CNO

MKT CAP $5.1BP/E 19.0DIV YIELD 1.25%FCF YIELD —REV TTM $4.6B +6.0%NET INCOME $279.6M −8.5%NET DEBT $343.4M52W 39.51 – 56.75SEC XBRL · TTM TO Invalid Date

How CNO rewrote its risk factors

10-K ITEM 1A · FY2024 → FY2025

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MARKET-SENSITIVE INSTRUMENTS AND RISK MANAGEMENT Our spread-based insurance business is subject to several inherent risks arising from movements in interest rates, especially if we fail to anticipate or respond to such movements.
First, interest rate changes can cause compression of our net spread between interest earned on investments and interest credited on customer deposits, thereby adversely affecting our results.
Second, if interest rate changes produce an unanticipated increase in surrenders of our spread-based products, we may be forced to sell invested assets at a loss in order to fund such surrenders.
Many of our products include surrender charges, market interest rate adjustments or other features to encourage persistency; however, at December 31, 2025, approximately $3.9 billion of our total insurance liabilities could be surrendered by the policyholder without penalty.
Finally, changes in interest rates can have significant effects on our investment portfolio.
We use asset/liability management strategies that are designed to mitigate the effect of interest rate changes on our profitability.
However, there can be no assurance that management will be successful in implementing such strategies and sustaining adequate investment spreads.
We seek to invest our assets allocated to our insurance products in a manner that will fund future obligations to policyholders and meet profitability objectives, subject to appropriate risk considerations.
We seek to meet this objective through investments that: (i) have similar cash flow characteristics with the liabilities they support; (ii) are diversified (including by types of obligors); and (iii) are predominantly investment-grade in quality.
Our investment strategy is to manage, over a sustained period and within acceptable parameters of quality and risk, capital efficiency through active strategic asset allocation and investment management.
Accordingly, we may sell securities at a gain or a loss to enhance the projected total return of the portfolio as market opportunities change, to reflect changing perceptions of risk, or to better match certain characteristics of our investment portfolio with the corresponding characteristics of our insurance liabilities.
The profitability of many of our products depends on the spread between the interest earned on investments and the rates credited on our insurance liabilities.
In addition, changes in competition and other factors, including the level of surrenders and withdrawals, may limit our ability to adjust or to maintain crediting rates at levels necessary to avoid narrowing of spreads under certain market conditions.
As of December 31, 2025, approximately 13 percent of our insurance liabilities had interest rates that may be reset annually, 43 percent had a fixed explicit interest rate for the duration of the contract, 40 percent are fixed indexed products where the income earned is subject to a participation rate that typically may be changed annually, and the remainder had no explicit interest rates.
At December 31, 2025, $1,289.0 million and $414.5 million of our annuity and universal life account values, respectively, net of amounts ceded, were at minimum guaranteed crediting rates.
The weighted average crediting rates at December 31, 2025, related to such annuity and universal life account values, that were at the minimum guaranteed crediting rate were 2.61 percent and 4.09 percent, respectively.
At December 31, 2025, the weighted average yield, computed on the cost basis of investments allocated to our product lines, was approximately 4.9 percent, and the average interest rate credited or accruing to our total insurance liabilities (excluding interest rate bonuses for the first policy year only and excluding the effect of credited rates attributable to variable or fixed indexed products) was 4.3 percent.
Such 4.3 percent rate includes interest credited to annuity and universal life products as well as the rates assumed in our calculations of reserves for health and traditional life products which are set based on investment yields at policy issuance and are locked-in in accordance with current accounting requirements.
At December 31, 2025, the estimated duration of our fixed income securities (as modified to reflect estimated prepayments and call premiums) and the estimated duration of our insurance liabilities were approximately 7.5 years and 8.1 years, respectively.
We estimate that our fixed maturity securities and short-term investments would decline in fair value by $691.7 million if interest rates were to increase by 10 percent from their levels at December 31, 2025.
Risk Factors - Inflation levels could have adverse consequences for us, the insurance industry and the U.S. economy generally" for additional information on inflation.
Index to Consolidated Financial Statements Page Report of Independent Registered Public Accounting Firm (PCAOB ID#: 238 ) Consolidated Balance Sheet at December 31, 2025 and 2024 Consolidated Statement of Operations for the years ended December 31, 2025, 2024 and 2023 Consolidated Statement of Comprehensive Income (Loss) for the years ended December 31, 2025, 2024 and 2023 Consolidated Statement of Shareholders' Equity for the years ended December 31, 2025, 2024 and 2023 Consolidated Statement of Cash Flows for the years ended December 31, 2025, 2024 and 2023 Notes to Consolidated Financial Statements Report of Independent Registered Public Accounting Firm To the Board of Directors and Shareholders of CNO Financial Group, Inc.
