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

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8-K - 8-K - FBL FINANCIAL GROUP INC	pressrelease8k2012q3.htm
EX-99.1 - EXHIBIT - FBL FINANCIAL GROUP INC	exh991newsreleaseq32012.htm

Financial Supplement

2012 Third 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
	Jim.Brannen@FBLFinancial.com
	(515) 225-5631

	Don Seibel
	Chief Financial Officer
	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)
September 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)



	September 30, 2012		December 31, 2011
Assets
Investments:
Fixed maturities - available for sale, at fair value (amortized cost: 2012 - $5,582,526; 2011 - $5,189,994)	$	6,196,638	$	5,570,550
Equity securities - available for sale, at fair value (cost: 2012 - $81,811; 2011 - $55,697)	85,751		57,432
Mortgage loans	541,975		552,359
Real estate	4,672		2,541
Policy loans	172,786		172,368
Short-term investments	18,889		41,756
Other investments	450		189
Total investments	7,021,161		6,397,195

Cash and cash equivalents	129,259		296,339
Restricted debt defeasance trust assets	—		211,627
Securities and indebtedness of related parties	93,238		64,516
Accrued investment income	75,186		67,200
Amounts receivable from affiliates	4,324		3,942
Reinsurance recoverable	94,423		94,685
Deferred acquisition costs	203,298		260,256
Value of insurance in force acquired	16,231		25,781
Current income taxes recoverable	29,655		16,334
Other assets	73,011		67,590
Assets held in separate accounts	634,402		603,903








Total assets	$	8,374,188	$	8,109,368

FBL Financial Group, Inc.

Consolidated Balance Sheets (Continued)

(Dollars in thousands)



	September 30, 2012		December 31, 2011
Liabilities and stockholders' equity
Liabilities:
Future policy benefits:
Interest sensitive products	$	4,036,243	$	3,744,857
Traditional life insurance and accident and health products	1,441,639		1,401,995
Other policy claims and benefits	36,552		40,488
Supplementary contracts without life contingencies	362,351		359,663
Advance premiums and other deposits	222,069		211,573
Amounts payable to affiliates	883		713
Short-term debt payable to non-affiliates	—		174,258
Long-term debt payable to affiliates	50,000		49,968
Long-term debt payable to non-affiliates	97,000		97,000
Deferred income taxes	195,252		100,341
Other liabilities	91,385		122,180
Liabilities related to separate accounts	634,402		603,903
Total liabilities	7,167,776		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 24,740,281 shares in 2012 and 29,457,644 shares in 2011	116,043		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	288,432		177,845
Retained earnings	791,352		884,263
Total FBL Financial Group, Inc. stockholders' equity	1,206,349		1,202,314
Noncontrolling interest	63		115
Total stockholders' equity	1,206,412		1,202,429
Total liabilities and stockholders' equity	$	8,374,188	$	8,109,368

FBL Financial Group, Inc.

Consolidated Statements of Comprehensive Income (Unaudited)

(Dollars in thousands, except per share data)



	Three months ended September 30,						Nine months ended September 30,
	2012			2011			2012			2011
Revenues:
Interest sensitive product charges	$	25,638		$	24,789		$	75,060		$	72,964
Traditional life insurance premiums	41,886			40,342			130,917			125,868
Net investment income	93,482			85,451			269,793			257,302
Net realized capital gains on sales of investments	5,379			279			10,669			4,610

Total other-than-temporary impairment losses	(6,208		)	21			(21,188		)	(12,898		)
Non-credit portion in other comprehensive income	2,291			(1,167		)	12,070			7,519
Net impairment losses recognized in earnings	(3,917		)	(1,146		)	(9,118		)	(5,379		)
Other income	2,891			4,856			13,625			13,835
Total revenues	165,359			154,571			490,946			469,200

