PowerPoint PresentationImportant Legal Information
Certain statements made in this presentation should be considered forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. These include statements about future results of operations and capital plans. We caution investors that these forward-looking statements are not guarantees of future performance, and actual results may differ materially. Investors should consider the important risks and uncertainties that may cause actual results to differ, including those included in our Quarterly Reports on Form 10-Q, our Annual Report on Form 10-K and other filings we make with the Securities and Exchange Commission. We assume no obligation to update this presentation, which speaks as of today’s date.
Forward-Looking Statements
This presentation contains financial measures that differ from the comparable measures under Generally Accepted Accounting Principles (GAAP). Reconciliations between those non-GAAP measures and the comparable GAAP measures are included in the Appendix, or on the page such measure is presented. While management believes the measures are useful to enhance understanding and comparability of our financial results, these non-GAAP measures should not be considered substitutes for the most directly comparable GAAP measures. Additional information concerning non-GAAP measures is included in our periodic filings with the Securities and Exchange Commission that are available in the “Investors – SEC Filings” section of CNO’s website, CNOinc.com.
Non-GAAP Measures
Fixed index annuities
Distribution of third party products, which primarily include Medicare Advantage and Prescription Drug Plans
Demonstrated growth in agents, premiums, assets and third party fees
1Q 2021 Collected Premium by Product
Total: $976.6M in 1Q 2021 Collected Premiums 1Q 2021 Average Liabilities by Insurance Product*
*Net insurance liabilities are equal to total insurance liabilities less: (i) amounts related to reinsured business; (ii) deferred acquisition costs; (iii) present value of future profits; and (iv) the value of unexpired options credited to insurance liabilities.
Annuities 28%
Life 13%
LTC 17%
Health 59%
Focused on serving the protection needs of the fast-growing but underserved middle-income American market at or near retirement
1Q 2021 Insurance Margin by Product
CNO Financial Group | Investor Overview | May 2021 4
What Makes CNO Different
Our Diverse Distribution & Integrated Approach
Health and Wealth Solutions Insurance and Securities Solutions
Strong Cash Flow Generation
Well-Positioned in the Attractive Senior Middle Market
Extensive experience and understanding of the middle market
Differentiated with our market vs. product focus
Diversification of products and distribution provides sustainable competitive advantage
Positioned to help customers to address main concerns of outliving their assets and dealing with rising healthcare costs as they age
CNO SolutionsPercentage of Population Age 65+ without a Financial Product
(1) Bankers Life Center for a Secure Retirement 2017
40%
60%
78%
83%
84%
Other Health
CNO Solutions
63% of middle-income households are underinsured; ~60% of baby boomers lack financial advisors1
CNO Financial Group | Investor Overview | May 2021 6
Highly Diversified Product Mix
Mix of protection and accumulation products to serve varied customer needs
Basic products that meet the insurance needs of the middle market
Attractive and predictable return characteristics
Low risk long-term care products with short-duration benefit period
Protection-oriented products with low face amounts and few bells and whistlesLife Insurance
Annuities
Medicare
Third Party Products / Services6 Capital-light distribution-only fee revenue
CNO Financial Group | Investor Overview | May 2021 7
Fixed Indexed Annuity
Fixed Interest Annuity
Equity
Risk Management via Diversification and Natural Hedges Relative degree of risk present (before mitigation) within each product
Low High
Unique Multi-Channel Operating Model
• Top distributor of health/wealth protection products through ~5,000 exclusive producing agents and financial representatives
• More than 260 locations nationwide
• “Kitchen-table” sales model
– Top 5 direct-to-consumer distribution
– Broker-dealer and RIA offer investment and annuity products and support agent income
Worksite Division – Wholly-owned distribution (PMA) & diverse network of independent marketing organizations and agencies
– Web Benefits Design (WBD) digital worksite enrollment platform/benefits administrator
– DirectPath employee benefits management services for employers and employees
Multi-channel distribution transitioning to integrated delivery model – Recent business transformation unlocks significant growth opportunities
– Leverages products, brands, leads and fulfilment across channels
– Captures customers through direct engagement that leads to an integrated omnichannel buying experience
– Driving toward holistic relationships including protection & retirement planning; growth in assets & fees
January 2020 realignment removes barriers between brand and channels
CNO Financial Group | Investor Overview | May 2021 9
Strategic Initiatives Successfully Reinvigorating Growth; Momentum Sidelined Temporarily by COVID (dollars in millions)
$-
Capital and Liquidity Overview
1 The ratio of the combined capital of the insurance companies to the minimum amount of capital appropriate to support the overall business operations, as determined based on the methodology developed by the National Association of Insurance Commissioners.
2 Excluding accumulated other comprehensive income (a non-GAAP measure). See the Appendix for a reconciliation to the corresponding GAAP measure.
Debt to Capital2
Consolidated Risk Based Capital (“RBC”) Ratio1
Target leverage of 25.0 – 28.0% Debt covenant ceiling of 35% Debt capacity within limit of target leverage $163 million
Targeted consolidated RBC ratio of 375-400% Excess due to intentional conservative positioning RBC variability can be expected in periods of market volatility
Holding Company Liquidity
Minimum targeted holding company liquidity of $150 million Liquidity bolstered by $250 million undrawn revolver No outstanding debt maturities until 2025
Conservative approach to capital structure; strong liquidity (dollars in millions)
408% 411% 407%
CNO Financial Group | Investor Overview | May 2021 11
Cash Flow Profile Strong free cash flow generation and conversion (dollars in millions)
1 A non-GAAP measure. See the Appendix for a reconciliation to the corresponding GAAP measure. 2 Cash flows exclude capital contributions to insurance subsidiaries, acquisitions, dividend payments, stock repurchases, and financing transactions.
1Q20 1Q21 1Q20 1Q21 Net Operating Income1 84.3$ 75.2$ 308.5$ 353.2$
Holding Company Cash Flows:
Management Fees 29.8 31.7 116.1 113.6
Surplus Debenture Interest 12.1 12.0 59.4 57.2
Earnings on Corporate Investments 11.6 2.1 20.3 19.6
Other (22.9) 12.0 7.6 69.4
Holding Company Sources of Cash2 118.4 140.9 436.5 594.9
Holding Company Expenses and Other (39.3) (21.5) (89.2) (92.8)
Tax Payments - (16.1) - (37.9)
Excess Cash Flow to Holding Company2 78.9 101.2 299.8 409.1
Net Proceeds from New Debt - 0.0 64.9 146.4
Share Repurchases (84.8) (97.8) (294.3) (277.8)
Dividend Payments to Stockholders (16.2) (16.3) (66.8) (67.1)
Acquisition 0.0 (51.1) (68.8) (51.1)
Net Change in Holding Company Cash and Investments (22.1) (64.0) (65.2) 159.5
Non-Cash Changes in Investment Balances 3.5 - 3.5 (3.5)
Cash and Investments, Beginning of Period 186.7 388.1 229.8 168.1
Cash and Investments, End of Period 168.1$ 324.1$ 168.1$ 324.1$
Trailing Twelve MonthsFor the Quarter
2021 MAY FC vs. 2021 FEB FC
CNO Financial Group, Inc.
2018
2019
2020
2021
2022
2023
2021
2022
2023
2021
2022
2023
Sales
$ (337.2)
$ 308.0
$ 421.5
$ 219.2
$ 230.5
$ 267.7
$ 253.6
$ 236.3
$ 268.9
$ (34.3)
$ (5.8)
$ (1.2)
H
$ 19.52
$ 22.09
$ 23.95
$ 25.72
$ 26.72
$ 27.90
$ 25.44
$ 26.62
$ 27.93
$ 0.28
$ 0.10
$ (0.03)
O
8.9
8.0
8.0
5.8
6.1
6.4
10.1
10.3
(4.3)
1 Measured as 100% of new term life and health annualized premiums and 10% of single premium whole life products
2 Includes fees from third party policies sold, BD/RIA accounts, and revenue from Web Benefits Design (acquired in 2Q19)
Commentary
A Increase in consumer life sales
B Reflects outperformance in 2020 and increased life and health sales in projections
C Reflects increase in revenue due to the Med Advantage D2C & Telesales initiative and partial recovery in WBD sales
D 2020 impacted by lower shock lapse assumptions and higher CTC initiatives, partially offset by outperformance in the 2Q20; outyears impacted by lower shock lapse assumptions, lower advertising spend, higher core NII, and higher fee income, partially offset by higher CTC spend
E Impacted by EBIT in Note D
F 2020 includes lower earnings and higher share count from lower share repurchases; outyears include higher earnings and higher share count from lower repurchases in 2020
G 2020 includes lower earnings and higher equity from lower share repurchases; outyears include higher earnings and higher equity from lower repurchases in 2020
H 2020 impacted by lower shock lapse assumptions and higher CTC initiatives, partially offset by outperformance in the 2Q20; outyears impacted by lower shock lapse assumptions, lower advertising spend, and higher core NII, partially offset by higher CTC spend
I 2020 reflects unfavorable change in admissible DTA (as recognized in current period income) and higher unrealized losses due to market volatility in actual results; outyears unfavorable due to lower statutory earnings
J Target RBC set to 385% in May Forecast and August Forecast
K 2020 unfavorable due to credit migration and higher CTC initiatives; 2021 includes higher dividends from non-insurance subsidiaries, partially offset by higher CTC initiatives and lower statutory earnings; 2022 includes higher statutory earnings
L Function of shares outstanding - cumulative impact of lower projected share repurchases in 2020
M Target set to $160M in May Forecast and August Forecast
N Impacted by higher equity primarily due to lower share repurchases in 2020 and lower net income
O Impacted by higher share count and higher equity primarily due to lower share repurchases in 2020 and lower net income
2020 NOV FC vs. 2020 PLAN SLIDE
CNO Financial Group, Inc.
