<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 June 30, 1995
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period to
Commission File Number 1-6563
SAFECO CORPORATION
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
Washington 91-0742146
(State of Incorporation) (I.R.S. Employer
identification No.)
</TABLE>
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
62,992,338 shares of no par value common
stock were outstanding at June 30, 1995
<PAGE> 2
SAFECO CORPORATION
TABLE OF CONTENTS AND SIGNATURE
<TABLE>
<CAPTION>
Part I - Financial Information* Page
<S> <C>
Item 1. Financial Statements:
Consolidated Balance Sheet,
June 30, 1995 and December 31, 1994 3
Statement of Consolidated Income and Retained Earnings for
the Quarters and Six Months Ended June 30, 1995 and 1994 5
Statement of Consolidated Cash Flows for
the Six Months Ended June 30, 1995 and 1994 6
Item 2. Management's Discussion and Analysis 8
Part II - Other Information
Item 4. Submission of Matters to a Vote of Security Holders 13
Item 6. Exhibits and Reports on Form 8-K 13
</TABLE>
* 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, 1994 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 August 11 , 1995 Chief Financial Officer
ROD A. PIERSON
--------------------------------------------
Rod A. Pierson
Senior Vice President, Secretary, Controller
Dated August 11 , 1995 and Chief Accounting Officer
-2-
<PAGE> 3
SAFECO CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(In Thousands)
<TABLE>
<CAPTION>
June 30 December 31
ASSETS 1995 1994
----------- -----------
<S> <C> <C>
Investments:
Fixed Maturities Available-for-Sale, at Market Value
(Amortized cost: 1995 - $10,009,657; 1994 - $9,608,210) $10,640,454 $ 9,509,071
Fixed Maturities Held-to-Maturity, at Amortized Cost
(Market value: 1995 - $2,341,787; 1994 - $1,948,309) 2,146,699 2,053,132
Marketable Equity Securities, at Market Value
(Cost: 1995 - $592,480; 1994 - $565,007) 1,015,390 855,054
Mortgage Loans 425,009 418,983
Real Estate (At cost less accumulated depreciation) 507,082 475,865
Policy Loans 54,277 53,329
Short-Term Investments 260,885 101,574
----------- -----------
Total Investments 15,049,796 13,467,008
Cash 58,059 63,504
Accrued Investment Income 229,011 229,964
Finance Receivables 676,610 619,059
Premiums and Other Service Fees Receivable 432,113 418,733
Other Notes and Accounts Receivable 67,056 69,572
Reinsurance Recoverables 143,378 172,510
Land, Buildings and Equipment for Company Use
(At cost less accumulated depreciation) 167,311 160,973
Deferred Policy Acquisition Costs 349,953 388,843
Other Assets 374,835 311,563
----------- -----------
TOTAL $17,548,122 $15,901,729
=========== ===========
</TABLE>
-3-
<PAGE> 4
SAFECO CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(In Thousands Except Share Amounts) (continued)
<TABLE>
<CAPTION>
June 30 December 31
LIABILITIES AND STOCKHOLDERS' EQUITY 1995 1994
----------- -----------
<S> <C> <C>
Losses and Adjustment Expense $ 2,248,501 $ 2,265,854
Unearned Premiums 901,222 866,964
Life Policy Liabilities 157,286 155,322
Funds Held Under Deposit Contracts 8,405,327 7,988,456
Notes and Mortgages Payable:
Credit Company Borrowings ($514,787 maturing within one year) 575,287 510,600
10.75% Notes Due September 1995 200,000 200,000
Other Notes and Mortgages ($11,363 maturing within one year) 275,786 272,309
7.875% Notes Due 2005 200,000 -
Other Liabilities 772,983 754,258
Federal and Canadian Income Taxes:
