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Corporate Snapshot

Corporate Snapshot

ECONOMIC

Financial Performance

Total revenues (millions)

Net operating income (millions)1, a

Diluted operating earnings per share1, a

Dividends declared per share

Total assets (millions)a

Operating retuon equity, as adjusted1, a

Book value per diluted share1, a

Net investment income (millions)

Client assets in brokerage and advisory (millions)

Fee revenue (millions)2

Life Insurance

Collected premiums (millions)

New annualized premium (millions)3

Health Insurance

Collected premiums (millions)

New annualized premium (millions)3

Annuities

Collected premiums (millions)

2022

$3,576.8

$273.9

$2.33

$0.55

$33,339.2

8.6%

$29.90

$1,015.9

$2,636.7

$169.3

$911.8

$193.1

$1,608.4

$164.3

$1,604.6

2021

$4,122.2

$365.6

$2.79

$0.51

$36,204.4

12.1%

$26.86

$1,420.7

$2,898.5

$147.6

$895.8

$190.5

$1,659.5

$164.1

$1,400.4

2020

$3,821.1

$362.3

$2.53

$0.47

$35,339.9

12.9%

$23.95

$1,222.5

$1,793.8

$104.5

$839.6

$169.9

$1,691.6

$154.5

$1,165.0

2019

$4,015.8

$290.0

$1.85

$0.43

$33,630.9

10.7%

$22.09

$1,362.9

$1,515.0

$87.5

$811.2

$151.3

$1,708.2

$195.3

$1,306.4

2018

$4,313.5

$303.1

$1.83

$0.39

$31,439.8

9.8%

$19.52

$1,306.2

$1,104.9

$49.8

$794.8

$147.5

$1,825.8

$183.7

$1,164.5

SOCIAL

2022

2021

2020

2019

2018

Workforce Data

Total full-time associates (approximately)

Percent women in workforce

Percent people of color in workforce

Percent women in middle management positions

Percent people of color in middle management positions

Percent women in vice president and higher positions

Percent people of color in vice president and higher positions

Associate BRGs

Agent Data

Size of total agent force (approximately)4

Exclusive producing agent count5

Registered agents6

Supplier Management

Supplier code of conduct policy (Y/N)

And Diversity

Investment Portfolio

Responsible investment policy (Y/N)

Proxy voting guidelines (Y/N)

Signatory to UN PRI (Y/N)

Impact investments (Y/N)

Human Rights

Equal employment opportunity policy (Y/N)

Ethics

Code of business conduct (Y/N)

24/7 ethics hotline (Y/N)

Whistleblowing and non-retaliation policy (Y/N)

Community

Total community impact of philanthropic efforts (millions)

Total hours volunteered by associates to corporate-sponsored

and personal community service projects

3,400

53%

33%

39%

21%

32%

10%

5

8,900

4,336

695

Y

Y

Y

Y

Y

Y

Y

Y

Y

$2.6

10,500

3,400

52%

30%

35%

20%

28%

8%

4

9,200

4,455

655

Y

Y

Y

Y

Y

Y

Y

Y

Y

$2.5

8,500

3,400

52%

34%

34%

18%

30%

8%

4

9,500

5,051

641

Y

Y

Y

Y

Y

Y

Y

Y

Y

$2.0

5,500

3,300

52%

30%

34%

20%

30%

8%

4

8,200

5,373

610

N

N

Y

N

Y

Y

Y

Y

Y

$2.3

10,400

3,300

52%

27%

32%

15%

21%

6%

1

7,400

5,122

560

N

N

Y

N

Y

Y

Y

Y

Y

$2.4

11,200

211393

GOVERNANCE7

2022

2021

2020

2019

2018

Board Composition

Size of the board (number of nominees elected at the annual meeting)

and Independence

Board average age

Mandatory requirement age (Y/N)

Average director tenure

Independence of committees (other than Executive and Investment

Committees) (Y/N)

Independent chair (Y/N)

Board Diversity

Number of women on the board

Percent of directors who are women

Number of women committee chairs

Number of directors with racial/ethnic diversity

Percent of directors with racial/ethnic diversity

Board and

Number of board and committee meetings during the calendar year

Committee Meetings

Number of directors attending less than 75 percent of meetings

during the calendar year

Executive sessions (Y/N)

