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

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8-K - FBL FINANCIAL GROUP INC	pressrelease8k2012q2.htm
EX-99.1 - EARNINGS RELEASE - FBL FINANCIAL GROUP INC	exh991newsreleaseq22012.htm

Financial Supplement

2012 Second 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 Executive Officer and 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	Computershare/BNY Mellon
	c/o Computershare/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)
June 30, 2012
Table of Contents/Notes

Consolidated Financial Statements:
Consolidated Balance Sheets		2
Consolidated Statements of Comprehensive Income		4
Consolidated Statements of Operating Income, last five quarters		5
Financial Information by Segment:
Segment Information		6
Consolidating Statements of Pre-tax Operating Income		7
Statements of Pre-tax 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: Effective January 1, 2012, we retrospectively adopted new accounting guidance related to accounting for costs associated with acquiring or renewing insurance contracts. All periods herein reflect the impact of this adoption.

NOTE 2: On December 30, 2011, we sold our wholly owned subsidiary, EquiTrust Life Insurance Company (EquiTrust Life). 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.

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, we began repurchasing stock in the fourth quarter of 2011 under a stock repurchase plan approved by the Board of Directors.

Additional information regarding the impact of adopting the new accounting guidance, the sale of EquiTrust Life and our capital management initiatives can be found in our filings with the SEC.

NOTE 3: In addition to net income (loss), we have consistently used operating income (loss), a non-GAAP financial measure common in the life insurance industry, as a primary economic measure to evaluate our 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 nonrecurring 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 4: Certain financial information presented herein may not add due to rounding.

FBL Financial Group, Inc.

Consolidated Balance Sheets (Unaudited)

(Dollars in thousands)



	June 30, 2012		December 31, 2011
Assets
Investments:
Fixed maturities - available for sale, at fair value (amortized cost: 2012 - $5,506,440; 2011 - $5,189,994)	$	6,015,884	$	5,570,550
Equity securities - available for sale, at fair value (cost: 2012 - $67,437; 2011 - $55,697)	69,541		57,432
Mortgage loans	545,951		552,359
Real estate	4,672		2,541
Policy loans	175,200		172,368
Short-term investments	28,697		41,756
Other investments	337		189
Total investments	6,840,282		6,397,195

Cash and cash equivalents	168,688		296,339
Restricted debt defeasance trust assets	—		211,627
Securities and indebtedness of related parties	81,299		64,516
Accrued investment income	68,959		67,200
Amounts receivable from affiliates	2,806		3,942
Reinsurance recoverable	95,987		94,685
Deferred acquisition costs	226,180		260,256
Value of insurance in force acquired	21,828		25,781
Current income taxes recoverable	5,481		16,334
Other assets	62,954		67,590
Assets held in separate accounts	617,538		603,903








Total assets	$	8,192,002	$	8,109,368

FBL Financial Group, Inc.

Consolidated Balance Sheets (Continued)

(Dollars in thousands)



	June 30, 2012			December 31, 2011
Liabilities and stockholders' equity
Liabilities:
Future policy benefits:
Interest sensitive products	$	3,986,542		$	3,744,857
Traditional life insurance and accident and health products	1,432,989			1,401,995
Other policy claims and benefits	35,521			40,488
Supplementary contracts without life contingencies	361,733			359,663
Advance premiums and other deposits	221,856			211,573
Amounts payable to affiliates	163			713
Short-term debt payable to non-affiliates	—			174,258
Long-term debt payable to affiliates	49,973			49,968
Long-term debt payable to non-affiliates	97,000			97,000
Deferred income taxes	132,637			100,341
Other liabilities	97,261			122,180
Liabilities related to separate accounts	617,538			603,903
Total liabilities	7,033,213			6,906,939

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 25,559,881 shares in 2012 and 29,457,644 shares in 2011	118,060			129,684
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	233,110			177,845
Retained earnings	797,100			884,263
Total FBL Financial Group, Inc. stockholders' equity	1,158,792			1,202,314
Noncontrolling interest	(3		)	115
Total stockholders' equity	1,158,789			1,202,429
Total liabilities and stockholders' equity	$	8,192,002		$	8,109,368

FBL Financial Group, Inc.

