-----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, igIoVr8AjdwGDPn+UUJxRHJSCXgojInl/qDA3iaxIuFVpOZ1hAu5oPtrx+R3kIec k/OOpNQGZ5NXCuvzDO1aSA== 0000054727-95-000022.txt : 19950517 0000054727-95-000022.hdr.sgml : 19950517 ACCESSION NUMBER: 0000054727-95-000022 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19941231 FILED AS OF DATE: 19950214 SROS: NYSE SROS: PSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: SUNAMERICA INC CENTRAL INDEX KEY: 0000054727 STANDARD INDUSTRIAL CLASSIFICATION: 6311 IRS NUMBER: 860176061 STATE OF INCORPORATION: MD FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-04618 FILM NUMBER: 95509827 BUSINESS ADDRESS: STREET 1: 1 SUNAMERICA CENTER CITY: LOS ANGELES STATE: CA ZIP: 90067-6022 BUSINESS PHONE: 3107726000 FORMER COMPANY: FORMER CONFORMED NAME: KAUFMAN & BROAD INC DATE OF NAME CHANGE: 19890515 FORMER COMPANY: FORMER CONFORMED NAME: KAUFMAN & BROAD BUILDING CO DATE OF NAME CHANGE: 19711006 10-Q 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ______________ FORM 10-Q (Mark One) /X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended December 31, 1994 -------------------------------------- OR / / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from_________________to__________________ Commission file number 1-4618 SUNAMERICA INC. --------------- (Exact Name of Registrant as Specified in Its Charter) Maryland 86-0176061 -------- ---------- (State or Other Jurisdiction of (IRS Employer Identification No.) Incorporation or Organization) 1 SunAmerica Center, Los Angeles, California 90067-6022 ------------------------------------------------------- (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code: (310) 772-6000 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 . --- --- Indicate the number of shares outstanding of each of the issuer's classes of Common Stock, as of the latest practicable date: Common Stock, par value $1.00 per share, 29,326,671 shares outstanding Nontransferable Class B Stock, par value $1.00 per share, 6,826,439 shares outstanding SUNAMERICA INC. INDEX (Unaudited) Page Number(s) --------- Part I - Financial Information Consolidated Balance Sheet - December 31, 1994 and September 30, 1994 3-4 Consolidated Income Statement - Three Months Ended December 31, 1994 and 1993 5 Consolidated Statement of Cash Flows - Three Months Ended December 31, 1994 and 1993 6-7 Notes to Consolidated Financial Statements 8 Management's Discussion and Analysis of Financial Condition and Results of Operations 9-21 Part II - Other Information 22 SUNAMERICA INC. CONSOLIDATED BALANCE SHEET (In thousands - unaudited) December 31, September 30, 1994 1994 ------------ ------------- ASSETS Investments: Cash and short-term investments $ 861,827 $ 569,382 Bonds, notes and redeemable preferred stocks: Available for sale, at fair value (amortized cost: December 31, 1994, $5,496,451; September 30, 1994, $5,599,780) 5,074,715 5,270,738 Held for investment, at amortized cost (fair value: December 31, 1994, $977,931; September 30, 1994, $1,072,222) 986,324 1,064,132 Mortgage loans 1,522,335 1,426,924 Common stocks, at fair value (cost: December 31, 1994, $36,020; September 30, 1994, $49,336) 51,603 61,660 Real estate 105,217 107,053 Other invested assets 891,108 780,501 ------------ ------------- Total investments 9,493,129 9,280,390 Variable annuity assets 4,359,290 4,513,093 Accrued investment income 111,850 105,686 Deferred acquisition costs 603,954 581,874 Other assets 210,326 175,182 ------------ ------------- TOTAL ASSETS $ 14,778,549 $ 14,656,225 ============ ============= SUNAMERICA INC. CONSOLIDATED BALANCE SHEET (Continued) (In thousands - unaudited) December 31, September 30, 1994 1994 ------------ ------------- LIABILITIES AND SHAREHOLDERS' EQUITY Reserves, payables and accrued liabilities: Reserves for fixed annuity contracts $ 4,545,686 $ 4,519,623 Reserves for guaranteed investment contracts 3,018,234 2,783,522 Trust deposits 464,840 442,320 Payable to brokers for purchases of securities 632,553 643,734 Income taxes currently payable 15,644 4,600 Other liabilities 253,150 212,429 ------------ ------------- Total reserves, payables and accrued liabilities 8,930,107 8,606,228 ------------ ------------- Variable annuity liabilities 4,359,290 4,513,093 ------------ ------------- Senior indebtedness: Long-term notes and debentures 472,835 472,835 Collateralized mortgage obligations -- 28,662 ------------ ------------- Total senior indebtedness 472,835 501,497 ------------ ------------- Deferred income taxes 54,369 74,319 ------------ ------------- Shareholders' equity: Preferred stock 374,273 374,273 Nontransferable Class B Stock 6,826 6,826 Common Stock 29,327 28,977 Additional paid-in capital 201,536 188,667 Retained earnings 545,020 512,571 Net unrealized losses on debt and equity securities available for sale (195,034) (150,226) ------------ ------------- Total shareholders' equity 961,948 961,088 ------------ ------------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 14,778,549 $ 14,656,225 ============ ============= SUNAMERICA INC. CONSOLIDATED INCOME STATEMENT For the three months ended December 31, 1994 and 1993 (In thousands, except per share amounts - unaudited) 1994 1993 ---------- ---------- Investment income $ 202,167 $ 190,531 ---------- ---------- Interest expense on: Fixed annuity contracts (59,878) (69,920) Guaranteed investment contracts (47,255) (36,845) Trust deposits (2,670) (1,940) Senior indebtedness (14,255) (11,112) ---------- ---------- Total interest expense (124,058) (119,817) ---------- ---------- NET INVESTMENT INCOME 78,109 70,714 ---------- ---------- NET REALIZED INVESTMENT LOSSES (7,066) (5,367) ---------- ---------- Fee income: Variable annuity fees 20,453 19,587 Asset management fees 7,025 8,349 Net retained commissions 6,620 6,637 Trust fees 3,750 3,054 Loan servicing fees 1,813 -- ---------- ---------- TOTAL FEE INCOME 39,661 37,627 ---------- ---------- Other income and expenses: Surrender charges 2,744 2,514 General and administrative expenses (33,108) (33,457) Amortization of deferred acquisition costs (18,674) (15,243) Other, net 1,868 476 ---------- ---------- TOTAL OTHER INCOME AND EXPENSES (47,170) (45,710) ---------- ---------- PRETAX INCOME 63,534 57,264 Income tax expense (18,400) (17,700) ---------- ---------- INCOME BEFORE CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING FOR INCOME TAXES 45,134 39,564 Cumulative effect of change in accounting for income taxes -- (33,500) ---------- ---------- NET INCOME $ 45,134 $ 6,064 ========== ========== EARNINGS PER SHARE: Income before cumulative effect of change in accounting for income taxes $ .98 $ .85 Cumulative effect of change in accounting for income taxes -- (.80) ---------- ---------- Net income $ .98 $ .05 ========== ========== NET EARNINGS APPLICABLE TO COMMON STOCK (used in the computation of earnings per share) $ 40,995 $ 1,963 ========== ========== AVERAGE COMMON SHARES OUTSTANDING 41,850 41,640 ========== ========== SUNAMERICA