TABLE OF CONTENTS
Preface:
The following information should be read in conjunction with the financial information of the Company, which has been filed with the Securities and Exchange Commission. All financial information herein is calculated in accordance with generally accepted accounting principles unless otherwise noted.
All amounts included herein are unaudited. Certain total amounts herein cannot be recalculated due to rounding.
Wall Street Analyst Coverage Data | 2 | |||
Corporate Offices, Principal Subsidiaries and Ratings | 3 | |||
Summary Financial Information | 4-5 | |||
Consolidated Results | ||||
Exhibit 1 | Consolidated Income Statement Data | 6 | ||
Protection Products Segment | ||||
Exhibit 2 | Protection Products Segment Description | 7 | ||
Exhibit 3 | Protection Income Statement Data | 8 | ||
Exhibit 4A | Group Pension Data | 9 | ||
Exhibit 4B | Closed Block Data | 10 | ||
Exhibit 4C | Fixed Maturities by Credit Quality—Closed Block | 11 | ||
Exhibit 5 | Premiums and Inforce | 12 | ||
Exhibit 6 | GAAP Premiums and Deposits | 13 | ||
Accumulation Products Segment | ||||
Exhibit 7 | Accumulation Products Segment Description | 14 | ||
Exhibit 8 | Accumulation Income Statement Data | 15 | ||
Exhibit 9 | Accumulation Assets Under Management | 16 | ||
Retail Brokerage and Investment Banking | ||||
Exhibit 10 | Retail Brokerage and Investment Banking Segment Description | 17 | ||
Exhibit 11 | Retail Brokerage and Investment Banking Income Statement Data | 18 | ||
Exhibit 12 | Income Statement Detail and Advest Data | 19 | ||
Other Product /Reconciling Segment | ||||
Exhibit 13 | Other/Reconciling Products Segment Description | 20 | ||
Exhibit 14 | Other/Reconciling Income Statement Data | 21 | ||
Investments | ||||
Exhibit 15 | Investments | 22 | ||
Exhibit 16 | Invested Assets | 23 | ||
Exhibit 17 | Investment Results | 24 | ||
Exhibit 18A | Fixed Maturities by Credit Quality | 25 | ||
Exhibit 18B | Fixed Maturities by Industry | 26 | ||
Exhibit 18C | Venture Capital Partnership Investments | 27 | ||
Exhibit 19 | Mortgages at Carrying Value | 28 | ||
Exhibit 20A | Equity Real Estate | 29 | ||
Exhibit 20B | Mortgages and Real Estate | 30 |
WALL STREET ANALYST COVERAGE DATA
Brokerage | Analyst | Telephone | ||
Credit Suisse First Boston | Thomas Gallagher | (212) 538-2010 | ||
Deutsche Bank Securities Inc. | Vanessa Wilson | (212) 469-7351 | ||
Dowling & Partners Securities, LLC | Len Savage | (203) 359-8860 | ||
Fox-Pitt, Kelton Inc. | Jonathan Joseph | (212) 687-8600 | ||
Goldman Sachs | Joan Zief | (212) 902-6778 | ||
Keefe, Bruyette & Woods, Inc. | Jukka Lipponen | (860) 722-5902 | ||
Langen McAlenney | Robert Glasspiegel | (860) 724-1203 | ||
Lehman Brothers Inc. | E. Stewart Johnson | (212) 526-8190 | ||
Putnam Lovell NBF Securities Inc. | Al Capra | (212) 546-7640 |
Investor Information Line
Contact: Jay Davis
Tel (212) 708-2917
E-mail jdavis@mony.com
Visit our internet site at www.mony.com
2
CORPORATE OFFICES, PRINCIPAL SUBSIDIARIES
MONY Life Insurance Company 1740 Broadway New York, NY 10019 | MONY Securities Corporation 1740 Broadway New York, NY 10019 | |
MONY Life Insurance Company of America 1740 Broadway New York, NY 10019 | Trusted Securites Advisors Corp. 7760 France Avenue South, Suite 420 Minneapolis, MN 55435 | |
U.S. Financial Life Insurance Company 10290 Alliance Road Cincinnati, OH 45242 | The Advest Group, Inc. 90 State House Square Hartford, CT 06103 | |
Enterprise Capital Management, Inc. 3343 Peachtree Road, NE, Suite 450 Atlanta, GA 30326 | Matrix Capital Markets Group Inc. 11 South 12th Street Suite 325 Richmond, VA 23219 |
CORPORATE RATINGS
CLAIMS PAYING ABILITY/ FINANCIAL STRENGTH RATINGS (1) | SENIOR DEBT RATINGS (2) | |
Standard | Standard | |
& Poors | & Poors | |
A+ | BBB+ | |
A.M. | A.M. | |
Best (3) | Best | |
A | bbb+ | |
Moody’s | Moody’s | |
A2 | Baa2 | |
Fitch | Fitch | |
A+ | BBB+ |
(1) | MONY Life Insurance Company and MONY Life Insurance Company of America |
(2) | The MONY Group Inc. |
(3) | MONY Life Insurance Company, MONY Life Insurance Company of America, and |
U.S. | Financial Life Insurance Company |
3
(Unaudited)
SUMMARY FINANCIAL INFORMATION
Three-Months Ended June 30, | Six-Months Ended June 30, | |||||||||||||||
2003 | 2002 | 2003 | 2002 | |||||||||||||
($ millions, except per share amounts) | ||||||||||||||||
CONSOLIDATED INCOME STATEMENT DATA: | ||||||||||||||||
Net Income/(Loss) | $ | 20.7 | $ | (11.0 | ) | $ | 28.3 | $ | 3.3 | |||||||
Net realized (gains)/losses from investments | (10.6 | ) | 15.5 | (20.0 | ) | 16.3 | ||||||||||
Adjusted operating income including net results from venture capital investments: | 10.1 | 4.5 | 8.3 | 19.6 | ||||||||||||
Net (income)/loss from venture capital investments | (6.8 | ) | 3.0 | (1.6 | ) | (0.2 | ) | |||||||||
Adjusted operating income (1)(2)(3): | $ | 3.3 | $ | 7.5 | $ | 6.7 | $ | 19.4 | ||||||||
PER SHARE CALCULATIONS: | ||||||||||||||||
NET INCOME/(LOSS) PER SHARE: | ||||||||||||||||
Basic | $ | 0.43 | $ | (0.23 | ) | $ | 0.60 | $ | 0.07 | |||||||
Diluted | $ | 0.43 | $ | (0.23 | ) | $ | 0.60 | $ | 0.07 | |||||||
ADJUSTED OPERATING INCOME INCLUDING NET RESULTS FROM VENTURE CAPITAL INVESTMENTS: | ||||||||||||||||
Basic | $ | 0.22 | $ | 0.09 | $ | 0.17 | $ | 0.41 | ||||||||
Diluted | $ | 0.21 | $ | 0.09 | $ | 0.17 | $ | 0.40 | ||||||||
ADJUSTED OPERATING INCOME(1)(2)(3): | ||||||||||||||||
Basic | $ | 0.07 | $ | 0.15 | $ | 0.14 | $ | 0.40 | ||||||||
Diluted | $ | 0.07 | $ | 0.15 | $ | 0.14 | $ | 0.39 | ||||||||
Share Data | ||||||||||||||||
Weighted-average shares outstanding used in basic per share calculations | 46,961,194 | 47,994,628 | 46,961,194 | 48,003,420 | ||||||||||||
Plus: Incremental shares from assumed conversion of dilutive securities (4) | 405,988 | — | 76,787 | 1,667,333 | ||||||||||||
Weighted-average shares used in diluted per share calculations | 47,367,182 | 47,994,628 | 47,037,981 | 49,670,753 | ||||||||||||
OTHER DATA: | ||||||||||||||||
Employee count | 3,197 | 3,527 | ||||||||||||||
Career agent count (Domestic and International) | 1,597 | 1,659 | ||||||||||||||
US Financial Life Brokerage General Agencies | 221 | 222 | ||||||||||||||
Trusted Advisors Registered Representatives | 482 | 494 | ||||||||||||||
Active Enterprise Selling Agreements | 400 | 424 | ||||||||||||||
Advest Financial Advisors | 595 | 522 |
(1) | In addition to reporting and measuring the company’s results of operations based on net income/(loss) as determined in accordance with generally accepted accounting principles (GAAP), the company also reports what it refers to as “adjusted operating income/(loss)”, which, while derived from our results in accordance with GAAP, represents a non-GAAP financial measure. The company defines “adjusted operating income/(loss)” as net income/(loss) determined in accordance with GAAP excluding after–tax net realized gains/(losses) and the net after-tax results from venture capital investments. These items will fluctuate from period to period depending on the prevailing interest rate and economic environment, and are not necessarily indicative of the overall operating trends in our core operations. The company also reports “adjusted operating income including the net after-tax results from venture capital investments” which is also a non-GAAP financial measure. Both the company and the many users of its financial information use these non-GAAP financial measures to evaluate the company’s operating performance. |
(2) | The adjusted operating income for the six-months ended June 30, 2003 includes a gain from an insurance settlement from the events of September 11, 2001 of $2.6 million or $0.05 per share. |
(3) | The adjusted operating income for the three and six-months ended June 30, 2002 includes interest and litigation fees of $4.5 million or $0.10 per and $0.09 per share, respectively. |
(4) | 1,597,371 incremental shares from assumed conversion of dilutive securities were not included in the computation of per share amounts for the three-months ended June 30, 2002, because to do so would be antidilutive. |
4
(Unaudited)
SUMMARY FINANCIAL INFORMATION—CONTINUED
June 30, 2003 | December 31, 2002 | |||||||
($ millions) | ||||||||
CONSOLIDATED BALANCE SHEET DATA | ||||||||
Invested assets (including cash and cash equivalents) | $ | 13,264.6 | $ | 12,745.4 | ||||
Separate accounts assets | 4,414.8 | 4,140.6 | ||||||
Other assets | 2,923.1 | 2,990.4 | ||||||
Total Assets | $ | 20,602.5 | $ | 19,876.4 | ||||
Policyholders’ liabilities | $ | 11,246.1 | $ | 11,018.8 | ||||
Separate account liabilities | 4,411.8 | 4,137.6 | ||||||
Short term debt | 7.0 | 7.0 | ||||||
Long term debt | 876.3 | 876.3 | ||||||
Other liabilities | 2,026.3 | 1,838.2 | ||||||
Total Liabilities | 18,567.5 | 17,877.9 | ||||||
Equity, excluding accumulated comprehensive income | 1,968.6 | 1,938.6 | ||||||
Accumulated comprehensive income (ACI) | 66.4 | 59.9 | ||||||
Total Shareholders’ Equity | 2,035.0 | 1,998.5 | ||||||
Total Liabilities and Shareholders’ Equity | $ | 20,602.5 | $ | 19,876.4 | ||||
SHARE DATA: | ||||||||
Diluted book value per share | $ | 42.61 | $ | 42.54 | ||||
Diluted book value per share (excluding accumulated comprehensive income) | $ | 41.21 | $ | 41.26 | ||||
CAPITALIZATION: | ||||||||
Long term debt | $ | 876.3 | $ | 876.3 | ||||
Shareholders’ Equity (Excluding ACI) | 1,968.6 | 1,938.6 | ||||||
Total capitalization | $ | 2,844.9 | $ | 2,814.9 | ||||
Debt as Percent of Total Capitalization | 30.8 | % | 31.1 | % | ||||
