UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report: February 6, 2003 -------------------------------- (Date of earliest event reported) THE PHOENIX COMPANIES, INC. --------------------------- (Exact name of registrant as specified in its charter) Delaware 1-16517 06-0493340 -------- ------- ---------- (State or other jurisdiction of (Commission File Number) (IRS Employer Identification No.) incorporation) One American Row, Hartford, Connecticut 06102-5056 -------------------------------------------------- (Address of principal executive offices) (Zip Code) 860-403-5000 ------------ (Registrant's telephone number, including area code) Item 9. Other Information. On February 6, 2003, The Phoenix Companies, Inc., a Delaware corporation, reported its fourth quarter and full-year 2002 results; announces additional actions in support of key priorities and strategic plan; revises ROE target, a copy of which is attached hereto as Exhibit 99.1 and is incorporated herein by reference. Item 7. Exhibits. 99.1 News release of The Phoenix Companies Inc., dated February 6, 2003, regarding fourth quarter and full-year 2002 results; announces additional actions in support of key priorities and strategic plan; revises ROE target. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. THE PHOENIX COMPANIES, INC. By: /s/ Carole A. Masters ------------------------------------------- Name: Carole A. Masters Title: Vice President and Counsel Date: February 6, 2003 EXHIBIT INDEX Exhibit Number Exhibit - -------------- ------- 99.1 News release of The Phoenix Companies Inc., dated February 6, 2003, regarding fourth quarter and full-year 2002 results; announces additional actions in support of key priorities and strategic plan; revises ROE target. Exhibit 99.1 [GRAPHIC OMITTED][GRAPHIC OMITTED] 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 For Immediate Release Contacts: Media Relations Investor Relations --------------- ------------------ Alice S. Ericson Peter A. Hofmann 860-403-5946 860-403-7100 PHOENIX REPORTS FOURTH QUARTER AND FULL-YEAR 2002 RESULTS; ANNOUNCES ADDITIONAL ACTIONS IN SUPPORT OF KEY PRIORITIES AND STRATEGIC PLAN; REVISES ROE TARGET HARTFORD, Conn., February 6, 2003 - The Phoenix Companies, Inc. (NYSE: PNX) today reported fourth quarter and full-year 2002 results and announced additional actions in support of its key priorities and strategic plan, as well as a revised return on equity target. FOURTH QUARTER AND FULL-YEAR 2002 RESULTS The company reported fourth quarter 2002 cash operating income, excluding venture capital, of $21.0 million, or $0.22 per share, compared with $28.2 million, or $0.27 per share, in the fourth quarter of 2001. The company also reported operating income of $11.4 million, or $0.12 per share, for the quarter, compared with operating income of $22.7 million, or $0.22 per share, in the fourth quarter of 2001. The company reported a GAAP net loss of $14.5 million, or a $0.15 loss per share, in the fourth quarter of 2002, compared with a $7.5 million net loss, or a $0.07 loss per share, in the fourth quarter of 2001. (See reconciliation of financial measures below.) The fourth quarter 2002 GAAP result includes net realized investment losses of $22.7 million, after income taxes, primarily related to credit losses in the bond portfolio. It also includes a previously announced charge of $3.1 million, after income taxes, related to staff reductions in investment management and annuity distribution, information technology, international operations, and other areas of the company. For full-year 2002, the company reported cash operating income, excluding venture capital, of $78.1 million, or $0.80 per share, compared with $86.6 million, or $0.83 per share, in 2001. The company also reported an operating loss of $61.7 million, or a $0.63 loss per share, for the year, principally related to losses in its Venture Capital segment and a third quarter non-cash goodwill charge. This compares with an operating loss of $74.1 million, or a $0.71 loss per share, in 2001. The company reported a full-year 2002 GAAP net loss of $246.0 million, or a $2.51 loss per share, compared with a $202.7 million net loss, or a $1.94 loss per share, in the prior year. "Our results very clearly show our areas of strength and the areas in which we must improve," said Dona D. Young, president and chief executive officer. "Our core life operation performed