Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Dec. 31, 2012 | Mar. 26, 2014 | Jun. 30, 2012 | |
Document And Entity Information | ' | ' | ' |
Entity Registrant Name | 'PHOENIX COMPANIES INC/DE | ' | ' |
Entity Central Index Key | '0001129633 | ' | ' |
Document Type | '10-K | ' | ' |
Document Period End Date | 31-Dec-12 | ' | ' |
Amendment Flag | 'false | ' | ' |
Current Fiscal Year End Date | '--12-31 | ' | ' |
Is Entity a Well-known Seasoned Issuer? | 'No | ' | ' |
Is Entity a Voluntary Filer? | 'No | ' | ' |
Is Entity's Reporting Status Current? | 'Yes | ' | ' |
Entity Filer Category | 'Accelerated Filer | ' | ' |
Entity Public Float | ' | ' | $20,000,000 |
Entity Common Stock, Shares Outstanding | ' | 5.7 | ' |
Document Fiscal Period Focus | 'FY | ' | ' |
Document Fiscal Year Focus | '2012 | ' | ' |
Consolidated_Balance_Sheets_Un
Consolidated Balance Sheets (Unaudited) (USD $) | Dec. 31, 2012 | Dec. 31, 2011 |
In Millions, unless otherwise specified | As restated and amended [Member] | |
ASSETS: | ' | ' |
Available-for-sale debt securities, at fair value (amortized cost of $11,718.0 and $11,267.0) | $12,656 | $11,797 |
Available-for-sale equity securities, at fair value (cost of $27.5 and $32.6) | 34.8 | 35.7 |
Limited partnerships and other investments | 577.3 | 565.3 |
Policy loans, at unpaid principal balances | 2,354.70 | 2,379.30 |
Derivative instruments | 157.4 | 162.2 |
Fair value option investments | 201.5 | 184 |
Total investments | 15,981.70 | 15,123.50 |
Cash and cash equivalents | 246.4 | 168.2 |
Accrued investment income | 170.3 | 175.6 |
Receivables | 666.5 | 648.6 |
Deferred policy acquisition costs | 902.2 | 1,119.20 |
Deferred income taxes, net | 49.4 | 120.6 |
Other assets | 243.1 | 230.1 |
Discontinued operations assets | 53.7 | 85.3 |
Separate account assets | 3,316.50 | 3,816.90 |
Total assets | 21,629.80 | 21,488 |
LIABILITIES: | ' | ' |
Policy liabilities and accruals | 12,656.70 | 12,631.40 |
Policyholder deposit funds | 3,040.70 | 2,432.20 |
Dividend obligations | 1,003.60 | 752.5 |
Indebtedness | 378.8 | 426.9 |
Other liabilities | 674.6 | 658 |
Discontinued operations liabilities | 48.4 | 74.4 |
Separate account liabilities | 3,316.50 | 3,816.90 |
Total liabilities | 21,119.30 | 20,792.30 |
CONTINGENCIES AND COMMITMENTS (NOTES 23, 24 & 25) | ' | ' |
STOCKHOLDERS' EQUITY: | ' | ' |
Common stock, $.01 par value: 116.0 million and 116.3 million shares outstanding | 0.1 | 1.3 |
Additional paid-in capital | 2,633.10 | 2,630.50 |
Accumulated other comprehensive loss | -249.3 | -230.7 |
Accumulated deficit | -1,697.20 | -1,528.70 |
Treasury stock, at cost: 11.7 million and 11.3 million shares | -182.9 | -179.5 |
Total The Phoenix Companies, Inc. stockholders' equity | 510.5 | 695.7 |
Noncontrolling interests | 6.7 | 2.8 |
Total stockholders' equity | 510.5 | 695.7 |
Total liabilities and stockholders' equity | $21,629.80 | $21,488 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Dec. 31, 2012 | Dec. 31, 2011 |
In Millions, except Share data, unless otherwise specified | ||
Available-for-sale debt securities, amortized cost | $11,718 | $11,267 |
Available-for-sale equity securities, at cost | 27.5 | 32.6 |
Common stock Par value | $0.01 | ' |
Shares outstanding | 5.7 | ' |
Treasury stock, Shares | 0.7 | ' |
As restated and amended [Member] | ' | ' |
Available-for-sale debt securities, amortized cost | ' | 11,267 |
Available-for-sale equity securities, at cost | ' | $32.60 |
Common stock Par value | ' | $0.01 |
Shares outstanding | ' | 5.8 |
Treasury stock, Shares | ' | 0.6 |
Consolidated_Statements_of_Com
Consolidated Statements of Comprehensive Income (USD $) | 12 Months Ended | ||
In Millions, except Share data, unless otherwise specified | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 |
REVENUES: | ' | ' | ' |
Premiums | $402.30 | ' | ' |
Fee income | 556.2 | ' | ' |
Net investment income | 829.3 | ' | ' |
Net realized investment losses: | ' | ' | ' |
Total other-than-temporary impairment ('OTTI') losses | -51.7 | ' | ' |
Portion of OTTI losses recognized in other comprehensive income ('OCI') | -22.9 | ' | ' |
Net OTTI losses recognized in earnings | -28.8 | ' | ' |
Net realized investment losses, excluding OTTI losses | 18.3 | ' | ' |
Net realized investment gains (losses) | -10.5 | ' | ' |
Gain on debt repurchase | 11.9 | ' | ' |
Total revenues | 1,789.20 | ' | ' |
BENEFITS AND EXPENSES: | ' | ' | ' |
Policy benefits, excluding policyholder dividends | 1,166.10 | ' | ' |
Policyholder dividends | 294.8 | ' | ' |
Policy acquisition cost amortization | 200 | ' | ' |
Interest expense on indebtedness | 30.8 | -31.8 | -31.8 |
Other operating expenses | 253.5 | ' | ' |
Total benefits and expenses | 1,945.20 | ' | ' |
Income from continuing operations before income taxes | -156 | ' | ' |
Income tax expense (benefit) | -3.7 | ' | ' |
Income (loss) from continuing operations | -152.3 | ' | ' |
Loss from discontinued operations, net of income taxes | -15.6 | ' | ' |
Net loss | -167.9 | ' | ' |
Less: Net income (loss) attributable to noncontrolling interests | 0.6 | ' | ' |
Net loss attributable to The Phoenix Companies, Inc. | -168.5 | ' | ' |
COMPREHENSIVE INCOME (LOSS): | ' | ' | ' |
Net loss attributable to The Phoenix Companies, Inc. | -168.5 | ' | ' |
Less: Net income (loss) attributable to noncontrolling interests | 0.6 | ' | ' |
Net loss | -167.9 | ' | ' |
Other comprehensive income (loss) before income taxes: | ' | ' | ' |
Net unrealized investment gains before income taxes | 56.7 | ' | ' |
Non-credit portion of OTTI losses recognized in OCI before income taxes | 37 | ' | ' |
Net pension liability adjustment before income taxes | -21.4 | ' | ' |
Net unrealized other gains (losses) before income taxes | ' | ' | ' |
Net unrealized derivative instruments gains (losses) before income taxes | ' | ' | ' |
Other comprehensive income (loss) before income taxes | 72.3 | ' | ' |
Less: Income tax expense (benefit) related to: | ' | ' | ' |
Net unrealized investment gains (losses) | 78 | ' | ' |
Non-credit portion of OTTI losses recognized in OCI | 12.9 | ' | ' |
Net pension liability adjustment | ' | ' | ' |
Net unrealized other gains (losses) | ' | ' | ' |
Net unrealized derivative instruments gains (losses) | ' | ' | ' |
Total income tax expense (benefit) | 90.9 | ' | ' |
Other comprehensive income (loss) | -18.6 | ' | ' |
Comprehensive income (loss) | -186.5 | ' | ' |
Less: Comprehensive income (loss) attributable to noncontrolling interests, net of income taxes | 0.6 | ' | ' |
Comprehensive income (loss) attributable to The Phoenix Companies, Inc. | -187.1 | ' | ' |
LOSS PER SHARE: | ' | ' | ' |
Loss from continuing operations - basic | ($26.40) | ' | ' |
Loss from continuing operations - diluted | ($26.40) | ' | ' |
Loss from discontinued operations - basic | ($2.70) | ' | ' |
Loss from discontinued operations - diluted | ($2.70) | ' | ' |
Net loss attributable to The Phoenix Companies, Inc. - basic | ($29.20) | ' | ' |
Net loss attributable to The Phoenix Companies, Inc. - diluted | ($29.20) | ' | ' |
Basic weighted-average common shares outstanding (in thousands) | 5,770 | ' | ' |
Diluted weighted-average common shares outstanding (in thousands) | 5,770 | ' | ' |
As restated and amended [Member] | ' | ' | ' |
REVENUES: | ' | ' | ' |
Premiums | ' | 448.7 | 507.5 |
Fee income | ' | 596.8 | 633.5 |
Net investment income | ' | 822.9 | 840.5 |
Net realized investment losses: | ' | ' | ' |
Total other-than-temporary impairment ('OTTI') losses | ' | -65.3 | -107.3 |
Portion of OTTI losses recognized in other comprehensive income ('OCI') | ' | -38.5 | -58.7 |
Net OTTI losses recognized in earnings | ' | -26.8 | -48.6 |
Net realized investment losses, excluding OTTI losses | ' | -5.3 | 37.4 |
Net realized investment gains (losses) | ' | -32.1 | -11.2 |
Gain on debt repurchase | ' | 0.2 | ' |
Total revenues | ' | 1,836.50 | 1,970.30 |
BENEFITS AND EXPENSES: | ' | ' | ' |
Policy benefits, excluding policyholder dividends | ' | 1,137 | 1,121.50 |
Policyholder dividends | ' | 259.2 | 301.8 |
Policy acquisition cost amortization | ' | 157.9 | 268.2 |
Interest expense on indebtedness | ' | 31.8 | 31.8 |
Other operating expenses | ' | 247.9 | 288.6 |
Total benefits and expenses | ' | 1,833.80 | 2,011.90 |
Income from continuing operations before income taxes | ' | 2.7 | -41.6 |
Income tax expense (benefit) | ' | 12.3 | -10.3 |
Income (loss) from continuing operations | ' | -9.6 | -31.3 |
Loss from discontinued operations, net of income taxes | ' | -21.6 | -3.6 |
Net loss | ' | -31.2 | -34.9 |
Less: Net income (loss) attributable to noncontrolling interests | ' | -0.5 | -0.5 |
Net loss attributable to The Phoenix Companies, Inc. | ' | -30.7 | -34.4 |
COMPREHENSIVE INCOME (LOSS): | ' | ' | ' |
Net loss attributable to The Phoenix Companies, Inc. | ' | -30.7 | -34.4 |
Less: Net income (loss) attributable to noncontrolling interests | ' | -0.5 | -0.5 |
Net loss | ' | -31.2 | -34.9 |
Other comprehensive income (loss) before income taxes: | ' | ' | ' |
Net unrealized investment gains before income taxes | ' | 58.7 | 174.1 |
Non-credit portion of OTTI losses recognized in OCI before income taxes | ' | -33.8 | -24.9 |
Net pension liability adjustment before income taxes | ' | -99.1 | -7.9 |
Net unrealized other gains (losses) before income taxes | ' | ' | ' |
Net unrealized derivative instruments gains (losses) before income taxes | ' | ' | ' |
Other comprehensive income (loss) before income taxes | ' | -74.2 | 141.3 |
Less: Income tax expense (benefit) related to: | ' | ' | ' |
Net unrealized investment gains (losses) | ' | 12.1 | 94.5 |
Non-credit portion of OTTI losses recognized in OCI | ' | 11.8 | -7.5 |
Net pension liability adjustment | ' | ' | ' |
Net unrealized other gains (losses) | ' | ' | ' |
Net unrealized derivative instruments gains (losses) | ' | ' | ' |
Total income tax expense (benefit) | ' | 0.3 | 87 |
Other comprehensive income (loss) | ' | -74.5 | 54.3 |
Comprehensive income (loss) | ' | -105.7 | 19.4 |
Less: Comprehensive income (loss) attributable to noncontrolling interests, net of income taxes | ' | -0.5 | -0.5 |
Comprehensive income (loss) attributable to The Phoenix Companies, Inc. | ' | ($105.20) | $19.90 |
LOSS PER SHARE: | ' | ' | ' |
Loss from continuing operations - basic | ' | ($1.65) | ($5.39) |
Loss from continuing operations - diluted | ' | ($1.65) | ($5.39) |
Loss from discontinued operations - basic | ' | ($3.71) | ($0.62) |
Loss from discontinued operations - diluted | ' | ($3.71) | ($0.62) |
Net loss attributable to The Phoenix Companies, Inc. - basic | ' | ($5.28) | ($5.93) |
Net loss attributable to The Phoenix Companies, Inc. - diluted | ' | ($5.28) | ($5.93) |
Basic weighted-average common shares outstanding (in thousands) | ' | 5,815 | 5,803 |
Diluted weighted-average common shares outstanding (in thousands) | ' | 5,815 | 5,803 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (Unaudited) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 |
As restated and amended [Member] | As restated and amended [Member] | ||
OPERATING ACTIVITIES: | ' | ' | ' |
Net loss | ($168.50) | ($30.70) | ($34.40) |
Net realized investment (gains) losses | 10.5 | 32.1 | 11.2 |
Gain on debt repurchase | -11.9 | -0.2 | ' |
Policy acquisition costs deferred | -58.1 | -91.2 | -12.8 |
Amortization of deferred policy acquisition costs | 200 | 157.9 | 268.2 |
Amortization and depreciation | 12 | 12.8 | 11 |
Interest credited | 123.2 | 117.5 | 123.8 |
Equity in earnings of limited partnerships and other investments | -60.8 | -45.3 | -61.1 |
Change in: | ' | ' | ' |
Accrued investment income | -123.2 | -141.3 | -133.8 |
Deferred income taxes | -19.8 | -2.7 | -15.3 |
Receivables | -24.2 | -0.1 | 39 |
Policy liabilities and accruals | -426.9 | -405 | -814.4 |
Dividend obligations | 82.9 | 7.3 | -13.9 |
Impact of operating activities of consolidated investment entities, net | -11.8 | -4.2 | -5.9 |
Other operating activities, net | -51.1 | -42.5 | 13.7 |
Cash used for operating activities | -520.8 | -437.8 | -624.5 |
Purchases of: | ' | ' | ' |
Available-for-sale debt securities | -3,610.90 | -3,048.20 | -2,686.20 |
Available-for-sale equity securities | -10.9 | -6.4 | -5.3 |
Derivative instruments | -50.8 | -70.5 | -83.2 |
Fair value investments | -37.4 | -47.3 | -8.5 |
Other investments | -1.3 | -1.4 | -1.3 |
Sales, repayments and maturities of: | ' | ' | ' |
Available-for-sale debt securities | 3,263.60 | 2,329.20 | 2,701.20 |
Available-for-sale equity securities | 12.5 | 10.2 | 0.7 |
Derivative instruments | 26.7 | 87.1 | 32.1 |
Fair value investments | 38.1 | 13.4 | 14.4 |
Other investments | 11.2 | 22.3 | 37.8 |
Contributions to limited partnerships and limited liability corporations | -101.8 | -99.4 | -90.2 |
Distributions from limited partnerships and limited liability corporations | 138.4 | 120.5 | 132 |
Policy loans, net | 126.5 | 128.3 | 62.7 |
Impact of investing activities of consolidated investment entities, net | ' | ' | ' |
Other investing activities, net | -7.7 | -4.6 | 30 |
Cash provided by (used for) investing activities | -203.8 | -566.8 | 136.2 |
FINANCING ACTIVITIES: | ' | ' | ' |
Policyholder deposit fund deposits | 1,597.40 | 1,825.40 | 1,099.20 |
Policyholder deposit fund withdrawals | -1,138.80 | -1,179.30 | -1,225.50 |
Net transfers to/from separate accounts | 379.8 | 435.1 | 454.3 |
Impact of financing activities of consolidated investment entities, net | 1.3 | 1.5 | 1 |
Other financing activities, net | -39.6 | -4.9 | 0.3 |
Cash used for financing activities | 800.1 | 1,077.80 | 329.3 |
Change in cash and cash equivalents | 75.5 | 73.2 | -159 |
Change in cash included in discontinued operations assets | 2.7 | 1.3 | -3.1 |
Cash and cash equivalents, beginning of period | 168.2 | 93.7 | 255.8 |
Cash and cash equivalents, end of period | 246.4 | 168.2 | 93.7 |
Supplemental Disclosure of Cash Flow Information | ' | ' | ' |
Income taxes paid | -18.4 | -6.2 | -0.1 |
Interest expense on indebtedness paid | -30.4 | -31.4 | -31.4 |
Non-Cash Transactions During the Year | ' | ' | ' |
Investment exchanges | $96 | $97.80 | $70.50 |
Consolidated_Statements_of_Cha
Consolidated Statements of Changes in Stockholders' Equity (USD $) | Total | Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit | Treasury Stock | Total Stockholders Equity Attributable To Parent | Noncontrolling Interest | As restated and amended [Member] | As restated and amended [Member] | As restated and amended [Member] | As restated and amended [Member] | As restated and amended [Member] | As restated and amended [Member] | As restated and amended [Member] | As restated and amended [Member] | |||||
In Millions | Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit | Treasury Stock | Total Stockholders Equity Attributable To Parent | Noncontrolling Interest | ||||||||||||||
Beginning balance, Amount at Dec. 31, 2009 | ' | ' | ' | ' | ' | ' | ' | ' | $782.40 | $1.30 | [1] | $2,627.30 | ($211.60) | ($1,456.80) | ($179.50) | [1] | $780.70 | $1.70 | |||
Issuance of shares and compensation expense on stock compensation awards | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3.7 | ' | ' | ' | ' | ' | |||||
Adjustment for reverse stock split | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | [1] | ' | ' | ' | ' | ' | ' | ||||
Adjustment for initial application of accounting changes | ' | ' | ' | ' | ' | ' | ' | ' | -5.7 | ' | ' | 1.1 | -6.8 | ' | -5.7 | ' | |||||
Other comprehensive income (loss) | ' | ' | ' | ' | ' | ' | ' | ' | 54.3 | ' | ' | 54.3 | ' | ' | ' | ' | |||||
Net loss | ' | ' | ' | ' | ' | ' | ' | ' | -34.4 | ' | ' | ' | -34.4 | ' | ' | ' | |||||
Treasury shares purchased | [1] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||
Change in stockholders' equity | ' | ' | ' | ' | ' | ' | ' | ' | 23.7 | ' | ' | ' | ' | ' | 23.6 | ' | |||||
Net income attributable to noncontrolling interests | ' | ' | ' | ' | ' | ' | ' | ' | -34.9 | ' | ' | ' | ' | ' | ' | -0.5 | |||||
Contributions to noncontrolling interests | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Distributions from noncontrolling interests | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Issuance of Saybrus shares to noncontrolling interests | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.6 | |||||
Ending balance, Amount at Dec. 31, 2010 | ' | ' | ' | ' | ' | ' | ' | ' | 800.4 | 1.3 | [1] | 2,631 | -156.2 | -1,498 | -179.5 | [1] | 798.6 | 1.8 | |||
Issuance of shares and compensation expense on stock compensation awards | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -0.5 | ' | ' | ' | ' | ' | |||||
Adjustment for reverse stock split | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | [1] | ' | ' | ' | ' | ' | ' | ||||
Adjustment for initial application of accounting changes | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Other comprehensive income (loss) | ' | ' | ' | ' | ' | ' | ' | ' | -74.5 | ' | ' | -74.5 | ' | ' | ' | ' | |||||
Net loss | ' | ' | ' | ' | ' | ' | ' | ' | -30.7 | ' | ' | ' | -30.7 | ' | ' | ' | |||||
Treasury shares purchased | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Change in stockholders' equity | ' | ' | ' | ' | ' | ' | ' | ' | -104.7 | ' | ' | ' | ' | ' | -105.7 | ' | |||||
Net income attributable to noncontrolling interests | ' | ' | ' | ' | ' | ' | ' | ' | -31.2 | ' | ' | ' | ' | ' | ' | -0.5 | |||||
Contributions to noncontrolling interests | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1.5 | |||||
Distributions from noncontrolling interests | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Issuance of Saybrus shares to noncontrolling interests | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Ending balance, Amount at Dec. 31, 2011 | 695.7 | 1.3 | [1] | 2,630.50 | -230.7 | -1,528.70 | -179.5 | [1] | 692.9 | 2.8 | 695.7 | 1.3 | [1] | 2,630.50 | -230.7 | -1,528.70 | -179.5 | [1] | 726.2 | 2.8 | |
Issuance of shares and compensation expense on stock compensation awards | ' | ' | 1.4 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Adjustment for reverse stock split | ' | -1.2 | [1] | 1.2 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||
Adjustment for initial application of accounting changes | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Other comprehensive income (loss) | -18.6 | ' | ' | -18.6 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Net loss | -168.5 | ' | ' | ' | -168.5 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Treasury shares purchased | [1] | ' | ' | ' | ' | ' | -3.4 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||
Change in stockholders' equity | -185.2 | ' | ' | ' | ' | ' | -189.1 | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Net income attributable to noncontrolling interests | -167.9 | ' | ' | ' | ' | ' | ' | 0.6 | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Contributions to noncontrolling interests | ' | ' | ' | ' | ' | ' | ' | 4.7 | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Distributions from noncontrolling interests | ' | ' | ' | ' | ' | ' | ' | -1.4 | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Issuance of Saybrus shares to noncontrolling interests | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Ending balance, Amount at Dec. 31, 2012 | $510.50 | $0.10 | [1] | $2,633.10 | ($249.30) | ($1,697.20) | ($182.90) | [1] | $503.80 | $6.70 | ' | ' | ' | ' | ' | ' | ' | ' | |||
[1] | Reflects the 1-for-20 reverse stock split, which was effective August 10, 2012. |
1_Organization_and_Description
1. Organization and Description of Business | 12 Months Ended |
Dec. 31, 2012 | |
Accounting Policies [Abstract] | ' |
1. Organization and Description of Business | ' |
The Phoenix Companies, Inc. (“we,” “our,” “us,” the “Company,” “PNX” or “Phoenix”) is a holding company and our operations are conducted through subsidiaries, principally Phoenix Life Insurance Company (“Phoenix Life”) and PHL Variable Insurance Company (“PHLVIC”), collectively with Phoenix Life and Phoenix Life and Annuity Company and American Phoenix Life and Reassurance, they are our “Life Companies.” We provide life insurance and annuity products through independent agents and financial advisors. Our policyholder base includes both affluent and middle market consumers, with our more recent business concentrated in the middle market. Most of our life insurance in force is permanent life insurance insuring one or more lives. Our annuity products include fixed and variable annuities with a variety of death benefit and guaranteed living benefit options. | |
We operate two businesses segments: Life and Annuity and Saybrus. The Life and Annuity segment includes individual life insurance and annuity products, including our closed block. Saybrus provides dedicated life insurance and other consulting services to financial advisors in partner companies, as well as support for sales of Phoenix’s product line through independent distribution organizations. |
2_Restatement_and_Amendment_of
2. Restatement and Amendment of Previously Reported Financial Information | 12 Months Ended | |||||||||||||||||||||||||||||
Dec. 31, 2012 | ||||||||||||||||||||||||||||||
Accounting Changes and Error Corrections [Abstract] | ' | |||||||||||||||||||||||||||||
2. Restatement and Amendment of Previously Reported Financial Information (Part 1) | ' | |||||||||||||||||||||||||||||
2. Restatement and Amendment of Previously Reported Financial Information | ||||||||||||||||||||||||||||||
During the preparation of the Company’s Form 10-Q for the period ended September 30, 2012, certain errors were identified within the consolidated statement of cash flows for the nine months ended September 30, 2012, as well as for previously reported periods. Following the identification of these cash flow related errors, management initiated a comprehensive internal review of the Company’s historical financial information and identified additional errors. As part of its internal review, the Company evaluated the financial reporting process and the resulting financial statements as well as the appropriateness of prior accounting and reporting decisions in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). As a result, the Company has restated and amended its consolidated financial statements as of and for the years ended December 31, 2011 and 2010 to: (i) adjust for impact of these errors; (ii) record previously identified out-of-period errors that were previously determined not to be material individually, or in the aggregate, in the appropriate period; and (iii) amend the financial statements for the impact of the retrospective adoption of amended accounting guidance discussed more fully in the “Revision for the Retrospective Adoption of Amended Accounting Guidance” section below. | ||||||||||||||||||||||||||||||
The Company has classified the errors that were affected by the restatement into the following major categories: | ||||||||||||||||||||||||||||||
1. Actuarial Finance (which includes various subcategories as noted more fully below) | ||||||||||||||||||||||||||||||
2. Investments (which includes various subcategories as noted more fully below) | ||||||||||||||||||||||||||||||
3. Reinsurance Accounting | ||||||||||||||||||||||||||||||
4. Pensions | ||||||||||||||||||||||||||||||
5. Limited Partnerships and Other Investments Taxable Income Reporting | ||||||||||||||||||||||||||||||
6. Cash Flows and Changes in Classification | ||||||||||||||||||||||||||||||
In addition to these six categories, there are certain items labeled “other restatement adjustments” which primarily relate to previously recorded out-of-period errors that were previously identified and determined not to be material individually or in the aggregate. The Company reconsidered each of these errors individually and in the aggregate during the course of the restatement and concluded that certain of these previously identified errors, namely actuarial and pension, would be most appropriately presented within the “Actuarial Finance” and “Pensions” sections below, with the remaining errors most appropriately categorized into “other restatement adjustments” rather than any of the six major categories. In an effort to provide greater transparency into these remaining “other restatement adjustments,” the Company has provided additional details underlying select errors for certain financial statement line items, as deemed appropriate. These details are presented in the financial statement tables detailed more fully within this Note below. | ||||||||||||||||||||||||||||||
The following table summarizes the effect of the correction of these errors on net income as applicable by category of error. | ||||||||||||||||||||||||||||||
Increase (decrease) | For the year ended | |||||||||||||||||||||||||||||
($ in millions) | December 31, | |||||||||||||||||||||||||||||
2011 | 2010 | |||||||||||||||||||||||||||||
Net income (loss) as previously reported | $ | 8.1 | $ | -12.6 | ||||||||||||||||||||||||||
Restatement adjustments: (1) | ||||||||||||||||||||||||||||||
Actuarial finance: | ||||||||||||||||||||||||||||||
- Accounting for certain universal life type products | -34 | -46.7 | ||||||||||||||||||||||||||||
- Loss recognition | 2.7 | -3.9 | ||||||||||||||||||||||||||||
- Traditional product revenue recognition | -0.1 | -0.4 | ||||||||||||||||||||||||||||
- Liability for the future cost of a settlement agreement | -1.8 | -2 | ||||||||||||||||||||||||||||
- Fixed indexed annuities | -4.2 | — | ||||||||||||||||||||||||||||
- Other actuarial errors | -11 | -13.5 | ||||||||||||||||||||||||||||
Investments: | ||||||||||||||||||||||||||||||
- Limited partnerships and other investments | -2.6 | 2.5 | ||||||||||||||||||||||||||||
- Available-for-sale securities | 2.6 | 2.3 | ||||||||||||||||||||||||||||
- Derivative valuation | -12.4 | -4.2 | ||||||||||||||||||||||||||||
- Structured securities | -3.6 | 0.6 | ||||||||||||||||||||||||||||
Reinsurance accounting | -3.3 | 6.3 | ||||||||||||||||||||||||||||
Pensions | 7.1 | -1.7 | ||||||||||||||||||||||||||||
Other restatement adjustments (2) | -0.1 | 9.0 | ||||||||||||||||||||||||||||
Total restatement adjustments before income taxes | -60.7 | -51.7 | ||||||||||||||||||||||||||||
Limited partnerships and other investments taxable income reporting | -1.6 | 4.9 | ||||||||||||||||||||||||||||
Income tax expense (benefit) of restatement adjustments | 3.0 | -20.4 | ||||||||||||||||||||||||||||
Total income tax expense (benefit) of restatement adjustments | 1.4 | -15.5 | ||||||||||||||||||||||||||||
Total impact to continuing operations | -62.1 | -36.2 | ||||||||||||||||||||||||||||
Retrospective adoption, net of income taxes (3) | 22.4 | 29.5 | ||||||||||||||||||||||||||||
Discontinued operations, net of income taxes (4) | 0.4 | -15.6 | ||||||||||||||||||||||||||||
Impact of restatement adjustments on net income (loss) | -39.3 | -22.3 | ||||||||||||||||||||||||||||
Less: Noncontrolling interests (4) | -0.5 | -0.5 | ||||||||||||||||||||||||||||
Net loss attributable to The Phoenix Companies, Inc., as restated and amended | $ | -30.7 | $ | -34.4 | ||||||||||||||||||||||||||
——————— | ||||||||||||||||||||||||||||||
-1 | All restatement adjustments are presented on a before-tax basis with total tax expense (benefit) presented separately. | |||||||||||||||||||||||||||||
-2 | Amounts exclude the impacts for income tax expense (benefit), discontinued operations and noncontrolling interests which are reflected separately. | |||||||||||||||||||||||||||||
-3 | For additional information, see “Revision for the Retrospective Adoption of Amended Accounting Guidance” described more fully below in this Note. | |||||||||||||||||||||||||||||
-4 | For additional information regarding errors related to discontinued operations and noncontrolling interests refer to “other restatement adjustments” detailed within the “Consolidated Summary of Correction of Errors” tables presented within this Note. | |||||||||||||||||||||||||||||
Actuarial Finance | ||||||||||||||||||||||||||||||
The Company determined that there were errors related to the actuarial valuation of insurance liabilities and the amortization of deferred policy acquisition costs. Errors were identified related to data, assumptions and valuation methodologies and separated into the following sub-categories detailed below: | ||||||||||||||||||||||||||||||
· | Accounting for Certain Universal Life Type Products: Certain of the Company’s universal life products have benefit features that are expected to produce profits in earlier periods followed by losses in later periods. Under U.S. GAAP accounting, the Company is required to establish reserves for the anticipated benefits that exceed the projected contract value and arise from these features. The Company did not properly evaluate certain benefit features and, therefore, did not properly establish the required reserves. The resulting changes in the reserve had a secondary impact on gross profits used to amortize deferred acquisition costs and unearned revenue reserves. | |||||||||||||||||||||||||||||
In addition, the Company must periodically assess each of its lines of business for a potential premium deficiency including whether the line of business is expected to produce profits in earlier years followed by losses in later years. The Company did not properly assess the universal life or variable universal life lines of businesses for this profits followed by losses condition. Accordingly, the Company accrued additional reserves over the restatement period to provide for expected losses in the future. | ||||||||||||||||||||||||||||||
2. Restatement and Amendment of Previously Reported Financial Information (continued) | ||||||||||||||||||||||||||||||
The Company also determined it was using inappropriate approximations of reinsurance that when aggregated did not properly reflect the underlying reinsurance costs accurately within the models it uses to amortize deferred policy acquisition costs and to value policyholder liabilities. The impact of the correction of this reinsurance modeling error indirectly impacted the balances discussed above. | ||||||||||||||||||||||||||||||
In addition, the impact of this error indirectly impacted the calculation of the “Shadow Accounting” error which is a separately identifiable component of actuarial errors and, accordingly, is described within the “Shadow Accounting” section of “Actuarial Finance” directly below. | ||||||||||||||||||||||||||||||
The impact of the correction of these errors on the consolidated financial statements is presented in the “Summary of Correction of Actuarial Finance Errors” table within the “Actuarial Finance” section of this Note below. | ||||||||||||||||||||||||||||||
· | Shadow Accounting: Under U.S. GAAP accounting, assets and liabilities that are backed by a portfolio of assets classified as available-for-sale must be adjusted to reflect the amount of unrealized gains or unrealized losses “as if the amounts were realized” with a corresponding offset to other comprehensive income (loss) in a process commonly referred to as “shadow accounting.” The Company failed to recognize all of the relationships between the available-for-sale assets and the supported assets and liabilities in calculating these adjustments. During the restatement, the shadow accounting policy and valuation process were corrected to ensure all interrelated assets and liabilities were being properly identified and to ensure that the impacts of these unrealized gains or losses were properly recorded. The impact of the correction of these errors on the consolidated financial statements is presented in the “Summary of Correction of Actuarial Finance Errors” table within the “Actuarial Finance” section of this Note below. | |||||||||||||||||||||||||||||
· | Loss Recognition: Under U.S. GAAP accounting, the Company must periodically assess the net liability (net of deferred policy acquisition costs) to ensure it is sufficient to provide for the expected policyholder benefits and related expenses. Upon analysis, the Company determined that for certain lines of business the “locked-in” historical estimates used to calculate the policyholder liabilities were insufficient prior to, and also as a result of, entering into a new reinsurance treaty (as discussed within the “Reinsurance Accounting” section below) and in light of the current interest rate environment. Upon identification of loss recognition events, the Company reduced its deferred policy acquisition cost asset and established additional liabilities to rectify the insufficiency in the net liability which was identified for certain lines of business. The impact of the correction of these errors on the consolidated financial statements is presented in the “Summary of Correction of Actuarial Finance Errors” table within the “Actuarial Finance” section of this Note below. | |||||||||||||||||||||||||||||
· | Traditional Product Revenue Recognition: The Company did not properly recognize premiums when due under the terms of the contract related to its traditional participating life insurance policies. In conjunction with the correction of this error, the Company also revised the projected income (the “glidepath”) from inception of the closed block in order to properly reflect the revised timing of revenue recognition. The correction of these errors did not have a material impact on annual net income in any given period or the amounts disclosed ‘at inception’ within “Note 5: Demutualization and Closed Block.” The impact of the correction of these errors on the consolidated financial statements is presented in the “Summary of Correction of Actuarial Finance Errors” table within the “Actuarial Finance” section of this Note below. | |||||||||||||||||||||||||||||
· | Liability for the Future Cost of a Settlement Agreement: As a result of the settlement of a class action lawsuit reached prior to demutualization and related to the Company’s participating business, the Company was required to record a liability for the future costs associated with reimbursing certain customers for supplemental premium payments. The calculation of this liability involves estimates of future policy lapses and policyholder mortality that are consistent with the assumptions used to estimate other policyholder liabilities. However, the Company did not properly record this incremental liability within the consolidated financial statements. The impact of the correction of these errors on the consolidated financial statements is presented in the “Summary of Correction of Actuarial Finance Errors” table within the “Actuarial Finance” section of this Note below. | |||||||||||||||||||||||||||||
· | Fixed Indexed Annuities (“FIA”): During the Company’s analysis of the fixed indexed annuity valuation process, errors associated with the actuarial modeling of certain fixed indexed annuity product features which were modeled beginning in 2011 were identified. These errors related to incomplete or inaccurate data and inappropriate approximations of product features which resulted in the incorrect calculation for the policyholder liabilities including the related embedded derivatives and liabilities associated with certain benefits for the product. The impact of the correction of these errors on the consolidated financial statements is presented in the “Summary of Correction of Actuarial Finance Errors” table within the “Actuarial Finance” section of this Note below. | |||||||||||||||||||||||||||||
Other errors related to the FIA products for the 2010 period were previously identified and recorded as out-of-period errors. These errors which resulted in a net loss of $2.3 million are presented, along with all other actuarial out-of-period errors, within the “Other Actuarial Errors” section below. | ||||||||||||||||||||||||||||||
· | Other Actuarial Errors: Included within these amounts are all actuarial out-of-period errors as well as other individually immaterial errors which were identified during the restatement process in conjunction with management’s comprehensive balance sheet review and relating to the Company’s actuarial assumptions, approximations and valuation methods/models for its life and annuity business. The impact of the correction of these errors on the consolidated financial statements is presented in the “Summary of Correction of Actuarial Finance Errors” table within the “Actuarial Finance” section of this Note below. | |||||||||||||||||||||||||||||
Increase (decrease) | Summary of Correction of Actuarial Finance Errors – December 31, 2011 Balance Sheet Impacts (1) | |||||||||||||||||||||||||||||
($ in millions) | Actuarial Finance | |||||||||||||||||||||||||||||
Accounting | Shadow | Loss | Traditional | Future | FIA | Other | Total | |||||||||||||||||||||||
for UL Type | Accounting | Recognition | Revenue | Cost of a | Actuarial | Actuarial | ||||||||||||||||||||||||
Products | Recognition | Settlement | Finance | |||||||||||||||||||||||||||
Errors(2) | ||||||||||||||||||||||||||||||
ASSETS: | ||||||||||||||||||||||||||||||
Available-for-sale debt securities, at fair value | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||
Available-for-sale equity securities, at fair value | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
Limited partnerships and other investments | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
Policy loans, at unpaid principal balances | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
Derivative investments | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
Fair value investments | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
Total investments | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
Cash and cash equivalents | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
Accrued investment income | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
Receivables | — | — | — | 16.6 | — | — | 1.0 | 17.6 | ||||||||||||||||||||||
Deferred policy acquisition costs | 57.3 | -11 | -1.8 | -0.7 | — | -3.4 | 1.1 | 41.5 | ||||||||||||||||||||||
Deferred income taxes, net | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
Other assets | — | — | -38.6 | — | — | — | 4.8 | -33.8 | ||||||||||||||||||||||
Discontinued operations assets | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
Separate account assets | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
Total assets | $ | 57.3 | $ | -11 | $ | -40.4 | $ | 15.9 | $ | — | $ | -3.4 | $ | 6.9 | $ | 25.3 | ||||||||||||||
LIABILITIES: | ||||||||||||||||||||||||||||||
Policy liabilities and accruals | $ | 179.4 | $ | 9.2 | $ | 11.0 | $ | 12.1 | $ | 7.7 | $ | — | $ | 21.3 | $ | 240.7 | ||||||||||||||
Policyholder deposit funds | — | — | — | — | — | 0.8 | 2.1 | 2.9 | ||||||||||||||||||||||
Dividend obligations | — | — | — | 9.4 | — | — | -8.4 | 1.0 | ||||||||||||||||||||||
Indebtedness | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
Other liabilities | — | — | — | — | — | — | 0.2 | 0.2 | ||||||||||||||||||||||
Discontinued operations liabilities | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
Separate account liabilities | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
Total liabilities | 179.4 | 9.2 | 11.0 | 21.5 | 7.7 | 0.8 | 15.2 | 244.8 | ||||||||||||||||||||||
STOCKHOLDERS’ EQUITY: | ||||||||||||||||||||||||||||||
Common stock | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
Additional paid-in capital | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
Accumulated other comprehensive loss | — | -14.2 | — | — | — | — | — | -14.2 | ||||||||||||||||||||||
Accumulated deficit | -80.7 | — | -1.2 | -0.5 | -3.8 | -4.2 | -24.5 | -114.9 | ||||||||||||||||||||||
Treasury stock | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
Noncontrolling interests | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
Total stockholders’ equity –periods presented (3) | -80.7 | -14.2 | -1.2 | -0.5 | -3.8 | -4.2 | -24.5 | -129.1 | ||||||||||||||||||||||
Total stockholders’ equity – cumulative impact (4) | -41.4 | -6 | -50.2 | -5.1 | -3.9 | — | 16.2 | -90.4 | ||||||||||||||||||||||
Total stockholders’ equity – impact | -122.1 | -20.2 | -51.4 | -5.6 | -7.7 | -4.2 | -8.3 | -219.5 | ||||||||||||||||||||||
Total liabilities and stockholders’ equity | $ | 57.3 | $ | -11 | $ | -40.4 | $ | 15.9 | $ | — | $ | -3.4 | $ | 6.9 | $ | 25.3 | ||||||||||||||
——————— | ||||||||||||||||||||||||||||||
-1 | All amounts are shown before income taxes, unless otherwise noted. | |||||||||||||||||||||||||||||
-2 | Amounts represent the total “Summary of Correction of Actuarial Finance Errors” which is further aggregated into the “Consolidated Summary of Correction of Errors” in the following pages. | |||||||||||||||||||||||||||||
-3 | Amounts represent restatement changes made to the 2011 and 2010 periods as presented. | |||||||||||||||||||||||||||||
-4 | Amounts represent cumulative impact of restatement changes to periods prior to 2010. | |||||||||||||||||||||||||||||
Increase (decrease) | Summary of Correction of Actuarial Finance Errors – December 31, 2011 Income Statement Impacts (1) | |||||||||||||||||||||||||||||
($ in millions) | Actuarial Finance | |||||||||||||||||||||||||||||
Accounting | Shadow | Loss | Traditional | Future | FIA | Other | Total | |||||||||||||||||||||||
for UL Type | Accounting | Recognition | Revenue | Cost of a | Actuarial | Actuarial | ||||||||||||||||||||||||
Products | Recognition | Settlement | Finance | |||||||||||||||||||||||||||
Errors(2) | ||||||||||||||||||||||||||||||
REVENUES | ||||||||||||||||||||||||||||||
Premiums | $ | — | $ | — | $ | — | $ | -10.9 | $ | — | $ | — | $ | 0.5 | $ | -10.4 | ||||||||||||||
Fee income | -1.1 | — | — | — | — | — | 0.8 | -0.3 | ||||||||||||||||||||||
Net investment income | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
Net realized investment gains (losses): | ||||||||||||||||||||||||||||||
Total OTTI losses | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
Portion of OTTI losses recognized in OCI | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
Net OTTI losses recognized in earnings | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
Net realized investment gains (losses), excluding OTTI losses | — | — | — | — | — | -0.4 | -0.7 | -1.1 | ||||||||||||||||||||||
Net realized investment gains (losses) | — | — | — | — | — | -0.4 | -0.7 | -1.1 | ||||||||||||||||||||||
Gain on debt repurchase | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
Total revenues | -1.1 | — | — | -10.9 | — | (0.4) | 0.6 | -11.8 | ||||||||||||||||||||||
BENEFITS AND EXPENSES | ||||||||||||||||||||||||||||||
Policy benefits, excluding policyholder dividends | 47.1 | — | -4.5 | -10 | — | 0.4 | 12.8 | 45.8 | ||||||||||||||||||||||
Policyholder dividends | — | — | — | -0.6 | — | — | -0.7 | -1.3 | ||||||||||||||||||||||
Policy acquisition cost amortization | -14.2 | — | 1.8 | -0.2 | — | 3.4 | -5.3 | -14.5 | ||||||||||||||||||||||
Interest expense on indebtedness | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
Other operating expenses | — | — | — | — | 1.8 | — | 4.8 | 6.6 | ||||||||||||||||||||||
Total benefits and expenses | 32.9 | — | -2.7 | -10.8 | 1.8 | 3.8 | 11.6 | 36.6 | ||||||||||||||||||||||
Income (loss) from continuing operations before income taxes | -34 | — | 2.7 | -0.1 | -1.8 | -4.2 | -11 | -48.4 | ||||||||||||||||||||||
Income tax expense (benefit) | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
Income (loss) from continuing operations | -34 | — | 2.7 | -0.1 | -1.8 | -4.2 | -11 | -48.4 | ||||||||||||||||||||||
Noncontrolling interests | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
Income (loss) from discontinued operations, net of income taxes | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
Net income (loss) attributable to The Phoenix Companies, Inc. | $ | -34 | $ | — | $ | 2.7 | $ | -0.1 | $ | -1.8 | $ | -4.2 | $ | -11 | $ | -48.4 | ||||||||||||||
——————— | ||||||||||||||||||||||||||||||
-1 | All amounts are shown before income taxes, unless otherwise noted. | |||||||||||||||||||||||||||||
-2 | Amounts represent the total “Summary of Correction of Actuarial Finance Errors” which is further aggregated into the “Consolidated Summary of Correction of Errors” in the following pages. | |||||||||||||||||||||||||||||
(Continued from previous page) | Summary of Correction of Actuarial Finance Errors – December 31, 2011 Income Statement Impacts(1) | |||||||||||||||||||||||||||||
Increase (decrease) | Actuarial Finance | |||||||||||||||||||||||||||||
($ in millions) | Accounting | Shadow | Loss | Traditional | Future | FIA | Other | Total | ||||||||||||||||||||||
for UL Type | Accounting | Recognition | Revenue | Cost of a | Actuarial | Actuarial | ||||||||||||||||||||||||
Products | Recognition | Settlement | Finance | |||||||||||||||||||||||||||
Errors(2) | ||||||||||||||||||||||||||||||
COMPREHENSIVE INCOME (LOSS): | ||||||||||||||||||||||||||||||
Net income (loss) attributable to The Phoenix Companies, Inc. | $ | -34 | $ | — | $ | 2.7 | $ | -0.1 | $ | -1.8 | $ | -4.2 | $ | -11 | $ | -48.4 | ||||||||||||||
Other comprehensive income (loss) before income taxes: | ||||||||||||||||||||||||||||||
Net unrealized investment gains before income taxes | — | -35.9 | — | — | — | — | — | -35.9 | ||||||||||||||||||||||
Non-credit portion of OTTI losses recognized in | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
OCI before income taxes | ||||||||||||||||||||||||||||||
Net pension liability adjustment before income taxes | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
Net unrealized other gains (losses) before income taxes | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
Net unrealized derivative instruments gains (losses) | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
before income taxes | ||||||||||||||||||||||||||||||
Other comprehensive income (loss) before income taxes | — | -35.9 | — | — | — | — | — | -35.9 | ||||||||||||||||||||||
Less: Income tax expense (benefit) related to: | ||||||||||||||||||||||||||||||
Net unrealized investment gains (losses) | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
Non-credit portion of OTTI losses recognized in OCI | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
Net pension liability adjustment | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
Net unrealized other gains (losses) | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
Net unrealized derivative instruments gains (losses) | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
Total income tax expense (benefit) | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
Other comprehensive income (loss), net of income taxes | — | -35.9 | — | — | — | — | — | -35.9 | ||||||||||||||||||||||
Comprehensive income (loss) attributable to The Phoenix Companies, Inc. | -34 | -35.9 | 2.7 | -0.1 | -1.8 | -4.2 | -11 | -84.3 | ||||||||||||||||||||||
Add: Comprehensive income attributable to noncontrolling interests | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
Comprehensive income (loss) | $ | -34 | $ | -35.9 | $ | 2.7 | $ | -0.1 | $ | -1.8 | $ | -4.2 | $ | -11 | $ | -84.3 | ||||||||||||||
——————— | ||||||||||||||||||||||||||||||
-1 | All amounts are shown before income taxes, unless otherwise noted. | |||||||||||||||||||||||||||||
-2 | Amounts represent the total “Summary of Correction of Actuarial Finance Errors” which is further aggregated into the “Consolidated Summary of Correction of Errors” in the following pages. | |||||||||||||||||||||||||||||
Increase (decrease) | Summary of Correction of Actuarial Finance Errors – December 31, 2010 Income Statement Impacts(1) | |||||||||||||||||||||||||||||
($ in millions) | Actuarial Finance | |||||||||||||||||||||||||||||
Accounting | Shadow | Loss | Traditional | Future | FIA | Other | Total | |||||||||||||||||||||||
for UL Type | Accounting | Recognition | Revenue | Cost of a | Actuarial | Actuarial | ||||||||||||||||||||||||
Products | Recognition | Settlement | Finance | |||||||||||||||||||||||||||
Errors(2) | ||||||||||||||||||||||||||||||
REVENUES | ||||||||||||||||||||||||||||||
Premiums | $ | — | $ | — | $ | — | $ | -13.9 | $ | — | $ | — | $ | — | $ | -13.9 | ||||||||||||||
Fee income | 1.7 | — | — | — | — | — | 1.7 | 3.4 | ||||||||||||||||||||||
Net investment income | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
Net realized investment gains (losses): | ||||||||||||||||||||||||||||||
Total OTTI losses | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
Portion of OTTI losses recognized in OCI | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
Net OTTI losses recognized in earnings | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
Net realized investment gains (losses), excluding OTTI losses | — | — | — | — | — | — | -4.9 | -4.9 | ||||||||||||||||||||||
Net realized investment gains (losses) | — | — | — | — | — | — | -4.9 | -4.9 | ||||||||||||||||||||||
Gain on debt repurchase | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
Total revenues | 1.7 | — | — | -13.9 | — | — | -3.2 | -15.4 | ||||||||||||||||||||||
BENEFITS AND EXPENSES | ||||||||||||||||||||||||||||||
Policy benefits, excluding policyholder dividends | 29.3 | — | 3.9 | -13.5 | — | — | 6.2 | 25.9 | ||||||||||||||||||||||
Policyholder dividends | — | — | — | -0.1 | — | — | -0.4 | -0.5 | ||||||||||||||||||||||
Policy acquisition cost amortization | 19.1 | — | — | 0.1 | — | — | 6.8 | 26.0 | ||||||||||||||||||||||
Interest expense on indebtedness | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
Other operating expenses | — | — | — | — | 2.0 | — | -2.3 | -0.3 | ||||||||||||||||||||||
Total benefits and expenses | 48.4 | — | 3.9 | -13.5 | 2.0 | — | 10.3 | 51.1 | ||||||||||||||||||||||
Income (loss) from continuing operations before income taxes | -46.7 | — | -3.9 | -0.4 | -2 | — | -13.5 | -66.5 | ||||||||||||||||||||||
Income tax expense (benefit) | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
Income (loss) from continuing operations | -46.7 | — | -3.9 | -0.4 | -2 | — | -13.5 | -66.5 | ||||||||||||||||||||||
Noncontrolling interests | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
Income (loss) from discontinued operations, net of income taxes | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
Net income (loss) attributable to The Phoenix Companies, Inc. | $ | -46.7 | $ | — | $ | -3.9 | $ | -0.4 | $ | -2 | $ | — | $ | -13.5 | $ | -66.5 | ||||||||||||||
——————— | ||||||||||||||||||||||||||||||
-1 | All amounts are shown before income taxes, unless otherwise noted. | |||||||||||||||||||||||||||||
-2 | Amounts represent the total “Summary of Correction of Actuarial Finance Errors” which is further aggregated into the “Consolidated Summary of Correction of Errors” in the following pages. | |||||||||||||||||||||||||||||
(Continued from previous page) | Summary of Correction of Actuarial Finance Errors – December 31, 2010 Income Statement Impacts(1) | |||||||||||||||||||||||||||||
Increase (decrease) | Actuarial Finance | |||||||||||||||||||||||||||||
($ in millions) | Accounting | Shadow | Loss | Traditional | Future | FIA | Other | Total | ||||||||||||||||||||||
for UL Type | Accounting | Recognition | Revenue | Cost of a | Actuarial | Actuarial | ||||||||||||||||||||||||
Products | Recognition | Settlement | Finance | |||||||||||||||||||||||||||
Errors(2) | ||||||||||||||||||||||||||||||
COMPREHENSIVE INCOME (LOSS): | ||||||||||||||||||||||||||||||
Net income (loss) attributable to The Phoenix Companies, Inc. | $ | -46.7 | $ | — | $ | -3.9 | $ | -0.4 | $ | -2 | $ | — | $ | -13.5 | $ | -66.5 | ||||||||||||||
Other comprehensive income (loss) before income taxes: | ||||||||||||||||||||||||||||||
Net unrealized investment gains before income taxes | — | 21.7 | — | — | — | — | — | 21.7 | ||||||||||||||||||||||
Non-credit portion of OTTI losses recognized in OCI | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
before income taxes | ||||||||||||||||||||||||||||||
Net pension liability adjustment before income taxes | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
Net unrealized other gains (losses) before income taxes | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
Net unrealized derivative instruments gains (losses) | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
before income taxes | ||||||||||||||||||||||||||||||
Other comprehensive income (loss) before income taxes | — | 21.7 | — | — | — | — | — | 21.7 | ||||||||||||||||||||||
Less: Income tax expense (benefit) related to: | ||||||||||||||||||||||||||||||
Net unrealized investment gains (losses) | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
Non-credit portion of OTTI losses recognized in OCI | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
Net pension liability adjustment | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
Net unrealized other gains (losses) | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
Net unrealized derivative instruments gains (losses) | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
Total income tax expense (benefit) | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
Other comprehensive income (loss), net of income taxes | — | 21.7 | — | — | — | — | — | 21.7 | ||||||||||||||||||||||
Comprehensive income (loss) attributable to The Phoenix Companies, Inc. | -46.7 | 21.7 | -3.9 | -0.4 | -2 | — | -13.5 | -44.8 | ||||||||||||||||||||||
Add: Comprehensive income attributable to noncontrolling interests | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
Comprehensive income (loss) | $ | -46.7 | $ | 21.7 | $ | -3.9 | $ | -0.4 | $ | -2 | $ | — | $ | -13.5 | $ | -44.8 | ||||||||||||||
——————— | ||||||||||||||||||||||||||||||
-1 | All amounts are shown before income taxes, unless otherwise noted. | |||||||||||||||||||||||||||||
-2 | Amounts represent the total “Summary of Correction of Actuarial Finance Errors” which is further aggregated into the “Consolidated Summary of Correction of Errors” in the following pages. | |||||||||||||||||||||||||||||
Investments | ||||||||||||||||||||||||||||||
The Company determined that there were errors related to investment valuation and the accounting treatment for these investments which are specifically identified errors in the following sub-categories as detailed below: | ||||||||||||||||||||||||||||||
· | Limited Partnerships and Other Investments (“OIA”) – The Company did not have an adequate process to properly determine the appropriate accounting method for OIA at acquisition or for determining the appropriate accounting for investee transactions resulting in errors associated with the application of equity or fair value methods of accounting, and conclusions reached regarding consolidation. Additionally, the Company did not perform the proper evaluation necessary for determining impairments of certain OIA assets which led to additional adjustments. The impact of the correction of these errors on the consolidated financial statements is presented in the “Summary of Correction of Investments Errors” table within the “Investments” section of this Note below. | |||||||||||||||||||||||||||||
· | Available-for-Sale Securities – The Company did not have an adequate process over: (1) the valuation and recording of private placement debt, private equity securities, and certain publicly traded securities; and (2) utilizing an appropriate model for identifying impairments related to these securities. The errors identified were related to: (i) inaccurate inputs used in the valuation models; (ii) and inappropriate valuation methodologies used to value certain instruments; and (iii) ineffective review of internally developed (matrix or manual) prices. The Company also failed to maintain an adequate process over the leveling and disclosure of fair value measurements. In the course of correcting these valuation errors, the Company also reassessed the presentation of the fair value hierarchy as disclosed within “Note 14: Fair Value of Financial Instruments.” This resulted in the determination in the leveling classification of $5,885.8 million of securities to Level 3 in the fair value hierarchy. The classification in Level 3 had no impact on the fair value of these securities. | |||||||||||||||||||||||||||||
In addition to these valuation errors, the Company did not receive the proceeds from a zero coupon private placement bond which had been called in 2011 and subsequently determined that the original notice for the bond had not been received or recorded. | ||||||||||||||||||||||||||||||
The impact of the correction of these errors on the consolidated financial statements is presented in the “Summary of Correction of Investments Errors” table within the “Investments” section of this Note below. | ||||||||||||||||||||||||||||||
· | Derivative Valuation – The Company did not appropriately apply U.S. GAAP accounting standards regarding the valuation of certain derivative instruments. Specifically, the Company did not properly recognize and measure counterparty non-performance risk on non-collateralized derivative assets. The impact of the correction of these errors on the consolidated financial statements is presented in the “Summary of Correction of Investments Errors” table within the “Investments” section of this Note below. | |||||||||||||||||||||||||||||
· | Structured Securities – The Company did not appropriately maintain a process over the assessment of accounting methodologies used to determine the appropriate interest income models. This resulted in improper income recognition and impairments for certain structured securities. In addition, the Company did not properly assess securitized financial assets for potential embedded derivatives which, when properly assessed, resulted in the reclassification of assets to fair value investments. The reclassification of these assets results in the recognition of the change in fair value of these assets in net investment income. The impact of the correction of these errors on the consolidated statements of comprehensive income is presented in the “Summary of Correction of Investments Errors” table within the “Investments” section of this Note below. | |||||||||||||||||||||||||||||
Increase (decrease) | Summary of Correction of Investments Errors – December 31, 2011 Balance Sheet Impacts (1) | |||||||||||||||||||||||||||||
($ in millions) | Investments | |||||||||||||||||||||||||||||
OIA | Available-for-Sale | Derivative | Structured | Total | ||||||||||||||||||||||||||
Securities | Valuation | Securities | Investments | |||||||||||||||||||||||||||
Valuation | Bond Call | Errors (2) | ||||||||||||||||||||||||||||
ASSETS: | ||||||||||||||||||||||||||||||
Available-for-sale debt securities, at fair value | $ | — | $ | -10 | $ | -25.3 | $ | — | $ | -55.7 | $ | -91 | ||||||||||||||||||
Available-for-sale equity securities, at fair value | — | — | — | — | — | — | ||||||||||||||||||||||||
Limited partnerships and other investments | -35.9 | — | — | — | — | -35.9 | ||||||||||||||||||||||||
Policy loans, at unpaid principal balances | — | — | — | — | — | — | ||||||||||||||||||||||||
Derivative investments | — | — | — | -12.6 | — | -12.6 | ||||||||||||||||||||||||
Fair value investments | 44.0 | -2.2 | — | — | 55.7 | 97.5 | ||||||||||||||||||||||||
Total investments | 8.1 | -12.2 | -25.3 | -12.6 | — | -42 | ||||||||||||||||||||||||
Cash and cash equivalents | 2.0 | — | — | — | — | 2.0 | ||||||||||||||||||||||||
Accrued investment income | — | — | — | — | — | — | ||||||||||||||||||||||||
Receivables | — | — | — | — | — | — | ||||||||||||||||||||||||
Deferred policy acquisition costs | — | — | — | -13.1 | — | -13.1 | ||||||||||||||||||||||||
Deferred income taxes, net | — | — | — | — | — | — | ||||||||||||||||||||||||
Other assets | -4.4 | — | 23.2 | -6.7 | — | 12.1 | ||||||||||||||||||||||||
Discontinued operations assets | — | — | — | — | — | — | ||||||||||||||||||||||||
Separate account assets | — | — | — | — | — | — | ||||||||||||||||||||||||
Total assets | $ | 5.7 | $ | -12.2 | $ | -2.1 | $ | -32.4 | $ | — | $ | -41 | ||||||||||||||||||
LIABILITIES: | ||||||||||||||||||||||||||||||
Policy liabilities and accruals | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||||
Policyholder deposit funds | — | — | — | — | — | — | ||||||||||||||||||||||||
Dividend obligations | 4.1 | -9.6 | -2.1 | — | — | -7.6 | ||||||||||||||||||||||||
Indebtedness | — | — | — | — | — | — | ||||||||||||||||||||||||
Other liabilities | 5.4 | 7.1 | — | — | — | 12.5 | ||||||||||||||||||||||||
Discontinued operations liabilities | — | — | — | — | — | — | ||||||||||||||||||||||||
Separate account liabilities | — | — | — | — | — | — | ||||||||||||||||||||||||
Total liabilities | 9.5 | -2.5 | -2.1 | — | — | 4.9 | ||||||||||||||||||||||||
STOCKHOLDERS’ EQUITY: | ||||||||||||||||||||||||||||||
Common stock | — | — | — | — | — | — | ||||||||||||||||||||||||
Additional paid-in capital | — | — | — | — | — | — | ||||||||||||||||||||||||
Accumulated other comprehensive loss | -15.7 | 24.3 | — | — | 3.0 | 11.6 | ||||||||||||||||||||||||
Accumulated deficit | 0.9 | 4.9 | — | -16.6 | -3 | -13.8 | ||||||||||||||||||||||||
Treasury stock | — | — | — | — | — | — | ||||||||||||||||||||||||
Noncontrolling interests | -1 | — | — | — | — | -1 | ||||||||||||||||||||||||
Total stockholders’ equity –periods presented (3) | -15.8 | 29.2 | — | -16.6 | — | -3.2 | ||||||||||||||||||||||||
Total stockholders’ equity – cumulative impact (4) | 12.0 | -38.9 | — | -15.8 | — | -42.7 | ||||||||||||||||||||||||
Total stockholders’ equity – impact | -3.8 | -9.7 | — | -32.4 | — | -45.9 | ||||||||||||||||||||||||
Total liabilities and stockholders’ equity | $ | 5.7 | $ | -12.2 | $ | -2.1 | $ | -32.4 | $ | — | $ | -41 | ||||||||||||||||||
——————— | ||||||||||||||||||||||||||||||
-1 | All amounts are shown before income taxes, unless otherwise noted. | |||||||||||||||||||||||||||||
-2 | Amounts represent the total “Summary of Correction of Investments Errors” which is further aggregated into the “Consolidated Summary of Correction of Errors” in the following pages. | |||||||||||||||||||||||||||||
-3 | Amounts represent restatement changes made to the 2011 and 2010 periods as presented. | |||||||||||||||||||||||||||||
-4 | Amounts represent cumulative impact of restatement changes made to periods prior to 2010. | |||||||||||||||||||||||||||||
Increase (decrease) | Summary of Correction of Investments Errors – December 31, 2011 Income Statement Impacts (1) | |||||||||||||||||||||||||||||
($ in millions) | Investments | |||||||||||||||||||||||||||||
OIA | Available-for-Sale | Derivative | Structured | Total | ||||||||||||||||||||||||||
Securities | Valuation | Securities | Investments | |||||||||||||||||||||||||||
Valuation | Bond Call | Errors (2) | ||||||||||||||||||||||||||||
REVENUES | ||||||||||||||||||||||||||||||
Premiums | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||||
Fee income | — | — | — | — | — | — | ||||||||||||||||||||||||
Net investment income | 12.6 | 2.6 | -0.1 | — | -2.2 | 12.9 | ||||||||||||||||||||||||
Net realized investment gains (losses): | ||||||||||||||||||||||||||||||
Total OTTI losses | — | — | — | — | 4.5 | 4.5 | ||||||||||||||||||||||||
Portion of OTTI losses recognized in OCI | — | — | — | — | -3.5 | -3.5 | ||||||||||||||||||||||||
Net OTTI losses recognized in earnings | — | — | — | — | 1.0 | 1.0 | ||||||||||||||||||||||||
Net realized investment gains (losses), excluding OTTI losses | -2.2 | -0.9 | — | -13 | -1.3 | -17.4 | ||||||||||||||||||||||||
Net realized investment gains (losses) | -2.2 | -0.9 | — | -13 | -0.3 | -16.4 | ||||||||||||||||||||||||
Gain on debt repurchase | — | — | — | — | — | — | ||||||||||||||||||||||||
Total revenues | 10.4 | 1.7 | -0.1 | -13 | -2.5 | -3.5 | ||||||||||||||||||||||||
BENEFITS AND EXPENSES | ||||||||||||||||||||||||||||||
Policy benefits, excluding policyholder dividends | — | — | — | — | — | — | ||||||||||||||||||||||||
Policyholder dividends | 11.8 | -0.9 | -0.1 | — | 1.1 | 11.9 | ||||||||||||||||||||||||
Policy acquisition cost amortization | — | — | — | -0.6 | — | -0.6 | ||||||||||||||||||||||||
Interest expense on indebtedness | — | — | — | — | — | — | ||||||||||||||||||||||||
Other operating expenses | 1.2 | — | — | — | — | 1.2 | ||||||||||||||||||||||||
Total benefits and expenses | 13.0 | -0.9 | -0.1 | -0.6 | 1.1 | 12.5 | ||||||||||||||||||||||||
Income (loss) from continuing operations before income taxes | -2.6 | 2.6 | — | -12.4 | -3.6 | -16 | ||||||||||||||||||||||||
Income tax expense (benefit) | — | — | — | — | — | — | ||||||||||||||||||||||||
Income (loss) from continuing operations | -2.6 | 2.6 | — | -12.4 | -3.6 | -16 | ||||||||||||||||||||||||
Noncontrolling interests | -0.5 | — | — | — | — | -0.5 | ||||||||||||||||||||||||
Income (loss) from discontinued operations, net of income taxes | — | — | — | — | — | — | ||||||||||||||||||||||||
Net income (loss) attributable to The Phoenix Companies, Inc. | $ | -2.1 | $ | 2.6 | $ | — | $ | -12.4 | $ | -3.6 | $ | -15.5 | ||||||||||||||||||
——————— | ||||||||||||||||||||||||||||||
-1 | All amounts are shown before income taxes, unless otherwise noted. | |||||||||||||||||||||||||||||
-2 | Amounts represent the total “Summary of Correction of Investments Errors” which is further aggregated into the “Consolidated Summary of Correction of Errors” in the following pages. | |||||||||||||||||||||||||||||
(Continued from previous page) | Summary of Correction of Investments Errors – December 31, 2011 | |||||||||||||||||||||||||||||
Increase (decrease) | Income Statement Impacts (1) | |||||||||||||||||||||||||||||
($ in millions) | Investments | |||||||||||||||||||||||||||||
OIA | Available-for-Sale | Derivative | Structured | Total | ||||||||||||||||||||||||||
Securities | Valuation | Securities | Investments | |||||||||||||||||||||||||||
Valuation | Bond Call | Errors (2) | ||||||||||||||||||||||||||||
COMPREHENSIVE INCOME (LOSS): | ||||||||||||||||||||||||||||||
Net income (loss) attributable to The Phoenix Companies, Inc. | $ | -2.1 | $ | 2.6 | $ | — | $ | -12.4 | $ | -3.6 | $ | -15.5 | ||||||||||||||||||
Other comprehensive income (loss) before income taxes: | ||||||||||||||||||||||||||||||
Net unrealized investment gains before income taxes | -5.8 | 13.8 | — | — | 3.6 | 11.6 | ||||||||||||||||||||||||
Non-credit portion of OTTI losses recognized in OCI before income taxes | — | — | — | — | — | — | ||||||||||||||||||||||||
Net pension liability adjustment before income taxes | — | — | — | — | — | — | ||||||||||||||||||||||||
Net unrealized other gains (losses) before income taxes | — | — | — | — | — | — | ||||||||||||||||||||||||
Net unrealized derivative instruments gains (losses) before income taxes | — | — | — | — | — | — | ||||||||||||||||||||||||
Other comprehensive income (loss) before income taxes | -5.8 | 13.8 | — | — | 3.6 | 11.6 | ||||||||||||||||||||||||
Less: Income tax expense (benefit) related to: | ||||||||||||||||||||||||||||||
Net unrealized investment gains (losses) | — | — | — | — | — | — | ||||||||||||||||||||||||
Non-credit portion of OTTI losses recognized in OCI | — | — | — | — | — | — | ||||||||||||||||||||||||
Net pension liability adjustment | — | — | — | — | — | — | ||||||||||||||||||||||||
Net unrealized other gains (losses) | — | — | — | — | — | — | ||||||||||||||||||||||||
Net unrealized derivative instruments gains (losses) | — | — | — | — | — | — | ||||||||||||||||||||||||
Total income tax expense (benefit) | — | — | — | — | — | — | ||||||||||||||||||||||||
Other comprehensive income (loss), net of income taxes | -5.8 | 13.8 | — | — | 3.6 | 11.6 | ||||||||||||||||||||||||
Comprehensive income (loss) attributable to The Phoenix Companies, Inc. | -7.9 | 16.4 | — | -12.4 | — | -3.9 | ||||||||||||||||||||||||
Add: Comprehensive income attributable to noncontrolling interests | — | — | — | — | — | — | ||||||||||||||||||||||||
Comprehensive income (loss) | $ | -7.9 | $ | 16.4 | $ | — | $ | -12.4 | $ | — | $ | -3.9 | ||||||||||||||||||
——————— | ||||||||||||||||||||||||||||||
-1 | All amounts are shown before income taxes, unless otherwise noted. | |||||||||||||||||||||||||||||
-2 | Amounts represent the total “Summary of Correction of Investments Errors” which is further aggregated into the “Consolidated Summary of Correction of Errors” in the following pages. | |||||||||||||||||||||||||||||
Increase (decrease) | Summary of Correction of Investments Errors – December 31, 2010 Income Statement Impacts (1) | |||||||||||||||||||||||||||||
($ in millions) | Investments | |||||||||||||||||||||||||||||
OIA | Available-for-Sale | Derivative | Structured | Total | ||||||||||||||||||||||||||
Securities | Valuation | Securities | Investments | |||||||||||||||||||||||||||
Valuation | Bond Call | Errors (2) | ||||||||||||||||||||||||||||
REVENUES | ||||||||||||||||||||||||||||||
Premiums | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||||
Fee income | — | — | — | — | — | — | ||||||||||||||||||||||||
Net investment income | -3.7 | 1.9 | — | — | -2.9 | -4.7 | ||||||||||||||||||||||||
Net realized investment gains (losses): | ||||||||||||||||||||||||||||||
Total OTTI losses | — | — | — | — | -1 | -1 | ||||||||||||||||||||||||
Portion of OTTI losses recognized in OCI | — | — | — | — | 3.0 | 3.0 | ||||||||||||||||||||||||
Net OTTI losses recognized in earnings | — | — | — | — | 2.0 | 2.0 | ||||||||||||||||||||||||
Net realized investment gains (losses), excluding OTTI losses | 0.2 | 0.7 | — | -1.3 | -1.6 | -2 | ||||||||||||||||||||||||
Net realized investment gains (losses) | 0.2 | 0.7 | — | -1.3 | 0.4 | — | ||||||||||||||||||||||||
Gain on debt repurchase | — | — | — | — | — | — | ||||||||||||||||||||||||
Total revenues | -3.5 | 2.6 | — | -1.3 | -2.5 | -4.7 | ||||||||||||||||||||||||
BENEFITS AND EXPENSES | ||||||||||||||||||||||||||||||
Policy benefits, excluding policyholder dividends | — | — | — | — | — | – | ||||||||||||||||||||||||
Policyholder dividends | -7.4 | 0.3 | — | — | -3.1 | -10.2 | ||||||||||||||||||||||||
Policy acquisition cost amortization | — | — | — | 2.9 | — | 2.9 | ||||||||||||||||||||||||
Interest expense on indebtedness | — | — | — | — | — | — | ||||||||||||||||||||||||
Other operating expenses | 1.4 | — | — | — | — | 1.4 | ||||||||||||||||||||||||
Total benefits and expenses | -6 | 0.3 | — | 2.9 | -3.1 | -5.9 | ||||||||||||||||||||||||
Income (loss) from continuing operations before income taxes | 2.5 | 2.3 | — | -4.2 | 0.6 | 1.2 | ||||||||||||||||||||||||
Income tax expense (benefit) | — | — | — | — | — | — | ||||||||||||||||||||||||
Income (loss) from continuing operations | 2.5 | 2.3 | — | -4.2 | 0.6 | 1.2 | ||||||||||||||||||||||||
Noncontrolling interests | -0.5 | — | — | — | — | -0.5 | ||||||||||||||||||||||||
Income (loss) from discontinued operations, net of income taxes | — | — | — | — | — | — | ||||||||||||||||||||||||
Net income (loss) attributable to The Phoenix Companies, Inc. | $ | 3.0 | $ | 2.3 | $ | — | $ | -4.2 | $ | 0.6 | $ | 1.7 | ||||||||||||||||||
——————— | ||||||||||||||||||||||||||||||
-1 | All amounts are shown before income taxes, unless otherwise noted. | |||||||||||||||||||||||||||||
-2 | Amounts represent the total “Summary of Correction of Investments Errors” which is further aggregated into the “Consolidated Summary of Correction of Errors” in the following pages. | |||||||||||||||||||||||||||||
(Continued from previous page) | Summary of Correction of Errors – December 31, 2010 | |||||||||||||||||||||||||||||
Increase (decrease) | Income Statement Impacts (1) | |||||||||||||||||||||||||||||
($ in millions) | Investments | |||||||||||||||||||||||||||||
OIA | Available-for-Sale | Derivative | Structured | Total | ||||||||||||||||||||||||||
Securities | Valuation | Securities | Investments | |||||||||||||||||||||||||||
Valuation | Bond Call | Errors (2) | ||||||||||||||||||||||||||||
COMPREHENSIVE INCOME (LOSS): | ||||||||||||||||||||||||||||||
Net income (loss) attributable to The Phoenix Companies, Inc. | $ | 3.0 | $ | 2.3 | $ | — | $ | -4.2 | $ | 0.6 | $ | 1.7 | ||||||||||||||||||
Other comprehensive income (loss) before income taxes: | ||||||||||||||||||||||||||||||
Net unrealized investment gains before income taxes | -9.9 | 10.5 | — | — | -0.6 | — | ||||||||||||||||||||||||
Non-credit portion of OTTI losses recognized in OCI before income taxes | — | — | — | — | — | — | ||||||||||||||||||||||||
Net pension liability adjustment before income taxes | — | — | — | — | — | — | ||||||||||||||||||||||||
Net unrealized other gains (losses) before income taxes | — | — | — | — | — | — | ||||||||||||||||||||||||
Net unrealized derivative instruments gains (losses) before income taxes | — | — | — | — | — | — | ||||||||||||||||||||||||
Other comprehensive income (loss) before income taxes | -9.9 | 10.5 | — | — | -0.6 | — | ||||||||||||||||||||||||
Less: Income tax expense (benefit) related to: | ||||||||||||||||||||||||||||||
Net unrealized investment gains (losses) | — | — | — | — | — | — | ||||||||||||||||||||||||
Non-credit portion of OTTI losses recognized in OCI | — | — | — | — | — | — | ||||||||||||||||||||||||
Net pension liability adjustment | — | — | — | — | — | — | ||||||||||||||||||||||||
Net unrealized other gains (losses) | — | — | — | — | — | — | ||||||||||||||||||||||||
Net unrealized derivative instruments gains (losses) | — | — | — | — | — | — | ||||||||||||||||||||||||
Total income tax expense (benefit) | — | — | — | — | — | — | ||||||||||||||||||||||||
Other comprehensive income (loss), net of income taxes | -9.9 | 10.5 | — | — | -0.6 | — | ||||||||||||||||||||||||
Comprehensive income (loss) attributable to The Phoenix Companies, Inc. | -6.9 | 12.8 | — | -4.2 | — | 1.7 | ||||||||||||||||||||||||
Add: Comprehensive income attributable to noncontrolling interests | — | — | — | — | — | — | ||||||||||||||||||||||||
Comprehensive income (loss) | $ | -6.9 | $ | 12.8 | $ | — | $ | -4.2 | $ | — | $ | 1.7 | ||||||||||||||||||
——————— | ||||||||||||||||||||||||||||||
-1 | All amounts are shown before income taxes, unless otherwise noted. | |||||||||||||||||||||||||||||
-2 | Amounts represent the total “Summary of Correction of Investments Errors” which are further aggregated into the “Consolidated Summary of Correction of Errors” in the following pages. | |||||||||||||||||||||||||||||
Reinsurance Accounting | ||||||||||||||||||||||||||||||
In 2008 and in 2009, the Company entered into complex reinsurance agreements with one of its reinsurers which resulted in net costs incurred to the Company. Rather than appropriately deferring and amortizing these costs over the life of the underlying business, the Company had previously recognized these costs immediately in net income. The impact of the correction of these errors on the consolidated financial statements is presented in the “Consolidated Summary of Correction of Errors” table within this Note below. | ||||||||||||||||||||||||||||||
The Company also determined that loss recognition was appropriate for a portion of the underlying block of business both, prior to and subsequent to, entering into the reinsurance agreement. The impact of the loss recognition prior to the reinsurance then indirectly impacted the amount of costs deferred at day one. The impact of the loss recognition error on those costs deferred resulted in a reduction of approximately $39.6 million and is reflected within the “Summary of Correction of Actuarial Finance Errors” table above. The impact of the reinsurance component of this error on the consolidated financial statements is presented in the “Consolidated Summary of Correction of Errors” table within this Note below. | ||||||||||||||||||||||||||||||
In addition, certain errors were identified related to the Company’s net presentation of direct and ceded reinsurance liabilities on the consolidated balance sheets. As a result, ceded policy liabilities were reclassified from policy liabilities and accruals to receivables within the consolidated balance sheets to correct the error and reflect the proper gross presentation required under U.S. GAAP. See “Changes in Classifications” section below for additional information. | ||||||||||||||||||||||||||||||
Pensions | ||||||||||||||||||||||||||||||
Pension adjustments summarized below primarily relate to the valuation of our defined benefit plans and post retirement liabilities as a result of census data errors and incorrect application of the Company’s benefit plan features in the calculation of the liabilities. The impact of the correction of these errors on the consolidated financial statements is presented in the “Consolidated Summary of Correction of Errors” table within this Note below. | ||||||||||||||||||||||||||||||
Limited Partnerships and Other Investments Taxable Income Reporting | ||||||||||||||||||||||||||||||
An error related to the completeness and accuracy of taxable income related to our OIA portfolio was identified resulting in the inappropriate exclusion of taxable income reported from partnerships during the period from 2008 through 2011. The impact of the correction of these errors on the consolidated financial statements is presented in the “Consolidated Summary of Correction of Errors” table within this Note below. | ||||||||||||||||||||||||||||||
Cash Flows and Changes in Classifications | ||||||||||||||||||||||||||||||
· | Consolidated Statement of Cash Flows – The Company identified errors within its previously issued consolidated statement of cash flows which primarily consisted of: (i) the incorrect classification of deposits and withdrawals of universal life products as cash flows used for operating activities; (ii) the incorrect classification of capitalized interest on policy loans as an investing activity; (iii) certain other classification errors within cash flows from investing activities primarily related to investment purchases and sales; and (iv) the net impact of all other errors previously and separately described within this Note. The impact of the correction of these errors to each individual financial statement line item within the consolidated statement of cash flows is summarized below and included in detail within the restated and amended consolidated statement of cash flows within this Note. | |||||||||||||||||||||||||||||
Increase (decrease) | For the year ended | |||||||||||||||||||||||||||||
($ in millions) | December 31, | |||||||||||||||||||||||||||||
2011 | 2010 | |||||||||||||||||||||||||||||
Consolidated Statement of Cash Flows | ||||||||||||||||||||||||||||||
Cash provided by (used for) operating activities | $ | -299.4 | $ | -364.6 | ||||||||||||||||||||||||||
Cash provided by (used for) investing activities | 138.6 | 180.5 | ||||||||||||||||||||||||||||
Cash provided by (used for) financing activities | 161.6 | 161.8 | ||||||||||||||||||||||||||||
In addition to these errors noted above, the Company made certain changes in presentation to enhance disclosure of certain cash activity within the consolidated statement of cash flows. Most significantly: (i) interest credited to policyholder accounts has been separately disclosed within cash flows used for operating activities; and (ii) deposits into and withdrawals from separate accounts have been presented gross, rather than net, within cash flows provided by financing activities which are also reflected in the correction of errors above and within the restated and amended consolidated statement of cash flows within this Note. These changes in presentation did not have any impact on total cash flows provided by (used for) continuing operations, investing activities or financing activities. | ||||||||||||||||||||||||||||||
· | Changes in Classifications – The Company made certain corrections to: (i) present outstanding checks and cash held as collateral by a third party related to our derivative transactions in order to appropriately reflect the legal right of offset and to properly reclassify certain suspense accounts; (ii) reflect direct and ceded reinsurance liabilities gross in the consolidated balance sheets as described above in “Reinsurance Accounting” section; and (iii) reclassify sales inducements assets from deferred policy acquisition costs to other assets as well as separately present dividend obligations as its own financial statement line within the consolidated balance sheets. These corrections had no impact to net income or total stockholders’ equity. The impact of the changes in classification are reflected in the correction of errors column in the “Consolidated Summary of Correction of Errors” table within this Note. | |||||||||||||||||||||||||||||
Revision for the Retrospective Adoption of Amended Accounting Guidance | ||||||||||||||||||||||||||||||
In October 2010, the Financial Accounting Standards Board (the “FASB”) issued amended guidance to ASC 944, Financial Services – Insurance, to address the diversity in practice for accounting for costs associated with acquiring or renewing insurance contracts. The amendment clarifies the definition of acquisition costs (i.e., costs which qualify for deferral) to include only incremental direct costs that result directly from, and are essential to, a contract and would not have been incurred by the insurance entity had the contract transaction not occurred. Therefore, only costs related to successful efforts of acquiring a new, or renewal, contract should be deferred. This guidance was retrospectively adopted on January 1, 2012 and such retrospective adoption results in amendments to previously reported balances as shown in the table below as if the guidance was applied at the inception of all policies in force. The cumulative effect of retrospective adoption reduced deferred policy acquisition costs and beginning stockholders’ equity by $166.5 million as of January 1, 2012. In any period, the adoption resulted in a decrease in amortization of policy acquisition costs due to the reduced deferred policy acquisition cost asset. Adjustments for the retrospective adoption reflect the impact of the adoption after consideration of correcting the errors associated with the restatement as noted more fully in the tables reflecting the impact of the retrospective adoption on consolidated financial statements presented within this Note below. | ||||||||||||||||||||||||||||||
Increase (decrease) | Consolidated Summary of Correction of Errors – December 31, 2011 Balance Sheet Impacts (1) | |||||||||||||||||||||||||||||
($ in millions) | Total | Total | Reinsurance | Pensions | OIA | Changes in Classification | ||||||||||||||||||||||||
Actuarial | Investments (3) | Accounting | Taxable | Cash and | Reinsurance | Reclassify & | Other | Total | ||||||||||||||||||||||
Finance (2) | Income | Suspense | Separately | Restatement | Correction | |||||||||||||||||||||||||
Present | Adjustments | of Errors (4) | ||||||||||||||||||||||||||||
ASSETS: | ||||||||||||||||||||||||||||||
Available-for-sale | $ | — | $ | -91 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | -2 | $ | -93 | ||||||||||
debt securities, at fair value | ||||||||||||||||||||||||||||||
Available-for-sale | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||
equity securities, at fair value | ||||||||||||||||||||||||||||||
Limited partnerships and | — | -35.9 | — | — | — | — | — | — | -0.1 | -36 | ||||||||||||||||||||
other investments | ||||||||||||||||||||||||||||||
Policy loans, | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||
at unpaid principal balances | ||||||||||||||||||||||||||||||
Derivative investments | — | -12.6 | — | — | — | — | — | — | — | -12.6 | ||||||||||||||||||||
Fair value investments | — | 97.5 | — | — | — | — | — | — | -0.1 | 97.4 | ||||||||||||||||||||
Total investments | — | -42 | — | — | — | — | — | — | -2.2 | -44.2 | ||||||||||||||||||||
Cash and cash equivalents | — | 2.0 | — | — | — | -28.4 | — | — | 0.3 | -26.1 | ||||||||||||||||||||
Accrued investment income | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||
Receivables | 17.6 | — | — | — | — | 16.4 | 196.6 | — | 2.9 | 233.5 | ||||||||||||||||||||
Deferred policy acquisition costs | 41.5 | -13.1 | — | — | — | — | — | -42.2 | 0.1 | -13.7 | ||||||||||||||||||||
Deferred income taxes, net | — | — | — | — | — | — | — | — | 2.4 | 2.4 | ||||||||||||||||||||
Other assets | -33.8 | 12.1 | 39.6 | — | — | 8.8 | — | 42.2 | -2.4 | 66.5 | ||||||||||||||||||||
Discontinued operations assets | — | — | — | — | — | — | 14.1 | — | 2.0 | 16.1 | ||||||||||||||||||||
Separate account assets | — | — | — | -0.7 | — | — | — | — | — | -0.7 | ||||||||||||||||||||
Total assets | $ | 25.3 | $ | -41 | $ | 39.6 | $ | -0.7 | $ | — | $ | -3.2 | $ | 210.7 | $ | — | $ | 3.1 | $ | 233.8 | ||||||||||
——————— | ||||||||||||||||||||||||||||||
-1 | All amounts are shown before income taxes, unless otherwise noted. | |||||||||||||||||||||||||||||
-2 | Represents “Summary of Correction of Actuarial Finance Errors” from the previous pages of this Note. | |||||||||||||||||||||||||||||
-3 | Represents “Summary of Correction of Investments Errors from the previous pages of this Note. | |||||||||||||||||||||||||||||
-4 | Amounts represent total correction of errors which is also presented in the “Consolidated Statement of Comprehensive Income” reflected in the tables on the following pages. | |||||||||||||||||||||||||||||
(Continued from previous page) | Consolidated Summary of Correction of Errors – December 31, 2011 Balance Sheet Impacts (1) | |||||||||||||||||||||||||||||
Increase (decrease) | Total | Total | Reinsurance | Pensions | OIA | Changes in Classification | ||||||||||||||||||||||||
($ in millions) | Actuarial | Investments (3) | Accounting | Taxable | Cash and | Reinsurance | Reclassify & | Other | Total | |||||||||||||||||||||
Finance (2) | Income | Suspense | Separately | Restatement | Correction | |||||||||||||||||||||||||
Present | Adjustments | of Errors (4) | ||||||||||||||||||||||||||||
LIABILITIES: | ||||||||||||||||||||||||||||||
Policy liabilities and accruals | $ | 240.7 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 196.6 | $ | -759.8 | $ | 5.3 | $ | -317.2 | ||||||||||
Policyholder deposit funds | 2.9 | — | — | — | — | — | — | — | -0.1 | 2.8 | ||||||||||||||||||||
Dividend obligation | 1.0 | -7.6 | — | — | — | — | — | 759.8 | -0.7 | 752.5 | ||||||||||||||||||||
Indebtedness | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||
Other liabilities | 0.2 | 12.5 | — | 22.9 | 6.9 | -3.2 | — | — | 5.0 | 44.3 | ||||||||||||||||||||
Discontinued operations | — | — | — | — | — | — | 14.1 | — | 2.0 | 16.1 | ||||||||||||||||||||
liabilities | ||||||||||||||||||||||||||||||
Separate account liabilities | — | — | — | -0.7 | — | — | — | — | — | -0.7 | ||||||||||||||||||||
Total liabilities | 244.8 | 4.9 | — | 22.2 | 6.9 | -3.2 | 210.7 | — | 11.5 | 497.8 | ||||||||||||||||||||
STOCKHOLDERS’ EQUITY: | ||||||||||||||||||||||||||||||
Common stock | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||
Additional paid-in capital | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||
Accumulated other | -14.2 | 11.6 | — | -13.4 | — | — | — | — | -49.7 | -65.7 | ||||||||||||||||||||
comprehensive loss | ||||||||||||||||||||||||||||||
Accumulated deficit | -114.9 | -13.8 | 3.0 | 5.3 | -3.3 | — | — | — | 11.1 | -112.6 | ||||||||||||||||||||
Treasury stock | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||
Noncontrolling interests | — | -1 | — | — | — | — | — | — | — | -1 | ||||||||||||||||||||
Total stockholders’ equity – | -129.1 | -3.2 | 3.0 | -8.1 | -3.3 | — | — | — | -38.6 | -179.3 | ||||||||||||||||||||
periods presented (5) | ||||||||||||||||||||||||||||||
Total stockholders’ equity – | -90.4 | -42.7 | 36.6 | -14.8 | -3.6 | — | — | — | 30.2 | -84.7 | ||||||||||||||||||||
cumulative impact (6) | ||||||||||||||||||||||||||||||
Total stockholders’ equity –impact | -219.5 | -45.9 | 39.6 | -22.9 | -6.9 | — | — | — | -8.4 | -264 | ||||||||||||||||||||
Total liabilities and | $ | 25.3 | $ | -41 | $ | 39.6 | $ | -0.7 | $ | — | $ | -3.2 | $ | 210.7 | $ | — | $ | 3.1 | $ | 233.8 | ||||||||||
stockholders’ equity | ||||||||||||||||||||||||||||||
——————— | ||||||||||||||||||||||||||||||
-1 | All amounts are shown before income taxes, unless otherwise noted. | |||||||||||||||||||||||||||||
-2 | Represents “Summary of Correction of Actuarial Finance Errors” from the previous pages of this Note. | |||||||||||||||||||||||||||||
-3 | Represents “Summary of Correction of Investments Errors from the previous pages of this Note. | |||||||||||||||||||||||||||||
-4 | Amounts represent total correction of errors which is also presented in the “Consolidated Statement of Comprehensive Income” reflected in the tables on the following pages. | |||||||||||||||||||||||||||||
-5 | Amounts represent restatement changes made to the 2011 and 2010 periods as presented. | |||||||||||||||||||||||||||||
-6 | Amounts represent cumulative impact of restatement changes made to periods prior to 2010. | |||||||||||||||||||||||||||||
Increase (decrease) | Summary of Correction of Errors – December 31, 2011 Income Statement Impacts (1) | |||||||||||||||||||||||||||||
($ in millions) | Consolidated | |||||||||||||||||||||||||||||
Total | Total | Reinsurance | Pensions | OIA | Other | Total | ||||||||||||||||||||||||
Actuarial | Investments (3) | Accounting | Taxable | Restatement | Correction | |||||||||||||||||||||||||
Finance (2) | Income | Adjustments | of Errors (4) | |||||||||||||||||||||||||||
REVENUES | ||||||||||||||||||||||||||||||
Premiums | $ | -10.4 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | -10.4 | ||||||||||||||||
Fee income | -0.3 | — | — | — | — | — | -0.3 | |||||||||||||||||||||||
Net investment income | — | 12.9 | — | — | — | 0.1 | 13.0 | |||||||||||||||||||||||
Net realized investment gains (losses): | ||||||||||||||||||||||||||||||
Total OTTI losses | — | 4.5 | — | — | — | -5.2 | -0.7 | |||||||||||||||||||||||
Portion of OTTI losses recognized in OCI | — | -3.5 | — | — | — | 3.1 | -0.4 | |||||||||||||||||||||||
Net OTTI losses recognized in earnings | — | 1.0 | — | — | — | -2.1 | -1.1 | |||||||||||||||||||||||
Net realized investment gains (losses), excluding OTTI losses | (1.1) | -17.4 | — | — | — | 3.9 | -14.6 | |||||||||||||||||||||||
Net realized investment gains (losses) | (1.1) | -16.4 | — | — | — | 1.8 | -15.7 | |||||||||||||||||||||||
Gain on debt repurchase | — | — | — | — | — | 0.2 | 0.2 | |||||||||||||||||||||||
Total revenues | -11.8 | -3.5 | — | — | — | 2.1 | -13.2 | |||||||||||||||||||||||
BENEFITS AND EXPENSES | ||||||||||||||||||||||||||||||
Policy benefits, excluding policyholder dividends | 45.8 | — | 3.3 | — | — | -0.1 | 49.0 | |||||||||||||||||||||||
Policyholder dividends | -1.3 | 11.9 | — | — | — | 1.7 | 12.3 | |||||||||||||||||||||||
Policy acquisition cost amortization | -14.5 | -0.6 | — | — | — | -0.2 | -15.3 | |||||||||||||||||||||||
Interest expense on indebtedness | — | — | — | — | — | — | — | |||||||||||||||||||||||
Other operating expenses | 6.6 | 1.2 | — | -7.1 | — | 0.7 | 1.4 | |||||||||||||||||||||||
Total benefits and expenses | 36.6 | 12.5 | 3.3 | -7.1 | — | 2.1 | 47.4 | |||||||||||||||||||||||
Income (loss) from continuing operations before income taxes | -48.4 | -16 | -3.3 | 7.1 | — | — | -60.6 | |||||||||||||||||||||||
Income tax expense (benefit) | — | — | — | — | -1.6 | 3.0 | 1.4 | |||||||||||||||||||||||
Income (loss) from continuing operations | -48.4 | -16 | -3.3 | 7.1 | 1.6 | -3 | -62 | |||||||||||||||||||||||
Noncontrolling interests | — | -0.5 | — | — | — | — | -0.5 | |||||||||||||||||||||||
Income (loss) from discontinued operations, net of income taxes | — | — | — | — | — | 0.4 | 0.4 | |||||||||||||||||||||||
Net income (loss) attributable to The Phoenix Companies, Inc. | $ | -48.4 | $ | -15.5 | $ | -3.3 | $ | 7.1 | $ | 1.6 | $ | -2.6 | $ | -61.1 | ||||||||||||||||
——————— | ||||||||||||||||||||||||||||||
-1 | All amounts are shown before income taxes, unless otherwise noted. | |||||||||||||||||||||||||||||
-2 | Represents “Summary of Correction of Actuarial Finance Errors” from the previous pages of this Note. | |||||||||||||||||||||||||||||
-3 | Represents “Summary of Correction of Investments Errors from the previous pages of this Note. | |||||||||||||||||||||||||||||
-4 | Amounts represent total correction of errors which is also presented in the “Consolidated Statement of Comprehensive Income” reflected in the tables on the following pages. | |||||||||||||||||||||||||||||
(Continued from previous page) | Summary of Correction of Errors – December 31, 2011 Income Statement Impacts (1) | |||||||||||||||||||||||||||||
Increase (decrease) | Consolidated | |||||||||||||||||||||||||||||
($ in millions) | Total | Total | Reinsurance | Pensions | OIA | Other | Total | |||||||||||||||||||||||
Actuarial | Investments (3) | Accounting | Taxable | Restatement | Correction | |||||||||||||||||||||||||
Finance (2) | Income | Adjustments | of Errors (4) | |||||||||||||||||||||||||||
COMPREHENSIVE INCOME (LOSS): | ||||||||||||||||||||||||||||||
Net income (loss) attributable to The Phoenix Companies, Inc. | $ | -48.4 | $ | -15.5 | $ | -3.3 | $ | 7.1 | $ | 1.6 | $ | -2.6 | $ | -61.1 | ||||||||||||||||
Other comprehensive income (loss) before income taxes: | ||||||||||||||||||||||||||||||
Net unrealized investment gains before income taxes (5) | -35.9 | 11.6 | — | — | — | -0.8 | -25.1 | |||||||||||||||||||||||
Non-credit portion of OTTI losses recognized in OCI | — | — | — | — | — | -1.3 | -1.3 | |||||||||||||||||||||||
before income taxes (5) | ||||||||||||||||||||||||||||||
Net pension liability adjustment before income taxes | — | — | — | -14.9 | — | — | -14.9 | |||||||||||||||||||||||
Net unrealized other gains (losses) before income taxes | — | — | — | — | — | — | ||||||||||||||||||||||||
Net unrealized derivative instruments gains (losses) | — | — | — | — | — | -0.3 | -0.3 | |||||||||||||||||||||||
before income taxes (5) | ||||||||||||||||||||||||||||||
Other comprehensive income (loss) before income taxes | -35.9 | 11.6 | — | -14.9 | — | -2.4 | -41.6 | |||||||||||||||||||||||
Less: Income tax expense (benefit) related to: | ||||||||||||||||||||||||||||||
Net unrealized investment gains (losses) (5) | — | — | — | — | — | 11.6 | 11.6 | |||||||||||||||||||||||
Non-credit portion of OTTI losses recognized in OCI (5) | — | — | — | — | — | -0.5 | -0.5 | |||||||||||||||||||||||
Net pension liability adjustment | — | — | — | — | — | — | — | |||||||||||||||||||||||
Net unrealized other gains (losses) | — | — | — | — | — | — | — | |||||||||||||||||||||||
Net unrealized derivative instruments gains (losses) | — | — | — | — | — | — | — | |||||||||||||||||||||||
Total income tax expense (benefit) | — | — | — | 11.1 | 11.1 | |||||||||||||||||||||||||
Other comprehensive income (loss), net of income taxes | -35.9 | 11.6 | — | -14.9 | — | -13.5 | -52.7 | |||||||||||||||||||||||
Comprehensive income (loss) attributable to The Phoenix Companies, Inc. | -84.3 | -3.9 | -3.3 | -7.8 | 1.6 | -16.1 | -113.8 | |||||||||||||||||||||||
Add: Comprehensive income attributable to noncontrolling interests | — | — | — | — | — | -0.5 | -0.5 | |||||||||||||||||||||||
Comprehensive income (loss) | $ | -84.3 | $ | -3.9 | $ | -3.3 | $ | -7.8 | $ | 1.6 | $ | -16.6 | $ | -114.3 | ||||||||||||||||
——————— | ||||||||||||||||||||||||||||||
-1 | All amounts are shown before income taxes, unless otherwise noted. | |||||||||||||||||||||||||||||
-2 | Represents “Summary of Correction of Actuarial Finance Errors” from the previous pages of this Note. | |||||||||||||||||||||||||||||
-3 | Represents “Summary of Correction of Investments Errors from the previous pages of this Note. | |||||||||||||||||||||||||||||
-4 | Amounts represent total correction of errors which is also presented in the “Consolidated Statement of Comprehensive Income” reflected in the tables on the following pages. | |||||||||||||||||||||||||||||
-5 | In addition to adjustments described within this footnote the correction of errors column contains reclassifications related to changes in presentation of components of other comprehensive income. | |||||||||||||||||||||||||||||
Increase (decrease) | Summary of Correction of Errors – December 31, 2010 Income Statement Impacts (1) | |||||||||||||||||||||||||||||
($ in millions) | Consolidated | |||||||||||||||||||||||||||||
Total | Total | Reinsurance | Pensions | OIA | Other | Total | ||||||||||||||||||||||||
Actuarial | Investments (3) | Accounting | Taxable | Restatement | Correction | |||||||||||||||||||||||||
Finance (2) | Income | Adjustments | of Errors (4) | |||||||||||||||||||||||||||
REVENUES | ||||||||||||||||||||||||||||||
Premiums | $ | -13.9 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | -13.9 | ||||||||||||||||
Fee income | 3.4 | — | — | — | — | -0.1 | 3.3 | |||||||||||||||||||||||
Net investment income | — | -4.7 | — | — | — | 0.6 | -4.1 | |||||||||||||||||||||||
Net realized investment gains (losses): | ||||||||||||||||||||||||||||||
Total OTTI losses | — | -1 | — | — | — | -1.1 | -2.1 | |||||||||||||||||||||||
Portion of OTTI losses recognized in OCI | — | 3.0 | — | — | — | 0.1 | 3.1 | |||||||||||||||||||||||
Net OTTI losses recognized in earnings | — | 2.0 | — | — | — | -1 | 1.0 | |||||||||||||||||||||||
Net realized investment gains (losses), excluding OTTI losses | -4.9 | -2 | — | — | — | 4.6 | -2.3 | |||||||||||||||||||||||
Net realized investment gains (losses) | -4.9 | — | — | — | — | 3.6 | -1.3 | |||||||||||||||||||||||
Gain on debt repurchase | — | — | — | — | — | — | — | |||||||||||||||||||||||
Total revenues | -15.4 | -4.7 | — | — | — | 4.1 | -16 | |||||||||||||||||||||||
BENEFITS AND EXPENSES | ||||||||||||||||||||||||||||||
Policy benefits, excluding policyholder dividends | 25.9 | — | -6.3 | — | — | — | 19.6 | |||||||||||||||||||||||
Policyholder dividends | -0.5 | -10.2 | — | — | — | 2.7 | -8 | |||||||||||||||||||||||
Policy acquisition cost amortization | 26.0 | 2.9 | — | — | — | — | 28.9 | |||||||||||||||||||||||
Interest expense on indebtedness | — | — | — | — | — | — | — | |||||||||||||||||||||||
Other operating expenses | -0.3 | 1.4 | — | 1.7 | — | -7.6 | -4.8 | |||||||||||||||||||||||
Total benefits and expenses | 51.1 | -5.9 | -6.3 | 1.7 | — | -4.9 | 35.7 | |||||||||||||||||||||||
Income (loss) from continuing operations before income taxes | -66.5 | 1.2 | 6.3 | -1.7 | — | 9.0 | -51.7 | |||||||||||||||||||||||
Income tax expense (benefit) | — | — | — | — | 4.9 | -20.3 | -15.4 | |||||||||||||||||||||||
Income (loss) from continuing operations | -66.5 | 1.2 | 6.3 | -1.7 | -4.9 | 29.3 | -36.3 | |||||||||||||||||||||||
Noncontrolling interests | — | -0.5 | — | — | — | — | -0.5 | |||||||||||||||||||||||
Income (loss) from discontinued operations, net of income taxes | — | — | — | — | — | -15.6 | -5 | -15.6 | ||||||||||||||||||||||
Net income (loss) attributable to The Phoenix Companies, Inc. | $ | -66.5 | $ | 1.7 | $ | 6.3 | $ | -1.7 | $ | -4.9 | $ | 13.7 | $ | -51.4 | ||||||||||||||||
——————— | ||||||||||||||||||||||||||||||
-1 | All amounts are shown before income taxes, unless otherwise noted. | |||||||||||||||||||||||||||||
-2 | Represents “Summary of Correction of Actuarial Finance Errors” from the previous pages of this Note. | |||||||||||||||||||||||||||||
-3 | Represents “Summary of Correction of Investments Errors from the previous pages of this Note. | |||||||||||||||||||||||||||||
-4 | Amounts represent total correction of errors which is also presented in the “Consolidated Statement of Comprehensive Income” reflected in the tables on the following pages. | |||||||||||||||||||||||||||||
-5 | Amount represents the correction of an error of $15.6 million which decreased the estimated loss on the sale of PFG initially recorded in 2009. | |||||||||||||||||||||||||||||
(Continued from previous page) | Summary of Correction of Errors – December 31, 2010 Income Statement Impacts (1) | |||||||||||||||||||||||||||||
Increase (decrease) | Consolidated | |||||||||||||||||||||||||||||
($ in millions) | Total | Total | Reinsurance | Pensions | OIA | Other | Total | |||||||||||||||||||||||
Actuarial | Investments (3) | Accounting | Taxable | Restatement | Correction | |||||||||||||||||||||||||
Finance (2) | Income | Adjustments | of Errors (4) | |||||||||||||||||||||||||||
COMPREHENSIVE INCOME (LOSS): | ||||||||||||||||||||||||||||||
Net income (loss) attributable to The Phoenix Companies, Inc. | $ | -66.5 | $ | 1.7 | $ | 6.3 | $ | -1.7 | $ | -4.9 | $ | 13.7 | $ | -51.4 | ||||||||||||||||
Other comprehensive income (loss) before income taxes: | ||||||||||||||||||||||||||||||
Net unrealized investment gains before income taxes (5) | 21.7 | — | — | — | — | 14.6 | 36.3 | |||||||||||||||||||||||
Non-credit portion of OTTI losses recognized in OCI before income taxes (5) | — | — | — | — | — | 10.5 | 10.5 | |||||||||||||||||||||||
Net pension liability adjustment before income taxes | — | — | — | 1.4 | — | — | 1.4 | |||||||||||||||||||||||
Net unrealized other gains (losses) before income taxes | — | — | — | — | — | — | — | |||||||||||||||||||||||
Net unrealized derivative instruments gains (losses) before income taxes (5) | — | — | — | — | — | -28.3 | -28.3 | |||||||||||||||||||||||
Other comprehensive income (loss) before income taxes | 21.7 | — | — | 1.4 | — | -3.2 | 19.9 | |||||||||||||||||||||||
Less: Income tax expense (benefit) related to: | ||||||||||||||||||||||||||||||
Net unrealized investment gains (losses) (5) | — | — | — | — | — | 28.1 | 28.1 | |||||||||||||||||||||||
Non-credit portion of OTTI losses recognized in OCI (5) | — | — | — | — | — | 4.9 | 4.9 | |||||||||||||||||||||||
Net pension liability adjustment | — | — | — | — | — | — | — | |||||||||||||||||||||||
Net unrealized other gains (losses) | — | — | — | — | — | — | — | |||||||||||||||||||||||
Net unrealized derivative instruments gains (losses) | — | — | — | — | — | — | — | |||||||||||||||||||||||
Total income tax expense (benefit) | — | — | — | — | — | 33.0 | 33.0 | |||||||||||||||||||||||
Other comprehensive income (loss), net of income taxes | 21.7 | — | — | 1.4 | — | -36.2 | -13.1 | |||||||||||||||||||||||
Comprehensive income (loss) attributable to The Phoenix Companies, Inc. | -44.8 | 1.7 | 6.3 | -0.3 | -4.9 | -22.5 | -64.5 | |||||||||||||||||||||||
Add: Comprehensive income attributable to noncontrolling interests | — | — | — | — | — | -0.5 | -0.5 | |||||||||||||||||||||||
Comprehensive income (loss) | $ | -44.8 | $ | 1.7 | $ | 6.3 | $ | -0.3 | $ | -4.9 | $ | -23 | $ | -65 | ||||||||||||||||
——————— | ||||||||||||||||||||||||||||||
-1 | All amounts are shown before income taxes, unless otherwise noted. | |||||||||||||||||||||||||||||
-2 | Represents “Summary of Correction of Actuarial Finance Errors” from the previous pages of this Note. | |||||||||||||||||||||||||||||
-3 | Represents “Summary of Correction of Investments Errors from the previous pages of this Note. | |||||||||||||||||||||||||||||
-4 | Amounts represent total correction of errors which is also presented in the “Consolidated Statement of Comprehensive Income” reflected in the tables on the following pages. | |||||||||||||||||||||||||||||
-5 | In addition to adjustments described within this footnote the correction of errors column contains reclassifications related to changes in presentation of components of other comprehensive income. | |||||||||||||||||||||||||||||
2. Restatement and Amendment of Previously Reported Financial Information (Part 2) | ' | |||||||||||||||||||||||||||||
Consolidated Balance Sheet | ||||||||||||||||||||||||||||||
($ in millions, except share data) | As of and for the year ended December 31, 2011 | |||||||||||||||||||||||||||||
As previously | Correction | Adjusted | Retrospective | As restated | ||||||||||||||||||||||||||
reported | of errors (1) | prior to the | Adoption (2) | and amended | ||||||||||||||||||||||||||
retrospective | ||||||||||||||||||||||||||||||
adoption | ||||||||||||||||||||||||||||||
ASSETS: | ||||||||||||||||||||||||||||||
Available-for-sale debt securities, at fair value | $ | 11,890.0 | $ | -93 | $ | 11,797.0 | $ | — | $ | 11,797.0 | ||||||||||||||||||||
Available-for-sale equity securities, at fair value | 35.7 | — | 35.7 | — | 35.7 | |||||||||||||||||||||||||
Limited partnerships and other investments | 601.3 | -36 | 565.3 | — | 565.3 | |||||||||||||||||||||||||
Policy loans, at unpaid principal balances | 2,379.3 | — | 2,379.3 | — | 2,379.3 | |||||||||||||||||||||||||
Derivative investments | 174.8 | -12.6 | 162.2 | — | 162.2 | |||||||||||||||||||||||||
Fair value investments | 86.6 | 97.4 | 184.0 | — | 184.0 | |||||||||||||||||||||||||
Total investments | 15,167.7 | -44.2 | 15,123.5 | — | 15,123.5 | |||||||||||||||||||||||||
Cash and cash equivalents | 194.3 | -26.1 | 168.2 | — | 168.2 | |||||||||||||||||||||||||
Accrued investment income | 175.6 | — | 175.6 | — | 175.6 | |||||||||||||||||||||||||
Receivables | 415.1 | 233.5 | 648.6 | — | 648.6 | |||||||||||||||||||||||||
Deferred policy acquisition costs | 1,317.6 | -13.7 | 1,303.9 | -184.7 | 1,119.2 | |||||||||||||||||||||||||
Deferred income taxes, net | 118.2 | 2.4 | 120.6 | — | 120.6 | |||||||||||||||||||||||||
Other assets | 164.6 | 66.5 | 231.1 | -1 | 230.1 | |||||||||||||||||||||||||
Discontinued operations assets | 69.2 | 16.1 | 85.3 | — | 85.3 | |||||||||||||||||||||||||
Separate account assets | 3,817.6 | -0.7 | 3,816.9 | — | 3,816.9 | |||||||||||||||||||||||||
Total assets | $ | 21,439.9 | $ | 233.8 | $ | 21,673.7 | $ | -185.7 | $ | 21,488.0 | ||||||||||||||||||||
LIABILITIES: | ||||||||||||||||||||||||||||||
Policy liabilities and accruals (3) | $ | 12,967.8 | $ | -317.5 | $ | 12,650.6 | $ | -19.2 | $ | 12,631.4 | ||||||||||||||||||||
Policyholder deposit funds | 2,429.4 | 2.8 | 2,432.2 | — | 2,432.2 | |||||||||||||||||||||||||
Dividend obligations (4) | — | 752.5 | 752.5 | 752.5 | ||||||||||||||||||||||||||
Indebtedness | 426.9 | — | 426.9 | — | 426.9 | |||||||||||||||||||||||||
Other liabilities | 613.7 | 44.3 | 658.0 | — | 658.0 | |||||||||||||||||||||||||
Discontinued operations liabilities | 58.3 | 16.1 | 74.4 | — | 74.4 | |||||||||||||||||||||||||
Separate account liabilities | 3,817.6 | -0.7 | 3,816.9 | — | 3,816.9 | |||||||||||||||||||||||||
Total liabilities | 20,313.7 | 497.8 | 20,811.5 | -19.2 | 20,792.3 | |||||||||||||||||||||||||
COMMITMENTS AND CONTINGENT LIABILITIES (Notes 23, 24, & 25) | ||||||||||||||||||||||||||||||
STOCKHOLDERS’ EQUITY: | ||||||||||||||||||||||||||||||
Common stock, $.01 par value: 5.8 million | 1.3 | — | 1.3 | — | 1.3 | |||||||||||||||||||||||||
shares outstanding (5) | ||||||||||||||||||||||||||||||
Additional paid-in capital | 2,630.5 | — | 2,630.5 | — | 2,630.5 | |||||||||||||||||||||||||
Accumulated other comprehensive income (loss) | -170.7 | -103.5 | -274.2 | 43.5 | -230.7 | |||||||||||||||||||||||||
Accumulated deficit | -1,155.40 | -163.3 | -1,318.70 | -210 | -1,528.70 | |||||||||||||||||||||||||
Treasury stock, at cost: 0.6 million shares (5) | -179.5 | — | -179.5 | — | -179.5 | |||||||||||||||||||||||||
Total The Phoenix Companies, Inc. | 1,126.2 | -266.8 | 859.7 | -166.5 | 692.9 | |||||||||||||||||||||||||
stockholders’ equity | ||||||||||||||||||||||||||||||
Noncontrolling interests | — | 2.8 | 2.8 | — | 2.8 | |||||||||||||||||||||||||
Total stockholders’ equity | 1,126.2 | -264 | 862.2 | -166.5 | 695.7 | |||||||||||||||||||||||||
Total liabilities and stockholders’ equity | $ | 21,439.9 | $ | 233.8 | $ | 21,673.7 | $ | -185.7 | $ | 21,488.0 | ||||||||||||||||||||
——————— | ||||||||||||||||||||||||||||||
-1 | ||||||||||||||||||||||||||||||
Adjustments related to the correction of errors reflect amounts prior to the retrospective adoption of amended guidance to ASC 944, Financial Services – Insurance (ASU 2010-26). See footnote 2 below for additional information regarding these amounts and the retrospective adoption. | ||||||||||||||||||||||||||||||
-2 | ||||||||||||||||||||||||||||||
Adjustments related to the retrospective adoption of amended guidance to ASC 944, Financial Services – Insurance (ASU 2010-26), have been updated from those originally disclosed in the First Quarter 2012 Quarterly Report on Form 10-Q filing to reflect the correction of errors identified related to the adoption of the amended guidance as well as indirect impact of the correction of errors associated with the restatement. | ||||||||||||||||||||||||||||||
-3 | ||||||||||||||||||||||||||||||
Included within policyholder liabilities and accruals is the post-ASU gross profits followed by losses reserve of $211.8 million. The corresponding net post-ASU amount of $200.5 million reported within the consolidated financial statements includes $(11.2) million of shadow profits followed by losses, both of which are discussed further within the “Actuarial Finance” section of this Note. | ||||||||||||||||||||||||||||||
-4 | ||||||||||||||||||||||||||||||
Dividend obligations were previously included in policy liabilities and accruals. | ||||||||||||||||||||||||||||||
-5 | ||||||||||||||||||||||||||||||
All share amounts for all periods reflect the 1-for-20 reverse stock split, which was effective August 10, 2012. See Note 11 to these consolidated financial statements for additional information on the reverse stock split. | ||||||||||||||||||||||||||||||
Consolidated Statement of Comprehensive Income | ||||||||||||||||||||||||||||||
($ in millions, except share data) | As of and for the year ended December 31, 2011 | |||||||||||||||||||||||||||||
As previously | Correction | Adjusted | Retrospective | As restated | ||||||||||||||||||||||||||
reported | of errors (1) | prior to the | Adoption (2) | and amended | ||||||||||||||||||||||||||
retrospective | ||||||||||||||||||||||||||||||
adoption | ||||||||||||||||||||||||||||||
REVENUES: | ||||||||||||||||||||||||||||||
Premiums | $ | 459.1 | $ | -10.4 | $ | 448.7 | $ | — | $ | 448.7 | ||||||||||||||||||||
Fee income | 597.1 | -0.3 | 596.8 | — | 596.8 | |||||||||||||||||||||||||
Net investment income | 809.9 | 13.0 | 822.9 | — | 822.9 | |||||||||||||||||||||||||
Net realized investment gains (losses): | ||||||||||||||||||||||||||||||
Total OTTI losses | -64.6 | -0.7 | -65.3 | — | -65.3 | |||||||||||||||||||||||||
Portion of OTTI losses recognized in OCI | 38.9 | -0.4 | 38.5 | — | 38.5 | |||||||||||||||||||||||||
Net OTTI losses recognized in earnings | -25.7 | -1.1 | -26.8 | — | -26.8 | |||||||||||||||||||||||||
Net realized investment gains (losses), | 9.3 | -14.6 | -5.3 | — | -5.3 | |||||||||||||||||||||||||
excluding OTTI losses | ||||||||||||||||||||||||||||||
Net realized investment losses | -16.4 | -15.7 | -32.1 | — | -32.1 | |||||||||||||||||||||||||
Gain on debt repurchase | — | 0.2 | 0.2 | — | 0.2 | |||||||||||||||||||||||||
Total revenues | 1,849.7 | -13.2 | 1,836.5 | — | 1,836.5 | |||||||||||||||||||||||||
BENEFITS AND EXPENSES: | ||||||||||||||||||||||||||||||
Policy benefits, excluding policyholder dividends | 1,083.2 | 49.0 | 1,132.2 | 4.8 | 1,137.0 | |||||||||||||||||||||||||
Policyholder dividends | 246.9 | 12.3 | 259.2 | — | 259.2 | |||||||||||||||||||||||||
Policy acquisition cost amortization | 210.6 | -15.2 | 195.4 | -37.5 | 157.9 | |||||||||||||||||||||||||
Interest expense on indebtedness | 31.8 | — | 31.8 | — | 31.8 | |||||||||||||||||||||||||
Other operating expenses | 245.2 | 1.4 | 246.6 | 1.3 | 247.9 | |||||||||||||||||||||||||
Total benefits and expenses | 1,817.7 | 47.5 | 1,865.2 | -31.4 | 1,833.8 | |||||||||||||||||||||||||
Income (loss) from continuing operations | 32.0 | -60.7 | -28.7 | 31.4 | 2.7 | |||||||||||||||||||||||||
before income taxes | ||||||||||||||||||||||||||||||
Income tax benefit | 1.9 | 1.4 | 3.3 | 9.0 | 12.3 | |||||||||||||||||||||||||
Income (loss) from continuing operations | 30.1 | -62.1 | -32 | 22.4 | -9.6 | |||||||||||||||||||||||||
Income (loss) from discontinued operations, | -22 | 0.4 | -21.6 | — | -21.6 | |||||||||||||||||||||||||
net of income taxes | ||||||||||||||||||||||||||||||
Net income (loss) | 8.1 | -61.7 | -53.6 | 22.4 | -31.2 | |||||||||||||||||||||||||
Less: Net income (loss) attributable to | — | -0.5 | -0.5 | — | -0.5 | |||||||||||||||||||||||||
noncontrolling interests | ||||||||||||||||||||||||||||||
Net income (loss) attributable to | $ | 8.1 | $ | -61.2 | $ | -53.1 | $ | 22.4 | $ | -30.7 | ||||||||||||||||||||
The Phoenix Companies, Inc. | ||||||||||||||||||||||||||||||
(Continued from previous page) | Consolidated Statement of Comprehensive Income | |||||||||||||||||||||||||||||
($ in millions, except share data) | As of and for the year ended December 31, 2011 | |||||||||||||||||||||||||||||
As previously | Correction | Adjusted | Retrospective | As restated | ||||||||||||||||||||||||||
reported | of errors (1) | prior to the | Adoption (2) | and amended | ||||||||||||||||||||||||||
retrospective | ||||||||||||||||||||||||||||||
adoption | ||||||||||||||||||||||||||||||
COMPREHENSIVE INCOME (LOSS): | ||||||||||||||||||||||||||||||
Net income (loss) attributable to | $ | 8.1 | $ | -61.2 | $ | -53.1 | $ | 22.4 | $ | -30.7 | ||||||||||||||||||||
The Phoenix Companies, Inc. | ||||||||||||||||||||||||||||||
Less: Net income (loss) attributable to | — | -0.5 | -0.5 | — | -0.5 | |||||||||||||||||||||||||
noncontrolling interests | ||||||||||||||||||||||||||||||
Net income (loss) | 8.1 | -61.7 | -53.6 | 22.4 | -31.2 | |||||||||||||||||||||||||
Other comprehensive income (loss) | ||||||||||||||||||||||||||||||
before income taxes: | ||||||||||||||||||||||||||||||
Net unrealized investment gains | 77.5 | -25.1 | 52.4 | 6.3 | 58.7 | |||||||||||||||||||||||||
before income taxes (5) | ||||||||||||||||||||||||||||||
Non-credit portion of OTTI losses | -32.5 | -1.3 | -33.8 | — | -33.8 | |||||||||||||||||||||||||
recognized in OCI before income taxes (5) | ||||||||||||||||||||||||||||||
Net pension liability adjustment | -84.2 | -14.9 | -99.1 | — | -99.1 | |||||||||||||||||||||||||
before income taxes | ||||||||||||||||||||||||||||||
Net unrealized other gains (losses) | — | — | — | — | — | |||||||||||||||||||||||||
before income taxes | ||||||||||||||||||||||||||||||
Net unrealized derivative instruments gains (losses) | 0.3 | -0.3 | — | — | — | |||||||||||||||||||||||||
before income taxes (5) | ||||||||||||||||||||||||||||||
Other comprehensive income (loss) | -38.9 | -41.6 | -80.5 | 6.3 | -74.2 | |||||||||||||||||||||||||
before income taxes | ||||||||||||||||||||||||||||||
Less: Income tax expense (benefit) related to: | ||||||||||||||||||||||||||||||
Net unrealized investment gains (losses) | 9.4 | 11.6 | 21.0 | -8.9 | 12.1 | |||||||||||||||||||||||||
Non-credit portion of OTTI losses | -11.4 | -0.4 | -11.8 | — | -11.8 | |||||||||||||||||||||||||
recognized in OCI (5) | ||||||||||||||||||||||||||||||
Net pension liability adjustment (5) | — | — | — | — | — | |||||||||||||||||||||||||
Net unrealized other gains (losses) | — | — | — | — | ||||||||||||||||||||||||||
Net unrealized derivative instruments | — | — | — | — | — | |||||||||||||||||||||||||
gains (losses) | ||||||||||||||||||||||||||||||
Total income tax benefit | -2 | 11.2 | 9.2 | -8.9 | 0.3 | |||||||||||||||||||||||||
Other comprehensive income (loss), | -36.9 | -52.8 | -89.7 | 15.2 | -74.5 | |||||||||||||||||||||||||
net of income taxes | ||||||||||||||||||||||||||||||
Comprehensive income (loss) | -28.8 | $ | -114.5 | $ | -143.3 | $ | 37.6 | $ | -105.7 | |||||||||||||||||||||
Less: Comprehensive income (loss) attributable to | — | -0.5 | -0.5 | — | -0.5 | |||||||||||||||||||||||||
noncontrolling interests, net of income taxes | ||||||||||||||||||||||||||||||
Comprehensive income (loss) attributable to | $ | -28.8 | $ | -114 | $ | -142.8 | $ | 37.6 | $ | -105.2 | ||||||||||||||||||||
The Phoenix Companies, Inc. | ||||||||||||||||||||||||||||||
(Continued from previous page) | Consolidated Statement of Comprehensive Income | |||||||||||||||||||||||||||||
($ in millions, except share data) | As of and for the year ended December 31, 2011 | |||||||||||||||||||||||||||||
As previously | Correction | Adjusted | Retrospective | As restated | ||||||||||||||||||||||||||
reported | of errors (1) | prior to the | Adoption (2) | and amended | ||||||||||||||||||||||||||
retrospective | ||||||||||||||||||||||||||||||
adoption | ||||||||||||||||||||||||||||||
EARNINGS (LOSS) PER SHARE: (3) | ||||||||||||||||||||||||||||||
Earnings (loss) from continuing operations – basic | $ | 5.17 | $ | -10.68 | NM | $ | 3.85 | $ | -1.65 | |||||||||||||||||||||
Earnings (loss) from continuing operations – diluted | $ | 5.10 | $ | -10.68 | NM | $ | 3.85 | $ | -1.65 | |||||||||||||||||||||
Earnings (loss) from discontinued operations – basic | $ | -3.78 | $ | 0.07 | NM | $ | — | $ | -3.71 | |||||||||||||||||||||
Earnings (loss) from discontinued operations – diluted | $ | -3.78 | $ | 0.07 | NM | $ | — | $ | -3.71 | |||||||||||||||||||||
Net earnings (loss) attributable to | $ | 1.39 | $ | -10.52 | NM | $ | 3.85 | $ | -5.28 | |||||||||||||||||||||
The Phoenix Companies, Inc. – basic | ||||||||||||||||||||||||||||||
Net earnings (loss) attributable to | $ | 1.37 | $ | -10.52 | NM | $ | 3.85 | $ | -5.28 | |||||||||||||||||||||
The Phoenix Companies, Inc. – diluted | ||||||||||||||||||||||||||||||
Basic weighted-average common shares outstanding | 5,826 | 5,815 | -4 | NM | 5,815 | 5,815 | ||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||||||
Diluted weighted-average common shares | 5,898 | 5,815 | -4 | NM | 5,815 | 5,815 | ||||||||||||||||||||||||
outstanding (in thousands) | ||||||||||||||||||||||||||||||
——————— | ||||||||||||||||||||||||||||||
-1 | ||||||||||||||||||||||||||||||
Adjustments related to the correction of errors reflect amounts prior to the retrospective adoption of amended guidance to ASC 944, Financial Services – Insurance (ASU 2010-26). See footnote 2 below for additional information regarding these amounts and the retrospective adoption. | ||||||||||||||||||||||||||||||
-2 | ||||||||||||||||||||||||||||||
Adjustments related to the retrospective adoption of amended guidance to ASC 944, Financial Services – Insurance (ASU 2010-26), have been updated from those originally disclosed in the First Quarter 2012 Quarterly Report on Form 10-Q filing to reflect the correction of errors identified related to the adoption of the amended guidance as well as indirect impact of the correction of errors associated with the restatement. | ||||||||||||||||||||||||||||||
-3 | ||||||||||||||||||||||||||||||
All share amounts for all periods reflect the 1-for-20 reverse stock split, which was effective August 10, 2012. See Note 11 to these consolidated financial statements for additional information on the reverse stock split. | ||||||||||||||||||||||||||||||
-4 | ||||||||||||||||||||||||||||||
Weighted-average common shares outstanding have been updated to reflect the impact of an error which had no material impact to EPS information, basic or diluted, for any period presented. | ||||||||||||||||||||||||||||||
-5 | ||||||||||||||||||||||||||||||
In addition to adjustments described within this footnote the correction of errors column contains reclassifications related to changes in presentation of components of other comprehensive income. | ||||||||||||||||||||||||||||||
Consolidated Statement of Comprehensive Income | ||||||||||||||||||||||||||||||
($ in millions, except share data) | As of and for the year ended December 31, 2010 | |||||||||||||||||||||||||||||
As previously | Correction | Adjusted | Retrospective | As restated | ||||||||||||||||||||||||||
reported | of errors (1) | prior to the | Adoption (2) | and amended | ||||||||||||||||||||||||||
retrospective | ||||||||||||||||||||||||||||||
adoption | ||||||||||||||||||||||||||||||
REVENUES: | ||||||||||||||||||||||||||||||
Premiums | $ | 521.4 | $ | -13.9 | $ | 507.5 | $ | — | $ | 507.5 | ||||||||||||||||||||
Fee income | 630.2 | 3.3 | 633.5 | — | 633.5 | |||||||||||||||||||||||||
Net investment income | 844.6 | -4.1 | 840.5 | — | 840.5 | |||||||||||||||||||||||||
Net realized investment gains (losses): | ||||||||||||||||||||||||||||||
Total OTTI losses | -105.2 | -2.1 | -107.3 | — | -107.3 | |||||||||||||||||||||||||
Portion of OTTI losses recognized in OCI | 55.6 | 3.1 | 58.7 | — | 58.7 | |||||||||||||||||||||||||
Net OTTI losses recognized in earnings | -49.6 | 1.0 | -48.6 | — | -48.6 | |||||||||||||||||||||||||
Net realized investment gains (losses), | 39.7 | -2.3 | 37.4 | — | 37.4 | |||||||||||||||||||||||||
excluding OTTI losses | ||||||||||||||||||||||||||||||
Net realized investment losses | -9.9 | -1.3 | -11.2 | — | -11.2 | |||||||||||||||||||||||||
Gain on debt repurchase | — | — | — | — | — | |||||||||||||||||||||||||
Total revenues | 1,986.3 | -16 | 1,970.3 | — | 1,970.3 | |||||||||||||||||||||||||
BENEFITS AND EXPENSES: | ||||||||||||||||||||||||||||||
Policy benefits, excluding policyholder dividends | 1,090.0 | 19.6 | 1,109.6 | 11.9 | 1,121.5 | |||||||||||||||||||||||||
Policyholder dividends | 309.8 | -8 | 301.8 | — | 301.8 | |||||||||||||||||||||||||
Policy acquisition cost amortization | 298.2 | 28.9 | 327.1 | -58.9 | 268.2 | |||||||||||||||||||||||||
Interest expense on indebtedness | 31.8 | — | 31.8 | — | 31.8 | |||||||||||||||||||||||||
Other operating expenses | 291.2 | -4.8 | 286.4 | 2.2 | 288.6 | |||||||||||||||||||||||||
Total benefits and expenses | 2,021.0 | 35.7 | 2,056.7 | -44.8 | 2,011.9 | |||||||||||||||||||||||||
Income (loss) from continuing operations | -34.7 | -51.7 | -86.4 | 44.8 | -41.6 | |||||||||||||||||||||||||
before income taxes | ||||||||||||||||||||||||||||||
Income tax expense (benefit) | -10.1 | -15.5 | -25.6 | 15.3 | -10.3 | |||||||||||||||||||||||||
Income (loss) from continuing operations | -24.6 | -36.2 | -60.8 | 29.5 | -31.3 | |||||||||||||||||||||||||
Income (loss) from discontinued operations, | 12.0 | -15.6 | -3.6 | — | -3.6 | |||||||||||||||||||||||||
net of income taxes | ||||||||||||||||||||||||||||||
Net income (loss) | -12.6 | -51.8 | -64.4 | 29.5 | -34.9 | |||||||||||||||||||||||||
Less: Net income (loss) attributable to | — | -0.5 | -0.5 | — | -0.5 | |||||||||||||||||||||||||
noncontrolling interests | ||||||||||||||||||||||||||||||
Net income (loss) attributable to | $ | -12.6 | $ | -51.3 | $ | -63.9 | $ | 29.5 | $ | -34.4 | ||||||||||||||||||||