STATUTORY DATA (1): | ||||||||
Capital and Surplus | $ | 871.7 | $ | 906.4 | ||||
Asset Valuation Reserve (AVR) | 231.4 | 211.7 | ||||||
Total Capital and Surplus plus AVR | $ | 1,103.1 | $ | 1,118.1 | ||||
(1) | The statutory data presented above represents that of MONY Life, the principal insurance company subsidiary of MONY Group and direct or indirect parent of all of MONY Group’s insurance subsidiaries. The sufficiency of MONY Life’s statutory capital and surplus is a significant factor in determining its and its subsidiaries claims paying ability ratings. Refer to page 3 herein for MONY Life’s claims paying ability ratings, as well as those of its insurance subsidiaries. Statutory basis surplus is computed on the basis of Statutory Accounting Practices, which are those accounting principles or practices prescribed or permitted by an insurer’s domiciliary state. Statutory Accounting Practices are set forth in the insurance laws, regulations and administrative rulings of each state, publications of the National Association of Insurance Commissioners and other documents. The objectives of Statutory Accounting Practices differ from Generally Accepted Accounting Principles. Statutory Accounting Practices are designed to address the concerns of regulators. Generally Accepted Accounting Principles are designed to meet the varying needs of different users of financial statements. Statutory Accounting Practices are generally considered to be more conservative than Generally Accepted Accounting Principles and attempt to determine at the financial statement date an insurer’s ability to pay claims in the future. Generally Accepted Accounting Principles, on the other hand, stress measurement of earnings of a business from period to period, by matching revenues and expenses. |
5
Exhibit 1
(Unaudited)
CONSOLIDATED INCOME STATEMENT DATA (1)
Three-Months Ended June 30, | Six-Months Ended June 30, | |||||||||||||
2003 | 2002 | 2003 | 2002 | |||||||||||
($ millions) | ($ millions) | |||||||||||||
REVENUES: | ||||||||||||||
Premiums | $ | 173.8 | $ | 169.9 | $ | 340.6 | $ | 334.3 | ||||||
Universal life and investment-type product policy fees | 54.5 | 52.5 | 107.5 | 101.5 | ||||||||||
Net investment income | 201.1 | 178.8 | 376.2 | 366.2 | ||||||||||
Net realized gains/(losses) on investments | 15.0 | (25.5 | ) | 31.6 | (27.9 | ) | ||||||||
Group Pension Profits | — | 7.5 | — | 15.2 | ||||||||||
Retail brokerage and investment banking revenues | 108.9 | 100.7 | 203.5 | 193.8 | ||||||||||
Other income | 51.2 | 29.3 | 88.2 | 67.5 | ||||||||||
604.5 | 513.2 | 1,147.6 | 1,050.6 | |||||||||||
BENEFITS AND EXPENSES: | ||||||||||||||
Benefits to policyholders | 211.2 | 199.5 | 407.5 | 390.2 | ||||||||||
Interest credited to policyholders account balances | 34.0 | 27.9 | 67.9 | 55.8 | ||||||||||
Amortization of deferred policy acquisition costs | 28.8 | 38.0 | 59.8 | 70.8 | ||||||||||
Dividends to policyholders | 60.4 | 56.8 | 122.3 | 118.3 | ||||||||||
Other operating costs and expenses | 243.0 | 207.1 | 456.2 | 410.5 | ||||||||||
577.4 | 529.3 | 1,113.7 | 1,045.6 | |||||||||||
Income/(loss) from continuing operations before income tax | 27.1 | (16.1 | ) | 33.9 | 5.0 | |||||||||
Income tax expense/(benefit) | 8.1 | (5.1 | ) | 9.6 | 1.7 | |||||||||
Net income/(loss) from continuing operations | 19.0 | (11.0 | ) | 24.3 | 3.3 | |||||||||
Discontinued operations: Income from real estate to be disposed of, net of income tax expense of $0.9 million and 2.1 million, respectively | 1.7 | — | 4.0 | — | ||||||||||
Net income/(loss) | $ | 20.7 | $ | (11.0 | ) | $ | 28.3 | $ | 3.3 | |||||
(1) | These income statements present the consolidated results of operations of the Company for the periods indicated as will be reported on the Company's filings with the Securities and Exchange Commission. |
6
Exhibit 2
PROTECTION PRODUCTS SEGMENT
The “Protection Products” segment represents a wide range of individual life insurance products, including whole life, term life, universal life, variable universal life, last survivor variable life and group universal life. Also included in the Protection Products segment are the: (i) assets and liabilities transferred pursuant to the Group Pension Transaction, as well as the Group Pension Profits, in 2001, (ii) the Closed Block assets and liabilities, as well as the contribution from the Closed Block, and (iii) the Company’s disability income insurance business which was transferred in the DI Transaction.
7
Exhibit 3
(Unaudited)
PROTECTION PRODUCTS SEGMENT
INCOME STATEMENT DATA
Three-Months Ended June 30, | Six-Months Ended June 30, | |||||||||||||||
2003 | 2002 | 2003 | 2002 | |||||||||||||
($ millions) | ($ millions) | |||||||||||||||
REVENUES: | ||||||||||||||||
Premiums | $ | 164.7 | $ | 164.5 | $ | 325.5 | $ | 324.9 | ||||||||
Universal life and investment-type product policy fees | 44.0 | 39.8 | 86.4 | 75.5 | ||||||||||||
Net investment income | 162.3 | 145.4 | 305.2 | 299.1 | ||||||||||||
Group Pension Profits | — | 7.5 | — | 15.2 | ||||||||||||
Other income | 17.3 | (2.6 | ) | 19.4 | 3.2 | |||||||||||
Total revenues | 388.3 | 354.6 | 736.5 | 717.9 | ||||||||||||
BENEFITS AND EXPENSES: | ||||||||||||||||
Benefits to policyholders | 195.2 | 183.5 | 374.7 | 359.5 | ||||||||||||
Interest credited to policyholder account balances | 17.9 | 15.0 | 36.1 | 30.4 | ||||||||||||
Amortization of deferred policy acquisition costs | 28.0 | 30.2 | 55.6 | 57.1 | ||||||||||||
Dividends to policyholders | 59.7 | 56.2 | 121.2 | 117.1 | ||||||||||||
Other operating costs and expenses | 76.7 | 53.3 | 133.1 | 109.9 | ||||||||||||
Total benefits and expenses | 377.5 | 338.2 | 720.7 | 674.0 | ||||||||||||
Pre-tax income from continuing operations excluding net realized gains/(losses) on investments | 10.8 | 16.4 | 15.8 | 43.9 | ||||||||||||
Net realized gains/(losses) on investments | 10.7 | (16.6 | ) | 18.2 | (18.6 | ) | ||||||||||
Pre-tax income/(loss) from continuing operations | 21.5 | (0.2 | ) | 34.0 | 25.3 | |||||||||||
Discontinued operations—pre-tax | 2.2 | — | 5.2 | — | ||||||||||||
Pre-tax income/loss | $ | 23.7 | $ | (0.2 | ) | $ | 39.2 | $ | 25.3 | |||||||
RECONCILIATION OF “PRE-TAX INCOME FROM CONTINUING OPERATIONS EXCLUDING NET REALIZED GAINS/(LOSSES) ON INVESTMENTS” TO “ADJUSTED OPERATING INCOME INCLUDING NET RESULTS FROM VENTURE CAPITAL INVESTMENTS” | ||||||||||||||||
Pre-tax income from continuing operations excluding net realized gains/(losses) on investments | $ | 10.8 | $ | 16.4 | $ | 15.8 | $ | 43.9 | ||||||||
Change in policyholder dividend liability resulting from closed block realized gains/(losses) | 1.0 | (1.8 | ) | 6.6 | (2.9 | ) | ||||||||||
Pre-tax adjusted operating income including net results of venture capital investments | $ | 11.8 | $ | 14.6 | $ | 22.4 | $ | 41.0 | ||||||||
| ||||||||||||||||
Three-Months June 30, | Six-Months Ended June 30, | |||||||||||||||
2003 | 2002 | 2003 | 2002 | |||||||||||||
($ millions) | ($ millions) | |||||||||||||||
Pre-tax adjusted operating income including net results of venture capital investments | $ | 11.8 | $ | 14.6 | $ | 22.4 | $ | 41.0 | ||||||||
Net (gains)/loss from venture capital investments | (6.4 | ) | 3.6 | (1.5 | ) | (0.3 | ) | |||||||||
Pre-tax adjusted operating income (1) | $ | 5.4 | $ | 18.2 | $ | 20.9 | $ | 40.7 | ||||||||
(1) | The pre-tax adjusted operating income for the three and six-months ended June 30, 2002 includes interest and litigation fees of $5.5 million. |
8
Exhibit 4A
(Unaudited)
GROUP PENSION PROFIT
SUMMARY INCOME STATEMENT
Three-Months Ended June 30, | Six-Months Ended June 30, | |||||||||||
INCOME STATEMENT DATA (1): | 2003 | 2002 | 2003 | 2002 | ||||||||
($ millions) | ($ millions) | |||||||||||
REVENUES: | ||||||||||||
Policy product fees | $ | — | $ | 4.6 | $ | — | $ | 9.3 | ||||
Net investment income | — | 22.6 | — | 45.8 | ||||||||
Net realized gains on investments | — | 0.3 | — | 0.1 | ||||||||
Total revenues | — | 27.5 | — | 55.2 | ||||||||
BENEFITS AND EXPENSES: | ||||||||||||
Interest credited to policyholder account balances | — | 16.6 | — | 32.4 | ||||||||
Other operating costs and expenses | — | 3.4 | — | 7.6 | ||||||||
Total benefits and expenses | — | 20.0 | — | 40.0 | ||||||||
Group Pension Profits | $ | — | $ | 7.5 | $ | — | $ | 15.2 | ||||
(1) | As explained in the notes to MONY Group’s consolidated financial statements included in its 2002 Form 10K, in accordance with GAAP, the Group Pension Transaction did not constitute a sale because the Company retained substantially all the risks and rewards associated with the business transferred to Aegon. Accordingly, over the life of the transaction the Company was required to reflect the transferred assets and liabilities on its balance sheet under separate captions entitled “Assets transferred in Group Pension Transaction” and “Liabilities transferred in Group Pension Transaction”. As a result of the expiration of the transaction at December 31, 2002 and the recognition of earnings from the Final Value Payment from Aegon, the Company has no further interest in the transferred assets and liabilities and, accordingly, such assets and liabilities are no longer reflected on its balance sheet. In addition, the Company has no interest in the revenues and expenses from such business subsequent to December 31, 2002. |
Refer to the notes to MONY Group’s consolidated financial statements filed with the SEC on Form 10-K for the year ended December 31, 2002 for further information.
