Exhibit 99.1
THE PHOENIX COMPANIES, INC.
FINANCIAL SUPPLEMENT
WALL STREET COVERAGE
FIRM ANALYST
A.G. Edwards J. Jeffrey Hopson
Credit Suisse First Boston (CSFB) Tom Gallagher
Deutsche Bank Vanessa Wilson
Dowling & Partners Len Savage
Keefe Bruyette & Woods Jukka Lipponen
Langen McAlenney Robert Glasspiegel
Lehman Brothers E. Stewart Johnson
Merrill Lynch Edward A. Spehar
Morgan Stanley Nigel Dally
UBS Warburg Andrew Kligerman
SHAREHOLDER INFORMATION
SECURITY LISTINGS
The common stock of The Phoenix Companies, Inc. is traded on the New York Stock
Exchange (NYSE) under the symbol "PNX." Our 7.25 percent equity units are traded
on the NYSE under the symbol "PNX PrA." Our 7.45 percent bond is traded on the
NYSE under the symbol "PFX."
TRANSFER AGENT AND REGISTRAR
For information or assistance regarding your account, please contact our
transfer agent and registrar:
EquiServe Trust Company, N.A. at: Phoenix Shareholder Services
C/O EquiServe Trust Company, P.O. Box 43076, Providence, RI 02940-3076
Toll-free: 1-800-490-4258 TTY 1-800-336-9449
Fax: 1-781-575-3583, e-mail: phoenix@equiserve.com
Web: phoenix.equiserve.com
FOR MORE INFORMATION
To receive additional information, including financial supplements and
Securities and Exchange Commission filings along with access to other
shareholder services, visit the Investor Relations Section on our Web site at
PhoenixWealthManagement.com or contact our Investor Relations Department at:
The Phoenix Companies, Inc.
Investor Relations
One American Row
P.O. Box 5056, Hartford, CT 06102-5056
Phone: 1-860-403-7100
Fax: 1-860-403-7880
e-mail: pnx.ir@PhoenixWealthManagement.com
For more information on our products and services, call your Phoenix
representative or visit our Web site at PhoenixWealthManagement.com.
In addition to net income presented in accordance with Generally Accepted
Accounting Principles ("GAAP"), Phoenix considers Total segment income in
evaluating its financial performance. See page 2, Income Statement, for a
reconciliation of these measures. Total segment income is an internal
performance measure used by Phoenix in the management of its operations,
including its compensation plans and budgeting and planning processes. In
addition, management believes that total segment income provides additional
insight into the underlying trends in Phoenix's operations.
Total Segment income represents net income from continuing operations (which is
a GAAP measure) before realized investment gains and losses, and certain other
items.
* Net realized investment gains and losses are excluded from segment income
because their size and timing are frequently subject to our discretion.
* Certain other items are excluded from segment income because we believe they
are not indicative of overall operating trends and are items that management
believes are infrequent and material and which result from a business
restructuring, a change in regulatory environment, or other unusual
circumstances.
Because certain of these items are excluded based on our discretion and involve
judgments by management, inconsistencies in their determination may exist and
total segment income may differ from similarly titled measures of other
companies.
THE PHOENIX COMPANIES, INC.
FINANCIAL SUPPLEMENT
JUNE 2003 (UNAUDITED)
TABLE OF CONTENTS
FINANCIAL HIGHLIGHTS 1
INCOME STATEMENT 2
LIFE AND ANNUITY EARNINGS SUMMARY 4
VARIABLE UNIVERSAL LIFE 6
UNIVERSAL LIFE / INTEREST SENSITIVE 8
LIFE SALES HIGHLIGHTS 10
ANNUITIES 12
ANNUITIES - NET FLOWS AND FUNDS UNDER MANAGEMENT 14
SUPPLEMENTARY LIFE AND ANNUITY INFORMATION 16
ASSET MANAGEMENT 18
ASSET MANAGEMENT 18
ASSET MANAGEMENT - NET FLOWS AND ASSETS UNDER MANAGEMENT 20
VENTURE CAPITAL SEGMENT 22
CORPORATE AND OTHER 24
CONSOLIDATED STATEMENT OF INCOME - GAAP FORMAT 26
CONSOLIDATING SECOND QUARTER 2003 INCOME STATEMENT 28
CONDENSED CONSOLIDATED BALANCE SHEET 29
INVESTMENT PORTFOLIO SUMMARY 30
GAAP NET INVESTMENT INCOME YIELDS 31
REALIZED INVESTMENT GAINS AND LOSSES 32
THE PHOENIX COMPANIES, INC.
FINANCIAL HIGHLIGHTS
Second Quarter 2003 (unaudited)
(amounts in millions, except per share data)
BALANCE SHEET INFORMATION
For the Period Ended: December 31,
YTD June -----------------------------------------------------
2003 2002 2001 2000 1999
------------ ------------ ------------ ------------ ------------
Invested Assets $ 17,463.7 $ 16,770.7 $ 14,420.4 $ 12,770.6 $ 11,776.8
Separate Account and Investment Trust Assets 6,643.2 5,793.1 5,570.0 5,376.6 5,923.9
Total Assets 26,777.8 25,236.1 22,525.4 20,313.2 20,287.0
Indebtedness 646.4 644.3 599.3 425.1 499.4
Total Stockholders' Equity 2,024.2 2,031.7 2,395.7 1,840.9 1,756.0
Debt to Total Capitalization 24.2% 24.1% 20.0% 18.8% 22.1%
Debt (Excluding Equity Units) to Total
Capitalization 18.4% 18.3%
Book Value Per Share (1) $ 21.21 $ 21.47 $ 23.51 $ 24.75 $ 23.94
Book Value Per Share, excluding SFAS 115
adjustment $ 19.67 $ 20.44 $ 22.72 $ 24.51 $ 23.70
Period-end Common and Equivalent Shares
Outstanding (2) 95.4 94.6 101.9 105.0 105.0
- ---------------------------------------------------------------------------
Indebtedness:
Surplus Notes $ 175.0 $ 175.0 $ 175.0 $ 175.0 $ 175.0
Equity Units 153.7 153.7
Senior Unsecured Bonds 300.0 300.0 300.0
Interest Rate Swap 17.7 15.6 (.8)
Bank Credit Facility 125.1 230.0 260.3
Other 20.1 64.1
------------ ------------ ------------ ------------ ------------
Total Indebtedness $ 646.4 $ 644.3 $ 599.3 $ 425.1 $ 499.4
============ ============ ============ ============ ============
- ---------------------------------------------------------------------------
STATUTORY FINANCIAL DATA FOR PHOENIX LIFE
INSURANCE COMPANY (3)
Capital and Surplus $ 801.3 $ 861.0 $ 1,149.8 $ 1,322.8 $ 1,054.1
Asset Valuation Reserve (AVR) 199.3 147.0 221.5 559.7 368.7
------------ ------------ ------------ ------------ ------------
Capital, Surplus and AVR $ 1,000.6 $ 1,008.0 $ 1,371.3 $ 1,882.5 $ 1,422.8
============ ============ ============ ============ ============
Policyholder Dividend Liability $ 407.2 $ 403.0 $ 395.8 $ 383.2 $ 366.9
Interest Maintenance Reserve $ (17.6) $ (2.0) $ 11.6 $ (1.4) $ 24.4
Statutory Gain From Operations $ 39.9 $ 44.5 $ 119.9 $ 266.4 $ 150.2
Statutory Net Income (Loss) $ 3.3 $ 7.5 $ (13.9) $ 266.1 $ 131.3
(1) Book value per share prior to June 30, 2001 is pro forma and assumes net
proceeds of $807.9 million, payout of cash and policy credits to
policyholders of $41.4 million and estimated remaining expenses of $9.0
million and 105.0 million shares outstanding.
(2) Shares outstanding through 2000 are pro forma due to IPO in 2001.
(3) Phoenix Life Insurance Company is required to file statements with state
regulatory authorities prepared on an accounting basis prescribed or
permitted by such authorities. June 2003 amounts are preliminary.
1
THE PHOENIX COMPANIES, INC.
FINANCIAL HIGHLIGHTS
Second Quarter 2003 (unaudited)
(amounts in millions, except per share data)
INCOME STATEMENT SUMMARY YTD June December 31,
----------------------------- -----------------------------------------------
2003 2002 2002 2001 2000 1999
------------- ------------ ------------ ----------- ------------ ------------
SEGMENT INCOME
Life Insurance $ 51.3 $ 52.8 $ 99.3 $ 68.6 $ 16.2 $ 41.4
Annuities (6.7) 3.3 (20.6) 10.9 4.2 30.8
------------- ------------ ------------ ----------- ------------ ------------
Life and Annuity Segment 44.6 56.1 78.7 79.5 20.4 72.2
Asset Management Segment (11.5) (3.6) (69.9) (8.7) 61.4 60.0
Venture Capital Segment 29.7 (34.9) (59.3) (159.6) 277.3 139.9
Corporate and Other Segment (23.9) (14.3) (39.9) (34.7) (60.8) (49.8)
------------- ------------ ------------ ----------- ------------ ------------
Total Segment Income (Loss), before income
taxes 38.9 3.3 (90.4) (123.5) 298.3 222.3
Applicable Income Taxes (Benefit) 10.6 (5.4) (28.7) (46.3) 99.1 76.1
------------- ------------ ------------ ----------- ------------ ------------
TOTAL SEGMENT INCOME (LOSS) 28.3 8.7 (61.7) (77.2) 199.2 146.2
Net Realized Investment Gains (Losses), after
income taxes (71.6) (9.1) (39.3) (43.0) 62.0 49.2
Management Restructuring and Early Retirement
Costs (4.3) (21.8) (28.5) (15.5) (17.6)
Deferred Policy Acquisition Cost Adjustments 15.1 15.1 (141.8)
Expenses of Purchase of PXP Minority Interest (52.8)
Demutualization Related Items, Net (1.2) (1.3) (2.9) (24.5) (11.2)
Other income 1.3 5.3 (.1) (4.5)
Discontinued Operations (11.5) (72.9)
Cumulative Effect of Accounting Changes (130.3) (130.3) (16.6)
------------- ------------ ------------ ----------- ------------ ------------
NET INCOME (LOSS) $ (46.3) $(138.6) $(246.0) $(202.7) $ 83.3 $ 89.2
============= ============ ============ =========== ============ ============
- ---------------------------------------------------
EARNINGS PER SHARE
Basic
Weighted-Average Shares Outstanding (1) 94.1 100.3 97.9 104.6 104.6 104.6
------------- ------------ ------------ ----------- ------------ ------------
Total Segment Income (Loss) Per Share $ 0.30 $ 0.09 $ (0.63) $ (0.74) $ 1.90 $ 1.40
Net Income (Loss) Per Share $ (0.49) $ (1.38) $ (2.51) $ (1.94) $ 0.80 $ 0.85
Diluted
Weighted-Average Shares Outstanding (1)(2) 94.1 100.3 98.0 104.6 104.6 104.6
------------- ------------ ------------ ----------- ------------ ------------
Total Segment Income (Loss) Per Share $ 0.30 $ 0.09 $ (0.63) $ (0.74) $ 1.90 $ 1.40
Net Income (Loss) Per Share $ (0.49) $ (1.38) $ (2.51) $ (1.94) $ 0.80 $ 0.85
(1) Weighted-average shares outstanding through 2001 are pro forma due to
Initial Public Offering (IPO) in 2001.
(2) For diluted total segment and income per share amounts, weighted average
common and equivalent shares outstanding were 95.3 and 95.2 for the three
months and six months ended June 30, 2003, respectively. Diluted total
segment income per share amounts are unchanged from the basic total segment
and net income per share amounts from the addition of dilutive restricted
stock units and stock options to the weighted average shares outstanding.
Dilutive common stock equivalents are not included in net income (loss) per
share amounts because they are anti-dilutive for the six month and three
month periods ended June 30, 2003.
2
THE PHOENIX COMPANIES, INC.
