EXHIBIT 99.1
------------
[LOGO OF PHOENIX]
PHOENIX
FINANCIAL SUPPLEMENT
The Phoenix Companies, Inc.
September 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
Barclays Capital Eric Berg contact our transfer agent and registrar:
Citigroup Keith Walsh The Phoenix Companies, Inc. C/O BNY Mellon Shareowner Services
Credit Suisse Securities (USA) Tom Gallagher P.O. Box 358015, Pittsburgh, PA 15258
Dowling & Partners Paul Goulekas / Sean Rourke Toll-free: 1-800-490-4258 Int'l: 201-680-6823
JP Morgan Jimmy Bhullar TDD: 800-231-5469, Int'l TDD: 201-680-6610
Keefe Bruyette & Woods, Inc. Jukka Lipponen E-mail: shrrelations@bnymellon.com
Langen McAlenney Robert Glasspiegel 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 traded Investor Relations
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
SEPTEMBER 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 THIRD 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
Third Quarter 2008 (unaudited)
(amount in millions, except per share data)
For the Period Ended: December 31,
YTD September ----------------------------------------------------------
2008 2007 2006 2005 2004
------------- ------------- ------------- ------------- -------------
BALANCE SHEET INFORMATION
General Account Invested Assets $ 14,463.5 $ 15,814.5 $ 16,107.8 $ 16,717.2 $ 17,334.6
Separate Account Assets 9,830.8 10,820.3 9,458.6 7,722.2 6,950.3
Total Assets 28,167.8 30,221.4 29,012.6 27,712.3 28,359.3
Indebtedness 467.0 627.7 685.4 751.9 690.8
Total Stockholders' Equity 1,527.3 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 $ 2,111.7 $ 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) $ 2,425.0 $ 2,399.9 $ 2,239.4 $ 2,017.1
Total Operating Return on Equity (1) -16.77% 5.38% 3.68% 4.99%
Average Tangible Common Equity (2) $ 1,698.2 $ 1,703.1 $ 1,516.8 $ 1,280.4
Total Operating Return on Average Tangible Equity (2) -23.95% 7.94% 5.74% 7.86%
Debt to Total Capitalization (4) 18.1% 20.3% 22.5% 26.2% 25.5%
Book Value Per Share $ 13.35 $ 19.94 $ 19.63 $ 21.10 $ 21.32
Book Value Per Share, excluding SFAS 115
and other accumulated OCI $ 17.97 $ 21.15 $ 20.29 $ 21.72 $ 20.70
Book Value Per Share, excluding SFAS 115,
other accumulated OCI and FIN 46-R $ 18.46 $ 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 293.0 300.0 300.0 300.0 300.0
Interest Rate Swap 0.5 2.0 8.0
Bank Credit Facility 25.0 25.0
Other 57.2 67.0
------------- ------------- ------------- ------------ -------------
Total Indebtedness $ 467.0 $ 627.7 $ 685.4 $ 751.9 $ 690.8
============= ============= ============= ============ =============
===================================================================================================================================
STATUTORY FINANCIAL DATA FOR PHOENIX LIFE INSURANCE
COMPANY (3)
Capital, Surplus and Surplus Notes $ 704.6 $ 848.1 $ 932.4 $ 885.5 $ 814.6
Asset Valuation Reserve (AVR) 130.6 192.6 187.9 210.8 213.6
------------- ------------- ------------- ------------ -------------
Capital, Surplus, Surplus Notes and AVR $ 835.2 $ 1,040.7 $ 1,120.3 $ 1,096.3 $ 1,028.2
============= ============= ============= ============ =============
Policyholder Dividend Liability $ 366.9 $ 355.6 $ 348.9 $ 356.1 $ 403.3
Interest Maintenance Reserve $ (44.1) $ (44.4) $ (44.3) $ (23.1) $ (31.3)
Statutory Gain From Operations $ 20.7 $ 115.2 $ 131.6 $ 106.2 $ 35.1
Statutory Net Income (Loss) $ (68.1) $ 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. September
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
Third Quarter 2008 (unaudited)
(amount in millions, except per share data)
YTD September December 31,
---------------------------- ----------------------------------------------------------
2008 2007 2007 2006 2005 2004
------------- ------------- ------------- ------------- ------------- -------------
INCOME STATEMENT SUMMARY
OPERATING INCOME
Life Insurance (1) (2) $ 124.6 $ 138.3 $ 185.6 $ 202.6 $ 180.5 $ 130.1
Annuities (2) (12.5) 17.4 20.5 4.0 12.0 12.7
------------- ------------- ------------- ------------- ------------- -------------
Life and Annuity Segment 112.1 155.7 206.1 206.6 192.5 142.8
Asset Management Segment (445.0) 5.5 7.4 (28.6) (10.5) 0.1
Venture Capital Segment 14.8 19.3
Corporate and Other (58.0) (36.8) (47.6) (62.0) (71.3) (60.8)
------------- ------------- ------------- ------------- ------------- -------------
TOTAL OPERATING INCOME, BEFORE
INCOME TAXES (390.9) 124.4 165.9 116.0 125.5 101.4
Applicable Income Taxes (88.0) 23.8 36.9 33.5 24.9 22.5
------------- ------------- ------------- ------------- ------------- -------------
TOTAL OPERATING INCOME (302.9) 100.6 129.0 82.5 100.6 78.9
Net Realized Investment Gains (Losses) (41.8) 12.0 (8.9) 21.8 25.5 11.8
Realized Gains (Losses) - Investments
Pledged as Collateral Consolidated
Under FIN 46-R (3.0) 0.6 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 (347.7) 113.2 121.1 94.2 107.9 90.7
Income (Loss) from Discontinued
Operations 1.2 (3.5) 1.1 0.5 (4.3)
------------- ------------- ------------- ------------- ------------- -------------
NET INCOME (LOSS) $ (347.7) $ 114.4 $ 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 $ (2.65) $ 0.88 $ 1.13 $ 0.74 $ 1.06 $ 0.83
Net Income (Loss) Per Share $ (3.04) $ 1.00 $ 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 $ (2.65) $ 0.87 $ 1.11 $ 0.73 $ 0.98 $ 0.78
Net Income (Loss) Per Share $ (3.04) $ 0.99 $ 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 nine months ended September 30, 2008, the weighted average common
shares outstanding and dilutive potential common shares were 116.5 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
Third Quarter 2008 (unaudited)
(amount in millions, except per share data)
Quarters ended
2007 2008
-------------------------------------------------- ------------------------------------
March June September December March June September
----------- ---------- ----------- ------------ ----------- ---------- -----------
OPERATING INCOME
Life Insurance (1) (2) $ 53.0 $ 42.0 $ 43.3 $ 47.3 $ 37.4 $ 44.4 $ 42.8
Annuities 6.9 5.2 5.3 3.1 (4.1) 1.1 (9.5)
----------- ---------- ----------- ------------ ----------- ---------- -----------
Life and Annuity Segment 59.9 47.2 48.6 50.4 33.3 45.5 33.3
Asset Management Segment 0.6 2.3 2.6 1.9 (13.3) (4.0) (427.7)
Corporate and Other (9.2) (16.2) (11.4) (10.8) (20.6) (21.1) (16.3)
----------- ---------- ----------- ------------ ----------- ---------- -----------
TOTAL OPERATING INCOME (LOSS),
BEFORE INCOME TAXES 51.3 33.3 39.8 41.5 (0.6) 20.4 (410.7)
Applicable Income Taxes (Benefit) 15.8 1.7 6.3 13.1 (0.5) 5.6 (93.1)
----------- ---------- ----------- ------------ ----------- ---------- -----------
TOTAL OPERATING INCOME (LOSS) 35.5 31.6 33.5 28.4 (0.1) 14.8 (317.6)
Net Realized Investment
Gains (Losses) 12.2 (1.0) 0.8 (20.9) (15.1) (9.2) (17.5)
Realized Gains (Losses) - Investments
Pledged as Collateral Consolidated
Under FIN 46-R 0.2 (0.1) 0.5 0.4 0.8 0.6 (4.4)
----------- ---------- ----------- ------------ ----------- ---------- -----------
INCOME (LOSS) FROM CONTINUING
OPERATIONS 47.9 30.5 34.8 7.9 (14.4) 6.2 (339.5)
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 $ (339.5)
=========== ========== =========== ============ =========== ========== ===========
================================================================================================================================
EARNINGS PER SHARE
BASIC
Weighted-Average Shares Outstanding 113.8 114.1 114.2 114.2 114.3 114.4 114.4
----------- ---------- ----------- ------------ ----------- ---------- -----------
Total Operating Income Per Share $ 0.31 $ 0.28 $ 0.29 $ 0.25 $ (0.00) $ 0.13 $ (2.78)
Net Income (Loss) Per Share $ 0.43 $ 0.27 $ 0.30 $ 0.03 $ (0.13) $ 0.05 $ (2.97)
DILUTED
Weighted-Average Shares Outstanding
and Dilutive Potential Common Shares 115.1 115.6 115.8 115.8 114.3 116.0 114.4
----------- ---------- ----------- ------------ ----------- ---------- -----------
Total Operating Income Per Share $ 0.30 $ 0.27 $ 0.29 $ 0.24 $ (0.00) $ 0.13 $ (2.78)
Net Income (Loss) Per Share $ 0.42 $ 0.27 $ 0.30 $ 0.03 $ (0.13) $ 0.05 $ (2.97)
===========
(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
Third Quarter 2008 (unaudited)
($ in millions)
YTD September December 31,
---------------------------- ----------------------------------------------------------
2008 2007 2007 2006 2005 2004
------------- ------------- ------------- ------------- ------------- -------------
OPERATING INCOME (3)
Variable Universal Life $ 22.2 $ 31.5 $ 42.0 $ 54.6 $ 69.6 $ 35.7
Universal Life (1) 40.5 38.2 49.0 44.4 47.9 34.4
Other Life and Annuity (2) (4) (8.1) 0.7 (0.2) 2.6 1.5 1.6
------------- ------------- ------------- ------------- ------------- -------------
TOTAL CORE LIFE INSURANCE 54.6 70.4 90.8 101.6 119.0 71.7
------------- ------------- ------------- ------------- ------------- -------------
Traditional Life, excluding Closed Block 22.6 17.8 27.8 31.2 (11.7) (18.3)
Traditional Life, Closed Block 47.4 50.1 67.0 69.8 73.2 76.7
------------- ------------- ------------- ------------- ------------- -------------
TOTAL TRADITIONAL LIFE 70.0 67.9 94.8 101.0 61.5 58.4
------------- ------------- ------------- ------------- ------------- -------------
TOTAL, LIFE INSURANCE 124.6 138.3 185.6 202.6 180.5 130.1
Annuities (4) (12.5) 17.4 20.5 4.0 12.0 12.7
------------- ------------- ------------- ------------- ------------- -------------
OPERATING INCOME, BEFORE INCOME TAXES 112.1 155.7 206.1 206.6 192.5 142.8
Allocated Income Taxes 27.1 45.2 63.1 65.4 51.3 36.4
------------- ------------- ------------- ------------- ------------- -------------
OPERATING INCOME 85.0 110.5 143.0 141.2 141.2 106.4
Net Realized Investment Gains (Losses) (33.8) 3.5 (1.6) (1.0) 22.7 (2.5)
Management Restructuring and
Early Retirement Costs (0.1) (7.3)
------------- ------------- ------------- ------------- ------------- -------------
NET INCOME $ 51.2 $ 114.0 $ 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
Third Quarter 2008 (unaudited)
($ in millions)
Quarters ended
2007 2008
-------------------------------------------------- ------------------------------------
March June September December March June September
