Conseco reports record operating EPS for fourth quarter and year, declares two-for-one stock split.--(BUSINESS WIRE)-- Highlights o Internal growth drives record operating EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. for fourth quarter (up 37 percent) and year o 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 generates 33 percent return on common equity (excluding SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System 115) in 1995 o Book value per share (excluding SFAS 115) increases by 30 percent in 1995 to $35.32 o Conseco declares its third 2-for-1 stock split since 1991 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. .: Feb. 12, 1996 -- Conseco, Inc. today reported record fourth quarter 1995 operating earnings Operating Earnings Profits after subtracting expenses such as marketing, cost of goods sold, administration and general operating costs from revenue. Notes: Tax and interest expenses are not subtracted - operating earnings are synonymous with EBIT (earnings before per fully 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. share of $1.60, up 37 percent over $1.17 per share in the fourth quarter of 1994. Conseco also announced that its board of directors has authorized au·thor·ize tr.v. au·thor·ized, au·thor·iz·ing, au·thor·iz·es 1. To grant authority or power to. 2. To give permission for; sanction: a two-for-one split of its common stock. Fourth quarter 1995 operating earnings were $42.0 million, up 25 percent over $33.5 million in 1994. For the full-year 1995, operating earnings were $131.3 million, or a record $5.03 per fully diluted share, compared to $151.7 million, or $4.93 per fully diluted share, in 1994. (Note to editors: As used throughout this release, "operating earnings" exclude trading income (losses), realized investment gains (losses), merchant banking income (losses) and extraordinary charge. "Operating earnings per fully diluted share" is the figure security analysts reference in their published earnings estimates. According to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. First Call, the consensus analyst estimate for Conseco's 4Q95 operating earnings per fully diluted share was $1.55, compared to Conseco's actual 4Q95 operating EPS of $1.60.) The stock split will be paid April 1, 1996, to holders of record at the close of business on March 20, 1996. The split will be effected by issuing one additional share of common stock for each share outstanding on the record date. Management intends to recommend to Conseco's board at its next meeting that the quarterly cash dividend to be paid April 1, 1996, be increased to 2 cents per post-split share from the indicated rate of 1 cent. Conseco Chairman Stephen Stephen, 1097?–1154, king of England (1135–54). The son of Stephen, count of Blois and Chartres, and Adela, daughter of William I of England, he was brought up by his uncle, Henry I of England, who presented him with estates in England and France and C. Hilbert Noun 1. Hilbert - German mathematician (1862-1943) David Hilbert said, "Results for the quarter and year indicate the success of our 1995 strategy to focus on internal growth at our life insurance affiliates. By completing the merger of CCP (Certified Computer Professional) The award for successful completion of a comprehensive examination on computers offered by the ICCP. See ICCP and certification. . 1. (language) CCP - Concurrent Constraint Programming. 2. Insurance into Conseco, and increasing our stake in Bankers Life Holding Corp. (NYSE NYSE See: New York Stock Exchange : BLH BLH Baldwin-Lima-Hamilton (locomotive manufacturer) BLH Bellingham, Washington (border patrol station) BLH Bidirectional Long Haul ) to 90.5 percent, we: (1) 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. our corporate structure (improving our operating efficiency and lowering our costs); (2) consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: income streams which hedge each other in different economic conditions (improving both the quality and predictability of our earnings); and (3) facilitated significant cross-selling Cross-selling is the term used to describe the sale of additional products or services to a customer. Less frequently it is used to describe the sale of services to additional business units at an account or to different geographic units of a customer. opportunities among several diversified diversified (di·verˑ·s distribution channels. "In the process," Hilbert said, "during 1995 we generated a 33 percent return on equity and a 46 percent total return for our shareholders. Book value per share (excluding the effects of SFAS 115) increased by 30 percent, to $35.32. On a pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma basis, assuming the conversion of both our Series D Convertible Preferred Stock Convertible Preferred Stock Preferred stock that includes an option for the holder to convert the preferred shares into a fixed number of common shares, usually anytime after a predetermined date. Also known as "convertible preferred shares". and the recently issued Series E PRIDES, Conseco's per-share book value would be $43.19. We also generated in 1995 more than $2.3 billion of combined premiums from our three distribution channels: senior market specialists, educator market specialists and professional independent producers. "Conseco was honored hon·or n. 1. High respect, as that shown for special merit; esteem: the honor shown to a Nobel laureate. 