FINANCIAL HIGHLIGHTS
Second Quarter 2003 (unaudited)
(amounts in millions, except per share data)
INCOME STATEMENT SUMMARY 2002 2003
-------------------------------------------------- -----------------------
Quarters ended March June September December March June
---------- ---------- ----------- ---------- ---------- -----------
SEGMENT INCOME
Life Insurance $ 25.6 $ 27.1 $ 17.0 $ 29.5 $ 22.7 $ 28.6
Annuities 2.6 .8 (18.9) (5.0) (5.3) (1.4)
---------- ---------- ----------- ---------- ---------- -----------
Life and Annuity Segment 28.2 27.9 (1.9) 24.5 17.4 27.2
Asset Management Segment (1.1) (2.6) (67.8) 1.6 (5.8) (5.7)
Venture Capital Segment (5.0) (29.9) (22.0) (2.4) 23.9 5.8
Corporate and Other Segment (5.7) (8.4) (10.0) (15.7) (11.4) (12.5)
---------- ---------- ----------- ---------- ---------- -----------
Total Segment Income (Loss), before income taxes 16.4 (13.0) (101.7) 8.0 24.1 14.8
Applicable Income Taxes (Benefit) 3.6 (8.9) (19.9) (3.3) 7.3 3.3
---------- ---------- ----------- ---------- ---------- -----------
TOTAL SEGMENT INCOME (LOSS) 12.8 (4.1) (81.8) 11.3 16.8 11.5
Net Realized Investment Gains (Losses), after income
taxes 1.7 (10.8) (7.6) (22.6) (12.4) (59.2)
Management Restructuring and Early Retirement Costs (21.8) (3.6) (3.1) (2.5) (1.8)
Deferred Policy Acquisition Cost Adjustments 15.1
Demutualization Related Items, Net (.7) (.5) (.1)
Other income 1.3
Cumulative Effect of Accounting Changes (130.3)
---------- ---------- ----------- ---------- ---------- -----------
NET INCOME (LOSS) $ (101.4) $ (37.2) $ (93.0) $ (14.5) $ 3.2 $ (49.5)
========== ========== =========== ========== ========== ===========
- --------------------------------------------------------
EARNINGS PER SHARE
Basic
Weighted-Average Shares Outstanding (1) 101.2 99.5 96.6 94.2 94.0 94.2
---------- ---------- ----------- ---------- ---------- -----------
Total Segment Income (Loss) Per Share $ 0.13 $ (0.04) $ (0.85) $ 0.12 $ 0.18 $ 0.12
Net Income (Loss) Per Share $ (1.00) $ (0.37) $ (0.96) $ (0.15) $ 0.03 $ (0.53)
Diluted
Weighted-Average Shares Outstanding (1)(2) 101.2 99.5 96.6 94.7 95.0 94.2
---------- ---------- ----------- ---------- ---------- -----------
Total Segment Income (Loss) Per Share $ 0.13 $ (0.04) $ (0.85) $ 0.12 $ 0.18 $ 0.12
Net Income (Loss) Per Share $ (1.00) $ (0.37) $ (0.96) $ (0.15) $ 0.03 $ (0.53)
(1) Weighted-average shares outstanding through 2001 are pro forma due to
Initial Public Offering (IPO) in 2001.
(2) For diluted total segment and income per share amounts, weighted average
common and equivalent shares outstanding were 95.3 and 95.2 for the three
months and six months ended June 30, 2003, respectively. Diluted total
segment income per share amounts are unchanged from the basic total segment
and net income per share amounts from the addition of dilutive restricted
stock units and stock options to the weighted average shares outstanding.
Dilutive common stock equivalents are not included in net income (loss) per
share amounts because they are anti-dilutive for the six month and three
month periods ended June 30, 2003.
3
THE PHOENIX COMPANIES, INC.
LIFE AND ANNUITY EARNINGS SUMMARY
Second Quarter 2003 (unaudited)
($ in millions)
SEGMENT INCOME YTD June December 31,
---------------------------- ------------------------------------------------------------
2003 2002 2002 2001 2000 1999
------------- ------------ ------------ ------------- ------------- -------------
Variable Universal Life $ 15.6 $ 18.2 $ 35.9 $ 30.2 $ 20.1 $ .8
Universal Life (1) 10.3 14.2 26.3 17.4 18.2 19.5
Term Life (.4) 1.4 4.7 1.3 (1.0) 1.5
Other Life and Annuity (2) 3.1 .5 (.9) (1.7) 1.2 4.0
------------- ------------ ------------ ------------- ------------- -------------
Total, Non-participating Life 28.6 34.3 66.0 47.2 38.5 25.8
Participating Life 22.7 18.5 33.3 21.4 (22.3) 15.6
------------- ------------ ------------ ------------- ------------- -------------
Total, Life Insurance 51.3 52.8 99.3 68.6 16.2 41.4
Annuities (6.7) 3.3 (20.6) 10.9 4.2 30.8
------------- ------------ ------------ ------------- ------------- -------------
Segment Income, before income taxes 44.6 56.1 78.7 79.5 20.4 72.2
Allocated Income Taxes (3) 12.0 19.9 27.7 27.9 7.2 25.3
------------- ------------ ------------ ------------- ------------- -------------
Segment Income $ 32.6 $ 36.2 $ 51.0 $ 51.6 $ 13.2 $ 46.9
============= ============ ============ ============= ============= =============
(1) Universal Life includes interest sensitive whole life contracts.
(2) Other Life and Annuity includes trust operations and W.S. Griffith.
(3) Tax benefits related to tax advantaged investments have been allocated to
the Life and Annuity Segment beginning in the quarter ended March 2003.
4
THE PHOENIX COMPANIES, INC.
LIFE AND ANNUITY EARNINGS SUMMARY
Second Quarter 2003 (unaudited)
($ in millions)
SEGMENT INCOME 2002 2003
----------------------------------------------------- -------------------------
Quarters ended March June September December March June
----------- ----------- ----------- ----------- ----------- -----------
Variable Universal Life $ 10.0 $ 8.1 $ 7.5 $ 10.2 $ 6.3 $ 9.3
Universal Life (1) 5.9 8.3 5.0 7.2 4.7 5.6
Term Life (.5) 1.9 (.8) 4.1 .4 (.8)
Other Life and Annuity (2) (1.8) 2.3 (.7) (.8) 2.5 .6
----------- ----------- ----------- ----------- ----------- -----------
Total, Non-participating Life 13.6 20.6 11.0 20.7 13.9 14.7
Participating Life 12.0 6.5 6.0 8.8 8.8 13.9
----------- ----------- ----------- ----------- ----------- -----------
Total, Life Insurance 25.6 27.1 17.0 29.5 22.7 28.6
Annuities 2.6 .8 (18.9) (5.0) (5.3) (1.4)
----------- ----------- ----------- ----------- ----------- -----------
Segment Income (Loss), before income taxes 28.2 27.9 (1.9) 24.5 17.4 27.2
Applicable Income Taxes (3) 10.0 9.9 (.7) 8.5 3.8 8.2
----------- ----------- ----------- ----------- ----------- -----------
Segment Income (Loss) $ 18.2 $ 18.0 $ (1.2) $ 16.0 $ 13.6 $ 19.0
=========== =========== =========== =========== =========== ===========
(1) Universal Life includes interest sensitive whole life contracts.
(2) Other Life and Annuity includes trust operations and W.S. Griffith.
(3) Tax benefits related to tax advantaged investments have been allocated to
the Life and Annuity Segment beginning in the quarter ended March 2003.
5
THE PHOENIX COMPANIES, INC.
VARIABLE UNIVERSAL LIFE
Second Quarter 2003 (unaudited)
($ in millions)
YTD June December 31,
--------------------------- ---------------------------------------------------------
2003 2002 2002 2001 2000 1999
------------ ------------ ------------ ------------ ------------ ------------
PRE-TAX INCOME
Fees $ 15.1 $ 14.4 $ 31.4 $ 29.5 $ 24.9 $ 22.7
Cost of Insurance (COI) 36.0 31.6 66.4 60.0 46.2 38.5
Interest Earned 3.1 3.5 7.0 4.5 5.7 4.7
Surrender Charges 2.8 1.8 4.4 3.3 3.5 3.0
------------ ------------ ------------ ------------ ------------ ------------
Total Revenues 57.0 51.3 109.2 97.3 80.3 68.9
------------ ------------ ------------ ------------ ------------ ------------
Net Death and Disability Benefits 11.0 9.8 22.9 15.3 15.5 13.4
Incurred Expenses 28.6 21.4 45.9 48.2 41.5 52.5
Interest Credited 1.9 1.8 3.7 3.6 3.1 2.2
Minority Interest .1 .8
------------ ------------ ------------ ------------ ------------ ------------
Total Expenses 41.5 33.1 73.3 67.1 60.1 68.1
------------ ------------ ------------ ------------ ------------ ------------
Pre-tax Income 15.6 18.2 35.9 30.2 20.2 .8
============ ============ ============ ============ ============ ============
- ----------------------------------------------------------------------------------------------------------------------------------
INCURRED EXPENSES
Commissions and Concessions 9.8 17.5 36.6 29.5 34.1 23.1
Controllable Expenses and Other 23.7 34.7 60.8 60.1 57.3 60.3
------------ ------------ ------------ ------------ ------------ ------------
Total Current Expenses 33.5 52.2 97.4 89.6 91.4 83.4
Acquisition Costs Deferred (16.7) (37.6) (68.1) (65.4) (56.9) (42.8)
Acquisition Costs Amortized 11.8 6.8 16.6 24.0 7.0 11.9
------------ ------------ ------------ ------------ ------------ ------------
Incurred Expenses 28.6 21.4 45.9 48.2 41.5 52.5
============ ============ ============ ============ ============ ============
- ----------------------------------------------------------------------------------------------------------------------------------
FUNDS UNDER MANAGEMENT
Deposits 133.8 172.5 465.7 336.1 258.1 204.7
Surrenders (25.2) (15.8) (37.6) (31.2) (34.0) (22.2)
Deaths (.3) (1.2) (1.8) (1.7) (1.4) (1.7)
------------ ------------ ------------ ------------ ------------ ------------
Net Sales 108.3 155.5 426.3 303.2 222.7 180.8
Performance 101.9 (84.1) (149.8) (194.0) (128.1) 207.6
Fees (16.3) (17.6) (35.8) (34.5) (33.0) (25.8)
Cost of Insurance (34.7) (31.6) (66.4) (60.0) (46.2) (38.5)
Acquisitions 10.5
------------ ------------ ------------ ------------ ------------ ------------
Change in Funds Under Management 159.2 22.2 174.3 14.7 15.4 334.6
Beginning Balance 1,270.3 1,096.0 1,096.0 1,081.3 1,065.9 731.3
------------ ------------ ------------ ------------ ------------ ------------
Ending Balance 1,429.6 1,118.2 1,270.3 1,096.0 1,081.3 1,065.9
============ ============ ============ ============ ============ ============
LIFE INSURANCE IN FORCE $ 24,096.1 $ 22,168.9 $ 23,788.2 $ 20,436.1 $ 17,743.3 $ 13,740.3
============ ============ ============ ============ ============ ============
6
THE PHOENIX COMPANIES, INC.