----------- ---------- ----------- ------------ ----------- ---------- -----------
OPERATING INCOME (2)
Variable Universal Life $ 8.9 $ 10.8 $ 11.8 $ 10.5 $ 7.1 $ 9.3 $ 5.8
Universal Life (1) 14.5 14.3 9.4 10.8 9.2 13.1 18.2
Other Life and Annuity (3) 0.3 0.6 (0.2) (0.8) (1.7) (1.9) (4.5)
----------- ---------- ----------- ------------ ----------- ---------- -----------
TOTAL CORE LIFE INSURANCE 23.7 25.7 21.0 20.5 14.6 20.5 19.5
----------- ---------- ----------- ------------ ----------- ---------- -----------
Traditional Life, excluding
Closed Block 12.6 (0.5) 5.6 10.0 7.1 8.0 7.5
Traditional Life, Closed Block 16.7 16.8 16.7 16.8 15.7 15.9 15.8
----------- ---------- ----------- ------------ ----------- ---------- -----------
TOTAL TRADITIONAL LIFE 29.3 16.3 22.3 26.8 22.8 23.9 23.3
----------- ---------- ----------- ------------ ----------- ---------- -----------
TOTAL, LIFE INSURANCE 53.0 42.0 43.3 47.3 37.4 44.4 42.8
Annuities (3) 6.9 5.2 5.3 3.1 (4.1) 1.1 (9.5)
----------- ---------- ----------- ------------ ----------- ---------- -----------
OPERATING INCOME, BEFORE INCOME TAXES 59.9 47.2 48.6 50.4 33.3 45.5 33.3
Allocated Income Taxes 18.5 15.5 11.2 17.9 12.1 15.3 (0.4)
----------- ---------- ----------- ------------ ----------- ---------- -----------
OPERATING INCOME 41.4 31.7 37.4 32.5 21.2 30.2 33.7
Net Realized Investment Gains (Losses) 0.4 0.6 2.5 (5.1) (12.8) (0.9) (20.3)
----------- ---------- ----------- ------------ ----------- ---------- -----------
NET INCOME $ 41.8 $ 32.3 $ 39.9 $ 27.4 $ 8.4 $ 29.3 $ 13.4
=========== ========== =========== ============ =========== ========== ===========
(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
Third Quarter 2008 (unaudited)
($ in millions)
YTD September December 31,
---------------------------- ----------------------------------------------------------
2008 2007 2007 2006 2005 2004
------------- ------------- ------------- ------------- ------------- -------------
PRE-TAX INCOME (2)
Fees $ 25.8 $ 23.9 $ 32.4 $ 26.6 $ 32.5 $ 29.6
Cost of Insurance (COI) 64.4 60.6 81.9 77.8 76.7 74.6
Interest Earned 7.3 7.4 9.9 9.2 6.3 5.9
Surrender Charges 3.6 5.4 6.6 6.7 7.1 6.9
------------- ------------- ------------- ------------- ------------- -------------
TOTAL REVENUES 101.1 97.3 130.8 120.3 122.6 117.0
------------- ------------- ------------- ------------- ------------- -------------
Net Death and Disability Benefits 30.7 21.3 28.9 36.0 28.5 30.5
Interest Credited 5.0 4.2 5.8 4.8 4.6 3.7
DAC Amortized 24.8 21.7 28.8 1.3 (4.4) 22.2
Operating Expenses 18.4 18.6 25.3 23.6 24.3 24.9
------------- ------------- ------------- ------------- ------------- -------------
TOTAL EXPENSES 78.9 65.8 88.8 65.7 53.0 81.3
------------- ------------- ------------- ------------- ------------- -------------
OPERATING INCOME BEFORE TAX $ 22.2 $ 31.5 $ 42.0 $ 54.6 $ 69.6 $ 35.7
============= ============= ============= ============= ============= =============
===================================================================================================================================
OPERATING EXPENSES
Commissions and Concessions $ 12.0 $ 11.1 $ 15.8 $ 13.5 $ 13.6 $ 16.3
Controllable Expenses and Other 25.3 24.4 34.2 29.7 26.8 34.0
------------- ------------- ------------- ------------- ------------- -------------
TOTAL CURRENT EXPENSES 37.3 35.5 50.0 43.2 40.4 50.3
Deferred Acquisition Costs (18.9) (16.9) (24.7) (19.6) (16.1) (25.4)
------------- ------------- ------------- ------------- ------------- -------------
OPERATING EXPENSES $ 18.4 $ 18.6 $ 25.3 $ 23.6 $ 24.3 $ 24.9
============= ============= ============= ============= ============= =============
===================================================================================================================================
FUNDS UNDER MANAGEMENT (FUM)
Deposits, excluding Private Placement $ 106.8 $ 107.6 $ 153.8 $ 149.0 $ 171.4 $ 185.4
Surrenders, excluding Private Placement (86.2) (78.7) (102.1) (85.9) (84.4) (60.6)
------------- ------------- ------------- ------------- ------------- -------------
Net Sales, excluding Private
Placement 20.6 28.9 51.7 63.1 87.0 124.8
Private Placement, Net Sales 57.6 26.0 50.4 1.0 36.7 45.3
------------- ------------- ------------- ------------- ------------- -------------
TOTAL NET SALES 78.2 54.9 102.1 64.1 123.7 170.1
Deaths (4.0) (18.2) (19.6) (4.7) (3.6) (2.2)
Interest Credited (355.7) 196.7 195.3 259.9 141.5 170.0
Acquisitions (Dispositions) 11.2 218.8
Fees (25.5) (23.6) (33.5) (30.4) (30.3) (31.0)
Cost of Insurance (62.8) (58.7) (79.9) (75.8) (74.6) (72.4)
------------- ------------- ------------- ------------- ------------- -------------
Change in FUM (358.6) 151.1 383.2 213.1 156.7 234.5
Beginning Balance 2,696.1 2,312.9 2,312.9 2,099.8 1,943.1 1,708.6
------------- ------------- ------------- ------------- ------------- -------------
ENDING FUND BALANCE $ 2,337.5 $ 2,464.0 $ 2,696.1 $ 2,312.9 $ 2,099.8 $ 1,943.1
============= ============= ============= ============= ============= =============
Gross Life Insurance In Force (1) $ 24,760.0 $ 24,138.8 $ 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
Third Quarter 2008 (unaudited)
($ in millions)
Quarters ended
2007 2008
------------------------------------------------------ ----------------------------------------
March June September December March June September
------------ ------------ ------------ ------------ ------------ ------------ ------------
PRE-TAX INCOME (2)
Fees $ 8.0 $ 8.1 $ 7.8 $ 8.5 $ 8.3 $ 9.2 $ 8.3
Cost of Insurance (COI) 20.3 20.1 20.2 21.3 21.3 21.6 21.5
Interest Earned 2.4 2.4 2.6 2.5 2.4 2.7 2.2
Surrender Charges 2.1 1.4 1.9 1.2 1.6 1.4 0.6
------------ ------------ ------------ ------------ ------------ ------------ ------------
TOTAL REVENUES 32.8 32.0 32.5 33.5 33.6 34.9 32.6
------------ ------------ ------------ ------------ ------------ ------------ ------------
Net Death and Disability Benefits 8.6 6.0 6.7 7.6 11.6 7.5 11.6
Interest Credited 1.4 1.4 1.4 1.6 1.6 1.7 1.7
DAC Amortized 7.6 6.7 7.4 7.1 6.8 10.2 7.8
Operating Expenses 6.3 7.1 5.2 6.7 6.5 6.2 5.7
------------ ------------ ------------ ------------ ------------ ------------ ------------
TOTAL EXPENSES 23.9 21.2 20.7 23.0 26.5 25.6 26.8
------------ ------------ ------------ ------------ ------------ ------------ ------------
OPERATING INCOME BEFORE TAX $ 8.9 $ 10.8 $ 11.8 $ 10.5 $ 7.1 $ 9.3 $ 5.8
============ ============ ============ ============ ============ ============ ============
===================================================================================================================================
OPERATING EXPENSES
Commissions and Concessions $ 4.3 $ 3.5 $ 3.3 $ 4.7 $ 4.4 $ 3.6 $ 4.0
Controllable Expenses and Other 9.3 8.5 6.6 9.8 8.0 8.4 8.9
------------ ------------ ------------ ------------ ------------ ------------ ------------
TOTAL CURRENT EXPENSES 13.6 12.0 9.9 14.5 12.4 12.0 12.9
Deferred Acquisition Costs (7.3) (4.9) (4.7) (7.8) (5.9) (5.8) (7.2)
------------ ------------ ------------ ------------ ------------ ------------ ------------
OPERATING EXPENSES $ 6.3 $ 7.1 $ 5.2 $ 6.7 $ 6.5 $ 6.2 $ 5.7
============ ============ ============ ============ ============ ============ ============
===================================================================================================================================
FUNDS UNDER MANAGEMENT (FUM)
Deposits, excluding Private
Placement $ 40.2 $ 34.7 $ 32.7 $ 46.2 $ 38.1 $ 34.7 $ 34.0
Surrenders, excluding Private
Placement (24.1) (26.1) (28.5) (23.4) (24.2) (34.8) (27.2)
------------ ------------ ------------ ------------ ------------ ------------ ------------
Net Sales, excluding Private
Placement 16.1 8.6 4.2 22.8 13.9 (0.1) 6.8
Private Placement, Net Sales 8.8 10.8 6.4 24.4 3.8 41.9 11.9
------------ ------------ ------------ ------------ ------------ ------------ ------------
TOTAL NET SALES 24.9 19.4 10.6 47.2 17.7 41.8 18.7
Deaths (3.3) (6.6) (8.3) (1.4) (1.0) (1.4) (1.6)
Interest Credited 58.1 112.7 25.9 (1.4) (116.9) 11.3 (250.1)
Acquisitions (Dispositions) 218.8 11.2
Fees (8.1) (8.4) (7.1) (9.9) (8.8) (9.2) (7.5)
Cost of Insurance (19.8) (19.6) (19.3) (21.2) (20.8) (21.1) (20.9)
------------ ------------ ------------ ------------ ------------ ------------ ------------
Change in FUM 51.8 97.5 1.8 232.1 (129.8) 21.4 (250.2)
Beginning Balance 2,312.9 2,364.7 2,462.2 2,464.0 2,696.1 2,566.3 2,587.7
------------ ------------ ------------ ------------ ------------ ------------ ------------
ENDING FUND BALANCE $ 2,364.7 $ 2,462.2 $ 2,464.0 $ 2,696.1 $ 2,566.3 $ 2,587.7 $ 2,337.5
============ ============ ============ ============ ============ ============ ============
Gross Life Insurance In Force (1) $ 24,320.5 $ 24,171.0 $ 24,138.8 $ 24,714.2 $ 24,796.6 $ 24,845.0 $ 24,760.0
============ ============ ============ ============ ============ ============ ============
(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
Third Quarter 2008 (unaudited)
($ in millions)
YTD September December 31,
---------------------------- ----------------------------------------------------------
2008 2007 2007 2006 2005 2004
------------- ------------- ------------- ------------- ------------- -------------
PRE-TAX INCOME (1)
Fees $ 32.4 $ 23.4 $ 36.2 $ 27.8 $ 17.9 $ 19.1
Cost of Insurance (COI) 258.7 181.3 258.9 184.9 109.9 90.7
Interest Earned 90.2 92.5 123.9 116.5 108.7 100.4
Surrender Charges 3.6 2.2 3.5 3.7 3.2 3.2
------------- ------------- ------------- ------------- ------------- -------------
TOTAL REVENUES 384.9 299.4 422.5 332.9 239.7 213.4
------------- ------------- ------------- ------------- ------------- -------------
Net Death and Disability Benefits 120.2 95.1 138.7 103.5 61.8 58.4
Interest Credited 72.8 63.4 86.4 79.6 74.5 74.6
DAC Amortized 96.1 60.3 87.0 59.6 17.9 20.3
Operating Expenses 55.3 42.4 61.4 45.8 37.6 25.7
------------- ------------- ------------- ------------- ------------- -------------
TOTAL EXPENSES 344.4 261.2 373.5 288.5 191.8 179.0
------------- ------------- ------------- ------------- ------------- -------------
OPERATING INCOME BEFORE TAX $ 40.5 $ 38.2 $ 49.0 $ 44.4 $ 47.9 $ 34.4