INC. CONSOLIDATED STATEMENT OF CASH FLOWS For the three months ended December 31, 1994 and 1993 (In thousands - unaudited) 1994 1993 ------------ ------------ CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 45,134 $ 6,064 Adjustments to reconcile net income to net cash provided by operating activities: Interest credited to: Fixed annuity contracts 59,878 69,920 Guaranteed investment contracts 47,255 36,845 Trust deposits 2,670 1,940 Net realized investment losses 7,066 5,367 Amortization (accretion) of net premiums (discounts) on investments (5,726) 6,248 Provision for deferred income taxes 4,177 5,130 Cumulative effect of change in accounting for income taxes -- 33,500 Change in: Deferred acquisition costs (1,580) (7,175) Other assets (17,517) (2,324) Income taxes currently payable 14,485 1,585 Other liabilities 1,887 (4,751) Other, net 7,420 (831) ------------ ------------ NET CASH PROVIDED BY OPERATING ACTIVITIES 165,149 151,518 ------------ ------------ CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of: Bonds, notes and redeemable preferred stocks available for sale (871,311) (2,707,419) Bonds, notes and redeemable preferred stocks held for investment (38,395) (26,144) Mortgage loans (115,868) (49,371) Other investments, excluding short-term investments (174,561) (99,397) Net assets of Imperial Premium Finance, Inc. (442,804) -- Sales of: Bonds, notes and redeemable preferred stocks available for sale 1,080,553 1,829,547 Kaufman and Broad Home Corporation warrants -- 28,618 Other investments, excluding short-term investments 43,693 39,383 Redemptions and maturities of: Bonds, notes and redeemable preferred stocks available for sale 268,118 79,115 Bonds, notes and redeemable preferred stocks held for investment 117,716 38,845 Mortgage loans 15,464 46,036 Other investments, excluding short-term investments 43,708 55,838 ------------ ------------ NET CASH USED BY INVESTING ACTIVITIES (73,687) (764,949) ------------ ------------ SUNAMERICA INC. CONSOLIDATED STATEMENT OF CASH FLOWS (Continued) For the three months ended December 31, 1994 and 1993 (In thousands - unaudited) 1994 1993 ------------ ------------ CASH FLOWS FROM FINANCING ACTIVITIES: Payments of cash dividends to shareholders $ (12,685) $ (12,495) Premium receipts on: Fixed annuity contracts 142,276 30,233 Guaranteed investment contracts 564,320 259,120 Net exchanges to (from) the fixed accounts of variable annuity contracts 39,671 (23,167) Receipts of trust deposits 167,706 47,565 Withdrawal payments on: Fixed annuity contracts (172,459) (157,034) Guaranteed investment contracts (376,862) (133,462) Trust deposits (147,828) (46,177) Claims and annuity payments on fixed annuity contracts (43,696) (44,126) Net proceeds from issuances of long-term notes -- 24,275 Repayments of collateralized mortgage obligations (28,662) (25,812) Net increase in other senior indebtedness -- 140,044 Net receipts from other short-term financings 69,202 373,833 ------------ ------------ NET CASH PROVIDED BY FINANCING ACTIVITIES 200,983 432,797 ------------ ------------ NET INCREASE (DECREASE) IN CASH AND SHORT-TERM INVESTMENTS 292,445 (180,634) CASH AND SHORT-TERM INVESTMENTS AT BEGINNING OF PERIOD 569,382 1,797,796 ------------ ------------ CASH AND SHORT-TERM INVESTMENTS AT END OF PERIOD $ 861,827 $ 1,617,162 ============ ============ SUPPLEMENTAL CASH FLOW INFORMATION: Interest paid on indebtedness $ 12,981 $ 10,120 ============ ============ Income taxes paid, net of refunds received $ 262 $ 10,985 ============ ============ SUNAMERICA INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. Basis of Presentation --------------------- In the opinion of the Company, the accompanying unaudited consolidated financial statements contain all adjustments (consisting of only normal recurring accruals) necessary to present fairly the Company's consolidated financial position as of December 31, 1994 and September 30, 1994 and the results of its consolidated operations and its consolidated cash flows for the three months ended December 31, 1994 and 1993. The results of operations for the three months ended December 31, 1994 are not necessarily indicative of the results to be expected for the full year. The accompanying unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements for the fiscal year ended September 30, 1994, contained in the Company's 1994 Annual Report to Shareholders. Certain items have been reclassified to conform to the current year's presentation. 2. Earnings per Share ------------------ The calculation of earnings per share is made by dividing applicable earnings by the weighted average number of shares of Common Stock and Nontransferable Class B Stock (collectively referred to as "Common Stock") outstanding during each period, adjusted for the incremental shares attributed to common stock equivalents. Common stock equivalents include outstanding employee stock options and convertible preferred stock, which includes the Series A and D Depositary Shares issued in October 1991 and March 1993, respectively. Earnings Applicable To Common Stock are reduced by preferred stock dividend requirements, which amounted to $4,139,000 for the three months ended December 31, 1994 and $4,101,000 for the three months ended December 31, 1993 and do not include dividends paid on the convertible issues amounting to $3,477,000 and $5,142,000, respectively. 3. Ratios of Earnings to Fixed Charges ----------------------------------- The ratios of earnings to fixed charges follow: Three months ended December 31, ------------------- 1994 1993 ------- ------- Ratio of earnings to fixed charges (excluding interest on fixed annuities, guaranteed investment contracts and trust deposits) 5.5x 6.2x ======= ======= Ratio of earnings to fixed charges (including interest on fixed annuities, guaranteed investment contracts and trust deposits) 1.5x 1.5x ======= ======= SUNAMERICA INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following is management's discussion and analysis of financial condition and results of operations of SunAmerica Inc. (the "Company") for the three months ended December 31, 1994 ("Fiscal 1995") and December 31, 1993 ("Fiscal 1994"). RESULTS OF OPERATIONS INCOME BEFORE CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING FOR INCOME TAXES totaled $45.1 million or $.98 per common share in Fiscal 1995, compared with $39.6 million or $.85 per common share in Fiscal 1994. The cumulative effect of the change in accounting for income taxes resulting from the implementation of Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes," amounted to a nonrecurring non-cash charge of $33.5 million or $.80 per common share in Fiscal 1994. Accordingly, net income amounted to $6.1 million or $.05 per common share in Fiscal 1994. PRETAX INCOME totaled $63.5 million in Fiscal 1995 and $57.3 million in Fiscal 1994. The $6.2 million improvement in Fiscal 1995 primarily resulted from increased net investment income and fee income, partially offset by increased