Delaware | 001-31792 | 75-3108137 |
(State or Other Jurisdiction of Incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02. | Results of Operations and Financial Condition. |
Item 9.01(d). | Financial Statements and Exhibits. |
99.1 | Press release dated October 29, 2012 related to financial results for the quarter ended September 30, 2012. |
99.2 | Quarterly Financial Supplement - 3Q2012. |
CNO Financial Group, Inc. | |||
Date: October 29, 2012 | |||
By: | /s/ John R. Kline | ||
John R. Kline | |||
Senior Vice President and Chief Accounting Officer | |||
Contact: | (News Media) Tony Zehnder +1.312.396.7086 |
(Investors) Erik Helding +1.317.817.4760 |
• | Sales, as defined by total new annualized premium (“NAP”) (2): $94.1 million, up 1% from 3Q11 |
• | Net income (loss) per diluted share: (2) cents, compared to 61 cents in 3Q11 |
• | Net operating income (1) per diluted share: 11 cents compared to 12 cents in 3Q11 |
• | Adjustments arising from our review of actuarial assumptions reflecting the low interest rate environment: after-tax charge of $27.5 million |
• | Increase to litigation reserves relating to a tentative settlement of cases involving the Other CNO Business segment: after-tax charge of $13.4 million |
• | Loss on extinguishment of debt related to the previously announced recapitalization transactions: after-tax charge of $176.4 million |
• | Reduction to the deferred tax valuation allowance reflecting the higher levels of operating income and taxable investment gains realized year-to-date: increase to net income of $143 million |
• | Unrestricted cash and investments held by our non-insurance companies were $313.6 million at September 30, 2012 and share repurchases of $41.4 million |
• | Sales, as defined by total NAP (2): $287.7 million, up 6% from the first nine months of 2011 |
• | Net income per diluted share of 45 cents, compared to 92 cents in the first nine months of 2011 |
• | Net operating income (1) per diluted share: 45 cents compared to 43 cents in the first nine months of 2011 |
• | The consolidated statutory risk-based capital ratio increased 3 percentage points to 361% during the first nine months of 2012, reflecting statutory earnings of $243 million and dividend payments to the non-insurance holding companies of $198 million |
Three months ended | |||||||
September 30, | |||||||
2012 | 2011 | ||||||
(Dollars in millions, except per-share data) | |||||||
EBIT (4): | |||||||
Bankers Life | $ | 80.6 | $ | 79.4 | |||
Washington National | 33.9 | 21.2 | |||||
Colonial Penn | (2.6 | ) | (1.3 | ) | |||
Other CNO Business | (53.6 | ) | 2.8 | ||||
EBIT from business segments | 58.3 | 102.1 | |||||
Corporate Operations, excluding corporate interest expense | (6.7 | ) | (27.5 | ) | |||
EBIT | 51.6 | 74.6 | |||||
Corporate interest expense | (16.3 | ) | (18.7 | ) | |||
Operating earnings before tax | 35.3 | 55.9 | |||||
Tax expense on operating income | 9.7 | 23.1 | |||||
Net operating income (1) | 25.6 | 32.8 | |||||
Net realized investment gains (net of related amortization and taxes) | 4.8 | 17.3 | |||||
Fair value changes in embedded derivative liabilities (net of related amortization and taxes) | (2.0 | ) | (12.9 | ) | |||
Loss on extinguishment of debt, net of income taxes | (176.4 | ) | (.7 | ) | |||
Net income (loss) before valuation allowance for deferred tax assets | (148.0 | ) | 36.5 | ||||
Decrease in valuation allowance for deferred tax assets | 143.0 | 143.0 | |||||
Net income (loss) | $ | (5.0 | ) | $ | 179.5 | ||
Per diluted share: | |||||||
Net operating income | $ | .11 | $ | .12 | |||
Net realized investment gains (net of related amortization and taxes) | .02 | .06 | |||||
Fair value changes in embedded derivative liabilities (net of related amortization and taxes) | (.01 | ) | (.04 | ) | |||
Loss on extinguishment of debt | (.76 | ) | — | ||||
Decrease in valuation allowance for deferred tax assets | .62 | .47 | |||||
Net income (loss) | $ | (.02 | ) | $ | .61 |
Three months ended | ||||||||||||
September 30, 2012* | ||||||||||||
Actual results | Significant items | Excluding significant items | ||||||||||
Net Operating Income (1): | ||||||||||||
Bankers Life | $ | 80.6 | $ | — | $ | 80.6 | ||||||
Washington National | 33.9 | — | 33.9 | |||||||||
Colonial Penn | (2.6 | ) | — | (2.6 | ) | |||||||
Other CNO Business | (53.6 | ) | 64.0 | 10.4 | ||||||||
EBIT from business segments | 58.3 | 64.0 | 122.3 | |||||||||
Corporate Operations, excluding corporate interest expense | (6.7 | ) | 10.0 | 3.3 | ||||||||
EBIT (4) | 51.6 | 74.0 | 125.6 | |||||||||
Corporate interest expense | (16.3 | ) | — | (16.3 | ) | |||||||
Operating earnings before tax | 35.3 | 74.0 | 109.3 | |||||||||
Tax expense on operating income | 9.7 | 29.7 | 39.4 | |||||||||
Net operating income | $ | 25.6 | $ | 44.3 | $ | 69.9 | ||||||
Net operating income per diluted share | $ | .11 | $ | .15 | $ | .26 | ** |
September 30, 2012 | December 31, 2011 | ||||||
(unaudited) | |||||||
ASSETS | |||||||
Investments: | |||||||
Fixed maturities, available for sale, at fair value (amortized cost: September 30, 2012 - $21,825.7; December 31, 2011 - $21,779.1) | $ | 24,742.3 | $ | 23,516.0 | |||
Equity securities at fair value (cost: September 30, 2012 - $174.0; December 31, 2011 - $177.0) | 180.0 | 175.1 | |||||
Mortgage loans | 1,597.2 | 1,602.8 | |||||
Policy loans | 274.1 | 279.7 | |||||
Trading securities | 199.4 | 91.6 | |||||
Investments held by securitization entities | 829.4 | 496.3 | |||||
Other invested assets | 265.0 | 202.8 | |||||
Total investments | 28,087.4 | 26,364.3 | |||||
Cash and cash equivalents - unrestricted | 415.3 | 436.0 | |||||
Cash and cash equivalents held by securitization entities | 48.2 | 74.4 | |||||
Accrued investment income | 317.8 | 288.7 | |||||
Present value of future profits | 642.4 | 697.7 | |||||
Deferred acquisition costs | 580.7 | 797.1 | |||||
Reinsurance receivables | 2,967.7 | 3,091.1 | |||||
Income tax assets, net | 594.5 | 865.4 | |||||
Assets held in separate accounts | 15.7 | 15.0 | |||||
Other assets | 338.6 | 292.2 | |||||
Total assets | $ | 34,008.3 | $ | 32,921.9 | |||
LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||
Liabilities: | |||||||
Liabilities for insurance products: | |||||||
Interest-sensitive products | $ | 12,930.3 | $ | 13,165.5 | |||
Traditional products | 10,669.9 | 10,482.7 | |||||
Claims payable and other policyholder funds | 977.6 | 1,034.3 | |||||
Liabilities related to separate accounts | 15.7 | 15.0 | |||||
Other liabilities | 709.0 | 556.3 | |||||
Investment borrowings | 1,650.9 | 1,676.5 | |||||
Borrowings related to variable interest entities | 766.9 | 519.9 | |||||
Notes payable – direct corporate obligations | 1,035.1 | 857.9 | |||||
Total liabilities | 28,755.4 | 28,308.1 | |||||
Commitments and Contingencies | |||||||
Shareholders' equity: | |||||||
Common stock ($0.01 par value, 8,000,000,000 shares authorized, shares issued and outstanding: September 30, 2012 - 229,506,690; December 31, 2011 – 241,304,503) | 2.3 | 2.4 | |||||
Additional paid-in capital | 4,251.2 | 4,361.9 | |||||
Accumulated other comprehensive income | 1,421.1 | 781.6 | |||||
Accumulated deficit | (421.7 | ) | (532.1 | ) | |||
Total shareholders' equity | 5,252.9 | 4,613.8 | |||||
Total liabilities and shareholders' equity | $ | 34,008.3 | $ | 32,921.9 |
Three months ended | Nine months ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
Revenues: | |||||||||||||||
Insurance policy income | $ | 690.2 | $ | 673.5 | $ | 2,071.3 | $ | 2,020.3 | |||||||
Net investment income: | |||||||||||||||
General account assets | 349.4 | 338.2 | 1,045.7 | 1,016.5 | |||||||||||
Policyholder and reinsurer accounts and other special-purpose portfolios | 39.1 | (54.9 | ) | 87.4 | (14.4 | ) | |||||||||
Realized investment gains: | |||||||||||||||
Net realized investment gains, excluding impairment losses | 32.2 | 33.5 | 98.4 | 64.9 | |||||||||||
Other-than-temporary impairment losses: | |||||||||||||||
Total other-than-temporary impairment losses | (23.1 | ) | (2.9 | ) | (34.5 | ) | (26.3 | ) | |||||||
Portion of other-than-temporary impairment losses recognized in accumulated other comprehensive income | — | — | — | — | |||||||||||
Net impairment losses recognized | (23.1 | ) | (2.9 | ) | (34.5 | ) | (26.3 | ) | |||||||
Total realized gains | 9.1 | 30.6 | 63.9 | 38.6 | |||||||||||
Fee revenue and other income | 5.2 | 4.9 | 13.6 | 12.5 | |||||||||||
Total revenues | 1,093.0 | 992.3 | 3,281.9 | 3,073.5 | |||||||||||
Benefits and expenses: | |||||||||||||||
Insurance policy benefits | 745.7 | 661.0 | 2,124.4 | 2,028.6 | |||||||||||
Interest expense | 29.2 | 27.9 | 86.7 | 86.0 | |||||||||||
Amortization | 60.9 | 58.6 | 215.8 | 224.1 | |||||||||||
Loss on extinguishment of debt | 198.5 | 1.1 | 199.2 | 3.1 | |||||||||||
Other operating costs and expenses | 217.5 | 182.0 | 617.8 | 527.8 | |||||||||||
Total benefits and expenses | 1,251.8 | 930.6 | 3,243.9 | 2,869.6 | |||||||||||
Income (loss) before income taxes | (158.8 | ) | 61.7 | 38.0 | 203.9 | ||||||||||
Income tax expense (benefit): | |||||||||||||||
Tax expense (benefit) on period income | (10.8 | ) | 25.2 | 61.2 | 75.6 | ||||||||||
Decrease in valuation allowance for deferred tax assets | (143.0 | ) | (143.0 | ) | (143.0 | ) | (143.0 | ) | |||||||
Net income (loss) | $ | (5.0 | ) | $ | 179.5 | $ | 119.8 | $ | 271.3 | ||||||
Earnings per common share: | |||||||||||||||
Basic: | |||||||||||||||
Weighted average shares outstanding | 231,481,000 | 246,965,000 | 236,555,000 | 249,673,000 | |||||||||||
Net income (loss) | $ | (.02 | ) | $ | .73 | $ | .51 | $ | 1.09 | ||||||
Diluted: | |||||||||||||||
Weighted average shares outstanding | 231,481,000 | 302,708,000 | 292,983,000 | 306,085,000 | |||||||||||
Net income (loss) | $ | (.02 | ) | $ | .61 | $ | .45 | $ | .92 |
Three months ended | Nine months ended | ||||||||||||||
EBIT (4) from In-force and New Business | September 30, | September 30, | |||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
Bankers Life segment: | |||||||||||||||
In-Force Business | $ | 110.1 | $ | 111.6 | $ | 309.8 | $ | 296.9 | |||||||
New Business | (29.5 | ) | (32.2 | ) | (82.6 | ) | (83.2 | ) | |||||||
Total | $ | 80.6 | $ | 79.4 | $ | 227.2 | $ | 213.7 | |||||||
Washington National segment: | |||||||||||||||
In-Force Business | $ | 36.3 | $ | 22.4 | $ | 97.9 | $ | 74.5 | |||||||
New Business | (2.4 | ) | (1.2 | ) | (5.4 | ) | (7.2 | ) | |||||||
Total | $ | 33.9 | $ | 21.2 | $ | 92.5 | $ | 67.3 | |||||||
Colonial Penn segment: | |||||||||||||||
In-Force Business | $ | 11.6 | $ | 11.6 | $ | 29.5 | $ | 29.7 | |||||||
New Business | (14.2 | ) | (12.9 | ) | (41.3 | ) | (36.2 | ) | |||||||
Total | $ | (2.6 | ) | $ | (1.3 | ) | $ | (11.8 | ) | $ | (6.5 | ) | |||
Other CNO Business segment: | |||||||||||||||
In-Force Business | $ | (53.6 | ) | $ | 2.8 | $ | (54.0 | ) | $ | 15.3 | |||||
New Business | — | — | — | — | |||||||||||
Total | $ | (53.6 | ) | $ | 2.8 | $ | (54.0 | ) | $ | 15.3 | |||||
Total Business segments: | |||||||||||||||
