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  • CNO Financial Group Reports Second Quarter 2022 Results

    August 2, 2022 by CNO Financial Group, Inc.

    CARMEL, Ind.Aug. 1, 2022 /PRNewswire/ — CNO Financial Group, Inc. (NYSE: CNO) today announced that for the quarter ended June 30, 2022, net income was $136.1 million, or $1.16 per diluted share, compared to $78.0 million, or $0.58 per diluted share, in 2Q21. Net operating income (1) in 2Q22 was $100.1 million, or $0.85 per diluted share, compared to $89.1 million, or $0.66 per diluted share, in 2Q21.

    “CNO posted another quarter of strong earnings,” said Gary C. Bhojwani, chief executive officer. “Our annuities, direct-to-consumer and worksite businesses performed well in the quarter. We also saw a sharp increase in new money rates, signaling a positive trend in our earned yields.  CNO’s balance sheet is solid, and we remain well-positioned to continue navigating the current economic uncertainty from a position of strength.”

    Second Quarter 2022 Highlights

    • Earnings per diluted share of $1.16 in 2Q22, up from $0.58 in 2Q21
    • Operating (1) EPS of $0.85 in 2Q22, up 29% from 2Q21; up 3% excluding significant items in 2Q22 and 2Q21
    • Net investment income up 8% from 2Q21
    • Total new annualized premiums (NAP) (4) down 5% from 2Q21
    • Direct-to-consumer life insurance NAP (4) up 9% from 2Q21
    • Worksite Division NAP (4) up 33% from 2Q21
    • Annuity collected premiums up 26% from 2Q21
    • Returned $76.5 million to shareholders in the form of share repurchases ($60.0 million) and dividends ($16.5 million); reduced weighted average share count by 12% since 2Q21
    • Return on equity (ROE) of 10.3%; operating ROE, as adjusted (6), of 11.5%

    FINANCIAL SUMMARY

    Quarter End

    (Amounts in millions, except per share data)

    (Unaudited)

     

    Net operating income, a non-GAAP(a) financial measure, is used consistently by CNO’s management to evaluate the operating performance of the Company and is a measure commonly used in the life insurance industry.  It differs from net income primarily because it excludes certain non-operating items such as net investment gains (losses), changes in fair values of embedded derivatives and the liability for a deferred compensation plan, and certain significant and unusual items included in net income.  Management believes an analysis of net operating income is important in understanding the profitability and operating trends of the Company’s business.  Net income is the most directly comparable GAAP measure.

     
     

    Per diluted share

                 
     

    Quarter ended

     

    Quarter ended

     

    June 30,

     

    June 30,

     

    2022

       

    2021

     

    %

    change

     

    2022

       

    2021

     

    %

    change

                               

    Income from insurance products (b)

    $         0.47

       

    $           0.63

     

    (25)

     

    $    55.1

       

    $    85.0

     

    (35)

    Fee income

    0.03

       

    0.05

     

    (40)

     

    3.2

       

    6.6

     

    (52)

    Investment income not allocated to product lines (c)

    0.58

       

    0.36

     

    61

     

    68.5

       

    47.8

     

    43

    Expenses not allocated to product lines (d)

    0.02

       

    (0.18)

     

    (111)

     

    2.9

       

    (23.8)

     

    (112)

    Operating earnings before taxes

    1.10

       

    0.86

         

    129.7

       

    115.6

       

    Income tax expense on operating income

    (0.25)

       

    (0.20)

     

    25

     

    (29.6)

       

    (26.5)

     

    12

    Net operating income (1)

    0.85

       

    0.66

     

    29

     

    100.1

       

    89.1

     

    12

    Net realized investment gains (losses) from sales, impairments and change in allowance for credit losses (net of related amortization)

    (0.22)

       

    0.18

         

    (26.1)

       

    24.3

       

    Net change in market value of investments recognized in earnings

    (0.19)

       

    0.04

         

    (21.7)

       

    5.7

       

    Fair value changes in embedded derivative liabilities (net of related amortization)

    0.68

       

    (0.33)

         

    79.7

       

    (44.9)

       

    Other

    0.12

       

    0.01

         

    13.8

       

    0.9

       

    Non-operating income (loss) before taxes

    0.39

       

    (0.10)

         

    45.7

       

    (14.0)

       

    Income tax benefit (expense) on non-operating income

    (0.08)

       

    0.02

         

    (9.7)

       

    2.9

       

    Net non-operating income (loss)

    0.31

       

    (0.08)

         

    36.0

       

    (11.1)

       

    Net income

    $         1.16

       

    $           0.58

         

    $  136.1

       

    $     78.0

       
                               

    Weighted average diluted shares outstanding

    117.3

       

    133.8

                     
       

    (a)

    GAAP is defined as accounting principles generally accepted in the United States of America.

    (b)

    Income from insurance products is the sum of the insurance margins of the annuity, health and life segments, less allocated insurance administrative expenses.  It excludes the fee income segment, excess investment income, parent company expenses and income taxes.  Insurance margin is management’s measure of the profitability of its annuity, health and life segments’ performance and consists of premiums plus allocated investment income less insurance policy benefits, interest credited, commissions, advertising expense and amortization of acquisition costs.

    (c)

    Investment income not allocated to product lines is defined as net investment income less: (i) equity returns credited to policyholder account balances; (ii) the investment income allocated to our product lines; (iii) interest expense on notes payable and investment borrowings; (iv) expenses related to the funding agreement-backed notes (“FABN”) program; and (v) certain expenses related to benefit plans that are offset by special-purpose investment income.

    (d)

    Expenses not allocated to product lines in the second quarter of 2022 includes the $22.5 million favorable impact of an experience refund related to a reinsurance agreement.

    FINANCIAL SUMMARY (continued)

    Management vs. GAAP Measures

    (Dollars in millions, except per share data)

    (Unaudited)

     

    Shareholders’ equity, excluding accumulated other comprehensive income (loss), and book value per share, excluding accumulated other comprehensive income (loss), are non-GAAP measures that are utilized by management to view the business without the effect of accumulated other comprehensive income (loss) which is primarily attributable to fluctuations in interest rates associated with fixed maturities, available for sale.  Management views the business in this manner because the Company has the ability and generally, the intent, to hold investments to maturity and meaningful trends can be more easily identified without the fluctuations.  In addition, shareholders’ equity excludes net operating loss carryforwards in our non-GAAP return on equity measures as such assets are not discounted and, accordingly, will not provide a return to shareholders until after it is realized as a reduction to taxes that would otherwise be paid.  Management believes that excluding this value from the equity component of this measure enhances the understanding of the effect these non-discounted assets have on operating returns.

