CNO Financial Group Reports Third Quarter 2024 Results
Strong third quarter production; Record annuity collected premiums
Significant items(6) positively impacted both net income and net operating income(1) by
"CNO delivered another quarter of excellent net operating income and sales performance, reflecting continued agent force growth, and ongoing strength in our underwriting margins and net investment income," said
"Our sustained sales growth is translating into earnings growth, with operating earnings per share up 26%. All Growth Scorecard performance metrics are up once again. As we advance our growth strategy, we continue to optimize the balance between production, profitability and capital management."
"CNO has a unique and differentiated position to serve the middle-income market through our products, distribution capabilities and proven track record of execution. We enter the fourth quarter with momentum, supported by favorable demographic trends, a supportive macroeconomic environment and our strong financial position."
Third Quarter 2024 Highlights (as compared to the corresponding period in the prior year unless otherwise stated)
- Annuity collected premiums up 25%; Policyholder and client assets up 12%
- Medicare Supplement new annualized premiums ("NAP")(4) up 15%; Medicare Advantage sales up 26%
- Producing agent counts in the Consumer Division and Worksite Division up 5% and 17%, respectively
- Raising full-year guidance for earnings and cash flow
- Returned
$106.8 million to shareholders - Book value per share was
$25.86 ; Book value per diluted share, excluding accumulated other comprehensive loss,(2) was$35.84 - Return on equity ("ROE") of 11.8%; Operating ROE, as adjusted,(5) of 11.7%
FINANCIAL SUMMARY |
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Net operating income, a non-GAAP(a) financial measure, is used consistently by CNO's management to evaluate the operating performance of the company and is a measure commonly used in the life insurance industry. It differs from net income primarily because it excludes certain non-operating items such as net realized investment gains (losses) from sales and change in the allowance for credit losses, changes in fair values of embedded derivatives and market risk benefits and the liability for a deferred compensation plan, and certain significant and unusual items included in net income. Management believes an analysis of net operating income is important in understanding the profitability and operating trends of the Company's business. Net income is the most directly comparable GAAP measure. |
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Per diluted share |
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Quarter ended |
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Quarter ended |
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2024 |
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2023 |
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% change |
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2024 |
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2023 |
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% change |
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Income from insurance products (b) |
1.21 |
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$ 0.76 |
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59 |
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$ 129.2 |
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$ 86.8 |
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49 |
Fee income |
(0.03) |
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(0.03) |
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— |
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(2.7) |
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(2.9) |
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(7) |
Investment income not allocated to product lines (c) |
0.42 |
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0.33 |
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27 |
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45.5 |
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38.4 |
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18 |
Expenses not allocated to product lines |
(0.17) |
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0.07 |
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n/m |
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(18.5) |
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7.5 |
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n/m |
Operating earnings before taxes |
1.43 |
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1.13 |
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153.5 |
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129.8 |
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Income tax expense on operating income |
(0.32) |
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(0.25) |
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28 |
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(34.3) |
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(28.5) |
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20 |
Net operating income (1) |
1.11 |
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0.88 |
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26 |
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119.2 |
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101.3 |
