Horace Mann Reports Fourth Quarter 2017 Net Income of $3.00 per Share and Core Earnings of $0.65 per Share*

SPRINGFIELD, IL—(Marketwired – February 06, 2018) –

  • Property and Casualty combined ratio of 94.0% including a 5.1 point improvement in the auto loss ratio
  • Significantly lower catastrophe losses, 2.2 points or $3.6 million pretax, compared to the prior year
  • Continued growth in assets under management in Retirement and double–digit increases in Life sales
  • One–time favorable tax benefit of $99.0 million, or $2.37 per diluted share due to the passage of the Tax Cuts and Jobs Act of 2017

Horace Mann Educators Corporation (NYSE: HMN) today reported financial results for the three and twelve month periods ended December 31, 2017:

Horace Mann Financial Highlights  
    Three Months Ended
December 31,
    Twelve Months Ended
December 31,
 
($ in millions, except per share amounts)   2017     2016     Change     2017     2016     Change  
Total revenues   $ 303.0     $ 282.8     7.1 %   $ 1,171.5     $ 1,128.9     3.8 %
Net income     125.3       19.9     N.M.       169.4       83.8     102.1 %
  Net realized investment gains (losses) after tax     (0.9 )     (1.5 )           (1.7 )     2.3        
  Re–measurement of net deferred tax liability (DTL)     99.0                   99.0              
Core earnings*     27.2       21.4     27.1 %     72.1       81.5     –11.5 %
Per diluted share:                                            
  Net income     3.00       0.48     N.M.       4.08       2.02     102.0 %
    Net realized investment gains (losses) after tax     (0.02 )     (0.04 )           (0.04 )     0.05        
    Re–measurement of DTL     2.37                   2.38              
Core earnings     0.65       0.52     25.0 %     1.74       1.97     –11.7 %
Book value per share                           36.88       32.15     14.7 %
Book value per share excluding net unrealized gains on fixed maturity and equity securities*                           30.73       27.79     10.6 %
Property and Casualty net income     15.6       9.6     62.5 %     17.8       25.6     –30.5 %
  Property and Casualty combined ratio     94.0 %     99.1 %   –5.1 pts       103.3 %     101.5 %   1.8 pts  
  Property and Casualty underlying combined ratio*     92.2 %     93.5 %   –1.3 pts       94.2 %     92.9 %   1.3 pts  
Retirement net income   $ 51.5     $ 11.4     N.M.     $ 88.4     $ 50.7     74.4 %
Life net income     63.3       3.5     N.M.       77.6       16.6     N.M.  

* These measures are not based on accounting principles generally accepted in the United States (non–GAAP). They are reconciled to the most directly comparable GAAP measures in the Appendix to the Investor Supplement. An explanation of these measures is contained in the Glossary of Selected Terms included as an exhibit in the Company's reports filed with the SEC.
N.M. – Not meaningful.

“Horace Mann's fourth quarter net income benefited $99.0 million or $2.37 per diluted share* from the passage of the new U.S. tax law, which reflects the re–measurement of our net deferred tax liability,” said Horace Mann's President and Chief Executive Officer Marita Zuraitis. “Excluding the impact of tax reform, fourth quarter core earnings of $0.65 per diluted share increased 25% compared to the prior year period reflecting relatively favorable weather–related losses, as well as continued progress in auto profitability initiatives. Despite another active catastrophe quarter for the industry, our Property and Casualty operations produced a strong 94.0% combined ratio. In addition, our Retirement and Life businesses continue to grow, with a 9% increase in Retirement assets under management and a 13% increase in Life sales.”

“We are projecting full year 2018 core earnings of between $2.10 and $2.30 per share,” stated Zuraitis. “This estimate anticipates continued improvement of 2 to 2.5 points in our underlying auto loss ratio and 1 to 1.5 points in our underlying property loss ratio, 6 to 7 points of catastrophe costs, net interest spread of around 170 basis points, Life mortality costs consistent with 2017, continued strategic investments across all lines, and an effective tax rate of between 15% to 18%.”

Property and Casualty Segment

For the fourth quarter of 2017, Property and Casualty net income (excluding the effect of DTL re–measurement)* increased to $15.0 million compared to $9.6 million in the prior year period. The Property and Casualty combined ratio of 94.0% improved 5.1 points compared to the prior year period. These improvements were primarily due to an improved underlying auto loss ratio, reflecting the impact of rate actions and continued profitability initiatives, as well as a strong underlying property loss ratio.

Prior years' reserves continue to develop favorably in both auto and property, $0.6 million pretax in the fourth quarter of 2017 compared to $2.7 million pretax in the prior year period.

Catastrophe activity in the fourth quarter of 2017 totaled $3.6 million pretax, including losses related to California wildfires totaling $1.3 million pretax, compared to $11.6 million pretax in the prior year period.

On a reported basis, the fourth quarter auto combined ratio of 104.7% improved 3.5 points and the property combined ratio of 72.2% improved 8.9 points as compared to the prior year period, driven by improvement in the underlying auto loss ratio and lower catastrophe losses. The underlying auto loss ratio* of 77.6% improved 5.0 points compared to the prior year period as a result of an increase in earned premium due to rate actions combined with continued stabilization in auto loss trends. The underlying property loss ratio* was favorable at 39.8%, which reflected a modest increase of 0.9 points compared to the prior year period.

For the full year 2017, Property and Casualty net income (excluding the effect of DTL re–measurement) decreased to $17.2 million compared to $25.6 million in the prior year period as a result of lower levels of favorable prior years' reserve development as well as elevated weather–related losses that occurred in the first half of 2017. Favorable prior years' reserve development was $4.3 million pretax less than a year ago and pretax catastrophe losses were $1.8 million higher than a year ago. The Property and Casualty combined ratio of 103.3% increased 1.8 points compared to a year ago.

On an underlying basis, the full year 2017 auto loss ratio of 77.2% decreased 0.8 points compared to the prior year period, with the full year underlying combined ratio improving 1.0 point compared to the prior year. For property, the underlying full year 2017 loss ratio of 47.2% increased 4.8 points compared to the prior year period and was largely related to the impact of higher non–catastrophe weather–related losses that occurred in the first half of 2017. The expense ratio for Property and Casualty of 26.7% was comparable to the prior year period.

Total Property and Casualty written premiums* of $164.8 million and $662.8 million for the three and twelve month periods ended December 31, 2017 increased 4.3% and 4.5%, respectively, compared to the prior year periods. The growth was driven primarily by rate actions, which resulted in an increase in the average premium per policy for both auto and property.

Total Property and Casualty sales* for the fourth quarter 2017 were flat compared to the prior year period but increased 4.9% for the full year 2017 compared to prior year period. Policy retention continues to be stable with auto and property policy retention rates for the current quarter at 83.0% and 87.6%, respectively.

Retirement Segment

For the fourth quarter of 2017, Retirement net income (excluding the effect of DTL re–measurement)* of $12.0 million increased $0.6 million compared to the prior year period, primarily due to a $5.5 million pretax increase in net interest margin offset by a $2.1 million pretax unfavorable change in DAC unlocking accompanied by a $1.8 million pretax increase in DAC amortization. For the full year 2017, Retirement net income (excluding the effect of DTL re–measurement) of $48.9 million was 3.6% lower than the prior year period.

For the full year of 2017, the annualized net interest spread on fixed annuity assets was 194 basis points, an increase of 1 basis point compared to a year ago. Net interest spread benefited from strong prepayment activity in the fourth quarter of 2017, as well as favorable alternative investment returns. Annuity assets under management of $6.8 billion increased 5.2% compared to a year ago, and total cash value persistency remained strong at 89.5% for variable annuities and 92.6% for fixed annuities.

Overall, the total level of Retirement deposits* was comparable to the prior year periods with an increase in asset flows related to fee–based mutual fund offerings nearly offsetting a decrease in traditional annuity products. For the three and twelve month periods ended December 31, 2017, annuity deposits of $104.2 million and $453.1 million decreased 18.8% and 12.9%, respectively, compared to the prior year periods. The decline in annuity deposits was related to lower sales of single premium annuity products in the current year. For the current year, deposits on recurring annuity products were comparable to the prior year period. Sales* and deposit activity related to new retail and institutional Retirement Advantage products, as well as other mutual fund offerings, were strong with $80.0 million of deposits in the current year compared to $39.0 million in the prior year period.

Life Segment

Life net income (excluding the effect of DTL re–measurement)* of $3.0 million and $17.3 million for the three and twelve month periods ended December 31, 2017, decreased 14.3% and increased 4.2%, respectively, compared to the prior year periods. The decrease for the fourth quarter 2017 was largely due to an increase in mortality costs. However, on a full year basis, mortality costs are in–line with our historical trends.

Life insurance premiums and contract deposits* of $31.4 million for the current quarter increased 6.1% compared to the prior year period. For the twelve month period ended December 31, 2017, premiums and contract deposits increased 3.0%, to $111.2 million compared to the prior year period. Life sales* of $6.1 million increased 24.5% compared to the fourth quarter of 2016. Life sales during 2017 of $17.7 million increased 13.5% compared to the prior year period, primarily due to an increase in single premium sales. Life persistency of 95.1% was comparable to prior year.

