CNO Financial Group Reports Second Quarter 2025 Results
CNO Financial Group (NYSE:CNO) reported second quarter 2025 net income of $91.8 million ($0.91 per diluted share), compared to $116.3 million ($1.06 per diluted share) in 2Q24. Net operating income was $87.5 million ($0.87 per diluted share), down from $114.6 million ($1.05 per diluted share) in 2Q24.
Key operational highlights include: 17% increase in total new annualized premiums, 22% growth in Life NAP, 11% growth in Health NAP, and 19% increase in annuity collected premiums. The company returned $116.7 million to shareholders and maintained a strong statutory risk-based capital ratio of 378%.
Book value per share reached $25.92, while book value per diluted share excluding accumulated other comprehensive loss was $38.05, up 6%. The company achieved an operating ROE of 11.8% and remains on track to meet its 2025-2027 return on equity targets.
CNO Financial Group (NYSE:CNO) ha riportato un utile netto del secondo trimestre 2025 pari a 91,8 milioni di dollari (0,91 dollari per azione diluita), rispetto a 116,3 milioni di dollari (1,06 dollari per azione diluita) nel 2° trimestre 2024. L’utile operativo netto è stato di 87,5 milioni di dollari (0,87 dollari per azione diluita), in calo rispetto a 114,6 milioni di dollari (1,05 dollari per azione diluita) nel 2° trimestre 2024.
I principali dati operativi includono: un aumento del 17% dei premi annualizzati totali, una crescita del 22% dei premi annualizzati Vita, un incremento dell’11% dei premi annualizzati Salute e un aumento del 19% dei premi raccolti sulle rendite. L’azienda ha restituito 116,7 milioni di dollari agli azionisti e ha mantenuto un solido indice di capitale basato sul rischio statutario del 378%.
Il valore contabile per azione ha raggiunto 25,92 dollari, mentre il valore contabile per azione diluita, escludendo le perdite complessive accumulate, è stato di 38,05 dollari, con un aumento del 6%. L’azienda ha ottenuto un ROE operativo dell’11,8% e resta in linea per raggiungere gli obiettivi di rendimento del capitale proprio per il periodo 2025-2027.
CNO Financial Group (NYSE:CNO) reportó un ingreso neto en el segundo trimestre de 2025 de 91,8 millones de dólares (0,91 dólares por acción diluida), en comparación con 116,3 millones de dólares (1,06 dólares por acción diluida) en el 2T24. El ingreso operativo neto fue de 87,5 millones de dólares (0,87 dólares por acción diluida), descendiendo desde 114,6 millones de dólares (1,05 dólares por acción diluida) en el 2T24.
Los aspectos operativos clave incluyen: un aumento del 17% en primas anuales nuevas totales, un crecimiento del 22% en primas anuales nuevas de Vida, un incremento del 11% en primas anuales nuevas de Salud y un aumento del 19% en primas cobradas de anualidades. La compañía devolvió 116,7 millones de dólares a los accionistas y mantuvo una sólida ratio de capital basado en riesgo estatutario del 378%.
El valor contable por acción alcanzó 25,92 dólares, mientras que el valor contable por acción diluida, excluyendo pérdidas acumuladas por otros conceptos integrales, fue de 38,05 dólares, un aumento del 6%. La empresa logró un ROE operativo del 11,8% y sigue en camino de cumplir sus objetivos de retorno sobre el capital para 2025-2027.
CNO Financial Group (NYSE:CNO)는 2025년 2분기 순이익으로 9,180만 달러 (희석 주당 0.91달러)를 보고했으며, 이는 2024년 2분기의 1억 1,630만 달러 (희석 주당 1.06달러)와 비교됩니다. 순영업이익은 8,750만 달러 (희석 주당 0.87달러)로 2024년 2분기의 1억 1,460만 달러 (희석 주당 1.05달러)에서 감소했습니다.
주요 운영 성과로는 총 신규 연간화 보험료 17% 증가, 생명보험 신규 연간화 보험료 22% 성장, 건강보험 신규 연간화 보험료 11% 성장, 연금 수령 보험료 19% 증가가 포함됩니다. 회사는 1억 1,670만 달러를 주주들에게 환원했으며, 378%의 견고한 법정 위험기반 자본 비율을 유지했습니다.