In-Force Business | $ | 104.4 | $ | 148.4 | $ | 383.2 | $ | 416.4 | |||||||
New Business | (46.1 | ) | (46.3 | ) | (129.3 | ) | (126.6 | ) | |||||||
Total EBIT from business segments | $ | 58.3 | $ | 102.1 | $ | 253.9 | $ | 289.8 |
Nine months ended | |||||||
September 30, | |||||||
2012 | 2011 | ||||||
EBIT (4): | |||||||
Bankers Life | $ | 227.2 | $ | 213.7 | |||
Washington National | 92.5 | 67.3 | |||||
Colonial Penn | (11.8 | ) | (6.5 | ) | |||
Other CNO Business | (54.0 | ) | 15.3 | ||||
EBIT from business segments | 253.9 | 289.8 | |||||
Corporate Operations, excluding corporate interest expense | (17.6 | ) | (39.3 | ) | |||
EBIT | 236.3 | 250.5 | |||||
Corporate interest expense | (50.4 | ) | (58.6 | ) | |||
Operating earnings before tax | 185.9 | 191.9 | |||||
Tax expense on operating income | 65.5 | 71.4 | |||||
Net operating income (1) | 120.4 | 120.5 | |||||
Net realized investment gains (net of related amortization and taxes) | 37.6 | 22.7 | |||||
Fair value changes in embedded derivative liabilities (net of related amortization and taxes) | (4.4 | ) | (12.9 | ) | |||
Loss on extinguishment of debt, net of income taxes | (176.8 | ) | (2.0 | ) | |||
Net income (loss) before valuation allowance for deferred tax assets | (23.2 | ) | 128.3 | ||||
Decrease in valuation allowance for deferred tax assets | 143.0 | 143.0 | |||||
Net income | $ | 119.8 | $ | 271.3 | |||
Per diluted share: | |||||||
Net operating income | $ | .45 | $ | .43 | |||
Net realized investment gains (net of related amortization and taxes) | .13 | .07 | |||||
Fair value changes in embedded derivative liabilities (net of related amortization and taxes) | (.02 | ) | (.04 | ) | |||
Loss on extinguishment of debt, net of income taxes | (.60 | ) | (.01 | ) | |||
Decrease in valuation allowance for deferred tax assets | .49 | .47 | |||||
Net income | $ | .45 | $ | .92 |
Three months ended | |||||||||||
September 30, 2011 | |||||||||||
Actual results | Significant items | Excluding significant items | |||||||||
Net Operating Income (1): | |||||||||||
Bankers Life | $ | 79.4 | $ | (14.0 | ) | $ | 65.4 | ||||
Washington National | 21.2 | 6.0 | 27.2 | ||||||||
Colonial Penn | (1.3 | ) | — | (1.3 | ) | ||||||
Other CNO Business | 2.8 | 13.0 | 15.8 | ||||||||
EBIT from business segments | 102.1 | 5.0 | 107.1 | ||||||||
Corporate Operations, excluding corporate interest expense | (27.5 | ) | 9.0 | (18.5 | ) | ||||||
EBIT (4) | 74.6 | 14.0 | 88.6 | ||||||||
Corporate interest expense | (18.7 | ) | — | (18.7 | ) | ||||||
Operating earnings before tax | 55.9 | 14.0 | 69.9 | ||||||||
Tax expense on operating income | 23.1 | 2.0 | 25.1 | ||||||||
Net operating income | $ | 32.8 | $ | 12.0 | $ | 44.8 | |||||
Net operating income per diluted share | $ | .12 | $ | .04 | $ | .16 |
* | This table summarizes the financial impact of significant items (as described in the segment results section of this press release) on our 3Q11 net operating income. |
Three months ended | |||||||
September 30, | |||||||
2012 | 2011 | ||||||
Bankers Life segment: | |||||||
Medicare supplement and other supplemental health | $ | 191.2 | $ | 190.2 | |||
Life | 81.3 | 65.5 | |||||
Long-term care | 136.1 | 137.8 | |||||
Annuity | 171.7 | 264.1 | |||||
Total | 580.3 | 657.6 | |||||
Washington National segment: | |||||||
Supplemental health | 114.5 | 108.4 | |||||
Medicare supplement and other supplemental health | 29.1 | 32.8 | |||||
Life | 3.0 | 4.1 | |||||
Total | 146.6 | 145.3 | |||||
Colonial Penn segment: | |||||||
Life | 53.0 | 49.2 | |||||
Supplemental health | 1.2 | 1.4 | |||||
Total | 54.2 | 50.6 | |||||
Other CNO Business segment: | |||||||
Life | 40.3 | 44.0 | |||||
Annuity | .9 | 3.3 | |||||
Other health | 6.1 | 6.7 | |||||
Total | 47.3 | 54.0 | |||||
Total collected premiums | $ | 828.4 | $ | 907.5 |
Three months ended | |||||||
September 30, | |||||||
2012 | 2011 | ||||||
Bankers Life segment: | |||||||
Medicare supplement and other supplemental health | $ | 21.1 | $ | 19.4 | |||
Life | 18.9 | 18.2 | |||||
Long-term care | 7.2 | 7.3 | |||||
Annuity | 10.4 | 15.9 | |||||
Total | 57.6 | 60.8 | |||||
Washington National segment: | |||||||
Supplemental health | 19.7 | 18.6 | |||||
Medicare supplement and other supplemental health | .2 | .3 | |||||
Life | 1.5 | .9 | |||||
Annuity | — | .2 | |||||
Total | 21.4 | 20.0 | |||||
Colonial Penn segment: | |||||||
Life | 15.1 | 12.7 | |||||
Total | 15.1 | 12.7 | |||||
Total new annualized premiums | $ | 94.1 | $ | 93.5 |
Three months ended | |||||
September 30, | |||||
2012 | 2011 | ||||
Bankers Life segment: | |||||
Medicare Supplement: | |||||
Earned premium | $185 million | $179 million | |||
Benefit ratio (7) | 67.8 | % | 68.4 | % | |
PDP: | |||||
Earned premium | $11 million | $13 million | |||
Benefit ratio (7) | 74.8 | % | 76.1 | % | |
Long-Term Care: | |||||
Earned premium | $139 million | $142 million | |||
Benefit ratio (7) | 121.4 | % | 109.7 | % | |
Interest-adjusted benefit ratio (a non-GAAP measure) (8) | 74.7 | % | 65.5 | % | |
Washington National segment: | |||||
Medicare Supplement: | |||||
Earned premium | $29 million | $33 million | |||
Benefit ratio (7) | 63.8 | % | 69.9 | % | |
Supplemental health: | |||||
Earned premium | $114 million | $108 million | |||
Benefit ratio (7) | 74.2 | % | 82.4 | % | |
Interest-adjusted benefit ratio (a non-GAAP measure) (8) | 47.5 | % | 53.9 | % |
(1) | Management believes that an analysis of Net income applicable to common stock before: (i) loss on extinguishment of debt, net of income taxes; (ii) net realized investment gains or losses, net of related amortization and income taxes; and (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 income 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. Net realized investment gains or losses include: (i) gains or losses on the sales of investments; (ii) other-than-temporary impairments recognized through net income; and (iii) changes in fair value of certain fixed maturity investments with embedded derivatives. Prior to June 30, 2011, certain of our trading securities were held to offset the income statement volatility caused by the effect of interest rate fluctuations on the value of embedded derivatives related to our fixed index annuity products. During 2Q2011, these securities were sold. A reconciliation of Net operating income to Net income applicable to common stock is provided in the tables on pages 2 and 9. 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, www.CNOinc.com. |
(2) | Measured by new annualized premium, which includes 6% of annuity and 10% of single premium whole life deposits and 100% of all other premiums. Medicare Advantage and Private-Fee-For-Service sales are not comparable to other sales and are therefore excluded in all periods. |
(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. The corresponding GAAP measures for debt-to-total capital were 16.5% and 15.7% at September 30, 2012 and December 31, 2011, respectively. |
(4) | Management believes that an analysis of earnings before net realized investment gains (losses), fair value changes due to fluctuations in the interest rates used to discount embedded derivative liabilities related to our fixed index annuities, corporate interest expense, loss on extinguishment of debt and taxes (“EBIT,” a non-GAAP financial measure) provides a clearer comparison of the operating results of the company quarter-over-quarter because these items are unrelated to the company's underlying fundamentals. A reconciliation of EBIT to Net Income applicable to common stock is provided in the tables on pages 2 and 9. |
(5) | 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. The corresponding GAAP measures for book value per common share were $22.89 and $19.12 at September 30, 2012 and December 31, 2011, respectively. |
(6) | Management believes that an analysis of EBIT, separated between in-force and new business provides increased clarity around the value drivers of our business, particularly since the new business results are significantly impacted by the rate of sales, mix of business and the distribution channel through which new sales are made. EBIT from new business includes pre-tax revenues and expenses associated with new sales of our insurance products during the first year after the sale is completed. EBIT from in-force business includes all pre-tax revenues and expenses associated with sales of insurance products that were completed more than one year before the end of the reporting period. The allocation of certain revenues and expenses between new and in-force business is based on estimates, which we believe are reasonable. |
(7) | The benefit ratio is calculated by dividing the related product's insurance policy benefits by insurance policy income. |
(8) | The interest-adjusted benefit ratio (a non-GAAP measure) is calculated by dividing the product's insurance policy benefits less imputed interest income on the accumulated assets backing the insurance liabilities by insurance policy income. Interest income is an important factor in measuring the performance of longer duration health products. The net cash flows generally cause an accumulation of amounts in the early years of a policy (accounted for as reserve increases), which will be paid out as benefits in later policy years (accounted for as reserve decreases). Accordingly, as the policies age, the benefit ratio will typically increase, but the increase in the change in reserve will be partially offset by the imputed interest income earned on the accumulated assets. The interest-adjusted benefit ratio reflects the effects of such interest income offset. Since interest income is an important factor in measuring the performance of these products, management believes a benefit ratio, which includes the effect of interest income, is useful in analyzing product performance. 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 Financial's website, www.CNOinc.com. |
Quarterly Financial Supplement - | |||||
3Q2012 | |||||
October 29, 2012 | |||||
Table of Contents | Page | |||
Consolidated balance sheet | 3 | |||
Consolidated statement of operations | 4 | |||
Operating results | 5 | |||
Computation of weighted average shares outstanding | 6 | |||
EBIT from Business Segments Summarized by In-Force and New Business | 7 | |||
Analyses of income before taxes and selected data: | ||||
Bankers Life | 8-10 | |||
Washington National | 11-13 | |||
Colonial Penn | 14-15 | |||
Other CNO Business | 16-18 | |||
Corporate Operations | 19 | |||
Premiums collected on insurance products: | ||||
Bankers Life | 20 | |||
Washington National | 21 | |||
Colonial Penn | 22 | |||
Other CNO Business | 23 | |||
New annualized premiums | 24 | |||
Statutory information | 25 | |||
Notes | 26 |
CNO Financial Group, Inc. | |||||||||||||||||||||||
Consolidated balance sheet (in millions) | Mar-11 | Jun-11 | Sep-11 | Dec-11 | Mar-12 | Jun-12 | Sep-12 | ||||||||||||||||
Assets | |||||||||||||||||||||||
Investments: | |||||||||||||||||||||||