Benefits and expenses:
Interest sensitive product benefits	48,640			49,410			147,050			144,251
Traditional life insurance benefits	37,473			35,598			116,925			109,913
Policyholder dividends	3,279			4,109			10,893			12,765
Underwriting, acquisition and insurance expenses	39,939			35,267			107,040			95,770
Interest expense	2,007			1,983			5,972			6,524
Loss on debt redemption	—			—			33			—
Other expenses	3,986			4,886			16,459			15,768
Total benefits and expenses	135,324			131,253			404,372			384,991
	30,035			23,318			86,574			84,209
Income taxes	(10,606		)	(7,835		)	(29,620		)	(26,508		)
Equity income, net of related income taxes	1,058			231			3,309			1,019
Net income from continuing operations	20,487			15,714			60,263			58,720
Discontinued operations:
Loss on sale of subsidiary	—			—			(2,252		)	—
Income (loss) from discontinued operations, net of tax	55			11,354			(709		)	29,618
Total income (loss) from discontinued operations	55			11,354			(2,961		)	29,618
Net income	20,542			27,068			57,302			88,338
Net loss (gain) attributable to noncontrolling interest	(66		)	1			52			21
Net income attributable to FBL Financial Group, Inc.	$	20,476		$	27,069		$	57,354		$	88,359

Comprehensive income	$	75,864		$	172,829		$	167,889		$	302,496

Earnings per common share:
Income from continuing operations	$	0.77		$	0.51		$	2.14		$	1.91
Income (loss) from discontinued operations	—			0.37			(0.10		)	0.96
Earnings per common share	$	0.77		$	0.88		$	2.04		$	2.87
Earnings per common share - assuming dilution:
Income from continuing operations	$	0.76		$	0.50		$	2.11		$	1.88
Income (loss) from discontinued operations	—			0.36			(0.10		)	0.95
Earnings per common share - assuming dilution	$	0.76		$	0.86		$	2.01		$	2.83

Cash dividends per common share	$	0.1000		$	0.0625		$	0.3000		$	0.1875



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

	Q3 2011			Q4 2011			Q1 2012			Q2 2012			Q3 2012
Operating revenues:
Interest sensitive product charges	$	24,792		$	24,136		$	25,139		$	24,292		$	25,662
Traditional life insurance premiums	40,342			42,651			43,123			45,908			41,886
Net investment income	85,987			86,485			86,412			89,389			92,544
Other income	4,856			3,866			5,005			5,729			2,891
Total operating revenues	155,977			157,138			159,679			165,318			162,983

Benefits and expenses:
Interest sensitive product benefits	49,369			47,765			49,079			49,271			48,553
Traditional life insurance benefits	35,598			39,053			39,319			40,140			37,461
Policyholder dividends	4,109			4,265			4,244			3,370			3,279
Underwriting, acquisition and insurance expenses:
Commission expense, net of deferrals	5,150			5,844			5,699			6,129			5,552
Amortization of deferred acquisition costs	11,452			7,115			7,486			7,923			12,977
Amortization of value of insurance in force acquired	1,405			(297		)	687			1,521			2,562
Other underwriting expenses	17,885			19,638			18,147			19,099			19,147
Total underwriting, acquisition and insurance expenses	35,892			32,300			32,019			34,672			40,238
Interest expense	1,983			2,008			1,982			1,983			2,007
Other expenses	4,886			4,884			5,790			6,683			3,986
Total benefits and expenses	131,837			130,275			132,433			136,119			135,524
	24,140			26,863			27,246			29,199			27,459
Income taxes	(8,122		)	(6,766		)	(8,971		)	(10,010		)	(9,705		)
Net loss (income) attributable to noncontrolling interest	1			(27		)	20			98			(66		)
Equity income, net of related income taxes	231			265			1,621			630			1,058
Operating income	16,250			20,335			19,916			19,917			18,746

Realized gains/losses on investments, net of offsets	(820		)	(5,031		)	(249		)	222			1,324
Change in net unrealized gains/losses on derivatives, net of offsets	285			(281		)	(126		)	236			351
Net impact of discontinued operations	11,354			(41,079		)	(2,932		)	(84		)	55
Loss on debt redemption	—			(21,564		)	(22		)	—			—
Net income (loss) attributable to FBL Financial Group, Inc.	$	27,069		$	(47,620	)	$	16,587		$	20,291		$	20,476