The Phoenix Companies, Inc. | ||||||||||||||||||||||||||||||
(Continued from previous page) | Consolidated Statement of Comprehensive Income | |||||||||||||||||||||||||||||
($ in millions, except share data) | As of and for the year ended December 31, 2010 | |||||||||||||||||||||||||||||
As previously | Correction | Adjusted | Retrospective | As restated | ||||||||||||||||||||||||||
reported | of errors (1) | prior to the | Adoption (2) | and amended | ||||||||||||||||||||||||||
retrospective | ||||||||||||||||||||||||||||||
adoption | ||||||||||||||||||||||||||||||
COMPREHENSIVE INCOME (LOSS): | ||||||||||||||||||||||||||||||
Net income (loss) attributable to | $ | -12.6 | $ | -51.3 | $ | -63.9 | $ | 29.5 | $ | -34.4 | ||||||||||||||||||||
The Phoenix Companies, Inc. | ||||||||||||||||||||||||||||||
Net income (loss) attributable to | — | -0.5 | -0.5 | — | -0.5 | |||||||||||||||||||||||||
noncontrolling interests | ||||||||||||||||||||||||||||||
Net income (loss) | -12.6 | -51.8 | -64.4 | 29.5 | -34.9 | |||||||||||||||||||||||||
Other comprehensive income (loss) | ||||||||||||||||||||||||||||||
before income taxes: | ||||||||||||||||||||||||||||||
Net unrealized investment gains | 112.5 | 36.3 | 148.8 | 25.3 | 174.1 | |||||||||||||||||||||||||
before income taxes (5) | ||||||||||||||||||||||||||||||
Non-credit portion of OTTI losses | -35.4 | 10.5 | -24.9 | — | -24.9 | |||||||||||||||||||||||||
recognized in OCI before income taxes (5) | ||||||||||||||||||||||||||||||
Net pension liability adjustment | -9.3 | 1.4 | -7.9 | — | -7.9 | |||||||||||||||||||||||||
before income taxes | ||||||||||||||||||||||||||||||
Net unrealized other gains (losses) | — | — | — | — | — | |||||||||||||||||||||||||
before income taxes | ||||||||||||||||||||||||||||||
Net unrealized derivative instruments gains (losses) | 28.3 | -28.3 | — | — | — | |||||||||||||||||||||||||
before income taxes (5) | ||||||||||||||||||||||||||||||
Other comprehensive income (loss) | 96.1 | 19.9 | 116.0 | 25.3 | 141.3 | |||||||||||||||||||||||||
before income taxes | ||||||||||||||||||||||||||||||
Less: Income tax expense (benefit) related to: | ||||||||||||||||||||||||||||||
Net unrealized investment gains (losses (5) | 72.7 | 28.1 | 100.8 | -6.3 | 94.5 | |||||||||||||||||||||||||
Non-credit portion of OTTI losses | -12.4 | 4.9 | -7.5 | — | -7.5 | |||||||||||||||||||||||||
recognized in OCI (5) | ||||||||||||||||||||||||||||||
Net pension liability adjustment | — | — | — | — | — | |||||||||||||||||||||||||
Net unrealized other gains (losses) | — | — | — | — | — | |||||||||||||||||||||||||
Net unrealized derivative instruments gains (losses) | — | — | — | — | — | |||||||||||||||||||||||||
Total income tax expense (benefit) | 60.3 | 33.0 | 93.3 | -6.3 | 87.0 | |||||||||||||||||||||||||
Other comprehensive income | 35.8 | -13.1 | 22.7 | 31.6 | 54.3 | |||||||||||||||||||||||||
net of income taxes | ||||||||||||||||||||||||||||||
Comprehensive income (loss) | 23.2 | -64.9 | -41.7 | 61.1 | 19.4 | |||||||||||||||||||||||||
Less: Comprehensive income attributable to | — | -0.5 | -0.5 | — | -0.5 | |||||||||||||||||||||||||
noncontrolling interests, net of income taxes | ||||||||||||||||||||||||||||||
Comprehensive income (loss) attributable to | $ | 23.2 | $ | -64.4 | $ | -41.2 | $ | 61.1 | $ | 19.9 | ||||||||||||||||||||
The Phoenix Companies, Inc. | ||||||||||||||||||||||||||||||
(Continued from previous page) | Consolidated Statement of Comprehensive Income | |||||||||||||||||||||||||||||
($ in millions, except share data) | As of and for the year ended December 31, 2010 | |||||||||||||||||||||||||||||
As previously | Correction | Adjusted | Retrospective | As restated | ||||||||||||||||||||||||||
reported | of errors (1) | prior to the | Adoption (2) | and amended | ||||||||||||||||||||||||||
retrospective | ||||||||||||||||||||||||||||||
adoption | ||||||||||||||||||||||||||||||
EARNINGS (LOSS) PER SHARE: (3) | ||||||||||||||||||||||||||||||
Earnings (loss) from continuing operations – basic | $ | -4.23 | $ | -6.24 | NM | $ | 5.08 | $ | -5.39 | |||||||||||||||||||||
Earnings (loss) from continuing operations – diluted | $ | -4.23 | $ | -6.24 | NM | $ | 5.08 | $ | -5.39 | |||||||||||||||||||||
Earnings (loss) from discontinued operations – basic | $ | 2.06 | $ | -2.69 | NM | $ | — | $ | -0.62 | |||||||||||||||||||||
Earnings (loss) from discontinued operations – diluted | $ | 2.06 | $ | -2.69 | NM | $ | — | $ | -0.62 | |||||||||||||||||||||
Net earnings (loss) attributable to | $ | -2.17 | $ | -8.84 | NM | $ | 5.08 | $ | -5.93 | |||||||||||||||||||||
The Phoenix Companies, Inc. – basic | ||||||||||||||||||||||||||||||
Net earnings (loss) attributable to | $ | -2.17 | $ | -8.84 | NM | $ | 5.08 | $ | -5.93 | |||||||||||||||||||||
The Phoenix Companies, Inc. – diluted | ||||||||||||||||||||||||||||||
Basic weighted-average common shares outstanding | 5,817 | 5,803 | -4 | NM | 5,803 | 5,803 | ||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||||||
Diluted weighted-average common shares | 5,817 | 5,803 | -4 | NM | 5,803 | 5,803 | ||||||||||||||||||||||||
outstanding (in thousands) | ||||||||||||||||||||||||||||||
——————— | ||||||||||||||||||||||||||||||
-1 | ||||||||||||||||||||||||||||||
Adjustments related to the correction of errors reflect amounts prior to the retrospective adoption of amended guidance to ASC 944, Financial Services – Insurance (ASU 2010-26). See footnote 2 below for additional information regarding these amounts and the retrospective adoption. | ||||||||||||||||||||||||||||||
-2 | ||||||||||||||||||||||||||||||
Adjustments related to the retrospective adoption of amended guidance to ASC 944, Financial Services – Insurance (ASU 2010-26), have been updated from those originally disclosed in the First Quarter 2012 Quarterly Report on Form 10-Q filing to reflect the correction of errors identified related to the adoption of the amended guidance as well as indirect impact of the correction of errors associated with the restatement. | ||||||||||||||||||||||||||||||
-3 | ||||||||||||||||||||||||||||||
All share amounts for all periods reflect the 1-for-20 reverse stock split, which was effective August 10, 2012. See Note 11 to these consolidated financial statements for additional information on the reverse stock split. | ||||||||||||||||||||||||||||||
-4 | ||||||||||||||||||||||||||||||
Weighted-average common shares outstanding have been updated to reflect the impact of an error which had no material impact to EPS information, basic or diluted, for any period presented. | ||||||||||||||||||||||||||||||
-5 | ||||||||||||||||||||||||||||||
In addition to adjustments described within this footnote the correction of errors column contains reclassifications related to changes in presentation of components of other comprehensive income. | ||||||||||||||||||||||||||||||
Consolidated Statement of Cash Flows | ||||||||||||||||||||||||||||||
($ in millions) | As of and for the year ended December 31, 2011 | |||||||||||||||||||||||||||||
As previously | Correction | Adjusted | Retrospective | As restated | ||||||||||||||||||||||||||
reported | of errors (1) | prior to the | Adoption (2) | and amended | ||||||||||||||||||||||||||
retrospective | ||||||||||||||||||||||||||||||
adoption | ||||||||||||||||||||||||||||||
OPERATING ACTIVITIES: | ||||||||||||||||||||||||||||||
Net income (loss) | $ | 8.1 | $ | -61.2 | $ | -53.1 | $ | 22.4 | $ | -30.7 | ||||||||||||||||||||
Net realized investment gains | 16.4 | 13.5 | 29.9 | — | 29.9 | |||||||||||||||||||||||||
Gain on debt repurchase | — | -0.2 | -0.2 | — | -0.2 | |||||||||||||||||||||||||
Policy acquisition costs deferred | -141.1 | 48.5 | -92.6 | 1.4 | -91.2 | |||||||||||||||||||||||||
Amortization of deferred policy acquisition costs | 210.6 | -15.2 | 195.4 | -37.5 | 157.9 | |||||||||||||||||||||||||
Amortization and depreciation | 12.8 | — | 12.8 | — | 12.8 | |||||||||||||||||||||||||
Interest credited | — | 117.5 | 117.5 | — | 117.5 | |||||||||||||||||||||||||
Equity in earnings of | — | -45.3 | -45.3 | — | -45.3 | |||||||||||||||||||||||||
limited partnerships and other investments | ||||||||||||||||||||||||||||||
Change in: | ||||||||||||||||||||||||||||||
Accrued investment income | -50.8 | -90.5 | -141.3 | — | -141.3 | |||||||||||||||||||||||||
Deferred income taxes | 1.0 | -12.8 | -11.8 | 9.1 | -2.7 | |||||||||||||||||||||||||
Receivables | -7.3 | 7.2 | -0.1 | — | -0.1 | |||||||||||||||||||||||||
Policy liabilities and accruals | -203.3 | -206.3 | -409.6 | 4.6 | -405 | |||||||||||||||||||||||||
Dividend obligations | — | 7.3 | 7.3 | — | 7.3 | |||||||||||||||||||||||||
Impact of operating activities of | — | -4.2 | -4.2 | — | -4.2 | |||||||||||||||||||||||||
consolidated investment entities, net | ||||||||||||||||||||||||||||||
Other operating activities, net | -3.4 | -39.1 | -42.5 | — | -42.5 | |||||||||||||||||||||||||
Cash from (for) continuing operations | -157 | -280.8 | -437.8 | — | -437.8 | |||||||||||||||||||||||||
Discontinued operations, net | 18.6 | -18.6 | — | — | — | |||||||||||||||||||||||||
Cash used for operating activities | -138.4 | -299.4 | -437.8 | — | -437.8 | |||||||||||||||||||||||||
INVESTING ACTIVITIES: | ||||||||||||||||||||||||||||||
Purchases of: | ||||||||||||||||||||||||||||||
Available-for-sale debt securities | -3,189.00 | 140.8 | -3,048.20 | — | -3,048.20 | |||||||||||||||||||||||||
Available-for-sale equity securities | -6.4 | — | -6.4 | — | -6.4 | |||||||||||||||||||||||||
Derivative instruments | -53.9 | -16.6 | -70.5 | — | -70.5 | |||||||||||||||||||||||||
Fair value investments | — | -47.3 | -47.3 | — | -47.3 | |||||||||||||||||||||||||
Other investments | -106.5 | 105.1 | -1.4 | -1.4 | ||||||||||||||||||||||||||
Sales, repayments and maturities of: | ||||||||||||||||||||||||||||||
Available-for-sale debt securities | 2,444.6 | -115.4 | 2,329.2 | — | 2,329.2 | |||||||||||||||||||||||||
Available-for-sale equity securities | 10.2 | — | 10.2 | — | 10.2 | |||||||||||||||||||||||||
Derivative instruments | 57.2 | 29.9 | 87.1 | — | 87.1 | |||||||||||||||||||||||||
Fair value investments | 8.6 | 4.8 | 13.4 | — | 13.4 | |||||||||||||||||||||||||
Other investments | 144.6 | -122.3 | 22.3 | — | 22.3 | |||||||||||||||||||||||||
Contributions to limited partnerships | — | -99.4 | -99.4 | — | -99.4 | |||||||||||||||||||||||||
and limited liability corporations | ||||||||||||||||||||||||||||||
Distributions from limited partnerships | — | 120.5 | 120.5 | — | 120.5 | |||||||||||||||||||||||||
and limited liability corporations | ||||||||||||||||||||||||||||||
Policy loans, net | 7.2 | 121.1 | 128.3 | — | 128.3 | |||||||||||||||||||||||||
Impact of investing activities of | — | — | — | — | — | |||||||||||||||||||||||||
consolidated investment entities, net | ||||||||||||||||||||||||||||||
Other investing activities, net | — | -4.6 | -4.6 | — | -4.6 | |||||||||||||||||||||||||
Proceeds from sale of subsidiary | 1.0 | -1 | — | — | — | |||||||||||||||||||||||||
Premises and equipment additions | -4.4 | 4.4 | — | — | — | |||||||||||||||||||||||||
Discontinued operations, net | -18.6 | 18.6 | — | — | — | |||||||||||||||||||||||||
Cash provided by (used for) investing activities | -705.4 | 138.6 | -566.8 | — | -566.8 | |||||||||||||||||||||||||
(Continued from previous page) | Consolidated Statement of Cash Flows | |||||||||||||||||||||||||||||
($ in millions) | As of and for the year ended December 31, 2011 | |||||||||||||||||||||||||||||
As previously | Correction | Adjusted | Retrospective | As restated | ||||||||||||||||||||||||||
reported | of errors (1) | prior to the | Adoption (2) | and amended | ||||||||||||||||||||||||||
retrospective | ||||||||||||||||||||||||||||||
adoption | ||||||||||||||||||||||||||||||
FINANCING ACTIVITIES: | ||||||||||||||||||||||||||||||
Policyholder deposit fund deposits | 1,725.5 | 99.9 | 1,825.4 | — | 1,825.4 | |||||||||||||||||||||||||
Policyholder deposit fund withdrawals | -808.5 | -370.8 | -1,179.30 | — | -1,179.30 | |||||||||||||||||||||||||
Net transfers to/from separate accounts | — | 435.1 | 435.1 | — | 435.1 | |||||||||||||||||||||||||
Impact of financing activities of | — | 1.5 | 1.5 | — | 1.5 | |||||||||||||||||||||||||
consolidated investment entities, net | ||||||||||||||||||||||||||||||
Other financing activities, net | -0.8 | -4.1 | -4.9 | — | -4.9 | |||||||||||||||||||||||||
Cash provided by financing activities | 916.2 | 161.6 | 1,077.8 | — | 1,077.8 | |||||||||||||||||||||||||
Change in cash and cash equivalents | 72.4 | 0.8 | 73.2 | — | 73.2 | |||||||||||||||||||||||||
Change in cash included in | — | 1.3 | 1.3 | — | 1.3 | |||||||||||||||||||||||||
discontinued operations assets | ||||||||||||||||||||||||||||||
Cash and cash equivalents, beginning of period | 121.9 | -28.2 | 93.7 | — | 93.7 | |||||||||||||||||||||||||
Cash and cash equivalents, end of period | $ | 194.3 | $ | -26.1 | $ | 168.2 | $ | — | $ | 168.2 | ||||||||||||||||||||
Supplemental Disclosure of Cash Flow Information | ||||||||||||||||||||||||||||||
Income taxes paid | $ | -6.2 | $ | — | $ | -6.2 | $ | — | $ | -6.2 | ||||||||||||||||||||
Interest expense on indebtedness paid | $ | -34.9 | $ | 3.5 | $ | -31.4 | $ | — | $ | -31.4 | ||||||||||||||||||||
Non-Cash Transactions During the Year | ||||||||||||||||||||||||||||||
Investment exchanges | $ | — | $ | 97.8 | $ | 97.8 | $ | — | $ | 97.8 | ||||||||||||||||||||
——————— | ||||||||||||||||||||||||||||||
-1 | ||||||||||||||||||||||||||||||
Adjustments related to the correction of errors reflect amounts prior to the retrospective adoption of amended guidance to ASC 944, Financial Services – Insurance (ASU 2010-26). See footnote 2 below for additional information regarding these amounts and the retrospective adoption. | ||||||||||||||||||||||||||||||
-2 | ||||||||||||||||||||||||||||||
Adjustments related to the retrospective adoption of amended guidance to ASC 944, Financial Services – Insurance (ASU 2010-26), have been updated from those originally disclosed in the First Quarter 2012 Quarterly Report on Form 10-Q filing to reflect the correction of errors identified related to the adoption of the amended guidance as well as indirect impact of the correction of errors associated with the restatement. | ||||||||||||||||||||||||||||||
Consolidated Statement of Cash Flows | ||||||||||||||||||||||||||||||
($ in millions) | As of and for the year ended December 31, 2010 | |||||||||||||||||||||||||||||
As previously | Correction | Adjusted | Retrospective | As restated | ||||||||||||||||||||||||||
reported | of errors (1) | prior to the | Adoption (2) | and amended | ||||||||||||||||||||||||||
retrospective | ||||||||||||||||||||||||||||||
adoption | ||||||||||||||||||||||||||||||
OPERATING ACTIVITIES: | ||||||||||||||||||||||||||||||
Net income (loss) | $ | -12.6 | $ | -51.3 | $ | -63.9 | $ | 29.5 | $ | -34.4 | ||||||||||||||||||||
Net realized investment gains | 9.9 | 1.5 | 11.4 | — | 11.4 | |||||||||||||||||||||||||
Gain on debt repurchase | — | — | — | — | — | |||||||||||||||||||||||||
Policy acquisition costs deferred | -27 | 12.0 | -15 | 2.2 | -12.8 | |||||||||||||||||||||||||
Amortization of deferred policy acquisition costs | 298.2 | 28.9 | 327.1 | -58.9 | 268.2 | |||||||||||||||||||||||||
Amortization and depreciation | 11.3 | -0.3 | 11.0 | — | 11.0 | |||||||||||||||||||||||||
Interest credited | — | 123.8 | 123.8 | — | 123.8 | |||||||||||||||||||||||||
Equity in earnings of | — | -61.1 | -61.1 | — | -61.1 | |||||||||||||||||||||||||
limited partnerships and other investments | ||||||||||||||||||||||||||||||
Change in: | ||||||||||||||||||||||||||||||
Accrued investment income | -16.4 | -117.4 | -133.8 | — | -133.8 | |||||||||||||||||||||||||
Deferred income taxes | -12.8 | -17.9 | -30.7 | 15.4 | -15.3 | |||||||||||||||||||||||||
Receivables | -49.1 | 88.1 | 39.0 | — | 39.0 | |||||||||||||||||||||||||
Policy liabilities and accruals | -447.3 | -378.9 | -826.2 | 11.8 | -814.4 | |||||||||||||||||||||||||
Dividend obligations | — | -13.9 | -13.9 | — | -13.9 | |||||||||||||||||||||||||
Impact of operating activities of | — | -5.9 | -5.9 | — | -5.9 | |||||||||||||||||||||||||
consolidated investment entities, net | ||||||||||||||||||||||||||||||
Other operating activities, net | 9.8 | 3.9 | 13.7 | — | 13.7 | |||||||||||||||||||||||||
Cash from (for) continuing operations | -236 | -388.5 | -624.5 | — | -624.5 | |||||||||||||||||||||||||
Discontinued operations, net | -22 | 22.0 | — | — | — | |||||||||||||||||||||||||
Cash used for operating activities | -258 | -366.5 | -624.5 | — | -624.5 | |||||||||||||||||||||||||
INVESTING ACTIVITIES: | ||||||||||||||||||||||||||||||
Purchases of: | ||||||||||||||||||||||||||||||
Available-for-sale debt securities | -2,758.40 | 72.2 | -2,686.20 | — | -2,686.20 | |||||||||||||||||||||||||
Available-for-sale equity securities | -7.2 | 1.9 | -5.3 | — | -5.3 | |||||||||||||||||||||||||
Derivative instruments | -84.1 | 0.9 | -83.2 | — | -83.2 | |||||||||||||||||||||||||
Fair value investments | — | -8.5 | -8.5 | — | -8.5 | |||||||||||||||||||||||||
Other investments | -126.3 | 125.0 | -1.3 | — | -1.3 | |||||||||||||||||||||||||
Sales, repayments and maturities of: | ||||||||||||||||||||||||||||||
Available-for-sale debt securities | 2,762.8 | -61.6 | 2,701.2 | — | 2,701.2 | |||||||||||||||||||||||||
Available-for-sale equity securities | 0.6 | 0.1 | 0.7 | — | 0.7 | |||||||||||||||||||||||||
Derivative instruments | 47.1 | -15 | 32.1 | — | 32.1 | |||||||||||||||||||||||||
Fair value investments | 0.1 | 14.3 | 14.4 | — | 14.4 | |||||||||||||||||||||||||
Other investments | 143.1 | -105.3 | 37.8 | — | 37.8 | |||||||||||||||||||||||||
Contributions to limited partnerships | — | -90.2 | -90.2 | — | -90.2 | |||||||||||||||||||||||||
and limited liability corporations | ||||||||||||||||||||||||||||||
Distributions from limited partnerships | — | 132.0 | 132.0 | — | 132.0 | |||||||||||||||||||||||||
and limited liability corporations | ||||||||||||||||||||||||||||||
Policy loans, net | -62.1 | 124.8 | 62.7 | — | 62.7 | |||||||||||||||||||||||||
Impact of investing activities of | — | — | — | — | — | |||||||||||||||||||||||||
consolidated investment entities, net | ||||||||||||||||||||||||||||||
Other investing activities, net | — | 30.0 | 30.0 | — | 30.0 | |||||||||||||||||||||||||
Proceeds from sale of subsidiary | 32.9 | -32.9 | — | — | — | |||||||||||||||||||||||||
Premises and equipment additions | -5.9 | 5.9 | — | — | — | |||||||||||||||||||||||||
Discontinued operations, net | 13.1 | -13.1 | — | — | — | |||||||||||||||||||||||||
Cash provided by (used for) investing activities | -44.3 | 180.5 | 136.2 | — | 136.2 | |||||||||||||||||||||||||
(Continued from previous page) | Consolidated Statement of Cash Flows | |||||||||||||||||||||||||||||
($ in millions) | As of and for the year ended December 31, 2010 | |||||||||||||||||||||||||||||
As previously | Correction | Adjusted | Retrospective | As restated | ||||||||||||||||||||||||||
reported | of errors (1) | prior to the | Adoption (2) | and amended | ||||||||||||||||||||||||||
retrospective | ||||||||||||||||||||||||||||||
adoption | ||||||||||||||||||||||||||||||
FINANCING ACTIVITIES: | ||||||||||||||||||||||||||||||
Policyholder deposit fund deposits | 732.2 | 367.0 | 1,099.2 | — | 1,099.2 | |||||||||||||||||||||||||
Policyholder deposit fund withdrawals | -565 | -660.5 | -1,225.50 | — | -1,225.50 | |||||||||||||||||||||||||
Net transfers to/from separate accounts | — | 454.3 | 454.3 | — | 454.3 | |||||||||||||||||||||||||
Impact of financing activities of | — | 1.0 | 1.0 | — | 1.0 | |||||||||||||||||||||||||
consolidated investment entities, net | ||||||||||||||||||||||||||||||
Other financing activities, net | — | 0.3 | 0.3 | — | 0.3 | |||||||||||||||||||||||||
Indebtedness repayments | -0.2 | 0.2 | — | — | — | |||||||||||||||||||||||||
Noncontrolling interests | 0.5 | -0.5 | — | — | — | |||||||||||||||||||||||||
Discontinued operations, net | — | — | — | — | — | |||||||||||||||||||||||||
Cash provided by financing activities | 167.5 | 161.8 | 329.3 | — | 329.3 | |||||||||||||||||||||||||
Change in cash and cash equivalents | -134.8 | -24.2 | -159 | — | -159 | |||||||||||||||||||||||||
Change in cash included in | — | -3.1 | -3.1 | — | -3.1 | |||||||||||||||||||||||||
discontinued operations assets | ||||||||||||||||||||||||||||||
Cash and cash equivalents, beginning of period | 256.7 | -0.9 | 255.8 | — | 255.8 | |||||||||||||||||||||||||
Cash and cash equivalents, end of period | $ | 121.9 | $ | -28.2 | $ | 93.7 | $ | — | $ | 93.7 | ||||||||||||||||||||
Supplemental Disclosure of Cash Flow Information | ||||||||||||||||||||||||||||||
Income taxes paid | $ | -0.1 | $ | — | $ | -0.1 | $ | — | $ | -0.1 | ||||||||||||||||||||
Interest expense on indebtedness paid | $ | -34.9 | $ | 3.5 | $ | -31.4 | $ | — | $ | -31.4 | ||||||||||||||||||||
Non-Cash Transactions During the Year | ||||||||||||||||||||||||||||||
Investment exchanges | $ | — | $ | 70.5 | $ | 70.5 | $ | — | $ | 70.5 | ||||||||||||||||||||
——————— | ||||||||||||||||||||||||||||||
-1 | ||||||||||||||||||||||||||||||
Adjustments related to the correction of errors reflect amounts prior to the retrospective adoption of amended guidance to ASC 944, Financial Services – Insurance (ASU 2010-26). See footnote 2 below for additional information regarding these amounts and the retrospective adoption. | ||||||||||||||||||||||||||||||
-2 | ||||||||||||||||||||||||||||||
Adjustments related to the retrospective adoption of amended guidance to ASC 944, Financial Services – Insurance (ASU 2010-26), have been updated from those originally disclosed in the First Quarter 2012 Quarterly Report on Form 10-Q filing to reflect the correction of errors identified related to the adoption of the amended guidance as well as indirect impact of the correction of errors associated with the restatement. | ||||||||||||||||||||||||||||||
Consolidated Statement of Changes in Stockholders’ Equity | ||||||||||||||||||||||||||||||
($ in millions, except share data) | As of and for the year ended December 31, 2011 | |||||||||||||||||||||||||||||
As previously | Correction | Adjusted | Retrospective | As restated | ||||||||||||||||||||||||||
reported | of errors (1) | prior to the | Adoption (2) | and amended | ||||||||||||||||||||||||||
retrospective | ||||||||||||||||||||||||||||||
adoption | ||||||||||||||||||||||||||||||
COMMON STOCK: (3) | ||||||||||||||||||||||||||||||
Balance, beginning of period | $ | 1.3 | $ | — | $ | 1.3 | $ | — | $ | 1.3 | ||||||||||||||||||||
Adjustment for reverse stock split | — | — | — | — | — | |||||||||||||||||||||||||
Balance, end of period | $ | 1.3 | $ | — | $ | 1.3 | $ | — | $ | 1.3 | ||||||||||||||||||||
ADDITIONAL PAID-IN CAPITAL: | ||||||||||||||||||||||||||||||
Balance, beginning of period | $ | 2,631.0 | $ | — | $ | 2,631.0 | $ | — | $ | 2,631.0 | ||||||||||||||||||||
Issuance of shares and compensation expense | -0.5 | — | -0.5 | — | -0.5 | |||||||||||||||||||||||||
on stock compensation awards | ||||||||||||||||||||||||||||||
Adjustment for reverse stock split | — | — | — | — | — | |||||||||||||||||||||||||
Balance, end of period | $ | 2,630.5 | $ | — | $ | 2,630.5 | $ | — | $ | 2,630.5 | ||||||||||||||||||||
ACCUMULATED OTHER COMPREHENSIVE | ||||||||||||||||||||||||||||||
LOSS: | ||||||||||||||||||||||||||||||
Balance, beginning of period | $ | -133.8 | $ | -50.7 | $ | -184.5 | $ | 28.3 | $ | -156.2 | ||||||||||||||||||||
Adjustment for initial application of | — | — | — | — | — | |||||||||||||||||||||||||
accounting changes | ||||||||||||||||||||||||||||||
Other comprehensive income (loss) | -36.9 | -52.8 | -89.7 | 15.2 | -74.5 | |||||||||||||||||||||||||
Balance, end of period | $ | -170.7 | $ | -103.5 | $ | -274.2 | $ | 43.5 | $ | -230.7 | ||||||||||||||||||||
ACCUMULATED DEFICIT: | ||||||||||||||||||||||||||||||
Balance, beginning of period | $ | -1,163.50 | $ | -102.1 | $ | -1,265.60 | $ | -232.4 | $ | -1,498.00 | ||||||||||||||||||||
Adjustment for initial application of | — | — | — | — | — | |||||||||||||||||||||||||
accounting changes | ||||||||||||||||||||||||||||||
Net income (loss) | 8.1 | -61.2 | -53.1 | 22.4 | -30.7 | |||||||||||||||||||||||||
Balance, end of period | $ | -1,155.40 | $ | -163.3 | $ | -1,318.70 | $ | -210 | $ | -1,528.70 | ||||||||||||||||||||
TREASURY STOCK, AT COST: (3) | ||||||||||||||||||||||||||||||
Balance, beginning of period | $ | -179.5 | $ | — | $ | -179.5 | $ | — | $ | -179.5 | ||||||||||||||||||||
Treasury shares purchased | — | — | — | — | — | |||||||||||||||||||||||||
Balance, end of period | $ | -179.5 | $ | — | $ | -179.5 | $ | — | $ | -179.5 | ||||||||||||||||||||
TOTAL STOCKHOLDERS’ EQUITY | ||||||||||||||||||||||||||||||
ATTRIBUTABLE TO | ||||||||||||||||||||||||||||||
THE PHOENIX COMPANIES, INC.: | ||||||||||||||||||||||||||||||
Balance, beginning of period | $ | 1,155.5 | $ | -152.8 | $ | 1,002.7 | $ | -204.1 | $ | 798.6 | ||||||||||||||||||||
Adjustment for initial application of | —— | —— | — | — | —— | |||||||||||||||||||||||||
accounting changes | ||||||||||||||||||||||||||||||
Change in stockholders’ equity attributable to | -29.3 | -114 | -143.3 | 37.6 | -105.7 | |||||||||||||||||||||||||
The Phoenix Companies, Inc. | ||||||||||||||||||||||||||||||
Stockholders’ equity, end of period | $ | 1,126.2 | $ | -266.8 | $ | 859.4 | $ | -166.5 | $ | 692.9 | ||||||||||||||||||||
NONCONTROLLING INTERESTS: | ||||||||||||||||||||||||||||||
Balance, beginning of period | $ | — | $ | 1.8 | $ | 1.8 | — | $ | 1.8 | |||||||||||||||||||||
Net income attributable to | — | -0.5 | -0.5 | — | -0.5 | |||||||||||||||||||||||||
noncontrolling interests | ||||||||||||||||||||||||||||||
Contributions to noncontrolling interests | — | 1.5 | 1.5 | — | 1.5 | |||||||||||||||||||||||||
Distributions from noncontrolling interests | — | — | — | — | — | |||||||||||||||||||||||||
Issuance of Saybrus shares to | — | — | — | — | — | |||||||||||||||||||||||||
noncontrolling interests | ||||||||||||||||||||||||||||||
Balance, end of period | $ | — | $ | 2.8 | $ | 2.8 | $ | — | $ | 2.8 | ||||||||||||||||||||
(Continued from previous page) | Consolidated Statement of Changes in Stockholders’ Equity | |||||||||||||||||||||||||||||
($ in millions, except share data) | As of and for the year ended December 31, 2011 | |||||||||||||||||||||||||||||
As previously | Correction | Adjusted | Retrospective | As restated | ||||||||||||||||||||||||||
reported | of errors (1) | prior to the | Adoption (2) | and amended | ||||||||||||||||||||||||||
retrospective | ||||||||||||||||||||||||||||||
adoption | ||||||||||||||||||||||||||||||
TOTAL STOCKHOLDERS’ EQUITY: | ||||||||||||||||||||||||||||||
Balance, beginning of period | $ | 1,155.5 | $ | -151 | $ | 1,004.5 | $ | -204.1 | $ | 800.4 | ||||||||||||||||||||
Adjustment for initial application of | —— | —— | — | — | —— | |||||||||||||||||||||||||
accounting changes | ||||||||||||||||||||||||||||||
Change in stockholders’ equity | -29.3 | -113 | -142.3 | 37.6 | -104.7 | |||||||||||||||||||||||||
Stockholders’ equity, end of period | $ | 1,126.2 | $ | -264 | $ | 862.2 | $ | -166.5 | $ | 695.7 | ||||||||||||||||||||
——————— | ||||||||||||||||||||||||||||||
-1 | ||||||||||||||||||||||||||||||
Adjustments related to the correction of errors reflect amounts prior to the retrospective adoption of amended guidance to ASC 944, Financial Services – Insurance (ASU 2010-26). See footnote 2 below for additional information regarding these amounts and the retrospective adoption. | ||||||||||||||||||||||||||||||
-2 | ||||||||||||||||||||||||||||||
Adjustments related to the retrospective adoption of amended guidance to ASC 944, Financial Services – Insurance (ASU 2010-26), have been updated from those originally disclosed in the First Quarter 2012 Quarterly Report on Form 10-Q filing to reflect the correction of errors identified related to the adoption of the amended guidance as well as indirect impact of the correction of errors associated with the restatement. | ||||||||||||||||||||||||||||||
-3 | ||||||||||||||||||||||||||||||
Reflects the 1-for-20 reverse stock split, which was effective August 10, 2012. See Note 11 to these consolidated financial statements for additional information on the reverse stock split. | ||||||||||||||||||||||||||||||
Consolidated Statement of Changes in Stockholders’ Equity | ||||||||||||||||||||||||||||||
($ in millions, except share data) | As of and for the year ended December 31, 2010 | |||||||||||||||||||||||||||||
As previously | Correction | Adjusted | Retrospective | As restated | ||||||||||||||||||||||||||
reported | of errors (1) | prior to the | Adoption (2) | and amended | ||||||||||||||||||||||||||
retrospective | ||||||||||||||||||||||||||||||
adoption | ||||||||||||||||||||||||||||||
COMMON STOCK:(3) | ||||||||||||||||||||||||||||||
Balance, beginning of period | $ | 1.3 | $ | — | $ | 1.3 | $ | — | $ | 1.3 | ||||||||||||||||||||
Adjustment for reverse stock split | — | — | — | — | — | |||||||||||||||||||||||||
Balance, end of period | $ | 1.3 | $ | — | $ | 1.3 | $ | — | $ | 1.3 | ||||||||||||||||||||
ADDITIONAL PAID-IN CAPITAL: | ||||||||||||||||||||||||||||||
Balance, beginning of period | $ | 2,627.3 | $ | — | $ | 2,627.3 | $ | — | $ | 2,627.3 | ||||||||||||||||||||
Issuance of shares and compensation expense | 3.7 | — | 3.7 | — | 3.7 | |||||||||||||||||||||||||
on stock compensation awards | ||||||||||||||||||||||||||||||
Adjustment for reverse stock split | — | — | — | — | — | |||||||||||||||||||||||||
Balance, end of period | $ | 2,631.0 | $ | — | $ | 2,631.0 | $ | — | $ | 2,631.0 | ||||||||||||||||||||
ACCUMULATED OTHER COMPREHENSIVE | ||||||||||||||||||||||||||||||
INCOME (LOSS): | ||||||||||||||||||||||||||||||
Balance, beginning of period | $ | -171.3 | $ | -37 | $ | -208.3 | $ | -3.3 | $ | -211.6 | ||||||||||||||||||||
Adjustment for initial application of | 1.7 | -0.6 | 1.1 | — | 1.1 | |||||||||||||||||||||||||
accounting changes | ||||||||||||||||||||||||||||||
Other comprehensive income (loss) | 35.8 | -13.1 | 22.7 | 31.6 | 54.3 | |||||||||||||||||||||||||
Balance, end of period | $ | -133.8 | $ | -50.7 | $ | -184.5 | $ | 28.3 | $ | -156.2 | ||||||||||||||||||||
ACCUMULATED DEFICIT: | ||||||||||||||||||||||||||||||
Balance, beginning of period | $ | -1,146.70 | $ | -48.2 | $ | -1,194.90 | $ | -261.9 | $ | -1,456.80 | ||||||||||||||||||||
Adjustment for initial application of | -4.2 | -2.6 | -6.8 | — | -6.8 | |||||||||||||||||||||||||
accounting changes | ||||||||||||||||||||||||||||||
Net loss | -12.6 | -51.3 | -63.9 | 29.5 | -34.4 | |||||||||||||||||||||||||
Balance, end of period | $ | -1,163.50 | $ | -102.1 | $ | -1,265.60 | $ | -232.4 | $ | -1,498.00 | ||||||||||||||||||||
TREASURY STOCK, AT COST:(3) | ||||||||||||||||||||||||||||||
Balance, beginning of period | $ | -179.5 | $ | — | $ | -179.5 | $ | — | $ | -179.5 | ||||||||||||||||||||
Treasury shares purchased | — | — | — | — | — | |||||||||||||||||||||||||
Balance, end of period | $ | -179.5 | $ | — | $ | -179.5 | $ | — | $ | -179.5 | ||||||||||||||||||||
TOTAL STOCKHOLDERS’ EQUITY | ||||||||||||||||||||||||||||||
ATTRIBUTABLE TO | ||||||||||||||||||||||||||||||
THE PHOENIX COMPANIES, INC.: | ||||||||||||||||||||||||||||||
Balance, beginning of period | $ | 1,131.1 | $ | -85.2 | $ | 1,045.9 | $ | -265.2 | $ | 780.7 | ||||||||||||||||||||
Adjustment for initial application of | ((2.5) | —(3.2) | ((5.7) | —— | ((5.7) | |||||||||||||||||||||||||
accounting changes | ||||||||||||||||||||||||||||||
Change in stockholders’ equity attributable to | 26.9 | -64.4 | -37.5 | 61.1 | 23.6 | |||||||||||||||||||||||||
The Phoenix Companies, Inc. | ||||||||||||||||||||||||||||||
Stockholders’ equity, end of period | $ | 1,155.5 | $ | -152.8 | $ | 1,002.7 | $ | -204.1 | $ | 798.6 | ||||||||||||||||||||
NONCONTROLLING INTERESTS: | ||||||||||||||||||||||||||||||
Balance, beginning of period | $ | — | $ | 1.7 | $ | 1.7 | — | $ | 1.7 | |||||||||||||||||||||
Net income attributable to | — | -0.5 | -0.5 | — | -0.5 | |||||||||||||||||||||||||
noncontrolling interests | ||||||||||||||||||||||||||||||
Contributions to noncontrolling interests | — | — | — | — | — | |||||||||||||||||||||||||
Distributions from noncontrolling interests | — | — | — | — | — | |||||||||||||||||||||||||
Issuance of Saybrus shares to | — | 0.6 | 0.6 | — | 0.6 | |||||||||||||||||||||||||
noncontrolling interests | ||||||||||||||||||||||||||||||
Balance, end of period | $ | — | $ | 1.8 | $ | 1.8 | $ | — | $ | 1.8 | ||||||||||||||||||||
(Continued from previous page) | Consolidated Statement of Changes in Stockholders’ Equity | |||||||||||||||||||||||||||||
($ in millions, except share data) | As of and for the year ended December 31, 2010 | |||||||||||||||||||||||||||||
As previously | Correction | Adjusted | Retrospective | As restated | ||||||||||||||||||||||||||
reported | of errors (1) | prior to the | Adoption (2) | and amended | ||||||||||||||||||||||||||
retrospective | ||||||||||||||||||||||||||||||
adoption | ||||||||||||||||||||||||||||||
TOTAL STOCKHOLDERS’ EQUITY: | ||||||||||||||||||||||||||||||
Balance, beginning of period | $ | 1,131.1 | $ | -83.5 | $ | 1,047.6 | $ | -265.2 | $ | 782.4 | ||||||||||||||||||||
Adjustment for initial application of | ((2.5) | —(3.2) | ((5.7) | —— | -5.7 | |||||||||||||||||||||||||
accounting changes | ||||||||||||||||||||||||||||||
Change in stockholders’ equity | 26.9 | -64.3 | -37.4 | 61.1 | 23.7 | |||||||||||||||||||||||||
Stockholders’ equity, end of period | $ | 1,155.5 | $ | -151 | $ | 1,004.5 | $ | -204.1 | $ | 800.4 | ||||||||||||||||||||
——————— | ||||||||||||||||||||||||||||||
-1 | ||||||||||||||||||||||||||||||
Adjustments related to the correction of errors reflect amounts prior to the retrospective adoption of amended guidance to ASC 944, Financial Services – Insurance (ASU 2010-26). See footnote 2 below for additional information regarding these amounts and the retrospective adoption. | ||||||||||||||||||||||||||||||
-2 | ||||||||||||||||||||||||||||||
Adjustments related to the retrospective adoption of amended guidance to ASC 944, Financial Services – Insurance (ASU 2010-26), have been updated from those originally disclosed in the First Quarter 2012 Quarterly Report on Form 10-Q filing to reflect the correction of errors identified related to the adoption of the amended guidance as well as indirect impact of the correction of errors associated with the restatement. | ||||||||||||||||||||||||||||||
-3 | ||||||||||||||||||||||||||||||
Reflects the 1-for-20 reverse stock split, which was effective August 10, 2012. See Note 11 to these consolidated financial statements for additional information on the reverse stock split. | ||||||||||||||||||||||||||||||
3_Basis_of_Presentation_and_Si
3. Basis of Presentation and Significant Accounting Policies | 12 Months Ended | ||||
Dec. 31, 2012 | |||||
Accounting Policies [Abstract] | ' | ||||
3. Basis of Presentation and Significant Accounting Policies | ' | ||||
We have prepared these financial statements in accordance with U.S. GAAP which differ materially from the accounting practices prescribed by various insurance regulatory authorities. Our consolidated financial statements include the accounts of the Company and its various subsidiaries. Intercompany balances and transactions have been eliminated in consolidating these financial statements. As of December 31, 2011, the Company changed from the direct to the indirect method of reporting its consolidated cash flow statement. Certain prior year amounts have been reclassified to conform to the current year presentation, primarily as a result of (i) the adoption of new accounting standards as described more fully below and (ii) the 1-for-20 reverse stock split described more fully in Note 11. | |||||
Use of estimates | |||||
In preparing these financial statements in conformity with U.S. GAAP, we are required to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Significant estimates and assumptions are made in the determination of EGPs and estimated gross margins (“EGMs”) used in the valuation and amortization of assets and liabilities associated with universal life and annuity contracts; policyholder liabilities and accruals; valuation of investments in debt and equity securities; limited partnerships and other investments; valuation of deferred tax assets; pension and other post-employment benefits liabilities; and accruals for contingent liabilities. Actual results could differ from these estimates. | |||||
Adoption of new accounting standards | |||||
Amendments to the Presentation of Comprehensive Income | |||||
In June 2011, the Financial Accounting Standards Board (the “FASB”) issued amended guidance to ASC 220, Comprehensive Income, with respect to the presentation of comprehensive income as part of the effort to establish common requirements between U.S. GAAP and International Financial Reporting Standards (“IFRS”). This amended guidance requires entities to present all non-owner changes in stockholders’ equity either in a single continuous statement of comprehensive income or in two separate but consecutive statements. The amendments do not affect which components of comprehensive income are recognized in net income or comprehensive income, or when an item of other comprehensive income must be classified to net income. The computation and presentation of earnings per share also does not change. This guidance was adopted in the first quarter of 2012. Other than the required changes in presentation and the additional disclosures, adoption of this guidance did not have a material effect on our consolidated financial statements. | |||||
Amendments to Fair Value Measurement and Disclosure Requirements | |||||
In May 2011, the FASB issued amended guidance to ASC 820, Fair Value Measurement, with respect to measuring fair value and related disclosures as part of the effort to establish common requirements in accordance with U.S. GAAP and IFRS. The amended guidance clarifies that the concept of highest and best use should only be used in the valuation of non-financial assets, specifies how to apply fair value measurements to instruments classified in stockholders’ equity and requires that premiums or discounts be applied consistent with what market participants would use absent Level 1 inputs. The amendment also explicitly requires additional disclosures related to the valuation of assets categorized as Level 3 within the fair value hierarchy. Additional disclosures include quantitative information about unobservable inputs, the sensitivity of fair value measurement to changes in unobservable outputs and information on the valuation process used. This guidance was adopted in the first quarter of 2012. Disclosures in Note 14 reflect the prospective adoption of this guidance. Other than additional disclosures, adoption of this guidance did not have a material effect on our consolidated financial statements. | |||||
Revision for the Retrospective Adoption of Amended Accounting Guidance | |||||
In October 2010, the FASB issued amended guidance to ASC 944, Financial Services – Insurance, to address the diversity in practice for accounting for costs associated with acquiring or renewing insurance contracts. The amendment clarifies the definition of acquisition costs (i.e., costs which qualify for deferral) to include only incremental direct costs that result directly from, and are essential to, a contract and would not have been incurred by the insurance entity had the contract transaction not occurred. Therefore, only costs related to successful efforts of acquiring a new, or renewal, contract should be deferred. This guidance was retrospectively adopted on January 1, 2012 and such retrospective adoption results in amendments to previously reported balances as shown in Note 2 as if the guidance was applied at the inception of all policies in force. The cumulative effect of retrospective adoption reduced deferred policy acquisition costs and beginning stockholders’ equity by $166.5 million as of January 1, 2012. In any period, the adoption resulted in a decrease in amortization of policy acquisition costs due to the reduced deferred policy acquisition cost asset. | |||||
Accounting standards not yet adopted | |||||
Reporting Amounts Reclassified Out of Accumulated Other Comprehensive Income | |||||
In February 2013, the FASB issued updated guidance regarding the presentation of comprehensive income (ASU 2013-02). Under the guidance, an entity would separately present information about significant items reclassified out of accumulated other comprehensive income by component as well as changes in accumulated other comprehensive income balances by component in either the financial statements or the notes to the financial statements. The guidance does not change the items that are reported in other comprehensive income. The guidance does not change when an item of other comprehensive income must be reclassified to net income and does not amend any existing requirements for reporting net income or other comprehensive income. The guidance is effective for the first interim or annual reporting period beginning after December 15, 2012 and should be applied prospectively. This guidance is not expected to impact the Company’s consolidated statements of financial position or cash flows. The Company is currently assessing the impact of this guidance on the Company’s consolidated statements of operations and equity and the notes to consolidated financial statements. | |||||
Disclosures about Offsetting Assets and Liabilities | |||||
In December 2011, the FASB issued amended guidance to ASC 210, Balance Sheet, with respect to disclosure of offsetting assets and liabilities as part of the effort to establish common requirements in accordance with U.S. GAAP and IFRS. This amended guidance requires the disclosure of both gross information and net information about both financial instruments and derivative instruments eligible for offset in our consolidated balance sheets and instruments and transactions subject to an agreement similar to a master netting arrangement. This guidance is effective for periods beginning on or after January 1, 2013, with respective disclosures required retrospectively for all comparative periods presented. The adoption of this guidance effective January 1, 2013 is not expected to have a material effect on our consolidated financial statements. | |||||
Significant accounting policies | |||||
Investments | |||||
Debt and Equity Securities | |||||
Our debt and equity securities classified as available-for-sale are reported on our consolidated balance sheets at fair value. Fair value is based on quoted market price, where available. When quoted market prices are not available, we estimate fair value by discounting debt security cash flows to reflect interest rates currently being offered on similar terms to borrowers of similar credit quality (private placement debt securities), by quoted market prices of comparable instruments (untraded public debt securities) and by independent pricing sources or internally developed pricing models. We recognize unrealized gains and losses on investments in debt and equity securities that we classify as available-for-sale. We report these unrealized investment gains and losses as a component of OCI, net of the relevant policyholder obligations, applicable deferred policy acquisition costs and applicable deferred income taxes. Realized investment gains and losses are recognized on a first in first out basis. | |||||
Limited Partnerships and Other Investments | |||||
Limited partnerships, infrastructure funds, hedge funds and joint venture interests in which we do not have voting control or power to direct activities are recorded using the equity method of accounting. These investments include private equity, mezzanine funds, infrastructure funds, hedge funds of funds and direct equity investments. The equity method of accounting requires that the investment be initially recorded at cost and the carrying amount of the investment subsequently adjusted to recognize our share of the earnings or losses. We record our equity in the earnings in net investment income using the most recent financial information received from the partnerships. Recognition of net investment income is generally on a three-month delay due to the timing of the related financial statements. The contributions to and distributions from limited partnerships are classified as investing activities within the statement of cash flows. | |||||
Other investments also include leveraged lease investments which represent the net amount of the estimated residual value of the lease assets, rental receivables and unearned and deferred income to be allocated over the lease term. It further includes investments in life settlement contracts accounted for under the investment method under which the Company recognizes its initial investment in life settlement contracts at the transaction price plus all initial direct external costs. Continuing costs to keep the policy in force comprising mainly life insurance premiums, increase the carrying value of the investment while income on individual life settlement contracts are recognized when the insured dies, at an amount equal to the excess of the contract proceeds over the carrying amount of the contract at that time. Contracts are reviewed each quarter for indications that the expected future proceeds from the contract would not be sufficient to recover estimated future carrying amount of the contract (current carrying amount for the contract plus anticipated undiscounted future premiums and other capitalizable future costs.) Any such contracts identified are written down to estimated fair value. | |||||
The Company routinely evaluates these investments for impairments. For equity method investees, the Company considers financial and other information provided by the investee, other known information and inherent risks in the underlying investments, as well as future capital commitments, in determining whether an impairment has occurred. The Company considers its cost method investments for other-than-temporary impairments (“OTTI”) when the carrying value of such investments exceeds the net asset value (“NAV”). The Company takes into consideration the severity and duration of this excess when determining whether the cost method investment is other-than-temporarily impaired. When an OTTI has occurred, the impairment loss is recorded within net investment gains (losses). | |||||
Loans are occasionally restructured in a troubled debt restructuring. These restructurings generally include one or more of the following: full or partial payoffs outside of the original contract terms; changes to interest rates; extensions of maturity; or additions or modifications to covenants. When restructurings occur, they are evaluated individually to determine whether the restructuring or modification constitutes a “troubled debt restructuring” as defined by authoritative accounting guidance. In a troubled debt restructuring where the Company receives assets in full or partial satisfaction of the debt, any specific valuation allowance is reversed and a direct write down of the loan is recorded for the amount of the allowance and any additional loss, net of recoveries, or any gain is recorded for the difference between the fair value of the assets received and the recorded investment in the loan. Any remaining loan is evaluated prospectively for impairment based on the credit review process noted above. When a loan is restructured in a troubled debt restructuring, the impairment of the loan is remeasured using the modified terms and the loan’s original effective yield and the allowance for loss is adjusted accordingly. Subsequent to the modification, income is recognized prospectively based on the modified terms of the loans in accordance with the income recognition policy noted above. | |||||
The consolidated financial statements include investments in limited partnerships qualifying as variable interest entities (“VIEs”) which the Company is required to consolidate. For certain VIE interests the entity is considered the primary beneficiary, since the Company has both the power to direct the activities of a VIE that most significantly impact the entity’s economic performance and the obligation to absorb losses, or right to receive benefits, that could potentially be significant to the VIE. These VIEs are consolidated. | |||||
See Note 9 to these financial statements for additional information regarding VIEs. | |||||
Policy Loans | |||||
Policy loans are carried at their unpaid principal balances and are collateralized by the cash values of the related policies. The majority of cash values eligible for policy loans are at variable interest rates that are reset annually on the policy anniversary. | |||||
Fair Value Instruments | |||||
Debt securities held at fair value include fixed-maturity securities held for which changes in fair values are recorded in earnings. The securities held at fair value are designated as trading securities, as well as those debt securities for which we have elected the fair value option (“FVO”) and certain available-for-sale structured securities held at fair value. The changes in fair value and any interest income of these securities are reflected in earnings as part of “net investment income.” Refer to “Note 14: Fair Value of Financial Instruments” to these consolidated financial statements for additional disclosures related to these securities. | |||||
Derivative Instruments | |||||
We recognize derivative instruments on the consolidated balance sheets at fair value. The derivative contracts are reported as assets in derivative instruments or liabilities in other liabilities on the consolidated balance sheets, excluding embedded derivatives. Embedded derivatives, as discussed below, are recorded on the consolidated balance sheets bifurcated from the associated host contract. | |||||
The Company economically hedges variability of cash flows to be received or paid related to certain recognized assets and/or liabilities. All changes in the fair value of derivatives, including net receipts and payments, are included in net realized investment gains and losses without consideration of changes in the fair value of the economically associated assets or liabilities. We do not designate the purchased derivatives related to living benefits or index credits as hedges for accounting purposes. | |||||
For derivatives that do not qualify for hedge accounting, all changes in its fair value, including net receipts and payments, are included in net realized investment gains and losses without consideration of changes in the fair value of the economically associated assets or liabilities. Our derivatives do not qualify for hedge accounting. | |||||
Net investment income | |||||
For asset-backed and fixed maturity debt securities, we recognize interest income using a constant effective yield based on estimated cash flow timing and economic lives of the securities. For high credit quality asset-backed securities, effective yields are recalculated based on actual payments received and updated prepayment expectations, and the amortized cost is adjusted to the amount that would have existed had the new effective yield been applied since acquisition with a corresponding charge or credit to net investment income. For asset-backed securities that are not high credit quality, effective yields are recalculated and adjusted prospectively based on changes in expected undiscounted future cash flows. For certain credit impaired asset-backed securities, effective yields are recalculated and adjusted prospectively to reflect significant increases in undiscounted expected future cash flows and changes in the contractual benchmark interest rate on variable rate securities. Any prepayment fees on fixed maturities and mortgage loans are recorded when earned in net investment income. We record the net income from investments in partnerships and joint ventures in net investment income. | |||||
Other-than-temporary impairments on available-for-sale securities | |||||
We recognize realized investment losses when declines in fair value of debt and equity securities are considered to be an OTTI. | |||||
For debt securities, the other-than-temporarily impaired amount is separated into the amount related to a credit loss and is reported as net realized investment losses included in earnings and any amounts related to other factors are recognized in OCI. The credit loss component represents the difference between the amortized cost of the security and the net present value of its projected future cash flows discounted at the effective interest rate implicit in the debt security prior to impairment. Any remaining difference between the fair value and amortized cost is recognized in AOCI. Subsequent to the recognition of an OTTI, the impaired security is accounted for as if it had been purchased on the date of impairment at an amortized cost basis equal to the previous amortized cost basis less the OTTI recognized in earnings. We will continue to estimate the present value of future expected cash flows and, if significantly greater than the new cost basis, we will accrete the difference as investment income on a prospective basis once the Company has determined that the interest income is likely to be collected. | |||||
In evaluating whether a decline in value is other-than-temporary, we consider several factors including, but not limited to, the following: | |||||
· | |||||
the extent and the duration of the decline; | |||||
· | |||||
the reasons for the decline in value (credit event, interest related or market fluctuations); | |||||
· | |||||
our intent to sell the security, or whether it is more likely than not that we will be required to sell it before recovery; and | |||||
· | |||||
the financial condition and near term prospects of the issuer. | |||||
A debt security impairment is deemed other-than-temporary if: | |||||
we either intend to sell the security, or it is more likely than not that we will be required to sell the security before recovery; or | |||||
· | |||||
it is probable we will be unable to collect cash flows sufficient to recover the amortized cost basis of the security. | |||||
An equity security impairment is deemed other-than-temporary if: | |||||
· | |||||
the security has traded at a significant discount to cost for an extended period of time; or | |||||
· | |||||
we determined we may not realize the full recovery on our investment. | |||||
Equity securities are determined to be other-than-temporarily impaired based on management judgment and the consideration of the issuer’s financial condition along with other relevant facts and circumstances. Those securities which have been in a continuous decline for over a twelve month periods are generally considered impaired. Additionally, declines in value that are severe and rapid are considered for reasonability of whether the impairment would be temporary. | |||||
Impairments due to deterioration in credit that result in a conclusion that the present value of cash flows expected to be collected will not be sufficient to recover the amortized cost basis of the security are considered other-than-temporary. Other declines in fair value (for example, due to interest rate changes, sector credit rating changes or company-specific rating changes) that result in a conclusion that the present value of cash flows expected to be collected will not be sufficient to recover the amortized cost basis of the security may also result in a conclusion that an OTTI has occurred. | |||||
On a quarterly basis, we evaluate securities in an unrealized loss position for potential recognition of an OTTI. In addition, we maintain a watch list of securities in default, near default or otherwise considered by our investment professionals as being distressed, potentially distressed or requiring a heightened level of scrutiny. We also identify securities whose fair value has been below amortized cost on a continuous basis for zero to six months, six months to 12 months and greater than 12 months. | |||||
We employ a comprehensive process to determine whether or not a security in an unrealized loss position is other-than-temporarily impaired. This assessment is done on a security-by-security basis and involves significant management judgment. The assessment of whether impairments have occurred is based on management’s evaluation of the underlying reasons for the decline in estimated fair value. The Company’s review of its fixed maturity and equity securities for impairments includes an analysis of the total gross unrealized losses by severity and/or age of the gross unrealized loss. An extended and severe unrealized loss position on a fixed maturity security may not have any impact on the ability of the issuer to service all scheduled interest and principal payments and the Company’s evaluation of recoverability of all contractual cash flows or the ability to recover an amount at least equal to its amortized cost based on the present value of the expected future cash flows to be collected. In contrast, for certain equity securities, greater weight and consideration are given by the Company to a decline in market value and the likelihood such market value decline will recover. | |||||
Specifically for structured securities, to determine whether a collateralized security is impaired, we obtain underlying data from the security’s trustee and analyze it for performance trends. A security-specific stress analysis is performed using the most recent trustee information. This analysis forms the basis for our determination of whether the security will pay in accordance with the contractual cash flows. | |||||
The closed block policyholder dividend obligation, applicable deferred policy acquisition costs and applicable income taxes, which offset realized investment gains and losses and OTTIs, are each reported separately as components of net income. | |||||
Cash and cash equivalents | |||||
Cash and cash equivalents include cash on hand, amounts due from banks, money market instruments and other debt instruments with original maturities of three months or less. Negative cash balances are reclassified to other liabilities. | |||||
Deferred policy acquisition costs | |||||
We defer incremental direct costs related to the successful sale of new or renewal contracts. Incremental direct costs are those costs that result directly from and are essential to the sale of a contract. These costs include principally commissions, underwriting and policy issue expenses, all of which vary with and are primarily related to production of new business. | |||||
We amortize deferred policy acquisition costs based on the related policy’s classification. For individual participating life insurance policies, deferred policy acquisition costs are amortized in proportion to EGMs arising principally from investment results, mortality, dividends to policyholders and expense margins. For universal life, variable universal life and deferred annuities, deferred policy acquisition costs are amortized in proportion to EGPs as discussed more fully below. EGPs are also used to amortize other assets and liabilities in the Company’s consolidated balance sheets, such as sales inducement assets (“SIA”) and unearned revenue reserves (“URR”). Components of EGPs are used to determine reserves for universal life and fixed, indexed and variable annuity contracts with death and other insurance benefits such as guaranteed minimum death and guaranteed minimum income benefits. Both EGMs and EGPs are based on historical and anticipated future experience which is updated periodically. | |||||
Certain of our policies may be surrendered for value or exchanged for a different one of our products (internal replacement). The deferred policy acquisition costs balance associated with the replaced or surrendered policies is adjusted to reflect these surrenders. | |||||
In addition, deferred policy acquisition costs are adjusted through OCI each period as a result of unrealized gains or losses on securities classified as available-for-sale in a process commonly referred to as shadow accounting. This adjustment is required in order to reflect the impact of these unrealized amounts on interest margins as if these unrealized amounts had been realized. | |||||
The projection of EGPs and EGMs requires the extensive use of actuarial assumptions, estimates and judgments about the future. Future EGPs and EGMs are generally projected for the estimated lives of the contracts. Assumptions are set separately for each product and are reviewed at least annually based on our current best estimates of future events. The following table summarizes the most significant assumptions used in the categories set forth below: | |||||
Significant Assumption | Product | Explanation and Derivation | |||
Separate account investment return | Variable Annuities | Separate account return assumptions are derived from the long-term returns observed in the asset classes in which the separate accounts are invested. Short-term deviations from the long-term expectations are expected to revert to the long-term assumption over five years. | |||
(8.0% long-term return assumption) | |||||
Variable Universal Life | |||||
(8.0% long-term return assumption) | |||||
Interest rates and default rates | Fixed and Indexed Annuities | Investment returns are based on the current yields and maturities of our fixed income portfolio combined with expected reinvestment rates given current market interest rates. Reinvestment rates are assumed to revert to long-term rates implied by the forward yield curve and long-term default rates. Contractually permitted future changes in credited rates are assumed to help support investment margins. | |||
Universal Life | |||||
Participating Life | |||||
Mortality / longevity | Universal Life | Mortality assumptions are based on Company experience over a rolling five-year period plus supplemental data from industry sources and trends. These assumptions vary by issue age, gender, underwriting class and policy duration. | |||
Variable Universal Life | |||||
Fixed and Indexed Annuities | |||||
Participating Life | |||||
Policyholder behavior – policy persistency | Universal Life | Policy persistency assumptions vary by product and policy year and are updated based on recently observed experience. Policyholders are generally assumed to behave rationally; hence rates are typically lower when surrender penalties are in effect or when policy benefits are more valuable. | |||
Variable Universal Life | |||||
Variable Annuities | |||||
Fixed and Indexed Annuities | |||||
Participating Life | |||||
Policyholder behavior – premium persistency | Universal Life | Future premiums and related fees are projected based on contractual terms, product illustrations at the time of sale and expected policy lapses without value. Assumptions are updated based on recently observed experience and include anticipated changes in behavior based on changes in policy charges if the Company has a high degree of confidence that such changes will be implemented (e.g., change in cost of insurance (“COI”) charges). | |||
Variable Universal Life | |||||
Expenses | All products | Projected maintenance expenses to administer policies in force are based on annually updated studies of expenses incurred. | |||
Reinsurance costs / recoveries | Universal Life | Projected reinsurance costs are based on treaty terms currently in force. Recoveries are based on the Company’s assumed mortality and treaty terms. Treaty recaptures are based on contract provisions and management’s intentions. | |||
Variable Universal Life | |||||
Variable Annuities | |||||
Participating Life | |||||
During the third quarter of every year, we complete a comprehensive assumption review where management makes a determination of best estimate assumptions based on a comprehensive review of recent experience and industry trends. Assumption changes resulting from this review change our estimate of EGPs in the deferred policy acquisition cost and unearned revenue amortization models, as well as projections within the death benefit and other insurance benefit reserving models. The deferred policy acquisition cost asset, the unearned revenue reserves and death benefit and other insurance benefit reserves are then adjusted with an offsetting benefit or charge to income to reflect such changes in the period of the revision. Throughout the year, we may also update the assumptions and adjust the deferred policy acquisition cost, SIA, URR and certain guaranteed minimum income and death benefit balances if emerging data indicate a change is warranted. Our process to assess the reasonableness of the EGPs used for this purpose uses internally developed models together with consideration of applicable recent experience, analysis of market and industry trends and other events. Actual gross profits that vary from management’s estimates in a given reporting period may also result in increases or decreases in the rate of amortization recorded in the period. | |||||
All assumption changes, whether resulting from the annual comprehensive review or from other periodic assessments, are considered an unlock in the period of revision. An unlock adjusts the deferred policy acquisition cost, SIA and URR balances as well as additional death benefit reserves and cost of reinsurance balances in the consolidated balance sheets. An unlock that results in an after-tax benefit generally occurs as a result of actual experience or future expectations of product profitability being favorable compared to previous estimates. An unlock that results in an after-tax charge generally occurs as a result of actual experience or future expectations of product profitability being unfavorable compared to previous estimates. | |||||
An analysis is performed annually to assess if there are sufficient gross profits to recover the deferred policy acquisition costs associated with business written during the year. If the estimates of gross profits cannot support the recovery of deferred | |||||
policy acquisition costs, the amount deferred is reduced to the recoverable amount. | |||||
Premises and equipment | |||||
Premises and equipment, consisting primarily of our main office building, are stated at cost less accumulated depreciation and amortization and are included in other assets. We depreciate the building on the straight-line method over 39 years and equipment on the straight-line method over three to seven years. We amortize leasehold improvements over the terms of the related leases or the useful life of the improvement, whichever is shorter. | |||||
Separate account assets and liabilities | |||||
Separate account assets related to policyholder funds are carried at fair value with an equivalent amount recorded as separate account liabilities. Deposits, net investment income and realized investment gains and losses for these accounts are excluded from revenues and the related liability increases are excluded from benefits and expenses. Fees assessed to the contract owners for management services are included in revenues when services are rendered. | |||||
Policy liabilities and accruals | |||||
Policy liabilities and accruals include future benefit liabilities for certain life and annuity products. We establish liabilities in amounts adequate to meet the estimated future obligations of policies in force. Future benefit liabilities for traditional life insurance are computed using the net level premium method on the basis of actuarial assumptions as to mortality rates guaranteed in calculating the cash surrender values described in such contracts, contractual guaranteed rates of interest which range from 2.3% to 6.0% and morbidity. Participating insurance represented 20.4% and 20.0% of direct individual life insurance in force at December 31, 2012 and 2011, respectively. | |||||
Generally, future policy benefits are payable over an extended period of time and related liabilities are calculated recognizing future expected benefits, expenses and premiums. Such liabilities are established based on methods and underlying assumptions in accordance with U.S. GAAP and applicable actuarial standards. Principal assumptions used in the establishment of liabilities for future policy benefits are mortality, morbidity, policyholder behavior, investment returns, inflation, expenses and other contingent events as appropriate. These assumptions are intended to estimate the experience for the period the policy benefits are payable. Utilizing these assumptions, liabilities are established on a cohort basis, as appropriate. If experience is less favorable than assumed, additional liabilities may be established, resulting in a charge to policyholder benefits and claims. | |||||
Additional policyholder liabilities for guaranteed benefits on variable annuity and on fixed index annuity contracts are based on estimates of the expected value of benefits in excess of the projected account balance, recognizing the excess over the accumulation period based on total expected assessments. Because these estimates are sensitive to capital market movements, amounts are calculated using multiple future economic scenarios. | |||||
Additional policyholder liabilities are established for certain contract features that could generate significant reductions to future gross profits (e.g., death benefits when a contract has zero account value and a no-lapse guarantee). The liabilities are accrued over the lifetime of the block based on assessments. The assumptions used in estimating these liabilities are consistent with those used for amortizing deferred policy acquisition costs and are, thus, subject to the same variability and risk. The assumptions of investment performance and volatility for variable and equity index products are consistent with historical experience of the appropriate underlying equity indices. | |||||
The universal life block of business has experience which produces profits in earlier periods followed by losses in later periods for which a liability is required to be held in addition to the policy liabilities recorded for the block. These liabilities are accrued ratably over the profitable periods to offset the future anticipated losses. The assumptions used in estimating these liabilities are consistent with those used for amortizing deferred policy acquisition costs and are subject to the same variability and risk. | |||||
The liability for universal life-type contracts primarily includes the balance that accrues to the benefit of the policyholders as of the financial statement date, including interest credited at rates which range from 3.0% to 4.5%, amounts that have been assessed to compensate us for services to be performed over future periods, accumulated account deposits, withdrawals and any amounts previously assessed against the policyholder that are refundable. There may also be a liability recorded for contracts that include additional death or other insurance benefit features as discussed above. | |||||
The Company periodically reviews its estimates of actuarial liabilities for policyholder benefits and compares them with its actual experience. Differences between actual experience and the assumptions used in pricing these policies and guarantees, as well as in the establishment of the related liabilities, result in variances in profit and could result in losses. | |||||
Policy liabilities and accruals also include liabilities for outstanding claims, losses and loss adjustment expenses based on individual case estimates for reported losses and estimates of unreported losses based on past experience. The Company does not establish claim liabilities until a loss has occurred. However, unreported losses and loss adjustment expenses includes estimates of claims that the Company believes have been incurred but have not yet been reported as of the balance sheet date. | |||||
Embedded derivatives | |||||
Certain contracts contain guarantees that are accounted for as embedded derivative instruments. These guarantees are assessed to determine if a separate instrument with the same terms would qualify as a derivative and if they are not clearly and closely related to the economic characteristics of the host contract. Contract guarantees that meet these criteria are reported separately from the host contract and reported at fair value. | |||||
The guaranteed minimum withdrawal benefit (“GMWB”), guaranteed minimum accumulation benefit (“GMAB”) and combination rider (“COMBO”) represent embedded derivative liabilities in the variable annuity contracts. These liabilities are accounted for at fair value within policyholder deposit funds on the consolidated balance sheets with changes in the fair value of embedded derivatives recorded in realized investment gains on the consolidated statements of comprehensive income. The fair value of the GMWB, GMAB and COMBO obligation is calculated based on actuarial and capital market assumptions related to the projected cash flows, including benefits and related contract charges, over the lives of the contracts, incorporating expectations concerning policyholder behavior. As markets change, contracts mature and actual policyholder behavior emerges, these assumptions are continually evaluated and may from time to time be adjusted. | |||||
Fixed indexed annuities offer a variety of index options: policy credits that are calculated based on the performance of an outside equity market or other index over a specified term. The index options represent embedded derivative liabilities accounted for at fair value within policyholder deposit funds on the consolidated balance sheets with changes in fair value recorded in realized investment gains and losses in the consolidated statements of comprehensive income. The fair value of these index options is calculated based on the impact of projected interest rates on the discounted liabilities. Several additional inputs reflect our internally developed assumptions related to lapse rates and policyholder behavior. | |||||
See Note 12 to these financial statements for additional information regarding embedded derivatives. | |||||
Policyholder deposit funds | |||||
Amounts received as payment for certain deferred annuities and other contracts without life contingencies are reported as deposits to policyholder deposit funds. The liability for deferred annuities and other contracts without life contingencies is equal to the balance that accrues to the benefit of the contract owner as of the financial statement date which includes the accumulation of deposits plus interest credited, less withdrawals and amounts assessed through the financial statement date as well as accumulated policyholder dividends and the liability representing the fair value of embedded derivatives associated with those contracts. | |||||
Contingent liabilities | |||||
Management evaluates each contingent matter separately and in aggregate as may be required. Amounts related to contingent liabilities are accrued if it is probable that a liability has been incurred and an amount is reasonably estimable. | |||||
Demutualization and closed block | |||||
The closed block assets, including future assets from cash flows generated by the assets and premiums and other revenues from the policies in the closed block, will benefit only holders of the policies in the closed block. The principal cash flow items that affect the amount of closed block assets and liabilities are premiums, net investment income, investment purchases and sales, policyholder benefits, policyholder dividends, premium taxes and income taxes. The principal income and expense items excluded from the closed block are management and maintenance expenses, commissions, investment income and realized investment gains and losses on investments held outside the closed block that support the closed block business. All of these excluded income and expense items enter into the determination of EGMs of closed block policies for the purpose of amortization of deferred policy acquisition costs. | |||||
In our financial statements, we present closed block assets, liabilities, revenues and expenses together with all other assets, liabilities, revenues and expenses. Within closed block liabilities, we have established a policyholder dividend obligation to record an additional liability to closed block policyholders for cumulative closed block earnings in excess of expected amounts calculated at the date of demutualization. These closed block earnings will not inure to shareholders, but will result in additional future dividends to closed block policyholders unless otherwise offset by future performance of the closed block that is less favorable than expected. | |||||
Revenue recognition | |||||
We recognize premiums for participating life insurance products and other life insurance products as revenue when due from policyholders. We match benefits, losses and related expenses with premiums over the related contract periods. | |||||
Amounts received as payment for universal life, variable universal life and other investment-type contracts are considered deposits and are not included in premiums. Revenues from these products consist primarily of fees assessed during the period against the policyholders’ account balances for mortality charges, policy administration charges and surrender charges. Fees assessed that represent compensation for services to be provided in the future are deferred and amortized into revenue over the life of the related contracts in proportion to EGPs. | |||||
Certain variable annuity contracts and fixed index annuity contract riders provide the holder a guarantee that the benefit received upon death or annuitization will be no less than a minimum prescribed amount. These benefits are accounted for as insurance benefits. Certain variable annuity contracts features and fixed index annuity index options are considered embedded derivatives. These features are discussed in further detail in Note 12 to these financial statements. | |||||
Reinsurance | |||||
Premiums, policy benefits and operating expenses related to our traditional life and term insurance policies are stated net of reinsurance ceded to other companies, except for amounts associated with certain modified coinsurance contracts which are reflected in the Company’s financial statements based on the application of the deposit method of accounting. Estimated reinsurance recoverables and the net estimated cost of reinsurance are recognized over the life of the reinsured treaty using assumptions consistent with those used to account for the policies subject to the reinsurance. | |||||
For universal life and variable universal life contracts, reinsurance premiums and ceded benefits are reflected net within policy benefits. Reinsurance recoverables are recognized in the same period as the related reinsured claim. The net cost or benefit of reinsurance (the present value of all expected ceded premium payments and expected future benefit payments) is recognized over the life of the reinsured treaty using assumptions consistent with those used to account for the policies subject to the reinsurance. | |||||
Income taxes | |||||
Income tax expense or benefit is recognized based upon amounts reported in the financial statements and the provisions of currently enacted tax laws. Deferred tax assets and/or liabilities are determined by multiplying the differences between the financial reporting and tax reporting bases for assets and liabilities by the enacted tax rates expected to be in effect when such differences are recovered or settled. Valuation allowances on deferred tax assets are recorded to the extent that management concludes that it is more likely than not that an asset will not be realized. | |||||
We recognize current income tax assets and liabilities for estimated income taxes refundable or payable based on the income tax returns. We recognize deferred income tax assets and liabilities for the estimated future income tax effects of temporary differences and carryovers. Temporary differences are the differences between the financial statement carrying amounts of assets and liabilities and their tax bases, as well as the timing of income or expense recognized for financial reporting and tax purposes of items not related to assets or liabilities. If necessary, we establish valuation allowances to reduce the carrying amount of deferred income tax assets to amounts that are more likely than not to be realized. We periodically review the adequacy of these valuation allowances and record any increase or reduction in allowances in accordance with intraperiod allocation rules. We assess all significant tax positions to determine if a liability for an uncertain tax position is necessary and, if so, the impact on the current or deferred income tax balances. Also, if indicated, we recognize interest or penalties related to income taxes as a component of the income tax provision. | |||||
Pension and other post-employment benefits | |||||
We recognize pension and other postretirement benefit costs and obligations over the employees’ expected service periods by discounting an estimate of aggregate benefits. We estimate aggregate benefits by using assumptions for rates of return on pension plan assets and future health care costs. We recognize an expense for differences between actual experience and estimates exceeding a corridor over the average future lifetime of participants. We recognize an expense for our contributions to employee and agent savings plans at the time employees and agents make contributions to the plans. We also recognize the costs and obligations of severance, disability and related life insurance and health care benefits to be paid to inactive or former employees after employment but before retirement. | |||||
Audit fees and other professional services associated with the Restatement | |||||
Professional fees associated with the restatement are being recognized and expensed as incurred and totaled $4.0 million in 2012. |
4_Business_Combinations_and_Di
4. Business Combinations and Dispositions | 12 Months Ended |
Dec. 31, 2012 | |
Business Combinations [Abstract] | ' |
4. Business Combinations and Dispositions | ' |
Goodwin Capital Advisers, Inc. | |
On September 14, 2011, we entered into a definitive agreement to sell Goodwin Capital Advisers, Inc. (“Goodwin”) to Conning Holdings Corp. (“Conning Holdings”). Also, on September 14, 2011, we entered into multi-year investment management agreements with Conning, Inc. (“Conning”) under which Conning will manage the Company’s publicly traded fixed income assets. Because of the ongoing cash flows associated with the investment management agreements, results of these operations have been reflected within continuing operations. The transaction closed on November 18, 2011. | |
Private placement and limited partnership portfolios previously managed under Goodwin continue to be managed by Phoenix under its subsidiary, Phoenix Life. | |
PFG Holdings, Inc. | |
On January 4, 2010, we signed a definitive agreement to sell PFG and its subsidiaries, including AGL Life Assurance Company, to Tiptree Financial Partners, LP (“Tiptree”). Because of the divestiture, these operations are reflected as discontinued operations. On June 23, 2010, we completed the divestiture of PFG and closed the transaction. | |
The definitive agreement contains a provision requiring us to indemnify Tiptree for any losses due to actions resulting from certain specified acts or omissions associated with the divested business prior to closing. There has been litigation filed that falls within this provision of the agreement but does not name the Company as a party to the litigation. We intend to defend these matters vigorously based on our indemnity commitment. | |
Phoenix Life and Reassurance Company of New York | |
Included within the January 4, 2010 agreement with Tiptree was a provision for the purchase of Phoenix Life and Reassurance Company of New York (“PLARNY”) pending regulatory approval. On September 24, 2010, approval was obtained from the New York Department of Financial Services (“NYDFS”) (formerly known as the State of New York Insurance Department) for Tiptree and PFG Holdings Acquisition Corporation to acquire PLARNY. The transaction closed on October 6, 2010. Because of the divestiture, these operations are reflected as discontinued operations. |
5_Demutualization_and_Closed_B
5. Demutualization and Closed Block | 12 Months Ended | ||||||||
Dec. 31, 2012 | |||||||||
Insurance [Abstract] | ' | ||||||||
5. Demutualization and Closed Block | ' | ||||||||
In 1999, we began the process of reorganizing and demutualizing our then principal operating company, Phoenix Home Life. We completed the process in June 2001, when all policyholder membership interests in this mutual company were extinguished and eligible policyholders of the mutual company received shares of common stock of The Phoenix Companies, Inc., together with cash and policy credits, as compensation. To protect the future dividends of these policyholders, we also established a closed block for their existing policies. | |||||||||
Because closed block liabilities exceed closed block assets, we have a net closed block liability at December 31, 2012 and 2011, respectively. This net liability represents the maximum future earnings contribution to be recognized from the closed block and the change in this net liability each period is in the earnings contribution recognized from the closed block for the period. To the extent that actual cash flows differ from amounts anticipated, we may adjust policyholder dividends. If the closed block has excess funds, those funds will be available only to the closed block policyholders. However, if the closed block has insufficient funds to make policy benefit payments that are guaranteed, the payments will be made from assets outside of the closed block. | |||||||||
Closed Block Assets and Liabilities: | As of December 31, | ||||||||
($ in millions) | 2012 | 2011 | Inception | ||||||
As restated | |||||||||
and amended | |||||||||
Debt securities | $ | 6,396.4 | $ | 6,323.5 | $ | 4,773.1 | |||
Equity securities | 11.4 | 12.6 | — | ||||||
Limited partnerships and other investments | 353.1 | 338.0 | 399.0 | ||||||
Policy loans | 1,233.5 | 1,280.4 | 1,380.0 | ||||||
Fair value investments | 30.8 | 27.8 | — | ||||||
Total closed block investments | 8,025.2 | 7,982.3 | 6,552.1 | ||||||
Cash and cash equivalents | 32.7 | 15.1 | — | ||||||
Accrued investment income | 85.3 | 94.2 | 106.8 | ||||||
Receivables | 60.6 | 68.8 | 35.2 | ||||||
Deferred income taxes, net | 217.6 | 226.8 | 389.4 | ||||||
Other closed block assets | 31.7 | 39.2 | 6.2 | ||||||
Total closed block assets | 8,453.1 | 8,426.4 | 7,089.7 | ||||||
Policy liabilities and accruals | 8,421.7 | 8,680.4 | 8,301.7 | ||||||
Policyholder dividends payable | 223.8 | 241.0 | 325.1 | ||||||
Policy dividend obligation | 779.8 | 511.5 | — | ||||||
Other closed block liabilities | 47.5 | 41.0 | 12.3 | ||||||
Total closed block liabilities | 9,472.8 | 9,473.9 | 8,639.1 | ||||||
Excess of closed block liabilities over closed block assets (1) | $ | 1,019.7 | $ | 1,047.5 | $ | 1,549.4 | |||
——————— | |||||||||
-1 | |||||||||
The maximum future earnings summary to inure to the benefit of the stockholders is represented by the excess of closed block liabilities over closed block assets. All unrealized investment gains (losses), net of income tax, have been allocated to the policyholder dividend obligation. | |||||||||
Closed Block Revenues and Expenses and Changes in | Years Ended December 31, | ||||||||
Policyholder Dividend Obligations: | 2012 | 2011 | 2010 | ||||||
As restated | As restated | ||||||||
($ in millions) | and amended | and amended | |||||||
Closed block revenues | |||||||||
Premiums | $ | 369.5 | $ | 413.7 | $ | 478.0 | |||
Net investment income | 452.9 | 465.5 | 494.3 | ||||||
Net realized investment gains (losses) | 9.2 | -4.1 | 4.6 | ||||||
Total revenues | 831.6 | 875.1 | 976.9 | ||||||
Policy benefits, excluding dividends | 490.8 | 564.9 | 612.6 | ||||||
Other operating expenses | 3.0 | 3.7 | 8.3 | ||||||
Total benefits and expenses, excluding policyholder dividends | 493.8 | 568.6 | 620.9 | ||||||
Closed block contribution to income before dividends and income taxes | 337.8 | 306.5 | 356.0 | ||||||
Policyholder dividends | -294.5 | -258.7 | -301.3 | ||||||
Closed block contribution to income before income taxes | 43.3 | 47.8 | 54.7 | ||||||
Applicable income tax expense | 15.1 | 16.7 | 19.1 | ||||||
Noncontrolling interests | 0.5 | -0.1 | — | ||||||
Closed block contribution to income | $ | 27.7 | $ | 31.2 | $ | 35.6 | |||
Policyholder dividend obligation | |||||||||
Policyholder dividends provided through earnings | $ | 294.5 | $ | 258.7 | $ | 301.3 | |||
Policyholder dividends provided through OCI | 168.0 | 158.6 | 287.2 | ||||||
Additions to policyholder dividend liabilities | 462.5 | 417.3 | 588.5 | ||||||
Policyholder dividends paid | -211.4 | -251.3 | -303.5 | ||||||
Increase in policyholder dividend liabilities | 251.1 | 166.0 | 285.0 | ||||||
Policyholder dividend liabilities, beginning of period | 752.5 | 586.5 | 301.5 | ||||||
Policyholder dividend liabilities, end of period | 1,003.6 | 752.5 | 586.5 | ||||||
Policyholder dividends payable, end of period | -223.8 | -241 | -264.4 | ||||||
Policyholder dividend obligation, end of period | $ | 779.8 | $ | 511.5 | $ | 322.1 | |||
The policyholder dividend obligation includes approximately $172.6 million and $72.4 million, respectively, for cumulative closed block earnings in excess of expected amounts calculated at the date of demutualization as of December 31, 2012 and 2011, respectfully. These closed block earnings will not inure to stockholders, but will result in additional future dividends to closed block policyholders unless otherwise offset by future performance of the closed block that is less favorable than expected. If actual cumulative performance is less favorable than expected, only actual earnings will be recognized in net income. As of December 31, 2012 and 2011, the policyholder dividend obligation also includes $607.2 million and $439.1 million, respectfully, of net unrealized gains on investments supporting the closed block liabilities. |
6_Reinsurance
6. Reinsurance | 12 Months Ended | ||||||||
Dec. 31, 2012 | |||||||||
Insurance [Abstract] | ' | ||||||||
6. Reinsurance | ' | ||||||||
We use reinsurance agreements to limit potential losses, reduce exposure to larger risks and provide capital relief with regard to certain reserves. | |||||||||
The amount of risk ceded depends on our evaluation of the specific risk and applicable retention limits. For business sold prior to December 31, 2010, our retention limit on any one life is $10 million for single life and joint first-to-die policies and $12 million for joint last-to-die policies. Beginning January 1, 2011, our retention limit on new business is $5 million for single life and joint first-to-die policies and $6 million for second-to-die policies. We also assume reinsurance from other insurers. | |||||||||
Our reinsurance program cedes various types of risks to other reinsurers primarily under yearly renewable term and coinsurance agreements. Yearly renewable term and coinsurance agreements result in passing all or a portion of the risk to the reinsurer. Under coinsurance agreements on our traditional and term insurance policies, the reinsurer receives a proportionate amount of the premiums less an allowance for commissions and expenses and is liable for a corresponding proportionate amount of all benefit payments. Under our yearly renewable term agreements, the ceded premium represents a charge for the death benefit coverage. | |||||||||
Effective October 1, 2009, PHLVIC and Phoenix Life and Annuity Company coinsured all the benefit risks, net of existing reinsurance, on their term insurance business in force. | |||||||||
Trust agreements and irrevocable letters of credit aggregating $49.6 million at December 31, 2012 have been arranged with commercial banks in our favor to collateralize the ceded reserves. This includes $2.6 million of irrevocable letters of credit related to our discontinued group accident and health reinsurance operations. | |||||||||
We assume and cede business related to our discontinued group accident and health reinsurance operations. While we are not writing any new contracts, we are contractually obligated to continue to assume and cede premiums related to existing contracts. See Note 24 to these financial statements for more information. | |||||||||
Reinsurance recoverable includes balances due from reinsurers for paid and unpaid losses and is presented net of an allowance for uncollectable reinsurance. The reinsurance recoverable balance is $583.6 million and $564.3 million as of December 31, 2012 and 2011, respectively, and is recorded within receivables in the consolidated balance sheets. Other reinsurance activity is shown below. | |||||||||
Direct Business and Reinsurance in Continuing Operations: | Years Ended December 31, | ||||||||
($ in millions) | 2012 | 2011 | 2010 | ||||||
As restated | As restated | ||||||||
and amended | and amended | ||||||||
Direct premiums | $ | 565.3 | $ | 617.8 | $ | 703.4 | |||
Premiums assumed from reinsureds | 11.8 | 13.6 | 13.6 | ||||||
Premiums ceded to reinsurers(1) | -174.8 | -182.7 | -209.5 | ||||||
Premiums | $ | 402.3 | $ | 448.7 | $ | 507.5 | |||
Percentage of amount assumed to net premiums | 2.90% | 3.00% | 2.70% | ||||||
Direct policy benefits incurred | $ | 812.9 | $ | 763.1 | $ | 832.9 | |||
Policy benefits assumed from reinsureds | 68.7 | 9.6 | 21.7 | ||||||
Policy benefits ceded to reinsurers | -270.3 | -255.2 | -347.9 | ||||||
Premiums paid to reinsurers(2) | 97.4 | 95.9 | 85.9 | ||||||
Policy benefits(3) | $ | 708.7 | $ | 613.4 | $ | 592.6 | |||
Direct life insurance in force | $ | 115,298.6 | $ | 122,981.9 | $ | 133,612.1 | |||
Life insurance in force assumed from reinsureds | 369.2 | 1,753.7 | 1,694.2 | ||||||
Life insurance in force ceded to reinsurers | -74,609.40 | -81,259.20 | -85,873.30 | ||||||
Life insurance in force | $ | 41,058.4 | $ | 43,476.4 | $ | 49,433.0 | |||
Percentage of amount assumed to net insurance in force | 0.90% | 4.00% | 3.40% | ||||||
——————— | |||||||||
-1 | |||||||||
Primarily represents premiums ceded to reinsurers related to traditional life and term insurance policies. | |||||||||
-2 | |||||||||
For universal life and variable universal life contracts, premiums paid to reinsurers are reflected within policy benefits. See Note 3 to these financial statements for additional information regarding significant accounting policies. | |||||||||
-3 | |||||||||
Policy benefit amounts above exclude changes in reserves, interest credited to policyholders, and other items, which total $457.4 million, $523.6 million and $528.9 million, net of reinsurance, for the years ended December 31, 2012, 2011 and 2010, respectively. | |||||||||
We remain liable to the extent that reinsuring companies may not be able to meet their obligations under reinsurance agreements in effect. Failure of the reinsurers to honor their obligations could result in losses to the Company. Since we bear the risk of nonpayment, on a quarterly basis we evaluate the financial condition of our reinsurers and monitor concentrations of credit risk. Based on our review of their financial statements, reputation in the reinsurance marketplace and other relevant information, we believe that we have no material exposure to uncollectible life reinsurance. At December 31, 2012, five major reinsurance companies account for approximately 64% of the reinsurance recoverable. |
7_Deferred_Policy_Acquisition_
7. Deferred Policy Acquisition Costs | 12 Months Ended | ||||||||
Dec. 31, 2012 | |||||||||
Insurance [Abstract] | ' | ||||||||
7. Deferred Policy Acquisition Costs | ' | ||||||||
Deferred policy acquisition costs | |||||||||
On January 1, 2012, the Company adopted amendments to ASC 944, Financial Services – Insurance (ASU 2010-26) as further discussed in Note 2 to these financial statements. Also refer to Note 3 for discussion of accounting policy related to deferral and amortization of acquisition costs. | |||||||||
The balances of and changes in deferred policy acquisition costs as of and for the years ended December 31, are as follows: | |||||||||
Deferred Policy Acquisition Costs: | Years Ended December 31, | ||||||||
($ in millions) | 2012 | 2011 | 2010 | ||||||
As restated | As restated | ||||||||
and amended | and amended | ||||||||
Policy acquisition costs deferred | $ | 58.1 | $ | 91.2 | $ | 12.8 | |||
Costs amortized to expenses: | |||||||||
Recurring costs | -143.8 | -160.8 | -212.3 | ||||||
Assumption unlocking | -55.2 | 2.8 | -58.1 | ||||||
Realized investment gains (losses) | -1 | 0.1 | 2.2 | ||||||
Offsets to net unrealized investment gains or losses included in AOCI (1) | -75.1 | -52.8 | -136.2 | ||||||
Adoption of new accounting guidance (2) | — | — | -2.2 | ||||||
Change in deferred policy acquisition costs | -217 | -119.5 | -393.8 | ||||||
Deferred policy acquisition costs, beginning of period | 1,119.2 | 1,238.7 | 1,632.5 | ||||||
Deferred policy acquisition costs, end of period | $ | 902.2 | $ | 1,119.2 | $ | 1,238.7 | |||
——————— | |||||||||
-1 | |||||||||
An offset to deferred policy acquisition costs and AOCI is recorded each period to the extent that, had unrealized holding gains or losses from securities classified as available-for-sale actually been realized, an adjustment to deferred policy acquisition costs amortized using gross profits or gross margins would result. | |||||||||
-2 | |||||||||
Adjustment relates to the impact of adoption in 2010 of Accounting Standards Update 2010-11, Derivatives and Hedging (Topic 815), Scope Exception Related to Embedded Credit Derivatives. | |||||||||
During the years ended December 31, 2012, 2011 and 2010, deferred expenses primarily consisted of third-party commissions related to fixed indexed annuity sales. |
8_Sales_Inducements
8. Sales Inducements | 12 Months Ended | ||||||||
Dec. 31, 2012 | |||||||||
Insurance [Abstract] | ' | ||||||||
8. Sales Inducements | ' | ||||||||
Sales inducements | |||||||||
The Company currently offers bonus payments to contract owners on certain of its individual life and annuity products. Expenses incurred related to bonus payments are deferred and amortized over the life of the related contracts in a pattern consistent with the amortization of deferred policy acquisition costs. The Company unlocks the assumption used in the amortization of the deferred sales inducement asset consistent with the unlock of assumptions used in determining EGPs. Deferred sales inducements are included in other assets on the consolidated balance sheets and amortization of deferred sales inducements is included in other operating expense on the consolidated statements of comprehensive income. | |||||||||
Changes in Deferred Sales Inducement Activity: | Years Ended December 31, | ||||||||
($ in millions) | 2012 | 2011 | 2010 | ||||||
As restated | As restated | ||||||||
and amended | and amended | ||||||||
Deferred asset, beginning of period | $ | 50.2 | $ | 20.9 | $ | 8.1 | |||
Sales inducements deferred | 15.4 | 48.3 | 15.4 | ||||||
Amortization charged to income | -6.7 | -4.9 | -2.6 | ||||||
Offsets to net unrealized investment gains or losses included in AOCI | 2.5 | -14.1 | — | ||||||
Deferred asset, end of period | $ | 61.4 | $ | 50.2 | $ | 20.9 | |||
9_Investing_Activities
9. Investing Activities | 12 Months Ended | ||||||||||||||||||
Dec. 31, 2012 | |||||||||||||||||||
Investments, Debt and Equity Securities [Abstract] | ' | ||||||||||||||||||
9. Investing Activities | ' | ||||||||||||||||||
Debt and equity securities | |||||||||||||||||||
The following tables present the fixed maturity and equity securities available-for-sale by sector held at December 31, 2012 and 2011, respectively. The unrealized loss amounts presented below include the non-credit loss component of OTTI losses. We classify these investments into various sectors in line with industry conventions. | |||||||||||||||||||
Fair Value and Cost of Securities: | December 31, 2012 | ||||||||||||||||||
($ in millions) | Amortized | Gross | Gross | Fair | OTTI | ||||||||||||||
Cost | Unrealized | Unrealized | Value | Recognized | |||||||||||||||
Gains (1) | Losses (1) | in AOCI (2) | |||||||||||||||||
U.S. government and agency | $ | 1,055.5 | $ | 58.5 | $ | -2.5 | $ | 1,111.5 | $ | — | |||||||||
State and political subdivision | 321.5 | 37.8 | -2.1 | 357.2 | -1.4 | ||||||||||||||
Foreign government | 167.5 | 36.8 | — | 204.3 | — | ||||||||||||||
Corporate | 6,996.4 | 745.7 | -72.1 | 7,670.0 | -8.9 | ||||||||||||||
Commercial mortgage-backed (“CMBS”) | 817.2 | 72.9 | -7.9 | 882.2 | -21.8 | ||||||||||||||
Residential mortgage-backed (“RMBS”) | 1,698.2 | 94.3 | -20.8 | 1,771.7 | -64 | ||||||||||||||
CDO/CLO | 240.5 | 6.4 | -23.2 | 223.7 | -33.4 | ||||||||||||||
Other asset-backed | 421.2 | 26.6 | -12.4 | 435.4 | 5.9 | ||||||||||||||
Available-for-sale debt securities | $ | 11,718.0 | $ | 1,079.0 | $ | -141 | $ | 12,656.0 | $ | -123.6 | |||||||||
Amounts applicable to the closed block | $ | 5,789.7 | $ | 644.9 | $ | -38.2 | $ | 6,396.4 | $ | -43.5 | |||||||||
Available-for-sale equity securities | $ | 27.5 | $ | 9.7 | $ | -2.4 | $ | 34.8 | $ | — | |||||||||
Amounts applicable to the closed block | $ | 10.9 | $ | 1.8 | $ | -1.3 | $ | 11.4 | $ | — | |||||||||
——————— | |||||||||||||||||||
-1 | |||||||||||||||||||
Net unrealized investment gains and losses on securities classified as available-for-sale and certain other assets are included in our consolidated balance sheets as a component of AOCI. The table above presents the special category of AOCI for debt securities that are other-than-temporarily impaired when the impairment loss has been split between the credit loss component (in earnings) and the non-credit component (separate category of AOCI). | |||||||||||||||||||
-2 | |||||||||||||||||||
Represents the amount of non-credit OTTI losses recognized in AOCI excluding net unrealized gains or losses subsequent to the date of impairment. | |||||||||||||||||||
Fair Value and Cost of Securities: | December 31, 2011 | ||||||||||||||||||
($ in millions) | As restated and amended | ||||||||||||||||||
Amortized | Gross | Gross | Fair | OTTI | |||||||||||||||
Cost | Unrealized | Unrealized | Value | Recognized | |||||||||||||||
Gains (1) | Losses (1) | in AOCI (2) | |||||||||||||||||
U.S. government and agency | $ | 678.0 | $ | 71.6 | $ | -7.8 | $ | 741.8 | $ | — | |||||||||
State and political subdivision | 259.3 | 25.4 | -2.9 | 281.8 | — | ||||||||||||||
Foreign government | 185.7 | 21.2 | -1.7 | 205.2 | — | ||||||||||||||
Corporate | 6,127.9 | 601.7 | -171.4 | 6,558.2 | -5.8 | ||||||||||||||
Commercial mortgage-backed (“CMBS”) | 1,098.9 | 50.4 | -20 | 1,129.3 | -29.2 | ||||||||||||||
Residential mortgage-backed (“RMBS”) | 2,094.7 | 82.9 | -70.6 | 2,107.0 | -92.2 | ||||||||||||||
CDO/CLO | 283.8 | 2.5 | -53.9 | 232.4 | -36.2 | ||||||||||||||
Other asset-backed | 538.7 | 18.9 | -16.3 | 541.3 | 2.8 | ||||||||||||||
Available-for-sale debt securities | $ | 11,267.0 | $ | 874.6 | $ | -344.6 | $ | 11,797.0 | $ | -160.6 | |||||||||
Amounts applicable to the closed block | $ | 5,884.0 | $ | 565.7 | $ | -126.2 | $ | 6,323.5 | $ | -53.1 | |||||||||
Available-for-sale equity securities | $ | 32.6 | $ | 10.9 | $ | -7.8 | $ | 35.7 | $ | — | |||||||||
Amounts applicable to the closed block | $ | 13.4 | $ | 3.2 | $ | -4 | $ | 12.6 | $ | — | |||||||||
——————— | |||||||||||||||||||
-1 | |||||||||||||||||||
Net unrealized investment gains and losses on securities classified as available-for-sale and certain other assets are included in our consolidated balance sheets as a component of AOCI. The table above presents the special category of AOCI for debt securities that are other-than-temporarily impaired when the impairment loss has been split between the credit loss component (in earnings) and the non-credit component (separate category of AOCI). | |||||||||||||||||||
-2 | |||||||||||||||||||
Represents the amount of non-credit OTTI losses recognized in AOCI excluding net unrealized gains or losses subsequent to the date of impairment. | |||||||||||||||||||
Maturities of Debt Securities: | December 31, 2012 | ||||||||||||||||||
($ in millions) | Amortized | Fair | |||||||||||||||||
Cost | Value | ||||||||||||||||||
Due in one year or less | $ | 1,128.7 | $ | 1,140.7 | |||||||||||||||
Due after one year through five years | 2,046.7 | 2,219.1 | |||||||||||||||||
Due after five years through ten years | 2,824.4 | 3,131.3 | |||||||||||||||||
Due after ten years | 2,541.2 | 2,852.0 | |||||||||||||||||
CMBS/RMBS/ABS/CDO/CLO(1) | 3,177.0 | 3,312.9 | |||||||||||||||||
Total | $ | 11,718.0 | $ | 12,656.0 | |||||||||||||||
——————— | |||||||||||||||||||
-1 | |||||||||||||||||||
CMBS, RMBS, ABS, CDO and CLO are not listed separately in the table as each security does not have a single fixed maturity. | |||||||||||||||||||
The maturities of debt securities, as of December 31, 2012, are summarized in the table above by contractual maturity. Actual maturities may differ from contractual maturities as certain borrowers have the right to call or prepay obligations with or without call or prepayment penalties, and we have the right to put or sell certain obligations back to the issuers. | |||||||||||||||||||
The following table depicts the sources of available-for-sale investment proceeds and related investment gains (losses). | |||||||||||||||||||
Sales of Available-for-Sale Securities: | As of December 31, | ||||||||||||||||||
($ in millions) | 2012 | 2011 | 2010 | ||||||||||||||||
As restated | As restated | ||||||||||||||||||
and amended | and amended | ||||||||||||||||||
Fixed maturities, available-for-sale | |||||||||||||||||||
Proceeds from sales | $ | 1,541.6 | $ | 1,087.2 | $ | 1,446.9 | |||||||||||||
Proceeds from maturities/repayments | 1,757.0 | 1,264.0 | 1,246.4 | ||||||||||||||||
Gross investment gains from sales, prepayments and maturities | 52.3 | 13.6 | 57.9 | ||||||||||||||||
Gross investment losses from sales and maturities | -11.1 | -6 | -16 | ||||||||||||||||
Equity securities, available-for-sale | |||||||||||||||||||
Proceeds from sales | $ | 12.6 | $ | 9.4 | $ | 1.5 | |||||||||||||
Gross investment gains from sales | 8.5 | 3.8 | — | ||||||||||||||||
Gross investment losses from sales | -0.4 | -0.1 | — | ||||||||||||||||
Aging of Temporarily Impaired Securities: | As of December 31, 2012 | ||||||||||||||||||
($ in millions) | Less than 12 months | Greater than 12 months | Total | ||||||||||||||||
Fair | Unrealized | Fair | Unrealized | Fair | Unrealized | ||||||||||||||
Value | Losses | Value | Losses | Value | Losses | ||||||||||||||
Debt Securities | |||||||||||||||||||
U.S. government and agency | $ | 9.0 | $ | -0.1 | $ | 28.4 | $ | -2.4 | $ | 37.4 | $ | -2.5 | |||||||
State and political subdivision | 13.5 | -0.8 | 7.1 | -1.3 | 20.6 | -2.1 | |||||||||||||
Foreign government | — | — | — | — | — | — | |||||||||||||
Corporate | 300.9 | -6.2 | 318.2 | -65.9 | 619.1 | -72.1 | |||||||||||||
CMBS | 8.4 | -1 | 30.7 | -6.9 | 39.1 | -7.9 | |||||||||||||
RMBS | 64.7 | -0.4 | 212.6 | -20.4 | 277.3 | -20.8 | |||||||||||||
CDO/CLO | 26.2 | -2 | 132.7 | -21.2 | 158.9 | -23.2 | |||||||||||||
Other asset-backed | 10.1 | -0.7 | 43.3 | -11.7 | 53.4 | -12.4 | |||||||||||||
Debt securities | 432.8 | -11.2 | 773.0 | -129.8 | 1,205.8 | -141 | |||||||||||||
Equity securities | 4.4 | -1.6 | 2.4 | -0.8 | 6.8 | -2.4 | |||||||||||||
Total temporarily impaired securities | $ | 437.2 | $ | -12.8 | $ | 775.4 | $ | -130.6 | $ | 1,212.6 | $ | -143.4 | |||||||
Amounts inside the closed block | $ | 150.7 | $ | -4.6 | $ | 332.4 | $ | -34.9 | $ | 483.1 | $ | -39.5 | |||||||
Amounts outside the closed block | $ | 286.5 | $ | -8.2 | $ | 443.0 | $ | -95.7 | $ | 729.5 | $ | -103.9 | |||||||
Amounts outside the closed block | $ | 29.8 | $ | -2 | $ | 177.5 | $ | -63.4 | $ | 207.3 | $ | -65.4 | |||||||
that are below investment grade | |||||||||||||||||||
Number of securities | 108 | 196 | 304 | ||||||||||||||||
Unrealized losses on below-investment-grade debt securities outside the closed block with a fair value depressed by more than 20% of amortized cost totaled $52.3 million at December 31, 2012, of which $52.1 million was depressed by more than 20% of amortized cost for more than 12 months. | |||||||||||||||||||
Unrealized losses on below-investment-grade debt securities held in the closed block with a fair value depressed by more than 20% of amortized cost totaled $5.5 million at December 31, 2012, of which $5.5 million was depressed by more than 20% of amortized cost for more than 12 months. | |||||||||||||||||||
As of December 31, 2012, available-for-sale securities in an unrealized loss position for over 12 months consisted of 192 debt securities and four equity securities. The debt securities primarily relate to municipal securities, asset backed securities, and corporate securities, which have depressed values due primarily to an increase in interest rates since the purchase of these securities. Unrealized losses were not recognized in earnings on these fixed maturity securities since the Company neither intends to sell the securities nor do we believe that it is more likely than not that it will be required to sell these securities before recovery of their amortized cost basis. Additionally, based on a security-by-security analysis, we expect to recover the entire amortized cost basis of these securities. In our evaluation of each security, management considers the actual recovery periods for these securities in previous periods of broad market declines. For securities with significant declines, individual security level analysis is performed, which considers any credit enhancements, expectations of defaults on underlying collateral and other available market data, including industry analyst reports and forecasts. Similarly, for equity securities in an unrealized loss position for more than 12 months, management performs an analysis on a security by security basis. Although there may be sustained losses for the prior four quarters on these securities, additional information is obtained related to company performance in the fourth quarter of 2012 which would not indicate that the additional losses are other-than-temporary. | |||||||||||||||||||
Aging of Temporarily Impaired Securities: | As of December 31, 2011 | ||||||||||||||||||
($ in millions) | As restated and amended | ||||||||||||||||||
Less than 12 months | Greater than 12 months | Total | |||||||||||||||||
Fair | Unrealized | Fair | Unrealized | Fair | Unrealized | ||||||||||||||
Value | Losses | Value | Losses | Value | Losses | ||||||||||||||
Debt Securities | |||||||||||||||||||
U.S. government and agency | $ | — | $ | -2.4 | $ | 41.2 | $ | -5.4 | $ | 41.2 | $ | -7.8 | |||||||
State and political subdivision | 26.1 | -0.1 | 6.2 | -2.8 | 32.3 | -2.9 | |||||||||||||
Foreign government | 25.6 | -1.7 | — | — | 25.6 | -1.7 | |||||||||||||
Corporate | 367.0 | -29.4 | 501.2 | -142 | 868.2 | -171.4 | |||||||||||||
CMBS | 132.4 | -4.1 | 52.1 | -15.9 | 184.5 | -20 | |||||||||||||
RMBS | 178.1 | -7.8 | 392.4 | -62.8 | 570.5 | -70.6 | |||||||||||||
CDO/CLO | 15.4 | -0.8 | 167.6 | -53.1 | 183.0 | -53.9 | |||||||||||||
Other asset-backed | 101.3 | -2.1 | 57.8 | -14.2 | 159.1 | -16.3 | |||||||||||||
Debt securities | 845.9 | -48.4 | 1,218.5 | -296.2 | 2,064.4 | -344.6 | |||||||||||||
Equity securities | 12.1 | -7 | 0.4 | -0.8 | 12.5 | -7.8 | |||||||||||||
Total temporarily impaired securities | $ | 858.0 | $ | -55.4 | $ | 1,218.9 | $ | -297 | $ | 2,076.9 | $ | -352.4 | |||||||
Amounts inside the closed block | $ | 308.5 | $ | -23.6 | $ | 552.7 | $ | -106.6 | $ | 861.2 | $ | -130.2 | |||||||
Amounts outside the closed block | $ | 549.5 | $ | -31.8 | $ | 666.2 | $ | -190.4 | $ | 1,215.7 | $ | -222.2 | |||||||
Amounts outside the closed block | $ | 68.8 | $ | -13.9 | $ | 248.5 | $ | -125.2 | $ | 317.3 | $ | -139.1 | |||||||
that are below investment grade | |||||||||||||||||||
Number of securities | 255 | 304 | 559 | ||||||||||||||||
Unrealized losses on below-investment-grade debt securities outside the closed block with a fair value depressed by more than 20% of amortized cost totaled $120.3 million at December 31, 2011, of which $93.5 million was depressed by more than 20% of amortized cost for more than 12 months. | |||||||||||||||||||
Unrealized losses on below-investment-grade debt securities held in the closed block with a fair value depressed by more than 20% of amortized cost totaled $39.9 million at December 31, 2011, of which $17.3 million was depressed by more than 20% of amortized cost for more than 12 months. | |||||||||||||||||||
As of December 31, 2011, available-for-sale securities in an unrealized loss position for over 12 months consisted of 302 debt securities and two equity securities. The debt securities primarily relate to municipal securities, asset backed securities, and corporate securities, which have depressed values due primarily to an increase in interest rates since the purchase of these securities. Unrealized losses were not recognized in earnings on these fixed maturity securities since the Company neither intends to sell the securities nor do we believe that it is more likely than not that it will be required to sell these securities before recovery of their amortized cost basis. Additionally, based on a security-by-security analysis, we expect to recover the entire amortized cost basis of these securities. In our evaluation of each security, management considers the actual recovery periods for these securities in previous periods of broad market declines. For securities with significant declines, individual security level analysis is performed, which considers any credit enhancements, expectations of defaults on underlying collateral and other available market data, including industry analyst reports and forecasts. Similarly, for equity securities in an unrealized loss position for more than 12 months, management performs an analysis on a security by security basis. Although there may be sustained losses for the prior four quarters on these securities, additional information is obtained related to company performance in the fourth quarter of 2011 which would not indicate that the losses are other-than-temporary. | |||||||||||||||||||
Evaluating temporarily impaired available-for-sale securities | |||||||||||||||||||
In management’s evaluation of temporarily impaired securities, many factors about individual issuers of securities as well as our best judgment in determining the cause of a decline in the estimated fair value are considered in the assessment of potential near-term recovery in the security’s value. Some of those considerations include, but are not limited to: (i) duration of time and extent to which the estimated fair value has been below cost or amortized cost; (ii) for fixed maturity securities, if the Company has the intent to sell or will more likely than not be required to sell a particular security before the decline in estimated fair value below amortized cost recovers; (iii) whether the issuer is experiencing significant financial difficulties and the potential for impairments of that issuer’s securities; (iv) pervasive issues across an entire industry sector/sub-sector; and (v) for structured securities, assessing any changes in the forecasted cash flows, the quality of underlying collateral, expectations of prepayment speeds, loss severity and payment priority of tranches held. | |||||||||||||||||||
Other-than-temporary impairments | |||||||||||||||||||
Management assessed all securities in an unrealized loss position in determining whether impairments were temporary or other-than-temporary. In reaching its conclusions, management exercised significant judgment and used a number of issuer-specific quantitative indicators and qualitative judgments to assess the probability of receiving a given security’s contractual cash flows. This included the issue’s implied yield to maturity, cumulative default rate based on rating, comparisons of issue-specific spreads to industry or sector spreads, specific trading activity in the issue and other market data such as recent debt tenders and upcoming refinancing requirements. Management also reviewed fundamentals such as issuer credit and liquidity metrics, business outlook and industry conditions. Management maintains a watch list of securities that is reviewed for impairments. Each security on the watch list was evaluated, analyzed and discussed, with the positive and negative factors weighed in the ultimate determination of whether or not the security was other-than-temporarily impaired. For securities for which no OTTI was ultimately indicated at December 31, 2012, management does not have the intention to sell, nor does it expect to be required to sell, these securities prior to their recovery. | |||||||||||||||||||
Fixed income OTTIs recorded in 2012 were primarily concentrated in structured securities. These impairments were driven primarily by increased collateral default rates. In our judgment, these credit events and other adverse conditions of the collateral have caused, or will most likely lead to, a deficiency in the contractual cash flows related to the investment. Therefore, based upon these credit events, we have determined that OTTIs exist. Total debt impairments recognized through earnings related to such credit-related circumstances were $22.8 million in 2012, $26.0 million in 2011 and $48.3 million in 2010. There were equity security OTTIs of $5.7 million in 2012, $0.8 in 2011 and $0.2 million in 2010. There were limited partnerships and other investment OTTIs of $0.3 million in 2012, $0.0 in 2011 and $0.1 million in 2010. | |||||||||||||||||||
In addition to these credit-related impairments recognized through earnings, we impaired securities to fair value through other comprehensive loss for any impairments related to non-credit related factors. These types of impairments were driven primarily by market or sector credit spread widening or by a lack of liquidity in the securities. The amount of impairments recognized as an adjustment to other comprehensive loss due to these factors was $22.9 million in 2012, $38.5 million in 2011 and $58.7 million in 2010. | |||||||||||||||||||
The following table presents a roll-forward of pre-tax credit losses recognized in earnings related to debt securities for which a portion of the OTTI was recognized in OCI. | |||||||||||||||||||
Credit Losses Recognized in Earnings on Debt Securities for | As of December 31, | ||||||||||||||||||
which a Portion of the OTTI Loss was Recognized in OCI: | 2012 | 2011 | 2010 | ||||||||||||||||
($ in millions) | As restated | As restated | |||||||||||||||||
and amended | and amended | ||||||||||||||||||
Balance, beginning of period | $ | -79.1 | $ | -65.8 | $ | -50.6 | |||||||||||||
Add: Credit losses on securities not previously impaired (1) | -6.7 | -11.8 | -14.9 | ||||||||||||||||
Add: Credit losses on securities previously impaired (1) | -13.3 | -8.6 | -22.4 | ||||||||||||||||
Less: Credit losses on securities impaired due to intent to sell | — | — | — | ||||||||||||||||
Less: Credit losses on securities sold | 26.5 | 7.1 | 11.4 | ||||||||||||||||
Less: Credit losses upon adoption of new accounting guidance (2) | — | — | 10.7 | ||||||||||||||||
Less: Increases in cash flows expected on previously impaired securities | — | — | — | ||||||||||||||||
Balance, end of period | $ | -72.6 | $ | -79.1 | $ | -65.8 | |||||||||||||
——————— | |||||||||||||||||||
-1 | |||||||||||||||||||
Additional credit losses on securities for which a portion of the OTTI loss was recognized in AOCI are included within net OTTI losses recognized in earnings on the statements of comprehensive income. | |||||||||||||||||||
-2 | |||||||||||||||||||
Adjustment relates to the impact of adoption in 2010 of Accounting Standards Update 2010-11, Derivatives and Hedging (Topic 815), Scope Exception Related to Embedded Credit Derivatives. | |||||||||||||||||||
Limited partnerships and other investments | |||||||||||||||||||
Limited Partnerships and Other Investments: | As of December 31, | ||||||||||||||||||
($ in millions) | 2012 | 2011 | |||||||||||||||||
As restated | |||||||||||||||||||
and amended | |||||||||||||||||||
Limited partnerships | |||||||||||||||||||
Private equity funds | $ | 241.7 | $ | 233.0 | |||||||||||||||
Mezzanine funds | 202.1 | 191.9 | |||||||||||||||||
Infrastructure funds | 42.5 | 35.4 | |||||||||||||||||
Hedge funds | 14.3 | 14.9 | |||||||||||||||||
Mortgage and real estate funds | 5.4 | 12.4 | |||||||||||||||||
Leveraged leases | 17.9 | 24.1 | |||||||||||||||||
Direct equity investments | 29.2 | 28.5 | |||||||||||||||||
Life settlements | 21.0 | 21.1 | |||||||||||||||||
Other alternative assets | 3.2 | 4.0 | |||||||||||||||||
Limited partnerships and other investments | $ | 577.3 | $ | 565.3 | |||||||||||||||
Amounts applicable to the closed block | $ | 353.1 | $ | 338.0 | |||||||||||||||
Equity method investees | |||||||||||||||||||
The Company uses equity method accounting when it has more than a minor interest or influence of the partnership’s or limited liability company’s (“LLCs”) operations but does not have a controlling interest. Equity method income is recognized as earned by the investee. Management views the information reported from the underlying funds as the best information available to record its investments. Further, management is in direct communication with the fund managers to ensure accuracy of ending capital balances. | |||||||||||||||||||