Current 33,833 22,627
Deferred (Includes tax on unrealized appreciation
of investment securities:
1995 - $351,236; 1994 - $66,818) 315,169 35,860
----------- -----------
Total Liabilities 14,085,394 13,072,250
----------- -----------
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:
1995 - 1,910,003; 1994 - 2,042,691
Shares Issued and Outstanding:
1995 - 62,992,338; 1994 - 62,951,634 215,394 211,194
Retained Earnings 2,595,172 2,495,800
Unrealized Appreciation of Investment
Securities, Net of Tax 656,329 128,123
Unrealized Loss from Foreign Currency
Translation, Net of Tax (4,167) (5,638)
----------- -----------
Total Stockholders' Equity 3,462,728 2,829,479
----------- -----------
TOTAL $17,548,122 $15,901,729
=========== ===========
</TABLE>
-4-
<PAGE> 5
SAFECO CORPORATION AND SUBSIDIARIES
STATEMENT OF CONSOLIDATED INCOME AND RETAINED EARNINGS
(In Thousands Except Per Share Amounts)
<TABLE>
<CAPTION>
Six Months Ended Three Months Ended
June 30 June 30
---------------------- ----------------------
1995 1994 1995 1994
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
REVENUES:
Insurance:
Property and Casualty Earned Premiums $1,061,101 $ 987,989 $ 534,671 $ 510,581
Life and Health Premiums and Other Revenues 134,681 141,533 67,280 69,929
---------- ---------- ---------- ----------
Total 1,195,782 1,129,522 601,951 580,510
Real Estate 38,829 53,289 18,928 21,491
Finance 30,977 24,789 16,085 12,751
Asset Management 8,732 7,443 4,458 3,948
Net Investment Income 528,271 486,624 268,920 244,302
Realized Investment Gain 20,726 20,741 15,448 1,581
---------- ---------- ---------- ----------
Total 1,823,317 1,722,408 925,790 864,583
---------- ---------- ---------- ----------
EXPENSES:
Losses, Adjustment Expense and Policy Benefits 1,142,820 1,075,523 553,321 513,613
Commissions 201,082 190,237 101,464 98,333
Personnel Costs 111,609 110,387 58,571 58,628
Interest 43,987 33,131 24,072 16,905
Dividends to Policyholders 8,565 10,870 3,904 5,269
Other 116,007 130,882 58,070 61,763
Amortization of Deferred Policy Acquisition Costs 202,436 192,519 101,927 97,062
Deferral of Policy Acquisition Costs (212,008) (202,766) (108,232) (105,047)
---------- ---------- ---------- ----------
Total 1,614,498 1,540,783 793,097 746,526
---------- ---------- ---------- ----------
Income before Income Taxes 208,819 181,625 132,693 118,057
---------- ---------- ---------- ----------
Provision (Benefit) for Federal
and Canadian Income Taxes:
Current 46,894 46,577 29,835 34,003
Deferred (5,984) (11,027) 159 (5,995)
---------- ---------- ---------- ----------
Total 40,910 35,550 29,994 28,008
---------- ---------- ---------- ----------
Net Income 167,909 146,075 102,699 90,049
Retained Earnings, Beginning of Period 2,495,800 2,307,322 2,528,144 2,334,120
Dividends Declared (64,247) (59,197) (33,387) (30,861)
Common Stock Reacquired (4,290) (1,755) (2,284) (863)
---------- ---------- ---------- ----------
Retained Earnings, End of Period $2,595,172 $2,392,445 $2,595,172 $2,392,445
========== ========== ========== ==========
Net Income Per Share of Common Stock $ 2.67 $ 2.32 $ 1.63 $ 1.43
========== ========== ========== ==========
Average Number of Shares Outstanding
During the Period (In Thousands) 62,974 62,962 62,983 62,974
========== ========== ========== ==========
Cash Dividends Paid to Common
Stockholders $ 0.98 $ 0.90 $ 0.49 $ 0.45
========== ========== ========== ==========
</TABLE>
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.
