CNO Financial Group, Inc.: Q2 FY2026 earnings call

What management said about Q2 FY2026, from the documents filed with the SEC on 30 July 2026: press release. Guidance figures: 1 raised. The quarter’s numbers.

Key takeaways

Operating EPS up 45%: Net operating income was $119.5 million, or $1.26 per diluted share, against $87.5 million, or $0.87, a year earlier. Year-to-date operating EPS rose 39%. Source
Net income above operating income: Net income was $125.9 million, or $1.33 per diluted share, against $91.8 million, or $0.91. The company attributed the gap to non-economic accounting impacts from market volatility. Source
Operating ROE rose to 13.1%: Operating return on equity, excluding significant items, was 13.1% for the trailing four quarters, against 11.2%. The company describes it as a non-GAAP measure. Source
Sales growth extends to 16 quarters: Total new annualized premiums rose 7%, extending insurance sales growth to 16 consecutive quarters. NAP counts 10% of single premium whole life deposits. Source
Quarterly records in three areas: The company reported quarterly records in Worksite Division NAP, annuity collected premiums, and client assets in brokerage and advisory. Source
Holding company cash declined: Unrestricted cash and investments at the holding company were $233.2 million at June 30, compared with $280.1 million at March 31 and $351.4 million at December 31, 2025. Source
TechMod costs rose: TechMod expense was $9.7 million in 2Q26, against $3.2 million in 2Q25 and $13.7 million in 1Q26, and is reported within non-operating items. Source

“CNO delivered a very strong first half, with second quarter operating earnings per share up 45% and our 16th consecutive quarter of sales growth,”
Gary C. Bhojwani, chief executive officer

Guidance

Area	Period	Figure	Against last quarter
Operating earnings per share Source	full year 2026	by 8% at the midpoint	Raised

What changed from last quarter

Guidance raised: Full-year 2026 operating EPS guidance was raised compared with prior guidance. Source

Results and earnings drivers

Operating EPS up 45%: Net operating income was $119.5 million, or $1.26 per diluted share, against $87.5 million, or $0.87, a year earlier. Year-to-date operating EPS rose 39%. Source
Net income above operating income: Net income was $125.9 million, or $1.33 per diluted share, against $91.8 million, or $0.91. The company attributed the gap to non-economic accounting impacts from market volatility. Source
Insurance product income up 22%: Income from insurance products was $126.1 million, or $1.33 per share, against $103.0 million, or $1.03, in 2Q25. Per-share growth was 29%. Source
Reported ROE eased: Return on equity for the trailing four quarters was 10.9%, against 11.9% a year earlier. Source
Operating ROE rose to 13.1%: Operating return on equity, excluding significant items, was 13.1% for the trailing four quarters, against 11.2%. The company describes it as a non-GAAP measure. Source

Sales, distribution and scale

Sales growth extends to 16 quarters: Total new annualized premiums rose 7%, extending insurance sales growth to 16 consecutive quarters. NAP counts 10% of single premium whole life deposits. Source
Quarterly records in three areas: The company reported quarterly records in Worksite Division NAP, annuity collected premiums, and client assets in brokerage and advisory. Source
Agent count growth continues: Producing agent count growth ran for 14 consecutive quarters in Consumer and 16 consecutive quarters in Worksite. Source
Associate and agent counts: Associates were 3,200, against 3,300 in the April release. Exclusive agents were 5,100, against 5,000, and independent partner agents more than 6,500, against more than 7,500. Source
Policies and total assets: The company reports 3.3 million policies and $39.9 billion in total assets, up from $39.0 billion in the April release. Source

“We are raising full-year guidance on operating earnings per share to reflect strong underlying fundamentals, continued profitability improvement and the consistent, repeatable results we continue to generate across the business.”
Gary C. Bhojwani, chief executive officer

Investment results and non-operating items

Annuity fair value gain rose: Earnings rose $34.6 million, or $0.36 per share, from fair value changes on fixed indexed annuity liabilities and market risk benefits, against $25.2 million a year earlier. Source
Investment income outside product lines up 46%: Investment income not allocated to product lines was $49.4 million, or $0.52 per share, against $33.8 million, or $0.33, a year earlier. Source
Realized investment losses narrowed: Net investment losses were $13.6 million, including a $3.4 million unfavorable change in the credit loss allowance, against $21.8 million in 2Q25. Source

Capital, cash and shareholder returns

Buybacks of $60.0 million: The company repurchased $60.0 million of common stock in the quarter, 1.3 million shares at an average $46.57 per share. Source
Repurchase authority remaining: At June 30, 2026 there were 92.7 million shares outstanding, and authority to repurchase up to an additional $300.4 million of common stock remained. Source
Subsidiary and common dividends: Insurance subsidiaries paid $20.0 million of dividends to the holding company in 2Q26. Dividends paid on common stock totaled $16.8 million. Source
Holding company cash declined: Unrestricted cash and investments at the holding company were $233.2 million at June 30, compared with $280.1 million at March 31 and $351.4 million at December 31, 2025. Source

Statutory capital and leverage

Statutory RBC ratio at 377%: The consolidated statutory risk-based capital ratio of U.S. insurance subsidiaries was estimated at 377%, from 375% at March 31, reflecting a 2Q26 statutory operating gain of $35.4 million. Source
Debt-to-capital ratio at 34.0%: Debt-to-capital was 34.0% at June 30, against 34.8% at March 31 and 33.6% at December 31, 2025. Source
Leverage excluding AOCI at 26.1%: Debt-to-total capital excluding accumulated other comprehensive loss was 26.1%, against 26.4% at March 31 and 26.2% at December 31, 2025. Source

Technology and business exits

TechMod costs rose: TechMod expense was $9.7 million in 2Q26, against $3.2 million in 2Q25 and $13.7 million in 1Q26, and is reported within non-operating items. Source
Worksite fee exit loss recorded: The company recognized a $1.1 million non-operating loss on the exit from the fee services side of the Worksite business, against $1.9 million in 1Q26. Source
Worksite operating losses reclassified: Operating losses from the Worksite fee business, including exit costs, have been reported in non-operating income since 4Q25 rather than within fee income. Source

Figures management reported

Figure	Reported
Investment income Source	$411.9 million general account net investment income in 2Q26, against $378.3 million in 2Q25
Book value per share Source	$27.96 at June 30, 2026, against $25.92 a year earlier

Risks management discussed

Financial: Market volatility produced non-economic accounting impacts that lifted net income above operating income in 2Q26. Source
Financial: Credit loss allowance changes reduced investment results by $3.4 million in 2Q26. Source
Operational: TechMod modernization expense was higher than a year earlier, at $9.7 million in 2Q26. Source
Operational: The Worksite fee services exit produced a $1.1 million non-operating loss in 2Q26. Source

Earlier plans management reported on

Not stated: The company refers to its earlier announcement of the Worksite fee services exit; the release does not state progress against plan. Source
Not stated: TechMod began in 2Q25 as a three-year project; the release does not state progress against plan. Source

Other quarters

Summarised with AI from the documents the company filed with the SEC. Every point is checked against the filing before it is shown: management’s own words word for word, figures against the line or table row they come from. A point that fails the check is left out. Source opens the filing at that line.

As filed with the SEC

Open the filing on EDGAR

CNO Financial Group Reports Second Quarter 2026 Results

Carmel, Ind., July 30, 2026 - CNO Financial Group, Inc. (NYSE: CNO) today reported its second quarter 2026 financial results:

Strong execution and momentum continues; Raising 2026 operating earnings per share (EPS) guidance by 8% at the midpoint from our prior guidance.
Net income was $126 million, or $1.33 per diluted share, and net operating income was $120 million, or $1.26 per diluted share.
Operating EPS grew 45% in the quarter and 39% year-to-date.
Return on equity (ROE) of 10.9%; Operating ROE of 13.1%, excluding significant items.
Book value per share of $27.96 and book value per diluted share, excluding accumulated other comprehensive loss, of $39.92, up 5%.
Total new annualized premiums (NAP) up 7%, extending our track record of insurance sales growth to 16 consecutive quarters.
Achieved quarterly records in Worksite Division NAP, Annuity collected premiums and client assets in brokerage and advisory.
Consumer and Worksite delivered their 14 and 16 consecutive quarters of producing agent count growth, respectively.

