Exhibit 99.1
ING U.S.Quarterly Investor Supplement
D e c e m b e r 3 1 , 2 0 1 2
R e v i s e d a s o f M a y 3 0 , 2 0 1 3
Certain information contained in this Quarterly Investor Supplement has been revised as of May 30, 2013, from the version originally published on May 23, 2013. Revised information is identified on pages 6, 16, and 44 of this document.
All financial information is unaudited.
ING U.S.
Table of Contents
Consolidated
Explanatory Note on Non-GAAP Financial Information 3-4
Organizational Chart 5
Key Metrics 6
Return on Capital 7
Baseline Operating Earnings Before Interest, After Income Taxes 8
Consolidated Balance Sheet 9
Consolidated Statement of Operations 10
Ongoing Business Sources of Operating Earnings 11
Consolidated Earnings Before Income Taxes 12
Operating Earnings by Segment 13
Operating Revenues and Operating Earnings by Segment 14
Baseline Operating Earnings by Segment 15
DAC/VOBA Rollforward 16
Capital Structure 17
AUM/AUA 18
Retirement
Sources of Operating Earnings 20
Operating Earnings 21
Account Value 22
Account Value Rollforward 23
Annuity
Sources of Operating Earnings 25
Operating Earnings 26
Annuities Other Metrics 27
AUM Rollforward 28
Investment Management
Sources of Operating Earnings 30
Operating Earnings 31
Key Metrics 32
Account Value Rollforward by Source 33
Account Value by Asset Type 34
Individual Life
Sources of Operating Earnings 36
Operating Earnings 37
Key Metrics 38
Employee Benefits
Sources of Operating Earnings 40
Operating Earnings 41
Key Metrics 42
Corporate
Operating Income (Loss) 44
Closed Blocks
Operating Earnings 46
Variable Annuity Income (Loss) Before Taxes 47
Variable Annuity and Death Benefits 48
Account Value and Other Metrics 49
General Account
Portfolio Composition 51
Portfolio Results 52
Alternative Investment Income 53
Unrealized Gains (Losses) 54
Asset Backed Securities 55
RMBS Securities Summary 56
CMBS and Other Asset-Backed Securities Summary 57
Mortgage Loans on Real Estate 58
US and Foreign Corporate Securities 59
Exposure to European Debt- Fixed Maturities and Equity Securities 60
Additional Information
Adjustments to Operating Earnings by Segment 62
Average Capital and Financial Leverage 63
Operating Revenue by Segment 64
Ongoing Business Non-GAAP to GAAP Reconciliation 65-67
Fixed Maturity Securities—Hannover Life Re Modco Reinsurance 68
Financial Ratings 69
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ING U.S
Explanatory Note on Non-GAAP Financial Information
Operating earnings before income taxes is an internal measure we use to evaluate segment performance. Operating earnings before income taxes does not replace net income (loss) as the GAAP measure of the consolidated results of operations and consists of operating revenues less operating benefits and expenses. Each segment’s operating earnings before income taxes is calculated by adjusting income (loss) before income taxes for the following items:
• Net investment gains (losses), net of related amortization of DAC, VOBA, sales inducements and unearned revenue. Net investment gains (losses) include gains (losses) on the sale of securities, impairments, changes in the fair value of investments using the fair value option (“FVO”) unrelated to the implied loan-backed security income recognition for certain mortgage-backed obligations and changes in the fair value of derivative instruments, excluding realized gains (losses) associated with swap settlements and accrued interest;
• Net guaranteed benefit hedging gains (losses), which include changes in the fair value of derivatives related to guaranteed benefits, net of related reserve increases (decreases) and net of related amortization of DAC, VOBA and sales inducements, less the estimated cost of these benefits. The estimated cost, which is reflected in operating results, reflects the expected cost of these benefits if markets perform in line with our long-term expectations and includes the cost of hedging. All other derivative and reserve changes related to guaranteed benefits are excluded from operating results, including the impacts related to changes in our nonperformance spread;
• Income (loss) related to business exited through reinsurance or divestment;
• Income (loss) attributable to noncontrolling interests;
• Income (loss) related to early extinguishment of debt;
• Impairment of goodwill, value of management contract rights and value of customer relationships acquired;
• Immediate recognition of net actuarial gains (losses) related to our pension and other post-employment benefit obligations and gains (losses) from plan amendments and curtailments; and
• Other items, including restructuring expenses (severance, lease write-offs, etc.), integration expenses related to our acquisition of CitiStreet and certain third-party expenses related to the anticipated divestment of the Company by ING Group.
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ING U.S
Explanatory Note on Non-GAAP Financial Information
Adjusted operating earnings is also an internal measure we use to evaluate segment performance. This measure excludes from operating earnings the following items: (1) DAC/VOBA and other intangibles unlocking and (2) investment portfolio restructurings implemented in 2012. DAC/VOBA and other intangibles unlocking can be volatile, so excluding the effect of this can improve period to period comparability. The investment portfolio restructurings in 2012 reduced the run-rate level of investment income, and we believe that such effects are not reflective of the performance of our Ongoing Business.
In addition to book value per share including accumulate other comprehensive income (AOCI), we look at book value per share excluding AOCI. Included in AOCI are investment portfolio unrealized gains or losses. In the ordinary course of business we do not plan to sell most investments for the sole purpose of realizing gains or losses, so book value per share excluding AOCI provides a metric consistent with that view.
Our Closed Block Variable Annuity segment is managed to focus on protecting regulatory and rating agency capital rather than achieving operating metrics and, therefore, its results of operations are not reflected within operating earnings before income taxes. When we present the adjustments to Income (loss) before income taxes on a consolidated basis, each adjustment excludes the relative portions attributable to our Closed Block Variable Annuity segment.
The most directly comparable GAAP measure to operating earnings before income taxes is net income (loss) before income taxes. For a reconciliation of operating earnings before income taxes to income (loss) before income taxes, refer to the “Consolidated Earnings Before Income Taxes” page in this document.
Operating revenues is a measure of our segment revenues. We calculate operating revenues by adjusting each segment’s revenue for the following items:
• Net realized investment gains (losses) and related charges and adjustments, which include gains (losses) on the sale of securities, impairments, changes in the fair value of investments using the FVO unrelated to the implied loan-backed security income recognition for certain mortgage-backed obligations and changes in the fair value of derivative instruments, excluding realized gains (losses) associated with swap settlements and accrued interest. These items are net of related amortization of unearned revenue;
• Gain (loss) on change in fair value of derivatives related to guaranteed benefits, which include changes in the fair value of derivatives related to guaranteed benefits, less the estimated cost of these benefits. The estimated cost, which is reflected in operating results, reflects the expected cost of these benefits if markets perform in line with our long-term expectations and includes the cost of hedging. All other derivative and reserve changes related to guaranteed benefits are excluded from operating revenues, including the impacts related to changes in our nonperformance spread;
Revenues related to businesses exited through reinsurance or divestment;
Revenues attributable to noncontrolling interests;
Other adjustments to operating revenues primarily reflect fee income earned by our broker dealers for sales of non-proprietary products, which are reflected net of commission expense in our
segments’ operating revenues.
Operating revenues also excludes the revenues of our Closed Block Variable Annuity segment, since this segment is managed to focus on protecting regulatory and rating agency capital rather than achieving operating metrics. When we present the adjustments to Total revenues on a consolidated basis, each adjustment excludes the relative portions attributable to our Closed Block Variable Annuity segment.
The most directly comparable GAAP measure to operating revenues is total revenues. For a reconciliation of operating revenue to total revenues, please refer to the “Operating Revenues by Segment” page in this document.
We analyze our Ongoing Business performance based on the sources of earnings. We believe this supplemental information is useful in order to gain a better understanding of our operating earnings (loss) before income taxes for the following reasons: (1) we analyze our business using this information and (2) this presentation can be helpful for investors to understand the main drivers of operating earnings (loss) before income taxes of our ongoing businesses. The sources of earnings are defined as such:
• Investment spread and other investment income consists of net investment income and net realized investment gains (losses) associated with swap settlements and accrued interest, less interest credited to policyholder reserves.
Fee based margin consists primarily of fees earned on AUM, AUA, and transaction based recordkeeping fees.
Net underwriting gain (loss) and other revenue contains the following: the difference between fees charged for insurance risks and incurred benefits, including mortality, morbidity, and surrender
results, contractual charges for universal life and annuity contracts, the change in the unearned revenue reserve for universal life contracts, and that portion of traditional life insurance premiums intended to cover expenses and profits. Certain contract charges for universal life insurance are not recognized in income immediately, but are deferred as unearned revenues and are amortized into income in a manner similar to the amortization of DAC.
Administrative expenses are general expenses, net of amounts capitalized as acquisition expenses and exclude commission expenses and fees on letters of credit.
Trail commissions are commissions paid that are not deferred and thus recorded directly to expense.
For a detail explanation of DAC/VOBA and other intangibles amortization/unlocking see “Unlocking of DAC/VOBA and other Contract Owner/Policyholder Intangibles” in our SEC filings.
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ING U.S. Key Metrics
Three Months Ended
12/31/12 9/30/12 6/30/12 3/31/12 12/31/11 9/30/11 6/30/11 3/31/11
(in millions USD, except for per share data)
Operating earnings before income taxes - Ongoing Business 228.9 306.4 191.7 263.8 342.6 307.2 350.7 279.1
Operating earnings before income taxes - ING U.S. 209.1 270.6 198.8 239.8 261.7 307.4 300.2 250.3
Net income (loss) (106.9) 386.8 852.1 (520.8) (1,722.7) 1,032.6 549.5 243.4
Net income (loss) attributable to noncontrolling interest (84.2) 20.3 217.7 (15.6) 67.9 R (8.7) R 183.0 R (51.3) R
Net income (loss) available to ING U.S. Inc.’s common shareholder (22.7) 366.5 634.4 (505.2) (1,790.6) R 1,041.3 R 366.5 R 294.7 R
Ongoing Business operating return on equity (1) N/A N/A N/A N/A N/A N/A N/A N/A
Debt to Capital (Excluding AOCI) 27.3% 27.6% 28.6% 30.4% 29.3% 33.7% 35.6% 55.7%
Per Share Data:
Operating earnings per share 0.59 0.76 0.56 0.68 0.74 0.87 0.85 0.71
Net income (loss) per share (0.10) 1.59 2.76 (2.20) (7.79) R 4.53 R 1.59 R 1.28 R
Total ING U.S. Inc. Shareholder’s Equity - Excluding AOCI 10,164.2 10,209.0 9,820.3 9,242.9 9,758.9 R 10,101.1 R 9,126.1 R 6,101.6 R
Book value per share (Excluding AOCI) 44.19 44.39 42.70 40.19 42.43 R 43.92 R 39.68 R 26.53 R
Diluted weighted average shares outstanding (in millions) 230.0 230.0 230.0 230.0 230.0 230.0 230.0 230.0
R Revised as of May 30, 2013, from version originally published on May 23, 2013.
(1) Assumes debt-to-capital ratio of approximately 25% in each year and a weighted average pre-tax interest rate of approximately 5.5% on financial leverage
ING U.S.
Return on Capital
Year Ended December 31, 2012
Retirement Solutions Investment Insurance Solutions Ongoing Closed Block Corporate and Consolidated
Retirement Annuities Management Individual Life Employee Business Variable Annuity Other Closed
Benefits Blocks
(in millions USD, unless otherwise indicated)
Beginning Capital 4,333 2,471 275 2,545 413 10,037 3,452 311 13,800
Ending Capital 4,284 1,949 303 2,858 429 9,823 3,262 888 13,973
Average Capital (1) 4,308 2,210 289 2,702 421 9,930 3,357 599 13,886
Adjusted operating earnings before interest and after
income taxes 308.1 129.7 86.0 115.7 71.0 710.5 — 39.6 750.1
Operating Return on Capital 7.2% 5.9% 29.8% 4.3% 16.9% 7.2% —6.6% 5.4%
Ongoing Business Operating Return on Equity (2) 8.3%
Year Ended December 31, 2011
Retirement Solutions Investment Insurance Solutions Ongoing Closed Block Corporate and Consolidated
Retirement Annuities Management Individual Life Employee Business Variable Annuity Other Closed
Benefits Blocks
(in millions USD, unless otherwise indicated)
Beginning Capital 4,087 2,288 336 2,172 408 9,291 3,010 1,076 13,377
Ending Capital 4,333 2,471 275 2,545 413 10,037 3,452 311 13,800
Average Capital (1) 4,210 2,380 306 2,359 410 9,665 3,231 693 13,589
Adjusted operating earnings before interest and after
income taxes 258.5 79.1 56.9 185.7 54.1 634.3 — 61.5 695.8
Operating Return on Capital 6.1% 3.3% 18.6% 7.9% 13.2% 6.6% —8.9% 5.1%
Ongoing Business Operating Return on Equity (2) 7.6%
(1) Total Company average capital is allocated to each of our segments in proportion to each segment’s target statutory
capital, plus an allocation of the differences between statutory capital and total ING U.S., Inc. shareholder’s equity on a
GAAP basis (excluding AOCI), based on each segment’s portion of these differences. Statutory surplus in excess of
target statutory capital and certain corporate assets and liabilities, such as certain deferred tax assets and liabilities for
unfunded pension plans, are allocated to the Corporate segment.
(2) Assume financial leverage-to-capital ratio of approximately 25% in each year and a weighted average pre-tax interest rate of approximately 5.5% on financial leverage.
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ING U.S.
Adjusted Operating Earnings Before Interest, After Income Taxes
Year Ended December 31, 2012
Retirement Solutions Investment Insurance Solutions Ongoing Business Closed Block Corporate and Other Consolidated
Retirement Annuities Management Individual Life Employee Benefits Variable Annuity Closed Blocks
(in millions USD, unless otherwise indicated)
Operating earnings before income taxes 448.6 102.2 134.5 196.2 109.4 990.9 — (72.6) 918.3
Less:
Interest expense — — — — — — — (127.8) (127.8)
DAC/VOBA and other intangibles unlocking 5.8 (86.2) — 3.4 — (77.0) — — (77.0)
Impact of investment portfolio restructuring (1) (31.2) (11.2) 2.2 14.8 0.1 (25.3) — (5.8) (31.1)
Adjusted operating earnings before interest 474.0 199.6 132.3 178.0 109.3 1,093.2 — 61.0 1,154.2
Income tax expense (2) 165.9 69.9 46.3 62.3 38.3 382.7 — 21.4 404.1
Adjusted operating earnings before interest and
after income taxes 308.1 129.7 86.0 115.7 71.0 710.5 — 39.6 750.1
Year Ended December 31, 2011
Retirement Solutions Investment Insurance Solutions Ongoing Business Closed Block Corporate and Other Consolidated
Retirement Annuities Management Individual Life Employee Benefits Variable Annuity Closed Blocks
(in millions USD, unless otherwise indicated)
Operating earnings before income taxes 441.9 387.6 87.5 279.3 83.3 1,279.6 -(160.0) 1,119.6
Less:
Interest expense — — — -(185.7)(185.7)
DAC/VOBA and other intangibles unlocking 44.2 266.0 -(6.4)—303.8 — 303.8
Reserve increase related to use of SSDMF (3) — — — -(68.9)(68.9)
Adjusted operating earnings before interest 397.7 121.6 87.5 285.7 83.3 975.8—94.6 1,070.4
Income tax expense (2) 139.2 42.5 30.6 100.0 29.2 341.5—33.1 374.6
Adjusted operating earnings before interest and
after income taxes 258.5 79.1 56.9 185.7 54.1 634.3—61.5 695.8
(1) Includes the net loss included in operating earnings from the sale of certain alternative investments
and investment income associated with assets disposed of during the portfolio restructuring effected
during 2012.
Based on an assumed effective tax rate of 35%.
Adjustment to exclude the reserves related to the Social Security Death Master File, an item that we believe not reflective of performance in the period.
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ING U.S.
Consolidated Balance Sheet
Balances as of
(in millions USD) 12/31/12 9/30/12 6/30/12 3/31/12 12/31/11 9/30/11 6/30/11 3/31/11
Assets
Total investments 95,487.6 95,194.7 95,316.1 90,067.5 92,819.2 91,863.9 86,977.0 86,872.4 Cash and cash equivalents 1,786.8 2,078.7 1,815.3 1,277.0 638.0 1,260.3 1,293.0 764.2 Assets held in separate accounts 97,667.4 96,312.2 92,965.6 97,050.1 88,714.5 84,633.1 97,145.0 98,749.2 Reinsurance recoverable 7,379.3 7,565.9 7,602.7 7,724.8 7,723.4 7,608.2 7,657.8 7,717.9 Short term investments under securities loan agreement and accrued investment income 1,527.5 1,312.8 1,426.0 1,239.5 1,957.6 1,739.2 1,687.9 2,192.6 Deferred policy acquisition costs, Value of business acquired 3,656.3 3,623.8 3,938.2 4,369.5 4,352.3 4,405.9 4,971.4 5,099.9 Goodwill and other intangible assets 348.5 358.9 360.4 372.0 382.5 395.3 411.2 422.2 Other assets (1) 1,575.2 1,582.6 1,704.0 2,084.6 1,809.6 1,753.1 1,583.0 1,554.4 Assets related to consolidated investment entities 6,965.6 6,181.0 6,036.4 5,691.2 5,175.7 5,277.6 4,903.7 4,337.1
Total Assets 216,394.2 214,210.6 211,164.7 209,876.2 203,572.8 198,936.6 206,630.0 207,709.9
Liabilities
Future policy benefits and contract owner account balances 86,055.7 86,294.8 87,522.5 87,411.0 88,358.4 86,644.0 84,164.5 84,196.9 Liabilities related to separate accounts 97,667.4 96,312.2 92,965.6 97,050.1 88,714.5 84,633.1 97,145.0 98,749.2 Funds held under reinsurance agreements 1,236.6 1,265.3 1,256.8 1,240.5 1,307.6 1,318.8 1,275.5 1,303.4 Payables under securities loan agreements, including collateral held 1,509.8 1,299.8 1,736.7 832.8 1,781.8 1,222.5 805.0 972.1 Short-term debt 1,064.6 774.9 889.6 1,180.0 1,054.6 3,138.2 3,819.6 5,536.0 Long-term debt 3,171.1 3,642.7 3,543.6 1,343.3 1,343.1 1,284.8 1,784.5 2,784.3 Other liabilities (2) 5,506.0 5,572.0 5,413.3 4,664.3 4,830.1 4,343.4 3,727.2 3,889.9 Liabilities related to consolidated investment entities 4,121.8 3,097.4 2,753.7 2,691.4 2,256.6 2,299.9 1,942.3 1,886.5
Total Liabilities 200,333.0 198,259.1 196,081.8 196,413.4 189,646.7 184,884.7 194,663.6 199,318.3
Shareholder’s Equity
Common stock 2.3 2.3 2.3 2.3 2.3 2.3 2.3 2.3 Additional paid-in capital 22,917.6 22,897.7 22,886.3 22,871.1 22,865.2 21,555.1 21,541.8 18,829.4 Retained earnings (deficit) (12,755.7) (12,691.0) (13,068.3) (13,630.5) (13,108.6) (11,456.3) (12,418.0) (12,730.1)
Total ING U.S. Inc. Shareholder’s Equity—Excluding AOCI 10,164.2 10,209.0 9,820.3 9,242.9 9,758.9 10,101.1 9,126.1 6,101.6
Accumulated other comprehensive income 3,710.7 3,701.5 3,021.5 2,587.0 2,595.0 2,285.3 1,243.4 1,050.4
Total ING U.S. Inc. Shareholder’s Equity 13,874.9 13,910.5 12,841.8 11,829.9 12,353.9 12,386.4 10,369.5 7,152.0
Noncontrolling interest 2,186.3 2,041.0 2,241.1 1,632.9 1,572.2 1,665.5 1,596.9
1,239.6 Total Shareholder’s Equity 16,061.2 15,951.5 15,082.9 13,462.8 13,926.1 14,051.9 11,966.4 8,391.6
Total Liabilities and Shareholder Equity 216,394.2 214,210.6 211,164.7 209,876.2 203,572.8 198,936.6 206,630.0 207,709.9
Includes Other assets and Sales inducements to contract holders
Includes Other liabilities, Derivatives, Pension and other post-employment
provisions, Current income taxes, and Deferred income taxes
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ING U.S.
