FBL FINANCIAL GROUP INC - FORM 8-K - EX-99.2

Attached files

file	filename
8-K - FBL FINANCIAL GROUP INC	pressrelease8k2011q4.htm
EX-99.1 - FBL FINANCIAL GROUP INC	exh991newsreleaseq42011.htm
EX-99.3 - FBL FINANCIAL GROUP INC	exhibit993investments4q11.htm

Financial Supplement

2011 Fourth Quarter Report




Corporate Headquarters	FBL Financial Group, Inc.
	5400 University Avenue
	West Des Moines, Iowa 50266-5997
	(515) 225-5400
Financial Inquiries	For more information contact:
	Jim Brannen
	Chief Financial Officer
	Jim.Brannen@FBLFinancial.com
	(515) 225-5631

	Don Seibel
	Vice President - Finance
	Don.Seibel@FBLFinancial.com
	(515) 226-6399

	Kathleen Till Stange
	Investor Relations Vice President
	Kathleen.TillStange@FBLFinancial.com
	(515) 226-6780
Internet Information	FBL Financial Group, Inc.
	www.fblfinancial.com
Stock Symbol	NYSE: FFG
Transfer Agent	The Bank of New York Mellon
	c/o BNY Mellon Shareowner Services
	Shareholder Relations Department
	P.O. Box 358015
	Jersey City, NJ 07310-1900
	www.bnymellon.com/shareowner



FBL Financial Group, Inc.
Financial Supplement (Unaudited)
December 31, 2011
Table of Contents/Notes

Consolidated Financial Statements:
Consolidated Balance Sheets		2
Consolidated Statements of Operations		4
Consolidated Statements of Operating Income, last five quarters		5
Financial Information by Segment:
Segment Information		6
Consolidating Statements of Pre-tax Operating Income (Loss)		7
Statements of Pretax Operating Income (Loss), last five quarters:
Annuity Segment		9
Life Insurance Segment		10
Corporate and Other Segment		12
Deferred Acquisition Costs by Segment		13
Collected Premiums, last five quarters		15
Parent Company Liquidity		16
Other Information		17

NOTE 1: On December 30, 2011, we sold our wholly owned subsidiary, EquiTrust Life Insurance Company (EquiTrust Life) to an affiliate of Guggenheim Partners, LLC. While we sold our entire equity interest in EquiTrust Life, another subsidiary, Farm Bureau Life Insurance Company is reinsuring a limited portion of the EquiTrust Life business related to variable universal life and variable annuity products distributed through various unaffiliated third parties, as well as a small amount of fixed life and annuity products. The business component sold (herein described as “the EquiTrust Life Business”) encompassed our former Traditional Annuity - Independent segment and a smaller portion of our Life Insurance and Corporate and Other segments.

With the sale of EquiTrust Life, we have changed the name of our remaining annuity segment from "Traditional Annuity - Exclusive Distribution" to "Annuity" and the name of our life segment from "Traditional and Universal Life Insurance" to "Life Insurance." In addition, we have consolidated the Variable segment into the Corporate and Other segment since we are no longer selling variable business.

In accordance with mandatory redemption provisions of the underlying notes, we redeemed $225.0 million of our long-term debt. Redemptions include $50.0 million of our senior notes with affiliates on December 30, 2011 and our $175.0 million public senior notes on January 30, 2012. In addition, our Board of Directors approved a stock repurchase plan in October 2011.

Additional information regarding the sale of EquiTrust Life and our capital management initiatives can be found in our filings with the SEC.

NOTE 2: In addition to net income (loss), FBL Financial Group has consistently used operating income (loss), a non-GAAP financial measure common in the life insurance industry, as a primary economic measure to evaluate its financial performance. Operating income (loss) for the periods presented equals net income (loss) adjusted to eliminate the impact of realized gains and losses on investments, changes in net unrealized gains and losses on derivatives, discontinued operations and loss on debt redemption associated with disposed operations.

We use operating income, in addition to net income (loss), to measure our performance since realized gains and losses on investments and the change in net unrealized gains and losses on derivatives can fluctuate greatly from quarter to quarter. Also, the discontinued operations and loss on debt redemption are non-recurring items. These fluctuations make it difficult to analyze core operating trends. A view of our operating performance without the impact of these mismatches and nonrecurring items enhances the analysis of our results. We use operating income for goal setting, determining short-term incentive compensation and evaluating performance on a basis comparable to that used by many in the investment community.

NOTE 3: Certain financial information presented herein may not add due to rounding.

FBL Financial Group, Inc.

Consolidated Balance Sheets (Unaudited)

(Dollars in thousands)



	December 31,
	2011		2010
Assets
Investments:
Fixed maturity securities - available for sale, at fair value (amortized cost: 2011 - $5,189,994; 2010 - $4,768,155)	$	5,570,550	$	4,870,569
Equity securities - available for sale, at fair value (cost: 2011 - $55,697; 2010 - $54,912)	57,432		56,486
Mortgage loans	552,359		552,348
Real estate	2,541		8,265
Policy loans	172,368		170,341
Short-term investments	41,756		194,871
Other investments	189		461
Total investments	6,397,195		5,853,341

Cash and cash equivalents	296,339		4,794
Restricted debt defeasance trust assets	211,627		—
Securities and indebtedness of related parties	64,516		42,415
Accrued investment income	67,200		62,183
Amounts receivable from affiliates	3,942		2,025
Reinsurance recoverable	94,685		97,257
Deferred acquisition costs	376,797		463,021
Value of insurance in force acquired	25,781		27,706
Current income taxes recoverable	16,334		13,952
Other assets	67,590		67,000
Assets held in separate accounts	603,903		675,586
Assets of subsidiary held for sale	—		8,024,820









Total assets	$	8,225,909	$	15,334,100

FBL Financial Group, Inc.

