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 July 29, 2013 related to financial results for the quarter ended June 30, 2013. |
99.2 | Quarterly Financial Supplement - 2Q2013. |
CNO Financial Group, Inc. | |||
Date: July 29, 2013 | |||
By: | /s/ John R. Kline | ||
John R. Kline | |||
Senior Vice President and Chief Accounting Officer | |||
Contact: | (News Media) Barbara Ciesemier +1.312.396.7461 |
(Investors) Erik Helding +1.317.817.4760 |
• | Sales, as defined by total new annualized premium ("NAP") (2): $102.3 million, up 5% from 2Q12 |
• | Net income per diluted share: 34 cents, compared to 24 cents in 2Q12 |
• | Net operating income (1) per diluted share: 30 cents compared to 20 cents in 2Q12 |
• | Unrestricted cash and investments held by our holding company were $230 million at June 30, 2013 |
• | Sales, as defined by total NAP (2): $200.4 million, up 4% from the first six months of 2012 |
• | Net income per diluted share of 38 cents (including a loss on extinguishment of debt of 27 cents), compared to 45 cents in the first six months of 2012 |
• | Net operating income (1) per diluted share: 50 cents compared to 35 cents in the first six months of 2012 |
• | The consolidated statutory risk-based capital ratio increased 9 percentage points to 376% during the first six months of 2013, reflecting statutory operating earnings of $214.6 million and dividend payments to the holding company of $138.5 million |
Three months ended | |||||||
June 30, | |||||||
2013 | 2012 | ||||||
(Dollars in millions, except per share data) | |||||||
EBIT (4): | |||||||
Bankers Life | $ | 79.1 | $ | 76.1 | |||
Washington National | 31.8 | 33.9 | |||||
Colonial Penn | 1.2 | .6 | |||||
Other CNO Business | 2.6 | 1.9 | |||||
EBIT from business segments | 114.7 | 112.5 | |||||
Corporate Operations, excluding corporate interest expense | 2.4 | (9.1 | ) | ||||
EBIT | 117.1 | 103.4 | |||||
Corporate interest expense | (13.1 | ) | (16.6 | ) | |||
Operating earnings before tax | 104.0 | 86.8 | |||||
Tax expense on operating income | 36.3 | 32.6 | |||||
Net operating income (1) | 67.7 | 54.2 | |||||
Net realized investment gains (net of related amortization and taxes) | 1.8 | 18.7 | |||||
Fair value changes in embedded derivative liabilities (net of related amortization and taxes) | 12.1 | (6.9 | ) | ||||
Equity in earnings of certain non-strategic investments and earnings attributable to non-controlling interests (net of taxes) | (2.7 | ) | — | ||||
Loss on extinguishment of debt (net of taxes) | (6.8 | ) | (.3 | ) | |||
Net income before valuation allowance for deferred tax assets | 72.1 | 65.7 | |||||
Valuation allowance for deferred tax assets | 5.0 | — | |||||
Net income | $ | 77.1 | $ | 65.7 | |||
Per diluted share: | |||||||
Net operating income | $ | .30 | $ | .20 | |||
Net realized investment gains (net of related amortization and taxes) | .01 | .06 | |||||
Fair value changes in embedded derivative liabilities (net of related amortization and taxes) | .05 | (.02 | ) | ||||
Equity in earnings of certain non-strategic investments and earnings attributable to non-controlling interests (net of taxes) | (.01 | ) | — | ||||
Loss on extinguishment of debt (net of taxes) | (.03 | ) | — | ||||
Valuation allowance for deferred tax assets | .02 | — | |||||
Net income | $ | .34 | $ | .24 |
Three months ended | |||||||||||
June 30, 2013* | |||||||||||
Actual results | Significant items | Excluding significant items | |||||||||
Net Operating Income (1): | |||||||||||
Bankers Life | $ | 79.1 | $ | (2.5 | ) | $ | 76.6 | ||||
Washington National | 31.8 | (1.5 | ) | 30.3 | |||||||
Colonial Penn | 1.2 | — | 1.2 | ||||||||
Other CNO Business | 2.6 | — | 2.6 | ||||||||
EBIT from business segments | 114.7 | (4.0 | ) | 110.7 | |||||||
Corporate Operations, excluding corporate interest expense | 2.4 | (6.0 | ) | (3.6 | ) | ||||||
EBIT (4) | 117.1 | (10.0 | ) | 107.1 | |||||||
Corporate interest expense | (13.1 | ) | — | (13.1 | ) | ||||||
Operating earnings before tax | 104.0 | (10.0 | ) | 94.0 | |||||||
Tax expense on operating income | 36.3 | (3.5 | ) | 32.8 | |||||||
Net operating income | $ | 67.7 | $ | (6.5 | ) | $ | 61.2 | ||||
Net operating income per diluted share | $ | .30 | $ | (.03 | ) | $ | .27 |
June 30, 2013 | December 31, 2012 | ||||||
(unaudited) | |||||||
ASSETS | |||||||
Investments: | |||||||
Fixed maturities, available for sale, at fair value (amortized cost: June 30, 2013 - $22,023.7; December 31, 2012 - $21,626.8) | $ | 23,623.0 | $ | 24,614.1 | |||
Equity securities at fair value (cost: June 30, 2013 - $230.8; December 31, 2012 - $167.1) | 241.3 | 171.4 | |||||
Mortgage loans | 1,692.2 | 1,573.2 | |||||
Policy loans | 269.1 | 272.0 | |||||
Trading securities | 241.0 | 266.2 | |||||
Investments held by variable interest entities | 1,087.9 | 814.3 | |||||
Other invested assets | 312.6 | 248.1 | |||||
Total investments | 27,467.1 | 27,959.3 | |||||
Cash and cash equivalents - unrestricted | 280.0 | 582.5 | |||||
Cash and cash equivalents held by variable interest entities | 210.7 | 54.2 | |||||
Accrued investment income | 294.8 | 286.2 | |||||
Present value of future profits | 591.6 | 626.0 | |||||
Deferred acquisition costs | 762.1 | 629.7 | |||||
Reinsurance receivables | 2,838.0 | 2,927.7 | |||||
Income tax assets, net | 931.2 | 716.9 | |||||
Assets held in separate accounts | 15.0 | 14.9 | |||||
Other assets | 385.1 | 334.0 | |||||
Total assets | $ | 33,775.6 | $ | 34,131.4 | |||
LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||
Liabilities: | |||||||
Liabilities for insurance products: | |||||||
Interest-sensitive products | $ | 12,784.2 | $ | 12,893.2 | |||
Traditional products | 10,834.4 | 11,196.3 | |||||
Claims payable and other policyholder funds | 1,006.4 | 985.1 | |||||
Liabilities related to separate accounts | 15.0 | 14.9 | |||||
Other liabilities | 626.8 | 570.6 | |||||
Investment borrowings | 1,878.0 | 1,650.8 | |||||
Borrowings related to variable interest entities | 1,143.7 | 767.0 | |||||
Notes payable – direct corporate obligations | 905.7 | 1,004.2 | |||||
Total liabilities | 29,194.2 | 29,082.1 | |||||
Commitments and Contingencies | |||||||
Shareholders' equity: | |||||||
Common stock ($0.01 par value, 8,000,000,000 shares authorized, shares issued and outstanding: June 30, 2013 - 219,378,666; December 31, 2012 – 221,502,371) | 2.2 | 2.2 | |||||
Additional paid-in capital | 4,128.2 | 4,174.7 | |||||
Accumulated other comprehensive income | 698.1 | 1,197.4 | |||||
Accumulated deficit | (247.1 | ) | (325.0 | ) | |||
Total shareholders' equity | 4,581.4 | 5,049.3 | |||||
Total liabilities and shareholders' equity | $ | 33,775.6 | $ | 34,131.4 |
Three months ended | Six months ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Revenues: | |||||||||||||||
Insurance policy income | $ | 691.3 | $ | 694.8 | $ | 1,382.5 | $ | 1,381.1 | |||||||
Net investment income: | |||||||||||||||
General account assets | 348.8 | 351.1 | 700.7 | 696.3 | |||||||||||
Policyholder and reinsurer accounts and other special-purpose portfolios | 31.8 | (17.3 | ) | 109.5 | 48.3 | ||||||||||
Realized investment gains: | |||||||||||||||
Net realized investment gains, excluding impairment losses | 3.8 | 35.4 | 19.1 | 66.2 | |||||||||||
Other-than-temporary impairment losses: | |||||||||||||||
Total other-than-temporary impairment losses | (.6 | ) | (3.5 | ) | (.6 | ) | (11.4 | ) | |||||||
Portion of other-than-temporary impairment losses recognized in accumulated other comprehensive income | — | — | — | — | |||||||||||
Net impairment losses recognized | (.6 | ) | (3.5 | ) | (.6 | ) | (11.4 | ) | |||||||
Total realized gains | 3.2 | 31.9 | 18.5 | 54.8 | |||||||||||
Fee revenue and other income | 6.4 | 4.5 | 12.9 | 8.4 | |||||||||||
Total revenues | 1,081.5 | 1,065.0 | 2,224.1 | 2,188.9 | |||||||||||
Benefits and expenses: | |||||||||||||||
Insurance policy benefits | 673.2 | 689.7 | 1,427.3 | 1,378.7 | |||||||||||
Interest expense | 26.9 | 28.7 | 54.2 | 57.5 | |||||||||||
Amortization | 79.2 | 68.3 | 158.5 | 154.9 | |||||||||||
Loss on extinguishment of debt | 7.7 | .5 | 65.4 | .7 | |||||||||||
Other operating costs and expenses | 179.8 | 173.3 | 369.4 | 400.3 | |||||||||||
Total benefits and expenses | 966.8 | 960.5 | 2,074.8 | 1,992.1 | |||||||||||
Income before income taxes | 114.7 | 104.5 | 149.3 | 196.8 | |||||||||||
Income tax expense (benefit): | |||||||||||||||
Tax expense on period income | 42.6 | 38.8 | 75.8 | 72.0 | |||||||||||
Valuation allowance for deferred tax assets | (5.0 | ) | — | (15.5 | ) | — | |||||||||
Net income | $ | 77.1 | $ | 65.7 | $ | 89.0 | $ | 124.8 | |||||||
Earnings per common share: | |||||||||||||||
Basic: | |||||||||||||||
Weighted average shares outstanding | 220,498,000 | 237,289,000 | 221,290,000 | 239,092,000 | |||||||||||
Net income | $ | .35 | $ | .28 | $ | .40 | $ | .52 | |||||||
Diluted: | |||||||||||||||
Weighted average shares outstanding | 230,893,000 | 293,475,000 | 237,180,000 | 295,409,000 | |||||||||||
Net income | $ | .34 | $ | .24 | $ | .38 | $ | .45 |
Three months ended | Six months ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
EBIT (4) from In-force and New Business | |||||||||||||||
Bankers Life segment: | |||||||||||||||
In-Force Business | $ | 109.6 | $ | 102.6 | $ | 205.7 | $ | 199.7 | |||||||
New Business | (30.5 | ) | (26.5 | ) | (64.5 | ) | (53.1 | ) | |||||||
Total | $ | 79.1 | $ | 76.1 | $ | 141.2 | $ | 146.6 | |||||||
Washington National segment: | |||||||||||||||
In-Force Business | $ | 31.0 | $ | 34.2 | $ | 60.7 | $ | 61.6 | |||||||
New Business | .8 | (.3 | ) | .5 | (3.0 | ) | |||||||||
Total | $ | 31.8 | $ | 33.9 | $ | 61.2 | $ | 58.6 | |||||||
Colonial Penn segment: | |||||||||||||||
