Loyal's home office building in Mobile, Alabama, contains approximately 82,000 square feet, of which approximately two-thirds is utilized for Company purposes. The remainder of the building is leased to unaffiliated tenants.
These facilities are currently being leased to companies using them for manufacturing and other operations.
Balance Sheet Data at year end: Total assets $7,024.1 $6,611.0 $5,089.9 $4,913.8 $4,480.4 Notes payable 114.9 167.7 183.3 225.9 230.9 Mandatorily redeemable preferred securities of subsidiary trust 75.0 - - - - Net unrealized gains (losses) included in stockholders' equity 61.8 89.3 (29.0) 56.9 28.4 Total stockholders' equity 486.5 429.3 204.4 250.3 186.6
On December 31, 1992, the Company purchased 100% of the capital stock of GALIC from GAI for $468 million. The purchase was financed with (a) $230 million of borrowings, (b) $156 million of new equity raised from the sale of common and preferred stock to GAI and (c) available cash. In 1992, GALIC had total revenues, income from continuing operations and net income of $342.5 million, $49.2 million and $42.5 million, respectively. AFG, the parent of GAI, beneficially owned approximately 81% of AAG's Common Stock at February 28, 1997.
In the second half of 1996, three nationally recognized rating agencies upgraded their ratings on AAG public debentures. The senior debt is now rated investment grade by all three agencies and the subordinated debt is rated investment grade by two of the agencies. Additionally, two of the agencies gave an investment grade rating to the Trust Originated Preferred Securities ("TOPrS") issued by an AAG subsidiary in November 1996.
Earnings to fixed charges 6.0 6.0 4.0 Earnings to fixed charges plus preferred dividends 5.4 6.0 3.8
Consolidated debt to capital, excluding unrealized gains (losses) 19% 33% 44% Consolidated debt to capital, including unrealized gains (losses) 17% 28% 47%
Sources and Uses of Funds The ability of AAG and AAG Holding to pay interest and principal on debt, dividends on preferred stock, obligations related to the Company's discontinued manufacturing operations and other holding company costs is largely dependent upon payments from its primary subsidiary, Great American Life Insurance Company ("GALIC"), in the form of capital distributions. The amount of capital distributions which can be paid by GALIC is subject to restrictions relating to statutory surplus and earnings. The maximum amount of dividends payable by GALIC in 1997 without prior regulatory approval is $66 million. In 1996, GALIC made approximately $39 million in such payments.
In 1996 and 1995, AAG raised $49 million in cash from the issuance of its Series B Preferred Stock to affiliates (see Note O); $39 million of the proceeds were contributed to GALIC. AAG may sell additional Preferred Stock in December 1997.
The November 1995 acquisition of Laurentian Capital Corporation was funded primarily with internal funds supplemented by bank borrowings and the proceeds of a common stock offering in August 1995.
The NAIC assigns quality ratings to publicly traded as well as privately placed securities. At December 31, 1996, 94% of AAG's fixed maturity portfolio was comprised of investment grade bonds (NAIC rating of "1" or "2"). Management believes that the high credit quality of AAG's investment portfolio should generate a stable and predictable investment return.
At December 31, 1996, AAG had approximately $100 million in net unrealized gains on its fixed maturity portfolio compared to net unrealized gains of $242 million at December 31, 1995. This decrease, representing approximately 2% of the carrying value of AAG's fixed maturity portfolio, resulted from an increase in the general level of interest rates.
At December 31, 1996, AAG had approximately 1.5% of total assets invested in mortgage loans and real estate. The majority of mortgage loans and real estate were purchased within the last four years.
At December 31, 1996, AAG's mortgage-backed securities ("MBSs") portfolio represented approximately one-third of fixed maturity investments. As of December 31, 1996, interest only (I/O), principal only (P/O) and other "high risk" MBSs represented less than nine-tenths of one percent of total assets. AAG invests primarily in MBSs which have a lower risk of prepayment. In addition, the majority of MBSs held by AAG were purchased at a discount.
