Just as your pulse is checked during a routine physical, free cash flow is used as an indicator of a company's health. It equals the cash brought in from operations minus the money needed to pay the bills. Think about leftover money in your checking account after you pay this month's bills.

Investors and analysts see this leftover money as a gauge of a company's ability to perform. It is available for transactions such as handing out dividends and working on new products.

Some argue free cash flow is wrongly overshadowed by the emphasis often placed on earnings. Earnings numbers can be manipulated and don't always tell the whole story -- and earnings don't mean much if there's nothing left over after a company pays its expenses. Even if you bring in a six-figure salary, but no money left after paying the bills, are you in great financial shape?

You don't have to be Einstein to figure out free cash flow. To calculate the number, subtract the company's expenditures and dividends from its operating cash flow.

If the free cash flow is written in red ink, it doesn't necessarily signal curtains. This is common for young companies looking to grow. It also could be a result of heavy investments, which in the long run could be worth a standing ovation.

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Monday, July 28, 2008

American National Announces Second Quarter 2008 Results

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GALVESTON, Texas, July 28, 2008 /PRNewswire-FirstCall via COMTEX/ ----American National Insurance Company (Nasdaq: ANAT) announced a second quarter 2008 net loss of $2,935,000 ($0.11 per diluted share) compared to net income of $58,994,000 ($2.22 per diluted share) for the same period in 2007, a 105% decrease. The loss in 2008 is primarily the result of catastrophe losses in the property and casualty business.

After tax operating earnings for the second quarter were a loss of $141,000 ($0.01 per diluted share) compared with a gain of $53,923,000 ($2.03 per diluted share) for the same period in 2007. After tax operating earnings exclude after tax net realized investment gains and losses.

After tax net realized investment losses were $2,794,000 ($0.10 per diluted share) for the second quarter of 2008 compared with net realized investment gains of $5,071,000 ($0.19 per diluted share) for the same period in 2007.

YEAR-TO-DATE RESULTS

Net income for the six months ended June 30, 2008 totaled $36,090,000 ($1.35 per diluted share) compared to $108,196,000 ($4.06 per diluted share) for the first half of 2007. The after tax operating earnings for the first six months totaled $42,515,000 ($1.59 per diluted share) compared to $104,706,000 ($3.93 per diluted share) for the same period in 2007. After tax operating earnings exclude after tax net realized investment gains and losses which totaled a net realized loss of $6,425,000 ($0.24 per diluted share) for the first half of 2008 compared to a net realized gain of $3,490,000 ($0.13 per share) in the same period of 2007.

OPERATIONS

Total revenue for the first half of 2008 decreased 7.0% to $1,455,268,000, compared with the $1,564,523,000 total reported for the first half of 2007. Current year revenues have been impacted by an $82.6 million decrease in sales of single premium immediate annuities and $27.0 million of other-than-temporary impairments on securities investments. Sales of deferred annuities increased in the first half of 2008 with policyholder deposits on interest sensitive products, both life insurance and annuities, totaling $1.3 billion as compared to $716 million in the first half of 2007.

Operating income was significantly impacted by catastrophe losses in the company's property and casualty operations. The second quarter saw the most tornadoes since the National Weather Service began counting them in 1950, causing a large part of an estimated $6.03 billion in industrywide losses in the quarter, according to an estimate by the Insurance Services Office, Inc. For American National, this resulted in catastrophe losses of $53.8 million, net of tax, through June 2008 as compared to only $4.1 million in losses, net of tax, for the first half of 2007.

 American National Insurance Company
   COMPARATIVE OPERATIONAL HIGHLIGHTS Compiled on a GAAP basis (Unaudited) Quarter Ended Six Months Ended June 30, June 30, 2008
   2007 2008 2007 Revenues $731,189,000 $819,285,000 $1,455,268,000 $1,564,523,000 After-tax earnings: Operating earnings * $(141,000)
   $53,923,000 $42,515,000 $104,706,000 Net realized investment gains $(2,794,000) $5,071,000 $(6,425,000) $3,490,000 Net income
   $(2,935,000) $58,994,000 $36,090,000 $108,196,000 Per share earnings: Operating earnings * $(0.01) $2.03 $1.59 $3.93 Net realized
   investment gains $(0.10) $0.19 $(0.24) $0.13 Net income - Diluted $(0.11) $2.22 $1.35 $4.06 Net income - Basic $(0.11) $2.23
   $1.36 $4.09 Weighted average number of shares Upon which computations are based: Diluted 26,646,008 26,629,248 26,646,008
   26,629,248 Basic 26,479,832 26,479,832 26,479,832 26,479,832 As of June 30, 2008 December 31, 2007 Book value per diluted
   share $134.28 $140.28 * Operating earnings exclude after-tax realized investment gains and losses. The sum of Operating earnings
   and Realized investment gains (losses) is equal to Net income.

American National Insurance Company is headquartered in Galveston, Texas. American National has over $18.9 billion in assets and is rated A+ (Superior) by A.M. Best Company, and AA (Very Strong) by Standard & Poor's. The American National family of companies offers a broad line of products and services, which include life insurance, annuities, health insurance, credit insurance, pension plan services and property and casualty insurance for personal lines, agribusiness, and targeted commercial exposures. American National's major insurance subsidiaries include American National Life Insurance Company of Texas, Standard Life and Accident Insurance Company, Garden State Life Insurance Company, American National Property and Casualty Company, Farm Family Life Insurance Company, Farm Family Casualty Insurance Company and United Farm Family Insurance Company.

For more information, including company news and investor relations information, visit the company's web site at http://www.anico.com.

The statements contained in this release that are not historical statements, including statements regarding future performance, plans and projections, are forward-looking statements based on management's current expectations. These statements involve certain risks and uncertainties detailed in the Company's financial statements. Actual results may differ materially from these statements due to changes in business, regulatory, competitive, market, economic, and political factors that are beyond our control. We disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by law.

SOURCE American National Insurance Company

http://www.anico.com

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