VARIABLE UNIVERSAL LIFE
Second Quarter 2003 (unaudited)
($ in millions)
Quarters ended 2002 2003
---------------------------------------------------------- --------------------------
March June September December March June
------------ ------------ ------------ ------------ ------------ ------------
PRE-TAX INCOME
Fees $ 7.7 $ 6.7 $ 8.6 $ 8.4 $ 7.6 $ 7.5
Cost of Insurance (COI) 15.8 15.8 16.6 18.2 17.9 18.1
Interest Earned 1.8 1.7 2.0 1.5 1.6 1.5
Surrender Charges .8 1.0 1.1 1.5 1.2 1.6
------------ ------------ ------------ ------------ ------------ ------------
Total Revenues 26.1 25.2 28.3 29.6 28.3 28.7
------------ ------------ ------------ ------------ ------------ ------------
Net Death and Disability Benefits 4.5 5.3 6.9 6.2 5.0 6.0
Incurred Expenses 10.6 10.8 12.6 11.9 16.1 12.5
Interest Credited .9 .9 1.0 .9 .9 1.0
Minority Interest .1 .1 .3 .4
------------ ------------ ------------ ------------ ------------ ------------
Total Expenses 16.1 17.1 20.8 19.4 22.0 19.5
------------ ------------ ------------ ------------ ------------ ------------
Pre-tax Income 10.0 8.1 7.5 10.2 6.3 9.3
============ ============ ============ ============ ============ ============
- ---------------------------------------------------------------------------------------------------------------------------------
INCURRED EXPENSES
Commissions and Concessions 8.9 8.6 11.5 7.6 5.2 4.6
Controllable Expenses and Other 16.7 18.0 14.4 11.7 11.4 12.3
------------ ------------ ------------ ------------ ------------ ------------
Total Current Expenses 25.6 26.6 25.9 19.3 16.6 16.9
Acquisition Costs Deferred (18.4) (19.2) (18.6) (11.9) (8.0) (8.7)
Acquisition Costs Amortized 3.4 3.4 5.3 4.5 7.5 4.3
------------ ------------ ------------ ------------ ------------ ------------
Incurred Expenses 10.6 10.8 12.6 11.9 16.1 12.5
============ ============ ============ ============ ============ ============
- ---------------------------------------------------------------------------------------------------------------------------------
FUNDS UNDER MANAGEMENT
Deposits 91.2 81.3 133.6 159.6 71.8 62.0
Surrenders (6.3) (9.5) (7.1) (14.7) (13.7) (11.5)
Deaths (.6) (.6) (.3) (.3) (.2) (.1)
------------ ------------ ------------ ------------ ------------ ------------
Net Sales 84.3 71.2 126.2 144.6 57.9 50.4
Performance (4.5) (79.6) (109.5) 43.8 (8.5) 110.4
Fees (9.2) (8.4) (8.9) (9.3) (8.4) (7.9)
Cost of Insurance (15.8) (15.8) (16.6) (18.2) (17.9) (16.8)
------------ ------------ ------------ ------------ ------------ ------------
Change in Funds Under Management 54.8 (32.6) (8.8) 160.9 23.1 136.1
Beginning Balance 1,096.0 1,150.8 1,118.2 1,109.4 1,270.3 1,293.5
------------ ------------ ------------ ------------ ------------ ------------
Ending Balance 1,150.8 1,118.2 1,109.4 1,270.3 1,293.4 1,429.6
============ ============ ============ ============ ============ ============
LIFE INSURANCE IN FORCE $21,136.1 $22,168.9 $22,719.1 $23,788.2 $23,744.4 $24,096.1
============ ============ ============ ============ ============ ============
7
THE PHOENIX COMPANIES, INC.
UNIVERSAL LIFE / INTEREST SENSITIVE
Second Quarter 2003 (unaudited)
($ in millions)
YTD June December 31,
--------------------------- -------------------------------------------------------
2003 2002 2002 2001 2000 1999
------------ ------------ ------------ ------------ ------------ ------------
PRE-TAX INCOME
Fees $ 6.9 $ 5.3 $ 11.9 $ 8.6 $ 8.4 $ 7.6
Cost of Insurance 38.1 34.9 71.6 66.2 64.8 64.2
Interest Earned 49.3 54.3 108.4 111.9 108.7 112.0
Surrender Charges 1.3 2.6 3.9 4.0 5.5 7.2
------------ ------------ ------------ ------------ ------------ ------------
Total Revenues 95.6 97.1 195.8 190.7 187.4 191.0
------------ ------------ ------------ ------------ ------------ ------------
Net Death Benefits and Supplemental
Benefits 21.5 19.7 39.5 48.3 45.4 41.8
Incurred Expenses 23.3 20.2 44.3 34.6 32.5 35.0
Interest Credited 40.5 43.0 85.7 90.4 91.3 94.7
------------ ------------ ------------ ------------ ------------ ------------
Total Expenses 85.3 82.9 169.5 173.3 169.2 171.5
------------ ------------ ------------ ------------ ------------ ------------
Pre-tax Income 10.3 14.2 26.3 17.4 18.2 19.5
============ ============ ============ ============ ============ ============
- ------------------------------------------------------------------------------------------------------------------------------------
INCURRED EXPENSES
Commissions 10.5 5.1 15.2 9.8 5.8 5.8
Controllable Expenses 34.6 20.1 52.6 32.1 23.7 19.7
------------ ------------ ------------ ------------ ------------ ------------
Total Current Expenses 45.0 25.2 67.8 41.9 29.5 25.5
Acquisition Cost Deferred (30.3) (13.0) (40.2) (20.0) (8.7) (7.3)
Acquisition Cost Amortized 8.6 8.0 16.7 12.7 11.7 16.8
------------ ------------ ------------ ------------ ------------ ------------
Incurred Expenses 23.3 20.2 44.3 34.6 32.5 35.0
============ ============ ============ ============ ============ ============
- ------------------------------------------------------------------------------------------------------------------------------------
FUNDS UNDER MANAGEMENT
Deposits 86.8 66.5 149.3 104.6 90.9 97.2
Surrenders (58.2) (55.2) (107.4) (99.0) (108.2) (158.5)
Deaths (9.0) (9.5) (25.0) (18.5) (20.9) (20.2)
------------ ------------ ------------ ------------ ------------ ------------
Net Sales 19.6 1.8 16.9 (12.9) (38.2) (81.5)
Interest Credited 40.5 43.0 85.8 90.4 91.3 94.7
Fees (9.7) (6.5) (16.7) (10.5) (6.2) (4.6)
Cost of Insurance (38.1) (34.9) (71.6) (66.2) (64.8) (64.2)
------------ ------------ ------------ ------------ ------------ ------------
Change in Funds Under Management 12.3 3.4 14.4 .8 (17.9) (55.6)
Beginning Balance 1,510.0 1,495.6 1,495.6 1,494.8 1,512.7 1,568.3
------------ ------------ ------------ ------------ ------------ ------------
Ending Fund Balance 1,522.3 1,499.0 1,510.0 1,495.6 1,494.8 1,512.7
============ ============ ============ ============ ============ ============
LIFE INSURANCE IN FORCE $ 11,270.5 $ 9,719.2 $ 10,476.7 $ 9,465.6 $ 9,644.2 $ 9,955.7
============ ============ ============ ============ ============ ============
8
THE PHOENIX COMPANIES, INC.
UNIVERSAL LIFE / INTEREST SENSITIVE
Second Quarter 2003 (unaudited)
($ in millions)
PRE-TAX INCOME 2002 2003
------------------------------------------------------------ --------------------------
Quarter ended March June September December March June
------------ ------------ ------------ ------------ ------------ ------------
Fees $ 2.6 $ 2.7 $ 2.9 $ 3.7 $ 4.0 $ 2.9
Cost of Insurance 17.2 17.7 17.9 18.8 18.8 19.3
Interest Earned 26.4 27.9 26.8 27.3 24.7 24.6
Surrender Charges 1.2 1.4 .8 .5 .7 .6
------------ ------------ ------------ ------------ ------------ ------------
Total Revenues 47.4 49.7 48.4 50.3 48.2 47.4
------------ ------------ ------------ ------------ ------------ ------------
Net Death Benefits and Supplemental
Benefits 10.1 9.6 10.6 9.1 12.3 9.2
Incurred Expenses 9.9 10.3 11.5 12.6 11.0 12.3
Interest Credited 21.5 21.5 21.3 21.4 20.2 20.3
------------ ------------ ------------ ------------ ------------ ------------
Total Expenses 41.5 41.4 43.4 43.1 43.5 41.8
------------ ------------ ------------ ------------ ------------ ------------
Pre-tax Income 5.9 8.3 5.0 7.2 4.7 5.6
============ ============ ============ ============ ============ ============
- ---------------------------------------------------------------------------------------------------------------------------------
INCURRED EXPENSES
Commissions 2.0 3.1 3.7 6.4 6.2 4.3
Controllable Expenses 9.6 10.5 12.6 19.9 16.0 18.6
------------ ------------ ------------ ------------ ------------ ------------
Total Current Expenses 11.6 13.6 16.3 26.3 22.2 22.8
Acquisition Cost Deferred (5.8) (7.2) (10.0) (17.2) (15.3) (15.0)
Acquisition Cost Amortized 4.1 3.9 5.2 3.5 4.1 4.5
------------ ------------ ------------ ------------ ------------ ------------
Incurred Expenses 9.9 10.3 11.5 12.6 11.0 12.3
============ ============ ============ ============ ============ ============
- ---------------------------------------------------------------------------------------------------------------------------------
FUNDS UNDER MANAGEMENT
Deposits 31.6 34.9 33.3 49.5 45.6 41.2
Surrenders (25.0) (30.2) (26.7) (25.5) (30.9) (27.3)
Deaths (7.3) (2.2) (12.9) (2.6) (5.9) (3.1)
------------ ------------ ------------ ------------ ------------ ------------
Net Sales (.7) 2.5 (6.3) 21.4 8.8 10.8
Interest Credited 21.5 21.5 21.3 21.5 20.2 20.3
Fees (3.1) (3.4) (4.4) (5.8) (5.5) (4.2)
Cost of Insurance (17.2) (17.7) (17.9) (18.8) (18.8) (19.3)
------------ ------------ ------------ ------------ ------------ ------------
Change in Funds Under Management .5 2.9 (7.3) 18.3 4.7 7.6
Beginning Balance 1,495.6 1,496.1 1,499.0 1,491.7 1,510.0 1,514.7
------------ ------------ ------------ ------------ ------------ ------------
Ending Fund Balance 1,496.1 1,499.0 1,491.7 1,510.0 1,514.7 1,522.3
============ ============ ============ ============ ============ ============
LIFE INSURANCE IN FORCE $9,683.1 $9,719.2 $9,907.3 $10,476.7 $10,914.9 $11,270.5
============ ============ ============ ============ ============ ============
9
THE PHOENIX COMPANIES, INC.
LIFE SALES HIGHLIGHTS
Second Quarter 2003 (unaudited)
($ in millions)
LIFE INSURANCE PREMIUM YTD June December 31,
--------------------------- -----------------------------------------------------
2003 2002 2002 2001 2000 1999
----------- ----------- ----------- ----------- ----------- -----------
Wholesaler Channel Variable Universal Life $ 13.3 $ 38.3 $ 62.5 $ 53.8 $ 61.1 $ 44.8
Private Placement Variable Universal Life 9.9 16.7 51.0 29.5 18.2
----------- ----------- ----------- ----------- ----------- -----------
Variable Universal Life 23.2 55.0 113.5 83.3 79.3 44.8
Universal Life/Interest Sensitive 22.7 11.6 36.9 14.5 8.0 7.6
Term Life 9.3 6.0 15.1 11.4 14.6 10.5
Participating Whole Life .6 2.7 4.8 9.7 22.6 35.7
----------- ----------- ----------- ----------- ----------- -----------
Life Insurance Annualized Premium (1) 55.8 75.3 170.3 118.9 124.5 98.6
=========== =========== =========== =========== =========== ===========
Wholesaler Channel Variable Universal Life 11.2 11.7 25.1 49.7 46.2 63.2
Private Placement Variable Universal Life 11.6 15.3 129.9 36.9 15.5
----------- ----------- ----------- ----------- ----------- -----------
Variable Universal Life 22.8 27.0 155.0 86.6 61.7 63.2
Universal Life/Interest Sensitive 15.5 9.4 29.9 14.5 1.8 .3
Participating Whole Life .7 .8 2.4 5.4 24.4
----------- ----------- ----------- ----------- ----------- -----------
Life Insurance Single Premium 38.3 37.1 185.7 103.5 68.9 87.9
=========== =========== =========== =========== =========== ===========
Wholesaler Channel Variable Universal Life 24.5 50.0 87.6 103.5 107.3 108.0
Private Placement Variable Universal Life 21.5 32.0 180.9 66.4 33.7
----------- ----------- ----------- ----------- ----------- -----------
Variable Universal Life 46.0 82.0 268.5 169.9 141.0 108.0
Universal Life/Interest Sensitive 38.2 21.0 66.8 29.0 9.8 7.9
Term Life 9.3 6.0 15.1 11.4 14.6 10.5
Participating Whole Life .6 3.4 5.6 12.1 28.0 60.1
----------- ----------- ----------- ----------- ----------- -----------
Total Life Insurance Premium $ 94.1 $ 112.4 $ 356.0 $ 222.4 $ 193.4 $ 186.5
=========== =========== =========== =========== =========== ===========
(1) Annualized Premium represents first year premiums on an annual basis. Total
Premium represents Annualized and Single premiums.