Operating income per common share - assuming dilution	$	0.52		$	0.65		$	0.64		$	0.72		$	0.70
Earnings (loss) per common share - assuming dilution	$	0.86		$	(1.55	)	$	0.53		$	0.73		$	0.76

Weighted average common shares outstanding (in thousands):
Basic	30,803			30,746			30,527			27,437			26,562
Effect of dilutive securities	463			509			479			267			305
Diluted	31,266			31,255			31,006			27,704			26,867

Operating return on equity, excluding AOCI - last twelve months (1)	10.7		%	7.6		%	7.8		%	7.6		%	8.1		%
Operating return on equity, including AOCI - last twelve months (1)	9.8		%	6.8		%	6.8		%	6.4		%	6.6		%


(1)	Q3 2011 return on equity was not restated to reflect the impact of discontinued operations or the retrospective adoption of new accounting guidance.

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 September 30, 2012	Annuity		Life Insurance			Corporate & Other			Consolidated
	(Dollars in thousands)
Operating revenues:
Interest sensitive product charges	$	166	$	13,827		$	11,669		$	25,662
Traditional life insurance premiums	—		41,886			—			41,886
Net investment income	49,301		35,089			8,154			92,544
Other income	—		(57		)	2,948			2,891
Total operating revenues	49,467		90,745			22,771			162,983

Benefits and expenses:
Interest sensitive product benefits	25,717		14,883			7,953			48,553
Traditional life insurance benefits	—		37,461			—			37,461
Policyholder dividends	—		3,279			—			3,279
Underwriting, acquisition and insurance expenses:
Commission expense, net of deferrals	590		4,073			889			5,552
Amortization of deferred policy acquisition costs	4,124		5,482			3,371			12,977
Amortization of value of insurance in force acquired	2,024		538			—			2,562
Other underwriting expenses	4,899		12,159			2,089			19,147
Total underwriting, acquisition and insurance expenses	11,637		22,252			6,349			40,238
Interest expense	—		—			2,007			2,007
Other expenses	—		—			3,986			3,986
Total benefits and expenses	37,354		77,875			20,295			135,524
	12,113		12,870			2,476			27,459
Net income attributable to noncontrolling interest	—		—			(66		)	(66		)
Equity income (loss), before tax	—		—			(644		)	(644		)
Pre-tax operating income	$	12,113	$	12,870		$	1,766		$	26,749

FBL Financial Group, Inc.

Consolidating Statements of Pre-tax Operating Income (Continued)



Quarter Ended September 30, 2011	Annuity		Life Insurance		Corporate & Other			Consolidated
	(Dollars in thousands)
Operating revenues:
Interest sensitive product charges	$	182	$	12,474	$	12,136		$	24,792
Traditional life insurance premiums	—		40,342		—			40,342
Net investment income	45,635		33,979		6,373			85,987
Other income	—		124		4,732			4,856
Total operating revenues	45,817		86,919		23,241			155,977

Benefits and expenses:
Interest sensitive product benefits	25,336		16,531		7,502			49,369
Traditional life insurance benefits	—		35,598		—			35,598
Policyholder dividends	—		4,109		—			4,109
Underwriting, acquisition and insurance expenses:
Commission expense, net of deferrals	740		3,442		968			5,150
Amortization of deferred acquisition costs	2,004		4,877		4,572			11,453
Amortization of value of insurance in force acquired	440		965		—			1,405
Other underwriting expenses	2,768		10,863		4,254			17,885
Total underwriting, acquisition and insurance expenses	5,952		20,147		9,794			35,893
Interest expense	—		—		1,983			1,983
Other expenses	—		—		4,886			4,886
Total benefits and expenses	31,288		76,385		24,165			131,838
	14,529		10,534		(924		)	24,139
Net loss attributable to noncontrolling interest	—		—		1			1
Equity income (loss), before tax	—		—		(409		)	(409		)
Pre-tax operating income (loss)	$	14,529	$	10,534	$	(1,332	)	$	23,731



