CARMEL, Ind., Oct. 25, 2017 /PRNewswire/ -- CNO Banking Group, Inc. (CNO) today appear net assets for the third division of 2017 of $100.8 million, or 59 cents per adulterated share, compared to $18.6 million, or 11 cents per adulterated share, in the third division of 2016. CNO additionally appear third division of 2017 net operating assets (1) of $76.7 million, or 45 cents per adulterated share, compared to $64.3 million, or 37 cents per adulterated share, in the third division of 2016.
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"The company's antithesis for the third division reflect the connected backbone of our enterprise," said Ed Bonach, CEO of CNO. "We had notable increases in net assets and book bulk per share, while acceptable our basic position and flexibility."
"We are admiring with some of our metrics this quarter, and abide to see auspicious aboriginal after-effects for abettor pilots, artefact rollouts, and bazaar assay strategies," added Gary Bhojwani, admiral of CNO and CEO successor. "We abide committed to the accomplishing of cardinal initiatives that will, over time, acquiesce us to accomplish adapted after-effects in all of our metrics. Indeed, steps are actuality taken to advance the clip of change."
The afterward table summarizes the banking appulse of a cogent anniversary on our 3Q17 net operating assets (dollars in millions, except per allotment amounts):
The cogent anniversary in 3Q17 reflects a $3.0 actor out-of-period acclimation and clarification to liabilities for allowance articles in the Colonial Penn articulation articular in affiliation with alternate afterlight of assumptions.
* See folio 10 for the table of Net Operating Assets Excluding a Cogent Anniversary for the three months concluded September 30, 2016.
Segment After-effects Bankers Activity markets and distributes a array of allowance articles to middle-income Americans at or abreast retirement through a committed acreage force of career agents. First-year calm premiums in 3Q17 were $288.2 million, bottomward 5 percent from 3Q16. NAP for activity and bloom articles in 3Q17 was $36.6 million, bottomward 14 percent compared to 3Q16. Boilerplate bearing agents (over the aftermost twelve months) were bottomward 7 percent from 3Q16. Boilerplate bearing agents in their third year of anniversary or afterwards (over the aftermost twelve months) in 3Q17 were about collapsed compared to 3Q16.
Total calm premiums in 3Q17 were $641.7 million, bottomward 4 percent from 3Q16. Accomplishment calm premiums in 3Q17 were $236.5 million, bottomward 4 percent from 3Q16. Accomplishment anniversary values, on which advance assets is earned, added 5 percent to $8.0 billion in 3Q17 compared to 3Q16, apprenticed by able sales and persistency over the aftermost twelve months. Absolute behavior inforce decreased 1 percent and third affair behavior inforce added 4 percent from 3Q16.
Pre-tax operating antithesis in 3Q17 compared to 3Q16 were up $18.8 million, or 21 percent. Pre-tax operating antithesis in 3Q17 reflected favorable net advance assets and favorable incurred claims in our abiding affliction and Medicare supplement blocks of business. Our 3Q17 antithesis reflected $11.5 actor of college assets from alarm premiums and prepayments compared to 3Q16. Pre-tax operating antithesis in 3Q16 reflected a $5.2 actor absolution of abiding affliction affluence (net of the abridgement in allowance affluence of $.5 million) due to the appulse of policyholder accomplishments afterward bulk increases.
The abiding affliction interest-adjusted anniversary arrangement was 72.9 percent in 3Q17, lower than the 3Q16 arrangement of 77.7 percent. The 3Q17 arrangement reflects no admission to the approaching accident reserve, accustomed the aftereffect of the anniversary 2016 actuarial review, compared to an $8.4 actor admission in 3Q16. The 3Q16 arrangement was additionally impacted by $5.7 actor of ancient assets releases accompanying to policyholder decisions to abandonment or abate advantage afterward bulk increases. Such assets releases in 3Q17 were not significant. The abiding affliction interest-adjusted anniversary arrangement excluding the favorable assets releases was 82.6 percent in 3Q16. We currently apprehend the abiding affliction interest-adjusted anniversary arrangement to be in the ambit of 75 percent to 80 percent during 4Q17, excluding the impacts of bulk admission actions. We apprehend that the bulk increases will accept a accessory appulse on the interest-adjusted anniversary arrangement in 4Q17.
Pre-tax operating antithesis in 3Q17 reflected a Medicare supplement anniversary arrangement of 72.0 percent, lower than the 3Q16 arrangement of 72.5 percent. We currently apprehend the Medicare supplement anniversary arrangement to be in the ambit of 70 percent to 73 percent during 4Q17.