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18 |
Net realized investment losses from sales, impairments |
(0.10) |
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(0.17) |
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(11.1) |
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(20.1) |
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Net change in market value of investments recognized in earnings |
0.11 |
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(0.08) |
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12.3 |
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(9.2) |
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Changes in fair value of embedded derivative liabilities and market risk benefits |
(1.19) |
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0.95 |
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(127.1) |
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109.4 |
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Other |
(0.15) |
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0.05 |
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(16.6) |
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5.7 |
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Non-operating income (loss) before taxes |
(1.33) |
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0.75 |
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(142.5) |
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85.8 |
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Income tax benefit (expense) on non-operating income |
0.31 |
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(0.17) |
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32.6 |
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(19.8) |
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Net non-operating income (loss) |
(1.02) |
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0.58 |
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(109.9) |
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66.0 |
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Net income |
$ 0.09 |
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$ 1.46 |
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$ 9.3 |
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$ 167.3 |
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Weighted average diluted shares outstanding |
107.1 |
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114.5 |
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n/m - not meaningful |
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(a) |
GAAP is defined as accounting principles generally accepted in |
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(b) |
Income from insurance products is the sum of the insurance margins of the annuity, health and life product lines, less expenses allocated to the insurance product lines. It excludes the income from our fee income business, investment income not allocated to product lines, net expenses not allocated to product lines (primarily holding company expenses) and income taxes. Insurance margin is management's measure of the profitability of its annuity, health and life segments' performance and consists of insurance policy income plus allocated investment income less insurance policy benefits, interest credited, commissions, advertising expense and amortization of acquisition costs. |
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(c) |
Investment income not allocated to product lines represents net investment income less: (i) equity returns credited to policyholder account balances; (ii) the investment income allocated to our product lines; (iii) interest expense on notes payable, investment borrowings and financing arrangements; (iv) expenses related to the funding agreement-backed notes ("FABN") program; and (v) certain expenses related to benefit plans that are offset by special-purpose investment income; plus (vi) the impact of annual option forfeitures related to fixed indexed annuity surrenders. |
FINANCIAL SUMMARY (continued) Management vs. GAAP Measures (Dollars in millions, except per share data) (Unaudited) |
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Shareholders' equity, excluding accumulated other comprehensive income (loss), and book value per share, excluding accumulated other comprehensive income (loss), are non-GAAP measures that are utilized by management to view the business without the effect of accumulated other comprehensive income (loss) which is primarily attributable to fluctuations in interest rates associated with fixed maturities, available for sale. Management views the business in this manner because the Company has the ability and generally, the intent, to hold investments to maturity and meaningful trends can be more easily identified without the fluctuations. In addition, shareholders' equity excludes net operating loss carryforwards in our non-GAAP return on equity measures as such assets are not discounted and, accordingly, will not provide a return to shareholders until after it is realized as a reduction to taxes that would otherwise be paid. Management believes that excluding this value from the equity component of this measure enhances the understanding of the effect these non-discounted assets have on operating returns. |
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Quarter ended |
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2024 |