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

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

Operating revenues:
Interest sensitive product charges	$	182			$	167		$	206		$	191		$	166
Net investment income	45,635				46,373			45,978			47,615			49,301
Other income	—				1			3			6			—
Total operating revenues	45,817				46,541			46,187			47,812			49,467

Benefits and expenses:
Interest sensitive product benefits	25,336				25,234			25,535			26,127			25,717
Underwriting, acquisition and insurance expenses:
Commission expense, net of deferrals	740				724			718			721			590
Amortization of deferred acquisition costs	2,004				2,743			2,293			35			4,124
Amortization of value of insurance in force acquired	440				(363		)	33			134			2,024
Other underwriting expenses	2,768				2,869			4,873			4,994			4,899
Total underwriting, acquisition and insurance expenses	5,952				5,973			7,917			5,884			11,637
Total benefits and expenses	31,288				31,207			33,452			32,011			37,354
Pre-tax operating income	$	14,529			$	15,334		$	12,735		$	15,801		$	12,113

Selected balance sheet data, securities at cost:
Assets:
Investments	$	3,297,875			$	3,298,442		$	3,405,435		$	3,514,096		$	3,533,318
Deferred acquisition costs	77,416				78,102			80,766			84,712			83,269
Value of insurance in force acquired	11,496				11,852			11,819			11,678			9,640

Liabilities and equity:
Liabilities:
Interest sensitive product reserves	$	2,784,995			$	2,812,666		$	2,906,991		$	3,029,007		$	3,061,295
Other insurance reserves	376,592				378,319			379,977			383,547			382,989
Allocated equity, excluding AOCI	252,082				254,602			256,383			266,180			268,654

Other data:
Number of direct contracts	53,839				53,894			54,091			54,142			53,941

Portfolio yield net of assumed defaults	5.72		%		5.65		%	5.55		%	5.40		%	5.40		%
Credited rate	3.32				3.32			3.32			3.14			3.05
Spread on fixed annuities at end of quarter (1)	2.40		%		2.33		%	2.23		%	2.26		%	2.35		%

Interest sensitive reserve activity:
Individual deferred annuity reserve:
Balance, beginning of period	$	2,102,447			$	2,143,378		$	2,182,809		$	2,252,575		$	2,302,564
Deposits	68,463				65,867			107,172			85,259			55,610
Withdrawals, surrenders and death benefits	(28,773		)		(29,344		)	(33,066		)	(36,745		)	(35,560		)
Net flows	39,690				36,523			74,106			48,514			20,050

Policyholder interest	17,367				17,403			17,729			17,971			17,570
Annuitizations and other	(16,126		)		(14,495		)	(22,069		)	(16,496		)	(16,856		)
Balance, end of period	2,143,378				2,182,809			2,252,575			2,302,564			2,323,328
Other interest sensitive reserves	641,617				629,857			654,416			726,443			737,967
Total interest sensitive product reserves	$	2,784,995			$	2,812,666		$	2,906,991		$	3,029,007		$	3,061,295


(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

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

Operating revenues:
Interest sensitive product charges	$	12,474		$	12,624	$	13,189		$	13,292		$	13,827
Traditional life insurance premiums	40,342			42,651		43,123			45,908			41,886
Net investment income	33,979			33,402		33,846			34,841			35,089
Other income	124			11		(53		)	(44		)	(57		)
Total operating revenues	86,919			88,688		90,105			93,997			90,745