============= ============= ============= ============= ============= =============
===================================================================================================================================
OPERATING EXPENSES
Commissions and Concessions $ 163.2 $ 92.5 $ 157.9 $ 104.9 $ 51.1 $ 24.9
Controllable Expenses and Other 145.0 154.3 257.4 176.1 96.5 64.3
------------- ------------- ------------- ------------- ------------- -------------
TOTAL CURRENT EXPENSES 308.2 246.8 415.3 281.0 147.6 89.2
Deferred Acquisition Costs (252.9) (204.4) (353.9) (235.2) (110.0) (63.5)
------------- ------------- ------------- ------------- ------------- -------------
OPERATING EXPENSES $ 55.3 $ 42.4 $ 61.4 $ 45.8 $ 37.6 $ 25.7
============= ============= ============= ============= ============= =============
===================================================================================================================================
FUNDS UNDER MANAGEMENT (FUM)
Deposits $ 462.4 $ 338.9 $ 540.9 $ 417.1 $ 297.8 $ 229.4
Surrenders (63.4) (57.4) (77.0) (84.7) (94.1) (126.2)
------------- ------------- ------------- ------------- ------------- -------------
NET SALES 399.0 281.5 463.9 332.4 203.7 103.2
Deaths (20.1) (17.2) (22.9) (20.5) (22.3) (16.9)
Interest Credited 72.8 63.3 86.3 79.6 78.7 74.6
Fees (41.3) (29.9) (48.6) (36.6) (26.8) (23.5)
Cost of Insurance (258.8) (181.3) (258.9) (184.9) (109.9) (90.7)
------------- ------------- ------------- ------------- ------------- -------------
Change in FUM 151.6 116.4 219.8 170.0 123.4 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 $ 2,275.5 $ 2,020.5 $ 2,123.9 $ 1,904.1 $ 1,734.1 $ 1,610.7
============= ============= ============= ============= ============= =============
Gross Life Insurance In Force $ 32,610.0 $ 24,422.2 $ 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
Third Quarter 2008 (unaudited)
($ in millions)
Quarters ended 2007 2008
---------------------------------------------------------- ------------------------------------------
March June September December March June September
------------- ------------- ------------- ------------- ------------- ------------- ------------
PRE-TAX INCOME (1)
Fees $ 6.4 $ 7.4 $ 9.6 $ 12.8 $ 11.3 $ 10.6 $ 10.5
Cost of Insurance (COI) 56.1 59.5 65.7 77.6 81.7 84.8 92.2
Interest Earned 30.7 30.0 31.8 31.4 30.1 30.2 29.9
Surrender Charges 0.7 0.8 0.7 1.3 1.3 1.2 1.1
------------- ------------- ------------- ------------- ------------- ------------- ------------
TOTAL REVENUES 93.9 97.7 107.8 123.1 124.4 126.8 133.7
------------- ------------- ------------- ------------- ------------- ------------- ------------
Net Death and Disability
Benefits 30.1 25.1 39.9 43.6 44.9 39.0 36.3
Interest Credited 21.0 21.0 21.4 23.0 23.7 24.4 24.7
DAC Amortized 16.1 22.4 21.8 26.7 25.2 31.3 39.6
Operating Expenses 12.2 14.9 15.3 19.0 21.4 19.0 14.9
------------- ------------- ------------- ------------- ------------- ------------- ------------
TOTAL EXPENSES 79.4 83.4 98.4 112.3 115.2 113.7 115.5
------------- ------------- ------------- ------------- ------------- ------------- ------------
OPERATING INCOME
BEFORE TAX $ 14.5 $ 14.3 $ 9.4 $ 10.8 $ 9.2 $ 13.1 $ 18.2
============= ============= ============= ============= ============= ============= ============
===================================================================================================================================
OPERATING EXPENSES
Commissions and
Concessions $ 23.5 $ 26.6 $ 42.4 $ 65.4 $ 53.0 $ 63.2 $ 47.0
Controllable Expenses
and Other 38.9 48.1 67.3 103.1 84.6 34.7 25.7
------------- ------------- ------------- ------------- ------------- ------------- ------------
TOTAL CURRENT EXPENSES 62.4 74.7 109.7 168.5 137.6 97.9 72.7
Deferred Acquisition
Costs (50.2) (59.8) (94.4) (149.5) (116.2) (78.9) (57.8)
------------- ------------- ------------- ------------- ------------- ------------- ------------
OPERATING EXPENSES $ 12.2 $ 14.9 $ 15.3 $ 19.0 $ 21.4 $ 19.0 $ 14.9
============= ============= ============= ============= ============= ============= ============
===================================================================================================================================
FUNDS UNDER MANAGEMENT (FUM)
Deposits $ 92.3 $ 100.2 $ 146.4 $ 202.0 $ 179.1 $ 149.7 $ 133.6
Surrenders (21.9) (19.3) (16.2) (19.6) (19.7) (23.9) (19.8)
------------- ------------- ------------- ------------- ------------- ------------- ------------
NET SALES 70.4 80.9 130.2 182.4 159.4 125.8 113.8
Deaths (8.3) (4.2) (4.7) (5.7) (9.0) (8.3) (2.8)
Interest Credited 21.0 21.0 21.3 23.0 23.8 24.3 24.7
Fees (8.2) (8.9) (12.8) (18.7) (16.4) (13.4) (11.5)
Cost of Insurance (56.1) (59.5) (65.7) (77.6) (81.7) (84.8) (92.3)
------------- ------------- ------------- ------------- ------------- ------------- ------------
Change in FUM 18.8 29.3 68.3 103.4 76.1 43.6 31.9
Beginning Balance 1,904.1 1,922.9 1,952.2 2,020.5 2,123.9 2,200.0 2,243.6
------------- ------------- ------------- ------------- ------------- ------------- ------------
ENDING FUND BALANCE $ 1,922.9 $ 1,952.2 $ 2,020.5 $ 2,123.9 $ 2,200.0 $ 2,243.6 $ 2,275.5
============= ============= ============= ============= ============= ============= ============
Gross Life Insurance
In Force $ 21,311.6 $ 22,575.0 $ 24,422.2 $ 27,358.2 $ 29,774.2 $ 31,298.0 $ 32,610.0
============= ============= ============= ============= ============= ============= ============
(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
Third Quarter 2008 (unaudited)
($ in millions)
YTD September December 31,
--------------------------- -------------------------------------------------------
2008 2007 2007 2006 2005 2004
------------- ------------- ------------- ------------- ------------- -------------
LIFE INSURANCE SALES
WHOLESALER CHANNEL
Variable Universal Life $ 19.0 $ 16.2 $ 21.9 $ 16.7 $ 16.1 $ 18.2
Universal Life/Interest Sensitive 203.2 180.3 308.2 221.9 104.4 47.5
Term Life 15.7 15.1 22.2 20.3 16.4 15.3
------------- ------------- ------------- ------------- ------------- -------------
Life Insurance Annualized Premium (1) 237.9 211.6 352.3 258.9 136.9 81.0
============= ============= ============= ============= ============= =============
Variable Universal Life 5.2 5.2 8.0 8.6 6.4 10.8
Universal Life/Interest Sensitive 37.2 39.0 65.0 61.8 49.2 53.2
------------- ------------- ------------- ------------- ------------- -------------
Life Insurance Single Premium 42.4 44.2 73.0 70.4 55.6 64.0
============= ============= ============= ============= ============= =============
Variable Universal Life 24.2 21.4 29.9 25.3 22.5 29.0
Universal Life/Interest Sensitive 240.4 219.3 373.2 283.7 153.6 100.7
Term Life 15.7 15.1 22.2 20.3 16.4 15.3
------------- ------------- ------------- ------------- ------------- -------------
Total Wholesaler Life Insurance Premium (2) $ 280.3 $ 255.8 $ 425.3 $ 329.3 $ 192.5 $ 145.0
============= ============= ============= ============= ============= =============
Gross Life Insurance in Force $ 165,118.0 $ 151,282.0 $ 156,889.0 $ 144,139.0 $ 134,780.0 $ 127,466.0
============= ============= ============= ============= ============= =============
Average face amount for life
insurance sales $ 1.0 $ 1.2 $ 1.2 $ 1.2 $ 1.1 $ 1.0
============= ============= ============= ============= ============= =============
PRIVATE PLACEMENT LIFE AND
ANNUITY DEPOSITS
Variable Universal Life (annualized
and single) $ 82.2 $ 32.2 $ 59.2 $ 33.5 $ 46.5 $ 60.1
Annuity 174.5 248.4 399.7 1,020.2 773.8 152.6
------------- ------------- ------------- ------------- ------------- -------------
Total Private Placement Life and
Annuity Deposits $ 256.7 $ 280.6 $ 458.9 $ 1,053.7 $ 820.3 $ 212.7
============= ============= ============= ============= ============= =============
PRIVATE PLACEMENT FUNDS UNDER
MANAGEMENT (FUM) $ 5,091.7 $ 4,561.7 $ 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
Third Quarter 2008 (unaudited)
($ in millions)
Quarters ended 2007 2008
---------------------------------------------------------- ------------------------------------------
March June September December March June September
------------- ------------- ------------- ------------- ------------- ------------- ------------
LIFE INSURANCE SALES
WHOLESALER CHANNEL
Variable Universal Life $ 6.4 $ 4.7 $ 5.1 $ 5.7 $ 6.8 $ 5.5 $ 6.7
Universal Life/Interest
Sensitive 40.2 53.4 86.7 127.9 101.4 58.3 43.5
Term Life 5.5 5.2 4.4 7.1 5.0 5.1 5.6
------------- ------------- ------------- ------------- ------------- ------------- ------------
Life Insurance
Annualized Premium (1) 52.1 63.3 96.2 140.7 113.2 68.9 55.8
============= ============= ============= ============= ============= ============= ============
Variable Universal Life 2.4 1.6 1.2 2.8 1.1 1.4 2.7
Universal Life/Interest
Sensitive 7.8 12.3 18.9 26.0 11.2 11.5 14.5
------------- ------------- ------------- ------------- ------------- ------------- ------------
Life Insurance
Single Premium 10.2 13.9 20.1 28.8 12.3 12.9 17.2
============= ============= ============= ============= ============= ============= ============
Variable Universal Life 8.8 6.3 6.3 8.5 7.9 6.9 9.4
Universal Life/Interest
Sensitive 48.0 65.7 105.6 153.9 112.6 69.8 58.0
Term Life 5.5 5.2 4.4 7.1 5.0 5.1 5.6
------------- ------------- ------------- ------------- ------------- ------------- ------------
Total Wholesaler Life
Insurance Premium (2) $ 62.3 $ 77.2 $ 116.3 $ 169.5 $ 125.5 $ 81.8 $ 73.0
============= ============= ============= ============= ============= ============= ============
Gross Life Insurance
in Force $ 146,355 $ 148,572 $ 151,282 $ 156,889 $ 160,354 $ 162,872 $ 165,118
============= ============= ============= ============= ============= ============= ============
Average face amount for
life insurance sales $ 1.2 $ 1.1 $ 1.2 $ 1.2 $ 1.3 $ 1.2 $ 1.0
============= ============= ============= ============= ============= ============= ============
PRIVATE PLACEMENT LIFE
AND ANNUITY DEPOSITS
Variable Universal Life
(annualized and single) $ 11.4 $ 13.2 $ 7.6 $ 27.0 $ 13.8 $ 56.2 $ 12.2
Annuity 54.2 146.7 47.5 151.3 27.8 52.6 94.1
