We would love to hear from you. Click on the ‘Contact Us’ link to the right and choose your favorite way to reach-out!

wscdsdc

media/speaking contact

Jamie Johnson

business contact

Victoria Peterson

Contact Us

855.ask.wink

Close [x]
pattern

Industry News

Categories

  • Industry Articles (21,155)
  • Industry Conferences (2)
  • Industry Job Openings (35)
  • Moore on the Market (414)
  • Negative Media (144)
  • Positive Media (73)
  • Sheryl's Articles (800)
  • Wink's Articles (353)
  • Wink's Inside Story (274)
  • Wink's Press Releases (123)
  • Blog Archives

  • March 2024
  • February 2024
  • January 2024
  • December 2023
  • November 2023
  • October 2023
  • September 2023
  • August 2023
  • July 2023
  • June 2023
  • May 2023
  • April 2023
  • March 2023
  • February 2023
  • January 2023
  • December 2022
  • November 2022
  • October 2022
  • September 2022
  • August 2022
  • July 2022
  • June 2022
  • May 2022
  • April 2022
  • March 2022
  • February 2022
  • January 2022
  • December 2021
  • November 2021
  • October 2021
  • September 2021
  • August 2021
  • July 2021
  • June 2021
  • May 2021
  • April 2021
  • March 2021
  • February 2021
  • January 2021
  • December 2020
  • November 2020
  • October 2020
  • September 2020
  • August 2020
  • July 2020
  • June 2020
  • May 2020
  • April 2020
  • March 2020
  • February 2020
  • January 2020
  • December 2019
  • November 2019
  • October 2019
  • September 2019
  • August 2019
  • July 2019
  • June 2019
  • May 2019
  • April 2019
  • March 2019
  • February 2019
  • January 2019
  • December 2018
  • November 2018
  • October 2018
  • September 2018
  • August 2018
  • July 2018
  • June 2018
  • May 2018
  • April 2018
  • March 2018
  • February 2018
  • January 2018
  • December 2017
  • November 2017
  • October 2017
  • September 2017
  • August 2017
  • July 2017
  • June 2017
  • May 2017
  • April 2017
  • March 2017
  • February 2017
  • January 2017
  • December 2016
  • November 2016
  • October 2016
  • September 2016
  • August 2016
  • July 2016
  • June 2016
  • May 2016
  • April 2016
  • March 2016
  • February 2016
  • January 2016
  • December 2015
  • November 2015
  • October 2015
  • September 2015
  • August 2015
  • July 2015
  • June 2015
  • May 2015
  • April 2015
  • March 2015
  • February 2015
  • January 2015
  • December 2014
  • November 2014
  • October 2014
  • September 2014
  • August 2014
  • July 2014
  • June 2014
  • May 2014
  • April 2014
  • March 2014
  • February 2014
  • January 2014
  • December 2013
  • November 2013
  • October 2013
  • September 2013
  • August 2013
  • July 2013
  • June 2013
  • May 2013
  • April 2013
  • March 2013
  • February 2013
  • January 2013
  • December 2012
  • November 2012
  • October 2012
  • September 2012
  • August 2012
  • July 2012
  • June 2012
  • May 2012
  • April 2012
  • March 2012
  • February 2012
  • January 2012
  • December 2011
  • November 2011
  • October 2011
  • September 2011
  • August 2011
  • July 2011
  • June 2011
  • May 2011
  • April 2011
  • March 2011
  • February 2011
  • January 2011
  • December 2010
  • November 2010
  • October 2010
  • September 2010
  • August 2010
  • July 2010
  • June 2010
  • May 2010
  • April 2010
  • March 2010
  • February 2010
  • January 2010
  • December 2009
  • November 2009
  • October 2009
  • August 2009
  • June 2009
  • May 2009
  • April 2009
  • March 2009
  • November 2008
  • September 2008
  • May 2008
  • February 2008
  • August 2006
  • ING U.S. Announces 1Q 2013 Results

    May 23, 2013 by PR Newswire Association LLC

    NEW YORK, May 23, 2013 /PRNewswire/ –ING U.S., Inc. (NYSE: VOYA) today reported first quarter 2013 operating earnings after income taxes[3] of$167 million, or$0.73 per share, compared to$156 million, or$0.68 per share, for first quarter 2012. First quarter 2013 net loss to the common shareholder was$212 million, or$0.92 per share, compared to a first quarter 2012 net loss to the common shareholder of$505 million, or$2.20 per share.

