<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
F O R M 10 - Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended March 31, 1994
[ ] 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 1-6563
SAFECO CORPORATION
-------------------
(Exact name of registrant as specified in its charter)
Washington 91-0742146
---------- ----------
(State of Incorporation) (I.R.S. Employer
Identification No.)
SAFECO Plaza, Seattle, Washington 98185
----------------------------------------
(Address of principal executive offices)
Registrant's Telephone Number, Including Area Code (206) 545-5000
Indicate by check mark 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 (or for such
shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements
for the past 90 days.
Yes X No
62,965,914 shares of no par value common
stock were outstanding at March 31, 1994.
<PAGE> 2
SAFECO CORPORATION
- - ---------------------------------------------------------------
TABLE OF CONTENTS & SIGNATURES
Part I - Financial Information* Page
---------
Item 1:
Consolidated Balance Sheet,
March 31, 1994 and December 31, 1993 3
Statement of Consolidated Income and Retained
Earnings for the Three Months Ended
March 31, 1994 and 1993 5
Statement of Consolidated Cash Flows for the Three Months
Ended March 31, 1994 and 1993 6
Item 2:
Management's Discussion and Analysis 8
Part II - Other Information
Item 6(b):
Exhibits and Reports on Form 8-K 13
* The accompanying unaudited condensed financial statements have
been prepared in accordance with the instructions to Form 10-Q.
In the opinion of management, they include all adjustments (none
of which were other than normal and recurring adjustments) which
are necessary for a fair presentation of results for the interim
periods. It is suggested that these condensed financial statements
be read in conjunction with the financial statements and the notes
thereto included in the Company's Form 10-K for the year ended
December 31, 1993 which has previously been filed with the
Commission.
SIGNATURES
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.
SAFECO CORPORATION
------------------
(Registrant)
BOH A. DICKEY
---------------
Boh A. Dickey
Executive Vice President and
Dated May 6, 1994 Chief Financial Officer
ROD A. PIERSON
---------------
Rod A. Pierson
Senior Vice President, Secretary, Controller
Dated May 6, 1994 and Chief Accounting Officer
-2-
<PAGE> 3
SAFECO CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(In Thousands Except Share Amounts)
- - --------------------------------------------------------------------
<TABLE>
<CAPTION>
March 31 December 31
1994 1993
ASSETS ------------ ------------
<S> <C> <C>
Investments:
Fixed Maturities Available-for-Sale,
at Market Value (Amortized Cost:
$8,959,987) (a) $9,455,196 $ -
Fixed Maturities Held-to-Maturity,
at Amortized Cost (Market value:
1994-$2,013,817;
1993-$11,965,731) 1,937,682 10,720,976
Marketable Equity Securities,
at Market Value (Cost:
1994-$539,751;
1993-$513,138) 884,826 910,252
Mortgage Loans 404,128 402,138
Real Estate (At cost less
accumulated depreciation) 473,268 447,797
Policy Loans 50,416 50,488
Short-Term Investments 109,019 109,047
------------ ------------
Total Investments 13,314,535 12,640,698
Cash 41,151 67,833
Accrued Investment Income 213,126 210,289
Finance Receivables 556,582 547,759
Premiums and Other Service Fees
Receivable 400,139 400,873
Other Notes and Accounts Receivable 93,620 75,977
Reinsurance Recoverables 246,582 126,240
Land, Buildings and Equipment for
Company Use (At cost less
accumulated depreciation) 152,424 149,618
Deferred Policy Acquisition Costs 362,268 367,303
Other Assets 248,946 220,701
------------ ------------
TOTAL $15,629,373 $14,807,291
============ ============
(continued)
-3-
<PAGE> 4
SAFECO CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(In Thousands Except Share Amounts) (continued)
- - --------------------------------------------------------------------