Consolidated Statements of Comprehensive Income (Unaudited)

(Dollars in thousands, except per share data)



	Three months ended June 30,						Six months ended June 30,
	2012			2011			2012			2011
Revenues:
Interest sensitive product charges	$	24,190		$	24,046		$	49,422		$	48,175
Traditional life insurance premiums	45,908			44,139			89,031			85,526
Net investment income	89,423			88,066			176,311			171,851
Net realized capital gains on sales of investments	4,411			2,071			5,290			4,331

Total other-than-temporary impairment losses	(3,679		)	(7,192		)	(14,980		)	(12,919		)
Non-credit portion in other comprehensive income	—			5,111			9,779			8,686
Net impairment losses recognized in earnings	(3,679		)	(2,081		)	(5,201		)	(4,233		)
Other income	5,729			3,980			10,734			8,979
Total revenues	165,982			160,221			325,587			314,629

Benefits and expenses:
Interest sensitive product benefits	49,328			48,220			98,410			94,841
Traditional life insurance benefits	40,341			37,717			79,452			74,315
Policyholder dividends	3,370			4,356			7,614			8,656
Underwriting, acquisition and insurance expenses	34,374			27,252			67,101			60,503
Interest expense	1,983			2,153			3,965			4,541
Loss on debt redemption	—			—			33			—
Other expenses	6,683			6,001			12,473			10,882
Total benefits and expenses	136,079			125,699			269,048			253,738
	29,903			34,522			56,539			60,891
Income taxes	(10,256		)	(10,355		)	(19,014		)	(18,673		)
Equity income, net of related income taxes	630			57			2,251			788
Net income from continuing operations	20,277			24,224			39,776			43,006
Discontinued operations:
Loss on sale of subsidiary	—			—			(2,252		)	—
Income (loss) from discontinued operations, net of tax	(84		)	11,997			(764		)	18,264
Total income (loss) from discontinued operations							(3,016		)	18,264
Net income	20,193			36,221			36,760			61,270
Net loss attributable to noncontrolling interest	98			18			118			20
Net income attributable to FBL Financial Group, Inc.	$	20,291		$	36,239		$	36,878		$	61,290

Comprehensive income	$	72,464		$	87,872		$	92,025		$	129,667

Earnings per common share:
Income from continuing operations	$	0.74		$	0.79		$	1.37		$	1.40
Income (loss) from discontinued operations	—			0.39			(0.10		)	0.60
Earnings per common share	$	0.74		$	1.18		$	1.27		$	2.00
Earnings per common share - assuming dilution:
Income from continuing operations	$	0.73		$	0.78		$	1.35		$	1.38
Income (loss) from discontinued operations	—			0.38			(0.10		)	0.58
Earnings per common share - assuming dilution	$	0.73		$	1.16		$	1.25		$	1.96

Cash dividends per common share	$	0.1000		$	0.0625		$	0.2000		$	0.1250



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

	Q2 2011			Q3 2011			Q4 2011			Q1 2012			Q2 2012
Operating revenues:
Interest sensitive product charges	$	24,053		$	24,792		$	24,136		$	25,139		$	24,292
Traditional life insurance premiums	44,139			40,342			42,651			43,123			45,908
Net investment income	86,685			85,987			86,485			86,412			89,389
Other income	3,980			4,856			3,866			5,005			5,729
Total operating revenues	158,857			155,977			157,138			159,679			165,318

Benefits and expenses:
Interest sensitive product benefits	48,261			49,369			47,765			49,079			49,271
Traditional life insurance benefits	37,717			35,598			39,053			39,319			40,140
Policyholder dividends	4,356			4,109			4,265			4,244			3,370
Underwriting, acquisition and insurance expenses:
Commission expense, net of deferrals	6,596			5,150			5,844			5,699			6,129
Amortization of deferred acquisition costs	7,980			11,452			7,115			7,486			7,923
Amortization of value of insurance in force acquired	(6,172		)	1,405			(297		)	687			1,521
Other underwriting expenses	18,727			17,885			19,638			18,147			19,099
Total underwriting, acquisition and insurance expenses	27,131			35,892			32,300			32,019			34,672
Interest expense	2,153			1,983			2,008			1,982			1,983
Other expenses	6,001			4,886			4,884			5,790			6,683
Total benefits and expenses	125,619			131,837			130,275			132,433			136,119
	33,238			24,140			26,863			27,246			29,199
Income taxes	(9,907		)	(8,122		)	(6,766		)	(8,971		)	(10,010		)
Net loss (income) attributable to noncontrolling interest	18			1			(27		)	20			98
Equity income, net of related income taxes	57			231			265			1,621			630
Operating income	23,406			16,250			20,335			19,916			19,917