well, once again demonstrating the strength of our franchise. However, results from our annuity and investment management operations were significantly affected by the prolonged difficult markets and point to the need for continued action to improve margins." ACTIONS IN SUPPORT OF STRATEGIC PLAN "Following the strategic review I initiated late last year, we are strongly reaffirming our commitment to our wealth management strategy and our core businesses and intensifying our focus on execution," said Mrs. Young. "All our efforts are now directed toward four key priorities: manufacturing profitable wealth management products and services, lowering expenses, enhancing capital and resource allocation strategies, and redesigning our compensation and benefits in support of our goals. "Within this framework, we have already begun taking aggressive actions to achieve consistent, quality earnings and profitable growth," she added. "We are concentrating first on those areas where we can achieve immediate results, and shareholders can expect continued action throughout 2003. Everything we do is guided by our stated priorities and a commitment to building the value of our business over time. We expect the successful execution of our strategy to drive ratings improvement over the next 12 to 18 months." The company announced several actions today in support of its key priorities and strategic plan. They are: o The agreement to sell, subject to receipt of general partner consents, a $53.5 million portfolio of its venture capital limited partnership interests, along with unfunded commitments of $28.1 million, half to third parties and the other half to Phoenix Life Insurance Company's closed block. The sale is intended to reduce the company's exposure to the equity markets and mitigate earnings volatility, while also improving Phoenix Life's capital ratios and enhancing the closed block's potential long-term returns. Net proceeds from the sale to third parties will be $26.8 million; the transfer to the closed block will be in exchange for assets of equal value as determined by the terms of the third-party sale. Phoenix recognized an after-tax realized loss of $3.3 million in the fourth quarter related to the partnership interests included in this transaction. o Additional annualized expense savings of $4 million by year-end 2003 through general operational expense reductions, primarily in Investment Management, and $6 million more by year-end 2006 from the implementation of a comprehensive facilities plan. The plan includes the sale of the company's Enfield, Conn., offices, which will be placed on the market within 30 days. Business functions from Enfield will be relocated to the company's existing Hartford offices and a yet-to-be identified smaller facility in Hartford or north of Hartford. The company will continue to identify ways to reduce overhead and administrative and back-office costs in an effort led by the company's Chief Accounting Officer. In December, Phoenix announced a series of actions to lower annualized expenses by approximately $30 million by year-end 2003. These actions will result in a 5 percent reduction of the company's employee base. They include closing certain of its international operations and adjusting the size of its distribution force in annuities and investment management to reflect the current market environment. With the actions announced today, the company expects to reduce annualized expenses by approximately $34 million in 2003 and by $40 million by the end of 2006. These reductions are in addition to the efforts that produced annualized expense savings of approximately $29 million at the end of 2002. Phoenix also took significant steps in the fourth quarter to enhance its capital position and return Phoenix Life's risk-based capital back above the company's target level. Phoenix monetized a significant portion of its holdings in Hilb, Rogal and Hamilton Company (HRH) in November and completed an offering of equity units in December. The HRH transactions produced net proceeds of approximately $157 million and a total net gain, after tax, of $38.8 million, with $6.4 million realized in the fourth quarter of 2002, and an additional $32.4 million deferred to the fourth quarter of 2005. The issuance of the equity units produced net proceeds of approximately $149 million, which were used primarily to pay down bank debt. By the end of this