UNITED
STATES
|
|
SECURITIES
AND EXCHANGE COMMISSION
|
|
Washington,
D.C. 20549
|
|
FORM
10-Q
|
|
þ QUARTERLY REPORT PURSUANT TO
SECTION 13 OR 15(d) OF
|
|
THE
SECURITIES EXCHANGE ACT OF 1934
|
|
For
the Quarterly Period Ended March 31, 2008
|
|
o TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF
|
|
THE
SECURITIES EXCHANGE ACT OF 1934
|
|
For
the transition period from __________ to __________
|
|
Commission
File Number: 2-17039
|
|
NATIONAL
WESTERN LIFE INSURANCE COMPANY
|
|
(Exact
name of Registrant as specified in its charter)
|
|
COLORADO
|
84-0467208
|
(State
of Incorporation)
|
(I.R.S.
Employer Identification Number)
|
850
EAST ANDERSON LANE
|
|
AUSTIN,
TEXAS 78752-1602
|
(512)
836-1010
|
(Address
of Principal Executive Offices)
|
(Telephone
Number)
|
Indicate
by check mark whether the Registrant (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days: Yes þ No o
|
|
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, or a non-accelerated filer. See definition
of "accelerated filer and large accelerated file" in Rule 12b-2 of the
Exchange Act.
|
|
Large
accelerated filer o Accelerated
filer þ Non-accelerated
filer o
|
|
Indicate
by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes o No þ
|
|
As
of May 6, 2008, the number of shares of Registrant's common stock
outstanding was: Class A – 3,425,454 and Class B -
200,000.
|
Page
|
|
3
|
|
3
|
|
March
31, 2008 (Unaudited) and December 31, 2007
|
3
|
For
the Three Months Ended March 31, 2008 and 2007 (Unaudited)
|
5
|
For
the Three Months Ended March 31, 2008 and 2007 (Unaudited)
|
6
|
For
the Three Months Ended March 31, 2008 and 2007 (Unaudited)
|
7
|
For
the Three Months Ended March 31, 2008 and 2007 (Unaudited)
|
8
|
10
|
|
Financial
Condition and Results of Operations
|
21
|
46
|
|
46
|
|
46
|
|
46
|
|
46
|
|
47
|
|
47
|
|
48
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
||||||||
(In
thousands)
|
||||||||
(Unaudited)
|
||||||||
March
31,
|
December
31,
|
|||||||
ASSETS
|
2008
|
2007
|
||||||
Investments:
|
||||||||
Securities
held to maturity, at amortized cost
|
$ | 3,766,162 | 3,778,603 | |||||
Securities
available for sale, at fair value
|
1,911,583 | 1,900,714 | ||||||
Mortgage
loans, net of allowance for possible losses
|
||||||||
($3,568
and $3,567)
|
98,530 | 99,033 | ||||||
Policy
loans
|
82,032 | 83,772 | ||||||
Derivatives
|
8,069 | 25,907 | ||||||
Other
long-term investments
|
16,214 | 16,562 | ||||||
Total
Investments
|
5,882,590 | 5,904,591 | ||||||
Cash
and short-term investments
|
93,997 | 45,206 | ||||||
Deferred
policy acquisition costs
|
663,117 | 664,805 | ||||||
Deferred
sales inducements
|
104,937 | 104,029 | ||||||
Accrued
investment income
|
64,222 | 65,034 | ||||||
Federal
income tax receivable
|
6,099 | 10,010 | ||||||
Other
assets
|
46,112 | 41,651 | ||||||
$ | 6,861,074 | 6,835,326 |
NATIONAL
WESTERN LIFE INSURANCE COMPANY AND SUBSIDIARIES
|
||||||||
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
||||||||
(In
thousands, except share amounts)
|
||||||||
(Unaudited)
|
||||||||
March
31,
|
December
31,
|
|||||||
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
2008
|
2007
|
||||||
LIABILITIES:
|
||||||||
Future
policy benefits:
