Document
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): February 11, 2020

CNO Financial Group, Inc.
(Exact Name of Registrant as Specified in Charter)
 
Delaware
001-31792
75-3108137
(State or Other
Jurisdiction of Incorporation)
(Commission File Number)
(I.R.S. Employer
Identification No.)
11825 North Pennsylvania Street
Carmel, Indiana  46032
(Address of Principal Executive Offices) (Zip Code)

(317) 817-6100
(Registrant's telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
 
☐
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
 
☐
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
 
☐
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:
Title of each class
 
Trading Symbol
 
Name of each exchange on which registered
Common Stock, par value $0.01 per share
 
CNO
 
New York Stock Exchange
Rights to purchase Series D Junior Participating Preferred Stock
 
 
 
New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
 

1




Item 2.02.
Results of Operations and Financial Condition.

On February 11, 2020, CNO Financial Group, Inc. (the "Company") issued: (i) a press release announcing its financial results for the quarter ended December 31, 2019, a copy of which is attached hereto as Exhibit 99.1 and is incorporated herein by reference; (ii) the Quarterly Financial Supplement for December 31, 2019, a copy of which is attached hereto as Exhibit 99.2 and is incorporated herein by reference; and (iii) additional financial information related to its financial and operating results for the quarter ended December 31, 2019, a copy of which is attached hereto as Exhibit 99.3 and is incorporated herein by reference.

The information contained under Item 2.02 in this Current Report on Form 8-K (including Exhibits 99.1, 99.2 and 99.3) is being furnished and shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that Section. The information contained in this Current Report on Form 8-K shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in any such filing.


Item 9.01(d).
Financial Statements and Exhibits.

The following materials are furnished as exhibits to this Current Report on Form 8-K:

99.1
99.2
99.3






2




SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 
CNO Financial Group, Inc.
 
 
Date: February 11, 2020
 
 
By:
/s/ John R. Kline
 
 
 
John R. Kline
 
 
 
Senior Vice President and
Chief Accounting Officer
 
 
 
 





3

CNO Financial (1)
February 11, 2020


Exhibit 99.1
cnologopr.jpgNews


For Immediate Release
CNO Financial Group Reports Fourth Quarter and Full Year 2019 Results
2019 net income of $409 million, including $194 million favorable impact from tax strategy
Carmel, Ind., February 11, 2020 - CNO Financial Group, Inc. (NYSE: CNO) today announced that for the quarter ending December 31, 2019, net income was $278.0 million, or $1.84 per diluted share, compared to $28.3 million, or $0.17 per diluted share in 4Q18. CNO also reported that 4Q19 net operating income (1) was $78.6 million, or $0.52 per diluted share, compared to $59.8 million, or $0.36 per diluted share in 4Q18.
Net income for the year ended December 31, 2019, was $409.4 million, or $2.61 per diluted share, compared to a net loss of $315.0 million, or $1.90 per diluted share in 2018. Net operating income (1) was $290.0 million, or $1.85 per diluted share, compared to $289.0 million, or $1.75 per diluted share in 2018 (as adjusted to remove the earnings from the long-term care business that was ceded in 3Q18).
"CNO reported another solid quarter, capping off a successful 2019," said Gary C. Bhojwani, chief executive officer. "We delivered measured growth, exercising discipline to carefully balance sales and profitability. As a result, operating earnings per share were up 4%, excluding significant items, despite a 7% decline in net investment income due to a challenging low interest rate environment."
"Through proactive management, we maximized an expiring tax asset to generate meaningful incremental value for our shareholders. Rigorous expense control, including benefits from our recently announced corporate transformation and strategic IT partnership, will mitigate the interest rate impact and position us well for the future."
Full Year 2019 Highlights
•
Net income of $409.4 million (including $194 million tax benefit related to a tax planning strategy) compared to a net loss of $315.0 million in 2018 (including the net loss of $661 million related to completion of a long-term care reinsurance transaction)
•
Operating income (1) per share up 6%, as adjusted to remove the earnings from the long-term care business that was ceded in 3Q18
•
Life and health sales were up 5%; annuity collected premiums were up 12% from 2018
•
At December 31, 2019, book value per common share was $31.58, up 52% from $20.78 at December 31, 2018
•
At December 31, 2019, book value per diluted share, excluding accumulated other comprehensive income (2), was $22.09, up 13% from $19.52 at December 31, 2018
•
Returned $319 million to shareholders in share repurchases ($252 million) and dividends ($67 million)



CNO Financial (2)
February 11, 2020


Fourth Quarter 2019 Highlights
•
Net income of $278.0 million compared to $28.3 million in 4Q18
•
Operating income (1) per share was up 44% from 4Q18
•
Life and health sales were up 9% from 4Q18
•
Annuity collected premiums were down 9% from 4Q18, reflecting pricing discipline and a difficult comparable from prior year
•
Recorded a $194 million tax benefit from a tax strategy that will enable the Company to utilize all of the net operating losses ("NOLs") that would have otherwise expired in 2023, resulting in the elimination of the valuation allowance related to those NOLs
•
Returned $91 million to shareholders in share repurchases ($75 million) and dividends ($16 million)
Quarterly Operating Results
 
Three months ended
 
December 31,
 
2019
 
2018
 
(Dollars in millions, except per share data)
Net operating income (1)
$
78.6

 
$
59.8

Net realized investment gains (losses) from sales and impairments (net of related amortization)
7.1

 
(10.5
)
Net change in market value of investments recognized in earnings
(2.6
)
 
(27.5
)
Fair value changes in embedded derivative liabilities (net of related amortization)
13.4

 
(.8
)
Fair value changes related to agent deferred compensation plan
2.5

 
.9

Other
(13.3
)
 
1.8

Non-operating income (loss) before taxes
7.1

 
(36.1
)
Income tax expense (benefit):
 
 
 
On non-operating income (loss)
1.4

 
(7.6
)
Valuation allowance for deferred tax assets and other tax items
(193.7
)
 
3.0

Net non-operating income (loss)
199.4

 
(31.5
)
Net income
$
278.0

 
$
28.3

 
 
 
 
Per diluted share:
 
 
 
Net operating income
$
.52

 
$
.36

Net realized investment gains (losses) from sales and impairments (net of related amortization and taxes)
.04

 
(.05
)
Net change in market value of investments recognized in earnings (net of taxes)
(.01
)
 
(.13
)
Fair value changes in embedded derivative liabilities (net of related amortization and taxes)
.07

 
—

Fair value changes related to agent deferred compensation plan (net of taxes)
.01

 
—

Valuation allowance for deferred tax assets and other tax items
1.28

 
(.02
)
Other
(.07
)
 
.01

Net income
$
1.84

 
$
.17


Please refer to our 4Q2019 Quarterly Financial Supplement for additional information related to the Company's financial and operating results for the quarter ended December 31, 2019. Such information is being furnished as an exhibit to the Current Report on Form 8-K dated February 11, 2020.



CNO Financial (3)
February 11, 2020


Significant Items Impacting Net Operating Income

 
Three months ended
 
December 31,
 
2019
 
2018
 
Dollars in
 
Per diluted
 
Dollars in
 
Per diluted
 
millions
 
share
 
millions
 
share
Net operating income (1)
$
78.6

 
$
.52

 
$
59.8

 
$
.36

Significant items
(7.9
)
 
(.05
)
 
15.1

 
.09

Net operating earnings, excluding significant items
$
70.7

 
$
.47

 
$
74.9

 
$
.45


The significant items in 4Q19 included: (i) adjustments arising from our comprehensive annual actuarial review of assumptions including $10.8 million of unfavorable impacts in the Bankers Life segment and $.8 million of favorable impacts in the Washington National segment; (ii) $20.0 million of the net favorable impact from legal and regulatory matters in the Corporate segment; and (iii) an increase in income tax expense of $2.1 million.
The significant items in 4Q18 included: (i) adjustments arising from our comprehensive annual actuarial review of assumptions including $3.1 million of unfavorable impacts in the Bankers Life segment and $2.2 million of favorable impacts in the Washington National segment; (ii) the $14.4 million reduction in the value of investments backing our COLI used as a vehicle to fund Bankers Life's agent deferred compensation plan; and (iii) an increase in tax expense of $.2 million. It should be noted that changes in the value of COLI investments are not subject to income taxes.
Non-Operating Items
Net realized investment gains in 4Q19 were $7.1 million (net of related amortization) including other-than-temporary impairment losses of $6.8 million which were recorded in earnings. Net realized investment losses in 4Q18 were $10.5 million (net of related amortization) including other-than-temporary impairment losses of $.5 million which were recorded in earnings.
During 4Q19 and 4Q18, we recognized a decrease in earnings of $2.6 million and $27.5 million, respectively, due to the net change in market value of investments recognized in earnings.
During 4Q19 and 4Q18, we recognized an increase (decrease) in earnings of $13.4 million and $(.8) million, respectively, resulting from changes in the estimated fair value of embedded derivative liabilities related to our fixed index annuities, net of related amortization. Such amounts include the impacts of changes in market interest rates used to determine the derivative's estimated fair value.
During 4Q19 and 4Q18, we recognized an increase in earnings of $2.5 million and $.9 million, respectively, for the mark-to-market change in the agent deferred compensation plan liability which was impacted by changes in the underlying actuarial assumptions used to value the liability. We recognize the mark-to-market change in the estimated value of this liability through earnings as assumptions change.
The other non-operating items in 4Q19 include the previously announced pre-tax charge of approximately $14 million related to our new operating model to create a leaner, more integrated customer-centric organization.
During 4Q19, we implemented a tax planning strategy that is expected to utilize net operating loss carryforwards that otherwise would have expired in 2023. Accordingly, we eliminated the valuation allowance for deferred tax assets of $193.7 million in 4Q19.
Statutory (based on non-GAAP measures) and GAAP Capital Information
Our consolidated statutory risk-based capital ratio was estimated at 408% at December 31, 2019, reflecting estimated 4Q19 statutory operating income of $56 million (and $262 million in 2019) and the payment of insurance company dividends to the holding company of $16.0 million during 4Q19 (and $186.3 million during 2019). Both statutory operating income and dividends paid to the holding company exclude $46.0 million of intercompany tax



CNO Financial (4)
February 11, 2020


sharing payments to be received by the insurance companies that will be returned to the holding company in the form of a dividend.
During the fourth quarter of 2019, we repurchased $75.0 million of common stock under our securities repurchase program (including $1.8 million of repurchases settled in 1Q2020). We repurchased 4.4 million common shares at an average cost of $17.14 per share. As of December 31, 2019, we had 148.1 million shares outstanding and had authority to repurchase up to an additional $532.3 million of our common stock. During 4Q19, dividends paid on common stock totaled $16.4 million.
Unrestricted cash and investments held by our holding company were $187 million at December 31, 2019, compared to $220 million at December 31, 2018.
Book value per common share was $31.58 at December 31, 2019, compared to $20.78 at December 31, 2018. Book value per diluted share, excluding accumulated other comprehensive income (loss) (2), was $22.09 at December 31, 2019, compared to $19.52 at December 31, 2018.
The debt-to-capital ratio was 17.5 percent and 21.4 percent at December 31, 2019 and 2018, respectively. Our debt-to-total capital ratio, excluding accumulated other comprehensive income (3) was 23.0 percent at December 31, 2019 compared to 22.3 percent at December 31, 2018.
Return on equity for the year ended December 31, 2019 and 2018, was 9.8% and (7.5)%, respectively. Return on equity for the year ended December 31, 2018 was unfavorably impacted by a loss of $661.1 million recognized in the third quarter of 2018 related to a long-term care reinsurance transaction. Operating return, excluding significant items, on equity, excluding accumulated other comprehensive income and net operating loss carryforwards (7) for the year ended December 31, 2019 and 2018, was 10.4% and 10.3%, respectively.
Conference Call
The Company will host a conference call to discuss results on February 12, 2020 at 11:00 a.m. Eastern Time. During the call, we will be referring to a presentation that will be available at the Investors section of the company's website this evening.
To participate by dial-in, please dial (844) 668-8093 or (647) 253-8656 for international participants, at least five minutes before the call start time. The operator will ask you to identify yourself and your company, and will also ask for the conference ID, "9696167."
For those investors who prefer to listen to the call online, we will be broadcasting the call live via webcast. The event can be accessed through the Investors section of our website at ir.CNOinc.com. Participants should go to the website at least 15 minutes before the event to register, download and install any necessary software.
If you are unable to join us on the call, you may access a replay of the call through webcast, available through the Investors section of our website at ir.CNOinc.com.
For more information, visit CNO online at CNOinc.com.




CNO Financial (5)
February 11, 2020


CNO FINANCIAL GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(Dollars in millions)
(unaudited)
 
December 31,
2019
 
December 31, 2018
ASSETS
 
 
 
Investments:
 
 
 
Fixed maturities, available for sale, at fair value (amortized cost: 2019 - $19,179.5; 2018 - $18,107.8)
$
21,295.2

 
$
18,447.7

Equity securities at fair value (cost: 2019 - $44.2; 2018 - $319.8)
44.1

 
291.0

Mortgage loans
1,566.1

 
1,602.1

Policy loans
124.5

 
119.7

Trading securities
243.9

 
233.1

Investments held by variable interest entities
1,188.6

 
1,468.4

Other invested assets
1,118.5

 
833.4

Total investments
25,580.9

 
22,995.4

Cash and cash equivalents - unrestricted
580.0

 
594.2

Cash and cash equivalents held by variable interest entities
74.7

 
62.4

Accrued investment income
205.9

 
205.2

Present value of future profits
275.4

 
343.6

Deferred acquisition costs
1,215.5

 
1,322.5

Reinsurance receivables
4,785.7

 
4,925.4

Income tax assets, net
432.6

 
630.0

Assets held in separate accounts
4.2

 
4.4

Other assets
476.0

 
356.7

Total assets
$
33,630.9

 
$
31,439.8

LIABILITIES AND SHAREHOLDERS' EQUITY
 
 
 
Liabilities:
 

 
 

Liabilities for insurance products:
 

 
 

Policyholder account liabilities
$
12,132.3

 
$
11,522.8

Future policy benefits
11,498.5

 
11,153.7

Liability for policy and contract claims
522.3

 
521.9

Unearned and advanced premiums
260.5

 
253.9

Liabilities related to separate accounts
4.2

 
4.4

Other liabilities
750.2

 
632.4

Investment borrowings
1,644.3

 
1,645.8

Borrowings related to variable interest entities
1,152.5

 
1,417.2

Notes payable – direct corporate obligations
989.1

 
916.8

Total liabilities
28,953.9

 
28,068.9

Commitments and Contingencies
 
 
 
Shareholders' equity:
 

 
 

Common stock ($0.01 par value, 8,000,000,000 shares authorized, shares issued and outstanding: 2019 - 148,084,178; 2018 - 162,201,692)
1.5

 
1.6

Additional paid-in capital
2,767.3

 
2,995.0

Accumulated other comprehensive income
1,372.5

 
177.7

Retained earnings
535.7

 
196.6

Total shareholders' equity
4,677.0

 
3,370.9

Total liabilities and shareholders' equity
$
33,630.9

 
$
31,439.8






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CNO Financial (6)
February 11, 2020



CNO FINANCIAL GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(Dollars in millions, except per share data)
(unaudited)
 
Three months ended
 
Year ended
 
December 31,
 
December 31,
 
2019
 
2018
 
2019
 
2018
Revenues:
 
 
 
 
 
 
 
Insurance policy income
$
623.2

 
$
616.5

 
$
2,480.8

 
$
2,593.1

Net investment income:
 
 
 
 
 
 
 
General account assets
272.0

 
290.4

 
1,105.2

 
1,279.7

Policyholder and other special-purpose portfolios
101.1

 
(107.8
)
 
257.7

 
26.5

Realized investment gains (losses):
 
 
 
 
 
 
 
Net realized gains on the transfer of assets related to reinsurance transaction
—

 
—

 
—

 
363.4

Other net realized investment gains (losses), excluding impairment losses
11.3

 
(37.8
)
 
40.6

 
(8.7
)
Impairment losses recognized (a)
(6.8
)
 
(.5
)
 
(12.4
)
 
(2.6
)
Total realized gains
4.5

 
(38.3
)
 
28.2

 
352.1

Fee revenue and other income
68.2

 
17.4

 
143.9

 
62.1

Total revenues
1,069.0

 
778.2

 
4,015.8

 
4,313.5

Benefits and expenses:
 
 
 
 
 
 
 
Insurance policy benefits
600.3

 
426.9

 
2,417.0

 
2,278.6

Loss related to reinsurance transaction
—

 
—

 
—

 
1,067.6

Interest expense
35.2

 
39.7

 
152.3

 
149.8

Amortization
76.1

 
69.0

 
232.1

 
264.3

Loss on extinguishment of debt
—

 
—

 
7.3

 
—

Loss on extinguishment of borrowings related to variable interest entities
—

 
—

 
—

 
3.8

Other operating costs and expenses
250.0

 
205.5

 
932.9

 
814.2

Total benefits and expenses
961.6

 
741.1

 
3,741.6

 
4,578.3

Income (loss) before income taxes
107.4

 
37.1

 
274.2

 
(264.8
)
Income tax expense (benefit):
 
 
 
 
 
 
 
Tax expense (benefit) on period income (loss)
23.1

 
5.8

 
58.5

 
(57.6
)
Valuation allowance for deferred tax assets and other tax items
(193.7
)
 
3.0

 
(193.7
)
 
107.8

Net income (loss)
$
278.0

 
$
28.3

 
$
409.4

 
$
(315.0
)
Earnings per common share:
 
 
 
 
 
 
 
Basic:
 
 
 
 
 
 
 
Weighted average shares outstanding
150,138,000

 
164,118,000

 
156,040,000

 
165,457,000

Net income (loss)
$
1.85

 
$
.17

 
$
2.62

 
$
(1.90
)
Diluted:
 
 
 
 
 
 
 
Weighted average shares outstanding
151,407,000

 
165,890,000

 
157,148,000

 
165,457,000

Net income (loss)
$
1.84

 
$
.17

 
$
2.61

 
$
(1.90
)

______________
(a)
No portion of the other-than-temporary impairments recognized in the periods was included in accumulated other comprehensive income.

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CNO Financial (7)
February 11, 2020



CNO FINANCIAL GROUP, INC. AND SUBSIDIARIES
OPERATING RESULTS
 
Year ended
 
December 31,
 
2019
 
2018
 
(Dollars in millions, except per share data)
Net operating income (1)
$
290.0

 
$
303.1

Net realized investment gains from sales and impairments (net of related amortization)
2.1

 
37.9

Net change in market value of investments recognized in earnings
25.5

 
(48.8
)
Fair value changes in embedded derivative liabilities (net of related amortization)
(81.4
)
 
55.5

Fair value changes related to agent deferred compensation plan
(20.4
)
 
11.9

Loss related to reinsurance transaction
—

 
(704.2
)
Loss on extinguishment of debt
(7.3
)
 
—

Other
(12.6
)
 
1.7

Non-operating loss before taxes
(94.1
)
 
(646.0
)
Income tax expense (benefit):
 
 
 
On non-operating loss
(19.8
)
 
(135.7
)
Valuation allowance for deferred tax assets and other tax items
(193.7
)
 
107.8

Net non-operating income (loss)
119.4

 
(618.1
)
Net income (loss)
$
409.4

 
$
(315.0
)
 
 
 
 
Per diluted share:
 
 
 
Net operating income
$
1.85

 
$
1.83

Net realized investment gains from sales and impairments (net of related amortization and taxes)
.01

 
.18

Net change in market value of investments recognized in earnings (net of taxes)
.13

 
(.23
)
Fair value changes in embedded derivative liabilities (net of related amortization and taxes)
(.41
)
 
.27

Fair value changes related to agent deferred compensation plan (net of taxes)
(.10
)
 
.06

Loss related to reinsurance transaction (net of taxes)
—

 
(4.00
)
Loss on extinguishment of debt (net of taxes)
(.04
)
 
—

Valuation allowance for deferred tax assets and other tax items
1.23

 
(.02
)
Other
(.06
)
 
.01

Net income (loss)
$
2.61

 
$
(1.90
)




CNO Financial (8)
February 11, 2020


Significant Items Impacting Net Operating Income

 
Year ended
 
December 31,
 
2019
 
2018
 
Dollars in
 
Per diluted
 
Dollars in
 
Per diluted
 
millions
 
share
 
millions
 
share
Net operating income (1)
$
290.0

 
$
1.85

 
$
303.1

 
$
1.83

Earnings on long-term care ceded block
—

 
—

 
(14.1
)
 
(.08
)
Net operating earnings, excluding the earnings on the long-term care ceded block
290.0

 
1.85

 
289.0

 
1.75

Significant items
(7.9
)
 
(.05
)
 
14.2

 
.08

Net operating earnings, excluding significant items and the earnings on the long-term care ceded block
$
282.1

 
$
1.80

 
$
303.2

 
$
1.83


In 3Q18, we ceded the Bankers Life legacy long-term care business under a 100% indemnity coinsurance agreement. In the above table, we have adjusted the operating earnings, excluding significant items, in 2018 to remove the earnings of this block.
The significant items in 2019 included: (i) adjustments arising from our comprehensive annual actuarial review of assumptions including $10.8 million of unfavorable impacts in the Bankers Life segment and $.8 million of favorable impacts in the Washington National segment; (ii) $20.0 million of the net favorable impact from legal and regulatory matters in the Corporate segment; and (iii) an increase in income tax expense of $2.1 million.
The significant items in 2018 included: (i) a $2.3 million release of long-term care reserves (net of the reduction in insurance intangibles) due to the impact of policyholder actions following rate increases; (ii) a $1.1 million out-of-period adjustment which increased reserves on closed block annuities; (iii) adjustments arising from our comprehensive annual actuarial review of assumptions including $3.1 million of unfavorable impacts in the Bankers Life segment and $2.2 million of favorable impacts in the Washington National segment; (iv) the $14.4 million reduction in the value of investments backing our COLI used as a vehicle to fund Bankers Life's agent deferred compensation plan; and (v) a decrease in tax expense of $.1 million.