quarter, the company expects to reach a decision on the securitization of the residual assets associated with its closed block. Proceeds from such a transaction would be used to further strengthen the life insurance company. The company also has redesigned its annual incentive compensation plans for all employees to further align incentive pay with the drivers of shareholder value. These plans set company-wide performance goals and related departmental metrics. Management will present the plans to the Board of Directors for approval later in February. These actions will support the specific 2003 priorities Phoenix has set for its life insurance, annuity and investment management businesses. o Life Insurance - Target 12 to 15 percent annual sales growth through accelerated product introductions and expansion of its distribution relationships with key firms. o Annuities - Eliminate products with lower profit potential and launch new products that capitalize on emerging needs, such as income protection and asset allocation strategies, and selectively expand distribution channels, including regional and community banks. o Investment Management - Focus on achieving strong relative investment performance and improving cash margins while seeking to identify a new head of the operation by the end of this quarter. ROE "Today's actions, in combination with prior steps and anticipated 2003 performance, should enable Phoenix to generate, on an annualized run rate by the fourth quarter 2003, a 6 to 8 percent cash return on equity, excluding venture capital," Mrs. Young said. "This target assumes an equity market return of 7 percent or better for the year." FOURTH QUARTER AND FULL-YEAR 2002 SEGMENT RESULTS Phoenix has two operating segments, "Life and Annuity" and "Investment Management", and two reporting segments, "Venture Capital" and "Corporate and Other". The Corporate and Other segment includes unallocated capital, interest expense and other expenses, as well as certain businesses not of sufficient scale to report independently. The company looks at its segment results on the basis of operating income (loss) before amortization and taxes to better focus on the operating performance of each segment. Fourth Fourth For the Year Ended Quarter Quarter December 31, 2002 2001 2002 2001 -------------- ------------- ------------ ----------- (in millions) Life and Annuity $24.2 $24.7 $78.4 $83.5 Investment Management 10.3 14.1 40.3 54.1 Venture Capital (2.3) 15.6 (59.3) (159.6) Corporate and Other (16.4) (1.0) (48.9) (39.6) Life and Annuity - This segment reported operating income before income taxes of $24.2 million in the fourth quarter of 2002, compared with $24.7 million in the fourth quarter of 2001. Solid momentum in life insurance earnings was tempered by losses in annuities and increases in pension costs that were allocated across segments. Continued favorable mortality and persistency enabled the company to maintain strong insurance and investment margins on its life products. In addition, the closed block continued to perform well, as evidenced by the growth in the policyholder dividend obligation. Operating income for full-year 2002 was $78.4 million, compared with $83.5 million for full-year 2001, reflecting the impact of the adverse stock market and lower interest rates on annuity margins. For each of the life product lines, operating income increased quarter over quarter and year over year. Total life insurance sales (annualized premium and single premium) were a record $141.8 million in the fourth quarter of 2002, compared with $58.3 million in the prior year's quarter. Sales of private placement insurance drove the increase, which also reflects a 15 percent growth in wholesaled production. Annualized premium was $53.4 million in the fourth quarter of 2002, compared with $37.0 million in the prior year's quarter, driven by growth in private placements and universal life product sales. Sales from State Farm agents accounted for 18 percent of wholesaled annualized premium in the quarter. Average face amounts for new sales, including private placements, surpassed the $1 million mark for the first time, and increased to $954,000 for wholesaled production. Full-year 2002 total life insurance sales were $356.0 million, up 60 percent from 2001's $222.4 million in sales. While the majority of the growth was in private placements , wholesaled products also grew 12 