In-Force Business | $ | 12.4 | $ | 11.2 | $ | 21.2 | $ | 17.9 | |||||||
New Business | (11.2 | ) | (10.6 | ) | (25.4 | ) | (27.1 | ) | |||||||
Total | $ | 1.2 | $ | .6 | $ | (4.2 | ) | $ | (9.2 | ) | |||||
Other CNO Business segment: | |||||||||||||||
In-Force Business | $ | 2.6 | $ | 1.9 | $ | 6.2 | $ | (.4 | ) | ||||||
New Business | — | — | — | — | |||||||||||
Total | $ | 2.6 | $ | 1.9 | $ | 6.2 | $ | (.4 | ) | ||||||
Total Business segments: | |||||||||||||||
In-Force Business | $ | 155.6 | $ | 149.9 | $ | 293.8 | $ | 278.8 | |||||||
New Business | (40.9 | ) | (37.4 | ) | (89.4 | ) | (83.2 | ) | |||||||
Total EBIT from business segments | $ | 114.7 | $ | 112.5 | $ | 204.4 | $ | 195.6 |
Six months ended | |||||||
June 30, | |||||||
2013 | 2012 | ||||||
EBIT (4): | |||||||
Bankers Life | $ | 141.2 | $ | 146.6 | |||
Washington National | 61.2 | 58.6 | |||||
Colonial Penn | (4.2 | ) | (9.2 | ) | |||
Other CNO Business | 6.2 | (.4 | ) | ||||
EBIT from business segments | 204.4 | 195.6 | |||||
Corporate Operations, excluding corporate interest expense | 5.4 | (10.9 | ) | ||||
EBIT | 209.8 | 184.7 | |||||
Corporate interest expense | (28.2 | ) | (34.1 | ) | |||
Operating earnings before tax | 181.6 | 150.6 | |||||
Tax expense on operating income | 64.2 | 55.8 | |||||
Net operating income (1) | 117.4 | 94.8 | |||||
Net realized investment gains (net of related amortization and taxes) | 11.2 | 32.8 | |||||
Fair value changes in embedded derivative liabilities (net of related amortization and taxes) | 13.4 | (2.4 | ) | ||||
Equity in earnings of certain non-strategic investments and earnings attributable to non-controlling interests (net of taxes) | (4.5 | ) | — | ||||
Loss on extinguishment of debt (net of taxes) | (64.0 | ) | (.4 | ) | |||
Net income before valuation allowance for deferred tax assets | 73.5 | 124.8 | |||||
Valuation allowance for deferred tax assets | 15.5 | — | |||||
Net income | $ | 89.0 | $ | 124.8 | |||
Per diluted share: | |||||||
Net operating income | $ | .50 | $ | .35 | |||
Net realized investment gains (net of related amortization and taxes) | .05 | .11 | |||||
Fair value changes in embedded derivative liabilities (net of related amortization and taxes) | .06 | (.01 | ) | ||||
Equity in earnings of certain non-strategic investments and earnings attributable to non-controlling interests (net of taxes) | (.02 | ) | — | ||||
Loss on extinguishment of debt (net of taxes) | (.27 | ) | — | ||||
Valuation allowance for deferred tax assets | .06 | — | |||||
Net income | $ | .38 | $ | .45 |
Three months ended | |||||||||||
June 30, 2012* | |||||||||||
Actual results | Significant item | Excluding significant item | |||||||||
Net Operating Income (1): | |||||||||||
Bankers Life | $ | 76.1 | $ | (3.6 | ) | $ | 72.5 | ||||
Washington National | 33.9 | — | 33.9 | ||||||||
Colonial Penn | .6 | — | .6 | ||||||||
Other CNO Business | 1.9 | — | 1.9 | ||||||||
EBIT from business segments | 112.5 | (3.6 | ) | 108.9 | |||||||
Corporate Operations, excluding corporate interest expense | (9.1 | ) | — | (9.1 | ) | ||||||
EBIT (4) | 103.4 | (3.6 | ) | 99.8 | |||||||
Corporate interest expense | (16.6 | ) | — | (16.6 | ) | ||||||
Operating earnings before tax | 86.8 | (3.6 | ) | 83.2 | |||||||
Tax expense on operating income | 32.6 | (1.3 | ) | 31.3 | |||||||
Net operating income | $ | 54.2 | $ | (2.3 | ) | $ | 51.9 | ||||
Net operating income per diluted share | $ | .20 | $ | (.01 | ) | $ | .19 |
Three months ended | |||||||
June 30, | |||||||
2013 | 2012 | ||||||
Bankers Life segment: | |||||||
Medicare supplement | $ | 189.2 | $ | 192.3 | |||
Long-term care | 133.2 | 138.8 | |||||
Supplemental health | 2.2 | .2 | |||||
Life | 91.1 | 75.4 | |||||
Annuity | 183.7 | 169.5 | |||||
Total | 599.4 | 576.2 | |||||
Washington National segment: | |||||||
Supplemental health | 121.9 | 115.4 | |||||
Medicare supplement and other health | 25.7 | 29.7 | |||||
Life | 3.4 | 3.8 | |||||
Total | 151.0 | 148.9 | |||||
Colonial Penn segment: | |||||||
Life | 56.4 | 52.5 | |||||
Supplemental health | 1.0 | 1.2 | |||||
Total | 57.4 | 53.7 | |||||
Other CNO Business segment: | |||||||
Life | 39.5 | 40.9 | |||||
Annuity | 1.5 | 1.2 | |||||
Other health | 6.2 | 6.5 | |||||
Total | 47.2 | 48.6 | |||||
Total collected premiums | $ | 855.0 | $ | 827.4 |
Three months ended | |||||||
June 30, | |||||||
2013 | 2012 | ||||||
Bankers Life segment: | |||||||
Medicare supplement | $ | 19.0 | $ | 19.9 | |||
Long-term care | 6.5 | 7.8 | |||||
Supplemental health | 2.7 | .8 | |||||
Life | 24.2 | 20.9 | |||||
Annuity | 10.8 | 10.1 | |||||
Total | 63.2 | 59.5 | |||||
Washington National segment: | |||||||
Supplemental health | 21.3 | 20.3 | |||||
Medicare supplement | — | .2 | |||||
Life | 1.9 | 1.7 | |||||
Annuity | .1 | .1 | |||||
Total | 23.3 | 22.3 | |||||
Colonial Penn segment: | |||||||
Life | 15.8 | 15.6 | |||||
Total | 15.8 | 15.6 | |||||
Total new annualized premiums | $ | 102.3 | $ | 97.4 |
Three months ended | |||||
June 30, | |||||
2013 | 2012 | ||||
Bankers Life segment: | |||||
Medicare Supplement: | |||||
Earned premium | $189 million | $184 million | |||
Benefit ratio (7) | 67.2 | % | 72.2 | % | |
PDP: | |||||
Earned premium | $11 million | $18 million | |||
Benefit ratio (7) | 85.2 | % | 64.2 | % | |
Long-Term Care: | |||||
Earned premium | $134 million | $140 million | |||
Benefit ratio (7) | 129.5 | % | 121.4 | % | |
Interest-adjusted benefit ratio (a non-GAAP measure) (8) | 81.4 | % | 75.4 | % | |
Washington National segment: | |||||
Medicare Supplement: | |||||
Earned premium | $26 million | $30 million | |||
Benefit ratio (7) | 65.5 | % | 67.7 | % | |
Supplemental health: | |||||
Earned premium | $119 million | $113 million | |||
Benefit ratio (7) | 78.6 | % | 77.0 | % | |
Interest-adjusted benefit ratio (a non-GAAP measure) (8) | 52.6 | % | 50.1 | % |
(1) | Management believes that an analysis of Net income applicable to common stock before: (i) net realized investment gains or losses, net of related amortization and taxes; (ii) 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; (iii) equity in earnings of certain non-strategic investments and earnings attributable to non-controlling interests, net of taxes; (iv) loss on extinguishment of debt, net of taxes; and (v) changes in the valuation allowance for deferred tax assets ("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. 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 16.6% at June 30, 2013 and December 31, 2012, 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, equity in earnings of certain non-strategic investments and earnings attributable to non-controlling interests, 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) | Book value per diluted share reflects the potential dilution that could occur if outstanding stock options and warrants were exercised, restricted stock and performance units were vested and convertible securities were converted. The dilution from options, warrants, 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 and warrants (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. The dilution from convertible securities is calculated assuming the securities were converted 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. The corresponding GAAP measures for book value per common share were $20.88 and $22.80 at June 30, 2013 and December 31, 2012, 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 |
Quarterly Financial Supplement - | |||||
2Q2013 | |||||
July 29, 2013 | |||||
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-12 | Jun-12 | Sep-12 | Dec-12 | Mar-13 | Jun-13 | ||||||||||||||
Assets | ||||||||||||||||||||
Investments: | ||||||||||||||||||||
Fixed maturities, available for sale, at fair value | $ | 23,777.7 | $ | 24,276.6 | $ | 24,742.3 | $ | 24,614.1 | $ | 24,894.5 | $ | 23,623.0 | ||||||||
Equity securities at fair value | 176.5 | 187.3 | 180.0 | 171.4 | 216.9 | 241.3 | ||||||||||||||
Mortgage loans | 1,546.7 | 1,550.9 | 1,597.2 | 1,573.2 | 1,639.8 | 1,692.2 | ||||||||||||||
Policy loans | 277.8 | 274.7 | 274.1 | 272.0 | 271.5 | 269.1 | ||||||||||||||
Trading securities | 122.3 | 114.8 | 199.4 | 266.2 | 229.8 | 241.0 | ||||||||||||||
Investments held by variable interest entities | 564.7 | 789.3 | 829.4 | 814.3 | 1,009.9 | 1,087.9 | ||||||||||||||
Other invested assets | 270.9 | 257.1 | 265.0 | 248.1 | 309.7 | 312.6 | ||||||||||||||
Total investments | 26,736.6 | 27,450.7 | 28,087.4 | 27,959.3 | 28,572.1 | 27,467.1 | ||||||||||||||
Cash and cash equivalents - unrestricted | 173.5 | 190.2 | 415.3 | 582.5 | 251.6 | 280.0 | ||||||||||||||
Cash and cash equivalents held by variable interest entities | 65.8 | 88.6 | 48.2 | 54.2 | 462.2 | 210.7 | ||||||||||||||
Accrued investment income | 313.6 | 296.4 | 317.8 | 286.2 | 315.8 | 294.8 | ||||||||||||||
Present value of future profits | 675.4 | 658.1 | 642.4 | 626.0 | 606.6 | 591.6 | ||||||||||||||
Deferred acquisition costs | 790.4 | 653.5 | 623.4 | 629.7 | 654.4 | 762.1 | ||||||||||||||
Reinsurance receivables | 3,052.7 | 3,013.8 | 2,967.7 | 2,927.7 | 2,879.5 | 2,838.0 | ||||||||||||||
Income tax assets, net | 819.9 | 679.7 | 699.5 | 716.9 | 708.5 | 931.2 | ||||||||||||||
Assets held in separate accounts | 16.0 | 15.6 | 15.7 | 14.9 | 15.5 | 15.0 | ||||||||||||||
Other assets | 402.3 | 395.8 | 338.6 | 334.0 | 433.0 | 385.1 | ||||||||||||||
Total assets | $ | 33,046.2 | $ | 33,442.4 | $ | 34,156.0 | $ | 34,131.4 | $ | 34,899.2 | $ | 33,775.6 | ||||||||
Liabilities | ||||||||||||||||||||
Liabilities for insurance products: | ||||||||||||||||||||
Interest-sensitive products | $ | 13,103.4 | $ | 12,956.3 | $ | 12,930.3 | $ | 12,893.2 | $ | 12,867.1 | $ | 12,784.2 | ||||||||
