Cno Financial Group, Inc. · NYSE:CNO
Cno Financial — Q3 2010 Earnings Presentation
23 slides from Cno Financial's earnings presentation, Oct 28, 2010
Slide 1: CNO Segmentation
CNO Segmentation October 28, 2010
Slide 2: Forward-Looking Statements
Forward-Looking Statements Cautionary Statement Regarding Forward-Looking Statements. Our statements, trend analyses and other information contained in this press release relative to markets for CNO Financial’s products and trends in CNO Financial’s operations or financial results, as well as other
Slide 3: Non-GAAP Measures
Non-GAAP Measures This presentation contains certain financial measures that differ from the comparable measures under Generally Accepted Accounting Principles (GAAP). Reconciliations between those non-GAAP measures and the comparable GAAP measures are included in the Appendix, or on the page such m
Slide 4: Splitting the CIG Segment
Splitting the CIG Segment § Two new segments, consistent with how we are managing our business – Washington National (primarily actively sold lines of business) – Other CNO Business - “OCB” (primarily closed blocks of business) § Another step toward increased transparency – Provides greater visibili
Slide 5: Operating Return on Allocated Capital
Operating Return on Allocated Capital § Capital allocation to insurance segments based on 275% RBC – Return on allocated capital is consistent with how the company manages its capital – Consistent with the company’s intent to hold excess capital in our non- life holding company – Consolidated 300% R
Slide 6: Relative Size
Average Liabilities for Insurance Products * Interest Sensitive Life Non-Interest Sensitive Life Annuities Health Total Washington National - $206.5 - $2,485.5 ** $2,692.0 OCB $2,593.7 $839.9 $1,614.9 $480.1 *** $5,528.6 Total $2,593.7 $1,046.4 $1,614.9 $2,965.6 $8,220.6 Relative Size * 2Q2010 avera
Slide 7: Re-Segmented Quarterly Earnings - Washington National
Re-Segmented Quarterly Earnings Washington National ($ millions) Management believes that an analysis of income before net realized investment gains (losses), net of related amortization (a non-GAAP financial measure), is important to evaluate the financial performance of our business, and is a meas
Slide 8: Re-Segmented Quarterly Earnings - OCB
Re-Segmented Quarterly Earnings OCB ($ millions) Management believes that an analysis of income before net realized investment gains (losses), net of related amortization (a non-GAAP financial measure), is important to evaluate the financial performance of our business, and is a measure commonly use
Slide 9: Operating Return on Allocated Capital Computation
Adjusted operating earnings for the purpose of calculating operating return on allocated capital is determined as follows: Allocated capital is calculated as follows: * A non-GAAP financial measure. Refer to the Appendix for a reconciliation to the corresponding GAAP measure. Operating Return on All
Slide 10: 2Q10 Operating Return on Allocated Capital vs. Previous Return on Equity Calculation
Bankers Life Colonial Penn Washington National OCB Corp Total Trailing 4 Quarter Operating Return on Allocated Capital 12.3% 7.7% 9.9% -5.0% -12.4% 6.0% Trailing 4 Quarter Operating Return on Equity as previously reported 11.6% 12.0% CIG 0.2%* -1.0% 6.0% 2Q10 Operating Return on Allocated Capital vs
Slide 11: Terminology Changes
We will also be making the following terminology changes in our financial reports to more accurately describe our business and/or for consistency with industry peers . (1) Includes specified disease, accident, and hospital indemnity products (2) Includes supplemental health, Medicare supplement, and
Slide 12: Summary
§ The split of CIG into two segments: – Consistent with how we are managing our business – Gives greater line of sight into the performance of currently sold lines of business – Sharpens focus on improving results of closed blocks § Moving to an operating return on allocated capital will provide mor
Slide 13: Questions and Answers
Questions and Answers
Slide 14: Appendix
Appendix
Slide 15: Operating return measures
Operating return measures Management believes that an analysis of return before loss on extinguishment or modification of debt, net realized gains or losses, and increases to our valuation allowance for deferred tax assets (“net operating income,” a non-GAAP financial measure) is important to evalua
Slide 16: Information Related to Certain Non-GAAP Financial Measures
The calculations of: (i) operating return on allocated capital, excluding accumulated other comprehensive income (loss) and net operating loss carryforwards (a non-GAAP financial measure); and (ii) return on equity, for the twelve months ended June 30, 2010, are as follows (dollars in millions): (Co
Slide 17: Reconciliation of pretax operating earnings to segment operating return
A reconciliation of pretax operating earnings (a non-GAAP financial measure) to segment operating return (loss) and consolidated net income (loss) for the twelve months ended June 30, 2010, is as follows (dollars in millions): (Continued on next page) Information Related to Certain Non-GAAP Financia
Slide 18: Reconciliation of average allocated capital
A reconciliation of average allocated capital (for the purpose of determining return on allocated capital), excluding accumulated other comprehensive income (loss) and net operating loss carryforwards (a non-GAAP financial measure) to average common shareholders’ equity, is as follows (dollars in mi
Slide 19: Reconciliation of consolidated capital
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): (Continued from previous page) Information Related to Certain No
Slide 20: Re-Segmented Financial Supplement - Washington National
Re-Segmented Financial Supplement - Washington National
Slide 21: Re-Segmented Financial Supplement - Washington National (continued)
(Continued from previous page) Re-Segmented Financial Supplement - Washington National
Slide 22: Re-Segmented Financial Supplement - OCB
ee Re-Segmented Financial Supplement - OCB ‘Analysis of income'Yfoss) before taxes (in millions) 40082009 3009409 20091410 __2a10 Insurance policy income $032 $907 $808 «S757 S404 $748 «S732 Net investment income (oss) ‘General account invested assets oa 89787853 BST.1 TB BS Fixed index products 70)
Slide 23: Re-Segmented Financial Supplement - OCB (continued)
(Continued from previous page) Re-Segmented Financial Supplement - OCB