Contingencies A managing general agency which produced approximately one- fifth of GALIC's premiums in 1996 was named defendant in a lawsuit filed in July 1996 by two regulatory agencies in California. The regulatory agencies' position is that GALIC may be responsible for the acts of its insurance agents in connection with the sale of GALIC's annuities. The ultimate outcome of this matter is not expected to have a material adverse impact on the financial condition of the Company.
AAG (Consolidated): 1996 1995 1994 Revenues per income statement $577.3 $439.6 $372.7 Less realized (gains) losses (1.2) (15.7) 0.1 Less equity in net (earnings) loss of affiliate 2.2 (0.1) 2.8 Operating revenues 578.3 423.8 375.6 Operating expenses (498.8) (348.9) (309.5) Operating earnings before taxes 79.5 74.9 66.1 Income tax expense 17.8 26.5 23.3 Net operating earnings $ 61.7 $ 48.4 $ 42.8
The increase in GALIC's sales of SPDAs in 1996 reflects a new relationship with a managing general agency that wrote approximately one-fifth of GALIC's total annuity premiums in 1996.
Equity in Net Earnings (Loss) of Affiliate Equity in net earnings (loss) of affiliate represents AAG's proportionate share of the results of Chiquita Brands International. Chiquita's income from continuing operations before unusual items was $42.6 million and $8.7 million in 1996 and 1995, respectively, and a loss of $16.8 million in 1994. Chiquita reported a loss before extraordinary items for 1996 of $28 million compared to income before extraordinary items of $17 million for 1995 and a loss before extraordinary items of $49 million in 1994. The loss in 1996 reflected higher costs and charges related to; (i) widespread flooding in Guatemala Honduras and Costa Rica and (ii) certain strategic undertakings designed to achieve further long-term reductions in the delivered product cost of Chiquita bananas. The loss in 1994 reflected higher costs and charges related to (i) farm closings and write-downs of banana cultivations following an unusually severe strike in Honduras and (ii) a substantial reduction of Chiquita's banana trading operations in Japan. These charges were partially offset by improved results from Chiquita's former meat operations as well as a higher average worldwide price for bananas.
Amortization of Insurance Acquisition Costs Amortization of insurance acquisition costs reflect the effect of the acquisition of American Memorial and Loyal. These increased costs in 1996 reflect (i) certain commission expenses on the life insurance business written by American Memorial and Loyal and (ii) $8.7 million of amortization of the present value of future profits of the acquired business in force of those two companies.
Income Taxes Included in 1996 is a tax benefit of $10 million in the fourth quarter attributable to the reduction of the valuation allowance associated with certain deferred tax assets.
The Company has certain obligations related to its former business activities. Among these obligations are the funding of pension plans, environmental costs, settlement of government claims, lease payments for a former plant site, certain retiree medical benefits and certain obligations associated with the sales of the Company's manufacturing operations. (See Notes J and M.)
Consolidated Income Statement: Years Ended December 31, 1996, 1995 and 1994
"Selected Quarterly Financial Data" has been included in Note P to the Consolidated Financial Statements.
