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USLICO REPORTS 1992 RESULTS

 ARLINGTON, Va., March 1 /PRNewswire/ -- USLICO Corporation (NYSE: USC) today reported a net loss for the fourth quarter of 1992 of $57.5 million, or $5.35 per share, compared to a net loss of $3.8 million, or 35 cents per share, for the 1991 quarter. For the full year, the company reported a net loss of $56 million, or $5.21 per share, for 1992, compared to net earnings of $11.2 million, or $1.04 per share, for 1991.
 The losses for the fourth quarter and full year 1992 were caused primarily by the previously announced one-time, mostly non-cash charges (other than normal recurring adjustments) aggregating $55.9 million, or $5.20 per share (net of tax), for the fourth quarter, and $65.7 million, or $6.11 per share (net of tax), for the full year. These special charges are summarized in the following table (in millions):
 Fourth Quarter Full Year
 1. Adoption of new GAAP
 accounting standard
 for deferred income taxes $ - $ 9.5
 2. Write-off of investment
 in discontinued property-
 casualty reinsurance
 subsidiary 10.0 10.0
 3. Write-off of goodwill 19.4 19.4
 4. Write-off of deferred
 acquisition costs 19.9 19.9
 5. Other charges 6.6 6.9
 Total (net of tax) $55.9 $65.7
 Daniel J. Callahan, III, chairman, said: "These special charges, excluding the effect of new accounting standards,resulted from a thorough review of the company's strategy and operations during the fourth quarter of 1992. Our review focused on markets, products, cost structure and profitability in order to position the company for future profitable growth."
 SPECIAL CHARGES. The company provided the following information regarding the special charges listed above:
 1. Retroactive to Jan. 1, 1992, the company adopted Financial Accounting Standards Board Statement 109, which established a new method of accounting for
deferred income taxes. The cumulative charge against first quarter 1992 earnings amounted to $9.5 million. Earnings for the second and third quarters as previously reported are unchanged by the new accounting standard.
 2. The company wrote off its remaining investment in a discontinued property-casualty reinsurance subsidiary, which amounted to $15.1 million ($10 million net of tax). Continuing deterioration in the subsidiary's reserve run-off as a result of environmental and asbestosis claims, and other impairments, has caused management to conclude it is probable that the company will not recover its investment in the subsidiary after all claims have been paid.
 3. Two life insurance subsidiaries were merged into USLICO's flagship company, United Services Life, in the fourth quarter of 1992. As a result, the remaining goodwill associated with these companies, in the amount of $19.4 million, was determined to have no continuing value and was written off.
 4. The company wrote off deferred acquisition costs, resulting in a charge of $19.9 million (net of tax). An increased number of separate product lines were used for recoverability testing, and certain actuarial assumptions regarding future experience were modified. These changes resulted in amortization adjustments and non-recoverable deferred costs for certain product lines that are recognized for reporting purposes by a reduction in deferred acquisition costs.
 5. Certain reserve increases and other items, totalling $6.6 million (net of tax) for the fourth quarter, consisted of additional reserves for participating policies ($3.3 million) and higher guaranty fund assessments ($2.5 million), and $0.8 million due to changes in the useful lives estimated for amortization of computer software. Additionally, for the full year 1992, the company adopted Financial Accounting Standards Board Statement 106 (Accounting for Postretirement Benefits other than Pensions) retroactive to Jan. 1, 1992, which resulted in a charge of $0.3 million (net of tax).
 FINANCIAL RESULTS are summarized in the following table by major components for the current year compared to 1991 (in millions):