amortization of deferred acquisition costs. NET INVESTMENT INCOME, which is the spread between the income earned on invested assets and the interest paid on fixed annuities and other interest-bearing liabilities, increased to $78.1 million in Fiscal 1995 from $70.7 million in Fiscal 1994. These amounts represent net investment spreads of 3.33% on average invested assets (computed on a daily basis) of $9.39 billion in Fiscal 1995 and 3.18% on average invested assets of $8.90 billion in Fiscal 1994. This $7.4 million improvement in net investment income primarily resulted from an increase in average invested assets, combined with an increase in the yield on such assets and a decrease in the rate paid on average interest-bearing liabilities. Investment income totaled $202.2 million in Fiscal 1995, compared with $190.5 million in Fiscal 1994. This $11.7 million improvement resulted primarily from the effects of a higher level of average invested assets. Investment income was also favorably impacted by an increase in the yield on average invested assets, which rose to 8.61% in Fiscal 1995 from 8.56% in Fiscal 1994. These yields are computed without subtracting net realized investment losses. If net realized investment losses were included in the computation, the yields would be 8.31% in Fiscal 1995 and 8.32% in Fiscal 1994. Over the last five fiscal quarters, the Company's yields (before considering net realized investment losses) on average invested assets have ranged from 8.32% to 8.61%; however, there can be no assurance that the Company will achieve similar yields in future periods. The Company has historically enhanced investment yield through its use of both dollar roll transactions ("Dollar Rolls") and total return corporate bond swap agreements ("Total Return Agreements"). Although the Company continues to use these programs, their use did not have a significant impact on investment income in Fiscal 1995. (See "Asset-Liability Matching" for additional discussion of Dollar Rolls and Total Return Agreements). Total interest expense aggregated $124.1 million in Fiscal 1995 and $119.8 million in Fiscal 1994. The average rate paid on all interest-bearing liabilities fell to 5.71% in Fiscal 1995 from 5.79% in Fiscal 1994. This decline in rate was primarily due to a decline in prevailing interest rates that began during the latter half of fiscal 1992 and continued into the first half of the 1994 fiscal year. This was reflected in a corresponding decrease in the average crediting rate on annuity contracts, the majority of which reprice annually as interest rate guarantees are renewed. Interest-bearing liabilities averaged $8.69 billion during Fiscal 1995, compared with $8.28 billion during Fiscal 1994. GROWTH IN AVERAGE INVESTED ASSETS to $9.39 billion during Fiscal 1995 from $8.90 billion during Fiscal 1994 primarily reflects sales of the Company's fixed-rate products, consisting of fixed annuities (including the fixed accounts of variable annuity products) and guaranteed investment contracts ("GICs"). Fixed annuity premiums aggregated $142.3 million in Fiscal 1995, up significantly from $23.8 million in Fiscal 1994. These premiums include premiums for the fixed accounts of variable annuities totaling $59.9 million and $12.5 million, respectively. Total fixed annuity premiums increased during Fiscal 1995 primarily due to rising demand for fixed-rate investment options as prevailing interest rates increased during the latter half of the 1994 fiscal year and during Fiscal 1995. GIC premiums increased to $564.3 million in Fiscal 1995 from $259.1 million in Fiscal 1994. The $305.2 million increase in GIC sales reflects the variable demand for such products from state and local governmental authorities, pension plans and asset management firms. In addition, the increase in GIC sales in Fiscal 1995 reflects the success of the Company's efforts to increase its GIC client base, particularly among asset management firms. The GICs issued by the Company and Sun Life Insurance Company of America ("Sun Life of America") typically guarantee the payment of principal and interest at a fixed rate for a fixed term of three to five years. However, interest is credited at certain defined variable rates on approximately 30% of the outstanding GICs issued by Sun Life of America. In the case of GICs sold to pension plans, certain withdrawals may be made at book value in the event of circumstances specified in the plan document, such as employee retirement, death, disability, hardship withdrawal or employee termination. Sun Life of America imposes surrender penalties in the event of other withdrawals prior to maturity. Contracts purchased by state and local governmental authorities may also permit scheduled book value withdrawals subject to the terms of the underlying indenture. Contracts purchased by asset management firms either prohibit withdrawals or permit withdrawals with notice ranging from seven to 270 days. In pricing GICs, the Company analyzes cash flow information and prices accordingly so that it is compensated for possible withdrawals prior to maturity (see "Financial Condition and Liquidity"). NET REALIZED INVESTMENT LOSSES totaled $7.1 million in Fiscal 1995 and $5.4 million in Fiscal 1994 and include impairment writedowns of $4.7 million in Fiscal 1995 and $6.0 million in Fiscal 1994. Therefore, net losses from sales of investments totaled $2.4 million in Fiscal 1995 and net gains from sales of investments totaled $0.6 million in Fiscal 1994. Net losses in Fiscal 1995 include $3.1 million of net gains on $5.7 million of sales of common stocks made primarily to maximize total return and $8.3 million of net losses on $1.09 billion of sales of bonds. These bond sales include approximately $215.4 million of sales of mortgage-backed securities ("MBSs"), $177.8 million of sales of high-yield investments and $106.7 million of sales of certain collateralized mortgage obligations ("CMOs") and asset- backed securities, that were primarily made to maximize total return. The Company also sold $439.5 million of premium finance loans at no gain or loss (see "Loan Servicing Fees"). Net gains in Fiscal 1994 include $7.2 million of net gains realized on $5.0 million of sales of common stocks made primarily to maximize total return. Net gains in Fiscal 1994 also include $6.4 million of net losses realized on $1.20 billion of sales of bonds. These bond sales include approximately $652.4 million of sales of MBSs made primarily to acquire other MBSs that were then used in Dollar Rolls. In addition, bond sales include $219.6 million of sales of high-yield investments and $162.7 million of sales of certain CMOs and asset-backed securities that were made primarily to maximize total return. Impairment writedowns include additional provisions applied to defaulted bonds amounting to $4.3 million in Fiscal 1995 and $6.0 million in Fiscal 1994. VARIABLE ANNUITY FEES are based on the market value of assets supporting variable annuity contracts in separate