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 NEW YORK, Aug. 11 /PRNewswire/ -- The Equitable Companies Incorporated (NYSE: EQ) continued to achieve significantly improved operating results, with net income for the second quarter and six months ended June 30, 1993 showing a sharp upturn from the prior year, Richard H. Jenrette, chairman and chief executive officer, announced today.
 For the quarter, pre-tax profits grew to $72.0 million, a $103.1 million improvement over the pre-tax loss of $31.1 million reported for the second period of 1992. After-tax net income for the 1993 quarter totaled $47.5 million, compared with a net after-tax loss of $44.7 million for the similar period last year, which included a $25.9 million extraordinary charge for demutualization expenses.
 Operating earnings -- which exclude $23.1 million of after-tax restructuring charges principally related to the recent combination of Equitable Capital Management with Alliance Capital Management L.P., and after-tax investment gains of $5.3 million -- totaled $65.3 million, or $.31 per share on a fully-diluted basis, for the 1993 quarter. This compares with an operating loss of $8.8 million for the 1992 second quarter, which excludes $11.3 million of after-tax investment losses. There is no comparable earnings per share amount for last year's second quarter since The Equitable was not a public company at that time.
 Operating earnings include an after-tax loss of $19.5 million for this year's quarter, versus a $10.4 million after-tax loss for the 1992 period, from The Equitable's Disability Income business. On July 13, The Equitable signed an agreement with the Paul Revere Life Insurance Company whereby that company will provide and service a line of Disability Income products for distribution by The Equitable's agency force. Paul Revere hired substantially all Equitable employees who performed claims management, underwriting and related functions for its Disability Income business.
 "Overall, The Equitable continued to make excellent progress during the second quarter, as earnings from our insurance operations began to benefit from several management initiatives and as the investment businesses continued to turn in strong performances, " said Mr. Jenrette. "This momentum, coupled with our new capital strength, has confirmed The Equitable's position as a global leader in the rapidly expanding retirement and savings market. Total assets under management at the Company and its investment subsidiaries rose to $161 billion -- up $16 billion from the prior year's second quarter - maintaining our rank as one of the world's premier asset managers.
 "The Equitable is on target to achieve its financial goals," Mr. Jenrette continued, "and management remains committed to implementing new initiatives in 1993 designed to enhance future earnings."
 For the six months, The Equitable's pre-tax profits totaled $120.3 million, compared with a pre-tax loss of $21.7 million reported for the similar period of 1992. After-tax net income totaled $79.3 million for the 1993 period, against a net after-tax loss of $63.3 million for the first six months last year, which included an extraordinary charge of $45.7 million for demutualization expenses and a $4.9 million credit for accounting changes.
 Operating earnings for the six months -- which exclude $27.0 million of after-tax restructuring charges and after-tax investment gains of $12.6 million -- rose to $93.7 million or $.45 per share on a fully- diluted basis. This compares with operating earnings of $13.7 million, which exclude $35.6 million of after-tax investment losses.
 Insurance Segments
 "Equitable's insurance operations returned to profitability during the second quarter, contributing after-tax earnings of $18.7 million to the Company's overall results, compared with an after-tax loss of $44.9 million for the similar period last year," said Equitable President Joseph J. Melone, who serves as chief executive officer of The Equitable Life Assurance Society. "Aggressive programs to reduce expenses, widen product spreads and improve mortality experience were the key factors in our improved performance. The positive impact of these programs should continue in future periods, as we move forward in maximizing the profitability of our life insurance and annuity franchise."
 Mr. Melone said that total premiums and deposits from individual life insurance and annuities in the 1993 second quarter amounted to $1.19 billion, approximately level with the $1.21 billion in individual premiums and deposits for the 1992 second period. "Strong renewal business helped to compensate for a 9.8 percent decline in new individual sales from the year ago period," said Mr. Melone. "Although new sales remained below the comparable 1992 level, we did achieve an improvement in new individual business over this year's first quarter. As the result of a major new initiative, we expect this momentum to build during the second half of the year and are optimistic that full year's sales results in 1993 will outpace those of 1992."