Consolidated Balance Sheets (Continued)

(Dollars in thousands)



	December 31,
	2011		2010
Liabilities and stockholders' equity
Liabilities:
Future policy benefits:
Interest sensitive and index products	$	3,744,857	$	3,468,557
Traditional life insurance and accident and health products	1,401,995		1,362,410
Other policy claims and benefits	40,488		47,668
Supplementary contracts without life contingencies	359,663		353,935
Advance premiums and other deposits	211,573		188,577
Amounts payable to affiliates	713		328
Short-term debt payable to affiliates	—		100,000
Short-term debt payable to non-affiliates	174,258		—
Long-term debt payable to affiliates	49,968		—
Long-term debt payable to non-affiliates	97,000		271,168
Deferred income taxes	141,130		117,325
Other liabilities	122,180		104,653
Liabilities related to separate accounts	603,903		675,586
Liabilities of subsidiary held for sale	—		7,497,479
Total liabilities	6,947,728		14,187,686

Stockholders' equity:
FBL Financial Group, Inc. stockholders' equity
Preferred stock, without par value, at liquidation value - authorized 10,000,000 shares, issued and outstanding 5,000,000 Series B shares	3,000		3,000
Class A common stock, without par value - authorized 88,500,000 shares, issued and outstanding 29,457,644 shares in 2011 and 29,749,068 shares in 2010	129,684		118,165
Class B common stock, without par value - authorized 1,500,000 shares, issued and outstanding 1,192,990 shares	7,522		7,522
Accumulated other comprehensive income	149,622		39,895
Retained earnings	988,238		977,740
Total FBL Financial Group, Inc. stockholders' equity	1,278,066		1,146,322
Noncontrolling interest	115		92
Total stockholders' equity	1,278,181		1,146,414
Total liabilities and stockholders' equity	$	8,225,909	$	15,334,100

FBL Financial Group, Inc.

Consolidated Statements of Operations (Unaudited)

(Dollars in thousands, except per share data)



	Three months ended December 31,						Year ended December 31,
	2011			2010			2011			2010
Revenues:
Interest sensitive product charges	$	24,139		$	23,394		$	97,103		$	93,881
Traditional life insurance premiums	42,651			41,299			168,519			162,056
Net investment income	86,008			82,263			343,310			324,540
Net realized capital gains on sales of investments	746			15,480			5,355			21,392

Total other-than-temporary impairment losses	(7,308		)	(8,159		)	(20,206		)	(30,637		)
Non-credit portion in other comprehensive income	(964		)	6,768			6,555			20,821
Net impairment losses recognized in earnings	(8,272		)	(1,391		)	(13,651		)	(9,816		)
Other income	3,866			3,778			17,701			14,289
Total revenues	149,138			164,823			618,337			606,342

Benefits and expenses:
Interest sensitive product benefits	47,831			46,413			192,082			176,588
Traditional life insurance benefits	39,046			33,418			148,959			137,180
Policyholder dividends	4,265			4,318			17,030			17,571
Underwriting, acquisition and insurance expenses	29,910			28,657			123,387			123,443
Interest expense	2,008			2,398			8,532			9,566
Loss on debt redemption	33,176			—			33,176			—
Other expenses	4,884			5,558			20,652			19,782
Total benefits and expenses	161,120			120,762			543,818			484,130
	(11,982		)	44,061			74,519			122,212
Income taxes	6,832			(15,394		)	(20,479		)	(41,348		)
Equity income, net of related income taxes	265			685			1,284			3,459
Net income (loss) from continuing operations	(4,885		)	29,352			55,324			84,323
Discontinued operations:
Loss on sale of subsidiary, net of tax	(68,507		)	—			(68,507		)	—
Income from discontinued operations, net of tax	13,090			22,281			44,465			36,252
Total income (loss) from discontinued operations	(55,417		)	22,281			(24,042		)	36,252
Net income (loss)	(60,302		)	51,633			31,282			120,575
Net loss (income) attributable to noncontrolling interest	(27		)	(1		)	(6		)	78
Net income (loss) attributable to FBL Financial Group, Inc.	$	(60,329	)	$	51,632		$	31,276		$	120,653

Earnings (loss) per common share:
Income (loss) from continuing operations	$	(0.16	)	$	0.96		$	1.80		$	2.77
Income (loss) from discontinued operations	(1.80		)	0.73			(0.79		)	1.19
Earnings (loss) per common share	$	(1.96	)	$	1.69		$	1.01		$	3.96
Earnings (loss) per common share - assuming dilution
Income (loss) from continuing operations	$	(0.16	)	$	0.95		$	1.77		$	2.74
Income (loss) from discontinued operations	(1.80		)	0.72			(0.77		)	1.18
Earnings (loss) per common share - assuming dilution	$	(1.96	)	$	1.67		$	1.00		$	3.92

