FBL Financial Group Reports Fourth Quarter 2000 Results - Adjusted Operating Income Per Share Totals $0.44.Business Editors WEST DES MOINES West Des Moines (də moin`), city (1990 pop. 31,702), Polk co., S central Iowa, a growing suburb W of Des Moines; inc. 1893 as Valley Junction, renamed 1938. Products manufactured there include cement, metal items, and pumps. , Iowa--(BUSINESS WIRE)--Feb. 8, 2001
Financial Highlights
(Dollars in thousands, except per share data)
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Three Months Ended
Dec. 31,
2000 1999
--------------------------------
Adjusted operating revenues $95,312 $98,042
Adjusted operating income 12,804 13,776
Net income 9,667 14,548
Earnings per common share (assuming
dilution):
Adjusted operating income 0.44 0.43
Net income 0.33 0.45
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FBL FBL Full Bell Lines (coin grading) FBL Fly by Light FBL FIATA Bill of Lading FBL Functional Baseline FBL Foundation for a Better Life FBL Federal Barge Lines, Inc. Financial Group, Inc. (NYSE NYSE See: New York Stock Exchange : FFG FFG Forschungsförderungsgesellschaft (German: Austrian research promotion agency) FFG Flash Flood Guidance FFG Guided Missile Frigate FFG Fall from Grace (band) FFG Fast Frigates FFG Freeware Flight Group ) today announced that adjusted operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. totaled $12,804,000 for the fourth quarter of 2000, compared to $13,776,000 for the fourth quarter of 1999. On a diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. per common share basis, adjusted operating income totaled $0.44 compared to $0.43 in the fourth quarter of 1999. Adjusted operating income equals net income adjusted to eliminate the impact of realized gains Realized Gain A gain resulting from selling an asset at a price higher than the original purchase price. Notes: There may be tax consequences for a realized profit. and losses on investments. Adjusted operating revenues operating revenue Revenue from any regular source. Revenue from sales is adjusted for discounts and returns when calculating operating revenue. Compare other revenue. equals revenues also adjusted to eliminate these items. "Operating results for the fourth quarter were strong. Excluding our individual disability line of business, which we discontinued dis·con·tin·ue v. dis·con·tin·ued, dis·con·tin·u·ing, dis·con·tin·ues v.tr. 1. To stop doing or providing (something); end or abandon: earlier this year, premiums and product charges increased four percent. Our mortality experience was in line with expectations and our equity income results were above expectations," said Bill Oddy, Chief Executive Officer. "These strong fourth quarter operating results cap off a year where we executed executed 1) adj. to have been completed. (Example: "it is an executed contract") 2) v. to have completed or fully performed. (Example: "he executed all the promises made in the contract") 3) v. our plan and made measurable progress against each of our growth strategies. In 2000, we repurchased over $85 million of our stock, reported solid results from our core distribution and experienced a 124 percent increase in alliance partner variable sales. At the beginning of 2001, we finalized See finalization. the consolidation with Kansas Kansas, state, United States Kansas (kăn`zəs), midwestern state occupying the center of the coterminous United States. It is bordered by Missouri (E), Oklahoma (S), Colorado (W), and Nebraska (N). Farm Bureau Life Insurance Company and expanded our core distribution to 15 states." Product Revenues Up. Premiums and product charges for the fourth quarter of 2000, excluding accident and health premiums, increased four percent to $34,581,000 from $33,156,000 in the year ago quarter. Led by sales of variable products, interest sensitive product charges in the fourth quarter increased eight percent to $15,255,000, versus $14,155,000 in the year ago quarter. Traditional life insurance premiums increased two percent to $19,326,000 in the fourth quarter of 2000, compared to $19,001,000 in the fourth quarter of 1999. Accident and health premiums for the fourth quarter of 2000 reflect only FBL's group disability income business as the individual disability income business was reinsured effective September September: see month. 