accounts. Such fees totaled $20.5 million in Fiscal 1995 and $19.6 million in Fiscal 1994. This increase reflects growth in average variable annuity assets, principally from the receipt of variable annuity premiums. Variable annuity assets averaged $4.43 billion during Fiscal 1995 and $4.30 billion during Fiscal 1994. Variable annuity premiums, which exclude premiums allocated to the fixed accounts of variable annuity products, declined to $97.0 million in Fiscal 1995 from $230.0 million in Fiscal 1994. This decline principally resulted from a rising demand for fixed-rate investment options, including the fixed accounts of variable annuities, as prevailing interest rates increased during the latter half of the 1994 fiscal year and during Fiscal 1995. The Company has encountered increased competition in the variable annuity marketplace in 1994 and anticipates that the market will remain highly competitive for the foreseeable future. ASSET MANAGEMENT FEES, which include investment advisory fees and 12b-1 distribution fees, are based on the market value of assets managed in mutual funds and private accounts by SunAmerica Asset Management Corp. Such fees totaled $7.0 million on average assets managed of $2.10 billion in Fiscal 1995 and $8.3 million on average assets managed of $2.54 billion in Fiscal 1994. Asset management fees decreased in Fiscal 1995 primarily due to a decline in the market value of assets managed and increased redemptions, both a reflection of adverse market conditions for fixed-income and equity securities which can be attributed, in part, to rising interest rates during the latter half of the 1994 fiscal year and during Fiscal 1995. Mutual fund sales in Fiscal 1995 also were affected by these adverse market conditions. Sales of mutual funds, excluding sales of money market funds, totaled $29.5 million in Fiscal 1995, compared with $112.2 million in Fiscal 1994. NET RETAINED COMMISSIONS are primarily derived from commissions on the sales of nonproprietary investment products by the Company's broker-dealer subsidiaries, after deducting the substantial portion of such commissions that is passed on to registered representatives. Net retained commissions totaled $6.6 million in both Fiscal 1995 and Fiscal 1994. Sales of nonproprietary products (mainly mutual funds and general securities) totaled $1.26 billion in Fiscal 1995 and $1.52 billion in Fiscal 1994. Net retained commissions are not proportionate to sales primarily due to differences in sales mix. TRUST FEES are earned by Resources Trust Company for providing administrative and custodial services primarily for individual retirement accounts ("IRAs"), as well as for other qualified pension plans. Trust fees increased to $3.8 million in Fiscal 1995 from $3.1 million in Fiscal 1994, primarily due to an increase in the average number of trust accounts, principally resulting from the October 1, 1994 acquisition of the right to service certain IRAs from New England Mutual Life Insurance Company. LOAN SERVICING FEES are earned by the Company's newly-formed subsidiary, Imperial Premium Finance, Inc. ("Imperial"). Imperial provides short-term installment loans for businesses to fund their commercial property and casualty insurance premiums. These loans are secured by the unearned premium associated with the underlying insurance policies. Currently, Imperial sells most of the short-term loans it originates and earns fee income by servicing the sold loans. Such fee income totaled $1.8 million in Fiscal 1995. Imperial's net assets were acquired on November 30, 1994, and, therefore, no such fee income was earned in Fiscal 1994. SURRENDER CHARGES on fixed and variable annuities totaled $2.7 million in Fiscal 1995, compared with $2.5 million in Fiscal 1994. Surrender charges generally are assessed on annuity withdrawals at declining rates during the first five to seven years of the contract. Withdrawal payments, which include surrenders and lump-sum annuity benefits, totaled $309.7 million in Fiscal 1995 and $237.7 million in Fiscal 1994. These payments represent 14.7% and 11.0%, respectively, of average fixed and variable annuity reserves. Withdrawals include variable annuity payments from the separate accounts totaling $144.4 million in Fiscal 1995 and $88.7 million in Fiscal 1994. Variable annuity surrenders have increased during Fiscal 1995 primarily due to surrenders on a closed block of business, policies coming off surrender charge restrictions and increased competition in the marketplace. In addition, fixed annuity surrenders have increased largely due to policies coming off surrender charge restrictions. Management anticipates that withdrawal rates will remain relatively stable for the foreseeable future and the Company's investment portfolio has been structured to provide sufficient liquidity for anticipated withdrawals. GENERAL AND ADMINISTRATIVE EXPENSES totaled $33.1 million in Fiscal 1995, compared with $33.5 million in Fiscal 1994, and represent 0.9% of average total assets for both Fiscal 1995 and Fiscal 1994. General and administrative expenses remain closely controlled through a company-wide cost containment program. AMORTIZATION OF DEFERRED ACQUISITION COSTS increased from that recorded during Fiscal 1994 primarily due to additional fixed and variable annuity and mutual fund sales and the subsequent amortization of related deferred commissions and other acquisition costs. Amortization of all deferred acquisition costs totaled $18.7 million in Fiscal 1995 and $15.2 million in Fiscal 1994. INCOME TAX EXPENSE totaled $18.4 million in Fiscal 1995 and $17.7 million in Fiscal 1994, representing effective tax rates of 29% in Fiscal 1995 and 31% in Fiscal 1994. These tax rates reflect the favorable impact of certain affordable housing tax credits. FINANCIAL CONDITION AND LIQUIDITY SHAREHOLDERS' EQUITY increased by $0.8 million to $961.9 million at December 31, 1994 from $961.1 million at September 30, 1994. This increase primarily reflects $45.1 million of net income recorded in Fiscal 1995, partially offset by a $44.8 million increase in net unrealized losses on debt and equity securities available for sale charged directly to shareholders' equity. Book value per common share amounted to $18.76 at December 31, 1994, compared with $18.90 at September 30, 1994. Excluding net unrealized losses on debt and equity securities available for sale, book value per common share amounted to $23.49 at December 31, 1994 and $22.58 at September 30, 1994. TOTAL ASSETS increased by $122.3 million to $14.78 billion at December 31, 1994 from $14.66 billion at September 30, 1994, principally due to a $212.7 million increase in invested assets, partially offset by a $153.8 million decline in the separate account for variable annuities that resulted primarily from unrealized losses and an excess of surrenders paid over premiums received. (See "Growth in Average Invested Assets," "Variable Annuity Fees" and "Surrender Charges.") INVESTED ASSETS at December 31, 