Fixed maturities, available for sale, at fair value | $ | 20,852.2 | $ | 21,622.9 | $ | 23,016.7 | $ | 23,516.0 | $ | 23,777.7 | $ | 24,276.6 | $ | 24,742.3 | |||||||||
Equity securities at fair value | 105.4 | 129.6 | 164.3 | 175.1 | 176.5 | 187.3 | 180.0 | ||||||||||||||||
Mortgage loans | 1,751.3 | 1,752.8 | 1,648.2 | 1,602.8 | 1,546.7 | 1,550.9 | 1,597.2 | ||||||||||||||||
Policy loans | 281.6 | 279.5 | 279.6 | 279.7 | 277.8 | 274.7 | 274.1 | ||||||||||||||||
Trading securities | 403.1 | 83.5 | 81.8 | 91.6 | 122.3 | 114.8 | 199.4 | ||||||||||||||||
Investments held by variable interest entities | 401.6 | 414.0 | 453.5 | 496.3 | 564.7 | 789.3 | 829.4 | ||||||||||||||||
Other invested assets | 272.1 | 252.2 | 190.9 | 202.8 | 270.9 | 257.1 | 265.0 | ||||||||||||||||
Total investments | 24,067.3 | 24,534.5 | 25,835.0 | 26,364.3 | 26,736.6 | 27,450.7 | 28,087.4 | ||||||||||||||||
Cash and cash equivalents - unrestricted | 424.6 | 580.2 | 461.9 | 436.0 | 173.5 | 190.2 | 415.3 | ||||||||||||||||
Cash and cash equivalents held by variable interest entities | 27.1 | 25.3 | 19.7 | 74.4 | 65.8 | 88.6 | 48.2 | ||||||||||||||||
Accrued investment income | 336.7 | 314.3 | 301.2 | 288.7 | 313.6 | 296.4 | 317.8 | ||||||||||||||||
Present value of future profits | 970.1 | 936.5 | 714.2 | 697.7 | 675.4 | 658.1 | 642.4 | ||||||||||||||||
Deferred acquisition costs | 989.3 | 975.5 | 834.5 | 797.1 | 790.4 | 591.4 | 580.7 | ||||||||||||||||
Reinsurance receivables | 3,219.0 | 3,172.5 | 3,131.3 | 3,091.1 | 3,052.7 | 3,013.8 | 2,967.7 | ||||||||||||||||
Income tax assets, net | 1,090.4 | 998.4 | 918.4 | 865.4 | 819.9 | 679.7 | 594.5 | ||||||||||||||||
Assets held in separate accounts | 18.1 | 17.4 | 15.4 | 15.0 | 16.0 | 15.6 | 15.7 | ||||||||||||||||
Other assets | 413.0 | 323.6 | 289.6 | 292.2 | 402.3 | 395.8 | 338.6 | ||||||||||||||||
Total assets | $ | 31,555.6 | $ | 31,878.2 | $ | 32,521.2 | $ | 32,921.9 | $ | 33,046.2 | $ | 33,380.3 | $ | 34,008.3 | |||||||||
Liabilities | |||||||||||||||||||||||
Liabilities for insurance products: | |||||||||||||||||||||||
Interest-sensitive products | $ | 13,161.3 | $ | 13,152.8 | $ | 13,168.2 | $ | 13,165.5 | $ | 13,103.4 | $ | 12,956.3 | $ | 12,930.3 | |||||||||
Traditional products | 10,357.9 | 10,424.4 | 10,444.8 | 10,482.7 | 10,517.9 | 10,604.6 | 10,669.9 | ||||||||||||||||
Claims payable and other policyholder funds | 979.0 | 978.0 | 985.5 | 1,034.3 | 1,000.8 | 991.9 | 977.6 | ||||||||||||||||
Liabilities related to separate accounts | 18.1 | 17.4 | 15.4 | 15.0 | 16.0 | 15.6 | 15.7 | ||||||||||||||||
Other liabilities | 651.8 | 712.2 | 585.2 | 556.3 | 721.0 | 686.0 | 709.0 | ||||||||||||||||
Investment borrowings | 1,203.8 | 1,305.3 | 1,509.1 | 1,676.5 | 1,684.9 | 1,687.9 | 1,650.9 | ||||||||||||||||
Borrowings related to variable interest entities | 354.4 | 317.3 | 405.6 | 519.9 | 519.9 | 766.7 | 766.9 | ||||||||||||||||
Notes payable - direct corporate obligations | 949.8 | 934.5 | 871.2 | 857.9 | 799.3 | 778.2 | 1,035.1 | ||||||||||||||||
Total liabilities | 27,676.1 | 27,841.9 | 27,985.0 | 28,308.1 | 28,363.2 | 28,487.2 | 28,755.4 | ||||||||||||||||
Shareholders' equity | |||||||||||||||||||||||
Common stock | 2.5 | 2.5 | 2.4 | 2.4 | 2.4 | 2.3 | 2.3 | ||||||||||||||||
Additional paid-in capital | 4,426.1 | 4,414.3 | 4,379.4 | 4,361.9 | 4,345.6 | 4,312.0 | 4,251.2 | ||||||||||||||||
Accumulated deficit | (822.4 | ) | (776.0 | ) | (596.5 | ) | (532.1 | ) | (473.0 | ) | (412.0 | ) | (421.7 | ) | |||||||||
Total shareholders' equity before accumulated other comprehensive income | 3,606.2 | 3,640.8 | 3,785.3 | 3,832.2 | 3,875.0 | 3,902.3 | 3,831.8 | ||||||||||||||||
Accumulated other comprehensive income | 273.3 | 395.5 | 750.9 | 781.6 | 808.0 | 990.8 | 1,421.1 | ||||||||||||||||
Total shareholders' equity | 3,879.5 | 4,036.3 | 4,536.2 | 4,613.8 | 4,683.0 | 4,893.1 | 5,252.9 | ||||||||||||||||
Total liabilities and shareholders' equity | $ | 31,555.6 | $ | 31,878.2 | $ | 32,521.2 | $ | 32,921.9 | $ | 33,046.2 | $ | 33,380.3 | $ | 34,008.3 | |||||||||
1Q11 | 2Q11 | 3Q11 | 4Q11 | 1Q12 | 2Q12 | 3Q12 | |||||||||||||||||
Book value per share at period-end (1) (2) | $ | 14.34 | $ | 14.60 | $ | 15.56 | $ | 15.88 | $ | 16.20 | $ | 16.67 | $ | 16.70 | |||||||||
Book value per share assuming conversion of convertible securities (1) (3) | $ | 12.62 | $ | 12.79 | $ | 13.60 | $ | 13.87 | $ | 14.05 | $ | 14.41 | $ | 15.63 | |||||||||
CNO Financial Group, Inc. | ||||||||||||||||||||||||
Consolidated statement of operations (in millions) | 1Q11 | 2Q11 | 3Q11 | 4Q11 | 2011 | 1Q12 | 2Q12 | 3Q12 | ||||||||||||||||
Revenues | ||||||||||||||||||||||||
Insurance policy income | $ | 667.2 | $ | 679.6 | $ | 673.5 | $ | 670.2 | $ | 2,690.5 | $ | 686.3 | $ | 694.8 | $ | 690.2 | ||||||||
Net investment income (loss): | ||||||||||||||||||||||||
General account assets | 336.1 | 342.2 | 338.2 | 344.2 | 1,360.7 | 345.2 | 351.1 | 349.4 | ||||||||||||||||
Policyholder and reinsurer accounts and other special-purpose portfolios | 37.4 | 3.1 | (54.9 | ) | 7.8 | (6.6 | ) | 65.6 | (17.3 | ) | 39.1 | |||||||||||||
Realized investment gains (losses): | ||||||||||||||||||||||||
Net realized investment gains, excluding impairment losses | 18.4 | 13.0 | 33.5 | 31.5 | 96.4 | 30.8 | 35.4 | 32.2 | ||||||||||||||||
Other-than-temporary impairment losses: | ||||||||||||||||||||||||
Total other-than-temporary impairment losses | (13.3 | ) | (10.1 | ) | (2.9 | ) | (13.6 | ) | (39.9 | ) | (7.9 | ) | (3.5 | ) | (23.1 | ) | ||||||||
Portion of other-than-temporary impairment losses recognized in accumulated other comprehensive income | — | — | — | 5.3 | 5.3 | — | — | — | ||||||||||||||||
Net impairment losses recognized | (13.3 | ) | (10.1 | ) | (2.9 | ) | (8.3 | ) | (34.6 | ) | (7.9 | ) | (3.5 | ) | (23.1 | ) | ||||||||
Total realized gains | 5.1 | 2.9 | 30.6 | 23.2 | 61.8 | 22.9 | 31.9 | 9.1 | ||||||||||||||||
Fee revenue and other income | 3.4 | 4.2 | 4.9 | 5.7 | 18.2 | 3.9 | 4.5 | 5.2 | ||||||||||||||||
Total revenues | 1,049.2 | 1,032.0 | 992.3 | 1,051.1 | 4,124.6 | 1,123.9 | 1,065.0 | 1,093.0 | ||||||||||||||||
Benefits and expenses | ||||||||||||||||||||||||
Insurance policy benefits | 683.2 | 684.4 | 661.0 | 670.4 | 2,699.0 | 689.0 | 689.7 | 745.7 | ||||||||||||||||
Interest expense | 29.2 | 28.9 | 27.9 | 28.1 | 114.1 | 28.8 | 28.7 | 29.2 | ||||||||||||||||
Amortization | 94.9 | 70.6 | 58.6 | 73.3 | 297.4 | 86.6 | 68.3 | 60.9 | ||||||||||||||||
Loss on extinguishment of debt | 1.4 | 0.6 | 1.1 | 0.3 | 3.4 | 0.2 | 0.5 | 198.5 | ||||||||||||||||
Other operating costs and expenses | 170.1 | 175.7 | 182.0 | 176.7 | 704.5 | 227.0 | 173.3 | 217.5 | ||||||||||||||||
Total benefits and expenses | 978.8 | 960.2 | 930.6 | 948.8 | 3,818.4 | 1,031.6 | 960.5 | 1,251.8 | ||||||||||||||||
Income (loss) before income taxes | 70.4 | 71.8 | 61.7 | 102.3 | 306.2 | 92.3 | 104.5 | (158.8 | ) | |||||||||||||||
Income tax expense (benefit) on period income | 25.0 | 25.4 | 25.2 | 37.9 | 113.5 | 33.2 | 38.8 | (10.8 | ) | |||||||||||||||
Decrease in valuation allowance for deferred tax assets | — | — | (143.0 | ) | — | (143.0 | ) | — | — | (143.0 | ) | |||||||||||||
Net income (loss) | $ | 45.4 | $ | 46.4 | $ | 179.5 | $ | 64.4 | $ | 335.7 | $ | 59.1 | $ | 65.7 | $ | (5.0 | ) | |||||||
CNO Financial Group, Inc. | ||||||||||||||||||||||||
Operating results ($ in millions, except per share amounts) | 1Q11 | 2Q11 | 3Q11 | 4Q11 | 2011 | 1Q12 | 2Q12 | 3Q12 | ||||||||||||||||
EBIT (4): | ||||||||||||||||||||||||
Bankers Life | $ | 62.2 | $ | 72.1 | $ | 79.4 | $ | 77.2 | $ | 290.9 | $ | 70.5 | $ | 76.1 | $ | 80.6 | ||||||||
Washington National | 24.3 | 21.8 | 21.2 | 28.8 | 96.1 | 24.7 | 33.9 | 33.9 | ||||||||||||||||
Colonial Penn | (5.7 | ) | 0.5 | (1.3 | ) | 1.8 | (4.7 | ) | (9.8 | ) | 0.6 | (2.6 | ) | |||||||||||
Other CNO Business | 7.4 | 5.1 | 2.8 | — | 15.3 | (2.3 | ) | 1.9 | (53.6 | ) | ||||||||||||||
EBIT from business segments | 88.2 | 99.5 | 102.1 | 107.8 | 397.6 | 83.1 | 112.5 | 58.3 | ||||||||||||||||
Corporate operations, excluding corporate interest expense | (0.5 | ) | (11.3 | ) | (27.5 | ) | (8.4 | ) | (47.7 | ) | (1.8 | ) | (9.1 | ) | (6.7 | ) | ||||||||
EBIT | 87.7 | 88.2 | 74.6 | 99.4 | 349.9 | 81.3 | 103.4 | 51.6 | ||||||||||||||||
Corporate interest expense | (20.6 | ) | (19.3 | ) | (18.7 | ) | (17.7 | ) | (76.3 | ) | (17.5 | ) | (16.6 | ) | (16.3 | ) | ||||||||
Income before loss on extinguishment of debt, net realized investment gains, fair value changes in embedded derivative liabilities and taxes | 67.1 | 68.9 | 55.9 | 81.7 | 273.6 | 63.8 | 86.8 | 35.3 | ||||||||||||||||
Tax expense on operating income | 23.9 | 24.4 | 23.1 | 30.7 | 102.1 | 23.2 | 32.6 | 9.7 | ||||||||||||||||
Net operating income (5) | 43.2 | 44.5 | 32.8 | 51.0 | 171.5 | 40.6 | 54.2 | 25.6 | ||||||||||||||||
Net realized investment gains (net of related amortization and taxes) | 3.1 | 2.3 | 17.3 | 14.0 | 36.7 | 14.1 | 18.7 | 4.8 | ||||||||||||||||
Fair value changes in embedded derivative liabilities (net of related amortization and taxes) | — | — | (12.9 | ) | (0.4 | ) | (13.3 | ) | 4.5 | (6.9 | ) | (2.0 | ) | |||||||||||
Loss on extinguishment of debt, net of income taxes | (0.9 | ) | (0.4 | ) | (0.7 | ) | (0.2 | ) | (2.2 | ) | (0.1 | ) | (0.3 | ) | (176.4 | ) | ||||||||
Net income (loss) before valuation allowance for deferred tax assets | 45.4 | 46.4 | 36.5 | 64.4 | 192.7 | 59.1 | 65.7 | (148.0 | ) | |||||||||||||||
Decrease in valuation allowance for deferred tax assets | — | — | 143.0 | — | 143.0 | — | — | 143.0 | ||||||||||||||||
Net income (loss) | $ | 45.4 | $ | 46.4 | $ | 179.5 | $ | 64.4 | $ | 335.7 | $ | 59.1 | $ | 65.7 | $ | (5.0 | ) | |||||||
Per diluted share: | ||||||||||||||||||||||||
Net operating income | $ | .15 | $ | .15 | $ | .12 | $ | .18 | $ | .61 | $ | .15 | $ | .20 | $ | .11 | ||||||||
Net realized investment gains, net of related amortization and taxes | .01 | .01 | .06 | .05 | .12 | .05 | .06 | .02 | ||||||||||||||||
Fair value changes in embedded derivative liabilities, net of related amortization and taxes | — | — | (.04 | ) | — | (.04 | ) | .01 | (.02 | ) | (.01 | ) | ||||||||||||
Loss on extinguishment of debt, net of income taxes | — | — | — | — | (.01 | ) | — | — | (.76 | ) | ||||||||||||||
Decrease in valuation allowance for deferred tax assets | — | — | .47 | — | .47 | — | — | .62 | ||||||||||||||||
Diluted earnings (loss) per share | $ | .16 | $ | .16 | $ | .61 | $ | .23 | $ | 1.15 | $ | .21 | $ | .24 | $ | (.02 | ) | |||||||
CNO Financial Group, Inc. | |||||||||||||||||
Computation of weighted average shares outstanding | 1Q11 | 2Q11 | 3Q11 | 4Q11 | 2011 | 1Q12 | 2Q12 | 3Q12 | |||||||||
(000s) | |||||||||||||||||
Basic | |||||||||||||||||
Shares outstanding, beginning of period | 251,084.2 | 251,404.9 | 249,415.2 | 243,247.3 | 251,084.2 | 241,304.5 | 239,219.4 | 234,026.4 | |||||||||
Weighted average shares issued during the period: | |||||||||||||||||
Shares repurchased | — | (590.3 | ) | (2,511.6 | ) | (720.5 | ) | (3,700.7 | ) | (470.7 | ) | (2,078.2 | ) | (2,689.9 | ) | ||