10
THE PHOENIX COMPANIES, INC.
LIFE SALES HIGHLIGHTS
Second Quarter 2003 (unaudited)
($ in millions)
LIFE INSURANCE PREMIUM
Quarters ended 2002 2003
----------------------------------------------------- -------------------------
March June September December March June
----------- ----------- ----------- ----------- ----------- -----------
Wholesaler Channel Variable Universal Life $ 22.3 $ 16.0 $ 11.3 $ 12.9 $ 6.3 $ 7.0
Private Placement Variable Universal Life 3.5 13.2 19.0 15.3 4.4 5.5
----------- ----------- ----------- ----------- ----------- -----------
Variable Universal Life 25.8 29.2 30.3 28.2 10.7 12.5
Universal Life/Interest Sensitive 8.0 3.6 6.9 18.4 11.9 10.8
Term Life 2.7 3.3 3.7 5.3 4.5 4.8
Participating Whole Life 1.1 1.6 .7 1.4 .6
----------- ----------- ----------- ----------- ----------- -----------
Life Insurance Annualized Premium (1) 37.6 37.7 41.6 53.3 27.7 28.1
=========== =========== =========== =========== =========== ===========
Wholesaler Channel Variable Universal Life 4.9 6.8 6.9 6.5 4.1 7.1
Private Placement Variable Universal Life 10.9 4.4 47.1 67.5 10.8 .8
----------- ----------- ----------- ----------- ----------- -----------
Variable Universal Life 15.8 11.2 54.0 74.0 14.9 7.9
Universal Life/Interest Sensitive 2.7 6.7 6.1 14.5 7.2 8.3
Participating Whole Life .4 .3 .1
----------- ----------- ----------- ----------- ----------- -----------
Life Insurance Single Premium 18.9 18.2 60.1 88.6 22.1 16.2
=========== =========== =========== =========== =========== ===========
Wholesaler Channel Variable Universal Life 27.2 22.8 18.2 19.4 10.4 14.1
Private Placement Variable Universal Life 14.4 17.6 66.1 82.8 15.2 6.3
----------- ----------- ----------- ----------- ----------- -----------
Variable Universal Life 41.6 40.4 84.3 102.2 25.6 20.4
Universal Life/Interest Sensitive 10.7 10.3 13.0 32.9 19.1 19.1
Term Life 2.7 3.3 3.7 5.3 4.5 4.8
Participating Whole Life 1.5 1.9 .7 1.5 .6
----------- ----------- ----------- ----------- ----------- -----------
Total Life Insurance Premium $ 56.5 $ 55.9 $ 101.7 $ 141.9 $ 49.8 $ 44.3
=========== =========== =========== =========== =========== ===========
(1) Annualized Premium represents first year premiums on an annual basis. Total
Premium represents Annualized and Single premiums.
11
THE PHOENIX COMPANIES, INC.
ANNUITIES
Second Quarter 2003 (unaudited)
($ in millions)
YTD June December 31,
------------------------------ --------------------------------------------------------------
2003 2002 2002 2001 2000 1999
------------- ------------- ------------- ------------ ------------- --------------
PRE-TAX INCOME
Premiums
Fees $ 26.1 $ 29.6 $ 57.1 $ 64.6 $ 78.2 $ 71.9
Interest Earned 68.2 39.4 98.3 40.3 16.3 13.7
Surrender Charges 2.9 2.3 6.6 3.9 5.1 5.5
------------- ------------- ------------- ------------ ------------- --------------
Total Revenues 97.2 71.3 162.0 108.8 99.6 91.1
------------- ------------- ------------- ------------ ------------- --------------
Policy Benefits and Change
in Reserves
Mortality Cost 2.8 2.1 10.8 4.3 3.0 2.7
Incurred Expenses 39.4 29.6 79.8 54.4 77.3 48.9
Interest Credited 61.7 34.5 92.0 39.2 15.1 8.7
------------- ------------- ------------- ------------ ------------- --------------
Total Expenses 103.9 68.0 182.6 97.9 95.4 60.3
------------- ------------- ------------- ------------ ------------- --------------
Pre-tax Income (Loss) (6.7) 3.3 (20.6) 10.9 4.2 30.8
============= ============= ============= ============ ============= ==============
- ----------------------------------------------------------------------------------------------------------------------------------
INCURRED EXPENSES
Commissions/Concessions 28.3 28.9 81.3 44.0 29.2 14.5
Controllable Expenses 34.3 33.0 66.5 75.2 54.1 32.4
------------- ------------- ------------- ------------ ------------- --------------
Total Current Expenses 62.6 61.9 147.8 119.2 83.2 46.9
Acquisition Cost Deferred (38.7) (43.5) (102.9) (83.8) (43.0) (21.1)
Acquisition Cost Amortized 15.5 11.2 34.9 19.0 37.0 23.1
------------- ------------- ------------- ------------ ------------- --------------
Incurred Expenses $ 39.4 $ 29.6 $ 79.8 $ 54.4 $ 77.3 $ 48.9
============= ============= ============= ============ ============= ==============
12
THE PHOENIX COMPANIES, INC.
ANNUITIES
Second Quarter 2003 (unaudited)
($ in millions)
PRE-TAX INCOME 2002 2003
----------------------------------------------------------- ---------------------------
Quarters ended March June September December March June
------------- ------------ ------------- ------------ ------------ ------------
Premiums
Fees $ 15.2 $ 14.4 $ 14.0 $ 13.5 $ 12.8 $ 13.3
Interest Earned 16.6 22.8 30.3 28.6 34.1 34.1
Surrender Charges 1.1 1.2 2.3 2.0 1.5 1.4
------------- ------------ ------------- ------------ ------------ ------------
Total Revenues 32.9 38.4 46.6 44.1 48.4 48.8
------------- ------------ ------------- ------------ ------------ ------------
Policy Benefits and Change in Reserves
Mortality Cost .2 1.9 5.2 1.7 2.8
Incurred Expenses 13.1 16.5 31.0 19.2 19.4 20.0
Interest Credited 15.3 19.2 29.3 28.2 31.5 30.2
------------- ------------ ------------- ------------ ------------ ------------
Total Expenses 30.4 37.6 65.5 49.1 53.7 50.2
------------- ------------ ------------- ------------ ------------ ------------
Pre-tax Income (Loss) 2.5 .8 (18.9) (5.0) (5.3) (1.4)
============= ============ ============= ============ ============ ============
- ------------------------------------------------------------------------------------------------------------------------------------
INCURRED EXPENSES
Commissions/Concessions 11.4 17.5 44.1 8.3 16.7 11.6
Controllable Expenses 16.3 16.7 16.1 17.4 18.0 16.3
------------- ------------ ------------- ------------ ------------ ------------
Total Current Expenses 27.7 34.2 60.2 25.7 34.7 27.9
Acquisition Cost Deferred (18.9) (24.6) (48.5) (10.9) (24.7) (14.0)
Acquisition Cost Amortized 4.3 6.9 19.3 4.4 9.4 6.1
------------- ------------ ------------- ------------ ------------ ------------
Incurred Expenses $ 13.1 $ 16.5 $ 31.0 $ 19.2 $ 19.4 $ 20.0
============= ============ ============= ============ ============ ============
13
THE PHOENIX COMPANIES, INC.
ANNUITIES NET FLOWS AND FUNDS UNDER MANAGEMENT
Second Quarter 2003 (unaudited)
($ in millions)
FUNDS UNDER MANAGEMENT YTD June December 31,
---------------------------- --------------------------------------------------------
2003 2002 2002 2001 2000 1999
------------- ------------- ------------- ------------- ------------- ------------
Annuities
Deposits $ 803.1 $ 1,236.4 $ 2,258.4 $ 1,492.9 $ 687.0 $ 377.4
Surrenders (426.7) (316.4) (736.7) (482.3) (608.5) (618.1)
------------- ------------- ------------- ------------- ------------- ------------
Net Sales 376.4 920.0 1,521.7 1,010.6 78.5 (240.7)
Performance and Interest Credited 371.6 (220.4) (338.0) (563.1) (415.2) 991.1
Fees (26.9) (31.6) (58.8) (67.3) (78.2) (71.9)
Deaths (35.6) (16.2) (40.6) (34.3) (24.9) (22.0)
Acquisitions 114.9
------------- ------------- ------------- ------------- ------------- ------------
Change in Funds Under Management 685.5 651.8 1,084.3 345.9 (439.8) 771.4
Beginning Balance 5,833.4 4,749.1 4,749.1 4,403.2 4,843.0 4,072.3
------------- ------------- ------------- ------------- ------------- ------------
Ending Balance $ 6,518.9 $ 5,400.9 $ 5,833.4 $ 4,749.1 $ 4,403.2 $ 4,843.7
============= ============= ============= ============= ============= ============
VA Funds in Guaranteed Interest Accounts (1) $ 2,210.5 $ 1,534.2 $ 2,159.3 $ 955.0 $ 333.5 $ 210.9
============= ============= ============= ============= ============= ============
Fixed Annuities (1) $ 1,002.2 $ 559.7 $ 737.2 $ 267.3
============= ============= ============= =============
(1) Amounts are included in the annuities funds under management table above.
14
THE PHOENIX COMPANIES, INC.
ANNUITIES NET FLOWS AND FUNDS UNDER MANAGEMENT
Second Quarter 2003 (unaudited)
($ in millions)
FUNDS UNDER MANAGEMENT 2002 2003
------------------------------------------------------------- ----------------------------
Quarters ended March June September December March June
-------------- ------------- ------------ ------------- ------------- ------------
Annuities
Deposits $ 575.4 $ 661.0 $ 804.2 $ 217.8 $ 432.1 $ 371.0
Surrenders (127.0) (189.4) (180.5) (239.8) (231.6) (195.1)
-------------- ------------- ------------ ------------- ------------- ------------
Net Sales 448.4 471.6 623.7 (22.0) 200.5 175.9
Performance and Interest Credited (1.4) (219.0) (294.7) 177.1 20.2 351.4
Fees (15.9) (15.7) (13.8) (13.4) (11.5) (15.4)
Deaths (7.2) (9.0) (11.4) (13.0) (22.6) (13.0)
-------------- ------------- ------------ ------------- ------------- ------------
Change in Funds Under Management 423.9 227.9 303.8 128.7 186.6 498.9
Beginning Balance 4,749.1 5,173.0 5,400.9 5,704.7 5,833.4 6,020.0
-------------- ------------- ------------ ------------- ------------- ------------
Ending Balance $ 5,173.0 $5,400.9 $5,704.7 $5,833.4 $6,020.0 $6,518.9
============== ============= ============ ============= ============= ============
VA Funds in Guaranteed Interest $ 1,179.5 $1,534.2 $2,118.1 $2,159.3 $2,224.8 $2,210.5
Accounts (1) ============== ============= ============ ============= ============= ============
Fixed Annuities (1) $ 378.1 $ 559.7 $ 706.6 $ 737.2 $ 921.4 $1,002.2
============== ============= ============ ============= ============= ============
(1) Amounts are included in the annuities funds under management table above.
15
THE PHOENIX COMPANIES, INC.