March 31 December 31
1994 1993
------------ ------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Losses and Adjustment Expense $2,252,639 $2,128,372
Unearned Premiums 826,864 819,385
Life Policy Liabilities 153,640 151,488
Funds Held Under Deposit Contracts 7,388,738 7,229,439
Notes and Mortgages Payable:
Credit Company Borrowings ($384,250
maturing within one year) 478,400 427,930
10.75% Notes Due September 1995 200,000 200,000
Other Notes and Mortgages ($47,417
maturing within one year) 295,708 290,505
Other Liabilities 648,614 629,891
Federal and Canadian Income Taxes:
Current 36,124 37,963
Deferred (Includes tax on unrealized
appreciation of investment
securities: 1994-$291,546;
1993-$138,990) (a) 264,428 117,927
------------ ------------
Total Liabilities 12,545,155 12,032,900
------------ ------------
Preferred Stock, No Par Value:
Shares Authorized: 10,000,000
Shares Issued and Outstanding: None - -
Common Stock, No Par Value:
Shares Authorized: 150,000,000
Shares Reserved for Options:
1994-2,117,064; 1993-2,182,828
Shares Issued and Outstanding:
1994-62,965,914; 1993-62,931,562 209,091 207,480
Retained Earnings 2,334,120 2,307,322
Unrealized Appreciation of Investment
Securities, Net of Tax (a) 545,476 262,157
Unrealized Loss from Foreign Currency
Translation, Net of Tax (4,469) (2,568)
------------ ------------
Total Stockholders' Equity 3,084,218 2,774,391
------------ ------------
TOTAL $15,629,373 $14,807,291
============ ============
<FN>
(a) See Management's Discussion and Analysis -
"Other - Footnote" section.
</TABLE>
-4-
<PAGE> 5
SAFECO CORPORATION AND SUBSIDIARIES
STATEMENT OF CONSOLIDATED INCOME AND RETAINED EARNINGS
(In Thousands)
- - -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended
March 31
-----------------------
1994 1993
----------- -----------
<S> <C> <C>
REVENUES:
Insurance:
Property and Casualty Earned Premiums $477,408 $459,350
Life and Health Premiums and Other Revenues 71,604 79,645
----------- -----------
Total 549,012 538,995
Real Estate 31,798 23,285
Finance 12,038 12,109
Asset Management 3,495 3,095
Net Investment Income 242,322 233,857
Realized Investment Gain 19,160 25,955
----------- -----------
Total 857,825 837,296
----------- -----------
EXPENSES:
Losses, Adjustment Expense and
Policyholders' Benefits 561,910 534,741
Commissions 91,904 86,998
Personnel Costs 51,759 51,860
Interest 16,226 14,672
Dividends to Policyholders 5,601 4,025
Other 69,119 59,310
Amortization of Deferred
Policy Acquisition Costs 95,457 88,388
Deferral of Policy Acquisition Costs (97,719) (93,344)
----------- -----------
Total 794,257 746,650
----------- -----------
Income before Income Taxes 63,568 90,646
----------- -----------
Provision (Benefit) for Federal
and Canadian Income Taxes:
Current 12,574 23,235
Deferred (5,032) (5,093)
----------- -----------
Total 7,542 18,142
----------- -----------
Income before Cumulative Effect
of Accounting Changes 56,026 72,504
Cumulative Effect of Accounting Changes:
Postretirements Benefits - (15,676)
Income Taxes - 18,553
----------- -----------
Net Income 56,026 75,381
Retained Earnings, Beginning of Period 2,307,322 1,993,350
Dividends Declared (28,336) (25,769)
Common Stock Reacquired (892) (2,082)
----------- -----------
Retained Earnings, End of Period $2,334,120 $2,040,880
=========== ===========
Net Income Per Share of Common Stock:
Income before Cumulative Effect
of Accounting Changes $0.89 $1.15
Cumulative Effect of Accounting Changes:
Postretirements Benefits - (0.25)
Income Taxes - 0.30
----------- -----------
Net Income $0.89 $1.20
=========== ===========
Average Number of Shares Outstanding
During the Period (In Thousands) 62,948 62,833
=========== ===========
Cash Dividends Paid to Common
Stockholders $0.45 $0.41
=========== ===========
<FN>
Income per share of common stock is based on the average number of common
shares outstanding. Stock options do not have a significant dilutive
effect on income per share.