Benefits and expenses:
Interest sensitive product benefits:
Interest credited	7,211			7,213		7,141			7,209			7,075
Death benefits	9,320			7,814		8,244			10,060			7,808
Total interest sensitive product benefits	16,531			15,027		15,385			17,269			14,883
Traditional life insurance benefits:
Death benefits	16,531			19,212		18,406			15,033			16,261
Surrender and other benefits	8,543			7,978		8,657			8,160			12,220
Increase in traditional life future policy benefits	10,524			11,863		12,256			16,947			8,980
Total traditional life insurance benefits	35,598			39,053		39,319			40,140			37,461
Policyholder dividends	4,109			4,265		4,244			3,370			3,279
Underwriting, acquisition and insurance expenses:
Commission expense, net of deferrals	3,442			4,155		4,019			4,413			4,073
Amortization of deferred acquisition costs	4,877			4,023		5,246			5,997			5,482
Amortization of value of insurance in force acquired	965			66		654			1,387			538
Other underwriting expenses	10,863			12,026		11,875			12,311			12,159
Total underwriting, acquisition and insurance expenses	20,147			20,270		21,794			24,108			22,252
Total benefits and expenses	76,385			78,615		80,742			84,887			77,875
Pre-tax operating income	$	10,534		$	10,073	$	9,363		$	9,110		$	12,870

Selected balance sheet data, securities at cost:
Assets:
Investments	$	2,212,936		$	2,224,280	$	2,215,738		$	2,258,183		$	2,277,934
Deferred acquisition costs	182,384			187,113		190,953			193,091			194,351
Value of insurance in force acquired	26,275			26,210		25,597			24,167			23,612

Liabilities and equity:
Liabilities:
Interest sensitive reserves	$	642,362		$	647,711	$	652,427		$	658,735		$	668,699
Other insurance reserves	1,533,024			1,549,886		1,566,750			1,584,627			1,595,819
Allocated equity, excluding AOCI	280,450			286,067		277,192			281,372			286,382



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

	Q3 2011				Q4 2011			Q1 2012			Q2 2012			Q3 2012
				(Dollars in thousands)
Other data:
Number of direct policies - traditional life	350,372				352,274			352,336			353,596			353,358
Number of direct policies - universal life	57,520				58,115			58,618			58,883			58,958
Direct face amounts - traditional life	$	37,586,036			$	38,235,322		$	38,552,018		$	39,252,561		$	39,617,946
Direct face amounts - universal life	$	5,392,760			$	5,481,755		$	5,538,683		$	5,619,904		$	5,666,272

Portfolio yield net of assumed defaults	6.06		%		5.97		%	5.93		%	5.89		%	5.83		%
Credited rate	4.30				4.26			4.16			4.17			4.12
Spread on universal life at end of quarter (1)	1.76		%		1.71		%	1.77		%	1.72		%	1.71		%

Interest sensitive reserve activity:
Balance, beginning of period	$	636,791			$	642,362		$	647,711		$	652,427		$	658,735
Deposits	15,745				16,492			17,363			18,976			20,703
Withdrawals and surrenders	(5,651		)		(4,634		)	(6,531		)	(6,175		)	(3,688		)
Net flows	10,094				11,858			10,832			12,801			17,015

Policyholder interest	6,450				6,469			6,370			6,552			6,382
Policy charges	(12,840		)		(13,187		)	(12,898		)	(14,325		)	(13,918		)
Benefits and other	1,867				209			412			1,280			485
Balance, end of period	$	642,362			$	647,711		$	652,427		$	658,735		$	668,699


(1)	Point-in-time spread at the balance sheet date used by management for decision making with universal life (excluding products with a secondary guarantee) 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

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

Operating revenues:
Interest sensitive product charges	$	12,136			$	11,345		$	11,744		$	10,809		$	11,669
Net investment income	6,373				6,710			6,588			6,933			8,154
Other income	4,732				3,854			5,055			5,767			2,948
Total operating revenues	23,241				21,909			23,387			23,509			22,771

Benefits and expenses:
Interest sensitive product benefits	7,502				7,504			8,159			5,875			7,953
Underwriting, acquisition and insurance expenses:
Commission expense, net of deferrals	968				965			962			995			889
Amortization of deferred acquisition costs	4,572				349			(53		)	1,891			3,371
Other underwriting expenses	4,254				4,743			1,399			1,794			2,089
Total underwriting, acquisition and insurance expenses	9,794				6,057			2,308			4,680			6,349
Interest expense	1,983				2,008			1,982			1,983			2,007
Other expenses	4,886				4,884			5,790			6,683			3,986
Total benefits and expenses	24,165				20,453			18,239			19,221			20,295
	(924		)		1,456			5,148			4,288			2,476
Net loss (income) attributable to noncontrolling interest	1				(27		)	20			98			(66		)
Equity income (loss), before tax	(409		)		(409		)	111			(1,143		)	(644		)
Pre-tax operating income (loss)	$	(1,332	)		$	1,020		$	5,279		$	3,243		$	1,766

