SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 8-K/A
(Amendment No. 1)
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Earliest Event Reported: October 6, 1995
Jefferson-Pilot Corporation
(Exact name of registrant as specified in its charter)
North Carolina 1-5955 56-0896180
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
100 North Greene Street, Greensboro, North Carolina 27401
(Address of principal executive offices) (Zip Code)
(910) 691-3691
(Registrant's telephone number, including area code)
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(b) Pro forma financial information
Unaudited pro forma condensed consolidated statements of income of
Jefferson-Pilot Corporation for the year ended December 31, 1994 and for
the six months ended June 30, 1995, and unaudited pro forma condensed
consolidated balance sheet as of June 30, 1995 for Jefferson-Pilot
Corporation giving effect to the pro forma adjustments related to the
acquisition of Alexander Hamilton Life Insurance Company of America and
its two acquired subsidiaries as described in Item 2 of the Form 8-K
filed on October 19, 1995 to report this acquisition.
(d) Unaudited supplemental pro forma financial information for the year
December 31, 1994 and for the six months ended June 30, 1995.
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: /s/Robert A. Reed
(name) Robert A. Reed
(title) Vice President
Dated: November 8, 1995
Index to Exhibits
Exhibit No. Description Pages
(b) Unaudited pro forma financial information 2 - 13
(d) Unaudited supplemental pro forma
financial information 14 - 15
Exhibit b
PRO FORMA CONDENSED CONSOLIDATED FINANCIAL DATA
The following unaudited pro forma condensed consolidated balance sheet of
Jefferson - Pilot Corporation (Company) and its consolidated subsidiaries as
of June 30, 1995 is based on the historical condensed consolidated balance
sheet of the Company, and is presented as if the acquisition (Alexander
Hamilton acquisition) of Alexander Hamilton Life Insurance Company of America,
First Alexander Hamilton Life Insurance Company, and Alexander Hamilton
Capital Management, Inc. (Alexander Hamilton Companies) and related
borrowings had occurred on June 30, 1995. The unaudited pro forma
consolidated condensed balance sheet gives effect to the Alexander
Hamilton acquisition under the purchase method of accounting and is based
upon a preliminary allocation of the purchase price and the assumptions and
adjustments described in the accompanying notes. This unaudited pro forma
condensed consolidated balance sheet should be read in conjunction with the
Company's consolidated financial statements and the combined financial
statements of the companies acquired in the Alexander Hamilton acquisition.
This pro forma information is not necessarily indicative of the financial
position that would have been reported had such events actually occurred on
the date specified, nor is it indicative of the Company's future financial
position.
The unaudited pro forma condensed consolidated statements of income for the
year ended December 31, 1994 and the six months ended June 30, 1995 are based
on the historical consolidated financial statements of the Company and the
combined financial statements of companies acquired in the Alexander Hamilton
acquisition, and are presented as if the Alexander Hamilton acquisition
(including borrowings related to the acquisition) had occurred at the
beginning of the periods presented. The unaudited pro forma statements of
income give effect to the Alexander Hamilton acquisition under the purchase
method of accounting and are based on a preliminary allocation of the purchase
price and the assumptions and adjustments described in the accompanying notes.
These unaudited pro forma statements of income should be read in conjunction
with the Company's consolidated financial statements and the combined
financial statements of the companies acquired in the Alexander Hamilton
acquisition. The pro forma information is not necessarily indicative of the
results of operations that would have been reported had such events actually
occurred on the date specified, nor is it indicative of the Company's future
results.
