EXHIBIT 99.1
[LOGO]PHOENIX
The Phoenix Companies, Inc. N E W S R E L E A S E
One American Row
PO Box 5056
Hartford CT 06102-5056
PhoenixWealthManagement.com
Contacts:
Media Relations Investor Relations
Alice S. Ericson Peter A. Hofmann
860-403-5946 860-403-7100
For Immediate Release
THE PHOENIX COMPANIES, INC. REPORTS SIGNIFICANTLY IMPROVED
FOURTH QUARTER AND FULL-YEAR 2004 RESULTS; ISSUES GUIDANCE FOR 2005
HARTFORD, Conn., February 8, 2005 - The Phoenix Companies, Inc. (NYSE: PNX) today reported significantly
improved fourth quarter and full-year 2004 results.
HIGHLIGHTS FOR THE FOURTH QUARTER 2004:
• Net income was $42.9 million, or $0.43 per diluted share, rising 48 percent from net income of $28.9
million, or $0.29 per share, in the 2003 fourth quarter.
• Total segment income was $26.0 million, or $0.26 per diluted share, rising 60 percent from $16.3 million,
or $0.16 per share, in the 2003 fourth quarter.
• Life and Annuity pre-tax segment income was $42.3 million, rising 48 percent from $28.6 million in the
2003 fourth quarter.
• The Asset Management segment posted a $0.1 million pre-tax loss, compared with $5.9 million in pre-tax
income in the 2003 fourth quarter.
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The Phoenix Companies, Inc....2
FOURTH QUARTER 2004 RESULTS
Earnings Summary Fourth Fourth
(millions) Quarter Quarter
2004 2003 Change
------------- ------------ -----------
Life Insurance $43.7 $26.4 $17.3
Annuities (1.4) 2.2 (3.6)
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Life and Annuity Segment 42.3 28.6 13.7
Asset Management Segment (.1) 5.9 (6.0)
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Operating Segment Income 42.2 34.5 7.7
Venture Capital Segment 7.2 1.3 5.9
Corporate and Other Segment (14.5) (13.4) (1.1)
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Total Segment Income, Before Income Taxes 34.9 22.4 12.5
Applicable Income Taxes 8.9 6.1 2.8
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Total Segment Income 1 26.0 16.3 9.7
Surplus Notes Tender Costs (6.4) - (6.4)
Gain on Equity Investment in Aberdeen, Net 28.3 - 28.3
Realized Gains, Net 3.0 17.3 (14.3)
Restructuring Costs and Other Items (8.0) (4.7) (3.3)
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Net Income $42.9 $28.9 $14.0
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Earnings Per Share Summary
Total Segment Income Per Share 1
Basic $.27 $.17 $.10
Diluted $.26 $.16 $.10
Net Income Per Share
Basic $.45 $.31 $.14
Diluted $.43 $.29 $.14
Weighted Average Shares Outstanding
Basic 94.8 94.4
Diluted 100.3 99.8
1 Total segment income is a non-GAAP financial measure that is presented in a manner consistent with the
way management evaluates operating results. A reconciliation of non-GAAP financial measures to GAAP is
provided in the tables at the end of this release.
"The benefits of the initiatives we began two years ago grew throughout 2004 and were even more visible
this quarter. This was particularly true in Life and Annuity earnings and in total segment return on equity,
which rose 190 basis points from 2003's fourth quarter," said Dona D. Young, chairman, president and chief
executive officer. "Sales, however, did not meet our expectations this quarter or for the year. This was
mostly due to our decision to maintain pricing and risk management discipline in the face of prolonged
competition from aggressively priced secondary guarantee products, and the impact of our exit from
affiliated retail distribution."
She continued, "Earnings in Life and Annuity have improved much more quickly than in Asset Management. We
expect a stronger, better positioned Asset Management business to emerge in 2005 as we continue to address
structural, performance and profitability challenges and begin to benefit from the expense initiatives
announced in the fourth quarter.
