Winn-Dixie Stores, Inc. and Subsidiaries - Page 12




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               Based upon the above assumptions, Coventry projected that              
          the "pretax earnings effect" of the COLI plan for the first                 
          policy year (1993) would be a loss of $4,605,000,6 before                   
          adjusting for the related reduction in income taxes.  This pretax           
          loss was based on the following projected figures for the end of            
          the first policy year:  Cash surrender value (CSV) of the COLI              
          policies of $119,586,000 increased by death benefits of                     
          $2,016,000 and reduced by annual premiums of $114 million,7                 
          accrued loan interest of $11,902,000,8 and administration fees of           
          $304,000.9  Similar projections for the years 1994 through 2052             
          produced pretax losses in each year.                                        
               With respect to the estimated 1993 premiums of $114 million,           
          the projection indicated that petitioner would, in part, satisfy            
          the premiums by borrowing $107,684,000 against cash surrender               


               6See appendix A.                                                       
               7This amount is arrived at using the assumed premium per               
          employee of $3,000 times the assumed 38,000 employees for a total           
          of $114 million.                                                            
               8This amount is the interest due from petitioner as                    
          calculated by Coventry on a projected first-year policy loan                
          taken by petitioner in the amount of $107,684,000.  Annual                  
          interest of 11.06 percent on $107,684,000 is actually                       
          $11,909,850.                                                                
               9Using these figures the calculation is:  $119,586,000 +               
          $2,016,000 + ($114,000,000) + ($11,902,000)+ ($304,000) =                   
          ($4,604,000).  The $1,000 variance between this calculation and             
          the pretax loss of $4,605,000 in appendix A appears to be                   
          attributable to rounding of the components of the calculation.              





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