2. a. Good name; reputation. b. , once again, to be recognized among America's elite 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. performance corporations by Forbes Forbes , B(ertie) C(harles) 1880-1954. American publisher and businessman who founded and edited (1916-1954) Forbes magazine. His son Malcolm Stevenson Forbes magazine," Hilbert said. "Forbes' '1996 Annual Report on American American, river, 30 mi (48 km) long, rising in N central Calif. in the Sierra Nevada and flowing SW into the Sacramento River at Sacramento. The discovery of gold at Sutter's Mill (see Sutter, John Augustus) along the river in 1848 led to the California gold rush of Industry' ranked Conseco in the top 3 percent among 1,309 companies in each of three categories important to investors--five-year average return on equity, five-year average earnings per share growth, and five-year stock performance. "Looking forward," Hilbert said, "We are well on our way to meeting our key objectives for 1996. With the completion of our PRIDES offering and the use of the $258 million net proceeds Net Proceeds The amount received after all costs are deducted from the sale of a piece of property or security. Notes: In the case of an investor selling a security, net proceeds represent the proceeds from the sale minus any trading costs (i.e. commissions). to reduce bank debt, we have lowered Conseco's debt-to-capital ratio to .33-to-1--reaching our year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. 1996 target well ahead of schedule. In addition, we are in the process of restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). the debt of affiliate Affiliate Relationship between two companies when one company owns substantial interest, but less than a majority of the voting stock of another company, or when two companies are both subsidiaries of a third company. See: Subsidiaries, parent company. Bankers Life Holding Corp. (NYSE:BLH), which will lower BLH's interest expense and provide greater repayment Repayment The act of paying back a debt. Notes: Everyone has to repay their debts eventually. See also: Debt, Defeasance, Loan flexibility. "I expect continued earnings growth in 1996 from insurance operations, from merchant banking and from partnership activities," Hilbert said. "We'll we'll Contraction of we will. we'll we will or we shall we'll will ~shall continue to focus on operating as efficiently as possible, and we'll continue to pursue merchant banking transactions here in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. through Conseco's Private Capital Group and internationally through Conseco Global Investments. We believe we are on track to equal or exceed analyst estimates of $7.00 operating earnings per pre-split share in 1996. The board's action on the stock split, our third two-for-one split since 1991, reflects not only our desire to maintain the stock's liquidity and keep Conseco shares affordable for a broad range of investors, but our confidence in Conseco's future." Business results Conseco conducts four business activities. Results from the first three--(1) life insurance operations, including senior market, 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. and "other life insurance" activities; (2) fee-based operations; and (3) partnership operations, including Conseco's share of the profits of the life insurance companies owned by Conseco Capital Partners II, L.P. (Partnership II), Conseco's acquisition partnership--are included in operating earnings. Results in the fourth, merchant banking operations, are excluded from operating earnings. All activities are described in detail in the supplement attached as page 8 of this release. The following discussion compares fourth quarter 1995 and fourth quarter 1994 results per fully diluted share. Insurance operations. Senior market operating EPS rose 75 percent, to $1.10, primarily due to Conseco's increased percentage ownership in BLH and increased business in force. Annuity operating EPS rose 377 percent, to 62 cents, mainly due to Conseco's increased percentage ownership in CCP and increased business in force. Other insurance operating EPS declined 48 percent, to 15 cents, primarily because of investment income from other invested assets in the fourth quarter of 1994. Partnership operations. Operating EPS rose 240 percent, to 17 cents, primarily due to Conseco's increased percentage ownership and increased business in force. This segment includes the operations of American Life Group, acquired by Partnership II in September September: see month. 