-5-
<PAGE> 6
SAFECO CORPORATION AND SUBSIDIARIES
STATEMENT OF CONSOLIDATED CASH FLOWS
(In Thousands)
<TABLE>
<CAPTION>
Six Months Ended
June 30
-----------------------------
1995 1994
----------- ----------
<S> <C> <<C>
OPERATING ACTIVITIES:
Insurance Premiums Received $ 1,191,683 $ 1,128,990
Dividends and Interest Received 530,030 478,537
Other Operating Receipts 92,007 84,973
Insurance Claims and Policy Benefits Paid (890,523) (865,349)
Underwriting, Acquisition and Insurance Operating
Costs Paid (444,517) (422,093)
Interest Paid (41,564) (33,630)
Other Operating Costs Paid (48,754) (48,185)
Income Taxes Paid (34,903) (51,370)
----------- -----------
Net Cash Provided by Operating Activities 353,459 271,873
----------- -----------
INVESTING ACTIVITIES:
Purchases of:
Fixed Maturities Available-for-Sale (910,581) (1,057,096)
Fixed Maturities Held-to-Maturity (90,651) (209,424)
Equities (109,216) (61,354)
Other Investments (245,289) (95,073)
Maturities of Fixed Maturities Available-for-Sale 288,565 471,240
Maturities of Fixed Maturities Held-to-Maturity 6,250 36,434
Sales of:
Fixed Maturities Available-for-Sale 237,734 412,746
Fixed Maturities Held-to-Maturity - -
Equities 85,223 33,587
Other Investments 46,436 75,537
Net Decrease in Short-Term Investments 31,512 17,028
Finance Receivables Originated or Acquired (179,287) (142,139)
Principal Payments Received on Finance Receivables 108,422 104,917
Other (30,289) (22,036)
----------- -----------
Net Cash Used in Investing Activities (761,171) (435,633)
----------- -----------
FINANCING ACTIVITIES:
Funds Received Under Deposit Contracts 543,639 427,531
Return of Funds Held Under Deposit Contracts (357,599) (307,567)
Proceeds from Notes and Mortgage Borrowings 199,001 37,964
Repayment of Notes and Mortgage Borrowings (17,131) (78,664)
Net Proceeds from Short-Term Borrowings 96,445 112,056
Common Stock Reaquired (4,564) (1,863)
Dividends Paid to Stockholders (61,708) (56,658)
Other 4,184 2,538
----------- -----------
Net Cash Provided by Financing Activities 402,267 135,337
----------- -----------
Net Decrease in Cash (5,445) (28,423)
Cash at Beginning of Period 63,504 67,833
----------- -----------
Cash at End of Period $ 58,059 $ 39,410
=========== ===========
</TABLE>
(continued)
-6-
<PAGE> 7
SAFECO CORPORATION AND SUBSIDIARIES
STATEMENT OF CONSOLIDATED CASH FLOWS
(In Thousands) (continued)
<TABLE>
<CAPTION>
Six Months Ended
June 30
-----------------------------
1995 1994
---------- ----------
<S> <C> <C>
Net Income $ 167,909 $ 146,075
Adjustments to Reconcile Net Income to Net Cash
Provided by Operating Activities:
Realized Investment Gain (20,726) (20,741)
Depreciation and Amortization 21,601 18,978
Amortization of Fixed Maturity Investments (16,031) (10,200)
Deferred Income Tax Benefit (5,984) (11,027)
Interest Expense on Deposit Contracts 217,864 195,070
Other Adjustments 6,133 5,479
Changes in:
Losses and Adjustment Expense Liabilities (17,353) 77,803
Unearned Premiums 34,258 31,234
Life Policy Liabilities 1,964 2,232
Accrued Income Taxes 11,206 (11,396)
Accrued Interest on Accrual Bonds (14,320) (20,742)
Accrued Investment Income 953 (5,898)
Deferred Policy Acquisition Costs (11,285) (9,662)
Other Assets and Liabilities (22,730) (115,332)
---------- ----------
Total Adjustments 185,550 125,798
---------- ----------
Net Cash Provided by Operating Activities $ 353,459 $ 271,873
========== ==========
</TABLE>
-7-
<PAGE> 8
SAFECO CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS
SAFECO Corporation
Our net income for the first six months of 1995 was $167.9 million, or $2.67
per share, compared with $2.32 per share for 1994. If we exclude realized gain
from investments, our income was $2.45 per share, compared with $2.10 per share
in 1994.
The following summarized financial information sets forth the contributions of
each business segment to our consolidated income.
