-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, YllBX3kgk4BSFrD3Wf+/rl73+iG0iFRpx0/Sm7EFVeHMm3A23M2Azma82Zmx3Xuj DpZoWfkWr/Be61DvMH+eXQ== 0000719241-95-000013.txt : 199506280000719241-95-000013.hdr.sgml : 19950628 ACCESSION NUMBER: 0000719241-95-000013 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19941231 FILED AS OF DATE: 19950627 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CONSECO INC ET AL CENTRAL INDEX KEY: 0000719241 STANDARD INDUSTRIAL CLASSIFICATION: LIFE INSURANCE [6311] IRS NUMBER: 351468632 STATE OF INCORPORATION: IN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 11-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-09250 FILM NUMBER: 95549372 BUSINESS ADDRESS: STREET 1: 11825 N PENNSYLVANIA ST CITY: CARMEL STATE: IN ZIP: 46032 BUSINESS PHONE: 3175736100 FORMER COMPANY: FORMER CONFORMED NAME: SECURITY NATIONAL OF INDIANA CORP DATE OF NAME CHANGE: 19840207 11-K 1 CONSECOSAVE FORM 11-K 12-31-94 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 11-K [ X ] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED] FOR THE FISCAL YEAR ENDED December 31, 1994 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED] FOR THE TRANSITION PERIOD FROM TO Commission file number: 1-9250 A. Full title of the plan and the address of the plan, if different from that of the issuer named below: ConsecoSave Plan B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive offices: Conseco, Inc. 11825 North Pennsylvania Street Carmel, Indiana 46032 2 CONSECOSAVE PLAN INDEX a) Financial Statements Report of Independent Accountants 3 Statement of Net Assets Available for Plan Benefits - December 31, 1994 and 1993 4 Statement of Changes in Net Assets Available for Plan Benefits for the years ended December 31, 1994 and 1993 5 Notes to Financial Statements 6 Supplemental schedules 11 b) Exhibit 23 Consent of Independent Accountants 3 REPORT OF INDEPENDENT ACCOUNTANTS To the Plan Trustees ConsecoSave Plan Carmel, Indiana We have audited the accompanying statement of net assets available for plan benefits of the ConsecoSave Plan (the "Plan") as of December 31, 1994 and 1993, and the related statement of changes in net assets available for plan benefits for the years then ended. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for plan benefits of the Plan as of December 31, 1994 and 1993, and the changes in net assets available for plan benefits for the years then ended, in conformity with generally accepted accounting principles. Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedules for the year ended December 31, 1994, are presented for the purpose of additional analysis and are not a required part of the basic financial statements but are supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The supplemental schedules have been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. Indianapolis, Indiana Coopers & Lybrand L.L.P. June 19, 1995 4 CONSECOSAVE PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS December 31, 1994 and 1993 1994 1993 ____ ____ Assets: Investments in ConsecoSave Trust portfolios at fair value: Corporate Bond Portfolio (cost: 1994 - $2,265,400; 1993 - $3,025,335) $2,139,302 $3,041,766 Interest Income Portfolio (cost: 1994 - $1,672,111; 1993 - $1,416,055) 1,672,111 1,416,055 Equity Portfolio (cost: 1994 - $808,858; 1993 - $440,349) 816,504 450,900 Money Market Portfolio (cost: 1994 - $243,849; 1993 - $218,834) 243,849 218,834 Government Securities Portfolio (cost: 1994 - $158,721; 1993 - $100,937) 158,129 100,634 Conseco Stock Fund (cost: 1994 - $2,374,261; 1993 - $1,832,586) 3,366,905 3,829,173 CCP Stock Fund (cost: 1994 - $166,232; 1993 - $109,075) 155,137 134,465 BLH Stock Fund (cost: 1994 - $46,491) 46,103 - __________ __________ Total investments 8,598,040 9,191,827 Employer contribution receivable 356,506 310,760 __________ __________ Net assets available for plan benefits $8,954,546 $9,502,587 ========== ========== The accompanying notes are an integral part of these financial statements.