9
Exhibit 4B
(Unaudited)
CLOSED BLOCK INCOME STATEMENT
Three-Months Ended June 30, | Six-Months Ended June 30, | |||||||||||||
2003 | 2002 | 2003 | 2002 | |||||||||||
($ millions) | ($ millions) | |||||||||||||
REVENUES: | ||||||||||||||
Premiums | $ | 119.4 | $ | 127.6 | $ | 232.6 | $ | 248.0 | ||||||
Net investment income | 104.1 | 98.5 | 203.0 | 196.7 | ||||||||||
Net realized gains/(losses) on investments | 1.0 | (1.8 | ) | 6.6 | (2.9 | ) | ||||||||
Other income | 0.3 | 0.5 | 0.7 | 0.9 | ||||||||||
Total revenues | 224.8 | 224.8 | 442.9 | 442.7 | ||||||||||
BENEFITS AND EXPENSES: | ||||||||||||||
Benefits to policyholders | 140.0 | 142.7 | 271.6 | 274.8 | ||||||||||
Interest credited to policyholders account balances | 2.1 | 2.1 | 4.5 | 4.2 | ||||||||||
Amortization of deferred policy acquisition costs | 12.0 | 12.5 | 20.8 | 24.2 | ||||||||||
Dividends to policyholders | 59.3 | 56.0 | 120.0 | 116.2 | ||||||||||
Operating costs and expenses | 1.3 | 2.0 | 2.7 | 3.1 | ||||||||||
Total benefits and expenses | 214.7 | 215.3 | 419.6 | 422.5 | ||||||||||
Contribution from the Closed Block | $ | 10.1 | $ | 9.5 | $ | 23.3 | $ | 20.2 | ||||||
CLOSED BLOCK ASSETS AND LIABILITIES
June 30, 2003 | December 31, 2002 | |||||
($ millions) | ||||||
BALANCE SHEET DATA: | ||||||
Assets: | ||||||
General Account | ||||||
Fixed maturities | $ | 4,370.7 | $ | 4,160.9 | ||
Mortgage loans on real estate | 601.7 | 633.6 | ||||
Real estate to be disposed of | 10.4 | 8.3 | ||||
Amounts due from broker | 10.0 | 0.9 | ||||
Policy loans | 1,100.1 | 1,119.0 | ||||
Cash and cash equivalents | 38.4 | 59.2 | ||||
Premiums receivable | 7.8 | 11.1 | ||||
Deferred policy acquisition costs | 382.9 | 430.5 | ||||
Other assets | 209.3 | 210.5 | ||||
Total closed block assets | $ | 6,731.3 | $ | 6,634.0 | ||
Liabilities: | ||||||
General Account | ||||||
Future policy benefits | $ | 6,905.7 | $ | 6,901.4 | ||
Policyholders’ account balances | 290.1 | 291.6 | ||||
Other policyholders’ liabilities | 142.0 | 159.1 | ||||
Other liabilities | 444.9 | 328.0 | ||||
Total closed block liabilities | $ | 7,782.7 | $ | 7,680.1 | ||
10
Exhibit 4C
(Unaudited)
FIXED MATURITIES BY CREDIT QUALITY—CLOSED BLOCK
PUBLIC FIXED MATURITIES BY CREDIT QUALITY
As of June 30, 2003 | As of December 31, 2002 | |||||||||||||||||||
NAIC | Rating Agency Equivalent Designation | Amortized Cost | % of Total | Estimated Fair Value | Amortized Cost | % of Total | Estimated Fair Value | |||||||||||||
($ millions) | ($ millions) | |||||||||||||||||||
1 | Aaa/Aa/A | $ | 1,925.1 | 77.1 | % | $ | 2,113.2 | $ | 1,626.7 | 73.6 | % | $ | 1,771.1 | |||||||
2 | Baa | 453.4 | 18.1 | % | 496.9 | 464.5 | 20.3 | % | 489.7 | |||||||||||
3 | Ba | 83.6 | 3.2 | % | 87.0 | 100.4 | 4.1 | % | 99.8 | |||||||||||
4 | B | 27.5 | 1.2 | % | 31.7 | 41.0 | 1.7 | % | 40.5 | |||||||||||
5 | Caa and lower | 7.1 | 0.4 | % | 10.1 | 6.0 | 0.3 | % | 6.0 | |||||||||||
6 | In or near default | — | 0.0 | % | — | — | 0.0 | % | — | |||||||||||
Subtotal | 2,496.7 | 100.0 | % | 2,738.9 | 2,238.6 | 100.0 | % | 2,407.1 | ||||||||||||
Redeemable preferred stock | — | 0.0 | % | — | — | 0.0 | % | — | ||||||||||||
Total Public Fixed | ||||||||||||||||||||
Maturities | $ | 2,496.7 | 100.0 | % | $ | 2,738.9 | $ | 2,238.6 | 100.0 | % | $ | 2,407.1 | ||||||||
PRIVATE FIXED MATURITIES BY CREDIT QUALITY
As of June 30, 2003 | As of December 31, 2002 | |||||||||||||||||||
NAIC Rating | Rating Agency Equivalent Designation | | Amortized Cost | % of Total | | | Estimated Fair Value | | Amortized Cost | % of Total | | | Estimated Fair Value | |||||||
($ millions) | ($ millions) | |||||||||||||||||||
1 | Aaa/Aa/A | $ | 461.1 | 31.8 | % | $ | 518.9 | $ | 658.9 | 40.8 | % | $ | 716.2 | |||||||
2 | Baa | 774.9 | 51.6 | % | 842.6 | 707.7 | 44.0 | % | 772.5 | |||||||||||
3 | Ba | 168.6 | 10.8 | % | 176.5 | 179.7 | 10.5 | % | 183.4 | |||||||||||
4 | B | 33.0 | 2.2 | % | 35.5 | 49.3 | 2.5 | % | 44.7 | |||||||||||
5 | Caa and lower | 31.2 | 2.0 | % | 32.1 | 16.3 | 0.9 | % | 15.0 | |||||||||||
6 | In or near default | 22.7 | 1.6 | % | 26.2 | 22.7 | 1.3 | % | 22.0 | |||||||||||
Subtotal | 1,491.5 | 100.0 | % | 1,631.8 | 1,634.6 | 100.0 | % | 1,753.8 | ||||||||||||
Redeemable preferred stock | — | 0.0 | % | — | — | 0.0 | % | — | ||||||||||||
Total Private Fixed | ||||||||||||||||||||
Maturities | $ | 1,491.5 | 100.0 | % | $ | 1,631.8 | $ | 1,634.6 | 100.0 | % | $ | 1,753.8 | ||||||||
TOTAL FIXED MATURITIES BY CREDIT QUALITY
As of June 30, 2003 | As of December 31, 2002 | |||||||||||||||||||
NAIC | Rating Agency Equivalent Designation | Amortized Cost | % of Total | Estimated Fair Value | Amortized Cost | % of Total | Estimated Fair Value | |||||||||||||
($ millions) | ($ millions) | |||||||||||||||||||
1 | Aaa/Aa/A | $ | 2,386.3 | 60.2 | % | $ | 2,632.1 | $ | 2,285.6 | 59.8 | % | $ | 2,487.3 | |||||||
2 | Baa | 1,228.2 | 30.7 | % | 1,339.5 | 1,172.2 | 30.3 | % | 1,262.2 | |||||||||||
3 | Ba | 252.2 | 6.0 | % | 263.5 | 280.1 | 6.8 | % | 283.2 | |||||||||||
4 | B | 60.5 | 1.5 | % | 67.2 | 90.3 | 2.1 | % | 85.2 | |||||||||||
5 | Caa and lower | 38.3 | 1.0 | % | 42.2 | 22.3 | 0.5 | % | 21.0 | |||||||||||
6 | In or near default | 22.7 | 0.6 | % | 26.2 | 22.7 | 0.5 | % | 22.0 | |||||||||||
Subtotal | 3,988.2 | 100.0 | % | 4,370.7 | 3,873.2 | 100.0 | % | 4,160.9 | ||||||||||||
Redeemable preferred stock | — | 0.0 | % | — | — | 0.0 | % | — | ||||||||||||
Total Fixed | ||||||||||||||||||||
Maturities | $ | 3,988.2 | 100.0 | % | $ | 4,370.7 | $ | 3,873.2 | 100.0 | % | $ | 4,160.9 | ||||||||
11
Exhibit 5
(Unaudited)
PROTECTION PRODUCTS SEGMENT
NEW ANNUALIZED AND SINGLE PREMIUMS AND INFORCE
Three-Months Ended June 30, | Six-Months Ended June 30, | |||||||||||
2003 | 2002 | 2003 | 2002 | |||||||||
($ millions) | ($ millions) | |||||||||||
PROTECTION BUSINESS SALES(3)(4): | ||||||||||||
Traditional life | $ | 1.3 | $ | 0.9 | $ | 2.6 | $ | 1.6 | ||||
Term | 14.5 | 10.2 | 28.1 | 21.4 | ||||||||
Universal life | 14.6 | 11.3 | 26.9 | 19.0 | ||||||||
Variable universal life | 6.5 | 10.2 | 11.6 | 20.7 | ||||||||
Corporate owned life insurance | 29.4 | 28.2 | 63.1 | 46.5 | ||||||||
Group universal life | 1.5 | 0.5 | 2.9 | 0.8 | ||||||||
Total | $ | 67.8 | $ | 61.3 | $ | 135.2 | $ | 110.0 | ||||
As of | ||||||
June 30, 2003 | December 31, 2002 | |||||
Insurance In Force ($ in millions except number of policies) | ||||||
Traditional Life (1): | ||||||
Number of policies (in thousands) | 833.0 | 839.1 | ||||
GAAP life reserves | $ | 7,482.4 | $ | 7,447.0 | ||
Face amounts | $ | 87,968.8 | $ | 82,598.6 | ||
Universal Life: | ||||||
Number of policies (in thousands) | 74.4 | 74.0 | ||||
GAAP life reserves | $ | 804.1 | $ | 765.4 | ||
Face amounts | $ | 11,338.7 | $ | 10,790.2 | ||
Variable Universal Life (2): | ||||||
Number of policies (in thousands) | 67.4 | 68.0 | ||||
GAAP life reserves | $ | 1,029.3 | $ | 880.3 | ||
Face amounts | $ | 18,677.0 | $ | 18,790.2 | ||
Group Universal Life: | ||||||
Number of policies (in thousands) | 40.7 | 41.8 | ||||
GAAP life reserves | $ | 72.5 | $ | 70.3 | ||
Face amounts | $ | 1,555.6 | $ | 1,497.3 | ||
Total: | ||||||
Number of policies (in thousands) | 1,015.5 | 1,022.9 | ||||
GAAP life reserves | $ | 9,388.3 | $ | 9,163.0 | ||
Face amounts | $ | 119,540.1 | $ | 113,676.3 | ||
(1) | Consists of whole life and term policies |
(2) | Includes corporate owned life insurance |
(3) | See Preface. |
(4) | The amounts presented with respect to life insurance sales represent annualized statutory-basis premiums. Annualized statutory-basis premiums in the Protection Products segment represent the total premium scheduled to be collected on a policy or contract over a twelve-month period. Pursuant to the terms of certain of the policies and contracts issued by the company, premiums and deposits may be paid or deposited on a monthly, quarterly, or semi-annual basis. Annualized statutory-basis premium does not apply to corporate-owned and bank-owned life insurance (COLI and BOLI) single premium paying business. All premiums received on COLI and BOLI business and single premium paying policies during the periods presented are included. Statutory basis premiums are used in lieu of GAAP basis premiums because, in accordance with statutory accounting practices, revenues from all classes of long-duration contracts are measured on the same basis, whereas GAAP provides different revenue recognition rules for different classes of long-duration contracts. The amounts presented with respect to annuity and mutual fund sales represent deposits made by customers during the periods presented. |
The information presented should not be viewed as a substitute for revenues determined in accordance with GAAP. Revenues in accordance with GAAP related to product sales are generated from both current and prior period sales that are in-force during the reporting period. For protection products GAAP recognizes premium revenue when due from a policyholder. For accumulation products, GAAP revenues are a function of fee based charges applied to a contractholder’s account balance. Because of how revenues are recognized in accordance with GAAP, we do not believe GAAP revenues are meaningful in assessing the periodic sales production of a life insurance company and, accordingly, a reconciliation to GAAP revenues would not be meaningful.