SUPPLEMENTARY LIFE AND ANNUITY INFORMATION
Second Quarter 2003 (unaudited)
($ in millions)
YTD June December 31,
------------------------ --------------------------------------------------
2003 2002 2002 2001 2000 1999
----------- ----------- ----------- ----------- ----------- -----------
DEFERRED ACQUISITION COSTS
Variable Universal Life $ 315.4 $ 284.3 $ 310.4 $ 252.8 $ 211.4 $ 161.5
Universal Life 183.4 142.4 163.1 134.7 127.4 130.4
Variable Annuities 277.5 230.9 264.9 211.4 147.0 141.0
Fixed Annuities 36.8 12.4 26.3 .4
Participating 549.9 557.5 554.6 517.4 554.8 786.6
Other 24.4 18.8 21.2 17.5 17.4 21.7
Adjustment for Unrealized Gains and Losses (139.4) (34.3) (106.4) (10.5) (39.0) 77.6
----------- ----------- ----------- ----------- ----------- -----------
Total $ 1,248.0 $ 1,212.0 $ 1,234.1 $ 1,123.7 $ 1,019.0 $ 1,318.8
=========== =========== =========== =========== =========== ===========
- ------------------------------------------------------------------------------------------------------------------------------------
VARIABLE ANNUITY GUARANTEED MINIMUM DEATH BENEFITS
Death Benefit in Excess of Fund Value $ 898.6 $ 440.8 $ 1,148.4
Death Benefit in Excess of Fund Value,
Net of Reinsurance 178.7 10.3 234.9
Statutory Reserve 12.9 6.0 15.8
GAAP Reserve 7.9 .5 8.7
=========== =========== ===========
16
THE PHOENIX COMPANIES, INC.
SUPPLEMENTARY LIFE AND ANNUITY INFORMATION
Second Quarter 2003 (unaudited)
($ in millions)
2002 2003
----------------------------------------------- ----------------------
Quarters ended March June September December March June
---------- ---------- ---------- ----------- ---------- ----------
DEFERRED ACQUISITION COSTS
Variable Universal Life $ 268.6 $ 284.3 $ 303.0 $ 310.4 $ 310.9 $ 315.4
Universal Life 139.1 142.4 147.2 163.1 172.6 183.4
Variable Annuities 219.5 230.9 267.6 264.9 271.2 277.5
Fixed Annuities 6.1 12.4 17.0 26.3 35.3 36.8
Participating 544.8 557.5 555.6 554.6 556.4 549.9
Other 17.7 18.8 19.8 21.2 22.6 24.4
Adjustment for Unrealized Investment Gains and Losses (3.9) (34.3) (74.9) (106.4) (99.0) (139.4)
---------- ---------- ---------- ----------- ---------- ----------
Total $1,191.9 $1,212.0 $1,235.3 $ 1,234.1 $1,270.0 $1,248.0
========== ========== ========== =========== ========== ==========
- -----------------------------------------------------------------------------------------------------------------------------------
VARIABLE ANNUITY GUARANTEED MINIMUM DEATH BENEFITS
Death Benefit in Excess of Fund Value $ 337.5 $ 440.8 $ 822.5 $ 1,148.4 $1,188.4 $ 898.6
Death Benefit in Excess of Fund Value,
Net of Reinsurance 5.7 10.3 194.3 234.9 242.3 178.7
Statutory Reserve 5.3 6.0 16.6 15.8 16.1 12.9
GAAP Reserve .3 .5 8.1 8.7 9.2 7.9
========== ========== ========== =========== ========== ==========
17
THE PHOENIX COMPANIES, INC.
ASSET MANAGEMENT
Second Quarter 2003 (unaudited)
($ in millions)
SEGMENT INCOME (1) YTD June December 31,
------------------------- ----------------------------------------------------
2003 2002 2002 2001 2000 1999
----------- ----------- ------------ ---------- ----------- ----------
Investment Management Fees $ 98.1 $ 121.0 $ 227.4 $ 221.6 $ 282.1 $ 247.0
Mutual Funds - Ancillary Fees 9.1 10.7 20.4 24.3 32.4 31.7
Other Revenue 3.8 5.1 10.2 12.9 8.8 4.7
----------- ----------- ------------ ---------- ----------- ----------
Total Revenues 111.0 136.8 258.0 258.8 323.3 283.4
----------- ----------- ------------ ---------- ----------- ----------
Employment Expenses 65.3 78.9 140.5 130.0 137.4 114.0
Other Operating Expenses 37.2 39.9 77.7 83.2 79.9 69.7
Amortization of Intangibles 16.6 15.9 32.5 49.0 31.8 30.3
Intangible Asset Impairments 66.3
----------- ----------- ------------ ---------- ----------- ----------
Total Operating Expenses 119.1 134.7 317.0 262.2 249.1 214.0
----------- ----------- ------------ ---------- ----------- ----------
Management Income (Loss) (8.2) 2.1 (59.0) (3.4) 74.2 69.4
Other Income (Expense) - Net 1.3 .4 1.0 1.6 3.7 4.0
Minority Interest (4.7) (6.1) (11.9) (6.9) (16.5) (13.4)
----------- ----------- ------------ ---------- ----------- ----------
Segment Income, before income taxes (11.6) (3.6) (69.9) (8.7) 61.4 60.0
Applicable Income taxes (Benefit) (4.4) (1.9) (6.0) 2.6 32.0 28.9
----------- ----------- ------------ ---------- ----------- ----------
Segment Income (Loss) $ (7.1) $ (1.7) $ (63.9) $ (11.3) $ 29.4 $ 31.1
=========== =========== ============ ========== =========== ==========
- ---------------------------------------------------------------------------------------------------------------------------
(1) Effective for the second quarter of 2003, the company's equity investment in
Aberdeen Asset Management, PLC has been moved to the Corporate and Other
Segment for all periods presented.
18
THE PHOENIX COMPANIES, INC.
ASSET MANAGEMENT
Second Quarter 2003 (unaudited)
($ in millions)
SEGMENT INCOME (1) 2002 2003
--------------------------------------------------------- ---------------------------
Quarters ended March June September December March June
------------- ------------ ------------- ------------- ------------- -----------
Investment Management Fees $ 59.2 $ 61.8 $ 55.6 $ 50.8 $ 48.7 $ 49.4
Mutual Funds - Ancillary Fees 5.4 5.3 4.9 4.8 4.4 4.7
Other Revenue 2.4 2.7 2.3 2.8 1.6 2.2
------------- ------------ ------------- ------------- ------------- -----------
Total Revenues 67.0 69.8 62.8 58.4 54.7 56.3
------------- ------------ ------------- ------------- ------------- -----------
Employment Expenses 38.2 40.7 32.8 28.8 30.7 34.6
Other Operating Expenses 18.9 21.0 19.8 18.0 19.5 17.7
Amortization of Intangibles 8.1 7.8 8.7 7.9 8.4 8.2
Intangible Asset Impairments 66.3
------------- ------------ ------------- ------------- ------------- -----------
Total Operating Expenses 65.2 69.5 127.6 54.7 58.6 60.5
------------- ------------ ------------- ------------- ------------- -----------
Management Income (Loss) 1.8 .3 (64.8) 3.7 (3.9) (4.2)
Other Income (Expense) - Net .4 .1 .5 .9 .4
Minority Interest (2.9) (3.3) (3.1) (2.6) (2.8) (1.9)
------------- ------------ ------------- ------------- ------------- -----------
Segment Income, before income taxes (1.1) (2.6) (67.8) 1.6 (5.8) (5.8)
Applicable Income Taxes (Benefit) (.5) (1.4) (5.2) 1.1 (2.1) (2.3)
------------- ------------ ------------- ------------- ------------- -----------
Segment Income (Loss) $ (.6) $ (1.2) $(62.6) $ .5 $ (3.7) $ (3.4)
============= ============ ============= ============= ============= ===========
- ---------------------------------------------------------------------------------------------------------------------------------
(1) Effective for the second quarter of 2003, the company's equity investment in
Aberdeen Asset Management, PLC has been moved to the Corporate and Other
Segment for all periods presented.
19
THE PHOENIX COMPANIES, INC.
ASSET MANAGEMENT NET FLOWS AND ASSETS UNDER MANAGEMENT
Second Quarter 2003 (unaudited)
($ in millions)
YTD June December 31,
------------------------ ---------------------------------------------------
2003 2002 2002 2001 2000 1999
----------- ----------- ----------- ----------- ----------- ------------
PRIVATE CLIENT PRODUCTS:
Managed Accounts
Inflows $ 1,120.0 $ 2,882.2 $ 4,421.1 $ 2,721.9 $ 3,869.4 $ 2,143.2
Outflows (1,301.0) (1,354.3) (2,716.3) (2,546.4) (1,619.8) (1,034.3)
----------- ----------- ----------- ----------- ----------- ------------
Net Flows (181.0) 1,527.9 1,704.8 175.5 2,249.6 1,108.9
Performance 1,776.2 (1,220.8) (3,278.2) (3,545.8) (2,859.1) 1,939.0
Acquisitions (Divestitures) 5,809.0 5,914.3 748.5 (130.0) 433.0
----------- ----------- ----------- ----------- ----------- ------------
Change in Assets Under Management 1,595.2 6,116.1 4,340.9 (2,621.8) (739.5) 3,480.9
Beginning Balance 13,179.2 8,838.3 8,838.3 11,460.1 12,199.6 8,718.7
----------- ----------- ----------- ----------- ----------- ------------
Ending Balance 14,774.4 14,954.4 13,179.2 8,838.3 11,460.1 12,199.6
----------- ----------- ----------- ----------- ----------- ------------
Mutual Funds
Inflows 762.5 652.6 1,332.8 1,817.8 2,068.5 1,657.8
Outflows (1,041.7) (1,331.6) (2,754.0) (2,756.4) (3,492.0) (3,216.3)
----------- ----------- ----------- ----------- ----------- ------------
Net Flows (279.2) (679.0) (1,421.2) (938.6) (1,423.5) (1,558.5)
Performance 795.7 (1,200.1) (1,811.8) (2,556.5) (1,933.2) 3,124.7
Acquisitions (Divestitures) 333.5 333.5 2,099.8
----------- ----------- ----------- ----------- ----------- ------------
Change in Assets Under Management 516.5 (1,545.6) (2,899.5) (3,495.1) (3,356.7) 3,666.0
Beginning Balance 8,322.1 11,221.6 11,221.6 14,716.7 18,073.4 14,407.4
----------- ----------- ----------- ----------- ----------- ------------
Ending Balance 8,838.6 9,676.0 8,322.1 11,221.6 14,716.7 18,073.4
----------- ----------- ----------- ----------- ----------- ------------
INSTITUTIONAL PRODUCTS:
Inflows 1,711.9 1,793.3 4,380.4 4,989.0 5,572.5 5,843.7
Outflows (1,716.0) (2,794.8) (4,480.0) (3,766.9) (7,355.6) (5,025.6)
----------- ----------- ----------- ----------- ----------- ------------
Net Flows (4.1) (1,001.5) (99.6) 1,222.1 (1,783.1) 818.1
Performance (1) (195.0) (1,537.9) (2,773.1) (1,152.2) 935.4 1,628.2
Other (1) 651.1 928.2 1,789.0 1,438.4 141.3 274.3
Acquisitions (Divestitures) 1,507.7 1,507.7 105.9 (3,206.0) 1,246.5
----------- ----------- ----------- ----------- ----------- ------------
Change in Assets Under Management 452.0 (103.5) 424.0 1,614.2 (3,912.4) 3,967.1
Beginning Balance 32,454.2 32,030.2 32,030.2 30,416.0 34,328.4 30,361.3
----------- ----------- ----------- ----------- ----------- ------------
Ending Balance 32,906.2 31,926.7 32,454.2 32,030.2 30,416.0 34,328.4
----------- ----------- ----------- ----------- ----------- ------------
TOTAL PRIVATE CLIENT AND
INSTITUTIONAL PRODUCTS:
Inflows 3,594.4 5,328.1 10,134.3 9,528.7 11,510.4 9,644.7
Outflows (4,058.7) (5,480.7) (9,950.3) (9,069.7) (12,467.4) (9,276.2)
----------- ----------- ----------- ----------- ----------- ------------
Net Flows (464.3) (152.6) 184.0 459.0 (957.0) 368.5
Performance (1) 2,376.9 (3,958.8) (7,863.1) (7,254.5) (3,856.9) 6,691.9
Other (1) 651.1 928.2 1,789.0 1,438.4 141.3 274.3
Acquisitions (Divestitures) 7,650.2 7,755.5 854.4 (3,336.0) 3,779.3
----------- ----------- ----------- ----------- ----------- ------------
Change in Assets Under Management 2,563.7 4,467.0 1,865.4 (4,502.7) (8,008.6) 11,114.0
Beginning Balance 53,955.5 52,090.1 52,090.1 56,592.8 64,601.4 53,487.4
----------- ----------- ----------- ----------- ----------- ------------
Ending Balance $56,519.2 $56,557.1 $53,955.5 $52,090.1 $56,592.8 $ 64,601.4
=========== =========== =========== =========== =========== ============
Variable Product net flows included
in Mutual Funds above $ 48.7 $ (438.1) $ (686.5) $ (734.7) $ (634.6) $ 576.4
=========== =========== =========== =========== =========== ============
(1) Certain reclassifications have been made to prior periods to conform with
the current presentation.