|
||||||||
Traditional
life and annuity contracts
|
$ | 138,723 | 138,672 | |||||
Universal
life and annuity contracts
|
5,423,348 | 5,441,871 | ||||||
Other
policyholder liabilities
|
130,685 | 120,400 | ||||||
Federal
income tax liability:
|
||||||||
Current
|
- | - | ||||||
Deferred
|
65,599 | 61,720 | ||||||
Other
liabilities
|
75,742 | 60,978 | ||||||
Total
liabilities
|
5,834,097 | 5,823,641 | ||||||
COMMITMENTS
AND CONTINGENCIES (Notes 5 and 8)
|
||||||||
STOCKHOLDERS’
EQUITY:
|
||||||||
Common
stock:
|
||||||||
Class
A - $1 par value; 7,500,000 shares authorized; 3,425,454
and
|
||||||||
3,422,324
issued and outstanding in 2008 and 2007
|
3,425 | 3,422 | ||||||
Class
B - $1 par value; 200,000 shares authorized, issued,
|
||||||||
and
outstanding in 2008 and 2007
|
200 | 200 | ||||||
Additional
paid-in capital
|
36,563 | 36,236 | ||||||
Accumulated
other comprehensive loss
|
(6,549 | ) | (7,065 | ) | ||||
Retained
earnings
|
993,338 | 978,892 | ||||||
Total
stockholders’ equity
|
1,026,977 | 1,011,685 | ||||||
$ | 6,861,074 | 6,835,326 |
NATIONAL
WESTERN LIFE INSURANCE COMPANY AND SUBSIDIARIES
|
||||||||
For
the Three Months Ended March 31, 2008 and 2007
|
||||||||
(Unaudited)
|
||||||||
(In
thousands, except per share amounts)
|
||||||||
2008
|
2007
|
|||||||
Premiums
and other revenue:
|
||||||||
Life
and annuity premiums
|
$ | 3,894 | 4,733 | |||||
Universal
life and annuity contract revenues
|
32,218 | 28,796 | ||||||
Net
investment income
|
59,430 | 77,026 | ||||||
Other
income
|
3,139 | 3,316 | ||||||
Realized
gains (losses) on investments
|
(44 | ) | 241 | |||||
Total
premiums and other revenue
|
98,637 | 114,112 | ||||||
Benefits
and expenses:
|
||||||||
Life
and other policy benefits
|
10,455 | 10,974 | ||||||
Amortization
of deferred policy acquisition costs
|
26,249 | 23,785 | ||||||
Universal
life and annuity contract interest
|
26,617 | 37,433 | ||||||
Other
operating expenses
|
13,430 | 14,116 | ||||||
Total
benefits and expenses
|
76,751 | 86,308 | ||||||
Earnings
before Federal income taxes
|
21,886 | 27,804 | ||||||
Provision
for Federal income taxes:
|
||||||||
Current
|
3,890 | 4,314 | ||||||
Deferred
|
3,550 | 4,818 | ||||||
Total
Federal income taxes
|
7,440 | 9,132 | ||||||
Net
earnings
|
$ | 14,446 | 18,672 | |||||
Basic
Earnings Per Share:
|
||||||||
Class
A
|
$ | 4.10 | 5.30 | |||||
Class
B
|
$ | 2.05 | 2.65 | |||||
Diluted
Earnings Per Share:
|
||||||||
Class
A
|
$ | 4.07 | 5.23 | |||||
Class
B
|
$ | 2.05 | 2.65 |
NATIONAL
WESTERN LIFE INSURANCE COMPANY AND SUBSIDIARIES
|
||||||||
For
the Three Months Ended March 31, 2008 and 2007
|
||||||||
(Unaudited)
|
||||||||
(In
thousands)
|
||||||||
2008
|
2007
|
|||||||
Net
earnings
|
$ | 14,446 | 18,672 | |||||
Other
comprehensive income, net of effects of
|
||||||||
deferred
costs and taxes:
|
||||||||
Unrealized
gains on securities:
|
||||||||
Net
unrealized holding gains arising during period
|
408 | 4,723 | ||||||
Reclassification
adjustment for net gains
|
||||||||
included
in net earnings
|
(36 | ) | (167 | ) | ||||
Amortization
of net unrealized gains related to transferred securities
|
16 | 20 | ||||||
Net
unrealized gains on securities
|