Realized gains/losses on investments, net of offsets	111			(820		)	(5,031		)	(249		)	222
Change in net unrealized gains/losses on derivatives, net of offsets	725			285			(281		)	(126		)	236
Net impact of discontinued operations	11,997			11,354			(41,079		)	(2,932		)	(84		)
Loss on debt redemption	—			—			(21,564		)	(22		)	—
Net income (loss) attributable to FBL Financial Group, Inc.	$	36,239		$	27,069		$	(47,620	)	$	16,587		$	20,291

Operating income per common share - assuming dilution	$	0.75		$	0.52		$	0.65		$	0.64		$	0.72
Earnings (loss) per common share - assuming dilution	$	1.16		$	0.86		$	(1.55	)	$	0.53		$	0.73

Weighted average common shares outstanding (in thousands):
Basic	30,733			30,803			30,746			30,527			27,437
Effect of dilutive securities	474			463			509			479			267
Diluted	31,207			31,266			31,255			31,006			27,704

Operating return on equity, excluding AOCI - last twelve months (1)	11.5		%	10.7		%	7.6		%	7.8		%	7.6		%
Operating return on equity, including AOCI - last twelve months (1)	10.8		%	9.8		%	6.8		%	6.8		%	6.4		%


(1)	Return on equity has not been restated to reflect the impact of discontinued operations or the retrospective adoption of new accounting guidance for periods prior to Q4 2011.

FBL Financial Group, Inc.

Segment Information

We analyze operations by reviewing financial information regarding our primary products that are aggregated into the Annuity and 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 June 30, 2012	Annuity		Life Insurance			Corporate & Other			Consolidated
	(Dollars in thousands)
Operating revenues:
Interest sensitive product charges	$	191	$	13,292		$	10,809		$	24,292
Traditional life insurance premiums	—		45,908			—			45,908
Net investment income	47,615		34,841			6,933			89,389
Other income	6		(44		)	5,767			5,729
Total operating revenues	47,812		93,997			23,509			165,318

Benefits and expenses:
Interest sensitive product benefits	26,127		17,269			5,875			49,271
Traditional life insurance benefits	—		40,140			—			40,140
Policyholder dividends	—		3,370			—			3,370
Underwriting, acquisition and insurance expenses:
Commission expense, net of deferrals	721		4,413			995			6,129
Amortization of deferred policy acquisition costs	35		5,997			1,891			7,923
Amortization of value of insurance in force acquired	134		1,387			—			1,521
Other underwriting expenses	4,994		12,311			1,794			19,099
Total underwriting, acquisition and insurance expenses	5,884		24,108			4,680			34,672
Interest expense	—		—			1,983			1,983
Other expenses	—		—			6,683			6,683
Total benefits and expenses	32,011		84,887			19,221			136,119
	15,801		9,110			4,288			29,199
Net loss attributable to noncontrolling interest	—		—			98			98
Equity income (loss), before tax	—		—			(1,143		)	(1,143		)
Pre-tax operating income	$	15,801	$	9,110		$	3,243		$	28,154

FBL Financial Group, Inc.

Consolidating Statements of Pre-tax Operating Income (Continued)



Quarter Ended June 30, 2011	Annuity		Life Insurance			Corporate & Other			Consolidated
	(Dollars in thousands)
Operating revenues:
Interest sensitive product charges	$	154	$	12,103		$	11,796		$	24,053
Traditional life insurance premiums	—		44,139			—			44,139
Net investment income	46,506		33,842			6,337			86,685
Other income	1		60			3,919			3,980
Total operating revenues	46,661		90,144			22,052			158,857

