-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, sSevhUALo1qz0qOf41KRYKQY2QjnMJIQtqshxloMMRenSAcJ3srYYr+2BaxqF5V+ wcVUGfFp+1wSieVOPb5tLA== 0000912057-94-003387.txt : 19941014 0000912057-94-003387.hdr.sgml : 19941014 ACCESSION NUMBER: 0000912057-94-003387 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19941010 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19941013 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: SOUTHWESTERN LIFE CORP CENTRAL INDEX KEY: 0000049588 STANDARD INDUSTRIAL CLASSIFICATION: 6321 IRS NUMBER: 436069928 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-07697 FILM NUMBER: 94552486 BUSINESS ADDRESS: STREET 1: 100 MALLARD CREEK RD STE 400 CITY: LOUISVILLE STATE: KY ZIP: 40207 BUSINESS PHONE: 5028942100 MAIL ADDRESS: STREET 1: 100 MALLARD CREEK ROAD STREET 2: SUITE 400 CITY: LOUISVILLE STATE: KY ZIP: 40207 FORMER COMPANY: FORMER CONFORMED NAME: ICH CORP DATE OF NAME CHANGE: 19930506 FORMER COMPANY: FORMER CONFORMED NAME: ICH CORP/CONSOL NAT/RTS/CFR/MOD AMER LIFE INS/SW LIFE INS/CF DATE OF NAME CHANGE: 19930505 8-K 1 FORM 8-K SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities and Exchange Act of 1934 October 10, 1994 - -------------------------------------------------------------------------------- Date of Report (Date of earliest event reported) Southwestern Life Corporation - -------------------------------------------------------------------------------- (Exact name of Registrant as specified in its charter) Delaware 1-7697 43-6069928 - -------------------------------------------------------------------------------- (State or other jurisdiction (Commission (IRS employer of incorporation file no.) identification no.) 500 North Akard Street, Dallas, Texas 75201 - -------------------------------------------------------------------------------- (Address of principal executive offices, including zip code) (214) 954-7111 - -------------------------------------------------------------------------------- (Registrant's telephone number, including area code) Not Applicable - -------------------------------------------------------------------------------- (Former name or former address, if changed since last report) 1 ITEM 5. OTHER EVENTS. The Registrant determined that realized losses in the amount of $46.4 million in the value of certain of its investments in collateralized mortgage obligations were appropriate as of the quarter ended March 31, 1994. The Company has amended its financial statements for the quarters ended March 31, 1994 and June 30, 1994 to reflect these losses, and has filed amendments on October 12, 1994 on Form 10-Q/A to its Quarterly Reports on Form 10-Q for each such quarter, which amendments on Form 10-Q/A and the financial statements (including the Notes thereto) and exhibits included therein are incorporated herein by reference. On October 10, 1994, Robert L. Beisenherz resigned from his position as President, Chief Executive Officer and Chairman of the Board of the Registrant and from all positions he held with the Registrant's subsidiaries. On such date, the Registrant's Board of Directors elected James R. Kerber as the Registrant's President and Chief Executive Officer and as a member of the Registrant's Board of Directors. A copy of the press release announcing the March 31, 1994 losses and the change of the Registrant's management is attached as Exhibit 1 of this Current Report on Form 8-K and are incorporated herein by reference. ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION, AND EXHIBITS. (a) None (b) None (c) Exhibits. Exhibit No. Description ----------- ----------- 1 Press Release of Registrant dated October 12, 1994 2 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 hereunto duly authorized. Southwestern Life Corporation By: /s/John T. Hull ---------------------------- John T. Hull Executive Vice President, Treasurer and Chief Financial Officer Date: October 12, 1994 3 INDEX TO EXHIBITS Sequential Exhibit No. Document Description Page No. - ----------- -------------------- ---------- 1 Press Release of Southwestern Life 5 Corporation dated October 12, 1994 4 EX-1 2 EXHIBIT 1 EXHIBIT 1 DATE: OCTOBER 12, 1994 FOR FURTHER INFORMATION CONTACT: MICHAEL E. CONLEY (214) 954-7414 FOR IMMEDIATE RELEASE SOUTHWESTERN LIFE CORPORATION ANNOUNCES MANAGEMENT CHANGE; RESTATES 1994 FIRST QUARTER AND SIX MONTH FINANCIAL RESULTS. DALLAS--OCT. 12, 1994--Southwestern Life