Supplemental Unaudited Quarterly Financial Information

12 Months Ended

Dec. 31, 2013

Quarterly Financial Information Disclosure [Abstract]

Supplemental Unaudited Quarterly Financial Information

Supplemental Unaudited Quarterly Financial Information

The following tables reflect unaudited summarized quarterly financial results during the years ended December 31, 2013 and 2012.

Summarized Selected Quarterly Financial Data:	Quarter Ended
($ in millions)	Mar 31, [1]			June 30,			Sept 30,			Dec 31,
	2013
Revenues	$	108.8		$	137.1		$	130.6		$	149.2
Benefits and expenses	$	131.1		$	149.4		$	143.2		$	68.0
Income tax expense (benefit)	$	(1.9	)	$	(16.9	)	$	2.6		$	(5.5	)
Net income (loss)	$	(20.4	)	$	4.6		$	(15.2	)	$	86.7

———————

[1] Results for the quarter ended March 31, 2013 include $3.2 million of income (loss) related to out of period adjustments. Such amounts are not material to any period presented.

Summarized Selected Quarterly Financial Data:	Quarter Ended
($ in millions)	Mar 31,			June 30,			Sept 30,			Dec 31,
	2012
Revenues	$	125.6		$	111.7		$	130.2		$	114.9
Benefits and expenses	$	129.3		$	143.3		$	206.5		$	124.8
Income tax expense (benefit)	$	18.8		$	0.5		$	4.3		$	(7.4	)
Net income (loss)	$	(22.5	)	$	(32.1	)	$	(80.6	)	$	(2.5	)

($ in millions)	Statements of Income and Comprehensive Income
	Three months ended
	Mar 31,			June 30,			Sept 30,			Dec 31,
	2013
REVENUES:
Premiums	$	3.1		$	5.1		$	3.1		$	2.6
Insurance and investment product fees	90.1			87.2			94.0			96.3
Net investment income	33.0			34.1			36.3			37.4
Net realized investment gains (losses):
Total OTTI losses	(0.3		)	—			(0.2		)	(0.6		)
Portion of OTTI losses recognized in OCI	(0.7		)	(0.2		)	—			—
Net OTTI losses recognized in earnings	(1.0		)	(0.2		)	(0.2		)	(0.6		)
Net realized investment gains (losses), excluding OTTI losses	(16.4		)	10.9			(2.6		)	13.5
Net realized investment gains (losses)	(17.4		)	10.7			(2.8		)	12.9
Total revenues	108.8			137.1			130.6			149.2
BENEFITS AND EXPENSES:
Policy benefits	88.5			91.4			91.8			14.8
Policy acquisition cost amortization	14.0			26.6			22.2			25.6
Other operating expenses	28.6			31.4			29.2			27.6
Total benefits and expenses	131.1			149.4			143.2			68.0
Income (loss) before income taxes	(22.3		)	(12.3		)	(12.6		)	81.2
Income tax expense (benefit)	(1.9		)	(16.9		)	2.6			(5.5		)
Net income (loss)	$	(20.4	)	$	4.6		$	(15.2	)	$	86.7
COMPREHENSIVE INCOME (LOSS):
Net income (loss)	$	(20.4	)	$	4.6		$	(15.2	)	$	86.7
Other comprehensive income (loss) before income taxes:
Unrealized investment gains (losses), net of related offsets	(13.3		)	(12.1		)	9.9			(19.6		)
Less: Income tax expense (benefit) related to:
Unrealized investment gains (losses), net of related offsets	2.7			(12.1		)	(0.3		)	(2.1		)
Other comprehensive income (loss), net of income taxes	(16.0		)	—			10.2			(17.5		)
Comprehensive income (loss)	$	(36.4	)	$	4.6		$	(5.0	)	$	69.2