Washington National markets and distributes added bloom and activity allowance to middle-income consumers through a wholly-owned accessory and absolute allowance agencies. First-year calm premiums in 3Q17 were $18.9 million, about collapsed with 3Q16. NAP from activity and bloom articles in 3Q17 was $24.8 million, up hardly from 3Q16. The boilerplate cardinal of bearing agents (over the aftermost twelve months) in 3Q17 was up 1 percent compared to 3Q16.
Total calm premiums from the segment's added bloom block were up 3 percent in 3Q17 compared to 3Q16.
Pre-tax operating antithesis in 3Q17 compared to 3Q16 were up $2.3 million, or 9 percent. Pre-tax operating antithesis in 3Q17 primarily reflect college margins on the added bloom block compared to 3Q16. The added bloom interest-adjusted anniversary arrangement was 59.0 percent and 59.8 percent in 3Q17 and 3Q16, respectively. We abide to apprehend the added bloom interest-adjusted anniversary arrangement to be in the ambit of 58 percent to 61 percent during 4Q17.
Colonial Penn markets primarily graded anniversary and simplified affair activity allowance anon to barter through television advertising, absolute mail, the internet and telemarketing. First-year calm premiums were $12.1 actor and NAP was $16.0 actor in 3Q17 bottomward 12 percent and 13 percent, respectively, from 3Q16.
Total calm premiums were up 3 percent in 3Q17 compared to 3Q16.
The pre-tax operating antithesis in 3Q17 were $9.0 actor compared to $.9 actor in 3Q16 principally due to bargain business costs and $3.0 actor accompanying to a favorable out-of-period acclimation and clarification to liabilities for allowance articles articular in affiliation with alternate afterlight of assumptions. Inforce Adjusted EBIT was $19.8 million, up 39 percent from 3Q16, primarily absorption advance in the block and the aloft $3.0 actor favorable appulse accompanying to liabilities for allowance products.
Recognizing the accounting accepted accompanying to deferred accretion costs, the bulk of our advance in new business during a accurate aeon will accept a cogent appulse on this segment's results. We currently apprehend this articulation to address antithesis in 2017 in the ambit of $15 actor to $20 actor (excluding the favorable appulse of $3.0 actor accompanying to an out-of-period acclimation and clarification to liabilities for allowance products).
Long-term affliction in run-off alone includes the abiding affliction business that was recaptured in September 2016. This articulation accustomed pre-tax losses of $1.0 actor in 3Q17. The interest-adjusted anniversary arrangement for this abiding affliction block was 99.4 percent in 3Q17 compared to 104.6 percent in 2Q17. We apprehend this articulation to address normalized antithesis afore net accomplished advance assets (losses) of about breakeven over the long-term. However, this segment's anniversary after-effects can be airy accustomed its accident acceptance status.
Corporate Operations includes our advance advising accessory and accumulated expenses.
Pre-tax losses in 3Q17 were $14.9 actor compared to $4.4 actor of losses in 3Q16 primarily absorption college expenses.
Non-Operating Items Net accomplished advance assets in 3Q17 were $28.5 actor (net of accompanying amortization) including other-than-temporary crime losses of $4.7 actor which were recorded in earnings. Net accomplished advance assets in 3Q16 were $11.4 actor (net of accompanying amortization) including other-than-temporary crime losses of $1.2 actor recorded in earnings.
During 3Q17 and 3Q16, we accustomed increases in antithesis of $2.3 actor and $9.4 million, respectively, constant from changes in the estimated fair bulk of anchored acquired liabilities accompanying to our anchored basis annuities, net of accompanying amortization. Such amounts accommodate the impacts of changes in bazaar absorption ante acclimated to actuate the derivative's estimated fair value.
In 3Q17, we accustomed a abatement in antithesis of $13.4 actor for the mark-to-market change in the abettor deferred advantage plan accountability which was impacted by changes in the basal actuarial assumptions acclimated to bulk the liability. We admit the mark-to-market change in the estimated bulk of this accountability through antithesis as assumptions change. In 3Q16, we adapted our abettor deferred advantage plan. Amid added things, the plan was adapted to: (i) benumb accord in the plan; (ii) benumb allowances accrued beneath the plan; and (iii) add a bound cashout feature. During 3Q16, we fabricated agglomeration sum adjustment distributions to plan participants with anniversary balances that were beneath a assertive beginning afterward the freeze. Accordingly, we accustomed a pre-tax accretion of $6.3 actor accompanying to the adjustment distributions in 3Q16.
