Conseco Reports Third 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 ) today reported net income applicable to common stock of $57.9 million, or 36 cents per 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. common share, for the quarter ended September September: see month. 30, 2004. Results for the quarter included net after-tax af·ter-tax also af·ter·tax adj. Relating to or being that which remains after payment, especially of income taxes: after-tax profits. realized investment losses of $0.1 million, or nil per share. 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. , Chief Executive Officer, said, "Solid progress is being achieved at Conseco, reflecting the positive momentum we are building. The business plan we are executing is designed to achieve ratings improvement, build shareholder value and position Conseco for continued profitable growth over the long term. "Importantly for this quarter, we delivered earnings that met our expectations, while continuing to improve our operations and further advance our risk management controls. I am especially pleased with the dedication I have seen in Conseco's managers and employees, who are working harder than ever to build the long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. value of our core businesses. "This quarter's earnings further strengthen our solid capital position, bringing overall debt-to-total capital (excluding accumulated other comprehensive income In 1997 the Financial Accounting Standards Board issued a Statement on Financial Accounting Standards entitled “Comprehensive Income”. This statement required all income statement items to be reported either as a regular item in the income statement and or a special item as ) below 19% at September 30, 2004, and our book value per share (excluding accumulated other comprehensive income) increased to $18.25. Another positive development during the quarter was the receipt of a favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. ruling from the IRS An abbreviation for the Internal Revenue Service, a federal agency charged with the responsibility of administering and enforcing internal revenue laws. on our $6.7 billion tax loss from a predecessor predecessor - parent business, a ruling that supported our tax position. "Conseco's mission is to be a premier provider of insurance products to America's working families and seniors. Our team is working with purposeful pur·pose·ful adj. 1. Having a purpose; intentional: a purposeful musician. 2. Having or manifesting purpose; determined: entered the room with a purposeful look. urgency to transform weaknesses into strengths and to earn 'excellent' insurance company ratings. While there is much work yet to do, we are delivering measurable results on all five of our key business priorities." --Sales. At Bankers Life, we continue to invest 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. distribution. We have expanded into new geographic geographic /geo·graph·ic/ (je?o-graf´ik) in pathology, of or referring to a pattern that is well demarcated, resembling outlines on a map. geographic pertaining to geography. markets, adding 23 sales offices so far this year, bringing the total number of Bankers branches to 157. We have also invested in our existing branches by replacing 40 under-performing branch managers, and by recruiting a steady stream of new sales agents. At Conseco Insurance Group ("CIG CIG Ceiling (height above ground level to base of clouds) CIG Conference Intergouvernementale (French: Intergovermental Conference) CIG Conservation Innovation Grants (USDA NRCS) "), we are building for long-term growth following our double-notch rating upgrade from A.M. Best in June June: see month. . We are also updating our product portfolio and giving top priority to rebuilding our independent agent distribution network. --Systems simplification 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. . We are currently on track to eliminate seven redundant Repetitive. See redundancy. systems by yearend and seven more in 2005. Besides contributing to cost savings, creating a more efficient back office will make it easier for our people to better serve our agents and policyholders. --Operational improvements. Conseco Insurance Group is taking a fresh look at its business processes in order to create a more customer-driven, service-oriented Different ideas of service-orientation are found in different domains.