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2023 |
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Trailing twelve months return on equity (a) |
11.8 % |
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14.5 % |
Trailing twelve months operating return on equity as adjusted to exclude accumulated other comprehensive |
11.7 % |
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8.5 % |
Trailing twelve months operating return, excluding significant items, on equity as adjusted to exclude |
10.5 % |
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8.0 % |
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Shareholders' equity |
$ 2,687.8 |
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$ 1,890.1 |
Accumulated other comprehensive loss |
1,116.0 |
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1,956.7 |
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Shareholders' equity, excluding accumulated other comprehensive loss |
3,803.8 |
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3,846.8 |
Net operating loss carryforwards |
(273.9) |
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(102.6) |
Shareholders' equity, excluding accumulated other comprehensive loss and net operating loss carryforwards |
$ 3,529.9 |
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$ 3,744.2 |
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Book value per diluted share |
$ 25.32 |
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$ 16.58 |
Accumulated other comprehensive loss |
10.52 |
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17.17 |
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Book value per diluted share, excluding accumulated other comprehensive loss (a non-GAAP financial measure) (2) |
$ 35.84 |
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$ 33.75 |
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(a) |
Calculated using average shareholders' equity for the measurement period. |
Non-Operating Items
Net investment losses in 3Q24 were
During 3Q24 and 3Q23, we recognized an increase (decrease) in earnings of
During 3Q24 and 3Q23, we recognized an increase (decrease) in earnings of
Other non-operating items in 3Q24 included a charge of
INVESTMENT PORTFOLIO (Dollars in millions) |
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Fixed maturities, available for sale, at amortized cost by asset class as of |
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Investment |
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Below |
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Total |
Corporate securities |
$ 13,083.3 |
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$ 641.9 |
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$ 13,725.2 |
Certificates of deposit |
470.0 |
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— |
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470.0 |
United States Treasury securities and obligations of |
210.8 |
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— |
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210.8 |
States and political subdivisions |
3,213.6 |
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9.6 |
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3,223.2 |
Foreign governments |
103.2 |
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— |
|
103.2 |
Asset-backed securities |
1,479.4 |
|
99.1 |
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1,578.5 |
Agency residential mortgage-backed securities |
812.5 |
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— |
|
812.5 |
Non-agency residential mortgage-backed securities |
1,252.0 |
|
418.0 |
(a) |
1,670.0 |
Collateralized loan obligations |
1,083.2 |
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— |
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1,083.2 |
Commercial mortgage-backed securities |
2,285.8 |
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84.0 |
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2,369.8 |
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Total |
$ 23,993.8 |
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$ 1,252.6 |
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$ 25,246.4 |
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(a) |
Certain structured securities rated below investment grade by Nationally Recognized Statistical Rating Organizations may be assigned a NAIC 1 or NAIC 2 designation based on the cost basis of the security relative to estimated recoverable amounts as determined by the |
The fair value of CNO's available for sale fixed maturity portfolio was
Statutory (based on non-GAAP measures) and GAAP Capital Information
The consolidated statutory risk-based capital ratio of our
During 3Q24, we repurchased
Unrestricted cash and investments held by our holding company were
Book value per common share was
The debt-to-capital ratio was 40.5% and 34.0% at
Return on equity for the trailing four quarters ended
In this news release, CNO includes non-GAAP measures to enhance investors' understanding of management's view of the business. The non-GAAP measures are not a substitute for GAAP, but rather a supplement to increase transparency by providing a broader perspective. CNO's definitions of non-GAAP measures may differ from other companies' definitions. More detailed information including various GAAP and non-GAAP measurements are located at CNOinc.com in the Investors section under SEC Filings.
CAUTION REGARDING FORWARD-LOOKING STATEMENTS:
This press release may contain forward-looking statements within the meaning of federal securities laws. These prospective statements reflect management's current expectations, but are not guarantees of future performance. Accordingly, please refer to CNO's cautionary statement regarding forward-looking statements, and the business environment in which the Company operates, contained in the Company's Form 10-K for the year ended
EARNINGS RELEASE CONFERENCE CALL WEBCAST:
The Company will host a conference call to discuss results on
To participate by dial-in, please register at https://www.netroadshow.com/events/login?show=7b707407&confId=72581. Upon registering, you will be provided with call details and a registrant ID used to track attendance on the conference call. Reminders will also be sent to registered participants via email.
For those investors who prefer to listen to the call online, we will be broadcasting the call live via webcast. The event can be accessed through the Investors section of the company's website: ir.CNOinc.com. Participants should go to the website at least 15 minutes before the event to register and download any necessary audio software.
ABOUT
CONSOLIDATED BALANCE SHEET (Dollars in millions) (unaudited) |
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ASSETS |
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Investments: |
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Fixed maturities, available for sale, at fair value (net of allowance for credit losses: |
$ 23,724.7 |
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$ 21,506.2 |
Equity securities at fair value |
120.5 |
|
96.9 |
Mortgage loans (net of allowance for credit losses: |
2,372.7 |
|
2,064.1 |
Policy loans |
133.3 |
|
128.5 |
Trading securities |
217.4 |
|
222.7 |
Investments held by variable interest entities (net of allowance for credit losses: |
250.1 |
|
768.6 |
Other invested assets |
1,595.5 |
|
1,353.4 |
Total investments |
28,414.2 |
|
26,140.4 |
Cash and cash equivalents - unrestricted |
1,164.7 |
|
774.5 |
Cash and cash equivalents held by variable interest entities |
80.6 |
|
114.5 |
Accrued investment income |
276.2 |
|
251.5 |
Present value of future profits |
165.7 |
|
180.7 |
Deferred acquisition costs |
2,100.9 |
|
1,944.4 |
Reinsurance receivables (net of allowance for credit losses: |
3,906.7 |
|
4,040.7 |
Market risk benefit asset |
96.4 |
|
75.4 |
Income tax assets, net |
788.7 |
|
936.2 |
Assets held in separate accounts |
3.3 |
|
3.1 |
Other assets |
648.0 |
|
641.1 |
Total assets |
$ 37,645.4 |
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$ 35,102.5 |
LIABILITIES AND SHAREHOLDERS' EQUITY |
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Liabilities: |
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Liabilities for insurance products: |
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Policyholder account balances |
$ 17,240.5 |
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$ 15,667.8 |
Future policy benefits |
12,179.6 |
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11,928.2 |
Market risk benefit liability |
1.0 |
|
7.4 |
Liability for life insurance policy claims |
59.9 |
|
62.1 |
Unearned and advanced premiums |
217.4 |
|
218.9 |
Liabilities related to separate accounts |
3.3 |
|
3.1 |
Other liabilities |
951.0 |
|
848.8 |
Investment borrowings |
2,188.9 |
|
2,189.3 |
Borrowings related to variable interest entities |
283.1 |
|
820.8 |
Notes payable – direct corporate obligations |
1,832.9 |
|
1,140.5 |
Total liabilities |
34,957.6 |
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32,886.9 |
Commitments and Contingencies |
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Shareholders' equity: |
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Common stock ( |
1.0 |
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1.1 |
Additional paid-in capital |
1,715.9 |
|
1,891.5 |
Accumulated other comprehensive loss |
(1,116.0) |
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(1,576.8) |
Retained earnings |
2,086.9 |
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1,899.8 |
Total shareholders' equity |
2,687.8 |
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2,215.6 |
Total liabilities and shareholders' equity |
$ 37,645.4 |
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$ 35,102.5 |
CONSOLIDATED STATEMENT OF OPERATIONS (Dollars in millions, except per share data) (unaudited) |
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Three months ended |
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Nine months ended |
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2024 |
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2023 |
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2024 |
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2023 |
Revenues: |
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Insurance policy income |
$ 645.0 |
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$ 626.0 |
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$ 1,914.9 |
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$ 1,879.8 |
Net investment income: |
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General account assets |
366.3 |
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324.8 |
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1,019.9 |
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925.1 |
Policyholder and other special-purpose portfolios |
87.6 |