------------- ------------- ------------- ------------- ------------- ------------- ------------
Total Private Placement
Life and Annuity Deposits $ 65.6 $ 159.9 $ 55.1 $ 178.3 $ 41.6 $ 108.8 $ 106.3
============= ============= ============= ============= ============= ============= ============
PRIVATE PLACEMENT FUNDS
UNDER MANAGEMENT (FUM) $ 4,185.0 $ 4,539.2 $ 4,561.7 $ 5,039.2 $ 5,016.0 $ 5,259.4 $ 5,091.7
============= ============= ============= ============= ============= ============= ============
(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
Third Quarter 2008 (unaudited)
($ in millions)
YTD September December 31,
------------------------ ----------------------------------------------------
2008 2007 2007 2006 2005 2004
---------- ---------- ---------- ---------- ---------- ----------
PRE-TAX INCOME (2)
Fees $ 56.1 $ 54.7 $ 74.7 $ 66.9 $ 65.4 $ 63.8
Surrender Charges 3.7 4.4 5.6 6.3 7.0 5.8
Interest earned on GIA and Required Interest 54.9 78.1 100.7 131.7 165.1 158.0
---------- ---------- ---------- ---------- ---------- ----------
TOTAL REVENUES 114.7 137.2 181.0 204.9 237.5 227.6
---------- ---------- ---------- ---------- ---------- ----------
Mortality Cost 9.5 4.3 (2.0) 5.8 6.6 8.9
DAC Amortized 47.5 34.2 55.7 66.6 62.6 35.7
Interest Credited 39.0 49.6 64.8 87.4 112.1 123.2
Operating Expenses 31.2 31.7 42.0 41.1 44.2 47.1
---------- ---------- ---------- ---------- ---------- ----------
TOTAL EXPENSES 127.2 119.8 160.5 200.9 225.5 214.9
---------- ---------- ---------- ---------- ---------- ----------
OPERATING INCOME (LOSS) BEFORE TAX $ (12.5) $ 17.4 $ 20.5 $ 4.0 $ 12.0 $ 12.7
========== ========== ========== ========== ========== ==========
===================================================================================================================================
OPERATING EXPENSES
Commissions and Concessions $ 37.5 $ 34.5 $ 48.9 $ 39.7 $ 38.2 $ 42.6
Controllable Expenses and Other 34.7 36.9 48.9 40.8 37.9 48.2
---------- ---------- ---------- ---------- ---------- ----------
TOTAL CURRENT EXPENSES 72.2 71.4 97.8 80.5 76.1 90.8
Deferred Acquisition Costs (41.0) (39.7) (55.8) (39.4) (31.9) (43.7)
---------- ---------- ---------- ---------- ---------- ----------
OPERATING EXPENSES $ 31.2 $ 31.7 $ 42.0 $ 41.1 $ 44.2 $ 47.1
========== ========== ========== ========== ========== ==========
===================================================================================================================================
FUNDS UNDER MANAGEMENT (FUM)
Deposits, excluding Discontinued Products
and Private Placement $ 499.5 $ 430.6 $ 627.0 $ 414.7 $ 312.9 $ 423.3
Surrenders, excluding Discontinued Products
and Private Placement (390.0) (460.0) (609.2) (690.2) (584.4) (490.8)
---------- ---------- ---------- ---------- ---------- ----------
Net Sales, excluding Discontinued Products
and Private Placement 109.5 (29.4) 17.8 (275.5) (271.5) (67.5)
Net Sales, Private Placement (70.5) 111.8 228.4 807.4 587.9 121.9
Net Sales, Discontinued Products (240.5) (276.3) (327.7) (684.1) (383.8) (186.3)
---------- ---------- ---------- ---------- ---------- ----------
TOTAL NET SALES (201.5) (193.9) (81.5) (152.2) (67.4) (131.9)
Deaths (61.0) (61.6) (77.3) (87.0) (80.2) (81.6)
Interest Credited (485.6) 693.7 783.3 949.6 545.8 628.2
Fees (56.4) (52.4) (72.6) (70.9) (63.0) (59.8)
---------- ---------- ---------- ---------- ---------- ----------
Change in FUM (804.5) 385.8 551.9 639.5 335.2 354.9
Beginning Balance 9,229.5 8,677.6 8,677.6 8,038.1 7,702.9 7,348.0
---------- ---------- ---------- ---------- ---------- ----------
ENDING FUND BALANCE $ 8,425.0 $ 9,063.4 $ 9,229.5 $ 8,677.6 $ 8,038.1 $ 7,702.9
========== ========== ========== ========== ========== ==========
VA Funds in Guaranteed Interest Accounts (1) $ 715.1 $ 832.2 $ 809.3 $ 1,030.8 $ 1,553.8 $ 1,939.1
========== ========== ========== ========== ========== ==========
Private Placements Funds (1) $ 4,047.7 $ 3,744.1 $ 3,963.2 $ 3,302.8 $ 2,099.3 $ 1,297.9
========== ========== ========== ========== ========== ==========
Discontinued Funds (1) $ 698.4 $ 993.8 $ 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
Third Quarter 2008 (unaudited)
($ in millions)
Quarters ended 2007 2008
---------------------------------------------------------- ------------------------------------------
March June September December March June September
------------- ------------- ------------- ------------- ------------- ------------- ------------
PRE-TAX INCOME (2)
Fees $ 17.3 $ 18.6 $ 18.8 $ 20.0 $ 18.4 $ 19.7 $ 18.0
Surrender Charges 1.6 1.4 1.4 1.2 1.3 1.3 1.1
Interest earned on GIA and
Required Interest 27.1 26.4 24.6 22.6 19.7 18.2 17.0
------------- ------------- ------------- ------------- ------------- ------------- ------------
TOTAL REVENUES 46.0 46.4 44.8 43.8 39.4 39.2 36.1
------------- ------------- ------------- ------------- ------------- ------------- ------------
Mortality Cost (1.0) 2.8 2.5 (6.3) 2.7 2.5 4.3
DAC Amortized 12.3 9.6 12.3 21.5 16.0 12.6 18.9
Interest Credited 17.3 17.2 15.1 15.2 13.7 13.1 12.2
Operating Expenses 10.5 11.6 9.6 10.3 11.1 9.9 10.2
------------- ------------- ------------- ------------- ------------- ------------- ------------
TOTAL EXPENSES 39.1 41.2 39.5 40.7 43.5 38.1 45.6
------------- ------------- ------------- ------------- ------------- ------------- ------------
OPERATING INCOME (LOSS)
BEFORE TAX $ 6.9 $ 5.2 $ 5.3 $ 3.1 $ (4.1) $ 1.1 $ (9.5)
============= ============= ============= ============= ============= ============= ============
===================================================================================================================================
OPERATING EXPENSES
Commissions and Concessions $ 10.9 $ 12.3 $ 11.3 $ 14.4 $ 12.9 $ 13.2 $ 11.4
Controllable Expenses
and Other 11.9 13.8 11.2 12.0 12.2 11.6 10.9
------------- ------------- ------------- ------------- ------------- ------------- ------------
TOTAL CURRENT EXPENSES 22.8 26.1 22.5 26.4 25.1 24.8 22.3
Deferred Acquisition Costs (12.3) (14.5) (12.9) (16.1) (14.0) (14.9) (12.1)
------------- ------------- ------------- ------------- ------------- ------------- ------------
OPERATING EXPENSES $ 10.5 $ 11.6 $ 9.6 $ 10.3 $ 11.1 $ 9.9 $ 10.2
============= ============= ============= ============= ============= ============= ============
===================================================================================================================================
FUNDS UNDER MANAGEMENT (FUM)
Deposits, excluding
Discontinued Products
and Private Placement $ 131.3 $ 158.6 $ 140.7 $ 196.4 $ 169.1 $ 176.0 $ 154.4
Surrenders, excluding
Discontinued Products
and Private Placement (159.0) (149.5) (151.5) (149.2) (136.1) (134.2) (119.7)
------------- ------------- ------------- ------------- ------------- ------------- ------------
Net Sales, excluding
Discontinued
Products and
Private Placement (27.7) 9.1 (10.8) 47.2 33.0 41.8 34.7
Net Sales, Private
Placement 29.0 124.2 (41.4) 116.6 (79.0) (10.2) 18.7
Net Sales,
Discontinued
Products (73.9) (120.8) (81.6) (51.4) (116.1) (54.5) (69.9)
------------- ------------- ------------- ------------- ------------- ------------- ------------
TOTAL NET SALES (72.6) 12.5 (133.8) 112.4 (162.1) (22.9) (16.5)
Deaths (21.2) (22.8) (17.6) (15.7) (23.0) (17.5) (20.5)
Interest Credited 169.6 372.5 151.6 89.6 (215.8) 214.6 (484.4)
Fees (17.8) (17.6) (17.0) (20.2) (18.6) (20.0) (17.8)
------------- ------------- ------------- ------------- ------------- ------------- ------------
Change in FUM 58.0 344.6 (16.8) 166.1 (419.5) 154.2 (539.2)
Beginning Balance 8,677.6 8,735.6 9,080.2 9,063.4 9,229.5 8,810.0 8,964.2
------------- ------------- ------------- ------------- ------------- ------------- ------------
ENDING FUND BALANCE $ 8,735.6 $ 9,080.2 $ 9,063.4 $ 9,229.5 $ 8,810.0 $ 8,964.2 $ 8,425.0
============= ============= ============= ============= ============= ============= ============
VA Funds in Guaranteed
Interest Accounts (1) $ 955.9 $ 891.7 $ 832.2 $ 809.3 $ 794.8 $ 770.5 $ 715.1
============= ============= ============= ============= ============= ============= ============
Private Placements Funds (1) $ 3,403.2 $ 3,714.7 $ 3,744.0 $ 3,963.2 $ 3,935.2 $ 4,131.6 $ 4,047.7
============= ============= ============= ============= ============= ============= ============
Discontinued Funds (1) $ 1,190.0 $ 1,072.0 $ 993.8 $ 946.6 $ 827.3 $ 772.9 $ 698.4
============= ============= ============= ============= ============= ============= ============
(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
Third Quarter 2008 (unaudited)
($ in millions)
YTD September December 31,
------------------------ ----------------------------------------------------
2008 2007 2007 2006 2005 2004
---------- ---------- ---------- ---------- ---------- ----------
DEFERRED ACQUISITION COSTS (1)
Variable Universal Life $ 361.3 $ 366.5 $ 367.2 $ 371.3 $ 353.0 $ 332.5
Universal Life 957.5 673.7 796.7 529.8 354.7 262.0
Variable Annuities 287.0 286.1 282.6 275.0 281.3 299.0
Fixed Annuities 8.0 15.4 12.8 20.3 38.8 46.0
Participating 583.4 565.3 566.9 559.0 544.2 577.0
Offset for Unrealized Investment (Gains) Losses 263.3 48.7 63.7 0.3 (16.0) (86.6)
---------- ---------- ---------- ---------- ---------- ----------
Total $ 2,460.5 $ 1,955.7 $ 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 $ 634.6 $ 189.3 $ 202.4 $ 238.8 $ 335.5 $ 441.1
Death Benefit in Excess of Fund Value, Net
of Reinsurance 362.6 37.2 46.6 51.4 82.1 123.5
Statutory Reserve, Net of Reinsurance 20.6 12.6 12.9 13.2 13.8 15.0
VARIABLE ANNUITY GUARANTEED INCOME BENEFITS
Account Balance $ 570.1 $ 695.3 $ 716.8 $ 620.1 $ 465.8 $ 344.8
Statutory Reserve 13.2 6.2 6.9 4.4 2.2 0.8
VARIABLE ANNUITY GUARANTEED ACCUMULATION BENEFITS
Account Balance $ 404.4 $ 324.2 $ 389.8 $ 210.6 $ 72.6
Statutory Reserve 10.8 1.8 2.3 0.8 0.3
VARIABLE ANNUITY GUARANTEED WITHDRAWAL BENEFITS
Account Balance $ 394.1 $ 103.7 $ 214.6 $ 30.1 $ 1.1
Statutory Reserve 3.4 0.4 0.7 0.1
VARIABLE ANNUITY GUARANTEED PAYOUT ANNUITY FLOOR
Account Balance $ 30.3 $ 46.6 $ 43.4 $ 49.8 $ 49.9
Statutory Reserve 6.2 2.0 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
Third Quarter 2008 (unaudited)