An individual who owns an insurance policy. services, performance management, operations planning, and agent care -- each focused on improving service levels and positioning the organization for growth. CIG and Bankers have also strengthened their operations teams by recruiting new talented and experienced executives into pivotal positions. --Expense reductions. Despite the substantial investments we have been required to make this year in Sarbanes-Oxley compliance, systems simplification and other business initiatives, we believe we are on track to achieve or exceed our 2004 and 2005 expense goals. --Sarbanes-Oxley compliance. Our SOX (1) (Schema for Object-oriented XML) An XML schema developed by Veo Systems and Muzino Communications, which was submitted to the W3C. SOX is based on DTD, but adds data typing and reuse mechanisms. project team includes 60 dedicated specialists working assiduously as·sid·u·ous adj. 1. Constant in application or attention; diligent: an assiduous worker who strove for perfection. See Synonyms at busy. 2. to implement our SOX 404 objectives by yearend. Mr. Kirsch continued: "Based on our progress, we are confirming our most recent earnings guidance for 2004, which anticipates that net income applicable to common stock for the fourth quarter will be in the range of $63 million to $68 million. We are currently in the process of preparing our operating plan for next year, and we will provide our 2005 guidance range when we report earnings for the full year 2004. Based on our planning work to date, at present we know of no reason why the consensus estimate for 2005 of $1.71 per share will not fall within our guidance range." The company's earnings guidance is based on numerous assumptions and factors. If they prove incorrect Incorrect means to not be correct and may also refer to:
A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. below). The company's guidance excludes any impact from realized investment gains or losses. "Our number one priority for the remainder of 2004 and 2005," Kirsch said, "will be to make the investments necessary to earn an 'A' category rating from A.M. Best as soon as is prudently pru·dent adj. 1. Wise in handling practical matters; exercising good judgment or common sense. 2. Careful in regard to one's own interests; provident. 3. Careful about one's conduct; circumspect. possible. To that end, 2005 will be a year dedicated to achieving operating excellence as the basis for driving consistent performance over time. Accordingly, we will continue to focus on the five business drivers we believe are key to creating the strongest platform for growth, profitability and shareholder value over the long term." Quarterly results by segment were as follows ($ in millions) (1):
Successor Predecessor
-----------------------------------
Three Three One Two
Months Months Month Months
Ended Ended Ended Ended
Sept. June Sept. Aug.
30, 30, 30, 31,
2004 2004 2003 2003
-----------------------------------
Earnings before taxes:
Bankers Life $55.8 $53.7 $22.1 $41.6
Conseco Insurance Group 67.6 68.6 17.1 266.9
Other Business in Run-off 16.5 15.6 2.8 (100.4)
Corporate Operations (34.8) (27.5) (8.2) 2,084.3
Realized gains (losses), net of
related amortization, and
venture capital income (loss) (0.2) (3.6) 4.0 (33.4)
-----------------------------------
Earnings before taxes 104.9 106.8 37.8 2,259.0
Tax expense 37.6 38.5 13.6 17.7
-----------------------------------
Net income 67.3 68.3 24.2 2,241.3
Preferred stock dividends:
10.50% Class A convertible
exchangeable preferred
stock (retired June 11, 2004) - 18.4 5.3 -
5.50% Class B mandatorily
convertible preferred
stock (issued May 12, 2004) 9.4 5.3 - -
-----------------------------------
Net income applicable to
common stock $57.9 $44.6 $18.9 $2,241.3
===================================
(1) The company emerged from Chapter 11 bankruptcy bankruptcy, in law, settlement of the liabilities of a person or organization wholly or partially unable to meet financial obligations. The purposes are to distribute, through a court-appointed receiver, the bankrupt's assets equitably among creditors and, in most on September 10, 2003. Results for periods following the emergence from Chapter 11 reflect fresh-start accounting adjustments as required by generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting ("GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). "). Accordingly, financial results for periods following the company's emergence from bankruptcy are not comparable to results prior to emergence. Activity of the company for periods after September 1, 2003 is included in the post-bankruptcy or "successor 1. SuccessoR - A language for distributed computing derived from SR. ["SuccessoR: Refinements to SR", R.A. Olsson et al, TR 84-3, U Arizona 1984]. 