CNO Financial (9)
February 11, 2020


CNO FINANCIAL GROUP, INC. AND SUBSIDIARIES
FIRST-YEAR COLLECTED PREMIUMS
(Dollars in millions)
 
Three months ended
 
December 31,
 
2019
 
2018
Bankers Life:
 
 
 
Medicare supplement
$
16.1

 
$
15.8

Long-term care
5.0

 
4.3

Supplemental health
1.2

 
1.2

Other health
.3

 
.2

Life
30.1

 
30.2

Annuity
322.8

 
352.7

Total
375.5

 
404.4

Washington National:
 
 
 
Supplemental health and other health
17.9

 
17.1

Life
2.4

 
1.7

Annuity
—

 
.1

Total
20.3

 
18.9

Colonial Penn:
 
 
 
Life
12.8

 
12.0

Total
12.8

 
12.0

Total first-year collected premiums from segments
$
408.6

 
$
435.3



TOTAL COLLECTED PREMIUMS
(Dollars in millions)
 
Three months ended
 
December 31,
 
2019
 
2018
Bankers Life:
 
 
 
Medicare supplement
$
194.1

 
$
189.8

Long-term care
65.3

 
63.6

Supplemental health
6.5

 
6.1

Other health
1.5

 
1.5

Life
119.6

 
116.8

Annuity
324.1

 
354.3

Total
711.1

 
732.1

Washington National:
 
 
 
Supplemental health and other health
160.8

 
156.2

Medicare supplement
10.5

 
11.4

Life
9.7

 
8.5

Annuity
.2

 
.2

Total
181.2

 
176.3

Colonial Penn:
 
 
 
Life
77.0

 
74.8

Medicare supplement and other health
.3

 
.4

Total
77.3

 
75.2

Long-term care in run-off:
 
 
 
Long-term care
3.2

 
3.7

Total
3.2

 
3.7

Total collected premiums from segments
$
972.8

 
$
987.3

-more-



CNO Financial (10)
February 11, 2020


CNO FINANCIAL GROUP, INC. AND SUBSIDIARIES
NEW ANNUALIZED PREMIUMS FOR LIFE AND HEALTH PRODUCTS (4)
(Dollars in millions)
 
Three months ended
 
December 31,
 
2019
 
2018
Bankers Life:
 
 
 
Medicare supplement
$
17.2

 
$
17.9

Long-term care
8.0

 
7.4

Supplemental health and other health
2.2

 
2.0

Life
14.6

 
14.9

Total
42.0

 
42.2

Washington National:
 
 
 
Supplemental health
35.3

 
26.0

Life
4.4

 
4.1

Total
39.7

 
30.1

Colonial Penn:
 
 
 
Life
15.9

 
17.3

Total
15.9

 
17.3

Total new annualized premiums
$
97.6

 
$
89.6


ANNUITY ACCOUNT VALUES
(Dollars in millions)
 
December 31,
 
2019
 
2018
Bankers Life
$
9,053.2

 
$
8,600.7

Washington National
297.4

 
342.5

Total
$
9,350.6

 
$
8,943.2


BROKER DEALER AND REGISTERED INVESTMENT ADVISOR CLIENT ASSETS
(Dollars in millions)
 
Three months ended
 
December 31,
 
2019
 
2018
Net new client assets (a):
 
 
 
Brokerage
$
17.4

 
$
(1.1
)
Advisory
45.4

 
13.2

Total
$
62.8

 
$
12.1

Client assets at end of period (b):
 
 
 
Brokerage
$
982.9

 
$
794.1

Advisory
532.1

 
310.8

Total
$
1,515.0

 
$
1,104.9


(a)
Net new client assets includes total inflows of cash and securities into brokerage and managed advisory accounts less outflows. Inflows include interest and dividends and exclude changes due to market fluctuations.
(b)
Client assets include cash and securities in brokerage and managed advisory accounts.

Bankers Life is the marketing brand of various affiliated companies of CNO Financial Group including, Bankers Life and Casualty Company, Bankers Life Securities, Inc., and Bankers Life Advisory Services, Inc. Non-affiliated insurance products are offered through Bankers Life General Agency, Inc. (dba BL General Insurance Agency, Inc., AK, AL, CA, NV, PA). Agents who are financial advisors are registered with Bankers Life Securities, Inc.
Securities and variable annuity products and services are offered by Bankers Life Securities, Inc. Member FINRA/SIPC, (dba BL Securities, Inc., AL, GA, IA, IL, MI, NV, PA). Advisory products and services are offered by Bankers Life Advisory Services, Inc. SEC Registered Investment Adviser (dba BL Advisory Services, Inc., AL, GA, IA, MT, NV, PA). Home Office: 111 East Wacker Drive, Suite 1900, Chicago, IL 60601.

-more-



CNO Financial (11)
February 11, 2020


Benefit Ratios On Major Health Lines Of Business

 
Three months ended
 
December 31,
 
2019
 
2018
Bankers Life:
 
 
 
Medicare supplement:
 
 
 
Earned premium
$189 million

 
$190 million

Benefit ratio (5)
74.2
%
 
76.0
%
Long-term care:
 
 
 
Earned premium
$63 million

 
$64 million

Benefit ratio (5)
120.4
%
 
117.9
%
Interest-adjusted benefit ratio (a non-GAAP measure) (6)
75.0
%
 
74.7
%
Washington National:
 
 
 
Supplemental health:
 
 
 
Earned premium
$160 million

 
$156 million

Benefit ratio (5)
78.1
%
 
77.7
%
Interest-adjusted benefit ratio (a non-GAAP measure) (6)
54.2
%
 
53.8
%

NOTES
(1)
Management believes that an analysis of Net income applicable to common stock before: (i) net realized investment gains or losses from sales and impairments, net of related amortization and taxes; (ii) net change in market value of investments recognized in earnings, net of taxes; (iii) fair value changes due to fluctuations in the interest rates used to discount embedded derivative liabilities related to our fixed index annuities, net of related amortization and taxes; (iv) fair value changes related to the agent deferred compensation plan, net of taxes; (v) loss related to reinsurance transaction, net of taxes; (vi) loss on extinguishment of debt, net of taxes; (vii) changes in the valuation allowance for deferred tax assets and other tax items; and (viii) other non-operating items consisting primarily of earnings attributable to variable interest entities, net of taxes ("Net operating income," a non-GAAP financial measure) is important to evaluate the financial performance of the company, and is a key measure commonly used in the life insurance industry. Management uses this measure to evaluate performance because the items excluded from net operating income can be affected by events that are unrelated to the company's underlying fundamentals. A reconciliation of Net operating income to Net income applicable to common stock is provided in the tables on pages 2 and 7. Additional information concerning this non-GAAP measure is included in our periodic filings with the Securities and Exchange Commission that are available in the "Investors - SEC Filings" section of CNO's website, CNOinc.com.
(2)
Book value per diluted share reflects the potential dilution that could occur if outstanding stock options were exercised, restricted stock and performance units were vested and convertible securities were converted. The dilution from options, restricted shares and performance units is calculated using the treasury stock method. Under this method, we assume the proceeds from the exercise of the options (or the unrecognized compensation expense with respect to restricted stock and performance units) will be used to purchase shares of our common stock at the closing market price on the last day of the period. 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.
(3)
The calculation of this non-GAAP measure differs from the corresponding GAAP measure because accumulated other comprehensive income (loss) has been excluded from the value of capital used to determine this measure. Management believes this non-GAAP measure is useful because it removes the volatility that arises from changes in the unrealized appreciation (depreciation) of our investments.
(4)
Measured by new annualized premium for life and health products, which includes 10% of single premium whole life deposits and 100% of all other premiums (excluding annuities). Medicare Advantage sales are not comparable to other sales and are therefore excluded in all periods.
(5)
The benefit ratio is calculated by dividing the related product's insurance policy benefits by insurance policy income.
(6)
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.



CNO Financial (12)
February 11, 2020


The interest-adjusted benefit ratio reflects the effects of such interest income offset (which is equal to the tabular interest on the related insurance liabilities). 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, CNOinc.com.
(7)
The following summarizes the calculations of: (i) operating return on equity, excluding accumulated other comprehensive income (loss) and net operating loss carryforwards (a non-GAAP financial measure); (ii) operating return, excluding significant items, on equity, excluding accumulated other comprehensive income (loss) and net operating loss carryforwards (a non-GAAP financial measure); and (iii) return on equity are as follows (dollars in millions):
 
 
 
Year ended
 
 
 
4Q19
 
4Q18
Net operating income
$
290.0

 
$
303.1

 
 
 
 
 
 
Net operating income, excluding significant items
$
282.1

 
$
317.3

 
 
 
 
 
 
Net income (loss)
$
409.4

 
$
(315.0
)
 
 
 
 
 
 
Average common equity, excluding accumulated other
 
 
 
 
comprehensive income (loss) and net operating loss
 
 
 
 
carryforwards (a non-GAAP financial measure)
$
2,703.9

 
$
3,086.7

 
 
 
 
 
 
Average common shareholders' equity
$
4,166.8

 
$
4,200.3

 
 
 
 
 
 
Operating return on equity, excluding accumulated other
 
 
 
 
comprehensive income (loss) and net operating loss
 
 
 
 
carryforwards (a non-GAAP financial measure)
10.7
%
 
9.8
 %
 
 
 
 
 
 
Operating return, excluding significant items, on equity, excluding
 
 
 
 
accumulated other comprehensive income (loss) and net
 
 
 
 
operating loss carryforwards (a non-GAAP financial measure)
10.4
%
 
10.3
 %
 
 
 
 
 
 
Return on equity
9.8
%
 
(7.5
)%

The following summarizes: (i) operating earnings; (ii) significant items; (iii) operating earnings, excluding significant items; and (iv) net income (loss) (dollars in millions):
 
 
 
 
 
 
 
 
Net operating
 
 
 
 
 
 
 
 
 
 
Net operating
 
income,
 
 
 
 
 
 
 
 
 
 
income,
 
excluding
 
 
 
Net
 
 
 
 
 
 
excluding
 
significant
 
 
 
income (loss) -
 
 
Net operating
 
Significant
 
significant
 
items - trailing
 
Net
 
trailing
 
 
income
 
items (a)
 
items
 
four quarters
 
income (loss)
 
four quarters
1Q18
 
$
73.9

 
$
(.9
)
 
$
73.0

 
$
299.6

 
$
84.3

 
$
197.6

2Q18
 
81.9

 
—

 
81.9

 
309.0

 
102.2

 
216.4

3Q18
 
87.5

 
—

 
87.5

 
321.8

 
(529.8
)
 
(414.2
)
4Q18
 
59.8

 
15.1

 
74.9

 
317.3

 
28.3

 
(315.0
)
1Q19
 
65.8

 
—

 
65.8

 
310.1

 
51.8

 
(347.5
)
2Q19
 
76.4

 
—

 
76.4

 
304.6

 
37.6

 
(412.1
)
3Q19
 
69.2

 
—

 
69.2

 
286.3

 
42.0

 
159.7

4Q19
 
78.6

 
(7.9
)
 
70.7

 
282.1

 
278.0

 
409.4

 
(a) The significant items have been discussed in prior press releases.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 



CNO Financial (13)
February 11, 2020


A reconciliation of pretax operating earnings (a non-GAAP financial measure) to net income (loss) is as follows (dollars in millions):
 
 
 
Year ended
 
 
 
4Q19
 
4Q18
Pretax operating earnings (a non-GAAP financial measure)
$
368.3

 
$
381.2

Income tax expense
(78.3
)
 
(78.1
)
Net operating income
290.0

 
303.1

Non-operating items:
 
 
 
Net realized investment gains (losses) from sales and impairments, net of related amortization
2.1

 
37.9

Net change in market value of investments recognized in earnings
25.5

 
(48.8
)
Fair value changes in embedded derivative liabilities, net of related amortization
(81.4
)
 
55.5

Fair value changes and amendment related to the agent deferred compensation plan
(20.4
)
 
11.9

Loss on reinsurance transaction
—

 
(704.2
)
Loss on extinguishment of debt
(7.3
)
 
—

Other
(12.6
)
 
1.7

Non-operating loss before taxes
(94.1
)
 
(646.0
)
Income tax expense (benefit):
 
 
 
    On non-operating loss
(19.8
)
 
(135.7
)
    Valuation allowance for deferred tax assets and other tax items
(193.7
)
 
107.8

Net non-operating income (loss)
119.4

 
(618.1
)
Net income (loss)
$
409.4

 
$
(315.0
)
 
 
 
 
 
 

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

 
 
 
 
 
 
 
 
 
4Q17
Consolidated capital, excluding accumulated other comprehensive
 
 
 
 
 
 
 
 
income (loss) and net operating loss carryforwards
 
 
 
 
 
 
 
 
(a non-GAAP financial measure)
 
 
 
 
 
 
$
3,225.6

Net operating loss carryforwards
 
 
 
 
 
 
409.8

Accumulated other comprehensive income
 
 
 
 
 
 
1,212.1

Common shareholders' equity


 


 


 
$
4,847.5

 
 
 
 
 
 
 
 
 
 
 
 
 
1Q18
 
2Q18
 
3Q18
 
4Q18
Consolidated capital, excluding accumulated other comprehensive
 
 
 
 
 
 
 
 
income (loss) and net operating loss carryforwards
 
 
 
 
 
 
 
 
(a non-GAAP financial measure)
$
3,318.7

 
$
3,366.0

 
$
2,705.8

 
$
2,687.3

Net operating loss carryforwards
404.2

 
388.7

 
510.6

 
505.9

Accumulated other comprehensive income
894.3

 
700.2

 
403.5

 
177.7

Common shareholders' equity
$
4,617.2

 
$
4,454.9

 
$
3,619.9

 
$
3,370.9

 
 
 
 
 
 
 
 
 
 
 
 
 
1Q19
 
2Q19
 
3Q19
 
4Q19
Consolidated capital, excluding accumulated other comprehensive
 
 
 
 
 
 
 
 
income (loss) and net operating loss carryforwards
 
 
 
 
 
 
 
 
(a non-GAAP financial measure)
$
2,703.4

 
$
2,702.9

 
$
2,685.0

 
$
2,761.9

Net operating loss carryforwards
479.6

 
451.1

 
425.4

 
542.6

Accumulated other comprehensive income
654.9

 
1,098.2

 
1,442.9

 
1,372.5

Common shareholders' equity
$
3,837.9

 
$
4,252.2

 
$
4,553.3

 
$
4,677.0

 
 
 
 
 
 
 
 
 
 



CNO Financial (14)
February 11, 2020


A reconciliation of consolidated capital, excluding accumulated other comprehensive income (loss) and net operating loss carryforwards (a non-GAAP financial measure) to common shareholders’ equity, is as follows (dollars in millions):
 
 
 
Trailing four quarter average
 
 
 
4Q19
 
4Q18
Consolidated capital, excluding accumulated other comprehensive
 
 
 
 
income (loss) and net operating loss carryforwards
 
 
 
 
(a non-GAAP financial measure)
$
2,703.9

 
$
3,086.7

Net operating loss carryforwards
470.1

 
440.4

Accumulated other comprehensive income
992.8

 
673.2

Common shareholders' equity
$
4,166.8

 
$
4,200.3


(8)
The following summarizes our estimate of the impact of lower general account asset investment income and changes in amounts impacting spreads on 4Q19 net income compared to 4Q18 net income (dollars in millions):

 
 
 
4Q19
 
4Q18
 
Difference
Net investment income on general account assets
$
272.0

 
$
290.4

 
$
(18.4
)
Impact of amounts credited and cost of options impacting spread:

 
 
 
 
 
 
Cost of interest credited to policyholders
(25.9
)
 
(27.4
)
 
1.5

 
Cost of options to fund index credits, net of forfeitures
(24.8
)
 
(25.9
)
 
1.1

Subtotal
221.3

 
237.1

 
(15.8
)
Tax expense (benefit)
46.5

 
49.8

 
(3.3
)
Impact on net income, net of income taxes
$
174.8

 
$
187.3

 
$
(12.5
)


Cautionary Statement Regarding Forward-Looking Statements. This press release may contain forward-looking statements within the meaning of the federal securities laws. These prospective statements reflect management's current expectations, but are not guarantees of future performance. Accordingly, please refer to CNO Financial's cautionary statement regarding forward-looking statements, and the business environment in which the Company operates, contained in the Company's Form 10-K for the year ended December 31, 2018, and any subsequent Forms 10-Q on file with the Securities and Exchange Commission and on the Company's website at CNOinc.com on the Investors page. CNO Financial specifically disclaims any obligation to update or revise any forward-looking statement because of new information, future developments or otherwise.

For further information: (News Media) Valerie Dolenga +1.312.396.7688 or (Investors) Jennifer Childe +1.312.396.7755
 

- # # # -





Exhibit 99.2



cnologosupp.jpg


 
 
 
 
 
 
 
 
 
 
 
 
Quarterly Financial Supplement - 4Q2019
 
 
 
 
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
February 11, 2020
 
 
 
 
 
 
 
 
 
 
 




Page 1



Table of Contents
 
 
 
Page
 
 
 
 
 
Consolidated balance sheet
 
 
 
3
Consolidated statement of operations
 
 
 
4
Operating results
 
 
 
5
Computation of weighted average shares outstanding
 
 
 
6
Analyses of income before taxes and selected data:
 
 
 
 
     Bankers Life
 
 
 
7-9
     Washington National
 
 
 
10-12
     Colonial Penn
 
 
 
13-14
     Long-term care in run-off
 
 
 
15
     Corporate Operations
 
 
 
15
Premiums collected on insurance products:
 
 
 
 
     Bankers Life
 
 
 
16
     Washington National
 
 
 
17
     Colonial Penn
 
 
 
18
     Long-term care in run-off
 
 
 
18
First-Year Collected Premiums and New Annualized Premiums
 
 
 
19
Statutory information
 
 
 
20
Notes
 
 
 
21





Page 2



CNO Financial Group, Inc.
 
