CNO Financial Group reports first quarter 2013 results

            CNO Financial Group reports first quarter 2013 results

Results reflect continued growth in core business and earnings; Continued
strength in capital ratios

PR Newswire

CARMEL, Ind., April 24, 2013

CARMEL, Ind., April 24, 2013 /PRNewswire/ -- CNO Financial Group, Inc. (NYSE:
CNO) today announced first quarter of 2013 net income of $11.9 million, or 5
cents per diluted share, and operating earnings (1) of $49.7 million, or 21
cents per diluted share. First quarter net income was significantly impacted
by the loss on extinguishment of debt of $57.2 million from the previously
announced completion of our tender offer to repurchase a portion of our 7.0%
Convertible Senior Debentures.

"We are pleased to report that CNO continues to deliver strong performance
with growing operating earnings per share, sales and premium income," CEO Ed
Bonach said. "Our consistent strong performance has enabled us to continue to
generate and effectively deploy excess capital, enhancing the company's
financial flexibility and supporting investment in future growth."

First Quarter 2013 Highlights

  oSales, as defined by total new annualized premium ("NAP") (2): $98.1
    million, up 2% from 1Q12
  oNet income per diluted share: 5 cents, compared to 21 cents in 1Q12
  oNet operating income (1) per diluted share: 21 cents compared to 15 cents
    in 1Q12
  oThe consolidated statutory risk-based capital ratio was 366%, reflecting
    statutory operating earnings of $112.5 million and dividend payments to
    the holding company of $81 million
  oUnrestricted cash and investments held by our holding company were $244.1
    million at March 31, 2013, after $139.4 million of debt and tender offer
    payments

Quarterly Segment Operating Results
                                                        Three months ended
                                                        March31,
                                                        2013           2012
                                                        (Dollars in millions,
                                                        except per share data)
EBIT (4):
Bankers Life                                            $   62.1       $ 70.5
Washington National                                     29.4           24.7
Colonial Penn                                           (5.4)          (9.8)
Other CNO Business                                      3.6            (2.3)
EBIT from business segments                             89.7           83.1
Corporate Operations, excluding corporate interest      3.0            (1.8)
expense
EBIT                                                    92.7           81.3
Corporate interest expense                              (15.1)         (17.5)
Operating earnings before tax                           77.6           63.8
Tax expense on operating income                         27.9           23.2
Net operating income (1)                                49.7           40.6
Net realized investment gains (net of related           9.4            14.1
amortization and taxes)
Fair value changes in embedded derivative liabilities   1.3            4.5
(net of related amortization and taxes)
Equity in earnings of certain non-strategic investments
and earnings attributable to non-controlling interests  (1.8)          —
(net of taxes)
Loss on extinguishment of debt (net of taxes)           (57.2)         (.1)
Net income before valuation allowance for deferred tax  1.4            59.1
assets
Valuation allowance for deferred tax assets             10.5           —
Net income                                              $   11.9       $ 59.1
Per diluted share:
Net operating income                                    $   .21        $ .15
Net realized investment gains (net of related           .04            .05
amortization and taxes)
Fair value changes in embedded derivative liabilities   .01            .01
(net of related amortization and taxes)
Equity in earnings of certain non-strategic investments
and earnings attributable to                            (.01)          —

non-controlling interests (net of taxes)
Loss on extinguishment of debt (net of taxes)           (.24)          —
Valuation allowance for deferred tax assets             .04            —
Net income                                              $   .05        $ .21



The following table summarizes the financial impact of significant items (as
further described in the segment results below) on our 1Q13 net operating
income (dollars in millions, except per share amounts):



                       Three months ended
                       March 31, 2013*
                       Actual            Significant          Excluding
                       results           items                significant
                                                              items
Net Operating Income
(1):
Bankers Life           $    62.1         $     9.2            $     71.3
Washington National    29.4              —                    29.4
Colonial Penn          (5.4)             —                    (5.4)
Other CNO Business     3.6               —                    3.6
EBIT from business     89.7              9.2                  98.9
segments
Corporate Operations,
excluding corporate    3.0               —                    3.0
interest expense
EBIT (4)               92.7              9.2                  101.9
Corporate interest     (15.1)            —                    (15.1)
expense
Operating earnings     77.6              9.2                  86.8
before tax
Tax expense on         27.9              3.2                  31.1
operating income
Net operating income   $    49.7         $     6.0            $     55.7
Net operating income   $    .21          $     .02            $     .23
per diluted share
* See page 9 for the table of Net Operating Income Excluding Significant Items
for the three months ended March 31, 2012.

