##### Table of Contents



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, 2009
 or
 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: 000-16509
 CITIZENS, INC.
 (Exact name of registrant as specified in its charter)
 Colorado
    
    84-0755371(State or other jurisdiction of 
incorporation or organization)
    
    (I.R.S. Employer
Identification No.)400 East Anderson Lane, Austin, Texas
    
    78752(Address of principal executive offices)
    
    (Zip Code)
 (Registrants telephone number, including area code)
   (Former name, former address and former fiscal year, if changed since last report.)
 þ o
 o
Yes o No
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
    
    Smaller reporting company o
 o þ




---



##### 



TABLE OF CONTENTS
 PageNumberPart I. Financial InformationItem 1. Financial StatementsConsolidated Statements of Financial Position, March 31, 2009, (Unaudited) and December 31, 2008
    
    
    2Consolidated Statements of Operations, Three Months Ended March 31, 2009 and 2008 (Unaudited)
    
    
    4Consolidated Statements of Cash Flows, Three Months Ended March 31, 2009 and 2008 (Unaudited)
    
    
    5Notes to Consolidated Financial Statements
    
    
    7Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    15Item 3. Quantitative and Qualitative Disclosures about Market Risk
    
    
    28Item 4. Controls and Procedures
    
    
    29Part II. Other InformationItem 1. Legal Proceedings
    
    
    29Item 1A. Risk Factors
    
    
    30Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    30Item 3. Defaults Upon Senior Securities
    
    
    30Item 4. Submission of Matters to a Vote of Security Holders
    
    
    30Item 5. Other Information
    
    
    30Item 6. Exhibits
    
    
    31Exhibit 21Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2
   1




---



##### Table of Contents



PART I. FINANCIAL INFORMATION
 
 Item 1. FINANCIAL STATEMENTS
 CITIZENS, INC. AND CONSOLIDATED SUBSIDIARIES
 
 Consolidated Statements of Financial Position
 (In thousands)
 March 31,
    
    
    December 31,2009
    
    
    2008(Unaudited)AssetsInvestments:Fixed maturities available-for-sale, at fair value
(cost: $517,580 and $494,034 in 2009 and 2008, respectively)
    
    $
    506,974
    
    
    
    485,155Equity securities available-for-sale, at fair value
(cost: $42,450 and $42,908 in 2009 and 2008, respectively)
    
    
    38,421
    
    
    
    43,000Mortgage loans on real estate
    
    
    331
    
    
    
    339Policy loans
    
    
    30,094
    
    
    
    28,955Real estate held for sale
    
    
    4,144
    
    
    
    4,156Real estate held for investment
(less $306 and $283
accumulated depreciation
in 2009 and 2008,
respectively)
    
    
    4,694
    
    
    
    4,717Other long-term investments
    
    
    187
    
    
    
    680Short-term investments
    
    
    3,567
    
    
    
    2,250Total investments
    
    
    588,412
    
    
    
    569,252Cash and cash equivalents
    
    
    59,916
    
    
    
    63,792Accrued investment income
    
    
    6,588
    
    
    
    7,423Reinsurance recoverable
    
    
    12,706
    
    
    
    13,241Deferred policy acquisition costs
    
    
    110,479
    
    
    
    109,114Cost of customer relationships acquired
    
    
    37,078
    
    
    
    33,805Goodwill
    
    
    17,410
    
    
    
    15,687Other intangible assets
    
    
    1,102
    
    
    
    1,073Federal income tax receivable
    
    
    1,085
    
    
    
    2,090Property and equipment, net
    
    
    6,304
    
    
    
    6,466Due premiums, net (less $2,204 and $2,217 allowance for doubtful
accounts in 2009 and 2008, respectively)
    
    
    8,819
    
    
    
    8,958Prepaid expenses
    
    
    2,179
    
    
    
    454Other assets
    
    
    1,226
    
    
    
    921Total assets
    
    $
    853,304
    
    
    
    832,276
 See accompanying notes to consolidated financial statements.
    
    (Continued)
  2




---



##### Table of Contents



CITIZENS, INC. AND CONSOLIDATED SUBSIDIARIES
 Consolidated Statements of Financial Position, Continued
(In thousands, except share amounts)
 March 31,
    
    
    December 31,2009
    
    
    2008(Unaudited)Liabilities and Stockholders EquityLiabilities:Policy liabilities:Future policy benefit reserves:Life insurance
    
    $
    560,427
    
    
    
    547,621Annuities
    
    
    35,069
    
    
    
    34,025Accident and health
    
    
    7,142
    
    
    
    7,442Dividend accumulations
    
    
    5,442
    
    
    
    4,795Premiums paid in advance
    
    
    19,489
    
    
    
    18,566Policy claims payable
    
    
    9,444
    
    
    
    9,318Other policyholders funds
    
    
    8,316
    
    
    
    7,929Total policy liabilities
    
    
    645,329
    
    
    
    629,696Commissions payable
    
    
    1,676
    
    
    
    2,350Deferred federal and state income tax
    
    
    3,626
    
    
    
    3,951Payable for securities in process of settlement
    
    
    1,925
    
    
    
    Warrants outstanding
    
    
    2,868
    
    
    
    4,973Other liabilities
    
    
    10,923
    
    
    
    12,052Total liabilities
    
    
    666,347
    
    
    
    653,022Commitments and contingencies (Note 7)Cumulative convertible preferred stock  Series A
(Series A-1 - $1,000 stated value per share, 6,250 shares authorized, issued and outstanding in
2009 and 2008; Series A-2 - $935 stated value per share, 5,000 shares authorized, 4,014 issued and
outstanding in 2009 and 2008)
    
    
    8,786
    
    
    
    7,713Stockholders Equity:Common stock:Class A, no par value, 100,000,000 shares authorized,
50,100,107 shares issued in 2009 and
48,781,753 shares issued in 2008, including
shares in treasury of 3,135,738 in 2009 and 2008
    
    
    247,918
    
    
    
    240,511Class B, no par value, 2,000,000 shares authorized, 1,001,714
shares issued and outstanding in 2009 and 2008
    
    
    3,184
    
    
    
    3,184Retained deficit
    
    
    (51,055
    )
    