During 3Q16, we concluded our reinsurance agreements with Beechwood Re Ltd and recaptured $552 actor of abiding affliction reserves. As a aftereffect of the recapture, we were appropriate to bulk the assets and liabilities as of the date of anamnesis based on appraisal methodologies that are constant with the methodologies acclimated by CNO to bulk its added investments and allowance liabilities. Accordingly, we accustomed a pre-tax accident of $75.4 actor on the anamnesis of the abiding affliction business in 3Q16.
In 3Q17, we bargain the appraisal allowance for deferred tax assets by $15.0 actor primarily due to college absolute assets compared to the bulk acclimated in our deferred tax appraisal model. In 3Q16, the appraisal allowance for deferred tax assets and added tax items was added by $13.8 actor primarily constant from the added appraisal allowance appropriate as a aftereffect of the anamnesis of the abiding affliction business, the impacts of our anniversary appraisal of the appraisal allowance including changes in our projections of approaching taxable assets and the impacts of IRS assay adjustments on our tax expense.
Statutory (based on non-GAAP measures) and GAAP Basic Advice Our circumscribed approved risk-based basic arrangement was estimated at 450% at September 30, 2017, absorption estimated 3Q17 approved operating antithesis of $91 actor and the acquittal of allowance aggregation assets to the captivation aggregation of $109.8 actor during 3Q17 and $286.8 actor during the aboriginal nine months of 2017.
During the third division of 2017, we repurchased $28.2 actor of accepted banal beneath our antithesis repurchase program. We repurchased 1.3 actor accepted shares at an boilerplate bulk of $22.19 per share. During the aboriginal nine months of 2017, we repurchased 6.7 actor accepted shares at a absolute bulk of $140.1 million. CNO anticipates repurchasing accepted banal in the ambit of $175 actor to $225 actor in 2017, absent acute alternatives. As of September 30, 2017, we had 167.8 actor shares outstanding and had ascendancy to repurchase up to an added $412.6 actor of our accepted stock. During 3Q17, assets paid on accepted banal totaled $15.2 million.
Unrestricted banknote and investments captivated by our captivation aggregation were $380 actor at September 30, 2017, compared to $264 actor at December 31, 2016, absorption assets from subsidiaries, partially annual by accepted banal repurchases and allotment payments.
Book bulk per accepted allotment was $29.10 and $25.82 at September 30, 2017 and December 31, 2016, respectively. Book bulk per adulterated share, excluding accumulated added absolute assets (loss) (3), added to $23.19 at September 30, 2017, compared to $22.02 at December 31, 2016.
The debt-to-capital arrangement was 15.8 percent and 16.9 percent at September 30, 2017 and December 31, 2016, respectively. Our debt-to-total basic ratio, excluding accumulated added absolute assets (6) was 18.8 percent at September 30, 2017 compared to 19.1 percent at December 31, 2016.
Conference Alarm The Aggregation will host a appointment alarm to altercate after-effects on October 26, 2017 at 11:00 a.m. Eastern Time. The webcast can be accessed through the Investors area of the company's website: http://ir.CNOinc.com. Participants should go to the website at atomic 15 annual afore the accident to annals and download any all-important audio software. During the call, we will be apropos to a presentation that will be accessible the morning of the alarm at the Investors area of the company's website.
About CNO Banking Group CNO Banking Group, Inc. (CNO) is a captivation company. Our allowance subsidiaries - principally Bankers Activity and Casualty Company, Colonial Penn Activity Allowance Aggregation and Washington National Allowance Aggregation - primarily serve middle-income pre-retiree and retired Americans by allowance them assure adjoin banking affliction and accommodate for a added defended retirement. For added information, appointment CNO online at www.CNOinc.com.
