Read the CNC quarterly report? It's a freaking SHAM!<NG>
biz.yahoo.com]
Here are a few selected gems:
Non-operating items
The year 2000 was used to restructure the debt of Conseco's holding company and rebuild the business model of Conseco Finance so that the company could have a future. This year, 2001, is being used to increase revenues, business productivity and customer service, as well as to make those adjustments to the balance sheet which are necessary to permit consistent operating performance in the years ahead.
As has been the case since we began this turnaround in the 3rd quarter of 2000, we are reporting to you a list of non-operating or special items; the result is a stronger balance sheet. Obviously, these items are factored into the net income that we report, so why do we report them ``below the operating line''? The specific reason differs for each item, but the one thing they all have in common is that they are ``noise'' in the two-part business harmony we are building in the NEW Conseco. The value we are building for shareholders is in the earnings of the Insurance and Finance businesses that we depicted at the outset. Going forward, we want everyone to be able to make an ``apples to apples'' comparison about operating performance.In order to generate a consistent view of operating performance, we have walled off the issues that either don't belong in operations or that would distort the comparability of the data going forward. The following six items net to nearly $100 million of charges after taxes, resulting in a net loss in the quarter of $(30.3) million and net income year to date of $49.9 million (after goodwill charges).
UFB! If they're not to be part of the company, why not SELL the freaking division and write it off properly, you CROOKS! Then and ONLY then take the write off, not a year or two (or forever) ahead of time....
And then there's this:
Annuities write-down. We are taking an after-tax charge of $22.8 million to unlock investment yield assumptions in our annuity business. This was necessary to more accurately reflect the current economics of the business. (As our attention has turned this year to the operating mechanics of each of our business units, we are fully reviewing our assumptions and, when deemed appropriate, modifying them to better match our current expectations of the future economic environment.) This kind of change is an operating risk of the annuities business, and, of course, it will be treated as part of our net income line. We have chosen to isolate it with these special items because it is clearly one of those issues anticipated when we gave our earnings guidance, and because including it in operating earnings would distort the comparability of the Insurance segment earnings going forward. NEW Conseco's first year is 2001, and we believe it is important that that base year not be distorted with such ``noise''.
Noise? You already included it in the downward revision of your guidance. Now that it's report time, it's split below the line, all the better to trumpet your alleged "profitability". Face facts, CNC made bad investments in their annuity portfolio (which is a business they are supposed to be continuing forward in). When it's bad it's "noise", when it's good it's "revenues" and "earnings". That's the REAL game, isn't it Mr. Wendt?
And of course, what would any subprime lender be without there (now familliar) CDO write-offs:
Investment portfolio realized losses. We are taking an after-tax charge of $22.0 million for realized investment losses -- primarily losses on collaterialized debt obligations. Several financial service companies have taken similar charges in recent days. The losses result from two factors: (i) new more stringent accounting rules that require the securities to be written down; and (ii) increases in default rates related to the types of bonds and loans which serve as the collateral for these securities.
Hmm, wonder how much more of this shite is left in the 'ole portfolio? Sure won't find out from this report!
Remember this line for next quarter's report...should come back to haunt them big time:
The figures shown as balance sheet adjustments for 2Q01, are based on aggregate assumptions in place at the end of June, 2001. Further reductions in these items may be necessary in future quarters depending on actual results. However, we are doing everything possible to fully complete these adjustments during this fiscal year and are not at all concerned that further adjustments will have a significant impact on our present net worth of $5.15 billion.
In short, just another day at the office for CNC! If they buy this POS, I'll soon be a-sellin', along with Carl Icahn and Rocker... |