2020+2 Plan
$ (337.2)
$ 19.52
8.9
8.0
8.0
5.8
6.1
10.7
10.1
10.3
(2.8)
(4.3)
1 Measured as 100% of new term life and health annualized premiums and 10% of single premium whole life products
2 Includes fees from third party policies sold, BD/RIA accounts, and revenue from Web Benefits Design (acquired in 2Q19)
AFFIL CAPITAL TRANSACTIONS
May Forecast
$65.0
Dividend from CLTX to CDOC
$57.8
Dividend from WNIC to CDOC
$29.0
Dividend from CDOC to CNO
$86.8
Contributions:
$21.8
Share Repurchases (for the quarter ended)
$97.8
$77.2
Holdco Capital
GAAP INCOME
Actual
Actual
Actual
2018
2019
2020
2021
2022
2023
1Q
2Q
3Q
4Q
Total
1Q
2Q
3Q
4Q
Total
1Q
2Q
3Q
4Q
Total
1Q
2Q
3Q
4Q
Total
1Q
2Q
3Q
4Q
Total
1Q
2Q
3Q
4Q
Total
21.8
24.7
30.6
10.7
180.8
43.3
48.3
34.3
26.2
152.1
57.4
8.2
43.7
57.8
167.1
43.0
22.7
22.2
22.6
110.5
19.0
19.5
19.8
20.1
78.4
20.5
20.5
20.9
21.3
83.1
(19.1)
(22.0)
(23.6)
(16.6)
(81.3)
(18.1)
(19.9)
(18.2)
2.8
(53.4)
(13.8)
(38.5)
(13.7)
(17.8)
(83.8)
(22.0)
(12.4)
(10.7)
(10.6)
(55.8)
(10.6)
(12.7)
(10.8)
(10.8)
(44.9)
(10.6)
(12.7)
(10.8)
(10.8)
(44.9)
(21.0)
(22.2)
(21.5)
(13.4)
(78.1)
(17.6)
(20.3)
(18.7)
(21.7)
(78.3)
(21.2)
(22.8)
(32.7)
(24.8)
(101.5)
(21.7)
(14.9)
(18.2)
(18.5)
(73.3)
(10.7)
(15.1)
(17.1)
(19.2)
(62.0)
(11.4)
(16.3)
(19.3)
(22.8)
(69.8)
- 0
- 0
(104.8)
(3.0)
(107.8)
- 0
- 0
- 0
193.7
193.7
34.0
- 0
- 0
- 0
34.0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
FV changes in embedded derivative liabilities (net of tax and amortization)
19.8
6.6
18.1
(0.7)
43.9
(23.4)
(28.3)
(23.2)
10.7
(64.3)
(52.7)
(21.4)
(1.3)
12.8
(62.5)
63.7
- 0
- 0
- 0
63.7
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
(5.7)
- 0
- 0
(5.7)
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
FV changes related to agent deferred compensation (net of tax)
- 0
8.7
- 0
0.7
9.4
(4.2)
(9.2)
(4.7)
2.0
(16.1)
- 0
(10.4)
- 0
(2.5)
(12.9)
10.2
- 0
- 0
- 0
10.2
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
Net realized gains/losses from sales and impairments (net of tax and amortization)
3.7
8.7
29.2
(2.6)
39.0
(0.6)
(1.3)
(2.1)
5.6
1.7
(50.3)
9.8
6.0
10.0
(24.6)
2.8
(2.9)
(2.9)
(2.9)
(6.0)
(4.1)
(4.1)
(4.1)
(4.1)
(16.4)
(4.1)
(4.1)
(4.1)
(4.1)
(16.4)
2.6
(3.3)
0.6
1.4
1.4
0.8
0.4
0.2
0.3
1.6
(0.2)
(0.5)
1.4
0.7
1.4
0.5
- 0
- 0
- 0
0.5
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
(556.3)
- 0
(556.3)
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
0.1
0.1
0.2
0.2
(1.2)
0.1
(0.7)
2.1
0.5
3.7
- 0
6.3
0.0
- 0
- 0
- 0
0.0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
Net change in MV of investments recognized in earnings (net of tax)
(15.7)
(0.4)
(4.2)
(27.5)
(47.7)
13.1
5.3
3.7
(2.1)
20.1
(38.3)
24.7
6.7
4.8
(2.1)
(5.0)
- 0
- 0
- 0
(5.0)
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
11.9
11.9
12.1
12.1
48.0
12.1
12.6
13.9
13.8
52.4
13.6
13.6
13.6
14.4
55.2
15.6
15.6
15.6
15.6
62.2
15.6
15.6
15.6
15.6
62.3
15.6
15.6
15.6
15.6
62.4
21.0
22.2
21.5
13.4
78.1
17.6
20.3
18.7
21.7
78.3
21.2
22.8
32.7
24.8
101.5
21.7
14.9
18.2
18.5
73.3
10.7
15.1
17.1
19.2
62.0
11.4
16.3
19.3
22.8
69.8
EBIT
$ 106.8
$ 116.0
$ 121.1
$ 85.3
$ 429.2
$ 95.5
$ 109.3
$ 101.8
$ 114.1
$ 420.7
$ 119.0
$ 115.8
$ 158.9
$ 125.2
$ 519.0
$ 112.5
$ 83.1
$ 98.5
$ 99.7
$ 393.7
$ 64.1
$ 84.1
$ 93.3
$ 102.8
$ 344.2
$ 67.3
$ 89.9
$ 103.2
$ 119.3
$ 379.5
4.9
4.9
4.8
5.4
4.7
4.7
4.6
5.4
4.7
4.7
4.6
(0.0)
(0.0)
0.0
0.0
0.0
0.0
(0.0)
0.0
(0.0)
0.0
(0.0)
2020
2021
2022
2023
Q1
Q2
Q3
Q4
TY
Q1
Q2
Q3
Q4
TY
Q1
Q2
Q3
Q4
TY
Q1
Q2
Q3
Q4
TY
1.1
1.1
1.1
1.1
1.1
1.1
1.1
1.1
4.3
1.1
1.1
1.1
1.1
4.3
1.1
1.1
1.1
1.1
4.3
0.1
0.1
0.1
0.3
0.1
0.1
0.1
0.1
0.4
0.1
0.1
0.1
0.1
0.4
0.5
0.1
0.1
0.1
0.1
0.2
0.2
0.2
0.6
0.1
0.1
0.1
0.1
0.5
0.1
0.1
0.1
0.1
0.4
17.3
6.0
2.6
0.9
2.0
2.0
2.0
2.0
8.0
1.8
1.8
1.8
1.8
7.2
1.8
1.8
1.8
1.8
7.2
13.6
13.6
13.6
14.4
15.6
15.6
15.6
15.6
62.2
15.6
15.6
15.6
15.6
62.3
15.6
15.6
15.6
15.6
62.4
Fixed index annuities
(6.3)
(21.8)
86.4
105.3
109.0
113.1
413.7
103.1
119.8
130.7
117.7
471.3
103.5
105.7
99.1
159.5
467.8
89.0
110.8
109.8
146.5
456.1
104.4
132.7
127.5
136.6
501.2
106.8
116.0
121.1
85.3
429.2
95.5
109.3
101.8
114.1
420.7
119.0
38.4
150.8
130.9
439.2
78.2
88.5
97.0
96.3
359.9
80.6
92.0
103.9
101.8
378.4
99.5
99.5
99.5
99.5
397.8
104.6
104.6
104.6
104.6
418.2
4.4%
-18.0%
5.1%
5.1%
5.1%
Set 2023 and 2024 EBIT growth equal to 2022 EBIT growth rate
Interest Expense
Trad Life
8.4
7.4
8.5
15.0
39.4
10.4
13.0
(0.0)
- 0
23.3
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
5.5
4.8
5.5
9.7
25.5
6.7
8.5
(0.0)
- 0
15.2
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
10.5
5.0
206.7
79.3
301.5
- 0
4.0
16.8
34.1
54.9
- 0
- 0
- 0
32.5
32.5
20.0
7.0
(13.8)
(40.0)
(26.7)
- 0
- 0
15.0
(157.1)
(142.1)
- 0
- 0
(104.8)
(3.0)
(107.8)
- 0
- 0
- 0
193.7
193.7
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
FV Changes in Embedded Deriv Liab (net of tax and amortization)
1.3
12.1
2.2
7.4
23.0
(7.2)
(4.8)
- 0
(11.4)
(23.4)
(8.3)
16.8
(10.2)
9.5
7.8
(19.2)
(10.7)
6.1
30.0
6.3
(2.9)
(3.9)
1.5
3.5
(1.7)
19.8
6.6
18.1
(0.7)
43.9
(23.4)
(28.3)
(23.2)
10.7
(64.3)
(52.7)
- 0
- 0
- 0
(52.7)
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
(57.2)
(6.8)
- 0
- 0
(64.0)
- 0
(0.4)
- 0
- 0
(0.4)
- 0
(21.3)
(0.0)
- 0
(21.3)
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
(0.0)
(0.0)
- 0
- 0
- 0
- 0
- 0
- 0
(5.7)
- 0
- 0
(5.7)
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
FV Changes related to Agent Deferred Compensation (net of tax)
- 0
3.9
6.3
- 0
10.2
- 0
(7.6)
- 0
(9.8)
(17.4)
- 0
- 0
- 0
9.9
9.9
(3.9)
(8.0)
4.1
9.8
2.0
- 0
- 0
(8.7)
0.8
(7.9)
- 0
8.7
- 0
0.7
9.4
(4.2)
(9.2)
(4.7)
2.0
(16.1)
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
8.0
0.8
(1.1)
9.1
16.8
13.6
7.5
2.6
(2.3)
21.4
5.9
(6.8)
(12.4)
(10.3)
(23.6)
(0.6)
7.8
7.4
(9.6)
5.0
5.1
9.7
18.5
(1.3)
32.0
3.7
8.7
29.2
(2.6)
39.0
(0.6)
(1.3)
(2.1)
5.6
1.7
(50.3)
(5.3)
(4.1)
(2.3)
(62.1)
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
(1.8)
(2.7)
(3.0)
(2.4)
(9.9)
(3.0)
(2.9)
(2.4)
0.5
(7.8)
(2.4)
(1.0)
(0.2)
(1.2)
(4.8)
(0.4)
0.1
(0.5)
(0.5)
(1.3)
0.2
(1.0)
(2.1)
(2.7)
(5.7)
2.6
(3.3)
0.6
1.4
1.4
0.8
0.4
0.2
0.3
1.6
(0.2)
- 0
- 0
- 0
(0.2)
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
(63.3)
(63.3)
(298.0)
2.5
22.9
2.9
(269.7)
(3.1)
(3.0)
0.0
- 0
(6.1)
- 0
- 0
(49.0)
- 0
(49.0)
- 0
