Conseco Reports First Quarter Results.CARMEL Car·mel also Car·mel-by-the-Sea A city of western California on Carmel Bay at the southern end of the Monterey Peninsula. It is an artists' and writers' colony and a popular tourist spot. Population: 4,130. , Ind IND Investigational new drug Therapeutics A status assigned by the FDA to a drug before allowing its use in humans, exempting it from premarketing approval requirements so that experimental clinical trials may be conducted. See Phase 1.2, 3 studies, Sponsorship. . -- Conseco Conseco (NYSE: CNO), originally Security Life of Indiana, is a financial services organization based in Carmel, Indiana. Conseco's insurance subsidiaries provide life insurance, annuity and supplemental health insurance products to more than 4 million customers in the , Inc. (NYSE NYSE See: New York Stock Exchange :CNO CNO abbr. chief of naval operations ): --Net Income applicable to common stock: $72.3 million, up 45% over 1Q04 --Net Operating Income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. (1): $70.3 million, up 89% over 1Q04 --Sixth consecutive quarter of strong earnings --Bankers Life achieves record quarterly sales --Conseco Insurance Group launches five new products, converts four additional systems Conseco, Inc. (NYSE:CNO) today reported results for the first quarter of 2005 - the company's sixth consecutive quarter of strong earnings. Net Income applicable to common stock was $72.3 million, a 45% increase versus $49.9 million in 1Q04. Net Operating Income was $70.3 million, an 89% increase versus $37.1 million in 1Q04. Net Income per share was 44 cents versus 50 cents in 1Q04. Net Operating Income per share was 43 cents versus 37 cents in 1Q04. All per-share results are on a diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. basis. A comparison of results to the prior-year period is affected by the $1.6 billion equity offering and $800 million debt refinancing Refinancing An extension and/or increase in amount of existing debt. completed in mid- mid- pref. Middle: midbrain. 2004, which increased weighted average diluted shares outstanding by approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 86 million shares, or 86%, compared to the year-earlier quarter. Earnings before corporate interest, net realized investment gains and taxes ("EBIT EBIT See: Earnings Before Interest and Taxes EBIT See earnings before interest and taxes (EBIT). ") (2) are not affected by the 2004 equity offering and debt refinancing, and were $136.1 million in 1Q05, a 13% increase versus $120.5 million in 1Q04. President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. William William, crown prince of Germany William or Frederick William, 1882–1951, crown prince of Germany, son of William II. In World War I he commanded (1914) an army on the Western Front and was nominal commander in the German attack Kirsch kirsch n. A colorless brandy made from the fermented juice of cherries. [French, short for German Kirschwasser; see kirschwasser. said, "Conseco is a vastly improved business organization compared to just 12 months ago. At March 31, 2005, our balance sheet reflected $3.8 billion of shareholders' equity Shareholders' Equity A firms' total assets minus its total liabilities. Equivalently, it is share capital plus retained earnings minus treasury shares. Shareholders' equity is the amount by which a company is financed through common and preferred shares. , no goodwill and a 17% debt-to-total capital ratio. We have a high-quality investment portfolio, with 96% of our $22.0 billion of fixed maturity investments rated investment grade. The 89% increase in Net Operating Income was driven by our significant transformational achievements during the last 12 months which fundamentally improved our balance sheet, operations, product offerings, distribution systems, internal controls and management team."
----------------------------------------------------------------------
(1) Management believes that an analysis of Net Income applicable to
common stock before net realized investment gains or losses ("Net
Operating Income," a non-GAAP financial measure) is important to
evaluate the financial performance of the company, and is a key
measure commonly used in the life insurance industry. Management
uses this measure to evaluate performance because realized
investment gains or losses can be affected by events that are
unrelated to the company's underlying fundamentals. A
reconciliation of Net Operating Income to Net Income applicable to
common stock is provided in the table on page 3.
(2) Management believes that an analysis of earnings before corporate
interest, net investment gains and taxes ("EBIT", a non-GAAP
financial measure) is a clearer measure of the productivity
improvements of the company quarter-over-quarter because it
excludes: (i) the effects of the 2004 equity offering and debt
refinancing; and (ii) net realized investment gains that are
unrelated to the company's underlying fundamentals. A
reconciliation of EBIT to Net Income applicable to common stock is
provided in the table on page 3.