1994 totaled $9.49 billion, compared with $9.28 billion at September 30, 1994. The Company managed most of these investments internally. Invested assets increased by $212.7 million during Fiscal 1995, primarily as a result of increases in reserves for GICs and fixed annuity contracts, partially offset by an increase in net unrealized losses on debt and equity securities available for sale charged directly to shareholders' equity. The Company's general investment philosophy is to hold fixed maturity assets for long-term investment. Thus, it does not have a trading portfolio. The Company carries the portion of its portfolio of bonds, notes and redeemable preferred stocks that is available for sale (the "Available for Sale Portfolio") at estimated fair value. The remaining portion of its portfolio of bonds, notes and redeemable preferred stocks is held for investment and is carried at amortized cost. BONDS, NOTES AND REDEEMABLE PREFERRED STOCKS, including those held for investment and the Available for Sale Portfolio (the "Bond Portfolio"), at December 31, 1994, had an aggregate amortized cost that exceeded its fair value by $430.1 million (including net unrealized losses of $421.7 million on the Available for Sale Portfolio). The aggregate amortized cost of the Bond Portfolio was $321.0 million above its fair value at September 30, 1994 (including net unrealized losses of $329.0 million on the Available for Sale Portfolio). The increase in unrealized losses on the Bond Portfolio since September 30, 1994 principally resulted from increases in prevailing interest rates and the corresponding effect on the Bond Portfolio. Approximately $6.45 billion or 99.3% of the Bond Portfolio (at amortized cost) at December 31, 1994 was rated by Standard and Poor's Corporation ("S&P"), Moody's Investors Service ("Moody's") or under comparable statutory rating guidelines established by the National Association of Insurance Commissioners ("NAIC") and implemented by either the NAIC or the Company. At December 31, 1994, approximately $5.49 billion (at amortized cost) was rated investment grade by one or both of these agencies or under the NAIC guidelines, including $4.01 billion of U.S. government/agency securities and MBSs. At December 31, 1994, the Bond Portfolio included $961.7 million (fair value, $887.9 million) of bonds not rated investment grade by S&P, Moody's or the NAIC. Based on their December 31, 1994 amortized cost, these bonds accounted for 6.4% of the Company's total assets and 9.7% of invested assets. In addition to its direct investment in non-investment grade bonds, the Company has entered into Total Return Agreements with an aggregate notional principal amount of $214.4 million at December 31, 1994 (see "Asset-Liability Matching"). Non-investment grade securities generally provide higher yields and involve greater risks than investment grade securities because their issuers typically are more highly leveraged and more vulnerable to adverse economic conditions than investment grade issuers. In addition, the trading market for these securities is usually more limited than for investment grade securities. The Company intends that its holdings of such securities not exceed current levels, but its policies may change from time to time, including in connection with any possible acquisition. The Company had no material concentrations of non-investment grade securities at December 31, 1994. The table on the following page summarizes the Company's rated bonds by rating classification as of December 31, 1994 (dollars in thousands): Rated Bonds By Rating Classification
Issues not rated by S&P/Moody's Issues Rated by S&P/Moody's By NAIC Category Total - - ---------------------------------------------- ----------------------------------- ---------------------------------- Estimated NAIC Estimated Percent of Estimated S&P (Moody's) Amortized fair category Amortized fair Amortized invested fair category(1) cost value (2) cost value cost assets(3) value - - --------------- ---------- ---------- -------- ---------- ----------- ---------- --------- ---------- AAA+ to A- (Aaa to A3) $2,750,518 $2,543,585 1 $1,399,475 $1,305,780 $4,149,993 41.92% $3,849,365 BBB+ to BBB- (Baa1 to Baa3) 428,448 394,208 2 908,516 874,578 1,336,964 13.51 1,268,786 BB+ to BB- (Ba1 to Ba3) 101,325 93,073 3 199,042 194,187 300,367 3.03 287,260 B+ to B- (B1 to B3) 324,099 294,058 4 254,552 236,482 578,651 5.85 530,540 CCC+ to C- (Caa to C) 15,763 14,484 5 35,525 29,409 51,288 0.52 43,893 D - - 6 31,357 26,183 31,357 0.32 26,183 ---------- ---------- ---------- ---------- ---------- ---------- TOTAL RATED ISSUES $3,620,153 $3,339,408 $2,828,467 $2,666,619 $6,448,620 $6,006,027 ========== ========== ========== ========== ========== ========== (1) S&P rates debt securities in eleven rating categories, from AAA (the highest) to D (in payment default). A plus (+) or minus (-) indicates the debt's relative standing within the rating category. A security rated BBB- or higher is considered investment grade. Moody's rates debt securities in nine rating categories, from Aaa (the highest) to C (extremely poor prospects of attaining real investment standing). The number 1, 2 or 3 (with 1 the highest and 3 the lowest) indicates the debt's relative standing within the rating category. A security rated Baa3 or higher is considered investment grade. Issues are categorized based on the higher of the S&P or Moody's rating if rated by both agencies. (2) Bonds and short-term promissory instruments are divided into six quality categories for NAIC rating purposes, ranging from 1 (highest) to 5 (lowest) for nondefaulted bonds plus one category, 6, for bonds in or near default. These six categories correspond with the S&P/Moody's rating groups listed above, with categories 1 and 2 considered investment grade. A substantial portion of the assets in the NAIC categories were rated by the Company based on its implementation of NAIC rating guidelines. (3) At amortized cost.