주당 장부 가치는 25.92달러에 도달했으며, 누적 기타 포괄손실을 제외한 희석 주당 장부 가치는 38.05달러로 6% 상승했습니다. 회사는 11.8%의 영업 자기자본이익률(ROE)을 달성했으며 2025-2027년 자기자본이익률 목표 달성을 위한 순항 중입니다.
CNO Financial Group (NYSE:CNO) a annoncé un bénéfice net au deuxième trimestre 2025 de 91,8 millions de dollars (0,91 dollar par action diluée), contre 116,3 millions de dollars (1,06 dollar par action diluée) au 2T24. Le revenu net d’exploitation s’est élevé à 87,5 millions de dollars (0,87 dollar par action diluée), en baisse par rapport à 114,6 millions de dollars (1,05 dollar par action diluée) au 2T24.
Les faits saillants opérationnels clés incluent : une augmentation de 17 % des primes annuelles nouvelles totales, une croissance de 22 % des primes annuelles nouvelles Vie, une croissance de 11 % des primes annuelles nouvelles Santé, et une hausse de 19 % des primes collectées sur les rentes. La société a reversé 116,7 millions de dollars aux actionnaires et a maintenu un solide ratio de capital réglementaire basé sur le risque de 378 %.
La valeur comptable par action a atteint 25,92 dollars, tandis que la valeur comptable par action diluée hors pertes globales autres cumulées s’est élevée à 38,05 dollars, en hausse de 6 %. La société a réalisé un ROE opérationnel de 11,8 % et reste en bonne voie pour atteindre ses objectifs de rendement des capitaux propres pour la période 2025-2027.
CNO Financial Group (NYSE:CNO) meldete für das zweite Quartal 2025 einen Nettogewinn von 91,8 Millionen US-Dollar (0,91 US-Dollar je verwässerter Aktie), verglichen mit 116,3 Millionen US-Dollar (1,06 US-Dollar je verwässerter Aktie) im 2. Quartal 2024. Der operative Nettogewinn betrug 87,5 Millionen US-Dollar (0,87 US-Dollar je verwässerter Aktie), gegenüber 114,6 Millionen US-Dollar (1,05 US-Dollar je verwässerter Aktie) im 2. Quartal 2024.
Wesentliche operative Highlights umfassen: ein 17%iger Anstieg der gesamten neuen annualisierten Prämien, 22% Wachstum bei Life NAP, 11% Wachstum bei Health NAP und 19% Zuwachs bei den eingezogenen Rentenprämien. Das Unternehmen gab 116,7 Millionen US-Dollar an die Aktionäre zurück und hielt eine starke aufsichtsrechtliche risikobasierte Kapitalquote von 378% aufrecht.
Der Buchwert je Aktie erreichte 25,92 US-Dollar, während der Buchwert je verwässerter Aktie ohne kumulierte sonstige umfassende Verluste bei 38,05 US-Dollar lag, ein Anstieg um 6%. Das Unternehmen erzielte eine operative Eigenkapitalrendite (ROE) von 11,8% und ist auf Kurs, seine Eigenkapitalrenditeziele für 2025–2027 zu erreichen.
- Total new annualized premiums up 17% year-over-year
- Strong growth across segments with Life NAP up 22% and Health NAP up 11%
- Annuity collected premiums increased 19%
- Client assets in brokerage and advisory up 27%
- Returned $116.7 million to shareholders
- Maintained robust capital position with 378% risk-based capital ratio
- Operating ROE of 11.8%, showing sustained profitability
- Net income decreased 21% year-over-year to $91.8 million
- Net operating income declined 24% to $87.5 million
- Investment income not allocated to product lines down 25%
- Net investment losses of $21.8 million in Q2 2025
Insights
CNO posted mixed Q2 results with 17% premium growth but 17% YoY EPS decline; maintains healthy 11.2% operating ROE.
CNO Financial delivered solid premium growth in Q2 2025, with total new annualized premiums increasing
However, profitability metrics showed some pressure compared to the previous year. Net operating income declined to
The company's investment portfolio faced some challenges with
Capital management remains a priority with
Most importantly, CNO's operating ROE excluding significant items reached
Strong production; Solid financial results; On track to deliver 2025-2027 ROE targets
"Building on our strong second quarter and first half results, CNO remains on track to achieve our full-year 2025-2027 return on equity targets," said Gary C. Bhojwani, chief executive officer. "Our consistent, repeatable results demonstrate the steady execution of our strategic plan and continue to position us for sustained, profitable growth."