The following tables present the aggregated summarized financial information of certain equity method investees in limited partnerships and LLCs. For all three periods, the equity in earnings that we record through net investment income of these equity method investees in aggregate exceeds 10% of PNX income from continuing operations before income taxes. | |||||||||||||||||||
Aggregated Summarized Balance Sheet Information of Equity Method Investees: | As of December 31, | ||||||||||||||||||
($ in millions) | 2012 | 2011 | |||||||||||||||||
As restated | |||||||||||||||||||
and amended | |||||||||||||||||||
Total assets | $ | 60,921.3 | $ | 59,960.0 | |||||||||||||||
Total liabilities | $ | 2,298.4 | $ | 2,581.0 | |||||||||||||||
Aggregated Net Investment Income: | Years Ended December 31, | ||||||||||||||||||
($ in millions) | 2012 | 2011 | 2010 | ||||||||||||||||
As restated | As restated | ||||||||||||||||||
and amended | and amended | ||||||||||||||||||
Total investment revenues | $ | 2,389.6 | $ | 3,093.6 | $ | 3,083.7 | |||||||||||||
Net income | $ | 8,315.2 | $ | 5,489.5 | $ | 8,375.4 | |||||||||||||
Summarized financial information for these equity method investees is reported on a three-month delay due to the timing of financial statements as of the current reporting period. | |||||||||||||||||||
Leveraged leases | |||||||||||||||||||
The Company records its investment in a leveraged lease net of the nonrecourse debt. The Company recognizes income on the leveraged leases by applying the estimated rate of return to the net investment in the lease. The Company regularly reviews the estimated residual values and impairs them to expected values. | |||||||||||||||||||
Investment in leveraged leases, included in limited partnerships and other investments, consisted of the following: | |||||||||||||||||||
Investment in Leveraged Leases: | 2012 | 2011 | |||||||||||||||||
($ in millions) | As restated | ||||||||||||||||||
and amended | |||||||||||||||||||
Rental receivables, net | $ | 11.4 | $ | 13.5 | |||||||||||||||
Estimated residual values | 7.3 | 12.8 | |||||||||||||||||
Unearned income | -0.8 | -2.2 | |||||||||||||||||
Investment in leveraged leases | $ | 17.9 | $ | 24.1 | |||||||||||||||
Rental receivables are generally due in periodic installments. The payments are made semi-annually and range from three to five years. For rental receivables, the primary credit quality indicator is whether the rental receivable is performing or non-performing, which is assessed at least annually. The Company defines non-performing rental receivables as those that are 90 days or more past due. At December 31, 2012 and 2011, all rental receivables were performing. The deferred income tax liability related to leveraged leases was $11.6 million and $16.3 million at December 31, 2012 and 2011, respectively. The components of income from investment in leveraged leases, excluding net investment gains (losses) were as follows: | |||||||||||||||||||
Investment Income after Income Tax from | As of December 31, | ||||||||||||||||||
Investment in Leveraged Leases: | 2012 | 2011 | 2010 | ||||||||||||||||
($ in millions) | As restated | As restated | |||||||||||||||||
and amended | and amended | ||||||||||||||||||
Income from investment in leveraged leases | $ | 0.2 | $ | 0.2 | $ | 0.3 | |||||||||||||
Less: Income tax expense on leveraged leases | -0.1 | -0.1 | -0.1 | ||||||||||||||||
Investment income after income tax from investment in leveraged leases | $ | 0.1 | $ | 0.1 | $ | 0.2 | |||||||||||||
Direct equity investments | |||||||||||||||||||
Direct equity investments are equity interests in LLCs entered into on a co-investment basis with sponsors of private equity funds for strategic and capital appreciation purposes and are accounted for under the equity method. The Company records its share of earnings on a three-month delay when timely financial information is not available and the delivery of investee’s financial reporting occurs after the end of the current reporting period. Further, management has open communication with each fund manager and, to the extent financial information is available, receives quarterly statements from the underlying funds. Management also performed an analysis on the funds’ financial statements to assess reasonableness of information provided by third parties. Income received from our other direct equity investments was $(0.2) million, $(0.3) million and $4.7 million for the years ended December 31, 2012, 2011 and 2010, respectively. | |||||||||||||||||||
In some situations for these direct equity investments, we hold both the power to direct the most significant activities of the entity and an economic interest in the entity. For those which were determined to be VIEs, we are considered to be the primary beneficiary of the entity and consolidate the VIE. The undistributed earnings of direct equity investments not consolidated were $(3.1) million, $(0.1) million and $4.6 million at December 31, 2012, 2011 and 2010, respectively. Any future investment in these structures is discretionary. | |||||||||||||||||||
The following table presents the carrying value and change in investment balance of non-consolidated direct equity investments: | |||||||||||||||||||
Carrying Value and Change in Investment Balance of | |||||||||||||||||||
Non-Consolidated Direct Equity Investments: | |||||||||||||||||||
($ in millions) | |||||||||||||||||||
Year ended December 31, 2010 | $ | 18.4 | |||||||||||||||||
Net contributions (distributions) | 9.8 | ||||||||||||||||||
Net income (loss) | 0.3 | ||||||||||||||||||
Year ended December 31, 2011 | 28.5 | ||||||||||||||||||
Net contributions (distributions) | 0.8 | ||||||||||||||||||
Net income (loss) | -0.1 | ||||||||||||||||||
Year ended December 31, 2012 | $ | 29.2 | |||||||||||||||||
Life settlements | |||||||||||||||||||
During 2012, 2011 and 2010, income (losses) recognized on life settlement contracts was $0.9 million, $0.0 and $0.2 million, respectively, and is included in net investment income in the consolidated statements of comprehensive income. Our life settlement contracts reported above are monitored for impairment on a contract-by-contract basis quarterly. An investment in a life settlement contract is considered impaired if the undiscounted cash flows from the expected proceeds from the insurance policy are less than the carrying amount of the investment plus the expected costs to keep the policy in force. If an impairment loss is recognized, the investment is written down to fair value. Anticipated policy cash flows are based on the Company’s current mortality assumption including the relative impairment of individual insured at the time the policy was purchased. Impairment charges on life settlement contracts included in net realized capital gains (losses) totaled $0.3 million in 2012 with no previous impairments recorded. | |||||||||||||||||||
Remaining Life Expectancy of Insured: | Face Value | ||||||||||||||||||
($ in millions) | Number of | Carrying | (Death | ||||||||||||||||
Contracts | Value | Benefits) | |||||||||||||||||
0-4 years | — | $ | — | $ | — | ||||||||||||||
4-5 years | 6 | 12.6 | 23.0 | ||||||||||||||||
Thereafter | 8 | 8.4 | 37.1 | ||||||||||||||||
Total | 14 | $ | 21.0 | $ | 60.1 | ||||||||||||||
At December 31, 2012, the anticipated life insurance premiums required to keep the life settlement contracts in force, payable in the next 12 months ending December 31, 2013 and the four succeeding years ending December 31, 2017 are $1.2 million, $1.0 million, $0.7 million, $0.7 million and $0.8 million, respectively. | |||||||||||||||||||
Statutory deposits | |||||||||||||||||||
Pursuant to certain statutory requirements, as of December 31, 2012 and 2011, our Life Companies had on deposit securities with a fair value of $33.0 million and $50.5 million, respectively, in insurance department special deposit accounts. Our Life Companies are not permitted to remove the securities from these accounts without approval of the regulatory authority. | |||||||||||||||||||
Net investment income | |||||||||||||||||||
Net investment income is comprised primarily of interest income, including amortization of premiums and accretion of discounts on structured securities, based on yields which are changed due to expectations in projected principal and interest cash flows, dividend income from common and preferred stock, gains and losses on securities measured at fair value and earnings from investments accounted for under the equity method of accounting. | |||||||||||||||||||
Sources of Net Investment Income: | Years Ended December 31, | ||||||||||||||||||
($ in millions) | 2012 | 2011 | 2010 | ||||||||||||||||
As restated | As restated | ||||||||||||||||||
and amended | and amended | ||||||||||||||||||
Debt securities | $ | 606.6 | $ | 607.9 | $ | 597.9 | |||||||||||||
Equity securities | 3.0 | 1.1 | 2.4 | ||||||||||||||||
Limited partnerships and other investments | 64.7 | 48.9 | 69.2 | ||||||||||||||||
Policy loans | 161.5 | 171.8 | 171.7 | ||||||||||||||||
Fair value investments | 9.4 | 3.5 | 12.5 | ||||||||||||||||
Total investment income | 845.2 | 833.2 | 853.7 | ||||||||||||||||
Less: Discontinued operations | 2.1 | 2.1 | 5.0 | ||||||||||||||||
Less: Investment expenses | 13.8 | 8.2 | 8.2 | ||||||||||||||||
Net investment income | $ | 829.3 | $ | 822.9 | $ | 840.5 | |||||||||||||
Amounts applicable to closed block | $ | 452.9 | $ | 465.5 | $ | 494.3 | |||||||||||||
Net realized investment gains (losses) | |||||||||||||||||||
Sources and Types of Net Realized Investment Gains (Losses): | Years Ended December 31, | ||||||||||||||||||
($ in millions) | 2012 | 2011 | 2010 | ||||||||||||||||
As restated | As restated | ||||||||||||||||||
and amended | and amended | ||||||||||||||||||
Total other-than-temporary debt impairments | $ | -45.7 | $ | -64.5 | $ | -107 | |||||||||||||
Portion of loss recognized in OCI | 22.9 | 38.5 | 58.7 | ||||||||||||||||
Net debt impairments recognized in earnings | $ | -22.8 | $ | -26 | $ | -48.3 | |||||||||||||
Debt security impairments: | |||||||||||||||||||
U.S. government and agency | $ | — | $ | — | $ | — | |||||||||||||
State and political subdivision | -0.6 | — | — | ||||||||||||||||
Foreign government | — | — | — | ||||||||||||||||
Corporate | -3 | -9 | -7.3 | ||||||||||||||||
CMBS | -4.1 | -3.6 | -6.6 | ||||||||||||||||
RMBS | -10.3 | -10.1 | -15.9 | ||||||||||||||||
CDO/CLO | -3.8 | -2.1 | -15 | ||||||||||||||||
Other asset-backed | -1 | -1.2 | -3.5 | ||||||||||||||||
Net debt security impairments | -22.8 | -26 | -48.3 | ||||||||||||||||
Equity security impairments | -5.7 | -0.8 | -0.2 | ||||||||||||||||
Limited partnerships and other investment impairments | -0.3 | — | -0.1 | ||||||||||||||||
Impairment losses | -28.8 | -26.8 | -48.6 | ||||||||||||||||
Debt security transaction gains | 52.3 | 13.6 | 57.9 | ||||||||||||||||
Debt security transaction losses | -11.1 | -6 | -16 | ||||||||||||||||
Equity security transaction gains | 8.5 | 3.8 | — | ||||||||||||||||
Equity security transaction losses | -0.4 | -0.1 | — | ||||||||||||||||
Limited partnerships and other investment gains | 7.7 | 4.8 | 13.8 | ||||||||||||||||
Limited partnerships and other investment losses | -2.5 | -4.8 | -6.9 | ||||||||||||||||
Sale of Goodwin | — | 4.0 | — | ||||||||||||||||
Net transaction gains | 54.5 | 15.3 | 48.8 | ||||||||||||||||
Derivative instruments | -50.4 | 14.4 | -26.6 | ||||||||||||||||
Embedded derivatives(1) | 12.1 | -34.4 | 12.3 | ||||||||||||||||
Assets valued at fair value | 2.1 | -0.6 | 2.9 | ||||||||||||||||
Net realized investment gains (losses), excluding impairment losses | 18.3 | -5.3 | 37.4 | ||||||||||||||||
Net realized investment gains (losses), including impairment losses | $ | -10.5 | $ | -32.1 | $ | -11.2 | |||||||||||||
——————— | |||||||||||||||||||
-1 | |||||||||||||||||||
Includes the change in fair value of embedded derivatives associated with variable annuity GMWB, GMAB and COMBO riders. See Note 12 to these financial statements for additional disclosures. | |||||||||||||||||||
Unrealized investment gains (losses) | |||||||||||||||||||
Sources of Changes in Net Unrealized Investment Gains: | Years Ended December 31, | ||||||||||||||||||
($ in millions) | 2012 | 2011 | 2010 (1) | ||||||||||||||||
As restated | As restated | ||||||||||||||||||
and amended | and amended | ||||||||||||||||||
Debt securities | $ | 408.0 | $ | 281.1 | $ | 590.0 | |||||||||||||
Equity securities | 4.2 | -7.4 | 6.4 | ||||||||||||||||
Other investments | -0.2 | -0.2 | 0.5 | ||||||||||||||||
Net unrealized investment gains | $ | 412.0 | $ | 273.5 | $ | 596.9 | |||||||||||||
Net unrealized investment gains | $ | 412.0 | $ | 273.5 | $ | 596.9 | |||||||||||||
Applicable closed block policyholder dividend obligation | 168.0 | 158.6 | 287.2 | ||||||||||||||||
Applicable deferred policy acquisition cost | 75.1 | 52.8 | 136.2 | ||||||||||||||||
Applicable other actuarial offsets | 75.2 | 37.2 | 24.3 | ||||||||||||||||
Applicable deferred income tax expense (benefit) | 90.9 | 0.3 | 87.0 | ||||||||||||||||
Offsets to net unrealized investment gains | 409.2 | 248.9 | 534.7 | ||||||||||||||||
Net unrealized investment gains included in OCI | $ | 2.8 | $ | 24.6 | $ | 62.2 | |||||||||||||
——————— | |||||||||||||||||||
-1 | |||||||||||||||||||
Balances for 2010 include the impact of adoption in 2010 of Accounting Standards Update 2010-11, Derivatives and Hedging (Topic 815), Scope Exception Related to Embedded Credit Derivatives. | |||||||||||||||||||
Consolidated variable interest entities | |||||||||||||||||||
Effective January 1, 2010, the Company adopted guidance related to consolidation of VIEs. The revised consolidation guidance amended the definition as well as the method of determining whether an entity is the primary beneficiary of a VIE to a qualitative model. Under the new model, an entity that has both the ability to direct the significant activities of the VIE and the obligation to receive the benefits or absorb the losses that is significant to the VIE is considered the primary beneficiary. This update requires ongoing assessment and enhanced disclosures including the effect of the Company’s involvement with VIEs on its financial statements. | |||||||||||||||||||
The Company regularly invests in private equity type fund structures which are VIEs. Entities which do not have sufficient equity at risk to allow the entity to finance its activities without additional financial support or in which the equity investors, as a group, do not have the characteristic of a controlling financial interest are referred to as VIEs. We hold investments in certain entities that are VIEs. In some situations, we hold both the power to direct the most significant activities of the entity and an economic interest in the entity. We perform ongoing assessments of our investments in VIEs to determine whether we have the power to direct the activities in the VIE and, therefore, would be considered to be the primary beneficiary of the entity. An entity would be considered a primary beneficiary and be required to consolidate a VIE when the entity has both the power to direct the activities of a VIE that most significantly impact the entity’s economic performance and the obligation to absorb losses, or right to receive benefits, that could potentially be significant to the VIE. As such, we are considered to be the primary beneficiary of the entity and consolidate the VIE. The consolidated entities are all investment company-like structures which follow specialized investment company accounting and record underlying investments at fair value. The nature of the VIEs’ operations and purpose are private equity limited partnerships, single asset LLCs and a fund of fund investment structure and have investments in homogenous types of assets presented below. | |||||||||||||||||||
The following table presents the total assets and total liabilities relating to consolidated VIEs at December 31, 2012 and 2011. | |||||||||||||||||||
Carrying Value of Assets and Liabilities for | December 31, 2012 | December 31, 2011 | |||||||||||||||||
Consolidated Variable Interest Entities: | As restated and amended | ||||||||||||||||||
($ in millions) | Assets | Liabilities | Maximum | Assets | Liabilities | Maximum | |||||||||||||
Exposure | Exposure | ||||||||||||||||||
to Loss (1) | to Loss (1) | ||||||||||||||||||
Debt securities, at fair value (2) | $ | 3.6 | $ | — | $ | 3.4 | $ | 0.3 | $ | — | $ | 0.2 | |||||||
Equity securities, at fair value (2) | 23.4 | — | 19.2 | 27.8 | — | 26.5 | |||||||||||||
Cash and cash equivalents | 10.2 | — | 10.2 | 3.5 | — | 3.3 | |||||||||||||
Investment in partnership interests (2) | 11.0 | — | 11.0 | 14.6 | — | 14.6 | |||||||||||||
Investment in single asset LLCs (2) | 6.8 | — | 5.4 | 1.7 | — | 1.0 | |||||||||||||
Other assets | 5.5 | 5.5 | 0.1 | — | |||||||||||||||
Total assets of consolidated VIEs | $ | 60.5 | $ | — | $ | 54.7 | $ | 48.0 | $ | — | $ | 45.6 | |||||||
Total liabilities of consolidated VIEs | $ | — | $ | 5.1 | $ | 5.1 | $ | — | $ | 0.1 | $ | 0.1 | |||||||
——————— | |||||||||||||||||||
-1 | |||||||||||||||||||
Creditors or beneficial interest holders of the consolidated VIEs have no recourse to our general credit. Our obligation to the VIEs is limited to the amount of our committed investment. We have not provided material financial or other support that was not contractually required to these VIEs. The maximum exposure to loss above for December 31, 2012 and 2011 excludes unfunded commitments of $4.1 million and $3.6 million, respectively. | |||||||||||||||||||
-2 | |||||||||||||||||||
Included in fair value investments on the consolidated balance sheets. | |||||||||||||||||||
Non-consolidated variable interest entities | |||||||||||||||||||
We hold limited partnership interests with various VIEs primarily as a passive investor in private equity limited partnerships and through direct investments, in which the general partners are not related parties. As the Company is not the general partner in any VIE structures, consolidation is based on evaluation of the primary beneficiary. This analysis includes a review of the VIE’s capital structure, nature of the VIE’s operations and purpose and the Company’s involvement with the entity. When determining the need to consolidate a VIE, the design of the VIE is evaluated as well as any exposed risks of the Company’s investment. As we do not have both: (i) the power to direct the activities of the VIE that most significantly impact the economic performance of the entity; and (ii) the obligation to absorb losses of the entity that could be potentially significant to the VIE or the right to receive benefits from the entity that could be potentially significant, we do not consolidate these VIEs. These investments are accounted for under the equity method of accounting and are included in limited partnerships and other investments on our consolidated balance sheets. We reassess our VIE determination with respect to an entity on an ongoing basis. The following table presents the carrying value of assets and liabilities and the maximum exposure to loss relating to significant VIEs for which we are not the primary beneficiary. | |||||||||||||||||||
The carrying value of our investments in non-consolidated VIEs (based upon sponsor values and financial statements of the individual entities) for which we are not the primary beneficiary was $139.7 million and $141.7 million as of December 31, 2012 and 2011, respectively. The maximum exposure to loss is equal to the carrying amounts plus any unfunded commitments of the Company. Such a maximum loss would be expected to occur only upon bankruptcy of the issuer or investee. The Company has not provided nor intends to provide financial support to these entities unless contractually required. We do not have the contractual option to redeem these limited partnership interests but receive distributions based on the liquidation of the underlying assets. The Company must generally request general partner consent to transfer or sell its fund interests. The Company performs ongoing qualitative analyses of its involvement with VIEs to determine if consolidation is required. | |||||||||||||||||||
Carrying Value of Assets and Liabilities | December 31, 2012 | December 31, 2011 | |||||||||||||||||
and Maximum Exposure Loss Relating | As restated and amended | ||||||||||||||||||
to Variable Interest Entities: | Assets | Liabilities | Maximum | Assets | Liabilities | Maximum | |||||||||||||
($ in millions) | Exposure | Exposure | |||||||||||||||||
to Loss (1) | to Loss (1) | ||||||||||||||||||
Limited partnerships | $ | 136.5 | $ | — | $ | 202.1 | $ | 133.2 | $ | — | $ | 201.6 | |||||||
LLCs | 3.2 | — | 3.2 | 8.5 | — | 8.5 | |||||||||||||
Total | $ | 139.7 | $ | — | $ | 205.3 | $ | 141.7 | $ | — | $ | 210.1 | |||||||
——————— | |||||||||||||||||||
-1 | |||||||||||||||||||
Creditors or beneficial interest holders of the VIEs have no recourse to our general credit. Our obligation to the VIEs is limited to the amount of our committed investment. We have not provided material financial or other support that was not contractually required to these VIEs. | |||||||||||||||||||
Issuer and counterparty credit exposure | |||||||||||||||||||
Credit exposure related to issuers and derivatives counterparties is inherent in investments and derivative contracts with positive fair value or asset balances. We manage credit risk through the analysis of the underlying obligors, issuers and transaction structures. We review our debt security portfolio regularly to monitor the performance of obligors and assess the stability of their credit ratings. We also manage credit risk through industry and issuer diversification and asset allocation. Maximum exposure to an issuer or derivative counterparty is defined by quality ratings, with higher quality issuers having larger exposure limits. As of December 31, 2012, we were exposed to the credit concentration risk of one single issuer, Deutsche Bank AG, representing 11.1% of stockholders’ equity other than U.S. government and government agencies backed by the faith and credit of the U.S. government. We monitor credit exposures by actively monitoring dollar limits on transactions with specific counterparties. We have an overall limit on below-investment-grade rated issuer exposure. Additionally, the creditworthiness of counterparties is reviewed periodically. We generally use ISDA Master Agreements which include Credit Support Annexes which include collateral provisions to reduce counterparty credit exposures. Included in fixed maturities are below-investment-grade assets totaling $1,039.6 million and $949.6 million at December 31, 2012 and 2011, respectively. To further mitigate the risk of loss on derivatives, we only enter into contracts in which the counterparty is a financial institution with a rating of A or higher from at least one Nationally Recognized Statistical Rating Organization. | |||||||||||||||||||
As of December 31, 2012, we held derivative assets, net of liabilities, with a fair value of $108.9 million. Derivative credit exposure was diversified with eleven different counterparties. We also had debt securities of these issuers with a fair value of $203.1 million as of December 31, 2012. Our maximum amount of loss due to credit risk with these issuers was $312.0 million as of December 31, 2012. See Note 13 to these financial statements for more information regarding derivatives. | |||||||||||||||||||
10_Financing_Activities
10. Financing Activities | 12 Months Ended | ||||||||
Dec. 31, 2012 | |||||||||
Debt Disclosure [Abstract] | ' | ||||||||
10. Financing Activities | ' | ||||||||
Indebtedness | |||||||||
Indebtedness at Carrying Value: | As of December 31, | ||||||||
($ in millions) | 2012 | 2011 | |||||||
7.15% surplus notes | $ | 126.1 | $ | 174.2 | |||||
7.45% senior unsecured bonds | 252.7 | 252.7 | |||||||
Total indebtedness | $ | 378.8 | $ | 426.9 | |||||
Our 7.15% surplus notes are an obligation of Phoenix Life and are due December 15, 2034. The carrying value of the 2034 notes is net of $0.6 million of unamortized original issue discount. Interest payments are at an annual rate of 7.15%, require the prior approval of the NYDFS and may be made only out of surplus funds which the NYDFS determines to be available for such payments under New York Insurance Law. The notes may be redeemed at the option of Phoenix Life at any time at the “make-whole” redemption price set forth in the offering circular. New York Insurance Law provides that the notes are not part of the legal liabilities of Phoenix Life. On September 21, 2012, Phoenix Life repurchased $48.3 million par amount of its outstanding 7.15% surplus notes, including $0.2 million in original issue discount, for aggregate consideration of $36.2 million. | |||||||||
The Phoenix Companies, Inc. senior unsecured bonds were issued in December 2001 for gross proceeds of $300.0 million (net proceeds of $290.6 million) and mature in January 2032. We pay interest at an annual rate of 7.45%. We may redeem any or all of the bonds at a redemption price equal to 100% of principal plus accrued and unpaid interest to the redemption date. We have repurchased a cumulative amount of $47.3 million of par value of these bonds as of December 31, 2012. During 2012, no repurchases were made. During 2011, we repurchased $0.8 million of par value of these bonds for $0.6 million, resulting in a gain of $0.2 million. | |||||||||
The indenture governing our senior unsecured bonds requires us to file with U.S. Bank, National Association, as trustee, within 15 days after we are required to file with the SEC, copies of the annual reports and of the information, documents and other reports that we are required to file with the SEC pursuant to Section 13 or Section 15(d) of the Exchange Act. In connection with our previously announced restatement of financial statements for the years ended December 31, 2011, 2010 and 2009, the quarters of fiscal year 2011, the first and second quarters of 2012 and the delay in filing our Third Quarter 2012 Form 10-Q, we were unable to file our Third Quarter 2012 Form 10-Q with the SEC and meet the requirement to timely deliver a copy of such report to the trustee. This resulted in a default under the indenture governing the bonds. On November 30, 2012, the trustee issued a notice of default, which stated that the failure of the Company to deliver the Third Quarter 2012 Form 10-Q constituted non-compliance with the reporting covenant in the indenture and that delivery of such notice initiated a 60-day cure period. | |||||||||
On December 12, 2012, we commenced a solicitation of bondholders holding our outstanding bonds as of 5:00 p.m., New York City time on December 11, 2012, seeking a one-time consent to amend the indenture governing the bonds and provide a related waiver. The consent solicitation sought the approval of the amendments and a related waiver from holders representing a majority of the aggregate outstanding principal amount of the bonds, allowing us to extend the date to deliver our Third Quarter 2012 Form 10-Q to the trustee to March 31, 2013 and would waive any and all defaults and events of default related to the delayed filing of our Third Quarter 2012 Form 10-Q that occurred prior to the effectiveness of the amendments. On January 16, 2013, we announced that holders of approximately $166.3 million in aggregate principal amount of the bonds, representing approximately 65% of the approximately $252.7 million in outstanding principal amount of the bonds as of the December 11, 2012 record date, consented to the amendments to the indenture and the related waiver. | |||||||||
See Note 28 to these financial statements for additional information regarding solicitation of bondholders subsequent to year end December 31, 2012. | |||||||||
We have recorded indebtedness at unpaid principal balances of each instrument net of issue discount. The Company or its subsidiaries may, from time to time, purchase its debt securities in the open market subject to considerations including, but not limited to, market conditions, relative valuations, capital allocation and the determination that it is in the best interest of the Company and its stakeholders. | |||||||||
Future minimum annual principal payments on indebtedness as of December 31, 2012 are $252.7 million in 2032 and $126.7 million in 2034. There are no debt maturities in 2013 through 2018. | |||||||||
Interest Expense on Indebtedness, including Amortization of Debt Issuance Costs: | Years Ended December 31, | ||||||||
($ in millions) | 2012 | 2011 | 2010 | ||||||
Surplus notes | $ | 11.6 | $ | 12.5 | $ | 12.5 | |||
Senior unsecured bonds | 19.2 | 19.3 | 19.3 | ||||||
Interest expense on indebtedness | $ | 30.8 | $ | 31.8 | $ | 31.8 |
11_Common_Stock_and_Stock_Repu
11. Common Stock and Stock Repurchase Program | 12 Months Ended |
Dec. 31, 2012 | |
Notes to Financial Statements | ' |
11. Common Stock and Stock Repurchase Program | ' |
We have authorization for the issuance of 50 million shares of our common stock. The Company effected a 1-for-20 reverse stock split of its common stock following market close on August 10, 2012 which resulted in a decrease in the common stock balance with a corresponding increase in the additional paid in capital balance. As part of the reverse stock split, the par value remained at $0.01 per share. No fractional shares were issuable in connection with the reverse stock split. Instead, shareholders were entitled to receive cash in lieu of fractional shares, based on the closing price of the Company’s common stock on August 10, 2012. As a result of the reverse stock split, an aggregate of $2.9 million was payable to shareholders for such fractional shares. | |
Following the reverse stock split, the Company offered an odd lot program that provided post-reverse stock split shareholders who held fewer than 100 shares with a voluntary limited time means to sell their shares, purchase enough additional shares to increase their holding to a round lot of 100 shares or make a charitable donation of their shares. The odd lot program terminated as of October 26, 2012. | |
On September 20, 2012, the Board of Directors (the “Board”) of the Company authorized a program to repurchase up to an aggregate amount of $25,000,000 (not including fees and expenses) of the Company’s outstanding common stock shares. Under the stock repurchase program, purchases may be made from time to time in the open market, in accelerated stock buyback arrangements, in privately negotiated transactions or otherwise, subject to market prices and other conditions. No time limit was placed on the duration of the program, which may be modified, extended or terminated by the Board at any time. The Board also terminated, effective September 20, 2012, the Company’s existing stock repurchase program, which was announced on August 5, 2002. There were no repurchases in 2012. | |
Through December 31, 2012, we have issued 6.4 million common shares (2.8 million shares to our policyholders in exchange for their interests in the mutual company and 3.6 million shares in sales to the public and to settle share-based compensation awards). As of December 31, 2012, we had 5.7 million shares outstanding, net of 0.7 million common shares of treasury stock. Shares issued and outstanding include 0.1 million shares held in a Rabbi Trust to fund equity awards on which recipients are allowed to vote their shares. As of December 31, 2012, we also had 0.5 million common shares reserved for issuance under our stock option plans (0.3 million shares) and our restricted stock unit (“RSU”) plans (0.2 million shares). Please note that these share and RSU amounts for all periods reflect the 1-for-20 reverse stock split, which became effective on August 10, 2012. | |
In 2012, 2011 and 2010, we did not pay any stockholder dividends. | |
State Farm Mutual Automobile Insurance Company (“State Farm”) currently owns of record 5.2% of our outstanding common stock. In 2012, 2011 and 2010, we incurred $2.3 million, $2.4 million and $4.4 million, respectively, as compensation costs for the sale of our insurance and annuity products by entities that were either subsidiaries of State Farm or owned by State Farm agents. | |
12_Separate_Accounts_Death_Ben
12. Separate Accounts, Death Benefits and Other Insurance Benefit Features and Embedded Product Derivatives | 12 Months Ended | ||||||||
Dec. 31, 2012 | |||||||||
Notes to Financial Statements | ' | ||||||||
12. Separate Accounts, Death Benefits and Other Insurance Benefit Features and Embedded Product Derivatives | ' | ||||||||
Separate accounts | |||||||||
Separate account products are those for which a separate investment and liability account is maintained on behalf of the policyholder. Investment objectives for these separate accounts vary by fund account type, as outlined in the applicable fund prospectus or separate account plan of operations. Our separate account products include variable annuities and variable life insurance contracts. The assets supporting these contracts are carried at fair value and are reported as separate account assets with an equivalent amount reported as separate account liabilities. Amounts assessed against the policyholder for mortality, administration and other services are included within revenue in fee income. In 2012 and 2011, there were no gains or losses on transfers of assets from the general account to a separate account. | |||||||||
Assets with fair value and carrying value of $1.8 billion supporting fixed indexed annuities are maintained in accounts that are legally segregated from the other assets of the company, but policyholders do not direct the investment of those assets and the investment performance does not pass through to the policyholders. These assets supporting fixed indexed annuity contracts are reported within the respective investment line items on the consolidated balance sheets. | |||||||||
On May 21, 2012, the employee pension plan surrendered its variable annuity contract with PHLVIC. All assets held within the employee pension plan separate account were subsequently transferred to the direct control of the plan’s trustee. This resulted in a decrease in separate account assets and liabilities of $464.2 million during the year ended December 31, 2012. | |||||||||
Separate Account Investments of Account Balances of Variable Annuity Contracts with Insurance Guarantees: | As of December 31, | ||||||||
($ in millions) | 2012 | 2011 | |||||||
Debt securities | $ | 484.6 | $ | 515.4 | |||||
Equity funds | 1,862.2 | 1,883.3 | |||||||
Other | 69.6 | 81.7 | |||||||
Total | $ | 2,416.4 | $ | 2,480.4 | |||||
Death benefits and other insurance benefit features | |||||||||
Variable annuity guaranteed benefits | |||||||||
We establish policy benefit liabilities for minimum death and income benefit guarantees relating to certain annuity policies as follows: | |||||||||
· | |||||||||
Liabilities associated with the guaranteed minimum death benefit (“GMDB”) are determined by estimating the expected value of death benefits in excess of the projected account balance and recognizing the excess ratably over the expected life of the contract based on total expected assessments. The assumptions used for calculating the liabilities are consistent with those used for amortizing deferred policy acquisition costs. | |||||||||
· | |||||||||
Liabilities associated with the guaranteed minimum income benefit (“GMIB”) are determined by estimating the expected value of the income benefits in excess of the projected account balance at the date of annuitization and recognizing the excess ratably over the accumulation period based on total expected assessments. The assumptions used for calculating such guaranteed income benefit liabilities are generally consistent with those used for amortizing deferred policy acquisition costs. | |||||||||
For variable annuities with GMDB and GMIB, reserves for these guarantees are calculated and recorded in policy liabilities and accruals on our consolidated balance sheets. Changes in the liability are recorded in policy benefits, excluding policyholder dividends, on our consolidated statements of comprehensive income. We regularly evaluate estimates used and adjust the additional liability balances, with a related charge or credit to benefit expense if actual experience or other evidence suggests that earlier assumptions should be revised. | |||||||||
Changes in Guaranteed Insurance Benefit Liability Balances: | Year Ended | ||||||||
($ in millions) | December 31, 2012 | ||||||||
Annuity | Annuity | ||||||||
GMDB | GMIB | ||||||||
Liability balance as of January 1, 2012 | $ | 16.4 | $ | 17.8 | |||||
Incurred | 0.6 | 4.0 | |||||||
Paid | -1.1 | — | |||||||
Assumption unlocking | — | -0.2 | |||||||
Liability balance as of December 31, 2012 | $ | 15.9 | $ | 21.6 | |||||
Changes in Guaranteed Insurance Benefit Liability Balances: | Year Ended | ||||||||
($ in millions) | December 31, 2011 | ||||||||
As restated and amended | |||||||||
Annuity | Annuity | ||||||||
GMDB | GMIB | ||||||||
Liability balance as of January 1, 2011 | $ | 17.7 | $ | 18.1 | |||||
Incurred | 0.8 | -0.7 | |||||||
Paid | -2.1 | — | |||||||
Assumption unlocking | — | 0.4 | |||||||
Liability balance as of December 31, 2011 | $ | 16.4 | $ | 17.8 | |||||
Changes in Guaranteed Insurance Benefit Liability Balances: | Year Ended | ||||||||
($ in millions) | December 31, 2010 | ||||||||
As restated and amended | |||||||||
Annuity | Annuity | ||||||||
GMDB | GMIB | ||||||||
Liability balance as of January 1, 2010 | $ | 19.1 | $ | 16.3 | |||||
Incurred | 3.7 | 2.4 | |||||||
Paid | -5.1 | — | |||||||
Assumption unlocking | — | -0.6 | |||||||
Liability balance as of December 31, 2010 | $ | 17.7 | $ | 18.1 | |||||
For those guarantees of benefits that are payable in the event of death, the net amount at risk (“NAR”) is generally defined as the benefit payable in excess of the current account balance at our balance sheet date. We have entered into reinsurance agreements to reduce the net amount of risk on certain death benefits. Following are the major types of death benefits currently in force: | |||||||||
GMDB and GMIB Benefits by Type: | NAR | Average | |||||||
($ in millions) | Account | after | Attained Age | ||||||
Value | Reinsurance | of Annuitant | |||||||
2012 | |||||||||
GMDB return of premium | $ | 799.2 | $ | 6.4 | 62 | ||||
GMDB step up | 1,957.2 | 25.6 | 63 | ||||||
GMDB earnings enhancement benefit (“EEB”) | 37.5 | 0.1 | 63 | ||||||
GMDB greater of annual step up and roll up | 26.7 | 7.4 | 67 | ||||||
Total GMDB at December 31, 2012 | 2,820.6 | $ | 39.5 | ||||||
Less: General account value with GMDB | 420.6 | ||||||||
Subtotal separate account liabilities with GMDB | 2,400.0 | ||||||||
Separate account liabilities without GMDB | 916.5 | ||||||||
Total separate account liabilities | $ | 3,316.5 | |||||||
GMIB(1) at December 31, 2012 | $ | 416.8 | 64 | ||||||
2011 as restated and amended | |||||||||
GMDB return of premium | $ | 839.6 | $ | 22.5 | 61 | ||||
GMDB step up | 1,999.5 | 99.1 | 62 | ||||||
GMDB earnings enhancement benefit (“EEB”) | 39.8 | 0.4 | 62 | ||||||
GMDB greater of annual step up and roll up | 27.1 | 8.8 | 66 | ||||||
Total GMDB at December 31, 2011 | 2,906.0 | $ | 130.8 | ||||||
Less: General account value with GMDB | 444.1 | ||||||||
Subtotal separate account liabilities with GMDB | 2,461.9 | ||||||||
Separate account liabilities without GMDB | 1,355.0 | ||||||||
Total separate account liabilities | $ | 3,816.9 | |||||||
GMIB(1) at December 31, 2011 | $ | 442.1 | 63 | ||||||
——————— | |||||||||
-1 | |||||||||
Policies with a GMIB also have a GMDB. The NAR for each benefit is shown in the table above, however these benefits are not additive. When a policy terminates due to death, any NAR related or GMIB is released. Similarly, when a policy goes into benefit status on a GMIB, its GMDB NAR is released. | |||||||||
Return of Premium: The death benefit is the greater of current account value or premiums paid (less any adjusted partial withdrawals). | |||||||||
Step Up: The death benefit is the greater of current account value, premiums paid (less any adjusted partial withdrawals) or the annual step up amount prior to the oldest original owner attaining a certain age. On and after the oldest original owner attains that age, the death benefit is the greater of current account value or the death benefit at the end of the contract year prior to the oldest original owner’s attaining that age plus premium payments (less any adjusted partial withdrawals) made since that date. | |||||||||
Earnings Enhancement Benefit: The death benefit is the greater of the premiums paid (less any adjusted partial withdrawals) or the current account value plus the EEB. The EEB is an additional amount designed to reduce the impact of taxes associated with distributing contract gains upon death. | |||||||||
Greater of Annual Step Up and Annual Roll Up: The death benefit is the greatest of premium payments (less any adjusted partial withdrawals), the annual step up amount, the annual roll up amount or the current account value prior to the oldest original owner attaining age 81. On and after the oldest original owner attained age 81, the death benefit is the greater of current account value or the death benefit at the end of the contract year prior to the oldest original owner’s attained age of 81 plus premium payments (less any adjusted partial withdrawals) made since that date. | |||||||||
GMIB: The benefit is a series of monthly fixed annuity payments paid upon election of the rider. The monthly benefit is based on the greater of the sum of premiums (less any adjusted partial withdrawals) accumulated at an effective annual rate on the exercise date or 200% of the premiums paid (less any adjusted partial withdrawals) and a set of annuity payment rates that vary by benefit type and election age. | |||||||||
Fixed indexed annuity guaranteed benefits | |||||||||
Many of our fixed indexed annuities contain guaranteed minimum withdrawal and death benefits. | |||||||||
Liabilities associated with the GMWB for the fixed indexed annuities differ from those contained on variable annuities in that the GMWB feature and the underlying contract, exclusive of the equity indexed crediting option, are fixed income instruments. These liabilities are determined by estimating the expected value of the withdrawal benefits in excess of the projected account balance at the date of election and recognizing the excess ratably over the accumulation period based on total expected assessments. The assumptions used for calculating such guaranteed withdrawal benefit liabilities are consistent with those used for amortizing deferred policy acquisition costs. Some of these riders also contain a GMDB or chronic care benefit in addition to the withdrawal benefits. | |||||||||
The GMWB, GMDB and chronic care guarantees are recorded in policy liabilities and accruals on our consolidated balance sheets. Changes in the liability are recorded in policy benefits, excluding policyholder dividends, on our consolidated statements of comprehensive income. We regularly evaluate estimates used and adjust the additional liability balances, with a related charge or credit to benefit expense if actual experience or other evidence suggests that earlier assumptions should be revised. | |||||||||
Changes in Guaranteed Liability Balances: | Fixed Indexed Annuity | ||||||||
($ in millions) | GMWB & GMDB | ||||||||
Year Ended December 31, | |||||||||
2012 | 2011 | 2010 | |||||||
As restated | As restated | ||||||||
and amended | and amended | ||||||||
Liability balance, beginning of period | $ | 5.6 | $ | 0.5 | $ | — | |||
Incurred | 40.1 | 5.1 | 0.5 | ||||||
Paid | — | — | — | ||||||
Liability balance, end of period | $ | 45.7 | $ | 5.6 | $ | 0.5 | |||
Universal life | |||||||||
Liabilities for universal life contracts, some of which contain secondary guarantees, are generally determined by estimating the expected value of benefits and expenses when claims are triggered and recognizing those benefits and expenses over the accumulation period based on total expected assessments. The assumptions used in estimating these liabilities are consistent with those used for amortizing deferred policy acquisition costs. The universal life block of business has experience which produces profits in earlier periods followed by losses in later periods for which a liability is required to be held in addition to the policy liabilities recorded. These additional liabilities as of December 31, 2012 and 2011 are 308.4 million and 200.5 million, respectively. Associated expenses recognized in earnings are $91.2 million, $89.0 million, and $35.1 million for the years ended December 31, 2012, 2011, and 2010, respectively. | |||||||||
Changes in Guaranteed Liability Balances: | Universal Life | ||||||||
($ in millions) | Year Ended December 31, | ||||||||
2012 | 2011 | 2010 | |||||||
As restated | As restated | ||||||||
and amended | and amended | ||||||||
Liability balance, beginning of period | $ | 115.9 | $ | 104.5 | $ | 77.4 | |||
Incurred | 30.8 | 34.6 | 39.4 | ||||||
Paid | -9.5 | -6.2 | -20.2 | ||||||
Assumption unlocking | -4.5 | -17 | 7.9 | ||||||
Liability balance, end of period | $ | 132.7 | $ | 115.9 | $ | 104.5 | |||
Embedded derivatives | |||||||||
Variable annuity embedded derivatives | |||||||||
Certain separate account variable products contain a GMWB, GMAB and/or COMBO rider. These features are accounted for as embedded derivatives as described below. | |||||||||
Non-Insurance Guaranteed Product Features: | Average | ||||||||
($ in millions) | Attained | ||||||||
Account | Age of | ||||||||
Value | Annuitant | ||||||||
2012 | |||||||||
GMWB | $ | 578.4 | 63 | ||||||
GMAB | 390.6 | 58 | |||||||
COMBO | 8.5 | 62 | |||||||
Total at December 31, 2012 | $ | 977.5 | |||||||
2011 as amended and restated | |||||||||
GMWB | $ | 572.5 | 62 | ||||||
GMAB | 385.6 | 57 | |||||||
COMBO | 10.1 | 61 | |||||||
Total at December 31, 2011 | $ | 968.2 | |||||||
The GMWB rider guarantees the contract owner a minimum amount of withdrawals and benefit payments over time, regardless of the investment performance of the contract, subject to an annual limit. Optional resets are available. In addition, these contracts have a feature that allows the contract owner to receive the guaranteed annual withdrawal amount for as long as they are alive. | |||||||||
The GMAB rider provides the contract owner with a minimum accumulation of the contract owner’s purchase payments deposited within a specific time period, adjusted for withdrawals, after a specified amount of time determined at the time of issuance of the variable annuity contract. | |||||||||
The COMBO rider includes the GMAB and GMWB riders as well as the GMDB rider at the contract owner’s option. | |||||||||
The GMWB, GMAB and COMBO represent embedded derivative liabilities in the variable annuity contracts that are required to be reported separately from the host variable annuity contract. These liabilities are recorded at fair value within policyholder deposit funds on the consolidated balance sheets with changes in fair value recorded in realized investment gains on the consolidated statements of comprehensive income. The fair value of the GMWB, GMAB and COMBO obligation is calculated based on actuarial and capital market assumptions related to the projected cash flows, including benefits and related contract charges, over the lives of the contracts, incorporating expectations concerning policyholder behavior. As markets change, contracts mature and actual policyholder behavior emerges, these assumptions are continually evaluated and may from time to time be adjusted. Embedded derivative liabilities for GMWB, GMAB and COMBO are shown in the table below. | |||||||||
Variable Annuity Embedded Derivative Liabilities: | As of December 31, | ||||||||
($ in millions) | 2012 | 2011 | |||||||
As restated | |||||||||
and amended | |||||||||
GMWB | $ | 15.3 | $ | 23.6 | |||||
GMAB | 14.6 | 25.3 | |||||||
COMBO | -0.3 | -0.3 | |||||||
Total variable annuity embedded derivative liabilities | $ | 29.6 | $ | 48.6 | |||||
There were no benefit payments made for the GMWB and GMAB during 2012 and 2011. We have established a risk management strategy under which we hedge our GMAB, GMWB and COMBO exposure using equity index options, equity index futures, equity index variance swaps, interest rate swaps and swaptions. | |||||||||
Fixed indexed annuity embedded derivatives | |||||||||
Fixed indexed annuities may also contain a variety of index-crediting options: policy credits that are calculated based on the performance of an outside equity market or other index over a specified term. The index options represent embedded derivative liabilities that are required to be reported separately from the host contract. These index options are accounted for at fair value within policyholder deposits within the consolidated balance sheets with changes in fair value recorded in realized investment gains, in the consolidated statements of comprehensive income. The fair value of these index options is calculated using the budget method as described in Note 14 to these financial statements. Several additional inputs reflect our internally developed assumptions related to lapse rates and policyholder behavior. The fair value of these embedded derivatives was $51.2 million and $35.9 million as of December 31, 2012 and 2011, respectively. In order to manage the risk associated with these equity indexed-crediting features, we hedge using equity index options as described in Note 13 to these financial statements. | |||||||||
Embedded derivatives realized gains and losses | |||||||||
Changes in the fair value of embedded derivatives associated with variable annuity and fixed indexed annuity contracts are recorded as realized investment gains and losses within the consolidated statements of comprehensive income. Embedded derivatives gains and (losses) recognized in earnings are $12.1 million, $(34.4) million and $12.3 million for the years ended December 31, 2012, 2011 and 2010, respectively. |
13_Derivative_Instruments
13. Derivative Instruments | 12 Months Ended | ||||||||||
Dec. 31, 2012 | |||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ' | ||||||||||
13. Derivative Instruments | ' | ||||||||||
Derivative instruments | |||||||||||
We use derivative financial instruments, including options, futures and swaps as a means of hedging exposure to interest rate, equity price change, equity volatility and foreign currency risk. This includes our surplus hedge which utilizes futures and options to hedge against declines in equity markets and the resulting statutory capital and surplus impact. We also use derivative instruments to economically hedge our exposure on living benefits offered on certain of our variable annuity products as well as index credits on our fixed indexed annuity products. | |||||||||||
The Company seeks to enter into over-the-counter (“OTC”) derivative transactions pursuant to master agreements that provide for a netting of payments and receipts by counterparty. As of December 31, 2012 and 2011, $9.2 million and $8.0 million, respectively, of cash and cash equivalents were held as collateral by a third party related to our derivative transactions. | |||||||||||
Our derivatives do not qualify for hedge accounting. We do not designate the purchased derivatives related to variable annuity living benefits or fixed indexed annuity index credits as hedges for accounting purposes. | |||||||||||
Derivative Instruments: | Fair Value as of | ||||||||||
($ in millions) | December 31, 2012 | ||||||||||
Notional | |||||||||||
Maturity | Amount | Assets | Liabilities(1) | ||||||||
Interest rate swaps | 2016-2027 | $ | 180.0 | $ | 15.5 | $ | 7.7 | ||||
Variance swaps | 2015-2017 | 0.9 | — | 4.4 | |||||||
Swaptions | 2024 | 25.0 | — | — | |||||||
Put options | 2015-2022 | 406.0 | 72.7 | — | |||||||
Call options(2) | 2013-2017 | 1,328.4 | 53.3 | 33.6 | |||||||
Cross currency swaps | 2016 | 10.0 | — | 0.1 | |||||||
Equity futures | 2013 | 184.7 | 15.9 | — | |||||||
Total derivative instruments | $ | 2,135.0 | $ | 157.4 | $ | 45.8 | |||||
——————— | |||||||||||
-1 | |||||||||||
Derivative liabilities are included in other liabilities on the consolidated balance sheets. | |||||||||||
-2 | |||||||||||
Includes a contingent receivable of $2.7 million. | |||||||||||
Derivative Instruments: | Fair Value as of | ||||||||||
($ in millions) | December 31, 2011 | ||||||||||
As restated and amended | |||||||||||
Notional | |||||||||||
Maturity | Amount | Assets | Liabilities(1) | ||||||||
Interest rate swaps | 2017-2026 | $ | 131.0 | $ | 13.7 | $ | 5.2 | ||||
Variance swaps | 2015-2017 | 0.9 | 2.8 | — | |||||||
Swaptions | 2024 | 25.0 | 0.2 | — | |||||||
Put options | 2015-2022 | 406.0 | 95.4 | — | |||||||
Call options(2) | 2012-2016 | 700.4 | 31.4 | 19.0 | |||||||
Cross currency swaps | 2012-2016 | 15.0 | 0.2 | — | |||||||
Equity futures | 2012 | 70.0 | 18.5 | — | |||||||
Total derivative instruments | $ | 1,348.3 | $ | 162.2 | $ | 24.2 | |||||
——————— | |||||||||||
-1 | |||||||||||
Derivative liabilities are included in other liabilities on the consolidated balance sheets. | |||||||||||
-2 | |||||||||||
Includes a contingent receivable of $3.4 million. | |||||||||||
Derivative Instrument Gains (Losses) Recognized in | Years Ended December 31, | ||||||||||
Realized Investment Gains (Losses): | 2012 | 2011 | 2010 | ||||||||
($ in millions) | As restated | As restated | |||||||||
and amended | and amended | ||||||||||
Derivative instruments by type | |||||||||||
Interest rate swaps | $ | -0.9 | $ | 10.3 | $ | — | |||||
Variance swaps | -7.9 | 3.5 | -0.6 | ||||||||
Swaptions | -0.2 | -1.3 | 1.7 | ||||||||
Put options | -22 | 19.8 | -4.1 | ||||||||
Call options | 0.1 | -11.9 | 11.2 | ||||||||
Equity futures | -19.4 | -6.2 | -35.9 | ||||||||
Cross currency swaps | -0.1 | 0.2 | 1.1 | ||||||||
Embedded derivatives | 12.1 | -34.4 | 12.3 | ||||||||
Total derivative instrument losses recognized in realized investment gains (losses) | $ | -38.3 | $ | -20 | $ | -14.3 | |||||
Interest Rate Swaps | |||||||||||
We maintain an overall interest rate risk management strategy that primarily incorporates the use of interest rate swaps as hedges of our exposure to changes in interest rates. Our exposure to changes in interest rates primarily results from our commitments to fund interest-sensitive insurance liabilities, as well as from our significant holdings of fixed rate financial instruments. We use interest rate swaps that effectively convert variable rate cash flows to fixed cash flows in order to hedge the interest rate risks associated with guaranteed minimum living benefit (GMAB/GMWB) rider liabilities. | |||||||||||
Interest Rate Options | |||||||||||
We use interest rate options, such as swaptions, to hedge against market risks to assets or liabilities from substantial changes in interest rates. An interest rate swaption gives us the right but not the obligation to enter into an underlying swap. Swaptions are options on interest rate swaps. All of our swaption contracts are receiver swaptions, which give us the right to enter into a swap where we will receive the agreed-upon fixed rate and pay the floating rate. If the market conditions are favorable and the swap is needed to continue hedging our in force liability business, we will exercise the swaption and enter into a fixed rate swap. If a swaption contract is not exercised by its option maturity date, it expires with no value. | |||||||||||
Exchange Traded Future Contracts | |||||||||||
We use equity index futures to hedge the market risks from changes in the value of equity indices, such as S&P 500, associated with guaranteed minimum living benefit (GMAB/GMWB) rider liabilities. Positions are short-dated, exchange-traded futures with maturities of three months. | |||||||||||
Equity Index Options | |||||||||||
We use equity indexed options to hedge against market risks from changes in equity markets, volatility and interest rates. | |||||||||||
An equity index option affords us the right to make or receive payments based on a specified future level of an equity market index. We may use exchange-trade or OTC options. | |||||||||||
Generally, we have used a combination of equity index futures, interest rate swaps, variance swaps and long-dated put options to hedge our GMAB and GMWB liabilities and equity index call options to hedge our indexed annuity option liabilities. | |||||||||||
Cross Currency Swaps | |||||||||||
We use cross currency swaps to hedge against market risks from changes in foreign currency exchange rates. Currency swaps are used to swap bond asset cash flows denominated in a foreign currency back to U.S. dollars. Under foreign currency swaps, we agree with another party (referred to as the counterparty) to exchange principal and periodic interest payments denominated in foreign currency for payments in U.S. dollars. | |||||||||||
Contingent features | |||||||||||
Derivative counterparty agreements may contain certain provisions that require our insurance companies’ financial strength rating to be above a certain threshold. If our financial strength ratings were to fall below a specified rating threshold, certain derivative counterparties could request immediate payment or demand immediate and ongoing full collateralization on derivative instruments in net liability positions, or trigger a termination of existing derivatives and/or future derivative transactions. | |||||||||||
In certain derivative counterparty agreements, our financial strength ratings are below the specified threshold levels. However, the Company held no derivative instruments as of December 31, 2012 in a net aggregate liability position payable to any counterparty (i.e., such derivative instruments have fair values in a net asset position payable to the Company if such holdings were liquidated). |
14_Fair_Value_of_Financial_Ins
14. Fair Value of Financial Instruments | 12 Months Ended | |||||||||||||||||||||||
Dec. 31, 2012 | ||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | ' | |||||||||||||||||||||||
14. Fair Value of Financial Instruments | ' | |||||||||||||||||||||||
ASC 820-10 defines and establishes the framework for measuring fair value. The framework is based on inputs that are used in the valuation and a fair value hierarchy based on the quality of those inputs. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. | ||||||||||||||||||||||||
A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. The input levels are defined as follows: | ||||||||||||||||||||||||
· | ||||||||||||||||||||||||
Level 1 – inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 1 securities include highly liquid government bonds and exchange-traded equities. | ||||||||||||||||||||||||
· | ||||||||||||||||||||||||
Level 2 – inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. Examples of such instruments include government-backed mortgage products, certain collateralized mortgage and debt obligations and certain high-yield debt securities. | ||||||||||||||||||||||||
· | ||||||||||||||||||||||||
Level 3 – inputs to the valuation methodology are unobservable and significant to the fair value measurement. Unobservable inputs reflect management’s own assumptions about inputs in which market participants would use in pricing these types of assets or liabilities. Level 3 financial instruments include values which are determined using pricing models and third-party evaluation. Additionally, the determination of some fair value estimates utilizes significant management judgments or best estimates. | ||||||||||||||||||||||||
Investments for which fair value is based upon unadjusted quoted market prices are reported as Level 1. The number of quotes the issuer obtains per instrument will vary depending on the security type and availability of pricing data from pricing vendors. The Company has defined a pricing hierarchy among pricing vendors to determine ultimate value used and also reviews significant discrepancies among pricing vendors to determine final value used. Prices from pricing services are not adjusted, but the Company may obtain a broker quote or use an internal model to price a security if it believes vendor prices do not reflect fair value. We receive quoted market prices from independent third party, nationally recognized pricing vendors (“pricing vendors”). When quoted prices are not available, we use these pricing vendors to give an estimated fair value. If quoted prices, or an estimated price from our pricing vendors are not available or we determine that the price is based on disorderly transactions or in inactive markets, fair value is based upon internally developed models or obtained from an independent third-party broker. We primarily use market-based or independently sourced market parameters, including interest rate yield curves, option volatilities and currency rates. Valuation adjustments may be made to ensure that financial instruments are recorded at fair value. These adjustments include amounts to reflect counterparty credit quality, our own creditworthiness, liquidity and unobservable parameters that are applied consistently over time. | ||||||||||||||||||||||||
Management is responsible for the fair value of investments and the methodologies and assumptions used to estimate fair value. The fair value process is evaluated quarterly by the Pricing Committee, which is comprised of the Chief Investment Officer, Chief Accounting Officer and the Head of Investment Accounting. The purpose of the committee is to ensure the Company follows objective and reliable valuation practices, as well as approving changes to valuation methodologies and pricing sources. Fair value is based upon quoted market prices, where available. If listed prices or quotes are not available, fair value is based upon internally developed models that use primarily market-based or independently sourced market parameters, including interest rate yield curves, option volatilities and currency rates. Valuation adjustments may be made to ensure that financial instruments are recorded at fair value. These adjustments include amounts to reflect counterparty credit quality, our own creditworthiness, liquidity and unobservable parameters that are applied consistently over time. Using professional judgment and experience, we evaluate and weigh the relevance and significance of all readily available market information to determine the best estimate of fair value. | ||||||||||||||||||||||||
The fair values of Level 2 investments are determined by management after considering prices from our pricing vendors. Fair values for fixed maturity debt securities are primarily based on yield curve analysis along with ratings and spread data. Other inputs may be considered for fair value calculations including published indexed data, sector specific performance, comparable price sources and similar traded securities. Management reviews all Level 2 and Level 3 market prices on a quarterly basis. | ||||||||||||||||||||||||
The following is a description of our valuation methodologies for assets and liabilities measured at fair value. Such valuation methodologies were applied to all of the assets and liabilities carried at fair value in each respective classification. | ||||||||||||||||||||||||
Available-for-sale debt securities | ||||||||||||||||||||||||
We use pricing vendors to estimate fair value for the majority of our public available-for-sale debt securities. The pricing vendors’ estimates are based on market data and use pricing models that vary by asset class and incorporate available trade, bid and other market information. The methodologies used by these vendors are reviewed and understood by management through discussion with and information provided by these vendors. The Company assesses the reasonableness of individual security values received from valuation service providers through various analytical techniques. Management also assesses whether the assumptions used appear reasonable and consistent with the objective of determining fair value. When our pricing vendors are unable to obtain evaluations based on market data, fair value is determined by obtaining a direct broker quote. Management reviews these broker quotes and valuation techniques to determine whether they are appropriate and consistently applied. Broker quotes are evaluated based on the Company’s assessment of the broker’s knowledge of, and history in trading, the security and the Company’s understanding of inputs used to derive the broker quote. Management also assesses reasonableness of individual security values similar the vendor pricing review noted above. | ||||||||||||||||||||||||
For our private placement investments, we estimated fair value using internal models. Private placement securities are generally valued using a matrix pricing approach which categorizes these securities into groupings using remaining average life and credit rating as the two criteria to determine a grouping. The Company obtains current credit spread information from private placement dealers based on the criteria described and adds that spread information to treasury rates corresponding to the life of each security to determine a discount rate for pricing. A small number of private placement securities are internally valued using models or analyst judgment. Fair values determined internally are also subject to management review to ensure that valuation models and inputs appear reasonable. | ||||||||||||||||||||||||
U.S. Government and Agency Securities | ||||||||||||||||||||||||
We value public U.S. government and agency debt by obtaining fair value estimates from our pricing vendors. For our private placement government and agency debt, our fair value is based on internal models using a either a discounted cash flow or spread matrix which incorporates treasury yields, market spreads and average life calculations. For short-term assets we equate fair value to amortized cost due to their relatively short duration and limited exposure to credit risk. | ||||||||||||||||||||||||
State & Political Subdivisions | ||||||||||||||||||||||||
Public state & political subdivision debt is valued by obtaining fair value estimates from our pricing vendors. For our private placement debt securities, our fair value is based on internal models using a either a discounted cash flow or spread matrix which incorporates treasury yields, market spreads and average life calculations. | ||||||||||||||||||||||||
Foreign Government | ||||||||||||||||||||||||
We obtain fair value estimates from our pricing vendor to value foreign government debt. | ||||||||||||||||||||||||
Corporate Bonds | ||||||||||||||||||||||||
For the majority of our public corporate debt, we obtain fair value estimates from our pricing vendors. For public corporate debt in which we cannot obtain fair value estimates from our pricing vendors, we receive a direct quote from a broker. In most cases, we will obtain a direct broker quote from the broker that facilitated the deal. For our private placement debt securities, our fair value is based on internal models using either a discounted cash flow or spread matrix which incorporates treasury yields, market spreads and average life calculations. For private fixed maturities, fair value is determined using a discounted cash flow model, which utilizes a discount rate based upon the average of spread surveys collected from private market intermediaries who are active in both primary and secondary transactions and takes into account, among other factors, the credit quality and industry sector of the issuer and the reduced liquidity associated with private placements. In determining the fair value of certain fixed maturity securities, the discounted cash flow model may also use unobservable inputs, which reflect the Company’s own assumptions about the inputs market participants would use in pricing the security. | ||||||||||||||||||||||||
RMBS, CMBS, CDO/CLO and Other Asset-Backed Securities | ||||||||||||||||||||||||
For structured securities, the majority of the fair value estimates are provided by our pricing vendors. When a fair value estimate is not available from the pricing vendors, we estimate fair value using direct broker quotes or internal models which use a discounted cash flow technique. These models consider the best estimate of cash flows until maturity to determine our ability to collect principal and interest and compare this to the anticipated cash flows when the security was purchased. In addition, management judgment is used to assess the probability of collecting all amounts contractually due to us. After consideration is given to the available estimates relevant to assessing the collectibility, including historical events, current conditions and reasonable forecasts, an estimate of future cash flows is determined. This includes evaluating the remaining payment terms, prepayment speeds, the underlying collateral, expected defaults using current default data and the financial condition of the issuer. Other factors considered are composite credit ratings, industry forecast, analyst reports and other relevant market data, similar to those the Company believes market participants would use. | ||||||||||||||||||||||||
Available-for-sale equity securities | ||||||||||||||||||||||||
Private Equity Investments | ||||||||||||||||||||||||
The fair value of non-public private equity is estimated using the valuation of the lead investor (“sponsor value”), typically a general partner of an investment in a limited partnership in which we invest. The Sponsors, or lead investors/underwriters of these investments, account for them on an equity basis. The Company will then obtain securities fair value from these sponsors to infer the appropriate fair value for its holdings in the same or similar investment. If we cannot determine a price using the sponsor value, we would estimate the fair value using management’s professional judgment. Management evaluates many inputs including, but not limited to; current operating performance, future expectations of the investment, industry valuations of comparable public companies and changes in market outlook and third-party financing environment over time. Financial information for these investments is reported on a three-month delay due to the timing of financial statements as of the current reporting period. | ||||||||||||||||||||||||
Public Equity | ||||||||||||||||||||||||
Our publicly held equity securities are generally obtained through the initial public offering of privately-held equity investments and are reported at the estimated fair value determined based on quoted prices in active markets. To the extent these securities have readily determinable exchange based prices, the securities are categorized as Level 1 of our hierarchy. If management determines there are liquidity concerns or exchange based information for the specific securities in our portfolio is not available, the securities are categorized as Level 2. In addition, management will consistently monitor these holdings and prices will be modified for any pertinent and/or significant events that would result in a valuation adjustment, including an analysis for potential credit-related events or impairments. | ||||||||||||||||||||||||
Limited partnerships and other investments | ||||||||||||||||||||||||
Our limited partnerships are accounted for using equity method. We carry these investments on the consolidated balance sheets at the capital value we obtain from the financial statement we received from the general partner. Typically, our carrying value is based on a financial statement one quarter in arrears due to timing of receipt of financial statements. These financial statements are generally audited annually. Generally the information received is deemed an appropriate approximation of the fair value of these fund investments and no adjustments are made to the financial statements received. Management also has open communication with each fund manager and generally views the information reported from the underlying funds as the best information available to record its investments. | ||||||||||||||||||||||||
For the limited partnerships in which we consolidate the entity, we hold private debt and equity securities. All consolidated investments are valued using current period financial statements we receive from the general partner. | ||||||||||||||||||||||||
Included in the other investments balance is the net investment value of life settlement contracts which is determined on a discounted cash flow basis, which utilizes current life expectancy assumptions, as well as leveraged lease investments which represent the net investment in leveraged aircraft leases. The leveraged lease aircraft investments are accounted for using equity method. The investments are carried at the capital value obtained from financial statements we received from a third party servicer. | ||||||||||||||||||||||||
Separate account assets | ||||||||||||||||||||||||
Our separate account assets consist of mutual funds that are frequently traded. Since 2003, investments owned by the Phoenix Companies, Inc. Employee Pension Plan (the “Plan”) Trust were sold to PHLVIC and the investments converted to ownership by the Trust to the Employee Pension Separate Account (“EPP SA”). The Plan’s Trust purchased a group flexible premium variable accumulation deferred annuity contract. As of May 21, 2012, the Plan surrendered the EPP SA contract for full value and the Plan’s underlying investments are no longer held in the separate account. Certain investments related to fixed income, equities, and foreign securities were transferred to Mercer Trust Company for investment management purposes in a group trust investment arrangement. The remaining investments continued with their respective investment managers. These securities are valued using the market approach in which unadjusted market quotes are used. We include these securities in Level 1of our hierarchy. | ||||||||||||||||||||||||
Derivatives | ||||||||||||||||||||||||
Exchange-traded derivatives are valued using quoted prices and are classified within Level 1 of the valuation hierarchy. However, few classes of derivative contracts are listed on an exchange. Therefore, the majority of our derivative positions are OTC derivative financial instruments, valued using third-party vendor derivative valuation systems that use as their basis readily observable market parameters, such as swap rates and volatility assumptions. These positions are classified within Level 2 of the valuation hierarchy. Such OTC derivatives include vanilla interest rate swaps, equity index options, swaptions, variance swaps and cross currency swaps. Nevertheless, we review and validate the resulting fair values against those provided to us monthly by the derivative counterparties for reasonableness. | ||||||||||||||||||||||||
Fair values for OTC derivative financial instruments, mostly options and swaps, represent the present value of amounts estimated to be received from or paid to a marketplace participant in exchange of these instruments (i.e., the amount we would expect to receive in a derivative asset assignment or would expect to pay to have a derivative liability assumed). These derivatives are valued using third-party derivative valuation models which take into account the net present value of estimated future cash flows and capital market assumptions which are derived from directly observable prices from other OTC trades and exchange-traded derivatives. Such assumptions include swap rates and swaption volatility obtained from Bloomberg, as well as equity index volatility and dividend yields provided by OTC derivative dealers. | ||||||||||||||||||||||||
The fair value of OTC derivative financial instruments is also adjusted for the credit risk of the counterparty in cases in which there are no collateral offsets. To estimate the impact on fair value of a market participant’s view of counterparty non-performance risk we use a credit default swap (“CDS”)-based approach in measuring this counterparty non-performance risk by looking at the cost of obtaining credit protection in the CDS market for the aggregate fair value exposure amount over the remaining life of derivative contracts, given the counterparty’s rating. The resulting upfront CDS premium, calculated using Bloomberg analytics, serves as a reasonable estimate of the default provision for the non-performance risk or counterparty valuation adjustment to the fair valuation of non-collateralized OTC derivative financial instruments. | ||||||||||||||||||||||||
Certain new and/or complex instruments may have immature or limited markets or require more sophistication in derivative valuation methodology. As a result, the pricing models used for valuation of these instruments often incorporate significant estimates and assumptions that market participants would use in pricing the instrument, which may impact the results of operations reported in the consolidated financial statements. Hence, instead of valuing these instruments using third-party vendor valuation systems, we rely on the fair market valuations reported to us monthly by the derivative counterparties. Fair values for OTC derivatives are verified using observed estimates about the costs of hedging the risk and other trades in the market. As the markets for these products develop, we continually refine our pricing models to correlate more closely to the market risk of these instruments. | ||||||||||||||||||||||||
Valuation of embedded derivatives | ||||||||||||||||||||||||
We make guarantees on certain variable annuity contracts, including GMAB, GMWB and COMBO as well as provide credits based on the performance of certain indices (“index credits”) on our fixed indexed annuity contracts that meet the definition of an embedded derivative. The GMAB, GMWB and COMBO embedded derivative liabilities associated with our variable annuity contracts are accounted for at fair value using a risk neutral stochastic valuation methodology with changes in fair value recorded in realized investment gains. The inputs to our fair value methodology include estimates derived from the asset derivatives market, including the equity volatility and the swap curve. Several additional inputs are not obtained from independent sources, but instead reflect our internally developed assumptions related to mortality rates, lapse rates and policyholder behavior. The fair value of the embedded derivative liabilities associated with the index credits on our fixed indexed annuity contracts is calculated using the budget method with changes in fair value recorded in realized investment gains. Under the budget method, the value of the initial index option is based on the fair value of the option purchased to hedge the index. The value of the index credits in future years is estimated to be the budgeted amount. Budgeted amounts are estimated based on available investment income using assumed investment returns and projected liability values. Several additional inputs reflect our internally developed assumptions related to lapse rates and policyholder behavior. As there are significant unobservable inputs included in our fair value methodology for these embedded derivative liabilities, we consider the above-described methodology as a whole to be Level 3 within the fair value hierarchy. | ||||||||||||||||||||||||
Our fair value calculation of embedded derivative liabilities includes a credit standing adjustment (the “CSA”). The CSA represents the adjustment that market participants would make to reflect the risk that guaranteed benefit obligations may not be fulfilled (“non-performance risk”). We estimate our CSA using the credit spread (based on publicly available credit spread indices) for financial services companies similar to the Company’s life insurance subsidiaries. The CSA is updated every quarter and, therefore, the fair value will change with the passage of time even in the absence of any other changes that would affect the valuation. | ||||||||||||||||||||||||
The following tables present the financial instruments carried at fair value on a recurring basis by ASC 820-10 valuation hierarchy (as described above). There were no financial instruments carried at fair value on a non-recurring basis as of December 31, 2012 and 2011, respectively. | ||||||||||||||||||||||||
Fair Values of Financial Instruments by Level: | As of December 31, 2012 | |||||||||||||||||||||||
($ in millions) | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
Assets | ||||||||||||||||||||||||
Available-for-sale debt securities | ||||||||||||||||||||||||
U.S. government and agency | $ | 699.6 | $ | 115.2 | $ | 296.7 | -1 | $ | 1,111.5 | |||||||||||||||
State and political subdivision | — | 144.8 | 212.4 | 357.2 | ||||||||||||||||||||
Foreign government | — | 158.5 | 45.8 | 204.3 | ||||||||||||||||||||
Corporate | — | 3,857.7 | 3,812.3 | 7,670.0 | ||||||||||||||||||||
CMBS | — | 792.5 | 89.7 | 882.2 | ||||||||||||||||||||
RMBS | — | 1,062.4 | 709.3 | 1,771.7 | ||||||||||||||||||||
CDO/CLO | — | — | 223.7 | 223.7 | ||||||||||||||||||||
Other asset-backed | — | 125.5 | 309.9 | 435.4 | ||||||||||||||||||||
Available-for-sale equity securities | 2.1 | — | 32.7 | 34.8 | ||||||||||||||||||||
Derivative assets | 15.9 | 141.5 | — | 157.4 | ||||||||||||||||||||
Fair value investments (2) | 30.6 | 17.6 | 153.3 | 201.5 | ||||||||||||||||||||
Separate account assets | 3,316.5 | — | — | 3,316.5 | ||||||||||||||||||||
Total assets | $ | 4,064.7 | $ | 6,415.7 | $ | 5,885.8 | $ | 16,366.2 | ||||||||||||||||
Liabilities | ||||||||||||||||||||||||
Derivative liabilities | $ | — | $ | 45.8 | $ | — | $ | 45.8 | ||||||||||||||||
Embedded derivatives | — | 80.8 | 80.8 | |||||||||||||||||||||
Total liabilities | $ | — | $ | 45.8 | $ | 80.8 | $ | 126.6 | ||||||||||||||||
——————— | ||||||||||||||||||||||||
-1 | ||||||||||||||||||||||||
Includes securities whose underlying collateral is an obligation of a U.S. government entity. | ||||||||||||||||||||||||
-2 | ||||||||||||||||||||||||
Fair value investments at December 31, 2012 include $126.1 million of debt securities recorded at fair value. In addition, we have also elected the fair value option for equity securities backing our deferred compensation liabilities at $21.9 million as of December 31, 2012. Changes in the fair value of these assets are recorded through net investment income. Additionally, $53.5 million of assets relate to investment holdings of consolidated VIEs held at fair value, $8.7 million of which are Level 1 securities. | ||||||||||||||||||||||||
There were no transfers of assets between Level 1 and Level 2 during the year ended December 31, 2012. | ||||||||||||||||||||||||
Fair Values of Financial Instruments by Level: | As of December 31, 2011 | |||||||||||||||||||||||
($ in millions) | As restated and amended | |||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||
Assets | ||||||||||||||||||||||||
Available-for-sale debt securities | ||||||||||||||||||||||||
U.S. government and agency | $ | 268.2 | $ | 137.4 | $ | 336.2 | -1 | $ | 741.8 | |||||||||||||||
State and political subdivision | — | 165.2 | 116.6 | 281.8 | ||||||||||||||||||||
Foreign government | — | 153.4 | 51.8 | 205.2 | ||||||||||||||||||||
Corporate | — | 3,056.7 | 3,501.5 | 6,558.2 | ||||||||||||||||||||
CMBS | — | 1,028.7 | 100.6 | 1,129.3 | ||||||||||||||||||||
RMBS | — | 1,162.8 | 944.2 | 2,107.0 | ||||||||||||||||||||
CDO/CLO | — | – | 232.4 | 232.4 | ||||||||||||||||||||
Other asset-backed | — | 205.8 | 335.5 | 541.3 | ||||||||||||||||||||
Available-for-sale equity securities | 1.5 | 4.8 | 29.4 | 35.7 | ||||||||||||||||||||
Derivative assets | 18.9 | 143.3 | — | 162.2 | ||||||||||||||||||||
Fair value investments (2) | 23.7 | 15.5 | 144.8 | 184.0 | ||||||||||||||||||||
Separate account assets | 3,738.6 | 78.3 | — | 3,816.9 | ||||||||||||||||||||
Total assets | $ | 4,050.9 | $ | 6,151.9 | $ | 5,793.0 | $ | 15,995.8 | ||||||||||||||||
Liabilities | ||||||||||||||||||||||||
Derivative liabilities | $ | — | $ | 24.2 | $ | — | $ | 24.2 | ||||||||||||||||
Embedded derivatives | — | — | 84.5 | 84.5 | ||||||||||||||||||||
Total liabilities | $ | — | $ | 24.2 | $ | 84.5 | $ | 108.7 | ||||||||||||||||
——————— | ||||||||||||||||||||||||
-1 | ||||||||||||||||||||||||
Includes securities whose underlying collateral is an obligation of a U.S. government entity. | ||||||||||||||||||||||||
-2 | ||||||||||||||||||||||||
Fair value investments at December 31, 2011 include $117.9 million of debt securities recorded at fair value. In addition, we have also elected the fair value option for equity securities backing our deferred compensation liabilities at $22.1 million as of December 31, 2011. Changes in the fair value of these assets are recorded through net investment income. Additionally, $44.0 million of assets relate to investment holdings of consolidated VIEs held at fair value, $1.6 million of which are Level 1 securities. | ||||||||||||||||||||||||
There were no transfers of assets between Level 1 and Level 2 during the year ended December 31, 2011. | ||||||||||||||||||||||||
Available-for-sale debt securities as of December 31, 2012 and 2011 are reported net of $34.5 million and $62.0 million of Level 2 investments included in discontinued assets on the consolidated balance sheets related to discontinued reinsurance operations. | ||||||||||||||||||||||||
The following tables present corporates carried at fair value on a recurring basis by sector. | ||||||||||||||||||||||||
Fair Values of Corporates by Level and Sector: | As of December 31, 2012 | |||||||||||||||||||||||
($ in millions) | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
Corporates | ||||||||||||||||||||||||
Consumer | $ | — | $ | 1,160.3 | $ | 1,860.8 | $ | 3,021.1 | ||||||||||||||||
Energy | — | 277.8 | 142.7 | 420.5 | ||||||||||||||||||||
Financial services | — | 1,456.5 | 762.7 | 2,219.2 | ||||||||||||||||||||
Technical/communications | — | 154.7 | 44.6 | 199.3 | ||||||||||||||||||||
Transportation | — | 72.6 | 156.0 | 228.6 | ||||||||||||||||||||
Utilities | — | 506.5 | 631.8 | 1,138.3 | ||||||||||||||||||||
Other | — | 229.3 | 213.7 | 443.0 | ||||||||||||||||||||
Total corporates | $ | — | $ | 3,857.7 | $ | 3,812.3 | $ | 7,670.0 | ||||||||||||||||
Fair Values of Corporates by Level and Sector: | As of December 31, 2011 | |||||||||||||||||||||||
($ in millions) | As restated and amended | |||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||
Corporates | ||||||||||||||||||||||||
Consumer | $ | — | $ | 898.4 | $ | 1,662.4 | $ | 2,560.8 | ||||||||||||||||
Energy | — | 171.7 | 131.4 | 303.1 | ||||||||||||||||||||
Financial services | — | 1,221.3 | 721.9 | 1,943.2 | ||||||||||||||||||||
Technical/communications | — | 130.9 | 23.8 | 154.7 | ||||||||||||||||||||
Transportation | — | 60.2 | 187.4 | 247.6 | ||||||||||||||||||||
Utilities | — | 467.4 | 619.2 | 1,086.6 | ||||||||||||||||||||
Other | — | 106.8 | 155.4 | 262.2 | ||||||||||||||||||||
Total corporates | $ | — | $ | 3,056.7 | $ | 3,501.5 | $ | 6,558.2 | ||||||||||||||||
Level 3 financial assets and liabilities | ||||||||||||||||||||||||
The following tables set forth a summary of changes in the fair value of our Level 3 financial assets and liabilities. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The securities which were transferred as of the end of each reporting period into Level 3 were due to decreased market observability of similar assets and/or significant inputs and transfers out of Level 3 were due to increased market activity on comparable assets or observability of inputs. | ||||||||||||||||||||||||
Level 3 Financial Assets: | As of December 31, 2012 | |||||||||||||||||||||||
($ in millions) | Balance, | Purchases | Sales | Transfers | Transfers | Realized & | Unrealized | Total | ||||||||||||||||
beginning | into | out of | unrealized | gains | ||||||||||||||||||||
of period | Level 3 | Level 3 | gains | (losses) | ||||||||||||||||||||
(losses) | included | |||||||||||||||||||||||
included | in OCI | |||||||||||||||||||||||
in income (1) | ||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||
Available-for-sale debt securities | ||||||||||||||||||||||||
U.S. government and agency (2) | $ | 336.2 | $ | 5.4 | $ | -31.5 | $ | — | $ | — | $ | 0.4 | $ | -13.8 | $ | 296.7 | ||||||||
State and political subdivision | 116.6 | 53.5 | -3.1 | 22.1 | -11.4 | — | 34.7 | 212.4 | ||||||||||||||||
Foreign government | 51.8 | 5.0 | — | — | — | — | -11 | 45.8 | ||||||||||||||||
Corporate | 3,501.5 | 610.2 | -89.1 | 64.2 | -119.2 | 0.4 | -155.7 | 3,812.3 | ||||||||||||||||
CMBS | 100.6 | — | -12.1 | 32.4 | -30.4 | -4.1 | 3.3 | 89.7 | ||||||||||||||||
RMBS | 944.2 | 3.5 | -127.2 | — | — | -9.6 | -101.6 | 709.3 | ||||||||||||||||
CDO/CLO | 232.4 | 25.4 | -24.8 | — | — | 0.5 | -9.8 | 223.7 | ||||||||||||||||
Other asset-backed | 335.5 | 17.2 | -30.7 | 0.1 | -11.4 | -2.1 | 1.3 | 309.9 | ||||||||||||||||
Available-for-sale equity securities | 29.4 | 11.5 | -16.1 | 0.2 | — | 6.8 | 0.9 | 32.7 | ||||||||||||||||
Fair value investments | 144.8 | 36.0 | -37.1 | — | — | 9.6 | — | 153.3 | ||||||||||||||||
Total assets | $ | 5,793.0 | $ | 767.7 | $ | -371.7 | $ | 119.0 | $ | -172.4 | $ | 1.9 | $ | -251.7 | $ | 5,885.8 | ||||||||
——————— | ||||||||||||||||||||||||
-1 | ||||||||||||||||||||||||
Reflected in realized investment gains and losses for all assets except limited partnerships and other investments which are included in net investment income. | ||||||||||||||||||||||||
-2 | ||||||||||||||||||||||||
Includes securities whose underlying collateral is an obligation of a U.S. government entity. | ||||||||||||||||||||||||
Level 3 Financial Assets: | As of December 31, 2011 | |||||||||||||||||||||||
As restated and amended | ||||||||||||||||||||||||
($ in millions) | Balance, | Purchases | Sales | Transfers | Transfers | Realized & | Unrealized | Total | ||||||||||||||||
beginning | into | out of | unrealized | gains | ||||||||||||||||||||
of period | Level 3 | Level 3 | gains | (losses) | ||||||||||||||||||||
(losses) | included | |||||||||||||||||||||||
included | in OCI | |||||||||||||||||||||||
in income (1) | ||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||
Available-for-sale debt securities | ||||||||||||||||||||||||
U.S. government and agency (2) | $ | 341.4 | $ | 20.9 | $ | -10.6 | $ | 6.9 | $ | — | $ | — | $ | -22.4 | $ | 336.2 | ||||||||
State and political subdivision | 67.1 | 44.5 | -1.8 | — | — | — | 6.8 | 116.6 | ||||||||||||||||
Foreign government | 47.1 | 6.6 | — | 6.8 | -3.5 | — | -5.2 | 51.8 | ||||||||||||||||
Corporate | 3,278.3 | 438.4 | -86.1 | 125.7 | -88.9 | -7.6 | -158.3 | 3,501.5 | ||||||||||||||||
CMBS | 91.7 | 32.0 | -5 | 17.6 | -36.7 | -3.6 | 4.6 | 100.6 | ||||||||||||||||
RMBS | 919.1 | 185.0 | -156.5 | — | — | -9.7 | 6.3 | 944.2 | ||||||||||||||||
CDO/CLO | 238.0 | 18.7 | -14.2 | — | — | -1.8 | -8.3 | 232.4 | ||||||||||||||||
Other asset-backed | 252.8 | 100.9 | -38.6 | 3.4 | -7.7 | -3.9 | 28.6 | 335.5 | ||||||||||||||||
Available-for-sale equity securities | 36.2 | 4.4 | -8.6 | 0.6 | — | 3.6 | -6.8 | 29.4 | ||||||||||||||||
Fair value investments | 126.0 | 37.2 | -17.9 | 37.3 | — | -37.8 | — | 144.8 | ||||||||||||||||
Total assets | $ | 5,397.7 | $ | 888.6 | $ | -339.3 | $ | 198.3 | $ | -136.8 | $ | -60.8 | $ | -154.7 | $ | 5,793.0 | ||||||||
——————— | ||||||||||||||||||||||||
-1 | ||||||||||||||||||||||||
Reflected in realized investment gains and losses for all assets except limited partnerships and other investments which are included in net investment income. | ||||||||||||||||||||||||
-2 | ||||||||||||||||||||||||
Includes securities whose underlying collateral is an obligation of a U.S. government entity. | ||||||||||||||||||||||||
Level 3 Financial Liabilities: | Embedded Derivatives | |||||||||||||||||||||||
Years Ended December 31, | ||||||||||||||||||||||||
($ in millions) | 2012 | 2011 | ||||||||||||||||||||||
As restated | ||||||||||||||||||||||||
and amended | ||||||||||||||||||||||||
Balance, beginning of period | $ | 84.5 | $ | 30.4 | ||||||||||||||||||||
Net purchases/(sales) | 8.4 | 19.7 | ||||||||||||||||||||||
Transfers into Level 3 | — | — | ||||||||||||||||||||||
Transfers out of Level 3 | — | — | ||||||||||||||||||||||
Realized (gains) losses (1) | -12.1 | 34.4 | ||||||||||||||||||||||
Balance, end of period | $ | 80.8 | $ | 84.5 | ||||||||||||||||||||
——————— | ||||||||||||||||||||||||
-1 | ||||||||||||||||||||||||
Realized gains and losses are included in net realized investment gains on the consolidated statements of comprehensive income. | ||||||||||||||||||||||||
Significant unobservable inputs used in the fair value measurement of Level 3 assets are yield, prepayment rate, default rate, recovery rate, and reinvestment spread. Keeping other inputs unchanged, an increase in yield or default rate would decrease the fair value of the asset while an increase in prepayment rate, recovery rate, or reinvestment spread would result in an increase to the fair value of the asset. Yields are a function of the underlying treasury rates and asset spreads, and changes in default and recovery rates are dependent on overall market conditions. | ||||||||||||||||||||||||
The following table presents quantitative estimates about unobservable inputs used in the fair value measurement of significant categories of internally priced assets. | ||||||||||||||||||||||||
Level 3 Assets:(1) | As of December 31, 2012 | |||||||||||||||||||||||
($ in millions) | ||||||||||||||||||||||||
Fair | Valuation | Unobservable | ||||||||||||||||||||||
Value | Technique(s) | Input | Range (Weighted Average) | |||||||||||||||||||||
U.S. government and | $ | 286.1 | Spread matrix | Yield | 1.46% - 5.19% (3.20%) | |||||||||||||||||||
agency | ||||||||||||||||||||||||
State and political | $ | 107.4 | Spread matrix | Yield | 1.94% - 3.53% (2.93%) | |||||||||||||||||||
subdivision | ||||||||||||||||||||||||
Discounted cash flow | Yield | 3.28% | ||||||||||||||||||||||
Corporate | $ | 2,888.9 | Spread matrix | Yield | 1.36% - 7.82% (3.21%) | |||||||||||||||||||
Discounted cash flow | Yield | 1.47% - 6.33% (2.80%) | ||||||||||||||||||||||
CDO/CLO | $ | 15.5 | Discounted cash flow | Prepayment rate | 20% (CLOs) | |||||||||||||||||||
Default rate | 2.55% (CLOs) | |||||||||||||||||||||||
Recovery rate | 65% (Loans), 35% (High yield bonds), | |||||||||||||||||||||||
45% (Investment grade bonds) | ||||||||||||||||||||||||
Reinvestment spread | 3 mo LIBOR + 400bps (CLOs) | |||||||||||||||||||||||
Other asset-backed | $ | 43.5 | Discounted cash flow | Yield | 0.5% - 9.5% (3.41%) | |||||||||||||||||||
Discounted cash flow | Prepayment rate | 2% | ||||||||||||||||||||||
Default rate | 2.53% for 48 mos then .33% thereafter | |||||||||||||||||||||||
Recovery rate | 10% (TRUPS) | |||||||||||||||||||||||
Fair value | $ | 5.0 | Discounted cash flow | Default rate | 0.24% | |||||||||||||||||||
investments | ||||||||||||||||||||||||
Recovery rate | 45% | |||||||||||||||||||||||
——————— | ||||||||||||||||||||||||
-1 | ||||||||||||||||||||||||
Excludes Level 3 assets which are valued based upon non-binding independent third-party valuations or third-party price information for which unobservable inputs are not reasonably available to us. | ||||||||||||||||||||||||
Significant unobservable inputs used in the fair value measurement of variable annuity GMAB and GMWB liabilities are equity volatility, swap curve, mortality and lapse rates and an adjustment for non-performance risk. Keeping other inputs unchanged, an increase in the equity volatility would increase the fair value of the liability while an increase in the swap curve or CSA would result in a decrease to the fair value of the liability. The impact of changes in mortality and lapse rates are dependent on overall market conditions. The fair value of fixed indexed annuity and indexed universal life embedded derivative related to index credits is calculated using the swap curve, mortality and lapse rates, as well as an adjustment for non-performance risk. Keeping other inputs unchanged, an increase in any of these significant unobservable inputs would result in a decrease of the fixed indexed annuity embedded derivative liability. | ||||||||||||||||||||||||
The following table presents quantitative estimates about unobservable inputs used in the fair value measurement of internally priced liabilities. | ||||||||||||||||||||||||
Level 3 Liabilities: | As of December 31, 2012 | |||||||||||||||||||||||
($ in millions) | Fair Value | Valuation Technique(s) | Unobservable Input | Range | ||||||||||||||||||||
Embedded derivatives | $ | 51.2 | Budget method | Swap curve | 0.21% - 2.50% | |||||||||||||||||||
(EIA / VED) | Mortality rate | 75% of A2000 basic table | ||||||||||||||||||||||
Lapse rate | 1.00% - 35.00% | |||||||||||||||||||||||
CSA | 4.47% | |||||||||||||||||||||||
Embedded derivatives | $ | 29.6 | Risk neutral stochastic | Volatility surface | 11.67% - 50.83% | |||||||||||||||||||
(GMAB / GMWB) | valuation methodology | |||||||||||||||||||||||
Swap curve | 0.36% - 3.17% | |||||||||||||||||||||||
Mortality rate | 75% of A2000 basic table | |||||||||||||||||||||||
Lapse rate | 0.00% - 60.00% | |||||||||||||||||||||||
CSA | 4.47% | |||||||||||||||||||||||
Total Level 3 liabilities | $ | 80.8 | ||||||||||||||||||||||
Level 3 Assets and Liabilities by Pricing Source: | As of December 31, 2012 | |||||||||||||||||||||||
($ in millions) | Internal (1) | External (2) | Total | |||||||||||||||||||||
Assets | ||||||||||||||||||||||||
Available-for-sale debt securities | ||||||||||||||||||||||||
U.S. government and agency (3) | $ | 286.1 | $ | 10.6 | $ | 296.7 | ||||||||||||||||||
State and political subdivision | 107.4 | 105.0 | 212.4 | |||||||||||||||||||||
Foreign government | — | 45.8 | 45.8 | |||||||||||||||||||||
Corporate | 2,888.9 | 923.4 | 3,812.3 | |||||||||||||||||||||
CMBS | — | 89.7 | 89.7 | |||||||||||||||||||||
RMBS | — | 709.3 | 709.3 | |||||||||||||||||||||
CDO/CLO | 15.5 | 208.2 | 223.7 | |||||||||||||||||||||
Other asset-backed | 43.5 | 266.4 | 309.9 | |||||||||||||||||||||
Available-for-sale equity securities | — | 32.7 | 32.7 | |||||||||||||||||||||
Fair value investments | 5.0 | 148.3 | 153.3 | |||||||||||||||||||||
Total assets | $ | 3,346.4 | $ | 2,539.4 | $ | 5,885.8 | ||||||||||||||||||
Liabilities | ||||||||||||||||||||||||
Embedded derivatives | $ | 80.8 | $ | — | $ | 80.8 | ||||||||||||||||||
Total liabilities | $ | 80.8 | $ | — | $ | 80.8 | ||||||||||||||||||
——————— | ||||||||||||||||||||||||
-1 | ||||||||||||||||||||||||
Represents valuations reflecting both internally-derived and market inputs, as well as third-party information or quotes. | ||||||||||||||||||||||||
-2 | ||||||||||||||||||||||||
Represents unadjusted prices from independent pricing services, third-party financial statements and independent indicative broker quotes where pricing inputs are not readily available. | ||||||||||||||||||||||||
-3 | ||||||||||||||||||||||||
Includes securities whose underlying collateral is an obligation of a U.S. government entity. | ||||||||||||||||||||||||
Level 3 Assets and Liabilities by Pricing Source: | As of December 31, 2011 | |||||||||||||||||||||||
($ in millions) | As restated and amended | |||||||||||||||||||||||
Internal (1) | External (2) | Total | ||||||||||||||||||||||
Assets | ||||||||||||||||||||||||
Available-for-sale debt securities | ||||||||||||||||||||||||
U.S. government and agency (3) | $ | 315.4 | $ | 20.8 | $ | 336.2 | ||||||||||||||||||
State and political subdivision | 30.9 | 85.7 | 116.6 | |||||||||||||||||||||
Foreign government | 10.4 | 41.4 | 51.8 | |||||||||||||||||||||
Corporate | 2,662.80 | 838.7 | 3,501.5 | |||||||||||||||||||||
CMBS | — | 100.6 | 100.6 | |||||||||||||||||||||
RMBS | — | 944.2 | 944.2 | |||||||||||||||||||||
CDO/CLO | 199.3 | 33.1 | 232.4 | |||||||||||||||||||||
Other asset-backed | 59.1 | 276.4 | 335.5 | |||||||||||||||||||||
Available-for-sale equity securities | — | 29.4 | 29.4 | |||||||||||||||||||||
Fair value investments | 37.9 | 106.9 | 144.8 | |||||||||||||||||||||
Total assets | $ | 3,315.8 | $ | 2,477.2 | $ | 5,793.0 | ||||||||||||||||||
Liabilities | ||||||||||||||||||||||||
Embedded derivatives | $ | 84.5 | $ | — | $ | 84.5 | ||||||||||||||||||
Total liabilities | $ | 84.5 | $ | — | $ | 84.5 | ||||||||||||||||||
——————— | ||||||||||||||||||||||||
-1 | ||||||||||||||||||||||||
Represents valuations reflecting both internally-derived and market inputs, as well as third-party information or quotes. | ||||||||||||||||||||||||
-2 | ||||||||||||||||||||||||
Represents unadjusted prices from independent pricing services, third-party financial statements and independent indicative broker quotes where pricing inputs are not readily available. | ||||||||||||||||||||||||
-3 | ||||||||||||||||||||||||
Includes securities whose underlying collateral is an obligation of a U.S. government entity. | ||||||||||||||||||||||||
Financial instruments not carried at fair value | ||||||||||||||||||||||||
The Company is required by U.S. GAAP to disclose the fair value of certain financial instruments including those that are not carried at fair value. The following table discloses the Company’s financial instruments where the carrying amounts and fair values differ: | ||||||||||||||||||||||||
Carrying Amounts and Fair Values | As of December 31, | |||||||||||||||||||||||
of Financial Instruments: | 2012 | 2011 | ||||||||||||||||||||||
($ in millions) | Fair Value | As restated and amended | ||||||||||||||||||||||
Hierarchy | Carrying | Fair | Carrying | Fair | ||||||||||||||||||||
Level | Value | Value | Value | Value | ||||||||||||||||||||
Financial assets: | ||||||||||||||||||||||||
Policy loans | Level 3 | $ | 2,354.7 | $ | 2,342.8 | $ | 2,379.3 | $ | 2,367.7 | |||||||||||||||
Cash and cash equivalents | Level 1 | 246.4 | 246.4 | 168.2 | 168.2 | |||||||||||||||||||
Financial liabilities: | ||||||||||||||||||||||||
Investment contracts | Level 3 | $ | 3,040.7 | $ | 3,045.9 | $ | 2,432.3 | $ | 2,443.5 | |||||||||||||||
Surplus notes | Level 3 | 126.1 | 95.0 | 174.2 | 126.9 | |||||||||||||||||||
Senior unsecured bonds | Level 2 | 252.7 | 217.1 | 252.7 | 195.1 | |||||||||||||||||||
Fair value of policy loans | ||||||||||||||||||||||||
The fair value of fixed rate policy loans is calculated using a discounted cash flow model based upon current U.S. Treasury rates and historical loan repayment patterns. For floating rate policy loans the fair value is the amount due, excluding interest, as of the reporting date. | ||||||||||||||||||||||||
Fair value of investment contracts | ||||||||||||||||||||||||
We determine the fair value of guaranteed interest contracts by using a discount rate based upon the appropriate U.S. Treasury rate to calculate the present value of projected contractual liability payments through final maturity. We determine the fair value of deferred annuities and supplementary contracts without life contingencies with an interest guarantee of one year or less at the amount of the policy reserve. In determining the fair value of deferred annuities and supplementary contracts without life contingencies with interest guarantees greater than one year, we use a discount rate based upon the appropriate U.S. Treasury rate to calculate the present value of the projected account value of the policy at the end of the current guarantee period. | ||||||||||||||||||||||||
Deposit type funds, including pension deposit administration contracts, dividend accumulations and other funds left on deposit not involving life contingencies, have interest guarantees of less than one year for which interest credited is closely tied to rates earned on owned assets. For these liabilities, we assume fair value to be equal to the stated liability balances. | ||||||||||||||||||||||||
The fair value of these investment contracts are categorized as Level 3. | ||||||||||||||||||||||||
Indebtedness | ||||||||||||||||||||||||
Fair value of our senior unsecured bonds is based upon quoted market prices. The fair value of surplus notes is determined with reference to the fair value of our senior unsecured bonds including consideration of the different features in the two securities. | ||||||||||||||||||||||||
15_Income_Taxes
15. Income Taxes | 12 Months Ended | ||||||||
Dec. 31, 2012 | |||||||||
Income Tax Disclosure [Abstract] | ' | ||||||||
15. Income Taxes | ' | ||||||||
Phoenix and its subsidiaries file a consolidated U.S. Federal income tax return. The Company also files combined, unitary and separate income tax returns in various states. | |||||||||
Significant Components of Income Taxes from Continuing Operations: | Years Ended December 31, | ||||||||
($ in millions) | 2012 | 2011 | 2010 | ||||||
As restated | As restated | ||||||||
and amended | and amended | ||||||||
Current | |||||||||
U.S. | $ | 15.6 | $ | 12.3 | $ | 4.1 | |||
Foreign | — | — | — | ||||||
Deferred | |||||||||
U.S. | -19.3 | — | -14.4 | ||||||
Foreign | — | — | |||||||
Total income tax expense (benefit) | $ | -3.7 | $ | 12.3 | $ | -10.3 | |||
Reconciliation of Effective Income Tax Rate: | Years Ended December 31, | ||||||||
($ in millions) | 2012 | 2011 | 2010 | ||||||
As restated | As restated | ||||||||
and amended | and amended | ||||||||
Income (loss) from continuing operations before income taxes: | |||||||||
U.S. | $ | -156 | $ | 2.7 | $ | -41.6 | |||
Foreign | — | — | — | ||||||
Total | $ | -156 | $ | 2.7 | $ | -41.6 | |||
Income tax expense (benefit) at statutory rate of 35% | $ | -54.6 | $ | 1.0 | $ | -14.5 | |||
Dividend received deduction | -2.5 | -3.6 | -0.9 | ||||||
Expiration of tax attribute carryovers | 5.6 | — | 4.3 | ||||||
Low income housing tax credit | — | — | -1 | ||||||
Valuation allowance increase (release) | 48.4 | 14.3 | 3.3 | ||||||
Realized losses (gains) on available-for-sale securities pledged as collateral | — | — | — | ||||||
State income taxes (benefit) | — | -2.2 | -2.7 | ||||||
Other, net | -0.6 | 2.8 | 1.2 | ||||||
Income tax expense (benefit) applicable to continuing operations | $ | -3.7 | $ | 12.3 | $ | -10.3 | |||
Effective income tax rates | 2.40% | 455.50% | 24.80% | ||||||
Allocation of Income Taxes: | Years Ended December 31, | ||||||||
($ in millions) | 2012 | 2011 | 2010 | ||||||
As restated | As restated | ||||||||
and amended | and amended | ||||||||
Income tax expense (benefit) from continuing operations | $ | -3.7 | $ | 12.3 | $ | -10.3 | |||
Income tax from OCI: | |||||||||
Unrealized | 90.9 | 0.3 | 87.0 | ||||||
Pension | — | — | — | ||||||
Policy dividend obligation & deferred policy acquisition cost | — | — | — | ||||||
Other | — | — | — | ||||||
Income tax related to cumulative effect of change in accounting | — | — | 3.1 | ||||||
Income tax expense (benefit) from discontinued operations | -1.5 | -2.4 | — | ||||||
Total income tax recorded to all components of income | $ | 85.7 | $ | 10.2 | $ | 79.8 | |||
Deferred Income Tax Balances Attributable to Temporary Differences: | Years Ended December 31, | ||||||||
($ in millions) | 2012 | 2011 | |||||||
As restated | |||||||||
and amended | |||||||||
Deferred income tax assets | |||||||||
Future policyholder benefits | $ | 637.2 | $ | 505.0 | |||||
Unearned premiums / deferred revenues | 57.0 | 59.5 | |||||||
Employee benefits | 128.0 | 122.6 | |||||||
Net operating and capital loss carryover benefits | 244.0 | 276.3 | |||||||
Foreign tax credits carryover benefits | 2.2 | 2.0 | |||||||
Alternative minimum tax credits | 9.4 | 14.6 | |||||||
General business tax credits | 31.5 | 35.5 | |||||||
Other | 16.2 | 14.3 | |||||||
Available-for-sale debt securities | 49.4 | 120.6 | |||||||
Subtotal | 1,174.9 | 1,150.4 | |||||||
Valuation allowance | -523.3 | -408.4 | |||||||
Total deferred income tax assets, net of valuation allowance | 651.6 | 742.0 | |||||||
Deferred tax liabilities | |||||||||
Deferred policy acquisition costs | 191.8 | 254.0 | |||||||
Accrued liabilities | 348.8 | 291.8 | |||||||
Investments | 61.6 | 75.6 | |||||||
Gross deferred income tax liabilities | 602.2 | 621.4 | |||||||
Net deferred income tax assets | $ | 49.4 | $ | 120.6 | |||||
As of December 31, 2012, we performed our assessment of the realization of deferred tax assets. This assessment included consideration of all available evidence – both positive and negative – weighted to the extent the evidence was objectively verifiable. Due primarily to the existence of significant negative evidence as well as the weight given to the objective nature of the cumulative losses in recent years, and after consideration of all available evidence, we concluded that our estimates of future taxable income, timing of the reversal of existing taxable temporary differences and certain tax planning strategies did not provide sufficient positive evidence to assert that it is more likely than not that certain deferred tax assets would be realizable. To the extent the Company can demonstrate the ability to generate sustained profitability in the future, the valuation allowance could potentially be reversed resulting in a benefit to income tax expense. | |||||||||
As of December 31, 2012, we concluded that our estimates of future taxable income, certain tax planning strategies and other sources of income did not constitute sufficient positive evidence to assert that it is more likely than not that certain deferred tax assets would be realizable. Accordingly, a valuation allowance of $523.3 million has been recorded on net deferred tax assets of $572.7 million. The remaining deferred tax asset of $49.4 million attributable to available-for-sale debt securities with gross unrealized losses does not require a valuation allowance due to our ability and intent to hold these securities until recovery of principal value through sale or contractual maturity, thereby avoiding the realization of taxable losses. This conclusion is consistent with prior periods. The impact of the valuation allowance on the allocation of tax to the components of the financial statements included an increase of $48.4 million in continuing operations, an increase of $55.1 million in OCI-related deferred tax balances and an increase of $6.0 million recorded to discontinued operations. | |||||||||
The tax provision reported in continuing operations of $(3.7) million consists primarily of a deferred tax benefit of $24.7 million that results from the application of ASC 740 intraperiod allocation rules. These rules allow for the benefitting of current year losses in continuing operations when an increase to the valuation allowance is avoided due to the existence of current year income elsewhere reported in the financial statements (e.g., discontinued operations, other comprehensive income). Additionally, current tax expense of $15.6 million was recognized related to the accrual of regular taxes, offset by available credits up to the alternative minimum tax liability. | |||||||||
As of December 31, 2012, the Company has $244.0 million of net operating and capital loss carryovers. Of this amount, $130.0 million related to $373.0 million of federal net operating losses that are scheduled to expire between the years 2021 and 2032. An additional $105.0 million related to $301.0 million of federal capital losses that are scheduled to expire between the years 2013 and 2016, with $205.0 million and $58.0 million expiring in 2013 and 2014, respectively. The remaining amount of $9.0 million is attributable to state income tax net operating losses. | |||||||||
As of December 31, 2012, we had deferred income tax assets of $31.5 million related to general business tax credit carryovers, which are expected to expire between the years 2022 and 2031. Additionally, we had deferred income tax assets of $9.4 million related to alternative minimum tax credit carryovers which do not expire. | |||||||||
The Company is no longer subject to U.S. federal income tax examinations by tax authorities for years before 2011. During 2012, the Company resolved examination issues for tax year 2010 which resulted in adjustments to tax attribute carryforwards. No material unanticipated assessments were incurred, and no adjustment to our liability for uncertain tax positions was required. | |||||||||
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: | |||||||||
Reconciliation of the Beginning and Ending Amount of Unrecognized Tax Benefits: | 2012 | 2011 | 2010 | ||||||
($ in millions) | |||||||||
Balance, beginning of period | $ | — | $ | — | $ | 0.1 | |||
Reductions for tax positions of prior years | — | — | -0.1 | ||||||
Settlements with taxing authorities | — | — | — | ||||||
Balance, end of period | $ | — | $ | — | $ | — | |||
Management believes that adequate provisions have been made in the financial statements for any potential assessments that may result from tax examinations and other tax related matters for all open tax years. Based upon the timing and status of our current examinations by taxing authorities, we do not believe that it is reasonably possible that any changes to the balance of unrecognized tax benefits occurring within the next 12 months will result in a significant change to the results of operations, financial condition or liquidity. | |||||||||
The Company recognizes interest and penalties as income tax expense and accrued interest and penalties in the related income tax liability. As of December 31, 2012 and December 31, 2011, the Company’s liability for interest and penalties was $0. The Company incurred a $1.0 million expense related to interest and penalties during 2012, 2011 and 2010. | |||||||||
16_Accumulated_Other_Comprehen
16. Accumulated Other Comprehensive Income | 12 Months Ended | |||||||||||
Dec. 31, 2012 | ||||||||||||
Equity [Abstract] | ' | |||||||||||
16. Accumulated Other Comprehensive Income | ' | |||||||||||
Changes in each component of AOCI attributable to the Company for the years ended December 31 are as follows below (net of tax): | ||||||||||||
Accumulated Other Comprehensive Income (Loss): | Net | Non-Credit | Net | Total | ||||||||
($ in millions) | Unrealized | Portion of | Pension | |||||||||
Investment | OTTI Losses | Liability | ||||||||||
Losses | Recognized | Adjustments | ||||||||||
in OCI | ||||||||||||
As restated and amended (1) | ||||||||||||
Balance, December 31, 2010 | $ | 126.8 | $ | -82.5 | $ | -200.5 | $ | -156.2 | ||||
Change in component during the year | 46.6 | -22 | -99.1 | -74.5 | ||||||||
Balance, December 31, 2011 | 173.4 | -104.5 | -299.6 | -230.7 | ||||||||
Change in component during the year | -21.3 | 24.1 | -21.4 | -18.6 | ||||||||
Balance, December 31, 2012 | $ | 152.1 | $ | -80.4 | $ | -321 | $ | -249.3 | ||||
——————— | ||||||||||||
-1 | ||||||||||||
Except for the change in component during 2012 and the balance as of 2012. | ||||||||||||
17_Employee_Benefit_Plans_and_
17. Employee Benefit Plans and Employment Agreements | 12 Months Ended | |||||||||||||||
Dec. 31, 2012 | ||||||||||||||||
Compensation and Retirement Disclosure [Abstract] | ' | |||||||||||||||
17. Employee Benefit Plans and Employment Agreements | ' | |||||||||||||||
Pension and other post-employment benefits | ||||||||||||||||
We provide our employees with post-employment benefits that include retirement benefits, through pension and savings plans, and other benefits, including health care and life insurance. | ||||||||||||||||
We have three defined benefit plans covering our employees. The employee pension plan provides benefits up to the amount allowed under the Internal Revenue Code. The two supplemental plans provide benefits in excess of the primary plan. Retirement benefits under the plans are a function of years of service and compensation. Effective March 31, 2010, all benefit accruals under all of our funded and unfunded defined benefit plans were frozen. This change was announced in 2009 and a curtailment was recognized at that time for the reduction in the expected years of future service. | ||||||||||||||||
The employee pension plan is funded with assets held in a trust. The assets within the plan include corporate and government debt securities, equity securities, real estate and private equity partnerships. The supplemental plans are unfunded. Upon a change in control (as defined in the plan) of The Phoenix Companies, Inc., we are required to make an irrevocable contribution to a trust to fund the benefits payable under the supplemental plans. | ||||||||||||||||
Assumptions Related to Pension and Postretirement Employee Benefit Plans | ||||||||||||||||
Pursuant to accounting principles related to the Company’s pension and other postretirement obligations to employees under its various benefit plans, the Company is required to make assumptions in order to calculate the related liabilities and expenses each period. The assumptions used in calculating the benefit obligations and the net amount recognized for the years ended December 31, 2012, 2011 and 2010 are presented in the following tables. | ||||||||||||||||
Principal Rates and Assumptions: | Years Ended December 31, | |||||||||||||||
2012 | 2011 | 2010 | ||||||||||||||
As restated | As restated | |||||||||||||||
and amended | and amended | |||||||||||||||
Assumptions Used to Determine Benefit Obligations | ||||||||||||||||
Projected benefit obligation discount rate – Employee Plan | 3.98% | 4.53% | 5.32% | |||||||||||||
Projected benefit obligation discount rate – Supplemental Plan | 3.81% | 4.39% | 5.10% | |||||||||||||
Projected benefit obligation discount rate – Other Post-Employment Benefits | 3.37% | 4.11% | 4.79% | |||||||||||||
Future compensation increase rate | N/A(1) | N/A(1) | N/A(1) | |||||||||||||
Deferred investment gain/loss amortization corridor – Employee Plan | 5.00% | 5.00% | 5.00% | |||||||||||||
Deferred investment gain/loss amortization corridor – Supplemental Plan | 5.00% | 5.00% | 5.00% | |||||||||||||
Deferred investment gain/loss amortization corridor – Other Post-Employment Benefits | 10.00% | 10.00% | 10.00% | |||||||||||||
Future health care cost increase rate, age 64 and younger | 6.00% | N/A | N/A | |||||||||||||
Future health care cost increase rate, age 65 and older | N/A | N/A | N/A | |||||||||||||
Assumptions Used to Determine Benefit Expense | ||||||||||||||||
Projected benefit obligation discount rate – Employee Plan | 4.53% | 5.32% | 5.79% | |||||||||||||
Projected benefit obligation discount rate – Supplemental Plan | 4.39% | 5.10% | 5.62% | |||||||||||||
Projected benefit obligation discount rate – Other Post-Employment Benefits | 4.11%/3.35% | 4.79% | 5.32% | |||||||||||||
Future compensation increase rate | N/A(1) | N/A(1) | N/A(1) | |||||||||||||
Pension plan assets long-term rate of return | 8.00% | 8.00% | 8.00% | |||||||||||||
Deferred investment gain/loss amortization corridor – Employee Plan | 5.00% | 5.00% | 5.00% | |||||||||||||
Deferred investment gain/loss amortization corridor – Supplemental Plan | 5.00% | 5.00% | 5.00% | |||||||||||||
Deferred investment gain/loss amortization corridor – Other Post-Employment Plan | 10.00% | 10.00% | 10.00% | |||||||||||||
Future health care cost increase rate, age 64 and younger | 6.00% | N/A | 8.00% | |||||||||||||
Future health care cost increase rate, age 65 and older | N/A | N/A | N/A | |||||||||||||
——————— | ||||||||||||||||
-1 | ||||||||||||||||
-1 | Salary scale by age which grades down from 3.5% to N/A prior to the pension plan freeze effective March 31, 2010. For periods subsequent to the plan freeze, salary scale is not applicable. | |||||||||||||||
The discount rate assumption is developed using a yield curve approach based upon future pension and other postretirement obligations and currently available market and industry data. The yield curve utilized is comprised of bonds rated Aa/AA or higher by Moody’s Investor Services, Standard & Poor’s and Fitch Ratings Ltd. with maturities between one and fifteen or more years. | ||||||||||||||||
The health care cost trend rate is a significant assumption which may affect the amounts reported. For example, increasing or decreasing the assumed health care cost trend rates by one percentage point in each year would have a material effect to the accumulated postretirement benefit obligation or to the annual service and interest costs. | ||||||||||||||||
The following table sets forth amounts of benefits expected to be paid over the next ten years from the Company’s pension and postretirement benefit plans as of December 31, 2012: | ||||||||||||||||
10-Year Benefit Payout Projection: | Employee | Supplemental | Other | |||||||||||||
($ in millions) | Plan | Plans | Postretirement(1) | Total | ||||||||||||
2013 | $ | 32.9 | $ | 8.3 | $ | 4.0 | $ | 45.2 | ||||||||
2014 | 33.4 | 8.4 | 3.8 | 45.6 | ||||||||||||
2015 | 33.9 | 8.5 | 3.6 | 46.0 | ||||||||||||
2016 | 34.7 | 8.6 | 3.4 | 46.7 | ||||||||||||
2017 | 35.2 | 8.6 | 3.2 | 47.0 | ||||||||||||
2018 to 2022 | 187.2 | 43.8 | 13.3 | 244.3 | ||||||||||||
——————— | ||||||||||||||||
-1 | ||||||||||||||||
Includes other individual retirement agreements. | ||||||||||||||||
Our investment policy and strategy employs a total return approach combining equities, fixed income, real estate and other assets to maximize the long-term return of the plan assets for a prudent level of risk. Risk tolerance is determined based on consideration of plan liabilities and plan-funded status. The investment portfolio contains a diversified blend of equity, fixed income, real estate and alternative investments. The equity investments are diversified across domestic and foreign markets, across market capitalizations (large, mid and small cap), as well as growth, value and blend. Derivative instruments are not typically used for implementing asset allocation decisions and are not used in conjunction with leverage. Investment performance is measured and monitored on an ongoing basis through quarterly investment portfolio reviews, annual liability measurement and periodic presentations by asset managers included in the plan. | ||||||||||||||||