Investment Results

Total net investment income for the three and twelve month periods ended December 31, 2017 increased 9.0% and 3.4% respectively, compared to the prior year periods. While annuity asset balances in the Retirement segment continued to grow, overall investment results reflected a $5.2 million pretax increase in investment prepayment activity in the current quarter partially offset by the impact of the current low interest rate environment. Pretax net realized investment losses were $1.7 million and $3.4 million for the three and twelve month periods ended December 31, 2017, respectively.

Horace Mann's net unrealized investment gains on fixed maturity and equity securities were $440.3 million at December 31, 2017, compared to net unrealized investment gains on fixed maturity and equity securities of $312.2 million at December 31, 2016. The increase in net unrealized gains is largely attributable to tighter credit spreads across all asset classes.

Webcast Conference Call

Horace Mann's senior management will discuss the Company's fourth quarter financial results with investors and analysts on February 7, 2018 at 10:00 a.m. Eastern Time. The conference call will be webcast live at investors.horacemann.com and archived later in the day for replay.

About Horace Mann

Horace Mann Educators Corporation (NYSE: HMN) is the largest financial services company focused on providing America's educators and school employees with insurance and retirement solutions. Founded by Educators for Educators® in 1945, the Company is headquartered in Springfield, Illinois. For more information about the Company, visit horacemann.com.

Statements included in this news release that are not historical in nature are forward–looking within the meaning of the Private Securities Litigation Reform Act of 1995 and are subject to certain risks and uncertainties. Horace Mann is not under any obligation to (and expressly disclaims any such obligation to) update or revise any forward–looking statements, whether as a result of new information, future events or otherwise. Please refer to the Company's Quarterly Report on Form 10–Q for the period ended September 30, 2017, and the Company's past and future filings and reports filed with the Securities and Exchange Commission for information concerning important factors that could cause actual results to differ materially from those in forward–looking statements. Information contained in this press release include measures which are based on methodologies other than accounting principles generally accepted in the United States (GAAP). Reconciliations of non–GAAP measures to the closest GAAP measures are contained in the Appendix to the Investor Supplement and additional descriptions of the non–GAAP measures are contained in the Glossary of Selected Terms included as an exhibit to the Company's SEC filings.

HORACE MANN EDUCATORS CORPORATION
Financial Highlights (Unaudited)
($ in Millions, except per share data)

    Three Months Ended
December 31,
          Twelve Months Ended
December 31,
       
    2017     2016     Change     2017     2016     Change  
EARNINGS SUMMARY                                            
Net income   $ 125.3     $ 19.9     N.M.     $ 169.4     $ 83.8     102.1 %
  Net realized investment gains (losses), after tax     (0.9 )     (1.5 )   –40.0 %     (1.7 )     2.3     N.M.  
  Re–measurement of net deferred tax liability (DTL)     99.0           N.M.       99.0           N.M.  
Core earnings*     27.2       21.4     27.1 %     72.1       81.5     –11.5 %
                                             
Per diluted share:                                            
  Net income     3.00       0.48     N.M.       4.08       2.02     102.0 %
    Net realized investment gains (losses), after tax     (0.02 )     (0.04 )   –50.0 %     (0.04 )     0.05     N.M.  
    Re–measurement of DTL     2.37           N.M.       2.38           N.M.  
  Core earnings*     0.65       0.52     25.0 %     1.74       1.97     –11.7 %
Weighted average number of shares and equivalent shares (in millions) – Diluted     41.7       41.5     0.5 %     41.6       41.5     0.2 %
                                             
RETURN ON EQUITY                                            
Net income return on equity (A)                           12.3 %     6.2 %   6.1 pts  
Core return on equity excluding net unrealized gains on fixed maturity and equity securities and re–measurement of DTL* (B)                           6.4 %     7.4 %   –1.0 pts  
                                             
FINANCIAL POSITION                                            
Per share (C):                                            
  Book value                         $ 36.88     $ 32.15     14.7 %
    Effect of net unrealized gains on fixed maturity and equity securities (D)                           6.15       4.36     41.1 %
    Effect of the re–measurement of net DTL                           2.43           N.M.  
  Dividends paid   $ 0.275     $ 0.265     3.8 %   $ 1.100     $ 1.060     3.8 %
Ending number of shares outstanding (in millions) (C)                           40.7       40.2     1.2 %
Total assets                         $ 11,198.3     $ 10,576.8     5.9 %
Long–term debt, current and noncurrent                           297.5       247.2     20.3 %
Total shareholders' equity                           1,501.6       1,294.0     16.0 %
                                             
ADDITIONAL INFORMATION                                            
Net realized investment gains (losses)                                            
  Before tax   $ (1.7 )   $ (2.8 )   –39.3 %   $ (3.4 )   $ 4.1     N.M.  
  After tax     (0.9 )     (1.5 )   –40.0 %     (1.7 )     2.3     N.M.  
    Per share, diluted   $ (0.02 )   $ (0.04 )   –50.0 %   $ (0.04 )   $ 0.05     N.M.  

N.M.– Not meaningful.

(A) Based on trailing 12–month net income and average quarter–end shareholders' equity.
(B) Based on trailing 12–month core earnings and average quarter–end shareholders' equity which has been adjusted to exclude the fair value adjustment for investments, net of the related impact on deferred policy acquisition costs and applicable deferred taxes.
(C) Ending shares outstanding were 40,717,873 at December 31, 2017 and 40,244,751 at December 31, 2016.
(D) Net of the related impact on deferred policy acquisition costs and applicable deferred taxes.

HORACE MANN EDUCATORS CORPORATION
Statements of Operations and Supplemental Consolidated Data (Unaudited)
($ in Millions)

    Three Months Ended
December 31,
          Twelve Months Ended
December 31,
       
    2017     2016     Change     2017     2016     Change  
STATEMENTS OF OPERATIONS                                            
Insurance premiums and contract charges earned   $ 204.3     $ 194.2     5.2 %   $ 794.7     $ 759.1     4.7 %
Net investment income     98.6       90.5     9.0 %     373.6       361.2     3.4 %
Net realized investment gains (losses)     (1.7 )     (2.8 )   39.3 %     (3.4 )     4.1     N.M.  
Other income     1.8       0.9     100.0 %     6.6       4.5     46.7 %
  Total revenues     303.0       282.8     7.1 %     1,171.5       1,128.9     3.8 %
                                             
Benefits, claims and settlement expenses     137.4       137.5     –0.1 %     582.3       541.1     7.6 %
Interest credited     50.4       49.1     2.6 %     198.6       192.0     3.4 %
Policy acquisition expenses amortized     28.3       23.6     19.9 %     102.2       96.7     5.7 %
Operating expenses     48.7       42.5     14.6 %     187.8       173.1     8.5 %
Interest expense     3.0       2.9     3.4 %     11.9       11.8     0.8 %
  Total benefits, losses and expenses     267.8       255.6     4.8 %     1,082.8       1,014.7     6.7 %
                                             
Income before income taxes     35.2       27.2     29.4 %     88.7       114.2     –22.3 %
  Income tax expense (benefit)     (90.1 )     7.3     N.M.       (80.7 )     30.4     N.M.  
Net income   $ 125.3     $ 19.9     N.M.     $ 169.4     $ 83.8     102.1 %
                                             
PREMIUMS WRITTEN AND CONTRACT DEPOSITS                              
Property & Casualty   $ 164.8     $ 158.0     4.3 %   $ 662.8     $ 634.3     4.5 %
Annuity deposits     104.2       128.3     –18.8 %     453.1       520.2     –12.9 %
Life     31.4       29.6     6.1 %     111.2       108.0     3.0 %
  Total   $ 300.4     $ 315.9     –4.9 %   $ 1,227.1     $ 1,262.5     –2.8 %
                                             
SEGMENT NET INCOME (LOSS)                                            
Property & Casualty   $ 15.6     $ 9.6     62.5 %   $ 17.8     $ 25.6     –30.5 %
Retirement     51.5       11.4     N.M.       88.4       50.7     74.4 %
Life     63.3       3.5     N.M.       77.6       16.6     N.M.  
Corporate and other (A)     (5.1 )     (4.6 )   10.9 %     (14.4 )     (9.1 )   58.2 %
  Net income   $ 125.3     $ 19.9     N.M.     $ 169.4     $ 83.8     102.1 %
                                             
IMPACT ON SEGMENT NET INCOME (LOSS) FOR RE–MEASUREMENT OF DTL                        
Property & Casualty   $ 0.6     $     N.M.     $ 0.6     $     N.M.  
Retirement     39.5           N.M.       39.5           N.M.  
Life     60.3           N.M.       60.3           N.M.  
Corporate and other (A)     (1.4 )         N.M.       (1.4 )         N.M.  
  Total   $ 99.0     $     N.M.     $ 99.0     $     N.M.  

N.M.– Not meaningful.

(A) Corporate and Other includes interest expense on debt and the impact of net realized investment gains and losses and other Corporate level items. The Company does not allocate the impact of corporate level transactions to the insurance segments consistent with how management evaluates the results of those segments. See detail for this segment on page 4.