"A number of significant accomplishments in 2004 contributed to our earnings improvement and position us
well for the future," Mrs. Young said. "Our exit from affiliated retail distribution is already generating
significant savings, and we are building back sales from formerly affiliated producers. Outsourcing our
information technology infrastructure will produce meaningful savings beginning in 2005 and improve
service. We enhanced our financial flexibility through our two surplus notes
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The Phoenix Companies, Inc....3
transactions as well as our new credit facility. And, operationally, we continued to implement `lean
management' to improve product and service quality, create capacity for higher business volumes, and enhance
speed to market.
"We sequenced our turnaround to build financial stability and establish a solid foundation for growth
first. This stage is now behind us, clearly showing on our stronger balance sheet and in higher earnings. We
are moving forward, focused intensely on growth in 2005," Mrs. Young said.
HIGHLIGHTS FOR FULL-YEAR 2004:
• Net income was $81.0 million, or $0.80 per diluted share, compared with a net loss of $6.2 million, or a
$0.07 loss per share in 2003.
• Total segment income of $80.6 million, or $0.80 per diluted share, rose 41 percent from $57.3 million, or
$0.59 per share, in 2003.
• Life and Annuity pre-tax segment income of $142.8 million was up 44 percent from $99.4 million in 2003.
• The Asset Management segment posted a pre-tax gain of $0.1 million after an $8.7 million pre-tax loss in
2003.
FULL-YEAR 2004 RESULTS
Earnings Summary For the Year Ended
(millions) December 31,
-----------------------------
2004 2003 Change
------------- ------------ -----------
Life Insurance $134.5 $103.5 $31.0
Annuities 8.3 (4.1) 12.4
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Life and Annuity Segment 142.8 99.4 43.4
Asset Management Segment 0.1 (8.7) 8.8
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Operating Segment Income 142.9 90.7 52.2
Venture Capital Segment 19.3 36.2 (16.9)
Corporate and Other Segment (59.1) (47.8) (11.3)
------------- ------------ -----------
Total Segment Income, Before Income Taxes 103.1 79.1 24.0
Applicable Income Taxes 22.5 21.8 0.7
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Total Segment Income 1 80.6 57.3 23.3
Surplus Notes Tender Costs (6.4) - (6.4)
Gain (Loss) on Equity Investment in Aberdeen, Net 29.1 (55.0) 84.1
Realized Gains, Net 12.4 3.2 9.2
Restructuring Costs and Other Items (34.7) (11.7) (23.0)
------------- ------------ -----------
Net Income (Loss) $81.0 $(6.2) $87.2
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Earnings Per Share Summary
Total Segment Income Per Share 1
Basic $.85 $.61 $.24
Diluted $.80 $.59 $.21
Net Income (Loss) Per Share
Basic $.86 $(.07) $.93
Diluted $.80 $(.07) $.87
Weighted Average Shares Outstanding
Basic 94.7 94.2
Diluted 100.8 96.6
1 Total segment income is a non-GAAP financial measure that is presented in a manner consistent with the way
management evaluates operating results. A reconciliation of non-GAAP financial measures to GAAP is
provided in the tables at the end of this release.
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The Phoenix Companies, Inc....4
YEAR-END 2004 STATUTORY RESULTS FOR PHOENIX LIFE INSURANCE COMPANY
• Statutory surplus and asset valuation reserve increased by more than $60 million during 2004, the first
increase since 2000, ending the year at over $1 billion.
• The company maintained risk-based capital well above its 300 percent target. It expects the impact of the
Aberdeen and Lombard sales (described later in this news release) to further increase risk-based capital
in the first half of 2005.
• Full-year statutory net gain from operations was $35.1 million, net of non-recurring charges of $40
million relating to the sale of retail affiliated distribution, outsourcing information technology
infrastructure, surplus notes tender and issuance costs, and taxes resulting from the resolution of a
restructured investment.