Opinions on the Financial Statements and Internal Control over Financial Reporting We have audited the accompanying consolidated balance sheets of CNO Financial Group, Inc. and its subsidiaries (the "Company") as of December 31, 2025 and 2024, and the related consolidated statements of operations, of comprehensive income (loss), of shareholders' equity and of cash flows for each of the three years in the period ended December 31, 2025, including the related notes and financial statement schedules listed in the index appearing under Item 15(a)(2) (collectively referred to as the "consolidated financial statements").
We also have audited the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025 in conformity with accounting principles generally accepted in the United States of America.
Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.
Valuation of market risk benefits (MRBs) associated with fixed indexed annuity products As described in Notes 2, 4, and 5 to the consolidated financial statements, the total fair value of the fixed indexed annuity products MRB liabilities was $48.1 million as of December 31, 2025.
These procedures also included, among others, (i) testing management’s process for developing the valuation of MRBs associated with fixed indexed annuity products, (ii) evaluating the appropriateness of the model used by management (iii) testing the completeness and accuracy of the underlying data provided by management, and (iv) the involvement of professionals with specialized skill and knowledge to assist in evaluating the reasonableness of the significant assumptions related to surrender rates and GLWB utilization used in the valuation based on industry knowledge as well as historical Company data and experience. /s/ PricewaterhouseCoopers LLP Indianapolis, Indiana February 24, 2026 We have served as the Company’s auditor since 1983.
Table of Content CNO FINANCIAL GROUP, INC.
AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET December 31, 2025 and 2024 (Dollars in millions) ASSETS 2025 2024 Investments: Fixed maturities, available for sale, at fair value (net of allowance for credit losses: 2025 - $ 36.0 and 2024 - $ 37.1 ; amortized cost: 2025 - $ 25,776.4 and 2024 - $ 25,151.0 ) $ 23,886.8 $ 22,730.1 Equity securities at fair value 389.2 272.4 Mortgage loans (net of allowance for credit losses: 2025 - $ 20.9 and 2024 - $ 13.6 ) 3,256.8 2,506.3 Policy loans 140.9 135.3 Trading securities 294.8 304.2 Investments held by variable interest entities (net of allowance for credit losses: 2025 - $ 0.6 and 2024 - $ 1.3 ; amortized cost: 2025 - $ 294.1 and 2024 - $ 437.0 ) 293.0 433.8 Other invested assets 1,737.0 1,491.5 Total investments 29,998.5 27,873.6 Cash and cash equivalents - unrestricted 956.1 1,656.7 Cash and cash equivalents held by variable interest entities 27.4 341.0 Accrued investment income 286.0 286.4 Present value of future profits 143.6 161.0 Deferred acquisition costs 2,397.3 2,158.6 Reinsurance receivables (net of allowance for credit losses: 2025 - $ 1.0 and 2024 - $ 3.0 ) 3,677.5 3,854.7 Income tax assets, net 713.3 814.1 Assets held in separate accounts 2.8 3.3 Other assets 588.1 699.9 Total assets $ 38,790.6 $ 37,849.3 (continued on next page) The accompanying notes are an integral part of the consolidated financial statements.
AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET, continued December 31, 2025 and 2024 (Dollars in millions) LIABILITIES AND SHAREHOLDERS' EQUITY 2025 2024 Liabilities: Liabilities for insurance products: Policyholder account balances $ 18,912.6 $ 17,594.2 Future policy benefits 11,898.0 11,705.5 Market risk benefit liability 48.1 60.0 Liability for life insurance policy claims 58.4 61.1 Unearned and advanced premiums 228.0 226.8 Liabilities related to separate accounts 2.8 3.3 Other liabilities 952.8 1,163.3 Investment borrowings 2,441.7 2,188.8 Borrowings related to variable interest entities 274.4 497.6 Notes payable – direct corporate obligations 1,335.6 1,833.5 Total liabilities 36,152.4 35,334.1 Commitments and Contingencies (Note 8) Shareholders' equity: Common stock ($ 0.01 par value, 8,000,000,000 shares authorized, shares issued and outstanding: 2025 - 94,484,339 and 2024 - 101,618,957 ) 0.9 1.0 Additional paid-in capital 1,336.3 1,632.5 Accumulated other comprehensive loss ( 1,115.0 ) ( 1,371.4 ) Retained earnings 2,416.0 2,253.1 Total shareholders' equity 2,638.2 2,515.2 Total liabilities and shareholders' equity $ 38,790.6 $ 37,849.3 The accompanying notes are an integral part of the consolidated financial statements.