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(33.0) |
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312.3 |
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109.4 |
Investment gains (losses): |
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Realized investment losses |
(13.1) |
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(21.6) |
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(49.4) |
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(58.0) |
Other investment gains (losses) |
14.3 |
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(7.7) |
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41.2 |
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(21.2) |
Total investment gains (losses) |
1.2 |
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(29.3) |
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(8.2) |
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(79.2) |
Fee revenue and other income |
29.5 |
|
59.0 |
|
113.4 |
|
141.2 |
Total revenues |
1,129.6 |
|
947.5 |
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3,352.3 |
|
2,976.3 |
Benefits and expenses: |
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Insurance policy benefits |
726.2 |
|
399.1 |
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1,926.4 |
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1,574.7 |
Liability for future policy benefits remeasurement (gain) loss |
7.3 |
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(0.1) |
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(29.1) |
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8.8 |
Change in fair value of market risk benefits |
(16.1) |
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(33.8) |
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(30.0) |
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(36.6) |
Interest expense |
68.0 |
|
62.6 |
|
192.4 |
|
174.9 |
Amortization of deferred acquisition costs and present value of future profits |
64.0 |
|
57.0 |
|
185.9 |
|
168.5 |
Other operating costs and expenses |
269.2 |
|
247.1 |
|
798.9 |
|
775.3 |
Total benefits and expenses |
1,118.6 |
|
731.9 |
|
3,044.5 |
|
2,665.6 |
Income before income taxes |
11.0 |
|
215.6 |
|
307.8 |
|
310.7 |
Income tax expense |
1.7 |
|
48.3 |
|
69.9 |
|
70.5 |
Net income |
$ 9.3 |
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$ 167.3 |
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$ 237.9 |
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$ 240.2 |
Earnings per common share: |
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Basic: |
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Weighted average shares outstanding |
105,101,000 |
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112,689,000 |
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107,265,000 |
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113,836,000 |
Net income |
$ .09 |
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$ 1.48 |
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$ 2.22 |
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$ 2.11 |
Diluted: |
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Weighted average shares outstanding |
107,131,000 |
|
114,462,000 |
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109,078,000 |
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115,613,000 |
Net income |
$ .09 |
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$ 1.46 |
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$ 2.18 |
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$ 2.08 |
NOTES |
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(1) |
Management believes that an analysis of net income applicable to common stock before: (i) net realized investment gains or losses from sales, impairments and the change in allowance for credit losses, net of taxes; (ii) net change in market value of investments recognized in earnings, net of taxes; (iii) changes in fair value of embedded derivative liabilities and market risk benefits related to our fixed indexed annuities, net of taxes; (iv) fair value changes related to the agent deferred compensation plan, net of taxes; (v) gains or losses related to material reinsurance transactions, net of taxes; (vi) loss on extinguishment of debt, net of taxes; (vii) changes in the valuation allowance for deferred tax assets and other tax items; and (viii) other non-operating items consisting primarily of earnings attributable to variable interest entities, net of taxes ("net operating income," a non-GAAP financial measure) is important to evaluate the financial performance of the company, and is a key measure commonly used in the life insurance industry. Management uses this measure to evaluate performance because the items excluded from net operating income can be affected by events that are unrelated to the company's underlying fundamentals. A reconciliation of net operating income to net income applicable to common stock is provided in the table on page 2. Additional information concerning this non-GAAP measure is included in our periodic filings with the |
(2) |