12
Exhibit 6
(Unaudited)
PROTECTION PRODUCTS SEGMENT
GAAP DIRECT PREMIUMS AND DEPOSITS BY PRODUCT
Three-Months Ended June 30, | Six-Months Ended June 30, | |||||||||||||||
2003 | 2002 | 2003 | 2002 | |||||||||||||
($ millions) | ($ millions) | |||||||||||||||
LIFE INSURANCE: | ||||||||||||||||
GAAP Premiums: | ||||||||||||||||
Traditional Life (1): | ||||||||||||||||
First year & single | $ | 46.3 | $ | 44.6 | $ | 89.8 | $ | 85.6 | ||||||||
Renewal | 148.4 | 148.8 | 292.9 | 292.4 | ||||||||||||
Total Direct Premiums | 194.7 | 193.4 | 382.7 | 378.0 | ||||||||||||
Less Ceded Premiums | (29.9 | ) | (29.0 | ) | (57.1 | ) | (53.2 | ) | ||||||||
Total GAAP Premiums | $ | 164.7 | $ | 164.5 | $ | 325.5 | $ | 324.9 | ||||||||
Deposits: | ||||||||||||||||
Universal Life: | ||||||||||||||||
First year & single | $ | 22.6 | $ | 9.7 | $ | 35.5 | $ | 17.7 | ||||||||
Renewal | 23.8 | 23.5 | 47.9 | 47.6 | ||||||||||||
Total | $ | 46.4 | $ | 33.2 | $ | 83.4 | $ | 65.3 | ||||||||
Variable Universal Life: | ||||||||||||||||
First year & single | $ | 6.9 | $ | 13.2 | $ | 13.3 | $ | 26.7 | ||||||||
Renewal | 28.6 | 27.6 | 57.0 | 53.5 | ||||||||||||
Total | $ | 35.5 | $ | 40.8 | $ | 70.3 | $ | 80.2 | ||||||||
Corporate Sponsored Variable Universal Life: | ||||||||||||||||
First year & single | $ | 18.9 | $ | 16.6 | $ | 43.7 | $ | 31.3 | ||||||||
Renewal | 5.0 | 13.4 | 26.6 | 22.5 | ||||||||||||
Total | $ | 23.9 | $ | 30.0 | $ | 70.3 | $ | 53.8 | ||||||||
Group Universal Life: | ||||||||||||||||
First year & single | $ | 1.6 | $ | 0.4 | $ | 2.8 | $ | 0.8 | ||||||||
Renewal | 2.4 | 2.5 | 5.0 | 5.3 | ||||||||||||
Total | $ | 4.0 | $ | 2.9 | $ | 7.8 | $ | 6.1 | ||||||||
(1) | Consists of whole life and term policies; includes disability income insurance premiums of $15.2 million and $16.0 million for the three-month periods ended June 30, 2003 and 2002, respectively, and $30.4 million and $ 32.1 million for the six-month periods ended June 30, 2003 and 2002, respectively, which is 100% reinsured and no longer offered by the Company. |
13
Exhibit 7
ACCUMULATION PRODUCTS SEGMENT
The Accumulation Products segment represents fixed annuities, single premium deferred annuities, immediate annuities, flexible payment variable annuities and proprietary retail mutual funds.
14
Exhibit 8
(Unaudited)
ACCUMULATION PRODUCTS SEGMENT
INCOME STATEMENT DATA
Three-Months Ended June 30, | Six-Months Ended June 30, | |||||||||||||
2003 | 2002 | 2003 | 2002 | |||||||||||
($ millions) | ($ millions) | |||||||||||||
REVENUES: | ||||||||||||||
Premiums | $ | 7.2 | $ | 3.3 | $ | 10.9 | $ | 4.8 | ||||||
Universal life and investment-type product policy fees | 10.6 | 12.6 | 20.5 | 24.7 | ||||||||||
Net investment income | 26.2 | 20.5 | 47.5 | 41.7 | ||||||||||
Other income | 26.6 | 25.8 | 48.7 | 51.6 | ||||||||||
Total revenues | 70.6 | 62.2 | 127.6 | 122.8 | ||||||||||
BENEFITS AND EXPENSES: | ||||||||||||||
Benefits to policyholders | 12.4 | 12.4 | 24.2 | 18.6 | ||||||||||
Interest credited to policyholder account balances | 14.0 | 10.8 | 27.3 | 21.2 | ||||||||||
Amortization of deferred policy acquisition costs | 0.8 | 7.8 | 4.2 | 13.7 | ||||||||||
Dividends to policyholders | 0.3 | 0.3 | 0.6 | 0.6 | ||||||||||
Other operating costs and expenses | 31.5 | 30.3 | 59.5 | 59.4 | ||||||||||
Total benefits and expenses | 59.0 | 61.6 | 115.8 | 113.5 | ||||||||||
Pre-tax income from continuing operations excluding net realized gains/(losses) on investments | 11.6 | 0.6 | 11.8 | 9.3 | ||||||||||
Net realized gains/(losses) on investments | 3.3 | (7.0 | ) | 6.6 | (7.2 | ) | ||||||||
Pre-tax income/(loss) from continuing operations | 14.9 | (6.4 | ) | 18.4 | 2.1 | |||||||||
Discontinued operations—pre-tax | 0.2 | — | 0.6 | — | ||||||||||
Pre-tax income/(loss) | $ | 15.1 | $ | (6.4 | ) | $ | 19.0 | $ | 2.1 | |||||
Three-Months Ended June 30, | Six-Months Ended June 30, | |||||||||||||
2003 | 2002 | 2003 | 2002 | |||||||||||
($ millions) | ($ millions) | |||||||||||||
Pre-tax adjusted operating income including net results of venture capital investments | $ | 11.6 | $ | 0.6 | $ | 11.8 | $ | 9.3 | ||||||
Net (gains)/loss from venture capital investments | (2.3 | ) | 0.8 | (0.5 | ) | — | ||||||||
Pre-tax adjusted operating income (1) | $ | 9.3 | $ | 1.4 | $ | 11.3 | $ | 9.3 | ||||||
(1) | The pre-tax adjusted operating income for the three and six-months ended June 30, 2002 includes interest and litigation fees of $1.0 million. |
15
Exhibit 9
(Unaudited)
ACCUMULATION PRODUCTS SEGMENT
ASSETS UNDER MANAGEMENT
As of | |||||||||
June 30, 2003 | June 30, 2002 | December 31, 2003 | |||||||
($ billions) | |||||||||
ACCUMULATION SEGMENT: | |||||||||
Assets under management | |||||||||
Individual variable annuities | $ | 3.5 | $ | 3.5 | $ | 3.2 | |||
Individual fixed annuities | 0.9 | 0.7 | 0.8 | ||||||
Proprietary retail mutual funds | 4.3 | 4.0 | 3.7 | ||||||
$ | 8.7 | $ | 8.2 | $ | 7.7 | ||||
Three-Months Ended June 30, | Six-Months Ended June 30, | |||||||||||||||
2003 | 2002 | 2003 | 2002 | |||||||||||||
($ millions) | ($ millions) | |||||||||||||||
RECONCILIATION IN ACCOUNT VALUE: | ||||||||||||||||
VARIABLE ANNUITY: | ||||||||||||||||
Beginning account value | $ | 3,192.7 | $ | 3,870.7 | $ | 3,244.9 | $ | 3,867.6 | ||||||||
Sales (1)(2) | 97.1 | 129.5 | 189.0 | 231.4 | ||||||||||||
Market appreciation | 281.6 | (351.7 | ) | 251.8 | (339.0 | ) | ||||||||||
Mortality and expense | (9.4 | ) | (10.7 | ) | (18.1 | ) | (21.3 | ) | ||||||||
Surrenders and withdrawals | (102.1 | ) | (111.0 | ) | (207.7 | ) | (211.9 | ) | ||||||||
$ | 3,459.9 | $ | 3,526.8 | $ | 3,459.9 | $ | 3,526.8 | |||||||||
ENTERPRISE GROUP OF FUNDS: | ||||||||||||||||
Beginning account value | $ | 3,861.9 | $ | 4,482.1 | $ | 3,695.3 | $ | 4,396.6 | ||||||||
Sales(2) | 330.4 | 335.0 | 789.6 | 679.1 | ||||||||||||
Dividends reinvested | 6.3 | 5.6 | 12.2 | 10.7 | ||||||||||||
Market appreciation | 365.6 | (483.3 | ) | 313.3 | (478.6 | ) | ||||||||||
Redemptions | (260.4 | ) | (318.8 | ) | (506.6 | ) | (587.2 | ) | ||||||||
Ending account value | $ | 4,303.8 | $ | 4,020.5 | $ | 4,303.8 | $ | 4,020.5 | ||||||||
(1) | Includes in 2003, the assumed management of $0.2 billion of money market funds previously managed by a third party. |
(2) | See Preface. |
16
Exhibit 10
RETAIL BROKERAGE AND INVESTMENT BANKING
The Retail Brokerage and Investment Banking segment is comprised of results of the Company's subsidiaries, The Advest Group, Inc. (“AGI”), Matrix Capital Markets Group (“Matrix”) and MONY Securities Corp. (“MSC”). AGI through its subsidiaries, provides diversified financial services including securities brokerage, trading, investment banking, trust and asset management. Matrix is a middle market investment bank specializing in merger and acquisition services for a middle market client base. MSC is a broker dealer which transacts customer trades primarily in securities and mutual funds. In addition to selling the Company's proprietary investment products, MSC provides customers of the Company's protection and accumulation products access to other non-proprietary investment products (including stocks, bonds, limited partnership interests, tax-exempt unit investment trusts and other investment securities).