For a description of the Alexander Hamilton acquisition, including the
reinsurance (coinsurance) transactions and related transfers of assets and
liabilities associated with the credit insurance, periodic payment annuity,
and company owned life insurance lines of business to companies retained by
the prior owner, see Item 2 of the Form 8-K being amended hereby.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
June 30, 1995
Jefferson- Alexander
Pilot Hamilton
Corporation Companies(8) Adjustments Pro Forma
ASSETS (dollar amounts in thousands)
Cash and investments:
Debt securities available
for sale, at fair value $2,617,034 $2,961,855 $ - $ 5,578,889
Debt securities held to
maturity, at amortized cost 2,005,845 2,100,787 47,381 (1) 4,154,013
Equity securities 813,774 66,165 - 879,939
Mortgage loans 730,229 216,630 (990)(1) 945,869
Cash and all other investments 327,844 169,758 (249,426)(1)(2) 248,176
Accrued investment income 81,624 81,194 - 162,818
Accounts receivable and agents'
balances 107,565 45,635 - 153,200
Due from reinsurers 30,914 2,186,884 - 2,217,798
Property and equipment, net 94,752 17,256 - 112,008
Deferred policy acquisition
costs 552,418 475,494 (475,494)(1) 552,418
Deferred tax asset - 39,934 24,200 (1) 64,134
Organization costs - - 2,100 (1) 2,100
Value of business acquired - - 348,600 (1)(6) 348,600
Goodwill - - 60,229 (1) 60,229
Other assets 83,249 11,646 - 94,895
Separate account assets 248,993 - - 248,993
$7,694,241 $8,373,238 $(243,400) $15,824,079
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Policy liabilities $4,774,595 $7,595,117 $ - $12,369,712
Income tax liabilities 214,217 - - 214,217
Obligations under repurchase
agreements 267,046 - - 267,046
Short-term notes payable 50,300 - 315,000(3) 365,300
Accounts payable and accrued
expenses 70,375 132,590 - 202,965
Other liabilities 135,397 19,188 17,943(1)(5) 172,528
Note payable - 50,000 (50,000)(7) -
Separate account liabilities 248,993 - - 248,993
5,760,923 7,796,895 282,943 13,840,761
Redeemable preferred stock - 50,000(4) - 50,000
Stockholders' equity 1,933,318 526,343 (526,343) 1,933,318
$7,694,241 $8,373,238 $(243,400) $15,824,079
See Notes to Unaudited Pro Forma Condensed Consolidated Balance Sheet.
NOTES TO
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
June 30, 1995
(In Thousands)
(1) Represents the allocation of the purchase price of $575,000 to adjust
acquired assets and liabilities to fair value.
(2) Includes $210,000 of cash applied toward the purchase price in connection
with the acquisition.
(3) Represents the issuance of $315,000 of short-term debt in connection with
the acquisition.
(4) Represents the issuance of $50,000 of redeemable preferred stock in
connection with the acquisition.
(5) The other Liabilities adjustment includes approximately $11,000 of costs
to relocate employees and integrate systems and processes as a result of the
acquisition, $4,000 to record pension liabilities at fair value, and $3,000 to
record post retirement benefits at fair value.
(6) The value of business acquired represents the actuarially determined
present value of future gross profits for the businesses acquired, discounted
at a risk rate of return. The value of business acquired is amortized over
the life of the business at a constant rate based on the present value of the
estimated gross profit amounts expected to be realized over the life of the
business, in accordance with SFAS 97. Amortization amounts for the years
ending 1995 through 1999 would be as follows: 1995 - $27,900, 1996 - $34,900,
1997 - $31,400, 1998 - $34,900, 1999 - $31,400.
(7) Represents elimination of intercompany note payable.
(8) The amounts for the Alexander Hamilton Companies represent the assets,
liabilities, and preferred stock acquired in connection with the transaction.