Consolidated Statement of Operations
Three Months Ended
(in millions USD) 12/31/12 9/30/12 6/30/12 3/31/12 12/31/11 9/30/11 6/30/11 3/31/11
Revenues
Net investment income 1,055.4 1,226.2 1,138.9 1,277.4 1,212.4 1,222.4 1,249.1 1,284.9
Fee income 890.6 872.9 862.9 889.0 882.5 907.6 911.8 901.6
Premiums 471.2 453.5 474.8 461.6 449.4 438.6 438.9 443.1
Net realized gains (losses)(384.2)(132.4) 485.7(1,249.9)(1,839.4) 858.9(84.7)(466.2)
Income (loss) related to consolidated investment entities 79.0 46.9 299.1 18.2 47.0 92.8 369.9(30.1)
Other revenues 91.8 97.2 100.5 89.0 108.7 102.3 104.4 112.9
Total revenues 2,203.8 2,564.3 3,361.9 1,485.3 860.6 3,622.6 2,989.4 2,246.2
Benefits and expenses
Interest credited and other benefits to contract owners/policyholders(1,225.3)(1,106.5)(1,511.6)(1,018.2)(1,344.8)(1,862.9)(1,319.1)(1,215.2)
Operating expenses(824.1)(858.9)(712.6)(759.4)(898.6)(714.6)(736.5)(681.1)
Net amortization of DAC/VOBA(182.4)(150.0)(216.2)(173.7) 17.6(112.9)(161.4)(130.3)
Interest expense(44.7)(46.6)(38.1)(24.3)(30.5)(29.7)(38.9)(40.2)
Operating expenses related to consolidated investment entities(35.4)(28.4)(30.3)(22.6)(36.9)(47.3)(40.8)(16.9)
Total benefits and expenses(2,311.9)(2,190.4)(2,508.8)(1,998.2)(2,293.2)(2,767.4)(2,296.7)(2,083.7)
Income (loss) before income taxes(108.1) 373.9 853.1(512.9)(1,432.6) 855.2 692.7 162.5
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ING U.S.
Ongoing Business Sources of Operating Earnings
Three Months Ended
(in millions USD) 12/31/12 9/30/12 6/30/12 3/31/12 12/31/11 9/30/11 6/30/11 3/31/11
Sources of operating earnings before income
taxes:
Investment spread and other investment income 342.4 371.8 329.0 385.8 212.6 359.5 426.8 342.7
Fee based margin 350.0 336.0 320.8 330.7 314.9 322.8 330.3 330.0
Net underwriting gain (loss) and other revenue 222.1 214.1 178.6 180.0 196.4 204.0 225.7 199.3
Administrative expenses(422.0)(410.7)(414.7)(421.8)(419.9)(414.3)(432.1)(425.6)
Trail commissions(63.3)(61.2)(59.5)(65.0)(59.3)(54.9)(55.6)(62.8)
DAC/VOBA and other intangibles amortization,
excluding unlocking(151.6)(150.0)(148.7)(124.9)(89.3)(164.9)(178.1)(132.4)
DAC/VOBA and other intangibles unlocking(48.7) 6.4(13.8)(20.9) 187.2 55.0 33.7 27.9
Operating earnings before income taxes 228.9 306.4 191.7 263.8 342.6 307.2 350.7 279.1
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Adjusted Operating Earnings by Segment
(in millions USD) Three Months Ended
12/31/12 9/30/12 6/30/12 3/31/12 12/31/11 9/30/11 6/30/11 3/31/11
Operating Earnings
Retirement 108.2 145.4 71.1 123.9 70.0 97.8 148.6 125.5
Annuities 6.3 32.6 26.9 36.4 199.8 84.5 63.9 39.4
Total Retirement Solutions 114.5 178.0 98.0 160.3 269.8 182.3 212.5 164.9
Investment Management 31.2 39.1 31.2 33.0 13.1 22.7 26.4 25.3
Individual Life 54.6 53.2 33.4 55.0 38.7 84.1 80.9 75.6
Employee Benefits 28.6 36.1 29.1 15.6 21.0 18.1 30.9 13.3
Total Insurance Solutions 83.2 89.3 62.5 70.6 59.7 102.2 111.8 88.9
Ongoing Business 228.9 306.4 191.7 263.9 342.6 307.2 350.7 279.1
Corporate(43.6)(57.6)(32.7)(48.4)(96.0)(20.8)(69.1)(44.3)
Total Closed Blocks 23.8 21.8 39.8 24.3 15.1 21.0 18.5 15.5
Total operating earnings before income taxe 209.1 270.6 198.8 239.8 261.7 307.4 300.1 250.3
Adjustments to operating earning
Retirement(8.9) 14.9(55.1) 23.6 28.5(17.2) 15.8 17.1
Annuities(44.4)(13.2)(27.1)(12.7) 177.9 53.3 22.2 12.7
Total Retirement Solutions(53.3) 1.7(82.2) 10.9 206.4 36.1 38.0 29.8
Investment Management — 2.2 — — -
Individual Life 4.6 8.6(3.3) 8.3(18.9) 18.7(4.3)(1.9)
Employee Benefits—0.6(3.8) 3.3 — —
Total Insurance Solutions 4.6 9.2(7.1) 11.6(18.9) 18.7(4.3)(1.9)
Ongoing Business(48.7) 10.9(87.1) 22.5 187.5 54.8 33.7 27.9
Corporate(39.2)(39.8)(32.1)(16.7)(90.1)(24.6)(68.9)(71.0)
Total Closed Blocks —(10.1) 4.3 — —
Total adjustments to operating earning(87.9)(28.9)(129.3) 10.1 97.4 30.2(35.2)(43.1)
Adjusted Operating Earnings
Retirement 117.1 130.5 126.2 100.3 41.5 115.0 132.8 108.4
Annuities 50.7 45.8 54.0 49.1 21.9 31.2 41.7 26.7
Total Retirement Solutions 167.8 176.3 180.2 149.4 63.4 146.2 174.5 135.1
Investment Management 31.2 39.1 29.0 33.0 13.1 22.7 26.4 25.3
Individual Life 50.0 44.6 36.7 46.7 57.6 65.4 85.2 77.5
Employee Benefits 28.6 35.5 32.9 12.3 21.0 18.1 30.9 13.3
Total Insurance Solutions 78.6 80.1 69.6 59.0 78.6 83.5 116.1 90.8
Ongoing Business 277.6 295.5 278.8 241.4 155.1 252.4 317.0 251.2
Corporate(4.4)(17.8)(0.6)(31.7)(5.9) 3.8(0.2) 26.7
Total Closed Blocks 23.8 21.8 49.9 20.0 15.1 21.0 18.5 15.5
Total adjusted operating earnings before interest and income taxe 297.0 299.5 328.1 229.7 164.3 277.2 335.3 293.4
ING U.S.
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ING U.S.Quarterly Investor Supplement
D e c e m b e r 3 1 , 2 0 1 2
R e v i s e d a s o f M a y 3 0 , 2 0 1 3
Certain information contained in this Quarterly Investor Supplement has been revised as of May 30, 2013, from the version originally published on May 23, 2013. Revised information is identified on pages 6, 16, and 44 of this document.
All financial information is unaudited.
ING U.S.
DAC/VOBA Segment Trends
Three Months Ended
(in millions USD) 12/31/12 9/30/12 6/30/12 3/31/12 12/31/11 9/30/11 6/30/11 3/31/11
Retirement
Balance as of beginning-of-period 667.6 849.5 949.6 987.2 1,061.5 1,280.2 1,379.0 1,378.7
Deferrals of commissions and expenses 34.6 32.8 30.1 30.5 36.3 33.2 30.0 28.0
Amortization:
Operating (35.7) (43.1) (44.3) (37.6) (29.0) (33.5) (54.0) (38.8)
Non-Operating (7.6) (7.3) (33.3) (36.9) (10.1) 14.9 (30.7) (23.2)
Unlocking:
Operating (8.9) 15.9 (5.1) 3.8 28.5 (17.2) 15.8 17.1
Non-Operating 19.0 24.2 16.1 20.6 (14.3) 14.3 5.9 4.8
Change in unrealized gains/losses 43.4 (204.4) (63.7) (18.0) (85.7) (230.4) (65.8) 12.4
Balance as of End-of-Period 712.4 667.6 849.5 949.6 987.2 1,061.5 1,280.2 1,379.0
Annuities
Balance as of beginning-of-period 295.8 418.5 496.9 606.6 337.8 301.8 319.0 307.0
Deferrals of commissions and expenses 22.2 24.1 27.0 23.7 24.5 27.0 37.0 33.3
Amortization:
Operating (43.9) (31.7) (42.2) (21.4) (45.3) (48.6) (50.0) (35.2)
Non-Operating 4.5 (31.4) (20.4) (7.7) 24.1 8.7 8.5 6.6
Unlocking:
Operating (44.4) (12.9) (8.6) (20.3) 177.9 53.3 22.2 12.7
Non-Operating 1.8 6.7 4.3 (1.4) 7.2 5.1 6.0 1.8
Change in unrealized gains/losses 24.7 (77.5) (38.6) (82.5) 80.4 (9.5) (40.8) (7.3)
Balance as of End-of-Period 260.7 295.8 418.5 496.9 606.6 337.8 301.8 319.0
Individual Life
Balance as of beginning-of-period 2,067.4 2,088.1 2,240.7 2,067.8 2,330.4 2,695.7 2,694.5 2,633.6
Deferrals of commissions and expenses 69.6 81.4 98.5 95.5 96.3 81.2 95.9 90.0
Amortization:
Operating (57.2) (60.2) (47.4) (47.6) (29.0) R (99.1) R (63.7) R (46.5) R
Non-Operating (0.6) (65.0) (11.4) (2.2) (0.2) (10.0) (9.4) (0.7)
Unlocking:
Operating 9.8 43.5 (0.3) (3.0) (88.0) 19.5 11.2 R (3.5)
Non-Operating (0.3) 30.3 1.9 (1.6) (12.9) 4.1 1.0 (1.3)
Change in unrealized gains/losses 38.8 (50.6) (193.9) 131.8 (228.8) R (360.8) R (33.9) R 23.0 R
Balance as of End-of-Period 2,127.6 2,067.4 2,088.1 2,240.7 2,067.8 2,330.4 2,695.7 2,694.5
Other (1)
Balance as of beginning-of-period 100.6 102.4 106.4 104.3 98.6 97.6 96.3 93.8
Deferrals of commissions and expenses 5.3 5.2 6.0 5.2 4.7 R 5.8 R 6.0 R 6.4 R
Amortization:
Operating (3.4) (5.8) (8.7) (2.7) 3.2 R (2.5) R (4.8) R (4.5) R
Non-Operating - - - - - - - -
Unlocking:
Operating - - - - - - - -
Non-Operating - - - - - - - -
Change in unrealized gains/losses - (1.2) (1.3) (0.4) (2.2) R (2.4) R - R 0.6 R
Balance as of End-of-Period 102.6 100.6 102.4 106.4 104.3 98.5 97.5 96.3
Closed Block Variable Annuity
Balance as of beginning-of-period 492.3 479.8 575.8 586.4 577.7 596.1 611.2 625.3
Deferrals of commissions and expenses 4.0 3.3 4.2 4.3 3.3 3.5 4.5 5.3
Amortization:
Operating - - - - - - - -
Non-Operating (14.8) (15.4) (14.7) (15.2) (18.7) R (18.5) R (19.7) R (19.6)
Unlocking:
Operating - - - - - - - -
Non-Operating 0.2 2.9 (1.6) 0.2 24.2 (3.4) 0.2 0.2
Change in unrealized gains/losses (28.7) 21.7 (83.8) - - R - R - R -
Balance as of End-of-Period 453.0 492.3 479.8 575.8 586.4 577.7 596.1 611.2
Total US
Balance as of beginning-of-period 3,623.8 3,938.2 4,369.5 4,352.3 4,405.9 4,971.4 5,099.9 5,038.4
Deferrals of commissions and expenses 135.8 146.8 165.8 159.2 165.1 R 150.7 R 173.4 R 163.0 R
Amortization:
Operating (140.2) (140.8) (142.6) (109.3) (100.1) R (183.7) R (172.5) R (125.0) R
Non-Operating (18.5) (119.1) (79.8) (62.0) (4.9) R (4.9) R (51.3) R (36.9)
Unlocking:
Operating (43.5) 46.5 (14.0) (19.5) 118.4 55.6 49.2 R 26.3
Non-Operating 20.7 64.1 20.7 17.8 4.2 20.1 13.1 5.5
Change in unrealized gains/losses 78.2 (311.9) (381.3) 31.0 (236.3) R (603.1) R (140.5) R 28.7 R
Balance as of End-of-Period 3,656.3 3,623.8 3,938.2 4,369.5 4,352.3 4,405.9 4,971.4 5,099.9
R Revised as of May 30, 2013, from version originally published on May 23, 2013.
(1) Employee Benefits, Asset Management, Other Closed Blocks
Page 16 of 69
ING U.S.
Consolidated Capital Structure
Balances as of
(in millions USD) 12/31/12 9/30/12 6/30/12 3/31/12 12/31/11 9/30/11 6/30/11 3/31/11
Financial Debt
Commercial paper 192.0 299.2 589.6 680.0 554.6 785.5 1,334.2 1,255.2
Senior bonds 1,500.3 1,500.1 650.3 650.0 649.9 649.5 649.2 649.0
Loans from ING Verzekeringen N.V. 500.0 500.0 500.0 500.0 500.0 1,783.0 1,283.0 3,978.0
Loans from consolidated subs 261.1 164.0 189.0 2,208.3 2,331.9 1,911.4 1,779.0 1,798.1
Bank revolver—0.0 500.0 — — -
Bank term loan 1,350.0 1,425.0 1,500.0 — — -
Other debt 4.9 4.9 4.9 4.9 4.9 4.9 4.9 4.9
Total Debt 3,808.3 3,893.2 3,933.8 4,043.2 4,041.3 5,134.3 5,050.3 7,685.2
Equity
Total common equity 10,164.2 10,209.0 9,820.3 9,242.9 9,758.9 10,101.1 9,126.1 6,101.6
Accumulated other comprehensive income (AOCI) 3,710.7 3,701.5 3,021.5 2,587.0 2,595.0 2,285.3 1,243.4 1,050.4
Total ING U.S. Inc. Shareholder’s Equity 13,874.9 13,910.5 12,841.8 11,829.9 12,353.9 12,386.4 10,369.5 7,152.0
Total Equity (Excluding AOCI) 10,164.2 10,209.0 9,820.3 9,242.9 9,758.9 10,101.1 9,126.1 6,101.6
Capital
Total Capitalization 17,683.2 17,803.7 16,775.6 15,873.1 16,395.2 17,520.7 15,419.8 14,837.2
Total Capitalization (Excluding AOCI) 13,972.5 14,102.2 13,754.1 13,286.1 13,800.2 15,235.4 14,176.4 13,786.8
Debt to Capital
Debt to Capital 21.5% 21.9% 23.4% 25.5% 24.6% 29.3% 32.8% 51.8%
Debt to Capital (Excluding AOCI) 27.3% 27.6% 28.6% 30.4% 29.3% 33.7% 35.6% 55.7%
ING U.S.
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ING U.S.
Consolidated Assets Under Management/Assets Under Administration
(in millions USD)
Total
Institutional/ AUM—Assets Under AUA—Assets Under
Balances as of December 31, 2012 General Account Separate Account Mutual Funds Management Administration Total AUM + AUA
Retirement (1) 27,222.6 49,425.4 13,823.2 90,471.2 213,675.5 304,146.7
Annuities (2) 22,915.8 751.7 2,433.6 26,101.1—26,101.1
Retirement Solutions 50,138.4 50,177.1 16,256.8 116,572.3 213,675.5 330,247.8
Investment Management 80,404.8 40,623.2 60,723.3 181,751.3 54,695.5 236,446.8
Insurance
Individual Life (3) 12,910.4 2,412.1—15,322.5—15,322.5
Employee Benefits 1,745.5 14.0—1,759.5—1,759.5
Insurance Solutions 14,655.9 2,426.1—17,082.0—17,082.0
Eliminations(70,207.6)(37,716.2)(7,727.3)(115,651.1)(54,695.5)(170,346.5)
Total Ongoing Business 74,991.5 55,510.2 69,252.8 199,754.5 213,675.5 413,430.1
US Closed Block Variable Annuity 1,237.6 41,960.8—43,198.4—43,198.4
Closed Block Institutional Spread Products 3,805.6 — 3,805.6—3,805.6
Closed Block Other 370.1 196.4—566.5—566.5
Total AUM and AUA 80,404.8 97,667.4 69,252.8 247,325.0 213,675.5 461,000.6
Retirement AUM include wrapped funds as well as unwrapped IIM-managed funds
Annuities AUM includes Payout annuities
Individual Life AUM includes assets backing interest and non-interest sensitive products
ING U.S.
Page 18 of 69
ING U.S.
Page 19 of 69
ING U.S.
Retirement Sources of Operating Earnings
Three Months Ended
(in millions USD) 12/31/12 9/30/12 6/30/12 3/31/12 12/31/11 9/30/11 6/30/11 3/31/11
Sources of operating earnings before income taxes:
Investment spread and other investment income 169.1 175.1 145.7 183.6 104.0 168.7 205.5 159.8
Fee based margin 198.0 196.3 190.0 191.7 182.3 187.9 196.5 195.9
Net underwriting gain (loss) and other revenue(10.5)(1.5)(5.7)(6.3)(4.4)(4.0)(0.2) 2.2
Administrative expenses(170.8)(167.3)(177.8)(179.6)(178.9)(174.4)(182.8)(180.2)
Trail commissions(31.1)(27.9)(28.0)(29.1)(30.4)(27.8)(28.8)(28.4)
DAC/VOBA and other intangibles amortization, excluding
unlocking(37.6)(45.2)(48.1)(40.2)(31.0)(35.5)(57.4)(40.9)
DAC/VOBA and other intangibles unlocking(8.9) 15.9(5.0) 3.8 28.4(17.1) 15.8 17.1
Operating earnings before income taxes 108.2 145.4 71.1 123.9 70.0 97.8 148.6 125.5
Gross investment income
Fixed income 370.7 360.3 365.1 348.0 348.7 336.1 332.0 323.5
Limited partnership income(2.0)(0.3) 7.1(1.4)(6.0) 0.3(1.5)(1.2)
Prepayment fee income 1.1 6.0 5.7 4.9 5.9 3.2 18.1 2.8
Total gross investment income 369.8 366.0 377.9 351.5 348.6 339.6 348.6 325.1
Investment expenses(14.7)(13.2)(13.2)(13.8)(13.9)(13.8)(12.7)(12.4)
Credited interest(204.7)(201.1)(197.4)(197.0)(201.6)(197.5)(190.9)(187.1)
Net margin 150.5 151.7 167.3 140.7 133.1 128.3 145.0 125.7
Other investment income* 18.5 23.3(21.6) 43.0(29.2) 40.4 60.4 34.2
Investment spread and other investment income 169.1 175.1 145.7 183.6 104.0 168.7 205.5 159.8
Fee based margin
Fee based margin—excluding Recordkeeping 135.6 133.2 130.0 132.0 123.1 127.0 133.9 130.4
Fee based margin—Recordkeeping 62.2 63.1 59.9 59.9 59.2 60.9 62.7 65.5
Fee based margin 198.0 196.3 190.0 191.7 182.3 187.9 196.5 195.9
Recordkeeping
Revenue 62.2 63.1 59.9 59.9 59.2 60.9 62.7 65.5
Expenses(56.0)(56.7)(57.5)(57.7)(62.7)(59.9)(62.7)(63.7)
Operating earnings—Recordkeeping 6.2 6.4 2.4 2.2(3.5) 1.0—1.8
ING U.S.
Page 20 of 69
ING U.S.
