AAG and GALIC rent office space in Cincinnati totaling approximately 105,000 square feet under leases expiring in 1996 through 1999. Several of the Company's non-insurance subsidiaries lease marketing and administrative offices in locations throughout the United States.
Prairie's home office building in Rapid City, South Dakota, contains approximately 44,000 square feet, of which approximately three-fourths is utilized for Company purposes. The remainder of the building is leased to unaffiliated tenants. Prairie also leases marketing and administrative space in several locations throughout the United States.
Earnings (loss) per common share: Continuing operations $1.45 $1.05 $1.41 ($0.50) ($0.26) Discontinued operations (0.08) (.07) (.27) (.94) (2.66) Extraordinary items - (.05) (.10) - - Changes in accounting principles - (.01) - (.17) - Net income (loss) $1.37 $0.92 $1.04 ($1.61) ($2.92)
Balance Sheet Data: Total assets $6,611.0$5,089.9$4,913.8 $4,480.4 $170.1 Notes payable 167.7 183.3 225.9 230.9 27.9 Net unrealized gains (losses) included in stockholders' equity 89.3 (29.0) 56.9 28.4 - Total stockholders' equity 429.3 204.4 250.3 186.6 108.5
Selected Financial Data of GALIC Prior to its Acquisition by AAG (in millions)
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. AFG, the parent of GAI, beneficially owned approximately 81% of AAG's Common Stock at February 29, 1996.
AAG is organized as a holding company with nearly all of its operations being conducted by its subsidiaries. The parent corporation, however, has continuing expenditures for administrative expenses, corporate services, liabilities in connection with discontinued operations and, most importantly, for the payment of interest and principal on borrowings. Since its continuing business is financial in nature, AAG does not prepare its consolidated financial statements using a current-noncurrent format. Consequently, certain traditional ratios and financial analysis tests are not meaningful.
Sources and Uses of Funds On December 31, 1992, AAG acquired Great American Life Insurance Company ("GALIC") for $468 million. To finance the acquisition, AAG used cash on hand, issued $156 million of Common and Preferred Stock to Great American Insurance Company ("GAI") and borrowed $230 million. The Company refinanced substantially all of that indebtedness with the proceeds of the sale of $125 million principal amount of 11-1/8% Notes in February 1993 and $100 million principal amount of 9-1/2% Notes in August 1993.
The Company has financed a portion of the cost of its Note repurchases with borrowings under its line of credit with a group of commercial banks. The line of credit matures in 1999; the Company has no other scheduled principal maturities until 2001.
In December 1995, AAG sold $17 million of newly issued 8.5% Series B Preferred Stock to GAI. (See Note N to Consolidated Financial Statements.)
The amount of capital distributions which can be paid by GALIC is subject to restrictions relating to statutory surplus and earnings. In addition, any dividend or distribution paid from other than earned surplus is considered an extraordinary dividend and may be paid only after regulatory approval. (See Note M to Consolidated Financial Statements.) The maximum amount of dividends payable by GALIC in 1996 without prior regulatory approval is approximately $58.6 million. In January 1996, GALIC paid a capital distribution of $11.0 million to AAG.
losses of $279 million at December 31, 1994. This increase, representing approximately 10% of the carrying value of AAG's bond portfolio, resulted from a decrease in the general level of interest rates.
At December 31, 1995, AAG's mortgage-backed securities ("MBSs") portfolio represented approximately 32% of fixed maturity investments compared to 28% at December 31, 1994. This increase resulted from the acquisition of LCC, which had a higher concentration of invested assets in MBSs. As of December 31, 1995, interest only (I/O), principal only (P/O) and other "high risk" MBSs represented less than six-tenths of one percent of total assets. AAG invests primarily in MBSs which have a reduced risk of prepayment. In addition, the majority of MBSs held by AAG were purchased at a discount. Management believes that the structure and discounted nature of the MBSs will minimize the effect of prepayments on earnings over the anticipated life of the MBS portfolio.