Traditional products | 10,517.9 | 10,666.7 | 11,004.3 | 11,196.3 | 11,130.9 | 10,834.4 | ||||||||||||||
Claims payable and other policyholder funds | 1,000.8 | 991.9 | 977.6 | 985.1 | 996.3 | 1,006.4 | ||||||||||||||
Liabilities related to separate accounts | 16.0 | 15.6 | 15.7 | 14.9 | 15.5 | 15.0 | ||||||||||||||
Other liabilities | 721.0 | 686.0 | 709.0 | 570.6 | 903.0 | 626.8 | ||||||||||||||
Investment borrowings | 1,684.9 | 1,687.9 | 1,650.9 | 1,650.8 | 1,880.2 | 1,878.0 | ||||||||||||||
Borrowings related to variable interest entities | 519.9 | 766.7 | 766.9 | 767.0 | 1,143.4 | 1,143.7 | ||||||||||||||
Notes payable - direct corporate obligations | 799.3 | 778.2 | 1,035.1 | 1,004.2 | 934.2 | 905.7 | ||||||||||||||
Total liabilities | 28,363.2 | 28,549.3 | 29,089.8 | 29,082.1 | 29,870.6 | 29,194.2 | ||||||||||||||
Shareholders' equity | ||||||||||||||||||||
Common stock | 2.4 | 2.3 | 2.3 | 2.2 | 2.2 | 2.2 | ||||||||||||||
Additional paid-in capital | 4,345.6 | 4,312.0 | 4,251.2 | 4,174.7 | 4,173.2 | 4,128.2 | ||||||||||||||
Accumulated deficit | (473.0 | ) | (412.0 | ) | (421.7 | ) | (325.0 | ) | (317.5 | ) | (247.1 | ) | ||||||||
Total shareholders' equity before accumulated other comprehensive income | 3,875.0 | 3,902.3 | 3,831.8 | 3,851.9 | 3,857.9 | 3,883.3 | ||||||||||||||
Accumulated other comprehensive income | 808.0 | 990.8 | 1,234.4 | 1,197.4 | 1,170.7 | 698.1 | ||||||||||||||
Total shareholders' equity | 4,683.0 | 4,893.1 | 5,066.2 | 5,049.3 | 5,028.6 | 4,581.4 | ||||||||||||||
Total liabilities and shareholders' equity | $ | 33,046.2 | $ | 33,442.4 | $ | 34,156.0 | $ | 34,131.4 | $ | 34,899.2 | $ | 33,775.6 | ||||||||
1Q12 | 2Q12 | 3Q12 | 4Q12 | 1Q13 | 2Q13 | |||||||||||||||
Book value per share at period-end (1) (2) | $ | 16.20 | $ | 16.67 | $ | 16.70 | $ | 17.39 | $ | 17.26 | $ | 17.70 | ||||||||
Book value per diluted share (1) (3) | $ | 14.05 | $ | 14.41 | $ | 15.63 | $ | 16.21 | $ | 16.57 | $ | 17.01 | ||||||||
CNO Financial Group, Inc. | |||||||||||||||||||||
Consolidated statement of operations (in millions) | 1Q12 | 2Q12 | 3Q12 | 4Q12 | 2012 | 1Q13 | 2Q13 | ||||||||||||||
Revenues | |||||||||||||||||||||
Insurance policy income | $ | 686.3 | $ | 694.8 | $ | 690.2 | $ | 684.1 | $ | 2,755.4 | $ | 691.2 | $ | 691.3 | |||||||
Net investment income (loss): | |||||||||||||||||||||
General account assets | 345.2 | 351.1 | 349.4 | 352.8 | 1,398.5 | 351.9 | 348.8 | ||||||||||||||
Policyholder and reinsurer accounts and other special-purpose portfolios | 65.6 | (17.3 | ) | 39.1 | 0.5 | 87.9 | 77.7 | 31.8 | |||||||||||||
Realized investment gains (losses): | |||||||||||||||||||||
Net realized investment gains, excluding impairment losses | 30.8 | 35.4 | 32.2 | 20.5 | 118.9 | 15.3 | 3.8 | ||||||||||||||
Other-than-temporary impairment losses: | |||||||||||||||||||||
Total other-than-temporary impairment losses | (7.9 | ) | (3.5 | ) | (23.1 | ) | (3.3 | ) | (37.8 | ) | — | (0.6 | ) | ||||||||
Portion of other-than-temporary impairment losses recognized in accumulated other comprehensive income | — | — | — | — | — | — | — | ||||||||||||||
Net impairment losses recognized | (7.9 | ) | (3.5 | ) | (23.1 | ) | (3.3 | ) | (37.8 | ) | — | (0.6 | ) | ||||||||
Total realized gains | 22.9 | 31.9 | 9.1 | 17.2 | 81.1 | 15.3 | 3.2 | ||||||||||||||
Fee revenue and other income | 3.9 | 4.5 | 5.2 | 6.2 | 19.8 | 6.5 | 6.4 | ||||||||||||||
Total revenues | 1,123.9 | 1,065.0 | 1,093.0 | 1,060.8 | 4,342.7 | 1,142.6 | 1,081.5 | ||||||||||||||
Benefits and expenses | |||||||||||||||||||||
Insurance policy benefits | 689.0 | 689.7 | 745.7 | 639.5 | 2,763.9 | 754.1 | 673.2 | ||||||||||||||
Interest expense | 28.8 | 28.7 | 29.2 | 27.9 | 114.6 | 27.3 | 26.9 | ||||||||||||||
Amortization | 86.6 | 68.3 | 60.9 | 73.2 | 289.0 | 79.3 | 79.2 | ||||||||||||||
Loss on extinguishment of debt | 0.2 | 0.5 | 198.5 | 1.0 | 200.2 | 57.7 | 7.7 | ||||||||||||||
Other operating costs and expenses | 227.0 | 173.3 | 217.5 | 201.5 | 819.3 | 189.6 | 179.8 | ||||||||||||||
Total benefits and expenses | 1,031.6 | 960.5 | 1,251.8 | 943.1 | 4,187.0 | 1,108.0 | 966.8 | ||||||||||||||
Income (loss) before income taxes | 92.3 | 104.5 | (158.8 | ) | 117.7 | 155.7 | 34.6 | 114.7 | |||||||||||||
Income tax expense (benefit) on period income | 33.2 | 38.8 | (10.8 | ) | 45.0 | 106.2 | 33.2 | 42.6 | |||||||||||||
Valuation allowance for deferred tax assets | — | — | (143.0 | ) | (28.5 | ) | (171.5 | ) | (10.5 | ) | (5.0 | ) | |||||||||
Net income (loss) | $ | 59.1 | $ | 65.7 | $ | (5.0 | ) | $ | 101.2 | $ | 221.0 | $ | 11.9 | $ | 77.1 | ||||||
CNO Financial Group, Inc. | |||||||||||||||||||||
Operating results ($ in millions, except per share amounts) | 1Q12 | 2Q12 | 3Q12 | 4Q12 | 2012 | 1Q13 | 2Q13 | ||||||||||||||
EBIT (4): | |||||||||||||||||||||
Bankers Life | $ | 70.5 | $ | 76.1 | $ | 80.6 | $ | 73.7 | $ | 300.9 | $ | 62.1 | $ | 79.1 | |||||||
Washington National | 24.7 | 33.9 | 33.9 | 34.6 | 127.1 | 29.4 | 31.8 | ||||||||||||||
Colonial Penn | (9.8 | ) | 0.6 | (2.6 | ) | 3.2 | (8.6 | ) | (5.4 | ) | 1.2 | ||||||||||
Other CNO Business | (2.3 | ) | 1.9 | (53.6 | ) | 5.2 | (48.8 | ) | 3.6 | 2.6 | |||||||||||
EBIT from business segments | 83.1 | 112.5 | 58.3 | 116.7 | 370.6 | 89.7 | 114.7 | ||||||||||||||
Corporate operations, excluding corporate interest expense | (1.8 | ) | (9.1 | ) | (6.7 | ) | (2.7 | ) | (20.3 | ) | 3.0 | 2.4 | |||||||||
EBIT | 81.3 | 103.4 | 51.6 | 114.0 | 350.3 | 92.7 | 117.1 | ||||||||||||||
Corporate interest expense | (17.5 | ) | (16.6 | ) | (16.3 | ) | (15.8 | ) | (66.2 | ) | (15.1 | ) | (13.1 | ) | |||||||
Income before net realized investment gains, fair value changes in embedded derivative liabilities, equity in earnings of certain non-strategic investments and earnings attributable to non-controlling interests, loss on extinguishment of debt and taxes | 63.8 | 86.8 | 35.3 | 98.2 | 284.1 | 77.6 | 104.0 | ||||||||||||||
Tax expense on operating income | 23.2 | 32.6 | 9.7 | 38.2 | 103.7 | 27.9 | 36.3 | ||||||||||||||
Net operating income (5) | 40.6 | 54.2 | 25.6 | 60.0 | 180.4 | 49.7 | 67.7 | ||||||||||||||
Net realized investment gains (net of related amortization and taxes) | 14.1 | 18.7 | 4.8 | 10.8 | 48.4 | 9.4 | 1.8 | ||||||||||||||
Fair value changes in embedded derivative liabilities (net of related amortization and taxes) | 4.5 | (6.9 | ) | (2.0 | ) | 2.6 | (1.8 | ) | 1.3 | 12.1 | |||||||||||
Equity in earnings of certain non-strategic investments and earnings attributable to non-controlling interests (net of taxes) | — | — | — | — | — | (1.8 | ) | (2.7 | ) | ||||||||||||
Loss on extinguishment of debt (net of taxes) | (0.1 | ) | (0.3 | ) | (176.4 | ) | (0.7 | ) | (177.5 | ) | (57.2 | ) | (6.8 | ) | |||||||
Net income (loss) before valuation allowance for deferred tax assets | 59.1 | 65.7 | (148.0 | ) | 72.7 | 49.5 | 1.4 | 72.1 | |||||||||||||
Valuation allowance for deferred tax assets | — | — | 143.0 | 28.5 | 171.5 | 10.5 | 5.0 | ||||||||||||||
Net income (loss) | $ | 59.1 | $ | 65.7 | $ | (5.0 | ) | $ | 101.2 | $ | 221.0 | $ | 11.9 | $ | 77.1 | ||||||
Per diluted share: | |||||||||||||||||||||
Net operating income | $ | .15 | $ | .20 | $ | .11 | $ | .25 | $ | .69 | $ | .21 | $ | .30 | |||||||
Net realized investment gains (net of related amortization and taxes) | .05 | .06 | .02 | .04 | .17 | .04 | .01 | ||||||||||||||
Fair value changes in embedded derivative liabilities (net of related amortization and taxes) | .01 | (.02 | ) | (.01 | ) | .01 | (.01 | ) | .01 | .05 | |||||||||||
Equity in earnings of certain non-strategic investments and earnings attributable to non-controlling interests (net of taxes) | — | — | — | — | — | (.01 | ) | (.01 | ) | ||||||||||||
Loss on extinguishment of debt (net of taxes) | — | — | (.76 | ) | — | (.63 | ) | (.24 | ) | (.03 | ) | ||||||||||
Valuation allowance for deferred tax assets | — | — | .62 | .11 | .61 | .04 | .02 | ||||||||||||||
Net income (loss) | $ | .21 | $ | .24 | $ | (.02 | ) | $ | .41 | $ | .83 | $ | .05 | $ | .34 | ||||||
CNO Financial Group, Inc. | ||||||||||||||
Computation of weighted average shares outstanding | 1Q12 | 2Q12 | 3Q12 (a) | 4Q12 | 2012 | 1Q13 | 2Q13 | |||||||
(000s) | ||||||||||||||
Basic | ||||||||||||||
Shares outstanding, beginning of period | 241,304.5 | 239,219.4 | 234,026.4 | 229,506.7 | 241,304.5 | 221,502.4 | 223,502.1 | |||||||
Weighted average shares issued during the period: | ||||||||||||||
Shares repurchased | (470.7 | ) | (2,078.2 | ) | (2,689.9 | ) | (4,571.9 | ) | (8,307.8 | ) | — | (3,161.2 | ) | |
Stock options exercised and vested restricted and performance stock | 83.5 | 148.2 | 144.0 | 154.2 | 804.2 | 678.8 | 157.6 | |||||||
Shares withheld for the payment of taxes on the vesting of restricted stock | (22.2 | ) | (0.5 | ) | — | (14.8 | ) | (116.2 | ) | (100.0 | ) | (0.1 | ) | |
Weighted average basic shares outstanding during the period | 240,895.1 | 237,288.9 | 231,480.5 | 225,074.2 | 233,684.7 | 222,081.2 | 220,498.4 | |||||||
Basic shares outstanding, end of period | 239,219.4 | 234,026.4 | 229,506.7 | 221,502.4 | 221,502.4 | 223,502.1 | 219,378.7 | |||||||
Diluted | ||||||||||||||
Weighted average basic shares outstanding | 240,895.1 | 237,288.9 | 231,480.5 | 225,074.2 | 233,684.7 | 222,081.2 | 220,498.4 | |||||||
Common stock equivalent shares related to: | ||||||||||||||
Convertible debentures | 53,366.9 | 53,377.5 | — | 17,038.9 | 44,037.4 | 16,590.4 | 5,692.2 | |||||||
Stock options, restricted stock and performance units | 2,582.2 | 2,366.7 | — | 3,132.5 | 2,762.4 | 2,828.3 | 2,410.8 | |||||||
Warrants | 498.6 | 441.5 | — | 1,515.1 | 942.9 | 1,967.2 | 2,291.4 | |||||||
Weighted average diluted shares outstanding during the period | 297,342.8 | 293,474.6 | 231,480.5 | 246,760.7 | 281,427.4 | 243,467.1 | 230,892.8 | |||||||