 
 
 
 
 
 
 
Consolidated balance sheet (in millions)
Mar-18
Jun-18
Sep-18
Dec-18
Mar-19
Jun-19
Sep-19
Dec-19
 
 
 
 
 
 
 
 
 
Assets
 
 
 
 
 
 
 
 
Investments:
 
 
 
 
 
 
 
 
  Fixed maturities, available for sale, at fair value
$
22,375.5

$
22,080.9

$
18,512.4

$
18,447.7

$
19,468.4

$
20,437.2

$
21,089.2

$
21,295.2

  Equity securities at fair value
498.7

366.1

335.5

291.0

40.8

38.8

39.3

44.1

  Mortgage loans
1,601.2

1,649.4

1,680.6

1,602.1

1,626.1

1,596.5

1,561.7

1,566.1

  Policy loans
116.0

116.0

117.4

119.7

121.3

121.6

122.8

124.5

  Trading securities
289.6

254.2

239.0

233.1

237.9

248.3

247.3

243.9

  Investments held by variable interest entities
1,583.9

1,543.3

1,550.5

1,468.4

1,241.4

1,215.2

1,204.2

1,188.6

  Other invested assets
951.1

946.0

920.0

833.4

943.3

1,018.8

1,070.9

1,118.5

  Total investments
27,416.0

26,955.9

23,355.4

22,995.4

23,679.2

24,676.4

25,335.4

25,580.9

Cash and cash equivalents - unrestricted
610.8

639.3

539.2

594.2

621.6

557.4

760.3

580.0

Cash and cash equivalents held by variable interest entities
115.6

106.4

56.4

62.4

69.7

50.5

61.7

74.7

Accrued investment income
268.1

252.5

224.7

205.2

214.8

211.2

212.7

205.9

Present value of future profits
350.4

345.5

351.6

343.6

333.6

299.3

284.0

275.4

Deferred acquisition costs
1,083.6

1,237.4

1,291.1

1,322.5

1,289.1

1,253.2

1,138.8

1,215.5

Reinsurance receivables
2,153.5

2,127.4

4,946.3

4,925.4

4,879.7

4,829.4

4,802.4

4,785.7

Income tax assets, net
450.4

484.8

577.8

630.0

479.9

348.3

241.5

432.6

Assets held in separate accounts
4.7

4.8

5.1

4.4

4.9

4.9

4.2

4.2

Other assets
356.0

318.2

299.6

356.7

741.9

485.4

438.8

476.0

Total assets
$
32,809.1

$
32,472.2

$
31,647.2

$
31,439.8

$
32,314.4

$
32,716.0

$
33,279.8

$
33,630.9

Liabilities
 
 
 
 
 
 
 
 
Liabilities for insurance products:
 
 
 
 
 
 
 
 
  Policyholder account liabilities
$
11,328.7

$
11,401.1

$
11,492.7

$
11,522.8

$
11,676.9

$
11,851.4

$
11,998.9

$
12,132.3

  Future policy benefits
11,238.0

11,217.1

11,097.5

11,153.7

11,234.2

11,314.3

11,423.2

11,498.5

  Liability for policy and contract claims
509.1

499.5

513.4

521.9

521.0

517.8

508.9

522.3

  Unearned and advanced premiums
270.3

260.5

249.2

253.9

255.9

248.1

242.8

260.5

  Liabilities related to separate accounts
4.7

4.8

5.1

4.4

4.9

4.9

4.2

4.2

Other liabilities
869.0

654.2

689.5

632.4

804.0

740.2

762.0

750.2

Investment borrowings
1,646.5

1,646.3

1,646.1

1,645.8

1,645.5

1,645.2

1,644.8

1,644.3

Borrowings related to variable interest entities
1,410.5

1,418.1

1,417.6

1,417.2

1,416.8

1,153.6

1,153.0

1,152.5

Notes payable - direct corporate obligations
915.1

915.7

916.2

916.8

917.3

988.3

988.7

989.1

Total liabilities
28,191.9

28,017.3

28,027.3

28,068.9

28,476.5

28,463.8

28,726.5

28,953.9

Shareholders' equity
 
 
 
 
 
 
 
 
Common stock
1.6

1.6

1.6

1.6

1.6

1.6

1.5

1.5

Additional paid-in capital
3,075.6

3,021.9

3,030.0

2,995.0

2,952.2

2,903.2

2,834.6

2,767.3

Retained earnings
645.7

731.2

184.8

196.6

229.2

249.2

274.3

535.7

Total shareholders' equity before accumulated other comprehensive income
3,722.9

3,754.7

3,216.4

3,193.2

3,183.0

3,154.0

3,110.4

3,304.5

Accumulated other comprehensive income
894.3

700.2

403.5

177.7

654.9

1,098.2

1,442.9

1,372.5

Total shareholders' equity
4,617.2

4,454.9

3,619.9

3,370.9

3,837.9

4,252.2

4,553.3

4,677.0

Total liabilities and shareholders' equity
$
32,809.1

$
32,472.2

$
31,647.2

$
31,439.8

$
32,314.4

$
32,716.0

$
33,279.8

$
33,630.9

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Mar-18
Jun-18
Sep-18
Dec-18
Mar-19
Jun-19
Sep-19
Dec-19
 
 
 
 
 
 
 
 
 
Book value per common share
$
27.59

$
27.09

$
21.99

$
20.78

$
23.99

$
27.12

$
29.92

$
31.58

 
 
 
 
 
 
 
 
 
Book value per common share, excluding accumulated other comprehensive income (1) (2)
$
22.25

$
22.83

$
19.54

$
19.69

$
19.90

$
20.12

$
20.44

$
22.32

 
 
 
 
 
 
 
 
 
Book value per diluted share (1) (3)
$
21.94

$
22.62

$
19.28

$
19.52

$
19.76

$
20.00

$
20.30

$
22.09

 
 
 
 
 
 
 
 
 





Page 3



CNO Financial Group, Inc.
 
 
 
 
 
 
 
 
 
 
Consolidated statement of operations (in millions)
1Q18
2Q18
3Q18
4Q18
2018
1Q19
2Q19
3Q19
4Q19
2019
 
 
 
 
 
 
 
 
 
 
 
Revenues
 
 
 
 
 
 
 
 
 
 
Insurance policy income
$
659.9

$
659.8

$
656.9

$
616.5

$
2,593.1

$
619.3

$
618.3

$
620.0

$
623.2

$
2,480.8

Net investment income:
 
 
 
 
 
 
 
 
 
 
   General account assets
329.1

328.2

332.0

290.4

1,279.7

270.6

286.7

275.9

272.0

1,105.2

Policyholder and other special-purpose portfolios
12.8

35.7

85.8

(107.8
)
26.5

85.2

47.8

23.6

101.1

257.7

Realized investment gains (losses):
 
 
 
 
 
 
 
 
 
 
Net realized gains on the transfer of assets related to reinsurance transaction
—

—

363.4

—

363.4

—

—

—

—

—

Other net realized investment gains (losses), excluding impairment losses
(15.2
)
11.0

33.3

(37.8
)
(8.7
)
18.3

5.3

5.7

11.3

40.6

Other-than-temporary impairments:
 
 
 
 
 
 
 
 
 
 
Total other-than-temporary impairment losses
—

—

(2.1
)
(0.5
)
(2.6
)
(2.2
)
—

(3.4
)
(6.8
)
(12.4
)
Change in other-than-temporary impairment losses recognized in accumulated other comprehensive income
—

—

—

—

—

—

—

—

—

—

Net impairment losses recognized
—

—

(2.1
)
(0.5
)
(2.6
)
(2.2
)
—

(3.4
)
(6.8
)
(12.4
)
Total realized gains (losses)
(15.2
)
11.0

394.6

(38.3
)
352.1

16.1

5.3

2.3

4.5

28.2

Fee revenue and other income
21.2

11.6

11.9

17.4

62.1

31.8

21.7

22.2

68.2

143.9

Total revenues
1,007.8

1,046.3

1,481.2

778.2

4,313.5

1,023.0

979.8

944.0

1,069.0

4,015.8

 
 
 
 
 
 
 
 
 
 
 
Benefits and expenses
 
 
 
 
 
 
 
 
 
 
Insurance policy benefits
586.6

618.2

646.9

426.9

2,278.6

623.5

610.4

582.8

600.3

2,417.0

Loss related to reinsurance transaction
—

—

1,067.6

—

1,067.6

—

—

—

—

—

Interest expense
33.6

37.7

38.8

39.7

149.8

41.0

38.6

37.5

35.2

152.3

Amortization
71.9

61.0

62.4

69.0

264.3

58.2

46.2

51.6

76.1

232.1

Loss on extinguishment of debt
—

—

—

—

—

—

7.3

—

—

7.3

Loss on extinguishment of borrowings related to variable interest entities
—

3.8

—

—

3.8

—

—

—

—

—

Other operating costs and expenses
207.6

195.8

205.3

205.5

814.2

234.7

229.6

218.6

250.0

932.9

Total benefits and expenses
899.7

916.5

2,021.0

741.1

4,578.3

957.4

932.1

890.5

961.6

3,741.6

 
 
 
 
 
 
 
 
 
 
 
Income (loss) before income taxes
108.1

129.8

(539.8
)
37.1

(264.8
)
65.6

47.7

53.5

107.4

274.2

Income tax expense (benefit) on period income (loss)
23.8

27.6

(114.8
)
5.8

(57.6
)
13.8

10.1

11.5

23.1

58.5

Valuation allowance for deferred tax assets and other tax items
—

—

104.8

3.0

107.8

—

—

—

(193.7
)
(193.7
)
Net income (loss)
$
84.3

$
102.2

$
(529.8
)
$
28.3

$
(315.0
)
$
51.8

$
37.6

$
42.0

$
278.0

$
409.4

 
 
 
 
 
 
 
 
 
 
 







Page 4



CNO Financial Group, Inc.
 
 
 
 
 
 
 
 
 
 
Operating results ($ in millions, except per share amounts)
1Q18
2Q18
3Q18
4Q18
2018
1Q19
2Q19
3Q19
4Q19
2019
 
 
 
 
 
 
 
 
 
 
 
Adjusted EBIT (4):
 
 
 
 
 
 
 
 
 
 
   Bankers Life
$
77.5

$
90.7

$
94.4

$
78.0

$
340.6

$
63.1

$
86.4

$
78.9

$
72.3

$
300.7

   Washington National
34.3

25.4

30.3

31.9

121.9

30.5

25.9

26.8

28.0

111.2

   Colonial Penn
(1.5
)
5.4

6.1

4.8

14.8

(1.4
)
5.8

3.7

6.2

14.3

   Long-term care in run-off
12.0

8.5

2.1

0.3

22.9

2.5

3.2

3.6

2.7

12.0

Adjusted EBIT from business segments
122.3

130.0

132.9

115.0

500.2

94.7

121.3

113.0

109.2

438.2

Corporate operations, excluding corporate interest expense
(15.5
)
(14.0
)
(11.8
)
(29.7
)
(71.0
)
0.8

(12.0
)
(11.2
)
4.9

(17.5
)
Adjusted EBIT
106.8

116.0

121.1

85.3

429.2

95.5

109.3

101.8

114.1

420.7

Corporate interest expense
(11.9
)
(11.9
)
(12.1
)
(12.1
)
(48.0
)
(12.1
)
(12.6
)
(13.9
)
(13.8
)
(52.4
)
Operating earnings before taxes
94.9

104.1

109.0

73.2

381.2

83.4

96.7

87.9

100.3

368.3

Tax expense on operating income
21.0

22.2

21.5

13.4

78.1

17.6

20.3

18.7

21.7

78.3

Net operating income (5)
73.9

81.9

87.5

59.8

303.1

65.8

76.4

69.2

78.6

290.0

Net realized investment gains (losses) from sales and impairments (net of related amortization)
0.5

10.9

37.0

(10.5
)
37.9

(0.7
)
(1.7
)
(2.6
)
7.1

2.1

Net change in market value of investments recognized in earnings
(15.7
)
(0.3
)
(5.3
)
(27.5
)
(48.8
)
16.6

6.8

4.7

(2.6
)
25.5

Fair value changes in embedded derivative liabilities (net of related amortization)
25.1

8.3

22.9

(0.8
)
55.5

(29.6
)
(35.9
)
(29.3
)
13.4

(81.4
)
Fair value changes related to agent deferred compensation plan
—

11.0

—

0.9

11.9

(5.3
)
(11.6
)
(6.0
)
2.5

(20.4
)
Loss related to reinsurance transaction
—

—

(704.2
)
—

(704.2
)
—

—

—

—

—

Loss on extinguishment of debt
—

—

—

—

—

—

(7.3
)
—

—

(7.3
)
Other
3.3

(4.2
)
0.8

1.8

1.7

1.2

0.7

(1.2
)
(13.3
)
$
(12.6
)
Non-operating income (loss) before taxes
13.2

25.7

(648.8
)
(36.1
)
(646.0
)
(17.8
)
(49.0
)
(34.4
)
7.1

$
(94.1
)
Income tax expense (benefit):
 
 
 
 

 
 
 
 
 
On non-operating income (loss)
2.8

5.4

(136.3
)
(7.6
)
(135.7
)
(3.8
)
(10.2
)
(7.2
)
1.4

$
(19.8
)
Valuation allowance for deferred tax assets and other tax items
—

—

104.8

3.0

107.8

—

—

—

(193.7
)
$
(193.7
)
Net non-operating income (loss)
10.4

20.3

(617.3
)
(31.5
)
(618.1
)
(14.0
)
(38.8
)
(27.2
)
199.4

$
119.4

Net income (loss)
$
84.3

$
102.2

$
(529.8
)
$
28.3

$
(315.0
)
$
51.8

$
37.6

$
42.0

$
278.0

$
409.4

 
 
 
 
 
 
 
 
 
 
 
Per diluted share:
 
 
 
 
 
 
 
 
 
 
Net operating income
$
.44

$
.49

$
.53

$
.36

$
1.83

$
.41

$
.48

$
.45

$
.52

$
1.85

Net realized investment gains (losses) from sales and impairments (net of related amortization and taxes)
—

.05

.18

(.05
)
.18

—

(.01
)
(.01
)
.04

.01

Net change in market value of investments recognized in earnings (net of taxes)
(.07
)
—

(.03
)
(.13
)
(.23
)
.08

.04

.02

(.01
)
.13

Fair value changes in embedded derivative liabilities (net of related amortization and taxes)
.12

.04

.11

—

.27

(.15
)
(.18
)
(.15
)
.07

(.41
)
Fair value changes related to agent deferred compensation plan (net of taxes)
—

.05

—

—

.06

(.03
)
(.06
)
(.03
)
.01

(.10
)
Loss related to reinsurance transaction (net of taxes)
—

—

(4.01
)
—

(4.00
)
—

—

—

—

—

Loss on extinguishment of debt (net of taxes)
—

—

—

—

—

—

(.03
)
—

—

(.04
)
Valuation allowance for deferred tax assets and other tax items
—

—

—

(.02
)
(.02
)
—

—

—

1.28

1.23

Other
.01

(.02
)
—

.01

.01

.01

—

(.01
)
(.07
)
(.06
)
Net income (loss)
$
.50

$
.61

$
(3.22
)
$
.17

$
(1.90
)
$
.32

$
.24

$
.27

$
1.84

$
2.61

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 




Page 5




CNO Financial Group, Inc.
 
 
 
 
 
 
 
 
 
 
Computation of weighted average shares outstanding
1Q18
2Q18
3Q18 (a)
4Q18
2018 (b)
1Q19
2Q19
3Q19
4Q19
2019
(000s)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic
 
 
 
 
 
 
 
 
 
 
Shares outstanding, beginning of period
166,857.9

167,354.3

164,433.1

164,634.4

166,857.9

162,201.7

159,955.2

156,768.0

152,183.5

162,201.7

Weighted average shares issued during the period:
 
 
 
 
 
 
 
 
 
 
Shares repurchased
—

(1,300.5
)
—

(549.2
)
(1,961.5
)
(1,485.6
)
(1,238.1
)
(2,585.5
)
(2,157.3
)
(6,906.9
)
Amounts related to employee benefit plans
307.6

66.7

119.7

35.6

813.8

320.9

127.3

76.6

114.9

974.0

Shares withheld for the payment of the exercise price and taxes related to employee benefit plans
(105.9
)
(22.0
)
(1.4
)
(2.7
)
(253.3
)
(88.7
)
(28.3
)
(2.1
)
(2.8
)
(228.9
)
Weighted average basic shares outstanding during the period
167,059.6

166,098.5

164,551.4

164,118.1

165,456.9

160,948.3

158,816.1

154,257.0

150,138.3

156,039.9

Basic shares outstanding, end of period
167,354.3

164,433.1

164,634.4

162,201.7

162,201.7

159,955.2

156,768.0

152,183.5

148,084.2

148,084.2

Diluted
 
 
 
 
 
 
 
 
 
 
Weighted average basic shares outstanding
167,059.6

166,098.5

164,551.4

164,118.1

165,456.9

160,948.3

158,816.1

154,257.0

150,138.3

156,039.9

Common stock equivalent shares related to:
 
 
 
 
 
 
 
 
 
 
Employee benefit plans
2,617.8

1,879.5

—

1,771.7

—

1,240.7

918.7

1,002.7

1,268.8

1,107.7

Weighted average diluted shares outstanding during the period
169,677.4

167,978.0

164,551.4

165,889.8

165,456.9

162,189.0

159,734.8

155,259.7

151,407.1

157,147.6

Diluted shares outstanding, end of period
169,705.4

165,971.0

166,823.4

163,593.2

163,593.2

161,123.2

157,662.5

153,242.8

149,580.7

149,580.7

 
 
 
 
 
 
 
 
 
 
 

(a) Equivalent common shares of 2,145.7 were not included in the diluted weighted average shares outstanding
due to the net loss recognized in 3Q18.

(b) Equivalent common shares of 2,103.7 were not included in the diluted weighted average shares outstanding
due to the net loss recognized in 2018.











Page 6





CNO Financial Group, Inc.
 
 
 
 
 
 
 
 
 
 
Bankers Life
 
 
 
 
 
 
 
 
 
 
Analysis of income before taxes (in millions)
1Q18
2Q18
3Q18
4Q18
2018
1Q19
2Q19
3Q19
4Q19
2019
 
 
 
 
 
 
 
 
 
 
 
Insurance policy income
$
365.4

$
366.1

$
364.0

$
363.0

$
1,458.5

$
365.2

$
362.5

$
364.1

$
365.5

$
1,457.3

Net investment income (loss):
 
 
 
 
 
 
 
 
 
 
   General account invested assets
196.3

200.7

200.9

206.5

804.4

189.6

204.9

196.0

191.7

782.2

   Fixed index products
(5.2
)
12.5

56.0

(104.8
)
(41.5
)
41.2

21.9

3.7

80.7

147.5

Fee revenue and other income
19.6

10.6

10.7

11.0

51.9

25.8

12.7

12.2

24.5

75.2

   Total revenues
576.1

589.9

631.6

475.7

2,273.3

621.8

602.0

576.0

662.4

2,462.2

 
 
 
 
 
 
 
 
 
 
 
Insurance policy benefits
302.2

294.3

290.9

287.9

1,175.3

289.6

290.4

292.2

285.4

1,157.6

Amounts added to policyholder account balances:
 
 
 
 
 
 
 
 
 
 
Cost of interest credited to policyholders
24.9

24.6

24.4

24.2

98.1

23.6

23.6

23.4

23.1

93.7

Cost of options to fund index credits, net of forfeitures
17.1

20.3

19.4

24.6

81.4

25.3

24.6

25.3

23.6

98.8

Market value changes credited to policyholders
(4.6
)
11.2

55.8

(105.3
)
(42.9
)
41.8

22.3

3.8

81.3

149.2

Amortization related to operations
44.4

37.7

37.3

51.9

171.3

46.5

37.2

39.0

53.6

176.3

Interest expense on investment borrowings
6.1

7.5

7.9

8.2

29.7

8.7

8.6

8.0

7.0

32.3

Commission expense and distribution fees
22.3

12.7

13.1

12.8

60.9

26.2

14.7

13.4

18.0

72.3

Other operating costs and expenses
86.2

90.9

88.4

93.4

358.9

97.0

94.2

92.0

98.1

381.3

   Total benefits and expenses
498.6

499.2

537.2

397.7

1,932.7

558.7

515.6

497.1

590.1

2,161.5

Adjusted EBIT (4)
$
77.5

$
90.7

$
94.4

$
78.0

$
340.6

$
63.1

$
86.4

$
78.9

$
72.3

$
300.7

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Health underwriting margins (in millions)
1Q18
2Q18
3Q18
4Q18
2018
1Q19
2Q19
3Q19
4Q19
2019
 
 
 
 
 
 
 
 
 
 
 
Medicare supplement:
 
 
 
 
 
 
 
 
 
 
   Earned premium
$
192.6

$
192.3

$
192.2

$
190.5

$
767.6

$
191.4

$
190.6

$
190.3

$
189.3

$
761.6

   Benefit ratio
73.3
%
73.1
%
75.6
%
76.0
%
74.5
%
72.3
%
74.0
%
74.9
%
74.2
%
73.8
%
Underwriting margin (earned premium less policy benefits)
$
51.4

$
51.7

$
46.9

$
45.8

$
195.8

$
53.1

$
49.6

$
47.8

$
48.9

$
199.4

 
 
 
 
 
 
 
 
 
 
 
Long-term care:
 
 
 
 
 
 
 
 
 
 
   Earned premium
$
64.2

$
64.0

$
63.7

$
63.8

$
255.7

$
63.7

$
63.5

$
63.7

$
63.4

$
254.3

Benefit ratio before interest income on reserves
116.3
%
119.3
%
122.5
%
117.9
%
119.0
%
120.6
%
122.1
%
123.6
%
120.4
%
121.7
%
   Interest-adjusted benefit ratio
73.9
%
76.3
%
79.0
%
74.7
%
76.0
%
77.2
%
77.5
%
78.7
%
75.0
%
77.1
%
Underwriting margin (earned premium plus interest income on reserves less policy benefits)
$
16.8

$
15.1

$
13.4

$
16.2

$
61.5

$
14.5

$
14.3

$
13.6

$
15.8

$
58.2

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


Page 7




CNO Financial Group, Inc.
 