The information required by the following Items will be included in AAG's definitive Proxy Statement for the 1997 Annual Meeting of Stockholders which will be filed with the Securities and Exchange Commission within 120 days of the Company's fiscal year end and is herein incorporated by reference:
December 31, 1996 1995 Assets Investments: Fixed maturities: Held to maturity - at amortized cost (market - $2,524.6 and $2,600.0) $2,495.7 $2,497.2 Available for sale - at market (amortized cost - $3,254.9 and $2,787.6) 3,325.6 2,926.6 Equity securities - at market (cost - $16.1 and $14.1) 51.0 32.6 Investment in affiliate 16.5 20.3 Mortgage loans on real estate 68.1 70.4 Real estate 37.6 39.9 Policy loans 236.0 241.4 Short-term investments 41.4 140.7 Total investments 6,271.9 5,969.1
Liabilities and Stockholders' Equity Annuity benefits accumulated $5,365.6 $5,052.0 Life, accident and health reserves 575.4 538.3 Notes payable 114.9 167.7 Payable to affiliates, net 14.5 29.1 Deferred taxes on unrealized gains 33.3 48.0 Accounts payable, accrued expenses and other liabilities 111.3 108.1 Liabilities related to separate accounts 247.6 238.5 Total liabilities 6,462.6 6,181.7
Series B Preferred Stock (at redemption value) 49.0 17.0 Common Stock, $1 par value -100,000,000 shares authorized - 43,255,705 and 43,071,882 shares outstanding 43.3 43.1 Capital surplus 358.5 361.1 Accumulated deficit at December 31, 1992 (212.6) (212.6) Retained earnings since January 1, 1993 186.5 131.4 Unrealized gains on marketable securities, net 61.8 89.3 Total stockholders' equity 486.5 429.3
Income before extraordinary items and cumulative effect of accounting change 61.1 55.5 38.3
Year ended December 31, 1996 1995 1994 Preferred Stock: Balance at beginning of year $ 17.0 $ - $ 29.9 Exchanged for Common Stock - - (30.0) Issued during the year 32.0 17.0 - Accretion of discount - - 0.1 Balance at end of year $ 49.0 $ 17.0 $ -
Capital Surplus: Balance at beginning of year $361.1 $330.8 $301.0 Common Stock issued during the year 2.2 33.3 33.0 Common dividends declared (3.4) (3.0) (2.3) Preferred dividends declared (1.4) - (0.8) Accretion of Preferred Stock discount - - (0.1) Balance at end of year $358.5 $361.1 $330.8
Unrealized Gains (Losses), Net: Balance at beginning of year $ 89.3 ($ 29.0) $ 56.9 Change during year (27.5) 118.3 (85.9) Balance at end of year $ 61.8 $ 89.3 ($ 29.0)
CONSOLIDATED STATEMENT OF CASH FLOWS (In millions) Year ended December 31, 1996 1995 1994 Cash Flows from Operating Activities: Net income $ 55.1 $ 55.3 $ 36.1 Adjustments: Discontinued operations - 3.2 2.6 Extraordinary losses on retirement of debt 6.0 0.2 1.7 Cumulative effect of accounting change - - 0.5 Increase (decrease) in life, accident and health reserves 28.4 17.5 (1.4) Benefits to annuity policyholders 271.8 254.7 241.9 Amortization of insurance acquisition costs 34.1 12.7 7.1 Equity in net (earnings) loss of affiliate 2.2 (0.1) 2.8 Realized (gains) losses on investing activities (1.2) (15.7) 0.1 Increase in insurance acquisition costs (68.5) (34.9) (30.5) Increase in accrued investment income (7.4) (3.0) (10.1) Decrease (increase) in other assets (10.4) (12.4) 0.8 Increase (decrease) in other liabilities (6.3) 17.9 8.2 Other, net 1.7 (3.5) 2.6 305.5 291.9 262.4 Cash Flows from Investing Activities: Purchases of and additional investments in: Fixed maturity investments (1,010.1)(1,107.5)(1,189.2) Equity securities - - (0.7) Real estate, mortgage loans and other assets (26.7) (22.6) (27.9) Purchase of subsidiaries, net of cash acquired - (55.2) (14.0) Maturities and redemptions of fixed maturity investments 255.2 147.1 238.2 Sales of: Fixed maturity investments 261.0 768.5 621.9 Equity securities 1.3 2.0 4.8 Real estate, mortgage loans and other assets 27.8 8.2 27.2 Decrease (increase) in policy loans 5.4 (6.1) (16.1) (486.1) (265.6) (355.8) Cash Flows from Financing Activities: Annuity receipts 573.8 457.5 442.7 Annuity surrenders, benefits and withdrawals (517.9) (412.8) (321.0) Additions to notes payable 92.7 33.5 34.7 Reductions of notes payable (153.2) (49.1) (69.2) Issuance of Trust Originated Preferred Securities 72.4 - - Issuance of Common Stock - 37.3 - Issuance of Preferred Stock 32.0 17.0 - Cash dividends paid (4.5) (3.0) (3.1) 95.3 80.4 84.1
AAG's acquisition of Laurentian Capital Corporation ("LCC") in November 1995 was recorded as a purchase. The results of LCC's operations have been included in AAG's consolidated financial statements since its acquisition.