     
     
     

    Quarter ended

     

    June 30,

     

    2022

     

    2021

           

    Trailing twelve months return on equity (a)

    10.3 %

     

    9.1 %

    Trailing twelve months operating return on equity, excluding accumulated other comprehensive income (loss)

    and net operating loss carryforwards (a non-GAAP financial measure) (6)

    11.5 %

     

    12.3 %

    Trailing twelve months operating return, excluding significant items, on equity, excluding accumulated other

    comprehensive income (loss) and net operating loss carryforwards (a non-GAAP financial measure) (6)

    10.3 %

     

    12.4 %

           
           

    Shareholders’ equity

    $     2,212.0

     

    $    5,324.0

    Accumulated other comprehensive (income) loss

    1,165.0

     

    (1,995.5)

           

    Shareholders’ equity, excluding accumulated other comprehensive income (loss)

    3,377.0

     

    3,328.5

    Net operating loss carryforwards

    (214.7)

     

    (292.9)

    Shareholders’ equity, excluding accumulated other comprehensive income (loss) and net operating loss

    carryforwards

    $     3,162.3

     

    $    3,035.6

           

    Book value per diluted share

    $        19.04

     

    $       40.47

    Accumulated other comprehensive (income) loss

    10.02

     

    (15.17)

           

    Book value per diluted share, excluding accumulated other comprehensive income (loss) (a non-GAAP financial measure) (2)

    $        29.06

     

    $       25.30

       

    (a)

      Calculated using average shareholders’ equity for the measurement period.

    INSURANCE OPERATIONS 

    Annuity products accounted for 18 percent of the Company’s margin for the quarter.

    Annuity premiums collected increased 26 percent and annuity account values increased 8 percent in 2Q22 compared to 2Q21.

    Health products accounted for 55 percent of the Company’s insurance margin for the quarter and 64 percent of insurance policy income.

    Life products accounted for 27 percent of the Company’s insurance margin for the quarter and 35 percent of insurance policy income.

    Sales of health products were down 10 percent and sales of life products were down 2 percent in 2Q22 compared to 2Q21.

    ANNUITY COLLECTED PREMIUMS

    (Dollars in millions)

    (Unaudited)

     
     

    Quarter ended June 30,

       
     

    2022

     

    2021

     

    %

    change

    Annuity collected premiums

    $             435.0

     

    $             344.3

     

    26

     
     
     

    INSURANCE POLICY INCOME

    (Dollars in millions)

    (Unaudited)

     
     

    Quarter ended June 30,

       
     

    2022

     

    2021

     

    %

    change

    Annuity

    $                 5.8

     

    $                 4.3

     

    35

    Health

    403.5

     

    415.4

     

    (3)

    Life

    216.3

     

    210.8

     

    3

    Total insurance policy income

    $             625.6

     

    $             630.5

     

    (1)

     
     
     

    SALES MEASURED AS NEW ANNUALIZED PREMIUMS FOR

    LIFE AND HEALTH PRODUCTS

    (Dollars in millions)

    (Unaudited)

     
     

    Quarter ended June 30,

       
     

    2022

     

    2021

     

    %

    change

    Health

    $               37.4

     

    $               41.5

     

    (10)

    Life

    51.4

     

    52.3

     

    (2)

    Total new annualized premiums (4)

    $               88.8

     

    $               93.8

     

    (5)

    INSURANCE MARGIN

    (Amounts in millions, except per share data)

    (Unaudited)

     

    Insurance margin is management’s measure of profitability of its annuity, health and life segments’ performance and consists of premiums plus allocated investment income less insurance policy benefits, interest credited, commissions, advertising expense and amortization of acquisition costs. Income from insurance products is the sum of the insurance margins of the annuity, health and life segments, less allocated insurance administrative expenses.  It excludes the fee income segment, investment income not allocated to product lines, expenses not allocated to product lines and income taxes. Management believes this information helps provide a better understanding of the business and a more meaningful analysis of our operations. Insurance income, a non-GAAP measure, is a component of net operating income, which is reconciled to net income in the Financial Summary section above.

     
     
     

    Quarter ended

     

    June 30,

    2022

     

    % of

    insurance

    policy

    income

       

    June 30,

    2021

     

    % of

    insurance

    policy

    income

     

    %

    change

    Margin

                       

    Annuity interest margin

    $               37.1

           

    $               66.0

         

    (44)

    Life insurance interest margin

    1.8

           

    1.6

         

    13

    Total interest-sensitive margin

    38.9

           

    67.6

         

    (42)

    Insurance margin

                       

    Health

    113.4

     

    28

       

    120.9

     

    29

     

    (6)

    Life (a)

    55.0

     

    25

       

    38.1

     

    18

     

    44

    Total other insurance margin

    168.4

     

    27

       

    159.0

     

    25

     

    6

                         

    Total insurance margin

    207.3

           

    226.6

           
                         

    Allocated expenses

    (152.2)

           

    (141.6)

           

    Income from insurance products

    $               55.1

           

    $               85.0

           
                         

    Per diluted share

    $               0.47

           

    $               0.63

           

    Weighted average diluted shares

    117.3

           

    133.8

           
       

    (a)

    Net of $22.6 million and $25.0 million of non-deferred television advertising expense related to our direct distribution channel in the 2022 and 2021 periods, respectively.

     

    Total allocated expenses were $152.2 million, up 7 percent from the year-ago quarter.

    Total insurance margins were favorably impacted by approximately $22 million and $21 million in the quarters ended June 30, 2022 and 2021, respectively, due to the estimated impacts of COVID-19.

    ANNUITY RESULTS BY PRODUCT TYPE 

    (Dollars in millions) 

    (Unaudited) 

     

    Annuity margin

     

    Quarter ended

     

    June 30,

     

    2022

     

    2021

    Fixed index annuities

    $           25.8

     

    $            55.3

    Fixed interest annuities

    7.4

     

    9.5

    Other annuities

    3.9

     

    1.2

    Total

    $           37.1

     

    $            66.0

     
     
     
     

    Annuity collected premiums

     

    Quarter ended

     

    June 30,

     

    2022

     

    2021

    Annuity collected premiums

    $         435.0

     

    $          344.3

     
     
     
     

    Average net insurance liabilities (5)

     

    Quarter ended

     

    June 30,

     

    2022

     

    2021

    Fixed index annuities

    $       8,420.5

     

    $       7,643.4

    Fixed interest annuities

    1,713.6

     

    1,899.5

    Other annuities

    481.6

     

    506.8

    Total

    $     10,615.7

     

    $     10,049.7

     
     
     
     

    Margin/average net insurance liabilities (a)

     

    Quarter ended

     

    June 30,

     

    2022

     

    2021

    Fixed index annuities

    1.23 %

     

    2.89 %

    Fixed interest annuities

    1.73 %

     

    2.00 %

    Other annuities

    3.24 %

     

    0.95 %

    Total

    1.40 %

     

    2.63 %

       

    (a)

    Defined as annualized quarterly annuity margin divided by average net insurance liabilities (5).