 Fourth Quarter Full Year
 1992 1991 1992 1991
 Life insurance operations $ 6.9 $ 7.6 $23.2 $ 33.5
 Realized investment gains
 (losses)(A) (4.1) (0.5) 1.4 1.4
 Interest (2.0) (2.0) (8.1) (8.1)
 Federal income tax (0.5) (2.0) (4.8) (8.7)
 0.3 3.1 11.7 18.1
 Special items (net of tax):
 Group health business (2.0) (6.9) (2.0) (21.4)
 Write off Liberian
 investment 0 0 0 (7.2)
 Discontinued
 operations (10.0) 0 (10.0) 21.7
 Special charges
 excl. discontinued
 operations (45.9) 0 (55.7) 0
 Net Income (Loss) $(57.6) $(3.8) $(56.0) $ 11.2
 (A) The deferred acquisition cost amortization netted in the realized investment gains (losses) amount above and the portion of federal income tax applicable to the net amount are as follows (in millions):
 Fourth Quarter Full Year
 1992 1991 1992 1991
 Realized investment
 gains (losses) $(3.3) $ 0.6 $ 5.4 $ 2.4
 Amortization of deferred
 acquisition costs (0.8) (1.1) (4.0) (1.0)
 Net (4.1) (0.5) 1.4 1.4
 Federal income tax 1.4 0.2 (0.5) (0.5)
 Net realized
 investment
 gains (losses) $(2.7) $(0.3) $ 0.9 $ 0.9
 Fourth quarter 1992 realized investment losses resulted primarily from the establishment of a general provision for possible future mortgage loan losses in the amount of $4.0 million.
 SALES of life insurance and annuity products for the quarter and full year were as shown in the following table:
 Annualized Premium Sales
 (In thousands)
 Fourth Quarter Full Year
 1992 1991 1992 1991
 Individual Life $ 4,307 $ 4,334 $ 16,172 $ 20,029
 Payroll Deduction 2,722 2,704 8,998 10,096
 Group Life 457 1,538 1,783 13,266
 Annuities 46,180 42,281 185,623 242,943
 Total $53,666 $50,857 $212,576 $286,334
 The company reported that sales for the fourth quarter surpassed the comparable quarter of 1991 for the first time in 1992 as production picked up toward year-end. As previously noted, we anticipated the improved momentum in individual sales to correlate with the improving service levels in Arlington's Eastern Service Center. Payroll deduction and annuity sales also tracked generally with expectations with a late surge in the annuity line being responsible for the overall increase in comparable fourth quarter results.
 ASSET QUALITY. USLICO also reported that the high quality of its investment portfolio continues to be among its greatest strengths. At Dec. 31, 1992, 97.5 percent of all bonds held were investment grade quality while the high yield component was 2.5 percent. All bonds were current as to interest and principal. The company also reported that its consolidated 60-day delinquency rate on commercial mortgage loans was 1.3 percent at year-end compared to the most recently published industry average of 7.1 percent.
 USLICO CORPORATION
 SUPPLEMENTAL FINANCIAL INFORMATION
 (In millions, except per share data)
 Fourth Quarter Full Year
 1992 1991 1992 1991
 Revenue $ 89.2 $ 96.1 $378.8 $393.3
 Net Income (Loss) from
 Continuing Operations (47.5) (3.8) (36.2) (10.5)
 Net Income (Loss) (57.5) (3.8) (56.0) 11.2
 EARNINGS PER SHARE:
 Fourth Quarter Full Year
 1992 1991 1992 1991
 Primary and Fully Diluted
 Operating Income (Loss) $(4.42) $(0.35) $(3.37) $(0.98)
 Discontinued Operations (0.93) - (0.93) 2.02
 Cumulative Effect of
 Accounting Changes - - (0.91) -
 Net Income (Loss) $(5.35) $(0.35) $(5.21) $ 1.04
 WEIGHTED AVERAGE SHARES OUTSTANDING:
 1992 10.75 million
 1991 10.78 million
 An insurance holding company, USLICO Corporation is headquartered in Arlington. Its life insurance subsidiaries focus on selected market niches, including U.S. military personnel, individual life, annuity and salary deduction sales, and have more than $52 billion of life insurance in force with assets of $3 billion.
 -0- 3/1/93
 /CONTACT: Glenn H. Gettier Jr., executive vice president and chief financial officer, USLICO, 703-875-3417/
 (USC)


CO: USLICO Corporation ST: Virginia IN: INS SU: ERN

DC-TW -- DC002 -- 1453 03/01/93 13:22 EST
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Date:Mar 1, 1993
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