SENIOR SECURED LOANS ("Secured Loans") are included in the Bond Portfolio and their amortized cost aggregated $684.7 million at December 31, 1994. Secured Loans are primarily originated by money center or investment banks or are originated directly by the Company. Secured Loans are senior to subordinated debt and equity, and virtually all are secured by assets of the issuer. At December 31, 1994, Secured Loans consisted of loans to 99 borrowers spanning 33 industries, with no industry concentration constituting more than 12% of these assets. While the trading market for Secured Loans is more limited than for publicly traded corporate debt issues, management believes that participation in these transactions has enabled the Company to improve its investment yield. The majority of the Company's Secured Loans are not rated by S&P or Moody's. However, 90% of the Secured Loans (at amortized cost) are rated in NAIC categories 1 and 2. Although, as a result of restrictive financial covenants, Secured Loans involve greater risk of technical default than do publicly traded investment grade securities, management believes that generally the risk of loss upon default for its Secured Loans is mitigated by their financial covenants and senior secured positions. MORTGAGE LOANS aggregated $1.52 billion at December 31, 1994 and consisted of 666 first mortgage loans with an average loan balance of approximately $2.3 million, collateralized by properties located in 26 states. Approximately 50% of the portfolio was multifamily residential, 22% was retail, 7% was office, 7% was industrial and 14% was other types. At December 31, 1994, approximately 30% of the portfolio was secured by properties located in California and no more than 12% of the portfolio was secured by properties in any other single state. At December 31, 1994, there were no construction, takeout, farm or land loans and there were 25 loans with outstanding balances of $10 million or more, which loans collectively aggregated approximately 27% of the portfolio. At the time of their origination or purchase by the Company, virtually all mortgage loans had loan-to-value ratios of 75% or less. At December 31, 1994, approximately 20% of the mortgage loan portfolio consisted of loans with balloon payments due before January 1, 1998. At December 31, 1994, loans delinquent by more than 90 days totaled $24.3 million and constituted 1.6% of total mortgages. Loans foreclosed upon and transferred to real estate in the balance sheet totaled $3.9 million (0.3% of total mortgages), and $1.2 million (0.1% of total mortgages) during Fiscal 1995 and Fiscal 1994, respectively. Approximately 40% of the mortgage loans in the portfolio at December 31, 1994 were seasoned loans underwritten to the Company's standards and purchased at or near par from the Resolution Trust Corporation and other financial institutions, many of which were downsizing their portfolios. Such loans generally have higher average interest rates than loans that could be originated today. The balance of the mortgage loan portfolio has been originated by the Company under strict underwriting standards. Commercial mortgage loans on properties such as offices, hotels and shopping centers generally represent a higher level of risk for the industry than have mortgage loans secured by multifamily residences. This greater risk is due to several factors, including the larger size of such loans, and the effects of general economic conditions on these commercial properties. However, due to the seasoned nature of the Company's mortgage loans, its emphasis on multifamily loans and its strict underwriting standards, the Company believes that it has reduced the risk attributable to its mortgage loan portfolio while maintaining attractive yields. At December 31, 1994, mortgage loans having an aggregate carrying value of $81.8 million had been restructured. Of this amount, $9.8 million was restructured during Fiscal 1995 and $0.6 million, $24.2 million and $47.2 million was restructured during fiscal years 1994, 1993 and 1992, respectively. ASSET-LIABILITY MATCHING is utilized by the Company to minimize the risks of interest rate fluctuations and disintermediation. The Company believes that its fixed-rate liabilities should be backed by a portfolio principally composed of fixed maturities that generate predictable rates of return. The Company does not have a specific target rate of return. Instead, its rates of return vary over time depending on the current interest rate environment, the slope of the yield curve, the spread at which fixed maturities are priced over the yield curve and general competitive conditions within the industry. Its portfolio strategy is designed to achieve adequate risk-adjusted returns consistent with its investment objectives of effective asset-liability matching, liquidity and safety. The Company designs its fixed-rate products and conducts its investment operations in order to closely match the duration of the assets in its investment portfolio to its annuity and GIC obligations. The Company seeks to achieve a predictable spread between what it earns on its assets and what it pays on its liabilities by investing principally in fixed maturities. The Company's fixed-rate products incorporate surrender charges, two-tiered interest rate structures or other limitations on when contracts can be surrendered for cash to encourage persistency and discourage withdrawals. Approximately 79% of the Company's fixed annuity and GIC reserves had surrender penalties or other restrictions at December 31, 1994. As part of its asset-liability matching discipline, the Company conducts detailed computer simulations that model its fixed-maturity assets and liabilities under commonly used stress-test interest rate scenarios. Based on the results of these computer simulations, the investment portfolio has been constructed with a view to maintaining a desired investment spread between the yield on portfolio assets and the rate paid on its reserves under a variety of possible future interest rate scenarios. The cash flow obtained from MBSs helps to maintain the anticipated spread, while providing desired liquidity. At December 31, 1994, the weighted average life of the Company's investments was approximately four-and-three-fourths years and the portfolio had a duration of approximately three-and-three-fourths years. Weighted average life is defined as the average time to receipt of all principal, incorporating the effects of scheduled amortization and expected prepayments, weighted by book value. Duration is a common measure for the price sensitivity of a fixed- income security or portfolio to changes in interest rates. It is the weighted average time to receipt of all expected cash flows, both principal and interest, including the effects of scheduled amortization and expected prepayments, in which the weight attached to each year of receipt is the proportion of the present value of cash to be received during that year to the total present value of the portfolio. As a component of investment strategy, the Company utilizes Interest Rate Swap Agreements ("Swap Agreements") to match assets more closely to liabilities. Swap Agreements are agreements to exchange with a counterparty interest rate payments of differing character (for example, fixed-rate payments exchanged for variable-rate payments) based on an underlying principal balance (notional principal) to hedge against interest rate changes. The Company generally utilizes Swap Agreements to create a hedge that effectively converts floating-rate assets into fixed-rate assets. At December 31, 1994, the Company had 25 outstanding Swap Agreements with an aggregate notional principal amount of $1.23 billion. These agreements mature in various years through 1998 and have an average remaining maturity of 25 months. The Company also seeks to provide liquidity, while enhancing its spread income, by using reverse repurchase agreements ("Reverse Repos"), Dollar Rolls and Total Return Agreements and