    Total annuity margins were favorably impacted by approximately $1 million and $2 million in the quarters ended June 30, 2022 and 2021, respectively, due to the estimated impacts of COVID-19.

    HEALTH INSURANCE RESULTS BY PRODUCT TYPE 

    (Dollars in millions) 

    (Unaudited) 

     
     

    Health margin

     

    Quarter ended

     

    June 30,

     

    2022

     

    2021

       
     

    Amount

     

    % of

    insurance

    policy

    income

     

    Amount

     

    % of

    insurance

    policy

    income

     

    %

    change

    Supplemental health and other health

    $           52.3

     

    30

     

    $           47.5

     

    28

     

    10

    Medicare supplement

    36.4

     

    22

     

    45.7

     

    25

     

    (20)

    Long-term care

    24.7

     

    37

     

    27.7

     

    42

     

    (11)

    Total

    $         113.4

     

    28

     

    $         120.9

     

    29

     

    (6)

    Health insurance policy income

     

    Quarter ended

       
     

    June 30,

       
     

    2022

     

    2021

     

    %

    change

    Supplemental health and other health

    $         172.0

     

    $         170.0

     

    1

    Medicare supplement

    165.1

     

    179.7

     

    (8)

    Long-term care

    66.4

     

    65.7

     

    1

    Total

    $         403.5

     

    $         415.4

     

    (3)

     
     

    Health NAP (4)

     

    Quarter ended

       
     

    June 30,

       
     

    2022

     

    2021

     

    %

    change

    Supplemental health and other health

    $           24.4

     

    $           25.7

     

    (5)

    Medicare supplement

    6.9

     

    8.8

     

    (22)

    Long-term care

    6.1

     

    7.0

     

    (13)

    Total

    $           37.4

     

    $           41.5

     

    (10)

    Total health margins were favorably impacted by approximately $21 million and $30 million in the quarters ended June 30, 2022 and 2021, respectively, due to the estimated impacts of COVID-19.

    LIFE INSURANCE RESULTS BY PRODUCT TYPE 

    (Dollars in millions) 

    (Unaudited) 

     
     

    Life margin

     

    Quarter ended

       
     

    June 30,

       
     

    2022

     

    2021

       
     

    Amount

     

    % of

    insurance

    policy

    income

     

    Amount

     

    % of

    insurance

    policy

    income

     

    %

    change

    Life insurance interest margin

    $             1.8

         

    $             1.6

         

    13

    Life insurance margin:

                     

    Traditional life

    35.0

     

    20

     

    22.9

     

    14

     

    53

    Interest sensitive life

    20.0

     

    46

     

    15.2

     

    37

     

    32

    Subtotal

    55.0

     

    25

     

    38.1

     

    18

     

    44

    Total margin

    $           56.8

         

    $           39.7

         

    43

    Life insurance policy income

     

    Quarter ended

       
     

    June 30,

       
     

    2022

     

    2021

     

    %

    change

    Traditional life

    $         172.5

     

    $         169.4

     

    2

    Interest sensitive life

    43.8

     

    41.4

     

    6

    Total

    $         216.3

     

    $         210.8

     

    3

     
     

    Life NAP (4)

     

    Quarter ended

       
     

    June 30,

       
     

    2022

     

    2021

     

    %

    change

    Traditional life

    $           44.3

     

    $           43.9

     

    1

    Interest sensitive life

    7.1

     

    8.4

     

    (15)

    Total

    $           51.4

     

    $           52.3

     

    (2)

    Average net insurance liabilities (5) and interest margin

       
     

    Quarter ended

       
     

    June 30,

       
     

    2022

     

    2021

     

    %

    change

    Interest sensitive life products

    $   1,020.3

     

    $     970.0

     

    5

    Interest margin/average net insurance liabilities (5)

    0.71 %

     

    0.66 %

     

    8

    Total life margins were unfavorably impacted by approximately $11 million in the quarter ended June 30, 2021 due to the estimated impacts of COVID-19.  There was no material impact on the life margins in the quarter ended June 30, 2022 related to COVID-19.

    QUARTERLY AVERAGE EXCLUSIVE PRODUCING AGENTS

     
     

    Average Exclusive Producing Agent Count

     

    Quarter ended

       
     

    June 30,

     

    %

     

    2022

     

    2021

     

    change

    Consumer

             

    Field agents (a) (c)

    3,968

     

    4,360

     

    (9)

    Tele-sales agents

    204

     

    247

     

    (17)

    Total agents

    4,172

     

    4,607

     

    (9)

    Registered agents (b) (c)

    676

     

    639

     

    6

    Worksite (a) (c)

    234

     

    258

     

    (9)

    ____________________

    (a)

    Producing agents represent the monthly average of exclusive agents that have submitted at least one policy in the month.

    (b)

    Registered agents are dually licensed as insurance agents and financial representatives who can buy and sell

     

    securities for clients, and/or investment advisors who can provide ongoing investment advice for clients.

    (c)

    Agent counts represent the average of the last 3 months.

    INVESTMENTS

    INVESTMENT INCOME NOT ALLOCATED TO PRODUCT LINES

    (Dollars in millions, except per share data)

     

    Management uses investment income not allocated to product lines as the measure to evaluate the performance of the investment segment.  It is defined as net investment income less the investment income allocated to our product segments and interest expense on debt.  We also view investment income not allocated to product lines per diluted share as an important and useful measure to evaluate performance of the investment segment as it takes into consideration our share repurchase program.