    
    (55,432
    )Accumulated other comprehensive loss:Unrealized losses on securities, net of tax
    
    
    (10,865
    )
    
    
    (5,711
    )189,182
    
    
    
    182,552Treasury stock, at cost
    
    
    (11,011
    )
    
    
    (11,011
    )Total stockholders equity
    
    
    178,171
    
    
    
    171,541Total liabilities and stockholders equity
    
    $
    853,304
    
    
    
    832,276
   3




---



##### Table of Contents



CITIZENS, INC. AND CONSOLIDATED SUBSIDIARIES
 
 Consolidated Statements of Operations
 Three Months Ended March 31,
 (In thousands, except per share amounts)
 (Unaudited)
 2009
    
    
    2008Revenues:Premiums:Life insurance
    
    $
    32,683
    
    
    
    30,850Accident and health insurance
    
    
    396
    
    
    
    384Property insurance
    
    
    1,148
    
    
    
    1,436Net investment income
    
    
    7,742
    
    
    
    7,464Realized gains, net
    
    
    301
    
    
    
    16Decrease (increase) in fair value of warrants
    
    
    2,105
    
    
    
    (503
    )Other income
    
    
    283
    
    
    
    279Total revenues
    
    
    44,658
    
    
    
    39,926Benefits and expenses:Insurance benefits paid or provided:Claims and surrenders
    
    
    14,807
    
    
    
    13,078Increase in future policy benefit reserves
    
    
    7,758
    
    
    
    6,997Policyholders dividends
    
    
    1,462
    
    
    
    1,377Total insurance benefits paid or provided
    
    
    24,027
    
    
    
    21,452Commissions
    
    
    8,035
    
    
    
    7,711Other underwriting, acquisition and insurance expenses
    
    
    7,309
    
    
    
    6,911Capitalization of deferred policy acquisition costs
    
    
    (5,057
    )
    
    
    (4,855
    )Amortization of deferred policy acquisition costs
    
    
    3,692
    
    
    
    3,562Amortization of cost of customer relationships
acquired and other intangibles
    
    
    866
    
    
    
    764Total benefits and expenses
    
    
    38,872
    
    
    
    35,545Income before Federal income tax
    
    
    5,786
    
    
    
    4,381Federal income tax expense
    
    
    1,409
    
    
    
    1,646Net income
    
    $
    4,377
    
    
    
    2,735Net income applicable to common stockholders
    
    $
    3,199
    
    
    
    2,223Per Share Amounts:Basic earnings per share of Class A common stock
    
    $
    0.07
    
    
    
    0.05Basic earnings per share of Class B common stock
    
    $
    0.03
    
    
    
    0.03Diluted earnings per share of Class A common stock
    
    $
    0.03
    
    
    
    0.05Diluted earnings per share of Class B common stock
    
    $
    0.01
    
    
    
    0.03
   4




---



##### Table of Contents



CITIZENS, INC. AND CONSOLIDATED SUBSIDIARIES
 
 Consolidated Statements of Cash Flows
 Three Months Ended March 31,
 (In thousands)
 (Unaudited)
 2009
    
    
    2008Cash flows from operating activities:Net income
    
    $
    4,377
    
    
    
    2,735Adjustments to reconcile net income to net cash
provided by operating activities:Realized gains on sale of investments
and other assets
    
    
    (301
    )
    
    
    (16
    )Net deferred policy acquisition costs
    
    
    (1,365
    )
    
    
    (1,293
    )Amortization of cost of customer relationships
acquired and other intangibles
    
    
    866
    
    
    
    764Increase (decrease) in fair value of warrants
    
    
    (2,105
    )
    
    
    503Depreciation
    
    
    326
    
    
    
    273Amortization of premiums and discounts on
fixed maturities and short-term investments
    
    
    402
    
    
    
    (2
    )Deferred Federal income tax expense
    
    
    330
    
    
    
    1,791Change in:Accrued investment income
    
    
    883
    
    
    
    1,224Reinsurance recoverable
    
    
    611
    
    
    
    635Due premiums and other receivables
    
    
    (102
    )
    
    
    5Future policy benefit reserves
    
    
    7,391
    
    
    
    6,460Other policyholders liabilities
    
    
    520
    
    
    
    2,626Federal income tax receivable
    
    
    1,015
    
    
    
    (407
    )Commissions payable and other liabilities
    
    
    (1,873
    )
    
    
    (756
    )Other, net
    
    
    (1,650
    )
    
    
    (1,893
    )Net cash provided by operating activities
    
    
    9,325
    
    
    
    12,649Cash flows from investing activities:Sale of fixed maturities, available-for-sale
    
    
    8,040
    
    
    
    Maturity and calls of fixed maturities, available-for-sale
    
    
    61,488
    
    
    
    65,572Purchase of fixed maturities, available-for-sale
    
    
    (91,330
    )
    
    
    (64,843
    )Sale of equity securities, available-for-sale
    
    
    663
    
    
    
    Purchase of equity securities, available-for-sale
    
    
    (122
    )
    
    
    (13,088
    )Principal payments on mortgage loans
    
    
    8
    
    
    
    9Increase in policy loans
    
    
    (1,139
    )
    
    
    (540
    )Sale of other long-term investments and property
and equipment
    
    
    18
    
    
    
    50Purchase of other long-term investments and property and
equipment
    
    
    (182
    )
    
    
    (277
    )Maturity of short-term investments
    
    
    1,250
    
    
    
    Purchase of short-term investments
    
    
    (2,605
    )
    
    
    Cash acquired in acquisition
    
    
    9,773
    
    
    
    Net cash used in investing activities
    
    
    (14,138
    )
    
    
    (13,117
    )
 See accompanying notes to consolidated financial statements.
    