Diluted shares outstanding, end of period | 295,667.1 | 290,212.1 | 250,819.6 | 243,188.8 | 243,188.8 | 234,865.1 | 229,928.4 | |||||||
EBIT from Business Segments Summarized by In-Force and New Business (6) | |||||||||||||||||||||
(in millions) | |||||||||||||||||||||
CNO Financial Group, Inc. | |||||||||||||||||||||
EBIT from In-Force Business | 1Q12 | 2Q12 | 3Q12 | 4Q12 | 2012 | 1Q13 | 2Q13 | ||||||||||||||
Revenues | |||||||||||||||||||||
Insurance policy income | $ | 597.0 | $ | 601.7 | $ | 594.4 | $ | 584.0 | $ | 2,377.1 | $ | 592.2 | $ | 594.6 | |||||||
Net investment income (loss) | 375.9 | 322.3 | 357.4 | 335.7 | 1,391.3 | 403.6 | 362.7 | ||||||||||||||
Fee revenue and other income | 1.9 | 2.4 | 3.3 | 3.4 | 11.0 | 2.6 | 2.9 | ||||||||||||||
Total revenues | 974.8 | 926.4 | 955.1 | 923.1 | 3,779.4 | 998.4 | 960.2 | ||||||||||||||
Benefits and expenses | |||||||||||||||||||||
Insurance policy benefits | 635.3 | 611.7 | 671.3 | 580.5 | 2,498.8 | 686.3 | 638.3 | ||||||||||||||
Interest expense | 7.2 | 7.2 | 7.0 | 6.6 | 28.0 | 6.7 | 7.0 | ||||||||||||||
Amortization | 73.1 | 64.6 | 54.1 | 62.7 | 254.5 | 70.8 | 60.3 | ||||||||||||||
Other operating costs and expenses | 130.3 | 93.0 | 118.3 | 112.9 | 454.5 | 96.4 | 99.0 | ||||||||||||||
Total benefits and expenses | 845.9 | 776.5 | 850.7 | 762.7 | 3,235.8 | 860.2 | 804.6 | ||||||||||||||
EBIT from In-Force Business | $ | 128.9 | $ | 149.9 | $ | 104.4 | $ | 160.4 | $ | 543.6 | $ | 138.2 | $ | 155.6 | |||||||
EBIT from New Business | |||||||||||||||||||||
Revenues | |||||||||||||||||||||
Insurance policy income | $ | 89.3 | $ | 93.1 | $ | 95.8 | $ | 100.1 | $ | 378.3 | $ | 99.0 | $ | 96.7 | |||||||
Net investment income (loss) | 11.7 | 4.3 | 11.7 | 5.0 | 32.7 | 9.7 | 5.7 | ||||||||||||||
Fee revenue and other income | 1.4 | 1.4 | 1.2 | 2.0 | 6.0 | 1.5 | 1.5 | ||||||||||||||
Total revenues | 102.4 | 98.8 | 108.7 | 107.1 | 417.0 | 110.2 | 103.9 | ||||||||||||||
Benefits and expenses | |||||||||||||||||||||
Insurance policy benefits | 65.3 | 60.3 | 69.8 | 65.3 | 260.7 | 70.9 | 63.9 | ||||||||||||||
Interest expense | — | — | — | — | — | — | — | ||||||||||||||
Amortization | 7.7 | 7.7 | 6.7 | 7.5 | 29.6 | 6.7 | 8.0 | ||||||||||||||
Other operating costs and expenses | 75.2 | 68.2 | 78.3 | 78.0 | 299.7 | 81.1 | 72.9 | ||||||||||||||
Total benefits and expenses | 148.2 | 136.2 | 154.8 | 150.8 | 590.0 | 158.7 | 144.8 | ||||||||||||||
EBIT from New Business | $ | (45.8 | ) | $ | (37.4 | ) | $ | (46.1 | ) | $ | (43.7 | ) | $ | (173.0 | ) | $ | (48.5 | ) | $ | (40.9 | ) |
EBIT from In-Force and New Business | |||||||||||||||||||||
Revenues | |||||||||||||||||||||
Insurance policy income | $ | 686.3 | $ | 694.8 | $ | 690.2 | $ | 684.1 | $ | 2,755.4 | $ | 691.2 | $ | 691.3 | |||||||
Net investment income (loss) | 387.6 | 326.6 | 369.1 | 340.7 | 1,424.0 | 413.3 | 368.4 | ||||||||||||||
Fee revenue and other income | 3.3 | 3.8 | 4.5 | 5.4 | 17.0 | 4.1 | 4.4 | ||||||||||||||
Total revenues | 1,077.2 | 1,025.2 | 1,063.8 | 1,030.2 | 4,196.4 | 1,108.6 | 1,064.1 | ||||||||||||||
Benefits and expenses | |||||||||||||||||||||
Insurance policy benefits | 700.6 | 672.0 | 741.1 | 645.8 | 2,759.5 | 757.2 | 702.2 | ||||||||||||||
Interest expense | 7.2 | 7.2 | 7.0 | 6.6 | 28.0 | 6.7 | 7.0 | ||||||||||||||
Amortization | 80.8 | 72.3 | 60.8 | 70.2 | 284.1 | 77.5 | 68.3 | ||||||||||||||
Other operating costs and expenses | 205.5 | 161.2 | 196.6 | 190.9 | 754.2 | 177.5 | 171.9 | ||||||||||||||
Total benefits and expenses | 994.1 | 912.7 | 1,005.5 | 913.5 | 3,825.8 | 1,018.9 | 949.4 | ||||||||||||||
EBIT from In-Force and New Business | $ | 83.1 | $ | 112.5 | $ | 58.3 | $ | 116.7 | $ | 370.6 | $ | 89.7 | $ | 114.7 | |||||||
CNO Financial Group, Inc. | |||||||||||||||||||||
Bankers Life | |||||||||||||||||||||
Analysis of income before taxes (in millions) | 1Q12 | 2Q12 | 3Q12 | 4Q12 | 2012 | 1Q13 | 2Q13 | ||||||||||||||
Insurance policy income | $ | 406.5 | $ | 419.0 | $ | 416.1 | $ | 415.8 | $ | 1,657.4 | $ | 418.0 | $ | 419.1 | |||||||
Net investment income (loss): | |||||||||||||||||||||
General account invested assets | 200.3 | 204.9 | 205.4 | 207.0 | 817.6 | 212.8 | 211.0 | ||||||||||||||
Fixed index products | 34.6 | (19.3 | ) | 16.2 | (10.2 | ) | 21.3 | 48.9 | 15.6 | ||||||||||||
Net realized investment gains | 10.6 | 17.9 | 14.1 | 10.4 | 53.0 | 8.6 | 3.3 | ||||||||||||||
Fee revenue and other income | 2.9 | 3.3 | 4.0 | 5.0 | 15.2 | 3.7 | 4.0 | ||||||||||||||
Total revenues | 654.9 | 625.8 | 655.8 | 628.0 | 2,564.5 | 692.0 | 653.0 | ||||||||||||||
Insurance policy benefits | 335.2 | 366.3 | 362.4 | 354.0 | 1,417.9 | 375.2 | 368.0 | ||||||||||||||
Insurance policy benefits - fair value changes in embedded derivative liabilities | (11.0 | ) | 16.7 | 4.6 | (5.8 | ) | 4.5 | (3.2 | ) | (27.3 | ) | ||||||||||
Amounts added to policyholder account balances: | |||||||||||||||||||||
Annuity products and interest-sensitive life products other than fixed index products | 38.5 | 36.6 | 36.9 | 35.9 | 147.9 | 34.1 | 35.2 | ||||||||||||||
Fixed index products | 47.2 | (6.2 | ) | 35.3 | 0.8 | 77.1 | 61.2 | 30.9 | |||||||||||||
Amortization related to operations | 56.9 | 50.5 | 35.6 | 44.6 | 187.6 | 54.5 | 45.7 | ||||||||||||||
Amortization related to net realized investment gains | 0.9 | 1.7 | 1.4 | 0.3 | 4.3 | 0.7 | 0.4 | ||||||||||||||
Amortization related to fair value changes in embedded derivative liabilities | 4.2 | (6.3 | ) | (1.6 | ) | 2.0 | (1.7 | ) | 1.1 | 9.1 | |||||||||||
Interest expense on investment borrowings | 1.4 | 1.4 | 1.3 | 1.2 | 5.3 | 1.4 | 1.7 | ||||||||||||||
Other operating costs and expenses | 94.6 | 83.2 | 89.6 | 107.4 | 374.8 | 94.9 | 89.1 | ||||||||||||||
Total benefits and expenses | 567.9 | 543.9 | 565.5 | 540.4 | 2,217.7 | 619.9 | 552.8 | ||||||||||||||
Income before income taxes | $ | 87.0 | $ | 81.9 | $ | 90.3 | $ | 87.6 | $ | 346.8 | $ | 72.1 | $ | 100.2 | |||||||
Health underwriting margins (in millions) | 1Q12 | 2Q12 | 3Q12 | 4Q12 | 2012 | 1Q13 | 2Q13 | ||||||||||||||
Medicare supplement: | |||||||||||||||||||||
Earned premium | $ | 182.7 | $ | 184.1 | $ | 185.1 | $ | 185.5 | $ | 737.4 | $ | 188.4 | $ | 189.2 | |||||||
Benefit ratio | 64.5 | % | 72.2 | % | 67.8 | % | 71.4 | % | 69.0 | % | 68.5 | % | 67.2 | % | |||||||
Underwriting margin (earned premium less policy benefits) | $ | 64.9 | $ | 51.2 | $ | 59.6 | $ | 53.2 | $ | 228.9 | $ | 59.4 | $ | 62.0 | |||||||
PDP: | |||||||||||||||||||||
Earned premium | $ | 10.8 | $ | 17.7 | $ | 11.4 | $ | 10.0 | $ | 49.9 | $ | 8.9 | $ | 10.8 | |||||||
Benefit ratio | 85.9 | % | 64.2 | % | 74.8 | % | 64.8 | % | 71.4 | % | 74.9 | % | 85.2 | % | |||||||
Underwriting margin (earned premium less policy benefits) | $ | 1.6 | $ | 6.3 | $ | 2.9 | $ | 3.5 | $ | 14.3 | $ | 2.2 | $ | 1.6 | |||||||
Long-term care: | |||||||||||||||||||||
Earned premium | $ | 140.6 | $ | 139.7 | $ | 138.5 | $ | 136.7 | $ | 555.5 | $ | 135.3 | $ | 134.1 | |||||||
Benefit ratio before interest income on reserves | 110.9 | % | 121.4 | % | 121.4 | % | 116.7 | % | 117.6 | % | 129.4 | % | 129.5 | % | |||||||
Interest-adjusted benefit ratio | 65.5 | % | 75.4 | % | 74.7 | % | 69.0 | % | 71.2 | % | 81.7 | % | 81.4 | % | |||||||
Underwriting margin (earned premium plus interest income on reserves less policy benefits) | $ | 48.5 | $ | 34.4 | $ | 35.0 | $ | 42.3 | $ | 160.2 | $ | 24.8 | $ | 25.0 | |||||||
CNO Financial Group, Inc. | |||||||||||||||||||||
Bankers Life | |||||||||||||||||||||
Average liabilities for insurance products (in millions) (continued) | 1Q12 | 2Q12 | 3Q12 | 4Q12 | 2012 | 1Q13 | 2Q13 | ||||||||||||||
Annuities: | |||||||||||||||||||||
Mortality based | $ | 233.8 | $ | 231.7 | $ | 229.4 | $ | 231.8 | $ | 231.7 | $ | 229.2 | $ | 227.2 | |||||||
Fixed index | 2,707.4 | 2,798.2 | 2,872.1 | 2,948.3 | 2,831.5 | 3,038.8 | 3,132.2 | ||||||||||||||
Deposit based | 4,644.9 | 4,577.8 | 4,515.4 | 4,454.3 | 4,548.1 | 4,385.3 | 4,301.3 | ||||||||||||||
Medicare supplement and other supplemental health | 4,634.5 | 4,653.2 | 4,710.0 | 4,994.9 | 4,748.1 | 5,220.2 | 5,030.3 | ||||||||||||||
Life: | |||||||||||||||||||||
Interest sensitive | 441.4 | 444.7 | 450.8 | 458.7 | 448.9 | 467.6 | 480.3 | ||||||||||||||
Non-interest sensitive | 483.0 | 506.2 | 532.9 | 561.3 | 520.9 | 589.5 | 616.8 | ||||||||||||||
Total average liabilities for insurance products, net of reinsurance ceded | $ | 13,145.0 | $ | 13,211.8 | $ | 13,310.6 | $ | 13,649.3 | $ | 13,329.2 | $ | 13,930.6 | $ | 13,788.1 | |||||||
Present value of future profits (in millions) | 1Q12 | 2Q12 | 3Q12 | 4Q12 | 2012 | 1Q13 | 2Q13 | ||||||||||||||
Balance, beginning of period | $ | 201.8 | $ | 189.8 | $ | 181.8 | $ | 175.1 | $ | 201.8 | $ | 168.8 | $ | 159.9 | |||||||
Amortization related to operations | (18.7 | ) | (13.6 | ) | (7.0 | ) | (11.3 | ) | (50.6 | ) | (16.6 | ) | (11.5 | ) | |||||||
Amortization related to net realized investment (gains) losses | (0.1 | ) | — | (0.1 | ) | — | (0.2 | ) | (0.1 | ) | — | ||||||||||
Adjustment related to unrealized (gain) or loss on fixed maturities, available for sale | 6.8 | 5.6 | 0.4 | 5.0 | 17.8 | 7.8 | 7.2 | ||||||||||||||
Balance, end of period | $ | 189.8 | $ | 181.8 | $ | 175.1 | $ | 168.8 | $ | 168.8 | $ | 159.9 | $ | 155.6 | |||||||
Deferred acquisition costs (in millions) | 1Q12 | 2Q12 | 3Q12 | 4Q12 | 2012 | 1Q13 | 2Q13 | ||||||||||||||
Balance, beginning of period | $ | 491.0 | $ | 486.5 | $ | 352.2 | $ | 330.1 | $ | 491.0 | $ | 332.8 | $ | 350.8 | |||||||
Deferred acquisition expenses | 34.3 | 34.4 | 35.2 | 35.1 | 139.0 | 37.7 | 37.1 | ||||||||||||||
Amortization related to operations | (38.2 | ) | (36.9 | ) | (28.6 | ) | (33.3 | ) | (137.0 | ) | (37.9 | ) | (34.2 | ) | |||||||