HORACE MANN EDUCATORS CORPORATION
Supplemental Business Segment Overview (Unaudited)
($ in Millions)

    Three Months Ended
December 31,
          Twelve Months Ended
December 31,
       
    2017     2016     Change     2017     2016     Change  
PROPERTY & CASUALTY                                            
Premiums written   $ 164.8     $ 158.0     4.3 %   $ 662.8     $ 634.3     4.5 %
Premiums earned     166.3       159.0     4.6 %     648.3       620.5     4.5 %
Net investment income     9.7       10.0     –3.0 %     36.2       39.0     –7.2 %
Other income (expense)     (0.2 )     (0.2 )   %     (0.2 )     0.6     –133.3 %
Losses and loss adjustment expenses (LAE)     111.4       117.1     –4.9 %     496.3       464.1     6.9 %
Operating expenses (includes policy acquisition expenses amortized)     44.9       40.4     11.1 %     173.4       165.7     4.6 %
Interest expense     0.1           N.M.       0.1           N.M.  
Income before tax     19.4       11.3     71.7 %     14.5       30.3     –52.1 %
Net income     15.6       9.6     62.5 %     17.8       25.6     –30.5 %
Net investment income, after tax     7.7       8.0     –3.8 %     28.9       31.2     –7.4 %
                                             
Catastrophe costs (A)                                            
  After tax     2.4       7.6     –68.4 %     40.2       39.1     2.8 %
  Before tax     3.6       11.6     –69.0 %     61.8       60.0     3.0 %
Prior years' reserve favorable (adverse) development, before tax                                            
  Automobile     0.3       1.4     –78.6 %     0.3       1.4     –78.6 %
  Property & other     0.3       1.3     –76.9 %     2.4       5.6     –57.1 %
    Total     0.6       2.7     –77.8 %     2.7       7.0     –61.4 %
                                             
Operating statistics:                                            
  Loss and loss adjustment expense ratio     67.0 %     73.7 %   –6.7 pts       76.6 %     74.8 %   1.8 pts  
  Expense ratio     27.0 %     25.4 %   1.6 pts       26.7 %     26.7 %   0.0 pts  
  Combined ratio     94.0 %     99.1 %   –5.1 pts       103.3 %     101.5 %   1.8 pts  
    Effect on the combined ratio of:                                            
      Catastrophe costs (A)     2.2 %     7.3 %   –5.1 pts       9.5 %     9.7 %   –0.2 pts  
      Prior years' reserve development     –0.4 %     –1.7 %   1.3 pts       –0.4 %     –1.1 %   0.7 pts  
  Combined ratio excluding the effects of catastrophe costs and prior years' reserve development (“underlying combined ratio”)*     92.2 %     93.5 %   –1.3 pts       94.2 %     92.9 %   1.3 pts  
                                             
Policies in force (in thousands)                           695       705     –1.4 %
  Automobile                           479       485     –1.2 %
  Property                           216       220     –1.8 %
                                             
Policy renewal rate – 12 months                                            
  Automobile                           83.0 %     83.5 %   –0.5 pts  
  Property                           87.6 %     87.8 %   –0.2 pts  

N.M.– Not meaningful.

(A) Includes allocated loss adjustment expenses and, when applicable, catastrophe reinsurance reinstatement premiums. For the periods presented, there were no reinsurance reinstatement premiums.

HORACE MANN EDUCATORS CORPORATION
Supplemental Business Segment Overview (Unaudited)
($ in Millions)

    Three Months Ended
December 31,
          Twelve Months Ended
December 31,
       
    2017     2016     Change     2017     2016     Change  
RETIREMENT                                            
Contract deposits   $ 104.2     $ 128.3     –18.8 %   $ 453.1     $ 520.2     –12.9 %
  Variable     46.2       46.0     0.4 %     173.9       163.6     6.3 %
  Fixed     58.0       82.3     –29.5 %     279.2       356.6     –21.7 %
Contract charges earned     7.2       6.3     14.3 %     28.0       24.9     12.4 %
Net investment income     69.1       62.4     10.7 %     262.0       249.4     5.1 %
Interest credited     39.1       37.9     3.2 %     153.5       147.3     4.2 %
Net interest margin (without realized investment gains/losses)     30.0       24.5     22.4 %     108.5       102.1     6.3 %
Other income     1.8       0.8     125.0 %     5.9       2.8     110.7 %
Mortality loss and other reserve changes     (1.8 )     (0.8 )   125.0 %     (5.8 )     (3.9 )   48.7 %
Operating expenses (includes policy acquisition expenses amortized)     19.5       13.6     43.4 %     67.6       54.9     23.1 %
Income before tax     17.7       17.2     2.9 %     69.0       71.0     –2.8 %
Net income     51.5       11.4     N.M.       88.4       50.7     74.4 %
Pretax income increase (decrease) due to evaluation of:                                            
  Deferred policy acquisition costs   $ (1.2 )   $ 0.9     N.M.     $ (1.1 )   $ 0.3     N.M.  
  Guaranteed minimum death benefit reserve     0.1       0.1     %     0.1       0.1     %
Retirement contracts in force (in thousands)                           223       219     1.8 %
Annuity accumulated account value on deposit / Assets under management                         $ 6,764.0     $ 6,427.0     5.2 %
  Variable                           2,152.0       1,923.9     11.9 %
  Fixed                           4,612.0       4,503.1     2.4 %
Annuity accumulated value retention – 12 months                                            
  Variable accumulations                           89.5 %     94.7 %   –5.2 pts  
  Fixed accumulations                           92.6 %     94.6 %   –2.0 pts  
                                             
LIFE                                            
Premiums and contract deposits   $ 31.4     $ 29.6     6.1 %   $ 111.2     $ 108.0     3.0 %
Premiums and contract charges earned     30.8       28.9     6.6 %     118.4       113.7     4.1 %
Net investment income     20.0       18.3     9.3 %     76.2       73.6     3.5 %
Other income     0.1       0.2     –50.0 %     0.4       0.8     –50.0 %
Death benefits/mortality cost/change in reserves     24.2       19.6     23.5 %     80.2       73.1     9.7 %
Interest credited     11.3       11.2     0.9 %     45.1       44.7     0.9 %
Operating expenses (includes policy acquisition expenses amortized)     11.2       10.6     5.7 %     44.0       44.0     %
Income before tax     4.2       6.0     –30.0 %     25.7       26.3     –2.3 %
Net income     63.3       3.5     N.M.       77.6       16.6     N.M.  
Pretax income increase (decrease) due to evaluation of:                                            
  Deferred policy acquisition costs   $     $ 0.2     –100.0 %   $ 0.2     $ 0.4     –50.0 %
Life policies in force (in thousands)                           198       198     %
Life insurance in force                         $ 17,564     $ 17,025     3.2 %
Lapse ratio – 12 months (Ordinary life insurance)                           4.9 %     4.3 %   0.6 pts  
                                             
CORPORATE AND OTHER (A)                                            
Components of income (loss) before tax:                                            
  Net realized investment gains (losses)   $ (1.7 )   $ (2.8 )   –39.3 %   $ (3.4 )   $ 4.1     N.M.  
  Interest expense     (2.9 )     (2.9 )   %     (11.8 )     (11.8 )   %
Other operating expenses, net investment income and other income     (1.5 )     (1.6 )   –6.3 %     (5.3 )     (5.7 )   –7.0 %
Loss before tax     (6.1 )     (7.3 )   –16.4 %     (20.5 )     (13.4 )   53.0 %
Net loss     (5.1 )     (4.6 )   10.9 %     –14.4       (9.1 )   58.2 %

N.M.– Not meaningful.

(A) The Corporate and Other segment includes interest expense on debt and the impact of realized investment gains and losses and other corporate level items. The Company does not allocate the impact of corporate level transactions to the insurance segments consistent with how management evaluates the results of those segments.

HORACE MANN EDUCATORS CORPORATION
Supplemental Business Segment Overview (Unaudited)
($ in Millions)

  Three Months Ended
December 31,
    Twelve Months Ended
December 31,
   
  2017 2016 Change   2017 2016 Change  
INVESTMENTS                        
Retirement and Life                        
  Fixed maturities, at fair value (amortized cost 2017, $6,490.8; 2016, $6,404.4)             $ 6,874.1 $ 6,684.3 2.8 %
  Equity securities, at fair value (cost 2017, $77.5; 2016, $70.5)               80.9   66.6 21.5 %
  Short–term investments               36.4   10.0 N.M.  
  Policy loans               153.6   151.9 1.1 %
  Other investments               203.7   159.2 28.0 %
    Total Retirement and Life investments               7,348.7   7,072.0 3.9 %
                         
Property & Casualty                        
  Fixed maturities, at fair value (amortized cost 2017, $812.1; 2016, $747.7)             $ 850.0 $ 772.4 10.0 %
  Equity securities, at fair value (cost 2017, $38.8; 2016, $63.6)               54.6   75.0 –27.2 %
  Short–term investments               19.3   10.9 77.1 %
  Other investments               72.9   45.0 62.0 %
    Total Property & Casualty investments               996.8   903.3 10.4 %
                         
Corporate investments               6.8   24.0 –71.7 %
                         
    Total investments               8,352.3   7,999.3 4.4 %
                         
Net investment income                        
  Before tax $ 98.6 $ 90.5 9.0 % $ 373.6 $ 361.2 3.4 %
  After tax   65.5   60.3 8.6 %   248.3   240.6 3.2 %

N.M.– Not meaningful.