    (Continued)
  5




---



##### Table of Contents



CITIZENS, INC. AND CONSOLIDATED SUBSIDIARIES
 Consolidated Statements of Cash Flows, Continued
Three Months Ended March 31,
(In thousands)
(Unaudited)
 2009
    
    
    2008Cash flows from financing activities:Warrants exercised
    
    $
    69
    
    
    
    Annuity deposits
    
    
    1,535
    
    
    
    574Annuity withdrawals
    
    
    (667
    )
    
    
    (501
    )Net cash provided by financing activities
    
    
    937
    
    
    
    73Net decrease in cash and cash equivalents
    
    
    (3,876
    )
    
    
    (395
    )Cash and cash equivalents at beginning of period
    
    
    63,792
    
    
    
    21,123Cash and cash equivalents at end of period
    
    $
    59,916
    
    
    
    20,728Supplemental disclosures of operating activities:Cash paid during the period for income taxes
    
    $
    86
    
    
    
    262
 Supplemental Disclosure of Non-Cash Investing Activities:
  Supplemental Disclosures of Non-Cash Financing Activities:
    6




---



##### Table of Contents



CITIZENS, INC. AND CONSOLIDATED SUBSIDIARIES
 
 Notes to Consolidated Financial Statements
 March 31, 2009
 (Unaudited)
 (1)
    
    Financial Statements
      (2)
    
    Accounting Pronouncements
  
    
    FSP Statement of Financial Accounting Standards, (SFAS) 157-4,
Determining Fair Value When the Volume and Level of Activity for
the Assets or Liability Have Significantly Decreased and
Identifying Transactions That Are Not Orderly,provides additional
guidance on estimating fair value when the volume and level of
activity for an asset or liability have significantly decreased in
relation to normal market activity for the asset or liability.
The FSP also provides additional guidance on circumstances that
may indicate that a transaction is not orderly.
 
    
    FSP SFAS 115-2 and SFAS 124-2, Recognition and Presentation of
Other-Than-Temporary Impairmentsprovides new guidance on the
recognition and presentation of an OTTI and provides some new
disclosure requirements.
 
    
    FSP SFAS 107-1 and APB 28-1, Interim Disclosures about Fair Value
of Financial Instruments,an amendment of FASB 107, extends the
disclosure requirements of FASB 107, Disclosures about Fair Value
of Financial Instruments, to interim financial statements of
publicly traded companies.
  7




---



##### Table of Contents



Fair Value Measurements,
 Business Combinations Accounting and Reporting of Noncontrolling Interests in
Consolidated Financial Statements
 Determination of the Useful Life of Intangible
Assets Goodwill and Other Intangible Assets
 (3)
    
    Segment Information
     8




---



##### Table of Contents



CITIZENS, INC. AND CONSOLIDATED SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
March 31, 2009
(Unaudited)
 Three Months Ended March 31, 2009Home
    
    
    OtherLife
    
    
    Service
    
    
    Non-InsuranceInsurance
    
    
    Insurance
    
    
    Enterprises
    
    
    Consolidated(In thousands)Revenues:Premiums
    
    $
    24,055
    
    
    
    10,172
    
    
    
    
    
    
    
    34,227Net investment income
    
    
    4,257
    
    
    
    3,402
    
    
    
    83
    
    
    
    7,742Realized gains, net
    
    
    60
    
    
    
    241
    
    
    
    
    
    
    
    301Decrease in fair value of warrants
    
    
    
    
    
    
    
    
    
    
    2,105
    
    
    
    2,105Other income
    
    
    88
    
    
    
    18
    
    
    
    177
    
    
    
    283Total revenue
    
    
    28,460
    
    
    
    13,833
    
    
    
    2,365
    
    
    
    44,658Benefits and expenses:Insurance benefits paid or provided:Claims and surrenders
    
    
    9,710
    
    
    
    5,097
    
    
    
    
    
    
    
    14,807Increase in future policy benefit reserves
    
    
    7,290
    
    
    
    468
    
    
    
    
    
    
    
    7,758Policyholders dividends
    
    
    1,443
    
    
    
    19
    
    
    
    
    
    
    
    1,462Total insurance benefits paid or provided
    
    
    18,443
    
    
    
    5,584
    
    
    
    
    
    
    
    24,027Commissions
    
    
    4,457
    
    
    
    3,578
    
    
    
    
    
    
    
    8,035Other underwriting, acquisition and insurance
expenses
    
    
    2,603
    
    
    
    3,954
    
    
    
    752
    
    
    
    7,309Capitalization of deferred policy acquisition costs
    
    
    (3,757
    )
    
    
    (1,300
    )
    
    
    
    
    
    
    (5,057
    )Amortization of deferred policy acquisition costs
    
    
    3,352
    
    
    
    340
    
    
    
    
    
    
    
    3,692Amortization of cost of customer relationships
acquired and other intangibles
    
    
    268
    
    
    
    598
    
    
    
    
    
    
    
    866Total benefits and expenses
    
    
    25,366
    
    
    
    12,754
    
    
    
    752
    
    
    
    38,872Income before income tax expense
    
    $
    3,094
    
    
    
    1,079
    
    
    
    1,613
    
    
    
    5,786
  9




---



##### Table of Contents



CITIZENS, INC. AND CONSOLIDATED SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
March 31, 2009
(Unaudited)
 Three Months Ended March 31, 2008Home
    
    
    OtherLife
    
    
    Service
    
    
    Non-InsuranceInsurance
    
    
    Insurance
    
    
    Enterprises
    
    
    Consolidated(In thousands)Revenues:Premiums
    
    $
    22,551
    
    
    
    10,119
    
    
    
    
    
    
    
    32,670Net investment income
    
    
    4,062
    
    
    
    3,084
    
    
    
    318
    
    
    
    7,464Realized gains (losses), net
    
    
    
    
    
    
    (2
    )
    
    
    18
    
    
    
    16Increase in fair value of warrants
    
    
    
    
    
    
    
    
    
    
    (503
    )
    
    
    (503
    )Other income
    
    
    74
    
    
    
    3
    
    
    
    202
    
    
    
    279Total revenue
    
    
    26,687
    
    
    
    13,204
    
    
    
    35
    
    
    
    39,926Benefits and expenses:Insurance benefits paid or provided:Claims and surrenders
    
    
    8,631
    
    
    
    4,447
    
    
    
    
    
    
    
    13,078Increase in future policy benefit reserves
    
    
    6,480
    
    
    
    517
    
    
    
    
    
    
    
    6,997Policyholders dividends
    
    
    1,358
    
    
    
    19
    
    
    
    
    
    
    
    1,377Total insurance benefits paid or provided
    
    
    16,469
    
    
    
