Conseco Reports Third Quarter Results((25.6) 62.3 Preferred stock...),Health

Preferred stock dividends:

5.50% Class B mandatorily convertible

preferred stock - (9.5)

Net operating income (loss) (25.6) 52.8

Net realized investment losses, net of

related amortization and taxes (28.1) (13.9)

Net income (loss) applicable to common stock $(53.7) $ 38.9

Per diluted share:

Net operating income (loss) $ (.14) $ .35

Net realized investment losses, net of

related amortization and taxes (.15) (.09)

Net income (loss) applicable to common stock $ (.29) $ .26

In our Bankers Life segment, pre-tax operating earnings were $66.3 million in the third quarter of 2007, compared to $68.4 million in the third quarter of 2006. The slight decrease in earnings is driven by lower margins in our long-term care business, partially offset by improved spreads in our life and annuity business and higher income from our marketing and quota-share agreements with Coventry Health Care.

In our Conseco Insurance Group segment, pre-tax operating loss was $0.4 million in the third quarter of 2007, compared to earnings of $58.5 million in the third quarter of 2006. Significant factors affecting the segment's earnings in these periods included:

-- An $11 million reduction in universal life earnings in the third

quarter of 2007. This block has experienced adverse mortality and we

are projecting break-even earnings in the future.

-- An $18.3 million out-of-period reduction in specified disease earnings

identified by our material control weakness remediation procedures.

-- An $11 million reduction in earnings for charges related to operational

initiatives and consolidation activities.

Our Colonial Penn segment achieved pre-t
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