    “We continue to effectively execute the fundamental elements of our Retirement Readiness strategy and our Ongoing Business operating Return on Equity (ROE) improvement plan, which resulted in an increase in Ongoing Business operating earnings for the quarter. We are on track to hit our ROE targets for the year,” said Rodney O. Martin, Jr., Chairman and Chief Executive Officer, ING U.S. “In the first quarter, our leadership presence in all segments of the retirement market and our strong investment performance allowed us to win several key mandates and attract more assets under management in Retirement Solutions and Investment Management, with 76 percent of our pre-tax Ongoing Business adjusted operating earnings coming from those businesses. The Retirement segment and Investment Management segment achieved$1.4 billion and$3.2 billion in net flows, respectively. In Insurance Solutions, we continued our efforts to re-position our Individual Life business with a focus on less capital-intensive products and an expansion of our Employee Benefits business, which is less interest rate sensitive and aligns with our expertise in the institutional markets.”

    “Most importantly, we continue to make steady improvement in our ROE. Our annualized Ongoing Business adjusted operating ROE grew 120 basis points to 9.5% in the first quarter, largely driven by the reduction in the amount of capital allocated to the Ongoing Business, due to recapitalization initiatives, and improvement in operating earnings. Our goal continues to be steady improvement of approximately 110 basis points per year toward our 2016 target of 12% to 13%. Quarterly annualized results may be higher or lower than full-year actual results. We remain focused on profitable growth across our businesses while shifting to less capital-intensive, fee based products.”

    “In our Closed Block Variable Annuity segment, our hedging program met our objective of insulating regulatory capital from equity market movements. The equity markets were up approximately 10 percent in the first quarter, and as a result of accounting asymmetry between GAAP and statutory results, we experienced a net loss on a GAAP basis generally in line with expectations given market movements.”

    “Ultimately, the strong performance of equity markets benefits our business, our customers, and our other stakeholders. This is important to us as we help Americans become retirement ready by addressing their asset accumulation, asset protection, and asset distribution needs.”

    FIRST QUARTER 2013 SUMMARY

    Three months ended March 31,
    ($ in millions, except per share amounts) 2013 2012 Change
    Operating earnings before income taxes by segment
    Retirement $ 137.8 $ 123.9 11.2 %
    Annuities 54.3 36.4 49.2
    Investment Management 30.1 33.0 (8.8)
    Individual Life 50.8 55.0 (7.6)
    Employee Benefits 12.4 15.6 (20.5)
    Ongoing Business $ 285.4 $ 263.9 8.1
    Corporate (50.1) (48.4) NM
    Closed Blocks Institutional Spread Products and Other 21.4 24.3 (11.9)
    Total operating earnings before income taxes $ 256.7 $ 239.8 7.0
    Total operating earnings, after-tax1 $ 166.8 $ 155.9 7.0
    Closed Block Variable Annuity, after-tax1 (310.1) (590.0) NM
    Net investment gains (losses), after-tax1 27.2 39.2 (30.6)
    Other, after-tax (109.4) (125.9) NM
        Net income (loss) $ (225.5) $ (520.8) NM
    Net income (loss) attributable to noncontrolling interest (13.5) (15.6) NM
        Net income (loss) available to common shareholder $ (212.0) $ (505.2) NM
    Operating earnings per share  $ 0.73 $ 0.68 7.0
    Net income (loss) per share $ (0.92) $ (2.20) NM
    NM
    Weighted average shares outstanding (in millions) 230.0 230.0 0.0
    1.  Assumes 35% tax rate
    NM = Not Meaningful

     

     

     

    KEY FIRST QUARTER 2013 HIGHLIGHTS

    • Ongoing Business operating earnings before income taxes of $285 million; Ongoing Business pre-tax adjusted operating earnings (AOE)[4] of $278 million
    • Ongoing Business adjusted operating Return on Equity of 9.5% and Ongoing Business adjusted operating Return on Capital of 8.0%[5]
    • Retirement Solutions and Investment Management accounted for 76% of our pre-tax Ongoing Business adjusted operating earnings
    • Retirement net flows of $1.4 billion
    • Investment Management operating margin of 22.8%; net flows of $3.2 billion driven by an increase in Investment Management sourced net flows
    • Individual Life sales of $29 million, reflecting a shift to less capital-intensive products
    • Employee Benefits loss ratio for Group Life of 85.4% and loss ratio for Stop Loss of 77.6%, in line with expectations given seasonality in claim experience in the first quarter
    • Total assets under management of $258 billion and total assets under management and administration of $481 billion
    • Pro forma combined estimated risk based capital (RBC) ratio of 451% (pro forma for $1.4 billion of distributions made by our insurance subsidiaries on May 8th, 2013 in connection with IPO recapitalization initiatives), above our target of 425%
    • Pro forma debt to capital ratio (excluding AOCI) of 25-26% (pro forma for receipt of $600 million of gross primary proceeds in initial public offering and $750 million junior subordinated debt offering)
    • Pro forma book value per share (excluding AOCI) of $40.30 (pro forma for receipt of $600 million of gross primary proceeds in initial public offering)