Employee Pension Plan Asset Allocation: | As of December 31, | |||||||||||||||
2012 | 2011 | |||||||||||||||
Asset Category | ||||||||||||||||
Equity securities | 61% | 58% | ||||||||||||||
Debt securities | 31% | 30% | ||||||||||||||
Real estate | 2% | 4% | ||||||||||||||
Other | 6% | 8% | ||||||||||||||
Total | 100% | 100% | ||||||||||||||
We use a building block approach in estimating the long-term rate of return for plan assets. Historical returns are determined by asset class. The historical relationships between equities, fixed income and other asset classes are reviewed. We apply long-term asset return estimates to the plan’s target asset allocation to determine the weighted-average long-term return. The company applied a consistent approach to the determination of the expected rate of return on plan assets in 2013. The expected rate of return for 2013 is 7.75% for the employee pension plan. Our long-term asset allocation was determined through modeling long-term returns and asset return volatilities. The allocation reflects proper diversification and was reviewed against other corporate pension plans for reasonability and appropriateness. | ||||||||||||||||
We use a December 31 measurement date for our pension and other post-employment benefits. | ||||||||||||||||
Obligations Related to the Employee Pension Plan | ||||||||||||||||
The following tables set forth a reconciliation of beginning and ending balances of the fair value of plan assets, benefit obligation as well as the funded status of the Company’s defined benefit pension plans for the years ended December 31, 2012 and 2011. | ||||||||||||||||
Changes in Plan Assets and Benefit Obligations: | Employee Plan | |||||||||||||||
($ in millions) | Years Ended December 31, | |||||||||||||||
2012 | 2011 | 2010 | ||||||||||||||
As restated | As restated | |||||||||||||||
and amended | and amended | |||||||||||||||
Plans’ Assets | ||||||||||||||||
Plan assets’ actual return | $ | 55.4 | $ | 18.4 | $ | 54.8 | ||||||||||
Employer contributions | 18.2 | 17.3 | 25.8 | |||||||||||||
Plan disbursements | -35.4 | -32.8 | -32.8 | |||||||||||||
Change in plan assets | 38.2 | 2.9 | 47.8 | |||||||||||||
Plan assets, beginning of period | 437.6 | 434.7 | 386.9 | |||||||||||||
Plans’ assets, end of period | $ | 475.8 | $ | 437.6 | $ | 434.7 | ||||||||||
Plans’ Projected Benefit Obligation | ||||||||||||||||
Service and interest cost accrual | $ | -29.6 | $ | -31.1 | $ | -32.7 | ||||||||||
Actuarial loss | -54.3 | -72.3 | -27.6 | |||||||||||||
Plan disbursements | 35.4 | 32.9 | 32.8 | |||||||||||||
Plan amendments | — | — | — | |||||||||||||
Change in projected benefit obligation | -48.5 | -70.5 | -27.5 | |||||||||||||
Projected benefit obligation, beginning of period | -646.3 | -575.8 | -548.3 | |||||||||||||
Projected benefit obligation, end of period | $ | -694.8 | $ | -646.3 | $ | -575.8 | ||||||||||
Plan assets less than projected benefit obligations, end of period | $ | -219 | $ | -208.7 | $ | -141.1 | ||||||||||
Accumulated benefit obligation | $ | 694.8 | $ | 646.3 | $ | 575.8 | ||||||||||
Amounts Recognized in Consolidated Balance Sheets: | Employee Plan | |||||||||||||||
($ in millions) | Years Ended December 31, | |||||||||||||||
2012 | 2011 | |||||||||||||||
As restated | ||||||||||||||||
and amended | ||||||||||||||||
Other liabilities | $ | -219 | $ | -208.7 | ||||||||||||
Amounts Recorded in Accumulated Other Comprehensive Loss as of the end of the | Employee Plan | |||||||||||||||
period and the related changes in these items during the period are as follows: | Years Ended December 31, | |||||||||||||||
($ in millions) | 2012 | 2011 | 2010 | |||||||||||||
As restated | As restated | |||||||||||||||
and restated | and restated | |||||||||||||||
Balance, beginning of period | $ | 234.8 | $ | 151.6 | $ | 152.6 | ||||||||||
Deferrals for the period | 33.2 | 88.0 | 3.4 | |||||||||||||
Amortization for the period | -7.9 | -4.8 | -4.4 | |||||||||||||
Total balance, end of period | $ | 260.1 | $ | 234.8 | $ | 151.6 | ||||||||||
Amounts in Accumulated Other Comprehensive Loss that are Expected to be Recognized | Employee | |||||||||||||||
as Components of Net Periodic Cost (Credit) During the Next Fiscal Year are as follows: | Plan | |||||||||||||||
($ in millions) | ||||||||||||||||
Prior service (credit) cost | $ | — | ||||||||||||||
Net actuarial loss | 8.7 | |||||||||||||||
Total | $ | 8.7 | ||||||||||||||
Components of Pension Benefit Expense: | Years Ended December 31, | |||||||||||||||
($ in millions) | 2012 | 2011 | 2010 | |||||||||||||
As restated | As restated | |||||||||||||||
and restated | and restated | |||||||||||||||
Service cost | $ | 0.9 | $ | 0.9 | $ | 2.2 | ||||||||||
Interest cost | 28.7 | 30.2 | 30.5 | |||||||||||||
Plan assets expected return | -34.2 | -34.1 | -30.7 | |||||||||||||
Net loss amortization | 7.9 | 4.9 | 4.4 | |||||||||||||
Prior service cost amortization | — | — | — | |||||||||||||
Pension benefit expense | $ | 3.3 | $ | 1.9 | $ | 6.4 | ||||||||||
Funding Status of Employee Pension Plan | ||||||||||||||||
The employee pension plan is a qualified plan that is funded with assets held in a trust. It is the Company’s practice to make contributions to the qualified pension plan at least sufficient to avoid benefit restrictions under funding requirements of the Pension Protection Act of 2006. This generally requires the Company to maintain assets that are at least 80% of the plan’s liabilities as calculated under the applicable regulations at the end of the prior year. Under these regulations, the qualified pension plan is currently funded above 80% of the funding target liabilities as of December 31, 2012. | ||||||||||||||||
The funded status of the qualified pension plan based on the projected benefit obligations for the years ended December 31, 2012 and 2011 are summarized in the following table: | ||||||||||||||||
Qualified Employee Pension Plan Funded Status: | As of December 31, | |||||||||||||||
($ in millions) | 2012 | 2011 | ||||||||||||||
As restated | ||||||||||||||||
and amended | ||||||||||||||||
Plan assets, end of year | $ | 475.8 | $ | 437.6 | ||||||||||||
Projected benefit obligation, end of year | -694.8 | -646.3 | ||||||||||||||
Plan assets less than projected benefit obligations, end of year | $ | -219 | $ | -208.7 | ||||||||||||
To meet the above funding objectives, we made contributions to the pension plan totaling $18.2 million and $17.3 million during 2012 and 2011, respectively. Over the next 12 months, we expect to make contributions of approximately $11.4 million from the Company’s operating cash flow. On July 6, 2012, the Surface Transportation Extension Act of 2012, Part II, was enacted into law and was effective immediately. The law includes certain pension funding stabilization provisions, which the Company has taken advantage of in 2012. | ||||||||||||||||
Fair Value Measurement—Employee Pension Plan Assets | ||||||||||||||||
For a discussion of the methods employed by us to measure the fair value of invested assets, see Note 14 to these financial statements. The following discussion of fair value measurements applies exclusively to our employee pension plan assets. | ||||||||||||||||
The estimated fair value of U.S. Treasury and equity securities are included in the amount disclosed in Level 1 as the estimates are based on quoted market prices. For fixed income instruments held by the plan for which quoted market prices are not available, we estimate fair value by discounting debt security cash flows to reflect interest rates currently being offered on similar terms to borrowers of similar credit quality or by quoted market prices of comparable instruments. Accordingly, the estimates of fair value for our fixed income and state and municipal securities are included in the amount disclosed in Level 2 of the hierarchy. | ||||||||||||||||
The following table presents the level within the fair value hierarchy at which the financial assets of the Company's employee pension plan are measured on a recurring basis at December 31, 2012. | ||||||||||||||||
Fair Value of Assets by Type and Level: | As of December 31, 2012 | |||||||||||||||
($ in millions) | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Mercer Group Trust | $ | — | $ | 408.1 | $ | — | $ | 408.1 | ||||||||
Duff & Phelps Real Estate Securities Trust | — | 10.6 | — | 10.6 | ||||||||||||
Total assets at fair value(1) | $ | — | $ | 418.7 | $ | — | $ | 418.7 | ||||||||
——————— | ||||||||||||||||
-1 | ||||||||||||||||
Excludes $50.1 million in limited partnerships and real estate investments accounted for on the equity method as well as $4.3 million in cash and cash equivalents and money market funds. | ||||||||||||||||
The following table presents the level within the fair value hierarchy at which the financial assets of the Company's employee pension plan are measured on a recurring basis at December 31, 2011. | ||||||||||||||||
Fair Value of Assets by Type and Level: | As of December 31, 2011 | |||||||||||||||
($ in millions) | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Equity Securities | ||||||||||||||||
Common stocks | $ | 284.4 | $ | — | $ | — | $ | 284.4 | ||||||||
Phoenix common stock | 0.6 | — | — | 0.6 | ||||||||||||
Debt Securities | ||||||||||||||||
Fixed maturities: | ||||||||||||||||
Asset-backed | — | 1.3 | — | 1.3 | ||||||||||||
CMO/CMBS | — | 9.9 | — | 9.9 | ||||||||||||
Corporate | — | 31.4 | — | 31.4 | ||||||||||||
Mortgage-backed | — | 17.9 | — | 17.9 | ||||||||||||
Other | — | 6.7 | — | 6.7 | ||||||||||||
U.S. government securities | 21.6 | — | — | 21.6 | ||||||||||||
State & municipal securities | — | 11.1 | — | 11.1 | ||||||||||||
Total assets at fair value(1) | $ | 306.6 | $ | 78.3 | $ | — | $ | 384.9 | ||||||||
——————— | ||||||||||||||||
-1 | ||||||||||||||||
Excludes $40.4 million in limited partnerships and real estate investments accounted for on the equity method as well as $9.0 million in cash and cash equivalents and money market funds. | ||||||||||||||||
Supplemental Plans | ||||||||||||||||
The Company also has two supplemental plans that provide benefits to certain executives in excess of the primary plan. These plans are unfunded and represent general obligations of the Company. We fund periodic benefit payments to retirees as they become due under these plans from cash flow from operations. | ||||||||||||||||
The following tables set forth a reconciliation of beginning and ending balances of the projected benefit obligation of the Company’s supplemental plans for the years ended December 31, 2012 and 2011. | ||||||||||||||||
Changes in Plan Assets and Benefit Obligations: | Supplemental Plan | |||||||||||||||
($ in millions) | Years Ended December 31, | |||||||||||||||
2012 | 2011 | 2010 | ||||||||||||||
As restated | As restated | |||||||||||||||
and amended | and amended | |||||||||||||||
Plans’ Projected Benefit Obligation | ||||||||||||||||
Service and interest cost accrual | $ | -6.1 | $ | -6.6 | $ | -7.7 | ||||||||||
Actuarial gain (loss) | -12.7 | -12.4 | -8.7 | |||||||||||||
Plan disbursements | 9.8 | 13.9 | 13.9 | |||||||||||||
Plan amendments | — | — | — | |||||||||||||
Change in projected benefit obligation | -9 | -5.1 | -2.5 | |||||||||||||
Projected benefit obligation, beginning of period | -141.9 | -136.8 | -134.3 | |||||||||||||
Projected benefit obligation, end of period | $ | -150.9 | $ | -141.9 | $ | -136.8 | ||||||||||
Plan assets less than projected benefit obligations, end of period | $ | -150.9 | $ | -141.9 | $ | -136.8 | ||||||||||
Accumulated benefit obligation | $ | 150.9 | $ | 141.9 | $ | 136.8 | ||||||||||
Amounts Recognized in Consolidated Balance Sheets: | Supplemental Plan | |||||||||||||||
($ in millions) | Years Ended December 31, | |||||||||||||||
2012 | 2011 | |||||||||||||||
As restated | ||||||||||||||||
and amended | ||||||||||||||||
Other liabilities | $ | -150.9 | $ | -141.9 | ||||||||||||
Amounts Recorded in Accumulated Other Comprehensive Loss as of the end of the | Supplemental Plan | |||||||||||||||
period and the related changes in these items during the period are as follows: | Years Ended December 31, | |||||||||||||||
($ in millions) | 2012 | 2011 | 2010 | |||||||||||||
As restated | As restated | |||||||||||||||
and restated | and restated | |||||||||||||||
Balance, beginning of period | $ | 66.9 | $ | 56.6 | $ | 49.5 | ||||||||||
Deferrals for the period | 12.7 | 12.3 | 8.7 | |||||||||||||
Amortization for the period | -2.4 | -2 | -1.6 | |||||||||||||
Total balance, end of period | $ | 77.2 | $ | 66.9 | $ | 56.6 | ||||||||||
Amounts in accumulated other comprehensive loss that are expected to be recognized | Supplemental | |||||||||||||||
as components of net periodic cost (credit) during the next fiscal year are as follows: | Plan | |||||||||||||||
($ in millions) | ||||||||||||||||
Prior service (credit) cost | $ | — | ||||||||||||||
Net actuarial loss | 2.9 | |||||||||||||||
Total | $ | 2.9 | ||||||||||||||
Components of Pension Benefit Expense: | Years Ended December 31, | |||||||||||||||
($ in millions) | 2012 | 2011 | 2010 | |||||||||||||
As restated | As restated | |||||||||||||||
and amended | and amended | |||||||||||||||
Service cost | $ | — | $ | — | $ | 0.4 | ||||||||||
Interest cost | 6.1 | 6.6 | 7.3 | |||||||||||||
Plan assets expected return | — | — | — | |||||||||||||
Net loss amortization | 2.5 | 2.0 | 1.7 | |||||||||||||
Prior service cost amortization | — | — | — | |||||||||||||
Pension benefit expense | $ | 8.6 | $ | 8.6 | $ | 9.4 | ||||||||||
Other Post-Employment Benefits | ||||||||||||||||
We have historically provided our employees with other post-employment benefits that include health care and life insurance. In December 2009, we announced the decision to eliminate retiree medical coverage for active employees whose age plus years of service did not equal at least 65 as of March 31, 2010. Employees who remain eligible must still meet certain other defined criteria to receive benefits. | ||||||||||||||||
In addition, the cap on the Company’s contribution of retiree medical costs for retirees under the age of 65 was reduced beginning with the 2011 plan year. In October 2012, we announced that effective January 1, 2013, the Company's contribution for pre-65 retiree medical and for post-65 retiree medical was reduced per covered member. These decisions affected retiree medical contributions for both past service and active employees. Curtailments were recognized as a result of the plan changes. | ||||||||||||||||
This decision affected benefits attributed to past service for employees that were not grandfathered into retiree medical coverage as well as the expected years of future service for the reduction in the cap for retiree medical costs. Both a negative plan amendment and curtailment were recognized as a result of the plan changes. | ||||||||||||||||
Components of Postretirement Benefit Expense: | Years Ended December 31, | |||||||||||||||
($ in millions) | 2012 | 2011 | 2010 | |||||||||||||
Service cost | $ | 0.3 | $ | 0.4 | $ | 0.4 | ||||||||||
Interest cost | 1.9 | 2.7 | 3.0 | |||||||||||||
Net gain amortization | -0.2 | — | -0.1 | |||||||||||||
Prior service cost amortization | -1.6 | -2.1 | -2.1 | |||||||||||||
Other postretirement benefit expense | $ | 0.4 | $ | 1.0 | $ | 1.2 | ||||||||||
Changes in Plan Accumulated Benefit Obligation: | Years Ended December 31, | |||||||||||||||
($ in millions) | 2012 | 2011 | 2010 | |||||||||||||
As restated | As restated | |||||||||||||||
and amended | and amended | |||||||||||||||
Service and interest cost accrued | $ | -2.1 | $ | -3.1 | $ | -3.4 | ||||||||||
Actuarial gain (loss) | 3.9 | -3.8 | 0.3 | |||||||||||||
Plan disbursements | 5.3 | 6.2 | 6.0 | |||||||||||||
Plan amendments | 11.9 | 0.4 | — | |||||||||||||
Change in projected benefit obligation | 19.0 | -0.3 | 2.9 | |||||||||||||
Accumulated benefit obligations, beginning of period | -59.6 | -59.3 | -62.2 | |||||||||||||
Accumulated benefit obligations, end of period | $ | -40.6 | $ | -59.6 | $ | -59.3 | ||||||||||
Amounts Recognized in Consolidated Balance Sheets: | As of December 31, | |||||||||||||||
($ in millions) | 2012 | 2011 | ||||||||||||||
As restated | ||||||||||||||||
and amended | ||||||||||||||||
Other liabilities | $ | -40.6 | $ | -59.6 | ||||||||||||
Amounts Recorded in Accumulated Other Comprehensive Loss as of the end of the | Other Post-Employment Benefits | |||||||||||||||
period and the related changes in these items during the period are as follows: | Years Ended December 31, | |||||||||||||||
($ in millions) | 2012 | 2011 | 2010 | |||||||||||||
As restated | As restated | |||||||||||||||
and restated | and restated | |||||||||||||||
Balance, beginning of period | $ | -0.4 | $ | -4.3 | $ | -4.1 | ||||||||||
Deferrals for the period – net actuarial loss / (gain) | -4 | 3.9 | -0.3 | |||||||||||||
Amortization for the period – net actuarial loss / (gain) | 0.1 | — | 0.1 | |||||||||||||
Subtotal, end of period | -4.3 | -0.4 | -4.3 | |||||||||||||
Balance, beginning of period | -1.7 | -3.4 | -5.4 | |||||||||||||
Deferrals for prior service cost / (credit) | -11.9 | -0.4 | 2.0 | |||||||||||||
Amortization for prior service cost / (credit) | 1.6 | 2.1 | — | |||||||||||||
Subtotal, end of period | -12 | -1.7 | -3.4 | |||||||||||||
Total balance, end of period | $ | -16.3 | $ | -2.1 | $ | -7.7 | ||||||||||
The postretirement benefit plan is unfunded and had projected benefit obligations of $40.6 million and $59.6 million as of December 31, 2012 and 2011, respectively. We fund periodic benefit payments under this plan from cash flows from operations as they become due. | ||||||||||||||||
Gain amounts in accumulated other comprehensive loss that are expected to be recognized as components of net periodic postretirement credits for the next fiscal year are $1.2 million, all of which relate to prior service cost. | ||||||||||||||||
Employment Agreements and Restructuring Expense | ||||||||||||||||
We have entered into agreements with certain key executives of the Company that will, in certain circumstances, provide separation benefits upon the termination of the executive’s employment by the Company for reasons other than death, disability, cause or retirement, or by the executive for “good reason,” as defined in the agreements. The agreements provide this protection only if the termination occurs following (or is effectively connected with) the occurrence of a change of control, as defined in the agreements. As soon as reasonably possible upon a change in control, as so defined, we are required to make an irrevocable contribution to a trust in an amount sufficient to pay benefits due under these agreements. | ||||||||||||||||
401(k) Plan | ||||||||||||||||
The Company’s employees are eligible to participate in a 401(k) plan. Under this plan, employees may contribute up to 60% of eligible base salary, and then the Company matches up to 6% of an employee’s contributions at certain percentage levels. Certain employees can elect to defer a certain percentage of their base pay into the Company’s Non-Qualified Excess Investment Plan and receive a Company match based upon the same formula in our 401(k) plan. All balances under this plan are unfunded general obligations of the Company, which the Company hedges by making contributions to a trust subject to the claims of our creditors in certain circumstances. Expense recognized related to the 401(k) plan was $3.4 million, $5.0 million and $5.1 million in 2012, 2011 and 2010, respectively. | ||||||||||||||||
Effective April 1, 2010, employees of the Company (except Saybrus employees) are eligible to receive an annual employer discretionary contribution according to the 401(k) plan terms. | ||||||||||||||||
On November 8, 2012, purchases in the Company stock fund were suspended due to the restatement. | ||||||||||||||||
Additional Retirement Benefits | ||||||||||||||||
We have agreements with certain of our employees that provide for additional retirement benefits. In the year ended December 31, 2012, the estimated liability for these agreements was $18.4 million. |
18_ShareBased_Payments
18. Share-Based Payments | 12 Months Ended | ||||||||||||||
Dec. 31, 2012 | |||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | ||||||||||||||
18. Share-Based Payments | ' | ||||||||||||||
We provide share-based compensation to certain of our employees and non-employee directors, as further described below. The compensation cost that has been charged against income for these plans is summarized in the following table: | |||||||||||||||
Share-based Compensation Plans: | Years Ended December 31, | ||||||||||||||
($ in millions) | 2012 | 2011 | 2010 | ||||||||||||
As restated | As restated | ||||||||||||||
and amended | and amended | ||||||||||||||
Compensation cost charged to income from continuing operations | $ | 2.6 | $ | 4.4 | $ | 5.6 | |||||||||
Income tax benefit before valuation allowance | $ | -0.9 | $ | -0.9 | $ | -1.1 | |||||||||
We did not capitalize any cost of stock-based compensation during the three years ended December 31, 2012. | |||||||||||||||
Stock options | |||||||||||||||
Each option, once vested, entitles the holder to purchase one share of our common stock. The employees’ options vest over a three-year period while the directors’ options vest immediately. Once vested, options become exercisable. For stock options awarded, we recognize expense over the vesting period equal to their fair value at issuance. We calculate the fair value of options using the Black-Scholes option valuation model. The Stock Incentive Plan authorizes the issuance to officers and employees of up to that number of options equal to 5% of the total number of common stock shares outstanding immediately after the initial public offering in June 2001, or approximately 262,500 shares, plus an additional 1%, or approximately 52,500 shares, for officers and employees, less the number of share options issuable under the Directors’ Stock Plan. The Directors’ Stock Plan authorizes the issuance to non-employee directors of up to that number of options equal to 0.5%, or approximately 26,250 shares, of the total number of common stock shares outstanding immediately after the initial public offering in June 2001, plus 25,000 shares, bringing the total to approximately 51,250 shares. There were 2,053 stock options granted during 2012. | |||||||||||||||
Key Assumptions Used in Option Valuation: | Years Ended December 31, | ||||||||||||||
2012 | 2011 | 2010 | |||||||||||||
Expected term(1) | 10 years | N/A | 6 years | ||||||||||||
Weighted-average expected volatility | 37.7% | 31.0% | |||||||||||||
Weighted-average interest rate | 1.9% | 3.9% | |||||||||||||
Weighted-average common share dividend yield | 0.0% | 0.0% | |||||||||||||
——————— | |||||||||||||||
-1 | |||||||||||||||
Insufficient historical share option exercise experience exists. Therefore, a simplified method for estimating a stock option term was used. | |||||||||||||||
A summary of the stock option activity as of and for the year ended December 31, 2012 is as follows: | |||||||||||||||
Summary of Stock Option Activity:(1) | Year Ended December 31, 2012 | ||||||||||||||
($ in millions, except share data) | Weighted- | ||||||||||||||
Weighted- | Average | ||||||||||||||
Average | Remaining | Aggregate | |||||||||||||
Common | Exercise | Contractual | Intrinsic | ||||||||||||
Shares | Price | Term | Value | ||||||||||||
Outstanding, beginning of period | 177,798 | $ | 228.36 | 2.56 | $ | — | |||||||||
Granted | 2,053 | 34.38 | — | — | |||||||||||
Exercised | -250 | 10.60 | — | — | |||||||||||
Forfeited | -88,202 | 266.56 | — | — | |||||||||||
Canceled/expired | -210 | 56.80 | — | — | |||||||||||
Outstanding, end of period | 91,189 | $ | 188.04 | 1.57 | $ | — | |||||||||
Vested and exercisable, end of period | 86,089 | $ | 196.42 | 1.28 | $ | — | |||||||||
——————— | |||||||||||||||
-1 | |||||||||||||||
All share amounts for all periods reflect the 1-for-20 reverse stock split, which was effective August 10, 2012. See Note 11 to our consolidated financial statements for additional information on the reverse stock split. | |||||||||||||||
Weighted-Average Fair Value: (1) | Years Ended December 31, | ||||||||||||||
2012 | 2011 | 2010 | |||||||||||||
Common | Grant Date | Common | Grant Date | Common | Grant Date | ||||||||||
Shares | Fair Value | Shares | Fair Value | Shares | Fair Value | ||||||||||
Options granted | 2,053 | $ | 9.03 | 0 | $ | — | 11,020 | $ | 28.40 | ||||||
——————— | |||||||||||||||
-1 | |||||||||||||||
All share amounts for all periods reflect the 1-for-20 reverse stock split, which was effective August 10, 2012. See Note 11 to our consolidated financial statements for additional information on the reverse stock split. | |||||||||||||||
There were 250 options exercised for the year ended December 31, 2012. There were no options exercised for the years ended December 31, 2011 and 2010. We issue new shares to satisfy option exercises. | |||||||||||||||
As of December 31, 2012, $0.1 million of total compensation cost related to non-vested stock options was unrecognized. That cost is expected to be recognized over a weighted-average period of 1.4 years. | |||||||||||||||
In addition to the stock option activity above, 12,500 stock options are subject to future issuance based on the achievement of market criteria established under certain of our incentive plans. The market contingencies for these stock options will be resolved no later than June 30, 2014. | |||||||||||||||
Restricted stock units and Restricted stock | |||||||||||||||
We have RSU plans under which we grant RSUs to employees and non-employee directors. RSUs granted to employees are performance-vested, time-vested or a combination thereof. Each RSU, once vested, entitles the holder to one share of our common stock when the restriction expires. We recognize compensation expense over the vesting period of the RSUs, which is generally three years for each award. | |||||||||||||||
A summary of the RSU activity as of and for the year ended December 31, 2012 is as follows: | |||||||||||||||
Summary of RSU Activity: (1) | Years Ended December 31, 2012 | ||||||||||||||
Time-Vested | Performance-Contingent | ||||||||||||||
Weighted- | Weighted- | ||||||||||||||
Average | Average | ||||||||||||||
Grant Date | Grant Date | ||||||||||||||
Number | Fair Value | Number | Fair Value | ||||||||||||
Outstanding, beginning of period | 123,377 | $ | 56.51 | 22,655 | $ | 44.04 | |||||||||
Awarded | 16,497 | 26.95 | — | — | |||||||||||
Adjustment for performance results | — | — | 5,119 | 50.40 | |||||||||||
Conversion of performance-contingent awards | — | — | — | — | |||||||||||
Converted to common shares/applied to taxes | -3,726 | 46.27 | — | — | |||||||||||
Forfeited | -1,254 | 42.45 | -10,750 | 29.60 | |||||||||||
Outstanding, end of period | 134,894 | $ | 53.31 | 17,024 | $ | 55.07 | |||||||||
——————— | |||||||||||||||
-1 | |||||||||||||||
All share amounts for all periods reflect the 1-for-20 reverse stock split, which was effective August 10, 2012. See Note 11 to our consolidated financial statements for additional information on the reverse stock split. | |||||||||||||||
The shares underlying these awards will be issued upon vesting unless the participant elects to defer receipt. Deferred awards will be issued on each employee’s and each director’s respective termination or retirement. We issue new shares to satisfy RSU conversions. | |||||||||||||||
RSUs Awarded: (1) | Years Ended December 31, | ||||||||||||||
2012 | 2011 | 2010 | |||||||||||||
Weighted- | Weighted- | Weighted- | |||||||||||||
Average | Average | Average | |||||||||||||
Grant Date | Grant Date | Grant Date | |||||||||||||
Number | Fair Value | Number | Fair Value | Number | Fair Value | ||||||||||
Time-vested RSUs awarded | 16,497 | $ | 26.95 | 21,426 | $ | 36.20 | 17,328 | $ | 46.40 | ||||||
Performance-contingent | — | $ | — | 11,905 | $ | 50.40 | 69,475 | $ | 56.80 | ||||||
RSUs awarded | |||||||||||||||
——————— | |||||||||||||||
-1 | |||||||||||||||
All share amounts for all periods reflect the 1-for-20 reverse stock split, which was effective August 10, 2012. See Note 11 to our consolidated financial statements for additional information on the reverse stock split. | |||||||||||||||
RSU Values: | Years Ended December 31, | ||||||||||||||
($ in millions) | 2012 | 2011 | 2010 | ||||||||||||
Intrinsic value of RSUs converted | $ | 0.1 | $ | 0.7 | $ | 1.4 | |||||||||
Total grant date fair value of RSUs vested converted to common shares | $ | 0.2 | $ | 2.8 | $ | 4.4 | |||||||||
As of December 31, 2012, $1.1 million of total compensation cost related to service-vested RSU awards was unrecognized. That cost is expected to be recognized over a weighted-average period of 1.0 years. | |||||||||||||||
There are no RSUs subject to future issuance based on the achievement of market criteria established under certain of our incentive plans. | |||||||||||||||
Liability Awards | |||||||||||||||
The Company has issued cash-settled awards with payouts linked to the performance of the Company’s stock to certain employees and executive officers. Each recipient is granted a base cash payout that is adjusted according to a formula that integrates the current stock price and the achievement of certain other Company performance criteria. Cash-settled awards are recorded as liabilities and remeasured at the end of each reporting period until final payout is made. Unlike stock-settled awards, which have a fixed grant date fair value, the fair value of the unsettled liability awards are remeasured based upon an updated calculation of the fair value of the award given changes in the criteria noted above. | |||||||||||||||
During the years ended December 31, 2012 and 2011, the Company issued awards that are intended to be settled in cash. As of December 31, 2012 and 2011, a liability of $1.7 million and $3.9 million, respectively was accrued for these awards. No cash payments were made related to these awards for the years ended December 31, 2012 and 2011. |
19_Earnings_Per_Share
19. Earnings Per Share | 12 Months Ended | |||||
Dec. 31, 2012 | ||||||
LOSS PER SHARE: | ' | |||||
19. Earnings Per Share | ' | |||||
Shares Used in Calculation of Earnings Per Share:(1) | Years Ended December 31, | |||||
(shares in thousands) | 2012 | 2011 | 2010 | |||
Weighted-average common shares outstanding | 5,770 | 5,815 | 5,803 | |||
Weighted-average effect of dilutive potential common shares: | ||||||
Restricted stock units | 75 | 71 | 15 | |||
Employee stock options | 1 | — | — | |||
Potential common shares | 76 | 71 | 15 | |||
Less: Potential common shares excluded from calculation due to net losses | -76 | -71 | -15 | |||
Dilutive potential common shares | — | — | — | |||
Weighted-average common shares outstanding, including | 5,770 | 5,815 | 5,803 | |||
dilutive potential common shares | ||||||
——————— | ||||||
-1 | ||||||
All share amounts for all periods reflect the 1-for-20 reverse stock split, which was effective August 10, 2012. See Note 11 to our consolidated financial statements for additional information on the reverse stock split. | ||||||
As a result of the net loss from continuing operations for the years ended December 31, 2012, 2011 and 2010, we are required to use basic weighted average common shares outstanding in the calculation of diluted earnings per share for those periods, since the inclusion of shares of restricted stock units and options would have been anti-dilutive to the earnings per share calculation. | ||||||
On August 10, 2012, a 1-for-20 reverse stock split became effective and an odd lot program was subsequently instituted following the 1-for-20 reverse stock split. The odd lot program terminated as of October 26, 2012. | ||||||
The reverse stock split reduced the shares of common stock outstanding from approximately 116.0 million to approximately 5.8 million. All weighted-average common shares outstanding for the years ended December 31, 2012, 2011 and 2010, respectively, have been adjusted to reflect the 1-for-20 reverse stock split. See Note 11 to these financial statements for additional information on the reverse stock split. |
20_Segment_Information
20. Segment Information | 12 Months Ended | ||||||||
Dec. 31, 2012 | |||||||||
Segment Reporting [Abstract] | ' | ||||||||
20. Segment Information | ' | ||||||||
In managing our business, we analyze segment performance on the basis of operating income. Operating income, as well as components of and financial measures derived from operating income, are non-U.S. GAAP financial measures. | |||||||||
Management believes that these measures provide additional insight into the underlying trends in our operations and are the internal performance measures we use in the management of our operations, including our compensation plans and planning processes. However, our non-U.S. GAAP financial measures should not be considered as substitutes for net income or measures that are derived from or incorporate net income and may be different from similarly titled measures of other companies. Investors should evaluate both U.S. GAAP and non-U.S. GAAP financial measures when reviewing our performance. Operating income is calculated by excluding realized investment gains (losses) as their amount and timing may be subject to management’s investment decisions. | |||||||||
Segment Information on Revenues: | Years Ended December 31, | ||||||||
($ in millions) | 2012 | 2011 | 2010 | ||||||
As restated | As restated | ||||||||
and amended | and amended | ||||||||
Life and Annuity (1) | $ | 1,777.1 | $ | 1,828.8 | $ | 1,966.8 | |||
Saybrus Partners (2) | 22.9 | 18.2 | 6.0 | ||||||
Less: Intercompany revenues (3) | 10.8 | 10.5 | 2.5 | ||||||
Total revenues | $ | 1,789.2 | $ | 1,836.5 | $ | 1,970.3 | |||
——————— | |||||||||
-1 | |||||||||
Includes intercompany interest revenue of $0.6 million, $0.8 million and $0.2 million for the years ended December 31, 2012, 2011 and 2010. | |||||||||
-2 | |||||||||
Includes intercompany commission revenue of $11.4 million, $11.3 million and $2.7 million for the years ended December 31, 2012, 2011 and 2010. | |||||||||
-3 | |||||||||
All intercompany balances are eliminated in consolidating the financial statements. | |||||||||
Life and Annuity derives revenue from premiums, fee income and COI charges and net investment income. Saybrus derives revenue primarily from fees collected for advisory and distribution services. | |||||||||
Results of Operations by Segment as Reconciled to Consolidated Net Income (Loss): | Years Ended December 31, | ||||||||
($ in millions) | 2012 | 2011 | 2010 | ||||||
As restated | As restated | ||||||||
and amended | and amended | ||||||||
Life and Annuity operating income (loss) | $ | -160 | $ | 35.9 | $ | -11.4 | |||
Saybrus Partners operating income (loss) | 2.6 | -1.3 | -19 | ||||||
Less: Applicable income tax expense (benefit) | -3.7 | 12.3 | -10.3 | ||||||
Loss from discontinued operations, net of income taxes | -15.6 | -21.6 | -3.6 | ||||||
Net realized investment losses | -10.5 | -32.1 | -11.2 | ||||||
Gain on debt repurchase | 11.9 | 0.2 | — | ||||||
Less: income (loss) attributable to noncontrolling interests | 0.6 | -0.5 | -0.5 | ||||||
Net loss | $ | -168.5 | $ | -30.7 | $ | -34.4 | |||
We have not provided asset information for the segments. The assets attributable to Saybrus are not significant relative to the assets of our consolidated balance sheets and are not utilized by the chief operating decision maker. All third-party interest revenue and interest expense of the Company reside within the Life and Annuity segment. | |||||||||
21_Discontinued_Operations
21. Discontinued Operations | 12 Months Ended |
Dec. 31, 2012 | |
Notes to Financial Statements | ' |
21. Discontinued Operations | ' |
PFG Holdings, Inc. | |
On January 4, 2010, we signed a definitive agreement to sell PFG and its subsidiaries, including AGL Life Assurance Company, to Tiptree. Because of the divestiture, these operations are reflected as discontinued operations. On June 23, 2010, we completed the divestiture of PFG and closed the transaction. | |
The definitive agreement contains a provision requiring us to indemnify Tiptree for any losses due to actions resulting from certain specified acts or omissions associated with the divested business prior to closing. There has been litigation filed that falls within this provision of the agreement but does not name the Company as a party to the litigation. We intend to defend these matters vigorously based on our indemnity commitment. See Note 24 to these financial statements related to contingencies remaining from the sale. | |
There were no assets or liabilities on the consolidated balance sheets identified as discontinued operations related to PFG at December 31, 2012 and 2011. | |
During the years ended December 31, 2012, 2011 and 2010, net losses recognized for discontinued operations were $5.7 million, $3.0 million and $1.4 million, respectively, and primarily related to the indemnification of Tiptree. | |
See Note 4 to these financial statements for additional information. | |
Phoenix Life and Reassurance Company of New York | |
Included in the January 4, 2010 agreement with Tiptree was a provision for the purchase of PLARNY pending regulatory approval. On September 24, 2010, approval was obtained from the NYDFS for Tiptree and PFG Holdings Acquisition Corporation to acquire PLARNY. The transaction closed on October 6, 2010. Because of the divestiture, these operations are reflected as discontinued operations. We have reclassified prior period financial statements to conform to this change. | |
No net income related to PLARNY was recognized during the years ended December 31, 2012 and 2011. Net income of $1.0 million was recognized during the year ended December 31, 2010. Prior to the closing of the transaction, PLARNY made a dividend distribution in the fourth quarter of 2010 of $10.0 million to its parent company, PM Holdings, Inc., in accordance with the sales agreement. A loss of $0.1 million was recognized during the year ended December 31, 2010 related to this transaction. | |
Discontinued Reinsurance Operations | |
In 1999, we discontinued our reinsurance operations through a combination of sale, reinsurance and placement of certain retained group accident and health reinsurance business into run-off. We adopted a formal plan to stop writing new contracts covering these risks and to end the existing contracts as soon as those contracts would permit. However, we remain liable for claims under contracts which have not been commuted. | |
We have established reserves for claims and related expenses that we expect to pay on our discontinued group accident and health reinsurance business. These reserves are based on currently known facts and estimates about, among other things, the amount of insured losses and expenses that we believe we will pay, the period over which they will be paid, the amount of reinsurance we believe we will collect from our retrocessionaires and the likely legal and administrative costs of winding down the business. Losses of $9.9 million in 2012, $18.6 million in 2011 and $3.2 million in 2010 were recognized primarily related to adverse developments which occurred during these respective years. See Note 24 to these financial statements for additional discussion on remaining liabilities of our discontinued reinsurance operations. |
22_Phoenix_Life_Statutory_Fina
22. Phoenix Life Statutory Financial Information and Regulatory Matters | 12 Months Ended | ||||||||
Dec. 31, 2012 | |||||||||
Notes to Financial Statements | ' | ||||||||
22. Phoenix Life Statutory Financial Information and Regulatory Matters | ' | ||||||||
Our insurance subsidiaries are required to file, with state regulatory authorities, annual statements prepared on an accounting basis prescribed or permitted by such authorities. | |||||||||
As of December 31, 2012, statutory surplus differs from equity reported in accordance with U.S. GAAP for life insurance companies primarily as follows: | |||||||||
· | policy acquisition costs are expensed when incurred; | ||||||||
· | impairments on investments are based on different assumptions; | ||||||||
· | surplus notes are included in surplus rather than debt; | ||||||||
· | postretirement benefit expense allocated to Phoenix Life relate only to vested participants and expense is based on different assumptions and reflect a different method of adoption; | ||||||||
· | life insurance reserves are based on different assumptions; and | ||||||||
· | deferred tax assets are limited to amounts reversing in a specified period with an additional limitation based upon 10% or 15% of statutory surplus, dependent on meeting certain risk-based capital (“RBC”) thresholds. | ||||||||
The information below is taken from the Life Companies annual statements filed with state regulatory authorities. | |||||||||
Statutory Financial Data for Phoenix Life:(1) | As of or for the Years Ended December 31, | ||||||||
($ in millions) | 2012 | 2011 | 2010 | ||||||
Statutory capital, surplus and surplus notes | $ | 793.6 | $ | 728.8 | $ | 658.5 | |||
Asset valuation reserve (“AVR”) | 128.9 | 116.9 | 104.7 | ||||||
Statutory capital, surplus and AVR(2) | $ | 922.5 | $ | 845.7 | $ | 763.2 | |||
Statutory net gain from operations | $ | 160.5 | $ | 130.5 | $ | 147.8 | |||
Statutory net income | $ | 156.2 | $ | 95.0 | $ | 139.8 | |||
——————— | |||||||||
-1 | Prior to adjustments found in the Restatement and statutory and U.S. GAAP audits. | ||||||||
-2 | Includes all life insurance subsidiaries in consolidation. | ||||||||
In its 2013 annual statement filed with state regulatory authorities, Phoenix Life made $29.9 million of net prior period adjustments which decreased surplus during 2013 as a result of errors found in the Restatement and statutory and U.S. GAAP audits. These adjustments included $33.1 million of net negative prior period adjustments recorded in surplus and net prior period adjustments of $3.2 million in the carrying value of insurance company subsidiaries reflected in the change in net unrealized capital gains. Subsequent to the filing of the 2013 annual statement, Phoenix Life identified $11.7 million of additional net negative prior period adjustments for 2012 as a result of errors found in the Restatement and statutory and U.S. GAAP audits. These adjustments include $4.4 million of net negative prior period adjustments which will be recorded in Phoenix Life’s surplus and $0.5 million of net prior period adjustments in the carrying value of insurance company subsidiaries reflected in the change in net unrealized capital gains in the first quarter of 2014. | |||||||||
New York Insurance Law requires that New York life insurers report their RBC. RBC is based on a formula calculated by applying factors to various assets, premium and statutory reserve items. The formula takes into account the risk characteristics of the insurer, including asset risk, insurance risk, interest rate risk and business risk. New York Insurance Law gives the NYDFS explicit regulatory authority to require various actions by, or take various actions against, insurers whose total adjusted capital does not exceed certain RBC levels. Each of the U.S. insurance subsidiaries of Phoenix Life is also subject to these same RBC requirements. Phoenix Life and each of its insurance subsidiaries’ RBC was in excess of 250% of Company Action Level (the level where a life insurance enterprise must submit a comprehensive plan to state insurance regulators) as of December 31, 2012 and 2011. | |||||||||
Our primary sources of liquidity are dividends from Phoenix Life. Under New York Insurance Law, Phoenix Life is permitted to pay stockholder dividends in any calendar year without prior approval from the NYDFS in the amount of the lesser of 10% of Phoenix Life’s surplus to policyholders as of the immediately preceding calendar year or Phoenix Life’s statutory net gain from operations for the immediately preceding calendar year, not including realized capital gains. Phoenix Life declared $71.8 million in dividends in 2012 and under the above formula would be able to pay $78.3 million in dividends in 2013. |
23_Premises_and_Equipment
23. Premises and Equipment | 12 Months Ended | |||||||||||
Dec. 31, 2012 | ||||||||||||
Property, Plant and Equipment [Abstract] | ' | |||||||||||
23. Premises and Equipment | ' | |||||||||||
Premises and equipment are included in other assets in our consolidated balance sheets. | ||||||||||||
Cost and Carrying Value of Premises and Equipment: | As of December 31, | |||||||||||
($ in millions) | 2012 | 2011 | ||||||||||
Carrying | Carrying | |||||||||||
Cost | Value | Cost | Value | |||||||||
Real estate | $ | 92.0 | $ | 27.2 | $ | 89.9 | $ | 25.9 | ||||
Equipment | 86.7 | 16.4 | 89.5 | 22.6 | ||||||||
Leasehold improvements | 0.4 | 0.3 | 1.3 | 0.2 | ||||||||
Premises and equipment cost and carrying value | 179.1 | $ | 43.9 | 180.7 | $ | 48.7 | ||||||
Accumulated depreciation and amortization | -135.2 | -132 | ||||||||||
Premises and equipment | $ | 43.9 | $ | 48.7 | ||||||||
Depreciation and amortization expense for premises and equipment for 2012, 2011 and 2010 totaled $12.0 million, $12.8 million and $11.0 million, respectively. A complete inventory of premises and equipment was undertaken in 2010 which resulted in an adjustment to cost and accumulated depreciation related to fully depreciated assets no longer in use. | ||||||||||||
Rental expenses for operating leases, principally with respect to buildings, amounted to $0.9 million, $1.2 million and $1.6 million in 2012, 2011 and 2010, respectively. Future minimum rental payments under non-cancelable operating leases were $16.4 million as of December 31, 2012, payable as follows: in 2013, $1.4 million; in 2014, $1.3 million; in 2015, $1.3 million; in 2016, $1.3 million; in 2017, $1.4 million and thereafter, $9.7 million. These obligations include amounts for leased property of our discontinued operations of $0.2 million in 2010. All future obligations for leased property of our discontinued operations were assumed by the buyer upon the completion of the sale on June 23, 2010. See Note 21 to these financial statements for additional information. |
24_Contingent_Liabilities
24. Contingent Liabilities | 12 Months Ended |
Dec. 31, 2012 | |
Commitments and Contingencies Disclosure [Abstract] | ' |
24. Contingent Liabilities | ' |
Litigation and arbitration | |
The Company is regularly involved in litigation and arbitration, both as a defendant and as a plaintiff. The litigation and arbitration naming the Company as a defendant ordinarily involves our activities as an insurer, employer, investor, investment advisor or taxpayer. | |
It is not feasible to predict or determine the ultimate outcome of all legal or arbitration proceedings or to provide reasonable ranges of potential losses. It is believed that the outcome of our litigation and arbitration matters are not likely, either individually or in the aggregate, to have a material adverse effect on the financial condition of the Company. However, given the large or indeterminate amounts sought in certain of these matters and the inherent unpredictability of litigation and arbitration, it is possible that an adverse outcome in certain matters could, from time to time, have a material adverse effect on the results of operations or cash flows in particular quarterly or annual periods. | |
SEC Cease-and-Desist Order | |
On February 12, 2014, the Company and PHLVIC submitted an Offer of Settlement with the SEC pursuant to which the Company and PHLVIC consented to the issuance of the form of an Order Instituting Cease-and-Desist Proceedings Pursuant to Section 21C of the Securities Exchange Act of 1934, Making Findings, and Imposing a Cease-and-Desist Order (the “Order”). The Order was approved by the SEC on March 21, 2014. Pursuant to the Order, the Company and PHLVIC have been directed to cease and desist from committing or causing any violations and any future violations of Section 13(a) of the Exchange Act and Rules 13a-1, 13a-13 thereunder and Section 15(d) of the Exchange Act and Rules 15d-1 and 15d-13 thereunder. In addition, the Company and PHLVIC agreed to perform certain undertakings, including for the Company to file its delayed Third Quarter 2012 Form 10-Q by no later than April 15, 2014 and its 2013 Form 10-K by no later than June 4, 2014. Also pursuant to the undertakings, the Company would file its 2013 Forms 10-Q after the filing of its 2013 Form 10-K. The Company intends to become timely with its periodic filings under the Exchange Act with the filing of its Quarterly Report on Form 10-Q for the period ending June 30, 2014. Finally, the Company and PHLVIC paid a civil monetary penalty in the amount of $375,000 to the United States Treasury following the entry of the Order. | |
Cases Brought by Policy Investors | |
On July 29, 2013, Wilmington Savings Fund Society, FSB, as successor in interest to Christiana Bank & Trust Company and as trustee of 59 unnamed trusts, filed a second amended complaint against Phoenix Life and PHLVIC in the United States District Court for the District of Delaware (the case was initially brought on June 5, 2012 in its original venue, the Central District of California, and had been transferred to Delaware by order dated March 28, 2013) (C.A. No. 13-499-RGA). On August 2, 2012, Lima LS PLC filed a complaint against the Company, Phoenix Life, PHLVIC, James D. Wehr, Philip K. Polkinghorn, Edward W. Cassidy, Dona D. Young and other unnamed defendants in the United States District Court for the District of Connecticut (Case No. CV12-01122). On July 1, 2013, the defendants’ motion to dismiss the complaint was granted in part and denied in part. Thereafter, on July 31, 2013, the plaintiff served an amended complaint against the same defendants, with the exception that Mr. Cassidy was dropped as a defendant. | |
In both cases, the plaintiffs allege that Phoenix Life promoted certain policy sales knowing that the policies would ultimately be owned by investors and then challenging the validity of these policies or denying claims submitted on these policies. Plaintiffs are seeking damages, including punitive and treble damages, attorneys' fees and a declaratory judgment. We believe we have meritorious defenses against the lawsuits and we intend to vigorously defend against these claims. The outcome of these litigations and any potential losses are uncertain. | |
Cost of Insurance Cases | |
By order dated July 12, 2013, two separate classes were certified in an action pending in the United States District Court for the Southern District of New York (C.A. No. 1:11-cv-08405-CM-JCF (U.S. Dist. Ct; S.D.N.Y.)) brought by Martin Fleisher and another plaintiff (the “Fleisher Litigation”), on behalf of themselves and others similarly situated, against Phoenix Life. The complaint in the Fleisher Litigation, filed on November 8, 2011, challenges two COI rate adjustments implemented by Phoenix Life, which Phoenix Life maintains were based on policy language permitting such adjustments. The complaint seeks damages for breach of contract. The classes certified in the court’s July 12, 2013 order are limited to holders of Phoenix Life policies issued in New York and subject to New York law. | |
Phoenix Life’s subsidiary, PHLVIC, has been named as a defendant in four actions challenging its COI rate adjustments implemented concurrently with the Phoenix Life adjustments. These four cases, which are not styled as class actions, have been brought against PHLVIC by (1) Tiger Capital LLC (C.A. No. 1:12-cv- 02939-CM-JCF; U.S. Dist. Ct; S.D.N.Y., complaint filed on March 14, 2012; the “Tiger Capital Litigation”) and (2-4) U.S. Bank National Association, as securities intermediary for Lima Acquisition LP ((2: C.A. No. 1:12-cv-06811-CM-JCF; U.S. Dist. Ct; S.D.N.Y., complaint filed on November 16, 2011; 3: C.A. No. 1:13-cv-01580-CM-JCF; U.S. Dist. Ct; S.D.N.Y., complaint filed on March 8, 2013; collectively, the “U.S. Bank N.Y. Litigations”)); and 4: C.A. No. 1:13-cv-00368-GMS; U.S. Dist. Ct; D. Del., complaint filed on March 6, 2013; the “Delaware Litigation”). The Tiger Capital Litigation and the two U.S. Bank N.Y. Litigations have been assigned to the same judge as the Fleisher Litigation, and discovery in these four actions is being coordinated by the court; the Delaware Litigation is proceeding separately. The plaintiffs seek damages and attorneys’ fees for breach of contract and other common law and statutory claims. | |
Complaints to state insurance departments regarding PHLVIC’s COI rate adjustments have also prompted regulatory inquiries or investigations in several states, with two of such states (California and Wisconsin) issuing letters directing PHLVIC to take remedial action in response to complaints by a single policyholder. PHLVIC disagrees with both states’ positions and, on April 30, 2013, Wisconsin commenced an administrative hearing to obtain a formal ruling on its position, which is pending. (OCI Case No. 13- C35362). | |
Phoenix Life and PHLVIC believe that they have meritorious defenses against all of these lawsuits and regulatory directives and intend to vigorously defend against them. The outcome of these matters is uncertain and any potential losses cannot be reasonably estimated. | |
On April 17, 2013, Robert Strougo, et al. filed a complaint against the Company, James D. Wehr and Peter A. Hofmann in the United States District Court for the District of Connecticut (Case No. 13-CV-547-RNC) (the “Strougo Litigation”). On November 1, 2013, the plaintiff filed an amended complaint joining Michael E. Hanrahan as an additional individual defendant. The plaintiff seeks to recover on behalf of himself and a class defined as all persons (other than the defendants) who purchased or otherwise acquired the Company’s securities between May 5, 2009 and August 14, 2013 for claims arising out of the Company’s announced intent to restate previously filed financial statements. The plaintiff alleges that, throughout the class period, the Company made materially false and misleading statements regarding the Company’s business, operational and compliance policies. The plaintiff seeks damages, attorneys’ fees and other litigation costs. We believe we have meritorious defenses against the lawsuit and we intend to vigorously defend against these claims. The outcome of this litigation is uncertain and any potential losses cannot be reasonably estimated. | |
Tiptree Indemnification | |
The definitive agreement to sell PFG contains a provision requiring us to indemnify Tiptree for any losses due to actions resulting from certain specified acts or omissions associated with the divested business prior to closing. There has been litigation filed that falls within this provision of the agreement but does not name the Company as a party to the litigation. We intend to defend these matters vigorously based on our indemnity commitment. | |
In September 2009, Carol Curran, et al. filed a putative class action complaint against certain subsidiaries of the Company, including AGL Life Assurance Company and Phoenix Equity Planning Corporation, as well as an officer of such subsidiaries, and two unrelated parties (Agile Group, LLC and Neal Greenberg), in the District Court (state court), Boulder County, Colorado (Case Number 2009CV907). Plaintiffs asserted claims for relief arising under Colorado statutory and common law and sought to recover damages, including punitive and treble damages, attorneys’ fees and a declaratory judgment. While the case was pending, the Company sold the subsidiaries named in the action and agreed to indemnify such subsidiaries and the officer in the action. This case was settled in the second quarter of 2013 and was resolved without material impact on the consolidated financial results of the Company. | |
Notice of Claim from Reinsurer | |
On June 6, 2012, one of the reinsurers of a Company insurance subsidiary provided notice of a claim, seeking relief under two treaties. This matter was settled effective July 1, 2013 and was resolved without material impact on the consolidated financial results of the Company. | |
Regulatory matters | |
State regulatory bodies, the Securities and Exchange Commission (the “SEC”), the Financial Industry Regulatory Authority (“FINRA”), the IRS and other regulatory bodies regularly make inquiries of us and, from time to time, conduct examinations or investigations concerning our compliance with laws and regulations related to, among other things, our insurance and broker-dealer subsidiaries, securities offerings and registered products. We endeavor to respond to such inquiries in an appropriate way and to take corrective action if warranted. Further, the Company is providing to the SEC certain information and documentation regarding the Restatement and the staff of the SEC has indicated to the Company that the matter remains subject to further investigation and potential further regulatory action. We cannot predict the outcome of any of such investigations or actions related to these or other matters. | |
Regulatory actions may be difficult to assess or quantify. The nature and magnitude of their outcomes may remain unknown for substantial periods of time. It is not feasible to predict or determine the ultimate outcome of all pending inquiries, investigations, legal proceedings and other regulatory actions, or to provide reasonable ranges of potential losses. Based on current information, we believe that the outcomes of our regulatory matters are not likely, either individually or in the aggregate, to have a material adverse effect on our consolidated financial condition. However, given the inherent unpredictability of regulatory matters, it is possible that an adverse outcome in certain matters could, from time to time, have a material adverse effect on our consolidated financial statements in particular quarterly or annual periods. | |
State Insurance Department Examinations | |
During 2012 and 2013, the New York State Department of Financial Services conducted its routine quinquennial financial and market conduct examination covering the period ended December 31, 2012 of the Company’s subsidiary Phoenix Life and the Connecticut Insurance Department conducted its routine financial examination of the Company’s subsidiary, PHLVIC, and two other Connecticut-domiciled insurance subsidiaries. Reports from both Departments are expected in 2014. | |
In 2013, the Connecticut Insurance Department commenced a market conduct examination of Phoenix Life, PHLVIC and the Company’s two other Connecticut-domiciled insurance subsidiaries. The report from this examination will also be available in 2014. | |
Unclaimed Property Inquires | |
On July 5, 2011, the NYDFS issued a letter (“308 Letter”) requiring life insurers doing business in New York to use data available on the U.S. Social Security Administration’s Death Master File or a similar database to identify instances where death benefits under life insurance policies, annuities and retained asset accounts are payable, to locate and pay beneficiaries under such contracts and to report the results of the use of the data. Additionally, the insurers are required to report on their success in finding and making payments to beneficiaries or escheatment of funds deemed abandoned under state laws. We have substantially completed the work associated with this matter and the remaining amount of claim and interest payments to beneficiaries or state(s) has been recorded in policy liabilities and accruals. In addition, 39 states have indicated their intent to perform an unclaimed property audit of funds deemed abandoned under state laws. These audits have not yet begun. | |
Discontinued Reinsurance Operations | |
In 1999, Phoenix Life discontinued reinsurance operations through a combination of sale, reinsurance and placement of certain retained group accident and health reinsurance business into run-off. A formal plan was adopted to stop writing new contracts covering these risks and to end existing contracts as soon as those contracts would permit. However, Phoenix Life remains subject to claims under contracts that have not been commuted. Certain discontinued group accident and health reinsurance business was the subject of disputes concerning the placement of the business with reinsurers and the recovery of reinsurance. These disputes have been substantially resolved or settled. | |
We have established reserves for claims and related expenses that we expect to pay on our discontinued group accident and health reinsurance business. These reserves are based on currently known facts and estimates about, among other things, the amount of insured losses and expenses that we believe we will pay, the period over which they will be paid, the amount of reinsurance we believe we will collect from our retrocessionaires and the likely legal and administrative costs of winding down the business. | |
Phoenix Life expects reserves and reinsurance to cover the run-off of the business; however, unfavorable or favorable claims and/or reinsurance recovery experience are reasonably possible and could result in our recognition of additional losses or gains in future years. Management believes, based on current information and after consideration of the provisions made in these financial statements, that any future adverse or favorable development of recorded reserves and/or reinsurance recoverables will not have a material adverse effect on its financial position. Nevertheless, it is possible that future developments could have a material adverse effect on our results of operations. | |
Our total policy liabilities and accruals were $45.3 million and $75.1 million as of December 31, 2012 and 2011, respectively. Our total amounts recoverable from retrocessionaires related to paid losses were $0.7 million and $2.0 million as of December 31, 2012 and 2011, respectively. Losses of $9.9 million in 2012, $18.6 million in 2011 and $3.2 million in 2010 were recognized. During 2012, the Company completed commutations for a total of $30.1 million, substantially reducing its remaining exposure. During 2011, the Company strengthened reserves to reflect developments in the contracts underlying the block. During 2010, we received and evaluated additional claims information that became available from certain ceding companies. |
25_Other_Commitments
25. Other Commitments | 12 Months Ended |
Dec. 31, 2012 | |
Commitments and Contingencies Disclosure [Abstract] | ' |
25. Other Commitments | ' |
During 2008, we announced an amendment to our agreement with HP Enterprise Services related to the management of our infrastructure services. The amendment covered the years 2009 to 2015. The remaining commitments total $45.1 million: $15.2 million in 2013, $15.0 million in 2014 and $14.9 million in 2015. | |
As part of its normal investment activities, the Company enters into agreements to fund limited partnerships that make debt and equity investments. As of December 31, 2012, the Company had unfunded commitments of $207.2 million under such agreements, of which $63.3 million is expected to be funded by December 31, 2013. See Note 9 to these financial statements for additional information on VIEs. | |
In addition, the Company enters into agreements to purchase private placement investments. At December 31, 2012, the Company had open commitments of $63.6 million under such agreements which are expected to be funded by August 1, 2014. |
26_Condensed_Financial_Informa
26. Condensed Financial Information of The Phoenix Companies, Inc and Other Supplementary Data | 12 Months Ended | ||||||||
Dec. 31, 2012 | |||||||||
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | ' | ||||||||
26. Condensed Financial Information of The Phoenix Companies, Inc and Other Supplementary Data | ' | ||||||||
A summary of The Phoenix Companies, Inc. (parent company only) financial information is presented below. See Notes 10 and 17 to these financial statements for additional information regarding indebtedness and accrued pension and post-employment benefits, respectively. | |||||||||
Parent Company Financial Position: | As of December 31, | ||||||||
($ in millions) | 2012 | 2011 | |||||||
As restated | |||||||||
and amended | |||||||||
Assets | |||||||||
Available-for-sale debt securities, at fair value | $ | 116.3 | $ | 47.2 | |||||
Fair value investments | 21.9 | 22.2 | |||||||
Cash and cash equivalents | 27.2 | 52.5 | |||||||
Investments in subsidiaries | 1,029.5 | 1,277.5 | |||||||
Advances to subsidiaries | 16.1 | 13.5 | |||||||
Deferred income taxes, net | 0.1 | 0.3 | |||||||
Other assets | 6.9 | 11.9 | |||||||
Total assets | $ | 1,218.0 | $ | 1,425.1 | |||||
Liabilities and Stockholders’ Equity | |||||||||
Indebtedness (Note 10) | $ | 268.6 | $ | 268.6 | |||||
Accrued pension and post-employment benefits (Note 17) | 414.7 | 414.3 | |||||||
Other liabilities | 30.9 | 49.3 | |||||||
Total liabilities | 714.2 | 732.2 | |||||||
Total stockholders’ equity | 503.8 | 692.9 | |||||||
Total liabilities and stockholders’ equity | $ | 1,218.0 | $ | 1,425.1 | |||||
Parent Company Results of Operations: | Years Ended December 31, | ||||||||
($ in millions) | 2012 | 2011 | 2010 | ||||||
As restated | As restated | ||||||||
and amended | and amended | ||||||||
Revenues | |||||||||
Equity in undistributed loss of subsidiaries | $ | -153.8 | $ | -16.1 | $ | -9.8 | |||
Investment income | 1.3 | 2.3 | 1.9 | ||||||
Net realized investment gains | 2.0 | 3.4 | 3.3 | ||||||
Total revenues | -150.5 | -10.4 | -4.6 | ||||||
Interest expense | 20.2 | 20.2 | 20.3 | ||||||
Other operating expenses | 10.2 | 3.2 | 7.3 | ||||||
Total expenses | 30.4 | 23.4 | 27.6 | ||||||
Loss before income taxes | -180.9 | -33.8 | -32.2 | ||||||
Income tax expense (benefit) | -11.9 | -1.5 | 1.2 | ||||||
Income (loss) from continuing operations | -169 | -32.3 | -33.4 | ||||||
Income (loss) from discontinued operations of subsidiaries | 0.5 | 1.6 | -1 | ||||||
Net loss | $ | -168.5 | $ | -30.7 | $ | -34.4 | |||
Parent Company Cash Flows: | Years Ended December 31, | ||||||||
($ in millions) | 2012 | 2011 | 2010 | ||||||
As restated | As restated | ||||||||
and amended | and amended | ||||||||
Operating Activities | |||||||||
Interest income received | $ | 1.2 | $ | 0.9 | $ | 1.9 | |||
Interest paid | -20 | -20.1 | -20.1 | ||||||
Taxes paid | -15.1 | — | -0.4 | ||||||
Taxes received | 3.4 | 0.6 | 1.6 | ||||||
Payments to/from subsidiaries | 0.8 | -7.9 | 2.1 | ||||||
Other operating activities, net | -0.6 | 5.5 | -1.3 | ||||||
Cash used for operating activities | -30.3 | -21 | -16.2 | ||||||
Purchases of available-for-sale debt securities | -269.8 | -109.5 | -72.1 | ||||||
Sales, repayments and maturities of available-for-sale debt securities | 201.4 | 118.5 | 81.0 | ||||||
Loan to subsidiary | — | -2.5 | — | ||||||
Subsidiary loan payments received | 4.0 | — | — | ||||||
Proceeds from the sale of subsidiary | 1.0 | 1.0 | 8.3 | ||||||
Dividends received from subsidiaries | 71.8 | 64.8 | 25.0 | ||||||
Capital contributions to subsidiaries | — | -0.2 | -25.7 | ||||||
Capital distributions from subsidiaries | — | — | 0.2 | ||||||
Cash provided by investing activities | 8.4 | 72.1 | 16.7 | ||||||
Indebtedness repayments | — | -0.7 | — | ||||||
Treasury stock acquired | -3.4 | — | — | ||||||
Cash used for financing activities | -3.4 | -0.7 | — | ||||||
Change in cash and cash equivalents | -25.3 | 50.4 | 0.5 | ||||||
Cash and cash equivalents, beginning of period | 52.5 | 2.1 | 1.6 | ||||||
Cash and cash equivalents, end of period | $ | 27.2 | $ | 52.5 | $ | 2.1 | |||
Other supplementary data related to investments, insurance information, reinsurance, and valuation and qualifying accounts are presented in various locations within the consolidated financial statements and related notes. | |||||||||
· | |||||||||
Investment information including the amortized cost and fair value of investments is provided in Note 9, Investing Activities, and Note 13, Derivative Instruments. The Company’s invested assets did not include related party investments as of December 31, 2012. | |||||||||
· | |||||||||
The Company manages its business by segregating its operations into two reporting segments: Life and Annuity and Saybrus. All insurance information disclosed within the consolidated balance sheets, the consolidated statements of comprehensive income and Note 7, Deferred Policy Acquisition Costs, is applicable to the Life and Annuity segment. Unearned premiums included in policy liabilities and accruals were $102.2 million, $111.2 million and $121.9 million as of December 31, 2012, 2011 and 2010, respectively. Saybrus, the Company’s non-insurance segment, had operating expenses of $20.4 million, $19.5 million and $25.0 million for the years ended December 31, 2012, 2011 and 2010, respectively. Saybrus did not have any insurance information or investment income as of, and for the years ended December 31, 2012, 2011 and 2010. | |||||||||
· | |||||||||
Information related to reinsurance, including gross, ceded, and assumed balances for premiums, policy benefits and life insurance inforce, is provided in Note 6, Reinsurance. | |||||||||
· | |||||||||
Information about the valuation allowance established for certain deferred tax assets is provided in Note 15, Income Taxes. | |||||||||
27_Supplemental_Unaudited_Quar
27. Supplemental Unaudited Quarterly Financial Information | 12 Months Ended | ||||||||||||||||||
Dec. 31, 2012 | |||||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | ' | ||||||||||||||||||
27. Supplemental Unaudited Quarterly Financial Information | ' | ||||||||||||||||||
The following tables reflect unaudited summarized quarterly financial results during the years ended December 31, 2012 and 2011. | |||||||||||||||||||
Summarized Selected Quarterly Financial Data: | Quarter Ended | ||||||||||||||||||
($ in millions, except per share amounts) | Mar 31, | June 30, | Sept 30, | Dec 31, | |||||||||||||||
2012 | |||||||||||||||||||
As restated | As restated | ||||||||||||||||||
and amended | and amended | ||||||||||||||||||
Revenues | $ | 453.5 | $ | 418.9 | $ | 478.1 | $ | 438.7 | |||||||||||
Benefits and expenses | $ | 455.3 | $ | 456.3 | $ | 575.0 | $ | 458.6 | |||||||||||
Income tax expense (benefit) | $ | 11.3 | $ | -7.4 | $ | -11.2 | $ | -1.8 | |||||||||||
Loss from continuing operations | $ | -13.1 | $ | -30 | $ | -85.7 | $ | -18.1 | |||||||||||
Loss from discontinued operations | $ | -0.5 | $ | -5.5 | $ | -6 | $ | -3.6 | |||||||||||
Net loss | $ | -13.6 | $ | -35.5 | $ | -91.7 | $ | -21.7 | |||||||||||
Less: Net income (loss) attributable to noncontrolling interests | $ | -0.1 | $ | -0.1 | $ | 0.8 | $ | — | |||||||||||
Net loss attributable to The Phoenix Companies, Inc. | $ | -13.5 | $ | -35.4 | $ | -92.5 | $ | -21.7 | |||||||||||
Net loss attributable to The Phoenix Companies, Inc. per share: (1) | |||||||||||||||||||
Basic | $ | -2.32 | $ | -6.09 | $ | -16.09 | $ | -3.8 | |||||||||||
Diluted | $ | -2.32 | $ | -6.09 | $ | -16.09 | $ | -3.8 | |||||||||||
——————— | |||||||||||||||||||
-1 | All share amounts for all periods reflect the 1-for-20 reverse stock split, which was effective August 10, 2012. See Note 11 to these consolidated financial statements for additional information on the reverse stock split. | ||||||||||||||||||
Summarized Selected Quarterly Financial Data: | Quarter Ended | ||||||||||||||||||
($ in millions, except per share amounts) | Mar 31, | June 30, | Sept 30, | Dec 31, | |||||||||||||||
2011 | |||||||||||||||||||
As restated and amended | |||||||||||||||||||
Revenues | $ | 466.8 | $ | 470.9 | $ | 451.8 | $ | 447.0 | |||||||||||
Benefits and expenses | $ | 468.8 | $ | 469.6 | $ | 447.0 | $ | 448.4 | |||||||||||
Income tax expense (benefit) | $ | 7.7 | $ | 8.6 | $ | -6.8 | $ | 2.8 | |||||||||||
Income (loss) from continuing operations | $ | -9.7 | $ | -7.3 | $ | 11.6 | $ | -4.2 | |||||||||||
Loss from discontinued operations | $ | -1.5 | $ | -0.7 | $ | -3.9 | $ | -15.5 | |||||||||||
Net income (loss) | $ | -11.2 | $ | -8 | $ | 7.7 | $ | -19.7 | |||||||||||
Less: Net income (loss) attributable to noncontrolling interests | $ | -0.1 | $ | — | $ | -0.3 | $ | -0.1 | |||||||||||
Net income (loss) attributable to The Phoenix Companies, Inc. | $ | -11.1 | $ | -8 | $ | 8.0 | $ | -19.6 | |||||||||||
Net income (loss) attributable to The Phoenix Companies, Inc. per | |||||||||||||||||||
share: (1) | |||||||||||||||||||
Basic | $ | -1.91 | $ | -1.38 | $ | 1.38 | $ | -3.37 | |||||||||||
Diluted | $ | -1.91 | $ | -1.38 | $ | 1.36 | $ | -3.37 | |||||||||||
——————— | |||||||||||||||||||
-1 | All share amounts for all periods reflect the 1-for-20 reverse stock split, which was effective August 10, 2012. See Note 11 to these consolidated financial statements for additional information on the reverse stock split. | ||||||||||||||||||
Additional Quarterly Financial Data | |||||||||||||||||||
As a result of the restatement of the Company’s consolidated financial statements as of and for the years ended December 31, 2012 and 2011 as referred to in Note 2, Restatement and Amendment of Previously Reported Financial Information, certain quarterly information is being restated and amended while certain quarterly information is being presented for the first time in connection with this filing. The following tables summarize the quarterly financial information presented in the following pages which includes the effects of the retrospective application of the adoption of such amended accounting standard and the impact of the correction of the errors identified on any of the Company’s previously reported balance sheets, statements of comprehensive income, changes in stockholders’ equity and statements of cash flows as well as quarterly financial information for periods not previously reported as noted more fully below: | |||||||||||||||||||
Quarterly Financial Data | Page | ||||||||||||||||||
2012 Consolidated Statement of Comprehensive Income for three months ended: | |||||||||||||||||||
December 31, 2012 | F-121 | ||||||||||||||||||
September 30, 2012 | F-122 | ||||||||||||||||||
June 30, 2012, as restated and amended | F-123 | ||||||||||||||||||
March 31, 2012, as restated and amended | F-125 | ||||||||||||||||||
2012 Consolidated Statement of Comprehensive Income for period ended: | |||||||||||||||||||
September 30, 2012 | F-127 | ||||||||||||||||||
June 30, 2012, as restated and amended | F-128 | ||||||||||||||||||
2012 Consolidated Balance Sheet as of: | |||||||||||||||||||
December 31, 2012 | F-3 | ||||||||||||||||||
September 30, 2012 | F-130 | ||||||||||||||||||
June 30, 2012, as restated and amended | F-131 | ||||||||||||||||||
March 31, 2012, as restated and amended | F-132 | ||||||||||||||||||
2012 Consolidated Statement of Changes in Stockholders’ Equity for the period ended: | |||||||||||||||||||
December 31, 2012 | F-8 | ||||||||||||||||||
September 30, 2012 | F-133 | ||||||||||||||||||
June 30, 2012, as restated and amended | F-134 | ||||||||||||||||||
March 31, 2012, as restated and amended | F-135 | ||||||||||||||||||
2012 Consolidated Statement of Cash Flows for the period ended: | |||||||||||||||||||
December 31, 2012 | F-6 | ||||||||||||||||||
September 30, 2012 | F-136 | ||||||||||||||||||
June 30, 2012, as restated and amended | F-137 | ||||||||||||||||||
March 31, 2012, as restated and amended | F-139 | ||||||||||||||||||
2011 Consolidated Statement of Comprehensive Income for three months ended: | |||||||||||||||||||
December 31, 2011, as restated and amended | F-141 | ||||||||||||||||||
September 30, 2011, as restated and amended | F-143 | ||||||||||||||||||
June 30, 2011, as restated and amended | F-145 | ||||||||||||||||||
March 31, 2011, as restated and amended | F-147 | ||||||||||||||||||
2011 Consolidated Statement of Comprehensive Income for period ended: | |||||||||||||||||||
September 30, 2011, as restated and amended | F-149 | ||||||||||||||||||
June 30, 2011, as restated and amended | F-151 | ||||||||||||||||||
2011 Consolidated Balance Sheet as of: | |||||||||||||||||||
December 31, 2011, as restated and amended | F-3 | ||||||||||||||||||
September 30, 2011, as restated and amended | F-153 | ||||||||||||||||||
June 30, 2011, as restated and amended | F-154 | ||||||||||||||||||
March 31, 2011, as restated and amended | F-155 | ||||||||||||||||||
2011 Consolidated Statement of Changes in Stockholders’ Equity for the period ended: | |||||||||||||||||||
December 31, 2011, as restated and amended | F-156 | ||||||||||||||||||
September 30, 2011, as restated and amended | F-157 | ||||||||||||||||||
June 30, 2011, as restated and amended | F-158 | ||||||||||||||||||
March 31, 2011, as restated and amended | F-159 | ||||||||||||||||||
2011 Consolidated Statement of Cash Flows for the period ended: | |||||||||||||||||||
December 31, 2011, as restated and amended | F-160 | ||||||||||||||||||
September 30, 2011, as restated and amended | F-162 | ||||||||||||||||||
June 30, 2011, as restated and amended | F-164 | ||||||||||||||||||
March 31, 2011, as restated and amended | F-166 | ||||||||||||||||||
The following tables present the effects of the retrospective application of the adoption of such amended accounting standard and the impact of the correction of the errors identified on the Company’s previously reported balance sheets, statements of comprehensive income and statements of cash flows: | |||||||||||||||||||
Consolidated Statement of Comprehensive Income | |||||||||||||||||||
Three months ended December 31, 2012 | |||||||||||||||||||
($ in millions, except share data) | |||||||||||||||||||
REVENUES: | |||||||||||||||||||
Premiums | $ | 111.7 | |||||||||||||||||
Fee income | 133.1 | ||||||||||||||||||
Net investment income | 206.0 | ||||||||||||||||||
Net realized investment gains (losses): | |||||||||||||||||||
Total OTTI losses | -21.1 | ||||||||||||||||||
Portion of OTTI losses recognized in OCI | 11.6 | ||||||||||||||||||
Net OTTI losses recognized in earnings | -9.5 | ||||||||||||||||||
Net realized investment losses, excluding OTTI losses | -2.6 | ||||||||||||||||||
Net realized investment losses | -12.1 | ||||||||||||||||||
Gain on debt repurchase | — | ||||||||||||||||||
Total revenues | 438.7 | ||||||||||||||||||
BENEFITS AND EXPENSES: | |||||||||||||||||||
Policy benefits, excluding policyholder dividends | 277.2 | ||||||||||||||||||
Policyholder dividends | 72.5 | ||||||||||||||||||
Policy acquisition cost amortization | 35.4 | ||||||||||||||||||
Interest expense on indebtedness | 7.1 | ||||||||||||||||||
Other operating expenses | 66.4 | ||||||||||||||||||
Total benefits and expenses | 458.6 | ||||||||||||||||||
Loss from continuing operations before income taxes | -19.9 | ||||||||||||||||||
Income tax benefit | -2.7 | ||||||||||||||||||
Loss from continuing operations | -17.2 | ||||||||||||||||||
Loss from discontinued operations, net of income taxes | -3.6 | ||||||||||||||||||
Net loss | -20.8 | ||||||||||||||||||
Less: Net income (loss) attributable to noncontrolling interests | — | ||||||||||||||||||
Net loss attributable to The Phoenix Companies, Inc. | $ | -20.8 | |||||||||||||||||
COMPREHENSIVE INCOME (LOSS): | |||||||||||||||||||
Net loss attributable to The Phoenix Companies, Inc. | $ | -20.8 | |||||||||||||||||
Net income (loss) attributable to noncontrolling interests | — | ||||||||||||||||||
Net loss | $ | -20.8 | |||||||||||||||||
Other comprehensive income (loss) before income taxes: | |||||||||||||||||||
Net unrealized investment gains (losses) before income taxes | -13.7 | ||||||||||||||||||
Non-credit portion of OTTI losses recognized in OCI before income taxes | 25.1 | ||||||||||||||||||
Net pension liability adjustment before income taxes | -21.3 | ||||||||||||||||||
Net unrealized other gains (losses) before income taxes | — | ||||||||||||||||||
Net unrealized derivative instruments gains (losses) before income taxes | — | ||||||||||||||||||
Other comprehensive income (loss) before income taxes | -9.9 | ||||||||||||||||||
Less: Income tax expense (benefit) related to: | |||||||||||||||||||
Net unrealized investment gains (losses) | -1.4 | ||||||||||||||||||
Non-credit portion of OTTI losses recognized in OCI | 8.8 | ||||||||||||||||||
Net pension liability adjustment | — | ||||||||||||||||||
Net unrealized other gains (losses) | — | ||||||||||||||||||
Net unrealized derivative instruments gains (losses) | — | ||||||||||||||||||
Total income tax expense (benefit) | 7.4 | ||||||||||||||||||
Other comprehensive income (loss), net of income taxes | -19.1 | ||||||||||||||||||
Comprehensive income (loss) | -38.1 | ||||||||||||||||||
Less: Comprehensive income attributable to noncontrolling interests, net of income taxes | — | ||||||||||||||||||
Comprehensive income (loss) attributable to The Phoenix Companies, Inc. | $ | -38.1 | |||||||||||||||||
LOSS PER SHARE:(1) | |||||||||||||||||||
Loss from continuing operations – basic | $ | -3.02 | |||||||||||||||||
Loss from continuing operations – diluted | $ | -3.02 | |||||||||||||||||
Loss from discontinued operations – basic | $ | -0.63 | |||||||||||||||||
Loss from discontinued operations – diluted | $ | -0.63 | |||||||||||||||||
Net loss attributable to The Phoenix Companies, Inc. – basic | $ | -3.65 | |||||||||||||||||
Net loss attributable to The Phoenix Companies, Inc. – diluted | $ | -3.65 | |||||||||||||||||
Basic weighted-average common shares outstanding (in thousands) | 5,704 | ||||||||||||||||||
Diluted weighted-average common shares outstanding (in thousands) | 5,704 | ||||||||||||||||||
——————— | |||||||||||||||||||
-1 | All share amounts for all periods reflect the 1-for-20 reverse stock split, which was effective August 10, 2012. See Note 11 to these consolidated financial statements for additional information on the reverse stock split. | ||||||||||||||||||
Consolidated Statement of Comprehensive Income | |||||||||||||||||||
Three months ended September 30, 2012 | |||||||||||||||||||
($ in millions, except share data) | |||||||||||||||||||
REVENUES: | |||||||||||||||||||
Premiums | $ | 94.8 | |||||||||||||||||
Fee income | 138.8 | ||||||||||||||||||
Net investment income | 205.1 | ||||||||||||||||||
Net realized investment gains (losses): | |||||||||||||||||||
Total OTTI losses | -7.2 | ||||||||||||||||||
Portion of OTTI losses recognized in OCI | -0.2 | ||||||||||||||||||
Net OTTI losses recognized in earnings | -7.4 | ||||||||||||||||||
Net realized investment gains, excluding OTTI losses | 34.9 | ||||||||||||||||||
Net realized investment gains | 27.5 | ||||||||||||||||||
Gain on debt repurchase | 11.9 | ||||||||||||||||||
Total revenues | 478.1 | ||||||||||||||||||
BENEFITS AND EXPENSES: | |||||||||||||||||||
Policy benefits, excluding policyholder dividends | 352.5 | ||||||||||||||||||
Policyholder dividends | 81.0 | ||||||||||||||||||
Policy acquisition cost amortization | 71.7 | ||||||||||||||||||
Interest expense on indebtedness | 7.9 | ||||||||||||||||||
Other operating expenses | 61.9 | ||||||||||||||||||
Total benefits and expenses | 575.0 | ||||||||||||||||||
Loss from continuing operations before income taxes | -96.9 | ||||||||||||||||||
Income tax benefit | -4.9 | ||||||||||||||||||
Loss from continuing operations | -92 | ||||||||||||||||||
Loss from discontinued operations, net of income taxes | -6 | ||||||||||||||||||
Net loss | -98 | ||||||||||||||||||
Less: Net income (loss) attributable to noncontrolling interests | 0.8 | ||||||||||||||||||
Net loss attributable to The Phoenix Companies, Inc. | $ | -98 | |||||||||||||||||
COMPREHENSIVE INCOME (LOSS): | |||||||||||||||||||
Net loss attributable to The Phoenix Companies, Inc. | $ | -98.8 | |||||||||||||||||
Net income (loss) attributable to noncontrolling interests | 0.8 | ||||||||||||||||||
Net loss | -98 | ||||||||||||||||||
Other comprehensive income (loss) before income taxes: | |||||||||||||||||||
Net unrealized investment gains (losses) before income taxes | 21.0 | ||||||||||||||||||
Non-credit portion of OTTI losses recognized in OCI before income taxes | 10.6 | ||||||||||||||||||
Net pension liability adjustment before income taxes | 2.4 | ||||||||||||||||||
Net unrealized other gains (losses) before income taxes | — | ||||||||||||||||||
Net unrealized derivative instruments gains (losses) before income taxes | — | ||||||||||||||||||
Other comprehensive income (loss) before income taxes | 34.0 | ||||||||||||||||||
Less: Income tax expense (benefit) related to: | |||||||||||||||||||
Net unrealized investment gains (losses) | 34.9 | ||||||||||||||||||
Non-credit portion of OTTI losses recognized in OCI | 3.7 | ||||||||||||||||||
Net pension liability adjustment | — | ||||||||||||||||||
Net unrealized other gains (losses) | — | ||||||||||||||||||
Net unrealized derivative instruments gains (losses) | — | ||||||||||||||||||
Total income tax expense (benefit) | 38.6 | ||||||||||||||||||
Other comprehensive income (loss), net of income taxes | -4.6 | ||||||||||||||||||
Comprehensive income (loss) | -102.6 | ||||||||||||||||||
Less: Comprehensive income attributable to noncontrolling interests, net of income taxes | 0.8 | ||||||||||||||||||
Comprehensive income (loss) attributable to The Phoenix Companies, Inc. | $ | -103.4 | |||||||||||||||||
LOSS PER SHARE: (1) | |||||||||||||||||||
Loss from continuing operations – basic | $ | -16 | |||||||||||||||||
Loss from continuing operations – diluted | $ | -16 | |||||||||||||||||
Loss from discontinued operations – basic | $ | -1.04 | |||||||||||||||||
Loss from discontinued operations – diluted | $ | -1.04 | |||||||||||||||||
Net loss attributable to The Phoenix Companies, Inc. – basic | $ | -17.19 | |||||||||||||||||
Net loss attributable to The Phoenix Companies, Inc. – diluted | $ | -17.19 | |||||||||||||||||
Basic weighted-average common shares outstanding (in thousands) | 5,749 | ||||||||||||||||||
Diluted weighted-average common shares outstanding (in thousands) | 5,749 | ||||||||||||||||||
——————— | |||||||||||||||||||
-1 | All share amounts for all periods reflect the 1-for-20 reverse stock split, which was effective August 10, 2012. See Note 11 to these consolidated financial statements for additional information on the reverse stock split. | ||||||||||||||||||
Consolidated Statement of Comprehensive Income | |||||||||||||||||||
($ in millions, except share data) | Three months ended June 30, 2012 | ||||||||||||||||||
As previously | Correction | Adjusted | Retrospective | As restated | |||||||||||||||
reported | of errors (1) | prior to the | Adoption (2) | and amended | |||||||||||||||
retrospective | |||||||||||||||||||
adoption | |||||||||||||||||||
REVENUES: | |||||||||||||||||||
Premiums | $ | 104.3 | $ | -6 | $ | 98.3 | $ | — | $ | 98.3 | |||||||||
Fee income | 137.2 | 0.4 | 137.6 | — | 137.6 | ||||||||||||||
Net investment income | 218.2 | -17.9 | 200.3 | — | 200.3 | ||||||||||||||
Net realized investment gains (losses): | |||||||||||||||||||
Total OTTI losses | -15 | 2.1 | -12.9 | — | -12.9 | ||||||||||||||
Portion of OTTI losses recognized in OCI | 9.9 | -2.1 | 7.8 | — | 7.8 | ||||||||||||||
Net OTTI losses recognized in earnings | -5.1 | — | -5.1 | — | -5.1 | ||||||||||||||
Net realized investment losses, | -3.1 | -9.1 | -12.2 | — | -12.2 | ||||||||||||||
excluding OTTI losses | |||||||||||||||||||
Net realized investment losses | -8.2 | -9.1 | -17.3 | — | -17.3 | ||||||||||||||
Gain on debt repurchase | — | — | — | — | |||||||||||||||
Total revenues | 451.5 | -32.6 | 418.9 | — | 418.9 | ||||||||||||||
BENEFITS AND EXPENSES: | |||||||||||||||||||
Policy benefits, excluding policyholder dividends | 259.0 | 19.4 | 278.4 | — | 278.4 | ||||||||||||||
Policyholder dividends | 84.3 | -13.6 | 70.7 | — | 70.7 | ||||||||||||||
Policy acquisition cost amortization | 41.8 | -2.3 | 39.5 | — | 39.5 | ||||||||||||||
Interest expense on indebtedness | 7.9 | — | 7.9 | — | 7.9 | ||||||||||||||
Other operating expenses | 60.8 | -1 | 59.8 | — | 59.8 | ||||||||||||||
Total benefits and expenses | 453.8 | 2.5 | 456.3 | — | 456.3 | ||||||||||||||
Loss from continuing operations | -2.3 | -35.1 | -37.4 | — | -37.4 | ||||||||||||||
before income taxes | |||||||||||||||||||
Income tax expense (benefit) | 4.6 | -12 | -7.4 | — | -7.4 | ||||||||||||||
Loss from continuing operations | -6.9 | -23.1 | -30 | — | -30 | ||||||||||||||
Income (loss) from discontinued operations, | -6.3 | 0.8 | -5.5 | — | -5.5 | ||||||||||||||
net of income taxes | |||||||||||||||||||
Net loss | -13.2 | -22.3 | -35.5 | — | -35.5 | ||||||||||||||
Less: Net income (loss) attributable to | — | -0.1 | -0.1 | — | -0.1 | ||||||||||||||
noncontrolling interests | |||||||||||||||||||
Net loss attributable to | $ | -13.2 | $ | -22.2 | $ | -35.4 | $ | — | $ | -35.4 | |||||||||
The Phoenix Companies, Inc. | |||||||||||||||||||
(Continued from previous page) | Consolidated Statement of Comprehensive Income | ||||||||||||||||||
($ in millions, except share data) | Three months ended June 30, 2012 | ||||||||||||||||||
As previously | Correction | Adjusted | Retrospective | As restated | |||||||||||||||
reported | of errors (1) | prior to the | Adoption (2) | and amended | |||||||||||||||
retrospective | |||||||||||||||||||
adoption | |||||||||||||||||||
COMPREHENSIVE INCOME (LOSS): | |||||||||||||||||||
Net loss attributable to | $ | -13.2 | $ | -22.2 | $ | -35.4 | $ | — | $ | -35.4 | |||||||||
The Phoenix Companies, Inc. | |||||||||||||||||||
Net income (loss) attributable to | — | -0.1 | -0.1 | — | -0.1 | ||||||||||||||
noncontrolling interests | |||||||||||||||||||
Net loss | -13.2 | -22.3 | -35.5 | — | -35.5 | ||||||||||||||
Other comprehensive income (loss) | |||||||||||||||||||
before income taxes: | |||||||||||||||||||
Net unrealized investment gains (losses) | 29.9 | -11.1 | 18.8 | — | 18.8 | ||||||||||||||
before income taxes | |||||||||||||||||||
Non-credit portion of OTTI losses | 4.9 | 0.1 | 5.0 | — | 5.0 | ||||||||||||||
recognized in OCI before income taxes | |||||||||||||||||||
Net pension liability adjustment | -21.2 | 17.0 | -4.2 | — | -4.2 | ||||||||||||||
before income taxes | |||||||||||||||||||
Net unrealized other gains (losses) | — | — | — | — | — | ||||||||||||||
before income taxes | |||||||||||||||||||
Net unrealized derivative instrument | 0.6 | -0.6 | — | — | — | ||||||||||||||
gains (losses) before income taxes | |||||||||||||||||||
Other comprehensive income (loss) | 14.2 | 5.4 | 19.6 | — | 19.6 | ||||||||||||||
before income taxes | |||||||||||||||||||
Less: Income tax expense (benefit) related to: | |||||||||||||||||||
Net unrealized investment gains (losses) | 0.6 | 13.3 | 13.9 | — | 13.9 | ||||||||||||||
Non-credit portion of OTTI losses | 1.7 | — | 1.7 | — | 1.7 | ||||||||||||||
recognized in OCI | |||||||||||||||||||
Net pension liability adjustment | — | — | — | — | — | ||||||||||||||
Net unrealized other gains (losses) | — | — | — | — | — | ||||||||||||||
Net unrealized derivative instrument | — | — | — | — | — | ||||||||||||||
gains (losses) | |||||||||||||||||||
Total income tax expense (benefit) | 2.3 | 13.3 | 15.6 | — | 15.6 | ||||||||||||||
Other comprehensive income (loss), | 11.9 | -7.9 | 4.0 | — | 4.0 | ||||||||||||||
net of income taxes | |||||||||||||||||||
Comprehensive income (loss) | -1.3 | $ | -30.2 | $ | -31.5 | $ | — | $ | -31.5 | ||||||||||
Less: Comprehensive income (loss) attributable | — | -0.1 | -0.1 | — | -0.1 | ||||||||||||||
to noncontrolling interests, net of income taxes | |||||||||||||||||||
Comprehensive income (loss) attributable | $ | -1.3 | $ | -30.1 | $ | -31.4 | $ | — | $ | -31.4 | |||||||||
to The Phoenix Companies, Inc. | |||||||||||||||||||
EARNINGS (LOSS) PER SHARE: (3) | |||||||||||||||||||
Loss from continuing operations – basic | $ | -1.19 | $ | -3.97 | $ | — | $ | -5.16 | |||||||||||
Loss from continuing operations – diluted | $ | -1.19 | $ | -3.97 | $ | — | $ | -5.16 | |||||||||||
Earnings (loss) from | $ | -1.08 | $ | 0.14 | $ | — | $ | -0.95 | |||||||||||
discontinued operations – basic | |||||||||||||||||||
Earnings (loss) from | $ | -1.08 | $ | 0.14 | $ | — | $ | -0.95 | |||||||||||
discontinued operations – diluted | |||||||||||||||||||
Net loss attributable to | $ | -2.27 | $ | -3.82 | $ | — | $ | -6.09 | |||||||||||
The Phoenix Companies, Inc.– basic | |||||||||||||||||||
Net loss attributable to | $ | -2.27 | $ | -3.82 | $ | — | $ | -6.09 | |||||||||||
The Phoenix Companies, Inc.– diluted | |||||||||||||||||||
Basic weighted-average common shares | 5,812 | 5,815 | -4 | — | 5,815 | ||||||||||||||
outstanding (in thousands) | |||||||||||||||||||
Diluted weighted-average common shares | 5,812 | 5,815 | -4 | — | 5,815 | ||||||||||||||
outstanding (in thousands) | |||||||||||||||||||
——————— | |||||||||||||||||||
-1 | Adjustments related to the correction of errors reflect amounts prior to the retrospective adoption of amended guidance to ASC 944, Financial Services – Insurance (ASU 2010-26). See footnote 2 below for additional information regarding these amounts and the retrospective adoption. | ||||||||||||||||||
-2 | Adjustments related to the retrospective adoption of amended guidance to ASC 944, Financial Services – Insurance (ASU 2010-26), have been updated from those originally disclosed in the First Quarter 2012 Quarterly Report on Form 10-Q filing to reflect the correction of errors identified related to the adoption of the amended guidance as well as indirect impact of the correction of errors associated with the restatement. | ||||||||||||||||||
-3 | All share amounts for all periods reflect the 1-for-20 reverse stock split, which was effective August 10, 2012. See Note 11 to these consolidated financial statements for additional information on the reverse stock split. | ||||||||||||||||||
-4 | Weighted-average common shares outstanding have been updated to reflect the impact of an error which had no material impact to EPS information, basic or diluted, for any period presented. | ||||||||||||||||||
Consolidated Statement of Comprehensive Income | |||||||||||||||||||
($ in millions, except share data) | Three months ended March 31, 2012 | ||||||||||||||||||
As previously | Correction | Adjusted | Retrospective | As restated | |||||||||||||||
reported | of errors (1) | prior to the | Adoption (2) | and amended | |||||||||||||||
retrospective | |||||||||||||||||||
adoption | |||||||||||||||||||
REVENUES: | |||||||||||||||||||
Premiums | $ | 100.2 | $ | -2.7 | $ | 97.5 | $ | — | $ | 97.5 | |||||||||
Fee income | 146.6 | 0.1 | 146.7 | — | 146.7 | ||||||||||||||
Net investment income | 207.9 | 10.0 | 217.9 | — | 217.9 | ||||||||||||||
Net realized investment gains (losses): | |||||||||||||||||||
Total OTTI losses | -11.7 | 1.2 | -10.5 | — | -10.5 | ||||||||||||||
Portion of OTTI losses recognized in OCI | 5.5 | -1.8 | 3.7 | — | 3.7 | ||||||||||||||
Net OTTI losses recognized in earnings | -6.2 | -0.6 | -6.8 | — | -6.8 | ||||||||||||||
Net realized investment gains (losses), | -9.4 | 7.6 | -1.8 | — | -1.8 | ||||||||||||||
excluding OTTI losses | |||||||||||||||||||
Net realized investment losses | -15.6 | 7.0 | -8.6 | — | -8.6 | ||||||||||||||
Gain on debt repurchase | — | — | — | — | — | ||||||||||||||
Total revenues | 439.1 | 14.4 | 453.5 | — | 453.5 | ||||||||||||||
BENEFITS AND EXPENSES: | |||||||||||||||||||
Policy benefits, excluding policyholder dividends | 254.1 | 3.9 | 258.0 | — | 258.0 | ||||||||||||||
Policyholder dividends | 65.1 | 5.5 | 70.6 | — | 70.6 | ||||||||||||||
Policy acquisition cost amortization | 50.2 | 3.2 | 53.4 | — | 53.4 | ||||||||||||||
Interest expense on indebtedness | 7.9 | — | 7.9 | — | 7.9 | ||||||||||||||
Other operating expenses | 60.5 | 4.9 | 65.4 | — | 65.4 | ||||||||||||||
Total benefits and expenses | 437.8 | 17.5 | 455.3 | — | 455.3 | ||||||||||||||
Income (loss) from continuing operations | 1.3 | -3.1 | -1.8 | — | -1.8 | ||||||||||||||
before income taxes | |||||||||||||||||||
Income tax expense | 8.9 | 2.4 | 11.3 | — | 11.3 | ||||||||||||||
Loss from continuing operations | -7.6 | -5.5 | -13.1 | — | -13.1 | ||||||||||||||
Loss from discontinued operations, | -0.5 | — | -0.5 | — | -0.5 | ||||||||||||||
net of income taxes | |||||||||||||||||||
Net loss | -8.1 | -5.5 | -13.6 | — | -13.6 | ||||||||||||||
Less: Net income (loss) attributable to | — | -0.1 | -0.1 | — | -0.1 | ||||||||||||||
noncontrolling interests | |||||||||||||||||||
Net loss attributable to | $ | -8.1 | $ | -5.4 | $ | -13.5 | $ | — | $ | -13.5 | |||||||||
The Phoenix Companies, Inc. | |||||||||||||||||||
(Continued from previous page) | Consolidated Statement of Comprehensive Income | ||||||||||||||||||
($ in millions, except share data) | Three months ended March 31, 2012 | ||||||||||||||||||
As previously | Correction | Adjusted | Retrospective | As restated | |||||||||||||||
reported | of errors (1) | prior to the | Adoption (2) | and amended | |||||||||||||||
retrospective | |||||||||||||||||||
adoption | |||||||||||||||||||
COMPREHENSIVE INCOME (LOSS): | |||||||||||||||||||
Net loss attributable to | $ | -8.1 | $ | -5.4 | $ | -13.5 | $ | — | $ | -13.5 | |||||||||
The Phoenix Companies, Inc. | |||||||||||||||||||
Net income (loss) attributable to | — | -0.1 | -0.1 | — | -0.1 | ||||||||||||||
noncontrolling interests | |||||||||||||||||||
Net loss | $ | -8.1 | -5.5 | -13.6 | — | -13.6 | |||||||||||||
Other comprehensive income (loss) | |||||||||||||||||||
before income taxes: | |||||||||||||||||||
Net unrealized investment gains | 26.3 | 11.8 | 38.1 | — | 38.1 | ||||||||||||||
before income taxes | |||||||||||||||||||
Non-credit portion of OTTI losses | -5.5 | 1.8 | -3.7 | — | -3.7 | ||||||||||||||
recognized in OCI before income taxes | |||||||||||||||||||
Net pension liability adjustment | 2.1 | -0.4 | 1.7 | 1.7 | |||||||||||||||
before income taxes | |||||||||||||||||||
Net unrealized other gains (losses) | — | — | — | — | — | ||||||||||||||
before income taxes | |||||||||||||||||||
Net unrealized derivative instruments | -0.3 | 0.3 | — | — | — | ||||||||||||||
gains (losses) before income taxes | |||||||||||||||||||
Other comprehensive income (loss) | 22.6 | 13.5 | 36.1 | — | 36.1 | ||||||||||||||
before income taxes | |||||||||||||||||||
Less: Income tax expense (benefit) related to: | |||||||||||||||||||
Net unrealized investment gains (losses) | 26.5 | 4.1 | 30.6 | — | 30.6 | ||||||||||||||
Non-credit portion of OTTI losses | -1.9 | 0.6 | -1.3 | — | -1.3 | ||||||||||||||
recognized in OCI | |||||||||||||||||||
Net pension liability adjustment | — | — | — | — | — | ||||||||||||||
Net unrealized other gains (losses) | — | — | — | — | — | ||||||||||||||
Net unrealized derivative instrument | — | — | — | — | — | ||||||||||||||
gains (losses) | |||||||||||||||||||
Total income tax expense (benefit) | 24.6 | 4.7 | 29.3 | — | 29.3 | ||||||||||||||
Other comprehensive income (loss) | -2 | 8.8 | 6.8 | — | 6.8 | ||||||||||||||
net of income taxes | |||||||||||||||||||
Comprehensive income (loss) | -10.1 | 3.3 | -6.8 | — | -6.8 | ||||||||||||||
Less: Comprehensive income (loss) attributable | — | -0.1 | -0.1 | — | -0.1 | ||||||||||||||
to noncontrolling interests, net of income taxes | |||||||||||||||||||
Comprehensive income (loss) attributable | $ | -10.1 | $ | 3.4 | $ | -6.7 | $ | — | $ | -6.7 | |||||||||
to The Phoenix Companies, Inc. | |||||||||||||||||||
LOSS PER SHARE: (3) | |||||||||||||||||||
Loss from continuing operations – basic | $ | -1.31 | $ | -0.95 | $ | — | $ | -2.25 | |||||||||||
Loss from continuing operations – diluted | $ | -1.31 | $ | -0.95 | $ | — | $ | -2.25 | |||||||||||
Loss from discontinued operations – basic | $ | -0.09 | $ | — | $ | — | $ | -0.09 | |||||||||||
Loss from discontinued operations – diluted | $ | -0.09 | $ | — | $ | — | $ | -0.09 | |||||||||||
Net loss attributable to | $ | -1.39 | $ | -0.93 | $ | — | $ | -2.32 | |||||||||||
The Phoenix Companies, Inc.– basic | |||||||||||||||||||
Net loss attributable to | $ | -1.39 | $ | -0.93 | $ | — | $ | -2.32 | |||||||||||
The Phoenix Companies, Inc.– diluted | |||||||||||||||||||
Basic weighted-average common shares | 5,816 | 5,816 | -4 | — | 5,816 | ||||||||||||||
outstanding (in thousands) | |||||||||||||||||||
Diluted weighted-average common shares | 5,816 | 5,816 | -4 | — | 5,816 | ||||||||||||||
outstanding (in thousands) | |||||||||||||||||||
——————— | |||||||||||||||||||
-1 | Adjustments related to the correction of errors reflect amounts prior to the retrospective adoption of amended guidance to ASC 944, Financial Services – Insurance (ASU 2010-26). See footnote 2 below for additional information regarding these amounts and the retrospective adoption. | ||||||||||||||||||
-2 | Adjustments related to the retrospective adoption of amended guidance to ASC 944, Financial Services – Insurance (ASU 2010-26), have been updated from those originally disclosed in the First Quarter 2012 Quarterly Report on Form 10-Q filing to reflect the correction of errors identified related to the adoption of the amended guidance as well as indirect impact of the correction of errors associated with the restatement. | ||||||||||||||||||
-3 | All share amounts for all periods reflect the 1-for-20 reverse stock split, which was effective August 10, 2012. See Note 11 to these consolidated financial statements for additional information on the reverse stock split. | ||||||||||||||||||
-4 | Weighted-average common shares outstanding have been updated to reflect the impact of an error which had no material impact to EPS information, basic or diluted, for any period presented. | ||||||||||||||||||
Consolidated Statement of Comprehensive Income | |||||||||||||||||||
Nine months ended September 30, 2012 | |||||||||||||||||||
($ in millions, except share data) | |||||||||||||||||||
REVENUES: | |||||||||||||||||||
Premiums | $ | 290.6 | |||||||||||||||||
Fee income | 423.1 | ||||||||||||||||||
Net investment income | 623.3 | ||||||||||||||||||
Net realized investment gains (losses): | |||||||||||||||||||
Total OTTI losses | -30.6 | ||||||||||||||||||
Portion of OTTI losses recognized in OCI | 11.3 | ||||||||||||||||||
Net OTTI losses recognized in earnings | -19.3 | ||||||||||||||||||
Net realized investment losses, excluding OTTI losses | 20.9 | ||||||||||||||||||
Net realized investment losses | 1.6 | ||||||||||||||||||
Gain on debt repurchase | 11.9 | ||||||||||||||||||
Total revenues | 1,350.5 | ||||||||||||||||||
BENEFITS AND EXPENSES: | |||||||||||||||||||
Policy benefits, excluding policyholder dividends | 888.9 | ||||||||||||||||||
Policyholder dividends | 222.3 | ||||||||||||||||||
Policy acquisition cost amortization | 164.6 | ||||||||||||||||||
Interest expense on indebtedness | 23.7 | ||||||||||||||||||
Other operating expenses | 187.1 | ||||||||||||||||||
Total benefits and expenses | 1,486.6 | ||||||||||||||||||
Loss from continuing operations before income taxes | -136.1 | ||||||||||||||||||
Income tax benefit | -1 | ||||||||||||||||||
Loss from continuing operations | -135.1 | ||||||||||||||||||
Loss from discontinued operations, net of income taxes | -12 | ||||||||||||||||||
Net loss | -147.1 | ||||||||||||||||||
Less: Net income (loss) attributable to noncontrolling interests | 0.6 | ||||||||||||||||||
Net loss attributable to The Phoenix Companies, Inc. | $ | -147.7 | |||||||||||||||||
COMPREHENSIVE INCOME (LOSS): | |||||||||||||||||||
Net loss attributable to The Phoenix Companies, Inc. | $ | -147.7 | |||||||||||||||||
Net income (loss) attributable to noncontrolling interests | 0.6 | ||||||||||||||||||
Net loss | $ | -147.7 | |||||||||||||||||
Other comprehensive income (loss) before income taxes: | |||||||||||||||||||
Net unrealized investment gains (losses) before income taxes | 70.4 | ||||||||||||||||||
Non-credit portion of OTTI losses recognized in OCI before income taxes | 11.9 | ||||||||||||||||||
Net pension liability adjustment before income taxes | -0.1 | ||||||||||||||||||
Net unrealized other gains (losses) before income taxes | — | ||||||||||||||||||
Net unrealized derivative instruments gains (losses) before income taxes | — | ||||||||||||||||||
Other comprehensive income (loss) before income taxes | 82.2 | ||||||||||||||||||
Less: Income tax expense (benefit) related to: | |||||||||||||||||||
Net unrealized investment gains (losses) | 79.4 | ||||||||||||||||||
Non-credit portion of OTTI losses recognized in OCI | 4.1 | ||||||||||||||||||
Net pension liability adjustment | — | ||||||||||||||||||
Net unrealized other gains (losses) | — | ||||||||||||||||||
Net unrealized derivative instruments gains (losses) | — | ||||||||||||||||||
Total income tax expense (benefit) | 83.5 | ||||||||||||||||||
Other comprehensive income (loss), net of income taxes | -1.3 | ||||||||||||||||||
Comprehensive income (loss) | -148.4 | ||||||||||||||||||
Less: Comprehensive income attributable to noncontrolling interests, net of income taxes | 0.6 | ||||||||||||||||||
Comprehensive income (loss) attributable to The Phoenix Companies, Inc. | $ | -149 | |||||||||||||||||
LOSS PER SHARE:(1) | |||||||||||||||||||
Loss from continuing operations – basic | $ | -23.33 | |||||||||||||||||
Loss from continuing operations – diluted | $ | -23.33 | |||||||||||||||||
Loss from discontinued operations – basic | $ | -2.07 | |||||||||||||||||
Loss from discontinued operations – diluted | $ | -2.07 | |||||||||||||||||
Net loss attributable to The Phoenix Companies, Inc. – basic | $ | -25.5 | |||||||||||||||||
Net loss attributable to The Phoenix Companies, Inc. – diluted | $ | -25.5 | |||||||||||||||||
Basic weighted-average common shares outstanding (in thousands) | 5,792 | ||||||||||||||||||
Diluted weighted-average common shares outstanding (in thousands) | 5,792 | ||||||||||||||||||
——————— | |||||||||||||||||||
-1 | All share amounts for all periods reflect the 1-for-20 reverse stock split, which was effective August 10, 2012. See Note 11 to these consolidated financial statements for additional information on the reverse stock split. | ||||||||||||||||||
Consolidated Statement of Comprehensive Income | |||||||||||||||||||
($ in millions, except share data) | Six months ended June 30, 2012 | ||||||||||||||||||
As previously | Correction | Adjusted | Retrospective | As restated | |||||||||||||||
reported | of errors (1) | prior to the | Adoption (2) | and amended | |||||||||||||||
Retrospective | |||||||||||||||||||
adoption | |||||||||||||||||||
REVENUES: | |||||||||||||||||||
Premiums | $ | 204.5 | $ | -8.7 | $ | 195.8 | $ | — | $ | 195.8 | |||||||||
Fee income | 283.8 | 0.5 | 284.3 | — | 284.3 | ||||||||||||||
Net investment income | 426.1 | -7.9 | 418.2 | — | 418.2 | ||||||||||||||
Net realized investment gains (losses): | |||||||||||||||||||
Total OTTI losses | -26.7 | 3.3 | -23.4 | — | -23.4 | ||||||||||||||
Portion of OTTI losses recognized in OCI | 15.4 | -3.9 | 11.5 | — | 11.5 | ||||||||||||||
Net OTTI losses recognized in earnings | -11.3 | -0.6 | -11.9 | — | -11.9 | ||||||||||||||
Net realized investment losses, | -12.5 | -1.5 | -14 | — | -14 | ||||||||||||||
excluding OTTI losses | |||||||||||||||||||
Net realized investment losses | -23.8 | -2.1 | -25.9 | — | -25.9 | ||||||||||||||
Gain on debt repurchase | — | — | — | — | |||||||||||||||
Total revenues | 890.6 | -18.2 | 872.4 | — | 872.4 | ||||||||||||||
BENEFITS AND EXPENSES: | |||||||||||||||||||
Policy benefits, excluding policyholder dividends | 513.1 | 23.3 | 536.4 | — | 536.4 | ||||||||||||||
Policyholder dividends | 149.4 | -8.1 | 141.3 | — | 141.3 | ||||||||||||||
Policy acquisition cost amortization | 92.0 | 0.9 | 92.9 | — | 92.9 | ||||||||||||||
Interest expense on indebtedness | 15.8 | — | 15.8 | — | 15.8 | ||||||||||||||
Other operating expenses | 121.3 | 3.9 | 125.2 | — | 125.2 | ||||||||||||||
Total benefits and expenses | 891.6 | 20.0 | 911.6 | — | 911.6 | ||||||||||||||
Loss from continuing operations | -1 | -38.2 | -39.2 | — | -39.2 | ||||||||||||||
before income taxes | |||||||||||||||||||
Income tax expense (benefit) | 13.5 | -9.6 | 3.9 | — | 3.9 | ||||||||||||||
Loss from continuing operations | -14.5 | -28.6 | -43.1 | — | -43.1 | ||||||||||||||
Income (loss) from discontinued operations, | -6.8 | 0.8 | -6 | — | -6 | ||||||||||||||
net of income taxes | |||||||||||||||||||
Net loss | -21.3 | -27.8 | -49.1 | — | -49.1 | ||||||||||||||
Less: Net income (loss) attributable to | — | -0.2 | -0.2 | — | -0.2 | ||||||||||||||
noncontrolling interests | |||||||||||||||||||
Net loss attributable to | $ | -21.3 | $ | -27.6 | $ | -48.9 | $ | — | $ | -48.9 | |||||||||
The Phoenix Companies, Inc. | |||||||||||||||||||
(Continued from previous page) | Consolidated Statement of Comprehensive Income | ||||||||||||||||||
($ in millions, except share data) | Six months ended June 30, 2012 | ||||||||||||||||||
As previously | Correction | Adjusted | Retrospective | As restated | |||||||||||||||
reported | of errors (1) | prior to the | Adoption (2) | and amended | |||||||||||||||
retrospective | |||||||||||||||||||
adoption | |||||||||||||||||||
COMPREHENSIVE INCOME (LOSS): | |||||||||||||||||||
Net loss attributable to | $ | -21.3 | $ | -27.6 | $ | -48.9 | $ | — | $ | -48.9 | |||||||||
The Phoenix Companies, Inc. | |||||||||||||||||||
Net income (loss) attributable to | — | -0.2 | -0.2 | — | -0.2 | ||||||||||||||
noncontrolling interests | |||||||||||||||||||
Net loss | -21.3 | -27.8 | -49.1 | — | -49.1 | ||||||||||||||
Other comprehensive income (loss) | |||||||||||||||||||
before income taxes: | |||||||||||||||||||
Net unrealized investment gains (losses) | 56.2 | -6.8 | 49.4 | — | 49.4 | ||||||||||||||
before income taxes | |||||||||||||||||||
Non-credit portion of OTTI losses | -0.6 | 1.9 | 1.3 | — | 1.3 | ||||||||||||||
recognized in OCI before income taxes | |||||||||||||||||||
Net pension liability adjustment | -19.1 | 16.6 | -2.5 | — | -2.5 | ||||||||||||||
before income taxes | |||||||||||||||||||
Net unrealized other gains (losses) | — | — | — | — | — | ||||||||||||||
before income taxes | |||||||||||||||||||
Net unrealized derivative instruments | 0.3 | -0.3 | — | — | — | ||||||||||||||
gains (losses) before income taxes | |||||||||||||||||||
Other comprehensive income (loss) | 36.8 | 11.4 | 48.2 | — | 48.2 | ||||||||||||||
before income taxes | |||||||||||||||||||
Less: Income tax expense (benefit) related to: | |||||||||||||||||||
Net unrealized investment gains (losses) | 27.1 | 17.4 | 44.5 | — | 44.5 | ||||||||||||||
Non-credit portion of OTTI losses | -0.2 | 0.6 | 0.4 | — | 0.4 | ||||||||||||||
recognized in OCI | |||||||||||||||||||
Net pension liability adjustment | — | — | — | — | — | ||||||||||||||
Net unrealized other gains (losses) | — | — | — | — | — | ||||||||||||||
Net unrealized derivative instrument | — | — | — | — | — | ||||||||||||||
gains (losses) | |||||||||||||||||||
Total income tax expense (benefit) | 26.9 | 18 | 44.9 | — | 44.9 | ||||||||||||||
Other comprehensive income (loss), | 9.9 | -6.6 | 3.3 | — | 3.3 | ||||||||||||||
net of income taxes | |||||||||||||||||||
Comprehensive income (loss) | -11.4 | $ | -34.4 | $ | -45.8 | $ | — | $ | -45.8 | ||||||||||
Less: Comprehensive income (loss) attributable | — | -0.2 | -0.2 | — | -0.2 | ||||||||||||||
to noncontrolling interests, net of income taxes | |||||||||||||||||||
Comprehensive income (loss) attributable | $ | -11.4 | $ | -34.2 | $ | -45.6 | $ | — | $ | -45.2 | |||||||||
to The Phoenix Companies, Inc. | |||||||||||||||||||
EARNINGS (LOSS) PER SHARE:(3) | |||||||||||||||||||
Loss from continuing operations – basic | $ | -2.49 | $ | -4.92 | $ | — | $ | -7.41 | |||||||||||
Loss from continuing operations – diluted | $ | -2.49 | $ | -4.92 | $ | — | $ | -7.41 | |||||||||||
Earnings (loss) from | $ | -1.17 | $ | 0.14 | $ | — | $ | -1.03 | |||||||||||
discontinued operations – basic | |||||||||||||||||||
Earnings (loss) from | $ | -1.17 | $ | 0.14 | $ | — | $ | -1.03 | |||||||||||
discontinued operations – diluted | |||||||||||||||||||
Net loss attributable to | $ | -3.66 | $ | -4.75 | $ | — | $ | -8.41 | |||||||||||
The Phoenix Companies, Inc.– basic | |||||||||||||||||||
Net loss attributable to | $ | -3.66 | $ | -4.75 | $ | — | $ | -8.41 | |||||||||||
The Phoenix Companies, Inc.– diluted | |||||||||||||||||||
Basic weighted-average common shares | 5,814 | 5,814 | -4 | — | 5,814 | ||||||||||||||
outstanding (in thousands) | |||||||||||||||||||
Diluted weighted-average common shares | 5,814 | 5,814 | -4 | — | 5,814 | ||||||||||||||
outstanding (in thousands) | |||||||||||||||||||
——————— | |||||||||||||||||||
-1 | Adjustments related to the correction of errors reflect amounts prior to the retrospective adoption of amended guidance to ASC 944, Financial Services – Insurance (ASU 2010-26). See footnote 2 below for additional information regarding these amounts and the retrospective adoption. | ||||||||||||||||||
-2 | Adjustments related to the retrospective adoption of amended guidance to ASC 944, Financial Services – Insurance (ASU 2010-26), have been updated from those originally disclosed in the First Quarter 2012 Quarterly Report on Form 10-Q filing to reflect the correction of errors identified related to the adoption of the amended guidance as well as indirect impact of the correction of errors associated with the restatement. | ||||||||||||||||||
-3 | All share amounts for all periods reflect the 1-for-20 reverse stock split, which was effective August 10, 2012. See Note 11 to these consolidated financial statements for additional information on the reverse stock split. | ||||||||||||||||||
-4 | Weighted-average common shares outstanding have been updated to reflect the impact of an error which had no material impact to EPS information, basic or diluted, for any period presented. | ||||||||||||||||||
27. Supplemental Unaudited Quarterly Financial Information (continued) | |||||||||||||||||||
Consolidated Balance Sheet | |||||||||||||||||||
As of September 30, 2012 | |||||||||||||||||||
($ in millions, except share data) | |||||||||||||||||||
ASSETS: | |||||||||||||||||||
Available-for-sale debt securities, at fair value | $ | 12,436.7 | |||||||||||||||||
Available-for-sale equity securities, at fair value | 30.9 | ||||||||||||||||||
Limited partnerships and other investments | 559.2 | ||||||||||||||||||
Policy loans, at unpaid principal balances | 2,338.4 | ||||||||||||||||||
Derivative investments | 195.1 | ||||||||||||||||||
Fair value investments | 213.8 | ||||||||||||||||||
Total investments | 15,774.1 | ||||||||||||||||||
Cash and cash equivalents | 283.8 | ||||||||||||||||||
Accrued investment income | 207.8 | ||||||||||||||||||
Receivables | 663.1 | ||||||||||||||||||
Deferred policy acquisition costs | 944.4 | ||||||||||||||||||
Deferred income taxes, net | 61.1 | ||||||||||||||||||
Other assets | 279.3 | ||||||||||||||||||
Discontinued operations assets | 53.9 | ||||||||||||||||||
Separate account assets | 3,395.4 | ||||||||||||||||||
Total assets | $ | 21,662.9 | |||||||||||||||||
LIABILITIES: | |||||||||||||||||||
Policy liabilities and accruals | $ | 12,657.10 | |||||||||||||||||
Policyholder deposit funds | 2,914.6 | ||||||||||||||||||
Dividend obligations (1) | 991.0 | ||||||||||||||||||
Indebtedness | 378.8 | ||||||||||||||||||
Other liabilities | 730.5 | ||||||||||||||||||
Discontinued operations liabilities | 48.8 | ||||||||||||||||||
Separate account liabilities | 3,395.4 | ||||||||||||||||||
Total liabilities | 21,116.2 | ||||||||||||||||||
COMMITMENTS AND CONTINGENT LIABILITIES (Notes 23, 24, & 25) | |||||||||||||||||||
STOCKHOLDERS’ EQUITY: | |||||||||||||||||||
Common stock, $.01 par value: 5.7 million shares outstanding (2) | 0.1 | ||||||||||||||||||
Additional paid-in capital | 2,632.7 | ||||||||||||||||||
Accumulated other comprehensive loss | -232 | ||||||||||||||||||
Accumulated deficit | -1,676.40 | ||||||||||||||||||
Treasury stock, at cost: 0.6 million shares (2) | -182.9 | ||||||||||||||||||
Total The Phoenix Companies, Inc. stockholders’ equity | 541.5 | ||||||||||||||||||
Noncontrolling interests | 5.2 | ||||||||||||||||||
Total stockholders’ equity | 546.7 | ||||||||||||||||||
Total liabilities and stockholders’ equity | $ | 21,662.9 | |||||||||||||||||
——————— | |||||||||||||||||||
-1 | Dividend obligations were previously included in policy liabilities and accruals. | ||||||||||||||||||
-2 | All share amounts for all periods reflect the 1-for-20 reverse stock split, which was effective August 10, 2012. See Note 11 to these consolidated financial statements for additional information on the reverse stock split. | ||||||||||||||||||
Consolidated Balance Sheet | |||||||||||||||||||
($ in millions, except share data) | As of June 30, 2012 | ||||||||||||||||||
As previously | Correction | Adjusted | Retrospective | As restated | |||||||||||||||
reported | of errors (1) | prior to the | Adoption (2) | and amended | |||||||||||||||
retrospective | |||||||||||||||||||
adoption | |||||||||||||||||||
ASSETS: | |||||||||||||||||||
Available-for-sale debt securities, at fair value | $ | 12,335.3 | $ | -111.3 | $ | 12,224.0 | $ | — | $ | 12,224.0 | |||||||||
Available-for-sale equity securities, at fair value | 42.1 | -4.6 | 37.5 | — | 37.5 | ||||||||||||||
Limited partnerships and other investments | 618.5 | -57 | 561.5 | — | 561.5 | ||||||||||||||
Policy loans, at unpaid principal balances | 2,362.4 | — | 2,362.4 | — | 2,362.4 | ||||||||||||||
Derivative investments | 186.6 | -9 | 177.6 | — | 177.6 | ||||||||||||||
Fair value investments | 87.0 | 111.0 | 198.0 | — | 198.0 | ||||||||||||||
Total investments | 15,631.9 | -70.9 | 15,561.0 | — | 15,561.0 | ||||||||||||||
Cash and cash equivalents | 248.9 | -35.9 | 213.0 | — | 213.0 | ||||||||||||||
Accrued investment income | 186.6 | — | 186.6 | — | 186.6 | ||||||||||||||
Receivables | 422.5 | 246.7 | 669.2 | — | 669.2 | ||||||||||||||
Deferred policy acquisition costs | 1,076.0 | -62.7 | 1,013.3 | — | 1,013.3 | ||||||||||||||
Deferred income taxes, net | 91.7 | -2.1 | 89.6 | — | 89.6 | ||||||||||||||
Other assets | 156.8 | 69.6 | 226.4 | — | 226.4 | ||||||||||||||
Discontinued operations assets | 43.6 | 14.6 | 58.2 | — | 58.2 | ||||||||||||||
Separate account assets | 3,336.8 | — | 3,336.8 | — | 3,336.8 | ||||||||||||||
Total assets | $ | 21,194.8 | $ | 159.3 | $ | 21,354.1 | $ | — | $ | 21,354.1 | |||||||||
LIABILITIES: | |||||||||||||||||||
Policy liabilities and accruals | $ | 13,040.1 | $ | -436.5 | $ | 12,603.6 | $ | — | $ | 12,603.60 | |||||||||
Policyholder deposit funds | 2,767.1 | — | 2,767.1 | — | 2,767.1 | ||||||||||||||
Dividend obligations (3) | — | 875.5 | 875.5 | — | 875.5 | ||||||||||||||
Indebtedness | 426.9 | — | 426.9 | — | 426.9 | ||||||||||||||
Other liabilities | 642.7 | — | 642.7 | — | 642.7 | ||||||||||||||
Discontinued operations liabilities | 34.6 | 14.6 | 49.2 | — | 49.2 | ||||||||||||||
Separate account liabilities | 3,336.8 | — | 3,336.8 | — | 3,336.8 | ||||||||||||||
Total liabilities | 20,248.2 | 453.6 | 20,701.8 | — | 20,701.8 | ||||||||||||||
COMMITMENTS AND CONTINGENT LIABILITIES (Notes 23, 24, & 25) | |||||||||||||||||||
STOCKHOLDERS’ EQUITY: | |||||||||||||||||||
Common stock, $.01 par value: 5.7 million | 1.3 | — | 1.3 | — | 1.3 | ||||||||||||||
shares outstanding (4) | |||||||||||||||||||
Additional paid-in capital | 2,631.0 | — | 2,631.0 | — | 2,631.0 | ||||||||||||||
Accumulated other comprehensive loss | -124.9 | -102.4 | -227.3 | — | -227.3 | ||||||||||||||
Accumulated deficit | -1,380.80 | -196.8 | -1,577.60 | — | -1,577.60 | ||||||||||||||
Treasury stock, at cost: 0.6 million shares (4) | -180 | — | -180 | — | -180 | ||||||||||||||
Total The Phoenix Companies, Inc. | 946.6 | -299.2 | 647.4 | — | 647.4 | ||||||||||||||
stockholders’ equity | |||||||||||||||||||
Noncontrolling interests | — | 4.9 | 4.9 | — | 4.9 | ||||||||||||||
Total stockholders’ equity | 946.6 | -294.3 | 652.3 | — | 652.4 | ||||||||||||||
Total liabilities and stockholders’ equity | $ | 21,194.8 | $ | 159.3 | $ | 21,354.1 | $ | — | $ | 21,354.1 | |||||||||
——————— | |||||||||||||||||||
-1 | Adjustments related to the correction of errors reflect amounts prior to the retrospective adoption of amended guidance to ASC 944, Financial Services – Insurance (ASU 2010-26). See footnote 2 below for additional information regarding these amounts and the retrospective adoption. | ||||||||||||||||||
-2 | Adjustments related to the retrospective adoption of amended guidance to ASC 944, Financial Services – Insurance (ASU 2010-26), have been updated from those originally disclosed in the First Quarter 2012 Quarterly Report on Form 10-Q filing to reflect the correction of errors identified related to the adoption of the amended guidance as well as indirect impact of the correction of errors associated with the restatement. | ||||||||||||||||||
-3 | Dividend obligations were previously included in policy liabilities and accruals. | ||||||||||||||||||
-4 | All share amounts for all periods reflect the 1-for-20 reverse stock split, which was effective August 10, 2012. See Note 11 to these consolidated financial statements for additional information on the reverse stock split. | ||||||||||||||||||
Consolidated Balance Sheet | |||||||||||||||||||
($ in millions, except share data) | As of March 31, 2012 | ||||||||||||||||||
As previously | Correction | Adjusted | Retrospective | As restated | |||||||||||||||
reported | of errors (1) | prior to the | Adoption (2) | and amended | |||||||||||||||
retrospective | |||||||||||||||||||
adoption | |||||||||||||||||||
ASSETS: | |||||||||||||||||||
