Cno Financial Group, Inc. · NYSE:CNO
Cno Financial — Investor Presentation (August 2013)
32 slides from Cno Financial's investor presentation, Aug 12, 2013
Slide 1: CNO Overview
CNO Overview August 12, 2013 Exhibit 99.1
Slide 2: 12, 2013
CNO Financial Group | CNO Overview | August 12, 2013 2
Slide 3: Forward-Looking Statements
CNO Financial Group | CNO Overview | August 12, 2013 3 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 operatio
Slide 4: Non-GAAP Measures
CNO Financial Group | CNO Overview | August 12, 2013 4 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 measures and the comparable GAAP measures are
Slide 5: CNO Fundamentals
CNO Financial Group | CNO Overview | August 12, 2013 5 Track record of strong execution Well positioned in the growing and underserved retirement and middle-income market Building core value drivers Well capitalized and generating significant excess capital CNO Fundamentals
Slide 6: Track Record of Execution
CNO Financial Group | CNO Overview | August 12, 2013 6 194% 73% 69% CNO Peer Group S&P Life and Health Track Record of Execution Total Return Since YE2009* *As of market close on 8/2/13 Reset Business Mix Financial Foundation Return Value To Shareholders Invest in Growth Peers - AFL, AIZ, AMP, GNW,
Slide 7: What Differentiates CNO?
CNO Financial Group | CNO Overview | August 12, 2013 7 What Differentiates CNO? Focus on serving the needs of our retirement and middle- income target market, a market that is fast growing and underserved Exclusive distribution ‒ Consistent with market focus ‒ We have “pricing” influence ‒ Track r
Slide 8: Fast Growing, Underserved and Unprepared
CNO Financial Group | CNO Overview | August 12, 2013 8 0 20 40 60 80 100 120 140 160 180 200 2010 2020 2030 2040 2050 M il li on s Age 45 - 54 Age 55 - 64 Age 65+ CNO’s Target Market Source: Census Data Population Growth in Our Market The Opportunity Fast Growing, Underserved and Unprepared “Over th
Slide 9: Investment in the Business
CNO Financial Group | CNO Overview | August 12, 2013 9 Investment in the Business CNO Investing in marketing, productivity and growth of the agent force Expanding presence by adding new locations and geographies Developing and launching new products to meet the needs of our target market Dri
Slide 10: CNO's Financial Strategy
CNO Financial Group | CNO Overview | August 12, 2013 10 CNO’s Financial Strategy • Investments in distribution and product expansion • Diverse margins drive stable growth • Active in-force management Grow Earnings & ROE • Balanced mix of protection business with disciplined return hurdles • Maximize
Slide 11: Segment Earnings
CNO Financial Group | CNO Overview | August 12, 2013 11 $(9.1) $3.3 $(2.7) $3.0 $(3.6) $0.6 $(2.6) $3.2 $(5.4) $1.2 $1.9 $10.4 $16.5 $3.6 $2.6 $72.5 $80.6 $77.7 $71.3 $76.6 $33.9 $33.9 $34.6 $29.4 $30.3 2Q12 3Q12 4Q12 1Q13 2Q13 Corporate CP OCB BLC WN ($ millions) * A non-GAAP measure. See the Appen
Slide 12: Capital Strategy
CNO Financial Group | CNO Overview | August 12, 2013 12 $294 $347 $423 $445 $161 $203 $294 $230 332% 358% 367% 376% 2010 2011 2012 2Q13 Capital to Holding Company from Insurance Subs Holding Company Liquidity RBC Debt to Cap xAOCI*** 21.9% 18.3% 20.7% 18.9% ($ millions) Capital Strategy Forward Capi
Slide 13: 2Q13 Capital Generation and Deployment
CNO Financial Group | CNO Overview | August 12, 2013 13 Interest $25 Holdco Exp & Other $10 Debt Repayment / Financing Costs $46 Common Stock Dividends $11 Securities Repurchases $184 2Q13 Capital Generation and Deployment ($ in millions) 2Q YTD Sources and Uses Highlights Generated over $500mm of
Slide 14: Returning Capital to our Shareholders
CNO Financial Group | CNO Overview | August 12, 2013 14 Returning Capital to our Shareholders CNO Since initiating the share buyback program, repurchased equivalent of 85 million shares, leading to a 28%* reduction in weighted average diluted shares outstanding Cumulative investment of $776mm in
Slide 15: ROE Progression
CNO Financial Group | CNO Overview | August 12, 2013 15 ROE Progression CNO Calculated on a trailing 4 quarter basis and excluding AOCI and NOL 2Q13 ROE includes the impact from 3Q12 charges related to litigation and interest rates 2Q annualized and normalized results illustrate run-rate ROE p
Slide 16: CNO: 2013 Initiatives Support 2015 Milestones
CNO Financial Group | CNO Overview | August 12, 2013 16 Grow sales, premium, distribution and product portfolio Drive toward efficiencies in operations and leveraging expertise across the enterprise Expand ROE through increased earnings and effective use of capital while reducing volatility
