FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For Quarter Ended June 30, 1994 Commission file number 1-5955
Jefferson-Pilot Corporation
(Exact name of registrant as specified in its charter)
North Carolina 56-0896180
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
100 North Greene Street, Greensboro, North Carolina 27401
(Address of principal executive offices) (Zip Code)
(910) 691-3441
(Registrant's telephone number, including area code)
Indicate whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months and (2) has been subject to such filing requirements
for the past 90 days. Yes x No
Number of shares of common stock outstanding at June 30, 1994 48,470,204
<PAGE>
JEFFERSON-PILOT CORPORATION
INDEX
- Page No. -
Part I. Financial Information
Consolidated Condensed Balance Sheets -
June 30, 1994 and December 31, 1993 3
Consolidated Condensed Statements of Income
- Three Months and Six Months Ended
June 30, 1994 and 1993 4
Consolidated Condensed Statements of Changes
in Retained Earnings - Three Months and Six
Months Ended June 30, 1994 and 1993 5
Consolidated Condensed Statements of Cash
Flows - Six Months Ended June 30, 1994
and 1993 6
Notes to Consolidated Condensed Financial
Statements 7
Management's Discussion and Analysis of
Financial Condition and Results of
Operations 11
Part II. Other Information 15
Signature 16
2
<PAGE>
PART I. FINANCIAL INFORMATION
JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(In Thousands)
June 30 December 31
Assets 1994 1993
(Unaudited) (Note 1)
Cash and investments:
Debt securities available for sale (Note 2) $ 1,730,114 $ 0
Debt securities held to maturity (Note 2) 1,841,863 0
Debt securities 0 3,221,878
Equity securities available for sale (Note 2) 844,070 0
Equity securities 0 833,440
Cash and all other investments 881,415 893,182
Accrued investment income 69,343 69,327
Accounts receivable and agents'
balances 53,893 60,526
Accounts receivable - reinsurance 28,268 25,793
Property and equipment, net 104,566 98,434
Deferred policy acquisition costs 293,432 277,731
Other assets 175,309 160,310
$ 6,022,273 $ 5,640,621
=========== ===========
Liabilities and Stockholders' Equity
Liabilities:
Policy liabilities $ 3,594,134 $ 3,454,313
Income tax liabilities 167,425 184,295
Obligations under repurchase agreements (Note 4) 266,735 0
Short term notes payable 45,125 39,700
Accrued expenses 74,980 76,894
Unearned investment income 4,961 5,020
Other liabilities 122,362 147,328
4,275,722 3,907,550
Stockholders' Equity:
Common stock 60,588 61,831
Retained earnings 1,377,575 1,339,672
Net unrealized gains on securities,
net of income tax effect (Note 2) 308,388 331,568
1,746,551 1,733,071
$ 6,022,273 $ 5,640,621
=========== ===========
See notes to consolidated condensed financial statements.
3
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<TABLE>
JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(In Thousands Except Shares Outstanding and Per Share Amounts)
<CAPTION>
Three Months Ended Six Months Ended
June 30 June 30
1994 1993 1994 1993
<S> <C> <C> <C> <C>
Revenue: (Unaudited) (Unaudited) (Unaudited) (Unaudited)
Premiums
Life and annuity $ 43,547 $ 46,176 $ 87,754 $ 89,483
Accident and health 101,172 94,071 197,790 191,245
Other considerations 15,980 12,369 28,502 24,986
Investment income, net of expenses 96,985 92,994 191,604 183,686
Communications 37,405 29,967 80,390 66,083
Other income 18,565 17,335 36,214 34,068
Realized investment gain 14,868 15,148 26,724 25,225
328,522 308,060 648,978 614,776
Benefits and Expenses:
Policy benefits 167,756 162,691 327,422 322,834
Insurance commissions 19,724 16,109 37,729 31,046
Communications operations 25,020 21,463 55,143 46,500
General and administrative 30,826 28,838 62,149 60,590
Taxes, licenses and fees 6,289 6,558 12,788 13,181
Increase in deferred acquisition
costs, net of amortization ( 9,277) ( 4,308) ( 15,700) ( 7,995)
240,338 231,351 479,531 466,156
Income before income taxes 88,184 76,709 169,447 148,620
Provision for income taxes 29,814 24,468 56,813 46,444
58,370 52,241 112,634 102,176
Accumulated post retirement benefit
obligation at 1-1-93 ($37,035 less
deferred income tax of $12,926) 0 0 0 ( 24,109)
Net income $ 58,370 $ 52,241 $ 112,634 $ 78,067
=========== =========== =========== ===========
Average number of shares outstanding 48,664,123 50,418,998 48,833,169 50,435,658
=========== =========== =========== ===========
Income before effect of initial
application of SFAS 106 $ 1.20 $ 1.04 $ 2.31 $ 2.03
Effect of initial application of
SFAS 106 - - - ( 0.48)
Net income per share of common stock $ 1.20 $ 1.04 $ 2.31 $ 1.55
=========== =========== =========== ===========
Cash dividends paid per share of
common stock $ 0.43 $ 0.39 $ 0.82 $ 0.73
=========== =========== =========== ===========
</TABLE>
See notes to consolidated condensed financial statements.
