1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________
FORM 10-Q
X Quarterly Report Under Section 13 or 15 (d) of the
-------- Securities Exchange Act of 1934
For the Quarterly Period Ended Date
June 30, 1994
-------- Transition Report Pursuant to Section 13 or 15 (d)
of the Securities Exchange Act of 1934
_______________________
Commission File Number 0-4604
CINCINNATI FINANCIAL CORPORATION
--------------------------------
(Exact name of registrant as specified in its charter)
An Ohio Corporation 31-0746871
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
6200 South Gilmore Road
Fairfield, Ohio 45014-5141
(Address of principal executive offices)
Registrant's telephone number, including area code: 513/870-2000
*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 .
------- -------
Securities registered pursuant to Section 12(g) of the Act:
$2.00 Par Common--Amount~50,363,728 shares outstanding at June 30, 1994
$80,000,000 of 5-1/2% Convertible Senior Debentures Due 2002
2
PART I
------
ITEM 1. FINANCIAL STATEMENTS
CINCINNATI FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
June 30, December 31,
1994 1993
-------------- ---------------
ASSETS
- - ------
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . $ 20,409,273 $ 48,113,639
Investments
Fixed Maturities . . . . . . . . . . . . . . . . . . . 1,855,537,903 1,759,655,272
Equity Securities. . . . . . . . . . . . . . . . . . . 2,267,125,234 2,318,803,191
Other Invested Assets. . . . . . . . . . . . . . . . . 38,517,383 38,363,656
Finance Receivables. . . . . . . . . . . . . . . . . . 14,240,963 13,010,774
Premiums Receivable. . . . . . . . . . . . . . . . . . . 138,739,850 134,360,968
Reinsurance Receivable . . . . . . . . . . . . . . . . . 54,844,216 59,060,502
Prepaid Reinsurance Premiums . . . . . . . . . . . . . . 24,653,500 23,966,451
Investment Income Receivable . . . . . . . . . . . . . . 54,095,477 50,120,280
Land, Buildings and Equipment for Company Use (at Cost
Less Accumulated Depreciation) . . . . . . . . . . . . 32,974,616 31,336,331
Deferred Acquisition Costs Pertaining to Unearned
Premiums and to Life Policies in Force . . . . . . . . 105,102,206 104,090,953
Other Assets . . . . . . . . . . . . . . . . . . . . . . 25,983,534 21,406,477
-------------- ---------------
Total Assets $4,632,224,155 $4,602,288,494
============== ==============
LIABILITIES
- - -----------
Insurance Reserves:
Unearned Premiums. . . . . . . . . . . . . . . . . . . $ 363,911,659 $ 362,012,334
Life Policy Reserves . . . . . . . . . . . . . . . . . 359,794,518 345,977,142
Losses and Loss Expenses . . . . . . . . . . . . . . . 1,472,350,418 1,402,508,455
Notes Payable. . . . . . . . . . . . . . . . . . . . . . 108,816,665 78,065,805
5-1/2% Convertible Senior Debentures Due 2002. . . . . . 80,000,000 80,000,000
Federal Income Taxes
Current. . . . . . . . . . . . . . . . . . . . . . . . -0- 5,099,591
Deferred . . . . . . . . . . . . . . . . . . . . . . . 234,128,000 290,904,126
Other Liabilities. . . . . . . . . . . . . . . . . . . . 73,792,697 90,383,444
-------------- ---------------
Total Liabilities 2,692,793,957 2,654,950,897
-------------- ---------------
SHAREHOLDERS' EQUITY
- - --------------------
Common Stock, $2 per Share; Authorized 80,000,000
Shares; Issued 1994--Amount 50,376,306; 199--Amount
50,313,161 Shares; Outstanding 1994--Amount50,363,728;
1993--Amount 50,306,301 Shares . . . . . . . . . . . . 100,752,612 100,626,322
Paid-In Capital. . . . . . . . . . . . . . . . . . . . . 103,966,712 102,234,649
Retained Earnings. . . . . . . . . . . . . . . . . . . . 1,071,715,190 996,358,793
Unrealized Gain on Investments, Less Taxes . . . . . . . 663,540,007 748,513,998
-------------- ---------------
1,939,974,521 1,947,733,762
Less Treasury Shares at Cost (1994--Amount 12,578 Shares;
1993--Amount 6,860 Shares) . . . . . . . . . . . . . . (544,323) (396,165)
-------------- ---------------
Total Shareholders' Equity . . . . . . . . . . . . . 1,939,430,198 1,947,337,597
-------------- ---------------
Total Liabilities and Shareholders' Equity . . . . $4,632,224,155 $4,602,288,494
============== ==============
Accompanying notes are an integral part of these financial statements.