Cash dividends per common share	$	0.1000		$	0.0625		$	0.2875		$	0.2500



FBL Financial Group, Inc.
Consolidated Statements of Operating Income
(Dollars in thousands, except per share data)

	Q4 2010			Q1 2011			Q2 2011			Q3 2011			Q4 2011
Operating revenues:
Interest sensitive product charges	$	23,338		$	24,112		$	24,053		$	24,792		$	24,136
Traditional life insurance premiums	41,299			41,387			44,139			40,342			42,651
Net investment income	81,976			83,706			86,685			85,987			86,485
Other income	3,778			4,999			3,980			4,856			3,866
Total operating revenues	150,391			154,204			158,857			155,977			157,138

Benefits and expenses:
Interest sensitive product benefits	46,102			46,685			48,261			49,369			47,765
Traditional life insurance benefits	33,409			36,598			37,717			35,598			39,053
Policyholder dividends	4,318			4,300			4,356			4,109			4,265
Underwriting, acquisition and insurance expenses:
Commission expense, net of deferrals	3,498			3,923			4,404			3,248			3,643
Amortization of deferred acquisition costs	8,041			11,855			11,863			16,140			10,438
Amortization of value of insurance in force acquired	32			360			(6,172		)	1,405			(297		)
Other underwriting expenses	14,770			15,201			15,992			15,473			16,214
Total underwriting, acquisition and insurance expenses	26,341			31,339			26,087			36,266			29,998
Interest expense	2,398			2,388			2,153			1,983			2,008
Other expenses	5,558			4,881			6,001			4,886			4,884
Total benefits and expenses	118,126			126,191			124,575			132,211			127,973
	32,265			28,013			34,282			23,766			29,165
Income taxes	(11,267		)	(8,892		)	(10,273		)	(7,991		)	(7,572		)
Net loss (income) attributable to noncontrolling interest	(1		)	2			18			1			(27		)
Equity income, net of related income taxes	685			731			57			231			265
Operating income	21,682			19,854			24,084			16,007			21,831

Realized gains/losses on investments, net of offsets	153			202			725			285			(4,898		)
Change in net unrealized gains/losses on derivatives, net of offsets	7,516			(418		)	41			(550		)	(281		)
Net impact of discontinued operations	22,281			6,855			12,696			11,824			(55,417		)
Loss on redemption of debt	—			—			—			—			(21,564		)
Net income (loss) attributable to FBL Financial Group, Inc.	$	51,632		$	26,493		$	37,546		$	27,566		$	(60,329	)

Operating income per common share - assuming dilution	$	0.70		$	0.64		$	0.77		$	0.51		$	0.70
Earnings (loss) per common share - assuming dilution	$	1.67		$	0.85		$	1.20		$	0.88		$	(1.96	)

Weighted average common shares outstanding (in thousands):
Basic	30,495			30,612			30,733			30,803			30,746
Effect of dilutive securities	460			510			474			463			509
Diluted	30,955			31,122			31,207			31,266			31,255

Operating return on equity, excluding AOCI - last twelve months (1)	10.2		%	10.7		%	11.5		%	10.7		%	7.1		%
Operating return on equity, including AOCI - last twelve months (1)	10.1		%	10.2		%	10.8		%	9.8		%	6.5		%

(1) Return on equity for periods prior to Q4 2011 has not been restated to reflect the impact of discontinued operations.

FBL Financial Group, Inc.

Segment Information

We analyze operations by reviewing financial information regarding our primary products that are aggregated into the Annuity (formerly known as "Traditional Annuity - Exclusive Distribution") and Life Insurance (formerly known as "Traditional and Universal Life Insurance") product segments. In addition, our Corporate and Other segment includes various support operations, corporate capital and other product lines that are not currently underwritten by the Company.

The Annuity segment primarily consists of fixed rate annuities and supplementary contracts (some of which involve life contingencies). Fixed rate annuities provide for tax-deferred savings and supplementary contracts provide for the systematic repayment of funds that accumulate interest. Fixed rate annuities consist primarily of flexible premium deferred annuities, but also include single premium deferred and immediate contracts. With fixed rate annuities, we bear the underlying investment risk and credit interest to the contracts at rates we determine, subject to interest rate guarantees.

The Life Insurance segment consists of whole life, term life and universal life policies. These policies provide benefits upon the death of the insured and may also allow the customer to build cash value on a tax-deferred basis.

The Corporate and Other segment consists of the following corporate items and products/services that do not meet the quantitative threshold for separate segment reporting:



•		investments and related investment income not specifically allocated to our product segments;
•		interest expense;
•		closed blocks of variable annuity, variable universal life insurance and accident and health insurance products;
•		advisory services for the management of investments and other companies;
•		marketing and distribution services for the sale of mutual funds and insurance products not issued by us; and
•		leasing services, primarily with affiliates.

We analyze our segment results based on pre-tax operating income (loss). Accordingly, income taxes are not allocated to the segments. In addition, operating results are reported net of transactions between the segments.

FBL Financial Group, Inc.

