(Dollars in thousands, except per share data)
Operating income differs from the GAAP measure, net income attributable to FBL Financial Group, in that it excludes the impact of realized gains and losses on investments and the change in net unrealized gains and losses on derivatives. For further information on this non-GAAP financial measure, please refer to Note (1) and the reconciliation provided within this release.
“FBL Financial Group’s second quarter 2014 earnings results were outstanding with net income of $1.14 per share and operating income of $1.05 per share. These results build on the strong financial results in the first quarter and reflect positive momentum from serving the needs of the Farm Bureau niche market,” said James P. Brannen, Chief Executive Officer of FBL Financial Group, Inc. “For the remainder of 2014, we are directing our efforts to increase life insurance sales, manage expenses, leverage technology, maintain our strong capital position and support our exclusive Farm Bureau agents and FBL employees who act on our purpose to protect livelihoods and futures.”
In addition to net income, FBL Financial Group has consistently utilized operating income, a non-GAAP financial measure common in the life insurance industry, as a primary economic measure to evaluate its financial performance. Operating income equals net income attributable to FBL adjusted to eliminate the impact of realized gains and losses on investments and changes in net unrealized gains and losses on derivatives. FBL uses operating income, in addition to net income, to measure its 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. These fluctuations make it difficult to analyze core operating trends. This non-GAAP measure is used for goal setting, determining short-term incentive compensation and evaluating performance on a basis comparable to that used by many in the investment community. 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. A reconciliation is provided in the following table:
Book value per share excluding accumulated other comprehensive income is a non-GAAP financial measure. Accumulated other comprehensive income totaled $242.3 million at June30, 2014 and $119.1 million at December31, 2013. Since accumulated other comprehensive income fluctuates from quarter to quarter due to unrealized changes in the fair value of investments caused principally by changes in market interest rates, FBL believes this non-GAAP financial measure provides useful supplemental information.