percent, driven largely by sales from State Farm, which ended the year as the company's third largest life distribution relationship. Total variable universal life sales grew 58 percent in 2002 to $268.5 million from $169.9 million in 2001, and universal life sales in 2002 more than doubled to $66.8 million from $29.0 million in 2001. Full-year 2002 annualized premium was $170.3 million compared with $118.9 million in 2001. Annuity deposits in the fourth quarter of 2002 were $217.8 million, compared with $593.4 million in the prior year's quarter, primarily reflecting the company's decision to discontinue its Retirement Planner's Edge (RPE) variable annuity during the third quarter. Deposits for full-year 2002 were $2.3 billion compared with full-year 2001 deposits of $1.5 billion, reflecting strong sales of both RPE and fixed annuities during the first three quarters. Investment Management - Operating income before amortization and income taxes for the segment was $10.3 million in the fourth quarter of 2002, compared with $14.1 million in the fourth quarter of 2001. The result is due primarily to the decline in earnings from Aberdeen Asset Management, PLC, in which the company has an equity ownership interest. The segment's revenues were flat, with declines in most areas offset by the acquisition of a 60 percent interest in Kayne Anderson Rudnick Investment Management (KAR) in January. Expenses declined 4 percent, despite the KAR acquisition. Full-year 2002 operating income before amortization and taxes was $40.3 million, compared with $54.1 million in 2001, again, reflecting the effects of Aberdeen and declines in revenues, as well as additional revenues and expenses related to KAR. Assets under management for the segment on December 31, 2002 were $54.0 billion, compared with $52.1 billion on December 31, 2001. The year-over-year increase in assets under management is primarily attributable to the inclusion of KAR in 2002 and the issuance of the Phoenix-Mistic CBO in the third quarter, offset by negative market performance. Net flows were negative $73.6 million in the fourth quarter of 2002, compared with negative net flows of $593.5 million in the prior year's quarter, reflecting a significant turnaround in institutional accounts, offset by declines in mutual funds and variable products. Full-year 2002 net flows were $184.0 million, compared with full-year 2001 net flows of $459.0 million. For the year, increased sales of managed accounts, primarily related to the KAR acquisition, were offset by declines in sales of mutual funds, institutional accounts and variable products. Inflows totaled $1.8 billion in the fourth quarter of 2002, approximately the same as inflows in the prior year's quarter. Outflows were $1.9 billion in the fourth quarter of 2002, improved from the $2.4 billion of outflows in the prior year's quarter. Full-year 2002 inflows were $10.1 billion, compared with $9.5 billion in 2001. Outflows for the full-year 2002 were $10.0 billion, compared with $9.1 billion in 2001. Venture Capital - The Venture Capital segment, which represents 1 percent of the $16.8 billion of invested assets and cash in the general account portfolio, had a $2.3 million operating loss before income taxes in the fourth quarter of 2002. The loss was due to market appreciation offset by expenses, realized losses, and true-ups to partnership valuations for the third quarter. In the prior year's quarter, the segment had operating income of $15.6 million. Total distributions in the fourth quarter of 2002 were $7.0 million, compared with $17.3 million in the fourth quarter of 2001. Capital contributions were $11.5 million in the fourth quarter of 2002, compared with $11.7 million in the fourth quarter of 2001. For full-year 2002, partnership results declined largely in concert with their sectors in the equity markets. The segment posted a $59.3 million operating loss for the year, compared with an operating loss of $159.6 million for 2001. Total distributions for full-year 2002 were $41.8 million, compared with $63.0 million in 2001. Capital contributions for the full year were $42.2 million, compared with $47.0 million in 2001. On December 31, 2002, Venture Capital segment assets were $227.8 million. Corporate and Other - In the fourth quarter of 2002, the Corporate and Other segment had a $16.4 million operating loss before amortization and income taxes, compared