17
Exhibit 11
(Unaudited)
RETAIL BROKERAGE AND INVESTMENT BANKING
INCOME STATEMENT DATA
Three-Months Ended June 30, | Six-Months Ended June 30, | ||||||||||||
2003 | 2002 | 2003 | 2002 | ||||||||||
($ millions) | ($ millions) | ||||||||||||
REVENUES: | |||||||||||||
Net investment income | $ | 0.1 | $ | — | $ | 0.1 | $ | — | |||||
Retail brokerage and investment banking | 108.9 | 100.7 | 203.5 | 193.8 | |||||||||
Other income | — | 1.0 | 4.0 | 1.0 | |||||||||
Total revenues | 109.0 | 101.7 | 207.6 | 194.8 | |||||||||
BENEFITS AND EXPENSES: | |||||||||||||
Other operating costs and expenses | 106.1 | 101.0 | 205.8 | 194.9 | |||||||||
Total benefits and expenses | 106.1 | 101.0 | 205.8 | 194.9 | |||||||||
Pre-tax income/(loss) from continuing operations excluding net realized gains/(losses) on investments | 2.9 | 0.7 | 1.8 | (0.1 | ) | ||||||||
Net realized gains/(losses) on investments | — | — | — | — | |||||||||
Pre-tax income/(loss) from continuing operations | $ | 2.9 | $ | 0.7 | $ | 1.8 | $ | (0.1 | ) | ||||
18
Exhibit 12
(Unaudited)
RETAIL BROKERAGE AND INVESTMENT BANKING
INCOME STATEMENT DETAIL
Three-Months Ended June 30, | Six-Months Ended June 30, | ||||||||||||
2003 | 2002 | 2003 | 2002 | ||||||||||
($ millions) | ($ millions) | ||||||||||||
REVENUES: | |||||||||||||
Commissions | $ | 43.5 | $ | 43.0 | $ | 77.8 | $ | 85.4 | |||||
Interest | 7.5 | 9.4 | 14.6 | 18.1 | |||||||||
Principal transactions | 33.1 | 24.6 | 65.1 | 47.3 | |||||||||
Asset management and administration | 12.7 | 13.1 | 25.6 | 26.1 | |||||||||
Investment banking | 11.4 | 8.8 | 18.5 | 14.0 | |||||||||
Other | 0.8 | 2.8 | 6.0 | 3.9 | |||||||||
Total revenues | 109.0 | 101.7 | 207.6 | 194.8 | |||||||||
EXPENSES: | |||||||||||||
Compensation | 64.1 | 57.5 | 122.4 | 110.7 | |||||||||
Interest | 2.6 | 5.9 | 6.0 | 10.5 | |||||||||
Other | 39.4 | 37.6 | 77.4 | 73.7 | |||||||||
Total expenses | 106.1 | 101.0 | 205.8 | 194.9 | |||||||||
Pre-tax income/(loss) | $ | 2.9 | $ | 0.7 | $ | 1.8 | $ | (0.1 | ) | ||||
ADVEST—NET INTEREST Three-Months Ended | ADVEST—NET INTEREST Six-Months Ended | |||||||||||||||||||||||
June 30, 2003 | June 30, 2002 | June 30, 2003 | June 30, 2002 | |||||||||||||||||||||
($ millions) | ($ millions) | |||||||||||||||||||||||
Net Interest Income— | ||||||||||||||||||||||||
Interest Income: | ||||||||||||||||||||||||
Brokerage customers | $ | 2.9 | 38.7 | % | $ | 4.0 | 42.6 | % | $ | 5.9 | 40.4 | % | $ | 8.1 | 44.8 | % | ||||||||
Stock borrowed | 0.7 | 9.2 | % | 1.2 | 12.7 | % | 1.3 | 8.8 | % | 2.4 | 13.3 | % | ||||||||||||
Investments | — | 0.0 | % | — | 0.0 | % | — | 0.0 | % | 0.1 | 0.6 | % | ||||||||||||
Security inventory | 3.1 | 41.3 | % | 3.0 | 31.9 | % | 5.8 | 39.7 | % | 5.2 | 28.6 | % | ||||||||||||
Other | 0.8 | 10.8 | % | 1.2 | 12.8 | % | 1.6 | 11.1 | % | 2.3 | 12.7 | % | ||||||||||||
$ | 7.5 | 100.0 | % | $ | 9.4 | 100.0 | % | $ | 14.6 | 100.0 | % | $ | 18.1 | 100.0 | % | |||||||||
Interest Expense: | ||||||||||||||||||||||||
Stock loaned | 1.3 | 50.0 | % | 3.2 | 54.2 | % | 3.5 | 58.3 | % | 6.1 | 58.1 | % | ||||||||||||
Brokerage customers | 1.0 | 38.5 | % | 1.8 | 30.5 | % | 2.1 | 35.0 | % | 3.1 | 29.5 | % | ||||||||||||
Borrowings | 0.2 | 7.6 | % | 0.8 | 13.6 | % | 0.3 | 4.9 | % | 1.0 | 9.5 | % | ||||||||||||
Other | 0.1 | 3.9 | % | 0.1 | 1.7 | % | 0.1 | 1.8 | % | 0.3 | 2.9 | % | ||||||||||||
2.6 | 100.0 | % | 5.9 | 100.0 | % | 6.0 | 100.0 | % | 10.5 | 100.0 | % | |||||||||||||
Net interest income | $ | 4.9 | 65.3 | % | $ | 3.5 | 37.2 | % | $ | 8.6 | 58.9 | % | $ | 7.6 | 42.0 | % | ||||||||
ADVEST STATISTICAL DATA
June 30, 2003 | |||
Client Assets ( in millions) * | $ | 34,503.0 | |
Number of Client Accounts (in thousands) | 268 |
* | Includes assets managed under fee-based programs of approximately $6,376 million. |
19
Exhibit 13
OTHER PRODUCTS SEGMENT
The Company’s Other Products segment primarily consists of an insurance brokerage operation and the Run-Off businesses. The insurance brokerage operation provides the Company’s career agency sales force with access to non-variable life, annuity, small group health and specialty insurance products written by other carriers to meet the insurance and investment needs of its customers. The Run-Off Businesses primarily consist of group life and health insurance as well as the group pension business that was not included in the Group Pension Transaction.
RECONCILING AMOUNTS
The reconciling amounts include certain benefits for the Company’s benefit plans, the results of the holding companies and certain non-recurring items.
20
Exhibit 14
(Unaudited)
OTHER PRODUCTS SEGMENT AND RECONCILING ITEMS
INCOME STATEMENT DATA
Three-Months Ended June 30, | Six-Months Ended June 30, | |||||||||||||||
2003 | 2002 | 2003 | 2002 | |||||||||||||
($ millions) | ($ millions) | |||||||||||||||
REVENUES: | ||||||||||||||||
Premiums | $ | 1.9 | $ | 2.1 | $ | 4.2 | $ | 4.6 | ||||||||
Universal life and investment-type product policy fees | (0.1 | ) | 0.1 | 0.6 | 1.3 | |||||||||||
Net investment income | 12.5 | 12.9 | 23.4 | 25.4 | ||||||||||||
Other income | 7.3 | 5.1 | 16.1 | 11.7 | ||||||||||||
Total revenues | 21.6 | 20.2 | 44.3 | 43.0 | ||||||||||||
BENEFITS AND EXPENSES: | ||||||||||||||||
Benefits to policyholders | 3.6 | 3.6 | 8.6 | 12.1 | ||||||||||||
Interest credited to policyholder account balances | 2.1 | 2.1 | 4.5 | 4.2 | ||||||||||||
Amortization of deferred policy acquisition costs | — | — | — | — | ||||||||||||
Dividends to policyholders | 0.4 | 0.3 | 0.5 | 0.6 | ||||||||||||
Other operating costs and expenses | 28.7 | 22.5 | 57.8 | 46.3 | ||||||||||||
Total benefits and expenses | 34.8 | 28.5 | 71.4 | 63.2 | ||||||||||||
Pre-tax loss from continuing operations excluding net realized gains/(losses) on investments | (13.2 | ) | (8.3 | ) | (27.1 | ) | (20.2 | ) | ||||||||
Net realized gains/(losses) on investments | 1.0 | (1.9 | ) | 6.8 | (2.1 | ) | ||||||||||
Pre-tax loss from continuing operations | (12.2 | ) | (10.2 | ) | (20.3 | ) | (22.3 | ) | ||||||||
Discontinued operations—pre-tax | 0.2 | — | 0.3 | — | ||||||||||||
Pre-tax loss | $ | (12.0 | ) | $ | (10.2 | ) | $ | (20.0 | ) | $ | (22.3 | ) | ||||
Three-Months Ended June 30, | Six-Months Ended June 30, | |||||||||||||
2003 | 2002 | 2003 | 2002 | |||||||||||
($ millions) | ($ millions) | |||||||||||||
Pre-tax adjusted operating loss including net results of venture capital investments | $ | (13.2 | ) | $(8.3) | $ | (27.1 | ) | $ | (20.2 | ) | ||||
Net (gains)/loss from venture capital investments | (1.6 | ) | 0.3 | (0.3 | ) | — | ||||||||
Pre-tax adjusted operating loss | $ | (14.8 | ) | $(8.0) | $ | (27.4 | ) | $ | (20.2 | ) | ||||
21
INVESTMENTS
ALL INVESTMENT DATA PRESENTED IN THE FOLLOWING SECTION
INCLUDES INVESTED ASSETS IN THE CLOSED BLOCK
22
Exhibit 16
(Unaudited)
CONSOLIDATED GAAP INVESTED ASSETS
As of June 30, 2003 | As of December 31, 2002 | |||||||||||
Carrying Value | % of Total | Carrying Value | % of Total | |||||||||
($ millions) | ||||||||||||
INVESTED ASSETS | ||||||||||||
Fixed Maturities, Available for Sale | $ | 8,447.5 | 67.9 | % | $ | 7,971.1 | 66.3 | % | ||||
Fixed Maturities, Held to Maturity | 0.1 | 0.0 | % | 0.1 | 0.0 | % | ||||||
Equity Securities, Available for Sale | 271.3 | 2.2 | % | 249.0 | 2.1 | % | ||||||
Mortgage Loans on Real Estate | 1,824.6 | 14.7 | % | 1,877.4 | 15.6 | % | ||||||
Policy Loans | 1,197.1 | 9.6 | % | 1,212.5 | 10.1 | % | ||||||
Real Estate to be Disposed Of | 0.5 | 0.0 | % | 26.8 | 0.2 | % | ||||||
Real Estate Held for Investment | 180.5 | 1.4 | % | 180.2 | 1.5 | % | ||||||
Other Invested Assets | 120.7 | 1.0 | % | 110.8 | 0.9 | % | ||||||
Cash and Cash Equivalents | 397.6 | 3.2 | % | 390.0 | 3.3 | % | ||||||
Invested Assets, excluding Trading Securities | $ | 12,439.9 | 100.0 | % | $ | 12,017.9 | 100.0 | % | ||||
The Exhibit above includes invested assets in the Closed Block and excludes Trading Securities in Advest.