Retirement Operating Earnings
Three Months Ended
(in millions USD) 12/31/12 9/30/12 6/30/12 3/31/12 12/31/11 9/30/11 6/30/11 3/31/11
Operating revenues
Net investment income and net realized gains (losses) 380.1 384.5 347.2 388.1 312.9 367.9 401.4 353.7 Fee income 182.7 181.6 173.6 177.1 169.7 176.1 184.4 183.3 Premiums 0.9 0.5 3.0 0.5 0.2 0.5 3.1 4.3 Other revenue 6.8 15.5 15.1 14.7 15.5 14.9 17.9 19.6
Total operating revenues 570.5 582.1 538.9 580.4 498.3 559.4 606.8 560.9
Operating benefits and expenses
Interest credited and other benefits to contract owners/policyholders (212.9) (210.5) (210.4) (208.4) (213.2) (208.5) (204.3) (200.2) Operating expenses (204.6) (198.8) (207.6) (213.9) (214.1) (202.2) (215.2) (213.0) Net amortization of DAC/VOBA (44.7) (27.1) (49.4) (33.8) (0.6) (50.5) (38.3) (21.7) Interest expense (0.1) (0.3)
(0.4) (0.4) (0.4) (0.4) (0.4) (0.5)
Total operating benefits and expenses (462.3) (436.7) (467.8) (456.5) (428.3) (461.6) (458.2) (435.4)
Operating earnings before income taxes 108.2 145.4 71.1 123.9 70.0 97.8 148.6 125.5
ING U.S.
Page 21 of 69
ING U.S.
Retirement AUM/AUA
Balances as of
(in millions USD) 12/31/12 9/30/12 6/30/12 3/31/12 12/31/11 9/30/11 6/30/11 3/31/11
Assets under management by product group
Corporate market 33,265.9 32,609.4 31,143.9 31,680.7 29,134.4 27,127.3 30,306.3 30,309.6
Tax exempt market 46,986.1 46,226.6 44,705.9 45,304.0 42,691.3 40,628.4 43,410.2 42,979.6
Total full service plans 80,252.0 78,836.0 75,849.8 76,984.7 71,825.7 67,755.7 73,716.5 73,289.2
Stable value 7,792.1 6,473.1 6,137.5 5,838.4 5,560.9 4,758.0 4,127.5 3,947.8
Individual market 2,427.1 2,359.4 2,227.1 2,256.7 2,091.1 2,000.8 2,052.1 1,982.3
Total AUM 90,471.2 87,668.5 84,214.4 85,079.8 79,477.7 74,514.5 79,896.1 79,219.3
Recordkeeping/Stable Value AUA 213,675.5 215,513.6 209,881.4 215,848.5 208,366.0 198,895.9 218,560.8 222,044.9
Total AUM/AUA 304,146.7 303,182.1 294,095.8 300,928.3 287,843.7 273,410.4 298,456.9 301,264.2
Assets under management by fund group
General account 27,222.6 26,634.6 26,109.1 25,784.5 25,528.3 24,970.7 24,120.3 23,838.0
Guaranteed separate account 8,273.9 7,315.8 7,030.7 6,915.1 6,781.5 6,491.5 6,091.1 5,844.9
Non-guaranteed separate account 41,151.5 40,589.4 38,683.8 40,138.0 36,139.3 33,353.9 39,401.7 39,343.1
Mutual Funds/Institutional Funds 13,823.2 13,128.7 12,390.8 12,242.2 11,028.6 9,698.4 10,283.0 10,193.2
Total AUM 90,471.2 87,668.5 84,214.4 85,079.8 79,477.7 74,514.5 79,896.1 79,219.3
Recordkeeping/Stable Value AUA 213,675.5 215,513.6 209,881.4 215,848.5 208,366.0 198,895.9 218,560.8 222,044.9
Total AUM and AUA 304,146.7 303,182.1 294,095.8 300,928.3 287,843.7 273,410.4 298,456.9 301,264.2
ING U.S.
Page 22 of 69
Retirement AUM Rollforward
Three Months Ended
(in millions USD) 12/31/12 9/30/12 6/30/12 3/31/12 12/31/11 9/30/11 6/30/11 3/31/11
Full service—Corporate market
Assets under management, beginning of period 32,609.4 31,143.9 31,680.7 29,134.4 27,127.3 30,306.3 30,309.6 29,486.0
Transfer/Single deposits 739.7 529.3 519.8 487.3 608.7 411.5 401.1 411.0
Recurring deposits 781.0 840.9 839.7 1,002.7 740.3 804.3 816.4 941.1
Deposits 1,520.7 1,370.2 1,359.5 1,490.0 1,349.0 1,215.8 1,217.5 1,352.1
Surrenders, benefits, and product charges(1,319.1)(1,262.2)(1,079.1)(1,339.4)(1,042.2)(1,002.0)(1,305.3)(1,387.4)
Net Flows 201.6 108.0 280.4 150.6 306.8 213.8(87.8)(35.3)
Interest credited and investment performance 455.0 1,357.4(817.2) 2,395.6 1,700.3(3,392.7) 84.5 1,133.0
Transfers between products — — — -(274.1)
Assets under management, end of period 33,265.9 32,609.4 31,143.9 31,680.7 29,134.4 27,127.3 30,306.3 30,309.6
Full service—Tax exempt market
Assets under management, beginning of period 46,226.6 44,705.9 45,304.0 42,691.3 40,628.4 43,410.2 42,979.6 43,221.9
Transfer/Single deposits 410.5 388.3 278.7 280.7 312.5 429.8 337.8 279.2
Recurring deposits 740.5 686.5 770.0 778.4 737.7 721.1 777.6 761.5
Deposits 1,151.0 1,074.8 1,048.7 1,059.1 1,050.2 1,150.9 1,115.4 1,040.7
Surrenders, benefits, and product charges(903.3)(990.7)(1,006.7)(869.7)(799.5)(932.2)(880.8)(1,242.8)
Net Flows 247.7 84.1 42.0 189.4 250.7 218.7 234.6(202.1)
Interest credited and investment performance 511.9 1,436.6(640.1) 2,423.3 1,812.2(3,000.5) 196.0 1,222.0
Transfers between products — — — -(1,262.2)
Assets under management, end of period 46,986.1 46,226.6 44,705.9 45,304.0 42,691.3 40,628.4 43,410.2 42,979.6
Stable value (including MCA) (1)(2)
Assets under management, beginning of period 6,473.1 6,137.5 5,838.4 5,560.9 4,758.0 4,127.5 3,947.8 1,987.7
Transfer/Single deposits 1,320.1 268.6 354.2 297.2 345.4 91.5 241.3 195.6
Recurring deposits 61.8 41.0 94.4 160.7 415.4 418.6 63.5 258.0
Deposits 1,381.9 309.6 448.6 457.9 760.8 510.1 304.8 453.6
Surrenders, benefits, and product charges(97.1)(69.1)(210.1)(250.0)(68.2)(10.7)(99.2)(34.9)
Net Flows 1,284.8 240.5 238.5 207.9 692.6 499.4 205.6 418.7
Interest credited and investment performance 34.3 95.2 60.6 69.6 110.2 131.1(25.8) 5.1
Transfers between products — — ——1,536.3
Assets under management, end of period 7,792.1 6,473.1 6,137.5 5,838.4 5,560.9 4,758.0 4,127.5 3,947.8
Individual market
Assets under management, beginning of period 2,359.3 2,227.1 2,256.7 2,091.1 2,000.8 2,052.1 1,982.3 1,842.2
Transfer/Single deposits 72.4 126.5 95.5 134.8 85.0 93.1 107.6 120.8
Recurring deposits 0.1 0.1 0.3 0.2 — —
Deposits 72.5 126.6 95.8 135.0 85.0 93.1 107.6 120.8
Surrenders, benefits, and product charges(25.0)(51.3)(100.0)(63.4)(51.5)(24.4)(35.8)(9.3)
Net Flows 47.5 75.3(4.2) 71.6 33.5 68.7 71.8 111.5
Interest credited and investment performance 20.3 56.9(25.5) 93.9 56.8(120.0)(2.0) 28.7
Transfers between products — — — —
Assets under management, end of period 2,427.1 2,359.3 2,227.1 2,256.7 2,091.1 2,000.8 2,052.1 1,982.3
Total AUM (3)
Assets under management, beginning of period 87,668.5 84,214.4 85,079.8 79,477.7 74,514.5 79,896.1 79,219.3 76,537.8
Transfer/Single deposits 2,542.6 1,312.7 1,248.1 1,200.1 1,351.7 1,025.9 1,087.8 1,006.5
Recurring deposits 1,583.4 1,568.5 1,704.4 1,942.0 1,893.4 1,943.9 1,657.6 1,960.7
Deposits 4,126.0 2,881.2 2,952.5 3,142.1 3,245.1 2,969.8 2,745.4 2,967.2
Surrenders, benefits, and product charges(2,344.6)(2,373.3)(2,395.8)(2,522.5)(1,961.5)(1,969.3)(2,321.1)(2,674.5)
Net Flows 1,781.4 507.9 556.7 619.6 1,283.6 1,000.5 424.3 292.7
Interest credited and investment performance 1,021.5 2,946.1(1,422.2) 4,982.5 3,679.5(6,382.1) 252.7 2,388.7
Transfers between products — — — —
Assets under management, end of period 90,471.2 87,668.5 84,214.4 85,079.8 79,477.7 74,514.5 79,896.1 79,219.3
Where ING U.S. is the Investment Manager
Includes IIM Managed SV MCA and Stabilizer Investment Only
Excludes IPS and ILIAC Recordkeeping and Non IIM Managed MCA
ING U.S.
Page 23 of 69
ING U.S. Annuities
Page 24 of 69
ING U.S.
Annuities Sources of Operating Earnings
Three Months Ended
(in millions USD) 12/31/12 9/30/12 6/30/12 3/31/12 12/31/11 9/30/11 6/30/11 3/31/11
Sources of operating earnings before income taxes:
Investment spread and other investment income 118.8 106.6 102.9 110.5 63.5 102.0 110.7 86.6
Fee based margin 10.1 9.3 8.4 8.6 8.1 7.9 7.7 6.5
Net underwriting gain (loss) and other revenue 5.6 2.2 3.9 3.1 2.2 5.4 7.1 4.9
Administrative expenses(21.7)(23.5)(22.3)(22.6)(27.8)(24.8)(26.2)(25.3)
Trail commissions(8.4)(8.2)(8.0)(8.3)(1.7)(5.0)(4.9)(4.6)
DAC/VOBA and other intangibles amortization, excluding
unlocking(53.7)(40.9)(49.4)(34.6)(22.3)(54.3)(52.7)(41.4)
DAC/VOBA and other intangibles unlocking(44.4)(12.9)(8.6)(20.3) 177.8 53.3 22.2 12.7
Operating earnings before income taxes 6.3 32.6 26.9 36.4 199.8 84.5 63.9 39.4
Gross investment income
Fixed income 278.5 273.4 295.1 297.1 306.5 310.4 310.8 303.1
Limited partnership income 0.7 0.7 7.1 0.7(6.2) 2.8 5.4 2.9
Prepayment fee income 10.1 5.3 7.8 5.9 3.6 8.9 8.1 4.9
Total gross investment income 289.3 279.4 310.0 303.7 303.9 322.1 324.3 310.9
Investment expenses(11.4)(11.2)(9.6)(12.0)(13.0)(13.8)(12.9)(12.7)
Credited interest(179.7)(184.7)(201.8)(216.9)(234.8)(239.1)(241.3)(244.9)
Net margin 98.2 83.5 98.6 74.8 56.1 69.2 70.1 53.3
Other investment income* 20.6 23.2 4.2 35.7 7.4 33.0 40.6 33.4
Investment spread and other investment income 118.8 106.6 102.9 110.5 63.5 102.0 110.7 86.6
* Includes investment income on assets backing surplus that has been allocated from the corporate segment, as well as income from policy loans.
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Annuities Operating Earnings
Three Months Ended
(in millions USD) 12/31/12 9/30/12 6/30/12 3/31/12 12/31/11 9/30/11 6/30/11 3/31/11
Operating revenues
Net investment income and net realized gains (losses) 298.4 291.7 304.2 329.0 303.0 331.5 348.2 339.2
Fee income 10.4 9.5 8.2 7.4 7.4 9.4 7.3 5.7
Premiums 6.3 6.1 11.7 11.8 6.8 10.6 7.0 9.7
Other revenue 2.3 2.4 4.6 3.0 1.1 3.7 5.0 5.8
Total operating revenues 317.4 309.7 328.7 351.2 318.3 355.2 367.5 360.4
Operating benefits and expenses
Interest credited and other benefits to contract owners/policyholders(192.3)(200.3)(219.6)(241.9)(221.2)(244.7)(244.1)(268.0)
Operating expenses(30.3)(32.1)(31.1)(31.2)(31.9)(32.8)(31.7)(30.3)
Net amortization of DAC/VOBA(88.4)(44.6)(50.9)(41.6) 134.7 7.0(27.7)(22.5)
Interest expense(0.1)(0.1)(0.2)(0.1)(0.1)(0.2)(0.1)(0.2)
Total operating benefits and expenses(311.1)(277.1)(301.8)(314.8)(118.5)(270.7)(303.6)(321.0)
Operating earnings before income taxes 6.3 32.6 26.9 36.4 199.8 84.5 63.9 39.4
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Annuities AUM
Balances as of
(in millions USD) 12/31/12 9/30/12 6/30/12 3/31/12 12/31/11 9/30/11 6/30/11 3/31/11
Assets Under Management
Fixed single year 4,273.7 4,367.6 4,435.1 4,485.7 4,551.6 4,622.1 4,710.5 4,812.3
Fixed multi-year 3,949.3 4,133.7 4,574.0 5,665.5 6,047.6 6,473.0 6,629.2 6,765.0
Indexed 12,209.2 12,167.0 12,122.8 12,111.8 12,080.9 12,075.1 11,929.7 11,637.9
SPIA & Payout 2,806.6 2,851.1 2,847.5 2,850.3 2,831.0 2,816.5 2,899.2 2,943.4
Other annuities 428.7 440.8 425.1 452.4 417.8 395.5 474.5 490.2
Mutual funds 2,433.6 2,291.7 2,092.2 2,026.9 1,761.3 1,579.7 1,591.7 1,365.8
Total AUM 26,101.1 26,251.9 26,496.7 27,592.6 27,690.2 27,961.9 28,234.7 28,014.5
Assets Under Management
General account 22,915.8 23,185.7 23,656.1 24,770.2 25,198.5 25,694.2 25,820.9 25,801.1
Separate account 751.7 774.5 748.4 795.5 730.4 688.0 822.1 847.6
Mutual funds 2,433.6 2,291.7 2,092.2 2,026.9 1,761.3 1,579.7 1,591.7 1,365.8
Total AUM 26,101.1 26,251.9 26,496.7 27,592.6 27,690.2 27,961.9 28,234.7 28,014.5
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Annuities AUM Rollforward
Three Months Ended
(in millions USD) 12/31/12 9/30/12 6/30/12 3/31/12 12/31/11 9/30/11 6/30/11 3/31/11
Annual Reset Annuities/Multi-Year Guaranteed Annuities
Assets Under Management, beginning of period 8,501.3 9,009.1 10,151.2 10,599.1 11,095.1 11,339.6 11,577.3 11,889.4
Deposits 17.3 10.1 16.2 18.0 15.2 19.0 20.6 16.3
Surrenders, benefits, and product charges(376.9)(602.9)(1,256.1)(576.6)(635.1)(382.2)(389.1)(458.7)
Net cash flow(359.6)(592.8)(1,239.9)(558.6)(619.9)(363.1)(368.5)(442.4)
Interest credited and investment performance 81.2 85.0 97.8 110.7 123.9 118.6 130.8 130.3
Assets Under Management, end of period 8,222.9 8,501.3 9,009.1 10,151.2 10,599.1 11,095.1 11,339.6 11,577.3
Fixed Indexed Annuities
Assets Under Management, beginning of period 12,167.0 12,122.8 12,111.8 12,080.9 12,075.1 11,929.7 11,637.9 11,424.9
Deposits 285.0 296.7 313.1 295.6 290.7 332.1 444.3 390.7
Surrenders, benefits, and product charges(341.2)(355.2)(371.6)(324.0)(335.7)(314.1)(315.1)(275.3)
Net cash flow(56.1)(58.5)(58.5)(28.4)(45.1) 18.0 129.2 115.4
Interest credited and investment performance 98.4 102.7 69.5 59.3 50.9 127.4 162.6 97.6
Assets Under Management, end of period 12,209.2 12,167.0 12,122.8 12,111.8 12,080.9 12,075.1 11,929.7 11,637.9
SPIA & Payout
Assets Under Management, beginning of period 2,851.0 2,847.5 2,850.3 2,831.0 2,816.4 2,899.2 2,943.4 2,963.0
Deposits 38.7 57.4 85.1 61.8 66.7 46.0 41.6 43.7
Surrenders, benefits, and product charges(112.7)(109.5)(109.4)(109.3)(87.6)(112.9)(116.3)(116.7)
Net cash flow(74.0)(52.1)(24.3)(47.5)(20.9)(66.9)(74.8)(73.0)
Interest credited and investment performance 29.6 55.6 21.5 66.8 35.4(15.8) 30.5 53.3
Assets Under Management, end of period 2,806.6 2,851.0 2,847.5 2,850.3 2,831.0 2,816.4 2,899.2 2,943.4
Mutual Fund Custodial
Assets Under Management, beginning of period 2,291.7 2,092.2 2,026.9 1,761.3 1,579.7 1,591.7 1,365.8 1,089.0
Deposits 213.6 202.8 217.3 218.8 166.0 236.3 273.6 301.7
Surrenders, benefits, and product charges(106.9)(97.1)(102.7)(84.9)(105.7)(72.4)(66.5)(77.9)
Net cash flow 106.7 105.7 114.7 133.9 60.2 163.9 207.1 223.7
Interest credited and investment performance 35.1 93.7(49.4) 131.7 121.3(175.9) 18.8 53.0
Assets Under Management, end of period 2,433.5 2,291.7 2,092.2 2,026.9 1,761.3 1,579.7 1,591.7 1,365.8
Other Annuities
Assets Under Management, beginning of period 440.8 425.1 452.4 417.8 395.5 474.5 490.2 483.0
Deposits 1.2 1.0 2.1 1.9 1.8 3.1 3.6 3.7
Surrenders, benefits, and product charges(14.7)(10.7)(11.3)(12.9)(20.8)(16.3)(17.1)(19.5)
Net cash flow(13.5)(9.7)(9.2)(11.0)(19.0)(13.3)(13.4)(15.8)
Interest credited and investment performance 1.4 25.4(18.1) 45.6 41.3(65.7)(2.2) 22.9
Assets Under Management, end of period 428.7 440.8 425.1 452.4 417.8 395.5 474.5 490.2
Annuities—Total
Assets Under Management, beginning of period 26,251.8 26,496.6 27,592.6 27,690.2 27,961.9 28,234.7 28,014.5 27,849.3
Deposits 555.7 567.9 633.9 596.1 540.4 636.5 783.8 756.1
Surrenders, benefits, and product charges(951.8)(1,175.0)(1,850.8)(1,107.7)(1,185.0)(897.9)(904.1)(948.1)
Net cash flow(396.1)(607.1)(1,216.9)(511.6)(644.6)(261.4)(120.4)(192.0)
Interest credited and investment performance 245.2 362.2 120.9 414.0 372.9(11.5) 340.6 357.2
Assets Under Management, end of period 26,101.1 26,251.9 26,496.7 27,592.6 27,690.2 27,961.9 28,234.7 28,014.5
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Investment Management
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Investment Management Sources of Operating Earnings
Three Months Ended
(in millions USD) 12/31/12 9/30/12 6/30/12 3/31/12 12/31/11 9/30/11 6/30/11 3/31/11
Sources of operating earnings before income taxes:
Investment capital and other investment income 5.3 16.7 12.7 5.2 (9.5) 0.5 10.1 6.4 Fee based margin 137.2 125.5 117.5 125.4 119.6 122.0 120.6 122.2 Administrative expenses (111.3) (103.1) (99.0) (97.6) (97.0) (99.8) (104.3) (103.3)
Operating earnings before income taxes 31.2 39.1 31.2 33.0 13.1 22.7 26.4 25.3
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Investment Management Operating Earnings
Three Months Ended
(in millions USD) 12/31/12 9/30/12 6/30/12 3/31/12 12/31/11 9/30/11 6/30/11 3/31/11
Operating revenues
Net investment income and net realized gains (losses) 5.6 17.3 13.3 5.4(9.3) 1.0 10.9 6.2
Fee income 122.6 120.1 114.1 117.9 117.0 115.9 119.3 117.1
Other revenue 14.3 4.8 2.8 7.3 2.4 5.6 0.5 5.3
Total operating revenues 142.5 142.2 130.2 130.6 110.1 122.5 130.7 128.6
Operating benefits and expenses
Operating expenses(111.3)(103.1)(99.0)(97.6)(97.0)(99.8)(104.3)(103.3)
Total operating benefits and expenses(111.3)(103.1)(99.0)(97.6)(97.0)(99.8)(104.3)(103.3)
Operating earnings before income taxes 31.2 39.1 31.2 33.0 13.1 22.7 26.4 25.3
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Investment Management Key Metrics
Balances as of
(in millions USD) 12/31/12 9/30/12 6/30/12 3/31/12 12/31/11 9/30/11 6/30/11 3/31/11
Client Assets by Source:
External clients
Investment Management sourced 54,061.9 50,761.4 48,879.7 49,754.9 49,391.5 48,352.1 51,968.1 49,432.8
Affiliate sourced 47,284.6 46,376.8 42,563.9 44,050.0 37,851.8 35,284.4 37,737.1 37,882.9
Subtotal external clients 101,346.5 97,138.2 91,443.6 93,804.9 87,243.3 83,636.5 89,705.2 87,315.7
General Account (1) 80,404.8 80,082.1 80,079.4 77,121.7 78,878.3 78,419.7 77,832.4 77,517.4
Total Client Assets (AUM) 181,751.3 177,220.3 171,523.0 170,926.6 166,121.6 162,056.2 167,537.6 164,833.1
Administration Only Assets (AUA) 54,695.5 54,723.3 56,024.7 58,136.6 58,992.4 57,119.6 63,006.3 63,272.2
Total AUM and AUA 236,446.8 231,943.6 227,547.7 229,063.2 225,114.0 219,175.8 230,543.9 228,105.3
Three Months Ended
12/31/12 9/30/12 6/30/12 3/31/12 12/31/11 9/30/11 6/30/11 3/31/11
Analysis of investment advisory and administrative
revenues, net, by source (2) :
External clients
Investment Management sourced 58.2 56.0 52.6 55.9 53.9 56.3 58.0 57.9
Affiliate sourced 21.9 21.4 19.3 19.5 19.8 18.8 19.8 18.1
Subtotal External Clients 80.1 77.4 71.9 75.4 73.7 75.1 77.8 76.0
General Account 37.0 37.6 36.7 37.1 37.3 36.8 36.9 37.1
Total investment advisory and administrative revenues,
net, from AUM 117.1 115.0 108.6 112.5 111.0 111.9 114.7 113.1
Administration Only Fees 5.5 5.1 5.5 5.4 6.1 3.9 4.6 4.0
Total investment advisory and administrative revenues,
net, by source (2) 122.6 120.1 114.1 117.9 117.1 115.8 119.3 117.1
Revenue Yield (bps) (2) (3) :
External clients
Investment Management sourced 44.6 45.1 43.0 44.6 43.5 44.2 45.1 47.5
Affiliate sourced 18.7 19.0 17.8 19.0 21.4 20.3 20.7 19.6
Revenue Yield on Institutional/retail 32.3 32.6 31.2 33.1 34.1 34.2 34.7 35.5
General Account 18.5 18.8 19.0 18.8 19.0 18.9 19.0 19.2
Revenue Yield on Client Assets (AUM) 26.1 26.3 25.7 26.5 26.9 27.0 27.5 27.8
Revenue Yield on Administration Only Assets (AUA) 4.1 3.7 3.9 3.7 4.1 2.6 2.9 2.6
Total Revenue Yield on AUM and AUA (bps) (2) (3) 21.0 20.9 20.2 20.6 20.9 20.5 20.7 20.7
General Account assets reported on a Statutory Book Value billing basis consistent with revenues earned.