Available-for-sale debt securities, at fair value | $ | 12,132.9 | $ | -70.2 | $ | 12,062.7 | $ | — | $ | 12,062.7 | |||||||||
Available-for-sale equity securities, at fair value | 42.1 | -3.7 | 38.4 | — | 38.4 | ||||||||||||||
Limited partnerships and other investments | 613.0 | -40.7 | 572.3 | — | 572.3 | ||||||||||||||
Policy loans, at unpaid principal balances | 2,374.8 | — | 2,374.8 | — | 2,374.8 | ||||||||||||||
Derivative investments | 180.6 | -6 | 174.6 | — | 174.6 | ||||||||||||||
Fair value investments | 89.2 | 95.4 | 184.6 | — | 184.6 | ||||||||||||||
Total investments | 15,432.6 | -25.2 | 15,407.4 | — | 15,407.4 | ||||||||||||||
Cash and cash equivalents | 209.6 | -32.6 | 177.0 | — | 177.0 | ||||||||||||||
Accrued investment income | 182.5 | — | 182.5 | — | 182.5 | ||||||||||||||
Receivables | 398.6 | 250.9 | 649.5 | — | 649.5 | ||||||||||||||
Deferred policy acquisition costs | 1,122.1 | -59.2 | 1,062.9 | — | 1,062.9 | ||||||||||||||
Deferred income taxes, net | 93.6 | -1.5 | 92.1 | — | 92.1 | ||||||||||||||
Other assets | 144.5 | 82.5 | 227.0 | — | 227.0 | ||||||||||||||
Discontinued operations assets | 67.8 | 14.9 | 82.7 | — | 82.7 | ||||||||||||||
Separate account assets | 4,041.6 | 1.0 | 4,042.6 | — | 4,042.6 | ||||||||||||||
Total assets | $ | 21,692.9 | $ | 230.8 | $ | 21,923.7 | $ | — | $ | 21,923.7 | |||||||||
LIABILITIES: | |||||||||||||||||||
Policy liabilities and accruals | $ | 12,971.0 | $ | -375.5 | $ | 12,595.5 | $ | — | $ | 12,595.5 | |||||||||
Policyholder deposit funds | 2,602.5 | 2.0 | 2,604.5 | — | 2,604.5 | ||||||||||||||
Dividend obligations (3) | — | 802.4 | 802.4 | — | 802.4 | ||||||||||||||
Indebtedness | 426.9 | — | 426.9 | — | 426.9 | ||||||||||||||
Other liabilities | 645.3 | 44.9 | 690.2 | — | 690.2 | ||||||||||||||
Discontinued operations liabilities | 57.4 | 14.9 | 72.3 | — | 72.3 | ||||||||||||||
Separate account liabilities | 4,041.6 | 1.0 | 4,042.6 | — | 4,042.6 | ||||||||||||||
Total liabilities | 20,744.7 | 489.7 | 21,234.4 | — | 21,234.4 | ||||||||||||||
COMMITMENTS AND CONTINGENT LIABILITIES (Notes 23, 24, & 25) | |||||||||||||||||||
STOCKHOLDERS’ EQUITY: | |||||||||||||||||||
Common stock, $.01 par value: 5.7 million | 1.3 | — | 1.3 | — | 1.3 | ||||||||||||||
shares outstanding (4) | |||||||||||||||||||
Additional paid-in capital | 2,630.8 | — | 2,630.8 | — | 2,630.8 | ||||||||||||||
Accumulated other comprehensive loss | -136.8 | -87.1 | -223.9 | — | -223.9 | ||||||||||||||
Accumulated deficit | -1,367.60 | -174.6 | -1,542.20 | — | -1,542.20 | ||||||||||||||
Treasury stock, at cost: 0.6 million shares (4) | -179.5 | — | -179.5 | — | -179.5 | ||||||||||||||
Total The Phoenix Companies, Inc. | 948.2 | -261.7 | 686.5 | — | 686.5 | ||||||||||||||
stockholders’ equity | |||||||||||||||||||
Noncontrolling interests | — | 2.8 | 2.8 | — | 2.8 | ||||||||||||||
Total stockholders’ equity | 948.2 | -258.9 | 689.3 | — | 689.3 | ||||||||||||||
Total liabilities and stockholders’ equity | $ | 21,692.9 | $ | 230.8 | $ | 21,923.7 | $ | — | $ | 21,923.7 | |||||||||
——————— | |||||||||||||||||||
-1 | Adjustments related to the correction of errors reflect amounts prior to the retrospective adoption of amended guidance to ASC 944, Financial Services – Insurance (ASU 2010-26). See footnote 2 below for additional information regarding these amounts and the retrospective adoption. | ||||||||||||||||||
-2 | Adjustments related to the retrospective adoption of amended guidance to ASC 944, Financial Services – Insurance (ASU 2010-26), have been updated from those originally disclosed in the First Quarter 2012 Quarterly Report on Form 10-Q filing to reflect the correction of errors identified related to the adoption of the amended guidance as well as indirect impact of the correction of errors associated with the restatement. | ||||||||||||||||||
-3 | Dividend obligations were previously included in policy liabilities and accruals. | ||||||||||||||||||
-4 | All share amounts for all periods reflect the 1-for-20 reverse stock split, which was effective August 10, 2012. See Note 11 to these consolidated financial statements for additional information on the reverse stock split. | ||||||||||||||||||
Consolidated Statement of Changes in Stockholders’ Equity | |||||||||||||||||||
For the period ended September 30, 2012 | |||||||||||||||||||
($ in millions, except share data) | |||||||||||||||||||
COMMON STOCK:(1) | |||||||||||||||||||
Balance, beginning of period | $ | 1.3 | |||||||||||||||||
Adjustment for reverse stock split | -1.2 | ||||||||||||||||||
Balance, end of period | $ | 0.1 | |||||||||||||||||
ADDITIONAL PAID-IN CAPITAL: | |||||||||||||||||||
Balance, beginning of period | $ | 2,630.5 | |||||||||||||||||
Issuance of shares and compensation expense on stock compensation awards | 2.2 | ||||||||||||||||||
Adjustment for reverse stock split | — | ||||||||||||||||||
Balance, end of period | $ | 2,632.7 | |||||||||||||||||
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS): | $ | ||||||||||||||||||
Balance, beginning of period | -230.7 | ||||||||||||||||||
Adjustment for initial application of accounting changes | — | ||||||||||||||||||
Other comprehensive income (loss) | 1.3 | ||||||||||||||||||
Balance, end of period | $ | -232 | |||||||||||||||||
ACCUMULATED DEFICIT: | |||||||||||||||||||
Balance, beginning of period | $ | -1,528.70 | |||||||||||||||||
Adjustment for initial application of accounting changes | — | ||||||||||||||||||
Net income (loss) | -147.7 | ||||||||||||||||||
Balance, end of period | $ | -1,676.40 | |||||||||||||||||
TREASURY STOCK, AT COST:(1) | |||||||||||||||||||
Balance, beginning of period | $ | -179.5 | |||||||||||||||||
Treasury shares purchased | -3.4 | ||||||||||||||||||
Balance, end of period | $ | -182.9 | |||||||||||||||||
TOTAL STOCKHOLDERS’ EQUITY ATTRIBUTABLE TO THE PHOENIX COMPANIES, INC.: | |||||||||||||||||||
Balance, beginning of period | $ | 692.9 | |||||||||||||||||
Adjustment for initial application of accounting changes | — | ||||||||||||||||||
Change in stockholders’ equity attributable to The Phoenix Companies, Inc. | -151.4 | ||||||||||||||||||
Stockholders’ equity, end of period | $ | 541.5 | |||||||||||||||||
NONCONTROLLING INTERESTS: | |||||||||||||||||||
Balance, beginning of period | $ | 2.8 | |||||||||||||||||
Change in noncontrolling interests | 2.4 | ||||||||||||||||||
Balance, end of period | $ | 5.2 | |||||||||||||||||
TOTAL STOCKHOLDERS’ EQUITY: | |||||||||||||||||||
Balance, beginning of period | $ | 695.7 | |||||||||||||||||
Adjustment for initial application of accounting changes | — | ||||||||||||||||||
Change in stockholders’ equity | -149 | ||||||||||||||||||
Stockholders’ equity, end of period | $ | 546.7 | |||||||||||||||||
——————— | |||||||||||||||||||
-1 | Reflects the 1-for-20 reverse stock split, which was effective August 10, 2012. See Note 11 to these consolidated financial statements for additional information on the reverse stock split. | ||||||||||||||||||
27. Supplemental Unaudited Quarterly Financial Information (Part 2) | ' | ||||||||||||||||||
27. Supplemental Unaudited Quarterly Financial Information (continued) | |||||||||||||||||||
Consolidated Statement of Changes in Stockholders’ Equity | |||||||||||||||||||
($ in millions, except share data) | For the period ended June 30, 2012 | ||||||||||||||||||
As previously | Correction | Adjusted | Retrospective | As restated | |||||||||||||||
reported | of errors (1) | prior to the | Adoption (2) | and amended | |||||||||||||||
retrospective | |||||||||||||||||||
adoption | |||||||||||||||||||
COMMON STOCK:(3) | |||||||||||||||||||
Balance, beginning of period | $ | 1.3 | $ | — | $ | 1.3 | $ | — | $ | 1.3 | |||||||||
Adjustment for reverse stock split | — | — | — | — | — | ||||||||||||||
Balance, end of period | $ | 1.3 | $ | — | $ | 1.3 | $ | — | $ | 1.3 | |||||||||
ADDITIONAL PAID-IN CAPITAL: | |||||||||||||||||||
Balance, beginning of period | $ | 2,630.5 | $ | — | $ | 2,630.5 | $ | — | $ | 2,630.5 | |||||||||
Issuance of shares and compensation expense | 0.5 | — | 0.5 | — | 0.5 | ||||||||||||||
on stock compensation awards | |||||||||||||||||||
Adjustment for reverse stock split | — | — | — | — | — | ||||||||||||||
Balance, end of period | $ | 2,631.0 | $ | — | $ | 2,631.0 | $ | — | $ | 2,631.0 | |||||||||
ACCUMULATED OTHER COMPREHENSIVE | $ | ||||||||||||||||||
INCOME (LOSS): | |||||||||||||||||||
Balance, beginning of period | -170.7 | $ | -103.5 | $ | -274.2 | $ | 43.5 | $ | -230.7 | ||||||||||
Adjustment for initial application of | — | — | — | — | — | ||||||||||||||
accounting changes | |||||||||||||||||||
Other comprehensive income (loss) | 9.9 | 6.5 | 3.4 | — | 3.4 | ||||||||||||||
Balance, end of period | $ | -160.8 | $ | -110 | $ | -270.8 | $ | 43.5 | $ | -207.3 | |||||||||
ACCUMULATED DEFICIT: | |||||||||||||||||||
Balance, beginning of period | $ | -1,155.40 | $ | -163.3 | $ | -1,318.70 | $ | -210 | $ | -1,528.70 | |||||||||
Adjustment for initial application of | — | — | — | — | — | ||||||||||||||
accounting changes | |||||||||||||||||||
Net loss | -21.3 | -27.6 | -48.9 | — | -48.9 | ||||||||||||||
Balance, end of period | $ | -1,176.70 | $ | -190.9 | $ | -1,367.60 | $ | -210 | $ | -1,577.60 | |||||||||
TREASURY STOCK, AT COST:(3) | |||||||||||||||||||
Balance, beginning of period | $ | -179.5 | $ | — | $ | -179.5 | $ | — | $ | -179.5 | |||||||||
Treasury shares purchased | -0.5 | — | -0.5 | — | -0.5 | ||||||||||||||
Balance, end of period | $ | -180 | $ | — | $ | -180 | $ | — | $ | -180 | |||||||||
TOTAL STOCKHOLDERS’ EQUITY | |||||||||||||||||||
ATTRIBUTABLE TO | |||||||||||||||||||
THE PHOENIX COMPANIES INC.: | |||||||||||||||||||
Balance, beginning of period | $ | 1,126.2 | $ | -266.8 | $ | 859.4 | $ | -166.5 | $ | 692.9 | |||||||||
Adjustment for initial application of | — | — | — | — | — | ||||||||||||||
accounting changes | |||||||||||||||||||
Change in stockholders’ equity attributable to | -11.4 | -34.1 | -45.5 | — | -45.5 | ||||||||||||||
The Phoenix Companies, Inc. | |||||||||||||||||||
Stockholders’ equity, end of period | $ | 1,114.8 | $ | -300.9 | $ | 813.9 | $ | -166.5 | $ | 647.4 | |||||||||
NONCONTROLLING INTERESTS: | |||||||||||||||||||
Balance, beginning of period | $ | — | $ | 2.8 | $ | 2.8 | — | $ | 2.8 | ||||||||||
Change in noncontrolling interests | — | 2.1 | 2.1 | — | 2.1 | ||||||||||||||
Balance, end of period | $ | — | $ | 4.9 | $ | 4.9 | $ | — | $ | 4.9 | |||||||||
TOTAL STOCKHOLDERS’ EQUITY: | |||||||||||||||||||
Balance, beginning of period | $ | 1,126.2 | $ | -264 | $ | 862.2 | $ | -166.5 | $ | 695.7 | |||||||||
Adjustment for initial application of | — | — | — | — | — | ||||||||||||||
accounting changes | |||||||||||||||||||
Change in stockholders’ equity | -11.4 | -32 | -43.4 | — | -43.4 | ||||||||||||||
Stockholders’ equity, end of period | $ | 1,114.8 | $ | -296 | $ | 818.8 | $ | -166.5 | $ | 652.3 | |||||||||
——————— | |||||||||||||||||||
-1 | Adjustments related to the correction of errors reflect amounts prior to the retrospective adoption of amended guidance to ASC 944, Financial Services – Insurance (ASU 2010-26). See footnote 2 below for additional information regarding these amounts and the retrospective adoption. | ||||||||||||||||||
-2 | Adjustments related to the retrospective adoption of amended guidance to ASC 944, Financial Services – Insurance (ASU 2010-26), have been updated from those originally disclosed in the First Quarter 2012 Quarterly Report on Form 10-Q filing to reflect the correction of errors identified related to the adoption of the amended guidance as well as indirect impact of the correction of errors associated with the restatement. | ||||||||||||||||||
-3 | Reflects the 1-for-20 reverse stock split, which was effective August 10, 2012. See Note 11 to these consolidated financial statements for additional information on the reverse stock split. | ||||||||||||||||||
Consolidated Statement of Changes in Stockholders’ Equity | |||||||||||||||||||
($ in millions, except share data) | For the period ended March 31, 2012 | ||||||||||||||||||
As previously | Correction | Adjusted | Retrospective | As restated | |||||||||||||||
reported | of errors (1) | prior to the | Adoption (2) | and amended | |||||||||||||||
retrospective | |||||||||||||||||||
adoption | |||||||||||||||||||
COMMON STOCK:(3) | |||||||||||||||||||
Balance, beginning of period | $ | 1.3 | $ | — | $ | 1.3 | $ | — | $ | 1.3 | |||||||||
Adjustment for reverse stock split | — | — | — | — | — | ||||||||||||||
Balance, end of period | $ | 1.3 | $ | — | $ | 1.3 | $ | — | $ | 1.3 | |||||||||
ADDITIONAL PAID-IN CAPITAL: | |||||||||||||||||||
Balance, beginning of period | $ | 2,630.5 | $ | — | $ | 2,630.5 | $ | — | $ | 2,630.5 | |||||||||
Issuance of shares and compensation expense | 0.3 | — | 0.3 | — | 0.3 | ||||||||||||||
on stock compensation awards | |||||||||||||||||||
Adjustment for reverse stock split | — | — | — | — | — | ||||||||||||||
Balance, end of period | $ | 2,630.8 | $ | — | $ | 2,630.8 | $ | — | $ | 2,630.8 | |||||||||
ACCUMULATED OTHER COMPREHENSIVE | $ | ||||||||||||||||||
INCOME (LOSS): | |||||||||||||||||||
Balance, beginning of period | -170.7 | $ | -103.5 | $ | -274.2 | $ | 43.5 | $ | -230.7 | ||||||||||
Adjustment for initial application of | — | — | — | — | — | ||||||||||||||
accounting changes | |||||||||||||||||||
Other comprehensive income (loss) | -2 | 8.8 | 6.8 | — | 6.8 | ||||||||||||||
Balance, end of period | $ | -172.7 | $ | -94.7 | $ | -267.4 | $ | 43.5 | $ | -223.9 | |||||||||
ACCUMULATED DEFICIT: | |||||||||||||||||||
Balance, beginning of period | $ | -1,155.40 | $ | -163.3 | $ | -1,318.70 | $ | -210 | $ | -1,528.70 | |||||||||
Adjustment for initial application of | — | — | — | — | — | ||||||||||||||
accounting changes | |||||||||||||||||||
Net loss | -8.1 | -5.4 | -13.5 | — | -13.5 | ||||||||||||||
Balance, end of period | $ | -1,163.50 | $ | -168.7 | $ | -1,332.20 | $ | -210 | $ | -1,542.20 | |||||||||
TREASURY STOCK, AT COST:(3) | |||||||||||||||||||
Balance, beginning of period | $ | -179.5 | $ | — | $ | -179.5 | $ | — | $ | -179.5 | |||||||||
Treasury shares purchased | — | — | — | — | — | ||||||||||||||
Balance, end of period | $ | -179.5 | $ | — | $ | -179.5 | $ | — | $ | -179.5 | |||||||||
TOTAL STOCKHOLDERS’ EQUITY | |||||||||||||||||||
ATTRIBUTABLE TO | |||||||||||||||||||
THE PHOENIX COMPANIES: | |||||||||||||||||||
Balance, beginning of period | $ | 1,126.2 | $ | -266.8 | $ | 859.4 | $ | -166.5 | $ | 692.9 | |||||||||
Adjustment for initial application of | — | — | — | — | — | ||||||||||||||
accounting changes | |||||||||||||||||||
Change in stockholders’ equity attributable to | -9.8 | 3.4 | -6.4 | — | -6.4 | ||||||||||||||
The Phoenix Companies, Inc. | |||||||||||||||||||
Stockholders’ equity, end of period | $ | 1,116.4 | $ | -263.4 | $ | 853.0 | $ | -166.5 | $ | 686.5 | |||||||||
NONCONTROLLING INTERESTS: | |||||||||||||||||||
Balance, beginning of period | $ | — | $ | 2.8 | $ | 2.8 | — | $ | 2.8 | ||||||||||
Change in noncontrolling interests | — | — | — | — | — | ||||||||||||||
Balance, end of period | $ | — | $ | 2.8 | $ | 2.8 | $ | — | $ | 2.8 | |||||||||
TOTAL STOCKHOLDERS’ EQUITY: | |||||||||||||||||||
Balance, beginning of period | $ | 1,126.2 | $ | -264 | $ | 862.2 | $ | -166.5 | $ | 695.7 | |||||||||
Adjustment for initial application of | — | — | — | — | — | ||||||||||||||
accounting changes | |||||||||||||||||||
Change in stockholders’ equity | -9.8 | 3.4 | -6.4 | — | -6.4 | ||||||||||||||
Stockholders’ equity, end of period | $ | 1,116.4 | $ | -260.6 | $ | 855.8 | $ | -166.5 | $ | 689.3 | |||||||||
——————— | |||||||||||||||||||
-1 | Adjustments related to the correction of errors reflect amounts prior to the retrospective adoption of amended guidance to ASC 944, Financial Services – Insurance (ASU 2010-26). See footnote 2 below for additional information regarding these amounts and the retrospective adoption. | ||||||||||||||||||
-2 | Adjustments related to the retrospective adoption of amended guidance to ASC 944, Financial Services – Insurance (ASU 2010-26), have been updated from those originally disclosed in the First Quarter 2012 Quarterly Report on Form 10-Q filing to reflect the correction of errors identified related to the adoption of the amended guidance as well as indirect impact of the correction of errors associated with the restatement. | ||||||||||||||||||
-3 | Reflects the 1-for-20 reverse stock split, which was effective August 10, 2012. See Note 11 to these consolidated financial statements for additional information on the reverse stock split. | ||||||||||||||||||
Consolidated Statement of Cash Flows | |||||||||||||||||||
For the period ended September 30, 2012 | |||||||||||||||||||
($ in millions) | |||||||||||||||||||
OPERATING ACTIVITIES: | |||||||||||||||||||
Net loss | $ | -147.7 | |||||||||||||||||
Net realized investment losses | 4.2 | ||||||||||||||||||
Gain on debt repurchase | -11.9 | ||||||||||||||||||
Policy acquisition costs deferred | -56.2 | ||||||||||||||||||
Amortization of deferred policy acquisition costs | 164.6 | ||||||||||||||||||
Amortization and depreciation | 9.9 | ||||||||||||||||||
Interest credited | 90.1 | ||||||||||||||||||
Equity in earnings of limited partnerships and other investments | -46 | ||||||||||||||||||
Change in: | |||||||||||||||||||
Accrued investment income | -118.1 | ||||||||||||||||||
Deferred income taxes | -24.7 | ||||||||||||||||||
Receivables | -19.8 | ||||||||||||||||||
Policy liabilities and accruals | -312.4 | ||||||||||||||||||
Dividend obligations | 66.9 | ||||||||||||||||||
Impact of operating activities of consolidated investment entities, net | — | ||||||||||||||||||
Other operating activities, net | -2.3 | ||||||||||||||||||
Cash used for operating activities | -403.4 | ||||||||||||||||||
INVESTING ACTIVITIES: | |||||||||||||||||||
Purchases of: | |||||||||||||||||||
Available-for-sale debt securities | -2,367.70 | ||||||||||||||||||
Available-for-sale equity securities | -6.3 | ||||||||||||||||||
Derivative instruments | -46 | ||||||||||||||||||
Fair value investments | -27.7 | ||||||||||||||||||
Other investments | -1 | ||||||||||||||||||
Sales, repayments and maturities of: | |||||||||||||||||||
Available-for-sale debt securities | 2,190.1 | ||||||||||||||||||
Available-for-sale equity securities | 7.9 | ||||||||||||||||||
Derivative instruments | 16.2 | ||||||||||||||||||
Fair value investments | 9.3 | ||||||||||||||||||
Other investments | 8.3 | ||||||||||||||||||
Contributions to limited partnerships and limited liability corporations | -63.7 | ||||||||||||||||||
Distributions from limited partnerships and limited liability corporations | 101.9 | ||||||||||||||||||
Policy loans, net | 106.7 | ||||||||||||||||||
Impact of investing activities of consolidated investment entities, net | — | ||||||||||||||||||
Other investing activities, net | -5.8 | ||||||||||||||||||
Cash used for investing activities | -77.8 | ||||||||||||||||||
FINANCING ACTIVITIES: | |||||||||||||||||||
Policyholder deposit fund deposits | 1,216.3 | ||||||||||||||||||
Policyholder deposit fund withdrawals | -861.8 | ||||||||||||||||||
Net transfers to/from separate accounts | 279.4 | ||||||||||||||||||
Impact of financing activities of consolidated investment entities, net | 0.1 | ||||||||||||||||||
Other financing activities, net | -39.6 | ||||||||||||||||||
Cash provided by financing activities | 594.4 | ||||||||||||||||||
Change in cash and cash equivalents | 113.2 | ||||||||||||||||||
Change in cash included in discontinued operations assets | 2.4 | ||||||||||||||||||
Cash and cash equivalents, beginning of period | 168.2 | ||||||||||||||||||
Cash and cash equivalents, end of period | $ | 283.8 | |||||||||||||||||
Supplemental Disclosure of Cash Flow Information | |||||||||||||||||||
Income taxes paid | $ | -3.3 | |||||||||||||||||
Interest expense on indebtedness paid | $ | -20.4 | |||||||||||||||||
Non-Cash Transactions During the Year | |||||||||||||||||||
Investment exchanges | $ | 84.4 | |||||||||||||||||
Consolidated Statement of Cash Flows | |||||||||||||||||||
($ in millions) | For the period ended June 30, 2012 | ||||||||||||||||||
As previously | Correction | Adjusted | Retrospective | As restated | |||||||||||||||
reported | of errors (1) | prior to the | Adoption (2) | and amended | |||||||||||||||
retrospective | |||||||||||||||||||
adoption | |||||||||||||||||||
OPERATING ACTIVITIES: | |||||||||||||||||||
Net loss | $ | -21.3 | $ | -27.6 | $ | -48.9 | $ | — | $ | -48.9 | |||||||||
Net realized investment gains (losses) | 23.8 | 2.1 | 25.9 | — | 25.9 | ||||||||||||||
Gain on debt repurchase | — | — | — | — | — | ||||||||||||||
Policy acquisition costs deferred | -47.6 | 9.4 | -38.2 | — | -38.2 | ||||||||||||||
Amortization of deferred policy acquisition costs | 92.0 | 0.9 | 92.9 | — | 92.9 | ||||||||||||||
Amortization and depreciation | 6.9 | — | 6.9 | — | 6.9 | ||||||||||||||
Interest credited | — | 58.6 | 58.6 | — | 58.6 | ||||||||||||||
Equity in earnings of | -41.7 | 4.7 | -37 | — | -37 | ||||||||||||||
limited partnerships and other investments | |||||||||||||||||||
Change in: | |||||||||||||||||||
Accrued investment income | -18 | -49.4 | -67.4 | — | -67.4 | ||||||||||||||
Deferred income taxes | -0.4 | -13.5 | -13.9 | — | -13.9 | ||||||||||||||
Receivables | -8.4 | 7.4 | -1 | — | -1 | ||||||||||||||
Policy liabilities and accruals | -46.9 | -201.8 | -248.7 | — | -248.7 | ||||||||||||||
Dividend obligations | — | 36.2 | 36.2 | — | 36.2 | ||||||||||||||
Impact of operating activities of | — | -3.4 | -3.4 | — | -3.4 | ||||||||||||||
consolidated investment entities, net | |||||||||||||||||||
Other operating activities, net | -7.6 | -16.1 | -23.7 | — | -23.7 | ||||||||||||||
Cash from (for) continuing operations | -69.2 | -192.5 | -261.7 | — | -261.7 | ||||||||||||||
Discontinued operations, net | -2 | 2.0 | — | — | — | ||||||||||||||
Cash used for operating activities | -71.2 | -190.5 | -261.7 | — | -261.7 | ||||||||||||||
INVESTING ACTIVITIES: | |||||||||||||||||||
Purchases of: | |||||||||||||||||||
Available-for-sale debt securities | -1,551.30 | 100.9 | -1,450.40 | — | -1,450.40 | ||||||||||||||
Available-for-sale equity securities | -6 | 0.1 | -5.9 | — | -5.9 | ||||||||||||||
Derivative instruments | -29.2 | — | -29.2 | — | -29.2 | ||||||||||||||
Fair value investments | — | -16 | -16 | — | -16 | ||||||||||||||
Other investments | -45 | 44.4 | -0.6 | — | -0.6 | ||||||||||||||
Sales, repayments and maturities of: | |||||||||||||||||||
Available-for-sale debt securities | 1,323.5 | -66.4 | 1,257.1 | — | 1,257.1 | ||||||||||||||
Available-for-sale equity securities | 0.4 | — | 0.4 | — | 0.4 | ||||||||||||||
Derivative instruments | 12.1 | — | 12.1 | — | 12.1 | ||||||||||||||
Fair value investments | 0.1 | 6.4 | 6.5 | — | 6.5 | ||||||||||||||
Other investments | 75.5 | -65.4 | 10.1 | — | 10.1 | ||||||||||||||
Contributions to limited partnerships | — | -40.3 | -40.3 | — | -40.3 | ||||||||||||||
and limited liability corporations | |||||||||||||||||||
Distributions from limited partnerships | — | 65.5 | 65.5 | — | 65.5 | ||||||||||||||
and limited liability corporations | |||||||||||||||||||
Policy loans, net | 16.9 | 55.1 | 72.0 | — | 72.0 | ||||||||||||||
Impact of investing activities of | — | — | — | — | — | ||||||||||||||
consolidated investment entities, net | |||||||||||||||||||
Other investing activities, net | — | -2 | -2 | — | -2 | ||||||||||||||
Proceeds from sale of subsidiary | 1.0 | -1 | — | — | — | ||||||||||||||
Premises and equipment additions | -2.4 | 2.4 | — | — | — | ||||||||||||||
Discontinued operations, net | 4.0 | -4 | — | — | — | ||||||||||||||
Cash provided by (used for) investing activities | -200.4 | 79.7 | -120.7 | — | -120.7 | ||||||||||||||
(Continued on next page) | Consolidated Statement of Cash Flows | ||||||||||||||||||
($ in millions) | For the period ended June 30, 2012 | ||||||||||||||||||
As previously | Correction | Adjusted | Retrospective | As restated | |||||||||||||||
reported | of errors (1) | prior to the | Adoption (2) | and amended | |||||||||||||||
retrospective | |||||||||||||||||||
adoption | |||||||||||||||||||
FINANCING ACTIVITIES: | |||||||||||||||||||
Policyholder deposit fund deposits | 650.1 | 176.3 | 826.4 | — | 826.4 | ||||||||||||||
Policyholder deposit fund withdrawals | -323.4 | -281.9 | -605.3 | — | -605.3 | ||||||||||||||
Net transfers to/from separate accounts | — | 204.2 | 204.2 | — | 204.2 | ||||||||||||||
Impact of financing activities of | — | 0.5 | 0.5 | — | 0.5 | ||||||||||||||
consolidated investment entities, net | |||||||||||||||||||
Other financing activities, net | — | -0.5 | -0.5 | — | -0.5 | ||||||||||||||
Treasury stock acquired | -0.5 | 0.5 | — | — | — | ||||||||||||||
Cash provided by financing activities | 326.2 | 99.1 | 425.3 | — | 425.3 | ||||||||||||||
Change in cash and cash equivalents | 54.6 | -11.7 | 42.9 | — | 42.9 | ||||||||||||||
Change in cash included in | — | 1.9 | 1.9 | — | 1.9 | ||||||||||||||
discontinued operations assets | |||||||||||||||||||
Cash and cash equivalents, beginning of period | 194.3 | -26.1 | 168.2 | — | 168.2 | ||||||||||||||
Cash and cash equivalents, end of period | $ | 248.9 | $ | -35.9 | $ | 213.0 | $ | — | $ | 213.0 | |||||||||
Supplemental Disclosure of Cash Flow Information | |||||||||||||||||||
Income taxes paid | $ | -3.3 | $ | — | $ | -3.3 | $ | — | $ | -3.3 | |||||||||
Interest expense on indebtedness paid | $ | -15.7 | $ | — | $ | -15.7 | $ | — | $ | -15.7 | |||||||||
Non-Cash Transactions During the Year | |||||||||||||||||||
Investment exchanges | $ | — | $ | 59.1 | $ | 59.1 | $ | — | $ | 59.1 | |||||||||
——————— | |||||||||||||||||||
-1 | Adjustments related to the correction of errors reflect amounts prior to the retrospective adoption of amended guidance to ASC 944, Financial Services – Insurance (ASU 2010-26). See footnote 2 below for additional information regarding these amounts and the retrospective adoption. | ||||||||||||||||||
-2 | Adjustments related to the retrospective adoption of amended guidance to ASC 944, Financial Services – Insurance (ASU 2010-26), have been updated from those originally disclosed in the First Quarter 2012 Quarterly Report on Form 10-Q filing to reflect the correction of errors identified related to the adoption of the amended guidance as well as indirect impact of the correction of errors associated with the restatement. | ||||||||||||||||||
Consolidated Statement of Cash Flows | |||||||||||||||||||
($ in millions) | For the period ended March 31, 2012 | ||||||||||||||||||
As previously | Correction | Adjusted | Retrospective | As restated | |||||||||||||||
reported | of errors (1) | prior to the | Adoption (2) | and amended | |||||||||||||||
retrospective | |||||||||||||||||||
adoption | |||||||||||||||||||
OPERATING ACTIVITIES: | |||||||||||||||||||
Net loss | $ | -8.1 | $ | -5.4 | $ | -13.5 | $ | — | $ | -13.5 | |||||||||
Net realized investment gains (losses) | 15.6 | -7 | 8.6 | — | 8.6 | ||||||||||||||
Gain on debt repurchase | — | — | — | — | — | ||||||||||||||
Policy acquisition costs deferred | -26.1 | 4.9 | -21.2 | — | -21.2 | ||||||||||||||
Amortization of deferred policy acquisition costs | 50.2 | 3.2 | 53.4 | — | 53.4 | ||||||||||||||
Amortization and depreciation | 3.4 | — | 3.4 | — | 3.4 | ||||||||||||||
Interest credited | — | 29.7 | 29.7 | — | 29.7 | ||||||||||||||
Equity in earnings of | -16.4 | -7.6 | -24 | — | -24 | ||||||||||||||
limited partnerships and other investments | |||||||||||||||||||
Change in: | |||||||||||||||||||
Accrued investment income | -13.2 | -34.1 | -47.3 | — | -47.3 | ||||||||||||||
Deferred income taxes | — | -0.7 | -0.7 | — | -0.7 | ||||||||||||||
Receivables | 16.5 | 5.8 | 22.3 | — | 22.3 | ||||||||||||||
Policy liabilities and accruals | -37.3 | -114.2 | -151.5 | — | -151.5 | ||||||||||||||
Dividend obligations | — | 19.9 | 19.9 | — | 19.9 | ||||||||||||||
Impact of operating activities of | — | 0.7 | 0.7 | — | 0.7 | ||||||||||||||
consolidated investment entities, net | |||||||||||||||||||
Other operating activities, net | -21 | -11 | -32 | — | -32 | ||||||||||||||
Cash from (for) continuing operations | -36.4 | -115.8 | -152.2 | — | -152.2 | ||||||||||||||
Discontinued operations, net | 2.5 | -2.5 | — | — | — | ||||||||||||||
Cash used for operating activities | -33.9 | -118.3 | -152.2 | — | -152.2 | ||||||||||||||
INVESTING ACTIVITIES: | |||||||||||||||||||
Purchases of: | |||||||||||||||||||
Available-for-sale debt securities | -665.3 | 40.2 | -625.1 | — | -625.1 | ||||||||||||||
Available-for-sale equity securities | -5 | — | -5 | — | -5 | ||||||||||||||
Derivative instruments | -19 | — | -19 | — | -19 | ||||||||||||||
Other investments | -22.5 | 22.1 | -0.4 | -0.4 | |||||||||||||||
Fair value investments | — | — | — | — | — | ||||||||||||||
Sales, repayments and maturities of: | |||||||||||||||||||
Available-for-sale debt securities | 557.6 | -40.7 | 516.9 | — | 516.9 | ||||||||||||||
Available-for-sale equity securities | 0.3 | — | 0.3 | — | 0.3 | ||||||||||||||
Derivative instruments | 1.8 | — | 1.8 | — | 1.8 | ||||||||||||||
Fair value investments | — | 2.3 | 2.3 | — | 2.3 | ||||||||||||||
Other investments | 30.9 | -25.2 | 5.7 | — | 5.7 | ||||||||||||||
Contributions to limited partnerships | — | -21.7 | -21.7 | — | -21.7 | ||||||||||||||
and limited liability corporations | |||||||||||||||||||
Distributions from limited partnerships | — | 25.2 | 25.2 | — | 25.2 | ||||||||||||||
and limited liability corporations | |||||||||||||||||||
Policy loans, net | 4.5 | 34.1 | 38.6 | — | 38.6 | ||||||||||||||
Impact of investing activities of | — | — | — | — | — | ||||||||||||||
consolidated investment entities, net | |||||||||||||||||||
Other investing activities, net | — | -0.7 | -0.7 | — | -0.7 | ||||||||||||||
Proceeds from sale of subsidiary | — | — | — | — | — | ||||||||||||||
Premises and equipment additions | -0.7 | 0.7 | — | — | — | ||||||||||||||
Discontinued operations, net | -1.9 | 1.9 | — | — | — | ||||||||||||||
Cash provided by (used for) investing activities | -119.3 | 38.2 | -81.1 | — | -81.1 | ||||||||||||||
(Continued on next page) | Consolidated Statement of Cash Flows | ||||||||||||||||||
($ in millions) | For the period ended March 31, 2012 | ||||||||||||||||||
As previously | Correction | Adjusted | Retrospective | As restated | |||||||||||||||
reported | of errors (1) | prior to the | Adoption (2) | and amended | |||||||||||||||
retrospective | |||||||||||||||||||
adoption | |||||||||||||||||||
FINANCING ACTIVITIES: | |||||||||||||||||||
Policyholder deposit fund deposits | 354.5 | 93.3 | 447.8 | — | 447.8 | ||||||||||||||
Policyholder deposit fund withdrawals | -186 | -134.6 | -320.6 | — | -320.6 | ||||||||||||||
Net transfers to/from separate accounts | — | 114.7 | 114.7 | — | 114.7 | ||||||||||||||
Impact of financing activities of | — | 0.1 | 0.1 | — | 0.1 | ||||||||||||||
consolidated investment entities, net | |||||||||||||||||||
Other financing activities, net | — | — | — | — | — | ||||||||||||||
Discontinued operations, net | — | — | — | — | — | ||||||||||||||
Cash provided by financing activities | 168.5 | 73.5 | 242.0 | — | 242.0 | ||||||||||||||
Change in cash and cash equivalents | 15.3 | -6.6 | 8.7 | — | 8.7 | ||||||||||||||
Change in cash balances of | — | 0.1 | 0.1 | — | 0.1 | ||||||||||||||
discontinued operations assets | |||||||||||||||||||
Cash and cash equivalents, beginning of period | 194.3 | -26.1 | 168.2 | — | 168.2 | ||||||||||||||
Cash and cash equivalents, end of period | $ | 209.6 | $ | -32.6 | $ | 177.0 | $ | — | $ | 177.0 | |||||||||
Supplemental Disclosure of Cash Flow Information | |||||||||||||||||||
Income taxes paid | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||
Interest expense on indebtedness paid | $ | -4.7 | $ | — | $ | -4.7 | $ | — | $ | -4.7 | |||||||||
Non-Cash Transactions During the Year | |||||||||||||||||||
Investment exchanges | $ | — | $ | 22.4 | $ | 22.4 | $ | — | $ | 22.4 | |||||||||
——————— | |||||||||||||||||||
-1 | Adjustments related to the correction of errors reflect amounts prior to the retrospective adoption of amended guidance to ASC 944, Financial Services – Insurance (ASU 2010-26). See footnote 2 below for additional information regarding these amounts and the retrospective adoption. | ||||||||||||||||||
-2 | Adjustments related to the retrospective adoption of amended guidance to ASC 944, Financial Services – Insurance (ASU 2010-26), have been updated from those originally disclosed in the First Quarter 2012 Quarterly Report on Form 10-Q filing to reflect the correction of errors identified related to the adoption of the amended guidance as well as indirect impact of the correction of errors associated with the restatement. | ||||||||||||||||||
Consolidated Statement of Comprehensive Income | |||||||||||||||||||
($ in millions, except share data) | Three months ended December 31, 2011 | ||||||||||||||||||
As previously | Correction | Adjusted | Retrospective | As restated | |||||||||||||||
reported | of errors (1) | prior to the | Adoption (2) | and amended | |||||||||||||||
retrospective | |||||||||||||||||||
adoption | |||||||||||||||||||
REVENUES: | |||||||||||||||||||
Premiums | $ | 121.4 | $ | 3.7 | $ | 125.1 | $ | — | $ | 125.1 | |||||||||
Fee income | 141.1 | -0.1 | 141.0 | — | 141.0 | ||||||||||||||
Net investment income | 197.3 | -2.5 | 194.8 | — | 194.8 | ||||||||||||||
Net realized investment gains (losses): | |||||||||||||||||||
Total OTTI losses | -19.6 | -1.1 | -20.7 | — | -20.7 | ||||||||||||||
Portion of OTTI losses recognized in OCI | 11.0 | 1.4 | 12.4 | — | 12.4 | ||||||||||||||
Net OTTI losses recognized in earnings | -8.6 | 0.3 | -8.3 | — | -8.3 | ||||||||||||||
Net realized investment losses, | -0.8 | -5 | -5.8 | — | -5.8 | ||||||||||||||
excluding OTTI losses | |||||||||||||||||||
Net realized investment losses | -9.4 | -4.7 | -14.1 | — | -14.1 | ||||||||||||||
Gain on debt repurchase | — | 0.2 | 0.2 | — | 0.2 | ||||||||||||||
Total revenues | 450.4 | -3.4 | 447.0 | — | 447.0 | ||||||||||||||
BENEFITS AND EXPENSES: | |||||||||||||||||||
Policy benefits, excluding policyholder dividends | 283.2 | 3.6 | 286.8 | 1.6 | 288.4 | ||||||||||||||
Policyholder dividends | 58.1 | 2.1 | 60.2 | — | 60.2 | ||||||||||||||
Policy acquisition cost amortization | 38.6 | 0.4 | 39.0 | -8.1 | 30.9 | ||||||||||||||
Interest expense on indebtedness | 8.1 | — | 8.1 | — | 8.1 | ||||||||||||||
Other operating expenses | 69.8 | -9.2 | 60.6 | 0.2 | 60.8 | ||||||||||||||
Total benefits and expenses | 457.8 | -3.1 | 454.7 | -6.3 | 448.4 | ||||||||||||||
Income (loss) from continuing operations | -7.4 | -0.3 | -7.7 | 6.3 | -1.4 | ||||||||||||||
before income taxes | |||||||||||||||||||
Income tax expense (benefit) | -0.5 | 1.7 | 1.2 | 1.6 | 2.8 | ||||||||||||||
Income (loss) from continuing operations | -6.9 | -2 | -8.9 | 4.7 | -4.2 | ||||||||||||||
Loss from discontinued operations, | -15.1 | -0.4 | -15.5 | — | -15.5 | ||||||||||||||
net of income taxes | |||||||||||||||||||
Net income (loss) | -22 | -2.4 | -24.4 | 4.7 | -19.7 | ||||||||||||||
Less: Net income (loss) attributable to | — | -0.1 | -0.1 | — | -0.1 | ||||||||||||||
noncontrolling interests | |||||||||||||||||||
Net income (loss) attributable to | $ | -22 | $ | -2.3 | $ | -24.3 | $ | 4.7 | $ | -19.6 | |||||||||
The Phoenix Companies, Inc. | |||||||||||||||||||
(Continued on next page) | Consolidated Statement of Comprehensive Income | ||||||||||||||||||
($ in millions, except share data) | Three months ended December 31, 2011 | ||||||||||||||||||
As previously | Correction | Adjusted | Retrospective | As restated | |||||||||||||||
reported | of errors (1) | prior to the | Adoption (2) | and amended | |||||||||||||||
retrospective | |||||||||||||||||||
adoption | |||||||||||||||||||
COMPREHENSIVE INCOME (LOSS): | |||||||||||||||||||
Net income (loss) attributable to | $ | -22 | $ | -2.3 | $ | -24.3 | $ | 4.7 | $ | -19.6 | |||||||||
The Phoenix Companies, Inc. | |||||||||||||||||||
Net income (loss) attributable to | — | -0.1 | -0.1 | — | -0.1 | ||||||||||||||
noncontrolling interests | |||||||||||||||||||
Net income (loss) | -22 | $ | -2.4 | $ | -24.4 | $ | 4.7 | $ | -19.7 | ||||||||||
Other comprehensive income (loss) | |||||||||||||||||||
before income taxes: | |||||||||||||||||||
Net unrealized investment gains | 57.6 | -61.1 | (3.5) | 1.9 | (1.6) | ||||||||||||||
before income taxes | |||||||||||||||||||
Non-credit portion of OTTI losses | -55.9 | 43.6 | -12.3 | — | -12.3 | ||||||||||||||
recognized in OCI before income taxes | |||||||||||||||||||
Net pension liability adjustment | -89.4 | -7.5 | -96.9 | — | -96.9 | ||||||||||||||
before income taxes | |||||||||||||||||||
Net unrealized other gains (losses) | — | — | — | — | — | ||||||||||||||
before income taxes | |||||||||||||||||||
Net unrealized derivative instruments | 0.4 | -0.4 | — | — | — | ||||||||||||||
gains (losses) before income taxes | |||||||||||||||||||
Other comprehensive income (loss) | -87.3 | -25.4 | -112.7 | 1.9 | -110.8 | ||||||||||||||
before income taxes | |||||||||||||||||||
Less: Income tax expense (benefit) related to: | |||||||||||||||||||
Net unrealized investment gains (losses) | 22.8 | -18 | 4.8 | -1.4 | 3.4 | ||||||||||||||
Non-credit portion of OTTI losses | -19.6 | 15.4 | -4.2 | — | -4.2 | ||||||||||||||
recognized in OCI | |||||||||||||||||||
Net pension liability adjustment | — | — | — | — | — | ||||||||||||||
Net unrealized other gains (losses) | — | — | — | — | — | ||||||||||||||
Net unrealized derivative instruments | — | — | — | — | — | ||||||||||||||
gains (losses) | |||||||||||||||||||
Total income tax expense (benefit) | 3.2 | -2.6 | 0.6 | -1.4 | -0.8 | ||||||||||||||
Other comprehensive income (loss), | -90.5 | -22.8 | -113.3 | 3.3 | -110 | ||||||||||||||
net of income taxes | |||||||||||||||||||
Comprehensive income (loss) | -112.5 | -25.2 | -137.7 | 8.0 | -129.7 | ||||||||||||||
Less: Comprehensive income (loss) attributable | — | -0.1 | -0.1 | — | -0.1 | ||||||||||||||
to noncontrolling interests, net of income taxes | |||||||||||||||||||
Comprehensive income (loss) attributable | $ | -112.5 | -10.2 | -137.6 | 8.0 | -129.6 | |||||||||||||
to The Phoenix Companies, Inc. | |||||||||||||||||||
LOSS PER SHARE:(3) | |||||||||||||||||||
Loss from continuing operations – basic | $ | -1.18 | $ | -0.34 | $ | 0.81 | $ | -0.72 | |||||||||||
Loss from continuing operations – diluted | $ | -1.18 | $ | -0.34 | $ | 0.81 | $ | -0.72 | |||||||||||
Loss from discontinued operations – basic | $ | -2.59 | $ | -0.07 | $ | — | $ | -2.67 | |||||||||||
Loss from discontinued operations – diluted | $ | -2.59 | $ | -0.07 | $ | — | $ | -2.67 | |||||||||||
Net loss attributable to | $ | -3.78 | $ | -0.4 | $ | 0.81 | $ | -3.37 | |||||||||||
The Phoenix Companies, Inc.– basic | |||||||||||||||||||
Net loss attributable to | $ | -3.78 | $ | -0.4 | $ | 0.81 | $ | -3.37 | |||||||||||
The Phoenix Companies, Inc.– diluted | |||||||||||||||||||
Basic weighted-average common shares | 5,827 | 5,816 | -4 | 5,816 | 5,816 | ||||||||||||||
outstanding (in thousands) | |||||||||||||||||||
Diluted weighted-average common shares | 5,827 | 5,816 | -4 | 5,816 | 5,816 | ||||||||||||||
outstanding (in thousands) | |||||||||||||||||||
——————— | |||||||||||||||||||
-1 | Adjustments related to the correction of errors reflect amounts prior to the retrospective adoption of amended guidance to ASC 944, Financial Services – Insurance (ASU 2010-26). See footnote 2 below for additional information regarding these amounts and the retrospective adoption. | ||||||||||||||||||
-2 | Adjustments related to the retrospective adoption of amended guidance to ASC 944, Financial Services – Insurance, have been updated from those originally disclosed in the First Quarter 2012 Quarterly Report on Form 10-Q filing to reflect the correction of errors identified related to the adoption of the amended guidance as well as indirect impact of the correction of errors associated with the restatement. | ||||||||||||||||||
-3 | All share amounts for all periods reflect the 1-for-20 reverse stock split, which was effective August 10, 2012. See Note 11 to these consolidated financial statements for additional information on the reverse stock split. | ||||||||||||||||||
-4 | Weighted-average common shares outstanding have been updated to reflect the impact of an error which had no material impact to EPS information, basic or diluted, for any period presented. | ||||||||||||||||||
Consolidated Statement of Comprehensive Income | |||||||||||||||||||
($ in millions, except share data) | Three months ended September 30, 2011 | ||||||||||||||||||
As previously | Correction | Adjusted | Retrospective | As restated | |||||||||||||||
reported | of errors (1) | prior to the | Adoption (2) | and amended | |||||||||||||||
retrospective | |||||||||||||||||||
adoption | |||||||||||||||||||
REVENUES: | |||||||||||||||||||
Premiums | $ | 117.4 | $ | -5.5 | $ | 111.9 | $ | — | $ | 111.9 | |||||||||
Fee income | 147.6 | -1.1 | 146.5 | — | 146.5 | ||||||||||||||
Net investment income | 201.0 | 2.5 | 203.5 | — | 203.5 | ||||||||||||||
Net realized investment gains (losses): | |||||||||||||||||||
Total OTTI losses | -31 | 0.1 | -30.9 | — | -30.9 | ||||||||||||||
Portion of OTTI losses recognized in OCI | 22.6 | -1.4 | 21.2 | — | 21.2 | ||||||||||||||
Net OTTI losses recognized in earnings | -8.4 | -1.3 | -9.7 | — | -9.7 | ||||||||||||||
Net realized investment gains (losses), | 14.5 | -14.9 | -0.4 | — | -0.4 | ||||||||||||||
excluding OTTI losses | |||||||||||||||||||
Net realized investment losses | 6.1 | -16.2 | -10.1 | — | -10.1 | ||||||||||||||
Gain on debt repurchase | — | — | — | — | — | ||||||||||||||
Total revenues | 472.1 | -20.3 | 451.8 | — | 451.8 | ||||||||||||||
BENEFITS AND EXPENSES: | |||||||||||||||||||
Policy benefits, excluding policyholder dividends | 268.2 | 25.1 | 293.3 | -0.2 | 293.1 | ||||||||||||||
Policyholder dividends | 51.5 | 2.0 | 53.5 | — | 53.5 | ||||||||||||||
Policy acquisition cost amortization | 57.5 | -14.9 | 42.6 | -7.5 | 35.1 | ||||||||||||||
Interest expense on indebtedness | 7.9 | — | 7.9 | — | 7.9 | ||||||||||||||
Other operating expenses | 57.2 | -0.2 | 57.0 | 0.4 | 57.4 | ||||||||||||||
Total benefits and expenses | 442.3 | 12.0 | 454.3 | -7.3 | 447.0 | ||||||||||||||
Income from continuing operations | 29.8 | -32.3 | -2.5 | 7.3 | 4.8 | ||||||||||||||
before income taxes | |||||||||||||||||||
Income tax expense (benefit) | -6.7 | -1.2 | -7.9 | 1.1 | -6.8 | ||||||||||||||
Income (loss) from continuing operations | 36.5 | -31.1 | 5.4 | 6.2 | 11.6 | ||||||||||||||
Income(loss) from discontinued operations, | -4.7 | 0.8 | -3.9 | — | -3.9 | ||||||||||||||
net of income taxes | |||||||||||||||||||
Net income (loss) | 31.8 | -30.3 | 1.5 | 6.2 | 7.7 | ||||||||||||||
Less: Net income (loss) attributable to | — | -0.3 | -0.3 | — | -0.3 | ||||||||||||||
noncontrolling interests | |||||||||||||||||||
Net income (loss) attributable to | $ | 31.8 | $ | -30 | $ | 1.8 | $ | 6.2 | $ | 8.0 | |||||||||
The Phoenix Companies, Inc. | |||||||||||||||||||
(Continued on next page) | Consolidated Statement of Comprehensive Income | ||||||||||||||||||
($ in millions, except share data) | Three months ended September 30, 2011 | ||||||||||||||||||
As previously | Correction | Adjusted | Retrospective | As restated | |||||||||||||||
reported | of errors (1) | prior to the | Adoption (2) | and amended | |||||||||||||||
retrospective | |||||||||||||||||||
adoption | |||||||||||||||||||
COMPREHENSIVE INCOME (LOSS): | |||||||||||||||||||
Net income (loss) attributable to | $ | 31.8 | $ | -30 | $ | 1.8 | $ | 6.2 | $ | 8.0 | |||||||||
The Phoenix Companies, Inc. | |||||||||||||||||||
Net income (loss) attributable to | — | -0.3 | -0.3 | — | -0.3 | ||||||||||||||
noncontrolling interests | |||||||||||||||||||
Net income (loss) | 31.8 | -30.3 | 1.5 | 6.2 | 7.7 | ||||||||||||||
Other comprehensive income (loss) | |||||||||||||||||||
before income taxes: | |||||||||||||||||||
Net unrealized investment gains | -13.3 | 17.7 | 4.4 | 1.6 | 6.0 | ||||||||||||||
before income taxes | |||||||||||||||||||
Non-credit portion of OTTI losses | 22.4 | -43.6 | -21.2 | — | -21.2 | ||||||||||||||
recognized in OCI before income taxes | |||||||||||||||||||
Net pension liability adjustment | 1.1 | -9.2 | -8.1 | — | -8.1 | ||||||||||||||
before income taxes | |||||||||||||||||||
Net unrealized other gains (losses) | — | — | — | — | — | ||||||||||||||
before income taxes | |||||||||||||||||||
Net unrealized derivative instruments | 1.1 | -1.1 | — | — | — | ||||||||||||||
gains (losses) before income taxes | |||||||||||||||||||
Other comprehensive income (loss) | 11.3 | -36.2 | -24.9 | 1.6 | -23.3 | ||||||||||||||
before income taxes | |||||||||||||||||||
Less: Income tax expense (benefit) related to: | |||||||||||||||||||
Net unrealized investment gains (losses) | -42.2 | 20.8 | -21.4 | -1.2 | -22.6 | ||||||||||||||
Non-credit portion of OTTI losses | 7.8 | -15.3 | -7.5 | — | -7.5 | ||||||||||||||
recognized in OCI | |||||||||||||||||||
Net pension liability adjustment | — | — | — | — | — | ||||||||||||||
Net unrealized other gains (losses) | — | — | — | — | — | ||||||||||||||
Net unrealized derivative instrument | — | — | — | — | — | ||||||||||||||
gains (losses) | |||||||||||||||||||
Total income tax expense (benefit) | -34.4 | 5.5 | -28.9 | -1.2 | -30.1 | ||||||||||||||
Other comprehensive income (loss) | 45.7 | -41.7 | 4.0 | 2.8 | 6.8 | ||||||||||||||
before income taxes | |||||||||||||||||||
Comprehensive income (loss) | 77.5 | -72 | 5.5 | 9.0 | 14.5 | ||||||||||||||
Less: Comprehensive income (loss) attributabl | — | -0.3 | -0.3 | — | -0.3 | ||||||||||||||
to noncontrolling interests, net of income taxes | |||||||||||||||||||
Comprehensive income (loss) attributable | $ | 77.5 | $ | -71.7 | $ | 5.8 | $ | 9.0 | $ | 14.8 | |||||||||
to The Phoenix Companies, Inc. | |||||||||||||||||||
EARNINGS (LOSS) PER SHARE: (3) | |||||||||||||||||||
Earnings from continuing operations – basic | $ | 6.25 | $ | -5.35 | $ | 1.07 | $ | 1.99 | |||||||||||
Earnings from continuing operations – diluted | $ | 6.23 | $ | -5.28 | $ | 1.05 | $ | 1.97 | |||||||||||
Loss from discontinued operations – basic | $ | -0.8 | $ | 0.14 | $ | — | $ | -0.67 | |||||||||||
Loss from discontinued operations – diluted | $ | -0.8 | $ | 0.14 | $ | — | $ | -0.66 | |||||||||||
Net loss attributable to | $ | 5.44 | $ | -5.16 | $ | 1.07 | $ | 1.38 | |||||||||||
The Phoenix Companies, Inc.– basic | |||||||||||||||||||
Net loss attributable to | $ | 5.43 | $ | -5.09 | $ | 1.05 | $ | 1.36 | |||||||||||
The Phoenix Companies, Inc.– diluted | |||||||||||||||||||
Basic weighted-average common share | 5,844 | 5,816 | -4 | 5,816 | 5,816 | ||||||||||||||
outstanding (in thousands) | |||||||||||||||||||
Diluted weighted-average common shares | 5,856 | 5,890 | -4 | 5,890 | 5,890 | ||||||||||||||
outstanding (in thousands) | |||||||||||||||||||
——————— | |||||||||||||||||||
-1 | Adjustments related to the correction of errors reflect amounts prior to the retrospective adoption of amended guidance to ASC 944, Financial Services – Insurance (ASU 2010-26). See footnote 2 below for additional information regarding these amounts and the retrospective adoption. | ||||||||||||||||||
-2 | Adjustments related to the retrospective adoption of amended guidance to ASC 944, Financial Services – Insurance (ASU 2010-26), have been updated from those originally disclosed in the First Quarter 2012 Quarterly Report on Form 10-Q filing to reflect the correction of errors identified related to the adoption of the amended guidance as well as indirect impact of the correction of errors associated with the restatement. | ||||||||||||||||||
-3 | All share amounts for all periods reflect the 1-for-20 reverse stock split, which was effective August 10, 2012. See Note 11 to these consolidated financial statements for additional information on the reverse stock split. | ||||||||||||||||||
-4 | Weighted-average common shares outstanding have been updated to reflect the impact of an error which had no material impact to EPS information, basic or diluted, for any period presented. | ||||||||||||||||||
Consolidated Statement of Comprehensive Income | |||||||||||||||||||
($ in millions, except share data) | Three months ended June 30, 2011 | ||||||||||||||||||
As previously | Correction | Adjusted | Retrospective | As restated | |||||||||||||||
reported | of errors (1) | prior to the | Adoption (2) | and amended | |||||||||||||||
retrospective | |||||||||||||||||||
adoption | |||||||||||||||||||
REVENUES: | |||||||||||||||||||
Premiums | $ | 109.3 | $ | -5.2 | $ | 104.1 | $ | — | $ | 104.1 | |||||||||
Fee income | 154.6 | — | 154.6 | — | 154.6 | ||||||||||||||
Net investment income | 210.8 | -0.2 | 210.6 | — | 210.6 | ||||||||||||||
Net realized investment gains (losses): | |||||||||||||||||||
Total OTTI losses | -6.6 | 0.8 | -5.8 | — | -5.8 | ||||||||||||||
Portion of OTTI losses recognized in OCI | 3.6 | -0.5 | 3.1 | — | 3.1 | ||||||||||||||
Net OTTI losses recognized in earnings | -3 | 0.3 | -2.7 | — | -2.7 | ||||||||||||||
Net realized investment gains (losses), | 6.1 | -1.8 | 4.3 | — | 4.3 | ||||||||||||||
excluding OTTI losses | |||||||||||||||||||
Net realized investment losses | 3.1 | -1.5 | 1.6 | — | 1.6 | ||||||||||||||
Gain on debt repurchase | — | — | — | — | — | ||||||||||||||
Total revenues | 477.8 | -6.9 | 470.9 | — | 470.9 | ||||||||||||||
BENEFITS AND EXPENSES: | |||||||||||||||||||
Policy benefits, excluding policyholder dividends | 271.1 | 17.2 | 288.3 | 0.9 | 289.2 | ||||||||||||||
Policyholder dividends | 73.6 | -5.2 | 68.4 | — | 68.4 | ||||||||||||||
Policy acquisition cost amortization | 51.8 | -2.3 | 49.5 | -9.4 | 40.1 | ||||||||||||||
Interest expense on indebtedness | 7.9 | — | 7.9 | — | 7.9 | ||||||||||||||
Other operating expenses | 58.9 | 4.8 | 63.7 | 0.3 | 64.0 | ||||||||||||||
Total benefits and expenses | 463.3 | 14.5 | 477.8 | -8.2 | 469.6 | ||||||||||||||
Income (loss) from continuing operations | 14.5 | -21.4 | -6.9 | 8.2 | 1.3 | ||||||||||||||
before income taxes | |||||||||||||||||||
Income tax expense (benefit) | 9.4 | -3.7 | 5.7 | 2.9 | 8.6 | ||||||||||||||
Income (loss) from continuing operations | 5.1 | -17.7 | -12.6 | 5.3 | -7.3 | ||||||||||||||
Loss from discontinued operations, | -0.7 | — | -0.7 | — | -0.7 | ||||||||||||||
net of income taxes | |||||||||||||||||||
Net income (loss) | 4.4 | -17.7 | -13.3 | 5.3 | -8 | ||||||||||||||
Less: Net income (loss) attributable to | — | — | — | — | — | ||||||||||||||
noncontrolling interests | |||||||||||||||||||
Net income (loss) attributable to | $ | 4.4 | $ | -17.7 | $ | -13.3 | $ | 5.3 | $ | -8 | |||||||||
The Phoenix Companies, Inc. | |||||||||||||||||||
(Continued on next page) | Consolidated Statement of Comprehensive Income | ||||||||||||||||||
($ in millions, except share data) | Three months ended June 30, 2011 | ||||||||||||||||||
As previously | Correction | Adjusted | Retrospective | As restated | |||||||||||||||
reported | of errors (1) | prior to the | Adoption (2) | and amended | |||||||||||||||
retrospective | |||||||||||||||||||
adoption | |||||||||||||||||||
COMPREHENSIVE INCOME (LOSS): | |||||||||||||||||||
Net income (loss) attributable to | $ | 4.4 | $ | -17.7 | $ | -13.3 | $ | 5.3 | $ | -8 | |||||||||
The Phoenix Companies, Inc. | |||||||||||||||||||
Net income (loss) attributable to | — | — | — | — | — | ||||||||||||||
noncontrolling interests | |||||||||||||||||||
Net income (loss) | 4.4 | -17.7 | -13.3 | 5.3 | -8 | ||||||||||||||
Other comprehensive income (loss) | |||||||||||||||||||
before income taxes: | |||||||||||||||||||
Net unrealized investment gains | 16.3 | 3.8 | 20.1 | 2.1 | 22.2 | ||||||||||||||
before income taxes | |||||||||||||||||||
Non-credit portion of OTTI losses | -2.1 | -1 | -3.1 | — | -3.1 | ||||||||||||||
recognized in OCI before income taxes | |||||||||||||||||||
Net pension liability adjustment | 3.0 | 0.9 | 3.9 | — | 3.9 | ||||||||||||||
before income taxes | |||||||||||||||||||
Net unrealized other gains (losses) | — | — | — | — | — | ||||||||||||||
before income taxes | |||||||||||||||||||
Net unrealized derivative instrument | -0.4 | 0.4 | — | — | — | ||||||||||||||
gains (losses) before income taxes | |||||||||||||||||||
Other comprehensive income (loss) | 16.8 | 4.1 | 20.9 | 2.1 | 23.0 | ||||||||||||||
before income taxes | |||||||||||||||||||
Less: Income tax expense (benefit) related to: | |||||||||||||||||||
Net unrealized investment gains (losses) | 6.0 | -0.1 | 5.9 | -2.9 | 3.0 | ||||||||||||||
Non-credit portion of OTTI losses | -0.7 | -0.4 | -1.1 | — | -1.1 | ||||||||||||||
recognized in OCI | |||||||||||||||||||
Net pension liability adjustment | — | — | — | — | — | ||||||||||||||
Net unrealized other gains (losses) | — | — | — | — | — | ||||||||||||||
Net unrealized derivative instrument | — | — | — | — | — | ||||||||||||||
gains (losses) | |||||||||||||||||||
Total income tax expense (benefit) | 5.3 | -0.5 | 4.8 | -2.9 | 1.9 | ||||||||||||||
Other comprehensive income (loss) | 11.5 | 4.6 | 16.1 | 5.0 | 21.1 | ||||||||||||||
net of income taxes | |||||||||||||||||||
Comprehensive income (loss) | 15.9 | $ | -13.1 | $ | 2.8 | $ | 10.3 | $ | 13.1 | ||||||||||
Less: Comprehensive income (loss) attributable | — | — | — | — | — | ||||||||||||||
to noncontrolling interests, net of income taxes | |||||||||||||||||||
Comprehensive income (loss) attributable | $ | 15.9 | $ | -13.1 | $ | 2.8 | $ | 10.3 | $ | 13.1 | |||||||||
to The Phoenix Companies, Inc. | |||||||||||||||||||
EARNINGS (LOSS) PER SHARE: (3) | |||||||||||||||||||
Earnings (loss) from continuing operations – basic | $ | 0.87 | $ | -3.04 | $ | 0.91 | $ | -1.26 | |||||||||||
Earnings (loss) from continuing operations – diluted | $ | 0.87 | $ | -3.04 | $ | 0.91 | $ | -1.26 | |||||||||||
Loss from discontinued operations – basic | $ | -0.12 | $ | — | $ | — | $ | -0.12 | |||||||||||
Loss from discontinued operations – diluted | $ | -0.12 | $ | — | $ | — | $ | -0.12 | |||||||||||
Net loss attributable to | $ | 0.75 | $ | -3.04 | $ | 0.91 | $ | -1.38 | |||||||||||
The Phoenix Companies, Inc.– basic | |||||||||||||||||||
Net loss attributable to | $ | 0.75 | $ | -3.04 | $ | 0.91 | $ | -1.38 | |||||||||||
The Phoenix Companies, Inc.– diluted | |||||||||||||||||||
Basic weighted-average common share | 5,841 | 5,816 | -4 | 5,816 | 5,816 | ||||||||||||||
outstanding (in thousands) | |||||||||||||||||||
Diluted weighted-average common shares | 5,853 | 5,816 | -4 | 5,816 | 5,816 | ||||||||||||||
outstanding (in thousands) | |||||||||||||||||||
——————— | |||||||||||||||||||
-1 | Adjustments related to the correction of errors reflect amounts prior to the retrospective adoption of amended guidance to ASC 944, Financial Services – Insurance (ASU 2010-26). See footnote 2 below for additional information regarding these amounts and the retrospective adoption. | ||||||||||||||||||
-2 | Adjustments related to the retrospective adoption of amended guidance to ASC 944, Financial Services – Insurance (ASU 2010-26), have been updated from those originally disclosed in the First Quarter 2012 Quarterly Report on Form 10-Q filing to reflect the correction of errors identified related to the adoption of the amended guidance as well as indirect impact of the correction of errors associated with the restatement. | ||||||||||||||||||
-3 | All share amounts for all periods reflect the 1-for-20 reverse stock split, which was effective August 10, 2012. See Note 11 to these consolidated financial statements for additional information on the reverse stock split. | ||||||||||||||||||
-4 | Weighted-average common shares outstanding have been updated to reflect the impact of an error which had no material impact to EPS information, basic or diluted, for any period presented. | ||||||||||||||||||
Consolidated Statement of Comprehensive Income | |||||||||||||||||||
($ in millions, except share data) | Three months ended March 31, 2011 | ||||||||||||||||||
As previously | Correction | Adjusted | Retrospective | As restated | |||||||||||||||
reported | of errors (1) | prior to the | Adoption (2) | and amended | |||||||||||||||
retrospective | |||||||||||||||||||
adoption | |||||||||||||||||||
REVENUES: | |||||||||||||||||||
Premiums | $ | 111.0 | $ | -3.4 | $ | 107.6 | $ | — | $ | 107.6 | |||||||||
Fee income | 153.8 | 0.9 | 154.7 | — | 154.7 | ||||||||||||||
Net investment income | 200.8 | 13.2 | 214.0 | — | 214.0 | ||||||||||||||
Net realized investment gains (losses): | |||||||||||||||||||
Total OTTI losses | -7.4 | -0.5 | -7.9 | — | -7.9 | ||||||||||||||
Portion of OTTI losses recognized in OCI | 1.7 | 0.1 | 1.8 | — | 1.8 | ||||||||||||||
Net OTTI losses recognized in earnings | -5.7 | -0.4 | -6.1 | — | -6.1 | ||||||||||||||
Net realized investment gains (losses), | -10.5 | 7.1 | -3.4 | — | -3.4 | ||||||||||||||
excluding OTTI losses | |||||||||||||||||||
Net realized investment gains (losses) | -16.2 | 6.7 | -9.5 | — | -9.5 | ||||||||||||||
Gain on debt repurchase | — | — | — | — | — | ||||||||||||||
Total revenues | 449.4 | 17.4 | 466.8 | — | 466.8 | ||||||||||||||
BENEFITS AND EXPENSES: | |||||||||||||||||||
Policy benefits, excluding policyholder dividends | 260.7 | 3.1 | 263.8 | 2.5 | 266.3 | ||||||||||||||
Policyholder dividends | 63.7 | 13.4 | 77.1 | — | 77.1 | ||||||||||||||
Policy acquisition cost amortization | 62.7 | 1.6 | 64.3 | -12.5 | 51.8 | ||||||||||||||
Interest expense on indebtedness | 7.9 | — | 7.9 | — | 7.9 | ||||||||||||||
Other operating expenses | 59.3 | 6.0 | 65.3 | 0.4 | 65.7 | ||||||||||||||
Total benefits and expenses | 454.3 | 24.1 | 478.4 | -9.6 | 468.8 | ||||||||||||||
Income (loss) from continuing operations | -4.9 | -6.7 | -11.6 | 9.6 | -2 | ||||||||||||||
before income taxes | |||||||||||||||||||
Income tax expense (benefit) | -0.3 | 4.6 | 4.3 | 3.4 | 7.7 | ||||||||||||||
Income (loss) from continuing operations | -4.6 | -11.3 | -15.9 | 6.2 | -9.7 | ||||||||||||||
Loss from discontinued operations, | -1.5 | — | -1.5 | — | -1.5 | ||||||||||||||
net of income taxes | |||||||||||||||||||
Net income (loss) | -6.1 | -11.3 | -17.4 | 6.2 | -11.2 | ||||||||||||||
Less: Net income (loss) attributable to | — | -0.1 | -0.1 | — | -0.1 | ||||||||||||||
noncontrolling interests | |||||||||||||||||||
Net income (loss) attributable to | $ | -6.1 | $ | -11.2 | $ | -17.3 | $ | 6.2 | $ | -11.1 | |||||||||
The Phoenix Companies, Inc. | |||||||||||||||||||
(Continued on next page) | Consolidated Statement of Comprehensive Income | ||||||||||||||||||
($ in millions, except share data) | Three months ended March 31, 2011 | ||||||||||||||||||
As previously | Correction | Adjusted | Retrospective | As restated | |||||||||||||||
reported | of errors (1) | prior to the | Adoption (2) | and amended | |||||||||||||||
retrospective | |||||||||||||||||||
adoption | |||||||||||||||||||
COMPREHENSIVE INCOME (LOSS): | |||||||||||||||||||
Net income (loss) attributable to | $ | -6.1 | $ | -11.2 | $ | -17.3 | $ | 6.2 | $ | -11.1 | |||||||||
The Phoenix Companies, Inc. | |||||||||||||||||||
Net income (loss) attributable to | — | -0.1 | -0.1 | — | -0.1 | ||||||||||||||
noncontrolling interests | |||||||||||||||||||
Net income (loss) | -6.1 | -11.3 | -17.4 | 6.2 | -11.2 | ||||||||||||||
Other comprehensive income (loss) | |||||||||||||||||||
before income taxes: | |||||||||||||||||||
Net unrealized investment gains | 16.9 | 14.5 | 31.4 | 0.7 | 32.1 | ||||||||||||||
before income taxes | |||||||||||||||||||
Non-credit portion of OTTI losses | 3.1 | -0.3 | 2.8 | — | 2.8 | ||||||||||||||
recognized in OCI before income taxes | |||||||||||||||||||
Net pension liability adjustment | 1.1 | 0.9 | 2.0 | — | 2.0 | ||||||||||||||
before income taxes | |||||||||||||||||||
Net unrealized other gains (losses) | — | — | — | — | — | ||||||||||||||
before income taxes | |||||||||||||||||||
Net unrealized derivative instruments | -0.8 | 0.8 | — | — | — | ||||||||||||||
gains (losses) before income taxes | |||||||||||||||||||
Other comprehensive income (loss) | 20.3 | 15.9 | 36.2 | 0.7 | 36.9 | ||||||||||||||
before income taxes | |||||||||||||||||||
Less: Income tax expense (benefit) related to: | |||||||||||||||||||
Net unrealized investment gains (losses) | 22.8 | 8.9 | 31.7 | -3.4 | 28.3 | ||||||||||||||
Non-credit portion of OTTI losses | 1.1 | -0.1 | 1.0 | — | 1.0 | ||||||||||||||
recognized in OCI | |||||||||||||||||||
Net pension liability adjustment | — | — | — | — | — | ||||||||||||||
Net unrealized other gains (losses) | — | — | — | — | — | ||||||||||||||
Net unrealized derivative instrument | — | — | — | — | — | ||||||||||||||
gains (losses) | |||||||||||||||||||
Total income tax expense (benefit) | 23.9 | 8.8 | 32.7 | -3.4 | 29.3 | ||||||||||||||
Other comprehensive income (loss) | -3.6 | 7.1 | 5.5 | 4.1 | 7.6 | ||||||||||||||
Comprehensive income (loss) | -9.7 | (4.2) | (13.9) | 10.3 | -3.6 | ||||||||||||||
Less: Comprehensive income (loss) attributable | — | -0.1 | -0.1 | — | -0.1 | ||||||||||||||
to noncontrolling interests, net of income taxes | |||||||||||||||||||
Comprehensive income (loss) attributable | $ | -9.7 | $ | (4.1) | (13.8) | 10.3 | (3.5) | ||||||||||||
to The Phoenix Companies, Inc. | |||||||||||||||||||
LOSS PER SHARE:(3) | |||||||||||||||||||
Loss from continuing operations – basic | $ | -0.79 | $ | -1.94 | $ | 1.07 | $ | -1.67 | |||||||||||
Loss from continuing operations – diluted | $ | -0.79 | $ | -1.94 | $ | 1.07 | $ | -1.67 | |||||||||||
Loss from discontinued operations – basic | $ | -0.26 | $ | — | $ | — | $ | -0.26 | |||||||||||
Loss from discontinued operations –diluted | $ | -0.26 | $ | — | $ | — | $ | -0.26 | |||||||||||
Net loss attributable to | $ | -1.05 | $ | -1.93 | $ | 1.07 | $ | -1.91 | |||||||||||
The Phoenix Companies, Inc.– basic | |||||||||||||||||||
Net loss attributable to | $ | -1.05 | $ | -1.93 | $ | 1.07 | $ | -1.91 | |||||||||||
The Phoenix Companies, Inc.– diluted | |||||||||||||||||||
Basic weighted-average common shares | 5,810 | 5,811 | -4 | 5,811 | 5,811 | ||||||||||||||
outstanding (in thousands) | |||||||||||||||||||
Diluted weighted-average common shares | 5,810 | 5,811 | -4 | 5,811 | 5,811 | ||||||||||||||
outstanding (in thousands) | |||||||||||||||||||
——————— | |||||||||||||||||||
-1 | Adjustments related to the correction of errors reflect amounts prior to the retrospective adoption of amended guidance to ASC 944, Financial Services – Insurance (ASU 2010-26). See footnote 2 below for additional information regarding these amounts and the retrospective adoption. | ||||||||||||||||||
-2 | Adjustments related to the retrospective adoption of amended guidance to ASC 944, Financial Services – Insurance (ASU 2010-26), have been updated from those originally disclosed in the First Quarter 2012 Quarterly Report on Form 10-Q filing to reflect the correction of errors identified related to the adoption of the amended guidance as well as indirect impact of the correction of errors associated with the restatement. | ||||||||||||||||||
-3 | All share amounts for all periods reflect the 1-for-20 reverse stock split, which was effective August 10, 2012. See Note 11 to these consolidated financial statements for additional information on the reverse stock split. | ||||||||||||||||||
-4 | Weighted-average common shares outstanding have been updated to reflect the impact of an error which had no material impact to EPS information, basic or diluted, for any period presented. | ||||||||||||||||||
27. Supplemental Unaudited Quarterly Financial Information (Part 3) | ' | ||||||||||||||||||
Consolidated Statement of Comprehensive Income | |||||||||||||||||||
($ in millions, except share data) | Nine months ended September 30, 2011 | ||||||||||||||||||
As previously | Correction | Adjusted | Retrospective | As restated | |||||||||||||||
reported | of errors (1) | prior to the | Adoption (2) | and amended | |||||||||||||||
Retrospective | |||||||||||||||||||
adoption | |||||||||||||||||||
REVENUES: | |||||||||||||||||||
Premiums | $ | 337.7 | $ | -14.1 | $ | 323.6 | $ | — | $ | 323.6 | |||||||||
Fee income | 456.0 | -0.2 | 455.8 | — | 455.8 | ||||||||||||||
Net investment income | 612.6 | 15.5 | 628.1 | — | 628.1 | ||||||||||||||
Net realized investment gains (losses): | |||||||||||||||||||
Total OTTI losses | -45 | 0.4 | -44.6 | — | -44.6 | ||||||||||||||
Portion of OTTI losses recognized in OCI | 27.9 | -1.8 | 26.1 | — | 26.1 | ||||||||||||||
Net OTTI losses recognized in earnings | -17.1 | -1.4 | -18.5 | — | -18.5 | ||||||||||||||
Net realized investment gains (losses), | 10.1 | -9.6 | 0.5 | — | 0.5 | ||||||||||||||
excluding OTTI losses | |||||||||||||||||||
Net realized investment losses | -7 | -11 | -18 | — | -18 | ||||||||||||||
Gain on debt repurchase | — | — | — | — | — | ||||||||||||||
Total revenues | 1,399.3 | -9.8 | 1,389.5 | — | 1,389.5 | ||||||||||||||
BENEFITS AND EXPENSES: | |||||||||||||||||||
Policy benefits, excluding policyholder dividends | 800.0 | 45.4 | 845.4 | 3.2 | 848.6 | ||||||||||||||
Policyholder dividends | 188.8 | 10.2 | 199.0 | — | 199.0 | ||||||||||||||
Policy acquisition cost amortization | 172.0 | -15.6 | 156.4 | -29.4 | 127.0 | ||||||||||||||
Interest expense on indebtedness | 23.7 | — | 23.7 | — | 23.7 | ||||||||||||||
Other operating expenses | 175.4 | 10.6 | 186.0 | 1.1 | 187.1 | ||||||||||||||
Total benefits and expenses | 1,359.9 | 50.6 | 1,410.5 | -25.1 | 1,385.4 | ||||||||||||||
Income (loss) from continuing operations | 39.4 | -60.4 | -21 | 25.1 | 4.1 | ||||||||||||||
before income taxes | |||||||||||||||||||
Income tax expense (benefit) | 2.4 | -0.3 | 2.1 | 7.4 | 9.5 | ||||||||||||||
Income (loss) from continuing operations | 37.0 | -60.1 | -23.1 | 17.7 | -5.4 | ||||||||||||||
Loss from discontinued operations, | -6.9 | 0.8 | -6.1 | — | -6.1 | ||||||||||||||
net of income taxes | |||||||||||||||||||
Net income (loss) | 30.1 | -59.3 | -29.2 | 17.7 | -11.5 | ||||||||||||||
Less: Net income (loss) attributable to | — | -0.4 | -0.4 | — | -0.4 | ||||||||||||||
noncontrolling interests | |||||||||||||||||||
Net income (loss) attributable to | $ | 30.1 | $ | -58.9 | $ | -28.8 | $ | 17.7 | $ | -11.1 | |||||||||
The Phoenix Companies, Inc. | |||||||||||||||||||
(Continued on next page) | Consolidated Statement of Comprehensive Income | ||||||||||||||||||
($ in millions, except share data) | Nine months ended September 30, 2011 | ||||||||||||||||||
As previously | Correction | Adjusted | Retrospective | As restated | |||||||||||||||
reported | of errors (1) | prior to the | Adoption (2) | and amended | |||||||||||||||
retrospective | |||||||||||||||||||
adoption | |||||||||||||||||||
COMPREHENSIVE INCOME (LOSS): | |||||||||||||||||||
Net income (loss) attributable to | $ | 30.1 | $ | -58.9 | $ | -28.8 | $ | 17.7 | $ | -11.1 | |||||||||
The Phoenix Companies, Inc. | |||||||||||||||||||
Net income (loss) attributable to | — | -0.4 | -0.4 | — | -0.4 | ||||||||||||||
noncontrolling interests | |||||||||||||||||||
Net income (loss) | 30.1 | $ | -59.3 | $ | -29.2 | $ | 17.7 | $ | -11.5 | ||||||||||
Other comprehensive income (loss) | |||||||||||||||||||
before income taxes: | |||||||||||||||||||
Net unrealized investment gains | 19.9 | 36.0 | 55.9 | 4.4 | 60.3 | ||||||||||||||
before income taxes | |||||||||||||||||||
Non-credit portion of OTTI losses | 23.4 | -44.9 | -21.5 | — | -21.5 | ||||||||||||||
recognized in OCI before income taxes | |||||||||||||||||||
Net pension liability adjustment | 5.2 | -7.4 | -2.2 | — | -2.2 | ||||||||||||||
before income taxes | |||||||||||||||||||
Net unrealized other gains (losses) | — | — | — | — | — | ||||||||||||||
before income taxes | |||||||||||||||||||
Net unrealized derivative instrument | -0.1 | 0.1 | — | — | — | ||||||||||||||
gains (losses) before income taxes | |||||||||||||||||||
Other comprehensive income (loss) | 48.4 | -16.2 | 32.2 | 4.4 | 36.6 | ||||||||||||||
before income taxes | |||||||||||||||||||
Less: Income tax expense (benefit) related to: | |||||||||||||||||||
Net unrealized investment gains (losses) | -13.4 | 29.6 | 16.2 | -7.5 | 8.7 | ||||||||||||||
Non-credit portion of OTTI losses | 8.2 | -15.8 | -7.6 | — | -7.6 | ||||||||||||||
recognized in OCI | |||||||||||||||||||
Net pension liability adjustment | — | — | — | — | — | ||||||||||||||
Net unrealized other gains (losses) | — | — | — | — | — | ||||||||||||||
Net unrealized derivative instrument | — | — | — | — | |||||||||||||||
gains (losses) | |||||||||||||||||||
Total income tax expense (benefit) | -5.2 | 13.8 | 8.6 | -7.5 | 1.1 | ||||||||||||||
Other comprehensive income (loss) | 53.6 | -30 | 23.6 | 11.9 | 35.5 | ||||||||||||||
net of income taxes | |||||||||||||||||||
Comprehensive income (loss) | 83.7 | $ | -89.3 | $ | -5.6 | $ | 29.6 | $ | |||||||||||
24 | |||||||||||||||||||
Less: Comprehensive income (loss) attributable | — | -0.4 | -0.4 | — | -0.4 | ||||||||||||||
to noncontrolling interests, net of income taxes | |||||||||||||||||||
Comprehensive income (loss) attributable | $ | 83.7 | $ | -88.9 | $ | -5.2 | $ | 29.6 | $ | 24.4 | |||||||||
to The Phoenix Companies, Inc. | |||||||||||||||||||
EARNINGS (LOSS) PER SHARE: (3) | |||||||||||||||||||
Earnings (loss) from continuing operations – basic | $ | 6.34 | $ | -10.34 | $ | 3.04 | $ | -0.93 | |||||||||||
Earnings (loss) from continuing operations – diluted | $ | 6.33 | $ | -10.34 | $ | 3.04 | $ | -0.93 | |||||||||||
Loss from discontinued operations – basic | $ | -1.18 | $ | 0.14 | $ | — | $ | -1.05 | |||||||||||
Loss from discontinued operations – diluted | $ | -1.18 | $ | 0.14 | $ | — | $ | -1.05 | |||||||||||
Net loss attributable to | $ | 5.15 | $ | -10.13 | $ | 3.04 | $ | -1.91 | |||||||||||
The Phoenix Companies, Inc.– basic | |||||||||||||||||||
Net loss attributable to | $ | 5.15 | $ | -10.13 | $ | 3.04 | $ | -1.91 | |||||||||||
The Phoenix Companies, Inc.– diluted | |||||||||||||||||||
Basic weighted-average common shares | 5,840 | 5,814 | -4 | 5,814 | 5,814 | ||||||||||||||
outstanding (in thousands) | |||||||||||||||||||
Diluted weighted-average common shares | 5,849 | 5,814 | -4 | 5,814 | 5,814 | ||||||||||||||
outstanding (in thousands) | |||||||||||||||||||
——————— | |||||||||||||||||||
-1 | Adjustments related to the correction of errors reflect amounts prior to the retrospective adoption of amended guidance to ASC 944, Financial Services – Insurance (ASU 2010-26). See footnote 2 below for additional information regarding these amounts and the retrospective adoption. | ||||||||||||||||||
-2 | Adjustments related to the retrospective adoption of amended guidance to ASC 944, Financial Services – Insurance (ASU 2010-26), have been updated from those originally disclosed in the First Quarter 2012 Quarterly Report on Form 10-Q filing to reflect the correction of errors identified related to the adoption of the amended guidance as well as indirect impact of the correction of errors associated with the restatement. | ||||||||||||||||||
-3 | All share amounts for all periods reflect the 1-for-20 reverse stock split, which was effective August 10, 2012. See Note 11 to these consolidated financial statements for additional information on the reverse stock split. | ||||||||||||||||||
-4 | Weighted-average common shares outstanding have been updated to reflect the impact of an error which had no material impact to EPS information, basic or diluted, for any period presented. | ||||||||||||||||||
Consolidated Statement of Comprehensive Income | |||||||||||||||||||
($ in millions, except share data) | Six months ended June 30, 2011 | ||||||||||||||||||
As previously | Correction | Adjusted | Retrospective | As restated | |||||||||||||||
reported | of errors (1) | prior to the | Adoption (2) | and amended | |||||||||||||||
retrospective | |||||||||||||||||||
adoption | |||||||||||||||||||
REVENUES: | |||||||||||||||||||
Premiums | $ | 220.3 | $ | -8.6 | $ | 211.7 | $ | — | $ | 211.7 | |||||||||
Fee income | 308.4 | 0.9 | 309.3 | — | 309.3 | ||||||||||||||
Net investment income | 411.6 | 13.0 | 424.6 | — | 424.6 | ||||||||||||||
Net realized investment gains (losses): | |||||||||||||||||||
Total OTTI losses | -14 | 0.3 | -13.7 | — | -13.7 | ||||||||||||||
Portion of OTTI losses recognized in OCI | 5.3 | -0.4 | 4.9 | — | 4.9 | ||||||||||||||
Net OTTI losses recognized in earnings | -8.7 | -0.1 | -8.8 | — | -8.8 | ||||||||||||||
Net realized investment gains (losses), | -4.4 | 5.3 | 0.9 | — | 0.9 | ||||||||||||||
excluding OTTI losses | |||||||||||||||||||
Net realized investment gains (losses) | -13.1 | 5.2 | -7.9 | — | -7.9 | ||||||||||||||
Gain on debt repurchase | — | — | — | — | — | ||||||||||||||
Total revenues | 927.2 | 10.5 | 937.7 | — | 937.7 | ||||||||||||||
BENEFITS AND EXPENSES: | |||||||||||||||||||
Policy benefits, excluding policyholder dividends | 531.8 | 20.3 | 552.1 | 3.4 | 555.5 | ||||||||||||||
Policyholder dividends | 137.3 | 8.2 | 145.5 | — | 145.5 | ||||||||||||||
Policy acquisition cost amortization | 114.5 | -0.7 | 113.8 | -21.9 | 91.9 | ||||||||||||||
Interest expense on indebtedness | 15.8 | — | 15.8 | — | 15.8 | ||||||||||||||
Other operating expenses | 118.2 | 10.8 | 129.0 | 0.7 | 129.7 | ||||||||||||||
Total benefits and expenses | 917.6 | 38.6 | 956.2 | -17.8 | 938.4 | ||||||||||||||
Income (loss) from continuing operations | 9.6 | -28.1 | -18.5 | 17.8 | -0.7 | ||||||||||||||
before income taxes | |||||||||||||||||||
Income tax expense (benefit) | 9.1 | 0.9 | 10.0 | 6.3 | 16.3 | ||||||||||||||
Income (loss) from continuing operations | 0.5 | -29 | -28.5 | 11.5 | -17 | ||||||||||||||
Loss from discontinued operations, | -2.2 | — | -2.2 | — | -2.2 | ||||||||||||||
net of income taxes | |||||||||||||||||||
Net income (loss) | -1.7 | -29 | -30.7 | 11.5 | -19.2 | ||||||||||||||
Less: Net income (loss) attributable to | — | -0.1 | -0.1 | — | -0.1 | ||||||||||||||
noncontrolling interests | |||||||||||||||||||
Net income (loss) attributable to | $ | -1.7 | $ | -28.9 | $ | -30.6 | $ | 11.5 | $ | -19.1 | |||||||||
The Phoenix Companies, Inc. | |||||||||||||||||||
(Continued on next page) | Consolidated Statement of Comprehensive Income | ||||||||||||||||||
($ in millions, except share data) | Six months ended June 30, 2011 | ||||||||||||||||||
As previously | Correction | Adjusted | Retrospective | As restated | |||||||||||||||
reported | of errors (1) | prior to the | Adoption (2) | and amended | |||||||||||||||
Retrospective | |||||||||||||||||||
adoption | |||||||||||||||||||
COMPREHENSIVE INCOME (LOSS): | |||||||||||||||||||
Net income (loss) attributable to | $ | -1.7 | $ | -28.9 | $ | -30.6 | $ | 11.5 | $ | -19.1 | |||||||||
The Phoenix Companies, Inc. | |||||||||||||||||||
Net income (loss) attributable to | — | -0.1 | -0.1 | — | -0.1 | ||||||||||||||
noncontrolling interests | |||||||||||||||||||
Net income (loss) | -1.7 | $ | -29 | $ | -30.7 | $ | 11.5 | $ | -19.2 | ||||||||||
Other comprehensive income (loss) | |||||||||||||||||||
before income taxes: | |||||||||||||||||||
Net unrealized investment gains | 33.2 | 18.3 | 51.5 | 2.8 | 54.3 | ||||||||||||||
before income taxes | |||||||||||||||||||
Non-credit portion of OTTI losses | 1.0 | -1.3 | -0.3 | — | -0.3 | ||||||||||||||
recognized in OCI before income taxes | |||||||||||||||||||
Net pension liability adjustment | 4.1 | 1.8 | 5.9 | — | 5.9 | ||||||||||||||
before income taxes | |||||||||||||||||||
Net unrealized other gains (losses) | — | — | — | — | — | ||||||||||||||
before income taxes | |||||||||||||||||||
Net unrealized derivative instruments | -1.2 | 1.2 | — | — | — | ||||||||||||||
gains (losses) before income taxes | |||||||||||||||||||
Other comprehensive income (loss) | 37.1 | 20.0 | 57.1 | 2.8 | 59.9 | ||||||||||||||
before income taxes | |||||||||||||||||||
Less: Income tax expense (benefit) related to: | |||||||||||||||||||
Net unrealized investment gains (losses) | 28.8 | 8.8 | 37.6 | -6.3 | 31.3 | ||||||||||||||
Non-credit portion of OTTI losses | 0.4 | -0.5 | -0.1 | — | -0.1 | ||||||||||||||
recognized in OCI | |||||||||||||||||||
Net pension liability adjustment | — | — | — | — | — | ||||||||||||||
Net unrealized other gains (losses) | — | — | — | — | — | ||||||||||||||
Net unrealized derivative instrument | — | — | — | — | — | ||||||||||||||
gains (losses) | |||||||||||||||||||
Total income tax expense (benefit) | 29.2 | 8.3 | 37.5 | -6.3 | 31.2 | ||||||||||||||
Other comprehensive income (loss) | 7.9 | 11.7 | 19.6 | 9.1 | 28.7 | ||||||||||||||
Comprehensive income (loss) | 6.2 | (17.3) | -11.1 | 20.6 | 9.5 | ||||||||||||||
Less: Comprehensive income (loss) attributable | — | -0.1 | -0.1 | — | -0.1 | ||||||||||||||
to noncontrolling interests, net of income taxes | |||||||||||||||||||
Comprehensive income (loss) attributable | $ | 6.2 | $ | -17.2 | $ | -11 | $ | 20.6 | $ | 9.6 | |||||||||
to The Phoenix Companies, Inc. | |||||||||||||||||||
LOSS PER SHARE: (3) | |||||||||||||||||||
Loss from continuing operations – basic | $ | 0.09 | $ | -4.99 | $ | 1.98 | $ | -2.92 | |||||||||||
Loss from continuing operations – diluted | $ | 0.08 | $ | -4.99 | $ | 1.98 | $ | -2.92 | |||||||||||
Loss from discontinued operations – basic | $ | -0.38 | $ | — | $ | — | $ | -0.38 | |||||||||||
Loss from discontinued operations –diluted | $ | -0.37 | $ | — | $ | — | $ | -0.38 | |||||||||||
Net loss attributable to | $ | -0.29 | $ | -4.97 | $ | 1.98 | $ | -3.29 | |||||||||||
The Phoenix Companies, Inc.– basic | |||||||||||||||||||
Net loss attributable to | $ | -0.29 | $ | -4.97 | $ | 1.98 | $ | -3.29 | |||||||||||
The Phoenix Companies, Inc.– diluted | |||||||||||||||||||
Basic weighted-average common shares | 5,814 | 5,814 | -4 | $ | 5,814 | 5,814 | |||||||||||||
outstanding (in thousands) | |||||||||||||||||||
Diluted weighted-average common shares | 5,889 | 5,814 | -4 | $ | 5,814 | 5,814 | |||||||||||||
outstanding (in thousands) | |||||||||||||||||||
——————— | |||||||||||||||||||
-1 | Adjustments related to the correction of errors reflect amounts prior to the retrospective adoption of amended guidance to ASC 944, Financial Services – Insurance (ASU 2010-26). See footnote 2 below for additional information regarding these amounts and the retrospective adoption. | ||||||||||||||||||
-2 | Adjustments related to the retrospective adoption of amended guidance to ASC 944, Financial Services – Insurance (ASU 2010-26), have been updated from those originally disclosed in the First Quarter 2012 Quarterly Report on Form 10-Q filing to reflect the correction of errors identified related to the adoption of the amended guidance as well as indirect impact of the correction of errors associated with the restatement. | ||||||||||||||||||
-3 | All share amounts for all periods reflect the 1-for-20 reverse stock split, which was effective August 10, 2012. See Note 11 to these consolidated financial statements for additional information on the reverse stock split. | ||||||||||||||||||
-4 | Weighted-average common shares outstanding have been updated to reflect the impact of an error which had no material impact to EPS information, basic or diluted, for any period presented. | ||||||||||||||||||
Consolidated Balance Sheet | |||||||||||||||||||
($ in millions, except share data) | As of September 30, 2011 | ||||||||||||||||||
As previously | Correction | Adjusted | Retrospective | As restated | |||||||||||||||
reported | of errors (1) | prior to the | Adoption (2) | and amended | |||||||||||||||
retrospective | |||||||||||||||||||
adoption | |||||||||||||||||||
ASSETS: | |||||||||||||||||||
Available-for-sale debt securities, at fair value | $ | 11,676.3 | $ | -63.5 | $ | 11,612.8 | $ | — | $ | 11,612.8 | |||||||||
Available-for-sale equity securities, at fair value | 47.8 | -8.9 | 38.9 | — | 38.9 | ||||||||||||||
Limited partnerships and other investments | 610.2 | -39.1 | 571.1 | — | 571.1 | ||||||||||||||
Policy loans, at unpaid principal balances | 2,352.4 | — | 2,352.4 | — | 2,352.4 | ||||||||||||||
Derivative investments | 171.3 | -13.8 | 157.5 | — | 157.5 | ||||||||||||||
Fair value investments | 88.2 | 85.2 | 173.4 | — | 173.4 | ||||||||||||||
Total investments | 14,946.2 | -40.1 | 14,906.1 | — | 14,906.1 | ||||||||||||||
Cash and cash equivalents | 148.8 | -20.5 | 128.3 | — | 128.3 | ||||||||||||||
Accrued investment income | 203.8 | -0.1 | 203.7 | — | 203.7 | ||||||||||||||
Receivables | 413.2 | 237.9 | 651.1 | — | 651.1 | ||||||||||||||
Deferred policy acquisition costs | 1,330.3 | -4.4 | 1,325.9 | -193.1 | 1,132.8 | ||||||||||||||
Deferred income taxes, net | 121.0 | -1.1 | 119.9 | — | 119.9 | ||||||||||||||
Other assets | 150.6 | 49.7 | 200.3 | -1 | 199.3 | ||||||||||||||
Discontinued operations assets | 54.9 | 14.1 | 69.0 | — | 69.0 | ||||||||||||||
Separate account assets | 3,666.9 | -1 | 3,665.9 | — | 3,665.9 | ||||||||||||||
Total assets | $ | 21,035.7 | $ | 234.5 | $ | 21,270.2 | $ | -194.1 | $ | 21,076.1 | |||||||||
LIABILITIES: | |||||||||||||||||||
Policy liabilities and accruals | $ | 12,978.8 | $ | -338.2 | $ | 12,640.6 | $ | -19.6 | $ | 12,621.0 | |||||||||
Policyholder deposit funds | 2,156.5 | 6.2 | 2,162.7 | — | 2,162.7 | ||||||||||||||
Dividend obligations (3) | — | 758.3 | 758.3 | — | 758.3 | ||||||||||||||
Indebtedness | 427.7 | — | 427.7 | — | 427.7 | ||||||||||||||
Other liabilities | 517.7 | 34.2 | 551.9 | — | 551.9 | ||||||||||||||
Discontinued operations liabilities | 47.1 | 14.1 | 61.2 | — | 61.2 | ||||||||||||||
Separate account liabilities | 3,666.9 | -1 | 3,665.9 | — | 3,665.9 | ||||||||||||||
Total liabilities | 19,794.7 | 473.6 | 20,268.3 | -19.6 | 20,248.7 | ||||||||||||||
COMMITMENTS AND CONTINGENT LIABILITIES (Notes 23, 24, & 25) | |||||||||||||||||||
STOCKHOLDERS’ EQUITY: | |||||||||||||||||||
Common stock, $.01 par value: 5.7 million | 1.3 | — | 1.3 | — | 1.3 | ||||||||||||||
shares outstanding (4) | |||||||||||||||||||
Additional paid-in capital | 2,632.8 | — | 2,632.8 | — | 2,632.8 | ||||||||||||||
Accumulated other comprehensive income (loss) | -80.2 | -80.7 | -160.9 | 40.2 | -120.7 | ||||||||||||||
Accumulated deficit | -1,133.40 | -161 | -1,294.40 | -214.7 | -1,509.10 | ||||||||||||||
Treasury stock, at cost: 0.6 million shares (4) | -179.5 | — | -179.5 | — | -179.5 | ||||||||||||||
Total The Phoenix Companies ,Inc. | 1,241.0 | -241.7 | 999.3 | -174.5 | 824.8 | ||||||||||||||
stockholders’ equity | |||||||||||||||||||
Noncontrolling interests | — | 2.6 | 2.6 | — | 2.6 | ||||||||||||||
Total stockholders’ equity | 1,241.0 | -239.1 | 1,001.9 | -174.5 | 827.4 | ||||||||||||||
Total liabilities and stockholders’ equity | $ | 21,035.7 | $ | 234.5 | $ | 21,270.2 | $ | -194.1 | $ | 21,076.1 | |||||||||
——————— | |||||||||||||||||||
-1 | Adjustments related to the correction of errors reflect amounts prior to the retrospective adoption of amended guidance to ASC 944, Financial Services – Insurance (ASU 2010-26). See footnote 2 below for additional information regarding these amounts and the retrospective adoption. | ||||||||||||||||||
-2 | Adjustments related to the retrospective adoption of amended guidance to ASC 944, Financial Services – Insurance (ASU 2010-26), have been updated from those originally disclosed in the First Quarter 2012 Quarterly Report on Form 10-Q filing to reflect the correction of errors identified related to the adoption of the amended guidance as well as indirect impact of the correction of errors associated with the restatement. | ||||||||||||||||||
-3 | Dividend obligations were previously included in policy liabilities and accruals. | ||||||||||||||||||
-4 | All share amounts for all periods reflect the 1-for-20 reverse stock split, which was effective August 10, 2012. See Note 11 to these consolidated financial statements for additional information on the reverse stock split. | ||||||||||||||||||
Consolidated Balance Sheet | |||||||||||||||||||
($ in millions, except share data) | As of June 30, 2011 | ||||||||||||||||||
As previously | Correction | Adjusted | Retrospective | As restated | |||||||||||||||
reported | of errors (1) | prior to the | Adoption (2) | and amended | |||||||||||||||
retrospective | |||||||||||||||||||
adoption | |||||||||||||||||||
ASSETS: | |||||||||||||||||||
Available-for-sale debt securities, at fair value | $ | 11,401.9 | $ | -54.6 | $ | 11,347.3 | $ | — | $ | 11,347.3 | |||||||||
Available-for-sale equity securities, at fair value | 48.5 | -5.3 | 43.2 | — | 43.2 | ||||||||||||||
Limited partnerships and other investments | 610.5 | -47.8 | 562.7 | — | 562.7 | ||||||||||||||
Policy loans, at unpaid principal balances | 2,365.0 | —— | 2,365.0 | — | 2,365.0 | ||||||||||||||
Derivative investments | 118.2 | -1.9 | 116.3 | — | 116.3 | ||||||||||||||
Fair value investments | 93.3 | 86.5 | 179.8 | — | 179.8 | ||||||||||||||
Total investments | 14,637.4 | -23.1 | 14,614.3 | — | 14,614.3 | ||||||||||||||
Cash and cash equivalents | 135.1 | -31.2 | 103.9 | — | 103.9 | ||||||||||||||
Accrued investment income | 180.7 | 0.1 | 180.8 | — | 180.8 | ||||||||||||||
Receivables | 432.5 | 247.7 | 680.2 | — | 680.2 | ||||||||||||||
Deferred policy acquisition costs | 1,358.9 | -2.5 | 1,356.4 | -200.3 | 1,156.1 | ||||||||||||||
Deferred income taxes, net | 88.7 | 0.6 | 89.3 | — | 89.3 | ||||||||||||||
Other assets | 154.3 | 50.0 | 204.3 | -1 | 203.3 | ||||||||||||||
Discontinued operations assets | 53.4 | 14.5 | 67.9 | — | 67.9 | ||||||||||||||
Separate account assets | 4,336.3 | 0.3 | 4,336.6 | — | 4,336.6 | ||||||||||||||
Total assets | $ | 21,377.3 | $ | 256.4 | $ | 21,633.7 | $ | -201.3 | $ | 21,432.4 | |||||||||
LIABILITIES: | |||||||||||||||||||
Policy liabilities and accruals | $ | 12,975.0 | $ | -295.6 | $ | 12,679.4 | $ | -17.8 | $ | 12,661.6 | |||||||||
Policyholder deposit funds | 1,860.6 | 0.9 | 1,861.5 | — | 1,861.5 | ||||||||||||||
Dividend obligations (3) | — | 690.8 | 690.8 | — | 690.8 | ||||||||||||||
Indebtedness | 427.7 | — | 427.7 | — | 427.7 | ||||||||||||||
Other liabilities | 569.0 | 12.5 | 581.5 | — | 581.5 | ||||||||||||||
Discontinued operations liabilities | 45.6 | 14.5 | 60.1 | — | 60.1 | ||||||||||||||
Separate account liabilities | 4,336.3 | 0.3 | 4,336.6 | — | 4,336.6 | ||||||||||||||
Total liabilities | 20,214.2 | 423.4 | 20,637.6 | -17.8 | 20,619.8 | ||||||||||||||
COMMITMENTS AND CONTINGENT LIABILITIES (Notes 23, 24, & 25) | |||||||||||||||||||
STOCKHOLDERS’ EQUITY: | |||||||||||||||||||
Common stock, $.01 par value: 5.7 million | 1.3 | — | 1.3 | — | 1.3 | ||||||||||||||
shares outstanding (4) | |||||||||||||||||||
Additional paid-in capital | 2,632.4 | — | 2,632.4 | — | 2,632.4 | ||||||||||||||
Accumulated other comprehensive income (loss) | -125.9 | -39 | -164.9 | 37.4 | -127.5 | ||||||||||||||
Accumulated deficit | -1,165.20 | -131 | -1,296.20 | -220.9 | -1,517.10 | ||||||||||||||
Treasury stock, at cost: 0.6 million shares (4) | -179.5 | — | -179.5 | — | -179.5 | ||||||||||||||
Total The Phoenix Companies, Inc. | 1,163.1 | -170 | 993.1 | -183.5 | 809.6 | ||||||||||||||
stockholders’ equity | |||||||||||||||||||
Noncontrolling interests | — | 3.0 | 3.0 | — | 3.0 | ||||||||||||||
Total stockholders’ equity | 1,163.1 | -167 | 996.1 | -183.5 | 812.6 | ||||||||||||||
Total liabilities and stockholders’ equity | $ | 21,377.3 | $ | 256.4 | $ | 21,633.7 | $ | -201.3 | $ | 21,432.4 | |||||||||
——————— | |||||||||||||||||||
-1 | Adjustments related to the correction of errors reflect amounts prior to the retrospective adoption of amended guidance to ASC 944, Financial Services – Insurance (ASU 2010-26). See footnote 2 below for additional information regarding these amounts and the retrospective adoption. | ||||||||||||||||||
-2 | Adjustments related to the retrospective adoption of amended guidance to ASC 944, Financial Services – Insurance (ASU 2010-26), have been updated from those originally disclosed in the First Quarter 2012 Quarterly Report on Form 10-Q filing to reflect the correction of errors identified related to the adoption of the amended guidance as well as indirect impact of the correction of errors associated with the restatement. | ||||||||||||||||||
-3 | Dividend obligations were previously included in policy liabilities and accruals. | ||||||||||||||||||
-4 | All share amounts for all periods reflect the 1-for-20 reverse stock split, which was effective August 10, 2012. See Note 11 to these consolidated financial statements for additional information on the reverse stock split. | ||||||||||||||||||
Consolidated Balance Sheet | |||||||||||||||||||
($ in millions, except share data) | As of March 31, 2011 | ||||||||||||||||||
As previously | Correction | Adjusted | Retrospective | As restated | |||||||||||||||
reported | of errors (1) | prior to the | Adoption (2) | and amended | |||||||||||||||
retrospective | |||||||||||||||||||
adoption | |||||||||||||||||||
ASSETS: | |||||||||||||||||||
Available-for-sale debt securities, at fair value | $ | 11,159.5 | $ | -40.7 | $ | 11,118.8 | $ | — | $ | 11,118.8 | |||||||||
Available-for-sale equity securities, at fair value | 52.2 | -9.8 | 42.4 | — | 42.4 | ||||||||||||||
Limited partnerships and other investments | 593.7 | -46.8 | 546.9 | — | 546.9 | ||||||||||||||
Policy loans, at unpaid principal balances | 2,373.8 | — | 2,373.8 | — | 2,373.8 | ||||||||||||||
Derivative investments | 121.5 | -0.9 | 120.6 | — | 120.6 | ||||||||||||||
Fair value investments | 92.5 | 75.6 | 168.1 | — | 168.1 | ||||||||||||||
Total investments | 14,393.2 | -22.6 | 14,370.6 | — | 14,370.6 | ||||||||||||||
Cash and cash equivalents | 107.3 | -37.5 | 69.8 | — | 69.8 | ||||||||||||||
Accrued investment income | 173.5 | 0.2 | 173.7 | — | 173.7 | ||||||||||||||
Receivables | 432.0 | 268.3 | 700.3 | — | 700.3 | ||||||||||||||
Deferred policy acquisition costs | 1,403.3 | 4.0 | 1,407.3 | -212.2 | 1,195.1 | ||||||||||||||
Deferred income taxes, net | 93.5 | -1.9 | 91.6 | — | 91.6 | ||||||||||||||
Other assets | 165.5 | 34.4 | 199.9 | -1 | 198.9 | ||||||||||||||
Discontinued operations assets | 54.9 | 17.0 | 71.9 | — | 71.9 | ||||||||||||||
Separate account assets | 4,448.9 | -1.6 | 4,447.3 | — | 4,447.3 | ||||||||||||||
Total assets | $ | 21,272.1 | $ | 260.3 | $ | 21,532.4 | $ | -213.2 | $ | 21,319.2 | |||||||||
LIABILITIES: | |||||||||||||||||||
Policy liabilities and accruals | $ | 12,960.6 | $ | -220 | $ | 12,740.6 | $ | -19.4 | $ | 12,721.2 | |||||||||
Policyholder deposit funds | 1,667.2 | 0.2 | 1,667.4 | — | 1,667.4 | ||||||||||||||
Dividend obligations (3) | — | 618.1 | 618.1 | — | 618.1 | ||||||||||||||
Indebtedness | 427.7 | — | 427.7 | — | 427.7 | ||||||||||||||
Other liabilities | 575.7 | 1.6 | 577.3 | — | 577.3 | ||||||||||||||
Discontinued operations liabilities | 45.5 | 17.0 | 62.5 | — | 62.5 | ||||||||||||||
Separate account liabilities | 4,448.9 | -1.6 | 4,447.3 | — | 4,447.3 | ||||||||||||||
Total liabilities | 20,125.6 | 415.3 | 20,540.9 | -19.4 | 20,521.5 | ||||||||||||||
COMMITMENTS AND CONTINGENT LIABILITIES (Notes 23, 24, & 25) | |||||||||||||||||||
STOCKHOLDERS’ EQUITY: | |||||||||||||||||||
Common stock, $.01 par value: 5.7 million | 1.3 | — | 1.3 | — | 1.3 | ||||||||||||||
shares outstanding (4) | |||||||||||||||||||
Additional paid-in capital | 2,631.7 | — | 2,631.7 | — | 2,631.7 | ||||||||||||||
Accumulated other comprehensive income (loss) | -137.4 | -43.6 | -181 | 32.4 | -148.6 | ||||||||||||||
Accumulated deficit | -1,169.60 | -113.3 | -1,282.90 | -226.2 | -1,509.10 | ||||||||||||||
Treasury stock, at cost: 0.6 million shares (4) | -179.5 | — | -179.5 | — | -179.5 | ||||||||||||||
Total The Phoenix Companies, Inc. | 1,146.5 | -156.9 | 989.6 | -193.8 | 795.8 | ||||||||||||||
stockholders’ equity | |||||||||||||||||||
Noncontrolling interests | — | 1.9 | 1.9 | — | 1.9 | ||||||||||||||
Total stockholders’ equity | 1,146.5 | -155 | 991.5 | -193.8 | 797.7 | ||||||||||||||
Total liabilities and stockholders’ equity | $ | 21,272.1 | $ | 260.3 | $ | 21,532.4 | $ | -213.2 | $ | 21,319.2 | |||||||||
——————— | |||||||||||||||||||
-1 | Adjustments related to the correction of errors reflect amounts prior to the retrospective adoption of amended guidance to ASC 944, Financial Services – Insurance (ASU 2010-26). See footnote 2 below for additional information regarding these amounts and the retrospective adoption. | ||||||||||||||||||
-2 | Adjustments related to the retrospective adoption of amended guidance to ASC 944, Financial Services – Insurance (ASU 2010-26), have been updated from those originally disclosed in the First Quarter 2012 Quarterly Report on Form 10-Q filing to reflect the correction of errors identified related to the adoption of the amended guidance as well as indirect impact of the correction of errors associated with the restatement. | ||||||||||||||||||
-3 | Dividend obligations were previously included in policy liabilities and accruals. | ||||||||||||||||||
-4 | All share amounts for all periods reflect the 1-for-20 reverse stock split, which was effective August 10, 2012. See Note 11 to these consolidated financial statements for additional information on the reverse stock split. | ||||||||||||||||||
Consolidated Statement of Changes in Stockholders’ Equity | |||||||||||||||||||
($ in millions, except share data) | For the period ended December 31, 2011 | ||||||||||||||||||
As previously | Correction | Adjusted | Retrospective | As restated | |||||||||||||||
Reported | of errors (1) | prior to the | Adoption (2) | and amended | |||||||||||||||
retrospective | |||||||||||||||||||
adoption | |||||||||||||||||||
COMMON STOCK:(3) | |||||||||||||||||||
Balance, beginning of period | $ | 1.3 | $ | — | $ | 1.3 | $ | — | $ | 1.3 | |||||||||
Adjustment for reverse stock split | — | — | — | — | — | ||||||||||||||
Balance, end of period | $ | 1.3 | $ | — | $ | 1.3 | $ | — | $ | 1.3 | |||||||||
ADDITIONAL PAID-IN CAPITAL: | |||||||||||||||||||
Balance, beginning of period | $ | 2,631.0 | $ | — | $ | 2,631.0 | $ | — | $ | 2,631.0 | |||||||||
Issuance of shares and compensation expense | -0.5 | — | -0.5 | — | -0.5 | ||||||||||||||
on stock compensation awards | |||||||||||||||||||
Adjustment for reverse stock split | — | — | — | — | — | ||||||||||||||
Balance, end of period | $ | 2,630.5 | $ | — | $ | 2,630.5 | $ | — | $ | 2,630.5 | |||||||||
ACCUMULATED OTHER COMPREHENSIVE | |||||||||||||||||||
INCOME (LOSS): | |||||||||||||||||||
Balance, beginning of period | $ | -133.8 | $ | -50.7 | $ | -184.5 | $ | 28.3 | $ | -156.2 | |||||||||
Adjustment for initial application of | — | — | — | — | — | ||||||||||||||
accounting changes | |||||||||||||||||||
Other comprehensive income (loss) | -36.9 | -52.8 | -89.7 | 15.2 | -74.5 | ||||||||||||||
Balance, end of period | $ | -170.7 | $ | -103.5 | $ | -274.2 | $ | 43.5 | $ | -230.7 | |||||||||
ACCUMULATED DEFICIT: | |||||||||||||||||||
Balance, beginning of period | $ | -1,163.50 | $ | -102.1 | $ | -1,265.60 | $ | -232.4 | $ | -1,498.00 | |||||||||
Adjustment for initial application of | — | — | — | — | — | ||||||||||||||
accounting changes | |||||||||||||||||||
Net income (loss) | 8.1 | -61.2 | -53.1 | 22.4 | -30.7 | ||||||||||||||
Balance, end of period | $ | -1,155.40 | $ | -163.3 | $ | -1,318.70 | $ | -210 | $ | -1,528.70 | |||||||||
TREASURY STOCK, AT COST: (3) | |||||||||||||||||||
Balance, beginning of period | $ | -179.5 | $ | — | $ | -179.5 | $ | — | $ | -179.5 | |||||||||
Treasury shares purchased | — | — | — | — | — | ||||||||||||||
Balance, end of period | $ | -179.5 | $ | — | $ | -179.5 | $ | — | $ | -179.5 | |||||||||
TOTAL STOCKHOLDERS’ EQUITY | |||||||||||||||||||
ATTRIBUTABLE TO | |||||||||||||||||||
THE PHOENIX COMPANIES, INC.: | |||||||||||||||||||
Balance, beginning of period | $ | 1,155.5 | $ | -152.8 | $ | 1,002.7 | $ | -204.1 | $ | 798.6 | |||||||||
Adjustment for initial application of | —— | —— | — | — | —— | ||||||||||||||
accounting changes | |||||||||||||||||||
Change in stockholders’ equity attributable to | -29.3 | -114 | -143.3 | 37.6 | -105.7 | ||||||||||||||
The Phoenix Companies, Inc. | |||||||||||||||||||
Stockholders’ equity, end of period | $ | 1,126.2 | $ | -266.8 | $ | 859.4 | $ | -166.5 | $ | 692.9 | |||||||||
NONCONTROLLING INTERESTS: | |||||||||||||||||||
Balance, beginning of period | $ | — | $ | 1.8 | $ | 1.8 | — | $ | 1.8 | ||||||||||
Change in noncontrolling interests | — | 1.0 | 1.0 | — | 1.0 | ||||||||||||||
Balance, end of period | $ | — | $ | 2.8 | $ | 2.8 | $ | — | $ | 2.8 | |||||||||
TOTAL STOCKHOLDERS’ EQUITY: | |||||||||||||||||||
Balance, beginning of period | $ | 1,155.5 | $ | -151 | $ | 1,004.5 | $ | -204.1 | $ | 800.4 | |||||||||
Adjustment for initial application of | —— | —— | — | — | —— | ||||||||||||||
accounting changes | |||||||||||||||||||
Change in stockholders’ equity | -29.3 | -113 | -142.3 | 37.6 | -104.7 | ||||||||||||||
Stockholders’ equity, end of period | $ | 1,126.2 | $ | -264 | $ | 862.2 | $ | -166.5 | $ | 695.7 | |||||||||
——————— | |||||||||||||||||||
-1 | Adjustments related to the correction of errors reflect amounts prior to the retrospective adoption of amended guidance to ASC 944, Financial Services – Insurance (ASU 2010-26). See footnote 2 below for additional information regarding these amounts and the retrospective adoption. | ||||||||||||||||||
-2 | Adjustments related to the retrospective adoption of amended guidance to ASC 944, Financial Services – Insurance (ASU 2010-26), have been updated from those originally disclosed in the First Quarter 2012 Quarterly Report on Form 10-Q filing to reflect the correction of errors identified related to the adoption of the amended guidance as well as indirect impact of the correction of errors associated with the restatement. | ||||||||||||||||||
-3 | Reflects the 1-for-20 reverse stock split, which was effective August 10, 2012. See Note 11 to these consolidated financial statements for additional information on the reverse stock split. | ||||||||||||||||||
Consolidated Statement of Changes in Stockholders’ Equity | |||||||||||||||||||
($ in millions, except share data) | For the period ended September 30, 2011 | ||||||||||||||||||
As previously | Correction | Adjusted | Retrospective | As restated | |||||||||||||||
reported | of errors (1) | prior to the | Adoption (2) | and amended | |||||||||||||||
retrospective | |||||||||||||||||||
adoption | |||||||||||||||||||
COMMON STOCK:(3) | |||||||||||||||||||
Balance, beginning of period | $ | 1.3 | $ | — | $ | 1.3 | $ | — | $ | 1.3 | |||||||||
Adjustment for reverse stock split | — | — | — | — | — | ||||||||||||||
Balance, end of period | $ | 1.3 | $ | — | $ | 1.3 | $ | — | $ | 1.3 | |||||||||
ADDITIONAL PAID-IN CAPITAL: | |||||||||||||||||||
Balance, beginning of period | $ | 2,631.0 | $ | — | $ | 2,631.0 | $ | — | $ | 2,631.0 | |||||||||
Issuance of shares and compensation expense | 1.8 | — | 1.8 | — | 1.8 | ||||||||||||||
on stock compensation awards | |||||||||||||||||||
Adjustment for reverse stock split | — | — | — | — | — | ||||||||||||||
Balance, end of period | $ | 2,632.8 | $ | — | $ | 2,632.8 | $ | — | $ | 2,632.8 | |||||||||
ACCUMULATED OTHER COMPREHENSIVE | |||||||||||||||||||
INCOME (LOSS): | |||||||||||||||||||
Balance, beginning of period | $ | -133.8 | $ | -50.7 | $ | -184.5 | $ | 28.3 | $ | -156.2 | |||||||||
Adjustment for initial application of | — | — | — | — | — | ||||||||||||||
accounting changes | |||||||||||||||||||
Other comprehensive income (loss) | 53.6 | -30 | 23.6 | 11.9 | 35.5 | ||||||||||||||
Balance, end of period | $ | -80.2 | $ | -80.7 | $ | -160.9 | $ | 40.2 | $ | -120.7 | |||||||||
ACCUMULATED DEFICIT: | |||||||||||||||||||
Balance, beginning of period | $ | -1,163.50 | $ | -102.1 | $ | -1,265.60 | $ | -232.4 | $ | -1,498.00 | |||||||||
Adjustment for initial application of | — | — | — | — | — | ||||||||||||||
accounting changes | |||||||||||||||||||
Net income (loss) | 30.1 | -58.9 | -28.8 | 17.7 | -11.1 | ||||||||||||||
Balance, end of period | $ | -1,133.40 | $ | -161 | $ | -1,294.40 | $ | -214.7 | $ | -1,509.10 | |||||||||
TREASURY STOCK, AT COST:(3) | |||||||||||||||||||
Balance, beginning of period | $ | -179.5 | $ | — | $ | -179.5 | $ | — | $ | -179.5 | |||||||||
Change in treasury stock | — | — | — | — | — | ||||||||||||||
Balance, end of period | $ | -179.5 | $ | — | $ | -179.5 | $ | — | $ | -179.5 | |||||||||
TOTAL STOCKHOLDERS’ EQUITY | |||||||||||||||||||
ATTRIBUTABLE TO | |||||||||||||||||||
THE PHOENIX COMPANIES, INC.: | |||||||||||||||||||
Balance, beginning of period | $ | 1,155.5 | $ | -152.8 | $ | 1,002.7 | $ | -204.1 | $ | 798.6 | |||||||||
Adjustment for initial application of | — | — | — | — | — | ||||||||||||||
accounting changes | |||||||||||||||||||
Change in stockholders’ equity attributable to | 85.5 | -88.9 | -3.4 | 29.6 | 26.2 | ||||||||||||||
The Phoenix Companies, Inc. | |||||||||||||||||||
Stockholders’ equity, end of period | $ | 1,241.0 | $ | -241.7 | $ | 999.3 | $ | -174.5 | $ | 824.8 | |||||||||
NONCONTROLLING INTERESTS: | |||||||||||||||||||
Balance, beginning of period | $ | — | $ | 1.8 | $ | 1.8 | — | $ | 1.8 | ||||||||||
Change in noncontrolling interests | — | 0.8 | 0.8 | — | 0.8 | ||||||||||||||
Balance, end of period | $ | — | $ | 2.6 | $ | 2.6 | $ | — | $ | 2.6 | |||||||||
TOTAL STOCKHOLDERS’ EQUITY: | |||||||||||||||||||
Balance, beginning of period | $ | 1,155.5 | $ | -151 | $ | 1,004.5 | $ | -204.1 | $ | 800.4 | |||||||||
Adjustment for initial application of | — | — | — | — | — | ||||||||||||||
accounting changes | |||||||||||||||||||
Change in stockholders’ equity | 85.5 | -88.1 | -2.6 | 29.6 | 27.0 | ||||||||||||||
Stockholders’ equity, end of period | $ | 1,241.0 | $ | -239.1 | $ | 1,001.9 | $ | -174.5 | $ | 827.4 | |||||||||
——————— | |||||||||||||||||||
-1 | Adjustments related to the correction of errors reflect amounts prior to the retrospective adoption of amended guidance to ASC 944, Financial Services – Insurance (ASU 2010-26). See footnote 2 below for additional information regarding these amounts and the retrospective adoption. | ||||||||||||||||||
-2 | Adjustments related to the retrospective adoption of amended guidance to ASC 944, Financial Services – Insurance (ASU 2010-26), have been updated from those originally disclosed in the First Quarter 2012 Quarterly Report on Form 10-Q filing to reflect the correction of errors identified related to the adoption of the amended guidance as well as indirect impact of the correction of errors associated with the restatement. | ||||||||||||||||||
-3 | Reflects the 1-for-20 reverse stock split, which was effective August 10, 2012. See Note 11 to these consolidated financial statements for additional information on the reverse stock split. | ||||||||||||||||||
Consolidated Statement of Changes in Stockholders’ Equity | |||||||||||||||||||
($ in millions, except share data) | For the period ended June 30, 2011 | ||||||||||||||||||
As previously | Correction | Adjusted | Retrospective | As restated | |||||||||||||||
reported | of errors (1) | prior to the | Adoption (2) | and amended | |||||||||||||||
retrospective | |||||||||||||||||||
adoption | |||||||||||||||||||
COMMON STOCK:(3) | |||||||||||||||||||
Balance, beginning of period | $ | 1.3 | $ | — | $ | 1.3 | $ | — | $ | 1.3 | |||||||||
Adjustment for reverse stock split | — | — | — | — | — | ||||||||||||||
Balance, end of period | $ | 1.3 | $ | — | $ | 1.3 | $ | — | $ | 1.3 | |||||||||
ADDITIONAL PAID-IN CAPITAL: | |||||||||||||||||||
Balance, beginning of period | $ | 2,631.0 | $ | — | $ | 2,631.0 | $ | — | $ | 2,631.0 | |||||||||
Issuance of shares and compensation expense | 1.4 | — | 1.4 | — | 1.4 | ||||||||||||||
on stock compensation awards | |||||||||||||||||||
Adjustment for reverse stock split | — | — | — | — | — | ||||||||||||||
Balance, end of period | $ | 2,632.4 | $ | — | $ | 2,632.4 | $ | — | $ | 2,632.4 | |||||||||
ACCUMULATED OTHER COMPREHENSIVE | |||||||||||||||||||
INCOME (LOSS): | |||||||||||||||||||
Balance, beginning of period | (133.8) | $ | -50.7 | $ | -184.5 | $ | 28.3 | $ | -156.2 | ||||||||||
Adjustment for initial application of | — | — | — | — | — | ||||||||||||||
accounting changes | |||||||||||||||||||
Other comprehensive income (loss) | 7.9 | 11.7 | 19.6 | 9.1 | 28.7 | ||||||||||||||
Balance, end of period | $ | -125.9 | $ | -39 | $ | -164.9 | $ | 37.4 | $ | -127.5 | |||||||||
ACCUMULATED DEFICIT: | |||||||||||||||||||
Balance, beginning of period | $ | -1,163.50 | $ | -102.1 | $ | -1,265.60 | $ | -232.4 | $ | -1,498.00 | |||||||||
Adjustment for initial application of | — | — | — | — | — | ||||||||||||||
accounting changes | |||||||||||||||||||
Net income (loss) | -1.7 | -28.9 | -30.6 | 11.5 | -19.1 | ||||||||||||||
Balance, end of period | $ | -1,165.20 | $ | -131 | $ | -1,296.20 | $ | -220.9 | $ | -1,517.10 | |||||||||
TREASURY STOCK, AT COST:(3) | |||||||||||||||||||
Balance, beginning of period | $ | -179.5 | $ | — | $ | -179.5 | $ | — | $ | -179.5 | |||||||||
Treasury shares purchased | — | — | — | — | — | ||||||||||||||
Balance, end of period | $ | -179.5 | $ | — | $ | -179.5 | $ | — | $ | -179.5 | |||||||||
TOTAL STOCKHOLDERS’ EQUITY | |||||||||||||||||||
ATTRIBUTABLE TO | |||||||||||||||||||
THE PHOENIX COMPANIES, INC.: | |||||||||||||||||||
Balance, beginning of period | $ | 1,155.5 | $ | -152.8 | $ | 1,002.7 | $ | -204.1 | $ | 798.6 | |||||||||
Adjustment for initial application of | — | — | — | — | — | ||||||||||||||
accounting changes | |||||||||||||||||||
Change in stockholders’ equity attributable to | 7.6 | -17.2 | -9.6 | 20.6 | 11.0 | ||||||||||||||
The Phoenix Companies, Inc. | |||||||||||||||||||
Stockholders’ equity, end of period | $ | 1,163.1 | $ | -170 | $ | 993.1 | $ | -183.5 | $ | 809.6 | |||||||||
NONCONTROLLING INTERESTS: | |||||||||||||||||||
Balance, beginning of period | $ | — | $ | 1.8 | $ | 1.8 | — | $ | 1.8 | ||||||||||
Change in noncontrolling interests | — | 1.2 | 1.2 | — | 1.2 | ||||||||||||||
Balance, end of period | $ | — | $ | 3.0 | $ | 3.0 | $ | — | $ | 3.0 | |||||||||
TOTAL STOCKHOLDERS’ EQUITY: | |||||||||||||||||||
Balance, beginning of period | $ | 1,155.5 | $ | -151 | $ | 1,004.5 | $ | -204.1 | $ | 800.4 | |||||||||
Adjustment for initial application of | — | — | — | — | — | ||||||||||||||
accounting changes | |||||||||||||||||||
Change in stockholders’ equity | 7.6 | -16 | -8.4 | 20.6 | 12.2 | ||||||||||||||
Stockholders’ equity, end of period | $ | 1,163.1 | $ | -167 | $ | 996.1 | $ | -183.5 | $ | 812.6 | |||||||||
——————— | |||||||||||||||||||
-1 | Adjustments related to the correction of errors reflect amounts prior to the retrospective adoption of amended guidance to ASC 944, Financial Services – Insurance (ASU 2010-26). See footnote 2 below for additional information regarding these amounts and the retrospective adoption. | ||||||||||||||||||
-2 | Adjustments related to the retrospective adoption of amended guidance to ASC 944, Financial Services – Insurance (ASU 2010-26), have been updated from those originally disclosed in the First Quarter 2012 Quarterly Report on Form 10-Q filing to reflect the correction of errors identified related to the adoption of the amended guidance as well as indirect impact of the correction of errors associated with the restatement. | ||||||||||||||||||
-3 | Reflects the 1-for-20 reverse stock split, which was effective August 10, 2012. See Note 11 to these consolidated financial statements for additional information on the reverse stock split. | ||||||||||||||||||
Consolidated Statement of Changes in Stockholders’ Equity | |||||||||||||||||||
($ in millions, except share data) | For the period ended March 31, 2011 | ||||||||||||||||||
As previously | Correction | Adjusted | Retrospective | As restated | |||||||||||||||
reported | of errors (1) | prior to the | Adoption (2) | and amended | |||||||||||||||
retrospective | |||||||||||||||||||
adoption | |||||||||||||||||||
COMMON STOCK:(3) | |||||||||||||||||||
Balance, beginning of period | $ | 1.3 | $ | — | $ | 1.3 | $ | — | $ | 1.3 | |||||||||
Adjustment for reverse stock split | — | — | — | — | — | ||||||||||||||
Balance, end of period | $ | 1.3 | $ | — | $ | 1.3 | $ | — | $ | 1.3 | |||||||||
ADDITIONAL PAID-IN CAPITAL: | |||||||||||||||||||
Balance, beginning of period | $ | 2,631.0 | $ | — | $ | 2,631.0 | $ | — | $ | 2,631.0 | |||||||||
Issuance of shares and compensation expense | 0.7 | — | 0.7 | — | 0.7 | ||||||||||||||
on stock compensation awards | |||||||||||||||||||
Adjustment for reverse stock split | — | — | — | — | — | ||||||||||||||
Balance, end of period | $ | 2,631.7 | $ | — | $ | 2,631.7 | $ | — | $ | 2,631.7 | |||||||||
ACCUMULATED OTHER COMPREHENSIVE | |||||||||||||||||||
INCOME (LOSS): | |||||||||||||||||||
Balance, beginning of period | -133.8 | $ | -50.7 | $ | -184.5 | $ | 28.3 | $ | -156.2 | ||||||||||
Adjustment for initial application of | — | — | — | — | — | ||||||||||||||
accounting changes | |||||||||||||||||||
Other comprehensive income (loss) | -3.6 | 7.1 | 3.5 | 4.1 | 7.6 | ||||||||||||||
Balance, end of period | $ | -137.4 | $ | -43.6 | $ | -181 | $ | 32.4 | $ | -148.6 | |||||||||
ACCUMULATED DEFICIT: | |||||||||||||||||||
Balance, beginning of period | $ | -1,163.50 | $ | -102.1 | $ | -1,265.60 | $ | -232.4 | $ | -1,498.00 | |||||||||
Adjustment for initial application of | — | — | — | — | — | ||||||||||||||
accounting changes | |||||||||||||||||||
Net income (loss) | -6.1 | -11.2 | -17.3 | 6.2 | -11.1 | ||||||||||||||
Balance, end of period | $ | -1,169.60 | $ | -113.3 | $ | -1,282.90 | $ | -226.2 | $ | -1,509.10 | |||||||||
TREASURY STOCK, AT COST:(3) | |||||||||||||||||||
Balance, beginning of period | $ | -179.5 | $ | — | $ | -179.5 | $ | — | $ | -179.5 | |||||||||
Treasury shares purchased | — | — | — | — | — | ||||||||||||||
Balance, end of period | $ | -179.5 | $ | — | $ | -179.5 | $ | — | $ | -179.5 | |||||||||
TOTAL STOCKHOLDERS’ EQUITY | |||||||||||||||||||
ATTRIBUTABLE TO | |||||||||||||||||||
THE PHOENIX COMPANIES, INC.: | |||||||||||||||||||
Balance, beginning of period | $ | 1,155.5 | $ | -152.8 | $ | 1,002.7 | $ | -204.1 | $ | 798.6 | |||||||||
Adjustment for initial application of | — | — | — | — | — | ||||||||||||||
accounting changes | |||||||||||||||||||
Change in stockholders’ equity attributable to | -9 | -4.1 | -13.1 | 10.3 | -2.8 | ||||||||||||||
The Phoenix Companies, Inc. | |||||||||||||||||||
Stockholders’ equity, end of period | $ | 1,146.5 | $ | -156.9 | $ | 989.6 | $ | -193.8 | $ | 795.8 | |||||||||
NONCONTROLLING INTERESTS: | |||||||||||||||||||
Balance, beginning of period | $ | — | $ | 1.8 | $ | 1.8 | — | $ | 1.8 | ||||||||||
Change in noncontrolling interests | — | 0.1 | 0.1 | — | 0.1 | ||||||||||||||
Balance, end of period | $ | — | $ | 1.9 | $ | 1.9 | $ | — | $ | 1.9 | |||||||||
TOTAL STOCKHOLDERS’ EQUITY: | |||||||||||||||||||
Balance, beginning of period | $ | 1,155.5 | $ | -151 | $ | 1,004.5 | $ | -204.1 | $ | 800.4 | |||||||||
Adjustment for initial application of | — | — | — | — | — | ||||||||||||||
accounting changes | |||||||||||||||||||
Change in stockholders’ equity | -9 | -4 | -13 | 10.3 | -2.7 | ||||||||||||||
Stockholders’ equity, end of period | $ | 1,146.5 | $ | -155 | $ | 991.5 | $ | -193.8 | $ | 797.7 | |||||||||
——————— | |||||||||||||||||||
-1 | Adjustments related to the correction of errors reflect amounts prior to the retrospective adoption of amended guidance to ASC 944, Financial Services – Insurance (ASU 2010-26). See footnote 2 below for additional information regarding these amounts and the retrospective adoption. | ||||||||||||||||||
-2 | Adjustments related to the retrospective adoption of amended guidance to ASC 944, Financial Services – Insurance (ASU 2010-26), have been updated from those originally disclosed in the First Quarter 2012 Quarterly Report on Form 10-Q filing to reflect the correction of errors identified related to the adoption of the amended guidance as well as indirect impact of the correction of errors associated with the restatement. | ||||||||||||||||||
-3 | Reflects the 1-for-20 reverse stock split, which was effective August 10, 2012. See Note 11 to these consolidated financial statements for additional information on the reverse stock split. | ||||||||||||||||||
Consolidated Statement of Cash Flows | |||||||||||||||||||
($ in millions) | As of and for the year ended December 31, 2011 | ||||||||||||||||||
As previously | Correction | Adjusted | Retrospective | As restated | |||||||||||||||
reported | of errors (1) | prior to the | Adoption (2) | and amended | |||||||||||||||
retrospective | |||||||||||||||||||
adoption | |||||||||||||||||||
OPERATING ACTIVITIES: | |||||||||||||||||||
Net income (loss) | $ | 8.1 | $ | -61.2 | $ | -53.1 | $ | 22.4 | $ | -30.7 | |||||||||
Net realized investment gains | 16.4 | 13.5 | 29.9 | — | 29.9 | ||||||||||||||
Gain on debt repurchase | — | -0.2 | -0.2 | — | -0.2 | ||||||||||||||
Policy acquisition costs deferred | -141.1 | 48.5 | -92.6 | 1.4 | -91.2 | ||||||||||||||
Amortization of deferred policy acquisition costs | 210.6 | -15.2 | 195.4 | -37.5 | 157.9 | ||||||||||||||
Amortization and depreciation | 12.8 | — | 12.8 | — | 12.8 | ||||||||||||||
Interest credited | — | 117.5 | 117.5 | — | 117.5 | ||||||||||||||
Equity in earnings of | — | -45.3 | -45.3 | — | -45.3 | ||||||||||||||
limited partnerships and other investments | |||||||||||||||||||
Change in: | |||||||||||||||||||
Accrued investment income | -50.8 | -90.5 | -141.3 | — | -141.3 | ||||||||||||||
Deferred income taxes | 1.0 | -12.8 | -11.8 | 9.1 | -2.7 | ||||||||||||||
Receivables | -7.3 | 7.2 | -0.1 | — | -0.1 | ||||||||||||||
Policy liabilities and accruals | -203.3 | -206.3 | -409.6 | 4.6 | -405 | ||||||||||||||
Dividend obligations | — | 7.3 | 7.3 | — | 7.3 | ||||||||||||||
Impact of operating activities of | — | -4.2 | -4.2 | — | -4.2 | ||||||||||||||
consolidated investment entities, net | |||||||||||||||||||
Other operating activities, net | -3.4 | -39.1 | -42.5 | — | -42.5 | ||||||||||||||
Cash from (for) continuing operations | -157 | -280.8 | -437.8 | — | -437.8 | ||||||||||||||
Discontinued operations, net | 18.6 | -18.6 | — | — | — | ||||||||||||||
Cash used for operating activities | -138.4 | -299.4 | -437.8 | — | -437.8 | ||||||||||||||
INVESTING ACTIVITIES: | |||||||||||||||||||
Purchases of: | |||||||||||||||||||
Available-for-sale debt securities | -3,189.00 | 140.8 | -3,048.20 | — | -3,048.20 | ||||||||||||||
Available-for-sale equity securities | -6.4 | — | -6.4 | — | -6.4 | ||||||||||||||
Derivative instruments | -53.9 | -16.6 | -70.5 | — | -70.5 | ||||||||||||||
Fair value investments | — | -47.3 | -47.3 | — | -47.3 | ||||||||||||||
Other investments | -106.5 | 105.1 | -1.4 | — | -1.4 | ||||||||||||||
Sales, repayments and maturities of: | |||||||||||||||||||
Available-for-sale debt securities | 2,444.6 | -115.4 | 2,329.2 | — | 2,329.2 | ||||||||||||||
Available-for-sale equity securities | 10.2 | — | 10.2 | — | 10.2 | ||||||||||||||
Derivative instruments | 57.2 | 29.9 | 87.1 | — | 87.1 | ||||||||||||||
Fair value investments | 8.6 | 4.8 | 13.4 | — | 13.4 | ||||||||||||||
Other investments | 144.6 | -122.3 | 22.3 | — | 22.3 | ||||||||||||||
Contributions to limited partnerships | — | -99.4 | -99.4 | — | -99.4 | ||||||||||||||
and limited liability corporations | |||||||||||||||||||
Distributions from limited partnerships | — | 120.5 | 120.5 | — | 120.5 | ||||||||||||||
and limited liability corporations | |||||||||||||||||||
Policy loans, net | 7.2 | 121.1 | 128.3 | — | 128.3 | ||||||||||||||
Impact of investing activities of | — | — | — | — | — | ||||||||||||||
consolidated investment entities, net | |||||||||||||||||||
Other investing activities, net | — | -4.6 | -4.6 | — | -4.6 | ||||||||||||||
Proceeds from sale of subsidiary | 1.0 | -1 | — | — | — | ||||||||||||||
Premises and equipment additions | -4.4 | 4.4 | — | — | — | ||||||||||||||
Discontinued operations, net | -18.6 | 18.6 | — | — | — | ||||||||||||||
Cash provided by (used for) investing activities | -705.4 | 138.6 | -566.8 | — | -566.8 | ||||||||||||||
(Continued from previous page) | Consolidated Statement of Cash Flows | ||||||||||||||||||
($ in millions) | As of and for the year ended December 31, 2011 | ||||||||||||||||||
As previously | Correction | Adjusted | Retrospective | As restated | |||||||||||||||
reported | of errors (1) | prior to the | Adoption (2) | and amended | |||||||||||||||
retrospective | |||||||||||||||||||
adoption | |||||||||||||||||||
FINANCING ACTIVITIES: | |||||||||||||||||||
Policyholder deposit fund deposits | 1,725.5 | 99.9 | 1,825.4 | — | 1,825.4 | ||||||||||||||
Policyholder deposit fund withdrawals | -808.5 | -370.8 | -1,179.30 | — | -1,179.30 | ||||||||||||||
Net transfers to/from separate accounts | — | 435.1 | 435.1 | — | 435.1 | ||||||||||||||
Impact of financing activities of | — | 1.5 | 1.5 | — | 1.5 | ||||||||||||||
consolidated investment entities, net | |||||||||||||||||||
Other financing activities, net | -0.8 | -4.1 | -4.9 | — | -4.9 | ||||||||||||||
Cash provided by (used for) financing activities | 916.2 | 161.6 | 1,077.8 | — | 1,077.8 | ||||||||||||||
Change in cash and cash equivalents | 72.4 | 0.8 | 73.2 | — | 73.2 | ||||||||||||||
Change in cash included in | — | 1.3 | 1.3 | — | 1.3 | ||||||||||||||
discontinued operations assets | |||||||||||||||||||
Cash and cash equivalents, beginning of period | 121.9 | -28.2 | 93.7 | — | 93.7 | ||||||||||||||
Cash and cash equivalents, end of period | $ | 194.3 | $ | -26.1 | $ | 168.2 | $ | — | $ | 168.2 | |||||||||
Supplemental Disclosure of Cash Flow Information | |||||||||||||||||||
Income taxes paid | $ | -6.2 | $ | — | $ | -6.2 | $ | — | $ | -6.2 | |||||||||
Interest expense on indebtedness paid | $ | -34.9 | $ | 3.5 | $ | -31.4 | $ | — | $ | -31.4 | |||||||||
Non-Cash Transactions During the Year | |||||||||||||||||||
Investment exchanges | $ | — | $ | 97.8 | $ | 97.8 | $ | — | $ | 97.8 | |||||||||
——————— | |||||||||||||||||||
-1 | Adjustments related to the correction of errors reflect amounts prior to the retrospective adoption of amended guidance to ASC 944, Financial Services – Insurance (ASU 2010-26). See footnote 2 below for additional information regarding these amounts and the retrospective adoption. | ||||||||||||||||||
-2 | Adjustments related to the retrospective adoption of amended guidance to ASC 944, Financial Services – Insurance (ASU 2010-26), have been updated from those originally disclosed in the First Quarter 2012 10-Q filing to reflect the correction of errors identified related to the adoption of the amended guidance as well as indirect impact of the correction of errors associated with the restatement. | ||||||||||||||||||
Consolidated Statement of Cash Flows | |||||||||||||||||||
($ in millions) | For the period ended September 30, 2011 | ||||||||||||||||||
As previously | Correction | Adjusted | Retrospective | As restated | |||||||||||||||
Reported (1) | of errors (2) | prior to the | Adoption (3) | and amended | |||||||||||||||
retrospective | |||||||||||||||||||
adoption | |||||||||||||||||||
OPERATING ACTIVITIES: | |||||||||||||||||||
Net income (loss) | $ | 30.1 | $ | -58.9 | $ | -28.8 | $ | 17.7 | $ | -11.1 | |||||||||
Net realized investment gains | 7.0 | 11.0 | 18.0 | — | 18.0 | ||||||||||||||
Gain on debt repurchase | — | — | — | — | — | ||||||||||||||
Policy acquisition costs deferred | -104.3 | 38.6 | -65.7 | 1.1 | -64.6 | ||||||||||||||
Amortization of deferred policy acquisition costs | 172.0 | -15.6 | 156.4 | -29.4 | 127.0 | ||||||||||||||
Amortization and depreciation | 9.1 | — | 9.1 | — | 9.1 | ||||||||||||||
Interest credited | — | 89.4 | 89.4 | — | 89.4 | ||||||||||||||
Equity in earnings of | — | -48.2 | -48.2 | — | -48.2 | ||||||||||||||
limited partnerships and other investments | |||||||||||||||||||
Change in: | |||||||||||||||||||
Accrued investment income | -66.9 | -42.9 | -109.8 | — | -109.8 | ||||||||||||||
Deferred income taxes | 1.3 | -11.4 | -10.1 | 7.4 | -2.7 | ||||||||||||||
Receivables | -7.6 | 18.2 | 10.6 | — | 10.6 | ||||||||||||||
Policy liabilities and accruals | -175.9 | -190.8 | -366.7 | 3.2 | -363.5 | ||||||||||||||
Dividend obligations | — | 16.2 | 16.2 | — | 16.2 | ||||||||||||||
Impact of operating activities of | — | -2.7 | -2.7 | — | -2.7 | ||||||||||||||
consolidated investment entities, net | |||||||||||||||||||
Other operating activities, net | -10.4 | -23.8 | -34.2 | — | -34.2 | ||||||||||||||
Cash from (for) continuing operations | -145.6 | -220.9 | -366.5 | — | -366.5 | ||||||||||||||
Discontinued operations, net | 6.2 | -6.2 | — | — | — | ||||||||||||||
Cash used for operating activities | -139.4 | -227.1 | -366.5 | — | -366.5 | ||||||||||||||
INVESTING ACTIVITIES: | |||||||||||||||||||
Purchases of: | |||||||||||||||||||
Available-for-sale debt securities | -5,017.70 | 2,763.8 | -2,253.90 | — | -2,253.90 | ||||||||||||||
Available-for-sale equity securities | — | -5.7 | -5.7 | — | -5.7 | ||||||||||||||
Derivative instruments | — | -32.9 | -32.9 | — | -32.9 | ||||||||||||||
Fair value investments | — | -35 | -35 | — | -35 | ||||||||||||||
Other investments | — | -1.1 | -1.1 | — | -1.1 | ||||||||||||||
Sales, repayments and maturities of: | |||||||||||||||||||
Available-for-sale debt securities | 4,540.3 | -2,778.10 | 1,762.2 | — | 1,762.2 | ||||||||||||||
Available-for-sale equity securities | — | 1.9 | 1.9 | — | 1.9 | ||||||||||||||
Derivative instruments | — | 61.4 | 61.4 | — | 61.4 | ||||||||||||||
Fair value investments | — | 10.9 | 10.9 | — | 10.9 | ||||||||||||||
Other investments | — | 22.0 | 22.0 | — | 22.0 | ||||||||||||||
Contributions to limited partnerships | — | -67.1 | -67.1 | — | -67.1 | ||||||||||||||
and limited liability corporations | |||||||||||||||||||
Distributions from limited partnerships | — | 78.7 | 78.7 | — | 78.7 | ||||||||||||||
and limited liability corporations | |||||||||||||||||||
Policy loans, net | 34.1 | 67.7 | 101.8 | — | 101.8 | ||||||||||||||
Impact of investing activities of | — | — | — | — | — | ||||||||||||||
consolidated investment entities, net | |||||||||||||||||||
Other investing activities, net | — | -4.6 | -4.6 | — | -4.6 | ||||||||||||||