23
Exhibit 17
(Unaudited)
INVESTMENT RESULTS BY ASSET CATEGORY
Three Months Ended June 30, 2003 | Three Months Ended June 30, 2002 | Six Months Ended June 30, 2003 | Six Months Ended June 30, 2002 | Year Ended December 31,2002 | Year Ended December 31,2001 | |||||||||||||||||||||||||||||||||||||
Yield (2) | Amount | Yield (2) | Amount | Yield (1) | Amount | Yield (1) | Amount | Yield (1) | Amount | Yield (1) | Amount | |||||||||||||||||||||||||||||||
($ millions) | ($ millions) | ($ millions) | ($ millions) | ($ millions) | ($ millions) | |||||||||||||||||||||||||||||||||||||
FIXED MATURITIES (4) | ||||||||||||||||||||||||||||||||||||||||||
Investment Income | 7.0 | % | $ | 133.8 | 7.1 | % | $ | 125.2 | 6.9 | % | $ | 260.9 | 7.1 | % | $ | 249.1 | 6.9 | % | $ | 491.0 | 7.3 | % | $ | 492.5 | ||||||||||||||||||
Realized Gains (losses) | 0.5 | % | 9.8 | -0.9 | % | (16.5 | ) | 0.7 | % | 26.2 | -0.3 | % | (11.7 | ) | -1.1 | % | $ | (79.3 | ) | 0.0 | % | (2.6 | ) | |||||||||||||||||||
Total | 7.5 | % | $ | 143.6 | 6.2 | % | $ | 108.7 | 7.6 | % | $ | 287.1 | 6.8 | % | $ | 237.4 | 5.8 | % | $ | 411.7 | 7.3 | % | $ | 489.9 | ||||||||||||||||||
Ending Assets | $ | 7,770.8 | $ | 7,168.8 | $ | 7,770.8 | $ | 7,168.8 | $ | 7,453.4 | $ | 6,829.2 | ||||||||||||||||||||||||||||||
EQUITY SECURITIES | ||||||||||||||||||||||||||||||||||||||||||
Investment Income | 16.4 | % | $ | 10.6 | -6.2 | % | $ | (4.6 | ) | 2.1 | % | $ | 2.8 | 0.9 | % | $ | 1.4 | 2.9 | % | $ | 7.9 | -10.8 | % | $ | (33.9 | ) | ||||||||||||||||
Realized Gains (losses) | 0.9 | % | 0.6 | -5.9 | % | (4.4 | ) | -2.2 | % | (2.9 | ) | -3.8 | % | (5.5 | ) | -14.1 | % | $ | (38.7 | ) | -2.5 | % | (7.8 | ) | ||||||||||||||||||
Total | 17.3 | % | $ | 11.2 | -12.1 | % | $ | (9.0 | ) | -0.1 | % | $ | (0.1 | ) | -2.9 | % | $ | (4.1 | ) | -11.2 | % | $ | (30.8 | ) | -13.3 | % | $ | (41.7 | ) | |||||||||||||
Ending Assets | $ | 271.3 | $ | 288.1 | $ | 271.3 | $ | 288.1 | $ | 249.0 | $ | 299.2 | ||||||||||||||||||||||||||||||
MORTGAGE LOANS | ||||||||||||||||||||||||||||||||||||||||||
Investment Income | 8.1 | % | $ | 37.0 | 8.0 | % | $ | 35.3 | 7.8 | % | $ | 72.5 | 7.8 | % | $ | 69.7 | 7.5 | % | $ | 138.9 | 7.8 | % | $ | 139.8 | ||||||||||||||||||
Realized Gains (losses) | 2.1 | % | 9.6 | 0.2 | % | 0.9 | 1.2 | % | 11.0 | -0.2 | % | (1.6 | ) | -0.2 | % | $ | (3.0 | ) | 0.5 | % | 9.3 | |||||||||||||||||||||
Total | 10.2 | % | $ | 46.6 | 8.2 | % | $ | 36.2 | 9.0 | % | $ | 83.5 | 7.6 | % | $ | 68.1 | 7.3 | % | $ | 135.9 | 8.3 | % | $ | 149.1 | ||||||||||||||||||
Ending Assets | $ | 1,824.6 | $ | 1,757.8 | $ | 1,824.6 | $ | 1,757.8 | $ | 1,877.4 | $ | 1,809.7 | ||||||||||||||||||||||||||||||
REAL ESTATE (3) | ||||||||||||||||||||||||||||||||||||||||||
Investment Income | 4.6 | % | $ | 2.1 | 6.2 | % | $ | 3.7 | 6.8 | % | $ | 6.7 | 9.3 | % | $ | 11.0 | 7.4 | % | $ | 16.2 | 4.3 | % | $ | 9.5 | ||||||||||||||||||
Realized Gains (losses) | 4.0 | % | 1.9 | -11.4 | % | (6.8 | ) | 8.2 | % | 8.0 | -8.8 | % | (10.4 | ) | -16.9 | % | $ | (36.9 | ) | -2.4 | % | (5.4 | ) | |||||||||||||||||||
Total | 8.6 | % | $ | 4.0 | -5.2 | % | $ | (3.1 | ) | 15.0 | % | $ | 14.7 | 0.5 | % | $ | 0.6 | -9.5 | % | $ | (20.7 | ) | 1.9 | % | $ | 4.1 | ||||||||||||||||
Ending Assets | $ | 181.0 | $ | 241.2 | $ | 181.0 | $ | 241.2 | $ | 206.9 | $ | 230.8 | ||||||||||||||||||||||||||||||
POLICY LOANS | ||||||||||||||||||||||||||||||||||||||||||
Investment Income | 6.6 | % | $ | 19.7 | 7.0 | % | $ | 21.4 | 6.6 | % | $ | 39.6 | 7.0 | % | $ | 42.9 | 6.9 | % | $ | 84.8 | 6.9 | % | $ | 86.5 | ||||||||||||||||||
Realized Gains (losses) | 0.0 | % | — | 0.0 | % | — | 0.0 | % | — | 0.0 | % | — | 0.0 | % | $ | — | 0.0 | % | — | |||||||||||||||||||||||
Total | 6.6 | % | $ | 19.7 | 7.0 | % | $ | 21.4 | 6.6 | % | $ | 39.6 | 7.0 | % | $ | 42.9 | 6.9 | % | $ | 84.8 | 6.9 | % | $ | 86.5 | ||||||||||||||||||
Ending Assets | $ | 1,197.1 | $ | 1,212.0 | $ | 1,197.1 | $ | 1,212.0 | $ | 1,212.5 | $ | 1,229.0 | ||||||||||||||||||||||||||||||
CASH AND CASH EQUIVALENTS | ||||||||||||||||||||||||||||||||||||||||||
Investment Income | 1.2 | % | $ | 1.4 | 2.0 | % | $ | 2.6 | 1.4 | % | $ | 2.9 | 2.0 | % | $ | 4.8 | 2.1 | % | $ | 9.3 | 4.4 | % | $ | 29.3 | ||||||||||||||||||
Realized Gains (losses) | 0.0 | % | (0.0 | ) | 0.0 | % | (0.0 | ) | 0.0 | % | (0.0 | ) | 0.0 | % | (0.0 | ) | 0.0 | % | $ | (0.0 | ) | -0.1 | % | (0.8 | ) | |||||||||||||||||
Total | 1.2 | % | $ | 1.4 | 2.0 | % | $ | 2.6 | 1.4 | % | $ | 2.9 | 2.0 | % | $ | 4.8 | 2.1 | % | $ | 9.3 | 4.3 | % | $ | 28.5 | ||||||||||||||||||
Ending Assets | $ | 397.6 | $ | 494.3 | $ | 397.6 | $ | 494.3 | $ | 390.0 | $ | 441.0 | ||||||||||||||||||||||||||||||
OTHER INVESTED ASSETS | ||||||||||||||||||||||||||||||||||||||||||
Investment Income | 13.2 | % | $ | 4.2 | 18.4 | % | $ | 5.7 | 10.6 | % | $ | 6.1 | 14.9 | % | $ | 8.9 | 16.1 | % | $ | 18.3 | 8.4 | % | $ | 9.1 | ||||||||||||||||||
Realized Gains (losses) | -14.6 | % | (4.6 | ) | 4.1 | % | 1.3 | -8.4 | % | (4.9 | ) | 2.2 | % | 1.3 | 0.1 | % | $ | 0.1 | -4.7 | % | (5.0 | ) | ||||||||||||||||||||
Total | -1.4 | % | $ | (0.4 | ) | 22.5 | % | $ | 7.0 | 2.2 | % | $ | 1.2 | 17.1 | % | $ | 10.2 | 16.2 | % | $ | 18.4 | 3.7 | % | $ | 4.1 | |||||||||||||||||
Ending Assets | $ | 120.7 | $ | 122.2 | $ | 120.7 | $ | 122.2 | $ | 110.8 | $ | 116.7 | ||||||||||||||||||||||||||||||
TOTAL BEFORE INVESTMENT EXPENSES AND | ||||||||||||||||||||||||||||||||||||||||||
Investment Income | 7.1 | % | $ | 208.8 | 6.8 | % | $ | 189.3 | 6.7 | % | $ | 391.5 | 7.0 | % | $ | 387.8 | 6.9 | % | $ | 766.6 | 6.6 | % | $ | 732.8 | ||||||||||||||||||
Realized Gains (losses) | 0.6 | % | 17.3 | -0.9 | % | (25.5 | ) | 0.6 | % | 37.4 | -0.5 | % | (27.9 | ) | -1.4 | % | (157.8 | ) | -0.1 | % | (12.3 | ) | ||||||||||||||||||||
Total | 7.7 | % | $ | 226.1 | 5.9 | % | $ | 163.8 | 7.3 | % | $ | 428.9 | 6.5 | % | $ | 359.9 | 5.5 | % | $ | 608.8 | 6.5 | % | $ | 720.5 | ||||||||||||||||||
Ending Assets | $ | 11,763.1 | $ | 11,284.4 | $ | 11,763.1 | $ | 11,284.4 | $ | 11,500.0 | $ | 10,955.6 | ||||||||||||||||||||||||||||||
Other Fee Income | 0.0 | % | $ | (0.3 | ) | 0.0 | % | $ | 0.8 | 0.0 | % | $ | 0.5 | 0.0 | % | $ | 2.2 | 0.0 | % | $ | 1.3 | 0.0 | % | $ | 5.3 | |||||||||||||||||