    4,983
    
    
    
    
    
    
    
    21,452Commissions
    
    
    4,251
    
    
    
    3,460
    
    
    
    
    
    
    
    7,711Other underwriting, acquisition and insurance
expenses
    
    
    2,476
    
    
    
    3,524
    
    
    
    911
    
    
    
    6,911Capitalization of deferred policy acquisition costs
    
    
    (3,557
    )
    
    
    (1,298
    )
    
    
    
    
    
    
    (4,855
    )Amortization of deferred policy acquisition costs
    
    
    3,404
    
    
    
    158
    
    
    
    
    
    
    
    3,562Amortization of cost of customer relationships
acquired and other intangibles
    
    
    282
    
    
    
    482
    
    
    
    
    
    
    
    764Total benefits and expenses
    
    
    23,325
    
    
    
    11,309
    
    
    
    911
    
    
    
    35,545Income (loss) before income tax expense
    
    $
    3,362
    
    
    
    1,895
    
    
    
    (876
    )
    
    
    4,381
 (4)
    
    Total Comprehensive Income (Loss)
 Three Months Ended March 31,2009
    
    
    2008(In thousands)Net income
    
    $
    4,377
    
    
    
    2,735Other comprehensive income (loss) net of effects of
deferred acquisition costs and taxes:Unrealized net losses on investments
in fixed maturities available for sale and
equity securities, net of tax benefit of $605
and $1,222 in 2009 and 2008, respectively
    
    
    (5,154
    )
    
    
    (2,269
    )Total comprehensive income (loss)
    
    $
    (777
    )
    
    
    466
  10




---



##### Table of Contents



CITIZENS, INC. AND CONSOLIDATED SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
March 31, 2009
(Unaudited)
 (5)
    
    Earnings per Share
  Three Months Ended March 31,2009
    
    
    2008(In thousands, except per share amounts)Basic and diluted earnings per share:Numerator:Net income
    
    $
    4,377
    
    
    
    2,735Less: Preferred stock dividend
    
    
    (105
    )
    
    
    (178
    )Accretion of deferred issuance costs and
discounts on preferred stock
    
    
    (1,073
    )
    
    
    (334
    )Net income available to common stockholders
    
    $
    3,199
    
    
    
    2,223Net income allocated to Class A common stock
    
    $
    3,165
    
    
    
    2,197Net income allocated to Class B common stock
    
    
    34
    
    
    
    26Net income available to common stockholders
    
    $
    3,199
    
    
    
    2,223Denominator:Weighted average shares of Class A outstanding 
basic and diluted
    
    
    46,112
    
    
    
    43,070Weighted average shares of Class B outstanding 
basic and diluted
    
    
    1,002
    
    
    
    1,002Total weighted average shares outstanding 
basic and diluted
    
    
    47,114
    
    
    
    44,072Basic earnings per share of Class A common stock
    
    $
    0.07
    
    
    
    0.05Basic earnings per share of Class B common stock
    
    $
    0.03
    
    
    
    0.03Diluted earnings per share of Class A common stock
    
    $
    0.03
    
    
    
    0.05Diluted earnings per share of Class B common stock
    
    $
    0.01
    
    
    
    0.03
  (6)
    
    Fair Value Measurements
   11




---



##### Table of Contents



CITIZENS, INC. AND CONSOLIDATED SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
March 31, 2009
(Unaudited)
  
    
    Level 1  Quoted prices for identical instruments in active markets.
 
    
    Level 2  Quoted prices for similar instruments in active markets; quoted prices
for identical or similar instruments in markets that are not active; and
model-derived valuations whose inputs or whose significant value drivers are
observable.
 
    
    Level 3  Instruments whose significant value drivers are unobservable.
     March 31, 2009(In thousands)Total
    
    
    Level 1
    
    
    Level 2
    
    
    Level 3Financial Assets:Fixed Maturities
Available-for-Sale
    
    $
    506,974
    
    
    
    13,831
    
    
    
    492,514
    
    
    
    629Equity Securities
Available-for-Sale
    
    
    38,421
    
    
    
    38,421
    
    
    
    
    
    
    
    Total Financial Assets
    
    $
    545,395
    
    
    
    52,252
    
    
    
    492,514
    
    
    
    629
  March 31, 2009(In thousands)Beginning balance at December 31, 2008
    
    $
    654Total realized and unrealized losses:Included in net income
    
    
    Included in other comprehensive income
    
    
    (12
    )Principal paydowns
    
    
    (13
    )Transfer in and (out) of Level 3
    
    
    Ending balance at March 31, 2009
    
    $
    629
  12




---



##### Table of Contents



CITIZENS, INC. AND CONSOLIDATED SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
March 31, 2009
(Unaudited)
   (7)
    
    Legal Proceedings
 Citizens Insurance Company of America, Citizens, Inc., Harold
E. Riley and Mark A. Oliver, Petitioners v. Fernando Hakim Daccach Respondent
 The State of
Louisiana v. AAA Insurance Road Home Litigation Road Home
Litigation
 Lilac Todd vs. Security
Plan Life Insurance Company
  13




---



##### Table of Contents



CITIZENS, INC. AND CONSOLIDATED SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
March 31, 2009
(Unaudited)
  
    
    disputes over insurance coverage or claims adjudication;
 
    
    regulatory compliance with insurance and securities laws in the United States and
in foreign countries;
 
    
    disputes with our marketing firms, consultants and employee agents over
compensation and termination of contracts and related claims;
 
    
    disputes regarding our tax liabilities;
    
    disputes relative to reinsurance and coinsurance agreements; and
    
    disputes relating to businesses acquired and operated by us.
  (8)
    
    Convertible Preferred Stock
     (9)
    