388 | 4,576 | ||||||
Foreign
currency translation adjustments
|
(181 | ) | (87 | ) | ||||
Benefit
plans:
|
||||||||
Amortization
of net prior service cost and net gain
|
309 | - | ||||||
Other
comprehensive gain
|
516 | 4,489 | ||||||
Comprehensive
income
|
$ | 14,962 | 23,161 |
NATIONAL
WESTERN LIFE INSURANCE COMPANY AND SUBSIDIARIES
|
||||||||
For
the Three Months Ended March 31, 2008 and 2007
|
||||||||
(Unaudited)
|
||||||||
(In
thousands)
|
||||||||
2008
|
2007
|
|||||||
Common
stock:
|
||||||||
Balance
at beginning of year
|
$ | 3,622 | 3,621 | |||||
Shares
exercised under stock option plan
|
3 | 1 | ||||||
Balance
at end of period
|
3,625 | 3,622 | ||||||
Additional
paid-in capital:
|
||||||||
Balance
at beginning of year
|
36,236 | 36,110 | ||||||
Shares
exercised under the stock option plan
|
327 | 126 | ||||||
Balance
at end of period
|
36,563 | 36,236 | ||||||
Accumulated
other comprehensive income:
|
||||||||
Unrealized
gains on securities:
|
||||||||
Balance
at beginning of year
|
1,184 | 3,148 | ||||||
Change
in unrealized gains during period
|
388 | 4,576 | ||||||
Balance
at end of period
|
1,572 | 7,724 | ||||||
Foreign
currency translation adjustments:
|
||||||||
Balance
at beginning of year
|
3,078 | 3,122 | ||||||
Change
in translation adjustments during period
|
(181 | ) | (87 | ) | ||||
Balance
at end of period
|
2,897 | 3,035 | ||||||
Benefit
plan liability adjustment:
|
||||||||
Balance
at beginning of year
|
(11,327 | ) | (10,001 | ) | ||||
Amortization
of net prior service cost and net gain
|
309 | - | ||||||
Balance
at end of period
|
(11,018 | ) | (10,001 | ) | ||||
Accumulated
other comprehensive income (loss) at end of period
|
(6,549 | ) | 758 | |||||
Retained
earnings:
|
||||||||
Balance
at beginning of year
|
978,892 | 896,984 | ||||||
Cumulative
effect of change in accounting principle, net of tax
|
- | (2,195 | ) | |||||
Net
earnings
|
14,446 | 18,672 | ||||||
Balance
at end of period
|
993,338 | 913,461 | ||||||
Total
stockholders' equity
|
$ | 1,026,977 | 954,077 |
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
||||||||
For
the Three Months Ended March 31, 2008 and 2007
|
||||||||
(Unaudited)
|
||||||||
(In
thousands)
|
||||||||
2008
|
2007
|
|||||||
Cash
flows from operating activities:
|
||||||||
Net
earnings
|
$ | 14,446 | 18,672 | |||||
Adjustments
to reconcile net earnings to net cash
|
||||||||
from
operating activities:
|
||||||||
Universal
life and annuity contract interest
|
26,617 | 37,433 | ||||||
Surrender
charges and other policy revenues
|
(9,568 | ) | (8,600 | ) | ||||
Realized
(gains) losses on investments
|
44 | (241 | ) | |||||
Accrual
and amortization of investment income
|
(1,300 | ) | (996 | ) | ||||
Depreciation
and amortization
|
272 | 356 | ||||||
Decrease
in value of derivatives
|
20,480 | 8,590 | ||||||
Increase
in deferred policy acquisition and sales inducement costs
|
(1,535 | ) | (1,290 | ) | ||||
Decrease
in accrued investment income
|
812 | 610 | ||||||
(Increase)
decrease in other assets
|
(2,773 | ) | 5,580 | |||||
Increase
in liabilities for future policy benefits
|
52 | 784 | ||||||
Increase
in other policyholder liabilities
|
10,285 | 6,173 | ||||||
Increase