     
     

    Quarter ended June 30,

       
     

    2022

     

    2021

     

    %

    change

    Net investment income

    $            223.9

     

    $            379.2

     

    (41)

    Allocated to product lines:

             

    Annuity

    (114.8)

     

    (114.9)

     

    Health

    (71.6)

     

    (71.6)

     

    Life

    (36.2)

     

    (36.1)

     

    Equity returns credited to policyholder account balances

    92.4

     

    (76.1)

     

    (221)

    Amounts allocated to product lines and credited to policyholder account balances

    (130.2)

     

    (298.7)

     

    (56)

    Amount related to variable interest entities and other non-operating items

    (9.1)

     

    (8.0)

     

    14

    Interest expense on corporate debt

    (15.6)

     

    (15.6)

     

    Interest expense on investment borrowings from the Federal Home Loan Bank program

    (4.7)

     

    (2.5)

     

    88

    Expenses related to FABN program

    (7.6)

     

     

    n/m

    Less amounts credited to deferred compensation plans (offsetting investment income)

    11.8

     

    (6.6)

     

    (279)

    Total adjustments

    (25.2)

     

    (32.7)

       

    Investment income not allocated to product lines

    $              68.5

     

    $              47.8

     

    43

               

    Per diluted share

    $              0.58

     

    $              0.36

       

    INVESTMENT PORTFOLIO

    (Dollars in millions)

     

    The composition of the investment portfolio at June 30, 2022 is as follows:

     
     

    $

     

    % of total

    Fixed maturities, available for sale, at fair value

    $     21,362.7

     

    85

    Equity securities at fair value

    136.9

     

    1

    Mortgage loans

    1,215.3

     

    5

    Policy loans

    119.5

     

    Trading securities

    198.9

     

    1

    Investments held by variable interest entities

    1,107.7

     

    4

    Other invested assets

    1,086.6

     

    4

    Total investment portfolio

    $     25,227.6

     

    100

    Fixed maturities, available for sale, at amortized cost by asset class as of June 30, 2022 are as follows:

     
     

    Investment

    grade

     

    Below

    investment

    grade

     

    Total

    Corporate securities

    $     13,126.5

     

    $          794.6

     

    $     13,921.1

    United States Treasury securities and obligations of the United States government and agencies

    168.8

     

     

    168.8

    States and political subdivisions

    2,687.4

     

    11.6

     

    2,699.0

    Foreign governments

    74.6

     

     

    74.6

    Asset-backed securities

    1,124.6

     

    134.5

     

    1,259.1

    Agency residential mortgage-backed securities

    32.0

     

     

    32.0

    Non-agency residential mortgage-backed securities

    1,188.9

     

    620.3

    (a)

    1,809.2

    Collateralized loan obligations

    720.4

     

    7.5

     

    727.9

    Commercial mortgage-backed securities

    2,325.2

     

    83.9

     

    2,409.1

               

    Total

    $     21,448.4

     

    $       1,652.4

     

    $     23,100.8

    ____________________

    (a)

    Certain structured securities rated below investment grade by Nationally Recognized Statistical Rating Organizations may be assigned a NAIC 1 or NAIC 2 designation based on the cost basis of the security relative to estimated recoverable amounts as determined by the National Association of Insurance Commissioners (NAIC).

    The fair value of CNO’s available for sale fixed maturity portfolio was $21.4 billion compared with an amortized cost of $23.1 billion.  Net unrealized losses were comprised of gross unrealized gains of $295.2 million and gross unrealized losses of $1,979.1 million.  The allowance for credit losses was $54.2 million at June 30, 2022.

    At both amortized cost and fair value, 93 percent of fixed maturities, available for sale, were rated “investment grade”.

    Non-Operating Items

    Net investment losses in 2Q22 were $26.1 million (net of related amortization) including the unfavorable change in the allowance for credit losses of $23.7 million which was recorded in earnings.  Net investment gains in 2Q21 were $24.3 million (net of related amortization) including the favorable change in the allowance for credit losses of $5.7 million which was recorded in earnings.

    During 2Q22 and 2Q21, we recognized an increase (decrease) in earnings of $(21.7) million and $5.7 million, respectively, due to the net change in market value of investments recognized in earnings.

    During 2Q22 and 2Q21, we recognized an increase (decrease)  in earnings of $79.7 million and $(44.9) million, respectively, resulting from changes in the estimated fair value of embedded derivative liabilities related to our fixed index annuities, net of related amortization.  Such amounts include the impacts of changes in market interest rates used to determine the derivative’s estimated fair value.

    In 2Q22, other non-operating items included an increase in earnings of $14.0 million for the mark-to-market change in the agent deferred compensation plan liability which was impacted by changes in the underlying actuarial assumptions used to value the liability. We recognize the mark-to-market change in the estimated value of this liability through earnings as assumptions change.

    Statutory (based on non-GAAP measures) and GAAP Capital Information

    Our consolidated statutory risk-based capital ratio was estimated at 360% at June 30, 2022, reflecting estimated 2Q22 statutory operating income of $93 million (and $124 million in the first six months of 2022) and the payment of insurance company dividends to the holding company of $29.0 million during 2Q22 (and $98.6 million in the first six months of 2022).

    During the second quarter of 2022, we repurchased $60.0 million of common stock under our securities repurchase program.  We repurchased 2.5 million common shares at an average cost of $23.52 per share.  As of June 30, 2022, we had 114.8 million shares outstanding and had authority to repurchase up to an additional $206.9 million of our common stock.  During 2Q22, dividends paid on common stock totaled $16.5 million.

    Unrestricted cash and investments held by our holding company were $141 million at June 30, 2022, compared to $249 million at December 31, 2021.

    Book value per common share was $19.27 at June 30, 2022 compared to $43.69 at December 31, 2021.  Book value per diluted share, excluding accumulated other comprehensive income (loss) (2), was $29.06 at June 30, 2022, compared to $26.86 at December 31, 2021. 

    The debt-to-capital ratio was 34.0 percent and 17.8 percent at June 30, 2022 and December 31, 2021, respectively.  Our debt-to-total capital ratio, excluding accumulated other comprehensive income (loss) (3) was 25.2 percent at June 30, 2022, compared to 25.6 percent at December 31, 2021.

    Return on equity for the trailing four quarters ended June 30, 2022 and 2021, was 10.3% and 9.1%, respectively.  Operating return, excluding significant items, on equity, excluding accumulated other comprehensive income (loss) and net operating loss carryforwards (6) for the trailing four quarters ended June 30, 2022 and 2021, was 10.3% and 12.4%, respectively.

    In this news release, CNO includes non-GAAP measures to enhance investors’ understanding of management’s view of the business.  The non-GAAP measures are not a substitute for GAAP, but rather a supplement to increase transparency by providing broader perspective.  CNO’s definitions of non-GAAP measures may differ from other companies’ definitions.  More detailed information including various GAAP and non-GAAP measurements are located at CNOinc.com in the Investors section under SEC Filings.

    CAUTION REGARDING FORWARD-LOOKING STATEMENTS:

    This press release may contain forward-looking statements within the meaning of federal securities laws.  These prospective statements reflect management’s current expectations, but are not guarantees of future performance.  Accordingly, please refer to CNO’s cautionary statement regarding forward-looking statements, and the business environment in which the Company operates, contained in the Company’s Form 10-K for the year ended December 31, 2021 and any subsequent Form 10-Q or Form 10-K on file with the Securities and Exchange Commission and on the Company’s website at CNOinc.com in the Investors section.  CNO specifically disclaims any obligation to update or revise any forward-looking statement because of new information, future developments or otherwise.