5 CONSECOSAVE PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS for the years ended December 31, 1994 and 1993 1994 1993 ____ ____ Additions: Employee contributions $1,981,286 $2,260,288 Employer contributions 444,291 310,760 Interest and dividends 383,090 329,104 Net appreciation in fair value of investments - 1,019,124 __________ __________ Total additions 2,808,667 3,919,276 __________ __________ Deductions: Benefits paid 932,458 848,336 Custodial fees 2,043 3,962 Net depreciation in fair value of investments 1,336,618 - Transfer of assets to WesternSave Plan 1,085,589 - __________ __________ Total deductions 3,356,708 852,298 __________ __________ Net increase (decrease) in assets available for plan benefits (548,041) 3,066,978 Net assets available for plan benefits, beginning of year 9,502,587 6,435,609 __________ __________ Net assets available for plan benefits, end of year $8,954,546 $9,502,587 ========== ========== The accompanying notes are an integral part of these financial statements.
6 CONSECOSAVE PLAN NOTES TO FINANCIAL STATEMENTS 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The financial statements of the ConsecoSave Plan (the "Plan") have been prepared in accordance with generally accepted accounting principles. Investments The Plan provides the following eight investment options for voluntary employee contributions: Corporate Bond Portfolio, Interest Income Portfolio, Equity Portfolio, Money Market Portfolio, Government Securities Portfolio, Conseco Stock Fund, CCP Stock Fund and BLH Stock Fund. Employer contributions are invested solely in the Conseco Stock Fund. The Plan's investments are maintained either in a group annuity contract of a separate account of Bankers National Life Insurance Company ("BNL"), an indirect subsidiary of the Plan sponsor, Conseco, Inc. ("Conseco"), or are held by the Trustees of the Plan (in the case of affiliated stock portfolios). Investments in each portfolio are valued on the last business day of the New York Stock Exchange each month, with the exception of regional business holidays. The cost of investments sold is determined on the specific identification basis. Investment transactions are accounted for on the settlement date. The Corporate Bond Portfolio invests in investment-grade and high-yield corporate bonds. Securities for which representative market quotes are readily available are valued at the mid-day mean between the bid and ask prices as quoted by one or more dealers who make a market in such securities. For securities not actively traded, the estimated fair values are determined using values obtained from independent pricing services. The Interest Income Portfolio currently invests in seven guaranteed interest contracts. At the date of issuance, each guaranteed interest contract was issued by an affiliated life insurance company. Two of these contracts are with Western National Life Insurance Company ("Western National"). During 1994, Conseco sold its equity interest in Western National. Therefore, Western National is no longer an affiliated company. These contracts are carried at their accumulated contract values, which are cost adjusted for interest credited (at a blended rate of 6.58 percent and 6.81 percent at December 31, 1994 and 1993, respectively). Such carrying value approximates fair value at December 31, 1994 and 1993. The contracts, interest rates and expiration dates are as follows:
Interest Expiration Company rate date _______ ____ ____ Bankers National Life Insurance Company 6.90% December 31, 1996 Beneficial Standard Life Insurance Company 7.05% December 31, 1997 Beneficial Standard Life Insurance Company 5.00% December 31, 1998 Great American Reserve Insurance Company 6.90% December 31, 1996 (including contracts with Jefferson National Life Insurance Company which was merged into Great American Reserve Insurance Company) Western National Life Insurance Company 6.50% June 30, 1996 Western National Life Insurance Company 7.05% December 31, 1997