    BUSINESS SEGMENT DISCUSSIONS

    The following discussions compare the first quarters of 2013 and 2012 unless otherwise noted.

    ONGOING BUSINESS – HIGHER FEE BASED MARGIN AND INVESTMENT SPREAD AND LOWER ADMINISTRATIVE EXPENSES

    Ongoing Business operating earnings before income taxes were $285 million, compared with $264 million over the same period last year. The results included certain items that affected the comparability of operating earnings before income taxes:

    • First quarter 2013 – DAC/VOBA and other intangible unlocking decreased expenses by $7 million.
    • First quarter 2012 – DAC/VOBA and other intangible unlocking increased expenses by $21 million; portfolio restructuring actions in 2012 led to a reduction in run-rate investment income with 1Q’12 higher by $43 million relative to 1Q’13.

    Excluding the effect of these items, pre-tax AOE was $278 million compared with $241 million a year ago. The following items primarily account for the variance:

    • Higher fee based margin ($13 million positive variance) on higher assets due to market appreciation and positive net flows;
    • Higher investment spread and other investment income ($21 million positive variance) driven primarily by slightly higher volume into fixed assets, higher prepayment income (mostly in Retirement and Individual Life), and reductions in crediting rates;
    • Lower administrative expenses ($22 million positive variance) as a result of focused management actions and a benefit of $13 million primarily related to a variable compensation accrual true-up;
    • Higher amortization of DAC/VOBA and other intangibles ($18 million negative variance); and
    • Slightly higher trail commissions ($1 million negative variance).

    RETIREMENT – POSITIVE NET FLOWS DRIVING HIGHER INVESTMENT SPREAD AND FEES

    Retirement operating earnings before income taxes were $138 million compared with $124 million in the same period last year. The results included certain items that affected the comparability of operating earnings before income taxes:

    • First quarter 2013 – DAC/VOBA and other intangible unlocking decreased expenses by $3 million.
    • First quarter of 2012 – DAC/VOBA and other intangible unlocking decreased expenses by $4 million; portfolio restructuring actions in 2012 led to a reduction in run-rate investment income with 1Q’12 higher by $20 million relative to 1Q’13.

    Excluding the effect of these items, pre-tax AOE was $135 million compared with $100 million a year ago. The following items primarily account for the variance:

    • Higher fee based margin ($7 million positive variance) on higher variable assets and recordkeeping change orders;
    • Higher investment spread and other investment income ($20 million positive variance) due to higher volume into fixed assets, higher prepayment income, and reductions in credited interest; and
    • Lower administrative expenses ($10 million positive variance) as a result of focused management actions and a favorable variable compensation accrual true-up.

    Retirement net flows were $1.4 billion compared to $0.6 billion in the year ago quarter. Deposits increased across all segments, and that included two large institutional wins. These flows can vary in size and timing from one quarter to the next and we do not expect the level of net flows achieved in 1Q’13 to continue every quarter. Retirement assets under management totaled $96 billion, up from $85 billion a year ago and $90 billion at the end of the fourth quarter of 2012.

    ANNUITIES – CONTINUED INVESTMENT SPREAD IMPROVEMENT

    Annuities operating earnings before income taxes were $54 million compared with $36 million a year ago. The results included certain items that affected operating earnings before income taxes:

    • First quarter 2013 – DAC/VOBA and other intangible unlocking decreased expenses by $7 million.
    • First quarter of 2012 – DAC/VOBA and other intangible unlocking increased expenses by $20 million; portfolio restructuring actions in 2012 led to a reduction in run-rate investment income with 1Q’12 higher by $8 million relative to 1Q’13.