Consistent execution on our key initiatives is driving enhanced
productivity across our businesses. A summary of our progress in each
of our key initiatives follows.
1. Sales and revenue growth. We continue to achieve measured
sales growth by building distribution in products where we can
compete profitably today, and which will serve as the
foundation for a family of products and distribution upon
which we can continue to build after we achieve further
ratings upgrades. Key contributors to Bankers Life's strong
sales performance were the 21 branches added to captive
distribution during 2004. Conseco Insurance Group ("CIG") has
continued to rebuild its independent distribution platform by
developing new IMO relationships, recruiting new agents and
launching five new products so far in 2005.
2. Operational excellence. We are making substantial progress
implementing a best-in-class operating platform designed to
provide excellent customer service in a scalable, low-cost
environment. We have re-engineered business processes for
claims, underwriting, policyholder services and agent care,
resulting in greater productivity. We have improved our
processing procedures to more effectively adjudicate claims in
accordance with the contractual requirements of our policies.
3. Technological excellence. We are consolidating and simplifying
our data processing and management systems in order to provide
better and more cost effective service to our policyholders
and distribution partners. We have created our "One IT"
organization to provide shared services across the
organization. As part of "One IT," the IT leadership team is
implementing uniform, best-in-class practices to enhance
capacity and increase flexibility. Since April 2003, we have
eliminated 14 older CIG policy administration systems.
4. Expense reductions and in-force management. In order to
provide valuable products to our customers and maximize
shareholder value over the long term, we must become a
low-cost operator. Our commitment to meet that goal is driving
us to aggressively eliminate non-strategic costs and
organizational redundancies, streamline back-office operations
and improve claims adjudication processes. All operating
segments achieved or exceeded their expense savings goals for
the first quarter. Based on our progress, we remain confident
that we will achieve or exceed our previously reported expense
reduction goal of $30 million for 2005.
5. Best practices in governance and compliance. We continue to
enhance internal controls across our business activities and
are making steady progress toward best practices across all
our business units. Our work to achieve compliance with
Section 404 of Sarbanes-Oxley has resulted in improvements in
the effectiveness of our internal controls and created a
framework to build best practices in compliance and controls
throughout our organization.
6. A unified performance culture. As we upgrade talent throughout
the organization, we are aligning all individual goals with
our business priorities and linking rewards to individual and
business segment performance. Since the beginning of the year,
we have implemented a 2005 pay-for-performance bonus plan tied
to the execution of key initiatives, we have cemented
alignment among the enterprise-wide management group, and we
have implemented a rigorous talent review process that will
become a permanent part of our culture and drive enhanced
productivity across all parts of the company.
"Since we completed our $2.4 billion recapitalization Recapitalization Restructuring a company's debt and equity mixture often with the aim of making a company's capital structure more stable. Notes: Companies often want to diversify their debt-to-equity ratio to improve liquidity. in the second quarter of 2004," Kirsch said, "we have deployed our capital and other resources to fundamentally improve the quality and productivity of our business enterprise. Our strong balance sheet, including our substantial net operating loss carryforwards Net operating loss carryforwards Application of losses to offset earnings in future years. , provides us a competitive advantage in the marketplace. We are delivering measured increases in sales through new product offerings and strategic growth in captive captive said of naturally wild or feral animals kept in captivity for educational and scientific investigation with no attempt being made to domesticate them. and independent distribution. We have re-engineered operations and simplified sim·pli·fy tr.v. sim·pli·fied, sim·pli·fy·ing, sim·pli·fies To make simple or simpler, as: a. To reduce in complexity or extent. b. To reduce to fundamental parts. c. systems to a degree never before achieved at Conseco. This has delivered meaningful improvements in customer service and facilitated cost reductions. We continue to identify opportunities to improve operations and customer service and reduce non-strategic costs as we institutionalize in·sti·tu·tion·a·lize v. To place a person in the care of an institution, especially one providing care for the disabled or mentally ill. in operational excellence and the discipline of rigorous expense management. And most importantly Adv. 1. most importantly - above and beyond all other consideration; "above all, you must be independent" above all, most especially , the 15 strategically targeted additions to our leadership team have gelled effectively with our veteran leaders to create a unified high-performance Adj. 1. high-performance - modified to give superior performance; "a high-performance car" superior - of high or superior quality or performance; "superior wisdom derived from experience"; "superior math students" culture aligned to accelerate our momentum on each of our key initiatives. We are benefiting from our improved platform, which together with continuing progress on our key initiatives, position Conseco to build on our momentum to drive increases in sales and earnings." 2005 outlook Based on Conseco's first quarter results, we remain confident that our earnings for 2005 will equal or exceed $1.68 of net income per share, based on our diluted shares outstanding at March 31, 2005. This outlook is based on numerous assumptions and factors. If they prove incorrect Incorrect means to not be correct and may also refer to:
A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. below).