4
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<TABLE>
JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CHANGES IN RETAINED EARNINGS
(In Thousands)
<CAPTION>
Three Months Ended Six Months Ended
June 30 June 30
1994 1993 1994 1993
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Balance at beginning of period $ 1,340,451 $ 1,276,903 $ 1,339,672 $ 1,270,342
Net income for the period 58,370 52,241 112,634 78,067
1,398,821 1,329,144 1,452,306 1,348,409
Cash dividends declared ( 65) ( 4) ( 20,974) ( 19,686)
Reacquisition of common stock, net ( 21,181) ( 7,469) ( 53,757) ( 7,052)
Balance at end of period $ 1,377,575 $ 1,321,671 $ 1,377,575 $ 1,321,671
=========== =========== =========== ===========
</TABLE>
See notes to consolidated condensed financial statements.
5
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JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(In Thousands)
Six Months Ended
June 30
1994 1993
(Unaudited) (Unaudited)
Cash Flows from Operating Activities:
Net income $ 112,634 $ 78,067
Adjustments to reconcile net income to net
cash provided by operating activities:
Change in policy liabilities 19,821 17,884
Amortization of deferred acquisition costs 18,835 19,238
Deferred policy acquisition costs ( 34,536) ( 27,234)
Gain from sales of investments ( 26,724) ( 25,225)
Other ( 25,412) ( 15,435)
Net cash provided from operations 64,618 47,295
Cash Flows from Investing Activities:
Investments purchased and sold ( 388,979) ( 308,866)
Other investing activities ( 20,375) 20,933
Net cash used by investing activities ( 409,354) ( 287,933)
Cash Flows from Financing Activities:
Net short-term borrowings 272,160 0
Cash dividends to stockholders ( 20,974) ( 19,686)
Reacquisition of common stock, net ( 55,000) ( 7,217)
Policyholder contract deposits 181,026 148,818
Policyholder contract withdrawals ( 61,026) ( 45,257)
Net cash provided by financing activities 316,186 76,658
Increase (decrease) in cash and cash equivalents ( 28,550) ( 163,980)
Cash and cash equivalents at beginning of period 31,563 155,669
Cash and cash equivalents at end of period $ 3,013 $ ( 8,311)
=========== ============
Supplemental Cash Flow Information:
Cash paid during the period for income taxes $ 51,076 $ 62,812
=========== ==========
Interest paid on borrowed money $ 1,756 $ 0
=========== ==========
See notes to consolidated condensed financial statements.
6
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JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
1. Basis of Presentation
The accompanying consolidated condensed balance sheet as of December 31,
1993 has been derived from the audited consolidated balance sheet as of
that date. The other accompanying consolidated condensed financial
statements of Jefferson-Pilot Corporation and subsidiaries are unaudited;
but, in the opinion of the Company's management, reflect all adjustments
necessary to present fairly the consolidated condensed balance sheet as of
June 30, 1994, the consolidated condensed statements of income and changes
in retained earnings for the three months and six months ended June 30,
1994 and 1993, and the consolidated condensed statement of cash flows for
the six months ended June 30, 1994 and 1993. Aside from the adoption of
new accounting standards disclosed in Notes 2 and 3 below, such
adjustments consist only of normal recurring accruals and adjustments.