AND SUBSIDIARIES CONSOLIDATED STATEMENT OF OPERATIONS for the years ended December 31, 2025, 2024 and 2023 (Dollars in millions, except per share data) 2025 2024 2023 Revenues: Insurance policy income $ 2,622.6 $ 2,558.5 $ 2,505.5 Net investment income: General account assets 1,542.4 1,419.4 1,250.2 Policyholder and other special-purpose portfolios 181.0 329.4 249.5 Investment gains (losses): Realized investment losses ( 59.6 ) ( 75.6 ) ( 69.3 ) Other investment gains 4.9 25.7 0.3 Total investment losses ( 54.7 ) ( 49.9 ) ( 69.0 ) Fee revenue and other income 196.1 192.1 210.6 Total revenues 4,487.4 4,449.5 4,146.8 Benefits and expenses: Insurance policy benefits 2,548.2 2,450.3 2,331.1 Liability for future policy benefits remeasurement loss ( 70.7 ) ( 41.1 ) ( 21.2 ) Change in fair value of market risk benefits ( 12.4 ) ( 60.5 ) ( 34.2 ) Interest expense 230.9 254.4 238.6 Amortization of deferred acquisition costs and present value of future profits 278.0 251.2 227.4 Goodwill and other asset impairment 101.9 — — Gain on extinguishment of borrowings related to variable interest entities ( 1.5 ) — — Other operating costs and expenses 1,119.6 1,055.3 1,048.3 Total benefits and expenses 4,194.0 3,909.6 3,790.0 Income before income taxes 293.4 539.9 356.8 Income tax expense 64.1 119.1 80.3 Net income $ 229.3 $ 420.8 $ 276.5 Earnings per common share: Basic: Weighted average shares outstanding 97,763,000 106,144,000 113,275,000 Net income $ 2.35 $ 3.96 $ 2.44 Diluted: Weighted average shares outstanding 99,822,000 108,116,000 115,124,000 Net income $ 2.30 $ 3.89 $ 2.40 The accompanying notes are an integral part of the consolidated financial statements.
AND SUBSIDIARIES CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (LOSS) for the years ended December 31, 2025, 2024 and 2023 (Dollars in millions) 2025 2024 2023 Net income $ 229.3 $ 420.8 $ 276.5 Other comprehensive income, before tax: Unrealized gains (losses) on investments 470.8 ( 294.4 ) 823.6 Adjustment to discount rate for liability for future policy benefits ( 203.4 ) 491.1 ( 367.3 ) Adjustment to instrument-specific credit risk for market risk benefits ( 0.5 ) ( 3.4 ) ( 7.4 ) Reclassification adjustments: For net realized investment losses included in net income 64.0 70.3 37.9 Other comprehensive income before tax 330.9 263.6 486.8 Income tax expense related to items of accumulated other comprehensive income ( 74.5 ) ( 58.2 ) ( 106.3 ) Other comprehensive income, net of tax 256.4 205.4 380.5 Comprehensive income $ 485.7 $ 626.2 $ 657.0 The accompanying notes are an integral part of the consolidated financial statements.
AND SUBSIDIARIES CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (Dollars in millions) Common stock Additional paid-in Accumulated other comprehensive Retained Shares Amount capital income (loss) earnings Total Balance, December 31, 2022 114,343 $ 1.1 $ 2,033.8 $ ( 1,957.3 ) $ 1,691.2 $ 1,768.8 Net income — — — — 276.5 276.5 Other comprehensive income, net of tax — — — 380.5 — 380.5 Common stock repurchased ( 6,557 ) — ( 165.1 ) — — ( 165.1 ) Dividends on common stock — — — — ( 67.9 ) ( 67.9 ) Employee benefit plans, net of shares used to pay tax withholdings 1,572 — 22.8 — — 22.8 Balance, December 31, 2023 109,358 1.1 1,891.5 ( 1,576.8 ) 1,899.8 2,215.6 Net income — — — — 420.8 420.8 Other comprehensive income, net of tax — — — 205.4 — 205.4 Common stock repurchased ( 8,943 ) ( .1 ) ( 281.5 ) — — ( 281.6 ) Dividends on common stock — — — — ( 67.5 ) ( 67.5 ) Employee benefit plans, net of shares used to pay tax withholdings 1,204 — 22.5 — — 22.5 Balance, December 31, 2024 101,619 1.0 1,632.5 ( 1,371.4 ) 2,253.1 2,515.2 Net income — — — — 229.3 229.3 Other comprehensive income, net of tax — — — 256.4 — 256.4 Common stock repurchased ( 8,147 ) (0.1) ( 319.8 ) — — ( 319.9 ) Dividends on common stock — — — — ( 66.4 ) ( 66.4 ) Employee benefit plans, net of shares used to pay tax withholdings 1,012 — 23.6 — — 23.6 Balance, December 31, 2025 94,484 $ 0.9 $ 1,336.3 $ ( 1,115.0 ) $ 2,416.0 $ 2,638.2 The accompanying notes are an integral part of the consolidated financial statements.
AND SUBSIDIARIES CONSOLIDATED STATEMENT OF CASH FLOWS for the years ended December 31, 2025, 2024 and 2023 (Dollars in millions) 2025 2024 2023 Cash flows from operating activities: Insurance policy income $ 2,402.5 $ 2,348.4 $ 2,285.2 Net investment income 1,502.9 1,414.8 1,328.9 Fee revenue and other income 179.6 168.7 205.3 Insurance policy benefits ( 1,628.5 ) ( 1,604.4 ) ( 1,611.1 ) Interest expense ( 230.3 ) ( 259.2 ) ( 232.5 ) Deferrable policy acquisition costs ( 499.3 ) ( 445.7 ) ( 377.9 ) Other operating costs ( 1,013.5 ) ( 939.8 ) ( 955.9 ) Income taxes ( 37.7 ) ( 55.1 ) ( 59.1 ) Net cash provided by operating activities 675.7 627.7 582.9 Cash flows from investing activities: Sales of investments 3,274.5 3,240.2 1,388.6 Maturities and redemptions of investments 3,520.9 2,175.2 1,397.0 Purchases of investments ( 8,459.5 ) ( 6,803.0 ) ( 3,591.9 ) Net purchases of trading securities — ( 87.5 ) ( 29.4 ) Other, net ( 3.2 ) ( 13.5 ) ( 36.6 ) Net cash used by investing activities ( 1,667.3 ) ( 1,488.6 ) ( 872.3 ) Cash flows from financing activities: Issuance of notes payable, net — 691.0 — Payments on notes payable ( 500.0 ) — — Issuance of common stock 11.6 11.2 13.2 Payments to repurchase common stock ( 331.4 ) ( 300.2 ) ( 166.1 ) Common stock dividends paid ( 66.2 ) ( 67.7 ) ( 68.1 ) Amounts received for deposit products 3,234.1 3,932.2 2,111.7 Withdrawals from deposit products ( 2,385.7 ) ( 1,961.5 ) ( 1,696.2 ) Proceeds from financing arrangements — — 80.3 Payments on financing arrangements ( 15.4 ) ( 14.4 ) ( 6.2 ) Issuance of investment borrowings: Federal Home Loan Bank 776.8 612.2 995.5 Related to variable interest entities — 276.0 — Payments on investment borrowings: Federal Home Loan Bank ( 523.8 ) ( 612.7 ) ( 445.8 ) Related to variable interest entities and other ( 222.6 ) ( 596.5 ) ( 284.8 ) Net cash (used) provided by financing activities ( 22.6 ) 1,969.6 533.5 Net (decrease) increase in cash and cash equivalents ( 1,014.2 ) 1,108.7 244.1 Cash and cash equivalents - unrestricted and held by variable interest entities, beginning of year 1,997.7 889.0 644.9 Cash and cash equivalents - unrestricted and held by variable interest entities, end of year $ 983.5 $ 1,997.7 $ 889.0 The accompanying notes are an integral part of the consolidated financial statements.
When the fair value option is elected, unrealized gains and losses are recognized in other investment gains (losses) in the consolidated statement of operations.
AND SUBSIDIARIES Notes to Consolidated Financial Statements ___________________ Trading securities include: (i) investments purchased with the intent of selling in the near term to generate income; and (ii) certain fixed maturity securities containing embedded derivatives for which we have elected the fair value option.
The change in fair value of the income generating investments is recognized in income from policyholder and other special-purpose portfolios in the consolidated statement of operations.
Non-traditional investments include investments in certain limited partnerships and limited liability companies, which are accounted for using the equity method.
In accounting for limited partnerships and limited liability companies, we consistently use the most recently available financial information provided by the general partner or manager of each of these investments, which is typically reported to us one quarter in arrears.