Operating results
Results by segment were as follows ($ in millions):
Three Months Three Months
Ended Ended
March 31, 2005 March 31, 2004
-------------- --------------
EBIT:
Bankers Life $58.8 $56.4
Conseco Insurance Group ("CIG") 64.4 60.5
Other Business in Run-off 21.5 14.9
Corporate Operations, excluding
corporate interest expense (8.6) (11.3)
-------------- --------------
Total EBIT 136.1 120.5
Corporate interest expense (12.0) (27.8)
-------------- --------------
Income before net realized
investment gains and taxes 124.1 92.7
Tax expense 44.3 32.7
-------------- --------------
Net income before net realized
investment gains 79.8 60.0
Preferred stock dividends:
10.50% Class A convertible
exchangeable preferred stock
(retired June 11, 2004) - 22.9
5.50% Class B mandatorily convertible
preferred stock (issued May 12, 2004) 9.5 -
-------------- --------------
Net operating income 70.3 37.1
Net realized investment gains, net of
related amortization and taxes 2.0 12.8
-------------- --------------
Net income applicable to common
stock $72.3 $49.9
============== ==============
Income before net realized investment gains and income taxes for the first quarter of 2005 in our Bankers Life segment were $58.8 million, an increase of 4% compared to the first quarter of 2004. The earnings improvement reflects overall levels of growth at Bankers Life and higher net investment income, partially offset by higher benefit ratios in the segment's Medicare Medicare, national health insurance program in the United States for persons aged 65 and over and the disabled. It was established in 1965 with passage of the Social Security Amendments and is now run by the Centers for Medicare and Medicaid Services. supplement and long-term care long-term care (LTC), n the provision of medical, social, and personal care services on a recurring or continuing basis to persons with chronic physical or mental disorders. products. Income before net realized investment gains and income taxes in our Conseco Insurance Group segment totaled $64.4 million in the first quarter of 2005 compared to $60.5 million in the first quarter of 2004. CIG's earnings improvement was due to higher net investment income and improved mortality, partially offset by a higher benefit ratio on specified spec·i·fy tr.v. spec·i·fied, spec·i·fy·ing, spec·i·fies 1. To state explicitly or in detail: specified the amount needed. 2. To include in a specification. 3. disease products and lower earnings due to the declining block of Medicare supplement in the segment. CIG's net investment income in the first quarter of 2005 included prepayment Prepayment 1. The payment of a debt obligation prior to its due date. 2. The excess payment over a scheduled debt repayment amount. Notes: 1. Examples include deferred expenses such as rent and early loan repayments. 2. income on fixed maturity investments and favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. results on non-traditional invested assets totaling approximately $3 million. Income before net realized investment gains and income taxes in our Other Business in Run-off run-off n (in contest, election) → desempate m (= extra race); carrera de desempate run-off n (in contest, election) → segment were $21.5 million in the first quarter of 2005, compared to $14.9 million in the year-earlier period, reflecting higher net investment income and continued improvement in long-term care benefit ratios from rate increases and our claims adjudication The legal process of resolving a dispute. The formal giving or pronouncing of a judgment or decree in a court proceeding; also the judgment or decision given. The entry of a decree by a court in respect to the parties in a case. initiatives. Corporate Operations include "40/86 Advisors," our investment advisory subsidiary, and the expenses of our corporate operations. Corporate operations in the first quarter of 2004 included severance The act of dividing, or the state of being divided. The term severance has unique meanings in different branches of the law. Courts use the term in both civil and criminal litigation in two ways: first, when dividing a lawsuit into two or more parts, and second, when expense of $4.4 million. First Quarter Sales First quarter new annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. premium sales of supplemental health and life products in our Bankers Life segment (which includes our Colonial Penn Colonial Penn Life Insurance Company is a Philadelphia, Pennsylvania based life insurance company. Colonial Penn's marketing campaign is aimed at senior citizens between the age of 50 and 85. They claim to offer insurance at a comparatively low rate without medical reviews. direct distribution) totaled a record $53 million, up 2% compared to 1Q04. First-year adj. 1. Being in the first year of an experience especially in a U. S. high school or college; - of