Amortization related to net realized investment (gains) losses | (0.8 | ) | (1.7 | ) | (1.3 | ) | (0.3 | ) | (4.1 | ) | (0.6 | ) | (0.4 | ) | |||||||
Amortization related to fair value changes in embedded derivative liabilities | (4.2 | ) | 6.3 | 1.6 | (2.0 | ) | 1.7 | (1.1 | ) | (9.1 | ) | ||||||||||
Adjustment related to unrealized (gain) or loss on fixed maturities, available for sale | 4.4 | (136.4 | ) | (29.0 | ) | 3.2 | (157.8 | ) | 19.9 | 95.3 | |||||||||||
Balance, end of period | $ | 486.5 | $ | 352.2 | $ | 330.1 | $ | 332.8 | $ | 332.8 | $ | 350.8 | $ | 439.5 | |||||||
Bankers Life Segment EBIT Summarized by In-Force and New Business (6) | |||||||||||||||||||||
(in millions) | |||||||||||||||||||||
CNO Financial Group, Inc. | |||||||||||||||||||||
EBIT from In-Force Business | 1Q12 | 2Q12 | 3Q12 | 4Q12 | 2012 | 1Q13 | 2Q13 | ||||||||||||||
Revenues | |||||||||||||||||||||
Insurance policy income | $ | 341.8 | $ | 351.6 | $ | 345.7 | $ | 342.2 | $ | 1,381.3 | $ | 345.8 | $ | 349.4 | |||||||
Net investment income (loss) | 223.2 | 181.3 | 209.9 | 191.8 | 806.2 | 252.0 | 220.9 | ||||||||||||||
Fee revenue and other income | 1.5 | 1.9 | 2.8 | 3.0 | 9.2 | 2.2 | 2.5 | ||||||||||||||
Total revenues | 566.5 | 534.8 | 558.4 | 537.0 | 2,196.7 | 600.0 | 572.8 | ||||||||||||||
Benefits and expenses | |||||||||||||||||||||
Insurance policy benefits | 367.4 | 348.7 | 377.0 | 338.1 | 1,431.2 | 412.8 | 383.4 | ||||||||||||||
Interest expense | 1.4 | 1.4 | 1.3 | 1.2 | 5.3 | 1.4 | 1.7 | ||||||||||||||
Amortization | 50.0 | 43.7 | 29.9 | 38.2 | 161.8 | 48.7 | 38.7 | ||||||||||||||
Other operating costs and expenses | 50.6 | 38.4 | 40.1 | 52.0 | 181.1 | 41.0 | 39.4 | ||||||||||||||
Total benefits and expenses | 469.4 | 432.2 | 448.3 | 429.5 | 1,779.4 | 503.9 | 463.2 | ||||||||||||||
EBIT from In-Force Business | $ | 97.1 | $ | 102.6 | $ | 110.1 | $ | 107.5 | $ | 417.3 | $ | 96.1 | $ | 109.6 | |||||||
EBIT from New Business | |||||||||||||||||||||
Revenues | |||||||||||||||||||||
Insurance policy income | $ | 64.7 | $ | 67.4 | $ | 70.4 | $ | 73.6 | $ | 276.1 | $ | 72.2 | $ | 69.7 | |||||||
Net investment income (loss) | 11.7 | 4.3 | 11.7 | 5.0 | 32.7 | 9.7 | 5.7 | ||||||||||||||
Fee revenue and other income | 1.4 | 1.4 | 1.2 | 2.0 | 6.0 | 1.5 | 1.5 | ||||||||||||||
Total revenues | 77.8 | 73.1 | 83.3 | 80.6 | 314.8 | 83.4 | 76.9 | ||||||||||||||
Benefits and expenses | |||||||||||||||||||||
Insurance policy benefits | 53.5 | 48.0 | 57.6 | 52.6 | 211.7 | 57.7 | 50.7 | ||||||||||||||
Interest expense | — | — | — | — | — | — | — | ||||||||||||||
Amortization | 6.9 | 6.8 | 5.7 | 6.4 | 25.8 | 5.8 | 7.0 | ||||||||||||||
Other operating costs and expenses | 44.0 | 44.8 | 49.5 | 55.4 | 193.7 | 53.9 | 49.7 | ||||||||||||||
Total benefits and expenses | 104.4 | 99.6 | 112.8 | 114.4 | 431.2 | 117.4 | 107.4 | ||||||||||||||
EBIT from New Business | $ | (26.6 | ) | $ | (26.5 | ) | $ | (29.5 | ) | $ | (33.8 | ) | $ | (116.4 | ) | $ | (34.0 | ) | $ | (30.5 | ) |
EBIT from In-Force and New Business | |||||||||||||||||||||
Revenues | |||||||||||||||||||||
Insurance policy income | $ | 406.5 | $ | 419.0 | $ | 416.1 | $ | 415.8 | $ | 1,657.4 | $ | 418.0 | $ | 419.1 | |||||||
Net investment income (loss) | 234.9 | 185.6 | 221.6 | 196.8 | 838.9 | 261.7 | 226.6 | ||||||||||||||
Fee revenue and other income | 2.9 | 3.3 | 4.0 | 5.0 | 15.2 | 3.7 | 4.0 | ||||||||||||||
Total revenues | 644.3 | 607.9 | 641.7 | 617.6 | 2,511.5 | 683.4 | 649.7 | ||||||||||||||
Benefits and expenses | |||||||||||||||||||||
Insurance policy benefits | 420.9 | 396.7 | 434.6 | 390.7 | 1,642.9 | 470.5 | 434.1 | ||||||||||||||
Interest expense | 1.4 | 1.4 | 1.3 | 1.2 | 5.3 | 1.4 | 1.7 | ||||||||||||||
Amortization | 56.9 | 50.5 | 35.6 | 44.6 | 187.6 | 54.5 | 45.7 | ||||||||||||||
Other operating costs and expenses | 94.6 | 83.2 | 89.6 | 107.4 | 374.8 | 94.9 | 89.1 | ||||||||||||||
Total benefits and expenses | 573.8 | 531.8 | 561.1 | 543.9 | 2,210.6 | 621.3 | 570.6 | ||||||||||||||
EBIT from In-Force and New Business | $ | 70.5 | $ | 76.1 | $ | 80.6 | $ | 73.7 | $ | 300.9 | $ | 62.1 | $ | 79.1 | |||||||
CNO Financial Group, Inc. | |||||||||||||||||||||
Washington National | |||||||||||||||||||||
Analysis of income before taxes (in millions) | 1Q12 | 2Q12 | 3Q12 | 4Q12 | 2012 | 1Q13 | 2Q13 | ||||||||||||||
Insurance policy income | $ | 147.4 | $ | 147.6 | $ | 147.8 | $ | 147.6 | $ | 590.4 | $ | 149.1 | $ | 149.2 | |||||||
Net investment income (loss): | |||||||||||||||||||||
General account invested assets | 50.0 | 51.0 | 50.8 | 52.2 | 204.0 | 52.0 | 51.3 | ||||||||||||||
Trading account income related to reinsurer accounts | 0.1 | 1.4 | (0.9 | ) | — | 0.6 | — | (0.6 | ) | ||||||||||||
Change in value of embedded derivatives related to modified coinsurance agreements | (0.1 | ) | (1.4 | ) | 1.0 | — | (0.5 | ) | — | 0.6 | |||||||||||
Net realized investment gains (losses) | 3.1 | 3.5 | (3.0 | ) | 3.1 | 6.7 | 1.6 | (1.0 | ) | ||||||||||||
Fee revenue and other income | 0.2 | 0.3 | 0.3 | 0.3 | 1.1 | 0.2 | 0.2 | ||||||||||||||
Total revenues | 200.7 | 202.4 | 196.0 | 203.2 | 802.3 | 202.9 | 199.7 | ||||||||||||||
Insurance policy benefits | 115.7 | 113.7 | 111.1 | 106.6 | 447.1 | 118.3 | 117.3 | ||||||||||||||
Amortization related to operations | 12.7 | 10.8 | 11.2 | 13.0 | 47.7 | 13.7 | 13.0 | ||||||||||||||
Interest expense on investment borrowings | 0.7 | 0.8 | 0.7 | 0.6 | 2.8 | 0.5 | 0.5 | ||||||||||||||
Other operating costs and expenses | 43.8 | 39.7 | 42.1 | 45.3 | 170.9 | 39.4 | 38.1 | ||||||||||||||
Total benefits and expenses | 172.9 | 165.0 | 165.1 | 165.5 | 668.5 | 171.9 | 168.9 | ||||||||||||||
Income before income taxes | $ | 27.8 | $ | 37.4 | $ | 30.9 | $ | 37.7 | $ | 133.8 | $ | 31.0 | $ | 30.8 | |||||||
Health underwriting margins (in millions) | 1Q12 | 2Q12 | 3Q12 | 4Q12 | 2012 | 1Q13 | 2Q13 | ||||||||||||||
Medicare supplement: | |||||||||||||||||||||
Earned premium | $ | 30.8 | $ | 30.2 | $ | 29.3 | $ | 28.3 | $ | 118.6 | $ | 26.8 | $ | 25.9 | |||||||
Benefit ratio | 65.4 | % | 67.7 | % | 63.8 | % | 64.7 | % | 65.4 | % | 65.0 | % | 65.5 | % | |||||||
Underwriting margin (earned premium less policy benefits) | $ | 10.7 | $ | 9.7 | $ | 10.7 | $ | 9.9 | $ | 41.0 | $ | 9.4 | $ | 8.9 | |||||||
Supplemental health: | |||||||||||||||||||||
Earned premium | $ | 111.6 | $ | 113.1 | $ | 114.0 | $ | 115.1 | $ | 453.8 | $ | 117.8 | $ | 119.0 | |||||||
Benefit ratio before interest income on reserves | 82.4 | % | 77.0 | % | 74.2 | % | 72.9 | % | 76.6 | % | 79.3 | % | 78.6 | % | |||||||
Interest-adjusted benefit ratio | 55.1 | % | 50.1 | % | 47.5 | % | 46.6 | % | 49.8 | % | 53.1 | % | 52.6 | % | |||||||
Underwriting margin (earned premium plus interest income on reserves less policy benefits) | $ | 50.1 | $ | 56.5 | $ | 59.8 | $ | 61.4 | $ | 227.8 | $ | 55.3 | $ | 56.4 | |||||||
CNO Financial Group, Inc. | |||||||||||||||||||||
Washington National | |||||||||||||||||||||
Average liabilities for insurance products (in millions) (continued) | 1Q12 | 2Q12 | 3Q12 | 4Q12 | 2012 | 1Q13 | 2Q13 | ||||||||||||||
Medicare supplement and other supplemental health | $ | 2,429.6 | $ | 2,418.9 | $ | 2,414.5 | $ | 2,414.5 | $ | 2,419.4 | $ | 2,421.4 | $ | 2,427.0 | |||||||
Non-interest sensitive life | 200.4 | 199.1 | 200.3 | 197.8 | 199.4 | 197.2 | 202.6 | ||||||||||||||
Total average liabilities for insurance products, net of reinsurance ceded | $ | 2,630.0 | $ | 2,618.0 | $ | 2,614.8 | $ | 2,612.3 | $ | 2,618.8 | $ | 2,618.6 | $ | 2,629.6 | |||||||
Present value of future profits (in millions) | 1Q12 | 2Q12 | 3Q12 | 4Q12 | 2012 | 1Q13 | 2Q13 | ||||||||||||||
Balance, beginning of period | $ | 402.0 | $ | 394.8 | $ | 389.0 | $ | 383.2 | $ | 402.0 | $ | 375.8 | $ | 367.5 | |||||||
Amortization related to operations | (7.2 | ) | (5.8 | ) | (5.8 | ) | (7.4 | ) | (26.2 | ) | (8.3 | ) | (8.6 | ) | |||||||
Balance, end of period | $ | 394.8 | $ | 389.0 | $ | 383.2 | $ | 375.8 | $ | 375.8 | $ | 367.5 | $ | 358.9 | |||||||
Deferred acquisition costs (in millions) | 1Q12 | 2Q12 | 3Q12 | 4Q12 | 2012 | 1Q13 | 2Q13 | ||||||||||||||
Balance, beginning of period | $ | 142.3 | $ | 145.9 | $ | 151.0 | $ | 153.9 | $ | 142.3 | $ | 157.3 | $ | 163.1 | |||||||
Deferred acquisition expenses | 9.1 | 10.1 | 8.3 | 9.0 | 36.5 | 11.2 | 11.7 | ||||||||||||||
Amortization related to operations | (5.5 | ) | (5.0 | ) | (5.4 | ) | (5.6 | ) | (21.5 | ) | (5.4 | ) | (4.4 | ) | |||||||
Balance, end of period | $ | 145.9 | $ | 151.0 | $ | 153.9 | $ | 157.3 | $ | 157.3 | $ | 163.1 | $ | 170.4 | |||||||
Washington National Segment EBIT Summarized by In-Force and New Business (6) | |||||||||||||||||||||
(in millions) | |||||||||||||||||||||
CNO Financial Group, Inc. | |||||||||||||||||||||
EBIT from In-Force Business | 1Q12 | 2Q12 | 3Q12 | 4Q12 | 2012 | 1Q13 | 2Q13 | ||||||||||||||
Revenues | |||||||||||||||||||||
Insurance policy income | $ | 133.0 | $ | 132.8 | $ | 133.4 | $ | 132.3 | $ | 531.5 | $ | 133.6 | $ | 133.7 | |||||||
Net investment income (loss) | 50.0 | 51.0 | 50.9 | 52.2 | 204.1 | 52.0 | 51.3 | ||||||||||||||
Fee revenue and other income | 0.2 | 0.3 | 0.3 | 0.3 | 1.1 | 0.2 | 0.2 | ||||||||||||||
Total revenues | 183.2 | 184.1 | 184.6 | 184.8 | 736.7 | 185.8 | 185.2 | ||||||||||||||
Benefits and expenses | |||||||||||||||||||||
Insurance policy benefits | 109.8 | 107.6 | 105.2 | 100.3 | 422.9 | 111.6 | 110.7 | ||||||||||||||
Interest expense | 0.7 | 0.8 | 0.7 | 0.6 | 2.8 | 0.5 | 0.5 | ||||||||||||||
Amortization | 12.0 | 10.0 | 10.5 | 12.3 | 44.8 | 12.9 | 12.1 | ||||||||||||||
Other operating costs and expenses | 33.3 | 31.5 | 31.9 | 35.0 | 131.7 | 31.1 | 30.9 | ||||||||||||||
Total benefits and expenses | 155.8 | 149.9 | 148.3 | 148.2 | 602.2 | 156.1 | 154.2 | ||||||||||||||