These consolidated condensed financial statements should be read in
conjunction with the audited consolidated financial statements and related
notes included in the Company's Annual Report on Form 10-K for the year
ended December 31, 1993. Consolidated net income and cash flows for the
interim periods reflected in the accompanying consolidated condensed
financial statements are not necessarily indicative of those to be
expected for the entire fiscal year.
2. Adoption of Accounting Standard Affecting Investments
Effective January 1, 1994, the Company adopted Statement of Financial
Accounting Standards No. 115 "Accounting for Certain Investments in Debt
and Equity Securities" (SFAS 115). SFAS 115 applies to equity securities
having readily determinable fair values and to debt securities. It
requires securities under its scope to be classified for financial
reporting purposes as either 1) securities held to maturity and stated at
amortized cost, 2) trading securities stated at fair value with unrealized
gains and losses reflected in income, or 3) securities available for sale
and stated at fair value with net unrealized gains and losses included in
stockholders' equity.
SFAS 115 establishes criteria for classifying securities as held to
maturity or trading and requires securities not otherwise classified to
be accounted for as available for sale. Equity securities with readily
determinable fair values are required to be classified as either trading
or available for sale. Whenever an individual security classified as
either held to maturity or available for sale experiences an other-than-
temporary decline in fair value to an amount below amortized cost,
SFAS 115 requires an adjustment to the amortized cost of such security
with a corresponding charge to income.
In connection with the adoption of SFAS 115, the Company classified
certain debt securities held as of January 1, 1994 as available for sale
in response to its asset/liability management strategies or other
factors. Prior to adopting SFAS 115, such securities were stated at
amortized cost (reduced by allowances for other-than-temporary declines
in value). The stated amount of debt securities classified as
available for sale was adjusted to aggregate fair value as of
January 1, 1994, as required by
7
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JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(continued)
SFAS 115. Equity securities held by the parent company as of January 1, 1994,
which were previously stated at the lower of aggregate cost or market, were
classified as available for sale with the stated amount thereof increased to
aggregate market value. As a result of the SFAS 115 adjustment to the stated
amount of available-for-sale debt securities, the Company reduced deferred
policy acquisition costs by the amount that would have been recognized if net
unrealized gains pertaining to such securities held by Jefferson-Pilot Life
Insurance Company had actually been realized.
SFAS 115 adoption adjustments as of January 1, 1994 are summarized below
(in thousands):
Debt Equity
Securities Securities Total
Increase in stated amount of securities $ 106,624 $ 70,104 $ 176,728
Reduction of deferred policy
acquisition costs (15,235) 0 (15,235)
Increase in deferred income tax
liabilities (31,986) (28,103) (60,089)
Increase in net unrealized gains,
included in stockholders' equity $ 59,403 $ 42,001 $ 101,404
Aggregate amortized cost, aggregate fair value (stated amount) and gross
unrealized gains and losses pertaining to securities classified as available
for sale as of June 30, 1994 are as follows (in thousands):
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
U. S. Treasury obligations
and direct obligations of
U.S. Government Corporations $ 731,674 $ 20,483 $ (30,819)$ 721,338
Mortgage-backed securities
issued by U. S. Government
Corporations 337,290 2,658 (16,839) 323,109
Obligations of states and
political subdivisions,
including special revenue
obligations 62,711 2,306 (1,682) 63,335
Corporate obligations, including
collateralized obligations and
mortgage-backed securities 613,707 8,742 (23,831) 598,618
Redeemable preferred stocks 24,566 772 (1,624) 23,714
Subtotal, debt securities $1,769,948 $ 34,961 $ (74,795)$1,730,114
Equity securities 331,212 518,867 (6,009) 844,070
Securities available for sale $2,101,160 $ 553,828 $ (80,804)$2,574,184
8
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JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(continued)
Aggregate amortized cost (stated amount), aggregate fair value and gross
unrealized gains and losses pertaining to debt securities classified as
held to maturity as of June 30, 1994 are as follows (in thousands):
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
Mortgage-backed
securities issued
by U. S. Government
Corporations $ 512,115 $ 640 $ (41,527) $ 471,228
Obligations of states
and political
subdivisions,
including special
revenue obligations 32,576 1,152 (1,061) 32,667
Corporate obligations,
including
collateralized
obligations and
mortgage-backed
securities 1,297,172 25,617 (72,066) 1,250,723
Debt securities
held to
maturity $1,841,863 $ 27,409 $ (114,654) $1,754,618
The effective duration of debt securities classified as available for sale
approximates 5.0 years (5.9 years for debt securities classified as held
to maturity). Proceeds from sales of securities classified as available
for sale totaled $317.5 million for the six months ended June 30, 1994.
