-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, PJJECrlCkZl66M+DG0ibTHkWhENqC6waBh7dmBVQxuQ+MBtcPvueOp+kjx2W4rnB TquMeLFpOc1AEJ3QnCvQTg== 0000949377-06-000634.txt : 20060801 0000949377-06-000634.hdr.sgml : 20060801 20060801160906 ACCESSION NUMBER: 0000949377-06-000634 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20060727 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20060801 DATE AS OF CHANGE: 20060801 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PHOENIX COMPANIES INC/DE CENTRAL INDEX KEY: 0001129633 STANDARD INDUSTRIAL CLASSIFICATION: LIFE INSURANCE [6311] IRS NUMBER: 060493340 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-16517 FILM NUMBER: 06994577 BUSINESS ADDRESS: STREET 1: ONE AMERICAN ROW STREET 2: PO BOX 5056 CITY: HARTFORD STATE: CT ZIP: 061025056 BUSINESS PHONE: 8604035000 MAIL ADDRESS: STREET 1: ONE AMERICAN ROW STREET 2: PO BOX 5056 CITY: HARTFORD STATE: CT ZIP: 061025056 8-K 1 pnx77890_8-k.txt
Securities and Exchange Commission Washington, D.C. 20549 ------------------------------------ FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): July 27, 2006 The Phoenix Companies, Inc. - ---------------------------------------------------------------------------------------------------------- (Exact Name of Registrant as Specified in Its Charter) Delaware 1-16517 06-1599088 - ------------------- ------------------ --------------------- (State or Other Jurisdiction (Commission File Number) (IRS Employer of Incorporation) Identification No.) One American Row, Hartford, CT 06102 -5056 - --------------------------------------------------- ------------------- (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code: (860) 403-5000 --------------------- NOT APPLICABLE --------------------------------------------------------------------------- (Former Name or Former Address, if Changed Since Last Report) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION On July 27, 2006, The Phoenix Companies, Inc. made available on its website its Financial Supplement for the quarter ended June 30, 2006. This is furnished as Exhibit 99.1 hereto. ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS (a) Not applicable (b) Not applicable (c) Exhibits The following exhibit is furnished herewith: 99.1 The Phoenix Companies, Inc. Financial Supplement for the quarter ended June 30, 2006. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. THE PHOENIX COMPANIES, INC. Date: August 1, 2006 By: /s/ Katherine P. Cody ------------------------------------ Name: Katherine P. Cody Title: Senior Vice President and Chief Accounting Officer EX-99.1 2 pnx77890ex99-1.txt FINANCIAL SUPPLEMENT Exhibit 99.1 FINANCIAL SUPPLEMENT Exhibit 99.1 [LOGO] PHOENIX FINANCIAL SUPPLEMENT The Phoenix companies, Inc. June 30, 2006 [graphic omitted]
THE PHOENIX COMPANIES, INC. FINANCIAL SUPPLEMENT WALL STREET COVERAGE TRANSFER AGENT AND REGISTRAR FIRM ANALYST For information or assistance regarding your account, A.G. Edwards & Sons, Inc. J. Jeffrey Hopson please contact our transfer agent and registrar: Citigroup Keith Walsh The Phoenix Companies, Inc. C/O The Bank of New York, Credit Suisse First Boston (CSFB) Tom Gallagher Shareholder Relations, Fox-Pitt, Kelton John Nadel P.O. Box 11258, New York, NY 10286-1258 Friedman, Billings, Ramsey & Co. Stewart Johnson Toll-free: 1-800-490-4258 TTY 1-888-269-5221 JP Morgan Jimmy Bhullar Fax: 1-212-815-2777, e-mail: pnxshareholders@bankofny.com Keefe Bruyette & Woods, Inc. Jukka Lipponen Web: www.stockbny.com Langen McAlenney Robert Glasspiegel Lehman Brothers Eric Berg Merrill Lynch Edward A. Spehar Morgan Stanley Ken Zerbe FOR MORE INFORMATION UBS Andrew Kligerman To receive additional information, including financial supplements and Securities and Exchange Commission filings along with access to other shareholder services, visit the Investor Relations Section on our Web site at PhoenixWealthManagement.com or contact our Investor Relations Department at: SHAREHOLDER INFORMATION SECURITY LISTINGS The common stock of The Phoenix Companies, Inc. is traded on the The Phoenix Companies, Inc. New York Stock Exchange (NYSE) under the symbol "PNX." Our 7.45 Investor Relations percent bond is traded on the NYSE under the symbol "PFX." One American Row P.O. Box 5056, Hartford, CT 06102-5056 Phone: 1-860-403-7100 Fax: 1-860-403-7880 e-mail: pnx.ir@phoenixwm.com
For more information on our products and services, call your Phoenix representative or visit our Web site at PhoenixWealthManagement.com. In addition to financial measures presented in accordance with Generally Accepted Accounting Principles ("GAAP"), Phoenix uses non-GAAP financial measures such as total segment income, total segment income per share, pre-tax segment income and EBITDA in evaluating its financial performance. Net income and net income per share are the most directly comparable GAAP measures. Phoenix's non-GAAP financial measures should not be considered as substitutes for net income and net income per share. Therefore, investors should evaluate both GAAP and non-GAAP financial measures when reviewing Phoenix's performance. A reconciliation of the net income to Phoenix's non-GAAP financial measures is set forth on Pages 2-3 of this document. Because Phoenix's calculation of these measures may differ from similar measures used by other companies, investors should be careful when comparing Phoenix's non-GAAP financial measures to those of other companies. Total segment income, and measures derived from total segment income, are internal performance measures used by Phoenix in the management of its operations, including its compensation plans and planning processes. In addition, management believes that these measures provide investors with additional insight into the underlying trends in Phoenix's operations. Total segment income represents income from continuing operations, which is a GAAP measure, before realized investment gains and losses, and other certain other items. o Net realized investment gains and losses are excluded from total segment income because their size and timing are frequently subject to management's discretion. o Certain other items are excluded from total segment income because we believe they are not indicative of overall operating trends and are items that management believes are infrequent and material and which result from a business restructuring, a change in regulatory environment, or other unusual circumstances. Within its Asset Management segment, management also considers earnings before interest, taxes, depreciation and amortization ("EBITDA"). Management believes EBITDA provides additional perspective on the operating efficiency and profitability of the Asset Management segment. EBITDA represents pre-tax segment income before depreciation and amortization of goodwill and intangibles. THE PHOENIX COMPANIES, INC. FINANCIAL SUPPLEMENT JUNE 2006 (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.......................................................... 22 Consolidated Statement of Income - GAAP Format............................... 24 Consolidating Second Quarter 2006 Income Statement........................... 26 Condensed Consolidated Balance Sheet -- Preliminary.......................... 27 General Account Investment Portfolio Summary................................. 28 General Account GAAP Net Investment Income Yields............................ 29 General Account Realized Investment Gains and Losses......................... 31 THE PHOENIX COMPANIES, INC. FINANCIAL HIGHLIGHTS Second Quarter 2006 (unaudited) (amount in millions, except per share data)