EBIT from In-Force Business | $ | 27.4 | $ | 34.2 | $ | 36.3 | $ | 36.6 | $ | 134.5 | $ | 29.7 | $ | 31.0 | |||||||
EBIT from New Business | |||||||||||||||||||||
Revenues | |||||||||||||||||||||
Insurance policy income | $ | 14.4 | $ | 14.8 | $ | 14.4 | $ | 15.3 | $ | 58.9 | $ | 15.5 | $ | 15.5 | |||||||
Net investment income (loss) | — | — | — | — | — | — | — | ||||||||||||||
Fee revenue and other income | — | — | — | — | — | — | — | ||||||||||||||
Total revenues | 14.4 | 14.8 | 14.4 | 15.3 | 58.9 | 15.5 | 15.5 | ||||||||||||||
Benefits and expenses | |||||||||||||||||||||
Insurance policy benefits | 5.9 | 6.1 | 5.9 | 6.3 | 24.2 | 6.7 | 6.6 | ||||||||||||||
Interest expense | — | — | — | — | — | — | — | ||||||||||||||
Amortization | 0.7 | 0.8 | 0.7 | 0.7 | 2.9 | 0.8 | 0.9 | ||||||||||||||
Other operating costs and expenses | 10.5 | 8.2 | 10.2 | 10.3 | 39.2 | 8.3 | 7.2 | ||||||||||||||
Total benefits and expenses | 17.1 | 15.1 | 16.8 | 17.3 | 66.3 | 15.8 | 14.7 | ||||||||||||||
EBIT from New Business | $ | (2.7 | ) | $ | (0.3 | ) | $ | (2.4 | ) | $ | (2.0 | ) | $ | (7.4 | ) | $ | (0.3 | ) | $ | 0.8 | |
EBIT from In-Force and New Business | |||||||||||||||||||||
Revenues | |||||||||||||||||||||
Insurance policy income | $ | 147.4 | $ | 147.6 | $ | 147.8 | $ | 147.6 | $ | 590.4 | $ | 149.1 | $ | 149.2 | |||||||
Net investment income (loss) | 50.0 | 51.0 | 50.9 | 52.2 | 204.1 | 52.0 | 51.3 | ||||||||||||||
Fee revenue and other income | 0.2 | 0.3 | 0.3 | 0.3 | 1.1 | 0.2 | 0.2 | ||||||||||||||
Total revenues | 197.6 | 198.9 | 199.0 | 200.1 | 795.6 | 201.3 | 200.7 | ||||||||||||||
Benefits and expenses | |||||||||||||||||||||
Insurance policy benefits | 115.7 | 113.7 | 111.1 | 106.6 | 447.1 | 118.3 | 117.3 | ||||||||||||||
Interest expense | 0.7 | 0.8 | 0.7 | 0.6 | 2.8 | 0.5 | 0.5 | ||||||||||||||
Amortization | 12.7 | 10.8 | 11.2 | 13.0 | 47.7 | 13.7 | 13.0 | ||||||||||||||
Other operating costs and expenses | 43.8 | 39.7 | 42.1 | 45.3 | 170.9 | 39.4 | 38.1 | ||||||||||||||
Total benefits and expenses | 172.9 | 165.0 | 165.1 | 165.5 | 668.5 | 171.9 | 168.9 | ||||||||||||||
EBIT from In-Force and New Business | $ | 24.7 | $ | 33.9 | $ | 33.9 | $ | 34.6 | $ | 127.1 | $ | 29.4 | $ | 31.8 | |||||||
CNO Financial Group, Inc. | |||||||||||||||||||||
Colonial Penn | |||||||||||||||||||||
Analysis of income (loss) before taxes (in millions) | 1Q12 | 2Q12 | 3Q12 | 4Q12 | 2012 | 1Q13 | 2Q13 | ||||||||||||||
Insurance policy income | $ | 53.4 | $ | 54.6 | $ | 54.5 | $ | 55.3 | $ | 217.8 | $ | 56.9 | $ | 58.0 | |||||||
Net investment income on general account invested assets | 10.0 | 10.2 | 9.9 | 10.3 | 40.4 | 9.9 | 9.9 | ||||||||||||||
Net realized investment gains (losses) | 2.6 | 1.9 | 2.6 | 0.1 | 7.2 | (0.3 | ) | 0.4 | |||||||||||||
Fee revenue and other income | 0.2 | 0.2 | 0.2 | 0.1 | 0.7 | 0.2 | 0.2 | ||||||||||||||
Total revenues | 66.2 | 66.9 | 67.2 | 65.8 | 266.1 | 66.7 | 68.5 | ||||||||||||||
Insurance policy benefits | 41.9 | 39.3 | 38.2 | 40.9 | 160.3 | 42.8 | 41.1 | ||||||||||||||
Amounts added to annuity and interest-sensitive life product account balances | 0.2 | 0.3 | 0.1 | 0.2 | 0.8 | 0.2 | 0.1 | ||||||||||||||
Amortization related to operations | 3.7 | 3.9 | 3.5 | 3.9 | 15.0 | 3.7 | 3.7 | ||||||||||||||
Other operating costs and expenses | 27.6 | 20.9 | 25.4 | 17.5 | 91.4 | 25.7 | 22.0 | ||||||||||||||
Total benefits and expenses | 73.4 | 64.4 | 67.2 | 62.5 | 267.5 | 72.4 | 66.9 | ||||||||||||||
Income (loss) before income taxes | $ | (7.2 | ) | $ | 2.5 | $ | — | $ | 3.3 | $ | (1.4 | ) | $ | (5.7 | ) | $ | 1.6 | ||||
Average liabilities for insurance products (in millions) | 1Q12 | 2Q12 | 3Q12 | 4Q12 | 2012 | 1Q13 | 2Q13 | ||||||||||||||
Annuities - mortality based | $ | 77.0 | $ | 76.8 | $ | 76.4 | $ | 75.9 | $ | 76.5 | $ | 74.8 | $ | 74.4 | |||||||
Supplemental health | 15.4 | 15.1 | 15.0 | 14.7 | 15.1 | 14.4 | 14.1 | ||||||||||||||
Life: | |||||||||||||||||||||
Interest sensitive | 19.9 | 18.9 | 18.1 | 17.9 | 18.7 | 17.7 | 17.7 | ||||||||||||||
Non-interest sensitive | 598.4 | 601.8 | 605.8 | 612.2 | 604.5 | 618.1 | 629.9 | ||||||||||||||
Total average liabilities for insurance products, net of reinsurance ceded | $ | 710.7 | $ | 712.6 | $ | 715.3 | $ | 720.7 | $ | 714.8 | $ | 725.0 | $ | 736.1 | |||||||
Present value of future profits (in millions) | 1Q12 | 2Q12 | 3Q12 | 4Q12 | 2012 | 1Q13 | 2Q13 | ||||||||||||||
Balance, beginning of period | $ | 72.6 | $ | 70.2 | $ | 67.8 | $ | 65.7 | $ | 72.6 | $ | 63.6 | $ | 61.6 | |||||||
Amortization related to operations | (2.4 | ) | (2.4 | ) | (2.1 | ) | (2.1 | ) | (9.0 | ) | (2.0 | ) | (2.0 | ) | |||||||
Balance, end of period | $ | 70.2 | $ | 67.8 | $ | 65.7 | $ | 63.6 | $ | 63.6 | $ | 61.6 | $ | 59.6 | |||||||
Deferred acquisition costs (in millions) | 1Q12 | 2Q12 | 3Q12 | 4Q12 | 2012 | 1Q13 | 2Q13 | ||||||||||||||
Balance, beginning of period | $ | 51.5 | $ | 52.6 | $ | 53.8 | $ | 54.6 | $ | 51.5 | $ | 57.5 | $ | 59.1 | |||||||
Deferred acquisition expenses | 2.4 | 2.7 | 2.2 | 4.7 | 12.0 | 3.3 | 3.3 | ||||||||||||||
Amortization related to operations | (1.3 | ) | (1.5 | ) | (1.4 | ) | (1.8 | ) | (6.0 | ) | (1.7 | ) | (1.7 | ) | |||||||
Balance, end of period | $ | 52.6 | $ | 53.8 | $ | 54.6 | $ | 57.5 | $ | 57.5 | $ | 59.1 | $ | 60.7 | |||||||
Colonial Penn Segment EBIT Summarized by In-Force and New Business (6) | |||||||||||||||||||||
(in millions) | |||||||||||||||||||||
CNO Financial Group, Inc. | |||||||||||||||||||||
EBIT from In-Force Business | 1Q12 | 2Q12 | 3Q12 | 4Q12 | 2012 | 1Q13 | 2Q13 | ||||||||||||||
Revenues | |||||||||||||||||||||
Insurance policy income | $ | 43.2 | $ | 43.7 | $ | 43.5 | $ | 44.1 | $ | 174.5 | $ | 45.6 | $ | 46.5 | |||||||
Net investment income (loss) | 10.0 | 10.2 | 9.9 | 10.3 | 40.4 | 9.9 | 9.9 | ||||||||||||||
Fee revenue and other income | 0.2 | 0.2 | 0.2 | 0.1 | 0.7 | 0.2 | 0.2 | ||||||||||||||
Total revenues | 53.4 | 54.1 | 53.6 | 54.5 | 215.6 | 55.7 | 56.6 | ||||||||||||||
Benefits and expenses | |||||||||||||||||||||
Insurance policy benefits | 36.2 | 33.4 | 32.0 | 34.7 | 136.3 | 36.5 | 34.6 | ||||||||||||||
Amortization | 3.6 | 3.8 | 3.2 | 3.5 | 14.1 | 3.6 | 3.6 | ||||||||||||||
Other operating costs and expenses | 6.9 | 5.7 | 6.8 | 5.2 | 24.6 | 6.8 | 6.0 | ||||||||||||||
Total benefits and expenses | 46.7 | 42.9 | 42.0 | 43.4 | 175.0 | 46.9 | 44.2 | ||||||||||||||
EBIT from In-Force Business | $ | 6.7 | $ | 11.2 | $ | 11.6 | $ | 11.1 | $ | 40.6 | $ | 8.8 | $ | 12.4 | |||||||
EBIT from New Business | |||||||||||||||||||||
Revenues | |||||||||||||||||||||
Insurance policy income | $ | 10.2 | $ | 10.9 | $ | 11.0 | $ | 11.2 | $ | 43.3 | $ | 11.3 | $ | 11.5 | |||||||
Net investment income (loss) | — | — | — | — | — | — | — | ||||||||||||||
Fee revenue and other income | — | — | — | — | — | — | — | ||||||||||||||
Total revenues | 10.2 | 10.9 | 11.0 | 11.2 | 43.3 | 11.3 | 11.5 | ||||||||||||||
Benefits and expenses | |||||||||||||||||||||
Insurance policy benefits | 5.9 | 6.2 | 6.3 | 6.4 | 24.8 | 6.5 | 6.6 | ||||||||||||||
Amortization | 0.1 | 0.1 | 0.3 | 0.4 | 0.9 | 0.1 | 0.1 | ||||||||||||||
Other operating costs and expenses | 20.7 | 15.2 | 18.6 | 12.3 | 66.8 | 18.9 | 16.0 | ||||||||||||||
Total benefits and expenses | 26.7 | 21.5 | 25.2 | 19.1 | 92.5 | 25.5 | 22.7 | ||||||||||||||
EBIT from New Business | $ | (16.5 | ) | $ | (10.6 | ) | $ | (14.2 | ) | $ | (7.9 | ) | $ | (49.2 | ) | $ | (14.2 | ) | $ | (11.2 | ) |
EBIT from In-Force and New Business | |||||||||||||||||||||
Revenues | |||||||||||||||||||||
Insurance policy income | $ | 53.4 | $ | 54.6 | $ | 54.5 | $ | 55.3 | $ | 217.8 | $ | 56.9 | $ | 58.0 | |||||||
Net investment income (loss) | 10.0 | 10.2 | 9.9 | 10.3 | 40.4 | 9.9 | 9.9 | ||||||||||||||
Fee revenue and other income | 0.2 | 0.2 | 0.2 | 0.1 | 0.7 | 0.2 | 0.2 | ||||||||||||||
Total revenues | 63.6 | 65.0 | 64.6 | 65.7 | 258.9 | 67.0 | 68.1 | ||||||||||||||
Benefits and expenses | |||||||||||||||||||||
Insurance policy benefits | 42.1 | 39.6 | 38.3 | 41.1 | 161.1 | 43.0 | 41.2 | ||||||||||||||
Amortization | 3.7 | 3.9 | 3.5 | 3.9 | 15.0 | 3.7 | 3.7 | ||||||||||||||
Other operating costs and expenses | 27.6 | 20.9 | 25.4 | 17.5 | 91.4 | 25.7 | 22.0 | ||||||||||||||
Total benefits and expenses | 73.4 | 64.4 | 67.2 | 62.5 | 267.5 | 72.4 | 66.9 | ||||||||||||||
EBIT from In-Force and New Business | $ | (9.8 | ) | $ | 0.6 | $ | (2.6 | ) | $ | 3.2 | $ | (8.6 | ) | $ | (5.4 | ) | $ | 1.2 | |||
CNO Financial Group, Inc. | |||||||||||||||||||||
Other CNO Business | |||||||||||||||||||||
Analysis of income (loss) before taxes (in millions) | 1Q12 | 2Q12 | 3Q12 | 4Q12 | 2012 | 1Q13 | 2Q13 | ||||||||||||||
Insurance policy income | $ | 79.0 | $ | 73.6 | $ | 71.8 | $ | 65.4 | $ | 289.8 | $ | 67.2 | $ | 65.0 | |||||||
Net investment income (loss): | |||||||||||||||||||||
General account invested assets | 84.0 | 84.0 | 82.3 | 82.6 | 332.9 | 79.4 | 78.3 | ||||||||||||||
Fixed index products | 6.8 | (4.1 | ) | 3.3 | (1.8 | ) | 4.2 | 9.0 | 2.4 | ||||||||||||
Trading account income related to policyholder accounts | 1.9 | (0.1 | ) | 1.1 | 0.6 | 3.5 | 1.3 | (0.1 | ) | ||||||||||||
Net realized investment gains (losses) | 6.7 | 7.5 | (5.4 | ) | 3.6 | 12.4 | 4.9 | 0.8 | |||||||||||||
Total revenues | 178.4 | 160.9 | 153.1 | 150.4 | 642.8 | 161.8 | 146.4 | ||||||||||||||
Insurance policy benefits | 83.0 | 93.8 | 122.7 | 81.3 | 380.8 | 88.1 | 77.4 | ||||||||||||||
Insurance policy benefits - fair value changes in embedded derivative liabilities | (0.6 | ) | 1.0 | — | (0.5 | ) | (0.1 | ) | 0.1 | (1.7 | ) | ||||||||||
Amounts added to policyholder account balances: | |||||||||||||||||||||
