FOOL CONFERENCE CALL SYNOPSIS*
By Greg Markus (TMF Boring)

Green Tree Financial Corp.
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1100 Landmark Towers, St. Paul, MN 19090
Phone: 612-293-3400

ANN ARBOR, Mich. (July 19, 1997) /FOOLWIRE/ -- Green Tree Financial Corp., based in Saint Paul, Minn., is a diversified financial services company. On July 17, 1997, the company announced that earnings per share for the second quarter ended June 30 increased 44% to $0.78 compared to $0.54 in the second quarter of 1996. Net earnings for the quarter were $108.1 million, an increase of 43% versus $75.4 million last year. Both earnings per share and net earnings represent record quarterly results for Green Tree.

SIX MONTH RESULTS. For the first six months of 1997, earnings per share increased 41% to $1.42 from $1.01 in the first six months of 1996. Net earnings were $199.9 million in the first half of this year compared to $141.8 million in the first half of last year.

FINANCE VOLUME BREAKDOWN. Green Tree's total managed finance receivables grew by $2.4 billion in the quarter and amounted to $23.7 billion at June 30. Management said that this healthy loan growth continues to be driven by strong consumer finance volumes, which increased 40% to $2.76 billion compared to the second quarter of last year, and by higher commercial finance volumes, which increased 44% to $1.20 billion versus last year's period, bringing total finance volume for the quarter to $3.96 billion. Manufactured housing (MH) loan volume in the quarter increased 11% over the year-ago period, to $1.5 billion, or 38% of total volume. Home improvement and home equity volume increased 135% to $835 million; those divisions are now fully integrated. Consumer/retail volume rose 61% to $429 million. Commercial and equipment finance volume increased by 44% to $1.197 billion; slightly over $250 million of that came from the new equipment finance division.

CREDIT QUALITY. The relevant statistics all maintained their positions or improved significantly relative to where they stood at the end of 1996. The 30-day delinquency rate at the end of the quarter was 2.03% versus 2.33% at the end of December. The 60-day delinquency rate was 0.90% versus 1.08% in December, and annual credit losses remained under 1%, at 0.96%. Repossession inventory is also down, as is the amount of low down-payment business (5% down payment) the company is doing, relative to a year ago. So not only is Green Tree seeing strong production in all of its businesses, it is also managing the credit quality of that production very well.

MANUFACTURED HOUSING LOANS. Green Tree's MH loan volume increased appreciably despite relatively flat shipment statistics for the MH industry as a whole. The increase in Green Tree's MH business results from the company's close relationships with dealers and its ability to offer a total package to meet their financing needs, whether that be financing consumers' purchases, dealer inventory, construction, equipment leasing, or the development of manufactured homes communities. Green Tree offers superior service and is getting a larger share of the business. Trends at the shipment side of MH don't always reflect what is happening at the retail level. Inventories are down somewhat at the retail level, as dealers carefully manage their expenses. Also, total unit shipment statistics can be misleading because of the increased sales of multi-section homes to be erected on private property rather than single-wide homes. The MH sales that Green Tree finances are primarily of new units; approximately 15% of the company's finance volume comes from sale of used units. Green Tree sees the MH business continuing to be strong through the balance of the year.

HOME EQUITY/HOME IMPROVEMENT. In the home equity/home improvement business, 60% of finance volume in the quarter was retail and 40% wholesale. "Wholesale" refers overwhelmingly to long-term relationships with independent brokers and not to bulk purchases. Green Tree invested in opening 60 retail centers throughout the U.S. -- which added to expenses in the quarter somewhat -- and those centers are bringing in business very well. Looking forward, revenues are anticipated to grow faster than expenses. Relative to loan production, expenses are dropping and are coming in below the company's business plan.

CREDIT CARD LINE. The growth in Green Tree's credit card business is substantial. During the current quarter the company anticipates it will see for the first time monthly credit card charges totaling $50 million. The company had earlier projected that it would see the credit card portfolio end the year in the area of $500 million, and it still anticipates that will occur. The quality of charge-offs is excellent, below company projections. In its co-branded card operations, Green Tree deals primarily with furniture, home improvement, and air conditioning companies -- whose customers are also potential users of Green Tree's home equity loan products. The company is also beginning to issue secured cards to customers under its home equity program and will extend that to its MH customers. Green Tree takes a very conservative approach in its credit card line of business and is not entering the riskier areas, such as retail electronics or deferred payment cards.

EQUIPMENT LEASE LINE. Green Tree is pleased with the growth and progress of this business. The core office equipment-leasing business acquired from Finova late last year is projected to grow at least 20% annually. In addition, the company expects to expand that core business into other areas, such as truck and medical equipment leasing.

COMPETITION. Competitors are entering the MH and home equity market, but they are not offering better programs or better rates. In some cases they are reaching deeper into the credit bucket or buying someone else's rejects, but Green Tree does not believe those programs will last. Green Tree is not experiencing pressures on margins. Management does not anticipate spending money on trying to build brand recognition, believing that a strategy based on service, range of products, and cost competitiveness is a better approach.

MANAGED LONG-TERM GROWTH. Green Tree now has $1.47 billion in loans and leases held on its balance sheet for future sale, up from $1.02 billion at the end of 1996. The company is comfortable with a 20% long-term growth rate and believes it can achieve that for the foreseeable future. Green Tree stated earlier that it intended to build contract and lease inventory and expects it to grow modestly through the year. For example, the company has not securitized any of the equipment leasing business to date and has no immediate plans to do so; that leasing portfolio totaled approximately $600 million at the end of the quarter.

SECURITIZATIONS. Green Tree completed five sales of asset-backed securities during the second quarter totaling $2.54 billion. $1.3 billion of that was manufactured homes (MH), $630 million was home improvement/home equity, and $600 million was consumer and equipment loans. The spreads on those securitizations have been very satisfactory.

DIVIDEND AND STOCK REPURCHASE. The board of directors declared a 17% increase in the quarterly cash dividend to $.0875 per common share, payable on September 30 to shareholders of record on September 15. Under a previously announced stock repurchase program, Green Tree has bought back 3,235,100 shares of its common stock in 1997. The authorization permits repurchase of up to 5 million shares. While the company has no definite plans at this time, management believes that it will utilize the full authorization.

* A Fool conference call synopsis represents an effort to highlight the salient points of a conference call and should not be taken as an authoritative accounting or transcription of the entire event. Note: Statements made by a company other than historical information may constitute forward-looking statements for which the company can claim protection under the Safe Harbor Act. Please consult the company's filings with the SEC for information on risk factors which might cause actual results to differ materially from the information contained in these forward-looking statements.