EXHIBIT 99.1
------------
[LOGO OF PHOENIX]
PHOENIX
FINANCIAL SUPPLEMENT
The Phoenix Companies, Inc.
June 30, 2008
THE PHOENIX COMPANIES, INC.
FINANCIAL SUPPLEMENT
WALL STREET COVERAGE TRANSFER AGENT AND REGISTRAR
FIRM ANALYST For information or assistance regarding your account, please contact our
Citigroup Keith Walsh transfer agent and registrar:
Credit Suisse Securities (USA) Tom Gallagher The Phoenix Companies, Inc. C/O BNY Mellon Shareowner Services
Dowling & Partners Paul Goulekas P.O. Box 358015, Pittsburgh, PA 15258
JP Morgan Jimmy Bhullar Toll-free: 1-800-490-4258 Int'l: 201-680-6823
Keefe Bruyette & Woods, Inc. Jukka Lipponen TDD: 800-231-5469, Int'l TDD: 201-680-6610
Langen McAlenney Robert Glasspiegel E-mail: shrrelations@bnymellon.com
Lehman Brothers Eric Berg Web: www.bnymellon.com/shareowner/isd
Merrill Lynch Edward Spehar
Raymond James & Associates Steven Schwartz
UBS Andrew Kligerman
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 Phoenixwm.com or contact our Investor Relations Department at:
SHAREHOLDER INFORMATION
SECURITY LISTINGS The Phoenix Companies, Inc.
The common stock of The Phoenix Companies, Inc. is Investor Relations
traded on the New York Stock Exchange (NYSE) under the One American Row
symbol "PNX." Our 7.45 percent bond is traded on the P.O. Box 5056, Hartford, CT 06102-5056
NYSE under the symbol "PFX." Phone: 1-860-403-7100
Fax: 1-860-403-7880
e-mail: pnx.ir@phoenixwm.com
For more information on our products and services, call your Phoenix
representative or visit our Web site at Phoenixwm.com.
In managing our business, we analyze our performance on the basis of "operating
income" which does not equate to net income as determined in accordance with
GAAP. Rather, it is the measure of profit or loss used by our management to
evaluate performance, allocate resources and manage our operations. We believe
that operating income, and measures that are derived from or incorporate
operating income, are appropriate measures that are useful to investors as well,
because they identify the earnings of, and underlying profitability factors
affecting, the ongoing operations of our business. Operating income is
calculated by excluding realized investment gains (losses) and certain other
items because we do not consider them to be related to our operating
performance. The size and timing of realized investment gains (losses) are often
subject to our discretion. Certain other items are also excluded from operating
income if, in our opinion, they are not indicative of overall operating trends.
The criteria used to identify an item that will be excluded from operating
income include: whether the item is infrequent and is material to our income; or
whether it results from a change in regulatory requirements, or relates to other
unusual circumstances. Items excluded from operating income may vary from
period to period. Because these items are excluded based on our discretion,
inconsistencies in the application of our selection criteria may exist. Some of
these items may be significant components of net income in accordance with GAAP.
Accordingly, operating income, and other measures that are derived from or
incorporate operating income, are not substitutes for net income, or measures
that are derived from or incorporate net income, determined in accordance with
GAAP and may be different from similarly titled measures of other companies.
Within our Asset Management segment, we also consider earnings before interest,
taxes, depreciation and amortization ("EBITDA"). Our management believes EBITDA
provides additional perspective on the operating efficiency and profitability of
the Asset Management segment. EBITDA represents pre-tax operating income before
depreciation and amortization of goodwill and intangibles.
Total operating return on equity ("ROE") is an internal performance measure used
in the management of our operations, including our compensation plans and
planning processes. Our management believes that this measure provides investors
with a useful metric to assess our performance and the effectiveness of our use
of historic capital. ROE is calculated by dividing (i) total operating income,
by (ii) average equity, excluding accumulated OCI, FIN 46-R and discontinued
operations. Total operating return on tangible equity ("return on tangible
equity") is also an internal performance measure used in the evaluation of our
operations. Our management believes that this measure provides investors with a
useful metric to assess our performance and the effectiveness of our use of
current capital. Return on tangible equity is calculated by dividing (i) total
operating income, by (ii) average equity, excluding accumulated OCI, FIN 46-R,
discontinued operations and the carrying value of goodwill and intangible
assets.
THE PHOENIX COMPANIES, INC.
FINANCIAL SUPPLEMENT
JUNE 2008 (UNAUDITED)
TABLE OF CONTENTS
-----------------
FINANCIAL HIGHLIGHTS.....................................................................1
FINANCIAL HIGHLIGHTS.....................................................................2
LIFE AND ANNUITY EARNINGS SUMMARY........................................................4
VARIABLE UNIVERSAL LIFE................................................................6
UNIVERSAL LIFE / INTEREST SENSITIVE....................................................8
LIFE AND PRIVATE PLACEMENT SALES......................................................10
ANNUITIES.............................................................................12
SUPPLEMENTARY LIFE AND ANNUITY INFORMATION..............................................14
ASSET MANAGEMENT........................................................................16
ASSET MANAGEMENT NET FLOWS AND ASSETS UNDER MANAGEMENT..................................18
VENTURE CAPITAL SEGMENT.................................................................20
CORPORATE AND OTHER.....................................................................21
CONSOLIDATED STATEMENT OF INCOME - GAAP FORMAT..........................................23
CONSOLIDATING SECOND QUARTER 2008 INCOME STATEMENT......................................25
CONDENSED CONSOLIDATED BALANCE SHEET -- PRELIMINARY.....................................26
GENERAL ACCOUNT INVESTMENT PORTFOLIO SUMMARY............................................27
GENERAL ACCOUNT GAAP NET INVESTMENT INCOME YIELDS.......................................28
GENERAL ACCOUNT REALIZED INVESTMENT GAINS AND LOSSES....................................30
EFFECT OF CHANGE IN ACCOUNTING..........................................................32
THE PHOENIX COMPANIES, INC.
FINANCIAL HIGHLIGHTS
Second Quarter 2008 (unaudited)
(amount in millions, except per share data)
December 31,
YTD June -------------------------------------------------------------
For the Period Ended: 2008 2007 2006 2005 2004
------------- ------------- ------------- ------------- -------------
BALANCE SHEET INFORMATION
General Account Invested Assets $ 15,168.2 $ 15,814.5 $ 16,107.8 $ 16,717.2 $ 17,334.6
Separate Account Assets 10,576.6 10,820.3 9,458.6 7,722.2 6,950.3
Total Assets 29,634.8 30,221.4 29,012.6 27,712.3 28,359.3
Indebtedness 474.0 627.7 685.4 751.9 690.8
Total Stockholders' Equity 2,177.1 2,279.0 2,231.5 2,007.1 2,022.4
Total Stockholders' Equity,
excluding SFAS 115, other
accumulated OCI and FIN 46-R $ 2,444.4 $ 2,470.0 $ 2,360.0 $ 2,118.9 $ 2,018.5
Average Equity, excluding other
accumulated OCI, FIN 46-R and
Discontinued Operations (1) $ 2,450.1 $ 2,399.9 $ 2,239.4 $ 2,017.1
Total Operating Return on Equity(1) 1.47% 5.38% 3.68% 4.99%
Average Tangible Common Equity(2) $ 1,621.0 $ 1,703.1 $ 1,516.8 $ 1,280.4
Total Operating Return on
Average Tangible Equity(2) 2.21% 7.94% 5.74% 7.86%
Debt to Total Capitalization(4) 16.2% 20.3% 22.5% 26.2% 25.5%
Book Value Per Share $ 19.03 $ 19.94 $ 19.63 $ 21.10 $ 21.32
Book Value Per Share, excluding
SFAS 115 and other accumulated OCI $ 20.92 $ 21.15 $ 20.29 $ 21.72 $ 20.70
Book Value Per Share, excluding
SFAS 115, other accumulated
OCI and FIN 46-R $ 21.37 $ 21.61 $ 20.76 $ 22.28 $ 21.27
Period-end Common Shares Outstanding 114.4 114.3 113.7 95.1 94.9
============= ============= ============= ============= =============
=================================================================================================================================
INDEBTEDNESS:
Surplus Notes $ 174.0 $ 174.0 $ 174.0 $ 204.2 $ 204.1
Senior Unsecured Bonds - due 2008 153.7 153.7 153.7 153.7
Senior Unsecured Bonds - due 2032 300.0 300.0 300.0 300.0 300.0
Interest Rate Swap 0.5 2.0 8.0
Bank Credit Facility 25.0 25.0
Other 57.2 67.0
------------- ------------- ------------- ------------- -------------
Total Indebtedness $ 474.0 $ 627.7 $ 685.4 $ 751.9 $ 690.8
============= ============= ============= ============= =============
=================================================================================================================================
STATUTORY FINANCIAL DATA FOR
PHOENIX LIFE INSURANCE COMPANY(3)
Capital, Surplus and Surplus Notes $ 789.4 $ 848.1 $ 932.4 $ 885.5 $ 814.6
Asset Valuation Reserve (AVR) 144.1 192.6 187.9 210.8 213.6
------------- ------------- ------------- ------------- -------------
Capital, Surplus, Surplus Notes and AVR $ 933.5 $ 1,040.7 $ 1,120.3 $ 1,096.3 $ 1,028.2
============= ============= ============= ============= =============
Policyholder Dividend Liability $ 366.0 $ 355.6 $ 348.9 $ 356.1 $ 403.3
Interest Maintenance Reserve $ (43.6) $ (44.4) $ (44.3) $ (23.1) $ (31.3)
Statutory Gain From Operations $ 32.8 $ 115.2 $ 131.6 $ 106.2 $ 35.1
Statutory Net Income (Loss) $ (18.9) $ 80.0 $ 162.0 $ 61.0 $ 47.1
=============
(1) This average equity is used for the calculation of total operating
return on equity and represents the average of the monthly average of
equity, excluding other accumulated OCI, the effects of FIN 46-R and the
equity of discontinued operations.
(2) This average equity is used for the calculation of total operating
return on tangible equity and represents the average of the monthly average
of equity, excluding other accumulated OCI, the effects of FIN 46-R, the
equity of discontinued operations and the carrying value of goodwill and
intangible assets.
(3) Phoenix Life Insurance Company is required to file financial statements
with state regulatory authorities prepared on an accounting basis
prescribed or permitted by the Insurance Department of the State of New
York. June 2008 amounts are preliminary.
(4) This debt to total capitalization is based on total stockholders'
equity, excluding SFAS 115, other accumulated OCI and FIN 46-R.
1
THE PHOENIX COMPANIES, INC.
FINANCIAL HIGHLIGHTS
Second Quarter 2008 (unaudited)
(amount in millions, except per share data)
YTD June December 31,
---------------------------- ----------------------------------------------------------
2008 2007 2007 2006 2005 2004
------------- ------------- ------------- ------------- ------------- -------------
INCOME STATEMENT SUMMARY
OPERATING INCOME
Life Insurance (1)(2) $ 81.8 $ 95.0 $ 185.6 $ 202.6 $ 180.5 $ 130.1
Annuities (2) (3.0) 12.1 20.5 4.0 12.0 12.7
------------- ------------- ------------- ------------- ------------- -------------
Life and Annuity Segment 78.8 107.1 206.1 206.6 192.5 142.8
Asset Management Segment (17.3) 2.9 7.4 (28.6) (10.5) 0.1
Venture Capital Segment 14.8 19.3
Corporate and Other (41.7) (25.4) (47.6) (62.0) (71.3) (60.8)
------------- ------------- ------------- ------------- ------------- -------------
TOTAL OPERATING INCOME, BEFORE
INCOME TAXES 19.8 84.6 165.9 116.0 125.5 101.4
Applicable Income Taxes 5.1 17.5 36.9 33.5 24.9 22.5
------------- ------------- ------------- ------------- ------------- -------------
TOTAL OPERATING INCOME 14.7 67.1 129.0 82.5 100.6 78.9
Net Realized Investment Gains (Losses) (24.3) 11.2 (8.9) 21.8 25.5 11.8
Realized Gains (Losses) -
Investments Pledged as Collateral
Consolidated Under FIN 46-R 1.4 0.1 1.0 (1.0) 1.3 (12.9)
Realized and Unrealized Gains (Losses)
on Equity Investment in Aberdeen (7.0) 55.9
Share of Aberdeen's Extraordinary Charge
for FSA Settlement (14.7)
Surplus Notes Tender Costs (6.4)
Management Restructuring and Early
Retirement Costs (9.1) (12.5) (21.9)
------------- ------------- ------------- ------------- ------------- -------------
INCOME (LOSS) FROM CONTINUING OPERATIONS (8.2) 78.4 121.1 94.2 107.9 90.7
Income (Loss) from Discontinued
Operations 1.2 (3.5) 1.1 0.5 (4.3)
------------- ------------- ------------- ------------- ------------- -------------
NET INCOME (LOSS) $ (8.2) $ 79.6 $ 117.6 $ 95.3 $ 108.4 $ 86.4
============= ============= ============= ============= ============= =============
===================================================================================================================================
EARNINGS PER SHARE
BASIC
Weighted-Average Shares Outstanding 114.4 114.0 114.1 110.9 95.0 94.7
------------- ------------- ------------- ------------- ------------- -------------
Total Operating Income Per Share $ 0.13 $ 0.59 $ 1.13 $ 0.74 $ 1.06 $ 0.83
Net Income (Loss) Per Share $ (0.07) $ 0.70 $ 1.03 $ 0.86 $ 1.14 $ 0.91
DILUTED
Weighted-Average Shares Outstanding and
Dilutive Potential Common Shares (3) 114.4 115.7 116.0 113.2 102.4 100.8
------------- ------------- ------------- ------------- ------------- -------------
Total Operating Income Per Share $ 0.13 $ 0.58 $ 1.11 $ 0.73 $ 0.98 $ 0.78
Net Income (Loss) Per Share $ (0.07) $ 0.69 $ 1.01 $ 0.84 $ 1.06 $ 0.86
=============
(1) Effective April 1, 2008 Phoenix adopted a preferable method of accounting
for long-duration reinsurance contracts. The new method better reflects the
economics of the underlying reinsurance activity by better matching the
reinsurance recovery with the insured loss that gave rise to that recovery.
Comparable amounts have been adjusted to apply this new method,
retrospectively. See page 32 of this document for more details on this
change.
(2) Effective the second quarter of 2008 the Alternative Retirement Solutions
line of business was reclassified from annuities to other life. Comparable
amounts have been adjusted for all periods presented.
(3) For the six months ended June 30, 2008, the weighted average common shares
outstanding and dilutive potential common shares were 116.2 million, which
were used to calculate operating income per share. For the calculation of
net loss per share, dilutive potential shares were not included because
their effect would have been anti-dilutive.
2
THE PHOENIX COMPANIES, INC.