Stockholder Rights

Annual election of directors (Y/N)

Majority voting standard for director elections (Y/N)

Single voting class (Y/N)

Proxy access (Y/N)

Shareholder engagement program (Y/N)

Section 382 Shareholder Rights Plan (Y/N)

Executive Compensation

CEO pay ratio disclosure

Clawback provision for executive compensation (Y/N)

Double-trigger vesting upon change in control (Y/N)

CEO stock ownership guidelines (Y/N)

Senior executive member stock ownership guidelines (Y/N)

Director stock ownership guidelines (Y/N)

9

9

10

9

63

66

66

65

N

N

N

N

3

6

5.5

5.0

Y

Y

Y

Y

Y

Y

Y

Y

2

2

2

2

22%

22%

20%

22%

1

2

2

2

2

2

2

1

22%

22%

20%

11%

44

43

46

50

0

0

0

0

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

9

66

N

6.0

Y

Y

2

22%

1

1

11%

42

0

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

ENVIRONMENTAL

2022

2021

2020

2019

2018

Climate

CDP carbon disclosures (Y/N)

Environmental policy (Y/N)

Board oversight of ESG (Y/N)

GHG Emissions

GHG emissions inventory (Y/N)

Emissions reduction initiatives (Y/N)

N

Y

Y

Y

Y

N

Y

Y

Y

Y

N

Y

Y

Y

Y

N

N

Y

N

N

N

N

Y

N

N

SUSTAINABILITY DISCLOSURES

2022

2021

2020

2019

2018

Disclosure Frameworks

GRI disclosure (Y/N)

SASB disclosure (Y/N)

TCFD disclosure (Y/N)

N

Y

Y

N

Y

Y

N

Y

Y

N

N

N

N

N

N

1 A non-GAAP financial measure. See pages 3-6 for a reconciliation to the corresponding GAAP measure.

  1. Represents fee revenue from the sales of third-party insurance products; services provided by WBD; fee revenue earned by Optavise (formerly known as DirectPath prior to its name change in April 2022); fees generated by our broker-dealer and registered investment advisor.
  2. Measured by new annualized premium for life and health products, which includes 10% of single premium whole life deposits and 100% of all other premiums (excluding annuities). Medicare Advantage sales are not comparable to other sales and are therefore excluded in all periods.
  3. Monthly average of exclusive agents that have submitted at least one policy in the month in the fourth quarter and the full year average of independent partner agents.
  4. Monthly average of exclusive agents that have submitted at least one policy in the month in the fourth quarter.
  5. Registered agents are dually licensed as insurance agents and financial representatives who can buy and sell securities for clients, and/or investment advisors who can provide ongoing investment advice for clients.
  6. Information is as of the annual meeting held immediately following the stated year, unless otherwise indicated. Data on director membership represents nominees for such annual meeting.
  1. Such amounts are prior to the adoption of ASU 2018-12 related to targeted improvements to the accounting for long-duration insurance contracts which was effective January 1, 2023.

INFORMATION RELATED TO CERTAIN NON-GAAP FINANCIAL MEASURES

Net operating income is defined as net income before: (i) net realized investment gains or losses from sales, impairments and the change in allowance for credit losses, net of related amortization and taxes; (ii) net change in market value of investments recognized in earnings, net of taxes; (iii) fair value changes due to fluctuations in the interest rates used to discount embedded derivative liabilities related to our fixed indexed annuities, net of related amortization and taxes; (iv) fair value changes related to the agent deferred compensation plan, net of taxes; (v) loss related to reinsurance transaction 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. 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 from net operating income (and related per share amounts) to net income is as follows (dollars in millions, except per share amounts):

2022

2021

2020

2019

2018

Net income (loss) applicable to common stock

Non-operating items:

Net realized investment (gains) losses from sales and impairments, net of related amortization

Net change in market value of investments recognized in earnings

Fair value changes in embedded derivative liabilities, net of related amortization

Fair value changes related to the agent deferred compensation plan

Loss related to reinsurance transaction

Loss on extinguishment of debt

Other

Non-operating (income) loss before taxes

Income tax (expense) benefit

On non-operating (income) loss

Valuation allowance for deferred tax assets and other tax items

Net non-operating (income) loss

Net operating income (a non-GAAP financial measure)