Consolidating Statements of Pre-tax Operating Income



Quarter Ended December 31, 2011	Annuity			Life Insurance		Corporate & Other			Consolidated
	(Dollars in thousands)
Operating revenues:
Interest sensitive product charges	$	167		$	12,624	$	11,345		$	24,136
Traditional life insurance premiums	—			42,651		—			42,651
Net investment income	46,373			33,402		6,710			86,485
Other income	1			11		3,854			3,866
Total operating revenues	46,541			88,688		21,909			157,138

Benefits and expenses:
Interest sensitive product benefits	25,234			15,027		7,504			47,765
Traditional life insurance benefits	—			39,053		—			39,053
Policyholder dividends	—			4,265		—			4,265
Underwriting, acquisition and insurance expenses:
Commission expense, net of deferrals	—			2,761		882			3,643
Amortization of deferred policy acquisition costs	3,927			5,795		716			10,438
Amortization of value of insurance in force acquired	(363		)	66		—			(297		)
Other underwriting expenses	2,191			9,467		4,556			16,214
Total underwriting, acquisition and insurance expenses	5,755			18,089		6,154			29,998
Interest expense	—			—		2,008			2,008
Other expenses	—			—		4,884			4,884
Total benefits and expenses	30,989			76,434		20,550			127,973
	15,552			12,254		1,359			29,165
Net income attributable to noncontrolling interest	—			—		(27		)	(27		)
Equity loss, before tax	—			—		(409		)	(409		)
Pre-tax operating income	$	15,552		$	12,254	$	923		$	28,729

FBL Financial Group, Inc.

Consolidating Statements of Pre-tax Operating Income (Continued)



Quarter Ended December 31, 2010	Annuity			Life Insurance		Corporate & Other			Consolidated
	(Dollars in thousands)
Operating revenues:
Interest sensitive product charges	$	123		$	11,554	$	11,661		$	23,338
Traditional life insurance premiums	—			41,299		—			41,299
Net investment income	42,533			33,465		5,978			81,976
Other income	3			45		3,730			3,778
Total operating revenues	42,659			86,363		21,369			150,391

Benefits and expenses:
Interest sensitive product benefits	24,418			14,849		6,835			46,102
Traditional life insurance benefits	—			33,409		—			33,409
Policyholder dividends	—			4,318		—			4,318
Underwriting, acquisition and insurance expenses:
Commission expense, net of deferrals	—			2,850		648			3,498
Amortization of deferred acquisition costs	2,969			4,882		190			8,041
Amortization of value of insurance in force acquired	(1,027		)	1,059		—			32
Other underwriting expenses	2,130			8,488		4,152			14,770
Total underwriting, acquisition and insurance expenses	4,072			17,279		4,990			26,341
Interest expense	—			—		2,398			2,398
Other expenses	—			—		5,558			5,558
Total benefits and expenses	28,490			69,855		19,781			118,126
	14,169			16,508		1,588			32,265
Net income attributable to noncontrolling interest	—			—		(1		)	(1		)
Equity income, before tax	—			—		1,053			1,053
Pre-tax operating income	$	14,169		$	16,508	$	2,640		$	33,317



FBL Financial Group, Inc.
Statements of Pre-tax Operating Income
Annuity Segment

	Q4 2010				Q1 2011			Q2 2011			Q3 2011			Q4 2011
Pre-tax Operating Income				(Dollars in thousands)

Operating revenues:
Interest sensitive product charges	$	123			$	161		$	154		$	182		$	167
Net investment income	42,533				43,460			46,506			45,635			46,373
Other income	3				—			1			—			1
Total operating revenues	42,659				43,621			46,661			45,817			46,541

Benefits and expenses:
Interest sensitive product benefits	24,418				24,717			25,200			25,336			25,234
Underwriting, acquisition and insurance expenses:
Amortization of deferred acquisition costs	2,969				2,501			3,326			2,667			3,927
Amortization of value of insurance in force acquired	(1,027		)		(150		)	317			440			(363		)
Other underwriting expenses	2,130				2,149			2,246			2,174			2,191
Total underwriting, acquisition and insurance expenses	4,072				4,500			5,889			5,281			5,755
Total benefits and expenses	28,490				29,217			31,089			30,617			30,989
Pre-tax operating income	$	14,169			$	14,404		$	15,572		$	15,200		$	15,552

Selected balance sheet data, securities at cost:
Assets:
Investments	$	3,025,565			$	3,136,065		$	3,248,310		$	3,297,875		$	3,298,442
Deferred acquisition costs	98,891				102,501			104,605			106,530			107,551
Value of insurance in force acquired	12,143				12,269			11,952			11,496			11,852

Liabilities and equity:
Liabilities:
Interest sensitive product reserves	$	2,582,791			$	2,674,844		$	2,748,421		$	2,784,995		$	2,812,666
Other insurance reserves	370,114				371,179			374,781			376,592			378,319
Allocated equity, excluding AOCI	275,088				261,156			267,712			271,007			273,744

Other data:
Number of contracts	53,428				53,608			53,881			53,839			53,894

Portfolio yield net of assumed defaults	5.79		%		5.70		%	5.75		%	5.72		%	5.65		%
Credited rate	3.49				3.43			3.42			3.32			3.32
Spread on fixed annuities at end of quarter (1)	2.30		%		2.27		%	2.33		%	2.40		%	2.33		%

Interest sensitive and index product reserve activity:
Individual deferred annuity reserve:
Balance, beginning of period	$	1,931,756			$	1,974,661		$	2,043,957		$	2,102,447		$	2,143,378
Deposits	77,587				116,089			99,347			68,463			65,867
Withdrawals, surrenders and death benefits	(33,865		)		(41,443		)	(37,930		)	(28,773		)	(29,344		)
Net flows	43,722				74,646			61,417			39,690			36,523