Book value per diluted share reflects the potential dilution that could occur if outstanding stock options were exercised and restricted stock and performance units were vested. The dilution from options, restricted shares and performance units is calculated using the treasury stock method. Under this method, we assume the proceeds from the exercise of the options (or the unrecognized compensation expense with respect to restricted stock and performance units) will be used to purchase shares of our common stock at the closing market price on the last day of the period. In addition, the calculation of this non-GAAP measure differs from the corresponding GAAP measure because accumulated other comprehensive income (loss) has been excluded from the value of capital used to determine this measure. Management believes this non-GAAP measure is useful because it removes the volatility that arises from changes in the unrealized appreciation (depreciation) of our investments. |
(3) |
The calculation of this non-GAAP measure differs from the corresponding GAAP measure because accumulated other comprehensive income (loss) has been excluded from the value of capital used to determine this measure. Management believes this non-GAAP measure is useful because it removes the volatility that arises from changes in the unrealized appreciation (depreciation) of our investments. |
(4) |
Measured by new annualized premiums for life and health products, which includes 10% of single premium whole life deposits and 100% of all other premiums (excluding annuities). Sales of third-party products are excluded. |
(5) |
The following summarizes the calculations of: (i) operating return on equity as adjusted to exclude accumulated other comprehensive income (loss) and net operating loss carryforwards (a non-GAAP financial measure); (ii) operating return, excluding significant items, as adjusted to exclude accumulated other comprehensive income (loss) and net operating loss carryforwards (a non-GAAP financial measure); and (iii) return on equity are as follows (dollars in millions): |
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Trailing twelve months ended |
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3Q24 |
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3Q23 |
Net operating income |
$ 425.2 |
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$ 305.1 |
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Net operating income, excluding significant items |
$ 380.0 |
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$ 287.7 |
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Net income |
$ 274.2 |
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$ 278.2 |
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Average common equity, excluding accumulated other |
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comprehensive income (loss) and net operating loss |
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carryforwards (a non-GAAP financial measure) |
$ 3,620.8 |
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$ 3,582.8 |
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Average common shareholders' equity |
$ 2,325.3 |
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$ 1,918.3 |
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Operating return on equity as adjusted to exclude accumulated |
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other comprehensive income (loss) and net operating loss |
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carryforwards (a non-GAAP financial measure) |
11.7 % |
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8.5 % |
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Operating return, excluding significant items, on equity as adjusted |
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to exclude accumulated other comprehensive income (loss) and |
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net operating loss carryforwards (a non-GAAP financial measure) |
10.5 % |
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8.0 % |
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Return on equity |
11.8 % |
|
14.5 % |
The following summarizes: (i) net operating income; (ii) significant items; (iii) net operating income, excluding significant items; and (iv) net income (loss) (dollars in millions): |
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Net operating |
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Net operating |
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income, |
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income, |
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excluding |
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Net |
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excluding |
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significant |
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income - |
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Net operating |
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Significant |
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significant |
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items - trailing |
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Net |
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trailing |
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income |
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items |
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items (a) |
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four quarters |
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income (loss) |
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four quarters |
4Q22 |
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$ 82.9 |
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$ (0.5) |
(b) |