Shares issued under stock option and restricted stock plans | 52.6 | 118.5 | 61.8 | 268.6 | 694.4 | 83.5 | 148.2 | 144.0 | |||||||||
Shares withheld for the payment of taxes on the vesting of restricted stock | (16.3 | ) | — | (0.3 | ) | (6.2 | ) | (125.9 | ) | (22.2 | ) | (0.5 | ) | — | |||
Weighted average basic shares outstanding during the period | 251,120.5 | 250,933.1 | 246,965.1 | 242,789.2 | 247,952.0 | 240,895.1 | 237,288.9 | 231,480.5 | |||||||||
Basic shares outstanding, end of period | 251,404.9 | 249,415.2 | 243,247.3 | 241,304.5 | 241,304.5 | 239,219.4 | 234,026.4 | 229,506.7 | |||||||||
Diluted | |||||||||||||||||
Weighted average basic shares outstanding | 251,120.5 | 250,933.1 | 246,965.1 | 242,789.2 | 247,952.0 | 240,895.1 | 237,288.9 | 231,480.5 | |||||||||
Common stock equivalent shares related to: | |||||||||||||||||
Convertible debentures | 53,366.9 | 53,366.9 | 53,366.9 | 53,366.9 | 53,366.9 | 53,366.9 | 53,377.5 | — | |||||||||
Stock option and restricted stock plans | 2,748.3 | 3,035.8 | 2,352.9 | 1,914.6 | 2,512.9 | 2,582.2 | 2,366.7 | — | |||||||||
Warrants | 262.4 | 712.4 | 22.9 | — | 249.4 | 498.6 | 441.5 | — | |||||||||
Weighted average diluted shares outstanding during the period | 307,498.1 | 308,048.2 | 302,707.8 | 298,070.7 | 304,081.2 | 297,342.8 | 293,474.6 | 231,480.5 | (a) | ||||||||
Diluted shares outstanding, end of period | 307,782.4 | 306,530.3 | 298,990.0 | 296,586.0 | 296,586.0 | 295,667.1 | 290,212.1 | 250,819.6 | |||||||||
EBIT from Business Segments Summarized by In-Force and New Business (6) | ||||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||
CNO Financial Group, Inc. | ||||||||||||||||||||||||
EBIT from In-force Business | 1Q11 | 2Q11 | 3Q11 | 4Q11 | 2011 | 1Q12 | 2Q12 | 3Q12 | ||||||||||||||||
Revenues | ||||||||||||||||||||||||
Insurance policy income | $ | 584.0 | $ | 594.3 | $ | 585.3 | $ | 583.6 | $ | 2,347.2 | $ | 597.0 | $ | 601.7 | $ | 594.4 | ||||||||
Net investment income (loss) | 349.8 | 331.7 | 283.8 | 338.7 | 1,304.0 | 375.9 | 322.3 | 357.4 | ||||||||||||||||
Fee revenue and other income | 1.9 | 2.4 | 2.7 | 3.1 | 10.1 | 1.9 | 2.4 | 3.3 | ||||||||||||||||
Total revenues | 935.7 | 928.4 | 871.8 | 925.4 | 3,661.3 | 974.8 | 926.4 | 955.1 | ||||||||||||||||
Benefits and expenses | ||||||||||||||||||||||||
Insurance policy benefits | 624.8 | 626.3 | 569.4 | 609.1 | 2,429.6 | 635.3 | 611.7 | 671.3 | ||||||||||||||||
Interest expense | 6.1 | 6.1 | 6.7 | 6.9 | 25.8 | 7.2 | 7.2 | 7.0 | ||||||||||||||||
Amortization | 85.3 | 61.9 | 55.5 | 63.4 | 266.1 | 73.1 | 64.6 | 54.1 | ||||||||||||||||
Other operating costs and expenses | 90.1 | 95.5 | 91.8 | 101.4 | 378.8 | 130.3 | 93.0 | 118.3 | ||||||||||||||||
Total benefits and expenses | 806.3 | 789.8 | 723.4 | 780.8 | 3,100.3 | 845.9 | 776.5 | 850.7 | ||||||||||||||||
EBIT from In-Force Business | $ | 129.4 | $ | 138.6 | $ | 148.4 | $ | 144.6 | $ | 561.0 | $ | 128.9 | $ | 149.9 | $ | 104.4 | ||||||||
EBIT from New Business | ||||||||||||||||||||||||
Revenues | ||||||||||||||||||||||||
Insurance policy income | $ | 83.2 | $ | 85.3 | $ | 88.2 | $ | 86.6 | $ | 343.3 | $ | 89.3 | $ | 93.1 | $ | 95.8 | ||||||||
Net investment income (loss) | 11.1 | 9.1 | 6.2 | 10.6 | 37.0 | 11.7 | 4.3 | 11.7 | ||||||||||||||||
Fee revenue and other income | .9 | 1.3 | 1.5 | 1.9 | 5.6 | 1.4 | 1.4 | 1.2 | ||||||||||||||||
Total revenues | 95.2 | 95.7 | 95.9 | 99.1 | 385.9 | 102.4 | 98.8 | 108.7 | ||||||||||||||||
Benefits and expenses | ||||||||||||||||||||||||
Insurance policy benefits | 58.4 | 58.1 | 57.7 | 60.8 | 235.0 | 65.3 | 60.3 | 69.8 | ||||||||||||||||
Interest expense | — | — | — | — | — | — | — | — | ||||||||||||||||
Amortization | 9.2 | 9.3 | 13.3 | 8.1 | 39.9 | 7.7 | 7.7 | 6.7 | ||||||||||||||||
Other operating costs and expenses | 68.8 | 67.4 | 71.2 | 67.0 | 274.4 | 75.2 | 68.2 | 78.3 | ||||||||||||||||
Total benefits and expenses | 136.4 | 134.8 | 142.2 | 135.9 | 549.3 | 148.2 | 136.2 | 154.8 | ||||||||||||||||
EBIT from New Business | $ | (41.2 | ) | $ | (39.1 | ) | $ | (46.3 | ) | $ | (36.8 | ) | $ | (163.4 | ) | $ | (45.8 | ) | $ | (37.4 | ) | $ | (46.1 | ) |
EBIT from In-Force and New Business | ||||||||||||||||||||||||
Revenues | ||||||||||||||||||||||||
Insurance policy income | $ | 667.2 | $ | 679.6 | $ | 673.5 | $ | 670.2 | $ | 2,690.5 | $ | 686.3 | $ | 694.8 | $ | 690.2 | ||||||||
Net investment income (loss) | 360.9 | 340.8 | 290.0 | 349.3 | 1,341.0 | 387.6 | 326.6 | 369.1 | ||||||||||||||||
Fee revenue and other income | 2.8 | 3.7 | 4.2 | 5.0 | 15.7 | 3.3 | 3.8 | 4.5 | ||||||||||||||||
Total revenues | 1,030.9 | 1,024.1 | 967.7 | 1,024.5 | 4,047.2 | 1,077.2 | 1,025.2 | 1,063.8 | ||||||||||||||||
Benefits and expenses | ||||||||||||||||||||||||
Insurance policy benefits | 683.2 | 684.4 | 627.1 | 669.9 | 2,664.6 | 700.6 | 672.0 | 741.1 | ||||||||||||||||
Interest expense | 6.1 | 6.1 | 6.7 | 6.9 | 25.8 | 7.2 | 7.2 | 7.0 | ||||||||||||||||
Amortization | 94.5 | 71.2 | 68.8 | 71.5 | 306.0 | 80.8 | 72.3 | 60.8 | ||||||||||||||||
Other operating costs and expenses | 158.9 | 162.9 | 163.0 | 168.4 | 653.2 | 205.5 | 161.2 | 196.6 | ||||||||||||||||
Total benefits and expenses | 942.7 | 924.6 | 865.6 | 916.7 | 3,649.6 | 994.1 | 912.7 | 1,005.5 | ||||||||||||||||
EBIT from In-Force and New Business | $ | 88.2 | $ | 99.5 | $ | 102.1 | $ | 107.8 | $ | 397.6 | $ | 83.1 | $ | 112.5 | $ | 58.3 | ||||||||
CNO Financial Group, Inc. | ||||||||||||||||||||||||
Bankers Life | ||||||||||||||||||||||||
Analysis of income before taxes (in millions) | 1Q11 | 2Q11 | 3Q11 | 4Q11 | 2011 | 1Q12 | 2Q12 | 3Q12 | ||||||||||||||||
Insurance policy income | $ | 400.0 | $ | 409.6 | $ | 404.6 | $ | 398.2 | $ | 1,612.4 | $ | 406.5 | $ | 419.0 | $ | 416.1 | ||||||||
Net investment income (loss): | ||||||||||||||||||||||||
General account invested assets | 191.3 | 196.5 | 194.3 | 198.2 | 780.3 | 200.3 | 204.9 | 205.4 | ||||||||||||||||
Fixed index products | 18.3 | 0.4 | (36.3 | ) | 3.6 | (14.0 | ) | 34.6 | (19.3 | ) | 16.2 | |||||||||||||
Net realized investment gains (losses) | 6.6 | (1.8 | ) | 26.5 | 16.6 | 47.9 | 10.6 | 17.9 | 14.1 | |||||||||||||||
Fee revenue and other income | 2.3 | 3.3 | 3.6 | 4.6 | 13.8 | 2.9 | 3.3 | 4.0 | ||||||||||||||||
Total revenues | 618.5 | 608.0 | 592.7 | 621.2 | 2,440.4 | 654.9 | 625.8 | 655.8 | ||||||||||||||||
Insurance policy benefits | 337.6 | 351.3 | 333.6 | 339.2 | 1,361.7 | 335.2 | 366.3 | 362.4 | ||||||||||||||||
Insurance policy benefits - fair value changes in embedded derivative liabilities | — | — | 30.7 | 0.5 | 31.2 | (11.0 | ) | 16.7 | 4.6 | |||||||||||||||
Amounts added to policyholder account balances: | ||||||||||||||||||||||||
Annuity products and interest-sensitive life products other than fixed index products | 40.8 | 40.5 | 40.0 | 39.9 | 161.2 | 38.5 | 36.6 | 36.9 | ||||||||||||||||
Fixed index products | 26.4 | 17.1 | (13.0 | ) | 16.7 | 47.2 | 47.2 | (6.2 | ) | 35.3 | ||||||||||||||
Amortization related to operations | 68.5 | 46.9 | 44.1 | 46.8 | 206.3 | 56.9 | 50.5 | 35.6 | ||||||||||||||||
Amortization related to net realized investment gains (losses) | 0.8 | (0.3 | ) | 3.0 | 1.7 | 5.2 | 0.9 | 1.7 | 1.4 | |||||||||||||||
Amortization related to fair value changes in embedded derivative liabilities | — | — | (11.5 | ) | 0.1 | (11.4 | ) | 4.2 | (6.3 | ) | (1.6 | ) | ||||||||||||
Interest expense on investment borrowings | 1.2 | 1.1 | 1.2 | 1.3 | 4.8 | 1.4 | 1.4 | 1.3 | ||||||||||||||||
Other operating costs and expenses | 75.2 | 80.8 | 80.9 | 83.5 | 320.4 | 94.6 | 83.2 | 89.6 | ||||||||||||||||
Total benefits and expenses | 550.5 | 537.4 | 509.0 | 529.7 | 2,126.6 | 567.9 | 543.9 | 565.5 | ||||||||||||||||
Income before income taxes | $ | 68.0 | $ | 70.6 | $ | 83.7 | $ | 91.5 | $ | 313.8 | $ | 87.0 | $ | 81.9 | $ | 90.3 | ||||||||
Health underwriting margins (in millions) | 1Q11 | 2Q11 | 3Q11 | 4Q11 | 2011 | 1Q12 | 2Q12 | 3Q12 | ||||||||||||||||
Medicare supplement: | ||||||||||||||||||||||||
Earned premium | $ | 181.0 | $ | 179.5 | $ | 179.2 | $ | 178.6 | $ | 718.3 | $ | 182.7 | $ | 184.1 | $ | 185.1 | ||||||||
Benefit ratio | 67.2 | % | 69.8 | % | 68.4 | % | 70.5 | % | 69.0 | % | 64.5 | % | 72.2 | % | 67.8 | % | ||||||||
Underwriting margin (earned premium less policy benefits) | $ | 59.3 | $ | 54.2 | $ | 56.7 | $ | 52.7 | $ | 222.9 | $ | 64.9 | $ | 51.2 | $ | 59.6 | ||||||||
PDP: | ||||||||||||||||||||||||
Earned premium | $ | 14.4 | $ | 16.7 | $ | 12.9 | $ | 10.5 | $ | 54.5 | $ | 10.8 | $ | 17.7 | $ | 11.4 | ||||||||
Benefit ratio | 89.5 | % | 88.6 | % | 76.1 | % | 72.6 | % | 82.8 | % | 85.9 | % | 64.2 | % | 74.8 | % | ||||||||
Underwriting margin (earned premium less policy benefits) | $ | 1.5 | $ | 1.9 | $ | 3.1 | $ | 2.9 | $ | 9.4 | $ | 1.6 | $ | 6.3 | $ | 2.9 | ||||||||
PFFS: | ||||||||||||||||||||||||
Earned premium | $ | — | $ | 3.6 | $ | — | $ | — | $ | 3.6 | $ | — | $ | — | $ | — | ||||||||
Benefit ratio | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | ||||||||||||||||
Underwriting margin (earned premium less policy benefits) | $ | 0.7 | $ | 3.7 | $ | 0.5 | $ | 0.3 | $ | 5.2 | $ | 0.1 | $ | 0.1 | $ | 0.1 | ||||||||
Long-term care: | ||||||||||||||||||||||||
Earned premium | $ | 144.4 | $ | 143.4 | $ | 142.0 | $ | 141.1 | $ | 570.9 | $ | 140.6 | $ | 139.7 | $ | 138.5 | ||||||||
Benefit ratio before interest income on reserves | 113.4 | % | 115.0 | % | 109.7 | % | 112.1 | % | 112.6 | % | 110.9 | % | 121.4 | % | 121.4 | % | ||||||||
Interest-adjusted benefit ratio | 70.8 | % | 71.6 | % | 65.5 | % | 67.3 | % | 68.8 | % | 65.5 | % | 75.4 | % | 74.7 | % | ||||||||
Underwriting margin (earned premium plus interest income on reserves less policy benefits) | $ | 42.2 | $ | 40.7 | $ | 49.1 | $ | 46.1 | $ | 178.1 | $ | 48.5 | $ | 34.4 | $ | 35.0 | ||||||||
CNO Financial Group, Inc. | ||||||||||||||||||||||||
Bankers Life | ||||||||||||||||||||||||
Average liabilities for insurance products (in millions) (continued) | 1Q11 | 2Q11 | 3Q11 | 4Q11 | 2011 | 1Q12 | 2Q12 | 3Q12 | ||||||||||||||||
Annuities: | ||||||||||||||||||||||||
Mortality based | $ | 245.9 | $ | 243.1 | $ | 240.0 | $ | 236.7 | $ | 241.4 | $ | 233.8 | $ | 231.7 | $ | 229.4 | ||||||||
Fixed index | 2,147.7 | 2,268.3 | 2,412.9 | 2,573.0 | 2,350.5 | 2,707.4 | 2,798.2 | 2,872.1 | ||||||||||||||||
Deposit based | 4,832.4 | 4,793.2 | 4,750.5 | 4,699.6 | 4,768.9 | 4,644.9 | 4,577.8 | 4,515.4 | ||||||||||||||||
Medicare supplement and other supplemental health | 4,489.6 | 4,529.9 | 4,564.0 | 4,606.8 | 4,547.6 | 4,634.5 | 4,653.2 | 4,710.0 | ||||||||||||||||
Life: | ||||||||||||||||||||||||
Interest sensitive | 420.5 | 425.2 | 431.8 | 437.1 | 428.6 | 441.4 | 444.7 | 450.8 | ||||||||||||||||
Non-interest sensitive | 397.8 | 416.8 | 437.7 | 460.5 | 428.2 | 483.0 | 506.2 | 532.9 | ||||||||||||||||
Total average liabilities for insurance products, net of reinsurance ceded | $ | 12,533.9 | $ | 12,676.5 | $ | 12,836.9 | $ | 13,013.7 | $ | 12,765.2 | $ | 13,145.0 | $ | 13,211.8 | $ | 13,310.6 | ||||||||