 
 
 
 
 
 
 
 
 
Bankers Life
 
 
 
 
 
 
 
 
 
 
Average liabilities for insurance products (in millions)
1Q18
2Q18
3Q18
4Q18
2018
1Q19
2Q19
3Q19
4Q19
2019
 
 
 
 
 
 
 
 
 
 
 
Fixed index annuities
$
5,564.6

$
5,693.6

$
5,869.1

$
6,028.3

$
5,788.9

$
6,224.8

$
6,490.2

$
6,746.9

$
6,967.8

$
6,607.4

Fixed interest annuities
2,713.7

2,630.3

2,548.5

2,467.7

2,590.1

2,385.1

2,305.2

2,231.2

2,168.8

2,272.6

SPIAs and supplemental contracts:
 
 
 
 
 
 
 
 
 
 
Mortality based
152.4

148.3

145.9

144.9

147.9

143.2

140.9

138.1

135.6

139.5

Deposit based
144.9

144.9

144.3

142.5

144.1

142.2

140.9

140.3

139.9

140.8

Health:
 
 
 
 
 
 
 
 
 
 
Long-term care
1,868.1

1,893.5

1,920.0

1,946.7

1,907.1

1,972.5

1,999.0

2,025.3

2,051.3

2,012.0

Medicare supplement
324.6

311.6

307.1

314.0

314.3

316.5

308.5

303.7

310.2

309.7

Other health
58.8

59.5

60.2

60.8

59.8

61.2

62.1

63.1

63.6

62.5

Life:
 
 
 
 
 
 
 
 
 
 
   Interest sensitive
808.5

821.7

837.8

848.3

829.1

858.4

873.9

888.0

909.6

882.5

   Non-interest sensitive
1,134.7

1,151.3

1,168.1

1,185.0

1,159.8

1,201.9

1,216.7

1,230.6

1,247.2

1,224.1

Total average liabilities for insurance products, net of reinsurance ceded
$
12,770.3

$
12,854.7

$
13,001.0

$
13,138.2

$
12,941.1

$
13,305.8

$
13,537.4

$
13,767.2

$
13,994.0

$
13,651.1

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annuities - account value rollforwards (in millions)
1Q18
2Q18
3Q18
4Q18
2018
1Q19
2Q19
3Q19
4Q19
2019
 
 
 
 
 
 
 
 
 
 
 
Fixed index annuities
 
 
 
 
 
 
 
 
 
 
Balance as of the beginning of the period
$
5,410.7

$
5,549.6

$
5,740.1

$
5,930.3

$
5,410.7

$
6,176.6

$
6,346.1

$
6,548.0

$
6,726.6

$
6,176.6

Gross deposits
235.4

273.9

260.2

342.8

1,112.3

299.8

325.2

310.9

305.1

1,241.0

Withdrawals
(138.5
)
(128.5
)
(122.5
)
(136.9
)
(526.4
)
(147.0
)
(145.7
)
(143.7
)
(167.5
)
(603.9
)
Returns reinvested
42.0

45.1

52.5

40.4

180.0

16.7

22.4

11.4

49.3

99.8

Balance as of the end of the period
$
5,549.6

$
5,740.1

$
5,930.3

$
6,176.6

$
6,176.6

$
6,346.1

$
6,548.0

$
6,726.6

$
6,913.5

$
6,913.5

 
 
 
 
 
 
 
 
 
 
 
Fixed interest annuities
 
 
 
 
 
 
 
 
 
 
Balance as of the beginning of the period
$
2,752.6

$
2,671.6

$
2,585.8

$
2,507.9

$
2,752.6

$
2,424.1

$
2,342.5

$
2,264.3

$
2,194.4

$
2,424.1

Gross deposits
14.2

10.7

9.2

9.3

43.4

13.5

14.3

11.8

17.0

56.6

Withdrawals
(112.7
)
(113.6
)
(103.8
)
(109.5
)
(439.6
)
(110.7
)
(107.8
)
(96.8
)
(86.4
)
(401.7
)
Returns reinvested
17.5

17.1

16.7

16.4

67.7

15.6

15.3

15.1

14.7

60.7

Balance as of the end of the period
$
2,671.6

$
2,585.8

$
2,507.9

$
2,424.1

$
2,424.1

$
2,342.5

$
2,264.3

$
2,194.4

$
2,139.7

$
2,139.7

 
 
 
 
 
 
 
 
 
 
 
Total annuities
 
 
 
 
 
 
 
 
 
 
Balance as of the beginning of the period
$
8,163.3

$
8,221.2

$
8,325.9

$
8,438.2

$
8,163.3

$
8,600.7

$
8,688.6

$
8,812.3

$
8,921.0

$
8,600.7

Gross deposits
249.6

284.6

269.4

352.1

1,155.7

313.3

339.5

322.7

322.1

1,297.6

Withdrawals
(251.2
)
(242.1
)
(226.3
)
(246.4
)
(966.0
)
(257.7
)
(253.5
)
(240.5
)
(253.9
)
(1,005.6
)
Returns reinvested
59.5

62.2

69.2

56.8

247.7

32.3

37.7

26.5

64.0

160.5

Balance as of the end of the period
$
8,221.2

$
8,325.9

$
8,438.2

$
8,600.7

$
8,600.7

$
8,688.6

$
8,812.3

$
8,921.0

$
9,053.2

$
9,053.2

 
 
 
 
 
 
 
 
 
 
 


Page 8




CNO Financial Group, Inc.
 
 
 
 
 
 
 
 
 
 
Bankers Life
 
 
 
 
 
 
 
 
 
 
Present value of future profits (in millions)
1Q18
2Q18
3Q18
4Q18
2018
1Q19
2Q19
3Q19
4Q19
2019
 
 
 
 
 
 
 
 
 
 
 
Balance, beginning of period
$
81.1

$
77.8

$
76.8

$
88.8

$
81.1

$
86.5

$
84.3

$
70.5

$
60.4

$
86.5

Amortization related to operations
(4.7
)
(3.9
)
(3.4
)
(2.2
)
(14.2
)
(4.2
)
(3.2
)
(3.1
)
(5.6
)
(16.1
)
Amortization related to net realized investment (gains) losses
—

—

—

—

—

—

—

—

—

—

Amounts related to changes in unrealized investment gains (losses) on fixed maturities, available for sale
1.4

2.9

15.4

(0.1
)
19.6

2.0

(10.6
)
(7.0
)
3.3

(12.3
)
Balance, end of period
$
77.8

$
76.8

$
88.8

$
86.5

$
86.5

$
84.3

$
70.5

$
60.4

$
58.1

$
58.1

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Deferred acquisition costs (in millions)
1Q18
2Q18
3Q18
4Q18
2018
1Q19
2Q19
3Q19
4Q19
2019
 
 
 
 
 
 
 
 
 
 
 
Balance, beginning of period
$
606.5

$
651.6

$
792.1

$
839.4

$
606.5

$
863.2

$
830.8

$
802.1

$
684.4

$
863.2

Deferred acquisition expenses
40.2

46.2

43.1

55.9

185.4

49.7

54.5

54.2

51.6

210.0

Amortization related to operations
(39.7
)
(33.8
)
(33.9
)
(49.7
)
(157.1
)
(42.3
)
(34.0
)
(35.9
)
(48.0
)
(160.2
)
Amortization related to net realized investment (gains) losses
—

(0.4
)
0.4

0.3

0.3

(0.2
)
(0.3
)
(0.2
)
—

(0.7
)
Amortization related to fair value changes in embedded derivative liabilities
(5.3
)
(1.8
)
(4.8
)
0.2

(11.7
)
7.3

9.1

7.6

(3.8
)
20.2

Amounts related to changes in unrealized investment gains (losses) on fixed maturities, available for sale
49.9

130.3

42.5

17.1

239.8

(46.9
)
(58.0
)
(143.4
)
71.5

(176.8
)
Balance, end of period
$
651.6

$
792.1

$
839.4

$
863.2

$
863.2

$
830.8

$
802.1

$
684.4

$
755.7

$
755.7

 
 
 
 
 
 
 
 
 
 
 





Page 9




CNO Financial Group, Inc.
 
 
 
 
 
 
 
 
 
 
Washington National
 
 
 
 
 
 
 
 
 
 
Analysis of income before taxes (in millions)
1Q18
2Q18
3Q18
4Q18
2018
1Q19
2Q19
3Q19
4Q19
2019
 
 
 
 
 
 
 
 
 
 
 
Insurance policy income
$
171.0

$
171.0

$
170.8

$
174.8

$
687.6

$
173.8

$
174.7

$
174.9

$
177.4

$
700.8

Net investment income (loss):
 
 
 
 
 
 
 
 
 
 
   General account invested assets
65.4

63.4

66.9

65.4

261.1

63.6

64.3

63.2

64.4

255.5

Fixed index products
(0.4
)
0.9

3.0

(5.0
)
(1.5
)
1.6

0.5

—

2.4

4.5

Trading account income related to policyholder accounts
0.4

(0.2
)
—

—

0.2

—

—

—

—

—

Fee revenue and other income
0.2

0.3

0.2

0.2

0.9

0.2

3.3

4.4

6.3

14.2

   Total revenues
236.6

235.4

240.9

235.4

948.3

239.2

242.8

242.5

250.5

975.0

 
 
 
 
 
 
 
 
 
 
 
Insurance policy benefits
134.1

136.7

136.4

133.7

540.9

134.5

138.4

138.6

139.4

550.9

Amounts added to policyholder account balances:
 
 
 
 
 
 
 
 
 
 
Cost of interest credited to policyholders
3.1

3.2

3.3

3.2

12.8

3.3

3.2

3.1

2.8

12.4

Cost of options to fund index credits, net of forfeitures
0.9

1.3

1.1

1.3

4.6

1.3

1.0

1.0

1.2

4.5

Market value changes credited to policyholders
(0.4
)
1.3

2.7

(5.4
)
(1.8
)
1.8

0.7

(0.1
)
2.0

4.4

Amortization related to operations
14.5

14.4

14.0

12.9

55.8

14.8

14.9

14.9

13.9

58.5

Interest expense on investment borrowings
2.1

2.7

3.0

3.0

10.8

3.3

3.3

3.0

2.8

12.4

Commission expense
17.8

18.7

18.3

19.1

73.9

21.1

21.5

20.6

20.9

84.1

Other operating costs and expenses
30.2

31.7

31.8

35.7

129.4

28.6

33.9

34.6

39.5

136.6

   Total benefits and expenses
202.3

210.0

210.6

203.5

826.4

208.7

216.9

215.7

222.5

863.8

Adjusted EBIT (4)
$
34.3

$
25.4

$
30.3

$
31.9

$
121.9

$
30.5

$
25.9

$
26.8

$
28.0

$
111.2

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Health underwriting margins (in millions)
1Q18
2Q18
3Q18
4Q18
2018
1Q19
2Q19
3Q19
4Q19
2019
 
 
 
 
 
 
 
 
 
 
 
Supplemental health and other:
 
 
 
 
 
 
 
 
 
 
Earned premium
$
151.3

$
151.8

$
152.2

$
156.0

$
611.3

$
155.6

$
156.7

$
157.6

$
159.7

$
629.6

Benefit ratio before interest income on reserves
78.3
%
80.7
%
81.3
%
77.7
%
79.5
%
77.6
%
80.2
%
79.5
%
78.1
%
78.8
%
Interest-adjusted benefit ratio
54.4
%
56.6
%
56.9
%
53.8
%
55.4
%
53.4
%
56.2
%
55.4
%
54.2
%
54.8
%
Underwriting margin (earned premium plus interest income on reserves less policy benefits)
$
69.0

$
65.8

$
65.6

$
72.1

$
272.5

$
72.4

$
68.7

$
70.4

$
73.2

$
284.7

 
 
 
 
 
 
 
 
 
 
 
Medicare supplement:
 
 
 
 
 
 
 
 
 
 
Earned premium
$
12.6

$
12.1

$
11.5

$
11.4

$
47.6

$
10.8

$
10.3

$
9.8

$
9.6

$
40.5

Benefit ratio
66.5
%
74.0
%
64.3
%
70.8
%
68.9
%
66.0
%
69.8
%
75.5
%
74.9
%
71.4
%
Underwriting margin (earned premium less policy benefits)
$
4.2

$
3.2

$
4.1

$
3.3

$
14.8

$
3.7

$
3.1

$
2.4

$
2.4

$
11.6

 
 
 
 
 
 
 
 
 
 
 



Page 10



CNO Financial Group, Inc.
 
 
 
 
 
 
 
 
 
 
Washington National
 
 
 
 
 
 
 
 
 
 
Average liabilities for insurance products (in millions)
1Q18
2Q18
3Q18
4Q18
2018
1Q19
2Q19
3Q19
4Q19
2019
 
 
 
 
 
 
 
 
 
 
 
Fixed index annuities
$
295.4

$
286.5

$
279.7

$
271.6

$
283.3

$
263.2

$
256.7

$
248.4

$
239.7

$
252.0

Fixed interest annuities
93.8

91.4

88.9

87.0

90.3

85.3

82.9

80.4

78.7

81.8

SPIAs and supplemental contracts:
 
 
 
 
 
 
 
 
 
 
Mortality based
226.9

221.2

216.6

213.3

219.5

213.2

214.2

213.4

215.9

214.2

Deposit based
269.8

270.3

271.3

271.0

270.6

271.1

272.3

272.3

272.7

272.1

Separate Accounts
4.8

4.8

5.0

4.8

4.8

4.6

4.9

4.5

4.2

4.6

Health:
 
 
 
 
 
 
 
 
 
 
Supplemental health
2,814.7

2,849.8

2,885.5

2,920.0

2,867.5

2,954.4

2,989.1

3,023.0

3,056.2

3,005.7

Medicare supplement
22.1

21.0

20.1

19.6

20.7

18.9

17.8

17.3

17.5

17.9

Other health
12.5

11.9

11.5

11.2

11.8

10.8

10.2

9.8

9.7

10.1

Life:
 
 
 
 
 
 
 
 
 
 
Interest sensitive
149.5

149.4

149.7

148.4

149.2

147.9

149.0

149.5

150.1

149.1

Non-interest sensitive
174.4

166.9

163.3

161.8

166.6

160.6

160.4

163.6

165.1

162.4

Total average liabilities for insurance products, net of reinsurance ceded
$
4,063.9

$
4,073.2

$
4,091.6

$
4,108.7

$
4,084.3

$
4,130.0

$
4,157.5

$
4,182.2

$
4,209.8

$
4,169.9

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annuities - account value rollforwards (in millions)
1Q18
2Q18
3Q18
4Q18
2018
1Q19
2Q19
3Q19
4Q19
2019
 
 
 
 
 
 
 
 
 
 
 
Fixed index annuities
 
 
 
 
 
 
 
 
 
 
Balance as of the beginning of the period
$
284.0

$
276.1

$
268.7

$
264.1

$
284.0

$
257.3

$
248.6

$
239.5

$
230.3

$
257.3

Gross deposits
0.3

0.3

0.3

0.1

1.0

0.3

0.2

0.2

0.1

0.8

Withdrawals
(10.7
)
(10.9
)
(8.6
)
(8.8
)
(39.0
)
(9.9
)
(10.8
)
(10.4
)
(12.3
)
(43.4
)
Returns reinvested
2.5

3.2

3.7

1.9

11.3

0.9

1.5

1.0

1.5

4.9

Balance as of the end of the period
$
276.1

$
268.7

$
264.1

$
257.3

$
257.3

$
248.6

$
239.5

$
230.3

$
219.6

$
219.6

 
 
 
 
 
 
 
 
 
 
 
Fixed interest annuities
 
 
 
 
 
 
 
 
 
 
Balance as of the beginning of the period
$
94.2

$
92.0

$
89.5

$
86.5

$
94.2

$
85.2

$
83.3

$
80.9

$
78.6

$
85.2

Gross deposits
0.1

0.1

—

0.1

0.3

0.1

—

—

0.1

0.2

Withdrawals
(3.4
)
(3.7
)
(3.8
)
(2.1
)
(13.0
)
(2.7
)
(3.1
)
(3.0
)
(1.6
)
(10.4
)
Returns reinvested
1.1

1.1

0.8

0.7

3.7

0.7

0.7

0.7

0.7

2.8

Balance as of the end of the period
$
92.0

$
89.5

$
86.5

$
85.2

$
85.2

$
83.3

$
80.9

$
78.6

$
77.8

$
77.8

 
 
 
 
 
 
 
 
 
 
 
Total annuities
 
 
 
 
 
 
 
 
 
 
Balance as of the beginning of the period
$
378.2

$
368.1

$
358.2

$
350.6

$
378.2

$
342.5

$
331.9

$
320.4

$
308.9

$
342.5

Gross deposits
0.4

0.4

0.3

0.2

1.3

0.4

0.2

0.2

0.2

1.0

Withdrawals
(14.1
)
(14.6
)
(12.4
)
(10.9
)
(52.0
)
(12.6
)
(13.9
)
(13.4
)
(13.9
)
(53.8
)
Returns reinvested
3.6

4.3

4.5

2.6

15.0

1.6

2.2

1.7

2.2

7.7

Balance as of the end of the period
$
368.1

$
358.2

$
350.6

$
342.5

$
342.5

$
331.9

$
320.4

$
308.9

$
297.4

$
297.4

 
 
 
 
 
 
 
 
 
 
 





Page 11



CNO Financial Group, Inc.
 
 
 
 
 
 
 
 
 
 
Washington National
 
 
 
 
 
 
 
 
 
 
Present value of future profits (in millions)
1Q18
2Q18
3Q18
4Q18
2018
1Q19
2Q19
3Q19
4Q19
2019
 
 
 
 
 
 
 
 
 
 
 
Balance, beginning of period
$
243.7

$
238.9

$
236.1

$
231.4

$
243.7

$
226.9

$
220.3

$
215.8

$
211.4

$
226.9

Amortization related to operations
(5.2
)
(4.9
)
(4.7
)
(4.6
)
(19.4
)
(4.5
)
(4.6
)
(4.3
)
(4.3
)
(17.7
)
Amounts related to changes in unrealized investment gains (losses) on fixed maturities, available for sale
0.4

2.1

—

0.1

2.6

(2.1
)
0.1

(0.1
)
—

(2.1
)
Balance, end of period
$
238.9

$
236.1

$
231.4

$
226.9

$
226.9

$
220.3

$
215.8

$
211.4

$
207.1

$
207.1

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Deferred acquisition costs (in millions)
1Q18
2Q18
3Q18
4Q18
2018
1Q19
2Q19
3Q19
4Q19
2019
 
 
 
 
 
 
 
 
 
 
 
Balance, beginning of period
$
310.8

$
320.2

$
331.6

$
336.0

$
310.8

$
342.7

$
338.4

$
339.9

$
341.0

$
342.7

Deferred acquisition expenses
14.2

14.3

13.5

14.1

56.1

13.3

13.7

13.5

14.2

54.7

Amortization related to operations
(9.3
)
(9.5
)
(9.3
)
(8.3
)
(36.4
)
(10.3
)
(10.3
)
(10.6
)
(9.6
)
(40.8
)
Amortization related to net realized investment (gains) losses
—

—

0.1

—

0.1

—

0.1

—

—

0.1

Amortization related to fair value changes in embedded derivative liabilities
(0.5
)
(0.3
)
(0.5
)
0.2

(1.1
)
0.5

0.6

0.3

0.3

1.7

Amounts related to changes in unrealized investment gains (losses) on fixed maturities, available for sale
5.0

6.9

0.6

0.7

13.2

(7.8
)
(2.6
)
(2.1
)
(0.3
)
(12.8
)
Balance, end of period
$
320.2

$
331.6

$
336.0

$
342.7

$
342.7

$
338.4

$
339.9

$
341.0

$
345.6

$
345.6

 
 
 
 
 
 
 
 
 
 
 


Page 12



CNO Financial Group, Inc.
 