    Excluding the effect of these items, pre-tax AOE was $47 million compared with $49 million a year ago. The following items account for the variance:

    • Higher investment spread and other investment income ($11 million positive variance) primarily driven by lower interest credited due to a large block of multi-year guarantee annuities (MYGA) reaching the end of the guarantee period during 2012. Most of this business had high crediting rates, and either lapsed or renewed at lower rates;
    • Higher net underwriting gain (loss) and other revenue ($4 million positive variance) primarily due to favorable mortality results on payout business;
    • Higher fee based margin ($2 million positive variance) due to higher mutual fund custodial assets;
    • Lower administrative expenses ($1 million positive variance); and
    • Higher amortization of DAC/VOBA and other intangibles ($19 million negative variance) on the higher gross profits noted above.

    Net flows were negative at $220 million, as lapses on existing fixed-rate annuity in-force policies, especially older products, exceeded new sales.

    Assets under management for the Annuities segment totaled $26 billion as of March 31, 2013, flat compared to the fourth quarter of 2012 of $26 billion and down from $28 billion a year ago, primarily due to the lapses on existing fixed rate annuity policies in 2012 mentioned above. Included in those totals were assets under management for our mutual fund custodial product (Select Advantage), which increased to $2.7 billion as of March 31, 2013, up from $2.0 billion a year ago and $2.4 billion in the fourth quarter of 2012.

    INVESTMENT MANAGEMENT – HIGHER FEE BASED MARGIN DRIVEN BY HIGHER AUM

    Investment Management operating earnings before income taxes were $30 million compared with $33 million a year ago. The following items primarily account for the variance:

    • Lower investment income ($3 million negative variance) primarily as a result of a $3 million gain in investment capital results compared to a $6 million gain in the year ago quarter;
    • Higher fee based margin ($4 million positive variance); and
    • Higher administrative expenses ($4 million negative variance). Administrative expenses, however, in the year ago quarter were helped by an accrual release of $6 million related to variable compensation.

    The operating margin was 22.8% compared with 25.3% a year ago and 21.9% in the fourth quarter of 2012. The decrease in operating margin compared to the prior year reflects the impact of the items above. The operating margin excluding investment capital results was 21.1% compared to 22.0% a year ago and 18.7% in the fourth quarter of 2012.

    Third-party[6] inflows remained strong at $6.8 billion compared with $7.7 billion a year ago. Net flows were $3.2 billion compared with $3.7 billion a year ago. Takeover inflows (assets replaced from an underperforming outside mutual fund sub-advisor) of $3.9 billion helped net flows in the year ago quarter while takeover inflows in the current quarter were $645 million. Third-party assets under management totaled $108 billion, up from $94 billion a year ago and $101 billion at the end of the fourth quarter of 2012. Positive net flows and market appreciation drove the increase in assets under management from the fourth quarter 2012.

    INDIVIDUAL LIFE – REDUCED EXPENSES IN LINE WITH DECISION TO LOWER SALES VOLUME

    Individual Life operating earnings before income taxes were $51 million compared with $55 million a year ago. The results included certain items that affected operating earnings before income taxes:

    • First quarter 2013 – DAC/VOBA and other intangible unlocking increased expenses by $3 million.
    • First quarter 2012 – DAC/VOBA and other intangible unlocking increased expenses by $4 million; portfolio restructuring actions in 2012 led to a reduction in run-rate investment income with 1Q’12 higher by $13 million relative to 1Q’13.

    Excluding the effect of these items, pre-tax AOE was $54 million compared with $47 million a year ago. The following items primarily account for the variance:

    • Lower administrative expenses ($11 million positive variance), primarily due to lower acquisition costs on lower sales volume;
    • Lower investment spread and other investment income ($3 million negative variance) primarily related to lower yields on fixed investments offsetting higher prepayment income; and
    • Lower net underwriting gain (loss) and other revenue ($3 million negative variance) as a result of mortality fluctuations.

    As intended, sales decreased to $29 million from $68 million a year ago as a result of deliberate pricing actions and product suspensions. We implemented several price increases throughout 2012 to address the lower interest rate environment. In addition, we ceased sales of 25-year and 30-year term products effective July 31, 2012 and no lapse guarantee universal life products effective December 31, 2012.

    EMPLOYEE BENEFITS – HIGHER MORTALITY CONSISTENT WITH FIRST QUARTER SEASONALITY

    Employee Benefits operating earnings before income taxes was $12 million compared with $16 million a year ago. The results included certain items that affected operating earnings before income taxes:

    • First quarter 2012 – Portfolio restructuring actions in 2012 led to a reduction in run-rate investment income with 1Q’12 higher by $3 million relative to 1Q’13.