Policyholder interest	16,682				16,895			17,104			17,367			17,403
Annuitizations and other	(17,499		)		(22,245		)	(20,031		)	(16,126		)	(14,495		)
Balance, end of period	1,974,661				2,043,957			2,102,447			2,143,378			2,182,809
Other interest sensitive reserves	608,130				630,887			645,974			641,617			629,857
Total interest sensitive product reserves	$	2,582,791			$	2,674,844		$	2,748,421		$	2,784,995		$	2,812,666

(1) Point-in-time spread at the balance sheet date used by management for decision making, which differs from the spread earned during the reporting period disclosed in the Form 10Q or 10K.



FBL Financial Group, Inc.
Statements of Pre-tax Operating Income
Life Insurance Segment

	Q4 2010			Q1 2011		Q2 2011			Q3 2011		Q4 2011
Pre-tax Operating Income			(Dollars in thousands)

Operating revenues:
Interest sensitive product charges	$	11,554		$	11,945	$	12,103		$	12,474	$	12,624
Traditional life insurance premiums	41,299			41,387		44,139			40,342		42,651
Net investment income	33,465			33,776		33,842			33,979		33,402
Other income	45			97		60			124		11
Total operating revenues	86,363			87,205		90,144			86,919		88,688

Benefits and expenses:
Interest sensitive product benefits:
Interest credited	7,497			7,613		7,682			7,211		7,213
Death benefits	7,352			7,487		8,024			9,320		7,814
Total interest sensitive product benefits	14,849			15,100		15,706			16,531		15,027
Traditional life insurance benefits:
Death benefits	13,599			17,713		16,023			16,531		19,212
Surrender and other benefits	8,144			10,216		9,123			8,543		7,978
Increase in traditional life future policy benefits	11,666			8,669		12,571			10,524		11,863
Total traditional life insurance benefits	33,409			36,598		37,717			35,598		39,053
Policyholder dividends	4,318			4,300		4,356			4,109		4,265
Underwriting, acquisition and insurance expenses:
Commission expense, net of deferrals	2,850			2,797		3,369			2,425		2,761
Amortization of deferred acquisition costs	4,882			7,934		5,415			7,015		5,795
Amortization of value of insurance in force acquired	1,059			510		(6,489		)	965		66
Other underwriting expenses	8,488			8,775		9,287			9,109		9,467
Total underwriting, acquisition and insurance expenses	17,279			20,016		11,582			19,514		18,089
Total benefits and expenses	69,855			76,014		69,361			75,752		76,434
Pre-tax operating income	$	16,508		$	11,191	$	20,783		$	11,167	$	12,254

Selected balance sheet data, securities at cost:
Assets:
Investments	$	2,140,593		$	2,175,151	$	2,208,177		$	2,212,936	$	2,224,280
Deferred acquisition costs	257,253			258,948		264,116			265,965		272,951
Value of insurance in force acquired	21,262			20,751		27,241			26,275		26,210

Liabilities and equity:
Liabilities:
Interest sensitive reserves	$	630,956		$	632,454	$	636,791		$	642,362	$	647,711
Other insurance reserves	1,489,858			1,502,695		1,516,521			1,533,024		1,549,886
Allocated equity, excluding AOCI	318,845			324,308		327,325			334,778		341,862



FBL Financial Group, Inc.
Statements of Pre-tax Operating Income
Life Insurance Segment (Continued)

	Q4 2010				Q1 2011			Q2 2011			Q3 2011			Q4 2011
				(Dollars in thousands, except face amounts in millions)
Other data:
Number of policies - traditional life	349,009				348,942			350,219			350,372			352,274
Number of policies - universal life	56,835				57,320			57,498			57,520			58,115
Face amounts - traditional life	$	36,201			$	36,475		$	37,091		$	37,586		$	38,235
Face amounts - universal life	$	5,204			$	5,305		$	5,387		$	5,393		$	5,482

Portfolio yield net of assumed defaults	6.19		%		6.13		%	6.08		%	6.06		%	5.97		%
Credited rate	4.28				4.29			4.29			4.30			4.26
Spread on universal life at end of quarter (1)	1.91		%		1.84		%	1.79		%	1.76		%	1.71		%

Interest sensitive reserve activity:
Balance, beginning of period	$	630,096			$	630,956		$	632,454		$	636,791		$	642,362
Deposits	14,108				14,840			16,677			15,745			16,492
Withdrawals and surrenders	(6,186		)		(6,115		)	(5,683		)	(5,651		)	(4,634		)
Net flows	7,922				8,725			10,994			10,094			11,858

Policyholder interest	6,500				6,476			6,482			6,450			6,469
Policy charges	(11,921		)		(12,261		)	(12,660		)	(12,840		)	(13,187		)
Benefits and other	(1,641		)		(1,442		)	(479		)	1,867			209
Balance, end of period	$	630,956			$	632,454		$	636,791		$	642,362		$	647,711

(1) Point-in-time spread at the balance sheet date used by management for decision making, which differs from the spread earned during the reporting period disclosed in the Form 10Q or 10K.