Insurance Acquisition Costs Unamortized insurance acquisition costs consist primarily of deferred policy acquisition costs and the present value of future profits of acquired companies. Amortization of life insurance acquisition costs includes commissions on sales of single-pay life insurance and renewal commissions on sales of multi-pay life insurance.
Deferred Policy Acquisition Costs ("DPAC") DPAC (principally commissions, advertising, underwriting, policy issuance and sales expenses that vary with and are primarily related to the production of new business) is deferred to the extent that such costs are deemed recoverable.
Present Value of Future Profits Included in insurance acquisition costs are amounts representing the present value of future profits on business in force of the acquired insurance companies, which represent the portion of the costs to acquire such companies that is allocated to the value of the right to receive future cash flows from insurance contracts existing at the date of acquisition.
Stock-Based Compensation As permitted under Statement of Financial Accounting Standards ("SFAS") No. 123, "Accounting for Stock-Based Compensation", AAG accounts for stock options and other stock-based compensation plans using the intrinsic value based method prescribed by Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees."
AAG and certain of its subsidiaries provide certain benefits to eligible retirees. Effective January 1, 1994, AAG implemented SFAS No. 112, "Employers' Accounting for Postemployment Benefits" which covers benefits to former or inactive employees (primarily those on disability) who were not deemed retired under other Company plans. The projected future cost of providing these benefits is expensed over the period the employees earn such benefits.
Held to Maturity Amortized Market Gross Unrealized Cost Value Gains Losses U. S. Government and government agencies and authorities $ - $ - $ - $ - Public utilities 393.1 405.5 13.4 (1.0) Mortgage-backed securities 659.6 686.0 27.0 (0.6) All other corporate 1,444.5 1,508.5 64.1 (0.1) $2,497.2 $2,600.0 $104.5 ($1.7)
Available for Sale Amortized Market Gross Unrealized Cost Value Gains Losses U. S. Government and government agencies and authorities $ 162.5 $ 169.9 $ 7.5 ($ 0.1) Public utilities 227.7 239.1 12.1 (0.7) Mortgage-backed securities 1,045.2 1,073.8 32.2 (3.6) All other corporate 1,352.2 1,443.8 97.9 (6.3) $2,787.6 $2,926.6 $149.7 ($10.7)
Held to Available Maturity for sale Total Purchases ($116.3) ($893.8) ($1,010.1) Maturities and paydowns 106.6 148.6 255.2 Sales 9.3 251.7 261.0 Gross gains 1.1 8.3 9.4 Gross losses (0.3) (8.3) (8.6)
Held to Available Maturity for sale Total Purchases ($280.7) ($826.8) ($1,107.5) Maturities and paydowns 50.5 96.6 147.1 Sales 1.4 767.1 768.5 Gross gains 0.8 23.2 24.0 Gross losses (0.6) (8.3) (8.9)
Held to Available Maturity for sale Total Purchases ($713.6) ($475.6) ($1,189.2) Maturities and paydowns 54.8 183.4 238.2 Sales 5.6 616.3 621.9 Gross gains 0.8 7.9 8.7 Gross losses (1.0) (9.8) (10.8)
Held to Available 1995 Maturity Maturity for Sale Total Total One year or less 3% * 3% 1% After one year through five years 10 8% 18 18 After five years through ten years 16 20 36 40 After ten years 2 8 10 9 31 36 67 68 Mortgage-backed securities 12 21 33 32 43% 57% 100% 100%
The distribution of maturities based on market value is generally the same. Mortgage-backed securities had an estimated average life of approximately 8 years at December 31, 1996.
