FBL Financial Group Reports Third Quarter 2000 Results - Adjusted Operating Income Per Share Totals $0.36.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)--Oct. 25, 2000
Financial Highlights
(Dollars in thousands, except per share data)
----------------------------------------------------------------------
Three Months Ended
Sept. 30,
2000 1999
-------------------------------
Adjusted operating revenues $97,497 $96,316
Adjusted operating income 11,305 12,632
Net income 1,881 12,609
Earnings per common share (assuming
dilution):
Adjusted operating income 0.36 0.39
Net income 0.06 0.38
-------------------------------------- -------------------------------
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 $11,305,000 for the third quarter of 2000, compared to $12,632,000 for the third 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 $0.36 compared to $0.39 in the third 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. Net Income. Net income totaled $1,881,000 ($0.06 per diluted common share) for the quarter ended September September: see month. 30, 2000, compared to $12,609,000 ($0.38 per diluted common share) in the year ago quarter. In the third 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 $15,353,000, compared to realized losses of $68,000 in the third quarter of 1999. These realized losses are primarily from writedowns of investments that became other-than-temporarily impaired See assistive technology. . Approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $9,079,000 of the impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. losses were from four securities that were of investment grade when acquired. These securities include well-recognized names such as Heilig-Myers and Owens Corning Owens Corning Corporation is the world's largest manufacturer of fiberglass and related products. It was formed in 1935 as a partnership between two major American glassworks, Corning Glass Works and Owens-Illinois. The company was spun off as a separate entity November 1, 1938. , both of which recently filed for Chapter 11 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 . "Results for the third quarter were somewhat mixed. Adjusted operating revenues are up from the third quarter of last year, but have decreased from the record levels in the second quarter of this year. Adjusted operating income is also down from last year's third quarter, mainly because of increased 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. and less equity income. Additionally, we experienced significant and unusual realized losses, which resulted in a decrease in net income," said Bill Oddy, Chief Executive Officer. "Although results are not stellar, we still had a very busy and productive quarter, which included announcements of the sale of our disability income business, a $75 million stock repurchase Stock repurchase A firm's repurchase of outstanding shares of its common stock. and tender offer, and the signing of a definitive agreement for the purchase of the assets and liabilities of 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. Going forward, we will continue to focus on our defined growth strategy of internal growth within our traditional Farm Bureau marketplace and alliances and consolidations both within and outside of the Farm Bureau network." Product Revenues Up. Premiums and product charges for the third quarter of 2000, excluding accident and health premiums, increased five percent to $34,816,000 from $33,198,000 in the year ago quarter. Led by sales of variable products, interest sensitive product charges in the third quarter increased seven percent to $14,778,000, versus $13,835,000 in the year ago quarter.Traditional life insurance premiums increased three percent to $20,038,000 in the third quarter of 2000, compared to $19,363,000 in the third quarter of 1999. Accident and health premiums for the third quarter of 2000 reflect only two months of individual disability income premiums due to the reinsurance The contract made between an insurance company and a third party to protect the insurance company from losses. The contract provides for the third party to pay for the loss sustained by the insurance company when the company makes a payment on the original contract. of this business effective September 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 18 percent to $11,236,000 in the third quarter of 2000, from $9,489,000 in the year ago quarter. Total first year variable universal life premiums collected increased 23 percent to $4,054,000 compared to $3,309,000 in the third quarter of 1999. Total first year variable production increased 19 percent from the third quarter of 1999, but decreased compared to the record sales levels reached in the second quarter of 2000. Investment Income. Net investment income in the third quarter totaled $55,579,000 compared to $54,870,000 in the year ago quarter. This is a $206,000 increase from the second quarter of 2000 and a $709,000 increase from the third quarter of 1999. The annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. yield earned on average invested assets was 7.39 percent for the nine months ended September 30, 2000, compared to 7.69 percent for the same period of 1999. Benefits and Expenses. Benefits and expenses totaled $79,337,000 in the third quarter of 2000, compared to $77,306,000 in the year ago quarter. The third quarter 2000 amount reflects an increase in general operating expenses. Increases in interest sensitive death benefits were offset by decreases in traditional death benefits. Amortization of deferred acquisition costs decreased primarily due to the impact of realized losses on investments backing the related policyholder Policyholder An individual who owns an insurance policy. liabilities. Equity Income. Equity income, net of related income taxes, totaled $571,000 in the third quarter of 2000, compared to $1,123,000 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. Assets Total $3.7 Billion. Assets totaled $3.7 billion at both September 30, 2000 and December December: see month. 