a person. Adj. 1. first-year - used of a person in the first year of an experience (especially in United States high school or college); "a annuity annuity: see insurance. annuity Payment made at a fixed interval. A common example is the payment received by retirees from their pension plan. There are two main classes of annuities: annuities certain and contingent annuities. deposits at Bankers Life for the quarter were $220 million, up 25% compared to 1Q04. In our CIG CIG Ceiling (height above ground level to base of clouds) CIG Conference Intergouvernementale (French: Intergovermental Conference) CIG Conservation Innovation Grants (USDA NRCS) segment, new annualized premium sales of supplemental health and life products were $11 million in the first quarter compared to $15 million in 1Q04, driven by declines in Medicare supplement sales which were partially offset by increases in specified disease sales. CIG's first-year annuity deposits were $20 million in the first quarter, an increase of $14 million compared to 1Q04. About Conseco Conseco, Inc.'s insurance companies help protect working American families American Family is a photographic artwork exhibition by Renée Cox. See also
n. pl. ad·ver·si·ties 1. A state of hardship or affliction; misfortune. 2. A calamitous event. : Medicare supplement, long-term care, cancer, heart/stroke and accident policies protect people against major unplanned expenses; annuities and life insurance products help people plan for their financial futures financial futures Obligations to buy or sell particular positions in financial instruments. The features of financial futures are identical to those of any futures contract except that the asset for delivery is of a financial nature. . For more information, visit Conseco's web site at www.conseco.com. Cautionary Statement Regarding Forward-Looking Statements. Our statements, trend analyses and other information contained in this press release relative to markets for Conseco's products and trends in Conseco's operations or financial results, as well as other statements, contain forward-looking statements within the meaning of the federal securities laws and the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. Forward-looking statements typically are identified by the use of terms such as "anticipate," "believe," "plan," "estimate," "expect," "project," "intend," "may," "will," "would," "contemplate," "possible," "attempt," "seek," "should," "could," "goal," "target," "on track," "comfortable with," "optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op " and similar words, although some forward-looking statements are expressed differently. You should consider statements that contain these words carefully because they describe our expectations, plans, strategies and goals and our beliefs concerning future business conditions, our results of operations, financial position, and our business outlook or they state other ''forward-looking'' information based on currently available information. Assumptions and other important factors that could cause our actual results to differ materially from those anticipated in our forward-looking statements include, among other things: (i) our ability to achieve an upgrade of the financial strength ratings of our insurance company subsidiaries and the impact of prior rating downgrades on our business; (ii) the ultimate outcome of lawsuits filed against us and other legal and regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. proceedings to which we are subject; (iii) our ability to obtain adequate and timely rate increases on our supplemental health products including our long-term care business; (iv) mortality, morbidity morbidity /mor·bid·i·ty/ (mor-bid´it-e) 1. a diseased condition or state. 2. the incidence or prevalence of a disease or of all diseases in a population. mor·bid·i·ty n. , usage of health care services, persistency and other factors which may affect the profitability of our insurance products; (v) our ability to achieve anticipated expense reductions and levels of operational efficiencies; (vi) the adverse impact of our Predecessor's bankruptcy proceedings bankruptcy proceedings n. the bankruptcy procedure is: a) filing a petition (voluntary or involuntary) to declare a debtor person or business bankrupt, or, under Chapter 11 or 13, to allow reorganization or refinancing under a plan to meet the debts of the party on our business operations Business operations are those activities involved in the running of a business for the purpose of producing value for the stakeholders. Compare business processes. The outcome of business operations is the harvesting of value from assets , and relationships with our customers, employees, regulators, distributors and agents; (vii) performance of our investments; (viii) customer response to new products, distribution channels