The carrying values of investments in any entity or mortgage-backed security ("MBS") issuer in excess of 10% of stockholders' equity at December 31, 1996, other than investments issued or guaranteed by the U.S. Government or government agencies, consisted of the following fixed maturity investments (in millions):
At December 31, 1996 and 1995, AAG had no unrealized losses on its marketable equity securities. Realized gains and changes in unrealized appreciation on fixed maturity and equity security investments are summarized as follows (in millions):
Fixed Equity Tax Maturities Securities Other Effects Total Realized $ 0.8 $ - $0.4 ($ 0.4)$ 0.8 Change in unrealized (142.2) 16.4 - 44.0 (81.8)
Realized $ 15.1 $ 0.6 - ($ 5.5)$ 10.2 Change in unrealized 520.9 7.5 - (184.9) 343.5
Realized ($ 2.1) $ 2.0 - $ - ($ 0.1) Change in unrealized (485.3) (2.1) - 170.6 (316.8)
Major categories of net investment income were as follows (in millions):
1996 1995 1994 Fixed maturities $463.4 $405.2 $372.7 Other 10.8 5.7 4.0 Total investment income 474.2 410.9 376.7 Investment expenses (6.5) (5.4) (4.9) Net investment income $467.7 $405.5 $371.8
AAG's investment portfolio is managed by a subsidiary of AFG. Investment expenses included investment management charges representing approximately one-tenth of one percent of AAG's invested assets in all three years and amounting to $4.7 million in 1996 and 1995, and $4.4 million in 1994.
Investment in affiliate (carrying value of $16.5 million at December 31, 1996) reflects AAG's 5% ownership (2.7 million shares) of the common stock of Chiquita Brands International which is accounted for under the equity method. AFG and its other subsidiaries own an additional 38% interest in the common stock of Chiquita. Chiquita is a leading international marketer, producer and distributor of bananas and other quality fresh and processed food products. The market value of AAG's investment in Chiquita was approximately $34.1 million and $36.7 million at December 31, 1996 and 1995, respectively.
Unamortized insurance acquisition costs consisted of the following at December 31, (in millions): 1996 1995 Deferred policy acquisition costs $272.2 $228.2 Present value of future profits acquired 72.5 73.4 Unearned revenues (150.0) (151.8) $194.7 $149.8
At December 31, 1996, the expected rate of amortization of the present value of future profits acquired for the next five years was as follows: 11% in 1997; 10% in 1998; 9% in 1999; 8% in 2000; and 7% in 2001.
Notes payable consisted of the following at December 31, (in millions):
1996 1995 Direct obligations of AAG $ 1.3 $ - Obligations of AAG Holding: Bank Credit Line due September 1999 44.7 20.5* 9-1/2% Senior Notes due August 2001 40.8 41.5* 11-1/8% Senior Subordinated Notes due February 2003 24.1 101.4* Other subsidiary debt 4.0 4.3 Total $114.9 $167.7
During 1995, AAG repurchased $4.9 million principal amount of its Notes realizing a pretax extraordinary loss of $231,000.
During 1994, AAG repurchased $77.1 million principal amount of its Notes in exchange for approximately $69 million in cash and 810,000 shares of its Common Stock. As a result of the repurchases, AAG realized a pretax extraordinary loss of $1.5 million.
Scheduled principal payments on debt for the subsequent five years are shown below (in millions). The scheduled principal payments assume that Notes purchased are applied to the earliest scheduled retirements.
Cash interest payments were $17.4 million in 1996, $17.2 million in 1995 and $23.2 million in 1994.
In December 1996 and December 1995, AAG sold 320,000 shares and 170,000 shares, respectively, of newly issued Series B Preferred Stock for $32 million and $17 million, respectively. (See Note O.) The Series B Preferred Stock has a redemption value of $100 per share and is redeemable at AAG's option. Dividends are cumulative and payable quarterly at an annual rate of $8.50 per share.