1994 and in which Conseco currently has a 36 percent ownership interest. Merchant banking operations. In the fourth quarter of 1995, Conseco recognized merchant banking income of $13.3 million, or 51 cents per fully diluted share, as the result of the sale of Conseco's investment in Eagle Credit (a finance subsidiary of Harley-Davidson Harley-Davidson Motor Company (NYSE: HOG) is an American manufacturer of motorcycles based in Milwaukee, Wisconsin, United States. The company emphasizes heavyweight (over 750 cc) bikes designed for cruising on the highway and known for their distinctive exhaust note. , Inc.). Such income represents a 46 percent 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. pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta return. In addition, Conseco recognized merchant banking expenses of $1.1 million, or 4 cents per fully diluted share, in the fourth quarter of 1995 as a result of several non-recurring expenses related to American Life Group's withdrawn initial public offering and various restructuring activities designed to increase the value of that company. In the fourth quarter of 1994, the merchant banking segment had a net loss of $19.2 million, or 78 cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. , related to expenses incurred in a terminated ter·mi·nate v. ter·mi·nat·ed, ter·mi·nat·ing, ter·mi·nates v.tr. 1. To bring to an end or halt: merger transaction, partially offset by income recognized upon Conseco's sale of its remaining 40 percent stake in an affiliate. Additional discussion Invested Assets. At Dec. 31, 1995, Conseco's consolidated $14.4 billion investment portfolio consisted primarily of investment-grade investment-grade Of, relating to, or being a bond suitable for purchase by institutions under the prudent man rule. Investment-grade is restricted to those bonds graded BBB and above by Standard & Poor's and graded Baa3 and above by Moody's. , publicly traded debt securities. Only 2 percent of investments were mortgages, only 4 percent were high-yield bonds High-yield bond See: Junk bond high-yield bond See junk bond. , and there were no significant nonperforming investments. Net income. Fourth quarter 1995 net income of $52.6 million, or $2.01 per fully diluted share, also included: (1) trading losses The following contains a list of trading losses which eventually forced major corporations to go bankrupt or restructure parts of their organisation. This list is not exhaustive. of $0.3 million, or 1 cent per share; (2) net realized investment gains of $0.8 million, or 3 cents per share; (3) the previously described merchant banking net income of $12.2 million, or 47 cents per share; and (4) an extraordinary charge of $2.1 million, or 8 cents per share, related to early retirement of debt. Fourth quarter 1994 net income of $0.3 million (a loss of 17 cents per fully diluted share) included: (1) trading losses of $0.9 million, or 4 cents per share; (2) net realized investment losses of $11.5 million, or 46 cents per share; (3) the previously described merchant banking net loss of $19.2 million, or 78 cents per share; and (4) an extraordinary charge of $1.6 million, or 6 cents per share, related to early retirement of debt. Full-year 1995 net income of $220.4 million, or $8.44 per fully diluted share, also included: (1) trading losses of $0.8 million, or 3 cents per share; (2) net realized investment gains of $4.9 million, or 19 cents per share; (3) merchant banking income of $87.1 million, or $3.33 per share; and (4) an extraordinary charge of $2.1 million, or 8 cents per share, related to early retirement of debt. Full-year 1994 net income of $150.4 million, or $4.87 per fully diluted share, included: (1) trading losses of $0.3 million, or 2 cents per share; (2) net realized investment losses of $20.2 million, or 66 cents per share; (3) merchant banking income of $23.2 million, or 75 cents per share, resulting from the sale of a majority stake in an affiliate; and (4) an extraordinary charge of $4.0 million, or 13 cents per share, related to early retirement of debt. Share repurchases Share Repurchase A program by which a company buys back its own shares from the marketplace, reducing the number of outstanding shares. This is usually an indication that the company's management thinks the shares are undervalued. . Weighted average fully diluted shares outstanding for the full year 1995 decreased 15 percent from the prior year. During the first two months of 1995, Conseco repurchased 2.0 million of its common shares at a cost of $92.4 million, leaving approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 20.3 million shares currently outstanding. No shares have been repurchased since February February: see month. 