by investing in MBSs. Reverse Repos involve a sale of securities and an agreement to repurchase the same securities at a later date at an agreed upon price and are generally over-collateralized. Dollar Rolls are similar to Reverse Repos except that the repurchase involves securities that are only substantially the same as the securities sold and the arrangement is not collateralized, nor is it governed by a repurchase agreement. Total Return Agreements effectively exchange a fixed rate of interest on the notional amount for the coupon income plus or minus the increase or decrease in the market value of specified non-investment grade corporate bonds. MBSs are generally investment grade securities collateralized by large pools of mortgage loans. MBSs generally pay principal and interest monthly. The amount of principal and interest payments may fluctuate as a result of prepayments of the underlying mortgage loans. There are risks associated with some of the techniques the Company uses to enhance its spread income and match its assets and liabilities. The primary risk associated with Dollar Rolls, Reverse Repos and Swap Agreements is the risk associated with counterparty nonperformance. In addition, Swap Agreements also have interest rate risk. However, the Company's Swap Agreements hedge variable-rate assets, and interest rate fluctuations that adversely affect the net cash received or paid under the terms of the Swap Agreement would be offset by increased interest income earned on the variable-rate assets. The primary risks associated with Total Return Agreements are the risk of potential loss due to bond market fluctuation and counterparty risk. The Company believes, however, that the counterparties to its Dollar Rolls, Reverse Repos, Swap Agreements and Total Return Agreements are financially responsible and that the counterparty risk associated with those transactions is minimal. Counterparty risk associated with Dollar Rolls is further mitigated by the Company's participation in an MBS trading clearinghouse. The sell and buy transactions that are submitted to this clearinghouse are marked to market on a daily basis and each participant is required to over-collateralize its net loss position by 30% with either cash, letters of credit or government securities. The primary risk associated with MBSs is that a changing interest rate environment might cause prepayment of the underlying obligations at speeds slower or faster than anticipated at the time of their purchase. INVESTED ASSETS EVALUATION routinely includes a review by the Company of its portfolio of debt securities. Management identifies monthly those investments that require additional monitoring and carefully reviews the carrying value of such investments at least quarterly to determine whether specific investments should be placed on a nonaccrual basis and to determine declines in value that may be other than temporary. In making these reviews for bonds, management principally considers the adequacy of collateral (if any), compliance with contractual covenants, the borrower's recent financial performance, news reports and other externally generated information concerning the creditor's affairs. In the case of publicly traded bonds, management also considers market value quotations, if available. For mortgage loans, management generally considers information concerning the mortgaged property and, among other things, factors impacting the current and expected payment status of the loan and, if available, the current fair value of the underlying collateral. The carrying values of bonds that are determined to have declines in value that are other than temporary are reduced to net realizable value and no further accruals of interest are made. Mortgage loan writedowns are based on losses expected by management to be realized on transfers of mortgage loans to real estate, on the disposition and settlement of mortgage loans and on mortgage loans that management believes may not be collectible in full. Accrual of interest is suspended when principal and interest payments on mortgage loans are past due more than 90 days. DEFAULTED INVESTMENTS, comprising all investments (at amortized cost) that are in default as to the payment of principal or interest, totaled $57.9 million at December 31, 1994, including $33.6 million (fair value, $28.5 million) of unsecured loans and $24.3 million (fair value, $24.3 million) of mortgage loans. At December 31, 1994, defaulted investments constituted 0.6% of total invested assets at amortized cost. At September 30, 1994, defaulted investments totaled $56.2 million, including $45.9 million of mortgage loans and $10.3 million of unsecured loans. At September 30, 1994, defaulted investments constituted 0.6% of total invested assets at amortized cost and their fair value was equal to their amortized cost. SOURCES OF LIQUIDITY are readily available to the Company in the form of existing cash and short-term investments, Reverse Repo capacity on invested assets and, if required, proceeds from invested asset sales. At December 31, 1994, approximately $1.52 billion of the Company's Bond Portfolio had an aggregate unrealized gain of $35.1 million, while approximately $4.96 billion had an aggregate unrealized loss of $465.2 million. In addition, the Company's investment portfolio also currently provides approximately $104.8 million of monthly cash flow from scheduled principal and interest payments. Management is aware that prevailing market interest rates may shift significantly and has strategies in place to manage either an increase or decrease in prevailing rates. In a rising interest rate environment, the Company's average cost of funds would increase over time as it prices its new and renewing annuities to maintain a generally competitive market rate. Management would seek to place new funds in investments that were matched in duration to, and higher yielding than, the liabilities assumed. The Company believes that liquidity to fund withdrawals would be available through incoming cash flow, the sale of short-term or floating-rate instruments or Reverse Repos on the Company's substantial MBS segment of the Bond Portfolio, thereby avoiding the sale of fixed-rate assets in an unfavorable bond market. In a declining rate environment, the Company's cost of funds would decrease over time, reflecting lower interest crediting rates on its fixed annuities and GICs. Should increased liquidity be required for withdrawals, the Company believes that a significant portion of its investments could be sold without adverse consequences in light of the general strengthening that would be expected in the bond market. On a parent company stand-alone basis, SunAmerica Inc. (the "Parent"), at December 31, 1994, had invested assets with an amortized cost of $909.8 million (fair value, $871.3 million) and outstanding indebtedness of $472.8 million, comprising all of the Company's consolidated senior indebtedness. Additionally, as of December 31, 1994, the