and marketing initiatives; (ix) the risk factors or uncertainties listed from time to time in our filings with the Securities and Exchange Commission; (x) general economic conditions and other factors, including prevailing interest rate levels, stock and credit market performance and health care inflation, which may affect (among other things) our ability to sell products and access capital on acceptable terms, the returns on and the market value of our investments, and the lapse rate lapse rate n. The rate of decrease of atmospheric temperature with increase in altitude. lapse rate The rate of change of any meteorological phenomenon, especially atmospheric temperature with altitude. and profitability of policies; (xi) changes in the Federal income tax laws and regulations which may affect or eliminate the relative tax advantages of some of our products; and (xii) regulatory changes or actions, including those relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc regulation of the financial affairs of our insurance companies, such as the payment of dividends to us, regulation of financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. affecting (among other things) bank sales and underwriting Underwriting 1. The process by which investment bankers raise investment capital from investors on behalf of corporations and governments that are issuing securities (both equity and debt). 2. The process of issuing insurance policies. of insurance products, regulation of the sale, underwriting and pricing of products, and health care regulation affecting health insurance products. Other factors and assumptions not identified above are also relevant to the forward-looking statements, and if they prove incorrect, could also cause actual results to differ materially from those projected. All written or oral forward-looking statements attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to us are expressly qualified in their entirety The whole, in contradistinction to a moiety or part only. When land is conveyed to Husband and Wife, they do not take by moieties, but both are seised of the entirety. by the foregoing cautionary statement. Our forward-looking statements speak only as of the date made. We assume no obligation to update or to publicly announce the results of any revisions ReVisions is a 2004 anthology of alternate history short-stories. It is edited by Julie E. Czerneda and Isaac Szpindel. Contents Title Author The Resonance of Light James Alan Gardner Out of China Julie E. to any of the forward-looking statements to reflect actual results, future events or developments, changes in assumptions or changes in other factors affecting the forward-looking statements.
- Tables Follow -
CONSECO, INC. AND SUBSIDIARIES
PRODUCT BENEFIT RATIOS ON MAJOR SUPPLEMENTAL HEALTH LINES OF BUSINESS
Three Months Three Months
Ended Ended
March 31, 2005 March 31, 2004
-------------- --------------
Bankers Life segment:
Medicare Supplement:
Earned premium $164 million $162 million
Benefit ratio 71.86% 65.56%
Long-Term Care:
Earned premium $138 million $131 million
Benefit ratio 91.78% 89.26%
Interest-adjusted benefit ratio
(a non-GAAP measure)(a) 63.85% 62.86%
Conseco Insurance Group segment:
Medicare Supplement:
Earned premium $81 million $96 million
Benefit ratio (b) 55.13% 61.10%
Specified Disease:
Earned premium $90 million $90 million
Benefit ratio 75.50% 70.15%
Other Business in Run-off segment:
Earned premium $92 million $103 million
Benefit ratio 94.47% 98.06%
Interest-adjusted benefit ratio
(a non-GAAP measure)(a) 48.18% 59.99%
(a) The interest-adjusted benefit ratio (a non-GAAP measure) is
calculated by dividing the product's insurance policy benefits
less interest income on the accumulated assets backing the
insurance liabilities by insurance policy income. Interest income
is an important factor in measuring the performance of longer
duration health products. The net cash flows generally cause an
accumulation of amounts in the early years of a policy (accounted
for as reserve increases), which will be paid out as benefits in
later policy years (accounted for as reserve decreases).
Accordingly, as the policies age, the benefit ratio will typically
increase, but the increase in the change in reserve will be
partially offset by interest income earned on the accumulated
assets. The interest-adjusted benefit ratio reflects the interest
income offset. Since interest income is an important factor in
measuring the performance of these products, management believes a
benefit ratio, which includes the effect of interest income, is
useful in analyzing product performance.
(b) Reported benefit ratios below 65% on CIG's Medicare supplement
products include the impact of active life reserves released on
lapsed policies. The earnings impact from such decreases in
reserves is generally offset by increased amortization expense.