INCOME STATEMENT
Second Quarter 2008 (unaudited)
(amount in millions, except per share data)
Quarters Ended 2007 2008
------------------------------------------------------ --------------------------
March June September December March June
------------ ------------ ------------ ------------ ------------ ------------
OPERATING INCOME
Life Insurance (1) (2) $ 53.0 $ 42.0 $ 43.3 $ 47.3 $ 37.4 $ 44.4
Annuities 6.9 5.2 5.3 3.1 (4.1) 1.1
------------ ------------ ------------ ------------ ------------ ------------
Life and Annuity Segment 59.9 47.2 48.6 50.4 33.3 45.5
Asset Management Segment 0.6 2.3 2.6 1.9 (13.3) (4.0)
Corporate and Other (9.2) (16.2) (11.4) (10.8) (20.6) (21.1)
------------ ------------ ------------ ------------ ------------ ------------
TOTAL OPERATING INCOME, BEFORE INCOME TAXES 51.3 33.3 39.8 41.5 (0.6) 20.4
Applicable Income Taxes (Benefit) 15.8 1.7 6.3 13.1 (0.5) 5.6
------------ ------------ ------------ ------------ ------------ ------------
TOTAL OPERATING INCOME (LOSS) 35.5 31.6 33.5 28.4 (0.1) 14.8
Net Realized Investment Gains (Losses) 12.2 (1.0) 0.8 (20.9) (15.1) (9.2)
Realized Gains (Losses) - Investments Pledged
as Collateral Consolidated Under FIN 46-R 0.2 (0.1) 0.5 0.4 0.8 0.6
------------ ------------ ------------ ------------ ------------ ------------
INCOME (LOSS) FROM CONTINUING OPERATIONS 47.9 30.5 34.8 7.9 (14.4) 6.2
Gain (Loss) from Discontinued Operations 0.8 0.4 (4.7)
------------ ------------ ------------ ------------ ------------ ------------
NET INCOME (LOSS) $ 48.7 $ 30.9 $ 34.8 $ 3.2 $ (14.4) $ 6.2
============ ============ ============ ============ ============ ============
==================================================================================================================================
EARNINGS PER SHARE
BASIC
Weighted-Average Shares Outstanding 113.8 114.1 114.2 114.2 114.3 114.4
------------ ------------ ------------ ------------ ------------ ------------
Total Operating Income Per Share $ 0.31 $ 0.28 $ 0.29 $ 0.25 $ (0.00) $ 0.13
Net Income (Loss) Per Share $ 0.43 $ 0.27 $ 0.31 $ 0.03 $ (0.13) $ 0.05
DILUTED
Weighted-Average Shares Outstanding and
Dilutive Potential Common Shares 115.1 115.6 115.8 115.8 114.3 116.1
------------ ------------ ------------ ------------ ------------ ------------
Total Operating Income Per Share $ 0.30 $ 0.27 $ 0.29 $ 0.24 $ (0.00) $ 0.13
Net Income (Loss) Per Share $ 0.42 $ 0.27 $ 0.30 $ 0.03 $ (0.13) $ 0.05
============
(1) Effective April 1, 2008 Phoenix adopted a preferable method of accounting
for long-duration reinsurance contracts. The new method better reflects the
economics of the underlying reinsurance activity by better matching the
reinsurance recovery with the insured loss that gave rise to that recovery.
Comparable amounts have been adjusted to apply this new method,
retrospectively. See page 32 of this document for more details on this
change.
(2) Effective the second quarter of 2008 the Alternative Retirement Solutions
line of business was reclassified from annuities to other life. Comparable
amounts have been adjusted for all periods presented.
3
THE PHOENIX COMPANIES, INC.
LIFE AND ANNUITY EARNINGS SUMMARY
Second Quarter 2008 (unaudited)
($ in millions)
YTD June December 31,
---------------------------- ----------------------------------------------------------
2008 2007 2007 2006 2005 2004
------------- ------------- ------------- ------------- ------------- -------------
OPERATING INCOME (3)
Variable Universal Life $ 16.4 $ 19.7 $ 42.0 $ 54.6 $ 69.6 $ 35.7
Universal Life (1) 22.3 28.8 49.0 44.4 47.9 34.4
Other Life and Annuity (2) (4) (3.6) 0.9 (0.2) 2.6 1.5 1.6
------------- ------------- ------------- ------------- ------------- -------------
TOTAL CORE LIFE INSURANCE 35.1 49.4 90.8 101.6 119.0 71.7
------------- ------------- ------------- ------------- ------------- -------------
Traditional Life, excluding Closed Block 15.1 12.1 27.8 31.2 (11.7) (18.3)
Traditional Life, Closed Block 31.6 33.5 67.0 69.8 73.2 76.7
------------- ------------- ------------- ------------- ------------- -------------
TOTAL TRADITIONAL LIFE 46.7 45.6 94.8 101.0 61.5 58.4
------------- ------------- ------------- ------------- ------------- -------------
TOTAL, LIFE INSURANCE 81.8 95.0 185.6 202.6 180.5 130.1
Annuities (4) (3.0) 12.1 20.5 4.0 12.0 12.7
------------- ------------- ------------- ------------- ------------- -------------
OPERATING INCOME, BEFORE INCOME TAXES 78.8 107.1 206.1 206.6 192.5 142.8
Allocated Income Taxes 27.5 34.0 63.1 65.4 51.3 36.4
------------- ------------- ------------- ------------- ------------- -------------
OPERATING INCOME 51.3 73.1 143.0 141.2 141.2 106.4
Net Realized Investment Gains (Losses) (13.5) 1.0 (1.6) (1.0) 22.7 (2.5)
Management Restructuring and Early
Retirement Costs (0.1) (7.3)
------------- ------------- ------------- ------------- ------------- -------------
NET INCOME $ 37.8 $ 74.1 $ 141.4 $ 140.2 $ 163.8 $ 96.6
============= ============= ============= ============= ============= =============
(1) Universal Life includes interest sensitive whole life contracts.
(2) Other Life and Annuity includes WS Griffith prior to 2005.
(3) Effective April 1, 2008 Phoenix adopted a preferable method of accounting
for long-duration reinsurance contracts. The new method better reflects the
economics of the underlying reinsurance activity by better matching the
reinsurance recovery with the insured loss that gave rise to that recovery.
Comparable amounts have been adjusted to apply this new method,
retrospectively. See page 32 of this document for more details on this
change.
(4) Effective the second quarter of 2008 the Alternative Retirement Solutions
line of business was reclassified from annuities to other life. Comparable
amounts have been adjusted for all periods presented.
4
THE PHOENIX COMPANIES, INC.
LIFE AND ANNUITY EARNINGS SUMMARY
Second Quarter 2008 (unaudited)
($ in millions)
Quarters ended 2007 2008
---------------------------------------------------------- --------------------------
March June September December March June
------------- ------------- ------------- ------------- ------------- -----------
OPERATING INCOME (2)
Variable Universal Life $ 8.9 $ 10.8 $ 11.8 $ 10.5 $ 7.1 $ 9.3
Universal Life (1) 14.5 14.3 9.4 10.8 9.2 13.1
Other Life and Annuity (3) 0.3 0.6 (0.2) (0.8) (1.7) (1.9)
------------ ------------ ------------ ------------ ------------ ----------
TOTAL CORE LIFE INSURANCE 23.7 25.7 21.0 20.5 14.6 20.5
------------ ------------ ------------ ------------ ------------ ----------
Traditional Life, excluding Closed Block 12.6 (0.5) 5.6 10.0 7.1 8.0
Traditional Life, Closed Block 16.7 16.8 16.7 16.8 15.7 15.9
------------ ------------ ------------ ------------ ------------ ----------
TOTAL TRADITIONAL LIFE 29.3 16.3 22.3 26.8 22.8 23.9
------------ ------------ ------------ ------------ ------------ ----------
TOTAL, LIFE INSURANCE 53.0 42.0 43.3 47.3 37.4 44.4
Annuities (3) 6.9 5.2 5.3 3.1 (4.1) 1.1
------------ ------------ ------------ ------------ ------------ ----------
OPERATING INCOME, BEFORE INCOME TAXES 59.9 47.2 48.6 50.4 33.3 45.5
Allocated Income Taxes 18.5 15.5 11.3 17.8 12.1 15.3
------------ ------------ ------------ ------------ ------------ ----------
OPERATING INCOME 41.4 31.7 37.3 32.6 21.2 30.2
Net Realized Investment Gains (Losses) 0.5 0.5 2.5 (5.1) (12.6) (0.9)
------------ ------------ ------------ ------------ ------------ ----------
NET INCOME $ 41.8 $ 32.3 $ 39.9 $ 27.5 $ 8.4 $ 29.3
============ ============ ============ ============ ============ ==========
(1) Universal Life includes interest sensitive whole life contracts.
(2) Effective April 1, 2008 Phoenix adopted a preferable method of accounting
for long-duration reinsurance contracts. The new method better reflects the
economics of the underlying reinsurance activity by better matching the
reinsurance recovery with the insured loss that gave rise to that recovery.
Comparable amounts have been adjusted to apply this new method,
retrospectively. See page 32 of this document for more details on this
change.
(3) Effective the second quarter of 2008 the Alternative Retirement Solutions
line of business was reclassified from annuities to other life. Comparable
amounts have been adjusted for all periods presented.
5
THE PHOENIX COMPANIES, INC.
VARIABLE UNIVERSAL LIFE
Second Quarter 2008 (unaudited)
($ in millions)
YTD June December 31,
------------------------ ---------------------------------------------------
2008 2007 2007 2006 2005 2004
---------- ---------- ---------- ---------- ---------- ----------
PRE-TAX INCOME (2)
Fees $ 17.5 $ 16.1 $ 32.4 $ 26.6 $ 32.5 $ 29.6
Cost of Insurance (COI) 42.9 40.4 81.9 77.8 76.7 74.6
Interest Earned 5.1 4.8 9.9 9.2 6.3 5.9
Surrender Charges 3.0 3.5 6.6 6.7 7.1 6.9
--------- --------- --------- --------- --------- ---------
TOTAL REVENUES 68.5 64.8 130.8 120.3 122.6 117.0
--------- --------- --------- --------- --------- ---------
Net Death and Disability Benefits 19.1 14.6 28.9 36.0 28.5 30.5
Interest Credited 3.3 2.8 5.8 4.8 4.6 3.7
DAC Amortized 17.0 14.3 28.8 1.3 (4.4) 22.2
Operating Expenses 12.7 13.4 25.3 23.6 24.3 24.9
--------- --------- --------- --------- --------- ---------
TOTAL EXPENSES 52.1 45.1 88.8 65.7 53.0 81.3
--------- --------- --------- --------- --------- ---------
OPERATING INCOME BEFORE TAX $ 16.4 $ 19.7 $ 42.0 $ 54.6 $ 69.6 $ 35.7
========= ========= ========= ========= ========= =========
==================================================================================================================================
OPERATING EXPENSES
Commissions and Concessions $ 8.0 $ 7.8 $ 15.8 $ 13.5 $ 13.6 $ 16.3
Controllable Expenses and Other 16.4 17.8 34.2 29.7 26.8 34.0
--------- --------- --------- --------- --------- ---------
TOTAL CURRENT EXPENSES 24.4 25.6 50.0 43.2 40.4 50.3
Deferred Acquisition Costs (11.7) (12.2) (24.7) (19.6) (16.1) (25.4)
--------- --------- --------- --------- --------- ---------
OPERATING EXPENSES $ 12.7 $ 13.4 $ 25.3 $ 23.6 $ 24.3 $ 24.9
========= ========= ========= ========= ========= =========
- ----------------------------------------------------------------------------------------------------------------------------------
FUNDS UNDER MANAGEMENT (FUM)
Deposits, excluding Private Placement $ 72.8 $ 74.9 $ 153.8 $ 149.0 $ 171.4 $ 185.4
Surrenders, excluding Private Placement (59.0) (50.2) (102.1) (85.9) (84.4) (60.6)
--------- --------- --------- --------- --------- ---------
Net Sales, excluding Private Placement 13.8 24.7 51.7 63.1 87.0 124.8
Private Placement, Net Sales 45.7 19.6 50.4 1.0 36.7 45.3
--------- --------- --------- --------- --------- ---------
TOTAL NET SALES 59.5 44.3 102.1 64.1 123.7 170.1
Deaths (2.4) (9.9) (19.6) (4.7) (3.6) (2.2)
Interest Credited (105.6) 170.8 195.3 259.9 141.5 170.0
Acquisitions (Dispositions) 218.8
Fees (18.0) (16.5) (33.5) (30.4) (30.3) (31.0)
Cost of Insurance (41.9) (39.4) (79.9) (75.8) (74.6) (72.4)
--------- --------- --------- --------- --------- ---------
Change in FUM (108.4) 149.3 383.2 213.1 156.7 234.5
Beginning Balance 2,696.1 2,312.9 2,312.9 2,099.8 1,943.1 1,708.6
--------- --------- --------- --------- --------- ---------
ENDING FUND BALANCE $ 2,587.7 $ 2,462.2 $ 2,696.1 $ 2,312.9 $ 2,099.8 $ 1,943.1
========= ========= ========= ========= ========= =========
Gross Life Insurance In Force (1) $24,845.0 $24,171.0 $24,714.2 $24,164.6 $24,767.7 $25,382.0
========= ========= ========= ========= ========= =========
(1) 2006, 2005 and 2004 face amounts updated to include the term rider face
amounts for all variable universal life products.
(2) Effective April 1, 2008 Phoenix adopted a preferable method of
accounting for long-duration reinsurance contracts. The new method better
reflects the economics of the underlying reinsurance activity by better
matching the reinsurance recovery with the insured loss that gave rise to
that recovery. Comparable amounts have been adjusted to apply this new
method, retrospectively. See page 32 of this document for more details on
this change.
6
THE PHOENIX COMPANIES, INC.