BALANCE SHEET INFORMATION For the Period Ended: December 31, YTD June --------------------------------------------------------- 2006 2005 2004 2003 2002 ------------- ------------- ------------- ------------- ------------- General Account Invested Assets $ 15,964.7 $ 16,717.2 $ 17,334.6 $ 17,242.8 $ 16,812.8 Separate Account Assets 7,899.0 7,722.2 6,950.3 6,083.2 4,371.2 Total Assets 27,305.9 27,716.2 28,362.6 27,559.2 25,235.9 Indebtedness 713.4 751.9 690.8 639.0 644.3 Total Stockholders' Equity 2,132.1 2,007.1 2,022.4 1,947.8 1,826.8 Total Stockholders' Equity, excluding SFAS 115, other accumulated OCI and FIN 46-R 2,281.9 2,118.9 $ 2,018.5 $ 1,925.3 $ 1,937.1 Average Equity, excluding other accumulated OCI, FIN 46-R and Discontinued Operations (1) $ 2,217.8 $ 2,028.6 Debt to Total Capitalization 25.1% 27.3% 25.5% 24.7% 24.1% Book Value Per Share $ 18.77 $ 21.10 $ 21.32 $ 20.62 $ 19.43 Book Value Per Share, excluding SFAS 115 and other accumulated OCI $ 19.61 $ 21.72 $ 20.70 $ 19.96 $ 20.19 Book Value Per Share, excluding SFAS 115, other accumulated OCI and FIN 46-R $ 20.09 $ 22.28 $ 21.27 $ 20.39 $ 20.64 Period-end Common Shares Outstanding (2) 113.6 95.1 94.9 94.4 94.0 ============= ============= ============= ============= ============= - ------------------------------------------------------------------------------------------------------------------------------------ INDEBTEDNESS: Surplus Notes $ 204.2 $ 204.2 $ 204.1 $ 175.0 $ 175.0 Senior Unsecured Bonds - due 2008 153.7 153.7 153.7 153.7 153.7 Senior Unsecured Bonds - due 2032 300.0 300.0 300.0 300.0 300.0 Interest Rate Swap (1.7) 2.0 8.0 10.3 15.6 Bank Credit Facility 25.0 25.0 Other 57.2 67.0 ------------- ------------- ------------- ------------- ------------- Total Indebtedness $ 713.4 $ 751.9 $ 690.8 $ 639.0 $ 644.3 ============= ============= ============= ============= ============= - ------------------------------------------------------------------------------------------------------------------------------------ STATUTORY FINANCIAL DATA FOR PHOENIX LIFE INSURANCE COMPANY (2) Capital, Surplus and Surplus Notes $ 934.5 $ 885.5 $ 814.6 $ 762.9 $ 861.0 Asset Valuation Reserve (AVR) 178.3 210.7 213.6 198.6 147.0 ------------- ------------- ------------- ------------- ------------- Capital, Surplus, Surplus Notes and AVR $ 1,112.8 $ 1,096.2 $ 1,028.2 $ 961.5 $ 1,008.0 ============= ============= ============= ============= ============= Policyholder Dividend Liability $ 368.7 $ 356.1 $ 403.3 $ 408.5 $ 403.0 Interest Maintenance Reserve $ (34.4) $ (23.1) $ (31.3) $ (30.2) $ (2.0) Statutory Gain From Operations $ 38.5 $ 106.2 $ 35.1 $ 69.7 $ 44.5 Statutory Net Income $ 66.3 $ 61.0 $ 47.1 $ 21.5 $ 7.5 -------------
(1) This average equity is used for the calculation of segment 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) Phoenix Life Insurance Company is required to file financial statements with state regulatory authorities prepared on an accounting basis prescribed or permitted by the Insurance Department of the State of New York. June 2006 amounts are preliminary. 1 THE PHOENIX COMPANIES, INC. FINANCIAL HIGHLIGHTS Second Quarter 2006 (unaudited) (amount in millions, except per share data)
INCOME STATEMENT SUMMARY YTD June December 31, ---------------------------- ---------------------------------------------------------- 2006 2005 2005 2004 2003 2002 ------------- ------------- ------------- ------------- ------------- ------------- SEGMENT INCOME Life Insurance (1) $ 74.7 $ 106.3 $ 180.5 $ 130.1 $ 100.5 $ 99.8 Annuities (1) 6.2 (3.6) 12.0 12.7 (1.1) (19.5) ------------- ------------- ------------- ------------- ------------- ------------- Life and Annuity Segment 80.9 102.7 192.5 142.8 99.4 80.3 Asset Management Segment (33.3) (1.6) (10.5) 0.1 (8.7) (69.9) Venture Capital Segment (2) 0.5 14.8 19.3 36.2 (59.3) Corporate and Other Segment (31.3) (32.7) (69.6) (59.1) (47.8) (40.0) ------------- ------------- ------------- ------------- ------------- ------------- TOTAL SEGMENT INCOME (LOSS), BEFORE INCOME TAXES 16.3 68.9 127.2 103.1 79.1 (88.9) Applicable Income Taxes (Benefit) 2.1 21.2 25.5 22.5 21.8 (28.5) ------------- ------------- ------------- ------------- ------------- ------------- TOTAL SEGMENT INCOME (LOSS) 14.2 47.7 101.7 80.6 57.3 (60.4) Net Realized Investment Gains (Losses) 14.3 0.5 25.5 5.7 3.2 (39.3) Realized (losses)-Investments Pledged as Collateral Consolidated Under FIN 46-R (0.9) (0.8) 1.3 (12.9) (2.4) (26.3) Realized and Unrealized Gains (Losses) on Equity Investment in Aberdeen (7.0) (7.0) 55.9 (55.0) Share of Aberdeen's Extraordinary Charge for FSA Settlement (14.7) Surplus Notes Tender Costs (6.4) Management Restructuring and Early Retirement Costs (6.3) (8.6) (12.4) (21.9) (8.5) (28.5) Deferred Policy Acquisition Cost Adjustments 15.1 Demutualization Related Items, Net (1.3) Other income 1.3 ------------- ------------- ------------- ------------- ------------- ------------- INCOME (LOSS) FROM CONTINUING OPERATIONS 21.3 31.8 109.1 86.3 (4.1) (140.7) Income (Loss) from Discontinued Operations (0.7) 0.1 (2.1) (1.3) ------------- ------------- ------------- ------------- ------------- ------------- INCOME (LOSS) BEFORE CUMULATIVE EFFECT OF ACCOUNTING CHANGES 21.3 31.8 108.4 86.4 (6.2) (142.0) Cumulative Effect of Accounting changes (130.3) ------------- ------------- ------------- ------------- ------------- ------------- NET INCOME (LOSS) $ 21.3 $ 31.8 $ 108.4 $ 86.4 $ (6.2) $ (272.3) ============= ============= ============= ============= ============= ============= - ------------------------------------------------------------------------------------------------------------------------------------ EARNINGS PER SHARE BASIC Weighted-Average Shares Outstanding 108.2 95.0 95.0 94.7 94.2 97.9 ------------- ------------- ------------- ------------- ------------- ------------- Total Segment Income (Loss) Per Share $ 0.13 $ 0.50 $ 1.07 $ 0.85 $ 0.61 $ (0.62) Net Income (Loss) Per Share $ 0.20 $ 0.33 $ 1.14 $ 0.91 $ (0.07) $ (2.78) DILUTED Weighted-Average Shares Outstanding and dilutive potential common shares (3) 111.3 101.7 102.4 100.8 96.6 97.9 ------------- ------------- ------------- ------------- ------------- ------------- Total Segment Income (Loss) Per Share $ 0.13 $ 0.47 $ 0.99 $ 0.80 $ 0.59 $ (0.62) Net Income (Loss) Per Share $ 0.19 $ 0.31 $ 1.06 $ 0.86 $ (0.07) $ (2.78) =============
(1) Within the Life and Annuity segment, certain product lines have been reclassified from Other Life and Annuity and combined with the appropriate major product line. See additional information on page 4 of this supplement. This reclassification has been made for all periods presented. (2) 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. (3) For the twelve months ended December 31, 2003, the weighted average common shares outstanding and dilutive potential common shares were 100.8 million. For the calculation of net loss per share, dilutive potential shares were not included because their effect would have been anti-dilutive. 2 THE PHOENIX COMPANIES, INC. INCOME STATEMENT Second Quarter 2006 (unaudited) (amount in millions, except per share data)
SEGMENT INCOME 2005 2006 Quarters ended ---------------------------------------------------------- ---------------------------- March June September December March June ------------- ------------- ------------- ------------- ------------- ------------- Life Insurance (1) $ 38.0 $ 68.3 $ 38.1 $ 36.1 $ 32.6 $ 42.1 Annuities (1) 6.0 (9.6) 6.9 8.7 5.7 0.5 ------------- ------------- ------------- ------------- ------------- ------------- Life and Annuity Segment 44.0 58.7 45.0 44.8 38.3 42.6 Asset Management Segment (1.7) 0.1 (10.1) 1.2 (34.6) 1.3 Venture Capital Segment (2) (2.2) 2.7 12.7 1.6 Corporate and Other Segment (16.3) (16.4) (18.7) (18.2) (17.4) (13.9) ------------- ------------- ------------- ------------- ------------- ------------- TOTAL SEGMENT INCOME (LOSS), BEFORE INCOME TAXES 23.8 45.1 28.9 29.4 (13.7) 30.0 Applicable Income Taxes (Benefit) 7.0 14.2 2.5 1.8 (7.5) 9.6 ------------- ------------- ------------- ------------- ------------- ------------- TOTAL SEGMENT INCOME (LOSS) 16.8 30.9 26.4 27.6 (6.2) 20.4 Net Realized Investment Gains (Losses) 1.1 (0.6) 1.1 23.9 11.4 2.9 Realized Gains (Losses) - Investments Pledged as Collateral Consolidated Under FIN 46-R 0.4 (1.2) 0.9 1.2 (1.0) 0.1 Realized and Unrealized Losses on Equity Investment in Aberdeen (7.0) Management Restructuring and Early Retirement Costs (1.9) (6.7) (1.3) (2.5) (2.5) (3.8) ------------- ------------- ------------- ------------- ------------- ------------- INCOME FROM CONTINUING OPERATIONS 9.4 22.4 27.1 50.2 1.7 19.6 Loss from Discontinued Operations (0.7) ------------- ------------- ------------- ------------- ------------- ------------- NET INCOME $ 9.4 $ 22.4 $ 26.4 $ 50.2 $ 1.7 $ 19.6 ============= ============= ============= ============= ============= ============= - ------------------------------------------------------------------------------------------------------------------------------------ EARNINGS PER SHARE BASIC Weighted-Average Shares Outstanding 94.9 95.0 95.1 95.1 103.6 112.7 ------------- ------------- ------------- ------------- ------------- ------------- Total Segment Income (Loss) Per Share $ 0.18 $ 0.32 $ 0.28 $ 0.29 $ (0.06) $ 0.18 Net Income Per Share $ 0.10 $ 0.24 $ 0.28 $ 0.53 $ 0.02 $ 0.17 DILUTED Weighted-Average Shares Outstanding and dilutive potential common shares 102.3 101.1 102.4 103.5 106.2 115.9 ------------- ------------- ------------- ------------- ------------- ------------- Total Segment Income (Loss) Per Share $ 0.16 $ 0.31 $ 0.26 $ 0.27 $ (0.06) $ 0.18 Net Income Per Share $ 0.09 $ 0.22 $ 0.26 $ 0.48 $ 0.02 $ 0.17 -------------