Present value of future profits (in millions) | 1Q11 | 2Q11 | 3Q11 | 4Q11 | 2011 | 1Q12 | 2Q12 | 3Q12 | ||||||||||||||||
Balance, beginning of period | $ | 467.2 | $ | 442.7 | $ | 422.0 | $ | 208.9 | $ | 467.2 | $ | 201.8 | $ | 189.8 | $ | 181.8 | ||||||||
Amortization related to operations | (24.6 | ) | (16.9 | ) | (14.3 | ) | (14.2 | ) | (70.0 | ) | (18.7 | ) | (13.6 | ) | (7.0 | ) | ||||||||
Amortization related to net realized investment (gains) losses | (0.1 | ) | 0.1 | (0.2 | ) | (0.2 | ) | (0.4 | ) | (0.1 | ) | — | (0.1 | ) | ||||||||||
Adjustment related to unrealized (gain) or loss on fixed maturities, available for sale | 0.2 | (3.9 | ) | (198.6 | ) | 7.3 | (195.0 | ) | 6.8 | 5.6 | 0.4 | |||||||||||||
Balance, end of period | $ | 442.7 | $ | 422.0 | $ | 208.9 | $ | 201.8 | $ | 201.8 | $ | 189.8 | $ | 181.8 | $ | 175.1 | ||||||||
Deferred acquisition costs (in millions) | 1Q11 | 2Q11 | 3Q11 | 4Q11 | 2011 | 1Q12 | 2Q12 | 3Q12 | ||||||||||||||||
Balance, beginning of period | $ | 662.3 | $ | 657.7 | $ | 648.2 | $ | 527.1 | $ | 662.3 | $ | 491.0 | $ | 486.5 | $ | 290.1 | ||||||||
Deferred acquisition expenses | 40.4 | 40.2 | 45.8 | 39.9 | 166.3 | 34.3 | 34.4 | 35.2 | ||||||||||||||||
Amortization related to operations | (43.9 | ) | (30.0 | ) | (29.8 | ) | (32.6 | ) | (136.3 | ) | (38.2 | ) | (36.9 | ) | (28.6 | ) | ||||||||
Amortization related to net realized investment (gains) losses | (0.7 | ) | 0.2 | (2.8 | ) | (1.5 | ) | (4.8 | ) | (0.8 | ) | (1.7 | ) | (1.3 | ) | |||||||||
Amortization related to fair value changes in embedded derivative liabilities | — | — | 11.5 | (0.1 | ) | 11.4 | (4.2 | ) | 6.3 | 1.6 | ||||||||||||||
Adjustment related to unrealized (gain) or loss on fixed maturities, available for sale | (0.4 | ) | (19.9 | ) | (145.8 | ) | (41.8 | ) | (207.9 | ) | 4.4 | (198.5 | ) | (9.6 | ) | |||||||||
Balance, end of period | $ | 657.7 | $ | 648.2 | $ | 527.1 | $ | 491.0 | $ | 491.0 | $ | 486.5 | $ | 290.1 | $ | 287.4 | ||||||||
Bankers Life Segment EBIT Summarized by In-Force and New Business (6) | ||||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||
CNO Financial Group, Inc. | ||||||||||||||||||||||||
EBIT from In-force Business | 1Q11 | 2Q11 | 3Q11 | 4Q11 | 2011 | 1Q12 | 2Q12 | 3Q12 | ||||||||||||||||
Revenues | ||||||||||||||||||||||||
Insurance policy income | $ | 338.8 | $ | 346.3 | $ | 339.0 | $ | 334.8 | $ | 1,358.9 | $ | 341.8 | $ | 351.6 | $ | 345.7 | ||||||||
Net investment income (loss) | 198.5 | 187.8 | 151.8 | 191.2 | 729.3 | 223.2 | 181.3 | 209.9 | ||||||||||||||||
Fee revenue and other income | 1.4 | 2.0 | 2.1 | 2.7 | 8.2 | 1.5 | 1.9 | 2.8 | ||||||||||||||||
Total revenues | 538.7 | 536.1 | 492.9 | 528.7 | 2,096.4 | 566.5 | 534.8 | 558.4 | ||||||||||||||||
Benefits and expenses | ||||||||||||||||||||||||
Insurance policy benefits | 356.9 | 361.3 | 313.7 | 346.1 | 1,378.0 | 367.4 | 348.7 | 377.0 | ||||||||||||||||
Interest expense | 1.2 | 1.1 | 1.2 | 1.3 | 4.8 | 1.4 | 1.4 | 1.3 | ||||||||||||||||
Amortization | 60.1 | 38.5 | 31.6 | 39.7 | 169.9 | 50.0 | 43.7 | 29.9 | ||||||||||||||||
Other operating costs and expenses | 33.8 | 36.6 | 34.8 | 38.9 | 144.1 | 50.6 | 38.4 | 40.1 | ||||||||||||||||
Total benefits and expenses | 452.0 | 437.5 | 381.3 | 426.0 | 1,696.8 | 469.4 | 432.2 | 448.3 | ||||||||||||||||
EBIT from In-Force Business | $ | 86.7 | $ | 98.6 | $ | 111.6 | $ | 102.7 | $ | 399.6 | $ | 97.1 | $ | 102.6 | $ | 110.1 | ||||||||
EBIT from New Business | ||||||||||||||||||||||||
Revenues | ||||||||||||||||||||||||
Insurance policy income | $ | 61.2 | $ | 63.3 | $ | 65.6 | $ | 63.4 | $ | 253.5 | $ | 64.7 | $ | 67.4 | $ | 70.4 | ||||||||
Net investment income (loss) | 11.1 | 9.1 | 6.2 | 10.6 | 37.0 | 11.7 | 4.3 | 11.7 | ||||||||||||||||
Fee revenue and other income | 0.9 | 1.3 | 1.5 | 1.9 | 5.6 | 1.4 | 1.4 | 1.2 | ||||||||||||||||
Total revenues | 73.2 | 73.7 | 73.3 | 75.9 | 296.1 | 77.8 | 73.1 | 83.3 | ||||||||||||||||
Benefits and expenses | ||||||||||||||||||||||||
Insurance policy benefits | 47.9 | 47.6 | 46.9 | 49.7 | 192.1 | 53.5 | 48.0 | 57.6 | ||||||||||||||||
Interest expense | — | — | — | — | — | — | — | — | ||||||||||||||||
Amortization | 8.4 | 8.4 | 12.5 | 7.1 | 36.4 | 6.9 | 6.8 | 5.7 | ||||||||||||||||
Other operating costs and expenses | 41.4 | 44.2 | 46.1 | 44.6 | 176.3 | 44.0 | 44.8 | 49.5 | ||||||||||||||||
Total benefits and expenses | 97.7 | 100.2 | 105.5 | 101.4 | 404.8 | 104.4 | 99.6 | 112.8 | ||||||||||||||||
EBIT from New Business | $ | (24.5 | ) | $ | (26.5 | ) | $ | (32.2 | ) | $ | (25.5 | ) | $ | (108.7 | ) | $ | (26.6 | ) | $ | (26.5 | ) | $ | (29.5 | ) |
EBIT from In-Force and New Business | ||||||||||||||||||||||||
Revenues | ||||||||||||||||||||||||
Insurance policy income | $ | 400.0 | $ | 409.6 | $ | 404.6 | $ | 398.2 | $ | 1,612.4 | $ | 406.5 | $ | 419.0 | $ | 416.1 | ||||||||
Net investment income (loss) | 209.6 | 196.9 | 158.0 | 201.8 | 766.3 | 234.9 | 185.6 | 221.6 | ||||||||||||||||
Fee revenue and other income | 2.3 | 3.3 | 3.6 | 4.6 | 13.8 | 2.9 | 3.3 | 4.0 | ||||||||||||||||
Total revenues | 611.9 | 609.8 | 566.2 | 604.6 | 2,392.5 | 644.3 | 607.9 | 641.7 | ||||||||||||||||
Benefits and expenses | ||||||||||||||||||||||||
Insurance policy benefits | 404.8 | 408.9 | 360.6 | 395.8 | 1,570.1 | 420.9 | 396.7 | 434.6 | ||||||||||||||||
Interest expense | 1.2 | 1.1 | 1.2 | 1.3 | 4.8 | 1.4 | 1.4 | 1.3 | ||||||||||||||||
Amortization | 68.5 | 46.9 | 44.1 | 46.8 | 206.3 | 56.9 | 50.5 | 35.6 | ||||||||||||||||
Other operating costs and expenses | 75.2 | 80.8 | 80.9 | 83.5 | 320.4 | 94.6 | 83.2 | 89.6 | ||||||||||||||||
Total benefits and expenses | 549.7 | 537.7 | 486.8 | 527.4 | 2,101.6 | 573.8 | 531.8 | 561.1 | ||||||||||||||||
EBIT from In-Force and New Business | $ | 62.2 | $ | 72.1 | $ | 79.4 | $ | 77.2 | $ | 290.9 | $ | 70.5 | $ | 76.1 | $ | 80.6 | ||||||||
CNO Financial Group, Inc. | ||||||||||||||||||||||||
Washington National | ||||||||||||||||||||||||
Analysis of income before taxes (in millions) | 1Q11 | 2Q11 | 3Q11 | 4Q11 | 2011 | 1Q12 | 2Q12 | 3Q12 | ||||||||||||||||
Insurance policy income | $ | 145.4 | $ | 146.6 | $ | 145.9 | $ | 147.2 | $ | 585.1 | $ | 147.4 | $ | 147.6 | $ | 147.8 | ||||||||
Net investment income (loss): | ||||||||||||||||||||||||
General account invested assets | 46.3 | 46.7 | 47.3 | 49.1 | 189.4 | 50.0 | 51.0 | 50.8 | ||||||||||||||||
Trading account income related to reinsurer accounts | 0.3 | 0.7 | 2.6 | 0.2 | 3.8 | 0.1 | 1.4 | (0.9 | ) | |||||||||||||||
Change in value of embedded derivatives related to modified coinsurance agreements | (0.3 | ) | (0.7 | ) | (2.6 | ) | (0.1 | ) | (3.7 | ) | (0.1 | ) | (1.4 | ) | 1.0 | |||||||||
Net realized investment gains (losses) | (0.5 | ) | (0.5 | ) | 1.6 | 1.4 | 2.0 | 3.1 | 3.5 | (3.0 | ) | |||||||||||||
Fee revenue and other income | 0.3 | 0.2 | 0.4 | 0.1 | 1.0 | 0.2 | 0.3 | 0.3 | ||||||||||||||||
Total revenues | 191.5 | 193.0 | 195.2 | 197.9 | 777.6 | 200.7 | 202.4 | 196.0 | ||||||||||||||||
Insurance policy benefits | 112.2 | 118.3 | 119.0 | 115.0 | 464.5 | 115.7 | 113.7 | 111.1 | ||||||||||||||||
Amortization related to operations | 13.4 | 11.4 | 10.8 | 9.3 | 44.9 | 12.7 | 10.8 | 11.2 | ||||||||||||||||
Interest expense on investment borrowings | — | — | 0.2 | 0.5 | 0.7 | 0.7 | 0.8 | 0.7 | ||||||||||||||||
Other operating costs and expenses | 42.1 | 42.0 | 42.4 | 42.9 | 169.4 | 43.8 | 39.7 | 42.1 | ||||||||||||||||
Total benefits and expenses | 167.7 | 171.7 | 172.4 | 167.7 | 679.5 | 172.9 | 165.0 | 165.1 | ||||||||||||||||
Income before income taxes | $ | 23.8 | $ | 21.3 | $ | 22.8 | $ | 30.2 | $ | 98.1 | $ | 27.8 | $ | 37.4 | $ | 30.9 | ||||||||
Health underwriting margins (in millions) | 1Q11 | 2Q11 | 3Q11 | 4Q11 | 2011 | 1Q12 | 2Q12 | 3Q12 | ||||||||||||||||
Medicare supplement: | ||||||||||||||||||||||||
Earned premium | $ | 35.5 | $ | 34.9 | $ | 33.5 | $ | 32.6 | $ | 136.5 | $ | 30.8 | $ | 30.2 | $ | 29.3 | ||||||||
Benefit ratio | 66.3 | % | 71.1 | % | 69.9 | % | 66.7 | % | 68.5 | % | 65.4 | % | 67.7 | % | 63.8 | % | ||||||||
Underwriting margin (earned premium less policy benefits) | $ | 12.0 | $ | 10.1 | $ | 10.1 | $ | 10.8 | $ | 43.0 | $ | 10.7 | $ | 9.7 | $ | 10.7 | ||||||||
Supplemental health: | ||||||||||||||||||||||||
Earned premium | $ | 104.7 | $ | 106.9 | $ | 107.6 | $ | 110.0 | $ | 429.2 | $ | 111.6 | $ | 113.1 | $ | 114.0 | ||||||||
Benefit ratio before interest income on reserves | 78.7 | % | 82.7 | % | 82.4 | % | 76.3 | % | 80.0 | % | 82.4 | % | 77.0 | % | 74.2 | % | ||||||||
Interest-adjusted benefit ratio | 49.1 | % | 54.1 | % | 53.9 | % | 48.3 | % | 51.3 | % | 55.1 | % | 50.1 | % | 47.5 | % | ||||||||
Underwriting margin (earned premium plus interest income on reserves less policy benefits) | $ | 53.3 | $ | 49.1 | $ | 49.6 | $ | 56.6 | $ | 208.6 | $ | 50.1 | $ | 56.5 | $ | 59.8 | ||||||||
CNO Financial Group, Inc. | ||||||||||||||||||||||||
Washington National | ||||||||||||||||||||||||
Average liabilities for insurance products (in millions) (continued) | 1Q11 | 2Q11 | 3Q11 | 4Q11 | 2011 | 1Q12 | 2Q12 | 3Q12 | ||||||||||||||||
Medicare supplement and other supplemental health | $ | 2,434.6 | $ | 2,437.1 | $ | 2,436.9 | $ | 2,436.1 | $ | 2,436.2 | $ | 2,429.6 | $ | 2,418.9 | $ | 2,414.5 | ||||||||
Non-interest sensitive life | 205.2 | 202.2 | 198.7 | 199.6 | 201.4 | 200.4 | 199.1 | 200.3 | ||||||||||||||||
Total average liabilities for insurance products, net of reinsurance ceded | $ | 2,639.8 | $ | 2,639.3 | $ | 2,635.6 | $ | 2,635.7 | $ | 2,637.6 | $ | 2,630.0 | $ | 2,618.0 | $ | 2,614.8 | ||||||||
Present value of future profits (in millions) | 1Q11 | 2Q11 | 3Q11 | 4Q11 | 2011 | 1Q12 | 2Q12 | 3Q12 | ||||||||||||||||
Balance, beginning of period | $ | 426.9 | $ | 418.5 | $ | 411.5 | $ | 406.0 | $ | 426.9 | $ | 402.0 | $ | 394.8 | $ | 389.0 | ||||||||
Amortization related to operations | (8.4 | ) | (7.0 | ) | (5.5 | ) | (4.0 | ) | (24.9 | ) | (7.2 | ) | (5.8 | ) | (5.8 | ) | ||||||||
Balance, end of period | $ | 418.5 | $ | 411.5 | $ | 406.0 | $ | 402.0 | $ | 402.0 | $ | 394.8 | $ | 389.0 | $ | 383.2 | ||||||||
Deferred acquisition costs (in millions) | 1Q11 | 2Q11 | 3Q11 | 4Q11 | 2011 | 1Q12 | 2Q12 | 3Q12 | ||||||||||||||||
Balance, beginning of period | $ | 126.8 | $ | 130.4 | $ | 135.0 | $ | 138.7 | $ | 126.8 | $ | 142.3 | $ | 145.9 | $ | 151.0 | ||||||||
Deferred acquisition expenses | 8.6 | 9.0 | 9.0 | 8.9 | 35.5 | 9.1 | 10.1 | 8.3 | ||||||||||||||||
Amortization related to operations | (5.0 | ) | (4.4 | ) | (5.3 | ) | (5.3 | ) | (20.0 | ) | (5.5 | ) | (5.0 | ) | (5.4 | ) | ||||||||
Balance, end of period | $ | 130.4 | $ | 135.0 | $ | 138.7 | $ | 142.3 | $ | 142.3 | $ | 145.9 | $ | 151.0 | $ | 153.9 | ||||||||
Washington National Segment EBIT Summarized by In-Force and New Business (6) | ||||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||
CNO Financial Group, Inc. | ||||||||||||||||||||||||
EBIT from In-force Business | 1Q11 | 2Q11 | 3Q11 | 4Q11 | 2011 | 1Q12 | 2Q12 | 3Q12 | ||||||||||||||||
Revenues | ||||||||||||||||||||||||