Segment Results
Bankers Life markets and distributes a variety of insurance products to
middle-income Americans at or near retirement through a dedicated field force
of career agents. NAP in 1Q13 was $60.5 million, up 3 percent from 1Q12 with
higher sales of life and supplemental health products being offset by lower
annuity sales as a result of the low interest rate environment and product
adjustments. Excluding annuities, NAP in 1Q13 was up 6 percent, driven by the
introduction of our new critical illness product and an increase in agent
force due to gains in agent retention.

Pre-tax operating earnings in 1Q13 compared to 1Q12 were down $8.4 million, or
12 percent. This decrease reflects an out-of-period adjustment related to the
long-term care block which reduced earnings in 1Q13 by $9.2 million.

Pre-tax operating earnings in 1Q12 of $70.5 million included: (i)
approximately $21 million of favorable reserve developments in the Medicare
supplement and long-term care blocks; partially offset by (ii) a $10 million
settlement with state securities regulators.

Washington National markets and distributes supplemental health and life
insurance to middle-income consumers through a wholly owned subsidiary and
independent insurance agencies. NAP in 1Q13 was $20.6 million, up 3 percent
from 1Q12 due to increased sales of supplemental health products.

Pre-tax operating earnings in 1Q13 compared to 1Q12 were up $4.7 million, or
19 percent. Such increase primarily reflects a 4 percent increase in
collected premiums and a reduction in the benefit ratio for the supplemental
health products.

Colonial Penn markets primarily graded benefit and simplified issue life
insurance directly to customers through television advertising, direct mail,
the internet and telemarketing. NAP in 1Q13 was $17.0 million, down 3 percent
from 1Q12. These sales were in line with our expectations and consistent with
a modest reduction in advertising spend this quarter.

The pre-tax operating loss in 1Q13 compared to 1Q12 reflects improved
productivity and a 6 percent growth in collected premiums.

Recognizing the accounting standard related to deferred acquisition costs, the
amount of our investment in new business during a particular period will have
a significant impact on this segment's results. We continue to expect this
segment to report an EBIT loss of between $5 million and $10 million in 2013.

Other CNO Business consists of blocks of various insurance products that are
no longer being actively marketed.

Results in 1Q13 compared to 1Q12 were favorable by $5.9 million. Pre-tax
operating earnings in 1Q13 were negatively impacted by a change in the
economics from certain universal life insurance policies consistent with the
preliminary settlement offered in a class action lawsuit and a reduction in
investment income due to lower invested assets as this segment's business runs
off.

The pre-tax operating loss in 1Q12 of $2.3 million included a $20 million
charge related to a tentative settlement in a class action lawsuit.

The run-off nature of the business in this segment will often result in
earnings that fluctuate between periods. We continue to expect this segment
to report EBIT in the range of $5 million to $20 million for 2013.

Corporate Operations includes our investment advisory subsidiary and corporate
expenses.

Results in 1Q13 compared to 1Q12 were favorable by $4.8 million primarily due
to lower expenses and favorable investment income in this quarter.

Net expenses in 1Q12 of $1.8 million included $7 million of expense related to
the relocation of Bankers Life's primary office.

Non-Operating Items
Net realized investment gains in 1Q13 were $9.4 million (net of related
amortization and taxes) with no other-than-temporary impairment losses. Net
realized investment gains in 1Q12 were $14.1 million (net of related
amortization and taxes), including total other-than-temporary impairment
losses of $7.9 million recorded in earnings.

During 1Q13 and 1Q12, we recognized an increase to earnings of $1.3 million
and $4.5 million, respectively, resulting from changes in the estimated fair
value of embedded derivative liabilities related to our fixed index annuities,
net of related amortization and income taxes. Such amounts reflect the
changes in market interest rates used to determine the derivative's estimated
fair value.

The results for 1Q13 include a $57.2 million loss on extinguishment of debt,
net of taxes, related to the previously announced completion of a tender offer
pursuant to which we purchased $59.3 million aggregate principal amount of our
7.0% Convertible Senior Debentures due 2016.