FBL Financial Group, Inc.
Statements of Pre-tax Operating Income (Loss)
Corporate and Other

	Q4 2010				Q1 2011			Q2 2011			Q3 2011			Q4 2011
Pre-tax Operating Income (Loss)				(Dollars in thousands, except face amounts in millions)

Operating revenues:
Interest sensitive product charges	$	11,661			$	12,006		$	11,796		$	12,136		$	11,345
Net investment income	5,978				6,470			6,337			6,373			6,710
Other income	3,730				4,902			3,919			4,732			3,854
Total operating revenues	21,369				23,378			22,052			23,241			21,909

Benefits and expenses:
Interest sensitive product benefits	6,835				6,868			7,355			7,502			7,504
Underwriting, acquisition and insurance expenses:
Commission expense, net of deferrals	648				1,126			1,035			823			882
Amortization of deferred acquisition costs	190				1,420			3,122			6,458			716
Other underwriting expenses	4,152				4,277			4,459			4,190			4,556
Total underwriting, acquisition and insurance expenses	4,990				6,823			8,616			11,471			6,154
Interest expense	2,398				2,388			2,153			1,983			2,008
Other expenses	5,558				4,881			6,001			4,886			4,884
Total benefits and expenses	19,781				20,960			24,125			25,842			20,550
	1,588				2,418			(2,073		)	(2,601		)	1,359
Net loss (income) attributable to noncontrolling interest	(1		)		2			18			1			(27		)
Equity income (loss), before tax	1,053				1,124			88			(409		)	(409		)
Pre-tax operating income (loss)	$	2,640			$	3,544		$	(1,967	)	$	(3,009	)	$	923

Selected balance sheet data, securities at cost:
Assets:
Investments	$	583,286			$	523,074		$	469,288		$	472,571		$	492,182
Deferred acquisition costs	152,647				152,551			149,902			144,906			144,590
Separate account assets	675,586				695,777			681,996			574,374			603,903

Liabilities and equity:
Liabilities:
Interest sensitive reserves	$	254,817			$	257,953		$	262,501		$	277,215		$	284,480
Other insurance reserves	93,901				93,489			96,617			94,716			93,826
Separate account liabilities	675,586				695,777			681,996			574,374			603,903
Allocated equity, excluding AOCI	501,594				547,434			576,482			593,149			509,838

Rollforward of separate account balances:
Beginning separate account balance	$	633,079			$	675,586		$	695,777		$	681,996		$	574,374
Net premiums	5,985				8,659			8,616			(3,178		)	2,881
Net investment income (loss)	55,335				32,281			2,014			(84,033		)	44,758
Charges, benefits and surrenders	(18,813		)		(20,749		)	(24,411		)	(20,411		)	(18,110		)
Ending separate account balance	$	675,586			$	695,777		$	681,996		$	574,374		$	603,903

Other data:
Number of contracts - variable annuity	18,603				18,199			17,805			17,442			17,142
Number of policies - variable universal life	55,484				54,667			53,897			53,119			49,198
Face amounts - variable universal life	$	6,982			$	6,876		$	6,763		$	6,662		$	6,062



FBL Financial Group, Inc.
Deferred Acquisition Costs by Segment

	Q4 2010				Q1 2011			Q2 2011			Q3 2011			Q4 2011
				(Dollars in thousands)
Annuity
Balance - beginning of period	$	98,823			$	98,891		$	102,501		$	104,605		$	106,530
Capitalization:
Commissions	4,408				5,628			4,729			3,628			3,763
Expenses	777				1,003			946			773			1,082
Total capitalization	5,185				6,631			5,675			4,401			4,845
Amortization - operating basis, before impact of unlocking	(2,969		)		(2,501		)	(3,326		)	(3,231		)	(3,922		)
Amortization - unlocking, operating basis	—				—			—			563			—
Amortization - realized gains/losses on investments and unrealized gains/losses on derivatives	(2,148		)		(520		)	(245		)	192			98
Balance - end of period	$	98,891			$	102,501		$	104,605		$	106,530		$	107,551

Life Insurance
Balance - beginning of period	$	250,511			$	257,253		$	258,948		$	264,116		$	265,965
Capitalization:
Commissions	7,010				5,515			5,710			4,968			6,839
Expenses	4,597				3,936			4,469			3,807			5,421
Deferral of sales inducements	648				682			247			105			587
Total capitalization	12,255				10,133			10,426			8,880			12,847
Amortization - operating basis, before impact of unlocking	(4,995		)		(8,071		)	(5,596		)	(4,614		)	(5,866		)
Amortization - unlocking, operating basis	—				—			—			(2,442		)	—
Amortization - realized gains/losses on investments and unrealized gains/losses on derivatives	(518		)		(367		)	338			25			5
Balance - end of period	$	257,253			$	258,948		$	264,116		$	265,965		$	272,951

Corporate and Other
Balance - beginning of period	$	151,579			$	152,647		$	152,551		$	149,902		$	144,906
Capitalization:
Commissions	935				961			700			561			322
Expenses	104				91			63			68			84
Deferral of sales inducements	14				36			4			2			15
Total capitalization	1,053				1,088			767			631			421
Amortization - operating basis, before impact of unlocking	(222		)		(1,441		)	(1,792		)	(7,605		)	(733		)
Amortization - unlocking, operating basis	—				—			(1,355		)	1,132			—
Amortization - realized gains/losses on investments and unrealized gains/losses on derivatives	237				257			(269		)	846			(4		)
Balance - end of period	$	152,647			$	152,551		$	149,902		$	144,906		$	144,590