 
 
 
 
 
 
 
 
 
Colonial Penn
 
 
 
 
 
 
 
 
 
 
Analysis of income (loss) before taxes (in millions)
1Q18
2Q18
3Q18
4Q18
2018
1Q19
2Q19
3Q19
4Q19
2019
 
 
 
 
 
 
 
 
 
 
 
Insurance policy income
$
74.1

$
74.5

$
75.1

$
74.9

$
298.6

$
76.7

$
77.6

$
77.5

$
77.0

$
308.8

Net investment income on general account invested assets
11.0

11.3

11.1

11.2

44.6

10.7

10.8

10.4

10.3

42.2

Fee revenue and other income
0.5

0.4

0.5

0.4

1.8

0.5

0.4

0.3

0.3

1.5

   Total revenues
85.6

86.2

86.7

86.5

345.0

87.9

88.8

88.2

87.6

352.5

 
 
 
 
 
 
 
 
 
 
 
Insurance policy benefits
56.5

50.5

49.6

50.0

206.6

56.1

52.3

50.6

50.1

209.1

Amounts added to annuity and interest-sensitive life product account balances
0.2

0.1

0.2

0.1

0.6

0.1

0.2

0.1

0.2

0.6

Amortization related to operations
4.6

4.1

4.2

4.9

17.8

4.5

3.6

5.4

5.1

18.6

Interest expense on investment borrowings
0.3

0.4

0.3

0.4

1.4

0.4

0.4

0.4

0.3

1.5

Commission expense
0.3

0.3

0.4

0.4

1.4

0.3

0.4

0.3

0.3

1.3

Other operating costs and expenses
25.2

25.4

25.9

25.9

102.4

27.9

26.1

27.7

25.4

107.1

   Total benefits and expenses
87.1

80.8

80.6

81.7

330.2

89.3

83.0

84.5

81.4

338.2

Adjusted EBIT (4)
$
(1.5
)
$
5.4

$
6.1

$
4.8

$
14.8

$
(1.4
)
$
5.8

$
3.7

$
6.2

$
14.3

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Average liabilities for insurance products (in millions)
1Q18
2Q18
3Q18
4Q18
2018
1Q19
2Q19
3Q19
4Q19
2019
 
 
 
 
 
 
 
 
 
 
 
SPIAs - mortality based
$
71.8

$
70.1

$
68.8

$
67.7

$
69.6

$
67.6

$
68.9

$
68.9

$
64.8

$
67.5

Health:
 
 
 
 
 
 
 
 
 
 
Medicare supplement
5.3

5.1

4.9

4.6

5.0

4.5

4.2

4.0

3.9

4.2

Other health
3.9

3.8

3.6

3.5

3.7

3.4

3.3

3.2

3.0

3.2

Life:
 
 
 
 
 
 
 
 
 
 
   Interest sensitive
15.2

15.0

14.7

13.8

14.7

12.6

12.1

11.7

11.5

12.0

   Non-interest sensitive
732.7

736.0

741.7

748.9

739.8

756.9

751.6

744.9

751.3

751.2

Total average liabilities for insurance products, net of reinsurance ceded
$
828.9

$
830.0

$
833.7

$
838.5

$
832.8

$
845.0

$
840.1

$
832.7

$
834.5

$
838.1

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Present value of future profits (in millions)
1Q18
2Q18
3Q18
4Q18
2018
1Q19
2Q19
3Q19
4Q19
2019
 
 
 
 
 
 
 
 
 
 
 
Balance, beginning of period
$
34.8

$
33.7

$
32.6

$
31.4

$
34.8

$
30.2

$
29.0

$
13.0

$
12.2

$
30.2

   Amortization related to operations
(1.1
)
(1.1
)
(1.2
)
(1.2
)
(4.6
)
(1.2
)
(0.4
)
(0.8
)
(0.5
)
(2.9
)
Amounts related to changes in unrealized investment gains (losses) on fixed maturities, available for sale
—

—

—

—

—

—

—

—

—

—

Other (a)
—

—

—

—

—

—

(15.6
)
—

(1.5
)
(17.1
)
Balance, end of period
$
33.7

$
32.6

$
31.4

$
30.2

$
30.2

$
29.0

$
13.0

$
12.2

$
10.2

$
10.2

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Deferred acquisition costs (in millions)
1Q18
2Q18
3Q18
4Q18
2018
1Q19
2Q19
3Q19
4Q19
2019
 
 
 
 
 
 
 
 
 
 
 
Balance, beginning of period
$
109.5

$
111.8

$
113.7

$
115.7

$
109.5

$
116.6

$
119.9

$
111.2

$
113.4

$
116.6

Deferred acquisition expenses
5.8

4.9

5.0

4.6

20.3

6.6

5.2

6.8

5.4

24.0

Amortization related to operations
(3.5
)
(3.0
)
(3.0
)
(3.7
)
(13.2
)
(3.3
)
(3.2
)
(4.6
)
(4.6
)
(15.7
)
Other (a)
—

—

—

—

—

—

(10.7
)
—

—

(10.7
)
Balance, end of period
$
111.8

$
113.7

$
115.7

$
116.6

$
116.6

$
119.9

$
111.2

$
113.4

$
114.2

$
114.2

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

(a) These adjustments were recognized in conjunction with the conversion to a new valuation software system for the
non-interest sensitive life insurance business in this segment. The adjustments had no impact on net income since
comparable reductions in insurance policy liabilities were also recognized in conjunction with the conversion.


Page 13



Colonial Penn Segment Adjusted EBIT
 
 
 
 
 
 
 
 
 
 
Summarized by Inforce and New Business (6)
 
 
 
 
 
 
 
 
 
 
(in millions)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
CNO Financial Group, Inc.
 
 
 
 
 
 
 
 
 
 
Adjusted EBIT from Inforce Business
1Q18
2Q18
3Q18
4Q18
2018
1Q19
2Q19
3Q19
4Q19
2019
 
 
 
 
 
 
 
 
 
 
 
Revenues
 
 
 
 
 
 
 
 
 
 
Insurance policy income
$
62.5

$
62.9

$
63.3

$
62.9

$
251.6

$
64.0

$
64.3

$
64.5

$
64.4

$
257.2

Net investment income
11.0

11.3

11.1

11.2

44.6

10.7

10.8

10.4

10.3

42.2

Fee revenue and other income
0.5

0.4

0.5

0.4

1.8

0.5

0.4

0.3

0.3

1.5

Total revenues
74.0

74.6

74.9

74.5

298.0

75.2

75.5

75.2

75.0

300.9

 
 
 
 
 
 
 
 
 
 
 
Benefits and expenses
 
 
 
 
 
 
 
 
 
 
Insurance policy benefits
49.7

43.5

42.6

42.8

178.6

48.2

44.1

42.5

42.4

177.2

Interest expense
0.3

0.4

0.3

0.4

1.4

0.4

0.4

0.4

0.3

1.5

Amortization
4.4

4.0

4.0

4.8

17.2

4.1

3.2

5.0

4.7

17.0

Other operating costs and expenses
8.5

8.6

9.2

8.7

35.0

8.3

8.1

8.2

8.8

33.4

Total benefits and expenses
62.9

56.5

56.1

56.7

232.2

61.0

55.8

56.1

56.2

229.1

Adjusted EBIT from Inforce Business
$
11.1

$
18.1

$
18.8

$
17.8

$
65.8

$
14.2

$
19.7

$
19.1

$
18.8

$
71.8

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Adjusted EBIT from New Business
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenues
 
 
 
 
 
 
 
 
 
 
Insurance policy income
$
11.6

$
11.6

$
11.8

$
12.0

$
47.0

$
12.7

$
13.3

$
13.0

$
12.6

$
51.6

Net investment income
—

—

—

—

—

—

—

—

—

—

Fee revenue and other income
—

—

—

—

—

—

—

—

—

—

Total revenues
11.6

11.6

11.8

12.0

47.0

12.7

13.3

13.0

12.6

51.6

 
 
 
 
 
 
 
 
 
 
 
Benefits and expenses
 
 
 
 
 
 
 
 
 
 
Insurance policy benefits
7.0

7.1

7.2

7.3

28.6

8.0

8.4

8.2

7.9

32.5

Interest expense
—

—

—

—

—

—

—

—

—

—

Amortization
0.2

0.1

0.2

0.1

0.6

0.4

0.4

0.4

0.4

1.6

Other operating costs and expenses
17.0

17.1

17.1

17.6

68.8

19.9

18.4

19.8

16.9

75.0

Total benefits and expenses
24.2

24.3

24.5

25.0

98.0

28.3

27.2

28.4

25.2

109.1

Adjusted EBIT from New Business
$
(12.6
)
$
(12.7
)
$
(12.7
)
$
(13.0
)
$
(51.0
)
$
(15.6
)
$
(13.9
)
$
(15.4
)
$
(12.6
)
$
(57.5
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Adjusted EBIT from Inforce and New Business
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenues
 
 
 
 
 
 
 
 
 
 
Insurance policy income
$
74.1

$
74.5

$
75.1

$
74.9

$
298.6

$
76.7

$
77.6

$
77.5

$
77.0

$
308.8

Net investment income
11.0

11.3

11.1

11.2

44.6

10.7

10.8

10.4

10.3

42.2

Fee revenue and other income
0.5

0.4

0.5

0.4

1.8

0.5

0.4

0.3

0.3

1.5

Total revenues
85.6

86.2

86.7

86.5

345.0

87.9

88.8

88.2

87.6

352.5

 
 
 
 
 
 
 
 
 
 
 
Benefits and expenses
 
 
 
 
 
 
 
 
 
 
Insurance policy benefits
56.7

50.6

49.8

50.1

207.2

56.2

52.5

50.7

50.3

209.7

Interest expense
0.3

0.4

0.3

0.4

1.4

0.4

0.4

0.4

0.3

1.5

Amortization
4.6

4.1

4.2

4.9

17.8

4.5

3.6

5.4

5.1

18.6

Other operating costs and expenses
25.5

25.7

26.3

26.3

103.8

28.2

26.5

28.0

25.7

108.4

Total benefits and expenses
87.1

80.8

80.6

81.7

330.2

89.3

83.0

84.5

81.4

338.2

Adjusted EBIT from Inforce and New Business
$
(1.5
)
$
5.4

$
6.1

$
4.8

$
14.8

$
(1.4
)
$
5.8

$
3.7

$
6.2

$
14.3

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


Page 14



CNO Financial Group, Inc.
 
 
 
 
 
 
 
 
 
 
Long-term care in run-off
 
 
 
 
 
 
 
 
 
 
Analysis of income (loss) before taxes (in millions)
1Q18
2Q18
3Q18
4Q18
2018
1Q19
2Q19
3Q19
4Q19
2019
 
 
 
 
 
 
 
 
 
 
 
Insurance policy income
$
49.4

$
48.2

$
47.0

$
3.8

$
148.4

$
3.6

$
3.5

$
3.5

$
3.3

$
13.9

Net investment income on general account invested assets
55.2

54.9

54.1

8.5

172.7

8.2

8.4

8.3

8.1

33.0

   Total revenues
104.6

103.1

101.1

12.3

321.1

11.8

11.9

11.8

11.4

46.9

 
 
 
 
 
 
 
 
 
 
 
Insurance policy benefits
83.5

85.1

91.3

11.4

271.3

8.7

8.1

7.6

8.1

32.5

Amortization related to operations
2.6

2.3

2.1

—

7.0

—

—

—

—

—

Commission expense
0.4

0.4

0.4

0.1

1.3

0.1

0.1

0.1

0.1

0.4

Other operating costs and expenses
6.1

6.8

5.2

0.5

18.6

0.5

0.5

0.5

0.5

2.0

   Total benefits and expenses
92.6

94.6

99.0

12.0

298.2

9.3

8.7

8.2

8.7

34.9

Adjusted EBIT (4)
$
12.0

$
8.5

$
2.1

$
0.3

$
22.9

$
2.5

$
3.2

$
3.6

$
2.7

$
12.0

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Average liabilities for insurance products (in millions)
1Q18
2Q18
3Q18
4Q18
2018
1Q19
2Q19
3Q19
4Q19
2019
Health:
 
 
 
 
 
 
 
 
 
 
Long-term care
$
3,750.3

$
3,599.3

$
3,548.2

$
532.9

$
2,857.7

$
540.1

$
563.0

$
586.0

$
591.4

$
570.1

Total average liabilities for insurance products
$
3,750.3

$
3,599.3

$
3,548.2

$
532.9

$
2,857.7

$
540.1

$
563.0

$
586.0

$
591.4

$
570.1

 
 
 
 
 
 
 
 
 
 
 



CNO Financial Group, Inc.
 
 
 
 
 
 
 
 
 
 
Corporate Operations
 
 
 
 
 
 
 
 
 
 
Analysis of loss before taxes (in millions)
1Q18
2Q18
3Q18
4Q18
2018
1Q19
2Q19
3Q19
4Q19
2019
 
 
 
 
 
 
 
 
 
 
 
Net investment income (loss):
 
 
 
 
 
 
 
 
 
 
   General investment portfolio
$
2.2

$
1.3

$
2.0

$
1.1

$
6.6

$
1.5

$
0.8

$
1.6

$
1.1

$
5.0

   Other special-purpose portfolios
(1.0
)
2.7

6.0

(19.9
)
(12.2
)
20.2

6.8

2.7

1.7

31.4

Fee revenue and other income
1.8

1.5

1.6

1.8

6.7

1.6

1.5

1.2

33.2

37.5

Other operating costs and expenses
(18.5
)
(19.5
)
(21.4
)
(12.7
)
(72.1
)
(22.5
)
(21.1
)
(16.7
)
(31.1
)
(91.4
)
Corporate operations, excluding corporate interest expense
(15.5
)
(14.0
)
(11.8
)
(29.7
)
(71.0
)
0.8

(12.0
)
(11.2
)
4.9

(17.5
)
Interest expense on corporate debt
(11.9
)
(11.9
)
(12.1
)
(12.1
)
(48.0
)
(12.1
)
(12.6
)
(13.9
)
(13.8
)
(52.4
)
Operating loss before taxes
$
(27.4
)
$
(25.9
)
$
(23.9
)
$
(41.8
)
$
(119.0
)
$
(11.3
)
$
(24.6
)
$
(25.1
)
$
(8.9
)
$
(69.9
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 







Page 15



CNO Financial Group, Inc.
 
 
 
 
 
 
 
 
 
 
Bankers Life
 
 
 
 
 
 
 
 
 
 
Premiums collected on insurance products (in millions)
1Q18
2Q18
3Q18
4Q18
2018
1Q19
2Q19
3Q19
4Q19
2019
 
 
 
 
 
 
 
 
 
 
 
Annuities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fixed index (first-year)
$
235.4

$
273.9

$
260.2

$
342.5

$
1,112.0

$
300.0

$
325.1

$
311.0

$
305.1

$
1,241.2

 
 
 
 
 
 
 
 
 
 
 
Other fixed interest (first-year)
14.5

12.1

9.0

10.2

45.8

14.2

14.3

12.9

17.7

59.1

Other fixed interest (renewal)
1.5

1.0

1.3

1.6

5.4

1.1

1.6

1.1

1.3

5.1

  Subtotal - other fixed interest annuities
16.0

13.1

10.3

11.8

51.2

15.3

15.9

14.0

19.0

64.2

 
 
 
 
 
 
 
 
 
 
 
      Total annuities
251.4

287.0

270.5

354.3

1,163.2

315.3

341.0

325.0

324.1

1,305.4

 
 
 
 
 
 
 
 
 
 
 
Health
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Medicare supplement (first-year)
15.4

15.5

15.2

15.8

61.9

14.3

14.9

14.9

16.1

60.2

Medicare supplement (renewal)
172.9

161.3

164.2

174.0

672.4

169.7

161.7

164.3

178.0

673.7

  Subtotal - Medicare supplement
188.3

176.8

179.4

189.8

734.3

184.0

176.6

179.2

194.1

733.9

 
 
 
 
 
 
 
 
 
 
 
Long-term care (first-year)
3.7

3.7

3.9

4.3

15.6

4.4

4.7

4.8

5.0

18.9

Long-term care (renewal)
61.1

60.0

59.1

59.3

239.5

59.4

58.4

58.6

60.3

236.7

  Subtotal - long-term care
64.8

63.7

63.0

63.6

255.1

63.8

63.1

63.4

65.3

255.6

 
 
 
 
 
 
 
 
 
 
 
Supplemental health (first-year)
1.1

1.1

1.0

1.2

4.4

1.1

1.1

1.1

1.2

4.5

Supplemental health (renewal)
4.7

4.8

4.8

4.9

19.2

4.9

5.1

5.1

5.3

20.4

  Subtotal - supplemental health
5.8

5.9

5.8

6.1

23.6

6.0

6.2

6.2

6.5

24.9

 
 
 
 
 
 
 
 
 
 
 
Other health (first-year)
0.2

0.2

0.2

0.2

0.8

0.2

0.1

0.2

0.3

0.8

Other health (renewal)
1.3

1.3

1.3

1.3

5.2

1.3

1.3

1.2

1.2

5.0

  Subtotal - other health
1.5

1.5

1.5

1.5

6.0

1.5

1.4

1.4

1.5

5.8

 
 
 
 
 
 
 
 
 
 
 
    Total health
260.4

247.9

249.7

261.0

1,019.0

255.3

247.3

250.2

267.4

1,020.2

 
 
 
 
 
 
 
 
 
 
 
Life insurance
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Traditional (first-year)
18.5

19.0

17.2

16.9

71.6

16.3

15.9

16.9

19.3

68.4

Traditional (renewal)
55.7

55.9

55.7

56.3

223.6

55.9

56.0

56.3

56.9

225.1

  Subtotal - traditional
74.2

74.9

72.9

73.2

295.2

72.2

71.9

73.2

76.2

293.5

 
 
 
 
 
 
 
 
 
 
 
Interest-sensitive (first-year)
10.7

12.8

12.2

13.3

49.0

9.6

12.8

11.5

10.8

44.7

Interest-sensitive (renewal)
30.3

30.8

30.4

30.3

121.8

31.5

32.2

32.9

32.6

129.2

  Subtotal - interest-sensitive
41.0

43.6

42.6

43.6

170.8

41.1

45.0

44.4

43.4

173.9

 
 
 
 
 
 
 
 
 
 
 
    Total life insurance
115.2

118.5

115.5

116.8

466.0

113.3

116.9

117.6

119.6

467.4

 
 
 
 
 
 
 
 
 
 
 
Collections on insurance products
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total first-year premium collections on insurance products
299.5

338.3

318.9

404.4

1,361.1

360.1

388.9

373.3

375.5

1,497.8

Total renewal premium collections on insurance products
327.5

315.1

316.8

327.7

1,287.1

323.8

316.3

319.5

335.6

1,295.2

 
 
 
 
 
 
 
 
 
 
 
    Total collections on insurance products
$
627.0

$
653.4

$
635.7

$
732.1

$
2,648.2

$
683.9

$
705.2

$
692.8

$
711.1

$
2,793.0

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 



Page 16



CNO Financial Group, Inc.
 
 
 
 
 
 
 
 
 
 
Washington National
 
 
 
 
 
 
 
 
 
 
Premiums collected on insurance products (in millions)
1Q18
2Q18
3Q18
4Q18
2018
1Q19
2Q19
3Q19
4Q19
2019
 
 
 
 
 
 
 
 
 
 
 
Health
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Medicare supplement (renewal)
$
12.5

$
11.5

$
10.9

$
11.4

$
46.3

$
10.6

$
10.1

$
9.7

$
10.5

$
40.9

 
 
 
 
 
 
 
 
 
 
 
Supplemental health (first-year)
18.3

17.7

17.1

17.1

70.2

16.6

16.7

16.8

17.8

67.9

Supplemental health (renewal)
136.9

134.4

131.1

138.7

541.1

140.0

140.2

140.0

142.6

562.8

  Subtotal - supplemental health
155.2

152.1

148.2

155.8

611.3

156.6

156.9

156.8

160.4

630.7

 
 
 
 
 
 
 
 
 
 
 
Other health (first-year)
0.1

0.1

—

—

0.2

0.1

0.1

—

0.1

0.3

Other health (renewal)
0.4

0.3

0.4

0.4

1.5

0.3

0.3

0.4

0.3

1.3

  Subtotal - other health
0.5

0.4

0.4

0.4

1.7

0.4

0.4

0.4

0.4

1.6

 
 
 
 
 
 
 
 
 
 
 
    Total health
168.2

164.0

159.5

167.6

659.3

167.6

167.4

166.9

171.3

673.2

 
 
 
 
 
 
 
 
 
 
 
Life insurance
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Traditional (first-year)
0.1

0.2

0.1

0.2

0.6

0.1

0.2

0.2

0.1

0.6

Traditional (renewal)
2.5

2.4

2.3

2.3

9.5

2.4

2.2

2.2

2.2

9.0

  Subtotal - traditional
2.6

2.6

2.4

2.5

10.1

2.5

2.4

2.4

2.3

9.6

 
 
 
 
 
 
 
 
 
 
 
Interest-sensitive (first-year)
1.2

1.4

1.3

1.5

5.4

1.8

2.0

2.0

2.3

8.1

Interest-sensitive (renewal)
3.8

4.4

4.0

4.5

16.7

4.5

4.9

4.6

5.1

19.1

  Subtotal - interest-sensitive
5.0

5.8

5.3

6.0

22.1

6.3

6.9

6.6

7.4

27.2

 
 
 
 
 
 
 
 
 
 
 
    Total life insurance
7.6

8.4

7.7

8.5

32.2

8.8

9.3

9.0

9.7

36.8

 
 
 
 
 
 
 
 
 
 
 
Annuities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fixed index (first-year)
—

—

—

0.1

0.1

—

—

—

—

—

Fixed index (renewal)
0.3

0.4

0.2

0.1

1.0

0.3

0.2

0.2

0.1

0.8

  Subtotal - fixed index annuities
0.3

0.4

0.2

0.2

1.1

0.3

0.2

0.2

0.1

0.8

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other fixed interest (renewal)
0.1

—

0.1

—

0.2

0.1

—

—

0.1

0.2

 
 
 
 
 
 
 
 
 
 
 
      Total annuities
0.4

0.4

0.3

0.2

1.3

0.4

0.2

0.2

0.2

1.0

 
 
 
 
 
 
 
 
 
 
 
Collections on insurance products
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total first-year premium collections on insurance products
19.7

19.4

18.5

18.9

76.5

18.6

19.0

19.0

20.3

76.9

Total renewal premium collections on insurance products
156.5

153.4

149.0

157.4

616.3

158.2

157.9

157.1

160.9

634.1

 
 
 
 
 
 
 
 
 
 
 
    Total collections on insurance products
$
176.2

$
172.8

$
167.5

$
176.3

$
692.8

$
176.8

$
176.9

$
176.1

$
181.2

$
711.0

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 



Page 17



CNO Financial Group, Inc.
 