2005 GUIDANCE
Phoenix said today that it is targeting a total segment return on equity of 5.5 to 6.0 percent in 2005,
compared with the 4.2 percent achieved for the full-year 2004. This target is based on a number of market
assumptions and other factors, including equity returns (dividends and market appreciation) of 10 percent
for the year, gradually rising interest rates to a year-end level of 4.75 percent for 5-year Treasury Bonds,
and an investment income return of 12 percent on venture capital investments. In addition, the company said
it is targeting a pre-tax operating margin before intangible amortization and minority interest of 18
percent or more in its Asset Management segment, subject to the same market assumptions. The company said it
is targeting double-digit growth in total life insurance sales for 2005 and positive net flows in asset
management and variable annuities. The company's focus on innovative product development, leveraging
distribution and promoting investment funds with strong performance will contribute to achieving these sales
and flow objectives.
These targets represent forward-looking statements and are subject to the risks and uncertainties
outlined at the end of this news release. Specifically, to the extent that actual interest rates or equity
and venture capital returns differ from the assumptions outlined above, the company's performance could
differ materially from the targeted levels. Total segment return on equity and operating margin, which are
non-GAAP financial measures, are further described in the tables above and in the reconciliation table at
the end of this news release.
SEGMENT RESULTS
Phoenix has two operating segments, "Life and Annuity" and "Asset Management," and two reporting
segments, "Venture Capital" and "Corporate and Other." The Corporate and Other segment includes unallocated
capital, interest expense and other expenses, and certain businesses not of sufficient scale to report
independently.
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The Phoenix Companies, Inc....5
Life and Annuity Segment
The Life and Annuity segment had pre-tax income of $42.3 million in the fourth quarter of 2004, a 48
percent increase from the $28.6 million reported for the prior year's fourth quarter, and the highest level
since Phoenix became a public company in June 2001. The life insurance business had fourth quarter 2004
pre-tax income of $43.7 million, a 66 percent increase from the $26.4 million reported for the 2003 fourth
quarter. The annuity business recorded a $1.4 million pre-tax loss in the quarter, compared with $2.2
million pre-tax income in the fourth quarter of 2003. The 2004 fourth quarter annuity result includes an
estimated $3.0 million non-cash charge resulting from a refinement in deferred acquisition cost
amortization.
For the full year 2004, this segment had pre-tax income of $142.8 million, a 44 percent increase from the
$99.4 million reported for 2003. The life insurance business had full-year 2004 pre-tax income of $134.5
million, a 30 percent increase from the $103.5 million reported for 2003. The annuity business also showed
improvement with pre-tax income of $8.3 million, up from a $4.1 million pre-tax loss in 2003.
The quarterly and full-year earnings improvements reflect the benefits of expense savings, particularly
from the sale of Phoenix's retail affiliated distribution, and continued strong fundamentals including
mortality, investment margins and persistency.
Total wholesaled life sales were $41.3 million in the 2004 fourth quarter, compared with $78.4 million in
the prior year's fourth quarter. Full-year 2004 wholesaled life sales were $145.0 million, compared with
$199.2 million in 2003. Sales were lower due to the company's decision to maintain pricing and risk
management discipline, particularly relating to the universal life contracts with low-priced no-lapse
guarantees that prevailed in the market throughout the year. In addition, sales decreased as anticipated
after the sale of Phoenix's affiliated retail distribution to Linsco/Private Ledger (LPL) during the second
quarter and were slower to rebound than originally projected. These factors were compounded by the
longer-than-anticipated time to achieve ratings improvement, which the company continues to pursue in 2005.
Wholesaled annuity deposits were $94.0 million in the fourth quarter of 2004, compared with $153.9
million in the prior year's fourth quarter. For full-year 2004, wholesaled annuity deposits were $517.6
million, compared with $1.0 billion in 2003. These decreases reflect the company's strategic decisions in
the fall of 2003 to discontinue sales of deferred fixed annuities, and to focus annuity wholesaling on
select distribution relationships, as well as its sale of affiliated retail distribution in the 2004 second
quarter.
Wholesaled life and annuity sales exclude private placement deposits.