FBL Financial Group, Inc.
Deferred Acquisition Costs by Segment (Continued)

	Q4 2010				Q1 2011			Q2 2011			Q3 2011			Q4 2011
				(Dollars in thousands)
Total
Balance - beginning of period	$	500,913			$	508,791		$	514,000		$	518,623		$	517,401
Capitalization:
Commissions	12,353				12,104			11,139			9,157			10,924
Expenses	5,478				5,030			5,478			4,648			6,587
Deferral of sales inducements	662				718			251			107			602
Total capitalization	18,493				17,852			16,868			13,912			18,113
Amortization - operating basis, before impact of unlocking	(8,186		)		(12,013		)	(10,714		)	(15,450		)	(10,521		)
Amortization - unlocking, operating basis	—				—			(1,355		)	(747		)	—
Amortization - realized gains/losses on investments and unrealized gains/losses on derivatives	(2,429		)		(630		)	(176		)	1,063			99
Balance - end of period	508,791				514,000			518,623			517,401			525,092
Impact of realized/unrealized gains/losses in AOCI	(45,770		)		(48,588		)	(77,218		)	(152,691		)	(148,295		)
Deferred acquisition costs	$	463,021			$	465,412		$	441,405		$	364,710		$	376,797

In October 2010, the FASB issued guidance related to accounting for costs associated with acquiring or renewing insurance contracts. This guidance defines allowable deferred acquisition costs as the incremental direct cost of contract acquisition and certain costs related directly to underwriting, policy issuance and processing. This guidance also allows for the deferral of advertising costs if directly linked to a sale. We will adopt the guidance retrospectively during the first quarter of 2012, and currently estimate that the impact upon adoption will be to reduce stockholders' equity by approximately $75.8 million at December 31, 2011, $101.7 million at December 31, 2010 and $117.1 million at December 31, 2009. Net income from continuing operations is expected to be reduced by $3.1 million ($0.10 per basic and diluted common share) for 2011, $3.3 million ($0.11 per basic and diluted common share) for 2010 and $4.1 million ($0.14 per basic common share and $0.13 per diluted common share) for 2009. Net income (loss) from discontinued operations is expected to increase for 2011 due to a decrease in the loss recognized on the sale of EquiTrust Life by $12.6 million ($0.41 per basic common share and $0.40 per diluted common share). Net income from discontinued operations will decrease $1.7 million ($0.05 per basic and diluted common share) for 2010 and $1.0 million ($0.03 per basic and diluted common share) for 2009.



FBL Financial Group, Inc.
Collected Premiums

	Q4 2010				Q1 2011			Q2 2011			Q3 2011			Q4 2011
				(Dollars in thousands)
Annuity
Individual:
First year	$	43,021			$	73,715		$	64,225		$	39,907		$	38,866
Renewal	34,929				42,915			36,515			29,742			27,362
Total individual	77,950				116,630			100,740			69,649			66,228
Group	1,850				2,844			4,045			5,586			3,434
Total Annuity	79,800				119,474			104,785			75,235			69,662

Life Insurance
Direct:
Universal life:
First year	2,391				2,711			4,015			4,526			3,636
Renewal	11,216				11,747			12,417			10,992			12,155
Total universal life	13,607				14,458			16,432			15,518			15,791
Participating whole life:
First year	3,275				2,839			3,300			2,461			2,863
Renewal	23,618				24,105			25,480			22,857			23,800
Total participating whole life	26,893				26,944			28,780			25,318			26,663
Term life and other:
First year	2,971				2,688			2,970			2,694			2,892
Renewal	16,362				16,559			17,093			17,176			17,795
Total term life and other	19,333				19,247			20,063			19,870			20,687
Total direct life insurance	59,833				60,649			65,275			60,706			63,141
Reinsurance	(5,016		)		(5,311		)	(5,095		)	(4,901		)	(4,996		)
Total Life Insurance	54,817				55,338			60,180			55,805			58,145

Corporate and Other
Variable, net of reinsurance	21,133				23,822			20,446			19,451			16,147
Accident and health, net of reinsurance	261				69			34			39			261
Total Corporate and Other	21,394				23,891			20,480			19,490			16,408

Collected premiums from continuing operations	156,011				198,703			185,445			150,530			144,215

Collected premiums from discontinued operations	151,910				186,528			190,628			142,429			149,292

Total collected premiums	$	307,921			$	385,231		$	376,073		$	292,959		$	293,507



FBL Financial Group, Inc.
Parent Company Liquidity

	Actual			Projected
	2011			2012 (5)
	(Dollars in thousands)
Total cash and invested assets, beginning of period	$	28,454		$	239,440
Sources:
Dividends from insurance subsidiaries	24,539			—
Dividends from non-insurance subsidiaries	4,600			—
Investment income	396			500
Management fees from subsidiaries and affiliates	8,030			4,600
Total sources	37,565			5,100

Uses:
Interest expense	(22,298		)	(7,900		)
Stockholders' dividends (2)	(8,917		)	(10,700		)
General expenses	(9,170		)	(9,200		)
Total uses	(40,385		)	(27,800		)

Net proceeds (cost) from EquiTrust Life sale (3)	463,800			(5,300		)
Transfer from (to) restricted debt defeasance trusts	(211,627		)	700
Partial redemption of affiliate debt	(50,000		)	—
Repurchase of common stock	(13,619		)	—
Other, net (4)	25,252			600
Total cash and invested assets, end of period (1)	$	239,440		$	212,740



(1)	Excludes debt defeasance trust assets used to pay-off Senior Notes with non-affiliates in 2012.