17. Supplemental Unaudited Quarterly Financial Information (continued)

($ in millions)	Statements of Income and Comprehensive Income
	For the period ended
	June 30,			Sept 30,
	2013
REVENUES:
Premiums	$	8.2		$	11.3
Insurance and investment product fees	177.3			271.3
Net investment income	67.1			103.4
Net realized investment gains (losses):
Total OTTI losses	(0.3		)	(0.5		)
Portion of OTTI losses recognized in OCI	(0.9		)	(0.9		)
Net OTTI losses recognized in earnings	(1.2		)	(1.4		)
Net realized investment gains (losses), excluding OTTI losses	(5.5		)	(8.1		)
Net realized investment gains (losses)	(6.7		)	(9.5		)
Total revenues	245.9			376.5
BENEFITS AND EXPENSES:
Policy benefits, excluding policyholder dividends	179.9			271.7
Policy acquisition cost amortization	40.6			62.8
Other operating expenses	60.0			89.2
Total benefits and expenses	280.5			423.7
Loss before income taxes	(34.6		)	(47.2		)
Income tax expense (benefit)	(18.8		)	(16.2		)
Net income (loss)	$	(15.8	)	$	(31.0	)
COMPREHENSIVE INCOME (LOSS):
Net income (loss)	$	(15.8	)	$	(31.0	)
Other comprehensive income (loss) before income taxes:
Unrealized investment gains (losses), net of related offsets	(25.4		)	(15.5		)
Less: Income tax expense (benefit) related to:
Unrealized investment gains (losses), net of related offsets	(9.4		)	(9.7		)
Other comprehensive income (loss), net of income taxes	(16.0		)	(5.8		)
Comprehensive income (loss)	$	(31.8	)	$	(36.8	)

Supplemental Unaudited Quarterly Financial Information (continued)

($ in millions, except share data)	Balance Sheets
	For the period ended
	Mar 31,			June 30,			Sept 30,
	2013
ASSETS:
Available-for-sale debt securities, at fair value	$	3,054.7		$	3,162.2		$	3,252.1
Short-term investments	224.9			165.0			55.0
Limited partnerships and other investments	5.7			7.2			10.3
Policy loans, at unpaid principal balances	61.5			62.8			65.6
Derivative investments	186.6			199.3			190.7
Fair value investments	46.5			48.8			53.1
Total investments	3,579.9			3,645.3			3,626.8
Cash and cash equivalents	116.2			123.9			218.1
Accrued investment income	29.0			25.7			29.7
Receivables	9.8			8.6			14.3
Reinsurance recoverable	444.1			455.5			484.8
Deferred policy acquisition costs	433.6			463.1			458.5
Deferred income taxes, net	13.4			25.5			25.8
Receivables from related parties	—			6.0			2.0
Other assets	162.2			182.4			190.4
Separate account assets	2,109.5			2,021.3			2,049.5
Total assets	$	6,897.7		$	6,957.3		$	7,099.9
LIABILITIES:
Policy liabilities and accruals	$	1,930.8		$	1,926.5		$	1,974.9
Policyholder deposit funds	2,468.1			2,566.5			2,660.9
Payable to related parties	15.5			18.3			12.6
Other liabilities	115.1			161.4			143.7
Separate account liabilities	2,109.5			2,021.3			2,049.5
Total liabilities	6,639.0			6,694.0			6,841.6
COMMITMENTS AND CONTINGENT LIABILITIES (Note 16)
STOCKHOLDER’S EQUITY:
Common stock, $5,000 par value: 1,000 shares authorized; 500 shares issued	2.5			2.5			2.5
Additional paid-in capital	802.2			802.2			802.2
Accumulated other comprehensive gain (loss)	(4.6		)	(4.6		)	5.6
Retained earnings (accumulated deficit)	(541.4		)	(536.8		)	(552.0		)
Total stockholder’s equity	258.7			263.3			258.3
Total liabilities and stockholder’s equity	$	6,897.7		$	6,957.3		$	7,099.9

Supplemental Unaudited Quarterly Financial Information (continued)