($ in millions)
Quarters ended 2007 2008
---------------------------------------------------------- ------------------------------------------
March June September December March June September
------------- ------------- ------------- ------------- ------------- ------------- ------------
DEFERRED ACQUISITION
COSTS (1)
Variable Universal Life $ 371.0 $ 369.2 $ 366.5 $ 367.2 $ 366.3 $ 362.0 $ 361.3
Universal Life 563.9 601.2 673.7 796.7 889.6 938.4 957.5
Variable Annuities 275.9 283.3 286.1 282.6 285.8 290.6 287.0
Fixed Annuities 19.4 17.3 15.4 12.8 10.1 9.0 8.0
Participating 561.8 564.3 565.3 566.9 576.7 578.8 583.4
Offset for Unrealized
Investment Gains and
Losses (5.1) 31.9 48.7 63.7 107.4 172.2 263.3
------------- ------------- ------------- ------------- ------------- ------------- ------------
Total $ 1,786.9 $ 1,867.2 $ 1,955.7 $ 2,089.9 $ 2,235.9 $ 2,351.0 $ 2,460.5
============= ============= ============= ============= ============= ============= ============
===================================================================================================================================
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 $ 634.6
Death Benefit in Excess of
Fund Value, Net of
Reinsurance 48.3 40.7 37.2 46.6 135.9 146.1 362.6
Statutory Reserve, Net
of Reinsurance 13.2 12.9 12.6 12.9 14.6 14.8 20.6
VARIABLE ANNUITY GUARANTEED
INCOME BENEFITS
Account Balance $ 654.5 $ 702.4 $ 695.3 $ 716.8 $ 659.7 $ 648.8 $ 570.1
Statutory Reserve 5.0 5.6 6.2 6.9 7.7 8.5 13.2
VARIABLE ANNUITY GUARANTEED
ACCUMULATION BENEFITS
Account Balance $ 246.9 $ 302.5 $ 324.2 $ 389.8 $ 389.4 $ 430.3 $ 404.4
Statutory Reserve 1.1 1.5 1.8 2.3 2.8 3.3 10.8
VARIABLE ANNUITY GUARANTEED
WITHDRAWAL BENEFITS
Account Balance $ 49.1 $ 81.6 $ 103.7 $ 214.6 $ 282.9 $ 372.9 $ 394.1
Statutory Reserve 0.1 0.2 0.4 0.7 1.2 1.9 3.4
VARIABLE ANNUITY GUARANTEED
PAYOUT ANNUITY FLOOR
Account Balance $ 47.5 $ 47.6 $ 46.6 $ 43.4 $ 37.6 $ 34.9 $ 30.3
Statutory Reserve 2.2 1.9 2.0 2.2 3.8 3.7 6.2
(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
Third Quarter 2008 (unaudited)
($ in millions)
YTD September December 31,
------------------------ ----------------------------------------------------
2008 2007 2007 2006 2005 2004
---------- ---------- ---------- ---------- ---------- ----------
OPERATING INCOME
Investment Management Fees $ 93.0 $ 110.9 $ 147.4 $ 154.1 $ 182.1 $ 219.0
Mutual Funds - Ancillary Fees 39.4 44.7 59.8 49.4 41.1 38.8
Other Revenue 1.8 5.9 7.4 5.3 4.9 7.2
---------- ---------- ---------- ---------- ---------- ----------
Total Revenues 134.2 161.5 214.6 208.8 228.1 265.0
---------- ---------- ---------- ---------- ---------- ----------
Employment Expenses 57.9 65.2 85.0 89.4 103.9 132.6
Distribution & Admin Expenses 33.6 37.2 50.1 41.3 35.8 32.9
Other Operating Expenses Direct (1) 22.5 32.6 43.8 43.8 50.6 53.0
Other Operating Expenses Indirect (1) 11.9
Amortization of Intangibles 22.4 22.6 30.4 32.0 33.2 33.8
Intangible Asset Impairments 432.2 32.5 10.6
---------- ---------- ---------- ---------- ---------- ----------
Total Operating Expenses 580.5 157.6 209.3 239.0 234.1 252.3
---------- ---------- ---------- ---------- ---------- ----------
Management Income (Loss) (446.3) 3.9 5.3 30.2) (6.0) 12.7
Other Income - Net 1.3 1.6 2.1 1.6 2.2 1.7
Minority Interest (6.7) (14.3)
---------- ---------- ---------- ---------- ---------- ----------
Operating Income (Loss), before income taxes (445.0) 5.5 7.4 (28.6) (10.5) 0.1
Applicable Income Taxes (Benefit) (98.0) 3.1 3.3 (10.7) (4.7) 2.3
---------- ---------- ---------- ---------- ---------- ----------
OPERATING INCOME (LOSS) (347.0) 2.4 4.1 (17.9) (5.8) (2.2)
Net Realized Investment Gains (Losses) (1.5) 0.1 (0.5) 0.8 (0.3) 1.8
Management Restructuring and Early Retirement Costs (8.7) (8.3) (1.2)
---------- ---------- ---------- ---------- ---------- ----------
NET INCOME (LOSS) $ (348.5) $ 2.5 $ 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 $ (445.0) $ 5.5 $ 7.4 $ (28.6) $ (10.5) $ 0.1
Adjustments for:
Intangible asset amortization
and impairments 454.6 22.6 30.4 64.5 43.8 33.8
Depreciation 0.5 0.9 1.1 1.0 1.7 2.2
---------- ---------- ---------- ---------- ---------- ----------
EBITDA $ 10.1 $ 29.0 $ 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
Third Quarter 2008 (unaudited)
($ in millions)
Quarters ended 2007 2008
---------------------------------------------------------- ------------------------------------------
March June September December March June September
------------- ------------- ------------- ------------- ------------- ------------- ------------
OPERATING INCOME
Investment Management Fees $ 36.9 $ 37.1 $ 36.9 $ 36.5 $ 32.8 $ 30.9 $ 29.3
Mutual Funds -
Ancillary Fees 14.3 15.3 15.1 15.1 13.7 13.5 12.2
Other Revenue 2.2 1.8 1.9 1.5 0.9 0.5 0.4
------------- ------------- ------------- ------------- ------------- ------------- ------------
Total Revenues 53.4 54.2 53.9 53.1 47.4 44.9 41.9
------------- ------------- ------------- ------------- ------------- ------------- ------------
Employment Expenses 24.0 20.4 20.8 19.8 20.3 19.0 18.6
Distribution &
Admin Expenses 11.6 12.7 12.9 12.9 11.4 11.5 10.7
Other Operating Expenses
Direct (1) 10.1 11.9 10.5 11.3 6.8 8.0 7.7
Other Operating Expenses
Indirect (1) 4.5 3.7 3.7
Amortization of Intangibles 7.6 7.5 7.5 7.8 7.5 7.5 7.4
Intangible Asset Impairments 10.5 421.7
------------- ------------- ------------- ------------- ------------- ------------- ------------
Total Operating Expenses 53.3 52.5 51.7 51.8 61.0 49.7 469.8
------------- ------------- ------------- ------------- ------------- ------------- ------------
Management Income (Loss) 0.1 1.7 2.2 1.3 (13.6) (4.8) (427.9)
Other Income - Net 0.5 0.6 0.4 0.6 0.3 0.8 0.2
------------- ------------- ------------- ------------- ------------- ------------- ------------
Operating Income (Loss),
before income taxes 0.6 2.3 2.6 1.9 (13.3) (4.0) (427.7)
Applicable Income
Taxes (Benefit) 0.9 1.0 1.2 0.2 (4.6) (2.3) (91.1)
------------- ------------- ------------- ------------- ------------- ------------- ------------
OPERATING INCOME (LOSS) (0.3) 1.3 1.4 1.7 (8.7) (1.7) (336.6)
Net Realized Investment
Gains (Losses) 0.1 0.2 (0.3) (0.5) (0.6) (0.4) (0.5)
------------- ------------- ------------- ------------- ------------- ------------- ------------
NET INCOME (LOSS) $ (0.2) $ 1.5 $ 1.2 $ 1.1 $ (9.3) $ (2.1) $ (337.1)
============= ============= ============= ============= ============= ============= ============
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) $ (427.7)
Adjustments for:
Intangible asset
amortization and
impairments 7.6 7.5 7.5 7.8 18.0 7.5 429.1
Depreciation 0.2 0.5 0.2 0.2 0.1 0.2 0.2
------------- ------------- ------------- ------------- ------------- ------------- ------------
EBITDA $ 8.4 $ 10.3 $ 10.3 $ 9.9 $ 4.8 $ 3.7 $ 1.6
============= ============= ============= ============= ============= ============= ============
(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
Third Quarter 2008 (unaudited)
($ in millions)
YTD September December 31,
------------------------- --------------------------------------------------------
2008 2007 2007 2006 2005 2004
----------- ----------- ----------- ------------ ------------ ------------
RETAIL PRODUCTS:
Managed Accounts
- ----------------
Deposits and reinvestments $ 698.3 $ 954.9 $ 1,212.3 $ 1,141.2 $ 1,760.3 $ 2,109.9
Redemptions and withdrawals (1,388.9) (2,041.5) (2,668.6) (4,297.5) (5,722.8) (5,203.0)
----------- ----------- ----------- ------------ ------------ ------------
Net Flows (690.6) (1,086.6) (1,456.3) (3,156.3) (3,962.5) (3,093.1)
Performance (655.0) 264.8 144.4 593.9 (62.6) 950.3
Acquisitions (dispositions) / Other (327.3) (81.5) 71.0 (158.0)
----------- ----------- ----------- ------------ ------------ ------------
Net Change in AUM (1,672.9) (821.8) (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 $ 3,774.8 $ 6,019.3 $ 5,447.7 $ 6,841.1 $ 9,332.5 $ 13,515.6
=========== =========== =========== ============ ============ ============
Mutual Funds
- ------------
Deposits and reinvestments $ 2,049.4 $ 3,031.2 $ 3,596.2 $ 2,567.5 $ 2,030.4 $ 1,673.2
Redemptions and withdrawals (2,441.9) (2,883.7) (3,826.2) (2,828.6) (2,444.0) (2,004.5)
----------- ----------- ----------- ------------ ------------ ------------
Net Flows (392.5) 147.5 (230.0) (261.1) (413.6) (331.3)
Performance (2,290.9) 538.0 338.6 1,522.2 184.1 805.9
Money market funds net change in AUM (1,813.6) 1,789.7 502.5 (1,382.8) (28.4) (28.9)
Acquisitions (dispositions) / Other (73.4) (52.4) (143.9) 9,838.3 120.1 105.7
----------- ----------- ----------- ------------ ------------ ------------
Net Change in AUM (4,570.4) 2,422.8 467.2 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 $ 17,760.6 $ 24,286.6 $ 22,331.0 $ 21,863.8 $ 12,147.2 $ 12,285.0
=========== =========== =========== ============ ============ ============
INSTITUTIONAL PRODUCTS:
Deposits and reinvestments $ 473.0 $ 905.9 $ 1,237.6 $ 1,609.2 $ 5,545.1 $ 2,885.2
Redemptions and withdrawals (5,441.9) (1,554.8) (2,002.1) (3,504.4) (6,599.1) (5,389.2)
----------- ----------- ----------- ------------ ------------ ------------
Net Flows (4,968.9) (648.9) (764.5) (1,895.2) (1,054.0) (2,504.0)
Performance (256.4) 502.8 559.3 1,089.2 367.2 1,140.5
Acquisitions (dispositions) / Other (2) (74.5) (901.0) (895.2) (332.6) (63.3) 234.3
----------- ----------- ----------- ------------ ------------ ------------
Net Change in AUM (5,299.8) (1,047.1) (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 $ 5,894.6 $ 11,247.7 $ 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 (1,225.7) (337.2) (352.3) (1,141.7) (1,157.9) (659.2)
----------- ----------- ----------- ------------ ------------ ------------
Net Flows (1,224.5) 1,952.8 1,937.7 1,281.8 (155.6) (657.5)
Performance (1,091.2) (1,000.9) (2,325.5) 171.5 (258.9) 26.0
----------- ----------- ----------- ------------ ------------ ------------
Net Change in AUM (2,315.7) 951.9 (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 $ 1,259.6 $ 4,915.0 $ 3,575.3 $ 3,963.1 $ 2,509.8 $ 2,924.3
=========== =========== =========== ============ ============ ============