Approximately 90% of AAG's MBSs are rated "AAA" with substantially all being of investment grade quality. The majority are collateralized by GNMA, FNMA and FHLMC single-family residential pass-through certificates. The market in which these securities trade is highly liquid. Aside from interest rate risk, AAG does not believe a material risk (relative to earnings or liquidity) is inherent in holding such investments.
General The results of LCC and its principal subsidiaries, Prairie States Life Insurance Company ("Prairie") and Loyal American Life Insurance Company ("Loyal"), are included in the Company's income statement subsequent to their acquisition on November 13, 1995.
Management believes net operating earnings (or "core" earnings) is helpful in comparing the operating performance of AAG with that of similar companies. Net operating earnings for 1995 and 1994 were up 18% and 17%, respectively, over the comparable prior years. Net operating earnings should not be considered an alternative to net income as an indication of AAG's overall performance.
GALIC: 1995 1994 1993 Annuity receipts: Flexible Premium Deferred Annuities: First year $ 42 $ 39 $ 47 Renewal 196 208 223 238 247 270 Single Premium Deferred Annuities 219 196 130 Total annuity receipts $457 $443 $400
Life, Accident and Health Premiums and Benefits Life, accident and health revenues and expenses reflect primarily premiums and benefits of Prairie and Loyal since their acquisition in November 1995.
Annuity Benefits Annuity benefits reflects primarily interest credited to annuity policyholders' funds accumulated. All of GALIC's products are fixed rate annuities which permit GALIC to change the crediting rate at any time (subject to minimum interest rate guarantees of 3% to 4% per annum). As a result, management has been able to react to changes in market interest rates and maintain a desired interest rate spread without a substantial effect on persistency. Annuity benefits increased 5% in 1995 and 6% in 1994 primarily due to an increase in average annuity benefits accumulated.
DPAC amortization decreased 52% in 1994. This decrease reflects evaluations during 1993 and 1994 of DPAC assumptions, which resulted in updating certain factors, primarily the time frame over which DPAC is amortized. The time frame was extended to more accurately reflect the estimated lives of policies and the expected gross profits resulting from these policies. The overall effect of the evaluations was to increase the estimated effective lives of the policies from approximately five years to approximately ten years. Estimates of lives and expected gross profits were refined based on actual experience of the Company.
Consolidated Statement of Changes in Stockholders' Equity: Years Ended December 31, 1995, 1994 and 1993
Consolidated Statement of Cash Flows: Years Ended December 31, 1995, 1994 and 1993
The information required by the following Items will be included in AAG's definitive Proxy Statement for the 1996 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:
We have audited the accompanying consolidated balance sheets of American Annuity Group, Inc. and subsidiaries as of December 31, 1995 and 1994, and the related consolidated statements of operations, changes in stockholders' equity and cash flows for each of the three years in the period ended December 31, 1995. Our audits also included the financial statement schedules listed in the Index at Item 14(a). These financial statements and schedules are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements and schedules based on our audits.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of American Annuity Group, Inc. and subsidiaries at December 31, 1995 and 1994, and the consolidated results of their operations and their cash flows for each of the three years in the period ended December 31, 1995, in conformity with generally accepted accounting principles. Also, in our opinion, the related financial statement schedules, when considered in relation to the basic financial statements taken as a whole, present fairly in all material respects the information set forth therein.
As discussed in Note B to the consolidated financial statements, the Company made an accounting change in 1994.