Corporation (ASE: SLC), a Dallas- based insurance holding company, today announced that Robert L. Beisenherz has resigned as chairman, president and chief executive officer of the Company. The Company's Board of Directors also announced that it was evaluating potential acquisitions and strategic alliances designed to increase insurance premium income and reduce operational expenses, and had elected James R. Kerber to the Board and as president and chief executive officer of the Company. Mr. Kerber, 62, has 35 years management experience in the life insurance industry. For the past five years he has served as senior executive vice president-operations of Life Partners Group, Inc. in Denver, Colo. The Company also today announced it has restated its financial results for the first quarter ended Mar. 31, 1994 and six months ended June 30, 1994 to account for realized losses in certain of its collateralized mortgage obligation (CMO) investments previously accounted for as unrealized losses through a charge to stockholders' equity. The restatements resulted from a reevaluation of the particular CMO investments by the Company and, at the Company's request, its independent auditors. As a result of 1 such reevaluation, management determined that the unrealized losses represented "other than temporary" declines in the fair values of such investments and that a realization of the losses through a charge to earnings was appropriate. Under current statutory accounting standards, the write-downs have no effect upon the Company's operating cash flows or upon the statutory financial results of its insurance subsidiaries. The Company reported a restated net loss, after preferred dividend requirements, of $43.7 million, or 91 cents per common share, in the first quarter of 1994, reflecting pre-tax losses totaling $46.4 million in its investment in CMOs evidenced by its interests in a trust sponsored by an unaffiliated third party, the Fund America Investors Corporation II ("Fund America"), and its rights to residual interests held by a special-purpose trust, the Secured Investors Structured Trust ("SIST"), which had been sponsored by the Company. The Company had previously reported a net loss, after preferred dividend requirements, of $8.5 million, or 18 cents per common share, in the first quarter of 1994. For the six months ended June 30, 1994, the Company reported a restated net loss, after preferred dividend requirements, of $42.5 million, or 89 cents per common share. The Company had previously reported a net loss, after preferred dividend requirements of $7.3 million, or 15 cents per common share, for the first half of 1994. The Company had not previously tax-effected any of its unrealized investment losses at Mar. 31, 1994 or June 30, 1994. In 2 conjunction with its reevaluation of the CMOs, a determination was made that a substantial portion of the write-downs could be tax-effected. As a consequence of the tax-effecting of the write-downs, common equity was revised upwards to $125.4 million, or $2.65 per share, as of June 30, 1994. Common equity had been previously reported to be $114.2 million, or $2.42 per share, at June 30, 1994. The carrying value of the two investments at June 30, 1994 was $31.2 million, although the undiscounted future cash flows exceeded $300 million at the same date. The securities underlying the Fund America investment are the principal components ($102 million) of bonds ("RFCO Strips") issued by the Resolution Funding Corporation, whose sole purpose is to provide financing for the federal government's Resolution Trust Corporation. The RFCO Strips are due in full in a single payment in 2030. According to the Offering Circular for the RFCO Strips, the principal amount of the RFCO Strips will be fully repaid from the proceeds of non-interest bearing obligations of the United States issued by the Secretary of the Treasury and deposited in a separate account at the Federal Reserve Bank of New York. The securities underlying the SIST residual are the principal components ($14.5 million) of RFCO Strips due in full in 2021. The Company said that amended Form 10-Qs for the periods ended Mar. 31, 1994 and June 30, 1994, would be promptly filed with the Securities and Exchange Commission. 3 A preliminary review of the Fund America investment and SIST residual as of Sept. 30, 1994 under applicable GAAP standards and interpretations indicates that no further realized losses as of that date will be required. 4 SOUTHWESTERN LIFE CORPORATION CONSOLIDATED BALANCE SHEETS As of June 30, 1994 (Unaudited)
