Eberl's Claim Service, Inc. - Page 12




                                        -12-                                          
                                        Net profits                                   
               Fiscal                   as % of                                       
               year       Total income   total income       Equity                    
               1988      $72,943        (4.95%)             $500                      
               1989      942,552        0.00                500                       
               1990      558,178        6.49                500                       
               1991      517,332        0.55                500                       
               1992      4,862,456      0.46                500                       
               1993      2,658,025      1.58                500                       
               Petitioner's annual and cumulative retained earnings were as           
          follows:                                                                    
                    Fiscal Year           Annual       Cumulative                     
                    1988                ($4,655)       ($4,655)                       
                    1989                (5,750)        (10,405)                       
                    1990                (41,276)       (51,681)                       
                    1991                4,650          (47,031)                       
                    1992                16,748         (30,283)                       
                    1993                37,098         6,815                          
               7.   General Economic Conditions                                       
               There was more work for catastrophic claims adjusters during           
          the years in issue than in prior years because of the large                 
          number of catastrophes in 1992 and 1994.  U.S. insured                      
          catastrophic losses (approximate) from 1971 to 1995 were:                   
                                                                                     
                     Calendar year           Amount (billions of $)                   
                         1971                          <1                             
                         1972                          <1                             
                         1973                          1                              
                         1974                          2                              
                         1975                     1.5                                 
                         1976                          <1                             
                         1977                          <1                             
                         1978                     1.5                                 
                         1979                          3                              
                         1980                          2                              
                         1981                          1                              
                         1982                          2                              





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