Measures used by management to evaluate ongoing business performance, allowing for more appropriate comparisons with industry peers.
Revenue Yields calculated using average client assets for the period.
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Investment Management Account Rollforward by Source
[Graphic Appears Here]
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Investment Management Account Value by Asset Type
Balances as of
12/31/12 9/30/12 6/30/12 3/31/12 12/31/11 9/30/11 6/30/11 3/31/11
(in millions USD)
Institutional
Equity 13,769.5 12,161.7 11,491.2 11,662.4 11,957.4 11,210.5 11,452.0 11,648.2
Fixed Income 29,894.4 28,402.5 27,364.6 27,534.0 28,162.0 27,986.9 27,307.8 24,880.0
Real Estate — — — —
Money Market 33.3 30.2 21.3 11.5 11.8 13.8 22.6 31.5
Total 43,697.2 40,594.4 38,877.1 39,207.9 40,131.2 39,211.2 38,782.4 36,559.7
Retail
Equity 33,315.3 33,044.2 29,858.1 31,752.7 29,293.6 26,618.8 32,412.5 32,591.6
Fixed Income 15,406.2 15,074.2 14,583.0 14,806.8 10,284.3 10,351.7 10,453.5 10,378.8
Real Estate 6,401.3 5,921.6 5,541.3 5,399.5 4,640.9 4,314.8 5,209.9 4,870.3
Money Market 2,526.5 2,503.8 2,584.1 2,637.9 2,893.3 3,140.1 2,846.8 2,915.3
Total 57,649.3 56,543.8 52,566.5 54,596.9 47,112.1 44,425.4 50,922.7 50,756.0
General Account
Equity 251.1 272.5 275.8 276.4 284.6 301.1 313.3 399.0
Fixed Income 75,957.9 77,147.8 75,877.5 75,092.2 76,623.9 75,325.1 76,053.3 76,490.4
Real Estate — — — —
Money Market 4,195.8 2,661.9 3,926.0 1,753.1 1,969.8 2,793.5 1,465.8 628.0
Total 80,404.8 80,082.1 80,079.4 77,121.7 78,878.3 78,419.7 77,832.4 77,517.4
Combined Asset Type
Equity 47,335.9 45,478.4 41,625.1 43,691.6 41,535.6 38,130.4 44,177.8 44,638.8
Fixed Income 121,258.5 120,624.5 117,825.1 117,433.0 115,070.2 113,663.7 113,814.6 111,749.2
Real Estate 6,401.3 5,921.6 5,541.3 5,399.5 4,640.9 4,314.8 5,209.9 4,870.3
Money Market 6,755.6 5,195.9 6,531.4 4,402.5 4,875.0 5,947.4 4,335.3 3,574.8
Total 181,751.3 177,220.3 171,523.0 170,926.6 166,121.7 162,056.2 167,537.6 164,833.1
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Individual Life Sources of Operating Earnings
Three Months Ended
(in millions USD) 12/31/12 9/30/12 6/30/12 3/31/12 12/31/11 9/30/11 6/30/11 3/31/11
Sources of operating earnings before income
taxes:
Investment spread and other investment income 38.8 59.6 58.2 71.1 46.8 70.6 82.2 75.2
Fee based margin 4.7 4.9 4.9 5.0 4.9 5.0 5.5 5.4
Net underwriting gain (loss) and other revenue 146.4 130.5 99.5 119.0 123.8 142.2 148.0 128.3
Administrative expenses(76.6)(76.6)(75.8)(78.0)(78.5)(75.9)(78.7)(75.1)
Trail commissions(6.1)(8.4)(5.9)(10.1)(8.8)(5.1)(7.1)(9.7)
DAC/VOBA and other intangibles amortization,
excluding unlocking(57.2)(60.2)(47.3)(47.6)(30.5)(71.5)(64.7)(46.6)
DAC/VOBA and other intangibles unlocking 4.6 3.4(0.2)(4.4)(19.0) 18.8(4.3)(1.9)
Operating earnings before income taxes 54.6 53.2 33.4 55.0 38.7 84.1 80.9 75.6
Gross Investment Income
Fixed income 202.2 222.0 225.1 221.3 225.8 223.1 227.5 230.5
Limited partnership income(1.2)(0.1) 4.1(1.6)(2.2) 1.0 5.4 0.7
Prepayment fee income 4.4 0.6 2.6 5.8 3.2 4.2 2.2 0.4
Total gross investment income 205.4 222.5 231.8 225.5 226.8 228.3 235.1 231.6
Investment expenses(5.4)(5.8)(6.2)(5.9)(5.9)(5.6)(5.7)(6.3)
Credited interest(166.1)(163.1)(160.5)(159.9)(165.5)(164.0)(162.3)(159.4)
Net margin 33.9 53.6 65.1 59.7 55.4 58.7 67.1 65.9
Other investment income* 4.8 5.8(6.9) 11.5(8.6) 11.9 15.0 9.1
Investment spread and other investment income 38.8 59.6 58.2 71.1 46.8 70.6 82.2 75.2
Net underwriting gain (loss) and other revenue
Fee Revenue/Premiums 503.4 498.2 507.1 489.1 483.8 481.1 467.9 451.5
Net Mortality, including Reinsurance(261.7)(272.1)(279.9)(277.4)(274.2)(251.3)(228.0)(244.9)
Reserve Change/Other(95.5)(95.6)(127.7)(92.7)(85.8)(87.6)(91.9)(78.3)
Total net underwriting gain (loss) and other
revenue 146.4 130.5 99.5 119.0 123.8 142.2 148.0 128.3
* Includes investment income on assets backing surplus that has been allocated from the corporate segment, as well as income from policy loans.
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Individual Life Operating Earnings
Three Months Ended
(in millions USD) 12/31/12 9/30/12 6/30/12 3/31/12 12/31/11 9/30/11 6/30/11 3/31/11
Operating revenues
Net investment income and net realized gains (losses) 213.1 229.7 224.0 247.0 219.6 240.3 248.4 241.7
Fee income 282.0 262.4 288.0 283.3 292.2 300.7 273.4 272.9
Premiums 191.7 180.0 186.7 179.4 180.7 164.9 163.2 152.1
Other revenue 7.4 6.4 10.5 2.3 9.1 5.0 10.2 10.6
Total operating revenues 694.2 678.5 709.2 712.0 701.6 710.9 695.2 677.3
Operating benefits and expenses
Interest credited and other benefits to contract owners/policyholders(489.1)(509.5)(531.0)(504.8)(453.1)(464.2)(473.7)(464.1)
Operating expenses(101.0)(97.1)(95.4)(97.0)(87.8)(79.0)(84.5)(81.5)
Net amortization of DAC/VOBA(47.7)(16.6)(47.4)(50.6)(116.8)(79.6)(52.3)(50.2)
Interest expense(1.8)(2.1)(2.0)(4.6)(5.2)(4.0)(3.8)(5.9)
Total operating benefits and expenses(639.6)(625.3)(675.8)(657.0)(662.9)(626.8)(614.3)(601.7)
Operating earnings before income taxes 54.6 53.2 33.4 55.0 38.7 84.1 80.9 75.6
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Individual Life Key Metrics
Three Months Ended
(in millions USD) 12/31/12 9/30/12 6/30/12 3/31/12 12/31/11 9/30/11 6/30/11 3/31/11
Sales by Product Line
Guaranteed 7.7 18.2 24.6 22.2 19.2 16.4 15.8 16.6
Accumulation 5.4 6.9 6.9 6.1 7.8 5.0 6.1 9.9
Indexed 11.8 8.1 8.5 5.1 9.6 6.3 6.9 5.5
Total Universal life 24.9 33.2 40.0 33.4 36.6 27.7 28.8 32.0
Variable life 1.6 2.3 1.2 1.2 1.7 3.1 3.4 4.1
Term 19.2 28.2 35.2 33.7 36.2 40.1 42.0 37.2
Whole life
Total sales by product line 45.7 63.7 76.4 68.3 74.5 70.9 74.2 73.3
Sales by Distribution
Independent life sales 32.1 49.4 57.4 53.6 58.3 51.5 55.8 55.9
Strategic distribution 8.5 7.2 9.8 6.6 8.5 8.8 7.1 7.0
Alternative and Specialty markets 5.1 7.3 9.2 8.1 7.7 10.6 11.3 10.4
Total sales by distribution 45.7 63.7 76.4 68.3 74.5 70.9 74.2 73.3
Gross premiums and deposits by product:
Interest sensitive 322.2 347.1 384.9 379.9 361.0 291.1 327.7 335.0
Non—interest sensitive 217.4 223.6 230.7 218.8 218.8 206.6 206.4 194.1
Total gross premiums and deposits 539.6 570.7 615.6 598.7 579.8 497.7 534.2 529.0
Applications
New business policy count (Paid) 20,471 29,072 36,339 34,054 35,030 40,615 42,272 38,733
End of Period:
In-force face amount (by product)
Universal life 80,685.4 80,456.2 80,134.4 79,764.9 79,722.4 79,576.5 79,712.7 79,455.9
Variable life 30,182.3 30,761.4 31,335.9 31,902.2 32,599.5 33,172.7 34,593.6 35,273.1
Term 494,759.5 491,263.4 482,668.4 467,605.7 452,917.0 436,920.3 417,640.8 397,493.3
Whole life 2,348.3 2,377.3 2,418.4 2,452.8 2,479.2 2,526.6 2,567.3 2,619.4
Total In-force Face 607,975.5 604,858.3 596,557.1 581,725.6 567,718.1 552,196.1 534,514.5 514,841.7
In-force policy count (in whole numbers)
Universal life 305,115 306,679 308,331 309,992 312,072 313,928 316,133 318,788
Variable life 71,589 72,783 73,939 75,229 76,672 78,163 79,913 81,415
Term 824,794 818,457 805,154 783,182 762,882 742,251 716,035 687,495
Whole life 151,346 153,960 156,645 158,978 161,431 163,593 165,825 168,182
Total Policy Counts 1,352,844 1,351,879 1,344,069 1,327,381 1,313,057 1,297,935 1,277,906 1,255,880
Assets under management
General account 12,910.0 12,828.0 12,709.0 12,569.2 12,462.0 12,470.0 12,428.0 12,345.0
Separate account 2,412.0 2,447.0 2,371.0 2,491.7 2,308.0 2,186.0 2,576.0 2,621.0
Total 15,322.5 15,274.9 15,080.3 15,060.9 14,769.8 14,655.7 15,003.7 14,966.6
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Employee Benefits Sources of Operating Earnings
Three Months Ended
(in millions USD) 12/31/12 9/30/12 6/30/12 3/31/12 12/31/11 9/30/11 6/30/11 3/31/11
Sources of operating earnings before income taxes:
Investment spread and other investment income 10.4 13.8 9.5 15.4 7.8 17.7 18.3 14.7 Net underwriting gain (loss) and other revenue 80.6 82.9 80.9 64.2 74.8 60.4 70.8 63.9 Administrative expenses (41.6) (40.2) (39.8) (44.0) (37.7) (39.4) (40.1) (41.7) Trail commissions (17.7) (16.7) (17.6) (17.5) (18.4) (17.0) (14.8) (20.1) DAC/VOBA and other intangibles amortization, excluding unlocking (3.1) (3.7) (3.9) (2.5) (5.5) (3.6) (3.3) (3.5)
Operating earnings before income taxes 28.6 36.1 29.1 15.6 21.0 18.1 30.9 13.3
Gross Investment Income
Fixed income 24.8 26.7 27.1 26.7 27.4 27.6 26.9 26.3 Limited partnership income (0.2) — 0.6 (0.2) — 0.2 0.4 0.3 Prepayment fee income 0.2 0.4 0.3 0.1 0.2 1.1 0.1 0.3
Total gross investment income 24.8 27.1 28.0 26.6 27.6 28.9 27.4 26.9
Investment expenses (0.9) (0.9) (1.0) (1.0) (1.0) (0.9) (0.9) (0.9) Credited interest (16.6) (16.1) (16.2) (16.2) (16.2) (16.2) (16.6) (16.6)
Net margin 7.3 10.1 10.8 9.4 10.4 11.8 9.9 9.4
Other investment income* 3.1 3.7 (1.4) 5.9 (2.7) 6.0 8.4 5.4
Investment spread and other investment income 10.4 13.8 9.5 15.4 7.8 17.7 18.3 14.7
Group life
Premiums 116.4 116.2 114.4 113.8 115.6 116.7 117.2 118.2 Benefits (91.2) (89.5) (79.5) (94.3) (85.6) (91.7) (87.2) (97.9) Other (1) (3.4) (2.6) (2.7) (2.4) (3.0) (2.3) (2.3) (1.8)
Total 21.8 24.1 32.1 17.2 27.0 22.7 27.6 18.6 Loss Ratio (Interest adjusted) 78.4% 77.0% 69.5% 82.8% 74.0% 78.6% 74.4% 82.8%
Group stop loss
Premiums 136.5 139.0 142.1 143.9 135.8 135.9 138.6 135.7 Benefits (94.8) (97.7) (107.3) (109.7) (110.4) (116.3) (112.5) (113.3) Other (1) (0.7) (0.8) (0.8) (0.9) (0.9) (1.0) (0.5) (0.9)
Total 41.0 40.4 34.1 33.3 24.5 18.6 25.5 21.6 Loss Ratio 69.5% 70.3% 75.5% 76.2% 81.3% 85.6% 81.2% 83.5%
Voluntary Benefits, Disability, and Other 17.6 18.4 14.7 13.8 23.4 19.1 17.5 23.8
Net underwriting gain (loss) and other revenue 80.6 82.9 80.9 64.2 74.8 60.4 70.8 63.9
(1) Other includes service fees, dividends, interest expenses, and other miscellaneous expenses. The Loss Ratio calculation does not include Other.
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Employee Benefits Operating Earnings
Three Months Ended
(in millions USD) 12/31/12 9/30/12 6/30/12 3/31/12 12/31/11 9/30/11 6/30/11 3/31/11
Operating revenues
Net investment income and net realized gains (losses) 27.0 30.0 25.6 31.7 24.0 34.0 35.0 31.3
Fee income 15.9 15.7 15.5 15.4 15.3 15.6 15.5 15.4
Premiums 271.6 265.8 272.3 268.4 260.5 262.2 265.2 275.5
Other revenue(0.9)(1.0) 0.4(2.2) 4.8(0.4)(7.0)(0.7)
Total operating revenues 313.6 310.5 313.8 313.3 304.6 311.4 308.7 321.5
Operating benefits and expenses
Interest credited and other benefits to contract owners/policyholders(220.9)(214.0)(223.2)(234.0)(221.2)(232.5)(220.0)(244.0)
Operating expenses(60.7)(56.7)(57.6)(61.2)(56.9)(57.2)(54.5)(60.7)
Net amortization of DAC/VOBA(3.4)(3.7)(3.9)(2.5)(5.5)(3.6)(3.3)(3.5)
Total operating benefits and expenses(285.0)(274.4)(284.7)(297.7)(283.6)(293.3)(277.8)(308.2)
Operating earnings before income taxes 28.6 36.1 29.1 15.6 21.0 18.1 30.9 13.3
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Employee Benefits Key Metrics
Three Months Ended
(in millions USD) 12/31/12 9/30/12 6/30/12 3/31/12 12/31/11 9/30/11 6/30/11 3/31/11
Sales
Group life (Basic / Sup / AD&D) 2.0 13.0 7.6 25.3 6.1 8.9 3.5 18.2
Group stop loss 7.8 12.5 19.0 112.3 12.5 22.7 10.1 95.5
Disability 1.8 3.6 1.5 8.9 0.8 2.0 0.8 5.3
Association (Life, DI, PAI) 12.7 0.4 0.6 0.6 6.3 1.2 2.6 0.5
Other (PAI)—0.6 0.3 0.1—0.1—0.4
Total group products 24.3 30.1 29.0 147.2 25.7 34.9 17.0 119.9
Voluntary products 8.3 3.8 5.0 7.4 9.3 4.4 6.6 7.7
Total sales by product line 32.6 33.9 34.0 154.6 35.0 39.3 23.6 127.6
Total gross premiums and deposits 314.3 311.2 313.8 312.8 300.6 310.0 313.1 320.9
Total annualized in-force premiums 1,286.6 1,301.1 1,327.3 1,308.1 1,259.5 1,268.0 1,286.5 1,279.2
Assets under management (EOP)
General account 1,745.5 1,752.9 1,754.9 1,725.6 1,727.9 1,722.2 1,704.5 1,721.8
Separate account 14.0 14.3 13.2 14.2 13.3 12.7 14.1 12.6
Total 1,759.5 1,767.2 1,768.1 1,739.8 1,741.2 1,734.9 1,718.6 1,734.4
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Corporate Operating Earnings
Three Months Ended
(in millions USD) 12/31/12 9/30/12 6/30/12 3/31/12 12/31/11 9/30/11 6/30/11 3/31/11
Interest expense (including interest rate swap settlements) (39.2) (39.8) (32.1) (16.7) (21.2) (24.6) (68.9) (71.0)
Closed Block Variable Annuity contingent capital LOC (13.1) (13.1) (11.6) (18.9) - - - -
Amortization of intangibles (8.8) (8.8) (8.7) (8.7) (9.1) (8.6) (8.4) (8.3)
Reserve increase related to the use of SSDMF* - - - - (68.9) - - -
Other 17.5 4.1 19.7 (4.1) 3.2 12.4 8.2 35.0 R
Operating earnings before income taxes (43.6) (57.6) (32.7) (48.4) (96.0) (20.8) (68.9) (44.3) R
R Revised as of May 30, 2013, from version originally published on May 23, 2013.