($ in millions)	Statement of Changes in Stockholder’s Equity
	For the period ended
	Mar 31,			June 30,			Sept 30,
	2013
COMMON STOCK:
Balance, beginning of period	$	2.5		$	2.5		$	2.5
Balance, end of period	$	2.5		$	2.5		$	2.5
ADDITIONAL PAID-IN CAPITAL:
Balance, beginning of period	$	802.2		$	802.2		$	802.2
Capital contributions from parent	—			—			—
Balance, end of period	$	802.2		$	802.2		$	802.2
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS):
Balance, beginning of period	$	11.4		$	11.4		$	11.4
Other comprehensive income (loss)	(16.0		)	(16.0		)	(5.8		)
Balance, end of period	$	(4.6	)	$	(4.6	)	$	5.6
RETAINED EARNINGS (ACCUMULATED DEFICIT):
Balance, beginning of period	$	(521.0	)	$	(521.0	)	$	(521.0	)
Net income (loss)	(20.4		)	(15.8		)	(31.0		)
Balance, end of period	$	(541.4	)	$	(536.8	)	$	(552.0	)
TOTAL STOCKHOLDER’S EQUITY:
Balance, beginning of period	$	295.1		$	295.1		$	295.1
Change in stockholder’s equity	(36.4		)	(31.8		)	(36.8		)
Stockholder’s equity, end of period	$	258.7		$	263.3		$	258.3

Supplemental Unaudited Quarterly Financial Information (continued)

($ in millions)	Statements of Cash Flows
	For the period ended
	Mar 31,			June 30,			Sept 30,
	2013
OPERATING ACTIVITIES:
Net income (loss)	$	(20.4	)	$	(15.8	)	$	(31.0	)
Net realized investment (gains) losses	17.4			6.7			9.5
Policy acquisition costs deferred	(17.2		)	(33.5		)	(49.6		)
Amortization of deferred policy acquisition costs	14.0			40.6			62.8
Interest credited	18.4			40.1			64.0
Equity in earnings of limited partnerships and other investments	0.8			(0.1		)	(0.3		)
Change in:
Accrued investment income	(6.8		)	(3.7		)	(8.5		)
Deferred income taxes	—			—			—
Receivables	6.4			7.6			1.9
Reinsurance recoverable	(17.0		)	(28.4		)	(57.7		)
Policy liabilities and accruals	(55.5		)	(59.5		)	(70.7		)
Due to/from affiliate	4.5			1.3			(0.4		)
Other operating activities, net	3.6			(4.4		)	7.4
Cash provided by (used for) operating activities	(51.8		)	(49.1		)	(72.6		)
INVESTING ACTIVITIES:
Purchases of:
Available-for-sale debt securities	(155.0		)	(429.8		)	(672.3		)
Short-term investments	(224.8		)	(224.8		)	(224.8		)
Derivative instruments	(35.1		)	(50.1		)	(62.7		)
Fair value investments	(9.8		)	(14.6		)	(21.1		)
Sales, repayments and maturities of:
Available-for-sale debt securities	73.4			151.3			261.2
Short-term investments	244.9			304.8			414.8
Derivative instruments	7.7			15.8			27.4
Fair value investments	1.7			3.7			5.7
Contributions to limited partnerships	(0.3		)	(0.4		)	(3.5		)
Distributions from limited partnerships	—			0.1			0.4
Policy loans, net	0.2			(0.6		)	(2.7		)
Other investing activities, net	0.1			0.1			0.1
Cash provided by (used for) investing activities	(97.0		)	(244.5		)	(277.5		)
FINANCING ACTIVITIES:
Policyholder deposit fund deposits	247.2			469.9			690.7
Policyholder deposit fund withdrawals	(135.3		)	(280.0		)	(434.6		)
Net transfers to/from separate accounts	70.0			144.5			229.0
Cash provided by (used for) financing activities	181.9			334.4			485.1
Change in cash and cash equivalents	33.1			40.8			135.0
Cash and cash equivalents, beginning of period	83.1			83.1			83.1
Cash and cash equivalents, end of period	$	116.2		$	123.9		$	218.1
Supplemental Disclosure of Cash Flow Information
Income taxes paid (refunded)	$	(3.7	)	$	(9.0	)	$	(25.5	)
Non-Cash Transactions During the Year
Investment exchanges	$	19.0		$	29.6		$	30.5