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At December 31, 2024, the estimated duration of our fixed income securities (as modified to reflect estimated prepayments and call premiums) and the estimated duration of our insurance liabilities were approximately 7.9 years and 8.4 years, respectively.
We estimate that our fixed maturity securities and short-term investments would decline in fair value by $729.6 million if interest rates were to increase by 10 percent from their levels at December 31, 2024.
Risk Factors - High inflation levels could have adverse consequences for us, the insurance industry and the U.S. economy generally" for additional information on inflation.
Index to Consolidated Financial Statements Page Report of Independent Registered Public Accounting Firm (PCAOB ID#: 238 ) Consolidated Balance Sheet at December 31, 202 4 and 202 3 Consolidated Statement of Operations for the years ended December 31, 202 4 , 202 3 and 202 2 Consolidated Statement of Comprehensive Income for the years ended December 31, 202 4 , 202 3 and 202 2 Consolidated Statement of Shareholders' Equity for the years ended December 31, 202 4 , 202 3 and 202 2 Consolidated Statement of Cash Flows for the years ended December 31, 202 4 , 202 3 and 202 2 Notes to Consolidated Financial Statements Report of Independent Registered Public Accounting Firm To the Board of Directors and Shareholders of CNO Financial Group, Inc.
Opinions on the Financial Statements and Internal Control over Financial Reporting We have audited the accompanying consolidated balance sheets of CNO Financial Group, Inc. and its subsidiaries (the "Company") as of December 31, 2024 and December 31, 2023, and the related consolidated statements of operations, of comprehensive income (loss), of shareholders' equity and of cash flows for each of the three years in the period ended December 31, 2024, including the related notes and financial statement schedules listed in the index appearing under Item 15(a)(2) (collectively referred to as the "consolidated financial statements").
We also have audited the Company's internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and December 31, 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024 in conformity with accounting principles generally accepted in the United States of America.
Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.
Valuation of market risk benefits (MRBs) associated with fixed indexed annuity products As described in Notes 2, 4, and 5 to the consolidated financial statements, the total fair value of the fixed indexed annuity products MRB liabilities was $60 million as of December 31, 2024.
These procedures also included, among others, (i) testing management’s process for developing the valuation of MRBs associated with fixed indexed annuity products, (ii) evaluating the appropriateness of the model used by management (iii) testing the completeness and accuracy of the underlying data provided by management, and (iv) the involvement of professionals with specialized skill and knowledge to assist in evaluating the reasonableness of the significant assumptions related to surrender rates and GLWB utilization used in the valuation based on industry knowledge as well as historical Company data and experience. /s/ PricewaterhouseCoopers LLP Indianapolis, Indiana February 26, 2025 We have served as the Company’s auditor since 1983.
AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET December 31, 2024 and 2023 (Dollars in millions) ASSETS 2024 2023 Investments: Fixed maturities, available for sale, at fair value (net of allowance for credit losses: 2024 - $ 37.1 and 2023 - $ 42.9 ; amortized cost: 2024 - $ 25,264.3 and 2023 - $ 23,699.2 ) $ 22,840.5 $ 21,506.2 Equity securities at fair value 162.0 96.9 Mortgage loans (net of allowance for credit losses: 2024 - $ 13.6 and 2023 - $ 15.4 ) 2,506.3 2,064.1 Policy loans 135.3 128.5 Trading securities 304.2 222.7 Investments held by variable interest entities (net of allowance for credit losses: 2024 - $ 1.3 and 2023 - $ 3.1 ; amortized cost: 2024 - $ 437.0 and 2023 - $ 787.6 ) 432.3 768.6 Other invested assets 1,491.5 1,353.4 Total investments 27,872.1 26,140.4 Cash and cash equivalents - unrestricted 1,656.7 774.5 Cash and cash equivalents held by variable interest entities 341.0 114.5 Accrued investment income 286.4 251.5 Present value of future profits 161.0 180.7 Deferred acquisition costs 2,158.6 1,944.4 Reinsurance receivables (net of allowance for credit losses: 2024 - $ 3.0 and 2023 - $ 3.0 ) 3,854.7 4,040.7 Income tax assets, net 818.9 936.2 Assets held in separate accounts 3.3 3.1 Other assets 699.9 641.1 Total assets $ 37,852.6 $ 35,027.1 (continued on next page) The accompanying notes are an integral part of the consolidated financial statements.
AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET, continued December 31, 2024 and 2023 (Dollars in millions) LIABILITIES AND SHAREHOLDERS' EQUITY 2024 2023 Liabilities: Liabilities for insurance products: Policyholder account balances $ 17,615.8 $ 15,222.5 Future policy benefits 11,705.5 12,188.4 Market risk benefit liability 60.0 117.1 Liability for life insurance policy claims 61.1 62.1 Unearned and advanced premiums 226.8 218.9 Liabilities related to separate accounts 3.3 3.1 Other liabilities 1,161.8 848.8 Investment borrowings 2,188.8 2,189.3 Borrowings related to variable interest entities 497.6 820.8 Notes payable – direct corporate obligations 1,833.5 1,140.5 Total liabilities 35,354.2 32,811.5 Commitments and Contingencies (Note 8) Shareholders' equity: Common stock ($ 0.01 par value, 8,000,000,000 shares authorized, shares issued and outstanding: 2024 - 101,618,957 and 2023 - 109,357,540 ) 1.0 1.1 Additional paid-in capital 1,632.5 1,891.5 Accumulated other comprehensive loss ( 1,371.4 ) ( 1,576.8 ) Retained earnings 2,236.3 1,899.8 Total shareholders' equity 2,498.4 2,215.6 Total liabilities and shareholders' equity $ 37,852.6 $ 35,027.1 The accompanying notes are an integral part of the consolidated financial statements.
AND SUBSIDIARIES CONSOLIDATED STATEMENT OF OPERATIONS for the years ended December 31, 2024, 2023 and 2022 (Dollars in millions, except per share data) 2024 2023 2022 Revenues: Insurance policy income $ 2,558.5 $ 2,505.5 $ 2,499.8 Net investment income (loss): General account assets 1,419.4 1,250.2 1,179.0 Policyholder and other special-purpose portfolios 329.4 249.5 ( 163.1 ) Investment gains (losses): Realized investment losses ( 75.6 ) ( 69.3 ) ( 17.9 ) Other investment gains (losses) 25.7 0.3 ( 117.5 ) Total investment losses ( 49.9 ) ( 69.0 ) ( 135.4 ) Fee revenue and other income 192.1 210.6 196.5 Total revenues 4,449.5 4,146.8 3,576.8 Benefits and expenses: Insurance policy benefits 2,471.9 2,331.1 1,616.7 Liability for future policy benefits remeasurement loss ( 41.1 ) ( 21.2 ) ( 15.6 ) Change in fair value of market risk benefits ( 60.5 ) ( 34.2 ) ( 141.5 ) Interest expense 254.4 238.6 137.0 Amortization of deferred acquisition costs and present value of future profits 251.2 227.4 212.8 Other operating costs and expenses 1,055.3 1,048.3 950.9 Total benefits and expenses 3,931.2 3,790.0 2,760.3 Income before income taxes 518.3 356.8 816.5 Income tax expense 114.3 80.3 185.9 Net income $ 404.0 $ 276.5 $ 630.6 Earnings per common share: Basic: Weighted average shares outstanding 106,144,000 113,275,000 115,733,000 Net income $ 3.81 $ 2.44 $ 5.45 Diluted: Weighted average shares outstanding 108,116,000 115,124,000 117,717,000 Net income $ 3.74 $ 2.40 $ 5.36 The accompanying notes are an integral part of the consolidated financial statements.
AND SUBSIDIARIES CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (LOSS) for the years ended December 31, 2024, 2023 and 2022 (Dollars in millions) 2024 2023 2022 Net income $ 404.0 $ 276.5 $ 630.6 Other comprehensive income (loss), before tax: Unrealized gains (losses) on investments ( 294.4 ) 823.6 ( 6,028.4 ) Adjustment to discount rate for liability for future policy benefits 491.1 ( 367.3 ) 2,971.6 Adjustment to instrument-specific credit risk for market risk benefits ( 3.4 ) ( 7.4 ) 0.1 Reclassification adjustments: For net realized investment losses included in net income 70.3 37.9 60.5 Other comprehensive income (loss) before tax 263.6 486.8 ( 2,996.2 ) Income tax (expense) benefit related to items of accumulated other comprehensive income (loss) ( 58.2 ) ( 106.3 ) 665.2 Other comprehensive income (loss), net of tax 205.4 380.5 ( 2,331.0 ) Comprehensive income (loss) $ 609.4 $ 657.0 $ ( 1,700.4 ) The accompanying notes are an integral part of the consolidated financial statements.