In 1Q13, we reduced the valuation allowance for deferred tax assets by $10.5
million resulting from the utilization of capital loss carryforwards during
the period.

Book value per diluted share, excluding other comprehensive income (loss) (5),
increased to $16.57 from $16.21 at December 31, 2012.

Statutory (based on non-GAAP measures) and GAAP Capital Information
Our consolidated statutory risk-based capital ratio was 366% at March 31,
2013, reflecting consolidated statutory operating earnings of $112.5 million
and the payment of dividends to the holding company of $81 million during the
quarter. Based on our continued expectation to generate strong statutory
earnings and excess capital, we anticipate total year dividend payments to the
holding company of $250 million to $300 million in 2013.

CNO did not repurchase any shares of its common stock during 1Q13 under its
securities repurchase program. CNO anticipates repurchasing securities in the
range of $250 million to $300 million during 2013. After taking into account
the $125 million paid to repurchase our convertible debentures in 1Q13, CNO
currently anticipates repurchasing an additional $125 million to $175 million
of its securities in 2013. As of March 31, 2013, the company had repurchase
capacity under its securities repurchase program of approximately $225
million.

During 1Q2013, we also paid common stock dividends of $4.4 million.

Our debt-to-total capital ratio, excluding accumulated other comprehensive
income (3) at March 31, 2013. was 19.5 percent, a decrease of 120 basis points
from December 31, 2012. The decrease in such ratio primarily resulted from
the completion of the tender offer and debt repayments.

Conference Call
The Company will host a conference call to discuss results on April 25, 2013
at 11:00 a.m. Eastern Time. The webcast can be accessed through the Investors
section of the company's website: http://ir.CNOinc.com. Participants should
go to the website at least 15 minutes before the event to register and
download any necessary audio software. During the call, we will be referring
to a presentation that will be available the morning of the call at the
Investors section of the company's website.

About CNO
CNO is a holding company. Our insurance subsidiaries - principally Bankers
Life and Casualty Company, Washington National Insurance Company and Colonial
Penn Life Insurance Company - serve pre-retiree and retired Americans by
helping them protect against financial adversity and provide for a more secure
retirement. For more information, visit CNO online at www.CNOinc.com.

- Tables Follow -



CNO FINANCIAL GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET

(Dollars in millions)


                                                     March31,    December31,
                                                     2013         2012
                                                     (unaudited)
ASSETS
Investments:
Fixed maturities, available for sale, at fair value
(amortized cost:March 31, 2013 -                    $ 24,894.5   $  24,614.1
 $22,115.0; December 31, 2012 - $21,626.8)
Equity securities at fair value (cost: March 31,
2013 -                                               216.9        171.4

 $206.0;December 31, 2012 - $167.1)
Mortgage loans                                       1,639.8      1,573.2
Policy loans                                         271.5        272.0
Trading securities                                   229.8        266.2
Investments held by securitization entities          1,009.9      814.3
Other invested assets                                309.7        248.1
Total investments                                    28,572.1     27,959.3
Cash and cash equivalents - unrestricted             251.6        582.5
Cash and cash equivalents held by securitization     462.2        54.2
entities
Accrued investment income                            315.8        286.2
Present value of future profits                      606.6        626.0
Deferred acquisition costs                           654.4        629.7
Reinsurance receivables                              2,879.5      2,927.7
Income tax assets, net                               708.5        716.9
Assets held in separate accounts                     15.5         14.9
Other assets                                         433.0        334.0
Total assets                                         $ 34,899.2   $  34,131.4
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Liabilities for insurance products:
Interest-sensitive products                          $ 12,867.1   $  12,893.2
Traditional products                                 11,130.9     11,196.3
Claims payable and other policyholder funds          996.3        985.1
Liabilities related to separate accounts             15.5         14.9
Other liabilities                                    903.0        570.6
Investment borrowings                                1,880.2      1,650.8
Borrowings related to variable interest entities     1,143.4      767.0
Notes payable – direct corporate obligations         934.2        1,004.2
Total liabilities                                    29,870.6     29,082.1
Commitments and Contingencies
Shareholders' equity:
Common stock ($0.01 par value, 8,000,000,000 shares
authorized,
 shares issued and outstanding: March 31,     2.2          2.2
2013 - 223,502,106;