Total private placement life and annuity deposits were $37.0 million in the fourth quarter of 2004,
compared with $48.4 million in the prior year's fourth quarter. Full-year 2004 private placement life and
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The Phoenix Companies, Inc....6
annuity deposits were $212.6 million, compared with $544.4 million in 2003. Deposits from private placement
sales can vary widely because they involve fewer, but significantly larger, cases. Total private placement
assets under management were $1.9 billion on December 31, 2004, up from $1.5 billion on December 31, 2003.
Asset Management Segment
The Asset Management segment reported a $0.1 million pre-tax loss for the fourth quarter of 2004,
compared with pre-tax income of $5.9 million in the prior year's fourth quarter. The prior year's quarter
includes performance-based revenues that did not recur in the 2004 quarter.
The segment reported pre-tax income of $0.1 million for the full year 2004, compared with a $8.7 million
pre-tax loss in 2003. The improvement was driven by higher revenues from higher average assets under
management.
December 31, 2004 assets under management for the segment were $42.9 billion, compared with $46.3 billion
on December 31, 2003.
Net flows were negative $2.6 billion in the fourth quarter of 2004 (inflows of $1.2 billion; outflows of
$3.8 billion), compared with negative net flows of $635.7 million in the prior year's fourth quarter
(inflows of $1.7 billion; outflows of $2.4 billion). Full-year 2004 net flows were negative $6.6 billion
(inflows of $6.7 billion; outflows of $13.3 billion), compared with negative $1.2 billion in 2003 (inflows
of $7.0 billion; outflows of $8.2 billion).
The quarterly and annual negative net flows were driven primarily by poor performance, particularly in
equity products, and by $1.7 billion of fixed income institutional redemptions earlier in the year that were
unrelated to performance. Equity products accounted for 78 percent of total redemptions in the fourth
quarter and 71 percent for full-year 2004. Fixed income products performed strongly, with positive net flows
for the year, excluding the institutional outflows noted above. Retail mutual fund sales rose by 28 percent,
quarter over quarter, and 12 percent for the full year, reflecting the strong fixed income and specialty
fund performance.
Venture Capital Segment
The Venture Capital segment had pre-tax income of $7.2 million in the 2004 fourth quarter, compared with
income of $1.3 million in the prior year's fourth quarter. For full-year 2004, this segment had pre-tax
income of $19.3 million, compared with income of $36.2 million in 2003. The quarterly improvement reflects
the more favorable equity markets in the 2004 fourth quarter, while the full-year result reflects the
reduced growth in the equity markets as compared to 2003.
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The Phoenix Companies, Inc....7
Corporate and Other Segment
The Corporate and Other segment had a pre-tax loss of $14.5 million in the fourth quarter, compared with
a $13.4 million loss in the prior year's fourth quarter. For full-year 2004, this segment had a $59.1
million pre-tax loss, compared with a $47.8 million loss for full-year 2003. The quarterly and full-year
results reflect higher earnings from the company's international operations offset by higher regulatory
compliance and corporate information technology costs and lower corporate investment income.
INVESTMENT PORTFOLIO
The company reported net realized investment gains of $3.0 million for the fourth quarter of 2004,
compared with net realized gains of $17.3 million for the prior year's fourth quarter. The prior year's
fourth quarter includes net realized gains of $23.6 million from the sale of interests in two General
Electric life insurance subsidiaries and in PXRE Group, Ltd.
Fourth quarter 2004 net bond impairments were $6.9 million, a significant improvement over the $21.6
million in net impairments in the 2003 fourth quarter, as favorable credit market conditions continued.
These net bond impairments include gross impairments of $6.1 million and $19.3 million, respectively,
adjusted for gains and additional losses on the sales of previously impaired assets.
For full-year 2004, the company reported net realized investment gains of $12.4 million, compared with
net realized gains of $3.2 million in 2003, excluding realized gains and losses associated with the
company's investment in Aberdeen Asset Management and consolidated non-recourse CDOs (described later in
this news release).