 
 
 
 
 
 
 
 
 
Colonial Penn
 
 
 
 
 
 
 
 
 
 
Premiums collected on insurance products (in millions)
1Q18
2Q18
3Q18
4Q18
2018
1Q19
2Q19
3Q19
4Q19
2019
 
 
 
 
 
 
 
 
 
 
 
Life insurance
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Traditional (first-year)
$
11.9

$
11.3

$
11.7

$
12.0

$
46.9

$
12.8

$
13.1

$
13.0

$
12.8

$
51.7

Traditional (renewal)
62.9

62.0

61.8

62.8

249.5

63.9

63.2

63.8

64.2

255.1

  Subtotal - traditional
74.8

73.3

73.5

74.8

296.4

76.7

76.3

76.8

77.0

306.8

 
 
 
 
 
 
 
 
 
 
 
Interest-sensitive (all renewal)
—

0.1

0.1

—

0.2

0.1

—

0.1

—

0.2

 
 
 
 
 
 
 
 
 
 
 
    Total life insurance
74.8

73.4

73.6

74.8

296.6

76.8

76.3

76.9

77.0

307.0

 
 
 
 
 
 
 
 
 
 
 
Health (all renewal)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Medicare supplement
0.4

0.4

0.4

0.3

1.5

0.3

0.4

0.2

0.3

1.2

 
 
 
 
 
 
 
 
 
 
 
Other health
0.1

—

—

0.1

0.2

0.1

—

—

—

0.1

 
 
 
 
 
 
 
 
 
 
 
    Total health
0.5

0.4

0.4

0.4

1.7

0.4

0.4

0.2

0.3

1.3

 
 
 
 
 
 
 
 
 
 
 
Collections on insurance products
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total first-year premium collections on insurance products
11.9

11.3

11.7

12.0

46.9

12.8

13.1

13.0

12.8

51.7

Total renewal premium collections on insurance products
63.4

62.5

62.3

63.2

251.4

64.4

63.6

64.1

64.5

256.6

 
 
 
 
 
 
 
 
 
 
 
    Total collections on insurance products
$
75.3

$
73.8

$
74.0

$
75.2

$
298.3

$
77.2

$
76.7

$
77.1

$
77.3

$
308.3

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 



CNO Financial Group, Inc.
 
 
 
 
 
 
 
 
 
 
Long-term care in run-off
 
 
 
 
 
 
 
 
 
 
Premiums collected on insurance products (in millions)
1Q18
2Q18
3Q18
4Q18
2018
1Q19
2Q19
3Q19
4Q19
2019
 
 
 
 
 
 
 
 
 
 
 
Long-term care (renewal)
$
49.6

$
47.6

$
44.9

$
3.7

$
145.8

$
3.6

$
3.4

$
3.3

$
3.2

$
13.5

 
 
 
 
 
 
 
 
 
 
 
    Total collections on insurance products
$
49.6

$
47.6

$
44.9

$
3.7

$
145.8

$
3.6

$
3.4

$
3.3

$
3.2

$
13.5

 
 
 
 
 
 
 
 
 
 
 



Page 18



CNO Financial Group, Inc.
 
 
 
 
 
 
 
 
 
 
First-year collected premiums (in millions)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Bankers Life
1Q18
2Q18
3Q18
4Q18
2018
1Q19
2Q19
3Q19
4Q19
2019
 
 
 
 
 
 
 
 
 
 
 
Medicare supplement
$
15.4

$
15.5

$
15.2

$
15.8

$
61.9

$
14.3

$
14.9

$
14.9

$
16.1

$
60.2

Long-term care
3.7

3.7

3.9

4.3

15.6

4.4

4.7

4.8

5.0

18.9

Supplemental health and other health
1.3

1.3

1.2

1.4

5.2

1.3

1.2

1.3

1.5

5.3

Life
29.2

31.8

29.4

30.2

120.6

25.9

28.7

28.4

30.1

113.1

Annuity
249.9

286.0

269.2

352.7

1,157.8

314.2

339.4

323.9

322.8

1,300.3

   Subtotal Bankers Life
299.5

338.3

318.9

404.4

1,361.1

360.1

388.9

373.3

375.5

1,497.8

 
 
 
 
 
 
 
 
 
 
 
Washington National
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Supplemental health and other health
18.4

17.8

17.1

17.1

70.4

16.7

16.8

16.8

17.9

68.2

Life
1.3

1.6

1.4

1.7

6.0

1.9

2.2

2.2

2.4

8.7

Annuity
—

—

—

0.1

0.1

—

—

—

—

—

   Subtotal Washington National
19.7

19.4

18.5

18.9

76.5

18.6

19.0

19.0

20.3

76.9

 
 
 
 
 
 
 
 
 
 
 
Colonial Penn
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Life
11.9

11.3

11.7

12.0

46.9

12.8

13.1

13.0

12.8

51.7

 
 
 
 
 
 
 
 
 
 
 
Total first-year collected premiums
$
331.1

$
369.0

$
349.1

$
435.3

$
1,484.5

$
391.5

$
421.0

$
405.3

$
408.6

$
1,626.4

 
 
 
 
 
 
 
 
 
 
 

CNO Financial Group, Inc.
 
 
 
 
 
 
 
 
 
 
Life and Health New Annualized Premiums ("NAP") (in millions)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Bankers Life
1Q18
2Q18
3Q18
4Q18
2018
1Q19
2Q19
3Q19
4Q19
2019
 
 
 
 
 
 
 
 
 
 
 
Medicare supplement
$
12.9

$
14.3

$
13.9

$
17.9

$
59.0

$
12.4

$
14.5

$
14.2

$
17.2

$
58.3

Long-term care
5.0

5.3

6.5

7.4

24.2

5.8

6.4

6.4

8.0

26.6

Supplemental health and other health
1.3

1.4

1.1

2.0

5.8

1.2

1.4

1.4

2.2

6.2

Life
16.5

17.9

15.8

14.9

65.1

14.1

17.1

15.3

14.6

61.1

   Subtotal Bankers Life
35.7

38.9

37.3

42.2

154.1

33.5

39.4

37.3

42.0

152.2

 
 
 
 
 
 
 
 
 
 
 
Washington National
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Supplemental health
22.0

23.9

22.8

26.0

94.7

20.7

23.5

24.7

35.3

104.2

Life
1.8

2.1

2.5

4.1

10.5

3.2

2.7

2.8

4.4

13.1

   Subtotal Washington National
23.8

26.0

25.3

30.1

105.2

23.9

26.2

27.5

39.7

117.3

 
 
 
 
 
 
 
 
 
 
 
Colonial Penn
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Life
18.6

16.9

19.1

17.3

71.9

22.4

19.6

19.2

15.9

77.1

 
 
 
 
 
 
 
 
 
 
 
Total NAP
$
78.1

$
81.8

$
81.7

$
89.6

$
331.2

$
79.8

$
85.2

$
84.0

$
97.6

$
346.6

 
 
 
 
 
 
 
 
 
 
 



Page 19



CNO Financial Group, Inc.
 
 
 
 
 
 
 
 
 
 
Statutory information - consolidated basis (7) (in millions)
1Q18
2Q18
3Q18
4Q18
2018
1Q19
2Q19
3Q19
4Q19 (a)(b)
2019 (a)(b)
 
 
 
 
 
 
 
 
 
 
 
Net gain (loss) from operations before interest expense and federal income taxes
$
65.1

$
80.5

$
(491.1
)
$
21.4

$
(324.1
)
$
97.8

$
86.0

$
62.1

$
66.2

$
312.1

Interest expense on surplus debentures held by parent company
12.0

12.2

21.7

12.3

58.2

12.6

12.3

22.7

12.3

59.9

 
 
 
 
 
 
 
 
 
 
 
Net gain (loss) from operations before federal income taxes
53.1

68.3

(512.8
)
9.1

(382.3
)
85.2

73.7

39.4

53.9

252.2

Federal income tax expense (benefit)
1.6

(2.5
)
(23.9
)
(20.4
)
(45.2
)
1.9

(5.4
)
(4.5
)
(47.8
)
(55.8
)
 
 
 
 
 
 
 
 
 
 
 
Net gain (loss) from operations before net realized capital gains (losses)
51.5

70.8

(488.9
)
29.5

(337.1
)
83.3

79.1

43.9

101.7

308.0

Net realized capital gains (losses)
3.7

2.7

41.3

(3.9
)
43.8

(9.9
)
(3.6
)
(0.1
)
(3.0
)
(16.6
)
 
 
 
 
 
 
 
 
 
 
 
Net income (loss)
$
55.2

$
73.5

$
(447.6
)
$
25.6

$
(293.3
)
$
73.4

$
75.5

$
43.8

$
98.7

$
291.4

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Capital and surplus
$
1,918.9

$
1,952.0

$
1,781.6

$
1,652.8

$
1,652.8

$
1,717.4

$
1,698.5

$
1,695.3

$
1,696.6

$
1,696.6

Asset valuation reserve (AVR)
264.7

258.4

283.6

233.3

233.3

248.0

254.5

261.0

295.9

295.9

 
 
 
 
 
 
 
 
 
 
 
  Capital, surplus and AVR
2,183.6

2,210.4

2,065.2

1,886.1

1,886.1

1,965.4

1,953.0

1,956.3

1,992.5

1,992.5

 
 
 
 
 
 
 
 
 
 
 
Interest maintenance reserve (IMR)
479.4

492.0

439.8

425.0

425.0

418.3

415.4

415.1

420.1

420.1

 
 
 
 
 
 
 
 
 
 
 
  Total statutory capital, surplus, AVR & IMR
$
2,663.0

$
2,702.4

$
2,505.0

$
2,311.1

$
2,311.1

$
2,383.7

$
2,368.4

$
2,371.4

$
2,412.6

$
2,412.6

 
 
 
 
 
 
 
 
 
 
 
Risk-based capital ratio
427
%
444
%
452
%
393
%
393
%
416
%
409
%
405
%
408
%
408
%
 
 
 
 
 
 
 
 
 
 
 



(a)  Such amounts are preliminary as the statutory basis financial statements of our insurance subsidiaries for 4Q19 will
be filed with the respective insurance regulators on or about February 28, 2020.

(b) The federal income tax benefit recognized in such periods reflects a $46.0 million tax sharing payment due from the holding
company that will be returned to the holding company in the form of a dividend. There is no capital and surplus impact related
to these transactions.























Page 20



Notes

(1) Excludes accumulated other comprehensive income. 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.

(2) Shareholders' equity divided by common shares outstanding.

(3) Book value per diluted share reflects the potential dilution that could occur if outstanding stock options were exercised and restricted stock and performance units were vested. The dilution from options, restricted shares and performance units is calculated using the treasury stock method. Under this method, we assume the proceeds from the exercise of the options (or the unrecognized compensation expense with respect to restricted stock and performance units) will be used to purchase shares of our common stock at the closing market price on the last day of the period.

(4) Management believes that an analysis of earnings before net realized investment gains (losses) from sales and impairments, net change in market value of investments recognized in earnings, fair value changes due to fluctuations in the interest rates used to discount embedded derivative liabilities related to our fixed index annuities, fair value changes related to the agent deferred compensation plan, loss related to reinsurance transaction, loss on extinguishment of debt, other non-operating items, corporate interest expense and taxes (“Adjusted 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.

(5) Management believes that an analysis of Net income applicable to common stock before: (i) net realized investment gains or losses from sales and impairments, net of related amortization and taxes; (ii) net change in market value of investments recognized in earnings, net of taxes; (iii) fair value changes due to fluctuations in the interest rates used to discount embedded derivative liabilities related to our fixed index annuities, net of related amortization and taxes; (iv) fair value changes related to the agent deferred compensation plan, net of taxes; (v) loss related to reinsurance transaction, net of taxes; (vi) loss on extinguishment of debt, net of taxes; (vii) changes in the valuation allowance for deferred tax assets and other tax items; and (viii) other non-operating items consisting primarily of earnings attributable to variable interest entities, net of taxes (“Net operating income,” a non-GAAP financial measure) is important to evaluate the financial performance of the company, and is a key measure commonly used in the life insurance industry. Management uses this measure to evaluate performance because the items excluded from net operating income can be affected by events that are unrelated to the company's underlying fundamentals.

(6) Management believes that an analysis of Adjusted EBIT for Colonial Penn, separated between inforce and new business provides increased clarity for this segment as the vast majority of the costs to generate new business in this segment are not deferrable and Adjusted EBIT will fluctuate based on management's decisions on how much marketing costs to incur in each period. Adjusted 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. Adjusted EBIT from inforce 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 inforce business is based on estimates, which we believe are reasonable.

(7)
Based on statutory accounting practices prescribed or permitted by regulatory authorities for CNO Financial's insurance subsidiaries after appropriate elimination of intercompany accounts among such subsidiaries. Such accounting practices differ from GAAP.




Page 21

Exhibit 99.3 Fourth Quarter 2019 Financial and operating results for the period ended December 31, 2019 February 11, 2020 Unless otherwise specified, comparisons in this presentation are between 4Q18 and 4Q19. CNO Financial Group | Fourth Quarter 2019 Earnings | February 11, 2020 1

 
Forward-Looking Statements Certain statements made in this presentation should be considered forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. These include statements about future results of operations and capital plans. We caution investors that these forward-looking statements are not guarantees of future performance, and actual results may differ materially. Investors should consider the important risks and uncertainties that may cause actual results to differ, including those included in our press release issued on February 11, 2020, our Quarterly Reports on Form 10-Q, our Annual Report on Form 10-K and other filings we make with the Securities and Exchange Commission. We assume no obligation to update this presentation, which speaks as of today’s date. Non-GAAP Measures This presentation contains the following financial measures that differ from the comparable measures under Generally Accepted Accounting Principles (GAAP): operating earnings measures; book value, excluding accumulated other comprehensive income (loss) per share; operating return measures; earnings before net realized investment gains (losses) from sales and impairments, net change in market value of investments recognized in earnings, fair value changes in embedded derivative liabilities, fair value changes related to the agent deferred compensation plan, loss on extinguishment of debt, loss related to reinsurance transaction, other non-operating items, corporate interest expense and taxes; and debt to capital ratios, excluding accumulated other comprehensive income (loss). Reconciliations between those non-GAAP measures and the comparable GAAP measures are included in the Appendix, or on the page such measure is presented. While management believes these measures are useful to enhance understanding and comparability of our financial results, these non-GAAP measures should not be considered substitutes for the most directly comparable GAAP measures. Additional information concerning non-GAAP measures is included in our periodic filings with the Securities and Exchange Commission that are available in the “Investors – SEC Filings” section of CNO’s website, CNOinc.com. CNO Financial Group | Fourth Quarter 2019 Earnings | February 11, 2020 2

 
CNO Financial Group | Fourth Quarter 2019 Earnings | February 11, 2020 3

 
2019 Year in Review Strong production and operating discipline enhancing shareholder value • Growth initiatives continue to bear fruit; all growth scorecard metrics up for the full year Strong • Solid new product launch activity Operational • Underwriting performance stable; all health benefit ratios within or Performance better than provided guidance • Second consecutive year of record Worksite sales • Leveraged and broadened DTC capabilities • Returned $319 million to shareholders; $252 million in share buybacks; increased buyback authorization by $500 million Building on • Received investment grade credit ratings from S&P and Fitch • 13% increase in BV per diluted share (excl. AOCI)1 due to tax Track Record planning strategy and strong operating performance of Execution • Acquired Web Benefits Design (“WBD”) • Entered into strategic technology partnership expected to deliver $20 million in savings over 5 years 1 A non-GAAP measure. See the Appendix for a reconciliation to the corresponding GAAP measure. CNO Financial Group | Fourth Quarter 2019 Earnings | February 11, 2020 4

 
Quarter in Review Solid performance fueled by disciplined growth • Life and health sales up 9% Strong • Annuity collected premiums down 9% reflecting pricing discipline; account values up 5% Operational • Insurance policy income up 1% Performance • All health benefit ratios within or better than provided guidance • Fee income up $20 million • Tax strategy enables full use of expiring NOLs ($194 million); drove a $1.28 increase in net income per share Building on • Operating income1 per share up 4% excluding significant items • Returned $91.4 million to shareholders; $75 million in share Track Record buybacks of Execution • BV per diluted share (excl. AOCI)1 of $22.09 up 9% from $20.30 at 9/30 • Operating ROE1, excluding significant items, of 10.4% 1 A non-GAAP measure. See the Appendix for a reconciliation to the corresponding GAAP measure. CNO Financial Group | Fourth Quarter 2019 Earnings | February 11, 2020 5

 
Growth Scorecard Three of five metrics up Q/Q; all five up for full year 2018 2019 % Change ($ millions) 4Q TY 1Q 2Q 3Q 4Q TY Q/Q TY New Annualized Premium 1 Life Insurance $36.3 $147.5 $39.7 $39.4 $37.3 $34.9 $151.3 -3.9% 2.6% Health Insurance 53.3 183.7 40.1 45.8 46.7 62.7 195.3 17.6% 6.3% Total Life & Health Insurance $89.6 $331.2 $79.8 $85.2 $84.0 $97.6 $346.6 8.9% 4.6% Collected Premiums Bankers Life $732.1 $2,648.2 $683.9 $705.2 $692.8 $711.1 $2,793.0 -2.9% 5.5% Washington National 176.3 692.8 176.8 176.9 176.1 181.2 711.0 2.8% 2.6% Colonial Penn 75.2 298.3 77.2 76.7 77.1 77.3 308.3 2.8% 3.4% Sub-total 983.6 3,639.3 937.9 958.8 946.0 969.6 3,812.3 -1.4% 4.8% LTC in run-off 3.7 145.8 3.6 3.4 3.3 3.2 13.5 -13.5% nm DriveGrowth Total CNO $987.3 $3,785.1 $941.5 $962.2 $949.3 $972.8 $3,825.8 -1.5% 1.1% Annuity Collected Premiums Bankers Life $354.3 $1,163.2 $315.3 $341.0 $325.0 $324.1 $1,305.4 -8.5% 12.2% Client Assets in Brokerage and Advisory 2 Bankers Life $1,104.9 $1,104.9 $1,234.4 $1,303.0 $1,362.7 $1,515.0 $1,515.0 37.1% 37.1% Fee Revenue $10.6 $49.8 $25.4 $15.6 $16.3 $30.2 $87.5 185.0% 75.7% the Right the Expand to Expand 1 Measured as 100% of new term life and health annualized premiums and 10% of single premium whole life deposits. 2 Client assets include cash and securities in brokerage and managed advisory accounts. CNO Financial Group | Fourth Quarter 2019 Earnings | February 11, 2020 6

 
Segment Update Growth in earnings and continued momentum with initiatives Key Initiatives Fourth Quarter Highlights • EBIT excluding significant items1 up 2% despite NII headwinds Reinvigorate growth • Life and Health NAP flat; third party policies up 20% • Fee revenue up 123% • Annuity account value up 5% to $9.1 billion Expand to the right • Total client assets up 37% at BD/RIA to $1.5 billion • FA count up 7%; 14% of agent force is dually licensed Reshape the agent • Sixth consecutive quarter of growing producing agent force and optimize count; up 6% vs +4% in 4Q18 productivity • Ongoing agent retention and productivity improvements 1 A non-GAAP measure. See the Appendix for a reconciliation to the corresponding GAAP measure. CNO Financial Group | Fourth Quarter 2019 Earnings | February 11, 2020 7

 
Segment Update Record overall sales and sharp improvement in consumer market Key Initiatives Fourth Quarter Highlights Maintain growth • New sales record; overall NAP up 32% • Life NAP up 7%; Life collected premiums up 14% momentum • Consumer division sales up 57% Advance worksite • Worksite NAP up 7% against +38% in 4Q18 • Worksite producing agent count up 14% capabilities • WBD integration in line with expectations Expand • Continued expansion into underpenetrated territories geographically • Geographic expansion drove 3% of total 4Q NAP Enhance product • Product diversification initiatives comprised 8% of total portfolio 4Q NAP CNO Financial Group | Fourth Quarter 2019 Earnings | February 11, 2020 8

 
Segment Update Record full year production; leveraging DTC platform Key Initiatives Fourth Quarter Highlights • Best full year sales on record (up 7%); 4Q NAP down 8% Continue due to lower marketing spend sales growth • First-year collected premiums up 7%; Total collected premiums up 3% Improve sales • Continue to invest in web/digital capabilities productivity; • Technology enhancements supporting productivity gains • Continued diversification of consumer contact points: 2.4 expand web/digital million unique website visitors (up 20%) and 1.2 million capabilities telesales interactions in 2019; 5,000 webchats per month Enhance product • Piloting third party products in DTC channel portfolio; extend • Leveraging DTC expertise to support other channels DTC capabilities CNO Financial Group | Fourth Quarter 2019 Earnings | February 11, 2020 9

 
Excess Capital Allocation Strategy Disciplined and opportunistic approach to maximize shareholder value Organic investments to sustain and grow the core businesses Return capital to shareholders • $75 million in share repurchases in 4Q; $252 million YTD • Dividend payout ratio targeted at 20-25% • $532 million left under current repurchase authorization Opportunistic transactions • Highly selective M&A to expand product offerings or enhance distribution CNO Financial Group | Fourth Quarter 2019 Earnings | February 11, 2020 10

