The following selected financial data for each of the five years ended December 31, 1994 is derived from the audited consolidated financial statements of the Company. The selected data should be read in conjunction with Management's Discussion and Analysis of Financial Condition and Results of Operations and the consolidated financial statements and accompanying notes included elsewhere herein.
The following table shows net investment income, realized gains, and the amount of the investment portfolio at the end of the year for 1994, 1993, and 1992:
As of December 31, 1994, the Company has a $87.7 million tax net operating loss carryforward and a $6.6 million capital loss carryforward. Management anticipates incurring income tax in future years only to the extent that the carryforwards cannot fully offset the alternative minimum tax, certain life insurance taxable income, or state income taxes, or until the carryforward is fully utilized or limited. The unused loss carryforwards are generally subject to limitations with respect to changes in ownership, as defined by the Internal Revenue Code.
Our audits were made for the purpose of rendering a report on the basic financial statements taken as a whole. The Schedules I, III, V, VI, VIII and X as of December 31, 1994 and for each of the three years in the period ended December 31, 1994 are presented for purposes of complying with the Securities and Exchange Commission's rules and are not part of the basic financial statements. These schedules have been subjected to the auditing procedures applied in our audit of the basic financial statements. For the reasons discussed in the third and fourth paragraphs, we are unable to express, and we do not express, an opinion on the 1994 information included in the schedules referred to above. However, in our opinion, the 1993 and 1992 information in the schedules referred to above does fairly state in all material respects the financial data required to be set forth therein in relation to the basic financial statements taken as a whole.
The Company is working closely with the regulators as it formulates its future operating plans which include restructuring of its business to minimize operating losses and restore future profitable operations, controlling the significant operating cash outflows and raising additional capital. While the Company has been successful in obtaining the necessary financing to date, there can be no assurance that the Company will be successful in consummating and executing its operating plan or in raising additional capital. If the Company is unable to achieve such an operating plan or raise additional capital, continuing operating losses could further deplete statutory capital to a level which would prompt regulatory action, including taking control of SCIC and/or its subsidiaries. Because of the reduction of the Company s capital base, the Company could be unable to operate indefinitely in the absence of raising additional capital. These matters raise substantial doubt about the ability of the Company to continue as a going concern. The ability of the Company to continue as a going concern is dependent on many factors including regulatory action and third-party reactions to the minimal statutory capital and continuing operations. The consolidated financial statements have been prepared based on the Company continuing as a going concern, generally reflecting the historical cost basis of accounting. Accordingly, the consolidated financial statements do not include any adjustments that might result from the Company not continuing as a going concern, regulatory actions or third-party reactions to the minimal statutory capital and surplus levels and continuing operating losses.
Property and equipment are stated at cost and, for financial reporting purposes, depreciated on a straight-line basis over the estimated useful lives of the assets. For income tax purposes, accelerated depreciation methods are used for certain equipment. Property and equipment are as follows: