Company Quick10K Filing
CNO Financial
Price16.07 EPS1
Shares159 P/E16
MCap2,556 P/FCF5
Net Debt178 EBIT309
TEV2,734 TEV/EBIT9
TTM 2019-09-30, in MM, except price, ratios
10-Q 2020-03-31 Filed 2020-05-11
10-K 2019-12-31 Filed 2020-02-25
10-Q 2019-09-30 Filed 2019-11-06
10-Q 2019-06-30 Filed 2019-08-06
10-Q 2019-03-31 Filed 2019-05-03
10-K 2018-12-31 Filed 2019-02-26
10-Q 2018-09-30 Filed 2018-11-05
10-Q 2018-06-30 Filed 2018-08-03
10-Q 2018-03-31 Filed 2018-05-02
10-K 2017-12-31 Filed 2018-02-23
10-Q 2017-09-30 Filed 2017-11-01
10-Q 2017-06-30 Filed 2017-08-04
10-Q 2017-03-31 Filed 2017-05-03
10-K 2016-12-31 Filed 2017-02-21
10-Q 2016-09-30 Filed 2016-11-07
10-Q 2016-06-30 Filed 2016-08-02
10-Q 2016-03-31 Filed 2016-05-04
10-K 2015-12-31 Filed 2016-02-19
10-Q 2015-09-30 Filed 2015-11-03
10-Q 2015-06-30 Filed 2015-08-03
10-Q 2015-03-31 Filed 2015-05-05
10-K 2014-12-31 Filed 2015-02-20
10-Q 2014-09-30 Filed 2014-11-06
10-Q 2014-06-30 Filed 2014-08-05
10-Q 2014-03-31 Filed 2014-05-06
10-K 2013-12-31 Filed 2014-02-24
10-Q 2013-09-30 Filed 2013-11-01
10-Q 2013-06-30 Filed 2013-08-02
10-K 2012-12-31 Filed 2013-02-19
10-Q 2012-09-30 Filed 2012-11-01
10-Q 2012-06-30 Filed 2012-07-27
10-Q 2012-03-31 Filed 2012-05-04
10-K 2011-12-31 Filed 2012-02-27
10-Q 2011-09-30 Filed 2011-10-31
10-Q 2011-06-30 Filed 2011-08-01
10-Q 2011-03-31 Filed 2011-05-05
10-K 2010-12-31 Filed 2011-02-24
10-Q 2010-09-30 Filed 2010-11-08
10-Q 2010-06-30 Filed 2010-08-06
10-Q 2010-03-31 Filed 2010-05-10
10-K 2009-12-31 Filed 2010-03-04
8-K 2020-05-08
8-K 2020-05-05
8-K 2020-02-26
8-K 2020-02-19
8-K 2020-02-11
8-K 2020-01-14
8-K 2019-11-19
8-K 2019-11-14
8-K 2019-11-05
8-K 2019-09-05
8-K 2019-08-06
8-K 2019-07-30
8-K 2019-06-12
8-K 2019-05-29
8-K 2019-05-28
8-K 2019-05-28
8-K 2019-05-10
8-K 2019-04-30
8-K 2019-04-29
8-K 2019-03-18
8-K 2019-03-04
8-K 2019-02-13
8-K 2019-02-12
8-K 2018-11-01
8-K 2018-10-31
8-K 2018-10-25
8-K 2018-09-27
8-K 2018-08-02
8-K 2018-08-01
8-K 2018-08-01
8-K 2018-05-09
8-K 2018-04-26
8-K 2018-04-25
8-K 2018-02-14
8-K 2018-02-13

CNO 10Q Quarterly Report

Part I - Financial Information
Item 1. Financial Statements.
Item 2. Management's Discussion and Analysis of Consolidated Financial Condition and Results of Operations.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
Item 4. Controls and Procedures.
Part II - Other Information
Item 1. Legal Proceedings.
Item 1A. Risk Factors.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
Item 6. Exhibits.
EX-10.1 cno03312020ex101.htm
EX-10.2 cno03312020ex102.htm
EX-10.3 cno03312020ex103.htm
EX-10.4 cno03312020ex104.htm
EX-31.1 cno03312020ex311.htm
EX-31.2 cno03312020ex312.htm
EX-32.1 cno03312020ex321.htm
EX-32.2 cno03312020ex322.htm

CNO Financial Earnings 2020-03-31

Balance SheetIncome StatementCash Flow
35282114702012201420172020
Assets, Equity
1.51.10.70.2-0.2-0.62012201420172020
Rev, G Profit, Net Income
0.50.2-0.1-0.3-0.6-0.92012201420172020
Ops, Inv, Fin

Document
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2020
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___ to ___ 

Commission File Number 001-31792

CNO Financial Group, Inc.

Delaware
 
75-3108137
State of Incorporation
 
IRS Employer Identification No.
 
 
 
 
 
 
11825 N. Pennsylvania Street
 
 
 
Carmel,
Indiana
46032
 
(317)
 817-6100
Address of principal executive offices
 
Telephone

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act):  Yes No

Securities registered pursuant to Section 12(b) of the Act:
Title of each class
 
Trading Symbol
 
Name of each exchange on which registered
Common Stock, par value $0.01 per share
 
CNO
 
New York Stock Exchange
Rights to purchase Series D Junior Participating Preferred Stock
 
 
 
New York Stock Exchange

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days:  Yes   No

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes   No

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.  See the definitions of "large accelerated filer", "accelerated filer", "smaller reporting company", and "emerging growth company" in Rule 12b-2 of the Exchange Act.  Large accelerated filer   Accelerated filer Non-accelerated filer Smaller reporting company Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act):  Yes No

Shares of common stock outstanding as of April 28, 2020:  143,617,498








TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION
Page
 
 
 
Item 1.
Financial Statements (unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
Item 2.
 
 
 
 
 
 
 
 
 
 
 
 
Item 3.
 
 
 
Item 4.
 
 
 
 
 
 
PART II - OTHER INFORMATION
 
 
 
 
Item 1.
 
 
 
Item 1A.
 
 
 
Item 2.
 
 
 
Item 6.


2


PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.



CNO FINANCIAL GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(Dollars in millions)
(unaudited)

ASSETS

 
March 31,
2020
 
December 31,
2019
 
 
 
 
Investments:
 
 
 
Fixed maturities, available for sale, at fair value (net of allowance for credit losses of $19.9 at March 31, 2020; amortized cost: March 31, 2020 - $19,420.2; December 31, 2019 - $19,179.5)
$
20,379.1

 
$
21,295.2

Equity securities at fair value (cost: March 31, 2020 - $65.9; December 31, 2019 - $44.2)
50.1

 
44.1

Mortgage loans (net of allowance for credit losses of $8.3 at March 31, 2020)
1,484.1

 
1,566.1

Policy loans
124.7

 
124.5

Trading securities
227.8

 
243.9

Investments held by variable interest entities (net of allowance for credit losses of $37.7 at March 31, 2020; amortized cost: March 31, 2020 - $1,216.4; December 31, 2019 - $1,206.3)
1,038.1

 
1,188.6

Other invested assets
953.3

 
1,118.5

Total investments
24,257.2

 
25,580.9

Cash and cash equivalents - unrestricted
482.0

 
580.0

Cash and cash equivalents held by variable interest entities
68.5

 
74.7

Accrued investment income
213.0

 
205.9

Present value of future profits
282.2

 
275.4

Deferred acquisition costs
1,398.6

 
1,215.5

Reinsurance receivables (net of allowance for credit losses of $4.0 at March 31, 2020)
4,727.5

 
4,785.7

Income tax assets, net
703.2

 
432.6

Assets held in separate accounts
3.2

 
4.2

Other assets
599.6

 
476.0

Total assets
$
32,735.0

 
$
33,630.9


(continued on next page)








The accompanying notes are an integral part
of the consolidated financial statements.

3

 



CNO FINANCIAL GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET, continued
(Dollars in millions)
(unaudited)

LIABILITIES AND SHAREHOLDERS' EQUITY

 
March 31,
2020
 
December 31,
2019
 
 
 
 
Liabilities:
 
 
 
Liabilities for insurance products:
 
 
 
Policyholder account liabilities
$
12,138.1

 
$
12,132.3

Future policy benefits
11,429.9

 
11,498.5

Liability for policy and contract claims
510.7

 
522.3

Unearned and advanced premiums
251.0

 
260.5

Liabilities related to separate accounts
3.2

 
4.2

Other liabilities
850.7

 
750.2

Investment borrowings
1,643.9

 
1,644.3

Borrowings related to variable interest entities
1,152.3

 
1,152.5

Notes payable – direct corporate obligations
989.4

 
989.1

Total liabilities
28,969.2

 
28,953.9

Commitments and Contingencies


 


Shareholders' equity:
 

 
 

Common stock ($0.01 par value, 8,000,000,000 shares authorized, shares issued and outstanding: March 31, 2020 – 143,610,046; December 31, 2019 – 148,084,178)
1.4

 
1.5

Additional paid-in capital
2,688.5

 
2,767.3

Accumulated other comprehensive income
595.2

 
1,372.5

Retained earnings
480.7

 
535.7

Total shareholders' equity
3,765.8

 
4,677.0

Total liabilities and shareholders' equity
$
32,735.0

 
$
33,630.9

















The accompanying notes are an integral part
of the consolidated financial statements.


4

 

CNO FINANCIAL GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(Dollars in millions, except per share data)
(unaudited)
 
 
Three months ended
 
 
March 31,
 
 
2020
 
2019
Revenues:
 
 
 
 
Insurance policy income
 
$
628.7

 
$
619.3

Net investment income:
 
 

 
 

General account assets
 
280.3

 
268.8

Policyholder and other special-purpose portfolios
 
(110.7
)
 
87.0

Realized investment gains (losses):
 
 
 
 
Net realized investment gains (losses)
 
(60.1
)
 
18.3

Change in allowance for credit losses and other-than-temporary impairment losses (a)
 
(55.4
)
 
(2.2
)
Total realized gains (losses)
 
(115.5
)
 
16.1

Fee revenue and other income
 
34.4

 
31.8

Total revenues
 
717.2

 
1,023.0

Benefits and expenses:
 
 
 
 
Insurance policy benefits
 
490.8

 
623.5

Interest expense
 
33.4

 
41.0

Amortization
 
50.2

 
58.2

Other operating costs and expenses
 
213.8

 
234.7

Total benefits and expenses
 
788.2

 
957.4

Income (loss) before income taxes
 
(71.0
)
 
65.6

Income tax expense (benefit):
 
 
 
 
Tax expense (benefit) on period income
 
(15.8
)
 
13.8

Valuation allowance for deferred tax assets and other tax items
 
(34.0
)
 

Net income (loss)
 
$
(21.2
)
 
$
51.8

Earnings per common share:
 
 
 
 
Basic:
 
 
 
 
Weighted average shares outstanding
 
145,829,000

 
160,948,000

Net income (loss)
 
$
(.15
)
 
$
.32

Diluted:
 
 

 
 

Weighted average shares outstanding
 
145,829,000

 
162,189,000

Net income (loss)
 
$
(.15
)
 
$
.32



______________
(a)
No portion of the other-than-temporary impairments recognized in the 2019 period was included in accumulated other comprehensive income.







The accompanying notes are an integral part
of the consolidated financial statements.

5

 

CNO FINANCIAL GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(Dollars in millions)
(unaudited)

 
Three months ended
 
March 31,
 
2020
 
2019
Net income (loss)
$
(21.2
)
 
$
51.8

Other comprehensive income, before tax:
 
 
 
Unrealized gains (losses) on investments:
(1,325.4
)
 
690.2

Adjustment to present value of future profits and deferred acquisition costs
136.3

 
(50.5
)
Amount related to premium deficiencies assuming the net unrealized gains (losses) had been realized
135.5

 
(31.5
)
Reclassification adjustments:
 
 
 
For net realized investment losses included in net income (loss)
65.6

 
1.1

For amortization of the present value of future profits and deferred acquisition costs related to net realized investment gains (losses) included in net income (loss)
(3.4
)
 
.2

Other comprehensive income (loss) before tax
(991.4
)
 
609.5

Income tax (expense) benefit related to items of accumulated other comprehensive income (loss)
214.1

 
(132.3
)
Other comprehensive income (loss), net of tax
(777.3
)
 
477.2

Comprehensive income (loss)
$
(798.5
)
 
$
529.0























The accompanying notes are an integral part
of the consolidated financial statements.


6

 

CNO FINANCIAL GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
(Dollars in millions, shares in thousands)
(unaudited)

 
Common stock
 

Additional
paid-in
 
Accumulated other comprehensive
 
Retained
 
 
 
Shares
 
Amount
 
capital
 
income
 
earnings
 
Total
Balance, December 31, 2018
162,202

 
$
1.6

 
$
2,995.0

 
$
177.7

 
$
196.6

 
$
3,370.9

Cumulative effect of accounting change

 

 

 

 
(3.1
)
 
(3.1
)
Balance, January 1, 2019
162,202

 
1.6

 
2,995.0

 
177.7

 
193.5

 
3,367.8

Net income

 

 

 

 
51.8

 
51.8

Change in unrealized appreciation (depreciation) of investments (net of applicable income tax expense of $132.3)

 

 

 
477.1

 

 
477.1

Change in noncredit component of impairment losses on fixed maturities, available for sale (net of applicable income tax expense of less than $.1)

 

 

 
.1

 

 
.1

Common stock repurchased
(2,893
)
 

 
(47.0
)
 

 

 
(47.0
)
Dividends on common stock

 

 

 

 
(16.1
)
 
(16.1
)
Employee benefit plans, net of shares used to pay tax withholdings
646

 

 
4.2

 

 

 
4.2

Balance, March 31, 2019
159,955

 
$
1.6

 
$
2,952.2

 
$
654.9

 
$
229.2

 
$
3,837.9

 
 
 
 
 
 
 
 
 
 
 
 
Balance, December 31, 2019
148,084

 
$
1.5

 
$
2,767.3

 
$
1,372.5

 
$
535.7

 
$
4,677.0

Cumulative effect of accounting change

 

 

 

 
(17.8
)
 
(17.8
)
Balance, January 1, 2020
148,084

 
1.5

 
2,767.3

 
1,372.5

 
517.9

 
4,659.2

Net loss

 

 

 

 
(21.2
)
 
(21.2
)
Change in unrealized appreciation (depreciation) of investments (net of applicable income tax benefit of $214.1)

 

 

 
(777.3
)
 

 
(777.3
)
Common stock repurchased
(5,083
)
 
(.1
)
 
(82.9
)
 

 

 
(83.0
)
Dividends on common stock

 

 

 

 
(16.0
)
 
(16.0
)
Employee benefit plans, net of shares used to pay tax withholdings
609

 

 
4.1

 

 

 
4.1

Balance, March 31, 2020
143,610

 
$
1.4

 
$
2,688.5

 
$
595.2

 
$
480.7

 
$
3,765.8










The accompanying notes are an integral part
of the consolidated financial statements.

7

 

CNO FINANCIAL GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(Dollars in millions)
(unaudited)

 
Three months ended
 
March 31,
 
2020
 
2019
Cash flows from operating activities:
 
 
 
Insurance policy income
$
575.3

 
$
581.2

Net investment income
285.7

 
272.3

Fee revenue and other income
34.4

 
31.8

Insurance policy benefits
(429.2
)
 
(407.7
)
Interest expense
(20.3
)
 
(28.9
)
Deferrable policy acquisition costs
(68.2
)
 
(69.6
)
Other operating costs
(250.1
)
 
(241.8
)
Income taxes
(1.9
)
 
5.0

Net cash from operating activities
125.7

 
142.3

Cash flows from investing activities:
 

 
 

Sales of investments
417.9

 
1,775.5

Maturities and redemptions of investments
595.7

 
516.2

Purchases of investments
(1,178.2
)
 
(2,406.5
)
Net purchases of trading securities
(6.3
)
 
(.7
)
Other
(7.3
)
 
(10.6
)
Net cash used by investing activities
(178.2
)
 
(126.1
)
Cash flows from financing activities:
 

 
 

Issuance of common stock
2.7

 
2.8

Payments to repurchase common stock
(88.0
)
 
(44.0
)
Common stock dividends paid
(16.2
)
 
(16.4
)
Amounts received for deposit products
404.8

 
420.1

Withdrawals from deposit products
(354.0
)
 
(342.8
)
Issuance of investment borrowings:
 
 
 
Federal Home Loan Bank

 
50.0

Payments on investment borrowings:
 
 
 
Federal Home Loan Bank
(.5
)
 
(50.3
)
Related to variable interest entities
(.5
)
 
(.9
)
Net cash provided (used) by financing activities
(51.7
)
 
18.5

Net increase (decrease) in cash and cash equivalents
(104.2
)
 
34.7

Cash and cash equivalents - unrestricted and held by variable interest entities, beginning of period
654.7

 
656.6

Cash and cash equivalents - unrestricted and held by variable interest entities, end of period
$
550.5

 
$
691.3












The accompanying notes are an integral part
of the consolidated financial statements.

8

CNO FINANCIAL GROUP, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(unaudited)
___________________



BUSINESS AND BASIS OF PRESENTATION

The following notes should be read together with the notes to the consolidated financial statements included in our 2019 Annual Report on Form 10-K.

CNO Financial Group, Inc., a Delaware corporation ("CNO"), is a holding company for a group of insurance companies operating throughout the United States that develop, market and administer health insurance, annuity, individual life insurance and other insurance products.  The terms "CNO Financial Group, Inc.", "CNO", the "Company", "we", "us", and "our" as used in these financial statements refer to CNO and its subsidiaries.  Such terms, when used to describe insurance business and products, refer to the insurance business and products of CNO's insurance subsidiaries.

We focus on serving middle-income pre-retiree and retired Americans, which we believe are attractive, underserved, high growth markets.  We sell our products through three distribution channels: career agents, independent producers (some of whom sell one or more of our product lines exclusively) and direct marketing.

Our unaudited consolidated financial statements reflect normal recurring adjustments that, in the opinion of management, are necessary for a fair statement of our financial position, results of operations and cash flows for the periods presented.  As permitted by rules and regulations of the Securities and Exchange Commission (the "SEC") applicable to quarterly reports on Form 10-Q, we have condensed or omitted certain information and disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP").  We have reclassified certain amounts from the prior periods to conform to the 2020 presentation.  These reclassifications have no effect on net income or shareholders' equity.  Results for interim periods are not necessarily indicative of the results that may be expected for a full year, especially when considering the risks and uncertainties associated with the novel coronavirus ("COVID-19") and the impact it may have on our business, results of operations and financial condition. The COVID-19 pandemic has negatively impacted the U.S. and global economies, lowered equity market valuations, created significant volatility and disruption in the capital markets, dramatically increased unemployment levels and has fueled concerns that it will lead to a global recession. Depending on the duration and severity of the pandemic, we foresee the potential for adverse impacts related to, among other things: (i) sales results; (ii) insurance product margin; (iii) net investment income; (iv) invested assets; (v) regulatory capital; (vi) liabilities for insurance products; (vii) deferred acquisition costs; (viii) the present value of future profits; and (ix) income tax assets. The full extent to which COVID-19 will impact our business, results of operations and financial condition remains uncertain.

The balance sheet at December 31, 2019, presented herein, has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by GAAP for complete financial statements.

When we prepare financial statements in conformity with GAAP, we are required to make estimates and assumptions that significantly affect reported amounts of various assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the reporting periods.  For example, we use significant estimates and assumptions to calculate values for deferred acquisition costs, the present value of future profits, fair value measurements of certain investments (including derivatives), other-than-temporary impairments of investments, assets and liabilities related to income taxes, liabilities for insurance products, liabilities related to litigation and guaranty fund assessment accruals.  If our future experience differs from these estimates and assumptions, our financial statements would be materially affected.

The accompanying financial statements include the accounts of the Company and its subsidiaries. Our consolidated financial statements exclude transactions between us and our consolidated affiliates, or among our consolidated affiliates.

INVESTMENTS

We classify our fixed maturity securities into one of two categories: (i) "available for sale" (which we carry at estimated fair value with any unrealized gain or loss, net of tax and related adjustments, recorded as a component of shareholders' equity); or (ii) "trading" (which we carry at estimated fair value with changes in such value recognized as either net investment income (classified as investment income from policyholder and other special-purpose portfolios) or realized investment gains (losses)).


9

CNO FINANCIAL GROUP, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(unaudited)
___________________


Trading securities include: (i) investments purchased with the intent of selling in the near term to generate income; (ii) investments supporting certain insurance liabilities; and (iii) 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 and investments supporting insurance liabilities and reinsurance agreements is recognized in income from policyholder and other special-purpose portfolios (a component of net investment income). The change in fair value of securities with embedded derivatives is recognized in realized investment gains (losses). Investment income related to investments supporting certain insurance liabilities is substantially offset by the change in insurance policy benefits related to certain products.

When an available for sale fixed maturity security's fair value is below the amortized cost, the security is considered impaired. If a portion of the decline is due to credit-related factors, we separate the credit loss component of the impairment from the amount related to all other factors and report the credit loss component in net realized investment gains (losses) limited to the difference between estimated fair value and amortized cost. The impairment related to all other factors (non-credit factors) is reported in accumulated other comprehensive income along with unrealized gains related to fixed maturity investments, available for sale, net of tax and related adjustments. The allowance is adjusted for any additional credit losses and subsequent recoveries. When recognizing an allowance associated with a credit loss, the cost basis is not adjusted. When we determine a security is uncollectable, the remaining amortized cost will be written off.

In determining the credit loss component, we discount the estimated cash flows on a security by security basis. We consider the impact of macroeconomic conditions on inputs used to measure the amount of credit loss. For most structured securities, cash flow estimates are based on bond-specific facts and circumstances that may include collateral characteristics, expectations of delinquency and default rates, loss severity, prepayment speeds and structural support, including overcollateralization, excess spread, subordination and guarantees. For corporate bonds, cash flow estimates are derived by considering asset type, rating, time to maturity, and applying an expected loss rate.
  
If we intend to sell an impaired fixed maturity security, available for sale, or identify an impaired fixed maturity security, available for sale, for which is it more likely than not we will be required to sell before anticipated recovery, the difference between the fair value and the amortized cost is included in net realized investment gains (losses) and the fair value becomes the new amortized cost. The new cost basis is not adjusted for any subsequent recoveries in fair value.

The Company reports investment income accrued separately from fixed maturities, available for sale, and has elected not to measure an allowance for credit losses for investment income accrued. Investment income accrued is written off through net investment income at the time the issuer of the bond defaults or is expected to default on payments.