EXIT OF NON-STRATEGIC ASSETS
Early in the first quarter of 2005, Phoenix closed on the sales of its two largest remaining
non-strategic assets, Aberdeen Asset Management Plc and Lombard International Assurance S.A. These
transactions essentially complete the objective to exit non-strategic assets that the company set in the
fourth quarter of 2002. Since then, through January 2005, Phoenix has monetized approximately $703 million
in non-strategic assets.
Aberdeen Asset Management Plc
Fourth quarter and full-year 2004 non-recurring items include after-tax net gains of $28.3 million and
$29.1 million, respectively, related to Phoenix's 16.2 percent equity stake in Aberdeen Asset Management
Plc. These gains reflect a $43.0 million after-tax unrealized trading security gain, partially offset by a
$14.7 million after-tax, non-cash charge related to Phoenix's proportionate share of Aberdeen's December
24, 2004 settlement with the United Kingdom's Financial Services Authority.
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The Phoenix Companies, Inc....8
On January 14, 2005, the company closed on the sale of its entire equity stake in Aberdeen for net
proceeds of $70.4 million. The company expects to recognize an approximate $7.0 million after-tax loss
related to this sale in its first quarter 2005 results. Phoenix's 2003 full year results reflect a $55.0
million after-tax, non-cash charge related to the second quarter 2003 other-than-temporary impairment of its
equity stake in Aberdeen.
Lombard International Assurance S.A.
Phoenix closed on the sale of its 12 percent equity holdings in Lombard International Assurance S.A. on
January 11, 2005 for proceeds of $59.0 million. The company expects to recognize an approximate $5.0 million
after-tax gain related to this sale in its first quarter 2005 results.
ADDITIONAL ITEMS
• Significant transactions during the fourth quarter:
- Phoenix Life closed on the tender offer for its 6.95 percent surplus notes scheduled to mature on
December 1, 2006, receiving valid tenders of $144.8 million. This transaction resulted in a fourth
quarter non-recurring after-tax charge of $6.4 million for costs incurred, including the tender
premium. Concurrent with the closing of the tender offer, Phoenix Life issued $175 million, 7.15
percent surplus notes maturing December 15, 2034.
- Phoenix entered into a new $150 million three-year, unsecured senior revolving credit facility
replacing the prior facility that was to expire during the quarter.
• Restructure charges for the 2004 fourth quarter of $8.0 million principally relate to employee severance
and other transition costs associated with the transition of the company's information technology
infrastructure to Electronic Data Systems (EDS). This transition and related costs are expected to be
completed by the end of the second quarter of 2005. Restructure charges for the full year 2004 of $21.9
million principally relate to the EDS transition and the second quarter sale of the company's affiliated
retail distribution operations.
• Full-year 2004 net income reflects the impact of impairments in certain non-recourse CDO investment pools
consolidated on Phoenix's balance sheet under FIN 46-R. These losses, which totaled $12.9 million, or
$0.13 per diluted share, in 2004, will reverse as the CDOs mature, are liquidated or are deconsolidated.
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The Phoenix Companies, Inc....9
CONFERENCE CALL
The Phoenix Companies, Inc. will host a conference call today at 11:00 a.m. Eastern time to discuss with
the investment community Phoenix's fourth quarter and full-year financial results. The conference call will
be broadcast live over the Internet at www.PhoenixWealthManagement.com in the Investor Relations section. To
listen to the live call, please go to the Web site at least fifteen minutes prior to register, and to
download and install any necessary audio software. The call also can be accessed by telephone at
1-973-321-1020. A replay of the call will be available through February 22, 2005 by telephone at
1-973-341-3080 (passcode 5548339) and on Phoenix's Web site, www.PhoenixWealthManagement.com in the Investor
Relations section.
The Phoenix Companies, Inc. is a leading manufacturer of life insurance, annuity and asset management
products for the accumulation, preservation and transfer of wealth. With a history dating back to 1851, The
Phoenix Companies, Inc. has two principal operating subsidiaries, Phoenix Life Insurance Company and Phoenix
Investment Partners, Ltd. Through a variety of advisors and financial services firms, the company provides
products and services to affluent and high-net-worth individuals and to institutions. Phoenix has corporate
offices in Hartford, Connecticut.