December 31, 1995 1994 Assets Investments: Fixed maturities: Held to maturity - at amortized cost (market - $2,600.0 and $3,062.4) $2,497.2 $3,273.7 Available for sale - at market (amortized cost - $2,787.6 and $1,326.4) 2,926.6 1,258.6 Equity securities - at market (cost - $14.1 and $10.7) 32.6 21.7 Investment in affiliate 20.3 20.8 Mortgage loans on real estate 70.4 47.2 Real estate 39.9 28.0 Policy loans 241.4 185.5 Short-term investments 140.7 26.0 Total investments 5,969.1 4,861.5
Cash 28.7 36.7 Accrued investment income 87.4 77.7 Unamortized insurance acquisition costs, net 149.8 65.1 Other assets 137.5 48.9 Assets held in separate accounts 238.5 - Total assets $6,611.0 $5,089.9
Series B Preferred Stock (at redemption value) 17.0 - Common Stock, $1 par value -100,000,000 shares authorized - 43,071,882 and 39,141,080 shares outstanding 43.1 39.1 Capital surplus 361.1 330.8 Accumulated deficit at December 31, 1992 (212.6) (212.6) Retained earnings since January 1, 1993 131.4 76.1 Unrealized gains (losses) on marketable securities, net of deferred income taxes and insurance adjustments 89.3 (29.0) Total stockholders' equity 429.3 204.4 Total liabilities and stockholders' equity $6,611.0 $5,089.9
Net income applicable to Common Stock $ 55.3 $ 35.2 $ 36.4
Year ended December 31, 1995 1994 1993 Preferred Stock: Balance at beginning of year $ - $ 29.9 $ 29.4 Exchanged for Common Stock - (30.0) - Issued during the year 17.0 - - Accretion of discount - 0.1 0.5 Balance at end of year $ 17.0 $ - $ 29.9
Retained Earnings Since January 1, 1993: Retained earnings from January 1, 1993 to beginning of year $ 76.1 $ 40.0 $ - Net income 55.3 36.1 40.0 Balance at end of year $131.4 $ 76.1 $ 40.0
Unrealized Gains (Losses), Net: Balance at beginning of year ($ 29.0) $ 56.9 $ 28.4 Change during year 118.3 (85.9) 28.5 Balance at end of year $ 89.3 ($ 29.0) $ 56.9
CONSOLIDATED STATEMENT OF CASH FLOWS (In millions) Year ended December 31, 1995 1994 1993 Cash Flows from Operating Activities: Net income $ 55.3 $ 36.1 $ 40.0 Adjustments: Discontinued operations 3.2 2.6 9.6 Loss on retirement of debt 0.2 1.7 3.4 Cumulative effect of accounting change - 0.5 - Increase (decrease) in life, accident and health reserves 17.5 (1.4) (0.6) Benefits to annuity policyholders 254.7 241.9 228.6 Amortization of insurance acquisition costs 12.7 7.1 14.7 Equity in net (earnings) loss of affiliate (0.1) 2.8 2.9 Realized (gains) losses on investing activities (15.7) 0.1 (35.5) Increase in insurance acquisition costs (34.9) (30.5) (28.0) Other, net (1.0) 1.5 (1.8) 291.9 262.4 233.3 Cash Flows from Investing Activities: Purchases of and additional investments in: Fixed maturity investments (1,107.5)(1,189.2)(2,015.1) Equity securities - (0.7) (5.6) Real estate, mortgage loans and other assets (22.6) (27.9) (59.3) Purchase of subsidiaries, net of cash acquired (55.2) (14.0) - Maturities and redemptions of fixed maturity investments 147.1 238.2 379.2 Sales of: Fixed maturity investments 768.5 621.9 1,202.0 Equity securities 2.0 4.8 30.6 Real estate, mortgage loans and other assets 8.2 27.2 2.5 Increase in policy loans (6.1) (16.1) (8.1) Other, net - - 2.9 (265.6) (355.8) (470.9) Cash Flows from Financing Activities: Annuity receipts 457.5 442.7 400.1 Annuity benefits and withdrawals (412.8) (321.0) (337.9) Additions to notes payable 33.5 34.7 225.0 Reductions of notes payable (49.1) (69.2) (230.0) Issuance of Common Stock 37.3 - - Issuance of Preferred Stock 17.0 - - Cash dividends paid (3.0) (3.1) (4.1) 80.4 84.1 53.1
Net increase (decrease) in cash and short-term investments 106.7 (9.3) (184.5)
In accordance with guidance issued by the Financial Accounting Standards Board in November 1995, AAG reassessed the classifications of its investment securities and transferred approximately $1.1 billion of its fixed maturity portfolio from "held to maturity" to "available for sale". The reclassification resulted in an increase of $55.6 million in the carrying value of fixed maturity investments and an increase of $36.1 million in stockholders' equity. The transfer had no effect on net earnings.