(1) Within the Life and Annuity segment, certain product lines have been reclassified from Other Life and Annuity and combined with the appropriate major product line. See additional information on page 4 of this supplement. This reclassification has been made for all periods presented. (2) 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. 3 THE PHOENIX COMPANIES, INC. LIFE AND ANNUITY EARNINGS SUMMARY Second Quarter 2006 (unaudited) ($ in millions)
SEGMENT INCOME YTD June December 31, ---------------------------- ---------------------------------------------------------- 2006 2005 2005 2004 2003 2002 ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- Variable Universal Life $ 17.7 $ 46.9 $ 69.6 $ 35.7 $ 35.0 $ 35.9 Universal Life (1) 19.3 33.3 47.9 34.4 21.7 26.3 Other Life and Annuity (2) (3) 1.3 1.0 1.5 1.6 0.2 (0.7) ------------- ------------- ------------- ------------- ------------- ------------- TOTAL, NON-TRADITIONAL LIFE 38.3 81.2 119.0 71.7 56.9 61.5 Traditional Life (3) 36.4 25.1 61.5 58.4 43.6 38.3 ------------- ------------- ------------- ------------- ------------- ------------- TOTAL, LIFE INSURANCE 74.7 106.3 180.5 130.1 100.5 99.8 Annuities (3) 6.2 (3.6) 12.0 12.7 (1.1) (19.5) ------------- ------------- ------------- ------------- ------------- ------------- SEGMENT INCOME, BEFORE INCOME TAXES 80.9 102.7 192.5 142.8 99.4 80.3 Allocated Income Taxes (4) 25.0 33.1 51.3 36.4 31.1 28.0 ------------- ------------- ------------- ------------- ------------- ------------- SEGMENT INCOME $ 55.9 $ 69.6 $ 141.2 $ 106.4 $ 68.3 $ 52.3 ============= ============= ============= ============= ============= =============
(1) Universal Life includes interest sensitive whole life contracts. (2) Other Life and Annuity includes WS Griffith prior to 2005. (3) Certain product lines have been reclassified from Other Life and Annuity to the appropriate major product line. Specifically, term life and an old block of corporate owned life insurance were combined with participating life insurance and renamed Traditional Life. Also, single premium deposit annuities, single premium immediate annuities, flexible annuities and certain other annuity product lines were combined with Annuities. These reclassifications have been made for all periods presented. (4) Tax benefits related to tax advantaged investments have been allocated to the Life and Annuity Segment beginning in the quarter ended March 2003. 4 THE PHOENIX COMPANIES, INC. LIFE AND ANNUITY EARNINGS SUMMARY Second Quarter 2006 (unaudited) ($ in millions)
SEGMENT INCOME 2005 2006 Quarters ended ---------------------------------------------------------- ---------------------------- March June September December March June ------------- ------------- ------------- ------------- ------------- ------------- Variable Universal Life $ 9.1 $ 37.8 $ 13.9 $ 8.8 $ 8.5 $ 9.2 Universal Life (1) 10.3 23.1 7.6 7.0 7.9 11.4 Other Life and Annuity (2) (3) 0.4 0.5 0.5 0.4 0.9 ------------- ------------- ------------- ------------- ------------- ------------- TOTAL, NON-TRADITIONAL LIFE 19.8 61.4 21.5 16.3 16.8 21.5 Traditional Life (3) 18.2 6.9 16.6 19.8 15.8 20.6 ------------- ------------- ------------- ------------- ------------- ------------- TOTAL, LIFE INSURANCE 38.0 68.3 38.1 36.1 32.6 42.1 Annuities (3) 6.0 (9.6) 6.9 8.7 5.7 0.5 ------------- ------------- ------------- ------------- ------------- ------------- SEGMENT INCOME, BEFORE INCOME TAXES 44.0 58.7 45.0 44.8 38.3 42.6 Allocated Income Taxes 14.0 19.1 8.6 9.6 12.0 13.0 ------------- ------------- ------------- ------------- ------------- ------------- SEGMENT INCOME $ 30.0 $ 39.6 $ 36.4 $ 35.2 $ 26.3 $ 29.6 ============= ============= ============= ============= ============= =============
(1) Universal Life includes interest sensitive whole life contracts. (2) Other Life and Annuity includes WS Griffith prior to 2005. (3) Certain product lines have been reclassified from Other Life and Annuity to the appropriate major product line. Specifically, term life and an old block of corporate owned life insurance were combined with participating life insurance and renamed Traditional Life. Also, single premium deposit annuities, single premium immediate annuities, flexible annuities and certain other annuity product lines were combined with annuities. These reclassifications have been made for all periods presented. 5 THE PHOENIX COMPANIES, INC. VARIABLE UNIVERSAL LIFE Second Quarter 2006 (unaudited) ($ in millions)
YTD June December 31, ---------------------------- ---------------------------------------------------------- 2006 2005 2005 2004 2003 2002 ------------- ------------- ------------- ------------- ------------- ------------- PRE-TAX INCOME Fees $ 14.7 $ 17.7 $ 32.5 $ 29.6 $ 30.1 $ 31.4 Cost of Insurance (COI) 39.0 38.1 76.7 74.6 72.1 66.4 Interest Earned 3.5 3.0 6.3 5.9 5.6 7.0 Surrender Charges 3.9 3.6 7.1 6.9 6.9 4.4 ------------- ------------- ------------- ------------- ------------- ------------- TOTAL REVENUES 61.1 62.4 122.6 117.0 114.7 109.2 ------------- ------------- ------------- ------------- ------------- ------------- Net Death and Disability Benefits 15.6 17.2 28.5 30.5 23.2 22.9 Interest Credited 2.0 2.4 4.6 3.7 3.6 3.7 DAC Amortized 13.6 (16.8) (4.4) 22.2 20.8 16.6 Operating Expenses 12.2 12.7 24.3 24.9 32.1 30.1 ------------- ------------- ------------- ------------- ------------- ------------- TOTAL EXPENSES 43.4 15.5 53.0 81.3 79.7 73.3 ------------- ------------- ------------- ------------- ------------- ------------- OPERATING INCOME BEFORE TAX $ 17.7 $ 46.9 $ 69.6 $ 35.7 $ 35.0 $ 35.9 ============= ============= ============= ============= ============= ============= - ------------------------------------------------------------------------------------------------------------------------------------ OPERATING EXPENSES Commissions and Concessions $ 6.3 $ 6.9 $ 13.6 $ 16.3 $ 21.4 $ 36.6 Controllable Expenses and Other 15.5 14.3 26.8 34.0 44.6 61.6 ------------ - ------------- ------------- ------------- ------------- ------------- TOTAL CURRENT EXPENSES 21.8 21.2 40.4 50.3 66.0 98.2 Deferred Acquisition Costs (9.6) (8.5) (16.1) (25.4) (33.9) (68.1) ------------- ------------- ------------- ------------- ------------- ------------- OPERATING EXPENSES $ 12.2 $ 12.7 $ 24.3 $ 24.9 $ 32.1 $ 30.1 ============= ============= ============= ============= ============= ============= - ------------------------------------------------------------------------------------------------------------------------------------ FUNDS UNDER MANAGEMENT Deposits $ 98.8 $ 112.3 $ 217.9 $ 245.5 $ 353.4 $ 465.7 Surrenders (69.3) (47.0) (94.2) (75.4) (69.4) (37.6) ------------- ------------- ------------- ------------- ------------- ------------- NET SALES 29.5 65.3 123.7 170.1 284.0 428.1 Deaths (3.5) (1.6) (3.6) (2.2) (1.4) (1.8) Interest Credited 84.5 12.7 141.5 170.0 262.7 (150.6) Fees (15.0) (15.2) (30.3) (31.0) (36.4) (35.8) Cost of Insurance (37.8) (37.0) (74.6) (72.4) (69.8) (66.4) ------------- ------------- ------------- ------------- ------------- ------------- CHANGE IN FUM 57.7 24.2 156.7 234.5 439.1 173.5 Beginning Balance 2,099.8 1,943.1 1,943.1 1,708.6 1,269.5 1,096.0 ------------- ------------- ------------- ------------- ------------- ------------- ENDING FUND BALANCE $ 2,157.5 $ 1,967.3 $ 2,099.8 $ 1,943.1 $ 1,708.6 $ 1,269.5 ============= ============= ============= ============= ============= ============= Life Insurance In Force (1) $ 24,257.5 $ 25,041.0 $ 24,767.7 $ 25,382.0 $ 24,603.0 $ 23,788.2 ============= ============= ============= ============= ============= =============
(1) 2006, 2005 and 2004 face amounts updated to include the term rider face amounts for all variable universal life products. 6 THE PHOENIX COMPANIES, INC. VARIABLE UNIVERSAL LIFE Second Quarter 2006 (unaudited) ($ in millions)