Resulting gross realized gains and losses totaled $28.3 million and $4.6
million, respectively. Cost of securities sold was determined by specific
identification. There were no material transfers of securities among
classifications during the period and no sales of securities classified as
held to maturity.
A summary of the changes in net unrealized gains on securities (which
is included in the consolidated condensed balance sheets as a separate
component of stockholders' equity) during the six months ended
June 30, 1994 follows (in thousands):
9
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JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(continued)
Net Deferred Stockholders'
Unrealized Income Equity
Gains Taxes Component
Balances as of December 31,
1993 on equity securities
held by insurance
subsidiaries $ 507,770 $ (176,202) $ 331,568
Effect of adopting
SFAS 115 as of
January 1, 1994 161,493 (60,089) 101,404
Decrease during period (196,239) 71,655 (124,584)
Balances as of June 30,
1994 on debt and
equity securities
classified as available
for sale $ 473,024 $ (164,636) $ 308,388
3. Adoption of Accounting Standard Affecting Postretirement Benefits
During the six months ended June 30, 1993, the Company adopted Statement
of Financial Accounting Standards No. 106 "Employers' Accounting for
Postretirement Benefits Other Than Pensions" (SFAS 106). As permitted by
SFAS 106, the Company recognized its initial liability for postretirement
health care and life insurance benefits by means of a one-time "cumulative
effect" charge to income during the first quarter of 1993. Aside from the
one-time charge, adoption of SFAS 106 reduced consolidated net income for
the six months ended June 30, 1993 by $.01 per share.
4. Reverse Repurchase Agreements
During the six months ended June 30, 1994, the Company entered into
several reverse repurchase agreements. The agreements involve U.S.
Treasury notes with aggregate fair value of $263,232,000 at June 30, 1994
and amortized cost of $272,762,000. The agreements mature at various
dates through December, 1994. The maximum amount outstanding during the
period was $264,797,000. As of June 30, 1994 the maximum amount
outstanding with any one party was $123.5 million with JP Morgan
Securities. The weighted average interest rate under the agreements
approximated 3.9% for the period.
10
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JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Liquidity
The Company's liquidity requirements are met primarily by cash flows from the
operations of Jefferson-Pilot Life Insurance Company (JPLIFE) and other
consolidated subsidiaries. Primary sources of cash from subsidiary
operations are premiums, other insurance considerations, investment income,
and communications revenue. Primary uses of cash in the subsidiaries'
operations include payment of insurance benefits, operating expenses, and
policy acquisition costs.
Primary sources of cash from investing activities are proceeds from
maturities and redemptions of debt securities, proceeds from disposition of
securities that are available for sale in connection with the Company's
asset/liability management strategies and mortgage loan repayments. Uses of
cash in investing activities include reinvestment of proceeds from investment
transactions, investment of proceeds from JPLIFE's policyholder contract
deposits and external financing arrangements, and investment of the excess of
net cash provided by operations over that used to pay dividends and reacquire
the Company's common stock. During 1994, the Company entered into securities
repurchase agreements under which it received and invested funds which
approximated as much as $265 million at any one time during the first six
months. Transactions related to the securities repurchase agreements
resulted in substantial increases in cash provided by financing activities
and cash used in investing activities for the six months over the amounts
reported for the first six months of 1993. The Company also continued to
utilize uncommitted bank lines of credit in application of its asset/
liability management strategies.