“CNO delivered a very strong first half, with second quarter operating earnings per share up 45% and our 16th consecutive quarter of sales growth,” said Gary C. Bhojwani, chief executive officer.

“We are raising full-year guidance on operating earnings per share to reflect strong underlying fundamentals, continued profitability improvement and the consistent, repeatable results we continue to generate across the business.”

FINANCIAL SUMMARY

Quarter End

(Amounts in millions, except per share data)

(Unaudited)

Net income in 2Q26 and 2Q25 was higher than operating income primarily driven by non-economic accounting impacts from market volatility, partially offset by investment losses that are treated as non-operating income.

Net operating income, a non-GAAP financial measure, excludes these non-economic accounting impacts as well as other non-operating items. Net operating income is used consistently by CNO’s management to evaluate the operating performance of the Company and is a measure commonly used in the life insurance industry. It differs from net income primarily because it excludes the non-operating items as defined in note (1). Management believes an analysis of net operating income is important in understanding the profitability and operating trends of the Company’s business. Net income is the most directly comparable GAAP measure.

In 2Q26 and 2Q25, net income and net operating income were unaffected by significant items. Significant items are detailed in note (6).

	Per diluted share
	Quarter ended				Quarter ended
	June 30,				June 30,
	2026	2025	% change		2026	2025	% change
Income from insurance products	$1.33	$1.03	29%		$126.1	$103.0	22%
Fee income	(0.01)	0.01		n/m	(1.2)	0.8		n/m
Investment income not allocated to product lines	0.52	0.33	58		49.4	33.8	46
Expenses not allocated to product lines	(0.25)	(0.25)	-		(23.3)	(25.3)	(8)
Operating earnings before taxes	1.59	1.12			151.0	112.3
Income tax expense on operating income	(0.33)	(0.25)	32		(31.5)	(24.8)	27
Net operating income (1)	1.26	0.87	45		119.5	87.5	37
Net realized investment losses from disposals, impairments and change in allowance for credit losses	(0.14)	(0.22)			(13.6)	(21.8)
Net change in market value of investments recognized in earnings	(0.01)	0.03			(1.1)	3.4
Changes in fair value of embedded derivative liabilities and market risk benefits	0.36	0.25			34.6	25.2
Expenses related to TechMod initiative	(0.10)	(0.03)			(9.7)	(3.2)
Net loss related to divested business	(0.01)	-			(1.1)	-
Other	(0.01)	0.02			(0.4)	2.1
Non-operating income before taxes	0.09	0.05			8.7	5.7
Income tax expense on non-operating income	(0.02)	(0.01)			(2.3)	(1.4)
Net non-operating income	0.07	0.04			6.4	4.3
Net income	$1.33	$0.91			$125.9	$91.8
Weighted average diluted shares outstanding	95.0	100.4

(a) GAAP is defined as accounting principles generally accepted in the United States of America.

(b) Income from insurance products is the sum of the insurance product margins of the annuity, health and life product lines, less expenses allocated to the insurance product lines. It excludes the income from our fee income business, investment income not allocated to product lines, net expenses not allocated to product lines (primarily holding company expenses) and income taxes. Insurance product margin is management’s measure of the profitability of its annuity, health and life product lines’ performance and consists of insurance policy income plus allocated investment income less insurance policy benefits, interest credited, commissions, advertising expense and amortization of acquisition costs.