    Excluding the effect of these items, pre-tax AOE remained flat at $12 million. The following items impacted the earnings:

    • Lower administrative expenses ($4 million positive variance) primarily due to a favorable variable compensation accrual true-up, offset by other items.

    The loss ratio for Group Life was 85.4% compared to a year ago at 82.8%. Group Life claim experience generally reflects some seasonality in the first quarter. The loss ratio for Stop Loss increased slightly to 77.6% compared to 76.2% a year ago. The loss ratio results for both Group Life and Stop Loss were within our expected range.

    Employee Benefits sales increased to $157 million from $155 million in the prior year quarter mainly driven by higher Group Life sales and offset by lower Stop Loss sales.

    CORPORATE

    Corporate operating loss before income taxes was $50 million in the first quarter of 2013 compared with a loss of $48 million in the first quarter of 2012. Contributing to the $2 million negative variance was higher interest expense due to replacing short-term and internal debt with longer-term external debt.

    CLOSED BLOCK INSTITUTIONAL SPREAD PRODUCTS AND CLOSED BLOCK OTHER

    Operating earnings before income taxes were $21 million compared with $24 million a year ago.

    Institutional Spread Products average assets under management decreased to $3.9 billion from $4.1 billion at the end of the fourth quarter of 2012 and $5.4 billion a year ago as we continue to run-off the block.

    CLOSED BLOCK VARIABLE ANNUITY

    Closed Block Variable Annuity loss before income taxes was $477 million compared with a loss of $908 million a year ago. The decrease in the loss was primarily due to lower losses in the fair value of guaranteed benefit derivatives related to nonperformance risk. The current period results included a loss before income taxes of $107 million due to changes in the fair value of guaranteed benefit derivatives related to nonperformance risk, compared to a loss before income taxes of $572 million in the prior period.

    The hedging program in the Closed Block Variable Annuity segment is primarily designed to protect regulatory reserves and rating agency capital from equity market movement, rather than mitigating U.S. GAAP earnings volatility. During the quarter, our guarantee and overlay equity hedge losses were approximately $1.0 billion[7], compared with a $1.1 billion equity related decline in statutory AG43 reserves in excess of reserves for cash surrender value. This resulted in an equity market statutory net gain in surplus of $0.1 billion on a regulatory basis.

    INVESTMENTS

    Other-than-temporary impairments on the investment portfolio were $11 million in the quarter. The net unrealized gain on available-for-sale fixed securities before income taxes decreased to $7.1 billion as of March 31, 2013 from $7.9 billion as of December 31, 2012. The $0.8 billion decrease in the net unrealized gain on available-for-sale fixed securities before income taxes is primarily attributable to an increase in US Treasury rates during the first quarter of 2013 impacting the valuation of US corporate bonds and US Treasury securities.

    CAPITAL

    As of March 31, 2013, the ING U.S. combined estimated risk-based capital ratio was 556% compared with 526% estimated as of December 31, 2012 and above our target of 425%. The 556% RBC ratio is prior to the $1.4 billion distributions made by our insurance subsidiaries on May 8, 2013 in connection with IPO recapitalization activities. Adjusted for these distributions, the pro forma March 31, 2013 combined estimated RBC ratio was 451%.

    Supplementary Financial Information

    More detailed financial information can be found in ING U.S.’s Quarterly Investor Supplement, which is available on ING U.S.’s investor relations website, investors.ing.us.

    Earnings Conference Call and Slide Presentation

    ING U.S. will host a conference call on Thursday, May 23, 2013 at 10:00 am EDT to discuss the Company’s first quarter 2013 results. The call and slide presentation can be accessed via the company’s investor relations website at investors.ing.us.

    A replay of the call will be available on the company’s investor relations website at investors.ing.us starting at 12:00 pm EDT on May 23.

    About ING U.S.

    ING U.S. (NYSE: VOYA), which plans to rebrand in the future as Voya Financial, is a leading provider of financial products and services, both at the workplace and through an expansive distribution network of financial professionals. ING U.S.’s mission is to guide Americans on their journey to greater retirement readiness and to make a secure financial future possible – one person, one family, and one institution at a time.

    ING U.S.’s vision is to be America’s Retirement Company. The ING U.S. Retirement Solutions, Investment Management and Insurance Solutions businesses reach approximately 13 million retail and institutional clients and customers with a comprehensive array of financial products and services, such as retirement plans, IRA rollovers and transfers, stable value, institutional investment management, mutual funds, alternative investments, life insurance, employee benefits, fixed and indexed annuities, and financial planning. ING U.S. has $481 billion in assets under management and administration as of March 31, 2013.

