UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)OF THE
SECURITIES EXCHANGE ACT OF 1934
August 15, 2001
Date of Report (Date of earliest event reported)
SAFECO CORPORATION
(Exact name of registrant as specified in its charter)
Commission File Number 1-6563
Washington 91-0742146
(State of Incorporation) (I.R.S. Employer I.D. No.)
SAFECO PLAZA, Seattle, Washington 98185
(Address of principal executive offices)
(206) 545-5000
(Telephone)
Item 5. Other Events.
On August 15, 2001, SAFECO Corporation ("SAFECO" or "the Company") completed the
sale of its wholly owned equipment financing and leasing company, SAFECO Credit,
Inc. ("SAFECO Credit"), to General Electric Capital Corporation, a corporation
organized under the laws of the state of Delaware ("GECC"), for total cash
proceeds of approximately $966 million. The estimated after-tax gain on the sale
of SAFECO Credit is $54 million. Additional information is provided in Exhibit
99.1. The sale was completed pursuant to the terms of an Amended and Restated
Stock Purchase Agreement, dated as of July 23, 2001 by and among GECC, the
Company and SAFECO Credit.
Item 7. Pro Forma Financial Information and Exhibits.
(b) Pro forma financial information
The pro forma financial information is incorporated by reference. See
Exhibit 99.1 below.
(c) Exhibit 2 Amended and Restated Stock Purchase Agreement
among General Electric Capital Corporation,
SAFECO Corporation and SAFECO Credit Company, Inc.
dated as of July 23, 2001, with respect to the
disposition by SAFECO Corporation of the stock of
SAFECO Credit Company, Inc. SAFECO agrees to furnish
the Securities and Exchange Commission, upon request,
with copies of all omitted schedules to the foregoing
Amended and Restated Stock Purchase Agreement.
Exhibit 99.1 Unaudited Pro Forma Condensed Consolidated Balance
Sheet.
Forward-looking information is subject to risk and uncertainty
Statements made in this report that relate to anticipated financial performance,
business prospects and plans, regulatory developments and similar matters may be
considered "forward-looking statements" as defined in the Private Securities
Litigation Reform Act of 1995. Statements in this report that are not historical
information are forward-looking. Such statements are subject to certain risks
and uncertainties that may cause the operations, performance, development and
results of SAFECO's business to differ materially from those suggested by the
forward-looking statements. The risks and uncertainties include:
o SAFECO's ability to obtain rate increases and non-renew underpriced
insurance accounts;
o Achievement of SAFECO's premium targets and profitability;
o Decrease in large-commercial premium volume;
o Achievement of expense savings from consolidation of commercial
operations;
o Achievement of SAFECO's expense reduction goals;
o Realization of growth and business retention estimates;
o Changes in the nature of the property and casualty book of business;
o Amount and duration of losses from discontinued commercial lines;
o Development and implementation of an automated underwriting process,
including the use of insurance scoring, in personal and commercial
operations;
o Driving patterns;
o Changes in competition and pricing environments;
o Weather conditions, including the severity and frequency of storms,
hurricanes, snowfalls, hail and winter conditions;
o The occurrence of significant natural disasters, including earthquakes;
o The development of major Year 2000 related claims or liabilities;
o The adequacy of loss reserves;
o The availability and pricing of reinsurance;
o Court decisions and trends in litigation;
o Legislative and regulatory developments;
o Rating agency actions;
o Availability of bank credit facilities;
o Fluctuations in interest rates;
o Performance of financial markets; and
o General economic and market conditions.
In particular, because insurance rates in some jurisdictions are subject to
regulatory review and approval, SAFECO's achievement of rate increases may occur
in amounts and on a time schedule different than planned, which may affect the
Company's efforts to restore earnings in the property and casualty lines.
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 hereunto duly authorized.
SAFECO CORPORATION
Dated: August 29, 2001
By: /s/ H. Paul Lowber
------------------------------------
H. Paul Lowber
Vice President, Controller
and Chief Accounting Officer
EXHIBIT INDEX
Exhibit 2 Amended and Restated Stock Purchase Agreement among General
Electric Capital Corporation, SAFECO Corporation and SAFECO
Credit Company, Inc. dated as of July 23, 2001, with respect
to the disposition by SAFECO Corporation of the stock of
SAFECO Credit Company, Inc. SAFECO agrees to furnish the
Securities and Exchange Commission, upon request, with copies
of all omitted schedules to the foregoing Amended and Restated
Stock Purchase Agreement.
Exhibit 99.1 Unaudited Pro Forma Condensed Consolidated Balance Sheet
The following unaudited Pro Forma Condensed Consolidated
Balance Sheet as of June 30, 2001 gives effect to the stock
purchase transaction assuming SAFECO Credit is sold to GECC on
June 30, 2001. The unaudited Pro Forma Condensed Consolidated
Balance Sheet presented does not intend to represent what the
financial condition would actually have been if the pro forma
adjustments had occurred on the dates referred to above or to
be indicative of the future results of operations or financial
position of the Company. The pro forma adjustments are based
on available information and certain assumptions the Company
believes are reasonable. The Pro Forma Condensed Consolidated
Balance Sheet should be read in conjunction with the audited
financial statements and notes thereto as included in the
SAFECO Corporation 2000 Annual Report on Form 10-K.