Exhibit 99.1
FBL Financial Group Announces 2004 Earnings Guidance
and Proposed Board Restructuring
WEST DES MOINES, Iowa--(BUSINESS WIRE)--Dec. 18, 2003--FBL
Financial Group, Inc. (NYSE:FFG) today announced its earnings guidance
for 2004, two new Class B directors, a proposed board restructuring
and the finalization of a line of credit.
Earnings Guidance. While subject to volatility resulting from a
number of factors, including mortality experience and investment
results, FBL expects full year 2004 net income and operating income to
be within a range of $2.00 to $2.10 per common share. Earnings
guidance for 2004 is less than FBL's current 2003 operating income(a)
guidance of $2.15 to $2.20 per common share due to the following
reasons:
-- Following American Equity Investment Life Holding Company's
recent initial public offering, FBL will no longer be
accounting for its ownership interest in American Equity under
the equity method of accounting. Instead, the shares will be
marked to market in accordance with FAS 115. For the first
nine months of 2003, FBL earned $0.11 per share of equity
income from its investment in American Equity, and an
additional $0.05 per share is expected to be earned from this
investment in the fourth quarter of 2003.
-- Due to the market interest rate environment, FBL expects less
investment prepayment activity in 2004. For the first nine
months of 2003, FBL earned $0.14 per share of fee income from
bond calls and mortgage loan prepayments and the impact of
increasing prepayment speeds on mortgage and asset-backed
securities. FBL's 2004 earnings guidance assumes no fee income
from investment prepayments as these amounts can not be
predicted with any reliability.
-- FBL's subsidiary, EquiTrust Life Insurance Company, is
broadening its distribution and introducing the EquiTrust
brand in new markets, distribution sources and territories. As
a result, investments in infrastructure and other start-up
expenses of approximately $0.09-$0.11 per share are expected
in 2004.
-- The effect of these items is partially offset by the positive
impact of continued growth in the volume of business in force.
FBL reaffirms its fourth quarter 2003 net income and operating
income guidance of $0.49 to $0.54 per share.
"We're pleased with our very strong results year-to-date in 2003
and are looking forward to further implementing our strategy in 2004,"
said Bill Oddy, Chief Executive Officer. "We are continuing to focus
on our proven growth strategies of internal growth within our core
Farm Bureau distribution system, alliances and other distribution
channels, and consolidations."
(a) In addition to net income, FBL Financial Group has
consistently utilized operating income, a non-GAAP financial measure
commonly used in the life insurance industry, as a primary economic
measure to evaluate its financial performance. Operating income equals
net income adjusted to eliminate the impact of realized gains and
losses on investments. Because realized gains and losses on
investments may fluctuate greatly from quarter to quarter, FBL
believes a measure excluding their impact is useful in analyzing core
operating trends. FBL believes the combined presentation and
evaluation of operating income, together with net income, provides
information that may enhance an investor's understanding of FBL's
underlying results and profitability.
New Class B Directors. William C. Bruins, 56, newly elected
President of the Wisconsin Farm Bureau Federation and Kevin G. Rogers,
43, newly elected President of the Arizona Farm Bureau Federation,
were named as FBL Class B Directors. They succeed Howard D. Poulson
and Kenny J. Evans. According to FBL's Class B Stockholders'
Agreement, the Class B directors include the presidents of the 15 Farm
Bureau federations which own FBL's Class B common stock, as well as
the Chief Executive Officer and two designees of the Chairman.
Proposed Board Restructuring. FBL Financial Group's Board of
Directors yesterday agreed to restructure FBL's board. FBL's board is
currently comprised of 18 Class B directors and three Class A
directors for a total of 21 members. The board unanimously approved
reducing the size of the board to 13 directors, of which a majority
would be independent. All directors will be elected annually. The
restructuring is subject to the approval by the Class B stockholders
of certain amendments to the Class B Stockholders' Agreement. The
board restructuring is expected to be effective when and if
shareholders approve a change to FBL's articles of incorporation and
bylaws at FBL's next annual meeting of shareholders, to be held in May
2004.
According to John Walker, Board member and Chairperson of FBL's
Corporate Governance Task Force, "While FBL is able to take the
controlled company exemption provided by the NYSE for companies with a
majority owner, the Board decided not to claim this exemption in order
to provide better corporate governance for FBL shareholders."
Line of Credit. FBL Financial Group has entered into a $60 million
line of credit arrangement with LaSalle Bank and Bankers Trust
Company, N.A. Proceeds from this line of credit will be used for
capital contributions to FBL's subsidiaries Farm Bureau Life Insurance
Company and EquiTrust Life Insurance Company, the upcoming partial
redemption of FBL's Series C preferred stock, and general corporate
purposes.
The statements in this release concerning FBL's prospects for the
future are forward-looking statements that involve certain risks and
uncertainties, including persistency, investment experience and the
approval of the proposed board restructuring by FBL shareholders.
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 are 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. In addition, FBL manages all aspects
of three Farm Bureau affiliated property-casualty insurance companies
for a management fee. FBL's three-pronged growth strategy includes (1)
internal growth within its traditional Farm Bureau distribution
network, (2) alliances and other distribution channels and (3)
consolidations.
CONTACT: FBL Financial Group, Inc., West Des Moines
Jim Noyce, 515-225-5599
jnoyce@fbfs.com