ULLICO Inc. Ends Year on High Note, Reporting Strong Operating Income for the Fourth Quarter of $6.3 Million and Net Income of $5.2 Million. Revenue increased 17% from Fourth Quarter 2008.
Operating Income was $3.6 Million and Net Income $1.7 Million for FY2009. Revenue increased 14% from 2008.
WASHINGTON, DC (April 5, 2010) — ULLICO Inc. (“the Company”), the labor owned multi-line holding company offering insurance and financial products and services, today reported pre-tax operating income of $6.3 million for the quarter ended December 31, 2009, compared to pre-tax operating income of $1.1 million in the same quarter of the prior year. The current quarter generated net income of $5.2 million, compared to a net loss of $1.1 million in the prior year's quarter.
Highlights for the quarter:
- The Life and Health Business Unit contributed pre-tax earnings of $5.2 million, compared to $2.3 million for the same period last year. Earnings in the quarter were driven by favorable underwriting results for the Medical Stop Loss, Group Life and Direct Marketing lines of business. Revenue was $38.4 million in the current quarter, an increase of 4% over the same quarter in 2008.
- The Property and Casualty Business Unit contributed pre-tax earnings of $3.5 million, compared to $1.3 million for the same period last year. Revenue was $25.9 million, an increase of 62% over the same quarter in 2008. Both the earnings and revenue growth continue to be driven primarily from the successful expansion of the Workers’ Compensation, Commercial and Surety lines of business.
- The Retirement Services Business Unit, which includes our Real Estate Investment Group, contributed pre-tax earnings of $3.5 million, compared to $3.7 million for the same period last year. The slight reduction in earnings was due primarily to a decrease in assets under management in Separate Account J, which declined from $3.4 billion at September 30, 2009 to $3.3 billion at December 31. 2009. Total third party assets under management were unchanged at $4.7 billion as our other managed funds increased due to additional deposits and improvement in the equity markets.
The current quarter included net non-recurring income of $1.9 million relating to the settlements in several legacy litigation cases.
Total premium and fee revenue for the quarter was $73.3 million compared to $62.5 million in the prior year’s quarter, an increase of 17%. The increase was driven primarily by our Property and Casualty Business Unit as discussed above.
Year to Date Consolidated Results
The Company’s consolidated operating income for the year was $3.6 million compared to $13.4 million in the prior year. Contributing to the decrease in operating earnings in 2009 compared to 2008 was a decrease in fee income from Separate Account J due to lower assets under management as discussed above and decreased investment income due primarily from the Company’s residual limited partnership investments.
Consolidated net income for 2009 was $1.7 million as compared to $6.1 million for 2008. Non-recurring transactions impacting the results in 2009 include a net gain of $0.1 million related to the settlement of several legacy litigation cases, net of related expenses, and $1.1 million in severance expense. The results for 2008 were negatively impacted by $3.7 million of non-recurring transactions.
Total premium and fee revenue for the year increased to $287.4 million in 2009 from $253.0 million in 2008. The increase was primarily attributable to a 24% increase in our Medical Stop Loss business and a 147% increase in our Workers’ Compensation, Commercial and Surety lines of business.
Ed McElroy, ULLICO CEO stated, “From a revenue perspective, ULLICO once again had an outstanding year. From an earnings perspective, after a slow start to the year, ULLICO finished the year strong with an outstanding fourth quarter. Our focus on building a diversified portfolio of financial solutions for Labor and the employers of union members proved successful in this challenging economic environment.”
Commenting on the results, Chairman Joseph Hunt said, “I am very pleased with ULLICO’s results for the fourth quarter. By maintaining our dedication and focus on our core Labor markets, we have continued to grow and succeed in the most difficult of economic climates. These results and our continued momentum demonstrate organized Labor’s commitment to building ULLICO in the best way to serve Labor, its employers, and the working men and women of North America.”
Quarterly Financial Results at a Glance
| (In Millions) | 4th Quarter 2009 | 4th Quarter 2008 | Variance |
| Total Income | $81.2 | $71.2 | $10.0 |
| Total Benefits & Expenses | 74.9 | 70.1 | (4.8) |
| Pre-Tax Operating Income/(Loss) before Non-Recurring Transactions | $6.3 | $1.1 | $5.2 |
| Non-Recurring Transactions | 1.9 | (2.4) | 4.3 |
| Pre-Tax Operating Income/(Loss) after Non-Recurring Transactions | $8.2 | ($1.3) | $9.5 |
| Tax Expense/(Benefit) | 3.0 | (0.2) | (3.2) |
| Net Income/(Loss) | $5.2 | $1.1 | $6.3 |
2009 Year-To-Date Results at a Glance
| (In Millions) | As of December 31, 2009 YTD | As of December 31, 2008 YTD | Variance |
| Total Income | $315.6 | $284.7 | $30.9 |
| Total Benefits & Expenses | 312.0 | 271.3 | (40.7) |
| Pre-Tax Operating Income/(Loss) before Non-Recurring Transactions | ($3.6) | $13.4 | ($9.8) |
| Non-Recurring Transactions | (1.0) | (3.7) | 2.7 |
| Pre-Tax Operating Income/(Loss) after Non-Recurring Transactions | $2.6 | $9.7 | ($7.1) |
| Tax Expense/(Benefit) | 0.9 | 3.6 | 2.7 |
| Net Income/(Loss) | $1.7 | $6.1 | ($4.4) |
About ULLICO
ULLICO Inc. s a $5.4 billion holding company whose subsidiary companies include The Union Labor Life Insurance Company; ULLICO Investment Advisors, Inc.; ULLICO Investment Company; ULLICO Casualty Company; and ULLICO Casualty Group, Inc. Since 1927, the ULLICO Family of Companies has offered quality insurance and investment products and services to its single most important client, the American labor movement.
CONTACT:
Bina Handa
Manager
Communications & PR 202.682.6611
bhanda@ullico.com [1]
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