Horace Mann Reports Fourth Quarter 2017 Net Income of $3.00 per Share and Core Earnings of $0.65 per Share*

SPRINGFIELD, IL—(Marketwired – February 06, 2018) –

  • Property and Casualty combined ratio of 94.0% including a 5.1 point improvement in the auto loss ratio
  • Significantly lower catastrophe losses, 2.2 points or $3.6 million pretax, compared to the prior year
  • Continued growth in assets under management in Retirement and double–digit increases in Life sales
  • One–time favorable tax benefit of $99.0 million, or $2.37 per diluted share due to the passage of the Tax Cuts and Jobs Act of 2017

Horace Mann Educators Corporation (NYSE: HMN) today reported financial results for the three and twelve month periods ended December 31, 2017:

Horace Mann Financial Highlights  
    Three Months Ended
December 31,
    Twelve Months Ended
December 31,
 
($ in millions, except per share amounts)   2017     2016     Change     2017     2016     Change  
Total revenues   $ 303.0     $ 282.8     7.1 %   $ 1,171.5     $ 1,128.9     3.8 %
Net income     125.3       19.9     N.M.       169.4       83.8     102.1 %
  Net realized investment gains (losses) after tax     (0.9 )     (1.5 )           (1.7 )     2.3        
  Re–measurement of net deferred tax liability (DTL)     99.0                   99.0              
Core earnings*     27.2       21.4     27.1 %     72.1       81.5     –11.5 %
Per diluted share:                                            
  Net income     3.00       0.48     N.M.       4.08       2.02     102.0 %
    Net realized investment gains (losses) after tax     (0.02 )     (0.04 )           (0.04 )     0.05        
    Re–measurement of DTL     2.37                   2.38              
Core earnings     0.65       0.52     25.0 %     1.74       1.97     –11.7 %
Book value per share                           36.88       32.15     14.7 %
Book value per share excluding net unrealized gains on fixed maturity and equity securities*                           30.73       27.79     10.6 %
Property and Casualty net income     15.6       9.6     62.5 %     17.8       25.6     –30.5 %
  Property and Casualty combined ratio     94.0 %     99.1 %   –5.1 pts       103.3 %     101.5 %   1.8 pts  
  Property and Casualty underlying combined ratio*     92.2 %     93.5 %   –1.3 pts       94.2 %     92.9 %   1.3 pts  
Retirement net income   $ 51.5     $ 11.4     N.M.     $ 88.4     $ 50.7     74.4 %
Life net income     63.3       3.5     N.M.       77.6       16.6     N.M.  

* These measures are not based on accounting principles generally accepted in the United States (non–GAAP). They are reconciled to the most directly comparable GAAP measures in the Appendix to the Investor Supplement. An explanation of these measures is contained in the Glossary of Selected Terms included as an exhibit in the Company's reports filed with the SEC.
N.M. – Not meaningful.

“Horace Mann's fourth quarter net income benefited $99.0 million or $2.37 per diluted share* from the passage of the new U.S. tax law, which reflects the re–measurement of our net deferred tax liability,” said Horace Mann's President and Chief Executive Officer Marita Zuraitis. “Excluding the impact of tax reform, fourth quarter core earnings of $0.65 per diluted share increased 25% compared to the prior year period reflecting relatively favorable weather–related losses, as well as continued progress in auto profitability initiatives. Despite another active catastrophe quarter for the industry, our Property and Casualty operations produced a strong 94.0% combined ratio. In addition, our Retirement and Life businesses continue to grow, with a 9% increase in Retirement assets under management and a 13% increase in Life sales.”

“We are projecting full year 2018 core earnings of between $2.10 and $2.30 per share,” stated Zuraitis. “This estimate anticipates continued improvement of 2 to 2.5 points in our underlying auto loss ratio and 1 to 1.5 points in our underlying property loss ratio, 6 to 7 points of catastrophe costs, net interest spread of around 170 basis points, Life mortality costs consistent with 2017, continued strategic investments across all lines, and an effective tax rate of between 15% to 18%.”

Property and Casualty Segment

For the fourth quarter of 2017, Property and Casualty net income (excluding the effect of DTL re–measurement)* increased to $15.0 million compared to $9.6 million in the prior year period. The Property and Casualty combined ratio of 94.0% improved 5.1 points compared to the prior year period. These improvements were primarily due to an improved underlying auto loss ratio, reflecting the impact of rate actions and continued profitability initiatives, as well as a strong underlying property loss ratio.

Prior years' reserves continue to develop favorably in both auto and property, $0.6 million pretax in the fourth quarter of 2017 compared to $2.7 million pretax in the prior year period.

Catastrophe activity in the fourth quarter of 2017 totaled $3.6 million pretax, including losses related to California wildfires totaling $1.3 million pretax, compared to $11.6 million pretax in the prior year period.

On a reported basis, the fourth quarter auto combined ratio of 104.7% improved 3.5 points and the property combined ratio of 72.2% improved 8.9 points as compared to the prior year period, driven by improvement in the underlying auto loss ratio and lower catastrophe losses. The underlying auto loss ratio* of 77.6% improved 5.0 points compared to the prior year period as a result of an increase in earned premium due to rate actions combined with continued stabilization in auto loss trends. The underlying property loss ratio* was favorable at 39.8%, which reflected a modest increase of 0.9 points compared to the prior year period.

For the full year 2017, Property and Casualty net income (excluding the effect of DTL re–measurement) decreased to $17.2 million compared to $25.6 million in the prior year period as a result of lower levels of favorable prior years' reserve development as well as elevated weather–related losses that occurred in the first half of 2017. Favorable prior years' reserve development was $4.3 million pretax less than a year ago and pretax catastrophe losses were $1.8 million higher than a year ago. The Property and Casualty combined ratio of 103.3% increased 1.8 points compared to a year ago.

On an underlying basis, the full year 2017 auto loss ratio of 77.2% decreased 0.8 points compared to the prior year period, with the full year underlying combined ratio improving 1.0 point compared to the prior year. For property, the underlying full year 2017 loss ratio of 47.2% increased 4.8 points compared to the prior year period and was largely related to the impact of higher non–catastrophe weather–related losses that occurred in the first half of 2017. The expense ratio for Property and Casualty of 26.7% was comparable to the prior year period.

Total Property and Casualty written premiums* of $164.8 million and $662.8 million for the three and twelve month periods ended December 31, 2017 increased 4.3% and 4.5%, respectively, compared to the prior year periods. The growth was driven primarily by rate actions, which resulted in an increase in the average premium per policy for both auto and property.

Total Property and Casualty sales* for the fourth quarter 2017 were flat compared to the prior year period but increased 4.9% for the full year 2017 compared to prior year period. Policy retention continues to be stable with auto and property policy retention rates for the current quarter at 83.0% and 87.6%, respectively.

Retirement Segment

For the fourth quarter of 2017, Retirement net income (excluding the effect of DTL re–measurement)* of $12.0 million increased $0.6 million compared to the prior year period, primarily due to a $5.5 million pretax increase in net interest margin offset by a $2.1 million pretax unfavorable change in DAC unlocking accompanied by a $1.8 million pretax increase in DAC amortization. For the full year 2017, Retirement net income (excluding the effect of DTL re–measurement) of $48.9 million was 3.6% lower than the prior year period.

For the full year of 2017, the annualized net interest spread on fixed annuity assets was 194 basis points, an increase of 1 basis point compared to a year ago. Net interest spread benefited from strong prepayment activity in the fourth quarter of 2017, as well as favorable alternative investment returns. Annuity assets under management of $6.8 billion increased 5.2% compared to a year ago, and total cash value persistency remained strong at 89.5% for variable annuities and 92.6% for fixed annuities.

Overall, the total level of Retirement deposits* was comparable to the prior year periods with an increase in asset flows related to fee–based mutual fund offerings nearly offsetting a decrease in traditional annuity products. For the three and twelve month periods ended December 31, 2017, annuity deposits of $104.2 million and $453.1 million decreased 18.8% and 12.9%, respectively, compared to the prior year periods. The decline in annuity deposits was related to lower sales of single premium annuity products in the current year. For the current year, deposits on recurring annuity products were comparable to the prior year period. Sales* and deposit activity related to new retail and institutional Retirement Advantage products, as well as other mutual fund offerings, were strong with $80.0 million of deposits in the current year compared to $39.0 million in the prior year period.

Life Segment

Life net income (excluding the effect of DTL re–measurement)* of $3.0 million and $17.3 million for the three and twelve month periods ended December 31, 2017, decreased 14.3% and increased 4.2%, respectively, compared to the prior year periods. The decrease for the fourth quarter 2017 was largely due to an increase in mortality costs. However, on a full year basis, mortality costs are in–line with our historical trends.