Annuity products and interest-sensitive life products other than fixed index products | 29.7 | 27.5 | 29.4 | 25.2 | 111.8 | 28.8 | 27.0 | ||||||||||||||
Fixed index products | 9.2 | 0.7 | 5.0 | 0.9 | 15.8 | 8.5 | 5.2 | ||||||||||||||
Amortization related to operations | 7.5 | 7.1 | 10.5 | 8.7 | 33.8 | 5.6 | 5.9 | ||||||||||||||
Amortization related to net realized investment gains (losses) | 0.2 | 1.4 | 0.3 | 0.3 | 2.2 | 0.1 | — | ||||||||||||||
Amortization related to fair value changes in embedded derivative liabilities | 0.5 | (0.8 | ) | — | 0.4 | 0.1 | (0.1 | ) | 1.4 | ||||||||||||
Interest expense on investment borrowings | 5.1 | 5.0 | 5.0 | 4.8 | 19.9 | 4.8 | 4.8 | ||||||||||||||
Other operating costs and expenses | 39.5 | 17.4 | 39.5 | 20.7 | 117.1 | 17.5 | 22.7 | ||||||||||||||
Total benefits and expenses | 174.1 | 153.1 | 212.4 | 141.8 | 681.4 | 153.4 | 142.7 | ||||||||||||||
Income (loss) before income taxes | $ | 4.3 | $ | 7.8 | $ | (59.3 | ) | $ | 8.6 | $ | (38.6 | ) | $ | 8.4 | $ | 3.7 | |||||
Health underwriting margins (in millions) | 1Q12 | 2Q12 | 3Q12 | 4Q12 | 2012 | 1Q13 | 2Q13 | ||||||||||||||
Long-term care: | |||||||||||||||||||||
Earned premium | $ | 6.6 | $ | 6.5 | $ | 6.2 | $ | 6.3 | $ | 25.6 | $ | 6.2 | $ | 6.1 | |||||||
Benefit ratio before interest income on reserves | 227.4 | % | 230.2 | % | 282.4 | % | 249.8 | % | 247.0 | % | 252.2 | % | 251.0 | % | |||||||
Interest-adjusted benefit ratio | 122.0 | % | 121.3 | % | 169.9 | % | 138.8 | % | 137.6 | % | 140.7 | % | 137.6 | % | |||||||
Underwriting margin (earned premium plus interest income on reserves less policy benefits) | $ | (1.5 | ) | $ | (1.4 | ) | $ | (4.3 | ) | $ | (2.5 | ) | $ | (9.7 | ) | $ | (2.5 | ) | $ | (2.3 | ) |
CNO Financial Group, Inc. | |||||||||||||||||||||
Other CNO Business | |||||||||||||||||||||
Average liabilities for insurance products (in millions) (continued) | 1Q12 | 2Q12 | 3Q12 | 4Q12 | 2012 | 1Q13 | 2Q13 | ||||||||||||||
Annuities: | |||||||||||||||||||||
Mortality based | $ | 229.1 | $ | 225.5 | $ | 221.5 | $ | 218.8 | $ | 223.7 | $ | 214.8 | $ | 212.9 | |||||||
Fixed index | 553.8 | 532.5 | 510.5 | 489.9 | 521.7 | 474.2 | 462.9 | ||||||||||||||
Deposit based | 638.4 | 633.1 | 635.6 | 633.1 | 635.1 | 631.5 | 621.2 | ||||||||||||||
Separate accounts | 15.5 | 15.8 | 15.6 | 15.3 | 15.6 | 15.2 | 15.3 | ||||||||||||||
Other health | 481.0 | 479.8 | 479.6 | 477.5 | 479.5 | 474.8 | 474.7 | ||||||||||||||
Life: | |||||||||||||||||||||
Interest sensitive | 2,416.9 | 2,365.9 | 2,329.1 | 2,285.5 | 2,349.3 | 2,258.9 | 2,232.6 | ||||||||||||||
Non-interest sensitive | 766.5 | 763.3 | 782.1 | 809.0 | 780.2 | 809.2 | 810.1 | ||||||||||||||
Total average liabilities for insurance products, net of reinsurance ceded | $ | 5,101.2 | $ | 5,015.9 | $ | 4,974.0 | $ | 4,929.1 | $ | 5,005.1 | $ | 4,878.6 | $ | 4,829.7 | |||||||
Present value of future profits (in millions) | 1Q12 | 2Q12 | 3Q12 | 4Q12 | 2012 | 1Q13 | 2Q13 | ||||||||||||||
Balance, beginning of period | $ | 21.3 | $ | 20.6 | $ | 19.5 | $ | 18.4 | $ | 21.3 | $ | 17.8 | $ | 17.6 | |||||||
Amortization related to operations | (1.4 | ) | (1.4 | ) | (1.4 | ) | (3.2 | ) | (7.4 | ) | (0.8 | ) | (1.0 | ) | |||||||
Amortization related to net realized investment (gains) losses | — | — | — | (0.1 | ) | (0.1 | ) | — | — | ||||||||||||
Adjustment related to unrealized (gain) or loss on fixed maturities, available for sale | 0.7 | 0.3 | 0.3 | 2.7 | 4.0 | 0.6 | 0.9 | ||||||||||||||
Balance, end of period | $ | 20.6 | $ | 19.5 | $ | 18.4 | $ | 17.8 | $ | 17.8 | $ | 17.6 | $ | 17.5 | |||||||
Deferred acquisition costs (in millions) | 1Q12 | 2Q12 | 3Q12 | 4Q12 | 2012 | 1Q13 | 2Q13 | ||||||||||||||
Balance, beginning of period | $ | 112.3 | $ | 105.4 | $ | 96.5 | $ | 84.8 | $ | 112.3 | $ | 82.1 | $ | 81.4 | |||||||
Deferred acquisition expenses | 0.4 | 1.3 | 1.0 | 1.5 | 4.2 | 1.3 | 1.6 | ||||||||||||||
Amortization related to operations | (6.1 | ) | (5.7 | ) | (9.1 | ) | (5.5 | ) | (26.4 | ) | (4.8 | ) | (4.9 | ) | |||||||
Amortization related to net realized investment (gains) losses | (0.2 | ) | (1.4 | ) | (0.3 | ) | (0.2 | ) | (2.1 | ) | (0.1 | ) | — | ||||||||
Amortization related to fair value changes in embedded derivative liabilities | (0.5 | ) | 0.8 | — | (0.4 | ) | (0.1 | ) | 0.1 | (1.4 | ) | ||||||||||
Adjustment related to unrealized (gain) or loss on fixed maturities, available for sale | (0.5 | ) | (3.9 | ) | (3.3 | ) | 1.9 | (5.8 | ) | 2.8 | 14.8 | ||||||||||
Balance, end of period | $ | 105.4 | $ | 96.5 | $ | 84.8 | $ | 82.1 | $ | 82.1 | $ | 81.4 | $ | 91.5 | |||||||
Other CNO Business Segment EBIT Summarized by In-Force and New Business (8) | |||||||||||||||||||||
(in millions) | |||||||||||||||||||||
CNO Financial Group, Inc. | |||||||||||||||||||||
EBIT from In-Force Business | 1Q12 | 2Q12 | 3Q12 | 4Q12 | 2012 | 1Q13 | 2Q13 | ||||||||||||||
Revenues | |||||||||||||||||||||
Insurance policy income | $ | 79.0 | $ | 73.6 | $ | 71.8 | $ | 65.4 | $ | 289.8 | $ | 67.2 | $ | 65.0 | |||||||
Net investment income (loss) | 92.7 | 79.8 | 86.7 | 81.4 | 340.6 | 89.7 | 80.6 | ||||||||||||||
Fee revenue and other income | — | — | — | — | — | — | — | ||||||||||||||
Total revenues | 171.7 | 153.4 | 158.5 | 146.8 | 630.4 | 156.9 | 145.6 | ||||||||||||||
Benefits and expenses | |||||||||||||||||||||
Insurance policy benefits | 121.9 | 122.0 | 157.1 | 107.4 | 508.4 | 125.4 | 109.6 | ||||||||||||||
Interest expense | 5.1 | 5.0 | 5.0 | 4.8 | 19.9 | 4.8 | 4.8 | ||||||||||||||
Amortization | 7.5 | 7.1 | 10.5 | 8.7 | 33.8 | 5.6 | 5.9 | ||||||||||||||
Other operating costs and expenses | 39.5 | 17.4 | 39.5 | 20.7 | 117.1 | 17.5 | 22.7 | ||||||||||||||
Total benefits and expenses | 174.0 | 151.5 | 212.1 | 141.6 | 679.2 | 153.3 | 143.0 | ||||||||||||||
EBIT from In-Force Business | $ | (2.3 | ) | $ | 1.9 | $ | (53.6 | ) | $ | 5.2 | $ | (48.8 | ) | $ | 3.6 | $ | 2.6 | ||||
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 | $ | 79.0 | $ | 73.6 | $ | 71.8 | $ | 65.4 | $ | 289.8 | $ | 67.2 | $ | 65.0 | |||||||
Net investment income (loss) | 92.7 | 79.8 | 86.7 | 81.4 | 340.6 | 89.7 | 80.6 | ||||||||||||||
Fee revenue and other income | — | — | — | — | — | — | — | ||||||||||||||
Total revenues | 171.7 | 153.4 | 158.5 | 146.8 | 630.4 | 156.9 | 145.6 | ||||||||||||||
Benefits and expenses | |||||||||||||||||||||
Insurance policy benefits | 121.9 | 122.0 | 157.1 | 107.4 | 508.4 | 125.4 | 109.6 | ||||||||||||||
Interest expense | 5.1 | 5.0 | 5.0 | 4.8 | 19.9 | 4.8 | 4.8 | ||||||||||||||
Amortization | 7.5 | 7.1 | 10.5 | 8.7 | 33.8 | 5.6 | 5.9 | ||||||||||||||
Other operating costs and expenses | 39.5 | 17.4 | 39.5 | 20.7 | 117.1 | 17.5 | 22.7 | ||||||||||||||
Total benefits and expenses | 174.0 | 151.5 | 212.1 | 141.6 | 679.2 | 153.3 | 143.0 | ||||||||||||||
EBIT from In-Force and New Business | $ | (2.3 | ) | $ | 1.9 | $ | (53.6 | ) | $ | 5.2 | $ | (48.8 | ) | $ | 3.6 | $ | 2.6 | ||||
CNO Financial Group, Inc. | |||||||||||||||||||||
Corporate Operations | |||||||||||||||||||||
Analysis of loss before taxes (in millions) | 1Q12 | 2Q12 | 3Q12 | 4Q12 | 2012 | 1Q13 | 2Q13 | ||||||||||||||
Net investment income (loss): | |||||||||||||||||||||
General investment portfolio | $ | 0.9 | $ | 1.0 | $ | 1.0 | $ | 0.7 | $ | 3.6 | $ | 1.1 | $ | 1.5 | |||||||
Other special-purpose portfolios | 16.2 | (1.1 | ) | 8.2 | 4.2 | 27.5 | 9.0 | 3.0 | |||||||||||||
Fee revenue and other income | 0.4 | 0.2 | 0.3 | 0.3 | 1.2 | 1.7 | 1.5 | ||||||||||||||
Net operating results of variable interest entities | 2.2 | 2.9 | 4.7 | 2.5 | 12.3 | — | — | ||||||||||||||
Interest expense on investment borrowings | (0.1 | ) | (0.2 | ) | (0.1 | ) | — | (0.4 | ) | (0.1 | ) | — | |||||||||
Other operating costs and expenses | (21.4 | ) | (11.9 | ) | (20.8 | ) | (10.4 | ) | (64.5 | ) | (8.7 | ) | (3.6 | ) | |||||||
Corporate operations, excluding corporate interest expense | (1.8 | ) | (9.1 | ) | (6.7 | ) | (2.7 | ) | (20.3 | ) | 3.0 | 2.4 | |||||||||
Interest expense on corporate debt | (17.5 | ) | (16.6 | ) | (16.3 | ) | (15.8 | ) | (66.2 | ) | (15.1 | ) | (13.1 | ) | |||||||
Loss before net realized investment gains (losses), equity in earnings of certain non-strategic investments and earnings attributable to non-controlling interests, loss on extinguishment of debt and income taxes | (19.3 | ) | (25.7 | ) | (23.0 | ) | (18.5 | ) | (86.5 | ) | (12.1 | ) | (10.7 | ) | |||||||
Net realized investment gains (losses) | (0.1 | ) | 1.1 | 0.8 | — | 1.8 | 0.5 | (0.3 | ) | ||||||||||||
Equity in earnings of certain non-strategic investments and earnings attributable to non-controlling interests | — | — | — | — | — | (1.9 | ) | (2.9 | ) | ||||||||||||
Loss on extinguishment of debt | (0.2 | ) | (0.5 | ) | (198.5 | ) | (1.0 | ) | (200.2 | ) | (57.7 | ) | (7.7 | ) | |||||||
Loss before income taxes | $ | (19.6 | ) | $ | (25.1 | ) | $ | (220.7 | ) | $ | (19.5 | ) | $ | (284.9 | ) | $ | (71.2 | ) | $ | (21.6 | ) |
CNO Financial Group, Inc. | |||||||||||||||||||||
Bankers Life | |||||||||||||||||||||
Premiums collected on insurance products (in millions) | 1Q12 | 2Q12 | 3Q12 | 4Q12 | 2012 | 1Q13 | 2Q13 | ||||||||||||||
Annuities | |||||||||||||||||||||
Fixed index (first-year) | $ | 134.9 | $ | 120.2 | $ | 114.5 | $ | 135.4 | $ | 505.0 | $ | 126.6 | $ | 143.4 | |||||||
Other fixed rate (first-year) | 47.8 | 47.9 | 56.0 | 46.3 | 198.0 | 37.2 | 38.5 | ||||||||||||||
Other fixed rate (renewal) | 2.0 | 1.4 | 1.2 | 1.4 | 6.0 | 1.8 | 1.8 | ||||||||||||||
Subtotal - other fixed rate annuities | 49.8 | 49.3 | 57.2 | 47.7 | 204.0 | 39.0 | 40.3 | ||||||||||||||
Total annuities | 184.7 | 169.5 | 171.7 | 183.1 | 709.0 | 165.6 | 183.7 | ||||||||||||||
Health | |||||||||||||||||||||
Medicare supplement (first-year) | 23.8 | 25.1 | 24.7 | 25.8 | 99.4 | 22.7 | 22.7 | ||||||||||||||