CNO FINANCIAL GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(Dollars in millions)
(unaudited)
September 30,
2017
December 31,2016
ASSETS
Investments:
Fixed maturities, accessible for sale, at fair bulk (amortized cost: September30, 2017 - $20,092.5; December 31, 2016 - $19,803.1)
$
22,129.9
$
21,096.2
Equity antithesis at fair bulk (cost: September 30, 2017 - $688.7; December31, 2016 - $580.7)
713.3
584.2
Mortgage loans
1,667.8
1,768.0
Policy loans
114.6
112.0
Trading securities
294.4
363.4
Investments captivated by capricious absorption entities
1,382.5
1,724.3
Other invested assets
752.1
589.5
Total investments
27,054.6
26,237.6
Cash and banknote equivalents - unrestricted
765.9
478.9
Cash and banknote equivalents captivated by capricious absorption entities
105.9
189.3
Accrued advance income
268.0
239.6
Present bulk of approaching profits
368.5
401.8
Deferred accretion costs
1,023.8
1,044.7
Reinsurance receivables
2,195.5
2,260.4
Income tax assets, net
567.4
789.7
Assets captivated in abstracted accounts
4.8
4.7
Other assets
350.2
328.5
Total assets
$
32,704.6
$
31,975.2
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Liabilities for allowance products:
Policyholder anniversary balances
$
11,113.5
$
10,912.7
Future action benefits
11,374.1
10,953.3
Liability for action and arrangement claims
519.5
500.6
Unearned and avant-garde premiums
262.4
282.5
Liabilities accompanying to abstracted accounts
4.8
4.7
Other liabilities
789.1
611.4
Investment borrowings
1,646.9
1,647.4
Borrowings accompanying to capricious absorption entities
1,198.2
1,662.8
Notes payable – absolute accumulated obligations
914.4
912.9
Total liabilities
27,822.9
27,488.3
Commitments and Contingencies
Shareholders' equity:
Common banal ($0.01 par value, 8,000,000,000 shares authorized, shares issuedand outstanding: September 30, 2017 – 167,762,323; December 31, 2016 –173,753,614)
1.7
1.7
Additional paid-in capital
3,094.5
3,212.1
Accumulated added absolute income
933.6
622.4
Retained earnings
851.9
650.7
Total shareholders' equity
4,881.7
4,486.9
Total liabilities and shareholders' equity
$
32,704.6
$
31,975.2
CNO FINANCIAL GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(Dollars in millions, except per allotment data)
(unaudited)
Three months ended
Nine months ended
September 30,
September 30,
2017
2016
2017
2016
Revenues:
Insurance action income
$
659.3
$
649.0
$
1,987.2
$
1,947.0
Net advance income:
General anniversary assets
325.9
301.7
960.3
888.5
Policyholder and added special-purpose portfolios
52.7
43.1
171.8
82.7
Realized advance assets (losses):
Net accomplished advance gains, excluding crime losses
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34.5
12.8
74.8
55.4
Other-than-temporary impairments:
Total other-than-temporary crime losses
(4.7)
(1.2)
(17.3)
(24.8)
Change in other-than-temporary crime lossesrecognized in accumulated added absolute income
—
—
(.9)
—
Net crime losses recognized
(4.7)
(1.2)
(18.2)
(24.8)
Loss on dissolution of capricious absorption entities
(.6)
—
(4.3)
(7.3)
Total accomplished gains
29.2
11.6
52.3
23.3
Fee acquirement and added income
12.2
10.5
35.5
38.7
Total revenues
1,079.3
1,015.9
3,207.1
2,980.2
Benefits and expenses:
Insurance action benefits
638.1
609.8
1,941.6
1,861.2
Loss on reinsurance transaction
—
75.4
—
75.4
Interest expense
30.1
29.4
92.3
86.0
Amortization
58.2
64.7
181.3
181.6
Loss on concealment of borrowings accompanying to a variableinterest entity
5.5
—
5.5
—
Other operating costs and expenses
217.5
187.3
631.3
603.5
Total allowances and expenses
949.4
966.6
2,852.0
2,807.7
Income afore assets taxes
129.9
49.3
355.1
172.5
Income tax bulk (benefit):
Tax bulk on aeon income
44.1
16.9
123.6
61.7
Valuation allowance for deferred tax assets and added taxitems
(15.0)
13.8
(15.0)
(13.2)
Net income
$
100.8
$
18.6
$
246.5
$
124.0
Earnings per accepted share:
Basic:
Weighted boilerplate shares outstanding
168,684,000
174,247,000
170,890,000
177,640,000
Net income
$
.60
$
.11
$
1.44
$
.70
Diluted:
Weighted boilerplate shares outstanding
170,982,000
175,723,000
172,800,000
179,373,000
Net income
$
.59
$
.11
$
1.43
$
.69
CNO FINANCIAL GROUP, INC. AND SUBSIDIARIES
SEGMENT OPERATING RESULTS
(Dollars in millions, except per allotment data)
Nine months ended
September 30,
2017
2016
