Exhibit 99.1
NEWS
For Release Immediate
Contacts (News Media) Jim Rosensteele, SVP, Corporate Communications
317.817.4418
(Investors) Tammy Hill, SVP, Investor Relations
317.817.2893
Conseco Names William S. Kirsch President and CEO
and R. Glenn Hilliard Executive Chairman
William J. Shea Departs After Successfully Leading Company through Bankruptcy
and Returning the Company to Profitability
Shea and Board Agree that Kirsch is Ideal To Lead Company
As It Enters New Phase of Growth
Reorganization, Recapitalization and Ratings Upgrades Leave Conseco
Well Positioned for Next Stage of Growth
Carmel, Ind., August 12, 2004 - Conseco, Inc. (NYSE: CNO) announced today that
its Board of Directors has appointed William S. Kirsch as President and Chief
Executive Officer. He succeeds William J. Shea, who has decided to leave the
company after successfully leading Conseco in its emergence from Chapter 11 and
return to profitability. Mr. Kirsch has served since September 2003 as Executive
Vice President, General Counsel and Secretary of Conseco.
The company also announced that R. Glenn Hilliard, a Director and Non-executive
Chairman of Conseco since September 2003 and former Chairman and CEO of ING
Americas, has been elected Executive Chairman. Mr. Hilliard will work closely
with Mr. Kirsch in setting and overseeing execution of the strategic plan for
Conseco, as well as promoting key business relationships and nurturing key
talent within the company.
Speaking for the Board of Directors, Mr. Hilliard said, "Under Bill Shea's
leadership, Conseco has made tremendous progress through its reorganization,
emerging from bankruptcy and delivering three consecutive quarters of
profitability. As Conseco looks forward to its next stage of growth, Bill Shea
and the Board agree that Bill Kirsch is ideally suited to successfully build a
strong enterprise, drive long-term growth, achieve our goal of sustained
operational excellence, and create value for our shareholders. Bill Kirsch has
been a valued adviser to Conseco and we are extremely pleased to have him take
the helm.
"Over the last two years, Bill Kirsch played a key role in the restructuring of
Conseco and was an integral part of the team that helped the Company
successfully emerge from bankruptcy," Mr. Hilliard continued. "In addition to
helping formulate Conseco's post-bankruptcy business plan, he assisted in
rebuilding Conseco's balance sheet, led the restructuring of the Bankers Life
management team, and was helpful in reaching agreements with state regulators
regarding the challenges related to universal life and long-term care products."
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Conseco (2)
August 12, 2004
"Bill Shea provided strong leadership for Conseco through a difficult
transitional period and the Board greatly appreciates the contributions he made
in positioning Conseco for future growth," Mr. Hilliard continued. "His
leadership was critical in restoring Conseco to profitability, completing our
recapitalization and earning ratings upgrades."
Mr. Shea said, "I'm very pleased to have had the opportunity to work with the
many wonderful people at Conseco to help achieve a successful turnaround at the
company. Given the progress we have made, and having accomplished most of what I
hoped to achieve at Conseco, this was a natural time for me to move on. Bill
Kirsch has repeatedly demonstrated outstanding leadership abilities as a key
member of the team that got Conseco to this point in its recovery, and I am
confident that Conseco will successfully achieve its long-term goals under the
leadership of Bill, Glenn and the rest of the senior management team."
Mr. Kirsch said, "Conseco has made tremendous progress in its turnaround and
established a solid foundation on which we can take the company to the next
level. Our focus moving forward will be to continue the work to re-establish
Conseco's position in the marketplace and restore our `A' rating by being a
superior operating company. Critical to that effort will be effectively
integrating our systems and operations across all of our businesses, improving
our servicing and administration of claims, and creating a culture of excellence
at every level of our company. Our goal very simply will be to provide
outstanding customer service and product so that we can thrive in an intensely
competitive marketplace and restore the Company to leadership in the industry."
Mr. Shea has resigned from the Board of Directors of Conseco, Inc. and will not
stand as a candidate for re-election to the Board at the upcoming Annual Meeting
of Shareholders on August 24. It is contemplated that Mr. Kirsch will be elected
to the Board following the company's 2004 Annual Meeting of Stockholders on
August 24.
Earnings Guidance and Outlook
The Company said that its guidance for the second half of this year would be
adjusted to reflect the costs associated with the executive transition, but
otherwise remains unchanged. Including these costs, Conseco now expects net
income applicable to common stock for the year ended December 31, 2004 to be in
the range of $200 million to $210 million, rather than the range of $210 million
to $220 million stated on August 4, 2004. Conseco's earnings guidance is based
on numerous assumptions and factors. If they prove incorrect, actual earnings
could differ materially from estimates (see note on forward-looking statements
below).
William S. Kirsch
Mr. Kirsch has served since September 2003 as Executive Vice President, General
Counsel and Secretary of Conseco Inc. Prior to that, beginning in early 2003, he
served as Acting General Counsel for Conseco. He began representing the Company
in the spring of 2002, and worked as Conseco's principal outside corporate
counsel throughout the Chapter 11 reorganization process. In addition to his
focus on litigation, regulatory and corporate governance matters, Mr. Kirsch has
played an increasing role in business strategy and execution of a variety of key
company initiatives.