3
CINCINNATI FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
Six Months Ended June 30, Three Months Ended June 30,
------------------------------------ ----------------------------------
Revenues: 1994 1993 1994 1993
------------- ------------- ------------ ------------
Premiums Earned:
Property and Casualty . . . . . $ 573,765,314 $ 534,525,705 $292,038,043 $273,274,728
Life. . . . . . . . . . . . . . 21,190,071 19,736,170 10,460,735 9,980,694
Accident and Health . . . . . . 3,593,501 3,816,464 1,781,934 1,899,811
------------- ------------- ------------ ------------
Net Premiums Earned . . . . . 598,548,886 558,078,339 304,280,712 285,155,233
Investment Income, Less Expenses. 129,648,340 119,942,700 65,873,768 61,186,062
Realized Gain on Investments. . . 24,824,622 41,574,209 5,900,547 22,137,391
Other Income. . . . . . . . . . . 5,501,223 5,136,630 2,765,524 2,592,755
------------- ------------- ------------ ------------
Total Revenues. . . . . . . . . 758,523,071 724,731,878 378,820,551 371,071,441
------------- ------------- ------------ ------------
Benefits & Expenses:
Ins. Losses and Policyholder Ben. 440,493,384 403,240,130 205,951,288 205,683,728
Commissions . . . . . . . . . . . 115,248,954 111,281,952 61,785,628 58,113,358
Other Operating Expenses. . . . . 41,503,681 40,957,227 20,948,284 20,504,810
Taxes, Licenses & Fees. . . . . . 20,812,382 17,111,758 12,184,832 8,391,786
Increase in Deferred Acquisition
Costs Pertaining to Unearned
Premiums and to Life Policies
in Force. . . . . . . . . . . . (1,011,253) (7,046,891) (935,530) (4,646,877)
Interest Expense. . . . . . . . . 4,245,866 3,719,680 2,307,300 2,076,919
Other Expenses. . . . . . . . . . 1,369,807 1,496,770 609,870 650,626
------------- ------------- ------------ ------------
Total Expenses. . . . . . . . . 622,662,821 570,760,626 302,851,672 290,774,350
------------- ------------- ------------ ------------
Income Before Income Taxes and Cum.
Effect of a Change in Acct. Prin. 135,860,250 153,971,252 75,968,879 80,297,091
------------- ------------- ------------ ------------
Provision (Benefit) for Inc. Taxes:
Current . . . . . . . . . . . . . 39,298,831 39,364,483 16,944,824 18,630,457
Deferred. . . . . . . . . . . . . (11,020,929) (4,729,375) (58,823) (431,694)
------------- ------------- ------------ ------------
Total . . . . . . . . . . . . . 28,277,902 34,635,108 16,886,001 18,198,763
------------- ------------- ------------ ------------
Income Before Cum. Effect of Change
in Accounting for Income Taxes. . 107,582,348 119,336,144 59,082,878 62,098,328
Cum. Effect of Change in Acct.
for Income Taxes. . . . . . . . . -0- 13,844,678 -0- -0-
------------- ------------- ------------ ------------
Net Income . . . . . . . . . . . . $ 107,582,348 $ 133,180,822 $ 59,082,878 $ 62,098,328
============= ============= ============ ============
(Decrease) Increase in Unrealized
Gains on Fixed Maturities and
Equity Investments. . . . . . . . $(130,729,187) $ 83,941,984 $(22,071,947) $ 7,171,255
Less (Benefit) Provision for
Federal Income Taxes. . . . . . . (45,755,196) 28,540,275 (7,725,181) 2,438,227
------------- ------------- ------------ ------------
(Decrease) Increase in Unrealized
Gains on Fixed Maturities and
Equity Investments Less Applicable
Federal Income Taxes. . . . . . . $ (84,973,991) $ 55,401,709 $(14,346,766) $ 4,733,028
------------- ------------- ------------ ------------
Weighted Average Shares Outstanding 52,223,339 52,040,297 52,227,480 52,074,868
------------- ------------- ------------ ------------
Per Common Share:
Net Income Before Cum. Effect of
Change in Acct. for Income Taxes $2.09 $2.33 $1.15 $1.21
Cum. Effect of Change in Acct.
for Income Taxes. . . . . . . . -0- .26 -0- -0-
----- ----- ----- -----
Total Net Income. . . . . . . . $2.09 $2.59 $1.15 $1.21
===== ===== ===== =====
Cash Dividends Declared . . . . . $ .64 $ .56 $ .32 $ .28
===== ===== ===== ======
Accompanying notes are an integral part of these financial statements.