Insurance policy income | $ | 131.9 | $ | 133.5 | $ | 132.1 | $ | 133.2 | $ | 530.7 | $ | 133.0 | $ | 132.8 | $ | 133.4 | ||||||||
Net investment income (loss) | 46.3 | 46.7 | 47.3 | 49.2 | 189.5 | 50.0 | 51.0 | 50.9 | ||||||||||||||||
Fee revenue and other income | 0.3 | 0.2 | 0.4 | 0.1 | 1.0 | 0.2 | 0.3 | 0.3 | ||||||||||||||||
Total revenues | 178.5 | 180.4 | 179.8 | 182.5 | 721.2 | 183.2 | 184.1 | 184.6 | ||||||||||||||||
Benefits and expenses | ||||||||||||||||||||||||
Insurance policy benefits | 106.6 | 112.9 | 113.3 | 109.2 | 442.0 | 109.8 | 107.6 | 105.2 | ||||||||||||||||
Interest expense | — | — | 0.2 | 0.5 | 0.7 | 0.7 | 0.8 | 0.7 | ||||||||||||||||
Amortization | 12.7 | 10.6 | 10.2 | 8.6 | 42.1 | 12.0 | 10.0 | 10.5 | ||||||||||||||||
Other operating costs and expenses | 31.9 | 32.1 | 33.7 | 32.1 | 129.8 | 33.3 | 31.5 | 31.9 | ||||||||||||||||
Total benefits and expenses | 151.2 | 155.6 | 157.4 | 150.4 | 614.6 | 155.8 | 149.9 | 148.3 | ||||||||||||||||
EBIT from In-Force Business | $ | 27.3 | $ | 24.8 | $ | 22.4 | $ | 32.1 | $ | 106.6 | $ | 27.4 | $ | 34.2 | $ | 36.3 | ||||||||
EBIT from New Business | ||||||||||||||||||||||||
Revenues | ||||||||||||||||||||||||
Insurance policy income | $ | 13.5 | $ | 13.1 | $ | 13.8 | $ | 14.0 | $ | 54.4 | $ | 14.4 | $ | 14.8 | $ | 14.4 | ||||||||
Net investment income (loss) | — | — | — | — | — | — | — | — | ||||||||||||||||
Fee revenue and other income | — | — | — | — | — | — | — | — | ||||||||||||||||
Total revenues | 13.5 | 13.1 | 13.8 | 14.0 | 54.4 | 14.4 | 14.8 | 14.4 | ||||||||||||||||
Benefits and expenses | ||||||||||||||||||||||||
Insurance policy benefits | 5.6 | 5.4 | 5.7 | 5.8 | 22.5 | 5.9 | 6.1 | 5.9 | ||||||||||||||||
Interest expense | — | — | — | — | — | — | — | — | ||||||||||||||||
Amortization | 0.7 | 0.8 | 0.6 | 0.7 | 2.8 | 0.7 | 0.8 | 0.7 | ||||||||||||||||
Other operating costs and expenses | 10.2 | 9.9 | 8.7 | 10.8 | 39.6 | 10.5 | 8.2 | 10.2 | ||||||||||||||||
Total benefits and expenses | 16.5 | 16.1 | 15.0 | 17.3 | 64.9 | 17.1 | 15.1 | 16.8 | ||||||||||||||||
EBIT from New Business | $ | (3.0 | ) | $ | (3.0 | ) | $ | (1.2 | ) | $ | (3.3 | ) | $ | (10.5 | ) | $ | (2.7 | ) | $ | (0.3 | ) | $ | (2.4 | ) |
EBIT from In-Force and New Business | ||||||||||||||||||||||||
Revenues | ||||||||||||||||||||||||
Insurance policy income | $ | 145.4 | $ | 146.6 | $ | 145.9 | $ | 147.2 | $ | 585.1 | $ | 147.4 | $ | 147.6 | $ | 147.8 | ||||||||
Net investment income (loss) | 46.3 | 46.7 | 47.3 | 49.2 | 189.5 | 50.0 | 51.0 | 50.9 | ||||||||||||||||
Fee revenue and other income | 0.3 | 0.2 | 0.4 | 0.1 | 1.0 | 0.2 | 0.3 | 0.3 | ||||||||||||||||
Total revenues | 192.0 | 193.5 | 193.6 | 196.5 | 775.6 | 197.6 | 198.9 | 199.0 | ||||||||||||||||
Benefits and expenses | ||||||||||||||||||||||||
Insurance policy benefits | 112.2 | 118.3 | 119.0 | 115.0 | 464.5 | 115.7 | 113.7 | 111.1 | ||||||||||||||||
Interest expense | — | — | 0.2 | 0.5 | 0.7 | 0.7 | 0.8 | 0.7 | ||||||||||||||||
Amortization | 13.4 | 11.4 | 10.8 | 9.3 | 44.9 | 12.7 | 10.8 | 11.2 | ||||||||||||||||
Other operating costs and expenses | 42.1 | 42.0 | 42.4 | 42.9 | 169.4 | 43.8 | 39.7 | 42.1 | ||||||||||||||||
Total benefits and expenses | 167.7 | 171.7 | 172.4 | 167.7 | 679.5 | 172.9 | 165.0 | 165.1 | ||||||||||||||||
EBIT from In-Force and New Business | $ | 24.3 | $ | 21.8 | $ | 21.2 | $ | 28.8 | $ | 96.1 | $ | 24.7 | $ | 33.9 | $ | 33.9 | ||||||||
CNO Financial Group, Inc. | ||||||||||||||||||||||||
Colonial Penn | ||||||||||||||||||||||||
Analysis of income (loss) before taxes (in millions) | 1Q11 | 2Q11 | 3Q11 | 4Q11 | 2011 | 1Q12 | 2Q12 | 3Q12 | ||||||||||||||||
Insurance policy income | $ | 50.3 | $ | 50.9 | $ | 50.8 | $ | 51.0 | $ | 203.0 | $ | 53.4 | $ | 54.6 | $ | 54.5 | ||||||||
Net investment income on general account invested assets | 10.3 | 10.5 | 10.1 | 10.2 | 41.1 | 10.0 | 10.2 | 9.9 | ||||||||||||||||
Net realized investment gains | 1.1 | 0.2 | 3.5 | 1.0 | 5.8 | 2.6 | 1.9 | 2.6 | ||||||||||||||||
Fee revenue and other income | 0.2 | 0.2 | 0.2 | 0.3 | 0.9 | 0.2 | 0.2 | 0.2 | ||||||||||||||||
Total revenues | 61.9 | 61.8 | 64.6 | 62.5 | 250.8 | 66.2 | 66.9 | 67.2 | ||||||||||||||||
Insurance policy benefits | 38.5 | 37.8 | 35.7 | 37.2 | 149.2 | 41.9 | 39.3 | 38.2 | ||||||||||||||||
Amounts added to annuity and interest-sensitive life product account balances | 0.2 | 0.2 | 0.3 | 0.2 | 0.9 | 0.2 | 0.3 | 0.1 | ||||||||||||||||
Amortization related to operations | 4.0 | 3.5 | 3.5 | 4.0 | 15.0 | 3.7 | 3.9 | 3.5 | ||||||||||||||||
Other operating costs and expenses | 23.8 | 19.6 | 22.9 | 18.3 | 84.6 | 27.6 | 20.9 | 25.4 | ||||||||||||||||
Total benefits and expenses | 66.5 | 61.1 | 62.4 | 59.7 | 249.7 | 73.4 | 64.4 | 67.2 | ||||||||||||||||
Income (loss) before income taxes | $ | (4.6 | ) | $ | 0.7 | $ | 2.2 | $ | 2.8 | $ | 1.1 | $ | (7.2 | ) | $ | 2.5 | $ | — | ||||||
Average liabilities for insurance products (in millions) | 1Q11 | 2Q11 | 3Q11 | 4Q11 | 2011 | 1Q12 | 2Q12 | 3Q12 | ||||||||||||||||
Annuities - mortality based | $ | 78.5 | $ | 77.8 | $ | 77.3 | $ | 77.1 | $ | 77.7 | $ | 77.0 | $ | 76.8 | $ | 76.4 | ||||||||
Supplemental health | 16.6 | 16.3 | 16.1 | 15.8 | 16.2 | 15.4 | 15.1 | 15.0 | ||||||||||||||||
Life: | ||||||||||||||||||||||||
Interest sensitive | 20.7 | 20.5 | 20.2 | 20.1 | 20.3 | 19.9 | 18.9 | 18.1 | ||||||||||||||||
Non-interest sensitive | 586.7 | 588.7 | 590.2 | 593.4 | 589.8 | 598.4 | 601.8 | 605.8 | ||||||||||||||||
Total average liabilities for insurance products, net of reinsurance ceded | $ | 702.5 | $ | 703.3 | $ | 703.8 | $ | 706.4 | $ | 704.0 | $ | 710.7 | $ | 712.6 | $ | 715.3 | ||||||||
Present value of future profits (in millions) | 1Q11 | 2Q11 | 3Q11 | 4Q11 | 2011 | 1Q12 | 2Q12 | 3Q12 | ||||||||||||||||
Balance, beginning of period | $ | 81.7 | $ | 79.1 | $ | 76.9 | $ | 74.9 | $ | 81.7 | $ | 72.6 | $ | 70.2 | $ | 67.8 | ||||||||
Amortization related to operations | (2.6 | ) | (2.2 | ) | (2.0 | ) | (2.3 | ) | (9.1 | ) | (2.4 | ) | (2.4 | ) | (2.1 | ) | ||||||||
Balance, end of period | $ | 79.1 | $ | 76.9 | $ | 74.9 | $ | 72.6 | $ | 72.6 | $ | 70.2 | $ | 67.8 | $ | 65.7 | ||||||||
Deferred acquisition costs (in millions) | 1Q11 | 2Q11 | 3Q11 | 4Q11 | 2011 | 1Q12 | 2Q12 | 3Q12 | ||||||||||||||||
Balance, beginning of period | $ | 48.5 | $ | 49.4 | $ | 50.4 | $ | 51.2 | $ | 48.5 | $ | 51.5 | $ | 52.6 | $ | 53.8 | ||||||||
Deferred acquisition expenses | 2.3 | 2.3 | 2.3 | 2.0 | 8.9 | 2.4 | 2.7 | 2.2 | ||||||||||||||||
Amortization related to operations | (1.4 | ) | (1.3 | ) | (1.5 | ) | (1.7 | ) | (5.9 | ) | (1.3 | ) | (1.5 | ) | (1.4 | ) | ||||||||
Balance, end of period | $ | 49.4 | $ | 50.4 | $ | 51.2 | $ | 51.5 | $ | 51.5 | $ | 52.6 | $ | 53.8 | $ | 54.6 | ||||||||
Colonial Penn Segment EBIT Summarized by In-Force and New Business (6) | ||||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||
CNO Financial Group, Inc. | ||||||||||||||||||||||||
EBIT from In-force Business | 1Q11 | 2Q11 | 3Q11 | 4Q11 | 2011 | 1Q12 | 2Q12 | 3Q12 | ||||||||||||||||
Revenues | ||||||||||||||||||||||||
Insurance policy income | $ | 41.8 | $ | 42.0 | $ | 42.0 | $ | 41.8 | $ | 167.6 | $ | 43.2 | $ | 43.7 | $ | 43.5 | ||||||||
Net investment income (loss) | 10.3 | 10.5 | 10.1 | 10.2 | 41.1 | 10.0 | 10.2 | 9.9 | ||||||||||||||||
Fee revenue and other income | 0.2 | 0.2 | 0.2 | 0.3 | 0.9 | 0.2 | 0.2 | 0.2 | ||||||||||||||||
Total revenues | 52.3 | 52.7 | 52.3 | 52.3 | 209.6 | 53.4 | 54.1 | 53.6 | ||||||||||||||||
Benefits and expenses | ||||||||||||||||||||||||
Insurance policy benefits | 33.8 | 32.9 | 30.9 | 32.1 | 129.7 | 36.2 | 33.4 | 32.0 | ||||||||||||||||
Amortization | 3.9 | 3.4 | 3.3 | 3.7 | 14.3 | 3.6 | 3.8 | 3.2 | ||||||||||||||||
Other operating costs and expenses | 6.6 | 6.3 | 6.5 | 6.7 | 26.1 | 6.9 | 5.7 | 6.8 | ||||||||||||||||
Total benefits and expenses | 44.3 | 42.6 | 40.7 | 42.5 | 170.1 | 46.7 | 42.9 | 42.0 | ||||||||||||||||
EBIT from In-Force Business | $ | 8.0 | $ | 10.1 | $ | 11.6 | $ | 9.8 | $ | 39.5 | $ | 6.7 | $ | 11.2 | $ | 11.6 | ||||||||
EBIT from New Business | ||||||||||||||||||||||||
Revenues | ||||||||||||||||||||||||
Insurance policy income | $ | 8.5 | $ | 8.9 | $ | 8.8 | $ | 9.2 | $ | 35.4 | $ | 10.2 | $ | 10.9 | $ | 11.0 | ||||||||
Net investment income (loss) | — | — | — | — | — | — | — | — | ||||||||||||||||
Fee revenue and other income | — | — | — | — | — | — | — | — | ||||||||||||||||
Total revenues | 8.5 | 8.9 | 8.8 | 9.2 | 35.4 | 10.2 | 10.9 | 11.0 | ||||||||||||||||
Benefits and expenses | ||||||||||||||||||||||||
Insurance policy benefits | 4.9 | 5.1 | 5.1 | 5.3 | 20.4 | 5.9 | 6.2 | 6.3 | ||||||||||||||||
Amortization | 0.1 | 0.1 | 0.2 | 0.3 | 0.7 | 0.1 | 0.1 | 0.3 | ||||||||||||||||
Other operating costs and expenses | 17.2 | 13.3 | 16.4 | 11.6 | 58.5 | 20.7 | 15.2 | 18.6 | ||||||||||||||||
Total benefits and expenses | 22.2 | 18.5 | 21.7 | 17.2 | 79.6 | 26.7 | 21.5 | 25.2 | ||||||||||||||||
EBIT from New Business | $ | (13.7 | ) | $ | (9.6 | ) | $ | (12.9 | ) | $ | (8.0 | ) | $ | (44.2 | ) | $ | (16.5 | ) | $ | (10.6 | ) | $ | (14.2 | ) |
EBIT from In-Force and New Business | ||||||||||||||||||||||||
Revenues | ||||||||||||||||||||||||
Insurance policy income | $ | 50.3 | $ | 50.9 | $ | 50.8 | $ | 51.0 | $ | 203.0 | $ | 53.4 | $ | 54.6 | $ | 54.5 | ||||||||
Net investment income (loss) | 10.3 | 10.5 | 10.1 | 10.2 | 41.1 | 10.0 | 10.2 | 9.9 | ||||||||||||||||
Fee revenue and other income | 0.2 | 0.2 | 0.2 | 0.3 | 0.9 | 0.2 | 0.2 | 0.2 | ||||||||||||||||
Total revenues | 60.8 | 61.6 | 61.1 | 61.5 | 245.0 | 63.6 | 65.0 | 64.6 | ||||||||||||||||
Benefits and expenses | ||||||||||||||||||||||||
Insurance policy benefits | 38.7 | 38.0 | 36.0 | 37.4 | 150.1 | 42.1 | 39.6 | 38.3 | ||||||||||||||||
Amortization | 4.0 | 3.5 | 3.5 | 4.0 | 15.0 | 3.7 | 3.9 | 3.5 | ||||||||||||||||
Other operating costs and expenses | 23.8 | 19.6 | 22.9 | 18.3 | 84.6 | 27.6 | 20.9 | 25.4 | ||||||||||||||||
Total benefits and expenses | 66.5 | 61.1 | 62.4 | 59.7 | 249.7 | 73.4 | 64.4 | 67.2 | ||||||||||||||||
EBIT from In-Force and New Business | $ | (5.7 | ) | $ | 0.5 | $ | (1.3 | ) | $ | 1.8 | $ | (4.7 | ) | $ | (9.8 | ) | $ | 0.6 | $ | (2.6 | ) | |||
CNO Financial Group, Inc. | ||||||||||||||||||||||||
Other CNO Business | ||||||||||||||||||||||||
Analysis of income (loss) before taxes (in millions) | 1Q11 | 2Q11 | 3Q11 | 4Q11 | 2011 | 1Q12 | 2Q12 | 3Q12 | ||||||||||||||||
Insurance policy income | $ | 71.5 | $ | 72.5 | $ | 72.2 | $ | 73.8 | $ | 290.0 | $ | 79.0 | $ | 73.6 | $ | 71.8 | ||||||||
Net investment income (loss): | ||||||||||||||||||||||||
General account invested assets | 88.2 | 87.6 | 85.4 | 85.7 | 346.9 | 84.0 | 84.0 | 82.3 | ||||||||||||||||
Fixed index products | 5.0 | (0.9 | ) | (8.4 | ) | 0.9 | (3.4 | ) | 6.8 | (4.1 | ) | 3.3 | ||||||||||||
Trading account income related to policyholder accounts | 1.5 | — | (2.4 | ) | 1.5 | 0.6 | 1.9 | (0.1 | ) | 1.1 | ||||||||||||||
Net realized investment gains (losses) | (1.0 | ) | 1.1 | 3.0 | 3.0 | 6.1 | 6.7 | 7.5 | (5.4 | ) | ||||||||||||||