in Federal income tax liability
|
8,100 | 7,788 | ||||||
Decrease
in other liabilities
|
(814 | ) | (10,547 | ) | ||||
Other
|
1,810 | (1,742 | ) | |||||
Net
cash provided by operating activities
|
66,928 | 62,570 | ||||||
Cash
flows from investing activities:
|
||||||||
Proceeds
from sales of:
|
||||||||
Securities
held to maturity
|
- | 5,175 | ||||||
Securities
available for sale
|
124 | 234 | ||||||
Other
investments
|
197 | 171 | ||||||
Proceeds
from maturities and redemptions of:
|
||||||||
Securities
held to maturity
|
248,009 | 28,571 | ||||||
Securities
available for sale
|
78,696 | 78,592 | ||||||
Derivatives
|
8,964 | 8,570 | ||||||
Purchases
of:
|
||||||||
Securities
held to maturity
|
(234,856 | ) | (71,837 | ) | ||||
Securities
available for sale
|
(67,636 | ) | (87,912 | ) | ||||
Other
investments
|
(11,810 | ) | (9,576 | ) | ||||
Principal
payments on mortgage loans
|
1,308 | 13,912 | ||||||
Cost
of mortgage loans acquired
|
(777 | ) | (16,066 | ) | ||||
Decrease
in policy loans
|
(1,546 | ) | (613 | ) | ||||
Other
|
(1,893 | ) | (938 | ) | ||||
Net
cash provided by (used in) investing activities
|
18,780 | (51,717 | ) |
NATIONAL
WESTERN LIFE INSURANCE COMPANY AND SUBSIDIARIES
|
||||||||
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS, CONTINUED
|
||||||||
For
the Three Months Ended March 31, 2008 and 2007
|
||||||||
(Unaudited)
|
||||||||
(In
thousands)
|
||||||||
2008
|
2007
|
|||||||
Cash
flows from financing activities:
|
||||||||
Deposits
to account balances for universal life
|
||||||||
and
annuity contracts
|
$ | 115,410 | 111,937 | |||||
Return
of account balances on universal life
|
||||||||
and
annuity contracts
|
(152,553 | ) | (137,622 | ) | ||||
Issuance
of common stock under stock option plan
|
330 | 127 | ||||||
Net
cash used in financing activities
|
(36,813 | ) | (25,558 | ) | ||||
Effect
of foreign exchange
|
(104 | ) | (156 | ) | ||||
Net
increase (decrease) in cash and short-term investments
|
48,791 | (14,861 | ) | |||||
Cash
and short-term investments at beginning of year
|
45,206 | 49,901 | ||||||
Cash
and short-term investments at end of period
|
$ | 93,997 | 35,040 |
SUPPLEMENTAL
DISCLOSURES OF CASH FLOW INFORMATION:
|
||||||||
Cash
paid during the three month period for:
|
||||||||
Interest
|
$ | 10 | 10 | |||||
Income
taxes
|
- | 1,254 |
Amounts
|
||||
(In
thousands)
|
||||
Write-off
of deferred acquisition cost
|
$ | 3,321 | ||
Adjustment
to deferred annuity revenue
|
56 | |||
3,377 | ||||
Federal
income tax
|
(1,182 | ) | ||
Cumulative
effect of change in accounting for
|
||||
internal
replacements and investment contracts
|
$ | 2,195 |
Three
Months Ended March 31,
|
||||||||||||||||
2008
|
2007
|
|||||||||||||||
Class
A
|
Class
B
|
Class
A
|
Class
B
|
|||||||||||||
(In
thousands except per share amounts)
|
||||||||||||||||
Numerator
for Basic and
|
||||||||||||||||
Diluted
Earnings Per Share:
|
||||||||||||||||
Net
income
|
$ | 14,446 | 18,672 | |||||||||||||
Dividends
– Class A shares
|
- | - | ||||||||||||||
Dividends
– Class B shares
|
- | - | ||||||||||||||
Undistributed
income
|
$ | 14,446 | 18,672 | |||||||||||||
Allocation
of net income:
|
||||||||||||||||
Dividends
|
$ | - | - | - | - | |||||||||||
