CNO Financial Group, Inc. · NYSE:CNO
CNO Financial — Merger or Acquisition (March 2014)
18 slides from CNO Financial's merger presentation, Mar 3, 2014
Slide 1: CNO to Sell Closed Block Life Insurance Subsidiary to Wilton Re
CNO to Sell Closed Block Life Insurance Subsidiary to Wilton Re March 3, 2014
Slide 2: 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 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 non-GAAP measures and the comparable GAAP measures are included in the Appendix. While management believes t
Slide 4: Today's Announcements
Today’s Announcements CNO announced the sale of Conseco Life Insurance Company (“CLIC”) to Wilton Reassurance Company (“Wilton Re”) The transaction is expected to result in net proceeds of approximately $237* million and encompasses ~$3.4 billion in traditional life, interest-sensitive life, and
Slide 5: Sale of CLIC – Strategic Rationale
Sale of CLIC – Strategic Rationale Sale of CLIC Transfers $3.4bn of Run-off Reserves Favorable pro forma economic impact unlocking An Economic Exit “trapped capital” for reinvestment Reduces exposure to low-for-long rates and Reduce “Beta” natural asset leverage Reduces complexity associated with St
Slide 6: OCB Solutions For $4bn in Run-Off Reserves
OCB Solutions For $4bn in Run-Off Reserves 12/31/13 OCB Net Statutory Reserves ($ millions) OCB – Ceded & Being Sold $550mm of statutory LTC reserves reinsured to Traditional Retained By CNO Beechwood Re - reported in 4Q 2013 results Life $424 Sale of CLIC to Wilton Re encompassing $3.4bn of Ann
Slide 7: Sale of CLIC Subsidiary – Transaction Detail
Sale of CLIC Subsidiary – Transaction Detail Sale & Transition Services Agreement Sale & Transition Intercompany transactions to move A&H CNO Financial Wilton Re business out of CLIC to WNIC, increasing CLIC capital by $36mm Wilton Re purchases CLIC legal entity and pays Washington National Cons
Slide 8: Pro Forma Estimates
Pro Forma Estimates Financial Metric Pro Forma Estimates Purchase Price (1) $237mm Price to Statutory Capital & Surplus (1) 1.5x Estimated Increase to Holding Company Liquidity (2) $125mm Pro Forma GAAP Loss on Sale (3) $(303)mm Pro Forma GAAP Book Value Impact (3) $(447)mm Pro Forma EPS Impact (4)
Slide 9: OCB Solutions Reduce Capital-at-Risk
OCB Solutions Reduce Capital-at-Risk Interest Rate Risk CFT Margin Impact Assuming 70 basis point drop in new money rate indefinitely OCB Reserve Margins: Thin aggregate Loss Recognition Testing 12/31/13 Actual 12/31/13 Pro Forma* and Cash Flow Testing margins for OCB ISL and LTC (~1%) ISL and L
Slide 10: Capital Targets & Excess Capital Deployment
Capital Targets & Excess Capital Deployment Investment-grade ratings dialed in while maintaining our tactical approach to deployment … 2014 Share Repurchases Guidance 2013 2014 Outlook (Revised) RBC 410% ~ 400% v High end of our expected range of $225 to Liquidity $309mm ~ $434mm $300mm absent compe
Slide 11: CNO Moving Forward
CNO Moving Forward Financial Strength – Transactions improve CNO’s overall financial profile, reinforce our investment grade capital position and drive a higher quality ROE Clears the Way for Accelerated Platform Investment – Transitions complex and administratively-challenged businesses allowin
Slide 12: Questions
Questions CNO Financial Group | OCB Solutions | March 3, 2014 12
Slide 13: Appendix
Appendix CNO Financial Group | OCB Solutions | March 3, 2014 13
Slide 14: 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 15: 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, excluding accumulated other comprehensive income (loss), differs from the debt to capital ratio because accumulated other comprehensive
Slide 16: Information Related to Certain Non-GAAP Financial Measures
Information Related to Certain Non-GAAP Financial Measures Pro forma impacts The pro forma impacts are calculated as if the sale of CLIC and the recapture of a traditional life block by Bankers Life had been completed on December 31, 2013. Actual results will vary based on the fair value of CLIC’s i
Slide 17: Information Related to Certain Non-GAAP Financial Measures
Information Related to Certain Non-GAAP Financial Measures Pro forma impacts The following presents the pro forma impact on our operating earnings measures as if the sale of CLIC and the recapture of a traditional life block by Bankers Life had been completed on January 1, 2013 (dollars in millions,
Slide 18: Information Related to Certain Non-GAAP Financial Measures
Information Related to Certain Non-GAAP Financial Measures Operating earnings measures Management believes that an analysis of net income applicable to common stock before loss related to reinsurance transaction, net realized gains or losses, fair value changes due to fluctuations in the interest ra
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