Adjusted EBIT (4):
Bankers Life
$
309.2
$
259.0
Washington National
74.6
73.0
Colonial Penn:
Inforce business (5)
51.3
41.0
New business (5)
(34.6)
(43.9)
Total Colonial Penn
16.7
(2.9)
Long-term affliction in run-off
1.1
—
Adjusted EBIT from business segments
401.6
329.1
Corporate Operations, excluding accumulated absorption expense
(37.0)
(19.5)
Adjusted EBIT
364.6
309.6
Corporate absorption expense
(34.8)
(34.3)
Operating antithesis afore taxes
329.8
275.3
Tax bulk on operating income
114.7
97.7
Net operating assets (1)
215.1
177.6
Net accomplished advance assets (net of accompanying amortization)
51.3
22.4
Fair bulk changes in anchored acquired liabilities (net of accompanying amortization)
(8.0)
(36.6)
Fair bulk changes and alteration accompanying to abettor deferred advantage plan
(13.4)
(12.0)
Loss on reinsurance transaction
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—
(75.4)
Other
(4.6)
(1.2)
Non-operating assets (loss) afore taxes
25.3
(102.8)
Income tax bulk (benefit):
On non-operating assets (loss)
8.9
(36.0)
Valuation allowance for deferred tax assets and added tax items
(15.0)
(13.2)
Net non-operating assets (loss)
31.4
(53.6)
Net income
$
246.5
$
124.0
Per adulterated share:
Net operating income
$
1.25
$
.99
Net accomplished advance assets (net of accompanying acquittal and taxes)
.19
.08
Fair bulk changes in anchored acquired liabilities (net of relatedamortization and taxes)
(.03)
(.13)
Fair bulk changes and alteration accompanying to abettor deferred advantage plan(net of taxes)
(.05)
(.05)
Loss on reinsurance transaction (net of taxes)
—
(.27)
Valuation allowance for deferred tax assets and added tax items
.09
.07
Other
(.02)
—
Net income
$
1.43
$
.69
CNO FINANCIAL GROUP, INC. AND SUBSIDIARIES
NET OPERATING INCOME EXCLUDING A SIGNIFICANT ITEM*
(Dollars in millions, except per allotment data)
Three months ended
September 30, 2016*
Actualresults
Significantitem
Excludingsignificantitem
Net Operating Assets (1):
Bankers Life
$
88.1
$
(5.2)
$
82.9
Washington National
25.2
—
25.2
Colonial Penn
.9
—
.9
Adjusted EBIT from business segments
114.2
(5.2)
109.0
Corporate Operations, excluding accumulated absorption expense
(4.4)
—
(4.4)
Adjusted EBIT (4)
109.8
(5.2)
104.6
Corporate absorption expense
(11.5)
—
(11.5)
Operating antithesis afore taxes
98.3
(5.2)
93.1
Tax bulk on operating income
34.0
(1.8)
32.2
Net operating income
$
64.3
$
(3.4)
$
60.9
Net operating assets per adulterated share
$
.37
$
(.02)
$
.35
* This table summarizes the banking appulse of a cogent anniversary (as declared in the articulation after-effects area of this columnist release) on our 3Q16 net operating income.
CNO FINANCIAL GROUP, INC. AND SUBSIDIARIES
FIRST-YEAR COLLECTED PREMIUMS
(Dollars in millions)
Three months ended
September 30,
2017
2016
Bankers Life:
Medicare supplement
$
16.8
$
18.8
Long-term care
3.8
4.4
Supplemental health
1.1
1.4
Other health
.2
—
Life
30.8
36.7
Annuity
235.5
243.5
Total
288.2
304.8
Washington National:
Supplemental bloom and added health
17.9
17.8
Life
1.0
1.2
Annuity
—
—
Total
18.9
19.0
Colonial Penn:
Life
12.1
13.8
Total
12.1
13.8
Total first-year calm premiums from segments
$
319.2
$
337.6
TOTAL COLLECTED PREMIUMS
(Dollars in millions)
Three months ended
September 30,
2017
2016
Bankers Life:
Medicare supplement
$
177.2
$
182.2
Long-term care
107.3
116.3
Supplemental health
5.5
5.4
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Other health
1.5
1.5
Life
113.7
115.4
Annuity
236.5
245.1
Total
641.7
665.9
Washington National:
Supplemental bloom and added health
145.2
141.5
Medicare supplement
11.7
14.6
Life
7.1
7.1
Annuity
.2
.2
Total
164.2
163.4
Colonial Penn:
Life
72.2
70.1
Medicare supplement and added health
.4
.6
Total
72.6
70.7
Long-term affliction in run-off:
Long-term care
3.9
N/A
Total
3.9
N/A
Total calm premiums from segments
$
882.4
$
900.0
CNO FINANCIAL GROUP, INC. AND SUBSIDIARIES
NEW ANNUALIZED PREMIUMS FOR LIFE AND HEALTH PRODUCTS (2)
(Dollars in millions)
Three months ended
September 30,
2017
2016
Bankers Life:
Medicare supplement
$
14.4
$
15.9
Long-term care
4.6
5.2
Supplemental bloom and added health
1.3
1.7
Life
16.3
19.8
Total
36.6
42.6
Washington National:
Supplemental health
22.8
22.9
Life
2.0
1.7
Total
24.8
24.6
Colonial Penn:
Life
16.0
18.4
Total
16.0
18.4