1995; Conseco terminated its share repurchase program in April 1995. Conseco, headquartered in Carmel, Ind., is a 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. holding company. How to find out more about Conseco Electronic - All Conseco news releases are issued through Business Wire (BW), an international wire service. You may access BW news releases through more than 100 electronic channels, including major consumer information services See Information Systems. , short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. database services, historical/business database services and financial database services/stock quote systems. BW news releases and Conseco's filings with the Securities and Exchange Commission are also available on the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the through the major consumer information services. Print - Conseco news releases and certain other investor publications (including our investor guide, which contains additional statistical data) are available at no charge via Fax--call Conseco Fax-on-Demand for a menu of available materials. To receive annual reports, 10-Ks, 10-Qs and other lengthy documents by mail, or to be placed on our permanent mailing list An automated e-mail system on the Internet, which is maintained by subject matter. There are thousands of such lists that reach millions of individuals and businesses. New users generally subscribe by sending an e-mail with the word "subscribe" in it and subsequently receive all new , call Conseco's investor hotline 1. (company) Hotline - Hotline Communications Ltd.. 2. (messaging) Hotline - Hotline Connect. . Voice - You may also call Conseco's investor hotline to speak with an investor relations Investor relations The process by which the corporation communicates with its investors. representative or to hear prerecorded pre·re·cord tr.v. pre·re·cord·ed, pre·re·cord·ing, pre·re·cords To record (a television program, for example) at an earlier time for later presentation or use. Adj. 1. messages on a number of topics, including daily stock trading, news releases and financial results. Investor Hotline: (800) 4-CONSECO (in Indianapolis Indianapolis (ĭn'dēənă`pəlĭs), city (1990 pop. 731,327), state capital and seat of Marion co., central Ind., on the White River; selected 1820 as the site of the state capital (which was moved there in 1825), inc. 1847. : 817-6777) Fax-on-Demand: (800) 344-6452 E-Mail: ir@conseco.com -0-
Conseco, Inc. (NYSE: CNC)
Financial Highlights (in millions, except per-share amounts) (1)
Quarter Ended Dec. 31: Year Ended Dec. 31:
1995 1994 (2) 1995 1994
_____________________________________________________________________
Operating earnings (3) $42.0 $33.5 $131.3 $151.7
Trading income (losses),
net of related costs
and taxes (0.3) (0.9) (0.8) (0.3)
Realized gains (losses),
net of related costs,
amortization and taxes 0.8 (11.5) 4.9 (20.2)
Merchant banking income
(losses) 12.2 (19.2) 87.1 23.2
Extraordinary charge,
net of tax (2.1) (1.6) (2.1) (4.0)
_____________________________________________________________________
Net income $52.6 $0.3 $220.4 $150.4
_____________________________________________________________________
Per common share-primary:
Weighted average shares
(in millions) 21.5 24.9 21.5 26.3
Operating earnings (3) $1.74 $1.17 $5.28 $5.12
Trading income (losses),
net of related costs and
taxes (0.02) (0.04) (0.04) (0.01)
Realized gains (losses),
net of related costs,
amortization and taxes 0.04 (0.46) .20 (0.76)
Merchant banking income
(losses) 0.57 (0.78) 4.05 0.80
Extraordinary charge,
net of tax (0.10) (0.06) (0.10) (0.15)
_____________________________________________________________________
Net income $2.23 $(0.17) $9.39 $5.00
_____________________________________________________________________
Per common share-fully diluted:
Weighted average shares
(in millions) 26.1 24.9 26.1 30.9
_____________________________________________________________________
Operating earnings (3) $1.60 $1.17 $5.03 $4.93
Trading income (losses),
net of related costs and
taxes (0.01) (0.04) (0.03) (0.02)
Realized gains (losses),
net of related costs,
amortization and taxes 0.03 (0.46) 0.19 (0.66)
Merchant banking income
(losses) 0.47 (0.78) 3.33 0.75
Extraordinary charge,
net of tax (0.08) (0.06) (0.08) (0.13)
_____________________________________________________________________
Net income $2.01 $(0.17) $8.44 $4.87
_____________________________________________________________________
Excluding SFAS 115 (4) :
Return on common equity 28% (3%) 33% 19%
Assets (in millions) $16,918.8 $11,025.2
Shareholders' equity
(in millions) $999.1 $884.7
Book value per share $35.32 $27.10
(1) 1994 includes the operations of Western National Life, a wholly owned subsidiary until Feb. 15, 1994, when Conseco sold a 60 percent stake. Conseco sold its remaining 40 percent interest in Western on Dec. 23, 1994. 1995 includes Conseco's share of American Life, acquired by Conseco Capital Partners II, L.P. on Sept. 29, 1994. (2) 4Q94 primary shares and EPS are identical to the fully diluted figures because the assumed conversion of convertible preferred stock would have been antidilutive in that period. (3) Excludes trading income (losses), realized investment gains (losses), merchant banking income and extraordinary charge. (4) The amounts disclosed below are before adjusting for the fair value of fixed maturity investments.
Conseco, Inc.