Investment in Affiliate AAG's investments in equity securities of companies that are 20% to 50% owned by AFG and its subsidiaries are carried at cost, adjusted for a proportionate share of their undistributed earnings or losses.
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. These amounts are amortized with interest over the estimated remaining life of the acquired policies for annuities and universal life products and over the expected premium paying period for traditional life and health insurance products.
Life, Accident and Health Benefit Reserves Liabilities for future policy benefits under traditional ordinary life, accident and health policies are computed using the net level premium method. Computations are based on anticipated investment yields (primarily 7%), mortality, morbidity and surrenders and include provisions for unfavorable deviations. Reserves are modified as necessary to reflect actual experience and developing trends.
Deferred income tax assets and liabilities are determined based on differences between financial reporting and tax bases and are measured using enacted tax rates. The Company recognizes deferred tax assets if it is more likely than not that a benefit will be realized. Current and deferred tax assets and liabilities of companies in AFC's consolidated tax group are aggregated with other amounts receivable from or payable to affiliates.
AAG paid approximately $106 million for the outstanding common stock of LCC and repaid $45 million of LCC indebtedness concurrently with the acquisition. GALIC provided approximately $90 million of the purchase price in exchange for Prairie and Loyal. AAG funded the balance of the cost of acquiring LCC with the proceeds from a Common Stock rights offering completed in August 1995, borrowings under its line of credit, and cash on hand.
The following table provides certain unaudited consolidated proforma results of operations assuming the acquisition of LCC had occurred at the beginning of each period presented (in millions, except per share amounts).
"Investing activities" related to fixed maturity investments during 1995 included in AAG's Consolidated Statement of Cash Flows consisted of the following (in millions):
Certain securities classified as "held to maturity" were sold for losses of $0.2 million in 1995 and $0.6 million in 1994, respectively, due to deterioration in the issuers' creditworthiness.
Held to Available 1994 Maturity Maturity for Sale Total Total One year or less 1% * 1% * After one year through five years 13 5% 18 15% After five years through ten years 18 22 40 44 After ten years 2 7 9 13 34 34 68 72 Mortgage-backed securities 12 20 32 28 46% 54% 100% 100%
Issuer Amount Prudential Home MBS (18 different issues) $118.9 Residential Funding MBS (16 different issues) 96.3 General Electric Capital MBS (10 different issues) 88.8 Countrywide MBS (17 different issues) 80.3 Resolution Trust Corporation MBS 58.2 Securitized Asset Sales, Inc. 56.1 Georgia-Pacific Corporation 43.6
Realized ($ 2.1) $ 2.0 $ 0.0 ($ 0.1) Change in unrealized (485.3) (2.1) 170.6 (316.8)
AAG's investment portfolio is managed by a subsidiary of AFG. Investment expenses included investment management charges of $4.7 million in 1995 and $4.4 million in both 1994 and 1993 which represented approximately one-tenth of one percent of AAG's invested assets in all three years.
In the first quarter of 1994, AAG recorded a pretax extraordinary charge of $1.1 million ($0.7 million net of tax), representing its proportionate share of Chiquita's loss on the retirement of debt.
1995 1994 DPAC - annuities $224.6 $220.8 DPAC - life policies 3.6 3.1 Present value of future profits acquired 73.4 - Unearned revenues (151.8) (158.8) $149.8 $ 65.1
At December 31, 1995, the expected rate of amortization of the present value of future profits acquired for the next five years was as follows: 10% in 1996; 9% in 1997; 9% in 1998; 8% in 1999; and 7% in 2000.