Investment expense | -0.2 | % | $ | (7.1 | ) | -0.4 | % | $ | (11.3 | ) | -0.3 | % | $ | (15.5 | ) | -0.4 | % | $ | (23.8 | ) | -0.3 | % | $ | (29.6 | ) | -0.4 | % | $ | (46.1 | ) | ||||||||||||
Discontinued Operations—Income (5) | 11.2 | % | $ | 0.3 | 0.0 | % | $ | — | 5.2 | % | $ | 0.3 | 0.0 | % | $ | — | -2.5 | % | $ | (1.0 | ) | 0.0 | % | $ | — | |||||||||||||||||
Discontinued Operations—Realized Gains (Losses) (6) | 91.1 | % | $ | 2.3 | 0.0 | % | $ | — | 84.4 | % | $ | 5.8 | 0.0 | % | $ | — | 12.8 | % | $ | 4.8 | 0.0 | % | $ | — | ||||||||||||||||||
TOTAL AFTER INVESTMENT EXPENSES AND | ||||||||||||||||||||||||||||||||||||||||||
Investment Income | 6.9 | % | $ | 201.1 | 6.4 | % | $ | 178.8 | 6.5 | % | $ | 376.2 | 6.6 | % | $ | 366.2 | 6.6 | % | $ | 737.3 | 6.2 | % | $ | 692.1 | ||||||||||||||||||
Realized Gains (losses) | 0.5 | % | 15.0 | -0.9 | % | (25.5 | ) | 0.5 | % | 31.6 | -0.5 | % | (27.9 | ) | -1.4 | % | (153.0 | ) | -0.1 | % | (12.3 | ) | ||||||||||||||||||||
Total | 7.4 | % | $ | 216.1 | 5.5 | % | $ | 153.3 | 7.0 | % | $ | 407.8 | 6.1 | % | $ | 338.3 | 5.2 | % | $ | 584.3 | 6.1 | % | $ | 679.8 | ||||||||||||||||||
Ending Assets | 11,763.1 | 11,284.4 | 11,763.1 | 11,284.4 | 11,500.0 | 10,955.6 | ||||||||||||||||||||||||||||||||||||
Net unrealized gains (losses) on fixed maturities | 676.8 | 237.6 | 676.8 | 237.6 | 517.9 | 146.9 | ||||||||||||||||||||||||||||||||||||
Total invested assets | $ | 12,439.9 | $ | 11,522.0 | $ | 12,439.9 | $ | 11,522.0 | $ | 12,017.9 | $ | 11,102.5 | ||||||||||||||||||||||||||||||
(1) | Yields are based on annual average asset carrying values, excluding unrealized gains (losses) in the fixed maturity asset category. |
(2) | Yields are based on quarterly average asset carrying values, excluding unrealized gains (losses) in the fixed maturity asset category. |
(3) | Equity real estate income is shown net of operating expenses, depreciation and minority interest and includes net income classified as discontinued operations. |
(4) | Trading portfolio balances of $824.7 million at 6/30/2003, $726.7 million at 12/31/2002, $793.1 million at 6/30/2002 and $724.0 million at 12/31/2001 and results from both are excluded from the yield calculation. |
(5) | Income from real estate available for sale is reclassified as discontinued operations (FAS 144). |
(6) | Realized gains (losses) from real estate available for sale is reclassified as discontinued operations (FAS 144). |
The Exhibit above includes invested assets in the Closed Block and excludes Trading Securities in Advest.
24
Exhibit 18A
(Unaudited)
FIXED MATURITIES BY CREDIT QUALITY
PUBLIC FIXED MATURITIES BY CREDIT QUALITY
As of June 30, 2003 | Year Ended December 31, 2002 | |||||||||||||||||||
NAIC Rating | Rating Agency Equivalent Designation | Amortized Cost | % of Total | Estimated Fair Value | Amortized Cost | % of Total | Estimated Fair Value | |||||||||||||
($ millions) | ($ millions) | |||||||||||||||||||
1 | Aaa/Aa/A | $ | 3,735.9 | 75.8 | % | $ | 4,049.5 | $ | 3,277.5 | 73.6 | % | $ | 3,531.4 | |||||||
2 | Baa | 935.1 | 19.3 | % | 1,029.9 | 920.1 | 20.4 | % | 977.2 | |||||||||||
3 | Ba | 166.7 | 3.4 | % | 180.5 | 201.9 | 4.2 | % | 204.2 | |||||||||||
4 | B | 44.0 | 0.9 | % | 50.4 | 65.1 | 1.4 | % | 65.7 | |||||||||||
5 | Caa and lower | 21.8 | 0.6 | % | 30.2 | 17.6 | 0.4 | % | 17.7 | |||||||||||
6 | In or near default | 0.9 | 0.0 | % | 1.0 | 0.9 | 0.0 | % | 0.9 | |||||||||||
Subtotal | 4,904.4 | 100.0 | % | 5,341.5 | 4,483.1 | 100.0 | % | 4,797.1 | ||||||||||||
Redeemable preferred stock | 1.0 | 0.0 | % | 1.0 | 1.0 | 0.0 | % | 1.0 | ||||||||||||
Total Public Fixed | ||||||||||||||||||||
Maturities | $ | 4,905.4 | 100.0 | % | $ | 5,342.5 | $ | 4,484.1 | 100.0 | % | $ | 4,798.1 | ||||||||
PRIVATE FIXED MATURITIES BY CREDIT QUALITY
As of June 30, 2003 | Year Ended December 31, 2002 | |||||||||||||||||||
NAIC Rating | Rating Agency Equivalent Designation | Amortized Cost | % of Total | Estimated Fair Value | Amortized Cost | % of Total | Estimated Fair Value | |||||||||||||
($ millions) | ($ millions) | |||||||||||||||||||
1 | Aaa/Aa/A | $ | 735.7 | 26.4 | % | $ | 821.1 | $ | 943.2 | 32.4 | % | $ | 1,027.3 | |||||||
2 | Baa | 1,486.4 | 51.9 | % | 1,612.6 | 1,400.6 | 47.9 | % | 1,519.0 | |||||||||||
3 | Ba | 450.5 | 15.0 | % | 464.4 | 402.2 | 12.8 | % | 406.3 | |||||||||||
4 | B | 75.0 | 2.6 | % | 79.3 | 111.3 | 3.3 | % | 106.3 | |||||||||||
5 | Caa and lower | 42.3 | 1.4 | % | 42.7 | 31.2 | 0.9 | % | 29.7 | |||||||||||
6 | In or near default | 29.6 | 1.1 | % | 34.0 | 34.7 | 1.1 | % | 35.0 | |||||||||||
Subtotal | 2,819.5 | 98.4 | % | 3,054.1 | 2,923.2 | 98.4 | % | 3,123.6 | ||||||||||||
Redeemable preferred stock | 46.0 | 1.6 | % | 51.0 | 46.0 | 1.6 | % | 49.5 | ||||||||||||
Total Private Fixed | ||||||||||||||||||||
Maturities | $ | 2,865.5 | 100.0 | % | $ | 3,105.1 | $ | 2,969.2 | 100.0 | % | $ | 3,173.1 | ||||||||
TOTAL FIXED MATURITIES BY CREDIT QUALITY
As of June 30, 2003 | Year Ended December 31, 2002 | |||||||||||||||||||
NAIC Rating | Rating Agency Equivalent Designation | Amortized Cost | % of Total | Estimated Fair Value | Amortized Cost | % of Total | Estimated Fair Value | |||||||||||||
($ millions) | ($ millions) | |||||||||||||||||||
1 | Aaa/Aa/A | $ | 4,471.6 | 57.7 | % | $ | 4,870.6 | $ | 4,220.7 | 57.2 | % | $ | 4,558.7 | |||||||
2 | Baa | 2,421.5 | 31.3 | % | 2,642.5 | 2,320.7 | 31.3 | % | 2,496.2 | |||||||||||
3 | Ba | 617.2 | 7.6 | % | 644.9 | 604.1 | 7.7 | % | 610.5 | |||||||||||
4 | B | 119.0 | 1.5 | % | 129.7 | 176.4 | 2.2 | % | 172.0 | |||||||||||
5 | Caa and lower | 64.1 | 0.9 | % | 72.9 | 48.8 | 0.6 | % | 47.4 | |||||||||||
6 | In or near default | 30.5 | 0.4 | % | 35.0 | 35.6 | 0.4 | % | 35.9 | |||||||||||
Subtotal | 7,723.9 | 99.4 | % | 8,395.6 | 7,406.3 | 99.4 | % | 7,920.7 | ||||||||||||
Redeemable preferred stock | 47.0 | 0.6 | % | 52.0 | 47.0 | 0.6 | % | 50.5 | ||||||||||||
Total Fixed | ||||||||||||||||||||
Maturities | $ | 7,770.9 | 100.0 | % | $ | 8,447.6 | $ | 7,453.3 | 100.0 | % | $ | 7,971.2 | ||||||||
The Exhibit above includes invested assets in the Closed Block and excludes Trading Securities in Advest.