Premises and equipment additions | -3.4 | 3.4 | — | — | — | ||||||||||||||
Discontinued operations, net | -4.9 | 4.9 | — | — | — | ||||||||||||||
Cash provided by (used for) investing activities | -451.6 | 90.2 | -361.4 | — | -361.4 | ||||||||||||||
(Continued on next page) | |||||||||||||||||||
(Continued from previous page) | Consolidated Statement of Cash Flows | ||||||||||||||||||
($ in millions) | For the period ended September 30, 2011 | ||||||||||||||||||
As previously | Correction | Adjusted | Retrospective | As restated | |||||||||||||||
reported | of errors (1) | prior to the | Adoption (2) | and amended | |||||||||||||||
retrospective | |||||||||||||||||||
adoption | |||||||||||||||||||
FINANCING ACTIVITIES: | |||||||||||||||||||
Policyholder deposit fund deposits | 1,068.6 | 267.7 | 1,336.3 | — | 1,336.3 | ||||||||||||||
Policyholder deposit fund withdrawals | -450.7 | -469.7 | -920.4 | — | -920.4 | ||||||||||||||
Net transfers to/from separate accounts | — | 344.1 | 344.1 | — | 344.1 | ||||||||||||||
Impact of financing activities of | — | 1.3 | 1.3 | — | 1.3 | ||||||||||||||
consolidated investment entities, net | |||||||||||||||||||
Cash provided by financing activities | 617.9 | 143.4 | 761.3 | — | 761.3 | ||||||||||||||
Change in cash and cash equivalents | 26.9 | 6.5 | 33.4 | — | 33.4 | ||||||||||||||
Change in cash included in | — | 1.2 | 1.2 | — | 1.2 | ||||||||||||||
discontinued operations assets | |||||||||||||||||||
Cash and cash equivalents, beginning of period | 121.9 | -28.2 | 93.7 | — | 93.7 | ||||||||||||||
Cash and cash equivalents, end of period | $ | 148.8 | $ | -20.5 | $ | 128.3 | $ | — | $ | 128.3 | |||||||||
Supplemental Disclosure of Cash Flow Information | |||||||||||||||||||
Income taxes paid | $ | -6.2 | $ | — | $ | -6.2 | $ | — | $ | -6.2 | |||||||||
Interest expense on indebtedness paid | $ | -23 | $ | 2.6 | $ | -20.4 | $ | — | $ | -20.4 | |||||||||
Non-Cash Transactions During the Year | |||||||||||||||||||
Investment exchanges | $ | — | $ | 54.5 | $ | 54.5 | $ | — | $ | 54.5 | |||||||||
——————— | |||||||||||||||||||
-1 | Operating activities of the consolidated statement of cash flows for the period ended September 30, 2011 was previously reported using the direct method. Reported numbers herein reflect adjustment to indirect method currently presented. | ||||||||||||||||||
-2 | Adjustments related to the correction of errors reflect amounts prior to the retrospective adoption of amended guidance to ASC 944, Financial Services – Insurance (ASU 2010-26). See footnote 2 below for additional information regarding these amounts and the retrospective adoption. | ||||||||||||||||||
-3 | Adjustments related to the retrospective adoption of amended guidance to ASC 944, Financial Services – Insurance (ASU 2010-26), have been updated from those originally disclosed in the First Quarter 2012 10-Q filing to reflect the correction of errors identified related to the adoption of the amended guidance as well as indirect impact of the correction of errors associated with the restatement. | ||||||||||||||||||
Consolidated Statement of Cash Flows | |||||||||||||||||||
($ in millions) | For the period ended June 30, 2011 | ||||||||||||||||||
As previously | Correction | Adjusted | Retrospective | As restated | |||||||||||||||
reported | of errors (1) | prior to the | Adoption (2) | and amended | |||||||||||||||
retrospective | |||||||||||||||||||
adoption | |||||||||||||||||||
OPERATING ACTIVITIES: | |||||||||||||||||||
Net income (loss) | $ | -1.7 | $ | -28.9 | $ | -30.6 | $ | 11.5 | $ | -19.1 | |||||||||
Net realized investment gains (losses) | 13.1 | -5.2 | 7.9 | — | 7.9 | ||||||||||||||
Gain on debt repurchase | — | — | — | — | — | ||||||||||||||
Policy acquisition costs deferred | -63.9 | 26.7 | -37.2 | 0.7 | -36.5 | ||||||||||||||
Amortization of deferred policy acquisition costs | 114.5 | -0.7 | 113.8 | -21.9 | 91.9 | ||||||||||||||
Amortization and depreciation | 5.1 | — | 5.1 | — | 5.1 | ||||||||||||||
Interest credited | — | 59.6 | 59.6 | — | 59.6 | ||||||||||||||
Equity in earnings of | -23.3 | -12 | -35.3 | — | -35.3 | ||||||||||||||
limited partnerships and other investments | |||||||||||||||||||
Change in: | |||||||||||||||||||
Accrued investment income | -18.1 | -55 | -73.1 | — | -73.1 | ||||||||||||||
Deferred income taxes | — | -8.6 | -8.6 | 6.3 | -2.3 | ||||||||||||||
Receivables | -26.7 | 17.6 | -9.1 | — | -9.1 | ||||||||||||||
Policy liabilities and accruals | -78 | -176.3 | -254.3 | 3.4 | -250.9 | ||||||||||||||
Dividend obligations | — | 22.1 | 22.1 | — | 22.1 | ||||||||||||||
Impact of operating activities of | — | -3.8 | -3.8 | — | -3.8 | ||||||||||||||
consolidated investment entities, net | |||||||||||||||||||
Other operating activities, net | 13.2 | -17.8 | -4.6 | — | -4.6 | ||||||||||||||
Cash from (for) continuing operations | -65.8 | -182.3 | -248.1 | — | -248.1 | ||||||||||||||
Discontinued operations, net | 4.9 | -4.9 | — | — | — | ||||||||||||||
Cash used for operating activities | -60.9 | -187.2 | -248.1 | — | -248.1 | ||||||||||||||
INVESTING ACTIVITIES: | |||||||||||||||||||
Purchases of: | |||||||||||||||||||
Available-for-sale debt securities | -1,701.10 | 96.7 | -1,604.40 | — | -1,604.40 | ||||||||||||||
Available-for-sale equity securities | -5.7 | — | -5.7 | — | -5.7 | ||||||||||||||
Derivative instruments | -21.5 | -6.6 | -28.1 | — | -28.1 | ||||||||||||||
Fair value investments | — | -28.7 | -28.7 | — | -28.7 | ||||||||||||||
Other investments | -47.9 | 47.0 | -0.9 | — | -0.9 | ||||||||||||||
Sales, repayments and maturities of: | |||||||||||||||||||
Available-for-sale debt securities | 1,367.0 | -66.5 | 1,300.5 | — | 1,300.5 | ||||||||||||||
Available-for-sale equity securities | 1.7 | — | 1.7 | — | 1.7 | ||||||||||||||
Derivative instruments | 28.1 | 20.8 | 48.9 | — | 48.9 | ||||||||||||||
Fair value investments | 8.6 | 0.6 | 9.2 | — | 9.2 | ||||||||||||||
Other investments | 72.3 | -51.8 | 20.5 | — | 20.5 | ||||||||||||||
Contributions to limited partnerships | — | -43.6 | -43.6 | — | -43.6 | ||||||||||||||
and limited liability corporations | |||||||||||||||||||
Distributions from limited partnerships | — | 50.4 | 50.4 | — | 50.4 | ||||||||||||||
and limited liability corporations | |||||||||||||||||||
Policy loans, net | 21.5 | 53.0 | 74.5 | — | 74.5 | ||||||||||||||
Impact of investing activities of | — | — | — | — | — | ||||||||||||||
consolidated investment entities, net | |||||||||||||||||||
Other investing activities, net | — | -3.4 | -3.4 | — | -3.4 | ||||||||||||||
Proceeds from sale of subsidiary | — | — | — | — | — | ||||||||||||||
Premises and equipment additions | -2.2 | 2.2 | — | — | — | ||||||||||||||
Discontinued operations, net | -0.3 | 0.3 | — | — | — | ||||||||||||||
Cash provided by (used for) investing activities | -279.5 | 70.4 | -209.1 | — | -209.1 | ||||||||||||||
(Continued from previous page) | Consolidated Statement of Cash Flows | ||||||||||||||||||
($ in millions) | For the period ended June 30, 2011 | ||||||||||||||||||
As previously | Correction | Adjusted | Retrospective | As restated | |||||||||||||||
reported | of errors (1) | prior to the | Adoption (2) | and amended | |||||||||||||||
retrospective | |||||||||||||||||||
adoption | |||||||||||||||||||
FINANCING ACTIVITIES: | |||||||||||||||||||
Policyholder deposit fund deposits | 959.5 | -102.9 | 856.6 | — | 856.6 | ||||||||||||||
Policyholder deposit fund withdrawals | -605.9 | -31.5 | -637.4 | — | -637.4 | ||||||||||||||
Net transfers to/from separate accounts | — | 246.0 | 246.0 | — | 246.0 | ||||||||||||||
Impact of financing activities of | — | 1.3 | 1.3 | — | 1.3 | ||||||||||||||
consolidated investment entities, net | |||||||||||||||||||
Cash provided by financing activities | 353.6 | 112.9 | 466.5 | — | 466.5 | ||||||||||||||
Change in cash and cash equivalents | 13.2 | -3.9 | 9.3 | — | 9.3 | ||||||||||||||
Change in cash included in | — | 0.9 | 0.9 | — | 0.9 | ||||||||||||||
discontinued operations assets | |||||||||||||||||||
Cash and cash equivalents, beginning of period | 121.9 | -28.2 | 93.7 | — | 93.7 | ||||||||||||||
Cash and cash equivalents, end of period | $ | 135.1 | $ | -31.2 | $ | 103.9 | $ | — | $ | 103.9 | |||||||||
Supplemental Disclosure of Cash Flow Information | |||||||||||||||||||
Income taxes paid | $ | -6.9 | $ | — | $ | (6.9) | $ | — | $ | -6.9 | |||||||||
Interest expense on indebtedness paid | $ | -17.4 | $ | 1.7 | $ | -15.7 | $ | — | $ | -15.7 | |||||||||
Non-Cash Transactions During the Year | |||||||||||||||||||
Investment exchanges | $ | — | $ | 49.9 | $ | 49.9 | $ | — | $ | 49.9 | |||||||||
——————— | |||||||||||||||||||
-1 | Adjustments related to the correction of errors reflect amounts prior to the retrospective adoption of amended guidance to ASC 944, Financial Services – Insurance (ASU 2010-26). See footnote 2 below for additional information regarding these amounts and the retrospective adoption. | ||||||||||||||||||
-2 | Adjustments related to the retrospective adoption of amended guidance to ASC 944, Financial Services – Insurance (ASU 2010-26), have been updated from those originally disclosed in the First Quarter 2012 10-Q filing to reflect the correction of errors identified related to the adoption of the amended guidance as well as indirect impact of the correction of errors associated with the restatement. | ||||||||||||||||||
Consolidated Statement of Cash Flows | |||||||||||||||||||
($ in millions) | For the period ended March 31, 2011 | ||||||||||||||||||
As previously | Correction | Adjusted | Retrospective | As restated | |||||||||||||||
reported | of errors (1) | prior to the | Adoption (2) | and amended | |||||||||||||||
retrospective | |||||||||||||||||||
adoption | |||||||||||||||||||
OPERATING ACTIVITIES: | |||||||||||||||||||
Net income (loss) | $ | -6.1 | $ | -11.2 | $ | -17.3 | $ | 6.2 | $ | -11.1 | |||||||||
Net realized investment gains (losses) | 16.2 | -6.7 | 9.5 | — | 9.5 | ||||||||||||||
Gain on debt repurchase | — | — | — | — | — | ||||||||||||||
Policy acquisition costs deferred | -34.4 | 14.6 | -19.8 | 0.4 | -19.4 | ||||||||||||||
Amortization of deferred policy acquisition costs | 62.7 | 1.6 | 64.3 | -12.5 | 51.8 | ||||||||||||||
Amortization and depreciation | 2.6 | — | 2.6 | — | 2.6 | ||||||||||||||
Interest credited | — | 28.5 | 28.5 | — | 28.5 | ||||||||||||||
Equity in earnings of | -9.9 | -9.3 | -19.2 | — | -19.2 | ||||||||||||||
limited partnerships and other investments | |||||||||||||||||||
Change in: | |||||||||||||||||||
Accrued investment income | -6.9 | -27.2 | -34.1 | — | -34.1 | ||||||||||||||
Deferred income taxes | -2.1 | -3.9 | -6 | 3.4 | -2.6 | ||||||||||||||
Receivables | -26.2 | 18.9 | -7.3 | — | -7.3 | ||||||||||||||
Policy liabilities and accruals | -41.7 | -88.5 | -130.2 | 2.5 | -127.7 | ||||||||||||||
Dividend obligations | — | 16.2 | 16.2 | — | 16.2 | ||||||||||||||
Impact of operating activities of | — | -2.4 | -2.4 | — | -2.4 | ||||||||||||||
consolidated investment entities, net | |||||||||||||||||||
Other operating activities, net | 12.0 | -27.6 | -15.6 | — | -15.6 | ||||||||||||||
Cash from (for) continuing operations | -33.8 | -97 | -130.8 | — | -130.8 | ||||||||||||||
Discontinued operations, net | 1.3 | -1.3 | — | — | — | ||||||||||||||
Cash used for operating activities | -32.5 | -98.3 | -130.8 | — | -130.8 | ||||||||||||||
INVESTING ACTIVITIES: | |||||||||||||||||||
Purchases of: | |||||||||||||||||||
Available-for-sale debt securities | -785.4 | 62.3 | -723.1 | — | -723.1 | ||||||||||||||
Available-for-sale equity securities | -5.2 | — | -5.2 | — | -5.2 | ||||||||||||||
Derivative instruments | -25.2 | 4.6 | -20.6 | — | -20.6 | ||||||||||||||
Fair value investments | — | -21.9 | -21.9 | — | -21.9 | ||||||||||||||
Other investments | -19.1 | 18.6 | -0.5 | — | -0.5 | ||||||||||||||
Sales, repayments and maturities of: | |||||||||||||||||||
Available-for-sale debt securities | 589.4 | -40.9 | 548.5 | — | 548.5 | ||||||||||||||
Available-for-sale equity securities | 1.2 | — | 1.2 | — | 1.2 | ||||||||||||||
Derivative instruments | 25.2 | 5.1 | 30.3 | — | 30.3 | ||||||||||||||
Fair value investments | 8.6 | 0.2 | 8.8 | — | 8.8 | ||||||||||||||
Other investments | 45.6 | -26.2 | 19.4 | — | 19.4 | ||||||||||||||
Contributions to limited partnerships | — | -17.2 | -17.2 | — | -17.2 | ||||||||||||||
and limited liability corporations | |||||||||||||||||||
Distributions from limited partnerships | — | 26 | 26 | — | 26.0 | ||||||||||||||
and limited liability corporations | |||||||||||||||||||
Policy loans, net | 12.6 | 23.9 | 36.5 | — | 36.5 | ||||||||||||||
Impact of investing activities of | — | — | — | — | — | ||||||||||||||
consolidated investment entities, net | |||||||||||||||||||
Other investing activities, net | — | -2.2 | -2.2 | — | -2.2 | ||||||||||||||
Premises and equipment additions | -1 | 1.0 | — | — | — | ||||||||||||||
Discontinued operations, net | 1.7 | -1.7 | — | — | — | ||||||||||||||
Cash provided by (used for) investing activities | -151.6 | 31.6 | -120 | — | -120 | ||||||||||||||
(Continued from previous page) | Consolidated Statement of Cash Flows | ||||||||||||||||||
($ in millions) | For the period ended March 31, 2011 | ||||||||||||||||||
As previously | Correction | Adjusted | Retrospective | As restated | |||||||||||||||
reported | of errors (1) | prior to the | Adoption (2) | and amended | |||||||||||||||
retrospective | |||||||||||||||||||
adoption | |||||||||||||||||||
FINANCING ACTIVITIES: | |||||||||||||||||||
Policyholder deposit fund deposits | 334.6 | 88.9 | 423.5 | — | 423.5 | ||||||||||||||
Policyholder deposit fund withdrawals | -165.1 | -165.4 | -330.5 | — | -330.5 | ||||||||||||||
Net transfers to/from separate accounts | — | 133.0 | 133.0 | — | 133.0 | ||||||||||||||
Impact of financing activities of | — | 0.1 | 0.1 | — | 0.1 | ||||||||||||||
consolidated investment entities, net | |||||||||||||||||||
Other financing activities, net | — | — | — | — | — | ||||||||||||||
Discontinued operations, net | — | — | — | — | — | ||||||||||||||
Cash provided by financing activities | 169.5 | 56.6 | 226.1 | — | 226.1 | ||||||||||||||
Change in cash and cash equivalents | -14.6 | -10.1 | -24.7 | — | -24.7 | ||||||||||||||
Change in cash included in | — | 0.8 | 0.8 | — | 0.8 | ||||||||||||||
discontinued operations assets | |||||||||||||||||||
Cash and cash equivalents, beginning of period | 121.9 | -28.2 | 93.7 | — | 93.7 | ||||||||||||||
Cash and cash equivalents, end of period | $ | 107.3 | $ | -37.5 | $ | 69.8 | $ | — | $ | 69.8 | |||||||||
Supplemental Disclosure of Cash Flow Information | |||||||||||||||||||
Income taxes paid | $ | -0.2 | $ | — | $ | -0.2 | $ | — | $ | -0.2 | |||||||||
Interest expense on indebtedness paid | $ | -5.6 | $ | 0.9 | $ | -4.7 | $ | — | $ | -4.7 | |||||||||
Non-Cash Transactions During the Year | |||||||||||||||||||
Investment exchanges | $ | — | $ | 24.5 | $ | 24.5 | $ | — | $ | 24.5 | |||||||||
——————— | |||||||||||||||||||
-1 | Adjustments related to the correction of errors reflect amounts prior to the retrospective adoption of amended guidance to ASC 944, Financial Services – Insurance (ASU 2010-26). See footnote 2 below for additional information regarding these amounts and the retrospective adoption. | ||||||||||||||||||
-2 | Adjustments related to the retrospective adoption of amended guidance to ASC 944, Financial Services – Insurance (ASU 2010-26), have been updated from those originally disclosed in the First Quarter 2012 10-Q filing to reflect the correction of errors identified related to the adoption of the amended guidance as well as indirect impact of the correction of errors associated with the restatement. | ||||||||||||||||||
28_Subsequent_Events
28. Subsequent Events | 12 Months Ended |
Dec. 31, 2012 | |
Subsequent Events [Abstract] | ' |
28. Subsequent Events | ' |
Bond Consent Solicitations | |
On December 12, 2012, we commenced a solicitation (“Consent Solicitation”) of bondholders (“Holders”) holding our 7.45% Quarterly Interest Bonds due 2032 (CUSIP 71902E 20 8) (NYSE: PFX) (“Bonds”) seeking a consent to amend the indenture governing the bonds (“Indenture”) and to provide a related waiver to extend the date for providing our Third Quarter 2012 Quarterly Report on Form 10-Q (“Third Quarter 2012 Form 10-Q”) to the bond trustee (“Trustee”) to March 31, 2013. | |
On January 16, 2013, we announced the success of our Consent Solicitation to extend the date for providing our Third Quarter 2012 Form 10-Q to the Trustee to March 31, 2013. The consents received represented approximately 65% of the outstanding principal amount. | |
On January 18, 2013, the Company and the Trustee executed a first supplemental indenture (“First Supplemental Indenture”) amending the Indenture effective as of such date. The amendments provided that until 5:30 p.m., New York City time on March 31, 2013, any failure by us to comply with the sections of the Indenture relating to the filing of the Third Quarter 2012 Form 10-Q will not constitute a default under the Indenture and that our filing of such report on a delayed basis on or prior to such time and date will satisfy our obligations under the reporting covenant in the Indenture. Pursuant to the waiver, any and all defaults and events of default occurring under the Indenture prior to the effectiveness of the First Supplemental Indenture are waived. | |
On April 24, 2013, we commenced a second solicitation (“Second Consent Solicitation”) of Holders of Bonds to further amend the Indenture and provide a related waiver to extend the date for providing the Trustee with the Third Quarter 2012 Form 10-Q, our 2012 Annual Report on Form 10-K (the “2012 Form 10-K”) and our Quarterly Reports on Form 10-Q for the first, second and third quarters of 2013 (the “2013 Forms 10-Q”) to December 31, 2013. | |
On May 22, 2013, we announced the success of our Second Consent Solicitation. The consents received represented approximately 60% of the outstanding principal amount. | |
On May 23, 2013, the Company and the Trustee executed a second supplemental indenture (“Second Supplemental Indenture”) amending the Indenture effective as of such date. The amendments provided that until 5:30 p.m., New York City time on December 31, 2013, any failure by us to comply with the sections of the Indenture relating to the filing of the Third Quarter 2012 Form 10-Q, the 2012 Form 10-K and the 2013 Forms 10-Q will not constitute defaults under the Indenture and that our filing of such reports on a delayed basis on or prior to such time and date will satisfy our obligations under the reporting covenant in the Indenture. Pursuant to the waiver, any and all defaults and events of default occurring under the Indenture prior to the effectiveness of the Second Supplemental Indenture are waived. | |
On January 23, 2014, we commenced a third solicitation (“Third Consent Solicitation”) of Holders of Bonds to further amend the Indenture and provide a related waiver to extend the date for providing the Trustee with the 2012 Quarterly Report on Form 10-Q, the 2012 Form 10-K, the 2013 Forms 10-Q, our 2013 Annual Report on Form 10-K (the “2013 Form 10-K”) and our Quarterly Reports on Form 10-Q for the first, second and third quarters of 2014 (the “2014 Forms 10-Q”) to March 16, 2015. | |
On February 20, 2014, we announced the success of our Third Consent Solicitation. The consents received represented approximately 72% of the outstanding principal amount. | |
On February 21, 2014, the Company and the Trustee executed a third supplemental indenture (the “Third Supplemental Indenture”) amending the Indenture effective as of such date. The amendments provided that until 5:30 p.m., New York City time on March 16, 2015, any failure by us to comply with the sections of the Indenture relating to the filing of the Third Quarter 2012 Form 10-Q, the 2012 Form 10-K, the 2013 Forms 10-Q, the 2013 Form 10-K and the 2014 Forms 10-Q will not constitute defaults under the Indenture and that our filing of such reports on a delayed basis on or prior to such time and date will satisfy our obligations under the reporting covenant in the Indenture. Pursuant to the waiver, any and all defaults and events of default occurring under the Indenture prior to the effectiveness of the Third Supplemental Indenture are waived. | |
Dividends | |
On March 11, 2013, Phoenix Life paid a $20 million dividend to Phoenix. | |
On July 24, 2013, Phoenix Life paid a $29.2 million dividend to Phoenix. | |
On December 20, 2013, Phoenix Life paid a $25.0 million dividend to Phoenix. | |
On March 20, 2014, Phoenix Life paid a $14.6.0 million dividend to Phoenix. | |
Late Filings | |
On May 10, 2013, we filed a Notification of Late Filing on Form 12b-25 with the SEC disclosing that we would be unable to timely file our First Quarter 2013 Quarterly Report on Form 10-Q with the SEC. | |
On May 31, 2013, we filed a Current Report on Form 8-K with the SEC disclosing that Phoenix Life had received from the New York Department of Financial Services, its domiciliary insurance regulator, a 60-day extension for submission of its audited financial statements prepared in accordance with Statements of Statutory Accounting Principles (“Statutory”) for the year ended December 31, 2012 and the subsequent filing of management’s report on internal control over financial reporting for Phoenix Life. This May 31, 2013 Form 8-K disclosed that Phoenix Life intends to seek further extensions if required. | |
On June 28, 2013, we filed a Current Report on Form 8-K with the SEC disclosing that we determined that the completion of the Phoenix Life 2012 audited Statutory financial statements is dependent on substantial completion of both the Company’s Restatement and the Phoenix Life U.S. GAAP restatement, the evaluation of internal control over financial reporting and the related audit processes, none of which was expected to be completed by the date upon which Phoenix Life’s then-current extension for filing the audited Statutory financial statements with Phoenix Life’s domiciliary state insurance regulator was due to expire. | |
On August 9, 2013, we filed a Notification of Late Filing on Form 12b-25 with the SEC disclosing that we would be unable to timely file our second quarter 2013 Quarterly Report on Form 10-Q with the SEC. | |
On November 8, 2013, we filed a Notification of Late Filing on Form 12b-25 with the SEC disclosing that we would be unable to timely file our Third Quarter 2013 Quarterly Report on Form 10-Q with the SEC. | |
On February 28, 2014, we filed a Notification of Late Filing on Form 12b-25 with the SEC disclosing that we would be unable to timely file our 2013 Annual Report on Form 10-K with the SEC. | |
NYSE Actions | |
On April 5, 2013, we filed a Current Report on Form 8-K with the SEC announcing that on April 4, 2013 we received from NYSE Regulation, Inc. a notice of failure to satisfy a continued listing rule or standard and related monitoring. The notice informed us that, as a result of our failure to timely file our 2012 Form 10-K, we are subject to the procedures specified in Section 802.01E (SEC Annual Report Timely Filing Criteria) of the NYSE Listed Company Manual. Under the Section 802.01E procedures, the NYSE will monitor the status of the filing of the 2012 Form 10-K and related public disclosures for up to a six-month period from its due date. If the Company has not filed the 2012 Form 10-K within six months from the filing due date, the NYSE may, in its sole discretion, allow the Company’s common stock to trade for up to an additional six months pending the filing of the 2012 Form 10-K prior to commencing suspension or delisting procedures, depending on the Company’s specific circumstances. | |
On September 27, 2013, we filed a Current Report on Form 8-K with the SEC disclosing that we had recently made a request to the NYSE that our shares be permitted to continue to trade on the NYSE while we completed our restatement of financial statements. On September 27, 2013 via letter dated September 26, 2013, we received an extension for continued listing and trading of the Company’s common stock on the NYSE. The extension, subject to ongoing reassessment by the NYSE, provides the Company with an additional trading period until January 31, 2014, during which we can file our 2012 Form 10-K with the SEC. If the 2012 Form 10-K is not filed by January 31, 2014, the NYSE may grant an additional extension until April 3, 2014. During the extension period, trading of the Company’s shares on the NYSE remains unaffected. | |
On January 17, 2014 we filed a Current Report on Form 8-K with the SEC disclosing that we made an additional extension request to the NYSE that our shares be permitted to continue to trade until April 3, 2014. | |
On January 28, 2014, we filed a Current Report on Form 8-K with the SEC disclosing that we received an extension for continued listing and trading of the Company’s common stock on the NYSE. The extension, subject to reassessment on an ongoing basis by the NYSE, provides the Company with an additional trading period until April 3, 2014. The letter further provided that in the event that the Company does not file its 2012 Form 10-K by April 3, 2014, the NYSE will move forward with the initiation of suspension and delisting procedures. | |
Rating Agency Actions | |
On January 16, 2013, Standard & Poor’s Ratings Services affirmed our “B-” long-term counterparty credit rating. They also affirmed our “BB-” financial strength ratings for Phoenix Life and PHLVIC. They also removed all ratings from CreditWatch Negative and changed their outlook to stable. | |
On March 8, 2013, Standard & Poor’s Rating Services placed our “B-” long-term counterparty credit rating and our “BB-” financial strength ratings for Phoenix Life and PHLVIC on CreditWatch with negative implications. | |
On March 20, 2013, Moody’s Investors Service downgraded our senior debt rating to “Caa1” from “B3” and kept the rating under review for downgrade. They also maintained their review for downgrade for our “Ba2” financial strength ratings for Phoenix Life and PHLVIC and the “B1” debt rating of Phoenix Life’s surplus notes. | |
On April 9, 2013, A.M. Best Co. (“A.M. Best”) downgraded our issuer credit rating (“ICR”) to “b+” from “bb-” and debt rating to “b+” from “bb-” on our outstanding $253 million 7.45% senior unsecured notes. The ratings for our life insurance subsidiaries were maintained and all ratings were kept under review with negative implications. | |
On May 22, 2013, Standard & Poor’s Rating Services affirmed our “B-” long-term counterparty credit rating. At the same time, they affirmed our “BB-” financial strength ratings for Phoenix Life and PHLVIC. They removed all the ratings from CreditWatch with negative implications and assigned negative outlooks to all ratings. | |
On August 28, 2013, A.M. Best downgraded our financial strength ratings (“A.M. Best FSRs”) to “B” (Fair) from “B+” (Good) and ICRs to “bb+” from “bbb-” of our subsidiaries. Concurrently, A.M. Best has downgraded our ICR and senior debt rating to “b” from “b+”. Additionally, A.M. Best has downgraded our debt rating to “bb-” from “bb” of our existing surplus notes of Phoenix Life. The A.M. Best FSRs were removed from under review with negative implications and assigned a stable outlook, and the ICRs were removed from under review with negative implications and assigned a negative outlook. | |
On January 14, 2014, Moody’s Investor Services withdrew all ratings of The Phoenix Companies, Inc. including the Caa1 senior debt rating of Phoenix and the Ba2 financial strength rating of the company’s life insurance subsidiaries and the B1 (hyb) debt rating of Phoenix Life’s surplus notes. | |
Statutory Results | |
Our insurance subsidiaries are required to file, with state regulatory authorities, annual statements prepared on an accounting basis prescribed or permitted by such authorities. These annual statements for the year ended December 31, 2013 were filed on a timely basis on February 28, 2014. | |
SEC Cease-and-Desist Order | |
On February 12, 2014, the Company and PHLVIC submitted an Offer of Settlement with the SEC pursuant to which the Company and PHLVIC consented to the issuance of the form of an Order Instituting Cease-and-Desist Proceedings Pursuant to Section 21C of the Securities Exchange Act of 1934, Making Findings, and Imposing a Cease-and-Desist Order (the “Order”). The Order was approved by the SEC on March 21, 2014. Pursuant to the Order, the Company and PHLVIC have been directed to cease and desist from committing or causing any violations and any future violations of Section 13(a) of the Exchange Act and Rules 13a-1, 13a-13 thereunder and Section 15(d) of the Exchange Act and Rules 15d-1 and 15d-13 thereunder. In addition, the Company and PHLVIC agreed to perform certain undertakings, including for the Company to file its delayed Third Quarter 2012 Form 10-Q by no later than April 15, 2014 and its 2013 Form 10-K by no later than June 4, 2014. Also pursuant to the undertakings, the Company would file its 2013 Forms 10-Q after the filing of its 2013 Form 10-K. The Company intends to become timely with its periodic filings under the Exchange Act with the filing of its Quarterly Report on Form 10-Q for the period ending June 30, 2014. Finally, the Company and PHLVIC paid a civil monetary penalty in the amount of $375,000 to the United States Treasury following the entry of the Order. | |
Other | |
On July 12, 2013, we announced the retirement of Thomas S. Johnson, Chairman, from the Board. At the same time, we announced the election of John H. Forsgren, as chairman of the Board. |
3_Basis_of_Presentation_and_Si1
3. Basis of Presentation and Significant Accounting Policies (Policy) | 12 Months Ended | ||||
Dec. 31, 2012 | |||||
Accounting Policies [Abstract] | ' | ||||
Use of estimates | ' | ||||
In preparing these financial statements in conformity with U.S. GAAP, we are required to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Significant estimates and assumptions are made in the determination of EGPs and estimated gross margins (“EGMs”) used in the valuation and amortization of assets and liabilities associated with universal life and annuity contracts; policyholder liabilities and accruals; valuation of investments in debt and equity securities; limited partnerships and other investments; valuation of deferred tax assets; pension and other post-employment benefits liabilities; and accruals for contingent liabilities. Actual results could differ from these estimates. | |||||
Adoption of new accounting standards | ' | ||||
Amendments to the Presentation of Comprehensive Income | |||||
In June 2011, the Financial Accounting Standards Board (the “FASB”) issued amended guidance to ASC 220, Comprehensive Income, with respect to the presentation of comprehensive income as part of the effort to establish common requirements between U.S. GAAP and International Financial Reporting Standards (“IFRS”). This amended guidance requires entities to present all non-owner changes in stockholders’ equity either in a single continuous statement of comprehensive income or in two separate but consecutive statements. The amendments do not affect which components of comprehensive income are recognized in net income or comprehensive income, or when an item of other comprehensive income must be classified to net income. The computation and presentation of earnings per share also does not change. This guidance was adopted in the first quarter of 2012. Other than the required changes in presentation and the additional disclosures, adoption of this guidance did not have a material effect on our consolidated financial statements. | |||||
Amendments to Fair Value Measurement and Disclosure Requirements | |||||
In May 2011, the FASB issued amended guidance to ASC 820, Fair Value Measurement, with respect to measuring fair value and related disclosures as part of the effort to establish common requirements in accordance with U.S. GAAP and IFRS. The amended guidance clarifies that the concept of highest and best use should only be used in the valuation of non-financial assets, specifies how to apply fair value measurements to instruments classified in stockholders’ equity and requires that premiums or discounts be applied consistent with what market participants would use absent Level 1 inputs. The amendment also explicitly requires additional disclosures related to the valuation of assets categorized as Level 3 within the fair value hierarchy. Additional disclosures include quantitative information about unobservable inputs, the sensitivity of fair value measurement to changes in unobservable outputs and information on the valuation process used. This guidance was adopted in the first quarter of 2012. Disclosures in Note 14 reflect the prospective adoption of this guidance. Other than additional disclosures, adoption of this guidance did not have a material effect on our consolidated financial statements. | |||||
Revision for the Retrospective Adoption of Amended Accounting Guidance | |||||
In October 2010, the FASB issued amended guidance to ASC 944, Financial Services – Insurance, to address the diversity in practice for accounting for costs associated with acquiring or renewing insurance contracts. The amendment clarifies the definition of acquisition costs (i.e., costs which qualify for deferral) to include only incremental direct costs that result directly from, and are essential to, a contract and would not have been incurred by the insurance entity had the contract transaction not occurred. Therefore, only costs related to successful efforts of acquiring a new, or renewal, contract should be deferred. This guidance was retrospectively adopted on January 1, 2012 and such retrospective adoption results in amendments to previously reported balances as shown in Note 2 as if the guidance was applied at the inception of all policies in force. The cumulative effect of retrospective adoption reduced deferred policy acquisition costs and beginning stockholders’ equity by $166.5 million as of January 1, 2012. In any period, the adoption resulted in a decrease in amortization of policy acquisition costs due to the reduced deferred policy acquisition cost asset. | |||||
Accounting standards not yet adopted | ' | ||||
Reporting Amounts Reclassified Out of Accumulated Other Comprehensive Income | |||||
In February 2013, the FASB issued updated guidance regarding the presentation of comprehensive income (ASU 2013-02). Under the guidance, an entity would separately present information about significant items reclassified out of accumulated other comprehensive income by component as well as changes in accumulated other comprehensive income balances by component in either the financial statements or the notes to the financial statements. The guidance does not change the items that are reported in other comprehensive income. The guidance does not change when an item of other comprehensive income must be reclassified to net income and does not amend any existing requirements for reporting net income or other comprehensive income. The guidance is effective for the first interim or annual reporting period beginning after December 15, 2012 and should be applied prospectively. This guidance is not expected to impact the Company’s consolidated statements of financial position or cash flows. The Company is currently assessing the impact of this guidance on the Company’s consolidated statements of operations and equity and the notes to consolidated financial statements. | |||||
Disclosures about Offsetting Assets and Liabilities | |||||
In December 2011, the FASB issued amended guidance to ASC 210, Balance Sheet, with respect to disclosure of offsetting assets and liabilities as part of the effort to establish common requirements in accordance with U.S. GAAP and IFRS. This amended guidance requires the disclosure of both gross information and net information about both financial instruments and derivative instruments eligible for offset in our consolidated balance sheets and instruments and transactions subject to an agreement similar to a master netting arrangement. This guidance is effective for periods beginning on or after January 1, 2013, with respective disclosures required retrospectively for all comparative periods presented. The adoption of this guidance effective January 1, 2013 is not expected to have a material effect on our consolidated financial statements. | |||||
Investments | ' | ||||
Debt and Equity Securities | |||||
Our debt and equity securities classified as available-for-sale are reported on our consolidated balance sheets at fair value. Fair value is based on quoted market price, where available. When quoted market prices are not available, we estimate fair value by discounting debt security cash flows to reflect interest rates currently being offered on similar terms to borrowers of similar credit quality (private placement debt securities), by quoted market prices of comparable instruments (untraded public debt securities) and by independent pricing sources or internally developed pricing models. We recognize unrealized gains and losses on investments in debt and equity securities that we classify as available-for-sale. We report these unrealized investment gains and losses as a component of OCI, net of the relevant policyholder obligations, applicable deferred policy acquisition costs and applicable deferred income taxes. Realized investment gains and losses are recognized on a first in first out basis. | |||||
Limited Partnerships and Other Investments | |||||
Limited partnerships, infrastructure funds, hedge funds and joint venture interests in which we do not have voting control or power to direct activities are recorded using the equity method of accounting. These investments include private equity, mezzanine funds, infrastructure funds, hedge funds of funds and direct equity investments. The equity method of accounting requires that the investment be initially recorded at cost and the carrying amount of the investment subsequently adjusted to recognize our share of the earnings or losses. We record our equity in the earnings in net investment income using the most recent financial information received from the partnerships. Recognition of net investment income is generally on a three-month delay due to the timing of the related financial statements. The contributions to and distributions from limited partnerships are classified as investing activities within the statement of cash flows. | |||||
Other investments also include leveraged lease investments which represent the net amount of the estimated residual value of the lease assets, rental receivables and unearned and deferred income to be allocated over the lease term. It further includes investments in life settlement contracts accounted for under the investment method under which the Company recognizes its initial investment in life settlement contracts at the transaction price plus all initial direct external costs. Continuing costs to keep the policy in force comprising mainly life insurance premiums, increase the carrying value of the investment while income on individual life settlement contracts are recognized when the insured dies, at an amount equal to the excess of the contract proceeds over the carrying amount of the contract at that time. Contracts are reviewed each quarter for indications that the expected future proceeds from the contract would not be sufficient to recover estimated future carrying amount of the contract (current carrying amount for the contract plus anticipated undiscounted future premiums and other capitalizable future costs.) Any such contracts identified are written down to estimated fair value. | |||||
The Company routinely evaluates these investments for impairments. For equity method investees, the Company considers financial and other information provided by the investee, other known information and inherent risks in the underlying investments, as well as future capital commitments, in determining whether an impairment has occurred. The Company considers its cost method investments for other-than-temporary impairments (“OTTI”) when the carrying value of such investments exceeds the net asset value (“NAV”). The Company takes into consideration the severity and duration of this excess when determining whether the cost method investment is other-than-temporarily impaired. When an OTTI has occurred, the impairment loss is recorded within net investment gains (losses). | |||||
Loans are occasionally restructured in a troubled debt restructuring. These restructurings generally include one or more of the following: full or partial payoffs outside of the original contract terms; changes to interest rates; extensions of maturity; or additions or modifications to covenants. When restructurings occur, they are evaluated individually to determine whether the restructuring or modification constitutes a “troubled debt restructuring” as defined by authoritative accounting guidance. In a troubled debt restructuring where the Company receives assets in full or partial satisfaction of the debt, any specific valuation allowance is reversed and a direct write down of the loan is recorded for the amount of the allowance and any additional loss, net of recoveries, or any gain is recorded for the difference between the fair value of the assets received and the recorded investment in the loan. Any remaining loan is evaluated prospectively for impairment based on the credit review process noted above. When a loan is restructured in a troubled debt restructuring, the impairment of the loan is remeasured using the modified terms and the loan’s original effective yield and the allowance for loss is adjusted accordingly. Subsequent to the modification, income is recognized prospectively based on the modified terms of the loans in accordance with the income recognition policy noted above. | |||||
The consolidated financial statements include investments in limited partnerships qualifying as variable interest entities (“VIEs”) which the Company is required to consolidate. For certain VIE interests the entity is considered the primary beneficiary, since the Company has both the power to direct the activities of a VIE that most significantly impact the entity’s economic performance and the obligation to absorb losses, or right to receive benefits, that could potentially be significant to the VIE. These VIEs are consolidated. | |||||
See Note 9 to these financial statements for additional information regarding VIEs. | |||||
Policy Loans | |||||
Policy loans are carried at their unpaid principal balances and are collateralized by the cash values of the related policies. The majority of cash values eligible for policy loans are at variable interest rates that are reset annually on the policy anniversary. | |||||
Fair Value Instruments | |||||
Debt securities held at fair value include fixed-maturity securities held for which changes in fair values are recorded in earnings. The securities held at fair value are designated as trading securities, as well as those debt securities for which we have elected the fair value option (“FVO”) and certain available-for-sale structured securities held at fair value. The changes in fair value and any interest income of these securities are reflected in earnings as part of “net investment income.” Refer to “Note 14: Fair Value of Financial Instruments” to these consolidated financial statements for additional disclosures related to these securities. | |||||
Derivative Instruments | |||||
We recognize derivative instruments on the consolidated balance sheets at fair value. The derivative contracts are reported as assets in derivative instruments or liabilities in other liabilities on the consolidated balance sheets, excluding embedded derivatives. Embedded derivatives, as discussed below, are recorded on the consolidated balance sheets bifurcated from the associated host contract. | |||||
The Company economically hedges variability of cash flows to be received or paid related to certain recognized assets and/or liabilities. All changes in the fair value of derivatives, including net receipts and payments, are included in net realized investment gains and losses without consideration of changes in the fair value of the economically associated assets or liabilities. We do not designate the purchased derivatives related to living benefits or index credits as hedges for accounting purposes. | |||||
For derivatives that do not qualify for hedge accounting, all changes in its fair value, including net receipts and payments, are included in net realized investment gains and losses without consideration of changes in the fair value of the economically associated assets or liabilities. Our derivatives do not qualify for hedge accounting. | |||||
Net investment income | ' | ||||
For asset-backed and fixed maturity debt securities, we recognize interest income using a constant effective yield based on estimated cash flow timing and economic lives of the securities. For high credit quality asset-backed securities, effective yields are recalculated based on actual payments received and updated prepayment expectations, and the amortized cost is adjusted to the amount that would have existed had the new effective yield been applied since acquisition with a corresponding charge or credit to net investment income. For asset-backed securities that are not high credit quality, effective yields are recalculated and adjusted prospectively based on changes in expected undiscounted future cash flows. For certain credit impaired asset-backed securities, effective yields are recalculated and adjusted prospectively to reflect significant increases in undiscounted expected future cash flows and changes in the contractual benchmark interest rate on variable rate securities. Any prepayment fees on fixed maturities and mortgage loans are recorded when earned in net investment income. We record the net income from investments in partnerships and joint ventures in net investment income. | |||||
Other-than-temporary impairments on available-for-sale securities | ' | ||||
We recognize realized investment losses when declines in fair value of debt and equity securities are considered to be an OTTI. | |||||
For debt securities, the other-than-temporarily impaired amount is separated into the amount related to a credit loss and is reported as net realized investment losses included in earnings and any amounts related to other factors are recognized in OCI. The credit loss component represents the difference between the amortized cost of the security and the net present value of its projected future cash flows discounted at the effective interest rate implicit in the debt security prior to impairment. Any remaining difference between the fair value and amortized cost is recognized in AOCI. Subsequent to the recognition of an OTTI, the impaired security is accounted for as if it had been purchased on the date of impairment at an amortized cost basis equal to the previous amortized cost basis less the OTTI recognized in earnings. We will continue to estimate the present value of future expected cash flows and, if significantly greater than the new cost basis, we will accrete the difference as investment income on a prospective basis once the Company has determined that the interest income is likely to be collected. | |||||
In evaluating whether a decline in value is other-than-temporary, we consider several factors including, but not limited to, the following: | |||||
· | |||||
the extent and the duration of the decline; | |||||
· | |||||
the reasons for the decline in value (credit event, interest related or market fluctuations); | |||||
· | |||||
our intent to sell the security, or whether it is more likely than not that we will be required to sell it before recovery; and | |||||
· | |||||
the financial condition and near term prospects of the issuer. | |||||
A debt security impairment is deemed other-than-temporary if: | |||||
we either intend to sell the security, or it is more likely than not that we will be required to sell the security before recovery; or | |||||
· | |||||
it is probable we will be unable to collect cash flows sufficient to recover the amortized cost basis of the security. | |||||
An equity security impairment is deemed other-than-temporary if: | |||||
· | |||||
the security has traded at a significant discount to cost for an extended period of time; or | |||||
· | |||||
we determined we may not realize the full recovery on our investment. | |||||
Equity securities are determined to be other-than-temporarily impaired based on management judgment and the consideration of the issuer’s financial condition along with other relevant facts and circumstances. Those securities which have been in a continuous decline for over a twelve month periods are generally considered impaired. Additionally, declines in value that are severe and rapid are considered for reasonability of whether the impairment would be temporary. | |||||
Impairments due to deterioration in credit that result in a conclusion that the present value of cash flows expected to be collected will not be sufficient to recover the amortized cost basis of the security are considered other-than-temporary. Other declines in fair value (for example, due to interest rate changes, sector credit rating changes or company-specific rating changes) that result in a conclusion that the present value of cash flows expected to be collected will not be sufficient to recover the amortized cost basis of the security may also result in a conclusion that an OTTI has occurred. | |||||
On a quarterly basis, we evaluate securities in an unrealized loss position for potential recognition of an OTTI. In addition, we maintain a watch list of securities in default, near default or otherwise considered by our investment professionals as being distressed, potentially distressed or requiring a heightened level of scrutiny. We also identify securities whose fair value has been below amortized cost on a continuous basis for zero to six months, six months to 12 months and greater than 12 months. | |||||
We employ a comprehensive process to determine whether or not a security in an unrealized loss position is other-than-temporarily impaired. This assessment is done on a security-by-security basis and involves significant management judgment. The assessment of whether impairments have occurred is based on management’s evaluation of the underlying reasons for the decline in estimated fair value. The Company’s review of its fixed maturity and equity securities for impairments includes an analysis of the total gross unrealized losses by severity and/or age of the gross unrealized loss. An extended and severe unrealized loss position on a fixed maturity security may not have any impact on the ability of the issuer to service all scheduled interest and principal payments and the Company’s evaluation of recoverability of all contractual cash flows or the ability to recover an amount at least equal to its amortized cost based on the present value of the expected future cash flows to be collected. In contrast, for certain equity securities, greater weight and consideration are given by the Company to a decline in market value and the likelihood such market value decline will recover. | |||||
Specifically for structured securities, to determine whether a collateralized security is impaired, we obtain underlying data from the security’s trustee and analyze it for performance trends. A security-specific stress analysis is performed using the most recent trustee information. This analysis forms the basis for our determination of whether the security will pay in accordance with the contractual cash flows. | |||||
The closed block policyholder dividend obligation, applicable deferred policy acquisition costs and applicable income taxes, which offset realized investment gains and losses and OTTIs, are each reported separately as components of net income. | |||||
Cash and cash equivalents | ' | ||||
Cash and cash equivalents include cash on hand, amounts due from banks, money market instruments and other debt instruments with original maturities of three months or less. Negative cash balances are reclassified to other liabilities. | |||||
Deferred policy acquisition costs | ' | ||||
We defer incremental direct costs related to the successful sale of new or renewal contracts. Incremental direct costs are those costs that result directly from and are essential to the sale of a contract. These costs include principally commissions, underwriting and policy issue expenses, all of which vary with and are primarily related to production of new business. | |||||
We amortize deferred policy acquisition costs based on the related policy’s classification. For individual participating life insurance policies, deferred policy acquisition costs are amortized in proportion to EGMs arising principally from investment results, mortality, dividends to policyholders and expense margins. For universal life, variable universal life and deferred annuities, deferred policy acquisition costs are amortized in proportion to EGPs as discussed more fully below. EGPs are also used to amortize other assets and liabilities in the Company’s consolidated balance sheets, such as sales inducement assets (“SIA”) and unearned revenue reserves (“URR”). Components of EGPs are used to determine reserves for universal life and fixed, indexed and variable annuity contracts with death and other insurance benefits such as guaranteed minimum death and guaranteed minimum income benefits. Both EGMs and EGPs are based on historical and anticipated future experience which is updated periodically. | |||||
Certain of our policies may be surrendered for value or exchanged for a different one of our products (internal replacement). The deferred policy acquisition costs balance associated with the replaced or surrendered policies is adjusted to reflect these surrenders. | |||||
In addition, deferred policy acquisition costs are adjusted through OCI each period as a result of unrealized gains or losses on securities classified as available-for-sale in a process commonly referred to as shadow accounting. This adjustment is required in order to reflect the impact of these unrealized amounts on interest margins as if these unrealized amounts had been realized. | |||||
The projection of EGPs and EGMs requires the extensive use of actuarial assumptions, estimates and judgments about the future. Future EGPs and EGMs are generally projected for the estimated lives of the contracts. Assumptions are set separately for each product and are reviewed at least annually based on our current best estimates of future events. The following table summarizes the most significant assumptions used in the categories set forth below: | |||||
Significant Assumption | Product | Explanation and Derivation | |||
Separate account investment return | Variable Annuities | Separate account return assumptions are derived from the long-term returns observed in the asset classes in which the separate accounts are invested. Short-term deviations from the long-term expectations are expected to revert to the long-term assumption over five years. | |||
(8.0% long-term return assumption) | |||||
Variable Universal Life | |||||
(8.0% long-term return assumption) | |||||
Interest rates and default rates | Fixed and Indexed Annuities | Investment returns are based on the current yields and maturities of our fixed income portfolio combined with expected reinvestment rates given current market interest rates. Reinvestment rates are assumed to revert to long-term rates implied by the forward yield curve and long-term default rates. Contractually permitted future changes in credited rates are assumed to help support investment margins. | |||
Universal Life | |||||
Participating Life | |||||
Mortality / longevity | Universal Life | Mortality assumptions are based on Company experience over a rolling five-year period plus supplemental data from industry sources and trends. These assumptions vary by issue age, gender, underwriting class and policy duration. | |||
Variable Universal Life | |||||
Fixed and Indexed Annuities | |||||
Participating Life | |||||
Policyholder behavior – policy persistency | Universal Life | Policy persistency assumptions vary by product and policy year and are updated based on recently observed experience. Policyholders are generally assumed to behave rationally; hence rates are typically lower when surrender penalties are in effect or when policy benefits are more valuable. | |||
Variable Universal Life | |||||
Variable Annuities | |||||
Fixed and Indexed Annuities | |||||
Participating Life | |||||
Policyholder behavior – premium persistency | Universal Life | Future premiums and related fees are projected based on contractual terms, product illustrations at the time of sale and expected policy lapses without value. Assumptions are updated based on recently observed experience and include anticipated changes in behavior based on changes in policy charges if the Company has a high degree of confidence that such changes will be implemented (e.g., change in cost of insurance (“COI”) charges). | |||
Variable Universal Life | |||||
Expenses | All products | Projected maintenance expenses to administer policies in force are based on annually updated studies of expenses incurred. | |||
Reinsurance costs / recoveries | Universal Life | Projected reinsurance costs are based on treaty terms currently in force. Recoveries are based on the Company’s assumed mortality and treaty terms. Treaty recaptures are based on contract provisions and management’s intentions. | |||
Variable Universal Life | |||||
Variable Annuities | |||||
Participating Life | |||||
During the third quarter of every year, we complete a comprehensive assumption review where management makes a determination of best estimate assumptions based on a comprehensive review of recent experience and industry trends. Assumption changes resulting from this review change our estimate of EGPs in the deferred policy acquisition cost and unearned revenue amortization models, as well as projections within the death benefit and other insurance benefit reserving models. The deferred policy acquisition cost asset, the unearned revenue reserves and death benefit and other insurance benefit reserves are then adjusted with an offsetting benefit or charge to income to reflect such changes in the period of the revision. Throughout the year, we may also update the assumptions and adjust the deferred policy acquisition cost, SIA, URR and certain guaranteed minimum income and death benefit balances if emerging data indicate a change is warranted. Our process to assess the reasonableness of the EGPs used for this purpose uses internally developed models together with consideration of applicable recent experience, analysis of market and industry trends and other events. Actual gross profits that vary from management’s estimates in a given reporting period may also result in increases or decreases in the rate of amortization recorded in the period. | |||||
All assumption changes, whether resulting from the annual comprehensive review or from other periodic assessments, are considered an unlock in the period of revision. An unlock adjusts the deferred policy acquisition cost, SIA and URR balances as well as additional death benefit reserves and cost of reinsurance balances in the consolidated balance sheets. An unlock that results in an after-tax benefit generally occurs as a result of actual experience or future expectations of product profitability being favorable compared to previous estimates. An unlock that results in an after-tax charge generally occurs as a result of actual experience or future expectations of product profitability being unfavorable compared to previous estimates. | |||||
An analysis is performed annually to assess if there are sufficient gross profits to recover the deferred policy acquisition costs associated with business written during the year. If the estimates of gross profits cannot support the recovery of deferred | |||||
policy acquisition costs, the amount deferred is reduced to the recoverable amount. | |||||
Premises and equipment | ' | ||||
Premises and equipment, consisting primarily of our main office building, are stated at cost less accumulated depreciation and amortization and are included in other assets. We depreciate the building on the straight-line method over 39 years and equipment on the straight-line method over three to seven years. We amortize leasehold improvements over the terms of the related leases or the useful life of the improvement, whichever is shorter | |||||
Separate account assets and liabilities | ' | ||||
Separate account assets related to policyholder funds are carried at fair value with an equivalent amount recorded as separate account liabilities. Deposits, net investment income and realized investment gains and losses for these accounts are excluded from revenues and the related liability increases are excluded from benefits and expenses. Fees assessed to the contract owners for management services are included in revenues when services are rendered. | |||||
Policy liabilities and accruals | ' | ||||
Policy liabilities and accruals include future benefit liabilities for certain life and annuity products. We establish liabilities in amounts adequate to meet the estimated future obligations of policies in force. Future benefit liabilities for traditional life insurance are computed using the net level premium method on the basis of actuarial assumptions as to mortality rates guaranteed in calculating the cash surrender values described in such contracts, contractual guaranteed rates of interest which range from 2.3% to 6.0% and morbidity. Participating insurance represented 20.4% and 20.0% of direct individual life insurance in force at December 31, 2012 and 2011, respectively. | |||||
Generally, future policy benefits are payable over an extended period of time and related liabilities are calculated recognizing future expected benefits, expenses and premiums. Such liabilities are established based on methods and underlying assumptions in accordance with U.S. GAAP and applicable actuarial standards. Principal assumptions used in the establishment of liabilities for future policy benefits are mortality, morbidity, policyholder behavior, investment returns, inflation, expenses and other contingent events as appropriate. These assumptions are intended to estimate the experience for the period the policy benefits are payable. Utilizing these assumptions, liabilities are established on a cohort basis, as appropriate. If experience is less favorable than assumed, additional liabilities may be established, resulting in a charge to policyholder benefits and claims. | |||||
Additional policyholder liabilities for guaranteed benefits on variable annuity and on fixed index annuity contracts are based on estimates of the expected value of benefits in excess of the projected account balance, recognizing the excess over the accumulation period based on total expected assessments. Because these estimates are sensitive to capital market movements, amounts are calculated using multiple future economic scenarios. | |||||
Additional policyholder liabilities are established for certain contract features that could generate significant reductions to future gross profits (e.g., death benefits when a contract has zero account value and a no-lapse guarantee). The liabilities are accrued over the lifetime of the block based on assessments. The assumptions used in estimating these liabilities are consistent with those used for amortizing deferred policy acquisition costs and are, thus, subject to the same variability and risk. The assumptions of investment performance and volatility for variable and equity index products are consistent with historical experience of the appropriate underlying equity indices. | |||||
The universal life block of business has experience which produces profits in earlier periods followed by losses in later periods for which a liability is required to be held in addition to the policy liabilities recorded for the block. These liabilities are accrued ratably over the profitable periods to offset the future anticipated losses. The assumptions used in estimating these liabilities are consistent with those used for amortizing deferred policy acquisition costs and are subject to the same variability and risk. | |||||
The liability for universal life-type contracts primarily includes the balance that accrues to the benefit of the policyholders as of the financial statement date, including interest credited at rates which range from 3.0% to 4.5%, amounts that have been assessed to compensate us for services to be performed over future periods, accumulated account deposits, withdrawals and any amounts previously assessed against the policyholder that are refundable. There may also be a liability recorded for contracts that include additional death or other insurance benefit features as discussed above. | |||||
The Company periodically reviews its estimates of actuarial liabilities for policyholder benefits and compares them with its actual experience. Differences between actual experience and the assumptions used in pricing these policies and guarantees, as well as in the establishment of the related liabilities, result in variances in profit and could result in losses. | |||||
Policy liabilities and accruals also include liabilities for outstanding claims, losses and loss adjustment expenses based on individual case estimates for reported losses and estimates of unreported losses based on past experience. The Company does not establish claim liabilities until a loss has occurred. However, unreported losses and loss adjustment expenses includes estimates of claims that the Company believes have been incurred but have not yet been reported as of the balance sheet date. | |||||
Embedded derivatives | ' | ||||
Certain contracts contain guarantees that are accounted for as embedded derivative instruments. These guarantees are assessed to determine if a separate instrument with the same terms would qualify as a derivative and if they are not clearly and closely related to the economic characteristics of the host contract. Contract guarantees that meet these criteria are reported separately from the host contract and reported at fair value. | |||||
The guaranteed minimum withdrawal benefit (“GMWB”), guaranteed minimum accumulation benefit (“GMAB”) and combination rider (“COMBO”) represent embedded derivative liabilities in the variable annuity contracts. These liabilities are accounted for at fair value within policyholder deposit funds on the consolidated balance sheets with changes in the fair value of embedded derivatives recorded in realized investment gains on the consolidated statements of comprehensive income. The fair value of the GMWB, GMAB and COMBO obligation is calculated based on actuarial and capital market assumptions related to the projected cash flows, including benefits and related contract charges, over the lives of the contracts, incorporating expectations concerning policyholder behavior. As markets change, contracts mature and actual policyholder behavior emerges, these assumptions are continually evaluated and may from time to time be adjusted. | |||||
Fixed indexed annuities offer a variety of index options: policy credits that are calculated based on the performance of an outside equity market or other index over a specified term. The index options represent embedded derivative liabilities accounted for at fair value within policyholder deposit funds on the consolidated balance sheets with changes in fair value recorded in realized investment gains and losses in the consolidated statements of comprehensive income. The fair value of these index options is calculated based on the impact of projected interest rates on the discounted liabilities. Several additional inputs reflect our internally developed assumptions related to lapse rates and policyholder behavior. | |||||
See Note 12 to these financial statements for additional information regarding embedded derivatives. | |||||
Policyholder deposit funds | ' | ||||
Amounts received as payment for certain deferred annuities and other contracts without life contingencies are reported as deposits to policyholder deposit funds. The liability for deferred annuities and other contracts without life contingencies is equal to the balance that accrues to the benefit of the contract owner as of the financial statement date which includes the accumulation of deposits plus interest credited, less withdrawals and amounts assessed through the financial statement date as well as accumulated policyholder dividends and the liability representing the fair value of embedded derivatives associated with those contracts. | |||||
Contingent liabilities | ' | ||||
Management evaluates each contingent matter separately and in aggregate as may be required. Amounts related to contingent liabilities are accrued if it is probable that a liability has been incurred and an amount is reasonably estimable. | |||||
Demutualization and closed block | ' | ||||
The closed block assets, including future assets from cash flows generated by the assets and premiums and other revenues from the policies in the closed block, will benefit only holders of the policies in the closed block. The principal cash flow items that affect the amount of closed block assets and liabilities are premiums, net investment income, investment purchases and sales, policyholder benefits, policyholder dividends, premium taxes and income taxes. The principal income and expense items excluded from the closed block are management and maintenance expenses, commissions, investment income and realized investment gains and losses on investments held outside the closed block that support the closed block business. All of these excluded income and expense items enter into the determination of EGMs of closed block policies for the purpose of amortization of deferred policy acquisition costs. | |||||
In our financial statements, we present closed block assets, liabilities, revenues and expenses together with all other assets, liabilities, revenues and expenses. Within closed block liabilities, we have established a policyholder dividend obligation to record an additional liability to closed block policyholders for cumulative closed block earnings in excess of expected amounts calculated at the date of demutualization. These closed block earnings will not inure to shareholders, but will result in additional future dividends to closed block policyholders unless otherwise offset by future performance of the closed block that is less favorable than expected. | |||||
Revenue recognition | ' | ||||
We recognize premiums for participating life insurance products and other life insurance products as revenue when due from policyholders. We match benefits, losses and related expenses with premiums over the related contract periods. | |||||
Amounts received as payment for universal life, variable universal life and other investment-type contracts are considered deposits and are not included in premiums. Revenues from these products consist primarily of fees assessed during the period against the policyholders’ account balances for mortality charges, policy administration charges and surrender charges. Fees assessed that represent compensation for services to be provided in the future are deferred and amortized into revenue over the life of the related contracts in proportion to EGPs. | |||||
Certain variable annuity contracts and fixed index annuity contract riders provide the holder a guarantee that the benefit received upon death or annuitization will be no less than a minimum prescribed amount. These benefits are accounted for as insurance benefits. Certain variable annuity contracts features and fixed index annuity index options are considered embedded derivatives. These features are discussed in further detail in Note 12 to these financial statements. | |||||
Reinsurance | ' | ||||
Premiums, policy benefits and operating expenses related to our traditional life and term insurance policies are stated net of reinsurance ceded to other companies, except for amounts associated with certain modified coinsurance contracts which are reflected in the Company’s financial statements based on the application of the deposit method of accounting. Estimated reinsurance recoverables and the net estimated cost of reinsurance are recognized over the life of the reinsured treaty using assumptions consistent with those used to account for the policies subject to the reinsurance. | |||||
For universal life and variable universal life contracts, reinsurance premiums and ceded benefits are reflected net within policy benefits. Reinsurance recoverables are recognized in the same period as the related reinsured claim. The net cost or benefit of reinsurance (the present value of all expected ceded premium payments and expected future benefit payments) is recognized over the life of the reinsured treaty using assumptions consistent with those used to account for the policies subject to the reinsurance. | |||||
Income taxes | ' | ||||
Income tax expense or benefit is recognized based upon amounts reported in the financial statements and the provisions of currently enacted tax laws. Deferred tax assets and/or liabilities are determined by multiplying the differences between the financial reporting and tax reporting bases for assets and liabilities by the enacted tax rates expected to be in effect when such differences are recovered or settled. Valuation allowances on deferred tax assets are recorded to the extent that management concludes that it is more likely than not that an asset will not be realized. | |||||
We recognize current income tax assets and liabilities for estimated income taxes refundable or payable based on the income tax returns. We recognize deferred income tax assets and liabilities for the estimated future income tax effects of temporary differences and carryovers. Temporary differences are the differences between the financial statement carrying amounts of assets and liabilities and their tax bases, as well as the timing of income or expense recognized for financial reporting and tax purposes of items not related to assets or liabilities. If necessary, we establish valuation allowances to reduce the carrying amount of deferred income tax assets to amounts that are more likely than not to be realized. We periodically review the adequacy of these valuation allowances and record any increase or reduction in allowances in accordance with intraperiod allocation rules. We assess all significant tax positions to determine if a liability for an uncertain tax position is necessary and, if so, the impact on the current or deferred income tax balances. Also, if indicated, we recognize interest or penalties related to income taxes as a component of the income tax provision. | |||||
Pension and other post-employment benefits | ' | ||||
We recognize pension and other postretirement benefit costs and obligations over the employees’ expected service periods by discounting an estimate of aggregate benefits. We estimate aggregate benefits by using assumptions for rates of return on pension plan assets and future health care costs. We recognize an expense for differences between actual experience and estimates exceeding a corridor over the average future lifetime of participants. We recognize an expense for our contributions to employee and agent savings plans at the time employees and agents make contributions to the plans. We also recognize the costs and obligations of severance, disability and related life insurance and health care benefits to be paid to inactive or former employees after employment but before retirement. | |||||
Audit fees and other professional services associated with the Restatement | ' | ||||
Professional fees associated with the restatement are being recognized and expensed as incurred and totaled $4.0 million in 2012. |
2_Restatement_and_Amendment_of1
2. Restatement and Amendment of Previously Reported Financial Information (Tables) | 12 Months Ended | |||||||||||||||||||||||||||||
Dec. 31, 2012 | ||||||||||||||||||||||||||||||
Accounting Changes and Error Corrections [Abstract] | ' | |||||||||||||||||||||||||||||
Summarizes the effect of the correction of these errors on net income | ' | |||||||||||||||||||||||||||||
The following table summarizes the effect of the correction of these errors on net income as applicable by category of error. | ||||||||||||||||||||||||||||||
Increase (decrease) | For the year ended | |||||||||||||||||||||||||||||
($ in millions) | December 31, | |||||||||||||||||||||||||||||
2011 | 2010 | |||||||||||||||||||||||||||||
Net income (loss) as previously reported | $ | 8.1 | $ | -12.6 | ||||||||||||||||||||||||||
Restatement adjustments: (1) | ||||||||||||||||||||||||||||||
Actuarial finance: | ||||||||||||||||||||||||||||||
- Accounting for certain universal life type products | -34 | -46.7 | ||||||||||||||||||||||||||||
- Loss recognition | 2.7 | -3.9 | ||||||||||||||||||||||||||||
- Traditional product revenue recognition | -0.1 | -0.4 | ||||||||||||||||||||||||||||
- Liability for the future cost of a settlement agreement | -1.8 | -2 | ||||||||||||||||||||||||||||
- Fixed indexed annuities | -4.2 | — | ||||||||||||||||||||||||||||
- Other actuarial errors | -11 | -13.5 | ||||||||||||||||||||||||||||
Investments: | ||||||||||||||||||||||||||||||
- Limited partnerships and other investments | -2.6 | 2.5 | ||||||||||||||||||||||||||||
- Available-for-sale securities | 2.6 | 2.3 | ||||||||||||||||||||||||||||
- Derivative valuation | -12.4 | -4.2 | ||||||||||||||||||||||||||||
- Structured securities | -3.6 | 0.6 | ||||||||||||||||||||||||||||
Reinsurance accounting | -3.3 | 6.3 | ||||||||||||||||||||||||||||
Pensions | 7.1 | -1.7 | ||||||||||||||||||||||||||||
Other restatement adjustments (2) | -0.1 | 9.0 | ||||||||||||||||||||||||||||
Total restatement adjustments before income taxes | -60.7 | -51.7 | ||||||||||||||||||||||||||||
Limited partnerships and other investments taxable income reporting | -1.6 | 4.9 | ||||||||||||||||||||||||||||
Income tax expense (benefit) of restatement adjustments | 3.0 | -20.4 | ||||||||||||||||||||||||||||
Total income tax expense (benefit) of restatement adjustments | 1.4 | -15.5 | ||||||||||||||||||||||||||||
Total impact to continuing operations | -62.1 | -36.2 | ||||||||||||||||||||||||||||
Retrospective adoption, net of income taxes (3) | 22.4 | 29.5 | ||||||||||||||||||||||||||||
Discontinued operations, net of income taxes (4) | 0.4 | -15.6 | ||||||||||||||||||||||||||||
Impact of restatement adjustments on net income (loss) | -39.3 | -22.3 | ||||||||||||||||||||||||||||
Less: Noncontrolling interests (4) | -0.5 | -0.5 | ||||||||||||||||||||||||||||
Net loss attributable to The Phoenix Companies, Inc., as restated and amended | $ | -30.7 | $ | -34.4 | ||||||||||||||||||||||||||
Summary of Correction of Actuarial Finance Errors | ' | |||||||||||||||||||||||||||||
Increase (decrease) | Summary of Correction of Actuarial Finance Errors – December 31, 2011 Balance Sheet Impacts (1) | |||||||||||||||||||||||||||||
($ in millions) | Actuarial Finance | |||||||||||||||||||||||||||||
Accounting | Shadow | Loss | Traditional | Future | FIA | Other | Total | |||||||||||||||||||||||
for UL Type | Accounting | Recognition | Revenue | Cost of a | Actuarial | Actuarial | ||||||||||||||||||||||||
Products | Recognition | Settlement | Finance | |||||||||||||||||||||||||||
Errors(2) | ||||||||||||||||||||||||||||||
ASSETS: | ||||||||||||||||||||||||||||||
Available-for-sale debt securities, at fair value | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||
Available-for-sale equity securities, at fair value | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
Limited partnerships and other investments | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
Policy loans, at unpaid principal balances | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
Derivative investments | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
Fair value investments | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
Total investments | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
Cash and cash equivalents | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
Accrued investment income | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
Receivables | — | — | — | 16.6 | — | — | 1.0 | 17.6 | ||||||||||||||||||||||
Deferred policy acquisition costs | 57.3 | -11 | -1.8 | -0.7 | — | -3.4 | 1.1 | 41.5 | ||||||||||||||||||||||
Deferred income taxes, net | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
Other assets | — | — | -38.6 | — | — | — | 4.8 | -33.8 | ||||||||||||||||||||||
Discontinued operations assets | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
Separate account assets | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
Total assets | $ | 57.3 | $ | -11 | $ | -40.4 | $ | 15.9 | $ | — | $ | -3.4 | $ | 6.9 | $ | 25.3 | ||||||||||||||
LIABILITIES: | ||||||||||||||||||||||||||||||
Policy liabilities and accruals | $ | 179.4 | $ | 9.2 | $ | 11.0 | $ | 12.1 | $ | 7.7 | $ | — | $ | 21.3 | $ | 240.7 | ||||||||||||||
Policyholder deposit funds | — | — | — | — | — | 0.8 | 2.1 | 2.9 | ||||||||||||||||||||||
Dividend obligations | — | — | — | 9.4 | — | — | -8.4 | 1.0 | ||||||||||||||||||||||
Indebtedness | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
Other liabilities | — | — | — | — | — | — | 0.2 | 0.2 | ||||||||||||||||||||||
Discontinued operations liabilities | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
Separate account liabilities | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
Total liabilities | 179.4 | 9.2 | 11.0 | 21.5 | 7.7 | 0.8 | 15.2 | 244.8 | ||||||||||||||||||||||
STOCKHOLDERS’ EQUITY: | ||||||||||||||||||||||||||||||
Common stock | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
Additional paid-in capital | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
Accumulated other comprehensive loss | — | (14.2) | — | — | — | — | — | (14.2) | ||||||||||||||||||||||
Accumulated deficit | -80.7 | — | -1.2 | -0.5 | -3.8 | -4.2 | -24.5 | -114.9 | ||||||||||||||||||||||
Treasury stock | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
Noncontrolling interests | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
Total stockholders’ equity –periods presented | -80.7 | (14.2) | -1.2 | -0.5 | -3.8 | -4.2 | -24.5 | -129.1 | ||||||||||||||||||||||
Total stockholders’ equity – cumulative impact | -41.4 | -6 | -50.2 | -5.1 | -3.9 | — | 16.2 | -90.4 | ||||||||||||||||||||||
Total stockholders’ equity – impact | -122.1 | -20.2 | -51.4 | -5.6 | -7.7 | -4.2 | -8.3 | -219.5 | ||||||||||||||||||||||
Total liabilities and stockholders’ equity | $ | 57.3 | $ | -11 | $ | -40.4 | $ | 15.9 | $ | — | $ | -3.4 | $ | 6.9 | $ | 25.3 | ||||||||||||||
——————— | ||||||||||||||||||||||||||||||
-1 | All amounts are shown before income taxes, unless otherwise noted. | |||||||||||||||||||||||||||||
-2 | Amounts represent the total “Summary of Correction of Actuarial Finance Errors” which is further aggregated into the “Consolidated Summary of Correction of Errors” in the following pages. | |||||||||||||||||||||||||||||
Increase (decrease) | Summary of Correction of Actuarial Finance Errors – December 31, 2011 Income Statement Impacts (1) | |||||||||||||||||||||||||||||
($ in millions) | Actuarial Finance | |||||||||||||||||||||||||||||
Accounting | Shadow | Loss | Traditional | Future | FIA | Other | Total | |||||||||||||||||||||||
for UL Type | Accounting | Recognition | Revenue | Cost of a | Actuarial | Actuarial | ||||||||||||||||||||||||
Products | Recognition | Settlement | Finance | |||||||||||||||||||||||||||
Errors(2) | ||||||||||||||||||||||||||||||
REVENUES | ||||||||||||||||||||||||||||||
Premiums | $ | — | $ | — | $ | — | $ | -10.9 | $ | — | $ | — | $ | 0.5 | $ | -10.4 | ||||||||||||||
Fee income | -1.1 | — | — | — | — | — | 0.8 | -0.3 | ||||||||||||||||||||||
Net investment income | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
Net realized investment gains (losses): | ||||||||||||||||||||||||||||||
Total OTTI losses | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
Portion of OTTI losses recognized in OCI | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
Net OTTI losses recognized in earnings | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
Net realized investment gains (losses), excluding OTTI losses | — | — | — | — | — | -0.4 | -0.7 | -1.1 | ||||||||||||||||||||||
Net realized investment gains (losses) | — | — | — | — | — | -0.4 | -0.7 | -1.1 | ||||||||||||||||||||||
Gain on debt repurchase | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
Total revenues | -1.1 | — | — | -10.9 | — | (0.4) | 0.6 | -11.8 | ||||||||||||||||||||||
BENEFITS AND EXPENSES | ||||||||||||||||||||||||||||||
Policy benefits, excluding policyholder dividends | 47.1 | — | -4.5 | -10 | — | 0.4 | 12.8 | 45.8 | ||||||||||||||||||||||
Policyholder dividends | — | — | — | -0.6 | — | — | -0.7 | -1.3 | ||||||||||||||||||||||
Policy acquisition cost amortization | -14.2 | — | 1.8 | -0.2 | — | 3.4 | -5.3 | -14.5 | ||||||||||||||||||||||
Interest expense on indebtedness | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
Other operating expenses | — | — | — | — | 1.8 | — | 4.8 | 6.6 | ||||||||||||||||||||||
Total benefits and expenses | 32.9 | — | -2.7 | -10.8 | 1.8 | 3.8 | 11.6 | 36.6 | ||||||||||||||||||||||
Income (loss) from continuing operations before income taxes | -34 | — | 2.7 | -0.1 | -1.8 | -4.2 | -11 | -48.4 | ||||||||||||||||||||||
Income tax expense (benefit) | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
Income (loss) from continuing operations | -34 | — | 2.7 | -0.1 | -1.8 | -4.2 | -11 | -48.4 | ||||||||||||||||||||||
Noncontrolling interests | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
Income (loss) from discontinued operations, net of income taxes | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
Net income (loss) attributable to The Phoenix Companies, Inc. | $ | -34 | $ | — | $ | 2.7 | $ | -0.1 | $ | -1.8 | $ | -4.2 | $ | -11 | $ | -48.4 | ||||||||||||||
——————— | ||||||||||||||||||||||||||||||
-1 | All amounts are shown before income taxes, unless otherwise noted. | |||||||||||||||||||||||||||||
-2 | Amounts represent the total “Summary of Correction of Actuarial Finance Errors” which is further aggregated into the “Consolidated Summary of Correction of Errors” in the following pages. | |||||||||||||||||||||||||||||
(Continued from previous page) | Summary of Correction of Actuarial Finance Errors – December 31, 2011 Income Statement Impacts(1) | |||||||||||||||||||||||||||||
Increase (decrease) | Actuarial Finance | |||||||||||||||||||||||||||||
($ in millions) | Accounting | Shadow | Loss | Traditional | Future | FIA | Other | Total | ||||||||||||||||||||||
for UL Type | Accounting | Recognition | Revenue | Cost of a | Actuarial | Actuarial | ||||||||||||||||||||||||
Products | Recognition | Settlement | Finance | |||||||||||||||||||||||||||
Errors(2) | ||||||||||||||||||||||||||||||
COMPREHENSIVE INCOME (LOSS): | ||||||||||||||||||||||||||||||
Net income (loss) attributable to The Phoenix Companies, Inc. | $ | -34 | $ | — | $ | 2.7 | $ | -0.1 | $ | -1.8 | $ | -4.2 | $ | -11 | $ | -48.4 | ||||||||||||||
Other comprehensive income (loss) before income taxes: | ||||||||||||||||||||||||||||||
Net unrealized investment gains before income taxes | — | -2.6 | — | — | — | — | — | -2.6 | ||||||||||||||||||||||
Non-credit portion of OTTI losses recognized in | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
OCI before income taxes | ||||||||||||||||||||||||||||||
Net pension liability adjustment before income taxes | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
Net unrealized other gains (losses) before income taxes | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
Net unrealized derivative instruments gains (losses) | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
before income taxes | ||||||||||||||||||||||||||||||
Other comprehensive income (loss) before income taxes | — | -2.6 | — | — | — | — | — | -2.6 | ||||||||||||||||||||||
Less: Income tax expense (benefit) related to: | ||||||||||||||||||||||||||||||
Net unrealized investment gains (losses) | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
Non-credit portion of OTTI losses recognized in OCI | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
Net pension liability adjustment | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
Net unrealized other gains (losses) | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
Net unrealized derivative instruments gains (losses) | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
Total income tax expense (benefit) | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
Other comprehensive income (loss), net of income taxes | — | -2.6 | — | — | — | — | — | -2.6 | ||||||||||||||||||||||
Comprehensive income (loss) attributable to The Phoenix Companies, Inc. | -34 | -2.6 | 2.7 | -0.1 | -1.8 | -4.2 | -11 | -51 | ||||||||||||||||||||||
Add: Comprehensive income attributable to noncontrolling interests | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
Comprehensive income (loss) | $ | -34 | $ | -2.6 | $ | 2.7 | $ | -0.1 | $ | -1.8 | $ | -4.2 | $ | -11 | $ | -51 | ||||||||||||||
——————— | ||||||||||||||||||||||||||||||
-1 | All amounts are shown before income taxes, unless otherwise noted. | |||||||||||||||||||||||||||||
-2 | Amounts represent the total “Summary of Correction of Actuarial Finance Errors” which is further aggregated into the “Consolidated Summary of Correction of Errors” in the following pages. | |||||||||||||||||||||||||||||
Increase (decrease) | Summary of Correction of Actuarial Finance Errors – December 31, 2010 Income Statement Impacts(1) | |||||||||||||||||||||||||||||
($ in millions) | Actuarial Finance | |||||||||||||||||||||||||||||
Accounting | Shadow | Loss | Traditional | Future | FIA | Other | Total | |||||||||||||||||||||||
for UL Type | Accounting | Recognition | Revenue | Cost of a | Actuarial | Actuarial | ||||||||||||||||||||||||
Products | Recognition | Settlement | Finance | |||||||||||||||||||||||||||
Errors(2) | ||||||||||||||||||||||||||||||
REVENUES | ||||||||||||||||||||||||||||||
Premiums | $ | — | $ | — | $ | — | $ | -13.9 | $ | — | $ | — | $ | — | $ | -13.9 | ||||||||||||||
Fee income | 1.7 | — | — | — | — | — | 1.7 | 3.4 | ||||||||||||||||||||||
Net investment income | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
Net realized investment gains (losses): | ||||||||||||||||||||||||||||||
Total OTTI losses | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
Portion of OTTI losses recognized in OCI | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
Net OTTI losses recognized in earnings | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
Net realized investment gains (losses), excluding OTTI losses | — | — | — | — | — | — | -4.9 | -4.9 | ||||||||||||||||||||||
Net realized investment gains (losses) | — | — | — | — | — | — | -4.9 | -4.9 | ||||||||||||||||||||||
Gain on debt repurchase | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
Total revenues | 1.7 | — | — | -13.9 | — | — | -3.2 | -15.4 | ||||||||||||||||||||||
BENEFITS AND EXPENSES | ||||||||||||||||||||||||||||||
Policy benefits, excluding policyholder dividends | 29.3 | — | 3.9 | -13.5 | — | — | 6.2 | 25.9 | ||||||||||||||||||||||
Policyholder dividends | — | — | — | -0.1 | — | — | -0.4 | -0.5 | ||||||||||||||||||||||
Policy acquisition cost amortization | 19.1 | — | — | 0.1 | — | — | 6.8 | 26.0 | ||||||||||||||||||||||
Interest expense on indebtedness | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
Other operating expenses | — | — | — | — | 2.0 | — | -2.3 | -0.3 | ||||||||||||||||||||||
Total benefits and expenses | 48.4 | — | 3.9 | -13.5 | 2.0 | — | 10.3 | 51.1 | ||||||||||||||||||||||
Income (loss) from continuing operations before income taxes | -46.7 | — | -3.9 | -0.4 | -2 | — | -13.5 | -66.5 | ||||||||||||||||||||||
Income tax expense (benefit) | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
Income (loss) from continuing operations | -46.7 | — | -3.9 | -0.4 | -2 | — | -13.5 | -66.5 | ||||||||||||||||||||||
Noncontrolling interests | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
Income (loss) from discontinued operations, net of income taxes | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
Net income (loss) attributable to The Phoenix Companies, Inc. | $ | -46.7 | $ | — | $ | -3.9 | $ | -0.4 | $ | -2 | $ | — | $ | -13.5 | $ | -66.5 | ||||||||||||||
——————— | ||||||||||||||||||||||||||||||
-1 | All amounts are shown before income taxes, unless otherwise noted. | |||||||||||||||||||||||||||||
-2 | Amounts represent the total “Summary of Correction of Actuarial Finance Errors” which is further aggregated into the “Consolidated Summary of Correction of Errors” in the following pages. | |||||||||||||||||||||||||||||
(Continued from previous page) | Summary of Correction of Actuarial Finance Errors – December 31, 2010 Income Statement Impacts(1) | |||||||||||||||||||||||||||||
Increase (decrease) | Actuarial Finance | |||||||||||||||||||||||||||||
($ in millions) | Accounting | Shadow | Loss | Traditional | Future | FIA | Other | Total | ||||||||||||||||||||||
for UL Type | Accounting | Recognition | Revenue | Cost of a | Actuarial | Actuarial | ||||||||||||||||||||||||
Products | Recognition | Settlement | Finance | |||||||||||||||||||||||||||
Errors(2) | ||||||||||||||||||||||||||||||
COMPREHENSIVE INCOME (LOSS): | ||||||||||||||||||||||||||||||
Net income (loss) attributable to The Phoenix Companies, Inc. | $ | -46.7 | $ | — | $ | -3.9 | $ | -0.4 | $ | -2 | $ | — | $ | -13.5 | $ | -66.5 | ||||||||||||||
Other comprehensive income (loss) before income taxes: | ||||||||||||||||||||||||||||||
Net unrealized investment gains before income taxes | — | 21.7 | — | — | — | — | — | 21.7 | ||||||||||||||||||||||
Non-credit portion of OTTI losses recognized in OCI | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
before income taxes | ||||||||||||||||||||||||||||||
Net pension liability adjustment before income taxes | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
Net unrealized other gains (losses) before income taxes | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
Net unrealized derivative instruments gains (losses) | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
before income taxes | ||||||||||||||||||||||||||||||
Other comprehensive income (loss) before income taxes | — | 21.7 | — | — | — | — | — | 21.7 | ||||||||||||||||||||||
Less: Income tax expense (benefit) related to: | ||||||||||||||||||||||||||||||
Net unrealized investment gains (losses) | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
Non-credit portion of OTTI losses recognized in OCI | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
Net pension liability adjustment | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
Net unrealized other gains (losses) | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
Net unrealized derivative instruments gains (losses) | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
Total income tax expense (benefit) | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
Other comprehensive income (loss), net of income taxes | — | 21.7 | — | — | — | — | — | 21.7 | ||||||||||||||||||||||
Comprehensive income (loss) attributable to The Phoenix Companies, Inc. | -46.7 | 21.7 | -3.9 | -0.4 | -2 | — | -13.5 | -44.8 | ||||||||||||||||||||||
Add: Comprehensive income attributable to noncontrolling interests | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
Comprehensive income (loss) | $ | -46.7 | $ | 21.7 | $ | -3.9 | $ | -0.4 | $ | -2 | $ | — | $ | -13.5 | $ | -44.8 | ||||||||||||||
——————— | ||||||||||||||||||||||||||||||
-1 | All amounts are shown before income taxes, unless otherwise noted. | |||||||||||||||||||||||||||||
-2 | Amounts represent the total “Summary of Correction of Actuarial Finance Errors” which is further aggregated into the “Consolidated Summary of Correction of Errors” in the following pages. | |||||||||||||||||||||||||||||
Summary of Correction of Investments Errors | ' | |||||||||||||||||||||||||||||
Increase (decrease) | Summary of Correction of Investments Errors – December 31, 2011 Balance Sheet Impacts (1) | |||||||||||||||||||||||||||||
($ in millions) | Investments | |||||||||||||||||||||||||||||
OIA | Available-for-Sale | Derivative | Structured | Total | ||||||||||||||||||||||||||
Securities | Valuation | Securities | Investments | |||||||||||||||||||||||||||
Valuation | Bond Call | Errors (2) | ||||||||||||||||||||||||||||
ASSETS: | ||||||||||||||||||||||||||||||
Available-for-sale debt securities, at fair value | $ | — | $ | -10 | $ | -25.3 | $ | — | $ | -55.7 | $ | -91 | ||||||||||||||||||
Available-for-sale equity securities, at fair value | — | — | — | — | — | — | ||||||||||||||||||||||||
Limited partnerships and other investments | -35.9 | — | — | — | — | -35.9 | ||||||||||||||||||||||||
Policy loans, at unpaid principal balances | — | — | — | — | — | — | ||||||||||||||||||||||||
Derivative investments | — | — | — | -12.6 | — | -12.6 | ||||||||||||||||||||||||
Fair value investments | 44.0 | -2.2 | — | — | 55.7 | 97.5 | ||||||||||||||||||||||||
Total investments | 8.1 | -12.2 | -25.3 | -12.6 | — | -42 | ||||||||||||||||||||||||
Cash and cash equivalents | 2.0 | — | — | — | — | 2.0 | ||||||||||||||||||||||||
Accrued investment income | — | — | — | — | — | — | ||||||||||||||||||||||||
Receivables | — | — | — | — | — | — | ||||||||||||||||||||||||
Deferred policy acquisition costs | — | — | — | -13.1 | — | -13.1 | ||||||||||||||||||||||||
Deferred income taxes, net | — | — | — | — | — | — | ||||||||||||||||||||||||
Other assets | -4.4 | — | 23.2 | -6.7 | — | 12.1 | ||||||||||||||||||||||||
Discontinued operations assets | — | — | — | — | — | — | ||||||||||||||||||||||||
Separate account assets | — | — | — | — | — | — | ||||||||||||||||||||||||
Total assets | $ | 5.7 | $ | -12.2 | $ | -2.1 | $ | -32.4 | $ | — | $ | -41 | ||||||||||||||||||
LIABILITIES: | ||||||||||||||||||||||||||||||
Policy liabilities and accruals | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||||
Policyholder deposit funds | — | — | — | — | — | — | ||||||||||||||||||||||||
Dividend obligations | 4.1 | -9.6 | -2.1 | — | — | -7.6 | ||||||||||||||||||||||||
Indebtedness | — | — | — | — | — | — | ||||||||||||||||||||||||
Other liabilities | 5.4 | 7.1 | — | — | — | 12.5 | ||||||||||||||||||||||||
Discontinued operations liabilities | — | — | — | — | — | — | ||||||||||||||||||||||||
Separate account liabilities | — | — | — | — | — | — | ||||||||||||||||||||||||
Total liabilities | 9.5 | -2.5 | -2.1 | — | — | 4.9 | ||||||||||||||||||||||||
STOCKHOLDERS’ EQUITY: | ||||||||||||||||||||||||||||||
Common stock | — | — | — | — | — | — | ||||||||||||||||||||||||
Additional paid-in capital | — | — | — | — | — | — | ||||||||||||||||||||||||
Accumulated other comprehensive loss | -15.7 | 24.3 | — | — | 3.0 | 11.6 | ||||||||||||||||||||||||
Accumulated deficit | 0.9 | 4.9 | — | -16.6 | -3 | -13.8 | ||||||||||||||||||||||||
Treasury stock | — | — | — | — | — | — | ||||||||||||||||||||||||
Noncontrolling interests | -1 | — | — | — | — | -1 | ||||||||||||||||||||||||
Total stockholders’ equity –periods presented | -15.8 | 29.2 | — | -16.6 | — | -3.2 | ||||||||||||||||||||||||
Total stockholders’ equity – cumulative impact | 12.0 | -38.9 | — | -15.8 | — | -42.7 | ||||||||||||||||||||||||
Total stockholders’ equity – impact | -3.8 | -9.7 | — | -32.4 | — | -45.9 | ||||||||||||||||||||||||
Total liabilities and stockholders’ equity | $ | 5.7 | $ | -12.2 | $ | -2.1 | $ | -32.4 | $ | — | $ | -41 | ||||||||||||||||||
——————— | ||||||||||||||||||||||||||||||
-1 | All amounts are shown before income taxes, unless otherwise noted. | |||||||||||||||||||||||||||||
-2 | Amounts represent the total “Summary of Correction of Investments Errors” which is further aggregated into the “Consolidated Summary of Correction of Errors” in the following pages. | |||||||||||||||||||||||||||||
Increase (decrease) | Summary of Correction of Investments Errors – December 31, 2011 Income Statement Impacts (1) | |||||||||||||||||||||||||||||
($ in millions) | Investments | |||||||||||||||||||||||||||||
OIA | Available-for-Sale | Derivative | Structured | Total | ||||||||||||||||||||||||||
Securities | Valuation | Securities | Investments | |||||||||||||||||||||||||||
Valuation | Bond Call | Errors (2) | ||||||||||||||||||||||||||||
REVENUES | ||||||||||||||||||||||||||||||
Premiums | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||||
Fee income | — | — | — | — | — | — | ||||||||||||||||||||||||
Net investment income | 12.6 | 2.6 | -0.1 | — | -2.2 | 12.9 | ||||||||||||||||||||||||
Net realized investment gains (losses): | ||||||||||||||||||||||||||||||
Total OTTI losses | — | — | — | — | 4.5 | 4.5 | ||||||||||||||||||||||||
Portion of OTTI losses recognized in OCI | — | — | — | — | -3.5 | -3.5 | ||||||||||||||||||||||||
Net OTTI losses recognized in earnings | — | — | — | — | 1.0 | 1.0 | ||||||||||||||||||||||||
Net realized investment gains (losses), excluding OTTI losses | -2.2 | -0.9 | — | -13 | -1.3 | -17.4 | ||||||||||||||||||||||||
Net realized investment gains (losses) | -2.2 | -0.9 | — | -13 | -0.3 | -16.4 | ||||||||||||||||||||||||
Gain on debt repurchase | — | — | — | — | — | — | ||||||||||||||||||||||||
Total revenues | 10.4 | 1.7 | -0.1 | -13 | -2.5 | -3.5 | ||||||||||||||||||||||||
BENEFITS AND EXPENSES | ||||||||||||||||||||||||||||||
Policy benefits, excluding policyholder dividends | — | — | — | — | — | — | ||||||||||||||||||||||||
Policyholder dividends | 11.8 | -0.9 | -0.1 | — | 1.1 | 11.9 | ||||||||||||||||||||||||
Policy acquisition cost amortization | — | — | — | -0.6 | — | -0.6 | ||||||||||||||||||||||||
Interest expense on indebtedness | — | — | — | — | — | — | ||||||||||||||||||||||||
Other operating expenses | 1.2 | — | — | — | — | 1.2 | ||||||||||||||||||||||||
Total benefits and expenses | 13.0 | -0.9 | -0.1 | -0.6 | 1.1 | 12.5 | ||||||||||||||||||||||||
Income (loss) from continuing operations before income taxes | -2.6 | 2.6 | — | -12.4 | -3.6 | -16 | ||||||||||||||||||||||||
Income tax expense (benefit) | — | — | — | — | — | — | ||||||||||||||||||||||||
Income (loss) from continuing operations | -2.6 | 2.6 | — | -12.4 | -3.6 | -16 | ||||||||||||||||||||||||
Noncontrolling interests | -0.5 | — | — | — | — | -0.5 | ||||||||||||||||||||||||
Income (loss) from discontinued operations, net of income taxes | — | — | — | — | — | — | ||||||||||||||||||||||||
Net income (loss) attributable to The Phoenix Companies, Inc. | $ | -2.1 | $ | 2.6 | $ | — | $ | -12.4 | $ | -3.6 | $ | -15.5 | ||||||||||||||||||
——————— | ||||||||||||||||||||||||||||||
-1 | All amounts are shown before income taxes, unless otherwise noted. | |||||||||||||||||||||||||||||
-2 | Amounts represent the total “Summary of Correction of Investments Errors” which is further aggregated into the “Consolidated Summary of Correction of Errors” in the following pages. | |||||||||||||||||||||||||||||
(Continued from previous page) | Summary of Correction of Investments Errors – December 31, 2011 | |||||||||||||||||||||||||||||
Increase (decrease) | Income Statement Impacts (1) | |||||||||||||||||||||||||||||
($ in millions) | Investments | |||||||||||||||||||||||||||||
OIA | Available-for-Sale | Derivative | Structured | Total | ||||||||||||||||||||||||||
Securities | Valuation | Securities | Investments | |||||||||||||||||||||||||||
Valuation | Bond Call | Errors (2) | ||||||||||||||||||||||||||||
COMPREHENSIVE INCOME (LOSS): | ||||||||||||||||||||||||||||||
Net income (loss) attributable to The Phoenix Companies, Inc. | $ | -2.1 | $ | 2.6 | $ | — | $ | -12.4 | $ | -3.6 | $ | -15.5 | ||||||||||||||||||
Other comprehensive income (loss) before income taxes: | ||||||||||||||||||||||||||||||
Net unrealized investment gains before income taxes | -5.8 | 13.8 | — | — | 3.6 | 11.6 | ||||||||||||||||||||||||
Non-credit portion of OTTI losses recognized in OCI before income taxes | — | — | — | — | — | — | ||||||||||||||||||||||||
Net pension liability adjustment before income taxes | — | — | — | — | — | — | ||||||||||||||||||||||||
Net unrealized other gains (losses) before income taxes | — | — | — | — | — | — | ||||||||||||||||||||||||
Net unrealized derivative instruments gains (losses) before income taxes | — | — | — | — | — | — | ||||||||||||||||||||||||
Other comprehensive income (loss) before income taxes | -5.8 | 13.8 | — | — | 3.6 | 11.6 | ||||||||||||||||||||||||
Less: Income tax expense (benefit) related to: | ||||||||||||||||||||||||||||||
Net unrealized investment gains (losses) | — | — | — | — | — | — | ||||||||||||||||||||||||
Non-credit portion of OTTI losses recognized in OCI | — | — | — | — | — | — | ||||||||||||||||||||||||
Net pension liability adjustment | — | — | — | — | — | — | ||||||||||||||||||||||||
Net unrealized other gains (losses) | — | — | — | — | — | — | ||||||||||||||||||||||||
Net unrealized derivative instruments gains (losses) | — | — | — | — | — | — | ||||||||||||||||||||||||
Total income tax expense (benefit) | — | — | — | — | — | — | ||||||||||||||||||||||||
Other comprehensive income (loss), net of income taxes | -5.8 | 13.8 | — | — | 3.6 | 11.6 | ||||||||||||||||||||||||
Comprehensive income (loss) attributable to The Phoenix Companies, Inc. | -7.9 | 16.4 | — | -12.4 | — | -3.9 | ||||||||||||||||||||||||
Add: Comprehensive income attributable to noncontrolling interests | — | — | — | — | — | — | ||||||||||||||||||||||||
Comprehensive income (loss) | $ | -7.9 | $ | 16.4 | $ | — | $ | -12.4 | $ | — | $ | -3.9 | ||||||||||||||||||
——————— | ||||||||||||||||||||||||||||||
-1 | All amounts are shown before income taxes, unless otherwise noted. | |||||||||||||||||||||||||||||
-2 | Amounts represent the total “Summary of Correction of Investments Errors” which is further aggregated into the “Consolidated Summary of Correction of Errors” in the following pages. | |||||||||||||||||||||||||||||
Increase (decrease) | Summary of Correction of Investments Errors – December 31, 2010 Income Statement Impacts (1) | |||||||||||||||||||||||||||||
($ in millions) | Investments | |||||||||||||||||||||||||||||
OIA | Available-for-Sale | Derivative | Structured | Total | ||||||||||||||||||||||||||
Securities | Valuation | Securities | Investments | |||||||||||||||||||||||||||
Valuation | Bond Call | Errors (2) | ||||||||||||||||||||||||||||
REVENUES | ||||||||||||||||||||||||||||||
Premiums | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||||
Fee income | — | — | — | — | — | — | ||||||||||||||||||||||||
Net investment income | -3.7 | 1.9 | — | — | -2.9 | -4.7 | ||||||||||||||||||||||||
Net realized investment gains (losses): | ||||||||||||||||||||||||||||||
Total OTTI losses | — | — | — | — | -1 | -1 | ||||||||||||||||||||||||
Portion of OTTI losses recognized in OCI | — | — | — | — | 3.0 | 3.0 | ||||||||||||||||||||||||
Net OTTI losses recognized in earnings | — | — | — | — | 2.0 | 2.0 | ||||||||||||||||||||||||
Net realized investment gains (losses), excluding OTTI losses | 0.2 | 0.7 | — | -1.3 | -1.6 | -2 | ||||||||||||||||||||||||
Net realized investment gains (losses) | 0.2 | 0.7 | — | -1.3 | 0.4 | — | ||||||||||||||||||||||||
Gain on debt repurchase | — | — | — | — | — | — | ||||||||||||||||||||||||
Total revenues | -3.5 | 2.6 | — | -1.3 | -2.5 | -4.7 | ||||||||||||||||||||||||
BENEFITS AND EXPENSES | ||||||||||||||||||||||||||||||
Policy benefits, excluding policyholder dividends | — | — | — | — | — | – | ||||||||||||||||||||||||
Policyholder dividends | -7.4 | 0.3 | — | — | -3.1 | -10.2 | ||||||||||||||||||||||||
Policy acquisition cost amortization | — | — | — | 2.9 | — | 2.9 | ||||||||||||||||||||||||
Interest expense on indebtedness | — | — | — | — | — | — | ||||||||||||||||||||||||
Other operating expenses | 1.4 | — | — | — | — | 1.4 | ||||||||||||||||||||||||
Total benefits and expenses | -6 | 0.3 | — | 2.9 | -3.1 | -5.9 | ||||||||||||||||||||||||
Income (loss) from continuing operations before income taxes | 2.5 | 2.3 | — | -4.2 | 0.6 | 1.2 | ||||||||||||||||||||||||
Income tax expense (benefit) | — | — | — | — | — | — | ||||||||||||||||||||||||
Income (loss) from continuing operations | 2.5 | 2.3 | — | -4.2 | 0.6 | 1.2 | ||||||||||||||||||||||||
Noncontrolling interests | -0.5 | — | — | — | — | -0.5 | ||||||||||||||||||||||||
Income (loss) from discontinued operations, net of income taxes | — | — | — | — | — | — | ||||||||||||||||||||||||
Net income (loss) attributable to The Phoenix Companies, Inc. | $ | 3.0 | $ | 2.3 | $ | — | $ | -4.2 | $ | 0.6 | $ | 1.7 | ||||||||||||||||||
——————— | ||||||||||||||||||||||||||||||
-1 | All amounts are shown before income taxes, unless otherwise noted. | |||||||||||||||||||||||||||||
-2 | Amounts represent the total “Summary of Correction of Investments Errors” which is further aggregated into the “Consolidated Summary of Correction of Errors” in the following pages. | |||||||||||||||||||||||||||||
(Continued from previous page) | Summary of Correction of Errors – December 31, 2010 | |||||||||||||||||||||||||||||
Increase (decrease) | Income Statement Impacts (1) | |||||||||||||||||||||||||||||
($ in millions) | Investments | |||||||||||||||||||||||||||||
OIA | Available-for-Sale | Derivative | Structured | Total | ||||||||||||||||||||||||||
Securities | Valuation | Securities | Investments | |||||||||||||||||||||||||||
Valuation | Bond Call | Errors (2) | ||||||||||||||||||||||||||||
COMPREHENSIVE INCOME (LOSS): | ||||||||||||||||||||||||||||||
Net income (loss) attributable to The Phoenix Companies, Inc. | $ | 3.0 | $ | 2.3 | $ | — | $ | -4.2 | $ | 0.6 | $ | 1.7 | ||||||||||||||||||
Other comprehensive income (loss) before income taxes: | ||||||||||||||||||||||||||||||
Net unrealized investment gains before income taxes | -9.9 | 10.5 | — | — | -0.6 | — | ||||||||||||||||||||||||
Non-credit portion of OTTI losses recognized in OCI before income taxes | — | — | — | — | — | — | ||||||||||||||||||||||||
Net pension liability adjustment before income taxes | — | — | — | — | — | — | ||||||||||||||||||||||||
Net unrealized other gains (losses) before income taxes | — | — | — | — | — | — | ||||||||||||||||||||||||
Net unrealized derivative instruments gains (losses) before income taxes | — | — | — | — | — | — | ||||||||||||||||||||||||
Other comprehensive income (loss) before income taxes | -9.9 | 10.5 | — | — | -0.6 | — | ||||||||||||||||||||||||
Less: Income tax expense (benefit) related to: | ||||||||||||||||||||||||||||||
Net unrealized investment gains (losses) | — | — | — | — | — | — | ||||||||||||||||||||||||
Non-credit portion of OTTI losses recognized in OCI | — | — | — | — | — | — | ||||||||||||||||||||||||
Net pension liability adjustment | — | — | — | — | — | — | ||||||||||||||||||||||||
Net unrealized other gains (losses) | — | — | — | — | — | — | ||||||||||||||||||||||||
Net unrealized derivative instruments gains (losses) | — | — | — | — | — | — | ||||||||||||||||||||||||
Total income tax expense (benefit) | — | — | — | — | — | — | ||||||||||||||||||||||||
Other comprehensive income (loss), net of income taxes | -9.9 | 10.5 | — | — | -0.6 | — | ||||||||||||||||||||||||
Comprehensive income (loss) attributable to The Phoenix Companies, Inc. | -6.9 | 12.8 | — | -4.2 | — | 1.7 | ||||||||||||||||||||||||
Add: Comprehensive income attributable to noncontrolling interests | — | — | — | — | — | — | ||||||||||||||||||||||||
Comprehensive income (loss) | $ | -6.9 | $ | 12.8 | $ | — | $ | -4.2 | $ | — | $ | 1.7 | ||||||||||||||||||
——————— | ||||||||||||||||||||||||||||||
-1 | All amounts are shown before income taxes, unless otherwise noted. | |||||||||||||||||||||||||||||
-2 | Amounts represent the total “Summary of Correction of Investments Errors” which are further aggregated into the “Consolidated Summary of Correction of Errors” in the following pages. | |||||||||||||||||||||||||||||
Restated and amended consolidated statement of cash flows | ' | |||||||||||||||||||||||||||||
Increase (decrease) | For the year ended | |||||||||||||||||||||||||||||
($ in millions) | December 31, | |||||||||||||||||||||||||||||
2011 | 2010 | |||||||||||||||||||||||||||||
Consolidated Statement of Cash Flows | ||||||||||||||||||||||||||||||
Cash provided by (used for) operating activities | $ | -299.4 | $ | -364.6 | ||||||||||||||||||||||||||
Cash provided by (used for) investing activities | 138.6 | 180.5 | ||||||||||||||||||||||||||||
Cash provided by (used for) financing activities | 161.6 | 161.8 | ||||||||||||||||||||||||||||
Consolidated Summary of Correction of Errors | ' | |||||||||||||||||||||||||||||
Increase (decrease) | Consolidated Summary of Correction of Errors – December 31, 2011 Balance Sheet Impacts (1) | |||||||||||||||||||||||||||||
($ in millions) | Total | Total | Reinsurance | Pensions | OIA | Changes in Classification | ||||||||||||||||||||||||
Actuarial | Investments (3) | Accounting | Taxable | Cash and | Reinsurance | Reclassify & | Other | Total | ||||||||||||||||||||||
Finance (2) | Income | Suspense | Separately | Restatement | Correction | |||||||||||||||||||||||||
Present | Adjustments | of Errors (4) | ||||||||||||||||||||||||||||
ASSETS: | ||||||||||||||||||||||||||||||
Available-for-sale | $ | — | $ | -91 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | -2 | $ | -93 | ||||||||||
debt securities, at fair value | ||||||||||||||||||||||||||||||
Available-for-sale | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||
equity securities, at fair value | ||||||||||||||||||||||||||||||
Limited partnerships and | — | -35.9 | — | — | — | — | — | — | -0.1 | -36 | ||||||||||||||||||||
other investments | ||||||||||||||||||||||||||||||
Policy loans, | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||
at unpaid principal balances | ||||||||||||||||||||||||||||||
Derivative investments | — | -12.6 | — | — | — | — | — | — | — | -12.6 | ||||||||||||||||||||
Fair value investments | — | 97.5 | — | — | — | — | — | — | -0.1 | 97.4 | ||||||||||||||||||||
Total investments | — | -42 | — | — | — | — | — | — | -2.2 | -44.2 | ||||||||||||||||||||
Cash and cash equivalents | — | 2.0 | — | — | — | -28.4 | — | — | 0.3 | -26.1 | ||||||||||||||||||||
Accrued investment income | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||
Receivables | 17.6 | — | — | — | — | 16.4 | 196.6 | — | 2.9 | 233.5 | ||||||||||||||||||||
Deferred policy acquisition costs | 41.5 | -13.1 | — | — | — | — | — | -42.2 | 0.1 | -13.7 | ||||||||||||||||||||
Deferred income taxes, net | — | — | — | — | — | — | — | — | 2.4 | 2.4 | ||||||||||||||||||||
Other assets | -33.8 | 12.1 | 39.6 | — | — | 8.8 | — | 42.2 | -2.4 | 66.5 | ||||||||||||||||||||
Discontinued operations assets | — | — | — | — | — | — | 14.1 | — | 2.0 | 16.1 | ||||||||||||||||||||
Separate account assets | — | — | — | -0.7 | — | — | — | — | — | -0.7 | ||||||||||||||||||||
Total assets | $ | 25.3 | $ | -41 | $ | 39.6 | $ | -0.7 | $ | — | $ | -3.2 | $ | 210.7 | $ | — | $ | 3.1 | $ | 233.8 | ||||||||||
——————— | ||||||||||||||||||||||||||||||
-1 | All amounts are shown before income taxes, unless otherwise noted. | |||||||||||||||||||||||||||||
-2 | Represents “Summary of Correction of Actuarial Finance Errors” from the previous pages of this Note. | |||||||||||||||||||||||||||||
-3 | Represents “Summary of Correction of Investments Errors from the previous pages of this Note. | |||||||||||||||||||||||||||||
-4 | Amounts represent total correction of errors which is also presented in the “Consolidated Statement of Comprehensive Income” reflected in the tables on the following pages. | |||||||||||||||||||||||||||||
(Continued from previous page) | Consolidated Summary of Correction of Errors – December 31, 2011 Balance Sheet Impacts (1) | |||||||||||||||||||||||||||||
Increase (decrease) | Total | Total | Reinsurance | Pensions | OIA | Changes in Classification | ||||||||||||||||||||||||
($ in millions) | Actuarial | Investments (3) | Accounting | Taxable | Cash and | Reinsurance | Reclassify & | Other | Total | |||||||||||||||||||||
Finance (2) | Income | Suspense | Separately | Restatement | Correction | |||||||||||||||||||||||||
Present | Adjustments | of Errors (4) | ||||||||||||||||||||||||||||
LIABILITIES: | ||||||||||||||||||||||||||||||
Policy liabilities and accruals | $ | 207.4 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 196.6 | $ | -759.8 | $ | 5.3 | $ | -350.5 | ||||||||||
Policyholder deposit funds | 2.9 | — | — | — | — | — | — | — | -0.1 | 2.8 | ||||||||||||||||||||
Dividend obligation | 1.0 | -7.6 | — | — | — | — | — | 759.8 | -0.7 | 752.5 | ||||||||||||||||||||
Indebtedness | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||
Other liabilities | 0.2 | 12.5 | — | 22.9 | 6.9 | -3.2 | — | — | 5.0 | 44.3 | ||||||||||||||||||||
Discontinued operations | — | — | — | — | — | — | 14.1 | — | 2.0 | 16.1 | ||||||||||||||||||||
liabilities | ||||||||||||||||||||||||||||||
Separate account liabilities | — | — | — | -0.7 | — | — | — | — | — | -0.7 | ||||||||||||||||||||
Total liabilities | 211.5 | 4.9 | — | 22.2 | 6.9 | -3.2 | 210.7 | — | 11.5 | 464.5 | ||||||||||||||||||||
STOCKHOLDERS’ EQUITY: | ||||||||||||||||||||||||||||||
Common stock | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||
Additional paid-in capital | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||
Accumulated other | 19.1 | 11.6 | — | -13.4 | — | — | — | — | -49.7 | -32.4 | ||||||||||||||||||||
comprehensive loss | ||||||||||||||||||||||||||||||
Accumulated deficit | -114.9 | -13.8 | 3.0 | 5.3 | -3.3 | — | — | — | 11.1 | -112.6 | ||||||||||||||||||||
Treasury stock | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||
Noncontrolling interests | — | -1 | — | — | — | — | — | — | — | -1 | ||||||||||||||||||||
Total stockholders’ equity – | -95.8 | -3.2 | 3.0 | -8.1 | -3.3 | — | — | — | -38.6 | -146 | ||||||||||||||||||||
periods presented (5) | ||||||||||||||||||||||||||||||
Total stockholders’ equity – | -90.4 | -42.7 | 36.6 | -14.8 | -3.6 | — | — | — | 30.2 | -84.7 | ||||||||||||||||||||
cumulative impact (6) | ||||||||||||||||||||||||||||||
Total stockholders’ equity –impact | -186.2 | -45.9 | 39.6 | -22.9 | -6.9 | — | — | — | -8.4 | -230.7 | ||||||||||||||||||||
Total liabilities and | $ | 25.3 | $ | -41 | $ | 39.6 | $ | -0.7 | $ | — | $ | -3.2 | $ | 210.7 | $ | — | $ | 3.1 | $ | 233.8 | ||||||||||
stockholders’ equity | ||||||||||||||||||||||||||||||
——————— | ||||||||||||||||||||||||||||||
-1 | All amounts are shown before income taxes, unless otherwise noted. | |||||||||||||||||||||||||||||
-2 | Represents “Summary of Correction of Actuarial Finance Errors” from the previous pages of this Note. | |||||||||||||||||||||||||||||
-3 | Represents “Summary of Correction of Investments Errors from the previous pages of this Note. | |||||||||||||||||||||||||||||
-4 | Amounts represent total correction of errors which is also presented in the “Consolidated Statement of Comprehensive Income” reflected in the tables on the following pages. | |||||||||||||||||||||||||||||
-5 | Amounts represent restatement changes made to the 2011 and 2010 periods as presented. | |||||||||||||||||||||||||||||
-6 | Amounts represent cumulative impact of restatement changes made to periods prior to 2010. | |||||||||||||||||||||||||||||
Increase (decrease) | Summary of Correction of Errors – December 31, 2011 Income Statement Impacts (1) | |||||||||||||||||||||||||||||
($ in millions) | Consolidated | |||||||||||||||||||||||||||||
Total | Total | Reinsurance | Pensions | OIA | Other | Total | ||||||||||||||||||||||||
Actuarial | Investments (3) | Accounting | Taxable | Restatement | Correction | |||||||||||||||||||||||||
Finance (2) | Income | Adjustments | of Errors (4) | |||||||||||||||||||||||||||
REVENUES | ||||||||||||||||||||||||||||||
Premiums | $ | -10.4 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | -10.4 | ||||||||||||||||
Fee income | -0.3 | — | — | — | — | — | -0.3 | |||||||||||||||||||||||
Net investment income | — | 12.9 | — | — | — | 0.1 | 13.0 | |||||||||||||||||||||||
Net realized investment gains (losses): | ||||||||||||||||||||||||||||||
Total OTTI losses | — | 4.5 | — | — | — | -5.2 | -0.7 | |||||||||||||||||||||||
Portion of OTTI losses recognized in OCI | — | -3.5 | — | — | — | 3.1 | -0.4 | |||||||||||||||||||||||
Net OTTI losses recognized in earnings | — | 1.0 | — | — | — | -2.1 | -1.1 | |||||||||||||||||||||||
Net realized investment gains (losses), excluding OTTI losses | (1.1) | -17.4 | — | — | — | 3.9 | -14.6 | |||||||||||||||||||||||
Net realized investment gains (losses) | (1.1) | -16.4 | — | — | — | 1.8 | -15.7 | |||||||||||||||||||||||
Gain on debt repurchase | — | — | — | — | — | 0.2 | 0.2 | |||||||||||||||||||||||
Total revenues | -11.8 | -3.5 | — | — | — | 2.1 | -13.2 | |||||||||||||||||||||||
BENEFITS AND EXPENSES | ||||||||||||||||||||||||||||||
Policy benefits, excluding policyholder dividends | 45.8 | — | 3.3 | — | — | -0.1 | 49.0 | |||||||||||||||||||||||
Policyholder dividends | -1.3 | 11.9 | — | — | — | 1.7 | 12.3 | |||||||||||||||||||||||
Policy acquisition cost amortization | -14.5 | -0.6 | — | — | — | -0.2 | -15.3 | |||||||||||||||||||||||
Interest expense on indebtedness | — | — | — | — | — | — | — | |||||||||||||||||||||||
Other operating expenses | 6.6 | 1.2 | — | -7.1 | — | 0.7 | 1.4 | |||||||||||||||||||||||
Total benefits and expenses | 36.6 | 12.5 | 3.3 | -7.1 | — | 2.1 | 47.4 | |||||||||||||||||||||||