2005 2006 Quarters ended ---------------------------------------------------------- ---------------------------- March June September December March June ------------- ------------- ------------- ------------- ------------- ------------- PRE-TAX INCOME Fees $ 7.4 $ 10.3 $ 6.9 $ 8.0 $ 7.2 $ 7.5 Cost of Insurance (COI) 19.0 19.1 19.2 19.4 19.6 19.4 Interest Earned 1.5 1.4 2.0 1.3 1.6 1.9 Surrender Charges 1.9 1.7 1.6 1.8 2.1 1.8 ------------- ------------- ------------- ------------- ------------- ------------- TOTAL REVENUES 29.8 32.5 29.7 30.5 30.5 30.6 ------------- ------------- ------------- ------------- ------------- ------------- Net Death and Disability Benefits 8.9 8.3 3.9 7.3 8.3 7.3 Interest Credited 1.2 1.1 1.1 1.1 1.0 1.0 DAC Amortized 4.3 (21.1) 4.4 8.0 6.8 6.8 Operating Expenses 6.3 6.4 6.4 5.3 5.9 6.3 ------------- ------------- ------------- ------------- ------------- ------------- TOTAL EXPENSES 20.7 (5.3) 15.8 21.7 22.0 21.4 ------------- ------------- ------------- ------------- ------------- ------------- OPERATING INCOME BEFORE TAX $ 9.1 $ 37.8 $ 13.9 $ 8.8 $ 8.5 $ 9.2 ============= ============= ============= ============= ============= ============= - ------------------------------------------------------------------------------------------------------------------------------------ OPERATING EXPENSES Commissions and Concessions 3.6 3.4 3.3 3.4 2.9 3.4 Controllable Expenses and Other 6.8 7.4 6.9 5.6 6.8 8.7 ------------- ------------- ------------- ------------- ------------- ------------- TOTAL CURRENT EXPENSES 10.4 10.8 10.2 9.0 9.7 12.1 Deferred Acquisition Costs (4.1) (4.4) (3.8) (3.7) (3.8) (5.8) ------------- ------------- ------------- ------------- ------------- ------------- OPERATING EXPENSES $ 6.3 $ 6.4 $ 6.4 $ 5.3 $ 5.9 $ 6.3 ============= ============= ============= ============= ============= ============= - ------------------------------------------------------------------------------------------------------------------------------------ FUNDS UNDER MANAGEMENT Deposits $ 63.3 $ 49.0 $ 43.1 $ 62.5 $ 46.0 $ 52.8 Surrenders (27.4) (19.6) (24.1) (23.1) (19.2) (50.1) ------------- ------------- ------------- ------------- ------------- ------------- NET SALES 35.9 29.4 19.0 39.4 26.8 2.7 Deaths (0.9) (0.7) (0.2) (1.8) (2.7) (0.8) Interest Credited (9.3) 22.0 79.0 49.8 101.0 (16.5) Fees (7.5) (7.7) (7.3) (7.8) (7.1) (7.9) Cost of Insurance (18.4) (18.6) (18.7) (18.9) (18.9) (18.9) ------------- ------------- ------------- ------------- ------------- ------------- CHANGE IN FUM (0.2) 24.4 71.8 60.7 99.1 (41.4) Beginning Balance 1,943.1 1,942.9 1,967.3 2,039.1 2,099.8 2,198.9 ------------- ------------- ------------- ------------- ------------- ------------- ENDING FUND BALANCE $ 1,942.9 $ 1,967.3 $ 2,039.1 $ 2,099.8 $ 2,198.9 $ 2,157.5 ============= ============= ============= ============= ============= ============= Life Insurance In Force (1) $ 25,189.9 $ 25,041.0 $ 24,930.2 $ 24,767.7 $ 24,652.2 $ 24,257.5 ============= ============= ============= ============= ============= =============
(1) 2006 and 2005 face amounts updated to include the term rider face amounts for all variable universal life products. 7 THE PHOENIX COMPANIES, INC. UNIVERSAL LIFE / INTEREST SENSITIVE Second Quarter 2006 (unaudited) ($ in millions)
YTD June December 31, ---------------------------- ---------------------------------------------------------- 2006 2005 2005 2004 2003 2002 ------------- ------------- ------------- ------------- ------------- ------------- PRE-TAX INCOME Fees $ 13.4 $ 5.9 $ 17.9 $ 19.1 $ 17.3 $ 11.9 Cost of Insurance (COI) 86.5 48.9 109.9 90.7 78.9 71.6 Interest Earned 56.1 51.6 108.7 100.4 98.2 108.4 Surrender Charges 1.3 1.2 3.2 3.2 2.5 3.9 ------------- ------------- ------------- ------------- ------------- ------------- TOTAL REVENUES 157.3 107.6 239.7 213.4 196.9 195.8 ------------- ------------- ------------- ------------- ------------- ------------- Net Death and Disability Benefits 51.5 27.6 61.8 58.4 51.4 39.5 Interest Credited 39.2 36.8 74.5 74.6 78.0 85.7 DAC Amortized 23.3 (4.0) 17.9 20.3 17.7 16.7 Operating Expenses 24.0 13.9 37.6 25.7 28.1 27.6 ------------- ------------- ------------- ------------- ------------- ------------- TOTAL EXPENSES 138.0 74.3 191.8 179.0 175.2 169.5 ------------- ------------- ------------- ------------- ------------- ------------- OPERATING INCOME BEFORE TAX $ 19.3 $ 33.3 $ 47.9 $ 34.4 $ 21.7 $ 26.3 ============= ============= ============= ============= ============= ============= - ------------------------------------------------------------------------------------------------------------------------------------ OPERATING EXPENSES Commissions and Concessions $ 48.8 $ 12.5 $ 51.1 $ 24.9 $ 28.2 $ 15.2 Controllable Expenses and Other 83.8 30.1 96.5 64.3 74.8 52.6 ------------- ------------- ------------- ------------- ------------- ------------- TOTAL CURRENT EXPENSES 132.6 42.6 147.6 89.2 103.0 67.8 Deferred Acquisition Costs (108.6) (28.7) (110.0) (63.5) (74.9) (40.2) ------------- ------------- ------------- ------------- ------------- ------------- OPERATING EXPENSES $ 24.0 $ 13.9 $ 37.6 $ 25.7 $ 28.1 $ 27.6 ============= ============= ============= ============= ============= ============= - ------------------------------------------------------------------------------------------------------------------------------------ FUNDS UNDER MANAGEMENT Deposits $ 209.2 $ 112.6 $ 297.8 $ 229.4 $ 217.8 $ 149.3 Surrenders (43.8) (48.0) (94.1) (126.2) (118.6) (107.4) ------------- ------------- ------------- ------------- ------------- ------------- NET SALES 165.4 64.6 203.7 103.2 99.2 41.9 Deaths (12.2) (11.6) (22.3) (16.9) (19.4) (25.0) Interest Credited 39.2 36.9 78.7 74.6 78.0 85.8 Fees (17.9) (10.1) (26.8) (23.5) (24.9) (16.7) Cost of Insurance (86.5) (48.9) (109.9) (90.7) (78.9) (71.6) ------------- ------------- ------------- ------------- ------------- ------------- CHANGE IN FUM 88.0 30.9 123.4 46.7 54.0 14.4 Beginning Balance 1,734.1 1,610.7 1,610.7 1,564.0 1,510.0 1,495.6 ------------- ------------- ------------- ------------- ------------- ------------- ENDING FUND BALANCE $ 1,822.1 $ 1,641.6 $ 1,734.1 $ 1,610.7 $ 1,564.0 $ 1,510.0 ============= ============= ============= ============= ============= ============= Life Insurance In Force $ 18,217.0 $ 14,583.3 $ 16,303.0 $ 14,103.7 $ 12,830.3 $ 10,476.7 ============= ============= ============= ============= ============= =============
8 THE PHOENIX COMPANIES, INC. UNIVERSAL LIFE / INTEREST SENSITIVE Second Quarter 2006 (unaudited) ($ in millions)
2005 2006 Quarters ended ---------------------------------------------------------- ---------------------------- March June September December March June ------------- ------------- ------------- ------------- ------------- ------------- PRE-TAX INCOME Fees $ 4.7 $ 1.2 $ 4.9 $ 7.1 $ 8.0 $ 5.4 Cost of Insurance (COI) 24.0 24.9 27.6 33.4 42.0 44.5 Interest Earned 25.4 26.2 28.6 28.5 27.0 29.1 Surrender Charges 0.5 0.7 0.9 1.1 1.0 0.3 ------------- ------------- ------------- ------------- ------------- ------------- TOTAL REVENUES 54.6 53.0 62.0 70.1 78.0 79.3 ------------- ------------- ------------- ------------- ------------- ------------- Net Death and Disability Benefits 13.9 13.5 16.1 18.1 27.6 23.9 Interest Credited 18.5 18.4 18.9 18.8 19.4 19.8 DAC Amortized 6.3 (10.2) 9.1 12.8 9.6 13.7 Operating Expenses 5.6 8.2 10.3 13.4 13.5 10.5 ------------- ------------- ------------- ------------- ------------- ------------- TOTAL EXPENSES 44.3 29.9 54.4 63.1 70.1 67.9 ------------- ------------- ------------- ------------- ------------- ------------- OPERATING INCOME BEFORE TAX $ 10.3 $ 23.1 $ 7.6 $ 7.0 $ 7.9 $ 11.4 ============= ============= ============= ============= ============= ============= - ------------------------------------------------------------------------------------------------------------------------------------ OPERATING EXPENSES Commissions and Concessions $ 5.4 $ 7.1 $ 12.6 $ 26.0 $ 34.7 $ 14.1 Controllable Expenses and Other 13.8 16.2 23.1 43.3 51.6 32.2 ------------- ------------- ------------- ------------- ------------- ------------- TOTAL CURRENT EXPENSES 19.2 23.3 35.7 69.3 86.3 46.3 Deferred Acquisition Costs (13.6) (15.1) (25.4) (55.9) (72.8) (35.8) ------------- ------------- ------------- ------------- ------------- ------------- OPERATING EXPENSES $ 5.6 $ 8.2 $ 10.3 $ 13.4 $ 13.5 $ 10.5 ============= ============= ============= ============= ============= ============= - ------------------------------------------------------------------------------------------------------------------------------------ FUNDS UNDER MANAGEMENT Deposits $ 54.9 $ 57.7 $ 73.9 $ 111.3 $ 135.5 $ 73.7 Surrenders (23.3) (24.7) (27.4) (18.7) (22.5) (21.3) ------------- ------------- ------------- ------------- ------------- ------------- NET SALES 31.6 33.0 46.5 92.6 113.0 52.4 Deaths (4.6) (7.0) (5.8) (4.9) (6.8) (5.4) Interest Credited 18.5 18.4 18.8 23.0 19.4 19.8 Fees (4.9) (5.2) (7.1) (9.6) (11.4) (6.5) Cost of Insurance (24.0) (24.9) (27.6) (33.4) (42.0) (44.5) ------------- ------------- ------------- ------------- ------------- ------------- CHANGE IN FUM 16.6 14.3 24.8 67.7 72.2 15.8 Beginning Balance 1,610.7 1,627.3 1,641.6 1,666.4 1,734.1 1,806.3 ------------- ------------- ------------- ------------- ------------- ------------- ENDING FUND BALANCE $ 1,627.3 $ 1,641.6 $ 1,666.4 $ 1,734.1 $ 1,806.3 $ 1,822.1 ============= ============= ============= ============= ============= ============= Life Insurance In Force $ 14,328.7 $ 14,583.3 $ 15,126.3 $ 16,303.0 $ 17,667.4 $ 18,217.0 ============= ============= ============= ============= ============= =============