Selected balance sheet data, securities at cost:
Assets:
Investments	$	472,571			$	492,182		$	514,044		$	556,455		$	591,857
Deferred acquisition costs	100,150				99,916			99,542			98,446			95,063
Separate account assets	574,374				603,903			655,755			617,538			634,402

Liabilities and equity:
Liabilities:
Interest sensitive reserves	$	277,215			$	284,480		$	290,802		$	298,800		$	306,249
Other insurance reserves	94,716				93,826			99,256			95,102			95,870
Separate account liabilities	574,374				603,903			655,755			617,538			634,402
Allocated equity, excluding AOCI	549,722				480,800			395,259			375,130			359,881

Rollforward of separate account balances:
Beginning separate account balance	$	681,996			$	574,374		$	603,903		$	655,755		$	617,538
Net premiums	(3,178		)		2,881			5,061			7,102			2,127
Net investment income (loss)	(84,033		)		44,758			65,617			(25,590		)	33,305
Charges, benefits and surrenders	(20,411		)		(18,110		)	(18,826		)	(19,729		)	(18,568		)
Ending separate account balance	$	574,374			$	603,903		$	655,755		$	617,538		$	634,402

Other data:
Number of direct contracts - variable annuity	17,442				14,915			14,627			14,355			14,088
Number of direct policies - variable universal life	53,119				49,198			48,794			48,086			47,473
Direct face amounts - variable universal life	$	6,661,581			$	6,061,761		$	6,065,488		$	5,970,850		$	5,897,007



FBL Financial Group, Inc.
Deferred Acquisition Costs by Segment

	Q3 2011				Q4 2011			Q1 2012			Q2 2012			Q3 2012
				(Dollars in thousands)
Annuity
Balance - beginning of period	$	76,154			$	77,416		$	78,102		$	80,766		$	84,712
Capitalization:
Commissions	2,889				3,039			4,537			3,708			2,547
Expenses	266				373			426			358			306
Total capitalization	3,155				3,412			4,963			4,066			2,853
Amortization - operating basis, before impact of unlocking	(2,410		)		(2,743		)	(2,293		)	(2,122		)	(4,124		)
Amortization - unlocking, operating basis	406				—			—			2,087			—
Amortization - realized gains/losses on investments and unrealized gains/losses on derivatives	111				17			(6		)	(85		)	(172		)
Balance - end of period	$	77,416			$	78,102		$	80,766		$	84,712		$	83,269

Life Insurance
Balance - beginning of period	$	181,208			$	182,384		$	187,113		$	190,953		$	193,091
Capitalization:
Commissions	3,950				5,445			5,924			5,189			3,616
Expenses	2,015				2,791			2,507			2,666			2,292
Deferral of sales inducements	105				587			578			469			98
Total capitalization	6,070				8,823			9,009			8,324			6,006
Amortization - operating basis, before impact of unlocking	(3,155		)		(4,094		)	(5,340		)	(3,571		)	(3,959		)
Amortization - unlocking, operating basis	(1,763		)		—			—			(2,458		)	(1,554		)
Amortization - realized gains/losses on investments and unrealized gains/losses on derivatives	24				—			171			(157		)	767
Balance - end of period	$	182,384			$	187,113		$	190,953		$	193,091		$	194,351