(c) Investment income not allocated to product lines represents net investment income less: (i) equity returns credited to policyholder account balances; (ii) the investment income allocated to our product lines; (iii) interest expense on notes payable, investment borrowings and financing arrangements; (iv) expenses related to the funding agreement-backed notes ("FABN") program; and (v) certain expenses related to benefit plans that are offset by special-purpose investment income; plus (vi) the impact of annual option forfeitures related to fixed indexed annuity surrenders. Investment income not allocated to product lines includes investment income on investments in excess of amounts allocated to product lines, investments held by our holding companies, the spread we earn from our Federal Home Loan Bank ("FHLB") investment borrowing and FABN programs and variable components of investment income (including call and prepayment income, adjustments to returns on structured securities due to cash flow changes, income (loss) from company-owned life insurance ("COLI") and alternative investment income not allocated to product lines), net of interest expense on corporate debt and financing arrangements. The spread earned from our FHLB investment borrowing and FABN programs includes the investment income on the matched assets less: (i) interest on investment borrowings related to the FHLB investment borrowing program; (ii) interest credited on funding agreements; and (iii) amortization of deferred acquisition costs related to the FABN program.

FINANCIAL SUMMARY (continued)

Management vs. GAAP Measures

(Dollars in millions, except per share data)

(Unaudited)

Shareholders’ equity, excluding accumulated other comprehensive income (loss), and book value per share, excluding accumulated other comprehensive income (loss), are non-GAAP measures that are utilized by management to view the business without the effect of accumulated other comprehensive income (loss) which is primarily attributable to fluctuations in interest rates associated with fixed maturities, available for sale. Management views the business in this manner because the Company has the ability and generally, the intent, to hold investments to maturity and meaningful trends can be more easily identified without the fluctuations. In addition, shareholders' equity excludes net operating loss carryforwards in our non-GAAP return on equity measures as such assets are not discounted and, accordingly, will not provide a return to shareholders until after it is realized as a reduction to taxes that would otherwise be paid. Management believes that excluding this value from the equity component of this measure enhances the understanding of the effect these non-discounted assets have on operating returns.

	Quarter ended
	June 30,
	2026	2025
Trailing four quarters:
Net Income	$279.6	$305.5
Net operating income (a non-GAAP financial measure)	491.4	425.8
Net operating income, excluding significant items	459.2	401.7
Average of each of the trailing four quarters average:
Shareholders’ equity	$2,576.2	$2,558.5
Accumulated other comprehensive loss	1,167.3	1,271.2
Shareholders’ equity, excluding accumulated other comprehensive loss	3,743.5	3,829.7
Net operating loss carryforwards	(248.1)	(232.4)
Shareholders' equity, excluding accumulated other comprehensive loss and net operating loss carryforwards	$3,495.4	$3,597.3
Ratios:
Return on equity	10.9%	11.9%
Operating return on equity (a non-GAAP financial measure)	14.1%	11.8%
Operating return on equity, excluding significant items (a non-GAAP financial measure)	13.1%	11.2%

Shareholders’ equity	$2,591.6		$2,522.7
Accumulated other comprehensive loss	1,182.8		1,252.7
Shareholders’ equity, excluding accumulated other comprehensive loss	$3,774.4		$3,775.4
Basic shares outstanding		92,696,990		97,319,000
Diluted shares outstanding		94,551,416		99,221,445
Book value per share	$27.96		$25.92
Book value per diluted share	$27.41		$25.42
Accumulated other comprehensive loss per diluted share	12.51		12.63
Book value per diluted share, excluding accumulated other comprehensive loss (a non-GAAP financial measure)	$39.92		$38.05

Non-Operating Items

Net investment losses in 2Q26 were $13.6 million, including the unfavorable change in the allowance for credit losses of $3.4 million. Net investment losses in 2Q25 were $21.8 million, including the unfavorable change in the allowance for credit losses of $1.0 million.

During 2Q26 and 2Q25, we recognized a decrease in earnings of $1.1 million and an increase of $3.4 million, respectively, due to the net change in market value of investments.

During 2Q26 and 2Q25, we recognized an increase in earnings of $34.6 million and $25.2 million, respectively, resulting from changes in the estimated fair value of embedded derivative liabilities and market risk benefits related to our fixed indexed annuities. Such amounts include the impacts of changes in market interest rates and equity impacts used to determine the estimated fair values of the embedded derivatives and market risk benefits, and changes in equity volatility.

During 2Q26 and 2Q25, we incurred $9.7 million and $3.2 million, respectively, of expense related to TechMod, our technology modernization initiative. This three-year project began in the second quarter of 2025 to modernize certain elements of our technology.

We recognized a $1.1 million non-operating loss related to our previously announced exit from the fee services side of the Worksite business during 2Q26. Beginning in 4Q25, operating losses, including costs to exit this business, are reported in non-operating income. These operating losses were previously reported in operating income as a component of fee income.

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

The consolidated statutory risk-based capital ratio of our U.S. based insurance subsidiaries was estimated at 377% at June 30, 2026, reflecting estimated 2Q26 statutory operating gain of $35.4 million. There were $20.0 million of company dividends paid to the holding company during 2Q26.

During 2Q26, we repurchased $60.0 million of common stock under our securities repurchase program. We repurchased 1.3 million common shares at an average cost of $46.57 per share. As of June 30, 2026, we had 92.7 million shares outstanding and had authority to repurchase up to an additional $300.4 million of our common stock. During 2Q26, dividends paid on common stock totaled $16.8 million.

Unrestricted cash and investments held by our holding company were $233.2 million at June 30, 2026 compared to $351.4 million at December 31, 2025.

Book value per common share was $27.96 at June 30, 2026 compared to $27.92 at December 31, 2025. Book value per diluted share, excluding accumulated other comprehensive income (loss), was $39.92 at June 30, 2026 compared to $38.81 at December 31, 2025.

The debt-to-capital ratio was 34.0% and 33.6% at June 30, 2026 and December 31, 2025, respectively. Our debt-to-total capital ratio, excluding accumulated other comprehensive income (loss), was 26.1% and 26.2% at June 30, 2026 and December 31, 2025, respectively.

Return on equity for the trailing four quarters ended June 30, 2026 and 2025 was 10.9% and 11.9%, respectively. Operating return on equity, excluding significant items, for the trailing four quarters ended June 30, 2026 and 2025 was 13.1% and 11.2%, respectively.

In this news release, CNO includes non-GAAP measures to enhance investors’ understanding of management’s view of the business. The non-GAAP measures are not a substitute for GAAP, but rather a supplement to increase transparency by providing a broader perspective. CNO’s definitions of non-GAAP measures may differ from other companies’ definitions. More detailed information including various GAAP and non-GAAP measurements are located at CNOinc.com in the Investors section under SEC Filings.

CAUTION REGARDING FORWARD-LOOKING STATEMENTS:

This press release may contain forward-looking statements within the meaning of federal securities laws. These prospective statements reflect management’s current expectations, but are not guarantees of future performance. Accordingly, please refer to CNO’s cautionary statement regarding forward-looking statements, and the business environment in which the Company operates, contained in the Company’s Form 10-K for the year ended December 31, 2025 and any subsequent Form 10-Q or Form 10-K on file with the Securities and Exchange Commission and on the Company’s website at CNOinc.com in the Investors section. CNO specifically disclaims any obligation to update or revise any forward-looking statement because of new information, future developments or otherwise.

EARNINGS RELEASE CONFERENCE CALL WEBCAST:

The Company will host a conference call to discuss results on July 31, 2026 at 11:00 a.m. Eastern Time. During the call, we will be referring to a presentation that will be available at the Investors section of the company's website.

To participate by dial-in, please register at https://events.q4inc.com/attendee/121613442. Upon registering, you will be provided with call details and a registrant ID used to track attendance on the conference call. Reminders will also be sent to registered participants via email.

For those investors who prefer to listen to the call online, we will be broadcasting the call live via webcast. The event can be accessed through the Investors section of the company's website: ir.CNOinc.com. Participants should go to the website at least 15 minutes before the event to register and download any necessary audio software.