 December 31, 2012 – 221,502,371)
Additional paid-in capital                           4,173.2      4,174.7
Accumulated other comprehensive income               1,170.7      1,197.4
Accumulated deficit                                  (317.5)      (325.0)
Total shareholders' equity                           5,028.6      5,049.3
Total liabilities and shareholders' equity           $ 34,899.2   $  34,131.4







CNO FINANCIAL GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF OPERATIONS

(Dollars in millions, except per share data)

(unaudited)


                                                    Three months ended
                                                    March31,
                                                    2013          2012
Revenues:
Insurance policy income                             $   691.2     $   686.3
Net investment income:
General account assets                              351.9         345.2
Policyholder and reinsurer accounts and other
special-                                            77.7          65.6
purpose portfolios
Realized investment gains:
Net realized investment gains, excluding impairment 15.3          30.8
losses
Other-than-temporary impairment losses:
Total other-than-temporary impairment losses        —             (7.9)
Portion of other-than-temporary impairment losses
 recognized in accumulated other         —             —
comprehensive income
Net impairment losses recognized                    —             (7.9)
Total realized gains                                15.3          22.9
Fee revenue and other income                        6.5           3.9
Total revenues                                      1,142.6       1,123.9
Benefits and expenses:
Insurance policy benefits                           754.1         689.0
Interest expense                                    27.3          28.8
Amortization                                        79.3          86.6
Loss on extinguishment of debt                      57.7          .2
Other operating costs and expenses                  189.6         227.0
Total benefits and expenses                         1,108.0       1,031.6
Income before income taxes                          34.6          92.3
Income tax expense (benefit):
Tax expense on period income                        33.2          33.2
Valuation allowance for deferred tax assets         (10.5)        —
Net income                                          $   11.9      $   59.1
Earnings per common share:
Basic:
Weighted average shares outstanding                 222,081,000   240,895,000
Net income                                          $   .05       $   .25
Diluted:
Weighted average shares outstanding                 243,467,000   297,343,000
Net income                                          $   .05       $   .21







CNO FINANCIAL GROUP, INC. AND SUBSIDIARIES

EBIT FROM BUSINESS SEGMENTS

SUMMARIZED BY IN-FORCE AND NEW BUSINESS (6)

(Dollars in millions)


                                        Three months ended
EBIT (4) from In-force and New Business March31,
                                        2013      2012
Bankers Life segment:
In-Force Business                       $ 96.1    $ 97.1
New Business                            (34.0)    (26.6)
Total                                   $ 62.1    $ 70.5
Washington National segment:
In-Force Business                       $ 29.7    $ 27.4
New Business                            (.3)      (2.7)
Total                                   $ 29.4    $ 24.7
Colonial Penn segment:
In-Force Business                       $ 8.8     $ 6.7
New Business                            (14.2)    (16.5)
Total                                   $ (5.4)   $ (9.8)
Other CNO Business segment:
In-Force Business                       $ 3.6     $ (2.3)
New Business                            —         —
Total                                   $ 3.6     $ (2.3)
Total Business segments:
In-Force Business                       $ 138.2   $ 128.9
New Business                            (48.5)    (45.8)
Total EBIT from business segments       $ 89.7    $ 83.1







CNO FINANCIAL GROUP, INC. AND SUBSIDIARIES

NET OPERATING INCOME EXCLUDING SIGNIFICANT ITEMS*

(Dollars in millions)


                       Three months ended
                       March 31, 2012*
                       Actual           Significant          Excluding
                       results          items                 significant
                                                              items
Net Operating Income
(1):
Bankers Life           $   70.5         $     (11.0)          $    59.5
Washington National    24.7             —                     24.7
Colonial Penn          (9.8)            —                     (9.8)
Other CNO Business     (2.3)            20.0                  17.7
EBIT from business     83.1             9.0                   92.1
segments
Corporate Operations,
excluding corporate    (1.8)            7.0                   5.2
interest expense
EBIT (4)               81.3             16.0                  97.3
Corporate interest     (17.5)           —                     (17.5)
expense
Operating earnings     63.8             16.0                  79.8
before tax
Tax expense on         23.2             5.8                   29.0
operating income
Net operating income   $   40.6         $     10.2            $    50.8
Net operating income   $   .15          $     .03             $    .18
per diluted share
* This table summarizes the financial impact of significant items (as
described in the segment results section of this press release) on our 1Q12
net operating income.