Total new annualized premiums
$
77.4
$
85.6
ANNUITY ACCOUNT VALUES
(Dollars in millions)
September 30,
2017
2016
Bankers Life
$
8,047.2
$
7,675.9
Washington National
385.7
427.1
Total
$
8,432.9
$
8,103.0
CNO FINANCIAL GROUP, INC. AND SUBSIDIARIES
BENEFIT RATIOS ON MAJOR HEALTH LINES OF BUSINESS
Three months ended
September 30,
2017
2016
Bankers Life:
Medicare supplement:
Earned premium
$195 million
$194 million
Benefit arrangement (7)
72.0%
72.5%
Long-term care:
Earned premium
$113 million
$117 million
Benefit arrangement (7)
134.2%
137.7%
Interest-adjusted anniversary arrangement (a non-GAAP measure) (8)
72.9%
77.7%
Washington National:
Medicare supplement:
Earned premium
$13 million
$15 million
Benefit arrangement (7)
68.1%
69.5%
Supplemental health:
Earned premium
$147 million
$141 million
Benefit arrangement (7)
83.2%
84.0%
Interest-adjusted anniversary arrangement (a non-GAAP measure) (8)
59.0%
59.8%
Long-term affliction in run-off:
Long-term care:
Earned premium
$4 million
N/A
Benefit arrangement (7)
274.3%
N/A
Interest-adjusted anniversary arrangement (a non-GAAP measure) (8)
99.4%
N/A
NOTES
(1)
Management believes that an assay of Net assets applicative to accepted banal before: (i) net accomplished advance assets or losses, net of accompanying acquittal and taxes; (ii) fair bulk changes due to fluctuations in the absorption ante acclimated to abatement anchored acquired liabilities accompanying to our anchored basis annuities, net of accompanying acquittal and taxes; (iii) fair bulk changes and alteration accompanying to the abettor deferred advantage plan, net of taxes, (iv) changes in the appraisal allowance for deferred tax assets and added tax items; and (v) added non-operating items consisting primarily of antithesis attributable to capricious absorption entities, net of taxes ("Net operating income," a non-GAAP banking measure) is important to appraise the banking achievement of the company, and is a key admeasurement frequently acclimated in the activity allowance industry. Administration uses this admeasurement to appraise achievement because the items afar from net operating assets can be afflicted by contest that are different to the company's basal fundamentals. Net accomplished advance assets or losses include: (i) assets or losses on the sales of investments; (ii) other-than-temporary impairments accustomed through net income; and (iii) changes in fair bulk of assertive anchored adeptness investments with anchored derivatives. A adaptation of Net operating assets to Net assets applicative to accepted banal is provided in the tables on pages 2 and 9. Added advice apropos this non-GAAP admeasurement is included in our alternate filings with the Antithesis and Exchange Commission that are accessible in the "Investors - SEC Filings" area of CNO's website, www.CNOinc.com.
(2)
Measured by new annualized exceptional for activity and bloom products, which includes 10% of distinct exceptional accomplished activity deposits and 100% of all added premiums (excluding annuities). Medicare Advantage sales are not commensurable to added sales and are accordingly afar in all periods.
(3)
Book bulk per adulterated allotment reflects the abeyant concoction that could action if outstanding banal options were exercised, belted banal and achievement units were vested and convertible antithesis were converted. The concoction from options, belted shares and achievement units is affected application the treasury banal method. Beneath this method, we accept the gain from the exercise of the options (or the anonymous advantage bulk with account to belted banal and achievement units) will be acclimated to acquirement shares of our accepted banal at the closing bazaar bulk on the aftermost day of the period. The concoction from convertible antithesis is affected bold the antithesis were adapted on the aftermost day of the period. In addition, the adding of this non-GAAP admeasurement differs from the agnate GAAP admeasurement because accumulated added absolute assets (loss) has been afar from the bulk of basic acclimated to actuate this measure. Administration believes this non-GAAP admeasurement is advantageous because it removes the animation that arises from changes in the abeyant acknowledgment (depreciation) of our investments.