Consolidated Balance Sheet (in millions)
At Dec 31, At Dec. 31,
1995 1994
(Unaudited) (Audited)
_____________________________________________________________________
Assets
Investments:
Actively managed fixed maturities at
fair value $12,963.3 $7,067.1
Equity securities at fair value 36.6 39.6
Mortgage loans 339.9 142.6
Credit-tenant loans 259.1 69.0
Policy loans 307.6 175.1
Investment in CCP Insurance, Inc. 0.0 195.4
Other invested assets 91.2 68.7
Trading account securities at fair value 0.0 21.6
Short-term investments 189.9 295.4
Assets held in separate accounts 227.0 84.9
_____________________________________________________________________
Total investments 14,414.6 8,159.4
Accrued investment income 207.8 126.3
Reinsurance receivables 84.8 45.5
Income taxes 0.0 195.2
Cost of policies purchased 1,030.7 1,021.6
Cost of policies produced 391.0 300.7
Goodwill, net of accumulated amortization 894.1 687.7
Property and equipment at cost, net of
accumulated depreciation 88.7 89.1
Securities segregated for future redemption
of preferred stock of a subsidiary 39.2 36.2
Other assets 146.6 150.2
_____________________________________________________________________
Total assets $17,297.5 $10,811.9
_____________________________________________________________________
Liabilities and Shareholders' Equity Liabilities Insurance liabilities $13,378.4 $8,537.4 Income tax liabilities 93.3 0.0 Investment borrowings 298.1 0.0 Other liabilities 329.6 318.0 Liabilities related to separate accounts 227.0 84.9 Notes payable of Conseco 871.4 191.8 Notes payable of Partnership II entities, not direct obligations of Conseco 283.2 331.1 Notes payable of Bankers Life Holding Corp., not direct obligations of Conseco 301.5 280.0 _____________________________________________________________________ Total liabilities 15,782.5 9,743.2 _____________________________________________________________________ Minority interest 403.3 321.7 _____________________________________________________________________ Shareholders' equity Preferred stock 283.5 283.5 Common stock and additional paid-in capital 157.2 165.8 Unrealized appreciation (depreciation) of securities, net Fixed maturities 112.6 (137.7) Equity securities 0.1 (2.0) Retained earnings 558.3 437.4 _____________________________________________________________________ Total shareholders' equity 1,111.7 747.0 _____________________________________________________________________ Total liabilities and shareholders' equity $17,297.5 $10,811.9 _____________________________________________________________________
Conseco, Inc.
Consolidated Statement of Operations (in millions) (1)
Quarter Ended Dec. 31: Year Ended Dec. 31:
1995 1994 1995 1994
_____________________________________________________________________
Revenues
Insurance policy income $361.7 $331.4 $1,465.0 $1,285.6
Investment activity:
Net investment income 292.1 172.7 1,142.6 385.7
Net trading income (losses) (0.3) (1.3) 2.5 (4.9)
Net realized gains (losses) 108.6 (8.2) 186.4 (25.6)
Fee revenue 10.3 15.5 33.9 58.0
Equity in earnings of
CCP Insurance, Inc. 0.0 2.5 0.0 24.7
Equity in earnings of
Western National Corp. 0.0 1.3 0.0 40.2
Merchant banking income 15.2 15.5 15.2 80.8
Other income 1.6 4.6 9.7 17.5
_____________________________________________________________________
Total revenues 789.2 534.0 2,855.3 1,862.0
_____________________________________________________________________
Benefits and expenses Insurance policy benefits 260.7 235.3 1,075.5 915.4 Change in future policy benefits 3.6 11.1 32.0 42.6 Interest expense on annuities and financial products 152.6 82.8 585.4 134.7 Interest expense on notes payable 35.5 21.9 119.4 59.3 Interest expense on investment borrowings 3.0 1.5 22.2 7.7 Amortization related to operations 45.3 38.0 203.6 133.3 Amortization related to realized gains and losses 82.0 (2.7) 126.6 (5.3) Expenses incurred in conjunction with terminated acquisition 0.0 35.8 0.0 35.8 Other operating costs and expenses 73.9 61.7 272.1 214.1 _____________________________________________________________________ Total benefits and expenses 656.6 485.4 2,436.8 1,537.6 _____________________________________________________________________ Income before income taxes, minority interest and extraordinary charge 132.6 48.6 418.5 324.4 Income tax expense 52.7 25.9 87.0 111.0 _____________________________________________________________________ Income before minority interest and extraordinary charge 79.9 22.7 331.5 213.4 Less minority interest 25.2 20.8 109.0 59.0 _____________________________________________________________________ Income before extraordinary charge 54.7 1.9 222.5 154.4 Extraordinary charge on extinguishment of debt, net of taxes and minority interest 2.1 1.6 2.1 4.0 _____________________________________________________________________ Net income 52.6 0.3 220.4 150.4 Less preferred stock dividends 4.6 4.6 18.4 18.6 _____________________________________________________________________ Earnings applicable to common stock $48.0 $(4.3) $202.0 $131.8 _____________________________________________________________________ (1) On Feb. 15, 1994, Conseco sold a majority interest in Western National Life (previously a wholly owned subsidiary). Beginning with 1Q94, therefore, Western is reported on the equity basis. Conseco sold its remaining 40 percent interest in Western on Dec. 23, 1994. 1995 includes the operations of American Life, which was acquired by Partnership II on Sept. 29, 1994. The first six months of 1995 have been restated to include CCP on a consolidated basis. The restatement had no effect on net income. A supplement to Conseco's news release of Feb. 12, 1996
Conseco, Inc.