Slide 17: Q&A
CNO Financial Group | CNO Overview | August 12, 2013 17 Q&A
Slide 18: Appendix
CNO Financial Group | CNO Overview | August 12, 2013 18 Appendix
Slide 19: Loss Recognition & Cash Flow Testing
CNO Financial Group | CNO Overview | August 12, 2013 19 Loss Recognition & Cash Flow Testing 2012 Statutory Cash Flow Testing 2012 GAAP Loss Recognition Testing Aggregate testing margins remain strong Testing margin increased in 2012 ↑ - ASU 2010-26 ↑ - Net growth from new business (+6%) ↓ - Low
Slide 20: Information Related to Certain Non-GAAP Financial Measures
CNO Financial Group | CNO Overview | August 12, 2013 20 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 amoun
Slide 21: Significant items impact on 2Q2012 net operating income
CNO Financial Group | CNO Overview | August 12, 2013 21 The table below summarizes the financial impact of significant items on our 2Q2012 net operating income. Management believes that identifying the impact of these items enhances the understanding of our operating results (dollars in millions). N
Slide 22: Significant items impact on 3Q2012 net operating income
CNO Financial Group | CNO Overview | August 12, 2013 22 The table below summarizes the financial impact of significant items on our 3Q2012 net operating income. Management believes that identifying the impact of these items enhances the understanding of our operating results (dollars in millions). N
Slide 23: Significant items impact on 4Q2012 net operating income
CNO Financial Group | CNO Overview | August 12, 2013 23 The table below summarizes the financial impact of significant items on our 4Q2012 net operating income. Management believes that identifying the impact of these items enhances the understanding of our operating results (dollars in millions). N
Slide 24: Significant item impact on 1Q2013 net operating income
CNO Financial Group | CNO Overview | August 12, 2013 24 The table below summarizes the financial impact of the significant item on our 1Q2013 net operating income. Management believes that identifying the impact of this item enhances the understanding of our operating results (dollars in millions).
Slide 25: Significant items impact on 2Q2013 net operating income
CNO Financial Group | CNO Overview | August 12, 2013 25 The table below summarizes the financial impact of the significant items on our 2Q2013 net operating income. Management believes that identifying the impact of these items enhances the understanding of our operating results (dollars in millions
Slide 26: Quarterly Earnings
CNO Financial Group | CNO Overview | August 12, 2013 26 Quarterly Earnings CNO *Management believes that an analysis of earnings before net realized investment gains (losses), fair value changes in embedded derivative liabilities, equity in earnings of certain non-strategic investments and earnings
Slide 27: Information Related to Certain Non-GAAP Financial Measures
CNO Financial Group | CNO Overview | August 12, 2013 27 Information Related to Certain Non-GAAP Financial Measures 4Q10 4Q11 4Q12 2Q13 Corporate notes payable 998.5$ 857.9$ 1,004.2$ 905.7$ Total shareholders' equity 3,811.6 4,613.8 5,049.3 4,581.4 Total capital 4,810.1$ 5,471.7$ 6,053.5$ 5,487.1$ Co
Slide 28: Information Related to Certain Non-GAAP Financial Measures
CNO Financial Group | CNO Overview | August 12, 2013 28 Information Related to Certain Non-GAAP Financial Measures Operating return measures Management believes that an analysis of return before loss on extinguishment of debt, net realized gains or losses, fair value changes due to fluctuations in t
Slide 29: Information Related to Certain Non-GAAP Financial Measures
CNO Financial Group | CNO Overview | August 12, 2013 29 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 measur
Slide 30: Information Related to Certain Non-GAAP Financial Measures
CNO Financial Group | CNO Overview | August 12, 2013 30 Information Related to Certain Non-GAAP Financial Measures 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, 2
Slide 31: Information Related to Certain Non-GAAP Financial Measures
CNO Financial Group | CNO Overview | August 12, 2013 31 Information Related to Certain Non-GAAP Financial Measures A reconciliation of average allocated capital (for the purpose of determining return on allocated capital), excluding accumulated other comprehensive income (loss) and net operating los
Slide 32: Information Related to Certain Non-GAAP Financial Measures
CNO Financial Group | CNO Overview | August 12, 2013 32 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 sharehold
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