October 30, 2009

U.S. Central (USC) has released its unaudited financial statements for the third quarter of 2009. These results reflect a $308.5 million net loss for the third quarter for USC, largely as a result of additional other-than-temporary impairments (OTTI) on its investment portfolio. This will result in additional depletion of USC’s member capital. Members United’s portion of this loss is $51.7 million.

For Members United, this means:

• Members United’s capital at USC will be depleted by $51.7 million. 
• The transaction will be recorded today (October 30, 2009) and will result in a negative retained earnings balance for Members United for the month of October 2009. 
• In addition, Members United expects additional OTTI on its own investment portfolio based on information provided by Clayton. It should be noted that USC’s OTTI losses are based on a Clayton analysis dated August 31, 2009. Members United will be basing its OTTI on a Clayton analysis dated September 30, 2009, which is under final review and evaluation.  Losses associated with the Clayton study will also be recorded as of October when complete.
• After recording additional losses on U.S. Central capital and recording additional OTTI on marketable securities, Members United will have a negative retained earnings balance at the end of October. Members United is then required to deplete members’ capital shares on a dollar for dollar basis to eliminate this retained deficit.   
• While the exact amount will not be known until the financial statements are completed for the month of October, the retained deficit will not exceed remaining capital.
• This depletion transaction will not occur until November. We plan to provide members with advanced notice, including hosting a webinar to provide additional information and answer member questions.

To view USC’s third quarter 2009 unaudited financial statements, click here.

 Todd M. Adams
Chief Financial Officer