with an operating loss of $1.0 million in the fourth quarter of 2001. For full-year 2002, this segment experienced an operating loss before amortization and income taxes of $48.9 million, compared with a loss of $39.6 million for full-year 2001. Increased interest expense, reduced investment earnings and higher losses from international investments were the key drivers of the losses for the quarter and the year. REALIZED GAINS AND LOSSES The company reported fourth quarter 2002 net realized investment losses after-tax of $22.7 million versus $22.1 million in the fourth quarter of 2001. On a pre-tax basis, gross credit losses of $39.4 million and a $14.9 million loss related to the company's investment in Argentina were partially offset by realized gains of $15.3 million from the HRH position and $7.3 million from the conversion of an equity position in Clark/Bardes, Inc. to debt. For the full-year 2002, net realized capital losses were $39.3 million versus $46.2 million in 2001. RECONCILIATION OF FINANCIAL MEASURES The company considers operating income and cash operating income, excluding venture capital, in evaluating its financial performance, in addition to net income presented in accordance with Generally Accepted Accounting Principles (GAAP). (See attached table reconciling these measures.) Operating income represents net income adjusted for realized investment gains and losses and nonrecurring items. Nonrecurring items include expenses related to Phoenix's demutualization and its acquisition of the PXP minority interest, an early retirement program, a first quarter 2002 adjustment to the amortization of deferred acquisition costs related to the closed block, management restructuring charges, surplus tax, and the cumulative effect of accounting changes. For cash operating income, the company adds back amortization of intangible assets to operating income to measure the ability of the business to generate cash earnings. When evaluating operating performance, the company also excludes the Venture Capital segment, a separate reporting segment, in order to focus on the performance of its core operating businesses. 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, as well as its 2003 priorities. 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, download and install any necessary audio software. The call can also be accessed by telephone at 973-321-1020. A replay of the call will be available by telephone at 973-341-3080 (passcode 3677372) and on Phoenix's Web site, WWW.PHOENIXWEALTHMANAGEMENT.COM in the Investor Relations section through February 20, 2003. Additional financial information can be accessed on Phoenix's Web site, WWW.PHOENIXWEALTHMANAGEMENT.COM, in the Investor Relations section. The Phoenix Companies, Inc. is a leading provider of wealth management products and services to individuals and institutions. Through a variety of advisors and financial services firms, Phoenix helps the affluent and high net worth accumulate, preserve and transfer their wealth with an innovative portfolio of life insurance, annuity and investment management products and services. Phoenix has corporate offices in Hartford, Conn. 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 changes that may affect the cost of, or demand for, the products or services of the company's subsidiaries; (v) downgrades in the claims paying ability or financial strength ratings of the company's subsidiaries or in its 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 success in achieving planned expense reductions; and (ix) 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. Financial Highlights (Unaudited) Income Statement Summary ($ in millions) Fourth Fourth Quarter Quarter Year-to-Date Year-to-Date 2002 2001 2002 2001 -------------- -------------- --------------- --------------- Revenues $ 611.8 $ 628.2 $ 2,452.9 $2,429.9 Operating Income (Loss) (1) 11.4 22.7 (61.7) (74.1) Add: Amortization of Goodwill and Intangibles 8.1 15.6 101.3 57.0 -------------- -------------- --------------- --------------- Cash Operating Income (Loss) 19.5 38.3 39.6 (17.1) Cash Operating Income, excluding Venture Capital 21.0 28.2 78.1 86.6 GAAP Reported: Net Loss (14.5) (7.5) (246.0) (202.7) - ----------------------------------------------------------- -------------- -- -------------- -- --------------- --- --------------- Earnings Per Share (2) Fourth Fourth Quarter Quarter Year-to-Date