COLUMBUS, Ohio--(BUSINESS WIRE)--Nationwide Financial Services, Inc. (NYSE: NFS - News), a leading provider of long-term savings and retirement products, today reported second quarter 2008 net income of $85.4 million, or $0.62 per diluted share, compared with second quarter 2007 net income of $197.3 million, or $1.37 per diluted share.Net income for the current quarter includes non-operating realized investment losses of $41.5 million, or $0.29 per diluted share, compared to investment losses of $1.2 million, or $0.01 per diluted share, in the prior year quarter. The current quarter’s $41.5 million investment loss includes $62.1 million of other-than-temporary impairments and $1.4 million of net realized losses and is partially offset by $20.5 million of gains related to the mark-to-market of net variable annuity living benefit liabilities.
Nationwide Financial analyzes operating performance using a non-GAAP financial measure called “net operating earnings,” which the company believes enhances understanding and comparability of its performance by highlighting its results from continuing operations and the underlying profitability drivers. See Exhibit 3 for a description of non-GAAP financial measures included in this earnings announcement, a reconciliation of non-GAAP financial measures to GAAP financial measures, and the substantive reasons why the company believes presentation of these non-GAAP financial measures provides useful information to investors regarding its financial condition and results of operations. The table on the top of page 10 reconciles net operating earnings to net income, including the related diluted per share amounts for the periods indicated.
“Our core businesses delivered solid results despite a very difficult market environment,” said Jerry Jurgensen, chief executive officer. “While our consolidated results reflect the broader economic conditions, our focus on execution and expense management helped us to maintain operating margins in our core business lines, and we continued to make steady progress in improving our overall life insurance market share ranking. Despite the market turmoil, our capital position remains strong, and our investment portfolio is performing as expected.
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