7 CONSECOSAVE PLAN NOTES TO FINANCIAL STATEMENTS The Equity Portfolio invests in selected equity securities and other securities having the investment characteristics of common stocks. The portfolio is widely diversified by both industry and number of issuers. Investment opportunities are sought among securities of larger, established companies, although securities of smaller, less well known companies may also be selected. Equity securities traded on a national securities exchange are valued at their closing market prices. Fixed income securities for which representative market quotes are readily available are valued at the mid-day mean between the bid and ask prices as quoted by one or more dealers who make a market in such securities. For fixed income securities not actively traded, the estimated fair values are determined using values obtained from independent pricing services. The Money Market Portfolio invests in money market instruments maturing within one year, with an average maturity of 120 days or less. Such investments are carried at amortized cost which approximates fair value. The Government Securities Portfolio invests in securities issued by the U.S. Government or an agency or instrumentality of the U.S. Government, including mortgage-backed securities. The U.S. Government securities which may be purchased include direct obligations issued by the U. S. Treasury, such as Treasury Bills, certificates of indebtedness, notes and bonds. Securities for which representative market quotes are readily available are valued at the mid-day mean between the bid and ask prices as quoted by one or more dealers who make a market in such securities. For securities not actively traded, the estimated fair values are determined using values obtained from independent pricing services. Short-term investments are carried at amortized cost which approximates fair value. The Conseco Stock Fund invests in the common stock of Conseco only. The return is based on changes in the market value of Conseco common stock and dividends received, which are reinvested in Conseco common stock. The Conseco common stock is valued at its closing market price. The CCP Stock Fund invests in the common stock of CCP Insurance, Inc. ("CCP") only. The return is based on changes in the market value of CCP common stock and dividends received, which are reinvested in CCP common stock. The CCP common stock is valued at its closing market price. The BLH Stock Fund invests in the common stock of Bankers Life Holding Corporation ("BLH") only. The return is based on changes in the market value of BLH common stock and dividends received, which are reinvested in BLH common stock. The BLH common stock is valued at its closing market price. The net appreciation (depreciation) in the fair value of investments consists of net realized gains (losses) and the net change in unrealized appreciation (depreciation) on those investments. Administrative Expenses Operating expenses and maintenance fees incurred during the years ended December 31, 1994 and 1993, except for investment custodial fees, were paid by BNL on behalf of the Plan. Future payment of such expenses by BNL is at Conseco's discretion. Income Taxes Under Sections 401(a) and 501(a), respectively, of the Internal Revenue Code, the Plan is qualified and the ConsecoSave Trust, a collective trust established under the Plan, is tax-exempt. 8 CONSECOSAVE PLAN NOTES TO FINANCIAL STATEMENTS 2. PLAN DESCRIPTION The Plan is a defined contribution plan pursuant to Section 401(k) of the Internal Revenue Code. It is subject to the provisions of the Employee Retirement Income Security Act of 1974 ("ERISA"). Established April 1, 1989, and amended and restated on January 1, 1993, the Plan includes all employees of Conseco and its subsidiaries (other than employees of BLH and The Statesman Group, Inc.) who have completed six consecutive months of service. Participation is voluntary and may begin on the first day of any calendar quarter. Employee contributions to the Plan are made through periodic payroll deductions in increments of 1.0 percent of the participant's annual earnings, not to exceed the lesser of 15.0 percent of the participant's annual earnings or the maximum amount specified by federal tax law ($9,240 and $8,994 in 1994 and 1993, respectively, for pre-tax contributions). Payroll deductions may be made on a pre-tax and after-tax basis. Participants must contribute at least 4.0 percent pre-tax in order to make concurrent after-tax contributions. Participants designate the portfolios to which their contributions are made. Conseco matches 50.0 percent of each participant's contribution up to a maximum of 4.0 percent of the participant's annual earnings. Additional amounts may be contributed by Conseco at the