Life insurance premiums and contract deposits* of $31.4 million for the current quarter increased 6.1% compared to the prior year period. For the twelve month period ended December 31, 2017, premiums and contract deposits increased 3.0%, to $111.2 million compared to the prior year period. Life sales* of $6.1 million increased 24.5% compared to the fourth quarter of 2016. Life sales during 2017 of $17.7 million increased 13.5% compared to the prior year period, primarily due to an increase in single premium sales. Life persistency of 95.1% was comparable to prior year.

Investment Results

Total net investment income for the three and twelve month periods ended December 31, 2017 increased 9.0% and 3.4% respectively, compared to the prior year periods. While annuity asset balances in the Retirement segment continued to grow, overall investment results reflected a $5.2 million pretax increase in investment prepayment activity in the current quarter partially offset by the impact of the current low interest rate environment. Pretax net realized investment losses were $1.7 million and $3.4 million for the three and twelve month periods ended December 31, 2017, respectively.

Horace Mann's net unrealized investment gains on fixed maturity and equity securities were $440.3 million at December 31, 2017, compared to net unrealized investment gains on fixed maturity and equity securities of $312.2 million at December 31, 2016. The increase in net unrealized gains is largely attributable to tighter credit spreads across all asset classes.

Webcast Conference Call

Horace Mann's senior management will discuss the Company's fourth quarter financial results with investors and analysts on February 7, 2018 at 10:00 a.m. Eastern Time. The conference call will be webcast live at investors.horacemann.com and archived later in the day for replay.

About Horace Mann

Horace Mann Educators Corporation (NYSE: HMN) is the largest financial services company focused on providing America's educators and school employees with insurance and retirement solutions. Founded by Educators for Educators® in 1945, the Company is headquartered in Springfield, Illinois. For more information about the Company, visit horacemann.com.

Statements included in this news release that are not historical in nature are forward–looking within the meaning of the Private Securities Litigation Reform Act of 1995 and are subject to certain risks and uncertainties. Horace Mann is not under any obligation to (and expressly disclaims any such obligation to) update or revise any forward–looking statements, whether as a result of new information, future events or otherwise. Please refer to the Company's Quarterly Report on Form 10–Q for the period ended September 30, 2017, and the Company's past and future filings and reports filed with the Securities and Exchange Commission for information concerning important factors that could cause actual results to differ materially from those in forward–looking statements. Information contained in this press release include measures which are based on methodologies other than accounting principles generally accepted in the United States (GAAP). Reconciliations of non–GAAP measures to the closest GAAP measures are contained in the Appendix to the Investor Supplement and additional descriptions of the non–GAAP measures are contained in the Glossary of Selected Terms included as an exhibit to the Company's SEC filings.

HORACE MANN EDUCATORS CORPORATION
Financial Highlights (Unaudited)
($ in Millions, except per share data)

    Three Months Ended
December 31,
          Twelve Months Ended
December 31,
       
    2017     2016     Change     2017     2016     Change  
EARNINGS SUMMARY                                            
Net income   $ 125.3     $ 19.9     N.M.     $ 169.4     $ 83.8     102.1 %
  Net realized investment gains (losses), after tax     (0.9 )     (1.5 )   –40.0 %     (1.7 )     2.3     N.M.  
  Re–measurement of net deferred tax liability (DTL)     99.0           N.M.       99.0           N.M.  
Core earnings*     27.2       21.4     27.1 %     72.1       81.5     –11.5 %
                                             
Per diluted share:                                            
  Net income     3.00       0.48     N.M.       4.08       2.02     102.0 %
    Net realized investment gains (losses), after tax     (0.02 )     (0.04 )   –50.0 %     (0.04 )     0.05     N.M.  
    Re–measurement of DTL     2.37           N.M.       2.38           N.M.  
  Core earnings*     0.65       0.52     25.0 %     1.74       1.97     –11.7 %
Weighted average number of shares and equivalent shares (in millions) – Diluted     41.7       41.5     0.5 %     41.6       41.5     0.2 %
                                             
RETURN ON EQUITY                                            
Net income return on equity (A)                           12.3 %     6.2 %   6.1 pts  
Core return on equity excluding net unrealized gains on fixed maturity and equity securities and re–measurement of DTL* (B)                           6.4 %     7.4 %   –1.0 pts  
                                             
FINANCIAL POSITION                                            
Per share (C):                                            
  Book value                         $ 36.88     $ 32.15     14.7 %
    Effect of net unrealized gains on fixed maturity and equity securities (D)                           6.15       4.36     41.1 %
    Effect of the re–measurement of net DTL                           2.43           N.M.  
  Dividends paid   $ 0.275     $ 0.265     3.8 %   $ 1.100     $ 1.060     3.8 %
Ending number of shares outstanding (in millions) (C)                           40.7       40.2     1.2 %
Total assets                         $ 11,198.3     $ 10,576.8     5.9 %
Long–term debt, current and noncurrent                           297.5       247.2     20.3 %
Total shareholders' equity                           1,501.6       1,294.0     16.0 %
                                             
ADDITIONAL INFORMATION                                            
Net realized investment gains (losses)                                            
  Before tax   $ (1.7 )   $ (2.8 )   –39.3 %   $ (3.4 )   $ 4.1     N.M.  
  After tax     (0.9 )     (1.5 )   –40.0 %     (1.7 )     2.3     N.M.  
    Per share, diluted   $ (0.02 )   $ (0.04 )   –50.0 %   $ (0.04 )   $ 0.05     N.M.  

N.M.– Not meaningful.

(A) Based on trailing 12–month net income and average quarter–end shareholders' equity.
(B) Based on trailing 12–month core earnings and average quarter–end shareholders' equity which has been adjusted to exclude the fair value adjustment for investments, net of the related impact on deferred policy acquisition costs and applicable deferred taxes.
(C) Ending shares outstanding were 40,717,873 at December 31, 2017 and 40,244,751 at December 31, 2016.
(D) Net of the related impact on deferred policy acquisition costs and applicable deferred taxes.

HORACE MANN EDUCATORS CORPORATION
Statements of Operations and Supplemental Consolidated Data (Unaudited)
($ in Millions)

    Three Months Ended
December 31,
          Twelve Months Ended
December 31,
       
    2017     2016     Change     2017     2016     Change  
STATEMENTS OF OPERATIONS                                            
Insurance premiums and contract charges earned   $ 204.3     $ 194.2     5.2 %   $ 794.7     $ 759.1     4.7 %
Net investment income     98.6       90.5     9.0 %     373.6       361.2     3.4 %
Net realized investment gains (losses)     (1.7 )     (2.8 )   39.3 %     (3.4 )     4.1     N.M.  
Other income     1.8       0.9     100.0 %     6.6       4.5     46.7 %
  Total revenues     303.0       282.8     7.1 %     1,171.5       1,128.9     3.8 %
                                             
Benefits, claims and settlement expenses     137.4       137.5     –0.1 %     582.3       541.1     7.6 %
Interest credited     50.4       49.1     2.6 %     198.6       192.0     3.4 %
Policy acquisition expenses amortized     28.3       23.6     19.9 %     102.2       96.7     5.7 %
Operating expenses     48.7       42.5     14.6 %     187.8       173.1     8.5 %
Interest expense     3.0       2.9     3.4 %     11.9       11.8     0.8 %
  Total benefits, losses and expenses     267.8       255.6     4.8 %     1,082.8       1,014.7     6.7 %
                                             
Income before income taxes     35.2       27.2     29.4 %     88.7       114.2     –22.3 %
  Income tax expense (benefit)     (90.1 )     7.3     N.M.       (80.7 )     30.4     N.M.  
Net income   $ 125.3     $ 19.9     N.M.     $ 169.4     $ 83.8     102.1 %
                                             
PREMIUMS WRITTEN AND CONTRACT DEPOSITS                              
Property & Casualty   $ 164.8     $ 158.0     4.3 %   $ 662.8     $ 634.3     4.5 %
Annuity deposits     104.2       128.3     –18.8 %     453.1       520.2     –12.9 %
Life     31.4       29.6     6.1 %     111.2       108.0     3.0 %
  Total   $ 300.4     $ 315.9     –4.9 %   $ 1,227.1     $ 1,262.5     –2.8 %
                                             
SEGMENT NET INCOME (LOSS)                                            
Property & Casualty   $ 15.6     $ 9.6     62.5 %   $ 17.8     $ 25.6     –30.5 %
Retirement     51.5       11.4     N.M.       88.4       50.7     74.4 %
Life     63.3       3.5     N.M.       77.6       16.6     N.M.  
Corporate and other (A)     (5.1 )     (4.6 )   10.9 %     (14.4 )     (9.1 )   58.2 %
  Net income   $ 125.3     $ 19.9     N.M.     $ 169.4     $ 83.8     102.1 %
                                             
IMPACT ON SEGMENT NET INCOME (LOSS) FOR RE–MEASUREMENT OF DTL                        
Property & Casualty   $ 0.6     $     N.M.     $ 0.6     $     N.M.  
Retirement     39.5           N.M.       39.5           N.M.  
Life     60.3           N.M.       60.3           N.M.  
Corporate and other (A)     (1.4 )         N.M.       (1.4 )         N.M.  
  Total   $ 99.0     $     N.M.     $ 99.0     $     N.M.  