Allocation
of undistributed income
|
14,036 | 410 | 18,142 | 530 | ||||||||||||
Net
income
|
$ | 14,036 | 410 | 18,142 | 530 | |||||||||||
Denominator:
|
||||||||||||||||
Basic
earnings per share -
|
||||||||||||||||
weighted-average
shares
|
3,423 | 200 | 3,421 | 200 | ||||||||||||
Effect
of dilutive
|
||||||||||||||||
stock
options
|
24 | - | 48 | - | ||||||||||||
Diluted
earnings per share -
|
||||||||||||||||
adjusted
weighted-average
|
||||||||||||||||
shares
for assumed
|
||||||||||||||||
conversions
|
3,447 | 200 | 3,469 | 200 | ||||||||||||
Basic
Earnings Per Share
|
$ | 4.10 | 2.05 | 5.30 | 2.65 | |||||||||||
Diluted
Earnings Per Share
|
$ | 4.07 | 2.05 | 5.23 | 2.65 |
Three
Months Ended March 31,
|
||||||||
2008
|
2007
|
|||||||
(In
thousands)
|
||||||||
Service
cost
|
$ | 180 | 173 | |||||
Interest
cost
|
272 | 255 | ||||||
Expected
return on plan assets
|
(275 | ) | (237 | ) | ||||
Amortization
of prior service cost
|
1 | 1 | ||||||
Amortization
of net loss
|
80 | 88 | ||||||
Net
periodic benefit cost
|
$ | 258 | 280 |
Three
Months Ended March 31,
|
||||||||
2008
|
2007
|
|||||||
(In
thousands)
|
||||||||
Service
cost
|
$ | 193 | 407 | |||||
Interest
cost
|
241 | 177 | ||||||
Amortization
of prior service cost
|
260 | 260 | ||||||
Amortization
of net loss
|
101 | 46 | ||||||
Net
periodic benefit cost
|
$ | 795 | 890 |
Three
Months Ended March 31,
|
||||||||
2008
|
2007
|
|||||||
(In
thousands)
|
||||||||
Interest
cost
|
$ | 35 | 29 | |||||
Amortization
of net loss
|
7 | - | ||||||
Amortization
of prior service cost
|
26 | 26 | ||||||
Net
periodic benefit cost
|
$ | 68 | 55 |
Selected Segment
Information:
|
||||||||||||||||||||
Domestic
|
International
|
|||||||||||||||||||
Life
|
Life
|
All
|
||||||||||||||||||
Insurance
|
Insurance
|
Annuities
|
Others
|
Total
|
||||||||||||||||
(In
thousands)
|
||||||||||||||||||||
March
31, 2008:
|
||||||||||||||||||||
Selected
Balance Sheet Items:
|
||||||||||||||||||||
Deferred
policy acquisition
|
||||||||||||||||||||
costs
and sales inducements
|
$ | 61,709 | 206,193 | 500,152 | - | 768,054 | ||||||||||||||
Total
segment assets
|
403,186 | 812,575 | 5,489,342 | 123,456 | 6,828,559 | |||||||||||||||
Future
policy benefits
|
320,225 | 565,910 | 4,675,936 | - | 5,562,071 | |||||||||||||||
Other
policyholder liabilities
|
11,502 | 18,608 | 100,575 | - | 130,685 | |||||||||||||||
Three
Months Ended
|
||||||||||||||||||||
March
31, 2008:
|
||||||||||||||||||||
Condensed
Income Statements:
|
||||||||||||||||||||
Premiums
and contract
|
||||||||||||||||||||
revenues
|
$ | 6,619 | 23,485 | 6,008 | - | 36,112 | ||||||||||||||
Net
investment income
|
5,161 | 3,039 | 50,297 | 933 | 59,430 | |||||||||||||||
Other
income
|
6 | 12 | 38 | 3,083 | 3,139 | |||||||||||||||
Total
revenues
|
11,786 | 26,536 | 56,343 | 4,016 | 98,681 | |||||||||||||||
Policy
benefits
|
4,205 | 5,313 | 937 | - | 10,455 | |||||||||||||||
Amortization
of deferred
|
||||||||||||||||||||
acquisition
costs
|
2,287 | 8,791 | 15,171 | - | 26,249 | |||||||||||||||
Universal
life and investment
|
||||||||||||||||||||
annuity
contract interest
|
2,355 | 2,694 | 21,568 | - | 26,617 | |||||||||||||||
Other
operating expenses