Benefits and expenses:
Interest sensitive product benefits	25,200		15,706			7,355			48,261
Traditional life insurance benefits	—		37,717			—			37,717
Policyholder dividends	—		4,356			—			4,356
Underwriting, acquisition and insurance expenses:
Commission expense, net of deferrals	892		4,540			1,164			6,596
Amortization of deferred acquisition costs	2,365		3,609			2,007			7,981
Amortization of value of insurance in force acquired	317		(6,489		)	—			(6,172		)
Other underwriting expenses	2,863		11,383			4,481			18,727
Total underwriting, acquisition and insurance expenses	6,437		13,043			7,652			27,132
Interest expense	—		—			2,153			2,153
Other expenses	—		—			6,001			6,001
Total benefits and expenses	31,637		70,822			23,161			125,620
	15,024		19,322			(1,109		)	33,237
Net loss attributable to noncontrolling interest	—		—			18			18
Equity income, before tax	—		—			88			88
Pre-tax operating income	$	15,024	$	19,322		$	(1,003	)	$	33,343



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

	Q2 2011				Q3 2011			Q4 2011			Q1 2012			Q2 2012
Pre-tax Operating Income				(Dollars in thousands)

Operating revenues:
Interest sensitive product charges	$	154			$	182		$	167		$	206		$	191
Net investment income	46,506				45,635			46,373			45,978			47,615
Other income	1				—			1			3			6
Total operating revenues	46,661				45,817			46,541			46,187			47,812

Benefits and expenses:
Interest sensitive product benefits	25,200				25,336			25,234			25,535			26,127
Underwriting, acquisition and insurance expenses:
Commission expense, net of deferrals	892				740			724			718			721
Amortization of deferred acquisition costs	2,365				2,004			2,743			2,293			35
Amortization of value of insurance in force acquired	317				440			(363		)	33			134
Other underwriting expenses	2,863				2,768			2,869			4,873			4,994
Total underwriting, acquisition and insurance expenses	6,437				5,952			5,973			7,917			5,884
Total benefits and expenses	31,637				31,288			31,207			33,452			32,011
Pre-tax operating income	$	15,024			$	14,529		$	15,334		$	12,735		$	15,801

Selected balance sheet data, securities at cost:
Assets:
Investments	$	3,248,310			$	3,297,875		$	3,298,442		$	3,405,435		$	3,514,096
Deferred acquisition costs	76,154				77,416			78,102			80,766			84,712
Value of insurance in force acquired	11,952				11,496			11,852			11,819			11,678

Liabilities and equity:
Liabilities:
Interest sensitive product reserves	$	2,748,421			$	2,784,995		$	2,812,666		$	2,906,991		$	3,029,007
Other insurance reserves	374,781				376,592			378,319			379,977			383,547
Allocated equity, excluding AOCI	249,218				252,082			254,602			256,383			266,180

Other data:
Number of direct contracts	53,881				53,839			53,894			54,091			54,142

Portfolio yield net of assumed defaults	5.75		%		5.72		%	5.65		%	5.55		%	5.40		%
Credited rate	3.42				3.32			3.32			3.32			3.14
Spread on fixed annuities at end of quarter (1)	2.33		%		2.40		%	2.33		%	2.23		%	2.26		%

Interest sensitive reserve activity:
Individual deferred annuity reserve:
Balance, beginning of period	$	2,043,957			$	2,102,447		$	2,143,378		$	2,182,809		$	2,252,575
Deposits	99,347				68,463			65,867			107,172			85,259
Withdrawals, surrenders and death benefits	(37,930		)		(28,773		)	(29,344		)	(33,066		)	(36,745		)
Net flows	61,417				39,690			36,523			74,106			48,514

Policyholder interest	17,104				17,367			17,403			17,729			17,971
Annuitizations and other	(20,031		)		(16,126		)	(14,495		)	(22,069		)	(16,496		)
Balance, end of period	2,102,447				2,143,378			2,182,809			2,252,575			2,302,564
Other interest sensitive reserves	645,974				641,617			629,857			654,416			726,443
Total interest sensitive product reserves	$	2,748,421			$	2,784,995		$	2,812,666		$	2,906,991		$	3,029,007


(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

	Q2 2011				Q3 2011		Q4 2011		Q1 2012			Q2 2012
Pre-tax Operating Income				(Dollars in thousands)

Operating revenues:
Interest sensitive product charges	$	12,103			$	12,474	$	12,624	$	13,189		$	13,292
Traditional life insurance premiums	44,139				40,342		42,651		43,123			45,908
Net investment income	33,842				33,979		33,402		33,846			34,841
Other income	60				124		11		(53		)	(44		)
Total operating revenues	90,144				86,919		88,688		90,105			93,997