<TABLE>
<CAPTION>
Six Months Ended Three Months Ended
June 30 June 30
-------------------------- ---------------------------
1995 1994 1995 1994
-------- -------- -------- --------
(In Thousands Except Per Share Amounts)
<S> <C> <C> <C> <C>
Income (Loss) before Realized Gain
and Income Taxes:
Property and Casualty Insurance:
Underwriting Gain (Loss) $(30,438) $(44,582) $ 6,938 $ 14,943
Net Investment Income 145,534 140,179 73,083 70,009
-------- -------- -------- --------
Total Property and Casualty 115,096 95,597 80,021 84,952
Life and Health Insurance 66,738 59,778 34,924 29,755
Real Estate 3,755 5,193 1,291 2,400
Credit 5,464 4,479 3,079 1,995
Asset Management 3,207 3,108 1,554 1,365
Corporate (6,167) (7,271) (3,624) (3,991)
-------- -------- -------- --------
Total 188,093 160,884 117,245 116,476
-------- -------- -------- --------
Realized Gain (Loss), before Tax, from:
Security Investments 20,249 20,792 15,103 1,587
Real Estate Investments 477 (51) 345 (6)
-------- -------- -------- --------
Total 20,726 20,741 15,448 1,581
-------- -------- -------- --------
Income before Income Taxes 208,819 181,625 132,693 118,057
-------- -------- -------- --------
Provision for Income Taxes on:
Income before Realized Gain 34,071 28,580 24,809 27,658
Realized Gain 6,839 6,970 5,185 350
-------- -------- -------- --------
Total 40,910 35,550 29,994 28,008
-------- -------- -------- --------
Net Income $167,909 $146,075 $102,699 $ 90,049
======== ======== ======== ========
Net Income Per Share of Common Stock $2.67 $2.32 $1.63 $1.43
===== ===== ===== =====
</TABLE>
-8-
<PAGE> 9
SAFECO CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS (Continued)
Property and Casualty Insurance
Property and casualty operations for the first six months of 1995 produced
pretax income of $115.1 million before realized gain from investments, compared
with $95.6 million for the first six months of last year. The loss from
underwriting for the first six months was $30.4 million, compared with a loss
of $44.6 million a year ago. The second quarter produced an underwriting
profit of $6.9 million. This compares with a loss of $37.4 million last
quarter and a profit of $14.9 million for the second quarter last year. During
the current quarter, two separate hailstorms hit the Dallas area resulting in
$28 million in claims. For the first six months of 1995, catastrophe losses
totaled $90 million which includes the Dallas hailstorms and the first quarter
$25 million increase in the estimated cost of the January, 1994 Los Angeles
earthquake. In 1994, the charge to earnings from catastrophe losses for the
first six months was $106 million, including $83 million, after reinsurance,
for the Los Angeles earthquake. The combined loss and expense ratio was 102.9
for the first six months, compared with 104.5 last year. Investment income was
$145.5 million, up 4% from a year ago.
Personal auto, our largest line, produced an underwriting profit of $29.1
million for the first six months, compared with $36.3 million for the first six
months last year. The profit for the second quarter was $26.8 million. Loss
costs are up approximately 8% due to increases in both the frequency and
severity of auto claims.
Homeowners produced an underwriting loss of $39.6 million for the first six
months, compared with a loss of $15.0 million for the first six months of 1994.
Catastrophe losses continue to adversely impact results for this line. For the
first six months, losses from catastrophes were $44.3 million, compared with
$20.7 million a year ago. We continue to pursue additional premiums for this
coverage through a combination of higher prices and proper insurance to value.
Other personal lines, which provide coverage for earthquake, dwelling fire,
inland marine, boats, and recreational vehicles, produced an underwriting loss
of $19.1 million, compared with a loss of $60.2 million for the first six
months last year. Results for both years reflect our experience with losses
from the Northridge earthquake.
Commercial lines continue to produce results that compare very favorably with
the industry. For the first six months, commercial lines produced an
underwriting loss of $11.2 million, operating at a combined ratio of 104.1. A
year ago, the loss was $11.0 million and the combined ratio was 104.3. The
current year loss costs include $7 million from the Dallas hailstorms discussed
above. These strong results reflect our target marketing initiatives, a focus
on efficient operations and our ability to deliver value-added service to
customers. In addition, we continue to maintain rate adequacy in the face of
stiff price competition.