Accumulated other comprehensive income is primarily comprised of the net effect of unrealized appreciation (depreciation) on our investments.  These amounts, included in shareholders' equity as of March 31, 2020 and December 31, 2019, were as follows (dollars in millions):
 
March 31,
2020
 
December 31,
2019
Net unrealized appreciation (depreciation) on fixed maturity securities, available for sale, on which an other-than-temporary impairment loss has been recognized
$

 
$
1.1

Net unrealized gains on all other fixed maturity securities, available for sale

 
2,095.3

Net unrealized gains on investments having no allowance for credit losses
957.4

 

Unrealized losses on investments with an allowance for credit losses
(120.8
)
 

Adjustment to present value of future profits (a)
(3.9
)
 
(18.9
)
Adjustment to deferred acquisition costs
(71.0
)
 
(227.9
)
Adjustment to insurance liabilities

 
(96.5
)
Deferred income tax liabilities
(166.5
)
 
(380.6
)
Accumulated other comprehensive income
$
595.2

 
$
1,372.5

________
(a)
The present value of future profits is the value assigned to the right to receive future cash flows from contracts existing at September 10, 2003, the date Conseco, Inc., an Indiana corporation, emerged from bankruptcy.

10

CNO FINANCIAL GROUP, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(unaudited)
___________________


At March 31, 2020, the amortized cost, gross unrealized gains, gross unrealized losses, allowance for credit losses and estimated fair value of fixed maturities, available for sale, were as follows (dollars in millions):
 
Amortized cost
 
Gross unrealized gains
 
Gross unrealized losses
 
Allowance for credit losses
 
Estimated fair value
Corporate securities
$
11,740.8

 
$
1,207.8

 
$
(313.1
)
 
$
(18.2
)
 
$
12,617.3

United States Treasury securities and obligations of United States government corporations and agencies
150.5

 
82.1

 

 

 
232.6

States and political subdivisions
1,970.6

 
254.7

 
(3.3
)
 
(.6
)
 
2,221.4

Foreign governments
88.1

 
6.2

 
(.7
)
 
(.1
)
 
93.5

Asset-backed securities
1,272.4

 
14.4

 
(81.1
)
 

 
1,205.7

Agency residential mortgage-backed securities
72.7

 
7.6

 

 

 
80.3

Non-agency residential mortgage-backed securities
1,854.2

 
48.4

 
(76.5
)
 
(1.0
)
 
1,825.1

Commercial mortgage-backed securities
1,812.5

 
14.9

 
(123.1
)
 

 
1,704.3

Collateralized loan obligations
458.4

 

 
(59.5
)
 

 
398.9

Total fixed maturities, available for sale
$
19,420.2

 
$
1,636.1

 
$
(657.3
)
 
$
(19.9
)
 
$
20,379.1



At December 31, 2019, the amortized cost, gross unrealized gains and losses, estimated fair value and other-than-temporary impairments in accumulated other comprehensive income of fixed maturities, available for sale, were as follows (dollars in millions):
 
Amortized cost
 
Gross unrealized gains
 
Gross unrealized losses
 
Estimated fair value
 
Other-than-temporary impairments included in accumulated other comprehensive income
Corporate securities
$
11,403.5

 
$
1,544.1

 
$
(12.3
)
 
$
12,935.3

 
$

United States Treasury securities and obligations of United States government corporations and agencies
161.4

 
43.3

 
(.1
)
 
204.6

 

States and political subdivisions
2,002.1

 
246.1

 
(1.5
)
 
2,246.7

 

Foreign governments
82.6

 
13.0

 

 
95.6

 

Asset-backed securities
1,352.9

 
36.8

 
(1.8
)
 
1,387.9

 

Agency residential mortgage-backed securities
89.2

 
5.8

 

 
95.0

 

Non-agency residential mortgage-backed securities
1,871.0

 
172.3