Total revenues | 165.2 | 160.3 | 149.8 | 164.9 | 640.2 | 178.4 | 160.9 | 153.1 | ||||||||||||||||
Insurance policy benefits | 88.8 | 85.9 | 86.7 | 88.7 | 350.1 | 83.0 | 93.8 | 122.7 | ||||||||||||||||
Insurance policy benefits - fair value changes in embedded derivative liabilities | — | — | 3.2 | — | 3.2 | (0.6 | ) | 1.0 | — | |||||||||||||||
Amounts added to policyholder account balances: | ||||||||||||||||||||||||
Annuity products and interest-sensitive life products other than fixed index products | 31.6 | 30.3 | 28.9 | 29.6 | 120.4 | 29.7 | 27.5 | 29.4 | ||||||||||||||||
Fixed index products | 7.1 | 3.0 | (4.1 | ) | 3.4 | 9.4 | 9.2 | 0.7 | 5.0 | |||||||||||||||
Amortization related to operations | 8.6 | 9.4 | 10.4 | 11.4 | 39.8 | 7.5 | 7.1 | 10.5 | ||||||||||||||||
Amortization related to net realized investment gains (losses) | (0.4 | ) | (0.3 | ) | 0.9 | — | 0.2 | 0.2 | 1.4 | 0.3 | ||||||||||||||
Amortization related to fair value changes in embedded derivative liabilities | — | — | (2.6 | ) | — | (2.6 | ) | 0.5 | (0.8 | ) | — | |||||||||||||
Interest expense on investment borrowings | 4.9 | 5.0 | 5.3 | 5.1 | 20.3 | 5.1 | 5.0 | 5.0 | ||||||||||||||||
Other operating costs and expenses | 17.8 | 20.5 | 16.8 | 23.7 | 78.8 | 39.5 | 17.4 | 39.5 | ||||||||||||||||
Total benefits and expenses | 158.4 | 153.8 | 145.5 | 161.9 | 619.6 | 174.1 | 153.1 | 212.4 | ||||||||||||||||
Income before income taxes | $ | 6.8 | $ | 6.5 | $ | 4.3 | $ | 3.0 | $ | 20.6 | $ | 4.3 | $ | 7.8 | $ | (59.3 | ) | |||||||
Health underwriting margins (in millions) | 1Q11 | 2Q11 | 3Q11 | 4Q11 | 2011 | 1Q12 | 2Q12 | 3Q12 | ||||||||||||||||
Long-term care: | ||||||||||||||||||||||||
Earned premium | $ | 7.3 | $ | 7.0 | $ | 6.9 | $ | 6.4 | $ | 27.6 | $ | 6.6 | $ | 6.5 | $ | 6.2 | ||||||||
Benefit ratio before interest income on reserves | 235.7 | % | 205.8 | % | 227.5 | % | 237.1 | % | 226.4 | % | 227.4 | % | 230.2 | % | 282.4 | % | ||||||||
Interest-adjusted benefit ratio | 148.0 | % | 106.4 | % | 126.1 | % | 127.8 | % | 127.3 | % | 122.0 | % | 121.3 | % | 169.9 | % | ||||||||
Underwriting margin (earned premium plus interest income on reserves less policy benefits) | $ | (3.5 | ) | $ | (0.5 | ) | $ | (1.8 | ) | $ | (1.9 | ) | $ | (7.7 | ) | $ | (1.5 | ) | $ | (1.4 | ) | $ | (4.3 | ) |
CNO Financial Group, Inc. | ||||||||||||||||||||||||
Other CNO Business | ||||||||||||||||||||||||
Average liabilities for insurance products (in millions) (continued) | 1Q11 | 2Q11 | 3Q11 | 4Q11 | 2011 | 1Q12 | 2Q12 | 3Q12 | ||||||||||||||||
Annuities: | ||||||||||||||||||||||||
Mortality based | $ | 240.2 | $ | 237.2 | $ | 234.3 | $ | 231.9 | $ | 235.9 | $ | 229.1 | $ | 225.5 | $ | 221.5 | ||||||||
Fixed index | 652.1 | 632.1 | 607.6 | 577.9 | 617.4 | 553.8 | 532.5 | 510.5 | ||||||||||||||||
Deposit based | 659.6 | 656.1 | 651.1 | 645.0 | 652.9 | 638.4 | 633.1 | 635.6 | ||||||||||||||||
Separate accounts | 17.8 | 17.7 | 16.4 | 15.2 | 16.8 | 15.5 | 15.8 | 15.6 | ||||||||||||||||
Other health | 481.8 | 481.9 | 481.3 | 481.4 | 481.6 | 481.0 | 479.8 | 479.6 | ||||||||||||||||
Life: | ||||||||||||||||||||||||
Interest sensitive | 2,527.4 | 2,506.1 | 2,484.6 | 2,456.6 | 2,493.7 | 2,416.9 | 2,365.9 | 2,329.1 | ||||||||||||||||
Non-interest sensitive | 805.6 | 790.9 | 780.6 | 774.0 | 787.8 | 766.5 | 763.3 | 782.1 | ||||||||||||||||
Total average liabilities for insurance products, net of reinsurance ceded | $ | 5,384.5 | $ | 5,322.0 | $ | 5,255.9 | $ | 5,182.0 | $ | 5,286.1 | $ | 5,101.2 | $ | 5,015.9 | $ | 4,974.0 | ||||||||
Present value of future profits (in millions) | 1Q11 | 2Q11 | 3Q11 | 4Q11 | 2011 | 1Q12 | 2Q12 | 3Q12 | ||||||||||||||||
Balance, beginning of period | $ | 32.8 | $ | 29.8 | $ | 26.1 | $ | 24.4 | $ | 32.8 | $ | 21.3 | $ | 20.6 | $ | 19.5 | ||||||||
Amortization related to operations | (2.4 | ) | (2.2 | ) | (1.1 | ) | (3.6 | ) | (9.3 | ) | (1.4 | ) | (1.4 | ) | (1.4 | ) | ||||||||
Adjustment related to unrealized (gain) or loss on fixed maturities, available for sale | (0.6 | ) | (1.5 | ) | (0.6 | ) | 0.5 | (2.2 | ) | 0.7 | 0.3 | 0.3 | ||||||||||||
Balance, end of period | $ | 29.8 | $ | 26.1 | $ | 24.4 | $ | 21.3 | $ | 21.3 | $ | 20.6 | $ | 19.5 | $ | 18.4 | ||||||||
Deferred acquisition costs (in millions) | 1Q11 | 2Q11 | 3Q11 | 4Q11 | 2011 | 1Q12 | 2Q12 | 3Q12 | ||||||||||||||||
Balance, beginning of period | $ | 162.0 | $ | 151.8 | $ | 141.9 | $ | 117.5 | $ | 162.0 | $ | 112.3 | $ | 105.4 | $ | 96.5 | ||||||||
Deferred acquisition expenses | 1.9 | 1.9 | 1.2 | 1.0 | 6.0 | 0.4 | 1.3 | 1.0 | ||||||||||||||||
Amortization related to operations | (6.2 | ) | (7.2 | ) | (9.3 | ) | (7.8 | ) | (30.5 | ) | (6.1 | ) | (5.7 | ) | (9.1 | ) | ||||||||
Amortization related to net realized investment (gains) losses | 0.4 | 0.3 | (0.9 | ) | — | (0.2 | ) | (0.2 | ) | (1.4 | ) | (0.3 | ) | |||||||||||
Amortization related to fair value changes in embedded derivative liabilities | — | — | 2.6 | — | 2.6 | (0.5 | ) | 0.8 | — | |||||||||||||||
Adjustment related to unrealized (gain) or loss on fixed maturities, available for sale | (6.3 | ) | (4.9 | ) | (18.0 | ) | 1.6 | (27.6 | ) | (0.5 | ) | (3.9 | ) | (3.3 | ) | |||||||||
Balance, end of period | $ | 151.8 | $ | 141.9 | $ | 117.5 | $ | 112.3 | $ | 112.3 | $ | 105.4 | $ | 96.5 | $ | 84.8 | ||||||||
Other CNO Business Segment EBIT Summarized by In-Force and New Business (6) | ||||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||
CNO Financial Group, Inc. | ||||||||||||||||||||||||
EBIT from In-force Business | 1Q11 | 2Q11 | 3Q11 | 4Q11 | 2011 | 1Q12 | 2Q12 | 3Q12 | ||||||||||||||||
Revenues | ||||||||||||||||||||||||
Insurance policy income | $ | 71.5 | $ | 72.5 | $ | 72.2 | $ | 73.8 | $ | 290.0 | $ | 79.0 | $ | 73.6 | $ | 71.8 | ||||||||
Net investment income (loss) | 94.7 | 86.7 | 74.6 | 88.1 | 344.1 | 92.7 | 79.8 | 86.7 | ||||||||||||||||
Fee revenue and other income | — | — | — | — | — | — | — | — | ||||||||||||||||
Total revenues | 166.2 | 159.2 | 146.8 | 161.9 | 634.1 | 171.7 | 153.4 | 158.5 | ||||||||||||||||
Benefits and expenses | ||||||||||||||||||||||||
Insurance policy benefits | 127.5 | 119.2 | 111.5 | 121.7 | 479.9 | 121.9 | 122.0 | 157.1 | ||||||||||||||||
Interest expense | 4.9 | 5.0 | 5.3 | 5.1 | 20.3 | 5.1 | 5.0 | 5.0 | ||||||||||||||||
Amortization | 8.6 | 9.4 | 10.4 | 11.4 | 39.8 | 7.5 | 7.1 | 10.5 | ||||||||||||||||
Other operating costs and expenses | 17.8 | 20.5 | 16.8 | 23.7 | 78.8 | 39.5 | 17.4 | 39.5 | ||||||||||||||||
Total benefits and expenses | 158.8 | 154.1 | 144.0 | 161.9 | 618.8 | 174.0 | 151.5 | 212.1 | ||||||||||||||||
EBIT from In-Force Business | $ | 7.4 | $ | 5.1 | $ | 2.8 | $ | — | $ | 15.3 | $ | (2.3 | ) | $ | 1.9 | $ | (53.6 | ) | ||||||
EBIT from New Business | ||||||||||||||||||||||||
Revenues | ||||||||||||||||||||||||
Insurance policy income | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||
Net investment income (loss) | — | — | — | — | — | — | — | — | ||||||||||||||||
Fee revenue and other income | — | — | — | — | — | — | — | — | ||||||||||||||||
Total revenues | — | — | — | — | — | — | — | — | ||||||||||||||||
Benefits and expenses | ||||||||||||||||||||||||
Insurance policy benefits | — | — | — | — | — | — | — | — | ||||||||||||||||
Interest expense | — | — | — | — | — | — | — | — | ||||||||||||||||
Amortization | — | — | — | — | — | — | — | — | ||||||||||||||||
Other operating costs and expenses | — | — | — | — | — | — | — | — | ||||||||||||||||
Total benefits and expenses | — | — | — | — | — | — | — | — | ||||||||||||||||
EBIT from New Business | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||
EBIT from In-Force and New Business | ||||||||||||||||||||||||
Revenues | ||||||||||||||||||||||||
Insurance policy income | $ | 71.5 | $ | 72.5 | $ | 72.2 | $ | 73.8 | $ | 290.0 | $ | 79.0 | $ | 73.6 | $ | 71.8 | ||||||||
Net investment income (loss) | 94.7 | 86.7 | 74.6 | 88.1 | 344.1 | 92.7 | 79.8 | 86.7 | ||||||||||||||||
Fee revenue and other income | — | — | — | — | — | — | — | — | ||||||||||||||||
Total revenues | 166.2 | 159.2 | 146.8 | 161.9 | 634.1 | 171.7 | 153.4 | 158.5 | ||||||||||||||||
Benefits and expenses | ||||||||||||||||||||||||
Insurance policy benefits | 127.5 | 119.2 | 111.5 | 121.7 | 479.9 | 121.9 | 122.0 | 157.1 | ||||||||||||||||
Interest expense | 4.9 | 5.0 | 5.3 | 5.1 | 20.3 | 5.1 | 5.0 | 5.0 | ||||||||||||||||
Amortization | 8.6 | 9.4 | 10.4 | 11.4 | 39.8 | 7.5 | 7.1 | 10.5 | ||||||||||||||||
Other operating costs and expenses | 17.8 | 20.5 | 16.8 | 23.7 | 78.8 | 39.5 | 17.4 | 39.5 | ||||||||||||||||
Total benefits and expenses | 158.8 | 154.1 | 144.0 | 161.9 | 618.8 | 174.0 | 151.5 | 212.1 | ||||||||||||||||
EBIT from In-Force and New Business | $ | 7.4 | $ | 5.1 | $ | 2.8 | $ | — | $ | 15.3 | $ | (2.3 | ) | $ | 1.9 | $ | (53.6 | ) | ||||||
CNO Financial Group, Inc. | ||||||||||||||||||||||||
Corporate Operations | ||||||||||||||||||||||||
Analysis of loss before taxes (in millions) | 1Q11 | 2Q11 | 3Q11 | 4Q11 | 2011 | 1Q12 | 2Q12 | 3Q12 | ||||||||||||||||
Net investment income (loss): | ||||||||||||||||||||||||
General account invested assets | $ | — | $ | 0.9 | $ | 1.1 | $ | 1.0 | $ | 3.0 | $ | 0.9 | $ | 1.0 | $ | 1.0 | ||||||||
Other special-purpose portfolios | 8.2 | (0.1 | ) | (13.7 | ) | (3.1 | ) | (8.7 | ) | 16.2 | (1.1 | ) | 8.2 | |||||||||||
Fee revenue and other income | 0.4 | 0.2 | 0.3 | 0.4 | 1.3 | 0.4 | 0.2 | 0.3 | ||||||||||||||||
Net operating results of variable interest entities | 2.0 | 0.2 | 3.8 | 1.5 | 7.5 | 2.2 | 2.9 | 4.7 | ||||||||||||||||
Interest expense on investment borrowings | — | — | (0.1 | ) | (0.1 | ) | (0.2 | ) | (0.1 | ) | (0.2 | ) | (0.1 | ) | ||||||||||
Other operating costs and expenses | (11.1 | ) | (12.5 | ) | (18.9 | ) | (8.1 | ) | (50.6 | ) | (21.4 | ) | (11.9 | ) | (20.8 | ) | ||||||||
Corporate operations, excluding corporate interest expense | (0.5 | ) | (11.3 | ) | (27.5 | ) | (8.4 | ) | (47.7 | ) | (1.8 | ) | (9.1 | ) | (6.7 | ) | ||||||||
Interest expense on corporate debt | (20.6 | ) | (19.3 | ) | (18.7 | ) | (17.7 | ) | (76.3 | ) | (17.5 | ) | (16.6 | ) | (16.3 | ) | ||||||||
Loss before net realized investment gains (losses), loss on extinguishment of debt and income taxes | (21.1 | ) | (30.6 | ) | (46.2 | ) | (26.1 | ) | (124.0 | ) | (19.3 | ) | (25.7 | ) | (23.0 | ) | ||||||||
Net realized investment gains (losses) | (1.1 | ) | 3.9 | (4.0 | ) | 1.2 | — | (0.1 | ) | 1.1 | 0.8 | |||||||||||||
Loss on extinguishment of debt | (1.4 | ) | (0.6 | ) | (1.1 | ) | (0.3 | ) | (3.4 | ) | (0.2 | ) | (0.5 | ) | (198.5 | ) | ||||||||
Loss before income taxes | $ | (23.6 | ) | $ | (27.3 | ) | $ | (51.3 | ) | $ | (25.2 | ) | $ | (127.4 | ) | $ | (19.6 | ) | $ | (25.1 | ) | $ | (220.7 | ) |
CNO Financial Group, Inc. | ||||||||||||||||||||||||
Bankers Life | ||||||||||||||||||||||||
Premiums collected on insurance products (in millions) | 1Q11 | 2Q11 | 3Q11 | 4Q11 | 2011 | 1Q12 | 2Q12 | 3Q12 | ||||||||||||||||
Annuities | ||||||||||||||||||||||||
Fixed index (first-year) | $ | 148.2 | $ | 163.9 | $ | 208.0 | $ | 188.3 | $ | 708.4 | $ | 134.9 | $ | 120.2 | $ | 114.5 | ||||||||