20
THE PHOENIX COMPANIES, INC.
ASSET MANAGEMENT NET FLOWS AND ASSETS UNDER MANAGEMENT
Second Quarter 2003 (unaudited)
($ in millions)
2002 2003
------------------------------------------------------------- -----------------------------
Quarters ended March June September December March June
------------- ------------- ------------- ------------- ------------- -------------
PRIVATE CLIENT PRODUCTS:
Managed Accounts
Inflows $ 1,149.7 $ 1,732.5 $ 892.2 $ 646.8 $ 568.8 $ 551.2
Outflows (538.0) (816.3) (810.1) (551.9) (688.4) (612.6)
------------- ------------- ------------- ------------- ------------- -------------
Net Flows 611.7 916.2 82.1 94.9 (119.6) (61.4)
Performance 661.2 (1,882.0) (2,320.1) 262.6 434.8 1,341.4
Acquisitions (Divestitures) 5,809.0 105.3
------------- ------------- ------------- ------------- ------------- -------------
Change in Assets Under Management 7,081.9 (965.8) (2,132.7) 357.5 315.2 1,280.0
Beginning Balance 8,838.3 15,920.2 14,954.4 12,821.7 13,179.2 13,494.4
------------- ------------- ------------- ------------- ------------- -------------
Ending Balance 15,920.2 14,954.4 12,821.7 13,179.2 13,494.4 14,774.4
------------- ------------- ------------- ------------- ------------- -------------
Mutual Funds:
Inflows 282.1 370.5 318.4 361.8 313.3 449.2
Outflows (603.7) (727.9) (610.6) (811.9) (498.8) (542.9)
------------- ------------- ------------- ------------- ------------- -------------
Net Flows (321.6) (357.4) (292.2) (450.1) (185.5) (93.7)
Performance (90.2) (1,109.9) (994.6) 383.0 (101.4) 897.1
Acquisitions (Divestitures) 333.5
------------- ------------- ------------- ------------- ------------- -------------
Change in Assets Under Management (78.3) (1,467.3) (1,286.8) (67.1) (286.9) 803.4
Beginning Balance 11,221.6 11,143.3 9,676.0 8,389.2 8,322.1 8,035.2
------------- ------------- ------------- ------------- ------------- -------------
Ending Balance 11,143.3 9,676.0 8,389.2 8,322.1 8,035.2 8,838.6
------------- ------------- ------------- ------------- ------------- -------------
INSTITUTIONAL PRODUCTS:
Inflows 832.7 960.6 1,798.6 788.5 793.7 918.2
Outflows (723.3) (2,071.5) (1,178.3) (506.9) (640.9) (1,075.1)
------------- ------------- ------------- ------------- ------------- -------------
Net Flows 109.4 (1,110.9) 620.3 281.6 152.8 (156.9)
Performance (1) (425.9) (1,112.0) (1,063.1) (172.1) (1,724.4) 1,529.4
Other (1) 409.4 518.8 600.3 260.5 496.4 154.7
Acquisitions (Divestitures) 1,507.7
------------- ------------- ------------- ------------- ------------- -------------
Change in Assets Under Management 1,600.6 (1,704.1) 157.5 370.0 (1,075.2) 1,527.2
Beginning Balance 32,030.2 33,630.8 31,926.7 32,084.2 32,454.2 31,379.0
------------- ------------- ------------- ------------- ------------- -------------
Ending Balance 33,630.8 31,926.7 32,084.2 32,454.2 31,379.0 32,906.2
------------- ------------- ------------- ------------- ------------- -------------
TOTAL PRIVATE CLIENT AND
INSTITUTIONAL PRODUCTS:
Inflows 2,264.5 3,063.6 3,009.2 1,797.1 1,675.8 1,918.6
Outflows (1,865.0) (3,615.7) (2,599.0) (1,870.7) (1,828.1) (2,230.6)
------------- ------------- ------------- ------------- ------------- -------------
Net Flows 399.5 (552.1) 410.2 (73.6) (152.3) (312.0)
Performance (1) 145.1 (4,103.9) (4,377.8) 473.5 (1,391.0) 3,767.9
Other (1) 409.4 518.8 600.3 260.5 496.4 154.7
Acquisitions (Divestitures) 7,650.2 105.3
------------- ------------- ------------- ------------- ------------- -------------
Change in Assets Under Management 8,604.2 (4,137.2) (3,262.0) 660.4 (1,046.9) 3,610.6
Beginning Balance 52,090.1 60,694.3 56,557.1 53,295.1 53,955.5 52,908.6
------------- ------------- ------------- ------------- ------------- -------------
Ending Balance $60,694.3 $56,557.1 $53,295.1 $53,955.5 $52,908.6 $56,519.2
============= ============= ============= ============= ============= =============
$ (123.2) $ (314.9) $ (273.8) $ 25.4 $ (106.4) $ 155.1
============= ============= ============= ============= ============= =============
Variable Product net flows included in Mutual Funds above
(1) Certain reclassifications have been made to prior periods to conform with
the current presentation.
21
THE PHOENIX COMPANIES, INC.
VENTURE CAPITAL SEGMENT
Second Quarter 2003 (unaudited)
($ in millions)
YTD June December 31,
---------------------------- ---------------------------------------------------------
2003 2002 2002 2001 2000 1999
------------- ------------- ------------- ------------- ------------ -------------
SEGMENT INCOME
Operating Loss $ (3.5) $ (3.6) $ (7.4) $ (7.3) $ (7.8) $ (8.9)
Realized Gains (Losses) on Cash
and Stock Distributions (5.2) (5.1) (4.7) 26.2 222.2 84.7
Change in Unrealized Gains on
Investments Held in Partnerships 38.4 (26.2) (47.2) (178.5) 62.9 64.1
------------- ------------- ------------- ------------- ------------ -------------
Equity in Partnership Earnings,
before income taxes 29.7 (34.9) (59.3) (159.6) 277.3 139.9
Applicable Income Taxes (Benefit) 10.4 (12.1) (20.7) (55.9) 97.1 49.0
------------- ------------- ------------- ------------- ------------ -------------
Segment Income (Loss) $ 19.3 $ (22.8) $ (38.6) $ (103.7) $ 180.2 $ 90.9
============= ============= ============= ============= ============ =============
- ------------------------------------------------------------------------------------------------------------------------------------
VENTURE CAPITAL INVESTMENTS
Contributions (Dollars Invested) 21.5 20.5 42.2 47.0 97.0 108.5
Equity In Earnings of Partnerships 29.7 (34.9) (59.3) (159.6) 277.3 139.9
Distributions (8.7) (15.5) (41.8) (63.0) (245.1) (101.5)
Sale of Partnership Interests and
Transfer to Closed Block (52.2)
Realized Loss on Sale of Partnership
Interests and Transfer to Closed Block (14.3) (5.0)
------------- ------------- ------------- ------------- ------------ -------------
Change in Venture Capital Investments (24.0) (29.9) (63.9) (175.6) 129.2 146.9
Beginning Balance 227.8 291.7 291.7 467.3 338.1 191.2
------------- ------------- ------------- ------------- ------------ -------------
Ending Balance $ 203.8 $ 261.8 $ 227.8 $ 291.7 $ 467.3 $ 338.1
============= ============= ============= ============= ============ =============
- ------------------------------------------------------------------------------------------------------------------------------------
PORTFOLIO BREAKDOWN
Technology 36.6 29.4 25.0 41.3
Telecom 12.6 10.5 10.2 19.1
Biotech 14.9 9.7 11.1 14.1
Healthcare 8.0 6.8 9.2 10.7
Consumer and Business Products -------------
and Services 29.6 Included 45.9 46.6
Financial Services 28.2 in Other 28.1 30.3
-------------
34.3 142.7 50.6 57.8
------------- ------------- ------------- -------------
Total Private Holdings 164.2 199.1 180.1 219.9
Public Holdings 15.6 29.9 23.0 39.8
Cash and Cash Equivalents 9.2 24.9 21.6 22.5
Other 14.8 7.9 3.1 9.5
------------- ------------- ------------- -------------
Total $ 203.8 $ 261.8 $ 227.8 $ 291.7
============= ============= ============= =============
22
THE PHOENIX COMPANIES, INC.
VENTURE CAPITAL SEGMENT
Second Quarter 2003 (unaudited)
($ in millions)
2002 2003
--------------------------------------------------------- --------------------------
Quarters ended March June September December March June
------------ ------------ ------------ ------------ ------------ -----------
SEGMENT INCOME
Operating Loss $ (2.0) $ (1.6) $ (2.2) $ (1.6) $ (.9) $ (2.6)
Realized Gains (Losses) on Cash
and Stock Distributions (12.5) 7.4 (2.1) 2.5 (6.2) 1.0
Change in Unrealized Gains on
Investments Held in Partnerships 9.5 (35.7) (17.8) (3.2) 31.0 7.4
------------ ------------ ------------ ------------ ------------ -----------
Equity in Partnership Earnings, before
income taxes (5.0) (29.9) (22.1) (2.3) 23.9 5.8
Applicable Income Taxes (Benefit) (1.8) (10.4) (7.7) (.8) 8.4 2.0
------------ ------------ ------------ ------------ ------------ -----------
Segment Income (Loss) (3.2) (19.5) (14.4) (1.5) 15.5 3.8
============ ============ ============ ============ ============ ===========
- ---------------------------------------------------------------------------------------------------------------------- -----------
VENTURE CAPITAL INVESTMENTS
Contributions (Dollars Invested) 13.0 7.5 10.2 11.5 11.6 9.9
Equity In Earnings of Partnerships (5.0) (29.9) (22.1) (2.3) 23.9 5.8
Distributions (9.4) (6.1) (19.3) (7.0) (3.0) (5.7)
Sale of Partnership Interests and
Transfer to Closed Block (52.2)
Realized Loss on Sale of Partnership
Interests and Transfer to Closed Block (5.0) (13.8) (.5)
------------ ------------ ------------ ------------ ------------ -----------
Change in Venture Capital Investments (1.4) (28.5) (31.2) (2.8) (33.5) 9.5
Beginning Balance 291.7 290.3 261.8 230.6 227.8 194.3
------------ ------------ ------------ ------------ ------------ -----------
Ending Balance 290.3 261.8 230.6 227.8 194.3 203.8
============ ============ ============ ============ ============ ===========
- ---------------------------------------------------------------------------------------------------------------------- -----------
PORTFOLIO BREAKDOWN
Technology 43.6 29.4 20.3 25 23.5 36.6
Telecom 17.3 10.5 8.7 10.2 7.4 12.6
Biotech 15.7 9.7 10.4 11.1 9.8 14.9
Healthcare 8.4 6.8 8.9 9.2 6.7 8.0
------------------------------------------
Consumer and Business Products and Services Included in Other 45.9 32.0 29.6
Financial Services 28.1 29.7 28.2
------------------------------------------
Other 140.6 142.7 118.8 50.6 57.7 34.3
------------ ------------ ------------ ------------ ------------ -----------
Total Private Holdings 225.6 199.1 167.1 180.1 166.8 164.2
Public Holdings 39.1 29.9 21.5 23.0 11.4 15.6
Cash and Cash Equivalents 16.1 24.9 27.2 21.6 9.2 9.2
Other 9.5 7.9 14.8 3.1 6.9 14.8
------------ ------------ ------------ ------------ ------------ -----------
Total $ 290.3 $ 261.8 $ 230.6 $ 227.8 $ 194.3 $ 203.8
============ ============ ============ ============ ============ ===========
23
THE PHOENIX COMPANIES, INC.