31, 1999. At September 30, 2000, 94 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 to $16.63 at September 30, 2000, from $15.94 at December 31, 1999. Book value per common share, excluding the impact of recording certain fixed maturity securities at market value, increased to $18.12 from $17.46 at December 31, 1999. Kansas Farm Bureau Life Acquisition Update. On September 25, 2000, FBL announced the signing of a definitive agreement providing for FBL's acquisition of the assets and liabilities of Kansas Farm Bureau Life Insurance Company. FBL and Kansas Farm Bureau Services are in the process of securing all necessary regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. approvals. The transaction remains on schedule to close in the first quarter of 2001. $75 Million Repurchase re·pur·chase tr.v. re·pur·chased, re·pur·chas·ing, re·pur·chas·es To buy (something) again. n. The act of buying something that one previously sold or owned. Noun 1. and Tender Offer Update. Also on September 25, 2000, FBL announced a $53 million share repurchase Share Repurchase A program by which a company buys back its own shares from the marketplace, reducing the number of outstanding shares. This is usually an indication that the company's management thinks the shares are undervalued. and $22 million tender offer for an aggregate of 3,750,000 of its Class A common shares at a fixed price of $20 per share. The tender offer expires tomorrow, October October: see month. 26, 2000, and is expected to be oversubscribed Refers to connecting more users to a system than can be fully supported if all of them were using it at the same time. Networks and servers are almost always designed with some amount of oversubscription, counting on the fact that everybody does not need the service simultaneously. . FBL expects to announce the proration Proration A situation during a corporate action in which the available cash or shares are not sufficient to satisfy the offers tendered by shareholders. Therefore, a proportion of both cash and shares is granted for each offer tendered. factor and commence payment for the shares purchased as soon as practicable practicable adj. when something can be done or performed. after the expiration date Expiration Date The day on which an options or futures contract is no longer valid and, therefore, ceases to exist. Notes: The expiration date for all listed stock options in the U.S. . Alliance Partner Update. Effective October 1, 2000, United Farm Family Life, an FBL variable alliance partner since 1998, began selling FBL's variable universal life insurance The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. products. Southern Farm Bureau Life, an FBL variable annuity partner since 1999, has decided to develop its own variable universal life insurance product. Progress on FBL's alliance with Modern Woodmen of America America [for Amerigo Vespucci], the lands of the Western Hemisphere—North America, Central (or Middle) America, and South America. The world map published in 1507 by Martin Waldseemüller is the first known cartographic use of the name. has slowed while Modern Woodmen investigates full service broker dealer alternatives. Conference Call. FBL management will hold a conference call with investors to discuss third quarter results. The call will be held tomorrow, October 26, 2000, at 10 a.m. Central Time and will be simulcast Simulcast is a portmanteau of "simultaneous broadcast", and refers to programs or events broadcast across more than one medium, or more than one service on the same medium, at the same time. , and a replay will be available, on FBL's web site at 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, the continued success of FBL's and its alliance partners' marketing efforts, obtaining regulatory approval for the Kansas transaction, and obtaining a full subscription to the tender offer. 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 (www.fblfinancial.com) 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 14 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 and consolidations with other Farm Bureau companies and (3) other alliances and consolidations.
- FINANCIAL INFORMATION FOLLOWS -
FBL FINANCIAL GROUP, INC.
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(Dollars in thousands, except per share data)
Three months ended
Sept. 30,
2000 1999
---------- -----------
REVENUES
Interest sensitive product charges $14,778 $13,835
Traditional life insurance premiums 20,038 19,363
Accident and health premiums 2,172 3,135
Net investment income 55,579 54,870
Realized losses on investments (15,353) (68)
Other income 4,876 5,072
---------- -----------
Total revenues 82,090 96,207
BENEFITS AND EXPENSES
Interest sensitive product
benefits 32,963 31,160
Traditional life insurance and
accident and health benefits 15,056 15,049
Increase in traditional life and
accident and health future policy
benefits 2,781 4,191
Distributions to participating
policyholders 6,045 5,827
Underwriting, acquisition and
insurance expenses 17,840 16,742
Interest expense 956 676
Other expenses 3,696 3,661
---------- -----------
Total benefits and expenses 79,337 77,306
---------- -----------
2,753 18,901
Income taxes (289) (6,209)
Minority interest in earnings of
subsidiaries:
Dividends on company-obligated
mandatorily redeemable preferred
stock of subsidiary trust (1,213) (1,213)
Other 59 7
Equity income, net of related
income taxes 571 1,123
---------- -----------
Net income $1,881 $12,609
========== ===========
Earnings per common share $0.06 $0.39
Earnings per common share - ========== ===========
assuming dilution $0.06 $0.38
========== ===========
Weighted average common shares 31,026,236 32,077,313
Effect of dilutive securities 376,333 621,745
---------- -----------
Weighted average common shares -
diluted 31,402,569 32,699,058
========== ===========
FBL FINANCIAL GROUP, INC.