Year-to-Date 2002 2001 2002 2001 -------------- -------------- --------------- --------------- Operating EPS $ 0.12 $ 0.22 $ (0.63) $ (0.71) Cash Operating EPS $ 0.21 $ 0.37 $ 0.40 $ (0.16) Cash Operating EPS, excluding Venture Capital $ 0.22 $ 0.27 $ 0.80 $ 0.83 Net Loss Per Share $ (0.15) $ (0.07) $ (2.51) $ (1.94) - ----------------------------------------------------------- -------------- -- -------------- -- --------------- --- --------------- Balance Sheet Summary Fourth Fourth ($ in billions, except per share data) Quarter Quarter 2002 2001 -------------- -------------- Invested Assets $ 16.8 $ 14.4 Separate Account and Investment Trust Assets 5.7 5.6 Total Assets 25.1 22.5 Total Equity 2.0 2.4 Book Value Per Share (3) $ 21.61 $ 23.51 Assets Under Management $ 63.7 $ 61.2 (1) Operating income represents net income adjusted for realized gains and for some non-recurring items that are not indicative of the ongoing operations of the business segments. The size and timing of realized investment gains are often subject to management's discretion. Certain non-recurring items are removed from net income if, in management's opinion, they are not indicative of overall operating trends. While some of these items may be significant components of our net income, we believe operating income is an appropriate measure that represents the net income attributable to the ongoing operations of the business. However, operating income is not a substitute for net income determined in accordance with generally accepted accounting principles, and may be different from similarly titled measures of other companies. (2) Weighted average shares outstanding for fourth quarter 2002 is 94.2 million shares. Weighted average shares outstanding for fourth quarter 2001 is 103.3 million shares. Weighted average shares outstanding for year-to-date 2002 and 2001 are 97.9 million shares and 104.6 million pro forma shares, respectively. (3) Book value per share is based on 94.0 million and 101.9 million shares outstanding at year-end 2002 and 2001, respectively. Consolidated Balance Sheet December 31, 2002 and 2001 (in millions, except share data) 2002 2001 ------------------ ----------------- ASSETS: Available-for-sale debt securities, at fair value $ 11,851.2 $ 9,607.7 Equity securities, at fair value 391.2 290.9 Mortgage loans, at unpaid principal balances 468.8 535.8 Real estate, at lower of cost or fair value 69.6 83.1 Venture capital partnerships, at equity in net assets 228.6 291.7 Affiliate equity and debt securities 187.4 330.6 Policy loans, at unpaid principal balances 2,195.9 2,172.2 Other investments 313.8 282.4 ------------------ ----------------- Total investments 15,706.5 13,594.4 Cash and cash equivalents 1,058.5 815.5 Accrued investment income 192.3 203.1 Premiums, accounts and notes receivable 194.9 147.8 Reinsurance recoverable balances 22.4 21.3 Deferred policy acquisition costs 1,234.1 1,123.7 Premises and equipment 110.0 117.7 Deferred income taxes 41.4 1.8 Goodwill and other intangible assets 762.0 858.6 Net assets of discontinued operations 20.8 20.8 Other general account assets 88.5 50.7 Separate account and investment trust assets 5,692.4 5,570.0 ------------------ ----------------- Total assets $ 25,123.8 $ 22,525.4 ================== ================= LIABILITIES: Policy liabilities and accruals $ 12,826.4 $ 11,993.4 Policyholder deposit funds 3,249.3 1,368.2 Deferred income taxes -- -- Indebtedness 644.3 599.3 Delivery obligations under stock purchase contracts 147.2 -- Other general account liabilities 520.3 595.1 Separate account and investment trust liabilities 5,693.8 5,564.9 ------------------ ----------------- Total liabilities 23,081.3 20,120.9 ------------------ ----------------- MINORITY INTEREST: Minority interest in net assets of subsidiaries 10.8 8.8 ------------------ ----------------- STOCKHOLDERS' EQUITY: Common stock, $0.01 par value, 1.0 billion shares authorized; 106.4 million shares issued 1.0 1.0 Additional paid-in capital 2,421.5 2,410.4 Accumulated deficit (292.6) (30.8) Accumulated other comprehensive income 97.5 81.1 Treasury stock, at cost: 12.3 million and 4.5 million shares (195.7) (66.0) ------------------ ----------------- Total stockholders' equity 2,031.7 2,395.7 ------------------ ----------------- Total liabilities, minority interest and stockholders' equity $ 25,123.8 $ 22,525.4 ================== ================= Certain