Benefits and expenses:
Interest sensitive product benefits:
Interest credited	7,682				7,211		7,213		7,141			7,209
Death benefits	8,024				9,320		7,814		8,244			10,060
Total interest sensitive product benefits	15,706				16,531		15,027		15,385			17,269
Traditional life insurance benefits:
Death benefits	16,023				16,531		19,212		18,406			15,033
Surrender and other benefits	9,123				8,543		7,978		8,657			8,160
Increase in traditional life future policy benefits	12,571				10,524		11,863		12,256			16,947
Total traditional life insurance benefits	37,717				35,598		39,053		39,319			40,140
Policyholder dividends	4,356				4,109		4,265		4,244			3,370
Underwriting, acquisition and insurance expenses:
Commission expense, net of deferrals	4,540				3,442		4,155		4,019			4,413
Amortization of deferred acquisition costs	3,609				4,877		4,023		5,246			5,997
Amortization of value of insurance in force acquired	(6,489		)		965		66		654			1,387
Other underwriting expenses	11,383				10,863		12,026		11,875			12,311
Total underwriting, acquisition and insurance expenses	13,043				20,147		20,270		21,794			24,108
Total benefits and expenses	70,822				76,385		78,615		80,742			84,887
Pre-tax operating income	$	19,322			$	10,534	$	10,073	$	9,363		$	9,110

Selected balance sheet data, securities at cost:
Assets:
Investments	$	2,208,177			$	2,212,936	$	2,224,280	$	2,215,738		$	2,258,183
Deferred acquisition costs	181,208				182,384		187,113		190,953			193,091
Value of insurance in force acquired	27,241				26,275		26,210		25,597			24,167

Liabilities and equity:
Liabilities:
Interest sensitive reserves	$	636,791			$	642,362	$	647,711	$	652,427		$	658,735
Other insurance reserves	1,516,521				1,533,024		1,549,886		1,566,750			1,584,627
Allocated equity, excluding AOCI	273,434				280,450		286,067		277,192			281,372



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

	Q2 2011				Q3 2011			Q4 2011			Q1 2012			Q2 2012
				(Dollars in thousands)
Other data:
Number of direct policies - traditional life	350,219				350,372			352,274			352,336			353,596
Number of direct policies - universal life	57,498				57,520			58,115			58,618			58,883
Direct face amounts - traditional life	$	37,090,827			$	37,586,036		$	38,235,322		$	38,552,018		$	39,252,561
Direct face amounts - universal life	$	5,387,097			$	5,392,760		$	5,481,755		$	5,538,683		$	5,619,904

Portfolio yield net of assumed defaults	6.08		%		6.06		%	5.97		%	5.93		%	5.89		%
Credited rate	4.29				4.30			4.26			4.16			4.17
Spread on universal life at end of quarter (1)	1.79		%		1.76		%	1.71		%	1.77		%	1.72		%

Interest sensitive reserve activity:
Balance, beginning of period	$	632,454			$	636,791		$	642,362		$	647,711		$	652,427
Deposits	16,677				15,745			16,492			17,363			18,976
Withdrawals and surrenders	(5,683		)		(5,651		)	(4,634		)	(6,531		)	(6,175		)
Net flows	10,994				10,094			11,858			10,832			12,801

Policyholder interest	6,482				6,450			6,469			6,370			6,552
Policy charges	(12,660		)		(12,840		)	(13,187		)	(12,898		)	(14,325		)
Benefits and other	(479		)		1,867			209			412			1,280
Balance, end of period	$	636,791			$	642,362		$	647,711		$	652,427		$	658,735


(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

	Q2 2011				Q3 2011			Q4 2011			Q1 2012			Q2 2012
Pre-tax Operating Income (Loss)				(Dollars in thousands)

Operating revenues:
Interest sensitive product charges	$	11,796			$	12,136		$	11,345		$	11,744		$	10,809
Net investment income	6,337				6,373			6,710			6,588			6,933
Other income	3,919				4,732			3,854			5,055			5,767
Total operating revenues	22,052				23,241			21,909			23,387			23,509