ABOUT CNO FINANCIAL GROUP

CNO Financial Group, Inc. (NYSE: CNO) secures the future of middle-income America. CNO provides life and health insurance, annuities and financial services through our family of brands, including Bankers Life, Colonial Penn, Optavise and Washington National. Our customers work hard to save for the future, and we help protect their health, income and retirement needs with 3.3 million policies and $39.9 billion in total assets. Our 3,200 associates, 5,100 exclusive agents and more than 6,500 independent partner agents guide individuals, families and businesses through a lifetime of financial decisions. For more information, visit CNOinc.com.

CNO FINANCIAL GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF OPERATIONS

(Dollars in millions, except per share data)

(unaudited)

	Three months ended		Six months ended
	June 30,		June 30,
	2026	2025	2026	2025
Revenues:
Insurance policy income	$680.7	$651.3	$1,354.1	$1,302.0
Net investment income:
General account assets	411.9	378.3	806.9	753.4
Policyholder and other special-purpose portfolios	185.1	105.4	120.2	41.8
Investment gains (losses):
Realized investment losses	(8.6)	(21.3)	(16.4)	(25.1)
Other investment (losses) gains	(6.1)	2.9	(21.0)	(0.1)
Total investment losses	(14.7)	(18.4)	(37.4)	(25.2)
Fee revenue and other income	22.2	34.9	71.0	83.6
Total revenues	1,285.2	1,151.5	2,314.8	2,155.6
Benefits and expenses:
Insurance policy benefits	742.5	658.4	1,319.1	1,228.4
Liability for future policy benefits remeasurement gain	(15.3)	(12.8)	(21.8)	(25.0)
Change in fair value of market risk benefits	(8.3)	(10.9)	2.4	4.4
Interest expense	55.3	59.1	106.2	121.1
Amortization of deferred acquisition costs and present value of future profits	74.9	68.6	149.1	136.0
Gain on extinguishment of borrowings related to variable interest entities	-	-	-	(1.5)
Other operating costs and expenses	276.4	271.1	551.7	546.4
Total benefits and expenses	1,125.5	1,033.5	2,106.7	2,009.8
Income before income taxes	159.7	118.0	208.1	145.8
Income tax expense	33.8	26.2	44.5	32.5
Net income	$125.9	$91.8	$163.6	$113.3
Earnings per common share:
Basic:
Weighted average shares outstanding	93,194,000	98,572,000	93,636,000	99,658,000
Net income	$1.35	$0.93	$1.75	$1.14
Diluted:
Weighted average shares outstanding	94,952,000	100,386,000	95,545,000	101,728,000
Net income	$1.33	$0.91	$1.71	$1.11

NOTES

(1)Management believes that an analysis of net income applicable to common stock before: (i) net realized investment gains or losses from disposals, impairments and the change in allowance for credit losses, net of taxes; (ii) net change in market value of investments recognized in earnings, net of taxes; (iii) changes in fair value of embedded derivative liabilities and market risk benefits related to our fixed indexed annuities, net of taxes; (iv) fair value changes related to the agent deferred compensation plan, net of taxes; (v) gains or losses related to material reinsurance transactions, net of taxes; (vi) loss on extinguishment of debt, net of taxes; (vii) changes in the valuation allowance for deferred tax assets and other tax items; (viii) costs related to our three-year project to modernize certain elements of our technology ("TechMod") that are incremental to normal spend and will not recur following implementation, net of taxes; (ix) goodwill and other asset impairment expenses, net of taxes; (x) gains or losses related to divested business, net of taxes; and (xi) other non-operating items including earnings attributable to variable interest entities, 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. The income tax expense or benefit allocated to the items included in net non-operating income (loss) represents the current and deferred income tax expense or benefit allocated to the items included in non-operating earnings. Management believes this information provides a better understanding of the business and a more meaningful analysis of results of our insurance product lines. 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 on CNO's website, CNOinc.com, in the Investors section under SEC Filings.

(2)Book value per diluted share reflects the potential dilution that could occur if outstanding stock options were exercised and restricted stock and performance units were vested. The dilution from options, 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 (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. 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.

(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.

(4)Measured by new annualized premiums for life and health products, which includes 10% of single premium whole life deposits and 100% of all other premiums (excluding annuities). Sales of third-party products are excluded.