TOTAL:
Deposits and reinvestments $ 3,221.9 $ 7,182.0 $ 8,336.1 $ 7,741.4 $ 10,338.1 $ 6,670.0
Redemptions and withdrawals (10,498.4) (6,817.2) (8,849.2) (11,772.2) (15,923.8) (13,255.9)
----------- ----------- ----------- ------------ ------------ ------------
Net Flows (7,276.5) 364.8 (513.1) (4,030.8) (5,585.7) (6,585.9)
Performance (4,293.5) 304.7 (1,283.2) 3,376.8 229.8 2,922.7
Money market funds net change in AUM (1,813.6) 1,789.7 502.5 (1,382.8) (28.4) (28.9)
Acquisitions (dispositions) / Other (475.2) (953.4) (1,120.6) 9,576.7 (101.2) 340.0
----------- ----------- ----------- ------------ ------------ ------------
Net Change in AUM (13,858.8) 1,505.8 (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 $ 28,689.6 $ 46,468.6 $ 42,548.4 $ 44,962.8 $ 37,422.9 $ 42,908.4
=========== =========== =========== ============ ============ ============
Variable Products Change in AUM (included
in Institutional Products) $ (117.9) $ (902.1) $ (950.3) $ 106.5 $ (342.3) $ 211.6
=========== =========== =========== ============ ============ ============
Money Market balances (1) $ 4,389.9 $ 7,490.8 $ 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
Third Quarter 2008 (unaudited)
($ in millions)
2007 2008
---------------------------------------------------------- ------------------------------------------
March June September December March June September
------------- ------------- ------------- ------------- ------------- ------------- ------------
RETAIL PRODUCTS:
Managed Accounts
- ----------------
Deposits and reinvestments $ 290.4 $ 365.5 $ 299.0 $ 257.4 $ 278.9 $ 235.1 $ 184.3
Redemptions and withdrawals (728.1) (830.6) (482.8) (627.1) (585.6) (487.8) (315.5)
------------- ------------- ------------- ------------- ------------- ------------- ------------
Net Flows (437.7) (465.1) (183.8) (369.7) (306.7) (252.7) (131.2)
Performance 125.6 74.8 64.4 (120.4) (516.3) (43.3) (95.4)
Acquisitions ------------- ------------- ------------- ------------- ------------- ------------- ------------
(dispositions) / Other (81.5) (327.3)
Net Change in AUM (312.1) (390.3) (119.4) (571.6) (823.0) (296.0) (553.9)
Assets under management,
beginning of period 6,841.1 6,529.0 6,138.7 6,019.3 5,447.7 4,624.7 4,328.7
------------- ------------- ------------- ------------- ------------- ------------- ------------
Assets under management,
end of period $ 6,529.0 $ 6,138.7 $ 6,019.3 $ 5,447.7 $ 4,624.7 $ 4,328.7 $ 3,774.8
============= ============= ============= ============= ============= ============= ============
Mutual Funds
- ------------
Deposits and reinvestments $ 1,160.7 $ 1,169.3 $ 701.2 $ 565.0 $ 682.7 $ 686.9 $ 679.8
Redemptions and withdrawals (881.8) (978.9) (1,023.0) (942.5) (900.5) (721.3) (820.1)
------------- ------------- ------------- ------------- ------------- ------------- ------------
Net Flows 278.9 190.4 (321.8) (377.5) (217.8) (34.4) (140.3)
Performance 298.5 51.0 188.5 (199.4) (999.6) (22.9) (1,268.4)
Money market funds net
change in AUM (364.2) 214.8 1,939.1 (1,287.2) (1,027.2) 1,288.7 (2,075.1)
Acquisitions
(dispositions) / Other (14.0) (52.0) 13.6 (91.5) (27.6) (40.0) (5.8)
------------- ------------- ------------- ------------- ------------- ------------- ------------
Net Change in AUM 199.2 404.2 1,819.4 (1,955.6) (2,272.2) 1,191.4 (3,489.6)
Assets under management,
beginning of period 21,863.8 22,063.0 22,467.2 24,286.6 22,331.0 20,058.8 21,250.2
------------- ------------- ------------- ------------- ------------- ------------- ------------
Assets under management,
end of period $ 22,063.0 $ 22,467.2 $ 24,286.6 $ 22,331.0 $ 20,058.8 $ 21,250.2 $ 17,760.6
============= ============= ============= ============= ============= ============= ============
INSTITUTIONAL PRODUCTS:
Deposits and reinvestments $ 281.3 $ 364.4 $ 260.2 $ 331.7 $ 334.3 $ 64.0 $ 74.7
Redemptions and withdrawals (513.3) (474.9) (566.6) (447.3) (4,144.2) (822.4) (475.3)
------------- ------------- ------------- ------------- ------------- ------------- ------------
Net Flows (232.0) (110.5) (306.4) (115.6) (3,809.9) (758.4) (400.6)
Performance 233.8 17.4 251.6 56.5 (76.9) (82.6) (96.9)
Acquisitions
(dispositions) / Other (261.9) 69.1 (708.2) 5.8 (70.0) 50.3 (54.8)
------------- ------------- ------------- ------------- ------------- ------------- ------------
Net Change in AUM (260.1) (24.0) (763.0) (53.3) (3,956.8) (790.7) (552.3)
Assets under management,
beginning of period 12,294.8 12,034.7 12,010.7 11,247.7 11,194.4 7,237.6 6,446.9
------------- ------------- ------------- ------------- ------------- ------------- ------------
Assets under management,
end of period $ 12,034.7 $ 12,010.7 $ 11,247.7 $ 11,194.4 $ 7,237.6 $ 6,446.9 $ 5,894.6
============= ============= ============= ============= ============= ============= ============
STRUCTURED FINANCE PRODUCTS:
Deposits and reinvestments $ 1,500.0 $ 790.0 $ 0.0 $ 0.0 $ 0.0 $ 1.2 $ 0.0
Redemptions and withdrawals (299.0) (20.6) (17.6) (15.1) (25.9) (1,165.8) (34.0)
------------- ------------- ------------- ------------- ------------- ------------- ------------
Net Flows 1,201.0 769.4 (17.6) (15.1) (25.9) (1,164.6) (34.0)
Performance (73.7) (117.9) (809.3) (1,324.6) (951.1) (53.6) (86.5)
------------- ------------- ------------- ------------- ------------- ------------- ------------
Net Change in AUM 1,127.3 651.5 (826.9) (1,339.7) (977.0) (1,218.2) (120.5)
Assets under management,
beginning of period 3,963.1 5,090.4 5,741.9 4,915.0 3,575.3 2,598.3 1,380.1
------------- ------------- ------------- ------------- ------------- ------------- ------------
Assets under management,
end of period $ 5,090.4 $ 5,741.9 $ 4,915.0 $ 3,575.3 $ 2,598.3 $ 1,380.1 $ 1,259.6
============= ============= ============= ============= ============= ============= ============
TOTAL:
Deposits and reinvestments $ 3,232.4 $ 2,689.2 $ 1,260.4 $ 1,154.1 $ 1,295.9 $ 987.2 $ 938.8
Redemptions and withdrawals (2,422.2) (2,305.0) (2,090.0) (2,032.0) (5,656.2) (3,197.3) (1,644.9)
------------- ------------- ------------- ------------- ------------- ------------- ------------
Net Flows 810.2 384.2 (829.6) (877.9) (4,360.3) (2,210.1) (706.1)
Performance 584.2 25.3 (304.8) (1,587.9) (2,543.9) (202.4) (1,547.2)
Money market funds net
change in AUM (364.2) 214.8 1,939.1 (1,287.2) (1,027.2) 1,288.7 (2,075.1)
Acquisitions
(dispositions) / Other (275.9) 17.1 (694.6) (167.2) (97.6) 10.3 (387.9)
------------- ------------- ------------- ------------- ------------- ------------- ------------
Net Change in AUM 754.3 641.4 110.1 (3,920.2) (8,029.0) (1,113.5) (4,716.3)
Assets under management,
beginning of period 44,962.8 45,717.1 46,358.5 46,468.6 42,548.4 34,519.4 33,405.9
------------- ------------- ------------- ------------- ------------- ------------- ------------
Assets under management,
end of period $ 45,717.1 $ 46,358.5 $ 46,468.6 $ 42,548.4 $ 34,519.4 $ 33,405.9 $ 28,689.6
============= ============= ============= ============= ============= ============= ============
Variable Products Change
in AUM (included
in Institutional
Products) $ (10.2) $ 5.4 $ (897.3) $ (48.2) $ (32.9) $ (40.1) $ (44.9)
============= ============= ============= ============= ============= ============= ============
Money Market balances (1) $ 5,336.9 $ 5,551.7 $ 7,490.8 $ 6,203.6 $ 5,176.3 $ 6,465.0 $ 4,389.9
============= ============= ============= ============= ============= ============= ============
(1) Money Market balances included in Mutual Funds above.
19
THE PHOENIX COMPANIES, INC.
VENTURE CAPITAL SEGMENT (1)
Third 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
Third Quarter 2008 (unaudited)
($ in millions)
YTD September December 31,
-------------------------- ------------------------------------------------------
2008 2007 2007 2006 2005 2004
------------ ------------ ------------ ------------ ------------ ------------
OPERATING INCOME
Corporate Investment Income $ 0.3 $ 4.8 $ 6.7 $ 4.6 $ (0.8) $ 0.4
Interest Expense on Indebtedness (27.8) (32.6) (44.2) (49.2) (46.6) (40.8)
Corporate Expenses (29.7) (10.1) (10.8) (17.3) (24.6) (18.9)
Other (0.8) 1.1 0.8 (0.1) 0.7 (1.5)
------------ ------------ ------------ ------------ ------------ ------------
Operating Loss, before income taxes (58.0) (36.8) (47.5) (62.0) (71.3) (60.8)
Applicable Income Tax (Benefit) (17.1) (24.5) (29.5) (21.2) (26.9) (23.0)
------------ ------------ ------------ ------------ ------------ ------------
OPERATING LOSS (40.9) (12.3) (18.0) (40.8) (44.4) (37.8)
Net Realized Investment Gains (Losses) (9.5) 9.0 (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) $ (50.4) $ (3.3) $ (23.7) $ (20.2) $ (51.1) $ (16.8)
============ ============ ============ ============ ============ ============
21
THE PHOENIX COMPANIES, INC.
CORPORATE AND OTHER
Third Quarter 2008 (unaudited)
($ in millions)
Quarters Ended 2007 2008
---------------------------------------------------------- -------------------------------------------
March June September December March June September
------------- ------------- ------------- ------------- ------------- ------------- -------------
OPERATING INCOME
Corporate Investment
Income $ 1.5 $ 1.5 $ 1.8 $ 1.9 $ 0.9 $ (0.3) $ (0.3)
Interest Expense on
Indebtedness (9.5) (11.6) (11.5) (11.6) (10.2) (8.8) (8.8)
Corporate Expenses (2.9) (5.5) (1.7) (0.7) (11.2) (11.6) (6.9)
Other 1.7 (0.6) (0.4) (0.1) (0.4) (0.3)
------------- ------------- ------------- ------------- ------------- ------------- -------------
Operating Loss, before
income taxes (9.2) (16.2) (11.4) (10.8) (20.6) (21.1) (16.3)
Applicable Income Tax
(Benefit) (3.6) (14.8) (6.1) (5.0) (8.1) (7.4) (1.6)
------------- ------------- ------------- ------------- ------------- ------------- -------------
OPERATING LOSS (5.6) (1.4) (5.3) (5.8) (12.5) (13.7) (14.7)
Net Realized Investment
Gains (Losses) 11.8 (1.8) (1.0) (14.7) (1.1) (7.3) (1.1)
------------- ------------- ------------- ------------- ------------- ------------- -------------
NET INCOME (LOSS) $ 6.2 $ (3.2) $ (6.3) $ (20.5) $ (13.6) $ (21.0) $ (15.8)
============= ============= ============= ============= ============= ============= =============
22
THE PHOENIX COMPANIES, INC.
