Slide 1: Fourth Quarter 2008 Financial and Operating Results
Fourth Quarter 2008 Financial and Operating Results Conseco, Inc. March 31, 2009
Slide 2: Forward-Looking Statements
Forward-Looking Statements Cautionary Statement Regarding Forward-Looking Statements. Our statements, trend analyses and other information contained in these materials relative to markets for Conseco’s products and trends in Conseco’s operations or financial results, as well as other statements, con
Slide 3: Non-GAAP Measures
Non-GAAP Measures This presentation contains the following financial measures that differ from the comparable measures under Generally Accepted Accounting Principles (GAAP): operating earnings measures and earnings before net realized investment gains (losses) and corporate interest and taxes. Recon
Slide 4: Q4 2008 Update
Q4 2008 Update CNO Only change from preliminary financial results released on March 2: $45 million increase in DTA valuation allowance Reflects the higher debt servicing costs after the amendment to our Credit Facility on March 30, 2009 Resolved auditors’ concerns regarding liquidity and debt covena
Slide 5: Q4 2008 Financial Summary
Q4 2008 Financial Summary CNO Continued profitability in all three insurance segments, with total Q4 2008 EBIT of $78.1 million Full-year EBIT of $291.3 million, up 58% over 2007 $101.6 million quarterly sales for CNO, up 16% over Q4 2007 Bankers sales up 25% Colonial Penn sales up 16% CIG sales dow
Slide 6: Q4 2008 Summary of Results
Q4 2008 Summary of Results CNO ($ millions, except per share amounts) Pre-Tax After Tax* EPS Bankers Life $40.0 Colonial Penn 6.7 Conseco Insurance Group 31.5 Corporate operations, interest expense and gain on extinguishment of debt 5.9 Income before net realized investment losses** 84.1 $3.7 *** $0
Slide 7: Q4 Earnings Consolidated
Q4 Earnings CNO Consolidated ($ millions) Q4 2007 Q1 2008 Q2 2008 Q3 2008 Q4 2008 Bankers Life $58.3 $29.1 $34.6 $67.8 $40.0 Colonial Penn (0.2) 3.7 8.3 6.5 6.7 Conseco Insurance Group 9.6 23.3 32.3 34.2 31.5 Corporate operations, excluding interest expense (2.9) (6.7) (16.2) (3.7) (0.1) Total EBIT*
Slide 8: Summary of Direct Corporate Obligations
Summary of Direct Corporate Obligations CNO ($ millions) Credit Facility $856.8 Revolving Credit Facility 55.0 6% Senior Note 125.0 3.5% Convertible Debentures 293.0 Unamortized Discount on Convertible Debentures (1.1) Total Direct Corporate Obligations $1,328.7 8
Slide 9: Impact of Key Debt Covenant Changes
Impact of Key Debt Covenant Changes CNO ($ millions) Modified Pro Forma Margin for Adverse Q4 2007 Q3 2008 Q4 2008 Covenant Levels** Development from 12/31/08 Levels*** Debt/Capital Ratio* Reduction to shareholders’ equity of Covenant Maximum 30.0% 30.0% 30.0% 32.5% approximately $615 million or add
Slide 10: Credit Facility Amendment
Credit Facility Amendment CNO Interest rate increased from LIBOR +200 bps to the greater of LIBOR +400 bps or 6.5%, plus 1% Payment-In-Kind Other modifications, as described in Form 10-K 10
Slide 11: 2009 Liquidity Projection – Revised for Amendment to Credit Facility
2009 Liquidity Projection – Revised for Amendment to Credit Facility CNO ($ millions) After Reflecting Amendment Cash Balance 12/31/08 $59.0 Sources Dividends 60.0 Surplus Debenture Interest 44.5 Management and Investment Fees 70.0 Amount Received in Conjunction with the Termination of Commission Fi
Slide 12: CNO Summary
CNO Summary CNO Key differences between Conseco and the rest of the industry: Our sales are continuing to grow Our products are simple and straightforward, and entail less risk than products designed for higher-net-worth customers Our market is sufficiently different from most insurers Capital manag
Slide 13: Questions and Answers
S CONSECO Questions and Answers
Slide 14: Appendix
S CONSECO. Appendix
Slide 15: Information Related to Certain Non-GAAP Financial Measures
Information Related to Certain Non-GAAP Financial Measures The following provides additional information regarding certain non-GAAP measures used in this presentation. A non-GAAP measure is a numerical measure of a company’s performance, financial position, or cash flows that excludes or includes am
Slide 16: Information Related to Certain Non-GAAP Financial Measures
Information Related to Certain Non-GAAP Financial Measures A reconciliation of net income applicable to common stock to the net operating income (and related per share amounts) is as follows (dollars in millions, except per share amounts): Q4 2007 Q1 2008 Q2 2008 Q3 2008 Q4 2008 Net income (loss) ap