    Media Contact: Investor Contact:
    Dana Ripley

    212-309-8444

    Dana.Ripley@us.ing.com

    Darin Arita

    212-309-8999

    IR@us.ing.com

    Use of Non-GAAP Financial Measures

    Operating earnings before income taxes is an internal measure we use to evaluate segment performance. Operating earnings before income taxes does not replace net income (loss) as the GAAP measure of the consolidated results of operations and consists of operating revenues less operating benefits and expenses. Each segment’s operating earnings before income taxes is calculated by adjusting income (loss) before income taxes for the following items:

    • Net investment gains (losses), net of related amortization of DAC, VOBA, sales inducements and unearned revenue. Net investment gains (losses) include gains (losses) on the sale of securities, impairments, changes in the fair value of investments using the fair value option (“FVO”) unrelated to the implied loan-backed security income recognition for certain mortgage-backed obligations and changes in the fair value of derivative instruments, excluding realized gains (losses) associated with swap settlements and accrued interest;
    • Net guaranteed benefit hedging gains (losses), which include changes in the fair value of derivatives related to guaranteed benefits, net of related reserve increases (decreases) and net of related amortization of DAC, VOBA and sales inducements, less the estimated cost of these benefits. The estimated cost, which is reflected in operating results, reflects the expected cost of these benefits if markets perform in line with our long-term expectations and includes the cost of hedging. All other derivative and reserve changes related to guaranteed benefits are excluded from operating results, including the impacts related to changes in our nonperformance spread;
    • Income (loss) related to business exited through reinsurance or divestment;
    • Income (loss) attributable to noncontrolling interests;
    • Income (loss) related to early extinguishment of debt;
    • Impairment of goodwill, value of management contract rights and value of customer relationships acquired;
    • Immediate recognition of net actuarial gains (losses) related to our pension and other post-employment benefit obligations and gains (losses) from plan amendments and curtailments; and
    • Other items, including restructuring expenses (severance, lease write-offs, etc.), integration expenses related to our acquisition of CitiStreet and certain third-party expenses related to the anticipated divestment of us by ING Group.

    Adjusted operating earnings is also an internal measure we use to evaluate segment performance. This measure excludes from operating earnings the following items: (1) DAC/VOBA and other intangibles unlocking and (2) investment portfolio restructurings implemented in 2012. DAC/VOBA and other intangibles unlocking can be volatile, so excluding the effect of this can improve period to period comparability. The investment portfolio restructurings in 2012 reduced the run-rate level of investment income, and we believe that such effects are not reflective of the performance of our Ongoing Business.

    We focus on adjusted operating ROE and adjusted operating ROC as key financial metrics for our stakeholders because these metrics indicate how effectively we use our capital resources.

    In our Investment Management business we also focus on the operating margin excluding Investment Capital results. The results from Investment Capital can be volatile, so excluding the effect of this can improve period to period comparability.

    In addition to book value per share including accumulated other comprehensive income (AOCI), we look at book value per share excluding AOCI. Included in AOCI are investment portfolio unrealized gains or losses. In the ordinary course of business we do not plan to sell most investments for the sole purpose of realizing gains or losses, so book value per share excluding AOCI provides a metric consistent with that view.

    Our Closed Block Variable Annuity segment is managed to focus on protecting regulatory and rating agency capital rather than GAAP earnings and, therefore, its results of operations are not reflected within operating earnings before income taxes. When we present the adjustments to Income (loss) before income taxes on a consolidated basis, each adjustment excludes the relative portions attributable to our Closed Block Variable Annuity segment.

    The most directly comparable GAAP measure to operating earnings before income taxes is income (loss) before income taxes. For a reconciliation of operating earnings before income taxes to income (loss) before income taxes, see the tables that accompany this release and the Quarterly Investor Supplement.