 
Financial Highlights Net operating income per share1 up 4%; tax strategy created $194 million in shareholder value Fourth Quarter 2019 Net Operating Income • Net operating income per diluted share1 of $0.52, up 44% from $0.36 in 4Q18 ($ millions, except where noted) • Excluding significant items, operating income per share up 4% $1.83 $1.85 $1.83 $1.80 • Lower NII from change in market yields, lower Net Operating Income Per Share1 prepayment income, and 1Q19 up-in-quality 1 repositioning drove decline of $0.08 per share Net Operating Income Per Share • YTD operating income per share of $1.80, down 2%2 Adjusted for Ceded LTC Business2 and • Actuarial review complete; lowered ultimate new money rate Excluding Significant $0.52 Items $0.36 $0.47 • Weighted average share count down 9% $0.45 • Operating ROE1, excluding significant items, of 10.4% 4Q18 4Q19 FY182 FY19 • Tax strategy enhances shareholder value; drives 9% increase in BV per diluted share (excl. AOCI)1, generates $194 million Net Operating $59.8 $78.6 $303.1 $290.0 in income, $1.29 per share Income1 • Generated $327 million in gross full year FCF; $287 million net Net Operating Income Adj. for Ceded LTC $74.9 $70.7 $303.2 $282.1 • Holding company cash and investments of $187 million Business2 and Excl. Significant Items • Estimated consolidated RBC ratio of 408% 3 • Statutory operating income of $56 million; Statutory capital Weighted Average and surplus of $1.7 billion Shares Outstanding 165.9 151.4 165.5 157.1 (in millions) 1 A non-GAAP measure. See the Appendix for a reconciliation to the corresponding GAAP measure. 2 YTD 2018 operating income per share adj. to remove the earnings from the ceded LTC business and excl. significant items. 3 Excludes $46 million income tax benefit to be received from the holding company that will be returned to the holding company in the form of a dividend. There was no impact on capital and surplus. CNO Financial Group | Fourth Quarter 2019 Earnings | February 11, 2020 11

 
Segment Results Stable underwriting margins despite NII headwinds 1 Segment EBIT Excluding Significant Items Segment Highlights ($ millions) 4Q18 1Q19 2Q19 3Q19 4Q19 • Lower investment income impacted all segments Bankers Life $81.1 $86.4 $83.1 $63.1 $78.9 Washington • Bankers Life results reflect improved benefit National $29.7 $30.5 $25.9 $26.8 $27.2 ratios and fee income offset by $12.7 million in investment headwinds Colonial $4.8 $5.8 $3.7 $6.2 Penn ($1.4) • Washington National results impacted by MS run-off block and favorable ISL results in prior LTC in $0.3 $2.5 $3.2 $3.6 $2.7 period run-off 1 $0.8 • Colonial Penn Adjusted EBIT reflects solid Corporate ($15.3) ($12.0) ($11.2) ($15.1) in-force growth (up 6% to $19 million) • Full year Adjusted EBIT of $14 million; Total CNO $100.6 $95.5 $109.3 $101.8 $104.1 full year In-Force EBIT of $72 million, up 7% • LTC in run-off benefited from favorable Colonial Penn $17.8 $14.2 $19.7 $19.1 $18.8 In-Force1 underwriting margin; expect breakeven performance going forward 1 A non-GAAP measure. See the Appendix for a reconciliation to the corresponding GAAP measure. CNO Financial Group | Fourth Quarter 2019 Earnings | February 11, 2020 12

 
Health Margins All benefit ratios within or better than guidance Bankers Life Medicare Bankers Life Long-term Care Washington National Supplement Benefit Ratio IABR1,2 Supplemental Health IABR1 $190 $191 $191 $190 $189 $156 $156 $157 $158 $160 76.0% 74.0% 74.9% 72.3% 74.2% $64 $64 $64 $64 $63 56.2% 55.4% 78.7% 53.8% 53.4% 54.2% 74.7% 77.2% 77.5% 75.0% 4Q18 1Q19 2Q19 3Q19 4Q19 4Q18 1Q19 2Q19 3Q19 4Q19 4Q18 1Q19 2Q19 3Q19 4Q19 Earned Premium ($ millions) Earned Premium ($ millions) Earned Premium ($ millions) Reported Benefit Ratio Reported IABR Reported IABR • Benefit ratio of 74.2% • IABR1,2 of 75.0% • IABR1 of 54.2% • 1% (+/-) = $1.9 million pre-tax • 1% (+/-) = $0.6 million pre-tax • 1% (+/-) = $1.6 million pre-tax • 2019 benefit ratio guidance of • 2019 IABR1,2 guidance of 74-79% • 2019 IABR1 guidance of 55-58% 73-77% 1 Interest-adjusted benefit ratio (IABR); a non-GAAP measure. Refer to the Appendix for the corresponding GAAP measure. 2 Retained LTC business only. CNO Financial Group | Fourth Quarter 2019 Earnings | February 11, 2020 13

 
Investment Results Consistent performance reflecting stable allocation in low rate environment Average Invested Assets and Cash Quarter Highlights $22,588 • New money rate reflects conservative positioning $21,832 $22,058 $22,201 $22,382 • Sequential decline largely reflects lack of $290.4 $286.7 new alternatives investments Net $270.6 $275.9 $272.0 Investment Income • Sequential book yield decline of 6 bps in line with expectations • Alternatives results in line with expectations ($ millions) 4Q18 1Q19 2Q19 3Q19 4Q19 • Prepayment income $6.3 million lower YoY New Money Rate1 4.77% 4.38% 4.58% 4.66% 4.08% Book Yield2 5.24% 5.15% 5.08% 5.03% 4.97% • Credit performance remains solid Earned Yield3 5.40% 5.02% 5.30% 5.11% 4.97% • No significant allocation changes in 4Q Pre-Pay/Call/Make- $10.9 $2.5 $6.6 $3.0 $4.6 whole Income Alternative • BBBs comprise 39% of fixed maturity $13.0 $5.5 $17.1 $17.7 $12.9 Investment Income portfolio vs. 45% in 4Q18 Impairments $0.5 $2.2 - $3.4 $6.8 1 New money rate is the book yield on fixed maturity investments acquired in the period, excluding 3 Earned yield is the investment income earned during the period divided by the weighted average book value of assets purchased for FHLB matchbook program. the investment portfolio, excluding amounts related to assets held in the FHLB matchbook program. 2 Book yield on fixed maturity investments, excluding assets held in the FHLB matchbook program. CNO Financial Group | Fourth Quarter 2019 Earnings | February 11, 2020 14

 
Committed to Long-Term Shareholder Value Creation Continued progress on strategic initiatives Leverage diverse Extend depth and distribution Effectively deploy Expand to Enhance customer breadth of product channels and excess capital the right experience offerings unique product combination Growth in sales, earnings, FCF, and ROE Striking the right balance between growth and profitability CNO Financial Group | Fourth Quarter 2019 Earnings | February 11, 2020 15

 
Questions and Answers CNO Financial Group | Fourth Quarter 2019 Earnings | February 11, 2020 16

 
Appendix 1: Quarter in Review Strong Operational Performance • Broker-Dealer/Registered Investment Advisor Slide 18 • Agent Count Slide 19 Building on Strong Track Record of Execution • Bankers Life Retained LTC Insurance Slides 20-21 • Portfolio Composition Slide 22 CNO Financial Group | Fourth Quarter 2019 Earnings | February 11, 2020 17

 
Broker-Dealer/Registered Investment Advisor Account value up 37% YoY; over $1.5 billion in client assets 2018 2019 ($ millions) 4Q 1Q 2Q 3Q 4Q Net New Client Assets in Brokerage -$1.1 -$3.0 $5.1 $13.4 $17.4 Brokerage and Advisory1 Advisory 13.2 35.7 33.2 29.9 45.4 Total $12.1 $32.7 $38.3 $43.3 $62.8 Client Assets in Brokerage and Brokerage $794.1 $861.6 $886.0 $913.7 $982.9 Advisory1 at end of period Advisory 310.8 372.8 417.0 449.0 532.1 Total $1,104.9 $1,234.4 $1,303.0 $1,362.7 $1,515.0 1 Client assets include cash and securities in brokerage and managed advisory accounts. Net new client assets includes total inflows of cash and securities into brokerage and managed advisory accounts less outflows. Inflows include interest and dividends and exclude changes due to market fluctuations. Bankers Life is the marketing brand of various affiliated companies of CNO Financial Group including, Bankers Life and Casualty Company, Bankers Life Securities, Inc., and Bankers Life Advisory Services, Inc. Non-affiliated insurance products are offered through Bankers Life General Agency, Inc. (dba BL General Insurance Agency, Inc., AK, AL, CA, NV, PA). Agents who are financial advisors are registered with Bankers Life Securities, Inc. Securities and variable annuity products and services are offered by Bankers Life Securities, Inc. Member FINRA/SIPC, (dba BL Securities, Inc., AL, GA, IA, IL, MI, NV, PA). Advisory products and services are offered by Bankers Life Advisory Services, Inc. SEC Registered Investment Adviser (dba BL Advisory Services, Inc., AL, GA, IA, MT, NV, PA). Home Office: 111 East Wacker Drive, Suite 1900, Chicago, IL 60601 CNO Financial Group | Fourth Quarter 2019 Earnings | February 11, 2020 18

 
Agent Counts Bankers Life producing agent count up for sixth consecutive quarter 20182019 % Change Bankers Life 4Q 1Q 2Q 3Q 4Q Q/Q Total Quarterly Average Producing Agents1,3 4,177 4,125 4,294 4,270 4,417 5.7% Quarterly Average Financial Advisors2,3 560 583 595 596 596 6.4% Washington National Total Quarterly Average Producing Agents1,3 730 682 726 729 745 2.1% 1 Producing Agents are agents that have submitted at least one policy in the month. 2 Financial advisors are agents who are licensed to sell certain securities brokerage products and services. 3 Quarterly average agent and advisor counts represent the average of the last 3 months. CNO Financial Group | Fourth Quarter 2019 Earnings | February 11, 2020 19

 
Bankers Life Retained Long-Term Care Insurance Retained book characterized by limited benefits, shorter duration periods % of Policies by Benefit Period Key LTC Data (As of 12/31/2019) 2% GAAP Reserves $1.92B <= 1 Yr 4% Statutory Reserves $1.97B Between 1 and 4 Policies In-Force 187,679 Yrs 37% Average Attained Age 74 years 57% Greater Than 4 but Not Life Avg. Daily Benefit $175 Life % Policies w/ Inflation Rider 26.1% Average Benefit Period1 1.6 years 1 Not including policies with lifetime benefits. CNO Financial Group | Fourth Quarter 2019 Earnings | February 11, 2020 20

 
Bankers Life Retained Long-Term Care Insurance Highly-differentiated in-force block; prudently managed • New sales (~$25 million annually) focused on short duration products • 98% of new sales for policies with 2 years or less in benefits • Average benefit period of 11 months • New business 25% reinsured since 2008 • Reserve assumptions informed by historical experience • No morbidity improvement • No mortality improvement • Minimal future rate increases • Ultimate new money rate lowered to target 4.00% 10-year Treasury rate • Favorable economic profile • 2019 Loss Recognition Testing margin increased to $251 million or ~13.3% of Net GAAP Liabilities • Statutory reserves ~$50 million higher than GAAP reserves • Total LTC is just 13% of overall CNO reserves • Potential adverse impact from severe stress scenarios is significantly reduced CNO Financial Group | Fourth Quarter 2019 Earnings | February 11, 2020 21

 
Portfolio Composition Conservative allocation; 1Q19 up-in-quality repositioning $25 billion of Invested Assets Fixed Maturity Securities by Ratings Mortgage HY Corporates, (Fair Value as of 12/31/2019) Loans, 6.6% 2.5% CMO, 4.2% CMBS, 8.0% Municipals, 8.9% NAIC 2, 38.6% ABS, 10.3% NAIC 1, 57.7% Govts/Agency, IG Corporates, 1.2% 49.0% CLO, 1.6% Equities, 0.2% Other Invested NAIC 3, 2.9% Assets, 2.1% Alternatives, 2.3% NAIC 4, 0.8% Policy Loans, 0.5% NAIC 5 & NAIC 6, General Approach Cash, 2.6% 0.0% • Positioned for stable performance across credit • Low impairments through multiple cycles cycles • Lower than average allocation to most higher risk • Emphasizing quality categories – all carefully calibrated CNO Financial Group | Fourth Quarter 2019 Earnings | February 11, 2020 22

 
Appendix 2: Financial Exhibits • Holding Company Liquidity Slide 24 • Tax Asset Summary Slide 25 • Non-GAAP Financial Measures Slides 26-42 CNO Financial Group | Fourth Quarter 2019 Earnings | February 11, 2020 23

 
2019 Holding Company Liquidity ($ millions) 4Q19 FY19 Cash and Investments Balance - Beginning$ 260.4 $ 220.4 Sources Dividends from Insurance Subsidiaries 16.0 186.3 Dividends from Non-insurance Subsidiaries - 8.0 Management Fees 28.1 115.5 Surplus Debenture Interest 12.3 59.9 Earnings on Corporate Investments 2.2 13.6 Gross Proceeds from New Debt - 500.0 Other 1.6 20.9 Total Sources 60.2 904.2 Uses Share Repurchases 73.2 250.5 Interest Expense 25.5 48.3 Common Stock Dividends 16.4 66.9 Debt Repayments - 425.0 Acquisition - 66.7 Holding Company Expenses & Other 18.8 80.7 Total Uses 133.9 938.1 Mark-to-market Changes in Investment Balances - 0.2 Cash and Investments Balance - December 31, 2019$ 186.7 $ 186.7 CNO Financial Group | Fourth Quarter 2019 Earnings | February 11, 2020 24

 
Tax Asset Summary Loss Carryforwards Details ($ millions) $532 • Total estimated economic value of NOLs of $406 million @ 10% discount rate (~$2.71 Life on per share basis) $110 • Life NOLs are expected to offset 80% of life taxable income until fully utilized. Non-life NOLs are expected to offset 100% of non- Non-Life life taxable income and 35% of the $422 remaining life taxable income not offset by life NOLs through 2023. Loss Carryforwards (1) CNO Financial Group | Fourth Quarter 2019 Earnings | February 11, 2020 1 Excludes $10 million related to state operating loss carryforwards. 25

 
4Q18 Significant Items The table below summarizes the financial impact of significant items on our 4Q18 net operating income. Management believes that identifying the impact of these items enhances the understanding of our operating results (dollars in millions). Three months ended December 31, 2018 Excluding significant Actual results Significant items items Net Operating Income: Bankers Life $ 78.0 $ 3.1 (1) $ 81.1 Washington National 31.9 (2.2) (1) 29.7 Colonial Penn 4.8 - 4.8 Long-term care in run-off 0.3 - 0.3 Adjusted EBIT from business segments 115.0 0.9 115.9 Corporate Operations, excluding corporate interest expense (29.7) 14.4 (2) (15.3) Adjusted EBIT 85.3 15.3 100.6 Corporate interest expense (12.1) - (12.1) Operating earnings before tax 73.2 15.3 88.5 Tax expense on operating income 13.4 0.2 13.6 Net operating income (3) $ 59.8 $ 15.1 $ 74.9 Net operating income per diluted share (3) $ 0.36 $ 0.09 $ 0.45 (1) Adjustments arising from our comprehensive annual actuarial review of assumptions including $3.1 million of unfavorable impacts in the Bankers Life segment and $2.2 million of favorable impacts in the Washington National segment. (2) $14.4 million unfavorable impact of current market conditions on the value of investments backing our Company-owned life insurance (COLI) used as a vehicle to fund Bankers Life's agent deferred compensation plan. Changes in the value of COLI investments are not subject to income taxes. (3) A non-GAAP measure. See pages 28 and 31 for a reconciliation to the corresponding GAAP measure. CNO Financial Group | Fourth Quarter 2019 Earnings | February 11, 2020 26

 
4Q19 Significant Items The table below summarizes the financial impact of significant items on our 4Q19 net operating income. Management believes that identifying the impact of these items enhances the understanding of our operating results (dollars in millions). Three months ended December 31, 2019 Excluding significant Actual results Significant items items Net Operating Income: Bankers Life $ 72.3 $ 10.8 (1) $ 83.1 Washington National 28.0 (0.8) (1) 27.2 Colonial Penn 6.2 - 6.2 Long-term care in run-off 2.7 - 2.7 Adjusted EBIT from business segments 109.2 10.0 119.2 Corporate Operations, excluding corporate interest expense 4.9 (20.0) (2) (15.1) Adjusted EBIT 114.1 (10.0) 104.1 Corporate interest expense (13.8) - (13.8) Operating earnings before tax 100.3 (10.0) 90.3 Tax expense on operating income 21.6 (2.1) 19.5 Net operating income (3) $ 78.7 $ (7.9) $ 70.8 Net operating income per diluted share (3) $ 0.52 $ (0.05) $ 0.47 (1) Adjustments arising from our comprehensive annual actuarial review of assumptions including $10.8 million of unfavorable impacts in the Bankers Life segment and $0.8 million of favorable impacts in the Washington National segment. (2) $20.0 million of the net favorable impact from legal and regulatory matters. (3) A non-GAAP measure. See pages 28 and 31 for a reconciliation to the corresponding GAAP measure. CNO Financial Group | Fourth Quarter 2019 Earnings | February 11, 2020 27

 
Quarterly Earnings ($ millions) 4Q18 1Q19 2Q19 3Q19 4Q19 Bankers Life$ 78.0 $ 63.1 $ 86.4 $ 78.9 $ 72.3 Washington National 31.9 30.5 25.9 26.8 28.0 Colonial Penn 4.8 (1.4) 5.8 3.7 6.2 Long-term care in run-off 0.3 2.5 3.2 3.6 2.7 Adjusted EBIT from business segments 115.0 94.7 121.3 113.0 109.2 Corporate operations, excluding interest expense (29.7) 0.8 (12.0) (11.2) 4.8 Adjusted EBIT* 85.3 95.5 109.3 101.8 114.1 Corporate interest expense (12.1) (12.1) (12.6) (13.9) (13.8) Operating earnings before taxes 73.2 83.4 96.7 87.9 100.3 Tax expense on period income 13.4 17.6 20.3 18.7 21.7 Net operating income 59.8 65.8 76.4 69.2 78.6 Net realized investment gains (losses) from sales and impairments, net of related amortization (10.5) (0.7) (1.7) (2.6) 7.1 Net change in market value of investments recognized in earnings (27.5) 16.6 6.8 4.7 (2.6) Fair value changes in embedded derivative liabilities, net of related amortization (0.8) (29.6) (35.9) (29.3) 13.4 Fair value changes related to the agent deferred compensation plan 0.9 (5.3) (11.6) (6.0) 2.5 Loss on extinguishment of debt - - (7.3) - - Other 1.8 1.2 0.7 (1.2) (13.3) Non-operating income (loss) before taxes (36.1) (17.8) (49.0) (34.4) 7.1 Income tax expense (benefit): On non-operating income (loss) (7.6) (3.8) (10.2) (7.2) 1.4 Valuation allowance for deferred tax assets and other tax items 3.0 - - - (193.7) Net non-operating income (loss) (31.5) (14.0) (38.8) (27.2) 199.4 Net income (loss) $ 28.3 $ 51.8 $ 37.6 $ 42.0 $ 278.0 *Management believes that an analysis of earnings before net realized investment gains (losses) from sales and impairments, net change in market value of investments recognized in earnings, fair value changes in embedded derivative liabilities, fair value changes related to the agent deferred compensation plan, loss on extinguishment of debt, loss related to reinsurance transaction, other non-operating items, corporate interest expense and taxes (“Adjusted EBIT,” a non-GAAP financial measure) provides a clearer comparison of the operating results of the company quarter-over-quarter because it excludes: (1) net realized investment gains (losses) from sales and impairments; (2) net change in market value of investments recognized in earnings; (3) fair value changes due to fluctuations in the interest rates used to discount embedded derivative liabilities related to our fixed index annuities that are unrelated to the company’s underlying fundamentals; (4) loss on extinguishment of debt; (5) fair value changes related to the agent deferred compensation plan; (6) loss related to reinsurance transaction; (7) charges in the valuation allowance for deferred tax assets and other tax items; and (8) other non-operating items consisting primarily of earnings attributable to variable interest entities. The table above provides a reconciliation of Adjusted EBIT to net income. CNO Financial Group | Fourth Quarter 2019 Earnings | February 11, 2020 28

 
Colonial Penn Segment Adjusted EBIT Summarized by In-Force and New Business An analysis of Adjusted EBIT for Colonial Penn, separated between in-force and new business, provides increased clarity for this segment as the vast majority of the costs to generate new business in this segment are not deferrable and Adjusted EBIT will fluctuate based on management's decisions on how much marketing costs to incur in each period. Adjusted 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. Adjusted 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 (dollars in millions): Adjusted EBIT from Inforce Business Adjusted EBIT from New Business Adjusted EBIT from Inforce and New Business 4Q18 1Q19 2Q19 3Q19 4Q19 4Q18 1Q19 2Q19 3Q19 4Q19 4Q18 1Q19 2Q19 3Q19 4Q19 Revenues Insurance policy income$ 62.9 $ 64.0 $ 64.3 $ 64.5 $ 64.4 $ 12.0 $ 12.7 $ 13.3 $ 13.0 $ 12.6 $ 74.9 $ 76.7 $ 77.6 $ 77.5 $ 77.0 Net investment income 11.2 10.7 10.8 10.4 10.3 - - - - - 11.2 10.7 10.8 10.4 10.3 Fee revenue and other income 0.4 0.5 0.4 0.3 0.3 - - - - - 0.4 0.5 0.4 0.3 0.3 Total revenues 74.5 75.2 75.5 75.2 75.0 12.0 12.7 13.3 13.0 12.6 86.5 87.9 88.8 88.2 87.6 Benefits and expenses Insurance policy benefits 42.8 48.2 44.1 42.5 42.4 7.3 8.0 8.4 8.2 7.9 50.1 56.2 52.5 50.7 50.3 Interest expense 0.4 0.4 0.4 0.4 0.3 - - - - - 0.4 0.4 0.4 0.4 0.3 Amortization 4.8 4.1 3.2 5.0 4.7 0.1 0.4 0.4 0.4 0.4 4.9 4.5 3.6 5.4 5.1 Other operating costs and expenses 8.7 8.3 8.1 8.2 8.8 17.6 19.9 18.4 19.8 16.9 26.3 28.2 26.5 28.0 25.7 Total benefits and expenses 56.7 61.0 55.8 56.1 56.2 25.0 28.3 27.2 28.4 25.2 81.7 89.3 83.0 84.5 81.4 Adjusted EBIT from Inforce Business$ 17.8 $ 14.2 $ 19.7 $ 19.1 $ 18.8 $ (13.0) $ (15.6) $ (13.9) $ (15.4) $ (12.6) $ 4.8 $ (1.4) $ 5.8 $ 3.7 $ 6.2 CNO Financial Group | Fourth Quarter 2019 Earnings | February 11, 2020 29