"Our business fundamentals remain strong. This quarter marked our twelfth consecutive quarter of sustained sales momentum underpinned by growing underwriting margins and investment income. Second quarter 2024 earnings were elevated relative to our typical run rate, thereby impacting 2025 comparables. Operating earnings per share are up
"CNO remains uniquely positioned to serve the growing needs of the middle-income market with our diverse products and distribution. With considerable momentum and favorable demographic tailwinds, we are well-equipped to navigate the evolving economic environment and continue to drive improved profitability."
Second Quarter 2025 Highlights (as compared to the corresponding period in the prior year unless otherwise stated)
- Total new annualized premiums ("NAP")(4) up
17% ; Total Life NAP up22% ; Total Health NAP up11% - Consumer Division NAP up
17% ; Worksite Division NAP up16% - Annuity collected premiums up
19% ; Client assets in brokerage and advisory up27% - Returned
$116.7 million - Book value per share was
$25.92 $38.05 6% - Return on equity ("ROE") of
11.9% ; Operating ROE(5) of11.8%
FINANCIAL SUMMARY
Quarter End
(Amounts in millions, except per share data)
(Unaudited)
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 as defined in note (1). 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.
Per diluted share | |||||||||||||
Quarter ended | Quarter ended | ||||||||||||
June 30, | June 30, | ||||||||||||
2025 | 2024 | % | 2025 | 2024 | % | ||||||||
Income from insurance products (b) | 1.03 | $ 1.10 | (6) | $ 103.0 | $ 120.5 | (15) | |||||||
Fee income | 0.01 | 0.01 | — | 0.8 | 0.8 | — | |||||||
Investment income not allocated to product lines (c) | 0.33 | 0.41 | (20) | 33.8 | 44.8 | (25) | |||||||
Expenses not allocated to product lines | (0.25) | (0.16) | 56 | (25.3) | (17.5) | 45 | |||||||
Operating earnings before taxes | 1.12 | 1.36 | 112.3 | 148.6 | |||||||||
Income tax expense on operating income | (0.25) | (0.31) | (19) | (24.8) | (34.0) | (27) | |||||||
Net operating income (1) | 0.87 | 1.05 | (17) | 87.5 | 114.6 | (24) | |||||||
Net realized investment losses from sales, | (0.22) | (0.20) | (21.8) | (21.9) | |||||||||
Net change in market value of investments | 0.03 | 0.04 | 3.4 | 4.7 | |||||||||
Changes in fair value of embedded derivative | 0.25 | 0.15 | 25.2 | 16.8 | |||||||||
Other | (0.01) | 0.02 | (1.1) | 2.4 | |||||||||
Non-operating income before taxes | 0.05 | 0.01 | 5.7 | 2.0 | |||||||||
Income tax expense on non-operating income | (0.01) | — | (1.4) | (0.3) | |||||||||
Net non-operating income | 0.04 | 0.01 | 4.3 | 1.7 | |||||||||
Net income | $ 0.91 | $ 1.06 | $ 91.8 | $ 116.3 | |||||||||
Weighted average diluted shares outstanding | 100.4 | 109.3 | |||||||||||
____________________ | |
(a) | GAAP is defined as accounting principles generally accepted in |
(b) | Income from insurance products is the sum of the insurance product 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 product 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. |
(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. Investment income not allocated to product lines includes investment income on investments in excess of amounts allocated to product lines, investments held by our holding companies, the spread we earn from our federal home loan bank ("FHLB") investment borrowing and FABN programs and variable components of investment income (including call and prepayment income, adjustments to returns on structured securities due to cash flow changes, income (loss) from company-owned life insurance ("COLI") and alternative investments income not allocated to product lines), net of interest expense on corporate debt and financing arrangements. The spread earned from our FHLB investment borrowing and FABN programs includes the investment income on the matched assets less: (i) interest on investment borrowings related to the FHLB investment borrowing program; (ii) interest credited on funding agreements; and (iii) amortization of deferred acquisition costs related to the FABN program. |
FINANCIAL SUMMARY (continued)
Management vs. GAAP Measures
(Dollars in millions, except per share data)
(Unaudited)
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.