9 THE PHOENIX COMPANIES, INC. LIFE AND PRIVATE PLACEMENT SALES Second Quarter 2006 (unaudited) ($ in millions)
LIFE INSURANCE SALES YTD June December 31, ---------------------------- ---------------------------------------------------------- 2006 2005 2005 2004 2003 2002 ------------- ------------- ------------- ------------- ------------- ------------- WHOLESALER CHANNEL Variable Universal Life $ 7.7 $ 9.8 $ 16.1 $ 18.2 $ 30.1 $ 62.5 Universal Life/Interest Sensitive 113.7 25.0 104.4 47.5 67.5 36.9 Term Life 10.0 7.6 16.4 15.3 19.2 15.1 Participating Whole Life 0.6 4.8 ------------- ------------- ------------- ------------- ------------- ------------- Life Insurance Annualized Premium (1) 131.4 42.4 136.9 81.0 117.4 119.3 ============= ============= ============= ============= ============= ============= Variable Universal Life 3.2 2.4 6.4 10.8 20.1 25.1 Universal Life/Interest Sensitive 27.1 19.8 49.2 53.2 61.6 29.9 Participating Whole Life 0.8 ------------- ------------- ------------- ------------- ------------- ------------- Life Insurance Single Premium 30.3 22.2 55.6 64.0 81.7 55.8 ============= ============= ============= ============= ============= ============= Variable Universal Life 10.9 12.2 22.5 29.0 50.2 87.6 Universal Life/Interest Sensitive 140.8 44.8 153.6 100.7 129.1 66.8 Term Life 10.0 7.6 16.4 15.3 19.2 15.1 Participating Whole Life 0.6 5.6 ------------- ------------- ------------- ------------- ------------- ------------- Total Wholesaler Life Insurance Premium (2) $ 161.7 $ 64.6 $ 192.5 $ 145.0 $ 199.1 $ 175.1 ============= ============= ============= ============= ============= ============= PRIVATE PLACEMENT LIFE AND ANNUITY DEPOSITS Variable Universal Life (annualized and single) $ 25.8 $ 25.6 $ 46.5 $ 60.1 $ 149.5 $ 222.5 Annuity 46.0 499.5 773.8 152.6 394.9 142.6 ------------- ------------- ------------- ------------- ------------- ------------- Total Private Placement Life and Annuity Deposits $ 71.8 $ 525.1 $ 820.3 $ 212.7 $ 544.4 $ 365.1 ============= ============= ============= ============= ============= ============= PRIVATE PLACEMENT FUNDS UNDER MANAGEMENT $ 2,912.2 $ 2,343.1 $ 2,776.4 $ 1,898.5 $ 1,535.5 $ 864.7 ============= ============= ============= ============= ============= =============
(1) Annualized Premium represents first year premiums on an annual basis. (2) Total Premium represents Annualized and Single premiums. 10 THE PHOENIX COMPANIES, INC. LIFE AND PRIVATE PLACEMENT SALES Second Quarter 2006 (unaudited) ($ in millions)
2005 2006 LIFE INSURANCE SALES ---------------------------------------------------------- ---------------------------- Quarters ended March June September December March June ------------- ------------- ------------- ------------- ------------- ------------- WHOLESALER CHANNEL Variable Universal Life $ 6.2 $ 3.5 $ 3.1 $ 3.2 $ 2.8 $ 4.9 Universal Life/Interest Sensitive 10.8 14.1 22.5 56.9 83.5 30.2 Term Life 3.8 3.8 3.9 5.0 5.5 4.5 ------------- ------------ ------------ ------------ ------------ ------------ Life Insurance Annualized Premium (1) 20.8 21.4 29.5 65.1 91.8 39.6 ============= ============= ============= ============= ============= ============= Variable Universal Life 0.8 1.6 1.8 2.3 1.1 2.1 Universal Life/Interest Sensitive 8.5 11.4 11.6 17.7 18.0 9.1 ------------- ------------ ------------ ------------ ------------ ------------ Life Insurance Single Premium 9.3 13.0 13.4 20.0 19.1 11.2 ============= ============= ============= ============= ============= ============= Variable Universal Life 7.0 5.1 4.9 5.5 3.9 7.0 Universal Life/Interest Sensitive 19.3 25.5 34.2 74.6 101.5 39.3 Term Life 3.8 3.8 3.8 5.0 5.5 4.5 ------------- ------------ ------------ ------------ ------------ ------------ Total Wholesaler Life Insurance Premium (2) $ 30.1 $ 34.4 $ 42.9 $ 85.1 $ 110.9 $ 50.8 ============= ============= ============= ============= ============= ============= PRIVATE PLACEMENT LIFE AND ANNUITY DEPOSITS Variable Universal Life (annualized and single) $ 14.3 $ 11.3 $ 2.3 $ 18.6 $ 8.5 $ 17.3 Annuity 487.6 11.9 11.0 263.3 3.4 42.6 ------------- ------------ ------------ ------------ ------------ ------------ Total Private Placement Life and Annuity Deposits $ 501.9 $ 23.2 $ 13.3 $ 281.9 $ 11.9 $ 59.9 ============= ============= ============= ============= ============= ============= PRIVATE PLACEMENT FUNDS UNDER MANAGEMENT $ 2,414.5 $ 2,343.1 $ 2,431.6 $ 2,776.4 $ 2,783.9 $ 2,912.2 ============= ============= ============= ============= ============= =============
(1) Annualized Premium represents first year premiums on an annual basis. (2) Total Premium represents Annualized and Single premiums. 11 THE PHOENIX COMPANIES, INC. ANNUITIES Second Quarter 2006 (unaudited) ($ in millions)
YTD June December 31, ---------------------------- ---------------------------------------------------------- 2006 2005 2005 2004 2003 2002 ------------- ------------- ------------- ------------- ------------- ------------- PRE-TAX INCOME Fees $ 33.4 $ 32.6 $ 65.4 $ 63.8 $ 57.2 $ 57.4 Surrender Charges 3.2 3.9 7.0 5.8 7.4 6.6 Interest earned on GIA and Required Interest 69.8 81.5 165.1 158.0 150.1 109.1 ------------- ------------- ------------- ------------- ------------- ------------- TOTAL REVENUES 106.4 118.0 237.5 227.6 214.7 173.1 ------------- ------------- ------------- ------------- ------------- ------------- Mortality Cost 1.7 3.3 6.6 8.9 4.4 12.0 DAC Amortized 27.5 38.3 62.6 35.7 26.5 35.1 Interest Credited 49.3 57.7 112.1 123.2 133.0 99.4 Operating Expenses 21.7 22.3 44.2 47.1 51.8 46.1 ------------- ------------- ------------- ------------- ------------- ------------- TOTAL EXPENSES 100.2 121.6 225.5 214.9 215.7 192.6 ------------- ------------- ------------- ------------- ------------- ------------- OPERATING INCOME (LOSS) BEFORE TAX $ 6.2 $ (3.6) $ 12.0 $ 12.7 $ (1.1) $ (19.5) ============= ============= ============= ============= ============= ============= - ------------------------------------------------------------------------------------------------------------------------------------ OPERATING EXPENSES Commissions and Concessions $ 20.1 $ 19.0 $ 38.2 $ 42.6 $ 51.1 $ 81.4 Controllable Expenses and Other 19.8 18.4 37.9 48.2 66.2 67.3 ------------- ------------- ------------- ------------- ------------- ------------- Total Current Expenses 39.9 37.4 76.1 90.8 117.3 148.7 Deferred Acquisition Costs (18.2) (15.1) (31.9) (43.7) (65.5) (102.6) ------------- ------------- ------------- ------------- ------------- ------------- OPERATING EXPENSES $ 21.7 $ 22.3 $ 44.2 $ 47.1 $ 51.8 $ 46.1 ============= ============= ============= ============= ============= ============= - ------------------------------------------------------------------------------------------------------------------------------------ FUNDS UNDER MANAGEMENT Deposits $ 243.4 $ 674.4 $ 1,113.5 $ 671.2 $ 1,428.3 $ 2,258.4 Surrenders (1,054.0) (564.9) (1,180.9) (803.1) (865.6) (754.4) ------------- ------------- ------------- ------------- ------------- ------------- NET SALES (810.6) 109.5 (67.4) (131.9) 562.7 1,504.0 Deaths (45.9) (40.3) (80.2) (81.6) (71.4) (40.6) Interest Credited 406.0 84.6 545.8 628.2 895.2 (330.6) Fees (31.3) (31.9) (63.0) (59.8) (57.7) (58.8) ------------- ------------- ------------- ------------- ------------- ------------- CHANGE IN FUM (481.8) 121.9 335.2 354.9 1,328.8 1,074.0 Beginning Balance 8,038.1 7,702.9 7,702.9 7,348.0 6,019.2 4,945.2 ------------- ------------- ------------- ------------- ------------- ------------- ENDING FUND BALANCE $ 7,556.3 $ 7,824.8 $ 8,038.1 $ 7,702.9 $ 7,348.0 $ 6,019.2 ============= ============= ============= ============= ============= ============= VA Funds in Guaranteed Interest Accounts (1) $ 1,195.6 $ 1,796.4 $ 1,553.8 $ 1,939.1 $ 2,067.4 $ 2,159.3 ============= ============= ============= ============= ============= ============= Fixed Annuities (1) $ 781.4 $ 1,153.2 $ 1,011.4 $ 1,175.5 $ 1,216.3 $ 902.1 ============= ============= ============= ============= ============= =============