2. successor - daughter company" financial statements. Activity of the company for periods prior to September 1, 2003 is included in the pre-bankruptcy or "predecessor company" financial statements. Pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta earnings in our Bankers Life segment were in line with our overall expectations and included approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $3 million of net investment income related to 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 commercial mortgages and favorable income on non-traditional invested assets. Pre-tax earnings in our Conseco Insurance Group segment totaled $67.6 million in the third quarter and included approximately $4 million of net investment income related to prepayment income on commercial mortgages and favorable income on non-traditional investments. CIG's earnings were negatively impacted by changes in lapse (language) LAPSE - A single assignment language for the Manchester dataflow machine. ["A Single Assignment Language for Data Flow Computing", J.R.W. Glauert, M.Sc Diss, Victoria U Manchester, 1978]. assumptions related to the 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 block of business, totaling approximately $4 million before tax. These changes reflect better persistency in this block of business and resulted in an increase to reserves of approximately $6 million, partially offset by reduced amortization expense of $2 million. This change in estimate had the effect of increasing the reported loss ratio on specified disease business to 76.98% for the quarter. The loss ratio on this business for the last 12 months was approximately 68%, which was generally in line with our expectations. Pre-tax earnings 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 generally in line with our expectations. Corporate Operations include "40/86 Advisors," our investment advisory subsidiary, and the expenses of our corporate operations. Included in the third quarter results of Corporate Operations were $13.5 million of 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 and other transition costs related to the management change announced in August. Corporate Operations also included $11 million of interest expense on our bank debt for the third quarter. New sales Third 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 at Bankers Life totaled $45 million, essentially flat compared to 3Q03. Sales of supplemental health and life products at Conseco Insurance Group totaled $13 million, down 35% from 3Q03, driven primarily by a $6 million decrease in 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 sales through independent agents. 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 for the quarter were $254 million at Bankers Life, up 20% compared to 3Q03. At Conseco Insurance Group, first-year annuity deposits for the quarter were $11 million, up 120% compared to 3Q03.
Supplemental health product loss ratios
Loss ratios on major supplemental health lines of business in each of
our segments were as follows:
Successor Predecessor
-------------------------------------------------
Three Months Three Months One Month Two Months
Ended Ended Ended Ended
Sept. 30, June 30, Sept. 30, Aug. 31,
2004 2004 2003 2003
-------------------------------------------------
Bankers Life segment:
Medicare Supplement:
Earned premium $160 million $161 million $53 million$106 million
Loss ratio 70.19% 69.04% 66.50% 59.83%
Long-Term Care:
Earned premium $135 million $133 million $42 million $85 million
Loss ratio 89.10% 89.12% 87.81% 96.60%
Interest-adjusted
loss ratio(a) 62.01% 62.39% 62.37% 79.27%
Conseco Insurance
Group segment:
Medicare Supplement:
Earned premium $87 million $94 million $32 million $63 million
Loss ratio 63.41% 62.87% 68.24% 61.73%
Specified Disease:
Earned premium $91 million $92 million $30 million $60 million
Loss ratio 76.98% 64.35% 60.68% 82.48%
Other Business in
Run-off segment:
Earned premium $98 million $101 million $42 million $83 million
Loss ratio 97.93% 95.19% 103.24% 217.91%
Interest-adjusted
loss ratio(a) 56.45% 55.73% 74.39% 188.54%
(a) Calculated as the product's: (i) insurance policy benefits less
interest income on the accumulated assets which back the insurance
liabilities; divided by (ii) earned premium.