- 0
- 0
- 0
- 0
- 0
- 0
(556.3)
- 0
(556.3)
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
0.9
0.9
1.7
0.6
1.3
(0.2)
(0.0)
1.7
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
0.1
0.1
0.2
0.2
(1.2)
0.1
(0.7)
2.1
1.6
1.6
- 0
5.2
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
Net Change in Market Value of Investments recognized in Earnings (net of tax)
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
(15.7)
(0.4)
(4.2)
(27.5)
(47.7)
13.1
5.3
3.7
(2.1)
20.1
(38.3)
- 0
- 0
- 0
(38.3)
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
159.5
tc={DF0FB945-F241-4C60-BC4F-8A7E79C53F44}: [Threaded comment] Your version of Excel allows you to read this threaded comment; however, any edits to it will get removed if the file is opened in a newer version of Excel. Learn more: https://go.microsoft.com/fwlink/?linkid=870924 Comment: includes 170.4M related to impact of IRS appeals process
159.5
- 0
- 0
- 0
34.0
- 0
- 0
- 0
34.0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
243.5
230.9
229.3
227.1
232.7
220.3
222.1
215.5
206.9
216.2
202.3
198.1
192.4
188.0
195.2
182.1
180.3
175.7
175.2
178.3
175.1
172.4
171.0
167.4
cactse: cactse: due to loss, basic used in calc rather than diluted
172.1
169.7
168.0
164.6
cactse: cactse: due to loss in 3Q18, reverted to basic
165.9
165.5
162.2
159.7
155.3
151.4
157.1
145.8
143.9
141.7
140.4
143.0
136.7
133.8
131.8
131.1
133.3
130.9
131.3
131.6
132.1
131.5
132.8
133.8
134.4
134.7
133.9
$ 0.29
$ 0.27
$ 0.29
$ 0.32
$ 0.34
$ 0.27
$ 0.35
$ 0.37
$ 0.49
$ 1.47
$ 0.34
$ 0.45
$ 0.45
$ 0.51
$ 1.75
$ 0.44
$ 0.49
$ 0.53
$ 0.36
$ 1.83
$ 0.41
$ 0.48
$ 0.45
$ 0.49
$ 1.82
$ 0.46
$ 0.45
93.0
tfd904e: EMH: Converts assumed to be in force for full quarter for EPS calculation purposes
tc={DF0FB945-F241-4C60-BC4F-8A7E79C53F44}: [Threaded comment] Your version of Excel allows you to read this threaded comment; however, any edits to it will get removed if the file is opened in a newer version of Excel. Learn more: https://go.microsoft.com/fwlink/?linkid=870924 Comment: includes 170.4M related to impact of IRS appeals process
cactse: cactse: due to loss in 3Q18, reverted to basic
- 0
- 0
- 0
- 0
- 0
- 0
- 0
0.4
1.5
0.4
(0.4)
11.1%
14.9%
11.9%
23.0%
52.0%
25.0%
21.0%
20.0%
19.0%
16.0%
15.0%
15.0%
14.0%
17.0%
16.0%
16.0%
17.0%
15.0%
14.0%
15.0%
14.0%
14.0%
14.0%
14.0%
17.0%
18.0%
18.0%
17.7%
17.0%
16.9%
16.9%
16.5%
16.1%
15.8%
15.9%
16.54%
17.05%
20.20%
21.38%
19.29%
18.86%
17.84%
17.46%
20.81%
17.30%
16.30%
17.16%
18.95%
19.10%
19.12%
19.14%
19.13%
19.09%
19.02%
18.93%
18.88%
18.77%
18.71%
18.60%
DEBT TO CAPITAL, EXCLUDING AOCI (AS REPORTED IN FINANCIAL SUMMARY tab)
CORPORATE NOTES PAYABLE
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
280.0
1,793.9
274.0
(252.7)
(273.3)
(395.5)
(750.9)
(781.6)
(808.0)
(990.8)
(1,234.4)
(1,197.4)
(1,170.7)
(698.1)
(634.0)
(731.8)
(766.2)
(926.1)
(859.3)
(825.3)
(934.2)
(605.0)
(510.4)
(402.8)
(540.5)
(777.8)
(855.5)
(622.4)
(729.6)
(894.5)
(933.6)
(1,212.1)
(894.3)
(700.2)
(403.5)
(177.7)
(654.9)
(1,098.2)
(1,442.9)
(1,372.5)
(595.2)
(1,520.2)
(1,801.6)
(2,186.1)
(1,518.1)
(1,518.1)
(1,518.1)
(1,518.1)
(1,518.1)
(1,518.1)
(1,518.1)
(1,518.1)
(1,518.1)
(1,518.1)
(1,518.1)
(1,518.1)
21.8%
30.5%
23.8%
21.9%
20.8%
20.4%
18.7%
18.1%
17.1%
16.6%
21.3%
20.4%
19.5%
18.9%
17.3%
16.6%
17.3%
17.1%
17.1%
16.8%
16.6%
19.5%
19.9%
19.6%
19.8%
19.9%
20.1%
19.1%
19.1%
19.0%
18.8%
20.1%
19.73%
19.61%
22.17%
22.31%
22.37%
23.86%
24.1%
23.04%
23.78%
23.56%
23.17%
25.62%
25.37%
25.63%
25.67%
25.70%
25.69%
25.61%
25.48%
25.31%
25.22%
25.03%
24.91%
24.72%
NI
Repos
Div
NI
Repos
Div
NI
Repos
Div
NI
Repos
Div
NI
Repos
Div
NI
Repos
Div
NI
Repos
Div
NI
Repos
Div
NI
Repos
Div
NI
Repos
Div
NI
Repos
Div
CORPORATE NOTES PAYABLE
(894.3)
(700.2)
(403.5)
(177.7)
(654.9)
(1,098.2)
(1,442.9)
(1,372.5)
(595.2)
(1,520.2)
(1,801.6)
(2,186.1)
(1,518.1)
(1,518.1)
(1,518.1)
(1,518.1)
(1,518.1)
(1,518.1)
(1,518.1)
(1,518.1)
(1,518.1)
(1,518.1)
(1,518.1)
(1,518.1)
NI
Repos
Div
NI
Repos
Div
NI
Repos
Div
NI
Repos
Div
NI
Repos
Div
NI
Repos
Div
NI
Repos
Div
NI
Repos
Div
NI
Repos
Div
NI
Repos
Div
NI
Repos
Div
CORPORATE NOTES PAYABLE
(894.3)
(700.2)
(403.5)
(177.7)
(654.9)
(1,098.2)
(1,442.9)
(1,372.5)
(595.2)
(1,520.2)
(1,801.6)
(2,186.1)
(1,518.1)
(1,518.1)
(1,518.1)
(1,518.1)
(1,518.1)
(1,518.1)
(1,518.1)
(1,518.1)
(1,518.1)
(1,518.1)
(1,518.1)
(1,518.1)
REVOLVER CREDIT FACILITY
(894.3)
(700.2)
(403.5)
(177.7)
(654.9)
(1,098.2)
(1,442.9)
(1,372.5)
(595.2)
(1,520.2)
(1,801.6)
(2,186.1)
(1,518.1)
(1,518.1)
(1,518.1)
(1,518.1)
(1,518.1)
(1,518.1)
(1,518.1)
(1,518.1)
(1,518.1)
(1,518.1)
(1,518.1)
(1,518.1)
184.7
184.8
250.8
251.1
251.4
249.4
243.2
241.3
239.2
234.0
229.5
221.5
223.5
219.4
222.0
220.3
219.3
213.8
207.6
203.3
198.6
193.5
186.7
184.0
179.1
176.2
173.5
173.8
172.1
169.0
167.8
166.9
167.4
164.4
164.6
162.2
160.0
156.8
152.2
148.1
143.6
141.7
138.9
135.3
132.3
129.3
127.4
125.5
125.0
124.4
123.9
123.4
123.4
123.4
122.8
122.2
RATIO (CURRENTLY USED IN FINANCIAL SUPPLEMENT AND INVESTOR DECK and 10-K)
21.12
6.43
12.12
15.18
15.43
16.18
18.65
19.12
19.58
20.91
22.07
22.80
22.50
20.88
21.56
22.49
21.48
22.66
22.74
23.06
23.93
22.56
22.34
22.49
23.60
25.28
25.89
25.82
26.77
28.28
29.10
29.05
27.59
27.09
21.99
20.78
23.99
27.12
29.92
31.58
26.22
33.38
36.59
40.54
36.75
37.26
37.77
38.30
38.48
38.78
39.13
39.54
39.68
39.96
40.36
40.86
SHAREHOLDERS' EQUITY
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
280.0
1,793.9
274.0
(252.7)
(273.3)
(395.5)
(750.9)
(781.6)
(808.0)
(990.8)
(1,234.4)
(1,197.4)
(1,170.7)
(698.1)
(634.0)
(731.8)
(766.2)
(926.1)
(859.3)
(825.3)
(934.2)
(605.0)
(510.4)
(402.8)
(540.5)
(777.8)
(855.5)
(622.4)
(729.6)
(894.5)
(933.6)
(1,212.1)
(894.3)
(700.2)
(403.5)
(177.7)
(654.9)
(1,098.2)
(1,442.9)
(1,372.5)
(595.2)
(1,520.2)
(1,801.6)
(2,186.1)
(1,518.1)
(1,518.1)
(1,518.1)
(1,518.1)
(1,518.1)
(1,518.1)
(1,518.1)
(1,518.1)
(1,518.1)
(1,518.1)
(1,518.1)
(1,518.1)
4,179.7
2,981.9
3,312.6
3,558.9
3,606.2
3,640.8
3,785.3
3,832.2
3,875.0
3,902.3
3,831.8
3,851.9
3,857.9
3,883.3
4,152.6
4,223.4
3,944.0
3,918.2
3,862.7
3,862.9
3,819.4
3,759.2
3,660.6
3,735.7
3,686.1
3,678.4
3,638.3
3,864.5
3,877.2
3,884.8
3,948.1
3,635.4
3,722.8
3,754.7
3,216.4
3,193.2
3,183.0
3,154.0
3,110.4
3,304.5
3,170.6
3,211.0
3,282.3
3,298.1
3,342.6
