SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: February 4, 1998
CONSECO, INC.
State of Incorporation:
Indiana
Commission File Number IRS Employer Id. Number
No. 1-9250 No. 35-1468632
Address of Principal Executive Offices:
11825 North Pennsylvania Street
Carmel, Indiana 46032
Telephone No.
(317) 817-6100
<PAGE>
CONSECO, INC. AND SUBSIDIARIES
ITEM 5. OTHER EVENTS.
On February 4, 1998, Conseco, Inc. ("Conseco") announced the offering of
$250.0 million of 6.4 percent Notes (the "Notes") due February 10, 2003. The
Notes were priced at 99.928 percent of par to yield 6.417 percent. Interest is
paid semi-annually on February 10 and August 10 of each year. The Notes are
redeemable in whole or in part at the option of Conseco at any time, at a
redemption price equal to the sum of (a) the greater of: (i) 100 percent of the
principal amount; and (ii) the sum of the present values of the remaining
scheduled payments of principal and interest thereon from the redemption date to
the maturity date, computed by discounting such payments, in each case, to the
redemption date on a semi-annual basis at the treasury rate (as defined in the
Notes) plus 25 basis points, plus (b) accrued and unpaid interest on the
principal amount thereof to the date of redemption. The Notes are unsecured and
rank pari passu with all other unsecured and unsubordinated obligations of
Conseco.
Proceeds from the offering of approximately $248.0 million (after original
issue discount and other associated costs) will be used by Conseco for the
repayment of a portion of the bank debt incurred to finance the acquisition of
Washington National Corporation and for the repayment of commercial paper.
2
<PAGE>
CONSECO, INC. AND SUBSIDIARIES
ITEM 7(c). EXHIBITS.
12.1 Computation of Ratios of Earnings to Fixed Charges, Preferred Dividends
and Distributions on Company-Obligated Mandatorily Redeemable Preferred
Securities of Subsidiary Trusts
3
<PAGE>
CONSECO, INC. AND SUBSIDIARIES
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: February 6, 1998
CONSECO, INC.
By: /s/ ROLLIN M. DICK
----------------------
Rollin M. Dick
Executive Vice President
and Chief Financial Officer
4
<TABLE>
<CAPTION>
CONSECO, INC. AND SUBSIDIARIES
Exhibit 12.1
Computation of Ratio of Earnings to Fixed Charges,
Preferred Dividends and Distributions on Company-Obligated Mandatorily
Redeemable Preferred Securities of Subsidiary Trusts
(Dollars in millions)
Nine Months Ended
Year Ended December 31, September 30,
---------------------------------------------------- ---------------------
1992 1993 1994 1995 1996 1996 1997
-------- -------- -------- -------- -------- -------- ------
<S> <C> <C> <C> <C> <C> <C> <C>
Pretax income from operations:
Net income.................................... $169.5 $ 297.0 $150.4 $ 220.4 $ 252.4 $ 174.5 $ 395.9
Add income tax expense........................ 124.6 223.1 111.0 87.0 179.8 134.1 261.8
Add extraordinary charge on
extinguishment of debt...................... 5.3 11.9 4.0 2.1 26.5 18.6 6.2
Add minority interest......................... 30.6 78.2 59.0 109.0 34.9 25.8 37.9
Less equity in undistributed
earnings of CCP Insurance, Inc.............. (15.8) (36.6) (23.8) - - - -
Less equity in undistributed
earnings of Western National Corp........... - - (37.2) - - - -
Less equity in undistributed
earnings of Life Re......................... (11.3) - - - - - -
------ -------- ------ -------- -------- ------- --------
Pretax income........................... 302.9 573.6 263.4 418.5 493.6 353.0 701.8
------ -------- ------ -------- -------- ------- --------
Add fixed charges:
Interest expense on annuities and financial
products................................... 506.8 408.5 134.7 585.4 668.6 445.9 518.0
Interest expense on long-term debt,
including amortization...................... 46.2 58.0 59.3 119.4 108.1 84.6 76.0
