Greensboro. This was the former home office of Pilot Life Insurance Company.
In addition, Jefferson-Pilot Life owns an Employees' Club located in north-
western Guilford County, North Carolina, with approximately 500 acres of land
Total assets $ 5,640,621 $ 5,256,762 $ 4,945,396 $ 4,474,523 $ 4,543,474 =========== =========== =========== =========== ===========
Stockholders' equity was adjusted to reflect adoption of FAS 109 "Accounting for Income Taxes." The amounts shown for 1992 to 1989 were all decreased by $18,555,000 compared to amounts previously reported. Stockholders' equity per share reflects these adjustments, also.
Revenues $1,246,624 $1,202,329 $1,173,476 $1,162,613 $1,140,198 ========== ========== ========== ========== ==========
1993 1992 1991 1990 1989 Life and accident and health insurance $ 158,242 $ 156,588 $ 146,205 $ 128,153 $ 109,329 Casualty and title insurance 7,957 7,027 2,554 6,232 4,927 Communications 17,335 14,169 10,327 10,019 12,505 Other ( 1,582) ( 6,544) ( 5,958) ( 5,442) ( 497) Realized investment gains, net of taxes 37,329 31,998 22,559 18,675 11,427 Accumulated post- retirement benefit obligation, net ( 24,109) 0 0 0 0
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 subsidiary operations include payment of insurance benefits, operating expenses and costs related to acquiring new insurance business. Net cash provided by operations on a consolidated basis approximated $160 million, $156 million and $177 million in 1993, 1992 and 1991, respectively.
Dividends paid to the parent company approximated $103 million in 1993, $128 million in 1992 and $129 million in 1991. While all significant subsidiaries generally pay dividends to the parent company, JPLIFE continues to be its primary source of dividends, and therefore of cash. Dividends that the insurance subsidiaries may pay without prior regulatory approval are subject to statutory limitation. In addition, life insurance companies became subject to risk-based capital requirements beginning in 1993. Neither of these factors are expected to represent practical restrictions on the dividend payment practices or other activities of the parent company in the foreseeable future.
Net cash used in investing activities approximated $400 million in 1993, $221 million in 1992 and $228 million in 1991. Reflected for each year are reinvestment of the proceeds from investment transactions, investment of net proceeds from JPLIFE's policyholder contract deposits and investment of net cash provided by current operating activities over that used to pay stockholder dividends and reacquire the Company's common stock. During 1993, the Company also redirected certain short-term investments, primarily cash equivalents, into longer duration investments.
The Company has historically reacquired its own common stock whenever management considers it prudent. Cash used in connection with that strategy approximated $51 million in 1993, $36 million in 1992 and $18 million in 1991. The Company expects to continue reacquiring its common stock when considered appropriate, with the extent of those acquisitions to be determined based on securities market conditions and other relevant factors.
Consolidated stockholders' equity as of December 31, 1993 amounted to $1.733 billion, compared to $1.668 billion in 1992 and $1.544 billion in 1991 as restated for the effect of adopting SFAS 109 on deferred income tax liabilities. After tax unrealized gains on equity securities included in the preceding amounts approximated $332 million in 1993, $335 million in 1992 and $311 in 1991. The Company regards the regulatory capital status of its insurance subsidiaries, with due consideration to the risk-based capital requirements which became effective for life insurance companies in 1993, to be extremely strong. Management considers existing capital resources to be adequate for the Company's present needs and its business plan places priority on redirecting capital resources presently considered under-utilized into more productive business activities.
Life insurance benefits and other credits to policyholders increased from $279 million in 1992 to $296 million in 1993 (6%), with much of the
Expenses other than those related to communications operations remained basically flat in 1993 as compared to 1992, reflecting the ongoing benefit of the Company's containment program. A significant consolidation of field offices undertaken in 1993 helped to reduce field office expenses for the year in addition to improving marketing efficiency. Expenses of the communications businesses increased by approximately $12 million due primarily to promotional expenses incurred to strengthen market position, charges related to aged syndicated programming and operating costs of newly acquired properties.
Consolidated net income for 1993 reflects a charge of $24.1 million, net of deferred tax benefit, for the cumulative effect of adopting SFAS 106, which required the Company to provide for the cost of postretirement health care and life insurance benefits provided to retirees during the period of their service to the Company instead of on a cash basis after their retirement. The amount of this charge is consistent with the Company's previously reported estimate.
Premiums and other insurance considerations were $658 million in both 1992 and 1991, with revenue from life, accident and health and other insurance products remaining substantially stable. Net investment income for 1992 increased by $8.1 million over 1991, due primarily to increased investment in debt securities. Revenue from communications operations increased by $4.7 million, to $129.7 million during 1992 due to overall improvement in advertising market conditions and the 1992 elections. Call premiums on debt securities and an increase of $20.3 million in gains from sales of common stocks contributed to a net increase in realized investment gains of $14.2 million, to $48.2 million, during 1992.
Insurance benefits decreased 2.4% from $642.5 million in 1991 to $627.1 million in 1992. The primary contributing factors were a reduction in surrender benefits of $8.7 million and a reduction in casualty benefits of $6.6 million. The reduction in surrender benefits during 1992 continued a trend which began in 1985, and was favorably affected by declining interest rates. The reduction in casualty benefits reflects an improvement in loss experience, which was due in part to more selective underwriting practices. Increases in general and administrative expenses of the insurance businesses and communications operating expenses during 1992 were modest, reflecting ongoing aggressive expense management. Effective income tax rates for 1992 and 1991 were consistent, with each year benefitting from recoveries of amounts paid and reductions of amounts previously provided for prior year tax assessments.
On a consolidated basis, net income increased from $175.7 million in 1991 to $203.2 million in 1992 ($27.5 million). Each of the Company's principal business activities contributed to the increase in net income, with net income from the core business of life and accident and health insurance increasing by $10.4 million, net income from other insurance operations increasing by $4.5 million and net income from communications operations increasing by $3.8 million. The balance of the increase in net income during 1992 is attributable to realized investment gains.
the year ended December 31, 1993, are incorporated herein by reference.