(1) Amounts are included in the annuities funds under management table above. 12 THE PHOENIX COMPANIES, INC. ANNUITIES Second Quarter 2006 (unaudited) ($ in millions)
2005 2006 Quarters ended ---------------------------------------------------------- ---------------------------- March June September December March June ------------- ------------- ------------- ------------- ------------- ------------- PRE-TAX INCOME Fees $ 16.5 $ 16.1 $ 16.3 $ 16.5 $ 16.6 $ 16.8 Surrender Charges 1.9 2.0 1.3 1.8 1.5 1.7 Interest earned on GIA and Required Interest 41.6 39.9 41.0 42.6 35.5 34.3 ------------- ------------- ------------- ------------- ------------- ------------- TOTAL REVENUES 60.0 58.0 58.6 60.9 53.6 52.8 ------------- ------------- ------------- ------------- ------------- ------------- Mortality Cost 1.1 2.2 0.6 2.7 0.3 1.4 DAC Amortized 13.6 24.7 12.3 12.0 11.2 16.3 Interest Credited 29.2 28.5 27.7 26.7 25.1 24.2 Operating Expenses 10.1 12.2 11.1 10.8 11.3 10.4 ------------- ------------- ------------- ------------- ------------- ------------- TOTAL EXPENSES 54.0 67.6 51.7 52.2 47.9 52.3 ------------- ------------- ------------- ------------- ------------- ------------- OPERATING INCOME (LOSS) BEFORE TAX $ 6.0 $ (9.6) $ 6.9 $ 8.7 $ 5.7 $ 0.5 ============= ============= ============= ============= ============= ============= - ------------------------------------------------------------------------------------------------------------------------------------ OPERATING EXPENSES Commissions and Concessions $ 9.8 $ 9.2 $ 9.7 $ 9.5 $ 9.9 $ 10.2 Controllable Expenses and Other 8.5 9.9 9.7 9.8 10.1 9.7 ------------- ------------- ------------- ------------- ------------- ------------- Total Current Expenses 18.3 19.1 19.4 19.3 20.0 19.9 Deferred Acquisition Costs (8.2) (6.9) (8.3) (8.5) (8.7) (9.5) ------------- ------------- ------------- ------------- ------------- ------------- OPERATING EXPENSES $ 10.1 $ 12.2 $ 11.1 $ 10.8 $ 11.3 $ 10.4 ============= ============= ============= ============= ============= ============= - ------------------------------------------------------------------------------------------------------------------------------------ FUNDS UNDER MANAGEMENT Deposits $ 580.9 $ 93.5 $ 92.5 $ 346.6 $ 96.3 $ 147.1 Surrenders (227.5) (337.4) (294.3) (321.7) (490.7) (563.3) ------------- ------------- ------------- ------------- ------------- ------------- NET SALES 353.4 (243.9) (201.8) 24.9 (394.4) (416.2) Deaths (22.3) (18.0) (18.2) (21.7) (22.6) (23.3) Interest Credited (1.0) 85.6 278.9 182.3 319.2 86.8 Fees (16.3) (15.6) (15.4) (15.7) (15.8) (15.5) ------------- ------------- ------------- ------------- ------------- ------------- CHANGE IN FUM 313.8 (191.9) 43.5 169.8 (113.6) (368.2) Beginning Balance 7,702.9 8,016.7 7,824.8 7,868.3 8,038.1 7,924.5 ------------- ------------- ------------- ------------- ------------- ------------- ENDING FUND BALANCE $ 8,016.7 $ 7,824.8 $ 7,868.3 $ 8,038.1 $ 7,924.5 $ 7,556.3 ============= ============= ============= ============= ============= ============= VA Funds in Guaranteed Interest Accounts (1) $ 1,873.8 $ 1,796.4 $ 1,706.1 $ 1,553.8 $ 1,355.0 $ 1,195.6 ============= ============= ============= ============= ============= ============= Fixed Annuities (1) $ 1,165.9 $ 1,153.2 $ 1,203.2 $ 1,011.4 $ 1,005.2 $ 781.4 ============= ============= ============= ============= ============= =============
(1) Amounts are included in the annuities funds under management table above. 13 THE PHOENIX COMPANIES, INC. SUPPLEMENTARY LIFE AND ANNUITY INFORMATION Second Quarter 2006 (unaudited) ($ in millions)
YTD June December 31, ---------------------------- ---------------------------------------------------------- 2006 2005 2005 2004 2003 2002 ------------- ------------- ------------- ------------- ------------- ------------- DEFERRED ACQUISITION COSTS Variable Universal Life $ 348.9 $ 357.8 $ 353.0 $ 332.5 $ 329.3 $ 310.3 Universal Life 439.6 294.6 354.7 262.0 219.2 163.1 Variable Annuities 276.4 281.3 281.3 299.0 291.8 267.9 Fixed Annuities 36.6 40.4 38.8 46.0 45.2 26.3 Participating 551.1 570.2 544.2 577.0 576.3 573.1 Offset for Unrealized Investment Gains and Losses 57.5 (83.6) (16.0) (86.6) (94.1) (106.6) ------------- ------------- ------------- ------------- ------------- ------------- Total $ 1,710.1 $ 1,460.7 $ 1,556.0 $ 1,429.9 $ 1,367.7 $ 1,234.1 ============= ============= ============= ============= ============= ============= - ------------------------------------------------------------------------------------------------------------------------------------ VARIABLE ANNUITY GUARANTEED MINIMUM DEATH BENEFITS Death Benefit in Excess of Fund Value $ 311.4 $ 425.0 $ 335.5 $ 441.1 $ 616.9 $ 1,148.4 Death Benefit in Excess of Fund Value, Net of Reinsurance 75.6 114.0 82.1 123.5 183.0 234.9 Statutory Reserve, Net of Reinsurance 14.0 15.0 13.8 15.0 17.3 15.8 GAAP Reserve, Net of Reinsurance $ 10.5 $ 9.6 $ 10.7 $ 9.1 $ 7.8 $ 8.7 -------------
14 THE PHOENIX COMPANIES, INC. SUPPLEMENTARY LIFE AND ANNUITY INFORMATION Second Quarter 2006 (unaudited) ($ in millions)
2005 2006 Quarters ended ---------------------------------------------------------- ---------------------------- March June September December March June ------------- ------------- ------------- ------------- ------------- ------------- DEFERRED ACQUISITION COSTS Variable Universal Life $ 332.3 $ 357.8 $ 357.2 $ 353.0 $ 349.9 $ 348.9 Universal Life 269.2 294.6 311.0 354.7 417.7 439.6 Variable Annuities 294.9 281.3 280.6 281.3 281.7 276.4 Fixed Annuities 44.7 40.4 39.0 38.8 38.2 36.6 Participating 579.9 570.2 573.3 544.2 548.1 551.1 Offset for Unrealized Investment Gains and Losses (26.7) (83.6) (29.0) (16.0) 22.5 57.5 ------------- ------------- ------------- ------------- ------------- ------------- Total $ 1,494.3 $ 1,460.7 $ 1,532.1 $ 1,556.0 $ 1,658.1 $ 1,710.1 ============= ============== ============= ============= ============= ============= - ------------------------------------------------------------------------------------------------------------------------------------ VARIABLE ANNUITY GUARANTEED MINIMUM DEATH BENEFITS Death Benefit in Excess of Fund Value $ 459.3 $ 425.0 $ 371.1 $ 335.5 $ 291.6 $ 311.4 Death Benefit in Excess of Fund Value, Net of Reinsurance 130.1 114.0 93.1 82.1 66.5 75.6 Statutory Reserve, Net of Reinsurance 15.8 15.0 14.1 13.8 13.2 14.0 GAAP Reserve, Net of Reinsurance $ 9.3 $ 9.6 $ 9.8 $ 10.7 $ 9.3 $ 10.5 ------------
15 THE PHOENIX COMPANIES, INC. ASSET MANAGEMENT Second Quarter 2006 (unaudited) ($ in millions)
SEGMENT INCOME YTD June December 31, ---------------------------- ---------------------------------------------------------- 2006 2005 2005 2004 2003 2002 ------------- ------------- ------------- ------------- ------------- ------------- Investment Management Fees $ 74.0 $ 96.1 $ 182.1 $ 219.0 $ 205.5 $ 219.2 Mutual Funds - Ancillary Fees (1) 22.0 19.9 40.5 38.3 35.5 38.7 Other Revenue 2.4 2.9 5.5 7.7 9.3 10.2 ------------- ------------- ------------- ------------- ------------- ------------- Total Revenues 98.4 118.9 228.1 265.0 250.3 268.1 ------------- ------------- ------------- ------------- ------------- ------------- Employment Expenses 42.4 56.5 103.9 132.6 129.6 134.9 Distribution & Admin Expenses (2) 17.5 16.6 34.3 32.3 28.6 29.9 Other Operating Expenses (1) (2) 23.4 26.6 52.1 53.6 58.1 63.5 Amortization of Intangibles 16.5 16.7 33.2 33.8 33.2 32.5 Intangible Asset Impairments 32.5 10.6 66.3 ------------- ------------- ------------- ------------- ------------- ------------- Total Operating Expenses 132.3 116.4 234.1 252.3 249.5 327.1 ------------- ------------- ------------- ------------- ------------- ------------- Management Income (Loss) (33.9) 2.5 (6.0) 12.7 0.8 (59.0) Other Income - Net 0.6 1.1 2.2 1.7 2.5 1.0 Minority Interest (5.1) (6.7) (14.3) (12.0) (11.9) ------------- ------------- ------------- ------------- ------------- ------------- Segment Income (Loss), before income taxes (33.3) (1.6) (10.5) 0.1 (8.7) (69.9) Applicable Income Taxes (Benefit) (12.8) (0.4) (4.7) 2.3 (3.3) (6.0) ------------- ------------- ------------- ------------- ------------- ------------- Segment Loss $ (20.5) $ (1.2) $ (5.8) $ (2.2) $ (5.4) $ (63.9) ============= ============== ============= ============= ============= =============