* US Social Security Death Master File
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Closed Blocks Operating Earnings
Three Months Ended
(in millions USD) 12/31/12 9/30/12 6/30/12 3/31/12 12/31/11 9/30/11 6/30/11 3/31/11
Closed Block Institutional Spread Products 4.7 10.0 8.9 22.1 14.9 22.6 26.2 19.5
Closed Block Other 19.1 11.8 30.9 2.2 0.2(1.6)(7.6)(4.0)
Operating earnings before income taxes 23.8 21.8 39.8 24.3 15.1 21.0 18.6 15.5
Three Months Ended
Closed Block Institutional Spread Products 12/31/12 9/30/12 6/30/12 3/31/12 12/31/11 9/30/11 6/30/11 3/31/11
Operating revenues
Net investment income and net realized gains (losses) 23.7 29.6 30.1 42.9 38.6 41.5 60.5 48.2
Fee income 0.1 ——0.1 — -
Premiums 0.6 0.5 0.6 0.6 0.6 0.5 0.6 0.6
Other revenue(0.4)(0.2)(0.4)(0.5)(0.5)(0.7)(0.9)(1.0)
Total operating revenues 24.0 29.9 30.3 43.0 38.8 41.3 60.2 47.8
Operating benefits and expenses
Interest credited and other benefits to contract owners/policyholders(16.1)(16.6)(17.4)(17.4)(18.3)(15.4)(30.6)(24.7)
Operating expenses(2.9)(2.6)(3.2)(2.8)(3.3)(2.5)(2.6)(2.9)
Net amortization of DAC/VOBA(0.2)(0.1)(0.2)(0.1)(0.2)(0.1)(0.2)(0.1)
Interest expense(0.1)(0.6)(0.6)(0.6)(2.1)(0.7)(0.6)(0.6)
Total operating benefits and expenses(19.3)(19.9)(21.4)(20.9)(23.9)(18.7)(34.0)(28.3)
Operating earnings before income taxes 4.7 10.0 8.9 22.1 14.9 22.6 26.2 19.5
Three Months Ended
12/31/12 9/30/12 6/30/12 3/31/12 12/31/11 9/30/11 6/30/11 3/31/11
Closed Block Other
Operating revenues
Net investment income and net realized gains (losses) 10.9 8.3 7.6 8.2 7.3 9.7 12.6 9.4
Fee income ——0.1 1.2 1.0 1.2 2.3
Premiums 0.9 1.2 1.3 1.7 1.5 0.4 0.7 1.7
Other revenue 2.4 1.1(0.3) 0.4 0.1 1.4 0.9 0.8
Total operating revenues 14.2 10.6 8.6 10.4 10.1 12.5 15.4 14.2
Operating benefits and expenses
Interest credited and other benefits to contract owners/policyholders 6.8 2.7 1.3(7.0) 2.1(9.6)(11.4)(10.1)
Operating expenses(1.9)(1.5) 21.0(1.2)(12.0)(4.5)(11.5)(8.1)
Total operating benefits and expenses 4.9 1.2 22.3(8.2)(9.9)(14.1)(23.0)(18.2)
Operating earnings before income taxes 19.1 11.8 30.9 2.2 0.2(1.6)(7.6)(4.0)
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Closed Block Variable Annuity Income (Loss) before income taxes
Three Months Ended
(in millions USD) 12/31/12 9/30/12 6/30/12 3/31/12 12/31/11 9/30/11 6/30/11 3/31/11
Revenues
Net investment income 17.2 12.2 5.9 17.4 30.7 7.8 22.5 24.8
Fee income 312.9 307.9 304.8 310.3 303.4 314.1 333.1 330.1
Net realized gains (losses)(267.3)(283.0) 480.8(1,313.3)(1,619.4) 1,231.8 74.0(296.1)
Other revenues and premiums 5.3 5.4 6.7 6.8 6.5 8.9 10.9 11.8
Total revenues 68.1 42.5 798.2(978.8)(1,278.8) 1,562.6 440.5 70.6
Benefits and expenses
Interest credited and other benefits to contract owners/policyholders(107.6) 84.1(286.4) 196.3(135.3)(623.6)(115.6)(8.4)
Operating expenses and interest expense(113.3)(113.3)(113.6)(110.2)(100.5)(104.1)(109.1)(107.5)
Net amortization of DAC/VOBA(14.5)(12.5)(16.3)(15.0) 5.5(21.9)(19.5)(19.4)
Total benefits and expenses(235.4)(41.7)(416.3) 71.1(230.3)(749.6)(244.2)(135.3)
Income (loss) before income taxes(167.3) 0.8 381.9(907.7)(1,509.1) 813.0 196.3(64.7)
Three Months Ended
12/31/12 9/30/12 6/30/12 3/31/12 12/31/11 9/30/11 6/30/11 3/31/11
The following table presents notable items that result in volatility in income (loss) before income
taxes:
Net gains (losses) related to incurred guaranteed benefits and guarantee hedge program,
excluding nonperformance risk (1)(18.0)(449.7)(74.1)(316.5)(1,479.0)(342.2)(78.4)(162.7)
Gains (losses) related to CHO program (1) 18.5(146.2) 64.1(287.4)(171.7) 70.1(19.3)(9.0)
Gain (loss) due to nonperformance risk (1)(401.4) 358.9 170.4(571.5)(141.5) 797.8 17.4(156.7)
Net investment gains (losses) (1)(0.6)(3.1) 8.5 21.9(2.0) 56.5 14.1(5.1)
DAC/VOBA and other intangibles unlocking and loss recognition 0.3 2.8(1.5) 0.2 24.1(3.4) 0.2 0.2
(1) Amounts exclude net amortization of DAC/VOBA and other intangibles.
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Closed Block Variable Annuity Death and Living Benefits
Balances as of
(in millions USD) 12/31/12 9/30/12 6/30/12 3/31/12 12/31/11 9/30/11 6/30/11 3/31/11
Death and living benefits-account value
GMAB/GMWB 1,048.1 1,119.3 1,137.1 1,237.0 1,190.4 1,179.0 1,418.0 1,513.2 GMIB 14,904.0 15,113.5 14,714.5 15,573.8 14,590.2 13,867.0 16,401.0 16,782.1 GMWBL 15,612.0 15,745.9 15,328.3 16,002.2 15,106.1 14,437.0 16,511.0 16,382.1 No living benefits 10,976.1 11,251.9 11,097.1 11,802.0 11,293.4 10,967.0 12,873.0 13,676.3
Total* 42,540.1 43,230.5 42,277.0 44,615.0 42,180.1 40,450.0 47,203.0 48,353.8
Discounted net amount at risk (after reinsurance)
Total DB NAR 7,029.1 7,025.5 7,956.2 6,901.6 8,894.0 10,665.0 6,524.0 6,306.0
GMAB/GMWB 42.4 44.2 55.7 46.2 70.7 102.0 71.0 46.0 GMIB 3,576.0 3,531.3 3,861.7 2,688.6 3,714.0 4,418.1 1,481.9 1,155.0 GMWBL 1,702.5 1,837.3 2,170.4 1,625.2 2,046.3 2,391.1 402.0 208.1
Total LB NAR 5,320.8 5,412.9 6,087.9 4,360.0 5,830.9 6,911.3 1,955.0 1,409.1
*Excludes assets associated with Payout Reserves, Policy Loans, and Life Insurance Business
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Closed Block Variable Annuity AUM Rollforward
Three Months Ended
12/31/12 9/30/12 6/30/12 3/31/12 12/31/11 9/30/11 6/30/11 3/31/11
(in millions USD)
Balance as of beginning of period 43,842.2 42,843.4 45,133.8 42,645.5 40,845.9 47,565.5 48,670.1 47,977.7
Deposits 127.1 115.2 132.7 125.4 136.0 118.4 143.0 145.8
Surrenders, benefits, and product charges(1,076.6)(953.3)(967.6)(1,021.8)(962.1)(1,016.8)(1,191.4)(1,162.5)
Net cash flow(949.5)(838.1)(834.8)(896.4)(826.0)(898.4)(1,048.4)(1,016.8)
Interest credited and investment performance 305.7 1,836.9(1,455.5) 3,384.7 2,625.6(5,821.2)(56.2) 1,709.2
Balance as of end of period* 43,198.4 43,842.2 42,843.4 45,133.8 42,645.5 40,845.9 47,565.5 48,670.1
Assets Under Management
General account 1,237.6 1,188.5 1,147.7 1,107.2 1,069.4 1,028.3 1,011.2 978.3
Separate account 41,960.8 42,653.7 41,695.7 44,026.6 41,576.1 39,817.6 46,554.3 47,691.7
Total* 43,198.4 43,842.2 42,843.4 45,133.8 42,645.5 40,845.9 47,565.5 48,670.1
Payout Reserves, included above
Reserves, end of period 607.8 561.4 515.7 464.0 413.8 346.0 0 305.1 257.2
*Includes assets associated with Payout Reserves, Policy Loans, and Life Insurance Business
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Portfolio Composition
Balances as of
12/31/12 9/30/12 6/30/12 3/31/12 12/31/11 9/30/11 6/30/11 3/31/11
(in millions USD) Amount% of Total Amount% of Total Amount% of Total Amount% of Total Amount% of Total Amount% of Total Amount% of Total Amount% of Total
Composition of Investment Portfolio
Fixed maturities, available for sale, at fair value, before consolidation 70,995.5 71,077.1 67,961.6 66,510.8 67,455.9 64,983.8 63,718.5 63,401.7
CLOs Adjustments(1)(84.1)(79.4)(73.5)(80.5)(77.6)(98.3)(113.2)(113.8)
VOEs Adjustments(1)(1.1) 40.7 35.1 34.3 27.3 29.4 27.3 27.9
Fixed maturities, available for sale, at fair value, after consolidation 70,910.3 74.2% 71,038.4 74.6% 67,923.2 71.3% 66,464.6 73.8% 67,405.6 72.7% 64,914.9 70.6% 63,632.6 73.3% 63,315.8 72.8%
Fixed maturities, at fair value using the fair value option 2,771.3 2.8% 2,875.1 3.0% 3,145.9 3.3% 3,064.1 3.4% 3,010.3 3.2% 2,991.2 3.3% 2,687.2 3.1% 2,722.6 3.1%
Equity securities, available for sale, at fair value 340.1 0.4% 328.9 0.4% 343.0 0.4% 354.2 0.4% 353.8 0.4% 436.2 0.5% 504.4 0.6% 515.7 0.6%
Short-term investments 5,991.2 6.3% 3,637.4 3.8% 5,765.9 6.0% 3,073.3 3.4% 3,572.7 3.8% 4,459.6 4.9% 2,473.1 2.8% 2,574.0 3.0%
Mortgage loans on real estate 8,662.3 9.1% 8,682.6 9.1% 8,953.2 9.4% 8,929.0 9.9% 8,691.1 9.5% 8,743.6 9.5% 8,652.9 9.9% 8,314.9 9.6%
Loans—Dutch State Obligation—0.0% 1,503.6 1.6% 1,596.9 1.7% 1,645.0 1.8% 1,792.7 1.9% 1,921.8 2.1% 2,031.5 2.3% 2,149.1 2.5%
Policy loans 2,200.3 2.3% 2,212.9 2.3% 2,209.0 2.3% 2,224.1 2.5% 2,263.9 2.4% 2,268.2 2.5% 2,347.8 2.7% 2,361.2 2.7%
Limited partnerships/corporations, before consolidation 1,031.0 1,470.4 1,497.2 1,837.6 1,769.7 1,903.3 1,878.1 1,780.7
VOEs Adjustments(1)(565.9)(955.6)(965.6)(1,210.8)(1,170.1)(1,255.0)(1,210.9)(1,002.9)
Limited partnerships/corporations, after consolidation 465.1 0.5% 514.8 0.5% 531.6 0.6% 626.8 0.7% 599.6 0.6% 648.3 0.7% 667.2 0.8% 777.8 0.9%
Derivatives 2,374.5 2.5% 2,733.7 2.9% 2,983.1 3.1% 2,043.9 2.3% 2,660.9 2.9% 2,694.1 2.9% 995.6 1.1% 748.4 0.9%
Other investments 167.0 0.2% 205.1 0.2% 206.9 0.2% 207.1 0.2% 215.1 0.2% 200.2 0.2% 200.5 0.2% 209.7 0.2%
Securities pledged to creditors 1,605.5 1.7% 1,462.2 1.6% 1,657.4 1.7% 1,435.4 1.6% 2,253.5 2.4% 2,585.7 2.8% 2,784.2 3.2% 3,183.4 3.7%
Total investments, after consolidation 95,487.6 100.0% 95,194.7 100.0% 95,316.1 100.0% 90,067.5 100.0% 92,819.2 100.0% 91,863.8 100.0% 86,977.0 100.0% 86,872.6 100.0%
Fixed Maturity Securities—Security Sector (2)
U.S. Government agencies and authorities 6,607.9 8.8% 6,769.9 9.0% 6,149.9 8.5% 5,277.5 7.4% 6,700.3 9.2% 5,327.8 7.6% 5,413.8 7.8% 5,564.3 8.0%
U.S. Corporate—Public 31,597.4 41.9% 30,568.2 40.5% 29,280.1 40.2% 28,182.0 39.7% 28,377.9 39.1% 27,307.2 38.7% 25,460.7 36.8% 24,465.6 35.3%
U.S. Corporate—Private 5,566.5 7.4% 5,486.5 7.3% 5,272.3 7.2% 5,140.5 7.3% 5,095.2 7.0% 5,308.1 7.5% 4,965.5 7.2% 4,913.0 7.1%
Foreign Government / Agency 1,190.0 1.6% 1,181.9 1.6% 1,132.9 1.6% 1,056.8 1.5% 917.9 1.3% 1,009.7 1.4% 1,069.2 1.6% 1,317.6 1.9%
Foreign Corporate—Public 6,476.7 8.6% 6,146.7 8.1% 5,857.9 8.1% 5,994.7 8.5% 6,216.5 8.6% 6,130.6 8.7% 6,426.5 9.3% 6,631.3 9.6%
Foreign Corporate—Private 8,317.8 11.0% 8,351.0 11.1% 8,227.4 11.3% 8,158.0 11.5% 7,933.0 10.9% 7,867.4 11.2% 7,768.4 11.3% 7,387.0 10.6%
State, municipalities and political subdivisions 352.8 0.5% 350.9 0.5% 349.7 0.5% 392.2 0.6% 393.9 0.5% 406.9 0.6% 373.8 0.5% 396.4 0.6%
Residential mortgaged-backed securities: —
CMO-B Agency 3,066.4 4.1% 3,288.5 4.4% 3,841.7 5.3% 3,783.6 5.3% 3,836.7 5.3% 3,896.0 5.5% 3,725.0 5.4% 3,708.7 5.4%
CMO-B Non-Agency 582.8 0.8% 612.1 0.8% 698.0 1.0% 710.5 1.0% 763.8 1.0% 828.7 1.2% 786.4 1.1% 827.4 1.2%
Agency 2,779.7 3.7% 3,475.4 4.6% 2,941.7 4.0% 2,863.6 4.0% 2,953.8 4.1% 2,812.3 4.0% 2,386.2 3.5% 2,288.4 3.3%
Non-Agency(3) 2,193.9 2.9% 2,255.8 3.0% 2,258.0 3.1% 2,399.0 3.4% 2,454.5 3.4% 2,638.5 3.7% 3,334.1 4.8% 3,780.1 5.5%
Total Residential mortgage-backed securities 8,622.8 11.5% 9,631.8 12.8% 9,739.4 13.4% 9,756.7 13.7% 10,008.8 13.8% 10,175.5 14.4% 10,231.7 14.8% 10,604.6 15.4%
Commercial mortgage-backed securitie 4,946.4 6.6% 5,217.0 6.9% 5,197.5 7.1% 5,481.4 7.7% 5,485.4 7.5% 5,466.4 7.8% 5,875.7 8.5% 6,306.2 9.1%
Other asset-backed securities(3) 1,608.8 2.1% 1,671.8 2.2% 1,519.4 2.1% 1,524.3 2.1% 1,540.5 2.1% 1,492.2 2.1% 1,518.7 2.2% 1,635.9 2.4%
Total fixed maturities, including securities pledged 75,287.1 100.0% 75,375.7 100.0% 72,726.5 100.0% 70,964.1 100.0% 72,669.4 100.0% 70,491.8 100.0% 69,104.0 100.0% 69,221.9 100.0%
Fixed Maturity Securities—Contractual Maturity Dates
Due to mature:
Due in one year or less 2,918.1 3.9% 2,980.3 4.0% 2,719.9 3.7% 2,371.7 3.3% 2,885.5 4.0% 2,754.6 3.9% 2,576.0 3.7% 2,010.9 2.9%
Due after one year through five years 15,353.4 20.4% 15,013.6 19.9% 14,273.8 19.6% 13,536.7 19.1% 14,543.9 20.0% 13,787.7 19.6% 14,174.3 20.5% 14,849.8 21.4%
Due after five years through ten years 19,179.7 25.5% 18,554.3 24.6% 18,014.0 24.8% 17,865.4 25.2% 17,753.2 24.4% 17,231.4 24.4% 16,424.7 23.8% 16,052.9 23.2%
Due after ten years 22,657.9 30.1% 22,306.9 29.6% 21,262.5 29.3% 20,427.9 28.9% 20,452.1 28.1% 19,584.0 27.8% 18,302.9 26.5% 17,761.6 25.6%
C-MOB 3,649.2 4.8% 3,900.6 5.2% 4,539.7 6.2% 4,494.1 6.3% 4,600.5 6.3% 4,724.7 6.7% 4,511.4 6.5% 4,536.1 6.6%
Mortgage-backed securities 9,920.0 13.2% 10,948.2 14.5% 10,397.2 14.3% 10,744.0 15.1% 10,893.7 15.1% 10,917.2 15.5% 11,596.0 16.8% 12,374.7 17.9%
Other asset-backed securities(3) 1,608.8 2.1% 1,671.8 2.2% 1,519.4 2.1% 1,524.3 2.1% 1,540.5 2.1% 1,492.2 2.1% 1,518.7 2.2% 1,635.9 2.4%
Total fixed maturities, including securities pledged 75,287.1 100.0% 75,375.7 100.0% 72,726.5 100.0% 70,964.1 100.0% 72,669.4 100.0% 70,491.8 100.0% 69,104.0 100.0% 69,221.9 100.0%
Fixed Maturity Securities—NAIC Quality Designation
NAIC Quality Designation
1 42,197.7 56.1% 42,964.1 57.0% 41,404.0 56.9% 40,017.1 56.4% 42,279.7 58.2% 41,723.5 59.2% 41,237.6 59.7% 41,193.8 59.5%
2 29,245.1 38.9% 28,571.7 37.9% 27,474.3 37.8% 26,887.1 37.8% 26,155.9 36.0% 24,914.5 35.3% 23,519.2 34.0% 23,418.6 33.8%
3 2,670.7 3.5% 2,794.8 3.7% 2,785.3 3.8% 2,975.1 4.2% 3,045.7 4.2% 2,856.6 4.1% 3,382.8 4.9% 3,241.3 4.7%
4 699.8 0.9% 534.1 0.7% 474.1 0.7% 544.5 0.8% 629.7 0.9% 832.3 1.2% 764.2 1.1% 945.9 1.4%
5 254.8 0.3% 251.1 0.3% 320.8 0.4% 504.9 0.7% 390.0 0.5% 95.4 0.1% 97.2 0.1% 214.8 0.3%
6 219.0 0.3% 259.9 0.4% 268.0 0.4% 35.4 0.1% 168.4 0.2% 69.5 0.1% 103.0 0.2% 207.5 0.3%
Total fixed maturities, including securities pledged(4) 75,287.1 100.0% 75,375.7 100.0% 72,726.5 100.0% 70,964.1 100.0% 72,669.4 100.0% 70,491.8 100.0% 69,104.0 100.0% 69,221.9 100.0%
Fixed Maturity Securities—ARO Quality Rating
ARO Quality Rating
AAA 16,752.5 22.3% 17,963.9 23.8% 17,418.1 23.9% 16,790.1 23.7% 18,630.8 25.7% 17,281.7 24.5% 17,438.1 25.2% 17,850.2 25.8%
AA 4,067.1 5.4% 3,777.3 5.0% 3,602.6 5.0% 3,620.5 5.1% 3,946.3 5.4% 4,059.7 5.8% 4,412.7 6.4% 4,720.3 6.8%
A 19,414.6 25.8% 19,133.8 25.4% 18,473.4 25.4% 17,707.2 25.0% 18,098.1 24.9% 18,102.5 25.7% 17,256.6 25.0% 16,801.7 24.3%
BBB 29,445.1 39.1% 29,034.0 38.5% 27,860.2 38.3% 27,208.4 38.3% 26,303.7 36.2% 25,271.8 35.9% 24,156.1 34.9% 23,971.2 34.7%
BB 2,865.1 3.8% 2,876.4 3.8% 2,766.3 3.8% 2,980.9 4.2% 2,998.6 4.1% 2,922.0 4.1% 3,163.0 4.6% 2,867.6 4.1%
B and below 2,742.7 3.6% 2,590.3 3.5% 2,605.9 3.6% 2,657.0 3.7% 2,691.9 3.7% 2,854.1 4.0% 2,677.5 3.9% 3,010.9 4.3%
Total fixed maturities, including securities pledged 75,287.1 100.0% 75,375.7 100.0% 72,726.5 100.0% 70,964.1 100.0% 72,669.4 100.0% 70,491.8 100.0% 69,104.0 100.0% 69,221.9 100.0%
(1) Adjustments include the elimination of intercompany transactions between the Company and its consolidated investment
entities, primarily the elimination of the Company’s equity at risk recorded as investments by the Company (before consolidation)
against either equity (private equity and real estate partnership funds) or senior and subordinated debt (CLOs) of the funds.