3,298.2
3,293.1
3,289.1
3,291.2
3,307.4
3,330.8
3,361.5
3,379.4
3,413.4
3,437.8
3,474.7
22.64
16.14
13.21
14.17
14.34
14.60
15.56
15.88
16.20
16.67
16.70
17.39
17.26
17.70
18.70
19.17
17.99
18.33
18.60
19.00
19.23
19.43
19.60
20.30
20.58
20.87
20.96
22.24
22.53
22.98
23.53
21.79
22.25
22.83
19.54
19.69
19.90
20.12
20.44
22.32
22.08
22.66
23.63
24.38
25.27
25.51
25.86
26.21
26.34
26.58
26.88
27.24
27.38
27.66
28.00
28.44
BOOK VALUE PER DILUTED SHARE EXCL AOCI (AS REPORTED IN GAAP INCOME tab)
SHAREHOLDERS' EQUITY
280.0
1,793.9
274.0
(252.7)
(273.3)
(395.5)
(750.9)
(781.6)
(808.0)
(990.8)
(1,234.4)
(1,197.4)
(1,170.7)
(698.1)
(634.0)
(731.8)
(766.2)
(926.1)
(859.3)
(825.3)
(934.2)
(605.0)
(510.4)
(402.8)
(540.5)
(777.8)
(855.5)
(622.4)
(729.6)
(894.5)
(933.6)
(1,212.1)
(894.3)
(700.2)
(403.5)
(177.7)
(654.9)
(1,098.2)
(1,442.9)
(1,372.5)
(595.2)
(1,520.2)
(1,801.6)
(2,186.1)
(1,518.1)
(1,518.1)
(1,518.1)
(1,518.1)
(1,518.1)
(1,518.1)
(1,518.1)
(1,518.1)
(1,518.1)
(1,518.1)
(1,518.1)
(1,518.1)
- 0
- 0
172.1
278.2
278.6
279.1
279.6
280.1
280.6
281.1
89.4
89.6
32.7
28.4
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
4,179.7
2,981.9
3,312.6
3,558.9
3,606.2
3,640.8
3,785.3
3,832.2
3,875.0
3,902.3
3,831.8
3,851.9
3,857.9
3,883.3
4,152.6
4,223.4
3,944.0
3,918.2
3,862.7
3,862.9
3,819.4
3,759.2
3,660.6
3,735.7
3,686.1
3,678.4
3,638.3
3,864.5
3,877.2
3,884.8
3,948.1
3,635.4
3,722.9
3,754.7
3,216.4
3,193.2
3,183.0
3,154.0
3,110.4
3,304.5
3,170.6
3,211.0
3,282.3
3,298.1
3,342.6
3,298.2
3,293.1
3,289.1
3,291.2
3,307.4
3,330.8
3,361.5
3,379.4
3,413.4
3,437.8
3,474.7
22.63
16.14
12.26
12.51
12.62
12.79
13.60
13.87
14.05
14.41
15.63
16.21
16.57
17.01
18.24
18.62
17.52
17.85
18.39
18.75
19.05
19.21
19.38
20.05
20.38
20.67
20.80
22.02
22.31
22.74
23.19
21.43
21.94
22.62
19.28
19.52
19.76
20.00
20.30
22.09
22.03
22.55
23.45
23.95
24.83
25.06
25.39
25.72
25.85
26.08
26.38
26.72
26.87
27.14
27.47
27.90
RETURN ON EQUITY
OPERATING RETURN ON EQUITY, EXCLUDING AOCI/NOLs (AS REPORTED IN GAAP INCOME tab)
OPERATING INCOME
2,976.9
3,002.9
3,067.6
3,181.9
3,258.1
2,996.0
3,032.6
3,028.0
3,045.3
3,026.1
2,989.7
2,924.9
3,011.6
2,975.3
3,010.1
3,010.1
3,209.5
3,236.6
3,263.2
3,335.0
3,225.6
3,318.7
3,366.0
2,705.8
2,687.3
2,703.4
2,702.9
2,685.0
2,761.9
2,701.2
2,784.2
2,905.1
2,956.2
3,019.5
2,998.8
3,018.8
3,038.6
3,059.3
3,100.1
3,148.3
3,203.0
3,240.6
3,300.6
3,350.8
3,412.4
7.7%
8.1%
8.5%
8.8%
9.1%
9.1%
8.8%
8.2%
9.2%
8.9%
9.0%
9.2%
8.7%
8.8%
9.1%
9.3%
9.2%
9.6%
9.6%
10.2%
9.8%
10.0%
10.4%
10.1%
10.7%
11.4%
11.4%
12.9%
12.9%
12.3%
11.1%
9.3%
8.6%
7.3%
7.3%
7.1%
7.1%
7.1%
7.1%
7.2%
7.5%
9.9%
1.1%
6.1%
8.2%
3.7%
4.1%
4.6%
-9.1%
-7.5%
-8.9%
-10.9%
4.1%
9.8%
7.8%
8.7%
10.4%
6.5%
9.6%
8.7%
7.4%
6.6%
4.3%
4.3%
4.2%
4.2%
4.2%
4.3%
4.5%
4.7%
ERROR:#REF!
ERROR:#REF!
EBIT
503.6
486.9
480.5
429.2
417.9
411.1
391.8
420.7
444.2
450.8
507.9
519.0
512.4
479.7
419.3
393.7
345.4
346.4
341.3
344.2
347.5
353.3
363.2
379.5
274.1
275.9
280.7
292.2
280.1
280.1
280.1
280.1
280.1
280.1
280.1
280.1
280.1
280.1
280.1
280.1
280.1
280.1
280.1
280.1
280.1
280.1
280.1
280.1
70.0
NA
NA
(95.8)
(103.0)
(103.3)
(100.1)
(93.9)
(84.7)
(73.6)
(60.0)
(47.6)
(36.4)
(36.4)
(36.4)
(36.4)
(36.4)
(36.4)
(36.4)
(36.4)
(36.4)
(36.4)
(36.4)
(36.4)
46.8
47.1
47.5
54.0
54.1
54.9
56.8
58.4
60.0
61.0
60.7
61.2
63.2
65.1
67.1
68.2
68.3
68.3
68.3
68.3
68.4
68.4
68.4
68.4
**Moody's most current estimate used in FC
Note - based on workpapers provided by Moody's - could not tie out adjusted but Investor Relations believes our estimate is close; 2018 Is materially close to Moody's result
EARNINGS COVERAGE (MOODY'S)
126.4
132.6
141.3
149.8
157.1
158.1
156.9
152.3
144.8
134.6
120.7
108.8
99.6
101.6
103.5
104.7
104.7
104.7
104.7
104.8
104.8
104.8
104.8
104.9
3.7
3.5
(1.2)
(0.6)
(0.7)
(1.1)
2.5
4.2
3.9
4.5
5.7
4.7
6.7
6.2
5.4
4.8
3.6
3.6
3.5
3.5
3.6
3.6
3.7
3.9
*Note actuals booked to ledger; used Moody's most current estimate in FC
COVENANTS
REVOLVER CREDIT FACILITY
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
LESS: INDEBTEDNESS OWING TO SUBSIDIARY (ZERO SINCE NOT INCLUDED AS AN ADDITION TO DEBT)
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
(894.3)
(700.2)
(403.5)
(177.7)
(654.9)
(1,098.2)
(1,442.9)
(1,372.5)
(595.2)
(1,520.2)
(1,801.6)
(2,186.1)
(1,518.1)
(1,518.1)
(1,518.1)
(1,518.1)
(1,518.1)
(1,518.1)
(1,518.1)
(1,518.1)
(1,518.1)
(1,518.1)
(1,518.1)
(1,518.1)
35.0%
35.0%
35.0%
35.0%
35.0%
35.0%
35.0%
35.0%
35.0%
35.0%
35.0%
35.0%
35.0%
35.0%
35.0%
35.0%
35.0%
35.0%
35.0%
35.0%
35.0%
35.0%
35.0%
35.0%
4,617.2
4,454.9
3,619.9
3,370.9
3,837.9
4,252.2
4,553.3
4,677.0
3,765.8
4,731.2
5,083.9
5,484.2
4,860.7
4,816.3
4,811.3
4,807.3
4,809.3
4,825.6
4,849.0
4,879.6
4,897.5
4,931.5
4,956.0
4,992.8
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
(894.3)
(700.2)
(403.5)
(177.7)
(654.9)
(1,098.2)
(1,442.9)
(1,372.5)
(595.2)
(1,520.2)
(1,801.6)
(2,186.1)
(1,518.1)
(1,518.1)
(1,518.1)
(1,518.1)
(1,518.1)
(1,518.1)
(1,518.1)
(1,518.1)
(1,518.1)
(1,518.1)
(1,518.1)
(1,518.1)
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
3,722.9
3,754.7
3,216.4
3,193.2
3,183.0
3,154.0
3,110.4
3,304.5
3,170.6
3,211.0
3,282.3
3,298.1
3,342.6
3,298.2
3,293.1
3,289.1
3,291.2
3,307.4
3,330.8
3,361.5
3,379.4
3,413.4
3,437.8
3,474.7
2,674.0
2,674.0
2,674.0
2,674.0
2,674.0
2,674.0
2,674.0
2,674.0
2,674.0
2,674.0
2,674.0
2,674.0
2,674.0
2,674.0
2,674.0
2,674.0
2,674.0
2,674.0
2,674.0
2,674.0
2,674.0
2,674.0
2,674.0
2,674.0
10.9
11.7
11.8
13.2
13.4
14.8
15.2
15.7
17.3
19.0
19.2
19.4
26.5
33.5
40.5
47.5
54.5
61.6
68.6
75.6
82.6
89.7
96.7
103.7
0.8
cactse: cactse: M. Sale/Corp Fin (exercise of non-qualified stock option summary)
0.1
1.4
0.2
1.4
0.4
0.5
1.6
1.7
0.2
0.2
7.0
7.0
7.0
7.0
7.0
7.0
7.0
7.0
7.0
7.0
7.0
7.0
7.0
COMPANY MUST MAINTAIN CONSOLIDATED NET WORTH OF $2,674B + 50% CUMMULATIVE NET EQUITY PROCEEDS
2,685.7
2,685.8
2,687.2
2,687.4
2,688.8
2,689.2
2,689.7
2,691.3
2,693.0
2,693.2
2,693.4
2,700.5
2,707.5
2,714.5
2,721.5
2,728.5
2,735.6
2,742.6
2,749.6
2,756.6
2,763.7
2,770.7
2,777.7
2,784.7
250%
250%
250%
250%
250%
250%
250%
250%
250%
250%
250%
250%
250%
250%
250%
250%
250%
250%
250%
250%
250%
250%
250%
250%
05/12/21
Actual
2016
2017
2018
2019
2020
2021
2022
2023
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Holdco Cash
ERROR:#REF!