 Mr. Melone also indicated that surrenders and withdrawals at the company continued to show a steep decline, falling 15.7 percent from last year's second quarter.
 Investment Services
 The Equitable's investment businesses had combined after-tax earnings -- before $21.1 million in charges connected with the Alliance/Equitable Capital combination -- of $55.9 million for the 1993 second quarter, compared with combined after-tax earnings of $48.9 million for the similar period of 1992. "The continued strong performance of The Equitable's investment businesses was once again led by Donaldson, Lufkin & Jenrette, which produced record earnings for the quarter," said Mr. Jenrette. "Excluding the restructuring charges, Alliance also turned in a strong quarter and Equitable Real Estate made a significant contribution to the segment's overall earnings.
 "Looking at the remainder of the year, " said Mr. Jenrette, "we expect the investment businesses to continue to produce outstanding results. Earnings from this segment during the second half of 1993 should benefit from the absence of non-recurring merger expenses, significant cost savings generated by the Equitable Capital/Alliance combination, as well as from anticipated strong asset growth at Alliance." Mr. Jenrette said that Equitable management remains committed to unlocking additional hidden values on Equitable's balance sheet, as demonstrated by the joining of these two companies.
 Insurance Investment Portfolio
 The investment income yield on Equitable's General Account Investment Asset portfolio for the second quarter and six months was 7.64 percent and 7.68 percent, respectively. This compares with 7.50 percent and 7.46 percent for the similar periods of 1992. The improved results for 1993 -- which were accomplished despite the overall market decline in fixed maturity yields -- reflect improved real estate yields and a reduction in short-term holdings. For the first six months of 1993, the income yield on equity real estate showed an improvement of 156 basis points over the yield for the comparable period last year.
 At the end of the second quarter, problem commercial mortgages had fallen to 6.0 percent of the commercial portfolio, compared with 6.5 percent at year-end 1992 and 7.5 percent at the end of the second period of 1992. Asset Valuation Allowances at the close of the second quarter represented 65.8 percent of problem mortgages, compared with 63.8 percent at the end of last year. At the end of the first six months of 1993, the weighted cash payment rate received by The Equitable on restructured commercial mortgages was 8.2 percent, and unrealized capital gains in the fixed maturity portfolio totaled $956 million.
 The Equitable Companies Incorporated is one of the world's premier investment managers through products distributed by its primary businesses: The Equitable Life Assurance Society of the U.S.; Alliance Capital Management L.P.; Donaldson, Lufkin & Jenrette; and Equitable Real Estate Investment Management, Inc. The Equitable and AXA, its largest shareholder and global partner, are among the world's leading providers of insurance and financial services.
 Condensed Consolidated Statements of Earnings
 (unaudited -- in $ millions, except per share amounts)
 Periods ended Three Months Six Months
 June 30, 1993 1992 1993 1992
 Total revenues $ 1,545.0 $ 1,647.8 $ 3,049.2 $ 3,429.5
 Total benefits &
 other deductions $ 1,473.0 $ 1,678.9 $ 2,928.9 $ 3,451.2
 Erns. (Loss) from
 operations bef.
 Fed. inc. taxes 72.0 (31.1) 120.3 (21.7)
 Federal inc. tax exp.
 (benefit) 24.5 (12.3) 41.0 .8
 Earnings (Loss) from
 operations 47.5 (18.8) 79.3 (22.5)
 Extraord. charge for
 demutualization expe. --- (25.9) --- (45.7)
 Cumulative effect of
 accounting changes,
 net --- --- --- 4.9
 Net Earnings (Loss) $ 47.5 $ (44.7) $ 79.3 $ (63.3)
 Divs. on pfd. stocks 17.4 --- 25.4 ---
 Net Earnings, applicable
 to Common Shares $ 30.1 --- $ 53.9 ---
 Net Erns. Per Common Share:(A)
 Primary $ .21 --- $ .38 ---
 Fully-Diluted .20 --- .37 ---
 Wtd. Avg. No. of Common
 Shares Outstanding:
 Primary 142.4 --- 142.4 ---
 Fully-Diluted 167.2 --- 167.2 ---
 Cash Divs. Per
 Common Share $ .05 --- $ .10 ---
 (A) Since The Equitable was a mutual Company during the first half of 1992, there are no comparable earnings per share amounts for the second quarter and six months.
 -0- 8/11/93
 /CONTACT: Terrance Little (media), 212-554-8929, or Greg Wilcox (investors), 212-554-2595, both of The Equitable/

CO: The Equitable Companies Incorporated ST: New York IN: INS SU: ERN

SH -- NY017 -- 1530 08/11/93 09:11 EDT
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Publication:PR Newswire
Date:Aug 11, 1993

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