Per diluted share:

Net income (loss)

Net realized investment (gains) losses from sales and impairments (net of related amortization and taxes)

Net change in market value of investments recognized in earnings (net of taxes)

Fair value changes in embedded derivative liabilities (net of related amortization and taxes)

Fair value changes related to the agent deferred compensation plan (net of taxes)

Loss related to reinsurance transaction (net of taxes)

Loss on extinguishment of debt

Valuation allowance for deferred tax assets and other tax items

Other

Net operating income (a non-GAAP financial measure)

$396.8

58.8

73.2

(247.2)

(48.9)

-

-

3.9

(160.2)

(37.3)

-

(122.9)

$273.9

$3.37

0.38

0.48

(1.61)

(0.32)

-

-

-

0.03

$2.33

$441.0

(34.8)

17.4

(67.2)

(8.9)

-

-

(3.6)

(97.1)

(21.7)

-

(75.4)

$365.6

$3.36

(0.20)

0.10

(0.40)

(0.05)

-

-

-

(0.02)

$2.79

$301.8

31.1

2.7

79.1

16.3

-

-

(9.7)

119.5

25.0

34.0

60.5

$362.3

$2.11

0.17

0.02

0.44

0.09

-

-

(0.24)

(0.06)

$2.53

$409.4

(2.1)

(25.5)

81.4

20.4

-

7.3

12.6

94.1

19.8

193.7

(119.4)

$290.0

$2.61

(0.01)

(0.13)

0.41

0.10

-

0.04

(1.23)

0.06

$1.85

$(315.0)

(37.9)

48.8

(55.5)

(11.9)

704.2

-

(1.7)

646.0

135.7

(107.8)

618.1

$303.1

$(1.90)

(0.18)

0.23

(0.27)

(0.06)

4.00

-

0.02

(0.01)

$1.83

A reconciliation of operating income and shares used to calculate basic and diluted operating earnings per share is as follows: (dollars in millions, except per-share amounts, and shares in thousands)

2022

2021

2020

2019

2018a

Operating income

$273.9

$365.6

$362.3

Weighted average shares outstanding for basic earnings per share

115,733

128,400

142,096

Effect of dilutive securities on weighted average shares:

Stock options, restricted stock and performance units

1,984

2,726

1,068

Weighted average shares outstanding for diluted earnings per share

117,717

131,126

143,164

Net operating income per diluted share

$2.33

$2.79

$2.53
  1. Equivalent common shares of 2,104 were not included in the diluted weighted average shares outstanding due to the net loss recognized in 2018.

$290.0

156,040

1,108

157,148

$1.85

$303.1

165,457

-

165,457

$1.83

INFORMATION RELATED TO CERTAIN NON-GAAP FINANCIAL MEASURES

Management also believes that operating retuon equity, excluding accumulated other comprehensive income and net operating loss carryforwards, enhances the understanding of our operating results.

This non-GAAP financial measure also differs from retuon equity because accumulated other comprehensive income (loss) has been excluded from the value of equity used to determine this ratio. Management believes this non-GAAP financial measure is useful because it removes the volatility that arises from changes in accumulated other comprehensive income (loss). Such volatility is often caused by changes in the estimated fair value of our investment portfolio resulting from changes in general market interest rates rather than the business decisions made by management.

In addition, our equity includes the value of significant net operating loss carryforwards (included in income tax assets). In accordance with GAAP, these assets are not discounted, and accordingly will not provide a retuto 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 and the comparability of these measures from period to period.

Operating retumeasures are used in measuring the performance of our business units and are used as a basis for incentive compensation.