The surety line continues to achieve excellent results for both contract and
commercial bond business. The profit for this line was $10.9 million for the
first six months, compared with a profit of $6.7 million for the first six
months last year. Premiums written for the first six months increased 17% over
a year ago, primarily due to increases in both the number and size of contract
bonds written.
Including surety, total premiums written for the first six months increased 6%
over a year ago with personal lines up 5%, and commercial lines up 4%.
-9-
<PAGE> 10
SAFECO CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS (Continued)
Life and Health Insurance
The life and health operations produced a pretax profit, before realized gain
from investments, of $66.7 million for the first six months of 1995, compared
with $59.8 million for the same period last year. The second quarter produced
profit of $34.9 million, compared with $29.8 million for the same period last
year.
The annuity and pension lines combined first half earnings were $28.7 million.
This is an increase over the $19.7 million reported for the first half of 1994.
Increased investment income, due to higher interest rates during these
reporting periods, and reduced expenses continue to benefit these lines. Group
insurance earnings declined to $5.3 million for the first six months, compared
with $10.5 million for the same period last year. This reduction in group
earnings continues to be the result of competitive market conditions and an
increase in both medical and life claims.
Real Estate
SAFECO Properties' pretax income was $3.8 million for the first six months of
1995, compared with $5.2 million in 1994. This decrease in income is partially
the result of higher short-term interest rates when compared with 1994 and
additional depreciation charges on several new projects. In the Statement of
Consolidated Income and Retained Earnings, the decrease in Real Estate Revenues
and Other Expenses is due primarily to a lower level of sales of properties
held for sale in the first quarter of 1995, compared with the same period in
1994. We have finally received all the required approvals to begin construction
on the Redmond Town Center project -- a 1.4 million square foot, open air,
mixed use retail center in Redmond, Washington. Construction began on July 19,
1995.
Credit
SAFECO Credit Company produced a pretax profit of $5.5 million in the first six
months of 1995, compared with $4.5 million in the same period of 1994. Income
in the second quarter was $3.1 million, compared with $2.0 million in the
second quarter of 1994. New commercial loan and lease fundings in 1995 were
22% greater than in the first six months of 1994. Delinquency experience
continued at very low levels with accounts past due 30 days or more totaling
less than 1% at June 30, 1995.
SAFECO Credit's summarized financial information is as follows (in thousands):
<TABLE>
<CAPTION>
June 30 December 31
1995 1994
-------- -----------
<S> <C> <C>
Finance Receivables $676,610 $619,059
Other Assets 133,301 138,107
-------- --------
Total Assets $809,911 $757,166
======== ========
Credit Company Borrowings $575,287 $510,600
Other Liabilities 142,282 156,973
-------- --------
Total Liabilities $717,569 $667,573
======== ========
</TABLE>
<TABLE>
<CAPTION>
Six Months Ended June 30
------------------------------------
1995 1994
------- -------
<S> <C> <C>
Revenues $34,112 $26,828
Expenses 28,648 22,349
------- -------
Income before Income Taxes 5,464 4,479
Provision for Federal Income Taxes 1,795 1,461
------- -------
Net Income $ 3,669 $ 3,018
======= =======
</TABLE>
-10-
<PAGE> 11
SAFECO CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS (Continued)
Asset Management
The pretax income for our investment management activities for the first six
months of 1995 was $3.2 million, up slightly from the same period last year.
Assets under management are approximately $2.7 billion, a 19% increase from
June 30, 1994.
Investment Portfolios
The market value of our consolidated bond portfolio was $826 million in excess
of amortized cost at June 30, 1995. This compares with market value being in
excess of amortized cost by $312 million at March 31, 1995 and market value
being below amortized cost by $204 million at December 31, 1994. These higher
market values reflect the strength in the bond market during 1995 as a result
of lower interest rates.
The market value of our equity securities was $423 million in excess of cost at
June 30, 1995.
A.M. Best Upgrades SAFECO Life to A++
On June 26, 1995, A.M. Best upgraded its rating on SAFECO Life from an A+ to
A++, its highest possible designation. With this change, SAFECO Life joins
only a handful of other life insurance companies to hold the A++ rating.