    Income Taxes
   14




---



##### Table of Contents



CITIZENS, INC. AND CONSOLIDATED SUBSIDIARIES
March 31, 2009
 
 ITEM 2. MANAGEMENT S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
 FORWARD-LOOKING STATEMENTS
 Certain statements contained in this Quarterly Report on Form 10-Q are not statements of historical
fact and constitute forward-looking statements within the meaning of the Private Securities
Litigation Reform Act (the Act), including, without limitation, statements specifically
identified as forward-looking statements within this document. Many of these statements contain
risk factors as well. In addition, certain statements in future filings by the Company with the
Securities and Exchange Commission, in press releases, and in oral and written statements made by
us or with the approval of the Company, which are not statements of historical fact constitute
forward-looking statements within the meaning of the Act. Examples of forward-looking statements,
include, but are not limited to: (i) projections of revenues, income or loss, earnings or loss per
share, the payment or non-payment of dividends, capital structure, and other financial items, (ii)
statements of our plans and objectives by our management or Board of Directors including those
relating to products or services, (iii) statements of future economic performance and (iv)
statements of assumptions underlying such statements. Words such as believes, anticipates,
expects, intends, targeted, may, will and similar expressions are intended to identify
forward-looking statements but are not the exclusive means of identifying such statements.
 Forward-looking statements are subject to known and unknown risks, uncertainties and other factors
that may cause actual results to differ materially from those contemplated by the forward-looking
statements. Factors that could cause the Companys future results to differ materially from
expected results include, but are not limited to:
 
    
    Changes in foreign and U.S. general economic conditions, including the performance of
financial markets and interest rates;
 
    
    Changes in consumer behavior, which may affect the Companys ability to sell its
products and retain business;
 
    
    The timely development of and acceptance of new products of the Company and perceived
overall value of these products and services by existing potential customers;
 
    
    Fluctuations in experience regarding current mortality, morbidity, persistency and
interest rates relative to expected amounts used in pricing the Companys products;
 
    
    Changes in assumptions related to deferred acquisition costs and the value of business
acquired;
 
    
    Regulatory, accounting or tax changes that may affect the cost of, or the demand for,
the Companys products or services;
 
    
    Our concentration of business from persons residing in Latin America and the Pacific Rim; and
    
    Our success at managing risks involved in the foregoing.
 Such forward-looking statements speak only as of the date on which such statements are made, and
the Company undertakes no obligation to update any forward-looking statement to reflect events or
circumstances after the date on which such statement is made to reflect the occurrence of
unanticipated events.
 We make available, free of charge, through our Internet website (http://www.citizensinc.com), our
Annual Report on Form 10-K , Quarterly Reports on Form 10-Q , Current Reports on Form 8-K , Section 16
reports filed by officers and directors, news releases, and, if applicable, amendments to those
reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of
1934, as soon as reasonably practicable after we electronically file such reports with, or furnish
such reports to, the Securities and Exchange Commission. We are not including any of the
information contained on our website as part of, or incorporating it by reference into, this
Quarterly Report on Form 10-Q .
  15




---



##### Table of Contents



CITIZENS, INC. AND CONSOLIDATED SUBSIDIARIES
March 31, 2009
 Overview
  
    
    U.S. Dollar-denominated ordinary whole life insurance policies predominantly to high net
worth, high income foreign residents, principally in Latin America and the Pacific Rim,
through independent marketing consultants;
 
    
    ordinary whole life insurance policies to middle income households in the midwest and
the southern United States through independent marketing consultants; and
 
    
    final expense and limited liability property policies to middle to lower income
households in Louisiana and Arkansas through employee and independent agents in our home
service distribution channel.
 Life Insurance.
   Home Service Insurance.
   16




---



##### Table of Contents



CITIZENS, INC. AND CONSOLIDATED SUBSIDIARIES
March 31, 2009
 Marketplace Conditions and Trends
  
    
    As an increasing percentage of the world population reaches retirement age, we believe
we will benefit from increased demand for living products rather than death products, as
aging baby boomers will require cash accumulation to provide expenses to meet their
lifetime needs. Our ordinary life products are designed to accumulate cash values to
provide for living expenses in a policy owners later years, while continuously providing
a death benefit.
 
    
    We are exposed to a variety of risks, including the current market conditions as well
as the credit crisis, current recession and corresponding potential changes in the fair
value of our investments. In the normal course of business, we employ established
policies and procedures to manage our exposure to fluctuations in the current market and
changes in the fair value of our investments.
 
    
    Volatility in the market has continued into the first quarter of 2009.
As a result of the continued depressed economic environment, we recorded
other-than-temporary impairments during the quarter of $111,000 related to bond and
stock investment holdings. The majority of our investment portfolio is held in debt
instruments of U.S. Government-sponsored enterprises. Most of the municipal bonds
we own are privately insured. We intend to manage our investment portfolio in the
future using these types of debt instruments. At March 31, 2009, 67.8% of our fixed
maturity securities were invested in U.S. Government-sponsored enterprises,
including Fannie Mae and Freddie Mac. Additional impairments may be necessary if
the economic recession continues. The Company routinely monitors all investments
for potential impairment.
 
    
    Because of the trends described above coupled with increasing costs of regulatory
compliance such as the Sarbanes-Oxley Act of 2002, we believe there is a trend towards
consolidation of domestic life insurance companies. We believe this should be a benefit
to our acquisition strategy as more complementary acquisition candidates may become
available for us to consider.
 
    
    Many of the events and trends affecting the life insurance industry have had an impact
on the life reinsurance industry. These events led to a decline in the availability of
reinsurance. While we currently cede a limited amount of our primary insurance business
to reinsurers, we may find it difficult to obtain reinsurance in the future, forcing us to
seek reinsurers who are more expensive to us. If we cannot obtain affordable reinsurance
coverage, either our net exposures will increase or we will have to reduce our
underwriting commitments. The Company is currently negotiating to add an additional
reinsurer to diversify exposure in this area.
 Recent Acquisition
  Consolidated Results of Operations
  Three Months Ended
    
    Net Income
    
    
    Net Income per
    
    
    Increase fromMarch 31,
    
    (In thousands)
    
    
    Class A Share
    
    
    Previous Year2009
    
    $
    4,377
    
    
    $
    0.07
    
    
    
    60.0
    %2008
    
    
    2,735
    
    
    
    0.05
    
    
    
    12.1
  17




---



##### Table of Contents



CITIZENS, INC. AND CONSOLIDATED SUBSIDIARIES
March 31, 2009
 Revenues
 Three Months Ended March 31,2009
    
    
    2008( In thousands)Revenues:Premiums:Life insurance
    
    $
    32,683
    
    
    