Collected premiums
Collected premiums in each of our operating segments by product line
were as follows ($ in millions):
Successor Predecessor
-------------------------------------------------
Three Months Three Months One Month Two Months
Ended Ended Ended Ended
Sept. 30, June 30, Sept. 30, Aug. 31,
2004 2004 2003 2003
-------------------------------------------------
Bankers Life segment:
Annuity products $254.2 $230.4 $63.5 $149.4
Supplemental health
products 294.3 293.2 96.6 191.6
Life products 46.4 41.1 12.0 30.3
-------------------------------------------------
Total collected
premiums $594.9 $564.7 $172.1 $371.3
=================================================
Conseco Insurance
Group segment:
Annuity products $16.1 $15.9 $5.2 $11.5
Supplemental
health products 180.3 181.8 65.0 128.3
Life products 93.7 90.2 34.5 73.8
-------------------------------------------------
Total collected
premiums $290.1 $287.9 $104.7 $213.6
=================================================
Other Business in
Run-off segment:
Long-term care
products $92.7 $92.1 $30.1 $70.6
Major medical
products 3.6 5.3 17.9 31.8
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 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. , 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) the potential adverse impact of our predecessor's Chapter 11 petition petition Written instrument directed to an individual, government official, legislative body, or court in order to seek redress of grievances or to request a favour. 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; (ii) our ability to operate our business under the restrictions imposed by our senior bank credit facility or future credit facilities credit facilities npl → facilidades fpl de crédito credit facilities npl → facilités fpl de paiement credit facilities ; (iii) our ability to improve the financial strength ratings of our insurance company subsidiaries and the impact of prior rating downgrades on our business; (iv) our ability to obtain adequate and timely rate increases on our supplemental health products including our long-term care business; (v) 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 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; (vi) our ability to achieve anticipated expense reductions and levels of operational efficiencies; (vii) customer response to new products, distribution channels and marketing initiatives; (viii) 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; (ix) performance of our investments; (x) changes in the Federal income tax laws and regulations which may affect or eliminate the relative tax advantages of some of our products; (xi) our ability to satisfy the requirements of Section 404 of the Sarbanes Oxley Oxley refers to several things: People
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. 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, including 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; (xiii) the ultimate outcome of lawsuits filed against us and other legal and regulatory proceedings to which we are subject; and (xiv) the risk factors or uncertainties listed from time to time in our filings with the Securities and Exchange Commission. 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.
CONSECO, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(Dollars in millions)
Successor
--------------------------
September 30, December 31,
2004 2003
-------------- -----------
(unaudited)
ASSETS
Investments:
Actively managed fixed maturities at fair
value (amortized cost: September 30,
2004 - $20,745.9; December 31,
2003 - $19,470.7) $ 21,306.3 $ 19,840.1
Equity securities at fair value (cost:
September 30, 2004 - $62.5; December 31,
2003 - $71.8) 67.6 74.5
Mortgage loans 1,089.4 1,139.5
Policy loans 465.9 503.4
Trading securities 908.9 915.1
Other invested assets 133.2 324.1
------------ -----------
Total investments 23,971.3 22,796.7
Cash and cash equivalents:
Unrestricted 1,078.0 1,228.7
Restricted 18.9 31.9
Accrued investment income 318.1 315.5
Value of policies in force at the
Effective Date 2,706.9 2,949.5
Cost of policies produced 327.7 101.8
Reinsurance receivables 1,019.2 983.9
Income tax assets 12.2 24.6
Goodwill 785.3 952.2
Other intangible assets 149.4 155.2
Assets held in separate accounts 31.9 37.7
Other assets 558.9 395.8
------------ -----------
Total assets $ 30,977.8 $ 29,973.5
============ ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Liabilities for insurance and asset
accumulation products:
Interest-sensitive products $ 12,432.5 $ 12,480.4
Traditional products 11,641.1 11,485.2
Claims payable and other policyholder
funds 922.3 892.3
Liabilities related to separate
accounts 31.9 37.7
Other liabilities 847.8 573.0
Investment borrowings 584.8 387.3