AND SUBSIDIARIES CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (Dollars in millions) Common stock Additional paid-in Accumulated other comprehensive Retained Shares Amount capital income (loss) earnings Total Balance, December 31, 2021 120,377 $ 1.2 $ 2,184.2 $ 373.7 $ 1,125.6 $ 3,684.7 Net income — — — — 630.6 630.6 Other comprehensive loss, net of tax — — — ( 2,331.0 ) — ( 2,331.0 ) Common stock repurchased ( 7,612 ) ( 0.1 ) ( 179.9 ) — — ( 180.0 ) Dividends on common stock — — — — ( 65.0 ) ( 65.0 ) Employee benefit plans, net of shares used to pay tax withholdings 1,578 — 29.5 — — 29.5 Balance, December 31, 2022 114,343 1.1 2,033.8 ( 1,957.3 ) 1,691.2 1,768.8 Net income — — — — 276.5 276.5 Other comprehensive income, net of tax — — — 380.5 — 380.5 Common stock repurchased ( 6,557 ) — ( 165.1 ) — — ( 165.1 ) Dividends on common stock — — — — ( 67.9 ) ( 67.9 ) Employee benefit plans, net of shares used to pay tax withholdings 1,572 — 22.8 — — 22.8 Balance, December 31, 2023 109,358 1.1 1,891.5 ( 1,576.8 ) 1,899.8 2,215.6 Net income — — — — 404.0 404.0 Other comprehensive income, net of tax — — — 205.4 — 205.4 Common stock repurchased ( 8,943 ) ( 0.1 ) ( 281.5 ) — — ( 281.6 ) Dividends on common stock — — — — ( 67.5 ) ( 67.5 ) Employee benefit plans, net of shares used to pay tax withholdings 1,204 — 22.5 — — 22.5 Balance, December 31, 2024 101,619 $ 1.0 $ 1,632.5 $ ( 1,371.4 ) $ 2,236.3 $ 2,498.4 The accompanying notes are an integral part of the consolidated financial statements.
AND SUBSIDIARIES CONSOLIDATED STATEMENT OF CASH FLOWS for the years ended December 31, 2024, 2023 and 2022 (Dollars in millions) 2024 2023 2022 Cash flows from operating activities: Insurance policy income $ 2,348.4 $ 2,285.2 $ 2,300.2 Net investment income 1,414.8 1,328.9 1,154.5 Fee revenue and other income 168.7 205.3 149.2 Insurance policy benefits ( 1,604.4 ) ( 1,611.1 ) ( 1,635.8 ) Interest expense ( 259.2 ) ( 232.5 ) ( 120.9 ) Deferrable policy acquisition costs ( 445.7 ) ( 377.9 ) ( 336.0 ) Other operating costs ( 939.8 ) ( 955.9 ) ( 981.9 ) Income taxes ( 55.1 ) ( 59.1 ) ( 33.9 ) Net cash provided by operating activities 627.7 582.9 495.4 Cash flows from investing activities: Sales of investments 3,240.2 1,388.6 3,253.6 Maturities and redemptions of investments 2,175.2 1,397.0 1,550.7 Purchases of investments ( 6,803.0 ) ( 3,591.9 ) ( 6,482.0 ) Net purchases of trading securities ( 87.5 ) ( 29.4 ) ( 42.4 ) Other ( 13.5 ) ( 36.6 ) ( 61.2 ) Net cash used by investing activities ( 1,488.6 ) ( 872.3 ) ( 1,781.3 ) Cash flows from financing activities: Issuance of notes payable, net 691.0 — — Issuance of common stock 11.2 13.2 13.5 Payments to repurchase common stock ( 300.2 ) ( 166.1 ) ( 190.1 ) Common stock dividends paid ( 67.7 ) ( 68.1 ) ( 64.8 ) Amounts received for deposit products 3,932.2 2,111.7 3,022.6 Withdrawals from deposit products ( 1,961.5 ) ( 1,696.2 ) ( 1,461.4 ) Proceeds from financing arrangements — 80.3 — Payments on financing arrangements ( 14.4 ) ( 6.2 ) — Issuance of investment borrowings: Federal Home Loan Bank 612.2 995.5 285.0 Related to variable interest entities 276.0 — — Payments on investment borrowings: Federal Home Loan Bank ( 612.7 ) ( 445.8 ) ( 361.3 ) Related to variable interest entities and other ( 596.5 ) ( 284.8 ) ( 44.4 ) Net cash provided by financing activities 1,969.6 533.5 1,199.1 Net increase (decrease) in cash and cash equivalents 1,108.7 244.1 ( 86.8 ) Cash and cash equivalents - unrestricted and held by variable interest entities, beginning of year 889.0 644.9 731.7 Cash and cash equivalents - unrestricted and held by variable interest entities, end of year $ 1,997.7 $ 889.0 $ 644.9 The accompanying notes are an integral part of the consolidated financial statements.