(4)
Management believes that an assay of antithesis afore net accomplished advance assets (losses), fair bulk changes due to fluctuations in the absorption ante acclimated to abatement anchored acquired liabilities accompanying to our anchored basis annuities, fair bulk changes and alteration accompanying to the abettor deferred advantage plan, added non-operating items, accumulated absorption bulk and taxes ("Adjusted EBIT," a non-GAAP banking measure) provides a clearer allegory of the operating after-effects of the aggregation quarter-over-quarter because these items are different to the company's basal fundamentals. A adaptation of Adjusted EBIT to Net Assets applicative to accepted banal is provided in the tables on pages 2 and 9.
(5)
Management believes that an assay of Adjusted EBIT for Colonial Penn, afar amid inforce and new business, provides added accuracy for this articulation as the all-inclusive majority of the costs to accomplish new business in this articulation are not deferrable and Adjusted EBIT will alter based on management's decisions on how abundant business costs to acquire in anniversary period. Adjusted EBIT from new business includes pre-tax revenues and costs associated with new sales of our allowance articles during the aboriginal year afterwards the auction is completed. Adjusted EBIT from inforce business includes all pre-tax revenues and costs associated with sales of allowance articles that were completed added than one year afore the end of the advertisement period. The allocation of assertive revenues and costs amid new and inforce business is based on estimates, which we accept are reasonable.
(6)
The adding of this non-GAAP admeasurement differs from the agnate GAAP admeasurement because accumulated added absolute assets (loss) has been afar from the bulk of basic acclimated to actuate this measure. Administration believes this non-GAAP admeasurement is advantageous because it removes the animation that arises from changes in the abeyant acknowledgment (depreciation) of our investments.
(7)
The anniversary arrangement is affected by adding the accompanying product's allowance action allowances by allowance action income.
(8)
The interest-adjusted anniversary arrangement (a non-GAAP measure) is affected by adding the product's allowance action allowances beneath accepted absorption assets on the accumulated assets abetment the allowance liabilities by allowance action income. Absorption assets is an important agency in barometer the achievement of best continuance bloom products. The net banknote flows about account an accession of amounts in the aboriginal years of a action (accounted for as assets increases), which will be paid out as allowances in afterwards action years (accounted for as assets decreases). Accordingly, as the behavior age, the anniversary arrangement will about increase, but the admission in the change in assets will be partially annual by the accepted absorption assets becoming on the accumulated assets. The interest-adjusted anniversary arrangement reflects the furnishings of such absorption assets annual (which is according to the collapsed absorption on the accompanying allowance liabilities). Since absorption assets is an important agency in barometer the achievement of these products, administration believes a anniversary ratio, which includes the aftereffect of absorption income, is advantageous in allegory artefact performance. Added advice apropos this non-GAAP admeasurement is included in our alternate filings with the Antithesis and Exchange Commission that are accessible in the "Investors - SEC Filings" area of CNO Financial's website, www.CNOinc.com.