CORPORATE AND OTHER
Second Quarter 2003 (unaudited)
($ in millions)
SEGMENT INCOME YTD June December 31,
---------------------------- -------------------------------------------------------
2003 2002 2002 2001 2000 1999
------------- ------------- ------------- ------------ ------------ ------------
Corporate Investment Income (Loss) $ 1.4 $ 3.8 $ 1.5 $ 7.2 $ 36.7 $ 13.1
Interest Expense (19.7) (15.4) (31.4) (27.3) (32.7) (34.0)
Corporate Expenses (3.0) (6.8) (10.4) (19.9) (53.5) (42.4)
International (1) (1.3) 5.9 4.2 7.7 12.1 10.0
Other (1.3) (1.6) (3.8) (2.4) (23.4) 3.5
------------- ------------- ------------- ------------ ------------ ------------
Segment Income (Loss), before income taxes (23.9) (14.3) (39.9) (34.7) (60.8) (49.8)
Applicable Income Taxes (Benefit) (7.4) (11.1) (29.7) (20.9) (37.2) (27.1)
------------- ------------- ------------- ------------ ------------ ------------
Segment Income (Loss) $ (16.5) $ (3.2) $ (10.2) $ (13.8) $ (23.6) $ (22.7)
============= ============= ============= ============ ============ ============
(1) Effective for the second quarter of 2003, International includes our equity
investment in Aberdeen Asset Management, PLC for all periods presented.
24
THE PHOENIX COMPANIES, INC.
CORPORATE AND OTHER
Second Quarter 2003 (unaudited)
($ in millions)
SEGMENT INCOME 2002 2003
--------------------------------------------- ---------------------
Quarters ended March June September December March June
--------- --------- --------- --------- --------- ---------
Corporate Investment Income $ 2.7 $ 1.1 $ (.3) $ (1.9) $ .5 $ .9
Interest Expense (7.7) (7.7) (7.7) (8.3) (9.8) (9.9)
Corporate Expenses (4.3) (2.5) (1.3) (2.3) .1 (3.1)
International (1) 3.8 2.1 .6 (2.2) (1.3)
Other (.2) (1.4) (1.3) (1.0) (.9) (.4)
--------- --------- --------- --------- --------- ---------
Segment Income (Loss), before income taxes (5.9) (8.4) (10.0) (15.7) (11.4) (12.5)
Applicable Income Taxes (Benefit) (4.1) (7.0) (6.3) (12.1) (2.8) (4.6)
--------- --------- --------- --------- --------- ---------
Segment Income (Loss) $ (1.8) $ (1.4) $ (3.7) $ (3.6) $ (8.6) $ (7.9)
========= ========= ========= ========= ========= =========
(1) Effective for the second quarter of 2003, International includes our equity
investment in Aberdeen Asset Management, PLC for all periods presented.
25
THE PHOENIX COMPANIES, INC.
CONSOLIDATED STATEMENT OF INCOME - GAAP FORMAT (1)
Second Quarter 2003 (unaudited)
($ in millions)
YTD June December 31,
----------------------- -------------------------------------------------
2003 2002 2002 2001 2000 1999
---------- ---------- ---------- ---------- ----------- ----------
REVENUES
Premiums $ 494.6 $ 516.8 $ 1,082.0 $ 1,112.7 $ 1,147.4 $ 1,175.7
Insurance and Investment Product Fees 266.7 286.2 563.3 546.4 631.0 574.6
Net Investment Income 540.5 446.9 915.2 843.2 1,137.2 958.6
Net Realized Investment Gains (Losses) (116.9) (63.6) (107.6) (72.4) 89.2 75.8
---------- ---------- ---------- ---------- ---------- ----------
Total Revenues 1,184.9 1,186.3 2,452.9 2,429.9 3,004.8 2,784.7
---------- ---------- ---------- ---------- ---------- ----------
BENEFITS AND EXPENSES
Policy Benefits and Increase in Policy Liabilities 699.2 672.8 1,436.1 1,406.7 1,409.8 1,373.1
Policyholder Dividends 210.7 181.7 401.8 400.1 378.0 360.5
Policy Acquisition Cost Amortization 53.9 0.5 59.2 133.0 356.0 147.9
Intangible Asset Amortization 16.6 15.9 98.8 49.4 36.9 40.1
Interest Expense 19.7 15.4 31.4 27.3 32.7 34.0
Demutualization Expenses 1.5 1.8 25.9 21.8
Other Operating Expenses 263.0 315.1 583.9 628.1 604.5 557.9
---------- ---------- ---------- ---------- ---------- ----------
Total Expenses 1,263.1 1,202.9 2,613.0 2,670.5 2,839.7 2,513.5
---------- ---------- ---------- ---------- ---------- ----------
Income (Loss) from Continuing Operations
Before Income Taxes and Minority Interest (78.2) (16.6) (160.1) (240.6) 165.1 271.2
Applicable Income Taxes (Benefit) (37.0) (14.4) (56.8) (110.5) 56.2 99.0
---------- ---------- ---------- ---------- ---------- ----------
Income (Loss) from Continuing Operations before
Minority Interest (41.2) (2.2) (103.3) (130.1) 108.9 172.2
Minority Interest in Net Income of Subsidiaries (5.1) (6.1) (12.4) (7.2) (14.1) (10.1)
---------- ---------- ---------- ---------- ---------- ----------
Income (Loss) from Continuing Operations (46.3) (8.3) (115.7) (137.3) 94.8 162.1
Discontinued Operations
Income from Discontinued Operations 9.4 36.1
Loss on Disposal (20.9) (109.0)
---------- ---------- ---------- ---------- ---------- ----------
Income (Loss) Before Cumulative Effect of
Accounting Changes (46.3) (8.3) (115.7) (137.3) 83.3 89.2
Cumulative Effect of Accounting Changes:
Goodwill and Other Intangible Assets (130.3) (130.3)
Venture Capital Partnerships (48.8)
Securitized Financial Instruments (20.5)
Derivative Financial Instruments 3.9
---------- ---------- ---------- ---------- ---------- ----------
Net Income (Loss) $ (46.3) $ (138.6) $ (246.0) $ (202.7) $ 83.3 $ 89.2
========== ========== ========== ========== ========== ==========
(1) Certain reclassifications have been made to prior periods to conform with
the current presentation.
26
THE PHOENIX COMPANIES, INC.
CONSOLIDATED STATEMENT OF INCOME - GAAP FORMAT (1)
Second Quarter 2003 (unaudited)
($ in millions)
2002 2003
------------------------------------------------- -----------------------
Quarters ended March June September December March June
---------- ---------- ----------- ---------- ---------- ----------
REVENUES
Premiums $ 257.4 $ 259.4 $ 297.1 $ 268.1 $ 246.1 $ 248.5
Insurance and Investment Product Fees 140.3 145.9 139.4 137.7 132.9 133.8
Net Investment Income 231.2 215.7 228.8 239.5 276.7 263.8
Net Realized Investment Gains (Losses) (35.0) (28.6) (10.5) (33.5) (12.3) (104.6)
---------- ---------- ----------- ---------- ---------- ----------
Total Revenues 593.9 592.4 654.8 611.8 643.4 541.5
---------- ---------- ----------- ---------- ---------- ----------
BENEFITS AND EXPENSES
Policy Benefits and Increase in Policy Liabilities 333.9 338.9 397.9 365.4 350.8 348.4
Policyholder Dividends 74.2 107.5 112.7 107.4 116.5 94.2
Policy Acquisition Cost Amortization (10.9) 11.4 41.1 17.6 28.0 25.9
Intangible Asset Amortization 8.1 7.8 75.2 7.7 8.4 8.2
Interest Expense 7.7 7.7 7.7 8.3 9.8 9.9
Demutualization Expenses .9 .6 .2 .1
Other Operating Expenses 136.0 179.1 135.9 133.8 126.5 136.5
---------- ---------- ----------- ---------- ---------- ----------
Total Expenses 549.9 653.0 770.7 640.3 640.0 623.1
---------- ---------- ----------- ---------- ---------- ----------
Income (Loss) from Continuing Operations
Before Income Taxes and Minority Interest 44.0 (60.6) (115.9) (28.5) 3.4 (81.6)
Applicable Income Taxes (Benefit) 12.3 (26.7) (26.0) (16.7) (2.6) (34.4)
---------- ---------- ----------- ---------- ---------- ----------
Income (Loss) from Continuing Operations before
Minority Interest 31.7 (33.9) (89.9) (11.8) 6.0 (47.2)
Minority Interest in Net Income of Subsidiaries (2.8) (3.3) (3.1) (2.7) (2.8) (2.3)
---------- ---------- ----------- ---------- ---------- ----------
Income (Loss) Before Cumulative Effect of
Accounting Changes 28.9 (37.2) (93.0) (14.5) 3.2 (49.5)
Cumulative Effect of Accounting Changes:
Goodwill and Other Intangible Assets (130.3)
---------- ---------- ----------- ---------- ---------- ----------
Net Income (Loss) $ (101.4) $ (37.2) $ (93.0) $ (14.5) $ 3.2 $ (49.5)
========== ========== =========== ========== ========== ==========
(1) Certain reclassifications have been made to prior periods to conform with
the current presentation.
27
THE PHOENIX COMPANIES, INC.
