universal life) to small business
owners and higher-income individuals, particularly family builders and
pre-retirees.
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Total new annualized and single life insurance premiums for the third quarter of
2000 were $95.8 million, compared with $30.6 million in the prior-year period.
Premiums for the nine months ended September 30, 2000 were $205.3 million,
compared with $122.7 million in the prior-year period.
New life insurance premiums from complementary distribution increased to $76.3
million in the third quarter of 2000 from $8.9 million in the third quarter of
1999. Year-to-date premiums were $142.6 million compared with $51.4 million for
the comparable period last year. The results for this quarter put The MONY Group
ahead of its fiscal 2000 goal.
Sales of corporate-owned life insurance (COLI) were $66 million in the third
quarter of 2000, compared to $1.2 million during the third quarter of 1999.
Year-to-date sales were $110 million, compared with $33.9 million the previous
year. Corporate sales involve large premiums that typically fluctuate over the
course of the year. Improved ratings and aggressive marketing efforts drove COLI
sales. Recurring premiums were $9.1 million for the quarter and $30.5 million
year-to-date, compared with $1.2 million and $5.2 million respectively for the
same period last year.
U.S. Financial Life Insurance Co. (USFL) increased its net premiums to $10.2
million through its brokerage general agency distribution channel for the
quarter ended September 30, 2000 compared to $7.7 million in the prior-year
period. Year-to-date sales were $30.3 million, compared to $17.5 million during
the same period last year. USFL continues to experience strong sales on level
term and universal products.
New life insurance premiums from the career agency system were $19.5 million in
the third quarter of 2000 compared to $21.7 million (first-year and single
premiums) in the third quarter of 1999. U.S. career sales were level with the
previous year. International sales declined slightly as expected. Year-to-date
premiums from the career agency system were $62.7 million, compared with $71.3
million during the comparable period. The variance in year-to-date sales is due
to an unusually large life insurance sale that was sold in the first half of
1999.
As a result of ongoing recruiting efforts, the number of agents increased to
2,364 as of September 30, 2000, compared with 2,250 as of September 30, 1999.
Accumulation Segment
Through its accumulation segment, The MONY Group provides variable annuities and
proprietary retail mutual funds through its sales force and third-party
broker-dealers.
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Accumulation assets under management were $10.4 billion at September 30, 2000
compared with $10.6 billion at June 30, 2000, $10.5 billion as of December 31,
1999 and $9.3 billion at September 30, 1999. New accumulation assets raised were
$523 million for the third quarter of 2000 and $2 billion for the first nine
months of 2000.
Sales of mutual funds offered by the Enterprise Group of Funds increased 3% to
$433 million in the third quarter of 2000 from $422 million in the third quarter
of 1999. Enterprise mutual fund sales through third-party broker-dealers were
$305 million in the quarter, up 16% from $263 million in the prior year period,
due to the opening of new wholesale distribution channels as well as an increase
in production at existing channels. Enterprise mutual fund sales through The
MONY Group career agency system were $128 million in the quarter, down from $159
million in the prior year. For the nine months ended September 30, 2000, sales
increased to $509 million compared to $479 million during the prior year period.
Annuity sales were $90 million in the third quarter, compared with $100 million
in the third quarter of 1999. For the nine months ended September 30, 2000,
annuity sales were $322 million compared with $317 million for the prior
year-period. While the annuity market remains highly competitive and driven by a
controversial bonus program that MONY chooses not to offer, MONY's exchange
program continues to be well received. The exchange program is a commission-free
program that enables customers to exchange their old variable policy for a new
policy series. During the quarter, customers exchanged approximately $230
million of assets from in-force to new policies. To date, approximately 50
percent of the company's variable annuity assets reside in the new policies.
Business Focus
"Our diverse distribution channels serve us well," said Mr. Roth. "Moving
forward, we expect our complementary businesses to continue their strong
performance. The initiatives to enhance our field force are virtually complete.
We look forward to a return to growth for our career sales force in 2001 from an
acceptable performance this year. Lastly, we believe the Advest acquisition
offers exceptional opportunities to grow MONY's presence and capabilities. Based
on the work of our planning team thus far, it is clear that the acquisition will
provide value to our shareholders and customers."