Other fixed rate (first-year) | 73.1 | 94.1 | 55.1 | 50.6 | 272.9 | 47.8 | 47.9 | 56.0 | ||||||||||||||||
Other fixed rate (renewal) | 0.9 | 1.1 | 1.0 | 1.2 | 4.2 | 2.0 | 1.4 | 1.2 | ||||||||||||||||
Subtotal - other fixed rate annuities | 74.0 | 95.2 | 56.1 | 51.8 | 277.1 | 49.8 | 49.3 | 57.2 | ||||||||||||||||
Total annuities | 222.2 | 259.1 | 264.1 | 240.1 | 985.5 | 184.7 | 169.5 | 171.7 | ||||||||||||||||
Health | ||||||||||||||||||||||||
Medicare supplement (first-year) | 25.1 | 24.7 | 24.5 | 27.0 | 101.3 | 23.8 | 25.1 | 24.7 | ||||||||||||||||
Medicare supplement (renewal) | 153.7 | 144.3 | 146.8 | 155.1 | 599.9 | 151.1 | 149.8 | 153.0 | ||||||||||||||||
Subtotal - Medicare supplement | 178.8 | 169.0 | 171.3 | 182.1 | 701.2 | 174.9 | 174.9 | 177.7 | ||||||||||||||||
Long-term care (first-year) | 6.1 | 6.0 | 5.9 | 5.5 | 23.5 | 5.5 | 5.9 | 6.0 | ||||||||||||||||
Long-term care (renewal) | 138.8 | 136.9 | 131.9 | 130.8 | 538.4 | 131.2 | 132.9 | 130.1 | ||||||||||||||||
Subtotal - long-term care | 144.9 | 142.9 | 137.8 | 136.3 | 561.9 | 136.7 | 138.8 | 136.1 | ||||||||||||||||
PDP and PFFS (first-year) | 0.4 | 0.2 | 0.6 | 0.6 | 1.8 | 0.3 | 0.1 | 0.1 | ||||||||||||||||
PDP and PFFS (renewal) | 10.6 | 14.4 | 15.6 | 14.1 | 54.7 | 15.0 | 14.6 | 10.2 | ||||||||||||||||
Subtotal - PDP and PFFS | 11.0 | 14.6 | 16.2 | 14.7 | 56.5 | 15.3 | 14.7 | 10.3 | ||||||||||||||||
Other health (first-year) | 0.4 | 0.3 | 0.4 | 0.5 | 1.6 | 0.4 | 0.6 | 0.9 | ||||||||||||||||
Other health (renewal) | 2.5 | 2.3 | 2.3 | 2.3 | 9.4 | 2.2 | 2.3 | 2.3 | ||||||||||||||||
Subtotal - other health | 2.9 | 2.6 | 2.7 | 2.8 | 11.0 | 2.6 | 2.9 | 3.2 | ||||||||||||||||
Total health | 337.6 | 329.1 | 328.0 | 335.9 | 1,330.6 | 329.5 | 331.3 | 327.3 | ||||||||||||||||
Life insurance | ||||||||||||||||||||||||
First-year | 24.7 | 29.4 | 30.9 | 30.8 | 115.8 | 32.8 | 35.7 | 38.9 | ||||||||||||||||
Renewal | 31.7 | 32.6 | 34.6 | 35.3 | 134.2 | 37.3 | 39.7 | 42.4 | ||||||||||||||||
Total life insurance | 56.4 | 62.0 | 65.5 | 66.1 | 250.0 | 70.1 | 75.4 | 81.3 | ||||||||||||||||
Collections on insurance products | ||||||||||||||||||||||||
Total first-year premium collections on insurance products | 278.0 | 318.6 | 325.4 | 303.3 | 1,225.3 | 245.5 | 235.5 | 241.1 | ||||||||||||||||
Total renewal premium collections on insurance products | 338.2 | 331.6 | 332.2 | 338.8 | 1,340.8 | 338.8 | 340.7 | 339.2 | ||||||||||||||||
Total collections on insurance products | $ | 616.2 | $ | 650.2 | $ | 657.6 | $ | 642.1 | $ | 2,566.1 | $ | 584.3 | $ | 576.2 | $ | 580.3 | ||||||||
CNO Financial Group, Inc. | ||||||||||||||||||||||||
Washington National | ||||||||||||||||||||||||
Premiums collected on insurance products (in millions) | 1Q11 | 2Q11 | 3Q11 | 4Q11 | 2011 | 1Q12 | 2Q12 | 3Q12 | ||||||||||||||||
Health | ||||||||||||||||||||||||
Medicare supplement (first-year) | $ | 0.6 | $ | 0.5 | $ | 0.4 | $ | 0.4 | $ | 1.9 | $ | 0.3 | $ | 0.3 | $ | 0.2 | ||||||||
Medicare supplement (renewal) | 34.7 | 32.6 | 31.5 | 31.4 | 130.2 | 27.8 | 28.8 | 28.2 | ||||||||||||||||
Subtotal - Medicare supplement | 35.3 | 33.1 | 31.9 | 31.8 | 132.1 | 28.1 | 29.1 | 28.4 | ||||||||||||||||
Supplemental health (first-year) | 13.2 | 13.7 | 13.2 | 14.0 | 54.1 | 14.1 | 15.1 | 14.7 | ||||||||||||||||
Supplemental health (renewal) | 93.7 | 95.2 | 95.2 | 96.0 | 380.1 | 98.8 | 100.3 | 99.8 | ||||||||||||||||
Subtotal - supplemental health | 106.9 | 108.9 | 108.4 | 110.0 | 434.2 | 112.9 | 115.4 | 114.5 | ||||||||||||||||
Other health (all renewal) | 1.0 | 0.8 | 0.9 | 0.8 | 3.5 | 0.7 | 0.6 | 0.7 | ||||||||||||||||
Total health | 143.2 | 142.8 | 141.2 | 142.6 | 569.8 | 141.7 | 145.1 | 143.6 | ||||||||||||||||
Life insurance | ||||||||||||||||||||||||
First-year | 0.4 | 0.3 | 0.4 | 0.1 | 1.2 | 0.2 | 0.3 | 0.3 | ||||||||||||||||
Renewal | 3.9 | 3.6 | 3.7 | 3.6 | 14.8 | 3.8 | 3.5 | 2.7 | ||||||||||||||||
Total life insurance | 4.3 | 3.9 | 4.1 | 3.7 | 16.0 | 4.0 | 3.8 | 3.0 | ||||||||||||||||
Collections on insurance products | ||||||||||||||||||||||||
Total first-year premium collections on insurance products | 14.2 | 14.5 | 14.0 | 14.5 | 57.2 | 14.6 | 15.7 | 15.2 | ||||||||||||||||
Total renewal premium collections on insurance products | 133.3 | 132.2 | 131.3 | 131.8 | 528.6 | 131.1 | 133.2 | 131.4 | ||||||||||||||||
Total collections on insurance products | $ | 147.5 | $ | 146.7 | $ | 145.3 | $ | 146.3 | $ | 585.8 | $ | 145.7 | $ | 148.9 | $ | 146.6 | ||||||||
CNO Financial Group, Inc. | ||||||||||||||||||||||||
Colonial Penn | ||||||||||||||||||||||||
Premiums collected on insurance products (in millions) | 1Q11 | 2Q11 | 3Q11 | 4Q11 | 2011 | 1Q12 | 2Q12 | 3Q12 | ||||||||||||||||
Life insurance | ||||||||||||||||||||||||
First-year | $ | 8.7 | $ | 8.6 | $ | 8.9 | $ | 9.2 | $ | 35.4 | $ | 10.4 | $ | 10.7 | $ | 10.9 | ||||||||
Renewal | 40.7 | 39.9 | 40.3 | 40.1 | 161.0 | 42.2 | 41.8 | 42.1 | ||||||||||||||||
Total life insurance | 49.4 | 48.5 | 49.2 | 49.3 | 196.4 | 52.6 | 52.5 | 53.0 | ||||||||||||||||
Health (all renewal) | ||||||||||||||||||||||||
Medicare supplement | 1.3 | 1.4 | 1.3 | 1.2 | 5.2 | 1.2 | 1.1 | 1.1 | ||||||||||||||||
Other health | 0.2 | 0.1 | 0.1 | 0.1 | 0.5 | 0.1 | 0.1 | 0.1 | ||||||||||||||||
Total health | 1.5 | 1.5 | 1.4 | 1.3 | 5.7 | 1.3 | 1.2 | 1.2 | ||||||||||||||||
Collections on insurance products | ||||||||||||||||||||||||
Total first-year premium collections on insurance products | 8.7 | 8.6 | 8.9 | 9.2 | 35.4 | 10.4 | 10.7 | 10.9 | ||||||||||||||||
Total renewal premium collections on insurance products | 42.2 | 41.4 | 41.7 | 41.4 | 166.7 | 43.5 | 43.0 | 43.3 | ||||||||||||||||
Total collections on insurance products | $ | 50.9 | $ | 50.0 | $ | 50.6 | $ | 50.6 | $ | 202.1 | $ | 53.9 | $ | 53.7 | $ | 54.2 | ||||||||
CNO Financial Group, Inc. | ||||||||||||||||||||||||
Other CNO Business | ||||||||||||||||||||||||
Premiums collected on insurance products (in millions) | 1Q11 | 2Q11 | 3Q11 | 4Q11 | 2011 | 1Q12 | 2Q12 | 3Q12 | ||||||||||||||||
Annuities | ||||||||||||||||||||||||
Fixed index (first-year) | $ | 2.7 | $ | 2.7 | $ | 2.2 | $ | 1.9 | $ | 9.5 | $ | — | $ | 0.2 | $ | 0.1 | ||||||||
Fixed index (renewal) | 0.9 | 1.4 | 0.8 | 0.8 | 3.9 | 0.7 | 0.8 | 0.4 | ||||||||||||||||
Subtotal - fixed index annuities | 3.6 | 4.1 | 3.0 | 2.7 | 13.4 | 0.7 | 1.0 | 0.5 | ||||||||||||||||
Other fixed rate (first-year) | 0.4 | 1.6 | 0.1 | — | 2.1 | — | — | — | ||||||||||||||||
Other fixed rate (renewal) | 0.2 | 0.2 | 0.2 | 0.3 | 0.9 | 0.2 | 0.2 | 0.4 | ||||||||||||||||
Subtotal - other fixed rate annuities | 0.6 | 1.8 | 0.3 | 0.3 | 3.0 | 0.2 | 0.2 | 0.4 | ||||||||||||||||
Total annuities | 4.2 | 5.9 | 3.3 | 3.0 | 16.4 | 0.9 | 1.2 | 0.9 | ||||||||||||||||
Health | ||||||||||||||||||||||||
Long-term care (all renewal) | 7.4 | 7.0 | 6.5 | 6.1 | 27.0 | 6.7 | 6.3 | 6.0 | ||||||||||||||||
Other health (all renewal) | 0.2 | 0.2 | 0.2 | 0.2 | 0.8 | 0.2 | 0.2 | 0.1 | ||||||||||||||||
Total health | 7.6 | 7.2 | 6.7 | 6.3 | 27.8 | 6.9 | 6.5 | 6.1 | ||||||||||||||||
Life insurance | ||||||||||||||||||||||||
First-year | 0.4 | 0.9 | 0.3 | 0.5 | 2.1 | 0.6 | 0.8 | 0.9 | ||||||||||||||||
Renewal | 46.0 | 48.0 | 43.7 | 39.6 | 177.3 | 44.7 | 40.1 | 39.4 | ||||||||||||||||
Total life insurance | 46.4 | 48.9 | 44.0 | 40.1 | 179.4 | 45.3 | 40.9 | 40.3 | ||||||||||||||||
Collections on insurance products | ||||||||||||||||||||||||
Total first-year premium collections on insurance products | 3.5 | 5.2 | 2.6 | 2.4 | 13.7 | 0.6 | 1.0 | 1.0 | ||||||||||||||||
Total renewal premium collections on insurance products | 54.7 | 56.8 | 51.4 | 47.0 | 209.9 | 52.5 | 47.6 | 46.3 | ||||||||||||||||
Total collections on insurance products | $ | 58.2 | $ | 62.0 | $ | 54.0 | $ | 49.4 | $ | 223.6 | $ | 53.1 | $ | 48.6 | $ | 47.3 | ||||||||
CNO Financial Group, Inc. | ||||||||||||||||||||||||
New Annualized Premiums ("NAP") (in millions) | ||||||||||||||||||||||||
Bankers Life | 1Q11 | 2Q11 | 3Q11 | 4Q11 | 2011 | 1Q12 | 2Q12 | 3Q12 | ||||||||||||||||
Medicare supplement | $ | 18.3 | $ | 18.6 | $ | 19.4 | $ | 31.5 | $ | 87.8 | $ | 19.5 | $ | 20.7 | $ | 21.1 | ||||||||
Life | 16.6 | 18.6 | 18.2 | 17.0 | 70.4 | 20.3 | 20.9 | 18.9 | ||||||||||||||||
Long-term care | 6.9 | 7.3 | 7.3 | 7.0 | 28.5 | 7.9 | 7.8 | 7.2 | ||||||||||||||||
Annuity | 13.4 | 15.6 | 15.9 | 14.3 | 59.2 | 11.1 | 10.1 | 10.4 | ||||||||||||||||
Subtotal Bankers Life | 55.2 | 60.1 | 60.8 | 69.8 | 245.9 | 58.8 | 59.5 | 57.6 | ||||||||||||||||
Washington National | ||||||||||||||||||||||||
Supplemental health | 15.7 | 17.9 | 18.6 | 18.9 | 71.1 | 17.6 | 20.3 | 19.7 | ||||||||||||||||
Medicare supplement | 0.5 | 0.4 | 0.3 | 0.3 | 1.5 | 0.3 | 0.2 | 0.2 | ||||||||||||||||
Life | 0.8 | 0.8 | 0.9 | 1.8 | 4.3 | 2.0 | 1.7 | 1.5 | ||||||||||||||||
Annuity | 0.2 | 0.3 | 0.2 | 0.2 | 0.9 | — | 0.1 | — | ||||||||||||||||
Subtotal Washington National | 17.2 | 19.4 | 20.0 | 21.2 | 77.8 | 19.9 | 22.3 | 21.4 | ||||||||||||||||
Colonial Penn | ||||||||||||||||||||||||
Graded Life | 13.6 | 12.8 | 12.7 | 12.3 | 51.4 | 17.5 | 15.6 | 15.1 | ||||||||||||||||
Total NAP | $ | 86.0 | $ | 92.3 | $ | 93.5 | $ | 103.3 | $ | 375.1 | $ | 96.2 | $ | 97.4 | $ | 94.1 | ||||||||
CNO Financial Group, Inc. | ||||||||||||||||||||||||
Statutory information - consolidated basis (7) (in millions) | 1Q11 | 2Q11 | 3Q11 | 4Q11 | 2011 | 1Q12 | 2Q12 | 3Q12 (*) | ||||||||||||||||
Net gain from operations before interest expense and federal income taxes | $ | 114.0 | $ | 92.9 | $ | 91.9 | $ | 132.8 | $ | 431.6 | $ | 100.4 | $ | 107.7 | $ | 82.8 | ||||||||
Interest expense on surplus debentures held by parent company | 12.0 | 12.2 | 22.7 | 12.3 | 59.2 | 12.1 | 12.1 | 22.4 | ||||||||||||||||
Net gain from operations before federal income taxes | 102.0 | 80.7 | 69.2 | 120.5 | 372.4 | 88.3 | 95.6 | 60.4 | ||||||||||||||||
Federal income tax expense (benefit) | 0.6 | 2.0 | 3.7 | 3.0 | 9.3 | 1.7 | (0.9 | ) | 0.1 | |||||||||||||||
Net gain from operations before net realized capital gains (losses) | 101.4 | 78.7 | 65.5 | 117.5 | 363.1 | 86.6 | 96.5 | 60.3 | ||||||||||||||||
Net realized capital gains (losses) | (15.0 | ) | 2.4 | 10.5 | 5.8 | 3.7 | 7.8 | 7.2 | (10.6 | ) | ||||||||||||||
Net income | $ | 86.4 | $ | 81.1 | $ | 76.0 | $ | 123.3 | $ | 366.8 | $ | 94.4 | $ | 103.7 | $ | 49.7 | ||||||||
Capital and surplus | $ | 1,567.4 | $ | 1,551.5 | $ | 1,553.1 | $ | 1,578.1 | $ | 1,578.1 | $ | 1,601.9 | $ | 1,626.0 | $ | 1,554.3 | ||||||||
Asset valuation reserve (AVR) | 97.7 | 116.5 | 143.2 | 168.4 | 168.4 | 191.3 | 206.1 | 212.5 | ||||||||||||||||
Capital, surplus and AVR | 1,665.1 | 1,668.0 | 1,696.3 | 1,746.5 | 1,746.5 | 1,793.2 | 1,832.1 | 1,766.8 | ||||||||||||||||
Interest maintenance reserve (IMR) | 448.3 | 475.8 | 507.1 | 552.0 | 552.0 | 562.2 | 581.4 | 590.1 | ||||||||||||||||
Total statutory capital, surplus, AVR & IMR | $ | 2,113.4 | $ | 2,143.8 | $ | 2,203.4 | $ | 2,298.5 | $ | 2,298.5 | $ | 2,355.4 | $ | 2,413.5 | $ | 2,356.9 | ||||||||
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