4
CINCINNATI FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
(UNAUDITED)
SIX MONTHS ENDED JUNE 30, 1994
------------------------------
Common Stock Unrealized
---------------------------- Treasury Paid-In Retained Gains on
Shares Amount Stock Capital Earnings Investments
----------- ------------ --------- ------------- ------------- ------------
Balance December 31,
l993 50,313,161 $100,626,322 $(396,165) $102,234,649 $ 996,358,793 $748,513,998
Net Income 107,582,348
Effect of Change in
Accounting for
Fixed Maturity
Invest., Net of
Income Taxes of
$42,721,703 79,340,305
Change in Unrealized
Gains on Fixed
Mat. and Equity
Invest., Net of
Income Taxes of
$88,476,900 (164,314,296)
Dividends Declared (32,225,951)
Purchase of Treasury
Stock (148,158) (1,44)
Stock Issued Upon
Exercise of
Stock Options 63,145 126,290 1,733,512
----------- ------------ --------- ------------- ------------- ------------
Balance June 30,
1994 50,376,306 $100,752,612 $(544,323) $103,966,712 $1,071,715,190 $663,540,007
========== ============ ========= ============ ============== ============
Accompanying notes are an integral part of these financial statements.
5
CINCINNATI FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Six Months Ended June 30,
-------------------------------------
1994 1993
------------ -------------
Cash flows from operating activities:
Net income . . . . . . . . . . . . . . . . . . . . . . $107,582,348 $ 133,180,822
Adjustments to reconcile operating income to net cash
provided by operating activities:
Depreciation and amortization. . . . . . . . . . . . 4,287,216 4,986,489
Increase in net unearned premiums. . . . . . . . . . 1,212,276 15,850,666
Increase in net life policy reserves . . . . . . . . 13,817,376 14,388,462
Increase in net loss and loss expense reserves . . . 74,058,249 85,699,988
Increase in net premiums receivable. . . . . . . . . (4,378,882) (10,007,361)
Increase in deferred acquisition costs . . . . . . . (1,011,253) (7,046,891)
(Decrease) increase in other liabilities . . . . . . (18,621,376) 14,316,918
Increase in investment income receivable . . . . . . (3,975,197) (3,613,310)
Increase (Decrease) in policy loans and accounts
receivable . . . . . . . . . . . . . . . . . . . . 2,231,123 (9,434,014)
Decrease in deferred income taxes. . . . . . . . . . (11,020,929) (31,037,256)
(Decrease) Increase in current income taxes. . . . . (10,529,114) 2,757,838
Realized gain on investments . . . . . . . . . . . . (24,824,622) (41,574,209)
Other. . . . . . . . . . . . . . . . . . . . . . . . (534,368) (1,114,392)
------------ -------------
Net cash provided by operating activities. . . . . 128,292,847 167,353,750
------------ -------------
Cash flows from investing activities:
Sale of fixed maturities investments . . . . . . . . 49,031,602 68,070,045
Maturity of fixed maturities investments . . . . . . 159,854,590 170,205,719
Sale of equity securities investments. . . . . . . . 61,980,975 94,674,317
Collection of mortgage loans . . . . . . . . . . . . 484,654 779,269
Collection of finance receivables. . . . . . . . . . 3,216,825 3,223,847
Purchase of fixed maturities investments . . . . . . (260,144,559) (282,295,165)
Purchase of equity securities investments. . . . . . (160,482,124) (201,560,132)
Investment in mortgage loans . . . . . . . . . . . . (1,007,740) (353,699)
Investment in land, buildings and equipment. . . . . (5,922,911) (4,027,122)
Investment in finance receivables. . . . . . . . . . (4,447,014) (3,695,663)
Investment in real estate and other. . . . . . . . . (827,190) (360,818)
------------ -------------
Net cash used in investing activities. . . . . . . (158,262,892) (155,339,402)
------------ -------------
Cash flows from financing activities:
Proceeds from stock options exercised. . . . . . . . 1,859,802 5,468,512
(Purchase) Issuance of treasury shares . . . . . . . (149,607) 19,300
Increase in notes payable. . . . . . . . . . . . . . 30,750,860 255,687
Payment of cash dividends to shareholders. . . . . . (30,195,376) (27,012,102)
------------ -------------
Net cash provided by (used in) financing activities 2,265,679 (21,268,603)
------------ -------------
Net decrease in cash . . . . . . . . . . . . . . . . . . (27,704,366) (9,254,255)
Cash at beginning of period. . . . . . . . . . . . . . . 48,113,639 49,982,702
------------ -------------
Cash at end of period. . . . . . . . . . . . . . . . . . $ 20,409,273 $ 40,728,447
============ =============
Supplemental disclosures of cash flow information
Interest paid. . . . . . . . . . . . . . . . . . . . . $ 3,839,554 $ 3,883,039
============ =============
Income taxes paid. . . . . . . . . . . . . . . . . . . $ 50,000,000 $ 40,000,000
============ =============
Accompanying notes are an integral part of these financial statements.