VARIABLE UNIVERSAL LIFE
Second Quarter 2008 (unaudited)
($ in millions)
Quarters ended 2007 2008
---------------------------------------------------------- --------------------------
March June September December March June
------------- ------------- ------------- ------------- ------------- -----------
PRE-TAX INCOME (2)
Fees $ 8.0 $ 8.1 $ 7.8 $ 8.5 $ 8.3 $ 9.2
Cost of Insurance (COI) 20.3 20.1 20.2 21.3 21.3 21.6
Interest Earned 2.4 2.4 2.6 2.5 2.4 2.7
Surrender Charges 2.1 1.4 1.9 1.2 1.6 1.4
------------ ------------ ------------ ------------ ------------ ----------
TOTAL REVENUES 32.8 32.0 32.5 33.5 33.6 34.9
------------ ------------ ------------ ------------ ------------ ----------
Net Death and Disability Benefits 8.6 6.0 6.7 7.6 11.6 7.5
Interest Credited 1.4 1.4 1.4 1.6 1.6 1.7
DAC Amortized 7.6 6.7 7.4 7.1 6.8 10.2
Operating Expenses 6.3 7.1 5.2 6.7 6.5 6.2
------------ ------------ ------------ ------------ ------------ ----------
TOTAL EXPENSES 23.9 21.2 20.7 23.0 26.5 25.6
------------ ------------ ------------ ------------ ------------ ----------
OPERATING INCOME BEFORE TAX $ 8.9 $ 10.8 $ 11.8 $ 10.5 $ 7.1 $ 9.3
============ ============ ============ ============ ============ ==========
==================================================================================================================================
OPERATING EXPENSES
Commissions and Concessions $ 4.3 $ 3.5 $ 3.3 $ 4.7 $ 4.4 $ 3.6
Controllable Expenses and Other 9.3 8.5 6.6 9.8 8.0 8.4
------------ ------------ ------------ ------------ ------------ ----------
TOTAL CURRENT EXPENSES 13.6 12.0 9.9 14.5 12.4 12.0
Deferred Acquisition Costs (7.3) (4.9) (4.7) (7.8) (5.9) (5.8)
------------ ------------ ------------ ------------ ------------ ----------
OPERATING EXPENSES $ 6.3 $ 7.1 $ 5.2 $ 6.7 $ 6.5 $ 6.2
============ ============ ============ ============ ============ ==========
- ----------------------------------------------------------------------------------------------------------------------------------
FUNDS UNDER MANAGEMENT (FUM)
Deposits, excluding Private Placement $ 40.2 $ 34.7 $ 32.7 $ 46.2 $ 38.1 $ 34.7
Surrenders, excluding Private Placement (24.1) (26.1) (28.5) (23.4) (24.2) (34.8)
------------ ------------ ------------ ------------ ------------ ----------
Net Sales, excluding Private Placement 16.1 8.6 4.2 22.8 13.9 (0.1)
Private Placement, Net Sales 8.8 10.8 6.4 24.4 3.8 41.9
------------ ------------ ------------ ------------ ------------ ----------
TOTAL NET SALES 24.9 19.4 10.6 47.2 17.7 41.8
Deaths (3.3) (6.6) (8.3) (1.4) (1.0) (1.4)
Interest Credited 58.1 112.7 25.9 (1.4) (116.9) 11.3
Acquisitions (Dispositions) 218.8
Fees (8.1) (8.4) (7.1) (9.9) (8.8) (9.2)
Cost of Insurance (19.8) (19.6) (19.3) (21.2) (20.8) (21.1)
------------ ------------ ------------ ------------ ------------ ----------
Change in FUM 51.8 97.5 1.8 232.1 (129.8) 21.4
Beginning Balance 2,312.9 2,364.7 2,462.2 2,464.0 2,696.1 2,566.3
------------ ------------ ------------ ------------ ------------ ----------
ENDING FUND BALANCE $ 2,364.7 $ 2,462.2 $ 2,464.0 $ 2,696.1 $ 2,566.3 $ 2,587.7
============ ============ ============ ============ ============ ==========
Gross Life Insurance In Force (1) $ 24,320.5 $ 24,171.0 $ 24,138.8 $ 24,714.2 $ 24,796.6 $ 24,845.0
============ ============ ============ ============ ============ ==========
(1) 2007 face amounts updated to include the term rider face amounts for all
variable universal life products.
(2) Effective April 1, 2008 Phoenix adopted a preferable method of
accounting for long-duration reinsurance contracts. The new method better
reflects the economics of the underlying reinsurance activity by better
matching the reinsurance recovery with the insured loss that gave rise to
that recovery. Comparable amounts have been adjusted to apply this new
method, retrospectively. See page 32 of this document for more details on
this change.
7
THE PHOENIX COMPANIES, INC.
UNIVERSAL LIFE / INTEREST SENSITIVE
Second Quarter 2008 (unaudited)
($ in millions)
YTD June December 31,
----------------------------- -------------------------------------------------------------
2008 2007 2007 2006 2005 2004
------------- ------------- ------------- ------------- ------------- -------------
PRE-TAX INCOME (1)
Fees $ 21.9 $ 13.8 $ 36.2 $ 27.8 $ 17.9 $ 19.1
Cost of Insurance (COI) 166.5 115.6 258.9 184.9 109.9 90.7
Interest Earned 60.3 60.7 123.9 116.5 108.7 100.4
Surrender Charges 2.5 1.5 3.5 3.7 3.2 3.2
------------- ------------- ------------- ------------- ------------- -------------
TOTAL REVENUES 251.2 191.6 422.5 332.9 239.7 213.4
------------- ------------- ------------- ------------- ------------- -------------
Net Death and Disability Benefits 83.9 55.2 138.7 103.5 61.8 58.4
Interest Credited 48.1 42.0 86.4 79.6 74.5 74.6
DAC Amortized 56.5 38.5 87.0 59.6 17.9 20.3
Operating Expenses 40.4 27.1 61.4 45.8 37.6 25.7
------------- ------------- ------------- ------------- ------------- -------------
TOTAL EXPENSES 228.9 162.8 373.5 288.5 191.8 179.0
------------- ------------- ------------- ------------- ------------- -------------
OPERATING INCOME BEFORE TAX $ 22.3 $ 28.8 $ 49.0 $ 44.4 $ 47.9 $ 34.4
============= ============= ============= ============= ============= =============
=================================================================================================================================
OPERATING EXPENSES
Commissions and Concessions $ 116.2 $ 50.1 $ 157.9 $ 104.9 $ 51.1 $ 24.9
Controllable Expenses and Other 119.3 87.0 257.4 176.1 96.5 64.3
------------- ------------- ------------- ------------- ------------- -------------
TOTAL CURRENT EXPENSES 235.5 137.1 415.3 281.0 147.6 89.2
Deferred Acquisition Costs (195.1) (110.0) (353.9) (235.2) (110.0) (63.5)
------------- ------------- ------------- ------------- ------------- -------------
OPERATING EXPENSES $ 40.4 $ 27.1 $ 61.4 $ 45.8 $ 37.6 $ 25.7
============= ============= ============= ============= ============= =============
- ---------------------------------------------------------------------------------------------------------------------------------
FUNDS UNDER MANAGEMENT (FUM)
Deposits $ 328.8 $ 192.5 $ 540.9 $ 417.1 $ 297.8 $ 229.4
Surrenders (43.6) (41.2) (77.0) (84.7) (94.1) (126.2)
------------- ------------- ------------- ------------- ------------- -------------
NET SALES 285.2 151.3 463.9 332.4 203.7 103.2
Deaths (17.3) (12.5) (22.9) (20.5) (22.3) (16.9)
Interest Credited 48.1 42.0 86.3 79.6 78.7 74.6
Fees (29.8) (17.1) (48.6) (36.6) (26.8) (23.5)
Cost of Insurance (166.5) (115.6) (258.9) (184.9) (109.9) (90.7)
------------- ------------- ------------- ------------- ------------- -------------
Change in FUM 119.7 48.1 219.8 170.0 123.4 46.7
Beginning Balance 2,123.9 1,904.1 1,904.1 1,734.1 1,610.7 1,564.0
------------- ------------- ------------- ------------- ------------- -------------
ENDING FUND BALANCE $ 2,243.6 $ 1,952.2 $ 2,123.9 $ 1,904.1 $ 1,734.1 $ 1,610.7
============= ============= ============= ============= ============= =============
Gross Life Insurance In Force $ 31,298.0 $ 22,575.0 $ 27,358.2 $ 20,402.1 $ 16,303.0 $ 14,103.7
============= ============= ============= ============= ============= =============
(1) Effective April 1, 2008 Phoenix adopted a preferable method of accounting
for long-duration reinsurance contracts. The new method better reflects the
economics of the underlying reinsurance activity by better matching the
reinsurance recovery with the insured loss that gave rise to that recovery.
Comparable amounts have been adjusted to apply this new method,
retrospectively. See page 32 of this document for more details on this
change.
8
THE PHOENIX COMPANIES, INC.
UNIVERSAL LIFE / INTEREST SENSITIVE
Second Quarter 2008 (unaudited)
($ in millions)
Quarters ended 2007 2008
------------------------------------------------------------- -----------------------------
March June September December March June
------------- ------------- ------------- ------------- ------------- -------------
PRE-TAX INCOME (1)
Fees $ 6.4 $ 7.4 $ 9.6 $ 12.8 $ 11.3 $ 10.6
Cost of Insurance (COI) 56.1 59.5 65.7 77.6 81.7 84.8
Interest Earned 30.7 30.0 31.8 31.4 30.1 30.2
Surrender Charges 0.7 0.8 0.7 1.3 1.3 1.2
------------- ------------- ------------- ------------- ------------- -------------
TOTAL REVENUES 93.9 97.7 107.8 123.1 124.4 126.8
------------- ------------- ------------- ------------- ------------- -------------
Net Death and Disability Benefits 30.1 25.1 39.9 43.6 44.9 39.0
Interest Credited 21.0 21.0 21.4 23.0 23.7 24.4
DAC Amortized 16.1 22.4 21.8 26.7 25.2 31.3
Operating Expenses 12.2 14.9 15.3 19.0 21.4 19.0
------------- ------------- ------------- ------------- ------------- -------------
TOTAL EXPENSES 79.4 83.4 98.4 112.3 115.2 113.7
------------- ------------- ------------- ------------- ------------- -------------
OPERATING INCOME BEFORE TAX $ 14.5 $ 14.3 $ 9.4 $ 10.8 $ 9.2 $ 13.1
============= ============= ============= ============= ============= =============
==================================================================================================================================
OPERATING EXPENSES
Commissions and Concessions $ 23.5 $ 26.6 $ 42.4 $ 65.4 $ 53.0 $ 63.2
Controllable Expenses and Other 38.9 48.1 67.3 103.1 84.6 34.7
------------- ------------- ------------- ------------- ------------- -------------
TOTAL CURRENT EXPENSES 62.4 74.7 109.7 168.5 137.6 97.9
Deferred Acquisition Costs (50.2) (59.8) (94.4) (149.5) (116.2) (78.9)
------------- ------------- ------------- ------------- ------------- -------------
OPERATING EXPENSES $ 12.2 $ 14.9 $ 15.3 $ 19.0 $ 21.4 $ 19.0
============= ============= ============= ============= ============= =============
- ----------------------------------------------------------------------------------------------------------------------------------
FUNDS UNDER MANAGEMENT (FUM)
Deposits $ 92.3 $ 100.2 $ 146.4 $ 202.0 $ 179.1 $ 149.7
Surrenders (21.9) (19.3) (16.2) (19.6) (19.7) (23.9)
------------- ------------- ------------- ------------- ------------- -------------
NET SALES 70.4 80.9 130.2 182.4 159.4 125.8
Deaths (8.3) (4.2) (4.7) (5.7) (9.0) (8.3)
Interest Credited 21.0 21.0 21.3 23.0 23.8 24.3
Fees (8.2) (8.9) (12.8) (18.7) (16.4) (13.4)
Cost of Insurance (56.1) (59.5) (65.7) (77.6) (81.7) (84.8)
------------- ------------- ------------- ------------- ------------- -------------
Change in FUM 18.8 29.3 68.3 103.4 76.1 43.6
Beginning Balance 1,904.1 1,922.9 1,952.2 2,020.5 2,123.9 2,200.0
------------- ------------- ------------- ------------- ------------- -------------
ENDING FUND BALANCE $ 1,922.9 $ 1,952.2 $ 2,020.5 $ 2,123.9 $ 2,200.0 $ 2,243.6
============= ============= ============= ============= ============= =============
Gross Life Insurance In Force $ 21,311.6 $ 22,575.0 $ 24,422.2 $ 27,358.2 $ 29,774.2 $ 31,298.0
============= ============= ============= ============= ============= =============
(1) Effective April 1, 2008 Phoenix adopted a preferable method of accounting
for long-duration reinsurance contracts. The new method better reflects the
economics of the underlying reinsurance activity by better matching the
reinsurance recovery with the insured loss that gave rise to that recovery.
Comparable amounts have been adjusted to apply this new method,
retrospectively. See page 32 of this document for more details on this
change.
9
THE PHOENIX COMPANIES, INC.
LIFE AND PRIVATE PLACEMENT SALES
Second Quarter 2008 (unaudited)
($ in millions)
YTD June December 31,
----------------------------- -------------------------------------------------------------
2008 2007 2007 2006 2005 2004
------------- ------------- ------------- ------------- ------------- -------------
LIFE INSURANCE SALES
WHOLESALER CHANNEL
Variable Universal Life $ 12.3 $ 11.1 $ 21.9 $ 16.7 $ 16.1 $ 18.2
Universal Life/Interest Sensitive 159.7 93.6 308.2 221.9 104.4 47.5
Term Life 10.1 10.7 22.2 20.3 16.4 15.3
------------- ------------- ------------- ------------- ------------- -------------
Life Insurance Annualized
Premium (1) 182.1 115.4 352.3 258.9 136.9 81.0
============= ============= ============= ============= ============= =============
Variable Universal Life 2.5 4.0 8.0 8.6 6.4 10.8
Universal Life/Interest Sensitive 22.7 20.1 65.0 61.8 49.2 53.2
------------- ------------- ------------- ------------- ------------- -------------
Life Insurance Single Premium 25.2 24.1 73.0 70.4 55.6 64.0
============= ============= ============= ============= ============= =============
Variable Universal Life 14.8 15.1 29.9 25.3 22.5 29.0
Universal Life/Interest Sensitive 182.4 113.7 373.2 283.7 153.6 100.7
Term Life 10.1 10.7 22.2 20.3 16.4 15.3
------------- ------------- ------------- ------------- ------------- -------------
Total Wholesaler Life Insurance
Premium (2) $ 207.3 $ 139.5 $ 425.3 $ 329.3 $ 192.5 $ 145.0
============= ============= ============= ============= ============= =============
Gross Life Insurance in Force $ 162,872.0 $ 148,572.0 $ 156,889 $ 144,139 $ 134,780 $ 127,466
============= ============= ============= ============= ============= =============
Average face amount for life
insurance sales $ 1.2 $ 1.1 $ 1.2 $ 1.2 $ 1.1 $ 1.0
============= ============= ============= ============= ============= =============
PRIVATE PLACEMENT LIFE AND
ANNUITY DEPOSITS
Variable Universal Life
(annualized and single) $ 70.0 $ 24.6 $ 59.2 $ 33.5 $ 46.5 $ 60.1
Annuity 80.4 200.9 399.7 1,020.2 773.8 152.6
------------- ------------- ------------- ------------- ------------- -------------
Total Private Placement Life and
Annuity Deposits $ 150.4 $ 225.5 $ 458.9 $ 1,053.7 $ 820.3 $ 212.7
============= ============= ============= ============= ============= =============
PRIVATE PLACEMENT FUNDS UNDER
MANAGEMENT (FUM) $ 5,259.4 $ 4,539.2 $ 5,039.2 $ 4,055.5 $ 2,776.4 $ 1,898.5
============= ============= ============= ============= ============= =============
(1) Annualized Premium represents first year premiums on an annual basis.