    EARNINGS RELEASE CONFERENCE CALL WEBCAST:

    The Company will host a conference call to discuss results on August 2, 2022 at 11:00 a.m. Eastern Time.  During the call, we will be referring to a presentation that will be available at the Investors section of the company’s website.

    To participate by dial-in, please register at https://ige.netroadshow.com/registration/q4inc/11345/cno-financial-group-second-quarter-2022-earnings-results/.  Upon registering, you will be provided with call details and a registrant ID used to track attendance on the conference call. Reminders will also be sent to registered participants via email.

    For those investors who prefer to listen to the call online, we will be broadcasting the call live via webcast.  The event can be accessed through the Investors section of the company’s website: ir.CNOinc.com.  Participants should go to the website at least 15 minutes before the event to register and download any necessary audio software.

    ABOUT CNO FINANCIAL GROUP

    CNO Financial Group, Inc. (NYSE: CNO) secures the future of middle-income America.  CNO provides life and health insurance, annuities, financial services, and workforce benefits solutions through our family of brands, including Bankers Life, Colonial Penn and Washington National.  Our customers work hard to save for the future, and we help protect their health, income and retirement needs with 3.2 million policies and $34 billion in total assets. Our 3,400 associates, 4,400 exclusive agents and 4,700 independent partner agents guide individuals, families and businesses through a lifetime of financial decisions. For more information, visit CNOinc.com.

    CNO FINANCIAL GROUP, INC. AND SUBSIDIARIES

    CONSOLIDATED BALANCE SHEET

    (Dollars in millions)

    (unaudited)

     
     

    June 30,

    2022

     

    December 31,

    2021

    ASSETS

         

    Investments:

         

    Fixed maturities, available for sale, at fair value (net of allowance for credit losses: June 30,

    2022 – $54.2 and December 31, 2021 – $7.6; amortized cost: June 30, 2022 – $23,100.8 and

    December 31, 2021 – $21,867.6)

    $           21,362.7

     

    $           24,805.4

    Equity securities at fair value

    136.9

     

    131.1

    Mortgage loans (net of allowance for credit losses: June 30, 2022 – $4.9 and December 31, 2021 – $5.6)

    1,215.3

     

    1,218.6

    Policy loans

    119.5

     

    120.2

    Trading securities

    198.9

     

    227.2

    Investments held by variable interest entities (net of allowance for credit losses: June 30, 2022 –

    $12.2 and December 31, 2021 – $3.7; amortized cost: June 30, 2022 – $1,180.2 and

    December 31, 2021 – $1,206.8)

    1,107.7

     

    1,199.6

    Other invested assets

    1,086.6

     

    1,224.0

    Total investments

    25,227.6

     

    28,926.1

    Cash and cash equivalents – unrestricted

    567.2

     

    632.1

    Cash and cash equivalents held by variable interest entities

    52.2

     

    99.6

    Accrued investment income

    224.1

     

    216.4

    Present value of future profits

    219.8

     

    222.6

    Deferred acquisition costs

    1,767.0

     

    1,112.0

    Reinsurance receivables (net of allowance for credit losses: June 30, 2022 – $3.0 and

    December 31, 2021 – $3.0)

    4,277.9

     

    4,354.3

    Income tax assets, net

    929.8

     

    118.3

    Assets held in separate accounts

    3.0

     

    3.9

    Other assets

    566.9

     

    519.1

    Total assets

    $           33,835.5

     

    $           36,204.4

    LIABILITIES AND SHAREHOLDERS’ EQUITY

         

    Liabilities:

         

    Liabilities for insurance products:

         

    Policyholder account liabilities

    $           14,608.8

     

    $           13,689.7

    Future policy benefits

    11,684.6

     

    11,670.7

    Liability for policy and contract claims

    466.4

     

    501.8

    Unearned and advanced premiums

    243.4

     

    246.7

    Liabilities related to separate accounts

    3.0

     

    3.9

    Other liabilities

    713.2

     

    830.9

    Investment borrowings

    1,640.2

     

    1,715.8

    Borrowings related to variable interest entities

    1,125.9

     

    1,147.9

    Notes payable – direct corporate obligations

    1,138.0

     

    1,137.3

    Total liabilities

    31,623.5

     

    30,944.7

    Commitments and Contingencies

         

    Shareholders’ equity:

         

    Common stock ($0.01 par value, 8,000,000,000 shares authorized, shares issued and outstanding: June 30, 2022 – 114,795,328; December 31, 2021 – 120,377,152)

    1.1

     

    1.2

    Additional paid-in capital

    2,032.7

     

    2,184.2

    Accumulated other comprehensive income (loss)

    (1,165.0)

     

    1,947.1

    Retained earnings

    1,343.2

     

    1,127.2

    Total shareholders’ equity

    2,212.0

     

    5,259.7

    Total liabilities and shareholders’ equity

    $           33,835.5

     

    $           36,204.4

    CNO FINANCIAL GROUP, INC. AND SUBSIDIARIES

    CONSOLIDATED STATEMENT OF OPERATIONS

    (Dollars in millions, except per share data)

    (unaudited)

     
     

    Three months ended

     

    Six months ended

     

    June 30,

     

    June 30,

     

    2022

     

    2021

     

    2022

     

    2021

    Revenues:

                 

    Insurance policy income

    $              625.6

     

    $             630.5

     

    $          1,250.6

     

    $                 1,262.9

    Net investment income:

                 

    General account assets

    317.7

     

    282.1

     

    595.2

     

    564.8

    Policyholder and other special-purpose portfolios

    (93.8)

     

    97.1

     

    (163.1)

     

    152.6

    Investment gains (losses):

                 

    Realized investment gains (losses)

    (7.0)

     

    17.1

     

    11.8

     

    11.1

    Other investment gains (losses)

    (41.8)

     

    14.2

     

    (93.3)

     

    17.4

    Total investment gains (losses)

    (48.8)

     

    31.3

     

    (81.5)

     

    28.5

    Fee revenue and other income

    54.3

     

    32.1

     

    96.7

     

    70.3

    Total revenues

    855.0

     

    1,073.1

     

    1,697.9

     

    2,079.1

    Benefits and expenses:

                 

    Insurance policy benefits

    340.2

     

    657.4

     

    686.9

     

    1,116.5

    Interest expense

    27.8

     

    24.0

     

    51.6

     

    48.1

    Amortization

    88.1

     

    42.6

     

    192.0

     

    142.3

    Other operating costs and expenses

    223.5

     

    247.5

     

    442.7

     

    480.6

    Total benefits and expenses

    679.6

     

    971.5

     

    1,373.2

     

    1,787.5

    Income before income taxes

    175.4

     

    101.6

     