Notes payable - direct corporate
obligations 788.6 1,300.0
------------ -----------
Total liabilities 27,249.0 27,155.9
------------ -----------
Commitments and Contingencies
Shareholders' equity:
Preferred stock 667.8 887.5
Common stock ($0.01 par value,
8,000,000,000 shares authorized, shares
issued and outstanding: September 30,
2004 - 151,123,275; December 31, 2003 -
100,115,772) 1.5 1.0
Additional paid-in-capital 2,535.8 1,641.9
Accumulated other comprehensive income 302.8 218.7
Retained earnings 220.9 68.5
------------ -----------
Total shareholders' equity 3,728.8 2,817.6
------------ -----------
Total liabilities and shareholders'
equity $ 30,977.8 $ 29,973.5
============ ===========
CONSECO, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(Dollars in millions, except per share data)
(unaudited)
Successor Predecessor
--------------------------------------
Three months One month Two months
ended ended ended
Sept. 30, Sept. 30, August 31,
2004 2003 2003
------------ ------------ -----------
Revenues:
Insurance policy income $ 737.8 $ 256.2 $ 516.8
Net investment income:
General account assets 329.7 106.0 232.5
Policyholder and reinsurer
accounts (9.8) (2.1) 11.7
Venture capital income (loss)
related to investment in AT&T
Wireless Services, Inc. - (2.7) 2.0
Net realized investment gains
(losses) 6.0 6.7 (35.9)
Fee revenue and other income 5.2 2.2 9.0
------------ ------------ -----------
Total revenues 1,068.9 366.3 736.1
------------ ------------ -----------
Benefits and expenses:
Insurance policy benefits 688.4 243.3 390.9
Provision for losses - - 24.5
Interest expense (contractual
interest of $73.7 for the two
months ended August 31, 2003) 12.9 7.0 55.4
Amortization 91.9 26.9 61.3
Other operating costs and
expenses 170.8 51.3 108.0
Reorganization items - - (2,163.0)
------------ ------------ -----------
Total benefits and
expenses 964.0 328.5 (1,522.9)
------------ ------------ -----------
Income before income
taxes 104.9 37.8 2,259.0
Income tax expense on period
income 37.6 13.6 17.7
------------ ------------ -----------
Net income 67.3 24.2 2,241.3
Preferred stock dividends 9.4 5.3 -
------------ ------------ -----------
Net income applicable to
common stock $ 57.9 $ 18.9 $ 2,241.3
============ ============ ===========
Earnings per common share:
Basic:
Weighted average shares
outstanding 150,885,000 100,098,000
============ ============
Net income $ 0.38 $ 0.19
============ ============
Diluted:
Weighted average shares
outstanding 189,195,000 144,671,000
============ ============
Net income $ 0.36 $ 0.17
============ ============
CONSECO, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS, continued
(Dollars in millions, except per share data)
(unaudited)
Successor Predecessor
--------------------------------------
Nine months One month Eight months
ended ended ended
Sept. 30, Sept. 30, August 31,
2004 2003 2003
------------ ------------ -----------
Revenues:
Insurance policy income $ 2,223.2 $ 256.2 $ 2,204.3
Net investment income:
General account assets 960.1 106.0 928.4
Policyholder and reinsurer
accounts (8.9) (2.1) 30.1
Venture capital income (loss)
related to investment in AT&T
Wireless Services, Inc. - (2.7) 10.5
Net realized investment gains
(losses) 27.5 6.7 (5.4)
Fee revenue and other income 17.1 2.2 35.5
------------ ------------ -----------
Total revenues 3,219.0 366.3 3,203.4
------------ ------------ -----------
Benefits and expenses:
Insurance policy benefits 2,074.6 243.3 2,136.4
Provision for losses - - 55.6
Interest expense (contractual
interest of $268.5 for the
eight months ended August
31, 2003) 65.1 7.0 202.5
Amortization 272.4 26.9 343.7
Gain on extinguishment of
debt (2.8) - -
Other operating costs and
expenses 485.6 51.3 423.5
Reorganization items - - (2,130.5)
------------ ------------ -----------
Total benefits and
expenses 2,894.9 328.5 1,031.2
------------ ------------ -----------
Income before income
taxes and discontinued
operations 324.1 37.8 2,172.2
Income tax expense (benefit)
on period income 115.7 13.6 (13.5)
------------ ------------ -----------
Income before discontinued
operations 208.4 24.2 2,185.7
Discontinued operations, net of
income taxes - - 16.0
------------ ------------ -----------
Net income 208.4 24.2 2,201.7
Preferred stock dividends 56.0 5.3 -
------------ ------------ -----------
Net income applicable to
common stock $ 152.4 $ 18.9 $ 2,201.7
============ ============ ===========
Earnings per common share:
Basic:
Weighted average shares
outstanding 126,016,000 100,098,000
============ ============
Net income $ 1.21 $ 0.19
============ ============
Diluted:
Weighted average shares
outstanding 145,592,000 144,671,000
============ ============
Net income $ 1.15 $ 0.17
============ ============
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