The calculations of: (i) operating retuon equity, excluding accumulated other comprehensive income (loss) and net operating loss carryforwards (a non-GAAP financial measure); and (ii) retuon equity are as follows (dollars in millions):

2022

2021

2020

2019

2018

Net operating income

Net income (loss)

Average common equity, excluding accumulated other comprehensive income (loss) and net operating loss carryforwards (a non-GAAP financial measure)

Average common shareholders' equity

Operating retuon equity, excluding accumulated other comprehensive income (loss) and net operating loss carryforwards (a non-GAAP financial measure)

Retuon equity

$273.9

$396.8

$3,176.0

$2,632.8

8.6%

15.1%

$365.6

$441.0

$3,026.0

$5,197.4

12.1%

8.5%

$362.3

$301.8

$2,812.4

$4,665.4

12.9%

6.5%

$290.0

$409.4

$2,703.9

$4,166.8

10.7%

9.8%

$303.1

$(315.0)

$3,086.7

$4,200.3

9.8%

(7.5)%

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 shareholders' equity, is as follows (dollars in millions):

Consolidated capital, excluding accumulated other comprehensive income (loss) and net operating loss carryforwards (a non-GAAP financial measure)

Net operating loss carryforwards

Accumulated other comprehensive income

Common shareholders' equity

4Q17

3,225.6

409.8

1,212.1

$4,847.5

1Q18

2Q18

3Q18

4Q18

Consolidated capital, excluding accumulated other comprehensive income (loss) and net operating loss carryforwards (a non-GAAP financial measure)

Net operating loss carryforwards

Accumulated other comprehensive income

Common shareholders' equity

$3,318.7

404.2

894.3

$4,617.2

$3,366.0

388.7

700.2

$4,454.9

$2,705.8

510.6

403.5

$3,619.9

$2,687.3

505.9

177.7

$3,370.9

1Q19

2Q19

3Q19

4Q19

Consolidated capital, excluding accumulated other comprehensive income (loss) and net operating loss carryforwards (a non-GAAP financial measure)

Net operating loss carryforwards

Accumulated other comprehensive income

Common shareholders' equity

$2,703.4

479.6

654.9

$3,837.9

$2,702.9

451.1

1,098.2

$4,252.2

$2,685.0

425.4

1,442.9

$4,553.3

$2,761.9

542.6

1,372.5

$4,677.0

1Q20

2Q20

3Q20

4Q20

Consolidated capital, excluding accumulated other comprehensive income (loss) and net operating loss carryforwards (a non-GAAP financial measure)

Net operating loss carryforwards

Accumulated other comprehensive income

Common shareholders' equity

$2,701.2

469.4

595.2

$3,765.8

$2,784.2

426.8

1,520.2

$4,731.2

$2,905.1

377.2

1,801.6

$5,083.9

$2,956.2

341.9

2,186.1

$5,484.2

1Q21

2Q21

3Q21

4Q21

Consolidated capital, excluding accumulated other comprehensive income (loss) and net operating loss carryforwards (a non-GAAP financial measure)

Net operating loss carryforwards

Accumulated other comprehensive income

Common shareholders' equity

$3,019.5

323.1

1,518.1

$4,860.7

$3,035.6

292.9

1,995.5

$5,324.0

$3,036.3

266.9

1,929.7

$5,232.9

$3,068.9

243.7

1,947.1

$5,259.7

1Q22

2Q22

3Q22

4Q22

Consolidated capital, excluding accumulated other comprehensive income (loss) and net operating loss carryforwards (a non-GAAP financial measure)

Net operating loss carryforwards

Accumulated other comprehensive income (loss)

Common shareholders' equity

$3,072.2

238.2

380.5

$3,690.9

$3,162.3

214.7

(1,165.0)

$2,212.0

$3,272.7

190.9

(2,165.7)

$1,297.9

$3,324.9

169.0

(2,093.1)

$1,400.8

TRAILING FOUR QUARTER AVERAGE

4Q22

4Q21

4Q20

4Q19

4Q18

Consolidated capital, excluding accumulated other comprehensive income (loss) and net operating loss carryforwards (a non-GAAP financial measure)

Net operating loss carryforwards

Accumulated other comprehensive income (loss)

Common shareholders' equity

$3,176.0

212.6

(755.8)

$2,632.8

$3,026.0

293.9

1,877.5

$5,197.4

$2,812.4

428.9

1,424.1

$4,665.4

$2,703.9

470.1

992.8

$4,166.8

$3,086.7

440.4

673.2

$4,200.3

Disclaimer

CNO Financial Group Inc. published this content on 14 July 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 17 July 2023 14:05:43 UTC.

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