SAFECO's property and casualty companies also hold the A++ rating.
A.M. Best, which started reviewing insurers in 1906, is one of the oldest and
most trusted rating organizations in the industry. Best's ratings are based on
reviews of financial results, investment philosophy, marketing strengths,
agency representation and overall company management.
Debt Issue
On March 29, 1995, we issued $200 million of 7-7/8% notes, due April 1, 2005.
The proceeds of this issue are invested in short-term treasury securities and
will be used to redeem our existing 10-3/4% notes due September 15, 1995.
-11-
<PAGE> 12
SAFECO CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS (Continued)
Other -- Footnotes
The following additional footnote disclosures relate to new accounting
standards.
Summary of Significant Accounting Policies - New Accounting Standards
In March of 1995, the Financial Accounting Standards Board (FASB)
issued Statement 121, "Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to Be Disposed Of.'' Statement 121
requires that under specified circumstances certain assets be reviewed
for impairment. If an impairment is indicated the asset shall be
written down to fair value. Statement 121 is effective for financial
statements for fiscal years beginning after December 15, 1995 and
SAFECO will adopt it in the first quarter of 1996. Although the impact
of the Statement is currently being studied, it is not expected to
have a material effect on SAFECO's financial position or results of
operations.
Investments
In May of 1993, the FASB issued Statement 114, "Accounting by
Creditors for Impairment of a Loan,'' which provides guidance on
valuing impaired loans (FAS 114). The FASB also issued Statement 118,
"Accounting by Creditors for Impairment of a Loan -- Income
Recognition and Disclosures'' (FAS 118), in October of 1994, which
amends Statement 114. Both statements are effective for 1995 and were
adopted by SAFECO on January 1, 1995. Adoption did not affect net
income.
The following table summarizes SAFECO's consolidated allowance for
credit losses for the first six months of 1995 (in thousands):
<TABLE>
<S> <C>
Allowance as of December 31, 1994 $24,557
Provision for Credit Losses 2,200
Recoveries 245
Loans Charged Off as Uncollectible (478)
-------
Allowance as of June 30, 1995 $26,524
=======
</TABLE>
This allowance relates to SAFECO Credit's Finance Receivables ($677
million at June 30, 1995) and to Mortgage Loan investments ($425
million at June 30, 1995) nearly all of which are held by SAFECO's
life and health company. The allowance includes amounts determined
under FAS 114 and FAS 118 (specific reserves), as well as general
reserve amounts. The total investment in impaired loans, as defined
under FAS 114 and 118 and before any reserve for losses, is $10.1
million at June 30, 1995. A specific loan loss reserve has been
established for each impaired loan, the total of which is $2.8 million
at June 30, 1995 and is included in the overall allowance of $26.5
million at June 30, 1995.
-12-
<PAGE> 13
SAFECO CORPORATION
Part II - Other Information
Item 4.Submission of Matters to a Vote of Security Holders
The Annual Meeting of Shareholders of SAFECO Corporation was held May 3,
1995. SAFECO Shareholders elected four nominees to the Board of
Directors by the votes shown below. The terms of all of the nominees
elected will expire in 1998 with the exception of Mr. Graham, who will
tender his resignation as director at the 1996 Annual Meeting of
Shareholders in accordance with the Corporation's retirement policy for
directors. There were no broker non-votes with respect to any of the
nominees.
<TABLE>
<CAPTION>
Votes Votes
For Withheld
---------- --------
<S> <C> <C>
Roger H. Eigsti 58,584,647 554,904
John W. Ellis 58,575,522 564,029
Donald G. Graham, Jr. 58,567,519 572,032
William R. Wiley 58,351,282 788,269
</TABLE>
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit 27 Financial Data Schedule.
(b) Reports on Form 8-K
No Form 8-Ks were filed, nor required to be filed for any event during
the quarter ended June 30, 1995.
-13-
<TABLE> <S> <C>
<ARTICLE> 7
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
UNAUDITED CONSOLIDATED BALANCE SHEET AND THE UNAUDITED STATEMENT OF CONSOLIDATED
INCOME AND RETAINED EARNINGS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
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0
0
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1,195,782
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