Benefits and expenses:
Interest sensitive product benefits	7,355				7,502			7,504			8,159			5,875
Underwriting, acquisition and insurance expenses:
Commission expense, net of deferrals	1,164				968			965			962			995
Amortization of deferred acquisition costs	2,007				4,572			349			(53		)	1,891
Other underwriting expenses	4,481				4,254			4,743			1,399			1,794
Total underwriting, acquisition and insurance expenses	7,652				9,794			6,057			2,308			4,680
Interest expense	2,153				1,983			2,008			1,982			1,983
Other expenses	6,001				4,886			4,884			5,790			6,683
Total benefits and expenses	23,161				24,165			20,453			18,239			19,221
	(1,109		)		(924		)	1,456			5,148			4,288
Net loss (income) attributable to noncontrolling interest	18				1			(27		)	20			98
Equity income (loss), before tax	88				(409		)	(409		)	111			(1,143		)
Pre-tax operating income (loss)	$	(1,003	)		$	(1,332	)	$	1,020		$	5,279		$	3,243

Selected balance sheet data, securities at cost:
Assets:
Investments	$	469,288			$	472,571		$	492,182		$	514,044		$	556,455
Deferred acquisition costs	103,849				100,150			99,916			99,542			98,446
Separate account assets	681,996				574,374			603,903			655,755			617,538

Liabilities and equity:
Liabilities:
Interest sensitive reserves	$	262,501			$	277,215		$	284,480		$	290,802		$	298,800
Other insurance reserves	96,617				94,716			93,826			99,256			95,102
Separate account liabilities	681,996				574,374			603,903			655,755			617,538
Allocated equity, excluding AOCI	532,684				549,722			480,800			395,259			375,130

Rollforward of separate account balances:
Beginning separate account balance	$	695,777			$	681,996		$	574,374		$	603,903		$	655,755
Net premiums	8,616				(3,178		)	2,881			5,061			7,102
Net investment income (loss)	2,014				(84,033		)	44,758			65,617			(25,590		)
Charges, benefits and surrenders	(24,411		)		(20,411		)	(18,110		)	(18,826		)	(19,729		)
Ending separate account balance	$	681,996			$	574,374		$	603,903		$	655,755		$	617,538

Other data:
Number of direct contracts - variable annuity	17,805				17,442			14,915			14,627			14,355
Number of direct policies - variable universal life	53,897				53,119			49,198			48,794			48,086
Direct face amounts - variable universal life	$	6,762,676			$	6,661,581		$	6,061,761		$	6,065,488		$	5,970,850



FBL Financial Group, Inc.
Deferred Acquisition Costs by Segment

	Q2 2011				Q3 2011			Q4 2011			Q1 2012			Q2 2012
				(Dollars in thousands)
Annuity
Balance - beginning of period	$	74,565			$	76,154		$	77,416		$	78,102		$	80,766
Capitalization:
Commissions	3,839				2,889			3,039			4,537			3,708
Expenses	327				266			373			426			358
Total capitalization	4,166				3,155			3,412			4,963			4,066
Amortization - operating basis, before impact of unlocking	(2,365		)		(2,410		)	(2,743		)	(2,293		)	(2,122		)
Amortization - unlocking, operating basis	—				406			—			—			2,087
Amortization - realized gains/losses on investments and unrealized gains/losses on derivatives	(212		)		111			17			(6		)	(85		)
Balance - end of period	$	76,154			$	77,416		$	78,102		$	80,766		$	84,712

Life Insurance
Balance - beginning of period	$	177,597			$	181,208		$	182,384		$	187,113		$	190,953
Capitalization:
Commissions	4,538				3,950			5,445			5,924			5,189
Expenses	2,373				2,015			2,791			2,507			2,666
Deferral of sales inducements	247				105			587			578			469
Total capitalization	7,158				6,070			8,823			9,009			8,324
Amortization - operating basis, before impact of unlocking	(3,790		)		(3,155		)	(4,094		)	(5,340		)	(3,571		)
Amortization - unlocking, operating basis	—				(1,763		)	—			—			(2,458		)
Amortization - realized gains/losses on investments and unrealized gains/losses on derivatives	243				24			—			171			(157		)
Balance - end of period	$	181,208			$	182,384		$	187,113		$	190,953		$	193,091

Corporate and Other
Balance - beginning of period	$	105,364			$	103,849		$	100,150		$	99,916		$	99,542
Capitalization:
Commissions	612				373			240			315			355
Deferral of sales inducements	4				2			15			12			5
Total capitalization	616				375			255			327			360
Amortization - operating basis, before impact of unlocking	(1,182		)		(5,406		)	(366		)	8			(3,590		)
Amortization - unlocking, operating basis	(850		)		819			—			—			1,741
Amortization - realized gains/losses on investments and unrealized gains/losses on derivatives	(99		)		513			(123		)	(709		)	393
Balance - end of period	$	103,849			$	100,150		$	99,916		$	99,542		$	98,446



