Standard&Poor's Ratings Services affirmed its single-'A'-plus counterparty credit and financial strength ratings on Highmark Inc. (Highmark) on Oct. 18, 2002. The outlook is negative. The rating reflects Highmark's extremely strong capitalization, strong business profile, and strong earnings. Offsetting these positive factors are Highmark's prospectively challenged business position and earnings profile. Highmark's capital adequacy and liquidity are expected to remain extremely strong. As a result of $125 million in one-time costs related to the UPMC Health System provider agreement; competitive pressures in Western and Central Pennsylvania; losses on the TRICARE Dental Plan for military families administered by Highmark's subsidiaries, the United Concordia group of companies; and startup costs in Central Pennsylvania; pretax earnings are expected to be negative $70