(5)Operating return on equity and operating return on equity, excluding significant items are calculated as follows: (i) operating return on equity is equal to the trailing four quarters of net operating income divided by average shareholders' equity, excluding accumulated other comprehensive income (loss) and net operating loss carryforwards; and (ii) operating return on equity, excluding significant items is equal to the trailing four quarters of net operating income, excluding significant items, divided by average shareholders' equity, excluding accumulated other comprehensive income (loss) and net operating loss carryforwards, for the trailing four quarters.

The following summarizes: (i) net operating income; (ii) significant items; (iii) net operating income, excluding significant items; and (iv) net income (loss) (dollars in millions):

					Net operating
				Net operating	income,
				income,	excluding		Net
				excluding	significant		income -
	Net operating	Significant		significant	items - trailing	Net	trailing
	income	items		items (a)	four quarters	income (loss)	four quarters
3Q24	$119.2	$(21.9)	(b)	$97.3	$376.9	$9.3	$274.2
4Q24	138.0	3.1	(c)	141.1	410.5	182.9	420.8
1Q25	81.1	(5.3)	(d)	75.8	428.8	21.5	330.0
2Q25	87.5	-		87.5	401.7	91.8	305.5
3Q25	127.2	(32.2)	(e)	95.0	399.4	23.1	319.3
4Q25	143.4	-		143.4	401.7	92.9	229.3
1Q26	101.3	-		101.3	427.2	37.7	245.5
2Q26	119.5	-		119.5	459.2	125.9	279.6
(a) See note (6) for additional information.
(b) Comprised of $31.2 million of the net favorable impact arising from our comprehensive annual actuarial review and $2.9 million of the unfavorable impact related to a fixed asset impairment, net of tax expense of $6.4 million.
(c) Comprised of $3.9 million of the unfavorable impact arising from our comprehensive annual actuarial review, net of tax expense of $0.8 million.
(d) Comprised of $6.8 million of the favorable impact of an out-of-period adjustment which decreased reserves, net of tax expense of $1.5 million.
(e) Comprised of $41.3 million of the net favorable impact arising from our comprehensive annual actuarial review, net of tax expense of $9.1 million.

A reconciliation of pre-tax operating earnings (a non-GAAP financial measure) to net income is as follows (dollars in millions):

	Trailing four quarters
	2Q26	2Q25
Pre-tax operating earnings (a non-GAAP financial measure)	$617.2	$544.3
Income tax expense	(125.8)	(118.5)
Net operating income	491.4	425.8
Non-operating items:
Net realized investment losses from disposals, impairments and change in allowance for credit losses	(62.8)	(81.2)
Net change in market value of investments recognized in earnings	(4.1)	15.5
Changes in fair value of embedded derivative liabilities and market risk benefits	(27.4)	(78.9)
Fair value changes related to the agent deferred compensation plan	(1.7)	3.1
Expenses related to TechMod initiative	(40.5)	(3.2)
Goodwill and other asset impairment	(101.9)	-
Net loss related to divested business	(20.3)	-
Other	(2.8)	(10.7)
Non-operating loss before taxes	(261.5)	(155.4)
Income tax benefit on non-operating loss	49.7	35.1
Net non-operating loss	(211.8)	(120.3)
Net income	$279.6	$305.5

A reconciliation of consolidated capital, excluding accumulated other comprehensive income (loss) and net operating loss carryforwards (a non-GAAP financial measure) to common shareholders’ equity, is as follows (dollars in millions):