|
2,974 | 3,872 | 3,806 | 2,778 | 13,430 | |||||||||||||||
Federal
income taxes
|
(12 | ) | 1,994 | 5,052 | 421 | 7,455 | ||||||||||||||
Total
expenses
|
11,809 | 22,664 | 46,534 | 3,199 | 84,206 | |||||||||||||||
Segment
earnings (losses)
|
$ | (23 | ) | 3,872 | 9,809 | 817 | 14,475 |
Selected Segment
Information:
|
||||||||||||||||||||
Domestic
|
International
|
|||||||||||||||||||
Life
|
Life
|
All
|
||||||||||||||||||
Insurance
|
Insurance
|
Annuities
|
Others
|
Total
|
||||||||||||||||
(In
thousands)
|
||||||||||||||||||||
March
31, 2007:
|
||||||||||||||||||||
Selected
Balance Sheet Items:
|
||||||||||||||||||||
Deferred
policy acquisition
|
||||||||||||||||||||
costs
and sales inducements
|
$ | 52,491 | 180,409 | 499,369 | - | 732,269 | ||||||||||||||
Total
segment assets
|
388,103 | 723,250 | 5,487,541 | 103,794 | 6,702,688 | |||||||||||||||
Future
policy benefits
|
316,880 | 509,015 | 4,713,294 | - | 5,539,189 | |||||||||||||||
Other
policyholder liabilities
|
10,812 | 18,605 | 89,205 | - | 118,622 | |||||||||||||||
Three
Months Ended
|
||||||||||||||||||||
March
31, 2007:
|
||||||||||||||||||||
Condensed
Income Statements:
|
||||||||||||||||||||
Premiums
and contract
|
||||||||||||||||||||
revenues
|
$ | 6,333 | 21,671 | 5,525 | - | 33,529 | ||||||||||||||
Net
investment income
|
4,678 | 5,762 | 65,753 | 833 | 77,026 | |||||||||||||||
Other
income
|
14 | 45 | 228 | 3,029 | 3,316 | |||||||||||||||
Total
revenues
|
11,025 | 27,478 | 71,506 | 3,862 | 113,871 | |||||||||||||||
Policy
benefits
|
6,141 | 3,677 | 1,156 | - | 10,974 | |||||||||||||||
Amortization
of deferred
|
||||||||||||||||||||
acquisition
costs
|
1,864 | 8,163 | 13,758 | - | 23,785 | |||||||||||||||
Universal
life and investment
|
||||||||||||||||||||
annuity
contract interest
|
2,320 | 5,252 | 29,861 | - | 37,433 | |||||||||||||||
Other
operating expenses
|
2,712 | 4,310 | 4,481 | 2,613 | 14,116 | |||||||||||||||
Federal
income taxes
|
(660 | ) | 1,995 | 7,303 | 410 | 9,048 | ||||||||||||||
Total
expenses
|
12,377 | 23,397 | 56,559 | 3,023 | 95,356 | |||||||||||||||
Segment
earnings (losses)
|
$ | (1,352 | ) | 4,081 | 14,947 | 839 | 18,515 |
Three
Months Ended March 31,
|
||||||||
2008
|
2007
|
|||||||
(In
thousands)
|
||||||||
Premiums and Other
Revenue:
|
||||||||
Premiums
and contract revenues
|
$ | 36,112 | 33,529 | |||||
Net
investment income
|
59,430 | 77,026 | ||||||
Other
income
|
3,139 | 3,316 | ||||||
Realized
gains (losses) on investments
|
(44 | ) | 241 | |||||
Total
consolidated premiums and other revenue
|
$ | 98,637 | 114,112 |
Three
Months Ended March 31,
|
||||||||
2008
|
2007
|
|||||||
(In
thousands)
|
||||||||
Federal Income
Taxes:
|
||||||||
Total
segment Federal income taxes
|
$ | 7,455 | 9,048 | |||||
Taxes
on realized gains (losses) on investments
|
(15 | ) | 84 | |||||
Total
consolidated Federal income taxes
|
$ | 7,440 | 9,132 |
Three
Months Ended March 31,
|
||||||||
2008
|
2007
|
|||||||
(In
thousands)
|
||||||||
Net
Earnings:
|
||||||||
Total
segment earnings
|
$ | 14,475 | 18,515 | |||||
Realized
gains (losses) on investments, net of taxes
|
(29 | ) | 157 | |||||
Total
consolidated net earnings
|
$ | 14,446 | 18,672 |
March
31,
|
||||||||