option of Conseco's Board of Directors. All Conseco contributions are made to the Conseco Stock Fund. Such contributions are made no later than the due date for filing Conseco's federal income tax return, including extensions. During 1994, Conseco made a discretionary contribution to the Plan totalling $81,668 which was allocated to each participant's accounts based on the participant's investment options at the date of the contribution. Participants are immediately vested in their voluntary contributions plus actual earnings thereon. Participants are fully vested in Conseco's contributions after five years of service. The non-vested interests of withdrawn participants (forfeitures) are used to reduce Conseco's future contributions. All benefits under the Plan are paid in cash in a lump sum, whole shares of Conseco, CCP, or BLH common stock, or any combination thereof. A participant may make withdrawals after age 59 1/2 and, under certain circumstances, early hardship withdrawals and after-tax withdrawals. Portfolio transfers are allowed quarterly in 5 percent increments. Effective January 1, 1993, loan provisions were added to the plan whereby participants may obtain temporary tax-free loans from the vested portion of their accounts, excluding employer contributions in Conseco stock, without any tax penalty. Repayment of both principal and interest is made to the participant's account via payroll deduction or may be repaid in a lump sum. Loans may be obtained for up to 50.0 percent of the vested balance to a maximum of $50,000. Only one loan may be outstanding at a time. The Plan is administered by the Plan Administrator, who is appointed by Conseco's Board of Directors and who establishes the rules and procedures necessary for the Plan's operations. Although it has not expressed any intent to do so, Conseco has the right to terminate the Plan. In the event the Plan is terminated, each participant's account shall be nonforfeitable with respect to both the participant's and employer's contributions and the net assets shall be set aside for payment to the participants. The foregoing description of the Plan provides only limited information. Participants should refer to the Summary Plan Description for a more complete description of the Plan's provisions. 3. TRANSFER OF PLAN ASSETS On April 1, 1994, the WesternSave Plan was established in connection with the sale of Conseco's majority ownership interest in Western National. The balances of the Equity Portfolio, the Money Market Portfolio, the Interest Income Portfolio, the Corporate Bond Portfolio and the Government Securities Portfolio attributable to Western National employees, totalling $1,085,589, were transferred to the WesternSave Plan. 9 CONSECOSAVE PLAN NOTES TO FINANCIAL STATEMENTS 4. CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS FOR THE YEAR ENDED DECEMBER 31, 1994, BY PORTFOLIO
Corporate Interest Money Government Conseco CCP BLH Bond Income Equity Market Securities Stock Stock Stock Portfolio Portfolio Portfolio Portfolio Portfolio Fund Fund Fund Total __________ _________ _________ _________ _________ ____ ____ ____ _____ Additions: Employee contri- butions $ 499,994 $ 482,821 $330,467 $ 78,035 $ 81,052 $ 377,859 $ 104,761 $26,297 $1,981,286 Employer contri- butions 22,261 19,240 6,710 3,750 2,312 386,393 3,625 - 444,291 Interest and divi- dends 204,313 107,050 10,866 9,124 8,058 41,474 1,189 1,016 383,090 __________ ___________ ________ ________ ________ __________ _________ _______ __________ Total add itions 726,568 609,111 348,043 90,909 91,422 805,726 109,575 27,313 2,808,667 __________ ___________ ________ ________ ________ __________ _________ _______ __________ Deductions: Benefits paid 235,597 272,115 86,679 51,750 23,127 241,530 16,731 4,929 932,458 Custodial fees 1,392 1 285 95 44 117 95 14 2,043 Net de- preciation (appreciation) in fair value of invest- ments 272,784 - (4,790) - 10,004 988,950 69,279 391 1,336,618 Transfer of assets to Western- Save Plan 119,418 279,007 98,686 114,073 23,058 451,347 - - 1,085,589 __________ ___________ ________ ________ ________ _________ _________ _______ __________ Total deduc- tions 629,191 551,123 180,860 165,918 56,233 1,681,944 86,105 5,334 3,356,708 __________ ___________ ________ ________ ________ _________ _________ _______ __________ Net employee transfers to (from) portfolios (999,841) 198,068 198,421 