Winn-Dixie Stores, Inc. and Subsidiaries - Page 50




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          after 15 years was projected to be $498,000, whereas cumulative             
          positive cash-flow was projected to be $289,263,000.  See                   
          appendix B, Cash Flow.  Without the tax savings from tax                    
          deductions for policy loan interest and fees, there would have              
          been a substantial negative cash-flow in each year, and the costs           
          of maintaining the COLI plan would have greatly exceeded                    
          benefits.                                                                   
               We recognize that one of the normal benefits of life                   
          insurance is the death benefit to be received if the insured dies           
          before the insured's actuarially determined life expectancy.                
          Thus, the predictable cost of maintaining life insurance might be           
          greater than predictable death benefits and still be justified by           
          the financial protection that insurance provides against the                
          financial consequences of the unexpected death of the insured.              
          But as we discuss later, petitioner had no such reason or purpose           
          for engaging in the 1993 COLI program.  Petitioner suggests that            
          the policies could conceivably produce tax-independent benefits             
          if some catastrophe were to occur that would produce large,                 
          unexpected death benefits.  We are convinced that this was so               
          improbable as to be unrealistic and therefore had no economic               
          significance.  Indeed, petitioner makes no pretense that it                 
          purchased these policies in anticipation of, or to protect itself           
          against, a catastrophic event.  The policies were on the lives of           
          36,000 individual employees of various ages who lived in diverse            





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