25
Exhibit 18B
(Unaudited)
FIXED MATURITIES BY INDUSTRY
As of June 30, 2003 | ||||||||||||||||||
($ millions) | ||||||||||||||||||
Industry | Public | % | Private | % | Total | % | ||||||||||||
Consumer Goods & Services | $ | 693.3 | 13.0 | % | $ | 975.1 | 31.4 | % | $ | 1,668.4 | 19.8 | % | ||||||
Government & Agency | 1,185.6 | 22.2 | % | 0.0 | 0.0 | % | 1,185.6 | 14.0 | % | |||||||||
Other Manufacturing | 153.1 | 2.8 | % | 695.3 | 22.4 | % | 848.4 | 10.0 | % | |||||||||
Public Utilities | 490.1 | 9.2 | % | 285.6 | 9.2 | % | 775.7 | 9.2 | % | |||||||||
Non-Government—Asset/Mortgage Backed | 433.2 | 8.1 | % | 211.2 | 6.8 | % | 644.4 | 7.6 | % | |||||||||
Mortgage Backed—Government & Agency | 575.2 | 10.8 | % | 0.8 | 0.0 | % | 576.0 | 6.8 | % | |||||||||
Banks | 491.8 | 9.2 | % | 46.7 | 1.5 | % | 538.5 | 6.4 | % | |||||||||
Transportation/Aerospace | 318.2 | 6.0 | % | 185.6 | 6.0 | % | 503.8 | 6.0 | % | |||||||||
Financial Services | 288.8 | 5.4 | % | 164.7 | 5.3 | % | 453.5 | 5.4 | % | |||||||||
Energy | 235.5 | 4.4 | % | 162.3 | 5.2 | % | 397.8 | 4.7 | % | |||||||||
Nat/Res/Manuf(non-energy) | 124.4 | 2.3 | % | 184.6 | 6.0 | % | 309.0 | 3.7 | % | |||||||||
Other | 163.5 | 3.1 | % | 24.0 | 0.8 | % | 187.5 | 2.2 | % | |||||||||
Media/Adver/Printing | 63.7 | 1.2 | % | 112.9 | 3.6 | % | 176.6 | 2.1 | % | |||||||||
Telecommunications | 91.7 | 1.7 | % | 12.8 | 0.4 | % | 104.5 | 1.2 | % | |||||||||
Cable Television | 18.6 | 0.3 | % | 31.6 | 1.0 | % | 50.2 | 0.6 | % | |||||||||
Bank Holding Companies | 15.8 | 0.3 | % | 11.9 | 0.4 | % | 27.7 | 0.3 | % | |||||||||
Total | $ | 5,342.5 | 100.0 | % | $ | 3,105.1 | 100.0 | % | $ | 8,447.6 | 100.0 | % | ||||||
As of December 31, 2002 | ||||||||||||||||||
($ millions) | ||||||||||||||||||
Industry | Public | % | Private | % | Total | % | ||||||||||||
Consumer Goods & Services | $ | 592.5 | 12.3 | % | $ | 865.1 | 27.3 | % | $ | 1,457.6 | 18.3 | % | ||||||
Government & Agency | 1,025.0 | 21.4 | % | 0.0 | 0.0 | % | 1,025.0 | 12.9 | % | |||||||||
Other Manufacturing | 185.4 | 3.9 | % | 662.6 | 20.9 | % | 848.0 | 10.6 | % | |||||||||
Public Utilities | 470.2 | 9.8 | % | 292.3 | 9.2 | % | 762.5 | 9.6 | % | |||||||||
Non-Government—Asset/Mortgage Backed | 493.4 | 10.3 | % | 215.0 | 6.8 | % | 708.4 | 8.9 | % | |||||||||
Mortgage Backed—Government & Agency | 252.7 | 5.3 | % | 299.0 | 9.5 | % | 551.7 | 6.9 | % | |||||||||
Banks | 491.0 | 10.2 | % | 45.3 | 1.4 | % | 536.3 | 6.7 | % | |||||||||
Transportation/Aerospace | 332.2 | 6.9 | % | 186.5 | 5.9 | % | 518.7 | 6.5 | % | |||||||||
Financial Services | 243.1 | 5.1 | % | 196.5 | 6.2 | % | 439.6 | 5.5 | % | |||||||||
Energy | 106.6 | 2.2 | % | 212.8 | 6.7 | % | 319.4 | 4.0 | % | |||||||||
Nat/Res/Manuf(non-energy) | 306.9 | 6.4 | % | 1.0 | 0.0 | % | 307.9 | 3.9 | % | |||||||||
Other | 50.4 | 1.1 | % | 112.6 | 3.5 | % | 163.0 | 2.0 | % | |||||||||
Media/Adver/Printing | 144.5 | 3.0 | % | 16.7 | 0.5 | % | 161.2 | 2.0 | % | |||||||||
Telecommunications | 86.8 | 1.8 | % | 13.7 | 0.4 | % | 100.5 | 1.3 | % | |||||||||
Cable Television | 17.4 | 0.3 | % | 31.9 | 1.0 | % | 49.3 | 0.6 | % | |||||||||
Bank Holding Companies | 0.0 | 0.0 | % | 22.1 | 0.7 | % | 22.1 | 0.3 | % | |||||||||
Total | $ | 4,798.1 | 100.0 | % | $ | 3,173.1 | 100.0 | % | $ | 7,971.2 | 100.0 | % | ||||||
The Exhibit above includes invested assets in the Closed Block and excludes Trading Securities in Advest.
26
Exhibit 18C
(Unaudited)
VENTURE CAPITAL PARTNERSHIP INVESTMENTS
VENTURE CAPITAL PARTNERSHIP INVESTMENTS (1):
As of June 30, 2003 | As of December 31, 2002 | |||||
($ in millions) | ($ in millions) | |||||
Equity Method | ||||||
Public common stock | $ | 28.6 | $ | 27.7 | ||
Private common stock | 64.0 | 64.3 | ||||
Sub-total | 92.6 | 92.0 | ||||
Fair Value Method | ||||||
Public common stock | 22.1 | 15.2 | ||||
Private common stock | 76.2 | 79.0 | ||||
Sub-total | 98.3 | 94.2 | ||||
Total Venture Capital Partnership Investments | $ | 190.9 | $ | 186.2 | ||
(1) | Includes other net assets included on partnerships’ financial statements (e.g. cash, receivables, misc. payables, etc.) |
VENTURE CAPITAL PARTNERSHIP INVESTMENTS BY SECTOR:
As of June 30, 2003 | As of December 31, 2002 | |||||||||||
($ millions) | % | ($ millions) | % | |||||||||
Information Technology | $ | 97.5 | 51.1 | % | $ | 97.8 | 52.5 | % | ||||
Domestic LBO | 39.5 | 20.7 | % | 36.8 | 19.8 | % | ||||||
Life Sciences | 11.9 | 6.2 | % | 10.7 | 5.8 | % | ||||||
Telecommunications | 4.2 | 2.2 | % | 4.5 | 2.4 | % | ||||||
International LBO | 17.2 | 9.0 | % | 13.3 | 7.1 | % | ||||||
Merchant Banking | 5.0 | 2.6 | % | 5.8 | 3.1 | % | ||||||
Other | 15.6 | 8.2 | % | 17.3 | 9.3 | % | ||||||
Total Venture Capital Partnership Investments by Sector | $ | 190.9 | 100.0 | % | $ | 186.2 | 100.0 | % | ||||
27
Exhibit 19
(Unaudited)
PROBLEM, POTENTIAL PROBLEM AND RESTRUCTURED COMMERCIAL
MORTGAGES AT CARRYING VALUE
As of | As of | |||||||
June 30, | December 31, | |||||||
2003 | 2002 | |||||||
($ millions) | ||||||||
Total Commercial Mortgages | $ | 1,492.9 | $ | 1,570.5 | ||||
Problem commercial mortgages (1) | — | — | ||||||
Potential problem commercial mortgages | 42.9 | 104.7 | ||||||
Restructured commercial mortgages | 9.1 | 20.4 | ||||||
Total problem, potential problem and restructured commercial mortgages | $ | 52.0 | $ | 125.1 | ||||
Total problem, potential problem and restructured commercial mortgages as % of total commercial mortgages | 3.5 | % | 8.0 | % | ||||
Valuation allowances/writedowns (2) | ||||||||
Potential problem loans | $ | 0.0 | $ | 6.6 | ||||
Restructured loans | 2.1 | 8.0 | ||||||
Total valuation allowances/writedowns | $ | 2.1 | $ | 14.6 | ||||
Total valuation allowances as a percent of problem, potential problem and restructured commercial mortgages at carrying value before valuation allowances and writedowns | 3.9 | % | 10.5 | % | ||||
(1) | Problem commercial mortgages include delinquent loans and mortgage loans in foreclosure. |
(2) | Includes impairment writedowns recorded prior to adoption of SFAS No. 114, Accounting by Creditors for Impairment of a Loan. |
The Exhibit above includes invested assets in the Closed Block.
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Exhibit 20A
(Unaudited)
EQUITY REAL ESTATE
As of | As of | |||||
June 30, | December 31, | |||||
2003 | 2002 | |||||
($ millions) | ||||||
TYPE | ||||||
Real estate | $ | 152.7 | $ | 173.8 | ||
Subtotal | 152.7 | 173.8 | ||||
Foreclosed | 28.3 | 33.1 | ||||
Total | $ | 181.0 | $ | 206.9 | ||
29
Exhibit 20B
(Unaudited)
MORTGAGES AND REAL ESTATE
As of | As of | |||||||||||
June 30, 2003 | December 31, 2002 | |||||||||||
($ millions) | ($ millions) | |||||||||||
Geographic Region | ||||||||||||
Southeast | $ | 404.5 | 20.2 | % | $ | 457.2 | 21.9 | % | ||||
West | 371.9 | 18.5 | % | 367.1 | 17.6 | % | ||||||
Northeast | 248.8 | 12.4 | % | 261.9 | 12.6 | % | ||||||
Mountain | 377.0 | 18.8 | % | 392.4 | 18.8 | % | ||||||
Midwest | 343.2 | 17.1 | % | 367.8 | 17.7 | % | ||||||
Southwest | 260.2 | 13.0 | % | 238.0 | 11.4 | % | ||||||
$ | 2,005.6 | 100 | % | $ | 2,084.4 | 100 | % | |||||
As of | As of | |||||||||||
June 30, 2003 | December 31, 2002 | |||||||||||
($ millions) | ($ millions) | |||||||||||
Property Type: | ||||||||||||
Office Buildings | $ | 900.4 | 44.9 | % | $ | 924.2 | 44.3 | % | ||||
Agricultural | 332.5 | 16.6 | % | 308.3 | 14.8 | % | ||||||
Hotel | 272.9 | 13.6 | % | 274.3 | 13.2 | % | ||||||
Retail | 135.7 | 6.8 | % | 142.9 | 6.9 | % | ||||||
Industrial | 161.1 | 8.0 | % | 188.2 | 9.0 | % | ||||||
Other | 106.6 | 5.3 | % | 123.2 | 5.9 | % | ||||||
Apartment Buildings | 96.4 | 4.8 | % | 123.3 | 5.9 | % | ||||||
$ | 2,005.6 | 100 | % | $ | 2,084.4 | 100 | % | |||||
The Exhibit above includes invested assets in the Closed Block.
30