6
CINCINNATI FINANCIAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE I - ACCOUNTING POLICIES
The consolidated financial statements include the accounts of the Company and
all of its subsidiaries, each of which is wholly owned, and are presented in
conformity with generally accepted accounting principles. All significant
inter-company investments and transactions have been eliminated in
consolidation. The December 31, 1993 consolidated balance sheet amounts
are derived from the audited financial statements but do not include all
disclosures required by generally accepted accounting principles.
INVESTMENTS--The Company adopted Statement of Financial Accounting Standards
(SFAS) 115 "Accounting for Certain Investments in Debt and Equity Securities"
effective January 1, 1994. With the adoption of SFAS 115, fixed
maturities have been classified as available for sale and are stated at fair
values at June 30, 1994, while fixed maturities were primarily carried at
amortized costs at December 31, 1993. Equity securities are carried at
fair values at June 30, 1994 and December 31, 1993.
UNREALIZED GAINS AND LOSSES--As indicated in the accompanying consolidated
statement of shareholders' equity for the six-month period ended June 30, 1994,
the Company had an unrealized loss of $164,314,296. For the three-month period
ended June 30, 1994, the Company had an unrealized loss of $14,346,766. For
the six-month period ended June 30, 1994, fixed maturity and equity securities'
investments reflected decreases in unrealized gains (net of income tax effects)
of $56,690,056 and $107,624,240, respectively. For the three-month period
ended June 30, 1994, fixed maturity and equity securities' investments
reflected a decrease and increase in unrealized gains (net of income tax
effects) of $28,253,967 and $13,907,201, respectively. For the six-month and
three-month periods ended June 30, 1993, equity securities' investments
reflected increases in unrealized gains (net of income tax effects) of
$55,401,709 and $4,733,028, respectively. Such amounts are included as
additions to and deductions from shareholders' equity. For the six-month and
three-month periods ended June 30, 1993, fixed maturity investments had
increases and decreases in unrecognized unrealized gains (net of income tax
effects) of $2,626,505 and $5,709,304, respectively.
REINSURANCE--Premiums earned are net of $61,277,857 and $42,856,274 of premium
on ceded business; and insurance losses and policyholder benefits are net of
$7,563,025 and $17,902,097 of reinsurance recoveries for the six-month periods
ended June 30, 1994 and 1993, respectively. Premiums earned are net of
$36,692,244 and $23,060,736 of premium on ceded business; and insurance losses
and policyholder benefits are net of $4,133,641 and $10,545,194 of reinsurance
recoveries for the three-month periods ended June 30, 1994 and 1993,
respectively.
NOTE II - STOCK OPTIONS
The Company has primarily qualified stock option plans under which options are
granted to employees of the Company at prices which are not less than market
price at the date of grant and which are exercisable over a five-year period,
or over a ten-year period if granted on or after
7
July 25, 1990. On June 30, 1994, outstanding options for Stock Option
Plan No. III totalled 98,984 shares with purchase prices ranging from a low of
$13.08 to a high of $26.17 and outstanding options for Stock Option Plan No. IV
totalled 736,102 shares with purchase prices ranging from a low of $24.67 to a
high of $62.25.