(1) Prior to 2004, mutual funds - ancillary fees were presented net of trail commissions. Effective for 2004, trail commissions are presented as other operating expenses and are included in Distribution & Admin Expenses as of the 2nd Quarter 2006. All prior periods have been conformed to the current presentation. (2) Distribution & Admin Expenses are comprised of commissions, finders fees, distribution costs and third party fund accounting costs. These had previously been reported as a component of Other Operating Expenses. 16 THE PHOENIX COMPANIES, INC. ASSET MANAGEMENT Second Quarter 2006 (unaudited) ($ in millions) Quarters ended
2005 2006 SEGMENT INCOME ---------------------------------------------------------- ---------------------------- March June September December March June ------------- ------------- ------------- ------------- ------------- ------------- Investment Management Fees $ 49.5 $ 46.6 $ 46.8 $ 39.3 $ 36.5 $ 37.5 Mutual Funds - Ancillary Fees 9.8 10.1 10.3 10.4 10.6 11.4 Other Revenue 1.3 1.7 1.4 1.1 1.4 1.0 ------------- ------------- ------------- ------------- ------------- ------------- Total Revenues 60.6 58.4 58.5 50.8 48.5 49.9 ------------- ------------- ------------- ------------- ------------- ------------- Employment Expenses 29.2 27.3 26.9 20.5 22.5 19.9 Distribution & Admin Expenses (1) 8.4 8.2 8.9 8.8 8.6 8.9 Other Operating Expenses (1) 13.5 13.1 12.8 13.0 11.8 11.6 Amortization of Intangibles 8.4 8.3 8.3 8.1 8.0 8.4 Intangible Asset Impairments 10.6 32.5 ------------- ------------- ------------- ------------- ------------- ------------- Total Operating Expenses 59.5 56.9 67.5 50.4 83.4 48.9 ------------- ------------- ------------- ------------- ------------- ------------- Management Income (Loss) 1.1 1.5 (9.0) 0.4 (34.9) 1.0 Other Income - Net 0.4 0.6 0.4 0.8 0.3 0.3 Minority Interest (3.2) (2.0) (1.6) ------------- ------------- ------------- ------------- ------------- ------------- Segment Income (Loss), before income taxes (1.7) 0.1 (10.1) 1.2 (34.6) 1.3 Applicable Income Taxes (Benefit) (0.5) 0.1 (4.5) 0.2 (13.4) 0.6 ------------- ------------- ------------- ------------- ------------- ------------- Segment Income (Loss) $ (1.2) $ 0.0 $ (5.6) $ 1.0 $ (21.2) $ 0.7 ============= ============== ============= ============= ============= =============
(1) Distribution & Admin Expenses are comprised of commissions, finders fees, distribution costs and third party fund accounting costs. These had previously been reported as a component of Other Operating Expenses. 17 THE PHOENIX COMPANIES, INC. ASSET MANAGEMENT NET FLOWS AND ASSETS UNDER MANAGEMENT Second Quarter 2006 (unaudited) ($ in millions)
YTD June December 31, --------------------------- ---------------------------------------------------------- 2006 2005 2005 2004 2003 2002 ------------ ------------- ------------- ------------- ------------- ------------- RETAIL PRODUCTS: Managed Accounts - ---------------- Deposits and reinvestments $ 645.3 $ 954.1 $ 1,760.3 $ 2,109.9 $ 2,268.3 $ 4,421.1 Redemptions and withdrawals (2,805.0) (2,692.6) (5,722.8) (5,203.0) (2,656.6) (2,716.3) ------------ ------------- ------------- ------------- ------------- ------------- Net Flows (2,159.7) (1,738.5) (3,962.5) (3,093.1) (388.3) 1,704.8 Performance 113.8 (472.7) (62.6) 950.3 1,537.5 (3,278.2) Acquisitions (dispositions) / Other 71.0 (421.4) (158.0) 7,244.3 ------------ ------------- ------------- ------------- ------------- ------------- Net Change in AUM (1,974.9) (2,632.6) (4,183.1) (2,142.8) 1,149.2 5,670.9 Assets under management, beginning of period 9,332.5 13,515.6 13,515.6 15,658.4 14,509.2 8,838.3 ------------ ------------- ------------- ------------- ------------- ------------- Assets under management, end of period $ 7,357.6 $ 10,883.0 $ 9,332.5 $ 13,515.6 $ 15,658.4 $ 14,509.2 ============ ============= ============= ============= ============= ============= Mutual Funds - ------------ Deposits and reinvestments $ 1,057.7 $ 1,050.5 $ 2,030.4 $ 1,673.2 $ 1,489.2 $ 1,213.2 Redemptions and withdrawals (1,232.7) (1,229.7) (2,444.0) (2,004.5) (1,683.6) (1,983.9) ------------ ------------- ------------- ------------- ------------- ------------- Net Flows (175.0) (179.1) (413.6) (331.3) (194.4) (770.7) Performance 175.0 29.9 184.1 805.9 1,588.8 (2,018.9) Money market funds net change in AUM (276.1) (2.0) (28.4) (28.9) (45.2) (4.4) Acquisitions (dispositions) / Other 10,009.4 141.9 120.1 105.7 (80.6) 54.6 ------------ ------------- ------------- ------------- ------------- ------------- Net Change in AUM 9,733.3 (9.4) (137.8) 551.4 1,268.6 (2,739.4) Assets under management, beginning of period 12,147.2 12,285.0 12,285.0 11,733.6 10,465.0 13,204.4 ------------ ------------- ------------- ------------- ------------- ------------- Assets under management, end of period $ 21,880.5 $ 12,275.6 $ 12,147.2 $ 12,285.0 $ 11,733.6 $ 10,465.0 ============ ============= ============= ============= ============= ============= INSTITUTIONAL PRODUCTS: Deposits and reinvestments $ 813.4 $ 4,507.5 $ 5,545.1 $ 2,885.2 $ 3,230.7 $ 3,419.3 Redemptions and withdrawals (2,408.1) (2,836.9) (6,599.1) (5,389.2) (3,505.3) (4,630.8) ------------ ------------- ------------- ------------- ------------- ------------- Net Flows (1,594.7) 1,670.6 (1,054.0) (2,504.0) (274.6) (1,211.5) Performance 218.1 145.5 367.2 1,140.5 2,333.0 (2,539.6) Acquisitions (dispositions) / Other (129.0) 355.6 (63.3) 234.3 (76.0) 11.5 ------------ ------------- ------------- ------------- ------------- ------------- Net Change in AUM (1,505.6) 2,171.7 (750.1) (1,129.2) 1,982.4 (3,739.6) Assets under management, beginning of period 13,433.4 14,183.5 14,183.5 15,312.7 13,330.3 17,069.9 ------------ ------------- ------------- ------------- ------------- ------------- Assets under management, end of period $ 11,927.8 $ 16,355.2 $ 13,433.4 $ 14,183.5 $ 15,312.7 $ 13,330.3 ============ ============= ============= ============= ============= ============= STRUCTURED FINANCE PRODUCTS: Deposits and reinvestments $ 247.3 $ 0.7 $ 1,002.3 $ 1.7 $ 1.1 $ 1,193.3 Redemptions and withdrawals (665.0) (94.7) (1,157.9) (659.2) (303.1) (244.6) ------------ ------------- ------------- ------------- ------------- ------------- Net Flows (417.7) (94.0) (155.6) (657.5) (302.0) 948.7 Performance 51.8 (35.0) (258.9) 26.0 327.0 (28.8) ------------ ------------- ------------- ------------- ------------- ------------- Net Change in AUM (365.9) (129.0) (414.5) (631.5) 25.0 919.8 Assets under management, beginning of period 2,509.8 2,924.3 2,924.3 3,555.8 3,530.8 2,610.9 ------------ ------------- ------------- ------------- ------------- ------------- Assets under management, end of period $ 2,143.9 $ 2,795.3 $ 2,509.8 $ 2,924.3 $ 3,555.8 $ 3,530.8 ============ ============= ============= ============= ============= ============= TOTAL: Deposits and reinvestments $ 2,763.7 $ 6,512.9 $ 10,338.1 $ 6,670.0 $ 6,989.3 $ 10,246.9 Redemptions and withdrawals (7,110.8) (6,853.9) (15,923.8) (13,255.9) (8,148.6) (9,575.6) ------------ ------------- ------------- ------------- ------------- ------------- Net Flows (4,347.1) (341.1) (5,585.7) (6,585.9) (1,159.3) 671.3 Performance 558.7 (332.3) 229.8 2,922.7 5,786.3 (7,865.5) Money market funds net change in AUM (276.1) (2.0) (28.4) (28.9) (45.2) (4.4) Acquisitions (dispositions) / Other 9,951.4 76.1 (101.2) 340.0 (156.6) 7,310.4 ------------ ------------- ------------- ------------- ------------- ------------- Net Change in AUM 5,886.9 (599.2) (5,485.5) (3,352.1) 4,425.2 111.8 Assets under management, beginning of period 37,422.9 42,908.4 42,908.4 46,260.5 41,835.3 41,723.5 ------------ ------------- ------------- ------------- ------------- ------------- Assets under management, end of period $ 43,309.8 $ 42,309.1 $ 37,422.9 $ 42,908.4 $ 46,260.5 $ 41,835.3 ============ ============= ============= ============= ============= ============= * Variable Products Change in AUM (included in Institutional Products) $ (160.8) $ (177.8) $ (342.3) $ 211.6 $ 200.4 $ (686.5) ============ ============= ============= ============= ============= ============= Money Market balances (1) $ 6,807.8 $ 127.8 $ 101.4 $ 129.8 $ 158.6 $ 203.7 ============ ============= ============= ============= ============= =============
(1) Money Market balances included in Mutual Funds above. 18 THE PHOENIX COMPANIES, INC. ASSET MANAGEMENT NET FLOWS AND ASSETS UNDER MANAGEMENT Second Quarter 2006 (unaudited) ($ in millions)