(2) Total Premium represents Annualized and Single premiums.
10
THE PHOENIX COMPANIES, INC.
LIFE AND PRIVATE PLACEMENT SALES
Second Quarter 2008 (unaudited)
($ in millions)
Quarters ended 2007 2008
------------------------------------------------------ -----------------------
March June September December March June
------------ ------------ ------------ ------------ ---------- -----------
LIFE INSURANCE SALES
WHOLESALER CHANNEL
Variable Universal Life $ 6.4 $ 4.7 $ 5.1 $ 5.7 $ 6.8 $ 5.5
Universal Life/Interest Sensitive 40.2 53.4 86.7 127.9 101.4 58.3
Term Life 5.5 5.2 4.4 7.1 5.0 5.1
------------ ------------ ------------ ------------ ---------- -----------
Life Insurance Annualized Premium (1) 52.1 63.3 96.2 140.7 113.2 68.9
============ ============ ============ ============ ========== ===========
Variable Universal Life 2.4 1.6 1.2 2.8 1.1 1.4
Universal Life/Interest Sensitive 7.8 12.3 18.9 26.0 11.2 11.5
------------ ------------ ------------ ------------ ---------- -----------
Life Insurance Single Premium 10.2 13.9 20.1 28.8 12.3 12.9
============ ============ ============ ============ ========== ===========
Variable Universal Life 8.8 6.3 6.3 8.5 7.9 6.9
Universal Life/Interest Sensitive 48.0 65.7 105.6 153.9 112.6 69.8
Term Life 5.5 5.2 4.4 7.1 5.0 5.1
------------ ------------ ------------ ------------ ---------- -----------
Total Wholesaler Life Insurance Premium (2) $ 62.3 $ 77.2 $ 116.3 $ 169.5 $ 125.5 $ 81.8
============ ============ ============ ============ ========== ===========
Gross Life Insurance in Force $ 146,355 $ 148,572 $ 151,282 $ 156,889 $ 160,354 $ 162,872
============ ============ ============ ============ ========== ===========
Average face amount for life insurance sales $ 1.2 $ 1.1 $ 1.2 $ 1.2 $ 1.3 $ 1.2
============ ============ ============ ============ ========== ===========
PRIVATE PLACEMENT LIFE AND ANNUITY DEPOSITS
Variable Universal Life (annualized and single) $ 11.4 $ 13.2 $ 7.6 $ 27.0 $ 13.8 $ 56.2
Annuity 54.2 146.7 47.5 151.3 27.8 52.6
------------ ------------ ------------ ------------ ---------- -----------
Total Private Placement Life and Annuity Deposits $ 65.6 $ 159.9 $ 55.1 $ 178.3 $ 41.6 $ 108.8
============ ============ ============ ============ ========== ===========
PRIVATE PLACEMENT FUNDS UNDER MANAGEMENT (FUM) $ 4,185.0 $ 4,539.2 $ 4,561.6 $ 5,039.2 $ 5,016.0 $ 5,259.4
============ ============ ============ ============ ========== ===========
(1) Annualized Premium represents first year premiums on an annual basis.
(2) Total Premium represents Annualized and Single premiums.
11
THE PHOENIX COMPANIES, INC.
ANNUITIES
Second Quarter 2008 (unaudited)
($ in millions)
YTD June December 31,
---------------------- ------------------------------------------------
2008 2007 2007 2006 2005 2004
--------- --------- --------- --------- --------- ---------
PRE-TAX INCOME (2)
Fees $ 38.1 $ 35.9 $ 74.7 $ 66.9 $ 65.4 $ 63.8
Surrender Charges 2.6 3.0 5.6 6.3 7.0 5.8
Interest earned on GIA and Required Interest 37.9 53.5 100.7 131.7 165.1 158.0
--------- --------- --------- --------- --------- ---------
TOTAL REVENUES 78.6 92.4 181.0 204.9 237.5 227.6
--------- --------- --------- --------- --------- ---------
Mortality Cost 5.2 1.8 (2.0) 5.8 6.6 8.9
DAC Amortized 28.6 21.9 55.7 66.6 62.6 35.7
Interest Credited 26.8 34.5 64.8 87.4 112.1 123.2
Operating Expenses 21.0 22.1 42.0 41.1 44.2 47.1
--------- --------- --------- --------- --------- ---------
TOTAL EXPENSES 81.6 80.3 160.5 200.9 225.5 214.9
--------- --------- --------- --------- --------- ---------
OPERATING INCOME (LOSS) BEFORE TAX $ (3.0) $ 12.1 $ 20.5 $ 4.0 $ 12.0 $ 12.7
========= ========= ========= ========= ========= =========
===================================================================================================================================
OPERATING EXPENSES
Commissions and Concessions $ 26.1 $ 23.2 $ 48.9 $ 39.7 $ 38.2 $ 42.6
Controllable Expenses and Other 23.8 25.7 48.9 40.8 37.9 48.2
--------- --------- --------- --------- --------- ---------
TOTAL CURRENT EXPENSES 49.9 48.9 97.8 80.5 76.1 90.8
Deferred Acquisition Costs (28.9) (26.8) (55.8) (39.4) (31.9) (43.7)
--------- --------- --------- --------- --------- ---------
OPERATING EXPENSES $ 21.0 $ 22.1 $ 42.0 $ 41.1 $ 44.2 $ 47.1
========= ========= ========= ========= ========= =========
- -----------------------------------------------------------------------------------------------------------------------------------
FUNDS UNDER MANAGEMENT (FUM)
Deposits, excluding Discontinued
Products and Private Placement $ 345.6 $ 289.9 $ 627.0 $ 414.7 $ 312.9 $ 423.3
Surrenders, excluding Discontinued
Products and Private Placement (285.6) (308.5) (609.2) (690.2) (584.4) (490.8)
--------- --------- --------- --------- --------- ---------
Net Sales, excluding Discontinued
Products and Private Placement 60.0 (18.6) 17.8 (275.5) (271.5) (67.5)
Net Sales, Private Placement (89.2) 153.2 228.4 807.4 587.9 121.9
Net Sales, Discontinued Products (155.8) (194.7) (327.7) (684.1) (383.8) (186.3)
--------- --------- --------- --------- --------- ---------
TOTAL NET SALES (185.0) (60.1) (81.5) (152.2) (67.4) (131.9)
Deaths (40.5) (44.0) (77.3) (87.0) (80.2) (81.6)
Interest Credited (1.2) 542.1 783.3 949.6 545.8 628.2
Fees (38.6) (35.4) (72.6) (70.9) (63.0) (59.8)
--------- --------- --------- --------- --------- ---------
Change in FUM (265.3) 402.6 551.9 639.5 335.2 354.9
Beginning Balance 9,229.5 8,677.6 8,677.6 8,038.1 7,702.9 7,348.0
--------- --------- --------- --------- --------- ---------
ENDING FUND BALANCE $8,964.2 $9,080.2 $9,229.5 $8,677.6 $8,038.1 $7,702.9
========= ========= ========= ========= ========= =========
VA Funds in Guaranteed Interest Accounts (1) $ 770.5 $ 891.7 $ 809.3 $1,030.8 $1,553.8 $1,939.1
========= ========= ========= ========= ========= =========
Private Placements Funds (1) $4,131.6 $3,714.6 $3,963.2 $3,302.8 $2,099.3 $1,297.9
========= ========= ========= ========= ========= =========
Discontinued Funds (1) $ 772.9 $1,072.0 $ 946.6 $1,263.3 $1,727.1 $2,080.3
========= ========= ========= ========= ========= =========
(1) Amounts are included in the annuities Funds Under Management (FUM) table
above.
(2) Effective the second quarter of 2008 the Alternative Retirement Solutions
line of business was reclassified from annuities to other life.
Comparable amounts have been adjusted for all periods presented.
12
THE PHOENIX COMPANIES, INC.
ANNUITIES
Second Quarter 2008 (unaudited)
($ in millions)
Quarters ended 2007 2008
------------------------------------------------------ -----------------------
March June September December March June
------------ ------------ ------------ ------------ ---------- -----------
PRE-TAX INCOME (2)
Fees $ 17.3 $ 18.6 $ 18.8 $ 20.0 $ 18.4 $ 19.7
Surrender Charges 1.6 1.4 1.4 1.2 1.3 1.3
Interest earned on GIA and Required Interest 27.1 26.4 24.6 22.6 19.7 18.2
------------ ------------ ------------ ------------ ---------- -----------
TOTAL REVENUES 46.0 46.4 44.8 43.8 39.4 39.2
============ ============ ============ ============ ========== ===========
Mortality Cost (1.0) 2.8 2.5 (6.3) 2.7 2.5
DAC Amortized 12.3 9.6 12.3 21.5 16.0 12.6
Interest Credited 17.3 17.2 15.1 15.2 13.7 13.1
Operating Expenses 10.5 11.6 9.6 10.3 11.1 9.9
------------ ------------ ------------ ------------ ---------- -----------
TOTAL EXPENSES 39.1 41.2 39.5 40.7 43.5 38.1
------------ ------------ ------------ ------------ ---------- -----------
OPERATING INCOME (LOSS) BEFORE TAX $ 6.9 $ 5.2 $ 5.3 $ 3.1 $ (4.1) $ 1.1
============ ============ ============ ============ ========== ===========
===================================================================================================================================
OPERATING EXPENSES
Commissions and Concessions $ 10.9 $ 12.3 $ 11.3 $ 14.4 $ 12.9 $ 13.2
Controllable Expenses and Other 11.9 13.8 11.2 12.0 12.2 11.6
------------ ------------ ------------ ------------ ---------- -----------
TOTAL CURRENT EXPENSES 22.8 26.1 22.5 26.4 25.1 24.8
Deferred Acquisition Costs (12.3) (14.5) (12.9) (16.1) (14.0) (14.9)
------------ ------------ ------------ ------------ ---------- -----------
OPERATING EXPENSES $ 10.5 $ 11.6 $ 9.6 $ 10.3 $ 11.1 $ 9.9
============ ============ ============ ============ ========== ===========
- -----------------------------------------------------------------------------------------------------------------------------------
FUNDS UNDER MANAGEMENT (FUM)
Deposits, excluding Discontinued
Products and Private Placement $ 131.3 $ 158.6 $ 140.7 $ 196.4 $ 169.1 $ 176.5
Surrenders, excluding Discontinued
Products and Private Placement (159.0) (149.5) (151.5) (149.2) (136.1) (149.5)
------------ ------------ ------------ ------------ ---------- -----------
Net Sales, excluding Discontinued
Products and Private Placement (27.7) 9.1 (10.8) 47.2 33.0 27.0
Net Sales, Private Placement 29.0 124.2 (41.4) 116.6 (79.0) (10.2)
Net Sales, Discontinued Products (73.9) (120.8) (81.6) (51.4) (116.1) (39.7)
------------ ------------ ------------ ------------ ---------- -----------
TOTAL NET SALES (72.6) 12.5 (133.8) 112.4 (162.1) (22.9)
Deaths (21.2) (22.8) (17.6) (15.7) (23.0) (17.5)
Interest Credited 169.6 372.5 151.6 89.6 (215.8) 214.6
Fees (17.8) (17.6) (17.0) (20.2) (18.6) (20.0)
------------ ------------ ------------ ------------ ---------- -----------
CHANGE IN FUM 58.0 344.6 (16.8) 166.1 (419.5) 154.2
Beginning Balance 8,677.6 8,735.6 9,080.2 9,063.4 9,229.5 8,810.0
------------ ------------ ------------ ------------ ---------- -----------
ENDING FUND BALANCE $ 8,735.6 $ 9,080.2 $ 9,063.4 $ 9,229.5 $ 8,810.0 $ 8,964.2
============ ============ ============ ============ ========== ===========
VA Funds in Guaranteed Interest Accounts (1) $ 955.9 $ 891.7 $ 832.2 $ 809.3 $ 794.8 $ 770.5
============ ============ ============ ============ ========== ===========
Private Placements Funds (1) $ 3,403.2 $ 3,714.7 $ 3,744.1 $ 3,963.2 $ 3,935.2 $ 4,131.6
============ ============ ============ ============ ========== ===========
Discontinued Funds (1) $ 1,190.0 $ 1,072.0 $ 993.8 $ 946.6 $ 827.3 $ 772.9
============ ============ ============ ============ ========== ===========
(1) Amounts are included in the annuities Funds Under Management (FUM) table
above.
(2) Effective the second quarter of 2008 the Alternative Retirement Solutions
line of business was reclassified from annuities to other life.
Comparable amounts have been adjusted for all periods presented.
13
THE PHOENIX COMPANIES, INC.
SUPPLEMENTARY LIFE AND ANNUITY INFORMATION
Second Quarter 2008 (unaudited)
($ in millions)
YTD June December 31,
---------------------- --------------------------------------------------
2008 2007 2007 2006 2005 2004
-------- -------- -------- -------- -------- --------
DEFERRED ACQUISITION COSTS (1)
Variable Universal Life $ 362.0 $ 369.2 $ 367.2 $ 371.3 $ 353.0 $ 332.5
Universal Life 938.4 601.2 796.7 529.8 354.7 262.0
Variable Annuities 290.6 283.3 282.6 275.0 281.3 299.0
Fixed Annuities 9.0 17.3 12.8 20.3 38.8 46.0
Participating 578.8 564.3 566.9 559.0 544.2 577.0
Offset for Unrealized Investment
(Gains) Losses 172.2 31.9 63.7 0.3 (16.0) (86.6)
-------- -------- -------- -------- -------- --------
Total $2,351.0 $1,867.2 $2,089.9 $1,755.7 $1,556.0 $1,429.9
======== ======== ======== ======== ======== ========
==============================================================================================================================
VARIABLE ANNUITY GUARANTEED MINIMUM DEATH
BENEFITS
Death Benefit in Excess of Fund Value $ 342.3 $ 199.9 $ 202.4 $ 238.8 $ 335.5 $ 441.1
Death Benefit in Excess of Fund Value, Net
of Reinsurance 146.1 40.7 46.6 51.4 82.1 123.5
Statutory Reserve, Net of Reinsurance 14.8 12.9 12.9 13.2 13.8 15.0
VARIABLE ANNUITY GUARANTEED INCOME BENEFITS
Account Balance $ 648.8 $ 702.4 $ 716.8 $ 620.1 $ 465.8 $ 344.8
Statutory Reserve 8.5 5.6 6.9 4.4 2.2 0.8
VARIABLE ANNUITY GUARANTEED ACCUMULATION
BENEFITS
Account Balance $ 430.3 $ 302.5 $ 389.8 $ 210.6 $ 72.6
Statutory Reserve 3.3 1.5 2.3 0.8 0.3
VARIABLE ANNUITY GUARANTEED WITHDRAWAL
BENEFITS
Account Balance $ 372.9 $ 81.6 $ 214.6 $ 30.1 $ 1.1
Statutory Reserve 1.9 0.2 0.7 0.1
VARIABLE ANNUITY GUARANTEED PAYOUT
ANNUITY FLOOR
Account Balance $ 34.9 $ 47.6 $ 43.4 $ 49.8 $ 49.9
Statutory Reserve 3.7 1.9 2.2 2.1 1.9
(1) Effective April 1, 2008 Phoenix adopted a preferable method of accounting
for long-duration reinsurance contracts. The new method better reflects the
economics of the underlying reinsurance activity by better matching the
reinsurance recovery with the insured loss that gave rise to that recovery.