N.M.– Not meaningful.

(A) Corporate and Other includes interest expense on debt and the impact of net realized investment gains and losses and other Corporate level items. The Company does not allocate the impact of corporate level transactions to the insurance segments consistent with how management evaluates the results of those segments. See detail for this segment on page 4.

HORACE MANN EDUCATORS CORPORATION
Supplemental Business Segment Overview (Unaudited)
($ in Millions)

    Three Months Ended
December 31,
          Twelve Months Ended
December 31,
       
    2017     2016     Change     2017     2016     Change  
PROPERTY & CASUALTY                                            
Premiums written   $ 164.8     $ 158.0     4.3 %   $ 662.8     $ 634.3     4.5 %
Premiums earned     166.3       159.0     4.6 %     648.3       620.5     4.5 %
Net investment income     9.7       10.0     –3.0 %     36.2       39.0     –7.2 %
Other income (expense)     (0.2 )     (0.2 )   %     (0.2 )     0.6     –133.3 %
Losses and loss adjustment expenses (LAE)     111.4       117.1     –4.9 %     496.3       464.1     6.9 %
Operating expenses (includes policy acquisition expenses amortized)     44.9       40.4     11.1 %     173.4       165.7     4.6 %
Interest expense     0.1           N.M.       0.1           N.M.  
Income before tax     19.4       11.3     71.7 %     14.5       30.3     –52.1 %
Net income     15.6       9.6     62.5 %     17.8       25.6     –30.5 %
Net investment income, after tax     7.7       8.0     –3.8 %     28.9       31.2     –7.4 %
                                             
Catastrophe costs (A)                                            
  After tax     2.4       7.6     –68.4 %     40.2       39.1     2.8 %
  Before tax     3.6       11.6     –69.0 %     61.8       60.0     3.0 %
Prior years' reserve favorable (adverse) development, before tax                                            
  Automobile     0.3       1.4     –78.6 %     0.3       1.4     –78.6 %
  Property & other     0.3       1.3     –76.9 %     2.4       5.6     –57.1 %
    Total     0.6       2.7     –77.8 %     2.7       7.0     –61.4 %
                                             
Operating statistics:                                            
  Loss and loss adjustment expense ratio     67.0 %     73.7 %   –6.7 pts       76.6 %     74.8 %   1.8 pts  
  Expense ratio     27.0 %     25.4 %   1.6 pts       26.7 %     26.7 %   0.0 pts  
  Combined ratio     94.0 %     99.1 %   –5.1 pts       103.3 %     101.5 %   1.8 pts  
    Effect on the combined ratio of:                                            
      Catastrophe costs (A)     2.2 %     7.3 %   –5.1 pts       9.5 %     9.7 %   –0.2 pts  
      Prior years' reserve development     –0.4 %     –1.7 %   1.3 pts       –0.4 %     –1.1 %   0.7 pts  
  Combined ratio excluding the effects of catastrophe costs and prior years' reserve development (“underlying combined ratio”)*     92.2 %     93.5 %   –1.3 pts       94.2 %     92.9 %   1.3 pts  
                                             
Policies in force (in thousands)                           695       705     –1.4 %
  Automobile                           479       485     –1.2 %
  Property                           216       220     –1.8 %
                                             
Policy renewal rate – 12 months                                            
  Automobile                           83.0 %     83.5 %   –0.5 pts  
  Property                           87.6 %     87.8 %   –0.2 pts  

N.M.– Not meaningful.

(A) Includes allocated loss adjustment expenses and, when applicable, catastrophe reinsurance reinstatement premiums. For the periods presented, there were no reinsurance reinstatement premiums.

HORACE MANN EDUCATORS CORPORATION
Supplemental Business Segment Overview (Unaudited)
($ in Millions)

    Three Months Ended
December 31,
          Twelve Months Ended
December 31,
       
    2017     2016     Change     2017     2016     Change  
RETIREMENT                                            
Contract deposits   $ 104.2     $ 128.3     –18.8 %   $ 453.1     $ 520.2     –12.9 %
  Variable     46.2       46.0     0.4 %     173.9       163.6     6.3 %
  Fixed     58.0       82.3     –29.5 %     279.2       356.6     –21.7 %
Contract charges earned     7.2       6.3     14.3 %     28.0       24.9     12.4 %
Net investment income     69.1       62.4     10.7 %     262.0       249.4     5.1 %
Interest credited     39.1       37.9     3.2 %     153.5       147.3     4.2 %
Net interest margin (without realized investment gains/losses)     30.0       24.5     22.4 %     108.5       102.1     6.3 %
Other income     1.8       0.8     125.0 %     5.9       2.8     110.7 %
Mortality loss and other reserve changes     (1.8 )     (0.8 )   125.0 %     (5.8 )     (3.9 )   48.7 %
Operating expenses (includes policy acquisition expenses amortized)     19.5       13.6     43.4 %     67.6       54.9     23.1 %
Income before tax     17.7       17.2     2.9 %     69.0       71.0     –2.8 %
Net income     51.5       11.4     N.M.       88.4       50.7     74.4 %
Pretax income increase (decrease) due to evaluation of:                                            
  Deferred policy acquisition costs   $ (1.2 )   $ 0.9     N.M.     $ (1.1 )   $ 0.3     N.M.  
  Guaranteed minimum death benefit reserve     0.1       0.1     %     0.1       0.1     %
Retirement contracts in force (in thousands)                           223       219     1.8 %
Annuity accumulated account value on deposit / Assets under management                         $ 6,764.0     $ 6,427.0     5.2 %
  Variable                           2,152.0       1,923.9     11.9 %
  Fixed                           4,612.0       4,503.1     2.4 %
Annuity accumulated value retention – 12 months                                            
  Variable accumulations                           89.5 %     94.7 %   –5.2 pts  
  Fixed accumulations                           92.6 %     94.6 %   –2.0 pts  
                                             
LIFE                                            
Premiums and contract deposits   $ 31.4     $ 29.6     6.1 %   $ 111.2     $ 108.0     3.0 %
Premiums and contract charges earned     30.8       28.9     6.6 %     118.4       113.7     4.1 %
Net investment income     20.0       18.3     9.3 %     76.2       73.6     3.5 %
Other income     0.1       0.2     –50.0 %     0.4       0.8     –50.0 %
Death benefits/mortality cost/change in reserves     24.2       19.6     23.5 %     80.2       73.1     9.7 %
Interest credited     11.3       11.2     0.9 %     45.1       44.7     0.9 %
Operating expenses (includes policy acquisition expenses amortized)     11.2       10.6     5.7 %     44.0       44.0     %
Income before tax     4.2       6.0     –30.0 %     25.7       26.3     –2.3 %
Net income     63.3       3.5     N.M.       77.6       16.6     N.M.  
Pretax income increase (decrease) due to evaluation of:                                            
  Deferred policy acquisition costs   $     $ 0.2     –100.0 %   $ 0.2     $ 0.4     –50.0 %
Life policies in force (in thousands)                           198       198     %
Life insurance in force                         $ 17,564     $ 17,025     3.2 %
Lapse ratio – 12 months (Ordinary life insurance)                           4.9 %     4.3 %   0.6 pts  
                                             
CORPORATE AND OTHER (A)                                            
Components of income (loss) before tax:                                            
  Net realized investment gains (losses)   $ (1.7 )   $ (2.8 )   –39.3 %   $ (3.4 )   $ 4.1     N.M.  
  Interest expense     (2.9 )     (2.9 )   %     (11.8 )     (11.8 )   %
Other operating expenses, net investment income and other income     (1.5 )     (1.6 )   –6.3 %     (5.3 )     (5.7 )   –7.0 %
Loss before tax     (6.1 )     (7.3 )   –16.4 %     (20.5 )     (13.4 )   53.0 %
Net loss     (5.1 )     (4.6 )   10.9 %     –14.4       (9.1 )   58.2 %

N.M.– Not meaningful.

(A) The Corporate and Other segment includes interest expense on debt and the impact of realized investment gains and losses and other corporate level items. The Company does not allocate the impact of corporate level transactions to the insurance segments consistent with how management evaluates the results of those segments.

HORACE MANN EDUCATORS CORPORATION
Supplemental Business Segment Overview (Unaudited)
($ in Millions)

  Three Months Ended
December 31,
    Twelve Months Ended
December 31,
   
  2017 2016 Change   2017 2016 Change  
INVESTMENTS                        
Retirement and Life                        
  Fixed maturities, at fair value (amortized cost 2017, $6,490.8; 2016, $6,404.4)             $ 6,874.1 $ 6,684.3 2.8 %
  Equity securities, at fair value (cost 2017, $77.5; 2016, $70.5)               80.9   66.6 21.5 %
  Short–term investments               36.4   10.0 N.M.  
  Policy loans               153.6   151.9 1.1 %
  Other investments               203.7   159.2 28.0 %
    Total Retirement and Life investments               7,348.7   7,072.0 3.9 %
                         
Property & Casualty                        
  Fixed maturities, at fair value (amortized cost 2017, $812.1; 2016, $747.7)             $ 850.0 $ 772.4 10.0 %
  Equity securities, at fair value (cost 2017, $38.8; 2016, $63.6)               54.6   75.0 –27.2 %
  Short–term investments               19.3   10.9 77.1 %
  Other investments               72.9   45.0 62.0 %
    Total Property & Casualty investments               996.8   903.3 10.4 %
                         
Corporate investments               6.8   24.0 –71.7 %
                         
    Total investments               8,352.3   7,999.3 4.4 %
                         
Net investment income                        
  Before tax $ 98.6 $ 90.5 9.0 % $ 373.6 $ 361.2 3.4 %
  After tax   65.5   60.3 8.6 %   248.3   240.6 3.2 %

N.M.– Not meaningful.