reclassifications have been made to the 2001 financial statements to conform with the year-end 2002 presentation. Consolidated Statement of Income (in millions) Period ended December 31 Fourth Fourth Quarter Quarter Year-to-Date Year-to-Date 2002 2001 2002 2001 ---------------- --------------- --------------- ---------------- REVENUES: Premiums $ 268.1 $ 276.7 $1,082.0 $ 1,112.7 Insurance and investment product fees 137.7 132.1 563.3 546.4 Net investment income 239.5 254.6 915.2 843.2 Net realized investment losses (33.5) (35.2) (107.6) (72.4) ---------------- --------------- --------------- ---------------- Total revenues 611.8 628.2 2,452.9 2,429.9 ---------------- --------------- --------------- ---------------- BENEFITS AND EXPENSES: Policy benefits 365.4 350.0 1,436.1 1,406.7 Policyholder dividends 107.4 98.4 401.8 400.1 Policy acquisition cost amortization 17.6 37.7 59.2 133.0 Intangible asset amortization 7.7 12.2 98.8 49.4 Interest expense 8.3 6.1 31.4 27.3 Demutualization expenses 0.1 1.1 1.8 25.9 Other operating expenses 133.8 131.7 584.7 628.1 ---------------- --------------- --------------- ---------------- Total benefits and expenses 640.3 637.2 2,613.8 2,670.5 ---------------- --------------- --------------- ---------------- Income (loss) before income taxes and minority interest (28.5) (9.0) (160.9) (240.6) Applicable income tax (benefit) expense (16.7) (3.6) (57.1) (110.5) ---------------- --------------- --------------- ---------------- Income (loss) before minority interest (11.8) (5.4) (103.8) (130.1) Minority interest in net income of subsidiaries 2.7 2.1 11.9 7.2 ---------------- --------------- --------------- ---------------- Income (loss) before cumulative effect of accounting changes (14.5) (7.5) (115.7) (137.3) Cumulative effect of accounting changes: Goodwill impairment -- -- (130.3) -- Securitized financial instruments, Venture capital partnerships and derivative financial instruments -- -- -- (65.4) ---------------- --------------- --------------- ---------------- Net loss $ (14.5) $ (7.5) $(246.0) $ (202.7) ================ =============== =============== ================ Certain reclassifications have been made to the 2001 financial statements to conform with the 2002 presentation. Reconciliation of Income Measures (in millions) Fourth Fourth Quarter Quarter Year-to-Date Year-to-Date 2002 2001 2002 2001 ------------- ----------- --------------- ---------------- GAAP Reported: Net Loss $(14.5) $ (7.5) $ (246.0) $ (202.7) ------------- ----------- --------------- ---------------- Less: Cumulative Effect of Accounting Changes -- -- (130.3) (16.6)(A) Net Realized Investment Gains (Losses), after tax (22.7)(B) (22.1) (39.4)(B) (46.2) Non-Recurring Items, after tax: Deferred Policy Acquisition Costs Adjustment -- -- 15.1 -- Expenses of Purchase of PXP Minority Interest -- (2.9) -- (52.8) Early Retirement Pension Adjustment -- (4.2) -- (15.5) Management Restructuring Reserve -- -- (25.4) -- Staff Reductions Expense (3.1) -- (3.1) -- Demutualization Expense (0.1) (1.0) (1.3) (23.9) Surplus tax -- -- -- 21.0 Other -- -- 0.1 5.4 ------------- ----------- --------------- ---------------- (25.9) (30.2) (184.3) (128.6) ------------- ----------- --------------- ---------------- Operating Income (Loss) 11.4 22.7 (61.7) (74.1)(C) Less: Venture Capital, after tax (1.5) 10.1 (38.5) (103.7) Add: Goodwill and Intangibles Amortization 8.1 15.6 101.3 57.0 ------------- ----------- --------------- ---------------- Cash Operating Income, Excluding Venture Capital $ 21.0 $ 28.2 $ 78.1 $ 86.6 ============= =========== =============== ================ (A) Cumulative effect of accounting changes excludes the cumulative effect of accounting change for venture capital partnerships. See (C) below. (B) Net realized investment gains and losses for 2002 are presented net of the related impact on the policyholder dividend obligation and deferred acquisition cost amortization for 2002. (C) Venture capital, after tax includes the cumulative effect of accounting change for venture capital partnerships of $75 million (pre tax) as management considers this when evaluating the financial performance of the venture capital reporting segment. Note: For additional information see our financial supplement.
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8-K Filing
Phoenix Companies (PNX) Inactive 8-KFinancial statements and exhibits
Filed: 6 Feb 03, 12:00am