Comparable amounts have been adjusted to apply this new method,
retrospectively. See page 32 of this document for more details on this
change.
14
THE PHOENIX COMPANIES, INC.
SUPPLEMENTARY LIFE AND ANNUITY INFORMATION
Second Quarter 2008 (unaudited)
($ in millions)
Quarters ended 2007 2008
--------------------------------------------------- -----------------------
March June September December March June
--------- --------- --------- --------- --------- ---------
DEFERRED ACQUISITION COSTS (1)
Variable Universal Life $ 371.0 $ 369.2 $ 366.5 $ 367.2 $ 366.3 $ 362.0
Universal Life 563.9 601.2 673.7 796.7 889.6 938.4
Variable Annuities 275.9 283.3 286.1 282.6 285.8 290.6
Fixed Annuities 19.4 17.3 15.4 12.8 10.1 9.0
Participating 561.8 564.3 565.3 566.9 576.7 578.8
Offset for Unrealized Investment
Gains and Losses (5.1) 31.9 48.7 63.7 107.4 172.2
--------- --------- --------- --------- --------- ---------
Total $ 1,786.9 $ 1,867.2 $ 1,955.7 $ 2,089.9 $ 2,235.9 $ 2,351.0
========= ========= ========= ========= ========= =========
===============================================================================================================================
VARIABLE ANNUITY GUARANTEED MINIMUM
DEATH BENEFITS
Death Benefit in Excess of Fund Value $ 225.2 $ 199.9 $ 189.3 $ 202.4 $ 336.3 $ 342.3
Death Benefit in Excess of Fund Value,
Net of Reinsurance 48.3 40.7 37.2 46.6 135.9 146.1
Statutory Reserve, Net of Reinsurance 13.3 12.9 12.6 12.9 14.6 14.8
VARIABLE ANNUITY GUARANTEED INCOME
BENEFITS
Account Balance $ 654.5 $ 702.4 $ 695.3 $ 716.8 $ 659.7 $ 648.8
Statutory Reserve 5.0 5.6 6.2 6.9 7.7 8.5
VARIABLE ANNUITY GUARANTEED ACCUMULATION
BENEFITS
Account Balance $ 246.9 $ 302.5 $ 324.2 $ 389.8 $ 389.4 $ 430.3
Statutory Reserve 1.1 1.5 1.8 2.3 2.8 3.3
VARIABLE ANNUITY GUARANTEED WITHDRAWAL
BENEFITS
Account Balance $ 49.1 $ 81.6 $ 103.7 $ 214.6 $ 282.9 $ 372.9
Statutory Reserve 0.1 0.2 0.4 0.7 1.2 1.9
VARIABLE ANNUITY GUARANTEED PAYOUT
ANNUITY FLOOR
Account Balance $ 47.5 $ 47.6 $ 46.6 $ 43.4 $ 37.6 $ 34.9
Statutory Reserve 2.2 1.9 2.0 2.2 3.8 3.7
(1) Effective April 1, 2008 Phoenix adopted a preferable method of accounting
for long-duration reinsurance contracts. The new method better reflects the
economics of the underlying reinsurance activity by better matching the
reinsurance recovery with the insured loss that gave rise to that recovery.
Comparable amounts have been adjusted to apply this new method,
retrospectively. See page 32 of this document for more details on this
change.
15
THE PHOENIX COMPANIES, INC.
ASSET MANAGEMENT
Second Quarter 2008 (unaudited)
($ in millions)
YTD June December 31,
----------------------------- -------------------------------------------------------------
2008 2007 2007 2006 2005 2004
------------- ------------- ------------- ------------- ------------- -------------
OPERATING INCOME
Investment Management Fees $ 63.7 $ 74.0 $ 147.4 $ 154.1 $ 182.1 $ 219.0
Mutual Funds - Ancillary Fees 27.2 29.6 59.8 49.4 41.1 38.8
Other Revenue 1.4 4.0 7.4 5.3 4.9 7.2
------------- ------------- ------------- ------------- ------------- -------------
Total Revenues 92.3 107.6 214.6 208.8 228.1 265.0
------------- ------------- ------------- ------------- ------------- -------------
Employment Expenses 39.3 44.4 85.0 89.4 103.9 132.6
Distribution & Admin Expenses 22.9 24.3 50.1 41.3 35.8 32.9
Other Operating
Expenses Direct(1) 14.8 22.0 43.8 43.8 50.6 53.0
Other Operating
Expenses Indirect(1) 8.2
Amortization of Intangibles 15.0 15.1 30.4 32.0 33.2 33.8
Intangible Asset Impairments 10.5 32.5 10.6
------------- ------------- ------------- ------------- ------------- -------------
Total Operating Expenses 110.7 105.8 209.3 239.0 234.1 252.3
------------- ------------- ------------- ------------- ------------- -------------
Management Income (Loss) (18.4) 1.8 5.3 (30.2) (6.0) 12.7
Other Income - Net 1.1 1.1 2.1 1.6 2.2 1.7
Minority Interest (6.7) (14.3)
------------- ------------- ------------- ------------- ------------- -------------
Operating Income (Loss),
before income taxes (17.3) 2.9 7.4 (28.6) (10.5) 0.1
Applicable Income
Taxes (Benefit) (6.9) 1.9 3.3 (10.7) (4.7) 2.3
------------- ------------- ------------- ------------- ------------- -------------
OPERATING INCOME (LOSS) (10.4) 1.0 4.1 (17.9) (5.8) (2.2)
Net Realized Investment
Gains (Losses) (1.0) 0.3 (0.5) 0.8 (0.3) 1.8
Management Restructuring
and Early Retirement Costs (8.7) (8.3) (1.2)
------------- ------------- ------------- ------------- ------------- -------------
NET INCOME (LOSS) $ (11.4) $ 1.3 $ 3.6 $ (25.8) $ (14.4) $ (1.6)
============= ============= ============= ============= ============= =============
Reconciliation of Operating
Income to Earnings Before
Income Taxes, Depreciation
and Amortization (EBITDA)
Operating Income (Loss),
before income taxes $ (17.3) $ 2.9 $ 7.4 $ (28.6) $ (10.5) $ 0.1
Adjustments for:
Intangible asset amortization
and impairments 25.5 15.1 30.4 64.5 43.8 33.8
Depreciation 0.3 0.7 1.1 1.0 1.7 2.2
------------- ------------- ------------- ------------- ------------- -------------
EBITDA $ 8.5 $ 18.7 $ 38.9 $ 36.9 $ 35.0 $ 36.1
============= ============= ============= ============= ============= =============
(1) Effective for the 1st quarter of 2008, other operating expenses were
split into direct and indirect, where indirect expenses represent expense
charge-backs and allocations from its parent company and affiliates. These
had previously been reported as a component of total other operating
expenses.
16
THE PHOENIX COMPANIES, INC.
ASSET MANAGEMENT
Second Quarter 2008 (unaudited)
($ in millions)
Quarters ended 2007 2008
------------------------------------------------------------- -----------------------------
March June September December March June
------------- ------------- ------------- ------------- ------------- -------------
OPERATING INCOME
Investment Management Fees $ 36.9 $ 37.1 $ 36.9 $ 36.5 $ 32.8 $ 30.9
Mutual Funds - Ancillary Fees 14.3 15.3 15.1 15.1 13.7 13.5
Other Revenue 2.2 1.8 1.9 1.5 0.9 0.5
------------- ------------- ------------- ------------- ------------- -------------
Total Revenues 53.4 54.2 53.9 53.1 47.4 44.9
------------- ------------- ------------- ------------- ------------- -------------
Employment Expenses 24.0 20.4 20.8 19.8 20.3 19.0
Distribution & Admin Expenses 11.6 12.7 12.9 12.9 11.4 11.5
Other Operating
Expenses Direct (1) 10.1 11.9 10.5 11.3 6.8 8.0
Other Operating
Expenses Indirect (1) 4.5 3.7
Amortization of Intangibles 7.6 7.5 7.5 7.8 7.5 7.5
Intangible Asset Impairments 10.5
------------- ------------- ------------- ------------- ------------- -------------
Total Operating Expenses 53.3 52.5 51.7 51.8 61.0 49.7
------------- ------------- ------------- ------------- ------------- -------------
Management Income (Loss) 0.1 1.7 2.2 1.3 (13.6) (4.8)
Other Income - Net 0.5 0.6 0.4 0.6 0.3 0.8
------------- ------------- ------------- ------------- ------------- -------------
Operating Income (Loss),
before income taxes 0.6 2.3 2.6 1.9 (13.3) (4.0)
Applicable Income Taxes (Benefit) 0.9 1.0 1.2 0.2 (4.6) (2.3)
------------- ------------- ------------- ------------- ------------- -------------
OPERATING INCOME (LOSS) (0.3) 1.3 1.4 1.7 (8.7) (1.7)
Net Realized Investment
Gains (Losses) 0.1 0.2 (0.2) (0.6) (0.6) (0.4)
------------- ------------- ------------- ------------- ------------- -------------
NET INCOME (LOSS) $ (0.2) $ 1.5 $ 1.2 $ 1.1 $ (9.3) $ (2.1)
============= ============= ============= ============= ============= =============
Reconciliation of Operating
Income to Earnings Before
Income Taxes, Depreciation
and Amortization (EBITDA)
Operating Income (Loss),
before income taxes $ 0.6 $ 2.3 $ 2.6 $ 1.9 $ (13.3) $ (4.0)
Adjustments for:
Intangible asset amortization
and impairments 7.6 7.5 7.5 7.8 18.0 7.5
Depreciation 0.2 0.5 0.2 0.2 0.1 0.2
------------- ------------- ------------- ------------- ------------- -------------
EBITDA $ 8.4 $ 10.3 $ 10.3 $ 9.9 $ 4.8 $ 3.7
============= ============= ============= ============= ============= =============
(1) Effective for the 1st quarter of 2008, other operating expenses were
split into direct and indirect, where indirect expenses represent expense
charge-backs and allocations from its parent company and affiliates. These
had previously been reported as a component of total other operating
expenses.
17
THE PHOENIX COMPANIES, INC.
ASSET MANAGEMENT NET FLOWS AND ASSETS UNDER MANAGEMENT
Second Quarter 2008 (unaudited)
($ in millions)
YTD June December 31,
----------------------------- -------------------------------------------------------------
2008 2007 2007 2006 2005 2004
------------- ------------- ------------- ------------- ------------- -------------
RETAIL PRODUCTS:
Managed Accounts
- ----------------
Deposits and reinvestments $ 514.0 $ 655.9 $ 1,212.3 $ 1,141.2 $ 1,760.3 $ 2,109.9
Redemptions and withdrawals (1,073.4) (1,558.7) (2,668.6) (4,297.5) (5,722.8) (5,203.0)
------------- ------------- ------------- ------------- ------------- -------------
Net Flows (559.4) (902.8) (1,456.3) (3,156.3) (3,962.5) (3,093.1)
Performance (559.6) 200.4 144.4 593.9 (62.6) 950.3
Acquisitions (dispositions)
/ Other (81.5) 71.0 (158.0)
------------- ------------- ------------- ------------- ------------- -------------
Net Change in AUM (1,119.0) (702.4) (1,393.4) (2,491.4) (4,183.1) (2,142.8)
Assets under management,
beginning of period 5,447.7 6,841.1 6,841.1 9,332.5 13,515.6 15,658.4
------------- ------------- ------------- ------------- ------------- -------------
Assets under management,
end of period $ 4,328.7 $ 6,138.7 $ 5,447.7 $ 6,841.1 $ 9,332.5 $ 13,515.6
============= ============= ============= ============= ============= =============
Mutual Funds
- ------------
Deposits and reinvestments $ 1,369.6 $ 2,330.0 $ 3,596.2 $ 2,567.5 $ 2,030.4 $ 1,673.2
Redemptions and withdrawals (1,621.8) (1,860.7) (3,826.2) (2,828.6) (2,444.0) (2,004.5)
------------- ------------- ------------- ------------- ------------- -------------
Net Flows (252.2) 469.3 (230.0) (261.1) (413.6) (331.3)
Performance (1,022.5) 349.5 338.6 1,522.2 184.1 805.9
Money market funds
net change in AUM 261.5 (149.4) 502.5 (1,382.8) (28.4) (28.9)
Acquisitions (dispositions)
/ Other (67.6) (66.0) (143.9) 9,838.3 120.1 105.7
------------- ------------- ------------- ------------- ------------- -------------
Net Change in AUM (1,080.8) 603.4 467.2 9,716.6 (137.8) 551.4
Assets under management,
beginning of period 22,331.0 21,863.8 21,863.8 12,147.2 12,285.0 11,733.6
------------- ------------- ------------- ------------- ------------- -------------
Assets under management,
end of period $ 21,250.2 $ 22,467.2 $ 22,331.0 $ 21,863.8 $ 12,147.2 $ 12,285.0
============= ============= ============= ============= ============= =============
INSTITUTIONAL PRODUCTS:
Deposits and reinvestments $ 398.3 $ 645.7 $ 1,237.6 $ 1,609.2 $ 5,545.1 $ 2,885.2
Redemptions and withdrawals (4,966.6) (988.2) (2,002.1) (3,504.4) (6,599.1) (5,389.2)
------------- ------------- ------------- ------------- ------------- -------------
Net Flows (4,568.3) (342.5) (764.5) (1,895.2) (1,054.0) (2,504.0)
Performance (159.5) 251.2 559.3 1,089.2 367.2 1,140.5
Acquisitions (dispositions)
/ Other (2) (19.7) (192.8) (895.2) (332.6) (63.3) 234.3
------------- ------------- ------------- ------------- ------------- -------------
Net Change in AUM (4,747.5) (284.1) (1,100.4) (1,138.6) (750.1) (1,129.2)
Assets under management,
beginning of period 11,194.4 12,294.8 12,294.8 13,433.4 14,183.5 15,312.7
------------- ------------- ------------- ------------- ------------- -------------
Assets under management,
end of period $ 6,446.9 $ 12,010.7 $ 11,194.4 $ 12,294.8 $ 13,433.4 $ 14,183.5
============= ============= ============= ============= ============= =============
STRUCTURED FINANCE PRODUCTS:
Deposits and reinvestments $ 1.2 $ 2,290.0 $ 2,290.0 $ 2,423.5 $ 1,002.3 $ 1.7
Redemptions and withdrawals (1,191.7) (319.6) (352.3) (1,141.7) (1,157.9) (659.2)
------------- ------------- ------------- ------------- ------------- -------------
Net Flows (1,190.5) 1,970.4 1,937.7 1,281.8 (155.6) (657.5)
Performance (1,004.7) (191.6) (2,325.5) 171.5 (258.9) 26.0
------------- ------------- ------------- ------------- ------------- -------------
Net Change in AUM (2,195.2) 1,778.8 (387.8) 1,453.3 (414.5) (631.5)
Assets under management,
beginning of period 3,575.3 3,963.1 3,963.1 2,509.8 2,924.3 3,555.8
------------- ------------- ------------- ------------- ------------- -------------
Assets under management,
end of period $ 1,380.1 $ 5,741.9 $ 3,575.3 $ 3,963.1 $ 2,509.8 $ 2,924.3
============= ============= ============= ============= ============= =============
TOTAL:
Deposits and reinvestments $ 2,283.1 $ 5,921.6 $ 8,336.1 $ 7,741.4 $ 10,338.1 $ 6,670.0
Redemptions and withdrawals (8,853.5) (4,727.2) (8,849.2) (11,772.2) (15,923.8) (13,255.9)
------------- ------------- ------------- ------------- ------------- -------------
Net Flows (6,570.4) 1,194.4 (513.1) (4,030.8) (5,585.7) (6,585.9)
Performance (2,746.3) 609.5 (1,283.2) 3,376.8 229.8 2,922.7
Money market funds
net change in AUM 261.5 (149.4) 502.5 (1,382.8) (28.4) (28.9)
Acquisitions (dispositions)
/ Other (87.3) (258.8) (1,120.6) 9,576.7 (101.2) 340.0
------------- ------------- ------------- ------------- ------------- -------------
Net Change in AUM (9,142.5) 1,395.7 (2,414.4) 7,539.9 (5,485.5) (3,352.1)
Assets under management,
beginning of period 42,548.4 44,962.8 44,962.8 37,422.9 42,908.4 46,260.5
------------- ------------- ------------- ------------- ------------- -------------
Assets under management,
end of period $ 33,405.9 $ 46,358.5 $ 42,548.4 $ 44,962.8 $ 37,422.9 $ 42,908.4
============= ============= ============= ============= ============= =============
Variable Products Change in
AUM (included in
Institutional Products) $ (73.0) $ 5.4 $ (950.3) $ 106.5 $ (342.3) $ 211.6
============= ============= ============= ============= ============= =============
Money Market balances(1) $ 6,465.0 $ 5,551.7 $ 6,203.6 $ 5,701.1 $ 101.4 $ 129.8
============= ============= ============= ============= ============= =============
(1) Money Market balances included in Mutual Funds above.