Fixed Maturity Securities includes fixed maturities,available for sale,fixed maturities at fair value using the fair value option and securities pledged to creditors.
Subprime asset-backed securities are included as a component of Non-Agency RMBS under this presentation.
ARO ratings do not directly translate into NAIC ratings.
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Portfolio Results
Three Months Ended
12/31/12 9/30/12 6/30/12 3/31/12 12/31/11 9/30/11 6/30/11 3/31/11
(in millions USD)
Net Investment Annualized Net Investment Annualized Net Investment Annualized Net Investment Annualized Net Investment Annualized Net Investment Annualized Net Investment Annualized Net Investment Annualized
Operating investment income and annualized yield Income Yield Income Yield Income Yield Income Yield Income Yield Income Yield Income Yield Income Yield
Fixed maturity securities(1) 854.6 5.23% 872.7 5.42% 898.1 5.72% 890.0 5.56% 931.2 5.86% 899.6 5.78% 918.8 5.87% 895.8 5.
Equity securities 3.2 3.77% 5.4 6.81% 5.9 7.14% 3.2 3.67% 3.1 3.60% 5.7 5.36% 7.6 6.21% 10.9 8.
Mortgage loans 114.0 5.42% 119.0 5.50% 120.2 5.44% 122.4 5.67% 125.6 5.92% 119.5 5.69% 118.2 5.72% 116.8 5.
Limited partnerships 17.4 6.98% 22.2 6.22%(47.8) -11.98% 60.7 14.13%(95.2) -19.36% 43.2 9.50% 127.0 31.06% 44.1 10.
Policy loans 30.0 5.60% 30.1 5.60% 30.7 5.72% 30.7 5.68% 31.0 5.64% 29.4 5.32% 32.3 5.66% 32.9 5.
Dutch state obligation (Alt-A transaction) 1.6 0.91% 4.3 1.10% 4.4 1.09% 3.8 0.91% 4.1 0.92% 1.3 0.27% 2.7 0.53% 3.7 0.
Short-term investments 1.5 0.10% 1.0 0.11% 2.1 0.14% 0.8 0.10% 0.2 0.02% 2.1 0.19% 2.2 0.36% 2.2 0.
Derivatives(1)(13.9) N/A(9.0) N/A(18.3) N/A(15.0) N/A(17.5) N/A(20.5) N/A(76.2) N/A(54.0)
Pre-payment fee income 17.9 0.08% 13.7 0.06% 17.3 0.08% 20.6 0.10% 14.2 0.07% 17.7 0.08% 29.9 0.15% 9.4 0.
Other assets 11.0 N/A(1.6) N/A 5.5 N/A 8.2 N/A(15.6) N/A(0.3) N/A(2.2) N/A 12.3
Gross investment income before expenses and fees 1,037.3 4.94% 1,057.8 5.14% 1,018.1 4.89% 1,125.4 5.50% 981.1 4.78% 1,097.7 5.37% 1,160.3 5.79% 1,074.1 5.
Expenses and fees(41.4) -0.20%(40.0) -0.20%(41.8) -0.21%(41.7) -0.21%(39.0) -0.19%(45.1) -0.23%(43.2) -0.22%(44.6) -0.
Total investment income and annualized yield 995.9 4.74% 1,017.8 4.94% 976.3 4.68% 1,083.7 5.29% 942.1 4.59% 1,052.6 5.14% 1,117.1 5.57% 1,029.5 5.
Less: Closed Block Variable Annuity (CBVA) investment income net of expenses and fees 17.3 12.2 5.8 17.5 30.7 7.8 22.4 24.9
Total investment income, excluding CBVA 978.6 1,005.6 970.5 1,066.2 911.4 1,044.8 1,094.7 1,004.6
Trading Gains/Losses
Fixed Maturities 45.9 194.9 56.3 111.3 101.3 161.8 165.4 33.0
Equity securities 2.4 0.1(0.9) 2.6 5.6 1.5 7.9 4.3
Mortgage loans 7.7 -(0.4) 0.4 1.7 1.5 1.8 0.7
Other investments(21.9) 9.0(1.5)(7.5)(0.8) 1.8(0.9)(0.6)
Total Trading Gains/Losses, excluding CBVA 34.1 204.0 53.5 106.8 107.8 166.6 174.2 37.4
Impairments
Fixed Maturities(20.2)(11.0)(5.8)(6.8)(94.9)(146.9)(81.2)(146.5)
Equity securities — — — —
Mortgage loans(7.7) — -(0.6)(5.3)(0.3)(1.6)
Other investments -(1.4) — — —
Total Impairments, excluding CBVA(27.9)(12.4)(5.8)(6.8)(95.5)(152.2)(81.5)(148.1)
Fair Value Adjustments(2)(9.3) 44.0 85.4(6.3) 32.4 46.5 102.8 87.9
Derivatives, including Change in Fair Value of Derivatives related to
Guaranteed Benefits, excluding CBVA 22.9 49.2 4.0 133.9(96.0)(315.6)(135.8) 79.1
Net Realized Investment Gains (losses) and Net Guaranteed Benefit
Hedging Gains (losses), excluding CBVA 19.8 284.8 137.1 227.6(51.3)(254.7) 59.7 56.3
CBVA Investment Income and Realized Capital Gains (Losses)(250.1)(270.8) 486.6(1,295.8)(1,588.6) 1,239.5 96.5(271.3)
Business Sold Through MODCO REINS(3)(6.9) 18.8 21.5(1.1) 2.0 58.0 14.5(6.4)
Consolidation/eliminations(4)(70.2) 55.4 8.9 30.6 99.5(6.3)(100.9) 35.4
Total Investment Income and Realized Capital Gains (Losses 671.2 1,093.8 1,624.6 27.5(627.0) 2,081.3 1,164.5 818.6
Operating income from CMO-B portfolio assets, including derivatives, is included in fixed maturity securities.
Fair value adjustments include adjustments related to CMO-B assets carried at fair value, among other income sources.
Income related to the Hannover Life Re Modco reinsurance transaction, in which the risk associated with these policies has been transferred to Hannover Life Re.
Consolidation/eliminations includes:
-The impact of consolidation of investment entities into the Consolidated Statements of Operations, net of the elimination of the Company’s management fees expensed by the funds and recorded as operating revenues (before consolidation) by the Company; -The elimination of intersegment expenses, primarily consisting of asset-based management and administration fees charged by our Investment Management Segment; -Other intersegment eliminations.
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Alternative Investment Income
(in millions USD) Three Months Ended
12/31/12 9/30/12 6/30/12 3/31/12 12/31/11 9/30/11 6/30/11 3/31/11
Retirement
Average alternative investments 292.2 505.0 624.8 670.2 770.4 751.6 702.6 682.4
Alternative investment income 0.9 2.6 14.8 24.9(38.2) 18.8 55.9 6.1
Annuities
Average alternative investments 188.5 277.3 313.2 358.5 347.5 323.0 302.8 288.8
Alternative investment income 2.0 2.0 9.5 12.3(15.8) 8.8 24.8 4.8
Investment Management
Average alternative investments 129.2 114.3 100.1 86.3 89.1 92.8 104.9 105.7
Alternative investment income 5.6 19.5 11.1 5.4(9.1) 1.0 10.9 6.2
Individual Life
Average alternative investments 133.5 195.5 225.3 235.7 264.0 252.7 236.7 225.9
Alternative investment income(0.3) 0.7 5.9 5.8(11.4) 6.2 21.8 2.9
Employee Benefits
Average alternative investments 29.7 52.5 65.3 69.4 81.5 81.1 76.8 73.8
Alternative investment income 0.1 0.4 1.4 2.6(3.7) 2.3 7.2 1.0
Total Ongoing Business
Average alternative investments 773.1 1,144.6 1,328.7 1,420.1 1,552.5 1,501.2 1,423.8 1,376.6
Alternative investment income 8.3 25.2 42.7 51.0(78.2) 37.1 120.6 21.0
Corporate
Average alternative investments 101.6 96.5 93.5 90.5 86.3 86.8 85.1 80.0
Alternative investment income 5.1 6.3 6.9 5.1 1.8 5.5 7.7 -
Closed Blocks (1)
Average alternative investments 41.5 80.4 111.2 120.6 29.4 103.1 133.1 126.1
Alternative investment income 4.0 0.7 2.3 4.6(0.9) 0.2 9.4 2.0
Total ING U.S.
Average alternative investments 916.2 1,321.5 1,533.4 1,631.2 1,668.2 1,691.1 1,642.0 1,582.7
Alternative investment income 17.4 32.2 51.9 60.7(77.3) 42.8 137.7 23.0
(1) Our Closed Block Variable Annuity segment is
managed to focus on protecting regulatory and rating
agency capital rather than achieving operating metrics
and, therefore, its results of operations are not reflected
within investment income.
* The investment income on alternative investments
shown above for the period ended June 30, 2012
excludes the $92.0 million net loss on the sale of certain
alternative investments during the period.
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Unrealized Gains (Losses)
(in millions USD)
Fixed maturities, at fair value, using the fair value optio
Aging Schedule
Balances as of
12/31/12 9/30/12 6/30/12 3/31/12 12/31/11 9/30/11 6/30/11 3/31/11
Amount% of Total Amount% of Total Amount% of Total Amount% of Total Amount% of Total Amount% of Total Amount% of Total Amount% of Total
Less than 20%(150.6) 51.4%(172.5) 46.2%(285.1) 44.6%(321.6) 50.4%(447.4) 48.8%(640.2) 56.1%(580.6) 64.4%(682.9) 69.8%
20% or more for less than six months(11.4) 3.9%(31.0) 8.3%(65.5) 10.3%(27.6) 4.3%(166.1) 18.1%(212.8) 18.6%(66.3) 7.3%(42.1) 4.3%
20% or more for six months or greater(130.7) 44.7%(169.7) 45.5%(288.3) 45.1%(289.4) 45.3%(304.0) 33.1%(289.5) 25.3%(255.8) 28.3%(252.8) 25.9%
Total Unrealized Loss(292.7) 100.0%(373.2) 100.0%(638.9) 100.0%(638.6) 100.0%(917.5) 100.0%(1,142.5) 100.0%(902.7) 100.0%(977.8) 100.0%
Total Unrealized Gain 8,155.7 8,277.8 7,133.2 6,128.1 6,464.3 6,097.6 4,305.4 4,029.7
Net Unrealized Gain/Loss 7,863.0 7,904.6 6,494.3 5,489.5 5,546.8 4,955.1 3,402.7 3,051.9
Fixed Maturities Securities—Security Sector—Net Unrealized
Gain/(Loss)*
US Treasuries and US government agencies and authorities 768.2 835.8 845.2 518.6 773.4 744.8 37.7(42.2)
US Corporate—Public 3,592.5 3,638.9 2,897.1 2,320.7 2,514.9 2,192.3 1,251.8 1,018.7
US Corporate—Private 585.3 607.0 532.6 492.4 471.7 485.8 370.5 303.0
Foreign Government / Agency 120.6 109.9 74.8 70.5 83.0 65.6 84.4 80.3
Foreign Corporate—Public 640.8 601.8 404.9 391.1 345.5 245.3 291.5 274.0
Foreign Corporate—Private 831.9 848.7 745.1 676.4 597.0 551.6 477.8 364.1
State, municipalities, and political subdivisions 32.6 29.4 28.0 23.6 18.8(5.5)(27.4)(32.4)
Residential mortgaged-backed securities: -
CMO-B Agency 551.1 587.4 710.4 701.2 771.7 816.9 834.2 836.9
CMO-B Non-Agency 136.0 134.2 179.0 186.2 196.6 220.3 185.5 174.4
Agency 67.4 90.2 78.0 72.7 81.8 82.9 56.5 33.9
Non-Agency(41.8)(111.3)(304.9)(324.9)(463.4)(456.8)(372.9)(309.3)
Total Residential mortgage-backed securities 712.7 700.5 662.5 635.2 586.7 663.3 703.3 735.9
Commercial Mortgage-Backed Securities 507.5 457.5 239.5 298.6 98.3(47.8) 170.5 306.8
Other Asset-Backed Securities* 70.9 75.1 64.6 62.4 57.5 59.7 42.6 43.7
Total Net Unrealized Gain/Loss 7,863.0 7,904.6 6,494.3 5,489.5 5,546.8 4,955.1 3,402.7 3,051.9
* Subprime asset-backed securities are included as a component of Non-Agency RMBS under this presentation.
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Asset Backed Securities
(in millions USD)
RMBS Balances by Collateral Type
Balances as of
12/31/12 9/30/12 6/30/12 3/31/12 12/31/11 9/30/11 6/30/11 3/31/11
Amortized Amortized Amortized Amortized Amortized Amortized Amortized Amortized
Fair Value Cost Fair Value Cost Fair Value Cost Fair Value Cost Fair Value Cost Fair Value Cost Fair Value Cost Fair Value Cost
Prime Agency 5,844.8 5,070.0 6,763.9 5,929.3 6,783.4 5,821.7 6,647.2 5,706.6 6,790.5 5,754.8 6,706.8 5,608.1 6,109.5 5,054.2 5,995.4 4,984.3
Prime / Non-Agency 1,399.4 1,215.3 1,503.2 1,312.7 1,621.0 1,439.9 1,712.3 1,539.5 1,833.3 1,695.0 1,996.8 1,846.5 2,072.3 1,931.4 2,204.7 2,070.7
Alt-A RMBS 411.3 389.2 415.2 407.4 399.7 431.9 418.4 450.7 410.8 470.8 450.0 491.6 464.3 514.3 499.3 540.6
Subprime Mortgage-Backed Securities 967.3 998.0 949.5 1,039.1 935.3 1,122.5 978.8 1,184.0 974.2 1,241.2 1,021.9 1,287.8 1,585.6 1,796.3 1,905.2 2,067.0
Total 8,622.8 7,672.5 9,631.8 8,688.5 9,739.4 8,816.0 9,756.7 8,880.8 10,008.8 9,161.8 10,175.5 9,234.0 10,231.7 9,296.2 10,604.6 9,662.6
CMBS Balances by Year of Origination
Balances as of
12/31/12 9/30/12 6/30/12 3/31/12 12/31/11 9/30/11 6/30/11 3/31/11
Amortized Amortized Amortized Amortized Amortized Amortized Amortized Amortized
Fair Value Cost Fair Value Cost Fair Value Cost Fair Value Cost Fair Value Cost Fair Value Cost Fair Value Cost Fair Value Cost
2008 12.9 11.1 15.3 13.0 15.2 14.6 15.8 14.8 14.9 14.8 14.4 14.8 15.2 14.8 15.6 14.6
2007 1,850.3 1,636.8 2,018.7 1,841.4 1,898.2 1,860.7 1,930.9 1,878.0 1,829.8 1,899.6 1,758.5 1,909.4 1,902.0 1,935.2 2,040.3 1,990.2
2006 1,493.7 1,315.8 1,494.1 1,333.5 1,449.7 1,357.1 1,482.3 1,365.9 1,451.5 1,390.7 1,436.6 1,425.8 1,539.4 1,469.2 1,679.5 1,555.0
2005 and prior 1,589.5 1,475.2 1,688.9 1,571.6 1,834.4 1,725.6 2,052.4 1,924.1 2,189.2 2,082.0 2,256.9 2,164.2 2,419.1 2,286.0 2,570.8 2,439.6
Total 4,946.4 4,438.9 5,217.0 4,759.5 5,197.5 4,958.0 5,481.4 5,182.8 5,485.4 5,387.1 5,466.4 5,514.2 5,875.7 5,705.2 6,306.2 5,999.4
Other ABS Balances by Loan
Classification
Balances as of
12/31/12 9/30/12 6/30/12 3/31/12 12/31/11 9/30/11 6/30/11 3/31/11
Amortized Amortized Amortized Amortized Amortized Amortized Amortized Amortized
Fair Value Cost Fair Value Cost Fair Value Cost Fair Value Cost Fair Value Cost Fair Value Cost Fair Value Cost Fair Value Cost
Credit Card Receivables 651.7 614.8 671.4 631.9 619.5 584.2 647.0 615.0 663.2 632.1 645.5 612.3 669.3 647.5 733.3 718.8
Automobile Receivables 535.2 531.1 573.8 568.8 460.0 456.9 422.5 420.1 429.5 428.4 356.8 355.0 286.7 285.1 299.7 298.9
CLO’s * 66.1 68.0 82.1 86.0 75.2 84.5 78.5 84.3 71.4 83.3 97.6 112.8 183.0 192.0 212.9 208.0
Other 355.8 334.2 344.5 321.5 364.7 343.4 376.3 356.2 376.4 356.4 392.3 369.4 379.7 362.4 390.0 376.5
Total 1,608.8 1,548.1 1,671.8 1,608.2 1,519.4 1,469.0 1,524.3 1,475.6 1,540.5 1,500.2 1,492.2 1,449.5 1,518.7 1,487.0 1,635.9 1,602.2
* Excludes consolidated CLO’s
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RMBS Securities Summary
(in millions USD)
RMBS*
By Rating and Origination Year
As of December 31, 2012
Prime Agency Prime/Non-Agency Alt-A RMBS Subprime Mortgage-Backed Total
Securities
NAIC Rating Fair Value Amortized Cost Fair Value Amortized Cost Fair Value Amortized Cost Fair Value Amortized Cost Fair Value Amortized Cost
1 5,818.5 5,039.6 730.6 637.2 140.5 120.2 582.6 551.2 7,272.2 6,348.2
2 10.3 12.3 148.3 152.1 48.9 50.5 115.2 122.3 322.7 337.2
3 10.1 12.2 163.9 165.3 77.3 71.2 161.3 188.7 412.6 437.4
4 5.9 5.9 113.9 113.7 110.5 112.0 78.5 96.7 308.8 328.3
5 — 54.9 39.1 30.9 31.6 27.5 36.3 113.3 107.0
6 — 187.8 107.9 3.2 3.7 2.2 2.8 193.2 114.4
Total by rating 5,844.8 5,070.0 1,399.4 1,215.3 411.3 389.2 967.3 998.0 8,622.8 7,672.5
Prime Agency Prime/Non-Agency Alt-A RMBS Subprime Mortgage-Backed Total
Securities
ARO Rating Fair Value Amortized Cost Fair Value Amortized Cost Fair Value Amortized Cost Fair Value Amortized Cost Fair Value Amortized Cost
AAA 5,800.1 5,020.7 42.0 40.4 0.7 0.8 10.9 10.5 5,853.7 5,072.4
AA 8.3 8.3 48.1 45.3 4.9 4.4 9.6 9.7 70.9 67.7
A — 158.0 152.2 6.4 6.2 52.0 53.5 216.4 211.9
BBB — 155.5 152.2 16.9 17.0 58.0 62.2 230.4 231.4
BB 10.1 12.2 89.8 82.6 20.0 20.8 111.8 124.8 231.7 240.4
B and below 26.3 28.8 906.0 742.6 362.4 340.0 725.0 737.3 2,019.7 1,848.7
Total by rating 5,844.8 5,070.0 1,399.4 1,215.3 411.3 389.2 967.3 998.0 8,622.8 7,672.5
Prime Agency Prime/Non-Agency Alt-A RMBS Subprime Mortgage-Backed Total
Securities
Origination Year Fair Value Amortized Cost Fair Value Amortized Cost Fair Value Amortized Cost Fair Value Amortized Cost Fair Value Amortized Cost
2012 511.8 511.1 — — — 511.8 511.1
2011 908.6 885.5 — — — 908.6 885.5
2010 932.9 910.2 32.9 31.6 — — 965.8 941.8
2009 361.7 356.6 17.4 17.6 — — 379.1 374.2
2008 242.7 221.9 — — — 242.7 221.9
2007 599.8 534.4 196.0 184.4 83.8 84.7 281.1 281.4 1,160.7 1,084.9
2006 691.9 504.5 321.2 231.3 106.3 83.2 356.3 348.5 1,475.7 1,167.5
2005 and prior 1,595.4 1,145.8 831.9 750.4 221.2 221.3 329.9 368.1 2,978.4 2,485.6
Total by origination year 5,844.8 5,070.0 1,399.4 1,215.3 411.3 389.2 967.3 998.0 8,622.8 7,672.5
* Subprime mortgage -backed securities are included in RMBS under this presentation
ING U.S.