    324.7

     

    291.6

    Income tax expense on period income

    39.3

     

    23.6

     

    76.3

     

    66.2

    Net income

    $              136.1

     

    $               78.0

     

    $             248.4

     

    $                    225.4

    Earnings per common share:

                 

    Basic:

                 

    Weighted average shares outstanding

    115,533,000

     

    131,016,000

     

    117,078,000

     

    132,578,000

    Net income

    $                1.18

     

    $                 .59

     

    $               2.12

     

    $                      1.70

    Diluted:

                 

    Weighted average shares outstanding

    117,286,000

     

    133,814,000

     

    119,144,000

     

    135,233,000

    Net income

    $                1.16

     

    $                 .58

     

    $               2.08

     

    $                      1.67

    NOTES

     

    (1)

    Management believes that an analysis of Net income applicable to common stock before: (i) net realized investment gains or losses from sales, impairments and the change in allowance for credit losses, net of related amortization and taxes; (ii) net change in market value of investments recognized in earnings, net of taxes; (iii) fair value changes due to fluctuations in the interest rates used to discount embedded derivative liabilities related to our fixed index annuities, net of related amortization and taxes; (iv) fair value changes related to the agent deferred compensation plan, net of taxes; (v) loss on extinguishment of debt, net of taxes; (vi) changes in the valuation allowance for deferred tax assets and other tax items; and (viii) other non-operating items consisting primarily of earnings attributable to variable interest entities, net of taxes (“Net operating income,” a non-GAAP financial measure) is important to evaluate the financial performance of the company, and is a key measure commonly used in the life insurance industry.  Management uses this measure to evaluate performance because the items excluded from net operating income can be affected by events that are unrelated to the company’s underlying fundamentals.  A reconciliation of Net operating income to Net income applicable to common stock is provided in the table on page 2.  Additional information concerning this non-GAAP measure is included in our periodic filings with the Securities and Exchange Commission that are available in the “Investors – SEC Filings” section of CNO’s website, CNOinc.com.

    (2)

    Book value per diluted share reflects the potential dilution that could occur if outstanding stock options were exercised and restricted stock and performance units were vested.  The dilution from options, restricted shares and performance units is calculated using the treasury stock method.  Under this method, we assume the proceeds from the exercise of the options (or the unrecognized compensation expense with respect to restricted stock and performance units) will be used to purchase shares of our common stock at the closing market price on the last day of the period.  In addition, the calculation of this non-GAAP measure differs from the corresponding GAAP measure because accumulated other comprehensive income (loss) has been excluded from the value of capital used to determine this measure.  Management believes this non-GAAP measure is useful because it removes the volatility that arises from changes in the unrealized appreciation (depreciation) of our investments.

    (3)

    The calculation of this non-GAAP measure differs from the corresponding GAAP measure because accumulated other comprehensive income (loss) has been excluded from the value of capital used to determine this measure.  Management believes this non-GAAP measure is useful because it removes the volatility that arises from changes in the unrealized appreciation (depreciation) of our investments.

    (4)

    Measured by new annualized premiums for life and health products, which includes 10% of single premium whole life deposits and 100% of all other premiums (excluding annuities).  Sales of third-party products are excluded.

    (5)

    Net insurance liabilities are equal to total insurance liabilities less: (i) amounts related to reinsured business; (ii) deferred acquisition costs; (iii) present value of future profits; and (iv) the value of unexpired options credited to insurance liabilities.

    (6)

    The following summarizes the calculations of: (i) operating return on equity, excluding accumulated other comprehensive income (loss) and net operating loss carryforwards (a non-GAAP financial measure); (ii) operating return, excluding significant items, on equity, excluding accumulated other comprehensive income (loss) and net operating loss carryforwards (a non-GAAP financial measure); and (iii) return on equity are as follows (dollars in millions):

         

    Trailing twelve months ended

         

    2Q22

     

    2Q21

    Net operating income

    $        352.5

     

    $     362.9

               

    Net operating income, excluding significant items

    $        317.2

     

    $     366.1

               

    Net income

    $        464.0

     

    $     466.4

               

    Average common equity, excluding accumulated other

         
     

    comprehensive income (loss) and net operating loss

         
     

    carryforwards (a non-GAAP financial measure)

    $     3,069.1

     

    $  2,947.7

               

    Average common shareholders’ equity

    $     4,487.9

     

    $  5,114.1

               

    Operating return on equity, excluding accumulated other

         
     

    comprehensive income (loss) and net operating loss

         
     

    carryforwards (a non-GAAP financial measure)

    11.5 %

     

    12.3 %

               

    Operating return, excluding significant items, on equity, excluding

         
     

    accumulated other comprehensive income (loss) and net

         
     

    operating loss carryforwards (a non-GAAP financial measure)

    10.3 %

     

    12.4 %

               

    Return on equity

    10.3 %

     

    9.1 %

    The following summarizes: (i) operating earnings; (ii) significant items; (iii) operating earnings, excluding significant items; and (iv) net income (loss) (dollars in millions):

     
                   

    Net operating

           
               

    Net operating

     

    income,

           
               

    income,

     

    excluding

         

    Net

               

    excluding

     

    significant

         

    income –

       

    Net operating

     

    Significant

     

    significant

     

    items – trailing

     

    Net

     

    trailing

       

    income

     

    items

     

    items (a)

     

    four quarters

     

    income

     

    four quarters

    3Q20

     

    $                112.6

     

    $                     —

     

    $                112.6

     

    $                329.3

     

    $                129.2

     

    $                468.0

    4Q20

     

    86.0

     

    (6.4)

    (b)

    79.6

     

    338.2

     

    111.8

     

    301.8

    1Q21

     

    75.2

     

    6.1

    (c)

    81.3

     

    335.2

     

    147.4

     

    470.4

    2Q21

     

    89.1

     

    3.5

    (d)

    92.6

     

    366.1

     

    78.0

     

    466.4

    3Q21

     

    92.8

     

    2.3

    (e)

    95.1

     

    348.6

     

    99.8

     

    437.0

    4Q21

     

    108.5

     

    (20.2)

    (f)

    88.3

     

    357.3

     

    115.8

     

    441.0

    1Q22

     

    51.1

     

     

    51.1

     

    327.1

     

    112.3

     

    405.9

    2Q22

     

    100.1

     

    (17.4)

    (g)

    82.7

     

    317.2

     

    136.1

     

    464.0

                             

    (a)  See note (7) for additional information.

                             

    (b)  Comprised of: (i) $11.8 million of net favorable adjustments arising from our review of actuarial assumptions; (ii) $3.7 million unfavorable impact related to asset impairments; and (iii) an increase in tax expense of $1.7 million.