Certain assets of the Alexander Hamilton Companies were not acquired. These
amounts are presented as follows:
Alexander Adjustments Amounts
Hamilton For Items Not Shown
Companies Acquired Above
ASSETS
Cash and investments:
Debt securities available for
sale, at fair value $3,891,888 $ (930,033)(A)(B)(C) $2,961,855
Debt securities held to maturity,
at amortized cost 2,744,567 (643,780)(A)(B)(C) 2,100,787
Equity securities available for
sale, at market value 66,165 - 66,165
Mortgage loans 216,630 - 216,630
Cash and all other investments 912,748 (742,990)(A) 169,758
Accrued investment income 104,791 (23,597)(A) 81,194
Accounts receivable and agents'
balances 45,635 - 45,635
Due from reinsurers 84,791 2,102,093 (A) 2,186,884
Property and equipment, net 18,156 (900)(D) 17,256
Deferred policy acquisition costs 478,354 (2,860)(A) 475,494
Deferred tax asset 36,952 2,982 (A) 39,934
Other assets 11,646 - 11,646
$8,612,323 $ (239,085) $8,373,238
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Policy liabilities $7,595,117 $ - $7,595,117
Accounts payable and accrued
expenses 132,590 - 132,590
Other liabilities 19,188 - 19,188
Note payable 50,000 - 50,000
7,796,895 - 7,796,895
Redeemable preferred stock 50,000 - 50,000
(900)(D) (900)
(42,121)(B) (42,121)
Stockholders' equity 765,428 (196,064)(C) 569,364
$8,612,323 $ (239,085) $8,373,238
(A) Represents the transfer of assets and liabilities associated with the
credit insurance, periodic payment annuity, and company owned life insurance
lines of business to companies retained by the prior owner and the
establishment of the related reinsurance receivable as if those lines of
business were reinsured.
(B) Represents dividend of net income (as defined in the Stock Purchase
Agreement) for 1995 paid to former owner.
(C) Represents capital contributions to entities which received the transfers
described in note (A) above.
(D) Represents dividend of property and equipment to companies not acquired.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
Year Ended December 31, 1994
Alexander
Jefferson- Hamilton
Pilot Companies
Corporation (11) Adjustments Pro Forma
(dollar amounts in thousands, except per share data)
REVENUE:
Premiums and other
considerations $ 655,302 $ 80,542 $ - $ 735,844
Net investment income 375,196 78,062 (27,611)(1)(2) 425,647
Communications 172,501 - - 172,501
Realized investment gains 61,426 12,991 - 74,417
Other income 4,385 - 5,000 (9) 9,385
1,268,810 171,595 (22,611) 1,417,794
BENEFITS AND EXPENSES:
Policy benefits 627,862 (419) - 627,443
Insurance commissions 71,752 62,899 - 134,651
Communications operations 120,833 - - 120,833
General and administrative 117,819 41,312 807 (3) 159,938
Taxes, licenses, & fees 23,351 15,432 - 38,783
Interest - 1,230 17,749 (4) 18,979
Amortization of value of
business acquired - - 27,888 (5) 27,888
Amortization of goodwill - - 2,409 (6) 2,409
Increase in deferred
acquisition costs, net (40,410) (17,151) (51,966)(7) (109,527)
921,207 103,303 ( 3,113) 1,021,397
Income before income taxes 347,603 68,292 (19,498) 396,397
Provision for income taxes 117,707 23,388 (5,981)(8) 135,114
Income from continuing
operations $ 229,896 $ 44,904 $(13,517) $ 261,283
Income from continuing
operations, per share $ 4.73 $ 5.30(10)
Shares used in earnings
per share calculation 48,641,880 48,641,880
See Notes to Unaudited Pro Forma Condensed Consolidated Statement of Income.
NOTES TO
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
Year Ended December 31, 1994
(In Thousands)
(1) Represents foregone interest of $15,162 at an annual rate of 7.22% on the
$210,000 of the cash applied toward purchase price.
(2) Represents amortization of $12,449 on the difference between the market
value and the carrying amounts of investments acquired.
(3) Represents adjustment for estimated net periodic pension cost subsequent
to the acquisition.
(4) Represents interest expense at a rate of 6.025% on the $315,000 of debt
incurred in connection with the acquisition and elimination of $1,230 of
intercompany interest associated with the intercompany note payable.
(5) Represents amortization of the value of business acquired in the
transaction, in accordance with SFAS 97. See note 6 to the pro forma balance
sheet.
(6) Represents amortization of goodwill over a period of 25 years.