CONSOLIDATED STATEMENT OF INCOME - GAAP FORMAT (1)(2)
Third Quarter 2008 (unaudited)
($ in millions)
YTD September December 31,
---------------------------- ----------------------------------------------------------
2008 2007 2007 2006 2005 2004
------------- ------------- ------------- ------------- ------------- -------------
REVENUES
Premiums $ 566.7 $ 585.3 $ 798.3 $ 839.7 $ 928.7 $ 990.6
Insurance, Investment Management and
Product Fees 546.2 470.5 652.6 560.1 501.8 550.0
Mutual Fund Ancillary Fees and Other
Revenue 41.8 50.9 67.7 54.8 46.5 46.9
Net Investment Income 712.8 800.5 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) (134.3) 26.4 (6.8) 76.5 34.2 10.8
------------- ------------- ------------- ------------- ------------- -------------
Total Revenues 1,733.2 1,933.6 2,572.2 2,581.0 2,611.5 2,758.2
------------- ------------- ------------- ------------- ------------- -------------
BENEFITS AND EXPENSES
Policy Benefits and Increase in Policy
Liabilities 999.4 976.0 1,318.5 1,341.1 1,376.7 1,422.2
Policyholder Dividends 203.1 292.2 380.0 399.1 364.4 404.7
Policy Acquisition Cost Amortization 163.6 132.0 192.9 145.7 132.1 110.2
Intangible Asset Impairments 432.2 32.5 10.6
Intangible Asset Amortization 22.4 22.6 30.4 32.0 33.8 33.8
Interest Expense on Indebtedness 27.8 32.6 44.2 49.2 46.6 40.8
Interest Expense on Non-recourse
Collateralized Obligations 10.7 12.0 15.4 18.7 29.4 33.6
Other Operating Expenses 330.9 325.3 440.0 428.3 482.9 565.8
------------- ------------- ------------- ------------- ------------- -------------
Total Expenses 2,190.1 1,792.7 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 (456.9) 140.9 150.8 134.4 135.0 147.1
Applicable Income Taxes (Benefit) (109.2) 27.6 29.7 40.2 27.1 46.0
------------- ------------- ------------- ------------- ------------- -------------
Income (Loss) from Continuing Operations
before Minority Interest and equity in
undistributed losses of affiliates (347.7) 113.3 121.1 94.2 107.9 101.1
Equity in undistributed losses of
affiliates (10.4)
------------- ------------- ------------- ------------- ------------- -------------
Income (Loss) from Continuing Operations (347.7) 113.3 121.1 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) $ (347.7) $ 114.4 $ 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)
Third Quarter 2008 (unaudited)
($ in millions)
Quarters Ended 2007 2008
---------------------------------------------------------- -------------------------------------------
March June September December March June September
------------- ------------- -------------- ------------- ------------- ------------- -------------
REVENUES
Premiums $ 194.7 $ 193.1 $ 197.5 $ 213.0 $ 180.2 $ 191.3 $ 195.2
Insurance, Investment
Management and Product
Fees 150.5 155.5 164.6 182.0 179.5 182.4 184.3
Mutual Fund Ancillary
Fees and Other Revenue 16.7 17.2 16.9 16.9 14.6 14.6 12.6
Net Investment Income 276.5 262.8 261.2 259.9 248.5 246.3 218.0
Net Realized Investment
Gains (Losses) 24.5 (1.9) 3.8 (33.1) (47.5) (26.2) (60.6)
------------- ------------- -------------- ------------- ------------- ------------- -------------
Total Revenues 662.9 626.7 644.0 638.7 575.3 608.4 549.5
------------- ------------- -------------- ------------- ------------- ------------- -------------
BENEFITS AND EXPENSES
Policy Benefits and
Increase in Policy
Liabilities 322.2 321.9 331.9 342.5 335.8 327.0 336.6
Policyholder Dividends 103.8 90.3 98.1 87.8 73.7 86.0 43.4
Policy Acquisition Cost
Amortization 41.3 43.9 46.8 60.9 40.0 55.6 68.0
Intangible Asset
Impairments 10.5 421.7
Intangible Asset
Amortization 7.6 7.5 7.5 7.8 7.5 7.5 7.4
Interest Expense on
Indebtedness 9.5 11.6 11.5 11.6 10.2 8.8 8.8
Interest Expense on
Non-recourse
Collateralized
Obligations 4.0 4.1 3.9 3.4 3.2 1.9 5.6
Other Operating Expenses 106.9 115.8 102.6 114.8 117.4 114.6 98.9
------------- ------------- -------------- ------------- ------------- ------------- -------------
Total Expenses 595.3 595.1 602.3 628.8 598.3 601.4 990.4
------------- ------------- -------------- ------------- ------------- ------------- -------------
Income (Loss) from
Continuing Operations
before Income Taxes 67.6 31.6 41.7 9.9 (23.0) 7.0 (440.9)
Applicable Income Taxes
(Benefit) 19.7 1.1 6.8 2.1 (8.6) 0.8 (101.4)
------------- ------------- -------------- ------------- ------------- ------------- -------------
Income (Loss) from
Continuing Operations 47.9 30.5 34.9 7.8 (14.4) 6.2 (339.5)
Discontinued Operations:
Income (Loss) from
Discontinued
Operations 0.8 0.4 (4.7)
------------- ------------- -------------- ------------- ------------- ------------- -------------
Net Income (Loss) $ 48.7 $ 30.9 $ 34.9 $ 3.1 $ (14.4) $ 6.2 $ (339.5)
============= ============= ============== ============= ============= ============= =============
(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 THIRD QUARTER 2008 INCOME STATEMENT
Third Quarter 2008 (unaudited)
($ in millions)
Year-to-Date September 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 $ 566.7 $ 566.7
Insurance, Investment
Management and
Product Fees 546.2 453.6 $ 93.0 $ (0.4)
Mutual Fund Ancillary
Fees and Other Revenue 41.8 - 41.8
Net Investment Income 712.8 692.1 0.7 $ 12.1 $ (1.7) 9.6
Net Realized Investment
Losses (134.3) $ (134.3)
------------- --------------- ------------- ------------- ------------- ------------- -------------
Total Revenues 1,733.2 1,712.4 135.5 12.1 (134.3) (1.7) 9.2
------------- --------------- ------------- ------------- ------------- ------------- -------------
BENEFITS AND EXPENSES
Policy Benefits and
Increase in Policy
Liabilities 999.4 994.1 5.3
Policyholder Dividends 203.1 253.6 (50.5)
Policy Acquisition Cost
Amortization 163.6 177.1 (13.5)
Intangible Asset
Amortization 22.4 22.4
Intangible Asset
Impairments 432.2 432.2
Interest Expense
on Indebtedness 27.8 - 27.8
Interest Expense on
Non-recourse
Collateralized
Obligations 10.7 - 10.7
Other Operating Expenses 330.9 175.5 125.9 30.1 (8.1) (1.7) 9.2
------------- --------------- ------------- ------------- ------------- ------------- -------------
Total Expenses 2,190.1 1,600.3 580.5 73.9 (72.1) (1.7) 9.2
------------- --------------- ------------- ------------- ------------- ------------- -------------
Income (Loss) from
Continuing Operations
before Income Taxes (456.9) 112.1 (445.0) (61.8) (62.2) 0.0 0.0
Applicable Income Taxes
(Benefit) (109.2) 27.1 (98.0) (17.1) (21.2)
------------- --------------- ------------- ------------- ------------- ------------- -------------
Income (Loss) from
Continuing Operations $ (347.7) $ 85.0 $ (347.0) $ (44.7) $ (41.0) $ 0.0 $ 0.0
============= =============== ============= ============= ============= ============= =============
25
THE PHOENIX COMPANIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEET -- PRELIMINARY (1)
Third Quarter 2008 (unaudited)
($ in millions, except par value)
September December 31,
------------- ----------------------------------------------------------
2008 2007 2006 2005 2004
------------- ------------- ------------- ------------- -------------
ASSETS:
Available-for-Sale Debt Securities, at fair value $ 10,658.0 $ 11,970.0 $ 12,696.8 $ 13,404.6 $ 13,476.3
Available-for-Sale Equity Securities, at fair value 166.3 205.3 187.1 181.8 304.3
Trading Equity Securities, at fair value 87.3
Policy Loans, at unpaid principal balances 2,489.9 2,380.5 2,322.0 2,245.0 2,196.7
Venture Capital Partnerships, at equity in net assets 202.2 173.7 116.8 145.1 255.3
Other Investments 529.2 507.3 380.2 439.2 579.7
Fair value option investments 105.8
------------- ------------- ------------- ------------- -------------
14,151.4 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 163.4 219.1 267.8 304.4 1,278.8
------------- ------------- ------------- ------------- -------------
TOTAL INVESTMENTS 14,314.8 15,455.9 15,970.7 16,720.1 18,178.4
Cash and Cash Equivalents 312.1 577.7 404.9 301.5 435.0
Accrued Investment Income 223.4 209.6 215.8 225.8 222.3
Receivables 237.8 159.7 218.6 146.9 135.8
Deferred Policy Acquisition Costs 2,460.5 2,089.9 1,755.7 1,556.0 1,429.9
Deferred Income Taxes 319.8 42.8 39.6 56.0 30.7
Intangible Assets 86.1 208.2 237.5 295.9 308.4
Goodwill 152.8 484.5 471.1 467.7 427.2
Other Assets 229.7 172.8 240.1 220.2 241.3
Separate Account Assets 9,830.8 10,820.3 9,458.6 7,722.2 6,950.3
------------- ------------- ------------- ------------- -------------
TOTAL ASSETS $ 28,167.8 $ 30,221.4 $ 29,012.6 $ 27,712.3 $ 28,359.3
============= ============= ============= ============= =============
LIABILITIES:
Policy Liabilities and Accruals $ 13,827.5 $ 13,816.7 $ 13,525.7 $ 13,246.2 $ 13,132.4
Policyholder Deposit Funds 1,576.2 1,808.9 2,228.4 3,060.7 3,492.4
Indebtedness 467.0 627.7 685.4 751.9 690.8
Stock Purchase Contracts 131.9
Other Liabilities 691.2 550.9 539.0 534.3 583.9
Non-recourse Collateralized Debt Obligation
Liabilities 247.8 317.9 344.0 389.9 1,355.2
Separate Account Liabilities 9,830.8 10,820.3 9,458.6 7,722.2 6,950.3
------------- ------------- ------------- ------------- -------------
TOTAL LIABILITIES 26,640.5 27,942.4 26,781.1 25,705.2 26,336.9
------------- ------------- ------------- ------------- -------------
STOCKHOLDERS' EQUITY:
Common stock, $.01 par value, 1.0 billion shares
authorized; 114,413,602 shares outstanding
(September 30, 2008) 1.3 1.3 1.3 1.1 1.0
Additional paid in capital 2,624.3 2,616.1 2,600.2 2,437.6 2,431.6
Accumulated Earnings (Deficit) (390.2) (20.7) (115.9) (193.1) (285.7)
Treasury stock, at cost: 11,313,564 shares
(September 30, 2008) (179.5) (179.5) (179.5) (179.5) (182.6)
Accumulated Other Comprehensive Income (Loss) (528.6) (138.2) (74.6) (59.0) 58.1
------------- ------------- ------------- ------------- -------------
TOTAL STOCKHOLDERS' EQUITY 1,527.3 2,279.0 2,231.5 2,007.1 2,022.4
------------- ------------- ------------- ------------- -------------
TOTAL LIABILITIES, MINORITY INTEREST AND
STOCKHOLDERS' EQUITY $ 28,167.8 $ 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)
Third Quarter 2008 (unaudited)
($ millions)
Total Debt Securities Public Debt Securities Private Debt Securities
---------------------------- ---------------------------- ----------------------------
9/30/08 12/31/07 9/30/08 12/31/07 9/30/08 12/31/07
------------- ------------- ------------- ------------- ------------- -------------
DEBT SECURITIES BY CREDIT QUALITY
(CARRYING VALUE)
AAA/AA/A $ 6,751.0 $ 7,473.6 $ 5,324.3 $ 5,950.6 $ 1,426.7 $ 1,523.0
BBB 2,979.8 3,567.7 1,654.4 1,997.9 1,325.4 1,569.8
------------- ------------- ------------- ------------- ------------- -------------
Total Investment Grade 9,730.8 11,041.3 6,978.7 7,948.5 2,752.1 3,092.8
------------- ------------- ------------- ------------- ------------- -------------
BB 583.1 604.3 429.6 507.7 153.5 96.6
B 189.5 227.3 123.4 179.3 66.1 48.0
CCC and Lower 128.8 84.0 78.5 33.8 50.3 50.2
In or Near Default 25.8 13.1 16.5 6.1 9.3 7.0
------------- ------------- ------------- ------------- ------------- -------------
Total Debt Securities $ 10,658.0 $ 11,970.0 $ 7,626.7 $ 8,675.4 $ 3,031.3 $ 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 9/30/08
Total Outside Closed Block Closed Block
---------------------------- ---------------------------- ----------------------------
Gains Losses Gains Losses Gains Losses
------------- ------------- ------------- ------------- ------------- -------------
Total Debt Securities $ 102.0 $ (1,096.1) $ 29.0 $ (516.0) $ 73.0 $ (580.1)
Equity Securities 14.5 (12.7) 2.0 (2.2) 12.5 (10.5)
------------- ------------- ------------- ------------- ------------- -------------
Total Unrealized Gains (Losses) 116.5 (1,108.8) 31.0 (518.2) 85.5 (590.6)
------------- ------------- ------------- ------------- ------------- -------------
Applicable PDO 85.5 (228.1) 85.5 (228.1)
Applicable DAC (Credit) 0.2 (263.6) 0.2 (263.6)
Applicable Deferred Income Tax
(Benefit) 10.8 (216.0) 10.8 (89.1) (126.9)
------------- ------------- ------------- ------------- ------------- -------------
Total Offsets to Net Unrealized Gains
(Losses) 96.5 (707.7) 11.0 (352.7) 85.5 (355.0)
------------- ------------- ------------- ------------- ------------- -------------
Net Unrealized Gains (Losses) $ 20.0 $ (401.1) $ 20.0 $ (165.5) $ 0.0 $ (235.6)
============= ============= ============= ============= ============= =============
Net Unrealized Losses $ (381.1) $ (145.5) $ (235.6)
============= ============= =============
(1) Excludes debt and equity securities pledged as collateral.