(2) Effective for the 4th quarter of 2006, "Other" includes the net change
in AUM during the quarter of institutional cash management accounts. This
treatment is consistent with the treatment of money market mutual funds.
18
THE PHOENIX COMPANIES, INC.
ASSET MANAGEMENT NET FLOWS AND ASSETS UNDER MANAGEMENT
Second Quarter 2008 (unaudited)
($ in millions)
2007 2008
------------------------------------------------------------- -----------------------------
March June September December March June
------------- ------------- ------------- ------------- ------------- -------------
RETAIL PRODUCTS:
Managed Accounts
- ----------------
Deposits and reinvestments $ 290.4 $ 365.5 $ 299.0 $ 257.4 $ 278.9 $ 235.1
Redemptions and withdrawals (728.1) (830.6) (482.8) (627.1) (585.6) (487.8)
------------- ------------- ------------- ------------- ------------- -------------
Net Flows (437.7) (465.1) (183.8) (369.7) (306.7) (252.7)
Performance 125.6 74.8 64.4 (120.4) (516.3) (43.3)
Acquisitions (dispositions)
/ Other (81.5)
------------- ------------- ------------- ------------- ------------- -------------
Net Change in AUM (312.1) (390.3) (119.4) (571.6) (823.0) (296.0)
Assets under management,
beginning of period 6,841.1 6,529.0 6,138.7 6,019.3 5,447.7 4,624.7
------------- ------------- ------------- ------------- ------------- -------------
Assets under management,
end of period $ 6,529.0 $ 6,138.7 $ 6,019.3 $ 5,447.7 $ 4,624.7 $ 4,328.7
============= ============= ============= ============= ============= =============
Mutual Funds
- ------------
Deposits and reinvestments $ 1,160.7 $ 1,169.3 $ 701.2 $ 565.0 $ 682.7 $ 686.9
Redemptions and withdrawals (881.8) (978.9) (1,023.0) (942.5) (900.5) (721.3)
------------- ------------- ------------- ------------- ------------- -------------
Net Flows 278.9 190.4 (321.8) (377.5) (217.8) (34.4)
Performance 298.5 51.0 188.5 (199.4) (999.6) (22.9)
Money market funds
net change in AUM (364.2) 214.8 1,939.1 (1,287.2) (1,027.2) 1,288.7
Acquisitions (dispositions)
/ Other (14.0) (52.0) 13.6 (91.5) (27.6) (40.0)
------------- ------------- ------------- ------------- ------------- -------------
Net Change in AUM 199.2 404.2 1,819.4 (1,955.6) (2,272.2) 1,191.4
Assets under management,
beginning of period 21,863.8 22,063.0 22,467.2 24,286.6 22,331.0 20,058.8
------------- ------------- ------------- ------------- ------------- -------------
Assets under management,
end of period $ 22,063.0 $ 22,467.2 $ 24,286.6 $ 22,331.0 $ 20,058.8 $ 21,250.2
============= ============= ============= ============= ============= =============
INSTITUTIONAL PRODUCTS:
Deposits and reinvestments $ 281.3 $ 364.4 $ 260.2 $ 331.7 $ 334.3 $ 64.0
Redemptions and withdrawals (513.3) (474.9) (566.6) (447.3) (4,144.2) (822.4)
------------- ------------- ------------- ------------- ------------- -------------
Net Flows (232.0) (110.5) (306.4) (115.6) (3,809.9) (758.4)
Performance 233.8 17.4 251.6 56.5 (76.9) (82.6)
Acquisitions (dispositions)
/ Other (261.9) 69.1 (708.2) 5.8 (70.0) 50.3
------------- ------------- ------------- ------------- ------------- -------------
Net Change in AUM (260.1) (24.0) (763.0) (53.3) (3,956.8) (790.7)
Assets under management,
beginning of period 12,294.8 12,034.7 12,010.7 11,247.7 11,194.4 7,237.6
------------- ------------- ------------- ------------- ------------- -------------
Assets under management,
end of period $ 12,034.7 $ 12,010.7 $ 11,247.7 $ 11,194.4 $ 7,237.6 $ 6,446.9
============= ============= ============= ============= ============= =============
STRUCTURED FINANCE PRODUCTS:
Deposits and reinvestments $ 1,500.0 $ 790.0 $ 0.0 0.0 $ 0.0 $ 1.2
Redemptions and withdrawals (299.0) (20.6) (17.6) (15.1) (25.9) (1,165.8)
------------- ------------- ------------- ------------- ------------- -------------
Net Flows 1,201.0 769.4 (17.6) (15.1) (25.9) (1,164.6)
Performance (73.7) (117.9) (809.3) (1,324.6) (951.1) (53.6)
------------- ------------- ------------- ------------- ------------- -------------
Net Change in AUM 1,127.3 651.5 (826.9) (1,339.7) (977.0) (1,218.2)
Assets under management,
beginning of period 3,963.1 5,090.4 5,741.9 4,915.0 3,575.3 2,598.3
------------- ------------- ------------- ------------- ------------- -------------
Assets under management,
end of period $ 5,090.4 $ 5,741.9 $ 4,915.0 $ 3,575.3 $ 2,598.3 $ 1,380.1
============= ============= ============= ============= ============= =============
TOTAL:
Deposits and reinvestments $ 3,232.4 $ 2,689.2 $ 1,260.4 $ 1,154.1 $ 1,295.9 $ 987.2
Redemptions and withdrawals (2,422.2) (2,305.0) (2,090.0) (2,032.0) (5,656.2) (3,197.3)
------------- ------------- ------------- ------------- ------------- -------------
Net Flows 810.2 384.2 (829.6) (877.9) (4,360.3) (2,210.1)
Performance 584.2 25.3 (304.8) (1,587.9) (2,543.9) (202.4)
Money market funds
net change in AUM (364.2) 214.8 1,939.1 (1,287.2) (1,027.2) 1,288.7
Acquisitions (dispositions)
/ Other (275.9) 17.1 (694.6) (167.2) (97.6) 10.3
------------- ------------- ------------- ------------- ------------- -------------
Net Change in AUM 754.3 641.4 110.1 (3,920.2) (8,029.0) (1,113.5)
Assets under management,
beginning of period 44,962.8 45,717.1 46,358.5 46,468.6 42,548.4 34,519.4
------------- ------------- ------------- ------------- ------------- -------------
Assets under management,
end of period $ 45,717.1 $ 46,358.5 $ 46,468.6 $ 42,548.4 $ 34,519.4 $ 33,405.9
============= ============= ============= ============= ============= =============
Variable Products
Change in AUM (included
in Institutional Products) $ (10.2) $ 5.4 $ (897.3) $ (48.2) $ (32.9) $ (40.1)
============= ============= ============= ============= ============= =============
Money Market balances(1) $ 5,336.9 $ 5,551.7 $ 7,490.8 $ 6,203.6 $ 5,176.3 $ 6,465.0
============= ============= ============= ============= ============= =============
(1) Money Market balances included in Mutual Funds above.
19
THE PHOENIX COMPANIES, INC.
VENTURE CAPITAL SEGMENT (1)
Second Quarter 2008 (unaudited)
($ in millions)
December 31,
------------------------------------
2005 2004
---------- ----------
OPERATING INCOME
Operating Gain (Loss) $ 3.5 $ (1.7)
Realized Gains on Cash and Stock Distributions 21.9 7.4
Change in Unrealized Gains (Losses) on Investments Held in Partnerships (10.6) 13.6
---------- ----------
Equity in Partnership Earnings, before income taxes 14.8 19.3
Applicable Income Taxes 5.2 6.8
---------- ----------
Operating Income $ 9.6 $ 12.5
========== ==========
========================================================================================================================
VENTURE CAPITAL INVESTMENTS
Contributions (Dollars Invested) $ 27.6 $ 37.7
Equity In Earnings of Partnerships 14.8 19.3
Distributions (68.2) (50.4)
Sale of Partnership Interests and Transfer to Closed Block (91.5)
Realized Loss on Sale of Partnership Interests and Transfer to Closed Block (13.9)
---------- ----------
Change in Venture Capital Investments (131.2) 6.6
Beginning Balance 202.9 196.3
---------- ----------
Ending Balance $ 71.7 $ 202.9
========== ==========
(1) In the fourth quarter of 2005, the company secured an agreement to sell
approximately three-quarters of the assets in the Venture Capital segment,
and as a result eliminated the segment effective January 1, 2006.
20
THE PHOENIX COMPANIES, INC.
CORPORATE AND OTHER
Second Quarter 2008 (unaudited)
($ in millions)
YTD June December 31,
------------------------- ------------------------------------------------------
2008 2007 2007 2006 2005 2004
------------ ----------- ------------ ------------ ------------ ------------
OPERATING INCOME
Corporate Investment Income $ 0.6 $ 3.0 $ 6.7 $ 4.6 $ (0.8) $ 0.4
Interest Expense on Indebtedness (19.0) (21.1) (44.2) (49.2) (46.6) (40.8)
Corporate Expenses (22.8) (8.4) (10.8) (17.3) (24.6) (18.9)
Other (0.5) 1.1 0.8 (0.1) 0.7 (1.5)
------------ ----------- ------------ ------------ ------------ ------------
Operating Loss, before income taxes (41.7) (25.4) (47.5) (62.0) (71.3) (60.8)
Applicable Income Tax (Benefit) (15.5) (18.4) (29.5) (21.2) (26.9) (23.0)
------------ ----------- ------------ ------------ ------------ ------------
OPERATING LOSS (26.2) (7.0) (18.0) (40.8) (44.4) (37.8)
Net Realized Investment Gains (Losses) (8.4) 10.0 (5.7) 21.0 4.4 (0.4)
Realized and Unrealized Gains (Losses)
on Equity Investment in Aberdeen (7.0) 55.9
Share of Aberdeen's Extraordinary Charge
for FSA Settlement (14.7)
Surplus Notes Tender Costs (6.4)
Management Restructuring and Early
Retirement Costs (0.4) (4.1) (13.4)
------------ ----------- ------------ ------------ ------------ ------------
NET INCOME (LOSS) $ (34.6) $ 3.0 $ (23.7) $ (20.2) $ (51.1) $ (16.8)
============ =========== ============ ============ ============ ============
21
THE PHOENIX COMPANIES, INC.
CORPORATE AND OTHER
Second Quarter 2008 (unaudited)
($ in millions)
Quarters Ended
2007 2008
-------------------------------------------------------- --------------------------
March June September December March June
----------- ----------- ----------- ----------- ----------- -----------
OPERATING INCOME
Corporate Investment Income $ 1.5 $ 1.5 $ 1.8 $ 1.9 $ 0.9 $ (0.3)
Interest Expense on Indebtedness (9.5) (11.6) (11.5) (11.6) (10.2) (8.8)
Corporate Expenses (2.9) (5.5) (1.7) (0.7) (11.2) (11.6)
Other 1.7 (0.6) 0.1 (0.4) (0.1) (0.4)
----------- ----------- ----------- ----------- ----------- -----------
Operating Loss, before income taxes (9.2) (16.2) (11.3) (10.8) (20.6) (21.1)
Applicable Income Tax (Benefit) (3.6) (14.7) (6.2) (4.9) (8.1) (7.4)
----------- ----------- ----------- ----------- ----------- -----------
OPERATING LOSS (5.6) (1.5) (5.1) (5.9) (12.5) (13.7)
Net Realized Investment Gains (Losses) 11.8 (1.8) (1.0) (14.7) (1.1) (7.3)
----------- ----------- ----------- ----------- ----------- -----------
NET INCOME (LOSS) $ 6.2 $ (3.3) $ (6.1) $ (20.6) $ (13.6) $ (21.0)
=========== =========== =========== =========== =========== ===========
22
THE PHOENIX COMPANIES, INC.