(7) Represents removal of amortization of the deferred acquisition cost of the
Alexander Hamilton Companies subsequent to the acquisition.
(8) Represents the net tax effect of the pro forma adjustments excluding
goodwill amortization at statutory income tax rates.
(9) Reflects estimated fees for reinsurance business ceded by the acquired
company.
(10) The computation of earnings per share is based upon the weighted average
number of common shares outstanding during the period. Preferred stock
dividends of $3,562 are reflected in the pro forma earnings per share
computation.
(11)The amounts for the Alexander Hamilton Companies in the pro forma
statement of income represent the effects on earnings of the assets and
liabilities acquired in the transaction. The adjustments of the historical
statement of income of the Alexander Hamilton Companies to arrive at the
effects of the business acquired by the Company are presented as follows.
Alexander Adjustments Amounts
Hamilton For Items Not Shown
Companies Acquired Above
REVENUE:
Premiums and other
considerations $ 159,957 $ (79,415) (A) $ 80,542
Net investment income 96,573 (18,511) (A) 78,062
Realized investment gains 21,072 (8,081) (A) 12,991
277,602 (106,007) 171,595
BENEFITS AND EXPENSES:
Policy benefits 36,197 (36,616) (A) (419)
Insurance commissions 73,698 (10,799) (A) 62,899
General and administrative 55,782 (14,470) (A) 41,312
Taxes, licenses, and fees 17,834 (2,402) (A) 15,432
Interest 1,230 - 1,230
Increase in deferred acquisition
costs, net (17,151) - (17,151)
167,590 (64,287) 103,303
Income before income taxes 110,012 (41,720) 68,292
Provision for income taxes 38,407 (15,019) (B) 23,388
Income from continuing operations $ 71,605 $ (26,701) $ 44,904
(A) Represents the reduction of revenue, benefits, and expenses for the year
ended December 31, 1994 had the credit insurance, periodic payment annuity,
and company owned life insurance lines of business been reinsured on January
1, 1994.
(B) Represents the net tax effect of the pro forma adjustments at statutory
income tax rates.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
Six Months Ended June 30, 1995
Alexander
Jefferson- Hamilton
Pilot Companies
Corporation (11) Adjustments Pro Forma
(dollar amounts in thousands, except per share data)
REVENUE:
Premiums and other
considerations $ 309,842 $ 61,860 $ - $ 371,702
Net investment income 203,499 53,826 (13,806)(1)(2) 243,519
Communications 76,987 - - 76,987
Realized investment
gains (losses) 6,797 (3,623) - 3,174
Other income 46,974 - 2,500 (9) 49,474
644,099 112,063 (11,306) 744,856
BENEFITS AND EXPENSES:
Policy benefits 348,010 29,377 - 377,387
Insurance commissions 47,849 34,302 - 82,151
Communications operations 51,349 - - 51,349
General and administrative 60,953 18,278 525 (3) 79,756
Taxes, licenses, & fees 12,937 8,708 - 21,645
Interest - 2,260 7,229 (4) 9,489
Amortization of value of
business acquired - - 13,944 (5) 13,944
Amortization of goodwill - - 1,205 (6) 1,205
Increase in deferred
acquisition costs, net (28,227) (11,128) (26,911)(7) (66,266)
492,871 81,797 (4,008) 570,660
Income before income taxes 151,228 30,266 (7,298) 174,196
Provision for income taxes 48,235 10,593 (2,133)(8) 56,695
Income from continuing
operations $ 102,993 $ 19,673 $ (5,165) $ 117,501
Income from continuing
operations, per share $ 2.14 $ 2.40(10)
Shares used in earnings
per share calculation 48,126,212 48,126,212
See Notes to Unaudited Pro Forma Condensed Consolidated Statement of Income.
NOTES TO
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
Six Months Ended June 30, 1995
(In Thousands)
(1) Represents foregone interest of $7,581 at an annual rate of 7.22% on the
$210,000 of cash applied toward the purchase price.