FORWARD-LOOKING STATEMENT
This release may contain forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. The company intends these forward-looking statements to be covered by the
safe harbor provisions of the federal securities laws relating to forward-looking statements. These include
statements relating to trends in, or representing management's beliefs about, the company's future
strategies, operations and financial results, as well as other statements including words such as
"anticipate", "believe," "plan," "estimate," "expect," "intend," "may," "should" and other similar
expressions. Forward-looking statements are made based upon management's current expectations and beliefs
concerning trends and future developments and their potential effects on the company. They are not
guarantees of future performance. Actual results may differ materially from those suggested by
forward-looking statements as a result of risks and uncertainties which include, among others: (i) changes
in general economic conditions, including changes in interest and currency exchange rates and the
performance of financial markets; (ii) heightened competition, including with respect to pricing, entry of
new competitors and the development of new products and services by new and existing competitors; (iii) the
company's primary reliance, as a holding company, on dividends and other payments from its subsidiaries to
meet debt payment obligations, particularly since the company's insurance subsidiaries' ability to pay
dividends is subject to regulatory restrictions; (iv) regulatory, accounting or tax developments that may
affect the company or the cost of, or demand for, its products or services; (v) downgrades in financial
strength ratings of the company's insurance subsidiaries or in
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The Phoenix Companies, Inc....10
the company's credit ratings; (vi) discrepancies between actual claims experience and assumptions used in
setting prices for the products of insurance subsidiaries and establishing the liabilities of such
subsidiaries for future policy benefits and claims relating to such products; (vii) movements in the equity
markets that affect our investment results, including those from venture capital, the fees we earn from
assets under management and the demand for our variable products; (viii) the company's continued success in
achieving planned expense reductions; (ix) the effects of closing the company's retail brokerage operations;
and (x) other risks and uncertainties described in any of the company's filings with the Securities and
Exchange Commission. The company undertakes no obligation to update or revise publicly any forward-looking
statement, whether as a result of new information, future events or otherwise.
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The Phoenix Companies Inc....11
Financial Highlights
Three and Twelve Months Ended December 31, 2004 and 2003
(Unaudited)
Three Months Twelve Months
------------------------ ------------------------
2004 2003 2004 2003
---------- ---------- ---------- ----------
Income Statement Summary ($ in millions)
Revenues $ 718.4 $ 715.2 $ 2,720.0 $ 2,631.5
Total Segment Income (1) 26.0 16.3 80.6 57.3
Net Income (loss) From Continuing Operations 42.9 29.8 80.9 (4.1)
Net Income (loss) $ 42.9 $ 28.9 $ 81.0 $ (6.2)
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Earnings Per Share
Weighted Average Shares Outstanding (in thousands)
Basic 94,830 94,398 94,676 94,218
Diluted 100,265 99,788 100,775 96,559
========== ========== ========== ==========
Total Segment Income Per Share (1)
Basic $ 0.27 $ 0.17 $ 0.85 $ 0.61
Diluted $ 0.26 $ 0.16 $ 0.80 $ 0.59
========== ========== ========== ==========
Net Income (loss) From Continuing Operations
Basic $ 0.45 $ 0.32 $ 0.85 $ (0.04)
Diluted $ 0.43 $ 0.30 $ 0.80 $ (0.04)
========== ========== ========== ==========
Net Income (loss) Per Share
Basic $ 0.45 $ 0.31 $ 0.86 $ (0.07)
Diluted $ 0.43 $ 0.29 $ 0.80 $ (0.07)
========== ========== ========== ==========
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Balance Sheet Summary December December
($ in millions, except share and per share data) 2004 2003
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Invested Assets $ 17,304.7 $ 17,229.2
Separate Account Assets 6,950.3 6,083.2
Total Assets 28,356.3 27,559.2
Indebtedness 690.8 639.0
Total Stockholders' Equity $ 2,016.9 $ 1,947.8
Common Shares outstanding (in thousands) 94,878 94,446
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Book Value Per Share $ 21.26 $ 20.62
Book Value Per Share, excluding SFAS 115 and Other
Accumulated OCI and FIN 46-R 21.22 20.39
Third Party Assets Under Management $ 42,908.4 $ 46,260.5
(1) In addition to net income presented in accordance with Generally Accepted Accounting Principles ("GAAP"),
The Phoenix Companies, Inc., or Phoenix, considers total segment income in evaluating its financial
performance. A reconciliation of these measures is provided at the end of this release. Total segment
income is an internal performance measure used by Phoenix in the management of its operations, including
its compensation plans and planning processes. Management believes that segment income provides additional
insight into the underlying trends in Phoenix's operations.