 
Information Related to Certain Non-GAAP Financial Measures The following provides additional information regarding certain non-GAAP measures used in this presentation. A non-GAAP measure is a numerical measure of a company’s performance, financial position, or cash flows that excludes or includes amounts that are normally excluded or included in the most directly comparable measure calculated and presented in accordance with GAAP. While management believes these measures are useful to enhance understanding and comparability of our financial results, these non-GAAP measures should not be considered as substitutes for the most directly comparable GAAP measures. Additional information concerning non-GAAP measures 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. Operating earnings measures Management believes that an analysis of net income applicable to common stock before net realized investment gains or losses from sales and impairments, net change in market value of investments recognized in earnings, fair value changes due to fluctuations in the interest rates used to discount embedded derivative liabilities related to our fixed index annuities, fair value changes related to the agent deferred compensation plan, loss on extinguishment of debt, loss related to reinsurance transaction, changes in the valuation allowance for deferred tax assets and other tax items and other non-operating items consisting primarily of earnings attributable to variable interest entities (“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. CNO Financial Group | Fourth Quarter 2019 Earnings | February 11, 2020 30

 
Information Related to Certain Non-GAAP Financial Measures A reconciliation of net income (loss) applicable to common stock to net operating income (and related per-share amounts) is as follows (dollars in millions, except per-share amounts): 4Q18 1Q19 2Q19 3Q19 4Q19 Net income (loss) applicable to common stock $ 28.3 $ 51.8 $ 37.6 $ 42.0 $ 278.0 Non-operating items: Net realized investment (gains) losses from sales and impairments, net of related amortization 10.5 0.7 1.7 2.6 (7.1) Net change in market value of investments recognized in earnings 27.5 (16.6) (6.8) (4.7) 2.6 Fair value changes in embedded derivative liabilities, net of related amortization 0.8 29.6 35.9 29.3 (13.4) Fair value changes related to the agent deferred compensation plan (0.9) 5.3 11.6 6.0 (2.5) Loss on extinguishment of debt - - 7.3 - - Loss related to reinsurance transaction - - - - - Other (1.8) (1.2) (0.7) 1.2 13.3 Non-operating (income) loss before taxes 36.1 17.8 49.0 34.4 (7.1) Income tax (expense) benefit: On non-operating (income) loss 7.6 3.8 10.2 7.2 (1.4) Valuation allowance for deferred tax assets and other tax items (3.0) - - - 193.7 Net non-operating (income) loss 31.5 14.0 38.8 27.2 (199.4) Net operating income (a non-GAAP financial measure) $ 59.8 $ 65.8 $ 76.4 $ 69.2 $ 78.6 Per diluted share: Net income (loss) $ 0.17 $ 0.32 $ 0.24 $ 0.27 $ 1.84 Net realized investment (gains) losses from sales and impairments (net of related amortization and taxes) 0.05 - 0.01 0.01 (0.04) Net change in market value of investments recognized in earnings (net of taxes) 0.13 (0.08) (0.04) (0.02) 0.01 Fair value changes in embedded derivative liabilities (net of related amortization and taxes) - 0.15 0.18 0.15 (0.07) Fair value changes related to the agent deferred compensation plan (net of taxes) - 0.03 0.06 0.03 (0.01) Loss on extinguishment of debt - - 0.03 - - Valuation allowance for deferred tax assets and other tax items 0.02 - - - (1.28) Other (0.01) (0.01) - 0.01 0.07 Net operating income (a non-GAAP financial measure) $ 0.36 $ 0.41 $ 0.48 $ 0.45 $ 0.52 CNO Financial Group | Fourth Quarter 2019 Earnings | February 11, 2020 31

 
Information Related to Certain Non-GAAP Financial Measures A reconciliation of operating income and shares used to calculate basic and diluted operating earnings per share is as follows (dollars in millions, except per-share amounts, and shares in thousands): 4Q18 1Q19 2Q19 3Q19 4Q19 Operating income$ 59.8 $ 65.8 $ 76.4 $ 69.2 $ 78.6 Weighted average shares outstanding for basic earnings per share 164,118 160,948 158,816 154,257 150,138 Effect of dilutive securities on weighted average shares: Stock options, restricted stock and performance units 1,772 1,241 919 1,003 1,271 Weighted average shares outstanding for diluted earnings per share 165,890 162,189 159,735 155,260 151,409 Net operating income per diluted share$ 0.36 $ 0.41 $ 0.48 $ 0.45 $ 0.52 CNO Financial Group | Fourth Quarter 2019 Earnings | February 11, 2020 32

 
Information Related to Certain Non-GAAP Financial Measures Book value per diluted share Book value per diluted share reflects the potential dilution that could occur if outstanding stock options were exercised, restricted stock and performance units were vested and convertible securities were converted. The dilution from options, restricted shares and performance units is calculated using the treasury stock method. Under this method, we assume the proceeds from the exercise of the options (or the unrecognized compensation expense with respect to restricted stock and performance units) will be used to purchase shares of our common stock at the closing market price on the last day of the period. In addition, the calculation of this non-GAAP measure differs from the corresponding GAAP measure because accumulated other comprehensive income (loss) has been excluded from the value of capital used to determine this measure. Management believes this non-GAAP measure is useful because it removes the volatility that arises from changes in the unrealized appreciation (depreciation) of our investments. Management believes this adjustment to the December 31, 2017 non-GAAP measure is useful because it removes the tax effects stranded in accumulated other comprehensive income as a result of accounting rules which require the effects of the Tax Reform Act on deferred tax balances to be recorded in earnings, even if the balance was originally recorded in accumulated other comprehensive income. A reconciliation from book value per share to book value per diluted share, excluding accumulated other comprehensive income (loss) is as follows (dollars in millions, except per share amounts): 4Q18 1Q19 2Q19 3Q19 4Q19 Total shareholders' equity$ 3,370.9 $ 3,837.9 $ 4,252.2 $ 4,553.3 $ 4,677.0 Shares outstanding for the period 162,201,692 159,955,172 156,768,002 152,183,491 148,084,178 148084178 Book value per share$ 20.78 $ 23.99 $ 27.12 $ 29.92 $ 31.58 Total shareholders' equity$ 3,370.9 $ 3,837.9 $ 4,252.2 $ 4,553.3 $ 4,677.0 Less accumulated other comprehensive income (177.7) (654.9) (1,098.2) (1,442.9) (1,372.5) Adjusted shareholders' equity excluding AOCI$ 3,193.2 $ 3,183.0 $ 3,154.0 $ 3,110.4 $ 3,304.5 Shares outstanding for the period 162,201,692 159,955,172 156,768,002 152,183,491 148,084,178 Dilutive common stock equivalents related to: Stock options, restricted stock and performance units 1,391,458 1,168,027 894,456 1,059,278 1,499,372 Diluted shares outstanding 163,593,150 161,123,199 157,662,458 153,242,769 149,583,550 Book value per diluted share (a non-GAAP financial measure)$ 19.52 $ 19.76 $ 20.00 $ 20.30 $ 22.09 CNO Financial Group | Fourth Quarter 2019 Earnings | February 11, 2020 33

 
Information Related to Certain Non-GAAP Financial Measures Interest-adjusted benefit ratios 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. ($ millions) Bankers Life 4Q18 1Q19 2Q19 3Q19 4Q19 Long-term care benefit ratios Earned premium$ 63.8 $ 63.7 $ 63.5 $ 63.7 $ 63.4 Benefit ratio before imputed interest income on reserves 117.9% 120.6% 122.1% 123.6% 120.4% Interest-adjusted benefit ratio 74.7% 77.2% 77.5% 78.7% 75.0% Underwriting margin (earned premium plus imputed interest income on reserves less policy benefits)$ 16.2 $ 14.5 $ 14.3 $ 13.6 $ 15.8 Washington National Supplemental health benefit ratios Earned premium$ 156.0 $ 155.6 $ 156.7 $ 157.6 $ 159.7 Benefit ratio before imputed interest income on reserves 77.7% 77.6% 80.2% 79.5% 78.1% Interest-adjusted benefit ratio 53.8% 53.4% 56.2% 55.4% 54.2% Underwriting margin (earned premium plus imputed interest income on reserves less policy benefits)$ 72.1 $ 72.4 $ 68.7 $ 70.4 $ 73.2 CNO Financial Group | Fourth Quarter 2019 Earnings | February 11, 2020 34

 
Information Related to Certain Non-GAAP Financial Measures Operating return measures Management believes that an analysis of net income applicable to common stock before net realized investment gains or losses from sales and impairments, net change in market value of investments recognized in earnings, fair value changes due to fluctuations in the interest rates used to discount embedded derivative liabilities related to our fixed index annuities, fair value changes related to the agent deferred compensation plan, loss on extinguishment of debt, loss on reinsurance transaction, changes in the valuation allowance for deferred tax assets and other tax items, loss on extinguishment of debt and other non-operating items consisting primarily of earnings attributable to variable interest entities (“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. Management also believes that an operating return, excluding significant items, is important as the impact of these items enhances the understanding of our operating results. This non-GAAP financial measure also differs from return on equity because accumulated other comprehensive income (loss) has been excluded from the value of equity used to determine this ratio. Management believes this non-GAAP financial measure is useful because it removes the volatility that arises from changes in accumulated other comprehensive income (loss). Such volatility is often caused by changes in the estimated fair value of our investment portfolio resulting from changes in general market interest rates rather than the business decisions made by management. In addition, our equity includes the value of significant net operating loss carryforwards (included in income tax assets). In accordance with GAAP, these assets are not discounted, and accordingly will not provide a return to shareholders (until after it is realized as a reduction to taxes that would otherwise be paid). Management believes that excluding this value from the equity component of this measure enhances the understanding of the effect these non-discounted assets have on operating returns and the comparability of these measures from period-to-period. Operating return measures are used in measuring the performance of our business units and are used as a basis for incentive compensation. CNO Financial Group | Fourth Quarter 2019 Earnings | February 11, 2020 35

 
Information Related to Certain Non-GAAP Financial Measures The calculations of: (i) operating return on equity, excluding accumulated other comprehensive income (loss) and net operating loss carryforwards (a non-GAAP financial measure); (ii) operating return, excluding significant items, on equity, excluding accumulated other comprehensive income (loss) and net operating loss carryforwards (a non-GAAP financial measure); and (iii) return on equity are as follows (dollars in millions): Trailing Twelve Months Ended 4Q18 1Q19 2Q19 3Q19 4Q19 Operating income$ 303.1 $ 295.0 $ 289.5 $ 271.2 $ 290.0 Operating income, excluding significant items$ 317.3 $ 310.1 $ 304.6 $ 286.3 $ 282.1 Net Income (loss)$ (315.0) $ (347.5) $ (412.1) $ 159.7 $ 409.4 Average common equity, excluding accumulated other comprehensive income (loss) and net operating loss carryforwards (a non-GAAP financial measure)$ 3,086.7 $ 2,942.5 $ 2,782.7 $ 2,697.2 $ 2,703.9 Average common shareholders' equity$ 4,200.3 $ 3,918.3 $ 3,795.6 $ 3,886.9 $ 4,166.8 Operating return on equity, excluding accumulated other comprehensive income (loss) and net operating loss carryforwards (a non-GAAP financial measure) 9.8% 10.0% 10.4% 10.1% 10.7% Operating return, excluding significant items, on equity, excluding accumulated other comprehensive income (loss) and net operating loss carryforwards (a non-GAAP financial measure) 10.3% 10.5% 10.9% 10.6% 10.4% Return on equity -7.5% -8.9% -10.9% 4.1% 9.8% (Continued on next page) CNO Financial Group | Fourth Quarter 2019 Earnings | February 11, 2020 36

 
Information Related to Certain Non-GAAP Financial Measures The following summarizes: (i) operating earnings; (ii) significant items; (iii) operating earnings, excluding significant items; and (iv) net income(loss) (dollars in millions): Net Operating Net Operating Income, income, excluding Net excluding significant income (loss) - Net Operating Significant significant items - trailing Net trailing income items (a) items four quarters income (loss) four quarters 1Q18$ 73.9 $ (0.9) $ 73.0 $ 299.6 $ 84.3 $ 197.6 2Q18 81.9 - 81.9 309.0 102.2 216.4 3Q18 87.5 - 87.5 321.8 (529.8) (414.2) 4Q18 59.8 15.1 74.9 317.3 28.3 (315.0) 1Q19 65.8 - 65.8 310.1 51.8 (347.5) 2Q19 76.4 - 76.4 304.6 37.6 (412.1) 3Q19 69.2 - 69.2 286.3 42.0 159.7 4Q19 78.6 (7.9) 70.7 282.1 278.0 409.4 (a) The significant items have been discussed in prior press releases. (Continued on next page) CNO Financial Group | Fourth Quarter 2019 Earnings | February 11, 2020 37

 
Information Related to Certain Non-GAAP Financial Measures A reconciliation of pretax operating earnings (a non-GAAP financial measure) to net income (loss) is as follows (dollars in millions): Twelve Months Ended 4Q18 1Q19 2Q19 3Q19 4Q19 Pretax operating earnings (a non-GAAP financial measure)$ 381.2 $ 369.7 $ 362.3 $ 341.2 $ 368.3 Income tax expense (78.1) (74.7) (72.8) (70.0) (78.3) Operating return 303.1 295.0 289.5 271.2 290.0 Non-operating items: Net realized investment gains (losses) from sales and impairments, net of related amortization 37.9 36.7 24.1 (15.5) 2.1 Net change in market value of investments recognized in earnings (48.8) (16.5) (9.4) 0.6 25.5 Fair value changes in embedded derivative liabilities, net of related amortization 55.5 0.8 (43.4) (95.6) (81.4) Fair value changes and amendment related to the agent deferred compensation plan 11.9 6.6 (16.0) (22.0) (20.4) Loss on extinguishment of debt - - (7.3) (7.3) (7.3) Loss on reinsurance transaction (704.2) (704.2) (704.2) - - Other 1.7 (0.4) 4.5 2.5 (12.6) Non-operating loss before taxes (646.0) (677.0) (751.7) (137.3) (94.1) Income tax expense (benefit): On non-operating loss (135.7) (142.3) (157.9) (28.8) (19.8) Valuation allowance for deferred tax assets and other tax items 107.8 107.8 107.8 3.0 (193.7) Net non-operating loss (618.1) (642.5) (701.6) (111.5) 119.4 Net income (loss)$ (315.0) $ (347.5) $ (412.1) $ 159.7 $ 409.4 (Continued on next page) CNO Financial Group | Fourth Quarter 2019 Earnings | February 11, 2020 38

 
Information Related to Certain Non-GAAP Financial Measures A reconciliation of consolidated capital, excluding accumulated other comprehensive income (loss) and net operating loss carryforwards (a non-GAAP financial measure) to common shareholders’ equity, is as follows (dollars in millions): 1Q17 2Q17 3Q17 4Q17 Consolidated capital, excluding accumulated other comprehensive income (loss) and net operating loss carryforwards (a non-GAAP financial measure)$ 3,236.6 $ 3,263.2 $ 3,335.0 $ 3,225.6 Net operating loss carryforwards 640.6 621.6 613.1 409.8 Accumulated other comprehensive income 729.6 894.5 933.6 1,212.1 Common shareholders' equity$ 4,606.8 $ 4,779.3 $ 4,881.7 $ 4,847.5 1Q18 2Q18 3Q18 4Q18 Consolidated capital, excluding accumulated other comprehensive income (loss) and net operating loss carryforwards (a non-GAAP financial measure)$ 3,318.7 $ 3,366.0 $ 2,705.8 $ 2,687.3 Net operating loss carryforwards 404.2 388.7 510.6 505.9 Accumulated other comprehensive income 894.3 700.2 403.5 177.7 Common shareholders' equity$ 4,617.2 $ 4,454.9 $ 3,619.9 $ 3,370.9 1Q19 2Q19 3Q19 4Q19 Consolidated capital, excluding accumulated other comprehensive income (loss) and net operating loss carryforwards (a non-GAAP financial measure)$ 2,703.4 $ 2,702.9 $ 2,685.0 $ 2,761.9 Net operating loss carryforwards 479.6 451.1 425.4 542.6 Accumulated other comprehensive income 654.9 1,098.2 1,442.9 1,372.5 Common shareholders' equity$ 3,837.9 $ 4,252.2 $ 4,553.3 $ 4,677.0 CNO Financial Group | Fourth Quarter 2019 Earnings | February 11, 2020 39

 
Information Related to Certain Non-GAAP Financial Measures A reconciliation of consolidated capital, excluding accumulated other comprehensive income (loss) and net operating loss carryforwards (a non-GAAP financial measure) to common shareholders’ equity, is as follows (dollars in millions): Trailing Four Quarter Average 4Q18 1Q19 2Q19 3Q19 4Q19 Consolidated capital, excluding accumulated other comprehensive income (loss) and net operating loss carryforwards (a non-GAAP financial measure)$ 3,086.7 $ 2,942.5 $ 2,782.7 $ 2,697.2 $ 2,703.9 Net operating loss carryforwards 440.4 461.8 479.0 476.2 470.1 Accumulated other comprehensive income 673.2 514.0 533.8 713.5 992.8 Common shareholders' equity$ 4,200.3 $ 3,918.3 $ 3,795.5 $ 3,886.9 $ 4,166.8 CNO Financial Group | Fourth Quarter 2019 Earnings | February 11, 2020 40

 
Information Related to Certain Non-GAAP Financial Measures Debt to capital ratio, excluding accumulated other comprehensive income (loss) The debt to capital ratio, excluding accumulated other comprehensive income (loss), differs from the debt to capital ratio because accumulated other comprehensive income (loss) has been excluded from the value of capital used to determine this measure. Management believes this non-GAAP financial measure is useful because it removes the volatility that arises from changes in accumulated other comprehensive income (loss). Such volatility is often caused by changes in the estimated fair value of our investment portfolio resulting from changes in general market interest rates rather than the business decisions made by management. A reconciliation of these ratios is as follows (dollars in millions): 4Q18 1Q19 2Q19 3Q19 4Q19 Corporate notes payable$ 916.8 $ 917.3 $ 988.3 $ 988.7 $ 989.1 Total shareholders' equity 3,370.9 3,837.9 4,252.2 4,553.3 4,677.0 Total capital$ 4,287.7 $ 4,755.2 $ 5,240.5 $ 5,542.0 $ 5,666.1 Corporate debt to capital 21.4% 19.3% 18.9% 17.8% 17.5% Corporate notes payable$ 916.8 $ 917.3 $ 988.3 $ 988.7 $ 989.1 Total shareholders' equity 3,370.9 3,837.9 4,252.2 4,553.3 4,677.0 Less accumulated other comprehensive income (177.7) (654.9) (1,098.2) (1,442.9) (1,372.5) Total capital $ 4,110.0 $ 4,100.3 $ 4,142.3 $ 4,099.1 $ 4,293.6 Debt to total capital ratio, excluding AOCI (a non-GAAP financial measure) 22.3% 22.4% 23.9% 24.1% 23.0% CNO Financial Group | Fourth Quarter 2019 Earnings | February 11, 2020 41

 
Information Related to Certain Non-GAAP Financial Measures The following summarizes our estimate of the impact of lower general account asset investment income and changes in amounts impacting spreads on 4Q19 net income compared to 4Q18 net income (dollars in millions, except per share data): 4Q19 4Q18 Difference Net investment income on general account assets$ 272.0 $ 290.4 $ (18.4) Impact of amounts credited and cost of options impacting spread: Cost of interest credited to policyholders (25.9) (27.4) 1.5 Cost of options to fund index credits, net of forfeitures (24.8) (25.9) 1.1 Subtotal 221.3 237.1 (15.8) Tax expense (benefit) 46.5 49.8 (3.3) Impact on net income, net of income taxes$ 174.8 $ 187.3 $ (12.5) Per diluted share impact, based on 4Q19 weighted average shares oustanding (a non- GAAP financial measure) $ (0.08) CNO Financial Group | Fourth Quarter 2019 Earnings | February 11, 2020 42