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

	Q2 2011				Q3 2011			Q4 2011			Q1 2012			Q2 2012
				(Dollars in thousands)
Total
Balance - beginning of period	$	357,526			$	361,211		$	359,950		$	365,131		$	371,261
Capitalization:
Commissions	8,989				7,212			8,724			10,776			9,252
Expenses	2,700				2,281			3,164			2,933			3,024
Deferral of sales inducements	251				107			602			590			474
Total capitalization	11,940				9,600			12,490			14,299			12,750
Amortization - operating basis, before impact of unlocking	(7,337		)		(10,971		)	(7,203		)	(7,625		)	(9,283		)
Amortization - unlocking, operating basis	(850		)		(538		)	—			—			1,370
Amortization - realized gains/losses on investments and unrealized gains/losses on derivatives	(68		)		648			(106		)	(544		)	151
Balance - end of period	361,211				359,950			365,131			371,261			376,249
Impact of realized/unrealized gains/losses in AOCI	(54,698		)		(107,099		)	(104,875		)	(122,510		)	(150,069		)
Deferred acquisition costs	$	306,513			$	252,851		$	260,256		$	248,751		$	226,180



FBL Financial Group, Inc.
Collected Premiums

	Q2 2011				Q3 2011			Q4 2011			Q1 2012			Q2 2012
				(Dollars in thousands)
Annuity
Individual:
First year	$	64,225			$	39,907		$	38,866		$	57,802		$	44,832
Renewal	36,515				29,742			27,362			49,716			41,193
Total individual	100,740				69,649			66,228			107,518			86,025
Group	4,045				5,586			3,434			2,298			1,277
Total Annuity	104,785				75,235			69,662			109,816			87,302

Life Insurance
Direct:
Universal life:
First year	4,015				4,526			3,636			4,014			4,391
Renewal	12,417				10,992			12,155			13,109			12,862
Total universal life	16,432				15,518			15,791			17,123			17,253
Participating whole life:
First year	3,300				2,461			2,863			3,061			2,878
Renewal	25,480				22,857			23,800			24,520			25,393
Total participating whole life	28,780				25,318			26,663			27,581			28,271
Term life and other:
First year	2,970				2,694			2,892			2,976			2,881
Renewal	17,093				17,176			17,795			18,075			18,429
Total term life and other	20,063				19,870			20,687			21,051			21,310
Total direct life insurance	65,275				60,706			63,141			65,755			66,834
Reinsurance	(5,095		)		(4,901		)	(4,996		)	(5,406		)	(4,627		)
Total Life Insurance	60,180				55,805			58,145			60,349			62,207

Corporate and Other
Variable, net of reinsurance	20,446				19,451			16,147			19,974			22,134
Accident and health, net of reinsurance	34				39			261			58			39
Total Corporate and Other	20,480				19,490			16,408			20,032			22,173

Collected premiums from continuing operations	185,445				150,530			144,215			190,197			171,682

Collected premiums from discontinued operations	190,628				142,429			149,292			—			—

Total collected premiums	$	376,073			$	292,959		$	293,507		$	190,197		$	171,682



FBL Financial Group, Inc.
Parent Company Liquidity

	January - June 2012			July - December 2012
	Actual			Projected (5)			Total
	(Dollars in thousands)
Total cash and invested assets, beginning of period	$	239,440		$	83,235		$	239,440
Sources:
Investment income	189			400			589
Management fees from subsidiaries and affiliates	2,490			2,400			4,890
Total sources	2,679			2,800			5,479

Uses:
Repurchase of common stock (1)	(134,373		)	—			(134,373		)
Net cost from EquiTrust Life sale (2)	(9,315		)	—			(9,315		)
Interest expense	(7,433		)	(4,000		)	(11,433		)
Stockholders' dividends (3)	(5,826		)	(5,400		)	(11,226		)
Contributions to subsidiaries	(2,000		)	—			(2,000		)
General expenses	(7,159		)	(4,200		)	(11,359		)
Total uses	(166,106		)	(13,600		)	(179,706		)

Other, net (4)	7,222			5,200			12,422
Total cash and invested assets, end of period	$	83,235		$	77,635		$	77,635



(1)	Class A common shares repurchased totaled 905,542 in the second quarter of 2012 and 3,197,054 in the first quarter of 2012. As of June 30, 2012, $49.9 million remains from the $200.0 million stock repurchase authorization granted by the FBL Board of Directors in the fourth quarter of 2011.

