CNO Financial Group, Inc. · NYSE:CNO
CNO Financial — 2012 FBR Fall Investor Conference
22 slides from CNO Financial's conference presentation, Nov 27, 2012
Slide 1: 2012 FBR Fall Investor Conference
2012 FBR Fall Investor Conference November 27 27, 2012
Slide 2: CNO Financial Group
CNO Financial Group 2
Slide 3: Forward-Looking Statements
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 f
Slide 4: Non-GAAP Measures
Non-GAAP Measures This presentation contains financial measures that differ from the comparable measures under Generally Accepted Accounting Principles (GAAP). Reconciliations between those non-GAAP GAAP measures and d th the comparable bl GAAP measures are iincluded l d d iin th the Appendix. A di
Slide 5: CNO Fundamentals
CNO Fundamentals Well positioned in the growing and underserved senior and middle iddl iincome marketk t Strong risk management Track record of strong execution Building core value drivers Well capitalized and generating significant excess capital CNO Financial Group 5
Slide 6: The right products and the right channels for today's middle-market consumer
CNO: The right products and the right channels for today’s d ’ middle-market iddl k consumer CNO has expertise CNO can access Strong trends are driving across important consumers across iddl k consumers middle-market middle-market products multiple channels • Rising medical costs • Fixed and Fixed-I
Slide 7: Customers: few competitors and a defensible position
We have few competitors and a defensible position Relative company size based on total admitted assets as of 12/31/11 More Affluent Mass LNC PNX NM Mutual SFG S G ManuLife MET HIG KCLI GAFRI AIG NYL DFG PRU Guardian Customers PFG PL UNM SYA Mut. Of Omaha GNW PLFE C AEL Aviva USA WNIC BLC AFL CNO Ger
Slide 8: Product Level Risk Management
Product Level Risk Management Diversified product mix focused on protection needs Basic products that fit with exclusive distribution and meet the basic insurance needs of the middle market Life Insurance Annuities Attractive and more predictable return characteristics - price to unleveraged IRR
Slide 9: CNO – Track Record of Strong Execution
CNO – Track Record of Strong Execution Q3 2012 Q1 2011 Raised $950 million to pay off senior Q4 2008 Pre-paid $50 million on secured debt and repurchase Separation of Closed Senior Credit Facility majority of convertible debentures Block LTC business Q3 2007 Q4 2009 Q2 2011 Sale of $3 billion Refina
Slide 10: Growth in the CNO Franchise
Growth ($ millions) in the CNO Franchise Average liabilities on core business segments are increasing, while Other CNO Business (“OCB”) is shrinking $16,106.8 $16,556.3 $15,481.7 $712.9 $704.0 $698.0 $2,620.9 $2,637.6 $2,676.8 $12,765.2 $13,222.5 $12,106.9 $5,511.5 $5,286.1 $5,030.3 2010 2011 3Q12 C
Slide 11: Segment EBIT - Excluding Significant Items
Segment EBIT - Excluding Significant Items* ($ millions) $125.6 $3.3 CNO’s Earnings Engine $10.4 $88 6 $88.6 42% Bankers premium growth, favorable $15.8 $33.9 Medicare supplement benefit ratios and annuity persistency $27.2 $ Washington National favorable supplemental health benefit ratios $80 6
Slide 12: Recent Recapitalization
Recent Recapitalization Raised $950 million to pay off senior secured debt and repurchase majority of the convertible debentures Recapitalization Summary Impact on Credit Profile New debt structure reflects strong Maintained strong capital position performance and improved credit Uninterrupted
Slide 13: Free Cash Flow
Free Cash Flow Sources Building While Recurring Uses Moderating ($ in millions) 9 - Month 2012: Capital Generation & Free Cash Flow $358 Observations $45 $313 RBC $50mm above 350% RBC target Deployable holdco capital of $150mm ($52) Modest capital p required q to support pp business ($15) grow
Slide 14: CNO: Value Proposition
CNO: Value Proposition Uniquely Reinvesting in Positioned Business Business Growth Model Opportunities Generating Stabilized Capital Management Significant Earnings & Run-Off Engineering Excess Capital Operational Efficiencies C it l Capital Rapidly Growing Target Market Management team focu
Slide 15: Q&A
Q&A CNO Financial Group 15
Slide 16: Appendix
Appendix CNO Financial Group 16
Slide 17: Information Related to Certain Non-GAAP Financial Measures
Information Related to Certain Non-GAAP Financial Measures The following provides additional information regarding certain non-GAAP measures used in this presentation. A non-GAAP measure is a numerical measure of a company’s performance, financial position, or cash flows that excludes or includes am
Slide 18: 3Q12 Significant Items
3Q12 Significant Items CNO ( millions)) ($ The table below summarizes the financial impact of significant items on our 3Q12 net operating income. Management believes that identifying the impact of these items enhances the understanding of our operating results during 3Q12. Three months ended Septemb
Slide 19: 3Q11 Significant Items
3Q11 Significant Items CNO ($ millions)) The table below summarizes the financial impact of significant items on our 3Q11 net operating income. Management believes that identifying the impact of these items enhances the understanding of our operating results during 3Q11. Three months ended September
Slide 20: CNO Quarterly Earnings
Quarterlyy Earnings g CNO ($ millions) 3Q11 3Q12 Bankers Life $ 79.4 $ 80.6 Washington National 21.2 33.9 Colonial Penn (1 3) (1.3) (2 6) (2.6) Other CNO Business 2.8 (53.6) EBIT* from business segments 102.1 58.3 Corporate operations, excluding interest expense (27.5) (6.7) Total EBIT 74.6 51.6 Cor
Slide 21: Information Related to Certain Non-GAAP Financial Measures
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): 3Q11 3Q12 Net income (loss) applicable to common stock $
Slide 22: Information Related to Certain Non-GAAP Financial Measures
Information Related to Certain Non-GAAP Financial Measures Debt to capital ratio, excluding accumulated other comprehensive income (loss) The debt to capital ratio ratio, excluding accumulated other comprehensive income (loss), (loss) differs from the debt to capital ratio because accumulated other
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