    We analyze our Ongoing Business performance based on the sources of earnings. We believe this supplemental information is useful in order to gain a better understanding of our operating earnings (loss) before income taxes for the following reasons: (1) we analyze our business using this information and (2) this presentation can be helpful for investors to understand the main drivers of operating earnings (loss) before income taxes of our ongoing businesses. The sources of earnings are defined as such:

    • Investment spread and other investment income consists of net investment income and net realized investment gains (losses) associated with swap settlements and accrued interest, less interest credited to policyholder reserves.
    • Fee based margin consists primarily of fees earned on AUM, AUA, and transaction based recordkeeping fees.
    • Net underwriting gain (loss) and other revenue contains the following: the difference between fees charged for insurance risks and incurred benefits, including mortality, morbidity, and surrender results, contractual charges for universal life and annuity contracts, the change in the unearned revenue reserve for universal life contracts, and that portion of traditional life insurance premiums intended to cover expenses and profits. Certain contract charges for universal life insurance are not recognized in income immediately, but are deferred as unearned revenues and are amortized into income in a manner similar to the amortization of DAC.
    • Administrative expenses are general expenses, net of amounts capitalized as acquisition expenses and exclude commission expenses and fees on letters of credit.
    • Trail commissions are commissions paid that are not deferred and thus recorded directly to expense.
    • For a detail explanation of DAC/VOBA and other intangibles amortization/unlocking see “Unlocking of DAC/VOBA and other Contract Owner/Policyholder Intangibles” in our SEC filings.

    More details on these sources of earnings can be found in ING U.S.’s Quarterly Investor Supplement, which is available on ING U.S.’s investor relations website, investors.ing.us.

     

     

     

    ING U.S.
    Calculation and Reconciliation of Return on Equity and Return on Capital
    Three Months Ended Year ended
    ($ in millions, unless otherwise indicated) March 31, 2013 December 31, 2012
    GAAP Return on Equity
    Net income (loss) available to ING U.S., Inc.’s common shareholder $                      (212.0) $                    473.0
    ING U.S., Inc. shareholder’s equity: beginning of period 13,874.9 $               12,353.9
    ING U.S., Inc. shareholder’s equity: end of  period $                  13,391.1 $               13,874.9
    ING U.S., Inc. shareholder’s equity: average for period $                  13,633.0 $               13,114.4
    GAAP Return on Equity -6.2% 3.6%
    Ongoing Business Operating Return on Capital and Operating Return on Equity
    Pre-tax Ongoing Business adjusted operating earnings  (AOE) $                       278.1 $                 1,093.2
    Income Taxes on AOE (based on an assumed tax rate of 35%) (97.3) (382.7)
    Adjusted Ongoing Business operating earnings after income taxes 180.8 710.5
    Interest expense after tax (based on 5.5% pre-tax interest expense and 35% tax rate) (20.2) (88.7)
    Adjusted Ongoing Business operating earnings after income taxes and interest  $                       160.6 $                    621.7
    Beginning of Period Capital for Ongoing Business (1) $                    9,057.0 $               10,037.0
    End of Period Capital for Ongoing Business 9,012.0 9,823.0
    Average Capital for Ongoing Business 9,034.5 9,930.0
    Average Debt (based on 25% debt-to-capital ratio) (2,258.6) (2,482.5)
    Average Equity for Ongoing Business $                    6,775.9 $                 7,447.5
    Operating Return on Capital for Ongoing Business 8.0% 7.2%
    Operating Return on Equity for Ongoing Business 9.5% 8.3%

     

    ING U.S.
    Reconciliation of Adjusted Ongoing Business Operating Earnings to Net Income (Loss)
    Three Months Ended Year ended
    ($ in millions) March 31, 2013 December 31, 2012
    Adjusted pre-tax Ongoing Business operating earnings $                       278.1 $                 1,093.2
    DAC/VOBA and other intangible unlocking 7.3 (77.0)
    Impact of investment portfolio restructuring (25.3)
    Operating earnings before income taxes for Ongoing Business 285.4 990.9
    Corporate (50.1) (182.3)
    Closed Blocks Institutional Spread Products and Other 21.4 109.7
    Operating earnings before income taxes 256.7 918.3
    Income Taxes (based on an assumed tax rate of 35%) (89.9) (321.4)
    Operating earnings, after-tax 166.8 596.9
    Closed Block Variable Annuity, after-tax (310.1) (450.0)
    Net investment gains (losses), after-tax 27.2 296.1
    Other, after tax (95.9) 30.0
    Net income (loss) available to ING U.S., Inc.’s common shareholder (212.0) 473.0
    Net income (loss) attributable to noncontrolling interest (13.5) 138.2
    Net income (loss) $                      (225.5) $                    611.2

     