NOTE III INTERIM ADJUSTMENTS
The preceding summary of financial information for Cincinnati Financial
Corporation and consolidated subsidiaries is unaudited, but the Company
believes that all adjustments (consisting only of normal recurring accruals)
necessary for fair presentation have been made. The results of operations for
interim periods are not necessarily indications of results to be expected for
this year.
8
ITEM 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Premiums earned for the six months ended June 30, 1994 have increased
$40,470,547 (7%) over the six months ended June 30, 1993. Also, premiums
earned have increased $19,125,479 (7%) for the three months ended June 30, 1994
over the three months ended June 30, 1993. The premium growth is attributable
to new business and rate increases on direct business. The growth rate of our
property and casualty subsidiaries is less than last year on both a gross
written and earned premium basis for both the six-month and three-month periods
because of the continued softness of the commercial lines market. The premium
volume of our life and health subsidiary has increased 5% for the six months
ended June 30, 1994 and 3% for the three months ended June 30, 1994 compared to
the comparable periods of 1993. The premium growth in our life subsidiary is
the result of increased life insurance business which was offset by the
reduction in accident and health insurance. For the six-month and three-month
periods ended June 30, 1994, investment income, net of expenses, has increased
$9,705,640 (8%) and $4,687,706 (8%) when compared with the first six months and
second three months of 1993, respectively. This increase is the result of the
growth of the investment portfolio because of investing cash flows from
increased premiums written. The growth rate is less than last year because of
lower yields on new investments and less cash flow because of increased
catastrophe claim payments.
Realized gains on investments for the six months ended June 30, 1994 amounted
to $24,824,622 compared to $41,574,209 for the six-month period ended June 30,
1993, and $5,900,547 for the three-month period ended June 30, 1994 compared to
$22,137,391 for the three-month period ended June 30, 1993. The realized gains
are predominantly the result of the sale of equity securities and management's
decision to realize the gains and reinvest the proceeds at higher yields.
Insurance losses and policyholder benefits (net of reinsurance recoveries)
increased $37,253,254 (9%) for the first six months of 1994 over the same
period in 1993 and increased $267,560 (0%) for the second quarter when compared
to the second quarter of 1993. The losses and benefits of the property and
casualty companies have increased $38,294,057 for the six-month period and
decreased $908,115 for the second quarter of 1994 compared to the comparable
periods of 1993. The losses for the first six months have increased because of
the growth of new business and a higher incidence of claims. Losses decreased
in the second quarter because of the lower incidence and severity of weather
related losses. Catastrophe losses were $18.2 million and $21.3 million,
respectively, for the first six months of 1994 and 1993 and were $(.6) million
and $10.1 million, respectively, for the second quarter of 1994 and 1993. These
losses were substantially higher in the first quarter of 1994 compared to the
first quarter of 1993 because of a higher incidence and severity of these
weather related claims. The losses for the second quarter of 1994 compared to
the same quarter of 1993 were lower because of a lower incidence and severity
of claims and favorable claim development on first quarter catastrophe claims.
Policyholder benefits of the life insurance subsidiary decreased $1,040,803 for
the first six months of 1994 over the same period in 1993 and increased
$1,175,675 for the second quarter when compared to the second quarter of 1993.
The majority of the six-month decrease was due to a lower incidence of accident
and health claims while the second quarter increase was the result of a higher
incidence of death claims and related life benefits.
9
Taxes, licenses and fees increased $3,700,624 for the first six months
of 1994 over the same period in 1993 and increased $3,793,046 for the second
quarter when compared to the second quarter of 1993. The increase in taxes is
the result of higher state franchise taxes, state corporate income taxes, city
taxes on premium collections, and guaranty fund assessments for Hurricane
Andrew.
Provision for income taxes, current and deferred, have decreased by $6,357,206
for the first six months of 1994 compared to the first six months of 1993 and
have decreased $1,312,762 for the second quarter of 1994 compared to the second
quarter of 1993. The decrease in taxes for the first six months is
attributable to lower taxable income in our property and casualty companies
because of a higher incidence and severity of losses and lower capital gains
for the corporation. These decreases more than offset increases in taxable
income in the life insurance company, noninsurance companies, and taxable
investment income. The decrease in taxes for the second quarter of 1994
compared to 1993 is the result of lower capital gains for the corporation that
more than offset increases in taxable income in our property and casualty
companies, noninsurance companies, and taxable investment income. The Company
did not incur an alternative minimum tax in the first six months nor second
quarter of 1994 or 1993.