1, 2000. Total first year variable annuity Variable Annuity An insurance contract in which, at the end of the accumulation stage, the insurance company guarantees a minimum payment. The remaining income payments can vary depending on the performance of the managed portfolio. premiums collected (of which only expense charges and fees are included in revenues in the income statement) increased 1.4 percent to $10,962,000 in the fourth quarter of 2000, from $10,812,000 in the year ago quarter. Total first year variable universal life premiums collected declined to $3,371,000 from $4,399,000 in the fourth quarter of 1999. Total first year variable production increased 38 percent for the full year of 2000, with alliance partner sales increasing 124 percent. Investment Income. Net investment income in the fourth quarter totaled $55,734,000 compared to $56,120,000 in the year ago quarter. This is an increase of $155,000 from the third quarter of 2000 and a decrease of $386,000 from the fourth quarter of 1999. The yield earned on average invested assets was 7.40 percent for the year ended December December: see month. 31, 2000, compared to 7.57 percent for 1999. Benefits and Expenses. Benefits and expenses totaled $76,230,000 in the fourth quarter of 2000, compared to $77,463,000 in the year ago quarter. The fourth quarter 2000 amount reflects a decrease in accident and health benefits and reserve changes due to the discontinuation dis·con·tin·u·a·tion n. A cessation; a discontinuance. Noun 1. discontinuation - the act of discontinuing or breaking off; an interruption (temporary or permanent) discontinuance of FBL's individual disability income business, and an increase in general operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. . Equity Income. Equity income, net of related income taxes, totaled $1,565,000 in the fourth quarter of 2000, compared to $959,000 in the year ago quarter. Included in equity income is FBL's share of income from investments in various partnerships, joint ventures and other companies. Due to the nature of these investments, results may fluctuate significantly on a quarter to quarter basis. Discontinued Operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. . FBL sold a property-casualty subsidiary on March 31, 1998. Pursuant to an earn-out Earn-out Refers to an additional payment in a merger or acquisition that is not part of the original acquisition cost, which is based on the acquired company's future earnings relative to a level determined by the merger agreement. clause in the underlying sales agreement, FBL earned additional consideration of $600,000, after tax, in the fourth quarter of 2000. Net Income. Net income totaled $9,667,000 ($0.33 per diluted common share) for the quarter ended December 31, 2000, compared to $14,548,000 ($0.45 per diluted common share) in the year ago quarter. In the fourth quarter of 2000, FBL recognized realized losses Realized Loss A loss recognized when assets are sold for a price lower than the original purchase price. Notes: A portion of the realized loss may be applied against a capital gain or realized profit to reduce taxes. on investments totaling $6,398,000, compared to realized losses of $1,546,000 in the fourth quarter of 1999. Over 88 percent of the fourth quarter 2000 net realized losses are attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to two companies that filed for bankruptcy bankruptcy, in law, settlement of the liabilities of a person or organization wholly or partially unable to meet financial obligations. The purposes are to distribute, through a court-appointed receiver, the bankrupt's assets equitably among creditors and, in most because of asbestos asbestos, mineral asbestos, common name for any of a variety of silicate minerals within the amphibole and serpentine groups that are fibrous in structure and more or less resistant to acid and fire. related claims. Assets Total $3.7 Billion. Assets totaled $3.7 billion at both December 31, 2000 and 1999. At December 31, 2000, 93 percent of the fixed maturity securities in FBL's investment portfolio were investment grade debt securities. Book value per common share Book Value Per Common Share A measure used by owners of common shares in a firm to determine the level of safety associated with each individual share after all debts are paid accordingly. Formula: increased nine percent to $17.35 at December 31, 2000, from $15.94 at year end 1999. Book value per common share, excluding the impact of recording certain fixed maturity securities at market value, increased to $18.13 from $17.46 at December 31, 1999. Kansas Farm Bureau Life Acquisition. Effective January January: see month. 