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ING U.S.
CMBS and Other Asset-Backed Securities Summary
(in millions USD)
CMBS
By Rating and Vintage
As of December 31, 2012
AAA AA A BBB BB B & Below Total
Amortized Amortized Amortized Amortized Amortized Amortized
Origination Year Fair Value Cost Fair Value Cost Fair Value Cost Fair Value Cost Fair Value Cost Fair Value Cost Fair Value Amortized Cost
2008 1.7 1.7 — — 11.2 9.4 — — 12.9 11.1
2007 92.7 86.4 411.5 362.3 193.9 172.6 610.6 536.3 311.4 273.6 230.2 205.7 1,850.3 1,636.9
2006 615.7 550.7 254.4 224.8 211.9 187.2 227.6 204.6 137.1 105.4 47.0 43.0 1,493.7 1,315.7
2005 and prior 1,172.1 1,107.7 185.8 171.3 149.3 132.8 31.6 29.5 35.2 23.8 15.5 10.1 1,589.5 1,475.2
Total by origination year 1,882.2 1,746.5 851.7 758.4 555.1 492.6 881.0 779.8 483.7 402.8 292.7 258.8 4,946.4 4,438.9
Other Asset-Backed Securities*
By Rating and Classification
As of December 31, 2012
Credit Card Receivables Automobile Receivables CLO’s** Other Total
Amortized Amortized Amortized Amortized Amortized
ARO Rating Fair Value Cost Fair Value Cost Fair Value Cost Fair Value Cost Fair Value Cost
AAA 626.5 591.5 535.2 531.1 1.5—315.9 298.6 1,479.1 1,421.2
AA — — 14.3 13.1 0.5 0.5 14.8 13.6
A 22.7 20.8 — 39.7 35.2 16.5 18.0 78.9 74.0
BBB 2.5 2.5 — 7.8 6.8 16.9 15.8 27.2 25.1
BB — — — 1.1 1.1 1.1 1.1
B and below — — 2.8 12.9 4.9 0.2 7.7 13.1
Total by rating 651.7 614.8 535.2 531.1 66.1 68.0 355.8 334.2 1,608.8 1,548.1
Credit Card Receivables Automobile Receivables CLO’s** Other Total
Amortized Amortized Amortized Amortized Amortized
NAIC Designation Fair Value Cost Fair Value Cost Fair Value Cost Fair Value Cost Fair Value Cost
1 649.2 612.3 535.2 531.1 55.5 48.3 332.9 317.0 1,572.8 1,508.7
2 2.5 2.5 — 7.8 6.8 16.9 15.8 27.2 25.1
3 — — — 1.1 1.1 1.1 1.1
4 — — — — —
5 — — — — —
6 — — 2.8 12.9 4.9 0.3 7.7 13.2
Total by rating 651.7 614.8 535.2 531.1 66.1 68.0 355.8 334.2 1,608.8 1,548.1
Subprime asset-backed securities are excluded from Other Asset-Backed Securities and included in Non-Agency RMBS under this presentation.
Excludes consolidated CLO’s
ING U.S.
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ING U.S.
Mortgage Loans on Real Estate
(in millions USD)
Mortgage Loans on Real Estate by Region and Property Type
Balances as of
12/31/12 9/30/12 6/30/12 3/31/12 12/31/11 9/30/11 6/30/11 3/31/11
U.S. Region Amount % of Total Amount % of Total Amount % of Total Amount % of Total Amount % of Total Amount % of Total Amount % of Total Amount % of Total
Pacific 1,973.9 22.8% 2,065.6 23.7% 2,109.1 23.5% 2,147.0 24.1% 2,140.2 24.6% 2,197.9 25.1% 2,205.3 25.4% 2,089.0 25.1%
South Atlantic 1,687.6 19.4% 1,690.6 19.4% 1,762.2 19.7% 1,648.0 18.4% 1,555.4 17.9% 1,551.3 17.7% 1,505.4 17.4% 1,492.8 18.0%
Middle Atlantic 1,059.5 12.2% 1,054.5 12.1% 1,066.8 11.9% 1,099.5 12.3% 1,124.0 12.9% 1,121.1 12.8% 1,160.4 13.4% 1,181.5 14.2%
East North Central 962.8 11.1% 986.8 11.4% 1,047.8 11.7% 1,031.3 11.6% 1,010.4 11.6% 1,014.3 11.6% 881.3 10.2% 823.3 9.9%
West South Central 1,176.3 13.6% 1,107.9 12.8% 1,140.6 12.7% 1,145.1 12.8% 1,100.3 12.7% 1,121.2 12.8% 1,106.4 12.8% 1,025.0 12.3%
Mountain 718.2 8.3% 693.2 8.0% 743.3 8.3% 776.6 8.7% 776.9 8.9% 749.4 8.6% 804.4 9.3% 791.3 9.5%
West North Central 537.5 6.2% 525.9 6.1% 506.8 5.7% 495.1 5.5% 415.4 4.8% 421.0 4.8% 431.6 5.0% 385.3 4.6%
New England 334.6 3.9% 330.1 3.8% 340.0 3.8% 345.7 3.9% 320.0 3.7% 317.9 3.6% 320.1 3.7% 309.7 3.7%
East South Central 215.8 2.5% 232.5 2.7% 241.3 2.7% 245.6 2.7% 252.9 2.9% 254.7 3.0% 244.0 2.8% 223.3 2.7%
Total Commercial Mortgage Loans (1) 8,666.2 100.0% 8,687.1 100.0% 8,957.9 100.0% 8,933.9 100.0% 8,695.5 100.0% 8,748.8 100.0% 8,658.9 100.0% 8,321.2 100.0%
Property Type
Industrial 3,361.5 38.8% 3,354.8 38.5% 3,458.2 38.6% 3,467.6 38.8% 3,457.0 39.8% 3,443.6 39.4% 3,298.7 38.1% 3,071.0 36.9%
Retail 2,350.2 27.1% 2,167.5 25.0% 2,240.1 25.0% 2,230.2 24.9% 2,104.2 24.2% 2,084.5 23.8% 2,092.4 24.2% 1,923.8 23.1%
Office 1,284.7 14.8% 1,344.9 15.5% 1,420.2 15.9% 1,381.2 15.5% 1,384.5 15.9% 1,428.5 16.3% 1,400.1 16.2% 1,369.2 16.5%
Apartments 952.1 11.0% 974.2 11.2% 984.8 11.0% 992.1 11.1% 972.8 11.2% 1,011.5 11.6% 1,016.1 11.7% 1,050.2 12.6%
Hotel/Motel 280.6 3.2% 436.4 5.0% 438.3 4.9% 451.3 5.1% 468.4 5.4% 471.4 5.4% 512.0 5.9% 549.0 6.6%
Other 363.1 4.2% 334.9 3.9% 340.7 3.8% 335.3 3.7% 280.0 3.2% 280.3 3.2% 312.1 3.6% 330.2 4.0%
Mixed Use 74.0 0.9% 74.4 0.9% 75.6 0.8% 76.2 0.9% 28.6 0.3% 29.0 0.3% 27.5 0.3% 27.8 0.3%
Total Commercial Mortgage Loans 8,666.2 100.0% 8,687.1 100.0% 8,957.9 100.0% 8,933.9 100.0% 8,695.5 100.0% 8,748.8 100.0% 8,658.9 100.0% 8,321.2 100.0%
Loan Size
Under $5 million 1,683.0 19.4% 1,698.4 19.5% 1,718.4 19.2% 1,727.8 19.3% 1,783.1 20.5% 1,762.8 20.2% 1,778.9 20.5% 1,671.3 20.1%
$5 million but less than $10 million 1,641.1 18.9% 1,675.4 19.3% 1,674.6 18.7% 1,673.9 18.7% 1,646.6 18.9% 1,610.9 18.4% 1,554.2 17.9% 1,516.2 18.2%
$10 million but less than $20 million 1,578.6 18.2% 1,611.8 18.6% 1,593.8 17.8% 1,576.1 17.6% 1,577.5 18.1% 1,660.0 19.0% 1,581.7 18.3% 1,543.3 18.6%
$20 million but less than $30 million 753.2 8.7% 705.3 8.1% 718.2 8.0% 759.2 8.6% 822.4 9.5% 799.3 9.1% 855.3 9.9% 718.6 8.6%
$30 million and over 3,010.3 34.8% 2,996.2 34.5% 3,252.9 36.3% 3,196.9 35.8% 2,865.9 33.0% 2,915.8 33.3% 2,888.8 33.4% 2,871.8 34.5%
Total Commercial Mortgage Loans 8,666.2 100.0% 8,687.1 100.0% 8,957.9 100.0% 8,933.9 100.0% 8,695.5 100.0% 8,748.8 100.0% 8,658.9 100.0% 8,321.2 100.0%
Other Stats as ratios
LTV - Origination 57.7% 56.9% 56.6% 56.5% 56.3% 56.2% 55.3% 54.7%
LTV - Current 55.0% 53.8% 54.4% 54.6% 54.6% 53.4% 52.0% 51.0%
Debt Service Coverage 2.0 2.0 2.0 2.0 2.0 2.0 2.1 2.0
Other Stats in USD millions
60+day delinq (incl in process of foreclosure)
US GAAP Book Value 9.0 16.7 16.7 18.3 16.6 24.6 8.1 10.3
Allowance for loan losses 3.9 4.5 4.7 4.9 4.4 5.2 6.0 6.3
(1) Total Commercial Mortgage Loans shown includes allowance for loan losses.
ING U.S.
U.S. and Foreign Corporate Securities
(in millions USD)
Summary of Corporate Securities by
Industry Category
Balances as of
12/31/12 9/30/12 6/30/12 3/31/12 12/31/11 9/30/11 6/30/11 3/31/11
Fair Value% of Total Fair Value% of Total Fair Value% of Total Fair Value% of Total Fair Value% of Total Fair Value% of Total Fair Value% of Total Fair Value% of Total
Type Industry
Communications 3,670.9 9.6% 3,608.0 9.8% 3,438.1 9.8% 3,408.8 10.0% 3,586.3 10.4% 3,277.6 9.8% 3,278.2 10.3% 3,261.2 10.5%
Financial 5,579.5 14.7% 5,341.0 14.5% 5,399.7 15.4% 5,479.8 16.0% 5,644.8 16.3% 5,450.2 16.3% 5,641.9 17.7% 5,470.5 17.6%
Industrial and other companies 21,065.0 55.4% 19,999.6 54.5% 18,863.9 53.7% 18,119.1 53.0% 18,136.5 52.4% 17,431.2 52.1% 16,356.8 51.3% 16,008.3 51.5%
Public Utilities 6,718.7 17.6% 6,756.4 18.4% 6,513.1 18.5% 6,273.7 18.4% 6,288.4 18.2% 6,390.0 19.1% 5,795.5 18.2% 5,580.8 17.9%
Transportation 1,040.0 2.7% 1,009.9 2.8% 923.2 2.6% 895.3 2.6% 938.4 2.7% 888.8 2.7% 814.8 2.5% 776.1 2.5%
Sub-total 38,074.1 100.0% 36,714.9 100.0% 35,138.0 100.0% 34,176.7 100.0% 34,594.4 100.0% 33,437.8 100.0% 31,887.2 100.0% 31,096.9 100.0%
Communications 499.6 3.6% 498.5 3.6% 362.6 2.7% 363.2 2.7% 358.1 2.8% 364.3 2.8% 366.3 2.9% 388.7 3.2%
Financial 1,036.1 7.5% 1,040.5 7.5% 1,029.3 7.6% 1,033.9 7.8% 981.4 7.5% 1,162.5 8.8% 1,225.1 9.6% 1,205.1 9.8%
Industrial and other companies 8,587.4 61.8% 8,519.0 61.6% 8,322.9 61.7% 8,284.1 62.3% 8,120.0 62.3% 8,148.8 61.9% 7,710.9 60.5% 7,627.5 62.0%
Private Utilities 3,356.0 24.2% 3,410.3 24.6% 3,401.8 25.2% 3,236.0 24.3% 3,169.9 24.3% 3,089.1 23.4% 3,028.3 23.8% 2,692.2 21.9%
Transportation 405.2 2.9% 369.2 2.7% 383.1 2.8% 381.3 2.9% 398.8 3.1% 410.8 3.1% 403.3 3.2% 386.5 3.1%
Sub-total 13,884.3 100.0% 13,837.5 100.0% 13,499.7 100.0% 13,298.5 100.0% 13,028.2 100.0% 13,175.5 100.0% 12,733.9 100.0% 12,300.0 100.0%
Communications 4,170.5 8.0% 4,106.5 8.2% 3,800.7 7.8% 3,772.0 7.9% 3,944.4 8.3% 3,641.9 7.8% 3,644.5 8.2% 3,649.9 8.4%
Financial 6,615.6 12.7% 6,381.5 12.6% 6,429.0 13.2% 6,513.7 13.7% 6,626.2 13.9% 6,612.7 14.2% 6,867.0 15.4% 6,675.6 15.4%
Industrial and other companies 29,652.4 57.1% 28,518.6 56.4% 27,186.8 55.9% 26,403.2 55.6% 26,256.5 55.1% 25,580.0 54.9% 24,067.7 53.9% 23,635.8 54.5%
Total Utilities 10,074.7 19.4% 10,166.7 20.1% 9,914.9 20.4% 9,509.7 20.1% 9,458.3 19.9% 9,479.1 20.3% 8,823.8 19.8% 8,273.0 19.0%
Transportation 1,445.2 2.8% 1,379.1 2.7% 1,306.3 2.7% 1,276.6 2.7% 1,337.2 2.8% 1,299.6 2.8% 1,218.1 2.7% 1,162.6 2.7%
Total 51,958.4 100.0% 50,552.4 100.0% 48,637.7 100.0% 47,475.2 100.0% 47,622.6 100.0% 46,613.3 100.0% 44,621.1 100.0% 43,396.9 100.0%
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ING U.S.
Exposure to European Debt-Fixed Maturities and Equity Securities
(in millions USD)
Exposure to Select European Countries Sovereign Debt Corporate—Financial Corporate—Non-Financial Total Total
As of December 31, 2012 Fair Value% of Total Fair Value% of Total Fair Value% of Total Fair Value% of Total Amortized Cost% of Total
Ireland—0.0%—0.0% 345.6 4.7% 345.6 4.0% 326.4 4.3%
Italy—0.0%—0.0% 326.6 4.5% 326.6 3.9% 292.9 3.9%
Portugal—0.0%—0.0% 9.8 0.1% 9.8 0.1% 7.4 0.1%
Spain—0.0%—0.0% 232.7 3.2% 232.7 2.8% 230.0 3.0%
Total Peripheral Euro-Zone—0.0%—0.0% 914.7 12.5% 914.7 10.8% 856.7 11.3%
Austria—0.0%—0.0% 77.4 1.1% 77.4 0.9% 75.0 1.0%
Belgium 39.1 12.5%—0.0% 357.4 4.9% 396.5 4.7% 328.4 4.3%
Bulgaria 6.1 2.0%—0.0%—0.0% 6.1 0.1% 5.9 0.1%
Croatia 29.3 9.4%—0.0%—0.0% 29.3 0.3% 25.5 0.3%
Czech Republic—0.0%—0.0% 10.7 0.1% 10.7 0.1% 10.1 0.1%
Denmark—0.0% 10.4 1.3% 85.5 1.2% 95.9 1.1% 83.5 1.1%
Finland—0.0%—0.0% 42.9 0.6% 42.9 0.5% 39.5 0.5%
France—0.0% 94.8 11.4% 404.1 5.5% 498.9 5.9% 462.0 6.1%
Germany—0.0% 52.1 6.3% 670.0 9.2% 722.1 8.6% 652.1 8.6%
Hungary 6.2 2.0%—0.0%—0.0% 6.2 0.1% 5.8 0.1%
Kazakhstan 58.8 18.8%—0.0% 5.8 0.1% 64.6 0.8% 54.6 0.7%
Latvia 5.0 1.6%—0.0%—0.0% 5.0 0.1% 4.6 0.1%
Lithuania 36.3 11.6%—0.0%—0.0% 36.3 0.4% 30.7 0.4%
Luxembourg—0.0%—0.0% 134.1 1.8% 134.1 1.6% 131.8 1.7%
Netherlands—0.0% 179.5 21.6% 1,077.9 14.8% 1,257.4 14.9% 1,120.3 14.7%
Norway—0.0% 2.5 0.3% 217.1 3.0% 219.6 2.6% 201.8 2.7%
Russian Federation 96.8 31.0%—0.0% 102.7 1.4% 199.5 2.4% 172.9 2.3%
Slovakia 5.4 1.7%—0.0%—0.0% 5.4 0.1% 4.9 0.1%
Sweden 23.6 7.6% 19.4 2.3% 128.8 1.8% 171.8 2.0% 156.2 2.1%
Switzerland—0.0% 156.7 18.8% 562.6 7.7% 719.3 8.5% 641.6 8.4%
Turkey 5.6 1.8%—0.0%—0.0% 5.6 0.1% 5.4 0.1%
United Kingdom—0.0% 316.1 38.0% 2,499.6 34.3% 2,815.7 33.4% 2,529.9 33.2%
Total Non-Peripheral Europe 312.2 100.0% 831.5 100.0% 6,376.6 87.5% 7,520.3 89.2% 6,742.5 88.7%
Total Europe 312.2 100.0% 831.5 100.0% 7,291.3 100.0% 8,435.0 100.0% 7,599.2 100.0%
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ING U.S.