    30,850Accident and health insurance
    
    
    396
    
    
    
    384Property insurance
    
    
    1,148
    
    
    
    1,436Net investment income
    
    
    7,742
    
    
    
    7,464Realized gains, net
    
    
    301
    
    
    
    16Decrease (increase) in fair value of warrants
    
    
    2,105
    
    
    
    (503
    )Other income
    
    
    283
    
    
    
    279Total revenues
    
    
    44,658
    
    
    
    39,926Exclude increase (decrease) in fair value
of warrants
    
    
    (2,105
    )
    
    
    503Total revenues excluding fair value adjustments
    
    $
    42,553
    
    
    
    40,429
 Premium Income
 Net Investment Income
 Three Months Ended March 31,2009
    
    
    2008(In thousands)Gross investment income:Debt securities
    
    $
    6,517
    
    
    
    6,505Equity securities
    
    
    269
    
    
    
    89Mortgage loans
    
    
    6
    
    
    
    6Policy loans
    
    
    585
    
    
    
    493Short-term investments
    
    
    355
    
    
    
    214Other investment income
    
    
    397
    
    
    
    411Total investment income
    
    
    8,129
    
    
    
    7,718Less investment expenses
    
    
    387
    
    
    
    254Net investment income
    
    $
    7,742
    
    
    
    7,464
   18




---



##### Table of Contents



CITIZENS, INC. AND CONSOLIDATED SUBSIDIARIES
March 31, 2009
 Realized gains, net.
 Change in Fair Value of Warrants
 Benefits and Expenses:
 Three Months Ended March 31,2009
    
    
    2008( In thousands)Benefits and expenses:Insurance benefits paid or provided:Claims and surrenders
    
    $
    14,807
    
    
    
    13,078Increase in future policy benefit reserves
    
    
    7,758
    
    
    
    6,997Policyholders dividends
    
    
    1,462
    
    
    
    1,377Total insurance benefits paid or provided
    
    
    24,027
    
    
    
    21,452Commissions
    
    
    8,035
    
    
    
    7,711Other underwriting, acquisition and insurance expenses
    
    
    7,309
    
    
    
    6,911Capitalization of deferred policy acquisition costs
    
    
    (5,057
    )
    
    
    (4,855
    )Amortization of deferred policy acquisition costs
    
    
    3,692
    
    
    
    3,562Amortization of cost of customer relationships
acquired and other intangibles
    
    
    866
    
    
    
    764Total benefits and expenses
    
    $
    38,872
    
    
    
    35,545
 Claims and Surrenders
 Three Months Ended March 31,2009
    
    
    2008(In thousands)Death claims
    
    $
    6,135
    
    
    
    5,784Surrender benefits
    
    
    4,473
    
    
    
    3,442Endowments
    
    
    3,024
    
    
    
    3,130Property claims
    
    
    497
    
    
    
    371Other policy benefits
    
    
    538
    
    
    
    281Accident and health benefits
    
    
    140
    
    
    
    70Total claims and surrenders
    
    $
    14,807
    
    
    
    13,078
    19




---



##### Table of Contents



CITIZENS, INC. AND CONSOLIDATED SUBSIDIARIES
March 31, 2009
 Policyholder Dividends
 Commissions
 Other Underwriting, Acquisition and Insurance Expenses
 Federal Income Tax
 Segment Operations
  Home
    
    
    OtherLife
    
    
    Service
    
    
    Non-InsuranceInsurance
    
    
    Insurance
    
    
    Enterprises
    
    
    Total(In thousands)Income (loss)
before income tax
expenseMarch 31, 2009
    
    $
    3,094
    
    
    
    1,079
    
    
    
    1,613
    
    
    
    5,786March 31, 2008
    
    
    3,362
    
    
    
    1,895
    
    
    
    (876
    )
    
    
    4,381
  20




---



##### Table of Contents



CITIZENS, INC. AND CONSOLIDATED SUBSIDIARIES
March 31, 2009
 Life Insurance
  Three Months Ended March 31,2009
    
    
    2008(In thousands)Revenue:Premiums
    
    $
    24,055
    
    
    
    22,551Net investment income
    
    
    4,257
    
    
    
    4,062Realized gains, net
    
    
    60
    
    
    
    Other income
    
    
    88
    
    
    
    74Total revenue
    
    
    28,460
    
    
    
    26,687Benefits and expenses:Insurance benefits paid or provided:Claims and surrenders
    
    
    9,710
    
    
    
    8,631Increase in future policy benefit reserves
    
    
    7,290
    
    
    
    6,480Policyholders dividends
    
    
    1,443
    
    
    
    1,358Total insurance benefits paid or provided
    
    
    18,443
    
    
    
    16,469Commissions
    
    
    4,457
    
    
    
    4,251Other underwriting, acquisition and insurance expenses
    
    
    2,603
    
    
    
    2,476Capitalization of deferred policy acquisition costs
    
    
    (3,757
    )
    
    
    (3,557
    )Amortization of deferred policy acquisition costs
    
    
    3,352
    
    
    
    3,404Amortization of cost of customer relationships
acquired and other intangibles
    
    
    268
    
    
    
    282Total benefits and expenses
    
    
    25,366
    
    
    
    23,325Income before income tax expense
    
    $
    3,094
    
    
    
    3,362
 Premiums
 Net Investment Income
 Claims and Surrenders
 Commissions
  21




---



##### Table of Contents



CITIZENS, INC. AND CONSOLIDATED SUBSIDIARIES
March 31, 2009
 Home Service Insurance
  Three Months Ended March 31,2009
    
    
    2008(In thousands)Revenue:Premiums
    
    $
    10,172
    
    
    
    10,119Net investment income
    
    
    3,402
    
    
    
    3,084Realized gains (losses), net
    
    
    241
    
    
    
    (2
    )Other income
    
    
    18
    
    
    
    3Total revenue
    
    
    13,833
    
    
    
    13,204Benefits and expenses:Insurance benefits paid or provided:Claims and surrenders
    
    
    5,097
    
    
    
    4,446Increase in future policy benefit reserves
    
    
    468
    
    
    
    518Policyholders dividends
    
    
    19
    
    
    
    19Total insurance benefits paid or provided
    
    
    5,584
    
    
    