CONSOLIDATED STATEMENT OF INCOME - GAAP FORMAT (1)(2)
Second Quarter 2008 (unaudited)
($ in millions)
YTD June December 31,
---------------------------- ---------------------------------------------------------
2008 2007 2007 2006 2005 2004
------------- ------------- ------------- ------------- ------------- ------------
REVENUES
Premiums $ 371.5 $ 387.8 $ 798.3 $ 839.7 $ 928.7 $ 990.6
Insurance, Investment Management
and Product Fees 361.9 305.9 652.6 560.1 501.8 550.0
Mutual Fund Ancillary Fees and
Other Revenue 29.2 34.0 67.7 54.8 46.5 46.9
Net Investment Income 494.8 539.3 1,060.4 1,049.9 1,100.3 1,074.0
Unrealized Gain on Trading Equity
Securities 85.9
Net Realized Investment Gains (Losses) (73.7) 22.6 (6.8) 76.5 34.2 10.8
------------- ------------- ------------- ------------- ------------- ------------
Total Revenues 1,183.7 1,289.6 2,572.2 2,581.0 2,611.5 2,758.2
------------- ------------- ------------- ------------- ------------- ------------
BENEFITS AND EXPENSES
Policy Benefits and Increase in Policy
Liabilities 662.8 644.1 1,318.5 1,341.1 1,376.7 1,422.2
Policyholder Dividends 159.7 194.1 380.0 399.1 364.4 404.7
Policy Acquisition Cost Amortization 95.6 85.2 192.9 145.7 132.1 110.2
Intangible Asset Impairments 10.5 32.5 10.6
Intangible Asset Amortization 15.0 15.1 30.4 32.0 33.8 33.8
Interest Expense on Indebtedness 19.0 21.1 44.2 49.2 46.6 40.8
Interest Expense on Non-recourse
Collateralized Obligations 5.1 8.1 15.4 18.7 29.4 33.6
Other Operating Expenses 232.0 222.7 440.0 428.3 482.9 565.8
------------- ------------- ------------- ------------- ------------- ------------
Total Expenses 1,199.7 1,190.4 2,421.4 2,446.6 2,476.5 2,611.1
------------- ------------- ------------- ------------- ------------- ------------
Income (Loss) from Continuing Operations
before Income Taxes, Minority Interest
and equity in undistributed losses of
affiliates (16.0) 99.2 150.8 134.4 135.0 147.1
Applicable Income Taxes (Benefit) (7.8) 20.8 29.7 40.2 27.1 46.0
------------- ------------- ------------- ------------- ------------- ------------
Income (Loss) from Continuing Operations
before Minority Interest and equity in
undistributed losses of affiliates (8.2) 78.4 121.1 94.2 107.9 101.1
Equity in undistributed losses of
affiliates (10.4)
------------- ------------- ------------- ------------- ------------- ------------
Income (Loss) from Continuing Operations (8.2) 78.4 121.1 94.2 107.9 90.7
Discontinued Operations:
Income (Loss) from Discontinued
Operations 1.2 (3.5) 1.1 0.5 (4.3)
------------- ------------- ------------- ------------- ------------- ------------
Net Income (Loss) $ (8.2) $ 79.6 $ 117.6 $ 95.3 $ 108.4 $ 86.4
============= ============= ============= ============= ============= ============
(1) Certain reclassifications have been made to prior periods to conform with
the current presentation.
(2) Effective April 1, 2008 Phoenix adopted a preferable method of accounting
for long-duration reinsurance contracts. The new method better reflects the
economics of the underlying reinsurance activity by better matching the
reinsurance recovery with the insured loss that gave rise to that recovery.
Comparable amounts have been adjusted to apply this new method,
retrospectively. See page 32 of this document for more details on this
change.
23
THE PHOENIX COMPANIES, INC.
CONSOLIDATED STATEMENT OF INCOME - GAAP FORMAT(1)(2)
Second Quarter 2008 (unaudited)
($ in millions)
Quarters Ended
2007 2008
-------------------------------------------------------- --------------------------
March June September December March June
----------- ----------- ----------- ----------- ----------- -----------
REVENUES
Premiums $ 194.7 $ 193.1 $ 197.5 $ 213.0 $ 180.2 $ 191.3
Insurance, Investment Management
and Product Fees 150.5 155.5 164.5 182.1 179.5 182.4
Mutual Fund Ancillary Fees and
Other Revenue 16.7 17.2 17.0 16.8 14.6 14.6
Net Investment Income 276.5 262.8 261.1 260.0 248.5 246.3
Net Realized Investment Gains
(Losses) 24.5 (1.9) 3.9 (33.2) (47.5) (26.2)
----------- ----------- ----------- ----------- ----------- -----------
Total Revenues 662.9 626.7 644.0 638.7 575.3 608.4
----------- ----------- ----------- ----------- ----------- -----------
BENEFITS AND EXPENSES
Policy Benefits and Increase in
Policy Liabilities 322.2 321.9 331.9 342.5 335.8 327.0
Policyholder Dividends 103.8 90.3 98.1 87.8 73.7 86.0
Policy Acquisition Cost Amortization 41.3 43.9 46.8 60.9 40.0 55.6
Intangible Asset Impairments 10.5
Intangible Asset Amortization 7.6 7.5 7.5 7.8 7.5 7.5
Interest Expense on Indebtedness 9.5 11.6 11.5 11.6 10.2 8.8
Interest Expense on Non-recourse
Collateralized Obligations 4.0 4.1 3.9 3.4 3.2 1.9
Other Operating Expenses 106.9 115.8 102.7 114.7 117.4 114.6
----------- ----------- ----------- ----------- ----------- -----------
Total Expenses 595.3 595.1 602.4 628.7 598.3 601.4
----------- ----------- ----------- ----------- ----------- -----------
Income (Loss) from Continuing
Operations before Income Taxes 67.6 31.6 41.6 10.0 (23.0) 7.0
Applicable Income Taxes (Benefit) 19.7 1.1 6.8 2.1 (8.6) 0.8
----------- ----------- ----------- ----------- ----------- -----------
Income (Loss) from Continuing Operations 47.9 30.5 34.8 7.9 (14.4) 6.2
Discontinued Operations:
Income (Loss) from Discontinued
Operations 0.8 0.4 (4.7)
----------- ----------- ----------- ----------- ----------- -----------
Net Income (Loss) $ 48.7 $ 30.9 $ 34.8 $ 3.2 $ (14.4) $ 6.2
=========== =========== =========== =========== =========== ===========
(1) Certain reclassifications have been made to prior periods to conform with
the current presentation.
(2) Effective April 1, 2008 Phoenix adopted a preferable method of accounting
for long-duration reinsurance contracts. The new method better reflects the
economics of the underlying reinsurance activity by better matching the
reinsurance recovery with the insured loss that gave rise to that recovery.
Comparable amounts have been adjusted to apply this new method,
retrospectively. See page 32 of this document for more details on this
change.
24
THE PHOENIX COMPANIES, INC.
CONSOLIDATING SECOND QUARTER 2008 INCOME STATEMENT
Second Quarter 2008 (unaudited)
($ in millions)
Year-to-Date June 30, 2008
Operating Income Exclusions from Operating Income
-------------------------------------------- -------------------------------------------
Corporate Realized
Asset & Investment Intra-Segment
Consolidated Life & Annuity Management Other Gains/Losses Other Eliminations
------------- -------------- ------------- ------------- ------------- ------------- -------------
REVENUES
Premiums $ 371.5 $ 371.5
Insurance, Investment
Management and
Product Fees 361.9 298.4 $ 63.7 $ (0.2)
Mutual Fund Ancillary
Fees and Other Revenue 29.2 29.2
Net Investment Income 494.8 479.7 0.6 $ 9.1 $ (1.1) 6.5
Net Realized Investment
Losses (73.7) (73.7)
------------- -------------- ------------- ------------- ------------- ------------- -------------
Total Revenues 1,183.7 1,149.6 93.5 9.1 (73.7) (1.1) 6.3
------------- -------------- ------------- ------------- ------------- ------------- -------------
BENEFITS AND EXPENSES
Policy Benefits and
Increase in Policy
Liabilities 662.8 659.1 3.7
Policyholder Dividends 159.7 184.7 (25.0)
Policy Acquisition Cost
Amortization 95.6 105.0 (9.4)
Intangible Asset
Amortization 15.0 15.0
Intangible Asset
Impairments 10.5 10.5
Interest Expense
on Indebtedness 19.0 19.0
Interest Expense on
Non-recourse
Collateralized
Obligations 5.1 5.1
Other Operating Expenses 232.0 122.0 85.3 23.0 (3.5) (1.1) 6.3
------------- -------------- ------------- ------------- ------------- ------------- -------------
Total Expenses 1,199.7 1,070.8 110.8 50.8 (37.9) (1.1) 6.3
------------- -------------- ------------- ------------- ------------- ------------- -------------
Income (Loss) from
Continuing Operations
before Income Taxes (16.0) 78.8 (17.3) (41.7) (35.8) 0.0 0.0
Applicable Income Taxes
(Benefit) (7.8) 27.5 (6.9) (15.5) (12.9)
------------- -------------- ------------- ------------- ------------- ------------- -------------
Income (Loss) from
Continuing Operations $ (8.2) $ 51.3 $ (10.4) $ (26.2) $ (22.9) $ 0.0 $ 0.0
============= ============== ============= ============= ============= ============= =============
25
THE PHOENIX COMPANIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEET -- PRELIMINARY (1)
Second Quarter 2008 (unaudited)
($ in millions, except par value)
June December 31,
------------- ------------------------------------------------------------
2008 2007 2006 2005 2004
------------- ------------- ------------- ------------- ------------
ASSETS:
Available-for-Sale Debt Securities, at fair value $ 11,291.3 $ 11,970.0 $ 12,696.8 $ 13,404.6 $ 13,476.3
Available-for-Sale Equity Securities, at fair value 189.1 205.3 187.1 181.8 304.3
Trading Equity Securities, at fair value 87.3
Policy Loans, at unpaid principal balances 2,473.3 2,380.5 2,322.0 2,245.0 2,196.7
Venture Capital Partnerships, at equity in
net assets 208.4 173.7 116.8 145.1 255.3
Other Investments 449.8 507.3 380.2 439.2 579.7
Fair value option investments 113.1
------------- ------------- ------------- ------------- ------------
14,725.0 15,236.8 15,702.9 16,415.7 16,899.6
Available-for-Sale Debt and Equity Securities
Pledged as Collateral, at fair value 176.2 219.1 267.8 304.4 1,278.8
------------- ------------- ------------- ------------- ------------
TOTAL INVESTMENTS 14,901.2 15,455.9 15,970.7 16,720.1 18,178.4
Cash and Cash Equivalents 443.2 577.7 404.9 301.5 435.0
Accrued Investment Income 196.6 209.6 215.8 225.8 222.3
Receivables 214.4 159.7 218.6 146.9 135.8
Deferred Policy Acquisition Costs 2,351.0 2,089.9 1,755.7 1,556.0 1,429.9
Deferred Income Taxes 76.2 42.8 39.6 56.0 30.7
Intangible Assets 183.2 208.2 237.5 295.9 308.4
Goodwill 484.5 484.5 471.1 467.7 427.2
Other Assets 207.9 172.8 240.1 220.2 241.3
Separate Account Assets 10,576.6 10,820.3 9,458.6 7,722.2 6,950.3
------------- ------------- ------------- ------------- ------------
TOTAL ASSETS $ 29,634.8 $ 30,221.4 $ 29,012.6 $ 27,712.3 $ 28,359.3
============= ============= ============= ============= ============
LIABILITIES:
Policy Liabilities and Accruals $ 13,800.2 $ 13,816.7 $ 13,525.7 $ 13,246.2 $ 13,132.4
Policyholder Deposit Funds 1,664.0 1,808.9 2,228.4 3,060.7 3,492.4
Indebtedness 474.0 627.7 685.4 751.9 690.8
Stock Purchase Contracts 131.9
Other Liabilities 686.6 550.9 539.0 534.3 583.9
Non-recourse Collateralized Debt Obligation
Liabilities 256.3 317.9 344.0 389.9 1,355.2
Separate Account Liabilities 10,576.6 10,820.3 9,458.6 7,722.2 6,950.3
------------- ------------- ------------- ------------- ------------
TOTAL LIABILITIES 27,457.7 27,942.4 26,781.1 25,705.2 26,336.9
------------- ------------- ------------- ------------- ------------
STOCKHOLDERS' EQUITY:
Common stock, $.01 par value, 1.0 billion shares
authorized;
114,391,506 shares outstanding (June 30, 2008) 1.3 1.3 1.3 1.1 1.0
Additional paid in capital 2,621.8 2,616.1 2,600.2 2,437.6 2,431.6
Accumulated Earnings (Deficit) (50.6) (20.7) (115.9) (193.1) (285.7)
Treasury stock, at cost: 11,313,564 shares
(June 30, 2008) (179.5) (179.5) (179.5) (179.5) (182.6)
Accumulated Other Comprehensive Income (Loss) (215.9) (138.2) (74.6) (59.0) 58.1
------------- ------------- ------------- ------------- ------------
TOTAL STOCKHOLDERS' EQUITY 2,177.1 2,279.0 2,231.5 2,007.1 2,022.4
------------- ------------- ------------- ------------- ------------
TOTAL LIABILITIES, MINORITY INTEREST AND
STOCKHOLDERS' EQUITY $ 29,634.8 $ 30,221.4 $ 29,012.6 $ 27,712.3 $ 28,359.3
============= ============= ============= ============= ============
(1) Effective April 1, 2008 Phoenix adopted a preferable method of accounting
for long-duration reinsurance contracts. The new method better reflects
the economics of the underlying reinsurance activity by better matching
the reinsurance recovery with the insured loss that gave rise to that
recovery. Comparable amounts have been adjusted to apply this new method,
retrospectively. See page 32 of this document for more details on this
change.
26
THE PHOENIX COMPANIES, INC.