(2) Represents amortization of $6,225 on the difference between the market
value and the carrying amounts of investments acquired.
(3) Represents adjustment for estimated net periodic pension cost subsequent
to the acquisition.
(4) Represents interest expense at a rate of 6.025% on the $315,000 of debt
incurred in connection with the acquisition less elimination of $2,260 of
intercompany interest expense associated with the intercompany note payable.
(5) Represents amortization of the value of business acquired in the
transaction, in accordance with SFAS 97. See note 6 to the pro forma balance
sheet.
(6) Represents amortization of goodwill over a period of 25 years.
(7) Represents removal of amortization of the deferred acquisition costs of
the Alexander Hamilton companies subsequent to the acquisition.
(8) Represents the net tax effect of the pro forma adjustments excluding
goodwill amortization at statutory income tax rates.
(9) Represents estimated fees for reinsurance business ceded by the acquired
companies.
(10) The computation of earnings per share is based upon the weighted average
number of common shares outstanding during the period. Preferred stock
dividends of $1,781 are reflected in the pro forma earnings per share
computation.
(11) The amounts for the Alexander Hamilton Companies in the pro forma
statement of income represent the effects on earnings of the assets,
liabilities, and preferred stock acquired in the transaction. The adjustments
of the historical statement of income of the Alexander Hamilton Companies to
arrive at the effects of the business acquired by the Company are presented as
follows:
Alexander Adjustments
Hamilton For Items Not
Companies Acquired Pro Forma
REVENUE:
Premiums and other
considerations $ 104,689 $ (42,829) (A) $ 61,860
Net investment income 64,971 (11,145) (A) 53,826
Realized investment gains(losses) (3,138) (485) (A) (3,623)
166,522 (54,459) 112,063
BENEFITS AND EXPENSES:
Policy benefits 51,504 (22,127) (A) 29,377
Insurance commissions 42,868 (8,566) (A) 34,302
General and administrative 26,703 (8,425) (A) 18,278
Taxes, licenses, and fees 9,811 (1,103) (A) 8,708
Interest 2,453 (193) (A) 2,260
Increase in deferred acquisition
costs, net (11,128) - (11,128)
122,211 (40,414) 81,797
Income before income taxes 44,311 (14,045) 30,266
Provision for income taxes 15,649 ( 5,056) (B) 10,593
Income from continuing operations $ 28,662 $ ( 8,989) $ 19,673
(A) Represents the reduction of revenue, benefits and expenses for the six
months ended June 30, 1995 had the credit insurance, periodic payment annuity,
and company owned life insurance lines of business been reinsured on January
1, 1995.
(B) Represents the net tax effect of the pro forma adjustments at statutory
income tax rates.
Exhibit (d)
UNAUDITED SUPPLEMENTAL SUMMARY PRO FORMA INFORMATION
The following unaudited supplemental presentation is intended to assist
shareholders and securities analysts in understanding the financial effect on
the Company of the Alexander Hamilton acquisition by summarizing certain pro
forma information in the format historically used for summary presentation of
the Company's results.
Analysis of Pro Forma Net Income
Year Ended December 31, 1994
Jefferson- Alexander
Pilot Hamilton
Corporation Companies Adjustments Pro Forma
Income before realized (dollar amounts in thousands)
investment gains:
Continuing operations $190,976 $41,949 (A) $(13,517) $219,408
Discontinued operations 9,247 - - 9,247
Operating income 200,223 41,949 (13,517) 228,655
Realized investment gains
(net of income taxes):
Continuing operations 38,920 2,955 (A) - 41,875
Discontinued operations 92 - - 92
Realized investment gains 39,012 2,955 - 41,967
Net income:
Continuing operations 229,896 44,904 (13,517) 261,283
Discontinued operations 9,339 - - 9,339
Net income $239,235 $44,904 $(13,517) $270,622
Analysis of Per Share Pro Forma Earnings Applicable to Common Shareholders
Year Ended December 31, 1994
Jefferson- Alexander
Pilot Hamilton
Corporation Companies Adjustments Pro Forma
Income before realized (dollar amounts in thousands)
investment gains:
Continuing operations $ 3.93 $ 0.86 (A) $ (0.28) $ 4.51
Discontinued operations 0.19 - - 0.19
Operating income 4.12 0.86 (0.28) 4.70
Realized investment gains
(net of income taxes):
Continuing operations 0.80 0.06 (A) - 0.86
Discontinued operations - - - -
Realized investment gains 0.80 0.06 - 0.86
Net income:
Continuing operations 4.73 0.92 (0.28) 5.30(B)
Discontinued operations 0.19 - - 0.19
Net income $ 4.92 $ 0.92 $ (0.28) $ 5.49(B)
(A) Realized investment gains are shown net of deferred acquisition cost
reductions which are reflected in operating income from continuing operations.