    ING U.S.
    Reconciliation of End of Period Capital for Ongoing Business to Shareholder’s Equity
    As of As of
    ($ in millions) March 31, 2013 December 31, 2012
    End of Period Capital for Ongoing Business $                    9,012.0 $                 9,823.0
    Closed Block Variable Annuity, Corporate, and Other Closed Blocks 4,633.6 4,149.5
    End of Period Capital  13,645.6 13,972.5
    Financial Leverage (2) (3,707.3) (3,808.3)
    ING U.S., Inc. shareholder’s equity excluding  AOCI end of period 9,938.3 10,164.2
    AOCI 3,452.8 3,710.7
    ING U.S., Inc. shareholder’s equity: end of  period $                  13,391.1 $               13,874.9
    (1) Beginning of period capital for 2013 does not agree with end of period capital for 2012 due to certain reallocations of capital 
        between ongoing and Closed Block VA due to recapitalization activity (completed and anticipated)
    As of As of
    ($ in millions) March 31, 2013 December 31, 2012
    (2)Reconciliation of Financial Leverage to Short-term and Long-term Debt
    Short-term Debt $                       321.2 $                 1,064.6
    Long-term Debt 3,440.8 3,171.1
    Total Debt 3,762.0 4,235.7
    Less operating leverage (329.1) (688.4)
    Plus loans from subsidiaries 274.4 261.0
    Financial Leverage $                    3,707.3 $                 3,808.3

     

    ING U.S.
    Reconciliation of Book Value Per Share
    As of March 31,
    2013
    Book value per share, including AOCI $                       58.22
    Per share impact of AOCI 15.01
    Book value per share, excluding AOCI $                       43.21

     

     

    ING U.S.
    Reconciliation of Investment Management Operating Margin
    Three Months Ended Three Months Ended
    ($ in millions, unless otherwise indicated) March 31, 2013 March 31, 2012
    Revenues $                       131.9 $                       130.6
    Expenses 101.8 97.6
    Operating earnings $                         30.1 $                         33.0
    Operating margin 22.8% 25.3%
    Revenues $                       131.9 $                       130.6
    Less:
    Investment Capital Results 2.8 5.4
    Revenues ex-Investment Capital 129.1 125.2
    Expenses 101.8 97.6
    Operating earnings excluding Investment Capital $                         27.3 $                         27.6
    Operating Margin ex-Investment Capital 21.1% 22.0%

     

     

    Forward-Looking and Other Cautionary Statements

    This press release contains forward-looking statements. Forward-looking statements include statements relating to future developments in our business or expectations for our future financial performance and any statement not involving a historical fact. Forward-looking statements use words such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “plan,” and other words and terms of similar meaning in connection with a discussion of future operating or financial performance. Actual results, performance or events may differ materially from those projected in any forward-looking statement due to, among other things, (i) general economic conditions, particularly economic conditions in our core markets, (ii) performance of financial markets, including emerging markets, (iii) the frequency and severity of insured loss events, (iv) mortality and morbidity levels, (v) persistency and lapse levels, (vi) interest rates, (vii) currency exchange rates, (viii) general competitive factors, (ix) changes in laws and regulations and (x) changes in the policies of governments and/or regulatory authorities. Factors that may cause actual results to differ from those in any forward-looking statement also include those described under “Risk Factors,” and “Management’s Discussion and Analysis of Results of Operations and Financial Condition—Trends and Uncertainties” in our Form 10-Q, and under “Risk Factors,” “Management’s Discussion and Analysis of Results of Operations and Financial Condition—Trends and Uncertainties” and “Business—Closed Blocks—Closed Block Variable Annuity” in our Form S-1 Registration Statement (file no. 333-184847), both filed or to be filed with the Securities and Exchange Commission.

    [1] Operating earnings before income taxes is a non-GAAP financial measure; information regarding the non-GAAP financial measures included in this press release and the reconciliation of them to GAAP measures is provided in the tables that accompany this release and the Quarterly Investor Supplement.

    [2] The calculation of the adjusted operating ROE of our Ongoing Business is provided in the tables that accompany this release.

    [3] We assume a 35% tax rate on items described as “after tax.” Net income (loss) available to the common shareholder reflects the actual effective tax rate.

    [4] Pre-tax adjusted operating earnings exclude deferred acquisition costs (DAC), Value of Business Acquired (VOBA), and other intangible unlocking and the impact of portfolio restructuring in 2012.

    [5] The calculation of Ongoing Business Operating Return on Capital is provided in the tables that accompany this release.

    [6] Excludes general account assets of our insurance company subsidiaries.

    [7] The hedge and reserve change relate to INGUSA, our Iowa domiciled insurance subsidiary.

     

    SOURCE ING U.S., Inc.

    Originally Posted at InsuranceNewsNet on May 23, 2013 by PR Newswire Association LLC.

    Categories: Industry Articles
    currency