</TABLE>
-5-
<PAGE> 6
SAFECO CORPORATION AND SUBSIDIARIES
STATEMENT OF CONSOLIDATED CASH FLOWS
(In Thousands)
- - ------------------------------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended
March 31
-----------------------
1994 1993 *
----------- -----------
<S> <C> <C>
OPERATING ACTIVITIES:
Insurance Premiums Received $559,197 $517,277
Dividends and Interest Received 238,481 225,806
Other Operating Receipts 44,541 30,480
Insurance Claims and Policyholders'
Benefits Paid (450,121) (397,939)
Underwriting, Acquisition and
Insurance Operating Costs Paid (248,616) (209,240)
Interest Paid (17,878) (16,105)
Other Operating Costs Paid (26,284) (17,895)
Income Taxes Paid (14,987) (9,866)
----------- -----------
Net Cash Provided by
Operating Activities 84,333 122,518
----------- -----------
INVESTING ACTIVITIES:
Purchase of:
Fixed Maturities Available-for-Sale (578,870) -
Fixed Maturities Held-to-Maturity (135,972) (748,556)
Equities (36,860) (25,759)
Other Investments (58,899) (24,211)
Maturities of Fixed Maturities
Available-for-Sale 260,821 -
Maturities of Fixed Maturities Held-to-Maturity 33,583 220,170
Sale of:
Fixed Maturities Available-for-Sale 255,072 -
Fixed Maturities Held-to-Maturity - 272,222
Equities 22,661 33,199
Other Investments 28,108 56,733
Net Decrease (Increase) in
Short-Term Investments 23,236 (34,373)
Finance Receivables Originated
or Acquired (61,997) (54,853)
Principal Payments Received
on Finance Receivables 42,673 39,846
Other (9,841) (8,110)
----------- -----------
Net Cash Used in
Investing Activities (216,285) (273,692)
----------- -----------
FINANCING ACTIVITIES:
Funds Received Under
Deposit Contracts 220,602 280,166
Return of Funds Held Under
Deposit Contracts (156,942) (122,901)
Proceeds from Notes and
Mortgage Borrowings 24,207 20,450
Repayment of Notes and
Mortgage Borrowings (49,648) (23,921)
Net Proceeds from
Short-Term Borrowings 94,703 8,357
Common Stock Reaquired (946) (2,194)
Dividends Paid to Stockholders (28,322) (25,755)
Other 1,616 975
----------- -----------
Net Cash Provided by
Financing Activities 105,270 135,177
----------- -----------
Net Decrease in Cash (26,682) (15,997)
Cash at Beginning of Period 67,833 73,122
----------- -----------
Cash at End of Period $41,151 $57,125
=========== ===========
(continued)
-6-
<PAGE> 7
SAFECO CORPORATION AND SUBSIDIARIES
STATEMENT OF CONSOLIDATED CASH FLOWS (continued)
(In Thousands)
- - ------------------------------------------------------------------------
Three Months Ended
March 31
-----------------------
1994 1993 *
----------- -----------
Net Income $56,026 $75,381
----------- -----------
Adjustments to Reconcile Net Income to Net
Cash Provided by Operating Activities:
Realized Investment Gain (19,160) (25,955)
Depreciation and Amortization 9,399 7,570
Amortization of Fixed Maturity Investments (4,655) (6,474)
Deferred Income Tax Benefit (5,032) (5,093)
Interest Expense on Deposit Contracts 97,049 100,668
Cumulative Effect of Accounting Changes - (2,877)
Other Adjustments 3,483 1,309
Changes in:
Losses and Adjustment Expense Liabilities 124,267 20,459
Life Policy Liabilities 2,152 867
Unearned Premiums 7,479 2,926
Deferred Policy Acquisition Costs (2,262) (4,956)
Accrued Investment Income (2,837) 3,244
Accrued Interest on Accrual Bonds (10,173) (18,196)
Accrued Income Taxes (1,839) 13,826
Other Assets and Liabilities (169,564) (40,181)
----------- -----------
Total Adjustments 28,307 47,137
----------- -----------
Net Cash Provided by Operating Activities $84,333 $122,518
=========== ===========
<FN>
* Certain reclassifications have been made to the 1993
amounts to conform to current year classifications.