Interest expense on investment borrowings..... 8.8 10.6 7.7 22.2 22.0 15.1 17.7
Other ....................................... .8 .6 .9 1.0 .9 .7 .6
Portion of rental(1).......................... 2.0 3.9 6.2 6.9 8.0 5.8 6.8
------ -------- ------ -------- -------- ------ --------
Fixed charges............................. 564.6 481.6 208.8 734.9 807.6 552.1 619.1
------ -------- ------ -------- -------- ------ --------
Adjusted earnings......................... $867.5 $1,055.2 $472.2 $1,153.4 $1,301.2 $905.1 $1,320.9
====== ======== ====== ======== ======== ====== ========
Ratio of earnings to fixed charges........ 1.54X 2.19X 2.26X 1.57X 1.61X 1.64X 2.13X
===== ===== ===== ===== ===== ===== =====
Ratio of earnings to fixed charges,
excluding interest on annuities and
financial products .................... 6.24X 8.85X 4.55X 3.80X 4.55X 4.32X 7.94X
===== ===== ===== ===== ===== ===== =====
Fixed charges................................. $564.6 $481.6 $208.8 $ 734.9 $ 807.6 $552.1 $619.1
Add dividends on preferred stock (multiplied
by the rate of pretax income to income
before minority interest and extraordinary
charge)..................................... 13.1 34.6 33.2 36.0 62.3 48.5 37.0
------ -------- ------ -------- -------- ------ ------
Adjusted fixed charges.................... $577.7 $ 516.2 $242.0 $ 770.9 $ 869.9 $600.6 $656.1
====== ======== ====== ======== ======== ====== ======
Adjusted earnings......................... $867.5 $1,055.2 $472.2 $1,153.4 $1,301.2 $905.1 $1,320.9
====== ======== ====== ======== ======== ====== ========
Ratio of earnings to fixed
charges and preferred dividends........ 1.50X 2.04X 1.95X 1.50X 1.50X 1.51X 2.01X
===== ===== ===== ===== ===== ===== =====
Ratio of earnings to fixed charges
and preferred dividends, excluding
interest on annuities and financial
products............................... 5.09X 6.00X 3.14X 3.06X 3.14X 2.97X 5.81X
===== ===== ===== ===== ===== ===== =====
(continued on following page)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CONSECO, INC. AND SUBSIDIARIES
Computation of Ratio of Earnings to Fixed Charges,
Preferred Dividends and Distributions on Company-Obligated Mandatorily
Redeemable Preferred Securities of Subsidiary Trusts, continued
(Dollars in millions)
Nine Months Ended
Year Ended December 31, September 30,
---------------------------------------------------- ---------------------
1992 1993 1994 1995 1996 1996 1997
-------- -------- -------- -------- -------- -------- ------
<S> <C> <C> <C> <C> <C> <C> <C>
Adjusted fixed charges........................ $577.7 $ 516.2 $242.0 $ 770.9 $ 869.9 $600.6 $656.1
Add distributions on Company-obligated
mandatorily redeemable preferred securities
of subsidiary trusts........................ - - - - 5.6 - 53.2
------ -------- ------ -------- -------- ------ ------
Fixed charges............................. $577.7 $ 516.2 $242.0 $ 770.9 $ 875.5 $600.6 $709.3
====== ======== ====== ======== ======== ====== ======
Adjusted earnings......................... $867.5 $1,055.2 $472.2 $1,153.4 $1,301.2 $905.1 $1,320.9
====== ======== ====== ======== ======== ====== ========
Ratio of earnings to fixed charges,
preferred dividends and distributions
on Company-obligated mandatorily
redeemable preferred securities
of subsidiary trusts................... 1.50X 2.04X 1.95X 1.50X 1.49X 1.51X 1.86X
===== ===== ===== ===== ===== ===== =====
Ratio of earnings to fixed charges,
preferred dividends and distributions
on Company-obligated mandatorily
redeemable preferred securities of
subsidiary trusts, excluding interest
on annuities and financial products.... 5.09X 6.00X 3.14X 3.06X 3.06X 2.97X 4.20X
===== ===== ===== ===== ===== ===== =====
<FN>
(1) Interest portion of rental is assumed to be 33 percent.
</FN>
</TABLE>