1, 2001, FBL finalized its acquisition of the assets and liabilities of Kansas Farm Bureau Life Insurance Company. A balance sheet with detail of the assets and liabilities acquired is included in FBL's financial supplement found on its web site, www.fblfinancial.com. After factoring in dividends on the newly issued Series C preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. , which are expected to total $1.0 million per quarter during 2001, this transaction is expected to be accretive to FBL's 2001 earnings by $0.01-$0.03 per share. Stock Repurchases Stock repurchase A firm's repurchase of outstanding shares of its common stock. . During the fourth quarter of 2000, FBL repurchased 3,750,018 of its Class A common shares. For the full year of 2000, FBL repurchased 4,358,397 shares, which represents 14 percent of total common shares outstanding as of year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. 1999. Conference Call. FBL management will hold a conference call with investors to discuss fourth quarter results. The call will be held tomorrow, February February: see month. 9, 2001, at 10 a.m. Central Time. The call will be webcast over the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the , and a replay will be available at FBL's web site, http://www.fblfinancial.com. The statements in this release concerning FBL's prospects for the future are forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. that involve certain risks and uncertainties, including changes to interest rate levels, the continued acceptance of FBL's insurance products by customers, and the continued success of FBL's and its alliance partners' marketing efforts. These forward-looking statements are based on assumptions which FBL believe to be reasonable. No assurance can be given that the assumptions will prove to be correct, and the difference between assumptions and actual results could be material. FBL Financial Group is a holding company whose primary operating subsidiaries An operating subsidiary is a business term frequently used within the United States railroad industry. In the case of a railroad, it refers to a company that is a subsidiary but operates with its own identity and rolling stock. include Farm Bureau Life Insurance Company and EquiTrust Life Insurance Company. FBL underwrites, markets and distributes life insurance, annuities and mutual funds to individuals and small businesses. FBL's three-pronged Adj. 1. three-pronged - having three prongs divided - separated into parts or pieces; "opinions are divided" growth strategy includes (1) internal growth within its traditional Farm Bureau distribution network in 15 midwestern Mid·west or Middle West A region of the north-central United States around the Great Lakes and the upper Mississippi Valley. It is generally considered to include Ohio, Indiana, Illinois, Michigan, Wisconsin, Minnesota, Iowa, Missouri, Kansas, and and western states, (2) alliances with other companies and (3) consolidations.
- FINANCIAL INFORMATION FOLLOWS -
FBL FINANCIAL GROUP, INC.
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(Dollars in thousands, except per share data)
Three months ended Dec. 31,
2000 1999
----------- -----------
REVENUES
Interest sensitive product charges $15,255 $14,155
Traditional life insurance premiums 19,326 19,001
Accident and health premiums 344 3,464
Net investment income 55,734 56,120
Realized losses on investments (6,398) (1,546)
Other income 4,612 5,304
----------- -----------
Total revenues 88,873 96,498
BENEFITS AND EXPENSES
Interest sensitive product benefits 30,667 31,851
Traditional life insurance and accident
and health benefits 12,645 13,097
Increase in traditional life and
accident
and health future policy benefits 4,195 5,136
Distributions to participating
policyholders 6,347 6,321
Underwriting, acquisition and insurance
expenses 18,029 16,592
Interest expense 928 816
Other expenses 3,419 3,650
----------- -----------
Total benefits and expenses 76,230 77,463
----------- -----------
12,643 19,035
Income taxes (4,032) (5,637)
Minority interest in earnings of
subsidiaries:
Dividends on company-obligated
mandatorily redeemable preferred
stock of subsidiary trust (1,212) (1,212)
Other 103 18
Equity income, net of related income
taxes 1,565 959
----------- -----------
Income from continuing operations 9,067 13,163
Discontinued operations:
Gain on disposal of property-casualty
operations, net of related income
taxes 600 1,385
----------- -----------
Net income $9,667 $14,548
=========== ===========
Earnings per common share:
Income from continuing operations $0.32 $0.42
Income from discontinued operations 0.02 0.04
----------- -----------
Earnings per common share $0.34 $0.46
=========== ===========
Earnings per common share - assuming
dilution:
Income from continuing operations $0.31 $0.41
Income from discontinued operations 0.02 0.04
----------- -----------
Earnings per common share - assuming
dilution $0.33 $0.45
=========== ===========
FBL FINANCIAL GROUP, INC.