ERROR:#REF!
ERROR:#REF!
ERROR:#REF!
- 0
ERROR:#REF!
ERROR:#REF!
ERROR:#REF!
1.3
1.6
1.5
0.5
4.8
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
Q1
Q2
Q3
Q4
TY
Q1
Q2
Q3
Q4
TY
Q1
Q2
Q3
Q4
TY
Q1
Q2
Q3
Q4
TY
Q1
Q2
Q3
Q4
TY
Q1
Q2
Q3
Q4
TY
Q1
Q2
Q3
Q4
TY
Q1
Q2
Q3
Q4
TY
Q1
Q2
Q3
Q4
TY
Q1
Q2
Q3
Q4
TY
Q1
Q2
Q3
Q4
TY
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
825.0
- 0
- 0
825.0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
500.0
- 0
- 0
500.0
- 0
- 0
- 0
150.0
150.0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
(5.0)
237.9
(1.9)
231.0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
(2.5)
11.3
14.1
(7.3)
15.6
(29.3)
8.9
2.4
5.0
(13.0)
(13.5)
12.0
5.1
(9.3)
(5.7)
(20.0)
11.4
14.6
(3.1)
2.9
(6.2)
9.4
12.4
1.5
17.1
(24.9)
9.4
12.4
1.5
(1.6)
(21.2)
9.4
12.4
1.5
2.1
(9.2)
(0.3)
(5.9)
(25.3)
(40.7)
(41.4)
1.9
2.4
5.3
(31.8)
1.3
1.4
(4.9)
(10.2)
(12.4)
(8.1)
2.3
(4.1)
(4.8)
(14.7)
(9.0)
(15.5)
(11.1)
(1.8)
(37.4)
(0.6)
(4.1)
(98.5)
(6.4)
(109.6)
(3.4)
(5.2)
(4.8)
(6.2)
(19.5)
(1.4)
(2.7)
(2.9)
(5.0)
(12.0)
Other
7.5
0.6
1.9
0.6
10.5
- 0
- 0
- 0
- 0
- 0
- 0
2.1
1.3
0.9
4.3
- 0
3.3
3.0
1.6
7.9
5.6
4.7
4.6
6.3
21.2
2.9
3.4
7.4
3.9
17.6
2.3
6.0
5.7
8.7
22.7
2.7
7.0
6.4
21.1
37.2
13.1
4.4
4.9
4.7
27.1
3.8
4.4
4.8
4.7
17.8
3.8
4.4
4.8
4.7
17.7
- 0
- 0
- 0
- 0
- 0
- 0
29.8
23.0
18.5
71.3
20.0
6.0
- 0
- 0
26.0
(5.8)
- 0
- 0
- 0
(5.8)
- 0
- 0
7.1
14.7
21.8
16.1
14.5
(80.3)
11.7
(38.0)
10.4
13.4
13.5
12.1
49.3
12.3
15.9
15.3
13.3
56.9
1.3
0.9
- 0
- 0
2.2
5.2
0.5
- 0
- 0
5.7
1.8
- 0
- 0
- 0
1.8
1.7
- 0
- 0
- 0
1.7
2.0
- 0
- 0
- 0
2.0
1.7
- 0
- 0
- 0
1.7
1.7
- 0
- 0
- 0
1.7
0.1
(0.1)
(0.4)
0.4
- 0
(0.2)
- 0
- 0
- 0
(0.2)
0.1
- 0
(1.2)
- 0
(1.1)
- 0
- 0
- 0
(0.2)
(0.2)
(0.2)
- 0
- 0
- 0
(0.2)
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
Miscellaneous
- 0
0.3
0.5
0.4
1.2
0.1
0.4
(0.6)
0.5
0.4
- 0
- 0
(0.2)
(2.2)
(2.4)
(0.3)
(0.2)
0.2
- 0
(0.3)
0.5
- 0
- 0
- 0
0.5
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
6.0
3.8
2.1
2.4
14.2
10.8
6.5
0.5
5.2
22.9
8.4
(0.1)
2.7
6.9
17.9
10.5
5.8
8.6
9.5
34.4
33.2
17.8
14.7
16.3
82.0
21.1
18.1
11.8
16.8
67.8
15.3
83.3
12.7
10.1
121.4
30.3
16.3
12.0
10.1
68.7
71.5
13.4
13.0
13.4
111.3
20.9
18.4
13.0
13.4
65.7
27.9
13.4
13.0
13.4
67.7
2.7
(0.1)
3.0
10.3
15.9
3.3
(9.5)
(6.9)
9.4
(3.7)
3.6
(5.6)
(7.9)
5.4
(4.5)
4.2
3.9
(13.9)
(0.1)
(5.9)
3.0
3.3
4.0
6.7
17.0
(17.8)
- 0
- 0
(0.3)
(18.1)
0.2
- 0
- 0
- 0
0.2
3.5
(3.5)
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
78.2
127.2
202.8
286.0
286.0
359.8
410.2
318.8
350.4
350.4
341.8
403.5
387.4
427.0
427.0
394.5
432.1
510.2
526.4
526.4
524.3
485.1
464.9
464.9
464.9
468.0
466.1
207.1
207.1
207.1
281.8
267.8
285.2
285.2
285.2
269.3
389.1
312.4
312.4
312.4
263.8
271.5
273.9
273.9
273.9
284.2
293.9
296.5
296.5
296.5
307.4
321.4
326.2
326.2
326.2
$ 322.3
$ 356.9
$ 494.8
$ 595.1
$ 595.1
$ 665.9
$ 687.1
$ 750.9
$ 694.9
$ 694.9
$ 652.7
$ 788.6
$ 741.5
$ 809.2
$ 809.2
$ 769.2
$ 807.8
$ 699.4
$ 790.0
$ 790.0
$ 837.9
$ 763.3
$ 844.7
$ 871.2
$ 871.2
$ 849.1
$ 844.7
$ 377.2
$ 434.7
$ 434.7
$ 517.2
$ 540.0
$ 551.2
$ 475.2
$ 475.2
$ 446.3
$ 603.4
$ 553.1
$ 709.3
$ 709.3
$ 591.7
$ 605.7
$ 591.1
$ 537.1
$ 537.1
$ 504.3
$ 510.0
$ 524.8
$ 503.2
$ 503.2
$ 485.5
$ 524.8
$ 538.5
$ 515.4
$ 515.4
$ 45.2
$ 108.2
$ 3.0
$ 13.9
$ 4.7
$ 11.0
$ 32.7
$ 3.0
$ (0.3)
$ 7.0
$ 6.0
$ 15.7
$ 10.2
$ 16.7
$ 18.2
$ 17.6
$ 62.7
$ 15.9
$ 17.6
$ 17.6
$ 17.6
$ 68.5
$ 13.1
$ 17.6
$ 17.6
$ 17.6
$ 66.0
$ - 0
$ - 0
$ - 0
$ - 0
$ - 0
*Net tax payments from affiliates under tax sharing and dividends from insurance subsidiaries excludes projected amounts related to intercompany tax sharing payments paid by the holding company to the
life companies and immediately dividended back to the non-life companies as such amounts had no impact on holding company liquidity
Share Rollforward & Dividend Calculation
Common shares outstanding - BOP
- 0
0.3
(0.1)
0.2
- 0
0.8
0.4
- 0
0.3
- 0
0.6
0.4
0.2
0.1
- 0
0.4
0.4
0.4
0.2
cactse: cactse: Plug to tie to analyst model outstanding shares
1.4
0.4
0.3
0.0
0.2
0.9
0.5
0.1
0.2
0.1
0.8
0.6
0.2
0.2
0.3
1.3
0.6
0.1
0.2
0.8
1.7
1.1
1.1
0.8
0.9
3.9
1.0
1.0
0.9
0.9
3.8
1.0
0.9
0.9
0.9
3.8
Repurchases
- 0
(4.4)
(2.6)
(1.9)
(8.9)
(1.757)
(5.909)
(6.185)
(4.639)
(18.5)
(5.3)
(5.6)
(6.9)
(2.8)
(20.6)
(5.3)
(3.3)
(3.1)
- 0
(11.7)
(2.1)
(3.3)
(1.3)
(1.1)
(7.8)
- 0
(3.0)
- 0
(2.5)
(5.5)
(2.9)
(3.3)
(4.8)
(4.4)
(15.4)
(5.1)
(2.0)
(3.0)
(4.4)
(14.5)
(4.1)
(3.0)
(1.9)
(1.9)
(10.9)
(0.5)
(0.5)
(0.5)
(0.5)
(2.1)
- 0
- 0
(0.6)
(0.6)
(1.2)
223.5
219.4
222.0
220.3
220.3
219.3
213.8
207.6
203.3
203.3
198.63
193.47
186.74
184.028
184.0
179.1
176.2
173.5
173.8
173.8
172.1
169.0
167.8
166.9
166.9
167.4
164.4
164.6
162.2
162.2
160.0
156.8
152.2
148.1
148.1
143.6
141.7
138.9
135.3
135.3
132.3
130.4
129.3
128.3
128.3
128.8
129.2
129.6
130.1
130.1
131.0
132.0
132.3
132.6
132.6
Average - Basic
$ 11.05
$ 11.31
$ 14.43
$ 15.99
$ 13.23
$ 18.79
$ 17.03
$ 17.12
$ 17.15
$ 17.25
$ 16.32
$ 18.03
$ 18.03
$ 19.18
$ 17.75
$ 16.88
$ 18.70
$ 16.80
$ 17.14
cactse: cactse:since no share repurchases made this quarter, estimate was based on Yahoo Finance 12/31/16 balance
$ 17.37
$ 20.61
Windows User: Windows User: Per 2017 YTD Share Repurchase schedule from Treasury - reflecting the average price of share buybacks for the quarter
$ 20.61
$ 22.19
$ 24.38
$ 21.40
$ 23.55
$ 20.18
$ 20.91
$ 16.25
$ 18.40
$ 16.25
$ 16.46
$ 15.69
$ 17.14
$ 16.37
$ 16.33
$ 15.24
$ 16.68
$ 22.61
$ 18.17
$ 24.34
$ 25.70
