Pri: I am not so sure CNC has will have so much cash flow/free cash:
flow. If you look at the CF statement from the first nine months of
97 in latest 10Q:
> CONSECO, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(Dollars in millions)
(unaudited)
Nine months ended
September 30,
------------------------
1997 1996
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net income............................................................................. $ 395.9 $ 174.5
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization and depreciation........................................................ 395.2 190.7
Income taxes......................................................................... 94.6 (4.4)
Insurance liabilities................................................................ (81.8) 58.7
Amounts added to annuity and financial product policyholder account balances......... 588.6 474.4
Fees charged to insurance liabilities................................................ (318.2) (158.9)
Accrual and amortization of investment income........................................ (34.6) (27.2)
Deferral of cost of policies produced................................................ (442.7) (237.0)
Nonrecurring items................................................................... 71.7 (30.4)
Minority interest.................................................................... - 17.3
Extraordinary charge on extinguishment of debt....................................... 9.5 28.6
Net investment gains................................................................. (137.3) (9.8)
Other................................................................................ (16.9) (34.2)
--------- ---------
Net cash provided by operating activities.......................................... 524.0 442.3
--------- ---------
Cash flows from investing activities:
Sales of investments................................................................... 11,453.1 4,954.0
Maturities and redemptions............................................................. 450.2 521.0
Purchases of investments............................................................... (12,673.0) (5,852.8)
Purchase of Life Partners Group, Inc................................................... - (9.5)
Purchase of property and casualty insurance brokerage businesses....................... - (12.0)
Purchase of additional shares of American Life Holdings, Inc........................... - (165.0)
Purchase of preferred stock of American Life Holdings, Inc............................. - (12.6)
Purchase of mandatorily redeemable preferred stock of subsidiary....................... (98.4) -
Repurchase of equity securities by Bankers Life Holding Corporation.................... - (27.7)
Cash held by Life Partners Group, Inc. before consolidation............................ - 79.1
Acquisition of Capitol American Financial Corporation, net of cash held at date
of merger........................................................................... (522.1) -
Cash held by Pioneer Financial Services, Inc. at date of merger........................ 44.2 -
Acquisition of Colonial Penn Life Insurance Company and Providential Life Insurance
Company and certain other assets, net of cash held at date of purchase............... 11.3 -
Other.................................................................................. (5.0) (56.5)
--------- ---------
Net cash used by investing activities ............................................. (1,339.7) (582.0)
--------- ---------
Cash flows from financing activities:
Issuance of Company-obligated mandatorily redeemable preferred stock of
subsidiary trusts.................................................................... 296.7 -
Issuance of shares related to stock options and employee benefit plans ............... 46.4 16.3
Issuance of convertible preferred stock................................................ - 257.7
Issuance of commercial paper, net...................................................... 492.9 -
Issuance of notes payable.............................................................. 1,858.4 853.3
Redemption of preferred shares......................................................... - (.3)
Payments on notes payable.............................................................. (1,554.8) (987.5)
Payments to repurchase equity securities of Conseco.................................... (496.8) (21.5)
Investment borrowings.................................................................. 925.5 169.8
Deposits to insurance liabilities...................................................... 1,426.7 1,266.5
Withdrawals from insurance liabilities................................................. (1,629.2) (1,366.4)
Charge related to induced conversion of convertible preferred stock.................... (13.2) -
Dividends paid ........................................................................ (44.9) (25.8)
--------- ---------
Net cash provided by financing activities.......................................... 1,307.7 162.1
--------- ---------
Net increase in short-term investments............................................. 492.0 22.4
Short-term investments, beginning of period............................................... 281.6 189.9
--------- ---------
Short-term investments, end of period..................................................... $ 773.6 $ 212.3
========= =========
Notice the item in cash flow from operations titled :
"Amounts added to annuity and financial product policyholder account balances"
I am sorry to tell you these cash does not belong to CNC stockholders
but to the policy and annuity holders. Take them away and you are left with.....
Pancho |