Medicare supplement (renewal) | 151.1 | 149.8 | 153.0 | 163.9 | 617.8 | 162.5 | 153.4 | ||||||||||||||
Subtotal - Medicare supplement | 174.9 | 174.9 | 177.7 | 189.7 | 717.2 | 185.2 | 176.1 | ||||||||||||||
Long-term care (first-year) | 5.5 | 5.9 | 6.0 | 6.0 | 23.4 | 5.7 | 5.4 | ||||||||||||||
Long-term care (renewal) | 131.2 | 132.9 | 130.1 | 128.9 | 523.1 | 129.7 | 127.8 | ||||||||||||||
Subtotal - long-term care | 136.7 | 138.8 | 136.1 | 134.9 | 546.5 | 135.4 | 133.2 | ||||||||||||||
PDP (first-year) | 0.3 | 0.1 | 0.1 | 0.2 | 0.7 | 0.1 | — | ||||||||||||||
PDP (renewal) | 15.0 | 14.6 | 10.2 | 7.3 | 47.1 | 10.1 | 10.5 | ||||||||||||||
Subtotal - PDP | 15.3 | 14.7 | 10.3 | 7.5 | 47.8 | 10.2 | 10.5 | ||||||||||||||
Supplemental health (first-year) | — | 0.2 | 0.6 | 1.1 | 1.9 | 1.6 | 2.0 | ||||||||||||||
Supplemental health (renewal) | — | — | — | — | — | — | 0.2 | ||||||||||||||
Subtotal - supplemental health | — | 0.2 | 0.6 | 1.1 | 1.9 | 1.6 | 2.2 | ||||||||||||||
Other health (first-year) | 0.4 | 0.4 | 0.3 | 0.3 | 1.4 | 0.3 | 0.4 | ||||||||||||||
Other health (renewal) | 2.2 | 2.3 | 2.3 | 2.3 | 9.1 | 2.4 | 2.2 | ||||||||||||||
Subtotal - other health | 2.6 | 2.7 | 2.6 | 2.6 | 10.5 | 2.7 | 2.6 | ||||||||||||||
Total health | 329.5 | 331.3 | 327.3 | 335.8 | 1,323.9 | 335.1 | 324.6 | ||||||||||||||
Life insurance | |||||||||||||||||||||
First-year | 32.8 | 35.7 | 38.9 | 42.5 | 149.9 | 42.4 | 41.0 | ||||||||||||||
Renewal | 37.3 | 39.7 | 42.4 | 45.3 | 164.7 | 47.1 | 50.1 | ||||||||||||||
Total life insurance | 70.1 | 75.4 | 81.3 | 87.8 | 314.6 | 89.5 | 91.1 | ||||||||||||||
Collections on insurance products | |||||||||||||||||||||
Total first-year premium collections on insurance products | 245.5 | 235.5 | 241.1 | 257.6 | 979.7 | 236.6 | 253.4 | ||||||||||||||
Total renewal premium collections on insurance products | 338.8 | 340.7 | 339.2 | 349.1 | 1,367.8 | 353.6 | 346.0 | ||||||||||||||
Total collections on insurance products | $ | 584.3 | $ | 576.2 | $ | 580.3 | $ | 606.7 | $ | 2,347.5 | $ | 590.2 | $ | 599.4 | |||||||
CNO Financial Group, Inc. | |||||||||||||||||||||
Washington National | |||||||||||||||||||||
Premiums collected on insurance products (in millions) | 1Q12 | 2Q12 | 3Q12 | 4Q12 | 2012 | 1Q13 | 2Q13 | ||||||||||||||
Health | |||||||||||||||||||||
Medicare supplement (first-year) | $ | 0.3 | $ | 0.3 | $ | 0.2 | $ | 0.2 | $ | 1.0 | $ | 0.2 | $ | — | |||||||
Medicare supplement (renewal) | 27.8 | 28.8 | 28.2 | 28.1 | 112.9 | 26.4 | 25.0 | ||||||||||||||
Subtotal - Medicare supplement | 28.1 | 29.1 | 28.4 | 28.3 | 113.9 | 26.6 | 25.0 | ||||||||||||||
Supplemental health (first-year) | 14.1 | 15.1 | 14.7 | 15.3 | 59.2 | 15.6 | 16.3 | ||||||||||||||
Supplemental health (renewal) | 98.8 | 100.3 | 99.8 | 101.6 | 400.5 | 104.7 | 105.6 | ||||||||||||||
Subtotal - supplemental health | 112.9 | 115.4 | 114.5 | 116.9 | 459.7 | 120.3 | 121.9 | ||||||||||||||
Other health (all renewal) | 0.7 | 0.6 | 0.7 | 0.7 | 2.7 | 0.6 | 0.7 | ||||||||||||||
Total health | 141.7 | 145.1 | 143.6 | 145.9 | 576.3 | 147.5 | 147.6 | ||||||||||||||
Life insurance | |||||||||||||||||||||
First-year | 0.2 | 0.3 | 0.3 | 0.2 | 1.0 | 0.2 | 0.2 | ||||||||||||||
Renewal | 3.8 | 3.5 | 2.7 | 3.2 | 13.2 | 3.4 | 3.2 | ||||||||||||||
Total life insurance | 4.0 | 3.8 | 3.0 | 3.4 | 14.2 | 3.6 | 3.4 | ||||||||||||||
Collections on insurance products | |||||||||||||||||||||
Total first-year premium collections on insurance products | 14.6 | 15.7 | 15.2 | 15.7 | 61.2 | 16.0 | 16.5 | ||||||||||||||
Total renewal premium collections on insurance products | 131.1 | 133.2 | 131.4 | 133.6 | 529.3 | 135.1 | 134.5 | ||||||||||||||
Total collections on insurance products | $ | 145.7 | $ | 148.9 | $ | 146.6 | $ | 149.3 | $ | 590.5 | $ | 151.1 | $ | 151.0 | |||||||
CNO Financial Group, Inc. | |||||||||||||||||||||
Colonial Penn | |||||||||||||||||||||
Premiums collected on insurance products (in millions) | 1Q12 | 2Q12 | 3Q12 | 4Q12 | 2012 | 1Q13 | 2Q13 | ||||||||||||||
Life insurance | |||||||||||||||||||||
First-year | $ | 10.4 | $ | 10.7 | $ | 10.9 | $ | 11.1 | $ | 43.1 | $ | 11.4 | $ | 11.4 | |||||||
Renewal | 42.2 | 41.8 | 42.1 | 42.7 | 168.8 | 44.7 | 45.0 | ||||||||||||||
Total life insurance | 52.6 | 52.5 | 53.0 | 53.8 | 211.9 | 56.1 | 56.4 | ||||||||||||||
Health (all renewal) | |||||||||||||||||||||
Medicare supplement | 1.2 | 1.1 | 1.1 | 1.1 | 4.5 | 1.0 | 0.9 | ||||||||||||||
Other health | 0.1 | 0.1 | 0.1 | 0.1 | 0.4 | 0.1 | 0.1 | ||||||||||||||
Total health | 1.3 | 1.2 | 1.2 | 1.2 | 4.9 | 1.1 | 1.0 | ||||||||||||||
Collections on insurance products | |||||||||||||||||||||
Total first-year premium collections on insurance products | 10.4 | 10.7 | 10.9 | 11.1 | 43.1 | 11.4 | 11.4 | ||||||||||||||
Total renewal premium collections on insurance products | 43.5 | 43.0 | 43.3 | 43.9 | 173.7 | 45.8 | 46.0 | ||||||||||||||
Total collections on insurance products | $ | 53.9 | $ | 53.7 | $ | 54.2 | $ | 55.0 | $ | 216.8 | $ | 57.2 | $ | 57.4 | |||||||
CNO Financial Group, Inc. | |||||||||||||||||||||
Other CNO Business | |||||||||||||||||||||
Premiums collected on insurance products (in millions) | 1Q12 | 2Q12 | 3Q12 | 4Q12 | 2012 | 1Q13 | 2Q13 | ||||||||||||||
Annuities | |||||||||||||||||||||
Fixed index (first-year) | $ | — | $ | 0.2 | $ | 0.1 | $ | 0.3 | $ | 0.6 | $ | 0.2 | $ | 0.1 | |||||||
Fixed index (renewal) | 0.7 | 0.8 | 0.4 | 0.4 | 2.3 | 0.6 | 1.3 | ||||||||||||||
Subtotal - fixed index annuities | 0.7 | 1.0 | 0.5 | 0.7 | 2.9 | 0.8 | 1.4 | ||||||||||||||
Other fixed rate (all renewal) | 0.2 | 0.2 | 0.4 | 0.1 | 0.9 | 0.2 | 0.1 | ||||||||||||||
Total annuities | 0.9 | 1.2 | 0.9 | 0.8 | 3.8 | 1.0 | 1.5 | ||||||||||||||
Health | |||||||||||||||||||||
Long-term care (all renewal) | 6.7 | 6.3 | 6.0 | 6.1 | 25.1 | 6.3 | 6.1 | ||||||||||||||
Other health (all renewal) | 0.2 | 0.2 | 0.1 | 0.2 | 0.7 | 0.2 | 0.1 | ||||||||||||||
Total health | 6.9 | 6.5 | 6.1 | 6.3 | 25.8 | 6.5 | 6.2 | ||||||||||||||
Life insurance | |||||||||||||||||||||
First-year | 0.6 | 0.8 | 0.9 | 1.1 | 3.4 | 1.0 | 1.1 | ||||||||||||||
Renewal | 44.7 | 40.1 | 39.4 | 37.4 | 161.6 | 40.1 | 38.4 | ||||||||||||||
Total life insurance | 45.3 | 40.9 | 40.3 | 38.5 | 165.0 | 41.1 | 39.5 | ||||||||||||||
Collections on insurance products | |||||||||||||||||||||
Total first-year premium collections on insurance products | 0.6 | 1.0 | 1.0 | 1.4 | 4.0 | 1.2 | 1.2 | ||||||||||||||
Total renewal premium collections on insurance products | 52.5 | 47.6 | 46.3 | 44.2 | 190.6 | 47.4 | 46.0 | ||||||||||||||
Total collections on insurance products | $ | 53.1 | $ | 48.6 | $ | 47.3 | $ | 45.6 | $ | 194.6 | $ | 48.6 | $ | 47.2 | |||||||
CNO Financial Group, Inc. | |||||||||||||||||||||
New Annualized Premiums ("NAP") (in millions) | |||||||||||||||||||||
Bankers Life | 1Q12 | 2Q12 | 3Q12 | 4Q12 | 2012 | 1Q13 | 2Q13 | ||||||||||||||
Medicare supplement | $ | 19.5 | $ | 19.9 | $ | 19.3 | $ | 28.6 | $ | 87.3 | $ | 19.1 | $ | 19.0 | |||||||
Long-term care | 7.9 | 7.8 | 7.2 | 6.0 | 28.9 | 6.1 | 6.5 | ||||||||||||||
Supplemental health | — | 0.8 | 1.8 | 2.4 | 5.0 | 2.8 | 2.7 | ||||||||||||||
Life | 20.3 | 20.9 | 18.9 | 21.4 | 81.5 | 22.5 | 24.2 | ||||||||||||||
Annuity | 11.1 | 10.1 | 10.4 | 10.9 | 42.5 | 10.0 | 10.8 | ||||||||||||||
Subtotal Bankers Life | 58.8 | 59.5 | 57.6 | 69.3 | 245.2 | 60.5 | 63.2 | ||||||||||||||
Washington National | |||||||||||||||||||||
Supplemental health | 17.6 | 20.3 | 19.7 | 21.2 | 78.8 | 19.2 | 21.3 | ||||||||||||||
Medicare supplement | 0.3 | 0.2 | 0.2 | 0.1 | 0.8 | — | — | ||||||||||||||
Life | 2.0 | 1.7 | 1.5 | 1.5 | 6.7 | 1.4 | 1.9 | ||||||||||||||
Annuity | — | 0.1 | — | — | 0.1 | — | 0.1 | ||||||||||||||
Subtotal Washington National | 19.9 | 22.3 | 21.4 | 22.8 | 86.4 | 20.6 | 23.3 | ||||||||||||||
Colonial Penn | |||||||||||||||||||||
Graded Life | 17.5 | 15.6 | 15.1 | 13.6 | 61.8 | 17.0 | 15.8 | ||||||||||||||
Total NAP | $ | 96.2 | $ | 97.4 | $ | 94.1 | $ | 105.7 | $ | 393.4 | $ | 98.1 | $ | 102.3 | |||||||
CNO Financial Group, Inc. | |||||||||||||||||||||
Statutory information - consolidated basis (7) (in millions) | 1Q12 | 2Q12 | 3Q12 | 4Q12 | 2012 | 1Q13 | 2Q13 (*) | ||||||||||||||
Net gain from operations before interest expense and federal income taxes | $ | 100.4 | $ | 107.7 | $ | 82.8 | $ | 111.9 | $ | 402.8 | $ | 123.4 | $ | 115.4 | |||||||
Interest expense on surplus debentures held by parent company | 12.1 | 12.1 | 22.4 | 12.3 | 58.9 | 12.0 | 12.2 | ||||||||||||||
Net gain from operations before federal income taxes | 88.3 | 95.6 | 60.4 | 99.6 | 343.9 | 111.4 | 103.2 | ||||||||||||||
Federal income tax expense (benefit) | 1.7 | (0.9 | ) | 0.1 | 5.6 | 6.5 | (1.1 | ) | 1.1 | ||||||||||||
Net gain from operations before net realized capital gains (losses) | 86.6 | 96.5 | 60.3 | 94.0 | 337.4 | 112.5 | 102.1 | ||||||||||||||
Net realized capital gains (losses) | 7.8 | 7.2 | (10.6 | ) | 8.6 | 13.0 | 9.7 | 4.1 | |||||||||||||
Net income | $ | 94.4 | $ | 103.7 | $ | 49.7 | $ | 102.6 | $ | 350.4 | $ | 122.2 | $ | 106.2 | |||||||
Capital and surplus | $ | 1,601.9 | $ | 1,626.0 | $ | 1,554.3 | $ | 1,560.4 | $ | 1,560.4 | $ | 1,579.8 | $ | 1,626.8 | |||||||
Asset valuation reserve (AVR) | 191.3 | 206.1 | 212.5 | 222.2 | 222.2 | 234.3 | 238.1 | ||||||||||||||
Capital, surplus and AVR | 1,793.2 | 1,832.1 | 1,766.8 | 1,782.6 | 1,782.6 | 1,814.1 | 1,864.9 | ||||||||||||||
Interest maintenance reserve (IMR) | 562.2 | 581.4 | 590.1 | 585.8 | 585.8 | 587.2 | 586.1 | ||||||||||||||
Total statutory capital, surplus, AVR & IMR | $ | 2,355.4 | $ | 2,413.5 | $ | 2,356.9 | $ | 2,368.4 | $ | 2,368.4 | $ | 2,401.3 | $ | 2,451.0 | |||||||
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