The Company continues to reacquire its own common stock whenever management
considers it prudent. During the six months ended June 30, 1994, the Company
used cash totaling $62.5 million to reacquire 1,320,000 shares of its common
stock. During the first half of 1994, the Company issued 325,000 shares of
its common stock as a result of the exercise of employee stock options and
received cash totaling $7.5 million.
The market value of bonds classified as below investment grade (rated below
Baa3/BBB-) amounted to $96.0 million at June 30, 1994, compared to $106.6
million at December 31, 1993. Nonperforming mortgage loans totaled $9.1
million at June 30, 1994, compared to $9.8 million at December 31, 1993.
Bonds and mortgage loans representing credit problems remain below industry
averages.
Capital Resources
Consolidated stockholders' equity as of June 30, 1994 amounted to $1.747
billion, compared to $1.733 billion as of December 31, 1993. Effective
January 1, 1994, the Company adopted Statement of Financial Accounting
Standards No. 115 "Accounting for Certain Investments in Debt and Equity
Securities" (SFAS 115). The effects of adopting SFAS 115 are discussed in
Note 2 to the consolidated condensed financial statements. Interest rates
11
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JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(continued)
continued to rise during the second quarter, causing a decline of
approximately $196 million ($125 net of deferred income tax effect) in
unrealized gains on securities available for sale during the period from
January 1, 1994 (date of adoption of SFAS 115) through June 30, 1994.
The increase in stockholders' equity during the first six months of 1994
results from net income of $112.6 million, less dividends to stockholders,
the net cost of reacquiring common stock, and a net $23.2 million decrease in
unrealized gains on securities, net of taxes.
Cash dividends approximated $21 million in the first six months of 1994,
compared to $19.7 million for the same period of 1993. Capital resource
requirements are not expected to restrict future dividend payment plans.
Results of Operations
First Six Months of 1994 Compared to First Six Months of 1993
Consolidated net income for the first six months of 1994 was $112.6 million,
compared to income of $102.2 million before the cumulative effect of adopting
a new accounting standard for the same period of 1993. Effective
January 1, 1993, the Company adopted Statement of Financial Accounting
Standards No. 106 "Employers' Accounting for Postretirement Benefits Other
than Pensions", and in connection therewith, recorded a net-of-tax charge to
earnings of $24.1 million resulting in net income of $78.1 million for the
first six months of 1993.
Earnings from individual insurance activities totaled $60.0 million compared
to $56.8 million for the first six months of 1993. Increases in investment
income (up $3.7 million to $158.7 million) attributed to individual insurance
activities and revenues from universal life and investment product policy
charges (up $2.3 million) along with lower general and administrative
expenses were the primary reasons for the improved earnings.
Group earnings were $21.4 million for the first six months of 1994, an
improvement of $3.1 million over the same period last year. The increased
earnings were produced by the group accident and health business, which
experienced an earnings increase of $3.2 million, to $15.8 million, for the
current six month period. Earnings from conventionally insured accident and
health and long-term disability coverages were greater than in 1993, while
earnings on life insurance and alternately funded accident and health
coverages declined. Group life mortality experience was somewhat worse than
normal for the first six months of 1994 and 1993. Group accident and health
benefits were flat, reflecting lower levels of inflation in medical costs,
greater use of managed care, and the conversion of group accident and health
business from an insured to a self-funded basis. Group general and
administrative expenses increased by approximately $2 million, primarily due
to increased utilization of managed care networks.
12
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JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(continued)
Revenue from communications operations totaled $80.4 million for the current
six month period, an increase of almost 22% over that of the comparable
period in 1993. The increase in communications revenue resulted from
acquisitions completed late in 1993 and overall revenue gains experienced by
the broadcast properties, particularly within the radio group. Increases in
communications operating expenses were in line with revenue growth. Earnings
of the communications operations amounted to $10.2 million for the six months
ended June 30, 1994, representing an increase of 26.1% over the $8.1 million
earned in the first six months of 1993.
Casualty and title earnings for the six months ended June 30, 1994 amounted
to $3.9 million, compared to $4.1 million for the same 1993 period.
Earnings for the current six month period were also favorably affected by
increased earnings on invested assets at the parent-company level.
Realized gains for the current six month period were $26.7 million compared
to $25.2 for the first six months of 1993. Sales of appreciated common
stocks provided most of these realized gains.