CNO FINANCIAL GROUP, INC. AND SUBSIDIARIES

COLLECTED PREMIUMS

(Dollars in millions)


                                                  Three months ended
                                                  March31,
                                                  2013      2012
Bankers Life segment:
Medicare supplement and other supplementalhealth $ 199.7   $ 192.8
Life                                              89.5      70.1
Long-term care                                    135.4     136.7
Annuity                                           165.6     184.7
Total                                             590.2     584.3
Washington National segment:
Supplemental health                               120.3     112.9
Medicare supplement and other supplemental        27.2      28.8
 health
Life                                              3.6       4.0
Total                                             151.1     145.7
Colonial Penn segment:
Life                                              56.1      52.6
Supplemental health                               1.1       1.3
Total                                             57.2      53.9
Other CNO Business segment:
Life                                              41.1      45.3
Annuity                                           1.0       .9
Other health                                      6.5       6.9
Total                                             48.6      53.1
Total collected premiums                          $ 847.1   $ 837.0







NEW ANNUALIZED PREMIUMS (2)

(Dollars in millions)


                                           Three months ended
                                           March31,
                                           2013       2012
Bankers Life segment:
Medicare supplement and other supplemental $  21.9    $ 19.5
 health
Life                                       22.5       20.3
Long-term care                             6.1        7.9
Annuity                                    10.0       11.1
Total                                      60.5       58.8
Washington National segment:
Supplemental health                        19.2       17.6
Medicare supplement and other supplemental —          .3
 health
Life                                       1.4        2.0
Total                                      20.6       19.9
Colonial Penn segment:
Life                                       17.0       17.5
Total                                      17.0       17.5
Total new annualized premiums              $  98.1    $ 96.2







CNO FINANCIAL GROUP, INC. AND SUBSIDIARIES

BENEFIT RATIOS ON MAJOR HEALTH LINES OF BUSINESS


                                                    Three months ended
                                                    March31,
                                                    2013          2012
Bankers Life segment:
Medicare Supplement:
Earned premium                                      $188 million  $183 million
Benefit ratio (7)                                   68.5     %    64.5     %
PDP:
Earned premium                                      $9 million    $11 million
Benefit ratio (7)                                   74.9     %    85.9     %
Long-Term Care:
Earned premium                                      $135 million  $141 million
Benefit ratio (7)                                   129.4    %    110.9    %
Interest-adjusted benefit ratio (a non-GAAP         81.7     %    65.5     %
measure) (8)
Washington National segment:
Medicare Supplement:
Earned premium                                      $27 million   $31 million
Benefit ratio (7)                                   65.0     %    65.4     %
Supplemental health:
Earned premium                                      $118 million  $112 million
Benefit ratio (7)                                   79.3     %    82.4     %
Interest-adjusted benefit ratio (a non-GAAP         53.1     %    55.1     %
measure) (8)



NOTES

(1) Management believes that an analysis of Net income applicable to
common stock before: (i) net realized investment gains or losses, net of
related amortization and taxes; (ii) fair value changes due to fluctuations in
the interest rates used to discount embedded derivative liabilities related to
our fixed index annuities, net of related amortization and taxes; (iii) equity
in earnings of certain non-strategic investments and earnings attributable to
non-controlling interests, net of taxes; and (iv) loss on extinguishment of
debt, net of taxes ("Net operating income," a non-GAAP financial measure) is
important to evaluate the financial performance of the company, and is a key
measure commonly used in the life insurance industry. 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. Net realized investment gains or losses include: (i)
gains or losses on the sales of investments; (ii) other-than-temporary
impairments recognized through net income; and (iii) changes in fair value of
certain fixed maturity investments with embedded derivatives. A
reconciliation of Net operating income to Net income applicable to common
stock is provided in the table on page 2. Additional information concerning
this non-GAAP measure is included in our periodic filings with the Securities
and Exchange Commission that are available in the "Investors - SEC Filings"
section of CNO's website, www.CNOinc.com.

(2) Measured by new annualized premium, which includes 6% of annuity and
10% of single premium whole life deposits and 100% of all other premiums.
Medicare Advantage and Private-Fee-For-Service sales are not comparable to
other sales and are therefore excluded in all periods.