Kircher, Jeff: Kircher, Jeff: Spot price as of date/time model published on 4/21/21PM
cactse: cactse:since no share repurchases made this quarter, estimate was based on Yahoo Finance 12/31/16 balance
Windows User: Windows User: Per 2017 YTD Share Repurchase schedule from Treasury - reflecting the average price of share buybacks for the quarter
cactse: cactse: Plug to tie to analyst model outstanding shares
$ 26.34
$ 27.00
$ 25.52
$ 27.68
$ 28.37
$ 29.08
$ 29.80
$ 28.71
$ 30.55
$ 31.31
$ 32.10
$ 32.90
$ 32.49
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17.0
37.6
23.3
103.4
181.2
38.0
90.2
32.4
10.0
170.6
57.6
45.8
32.3
95.7
231.4
67.2
69.2
(2.5)
(6.5)
127.6
(9.2)
5.5
(6.7)
(4.2)
(14.7)
- 0
- 0
- 0
- 0
- 0
- 0
500.0
- 0
- 0
500.0
- 0
- 0
- 0
150.0
150.0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
(22.1)
27.6
9.6
9.7
24.9
(16.3)
20.0
13.7
0.6
18.0
(16.1)
19.6
28.1
33.8
65.4
22.2
27.3
(63.7)
17.4
3.2
(11.4)
26.1
30.2
17.7
62.7
(17.8)
- 0
- 0
(0.3)
(18.1)
0.2
- 0
- 0
- 0
0.2
3.5
(3.5)
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
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(1) Net tax payments from affiliates under tax sharing and dividends from insurance subsidiaries excludes projected amounts related to intercompany tax sharing payments paid by the holding
company to the life companies and immediately dividended back to the non-life companies as such amounts had no impact on holding company liquidity
Net Tax Payments from Affiliates excl Tax Sharing (Clarke)
4.3
15.3
(0.2)
0.8
20.3
(5.1)
2.0
2.9
1.2
1.0
1.2
1.2
7.1
15.8
25.3
15.3
13.5
(81.0)
11.1
(41.1)
9.8
12.4
12.9
11.5
46.5
3.0
13.9
4.7
11.0
32.7
62.3
3.0
(0.3)
7.0
6.0
15.7
10.2
16.7
18.2
17.6
62.7
15.9
17.6
17.6
17.6
68.5
13.1
17.6
17.6
17.6
66.0
Check
- 0
0.0
- 0
0.0
0.0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
(0.0)
- 0
(0.0)
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
($ millions)
05/12/21
Actual
2020
2021
67.8
62.5
50.5
113.3
294.1
83.1
83.1
- 0
20.0
15.1
- 0
10.6
45.7
- 0
- 0
- 0
Fees received by LLC, 40|86, and 40|86 Mortgage
29.8
27.0
29.0
25.9
111.7
31.7
28.4
3.3
a
11.6
12.5
2.8
2.2
29.1
2.1
2.2
(0.1)
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
150.0
150.0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
Net I/C operating flows with affiliates (net zero over time)
(20.0)
11.4
14.6
(3.1)
2.9
(6.2)
(15.4)
9.2
b
(9.0)
(15.5)
(11.1)
(1.8)
(37.4)
(0.6)
1.4
(2.0)
c
Other
Mostly flows from exercised stock options, and accumulated earnings of Corp entities (PMA, ALMD)
2.7
7.0
6.4
21.1
37.2
13.1
0.8
12.3
d
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
1.2
0.5
2.8
4.5
0.5
0.5
- 0
0.2
26.4
0.2
26.4
53.2
2.1
2.1
(0.0)
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
Tax payments to external parties (IRS, Dept of Rev, etc.)
- 0
- 0
7.1
14.7
21.8
16.1
16.2
0.1
Taxes / withholdings on P-shares and restricted shares
1.7
- 0
- 0
- 0
1.7
2.0
1.7
(0.3)
- 0
- 0
- 0
(0.2)
(0.2)
(0.2)
- 0
0.2
Miscellaneous
Mostly corporate entity expenses
3.5
(3.5)
- 0
- 0
- 0
- 0
- 0
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*Actual reflects bank cash balances and settled investment holdings, unless otherwise noted
Variance Explanations
a
Higher fees at LLC of $1.8M and 40|86 Advisors of $1.5M.
b
c
d
Primarily related to the exercise of stock options of $10.8M (not a forecasted item) and cash accumulation of $2.3M at WBD and $1.3M at PMA, partially offset by Non-Pshare tax payments of $2.9M.
e
Due to $2.2M of 1Q 21 share repurchases with a settlement date of 4/1/21.
f
Reflects WBD performance earn-out payment that did not occur in 1Q (but rather 4/1, timing) of $2.1M and lower DirectPath purchase price and acquisition cost consideration of $1.9M
g
CORP LIQUIDITY FCF
(Dollars in millions)
Trailing Twelve Months
42.3
120.2
90.1
161.1
413.7
92.0
149.6
108.2
60.3
410.0
118.4
150.2
125.6
178.2
572.4
140.9
166.1
83.6
74.1
464.6
25.8
96.0
79.1
73.1
274.0
33.8
107.0
82.7
78.2
301.8
436.5
594.9
(19.8)
(17.7)
(17.7)
(28.0)
(83.2)
(24.4)
(13.2)
(17.8)
(18.9)
(74.3)
(39.3)
(33.0)
(23.6)
(14.7)
(110.6)
(21.5)
(19.0)
(112.0)
(21.3)
(173.9)
(24.7)
(25.2)
(18.3)
(21.1)
(89.2)
(29.8)
(17.6)
(16.4)
(19.8)
(83.7)
(89.2)
(92.8)
1.6
75.1
71.4
111.6
259.7
66.6
114.6
90.4
15.9
287.4
78.9
90.8
94.7
122.4
386.8
101.2
104.3
49.8
12.7
268.0
(11.4)
29.2
45.3
11.6
74.7
(10.3)
45.2
48.8
16.7
100.4
299.8
409.1
- 0
- 0
- 0
- 0
- 0
- 0
64.9
- 0
- 0
64.9
- 0
- 0
- 0
146.4
146.4
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
- 0
64.9
146.4
(14.8)
(1.9)
(210.1)
54.8
(172.0)
9.2
34.3
(3.7)
(73.7)
(33.9)
(22.1)
43.4
27.9
152.2
201.4
(64.0)
10.1
(17.0)
(54.0)
(124.9)
(43.1)
(3.9)
12.1
(21.6)
(56.5)
(28.7)
25.4
9.0
(23.1)
(17.5)
(65.2)
159.5
(3.9)
-0
-0
(0.3)
(4.2)
0.2
-0
-0
-0
0.2
3.5
(3.5)
-0
-0
-0
-0
-0
-0
-0
-0
-0
-0
-0
-0
-0
-0
-0
-0
-0
-0
3.5
(3.5)
396.6
377.9
376.0
165.9
396.6
220.4
229.8
264.1
260.4
220.4
186.7
168.1
208.0
235.9
186.7
388.1
324.1
334.2
317.2
388.1
263.2
220.1
216.1
228.3
263.2
206.7
178.0
203.4
212.4
206.7
229.8
168.1
$ 377.9
$ 376.0
$ 165.9
$ 220.4
$ 220.4
$ 229.8
$ 264.1
$ 260.4
$ 186.7
$ 186.7
$ 168.1
$ 208.0
$ 235.9
$ 388.1
$ 388.1
$ 324.1
$ 334.2
$ 317.2
$ 263.2
$ 263.2
$ 220.1
$ 216.1
$ 228.3
$ 206.7
$ 206.7
$ 178.0
$ 203.4
$ 212.4
$ 189.2
$ 189.2
$ 168.1
$ 324.1
- 0
(0.0)
- 0
(0.0)
(0.0)
- 0
(0.0)
(0.0)
(0.0)
(0.0)
(0.0)
(0.0)
(0.0)
(0.0)
(0.0)
(0.0)
(0.0)
(0.0)
(0.0)
(0.0)
(1) A non-GAAP measure. See the Appendix for a reconciliation to the corresponding GAAP measure.