___________________________________________________________________________________________________
Quarter ended | |||
June 30, | |||
2025 | 2024 | ||
Trailing four quarters: | |||
Net Income | $ 305.5 | $ 432.2 | |
Net operating income (a non-GAAP financial measure) | 425.8 | 407.3 | |
Net operating income, excluding significant items | 401.7 | 364.0 | |
Average of each of the trailing four quarters average: | |||
Shareholders' equity | $ 2,558.5 | $ 2,171.4 | |
Accumulated other comprehensive loss | 1,271.2 | 1,653.2 | |
Shareholders' equity, excluding accumulated other comprehensive loss | 3,829.7 | 3,824.6 | |
Net operating loss carryforwards | (232.4) | (176.2) | |
Shareholders' equity, excluding accumulated other comprehensive loss and net operating loss | $ 3,597.3 | $ 3,648.4 | |
Ratios: | |||
Return on equity | 11.9 % | 19.9 % | |
Operating return on equity (a non-GAAP financial measure) (5) | 11.8 % | 11.2 % | |
Operating return on equity, excluding significant items (a non-GAAP financial measure) (5) | 11.2 % | 10.0 % | |
Shareholders' equity | $ 2,522.7 | $ 2,428.9 | |
Accumulated other comprehensive loss | 1,252.7 | 1,464.3 | |
Shareholders' equity, excluding accumulated other comprehensive loss | 3,775.4 | 3,893.2 | |
Basic shares outstanding | 97,319,000 | 106,513,566 | |
Diluted shares outstanding | 99,221,445 | 108,140,009 | |
Book value per share | $ 25.92 | $ 22.80 | |
Book value per diluted share | $ 25.42 | $ 22.46 | |
Accumulated other comprehensive loss per diluted share | 12.63 | 13.54 | |
Book value per diluted share, excluding accumulated other comprehensive loss (a non-GAAP financial | $ 38.05 | $ 36.00 | |
Non-Operating Items
Net investment losses in 2Q25 were
During 2Q25 and 2Q24, we recognized an increase in earnings of
In 2Q24, we recognized an increase in earnings of
During 2Q25 and 2Q24, we recognized an increase in earnings of
Other non-operating items in 2Q25 included
INVESTMENT PORTFOLIO
(Dollars in millions)
Fixed maturities, available for sale, at amortized cost by asset class as of June 30, 2025 are as follows:
Investment | Below | Total | |||
Corporate securities | 13,380.8 | $ 678.1 | $ 14,058.9 | ||
United States Treasury securities and obligations of | 217.9 | — | 217.9 | ||
States and political subdivisions | 3,318.7 | 23.6 | 3,342.3 | ||
Foreign governments | 113.6 | — | 113.6 | ||
Asset-backed securities | 1,497.2 | 95.8 | 1,593.0 | ||
Agency residential mortgage-backed securities | 910.7 | — | 910.7 | ||
Non-agency residential mortgage-backed securities | 1,282.0 | 326.0 | (a) | 1,608.0 | |
Collateralized loan obligations | 1,091.7 | — | 1,091.7 | ||
Commercial mortgage-backed securities | 2,158.9 | 133.8 | 2,292.7 | ||
Total | $ 23,971.5 | $ 1,257.3 | $ 25,228.8 |
____________________ | |
(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 National Association of Insurance Commissioners (NAIC). |
As of June 30, 2025, 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 2Q25, we repurchased
Unrestricted cash and investments held by our holding company were
Book value per common share was
The debt-to-capital ratio was
Return on equity for the trailing four quarters ended June 30, 2025 and 2024 was
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 December 31, 2024 and any subsequent Form 10-Q or Form 10-K on file with the Securities and Exchange Commission and on the Company's website at CNOinc.com in the Investors section. CNO specifically disclaims any obligation to update or revise any forward-looking statement because of new information, future developments or otherwise.
EARNINGS RELEASE CONFERENCE CALL WEBCAST:
The Company will host a conference call to discuss results on July 29, 2025 at 11:00 a.m. Eastern Time. During the call, we will be referring to a presentation that will be available at the Investors section of the company's website.