Total segment income represents income from continuing operations (which is a GAAP measure) before
realized investment gains and losses and certain other items.
* Net realized investment gains and losses are excluded from total segment income because their size and
timing are frequently subject to our discretion.
* Certain other items are excluded from total segment income because we believe they are (i) not
indicative of overall operating trends; and (ii) infrequent and material and result from a business
restructuring, a change in regulatory requirements, or other unusual circumstances.
Because certain of these items are excluded based on our discretion and involve judgments by management,
inconsistencies in their determination may exist and total segment income may differ from similarly titled
measures of other companies.
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The Phoenix Companies Inc....12
Consolidated Balance Sheet
December 31, 2004 (Preliminary) and December 31, 2003
(in millions, except share data)
2004 2003
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ASSETS:
Available-for-sale debt securities, at fair value $ 13,476.3 $ 13,273.0
Available-for-sale equity securities, at fair value 304.3 312.0
Trading equity securities, at fair value 87.3 -
Mortgage loans, at unpaid principal balances 207.9 284.1
Venture capital partnerships, at equity in net assets 255.3 234.9
Affiliate equity securities, at equity in net assets - 47.5
Policy loans, at unpaid principal balances 2,171.8 2,227.8
Other investments 371.8 402.0
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16,874.7 16,781.3
Available-for-sale investments pledged as collateral,
at fair value 1,278.8 1,350.0
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Total investments 18,153.5 18,131.3
Cash and cash equivalents 430.0 447.9
Accrued investment income 227.3 222.3
Receivables 135.8 224.9
Deferred policy acquisition costs 1,429.9 1,367.7
Deferred income taxes 24.1 58.7
Intangible assets 308.4 335.1
Goodwill 427.2 419.9
Other assets 269.8 268.2
Separate account assets 6,950.3 6,083.2
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Total assets $ 28,356.3 $ 27,559.2
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LIABILITIES:
Policy liabilities and accruals 13,132.3 $ 13,088.6
Policyholder deposit funds 3,492.4 3,642.7
Stock purchase contracts 131.9 128.8
Indebtedness 690.8 639.0
Other liabilities 545.5 534.5
Non-recourse collateralized debt obligations 1,355.2 1,472.0
Separate account liabilities 6,950.3 6,083.2
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Total liabilities 26,298.4 25,588.8
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MINORITY INTEREST:
Minority interest in net assets of subsidiaries 41.0 22.6
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STOCKHOLDERS' EQUITY:
Common stock, $0.01 par value, 106,394,959 and
106,376,363 shares issued 1.0 1.0
Additional paid-in capital 2,430.9 2,428.8
Deferred compensation on restricted stock units (3.7) (3.6)
Accumulated deficit (286.8) (352.7)
Accumulated other comprehensive income 57.9 63.7
Treasury stock, at cost: 11,517,387 and
11,930,647 shares (182.4) (189.4)
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Total stockholders' equity 2,016.9 1,947.8
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Total liabilities, minority interest and
stockholders' equity $ 28,356.3 $ 27,559.2
========== ==========
Certain reclassifications have been made to the 2003 financial statements to conform with the 2004
presentation.