Adjustments to Operating Earnings by Segment
(in millions USD) Three Months Ended
12/31/12 9/30/12 6/30/12 3/31/12 12/31/11 9/30/11 6/30/11 3/31/11
DAC/VOBA and other intangibles unlocking
Retirement(8.9) 15.9(5.1) 3.8 28.5(17.2) 15.8 17.1
Annuities(44.4)(12.9)(8.6)(20.3) 177.9 53.3 22.2 12.7
Total Retirement Solutions(53.3) 3.0(13.7)(16.5) 206.4 36.1 38.0 29.8
Investment Management — — — —
Individual Life 4.6 3.4(0.2)(4.4)(18.9) 18.7(4.3)(1.9)
Employee Benefits — — — —
Total Insurance Solutions 4.6 3.4(0.2)(4.4)(18.9) 18.7(4.3)(1.9)
Ongoing Business(48.7) 6.4(13.9)(20.9) 187.5 54.8 33.7 27.9
Corporate — — — —
Total Closed Blocks — — — —
Total DAC/VOBA and other intangibles unlocking(48.7) 6.4(13.9)(20.9) 187.5 54.8 33.7 27.9
Additional adjustments*
Retirement -(1.0)(50.0) 19.8 — —
Annuities -(0.3)(18.5) 7.6 — —
Total Retirement Solutions -(1.3)(68.5) 27.4 — —
Investment Management — 2.2 — — -
Individual Life—5.2(3.1) 12.7 — —
Employee Benefits—0.6(3.8) 3.3 — —
Total Insurance Solutions—5.8(6.9) 16.0 — —
Ongoing Business—4.5(73.2) 43.4 — —
Corporate(39.2)(39.8)(32.1)(16.7)(90.1)(24.6)(68.9)(71.0)
Total Closed Blocks —(10.1) 4.3 — —
Total non-recurring items and interest expense(39.2)(35.3)(115.4) 31.0(90.1)(24.6)(68.9)(71.0)
Total adjustments to operating earnings
Retirement(8.9) 14.9(55.1) 23.6 28.5(17.2) 15.8 17.1
Annuities(44.4)(13.2)(27.1)(12.7) 177.9 53.3 22.2 12.7
Total Retirement Solutions(53.3) 1.7(82.2) 10.9 206.4 36.1 38.0 29.8
Investment Management — 2.2 — — -
Individual Life 4.6 8.6(3.3) 8.3(18.9) 18.7(4.3)(1.9)
Employee Benefits—0.6(3.8) 3.3 — —
Total Insurance Solutions 4.6 9.2(7.1) 11.6(18.9) 18.7(4.3)(1.9)
Ongoing Business(48.7) 10.9(87.1) 22.5 187.5 54.8 33.7 27.9
Corporate(39.2)(39.8)(32.1)(16.7)(90.1)(24.6)(68.9)(71.0)
Total Closed Blocks —(10.1) 4.3 — —
Total adjustments to operating earnings(87.9)(28.9)(129.3) 10.1 97.4 30.2(35.2)(43.1)
* Additional adjustments include impact of portfolio restructuring, SSMDF, and interest expenses
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ING U.S.
Average Capital and Financial Leverage
Balances as of
(in millions USD, unless otherwise indicated) 12/31/12 12/31/11
ING U.S., Inc. Shareholder’s Equity 13,874.9 12,353.9
AOCI 3,710.7 2,595.0
ING U.S., Inc. Shareholder’s Equity, excluding AOCI 10,164.2 9,758.9
Financial Leverage (1) 3,808.3 4,041.3
Total Capital 13,972.5 13,800.2
Financial Leverage to Total Capital 27.3% 29.3%
Average Capital (average for period) 13,886.4 13,588.7
(1) Financial leverage is defined as short term debt, long term debt, and loans from certain subsidiaries, excluding operating leverage. We define operating leverage as self-liquidating forms of financing, including securities lending, reverse repurchase and captive reinsurance reserve financing arrangements. The following table presents a reconciliation of financial leverage to debt:
Balances as of
(in millions USD, unless otherwise indicated) 12/31/12 12/31/11
Short-term Debt 1,064.6 1,054.6
Long-term Debt 3,171.1 1,343.1
Total Debt 4,235.7 2,397.7
Less: operating leverage(688.4)(688.4)
Plus: loans from subsidiaries 261.0 2,332.0
Financial Leverage 3,808.3 4,041.3
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ING U.S.
Operating Revenues by Segment
Three Months Ended
(in millions USD) 12/31/12 9/30/12 6/30/12 3/31/12 12/31/11 9/30/11 6/30/11 3/31/11
Retirement 570.5 582.1 538.9 580.4 498.3 559.4 606.8 560.9
Annuities 317.4 309.7 328.7 351.2 318.3 355.2 367.5 360.4
Total Retirement Solutions 887.9 891.8 867.6 931.6 816.6 914.6 974.3 921.3
Investment Management 142.5 142.2 130.2 130.6 110.1 122.5 130.7 128.6
Individual Life 694.2 678.5 709.2 712.0 701.6 710.9 695.2 677.3
Employee Benefits 313.6 310.5 313.8 313.3 304.6 311.4 308.7 321.5
Total Insurance Solutions 1,007.8 989.0 1,023.0 1,025.3 1,006.2 1,022.3 1,003.9 998.8
Ongoing Business 2,038.2 2,023.0 2,020.8 2,087.5 1,932.9 2,059.4 2,108.9 2,048.7
Corporate 19.2 13.2 19.3 14.2 17.3 20.0(24.1)(26.9)
Total Closed Blocks 38.2 40.5 38.9 53.4 48.9 53.8 75.6 62.0
Total operating revenues 2,095.6 2,076.7 2,079.0 2,155.1 1,999.1 2,133.2 2,160.4 2,083.8
Adjustments:
Closed Block Variable Annuity 68.1 42.5 798.2(978.8)(1,278.8) 1,562.6 440.5 70.6
Net investment gains (losses) and
related charges and adjustments 49.5 253.4 197.2 103.3 84.8(28.2) 106.2 56.4
Net guaranteed benefit hedging gains (losses) and
related charges and adjustments(29.5) 43.8(56.5) 125.3(130.9)(224.9)(44.0) 0.8
Loss related to businesses exited through
reinsurance or divestment 1.1 27.7 28.3 7.5 14.5 70.3 26.6 4.7
Income (loss) attributable to non-controlling interests(34.0) 63.7 262.8 21.3 119.4 53.6 244.3(18.2)
Other adjustments to operating revenue* 53.0 56.5 52.9 51.6 52.5 56.0 55.4 48.1
Total revenue 2,203.8 2,564.3 3,361.9 1,485.3 860.6 3,622.6 2,989.4 2,246.2
* Other adjustments to operating revenue includes:
Revenues related to businesses exited through reinsurance or
divestment; revenues attributable to non-controlling interests; and other
adjustments to operating revenues primarily including fee income earned
by the Company’s broker-dealers for sales of non-proprietary products,
which are reflected net of commission expense in the Company’s
segments’ operating revenues, as well as other items where the income is
passed on to third parties.
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ING U.S.
Ongoing Business Sources of Earnings Reconciliation
(in millions USD) Three Months Ended
12/31/12 9/30/12 6/30/12 3/31/12 12/31/11 9/30/11 6/30/11 3/31/11
Investment spread and other investment income:
Net investment income and net realized gains (losses)
Retirement 380.1 384.5 347.2 388.1 312.9 367.9 401.4 353.7
Annuities 298.4 291.7 304.2 329.0 303.0 331.5 348.2 339.2
Investment Management 5.6 17.3 13.3 5.4(9.3) 1.0 10.9 6.2
Individual Life 213.1 229.7 224.0 247.0 219.6 240.3 248.4 241.7
Employee Benefits 27.0 30.0 25.6 31.7 24.0 34.0 35.0 31.3
Total net investment income and net realized gains (losses) 924.2 953.2 914.3 1,001.2 850.2 974.7 1,043.9 972.1
Total Ongoing Business 924.2 953.2 914.3 1,001.2 850.2 974.7 1,043.9 972.1
Adjustments:
Interest credited(567.1)(565.0)(575.9)(590.0)(618.1)(616.8)(611.1)(608.0)
Other(14.7)(16.4)(9.4)(25.4)(19.5) 1.6(6.0)(21.4)
Total adjustments(581.8)(581.4)(585.3)(615.4)(637.6)(615.2)(617.1)(629.4)
Ongoing investment spread and other investment income 342.4 371.8 329.0 385.8 212.6 359.5 426.8 342.7
Fee based margin:
Fee income
Retirement 182.7 181.6 173.6 177.1 169.7 176.1 184.4 183.3
Annuities 10.4 9.5 8.2 7.4 7.4 9.4 7.3 5.7
Investment Management 122.6 120.1 114.1 117.9 117.0 115.9 119.3 117.1
Individual Life 282.0 262.4 288.0 283.3 292.2 300.7 273.4 272.9
Employee Benefits 15.9 15.7 15.5 15.4 15.3 15.6 15.5 15.4
Total Fee Income 613.6 589.3 599.4 601.1 601.6 617.7 599.9 594.4
Other revenue
Retirement 6.8 15.5 15.1 14.7 15.5 14.9 17.9 19.6
Annuities 2.3 2.4 4.6 3.0 1.1 3.7 5.0 5.8
Investment Management 14.3 4.8 2.8 7.3 2.4 5.6 0.5 5.3
Individual Life 7.4 6.4 10.5 2.3 9.1 5.0 10.2 10.6
Employee Benefits(0.9)(1.0) 0.4(2.2) 4.8(0.4)(7.0)(0.7)
Total other revenue 29.9 28.1 33.4 25.1 32.9 28.8 26.6 40.6
Total Ongoing Business 643.5 617.4 632.8 626.2 634.5 646.5 626.5 635.0
Adjustments:
Surrender fees and MVA charges 2.8(5.3)(13.0)(7.2)(9.6)(8.6)(8.8)(8.8)
Insurance Solutions FAS 97 fees and unearned revenue reserve amortization/unlocking(291.0)(273.8)(292.5)(292.4)(300.3)(290.4)(279.8)(280.8)
Other(5.3)(2.3)(6.5) 4.1(9.7)(24.7)(7.6)(15.4)
Total adjustments(293.5)(281.4)(312.0)(295.5)(319.6)(323.7)(296.2)(305.0)
Ongoing fee based margin 350.0 336.0 320.8 330.7 314.9 322.8 330.3 330.0
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ING U.S.
Ongoing Business Sources of Earnings Reconciliation
(in millions USD) Three Months Ended
12/31/12 9/30/12 6/30/12 3/31/12 12/31/11 9/30/11 6/30/11 3/31/11
Net underwriting gain (loss) and other revenue:
Premiums
Retirement 0.9 0.5 3.0 0.5 0.2 0.5 3.1 4.3
Annuities 6.3 6.1 11.7 11.8 6.8 10.6 7.0 9.7
Investment Management — — — -
Individual Life 191.7 180.0 186.7 179.4 180.7 164.9 163.2 152.1
Employee Benefits 271.6 265.8 272.3 268.4 260.5 262.2 265.2 275.5
Total premiums 470.5 452.4 473.7 460.1 448.2 438.2 438.5 441.6
Interest credited and other policyholder benefits
Retirement(212.9)(210.5)(210.4)(208.4)(213.2)(208.5)(204.3)(200.2)
Annuities(192.3)(200.3)(219.6)(241.9)(221.2)(244.7)(244.1)(268.0)
Investment Management — — — -
Individual Life(489.1)(509.5)(531.0)(504.8)(453.1)(464.2)(473.7)(464.1)
Employee Benefits(220.9)(214.0)(223.2)(234.0)(221.2)(232.5)(220.0)(244.0)
Total interest credited and other policyholder benefits(1,115.2)(1,134.3)(1,184.2)(1,189.1)(1,108.7)(1,149.9)(1,142.1)(1,176.3)
Total Ongoing Business(644.7)(681.9)(710.5)(729.0)(660.5)(711.7)(703.6)(734.7)
Adjustments:
Interest credited 567.1 565.0 575.9 590.0 618.1 616.8 611.1 608.0
Surrender fees and MVA charges(2.8) 5.3 13.0 7.2 9.6 8.6 8.8 8.8
Insurance Solutions FAS 97 fees and unearned revenue reserve amortization/unlocking 293.9 295.2 292.5 291.0 284.4 294.8 280.8 276.9
Sales inducements amortization and unlocking 11.7 11.3 11.0 15.7(21.0) 7.7 6.0 8.4
FAS 113 and SOP 03-1 amortization and unlocking 2.3 18.6—2.8(53.1)(3.6) 5.1 2.4
Other(5.4) 0.6(3.3) 2.3 18.9(8.6) 17.5 29.5
Total adjustments 866.8 896.0 889.1 909.0 856.9 915.7 929.3 934.0
Ongoing net underwriting gain (loss) and other revenue 222.1 214.1 178.6 180.0 196.4 204.0 225.7 199.3
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ING U.S.
Ongoing Business Sources of Earnings Reconciliation
(in millions USD) Three Months Ended
12/31/12 9/30/12 6/30/12 3/31/12 12/31/11 9/30/11 6/30/11 3/31/11
Administrative expenses and trail commissions:
Operating and interest expense
Retirement(204.7)(199.1)(208.0)(214.3)(214.5)(202.6)(215.6)(213.5)
Annuities(30.4)(32.2)(31.3)(31.3)(32.0)(33.0)(31.8)(30.5)
Investment Management(111.3)(103.1)(99.0)(97.6)(97.0)(99.8)(104.3)(103.3)
Individual Life(102.8)(99.2)(97.4)(101.6)(93.0)(83.0)(88.3)(87.4)
Employee Benefits(60.7)(56.7)(57.6)(61.2)(56.9)(57.2)(54.5)(60.7)
Total administrative expenses and trail commissions(509.9)(490.3)(493.3)(506.0)(493.4)(475.6)(494.5)(495.4)
Total Ongoing Business(509.9)(490.3)(493.3)(506.0)(493.4)(475.6)(494.5)(495.4)
Adjustments:
Other 24.6 18.4 19.1 19.2 14.2 6.4 6.8 7.0
Total adjustments 24.6 18.4 19.1 19.2 14.2 6.4 6.8 7.0
Ongoing administrative expenses and trail commissions(485.3)(471.9)(474.2)(486.8)(479.2)(469.2)(487.7)(488.4)
DAC/VOBA and other intangibles amortization and unlocking:
Net amortization of DAC/VOBA
Retirement(44.7)(27.1)(49.4)(33.8)(0.6)(50.5)(38.3)(21.7)
Annuities(88.4)(44.6)(50.9)(41.6) 134.7 7.0(27.7)(22.5)
Investment Management — — — —
Individual Life(47.7)(16.6)(47.4)(50.6)(116.8)(79.6)(52.3)(50.2)
Employee Benefits(3.4)(3.7)(3.9)(2.5)(5.5)(3.6)(3.3)(3.5)
Total net amortization of DAC/VOBA(184.2)(92.0)(151.6)(128.5) 11.8(126.7)(121.6)(97.9)
Total Ongoing Business(184.2)(92.0)(151.6)(128.5) 11.8(126.7)(121.6)(97.9)
Adjustments
Sales inducements amortization and unlocking(11.7)(11.3)(11.0)(15.7) 21.0(7.7)(6.0)(8.4)
FAS 113 and SOP 03-1 amortization and unlocking(2.3)(18.6) -(2.8) 53.1 3.6(5.1)(2.4)
Unearned revenue reserve amortization and unlocking(2.9)(21.4)—1.4 15.9(4.4)(1.0) 3.9
Other 0.8(0.3) 0.1(0.2)(3.9) 25.3(10.7) 0.3
Total adjustments(16.1)(51.6)(10.9)(17.3) 86.1 16.8(22.8)(6.6)
Ongoing DAC/VOBA and other intangibles amortization and unlocking(200.3)(143.6)(162.5)(145.8) 97.9(109.9)(144.4)(104.5)
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ING U.S.
Fixed Maturity Securities—Hannover Life Re Modco Reinsurance
(in millions USD)
Total investments, after consolidation (See Portfolio Composition) , include the
following amounts related to business sold to Hannover Re through Modco
reinsurance, in which the risk associated with these policies has been transferred to
Hannover Life Re:
Balances as of
12/31/12 9/30/12 6/30/12 3/31/12 12/31/11 9/30/11 6/30/11 3/31/11
Fixed Maturity Securities—Hannover Life Re Modco Reinsurance
Security Sector
U.S. Government agencies and authorities 41.9 19.7 19.5 22.3 14.5 17.5 19.2 22.8
U.S. Corporate—Public 798.7 818.2 812.3 818.3 824.4 839.8 714.8 705.1
Foreign Government / Agency 2.0 2.8 2.8 2.8 2.8 2.7 2.7 10.3
Foreign Corporate—Public 144.2 129.2 121.1 121.2 118.8 118.6 95.8 95.7
State, municipalities and political subdivisions 119.4 119.8 118.8 116.0 114.1 114.5 101.4 99.5
Residential mortgaged-backed securities:
Agency 133.4 139.4 145.0 175.0 181.3 187.4 187.5 238.2
Non—Agency 2.2 2.5 2.8 3.0 8.3 8.8 9.0 10.2
Total Residential mortgage-backed securities 135.6 141.9 147.8 178.0 189.6 196.2 196.5 248.4
Commercial mortgage-backed securities 114.7 121.2 124.4 127.6 127.0 126.1 128.9 130.3
Other asset-backed securities 25.8 27.7 28.3 35.5 48.9 50.2 50.7 69.5
Total fixed maturities, including securities pledged 1,382.3 1,380.5 1,375.0 1,421.7 1,440.1 1,465.6 1,310.0 1,381.6
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ING U.S.
Ratings
A.M. Best Fitch Standard & Poor’s Moody’s
Insurance Financial Strength Ratings
ING Life Insurance and Annuity Company A A- A- A3
ING USA Annuity & Life Insurance Company A A- A- A3
Midwestern United Life Insurance Company A- NR A- NR
ReliaStar Life Insurance Company A A- A- A3
ReliaStar Life Insurance Company of New York A A- A- A3
Security Life of Denver Insurance Company A A- A- A3
Credit Ratings
ING U.S., Inc.
Long-Term Issuer Credit bbb BBB BBB- Baa3
Long-Term Senior Unsecured Debt bbb BBB- BBB- Baa3
Commercial Paper NR F2 A-2 P-2
Lion Connecticut Holdings, Inc.
Long-Term Issuer Credit NR NR BBB- Baa3
Investor Information
Corporate Offices: Media Contact: Investor Contact:
ING U.S. Dana Ripley Darin Arita
230 Park Avenue 770-980-4865 212-309-8999
New York, New York 10169 Dana.Ripley@us.ing.com IR@us.ing.com
NYSE Ticker: Web Site:
VOYA investors.ing.us
ING U.S.
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