1995 1994 Direct obligations of AAG: 11-1/8% Senior Subordinated Notes due February 2003 $101.4 $103.9 9-1/2% Senior Notes due August 2001 41.5 44.0 Bank Credit Line due September 1999 20.5 30.0 Subsidiary debt 4.3 5.4 Total $167.7 $183.3
AAG has a $75 million revolving credit agreement with four banks. Loans under the credit agreement bear interest at floating rates based on prime or Eurodollar rates and are collateralized by 25% of the Common Stock of GALIC. At December 31, 1995, the average rate on these borrowings was 6.83%.
In connection with the GALIC acquisition, AAG borrowed $180 million under a Bank Term Loan Agreement and $50 million under a Bridge Loan. In 1993, AAG sold $225 million principal amount of Notes to the public and used the proceeds to repay the Bank and Bridge Loans. As a result, AAG recorded an extraordinary loss of $5.2 million ($3.4 million net of tax) representing unamortized debt issue costs which were written off upon retirement of the bank debt.
AAG has no scheduled principal payments on its 9-1/2% Notes and 11-1/8% Notes until 2001. Interest payments were $17.2 million in 1995, $23.2 million in 1994 and $11.7 million in 1993.
On December 28, 1995, AAG sold 170,000 shares of newly issued Series B Preferred Stock to Great American Insurance Company ("GAI") for $17 million. (See Note N to Consolidated Financial Statements.) 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 at the rate of $8.50 per share per annum.
AAG's dividend paying capability is limited by certain customary debt covenants to amounts based on cumulative earnings and losses, debt repurchases, capital transactions and other items.
In 1995, AAG recorded a $5.0 million pretax charge for discontinued operations. This charge represents primarily additional reserves related to possible deficiencies by AAG's predecessor in reporting quality assurance information in connection with certain military related sales prior to 1991.
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, 1995, the actuarial value of the benefit obligations, discounted at 6.75%, exceeded the plan assets by $11.8 million, which has been included in other liabilities in the balance sheet.
Deferred tax liabilities: Unamortized insurance acquisition costs (52.4) (20.8) Policyholder liabilities (17.1) (12.8)
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, 1995 are payable as follows: 1996 - $2.0 million; 1997 - $1.8 million; 1998 - $1.2 million; 1999 - $780,000; 2000 - $510,000; 2001 and beyond - $1.2 million.
Rental expense for operating leases was $1.6 million in 1995, $1.7 million in 1994 and $900,000 in 1993.
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
M. STATUTORY INFORMATION; RESTRICTIONS ON TRANSFERS OF FUNDS AND ASSETS OF SUBSIDIARIES
1995 1994 1993 GALIC Policyholders' surplus $272.8 $255.9 Asset valuation reserve 90.2 79.5 Interest maintenance reserve 32.2 27.7
Pretax earnings from operations $ 85.8 $ 83.4 $73.1 Net earnings from operations 60.5 53.4 51.1 Net earnings 71.4 54.2 44.0
Loyal Policyholders' surplus $ 35.2 $ 33.6 Asset valuation reserve 2.9 2.4 Interest maintenance reserve 0.8 0.9
Pretax earnings from operations $ 4.3 $ 3.5 $ 1.3 Net earnings from operations 2.3 3.4 1.8 Net earnings 2.4 5.5 1.8
Related Party Transactions In the fourth quarter of 1994, AAG purchased Annuity Investors Life Insurance Company ("AILIC", formerly Carillon Life Insurance Company) from 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. On December 28, 1995, AAG sold $17 million of newly issued Series B Preferred Stock to GAI; the proceeds were contributed to GALIC.
Net investment income includes approximately $1 million in 1995, 1994 and 1993 of payments from a subsidiary of AFG for the rental of an office building owned by GALIC.
1995 1994 Carrying Estimated Carrying Estimated Value Fair Value Value Fair Value Assets Fixed maturity investments $5,423.8 $5,526.6 $4,532.3 $4,321.0 Equity securities 32.6 32.6 21.7 21.7 Investment in affiliate 20.3 36.7 20.8 36.4
Liabilities Annuity benefits accumulated (a)$4,979.3 $4,887.0 $4,556.1 $4,510.0 Notes payable (b) 164.1 177.7 179.2 182.6
(a) Carrying values are shown net of deferred policy acquisition costs of $72.7 million at December 31, 1995 and $62.0 million at December 31, 1994.