</TABLE>
-7-
<PAGE> 8
SAFECO CORPORATION
- - ------------------
MANAGEMENT'S DISCUSSION AND ANALYSIS
- - -----------------------------------------------------------------
SAFECO Corporation
- - ------------------
Our net income for the first quarter was $56.0 million or $0.89 per
share, compared with $1.20 per share in 1993. If we exclude
realized gain from investments, our net income was $0.69 per share,
compared with $0.88 in 1993. The total impact on the first
quarter's results of the Los Angeles earthquake discussed below was
$0.88 per share.
The following summarized financial information sets forth the
contributions of each business segment to our consolidated income.
Three Months Ended
March 31
------------------
1994 1993
------ ------
(In Thousands Except
Per Share Amounts)
Income (Loss) before Realized Gain and
Income Taxes:
Property and Casualty Insurance:
Underwriting Loss $(59,525) $(37,728)
Net Investment Income 70,170 69,374
-------- --------
Total Property and Casualty 10,645 31,646
Life and Health Insurance 30,023 30,443
Real Estate 2,793 2,395
Credit 2,484 2,132
Asset Management 1,743 1,487
Corporate (3,280) (3,412)
-------- --------
Total 44,408 64,691
-------- --------
Realized Gain (Loss), before Tax, from:
Security Investments 19,205 25,955
Real Estate Investments (45) -
-------- --------
Total 19,160 25,955
-------- --------
Income before Income Taxes 63,568 90,646
-------- --------
Provision for Income Taxes on:
Income before Realized Gain 922 9,387
Realized Gain 6,620 8,755
-------- --------
Total 7,542 18,142
-------- --------
Income before Cumulative Effect of
Accounting Changes 56,026 72,504
Cumulative Effect of Accounting Changes:
Postretirement Benefits - (15,676)
Income Taxes - 18,553
-------- --------
Net Income $56,026 $75,381
======== ========
Net Income Per Share of Common Stock:
Income before Cumulative Effect of
Accounting Changes $.89 $1.15
Cumulative Effect of Accounting Changes:
Postretirement Benefits - (.25)
Income Taxes - .30
-------- --------
Net Income $.89 $1.20
======== ========
-8-
<PAGE> 9
SAFECO CORPORATION
- - ------------------
MANAGEMENT'S DISCUSSION AND ANALYSIS (Continued)
- - -----------------------------------------------------------------
Property and Casualty Insurance
- - -------------------------------
Property and casualty operations for the first quarter of 1994
produced pretax income of $10.6 million before realized gain from
investments.This compares with $31.6 million a year ago. The first
quarter produced an underwriting loss of $59.5 million, including
the loss from the earthquake that struck the Northridge area of Los
Angeles on January 17. This underwriting loss follows three
consecutive quarters of underwriting profits. The first quarter a
year ago had an underwriting loss of $37.7 million, including the
$27 million of claims from a windstorm in the Puget Sound area.
Losses from the Northridge earthquake are expected to be $62.5
million after reinsurance. This consists of total claims from the
earthquake, presently estimated to be $175 million, less $112.5
million recoverable under our catastrophe insurance program. This
program reimburses us for 90% of single event losses between $50
and $200 million. In addition to the $62.5 million net earthquake
losses, first quarter underwriting results reflect a $20.6 million
premium that we are paying our reinsurers to reinstate coverage for
a second catastrophe event in 1994 should it occur. In the Balance
Sheet, the asset Reinsurance Recoverables is higher at March 31,
1994 due to the amounts recoverable by SAFECO from its reinsurers
related to the Northridge earthquake.
The combined loss and expense ratio was 112.5 for the quarter,
compared with 108.2 a year ago. Investment income was $70.2
million, up slightly from last year's first quarter.
Personal auto, our largest line, continues to perform well. This
line produced an underwriting profit of $17.1 million for the first
quarter,compared with $5.7 million in the first quarter last year.
Loss costs continue to increase at less than a 5% annual rate.
Other personal lines, which provide coverage for earthquake,
dwelling fire, inland marine, boats and recreational vehicles,
produced an underwriting loss of $69.2 million for the first
quarter as a result of the California earthquake. By comparison,
these lines produced a profit of $20.6 million for all of 1993. The
earthquake line is vulnerable to infrequent but severe losses. We
support proposed legislation to create a national disaster
protection program that would create a federal reinsurance program
to help mitigate insurance company risk relating to a severe
earthquake and other catastrophes.