Business Profile
Conseco conducts four business activities. Results from the
first three--(1) life insurance operations, including senior market,
annuity and "other life insurance" activities; (2) fee-based
operations; and (3) partnership operations, including Conseco's share
of the profits of the life insurance companies owned by Conseco
Capital Partners II, L.P. (Partnership II), Conseco's acquisition
partnership--are included in operating earnings. Results in the
fourth, merchant banking operations, are excluded from operating
earnings.
Life insurance operations
Senior market operations include the activities of Bankers Life
Holding Corp. (NYSE:BLH), in which Conseco holds a 90.5 percent
equity interest. BLH's principal operating company, Bankers Life and
Casualty, provides Medicare supplement, long-term care, life
insurance, annuities and other health products to America's seniors.
Bankers distributes its products through approximately 200 branch
offices and 3,300 career agents.
Annuity operations include the activities of the former CCP
Insurance companies--Great American Reserve Insurance and Beneficial
Standard Life--which became wholly owned subsidiaries of Conseco in
August 1995. These companies market, issue and administer annuity,
life and employee-benefit-related insurance products through two
cost-effective distribution channels: (1) approximately 3,000
educator market specialists, who sell tax-qualified annuities and
certain employee benefit-related insurance products primarily to
school teachers and administrators; and (2) approximately 9,000
professional independent producers, who sell various annuity and life
insurance products aimed principally at the retirement market.
Other life insurance operations include the activities of
Conseco's other wholly owned life insurance subsidiaries--Bankers
National Life, National Fidelity Life and Lincoln American Life.
These companies have profitable in-force blocks of annuity and life
products, but do not currently market their products to new
customers.
Fee-based operations
Conseco's subsidiaries provide various services to affiliated and
unaffiliated clients. Conseco Capital Management manages $25 billion
of invested assets for affiliated and unaffiliated clients.
MDS/Bankmark provides marketing services to financial institutions
related to the distribution of insurance and investment products.
Conseco Risk Management distributes property/casualty insurance
products as an independent agency. Conseco Mortgage Capital
originates and services mortgages. Other subsidiaries provide policy
administration, data processing, product marketing and executive
management services, as well as financial services to Conseco's
partnership.
Partnership operations
Conseco and other limited partner investors formed Conseco
Capital Partners II, L.P. (Partnership II) in 1994 for the purpose
of acquiring life insurance companies. Partnership II acquired
American Life Group (AGP) in September 1994. AGP's principal
operating company, American Life and Casualty, markets, issues and
administers various annuity and life insurance products aimed
principally at the retirement market. Partnership operations
include: (1) Conseco's share of the profits of the life insurance
companies owned by Partnership II; and (2) incentive compensation
fees payable to Conseco if Partnership II generates returns in excess
of prescribed targets.
Merchant banking operations
Conseco Private Capital Group and Conseco Global Investments (two
wholly owned subsidiaries) make direct strategic investments in
growing companies, providing these firms with the capital or
financing they need to continue their growth, make acquisitions or
realize the potential of their businesses. When these investments or
partnership properties are sold, Conseco reports the related
investment gains in this segment. Merchant banking results,
therefore, vary from quarter to quarter.
CONTACT: Conseco, Inc., Carmel Jim Rosensteele, 317/817-2893 E-Mail: ir@conseco.com |
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