Forward and Cautionary Statements
Statements in this release may constitute "forward looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995. These
statements involve a number of risks, uncertainties and other factors that could
cause actual results to differ materially, as discussed in the company's filings
with the Securities and Exchange Commission. The company undertakes no
obligation to update or revise any forward-looking statement, whether as a
result of new information, future events, or otherwise.
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ABOUT THE MONY GROUP INC.
The MONY Group Inc. (NYSE: MNY) is the holding company for the member companies
of The MONY Group, which provide financial protection and asset accumulation
products and services. Member companies include MONY Life Insurance Company,
founded in 1842 as The Mutual Life Insurance Company of New York; MONY Life
Insurance Company of America; U.S. Financial Life Insurance Company; Enterprise
Capital Management, Inc.; MONY Securities Corporation; and Trusted Securities
Advisors Corp.
SUPPLEMENTAL FINANCIAL INFORMATION
MONY's conversion to a stock life insurance company and the establishment of the
Closed Block for the protection of Eligible Policyholders have significantly
affected the presentation of The MONY Group Inc.'s consolidated financial
statements. The most significant effects are as follows:
(i) The results of the policies included in the Closed Block are reflected as a
single line item in the Company's statements of income, entitled
"Contribution from the Closed Block," whereas, prior to the establishment
of the Closed Block the separate components comprising the results of such
business were reported in various line items in the Company's income
statement, including premiums, net investment income, net realized gains,
benefits, amortization of deferred policy acquisition costs, etc.
(ii) The assets and liabilities allocated to the Closed Block are reported
separately in the Company's balance sheet under the captions "Closed Block
assets" and "Closed Block liabilities," respectively.
To assist interested parties in analyzing the Company's consolidated financial
results attached is the following supplemental information:
EXHIBIT I presents a consolidated income statement of The MONY Group for the
three and nine months ended September 30, 2000 and 1999 (the "Consolidated
Combined Basis Income Statement") which presents the individual components of
the Closed Block activity for such periods with such activity outside the Closed
Block.
EXHIBIT II presents certain summary consolidated balance sheet data.
EXHIBIT III presents information regarding new business generated by the Company
for the three and nine months ended September 30, 2000 and 1999.
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Exhibit 1
THE MONY GROUP INC. AND SUBSIDIARIES
CONSOLIDATED "COMBINED BASIS" INCOME STATEMENTS
<TABLE>
<CAPTION>
REVENUES:
($ IN MILLIONS EXCEPT SHARE DATA AND PER SHARE AMOUNTS) THREE-MONTHS ENDED NINE-MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
2000 1999 2000 1999
---------- ---------- ---------- ----------
REVENUES:
<S> <C> <C> <C> <C>
Premiums $ 162.5 $ 165.0 $ 504.0 $ 513.6
Universal life and investment-type
product policy fees 51.2 47.8 157.0 145.7
Net investment income 231.6 219.3 812.9 603.5
Net realized gains on investments (a) 22.9 24.4 32.6 100.7
Group Pension Profits 10.8 21.5 29.0 47.8
Other income 52.3 47.6 174.0 140.0
---------- ---------- ---------- ----------
531.3 525.6 1,709.5 1,551.3
BENEFITS AND EXPENSES:
Benefits to policyholders 194.0 180.4 577.1 567.8
Interest credited to policyholders'
account balances 28.9 28.5 83.1 87.2
Amortization of deferred policy acquisition costs 30.7 41.3 105.4 108.6
Dividends to policyholders 61.0 64.1 170.9 181.2
Other operating costs and expenses 116.4 166.3 389.0 398.5
---------- ---------- ---------- ----------
431.0 480.6 1,325.5 1,343.3