$ 82.4 |
|
$ 342.5 |
|
$ 38.0 |
|
$ 630.6 |
1Q23 |
|
58.6 |
|
— |
|
58.6 |
|
336.6 |
|
(0.8) |
|
446.4 |
2Q23 |
|
62.3 |
|
— |
|
62.3 |
|
281.2 |
|
73.7 |
|
286.8 |
3Q23 |
|
101.3 |
|
(16.9) |
(c) |
84.4 |
|
287.7 |
|
167.3 |
|
278.2 |
4Q23 |
|
133.9 |
|
(26.4) |
(d) |
107.5 |
|
312.8 |
|
36.3 |
|
276.5 |
1Q24 |
|
57.5 |
|
— |
|
57.5 |
|
311.7 |
|
112.3 |
|
389.6 |
2Q24 |
|
114.6 |
|
— |
|
114.6 |
|
364.0 |
|
116.3 |
|
432.2 |
3Q24 |
|
119.2 |
|
(18.8) |
(e) |
100.4 |
|
380.0 |
|
9.3 |
|
274.2 |
|
|
|
|
|
|
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|
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|
(a) See note (6) for additional information. |
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(b) Comprised of |
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(c) Comprised of $21.7 million of legal recoveries, net of expenses and increased legal accruals, net of tax expense of |
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(d) Comprised of |
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(e) Comprised of |
A reconciliation of pre-tax operating earnings (a non-GAAP financial measure) to net income is as follows (dollars in millions): |
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Twelve months ended |
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|
|
|
3Q24 |
|
3Q23 |
Pre-tax operating earnings (a non-GAAP financial measure) |
$ 549.0 |
|
$ 394.4 |
||
Income tax expense |
(123.8) |
|
(89.3) |
||
Net operating income |
425.2 |
|
305.1 |
||
Non-operating items: |
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|
|
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Net realized investment losses from sales, impairments and change in allowance for credit losses |
(36.2) |
|
(91.3) |
||
Net change in market value of investments recognized in earnings |
38.2 |
|
(24.1) |
||
Changes in fair value of embedded derivative liabilities and market risk benefits |
(170.9) |
|
78.3 |
||
Fair value changes related to the agent deferred compensation plan |
(10.3) |
|
7.0 |
||
Other |
(15.9) |
|
(5.1) |
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Non-operating loss before taxes |
(195.1) |
|
(35.2) |
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Income tax benefit on non-operating loss |
44.1 |
|
8.3 |
||
Net non-operating loss |
(151.0) |
|
(26.9) |
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Net income |
$ 274.2 |
|
$ 278.2 |
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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): |
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1Q22 |
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2Q22 |
|
3Q22 |
|
4Q22 |
Consolidated capital, excluding accumulated other comprehensive |
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|
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|
income (loss) and net operating loss carryforwards |
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|
|
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|
|
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(a non-GAAP financial measure) |
$ 3,141.7 |
|
$ 3,329.0 |
|
$ 3,510.3 |
|
$ 3,557.1 |
|
Net operating loss carryforwards |
238.2 |
|
214.7 |
|
190.9 |
|
169.0 |
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Accumulated other comprehensive loss |
(561.5) |
|
(1,415.8) |
|
(1,837.8) |
|
(1,957.3) |
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Common shareholders' equity |
$ 2,818.4 |
|
$ 2,127.9 |
|
$ 1,863.4 |
|
$ 1,768.8 |
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|
1Q23 |
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2Q23 |
|
3Q23 |
|
4Q23 |
Consolidated capital, excluding accumulated other comprehensive |
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|
income (loss) and net operating loss carryforwards |
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|
|
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|
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(a non-GAAP financial measure) |
$ 3,543.8 |
|
$ 3,603.0 |
|
$ 3,744.2 |
|
$ 3,712.8 |
|
Net operating loss carryforwards |
152.4 |
|
126.3 |
|
102.6 |
|
79.6 |
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Accumulated other comprehensive loss |
(1,664.4) |
|
(1,733.5) |
|
(1,956.7) |
|
(1,576.8) |
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Common shareholders' equity |
$ 2,031.8 |
|
$ 1,995.8 |
|
$ 1,890.1 |
|
$ 2,215.6 |
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1Q24 |
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2Q24 |
|
3Q24 |
|
|
Consolidated capital, excluding accumulated other comprehensive |
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|
|
||
|
income (loss) and net operating loss carryforwards |
|
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|
|
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|
|
|
|
(a non-GAAP financial measure) |
$ 3,536.8 |
|
$ 3,596.7 |
|
$ 3,529.9 |
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|
Net operating loss carryforwards |
311.2 |
|
296.5 |
|
273.9 |
|
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Accumulated other comprehensive loss |
(1,480.3) |
|
(1,464.3) |
|
(1,116.0) |
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Common shareholders' equity |
$ 2,367.7 |
|
$ 2,428.9 |
|
$ 2,687.8 |
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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): |
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Trailing four quarter average |