    4,983Commissions
    
    
    3,578
    
    
    
    3,460Other underwriting, acquisition and insurance
expenses
    
    
    3,954
    
    
    
    3,524Capitalization
of deferred policy acquisition costs
    
    
    (1,300
    )
    
    
    (1,298
    )Amortization of deferred policy acquisition costs
    
    
    340
    
    
    
    158Amortization of cost of customer relationship
acquired and other intangibles
    
    
    598
    
    
    
    482Total benefits and expenses
    
    
    12,754
    
    
    
    11,309Income before income tax expense
    
    $
    1,079
    
    
    
    1,895
 Net Investment Income
 Realized Gains (Losses), Net
 Claims and Surrenders
 Other Underwriting, Acquisition and Insurance Expenses
  22




---



##### Table of Contents



CITIZENS, INC. AND CONSOLIDATED SUBSIDIARIES
March 31, 2009
 Other Non-Insurance Enterprises
  Investments
   March 31, 2009Carrying Value
    
    
    Percent of Total(In thousands)Fixed maturity securities:U.S. Government-sponsored corporations
and U.S. Government agencies (1)
    
    $
    299,026
    
    
    
    46.1
    %Corporate
    
    
    89,199
    
    
    
    13.8Municipal bonds
    
    
    51,102
    
    
    
    7.9Mortgage-backed (2)
    
    
    48,622
    
    
    
    7.5Public utilities
    
    
    18,902
    
    
    
    2.9Foreign governments
    
    
    123
    
    
    
    Total fixed maturity securities
    
    
    506,974
    
    
    
    78.2Cash and cash equivalents
    
    
    59,916
    
    
    
    9.2Short-term investments
    
    
    3,567
    
    
    
    0.6Other investments:Policy loans
    
    
    30,094
    
    
    
    4.6Equity securities
    
    
    38,421
    
    
    
    5.9Mortgage loans
    
    
    331
    
    
    
    0.1Real estate and other long-term investments
    
    
    9,025
    
    
    
    1.4Total cash, cash equivalents and investments
    
    $
    648,328
    
    
    
    100.0
    %
 (1)
    
    Includes U.S. Treasury securities of $13,831,000 and U.S. Government-sponsored
corporations of $285,195,000.(2)
    
    Includes $44,470,000 of U.S. Government agencies and government-sponsored corporations.  23




---



##### Table of Contents



CITIZENS, INC. AND CONSOLIDATED SUBSIDIARIES
March 31, 2009
  March 31, 2009Carrying Value
    
    
    %(In thousands)AAA and U.S. Government
    
    $
    376,207
    
    
    
    74.2
    %AA
    
    
    34,369
    
    
    
    6.8A
    
    
    68,844
    
    
    
    13.6BBB
    
    
    22,269
    
    
    
    4.4BB and other
    
    
    5,285
    
    
    
    1.0Totals
    
    $
    506,974
    
    
    
    100.0
    %
 Other-Than-Temporary Impairment (OTTI)
  
    
    how much fair value has declined below amortized cost;
 
    
    how long the decline in fair value has existed;
 
    
    the financial condition of the issuer;
 
    
    contractual or estimated cash flows of the security;
 
    
    underlying supporting collateral;
 
    
    past events, current conditions and forecasts;
 
    
    significant rating agency changes on the issuer; and
 
    
    the Companys intent and ability to hold the fixed maturity security until maturity or
for a period of time sufficient to allow for full recovery in fair value.
  Liquidity and Capital Resources
    24




---



##### Table of Contents



CITIZENS, INC. AND CONSOLIDATED SUBSIDIARIES
March 31, 2009
        Contractual obligations and off-balance sheet arrangements.
   25




---



##### Table of Contents



CITIZENS, INC. AND CONSOLIDATED SUBSIDIARIES
March 31, 2009
 Parent Company Liquidity and Capital Resources
  Critical Accounting Policies
  Policy Liabilities
   Deferred Policy Acquisition Costs
     26




---



##### Table of Contents



CITIZENS, INC. AND CONSOLIDATED SUBSIDIARIES
March 31, 2009
  Goodwill
 Goodwill and Other Intangible Assets
     Valuation of Investments in Fixed Maturity and Equity Securities
    27




---



##### Table of Contents



CITIZENS, INC. AND CONSOLIDATED SUBSIDIARIES
March 31, 2009
 Premium Revenue and Related Expenses
   
 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 General
  Market Risk Related to Interest Rates
       28




---



##### Table of Contents



CITIZENS, INC. AND CONSOLIDATED SUBSIDIARIES
March 31, 2009
 Market Risk Related to Equity Prices
  
 ITEM 4. CONTROLS AND PROCEDURES
    
 PART II. OTHER INFORMATION
 
 Item 1. Legal Proceedings
 Citizens Insurance Company of America, Citizens, Inc., Harold E. Riley
and Mark A. Oliver, Petitioners v. Fernando Hakim Daccach Respondent
 The State of
Louisiana v. AAA Insurance Road Home Litigation Road Home Litigation
  29




---



##### Table of Contents



CITIZENS, INC. AND CONSOLIDATED SUBSIDIARIES
March 31, 2009
 Lilac Todd vs. Security Plan
Life Insurance Company
  
    
    disputes over insurance coverage or claims adjudication;
 
    
    regulatory compliance with insurance and securities laws in the United States and in
foreign countries;
 
    
    disputes with our marketing firms, consultants and employee agents over compensation and
termination of contracts and related claims;
 
    
    disputes regarding our tax liabilities;
 
    
    disputes relative to reinsurance and coinsurance agreements; and
 
    
    disputes relating to businesses acquired and operated by us.
  