Newrange Gold Corp. to Begin Trading on US OTCQB Exchange and Engages Investor Relations

VANCOUVER, BC—(Marketwired – February 06, 2018) – (TSX VENTURE: NRG) (OTC PINK: NRGOF) (FRANKFURT: X6C)Newrange Gold Corp. (“Newrange” or the “Company“) is pleased to announce that effective at the beginning of trading on Wednesday, February 7, 2018, the Company will commence trading on the OTCQB Venture Market in the United States under the symbol NRGOF. The OTCQB is the US equivalent of the TSX Venture Exchange in Canada for early–stage and developing companies and provides access to the large US investment community.

Further the Company announces that it has retained Fidel Ricardo M. Thomas (“Thomas”) to act as an investor relations consultant to the Company. Thomas will provide investor relations and shareholder communications services and assist the Company in identifying and securing new sources of capital.

Thomas has been engaged on a four (4) month term with a monthly fee of $4,800. In addition, Newrange has agreed to grant options to purchase 150,000 common shares of the Company (the “Options”) at a purchase price of $0.32 per share for a period of three (3) years from the date of grant. The Options are be subject to the terms of the Company's stock option plan and will vest in accordance with the provisions therein and the policies of the TSX Venture Exchange.

Thomas currently has no direct or indirect interest in the securities of Newrange, or any right or intent to acquire such an interest except pursuant to the exercise of the above referenced Options. The appointment of Thomas as an investor relations consultant to Newrange remains subject to regulatory acceptance of applicable filings with the TSX Venture Exchange.

About Newrange Gold Corp.

Newrange is an aggressive exploration and development company focused on near to intermediate term production opportunities in favorable jurisdictions, including Nevada, Colorado and Colombia. Focused on developing shareholder value through exploration and development of key projects, the Company is committed to building sustainable value for all stakeholders. Further information can be found on our website at www.newrangegold.com.

Upcoming Events

Newrange will be exhibiting at the Metal Investors Forum Saturday March 3, 2018. The Company will also be exhibiting at the Prospectors & Developers Association of Canada March 4th and 5th, 2018 in Booth 2415A. All interested parties are cordially invited to attend one or both exhibits and take the opportunity to meet and speak with Management.

Signed: “Robert G. Carrington”
President & CEO

Neither the TSX Venture Exchange nor the Investment Industry Regulatory Organization of Canada accepts responsibility for the adequacy or accuracy of this release.

Forward–Looking Statement:

Some of the statements in this news release contain forward–looking information that involves inherent risk and uncertainty affecting the business of Newrange Gold Corp. Actual results may differ materially from those currently anticipated in such statements.

Vivakor Announces Additional Patent Filings

LAS VEGAS, NV—(Marketwired – February 06, 2018) – Vivakor Inc. (OTC PINK: VIVK) announced today that it has increased its multi–patent portfolio with new filings regarding its closed–looped hydrocarbon recovery system.

Further technological enhancements to Vivakor's existing oil separating capabilities have been filed. The Company plans to expand its patent portfolio further, as they have made huge advancements in upgrading up–stream end products from their processed oil–based material. Management believes such developments will immediately add significant value to products sold, thus aggressively driving shareholder equity value due to the technology advancements.

CEO Matt Nicosia said, “The Company's ability to continue to expand its developed, and acquired technologies is a key focus for 2018 as we drive asset growth by maximizing existing revenue streams and creating new ones. This is a very exciting year for Vivakor as this expansion is well underway.”

Vivakor is an asset acquisition company that procures, develops and commercializes revenue producing assets across the globe. These holdings include intellectual properties that are proprietary and largely disruptive while centered principally in the natural resources sector.

ABOUT VIVAKOR, INC.
For more information please visit www.vivakor.com.

FORWARD–LOOKING STATEMENTS
This news release may contain forward–looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. Such statements are based upon our current expectations and speak only as of the date hereof. Our actual results may differ materially and adversely from those expressed in any forward–looking statements as a result of various factors and uncertainties, including economic slowdown affecting companies, our ability to successfully develop products, rapid change in our markets, changes in demand for our future products, legislative, regulatory and competitive developments and general economic conditions. These risks and uncertainties include, but are not limited to, risks and uncertainties discussed in Vivakor's filings with the Securities and Exchange Commission, which factors may be incorporated herein by reference. Forward–looking statements may be identified but not limited by the use of the words “anticipates,” “expects,” “intends,” “plans,” “should,” “could,” “would,” “may,” “will,” “believes,” “estimates,” “potential,” or “continue” and variations or similar expressions. We undertake no obligation to revise or update publicly any forward–looking statements for any reason.

Join the Closers Now — Online Beat 'em Up RPG Closers Launches Today on PC

SEATTLE, WA—(Marketwired – February 06, 2018) – En Masse Entertainment announced today that Closers, the fast–paced online RPG with high–octane action and anime–stylings, is now available on Steam and on the En Masse digital store. Closers' story follows a group of high school students endowed with unique psychic powers tasked with stopping an alien invasion. As part of an elite defense force protecting Neo–Seoul, the game masterfully combines the frenetic action of old school arcade 2D beat 'em ups with the engaging combo mechanics of fighting games, and the vivid art style and drama of an episodic anime.

“Already wildly popular in Korea, we're excited to introduce the unique world of Closers to gamers in the West,” said Stefan Ramirez, Senior Product Manager at En Masse. “The game's characters, universe, style, and gameplay are like no other game in the MMO space, and we hope players will enjoy the one–of–a–kind experience Closers has to offer. And like with any great MMO, we have a robust schedule of content ready to bring to fans in the months following launch, so this is just the beginning of what's in store!”

Starting today, players will also get access to the Closers Launch Update which introduces the Dimensional Ops Center, an area where players can earn the most powerful gear in the game and challenge Closers' first Raid Boss: Tiamat! There's even more great content planned for the near future including new characters and playable teams, all with their own unique associated gear, costumes, quests, and storylines.

Great content updates don't stop at launch — later this February, the new character — Nata — will be joining the Closers growing roster of selectable characters. Nata's greatest joy in life is challenging himself against the strongest fighters he can find. He was drafted to the Wolfdogs (a special rogue Closers group whose power rivals the Black Lambs) against his will, and now his sole focus is becoming as powerful as he can so he can escape the Wolfdogs and live life on his terms. Constant major updates will be coming adding more characters, features, and special events to Closers every month!

Closers is a multiplayer online action RPG (MOARPG) beat 'em up with an emphasis on over–the–top brawler combat, boisterous storytelling, and characters with deep and profound backstories. Evil aliens have begun opening interdimensional gates to invade the world and players take the role of one of the “Closers,” a group of psychic teenagers chosen by the world government to take on the alien menace and close these dangerous dimensional portals.

Published by En Masse Entertainment, Closers is available on Steam and on the En Masse digital store. For more information on Closers, please visit the official site closers.enmasse.com and follow the progress of the game on Facebook, Twitter, and YouTube.

ABOUT EN MASSE ENTERTAINMENT

Based in Seattle, Washington, En Masse Entertainment embodies the evolution of modern game publishing. The company's mission is to publish great games and provide great service. Beginning with its inaugural title, TERA, and continuing with Alliance of Valiant Arms, Kritika Online and soon Closers, En Masse Entertainment has built a track record of excellence and innovation. The team at En Masse includes experts in online technology, live service, branding, community, and player support, allowing them to thrive as a publisher in the digital era. For more information, visit enmasse.com.

Image Available: http://www.marketwire.com/library/MwGo/2018/2/6/11G149839/Images/ClosersImage1–356a62a3204db0ea9a3f989cd12ebc49.jpg
Image Available: http://www.marketwire.com/library/MwGo/2018/2/6/11G149839/Images/ClosersImage2–496b378c009ba25980fc053963274bc5.jpg

Embedded Video Available: https://www.youtube.com/watch?v=noR4XYVKfWo&feature=youtu.be

Fenwick's Q4 2017 Silicon Valley Venture Capital Survey Shows Valuations Remain Strong

MOUNTAIN VIEW, CA—(Marketwired – February 06, 2018) – Fenwick & West today released a first look at results of its Fourth Quarter 2017 Silicon Valley Venture Capital Survey, which analyzed the terms of 190 venture financings that closed in the fourth quarter of 2017 by companies headquartered in Silicon Valley.