CONSOLIDATING SECOND QUARTER 2003 INCOME STATEMENT
Second Quarter 2003 (unaudited)
($ in millions)
Exclusions from
Year-to-date June 30, 2003 Operating Segments Other Segments Segment Income
-------------------------- -------------------------- --------------------------
Realized
Life & Asset Venture Corporate & Investment
Consolidated Annuity Management Capital Other Losses Other
------------ ------------ ------------ ------------ ------------ ------------ ------------
REVENUES
Premiums $ 494.6 $ 494.6
Insurance and Investment
Product Fees 266.7 157.9 $ 112.0 $ 7.9 $ (11.1)
Net Investment Income 540.5 499.5 .3 $ 29.7 6.9 4.1
Net Realized Investment
Gains (Losses) (116.9) $ (116.5) (.4)
------------ ------------ ------------ ------------ ------------ ------------ ------------
Total Revenues 1,184.9 1,152.0 112.3 29.7 14.8 (116.5) (7.4)
------------ ------------ ------------ ------------ ------------ ------------ ------------
BENEFITS AND EXPENSES
Policy Benefits and Increase
in Policy Liabilities 699.2 693.5 5.7
Policyholder Dividends 210.7 211.7 (1.0)
Policy Acquisition Cost
Amortization 53.9 52.2 1.7
Intangible Asset Amortization 16.6 16.6
Intangible Asset Impairments
Interest Expense 19.7 19.7
Demutualization Expenses -
Other Operating Expenses 263.0 149.7 102.5 13.2 (2.4)
------------ ------------ ------------ ------------ ------------ ------------ ------------
Total Expenses 1,263.1 1,107.1 119.1 38.6 .7 (2.4)
------------ ------------ ------------ ------------ ------------ ------------ ------------
Income (Loss) from Continuing
Operations Before Income
Taxes and Minority Interest (78.2) 44.9 (6.8) 29.7 (23.8) (117.2) (5.0)
Applicable Income Taxes (Benefit) (37.0) 12.0 (4.4) 10.4 (7.4) (45.6) (2.0)
------------ ------------ ------------ ------------ ------------ ------------ ------------
Income (Loss) from Continuing
Operations before Minority
Interest (41.2) 32.9 (2.4) 19.3 (16.4) (71.6) (3.0)
Minority Interest in Net Income
of Subsidiaries (5.1) (.4) (4.7)
------------ ------------ ------------ ------------ ------------ ------------ ------------
Income (Loss) from Continuing
Operations $ (46.3) $ 32.5 $ (7.1) $ 19.3 $ (16.4) $ (71.6) $ (3.0)
============ ============ ============ ============ ============ ============ ============
28
THE PHOENIX COMPANIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEET -- PRELIMINARY
Second Quarter 2003 (unaudited)
($ in millions, except par value)
December 31,
June -----------------------------------------------------------
2003 2002 2001 2000 1999
----------- ------------- ------------- ------------ ------------
ASSETS:
Available-for-Sale Debt Securities,
at fair value $ 13,200.4 $ 11,894.1 $ 9,787.7 $ 6,022.3 $ 5,580.6
Held-to-Maturity Debt Securities 2,109.6 1,958.2
Equity Securities, at fair value 341.5 391.2 290.9 335.5 437.2
Mortgage Loans, at unpaid
principal balances 353.5 468.8 535.8 593.4 716.8
Policy Loans, at unpaid
principal balances 2,212.2 2,195.9 2,172.2 2,105.2 2,042.6
Venture Capital Partnerships,
at equity in net assets 237.1 228.6 291.7 467.3 338.1
Affiliate Equity and Debt Securities,
at cost plus equity in
undistributed earnings 39.6 134.7 150.6 103.7 106.6
Other Investments 425.1 398.9 376.0 313.6 280.0
------------- ------------- ------------- ------------ ------------
Total Investments 16,809.4 15,712.2 13,604.9 12,050.6 11,460.1
Cash and Cash Equivalents 654.3 1,058.5 815.5 720.0 316.7
Deferred Policy Acquisition Costs 1,248.0 1,234.1 1,123.7 1,019.0 1,318.8
Goodwill and Other Intangible Assets 758.8 762.0 858.6 582.6 577.9
Other General Account Assets 664.1 676.2 563.2 564.4 689.6
Separate Account Assets and
Investment Trust Assets 6,643.2 5,793.1 5,570.0 5,376.6 5,923.9
------------- ------------- ------------- ------------ ------------
Total Assets 26,777.8 25,236.1 22,535.9 20,313.2 20,287.0
============= ============= ============= ============ ============
LIABILITIES:
Policy Liabilities and Accruals 13,109.1 12,680.0 11,846.4 11,372.6 10,899.8
Policyholder Deposit Funds 3,679.0 3,395.7 1,515.2 678.4 538.2
Indebtedness 646.4 644.3 599.3 425.1 499.4
Delivery Obligations Under
Stock Purchase Contracts 123.9 137.6
Other General Account Liabilities 552.0 553.7 614.4 619.6 669.7
Separate Account Liabilities and
Investment Trust Liabilities 6,643.2 5,793.1 5,564.9 5,376.6 5,923.9
------------- ------------- ------------- ------------ ------------
Total Liabilities 24,753.6 23,204.4 20,140.2 18,472.3 18,531.0
------------- ------------- ------------- ------------ ------------
STOCKHOLDERS' EQUITY:
Common stock, $.01 par value,
1.0 billion shares authorized; 1.0 1.0 1.0
94,203,674 shares outstanding
(June 30, 2003)
Additional paid in capital 2,426.2 2,421.5 2,410.4
Deferred Compensation on Restricted
Stock Units (2.5)
Retained Earnings (354.6) (292.6) (30.8) 1,820.7 1,731.5
Treasury stock, at cost: 12,172,563
shares (June 30, 2003) (193.2) (195.7) (66.0)
Accumulated Other Comprehensive Income 147.3 97.5 81.1 20.2 24.5
------------- ------------- ------------- ------------ ------------
Total Stockholders' Equity 2,024.2 2,031.7 2,395.7 1,840.9 1,756.0
------------- ------------- ------------- ------------ ------------
Total Liabilities and Stockholders' Equity $ 26,777.8 $ 25,236.1 $ 22,535.9 $ 20,313.2 $ 20,287.0
============= ============= ============= ============ ============
29
THE PHOENIX COMPANIES, INC.
INVESTMENT PORTFOLIO SUMMARY
Second Quarter 2003 (unaudited)
($ in millions, except par value)
Total Debt Securities Public Debt Securities Private Debt Securities
----------------------------- ---------------------------- -------------------------
6/30/2003 12/31/2002 6/30/2003 12/31/2002 6/30/2003 12/31/2002
-------------- ------------- ------------- ------------- ------------ -----------
DEBT SECURITIES BY CREDIT QUALITY
(CARRYING VALUE)
AAA/AA/A $ 8,899.5 $ 7,976.1 $ 7,484.1 $ 6,565.0 $ 1,415.4 $ 1,411.1
BBB 3,173.0 2,849.0 2,003.0 1,767.1 1,170.0 1,081.9
-------------- ------------- ------------- ------------- ------------ -----------
Total Investment Grade 12,072.5 10,825.1 9,487.1 8,332.1 2,585.4 2,493.0
BB 835.2 785.7 679.3 577.4 155.9 208.3
B 136.7 105.4 91.4 82.2 45.3 23.2
CCC and Lower 120.4 118.5 86.3 53.3 34.1 65.2
In or Near Default 35.5 59.4 19.9 25.4 15.6 34.0
-------------- ------------- ------------- ------------- ------------ -----------
Total Debt Securities $ 13,200.3 $ 11,894.1 $ 10,364.0 $ 9,070.4 $ 2,836.3 $ 2,823.7
============== ============= ============= ============= ============ ===========
% Below Investment Grade 8.5% 9.0% 8.5% 8.1% 8.8% 11.7%
- ------------------------------------------------------------------------------------------------------------------------------------
UNREALIZED GAINS AND LOSSES ON
DEBT AND EQUITY SECURITIES
As of June 30, 2003 Total Outside Closed Block Closed Block
----------------------------- ---------------------------- -------------------------
Gains Losses Gains Losses Gains Losses
-------------- ------------- ------------- ------------- ------------ -----------
Total Debt Securities $ 1,028.4 $ (119.3) $ 345.7 $ (78.3) $ 682.7 $ (41.0)
Equity Securities 135.6 (3.6) 135.6 (3.6)
-------------- ------------- ------------- ------------- ------------ -----------
Total Unrealized Gains (Losses) 1,164.0 (122.9) 481.3 (81.9) 682.7 (41.0)
-------------- ------------- ------------- ------------- ------------ -----------
Applicable Policyholder Dividend
Obligation 682.7 (41.0) 682.7 (41.0)
Applicable Deferred Acquisition
Cost (Credit) 166.1 (26.8) 166.1 (26.8)
Applicable Deferred Income Tax 110.3 (19.3) 110.3 (19.3)
-------------- ------------- ------------- ------------- ------------ -----------
Total Offsets to Net Unrealized
Gains 959.1 (87.1) 276.4 (46.1) 682.7 (41.0)
-------------- ------------- ------------- ------------- ------------ -----------
Net Unrealized Gains $ 204.9 $ (35.8) $ 204.9 $ (35.8) $ - $ -
============== ============= ============= ============= ============ ===========
$ 169.1 $ 169.1 $ -
============== ============= ============
30
GAAP NET INVESTMENT INCOME YIELDS
Second Quarter 2003 (Unaudited)
($ in millions)
Quarters ended 2002 2003
----------------------------------------------------------- ----------------------------
March June September December March June
------------- ------------- ------------- ------------- ------------- -------------
GAAP NET INVESTMENT INCOME
Debt Securities $ 174.2 $ 185.2 $ 194.6 $ 180.8 $ 187.1 $ 199.1
Equity Securities 1.1 1.1 .9 1.1 1.3 .9
Mortgages 10.7 10.6 9.8 9.3 12.1 7.3
Policy Loans 42.5 42.3 42.7 44.3 42.6 42.6
Venture Capital (5.0) (29.9) (22.1) (2.3) 28.9 6.5
Cash & Cash Equivalents 1.9 2.9 3.0 4.1 3.1 1.4
Other * 8.2 6.7 5.1 3.0 4.5 8.6
------------- ------------- ------------- ------------- ------------- -------------
Total Cash and Invested Assets 233.6 218.9 234.0 240.3 279.6 266.4
------------- ------------- ------------- ------------- ------------- -------------
Investment Expenses 2.4 3.2 2.8 0.8 2.9 2.6
------------- ------------- ------------- ------------- ------------- -------------
Total Net Investment Income $ 231.2 $ 215.7 $ 231.2 $ 239.5 $ 276.7 $ 263.8
============= ============= ============= ============= ============= =============
ANNUALIZED YIELDS
Debt Securities 7.2% 7.3% 7.0% 6.2% 6.2% 6.1%
Equity Securities 1.5% 1.4% 1.2% 1.3% 1.4% 1.0%
Mortgages 8.4% 8.7% 8.3% 8.1% 9.1% 8.0%
Policy Loans 8.2% 8.1% 8.1% 8.4% 8.1% 8.0%
Venture Capital -6.6% -35.6% -30.4% -3.9% 67.9% 11.9%
Cash & Cash Equivalents 1.1% 1.9% 1.8% 1.9% 1.5% 0.9%
Other * 6.6% 5.5% 4.0% 2.3% 3.4% 7.0%
------------- ------------- ------------- ------------- ------------- -------------
Total Cash and Invested Assets 6.6% 6.1% 6.1% 6.0% 6.7% 6.2%
------------- ------------- ------------- ------------- ------------- -------------
Investment Expenses 0.1% 0.1% 0.1% 0.0% 0.1% 0.1%
------------- ------------- ------------- ------------- ------------- -------------
Total Net Investment Income 6.6% 6.0% 6.0% 5.9% 6.7% 6.1%
============= ============= ============= ============= ============= =============
* Includes real estate, affiliates, and other invested assets.
31
THE PHOENIX COMPANIES, INC.
REALIZED INVESTMENT GAINS AND LOSSES
Second Quarter 2003 (unaudited)
($ in millions, except par value)
2003 Quarter Ended December 31,
------------------------ 2003 --------------------------------------
June March YTD June 2002 2001 2000
----------- ----------- ----------- ------------ ----------- -----------
REALIZED INVESTMENT GAINS AND LOSSES
Debt Security Impairments $ (19.8) $ (25.6) $ (45.4) $ (122.9) $ (72.6) $ (7.5)
Equity Security Impairments (1.1) (1.1) (9.8)
Affiliated Equity Securities (96.9) (96.9)
Venture Capital Partnerships
Impairments (.3) (4.3) (4.6) (5.1)
Mortgage Loan Impairments (2.8) (.4) (3.2) (.6) (6.1) (1.8)
Real Estate Impairments (6.1)
Other Invested Asset Impairments (.9) (8.7) (9.6) (22.6) (3.7)
----------- ----------- ----------- ------------ ----------- -----------
Total Impairment Losses (121.8) (39.0) (160.8) (160.4) (82.4) (15.4)
----------- ----------- ----------- ------------ ----------- -----------
Debt Security Net Transaction
Gains (Losses) 5.2 41.3 46.5 48.4 21.7 (46.9)
Equity Security Net Transaction
Gains (Losses) 7.4 (2.2) 5.2 2.1 (8.8) 146.8
Venture Capital Net Investment
Gains (Losses) (.2) (9.5) (9.7)
Mortgage Loan Net Transaction
Gains (Losses) (.4) (.4) (.8) .2 7.1 4.8
Real Estate Net Transaction
Gains (Losses) (.4) .5 .1 4.0 (2.5) 1.8
Other Invested Asset Net
Transactions Gains (Losses) 5.6 (3.0) 2.6 (1.9) (7.5) (1.9)
----------- ----------- ----------- ------------ ----------- -----------
Total Net Transactions Gains 17.2 26.7 43.9 52.8 10.0 104.6
----------- ----------- ----------- ------------ ----------- -----------
Net Realized Investment
Gains (Losses) (104.6) (12.3) (116.9) (107.6) (72.4) 89.2
=========== =========== =========== ============ =========== ===========
Closed Block Applicable PDO
(Reduction) (9.5) 8.5 (1.0) (40.3) (15.4)
Applicable Deferred Acquisition
Costs (Credit) 1.3 .4 1.7 (7.2) 10.5 (10.7)
Applicable Deferred Income
Tax (Credit) (37.2) (8.8) (46.0) (20.8) (24.5) 32.9
----------- ----------- ----------- ------------ ----------- -----------
Net Realized Investment Gains
(Losses Included in Net Income) $ (59.2) $ (12.4) $ (71.6) $ (39.3) $ (43.0) $ 67.0
=========== =========== =========== ============ =========== ===========
32