(2)	Net cost represents settlement of the final purchase price from the estimated cash transferred at December 30, 2011 due to post-closing adjustments based on a final statutory net worth reconciliation.

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

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

(5)	Based on best estimates at June 30, 2012; actual results may differ materially. Projected sources and uses for the remainder of 2012 exclude the impact of additional stock repurchases or long-term investment of the EquiTrust Life sale proceeds.



FBL Financial Group, Inc.
Other Information

	June 30,				September 30,			December 31,			March 31,			June 30,
	2011				2011			2011			2012			2012
				(Dollars in thousands, except per share data)

Capitalization:
Senior notes with affiliates, due 2015	$	99,927			$	99,932		$	49,968		$	49,971		$	49,973
Senior notes, due 2014	75,171				75,156			75,142			—			—
Senior notes, due 2017	99,041				99,079			99,116			—			—
Trust preferred securities, due 2047	97,000				97,000			97,000			97,000			97,000
Total debt	371,139				371,167			321,226			146,971			146,973

Preferred stock	3,000				3,000			3,000			3,000			3,000
Common stockholders' equity, excluding AOCI	1,055,336				1,082,254			1,021,469			928,834			922,682
Total capitalization, excluding AOCI	1,429,475				1,456,421			1,345,695			1,078,805			1,072,655

Accumulated other comprehensive income	120,041				230,174			177,845			180,839			233,110
Total capitalization, including AOCI	$	1,549,516			$	1,686,595		$	1,523,540		$	1,259,644		$	1,305,765

Common shares outstanding	31,206,396				31,237,734			30,650,634			27,695,759			26,752,871

Book Value per Share:
Excluding AOCI	$	33.82			$	34.65		$	33.33		$	33.54		$	34.49
Including AOCI	37.66				42.01			39.13			40.07			43.20

Debt-to-Capital Ratio:
Excluding AOCI	26.0		%		25.5		%	23.9		%	13.6		%	13.7		%
Including AOCI	24.0				22.0			21.1			11.7			11.3

Debt-to-Capital Ratio with 100% Credit for Trust Preferred Securities:
Excluding AOCI	19.2		%		18.8		%	16.7		%	4.6		%	4.7		%
Including AOCI	17.7				16.3			14.7			4.0			3.8

Class A Common Ownership:
Iowa Farm Bureau Federation	51.3		%		51.3		%	52.2		%	55.7		%	57.7		%
Other Farm Bureau entities	7.3				7.3			7.5			5.8			5.3
Public	41.4				41.4			40.3			38.5			37.0
	100.0		%		100.0		%	100.0		%	100.0		%	100.0		%



FBL Financial Group, Inc.
Other Information (Continued)

	June 30,		September 30,		December 31,		March 31,		June 30,
	2011		2011		2011		2012		2012

Quality of Fixed Maturity Securities: (1)
AAA, AA, A	63.3	%	64.6	%	64.2	%	64.0	%	64.2	%
BBB	30.4		29.6		30.8		31.2		31.1
BB	3.9		3.7		2.7		2.5		2.7
<BB	2.4		2.1		2.3		2.3		2.0

Investment by Type: (1)
Fixed maturity securities	60.6	%	61.1	%	63.1	%	63.1	%	63.1	%
Residential mortgage-backed	15.4		14.9		10.6		10.7		10.4
Commercial mortgage-backed	8.1		8.4		7.7		7.5		7.5
Other asset-backed	4.1		4.1		5.7		6.5		6.9
Mortgage loans	9.1		8.9		8.6		8.1		8.0
Equity securities	0.6		0.6		0.9		0.8		1.0
Other	2.1		2.0		3.4		3.3		3.1

Agent Strength Totals:
8-state Farm Bureau Property & Casualty channel	1,190		1,258		1,225		1,226		1,193
6 life-only states	707		713		712		709		689
Total	1,897		1,971		1,937		1,935		1,882

(1) Periods prior to December 31, 2011 have not been restated for impact of the EquiTrust Life sale.

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