"Retained earnings since January 1, 1993", reflects AAG's results since the acquisition of GALIC.
per share in connection with the termination of their Stock Appreciation Rights. Also in the fourth quarter of 1996, AAG issued options for 386,000 additional shares at $13.75 per share. The options vest at a rate of 20% per year and expire ten years from the date of grant.
All of the Company's former manufacturing businesses are reported as discontinued operations. During 1995, the Company's last manufacturing unit, Electromag NV, was sold and no gain or loss was recognized on the sale.
Deferred tax liabilities: Unamortized insurance acquisition costs (61.8) (52.4) Policyholder liabilities (14.5) (17.1)
Leases relate principally to certain administrative facilities and discontinued operations. Future minimum lease payments, net of sublease revenues, under operating leases having initial or remaining non-cancelable lease terms in excess of one year at December 31, 1996 are payable as follows: 1997 - $800,000; 1998 - $2.2 million; 1999 - $2.5 million; 2000 - $2.3 million; 2001 - $2.4 million; 2002 and beyond - $9.1 million.
Rental expense for operating leases was $2.6 million in 1996, $1.6 million in 1995 and $1.7 million in 1994.
The Company is continuing its clean-up activities at certain of its former manufacturing operations and third-party sites, in some cases in accordance with consent agreements with federal and state environmental agencies. Changes in regulatory standards and further investigations could affect estimated costs in the future. Management believes that reserves recorded are sufficient to satisfy the known liabilities and that the ultimate cost will not, individually, or in the aggregate, have a material adverse effect on the financial condition or results of operations of AAG. Based on prior costs and discussions with independent environmental consultants, the Company believes the remaining aggregate cost of environmental work at all sites for which it has responsibility will range from $4 million to $7 million. The reserve for environmental work was $5.3 million at December 31, 1996.
In 1991, the Company identified possible deficiencies in procedures for reporting quality assurance information to the Defense Electronics Supply Center with respect to the Company's former manufacturing operations. Over the last several years, the Company has been engaged in negotiations with the United States Government with respect to the settlement of claims the Government might have arising out of the reporting deficiencies. The Company believes it has sufficient reserves to cover the estimated settlement amount.
N. STATUTORY INFORMATION; RESTRICTIONS ON TRANSFERS OF FUNDS AND ASSETS OF SUBSIDIARIES
The amount of dividends which can be paid by GALIC without prior approval of regulatory authorities is subject to restrictions relating to capital and surplus and statutory net income. Based on net income at December 31, 1996, GALIC may pay approximately $66.2 million in dividends in 1997 without prior approval.
Related Party Transactions In the fourth quarter of 1994, AAG purchased Annuity Investors Life Insurance Company ("AILIC", formerly Carillon Life Insurance Company) from Great American Insurance Company ("GAI") for $9.0 million in cash. At December 31, 1994, AILIC had statutory assets of $9.0 million and statutory surplus of $6.3 million. AAG acquired AILIC primarily for its variable annuity licenses.
In connection with AAG's purchase of GALIC from GAI in 1992, GAI agreed to neutralize the financial effects on GALIC of the adoption of an actuarial guideline with respect to non-traditional life insurance and annuity products. In satisfaction of this obligation, (i) GAI has agreed to purchase, at AAG's option, up to $57 million of AAG Preferred Stock and (ii) terms of GALIC's investment management services contract with AFG were modified to reduce the fees owed under certain circumstances. In December 1996 and 1995, AAG sold $21.7 million and $17.0 million, respectively, of its Series B Preferred Stock to GAI; the proceeds were contributed to GALIC. Also in December 1996, AAG sold $10.3 million of its Series B Preferred Stock to AFC.
Liabilities Annuity benefits accumulated(a) $5,365.6 $5,180.0 $5,052.0 $4,887.0 Notes payable(b) 114.9 119.0 167.7 177.7
(b) Carrying values do not reflect issue costs of $1.3 million at December 31, 1996 and $3.6 million at December 31, 1995.
(c) Carrying value does not reflect issue costs of $2.6 million at December 31, 1996.