Key findings include:

  • Valuation results continued to be strong in Q4 2017, but the percentage price increases declined moderately from the prior quarter, following three consecutive quarters of increases.
  • The internet/digital media industry recorded the strongest valuation results and was the only industry in which the valuation results were up compared to the prior quarter.
  • Valuation results for late stage, Series E+, financings were up compared to prior quarter, while Series D financings recorded the weakest valuation results.

“VC investment activity in Silicon Valley continued to remain strong during the past quarter,” said Cindy Hess, co–chair of Fenwick's startup and venture capital practice and co–author of the survey. “While the percentage price increases did decline moderately, we don't believe that represents a dampening of the enthusiasm private investors have shown the past few quarters. Though we'll see whether that translates into the investor enthusiasm needed to open public markets.”

“The valuation results for Series E+ rounds improved moderately last quarter, while Series D financings recorded the weakest valuations results and its valuation metrics declined sharply,” said Mark Leahy, co–chair of Fenwick's startup and venture capital practice and co–author of the survey. “Late stage rounds, though, were strong in 2017 – aside from the slight decline in Q4. This seems to continue the trend we've seen last year where more investments are flowing into late stage deals at high valuations.”

Valuation Results Remain Strong

Valuation results remained strong in Q4 2017, but the percentage price increases declined moderately compared to the prior quarter, following three consecutive quarters of increases.

Up rounds exceeded down rounds 70% to 19%, with 11% flat in Q4 2017, a decrease from Q3 when up rounds exceeded down rounds 79% to 10%, with 11% flat. This was the lowest percentage of up rounds since Q4 2016 and the highest percentage of down rounds since Q2 2013.

An up round is one in which the price per share at which a company sells its stock has increased since its prior financing round. Conversely, a down round is one in which the price per share has declined since a company's prior financing round.

The Fenwick & West Venture Capital Barometer™ showed an average price increase in Q4 2017 of 74%, a decrease from the 80% recorded in Q3 and the first quarter in 2017 in which the average percentage price increase had decreased compared to the prior quarter.

Internet/Digital Media Scores Highest Valuation Results

The internet/digital media industry recorded the strongest valuation results in Q4 2017 compared to the other industries, with an average price increase of 179% and a median price increase of 51%, both up from the prior quarter. The software industry also recorded strong valuation results in Q4, though moderately weaker compared to Q3. The life sciences industry, along with the hardware industry, recorded the lowest valuation metrics in Q4 2017.

Valuation Results Down for Series D Financings

Series D financings recorded the weakest valuation results in Q4 2017 compared to the other financing rounds, with the highest percentage of down rounds and the lowest average and median price increases of all the financing rounds. The valuation metrics for Series D financings in Q4 also declined sharply compared to the prior quarter. In contrast, the valuation results for Series E+ financings in Q4 improved moderately compared to the prior quarter.

About the Survey
The Fenwick & West Venture Capital Survey has been published quarterly for more than 15 years and offers a unique view of the venture capital market in Silicon Valley by providing insight into changes in valuations and terms. Focusing on trends in venture financing and valuations, this Fenwick & West survey complements the economic data presented by Dow Jones VentureSource, PWC/CB Insights MoneyTree™ Report and PitchBook–NVCA Venture Monitor.

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Avaya, Beta 80 and Conveyant Systems Announce the Launch of the World's First Commercially Available, End-to-End NENA i3 Compliant Next Generation 911 Solution

SANTA CLARA, CA—(Marketwired – February 06, 2018) – Avaya (NYSE: AVYA) today announced the launch of the world's first, commercially available, end–to–end NENA i3 compliant Next Generation 911 (NG911) solution together with partners Beta 80, a leading provider of emergency communications services, and Conveyant Systems, a leading provider of enterprise emergency management solutions.

The integrated solution features the Beta 80 iO® suite of Computer Aided Dispatch (CAD) and Call Taking (CT), and the integrated Conveyant Sentry Emergency Response Management (ERM) product.

“Avaya is proud to bring together the efficient and innovative functionality available from the Beta 80 and Conveyant products,” said Mark Fletcher, ENP Chief Architect, Public Safety Solutions, at Avaya. “As members of the Avaya DevConnect ecosystem, and Avaya Select Products, these companies have demonstrated their compliance not only with the NG911 NENA i3 standards, but the strict level of compliance and testing with the Avaya platforms. We are proud to be able to deliver this functionality to both our enterprise and public safety customers, allowing them to move the migration to NG911 forward.”

The ongoing deployment of statewide ESINets and Next Generation 911 solutions will provide the IP conduit needed to provide real–time multimedia information and context from intelligent endpoints, which can be delivered today through this new innovative solution.

“As NG911 takes hold, Conveyant provides the thought leadership, strength, and flexibility of our Sentry ERM solutions,” said Tim Kenyon, ENP President, Conveyant Systems, Inc. “The delivery of specific location data to the PSAP, as demonstrated with Beta80, affirms the successful implementation of the functionality we co–presented with Avaya to the FCC in 2012. This is all possible because the Sentry ERM delivers NG911 i3 compliant support, as an Additional Data Repository (ADR) in the enterprise.”

Sentry customers can benefit now using “Over the Top” NG911 functionality, in advance of ESINet deployment, and be fully ready when an actual ESINet is put in place. Agencies that deploy the Beta 80 Public Safety Answering Points (PSAPs) solution are able to receive the full scope of NG911 data services from Sentry enterprise customers immediately.

“The integration of Conveyant's Sentry product into the Beta 80 iO CAD allows a fully integrated end–to–end NG911 solution to be delivered to enterprise customers and delivers to PSAPs the data and specific location information that the Sentry product generates. What is particularly exciting about this integration is that Beta 80 can deliver NG911 services today, to any agency serving enterprise customers using the Sentry product, regardless of whether the State has deployed an NG911 infrastructure or not,” said Gregory L. Rohde, General Manager, Beta 80 International.

About Avaya

Avaya enables the mission critical, real–time communication applications of the world's most important operations. As a global leader in delivering superior communications experiences, Avaya provides the most complete portfolio of software and services for contact center and unified communications — offered on premises, in the cloud, or a hybrid. Today's digital world requires communications enablement, and no other company is better positioned to do this than Avaya. For more information, please visit www.avaya.com.

About Beta 80:

Beta 80 International, a subsidiary of Beta 80 Group, provides innovative end–to–end solutions for Public Safety in North America. For over 25 years, Beta 80 has been developing innovative technology to provide tailored public safety solutions that go beyond the expected. Our iO® solution is a leading software platform for PSAPs and emergency call centers in several countries. Today, it covers 33.000 municipalities and protects more than 27 million citizens. It's currently active in Italy, USA, Europe and Central America with over 62 PSAPs (Law, EMS, Fire, Healthcare systems, Civil Defense) and Control Rooms. To learn more, please visit corporate global site www.beta80group.com and U.S. site http://us.beta80group.com.

About Conveyant:

For over 30 years, Conveyant Systems has been a leading provider of data management and telecommunications systems in the Government, Education, Medical and Enterprise markets. From the TeleDirectory line of attendant consoles to the Sentry ERM for Enterprise 911, Conveyant has delivered consistently as an OEM developer and supplier partner on a global scale. Sentry ERM solutions provide for a complete end to end E911 solution for any enterprise deployment, large or small, and provide those capabilities at a much more competitive price point than most competitors.

Corporate Global Site www.conveyant.com

Cautionary Note Regarding Forward–Looking Statements

This document contains certain “forward–looking statements.” All statements other than statements of historical fact are “forward–looking” statements for purposes of the U.S. federal and state securities laws. These statements may be identified by the use of forward looking terminology such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “our vision,” “plan,” “potential,” “preliminary,” “predict,” “should,” “will,” or “would” or the negative thereof or other variations thereof or comparable terminology and include, but are not limited to expected feature releases, statements about future products, expected cash savings and statements about growth, exchange listing and improved operational metrics. The Company has based these forward–looking statements on its current expectations, assumptions, estimates and projections. While the Company believes these expectations, assumptions, estimates and projections are reasonable, such forward–looking statements are only predictions and involve known and unknown risks and uncertainties, many of which are beyond its control. The factors are discussed in the Company's Registration Statement on Form 10 filed with the Securities and Exchange Commission, may cause its actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by these forward–looking statements. For a further list and description of such risks and uncertainties, please refer to the Company's filings with the SEC that are available at www.sec.gov. The Company cautions you that the list of important factors included in the Company's SEC filings may not contain all of the material factors that are important to you. In addition, in light of these risks and uncertainties, the matters referred to in the forward–looking statements contained in this report may not in fact occur. The Company undertakes no obligation to publicly update or revise any forward–looking statement as a result of new information, future events or otherwise, except as otherwise required by law.

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Source: Avaya Newsroom

/NOTICE TO DISREGARD – Avaya

SANTA CLARA, CA—(Marketwired – February 06, 2018) – We are advised by Avaya (NYSE: AVYA) that journalists and other readers should disregard the news release, “Avaya, Beta 80 and Conveyant Systems Announce the Launch of the World's First Commercially Available, End–to–End NENA i3 Compliant Next Generation 911 Solution,” issued earlier today over Marketwired.