To participate by dial-in, please register at https://www.netroadshow.com/events/login/LE9zwo3l1n8LCba0M35GdCBypZJ59DuLjEa. 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 CNO FINANCIAL GROUP
CNO Financial Group, Inc. (NYSE: CNO) secures the future of middle-income America. CNO provides life and health insurance, annuities, financial services and workforce benefits solutions through our family of brands, including Bankers Life, Colonial Penn, Optavise and Washington National. Our customers work hard to save for the future, and we help protect their health, income and retirement needs with 3.2 million policies and
CNO FINANCIAL GROUP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF OPERATIONS (Dollars in millions, except per share data) (unaudited) | |||||||
Three months ended | Six months ended | ||||||
June 30, | June 30, | ||||||
2025 | 2024 | 2025 | 2024 | ||||
Revenues: | |||||||
Insurance policy income | $ 651.3 | $ 641.5 | $ 1,302.0 | $ 1,269.9 | |||
Net investment income: | |||||||
General account assets | 378.3 | 351.7 | 753.4 | 653.6 | |||
Policyholder and other special-purpose portfolios | 105.4 | 57.4 | 41.8 | 224.7 | |||
Investment gains (losses): | |||||||
Realized investment losses | (21.3) | (26.3) | (25.1) | (36.3) | |||
Other investment gains (losses) | 2.9 | 9.1 | (0.1) | 26.9 | |||
Total investment losses | (18.4) | (17.2) | (25.2) | (9.4) | |||
Fee revenue and other income | 34.9 | 32.8 | 83.6 | 83.9 | |||
Total revenues | 1,151.5 | 1,066.2 | 2,155.6 | 2,222.7 | |||
Benefits and expenses: | |||||||
Insurance policy benefits | 658.4 | 574.4 | 1,228.4 | 1,211.0 | |||
Liability for future policy benefits remeasurement loss | (12.8) | (30.0) | (25.0) | (36.4) | |||
Change in fair value of market risk benefits | (10.9) | (5.8) | 4.4 | (24.7) | |||
Interest expense | 59.1 | 64.2 | 121.1 | 124.4 | |||
Amortization of deferred acquisition costs and present value of future | 68.6 | 61.4 | 136.0 | 121.9 | |||
Gain on extinguishment of borrowings related to variable interest | — | — | (1.5) | — | |||
Other operating costs and expenses | 271.1 | 251.4 | 546.4 | 529.7 | |||
Total benefits and expenses | 1,033.5 | 915.6 | 2,009.8 | 1,925.9 | |||
Income before income taxes | 118.0 | 150.6 | 145.8 | 296.8 | |||
Income tax expense | 26.2 | 34.3 | 32.5 | 68.2 | |||
Net income | $ 91.8 | $ 116.3 | $ 113.3 | $ 228.6 | |||
Earnings per common share: | |||||||
Basic: | |||||||
Weighted average shares outstanding | 98,572,000 | 107,731,000 | 99,658,000 | 108,347,000 | |||
Net income | $ 0.93 | $ 1.08 | $ 1.14 | $ 2.11 | |||
Diluted: | |||||||
Weighted average shares outstanding | 100,386,000 | 109,258,000 | 101,728,000 | 110,052,000 | |||
Net income | $ 0.91 | $ 1.06 | $ 1.11 | $ 2.08 | |||
NOTES
(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; (viii) costs related to our three-year project to modernize certain elements of our technology ("TechMod") that are incremental to normal spend and will not recur following implementation, net of taxes; and (ix) other non-operating items including 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. The income tax expense or benefit allocated to the items included in net non-operating income (loss) represents the current and deferred income tax expense or benefit allocated to the items included in non-operating earnings. Management believes this information helps provide a better understanding of the business and a more meaningful analysis of results of our insurance product lines. 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 Securities and Exchange Commission that are available on CNO's website, CNOinc.com, in the Investors section under SEC Filings. |
(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 |