27
THE PHOENIX COMPANIES, INC.
GENERAL ACCOUNT GAAP NET INVESTMENT INCOME YIELDS (1)
Third Quarter 2008 (unaudited)
($ in millions)
Quarters Ended YTD September December 31,
---------------------------- ----------------------------------------------------------
2008 2007 2007 2006 2005 2004
------------- ------------- ------------- ------------- ------------- -------------
GAAP NET INVESTMENT INCOME
Debt Securities $ 537.2 $ 584.6 $ 774.4 $ 800.7 $ 804.6 $ 772.1
Equity Securities 3.4 5.4 8.2 7.0 7.5 4.5
Mortgages 0.8 1.4 1.7 6.2 20.2 22.5
Policy Loans 138.2 133.4 179.5 169.3 165.8 167.1
Venture Capital 6.2 22.0 27.0 3.3 23.8 25.5
Cash & Cash Equivalents 7.1 13.9 18.8 16.3 7.6 4.9
Other Income 2.3 5.3 8.3
Other Investments (2) 19.2 35.0 43.9 40.0 47.8 48.8
------------- ------------- ------------- ------------- ------------- -------------
Total Cash and Invested Assets 714.4 801.0 1,061.8 1,042.8 1,077.3 1,045.4
============= ============= ============= ============= ============= =============
Discontinued Operations 1.7 5.2 7.5 6.6 4.8 3.6
Investment Expenses 6.9 7.5 9.6 5.3 6.1 7.9
------------- ------------- ------------- ------------- ------------- -------------
Total Net Investment Income $ 705.8 $ 788.3 $ 1,044.7 $ 1,030.9 $ 1,066.4 $ 1,033.9
============= ============= ============= ============= ============= =============
ANNUALIZED YIELDS
Debt Securities 6.7% 6.6% 6.6% 6.5% 6.2% 5.9%
Equity Securities 2.6% 3.6% 4.1% 3.7% 3.0% 1.3%
Mortgages 8.8% 11.3% 11.0% 8.1% 15.3% 11.0%
Policy Loans 7.7% 7.8% 7.9% 7.6% 7.7% 7.9%
Venture Capital 4.1% 20.4% 17.3% 2.7% 12.8% 10.9%
Cash & Cash Equivalents 2.5% 5.3% 4.1% 4.7% 5.2% 1.1%
Other Investments (2) 5.5% 13.7% 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)
Third Quarter 2008 (unaudited)
($ in millions)
Quarters Ended 2007 2008
---------------------------------------------------------- -------------------------------------------
March June September December March June September
------------- ------------- ------------- ------------- ------------- ------------- -------------
GAAP NET INVESTMENT INCOME
Debt Securities $ 194.0 $ 194.9 $ 195.7 $ 189.8 $ 183.3 $ 178.0 $ 175.8
Equity Securities 2.4 2.1 0.9 2.8 1.0 1.2 1.2
Mortgages 0.7 0.4 0.3 0.3 0.2 0.4 0.2
Policy Loans 44.1 43.8 45.5 46.1 45.0 45.8 47.4
Venture Capital 7.8 6.3 7.9 5.0 5.8 8.8 (8.4)
Cash & Cash Equivalents 4.9 4.7 4.3 4.9 3.6 1.8 1.7
Other Income 4.6 1.2 (0.5) 3.0 1.9 0.3 0.1
Other Investments (2) 19.0 9.7 6.3 8.9 7.0 11.0 1.2
------------- ------------- ------------- ------------- ------------- ------------- -------------
Total Cash and Invested
Assets 277.5 263.1 260.4 260.8 247.8 247.3 219.2
============= ============= ============= ============= ============= ============= =============
Discontinued Operations 2.7 1.8 0.7 2.3 0.7 0.6 0.4
Investment Expenses 2.3 2.7 2.5 2.1 1.8 2.5 2.6
------------- ------------- ------------- ------------- ------------- ------------- -------------
Total Net Investment
Income $ 272.5 $ 258.6 $ 257.2 $ 256.4 $ 245.3 $ 244.2 $ 216.2
============= ============= ============= ============= ============= ============= =============
ANNUALIZED YIELDS
Debt Securities 6.3% 6.4% 6.6% 6.5% 6.4% 6.4% 6.6%
Equity Securities 5.2% 4.3% 1.8% 5.6% 1.9% 2.4% 2.7%
Mortgages 6.4% 9.2% 7.1% 7.6% 5.4% 12.3% 6.6%
Policy Loans 7.9% 7.8% 8.0% 8.1% 7.8% 7.8% 7.9%
Venture Capital 27.5% 18.8% 22.2% 12.6% 13.4% 19.1% -15.1%
Cash & Cash Equivalents 5.4% 5.5% 4.9% 4.3% 3.1% 1.8% 1.8%
Other Investments (2) 26.6% 12.1% 7.2% 9.3% 7.0% 10.9% 1.0%
------------- ------------- ------------- ------------- ------------- ------------- -------------
Total Cash and
Invested Assets 7.2% 6.9% 6.9% 6.9% 6.6% 6.7% 6.1%
============= ============= ============= ============= ============= ============= =============
Investment Expenses and
Discontinued Operations 0.1% 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% 6.5% 6.0%
============= ============= ============= ============= ============= ============= =============
(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
Third Quarter 2008 (unaudited)
($ Millions)
YTD September December 31,
---------------------------- ----------------------------------------------------------
2008 2007 2007 2006 2005 2004
------------- ------------- ------------- ------------- ------------- -------------
REALIZED INVESTMENT GAINS AND LOSSES
Debt Security Impairments $ (94.6) $ (18.4) $ (46.7) $ (7.9) $ (31.2) $ (15.5)
Equity Security Impairments (1.6) (0.4) (0.5) (2.1) (1.5)
Mortgage Loan Impairments (0.8) (12.6)
Debt and Equity Securities Pledged as
Collateral Impairments (0.7) (0.8) (0.8) (1.0) (1.2) (16.6)
Other Invested Asset Impairments (8.8) (1.3) (3.9) (3.3)
------------- ------------- ------------- ------------- ------------- -------------
Total Impairment Losses (105.7) (20.9) (51.9) (8.9) (35.3) (49.5)
------------- ------------- ------------- ------------- ------------- -------------
Debt Security Net Transaction Gains
(Losses) (10.8) 14.3 11.6 42.0 (18.0) 28.4
Equity Security Net Transaction Gains
(Losses) (0.4) 6.7 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) (10.8) 5.2 1.9 4.1 6.6 6.3
Debt and Equity Securities Pledged as
Collateral 1.5 1.4 1.8 2.5
------------- ------------- ------------- ------------- ------------- -------------
Total Net Transactions Gains (Losses) (20.6) 44.1 41.3 84.0 69.5 48.7
------------- ------------- ------------- ------------- ------------- -------------
Realized Gains (Losses) on Fair Value
Option Securities (8.0) 3.3 3.8 1.4
------------- ------------- ------------- ------------- ------------- -------------
Net Realized Investment Gains (Losses) (134.3) 26.5 (6.8) 76.5 34.2 (0.8)
============= ============= ============= ============= ============= =============
Closed Block Applicable PDO (Reduction) (50.6) 6.4 4.4 46.0 (12.4) 3.7
Applicable Deferred Acquisition Costs
(Credit) (13.5) 0.3 0.2 (3.5) 17.6 (0.4)
Applicable Deferred Income Tax (Credit) (24.1) 5.0 (4.3) 11.7 9.2 3.1
------------- ------------- ------------- ------------- ------------- -------------
Net Realized Investment Gains (Losses)
Included in Net Income $ (46.1) $ 14.8 $ (7.1) $ 22.3 $ 19.8 $ (7.2)
============= ============= ============= ============= ============= =============
30
THE PHOENIX COMPANIES, INC.
GENERAL ACCOUNT REALIZED INVESTMENT GAINS AND LOSSES
Third Quarter 2008 (unaudited)
($ Millions)
Quarters Ended 2007 2008
---------------------------------------------------------- -------------------------------------------
March June September December March June September
------------- ------------- ------------- ------------- ------------- ------------- -------------
REALIZED INVESTMENT GAINS
AND LOSSES
Debt Security Impairments $ (1.0) $ (13.6) $ (3.8) $ (28.3) $ (32.6) $ (24.9) $ (37.1)
Equity Security
Impairments (0.1) (0.3) (0.1) (0.5) (0.1) (1.0)
Debt and Equity
Securities Pledged as
Collateral Impairments (0.8) (0.7)
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) (38.8)
------------- ------------- ------------- ------------- ------------- ------------- -------------
Debt Security Net
Transaction Gains
(Losses) 3.4 5.4 5.5 (2.7) (2.8) (8.0)
Equity Security Net
Transaction Gains
(Losses) 1.3 2.6 2.8 2.8 (0.2) 2.3 (2.5)
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) 2.1 3.3 (0.2) (3.3) (1.2) (2.8) (6.8)
Debt and Equity
Securities Pledged
as Collateral 0.2 0.7 0.5 0.4 0.8 0.6 0.1
------------- ------------- ------------- ------------- ------------- ------------- -------------
Total Net Transactions
Gains (Losses) 23.6 11.9 8.6 (2.8) (3.5) 0.1 (17.2)
------------- ------------- ------------- ------------- ------------- ------------- -------------
Realized Gains (Losses)
on Fair Value Option
Securities 1.9 0.7 0.7 0.5 (3.6) 0.2 (4.6)
------------- ------------- ------------- ------------- ------------- ------------- -------------
Net Realized Investment
Gains (Losses) 24.5 (1.9) 3.9 (33.3) (47.5) (26.2) (60.6)
============= ============= ============= ============= ============= ============= =============
Closed Block Applicable
PDO (Reduction) 6.6 (1.3) 1.1 (2.0) (15.5) (9.5) (25.6)
Applicable Deferred
Acquisition Costs
(Credit) (0.4) 0.3 0.4 (0.1) (6.0) (3.5) (4.0)
Applicable Deferred
Income Tax (Credit) 3.9 0.4 0.7 (9.3) (9.4) (4.7) (10.0)
------------- ------------- ------------- ------------- ------------- ------------- -------------
Net Realized Investment
Gains (Losses)
Included in Net Income $ 14.4 $ (1.3) $ 1.7 $ (21.9) $ (16.6) $ (8.5) $ (21.0)
============= ============= ============= ============= ============= ============= =============
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