GENERAL ACCOUNT INVESTMENT PORTFOLIO SUMMARY (1)
Second Quarter 2008 (Unaudited)
($ Millions)
Total Debt Securities Public Debt Securities Private Debt Securities
--------------------------- --------------------------- ---------------------------
6/30/08 12/31/07 6/30/08 12/31/07 6/30/08 12/31/07
------------ ------------ ------------ ------------ ------------ ------------
DEBT SECURITIES BY CREDIT QUALITY
(CARRYING VALUE)
AAA/AA/A $ 7,085.0 $ 7,473.6 $ 5,628.6 $ 5,950.6 $ 1,456.4 $ 1,523.0
BBB 3,234.8 3,567.7 1,819.9 1,997.9 1,414.9 1,569.8
------------ ------------ ------------ ------------ ------------ ------------
Total Investment Grade 10,319.8 11,041.3 7,448.5 7,948.5 2,871.3 3,092.8
------------ ------------ ------------ ------------ ------------ ------------
BB 628.8 604.3 485.7 507.7 143.1 96.6
B 210.8 227.3 138.3 179.3 72.5 48.0
CCC and Lower 110.8 84.0 57.6 33.8 53.2 50.2
In or Near Default 21.1 13.1 3.7 6.1 17.4 7.0
------------ ------------ ------------ ------------ ------------ ------------
Total Debt Securities $ 11,291.3 $ 11,970.0 $ 8,133.8 $ 8,675.4 $ 3,157.5 $ 3,294.6
============ ============ ============ ============ ============ ============
% Below Investment Grade 8.6% 7.8% 8.4% 8.4% 9.1% 6.1%
==================================================================================================================================
UNREALIZED GAINS AND LOSSES ON DEBT AND EQUITY SECURITIES
As of 6/30/08
Total Outside Closed Block Closed Block
--------------------------- --------------------------- ---------------------------
Gains Losses Gains Losses Gains Losses
------------ ------------ ------------ ------------ ------------ ------------
Total Debt Securities $ 163.3 $ (728.4) $ 43.2 $ (374.3) $ 120.1 $ (354.1)
Equity Securities 21.1 (10.0) 4.0 (1.1) 17.1 (8.9)
------------ ------------ ------------ ------------ ------------ ------------
Total Unrealized Gains (Losses) 184.4 (738.4) 47.2 (375.4) 137.2 (363.0)
------------ ------------ ------------ ------------ ------------ ------------
Applicable PDO 137.2 (323.3) 137.2 (323.3)
Applicable DAC (Credit) 9.2 (181.5) 9.2 (181.5)
Applicable Deferred Income Tax (Benefit) 13.3 (81.8) 13.3 (67.9) (13.9)
------------ ------------ ------------ ------------ ------------ ------------
Total Offsets to Net Unrealized
Gains (Losses) 159.7 (586.6) 22.5 (249.4) 137.2 (337.2)
------------ ------------ ------------ ------------ ------------ ------------
Net Unrealized Gains (Losses) $ 24.7 $ (151.8) $ 24.7 $ (126.0) $ 0.0 $ (25.8)
============ ============ ============ ============ ============ ============
Net Unrealized Losses $ (127.1) $ (101.3) $ (25.8)
============ ============ ============
(1) Excludes debt and equity securities pledged as collateral.
27
THE PHOENIX COMPANIES, INC.
GENERAL ACCOUNT GAAP NET INVESTMENT INCOME YIELDS (1)
Second Quarter 2008 (unaudited)
($ in millions)
Quarters ended YTD June December 31,
--------------------------- --------------------------------------------------------
2008 2007 2007 2006 2005 2004
------------ ------------ ------------ ----------- ----------- -----------
GAAP NET INVESTMENT INCOME
Debt Securities $ 361.3 $ 388.9 $ 774.4 $ 800.7 $ 804.6 $ 772.1
Equity Securities 2.2 4.5 8.2 7.0 7.5 4.5
Mortgages 0.6 1.1 1.7 6.2 20.2 22.5
Policy Loans 90.8 87.9 179.5 169.3 165.8 167.1
Venture Capital 14.6 14.1 27.0 3.3 23.8 25.5
Cash & Cash Equivalents 5.4 9.6 18.8 16.3 7.6 4.9
Other Income 2.2 5.8 8.3
Other Investments (2) 18.0 28.7 43.9 40.0 47.8 48.8
------------ ------------ ------------ ----------- ----------- -----------
Total Cash and Invested Assets 495.1 540.6 1,061.8 1,042.8 1,077.3 1,045.4
------------ ------------ ------------ ----------- ----------- -----------
Discontinued Operations 1.3 4.5 7.5 6.6 4.8 3.6
Investment Expenses 4.2 5.0 9.6 5.3 6.1 7.9
------------ ------------ ------------ ----------- ----------- -----------
Total Net Investment Income $ 489.6 $ 531.1 $ 1,044.7 $ 1,030.9 $ 1,066.4 $ 1,033.9
============ ============ ============ =========== =========== ===========
ANNUALIZED YIELDS
Debt Securities 6.5% 6.4% 6.6% 6.5% 6.2% 5.9%
Equity Securities 2.2% 4.6% 4.1% 3.7% 3.0% 1.3%
Mortgages 9.1% 12.9% 11.0% 8.1% 15.3% 11.0%
Policy Loans 7.7% 7.8% 7.9% 7.6% 7.7% 7.9%
Venture Capital 15.6% 21.3% 17.3% 2.7% 12.8% 10.9%
Cash & Cash Equivalents 2.7% 5.6% 4.1% 4.7% 5.2% 1.1%
Other Investments (2) 8.8% 18.4% 11.6% 13.6% 16.4% 7.5%
------------ ------------ ------------ ----------- ----------- -----------
Total Cash and Invested Assets 6.7% 7.0% 7.0% 6.7% 6.6% 6.1%
------------ ------------ ------------ ----------- ----------- -----------
Investment Expenses and Discontinued
Operations 0.1% 0.1% 0.1% 0.1% 0.1% 0.1%
------------ ------------ ------------ ----------- ----------- -----------
Total Net Investment Income yields 6.6% 6.9% 6.9% 6.6% 6.6% 6.1%
============ ============ ============ =========== =========== ===========
(1) Excludes debt and equity securities pledged as collateral.
(2) Includes real estate, affiliates and other invested assets.
28
THE PHOENIX COMPANIES, INC.
GENERAL ACCOUNT GAAP NET INVESTMENT INCOME YIELDS (1)
Second Quarter 2008 (unaudited)
($ in millions)
Quarters ended 2007 2008
------------------------------------------------------------- -----------------------------
March June September December March June
------------- ------------- ------------- ------------- ------------- -------------
GAAP Net Investment Income
Debt Securities $ 194.0 $ 194.9 $ 195.7 $ 189.8 $ 183.3 $ 178.0
Equity Securities 2.4 2.1 0.9 2.8 1.0 1.2
Mortgages 0.7 0.4 0.3 0.3 0.2 0.4
Policy Loans 44.1 43.8 45.5 46.1 45.0 45.8
Venture Capital 7.8 6.3 7.9 5.0 5.8 8.8
Cash & Cash Equivalents 4.9 4.7 4.3 4.9 3.6 1.8
Other Income 4.6 1.2 (0.5) 3.0 1.9 0.3
Other Investments (2) 19.0 9.7 6.3 8.9 7.0 11.0
------------- ------------- ------------- ------------- ------------- -------------
Total Cash and Invested Assets 277.5 263.1 260.4 260.8 247.8 247.3
------------- ------------- ------------- ------------- ------------- -------------
Discontinued Operations 2.7 1.8 0.7 2.3 0.7 0.6
Investment Expenses 2.3 2.7 2.5 2.1 1.8 2.4
------------- ------------- ------------- ------------- ------------- -------------
Total Net Investment Income $ 272.5 $ 258.6 $ 257.2 $ 256.4 $ 245.3 $ 244.3
============= ============= ============= ============= ============= =============
ANNUALIZED YIELDS
Debt Securities 6.3% 6.4% 6.6% 6.5% 6.4% 6.4%
Equity Securities 5.2% 4.3% 1.8% 5.6% 1.9% 2.4%
Mortgages 6.4% 9.2% 7.1% 7.6% 5.4% 12.3%
Policy Loans 7.9% 7.8% 8.0% 8.1% 7.8% 7.8%
Venture Capital 27.5% 18.8% 22.2% 12.6% 13.4% 19.1%
Cash & Cash Equivalents 5.4% 5.5% 4.9% 4.3% 3.1% 1.8%
Other Investments (2) 26.6% 12.1% 7.2% 9.3% 7.0% 10.9%
------------- ------------- ------------- ------------- ------------- -------------
Total Cash and Invested Assets 7.2% 6.9% 6.9% 6.9% 6.6% 6.7%
------------- ------------- ------------- ------------- ------------- -------------
Investment Expenses and Discontinued
Operations 0.1% 0.1% 0.1% 0.1% 0.1% 0.1%
------------- ------------- ------------- ------------- ------------- -------------
Total Net Investment Income yields 7.1% 6.8% 6.8% 6.8% 6.5% 6.6%
============= ============= ============= ============= ============= =============
(1) Excludes debt and equity securities pledged as collateral.
(2) Includes real estate, affiliates and other invested assets.
29
THE PHOENIX COMPANIES, INC.
GENERAL ACCOUNT REALIZED INVESTMENT GAINS AND LOSSES
Second Quarter 2008 (unaudited)
($ Millions)
YTD June December 31,
----------------------- -------------------------------------------------
2008 2007 2007 2006 2005 2004
---------- ---------- ---------- ---------- ---------- ----------
REALIZED INVESTMENT GAINS AND LOSSES
Debt Security Impairments $ (57.5) $ (14.6) $ (46.7) $ (7.9) $ (31.2) $ (15.5)
Equity Security Impairments (0.6) (0.1) (0.5) (2.1) (1.5)
Mortgage Loan Impairments (0.8) (12.6)
Debt and Equity Securities Pledged as Collateral
Impairments (0.8) (0.8) (1.0) (1.2) (16.6)
Other Invested Asset Impairments (8.8) (3.9) (3.3)
---------- ---------- ---------- ---------- ---------- ----------
Total Impairment Losses (66.9) (15.5) (51.9) (8.9) (35.3) (49.5)
---------- ---------- ---------- ---------- ---------- ----------
Debt Security Net Transaction Gains (Losses) (2.8) 8.8 11.6 42.0 (18.0) 28.4
Equity Security Net Transaction Gains (Losses) 2.1 3.9 9.5 21.9 2.9 14.6
Venture Capital Net Investment Gains (Losses) 2.4 (13.9)
Mortgage Loan Net Transaction Gains (Losses) (0.1) 1.4 1.4 3.2 0.2
Affiliate Equity Security Transactions Gains 13.7 13.7 10.4 3.7
Real Estate Net Transaction Gains (Losses) 1.4 1.4 (0.6) (0.8)
Settlement of HRH Stock Purchase Contracts 86.3
Other Invested Asset Net Transactions Gains (Losses) (7.4) 8.0 5.7 5.5 6.6 6.3
Debt and Equity Securities Pledged as Collateral 1.4 0.9 1.8 2.5
---------- ---------- ---------- ---------- ---------- ----------
Total Net Transactions Gains (6.8) 38.1 45.1 85.4 69.5 48.7
---------- ---------- ---------- ---------- ---------- ----------
Net Realized Investment Gains (Losses) (73.7) 22.6 (6.8) 76.5 34.2 (0.8)
========== ========== ========== ========== ========== ==========
Closed Block Applicable PDO (Reduction) (25.0) 5.3 4.4 46.0 (12.4) 3.7
Applicable Deferred Acquisition Costs (Credit) (9.5) (0.1) 0.2 (3.5) 17.6 (0.4)
Applicable Deferred Income Tax (Credit) (14.1) 3.4 (4.3) 11.7 9.2 3.1
---------- ---------- ---------- ---------- ---------- ----------
Net Realized Investment Gains (Losses) Included in
Net Income $ (25.1) $ 14.0 $ (7.1) $ 22.3 $ 19.8 $ (7.2)
========== ========== ========== ========== ========== ==========
30
THE PHOENIX COMPANIES, INC.
GENERAL ACCOUNT REALIZED INVESTMENT GAINS AND LOSSES
Second Quarter 2008 (unaudited)
($ Millions)
Quarters ended 2007 2008
------------------------------------------------------------- ----------------------------
March June September December March June
------------- ------------- ------------- ------------- ------------- ------------
REALIZED INVESTMENT GAINS AND LOSSES
Debt Security Impairments $ (1.0) $ (13.6) $ (3.8) $ (28.3) $ (32.6) $ (24.9)
Equity Security Impairments (0.1) (0.3) (0.1) (0.5) (0.1)
Debt and Equity Securities Pledged
as Collateral Impairments (0.8)
Other Invested Asset Impairments (1.3) (2.6) (7.3) (1.5)
------------- ------------- ------------- ------------- ------------- ------------
Total Impairment Losses (1.0) (14.5) (5.4) (31.0) (40.4) (26.5)
------------- ------------- ------------- ------------- ------------- ------------
Debt Security Net Transaction
Gains (Losses) 3.4 5.4 5.5 (2.7) (2.8)
Equity Security Net Transaction
Gains (Losses) 1.3 2.6 2.8 2.8 (0.2) 2.3
Mortgage Loan Net Transaction
Gains (Losses) 1.4 (0.1)
Affiliate Equity Security
Transactions Gains 13.7
Real Estate Net Transaction
Gains (Losses) 1.5 (0.1)
Other Invested Asset Net
Transactions Gains (Losses) 4.0 4.0 0.5 (2.8) (4.8) (2.6)
Debt and Equity Securities Pledged
as Collateral 0.2 0.7 0.5 0.4 0.8 0.6
------------- ------------- ------------- ------------- ------------- ------------
Total Net Transactions
Gains (Losses) 25.5 12.6 9.3 (2.3) (7.1) 0.3
------------- ------------- ------------- ------------- ------------- ------------
Net Realized Investment
Gains (Losses) 24.5 (1.9) 3.9 (33.3) (47.5) (26.2)
============= ============= ============= ============= ============= ============
Closed Block Applicable PDO
(Reduction) 6.6 (1.3) 1.1 (2.0) (15.5) (9.5)
Applicable Deferred Acquisition
Costs (Credit) (0.4) 0.3 0.4 (0.1) (6.0) (3.5)
Applicable Deferred Income
Tax (Credit) 3.9 0.4 0.7 (9.3) (9.4) (4.7)
------------- ------------- ------------- ------------- ------------- ------------
Net Realized Investment
Gains (Losses) Included in
Net Income $ 14.4 $ (1.3) $ 1.7 $ (21.9) $ (16.6) $ (8.5)
============= ============= ============= ============= ============= ============
31
THE PHOENIX COMPANIES, INC.
EFFECT OF CHANGE IN ACCOUNTING
Periods 2006 - March 2008 (unaudited)
($ in millions)
Quarters ended 2007
2006 ------------------------------------------------------------ 2008 Cumulative
December March June September December March Effect
------------ ------------ ----------- ------------ ------------ ------------ -----------
INCOME STATEMENT SUMMARY
OPERATING INCOME
As previously reported $ 36.0 $ 37.4 $ 33.9 $ 34.3 $ 29.7 $ (4.7) $ 166.6
As adjusted 31.4 35.5 31.6 33.5 28.4 (0.1) 160.3
NET INCOME
As previously reported 44.3 50.6 33.2 35.6 4.5 (19.0) 149.2
As adjusted 39.7 48.7 30.9 34.8 3.2 (14.4) 142.9
================================================================================================================================
BALANCE SHEET
Periods ended
2007
2006 ------------------------------------------------------------ 2008
December March June September December March
------------ ------------ ----------- ------------ ------------ ------------
STOCKHOLDER'S EQUITY
As previously reported $ 2,236.1 $ 2,288.8 $ 2,273.2 $ 2,306.4 $ 2,289.9 $ 2,261.1
As adjusted 2,231.5 2,282.2 2,264.3 2,296.9 2,279.0 2,254.8
32