Corporate and Other
Balance - beginning of period	$	103,849			$	100,150		$	99,916		$	99,542		$	98,446
Capitalization:
Commissions	373				240			315			355			232
Deferral of sales inducements	2				15			12			5			4
Total capitalization	375				255			327			360			236
Amortization - operating basis, before impact of unlocking	(5,406		)		(366		)	8			(3,590		)	(549		)
Amortization - unlocking, operating basis	819				—			—			1,741			(2,795		)
Amortization - realized gains/losses on investments and unrealized gains/losses on derivatives	513				(123		)	(709		)	393			(275		)
Balance - end of period	$	100,150			$	99,916		$	99,542		$	98,446		$	95,063



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

	Q3 2011				Q4 2011			Q1 2012			Q2 2012			Q3 2012
				(Dollars in thousands)
Total
Balance - beginning of period	$	361,211			$	359,950		$	365,131		$	371,261		$	376,249
Capitalization:
Commissions	7,212				8,724			10,776			9,252			6,395
Expenses	2,281				3,164			2,933			3,024			2,598
Deferral of sales inducements	107				602			590			474			102
Total capitalization	9,600				12,490			14,299			12,750			9,095
Amortization - operating basis, before impact of unlocking	(10,971		)		(7,203		)	(7,625		)	(9,283		)	(8,632		)
Amortization - unlocking, operating basis	(538		)		—			—			1,370			(4,349		)
Amortization - realized gains/losses on investments and unrealized gains/losses on derivatives	648				(106		)	(544		)	151			320
Balance - end of period	359,950				365,131			371,261			376,249			372,683
Impact of realized/unrealized gains/losses in AOCI	(107,099		)		(104,875		)	(122,510		)	(150,069		)	(169,385		)
Deferred acquisition costs	$	252,851			$	260,256		$	248,751		$	226,180		$	203,298



FBL Financial Group, Inc.
Collected Premiums

	Q3 2011				Q4 2011			Q1 2012			Q2 2012			Q3 2012
				(Dollars in thousands)
Annuity
Individual:
First year	$	39,907			$	38,866		$	57,802		$	44,832		$	35,496
Renewal	29,742				27,362			49,716			41,193			21,170
Total individual	69,649				66,228			107,518			86,025			56,666
Group	5,586				3,434			2,298			1,277			4,832
Total Annuity	75,235				69,662			109,816			87,302			61,498

Life Insurance
Direct:
Universal life:
First year	4,526				3,636			4,014			4,391			7,854
Renewal	10,992				12,155			13,109			12,862			12,068
Total universal life	15,518				15,791			17,123			17,253			19,922
Participating whole life:
First year	2,461				2,863			3,061			2,878			2,510
Renewal	22,857				23,800			24,520			25,393			22,950
Total participating whole life	25,318				26,663			27,581			28,271			25,460
Term life and other:
First year	2,694				2,892			2,976			2,881			2,637
Renewal	17,176				17,795			18,075			18,429			18,382
Total term life and other	19,870				20,687			21,051			21,310			21,019
Total direct life insurance	60,706				63,141			65,755			66,834			66,401
Reinsurance	(4,901		)		(4,996		)	(5,406		)	(4,627		)	(4,548		)
Total Life Insurance	55,805				58,145			60,349			62,207			61,853

Corporate and Other
Variable, net of reinsurance	19,451				16,147			19,974			22,134			15,684
Accident and health, net of reinsurance	39				261			58			39			36
Total Corporate and Other	19,490				16,408			20,032			22,173			15,720

Collected premiums from continuing operations	150,530				144,215			190,197			171,682			139,071

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

Total collected premiums	$	292,959			$	293,507		$	190,197		$	171,682		$	139,071



FBL Financial Group, Inc.
Parent Company Liquidity

	January - September 2012			October - December 2012
	Actual			Projected (5)			Total
	(Dollars in thousands)
Total cash and invested assets, beginning of period	$	239,440		$	49,840		$	239,440
Sources:
Investment income	338			200			538
Management fees from subsidiaries and affiliates	2,977			1,100			4,077
Total sources	3,315			1,300			4,615