2008
|
2007
|
|||||||
(In
thousands)
|
||||||||
Assets:
|
||||||||
Total
segment assets
|
$ | 6,828,559 | 6,702,688 | |||||
Other
unallocated assets
|
32,515 | 24,790 | ||||||
Total
consolidated assets
|
$ | 6,861,074 | 6,727,478 |
Options
Outstanding
|
||||||||||||
Weighted-
|
||||||||||||
Shares
|
Average
|
|||||||||||
Available
|
Exercise
|
|||||||||||
For
Grant
|
Shares
|
Price
|
||||||||||
Balance
at January 1, 2008
|
27,668 | 94,984 | $ | 128.47 | ||||||||
Stock
Options:
|
||||||||||||
Exercised
|
- | (15,580 | ) | 99.43 | ||||||||
Forfeited
|
- | - | - | |||||||||
Expired
|
- | - | - | |||||||||
Balance
at March 31, 2008
|
27,668 | 79,404 | $ | 134.16 |
Options
Outstanding
|
||||||||||||
Weighted-
|
||||||||||||
Average
|
||||||||||||
Number
|
Remaining
|
Options
|
||||||||||
Outstanding
|
Contractual
Life
|
Exercisable
|
||||||||||
Exercise
prices:
|
||||||||||||
$
112.38
|
3,800 | 0.2 years | 3,800 | |||||||||
92.13
|
12,604 | 3.1 years | 5,736 | |||||||||
95.00
|
7,000 | 3.2 years | 7,000 | |||||||||
150.00
|
56,000 | 6.0 years | 12,600 | |||||||||
Totals
|
79,404 | 29,136 | ||||||||||
Aggregate
intrinsic value
|
||||||||||||
(in
thousands)
|
$ | 6,561 | $ | 2,806 |
2008
|
2007
|
|||||||
Expected
term of options
|
1
to 5 years
|
2
to 6 years
|
||||||
Expected
volatility:
|
||||||||
Range
|
21.59%
to 30.17%
|
15.63%
to 23.72%
|
||||||
Weighted-average
|
24.07% | 19.36% | ||||||
Expected
dividends
|
$0.36 | - | ||||||
Risk-free
rate:
|
||||||||
Range
|
1.61%
to 3.06%
|
4.57%
to 4.95%
|
||||||
Weighted-average
|
2.31% | 4.67% |
March
31, 2008
|
||||||||||||||||
Description
|
Total
|
Level
1
|
Level
2
|
Level
3
|
||||||||||||
(In
thousands)
|
||||||||||||||||
Debt
securities, available for sale
|
$ | 1,892,223 | - | 1,890,607 | 1,616 | |||||||||||
Equity
securities, available for sale
|
19,360 | 267 | 11,903 | 7,190 | ||||||||||||
Derivatives
|
8,069 | - | 8,069 | - | ||||||||||||
Total
assets
|
$ | 1,919,652 | 267 | 1,910,579 | 8,806 | |||||||||||
Policyholder
account balances (a)
|
$ | 18,867 | - | 18,867 | - | |||||||||||
Other
liabilities (b)
|
6,387 | - | - | 6,387 | ||||||||||||
Total
liabilities
|
$ | 25,254 | - | 18,867 | 6,387 |
Debt
|
Equity
|
|||||||||||||||
Securities,
|
Securities,
|
|||||||||||||||
Available
|
Available
|
Total
|
Other
|
|||||||||||||
For
Sale
|
For
Sale
|
Assets
|
Liabilities
|
|||||||||||||
(In
thousands)
|
||||||||||||||||
Beginning
balance, January 1, 2008
|
$ | 1,618 | 7,147 | 8,765 | 7,712 | |||||||||||
Total
realized and unrealized gains (losses):
|
||||||||||||||||
Included
in net income
|
- | - | - | (58 | ) | |||||||||||
Included
in other comprehensive income (loss)
|
- | 43 | 43 | - | ||||||||||||
Purchases,
sales, issuances and settlements, net
|
(2 | ) | - | (2 | ) | (1,267 | ) | |||||||||
Transfers
into (out of) Level 3
|
- | - | - | - | ||||||||||||
Ending
balance, March 31, 2008
|
$ | 1,616 | 7,190 | 8,806 | 6,387 | |||||||||||
Amount
of total gains (losses) for the period
|
||||||||||||||||
included
in net income attributable to the change
|
||||||||||||||||
in
unrealized gains (losses) relating to assets still
|
||||||||||||||||
held
as of March 31, 2008
|
$ | - | - | - | (58 | ) |