Trading securities include: (i) investments purchased with the intent of selling in the near term to generate income; and (ii) certain fixed maturity securities containing embedded derivatives for which we have elected the fair value option.
AND SUBSIDIARIES Notes to Consolidated Financial Statements ___________________ The change in fair value of the income generating investments is recognized in income from policyholder and other special-purpose portfolios in the consolidated statement of operations.
Non-traditional investments include investments in certain limited partnerships and hedge funds which are accounted for using the equity method.
In accounting for limited partnerships and hedge funds, we consistently use the most recently available financial information provided by the general partner or manager of each of these investments, which is generally three months prior to the end of our reporting period.
It is the Company's policy to offset negative cash balances with positive balances in other accounts with the same counterparty when agreements are in place permitting legal right of offset.
AND SUBSIDIARIES Notes to Consolidated Financial Statements ___________________ Deferred Acquisition Costs, Present Value of Future Profits and Sales Inducements Deferred acquisition costs represent policy acquisition costs that have been capitalized and are subject to amortization.
AND SUBSIDIARIES Notes to Consolidated Financial Statements ___________________ Goodwill and Intangible Assets In February 2021, we acquired DirectPath, LLC ("DirectPath", now known as Optavise, LLC ("Optavise") subsequent to its name change in April 2022), a leading national provider of year-round, technology-driven employee benefits management services to employers and employees.
Optavise provides personalized benefits education, advocacy and transparency, and communications compliance services that help employers reduce healthcare costs and assist employees with making informed benefits decisions.
Another company acquired in 2019, Web Benefits Design Corporation ("WBD"), has been operating on an integrated basis with Optavise and was legally merged into Optavise during 2023.
Goodwill and other intangible assets of Optavise totaled approximately $ 69.5 million and $ 28.1 million, respectively, at December 31, 2024 and are assigned to the Optavise reporting unit.
The value of goodwill and other intangible assets were $ 69.5 million and $ 32.9 million, respectively, at December 31, 2023.
The business of Optavise is included in our Fee income segment.
Goodwill is tested annually for impairment and whenever indicators of impairment arise in accordance with Accounting Standards Codification 350, I ntangibles and Other (“ASC 350”).
If an impairment is identified, an impairment is recorded by the amount that the carrying value exceeds the fair value of the reporting unit up to the carrying amount of goodwill.
During the fourth quarter of 2024, the Company performed a quantitative impairment assessment in accordance with ASC 350.
As a result of this impairment test, we determined that the fair value of the Optavise reporting unit exceeded its carrying value and therefore, goodwill was not impaired.
While future cash flows utilized in the quantitative impairment test are consistent with those that are used in our internal planning process, estimating cash flows requires significant judgment.
Future changes to our projected cash flows can vary from the cash flows eventually realized, which may have a material impact on the outcomes of future goodwill impairment tests.
The Company also uses a weighted average cost of capital that represents the blended average required rate of return for equity and debt capital based on observed market return data and company specific risk factors.
The estimated fair value of the Optavise reporting unit is highly sensitive to changes in the weighted average cost of capital and terminal value estimates.
For example, increasing the weighted average cost of capital by 300 basis points or decreasing the terminal value by 13 percent would result in the carrying value of the Optavise reporting unit exceeding its fair value, resulting in goodwill impairment.
AND SUBSIDIARIES Notes to Consolidated Financial Statements ___________________ Policyholder Account Balances Policyholder account balances represent the contract value that has accrued to the benefit of the policyholder as of the balance sheet date.
Total liabilities for insurance products related to our fixed indexed annuities are comprised of: (i) the liability related to the host contract; and (ii) the fair market value of the embedded derivatives as summarized below (dollars in millions): December 31, 2024 December 31, 2023 Fixed indexed annuity insurance liabilities: Host contract liability $ 8,972.6 $ 8,301.9 Embedded derivatives at fair value 1,493.2 1,376.7 Total fixed indexed annuity insurance liabilities $ 10,465.8 $ 9,678.6 Liability for Future Policy Benefits The liability for future policy benefits is the present value of estimated future policy benefits to be paid to or on behalf of policyholders and certain related expenses (where the timing and amount of payment depends on policyholder mortality or morbidity), less the present value of estimated future net premiums to be collected from policyholders (where net premiums are gross premiums multiplied by the net premium ratio discussed below).
These updated cash flows are used to calculate the revised net premiums and net premium ratio, which are used to derive an updated liability for future policy benefits as of the beginning of the current reporting period, discounted at the original contract issuance discount rate.

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