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(Dollars in thousands, except per share data)
Year ended Dec. 31,
2000 1999
----------- -----------
REVENUES
Interest sensitive product charges $59,780 $55,363
Traditional life insurance premiums 83,830 82,569
Accident and health premiums 9,654 13,361
Net investment income 221,369 225,820
Realized losses on investments (25,960) (2,342)
Other income 18,945 20,215
----------- -----------
Total revenues 367,618 394,986
BENEFITS AND EXPENSES
Interest sensitive product benefits 127,605 123,231
Traditional life insurance and accident
and health benefits 60,229 57,941
Increase in traditional life and
accident and health future policy
benefits 19,066 19,556
Distributions to participating
policyholders 25,043 25,360
Underwriting, acquisition and insurance
expenses 72,930 70,176
Interest expense 3,655 2,553
Other expenses 14,206 15,020
----------- -----------
Total benefits and expenses 322,734 313,837
----------- -----------
44,884 81,149
Income taxes (13,602) (25,911)
Minority interest in earnings of
subsidiaries:
Dividends on company-obligated
mandatorily redeemable preferred stock
of subsidiary trust (4,850) (4,850)
Other 120 (35)
Equity income, net of related income
taxes 12,195 3,972
----------- -----------
Income from continuing operations 38,747 54,325
Discontinued operations:
Gain on disposal of property-casualty
operations, net of related income taxes 600 1,385
----------- -----------
Net income $39,347 $55,710
=========== ===========
Earnings per common share:
Income from continuing operations $1.27 $1.68
Income from discontinued operations 0.02 0.04
----------- -----------
Earnings per common share $1.29 $1.72
=========== ===========
Earnings per common share - assuming
dilution:
Income from continuing operations $1.25 $1.65
Income from discontinued operations 0.02 0.04
----------- -----------
Earnings per common share - assuming
dilution $1.27 $1.69
=========== ===========
FBL FINANCIAL GROUP, INC.
RECONCILIATION OF NET INCOME TO ADJUSTED OPERATING INCOME
(Unaudited)
(Dollars in thousands, except per share data)
Three months ended
Dec. 31,
2000 1999
------------- -------------
Net income $9,667 $14,548
Adjustments:
Realized losses, net of related
adjustments to deferred policy
acquisition costs, value of
insurance in force acquired,
unearned revenue reserve and
income taxes 3,737 613
Gain on disposal of property-casualty
operations (600) (1,385)
------------- -------------
Adjusted operating income $12,804 $13,776
============= =============
Adjusted operating earnings per
common share - assuming dilution $0.44 $0.43
============= =============
Weighted average common shares 28,365,864 31,660,089
Effect of dilutive securities 395,878 543,175
------------- -------------
Weighted average common
shares - diluted 28,761,742 32,203,264
============= =============
FBL FINANCIAL GROUP, INC.
RECONCILIATION OF NET INCOME TO ADJUSTED OPERATING INCOME
(Unaudited)
(Dollars in thousands, except per share data)
Year ended Dec. 31,
2000 1999
------------- -------------
Net income $39,347 $55,710
Adjustments:
Realized losses, net of related
adjustments to deferred policy
acquisition costs, value of insurance
in force acquired, unearned revenue
reserve and income taxes 15,735 1,026
Gain on disposal of property-casualty
operations (600) (1,385)
------------- -------------
Adjusted operating income $54,482 $55,351
============= =============
Adjusted operating earnings per
common share - assuming dilution $1.76 $1.68
============= =============
Weighted average common shares 30,399,401 32,213,154
Effect of dilutive securities 400,490 616,818
------------- -------------
Weighted average common
shares - diluted 30,799,891 32,829,972
============= =============
FBL FINANCIAL GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(Dollars in thousands, except per share data)
December 31,
2000 1999
------------- -------------
Assets
Investments $2,870,659 $2,950,200
Cash and cash equivalents 3,099 6,482
Deferred policy acquisition costs 250,971 236,263
Other assets 251,910 213,358
Assets held in separate accounts 327,407 256,028
------------- -------------
Total assets $3,704,046 $3,662,331
============= =============
Liabilities
Policy liabilities and accruals $2,412,090 $2,416,444
Other policyholders' funds 265,528 257,660
Debt 49,943 51,694
Other liabilities 75,133 78,352
Liabilities related to separate
accounts 327,407 256,028
------------- -------------
Total liabilities 3,130,101 3,060,178
Minority interest in subsidiaries 97,142 97,145
Stockholders' equity 476,803 505,008
------------- -------------
Total liabilities and stockholders'
equity $3,704,046 $3,662,331
============= =============
Book Value Per Share $17.35 $15.94
============= =============
Book Value Per Share (excluding
SFAS 115 adjustment) $18.13 $17.46
============= =============
Common Shares Outstanding 27,308,110 31,500,222
============= =============
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