(5) | Operating return on equity and operating return on equity, excluding significant items are calculated as follows: (i) operating return on equity is equal to the trailing four quarters of net operating income(1) divided by average shareholders' equity, excluding accumulated other comprehensive income (loss) and net operating loss carryforwards, for the trailing four quarters; and (ii) operating return on equity, excluding significant items is equal to the trailing four quarters of net operating income(1), excluding significant items, divided by average shareholders' equity, excluding accumulated other comprehensive income (loss) and net operating loss carryforwards, for the trailing four quarters. |
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):
Net operating | ||||||||||||
Net operating | income, | |||||||||||
income, | excluding | Net | ||||||||||
excluding | significant | income - | ||||||||||
Net operating | Significant | significant | items - trailing | Net | trailing | |||||||
income | items | items (a) | four quarters | income (loss) | four quarters | |||||||
3Q23 | $ 101.3 | $ (16.9) | (b) | $ 84.4 | $ 287.7 | $ 167.3 | $ 278.2 | |||||
4Q23 | 133.9 | (26.4) | (c) | 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 | (21.9) | (d) | 97.3 | 376.9 | 9.3 | 274.2 | |||||
4Q24 | 138.0 | 3.1 | (e) | 141.1 | 410.5 | 182.9 | 420.8 | |||||
1Q25 | 81.1 | (5.3) | (f) | 75.8 | 428.8 | 21.5 | 330.0 | |||||
2Q25 | 87.5 | — | 87.5 | 401.7 | 91.8 | 305.5 | ||||||
(a) | See note (6) for additional information. | ||||||||||||
(b) | Comprised of | ||||||||||||
(c) | Comprised of | ||||||||||||
(d) | Comprised of | ||||||||||||
(e) | Comprised of | ||||||||||||
(f) | Comprised of | ||||||||||||
A reconciliation of pre-tax operating earnings (a non-GAAP financial measure) to net income is as follows (dollars in millions):
Trailing four quarters | |||||
2Q25 | 2Q24 | ||||
Pre-tax operating earnings (a non-GAAP financial measure) | $ 544.3 | $ 525.3 | |||
Income tax expense | (118.5) | (118.0) | |||
Net operating income | 425.8 | 407.3 | |||
Non-operating items: | |||||
Net realized investment losses from sales, impairments and change in allowance for credit | (81.2) | (45.2) | |||
Net change in market value of investments recognized in earnings | 15.5 | 16.7 | |||
Changes in fair value of embedded derivative liabilities and market risk benefits | (78.9) | 65.6 | |||
Fair value changes related to the agent deferred compensation plan | 3.1 | — | |||
Other | (13.9) | (3.9) | |||
Non-operating loss before taxes | (155.4) | 33.2 | |||
Income tax benefit on non-operating loss | 35.1 | (8.3) | |||
Net non-operating loss | (120.3) | 24.9 | |||
Net income | $ 305.5 | $ 432.2 | |||
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):
1Q23 | 2Q23 | 3Q23 | 4Q23 | ||||||
Consolidated capital, excluding accumulated other comprehensive | |||||||||
income (loss) and net operating loss carryforwards | |||||||||
(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 | |||||
Accumulated other comprehensive loss | (1,664.4) | (1,733.5) | (1,956.7) | (1,576.8) | |||||
Common shareholders' equity | $ 2,031.8 | $ 1,995.8 | $ 1,890.1 | $ 2,215.6 | |||||
1Q24 | 2Q24 | 3Q24 | 4Q24 | ||||||
Consolidated capital, excluding accumulated other comprehensive | |||||||||
income (loss) and net operating loss carryforwards | |||||||||
(a non-GAAP financial measure) | $ 3,536.8 | $ 3,596.7 | $ 3,529.9 | $ 3,810.0 | |||||
Net operating loss carryforwards | 311.2 | 296.5 | 273.9 | 76.6 | |||||
Accumulated other comprehensive loss | (1,480.3) | (1,464.3) | (1,116.0) | (1,371.4) | |||||
Common shareholders' equity | $ 2,367.7 | $ 2,428.9 | $ 2,687.8 | $ 2,515.2 | |||||
1Q25 | 2Q25 | ||||||||
Consolidated capital, excluding accumulated other comprehensive | |||||||||
income (loss) and net operating loss carryforwards | |||||||||
(a non-GAAP financial measure) | $ 3,498.9 | $ 3,504.3 | |||||||
Net operating loss carryforwards | 295.3 | 271.1 | |||||||