Parent had three GICs purchased by local government authorities that aggregated $270.7 million. The Parent's annual debt service with respect to these debt and GIC obligations totals $66.5 million for fiscal 1995, $70.3 million for fiscal 1996, $70.3 million for fiscal 1997, $89.9 million for fiscal 1998, $198.9 million for fiscal 1999 and $908.9 million, in the aggregate, thereafter. In addition to the Parent's stand-alone sources of liquidity, at December 31, 1994, there was approximately $69.7 million of dividends available to the Parent from its regulated life insurance subsidiaries. The Parent received dividends of $43.0 million in December 1993, $30.0 million in December 1992 and $25.0 million in December 1991 from Sun Life of America. The Parent also received dividends of $1.5 million in Fiscal 1995, $2.4 million in the 1994 fiscal year, $4.7 million in fiscal 1993, $17.1 million in fiscal 1992 and $43.2 million in fiscal 1991 from its other directly-owned subsidiaries. The Parent; Sun Life of America; SunAmerica Financial, Inc.; and SunAmerica Asset Management Corp. have sold certain of their interests in various limited partnerships that make tax-advantaged affordable housing investments. As part of the sales transactions, the Parent has guaranteed a minimum defined yield and funding of certain defined operating deficits in return for a fee. A portion of the fees received has been deferred to absorb any required payments with respect to these guarantees. Based on an evaluation of the underlying housing projects, it is management's belief that such deferrals are ample for this purpose. Accordingly, management does not anticipate any material future losses with respect to these guarantees. Anchor has undertaken to dispose of $57.3 million (its statutory carrying value) of certain of its real estate located in the Phoenix, Arizona metropolitan area during the next one to two years, either to affiliated or nonaffiliated parties, and the Parent has guaranteed that Anchor will receive its statutory carrying value of these assets. The Parent has pledged certain marketable securities having an amortized cost of $39.9 million at December 31, 1994 to secure this guarantee. This real estate has a consolidated carrying value of approximately $28.7 million at December 31, 1994. REGULATION The Company's insurance subsidiaries are subject to regulation and supervision by the states in which they are authorized to transact business. State insurance laws establish supervisory agencies with broad administrative and supervisory powers related to granting and revoking licenses to transact business, regulating marketing and other trade practices, operating guaranty associations, licensing agents, approving policy forms, regulating certain premium rates, regulating insurance holding company systems, establishing reserve requirements, prescribing the form and content of required financial statements and reports, performing financial and other examinations, determining the reasonableness and adequacy of statutory capital and surplus, regulating the type and amount of investments permitted, limiting the amount of dividends that can be paid without first obtaining regulatory approval and other related matters. In recent years, the insurance regulatory framework has been placed under increased scrutiny by various states, the federal government and the NAIC. Various states have considered or enacted legislation that changes, and in many cases increases, the states' authority to regulate insurance companies. Legislation has been introduced from time to time in Congress that could result in the federal government assuming some role in the regulation of insurance companies. The NAIC has recently approved and recommended to the states for adoption and implementation several regulatory initiatives designed to reduce the risk of insurance company insolvencies. These initiatives include new investment reserve requirements, risk-based capital standards and restrictions on an insurance company's ability to pay dividends to its stockholders. The NAIC is also currently developing model laws to govern insurance company investments. Current proposals are still being debated and the Company is monitoring developments in this area and the effects any change would have on the Company. SunAmerica Asset Management is registered with the Securities and Exchange Commission (the "Commission") as a registered investment adviser under the Investment Advisers Act of 1940. The mutual funds that it markets are subject to regulation under the Investment Company Act of 1940. SunAmerica Asset Management and the mutual funds are subject to regulation and examination by the Commission. In addition, variable annuities and the related separate accounts of the Company's life insurance subsidiaries are subject to regulation by the Commission under the Securities Act of 1933 and the Investment Company Act of 1940. Resources Trust is subject to regulation by the Colorado State Banking Board and the Federal Deposit Insurance Corporation. The Company's broker-dealer subsidiaries are subject to regulation and supervision by the states in which they transact business, as well as by the National Association of Securities Dealers, Inc. (the "NASD"). The NASD has broad administrative and supervisory powers relative to all aspects of business and may examine the subsidiaries' business and accounts at any time. SUNAMERICA INC. PART II - OTHER INFORMATION ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K - - ----------------------------------------- EXHIBITS 24 The consent of Price Waterhouse, independent accountants, filed as an exhibit to the Company's 1994 Annual Report on Form 10-K, is incorporated by reference herein. 27 Financial Data Schedule. REPORTS ON FORM 8-K On November 14, 1994, the Company filed a current report on Form 8-K that announced its fourth quarter 1994 earnings. On January 24, 1995, the Company filed a current report on Form 8-K that announced its first quarter 1995 earnings. 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. SUNAMERICA INC. ----------------------------------- Registrant Dated February 13, 1995 /s/ JAY S. WINTROB ---------------------------- ----------------------------------- Jay S. Wintrob Executive Vice President Dated February 13, 1995 /s/ SCOTT L. ROBINSON ---------------------------- ----------------------------------- Scott L. Robinson Senior Vice President and Controller EX-27 2
7 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE SHEET AND INCOME STATEMENT OF SUNAMERICA INC.'S FORM 10-Q FOR THE QUARTER ENDED DECEMBER 31, 1994 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 3-MOS SEP-30-1995 DEC-31-1994 5,074,715 986,324 977,931 51,603 1,522,335 105,217 9,493,129 861,827 0 603,954 14,778,549 7,563,920 0 0 0 472,835 0 374,273 36,153 551,522 14,778,549 0 185,242 (7,066) 39,661 107,133 18,674 28,496 63,534 18,400 45,134 0 0 0 45,134 .98 .98 0 0 0 0 0 0 0
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