                             

    (c)  Comprised of: (i) $5.3 million from legal and regulatory matters; (ii) $2.5 million of transaction expenses related to the previously announced acquisition of Optavise, LLC (“Optavise”, formerly known as DirectPath, LLC prior to its name change in April 2022); and (iii) a decrease in tax expense of $1.7 million.

                             

    (d)  Comprised of: (i) $4.5 million from legal and regulatory matters; and (ii) a decrease in tax expense of $1.0 million.

                             

    (e)  Comprised of: (i) $3.0 million from legal and regulatory matters; and (ii) a decrease in tax expense of $.7 million.

                             

    (f)  Comprised of: (i) $25.9 million of net favorable adjustments arising from our review of actuarial assumptions; and (ii) an increase in tax expense of $5.7 million.

                             

    (g)  Comprised of: (i) an experience refund of $22.5 million related to a reinsurance agreement; and (ii) an increase in tax expense of $5.1 million.

    A reconciliation of pre-tax operating earnings (a non-GAAP financial measure) to net income is as follows (dollars in millions):

     
         

    Twelve months ended

         

    2Q22

     

    2Q21

    Pre-tax operating earnings (a non-GAAP financial measure)

    $       455.8

     

    $        468.6

    Income tax expense

    (103.3)

     

    (105.7)

    Net operating income

    352.5

     

    362.9

    Non-operating items:

         

    Net realized investment gains (losses) from sales, impairments and change in allowance for credit losses, net of related amortization

    (26.3)

     

    48.2

    Net change in market value of investments recognized in earnings

    (63.9)

     

    13.8

    Fair value changes in embedded derivative liabilities, net of related amortization

    200.5

     

    51.9

    Fair value changes related to the agent deferred compensation plan

    32.4

     

    10.1

    Other

    2.3

     

    8.9

    Non-operating income before taxes

    145.0

     

    132.9

        Income tax expense on non-operating income

    (33.5)

     

    (29.4)

    Net non-operating income

    111.5

     

    103.5

    Net income

    $       464.0

     

    $        466.4

               

    A reconciliation of consolidated capital, excluding accumulated other comprehensive income (loss) and net operating loss carryforwards (a non-GAAP financial measure) to common shareholders’ equity, is as follows (dollars in millions):

     
         

    1Q20

     

    2Q20

     

    3Q20

     

    4Q20

    Consolidated capital, excluding accumulated other comprehensive

                 
     

    income (loss) and net operating loss carryforwards

                 
     

    (a non-GAAP financial measure)

    $    2,701.2

     

    $    2,784.2

     

    $    2,905.1

     

    $    2,956.2

    Net operating loss carryforwards

    469.4

     

    426.8

     

    377.2

     

    341.9

    Accumulated other comprehensive income

    595.2

     

    1,520.2

     

    1,801.6

     

    2,186.1

    Common shareholders’ equity

    $    3,765.8

     

    $    4,731.2

     

    $    5,083.9

     

    $    5,484.2

                       
         

    1Q21

     

    2Q21

     

    3Q21

     

    4Q21

    Consolidated capital, excluding accumulated other comprehensive

                 
     

    income (loss) and net operating loss carryforwards

                 
     

    (a non-GAAP financial measure)

    $    3,019.5

     

    $    3,035.6

     

    $    3,036.3

     

    $    3,068.9

    Net operating loss carryforwards

    323.1

     

    292.9

     

    266.9

     

    243.7

    Accumulated other comprehensive income

    1,518.1

     

    1,995.5

     

    1,929.7

     

    1,947.1

    Common shareholders’ equity

    $    4,860.7

     

    $    5,324.0

     

    $    5,232.9

     

    $    5,259.7

                       
         

    1Q22

     

    2Q22

           

    Consolidated capital, excluding accumulated other comprehensive

                 
     

    income (loss) and net operating loss carryforwards

                 
     

    (a non-GAAP financial measure)

    $    3,072.2

     

    $    3,162.3

           

    Net operating loss carryforwards

    238.2

     

    214.7

           

    Accumulated other comprehensive income (loss)

    380.5

     

    (1,165.0)

           

    Common shareholders’ equity

    $    3,690.9

     

    $    2,212.0

           
                       

    A reconciliation of consolidated capital, excluding accumulated other comprehensive income (loss) and net operating loss carryforwards (a non-GAAP financial measure) to common shareholders’ equity, is as follows (dollars in millions):

     
         

    Trailing four quarter average

         

    2Q22

     

    2Q21

    Consolidated capital, excluding accumulated other comprehensive

         
     

    income (loss) and net operating loss carryforwards

         
     

    (a non-GAAP financial measure)

    $        3,069.1

     

    $        2,947.7

    Net operating loss carryforwards

    250.7

     

    350.5

    Accumulated other comprehensive income

    1,168.1

     

    1,815.9

    Common shareholders’ equity

    $        4,487.9

     

    $        5,114.1

    (7)

    The tables below summarize the financial impact of significant items on our net operating income.  Management believes that identifying the impact of these items enhances the understanding of our operating results (dollars in millions, except per share data).

       

    Three months ended

       

    June 30, 2022

       

    Actual

    results

     

    Significant

    items

     

    Excluding

    significant

    items

    Insurance product margin

               

    Annuity margin

     

    $         37.1

     

    $             —

     

    $          37.1

    Health margin

     

    113.4

     

     

    113.4

    Life margin

     

    56.8

     

     

    56.8

    Total insurance product margin

     

    207.3

     

     

    207.3

    Allocated expenses

     

    (152.2)

     

     

    (152.2)

    Income from insurance products

     

    55.1

     

     

    55.1

    Fee income

     

    3.2

     

     

    3.2

    Investment income not allocated to product lines

     

    68.5

     

     

    68.5

    Expenses not allocated to product lines

     

    2.9

     

    (22.5)

    (a)

    (19.6)

    Operating earnings before taxes

     

    129.7

     

    (22.5)

     

    107.2

    Income tax (expense) benefit on operating income

     

    (29.6)

     

    5.1

     

    (24.5)

    Net operating income

     

    $        100.1

     

    $         (17.4)

     

    $          82.7

                 

    Net operating income per diluted share

     

    $         0.85

     

    $         (0.14)

     

    $          0.71

    ___________

    (a)

    Comprised of an experience refund of $22.5 million related to a reinsurance agreement.