(B) The pro forma earnings per share applicable to common shareholders
reflects dividends on redeemable preferred stock of $3,562 or $0.07 per share.
Analysis of Pro Forma Net Income
Six Months Ended June 30, 1995
Jefferson- Alexander
Pilot Hamilton
Corporation Companies Adjustments Pro Forma
Income before realized (dollar amounts in thousands)
investment gains:
Continuing operations $ 97,237 $20,497 (A) $( 5,165) $112,569
Discontinued operations 2,178 - - 2,178
Operating income 99,415 20,497 ( 5,165) 114,747
Realized investment gains
(net of income taxes):
Continuing operations 5,756 (824)(A) - 4,932
Discontinued operations 16,363 - - 16,363
Realized investment gains 22,119 (824) - 21,295
Net income:
Continuing operations 102,993 19,673 ( 5,165) 117,501
Discontinued operations 18,541 - - 18,541
Net income $121,534 $19,673 $( 5,165) $136,042
Analysis of Per Share Pro Forma Earnings Applicable to Common Shareholders
Six Months Ended June 30, 1995
Jefferson- Alexander
Pilot Hamilton
Corporation Companies Adjustments Pro Forma
Income before realized (dollar amounts in thousands)
investment gains:
Continuing operations $ 2.02 $ 0.43 (A) $ (0.11) $ 2.34
Discontinued operations 0.05 - - 0.05
Operating income 2.07 0.43 (0.11) 2.39
Realized investment gains
(net of income taxes):
Continuing operations 0.12 (0.02)(A) - 0.10
Discontinued operations 0.34 - - 0.34
Realized investment gains 0.46 (0.02) - 0.44
Net income:
Continuing operations 2.14 0.41 (0.11) 2.40(B)
Discontinued operations 0.39 - - 0.39
Net income $ 2.53 $ 0.41 $ (0.11) $ 2.79(B)
(A) Realized investment gains are shown net of deferred acquisition cost
reductions which are reflected in operating income from continuing operations.
(B) The pro forma earnings per share applicable to common shareholders
reflects dividends on redeemable preferred stock of $1,781 or $0.04 per share.
November 7, 1995
VIA EDGAR
Securities and Exchange Commission
ATTENTION: Filing Desk, Stop 1-4
450 Fifth Street N.W.
Washington, D.C. 20549
Ladies and Gentlemen:
SUBJECT: Jefferson-Pilot Corporation
File No. 1-5955
Enclosed herewith is Form 8-K/A (Amendment 1) amending the Current Report on
Form 8-K for Jefferson-Pilot Corporation that was filed on October 19, 1995,
to place on file the required pro forma financial statements. I believe
that we now have fully satisfied the Form 8-K requirements related to the
acquisition on October 6, 1995 of Alexander Hamilton Life Insurance Company
of America, which I had discussed with the SEC staffr in August after the
acquisition was announced.
Please confirm receipt of this filing by notifying the CompuServe mailbox
maintained by Jefferson-Pilot.
Very truly yours,
/s/ Robert A. Reed
Robert A. Reed
Vice President, Secretary
and Associate General Counsel
Jefferson-Pilot Corporation