CNO Financial Group Inc (NYSE: CNO) today announced that for the quarter ended December 31 2021 net income was $1158 million or $093 per diluted share compared to net income of $1118 million or $080 per diluted share in 4Q20 Net operating income (1) in 4Q21 was $1085 million or $087 per diluted share compared to $860 million or $061 per diluted share in 4Q20

Net income for the year ended December 31 2021 was $4410 million or $336 per diluted share compared to $3018 million or $211 per diluted share in 2020 Net operating income (1) for the year ended December 31 2021 was $3656 million or $279 per diluted share compared to $3623 million or $253 per diluted share in 2020

Solid fourth quarter results capped off another strong year demonstrating CNO's continued agility navigating the pandemic and the successful execution of our strategic priorities said Gary C Bhojwani chief executive officer While visibility into COVID's ongoing impact on our business remains unclear the dedication of our associates and agents and the strength of our model will enable us to continue to drive value for all of the constituents we serve

Full Year 2021 Highlights

• Earnings per diluted share of $336 up 59% compared to 2020
• Operating (1) EPS of $279 up 10% from 2020
• Total new annualized premiums (NAP) (4) up 9% from 2020
• Direct-to-consumer life insurance NAP (4) up 16% from 2020 exceeding $100 million for first time up 40% from 2019
• Annuity collected premiums up 20% from 2020
• Returned $4681 million to shareholders in the form of share repurchases (a record $4024 million) and dividends ($657 million)
• Return on equity (ROE) of 85%; operating ROE as adjusted (6) of 121%

Fourth Quarter 2021 Highlights

• Earnings per diluted share of $093 in 4Q21 up 16% compared to 4Q20
• Operating (1) EPS of $087 in 4Q21 up 43% compared to 4Q20
• Total NAP (4) up 2% from 4Q20
• Direct-to-consumer life insurance NAP (4) up 21% from 4Q20
• Annuity collected premiums up 15% from 4Q20
• Returned $1157 million to shareholders in the form of share repurchases ($1000 million) and dividends ($157 million); reduced weighted average share count by 11% since 4Q20
• Book value per share was $4369 up 8% from 4Q20; book value per diluted share excluding accumulated other comprehensive income (2) was $2686 up 12% from 4Q20

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INSURANCE OPERATIONS

Annuity products accounted for 37 percent of the Company's margin for the quarter

Annuity premiums collected increased 15 percent and annuity account values increased 7 percent in 4Q21 compared to 4Q20

Health products accounted for 51 percent of the Company's insurance margin for the quarter and 66 percent of insurance policy income

Life products accounted for 12 percent of the Company's insurance margin for the quarter and 33 percent of insurance policy income

Sales of health products were down 3 percent and sales of life products were up 7 percent in 4Q21 compared to 4Q20

Total allocated expenses were $1433 million down 12 percent from the year-ago quarter

Total insurance margins were favorably impacted by $259 million and $118 million in the quarters ended December 31 2021 and 2020 respectively due to adjustments arising from our comprehensive annual actuarial review of assumptions  See pages 19 and 21 for summaries of the impacts of significant items

In addition total insurance margins were favorably impacted by approximately $16 million and $19 million in the quarters ended December 31 2021 and 2020 respectively due to the estimated impacts of COVID-19

Total annuity margins were favorably impacted by $269 million and $161 million in the quarters ended December 31 2021 and 2020 respectively due to adjustments arising from our comprehensive annual actuarial review of assumptions  See pages 19 and 21 for summaries of the impacts of significant items

In addition total annuity margins were favorably (unfavorably) impacted by approximately $1 million and $(1) million in the quarters ended December 31 2021 and 2020 respectively due to the estimated impacts of COVID-19

Total health margins were favorably impacted by approximately $35 million in each of the quarters ended December 31 2021 and 2020 due to the estimated impacts of COVID-19

Total life margins were unfavorably impacted by $10 million and $43 million in the quarters ended December 31 2021 and 2020 respectively due to adjustments arising from our comprehensive annual actuarial review of assumptions  See pages 19 and 21 for summaries of the impact of significant items

In addition total life margins were unfavorably impacted by approximately $20 million and $15 million in the quarters ended December 31 2021 and 2020 respectively due to the estimated impacts of COVID-19

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The fair value of CNO's available for sale fixed maturity portfolio was $248 billion compared with an amortized cost of $219 billion  Net unrealized gains were comprised of gross unrealized gains of $30 billion and gross unrealized losses of $41 million  The allowance for credit losses was $76 million at December 31 2021

At both amortized cost and fair value 92 percent of fixed maturities available for sale were rated investment grade

Non-Operating Items
Net investment gains in 4Q21 were $47 million (net of related amortization) including the unfavorable change in the allowance for credit losses of $17 million which was recorded in earnings  Net investment gains in 4Q20 were $126 million (net of related amortization) including the favorable change in the allowance for credit losses of $129 million which was recorded in earnings

During 4Q21 and 4Q20 we recognized an increase (decrease) in earnings of $(121) million and $60 million respectively due to the net change in market value of investments recognized in earnings

During 4Q21 and 4Q20 we recognized an increase in earnings of $191 million and $163 million respectively resulting from changes in the estimated fair value of embedded derivative liabilities related to our fixed index annuities net of related amortization  Such amounts include the impacts of changes in market interest rates used to determine the derivative's estimated fair value

In 4Q21 and 4Q20 other non-operating items included a decrease in earnings of $43 million and $31 million respectively for the mark-to-market change in the agent deferred compensation plan liability which was impacted by changes in the underlying actuarial assumptions used to value the liability We recognize the mark-to-market change in the estimated value of this liability through earnings as assumptions change

Statutory (based on non-GAAP measures) and GAAP Capital Information
Our consolidated statutory risk-based capital ratio was estimated at 386% at December 31 2021 reflecting estimated 4Q21 statutory operating income of $88 million (and $289 million during 2021) and the payment of insurance company dividends to the holding company of $3283 million during 2021 (none of which was paid in 4Q21)

During the fourth quarter of 2021 we repurchased $1000 million of common stock under our securities repurchase program  We repurchased 41 million common shares at an average cost of $2469 per share  As of December 31 2021 we had 1204 million shares outstanding and had authority to repurchase up to an additional $3669 million of our common stock  During 4Q21 dividends paid on common stock totaled $157 million

Unrestricted cash and investments held by our holding company were $249 million at December 31 2021 compared to $388 million at December 31 2020

Book value per common share was $4369 at December 31 2021 compared to $4054 at December 31 2020  Book value per diluted share excluding accumulated other comprehensive income (2) was $2686 at December 31 2021 compared to $2395 at December 31 2020 

The debt-to-capital ratio was 178 percent and 172 percent at December 31 2021 and 2020 respectively  Our debt-to-total capital ratio excluding accumulated other comprehensive income (3) was 256 percent at both December 31 2021 and 2020

Return on equity for the years ended December 31 2021 and 2020 was 85% and 65% respectively  Operating return excluding significant items on equity excluding accumulated other comprehensive income and net operating loss carryforwards (6) for the years ended December 31 2021 and 2020 was 118% and 120% respectively

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 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 CNOinccom 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 2020 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 CNOinccom 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 February 9 2022 at 11:00 am 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 http://wwwdirecteventregcom/registration/event/7844578 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: irCNOinccom  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 and Washington National  Our customers work hard to save for the future and we help protect their health income and retirement needs with 32 million policies and $36 billion in total assets Our 3400 associates 4500 exclusive agents and 4000 independent partner agents guide individuals families and businesses through a lifetime of financial decisions For more information visit CNOinccom

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