       

    Three months ended

       

    December 31, 2021

       

    Actual

    results

     

    Significant

    items

     

    Excluding

    significant

    items

    Insurance product margin

               

    Annuity margin

     

    $         93.9

     

    $         (26.9)

    (a)

    $          67.0

    Health margin

     

    129.5

     

     

    129.5

    Life margin

     

    30.4

     

    1.0

    (a)

    31.4

    Total insurance product margin

     

    253.8

     

    (25.9)

     

    227.9

    Allocated expenses

     

    (143.3)

     

     

    (143.3)

    Income from insurance products

     

    110.5

     

    (25.9)

     

    84.6

    Fee income

     

    2.9

     

     

    2.9

    Investment income not allocated to product lines

     

    42.8

     

     

    42.8

    Expenses not allocated to product lines

     

    (17.4)

     

     

    (17.4)

    Operating earnings before taxes

     

    138.8

     

    (25.9)

     

    112.9

    Income tax (expense) benefit on operating income

     

    (30.3)

     

    5.7

     

    (24.6)

    Net operating income

     

    $        108.5

     

    $         (20.2)

     

    $          88.3

                 

    Net operating income per diluted share

     

    $         0.87

     

    $         (0.16)

     

    $          0.71

    ___________

    (a)

    Adjustments arising from our comprehensive annual actuarial review of assumptions.

       

    Three months ended

       

    September 30, 2021

       

    Actual

    results

     

    Significant

    items

     

    Excluding

    significant

    items

    Insurance product margin

               

    Annuity margin

     

    $         52.5

     

    $             —

     

    $          52.5

    Health margin

     

    117.9

     

     

    117.9

    Life margin

     

    53.2

     

     

    53.2

    Total insurance product margin

     

    223.6

     

     

    223.6

    Allocated expenses

     

    (140.5)

     

     

    (140.5)

    Income from insurance products

     

    83.1

     

     

    83.1

    Fee income

     

    2.6

     

     

    2.6

    Investment income not allocated to product lines

     

    50.9

     

     

    50.9

    Expenses not allocated to product lines

     

    (17.3)

     

    3.0

    (a)

    (14.3)

    Operating earnings before taxes

     

    119.3

     

    3.0

     

    122.3

    Income tax (expense) benefit on operating income

     

    (26.5)

     

    (0.7)

     

    (27.2)

    Net operating income

     

    $         92.8

     

    $            2.3

     

    $          95.1

                 

    Net operating income per diluted share

     

    $         0.72

     

    $          0.02

     

    $          0.74

    ___________

    (a)

    Comprised of $3.0 million from legal and regulatory matters. 

       

    Three months ended

       

    June 30, 2021

       

    Actual

    results

     

    Significant

    items

     

    Excluding

    significant

    items

    Insurance product margin

               

    Annuity margin

     

    $         66.0

     

    $             —

     

    $          66.0

    Health margin

     

    120.9

     

     

    120.9

    Life margin

     

    39.7

     

     

    39.7

    Total insurance product margin

     

    226.6

     

     

    226.6

    Allocated expenses

     

    (141.6)

     

     

    (141.6)

    Income from insurance products

     

    85.0

     

     

    85.0

    Fee income

     

    6.6

     

     

    6.6

    Investment income not allocated to product lines

     

    47.8

     

     

    47.8

    Expenses not allocated to product lines

     

    (23.8)

     

    4.5

    (a)

    (19.3)

    Operating earnings before taxes

     

    115.6

     

    4.5

     

    120.1

    Income tax (expense) benefit on operating income

     

    (26.5)

     

    (1.0)

     

    (27.5)

    Net operating income

     

    $         89.1

     

    $            3.5

     

    $          92.6

                 

    Net operating income per diluted share

     

    $         0.66

     

    $          0.03

     

    $          0.69

    ___________

    (a)

    Comprised of $4.5 million from legal and regulatory matters. 

       

    Three months ended

       

    March 31, 2021

       

    Actual

    results

     

    Significant

    items

     

    Excluding

    significant

    items

    Insurance product margin

               

    Annuity margin

     

    $         57.9

     

    $             —

     

    $          57.9

    Health margin

     

    124.7

     

     

    124.7

    Life margin

     

    27.1

     

     

    27.1

    Total insurance product margin

     

    209.7

     

     

    209.7

    Allocated expenses

     

    (141.1)

     

     

    (141.1)

    Income from insurance products

     

    68.6

     

     

    68.6

    Fee income

     

    7.3

     

     

    7.3

    Investment income not allocated to product lines

     

    43.0

     

     

    43.0

    Expenses not allocated to product lines

     

    (22.0)

     

    7.8

    (a)

    (14.2)

    Operating earnings before taxes

     

    96.9

     

    7.8

     

    104.7

    Income tax (expense) benefit on operating income

     

    (21.7)

     

    (1.7)

     

    (23.4)

    Net operating income

     

    $         75.2

     

    $            6.1

     

    $          81.3

                 

    Net operating income per diluted share

     

    $         0.55

     

    $          0.04

     

    $          0.59

    ___________

    (a)

    Comprised of: (i) $5.3 million from legal and regulatory matters; and (ii) $2.5 million of transaction expenses related to the previously announced acquisition of Optavise. The legal and regulatory matters primarily consist of an increase to our liability for claims and interest pursuant to the Global Resolution Agreement, as we have now processed and verified most of the claims provided by the third party auditor allowing us to more accurately estimate the ultimate liability.

       

    Three months ended

       

    December 31, 2020

       

    Actual

    results

     

    Significant

    items

     

    Excluding

    significant

    items

    Insurance product margin

               

    Annuity margin

     

    $         68.1

     

    $         (16.1)

    (a)

    $          52.0

    Health margin

     

    125.2

     

     

    125.2

    Life margin

     

    37.3

     

    4.3

    (a)

    41.6

    Total insurance product margin

     

    230.6

     

    (11.8)

     

    218.8

    Allocated expenses

     

    (162.7)

     

     

    (162.7)

    Income from insurance products

     

    67.9

     

    (11.8)

     

    56.1

    Fee income

     

    2.9

     

     

    2.9

    Investment income not allocated to product lines

     

    57.8

     

     

    57.8

    Expenses not allocated to product lines

     

    (17.8)

     

    3.7

    (b)

    (14.1)

    Operating earnings before taxes

     

    110.8

     

    (8.1)

     

    102.7

    Income tax (expense) benefit on operating income

     

    (24.8)

     

    1.7

     

    (23.1)

    Net operating income

     

    $         86.0

     

    $          (6.4)

     

    $          79.6

                 

    Net operating income per diluted share

     

    $         0.61

     

    $         (0.04)

     

    $          0.57

    ___________

    (a)

    Adjustments arising from our comprehensive annual actuarial review of assumptions.

    (b)

    Unfavorable impact related to asset impairments.

    SOURCE CNO Financial Group, Inc.

    Originally Posted at CISION PRNewswire on August 1, 2022 by CNO Financial Group, Inc..

    Categories: Industry Articles
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