(3) The calculation of this non-GAAP measure differs from the
corresponding GAAP measure because accumulated other comprehensive income
(loss) has been excluded from the value of capital used to determine this
measure. Management believes this non-GAAP measure is useful because it
removes the volatility that arises from changes in the unrealized appreciation
(depreciation) of our investments. The corresponding GAAP measures for
debt-to-total capital were 15.7% and 16.6% at March 31, 2013 and December 31,
2012, respectively.

(4) Management believes that an analysis of earnings before net realized
investment gains (losses), fair value changes due to fluctuations in the
interest rates used to discount embedded derivative liabilities related to our
fixed index annuities, equity in earnings of certain non-strategic investments
and earnings attributable to non-controlling interests, corporate interest
expense, loss on extinguishment of debt and taxes ("EBIT," a non-GAAP
financial measure) provides a clearer comparison of the operating results of
the company quarter-over-quarter because these items are unrelated to the
company's underlying fundamentals. A reconciliation of EBIT to Net Income
applicable to common stock is provided in the table on page 2.

(5) Book value per diluted share reflects the potential dilution that
could occur if outstanding stock options and warrants were exercised,
restricted stock and performance units were vested and convertible securities
were converted. The dilution from options, warrants, restricted shares and
performance units is calculated using the treasury stock method. Under this
method, we assume the proceeds from the exercise of the options and warrants
(or the unrecognized compensation expense with respect to restricted stock and
performance units) will be used to purchase shares of our common stock at the
closing market price on the last day of the period. The dilution from
convertible securities is calculated assuming the securities were converted on
the last day of the period. In addition, the calculation of this non-GAAP
measure differs from the corresponding GAAP measure because accumulated other
comprehensive income (loss) has been excluded from the value of capital used
to determine this measure. Management believes this non-GAAP measure is
useful because it removes the volatility that arises from changes in the
unrealized appreciation (depreciation) of our investments. The corresponding
GAAP measures for book value per common share were $22.50 and $22.80 at March
31, 2013 and December 31, 2012, respectively.

(6) Management believes that an analysis of EBIT, separated between
in-force and new business provides increased clarity around the value drivers
of our business, particularly since the new business results are significantly
impacted by the rate of sales, mix of business and the distribution channel
through which new sales are made. EBIT from new business includes pre-tax
revenues and expenses associated with new sales of our insurance products
during the first year after the sale is completed. EBIT from in-force
business includes all pre-tax revenues and expenses associated with sales of
insurance products that were completed more than one year before the end of
the reporting period. The allocation of certain revenues and expenses between
new and in-force business is based on estimates, which we believe are
reasonable.

(7) The benefit ratio is calculated by dividing the related product's
insurance policy benefits by insurance policy income.

(8) The interest-adjusted benefit ratio (a non-GAAP measure) is calculated
by dividing the product's insurance policy benefits less imputed interest
income on the accumulated assets backing the insurance liabilities by
insurance policy income. Interest income is an important factor in measuring
the performance of longer duration health products. The net cash flows
generally cause an accumulation of amounts in the early years of a policy
(accounted for as reserve increases), which will be paid out as benefits in
later policy years (accounted for as reserve decreases). Accordingly, as the
policies age, the benefit ratio will typically increase, but the increase in
the change in reserve will be partially offset by the imputed interest income
earned on the accumulated assets. The interest-adjusted benefit ratio
reflects the effects of such interest income offset. Since interest income is
an important factor in measuring the performance of these products, management
believes a benefit ratio, which includes the effect of interest income, is
useful in analyzing product performance. Additional information concerning
this non-GAAP measure is included in our periodic filings with the Securities
and Exchange Commission that are available in the "Investors - SEC Filings"
section of CNO Financial's website, www.CNOinc.com.