---------- ---------- ---------- ----------
Income before income taxes and extraordinary item 100.3 45.0 384.0 208.0
Income tax expense 33.1 15.5 130.8 71.1
---------- ---------- ---------- ----------
Income before extraordinary item 67.2 29.5 253.2 136.9
Extraordinary item, net (1.0) (1.9) (37.7) (1.9)
---------- ---------- ---------- ----------
Net income $ 66.2 $ 27.6 $ 215.5 $ 135.0
========== ========== ========== ==========
OPERATING INCOME:
Net income $ 66.2 $ 27.6 $ 215.5 $ 135.0
Less:
Net realized gains on investments (after tax) (13.2) (14.7) (24.0) (60.6)
Plus:
Extraordinary items 1.0 1.9 37.7 1.9
---------- ---------- ---------- ----------
Operating Income 54.0 14.8 229.2 76.3
Early retirement and realignment charge - 38.3 - 38.3
---------- ---------- ---------- ----------
Operating income excluding early
retirement and realignment charge $ 54.0 $ 53.1 $ 229.2 $ 114.6
========== ========== ========== ==========
PER SHARE AMOUNTS:
Diluted Operating Income excluding early retirement
and realignment charge $ 1.13 $ 1.11 $ 4.81 $ 2.40
Diluted Operating Income $ 1.13 $ 0.31 $ 4.81 $ 1.60
Diluted Net Income Before Extraordinary Item $ 1.41 $ 0.61 $ 5.32 $ 2.86
Diluted Net Income $ 1.39 $ 0.58 $ 4.53 $ 2.83
SHARE DATA:
Weighted Average Shares Outstanding 46,147,359 47,238,166 46,572,467 47,238,166
Plus: Incremental Shares From Assumed
Conversion of Dilutive Securities 1,517,693 750,738 1,046,639 547,797
---------- ---------- ---------- ----------
Weighted-Average Shares used in Diluted Per-
Share Calculation 47,665,052 47,988,904 47,619,106 47,785,963
========== ========== ========== ==========
</TABLE>
(a) Includes realized gains or losses of the closed block, which are offset in
dividends to policyholders.
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EXHIBIT II
CONSOLIDATED BALANCE SHEET DATA
<TABLE>
<CAPTION>
AS OF
SEPTEMBER 30,
2000
-----------
<S> <C>
CONSOLIDATED BALANCE SHEET DATA
($ in millions except per share data):
Invested assets (including cash and cash equivalents) $ 5,561.6
Assets transferred in the Group Pension Transaction 4,980.8
Closed Block assets 6,218.2
Separate account assets 6,103.0
Deferred policy acquisition costs 636.4
Other assets 1,092.3
-----------
Total assets $ 24,592.3
===========
Policyholders' liabilities $ 2,998.4
Liabilities transferred in the Group Pension Transaction 4,968.7
Closed block liabilities 7,310.3
Separate account liabilities 6,100.6
Short-term debt 52.8
Long-term debt - Surplus Notes 2.0
Long-term debt - other 296.7
Other liabilities 845.8
-----------
Total liabilities $ 22,575.3
Equity $ 2,037.5
Accumulated comprehensive income (20.5)
-----------
Total shareholders' equity $ 2,017.0
Total liabilities and shareholders' equity $ 24,592.3
===========
Diluted book value per share $ 42.04
Diluted book value per share (Ex. Accumulated
Comprehensive Income) $ 42.47
</TABLE>
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EXHIBIT III
NEW BUSINESS INFORMATION
The following chart presents protection and accumulation sales in The MONY
Group's business segments:
<TABLE>
<CAPTION>
THREE-MONTHS ENDED NINE-MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
2000 1999 2000 1999
---- ---- ---- ----
<S> <C> <C> <C> <C>
NEW BUSINESS ($ IN MILLIONS):
Protection Products
Career Distribution $ 19.5 $ 21.7 $ 62.7 $ 71.3
Complementary Distribution* 76.3 8.9 142.6 51.4
--------------------- ---------------------
Total New Annualized Life Insurance Premiums $ 95.8 $ 30.6 $205.3 $122.7
===================== =====================
Accumulation Products
Variable Annuity - Career Distribution $ 90 $ 100 $ 322 $ 317
Mutual Funds - Career Distribution 128 159 509 479
Mutual Funds - Complementary Distribution 305 263 1,168 808
--------------------- ---------------------
Total Accumulation Sales $ 523 $ 522 $1,999 $1,604
===================== =====================
</TABLE>
* primarily USFL and corporate life insurance
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