Uses:
Repurchase of common stock (1)	(163,164		)	—			(163,164		)
Net costs from EquiTrust Life sale (2)	(9,315		)	—			(9,315		)
Interest expense	(9,408		)	(2,000		)	(11,408		)
Stockholders' dividends (3)	(8,451		)	(2,600		)	(11,051		)
Contributions to subsidiaries	(2,000		)	—			(2,000		)
General expenses	(10,768		)	(2,000		)	(12,768		)
Total uses	(203,106		)	(6,600		)	(209,706		)

Other, net (4)	10,191			44,830			55,021
Total cash and invested assets, end of period	$	49,840		$	89,370		$	89,370



(1)	Class A common shares repurchased totaled 4,991,012 during 2012. As of September 30, 2012, $22.2 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 sources of cash expected during the fourth quarter of 2012 include $37.8 million tax refunds related to the EquiTrust Life sale. In addition, other fluctuates from period to period 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 September 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

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

Capitalization:
Senior notes with affiliates, due 2015	$	99,932			$	49,968		$	49,971		$	49,973		$	50,000
Senior notes, due 2014	75,156				75,142			—			—			—
Senior notes, due 2017	99,079				99,116			—			—			—
Trust preferred securities, due 2047	97,000				97,000			97,000			97,000			97,000
Total debt	371,167				321,226			146,971			146,973			147,000

Preferred stock	3,000				3,000			3,000			3,000			3,000
Common stockholders' equity, excluding AOCI	1,082,254				1,021,469			928,834			922,682			914,917
Total capitalization, excluding AOCI	1,456,421				1,345,695			1,078,805			1,072,655			1,064,917

Accumulated other comprehensive income	230,174				177,845			180,839			233,110			288,432
Total capitalization, including AOCI	$	1,686,595			$	1,523,540		$	1,259,644		$	1,305,765		$	1,353,349

Common shares outstanding	31,237,734				30,650,634			27,695,759			26,752,871			25,933,271

Book Value per Share:
Excluding AOCI	$	34.65			$	33.33		$	33.54		$	34.49		$	35.28
Including AOCI	42.01				39.13			40.07			43.20			46.40

Debt-to-Capital Ratio:
Excluding AOCI	25.5		%		23.9		%	13.6		%	13.7		%	13.8		%
Including AOCI	22.0				21.1			11.7			11.3			10.9

Debt-to-Capital Ratio with 100% Credit for Trust Preferred Securities:
Excluding AOCI	18.8		%		16.7		%	4.6		%	4.7		%	4.7		%
Including AOCI	16.3				14.7			4.0			3.8			3.7

Class A Common Ownership:
Iowa Farm Bureau Federation	51.3		%		52.2		%	55.7		%	57.7		%	59.7		%
Other Farm Bureau entities	7.3				7.5			5.8			5.3			6.1
Public	41.4				40.3			38.5			37.0			34.2
	100.0		%		100.0		%	100.0		%	100.0		%	100.0		%



FBL Financial Group, Inc.
Other Information (Continued)

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

Quality of Fixed Maturity Securities: (1)
AAA, AA, A	64.6	%	64.2	%	64.0	%	64.2	%	63.2	%
BBB	29.6		30.8		31.2		31.1		32.1
BB	3.7		2.7		2.5		2.7		2.9
<BB	2.1		2.3		2.3		2.0		1.8

Investment by Type: (1)
Fixed maturity securities	61.1	%	63.1	%	63.1	%	63.1	%	63.7	%
Residential mortgage-backed	14.9		10.6		10.7		10.4		9.9
Commercial mortgage-backed	8.4		7.7		7.5		7.5		7.3
Other asset-backed	4.1		5.7		6.5		6.9		7.3
Mortgage loans	8.9		8.6		8.1		8.0		7.7
Equity securities	0.6		0.9		0.8		1.0		1.2
Other	2.0		3.4		3.3		3.1		2.9

Agent Strength Totals:
8-state Farm Bureau Property & Casualty channel	1,258		1,225		1,226		1,193		1,171
6 life-only states	713		712		709		689		693
Total	1,971		1,937		1,935		1,882		1,864

(1) September 30, 2011 was not restated for impact of the EquiTrust Life sale.

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