(2) Cash flows exclude capital contributions to insurance subsidiaries, acquisitions, dividend payments, stock repurchases, and financing transactions.
FCF SLIDE (ACTUAL)
For the Quarter
Trailing Twelve Months
118.4
140.9
436.5
594.9
(39.3)
(21.5)
(89.2)
(92.8)
78.9
101.2
299.8
409.1
-0
0.0
64.9
146.4
(22.1)
(64.0)
(65.2)
159.5
3.5
-0
3.5
(3.5)
186.7
388.1
229.8
168.1
$ 168.1
$ 324.1
$ 168.1
$ 324.1
(1) A non-GAAP measure. See the Appendix for a reconciliation to the corresponding GAAP measure.
(2) Cash flows exclude capital contributions to insurance subsidiaries, acquisitions, dividend payments, stock repurchases, and financing transactions.
FCF ANALYSIS
2015
7.9
27.1
21.0
(9.5)
15.4
13.4
1.7
20.9
(22.9)
21.0
22.4
22.8
43.3
7.0
13.8
17.2
6.4
44.3
(21.1)
13.8
17.3
6.3
16.2
(17.4)
13.7
17.3
6.3
19.8
4.3
(40.7)
(31.8)
(12.4)
(8.1)
2.3
(4.1)
(4.8)
(14.7)
(9.0)
(15.5)
(11.1)
(1.8)
(37.4)
(0.6)
(4.1)
(98.5)
(6.4)
(109.6)
(3.4)
(5.2)
(4.8)
(6.2)
(19.5)
(1.4)
(2.7)
(2.9)
(5.0)
(12.0)
- 0
- 0
(71.3)
(26.0)
5.8
- 0
- 0
- 0
5.8
- 0
- 0
(7.1)
(14.7)
(21.8)
(16.1)
(14.5)
80.3
(11.7)
38.0
(10.4)
(13.4)
(13.5)
(12.1)
(49.3)
(12.3)
(15.9)
(15.3)
(13.3)
(56.9)
71.3
26.0
(5.8)
0.0
0.0
0.0
(5.8)
0.0
0.0
7.1
14.7
21.8
16.1
14.5
(80.3)
11.7
(38.0)
10.4
13.4
13.5
12.1
49.3
12.3
15.9
15.3
13.3
56.9
25.0
46.2
46.2
0.0
0.0
55.0
(117.7)
(62.7)
(24.8)
(48.0)
33.7
46.7
7.6
50.5
30.0
50.2
59.7
190.5
0.0
Elevated capital release in year following Beechwood recapture as assets were redeployed6
(78.0)
Higher dividends assuming reduction of target RBC by ~23 points (408% to 385%) @ ~$5M/point
(112.5)
(112.5)
Lower TAC on 1Q losses (~14 pts) and higher capital requirements from assumed credit migration (~11 pts) @ ~$5M/point
70.0
27.5
27.5
125.0
Normalized distributable earnings (after interest) Gross of capital required to support growth
$ 361.4
$ 348.8
$ 345.4
$ 324.6
$ 60.8
$ 114.6
$ 90.4
$ 62.1
$ 327.8
$ 36.4
$ 90.8
$ 184.3
$ 55.7
$ 367.2
$ 36.4
$ 67.0
$ 3.1
$ 71.2
$ 177.7
$ 49.5
$ 72.6
$ 108.9
$ 83.5
$ 314.5
$ 2.0
$ 61.1
$ 64.2
$ 30.0
$ 157.3
0.0
0.0
0.0
0.0
8.8
8.8
-56.1
-3.8
-0.1
0.1
-59.9
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
Note:
Distributable earnings ties to the financial model corporate liquidity total sources less total uses plus adjustment to balance to ledger cash (i.e. in-transit items), excluding capital contributions to insurance
subsidiaries, acquisitions, stock repurchases, dividend payments, and financing transactions.
1
Beginning in 2017, management fees, net intercompany settlements, and general expenses were reclassified to their current presentation, reducing comparability to the 2016 period (net total is comparable)
2
Volatility in tax payments under tax sharing reflect settlement of intercompany receivables/payables and simply increase/decrease the dividend capacity from subsidiaries; therefore, no net cash flow consequence
3
NOLs that existed prior to 2017 were exhausted in 2017, resulting in federal tax payments. In Q318, new DTAs were created as a result of the LTC reinsurance transaction, which is projected to be depleted
by the end of 2021, at which point CNO will again be subject to federal tax payments. 2019 reflects a small IRS recoverable following return to provision true-ups on the 2017 return which was filed in 2018.
4
Higher interest expense in 2019 reflects an increase in the amount of debt outstanding and a higher blended interest rate following the June 2019 refinancing
5
For periods 2019-2022, calculated as the increase in dividend capacity under steady state assumption by holding required capital flat to the levels from the most recent year-end. 2018 is difficult to quantify
given the significant volatility in required capital from the Q318 LTC reinsurance transaction and the Q418 NAIC tax reform factor changes. Therefore, given the recent string in growth began in mid-2018, we
estimated the impact at roughly half the 2019 impact and just below the $30-50M range disclosed as the amount of capital required to support our business in 2019. Reasonable w/in all material respects.
6
In 2016, CNO contributed $200M of capital to WNIC to fund the recaptured block from Beechwood. Per 2017 Plan workpapers, the recapture was estimated to impact (increase) required capital by
~$19.5M or ~$78M of capital (at 400% RBC) as a result of the high capital requirements on the non-traditional assets that were transferred to CNO with the recaptured block. This capital was gradually
released throughout the following year (2017) as the transferred assets were redeployed to more traditional asset classes, resulting in an outsized level of dividends.
FCF RECON
(In millions)
14.7
80.7
(Dollars in millions)
$ 87.8
$ 83.1
$ 233.1
$ 335.1
$ (4.7)
Higher dividends from insurance companies of $97.3M and KFA of $10.6M
$ 102.0
Higher dividends from insurance companies of $97.3M and KFA of $10.6M
Management Fees
29.8
31.7
116.1
113.6
1.9
Primarily lower management fees at CNO Services, LLC ($2.9M) mainly due to reversal of markup on CPL direct expenses ($3.7M) to achieve reduction in state income taxes
(2.5)
Primarily lower management fees at CNO Services, LLC ($5.7M) mainly due to reversal of markup on CPL direct expenses ($3.7M) to achieve reduction in state income taxes; partially offset by higher management fees at 40|86 of $2.3M due to higher AUM
Surplus Debenture Interest
12.1
12.0
59.4
57.2
(0.1)
(2.2)
Lower surplus debenture interest paid in 2020 by CPL of $1.7M and CLTX of $0.9M
Earnings on Corporate Investments
11.6
2.1
20.3
19.6
(9.5)
(0.7)
Primarily higher trading gains on settled trades as 40|86 capitalized on market dislocations in1Q 20 and 2Q 20
Tax Refund
Other
(22.9)
12.0
7.6
69.4
34.9
Primarily related to higher receipts related to stock options (net of Non-Pshare tax) of $11M (not a forecasted item) and higher cash accumulation at WBD of $2.4M
61.8
Primarily related to higher receipts related to stock options (net of Non-Pshare tax) of $10.0M (not a forecasted item) and higher cash accumulation by WBD of $5.2M
Holding Company Sources of Cash2
118.4
140.9
436.5
594.9
22.5
158.4
(39.3)
(21.5)
(89.2)
(92.8)
17.8
Primarily related to lower net tax payments to affiliates made under the tax sharing agreement of $3.0M and lower contributions to non-insurance subsidiaries of $1.2M
(3.6)
Primarily related to higher net tax payments to affiliates made under the tax sharing agreement of $22.7M related to higher non-life taxable income resulting from the Company’s direct reallocation method tax strategy (as a consequence, more non-life income is offset by the CLTX NOL, which is subsequently reimbursed to CLTX via tax sharing), general expenses of $7.3M and WBD earnout payments of $5.9M
Tax Payments
-0
(16.1)
-0
(37.9)
(16.1)
Higher tax payments made in 2020 to tax authorities related to full utilization of life NOLs in 2Q20. Life income is now only offset by 35% of the non-life NOL, resulting in higher federal tax expense.
(37.9)
Higher tax payments made in 2020 to tax authorities related to full utilization of life NOLs in 2Q20. Life income is now only offset by 35% of the non-life NOL, resulting in higher federal tax expense.
Interest Payments
(0.2)
(2.1)
(47.5)
(55.1)
(1.9)
Increase in interest expense primarily related to Hybrid debt due 2060 (5.125% Qtrly.) issued in 4Q 20
(7.6)
Increase in interest expense related to FY impact of 2029 senior note interest (debt added in 2019 with 5.25% semi-annual interest payments) and Hybrid debt due 2060 (5.125% Qtrly.) added in 4Q 20
Excess Cash Flow to Holding Company2
78.9
101.2
299.8
409.1
22.3
109.3
0.0
0.0
64.9
146.4
0.0
Added $150M Hybrid debt due 2060 (5.125% Qtrly.) in 4Q 20; less debt financing costs of $3.6M
81.5
Added $150M Hybrid debt due 2060 (5.125% Qtrly.) in 4Q 20; less debt financing costs of $3.6M and net impact of 2029/2020 debt transactions of $65M (net of $10.1M of debt refinancing costs).