CONSECO, INC. AND SUBSIDIARIES
COLLECTED PREMIUMS
(Dollars in millions)
Three Months Three Months
Ended Ended
March 31, 2005 March 31, 2004
-------------- --------------
Bankers Life segment:
Annuity products $221.7 $177.3
Supplemental health products 313.6 303.1
Life products 48.6 43.0
-------------- --------------
Total collected premiums $583.9 $523.4
============== ==============
Conseco Insurance Group segment:
Annuity products $25.3 $13.4
Supplemental health products 174.6 190.9
Life products 89.7 101.8
-------------- --------------
Total collected premiums $289.6 $306.1
============== ==============
Other Business in Run-off segment:
Long-term care products $92.3 $98.6
Major medical products 0.7 6.1
CONSECO, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(Dollars in millions)
March 31, December 31,
2005 2004
------------ ------------
(unaudited)
ASSETS
Investments:
Actively managed fixed maturities at fair
value (amortized cost: March 31, 2005 -
$21,723.2; December 31, 2004 - $20,985.8) $21,992.7 $21,599.0
Equity securities at fair value (cost:
March 31, 2005 - $62.3; December 31,
2004 - $62.3) 68.1 68.3
Mortgage loans 1,116.9 1,123.8
Policy loans 436.4 448.5
Trading securities 858.5 902.3
Other invested assets 134.3 164.4
------------ ------------
Total investments 24,606.9 24,306.3
Cash and cash equivalents:
Unrestricted 287.4 776.6
Restricted 18.7 18.9
Accrued investment income 324.3 308.4
Value of policies in force at the
Effective Date 2,606.4 2,629.6
Cost of policies produced 503.2 409.1
Reinsurance receivables 902.4 975.7
Income tax assets 1,017.7 967.2
Assets held in separate accounts 31.0 32.9
Other assets 403.7 330.8
------------ ------------
Total assets $30,701.7 $30,755.5
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Liabilities for insurance products:
Interest-sensitive products $12,505.7 $12,508.2
Traditional products 11,745.7 11,741.3
Claims payable and other policyholder
funds 884.9 879.8
Liabilities related to separate accounts 31.0 32.9
Other liabilities 553.4 498.3
Investment borrowings 427.7 433.9
Notes payable - direct corporate
obligations 758.4 758.9
------------ ------------
Total liabilities 26,906.8 26,853.3
------------ ------------
Commitments and Contingencies
Shareholders' equity:
Preferred stock 667.8 667.8
Common stock ($0.01 par value,
8,000,000,000 shares authorized,
shares issued and outstanding:
March 31, 2005 - 151,057,863; December
31, 2004 - 151,057,863) 1.5 1.5
Additional paid-in capital 2,600.1 2,597.8
Accumulated other comprehensive income 155.4 337.3
Retained earnings 370.1 297.8
------------ ------------
Total shareholders' equity 3,794.9 3,902.2
------------ ------------
Total liabilities and shareholders'
equity $30,701.7 $30,755.5
============ ============
CONSECO, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(Dollars in millions, except per share data)
(unaudited)
Three months ended
March 31,
----------------------------
2005 2004
------------- -------------
Revenues:
Insurance policy income $727.7 $748.4
Net investment income:
General account assets 337.8 312.0
Policyholder and reinsurer accounts (23.3) 15.7
Net realized investment gains 1.6 27.1
Fee revenue and other income 4.2 7.4
------------- -------------
Total revenues 1,048.0 1,110.6
------------- -------------
Benefits and expenses:
Insurance policy benefits 671.0 719.7
Interest expense 14.7 29.1
Amortization 94.7 98.2
Other operating costs and expenses 140.4 151.2
------------- -------------
Total benefits and expenses 920.8 998.2
------------- -------------
Income before income taxes 127.2 112.4
Income tax expense 45.4 39.6
------------- -------------
Net income 81.8 72.8
Preferred stock dividends 9.5 22.9
------------- -------------
Net income applicable to common stock $72.3 $49.9
============= =============
Earnings per common share:
Basic:
Weighted average shares outstanding 151,058,000 100,116,000
============= =============
Net income $0.48 $0.50
============= =============
Diluted:
Weighted average shares outstanding 186,764,000 100,588,000
============= =============
Net income $0.44 $0.50
============= =============
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