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3Q24 |
|
3Q23 |
Consolidated capital, excluding accumulated other comprehensive |
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|
income (loss) and net operating loss carryforwards |
|
|
|
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|
(a non-GAAP financial measure) |
$ 3,620.8 |
|
$ 3,582.8 |
|
Net operating loss carryforwards |
218.9 |
|
148.6 |
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Accumulated other comprehensive loss |
(1,514.4) |
|
(1,813.1) |
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Common shareholders' equity |
$ 2,325.3 |
|
$ 1,918.3 |
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(6) |
The tables below summarize the financial impact of significant items on our net operating income. Management believes that identifying the impact of these items enhances the understanding of our operating results (dollars in millions, except per share data). |
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Three months ended |
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Actual |
|
Significant |
|
Excluding items |
Insurance product margin |
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Annuity margin |
|
$ 91.1 |
|
$ (36.2) |
(a) |
$ 54.9 |
Health margin |
|
127.8 |
|
8.2 |
(a) |
136.0 |
Life margin |
|
63.3 |
|
0.7 |
(a) |
64.0 |
Total insurance product margin |
|
282.2 |
|
(27.3) |
|
254.9 |
Allocated expenses |
|
(153.0) |
|
— |
|
(153.0) |
Income from insurance products |
|
129.2 |
|
(27.3) |
|
101.9 |
Fee income |
|
(2.7) |
|
— |
|
(2.7) |
Investment income not allocated to product lines |
|
45.5 |
|
— |
|
45.5 |
Expenses not allocated to product lines |
|
(18.5) |
|
2.9 |
(b) |
(15.6) |
Operating earnings before taxes |
|
153.5 |
|
(24.4) |
|
129.1 |
Income tax (expense) benefit on operating income |
|
(34.3) |
|
5.6 |
|
(28.7) |
Net operating income |
|
$ 119.2 |
|
$ (18.8) |
|
$ 100.4 |
|
|
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|
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Net operating income per diluted share |
|
$ 1.11 |
|
$ (0.17) |
|
$ 0.94 |
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(a) |
Comprised of |
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(b) |
Comprised of |
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Three months ended |
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Actual |
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Significant |
|
Excluding items |
Insurance product margin |
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|
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Annuity margin |
|
$ 63.6 |
|
$ (12.9) |
(a) |
$ 50.7 |
Health margin |
|
146.4 |
|
(22.3) |
(a) |
124.1 |
Life margin |
|
64.6 |
|
1.3 |
(a) |
65.9 |
Total insurance product margin |
|
274.6 |
|
(33.9) |
|
240.7 |
Allocated expenses |
|
(138.8) |
|
— |
|
(138.8) |
Income from insurance products |
|
135.8 |
|
(33.9) |
|
101.9 |
Fee income |
|
17.8 |
|
— |
|
17.8 |
Investment income not allocated to product lines |
|
38.3 |
|
— |
|
38.3 |
Expenses not allocated to product lines |
|
(19.8) |
|
— |
|
(19.8) |
Operating earnings before taxes |
|
172.1 |
|
(33.9) |
|
138.2 |
Income tax (expense) benefit on operating income |
|
(38.2) |
|
7.5 |
|
(30.7) |
Net operating income |
|
$ 133.9 |
|
$ (26.4) |
|
$ 107.5 |
|
|
|
|
|
|
|
Net operating income per diluted share |
|
$ 1.18 |
|
$ (0.23) |
|
$ 0.95 |
|
|
|
|
|
|
|
|
|
(a) |
Comprised of |
|
|
Three months ended |
||||
|
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|
||||
|
|
Actual |
|
Significant |
|
Excluding items |
Insurance product margin |
|
|
|
|
|
|
Annuity margin |
|
$ 57.0 |
|
$ — |
|
$ 57.0 |
Health margin |
|
123.2 |
|
— |
|
123.2 |
Life margin |
|
59.8 |
|
— |
|
59.8 |
Total insurance product margin |
|
240.0 |
|
— |
|
240.0 |
Allocated expenses |
|
(153.2) |
|
— |
|
(153.2) |
Income from insurance products |
|
86.8 |
|
— |
|
86.8 |
Fee income |
|
(2.9) |
|
— |
|
(2.9) |
Investment income not allocated to product lines |
|
38.4 |
|
— |
|
38.4 |
Expenses not allocated to product lines |
|
7.5 |
|
(21.7) |
(a) |
(14.2) |
Operating earnings before taxes |
|
129.8 |
|
(21.7) |
|
108.1 |
Income tax (expense) benefit on operating income |
|
(28.5) |
|
4.8 |
|
(23.7) |
Net operating income |
|
$ 101.3 |
|
$ (16.9) |
|
$ 84.4 |
|
|
|
|
|
|
|
Net operating income per diluted share |
|
$ 0.88 |
|
$ (0.14) |
|
$ 0.74 |
|
|
|
|
|
|
|
|
|
(a) |
Comprised of |
|
|
Three months ended |
||||
|
|
|
||||
|
|
Actual |
|
Significant |
|
Excluding items |
Insurance product margin |
|
|
|
|
|
|
Annuity margin |
|
$ 50.8 |
|
$ 3.2 |
(a) |
$ 54.0 |
Health margin |
|
140.4 |
|
(18.3) |
(a) |
122.1 |
Life margin |
|
43.3 |
|
14.4 |
(a) |
57.7 |
Total insurance product margin |
|
234.5 |
|
(0.7) |
|
233.8 |
Allocated expenses |
|
(149.1) |
|
— |
|
(149.1) |
Income from insurance products |
|
85.4 |
|
(0.7) |
|
84.7 |
Fee income |
|
9.2 |
|
— |
|
9.2 |
Investment income not allocated to product lines |
|
25.2 |
|
— |
|
25.2 |
Expenses not allocated to product lines |
|
(12.8) |
|
— |
|
(12.8) |
Operating earnings before taxes |
|
107.0 |
|
(0.7) |
|
106.3 |
Income tax (expense) benefit on operating income |
|
(24.1) |
|
0.2 |
|
(23.9) |
Net operating income |
|
$ 82.9 |
|
$ (0.5) |
|
$ 82.4 |
|
|
|
|
|
|
|
Net operating income per diluted share |
|
$ 0.71 |
|
$ — |
|
$ 0.71 |
|
|
|
|
|
|
|
|
|
(a) |
Comprised of |
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