Homeowners produced an underwriting loss of $7.4 million for the
quarter, compared with a loss of $37.0 million in the first quarter
of 1993. Results include $11.2 million after reinsurance from
catastrophes, including $2.9 million from the Los Angeles
earthquake.By comparison, first quarter loss costs a year ago
included $31.4 million from catastrophe claims. Although this line
continues to be adversely affected by catastrophes, it is
benefiting from the 1993 rate increases and the continuing efforts
to improve homeowners insurance to value.
Commercial lines produced an underwriting loss of $3.0 million in
the first quarter. This compares with a loss of $12.3 million in
the first quarter last year. Results have benefited from our focus
on specific states and efforts to reduce expense and to maintain
rate adequacy in the face of stiff price competition.
-9-
<PAGE> 10
SAFECO CORPORATION
- - ------------------
MANAGEMENT'S DISCUSSION AND ANALYSIS (Continued)
- - -----------------------------------------------------------------
Surety continues to produce excellent results. The profit for this
line was $3.6 million for the first quarter, compared with a profit
of $4.4 million for the same quarter last year.
Total premiums written for the first three months increased 10%
over a year ago with personal lines up 8%, and commercial lines up
18%. The growth in commercial lines is mainly due to successful
efforts to write significant accounts from larger commercial agents
in targeted markets.
Life and Health Insurance
- - -------------------------
Life and health insurance operations produced a pretax profit,
before realized gain from investments, of $30.0 million for the
first quarter of 1994, compared with $30.4 million for the same
period last year.
The annuity and pension lines combined first quarter earnings were
$9.7 million, an increase over the $8.8 million reported for the
first quarter of 1993. Group insurance earnings were $4.8 million
for the first quarter, compared with $6.3 million for the first
quarter of 1993. Group medical premiums have declined due to
uncertainties caused by pending health care reform. Our primary
strategy is to strengthen our group life and disability products
and to explore opportunities to provide group medical coverages
under any reformed health care system.
Real Estate
- - -----------
SAFECO Properties' pretax income was $2.8 million, compared with
$2.4 million for the first quarter of 1993. The 1994 results
include a pretax gain from property held for sale of $1.6 million.
Credit
- - ------
SAFECO Credit Company reported pretax profit of $2.5 million for
the first three months of 1994, compared with $2.1 million in 1993.
Net income was $1.7 million for the first three months of 1994,
compared with $1.1 million in 1993. Rate competition and
increasing borrowing costs continue to pressure our margins, but
record first quarter loan production provided an
offset.Non-affiliate receivables reached $570 million at March 31,
1994, a 7% annualized increase from December, 1993. Delinquency
experience continues to be excellent with accounts past due 30 days
or more averaging less than 2% over the past twelve months.
Asset Management
- - ----------------
The pretax income from our investment management operations for the
quarter was $1.7 million, compared with $1.5 million for the same
period in 1993. Assets under management at March 31, 1994 totaled
approximately $2.3 billion.
-10-
<PAGE> 11
SAFECO CORPORATION
- - ------------------
MANAGEMENT'S DISCUSSION AND ANALYSIS (Continued)
- - -----------------------------------------------------------------
Realized Gain and Carrying Value of Security Investments
- - --------------------------------------------------------
Realized pretax gain from security investments was $19.2 million
during the first quarter, compared with $26.0 million a year ago.
The market value of our consolidated bond portfolio was $571
million in excess of amortized cost at March 31, 1994, down from
$1.2 billion at December 31, 1993. These declines reflect the
weakness in the bond market during the first quarter as a result of
higher interest rates. However, these higher rates will benefit our
investment income in the future.
During the first quarter, we adopted Financial Accounting Statement
Number 115, "Accounting for Certain Investments in Debt and Equity
Securities". As a result, over 80% of our fixed maturity security
investments are now classified as "Available for Sale", as
defined,and carried in the financial statements at market value,
net of related deferred taxes. These investments were previously
carried at amortized cost. This accounting change does not affect
income but is the primary reason for the increase in our book value
to $48.98 per share at March 31, 1994, up from $44.09 at December
31, 1993.
Stock Purchase Program
- - ----------------------
In May 1990, the Board of Directors approved the continuation of
the stock purchase program and authorized a total accumulation of
up to two million shares, about 3% of our issued shares. At April
22, 1994, 1,036,289 shares have been purchased.