(2)	The projected dividends are based on quarterly rates of $0.0075 per Series B redeemable preferred share and $0.10 per common share. The common stock dividend rate must be approved quarterly by the Board of Directors.

(3)	Net proceeds for 2011 include cash proceeds of $471.0 million less transaction costs of $7.2 million. Net cost estimated for 2012 includes transaction costs of $5.3 million.

(4)	Other fluctuates from period to period primarily due to the issuance of shares of company stock including option exercises and the timing of settlements of amounts due to/from affiliates and external parties.

(5)	Based on best estimates at December 31, 2011; actual results may differ materially. Projected sources and uses for 2012 exclude the impact of any stock repurchases or long-term investment of the EquiTrust Life sale proceeds.



FBL Financial Group, Inc.
Other Information

	December 31,				March 31,			June 30,			September 30,			December 31,
	2010				2011			2011			2011			2011
				(Dollars in thousands, except per share data)

Capitalization:
Senior notes with affiliates, due 2015	$	100,000			$	100,000		$	99,927		$	99,932		$	49,968
Senior notes, due 2014 (1)	75,199				75,185			75,171			75,156			75,142
Senior notes, due 2017 (1)	98,969				99,006			99,041			99,079			99,116
Trust preferred securities, due 2047	97,000				97,000			97,000			97,000			97,000
Total debt	371,168				371,191			371,139			371,167			321,226

Preferred stock	3,000				3,000			3,000			3,000			3,000
Common stockholders' equity, excluding AOCI	1,103,427				1,132,898			1,171,519			1,198,934			1,125,444
Total capitalization, excluding AOCI	1,477,595				1,507,089			1,545,658			1,573,101			1,449,670

Accumulated other comprehensive income	39,895				54,194			105,403			200,539			149,622
Total capitalization, including AOCI	$	1,517,490			$	1,561,283		$	1,651,061		$	1,773,640		$	1,599,292

Common shares outstanding	30,942,058				31,134,662			31,206,396			31,237,734			30,650,634

Book Value per Share:
Excluding AOCI	$	35.66			$	36.39		$	37.54		$	38.38		$	36.72
Including AOCI	36.95				38.13			40.92			44.80			41.60

Debt-to-Capital Ratio:
Excluding AOCI	25.1		%		24.6		%	24.0		%	23.6		%	22.2		%
Including AOCI	24.5				23.8			22.5			20.9			20.1

Debt-to-Capital Ratio with 100% Credit for Trust Preferred Securities:
Excluding AOCI	18.6		%		18.2		%	17.7		%	17.4		%	15.5		%
Including AOCI	18.1				17.6			16.6			15.5			14.0

Class A Common Ownership:
Iowa Farm Bureau Federation	51.7		%		51.4		%	51.3		%	51.3		%	52.2		%
Other Farm Bureau entities	7.4				7.3			7.3			7.3			7.5
Public	40.9				41.3			41.4			41.4			40.3
	100.0		%		100.0		%	100.0		%	100.0		%	100.0		%

(1) In connection with the EquiTrust Life sale on December 30, 2011, we exercised the provisions of the trust indentures and deposited $211.6 million into two irrevocable debt defeasance trusts for the principal, accrued interest and estimated make-whole premium on the Senior Notes with non-affiliates. Funds of $210.9 million from the trusts were used to pay-off the Senior Notes with non-affiliates on January 30, 2012 and the remaining balance in the trusts of $0.7 million was returned to us.



FBL Financial Group, Inc.
Other Information (Continued)

	December 31,		March 31,		June 30,		September 30,		December 31,
	2010		2011		2011		2011		2011

Quality of Fixed Maturity Securities: (3)
AAA, AA, A	62.8	%	62.4	%	63.3	%	64.6	%	64.2	%
BBB	31.0		30.9		30.4		29.6		30.8
BB	3.9		4.1		3.9		3.7		2.7
<BB	2.3		2.6		2.4		2.1		2.3

Investment by Type: (3)
Fixed maturity securities	58.5	%	59.9	%	60.6	%	61.1	%	63.1	%
Residential mortgage-backed	15.1		14.9		15.4		14.9		10.6
Commercial mortgage-backed	8.0		8.0		8.1		8.4		7.7
Other asset-backed	3.7		3.8		4.1		4.1		5.7
Mortgage loans	9.5		9.3		9.1		8.9		8.6
Equity securities	0.6		0.6		0.6		0.6		0.9
Other	4.6		3.5		2.1		2.0		3.4

Agent Strength Totals:
8-state Farm Bureau Property & Casualty channel	1,205		1,187		1,190		1,258		1,225
7 life-only states	791		793		707		713		712
Total	1,996		1,980		1,897		1,971		1,937

(3) Prior periods have not been restated for impact of the sale of the EquiTrust Life Business.

Attached files

Stock widget

Investing forum

FBL FINANCIAL GROUP INC Reports