Accumulated other comprehensive loss | (1,239.1) | (1,252.7) | |||||||
Common shareholders' equity | $ 2,555.1 | $ 2,522.7 | |||||||
A reconciliation of consolidated capital, excluding accumulated other comprehensive loss and net operating loss carryforwards (a non-GAAP financial measure) to common shareholders' equity, is as follows (dollars in millions):
Trailing four quarter average | ||||
2Q25 | 2Q24 | |||
Consolidated capital, excluding accumulated other comprehensive | ||||
income (loss) and net operating loss carryforwards | ||||
(a non-GAAP financial measure) | $ 3,597.3 | $ 3,648.4 | ||
Net operating loss carryforwards | 232.4 | 176.2 | ||
Accumulated other comprehensive loss | (1,271.2) | (1,653.2) | ||
Common shareholders' equity | $ 2,558.5 | $ 2,171.4 | ||
(6) | The tables below summarize the financial impact of significant items on our net operating income for the three months ended March 31, 2025 and the quarters during the year ended December 31, 2024 that had significant items impacting 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). |
Three months ended | ||||||
March 31, 2025 | ||||||
Actual | Significant | Excluding items | ||||
Insurance product margin | ||||||
Annuity margin | $ 54.5 | $ — | $ 54.5 | |||
Health margin | 126.2 | — | 126.2 | |||
Life margin | 68.2 | (6.8) | (a) | 61.4 | ||
Total insurance product margin | 248.9 | (6.8) | 242.1 | |||
Allocated expenses | (161.2) | — | (161.2) | |||
Income from insurance products | 87.7 | (6.8) | 80.9 | |||
Fee income | (0.8) | — | (0.8) | |||
Investment income not allocated to product lines | 38.0 | — | 38.0 | |||
Expenses not allocated to product lines | (20.3) | — | (20.3) | |||
Operating earnings before taxes | 104.6 | (6.8) | 97.8 | |||
Income tax (expense) benefit on operating income | (23.5) | 1.5 | (22.0) | |||
Net operating income | $ 81.1 | $ (5.3) | $ 75.8 | |||
Net operating income per diluted share | $ 0.79 | $ (0.05) | $ 0.74 | |||
___________ | |
(a) | Comprised of |
Three months ended | ||||||
December 31, 2024 | ||||||
Actual | Significant | Excluding items | ||||
Insurance product margin | ||||||
Annuity margin | $ 55.0 | $ — | $ 55.0 | |||
Health margin | 130.1 | 3.9 | (a) | 134.0 | ||
Life margin | 68.0 | — | 68.0 | |||
Total insurance product margin | 253.1 | 3.9 | 257.0 | |||
Allocated expenses | (146.1) | — | (146.1) | |||
Income from insurance products | 107.0 | 3.9 | 110.9 | |||
Fee income | 20.6 | — | 20.6 | |||
Investment income not allocated to product lines | 65.3 | — | 65.3 | |||
Expenses not allocated to product lines | (19.0) | — | (19.0) | |||
Operating earnings before taxes | 173.9 | 3.9 | 177.8 | |||
Income tax (expense) benefit on operating income | (35.9) | (0.8) | (36.7) | |||
Net operating income | $ 138.0 | $ 3.1 | $ 141.1 | |||
Net operating income per diluted share | $ 1.31 | $ 0.03 | $ 1.34 | |||
___________ | |
(a) | Comprised of |
Three months ended | ||||||
September 30, 2024 | ||||||
Actual | Significant | Excluding items | ||||
Insurance product margin | ||||||
Annuity margin | $ 91.1 | $ (36.2) | (a) | $ 54.9 | ||
Health margin | 127.8 | 4.3 | (a) | 132.1 | ||
Life margin | 63.3 | 0.7 | (a) | 64.0 | ||
Total insurance product margin | 282.2 | (31.2) | 251.0 | |||
Allocated expenses | (153.0) | — | (153.0) | |||
Income from insurance products | 129.2 | (31.2) | 98.0 | |||
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 | (28.3) | 125.2 | |||
Income tax (expense) benefit on operating income | (34.3) | 6.4 | (27.9) | |||
Net operating income | $ 119.2 | $ (21.9) | $ 97.3 | |||
Net operating income per diluted share | $ 1.11 | $ (0.19) | $ 0.92 | |||
___________ | |
(a) | Comprised of |
(b) | Comprised of |
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SOURCE CNO Financial Group
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