Other - Footnotes
- - -----------------
The following additional footnote disclosures are being made due to
the adoption of two new accounting standards in the first quarter
of 1994.
Employee Benefit Plans
- - ----------------------
SAFECO adopted Financial Accounting Standards Board Statement 112,
"Employers' Accounting for Postemployment Benefits", effective
January 1, 1994. Adoption had no effect on net income.
Investments
- - -----------
In May 1993, the Financial Accounting Standards Board issued
Statement 115, "Accounting for Certain Investments in Debt and
Equity Securities", which expands the use of fair value accounting
for debt and equity securities. As of January 1, 1994, SAFECO
adopted the provisions of this statement for investments held as
of, or acquired after that date. Statement 115 requires that debt
and equity securities be classified as trading, available-for-sale
or held-to-maturity. Debt securities that SAFECO has the positive
intent and ability to hold to maturity (as narrowly defined by
Statement 115) are classified as held-to-maturity and are reported
at amortized cost. Debt securities classified as available-for-
sale are carried at market value, with changes in unrealized gains
and losses recorded directly to stockholders' equity, net of
applicable income taxes and deferred policy acquisition costs
valuation allowance. All marketable equity securities continue to
be carried at market value, with changes in unrealized gains
-11-
<PAGE> 12
SAFECO CORPORATION
- - ------------------
MANAGEMENT'S DISCUSSION AND ANALYSIS (Continued)
- - -----------------------------------------------------------------
and losses recorded directly to stockholders' equity, net of
applicable income taxes. Under Statement 115, trading securities
are to be carried at market value with immediate recognition in
income of changes in market value. Since SAFECO does not have any
securities held for trading, the adoption of Statement 115 had no
effect on net income. As required by Statement 115, no restatement
of prior period amounts has been made.
The following reconciliation of Stockholders' Equity from December
31, 1993 to March 31, 1994 shows the effect of adoption of
Statement 115 as of January 1, 1994 and the change in net
unrealized holding gains (losses) in the first quarter of 1994.
(In Thousands)
--------------
Stockholders' Equity, December 31, 1993 $2,774,391
Net effect of adoption of Statement 115 (1) 640,477
----------
Stockholders' Equity, January 1, 1994 3,414,868
Net income 56,026
Dividends declared (28,336)
Net decrease in unrealized appreciation
of investment securities, net of tax and
deferred policy acquisition costs
valuation allowance (2) (357,159)
Other items affecting Stockholders' Equity (1,181)
---------
Stockholders' Equity, March 31, 1994 $3,084,218
==========
SAFECO had no sales during the first quarter of 1994 of debt
securities classified as held-to-maturity. The first quarter
decline in the unrealized appreciation of investment securities was
due to weakness in both the bond and stock markets as a result of
higher interest rates. See note (2) below for the components of
the decrease.
(1) The net effect of adopting Statement 115
is comprised as follows:
Aggregate market value in excess of
amortized cost of debt securities
classified as available-for-sale,
at January 1, 1994 $1,013,117
Deferred policy acquisition costs
valuation allowance (27,768)
Deferred income taxes, at 35% (344,872)
----------
Net effect of adoption of Statement 115 $ 640,477
==========
(2) The decrease in net unrealized appreciation
of investment securities is comprised
as follows:
Decrease in unrealized appreciation of
debt securities, available- for-sale $ (517,908)
Decrease in unrealized appreciation
of marketable equity securities (52,039)
Decrease in deferred policy acquisition
costs valuation allowance 20,471
Decrease in deferred income taxes 192,317
----------
Net decrease in unrealized appreciation
of investment securities, net of tax and
deferred policy acquisition costs valuation
allowance $(357,159)
=========
-12-
<PAGE> 13
SAFECO CORPORATION
- - --------------------
Part II - Other Information
- - -----------------------------------------------------------
Item 6. Exhibits and Reports on Form 8-K
---------------------------------
(b) The Registrant filed two reports on Form 8-K during
the quarter ended March 31, 1994 under Item 5
(Other Events), dated February 4, 1994, and
March 2, 1994, both pertaining to the
January 17, 1994 earthquake in southern
California.
-13-