As Originally ASSETS Reported As Amended -------- ---------- (In Thousands) Investments: Fixed maturities: Available for sale at fair value $1,607,230 $1,607,230 Held to maturity at amortized cost 15,305 15,305 Equity securities, at fair value 18,144 18,144 Mortgage loans on real estate, at amortized cost 124,084 124,084 Real estate, at lower of cost or fair value 64,781 64,781 Policy loans 175,713 175,713 Collateral loans 76,432 76,432 Investments in limited partnerships 44,430 44,430 Cash and short-term investments 272,029 272,029 Other invested assets 21,004 21,004 ---------- ---------- Total investments 2,419,152 2,419,152 Due from reinsurers 253,152 253,152 Notes and accounts receivable and uncollected premiums 15,528 15,528 Accrued investment income 29,587 29,587 Deferred policy acquisition costs 208,420 208,420 Present value of future profits of acquired business 81,564 81,564 Deferred income tax asset 55,274 54,265 Excess cost of investments in subsidiaries over net assets acquired, net of accumulated amortization 302,833 302,833 Other assets 43,390 43,390 Assets held in separate accounts 5,016 5,016 ---------- ---------- $3,413,916 $3,412,907 ---------- ---------- ---------- ---------- LIABILITIES AND STOCKHOLDERS' EQUITY Insurance liabilities: Future policy benefits and other policy liabilities $ 916,901 $ 916,901 Universal life and investment contract liabilities 1,667,107 1,667,107 Notes payable: Due within one year 8,235 8,235 Due after one year 379,343 379,343 Federal income taxes currently payable 21,366 9,101 Other liabilities 101,789 101,789 Liabilities related to separate accounts 5,016 5,016 ---------- ---------- 3,099,757 3,087,492 ---------- ---------- Stockholders' equity: Preferred stock 199,997 199,997 Common stock 71,721 71,721 Common stock, Class B Additional paid-in capital 155,564 155,564 Net unrealized investment gains (losses) (120,349) (73,901) Retained earnings 64,569 29,377 ---------- ---------- 371,502 382,758 Notes receivable collateralized by common stock (1,762) (1,762) Treasury stock, at cost (55,581) (55,581) ---------- ---------- 314,159 325,415 ---------- ---------- $3,413,916 $3,412,907 ---------- ---------- ---------- ----------
5 SOUTHWESTERN LIFE CORPORATION CONSOLIDATED STATEMENTS OF EARNINGS (LOSS) (In Thousands, Except Per Share Data) (Unaudited)
Three Months Ended Six Months Ended March 31, 1994 June 30, 1994 -------------------------- -------------------------- As Originally As Originally Reported As Amended Reported As Amended ------------- ---------- ------------- ---------- Income: Premium income and other considerations $ 116,574 $ 116,574 $ 229,705 $ 229,705 Net investment income 30,007 30,007 82,004 82,004 Realized investment gains (losses) 674 (45,774) 1,347 (45,101) Equity in earnings of equity investees and limited partnerships 412 412 843 843 Other income 2,499 2,499 11,325 11,325 ----------- ----------- ----------- ----------- 150,166 103,718 325,224 278,776 ----------- ----------- ----------- ----------- Benefits, expenses and costs: Policyholder benefits 90,685 90,685 190,269 190,269 Amortization of deferred policy acquisition costs and present value of future profits 12,293 12,293 25,395 25,395 Other operating expenses 37,480 37,480 72,349 72,349 Amortization of excess cost 2,398 2,398 4,796 4,796 Interest expense 12,445 12,445 25,109 25,109 ----------- ----------- ----------- ----------- 155,301 155,301 317,918 317,918 ----------- ----------- ----------- ----------- Operating earnings (loss) before income taxes (5,135) (51,583) 7,306 (34,142) Income tax expense (credit) (958) (12,214) 6,745 (4,511) ----------- ----------- ----------- ----------- Net earnings (loss) (4,177) (39,369) 561 (34,631) Less dividends on preferred stock (4,325) (4,325) (7,825) (7,825) ----------- ----------- ----------- ----------- Net earnings (loss) applicable to common stock $ (8,502) $ (43,694) $ (7,264) $ (42,456) ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- Weighted average shares outstanding 47,878,690 47,878,690 47,853,939 47,853,939 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- Earnings (loss) per common share $(.18) $(.91) $(.15) $(.89) ----- ----- ----- ----- ----- ----- ----- -----
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