Share Repurchases
16.5
Dividend Payments to Stockholders
Net Change in Holding Company Cash and Investments
(22.1)
(64.0)
(65.2)
159.5
(41.9)
224.7
3.5
-0
3.5
(3.5)
(3.5)
(7.0)
186.7
388.1
229.8
168.1
201.4
(61.7)
$ 168.1
$ 324.1
$ 168.1
$ 324.1
156.0
$ 156.0
(1) A non-GAAP measure. See the Appendix for a reconciliation to the corresponding GAAP measure.
(2) Cash flows exclude capital contributions to insurance subsidiaries, acquisitions, dividend payments, stock repurchases, and financing transactions.
&F &D
2020 outsized due to earnings/capital outperformance (favorable COVID impacts, variable NII, strong investment valuations) and lower capital strain from lower new business; 2021 assumes lower earnings, unfavorable credit migration, and higher capital strain from new business
Management Fees
13.6
29.1
8.6
2020 was outsized due to short-term trading gains amid market dislocation
Other
20.9
34.5
53.1
2020 and 2021 are elevated due to a higher volume of exercised stock options
Holding Company Sources of Cash2
$ 404.2
$ 572.4
$ 464.6
(74.3)
(110.6)
(173.9)
2020 elevated due to higher net affiliated tax payments under tax sharing, higher general expenses, and WBD earn-out payment; 2021 reflects $94M federal tax refund, offset in the Tax Refund line directly below
Tax (Payments) / Refund
5.8
(21.8)
38.0
2020 reflects partial year of federal tax payments as life NOL was fully exhausted in 2020; 2021 reflects a full year of federal tax payments more than offset by the $94M federal tax refund (see comment above)
Interest Payments
(48.3)
(53.2)
(60.8)
2020 higher than 2019 due to full year of interest expense on incremental borrowings following Jun 2019 Senior Note Offering; 2021 higher than 2020 due to interest expense on Nov 2020 Subordinated Debt offering
Excess Cash Flow to Holding Company2
$ 287.4
$ 386.8
$ 268.0
64.9
146.4
-0
Share Repurchases
2019 reflects the WBD acquisition; 2021 reflects the Ion acquisition
Net Change in Holding Company Cash and Investments
$ (33.9)
$ 201.4
$ (124.9)
0.2
-0
-0
220.4
186.7
388.1
$ 186.7
$ 388.1
$ 263.1
(1) A non-GAAP measure. See the Appendix for a reconciliation to the corresponding GAAP measure.
(2) Cash flows exclude capital contributions to insurance subsidiaries, acquisitions, dividend payments, stock repurchases, and financing transactions.
DEBT
2018
2019
2020
2021
2022
2023
Q1
Q2
Q3
Q4
TY
Q1
Q2
Q3
Q4
TY
Q1
Q2
Q3
Q4
TY
Q1
Q2
Q3
Q4
TY
Q1
Q2
Q3
Q4
TY
Q1
Q2
Q3
Q4
TY
325.0
325.0
325.0
325.0
325.0
325.0
325.0
-0
-0
325.0
-0
-0
-0
-0
-0
-0
-0
-0
-0
-0
-0
-0
-0
-0
-0
-0
-0
-0
-0
-0
325.0
325.0
325.0
325.0
325.0
325.0
-0
-0
-0
-0
-0
-0
-0
-0
-0
-0
-0
-0
-0
-0
-0
-0
-0
-0
-0
-0
-0
-0
-0
-0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
-0
-0
-0
-0
-0
-0
-0
500.0
500.0
-0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
-0
-0
-0
-0
-0
-0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
-0
-0
-0
-0
-0
-0
-0
-0
-0
-0
-0
-0
-0
-0
-0
150.0
150.0
150.0
150.0
150.0
150.0
150.0
150.0
150.0
150.0
150.0
150.0
150.0
150.0
150.0
-0
-0
-0
-0
-0
-0
-0
-0
-0
-0
-0
-0
-0
150.0
150.0
150.0
150.0
150.0
150.0
150.0
150.0
150.0
150.0
150.0
150.0
150.0
150.0
150.0
150.0
150.0
(0.7)
(0.6)
(0.5)
(0.5)
(0.7)
(0.4)
(0.3)
(0.2)
(0.1)
(0.4)
(0.0)
(0.0)
(0.0)
(0.0)
(0.0)
(0.0)
(0.0)
(0.0)
(0.0)
(0.0)
(0.0)
(0.0)
(0.0)
(0.0)
(0.0)
(0.0)
(0.0)
(0.0)
(0.0)
(0.0)
(0.6)
(0.5)
(0.5)
(0.4)
(0.4)
(0.3)
(0.2)
(0.1)
(0.0)
(0.0)
(0.0)
(0.0)
(0.0)
(0.0)
(0.0)
(0.0)
(0.0)
(0.0)
(0.0)
(0.0)
(0.0)
(0.0)
(0.0)
(0.0)
(0.0)
(0.0)
(0.0)
(0.0)
(0.0)
(0.0)
(2.9)
(2.6)
(2.3)
(2.0)
(2.9)
(1.7)
(1.4)
-0
-0
(1.7)
-0
-0
-0
-0
-0
-0
-0
-0
-0
-0
-0
-0
-0
-0
-0
-0
-0
-0
-0
-0
(2.6)
(2.3)
(2.0)
(1.7)
(1.7)
(1.4)
-0
-0
-0
-0
-0
-0
-0
-0
-0
-0
-0
-0
-0
-0
-0
-0
-0
-0
-0
-0
-0
-0
-0
-0
(6.9)
(6.7)
(6.5)
(6.3)
(6.9)
(6.1)
(5.9)
(5.7)
(5.5)
(6.1)
(5.3)
(5.1)
(4.9)
(4.7)
(5.3)
(4.5)
(4.3)
(4.0)
(3.8)
(4.5)
(3.6)
(3.3)
(3.1)
(2.9)
(3.6)
(2.6)
(2.4)
(2.1)
(1.8)
(2.6)
(6.7)
(6.5)
(6.3)
(6.1)
(6.1)
(5.9)
(5.7)
(5.5)
(5.3)
(5.3)
(5.1)
(4.9)
(4.7)
(4.5)
(4.5)
(4.3)
(4.0)
(3.8)
(3.6)
(3.6)
(3.3)
(3.1)
(2.9)
(2.6)
(2.6)
(2.4)
(2.1)
(1.8)
(1.6)
(1.6)
-0
-0
-0
-0
-0
-0
-0
(5.8)
(5.7)
-0
(5.6)
(5.5)
(5.3)
(5.2)
(5.6)
(5.1)
(5.0)
(4.9)
(4.8)
(5.1)
(4.6)
(4.5)
(4.4)
(4.3)
(4.6)
(4.1)
(4.0)
(3.9)
(3.7)
(4.1)
-0
-0
-0
-0
-0
-0
(5.8)
(5.7)
(5.6)
(5.6)
(5.5)
(5.3)
(5.2)
(5.1)
(5.1)
(5.0)
(4.9)
(4.8)
(4.6)
(4.6)
(4.5)
(4.4)
(4.3)
(4.1)
(4.1)
(4.0)
(3.9)
(3.7)
(3.6)
(3.6)
-0
-0
(4.2)
(4.2)
(4.2)
(4.2)
(4.2)
(4.2)
(4.2)
(4.1)
(4.1)
(4.2)
(4.1)
(4.1)
(4.1)
(4.1)
(4.1)
(4.2)
(4.2)
(4.2)
(4.2)
(4.2)
(4.2)
(4.2)
(4.2)
(4.1)
(4.1)
(4.1)
(4.1)
(4.1)
(4.1)
(4.1)
(4.1)
(4.1)
915.1
915.7
916.2
916.8
916.8
917.3
988.3
988.7
989.1
989.1
989.4
989.8
990.1
1,136.2
1,136.2
1,136.6
1,136.9
1,137.3
1,137.6
1,137.6
1,138.0
1,138.4
1,138.7
1,139.1
1,139.1
1,139.5
1,139.9
1,140.3
1,140.7
1,140.7
(0)
0
(0)
(0)
(0)
(0)
(0)
(0)
(0)
(0)
(0)
(0)
(0)
0.2
0.2
0.3
0.9
0.3
0.3
0.3
0.2
1.2
-0
-0
-0
-0
-0
-0
-0
-0
-0
-0
-0
-0
-0
-0
-0
-0
-0
-0
-0
-0
325.0
325.0
325.0
325.0
325.0
325.0
-0
-0
-0
-0
-0
-0
-0
-0
-0
-0
-0
-0
-0
-0
-0
-0
-0
-0
Rate
4.50%
4.50%
4.50%
4.50%
4.50%
4.50%
3.9
3.9
3.9
3.9
15.8
4.0
3.1
-0
-0
7.1
-0
-0
-0
-0
-0
-0
-0
-0
-0
-0
-0
-0
-0
-0
-0
-0
-0
-0
-0
-0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
Rate
5.25%
5.25%
5.25%
5.25%
5.25%
5.25%
5.25%
5.25%
5.25%
5.25%
5.25%
5.25%
5.25%
5.25%
5.25%
5.25%
5.25%
5.25%
5.25%
5.25%
5.25%
5.25%
5.25%
5.25%
6.7
6.7
6.7
6.8
27.0
6.8
6.8
6.8
6.8
27.0
6.8
6.8
6.8
6.8
27.1
6.8
6.8
6.8
6.8
27.2
6.8
6.8
6.8
6.8
27.2
6.8
6.8
6.8
6.8
27.3
-0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
Rate
5.25%
5.25%
5.25%
5.25%
5.25%
5.25%
5.25%
5.25%
5.25%
5.25%
5.25%
5.25%
5.25%
5.25%
5.25%
5.25%
5.25%
5.25%
5.25%
-0
-0
-0
-0
-0
-0
1.4
6.7
6.7
14.7
6.7