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Conseco (3)
August 12, 2004
Mr. Kirsch has been a managing partner with Kirkland & Ellis (K&E), helping to
lead one of the nation's largest and most successful corporate law firms. He
served on K&E's Management Committee for the last five years, was Co-Chair of
the K&E Finance Committee, and was a Member of the K&E Compensation Committee.
He joined the firm in 1981 and was named a partner in 1986. In his practice, Mr.
Kirsch has specialized in complex financial, regulatory and corporate governance
issues, representing many financial services and other companies, including
Conseco. A graduate of Northwestern University, Mr. Kirsch received his law
degree from Stanford University.
R. Glenn Hilliard
Mr. Hilliard became the Non-executive Chairman of Conseco's Board of Directors
in September 2003. His career in the insurance industry began in 1968, when he
joined Liberty Life Insurance Company as an attorney. After leaving Liberty,
where he was elected President and CEO in 1982, he joined Security Life of
Denver, an ING company, where he served for four years before being appointed
President and CEO of ING America Life in 1993. In 1994, he was named Chairman
and CEO of ING North America, and in 1999, he was appointed Chairman and CEO of
ING Americas, a position he held until his retirement in 2003.
Mr. Hilliard is a member of the Board of Directors of Piedmont Hospital in
Atlanta. He also serves as Vice-Chair Finance of the High Museum and is
President of the Clemson University Foundation. He is a graduate of Clemson
University, and earned his law degree from George Washington University Law
School in Washington, D.C.
The company will hold a conference call to discuss today's announcement at 5:00
p.m. Eastern Time today, Thursday, August 12. To participate, please dial (888)
428-4472 (United States) or (612) 332-0345 (International) at least five minutes
before the call start time. The operator will ask you to identify yourself and
your company, and will also ask for the name of the conference, which is
"Conseco".
A webcast of the conference call can be accessed through the following link:
http://www.pressnews.net/conseco/. Listeners should go to the website at least
15 minutes before the event to register, download and install any necessary
audio software.
About Conseco
Conseco, Inc.'s insurance companies help protect working American families and
seniors from financial adversity: Medicare supplement, long-term care, cancer,
heart/stroke and accident policies protect people against major unplanned
expenses; annuities and life insurance products help people plan for their
financial futures.
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Conseco (4)
August 12, 2004
Cautionary Statement Regarding Forward-Looking Statements. Our statements, trend
analyses and other information contained in this press release relative to
markets for Conseco's products and trends in Conseco's operations or financial
results, as well as other statements contain forward-looking statements, within
the meaning of the federal securities laws and the Private Securities Litigation
Reform Act of 1995. Forward-looking statements typically are identified by the
use of terms such as "anticipate," "believe," "plan," "estimate," "expect,"
"project," "intend," "may," "will," "would," "contemplate," "possible,"
"attempt," "seek," "should," "could," "goal," "target," "on track," "comfortable
with," "optimistic" and similar words, although some forward-looking statements
are expressed differently. You should consider statements that contain these
words carefully because they describe our expectations, plans, strategies and
goals and our beliefs concerning future business conditions, our results of
operations, financial position, and our business outlook or they state other
"forward-looking" information based on currently available information.
Assumptions and other important factors that could cause our actual results to
differ materially from those anticipated in our forward-looking statements
include, among other things: (i) the potential adverse impact of our
predecessor's Chapter 11 petition on our business operations, and relationships
with our customers, employees, regulators, distributors and agents; (ii) our
ability to operate our business under the restrictions imposed by our senior
bank credit facility or agents; (ii) our ability to operate our business under
the restrictions imposed by our senior bank credit facility orfuture credit
facilities; (iii) our ability to improve the financial strength ratings of our
insurance company subsidiaries and the impact of prior rating downgrades on our
business; (iv) our ability to obtain adequate and timely rate increases on our
supplemental health products including our long-term care business; (v) general
economic conditions and other factors, including prevailing interest rate
levels, stock and credit market performance and health care inflation, which may
affect (among other things) our ability to sell products and access capital on
acceptable terms, the market value of our investments, and the lapse rate and
profitability of policies; (vi) our ability to achieve anticipated expense
reductions and levels of operational efficiencies; (vii) customer response to
new products, distribution channels and marketing initiatives; (viii) mortality,
morbidity, usage of health care services, persistency and other factors which
may affect the profitability of our insurance products; (ix) performance of our
investments; (x) changes in the Federal income tax laws and regulations which
may affect or eliminate the relative tax advantages of some of our products;
(xi) increasing competition in the sale of insurance and annuities; (xii)
regulatory changes or actions, including those relating to regulation of the
financial affairs of our insurance companies, including the payment of dividends
to us, regulation of financial services affecting (among other things) bank
sales and underwriting of insurance products, regulation of the sale,
underwriting and pricing of products, and health care regulation affecting
health insurance products; (xiii) the ultimate outcome of lawsuits filed against
us and other legal and regulatory proceedings to which we are subject; and (xiv)
the risk factors or uncertainties listed from time to time in our filings with
the Securities and Exchange Commission.
Other factors and assumptions not identified above are also relevant to the
forward-looking statements, and if they prove incorrect, could also cause actual
results to differ materially from those projected. All written or oral
forward-looking statements attributable to us are expressly qualified in their
entirety by the foregoing cautionary statement. Our forward-looking statements
speak only as of the date made. We assume no obligation to update or to publicly
announce the results of any revisions to any of the forward-looking statements
to reflect actual results, future events or developments, changes in assumptions
or changes in other factors affecting the forward-looking statements.
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