The Company's effective corporate tax rate increased from 31.2% for the six
months ended June 30, 1993 to 33.5% for the six months ended June 30, 1994.
The increase in the effective tax rate is primarily due to passage of the
Revenue Reconciliation Act of 1993 in August 1993 which, among other things,
increased the Company's maximum federal income tax rate from 34% to 35%.
Second Quarter of 1994 Compared to Second Quarter of 1993
Net Income of $58.4 million for the second quarter of 1994 was 11.7% greater
than the second quarter of last year.
Second quarter earnings from individual insurance activities were $31.9
million compared to $29.4 million for the second quarter of 1993. Individual
insurance revenues were $134.4 million, including investment income
attributed to individual insurance activities, an increase of 3.9% over the
second quarter of 1993. Total individual insurance benefits and expenses
were approximately the same in the second quarter of 1994 as in the second
quarter of 1993.
Group insurance earnings were $10.6 million for the second quarter of 1994
compared to $9.0 million for the same period last year. Group accident and
health earnings improved from $5.5 million in the second quarter of 1993 to
$7.2 million for the current quarter. Earnings from conventionally insured
accident and health business and from alternately funded business improved
over the second quarter of last year. Increased sales combined with improved
conservation resulted in modest growth in the number of in force medical and
long term disability coverages. Such growth contributed to an increase in
13
<PAGE>
JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(continued)
group accident and health premiums during the current quarter. Group life
earnings, which were adversely affected by somewhat worse than normal
mortality experience in both second quarter periods, declined slightly in the
current quarter compared to the second quarter of last year.
Communications earnings were $5 million for the second quarter of 1994, an
increase of 51.6% over the second quarter of 1993. Communications revenues
reached $37.4 million in the current quarter, an increase of 24.8% over the
same period last year. Revenues and earnings from communications operations
in the current quarter were favorably affected by acquisitions completed late
in 1993 and overall revenue gains, particularly within the radio group.
Casualty and title earnings were $2.1 million for the quarter, a slight
improvement over last year.
Realized capital gains decreased from $15.1 million for the quarter ended
June 30, 1993 to $14.9 million for the second quarter of 1994.
The Company's effective corporate tax rate for the second quarter of 1994 was
33.8% compared to 31.9% for the same quarter last year. The increase is
primarily attributable to the Revenue Reconciliation Act of 1993, as
described in the preceding discussion of results of operations for the six
month period.
14
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JEFFERSON-PILOT CORPORATION
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
The registrant is involved in various claims and lawsuits incidental to
its business. In the opinion of management, the ultimate liability will
not have a material effect on the financial condition of the Company.
Item 4. Submission of Matters to a Vote of Security Holders
(a) The information hereinafter reported relates to the Registrant's Annual
Meeting of Shareholders held on May 2, 1994.
(c) The following matters were voted upon at the meeting:
(1) Election of Directors
Nominee Term Votes For Votes Withheld
Edwin B. Borden 3 years 44,532,044 317,122
William H. Cunningham 3 years 44,514,173 334,993
E. S. Melvin 3 years 44,263,337 585,829
Donald S. Russell, Jr. 3 years 44,500,151 349,015
David A. Stonecipher 3 years 44,532,003 317,163
Robert H. Spilman 2 years 44,458,138 391,028
A. Linwood Holton, Jr. 1 year 44,457,441 391,725
(2) A proposal by the Registrant's Board of Directors to amend the
Articles of Incorporation and By-laws of the Registrant to reduce
the required size of the Board from its current required size of
20 to a range of 11 to 15 Directors, with the exact number to be
established from time to time by the Board.
Votes For - 44,549,627
Votes Against - 172,442
Abstentions and Broker Non-Votes - 127,097
Item 6. Exhibits and Reports on Form 8-K
(b) Reports on Form 8-K - There were no reports on Form 8-K filed for the
three months ended June 30, 1994.
15
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
JEFFERSON-PILOT CORPORATION
By (Signature) Dennis R. Glass
(Name and Title) Dennis R. Glass, Senior Vice
President and Treasurer
(Principal Financial Officer)
Date August 12, 1994
16