		1Q24	2Q24	3Q24	4Q24
	income (loss) and net operating loss carryforwards
	(a non-GAAP financial measure)	$3,536.8	$3,596.7	$3,529.9	$3,810.0
Consolidated capital, excluding accumulated other comprehensive
Net operating loss carryforwards		311.2	296.5	273.9	76.6
Accumulated other comprehensive loss		(1,480.3)	(1,464.3)	(1,116.0)	(1,371.4)
Common shareholders' equity		$2,367.7	$2,428.9	$2,687.8	$2,515.2
		1Q25	2Q25	3Q25	4Q25
Consolidated capital, excluding accumulated other comprehensive
	income (loss) and net operating loss carryforwards
	(a non-GAAP financial measure)	$3,498.9	$3,504.3	$3,483.6	$3,510.2
Net operating loss carryforwards		295.3	271.1	246.3	243.0
Accumulated other comprehensive loss		(1,239.1)	(1,252.7)	(1,118.9)	(1,115.0)
Common shareholders' equity		$2,555.1	$2,522.7	$2,611.0	$2,638.2
		1Q26	2Q26
Consolidated capital, excluding accumulated other comprehensive
	income (loss) and net operating loss carryforwards
	(a non-GAAP financial measure)	$3,461.2	$3,548.5
Net operating loss carryforwards		254.8	225.9
Accumulated other comprehensive loss		(1,217.6)	(1,182.8)
Common shareholders' equity		$2,498.4	$2,591.6

A reconciliation of consolidated capital, excluding accumulated other comprehensive loss and net operating loss carryforwards (a non-GAAP financial measure) to common shareholders’ equity, is as follows (dollars in millions):

		Trailing four quarter average
		2Q26	2Q25
	income (loss) and net operating loss carryforwards
	(a non-GAAP financial measure)	$3,495.4	$3,597.3
Consolidated capital, excluding accumulated other comprehensive
Net operating loss carryforwards		248.1	232.4
Accumulated other comprehensive loss		(1,167.3)	(1,271.2)
Common shareholders' equity		$2,576.2	$2,558.5

(6) The tables below summarize the financial impact of significant items on our net operating income for the quarters during the year ended December 31, 2025 that had significant items impacting our net operating income. There were no significant items on our net operating income during the three and six months ended June 30, 2026. Management believes that identifying the impact of these items enhances the understanding of our operating results (dollars in millions, except per share data).

	Three months ended
	September 30, 2025
	Actual results	Significant items		Excluding significant items
Insurance product margin
Annuity margin	$72.9	$(16.6)	(a)	$56.3
Health margin	157.0	(21.1)	(a)	135.9
Life margin	70.6	(3.6)	(a)	67.0
Total insurance product margin	300.5	(41.3)		259.2
Allocated expenses	(151.0)	-		(151.0)
Income from insurance products	149.5	(41.3)		108.2
Fee income	(3.9)	-		(3.9)
Investment income not allocated to product lines	39.5	-		39.5
Expenses not allocated to product lines	(22.3)	-		(22.3)
Operating earnings before taxes	162.8	(41.3)		121.5
Income tax (expense) benefit on operating income	(35.6)	9.1		(26.5)
Net operating income	$127.2	$(32.2)		$95.0
Net operating income per diluted share	$1.29	$(0.33)		$0.96

(a)Comprised of $41.3 million of the net favorable impact arising from our comprehensive annual actuarial review.

	Three months ended
	March 31, 2025
	Actual results	Significant items		Excluding significant items
Insurance product margin
Annuity margin	$54.5	$ -		$54.5
Health margin	126.2	-		126.2
Life margin	68.2	(6.8)	(a)	61.4
Total insurance product margin	248.9	(6.8)		242.1
Allocated expenses	(161.2)	-		(161.2)
Income from insurance products	87.7	(6.8)		80.9
Fee income	(0.8)	-		(0.8)
Investment income not allocated to product lines	38.0	-		38.0
Expenses not allocated to product lines	(20.3)	-		(20.3)
Operating earnings before taxes	104.6	(6.8)		97.8
Income tax (expense) benefit on operating income	(23.5)	1.5		(22.0)
Net operating income	$81.1	$(5.3)		$75.8
Net operating income per diluted share	$0.79	$(0.05)		$0.74

(a)Comprised of $6.8 million of the favorable impact of an out-of-period adjustment, which decreased reserves.

Contacts
CNO News Media
Valerie Dolenga
Valerie.Dolenga@CNOinc.com
CNO Investor Relations
Adam Auvil
Adam.Auvil@CNOinc.com