Cautionary Statement Regarding Forward-Looking Statements. Our statements,
trend analyses and other information contained in this press release relative
to markets for CNO Financial's products and trends in CNO Financial's
operations or financial results, as well as other statements, contain
forward-looking statements within the meaning of the federal securities laws
and the Private Securities Litigation Reform Act of 1995. Forward-looking
statements typically are identified by the use of terms such as "anticipate,"
"believe," "plan," "estimate," "expect," "project," "intend," "may," "will,"
"would," "contemplate," "possible," "attempt," "seek," "should," "could,"
"goal," "target," "on track," "comfortable with," "optimistic" and similar
words, although some forward-looking statements are expressed differently. You
should consider statements that contain these words carefully because they
describe our expectations, plans, strategies and goals and our beliefs
concerning future business conditions, our results of operations, financial
position, and our business outlook or they state other ''forward-looking''
information based on currently available information. Assumptions and other
important factors that could cause our actual results to differ materially
from those anticipated in our forward-looking statements include, among other
things: (i) changes in or sustained low interest rates causing reductions in
investment income, the margins of our fixed annuity and life insurance
businesses, and sales of, and demand for, our products; (ii) expectations of
lower future investment earnings may cause us to accelerate amortization,
write down the balance of insurance acquisition costs or establish additional
liabilities for insurance products; (iii) general economic, market and
political conditions, including the performance and fluctuations of the
financial markets which may affect the value of our investments as well as our
ability to raise capital or refinance existing indebtedness and the cost of
doing so; (iv) the ultimate outcome of lawsuits filed against us and other
legal and regulatory proceedings to which we are subject; (v) our ability to
make anticipated changes to certain non-guaranteed elements of our life
insurance products; (vi) our ability to obtain adequate and timely rate
increases on our health products, including our long-term care business; (vii)
the receipt of any required regulatory approvals for dividend and surplus
debenture interest payments from our insurance subsidiaries; (viii) mortality,
morbidity, the increased cost and usage of health care services, persistency,
the adequacy of our previous reserve estimates and other factors which may
affect the profitability of our insurance products; (ix) changes in our
assumptions related to deferred acquisition costs or the present value of
future profits; (x) the recoverability of our deferred tax assets and the
effect of potential ownership changes and tax rate changes on their value;
(xi) our assumption that the positions we take on our tax return filings,
including our position that our 7.0% convertible senior debentures due 2016
will not be treated as stock for purposes of Section 382 of the Internal
Revenue Code of 1986, as amended, and will not trigger an ownership change,
will not be successfully challenged by the Internal Revenue Service; (xii)
changes in accounting principles and the interpretation thereof (including
changes in principles related to accounting for deferred acquisition costs);
(xiii) our ability to continue to satisfy the financial ratio and balance
requirements and other covenants of our debt agreements; (xiv) our ability to
achieve anticipated expense reductions and levels of operational efficiencies
including improvements in claims adjudication and continued automation and
rationalization of operating systems, (xv) performance and valuation of our
investments, including the impact of realized losses (including
other-than-temporary impairment charges); (xvi) our ability to identify
products and markets in which we can compete effectively against competitors
with greater market share, higher ratings, greater financial resources and
stronger brand recognition; (xvii) our ability to generate sufficient
liquidity to meet our debt service obligations and other cash needs; (xviii)
our ability to maintain effective controls over financial reporting; (xix) our
ability to continue to recruit and retain productive agents and distribution
partners and customer response to new products, distribution channels and
marketing initiatives; (xx) our ability to achieve eventual upgrades of the
financial strength ratings of CNO Financial and our insurance company
subsidiaries as well as the impact of our ratings on our business, our ability
to access capital and the cost of capital; (xxi) the risk factors or
uncertainties listed from time to time in our filings with the Securities and
Exchange Commission; (xxii) regulatory changes or actions, including those
relating to regulation of the financial affairs of our insurance companies,
such as the payment of dividends and surplus debenture interest to us,
regulation of the sale, underwriting and pricing of products, and health care
regulation affecting health insurance products; and (xxiii) changes in the
Federal income tax laws and regulations which may affect or eliminate the
relative tax advantages of some of our products or affect the value of our
deferred tax assets. Other factors and assumptions not identified above are
also relevant to the forward-looking statements, and if they prove incorrect,
could also cause actual results to differ materially from those projected. All
forward-looking statements are expressly qualified in their entirety by the
foregoing cautionary statements. Our forward-looking statements speak only as
of the date made. We assume no obligation to update or to publicly announce
the results of any revisions to any of the forward-looking statements to
reflect actual results, future events or developments, changes in assumptions
or changes in other factors affecting the forward-looking statements.

SOURCE CNO Financial Group, Inc.

Website: http://www.CNOinc.com
Contact: (News Media) Barbara Ciesemier, Corporate Communications
+1.312.396.7461, (Investors) Erik Helding +1.317.817.4760