LYCOS RETRIEVER 
Conseco: Conseco Capital
built 635 days ago
Since coming on the insurance industry scene in the mid-1980s, the ups and downs of Conseco are nearly legendary. The near-mythic genesis of the insurance holding company is a tale frequently repeated - stories abound of founder Steve Hilbert and his partners going from farmhouse to farmhouse in Indiana to raise the initial venture capital to launch Conseco.The vision in the early 1980s was straightforward. Conseco aimed to provide a platform to acquire insurance companies and realize gains by consolidating their operations and drastically reducing overhead, leveraging anticipated gains from the streamlining of top-heavy insurance administrations made more efficient through the innovative introduction of computerized back-offices. Conseco developed a reputation for taking a "Dr. Death" approach to early acquisitions, lopping off managements and bringing all operational functions back to the company's home base in remote and little-known Carmel, Indiana.
Source:
Recognizing the concern that Conseco won't have enough cash to make $1.39 billion in 2002 debt payments, CEO Gary Wendt sought in Tuesday's earnings release to show investors where the necessary funds will come from. Problem is, Wendt ends up showing that Conseco's core businesses can't be relied upon to produce $1.39 billion in cash. As a result, he says as much as $410 million will come from a source mysteriously named "cash generation options, as necessary." He lists these options as: "Changes to operations, reinsurance and co-insurance, refinancing, noncore asset sales, noncore business line sales and other capital market alternatives."
Source:
Conseco's troubles started in 1998, when it paid $6bn for Green Tree Financial, a company that provided financing for mobile homes, a sector notorious for high charge-offs. "The glut of repossessed manufactured housing units in the market will continue to have negative implications in this business segment and overall stability in the economy remains uncertain," said CEO Gary Wendt, ex-GE Capital chief executive who was brought in to save the company in 2000..
Source:
In addition to the recent insider buying, Conseco boosted its stock repurchase program in May from $150 million to $350 million. The company said in its second-quarter earnings report that increased claims from the long-term care business took away capital that could have otherwise been used for the buyback, but I expect that management will likely soon start repurchasing treasury shares in addition to the recent insider buying for its own accounts, if it hasn't already.
Source:
Mr. Hacker joins Conseco from YRC Worldwide, where he was vice president and treasurer since 2006, and ... served as treasurer from 2004-2005. From 2005-2006, he was senior vice president, finance and administration, for Yellow Transportation, a YRC subsidiary. His 18-year financial career includes treasury management roles with NALCO Company, CNH Global and CNH Capital, and positions in bank lending with the Bank of Nova Scotia and Boulevard Bank.
Source:
MORE ABOUT
Conseco Capital