 Item 1A. Risk Factors
  
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
  
 Item 3. Defaults Upon Senior Securities
  
 Item 4. Submission of Matters to a Vote of Security Holders
  
 Item 5. Other Information
   30




---



##### Table of Contents



CITIZENS, INC. AND CONSOLIDATED SUBSIDIARIES
March 31, 2009
 
 Item 6. Exhibits
 Exhibit Number
    
    The following exhibits are filed herewith:3.1
    
    
    Restated and Amended Articles of Incorporation (a)3.2
    
    
    Bylaws (b)4.1
    
    
    Amendment to State Series A-1 and A-2 Senior Convertible Preferred Stock (c)10.1
    
    
    Self-Administered Automatic Reinsurance Agreement  Citizens Insurance Company of America and
Riunione Adriatica di Sicurta, S.p.A. (d)10.2
    
    
    Bulk Accidental Death Benefit Reinsurance Agreement between Connecticut General Life
Insurance Company and Citizens Insurance Company of America, as amended (e)10.3
    
    
    Coinsurance Reinsurance Agreement, Assumption Reinsurance Agreement, Administrative Services
Agreement dated March 9, 2004, between Citizens Insurance Company of America and Texas
International Life Insurance Company, Reinsurance Trust Agreement dated March 9, 2004, by and
among Citizens Insurance Company of America, Texas International Life Insurance Company and
Wells Fargo Bank, N.A. (f)10.4
    
    
    Coinsurance Reinsurance Agreement, Assumption Reinsurance Agreement, Administrative Services
Agreement dated March 9, 2004, between Combined Underwriters Life Insurance Company and Texas
International Life Insurance Company, Reinsurance Trust Agreement dated March 9, 2004, by and
among Combined Underwriters Life Insurance Company, Texas International Life Insurance Company
and Wells Fargo Bank, N.A. (g)10.5
    (a)
    
    Securities Purchase Agreement dated July 12, 2004 among Citizens, Inc., Mainfield
Enterprises, Inc., Steelhead Investments Ltd., Portside Growth and Opportunity Fund, and
Smithfield Fiduciary LLC (h)10.5
    (b)
    
    Registration Rights Agreement dated July 12, 2004 among Citizens, Inc., Mainfield
Enterprises, Inc., Steelhead Investments Ltd., Portside Growth and Opportunity Fund, and
Smithfield Fiduciary LLC (h)10.5
    (c)
    
    Unit Warrant dated July 12, 2004, to Mainfield Enterprises, Inc. (h)10.5
    (d)
    
    Unit Warrant dated July 12, 2004, to Steelhead Investments Ltd. (h)10.5
    (e)
    
    Unit Warrant dated July 12, 2004, to Portside Growth and Opportunity Fund (h)10.5
    (f)
    
    Unit Warrant dated July 12, 2004, to Smithfield Fiduciary LLC (h)10.5
    (g)
    
    Warrant to Purchase Class A Common Stock to Mainfield Enterprises, Inc. (h)10.5
    (h)
    
    Warrant to Purchase Class A Common Stock to Steelhead Investments Ltd. (h)10.5
    (i)
    
    Warrant to Purchase Class A Common Stock to Portside Growth and Opportunity Fund (h)10.5
    (j)
    
    Warrant to Purchase Class A Common Stock to Smithfield Fiduciary LLC (h)10.5
    (k)
    
    Subordination Agreement among Regions Bank, the Purchasers and Citizens, Inc. dated July 12, 2004 (h)10.5
    (l)
    
    Non-Exclusive Finders Agreement dated September 29, 2003, between Citizens, Inc. and the Shemano Group, Inc. (h)
  31




---



##### Table of Contents



CITIZENS, INC. AND CONSOLIDATED SUBSIDIARIES
March 31, 2009
 Exhibit Number
    
    The following exhibits are filed herewith:10.6
    
    
    Self-Administered Automatic Reinsurance Agreement between Citizens Insurance Company of
America and Converium Reinsurance (Germany) Ltd. (i)10.7
    
    
    Self-Administered Automatic Reinsurance Agreement between Citizens Insurance Company of
America and Scottish Re Worldwide (England) (j)11
    
    
    Statement re: Computation of per share earnings (see financial statements)21
    
    
    Subsidiaries of the Registrant*31.1
    
    
    Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act*31.2
    
    
    Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act*32.1
    
    
    Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act*32.2
    
    
    Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act*
 
 *
    
    Filed herewith.(a)
    
    Filed on March 15, 2004 with the Registrants Annual Report on Form 10-K for the Year Ended
December 31, 2003 as Exhibit 3.1, and incorporated herein by reference.(b)
    
    Filed on March 31, 1999 with the Registrants Annual Report on Form 10-K for the Year Ended
December 31, 1998, as Exhibit 3.2, and incorporated herein by reference.(c)
    
    Filed on July 15, 2004, with the Registrants Current Report on Form 8-K as Exhibit 4.1, and
incorporated herein by reference.(d)
    
    Filed as Exhibit 10.8 with the Registration Statement on Form S-4, SEC File No. 333-16163, on
November 14, 1996 and incorporated herein by reference.(e)
    
    Filed on April 9, 1997 as Exhibit 10.9 with the Registrants Annual Report on Form 10-K for
the Year Ended December 31, 1996, Amendment No. 1, and incorporated herein by reference.(f)
    
    Filed on March 22, 2004 as Exhibit 10.8 of the Registrants Current Report on Form 8-K, and
incorporated herein by reference.(g)
    
    Filed on March 22, 2004 as Exhibit 10.9 of the Registrants Current Report on Form 8-K, and
incorporated herein by reference.(h)
    
    Filed on July 15, 2004 as part of Exhibit 10.12 with the Registrants Current Report on Form
8-K, and incorporated herein by reference.(i)
    
    Filed on March 31, 2005, with the Registrants Annual Report on Form 10-K for the Year Ended
December 31, 2004, as Exhibit 10.10(m), and incorporated herein by reference.(j)
    
    Filed on March 31, 2005, with the Registrants Annual Report on Form 10-K for the Year Ended
December 31, 2004, as Exhibit 10.10(n), and incorporated herein by reference.  32




---



##### Table of Contents



SIGNATURES
  CITIZENS, INC.By:
    /s/ Harold E. RileyHarold E. RileyChairman and Chief Executive OfficerBy:
    /s/ Kay E. OsbournKay E. OsbournVice President, Chief Financial Officer and Treasurer   33




---



##### Table of Contents



EXHIBIT INDEX
 ExhibitNo.
    
    Description21
    
    
    Subsidiaries of the Registrant*31.1
    
    
    Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act*31.2
    
    
    Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act*32.1
    
    
    Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act*32.2
    
    
    Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act*
  34