Income (loss) from continuing operations before income taxes | -48.4 | -16 | -3.3 | 7.1 | — | — | -60.6 | |||||||||||||||||||||||
Income tax expense (benefit) | — | — | — | — | -1.6 | 3.0 | 1.4 | |||||||||||||||||||||||
Income (loss) from continuing operations | -48.4 | -16 | -3.3 | 7.1 | 1.6 | -3 | -62 | |||||||||||||||||||||||
Noncontrolling interests | — | -0.5 | — | — | — | — | -0.5 | |||||||||||||||||||||||
Income (loss) from discontinued operations, net of income taxes | — | — | — | — | — | 0.4 | 0.4 | |||||||||||||||||||||||
Net income (loss) attributable to The Phoenix Companies, Inc. | $ | -48.4 | $ | -15.5 | $ | -3.3 | $ | 7.1 | $ | 1.6 | $ | -2.6 | $ | -61.1 | ||||||||||||||||
——————— | ||||||||||||||||||||||||||||||
-1 | All amounts are shown before income taxes, unless otherwise noted. | |||||||||||||||||||||||||||||
-2 | Represents “Summary of Correction of Actuarial Finance Errors” from the previous pages of this Note. | |||||||||||||||||||||||||||||
-3 | Represents “Summary of Correction of Investments Errors from the previous pages of this Note. | |||||||||||||||||||||||||||||
-4 | Amounts represent total correction of errors which is also presented in the “Consolidated Statement of Comprehensive Income” reflected in the tables on the following pages. | |||||||||||||||||||||||||||||
(Continued from previous page) | Summary of Correction of Errors – December 31, 2011 Income Statement Impacts (1) | |||||||||||||||||||||||||||||
Increase (decrease) | Consolidated | |||||||||||||||||||||||||||||
($ in millions) | Total | Total | Reinsurance | Pensions | OIA | Other | Total | |||||||||||||||||||||||
Actuarial | Investments (3) | Accounting | Taxable | Restatement | Correction | |||||||||||||||||||||||||
Finance (2) | Income | Adjustments | of Errors (4) | |||||||||||||||||||||||||||
COMPREHENSIVE INCOME (LOSS): | ||||||||||||||||||||||||||||||
Net income (loss) attributable to The Phoenix Companies, Inc. | $ | -48.4 | $ | -15.5 | $ | -3.3 | $ | 7.1 | $ | 1.6 | $ | -2.6 | $ | -61.1 | ||||||||||||||||
Other comprehensive income (loss) before income taxes: | ||||||||||||||||||||||||||||||
Net unrealized investment gains before income taxes (5) | -2.6 | 11.6 | — | — | — | -0.8 | 8.2 | |||||||||||||||||||||||
Non-credit portion of OTTI losses recognized in OCI | — | — | — | — | — | -1.3 | -1.3 | |||||||||||||||||||||||
before income taxes (5) | ||||||||||||||||||||||||||||||
Net pension liability adjustment before income taxes | — | — | — | -14.9 | — | — | -14.9 | |||||||||||||||||||||||
Net unrealized other gains (losses) before income taxes | — | — | — | — | — | — | ||||||||||||||||||||||||
Net unrealized derivative instruments gains (losses) | — | — | — | — | — | -0.3 | -0.3 | |||||||||||||||||||||||
before income taxes (5) | ||||||||||||||||||||||||||||||
Other comprehensive income (loss) before income taxes | -2.6 | 11.6 | — | -14.9 | — | -2.4 | -8.3 | |||||||||||||||||||||||
Less: Income tax expense (benefit) related to: | ||||||||||||||||||||||||||||||
Net unrealized investment gains (losses) (5) | — | — | — | — | — | 11.6 | 11.6 | |||||||||||||||||||||||
Non-credit portion of OTTI losses recognized in OCI (5) | — | — | — | — | — | -0.5 | -0.5 | |||||||||||||||||||||||
Net pension liability adjustment | — | — | — | — | — | — | — | |||||||||||||||||||||||
Net unrealized other gains (losses) | — | — | — | — | — | — | — | |||||||||||||||||||||||
Net unrealized derivative instruments gains (losses) | — | — | — | — | — | — | — | |||||||||||||||||||||||
Total income tax expense (benefit) | — | — | — | 11.1 | 11.1 | |||||||||||||||||||||||||
Other comprehensive income (loss), net of income taxes | -2.6 | 11.6 | — | -14.9 | — | -13.5 | -19.4 | |||||||||||||||||||||||
Comprehensive income (loss) attributable to The Phoenix Companies, Inc. | -51 | -3.9 | -3.3 | -7.8 | 1.6 | -16.1 | -80.5 | |||||||||||||||||||||||
Add: Comprehensive income attributable to noncontrolling interests | — | — | — | — | — | -0.5 | -0.5 | |||||||||||||||||||||||
Comprehensive income (loss) | $ | -51 | $ | -3.9 | $ | -3.3 | $ | -7.8 | $ | 1.6 | $ | -16.6 | $ | -81 | ||||||||||||||||
——————— | ||||||||||||||||||||||||||||||
-1 | All amounts are shown before income taxes, unless otherwise noted. | |||||||||||||||||||||||||||||
-2 | Represents “Summary of Correction of Actuarial Finance Errors” from the previous pages of this Note. | |||||||||||||||||||||||||||||
-3 | Represents “Summary of Correction of Investments Errors from the previous pages of this Note. | |||||||||||||||||||||||||||||
-4 | Amounts represent total correction of errors which is also presented in the “Consolidated Statement of Comprehensive Income” reflected in the tables on the following pages. | |||||||||||||||||||||||||||||
-5 | In addition to adjustments described within this footnote the correction of errors column contains reclassifications related to changes in presentation of components of other comprehensive income. | |||||||||||||||||||||||||||||
(6) 2. | Restatement and Amendment of Previously Reported Financial Information (continued) | |||||||||||||||||||||||||||||
Increase (decrease) | Summary of Correction of Errors – December 31, 2010 Income Statement Impacts (1) | |||||||||||||||||||||||||||||
($ in millions) | Consolidated | |||||||||||||||||||||||||||||
Total | Total | Reinsurance | Pensions | OIA | Other | Total | ||||||||||||||||||||||||
Actuarial | Investments (3) | Accounting | Taxable | Restatement | Correction | |||||||||||||||||||||||||
Finance (2) | Income | Adjustments | of Errors (4) | |||||||||||||||||||||||||||
REVENUES | ||||||||||||||||||||||||||||||
Premiums | $ | -13.9 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | -13.9 | ||||||||||||||||
Fee income | 3.4 | — | — | — | — | -0.1 | 3.3 | |||||||||||||||||||||||
Net investment income | — | -4.7 | — | — | — | 0.6 | -4.1 | |||||||||||||||||||||||
Net realized investment gains (losses): | ||||||||||||||||||||||||||||||
Total OTTI losses | — | -1 | — | — | — | -1.1 | -2.1 | |||||||||||||||||||||||
Portion of OTTI losses recognized in OCI | — | 3.0 | — | — | — | 0.1 | 3.1 | |||||||||||||||||||||||
Net OTTI losses recognized in earnings | — | 2.0 | — | — | — | -1 | 1.0 | |||||||||||||||||||||||
Net realized investment gains (losses), excluding OTTI losses | -4.9 | -2 | — | — | — | 4.6 | -2.3 | |||||||||||||||||||||||
Net realized investment gains (losses) | -4.9 | — | — | — | — | 3.6 | -1.3 | |||||||||||||||||||||||
Gain on debt repurchase | — | — | — | — | — | — | — | |||||||||||||||||||||||
Total revenues | -15.4 | -4.7 | — | — | — | 4.1 | -16 | |||||||||||||||||||||||
BENEFITS AND EXPENSES | ||||||||||||||||||||||||||||||
Policy benefits, excluding policyholder dividends | 25.9 | — | -6.3 | — | — | — | 19.6 | |||||||||||||||||||||||
Policyholder dividends | -0.5 | -10.2 | — | — | — | 2.7 | -8 | |||||||||||||||||||||||
Policy acquisition cost amortization | 26.0 | 2.9 | — | — | — | — | 28.9 | |||||||||||||||||||||||
Interest expense on indebtedness | — | — | — | — | — | — | — | |||||||||||||||||||||||
Other operating expenses | -0.3 | 1.4 | — | 1.7 | — | -7.6 | -4.8 | |||||||||||||||||||||||
Total benefits and expenses | 51.1 | -5.9 | -6.3 | 1.7 | — | -4.9 | 35.7 | |||||||||||||||||||||||
Income (loss) from continuing operations before income taxes | -66.5 | 1.2 | 6.3 | -1.7 | — | 9.0 | -51.7 | |||||||||||||||||||||||
Income tax expense (benefit) | — | — | — | — | 4.9 | -20.3 | -15.4 | |||||||||||||||||||||||
Income (loss) from continuing operations | -66.5 | 1.2 | 6.3 | -1.7 | -4.9 | 29.3 | -36.3 | |||||||||||||||||||||||
Noncontrolling interests | — | -0.5 | — | — | — | — | -0.5 | |||||||||||||||||||||||
Income (loss) from discontinued operations, net of income taxes | — | — | — | — | — | -15.6 | -5 | -15.6 | ||||||||||||||||||||||
Net income (loss) attributable to The Phoenix Companies, Inc. | $ | -66.5 | $ | 1.7 | $ | 6.3 | $ | -1.7 | $ | -4.9 | $ | 13.7 | $ | -51.4 | ||||||||||||||||
——————— | ||||||||||||||||||||||||||||||
-1 | All amounts are shown before income taxes, unless otherwise noted. | |||||||||||||||||||||||||||||
-2 | Represents “Summary of Correction of Actuarial Finance Errors” from the previous pages of this Note. | |||||||||||||||||||||||||||||
-3 | Represents “Summary of Correction of Investments Errors from the previous pages of this Note. | |||||||||||||||||||||||||||||
-4 | Amounts represent total correction of errors which is also presented in the “Consolidated Statement of Comprehensive Income” reflected in the tables on the following pages. | |||||||||||||||||||||||||||||
-5 | Amount represents the correction of an error of $15.6 million which decreased the estimated loss on the sale of PFG initially recorded in 2009. | |||||||||||||||||||||||||||||
(Continued from previous page) | Summary of Correction of Errors – December 31, 2010 Income Statement Impacts (1) | |||||||||||||||||||||||||||||
Increase (decrease) | Consolidated | |||||||||||||||||||||||||||||
($ in millions) | Total | Total | Reinsurance | Pensions | OIA | Other | Total | |||||||||||||||||||||||
Actuarial | Investments (3) | Accounting | Taxable | Restatement | Correction | |||||||||||||||||||||||||
Finance (2) | Income | Adjustments | of Errors (4) | |||||||||||||||||||||||||||
COMPREHENSIVE INCOME (LOSS): | ||||||||||||||||||||||||||||||
Net income (loss) attributable to The Phoenix Companies, Inc. | $ | -66.5 | $ | 1.7 | $ | 6.3 | $ | -1.7 | $ | -4.9 | $ | 13.7 | $ | -51.4 | ||||||||||||||||
Other comprehensive income (loss) before income taxes: | ||||||||||||||||||||||||||||||
Net unrealized investment gains before income taxes (5) | 21.7 | — | — | — | — | 14.6 | 36.3 | |||||||||||||||||||||||
Non-credit portion of OTTI losses recognized in OCI before income taxes (5) | — | — | — | — | — | 10.5 | 10.5 | |||||||||||||||||||||||
Net pension liability adjustment before income taxes | — | — | — | 1.4 | — | — | 1.4 | |||||||||||||||||||||||
Net unrealized other gains (losses) before income taxes | — | — | — | — | — | — | — | |||||||||||||||||||||||
Net unrealized derivative instruments gains (losses) before income taxes (5) | — | — | — | — | — | -28.3 | -28.3 | |||||||||||||||||||||||
Other comprehensive income (loss) before income taxes | 21.7 | — | — | 1.4 | — | -3.2 | 19.9 | |||||||||||||||||||||||
Less: Income tax expense (benefit) related to: | ||||||||||||||||||||||||||||||
Net unrealized investment gains (losses) (5) | — | — | — | — | — | 28.1 | 28.1 | |||||||||||||||||||||||
Non-credit portion of OTTI losses recognized in OCI (5) | — | — | — | — | — | 4.9 | 4.9 | |||||||||||||||||||||||
Net pension liability adjustment | — | — | — | — | — | — | — | |||||||||||||||||||||||
Net unrealized other gains (losses) | — | — | — | — | — | — | — | |||||||||||||||||||||||
Net unrealized derivative instruments gains (losses) | — | — | — | — | — | — | — | |||||||||||||||||||||||
Total income tax expense (benefit) | — | — | — | — | — | 33.0 | 33.0 | |||||||||||||||||||||||
Other comprehensive income (loss), net of income taxes | 21.7 | — | — | 1.4 | — | -36.2 | -13.1 | |||||||||||||||||||||||
Comprehensive income (loss) attributable to The Phoenix Companies, Inc. | -44.8 | 1.7 | 6.3 | -0.3 | -4.9 | -22.5 | -64.5 | |||||||||||||||||||||||
Add: Comprehensive income attributable to noncontrolling interests | — | — | — | — | — | -0.5 | -0.5 | |||||||||||||||||||||||
Comprehensive income (loss) | $ | -44.8 | $ | 1.7 | $ | 6.3 | $ | -0.3 | $ | -4.9 | $ | -23 | $ | -65 | ||||||||||||||||
——————— | ||||||||||||||||||||||||||||||
-1 | All amounts are shown before income taxes, unless otherwise noted. | |||||||||||||||||||||||||||||
-2 | Represents “Summary of Correction of Actuarial Finance Errors” from the previous pages of this Note. | |||||||||||||||||||||||||||||
-3 | Represents “Summary of Correction of Investments Errors from the previous pages of this Note. | |||||||||||||||||||||||||||||
-4 | Amounts represent total correction of errors which is also presented in the “Consolidated Statement of Comprehensive Income” reflected in the tables on the following pages. | |||||||||||||||||||||||||||||
-5 | In addition to adjustments described within this footnote the correction of errors column contains reclassifications related to changes in presentation of components of other comprehensive income. | |||||||||||||||||||||||||||||
Restatement of Consolidated Financial Statements | ' | |||||||||||||||||||||||||||||
Consolidated Balance Sheet | ||||||||||||||||||||||||||||||
($ in millions, except share data) | As of and for the year ended December 31, 2011 | |||||||||||||||||||||||||||||
As previously | Correction | Adjusted | Retrospective | As restated | ||||||||||||||||||||||||||
reported | of errors (1) | prior to the | Adoption (2) | and amended | ||||||||||||||||||||||||||
retrospective | ||||||||||||||||||||||||||||||
adoption | ||||||||||||||||||||||||||||||
ASSETS: | ||||||||||||||||||||||||||||||
Available-for-sale debt securities, at fair value | $ | 11,890.0 | $ | -93 | $ | 11,797.0 | $ | — | $ | 11,797.0 | ||||||||||||||||||||
Available-for-sale equity securities, at fair value | 35.7 | — | 35.7 | — | 35.7 | |||||||||||||||||||||||||
Limited partnerships and other investments | 601.3 | -36 | 565.3 | — | 565.3 | |||||||||||||||||||||||||
Policy loans, at unpaid principal balances | 2,379.3 | — | 2,379.3 | — | 2,379.3 | |||||||||||||||||||||||||
Derivative investments | 174.8 | -12.6 | 162.2 | — | 162.2 | |||||||||||||||||||||||||
Fair value investments | 86.6 | 97.4 | 184.0 | — | 184.0 | |||||||||||||||||||||||||
Total investments | 15,167.7 | -44.2 | 15,123.5 | — | 15,123.5 | |||||||||||||||||||||||||
Cash and cash equivalents | 194.3 | -26.1 | 168.2 | — | 168.2 | |||||||||||||||||||||||||
Accrued investment income | 175.6 | — | 175.6 | — | 175.6 | |||||||||||||||||||||||||
Receivables | 415.1 | 233.5 | 648.6 | — | 648.6 | |||||||||||||||||||||||||
Deferred policy acquisition costs | 1,317.6 | -13.7 | 1,303.9 | -184.7 | 1,119.2 | |||||||||||||||||||||||||
Deferred income taxes, net | 118.2 | 2.4 | 120.6 | — | 120.6 | |||||||||||||||||||||||||
Other assets | 164.6 | 66.5 | 231.1 | -1 | 230.1 | |||||||||||||||||||||||||
Discontinued operations assets | 69.2 | 16.1 | 85.3 | — | 85.3 | |||||||||||||||||||||||||
Separate account assets | 3,817.6 | -0.7 | 3,816.9 | — | 3,816.9 | |||||||||||||||||||||||||
Total assets | $ | 21,439.9 | $ | 233.8 | $ | 21,673.7 | $ | -185.7 | $ | 21,488.0 | ||||||||||||||||||||
LIABILITIES: | ||||||||||||||||||||||||||||||
Policy liabilities and accruals (3) | $ | 12,967.8 | $ | -350.5 | $ | 12,617.3 | $ | -19.2 | $ | 12,598.1 | ||||||||||||||||||||
Policyholder deposit funds | 2,429.4 | 2.8 | 2,432.2 | — | 2,432.2 | |||||||||||||||||||||||||
Dividend obligations (4) | — | 752.5 | 752.5 | 752.5 | ||||||||||||||||||||||||||
Indebtedness | 426.9 | — | 426.9 | — | 426.9 | |||||||||||||||||||||||||
Other liabilities | 613.7 | 44.3 | 658.0 | — | 658.0 | |||||||||||||||||||||||||
Discontinued operations liabilities | 58.3 | 16.1 | 74.4 | — | 74.4 | |||||||||||||||||||||||||
Separate account liabilities | 3,817.6 | -0.7 | 3,816.9 | — | 3,816.9 | |||||||||||||||||||||||||
Total liabilities | 20,313.7 | 464.5 | 20,778.2 | -19.2 | 20,759.0 | |||||||||||||||||||||||||
COMMITMENTS AND CONTINGENT LIABILITIES (Notes 23, 24, & 25) | ||||||||||||||||||||||||||||||
STOCKHOLDERS’ EQUITY: | ||||||||||||||||||||||||||||||
Common stock, $.01 par value: 5.8 million | 1.3 | — | 1.3 | — | 1.3 | |||||||||||||||||||||||||
shares outstanding (5) | ||||||||||||||||||||||||||||||
Additional paid-in capital | 2,630.5 | — | 2,630.5 | — | 2,630.5 | |||||||||||||||||||||||||
Accumulated other comprehensive income (loss) | -170.7 | -135.5 | -274.2 | 43.5 | -230.7 | |||||||||||||||||||||||||
Accumulated deficit | -1,155.40 | -163.3 | -1,318.70 | -210 | -1,528.70 | |||||||||||||||||||||||||
Treasury stock, at cost: 0.6 million shares (5) | -179.5 | — | -179.5 | — | -179.5 | |||||||||||||||||||||||||
Total The Phoenix Companies, Inc. | 1,126.2 | -233.5 | 892.7 | -166.5 | 726.2 | |||||||||||||||||||||||||
stockholders’ equity | ||||||||||||||||||||||||||||||
Noncontrolling interests | — | 2.8 | 2.8 | — | 2.8 | |||||||||||||||||||||||||
Total stockholders’ equity | 1,126.2 | -230.7 | 895.5 | -166.5 | 729.0 | |||||||||||||||||||||||||
Total liabilities and stockholders’ equity | $ | 21,439.9 | $ | 233.8 | $ | 21,673.7 | $ | -185.7 | $ | 21,488.0 | ||||||||||||||||||||
——————— | ||||||||||||||||||||||||||||||
-1 | Adjustments related to the correction of errors reflect amounts prior to the retrospective adoption of amended guidance to ASC 944, Financial Services – Insurance (ASU 2010-26). See footnote 2 below for additional information regarding these amounts and the retrospective adoption. | |||||||||||||||||||||||||||||
-2 | Adjustments related to the retrospective adoption of amended guidance to ASC 944, Financial Services – Insurance (ASU 2010-26), have been updated from those originally disclosed in the First Quarter 2012 Quarterly Report on Form 10-Q filing to reflect the correction of errors identified related to the adoption of the amended guidance as well as indirect impact of the correction of errors associated with the restatement. | |||||||||||||||||||||||||||||
-3 | Included within policyholder liabilities and accruals is the post-ASU gross profits followed by losses reserve of $211.8 million. The corresponding net post-ASU amount of $200.5 million reported within the consolidated financial statements includes $(11.2) million of shadow profits followed by losses, both of which are discussed further within the “Actuarial Finance” section of this Note. | |||||||||||||||||||||||||||||
-4 | Dividend obligations were previously included in policy liabilities and accruals. | |||||||||||||||||||||||||||||
-5 | All share amounts for all periods reflect the 1-for-20 reverse stock split, which was effective August 10, 2012. See Note 11 to these consolidated financial statements for additional information on the reverse stock split. | |||||||||||||||||||||||||||||
Consolidated Statement of Comprehensive Income | ||||||||||||||||||||||||||||||
($ in millions, except share data) | As of and for the year ended December 31, 2011 | |||||||||||||||||||||||||||||
As previously | Correction | Adjusted | Retrospective | As restated | ||||||||||||||||||||||||||
reported | of errors (1) | prior to the | Adoption (2) | and amended | ||||||||||||||||||||||||||
retrospective | ||||||||||||||||||||||||||||||
adoption | ||||||||||||||||||||||||||||||
REVENUES: | ||||||||||||||||||||||||||||||
Premiums | $ | 459.1 | $ | -10.4 | $ | 448.7 | $ | — | $ | 448.7 | ||||||||||||||||||||
Fee income | 597.1 | -0.3 | 596.8 | — | 596.8 | |||||||||||||||||||||||||
Net investment income | 809.9 | 13.0 | 822.9 | — | 822.9 | |||||||||||||||||||||||||
Net realized investment gains (losses): | ||||||||||||||||||||||||||||||
Total OTTI losses | -64.6 | -0.7 | -65.3 | — | -65.3 | |||||||||||||||||||||||||
Portion of OTTI losses recognized in OCI | 38.9 | -0.4 | 38.5 | — | 38.5 | |||||||||||||||||||||||||
Net OTTI losses recognized in earnings | -25.7 | -1.1 | -26.8 | — | -26.8 | |||||||||||||||||||||||||
Net realized investment gains (losses), | 9.3 | -14.6 | -5.3 | — | -5.3 | |||||||||||||||||||||||||
excluding OTTI losses | ||||||||||||||||||||||||||||||
Net realized investment losses | -16.4 | -15.7 | -32.1 | — | -32.1 | |||||||||||||||||||||||||
Gain on debt repurchase | — | 0.2 | 0.2 | — | 0.2 | |||||||||||||||||||||||||
Total revenues | 1,849.7 | -13.2 | 1,836.5 | — | 1,836.5 | |||||||||||||||||||||||||
BENEFITS AND EXPENSES: | ||||||||||||||||||||||||||||||
Policy benefits, excluding policyholder dividends | 1,083.2 | 49.0 | 1,132.2 | 4.8 | 1,137.0 | |||||||||||||||||||||||||
Policyholder dividends | 246.9 | 12.3 | 259.2 | — | 259.2 | |||||||||||||||||||||||||
Policy acquisition cost amortization | 210.6 | -15.2 | 195.4 | -37.5 | 157.9 | |||||||||||||||||||||||||
Interest expense on indebtedness | 31.8 | — | 31.8 | — | 31.8 | |||||||||||||||||||||||||
Other operating expenses | 245.2 | 1.4 | 246.6 | 1.3 | 247.9 | |||||||||||||||||||||||||
Total benefits and expenses | 1,817.7 | 47.5 | 1,865.2 | -31.4 | 1,833.8 | |||||||||||||||||||||||||
Income (loss) from continuing operations | 32.0 | -60.7 | -28.7 | 31.4 | 2.7 | |||||||||||||||||||||||||
before income taxes | ||||||||||||||||||||||||||||||
Income tax benefit | 1.9 | 1.4 | 3.3 | 9.0 | 12.3 | |||||||||||||||||||||||||
Income (loss) from continuing operations | 30.1 | -62.1 | -32 | 22.4 | -9.6 | |||||||||||||||||||||||||
Income (loss) from discontinued operations, | -22 | 0.4 | -21.6 | — | -21.6 | |||||||||||||||||||||||||
net of income taxes | ||||||||||||||||||||||||||||||
Net income (loss) | 8.1 | -61.7 | -53.6 | 22.4 | -31.2 | |||||||||||||||||||||||||
Less: Net income (loss) attributable to | — | -0.5 | -0.5 | — | -0.5 | |||||||||||||||||||||||||
noncontrolling interests | ||||||||||||||||||||||||||||||
Net income (loss) attributable to | $ | 8.1 | $ | -61.2 | $ | -53.1 | $ | 22.4 | $ | -30.7 | ||||||||||||||||||||
The Phoenix Companies, Inc. | ||||||||||||||||||||||||||||||
(Continued from previous page) | Consolidated Statement of Comprehensive Income | |||||||||||||||||||||||||||||
($ in millions, except share data) | As of and for the year ended December 31, 2011 | |||||||||||||||||||||||||||||
As previously | Correction | Adjusted | Retrospective | As restated | ||||||||||||||||||||||||||
reported | of errors (1) | prior to the | Adoption (2) | and amended | ||||||||||||||||||||||||||
retrospective | ||||||||||||||||||||||||||||||
adoption | ||||||||||||||||||||||||||||||
COMPREHENSIVE INCOME (LOSS): | ||||||||||||||||||||||||||||||
Net income (loss) attributable to | $ | 8.1 | $ | -61.2 | $ | -53.1 | $ | 22.4 | $ | -30.7 | ||||||||||||||||||||
The Phoenix Companies, Inc. | ||||||||||||||||||||||||||||||
Less: Net income (loss) attributable to | — | -0.5 | -0.5 | — | -0.5 | |||||||||||||||||||||||||
noncontrolling interests | ||||||||||||||||||||||||||||||
Net income (loss) | 8.1 | -61.7 | -53.6 | 22.4 | -31.2 | |||||||||||||||||||||||||
Other comprehensive income (loss) | ||||||||||||||||||||||||||||||
before income taxes: | ||||||||||||||||||||||||||||||
Net unrealized investment gains | 77.5 | 8.2 | 85.7 | 6.3 | 92.0 | |||||||||||||||||||||||||
before income taxes (5) | ||||||||||||||||||||||||||||||
Non-credit portion of OTTI losses | -32.5 | -1.3 | -33.8 | — | -33.8 | |||||||||||||||||||||||||
recognized in OCI before income taxes (5) | ||||||||||||||||||||||||||||||
Net pension liability adjustment | -84.2 | -14.9 | -99.1 | — | -99.1 | |||||||||||||||||||||||||
before income taxes | ||||||||||||||||||||||||||||||
Net unrealized other gains (losses) | — | — | — | — | — | |||||||||||||||||||||||||
before income taxes | ||||||||||||||||||||||||||||||
Net unrealized derivative instruments gains (losses) | 0.3 | -0.3 | — | — | — | |||||||||||||||||||||||||
before income taxes (5) | ||||||||||||||||||||||||||||||
Other comprehensive income (loss) | -38.9 | -8.3 | -47.2 | 6.3 | -40.9 | |||||||||||||||||||||||||
before income taxes | ||||||||||||||||||||||||||||||
Less: Income tax expense (benefit) related to: | ||||||||||||||||||||||||||||||
Net unrealized investment gains (losses) | 9.4 | 11.6 | 21.0 | -8.9 | 12.1 | |||||||||||||||||||||||||
Non-credit portion of OTTI losses | -11.4 | -0.4 | -11.8 | — | -11.8 | |||||||||||||||||||||||||
recognized in OCI (5) | ||||||||||||||||||||||||||||||
Net pension liability adjustment (5) | — | — | — | — | — | |||||||||||||||||||||||||
Net unrealized other gains (losses) | — | — | — | — | ||||||||||||||||||||||||||
Net unrealized derivative instruments | — | — | — | — | — | |||||||||||||||||||||||||
gains (losses) | ||||||||||||||||||||||||||||||
Total income tax benefit | -2 | 11.2 | 9.2 | -8.9 | 0.3 | |||||||||||||||||||||||||
Other comprehensive income (loss), | -36.9 | -19.5 | -56.4 | 15.2 | -41.2 | |||||||||||||||||||||||||
net of income taxes | ||||||||||||||||||||||||||||||
Comprehensive income (loss) | -28.8 | $ | -81.2 | $ | -110 | $ | 37.6 | $ | -72.4 | |||||||||||||||||||||
Less: Comprehensive income (loss) attributable to | — | -0.5 | -0.5 | — | -0.5 | |||||||||||||||||||||||||
noncontrolling interests, net of income taxes | ||||||||||||||||||||||||||||||
Comprehensive income (loss) attributable to | $ | -28.8 | $ | -80.7 | $ | -109.5 | $ | 37.6 | $ | -71.9 | ||||||||||||||||||||
The Phoenix Companies, Inc. | ||||||||||||||||||||||||||||||
(Continued on next page) | ||||||||||||||||||||||||||||||
(Continued from previous page) | Consolidated Statement of Comprehensive Income | |||||||||||||||||||||||||||||
($ in millions, except share data) | As of and for the year ended December 31, 2011 | |||||||||||||||||||||||||||||
As previously | Correction | Adjusted | Retrospective | As restated | ||||||||||||||||||||||||||
reported | of errors (1) | prior to the | Adoption (2) | and amended | ||||||||||||||||||||||||||
retrospective | ||||||||||||||||||||||||||||||
adoption | ||||||||||||||||||||||||||||||
EARNINGS (LOSS) PER SHARE: (3) | ||||||||||||||||||||||||||||||
Earnings (loss) from continuing operations – basic | $ | 5.17 | $ | -10.68 | $ | 3.85 | $ | -1.65 | ||||||||||||||||||||||
Earnings (loss) from continuing operations – diluted | $ | 5.10 | $ | -10.68 | $ | 3.85 | $ | -1.65 | ||||||||||||||||||||||
Earnings (loss) from discontinued operations – basic | $ | -3.78 | $ | 0.07 | $ | — | $ | -3.71 | ||||||||||||||||||||||
Earnings (loss) from discontinued operations – diluted | $ | -3.78 | $ | 0.07 | $ | — | $ | -3.71 | ||||||||||||||||||||||
Net earnings (loss) attributable to | $ | 1.39 | $ | -10.52 | $ | 3.85 | $ | -5.28 | ||||||||||||||||||||||
The Phoenix Companies, Inc. – basic | ||||||||||||||||||||||||||||||
Net earnings (loss) attributable to | $ | 1.37 | $ | -10.52 | $ | 3.85 | $ | -5.28 | ||||||||||||||||||||||
The Phoenix Companies, Inc. – diluted | ||||||||||||||||||||||||||||||
Basic weighted-average common shares outstanding | 5,826 | 5,815 | -4 | 5,815 | 5,815 | |||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||||||
Diluted weighted-average common shares | 5,898 | 5,815 | -4 | 5,815 | 5,815 | |||||||||||||||||||||||||
outstanding (in thousands) | ||||||||||||||||||||||||||||||
——————— | ||||||||||||||||||||||||||||||
-1 | Adjustments related to the correction of errors reflect amounts prior to the retrospective adoption of amended guidance to ASC 944, Financial Services – Insurance (ASU 2010-26). See footnote 2 below for additional information regarding these amounts and the retrospective adoption. | |||||||||||||||||||||||||||||
-2 | Adjustments related to the retrospective adoption of amended guidance to ASC 944, Financial Services – Insurance (ASU 2010-26), have been updated from those originally disclosed in the First Quarter 2012 Quarterly Report on Form 10-Q filing to reflect the correction of errors identified related to the adoption of the amended guidance as well as indirect impact of the correction of errors associated with the restatement. | |||||||||||||||||||||||||||||
-3 | All share amounts for all periods reflect the 1-for-20 reverse stock split, which was effective August 10, 2012. See Note 11 to these consolidated financial statements for additional information on the reverse stock split. | |||||||||||||||||||||||||||||
-4 | Weighted-average common shares outstanding have been updated to reflect the impact of an error which had no material impact to EPS information, basic or diluted, for any period presented. | |||||||||||||||||||||||||||||
-5 | In addition to adjustments described within this footnote the correction of errors column contains reclassifications related to changes in presentation of components of other comprehensive income. | |||||||||||||||||||||||||||||
Consolidated Statement of Comprehensive Income | ||||||||||||||||||||||||||||||
($ in millions, except share data) | As of and for the year ended December 31, 2010 | |||||||||||||||||||||||||||||
As previously | Correction | Adjusted | Retrospective | As restated | ||||||||||||||||||||||||||
reported | of errors (1) | prior to the | Adoption (2) | and amended | ||||||||||||||||||||||||||
retrospective | ||||||||||||||||||||||||||||||
adoption | ||||||||||||||||||||||||||||||
REVENUES: | ||||||||||||||||||||||||||||||
Premiums | $ | 521.4 | $ | -13.9 | $ | 507.5 | $ | — | $ | 507.5 | ||||||||||||||||||||
Fee income | 630.2 | 3.3 | 633.5 | — | 633.5 | |||||||||||||||||||||||||
Net investment income | 844.6 | -4.1 | 840.5 | — | 840.5 | |||||||||||||||||||||||||
Net realized investment gains (losses): | ||||||||||||||||||||||||||||||
Total OTTI losses | -105.2 | -2.1 | -107.3 | — | -107.3 | |||||||||||||||||||||||||
Portion of OTTI losses recognized in OCI | 55.6 | 3.1 | 58.7 | — | 58.7 | |||||||||||||||||||||||||
Net OTTI losses recognized in earnings | -49.6 | 1.0 | -48.6 | — | -48.6 | |||||||||||||||||||||||||
Net realized investment gains (losses), | 39.7 | -2.3 | 37.4 | — | 37.4 | |||||||||||||||||||||||||
excluding OTTI losses | ||||||||||||||||||||||||||||||
Net realized investment losses | -9.9 | -1.3 | -11.2 | — | -11.2 | |||||||||||||||||||||||||
Gain on debt repurchase | — | — | — | — | — | |||||||||||||||||||||||||
Total revenues | 1,986.3 | -16 | 1,970.3 | — | 1,970.3 | |||||||||||||||||||||||||
BENEFITS AND EXPENSES: | ||||||||||||||||||||||||||||||
Policy benefits, excluding policyholder dividends | 1,090.0 | 19.6 | 1,109.6 | 11.9 | 1,121.5 | |||||||||||||||||||||||||
Policyholder dividends | 309.8 | -8 | 301.8 | — | 301.8 | |||||||||||||||||||||||||
Policy acquisition cost amortization | 298.2 | 28.9 | 327.1 | -58.9 | 268.2 | |||||||||||||||||||||||||
Interest expense on indebtedness | 31.8 | — | 31.8 | — | 31.8 | |||||||||||||||||||||||||
Other operating expenses | 291.2 | -4.8 | 286.4 | 2.2 | 288.6 | |||||||||||||||||||||||||
Total benefits and expenses | 2,021.0 | 35.7 | 2,056.7 | -44.8 | 2,011.9 | |||||||||||||||||||||||||
Income (loss) from continuing operations | -34.7 | -51.7 | -86.4 | 44.8 | -41.6 | |||||||||||||||||||||||||
before income taxes | ||||||||||||||||||||||||||||||
Income tax expense (benefit) | -10.1 | -15.5 | -25.6 | 15.3 | -10.3 | |||||||||||||||||||||||||
Income (loss) from continuing operations | -24.6 | -36.2 | -60.8 | 29.5 | -31.3 | |||||||||||||||||||||||||
Income (loss) from discontinued operations, | 12.0 | -15.6 | -3.6 | — | -3.6 | |||||||||||||||||||||||||
net of income taxes | ||||||||||||||||||||||||||||||
Net income (loss) | -12.6 | -51.8 | -64.4 | 29.5 | -34.9 | |||||||||||||||||||||||||
Less: Net income (loss) attributable to | — | -0.5 | -0.5 | — | -0.5 | |||||||||||||||||||||||||
noncontrolling interests | ||||||||||||||||||||||||||||||
Net income (loss) attributable to | $ | -12.6 | $ | -51.3 | $ | -63.9 | $ | 29.5 | $ | -34.4 | ||||||||||||||||||||
The Phoenix Companies, Inc. | ||||||||||||||||||||||||||||||
(Continued from previous page) | Consolidated Statement of Comprehensive Income | |||||||||||||||||||||||||||||
($ in millions, except share data) | As of and for the year ended December 31, 2010 | |||||||||||||||||||||||||||||
As previously | Correction | Adjusted | Retrospective | As restated | ||||||||||||||||||||||||||
reported | of errors (1) | prior to the | Adoption (2) | and amended | ||||||||||||||||||||||||||
retrospective | ||||||||||||||||||||||||||||||
adoption | ||||||||||||||||||||||||||||||
COMPREHENSIVE INCOME (LOSS): | ||||||||||||||||||||||||||||||
Net income (loss) attributable to | $ | -12.6 | $ | -51.3 | $ | -63.9 | $ | 29.5 | $ | -34.4 | ||||||||||||||||||||
The Phoenix Companies, Inc. | ||||||||||||||||||||||||||||||
Net income (loss) attributable to | — | -0.5 | -0.5 | — | -0.5 | |||||||||||||||||||||||||
noncontrolling interests | ||||||||||||||||||||||||||||||
Net income (loss) | -12.6 | -51.8 | -64.4 | 29.5 | -34.9 | |||||||||||||||||||||||||
Other comprehensive income (loss) | ||||||||||||||||||||||||||||||
before income taxes: | ||||||||||||||||||||||||||||||
Net unrealized investment gains | 112.5 | 36.3 | 148.8 | 25.3 | 174.1 | |||||||||||||||||||||||||
before income taxes (5) | ||||||||||||||||||||||||||||||
Non-credit portion of OTTI losses | -35.4 | 10.5 | -24.9 | — | -24.9 | |||||||||||||||||||||||||
recognized in OCI before income taxes (5) | ||||||||||||||||||||||||||||||
Net pension liability adjustment | -9.3 | 1.4 | -7.9 | — | -7.9 | |||||||||||||||||||||||||
before income taxes | ||||||||||||||||||||||||||||||
Net unrealized other gains (losses) | — | — | — | — | — | |||||||||||||||||||||||||
before income taxes | ||||||||||||||||||||||||||||||
Net unrealized derivative instruments gains (losses) | 28.3 | -28.3 | — | — | — | |||||||||||||||||||||||||
before income taxes (5) | ||||||||||||||||||||||||||||||
Other comprehensive income (loss) | 96.1 | 19.9 | 116.0 | 25.3 | 141.3 | |||||||||||||||||||||||||
before income taxes | ||||||||||||||||||||||||||||||
Less: Income tax expense (benefit) related to: | ||||||||||||||||||||||||||||||
Net unrealized investment gains (losses (5) | 72.7 | 28.1 | 100.8 | -6.3 | 94.5 | |||||||||||||||||||||||||
Non-credit portion of OTTI losses | -12.4 | 4.9 | -7.5 | — | -7.5 | |||||||||||||||||||||||||
recognized in OCI (5) | ||||||||||||||||||||||||||||||
Net pension liability adjustment | — | — | — | — | — | |||||||||||||||||||||||||
Net unrealized other gains (losses) | — | — | — | — | — | |||||||||||||||||||||||||
Net unrealized derivative instruments gains (losses) | — | — | — | — | — | |||||||||||||||||||||||||
Total income tax expense (benefit) | 60.3 | 33.0 | 93.3 | -6.3 | 87.0 | |||||||||||||||||||||||||
Other comprehensive income | 35.8 | -13.1 | 22.7 | 31.6 | 54.3 | |||||||||||||||||||||||||
net of income taxes | ||||||||||||||||||||||||||||||
Comprehensive income (loss) | 23.2 | -64.9 | -41.7 | 61.1 | 19.4 | |||||||||||||||||||||||||
Less: Comprehensive income attributable to | — | -0.5 | -0.5 | — | -0.5 | |||||||||||||||||||||||||
noncontrolling interests, net of income taxes | ||||||||||||||||||||||||||||||
Comprehensive income (loss) attributable to | $ | 23.2 | $ | -64.4 | $ | -41.2 | $ | 61.1 | $ | 19.9 | ||||||||||||||||||||
The Phoenix Companies, Inc. | ||||||||||||||||||||||||||||||
(Continued on next page) | ||||||||||||||||||||||||||||||
(Continued from previous page) | Consolidated Statement of Comprehensive Income | |||||||||||||||||||||||||||||
($ in millions, except share data) | As of and for the year ended December 31, 2010 | |||||||||||||||||||||||||||||
As previously | Correction | Adjusted | Retrospective | As restated | ||||||||||||||||||||||||||
reported | of errors (1) | prior to the | Adoption (2) | and amended | ||||||||||||||||||||||||||
retrospective | ||||||||||||||||||||||||||||||
adoption | ||||||||||||||||||||||||||||||
EARNINGS (LOSS) PER SHARE: (3) | ||||||||||||||||||||||||||||||
Earnings (loss) from continuing operations – basic | $ | -4.23 | $ | -6.24 | $ | 5.08 | $ | -5.39 | ||||||||||||||||||||||
Earnings (loss) from continuing operations – diluted | $ | -4.23 | $ | -6.24 | $ | 5.08 | $ | -5.39 | ||||||||||||||||||||||
Earnings (loss) from discontinued operations – basic | $ | 2.06 | $ | -2.69 | $ | — | $ | -0.62 | ||||||||||||||||||||||
Earnings (loss) from discontinued operations – diluted | $ | 2.06 | $ | -2.69 | $ | — | $ | -0.62 | ||||||||||||||||||||||
Net earnings (loss) attributable to | $ | -2.17 | $ | -8.84 | $ | 5.08 | $ | -5.93 | ||||||||||||||||||||||
The Phoenix Companies, Inc. – basic | ||||||||||||||||||||||||||||||
Net earnings (loss) attributable to | $ | -2.17 | $ | -8.84 | $ | 5.08 | $ | -5.93 | ||||||||||||||||||||||
The Phoenix Companies, Inc. – diluted | ||||||||||||||||||||||||||||||
Basic weighted-average common shares outstanding | 5,817 | 5,803 | -4 | 5,803 | 5,803 | |||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||||||
Diluted weighted-average common shares | 5,817 | 5,803 | -4 | 5,803 | 5,803 | |||||||||||||||||||||||||
outstanding (in thousands) | ||||||||||||||||||||||||||||||
——————— | ||||||||||||||||||||||||||||||
-1 | Adjustments related to the correction of errors reflect amounts prior to the retrospective adoption of amended guidance to ASC 944, Financial Services – Insurance (ASU 2010-26). See footnote 2 below for additional information regarding these amounts and the retrospective adoption. | |||||||||||||||||||||||||||||
-2 | Adjustments related to the retrospective adoption of amended guidance to ASC 944, Financial Services – Insurance (ASU 2010-26), have been updated from those originally disclosed in the First Quarter 2012 Quarterly Report on Form 10-Q filing to reflect the correction of errors identified related to the adoption of the amended guidance as well as indirect impact of the correction of errors associated with the restatement. | |||||||||||||||||||||||||||||
-3 | All share amounts for all periods reflect the 1-for-20 reverse stock split, which was effective August 10, 2012. See Note 11 to these consolidated financial statements for additional information on the reverse stock split. | |||||||||||||||||||||||||||||
-4 | Weighted-average common shares outstanding have been updated to reflect the impact of an error which had no material impact to EPS information, basic or diluted, for any period presented. | |||||||||||||||||||||||||||||
-5 | In addition to adjustments described within this footnote the correction of errors column contains reclassifications related to changes in presentation of components of other comprehensive income. | |||||||||||||||||||||||||||||
Consolidated Statement of Cash Flows | ||||||||||||||||||||||||||||||
($ in millions) | As of and for the year ended December 31, 2011 | |||||||||||||||||||||||||||||
As previously | Correction | Adjusted | Retrospective | As restated | ||||||||||||||||||||||||||
reported | of errors (1) | prior to the | Adoption (2) | and amended | ||||||||||||||||||||||||||
retrospective | ||||||||||||||||||||||||||||||
adoption | ||||||||||||||||||||||||||||||
OPERATING ACTIVITIES: | ||||||||||||||||||||||||||||||
Net income (loss) | $ | 8.1 | $ | -61.2 | $ | -53.1 | $ | 22.4 | $ | -30.7 | ||||||||||||||||||||
Net realized investment gains | 16.4 | 13.5 | 29.9 | — | 29.9 | |||||||||||||||||||||||||
Gain on debt repurchase | — | -0.2 | -0.2 | — | -0.2 | |||||||||||||||||||||||||
Policy acquisition costs deferred | -141.1 | 48.5 | -92.6 | 1.4 | -91.2 | |||||||||||||||||||||||||
Amortization of deferred policy acquisition costs | 210.6 | -15.2 | 195.4 | -37.5 | 157.9 | |||||||||||||||||||||||||
Amortization and depreciation | 12.8 | — | 12.8 | — | 12.8 | |||||||||||||||||||||||||
Interest credited | — | 117.5 | 117.5 | — | 117.5 | |||||||||||||||||||||||||
Equity in earnings of | — | -45.3 | -45.3 | — | -45.3 | |||||||||||||||||||||||||
limited partnerships and other investments | ||||||||||||||||||||||||||||||
Change in: | ||||||||||||||||||||||||||||||
Accrued investment income | -50.8 | -90.5 | -141.3 | — | -141.3 | |||||||||||||||||||||||||
Deferred income taxes | 1.0 | -12.8 | -11.8 | 9.1 | -2.7 | |||||||||||||||||||||||||
Receivables | -7.3 | 7.2 | -0.1 | — | -0.1 | |||||||||||||||||||||||||
Policy liabilities and accruals | -203.3 | -206.3 | -409.6 | 4.6 | -405 | |||||||||||||||||||||||||
Dividend obligations | — | 7.3 | 7.3 | — | 7.3 | |||||||||||||||||||||||||
Impact of operating activities of | — | -4.2 | -4.2 | — | -4.2 | |||||||||||||||||||||||||
consolidated investment entities, net | ||||||||||||||||||||||||||||||
Other operating activities, net | -3.4 | -39.1 | -42.5 | — | -42.5 | |||||||||||||||||||||||||
Cash from (for) continuing operations | -157 | -280.8 | -437.8 | — | -437.8 | |||||||||||||||||||||||||
Discontinued operations, net | 18.6 | -18.6 | — | — | — | |||||||||||||||||||||||||
Cash used for operating activities | -138.4 | -299.4 | -437.8 | — | -437.8 | |||||||||||||||||||||||||
INVESTING ACTIVITIES: | ||||||||||||||||||||||||||||||
Purchases of: | ||||||||||||||||||||||||||||||
Available-for-sale debt securities | -3,189.00 | 140.8 | -3,048.20 | — | -3,048.20 | |||||||||||||||||||||||||
Available-for-sale equity securities | -6.4 | — | -6.4 | — | -6.4 | |||||||||||||||||||||||||
Derivative instruments | -53.9 | -16.6 | -70.5 | — | -70.5 | |||||||||||||||||||||||||
Fair value investments | — | -47.3 | -47.3 | — | -47.3 | |||||||||||||||||||||||||
Other investments | -106.5 | 105.1 | -1.4 | -1.4 | ||||||||||||||||||||||||||
Sales, repayments and maturities of: | ||||||||||||||||||||||||||||||
Available-for-sale debt securities | 2,444.6 | -115.4 | 2,329.2 | — | 2,329.2 | |||||||||||||||||||||||||
Available-for-sale equity securities | 10.2 | — | 10.2 | — | 10.2 | |||||||||||||||||||||||||
Derivative instruments | 57.2 | 29.9 | 87.1 | — | 87.1 | |||||||||||||||||||||||||
Fair value investments | 8.6 | 4.8 | 13.4 | — | 13.4 | |||||||||||||||||||||||||
Other investments | 144.6 | -122.3 | 22.3 | — | 22.3 | |||||||||||||||||||||||||
Contributions to limited partnerships | — | -99.4 | -99.4 | — | -99.4 | |||||||||||||||||||||||||
and limited liability corporations | ||||||||||||||||||||||||||||||
Distributions from limited partnerships | — | 120.5 | 120.5 | — | 120.5 | |||||||||||||||||||||||||
and limited liability corporations | ||||||||||||||||||||||||||||||
Policy loans, net | 7.2 | 121.1 | 128.3 | — | 128.3 | |||||||||||||||||||||||||
Impact of investing activities of | — | — | — | — | — | |||||||||||||||||||||||||
consolidated investment entities, net | ||||||||||||||||||||||||||||||
Other investing activities, net | — | -4.6 | -4.6 | — | -4.6 | |||||||||||||||||||||||||
Proceeds from sale of subsidiary | 1.0 | -1 | — | — | — | |||||||||||||||||||||||||
Premises and equipment additions | -4.4 | 4.4 | — | — | — | |||||||||||||||||||||||||
Discontinued operations, net | -18.6 | 18.6 | — | — | — | |||||||||||||||||||||||||
Cash provided by (used for) investing activities | -705.4 | 138.6 | -566.8 | — | -566.8 | |||||||||||||||||||||||||
(Continued from previous page) | Consolidated Statement of Cash Flows | |||||||||||||||||||||||||||||
($ in millions) | As of and for the year ended December 31, 2011 | |||||||||||||||||||||||||||||
As previously | Correction | Adjusted | Retrospective | As restated | ||||||||||||||||||||||||||
reported | of errors (1) | prior to the | Adoption (2) | and amended | ||||||||||||||||||||||||||
retrospective | ||||||||||||||||||||||||||||||
adoption | ||||||||||||||||||||||||||||||
FINANCING ACTIVITIES: | ||||||||||||||||||||||||||||||
Policyholder deposit fund deposits | 1,725.5 | 99.9 | 1,825.4 | — | 1,825.4 | |||||||||||||||||||||||||
Policyholder deposit fund withdrawals | -808.5 | -370.8 | -1,179.30 | — | -1,179.30 | |||||||||||||||||||||||||
Net transfers to/from separate accounts | — | 435.1 | 435.1 | — | 435.1 | |||||||||||||||||||||||||
Impact of financing activities of | — | 1.5 | 1.5 | — | 1.5 | |||||||||||||||||||||||||
consolidated investment entities, net | ||||||||||||||||||||||||||||||
Other financing activities, net | -0.8 | -4.1 | -4.9 | — | -4.9 | |||||||||||||||||||||||||
Cash provided by financing activities | 916.2 | 161.6 | 1,077.8 | — | 1,077.8 | |||||||||||||||||||||||||
Change in cash and cash equivalents | 72.4 | 0.8 | 73.2 | — | 73.2 | |||||||||||||||||||||||||
Change in cash included in | — | 1.3 | 1.3 | — | 1.3 | |||||||||||||||||||||||||
discontinued operations assets | ||||||||||||||||||||||||||||||
Cash and cash equivalents, beginning of period | 121.9 | -28.2 | 93.7 | — | 93.7 | |||||||||||||||||||||||||
Cash and cash equivalents, end of period | $ | 194.3 | $ | -26.1 | $ | 168.2 | $ | — | $ | 168.2 | ||||||||||||||||||||
Supplemental Disclosure of Cash Flow Information | ||||||||||||||||||||||||||||||
Income taxes paid | $ | -6.2 | $ | — | $ | -6.2 | $ | — | $ | -6.2 | ||||||||||||||||||||
Interest expense on indebtedness paid | $ | -34.9 | $ | 3.5 | $ | -31.4 | $ | — | $ | -31.4 | ||||||||||||||||||||
Non-Cash Transactions During the Year | ||||||||||||||||||||||||||||||
Investment exchanges | $ | — | $ | 97.8 | $ | 97.8 | $ | — | $ | 97.8 | ||||||||||||||||||||
——————— | ||||||||||||||||||||||||||||||
-1 | Adjustments related to the correction of errors reflect amounts prior to the retrospective adoption of amended guidance to ASC 944, Financial Services – Insurance (ASU 2010-26). See footnote 2 below for additional information regarding these amounts and the retrospective adoption. | |||||||||||||||||||||||||||||
-2 | Adjustments related to the retrospective adoption of amended guidance to ASC 944, Financial Services – Insurance (ASU 2010-26), have been updated from those originally disclosed in the First Quarter 2012 Quarterly Report on Form 10-Q filing to reflect the correction of errors identified related to the adoption of the amended guidance as well as indirect impact of the correction of errors associated with the restatement. | |||||||||||||||||||||||||||||
Consolidated Statement of Cash Flows | ||||||||||||||||||||||||||||||
($ in millions) | As of and for the year ended December 31, 2010 | |||||||||||||||||||||||||||||
As previously | Correction | Adjusted | Retrospective | As restated | ||||||||||||||||||||||||||
reported | of errors (1) | prior to the | Adoption (2) | and amended | ||||||||||||||||||||||||||
retrospective | ||||||||||||||||||||||||||||||
adoption | ||||||||||||||||||||||||||||||
OPERATING ACTIVITIES: | ||||||||||||||||||||||||||||||
Net income (loss) | $ | -12.6 | $ | -51.3 | $ | -63.9 | $ | 29.5 | $ | -34.4 | ||||||||||||||||||||
Net realized investment gains | 9.9 | 1.5 | 11.4 | — | 11.4 | |||||||||||||||||||||||||
Gain on debt repurchase | — | — | — | — | — | |||||||||||||||||||||||||
Policy acquisition costs deferred | -27 | 12.0 | -15 | 2.2 | -12.8 | |||||||||||||||||||||||||
Amortization of deferred policy acquisition costs | 298.2 | 28.9 | 327.1 | -58.9 | 268.2 | |||||||||||||||||||||||||
Amortization and depreciation | 11.3 | -0.3 | 11.0 | — | 11.0 | |||||||||||||||||||||||||
Interest credited | — | 123.8 | 123.8 | — | 123.8 | |||||||||||||||||||||||||
Equity in earnings of | — | -61.1 | -61.1 | — | -61.1 | |||||||||||||||||||||||||
limited partnerships and other investments | ||||||||||||||||||||||||||||||
Change in: | ||||||||||||||||||||||||||||||
Accrued investment income | -16.4 | -117.4 | -133.8 | — | -133.8 | |||||||||||||||||||||||||
Deferred income taxes | -12.8 | -17.9 | -30.7 | 15.4 | -15.3 | |||||||||||||||||||||||||
Receivables | -49.1 | 88.1 | 39.0 | — | 39.0 | |||||||||||||||||||||||||
Policy liabilities and accruals | -447.3 | -378.9 | -826.2 | 11.8 | -814.4 | |||||||||||||||||||||||||
Dividend obligations | — | -13.9 | -13.9 | — | -13.9 | |||||||||||||||||||||||||
Impact of operating activities of | — | -5.9 | -5.9 | — | -5.9 | |||||||||||||||||||||||||
consolidated investment entities, net | ||||||||||||||||||||||||||||||
Other operating activities, net | 9.8 | 5.8 | 15.6 | — | 15.6 | |||||||||||||||||||||||||
Cash from (for) continuing operations | -236 | -386.6 | -622.6 | — | -622.6 | |||||||||||||||||||||||||
Discontinued operations, net | -22 | 22.0 | — | — | — | |||||||||||||||||||||||||
Cash used for operating activities | -258 | -364.6 | -622.6 | — | -622.6 | |||||||||||||||||||||||||
INVESTING ACTIVITIES: | ||||||||||||||||||||||||||||||
Purchases of: | ||||||||||||||||||||||||||||||
Available-for-sale debt securities | -2,758.40 | 72.2 | -2,686.20 | — | -2,686.20 | |||||||||||||||||||||||||
Available-for-sale equity securities | -7.2 | 1.9 | -5.3 | — | -5.3 | |||||||||||||||||||||||||
Derivative instruments | -84.1 | 0.9 | -83.2 | — | -83.2 | |||||||||||||||||||||||||
Fair value investments | — | -8.5 | -8.5 | — | -8.5 | |||||||||||||||||||||||||
Other investments | -126.3 | 125.0 | -1.3 | — | -1.3 | |||||||||||||||||||||||||
Sales, repayments and maturities of: | ||||||||||||||||||||||||||||||
Available-for-sale debt securities | 2,762.8 | -61.6 | 2,701.2 | — | 2,701.2 | |||||||||||||||||||||||||
Available-for-sale equity securities | 0.6 | 0.1 | 0.7 | — | 0.7 | |||||||||||||||||||||||||
Derivative instruments | 47.1 | -15 | 32.1 | — | 32.1 | |||||||||||||||||||||||||
Fair value investments | 0.1 | 14.3 | 14.4 | — | 14.4 | |||||||||||||||||||||||||
Other investments | 143.1 | -105.3 | 37.8 | — | 37.8 | |||||||||||||||||||||||||
Contributions to limited partnerships | — | -90.2 | -90.2 | — | -90.2 | |||||||||||||||||||||||||
and limited liability corporations | ||||||||||||||||||||||||||||||
Distributions from limited partnerships | — | 132.0 | 132.0 | — | 132.0 | |||||||||||||||||||||||||
and limited liability corporations | ||||||||||||||||||||||||||||||
Policy loans, net | -62.1 | 124.8 | 62.7 | — | 62.7 | |||||||||||||||||||||||||
Impact of investing activities of | — | — | — | — | — | |||||||||||||||||||||||||
consolidated investment entities, net | ||||||||||||||||||||||||||||||
Other investing activities, net | — | 30.0 | 30.0 | — | 30.0 | |||||||||||||||||||||||||
Proceeds from sale of subsidiary | 32.9 | -32.9 | — | — | — | |||||||||||||||||||||||||
Premises and equipment additions | -5.9 | 5.9 | — | — | — | |||||||||||||||||||||||||
Discontinued operations, net | 13.1 | -13.1 | — | — | — | |||||||||||||||||||||||||
Cash provided by (used for) investing activities | -44.3 | 180.5 | 136.2 | — | 136.2 | |||||||||||||||||||||||||
(Continued from previous page) | Consolidated Statement of Cash Flows | |||||||||||||||||||||||||||||
($ in millions) | As of and for the year ended December 31, 2010 | |||||||||||||||||||||||||||||
As previously | Correction | Adjusted | Retrospective | As restated | ||||||||||||||||||||||||||
reported | of errors (1) | prior to the | Adoption (2) | and amended | ||||||||||||||||||||||||||
retrospective | ||||||||||||||||||||||||||||||
adoption | ||||||||||||||||||||||||||||||
FINANCING ACTIVITIES: | ||||||||||||||||||||||||||||||
Policyholder deposit fund deposits | 732.2 | 367.0 | 1,099.2 | — | 1,099.2 | |||||||||||||||||||||||||
Policyholder deposit fund withdrawals | -565 | -660.5 | -1,225.50 | — | -1,225.50 | |||||||||||||||||||||||||
Net transfers to/from separate accounts | — | 454.3 | 454.3 | — | 454.3 | |||||||||||||||||||||||||
Impact of financing activities of | — | 1.0 | 1.0 | — | 1.0 | |||||||||||||||||||||||||
consolidated investment entities, net | ||||||||||||||||||||||||||||||
Other financing activities, net | — | 0.3 | 0.3 | — | 0.3 | |||||||||||||||||||||||||
Indebtedness repayments | -0.2 | 0.2 | — | — | — | |||||||||||||||||||||||||
Noncontrolling interests | 0.5 | -0.5 | — | — | — | |||||||||||||||||||||||||
Discontinued operations, net | — | — | — | — | — | |||||||||||||||||||||||||
Cash provided by financing activities | 167.5 | 161.8 | 329.3 | — | 329.3 | |||||||||||||||||||||||||
Change in cash and cash equivalents | -134.8 | -22.3 | -157.1 | — | -157.1 | |||||||||||||||||||||||||
Change in cash included in | — | -5 | -5 | — | -5 | |||||||||||||||||||||||||
discontinued operations assets | ||||||||||||||||||||||||||||||
Cash and cash equivalents, beginning of period | 256.7 | -0.9 | 255.8 | — | 255.8 | |||||||||||||||||||||||||
Cash and cash equivalents, end of period | $ | 121.9 | $ | -28.2 | $ | 93.7 | $ | — | $ | 93.7 | ||||||||||||||||||||
Supplemental Disclosure of Cash Flow Information | ||||||||||||||||||||||||||||||
Income taxes paid | $ | -0.1 | $ | — | $ | -0.1 | $ | — | $ | -0.1 | ||||||||||||||||||||
Interest expense on indebtedness paid | $ | -34.9 | $ | 3.5 | $ | -31.4 | $ | — | $ | -31.4 | ||||||||||||||||||||
Non-Cash Transactions During the Year | ||||||||||||||||||||||||||||||
Investment exchanges | $ | — | $ | 70.5 | $ | 70.5 | $ | — | $ | 70.5 | ||||||||||||||||||||
——————— | ||||||||||||||||||||||||||||||
-1 | Adjustments related to the correction of errors reflect amounts prior to the retrospective adoption of amended guidance to ASC 944, Financial Services – Insurance (ASU 2010-26). See footnote 2 below for additional information regarding these amounts and the retrospective adoption. | |||||||||||||||||||||||||||||
-2 | Adjustments related to the retrospective adoption of amended guidance to ASC 944, Financial Services – Insurance (ASU 2010-26), have been updated from those originally disclosed in the First Quarter 2012 Quarterly Report on Form 10-Q filing to reflect the correction of errors identified related to the adoption of the amended guidance as well as indirect impact of the correction of errors associated with the restatement. | |||||||||||||||||||||||||||||
Consolidated Statement of Changes in Stockholders’ Equity | ||||||||||||||||||||||||||||||
($ in millions, except share data) | As of and for the year ended December 31, 2011 | |||||||||||||||||||||||||||||
As previously | Correction | Adjusted | Retrospective | As restated | ||||||||||||||||||||||||||
reported | of errors (1) | prior to the | Adoption (2) | and amended | ||||||||||||||||||||||||||
retrospective | ||||||||||||||||||||||||||||||
adoption | ||||||||||||||||||||||||||||||
COMMON STOCK: (3) | ||||||||||||||||||||||||||||||
Balance, beginning of period | $ | 1.3 | $ | — | $ | 1.3 | $ | — | $ | 1.3 | ||||||||||||||||||||
Adjustment for reverse stock split | — | — | — | — | — | |||||||||||||||||||||||||
Balance, end of period | $ | 1.3 | $ | — | $ | 1.3 | $ | — | $ | 1.3 | ||||||||||||||||||||
ADDITIONAL PAID-IN CAPITAL: | ||||||||||||||||||||||||||||||
Balance, beginning of period | $ | 2,631.0 | $ | — | $ | 2,631.0 | $ | — | $ | 2,631.0 | ||||||||||||||||||||
Issuance of shares and compensation expense | -0.5 | — | -0.5 | — | -0.5 | |||||||||||||||||||||||||
on stock compensation awards | ||||||||||||||||||||||||||||||
Adjustment for reverse stock split | — | — | — | — | — | |||||||||||||||||||||||||
Balance, end of period | $ | 2,630.5 | $ | — | $ | 2,630.5 | $ | — | $ | 2,630.5 | ||||||||||||||||||||
ACCUMULATED OTHER COMPREHENSIVE | ||||||||||||||||||||||||||||||
LOSS: | ||||||||||||||||||||||||||||||
Balance, beginning of period | $ | -133.8 | $ | -50.7 | $ | -184.5 | $ | 28.3 | $ | -156.2 | ||||||||||||||||||||
Adjustment for initial application of | — | — | — | — | — | |||||||||||||||||||||||||
accounting changes | ||||||||||||||||||||||||||||||
Other comprehensive income (loss) | -36.9 | -19.5 | -56.4 | 15.2 | -41.2 | |||||||||||||||||||||||||
Balance, end of period | $ | -170.7 | $ | -70.2 | $ | -240.9 | $ | 43.5 | $ | -197.4 | ||||||||||||||||||||
ACCUMULATED DEFICIT: | ||||||||||||||||||||||||||||||
Balance, beginning of period | $ | -1,163.50 | $ | -102.1 | $ | -1,265.60 | $ | -232.4 | $ | -1,498.00 | ||||||||||||||||||||
Adjustment for initial application of | — | — | — | — | — | |||||||||||||||||||||||||
accounting changes | ||||||||||||||||||||||||||||||
Net income (loss) | 8.1 | -61.2 | -53.1 | 22.4 | -30.7 | |||||||||||||||||||||||||
Balance, end of period | $ | -1,155.40 | $ | -163.3 | $ | -1,318.70 | $ | -210 | $ | -1,528.70 | ||||||||||||||||||||
TREASURY STOCK, AT COST: (3) | ||||||||||||||||||||||||||||||
Balance, beginning of period | $ | -179.5 | $ | — | $ | -179.5 | $ | — | $ | -179.5 | ||||||||||||||||||||
Treasury shares purchased | — | — | — | — | — | |||||||||||||||||||||||||
Balance, end of period | $ | -179.5 | $ | — | $ | -179.5 | $ | — | $ | -179.5 | ||||||||||||||||||||
TOTAL STOCKHOLDERS’ EQUITY | ||||||||||||||||||||||||||||||
ATTRIBUTABLE TO | ||||||||||||||||||||||||||||||
THE PHOENIX COMPANIES, INC.: | ||||||||||||||||||||||||||||||
Balance, beginning of period | $ | 1,155.5 | $ | -152.8 | $ | 1,002.7 | $ | -204.1 | $ | 798.6 | ||||||||||||||||||||
Adjustment for initial application of | —— | —— | — | — | —— | |||||||||||||||||||||||||
accounting changes | ||||||||||||||||||||||||||||||
Change in stockholders’ equity attributable to | -29.3 | -80.7 | -110 | 37.6 | -72.4 | |||||||||||||||||||||||||
The Phoenix Companies, Inc. | ||||||||||||||||||||||||||||||
Stockholders’ equity, end of period | $ | 1,126.2 | $ | -233.5 | $ | 892.7 | $ | -166.5 | $ | 726.2 | ||||||||||||||||||||
NONCONTROLLING INTERESTS: | ||||||||||||||||||||||||||||||
Balance, beginning of period | $ | — | $ | 1.8 | $ | 1.8 | — | $ | 1.8 | |||||||||||||||||||||
Net income attributable to | — | -0.5 | -0.5 | — | -0.5 | |||||||||||||||||||||||||
noncontrolling interests | ||||||||||||||||||||||||||||||
Contributions to noncontrolling interests | — | 1.5 | 1.5 | — | 1.5 | |||||||||||||||||||||||||
Distributions from noncontrolling interests | — | — | — | — | — | |||||||||||||||||||||||||
Issuance of Saybrus shares to | — | — | — | — | — | |||||||||||||||||||||||||
noncontrolling interests | ||||||||||||||||||||||||||||||
Balance, end of period | $ | — | $ | 2.8 | $ | 2.8 | $ | — | $ | 2.8 | ||||||||||||||||||||
(Continued from previous page) | Consolidated Statement of Changes in Stockholders’ Equity | |||||||||||||||||||||||||||||
($ in millions, except share data) | As of and for the year ended December 31, 2011 | |||||||||||||||||||||||||||||
As previously | Correction | Adjusted | Retrospective | As restated | ||||||||||||||||||||||||||
reported | of errors (1) | prior to the | Adoption (2) | and amended | ||||||||||||||||||||||||||
retrospective | ||||||||||||||||||||||||||||||
adoption | ||||||||||||||||||||||||||||||
TOTAL STOCKHOLDERS’ EQUITY: | ||||||||||||||||||||||||||||||
Balance, beginning of period | $ | 1,155.5 | $ | -151 | $ | 1,004.5 | $ | -204.1 | $ | 800.4 | ||||||||||||||||||||
Adjustment for initial application of | —— | —— | — | — | —— | |||||||||||||||||||||||||
accounting changes | ||||||||||||||||||||||||||||||
Change in stockholders’ equity | -29.3 | -79.7 | -109 | 37.6 | -71.4 | |||||||||||||||||||||||||
Stockholders’ equity, end of period | $ | 1,126.2 | $ | -230.7 | $ | 895.5 | $ | -166.5 | $ | 729.0 | ||||||||||||||||||||
——————— | ||||||||||||||||||||||||||||||
-1 | Adjustments related to the correction of errors reflect amounts prior to the retrospective adoption of amended guidance to ASC 944, Financial Services – Insurance (ASU 2010-26). See footnote 2 below for additional information regarding these amounts and the retrospective adoption. | |||||||||||||||||||||||||||||
-2 | Adjustments related to the retrospective adoption of amended guidance to ASC 944, Financial Services – Insurance (ASU 2010-26), have been updated from those originally disclosed in the First Quarter 2012 Quarterly Report on Form 10-Q filing to reflect the correction of errors identified related to the adoption of the amended guidance as well as indirect impact of the correction of errors associated with the restatement. | |||||||||||||||||||||||||||||
-3 | Reflects the 1-for-20 reverse stock split, which was effective August 10, 2012. See Note 11 to these consolidated financial statements for additional information on the reverse stock split. | |||||||||||||||||||||||||||||
Consolidated Statement of Changes in Stockholders’ Equity | ||||||||||||||||||||||||||||||
($ in millions, except share data) | As of and for the year ended December 31, 2010 | |||||||||||||||||||||||||||||
As previously | Correction | Adjusted | Retrospective | As restated | ||||||||||||||||||||||||||
reported | of errors (1) | prior to the | Adoption (2) | and amended | ||||||||||||||||||||||||||
retrospective | ||||||||||||||||||||||||||||||
adoption | ||||||||||||||||||||||||||||||
COMMON STOCK:(3) | ||||||||||||||||||||||||||||||
Balance, beginning of period | $ | 1.3 | $ | — | $ | 1.3 | $ | — | $ | 1.3 | ||||||||||||||||||||
Adjustment for reverse stock split | — | — | — | — | — | |||||||||||||||||||||||||
Balance, end of period | $ | 1.3 | $ | — | $ | 1.3 | $ | — | $ | 1.3 | ||||||||||||||||||||
ADDITIONAL PAID-IN CAPITAL: | ||||||||||||||||||||||||||||||
Balance, beginning of period | $ | 2,627.3 | $ | — | $ | 2,627.3 | $ | — | $ | 2,627.3 | ||||||||||||||||||||
Issuance of shares and compensation expense | 3.7 | — | 3.7 | — | 3.7 | |||||||||||||||||||||||||
on stock compensation awards | ||||||||||||||||||||||||||||||
Adjustment for reverse stock split | — | — | — | — | — | |||||||||||||||||||||||||
Balance, end of period | $ | 2,631.0 | $ | — | $ | 2,631.0 | $ | — | $ | 2,631.0 | ||||||||||||||||||||
ACCUMULATED OTHER COMPREHENSIVE | ||||||||||||||||||||||||||||||
INCOME (LOSS): | ||||||||||||||||||||||||||||||
Balance, beginning of period | $ | -171.3 | $ | -37 | $ | -208.3 | $ | -3.3 | $ | -211.6 | ||||||||||||||||||||
Adjustment for initial application of | 1.7 | -0.6 | 1.1 | — | 1.1 | |||||||||||||||||||||||||
accounting changes | ||||||||||||||||||||||||||||||
Other comprehensive income (loss) | 35.8 | -13.1 | 22.7 | 31.6 | 54.3 | |||||||||||||||||||||||||
Balance, end of period | $ | -133.8 | $ | -50.7 | $ | -184.5 | $ | 28.3 | $ | -156.2 | ||||||||||||||||||||
ACCUMULATED DEFICIT: | ||||||||||||||||||||||||||||||
Balance, beginning of period | $ | -1,146.70 | $ | -48.2 | $ | -1,194.90 | $ | -261.9 | $ | -1,456.80 | ||||||||||||||||||||
Adjustment for initial application of | -4.2 | -2.6 | -6.8 | — | -6.8 | |||||||||||||||||||||||||
accounting changes | ||||||||||||||||||||||||||||||
Net loss | -12.6 | -51.3 | -63.9 | 29.5 | -34.4 | |||||||||||||||||||||||||
Balance, end of period | $ | -1,163.50 | $ | -102.1 | $ | -1,265.60 | $ | -232.4 | $ | -1,498.00 | ||||||||||||||||||||
TREASURY STOCK, AT COST:(3) | ||||||||||||||||||||||||||||||
Balance, beginning of period | $ | -179.5 | $ | — | $ | -179.5 | $ | — | $ | -179.5 | ||||||||||||||||||||
Treasury shares purchased | — | — | — | — | — | |||||||||||||||||||||||||
Balance, end of period | $ | -179.5 | $ | — | $ | -179.5 | $ | — | $ | -179.5 | ||||||||||||||||||||
TOTAL STOCKHOLDERS’ EQUITY | ||||||||||||||||||||||||||||||
ATTRIBUTABLE TO | ||||||||||||||||||||||||||||||
THE PHOENIX COMPANIES, INC.: | ||||||||||||||||||||||||||||||
Balance, beginning of period | $ | 1,131.1 | $ | -85.2 | $ | 1,045.9 | $ | -265.2 | $ | 780.7 | ||||||||||||||||||||
Adjustment for initial application of | ((2.5) | —(3.2) | ((5.7) | —— | ((5.7) | |||||||||||||||||||||||||
accounting changes | ||||||||||||||||||||||||||||||
Change in stockholders’ equity attributable to | 26.9 | -64.4 | -37.5 | 61.1 | 23.6 | |||||||||||||||||||||||||
The Phoenix Companies, Inc. | ||||||||||||||||||||||||||||||
Stockholders’ equity, end of period | $ | 1,155.5 | $ | -152.8 | $ | 1,002.7 | $ | -204.1 | $ | 798.6 | ||||||||||||||||||||
NONCONTROLLING INTERESTS: | ||||||||||||||||||||||||||||||
Balance, beginning of period | $ | — | $ | 1.7 | $ | 1.7 | — | $ | 1.7 | |||||||||||||||||||||
Net income attributable to | — | -0.5 | -0.5 | — | -0.5 | |||||||||||||||||||||||||
noncontrolling interests | ||||||||||||||||||||||||||||||
Contributions to noncontrolling interests | — | — | — | — | — | |||||||||||||||||||||||||
Distributions from noncontrolling interests | — | — | — | — | — | |||||||||||||||||||||||||
Issuance of Saybrus shares to | — | 0.6 | 0.6 | — | 0.6 | |||||||||||||||||||||||||
noncontrolling interests | ||||||||||||||||||||||||||||||
Balance, end of period | $ | — | $ | 1.8 | $ | 1.8 | $ | — | $ | 1.8 | ||||||||||||||||||||
(Continued from previous page) | Consolidated Statement of Changes in Stockholders’ Equity | |||||||||||||||||||||||||||||
($ in millions, except share data) | As of and for the year ended December 31, 2010 | |||||||||||||||||||||||||||||
As previously | Correction | Adjusted | Retrospective | As restated | ||||||||||||||||||||||||||
reported | of errors (1) | prior to the | Adoption (2) | and amended | ||||||||||||||||||||||||||
retrospective | ||||||||||||||||||||||||||||||
adoption | ||||||||||||||||||||||||||||||
TOTAL STOCKHOLDERS’ EQUITY: | ||||||||||||||||||||||||||||||
Balance, beginning of period | $ | 1,131.1 | $ | -83.5 | $ | 1,047.6 | $ | -265.2 | $ | 782.4 | ||||||||||||||||||||
Adjustment for initial application of | ((2.5) | —(3.2) | ((5.7) | —— | -5.7 | |||||||||||||||||||||||||
accounting changes | ||||||||||||||||||||||||||||||
Change in stockholders’ equity | 26.9 | -64.3 | -37.4 | 61.1 | 23.7 | |||||||||||||||||||||||||
Stockholders’ equity, end of period | $ | 1,155.5 | $ | -151 | $ | 1,004.5 | $ | -204.1 | $ | 800.4 | ||||||||||||||||||||
——————— | ||||||||||||||||||||||||||||||
-1 | Adjustments related to the correction of errors reflect amounts prior to the retrospective adoption of amended guidance to ASC 944, Financial Services – Insurance (ASU 2010-26). See footnote 2 below for additional information regarding these amounts and the retrospective adoption. | |||||||||||||||||||||||||||||
-2 | Adjustments related to the retrospective adoption of amended guidance to ASC 944, Financial Services – Insurance (ASU 2010-26), have been updated from those originally disclosed in the First Quarter 2012 Quarterly Report on Form 10-Q filing to reflect the correction of errors identified related to the adoption of the amended guidance as well as indirect impact of the correction of errors associated with the restatement. | |||||||||||||||||||||||||||||
-3 | Reflects the 1-for-20 reverse stock split, which was effective August 10, 2012. See Note 11 to these consolidated financial statements for additional information on the reverse stock split. |
5_Demutualization_and_Closed_B1
5. Demutualization and Closed Block (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2012 | |||||||||
Insurance [Abstract] | ' | ||||||||
Closed Block Assets and Liabilities | ' | ||||||||
Closed Block Assets and Liabilities: | As of December 31, | ||||||||
($ in millions) | 2012 | 2011 | Inception | ||||||
As restated | |||||||||
and amended | |||||||||
Debt securities | $ | 6,396.4 | $ | 6,323.5 | $ | 4,773.1 | |||
Equity securities | 11.4 | 12.6 | — | ||||||
Limited partnerships and other investments | 353.1 | 338.0 | 399.0 | ||||||
Policy loans | 1,233.5 | 1,280.4 | 1,380.0 | ||||||
Fair value investments | 30.8 | 27.8 | — | ||||||
Total closed block investments | 8,025.2 | 7,982.3 | 6,552.1 | ||||||
Cash and cash equivalents | 32.7 | 15.1 | — | ||||||
Accrued investment income | 85.3 | 94.2 | 106.8 | ||||||
Receivables | 60.6 | 68.8 | 35.2 | ||||||
Deferred income taxes, net | 217.6 | 226.8 | 389.4 | ||||||
Other closed block assets | 31.7 | 39.2 | 6.2 | ||||||
Total closed block assets | 8,453.1 | 8,426.4 | 7,089.7 | ||||||
Policy liabilities and accruals | 8,421.7 | 8,680.4 | 8,301.7 | ||||||
Policyholder dividends payable | 223.8 | 241.0 | 325.1 | ||||||
Policy dividend obligation | 779.8 | 511.5 | — | ||||||
Other closed block liabilities | 47.5 | 41.0 | 12.3 | ||||||
Total closed block liabilities | 9,472.8 | 9,473.9 | 8,639.1 | ||||||
Excess of closed block liabilities over closed block assets (1) | $ | 1,019.7 | $ | 1,047.5 | $ | 1,549.4 | |||
Closed Block Revenues and Expenses and Changes in Policyholder Dividend Obligations | ' | ||||||||
Closed Block Revenues and Expenses and Changes in | Years Ended December 31, | ||||||||
Policyholder Dividend Obligations: | 2012 | 2011 | 2010 | ||||||
As restated | As restated | ||||||||
($ in millions) | and amended | and amended | |||||||
Closed block revenues | |||||||||
Premiums | $ | 369.5 | $ | 413.7 | $ | 478.0 | |||
Net investment income | 452.9 | 465.5 | 494.3 | ||||||
Net realized investment gains (losses) | 9.2 | -4.1 | 4.6 | ||||||
Total revenues | 831.6 | 875.1 | 976.9 | ||||||
Policy benefits, excluding dividends | 490.8 | 564.9 | 612.6 | ||||||
Other operating expenses | 3.0 | 3.7 | 8.3 | ||||||
Total benefits and expenses, excluding policyholder dividends | 493.8 | 568.6 | 620.9 | ||||||
Closed block contribution to income before dividends and income taxes | 337.8 | 306.5 | 356.0 | ||||||
Policyholder dividends | -294.5 | -258.7 | -301.3 | ||||||
Closed block contribution to income before income taxes | 43.3 | 47.8 | 54.7 | ||||||
Applicable income tax expense | 15.1 | 16.7 | 19.1 | ||||||
Noncontrolling interests | 0.5 | -0.1 | — | ||||||
Closed block contribution to income | $ | 27.7 | $ | 31.2 | $ | 35.6 | |||
Policyholder dividend obligation | |||||||||
Policyholder dividends provided through earnings | $ | 294.5 | $ | 258.7 | $ | 301.3 | |||
Policyholder dividends provided through OCI | 168.0 | 158.6 | 287.2 | ||||||
Additions to policyholder dividend liabilities | 462.5 | 417.3 | 588.5 | ||||||
Policyholder dividends paid | -211.4 | -251.3 | -303.5 | ||||||
Increase in policyholder dividend liabilities | 251.1 | 166.0 | 285.0 | ||||||
Policyholder dividend liabilities, beginning of period | 752.5 | 586.5 | 301.5 | ||||||
Policyholder dividend liabilities, end of period | 1,003.6 | 752.5 | 586.5 | ||||||
Policyholder dividends payable, end of period | -223.8 | -241 | -264.4 | ||||||
Policyholder dividend obligation, end of period | $ | 779.8 | $ | 511.5 | $ | 322.1 |
6_Reinsurance_Tables
6. Reinsurance (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2012 | |||||||||
Insurance [Abstract] | ' | ||||||||
Reinsurance activity | ' | ||||||||
Other reinsurance activity is shown below. | |||||||||
Direct Business and Reinsurance in Continuing Operations: | Years Ended December 31, | ||||||||
($ in millions) | 2012 | 2011 | 2010 | ||||||
As restated | As restated | ||||||||
and amended | and amended | ||||||||
Direct premiums | $ | 565.3 | $ | 617.8 | $ | 703.4 | |||
Premiums assumed from reinsureds | 11.8 | 13.6 | 13.6 | ||||||
Premiums ceded to reinsurers(1) | -174.8 | -182.7 | -209.5 | ||||||
Premiums | $ | 402.3 | $ | 448.7 | $ | 507.5 | |||
Percentage of amount assumed to net premiums | 2.90% | 3.00% | 2.70% | ||||||
Direct policy benefits incurred | $ | 812.9 | $ | 763.1 | $ | 832.9 | |||
Policy benefits assumed from reinsureds | 68.7 | 9.6 | 21.7 | ||||||
Policy benefits ceded to reinsurers | -270.3 | -255.2 | -347.9 | ||||||
Premiums paid to reinsurers(2) | 97.4 | 95.9 | 85.9 | ||||||
Policy benefits(3) | $ | 708.7 | $ | 613.4 | $ | 592.6 | |||
Direct life insurance in force | $ | 115,298.6 | $ | 122,981.9 | $ | 133,612.1 | |||
Life insurance in force assumed from reinsureds | 369.2 | 1,753.7 | 1,694.2 | ||||||
Life insurance in force ceded to reinsurers | -74,609.40 | -81,259.20 | -85,873.30 | ||||||
Life insurance in force | $ | 41,058.4 | $ | 43,476.4 | $ | 49,433.0 | |||
Percentage of amount assumed to net insurance in force | 0.90% | 4.00% | 3.40% |
7_Deferred_Policy_Acquisition_1
7. Deferred Policy Acquisition Costs (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2012 | |||||||||
Insurance [Abstract] | ' | ||||||||
Deferred policy acquisition costs | ' | ||||||||
The balances of and changes in deferred policy acquisition costs as of and for the years ended December 31, are as follows: | |||||||||
Deferred Policy Acquisition Costs: | Years Ended December 31, | ||||||||
($ in millions) | 2012 | 2011 | 2010 | ||||||
As restated | As restated | ||||||||
and amended | and amended | ||||||||
Policy acquisition costs deferred | $ | 58.1 | $ | 91.2 | $ | 12.8 | |||
Costs amortized to expenses: | |||||||||
Recurring costs | -143.8 | -160.8 | -212.3 | ||||||
Assumption unlocking | -55.2 | 2.8 | -58.1 | ||||||
Realized investment gains (losses) | -1 | 0.1 | 2.2 | ||||||
Offsets to net unrealized investment gains or losses included in AOCI (1) | -75.1 | -52.8 | -136.2 | ||||||
Adoption of new accounting guidance (2) | — | — | -2.2 | ||||||
Change in deferred policy acquisition costs | -217 | -119.5 | -393.8 | ||||||
Deferred policy acquisition costs, beginning of period | 1,119.2 | 1,238.7 | 1,632.5 | ||||||
Deferred policy acquisition costs, end of period | $ | 902.2 | $ | 1,119.2 | $ | 1,238.7 |
8_Sales_Inducements_Tables
8. Sales Inducements (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2012 | |||||||||
Insurance [Abstract] | ' | ||||||||
Changes in Deferred Sales Inducement Activity | ' | ||||||||
Changes in Deferred Sales Inducement Activity: | Years Ended December 31, | ||||||||
($ in millions) | 2012 | 2011 | 2010 | ||||||
As restated | As restated | ||||||||
and amended | and amended | ||||||||
Deferred asset, beginning of period | $ | 50.2 | $ | 20.9 | $ | 8.1 | |||
Sales inducements deferred | 15.4 | 48.3 | 15.4 | ||||||
Amortization charged to income | -6.7 | -4.9 | -2.6 | ||||||
Offsets to net unrealized investment gains or losses included in AOCI | 2.5 | -14.1 | — | ||||||
Deferred asset, end of period | $ | 61.4 | $ | 50.2 | $ | 20.9 |
9_Investing_Activities_Tables
9. Investing Activities (Tables) | 12 Months Ended | ||||||||||||||||||
Dec. 31, 2012 | |||||||||||||||||||
Investments, Debt and Equity Securities [Abstract] | ' | ||||||||||||||||||
Fair Value and Cost of Securities | ' | ||||||||||||||||||
The following tables present the fixed maturity and equity securities available-for-sale by sector held at December 31, 2012 and 2011, respectively. The unrealized loss amounts presented below include the non-credit loss component of OTTI losses. We classify these investments into various sectors in line with industry conventions. | |||||||||||||||||||
Fair Value and Cost of Securities: | December 31, 2012 | ||||||||||||||||||
($ in millions) | Gross | Gross | OTTI | ||||||||||||||||
Amortized | Unrealized | Unrealized | Fair | Recognized | |||||||||||||||
Cost | Gains(1) | Losses(1) | Value | in AOCI(2) | |||||||||||||||
U.S. government and agency | $ | 1,055.5 | $ | 58.5 | $ | -2.5 | $ | 1,111.5 | $ | — | |||||||||
State and political subdivision | 321.5 | 37.8 | -2.1 | 357.2 | -1.4 | ||||||||||||||
Foreign government | 167.5 | 36.8 | — | 204.3 | — | ||||||||||||||
Corporate | 6,996.4 | 745.7 | -72.1 | 7,670.0 | -8.9 | ||||||||||||||
Commercial mortgage-backed (“CMBS”) | 817.2 | 72.9 | -7.9 | 882.2 | -21.8 | ||||||||||||||
Residential mortgage-backed (“RMBS”) | 1,698.2 | 94.3 | -20.8 | 1,771.7 | -64 | ||||||||||||||
CDO/CLO | 240.5 | 6.4 | -23.2 | 223.7 | -33.4 | ||||||||||||||
Other asset-backed | 421.2 | 26.6 | -12.4 | 435.4 | 5.9 | ||||||||||||||
Available-for-sale debt securities | $ | 11,718.0 | $ | 1,079.0 | $ | -141 | $ | 12,656.0 | $ | -123.6 | |||||||||
Amounts applicable to the closed block | $ | 5,789.7 | $ | 644.9 | $ | -38.2 | $ | 6,396.4 | $ | -43.5 | |||||||||
Available-for-sale equity securities | $ | 27.5 | $ | 9.7 | $ | -2.4 | $ | 34.8 | $ | — | |||||||||
Amounts applicable to the closed block | $ | 10.9 | $ | 1.8 | $ | -1.3 | $ | 11.4 | $ | — | |||||||||
Fair Value and Cost of Securities: | December 31, 2011 | ||||||||||||||||||
($ in millions) | As restated and amended | ||||||||||||||||||
Gross | Gross | OTTI | |||||||||||||||||
Amortized | Unrealized | Unrealized | Fair | Recognized | |||||||||||||||
Cost | Gains(1) | Losses(1) | Value | in AOCI(2) | |||||||||||||||
U.S. government and agency | $ | 678.0 | $ | 71.6 | $ | -7.8 | $ | 741.8 | $ | — | |||||||||
State and political subdivision | 259.3 | 25.4 | -2.9 | 281.8 | — | ||||||||||||||
Foreign government | 185.7 | 21.2 | -1.7 | 205.2 | — | ||||||||||||||
Corporate | 6,127.9 | 601.7 | -171.4 | 6,558.2 | -5.8 | ||||||||||||||
Commercial mortgage-backed (“CMBS”) | 1,098.9 | 50.4 | -20 | 1,129.3 | -29.2 | ||||||||||||||
Residential mortgage-backed (“RMBS”) | 2,094.7 | 82.9 | -70.6 | 2,107.0 | -92.2 | ||||||||||||||
CDO/CLO | 283.8 | 2.5 | -53.9 | 232.4 | -36.2 | ||||||||||||||
Other asset-backed | 538.7 | 18.9 | -16.3 | 541.3 | 2.8 | ||||||||||||||
Available-for-sale debt securities | $ | 11,267.0 | $ | 874.6 | $ | -344.6 | $ | 11,797.0 | $ | -160.6 | |||||||||
Amounts applicable to the closed block | $ | 5,884.0 | $ | 565.7 | $ | -126.2 | $ | 6,323.5 | $ | -53.1 | |||||||||
Available-for-sale equity securities | $ | 32.6 | $ | 10.9 | $ | -7.8 | $ | 35.7 | $ | — | |||||||||
Amounts applicable to the closed block | $ | 13.4 | $ | 3.2 | $ | -4 | $ | 12.6 | $ | — | |||||||||
Maturities of Debt Securities | ' | ||||||||||||||||||
Maturities of Debt Securities: | December 31, 2012 | ||||||||||||||||||
($ in millions) | Amortized | Fair | |||||||||||||||||
Cost | Value | ||||||||||||||||||
Due in one year or less | $ | 1,128.7 | $ | 1,140.7 | |||||||||||||||
Due after one year through five years | 2,046.7 | 2,219.1 | |||||||||||||||||
Due after five years through ten years | 2,824.4 | 3,131.3 | |||||||||||||||||
Due after ten years | 2,541.2 | 2,852.0 | |||||||||||||||||
CMBS/RMBS/ABS/CDO/CLO(1) | 3,177.0 | 3,312.9 | |||||||||||||||||
Total | $ | 11,718.0 | $ | 12,656.0 | |||||||||||||||
Sales of Available-for-Sale Securities | ' | ||||||||||||||||||
Sales of Available-for-Sale Securities: | As of December 31, | ||||||||||||||||||
($ in millions) | 2012 | 2011 | 2010 | ||||||||||||||||
As restated | As restated | ||||||||||||||||||
and amended | and amended | ||||||||||||||||||
Fixed maturities, available-for-sale | |||||||||||||||||||
Proceeds from sales | $ | 1,541.6 | $ | 1,087.2 | $ | 1,446.9 | |||||||||||||
Proceeds from maturities/repayments | 1,757.0 | 1,264.0 | 1,246.4 | ||||||||||||||||
Gross investment gains from sales, prepayments and maturities | 52.3 | 13.6 | 57.9 | ||||||||||||||||
Gross investment losses from sales and maturities | -11.1 | -6 | -16 | ||||||||||||||||
Equity securities, available-for-sale | |||||||||||||||||||
Proceeds from sales | $ | 12.6 | $ | 9.4 | $ | 1.5 | |||||||||||||
Gross investment gains from sales | 8.5 | 3.8 | — | ||||||||||||||||
Gross investment losses from sales | -0.4 | -0.1 | — | ||||||||||||||||
Aging of Temporarily Impaired Securities | ' | ||||||||||||||||||
Aging of Temporarily Impaired Securities: | As of December 31, 2012 | ||||||||||||||||||
($ in millions) | Less than 12 months | Greater than 12 months | Total | ||||||||||||||||
Fair | Unrealized | Fair | Unrealized | Fair | Unrealized | ||||||||||||||
Value | Losses | Value | Losses | Value | Losses | ||||||||||||||
Debt Securities | |||||||||||||||||||
U.S. government and agency | $ | 9.0 | $ | -0.1 | $ | 28.4 | $ | -2.4 | $ | 37.4 | $ | -2.5 | |||||||
State and political subdivision | 13.5 | -0.8 | 7.1 | -1.3 | 20.6 | -2.1 | |||||||||||||
Foreign government | — | — | — | — | — | — | |||||||||||||
Corporate | 300.9 | -6.2 | 318.2 | -65.9 | 619.1 | -72.1 | |||||||||||||
CMBS | 8.4 | -1 | 30.7 | -6.9 | 39.1 | -7.9 | |||||||||||||
RMBS | 64.7 | -0.4 | 212.6 | -20.4 | 277.3 | -20.8 | |||||||||||||
CDO/CLO | 26.2 | -2 | 132.7 | -21.2 | 158.9 | -23.2 | |||||||||||||
Other asset-backed | 10.1 | -0.7 | 43.3 | -11.7 | 53.4 | -12.4 | |||||||||||||
Debt securities | 432.8 | -11.2 | 773.0 | -129.8 | 1,205.8 | -141 | |||||||||||||
Equity securities | 4.4 | -1.6 | 2.4 | -0.8 | 6.8 | -2.4 | |||||||||||||
Total temporarily impaired securities | $ | 437.2 | $ | -12.8 | $ | 775.4 | $ | -130.6 | $ | 1,212.6 | $ | -143.4 | |||||||
Amounts inside the closed block | $ | 150.7 | $ | -4.6 | $ | 332.4 | $ | -34.9 | $ | 483.1 | $ | -39.5 | |||||||
Amounts outside the closed block | $ | 286.5 | $ | -8.2 | $ | 443.0 | $ | -95.7 | $ | 729.5 | $ | -103.9 | |||||||
Amounts outside the closed block | $ | 29.8 | $ | -2 | $ | 177.5 | $ | -63.4 | $ | 207.3 | $ | -65.4 | |||||||
that are below investment grade | |||||||||||||||||||
Number of securities | 108 | 196 | 304 | ||||||||||||||||
Aging of Temporarily Impaired Securities: | As of December 31, 2011 | ||||||||||||||||||
($ in millions) | As restated and amended | ||||||||||||||||||
Less than 12 months | Greater than 12 months | Total | |||||||||||||||||
Fair | Unrealized | Fair | Unrealized | Fair | Unrealized | ||||||||||||||
Value | Losses | Value | Losses | Value | Losses | ||||||||||||||
Debt Securities | |||||||||||||||||||
U.S. government and agency | $ | — | $ | -2.4 | $ | 41.2 | $ | -5.4 | $ | 41.2 | $ | -7.8 | |||||||
State and political subdivision | 26.1 | -0.1 | 6.2 | -2.8 | 32.3 | -2.9 | |||||||||||||
Foreign government | 25.6 | -1.7 | — | — | 25.6 | -1.7 | |||||||||||||
Corporate | 367.0 | -29.4 | 501.2 | -142 | 868.2 | -171.4 | |||||||||||||
CMBS | 132.4 | -4.1 | 52.1 | -15.9 | 184.5 | -20 | |||||||||||||
RMBS | 178.1 | -7.8 | 392.4 | -62.8 | 570.5 | -70.6 | |||||||||||||
CDO/CLO | 15.4 | -0.8 | 167.6 | -53.1 | 183.0 | -53.9 | |||||||||||||
Other asset-backed | 101.3 | -2.1 | 57.8 | -14.2 | 159.1 | -16.3 | |||||||||||||
Debt securities | 845.9 | -48.4 | 1,218.5 | -296.2 | 2,064.4 | -344.6 | |||||||||||||
Equity securities | 12.1 | -7 | 0.4 | -0.8 | 12.5 | -7.8 | |||||||||||||
Total temporarily impaired securities | $ | 858.0 | $ | -55.4 | $ | 1,218.9 | $ | -297 | $ | 2,076.9 | $ | -352.4 | |||||||
Amounts inside the closed block | $ | 308.5 | $ | -23.6 | $ | 552.7 | $ | -106.6 | $ | 861.2 | $ | -130.2 | |||||||
Amounts outside the closed block | $ | 549.5 | $ | -31.8 | $ | 666.2 | $ | -190.4 | $ | 1,215.7 | $ | -222.2 | |||||||
Amounts outside the closed block | $ | 68.8 | $ | -13.9 | $ | 248.5 | $ | -125.2 | $ | 317.3 | $ | -139.1 | |||||||
that are below investment grade | |||||||||||||||||||
Number of securities | 255 | 304 | 559 | ||||||||||||||||
Credit Losses Recognized in Earnings on Debt Securities | ' | ||||||||||||||||||
The following table presents a roll-forward of pre-tax credit losses recognized in earnings related to debt securities for which a portion of the OTTI was recognized in OCI. | |||||||||||||||||||
Credit Losses Recognized in Earnings on Debt Securities for | As of December 31, | ||||||||||||||||||
which a Portion of the OTTI Loss was Recognized in OCI: | 2012 | 2011 | 2010 | ||||||||||||||||
($ in millions) | As restated | As restated | |||||||||||||||||
and amended | and amended | ||||||||||||||||||
Balance, beginning of period | $ | -79.1 | $ | -65.8 | $ | -50.6 | |||||||||||||
Add: Credit losses on securities not previously impaired(1) | -6.7 | -11.8 | -14.9 | ||||||||||||||||
Add: Credit losses on securities previously impaired(1) | -13.3 | -8.6 | -22.4 | ||||||||||||||||
Less: Credit losses on securities impaired due to intent to sell | — | — | — | ||||||||||||||||
Less: Credit losses on securities sold | 26.5 | 7.1 | 11.4 | ||||||||||||||||
Less: Credit losses upon adoption of new accounting guidance(2) | — | — | 10.7 | ||||||||||||||||
Less: Increases in cash flows expected on previously impaired securities | — | — | — | ||||||||||||||||
Balance, end of period | $ | -72.6 | $ | -79.1 | $ | -65.8 | |||||||||||||
Limited Partnerships and Other Investments | ' | ||||||||||||||||||
Limited Partnerships and Other Investments: | As of December 31, | ||||||||||||||||||
($ in millions) | 2012 | 2011 | |||||||||||||||||
As restated | |||||||||||||||||||
and amended | |||||||||||||||||||
Limited partnerships | |||||||||||||||||||
Private equity funds | $ | 241.7 | $ | 233.0 | |||||||||||||||
Mezzanine funds | 202.1 | 191.9 | |||||||||||||||||
Infrastructure funds | 42.5 | 35.4 | |||||||||||||||||
Hedge funds | 14.3 | 14.9 | |||||||||||||||||
Mortgage and real estate funds | 5.4 | 12.4 | |||||||||||||||||
Leveraged leases | 17.9 | 24.1 | |||||||||||||||||
Direct equity investments | 29.2 | 28.5 | |||||||||||||||||
Life settlements | 21.0 | 21.1 | |||||||||||||||||
Other alternative assets | 3.2 | 4.0 | |||||||||||||||||
Limited partnerships and other investments | $ | 577.3 | $ | 565.3 | |||||||||||||||
Amounts applicable to the closed block | $ | 353.1 | $ | 338.0 | |||||||||||||||
Aggregated Summarized Balance Sheet Information of Equity Method Investees | ' | ||||||||||||||||||
Aggregated Summarized Balance Sheet Information of Equity Method Investees: | As of December 31, | ||||||||||||||||||
($ in millions) | 2012 | 2011 | |||||||||||||||||
As restated | |||||||||||||||||||
and amended | |||||||||||||||||||
Total assets | $ | 60,921.3 | $ | 59,960.0 | |||||||||||||||
Total liabilities | $ | 2,298.4 | $ | 2,581.0 | |||||||||||||||
Aggregated Net Investment Income: | Years Ended December 31, | ||||||||||||||||||
($ in millions) | 2012 | 2011 | 2010 | ||||||||||||||||
As restated | As restated | ||||||||||||||||||
and amended | and amended | ||||||||||||||||||
Total investment revenues | $ | 2,389.6 | $ | 3,093.6 | $ | 3,083.7 | |||||||||||||
Net income | $ | 8,315.2 | $ | 5,489.5 | $ | 8,375.4 | |||||||||||||
Investment in Leveraged Leases | ' | ||||||||||||||||||
Investment in leveraged leases, included in limited partnerships and other investments, consisted of the following: | |||||||||||||||||||
Investment in Leveraged Leases: | 2012 | 2011 | |||||||||||||||||
($ in millions) | As restated | ||||||||||||||||||
and amended | |||||||||||||||||||
Rental receivables, net | $ | 11.4 | $ | 13.5 | |||||||||||||||
Estimated residual values | 7.3 | 12.8 | |||||||||||||||||
Unearned income | -0.8 | -2.2 | |||||||||||||||||
Investment in leveraged leases | $ | 17.9 | $ | 24.1 | |||||||||||||||
Investment Income after Income Tax from | As of December 31, | ||||||||||||||||||
Investment in Leveraged Leases: | 2012 | 2011 | 2010 | ||||||||||||||||
($ in millions) | As restated | As restated | |||||||||||||||||
and amended | and amended | ||||||||||||||||||
Income from investment in leveraged leases | $ | 0.2 | $ | 0.2 | $ | 0.3 | |||||||||||||
Less: Income tax expense on leveraged leases | -0.1 | -0.1 | -0.1 | ||||||||||||||||
Investment income after income tax from investment in leveraged leases | $ | 0.1 | $ | 0.1 | $ | 0.2 | |||||||||||||
Carrying value and change in investment balance of non-consolidated direct equity investments | ' | ||||||||||||||||||
The following table presents the carrying value and change in investment balance of non-consolidated direct equity investments: | |||||||||||||||||||
Carrying Value and Change in Investment Balance of | |||||||||||||||||||
Non-Consolidated Direct Equity Investments: | |||||||||||||||||||
($ in millions) | |||||||||||||||||||
Year ended December 31, 2010 | $ | 18.4 | |||||||||||||||||
Net contributions (distributions) | 9.8 | ||||||||||||||||||
Net income (loss) | 0.3 | ||||||||||||||||||
Year ended December 31, 2011 | 28.5 | ||||||||||||||||||
Net contributions (distributions) | 0.8 | ||||||||||||||||||
Net income (loss) | -0.1 | ||||||||||||||||||
Year ended December 31, 2012 | $ | 29.2 | |||||||||||||||||
Remaining Life Expectancy of Insured | ' | ||||||||||||||||||
Remaining Life Expectancy of Insured: | Face Value | ||||||||||||||||||
($ in millions) | Number of | Carrying | (Death | ||||||||||||||||
Contracts | Value | Benefits) | |||||||||||||||||
0-4 years | — | $ | — | $ | — | ||||||||||||||
4-5 years | 6 | 12.6 | 23.0 | ||||||||||||||||
Thereafter | 8 | 8.4 | 37.1 | ||||||||||||||||
Total | 14 | $ | 21.0 | $ | 60.1 | ||||||||||||||
Sources of Net Investment Income | ' | ||||||||||||||||||
Sources of Net Investment Income: | Years Ended December 31, | ||||||||||||||||||
($ in millions) | 2012 | 2011 | 2010 | ||||||||||||||||
As restated | As restated | ||||||||||||||||||
and amended | and amended | ||||||||||||||||||
Debt securities | $ | 606.6 | $ | 607.9 | $ | 597.9 | |||||||||||||
Equity securities | 3.0 | 1.1 | 2.4 | ||||||||||||||||
Limited partnerships and other investments | 64.7 | 48.9 | 69.2 | ||||||||||||||||
Policy loans | 161.5 | 171.8 | 171.7 | ||||||||||||||||
Fair value investments | 9.4 | 3.5 | 12.5 | ||||||||||||||||
Total investment income | 845.2 | 833.2 | 853.7 | ||||||||||||||||
Less: Discontinued operations | 2.1 | 2.1 | 5.0 | ||||||||||||||||
Less: Investment expenses | 13.8 | 8.2 | 8.2 | ||||||||||||||||
Net investment income | $ | 829.3 | $ | 822.9 | $ | 840.5 | |||||||||||||
Amounts applicable to closed block | $ | 452.9 | $ | 465.5 | $ | 494.3 | |||||||||||||
Sources and Types of Net Realized Investment Gains (Losses): | ' | ||||||||||||||||||
Sources and Types of Net Realized Investment Gains (Losses): | Years Ended December 31, | ||||||||||||||||||
($ in millions) | 2012 | 2011 | 2010 | ||||||||||||||||
As restated | As restated | ||||||||||||||||||
and amended | and amended | ||||||||||||||||||
Total other-than-temporary debt impairments | $ | -45.7 | $ | -64.5 | $ | -107 | |||||||||||||
Portion of loss recognized in OCI | 22.9 | 38.5 | 58.7 | ||||||||||||||||
Net debt impairments recognized in earnings | $ | -22.8 | $ | -26 | $ | -48.3 | |||||||||||||
Debt security impairments: | |||||||||||||||||||
U.S. government and agency | $ | — | $ | — | $ | — | |||||||||||||
State and political subdivision | -0.6 | — | — | ||||||||||||||||
Foreign government | — | — | — | ||||||||||||||||
Corporate | -3 | -9 | -7.3 | ||||||||||||||||
CMBS | -4.1 | -3.6 | -6.6 | ||||||||||||||||
RMBS | -10.3 | -10.1 | -15.9 | ||||||||||||||||
CDO/CLO | -3.8 | -2.1 | -15 | ||||||||||||||||
Other asset-backed | -1 | -1.2 | -3.5 | ||||||||||||||||
Net debt security impairments | -22.8 | -26 | -48.3 | ||||||||||||||||
Equity security impairments | -5.7 | -0.8 | -0.2 | ||||||||||||||||
Limited partnerships and other investment impairments | -0.3 | — | -0.1 | ||||||||||||||||
Impairment losses | -28.8 | -26.8 | -48.6 | ||||||||||||||||
Debt security transaction gains | 52.3 | 13.6 | 57.9 | ||||||||||||||||
Debt security transaction losses | -11.1 | -6 | -16 | ||||||||||||||||
Equity security transaction gains | 8.5 | 3.8 | — | ||||||||||||||||
Equity security transaction losses | -0.4 | -0.1 | — | ||||||||||||||||
Limited partnerships and other investment gains | 7.7 | 4.8 | 13.8 | ||||||||||||||||
Limited partnerships and other investment losses | -2.5 | -4.8 | -6.9 | ||||||||||||||||
Sale of Goodwin | — | 4.0 | — | ||||||||||||||||
Net transaction gains | 54.5 | 15.3 | 48.8 | ||||||||||||||||
Derivative instruments | -50.4 | 14.4 | -26.6 | ||||||||||||||||
Embedded derivatives(1) | 12.1 | -34.4 | 12.3 | ||||||||||||||||
Assets valued at fair value | 2.1 | 0.6 | 2.9 | ||||||||||||||||
Net realized investment gains (losses), excluding impairment losses | 18.3 | -5.3 | 37.4 | ||||||||||||||||
Net realized investment gains (losses), including impairment losses | $ | -10.5 | $ | -32.1 | $ | -11.2 | |||||||||||||
Sources of Changes in Net Unrealized Investment Gains | ' | ||||||||||||||||||
Sources of Changes in Net Unrealized Investment Gains: | Years Ended December 31, | ||||||||||||||||||
($ in millions) | 2012 | 2011 | 2010 (1) | ||||||||||||||||
As restated | As restated | ||||||||||||||||||
and amended | and amended | ||||||||||||||||||
Debt securities | $ | 408.0 | $ | 281.1 | $ | 590.0 | |||||||||||||
Equity securities | 4.2 | -7.4 | 6.4 | ||||||||||||||||
Other investments | -0.2 | -0.2 | 0.5 | ||||||||||||||||
Net unrealized investment gains | $ | 412.0 | $ | 273.5 | $ | 596.9 | |||||||||||||
Net unrealized investment gains | $ | 412.0 | $ | 273.5 | $ | 596.9 | |||||||||||||
Applicable closed block policyholder dividend obligation | 168.0 | 158.6 | 287.2 | ||||||||||||||||
Applicable deferred policy acquisition cost | 75.1 | 52.8 | 136.2 | ||||||||||||||||
Applicable other actuarial offsets | 75.2 | 37.2 | 24.3 | ||||||||||||||||
Applicable deferred income tax expense (benefit) | 90.9 | 0.3 | 87.0 | ||||||||||||||||
Offsets to net unrealized investment gains | 409.2 | 248.9 | 534.7 | ||||||||||||||||
Net unrealized investment gains included in OCI | $ | 2.8 | $ | 24.6 | $ | 62.2 | |||||||||||||
Carrying Value of Assets and Liabilities | ' | ||||||||||||||||||
The following table presents the total assets and total liabilities relating to consolidated VIEs at December 31, 2012 and 2011. | |||||||||||||||||||
Carrying Value of Assets and Liabilities for | December 31, 2012 | December 31, 2011 | |||||||||||||||||
Consolidated Variable Interest Entities: | As restated and amended | ||||||||||||||||||
($ in millions) | Maximum | Maximum | |||||||||||||||||
Exposure | Exposure | ||||||||||||||||||
Assets | Liabilities | to Loss(1) | Assets | Liabilities | to Loss(1) | ||||||||||||||
Debt securities, at fair value(2) | $ | 3.6 | $ | — | $ | 3.4 | $ | 0.3 | $ | — | $ | 0.2 | |||||||
Equity securities, at fair value(2) | 23.4 | — | 19.2 | 27.8 | — | 26.5 | |||||||||||||
Cash and cash equivalents | 10.2 | — | 10.2 | 3.5 | — | 3.3 | |||||||||||||
Investment in partnership interests(2) | 11.0 | — | 11.0 | 14.6 | — | 14.6 | |||||||||||||
Investment in single asset LLCs(2) | 6.8 | — | 5.4 | 1.7 | — | 1.0 | |||||||||||||
Other assets | 5.5 | 5.5 | 0.1 | — | |||||||||||||||
Total assets of consolidated VIEs | $ | 60.5 | $ | — | $ | 54.7 | $ | 48.0 | $ | — | $ | 45.6 | |||||||
Total liabilities of consolidated VIEs | $ | — | $ | 5.1 | $ | 5.1 | $ | — | $ | 0.1 | $ | 0.1 | |||||||
-1 | |||||||||||||||||||
Carrying Value of Assets and Liabilities | December 31, 2012 | December 31, 2011 | |||||||||||||||||
and Maximum Exposure Loss Relating | As restated and amended | ||||||||||||||||||
to Variable Interest Entities: | Maximum | Maximum | |||||||||||||||||
($ in millions) | Exposure | Exposure | |||||||||||||||||
Assets | Liabilities | to Loss(1) | Assets | Liabilities | to Loss(1) | ||||||||||||||
Limited partnerships | $ | 136.5 | $ | — | $ | 202.1 | $ | 133.2 | $ | — | $ | 201.6 | |||||||
LLCs | 3.2 | — | 3.2 | 8.5 | — | 8.5 | |||||||||||||
Total | $ | 139.7 | $ | — | $ | 205.3 | $ | 141.7 | $ | — | $ | 210.1 |
10_Financing_Activities_Tables
10. Financing Activities (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2012 | |||||||||
Debt Disclosure [Abstract] | ' | ||||||||
Indebtedness at Carrying Value | ' | ||||||||
Indebtedness at Carrying Value: | As of December 31, | ||||||||
($ in millions) | 2012 | 2011 | |||||||
7.15% surplus notes | $ | 126.1 | $ | 174.2 | |||||
7.45% senior unsecured bonds | 252.7 | 252.7 | |||||||
Total indebtedness | $ | 378.8 | $ | 426.9 | |||||
Interest Expense on Indebtedness, including Amortization of Debt Issuance Costs | ' | ||||||||
Interest Expense on Indebtedness, including Amortization of Debt Issuance Costs: | Years Ended December 31, | ||||||||
($ in millions) | 2012 | 2011 | 2010 | ||||||
Surplus notes | $ | 11.6 | $ | 12.5 | $ | 12.5 | |||
Senior unsecured bonds | 19.2 | 19.3 | 19.3 | ||||||
Interest expense on indebtedness | $ | 30.8 | $ | 31.8 | $ | 31.8 |
12_Separate_Accounts_Death_Ben1
12. Separate Accounts Death Benefits and Other Insurance Benefit Features and Embedded Product (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2012 | |||||||||
Notes to Financial Statements | ' | ||||||||
Separate Account Investments of Account Balances of Variable Annuity Contracts with Insurance Guarantees | ' | ||||||||
Separate Account Investments of Account Balances of Variable Annuity Contracts with Insurance Guarantees: | As of December 31, | ||||||||
($ in millions) | 2012 | 2011 | |||||||
Debt securities | $ | 484.6 | $ | 515.4 | |||||
Equity funds | 1,862.2 | 1,883.3 | |||||||
Other | 69.6 | 81.7 | |||||||
Total | $ | 2,416.4 | $ | 2,480.4 | |||||
Changes in Guaranteed Insurance Benefit Liability Balances | ' | ||||||||
Changes in Guaranteed Insurance Benefit Liability Balances: | Year Ended | ||||||||
($ in millions) | December 31, 2012 | ||||||||
Annuity | Annuity | ||||||||
GMDB | GMIB | ||||||||
Liability balance as of January 1, 2012 | $ | 16.4 | $ | 17.8 | |||||
Incurred | 0.6 | 4.0 | |||||||
Paid | -1.1 | — | |||||||
Assumption unlocking | — | -0.2 | |||||||
Liability balance as of December 31, 2012 | $ | 15.9 | $ | 21.6 | |||||
Changes in Guaranteed Insurance Benefit Liability Balances: | Year Ended | ||||||||
($ in millions) | December 31, 2011 | ||||||||
As restated and amended | |||||||||
Annuity | Annuity | ||||||||
GMDB | GMIB | ||||||||
Liability balance as of January 1, 2011 | $ | 17.7 | $ | 18.1 | |||||
Incurred | 0.8 | -0.7 | |||||||
Paid | -2.1 | — | |||||||
Assumption unlocking | — | 0.4 | |||||||
Liability balance as of December 31, 2011 | $ | 16.4 | $ | 17.8 | |||||
Changes in Guaranteed Insurance Benefit Liability Balances: | Year Ended | ||||||||
($ in millions) | December 31, 2010 | ||||||||
As restated and amended | |||||||||
Annuity | Annuity | ||||||||
GMDB | GMIB | ||||||||
Liability balance as of January 1, 2010 | $ | 19.1 | $ | 16.3 | |||||
Incurred | 3.7 | 2.4 | |||||||
Paid | -5.1 | — | |||||||
Assumption unlocking | — | -0.6 | |||||||
Liability balance as of December 31, 2010 | $ | 17.7 | $ | 18.1 | |||||
Variable Annuity GMDB Benefits | ' | ||||||||
GMDB and GMIB Benefits by Type: | NAR | Average | |||||||
($ in millions) | Account | after | Attained Age | ||||||
Value | Reinsurance | of Annuitant | |||||||
2012 | |||||||||
GMDB return of premium | $ | 799.2 | $ | 6.4 | 62 | ||||
GMDB step up | 1,957.2 | 25.6 | 63 | ||||||
GMDB earnings enhancement benefit (“EEB”) | 37.5 | 0.1 | 63 | ||||||
GMDB greater of annual step up and roll up | 26.7 | 7.4 | 67 | ||||||
Total GMDB at December 31, 2012 | 2,820.6 | $ | 39.5 | ||||||
Less: General account value with GMDB | 420.6 | ||||||||
Subtotal separate account liabilities with GMDB | 2,400.0 | ||||||||
Separate account liabilities without GMDB | 916.5 | ||||||||
Total separate account liabilities | $ | 3,316.5 | |||||||
GMIB(1) at December 31, 2012 | $ | 416.8 | 64 | ||||||
2011 as restated and amended | |||||||||
GMDB return of premium | $ | 839.6 | $ | 22.5 | 61 | ||||
GMDB step up | 1,999.5 | 99.1 | 62 | ||||||
GMDB earnings enhancement benefit (“EEB”) | 39.8 | 0.4 | 62 | ||||||
GMDB greater of annual step up and roll up | 27.1 | 8.8 | 66 | ||||||
Total GMDB at December 31, 2011 | 2,906.0 | $ | 130.8 | ||||||
Less: General account value with GMDB | 444.1 | ||||||||
Subtotal separate account liabilities with GMDB | 2,461.9 | ||||||||
Separate account liabilities without GMDB | 1,355.0 | ||||||||
Total separate account liabilities | $ | 3,816.9 | |||||||
GMIB(1) at December 31, 2011 | $ | 442.1 | 63 | ||||||
Changes in Guaranteed Liability Balances | ' | ||||||||
Changes in Guaranteed Liability Balances: | Fixed Indexed Annuity | ||||||||
($ in millions) | GMWB & GMDB | ||||||||
Year Ended December 31, | |||||||||
2012 | 2011 | 2010 | |||||||
As restated | As restated | ||||||||
and amended | and amended | ||||||||
Liability balance, beginning of period | $ | 5.6 | $ | 0.5 | $ | — | |||
Incurred | 40.1 | 5.1 | 0.5 | ||||||
Paid | — | — | — | ||||||
Liability balance, end of period | $ | 45.7 | $ | 5.6 | $ | 0.5 | |||
Changes in Guaranteed Liability Balances: | Universal Life | ||||||||
($ in millions) | Year Ended December 31, | ||||||||
2012 | 2011 | 2010 | |||||||
As restated | As restated | ||||||||
and amended | and amended | ||||||||
Liability balance, beginning of period | $ | 115.9 | $ | 104.5 | $ | 77.4 | |||
Incurred | 30.8 | 34.6 | 39.4 | ||||||
Paid | -9.5 | -6.2 | -20.2 | ||||||
Assumption unlocking | -4.5 | -17 | 7.9 | ||||||
Liability balance, end of period | $ | 132.7 | $ | 115.9 | $ | 104.5 | |||
Non-Insurance Guaranteed Product Features | ' | ||||||||
Non-Insurance Guaranteed Product Features: | Average | ||||||||
($ in millions) | Attained | ||||||||
Account | Age of | ||||||||
Value | Annuitant | ||||||||
2012 | |||||||||
GMWB | $ | 578.4 | 63 | ||||||
GMAB | 390.6 | 58 | |||||||
COMBO | 8.5 | 62 | |||||||
Total at December 31, 2012 | $ | 977.5 | |||||||
2011 as amended and restated | |||||||||
GMWB | $ | 572.5 | 62 | ||||||
GMAB | 385.6 | 57 | |||||||
COMBO | 10.1 | 61 | |||||||
Total at December 31, 2011 | $ | 968.2 | |||||||
Variable Annuity Embedded Derivative Liabilities | ' | ||||||||
Variable Annuity Embedded Derivative Liabilities: | As of December 31, | ||||||||
($ in millions) | 2012 | 2011 | |||||||
As restated | |||||||||
and amended | |||||||||
GMWB | $ | 15.3 | $ | 23.6 | |||||
GMAB | 14.6 | 25.3 | |||||||
COMBO | -0.3 | -0.3 | |||||||
Total variable annuity embedded derivative liabilities | $ | 29.6 | $ | 48.6 |
13_Derivative_Instruments_Tabl
13. Derivative Instruments (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2012 | |||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ' | ||||||||||
Derivative Instruments | ' | ||||||||||
Derivative Instruments: | Fair Value as of | ||||||||||
($ in millions) | December 31, 2012 | ||||||||||
Notional | |||||||||||
Maturity | Amount | Assets | Liabilities(1) | ||||||||
Interest rate swaps | 2016-2027 | $ | 180.0 | $ | 15.5 | $ | 7.7 | ||||
Variance swaps | 2015-2017 | 0.9 | — | 4.4 | |||||||
Swaptions | 2024 | 25.0 | — | — | |||||||
Put options | 2015-2022 | 406.0 | 72.7 | — | |||||||
Call options(2) | 2013-2017 | 1,328.4 | 53.3 | 33.6 | |||||||
Cross currency swaps | 2016 | 10.0 | — | 0.1 | |||||||
Equity futures | 2013 | 184.7 | 15.9 | — | |||||||
Total derivative instruments | $ | 2,135.0 | $ | 157.4 | $ | 45.8 | |||||
Derivative Instruments: | Fair Value as of | ||||||||||
($ in millions) | December 31, 2011 | ||||||||||
As restated and amended | |||||||||||
Notional | |||||||||||
Maturity | Amount | Assets | Liabilities(1) | ||||||||
Interest rate swaps | 2017-2026 | $ | 131.0 | $ | 13.7 | $ | 5.2 | ||||
Variance swaps | 2015-2017 | 0.9 | 2.8 | — | |||||||
Swaptions | 2024 | 25.0 | 0.2 | — | |||||||
Put options | 2015-2022 | 406.0 | 95.4 | — | |||||||
Call options(2) | 2012-2016 | 700.4 | 31.4 | 19.0 | |||||||
Cross currency swaps | 2012-2016 | 15.0 | 0.2 | — | |||||||
Equity futures | 2012 | 70.0 | 18.5 | — | |||||||
Total derivative instruments | $ | 1,348.3 | $ | 162.2 | $ | 24.2 | |||||
Derivative Instrument Gains (Losses) Recognized in earning | ' | ||||||||||
Derivative Instrument Gains (Losses) Recognized in | Years Ended December 31, | ||||||||||
Realized Investment Gains (Losses): | 2012 | 2011 | 2010 | ||||||||
($ in millions) | As restated | As restated | |||||||||
and amended | and amended | ||||||||||
Derivative instruments by type | |||||||||||
Interest rate swaps | $ | -0.9 | $ | 10.3 | $ | — | |||||
Variance swaps | -7.9 | 3.5 | -0.6 | ||||||||
Swaptions | -0.2 | -1.3 | 1.7 | ||||||||
Put options | -22 | 19.8 | -4.1 | ||||||||
Call options | 0.1 | -11.9 | 11.2 | ||||||||
Equity futures | -19.4 | -6.2 | -35.9 | ||||||||
Cross currency swaps | -0.1 | 0.2 | 1.1 | ||||||||
Embedded derivatives | 12.1 | -34.4 | 12.3 | ||||||||
Total derivative instrument losses recognized in realized investment gains (losses) | $ | -38.3 | $ | -20 | $ | -14.3 |
14_Fair_Value_of_Financial_Ins1
14. Fair Value of Financial Instruments (Tables) | 12 Months Ended | |||||||||||||||||||||||
Dec. 31, 2012 | ||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | ' | |||||||||||||||||||||||
Financial instruments carried at fair value on a recurring | ' | |||||||||||||||||||||||
Fair Values of Financial Instruments by Level: | As of December 31, 2012 | |||||||||||||||||||||||
($ in millions) | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
Assets | ||||||||||||||||||||||||
Available-for-sale debt securities | ||||||||||||||||||||||||
U.S. government and agency | $ | 699.6 | $ | 115.2 | $ | 296.7 | -1 | $ | 1,111.5 | |||||||||||||||
State and political subdivision | — | 144.8 | 212.4 | 357.2 | ||||||||||||||||||||
Foreign government | — | 158.5 | 45.8 | 204.3 | ||||||||||||||||||||
Corporate | — | 3,857.7 | 3,812.3 | 7,670.0 | ||||||||||||||||||||
CMBS | — | 792.5 | 89.7 | 882.2 | ||||||||||||||||||||
RMBS | — | 1,062.4 | 709.3 | 1,771.7 | ||||||||||||||||||||
CDO/CLO | — | — | 223.7 | 223.7 | ||||||||||||||||||||
Other asset-backed | — | 125.5 | 309.9 | 435.4 | ||||||||||||||||||||
Available-for-sale equity securities | 2.1 | — | 32.7 | 34.8 | ||||||||||||||||||||
Derivative assets | 15.9 | 141.5 | — | 157.4 | ||||||||||||||||||||
Fair value investments (2) | 30.6 | 17.6 | 153.3 | 201.5 | ||||||||||||||||||||
Separate account assets | 3,316.5 | — | — | 3,316.5 | ||||||||||||||||||||
Total assets | $ | 4,064.7 | $ | 6,415.7 | $ | 5,885.8 | $ | 16,366.2 | ||||||||||||||||
Liabilities | ||||||||||||||||||||||||
Derivative liabilities | $ | — | $ | 45.8 | $ | — | $ | 45.8 | ||||||||||||||||
Embedded derivatives | — | 80.8 | 80.8 | |||||||||||||||||||||
Total liabilities | $ | — | $ | 45.8 | $ | 80.8 | $ | 126.6 | ||||||||||||||||
——————— | ||||||||||||||||||||||||
-1 | ||||||||||||||||||||||||
Includes securities whose underlying collateral is an obligation of a U.S. government entity. | ||||||||||||||||||||||||
-2 | ||||||||||||||||||||||||
Fair value investments at December 31, 2012 include $126.1 million of debt securities recorded at fair value. In addition, we have also elected the fair value option for equity securities backing our deferred compensation liabilities at $21.9 million as of December 31, 2012. Changes in the fair value of these assets are recorded through net investment income. Additionally, $53.5 million of assets relate to investment holdings of consolidated VIEs held at fair value, $8.7 million of which are Level 1 securities. | ||||||||||||||||||||||||
There were no transfers of assets between Level 1 and Level 2 during the year ended December 31, 2012. | ||||||||||||||||||||||||
Fair Values of Financial Instruments by Level: | As of December 31, 2011 | |||||||||||||||||||||||
($ in millions) | As restated and amended | |||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||
Assets | ||||||||||||||||||||||||
Available-for-sale debt securities | ||||||||||||||||||||||||
U.S. government and agency | $ | 268.2 | $ | 137.4 | $ | 336.2 | -1 | $ | 741.8 | |||||||||||||||
State and political subdivision | — | 165.2 | 116.6 | 281.8 | ||||||||||||||||||||
Foreign government | — | 153.4 | 51.8 | 205.2 | ||||||||||||||||||||
Corporate | — | 3,056.7 | 3,501.5 | 6,558.2 | ||||||||||||||||||||
CMBS | — | 1,028.7 | 100.6 | 1,129.3 | ||||||||||||||||||||
RMBS | — | 1,162.8 | 944.2 | 2,107.0 | ||||||||||||||||||||
CDO/CLO | — | – | 232.4 | 232.4 | ||||||||||||||||||||
Other asset-backed | — | 205.8 | 335.5 | 541.3 | ||||||||||||||||||||
Available-for-sale equity securities | 1.5 | 4.8 | 29.4 | 35.7 | ||||||||||||||||||||
Derivative assets | 18.9 | 143.3 | — | 162.2 | ||||||||||||||||||||
Fair value investments (2) | 23.7 | 15.5 | 144.8 | 184.0 | ||||||||||||||||||||
Separate account assets | 3,738.6 | 78.3 | — | 3,816.9 | ||||||||||||||||||||
Total assets | $ | 4,050.9 | $ | 6,151.9 | $ | 5,793.0 | $ | 15,995.8 | ||||||||||||||||
Liabilities | ||||||||||||||||||||||||
Derivative liabilities | $ | — | $ | 24.2 | $ | — | $ | 24.2 | ||||||||||||||||
Embedded derivatives | — | — | 84.5 | 84.5 | ||||||||||||||||||||
Total liabilities | $ | — | $ | 24.2 | $ | 84.5 | $ | 108.7 | ||||||||||||||||
——————— | ||||||||||||||||||||||||
-1 | ||||||||||||||||||||||||
Includes securities whose underlying collateral is an obligation of a U.S. government entity. | ||||||||||||||||||||||||
-2 | ||||||||||||||||||||||||
Fair value investments at December 31, 2011 include $117.9 million of debt securities recorded at fair value. In addition, we have also elected the fair value option for equity securities backing our deferred compensation liabilities at $22.1 million as of December 31, 2011. Changes in the fair value of these assets are recorded through net investment income. Additionally, $44.0 million of assets relate to investment holdings of consolidated VIEs held at fair value, $1.6 million of which are Level 1 securities. | ||||||||||||||||||||||||
Corporates fair value on a recurring basis | ' | |||||||||||||||||||||||
Fair Values of Corporates by Level and Sector: | As of December 31, 2012 | |||||||||||||||||||||||
($ in millions) | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
Corporates | ||||||||||||||||||||||||
Consumer | $ | — | $ | 1,160.3 | $ | 1,860.8 | $ | 3,021.1 | ||||||||||||||||
Energy | — | 277.8 | 142.7 | 420.5 | ||||||||||||||||||||
Financial services | — | 1,456.5 | 762.7 | 2,219.2 | ||||||||||||||||||||
Technical/communications | — | 154.7 | 44.6 | 199.3 | ||||||||||||||||||||
Transportation | — | 72.6 | 156.0 | 228.6 | ||||||||||||||||||||
Utilities | — | 506.5 | 631.8 | 1,138.3 | ||||||||||||||||||||
Other | — | 229.3 | 213.7 | 443.0 | ||||||||||||||||||||
Total corporates | $ | — | $ | 3,857.7 | $ | 3,812.3 | $ | 7,670.0 | ||||||||||||||||
Fair Values of Corporates by Level and Sector: | As of December 31, 2011 | |||||||||||||||||||||||
($ in millions) | As restated and amended | |||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||
Corporates | ||||||||||||||||||||||||
Consumer | $ | — | $ | 898.4 | $ | 1,662.4 | $ | 2,560.8 | ||||||||||||||||
Energy | — | 171.7 | 131.4 | 303.1 | ||||||||||||||||||||
Financial services | — | 1,221.3 | 721.9 | 1,943.2 | ||||||||||||||||||||
Technical/communications | — | 130.9 | 23.8 | 154.7 | ||||||||||||||||||||
Transportation | — | 60.2 | 187.4 | 247.6 | ||||||||||||||||||||
Utilities | — | 467.4 | 619.2 | 1,086.6 | ||||||||||||||||||||
Other | — | 106.8 | 155.4 | 262.2 | ||||||||||||||||||||
Total corporates | $ | — | $ | 3,056.7 | $ | 3,501.5 | $ | 6,558.2 | ||||||||||||||||
Level 3 financial assets and liabilities | ' | |||||||||||||||||||||||
Level 3 Financial Assets: | As of December 31, 2012 | |||||||||||||||||||||||
($ in millions) | Balance, | Purchases | Sales | Transfers | Transfers | Realized & | Unrealized | Total | ||||||||||||||||
beginning | into | out of | unrealized | gains | ||||||||||||||||||||
of period | Level 3 | Level 3 | gains | (losses) | ||||||||||||||||||||
(losses) | included | |||||||||||||||||||||||
included | in OCI | |||||||||||||||||||||||
in income (1) | ||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||
Available-for-sale debt securities | ||||||||||||||||||||||||
U.S. government and agency (2) | $ | 336.2 | $ | 5.4 | $ | -31.5 | $ | — | $ | — | $ | 0.4 | $ | -13.8 | $ | 296.7 | ||||||||
State and political subdivision | 116.6 | 53.5 | -3.1 | 22.1 | -11.4 | — | 34.7 | 212.4 | ||||||||||||||||
Foreign government | 51.8 | 5.0 | — | — | — | — | -11 | 45.8 | ||||||||||||||||
Corporate | 3,501.5 | 610.2 | -89.1 | 64.2 | -119.2 | 0.4 | -155.7 | 3,812.3 | ||||||||||||||||
CMBS | 100.6 | — | -12.1 | 32.4 | -30.4 | -4.1 | 3.3 | 89.7 | ||||||||||||||||
RMBS | 944.2 | 3.5 | -127.2 | — | — | -9.6 | -101.6 | 709.3 | ||||||||||||||||
CDO/CLO | 232.4 | 25.4 | -24.8 | — | — | 0.5 | -9.8 | 223.7 | ||||||||||||||||
Other asset-backed | 335.5 | 17.2 | -30.7 | 0.1 | -11.4 | -2.1 | 1.3 | 309.9 | ||||||||||||||||
Available-for-sale equity securities | 29.4 | 11.5 | -16.1 | 0.2 | — | 6.8 | 0.9 | 32.7 | ||||||||||||||||
Fair value investments | 144.8 | 36.0 | -37.1 | — | — | 9.6 | — | 153.3 | ||||||||||||||||
Total assets | $ | 5,793.0 | $ | 767.7 | $ | -371.7 | $ | 119.0 | $ | -172.4 | $ | 1.9 | $ | -251.7 | $ | 5,885.8 | ||||||||
——————— | ||||||||||||||||||||||||
-1 | ||||||||||||||||||||||||
Reflected in realized investment gains and losses for all assets except limited partnerships and other investments which are included in net investment income. | ||||||||||||||||||||||||
-2 | ||||||||||||||||||||||||
Includes securities whose underlying collateral is an obligation of a U.S. government entity. | ||||||||||||||||||||||||
Level 3 Financial Assets: | As of December 31, 2011 | |||||||||||||||||||||||
As restated and amended | ||||||||||||||||||||||||
($ in millions) | Balance, | Purchases | Sales | Transfers | Transfers | Realized & | Unrealized | Total | ||||||||||||||||
beginning | into | out of | unrealized | gains | ||||||||||||||||||||
of period | Level 3 | Level 3 | gains | (losses) | ||||||||||||||||||||
(losses) | included | |||||||||||||||||||||||
included | in OCI | |||||||||||||||||||||||
in income (1) | ||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||
Available-for-sale debt securities | ||||||||||||||||||||||||
U.S. government and agency (2) | $ | 341.4 | $ | 20.9 | $ | -10.6 | $ | 6.9 | $ | — | $ | — | $ | -22.4 | $ | 336.2 | ||||||||
State and political subdivision | 67.1 | 44.5 | -1.8 | — | — | — | 6.8 | 116.6 | ||||||||||||||||
Foreign government | 47.1 | 6.6 | — | 6.8 | -3.5 | — | -5.2 | 51.8 | ||||||||||||||||
Corporate | 3,278.3 | 438.4 | -86.1 | 125.7 | -88.9 | -7.6 | -158.3 | 3,501.5 | ||||||||||||||||
CMBS | 91.7 | 32.0 | -5 | 17.6 | -36.7 | -3.6 | 4.6 | 100.6 | ||||||||||||||||
RMBS | 919.1 | 185.0 | -156.5 | — | — | -9.7 | 6.3 | 944.2 | ||||||||||||||||
CDO/CLO | 238.0 | 18.7 | -14.2 | — | — | -1.8 | -8.3 | 232.4 | ||||||||||||||||
Other asset-backed | 252.8 | 100.9 | -38.6 | 3.4 | -7.7 | -3.9 | 28.6 | 335.5 | ||||||||||||||||
Available-for-sale equity securities | 36.2 | 4.4 | -8.6 | 0.6 | — | 3.6 | -6.8 | 29.4 | ||||||||||||||||
Fair value investments | 126.0 | 37.2 | -17.9 | 37.3 | — | -37.8 | — | 144.8 | ||||||||||||||||
Total assets | $ | 5,397.7 | $ | 888.6 | $ | -339.3 | $ | 198.3 | $ | -136.8 | $ | -60.8 | $ | -154.7 | $ | 5,793.0 | ||||||||
——————— | ||||||||||||||||||||||||
-1 | ||||||||||||||||||||||||
Reflected in realized investment gains and losses for all assets except limited partnerships and other investments which are included in net investment income. | ||||||||||||||||||||||||
-2 | ||||||||||||||||||||||||
Includes securities whose underlying collateral is an obligation of a U.S. government entity. | ||||||||||||||||||||||||
Level 3 Financial Liabilities: | Embedded Derivatives | |||||||||||||||||||||||
Years Ended December 31, | ||||||||||||||||||||||||
($ in millions) | 2012 | 2011 | ||||||||||||||||||||||
As restated | ||||||||||||||||||||||||
and amended | ||||||||||||||||||||||||
Balance, beginning of period | $ | 84.5 | $ | 30.4 | ||||||||||||||||||||
Net purchases/(sales) | 8.4 | 19.7 | ||||||||||||||||||||||
Transfers into Level 3 | — | — | ||||||||||||||||||||||
Transfers out of Level 3 | — | — | ||||||||||||||||||||||
Realized (gains) losses (1) | -12.1 | 34.4 | ||||||||||||||||||||||
Balance, end of period | $ | 80.8 | $ | 84.5 | ||||||||||||||||||||
——————— | ||||||||||||||||||||||||
-1 | ||||||||||||||||||||||||
Realized gains and losses are included in net realized investment gains on the consolidated statements of comprehensive income. | ||||||||||||||||||||||||
Quantitative estimates about unobservable inputs | ' | |||||||||||||||||||||||
Level 3 Assets:(1) | As of December 31, 2012 | |||||||||||||||||||||||
($ in millions) | ||||||||||||||||||||||||
Fair | Valuation | Unobservable | ||||||||||||||||||||||
Value | Technique(s) | Input | Range (Weighted Average) | |||||||||||||||||||||
U.S. government and | $ | 286.1 | Spread matrix | Yield | 1.46% - 5.19% (3.20%) | |||||||||||||||||||
agency | ||||||||||||||||||||||||
State and political | $ | 107.4 | Spread matrix | Yield | 1.94% - 3.53% (2.93%) | |||||||||||||||||||
subdivision | ||||||||||||||||||||||||
Discounted cash flow | Yield | 3.28% | ||||||||||||||||||||||
Corporate | $ | 2,888.9 | Spread matrix | Yield | 1.36% - 7.82% (3.21%) | |||||||||||||||||||
Discounted cash flow | Yield | 1.47% - 6.33% (2.80%) | ||||||||||||||||||||||
CDO/CLO | $ | 15.5 | Discounted cash flow | Prepayment rate | 20% (CLOs) | |||||||||||||||||||
Default rate | 2.55% (CLOs) | |||||||||||||||||||||||
Recovery rate | 65% (Loans), 35% (High yield bonds), | |||||||||||||||||||||||
45% (Investment grade bonds) | ||||||||||||||||||||||||
Reinvestment spread | 3 mo LIBOR + 400bps (CLOs) | |||||||||||||||||||||||
Other asset-backed | $ | 43.5 | Discounted cash flow | Yield | 0.5% - 9.5% (3.41%) | |||||||||||||||||||
Discounted cash flow | Prepayment rate | 2% | ||||||||||||||||||||||
Default rate | 2.53% for 48 mos then .33% thereafter | |||||||||||||||||||||||
Recovery rate | 10% (TRUPS) | |||||||||||||||||||||||
Fair value | $ | 5.0 | Discounted cash flow | Default rate | 0.24% | |||||||||||||||||||
investments | ||||||||||||||||||||||||
Recovery rate | 45% | |||||||||||||||||||||||
——————— | ||||||||||||||||||||||||
-1 | ||||||||||||||||||||||||
The following table presents quantitative estimates about unobservable inputs used in the fair value measurement of internally priced liabilities. | ||||||||||||||||||||||||
Level 3 Liabilities: | As of December 31, 2012 | |||||||||||||||||||||||
($ in millions) | Fair Value | Valuation Technique(s) | Unobservable Input | Range | ||||||||||||||||||||
Embedded derivatives | $ | 51.2 | Budget method | Swap curve | 0.21% - 2.50% | |||||||||||||||||||
(EIA / VED) | Mortality rate | 75% of A2000 basic table | ||||||||||||||||||||||
Lapse rate | 1.00% - 35.00% | |||||||||||||||||||||||
CSA | 4.47% | |||||||||||||||||||||||
Embedded derivatives | $ | 29.6 | Risk neutral stochastic | Volatility surface | 11.67% - 50.83% | |||||||||||||||||||
(GMAB / GMWB) | valuation methodology | |||||||||||||||||||||||
Swap curve | 0.36% - 3.17% | |||||||||||||||||||||||
Mortality rate | 75% of A2000 basic table | |||||||||||||||||||||||
Lapse rate | 0.00% - 60.00% | |||||||||||||||||||||||
CSA | 4.47% | |||||||||||||||||||||||
Total Level 3 liabilities | $ | 80.8 | ||||||||||||||||||||||
Level 3 Assets and Liabilities by Pricing Source | ' | |||||||||||||||||||||||
Level 3 Assets and Liabilities by Pricing Source: | As of December 31, 2012 | |||||||||||||||||||||||
($ in millions) | Internal (1) | External (2) | Total | |||||||||||||||||||||
Assets | ||||||||||||||||||||||||
Available-for-sale debt securities | ||||||||||||||||||||||||
U.S. government and agency (3) | $ | 286.1 | $ | 10.6 | $ | 296.7 | ||||||||||||||||||
State and political subdivision | 107.4 | 105.0 | 212.4 | |||||||||||||||||||||
Foreign government | — | 45.8 | 45.8 | |||||||||||||||||||||
Corporate | 2,888.9 | 923.4 | 3,812.3 | |||||||||||||||||||||
CMBS | — | 89.7 | 89.7 | |||||||||||||||||||||
RMBS | — | 709.3 | 709.3 | |||||||||||||||||||||
CDO/CLO | 15.5 | 208.2 | 223.7 | |||||||||||||||||||||
Other asset-backed | 43.5 | 266.4 | 309.9 | |||||||||||||||||||||
Available-for-sale equity securities | — | 32.7 | 32.7 | |||||||||||||||||||||
Fair value investments | 5.0 | 148.3 | 153.3 | |||||||||||||||||||||
Total assets | $ | 3,346.4 | $ | 2,539.4 | $ | 5,885.8 | ||||||||||||||||||
Liabilities | ||||||||||||||||||||||||
Embedded derivatives | $ | 80.8 | $ | — | $ | 80.8 | ||||||||||||||||||
Total liabilities | $ | 80.8 | $ | — | $ | 80.8 | ||||||||||||||||||
——————— | ||||||||||||||||||||||||
-1 | ||||||||||||||||||||||||
Represents valuations reflecting both internally-derived and market inputs, as well as third-party information or quotes. | ||||||||||||||||||||||||
-2 | ||||||||||||||||||||||||
Represents unadjusted prices from independent pricing services, third-party financial statements and independent indicative broker quotes where pricing inputs are not readily available. | ||||||||||||||||||||||||
-3 | ||||||||||||||||||||||||
Includes securities whose underlying collateral is an obligation of a U.S. government entity. | ||||||||||||||||||||||||
Level 3 Assets and Liabilities by Pricing Source: | As of December 31, 2011 | |||||||||||||||||||||||
($ in millions) | As restated and amended | |||||||||||||||||||||||
Internal (1) | External (2) | Total | ||||||||||||||||||||||
Assets | ||||||||||||||||||||||||
Available-for-sale debt securities | ||||||||||||||||||||||||
U.S. government and agency (3) | $ | 315.4 | $ | 20.8 | $ | 336.2 | ||||||||||||||||||
State and political subdivision | 30.9 | 85.7 | 116.6 | |||||||||||||||||||||
Foreign government | 10.4 | 41.4 | 51.8 | |||||||||||||||||||||
Corporate | 2,662.80 | 838.7 | 3,501.5 | |||||||||||||||||||||
CMBS | — | 100.6 | 100.6 | |||||||||||||||||||||
RMBS | — | 944.2 | 944.2 | |||||||||||||||||||||
CDO/CLO | 199.3 | 33.1 | 232.4 | |||||||||||||||||||||
Other asset-backed | 59.1 | 276.4 | 335.5 | |||||||||||||||||||||
Available-for-sale equity securities | — | 29.4 | 29.4 | |||||||||||||||||||||
Fair value investments | 37.9 | 106.9 | 144.8 | |||||||||||||||||||||
Total assets | $ | 3,315.8 | $ | 2,477.2 | $ | 5,793.0 | ||||||||||||||||||
Liabilities | ||||||||||||||||||||||||
Embedded derivatives | $ | 84.5 | $ | — | $ | 84.5 | ||||||||||||||||||
Total liabilities | $ | 84.5 | $ | — | $ | 84.5 | ||||||||||||||||||
——————— | ||||||||||||||||||||||||
-1 | ||||||||||||||||||||||||
Represents valuations reflecting both internally-derived and market inputs, as well as third-party information or quotes. | ||||||||||||||||||||||||
-2 | ||||||||||||||||||||||||
Represents unadjusted prices from independent pricing services, third-party financial statements and independent indicative broker quotes where pricing inputs are not readily available. | ||||||||||||||||||||||||
-3 | ||||||||||||||||||||||||
Includes securities whose underlying collateral is an obligation of a U.S. government entity. | ||||||||||||||||||||||||
Company's financial instruments where the carrying amounts and fair values differ: | ' | |||||||||||||||||||||||
Carrying Amounts and Fair Values | As of December 31, | |||||||||||||||||||||||
of Financial Instruments: | 2012 | 2011 | ||||||||||||||||||||||
($ in millions) | Fair Value | As restated and amended | ||||||||||||||||||||||
Hierarchy | Carrying | Fair | Carrying | Fair | ||||||||||||||||||||
Level | Value | Value | Value | Value | ||||||||||||||||||||
Financial assets: | ||||||||||||||||||||||||
Policy loans | Level 3 | $ | 2,354.7 | $ | 2,342.8 | $ | 2,379.3 | $ | 2,367.7 | |||||||||||||||
Cash and cash equivalents | Level 1 | 246.4 | 246.4 | 168.2 | 168.2 | |||||||||||||||||||
Financial liabilities: | ||||||||||||||||||||||||
Investment contracts | Level 3 | $ | 3,040.7 | $ | 3,045.9 | $ | 2,432.3 | $ | 2,443.5 | |||||||||||||||
Surplus notes | Level 3 | 126.1 | 95.0 | 174.2 | 126.9 | |||||||||||||||||||
Senior unsecured bonds | Level 2 | 252.7 | 217.1 | 252.7 | 195.1 |
15_Income_Taxes_Tables
15. Income Taxes (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2012 | |||||||||
Income Tax Disclosure [Abstract] | ' | ||||||||
Significant Components of Income Taxes | ' | ||||||||
Significant Components of Income Taxes from Continuing Operations: | Years Ended December 31, | ||||||||
($ in millions) | 2012 | 2011 | 2010 | ||||||
As restated | As restated | ||||||||
and amended | and amended | ||||||||
Current | |||||||||
U.S. | $ | 15.6 | $ | 12.3 | $ | 4.1 | |||
Foreign | — | — | — | ||||||
Deferred | |||||||||
U.S. | -19.3 | — | -14.4 | ||||||
Foreign | — | — | |||||||
Total income tax expense (benefit) | $ | -3.7 | $ | 12.3 | $ | -10.3 | |||
Reconciliation of Effective Income Tax Rate | ' | ||||||||
Reconciliation of Effective Income Tax Rate: | Years Ended December 31, | ||||||||
($ in millions) | 2012 | 2011 | 2010 | ||||||
As restated | As restated | ||||||||
and amended | and amended | ||||||||
Income (loss) from continuing operations before income taxes: | |||||||||
U.S. | $ | -156 | $ | 2.7 | $ | -41.6 | |||
Foreign | — | — | — | ||||||
Total | $ | -156 | $ | 2.7 | $ | -41.6 | |||
Income tax expense (benefit) at statutory rate of 35% | $ | -54.6 | $ | 1.0 | $ | -14.5 | |||
Dividend received deduction | -2.5 | -3.6 | -0.9 | ||||||
Expiration of tax attribute carryovers | 5.6 | — | 4.3 | ||||||