Notes payable increased $30,750,860 for the first six months and increased
$20,238,406 for the second quarter of 1994. The Company borrowed the
additional funds to pay for the increased losses in the property and casualty
companies instead of paying the losses from cash flow because the Company
decided to take advantage of the investment opportunities that were available
at that time.
Unrealized appreciation will fluctuate with changes in the overall fixed
maturities and equity securities market. Unrealized appreciation related to
the Company's equity investment portfolio decreased in the first six months of
1994 by $165,575,724 ($107,624,240 decrease in shareholders' equity, net of
deferred income taxes) while, for the first six months of 1993, it increased by
$83,941,984 ($55,401,709 increase in shareholders' equity, net of deferred
income taxes). Unrealized appreciation related to the Company's equity
investment portfolio increased in the second three months of 1994 by
$21,395,694 ($13,907,200 increase of shareholders' equity, net of deferred
income taxes) while the second three months of 1993, it increased by $7,171,255
($4,733,028 increase in shareholders' equity, net of deferred taxes). The
Company's equity investment portfolio continues to be primarily investments in
common stocks of public utility companies and financial institutions.
10
PART II
OTHER INFORMATION
ITEM 1. Legal Proceedings
-----------------
The Company is involved in no material litigation other than routine litigation
incident to the nature of the insurance industry.
ITEM 2. Changes in Securities
---------------------
There have been no material changes in securities during the second
quarter.
ITEM 3. Defaults Upon Senior Securities
-------------------------------
The Company has not defaulted on any interest or principal payment, and no
arrearage in the payment of dividends has occurred.
ITEM 4. Submission of Matters to a Vote of Security Holders
---------------------------------------------------
No special matters were voted upon by security holders during the
second quarter.
ITEM 5. Other Information
-----------------
No matters to report.
ITEM 6. Exhibits and Reports on Form 8-K
--------------------------------
(a) Exhibit included:
Exhibit 11--Statement re Computation of Per Share Earnings.
(b) The Company was not required to file any reports on Form
8-K during the quarter ended June 30, 1994.
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.
CINCINNATI FINANCIAL CORPORATION
--------------------------------
(Registrant)
Date August 11, 1994
---------------------------------------
By /s/ Robert J. Driehaus
--------------------------------------------
Robert J. Driehaus
Financial Vice President & Treasurer
(Principal Financial Officer)
1
EXHIBIT 11
CINCINNATI FINANCIAL CORPORATION
STATEMENT RE COMPUTATION OF PER SHARE EARNINGS
(in thousands except for per share amounts)
Six Months Ended Three Months Ended
June 30, June 30
---------------------- -----------------------
1994 1993 1994 1993
-------- -------- -------- --------
Weighted average shares outstanding 50,334 50,056 50,350 50,102
Equivalent shares assumed to be
outstanding for:
Stock options 264 358 252 347
Convertible debentures 1,626 1,626 1,626 1,626
-------- -------- -------- --------
Number of shares for primary
computation 52,224 52,040 52,228 52,075
Other dilutive equivalent shares--stock options 0 0 0 2
-------- -------- -------- --------
Number of shares assuming full
dilution 52,224 52,040 52,228 52,077
======== ======== ======== ========
Net income before cumulative effect
of change in accounting for income taxes $107,582 $119,336 $59,083 $62,098
Interest on convertible debentures--
net of tax 1,430 1,452 715 736
-------- -------- -------- --------
109,012 120,788 59,798 62,834
Cumulative effect of change in
accounting for income taxes -0- 13,845 -0- -0-
-------- -------- -------- --------
Net income for per share computation $109,012 $134,633 $ 59,798 $ 62,834
======== ======== ======== ========
Earnings per share:
Primary before cumulative effect of
change in accounting for income
taxes $ 2.09 $ 2.33 $ 1.15 $ 1.21
Cumulative effect of change in
accounting for income taxes -0- .26 -0- -0-
-------- -------- -------- --------
Total Primary $ 2.09 $ 2.59 $ 1.15 $ 1.21
======== ======== ======== ========
Fully Diluted $ 2.09 $ 2.59 $ 1.15 $ 1.21
======== ======== ======== ========
