CNO Financial Group Inc (NYSE: CNO) today announced that for the quarter ending September 30 2021 net income was $998 million or $077 per diluted share compared to a net income of $1292 million or $091 per diluted share in 3Q20 Net operating income (1) in 3Q21 was $928 million or $072 per diluted share compared to $1126 million or $079 per diluted share in 3Q20

CNO reported another successful quarter said Gary C Bhojwani chief executive officer We continue to benefit from the outstanding work and customer commitment of our associates and agents Our results reflect the consistent execution of our strategy particularly within our direct-to-consumer business Earnings continued to benefit from deferral of care within our health lines and very strong alternative investment performance We approach the end of the year on solid footing and remain well-positioned to serve our clients and communities and generate value for our shareholders 

Third Quarter 2021 Highlights

• Earnings per diluted share of $077 in 3Q21 down $014 compared to 3Q20
• Operating (1) EPS of $072 in 3Q21 down $007 compared to 3Q20 consistent with the reduced net favorable impacts from COVID-19
• Favorable COVID-19 impact on insurance product margins of $180 million after-tax or $014 per diluted share in 3Q21 down $15 million or $009 per diluted share compared to 3Q20
• Direct-to-consumer life insurance new annualized premiums (NAP) (4) up 13% from 3Q20 up 38% from 3Q19
• Annuity collected premiums up 17% from 3Q20 up 2% from 3Q19
• Returned $1313 million to shareholders in the form of share repurchases ($1150 million) and dividends ($163 million); reduced weighted average share count by 9% since 3Q20
• Book value per share was $4211 up 15% from 3Q20; book value per diluted share excluding accumulated other comprehensive income (2) was $2603 up 11% from 3Q20
• Return on equity (ROE) of 84%; operating ROE as adjusted (6) of 115%

Non-Operating Items

Net realized investment gains in 3Q21 were $22 million (net of related amortization) including the unfavorable change in the allowance for credit losses of $14 million which was recorded in earnings  Net realized investment gains in 3Q20 were $77 million (net of related amortization) including the favorable change in the allowance for credit losses of $81 million which was recorded in earnings

During 3Q21 and 3Q20 we recognized an increase (decrease) in earnings of ($46) million and $85 million respectively due to the net change in market value of investments recognized in earnings

During 3Q21 and 3Q20 we recognized an increase (decrease) in earnings of $109 million and ($16) 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

Statutory (based on non-GAAP measures) and GAAP Capital Information

Our consolidated statutory risk-based capital ratio was estimated at 388% at September 30 2021 reflecting estimated 3Q21 statutory operating income of $86 million (and $201 million in the first nine months of 2021) and the payment of insurance company dividends to the holding company of $1487 million during 3Q21 (and $3283 million in the first nine months of 2021)

During the third quarter of 2021 we repurchased $1150 million of common stock under our securities repurchase program  We repurchased 49 million common shares at an average cost of $2342 per share  As of September 30 2021 we had 1243 million shares outstanding and had authority to repurchase up to an additional $4669 million of our common stock  During 3Q21 dividends paid on common stock totaled $163 million

Unrestricted cash and investments held by our holding company were $366 million at September 30 2021 compared to $388 million at December 31 2020

Book value per common share was $4211 at September 30 2021 compared to $4054 at December 31 2020  Book value per diluted share excluding accumulated other comprehensive income (2) was $2603 at September 30 2021 compared to $2395 at December 31 2020 

The debt-to-capital ratio was 178 percent and 172 percent at September 30 2021 and December 31 2020 respectively  Our debt-to-total capital ratio excluding accumulated other comprehensive income (3) was 256 percent at both September 30 2021 and December 31 2020

Return on equity for the trailing four quarters ended September 30 2021 and 2020 was 84% and 104% respectively  Operating return excluding significant items on equity excluding accumulated other comprehensive income and net operating loss carryforwards (6) for the trailing four quarters ended September 30 2021 and 2020 was 116% and 119% 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 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 October 28 2021 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/1989231 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 $35 billion in total assets Our 3400 associates 4600 exclusive agents and 4000 independent partner agents guide individuals families and businesses through a lifetime of financial decisions For more information visit CNOinccom