100,024 22,306 459,696 (2,798) 24,124 - __________ ___________ ________ ________ ________ _________ _________ _______ __________ Net increase (decrease) in net assets available for plan benefits (902,464) 256,056 365,604 25,015 57,495 (416,522) 20,672 46,103 (548,041) Net assets available for plan benefits, beginning of year 3,041,766 1,416,055 450,900 218,834 100,634 4,139,933 134,465 - 9,502,587 __________ ___________ ________ ________ ________ __________ _________ _______ ___________ Net assets available for plan benefits, end of year $2,139,302 $1,672,111 $816,504 $243,849 $158,129 $3,723,411 $155,137 $46,103 $8,954,546 ========== =========== ======== ======== ======== ========== ======== ======= ==========
10 CONSECOSAVE PLAN NOTES TO FINANCIAL STATEMENTS 5. SUBSEQUENT EVENTS In 1995, the Plan was amended. Changes to the Plan include: (i) eligibility to participate in the Plan begins in the quarter following an employee's date of employment; (ii) participants must contribute 5 percent pre-tax in order to make after-tax contributions; and (iii) with respect to Conseco's contributions to the Plan, participants employed after January 1, 1995, are subject to a graduated vesting schedule of 20 percent for each year of service after the second year of service. The foregoing description of changes to the Plan provides only limited information. Participants should refer to the Plan and to the Summary Plan Description for a more complete description of the Plan's provisions. On May 21, 1995, Conseco and CCP announced that a definitive merger agreement had been reached under which Conseco will acquire the outstanding shares of CCP that Conseco does not already own. In the transaction, CCP would be merged into Conseco, with Conseco being the surviving corporation. Under the terms of the agreement, the non-Conseco stockholders of CCP would receive $23.25 in cash for each CCP share held. Current participants in the CCP Stock Fund may not increase their percentage allocation to the CCP Stock Fund and have the option to transfer their current balances to other portfolios. If the merger is consummated, the consideration received by each participant invested in the CCP Stock Fund will be transferred to the other investment options as directed by the participant. 11 CONSECOSAVE PLAN
ITEM 27 (A) - SCHEDULE OF ASSETS HELD FOR INVESTMENTS December 31, 1994 (c) (d) (e) Description of Investment Cost Current Value _________________________ ____ _____________ Assets Held in Common/Collective Trust ConsecoSave Trust $7,735,923 $8,598,040
12 CONSECOSAVE PLAN
ITEM 27 (D) - SCHEDULE OF REPORTABLE TRANSACTIONS For the Year Ended December 31, 1994 Current Expenses Value of Identity Description Number Incurred Cost Asset on of Party of of Purchase Selling with of Transaction Gain Involved Transactions Transactions Price Price Transaction Asset Date (Loss) ________ ____________ ____________ _____ _____ ___________ _____ ____ _____ ConsecoSave ConsecoSave Trust Corporate Bond Portfolio 51 $609,891 $ - $ - $609,891 $609,891 $ - ConsecoSave ConsecoSave Trust Interest Income Portfolio 51 922,871 - - 922,871 922,871 - ConsecoSave ConsecoSave Trust Equity Portfolio 51 583,577 - - 583,577 583,577 - ConsecoSave ConsecoSave Trust Conseco Stock Fund 51 867,442 - - 867,442 867,442 - ConsecoSave ConsecoSave Trust Corporate Bond Portfolio 28 - 1,206,895 - - 1,206,895 - ConsecoSave ConsecoSave Trust Interest Income Portfolio 28 - 501,749 - - 501,749 -
13 CONSECOSAVE PLAN SIGNATURE Pursuant to the requirements of the Securities and Exchange Act of 1934, the trustees of the Plan have duly caused this annual report to be signed on its behalf by the undersigned thereunto duly authorized. CONSECOSAVE PLAN Dated: June 26, 1995 By: /s/ROLLIN M. DICK ____________________ Rollin M. Dick, Trustee EX-23 2 EXHIBIT 23 CONSECOSAVE FORM 11-K 12/31/94 1 EXHIBIT 23 CONSENT OF INDEPENDENT ACCOUNTANTS We consent to the incorporation by reference in the registration statements of Conseco, Inc. on Form S-8 (File Nos. 33-57931 and 33-58710) of our report dated June 19, 1995, on our audits of the financial statements and supplemental schedules of the ConsecoSave Plan as of December 31, 1994 and 1993, and for the years then ended, which report is included in this Annual Report on Form 11-K. Coopers & Lybrand L.L.P. Indianapolis, Indiana June 19, 1995 -----END PRIVACY-ENHANCED MESSAGE-----