When available, fair values are based on prices quoted in the most active market for each security. If quoted prices are not available, fair value is estimated based on present values, discounted cash flows, fair value of comparable securities or similar methods. The fair value of short-term investments, mortgage loans on real estate and policy loans approximate their carrying value. The fair value of the liability for annuities in the payout phase is assumed to be the present value of the anticipated cash flows, discounted at current interest rates. Fair value of annuities in the accumulation phase is assumed to be the policyholders' cash surrender amount.
Other The Company has a defined benefit pension plan covering former U.S. employees of its discontinued manufacturing operations. Pension benefits are based upon past service with the Company and compensation levels. Contributions are made by the Company in amounts necessary to satisfy requirements of ERISA. At December 31, 1996 and 1995, respectively, pension liabilities of $19.0 million and $11.8 million were included in the balance sheet.
First Second Third Fourth Total 1996 Quarter Quarter Quarter Quarter Year Realized gains (losses) $ 0.3 $ 0.6 $ 0.5 ($ 0.2) $ 1.2 Total revenues 139.0 150.9 145.9 141.5 577.3
Income from continuing operations 11.4 12.2 16.6 18.5 58.7 Discontinued operations - - - (3.2) (3.2) Extraordinary items - - - (0.2) (0.2) Net income 11.4 12.2 16.6 15.1 55.3
Earnings (loss) per common share(a) Continuing operations $0.29 $0.31 $0.41 $0.43 $1.45 Discontinued operations - - - (0.08) (0.08) Extraordinary items - - - - - Net income per common share $0.29 $0.31 $0.41 $0.35 $1.37
(a) Quarterly earnings per share do not add to year-to-date amounts in 1995 due to the issuance of common shares.
December 31, Assets: 1996 1995 Cash and short-term investments $ 1.9 $ 1.4 Investment in subsidiaries(a)(b) 384.8 687.0 Note receivable from AAG Holding(b) 122.0 - Other assets 47.8 20.0 $556.5 $708.4 Liabilities and Capital: Accounts payable, accrued expenses and other liabilities $ 44.6 $ 49.4 Payables to affiliates 24.2 52.3 Notes payable(b)(c) 1.2 177.4 Stockholders' equity(a) 486.5 429.3 $556.5 $708.4
Year ended December 31, 1996 1995 1994 Revenues: Equity in undistributed earnings of subsidiaries $ 47.6 $ 64.7 $ 47.3 Capital distribution from subsidiaries 61.2 54.2 44.0 Other revenues 10.6 1.7 0.4 119.4 120.6 91.7 Costs and Expenses: Interest and other financing expenses 15.2 19.0 21.9 Other expenses 25.7 10.9 6.6 40.9 29.9 28.5 Income from continuing operations before income taxes 78.5 90.7 63.2 Provision for income taxes 17.4 32.0 22.3 Income from continuing operations 61.1 58.7 40.9
Investing Activities: Purchase of AAG Holding Company debentures (23.1) - - Increase in intercompany notes (23.8) - - Purchase of Laurentian Capital Corporation, net of cash acquired - (63.6) - Sales of real estate and other assets 0.2 Additional investments in subsidiaries - - (9.3) Sale of AILIC to GALIC - 6.5 - (46.7) (57.1) (9.3)
Cash and short-term investments at beginning of period 1.4 1.9 10.4
Cash and short-term investments at end of period $ 1.9 $ 1.4 $ 1.9
4.0 Registrant has no outstanding debt issues exceeding 10% of the assets of Registrant and consolidated subsidiaries.
10.6 Common Stock Registration Agreement, dated December 31, 1992 between Chiquita Brands International, Inc. and Great American Life Insurance Company incorporated herein by reference to Exhibit 10.24 to the Registrant's Registration Statement on Form S-2 dated January 7, 1993.
Signed: March 25, 1997 BY: Carl H. Lindner Chairman of the Board and Chief Executive Officer
Senior Vice President, March 25, 1997 William J. Maney Treasurer and Chief Financial Officer (Principal Accounting Officer)