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The Phoenix Companies Inc....13
Consolidated Statement of Income (Unaudited)
Three and Twelve Months Ended December 31, 2004 and 2003
(in millions)
Three Months Twelve Months
------------------------ ------------------------
2004 2003 2004 2003
---------- ---------- ---------- ----------
REVENUES:
Premiums $ 250.9 $ 260.7 $ 990.6 $ 1,042.2
Insurance and investment product fees 141.4 161.4 591.8 582.4
Investment income, net of expenses 254.8 271.4 1,057.3 1,107.4
Unrealized investment gain on trading equity securities 67.3 - 67.3 -
Net realized investment gains (losses) 4.0 21.7 13.0 (100.5)
---------- ---------- ---------- ----------
Total revenues 718.4 715.2 2,720.0 2,631.5
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BENEFITS AND EXPENSES:
Policy benefits, excluding policyholder dividends 362.0 365.8 1,422.2 1,454.0
Policyholder dividends 94.9 108.6 404.7 418.8
Policy acquisition cost amortization 33.8 17.5 110.1 94.1
Intangible asset amortization 8.7 8.3 33.8 33.2
Interest expense 11.0 10.1 40.8 39.6
Interest expense on non-recourse collateralized
obligations 8.1 11.1 33.6 48.9
Other operating expenses 133.8 147.3 546.5 553.1
---------- ---------- ---------- ----------
Total benefits and expenses 652.3 668.7 2,591.7 2,641.7
---------- ---------- ---------- ----------
Income (loss) from continuing operations before
income taxes and minority interest 66.1 46.5 128.3 (10.2)
Applicable income taxes (benefit) 19.4 12.3 33.1 (18.5)
---------- ---------- ---------- ----------
Income from continuing operations before
minority interest 46.7 34.2 95.2 8.3
Minority interest in net income of subsidiaries 3.8 4.4 14.3 12.4
---------- ---------- ---------- ----------
Income (loss) from continuing operations 42.9 29.8 80.9 (4.1)
Income (loss) from discontinued operations - (0.9) 0.1 (2.1)
---------- ---------- ---------- ----------
Net income (loss) $ 42.9 $ 28.9 $ 81.0 $ (6.2)
========== ========== ========== ==========
Certain reclassifications have been made to the 2003 financial statements to conform with the 2004
presentation.
-more-
The Phoenix Companies Inc....14
Reconciliation of Income Measures (Unaudited)
Three and Twelve Months Ended December 31, 2004 and 2003
(in millions)
Three Months Twelve Months
------------------------ ------------------------
2004 2003 2004 2003
---------- ---------- ---------- ----------
Segment Income
Life insurance $ 43.7 $ 26.4 $ 134.5 $ 103.5
Annuity (1.4) 2.2 8.3 (4.1)
---------- ---------- ---------- ----------
Life and annuity segment 42.3 28.6 142.8 99.4
Asset management segment (0.1) 5.9 0.1 (8.7)
Venture capital segment 7.2 1.3 19.3 36.2
Corporate and other segment (14.5) (13.4) (59.1) (47.8)
---------- ---------- ---------- ----------
Total segment income, before income taxes 34.9 22.4 103.1 79.1
Applicable income taxes 8.9 6.1 22.5 21.8
---------- ---------- ---------- ----------
Total segment income 26.0 16.3 80.6 57.3
Realized investment gains, after income taxes
and other offsets 3.0 17.3 12.4 3.2
Realized gains (losses) from collateralized
debt obligations - 0.4 (12.9) (2.4)
Gain (loss) on equity investment in Aberdeen,
net of income taxes 28.3 - 29.1 (55.0)
Income (loss) from discontinued operations,
net of income taxes - (0.9) 0.1 (2.1)
Restructuring charges, net of income taxes (8.0) (4.2) (21.9) (8.5)
Other income, net of income taxes - - - 1.3
Surplus notes tender costs, net of income taxes (6.4) - (6.4) -
---------- ---------- ---------- ----------
Net income (loss) $ 42.9 $ 28.9 $ 81.0 $ (6.2)
========== ========== ========== ==========
Certain reclassifications have been made to the 2003 financial statements to conform with the 2004
presentation.
Note: For additional information, see our financial supplement at PhoenixWealthManagement.com.
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