Cautionary Account Regarding Forward-Looking Statements. Our statements, trend analyses and added advice independent in this columnist absolution about to markets for CNO Financial's articles and trends in CNO Financial's operations or banking results, as able-bodied as added statements, accommodate advanced statements aural the acceptation of the federal antithesis laws and the Private Antithesis Litigation Reform Act of 1995. Advanced statements about are articular by the use of agreement such as "anticipate," "believe," "plan," "estimate," "expect," "project," "intend," "may," "will," "would," "contemplate," "possible," "attempt," "seek," "should," "could," "goal," "target," "on track," "comfortable with," "optimistic," "guidance," "outlook" and agnate words, although some advanced statements are bidding differently. You should accede statements that accommodate these words anxiously because they call our expectations, plans, strategies and goals and our behavior apropos approaching business conditions, our after-effects of operations, banking position, and our business angle or they accompaniment added ''forward-looking'' advice based on currently accessible information. Assumptions and added important factors that could account our absolute after-effects to alter materially from those advancing in our advanced statements include, amid added things: (i) changes in or abiding low absorption ante causing reductions in advance income, the margins of our anchored accomplishment and activity allowance businesses, and sales of, and appeal for, our products; (ii) expectations of lower approaching advance antithesis may account us to advance amortization, address bottomward the antithesis of allowance accretion costs or authorize added liabilities for allowance products; (iii) accepted economic, bazaar and political altitude and uncertainties, including the achievement and fluctuations of the banking markets which may affect the bulk of our investments as able-bodied as our adeptness to accession basic or refinance absolute acknowledgment and the bulk of accomplishing so; (iv) the ultimate aftereffect of lawsuits filed adjoin us and added acknowledged and authoritative diplomacy to which we are subject; (v) our adeptness to accomplish advancing changes to assertive non-guaranteed elements of our activity allowance products; (vi) our adeptness to admission able and appropriate bulk increases on our bloom products, including our abiding affliction business; (vii) the cancellation of any appropriate authoritative approvals for allotment and surplus agreement absorption payments from our allowance subsidiaries; (viii) mortality, morbidity, the added bulk and acceptance of bloom affliction services, persistency, the capability of our antecedent assets estimates and added factors which may affect the advantage of our allowance products; (ix) changes in our assumptions accompanying to deferred accretion costs or the present bulk of approaching profits; (x) the recoverability of our deferred tax assets and the aftereffect of abeyant buying changes and tax bulk changes on their value; (xi) our acceptance that the positions we booty on our tax acknowledgment filings will not be auspiciously challenged by the Internal Acquirement Service; (xii) changes in accounting attempt and the estimation thereof; (xiii) our adeptness to abide to amuse the banking arrangement and antithesis requirements and added covenants of our debt agreements; (xiv) our adeptness to accomplish advancing bulk reductions and levels of operational efficiencies including improvements in claims acknowledgment and connected automation and account of operating systems, (xv) achievement and appraisal of our investments, including the appulse of accomplished losses (including other-than-temporary crime charges); (xvi) our adeptness to analyze articles and markets in which we can attempt finer adjoin competitors with greater bazaar share, college ratings, greater banking assets and stronger cast recognition; (xvii) our adeptness to accomplish acceptable clamminess to accommodated our debt anniversary obligations and added banknote needs; (xviii) our adeptness to advance able controls over banking reporting; (xix) our adeptness to abide to recruit and absorb advantageous agents and administration partners; (xx) chump acknowledgment to new products, administration channels and business initiatives; (xxi) our adeptness to accomplish added upgrades of the banking backbone ratings of CNO Banking and our allowance aggregation subsidiaries as able-bodied as the appulse of our ratings on our business, our adeptness to admission basic and the bulk of capital; (xxii) authoritative changes or actions, including those apropos to adjustment of the banking diplomacy of our allowance companies, such as the acquittal of assets and surplus agreement absorption to us, adjustment of the sale, underwriting and appraisement of products, and bloom affliction adjustment affecting bloom allowance products; (xxiii) changes in the Federal assets tax laws and regulations which may affect or annihilate the about tax advantages of some of our articles or affect the bulk of our deferred tax assets; (xxiv) availability and capability of reinsurance arrangements, as able-bodied as the appulse of any defaults or abortion of reinsurers to perform; (xxv) the bulk we may allegation to pay to a reinsurer and the antithesis allegation we may acquire in affiliation with a abiding affliction reinsurance transaction; (xxvi) the achievement of third affair anniversary providers and abeyant difficulties arising from outsourcing arrangements; (xxvii) the advance bulk of sales, calm premiums, accomplishment deposits and assets; (xxviii) abeyance in telecommunication, advice technology or added operational systems or abortion to advance the security, acquaintance or aloofness of acute abstracts on such systems; (xxix) contest of terrorism, cyber attacks, accustomed disasters or added adverse events, including losses from a ache pandemic; (xxx) disability of accident administration behavior and procedures in identifying, ecology and managing risks; and (xxxi) the accident factors or uncertainties listed from time to time in our filings with the Antithesis and Exchange Commission. Added factors and assumptions not articular aloft are additionally accordant to the advanced statements, and if they prove incorrect, could additionally account absolute after-effects to alter materially from those projected. All accounting or articulate advanced statements attributable to us are especially able in their absoluteness by the aloft cautionary statement. Our advanced statements allege alone as of the date made. We accept no obligation to amend or to about advertise the after-effects of any revisions to any of the advanced statements to reflect absolute results, approaching contest or developments, changes in assumptions or changes in added factors affecting the advanced statements.
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Colonial Penn Life Insurance Review
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