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(Dollars in thousands, except per share data)
Nine months ended
Sept. 30,
2000 1999
---------- -----------
REVENUES
Interest sensitive product
charges $44,525 $41,208
Traditional life insurance
premiums 64,504 63,568
Accident and health premiums 9,310 9,897
Net investment income 165,635 169,700
Realized losses on investments (19,562) (796)
Other income 14,333 14,911
---------- -----------
Total revenues 278,745 298,488
BENEFITS AND EXPENSES
Interest sensitive product
benefits 96,938 91,380
Traditional life insurance and
accident and health benefits 47,584 44,844
Increase in traditional life
and accident and health future
policy benefits 14,871 14,420
Distributions to participating
policyholders 18,696 19,039
Underwriting, acquisition and
insurance expenses 54,901 53,584
Interest expense 2,727 1,737
Other expenses 10,787 11,370
---------- -----------
Total benefits and expenses 246,504 236,374
---------- -----------
32,241 62,114
Income taxes (9,570) (20,274)
Minority interest in earnings of
subsidiaries:
Dividends on company-obligated
mandatorily redeemable
preferred stock of subsidiary
trust (3,638) (3,638)
Other 17 (53)
Equity income, net of related
income taxes 10,630 3,013
---------- -----------
Net income $29,680 $41,162
========== ===========
Earnings per common share $0.95 $1.27
========== ===========
Earnings per common share -
assuming dilution $0.94 $1.24
========== ===========
Weighted average common shares 31,082,195 32,399,535
Effect of dilutive securities 401,808 639,962
---------- -----------
Weighted average common shares -
diluted 31,484,003 33,039,497
========== ===========
FBL FINANCIAL GROUP, INC.
RECONCILIATION OF NET INCOME TO ADJUSTED
OPERATING INCOME (Unaudited)
(Dollars in thousands, except per
share data)
Three months ended
Sept. 30,
2000 1999
---------- -----------
Net income $1,881 $12,609
Adjustment:
Realized losses, net of related
adjustments to deferred policy
acquisition costs, value of
insurance in force acquired,
unearned revenue reserve and
income taxes 9,424 23
---------- -----------
Adjusted operating income $11,305 $12,632
========== ===========
Adjusted operating earnings per
common share - assuming
dilution $0.36 $0.39
========== ===========
FBL FINANCIAL GROUP, INC.
RECONCILIATION OF NET INCOME TO ADJUSTED
OPERATING INCOME (Unaudited)
(Dollars in thousands, except per
share data)
Nine months ended
Sept. 30,
2000 1999
---------- -----------
Net income $29,680 $41,162
Adjustment:
Realized losses, net of
related adjustments to
deferred policy acquisition
costs, value of insurance in
force acquired, unearned
revenue reserve and income
taxes 11,998 413
---------- -----------
Adjusted operating income $41,678 $41,575
========== ===========
Adjusted operating earnings per
common share - assuming
dilution $1.32 $1.25
========== ===========
FBL FINANCIAL GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(Dollars in thousands, except per share data)
September 30, December 31,
2000 1999
---------- -----------
Assets
Investments $2,937,948 $2,950,200
Cash and cash equivalents 6,738 6,482
Deferred policy acquisition
costs 247,151 236,263
Other assets 234,292 213,358
Assets held in separate accounts 322,983 256,028
---------- -----------
Total assets $3,749,112 $3,662,331
========== ===========
Liabilities
Policy liabilities and accruals $2,400,115 $2,416,444
Other policyholders' funds 261,324 257,660
Debt 51,694 51,694
Other liabilities 96,735 78,352
Liabilities related to separate
accounts 322,983 256,028
---------- -----------
Total liabilities 3,132,851 3,060,178
Minority interest in
subsidiaries 97,190 97,145
Stockholders' equity 519,071 505,008
---------- -----------
Total liabilities and
stockholders' equity $3,749,112 $3,662,331
========== ===========
Book Value Per Share $16.63 $15.94
========== ===========
Book Value Per Share (excluding
SFAS 115 adjustment) $18.12 $17.46
========== ===========
Common Shares Outstanding 31,024,295 31,500,222
========== ===========
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