Unadjusted Asset Effect of Reported (Liability) SFAS 115 Amount Fixed maturities - available for sale $2,787.6 $139.0 $2,926.6 Equity securities 14.1 18.5 32.6 Unamortized insurance acquisition costs, net 155.0 (5.2) 149.8 Annuity benefits accumulated (5,037.0) (15.0) (5,052.0) Deferred income taxes on net unrealized gains - (48.0) (48.0) Unrealized gains on marketable securities, net $ 89.3
Other Several proposals have been made in recent years to change the federal income tax system. Some proposals included changes in the method of treating investment income and tax-deferred income. To the extent a new law reduces or eliminates the tax-deferred status of annuities, the Company's operations could be materially affected.
The following table represents quarterly results of operations for the years ended December 31, 1995 and 1994 (in millions, except per share data).
First Second Third Fourth Total 1995 Quarter Quarter Quarter Quarter Year Realized gains $ 0.1 $ - $ 6.9 $ 8.7 $ 15.7
(b) Quarterly earnings per share do not add to year-to-date amounts due to issuance of shares in conjunction with the rights offering.
Selected Quarterly Financial Data is included in Note O to the Consolidated Financial Statements.
Date of Report Item Reported November 28, 1995 Acquisition of Laurentian Capital Corporation
Year ended December 31, 1995 1994 1993 Revenues: Equity in undistributed earnings of subsidiaries $ 64.7 $ 47.3 $ 97.2 Dividends from GALIC 54.2 44.0 18.2 Other revenues 1.7 0.4 0.5 120.6 91.7 115.9 Costs and Expenses: Interest on borrowings and other debt expenses 19.0 21.9 22.5 Provision for GALIC relocation expenses - - 8.0 Other expenses 10.9 6.6 5.4 29.9 28.5 35.9 Income from continuing operations before income taxes 90.7 63.2 80.0 Provision for income taxes 32.0 22.3 27.0 Income from continuing operations 58.7 40.9 53.0
Extraordinary items, net of tax (0.2) (1.7) (3.4) Cumulative effect of accounting change, net of tax - (0.5) - Net Income $ 55.3 $ 36.1 $ 40.0
Cash and short-term investments at beginning of period 1.9 10.4 8.1
Cash and short-term investments at end of period $ 1.4 $ 1.9 $10.4
AMERICAN ANNUITY GROUP, INC. INDEX TO EXHIBITS Number Exhibit Description 2.0 Agreement and Plan of Merger dated as of May 25, 1995 incorporated by reference to the Schedule 13D filed by American Premier Group, Inc. on June 2, 1995 with respect to the equity securities of Laurentian Capital Corporation.
4.2 Indenture dated as of August 18, 1993, between the Registrant and NationsBank, National Association, as Trustee, relating to the Registrant's 9-1/2% Senior Notes due 2001, incorporated herein by reference to Exhibit 4.1 to the Registrant's Registration Statement on Form S-2 dated August 11, 1993.
10.1 Agreement of Allocation of Payment of Federal Income Taxes ("American Annuity Tax Allocation Agreement"), dated December 31, 1992, between American Financial Corporation and the Registrant incorporated herein by reference to Exhibit 10.12 to the Registrant's Registration Statement on Form S-2 dated January 7, 1993.
10.7 American Annuity Group's 1993 Stock Appreciation Rights Plan, incorporated herein by reference to Exhibit 10.8 to the Registrant's Form 10-K for 1993. E-1
27.0 Financial Data Schedule for 1995 - included in Report filed electronically with the Securities and Exchange Commission.
27.1 Financial Data Schedule for 1994 - reclassified to conform to the current year's presentation - included in Report filed electronically with the Securities and Exchange Commission.
s/CARL H. LINDNER Chairman of the Board March 18, 1996 Carl H. Lindner of Directors