Low income housing tax credit | — | — | -1 | ||||||
Valuation allowance increase (release) | 48.4 | 14.3 | 3.3 | ||||||
Realized losses (gains) on available-for-sale securities pledged as collateral | — | — | — | ||||||
State income taxes (benefit) | — | -2.2 | -2.7 | ||||||
Other, net | -0.6 | 2.8 | 1.2 | ||||||
Income tax expense (benefit) applicable to continuing operations | $ | -3.7 | $ | 12.3 | $ | -10.3 | |||
Effective income tax rates | 2.40% | 455.50% | 24.80% | ||||||
Allocation of Income Taxes | ' | ||||||||
Allocation of Income Taxes: | Years Ended December 31, | ||||||||
($ in millions) | 2012 | 2011 | 2010 | ||||||
As restated | As restated | ||||||||
and amended | and amended | ||||||||
Income tax expense (benefit) from continuing operations | $ | -3.7 | $ | 12.3 | $ | -10.3 | |||
Income tax from OCI: | |||||||||
Unrealized | 90.9 | 0.3 | 87.0 | ||||||
Pension | — | — | — | ||||||
Policy dividend obligation & deferred policy acquisition cost | — | — | — | ||||||
Other | — | — | — | ||||||
Income tax related to cumulative effect of change in accounting | — | — | 3.1 | ||||||
Income tax expense (benefit) from discontinued operations | -1.5 | -2.4 | — | ||||||
Total income tax recorded to all components of income | $ | 85.7 | $ | 10.2 | $ | 79.8 | |||
Deferred Income Tax | ' | ||||||||
Deferred Income Tax Balances Attributable to Temporary Differences: | Years Ended December 31, | ||||||||
($ in millions) | 2012 | 2011 | |||||||
As restated | |||||||||
and amended | |||||||||
Deferred income tax assets | |||||||||
Future policyholder benefits | $ | 637.2 | $ | 505.0 | |||||
Unearned premiums / deferred revenues | 57.0 | 59.5 | |||||||
Employee benefits | 128.0 | 122.6 | |||||||
Net operating and capital loss carryover benefits | 244.0 | 276.3 | |||||||
Foreign tax credits carryover benefits | 2.2 | 2.0 | |||||||
Alternative minimum tax credits | 9.4 | 14.6 | |||||||
General business tax credits | 31.5 | 35.5 | |||||||
Other | 16.2 | 14.3 | |||||||
Available-for-sale debt securities | 49.4 | 120.6 | |||||||
Subtotal | 1,174.9 | 1,150.4 | |||||||
Valuation allowance | -523.3 | -408.4 | |||||||
Total deferred income tax assets, net of valuation allowance | 651.6 | 742.0 | |||||||
Deferred tax liabilities | |||||||||
Deferred policy acquisition costs | 191.8 | 254.0 | |||||||
Accrued liabilities | 348.8 | 291.8 | |||||||
Investments | 61.6 | 75.6 | |||||||
Gross deferred income tax liabilities | 602.2 | 621.4 | |||||||
Net deferred income tax assets | $ | 49.4 | $ | 120.6 | |||||
Reconciliation of unrecognized tax benefits | ' | ||||||||
Reconciliation of the Beginning and Ending Amount of Unrecognized Tax Benefits: | 2012 | 2011 | 2010 | ||||||
($ in millions) | |||||||||
Balance, beginning of period | $ | — | $ | — | $ | 0.1 | |||
Reductions for tax positions of prior years | — | — | -0.1 | ||||||
Settlements with taxing authorities | — | — | — | ||||||
Balance, end of period | $ | — | $ | — | $ | — |
16_Accumulated_Other_Comprehen1
16. Accumulated Other Comprehensive Income (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2012 | ||||||||||||
Equity [Abstract] | ' | |||||||||||
Accumulated Other Comprehensive Income (Loss): | ' | |||||||||||
Accumulated Other Comprehensive Income (Loss): | Net | Non-Credit | Net | Total | ||||||||
($ in millions) | Unrealized | Portion of | Pension | |||||||||
Investment | OTTI Losses | Liability | ||||||||||
Losses | Recognized | Adjustments | ||||||||||
in OCI | ||||||||||||
As restated and amended (1) | ||||||||||||
Balance, December 31, 2010 | $ | 126.8 | $ | -82.5 | $ | -200.5 | $ | -156.2 | ||||
Change in component during the year | 46.6 | -22 | -99.1 | -74.5 | ||||||||
Balance, December 31, 2011 | 173.4 | -104.5 | -299.6 | -230.7 | ||||||||
Change in component during the year | -21.3 | 24.1 | -21.4 | -18.6 | ||||||||
Balance, December 31, 2012 | $ | 152.1 | $ | -80.4 | $ | -321 | $ | -249.3 |
17_Employee_Benefit_Plans_and_1
17. Employee Benefit Plans and Employment Agreements (Tables) | 12 Months Ended | |||||||||||||||
Dec. 31, 2012 | ||||||||||||||||
Compensation and Retirement Disclosure [Abstract] | ' | |||||||||||||||
Pension and postretirement employee benefit plans | ' | |||||||||||||||
The assumptions used in calculating the benefit obligations and the net amount recognized for the years ended December 31, 2012, 2011 and 2010 are presented in the following tables. | ||||||||||||||||
Principal Rates and Assumptions: | Years Ended December 31, | |||||||||||||||
2012 | 2011 | 2010 | ||||||||||||||
As restated | As restated | |||||||||||||||
and amended | and amended | |||||||||||||||
Assumptions Used to Determine Benefit Obligations | ||||||||||||||||
Projected benefit obligation discount rate – Employee Plan | 3.98% | 4.53% | 5.32% | |||||||||||||
Projected benefit obligation discount rate – Supplemental Plan | 3.81% | 4.39% | 5.10% | |||||||||||||
Projected benefit obligation discount rate – Other Post-Employment Benefits | 3.37% | 4.11% | 4.79% | |||||||||||||
Future compensation increase rate | N/A(1) | N/A(1) | N/A(1) | |||||||||||||
Deferred investment gain/loss amortization corridor – Employee Plan | 5.00% | 5.00% | 5.00% | |||||||||||||
Deferred investment gain/loss amortization corridor – Supplemental Plan | 5.00% | 5.00% | 5.00% | |||||||||||||
Deferred investment gain/loss amortization corridor – Other Post-Employment Benefits | 10.00% | 10.00% | 10.00% | |||||||||||||
Future health care cost increase rate, age 64 and younger | 6.00% | N/A | N/A | |||||||||||||
Future health care cost increase rate, age 65 and older | N/A | N/A | N/A | |||||||||||||
Assumptions Used to Determine Benefit Expense | ||||||||||||||||
Projected benefit obligation discount rate – Employee Plan | 4.53% | 5.32% | 5.79% | |||||||||||||
Projected benefit obligation discount rate – Supplemental Plan | 4.39% | 5.10% | 5.62% | |||||||||||||
Projected benefit obligation discount rate – Other Post-Employment Benefits | 4.11%/3.35% | 4.79% | 5.32% | |||||||||||||
Future compensation increase rate | N/A(1) | N/A(1) | N/A(1) | |||||||||||||
Pension plan assets long-term rate of return | 8.00% | 8.00% | 8.00% | |||||||||||||
Deferred investment gain/loss amortization corridor – Employee Plan | 5.00% | 5.00% | 5.00% | |||||||||||||
Deferred investment gain/loss amortization corridor – Supplemental Plan | 5.00% | 5.00% | 5.00% | |||||||||||||
Deferred investment gain/loss amortization corridor – Other Post-Employment Plan | 10.00% | 10.00% | 10.00% | |||||||||||||
Future health care cost increase rate, age 64 and younger | 6.00% | N/A | 8.00% | |||||||||||||
Future health care cost increase rate, age 65 and older | N/A | N/A | N/A | |||||||||||||
The following table sets forth amounts of benefits expected to be paid over the next ten years from the Company’s pension and postretirement benefit plans as of December 31, 2012: | ||||||||||||||||
10-Year Benefit Payout Projection: | Employee | Supplemental | Other | |||||||||||||
($ in millions) | Plan | Plans | Postretirement(1) | Total | ||||||||||||
2013 | $ | 32.9 | $ | 8.3 | $ | 4.0 | $ | 45.2 | ||||||||
2014 | 33.4 | 8.4 | 3.8 | 45.6 | ||||||||||||
2015 | 33.9 | 8.5 | 3.6 | 46.0 | ||||||||||||
2016 | 34.7 | 8.6 | 3.4 | 46.7 | ||||||||||||
2017 | 35.2 | 8.6 | 3.2 | 47.0 | ||||||||||||
2018 to 2022 | 187.2 | 43.8 | 13.3 | 244.3 | ||||||||||||
Employee Pension Plan Asset Allocation: | As of December 31, | |||||||||||||||
2012 | 2011 | |||||||||||||||
Asset Category | ||||||||||||||||
Equity securities | 61% | 58% | ||||||||||||||
Debt securities | 31% | 30% | ||||||||||||||
Real estate | 2% | 4% | ||||||||||||||
Other | 6% | 8% | ||||||||||||||
Total | 100% | 100% | ||||||||||||||
Obligations related to the employee pension plan | ' | |||||||||||||||
The following tables set forth a reconciliation of beginning and ending balances of the fair value of plan assets, benefit obligation as well as the funded status of the Company’s defined benefit pension plans for the years ended December 31, 2012 and 2011. | ||||||||||||||||
Changes in Plan Assets and Benefit Obligations: | Employee Plan | |||||||||||||||
($ in millions) | Years Ended December 31, | |||||||||||||||
2012 | 2011 | 2010 | ||||||||||||||
As restated | As restated | |||||||||||||||
and amended | and amended | |||||||||||||||
Plans’ Assets | ||||||||||||||||
Plan assets’ actual return | $ | 55.4 | $ | 18.4 | $ | 54.8 | ||||||||||
Employer contributions | 18.2 | 17.3 | 25.8 | |||||||||||||
Plan disbursements | -35.4 | -32.8 | -32.8 | |||||||||||||
Change in plan assets | 38.2 | 2.9 | 47.8 | |||||||||||||
Plan assets, beginning of period | 437.6 | 434.7 | 386.9 | |||||||||||||
Plans’ assets, end of period | $ | 475.8 | $ | 437.6 | $ | 434.7 | ||||||||||
Plans’ Projected Benefit Obligation | ||||||||||||||||
Service and interest cost accrual | $ | -29.6 | $ | -31.1 | $ | -32.7 | ||||||||||
Actuarial loss | -54.3 | -72.3 | -27.6 | |||||||||||||
Plan disbursements | 35.4 | 32.9 | 32.8 | |||||||||||||
Plan amendments | — | — | — | |||||||||||||
Change in projected benefit obligation | -48.5 | -70.5 | -27.5 | |||||||||||||
Projected benefit obligation, beginning of period | -646.3 | -575.8 | -548.3 | |||||||||||||
Projected benefit obligation, end of period | $ | -694.8 | $ | -646.3 | $ | -575.8 | ||||||||||
Plan assets less than projected benefit obligations, end of period | $ | -219 | $ | -208.7 | $ | -141.1 | ||||||||||
Accumulated benefit obligation | $ | 694.8 | $ | 646.3 | $ | 575.8 | ||||||||||
Amounts Recognized in Consolidated Balance Sheets: | Employee Plan | |||||||||||||||
($ in millions) | Years Ended December 31, | |||||||||||||||
2012 | 2011 | |||||||||||||||
As restated | ||||||||||||||||
and amended | ||||||||||||||||
Other liabilities | $ | -219 | $ | -208.7 | ||||||||||||
Amounts Recorded in Accumulated Other Comprehensive Loss as of the end of the | Employee Plan | |||||||||||||||
period and the related changes in these items during the period are as follows: | Years Ended December 31, | |||||||||||||||
($ in millions) | 2012 | 2011 | 2010 | |||||||||||||
As restated | As restated | |||||||||||||||
and restated | and restated | |||||||||||||||
Balance, beginning of period | $ | 234.8 | $ | 151.6 | $ | 152.6 | ||||||||||
Deferrals for the period | 33.2 | 88.0 | 3.4 | |||||||||||||
Amortization for the period | -7.9 | -4.8 | -4.4 | |||||||||||||
Total balance, end of period | $ | 260.1 | $ | 234.8 | $ | 151.6 | ||||||||||
Amounts in Accumulated Other Comprehensive Loss that are Expected to be Recognized | Employee | |||||||||||||||
as Components of Net Periodic Cost (Credit) During the Next Fiscal Year are as follows: | Plan | |||||||||||||||
($ in millions) | ||||||||||||||||
Prior service (credit) cost | $ | — | ||||||||||||||
Net actuarial loss | 8.7 | |||||||||||||||
Total | $ | 8.7 | ||||||||||||||
Components of Pension Benefit Expense: | Years Ended December 31, | |||||||||||||||
($ in millions) | 2012 | 2011 | 2010 | |||||||||||||
As restated | As restated | |||||||||||||||
and restated | and restated | |||||||||||||||
Service cost | $ | 0.9 | $ | 0.9 | $ | 2.2 | ||||||||||
Interest cost | 28.7 | 30.2 | 30.5 | |||||||||||||
Plan assets expected return | -34.2 | -34.1 | -30.7 | |||||||||||||
Net loss amortization | 7.9 | 4.9 | 4.4 | |||||||||||||
Prior service cost amortization | — | — | — | |||||||||||||
Pension benefit expense | $ | 3.3 | $ | 1.9 | $ | 6.4 | ||||||||||
Funding status of employee pension plan | ' | |||||||||||||||
The funded status of the qualified pension plan based on the projected benefit obligations for the years ended December 31, 2012 and 2011 are summarized in the following table: | ||||||||||||||||
Qualified Employee Pension Plan Funded Status: | As of December 31, | |||||||||||||||
($ in millions) | 2012 | 2011 | ||||||||||||||
As restated | ||||||||||||||||
and amended | ||||||||||||||||
Plan assets, end of year | $ | 475.8 | $ | 437.6 | ||||||||||||
Projected benefit obligation, end of year | -694.8 | -646.3 | ||||||||||||||
Plan assets less than projected benefit obligations, end of year | $ | -219 | $ | -208.7 | ||||||||||||
Fair value measurement of employee Pension plan | ' | |||||||||||||||
The following table presents the level within the fair value hierarchy at which the financial assets of the Company's employee pension plan are measured on a recurring basis at December 31, 2012. | ||||||||||||||||
Fair Value of Assets by Type and Level: | As of December 31, 2012 | |||||||||||||||
($ in millions) | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Mercer Group Trust | $ | — | $ | 408.1 | $ | — | $ | 408.1 | ||||||||
Duff & Phelps Real Estate Securities Trust | — | 10.6 | — | 10.6 | ||||||||||||
Total assets at fair value(1) | $ | — | $ | 418.7 | $ | — | $ | 418.7 | ||||||||
The following table presents the level within the fair value hierarchy at which the financial assets of the Company's employee pension plan are measured on a recurring basis at December 31, 2011. | ||||||||||||||||
Fair Value of Assets by Type and Level: | As of December 31, 2011 | |||||||||||||||
($ in millions) | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Equity Securities | ||||||||||||||||
Common stocks | $ | 284.4 | $ | — | $ | — | $ | 284.4 | ||||||||
Phoenix common stock | 0.6 | — | — | 0.6 | ||||||||||||
Debt Securities | ||||||||||||||||
Fixed maturities: | ||||||||||||||||
Asset-backed | — | 1.3 | — | 1.3 | ||||||||||||
CMO/CMBS | — | 9.9 | — | 9.9 | ||||||||||||
Corporate | — | 31.4 | — | 31.4 | ||||||||||||
Mortgage-backed | — | 17.9 | — | 17.9 | ||||||||||||
Other | — | 6.7 | — | 6.7 | ||||||||||||
U.S. government securities | 21.6 | — | — | 21.6 | ||||||||||||
State & municipal securities | — | 11.1 | — | 11.1 | ||||||||||||
Total assets at fair value(1) | $ | 306.6 | $ | 78.3 | $ | — | $ | 384.9 | ||||||||
Obligation of the company's supplemental plans | ' | |||||||||||||||
The following tables set forth a reconciliation of beginning and ending balances of the projected benefit obligation of the company’s supplemental plans for the years ended December 31, 2012 and 2011. | ||||||||||||||||
Changes in Plan Assets and Benefit Obligations: | Supplemental Plan | |||||||||||||||
($ in millions) | Years Ended December 31, | |||||||||||||||
2012 | 2011 | 2010 | ||||||||||||||
As restated | As restated | |||||||||||||||
and amended | and amended | |||||||||||||||
Plans’ Projected Benefit Obligation | ||||||||||||||||
Service and interest cost accrual | $ | -6.1 | $ | -6.6 | $ | -7.7 | ||||||||||
Actuarial gain (loss) | -12.7 | -12.4 | -8.7 | |||||||||||||
Plan disbursements | 9.8 | 13.9 | 13.9 | |||||||||||||
Plan amendments | — | — | — | |||||||||||||
Change in projected benefit obligation | -9 | -5.1 | -2.5 | |||||||||||||
Projected benefit obligation, beginning of period | -141.9 | -136.8 | -134.3 | |||||||||||||
Projected benefit obligation, end of period | $ | -150.9 | $ | -141.9 | $ | -136.8 | ||||||||||
Plan assets less than projected benefit obligations, end of period | $ | -150.9 | $ | -141.9 | $ | -136.8 | ||||||||||
Accumulated benefit obligation | $ | 150.9 | $ | 141.9 | $ | 136.8 | ||||||||||
Amounts Recognized in Consolidated Balance Sheets: | Supplemental Plan | |||||||||||||||
($ in millions) | Years Ended December 31, | |||||||||||||||
2012 | 2011 | |||||||||||||||
As restated | ||||||||||||||||
and amended | ||||||||||||||||
Other liabilities | $ | -150.9 | $ | -141.9 | ||||||||||||
Amounts Recorded in Accumulated Other Comprehensive Loss as of the end of the | Supplemental Plan | |||||||||||||||
period and the related changes in these items during the period are as follows: | Years Ended December 31, | |||||||||||||||
($ in millions) | 2012 | 2011 | 2010 | |||||||||||||
As restated | As restated | |||||||||||||||
and restated | and restated | |||||||||||||||
Balance, beginning of period | $ | 66.9 | $ | 56.6 | $ | 49.5 | ||||||||||
Deferrals for the period | 12.7 | 12.3 | 8.7 | |||||||||||||
Amortization for the period | -2.4 | -2 | -1.6 | |||||||||||||
Total balance, end of period | $ | 77.2 | $ | 66.9 | $ | 56.6 | ||||||||||
Amounts in accumulated other comprehensive loss that are expected to be recognized | Supplemental | |||||||||||||||
as components of net periodic cost (credit) during the next fiscal year are as follows: | Plan | |||||||||||||||
($ in millions) | ||||||||||||||||
Prior service (credit) cost | $ | — | ||||||||||||||
Net actuarial loss | 2.9 | |||||||||||||||
Total | $ | 2.9 | ||||||||||||||
Components of Pension Benefit Expense: | Years Ended December 31, | |||||||||||||||
($ in millions) | 2012 | 2011 | 2010 | |||||||||||||
As restated | As restated | |||||||||||||||
and amended | and amended | |||||||||||||||
Service cost | $ | — | $ | — | $ | 0.4 | ||||||||||
Interest cost | 6.1 | 6.6 | 7.3 | |||||||||||||
Plan assets expected return | — | — | — | |||||||||||||
Net loss amortization | 2.5 | 2.0 | 1.7 | |||||||||||||
Prior service cost amortization | — | — | — | |||||||||||||
Pension benefit expense | $ | 8.6 | $ | 8.6 | $ | 9.4 | ||||||||||
Components of other post employment benefits | ' | |||||||||||||||
Components of Postretirement Benefit Expense: | Years Ended December 31, | |||||||||||||||
($ in millions) | 2012 | 2011 | 2010 | |||||||||||||
Service cost | $ | 0.3 | $ | 0.4 | $ | 0.4 | ||||||||||
Interest cost | 1.9 | 2.7 | 3.0 | |||||||||||||
Net gain amortization | -0.2 | — | -0.1 | |||||||||||||
Prior service cost amortization | -1.6 | -2.1 | -2.1 | |||||||||||||
Other postretirement benefit expense | $ | 0.4 | $ | 1.0 | $ | 1.2 | ||||||||||
Changes in Plan Accumulated Benefit Obligation: | Years Ended December 31, | |||||||||||||||
($ in millions) | 2012 | 2011 | 2010 | |||||||||||||
As restated | As restated | |||||||||||||||
and amended | and amended | |||||||||||||||
Service and interest cost accrued | $ | -2.1 | $ | -3.1 | $ | -3.4 | ||||||||||
Actuarial gain (loss) | 3.9 | -3.8 | 0.3 | |||||||||||||
Plan disbursements | 5.3 | 6.2 | 6.0 | |||||||||||||
Plan amendments | 11.9 | 0.4 | — | |||||||||||||
Change in projected benefit obligation | 19.0 | -0.3 | 2.9 | |||||||||||||
Accumulated benefit obligations, beginning of period | -59.6 | -59.3 | -62.2 | |||||||||||||
Accumulated benefit obligations, end of period | $ | -40.6 | $ | -59.6 | $ | -59.3 | ||||||||||
Amounts Recognized in Consolidated Balance Sheets: | As of December 31, | |||||||||||||||
($ in millions) | 2012 | 2011 | ||||||||||||||
As restated | ||||||||||||||||
and amended | ||||||||||||||||
Other liabilities | $ | -40.6 | $ | -59.6 | ||||||||||||
Amounts Recorded in Accumulated Other Comprehensive Loss as of the end of the | Other Post-Employment Benefits | |||||||||||||||
period and the related changes in these items during the period are as follows: | Years Ended December 31, | |||||||||||||||
($ in millions) | 2012 | 2011 | 2010 | |||||||||||||
As restated | As restated | |||||||||||||||
and restated | and restated | |||||||||||||||
Balance, beginning of period | $ | -0.4 | $ | -4.3 | $ | -4.1 | ||||||||||
Deferrals for the period – net actuarial loss / (gain) | -4 | 3.9 | -0.3 | |||||||||||||
Amortization for the period – net actuarial loss / (gain) | 0.1 | — | 0.1 | |||||||||||||
Subtotal, end of period | -4.3 | -0.4 | -4.3 | |||||||||||||
Balance, beginning of period | -1.7 | -3.4 | -5.4 | |||||||||||||
Deferrals for prior service cost / (credit) | -11.9 | -0.4 | 2.0 | |||||||||||||
Amortization for prior service cost / (credit) | 1.6 | 2.1 | — | |||||||||||||
Subtotal, end of period | -12 | -1.7 | -3.4 | |||||||||||||
Total balance, end of period | $ | -16.3 | $ | -2.1 | $ | -7.7 |
18_ShareBased_Payments_Tables
18. Share-Based Payments (Tables) | 12 Months Ended | ||||||||||||||
Dec. 31, 2012 | |||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | ||||||||||||||
Share-based Compensation Plans | ' | ||||||||||||||
Share-based Compensation Plans: | Years Ended December 31, | ||||||||||||||
($ in millions) | 2012 | 2011 | 2010 | ||||||||||||
As restated | As restated | ||||||||||||||
and amended | and amended | ||||||||||||||
Compensation cost charged to income from continuing operations | $ | 2.6 | $ | 4.4 | $ | 5.6 | |||||||||
Income tax benefit before valuation allowance | $ | -0.9 | $ | -0.9 | $ | -1.1 | |||||||||
Assumptions Used in Option Valuation | ' | ||||||||||||||
Key Assumptions Used in Option Valuation: | Years Ended December 31, | ||||||||||||||
2012 | 2011 | 2010 | |||||||||||||
Expected term(1) | 10 years | N/A | 6 years | ||||||||||||
Weighted-average expected volatility | 37.7% | 31.0% | |||||||||||||
Weighted-average interest rate | 1.9% | 3.9% | |||||||||||||
Weighted-average common share dividend yield | 0.0% | 0.0% | |||||||||||||
Summary of Stock Option Activity | ' | ||||||||||||||
A summary of the stock option activity as of and for the year ended December 31, 2012 is as follows: | |||||||||||||||
Summary of Stock Option Activity:(1) | Year Ended December 31, 2012 | ||||||||||||||
($ in millions, except share data) | Weighted- | ||||||||||||||
Weighted- | Average | ||||||||||||||
Average | Remaining | Aggregate | |||||||||||||
Common | Exercise | Contractual | Intrinsic | ||||||||||||
Shares | Price | Term | Value | ||||||||||||
Outstanding, beginning of period | 177,798 | $ | 228.36 | 2.56 | $ | — | |||||||||
Granted | 2,053 | 34.38 | — | — | |||||||||||
Exercised | -250 | 10.60 | — | — | |||||||||||
Forfeited | -88,202 | 266.56 | — | — | |||||||||||
Canceled/expired | -210 | 56.80 | — | — | |||||||||||
Outstanding, end of period | 91,189 | $ | 188.04 | 1.57 | $ | — | |||||||||
Vested and exercisable, end of period | 86,089 | $ | 196.42 | 1.28 | $ | — | |||||||||
Weighted-Average Fair Value: (1) | Years Ended December 31, | ||||||||||||||
2012 | 2011 | 2010 | |||||||||||||
Common | Grant Date | Common | Grant Date | Common | Grant Date | ||||||||||
Shares | Fair Value | Shares | Fair Value | Shares | Fair Value | ||||||||||
Options granted | 2,053 | $ | 9.03 | 0 | $ | — | 11,020 | $ | 28.40 | ||||||
Summary of the RSU activity | ' | ||||||||||||||
A summary of the RSU activity as of and for the year ended December 31, 2012 is as follows: | |||||||||||||||
Summary of RSU Activity: (1) | Years Ended December 31, 2012 | ||||||||||||||
Time-Vested | Performance-Contingent | ||||||||||||||
Weighted- | Weighted- | ||||||||||||||
Average | Average | ||||||||||||||
Grant Date | Grant Date | ||||||||||||||
Number | Fair Value | Number | Fair Value | ||||||||||||
Outstanding, beginning of period | 123,377 | $ | 56.51 | 22,655 | $ | 44.04 | |||||||||
Awarded | 16,497 | 26.95 | — | — | |||||||||||
Adjustment for performance results | — | — | 5,119 | 50.40 | |||||||||||
Conversion of performance-contingent awards | — | — | — | — | |||||||||||
Converted to common shares/applied to taxes | -3,726 | 46.27 | — | — | |||||||||||
Forfeited | -1,254 | 42.45 | -10,750 | 29.60 | |||||||||||
Outstanding, end of period | 134,894 | $ | 53.31 | 17,024 | $ | 55.07 | |||||||||
RSUs Awarded: (1) | Years Ended December 31, | ||||||||||||||
2012 | 2011 | 2010 | |||||||||||||
Weighted- | Weighted- | Weighted- | |||||||||||||
Average | Average | Average | |||||||||||||
Grant Date | Grant Date | Grant Date | |||||||||||||
Number | Fair Value | Number | Fair Value | Number | Fair Value | ||||||||||
Time-vested RSUs awarded | 16,497 | $ | 26.95 | 21,426 | $ | 36.20 | 17,328 | $ | 46.40 | ||||||
Performance-contingent | — | $ | — | 11,905 | $ | 50.40 | 69,475 | $ | 56.80 | ||||||
RSUs awarded | |||||||||||||||
RSU Values: | Years Ended December 31, | ||||||||||||||
($ in millions) | 2012 | 2011 | 2010 | ||||||||||||
Intrinsic value of RSUs converted | $ | 0.1 | $ | 0.7 | $ | 1.4 | |||||||||
Total grant date fair value of RSUs vested converted to common shares | $ | 0.2 | $ | 2.8 | $ | 4.4 | |||||||||
19_Earnings_Per_Share_Tables
19. Earnings Per Share (Tables) | 12 Months Ended | |||||
Dec. 31, 2012 | ||||||
LOSS PER SHARE: | ' | |||||
Shares Used in Calculation of Earnings Per Share | ' | |||||
Shares Used in Calculation of Earnings Per Share:(1) | Years Ended December 31, | |||||
(shares in thousands) | 2012 | 2011 | 2010 | |||
Weighted-average common shares outstanding | 5,770 | 5,815 | 5,803 | |||
Weighted-average effect of dilutive potential common shares: | ||||||
Restricted stock units | 75 | 71 | 15 | |||
Employee stock options | 1 | — | — | |||
Potential common shares | 76 | 71 | 15 | |||
Less: Potential common shares excluded from calculation due to net losses | -76 | -71 | -15 | |||
Dilutive potential common shares | — | — | — | |||
Weighted-average common shares outstanding, including | 5,770 | 5,815 | 5,803 | |||
dilutive potential common shares | ||||||
20_Segment_Information_Tables
20. Segment Information (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2012 | |||||||||
Segment Reporting [Abstract] | ' | ||||||||
Segment Information on Revenues | ' | ||||||||
Segment Information on Revenues: | Years Ended December 31, | ||||||||
($ in millions) | 2012 | 2011 | 2010 | ||||||
As restated | As restated | ||||||||
and amended | and amended | ||||||||
Life and Annuity (1) | $ | 1,777.1 | $ | 1,828.8 | $ | 1,966.8 | |||
Saybrus Partners (2) | 22.9 | 18.2 | 6.0 | ||||||
Less: Intercompany revenues (3) | 10.8 | 10.5 | 2.5 | ||||||
Total revenues | $ | 1,789.2 | $ | 1,836.5 | $ | 1,970.3 | |||
Results of Operations by Segment as Reconciled to Consolidated Net Income | ' | ||||||||
Results of Operations by Segment as Reconciled to Consolidated Net Income (Loss): | Years Ended December 31, | ||||||||
($ in millions) | 2012 | 2011 | 2010 | ||||||
As restated | As restated | ||||||||
and amended | and amended | ||||||||
Life and Annuity operating income (loss) | $ | -160 | $ | 35.9 | $ | -11.4 | |||
Saybrus Partners operating income (loss) | 2.6 | -1.3 | -19 | ||||||
Less: Applicable income tax expense (benefit) | -3.7 | 12.3 | -10.3 | ||||||
Loss from discontinued operations, net of income taxes | -15.6 | -21.6 | -3.6 | ||||||
Net realized investment losses | -10.5 | -32.1 | -11.2 | ||||||
Gain on debt repurchase | 11.9 | 0.2 | — | ||||||
Less: income (loss) attributable to noncontrolling interests | 0.6 | -0.5 | -0.5 | ||||||
Net loss | $ | -168.5 | $ | -30.7 | $ | -34.4 |
22_Phoenix_Life_Statutory_Fina1
22. Phoenix Life Statutory Financial Information and Regulatory Matters (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2012 | |||||||||
Notes to Financial Statements | ' | ||||||||
Statutory Financial Data | ' | ||||||||
Statutory Financial Data for Phoenix Life:(1) | As of or for the Years Ended December 31, | ||||||||
($ in millions) | 2012 | 2011 | 2010 | ||||||
Statutory capital, surplus and surplus notes | $ | 793.6 | $ | 728.8 | $ | 658.5 | |||
Asset valuation reserve (“AVR”) | 128.9 | 116.9 | 104.7 | ||||||
Statutory capital, surplus and AVR(2) | $ | 922.5 | $ | 845.7 | $ | 763.2 | |||
Statutory net gain from operations | $ | 160.5 | $ | 130.5 | $ | 147.8 | |||
Statutory net income | $ | 156.2 | $ | 95.0 | $ | 139.8 |
23_Premises_and_Equipment_Tabl
23. Premises and Equipment (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2012 | ||||||||||||
Property, Plant and Equipment [Abstract] | ' | |||||||||||
Premises and equipment | ' | |||||||||||
Cost and Carrying Value of Premises and Equipment: | As of December 31, | |||||||||||
($ in millions) | 2012 | 2011 | ||||||||||
Carrying | Carrying | |||||||||||
Cost | Value | Cost | Value | |||||||||
Real estate | $ | 92.0 | $ | 27.2 | $ | 89.9 | $ | 25.9 | ||||
Equipment | 86.7 | 16.4 | 89.5 | 22.6 | ||||||||
Leasehold improvements | 0.4 | 0.3 | 1.3 | 0.2 | ||||||||
Premises and equipment cost and carrying value | 179.1 | $ | 43.9 | 180.7 | $ | 48.7 | ||||||
Accumulated depreciation and amortization | -135.2 | -132 | ||||||||||
Premises and equipment | $ | 43.9 | $ | 48.7 |
26_Condensed_Financial_Informa1
26. Condensed Financial Information of The Phoenix Companies, Inc and Other Supplementary Data (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2012 | |||||||||
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | ' | ||||||||
A summary of The Phoenix Companies, Inc. financial information | ' | ||||||||
A summary of The Phoenix Companies, Inc. (parent company only) financial information is presented below. See Notes 10 and 17 to these financial statements for additional information regarding indebtedness and accrued pension and post-employment benefits, respectively. | |||||||||
Parent Company Financial Position: | As of December 31, | ||||||||
($ in millions) | 2012 | 2011 | |||||||
As restated | |||||||||
and amended | |||||||||
Assets | |||||||||
Available-for-sale debt securities, at fair value | $ | 116.3 | $ | 47.2 | |||||
Fair value investments | 21.9 | 22.2 | |||||||
Cash and cash equivalents | 27.2 | 52.5 | |||||||
Investments in subsidiaries | 1,029.5 | 1,277.5 | |||||||
Advances to subsidiaries | 16.1 | 13.5 | |||||||
Deferred income taxes, net | 0.1 | 0.3 | |||||||
Other assets | 6.9 | 11.9 | |||||||
Total assets | $ | 1,218.0 | $ | 1,425.1 | |||||
Liabilities and Stockholders’ Equity | |||||||||
Indebtedness (Note 10) | $ | 268.6 | $ | 268.6 | |||||
Accrued pension and post-employment benefits (Note 17) | 414.7 | 414.3 | |||||||
Other liabilities | 30.9 | 49.3 | |||||||
Total liabilities | 714.2 | 732.2 | |||||||
Total stockholders’ equity | 503.8 | 692.9 | |||||||
Total liabilities and stockholders’ equity | $ | 1,218.0 | $ | 1,425.1 | |||||
Parent Company Results of Operations: | Years Ended December 31, | ||||||||
($ in millions) | 2012 | 2011 | 2010 | ||||||
As restated | As restated | ||||||||
and amended | and amended | ||||||||
Revenues | |||||||||
Equity in undistributed loss of subsidiaries | $ | -153.8 | $ | -16.1 | $ | -9.8 | |||
Investment income | 1.3 | 2.3 | 1.9 | ||||||
Net realized investment gains | 2.0 | 3.4 | 3.3 | ||||||
Total revenues | -150.5 | -10.4 | -4.6 | ||||||
Interest expense | 20.2 | 20.2 | 20.3 | ||||||
Other operating expenses | 10.2 | 3.2 | 7.3 | ||||||
Total expenses | 30.4 | 23.4 | 27.6 | ||||||
Loss before income taxes | -180.9 | -33.8 | -32.2 | ||||||
Income tax expense (benefit) | -11.9 | -1.5 | 1.2 | ||||||
Income (loss) from continuing operations | -169 | -32.3 | -33.4 | ||||||
Income (loss) from discontinued operations of subsidiaries | 0.5 | 1.6 | -1 | ||||||
Net loss | $ | -168.5 | $ | -30.7 | $ | -34.4 | |||
Parent Company Cash Flows: | Years Ended December 31, | ||||||||
($ in millions) | 2012 | 2011 | 2010 | ||||||
As restated | As restated | ||||||||
and amended | and amended | ||||||||
Operating Activities | |||||||||
Interest income received | $ | 1.2 | $ | 0.9 | $ | 1.9 | |||
Interest paid | -20 | -20.1 | -20.1 | ||||||
Taxes paid | -15.1 | — | -0.4 | ||||||
Taxes received | 3.4 | 0.6 | 1.6 | ||||||
Payments to/from subsidiaries | 0.8 | -7.9 | 2.1 | ||||||
Other operating activities, net | -0.6 | 5.5 | -1.3 | ||||||
Cash used for operating activities | -30.3 | -21 | -16.2 | ||||||
Purchases of available-for-sale debt securities | -269.8 | -109.5 | -72.1 | ||||||
Sales, repayments and maturities of available-for-sale debt securities | 201.4 | 118.5 | 81.0 | ||||||
Loan to subsidiary | — | -2.5 | — | ||||||
Subsidiary loan payments received | 4.0 | — | — | ||||||
Proceeds from the sale of subsidiary | 1.0 | 1.0 | 8.3 | ||||||
Dividends received from subsidiaries | 71.8 | 64.8 | 25.0 | ||||||
Capital contributions to subsidiaries | — | -0.2 | -25.7 | ||||||
Capital distributions from subsidiaries | — | — | 0.2 | ||||||
Cash provided by investing activities | 8.4 | 72.1 | 16.7 | ||||||
Indebtedness repayments | — | -0.7 | — | ||||||
Treasury stock acquired | -3.4 | — | — | ||||||
Cash used for financing activities | -3.4 | -0.7 | — | ||||||
Change in cash and cash equivalents | -25.3 | 50.4 | 0.5 | ||||||
Cash and cash equivalents, beginning of period | 52.5 | 2.1 | 1.6 | ||||||
Cash and cash equivalents, end of period | $ | 27.2 | $ | 52.5 | $ | 2.1 | |||
3_Basis_of_Presentation_and_Si2
3. Basis of Presentation and Significant Accounting Policies (Details Narrative) (USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2012 | Dec. 31, 2011 |
Percentage of Participating insurance represent direct individual life insurance | 20.40% | 20.00% |
Professional fees including audit fees | $4 | ' |
Building [Member] | ' | ' |
Useful lives | '39 years | ' |
Equipment [Member] | Minimum [Member] | ' | ' |
Useful lives | '3 years | ' |
Equipment [Member] | Maximum [Member] | ' | ' |
Useful lives | '7 years | ' |
5_Demutualization_and_Closed_B2
5. Demutualization and Closed Block (Details) (USD $) | Dec. 31, 2012 | Jun. 25, 2011 | Dec. 31, 2011 |
In Millions, unless otherwise specified | As restated and amended [Member] | ||
Debt securities | $6,396.40 | $4,773.10 | $6,323.50 |
Equity securities | 11.4 | ' | 12.6 |
Limited partnerships and other investments | 353.1 | 399 | 338 |
Policy loans | 1,233.50 | 1,380 | 1,280.40 |
Fair value investments | 30.8 | ' | 27.8 |
Total closed block investments | 8,025.20 | 6,552.10 | 7,982.30 |
Cash and cash equivalents | 32.7 | ' | 15.1 |
Accrued investment income | 85.3 | 106.8 | 94.2 |
Receivables | 60.6 | 35.2 | 68.8 |
Deferred income taxes, net | 217.6 | 389.4 | 226.8 |
Other closed block assets | 31.7 | 6.2 | 39.2 |
Total closed block assets | 8,453.10 | 7,089.70 | 8,426.40 |
Policy liabilities and accruals | 8,421.70 | 8,301.70 | 8,680.40 |
Policyholder dividends payable | 223.8 | 325.1 | 241 |
Policy dividend obligation | 779.8 | ' | 511.5 |
Other closed block liabilities | 47.5 | 12.3 | 41 |
Total closed block liabilities | 9,472.80 | 8,639.10 | 9,473.90 |
Excess of closed block liabilities over closed block assets | $1,019.70 | $1,549.40 | $1,047.50 |
5_Demutualization_and_Closed_B3
5. Demutualization and Closed Block (Details 1) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 |
As restated and amended [Member] | As restated and amended [Member] | ||
Closed block revenues | ' | ' | ' |
Premiums | $369.50 | $413.70 | $478 |
Net investment income | 452.9 | 465.5 | 494.3 |
Net realized investment gains (losses) | 9.2 | -4.1 | 4.6 |
Total revenues | 831.6 | 875.1 | 976.9 |
Policy benefits, excluding dividends | 490.8 | 564.9 | 612.6 |
Other operating expenses | 3 | 3.7 | 8.3 |
Total benefits and expenses, excluding policyholder dividends | 493.8 | 568.6 | 620.9 |
Closed block contribution to income before dividends and income taxes | 337.8 | 306.5 | 356 |
Policyholder dividends | -294.5 | -258.7 | -301.3 |
Closed block contribution to income before income taxes | 43.3 | 47.8 | 54.7 |
Applicable income tax expense | 15.1 | 16.7 | 19.1 |
Noncontrolling interests | 0.5 | -0.1 | ' |
Closed block contribution to income | 27.7 | 31.2 | 35.6 |
Policyholder dividend obligation | ' | ' | ' |
Policyholder dividends provided through earnings | 294.5 | 258.7 | 301.3 |
Policyholder dividends provided through OCI | 168 | 158.6 | 287.2 |
Additions to policyholder dividend liabilities | 462.5 | 417.3 | 588.5 |
Policyholder dividends paid | -211.4 | -251.3 | -303.5 |
Increase in policyholder dividend liabilities | 251.1 | 166 | 285 |
Policyholder dividend liabilities, beginning of period | 752.5 | 586.5 | 301.5 |
Policyholder dividend liabilities, end of period | 1,003.60 | 752.5 | 586.5 |
Policyholder dividends payable, end of period | -223.8 | -241 | -264.4 |
Policyholder dividend obligation, end of period | $779.80 | $511.50 | $322.10 |
5_Demutualization_and_Closed_B4
5. Demutualization and Closed Block (Details Narrative) (USD $) | Dec. 31, 2012 |
In Millions, unless otherwise specified | |
Demutualization And Closed Block Details Narrative | ' |
Policyholder dividend obligation for cumulative closed block | $172.60 |
Unrealized gains in investments included in policyholder dividend obligation for cumulative closed block | $607.20 |
6_Reinsurance_Details
6. Reinsurance (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 |
As restated and amended [Member] | As restated and amended [Member] | ||
Direct Business and Reinsurance in Continuing Operations | ' | ' | ' |
Direct premiums | $565.30 | $617.80 | $703.40 |
Premiums assumed from reinsureds | 11.8 | 13.6 | 13.6 |
Premiums ceded to reinsurers | -174.8 | -182.7 | -209.5 |
Premiums | 402.3 | 448.7 | 507.5 |
Percentage of amount assumed to net premiums | 2.90% | 3.00% | 2.70% |
Direct policy benefits incurred | 812.9 | 763.1 | 832.9 |
Policy benefits assumed from reinsureds | 68.7 | 9.6 | 21.7 |
Policy benefits ceded to reinsurers | -270.3 | -255.2 | -347.9 |
Premiums paid to reinsurers(2) | 97.4 | 95.9 | 85.9 |
Policy benefits(3) | 708.7 | 613.4 | 592.6 |
Direct life insurance in force | 115,298.60 | 122,981.90 | 133,612.10 |
Life insurance in force assumed from reinsureds | 369.2 | 1,753.70 | 1,694.20 |
Life insurance in force ceded to reinsurers | -74,609.40 | -81,259.20 | -85,873.30 |
Life insurance in force | $41,058.40 | $43,476.40 | $49,433 |
Percentage of amount assumed to net insurance in force | 0.90% | 4.00% | 3.40% |
6_Reinsurance_Details_Narrativ
6. Reinsurance (Details Narrative) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 |
Reinsurance Details Narrative | ' | ' | ' |
Trust agreements and irrevocable letters of credit | $49.60 | ' | ' |
Irrevocable letters of credit related to discontinued group accident and health reinsurance operations | 2.6 | ' | ' |
Reinsurance recoverable balance | 583.6 | 564.3 | ' |
Changes in reserves, interest credited to policyholders, policyholder dividends and other items | $457.40 | $523.60 | $528.90 |
Percentage of reinsurance recoverable account by five major reinsurance companies | 64.00% | ' | ' |
7_Deferred_Policy_Acquisition_2
7. Deferred Policy Acquisition Costs (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 |
As restated and amended [Member] | As restated and amended [Member] | ||
Deferred Policy Acquisition Costs: | ' | ' | ' |
Policy acquisition costs deferred | $58.10 | $91.20 | $12.80 |
Costs amortized to expenses: | ' | ' | ' |
Recurring costs | -143.8 | -160.8 | -212.3 |
Deferred Policy Acquisition Costs Assumption unlocking | -55.2 | 2.8 | -58.1 |
Realized investment gains (losses) | -1 | 0.1 | 2.2 |
Offsets to net unrealized investment gains or losses included in AOCI | -75.1 | -52.8 | -136.2 |
Adoption of new accounting guidance(2) | ' | ' | -2.2 |
Change in deferred policy acquisition costs | -217 | -119.5 | -393.8 |
Deferred policy acquisition costs, beginning of period | 1,119.20 | 1,238.70 | 1,632.50 |
Deferred policy acquisition costs, end of period | $902.20 | $1,119.20 | $1,238.70 |
8_Sales_Inducements_Details
8. Sales Inducements (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 |
As restated and amended [Member] | As restated and amended [Member] | ||
Changes in Deferred Sales Inducement Activity: | ' | ' | ' |
Deferred asset, beginning of period | $50.20 | $20.90 | $8.10 |
Sales inducements deferred | 15.4 | 48.3 | 15.4 |
Amortization charged to income | -6.7 | -4.9 | -2.6 |
Offsets to net unrealized investment gains or losses included in AOCI | 2.5 | -14.1 | ' |
Deferred asset, end of period | $61.40 | $50.20 | $20.90 |
9_Investing_Activities_Details
9. Investing Activities (Details) (USD $) | Dec. 31, 2012 | Dec. 31, 2011 |
In Millions, unless otherwise specified | ||
Available-for-sale debt securities Amortized Cost | $11,718 | $11,267 |
Available-for-sale debt securities Gross Unrealized Gains | 9.7 | 10.9 |
Available-for-sale debt securities Gross Unrealized Losses(1) | -2.4 | -7.8 |
Available-for-sale debt securities Fair Value | 12,656 | 11,797 |
Available-for-sale debt securities OTTI Recognized in AOCI(2) | -123.6 | 160.6 |
Amounts applicable to the closed block debt security amortized cost | 5,789.70 | 5,884 |
Amounts applicable to the closed block debt security Gross Unrealized Gains | 644.9 | 565.7 |
Amounts applicable to the closed block debt security Gross Unrealized Gains | -38.2 | -126.2 |
Amounts applicable to the closed block debt security Fair Value | 6,396.40 | 6,323.50 |
Amounts applicable to the closed block debt security OTTI Recognized in AOCI(2) | -43.5 | -53.1 |
Available-for-sale equity securities Amortized Cost | 27.5 | 32.6 |
Available-for-sale equity securities Gross Unrealized Gains | 9.7 | 10.9 |
Available-for-sale equity securities, Gross Unrealized Losses | -2.4 | -7.8 |
Available-for-sale equity securities Fair Value | 34.8 | 35.7 |
Available-for-sale equity securities OTTI Recognized in AOCI(2) | ' | ' |
Amounts applicable to the closed block equity security amortized cost | 10.9 | 13.4 |
Amounts applicable to the closed block equity security Gross Unrealized Gains | -1.3 | -4 |
Amounts applicable to the closed block equity security Fair Value | 11.4 | 12.6 |
Amounts applicable to the closed block equity security OTTI Recognized in AOCI(2) | ' | ' |
U.S. government and agency [Member] | ' | ' |
Available-for-sale debt securities Amortized Cost | 1,055.50 | 678 |
Available-for-sale debt securities Gross Unrealized Gains | 58.5 | 71.6 |
Available-for-sale debt securities Gross Unrealized Losses(1) | -2.5 | -7.8 |
Available-for-sale debt securities Fair Value | 1,111.50 | 741.8 |
Available-for-sale debt securities OTTI Recognized in AOCI(2) | ' | ' |
Available-for-sale equity securities Gross Unrealized Gains | 58.5 | 71.6 |
Available-for-sale equity securities, Gross Unrealized Losses | -2.5 | -7.8 |
State and political subdivision [Member] | ' | ' |
Available-for-sale debt securities Amortized Cost | 321.5 | 259.3 |
Available-for-sale debt securities Gross Unrealized Gains | 37.8 | 25.4 |
Available-for-sale debt securities Gross Unrealized Losses(1) | -2.1 | -2.9 |
Available-for-sale debt securities Fair Value | 357.2 | 281.8 |
Available-for-sale debt securities OTTI Recognized in AOCI(2) | -1.4 | ' |
Available-for-sale equity securities Gross Unrealized Gains | 37.8 | 25.4 |
Available-for-sale equity securities, Gross Unrealized Losses | -2.1 | -2.9 |
Foreign government [Member] | ' | ' |
Available-for-sale debt securities Amortized Cost | 167.5 | 185.7 |
Available-for-sale debt securities Gross Unrealized Gains | 36.8 | 21.2 |
Available-for-sale debt securities Gross Unrealized Losses(1) | ' | -1.7 |
Available-for-sale debt securities Fair Value | 204.3 | 205.2 |
Available-for-sale debt securities OTTI Recognized in AOCI(2) | ' | ' |
Available-for-sale equity securities Gross Unrealized Gains | 36.8 | 21.2 |
Available-for-sale equity securities, Gross Unrealized Losses | ' | -1.7 |
Corporate [Member] | ' | ' |
Available-for-sale debt securities Amortized Cost | 6,996.40 | 6,127.90 |
Available-for-sale debt securities Gross Unrealized Gains | 745.7 | 601.7 |
Available-for-sale debt securities Gross Unrealized Losses(1) | -72.1 | -171.4 |
Available-for-sale debt securities Fair Value | 7,670 | 6,558.20 |
Available-for-sale debt securities OTTI Recognized in AOCI(2) | -8.9 | -5.8 |
Available-for-sale equity securities Gross Unrealized Gains | 745.7 | 601.7 |
Available-for-sale equity securities, Gross Unrealized Losses | -72.1 | -171.4 |
Commercial mortgage-backed (CMBS) [Member] | ' | ' |
Available-for-sale debt securities Amortized Cost | 817.2 | 1,098.90 |
Available-for-sale debt securities Gross Unrealized Gains | 72.9 | 50.4 |
Available-for-sale debt securities Gross Unrealized Losses(1) | -7.9 | -20 |
Available-for-sale debt securities Fair Value | 882.2 | 1,129.30 |
Available-for-sale debt securities OTTI Recognized in AOCI(2) | -21.8 | -29.2 |
Available-for-sale equity securities Gross Unrealized Gains | 72.9 | 50.4 |
Available-for-sale equity securities, Gross Unrealized Losses | -7.9 | -20 |
Residential mortgage-backed (RMBS) [Member] | ' | ' |
Available-for-sale debt securities Amortized Cost | 1,698.20 | 2,094.70 |
Available-for-sale debt securities Gross Unrealized Gains | 94.3 | 82.9 |
Available-for-sale debt securities Gross Unrealized Losses(1) | -20.8 | -70.6 |
Available-for-sale debt securities Fair Value | 1,771.70 | 2,107 |
Available-for-sale debt securities OTTI Recognized in AOCI(2) | -64 | -92.2 |
Available-for-sale equity securities Gross Unrealized Gains | 94.3 | 82.9 |
Available-for-sale equity securities, Gross Unrealized Losses | -20.8 | -70.6 |
CDO/CLO [Member] | ' | ' |
Available-for-sale debt securities Amortized Cost | 240.5 | 283.8 |
Available-for-sale debt securities Gross Unrealized Gains | 6.4 | 2.5 |
Available-for-sale debt securities Gross Unrealized Losses(1) | -23.2 | -53.9 |
Available-for-sale debt securities Fair Value | 223.7 | 232.4 |
Available-for-sale debt securities OTTI Recognized in AOCI(2) | -33.4 | -36.2 |
Available-for-sale equity securities Gross Unrealized Gains | 6.4 | 2.5 |
Available-for-sale equity securities, Gross Unrealized Losses | -23.2 | -53.9 |
Other asset-backed [Member] | ' | ' |
Available-for-sale debt securities Amortized Cost | 421.2 | 538.7 |
Available-for-sale debt securities Gross Unrealized Gains | 26.6 | 18.9 |
Available-for-sale debt securities Gross Unrealized Losses(1) | -12.4 | -16.3 |
Available-for-sale debt securities Fair Value | 435.4 | 541.3 |
Available-for-sale debt securities OTTI Recognized in AOCI(2) | 5.9 | 2.8 |
Available-for-sale equity securities Gross Unrealized Gains | 26.6 | 18.9 |
Available-for-sale equity securities, Gross Unrealized Losses | ($12.40) | ($16.30) |
9_Investing_Activities_Details1
9. Investing Activities (Details 1) (USD $) | Dec. 31, 2012 | Dec. 31, 2011 |
In Millions, unless otherwise specified | ||
Investing Activities Details 1 | ' | ' |
Due in one year or less Amortized Cost | $1,128.70 | ' |
Due after one year through five years Amortized Cost | 2,046.70 | ' |
Due after five years through ten years Amortized Cost | 2,824.40 | ' |
Due after ten years Amortized Cost | 2,541.20 | ' |
CMBS/RMBS/ABS/CDO/CLO(1) Amortized Cost | 3,177 | ' |
Total Amortized Cost | 11,718 | ' |
Due in one year or less Fair Value | 1,140.70 | ' |
Due after one year through five years Fair Value | 2,219.10 | ' |
Due after five years through ten years Fair Value | 3,131.30 | ' |
Due after ten years Fair Value | 2,852 | ' |
CMBS/RMBS/ABS/CDO/CLO(1) Fair Value | 3,312.90 | ' |
Available-for-sale debt securities, at fair value | $12,656 | $11,797 |
9_Investing_Activities_Details2
9. Investing Activities (Details 2) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 |
As restated and amended [Member] | As restated and amended [Member] | ||
Fixed maturities, available-for-sale | ' | ' | ' |
Proceeds from sales | $1,541.60 | $1,087.20 | $1,446.90 |
Proceeds from maturities/repayments | 1,757 | 1,264 | 1,246.40 |
Gross investment gains from sales, prepayments and maturities | 52.3 | 13.6 | 57.9 |
Gross investment losses from sales and maturities | -11.1 | -6 | -16 |
Equity securities, available-for-sale | ' | ' | ' |
Proceeds from sales | 12.6 | 9.4 | 1.5 |
Gross investment gains from sales | 8.5 | 3.8 | ' |
Gross investment losses from sales | ($0.40) | ($0.10) | ' |
9_Investing_Activities_Details3
9. Investing Activities (Details 3) (USD $) | Dec. 31, 2012 | Dec. 31, 2011 |
In Millions, unless otherwise specified | ||
U.S. government and agency | $1,111.50 | $741.80 |
State and political subdivision | 357.2 | 281.8 |
Foreign government | 204.3 | 205.2 |
Corporate | 7,670 | 6,558.20 |
Commercial mortgage-backed ("CMBS") | 17.9 | ' |
Residential mortgage-backed ("RMBS") | 1,771.70 | 2,107 |
CDO/CLO | 223.7 | 232.4 |
Other asset-backed | 435.4 | 541.3 |
Unrealized Losses | AgingOfTemporarilyImpairedDebtSecuritesTotalMember | ' | ' |
U.S. government and agency | -2.5 | -7.8 |
State and political subdivision | -2.1 | -2.9 |
Foreign government | ' | -1.7 |
Corporate | -72.1 | -171.4 |
Commercial mortgage-backed ("CMBS") | -7.9 | -20 |
Residential mortgage-backed ("RMBS") | -20.8 | -70.6 |
CDO/CLO | -23.2 | -53.9 |
Other asset-backed | -12.4 | -16.3 |
Debt securities | -141 | -344.6 |
Equity securities | -2.4 | -7.8 |
Total temporarily impaired securities | -143.4 | -352.4 |
Amounts inside the closed block | -39.5 | -130.2 |
Amounts outside the closed block | -103.9 | -222.2 |
Amounts outside the closed block that are below investment grade | -65.4 | -139.1 |
Number of securities | 304 | 559 |
Unrealized Losses | Less than 12 months | ' | ' |
U.S. government and agency | -0.1 | -2.4 |
State and political subdivision | -0.8 | -0.1 |
Foreign government | ' | -1.7 |
Corporate | -6.2 | -29.4 |
Commercial mortgage-backed ("CMBS") | -1 | -4.1 |
Residential mortgage-backed ("RMBS") | -0.4 | -7.8 |
CDO/CLO | -2 | -0.8 |
Other asset-backed | -0.7 | -2.1 |
Debt securities | -11.2 | -48.4 |
Equity securities | -1.6 | -7 |
Total temporarily impaired securities | -12.8 | -55.4 |
Amounts inside the closed block | -4.6 | -23.6 |
Amounts outside the closed block | -8.2 | -31.8 |
Amounts outside the closed block that are below investment grade | -2 | -13.9 |
Number of securities | 108 | 255 |
Unrealized Losses | Greater than 12 months | ' | ' |
U.S. government and agency | -2.4 | -5.4 |
State and political subdivision | -1.3 | -2.8 |
Foreign government | ' | ' |
Corporate | -65.9 | -142 |
Commercial mortgage-backed ("CMBS") | -6.9 | -15.9 |
Residential mortgage-backed ("RMBS") | -20.4 | -62.8 |
CDO/CLO | -21.2 | -53.1 |
Other asset-backed | -11.7 | -14.2 |
Debt securities | -129.8 | -296.2 |
Equity securities | -0.8 | -0.8 |
Total temporarily impaired securities | -130.6 | -297 |
Amounts inside the closed block | -34.9 | -106.6 |
Amounts outside the closed block | -95.7 | -190.4 |
Amounts outside the closed block that are below investment grade | -63.4 | -125.2 |
Number of securities | 196 | 304 |
AgingOfTemporarilyImpairedDebtSecuritesFairValueMember | AgingOfTemporarilyImpairedDebtSecuritesTotalMember | ' | ' |
U.S. government and agency | 37.4 | 41.2 |
State and political subdivision | 20.6 | 32.3 |
Foreign government | ' | 25.6 |
Corporate | 619.1 | 868.2 |
Commercial mortgage-backed ("CMBS") | 39.1 | 184.5 |
Residential mortgage-backed ("RMBS") | 277.3 | 570.5 |
CDO/CLO | 158.9 | 183 |
Other asset-backed | 53.4 | 159.1 |
Debt securities | 1,205.80 | 2,064.40 |
Equity securities | 6.8 | 12.5 |
Total temporarily impaired securities | 1,212.60 | 2,076.90 |
Amounts inside the closed block | 483.1 | 861.2 |
Amounts outside the closed block | 729.5 | 1,215.70 |
Amounts outside the closed block that are below investment grade | 207.3 | 317.3 |
AgingOfTemporarilyImpairedDebtSecuritesFairValueMember | Less than 12 months | ' | ' |
U.S. government and agency | 9 | ' |
State and political subdivision | 13.5 | 26.1 |
Foreign government | ' | 25.6 |
Corporate | 300.9 | 367 |
Commercial mortgage-backed ("CMBS") | 8.4 | 132.4 |
Residential mortgage-backed ("RMBS") | 64.7 | 178.1 |
CDO/CLO | 26.2 | 15.4 |
Other asset-backed | 10.1 | 101.3 |
Debt securities | 432.8 | 845.9 |
Equity securities | 4.4 | 12.1 |
Total temporarily impaired securities | 437.2 | 858 |
Amounts inside the closed block | 150.7 | 308.5 |
Amounts outside the closed block | 286.5 | 549.5 |
Amounts outside the closed block that are below investment grade | 29.8 | 68.8 |
AgingOfTemporarilyImpairedDebtSecuritesFairValueMember | Greater than 12 months | ' | ' |
U.S. government and agency | 28.4 | 41.2 |
State and political subdivision | 7.1 | 6.2 |
Foreign government | ' | ' |
Corporate | 318.2 | 501.2 |
Commercial mortgage-backed ("CMBS") | 30.7 | 52.1 |
Residential mortgage-backed ("RMBS") | 212.6 | 392.4 |
CDO/CLO | 132.7 | 167.6 |
Other asset-backed | 43.3 | 57.8 |
Debt securities | 773 | 1,218.50 |
Equity securities | 2.4 | 0.4 |
Total temporarily impaired securities | 775.4 | 1,218.90 |
Amounts inside the closed block | 332.4 | 552.7 |
Amounts outside the closed block | 443 | 666.2 |
Amounts outside the closed block that are below investment grade | $177.50 | $248.50 |
9_Investing_Activities_Details4
9. Investing Activities (Details 4) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 |
As restated and amended [Member] | As restated and amended [Member] | ||
Balance, beginning of period | ($79.10) | ($65.80) | ($50.60) |
Add: Credit losses on securities not previously impaired | -6.7 | -11.8 | -14.9 |
Add: Credit losses on securities previously impaired | -13.3 | -8.6 | -22.4 |
Less: Credit losses on securities impaired due to intent to sell | ' | ' | ' |
Less: Credit losses on securities sold | 26.5 | 7.1 | 11.4 |
Less: Credit losses upon adoption of new accounting guidance(2) | ' | ' | 10.7 |
Less: Increases in cash flows expected on previously impaired securities | ' | ' | ' |
Balance, end of period | ($72.60) | ($79.10) | ($65.80) |
9_Investing_Activities_Details5
9. Investing Activities (Details 5) (USD $) | Dec. 31, 2012 | Dec. 31, 2011 |
In Millions, unless otherwise specified | As restated and amended [Member] | |
Private equity | $241.70 | $233 |
Mezzanine funds | 202.1 | 191.9 |
Infrastructure funds | 42.5 | 35.4 |
Hedge funds | 14.3 | 14.9 |
Leverage lease | 5.4 | 12.4 |
Mortgage and real estate | 17.9 | 24.1 |
Direct equity investments | 29.2 | 28.5 |
Life settlements | 21 | 21.1 |
Other alternative assets | 3.2 | 4 |
Limited partnerships and other investments | 577.3 | 565.3 |
Amounts applicable to the closed block | $353.10 | $338 |
9_Investing_Activities_Details6
9. Investing Activities (Details 6) (USD $) | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2012 | Dec. 31, 2011 |
In Millions, unless otherwise specified | As restated and amended [Member] | Equity Method Investee [Member] | Equity Method Investee [Member] | |
As restated and amended [Member] | ||||
Total assets | $21,629.80 | $21,488 | $60,921.30 | $59,960 |
Total liabilities | $21,119.30 | $20,792.30 | $2,298.40 | $2,581 |
9_Investing_Activities_Details7
9. Investing Activities (Details 7) (USD $) | 12 Months Ended | |||||
In Millions, unless otherwise specified | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 |
As restated and amended [Member] | As restated and amended [Member] | Equity Method Investee [Member] | Equity Method Investee [Member] | Equity Method Investee [Member] | ||
As restated and amended [Member] | As restated and amended [Member] | |||||
Total investment revenues | $1,789.20 | $1,836.50 | $1,970.30 | $2,389.60 | $3,093.60 | $3,083.70 |
Net income | ' | ' | ' | $8,315.20 | $5,489.50 | $8,375.40 |
9_Investing_Activities_Details8
9. Investing Activities (Details 8) (USD $) | Dec. 31, 2012 | Dec. 31, 2011 |
In Millions, unless otherwise specified | As restated and amended [Member] | |
Rental receivables, net | $11.40 | $13.50 |
Estimated residual values | 7.3 | 12.8 |
Unearned income | -0.8 | -2.2 |
Investment in leveraged leases | $17.90 | $24.10 |
9_Investing_Activities_Details9
9. Investing Activities (Details 9) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 |
As restated and amended [Member] | As restated and amended [Member] | ||
Income from investment in leveraged leases | $0.20 | $0.20 | $0.30 |
Less: Income tax expense on leveraged leases | -0.1 | -0.1 | -0.1 |
Investment income after income tax from investment in leveraged leases | $0.10 | $0.10 | $0.20 |
Recovered_Sheet1
9. Investing Activities (Details 10) (USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2012 | Dec. 31, 2011 |
Investing Activities Details 10 | ' | ' |
Year ended December 31, 2010 | ' | ' |
Net contributions (distributions) | 0.8 | 9.8 |
Net income (loss) | -168.5 | ' |
Net income (loss) | -0.1 | 0.3 |
Year ended | $29.20 | $28.50 |
Recovered_Sheet2
9. Investing Activities (Details 11) (USD $) | Dec. 31, 2012 |
In Millions, unless otherwise specified | Contract |
Number of Contracts | 14 |
Carrying Vlaue | $21 |
Face Value of Death Benefits | 60.1 |
0-4 years [Member] | ' |
Number of Contracts | ' |
Carrying Vlaue | ' |
Face Value of Death Benefits | ' |
4-5 years [Member] | ' |
Number of Contracts | 6 |
Carrying Vlaue | 12.6 |
Face Value of Death Benefits | 23 |
Thereafter [Member] | ' |
Number of Contracts | 8 |
Carrying Vlaue | 8.4 |
Face Value of Death Benefits | $37.10 |
Recovered_Sheet3
9. Investing Activities (Details 12) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 |
As restated and amended [Member] | As restated and amended [Member] | ||
Debt securities | $606.60 | $607.90 | $597.90 |
Equity securities | 3 | 1.1 | 2.4 |
Limited partnerships and other investments | 64.7 | 48.9 | 69.2 |
Policy loans | 161.5 | 171.8 | 171.7 |
Fair value investments | 9.4 | 3.5 | 12.5 |
Total investment income | 845.2 | 833.2 | 853.7 |
Less: Discontinued operations | 2.1 | 2.1 | 5 |
Less: Investment expenses | 13.8 | 8.2 | 8.2 |
Net investment income | 829.3 | 822.9 | 840.5 |
Amounts applicable to closed block | $452.90 | $465.50 | $494.30 |
Recovered_Sheet4
9. Investing Activities (Details 13) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 |
As restated and amended [Member] | As restated and amended [Member] | ||
Total other-than-temporary debt impairment losses | ($45.70) | ($64.50) | ($107) |
Portion of loss recognized in OCI | -22.9 | -38.5 | -58.7 |
Net debt impairment losses recognized in earnings | -22.8 | -26 | -48.3 |
Debt security impairments: | ' | ' | ' |
U.S. government and agency | ' | ' | ' |
State and political subdivision | -0.6 | ' | ' |
Foreign government | ' | ' | ' |
Corporate | -3 | -9 | -7.3 |
CMBS | -4.1 | -3.6 | -6.6 |
RMBS | -10.3 | -10.1 | -15.9 |
CDO/CLO | -3.8 | -2.1 | -15 |
Other asset-backed | -1 | -1.2 | -3.5 |
Net debt security impairments | -22.8 | -26 | -48.3 |
Equity security impairments | -5.7 | -0.8 | -0.2 |
Limited partnerships and other investment impairments | -0.3 | ' | -0.1 |
Net OTTI losses recognized in earnings | -28.8 | -26.8 | -48.6 |
Debt security transaction gains | 52.3 | 13.6 | 57.9 |
Debt security transaction losses | -11.1 | -6 | -16 |
Equity security transaction gains | 8.5 | 3.8 | ' |
Equity security transaction losses | -0.4 | -0.1 | ' |
Limited partnerships and other investment gains | 7.7 | 4.8 | 13.8 |
Limited partnerships and other investment losses | -2.5 | -4.8 | -6.9 |
Sale of Goodwin | ' | 4 | ' |
Net transaction gains | 54.5 | 15.3 | 48.8 |
Derivative instruments | -50.4 | 14.4 | -26.6 |
Embedded derivatives | 12.1 | -34.4 | 12.3 |
Assets valued at fair value | 2.1 | 0.6 | 2.9 |
Net realized investment losses, excluding impairment losses | 18.3 | -5.3 | 37.4 |
Net realized investment gains (losses) | ($10.50) | ($32.10) | ($11.20) |
Recovered_Sheet5
9. Investing Activities (Details 14) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 |
As restated and amended [Member] | As restated and amended [Member] | ||
Debt securities | $408 | $281.10 | $590 |
Equity securities | 4.2 | -7.4 | 6.4 |
Other investments | -0.2 | -0.2 | 0.5 |
Net unrealized investment gains | 412 | 273.5 | 596.9 |
Applicable closed block policyholder dividend obligation | 168 | 158.6 | 287.2 |
Applicable deferred policy acquisition cost | 75.1 | 52.8 | 136.2 |
Applicable other actuarial offsets | 75.2 | 37.2 | 24.3 |
Applicable deferred income tax expense (benefit) | 90.9 | 0.3 | 87 |
Offsets to net unrealized investment gains | 409.2 | 248.9 | 534.7 |
Net unrealized investment gains (losses) included in OCI | $2.80 | $24.60 | $62.20 |
Recovered_Sheet6
9. Investing Activities (Details 15) (USD $) | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2012 | Dec. 31, 2011 |
In Millions, unless otherwise specified | Liability [Member] | Liability [Member] | Maximum Exposure of Loss [Member] | Maximum Exposure of Loss [Member] | Assets [Member] | Assets [Member] |
As restated and amended [Member] | As restated and amended [Member] | As restated and amended [Member] | ||||
Debt securities, at fair value | ' | ' | $3.40 | $0.20 | $3.60 | $0.30 |
Equity securities, at fair value | ' | ' | 19.2 | 26.5 | 23.4 | 27.8 |
Cash and cash equivalents | ' | ' | 10.2 | 3.3 | 10.2 | 3.5 |
Investment in partnership interests | ' | ' | 11 | 14.6 | 11 | 14.6 |
Investment in single asset LLCs | ' | ' | 5.4 | 1 | 6.8 | 1.7 |
Other assets | ' | ' | 5.5 | ' | 5.5 | 0.1 |
Total assets of consolidated VIEs | ' | ' | 54.7 | 45.6 | 60.5 | 48 |
Total liabilities of consolidated VIEs | $5.10 | $0.10 | $5.10 | $0.10 | ' | ' |
Recovered_Sheet7
9. Investing Activities (Details 16) (USD $) | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2011 | Dec. 31, 2011 | Dec. 31, 2011 | Dec. 31, 2011 | Dec. 31, 2011 |
In Millions, unless otherwise specified | Liability [Member] | Liability [Member] | Maximum Exposure of Loss [Member] | Maximum Exposure of Loss [Member] | Assets [Member] | Assets [Member] | Limited Partnerships [Member] | Limited Partnerships [Member] | Limited Partnerships [Member] | Limited Partnerships [Member] | Limited Partnerships [Member] | Limited Partnerships [Member] | LLCs [Member] | LLCs [Member] | LLCs [Member] | LLCs [Member] | LLCs [Member] | Maximum Exposure of Loss [Member] |
As restated and amended [Member] | As restated and amended [Member] | As restated and amended [Member] | Liability [Member] | Liability [Member] | Maximum Exposure of Loss [Member] | Maximum Exposure of Loss [Member] | Assets [Member] | Assets [Member] | Liability [Member] | Liability [Member] | As restated and amended [Member] | Assets [Member] | Assets [Member] | LLCs [Member] | ||||
As restated and amended [Member] | As restated and amended [Member] | As restated and amended [Member] | As restated and amended [Member] | As restated and amended [Member] | ||||||||||||||
Total | ' | ' | $205.30 | $210.10 | $139.70 | $141.70 | ' | ' | $202.10 | $201.60 | $136.50 | $133.20 | ' | ' | $8.50 | $3.20 | $8.50 | $3.20 |
Recovered_Sheet8
9. Investing Activities (Details Narrative) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 |
Securities | Securities | ||
Investing Activities Details Narrative | ' | ' | ' |
Unrealized losses on debt securities outside closed block depressed of amortized cost, amount | $52.30 | $120.30 | ' |
Unrealized losses on debt securities outside closed block depressed of amortized cost, percentage | 20.00% | 20.00% | ' |
Unrealized losses on debt securities outside closed block depressed of amortized cost for more than 12 month, amount | 52.1 | 93.5 | ' |
Unrealized losses on debt securities outside closed block depressed of amortized cost for more than 12 month, percentage | 20.00% | 20.00% | ' |
Unrealized losses on debt securities held in closed block depressed of amortized cost, amount | 5.5 | 39.9 | ' |
Unrealized losses on debt securities held in closed block depressed of amortized cost, percentage | 20.00% | 20.00% | ' |
Unrealized losses on debt securities outside closed block depressed of amortized cost for more than 12 month, amount | 5.5 | 17.3 | ' |
Unrealized losses on debt securities held in closed block depressed of amortized cost for more than 12 month, percentage | 20.00% | 20.00% | ' |
Number of debt securities | 192 | 302 | ' |
Number of equity securities | 4 | 2 | ' |
Total debt impairments recognized | 24.5 | 27 | 50.3 |
Equity security OTTIs | 5.7 | 0.8 | 0.2 |
Limited partnerships and other investment OTTIs | 0.3 | 0 | 0.1 |
Amount of impairments recognized as adjustment to other comprehensive loss | 30.5 | 42 | 55.7 |
Deferred income tax liability related to leveraged leases | 11.6 | 16.3 | ' |
Income received from other direct equity investments | -0.2 | -0.3 | 4.7 |
Undistributed earnings of direct equity investments | -3.1 | -0.1 | 4.6 |
Income (losses) recognized on life settlement contracts | 0.9 | 0 | 0.2 |
Impairment charges on life settlement contracts | 0.3 | ' | ' |
Anticipated life insurance premiums payable in December 31, 2013 | 1.2 | ' | ' |
Anticipated life insurance premiums payable in December 31, 2014 | 1 | ' | ' |
Anticipated life insurance premiums payable in December 31, 2015 | 0.7 | ' | ' |
Anticipated life insurance premiums payable in December 31, 2016 | 0.7 | ' | ' |
Anticipated life insurance premiums payable in December 31, 2017 | 0.8 | ' | ' |
Deposit securities fair value | 33 | 50.5 | ' |
Unfunded commitments related to VIEs | 4.1 | 3.6 | ' |
Fixed maturities below-investment-grade assets | 1,039.60 | 949.6 | ' |
Derivative assets, net of liabilities | 108.9 | ' | ' |
Debt securities, fair value | 203.1 | ' | ' |
Maximum amount of loss due to credit risk | $312 | ' | ' |
10_Financing_Actvities_Details
10. Financing Actvities (Details) (USD $) | Dec. 31, 2012 | Dec. 31, 2011 |
In Millions, unless otherwise specified | ||
Financing Actvities Details | ' | ' |
7.15% surplus notes | $12.60 | $174.10 |
7.45% senior unsecured bonds | 25.3 | 252.8 |
Total indebtedness | $378.80 | $42.70 |
10_Financing_Activities_Detail
10. Financing Activities (Details 1) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 |
Financing Activities Details 1 | ' | ' | ' |
Surplus notes | ($11.60) | ($12.50) | ($12.50) |
Senior unsecured bonds | -19.2 | -19.3 | -19.3 |
Interest expense on indebtedness | $30.80 | ($31.80) | ($31.80) |
10_Financing_Activities_Detail1
10. Financing Activities (Details Narrative) (USD $) | Dec. 31, 2012 |
In Millions, unless otherwise specified | |
Financing Activities Details Narrative | ' |
Cumulative amount of bonds repurchased | $4.70 |
Future minimum annual payments on indebtedness | $25.30 |
11_Common_Stock_and_Stock_Repu1
11. Common Stock and Stock Repurchase Program (Details Narrative) (USD $) | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 |
Common Stock And Stock Repurchase Program Details Narrative | ' | ' | ' |
Shares issue to settle share-based compensation awards | 3.6 | ' | ' |
Shares issue to policyholders in exchange for their interests | 2.8 | ' | ' |
Shares outstanding | 5.7 | ' | ' |
Common shares of treasury stock | 0.7 | ' | ' |
Common shares reserved | 0.5 | ' | ' |
Compensation costs | $2.30 | $2.40 | $4.40 |
12_Separate_Accounts_Death_Ben2
12. Separate Accounts, Death Benefits, Other Insurance Benefit Features and Embedded Product Derivatives (Details) (USD $) | Dec. 31, 2012 | Dec. 31, 2011 |
In Millions, unless otherwise specified | ||
Separate Accounts Death Benefits Other Insurance Benefit Features And Embedded Product Derivatives Details | ' | ' |
Debt securities | $484.60 | $515.40 |
Equity funds | 1,862.20 | 1,883.30 |
Other | 69.6 | 81.7 |
Total | $2,416.40 | $2,480.40 |
12_Separate_Accounts_Death_Ben3
12. Separate Accounts Death Benefits, Other Insurance Benefit Features and Embedded Product Derivatives (Details1) (USD $) | 12 Months Ended | ||
Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 | |
Variable Annuity GMIB | ' | ' | ' |
Liability balance, beginning of the period | $1,640,000 | $1,770,000 | $1,630,000 |
Incurred | 60,000 | 80,000 | 240,000 |
Paid | 110,000 | 210,000 | ' |
Assumption unlocking | ' | ' | -60,000 |
Liability balance, end of the period | 1,590,000 | 1,640,000 | 1,810,000 |
Variable Annuity GMDB | ' | ' | ' |
Liability balance, beginning of the period | 1,780,000 | 1,810,000 | 1,910,000 |
Incurred | 400,000 | -70,000 | 370,000 |
Paid | ' | ' | 510,000 |
Assumption unlocking | -20,000 | 40,000 | ' |
Liability balance, end of the period | 2,160,000 | 1,780,000 | 1,770,000 |
Fixed Indexed Annuity GMWB & GMDB | ' | ' | ' |
Liability balance, beginning of the period | 560,000 | 50,000 | ' |
Incurred | 4,010,000 | 510,000 | 50,000 |
Paid | ' | ' | ' |
Liability balance, end of the period | $4,570,000 | $560,000 | $50,000 |
12_Separate_Accounts_Death_Ben4
12. Separate Accounts Death Benefits, Other Insurance Benefit Features and Embedded Product Derivatives (Details2) (USD $) | 12 Months Ended | |
Dec. 31, 2012 | Dec. 31, 2011 | |
Account Value | $282,060,000 | $290,600,000 |
Net Amount at Risk After Reinsurance | 3,950,000 | 13,080,000 |
Less: General account value with GMDB | 42,060,000 | 44,410,000 |
Subtotal separate account liabilities with GMDB | 240,000,000 | 246,190,000 |
Separate account liabilities without GMDB | 91,650,000 | 135,500,000 |
Total separate account liabilities | 331,650,000 | 381,690,000 |
GMIB(1) at December 31, 2012 | 41,680,000 | 44,210,000 |
Return of premium | ' | ' |
Account Value | 79,920,000 | 83,960,000 |
Net Amount at Risk After Reinsurance | 640,000 | 2,250,000 |
Average Attained Age Of Annuitant | '62 years | '61 years |
Step up | ' | ' |
Account Value | 195,720,000 | 199,950,000 |
Net Amount at Risk After Reinsurance | 2,560,000 | 9,910,000 |
Average Attained Age Of Annuitant | '63 years | '62 years |
Earnings enhancement benefit ("EEB") | ' | ' |
Account Value | 3,750,000 | 3,980,000 |
Net Amount at Risk After Reinsurance | 10,000 | 40,000 |
Average Attained Age Of Annuitant | '63 years | '62 years |
Greater of annual step up and roll up | ' | ' |
Account Value | 2,670,000 | 2,710,000 |
Net Amount at Risk After Reinsurance | $740,000 | $880,000 |
Average Attained Age Of Annuitant | '67 years | '66 years |
12_Separate_Accounts_Death_Ben5
12. Separate Accounts Death Benefits, Other Insurance Benefit Features and Embedded Product Derivatives (Details3) (USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2012 | Dec. 31, 2011 |
Additional Insurance Benefits | $97.80 | $96.80 |
GMWB | ' | ' |
Additional Insurance Benefits | 57.8 | 57.2 |
Average Attained Age Of Annuitant | '63 years | '62 years |
GMAB | ' | ' |
Additional Insurance Benefits | 39.1 | 38.6 |
Average Attained Age Of Annuitant | '58 years | '57 years |
COMBO | ' | ' |
Additional Insurance Benefits | $0.80 | $1 |
Average Attained Age Of Annuitant | '62 years | '61 years |
12_Separate_Accounts_Death_Ben6
12. Separate Accounts Death Benefits Other Insurance Benefit Features and Embedded Product Derivatives (Details 4) (USD $) | Dec. 31, 2012 | Dec. 31, 2011 |
In Millions, unless otherwise specified | ||
Separate Accounts Death Benefits Other Insurance Benefit Features And Embedded Product Derivatives Details 4 | ' | ' |
GMWB | $15.30 | $23.60 |
GMAB | 14.6 | 25.3 |
GPAF | -0.3 | -0.3 |
COMBO | $29.60 | $48.60 |
12_Separate_Accounts_Death_and
12. Separate Accounts, Death and Benefits (Details Narrative) (USD $) | Dec. 31, 2012 | Jun. 30, 2012 | Dec. 31, 2011 |
In Millions, unless otherwise specified | |||
Separate Accounts Death And Benefits Details Narrative | ' | ' | ' |
Assets transferred to pension plan trustee | $464.20 | ' | ' |
Fixed annuity embedded derivatives | ' | 115.2 | 78.3 |
Additional universal life benefit reserves | ' | $145.30 | $146.60 |
13_Derivative_Instruments_Deta
13. Derivative Instruments (Details) (USD $) | Dec. 31, 2012 | Dec. 31, 2011 |
In Millions, unless otherwise specified | ||
Interest rate swaps [Member] | ' | ' |
Derivative Instruments Maturity Period | '2016-2027 | '2017-2026 |
Fair Value Notional Amount | $180 | $131 |
Fair Value Assets | 15.5 | 13.7 |
Fair Value Liabilities | 7.7 | 5.2 |
Variance Swaps [member] | ' | ' |
Derivative Instruments Maturity Period | '2015-2017 | '2015-2017 |
Fair Value Notional Amount | 0.9 | 0.9 |
Fair Value Assets | ' | 2.8 |
Fair Value Liabilities | 4.4 | ' |
Swaptions [Member] | ' | ' |
Derivative Instruments Maturity Period | '2024 | '2024 |
Fair Value Notional Amount | 25 | 25 |
Fair Value Assets | ' | 0.2 |
Fair Value Liabilities | ' | ' |
Put options [Member] | ' | ' |
Derivative Instruments Maturity Period | '2015-2022 | '2015-2022 |
Fair Value Notional Amount | 406 | 406 |
Fair Value Assets | 72.7 | 95.4 |
Fair Value Liabilities | ' | ' |
Call options [Member] | ' | ' |
Derivative Instruments Maturity Period | '2013-2017 | '2012-2016 |
Fair Value Notional Amount | 1,328.40 | 700.4 |
Fair Value Assets | 53.3 | 31.4 |
Fair Value Liabilities | 33.6 | 19 |
Cross currency swaps [Member] | ' | ' |
Derivative Instruments Maturity Period | '2016 | '2012-2016 |
Fair Value Notional Amount | 10 | 15 |
Fair Value Assets | ' | 0.2 |
Fair Value Liabilities | 0.1 | ' |
Equity futures | ' | ' |
Derivative Instruments Maturity Period | '2013 | '2012 |
Fair Value Notional Amount | 184.7 | 70 |
Fair Value Assets | 15.9 | 18.5 |
Fair Value Liabilities | ' | ' |
Total derivative instruments | ' | ' |
Fair Value Notional Amount | 2,135 | 1,348.30 |
Fair Value Assets | 157.4 | 162.2 |
Fair Value Liabilities | $45.80 | $24.20 |
13_Derivative_Instruments_Deta1
13. Derivative Instruments (Details 1) (USD $) | 12 Months Ended | ||||||||||||||||||||||||||
In Millions, unless otherwise specified | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 |
As restated and amended [Member] | As restated and amended [Member] | Interest rate swaps [Member] | Interest rate swaps [Member] | Interest rate swaps [Member] | Variance Swaps [member] | Variance Swaps [member] | Variance Swaps [member] | Swaptions [Member] | Swaptions [Member] | Swaptions [Member] | Call options [Member] | Call options [Member] | Call options [Member] | Put options [Member] | Put options [Member] | Put options [Member] | Equity futures | Equity futures | Equity futures | Cross currency swaps [Member] | Cross currency swaps [Member] | Cross currency swaps [Member] | Embedded Derivatives [Member] | Embedded Derivatives [Member] | Embedded Derivatives [Member] | ||
As restated and amended [Member] | As restated and amended [Member] | As restated and amended [Member] | As restated and amended [Member] | As restated and amended [Member] | As restated and amended [Member] | As restated and amended [Member] | As restated and amended [Member] | As restated and amended [Member] | As restated and amended [Member] | As restated and amended [Member] | As restated and amended [Member] | As restated and amended [Member] | As restated and amended [Member] | As restated and amended [Member] | As restated and amended [Member] | ||||||||||||
Total derivative instrument realized gains (losses) recognized in earnings | ($38.30) | ($20) | ($14.30) | ($0.90) | $10.30 | ' | ($7.90) | $3.50 | ($0.60) | ($0.20) | ($1.30) | $1.70 | ($22) | ($11.90) | $11.20 | $0.10 | $19.80 | ($4.10) | ($19.40) | ($6.20) | ($35.90) | ($0.10) | $0.20 | $1.10 | $12.10 | ($34.40) | $12.30 |
13_Derivative_Instruments_Deta2
13. Derivative Instruments (Details Narrative) (USD $) | Dec. 31, 2012 | Dec. 31, 2011 |
In Millions, unless otherwise specified | ||
Derivative Instruments Details Narrative | ' | ' |
Cash and cash equivalents held at collateral by a third party related to derivative transactions | $9.20 | $8 |
Derivative liabilities contingent receivable | $2.70 | $3.40 |
14_Fair_Value_of_Financial_Ins2
14. Fair Value of Financial Instruments (Details) (USD $) | Dec. 31, 2012 | Dec. 31, 2011 |
In Millions, unless otherwise specified | ||
ASSETS: | ' | ' |
U.S. government and agency | $1,111.50 | $741.80 |
State and political subdivision | 357.2 | 281.8 |
Foreign government | 204.3 | 205.2 |
Corporate | 7,670 | 6,558.20 |
Commercial mortgage-backed ("CMBS") | 882.2 | 1,129.30 |
Residential mortgage-backed ("RMBS") | 1,771.70 | 2,107 |
CDO/CLO | 223.7 | 232.4 |
Other asset-backed | 435.4 | 541.3 |
Available-for-sale equity securities | 34.8 | 35.7 |
Derivative assets | 157.4 | 162.2 |
Fair value investments | 201.5 | 184 |
Separate account assets | 3,316.50 | 3,816.90 |
Total assets | 16,366.20 | 15,995.80 |
LIABILITIES: | ' | ' |
Derivative liabilities | 45.8 | 24.2 |
Embedded derivatives | 80.8 | 84.5 |
Total liabilities | 126.6 | 108.7 |
As restated and amended [Member] | ' | ' |
ASSETS: | ' | ' |
Separate account assets | ' | 3,816.90 |
Level 1 [member] | ' | ' |
ASSETS: | ' | ' |
U.S. government and agency | 699.6 | ' |
State and political subdivision | ' | ' |
Foreign government | ' | ' |
Corporate | ' | ' |
Commercial mortgage-backed ("CMBS") | ' | ' |
Residential mortgage-backed ("RMBS") | ' | ' |
CDO/CLO | ' | ' |
Other asset-backed | ' | ' |
Available-for-sale equity securities | 2.1 | ' |
Derivative assets | 15.9 | ' |
Fair value investments | 30.6 | ' |
Separate account assets | 3,316.50 | ' |
Total assets | 4,064.70 | ' |
LIABILITIES: | ' | ' |
Derivative liabilities | ' | ' |
Total liabilities | ' | ' |
Level 1 [member] | As restated and amended [Member] | ' | ' |
ASSETS: | ' | ' |
U.S. government and agency | ' | 268.2 |
State and political subdivision | ' | ' |
Foreign government | ' | ' |
Corporate | ' | ' |
Commercial mortgage-backed ("CMBS") | ' | ' |
Residential mortgage-backed ("RMBS") | ' | ' |
CDO/CLO | ' | ' |
Other asset-backed | ' | ' |
Available-for-sale equity securities | ' | 1.5 |
Derivative assets | ' | 18.9 |
Fair value investments | ' | 23.7 |
Separate account assets | ' | 3,738.60 |
Total assets | ' | 4,050.90 |
LIABILITIES: | ' | ' |
Derivative liabilities | ' | ' |
Embedded derivatives | ' | ' |
Total liabilities | ' | ' |
Level 2 [Member] | ' | ' |
ASSETS: | ' | ' |
U.S. government and agency | 115.2 | ' |
State and political subdivision | 144.8 | ' |
Foreign government | 158.5 | ' |
Corporate | 3,857.70 | ' |
Commercial mortgage-backed ("CMBS") | 792.5 | ' |
Residential mortgage-backed ("RMBS") | 1,062.40 | ' |
CDO/CLO | ' | ' |
Other asset-backed | 125.5 | ' |
Available-for-sale equity securities | ' | ' |
Derivative assets | 141.5 | ' |
Fair value investments | 17.6 | ' |
Separate account assets | ' | ' |
Total assets | 6,415.70 | ' |
LIABILITIES: | ' | ' |
Derivative liabilities | 45.8 | ' |
Embedded derivatives | ' | ' |
Total liabilities | 45.8 | ' |
Level 2 [Member] | As restated and amended [Member] | ' | ' |
ASSETS: | ' | ' |
U.S. government and agency | ' | 137.4 |
State and political subdivision | ' | 165.2 |
Foreign government | ' | 153.4 |
Corporate | ' | 3,056.70 |
Commercial mortgage-backed ("CMBS") | ' | 1,028.70 |
Residential mortgage-backed ("RMBS") | ' | 1,162.80 |
CDO/CLO | ' | ' |
Other asset-backed | ' | 205.8 |
Available-for-sale equity securities | ' | 4.8 |
Derivative assets | ' | 143.3 |
Fair value investments | ' | 15.5 |
Separate account assets | ' | 78.3 |
Total assets | ' | 6,151.90 |
LIABILITIES: | ' | ' |
Derivative liabilities | ' | 24.2 |
Embedded derivatives | ' | ' |
Total liabilities | ' | 24.2 |
Level 3 [Member] | ' | ' |
ASSETS: | ' | ' |
U.S. government and agency | 296.7 | ' |
State and political subdivision | 212.4 | ' |
Foreign government | 45.8 | ' |
Corporate | 3,812.30 | ' |
Commercial mortgage-backed ("CMBS") | 89.7 | ' |
Residential mortgage-backed ("RMBS") | 709.3 | ' |
CDO/CLO | 223.7 | ' |
Other asset-backed | 309.9 | ' |
Available-for-sale equity securities | 32.7 | ' |
Derivative assets | ' | ' |
Fair value investments | 153.3 | ' |
Separate account assets | ' | ' |
Total assets | 5,885.80 | ' |
LIABILITIES: | ' | ' |
Derivative liabilities | ' | ' |
Embedded derivatives | 80.8 | ' |
Total liabilities | 80.8 | ' |
Level 3 [Member] | As restated and amended [Member] | ' | ' |
ASSETS: | ' | ' |
U.S. government and agency | ' | 336.2 |
State and political subdivision | ' | 116.6 |
Foreign government | ' | 51.8 |
Corporate | ' | 3,501.50 |
Commercial mortgage-backed ("CMBS") | ' | 100.6 |
Residential mortgage-backed ("RMBS") | ' | 944.2 |
CDO/CLO | ' | 232.4 |
Other asset-backed | ' | 335.5 |
Available-for-sale equity securities | ' | 29.4 |
Derivative assets | ' | ' |
Fair value investments | ' | 144.8 |
Separate account assets | ' | ' |
Total assets | ' | 5,793 |
LIABILITIES: | ' | ' |
Derivative liabilities | ' | ' |
Embedded derivatives | ' | 84.5 |
Total liabilities | ' | $84.50 |
14_Fair_Value_of_Financial_Ins3
14. Fair Value of Financial Instruments (Details 1) (USD $) | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2012 | Dec. 31, 2011 |
In Millions, unless otherwise specified | Fair Value, Measurements, Recurring [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Measurements, Recurring [Member] | Level 3 [Member] |
As restated and amended [Member] | Level 1 [member] | Level 1 [member] | Level 2 [Member] | Level 2 [Member] | Level 3 [Member] | As restated and amended [Member] | ||
As restated and amended [Member] | As restated and amended [Member] | Fair Value, Measurements, Recurring [Member] | ||||||
Fair Values of Corporates by Level and Sector: | ' | ' | ' | ' | ' | ' | ' | ' |
Consumer | $3,021.10 | $2,560.80 | ' | ' | $1,160.30 | $898.40 | $1,860.80 | $1,662.40 |
Energy | 420.5 | 303.1 | ' | ' | 277.8 | 171.7 | 142.7 | 131.4 |
Financial services | 2,219.20 | 1,943.20 | ' | ' | 1,456.50 | 1,221.30 | 762.7 | 721.9 |
Technical/communications | 199.3 | 154.7 | ' | ' | 154.7 | 130.9 | 44.6 | 23.8 |
Transportation | 228.6 | 247.6 | ' | ' | 72.6 | 60.2 | 156 | 187.4 |
Utilities | 1,138.30 | 1,086.60 | ' | ' | 506.5 | 467.4 | 631.8 | 619.2 |
Other | 443 | 262.2 | ' | ' | 229.3 | 106.8 | 213.7 | 155.4 |
Total corporates | $7,670 | $6,558.20 | ' | ' | $3,857.70 | $3,056.70 | $3,812.30 | $3,501.50 |
14_Fair_Value_of_Financial_Ins4
14. Fair Value of Financial Instruments (Details 2) (USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2012 | Dec. 31, 2011 |
U.S. government and agency [Member] | ' | ' |
Level 3 Financial Assets: | ' | ' |
Fair Value, Total assets, Balance, beginning of period | $336.20 | $341.40 |
Purchases | 5.4 | 20.9 |
Sales | -31.5 | -10.6 |
Transfers into Level 3 | ' | 6.9 |
Transfers out of Level 3 | ' | ' |
Realized (gains) losses included in income | 0.4 | ' |
Unrealized (gains) losses included in other comprehensive loss | -13.8 | -22.4 |
Fair Value, Total assets, Balance | 286.1 | 336.2 |
State and political subdivision [Member] | ' | ' |
Level 3 Financial Assets: | ' | ' |
Fair Value, Total assets, Balance, beginning of period | 116.6 | 67.1 |
Purchases | 53.5 | 44.5 |
Sales | -3.1 | -1.8 |
Transfers into Level 3 | 22.1 | ' |
Transfers out of Level 3 | -11.4 | ' |
Realized (gains) losses included in income | ' | ' |
Unrealized (gains) losses included in other comprehensive loss | 34.7 | 6.8 |
Fair Value, Total assets, Balance | 107.4 | 116.6 |
Foreign government [Member] | ' | ' |
Level 3 Financial Assets: | ' | ' |
Fair Value, Total assets, Balance, beginning of period | 51.8 | 47.1 |
Purchases | 5 | 6.6 |
Sales | ' | ' |
Transfers into Level 3 | ' | 6.8 |
Transfers out of Level 3 | ' | -3.5 |
Realized (gains) losses included in income | ' | ' |
Unrealized (gains) losses included in other comprehensive loss | -11 | -5.2 |
Fair Value, Total assets, Balance | 45.8 | 51.8 |
Corporate [Member] | ' | ' |
Level 3 Financial Assets: | ' | ' |
Fair Value, Total assets, Balance, beginning of period | 3,501.50 | 3,278.30 |
Purchases | 610.2 | 438.4 |
Sales | -89.1 | -86.1 |
Transfers into Level 3 | 64.2 | 125.7 |
Transfers out of Level 3 | -119.2 | -88.9 |
Realized (gains) losses included in income | 0.4 | -7.6 |
Unrealized (gains) losses included in other comprehensive loss | -155.7 | -158.3 |
Fair Value, Total assets, Balance | 2,888.90 | 3,501.50 |
Commercial mortgage-backed (CMBS) [Member] | ' | ' |
Level 3 Financial Assets: | ' | ' |
Fair Value, Total assets, Balance, beginning of period | 100.6 | 91.7 |
Purchases | ' | 32 |
Sales | -12.1 | -5 |
Transfers into Level 3 | 32.4 | 17.6 |
Transfers out of Level 3 | -30.4 | -36.7 |
Realized (gains) losses included in income | -4.1 | -3.6 |
Unrealized (gains) losses included in other comprehensive loss | 3.3 | 4.6 |
Fair Value, Total assets, Balance | 89.7 | 100.6 |
Residential mortgage-backed (RMBS) [Member] | ' | ' |
Level 3 Financial Assets: | ' | ' |
Fair Value, Total assets, Balance, beginning of period | 944.2 | 919.1 |
Purchases | 3.5 | 185 |
Sales | -127.2 | -156.5 |
Transfers into Level 3 | ' | ' |
Transfers out of Level 3 | ' | ' |
Realized (gains) losses included in income | -9.6 | -9.7 |
Unrealized (gains) losses included in other comprehensive loss | -101.6 | 6.3 |
Fair Value, Total assets, Balance | 709.3 | 944.2 |
CDO/CLO [Member] | ' | ' |
Level 3 Financial Assets: | ' | ' |
Fair Value, Total assets, Balance, beginning of period | 232.4 | 238 |
Purchases | 25.4 | 18.7 |
Sales | -24.8 | -14.2 |
Transfers into Level 3 | ' | ' |
Transfers out of Level 3 | ' | ' |
Realized (gains) losses included in income | 0.5 | -1.8 |
Unrealized (gains) losses included in other comprehensive loss | -9.8 | -8.3 |
Fair Value, Total assets, Balance | 15.5 | 232.4 |
Other asset-backed [Member] | ' | ' |
Level 3 Financial Assets: | ' | ' |
Fair Value, Total assets, Balance, beginning of period | 335.5 | 252.8 |
Purchases | 17.2 | 100.9 |
Sales | -30.7 | -38.6 |
Transfers into Level 3 | 0.1 | 3.4 |
Transfers out of Level 3 | -11.4 | -7.7 |
Realized (gains) losses included in income | -2.1 | -3.9 |
Unrealized (gains) losses included in other comprehensive loss | 1.3 | 28.6 |
Fair Value, Total assets, Balance | 43.5 | 335.5 |
Available-for-sale equity securities [Member] | ' | ' |
Level 3 Financial Assets: | ' | ' |
Fair Value, Total assets, Balance, beginning of period | 29.4 | 36.2 |
Purchases | 11.5 | 4.4 |
Sales | -16.1 | -8.6 |
Transfers into Level 3 | 0.2 | 0.6 |
Transfers out of Level 3 | ' | ' |
Realized (gains) losses included in income | 6.8 | 3.6 |
Unrealized (gains) losses included in other comprehensive loss | 0.9 | -6.8 |
Fair Value, Total assets, Balance | 32.7 | 29.4 |
Fair value option investments [Member] | ' | ' |
Level 3 Financial Assets: | ' | ' |
Fair Value, Total assets, Balance, beginning of period | 144.8 | 126 |
Purchases | 36 | 37.2 |
Sales | -37.1 | -17.9 |
Transfers into Level 3 | ' | 37.3 |
Transfers out of Level 3 | ' | ' |
Realized (gains) losses included in income | 9.6 | -37.8 |
Unrealized (gains) losses included in other comprehensive loss | ' | ' |
Fair Value, Total assets, Balance | 5 | 144.8 |
Total assets [Member] | ' | ' |
Level 3 Financial Assets: | ' | ' |
Fair Value, Total assets, Balance, beginning of period | 5,793 | 5,397.70 |
Purchases | 767.7 | 888.6 |
Sales | -371.7 | -339.3 |
Transfers into Level 3 | 119 | 198.3 |
Transfers out of Level 3 | -172.4 | -136.8 |
Realized (gains) losses included in income | 1.9 | -60.8 |
Unrealized (gains) losses included in other comprehensive loss | -251.7 | -154.7 |
Fair Value, Total assets, Balance | $5,885.80 | $5,793 |
14_Fair_Value_of_Financial_Ins5
14. Fair Value of Financial Instruments (Details 3) (Embedded Derivatives [Member], USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2012 | Dec. 31, 2011 |
As restated and amended [Member] | ||
Fair Value, Balance, beginning of period | $84.50 | $30.40 |
Net purchases/(sales) | 8.4 | 19.7 |
Transfers into Level 3 | ' | ' |
Transfers out of Level 3 | ' | ' |
Realized (gains) losses | -12.1 | 34.4 |
Fair Value, Balance | $80.80 | $84.50 |
14_Fair_Value_of_Financial_Ins6
14. Fair Value of Financial Instruments (Details 4) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 |
U.S. government and agency [Member] | ' | ' | ' |
Level 3 Assets: | ' | ' | ' |
Fair Value, Total assets, Balance | $286.10 | $336.20 | $341.40 |
Valuation Techniques | 'Spread matrix | ' | ' |
Unobservable Input | 'Yield | ' | ' |
Range (Weighted Average) | '1.46% - 5.19% (3.20%) | ' | ' |
State and political subdivision [Member] | ' | ' | ' |
Level 3 Assets: | ' | ' | ' |
Fair Value, Total assets, Balance | 107.4 | 116.6 | 67.1 |
Valuation Techniques | 'Spread matrix | ' | ' |
Unobservable Input | 'Yield | ' | ' |
Range (Weighted Average) | '1.94% - 3.53% (2.93%) | ' | ' |
State and political subdivision [Member] | ' | ' | ' |
Level 3 Assets: | ' | ' | ' |
Valuation Techniques | 'Discounted cash flow | ' | ' |
Unobservable Input | 'Yield | ' | ' |
Range (Weighted Average) | '3.28% | ' | ' |
Corporate [Member] | ' | ' | ' |
Level 3 Assets: | ' | ' | ' |
Fair Value, Total assets, Balance | 2,888.90 | 3,501.50 | 3,278.30 |
Valuation Techniques | 'Spread matrix | ' | ' |
Unobservable Input | 'Yield | ' | ' |
Range (Weighted Average) | '1.36% - 7.82% (3.21%) | ' | ' |
Corporate [Member] | ' | ' | ' |
Level 3 Assets: | ' | ' | ' |
Valuation Techniques | 'Discounted cash flow | ' | ' |
Unobservable Input | 'Yield | ' | ' |
Range (Weighted Average) | '1.47% - 6.33% (2.80%) | ' | ' |
CDO/CLO [Member] | ' | ' | ' |
Level 3 Assets: | ' | ' | ' |
Fair Value, Total assets, Balance | 15.5 | 232.4 | 238 |
Valuation Techniques | 'Discounted cash flow | ' | ' |
Unobservable Input | 'Prepayment rate | ' | ' |
Range (Weighted Average) | '20% (CLOs) | ' | ' |
CDO/CLO [Member] | ' | ' | ' |
Level 3 Assets: | ' | ' | ' |
Unobservable Input | 'Recovery rate | ' | ' |
Range (Weighted Average) | '65% (Loans), 35% (High yield bonds), | ' | ' |
CDO/CLO [Member] | ' | ' | ' |
Level 3 Assets: | ' | ' | ' |
Unobservable Input | 'Recovery rate | ' | ' |
Range (Weighted Average) | 'B B 45% (Investment grade bonds) | ' | ' |
CDO/CLO [member] | ' | ' | ' |
Level 3 Assets: | ' | ' | ' |
Unobservable Input | 'Reinvestment spread | ' | ' |
Range (Weighted Average) | '3 mo LIBOR + 400bps (CLOs) | ' | ' |
Other asset-backed [Member] | ' | ' | ' |
Level 3 Assets: | ' | ' | ' |
Fair Value, Total assets, Balance | 43.5 | 335.5 | 252.8 |
Valuation Techniques | 'Discounted cash flow | ' | ' |
Unobservable Input | 'Yield | ' | ' |
Range (Weighted Average) | '0.5% - 9.5% (3.41%) | ' | ' |
Other asset-backed [Member] | ' | ' | ' |
Level 3 Assets: | ' | ' | ' |
Valuation Techniques | 'Discounted cash flow | ' | ' |
Unobservable Input | 'Prepayment rate | ' | ' |
Range (Weighted Average) | '2% (CLOs) | ' | ' |
Other asset-backed [Member] | ' | ' | ' |
Level 3 Assets: | ' | ' | ' |
Valuation Techniques | 'Discounted cash flow | ' | ' |
Unobservable Input | 'Default rate | ' | ' |
Range (Weighted Average) | '2.53% for 48 mos then .33% thereafter | ' | ' |
Other asset-backed [Member] | ' | ' | ' |
Level 3 Assets: | ' | ' | ' |
Valuation Techniques | 'Discounted cash flow | ' | ' |
Unobservable Input | 'Recovery rate | ' | ' |
Range (Weighted Average) | '65% (Loans) | ' | ' |
Other asset-backed [Member] | ' | ' | ' |
Level 3 Assets: | ' | ' | ' |
Valuation Techniques | 'Discounted cash flow | ' | ' |
Unobservable Input | 'Reinvestment spread | ' | ' |
Range (Weighted Average) | '3mo LIBOR + 400bps (CLOs) | ' | ' |
Fair value option investments [Member] | ' | ' | ' |
Level 3 Assets: | ' | ' | ' |
Fair Value, Total assets, Balance | $5 | $144.80 | $126 |
Valuation Techniques | 'Discounted cash flow | ' | ' |
Unobservable Input | 'Default rate | ' | ' |
Range (Weighted Average) | '0.24% | ' | ' |
Fair value option investments [Member] | ' | ' | ' |
Level 3 Assets: | ' | ' | ' |
Valuation Techniques | 'Discounted cash flow | ' | ' |
Unobservable Input | 'Recovery rate | ' | ' |
Range (Weighted Average) | '45% | ' | ' |
14_Fair_Value_of_Financial_Ins7
14. Fair Value of Financial Instruments (Details 5) (USD $) | 12 Months Ended | ||||||||||
In Millions, unless otherwise specified | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2011 |
Embedded Derivative (EIA VED) [Member] | Embedded derivatives (EIA VED) [Member] | Embedded derivatives (EIA VED) [Member] | Embedded derivatives (EIA VED) [Member] | Embedded derivatives (GMAB / GMWB) [Member] | Embedded derivatives (GMAB / GMWB) [Member] | Embedded derivatives (GMAB / GMWB) [Member] | Embedded derivatives (GMAB / GMWB) [Member] | Embedded derivatives (GMAB / GMWB) [Member] | Embedded Derivatives [Member] | Embedded Derivatives [Member] | |
Fair Value, Balance | $51.20 | ' | ' | ' | $29.60 | ' | ' | ' | ' | $80.80 | $84.50 |
Valuation Techniques | 'Budget method | 'Budget method | 'Budget method | 'Budget method | 'Risk neutral stochastic valuation methodology | 'Risk neutral stochastic valuation methodology | 'Risk neutral stochastic valuation methodology | 'Risk neutral stochastic valuation methodology | 'Risk neutral stochastic valuation methodology | ' | ' |
Unobservable Input | 'Swap curve | 'Mortality rate | 'Lapse rate | 'CSA | 'Volatility surface | 'Swap curve | 'Mortality rate | 'Lapse rate | 'CSA | ' | ' |
Range | '0.21% - 2.50% | '75% of A2000 basic table | '1.00% - 35.00% | '4.47% | '11.67% - 50.83% | '0.36% - 3.17% | '75% of A2000 basic table | '0.00% - 60.00% | '4.47% | ' | ' |
14_Fair_Value_of_Financial_Ins8
14. Fair Value of Financial Instruments (Details 6) (USD $) | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 |
In Millions, unless otherwise specified | |||
Embedded Derivatives [Member] | ' | ' | ' |
Level 3 Assets and Liabilities by Pricing Source: | ' | ' | ' |
Total liabilities Internal | $80.80 | $84.50 | ' |
Total liabilities External | ' | ' | ' |
Total liabilities | 80.8 | 84.5 | ' |
Total liabilities [Member] | ' | ' | ' |
Level 3 Assets and Liabilities by Pricing Source: | ' | ' | ' |
Total liabilities Internal | 80.8 | 84.5 | ' |
Total liabilities External | ' | ' | ' |
Total liabilities | 80.8 | 84.5 | ' |
U.S. government and agency [Member] | ' | ' | ' |
Level 3 Assets and Liabilities by Pricing Source: | ' | ' | ' |
Total assets Internal | 286.1 | 315.4 | ' |
Total assets External | 10.6 | 20.8 | ' |
Fair Value, Total assets, Balance | 286.1 | 336.2 | 341.4 |
State and political subdivision [Member] | ' | ' | ' |
Level 3 Assets and Liabilities by Pricing Source: | ' | ' | ' |
Total assets Internal | 107.4 | 30.9 | ' |
Total assets External | 105 | 85.7 | ' |
Fair Value, Total assets, Balance | 107.4 | 116.6 | 67.1 |
Foreign government [Member] | ' | ' | ' |
Level 3 Assets and Liabilities by Pricing Source: | ' | ' | ' |
Total assets Internal | ' | 10.4 | ' |
Total assets External | 45.8 | 41.4 | ' |
Fair Value, Total assets, Balance | 45.8 | 51.8 | 47.1 |
Corporate [Member] | ' | ' | ' |
Level 3 Assets and Liabilities by Pricing Source: | ' | ' | ' |
Total assets Internal | 2,888.90 | 2,662.80 | ' |
Total assets External | 923.4 | 838.7 | ' |
Fair Value, Total assets, Balance | 2,888.90 | 3,501.50 | 3,278.30 |
Commercial mortgage-backed (CMBS) [Member] | ' | ' | ' |
Level 3 Assets and Liabilities by Pricing Source: | ' | ' | ' |
Total assets Internal | ' | ' | ' |
Total assets External | 89.7 | 100.6 | ' |
Fair Value, Total assets, Balance | 89.7 | 100.6 | 91.7 |
Residential mortgage-backed (RMBS) [Member] | ' | ' | ' |
Level 3 Assets and Liabilities by Pricing Source: | ' | ' | ' |
Total assets Internal | ' | ' | ' |
Total assets External | 709.3 | 944.2 | ' |
Fair Value, Total assets, Balance | 709.3 | 944.2 | 919.1 |
CDO/CLO [Member] | ' | ' | ' |
Level 3 Assets and Liabilities by Pricing Source: | ' | ' | ' |
Total assets Internal | 15.5 | 199.3 | ' |
Total assets External | 208.2 | 33.1 | ' |
Fair Value, Total assets, Balance | 15.5 | 232.4 | 238 |
Other asset-backed [Member] | ' | ' | ' |
Level 3 Assets and Liabilities by Pricing Source: | ' | ' | ' |
Total assets Internal | 43.5 | 59.1 | ' |
Total assets External | 266.4 | 276.4 | ' |
Fair Value, Total assets, Balance | 43.5 | 335.5 | 252.8 |
Available-for-sale equity securities [Member] | ' | ' | ' |
Level 3 Assets and Liabilities by Pricing Source: | ' | ' | ' |
Total assets Internal | ' | ' | ' |
Total assets External | 32.7 | 29.4 | ' |
Fair Value, Total assets, Balance | 32.7 | 29.4 | 36.2 |
Fair value option investments [Member] | ' | ' | ' |
Level 3 Assets and Liabilities by Pricing Source: | ' | ' | ' |
Total assets Internal | 5 | 37.9 | ' |
Total assets External | 148.3 | 106.9 | ' |
Fair Value, Total assets, Balance | 5 | 144.8 | 126 |
Total assets [Member] | ' | ' | ' |
Level 3 Assets and Liabilities by Pricing Source: | ' | ' | ' |
Total assets Internal | 3,346.40 | 3,315.80 | ' |
Total assets External | 2,539.40 | 2,477.20 | ' |
Fair Value, Total assets, Balance | $5,885.80 | $5,793 | $5,397.70 |
14_Fair_Value_of_Financial_Ins9
14. Fair Value of Financial Instruments (Details 7) (USD $) | Dec. 31, 2012 | Dec. 31, 2011 |
In Millions, unless otherwise specified | ||
Policy Loans [Member] | Level 3 [Member] | ' | ' |
Carrying Amounts and Fair Values of Financial Instruments: | ' | ' |
Carrying Value of Financial instruments | $2,354.70 | ' |
Fair Value of Financial instruments | 2,342.80 | ' |
Policy Loans [Member] | Level 3 [Member] | As restated and amended [Member] | ' | ' |
Carrying Amounts and Fair Values of Financial Instruments: | ' | ' |
Carrying Value of Financial instruments | ' | 2,379.30 |
Fair Value of Financial instruments | ' | 2,367.70 |
Investment Contracts [Member] | Level 3 [Member] | ' | ' |
Carrying Amounts and Fair Values of Financial Instruments: | ' | ' |
Carrying Value of Financial instruments | 3,040.70 | ' |
Fair Value of Financial instruments | 3,045.90 | ' |
Investment Contracts [Member] | Level 3 [Member] | As restated and amended [Member] | ' | ' |
Carrying Amounts and Fair Values of Financial Instruments: | ' | ' |
Carrying Value of Financial instruments | ' | 2,432.30 |
Fair Value of Financial instruments | ' | 2,443.50 |
Surplus notes [Member] | Level 3 [Member] | ' | ' |
Carrying Amounts and Fair Values of Financial Instruments: | ' | ' |
Carrying Value of Financial instruments | 126.1 | ' |
Fair Value of Financial instruments | 252.7 | ' |
Surplus notes [Member] | Level 3 [Member] | As restated and amended [Member] | ' | ' |
Carrying Amounts and Fair Values of Financial Instruments: | ' | ' |
Carrying Value of Financial instruments | ' | 174.2 |
Fair Value of Financial instruments | ' | 126.9 |
Senior unsecured bonds [Member] | Level 2 [Member] | ' | ' |
Carrying Amounts and Fair Values of Financial Instruments: | ' | ' |
Carrying Value of Financial instruments | 95 | ' |
Fair Value of Financial instruments | 217.1 | ' |
Senior unsecured bonds [Member] | Level 2 [Member] | As restated and amended [Member] | ' | ' |
Carrying Amounts and Fair Values of Financial Instruments: | ' | ' |
Carrying Value of Financial instruments | ' | 252.7 |
Fair Value of Financial instruments | ' | 195.1 |
Cash and Cash Equivalents [Member] | Level 1 [member] | ' | ' |
Carrying Amounts and Fair Values of Financial Instruments: | ' | ' |
Carrying Value of Financial instruments | 246.4 | 168.2 |
Fair Value of Financial instruments | $246.40 | $168.20 |
Recovered_Sheet9
14. Fair Value of Financial Instruments (Details Narrative) (USD $) | Dec. 31, 2012 | Dec. 31, 2011 |
In Millions, unless otherwise specified | ||
Febt securities fair value | $126.10 | $117.90 |
Deferred compensation liabilities | 21.9 | 22.1 |
Level 2 [Member] | ' | ' |
Available-for-sale debt securities | $34.50 | $62 |
15_Income_Taxes_Details
15. Income Taxes (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 |
As restated and amended [Member] | As restated and amended [Member] | ||
Current | ' | ' | ' |
U.S. | $15.60 | $12.30 | $4.10 |
Foreign | ' | ' | ' |
Deferred | ' | ' | ' |
U.S. | -19.3 | ' | -14.4 |
Foreign | ' | ' | ' |
Total income tax expense (benefit) | ($3.70) | $12.30 | ($10.30) |
15_Income_Taxes_Details_1
15. Income Taxes (Details 1) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 |
As restated and amended [Member] | As restated and amended [Member] | ||
Income (loss) from continuing operations before income taxes: | ' | ' | ' |
U.S. | ($156) | $2.70 | ($41.60) |
Foreign | ' | ' | ' |
Income from continuing operations before income taxes | -156 | 2.7 | -41.6 |
Income tax expense (benefit) at statutory rate of 35% | -54.6 | 1 | -14.5 |
Dividend received deduction | -2.5 | -3.6 | -0.9 |
Expiration of tax attribute carryovers | 5.6 | ' | 4.3 |
Low income housing tax credit | ' | ' | -1 |
Valuation allowance increase (release) | 48.4 | 14.3 | 3.3 |
Realized losses (gains) on available-for-sale securities pledged as collateral | ' | ' | ' |
State income taxes (benefit) | ' | -2.2 | -2.7 |
Other, net | -0.6 | 2.8 | 1.2 |
Income tax expense (benefit) applicable to continuing operations | ($3.70) | $12.30 | ($10.30) |
Effective income tax rates | 2.40% | 455.50% | 24.80% |
15_Income_Taxes_Details_2
15. Income Taxes (Details 2) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 |
As restated and amended [Member] | As restated and amended [Member] | ||
Income tax expense (benefit) applicable to continuing operations | ($3.70) | $12.30 | ($10.30) |
Income tax from OCI: | ' | ' | ' |
Unrealized | 90.9 | 0.3 | 87 |
Pension | ' | ' | ' |
Policy dividend obligation & deferred policy acquisition cost | ' | ' | ' |
Other | ' | ' | ' |
Income tax related to cumulative effect of change in accounting | ' | ' | 3.1 |
Income tax expense (benefit) from discontinued operations | -1.5 | -2.4 | ' |
Total income tax recorded to all components of income | $85.70 | $10.20 | $79.80 |
15_Income_Taxes_Details_3
15. Income Taxes (Details 3) (USD $) | Dec. 31, 2012 | Dec. 31, 2011 |
In Millions, unless otherwise specified | As restated and amended [Member] | |
Deferred income tax assets | ' | ' |
Future policyholder benefits | $637.20 | $505 |
Unearned premiums / deferred revenues | 57 | 59.5 |
Employee benefits | 128 | 122.6 |
Net operating and capital loss carryover benefits | 244 | 276.3 |
Foreign tax credits carryover benefits | 2.2 | 2 |
Alternative minimum tax credits | 9.4 | 14.6 |
General business tax credits | 31.5 | 35.5 |
Other | 16.2 | 14.3 |
Available-for-sale debt securities | 49.4 | 120.6 |
Subtotal | 1,174.90 | 1,150.40 |
Valuation allowance | -523.3 | -408.4 |
Total deferred income tax assets, net of valuation allowance | 651.6 | 742 |
Deferred tax liabilities | ' | ' |
Deferred policy acquisition costs | 191.8 | 254 |
Accrued liabilities | 348.8 | 291.8 |
Investments | 61.6 | 75.6 |
Gross deferred income tax liabilities | 602.2 | 621.4 |
Net deferred income tax assets | $49.40 | $120.60 |
15_Income_Taxes_Details_4
15. Income Taxes (Details 4) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 |
Income Taxes Details 4 | ' | ' | ' |
Balance, beginning of period | ' | ' | $0.10 |
Reductions for tax positions of prior years | ' | ' | -0.1 |
Settlements with taxing authorities | ' | ' | ' |
Balance, end of period | ' | ' | ' |
15_Income_Taxes_Details_Narrat
15. Income Taxes (Details Narrative) (USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2012 | Dec. 31, 2011 |
Income Taxes Details Narrative | ' | ' |
Net operating and capital loss carryover benefits | $244 | ' |
General business tax credits | 31.5 | ' |
Liability for interest and penalties | 0 | 0 |
Expense related to interest and penalties | $1 | $1 |
16_Accumulated_Other_Comprehen2
16. Accumulated Other Comprehensive Income (Details) (USD $) | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 |
In Millions, unless otherwise specified | |||
Accumulated Other Comprehensive Income (Loss), beginning balance | ($249.30) | ' | ' |
Change in component during the year | -7.3 | ' | ' |
Accumulated Other Comprehensive Income (Loss), ending balance | -249.3 | ' | ' |
As restated and amended [Member] | ' | ' | ' |
Accumulated Other Comprehensive Income (Loss), beginning balance | ' | -230.7 | -156.2 |
Change in component during the year | ' | -43.4 | ' |
Accumulated Other Comprehensive Income (Loss), ending balance | ' | -230.7 | -156.2 |
Net Unrealized Investment Losses [Member] | As restated and amended [Member] | ' | ' | ' |
Accumulated Other Comprehensive Income (Loss), beginning balance | 152.1 | 173.4 | 126.8 |
Change in component during the year | -11.3 | 46.6 | ' |
Accumulated Other Comprehensive Income (Loss), ending balance | 152.1 | 173.4 | 126.8 |
Portion of OTTI Losses Recognized in OCI [Member] | As restated and amended [Member] | ' | ' | ' |
Accumulated Other Comprehensive Income (Loss), beginning balance | -80.4 | -104.5 | -82.5 |
Change in component during the year | 24.1 | -22 | ' |
Accumulated Other Comprehensive Income (Loss), ending balance | -80.4 | -104.5 | -82.5 |
Net Pension Liability Adjustments [Member] | As restated and amended [Member] | ' | ' | ' |
Accumulated Other Comprehensive Income (Loss), beginning balance | -321 | -299.6 | -200.5 |
Change in component during the year | -21.4 | -99.1 | ' |
Accumulated Other Comprehensive Income (Loss), ending balance | ($321) | ($299.60) | ($200.50) |
18_ShareBased_Payment_Details
18. Share-Based Payment (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 |
As restated and amended [Member] | As restated and amended [Member] | ||
Compensation cost charged to income from continuing operations | $2.60 | $4.40 | $5.60 |
Income tax benefit before valuation allowance | ($0.90) | ($0.90) | ($1.10) |
18_ShareBased_Payments_Details
18. Share-Based Payments (Details 1) (Stock Options [Member]) | 12 Months Ended | ||
Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 | |
Stock Options [Member] | ' | ' | ' |
Expected term(1) | '10 years | '0 years | '6 years |
Weighted-average expected volatility | 37.70% | ' | 31.00% |
Weighted-average interest rate | 1.90% | ' | 3.90% |
Weighted-average common share dividend yield | 0.00% | ' | 0.00% |
18_ShareBased_Payments_Details1
18. Share-Based Payments (Details 2) (USD $) | 12 Months Ended |
Dec. 31, 2012 | |
Common Shares Outstanding, end of period | 250 |
Stock Options [Member] | ' |
Common Shares Outstanding, beginning of period | 177,798 |
Common Shares, Granted | 2,053 |
Common Shares, Exercised | -250 |
Common Shares, Forfeited | -88,202 |
Common Shares, Canceled/expired | -210 |
Common Shares Outstanding, end of period | 91,189 |
Common Shares, Vested and exercisable, end of period | 86,089 |
Weighted - Average Exercise Price Outstanding, beginning of period | $228.36 |
Weighted - Average Exercise Price, Granted | $34.38 |
Weighted - Average Exercise Price, Exercised | $10.60 |
Weighted - Average Exercise Price, Forfeited | $266.56 |
Weighted - Average Exercise Price, Canceled/expired | $56.80 |
Weighted - Average Exercise Price Outstanding, end of period | $188.04 |
Weighted - Average Exercise Price, Vested and exercisable, end of period | $196.42 |
Weighted-Average Remaining Contractual Term Outstanding, beginning of period | '2 years 6 months 22 days |
Weighted-Average Remaining Contractual Term, Outstanding end of period | '1 year 6 months 26 days |
Weighted-Average Remaining Contractual Term, Vested and exercisable, end of period | '1 year 3 months 11 days |
Aggregate Intrinsic Value, Outstanding, beginning of period | ' |
Aggregate Intrinsic Value, Outstanding, Outstanding, end of period | ' |
Aggregate Intrinsic Value, Vested and exercisable, end of period | ' |
18_ShareBased_Payments_Details2
18. Share-Based Payments (Details 3) (Stock Options [Member], USD $) | 12 Months Ended | ||
Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 | |
Stock Options [Member] | ' | ' | ' |
Weighted-Average Fair Value, Common Shares | 2,053 | 0 | 11,020 |
Weighted-Average Fair Value, Grant Date Fair Value | $9.03 | ' | $28.40 |
18_ShareBased_Payments_Details3
18. Share-Based Payments (Details 4) (Restricted stock units and Restricted stock [Member], USD $) | 12 Months Ended |
Dec. 31, 2012 | |
Restricted stock units and Restricted stock [Member] | ' |
Number of Time-Vested, Outstanding, beginning of period | 123,377 |
Number of Time-Vested, Awarded | 16,497 |
Number of Time-Vested, Adjustment for performance results | ' |
Number of Time-Vested, Conversion of performance-contingent awards | ' |
Number of Time-Vested, Converted to common shares/applied to taxes | -3,726 |
Number of Time-Vested, Forfeited | -1,254 |
Number of Time-Vested, Outstanding, end of period | 134,894 |
Time-Vested of Weighted-Average Grant Date Fair Value Outstanding, beginning of period | $56.51 |
Time-Vested of Weighted-Average Grant Date Fair Value, Awarded | $26.95 |
Time-Vested of Weighted-Average Grant Date Fair Value, Adjustment for performance results | ' |
Time-Vested of Weighted-Average Grant Date Fair Value, Conversion of performance-contingent awards | ' |
Time-Vested of Weighted-Average Grant Date Fair Value, Converted to common shares/applied to taxes | $46.27 |
Time-Vested of Weighted-Average Grant Date Fair Value, Forfeited | $42.45 |
Time-Vested of Weighted-Average Grant Date Fair Value, Outstanding, end of period | $53.31 |
Performance-Contingent, Outstanding, beginning of period | 22,655 |
Number of Performance-Contingent, Awarded | ' |
Number of Performance-Contingent, Adjustment for performance results | 5,119 |
Number of Performance-Contingent, Conversion of performance-contingent awards | ' |
Number of Performance-Contingent, Converted to common shares/applied to taxes | ' |
Number of Performance-Contingent, Forfeited | -10,750 |
Number of Performance-Contingent, Outstanding, end of period | 17,024 |
Performance-Contingent of Weighted-Average Grant Date Fair Value Outstanding, beginning of period | $44.04 |
Performance-Contingent of Weighted-Average Grant Date Fair Value, Awarded | ' |
Performance-Contingent of Weighted-Average Grant Date Fair Value, Adjustment for performance results | $50.40 |
Performance-Contingent of Weighted-Average Grant Date Fair Value, Conversion of performance-contingent awards | ' |
Performance-Contingent of Weighted-Average Grant Date Fair Value, Converted to common shares/applied to taxes | ' |
Performance-Contingent of Weighted-Average Grant Date Fair Value, Forfeited | $29.60 |
Performance-Contingent of Weighted-Average Grant Date Fair Value, Outstanding, end of period | $55.07 |
18_ShareBased_Payments_Details4
18. Share-Based Payments (Details 5) (RSUs Awarded [Member], USD $) | 12 Months Ended | ||
Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 | |
RSUs Awarded [Member] | ' | ' | ' |
Number of Time-vested RSUs awarded | 16,497 | 21,426 | 17,328 |
Number of Performance-contingent RSUs awarded | ' | 11,905 | 69,475 |
Weighted-Average Grant Date Fair Valu, Time-vested RSUs awarded | $26.95 | $36.20 | $46.40 |
Weighted-Average Grant Date Fair Valu, Performance-contingent RSUs awarded | ' | $50.40 | $56.80 |
18_ShareBased_Payments_Details5
18. Share-Based Payments (Details 6) (USD $) | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 |
In Millions, except Per Share data, unless otherwise specified | |||
Share-Based Payments Details 6 | ' | ' | ' |
Intrinsic value of RSUs converted | $0.10 | $0.70 | $1.40 |
Total grant date fair value of RSUs vested converted to common shares | $0.20 | $2.80 | $4.40 |
18_ShareBased_Payment_Details_
18. Share-Based Payment (Details Narrative) (USD $) | 12 Months Ended | |
In Millions, except Share data, unless otherwise specified | Dec. 31, 2012 | Dec. 31, 2011 |
Share-Based Payment Details Narrative | ' | ' |
Outstanding excercisable stock options | 250 | ' |
Stock options granted during period | 2,053 | ' |
Unrecognized compensation cost related to non-vested stock options | $0.10 | ' |
Weighted-average period | '1 year 4 months 24 days | ' |
Stock issued for future | 12,500 | ' |
UnrecognizedCompensatioCostRelatedToServiceVestedRestrictedSstockUnitsAwards | 1.1 | ' |
Weighted-average expected term | '1 year | ' |
Liability awards accrued | $1.70 | $3.90 |
19_Earnings_Per_Share_Details
19. Earnings Per Share (Details) | 12 Months Ended | ||
Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 | |
Earnings Per Share Details | ' | ' | ' |
Weighted-average common shares outstanding | 5,770 | 5,815 | 5,803 |
Weighted-average effect of dilutive potential common shares: | ' | ' | ' |
Restricted stock units | 75 | 71 | 15 |
Employee stock options | 1 | ' | ' |
Potential common shares | 76 | 71 | 15 |
Less: Potential common shares excluded from calculation due to operating losses | -76 | -71 | -15 |
Dilutive potential common shares | ' | ' | ' |
Weighted-average common shares outstanding, including dilutive potential common shares | 5,770 | 5,815 | 5,803 |
20_Segment_Information_Details
20. Segment Information (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 |
As restated and amended [Member] | As restated and amended [Member] | ||
Life and Annuity | $1,777.10 | $1,828.80 | $1,966.80 |
Saybrus Partners | 22.9 | 18.2 | 6 |
Less: intercompany revenues | 10.8 | 10.5 | 2.5 |
Total revenues | $1,789.20 | $1,836.50 | $1,970.30 |
20_Segment_Information_Details1
20. Segment Information (Details 1) (USD $) | 12 Months Ended | |||
In Millions, unless otherwise specified | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2011 | Dec. 31, 2010 |
As restated and amended [Member] | As restated and amended [Member] | |||
Life and Annuity operating income (loss) | ($160) | ' | $35.90 | ($11.40) |
Saybrus Partners operating income (loss) | 2.6 | ' | -1.3 | -19 |
Less: Applicable income tax expense (benefit) | -3.7 | ' | 12.3 | -10.3 |
Loss from discontinued operations, net of income taxes | -15.6 | ' | -21.6 | -3.6 |
Net realized investment losses | -10.5 | ' | -32.1 | -11.2 |
Gain on debt repurchase | 11.9 | ' | 0.2 | ' |
Less: Net income (loss) attributable to noncontrolling interests | 0.6 | ' | -0.5 | -0.5 |
Net loss | ($168.50) | ' | ($30.70) | ($34.40) |
20_Segment_Information_Details2
20. Segment Information (Details Narrative) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 |
Segment Information Details Narrative | ' | ' | ' |
Interest revenue | $0.60 | $0.80 | $0.20 |
Commission revenue | $11.40 | $11.30 | $2.70 |
21_Discontinued_Operations_Det
21. Discontinued Operations (Details Narrative) (USD $) | 3 Months Ended | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2010 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 |
Discontinued Operations Details Narrative | ' | ' | ' | ' |
Net losses recognized for discontinued operations | ' | $5.70 | $3 | $1.40 |
Dividend distribution | 10 | ' | ' | ' |
Recognized net loss | ' | ' | ' | 0.1 |
Losses related to adverse developments | ' | $9.90 | $18.60 | $3.20 |
22_Phoenix_Life_Statutory_Fina2
22. Phoenix Life Statutory Financial Information and Regulatory Matters (Details 1) (USD $) | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 |
In Millions, unless otherwise specified | |||
Phoenix Life Statutory Financial Information And Regulatory Matters Details 1 | ' | ' | ' |
Statutory capital, surplus and surplus notes | $793.60 | $728.80 | $658.50 |
Asset valuation reserve ("AVR") | 128.9 | 116.9 | 104.7 |
Statutory capital, surplus and AVR(1) | 922.5 | 845.7 | 763.2 |
Statutory net gain from operations | 160.5 | 130.5 | 147.8 |
Statutory net income | $156.20 | $95 | $139.80 |
22_Phoenix_Life_Statutory_Fina3
22. Phoenix Life Statutory Financial Information and Regulatory Matters (Details Narrative) (USD $) | 12 Months Ended |
Dec. 31, 2012 | |
Phoenix Life Statutory Financial Information And Regulatory Matters Details Narrative | ' |
Dividends declared above formula | $71,800,000 |
23_Premises_and_Equipment_Deta
23. Premises and Equipment (Details) (USD $) | Dec. 31, 2012 | Dec. 31, 2011 |
In Millions, unless otherwise specified | ||
Premises and Equipment, Cost | $179.10 | $180.70 |
Premises and Equipment, Carrying Value | 43.9 | 48.7 |
Accumulated depreciation and amortization | -135.2 | -132 |
Premises and equipment | 43.9 | 48.7 |
Real Estate [Member] | ' | ' |
Premises and Equipment, Cost | 92 | 89.9 |
Premises and Equipment, Carrying Value | 27.2 | 25.9 |
Equipment [Member] | ' | ' |
Premises and Equipment, Cost | 86.7 | 89.5 |
Premises and Equipment, Carrying Value | 16.4 | 22.6 |
Leasehold Improvements [Member] | ' | ' |
Premises and Equipment, Cost | 0.4 | 1.3 |
Premises and Equipment, Carrying Value | $0.30 | $0.20 |
23_Premises_and_Equipment_Deta1
23. Premises and Equipment (Details Narrative) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 |
Premises And Equipment Details Narrative | ' | ' | ' |
Depreciation and amortization expense for premises and equipment | $12 | $12.80 | $11 |
Rental expenses for operating leases | 0.9 | 1.2 | 1.6 |
Future minimum rental payments under non-cancelable operating leases, current | 16.4 | ' | ' |
Future minimum rental payments under non-cancelable operating leases, 2013 | 1.4 | ' | ' |
Future minimum rental payments under non-cancelable operating leases, 2014 | 1.3 | ' | ' |
Future minimum rental payments under non-cancelable operating leases, 2015 | 1.3 | ' | ' |
Future minimum rental payments under non-cancelable operating leases, 2016 | 1.3 | ' | ' |
Future minimum rental payments under non-cancelable operating leases, 2017 | 1.4 | ' | ' |
Future minimum rental payments under non-cancelable operating leases, Thereafter | $9.70 | ' | ' |
24_Contingent_Liabilities_Deta
24. Contingent Liabilities (Details Narrative) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 |
Contingent Liabilities Details Narrative | ' | ' | ' |
Policy liabilities and accruals | $45.30 | $75.10 | ' |
Recoverable from related to paid losses | 0.7 | 2 | ' |
Losses recognized | 9.9 | 18.6 | 3.2 |
Commutations exposure | $30.10 | ' | ' |
25_Other_Commitments_Details_N
25. Other Commitments (Details Narrative) (USD $) | Dec. 31, 2012 |
In Millions, unless otherwise specified | |
Other Commitments Details Narrative | ' |
Unfunded commitments | $207.20 |
Open commitments | $63.60 |
26_Condensed_Financial_Informa2
26. Condensed Financial Information of The Phoenix Companies Inc and Other Supplementary Data (Details) (USD $) | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2011 | Dec. 31, 2010 | Dec. 31, 2009 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2011 | Dec. 31, 2010 | Dec. 31, 2009 |
In Millions, unless otherwise specified | As restated and amended [Member] | As restated and amended [Member] | As restated and amended [Member] | Parent Company [Member] | Parent Company [Member] | Parent Company [Member] | Parent Company [Member] | Parent Company [Member] | ||
As restated and amended [Member] | As restated and amended [Member] | As restated and amended [Member] | ||||||||
ASSETS: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Available-for-sale debt securities, at fair value | $12,656 | $11,797 | $11,797 | ' | ' | $116.30 | ' | $47.20 | ' | ' |
Fair value investments | 201.5 | ' | 184 | ' | ' | 21.9 | ' | 22.2 | ' | ' |
Cash and cash equivalents | 246.4 | 168.2 | 168.2 | 93.7 | 255.8 | 27.2 | 52.5 | 52.5 | 2.1 | 1.6 |
Investments in subsidiaries | ' | ' | ' | ' | ' | 1,029.50 | ' | 1,277.50 | ' | ' |
Advances to subsidiaries | ' | ' | ' | ' | ' | 16.1 | ' | 13.5 | ' | ' |
Deferred income taxes, net | 49.4 | ' | 120.6 | ' | ' | 0.1 | ' | 0.3 | ' | ' |
Other assets | 243.1 | ' | 230.1 | ' | ' | 6.9 | ' | 11.9 | ' | ' |
Total assets | 21,629.80 | ' | 21,488 | ' | ' | 1,218 | ' | 1,425.10 | ' | ' |
Liabilities and Stockholders' Equity | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Indebtedness | 378.8 | 42.7 | 426.9 | ' | ' | 268.6 | ' | 268.6 | ' | ' |
Accrued pension and post-employment benefits (Note 17) | ' | ' | ' | ' | ' | 414.7 | ' | 414.3 | ' | ' |
Other liabilities | 674.6 | ' | 658 | ' | ' | 30.9 | ' | 49.3 | ' | ' |
Total liabilities | 21,119.30 | ' | 20,792.30 | ' | ' | 714.2 | ' | 732.2 | ' | ' |
Total stockholders' equity | 510.5 | ' | 695.7 | ' | ' | 503.8 | ' | 692.9 | ' | ' |
Total liabilities and stockholders' equity | $21,629.80 | ' | $21,488 | ' | ' | $1,218 | ' | $1,425.10 | ' | ' |
26_Condensed_Financial_Informa3
26. Condensed Financial Information of The Phoenix Companies Inc and Other Supplementary Data (Details 1) (USD $) | 12 Months Ended | |||||
In Millions, unless otherwise specified | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 |
As restated and amended [Member] | As restated and amended [Member] | Parent Company [Member] | Parent Company [Member] | Parent Company [Member] | ||
As restated and amended [Member] | As restated and amended [Member] | |||||
REVENUES: | ' | ' | ' | ' | ' | ' |
Equity in undistributed loss of subsidiaries | ' | ' | ' | ($153.80) | ($16.10) | ($9.80) |
Investment income | 829.3 | 822.9 | 840.5 | 1.3 | 2.3 | 1.9 |
Net realized investment gains (losses) | -10.5 | -32.1 | -11.2 | 2 | 3.4 | 3.3 |
Total revenues | 1,789.20 | 1,836.50 | 1,970.30 | -150.5 | -10.4 | -4.6 |
Interest expense | ' | ' | ' | 20.2 | 20.2 | 20.3 |
Other operating expenses | 253.5 | 247.9 | 288.6 | 10.2 | 3.2 | 7.3 |
Total expenses | ' | ' | ' | 30.4 | 23.4 | 27.6 |
Income from continuing operations before income taxes | ' | ' | ' | -180.9 | -33.8 | -32.2 |
Income tax expense (benefit) | -3.7 | 12.3 | -10.3 | -11.9 | -1.5 | 1.2 |
Income (loss) from continuing operations | -152.3 | -9.6 | -31.3 | -169 | -32.3 | -33.4 |
Loss from discontinued operations, net of income taxes | -15.6 | -21.6 | -3.6 | 0.5 | 1.6 | -1 |
Net loss | ($167.90) | ($31.20) | ($34.90) | ($168.50) | ($30.70) | ($34.40) |
26_Condensed_Financial_Informa4
26. Condensed Financial Information of The Phoenix Companies Inc and Other Supplementary Data (Details 2) (USD $) | 12 Months Ended | |||||
In Millions, unless otherwise specified | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 |
As restated and amended [Member] | As restated and amended [Member] | Parent Company [Member] | Parent Company [Member] | Parent Company [Member] | ||
As restated and amended [Member] | As restated and amended [Member] | |||||
OPERATING ACTIVITIES: | ' | ' | ' | ' | ' | ' |
Interest income received | ' | ' | ' | $1.20 | $0.90 | $1.90 |
Interest paid | -30.4 | -31.4 | -31.4 | -20 | -20.1 | -20.1 |
Taxes paid | -18.4 | -6.2 | -0.1 | -15.1 | ' | -0.4 |
Taxes received | ' | ' | ' | 3.4 | 0.6 | 1.6 |
Payments to/from subsidiaries | ' | ' | ' | 0.8 | -7.9 | 2.1 |
Other operating activities, net | -51.1 | -42.5 | 13.7 | -0.6 | -5.5 | -1.3 |
Cash used for operating activities | -520.8 | -437.8 | -624.5 | -30.3 | -21 | -16.2 |
Purchases of Available-for-sale debt securities | -3,610.90 | -3,048.20 | -2,686.20 | -269.8 | -109.5 | -72.1 |
Sales, repayments and maturities of Available-for-sale debt securities | 3,263.60 | 2,329.20 | 2,701.20 | 201.4 | 118.5 | 81 |
Loan to subsidiary | ' | ' | ' | ' | -2.5 | ' |
Subsidiary loan payments received | ' | ' | ' | 4 | ' | ' |
Proceeds from the sale of subsidiary | ' | ' | ' | 1 | 1 | 8.3 |
Dividends received from subsidiaries | ' | ' | ' | 71.8 | 64.8 | 25 |
Capital contributions to subsidiaries | ' | ' | ' | ' | -0.2 | -25.7 |
Capital distributions from subsidiaries | ' | ' | ' | ' | ' | 0.2 |
Cash provided by (used for) investing activities | -203.8 | -566.8 | 136.2 | 8.4 | 72.1 | 16.7 |
Indebtedness repayments | ' | ' | ' | ' | -0.7 | ' |
Treasury stock acquired | ' | ' | ' | -3.4 | ' | ' |
Cash used for financing activities | 800.1 | 1,077.80 | 329.3 | -3.4 | -0.7 | ' |
Change in cash and cash equivalents | 75.5 | 73.2 | -159 | -25.3 | 50.4 | 0.5 |
Cash and cash equivalents, beginning of period | 168.2 | 93.7 | 255.8 | 52.5 | 2.1 | 1.6 |
Cash and cash equivalents, end of period | $246.40 | $168.20 | $93.70 | $27.20 | $52.50 | $2.10 |
26_Condensed_Financial_Informa5
26. Condensed Financial Information of The Phoenix Companies Inc and Other Supplementary Data (Details Narrative) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 |
Condensed Financial Information Of Phoenix Companies Inc And Other Supplementary Data Details Narrative | ' | ' | ' |
Unearned premiums included in policy liabilities and accruals | $102.20 | $111.20 | $121.90 |
Non insurance segment operating expenses | $20.40 | $19.50 | $25 |