2005 2006 --------------------------------------------------------- ---------------------------- March June September December March June ------------ ------------- ------------- ------------- ------------- ------------- RETAIL PRODUCTS: Managed Accounts: - ----------------- Deposits and reinvestments $ 508.1 $ 446.0 $ 488.6 $ 317.6 $ 329.1 $ 316.2 Redemptions and withdrawals (1,499.8) (1,192.8) (1,406.0) (1,624.2) (1,465.9) (1,339.1) ------------ ------------- ------------- ------------- ------------- ------------- Net Flows (991.7) (746.8) (917.4) (1,306.6) (1,136.8) (1,022.9) Performance (527.9) 55.2 126.1 284.0 461.5 (347.7) Acquistions (dispositions) / Other (421.4) 263.4 71.0 ------------ ------------- ------------- ------------- ------------- ------------- Net Change in AUM (1,519.6) (1,113.0) (527.9) (1,022.6) (604.3) (1,370.6) Assets under management, beginning of period 13,515.6 11,996.0 10,883.0 10,355.1 9,332.5 8,728.2 ------------ ------------- ------------- ------------- ------------- ------------- Assets under management, end of period $ 11,996.0 $ 10,883.0 $ 10,355.1 $ 9,332.5 $ 8,728.2 $ 7,357.6 ============ ============= ============= ============= ============= ============= Mutual Funds: - ------------- Deposits and reinvestments $ 515.3 $ 535.2 $ 559.2 $ 420.7 $ 640.4 $ 417.3 Redemptions and withdrawals (702.0) (527.7) (568.0) (646.3) (620.8) (611.9) ------------ ------------- ------------- ------------- ------------- ------------- Net Flows (186.7) 7.5 (8.8) (225.6) 19.6 (194.6) Performance (310.3) 340.2 134.1 20.1 349.4 (174.4) Money market funds net change in AUM 5.5 (7.5) (11.4) (15.0) (0.1) (276.0) Acquistions (dispositions) / Other 1.4 140.5 9.4 (31.2) 185.0 9,824.4 ------------ ------------- ------------- ------------- ------------- ------------- Net Change in AUM (490.1) 480.7 123.3 (251.7) 553.9 9,179.4 Assets under management, beginning of period 12,285.0 11,794.9 12,275.6 12,398.9 12,147.2 12,701.1 ------------ ------------- ------------- ------------- ------------- ------------- Assets under management, end of period $ 11,794.9 $ 12,275.6 $ 12,398.9 $ 12,147.2 $ 12,701.1 $ 21,880.5 ============ ============= ============= ============= ============= ============= INSTITUTIONAL PRODUCTS: Deposits and reinvestments $ 4,037.2 $ 470.3 $ 385.1 $ 652.5 $ 574.6 $ 238.8 Redemptions and withdrawals (1,341.7) (1,495.2) (1,912.9) (1,849.3) (940.6) (1,467.5) ------------ ------------- ------------- ------------- ------------- ------------- Net Flows 2,695.5 (1,024.9) (1,527.8) (1,196.8) (366.0) (1,228.7) Performance (242.7) 388.2 90.9 130.8 283.7 (65.6) Acquistions (dispositions) / Other (15.5) 371.1 (394.6) (24.3) (14.2) (114.8) ------------ ------------- ------------- ------------- ------------- ------------- Net Change in AUM 2,437.3 (265.6) (1,831.5) (1,090.3) (96.5) (1,409.1) Assets under management, beginning of period 14,183.5 16,620.8 16,355.2 14,523.7 13,433.4 13,336.9 ------------ ------------- ------------- ------------- ------------- ------------- Assets under management, end of period $ 16,620.8 $ 16,355.2 $ 14,523.7 $ 13,433.4 $ 13,336.9 $ 11,927.8 ============ ============= ============= ============= ============= ============= STRUCTURED FINANCE PRODUCTS: Deposits and reinvestments $ 0.5 $ 0.2 $ 1.0 $ 1,000.6 $ 13.8 $ 233.5 Redemptions and withdrawals (63.0) (31.7) (1,012.6) (50.6) (196.9) (468.1) ------------ ------------- ------------- ------------- ------------- ------------- Net Flows (62.5) (31.5) (1,011.6) 950.0 (183.1) (234.6) Performance (48.7) 13.7 (221.4) (2.5) 37.4 14.4 ------------ ------------- ------------- ------------- ------------- ------------- Net Change in AUM (111.2) (17.8) (1,233.0) 947.5 (145.7) (220.2) Assets under management, beginning of period 2,924.3 2,813.1 2,795.2 1,562.3 2,509.8 2,364.1 ------------ ------------- ------------- ------------- ------------- ------------- Assets under management, end of period $ 2,813.1 $ 2,795.3 $ 1,562.2 $ 2,509.8 $ 2,364.1 $ 2,143.9 ============ ============= ============= ============= ============= ============= TOTAL: Deposits and reinvestments $ 5,061.1 $ 1,451.7 $ 1,433.9 $ 2,391.4 $ 1,557.9 $ 1,205.8 Redemptions and withdrawals (3,606.5) (3,247.4) (4,899.5) (4,170.4) (3,224.2) (3,886.6) ------------ ------------- ------------- ------------- ------------- ------------- Net Flows 1,454.6 (1,795.7) (3,465.6) (1,779.0) (1,666.3) (2,680.8) Performance (1,129.6) 797.3 129.7 432.4 1,132.0 (573.3) Money market funds net change in AUM 5.5 (7.5) (11.4) (15.0) (0.1) (276.0) Acquistions (dispositions) / Other (14.1) 90.2 (121.8) (55.5) 241.8 9,709.6 ------------ ------------- ------------- ------------- ------------- ------------- Net Change in AUM 316.4 (915.7) (3,469.1) (1,417.1) (292.6) 6,179.5 Assets under management, beginning of period 42,908.4 43,224.8 42,309.1 38,840.0 37,422.9 37,130.3 ------------ ------------- ------------- ------------- ------------- ------------- Assets under management, end of period $ 43,224.8 $ 42,309.1 $ 38,840.0 $ 7,422.9 $ 37,130.3 $ 43,309.8 ============ ============= ============= ============= ============= ============= * Variable Products Change in AUM (included in Institutional Products) $ (132.1) $ (45.7) $ (119.2) $ (45.3) $ 27.7 $ (188.5) ============ ============= ============= ============= ============= ============= Money Market balances (1) $ 135.3 $ 127.8 $ 116.4 $ 101.4 $ 101.3 $ 6,807.8 ============ ============= ============= ============= ============= =============
(1) Money Market balances included in Mutual Funds above. 19 THE PHOENIX COMPANIES, INC. VENTURE CAPITAL SEGMENT (1) Second Quarter 2006 (unaudited) ($ in millions)
YTD June December 31, ------------- ---------------------------------------------------------- 2005 2005 2004 2003 2002 ------------- ------------- ------------- ------------- ------------- SEGMENT INCOME Operating Gain (Loss) $ 7.2 $ 3.5 $ (1.7) $ (5.8) $ (7.4) Realized Gains (Losses) on Cash and Stock Distributions 7.9 21.9 7.4 4.9 (4.7) Change in Unrealized Gains (Losses) on Investments Held in Partnerships (14.6) (10.6) 13.6 37.1 (47.2) ------------- ------------- ------------- ------------- ------------- Equity in Partnership Earnings (Losses), before income taxes 0.5 14.8 19.3 36.2 (59.3) Applicable Income Taxes (Benefit) 0.2 5.2 6.8 12.7 (20.7) ------------- ------------- ------------- ------------- ------------- Segment Income (Loss) $ 0.3 $ 9.6 $ 12.5 $ 23.5 $ (38.6) ============= ============= ============= ============= ============= - ------------------------------------------------------------------------------------------------------------------------------------ VENTURE CAPITAL INVESTMENTS Contributions (Dollars Invested) $ 13.7 $ 27.6 $ 37.7 $ 31.0 $ 42.2 Equity In Earnings (Losses) of Partnerships 0.5 14.8 19.3 36.2 (59.3) Distributions (27.6) (68.2) (50.4) (32.2) (41.8) Sale of Partnership Interests and Transfer to Closed Block (91.5) (52.2) Realized Loss on Sale of Partnership Interests and Transfer to Closed Block (13.9) (14.3) (5.0) ------------- ------------- ------------- ------------- ------------- Change in Venture Capital Investments (13.4) (131.2) 6.6 (31.5) (63.9) Beginning Balance 202.9 202.9 196.3 227.8 291.7 ------------- ------------- ------------- ------------- ------------- Ending Balance $ 189.5 $ 71.7 $ 202.9 $ 196.3 $ 227.8 ============= ============= ============= ============= =============
(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. VENTURE CAPITAL SEGMENT (1) Second Quarter 2006 (unaudited) ($ in millions)
2005 Quarters ended ---------------------------------------------------------- March June September December ------------- ------------- ------------- ------------- SEGMENT INCOME Operating Gain (Loss) $ 10.9 $ (3.7) $ (2.9) $ (0.8) Realized Gains on Cash and Stock Distributions 0.2 7.7 11.3 2.7 Change in Unrealized Gains (Losses) on Investments Held in Partnerships (13.3) (1.3) 4.3 (0.3) ------------- ------------- ------------- ------------- Equity in Partnership Earnings (Losses), before income taxes (2.2) 2.7 12.7 1.6 Applicable Income Taxes (Benefit) (0.8) 1.0 4.4 0.6 ------------- ------------- ------------- ------------- Segment Income (Loss) $ (1.4) $ 1.7 $ 8.3 $ 1.0 ============= ============= ============= ============= - ------------------------------------------------------------------------------------------------------------------------------------ VENTURE CAPITAL INVESTMENTS Contributions (Dollars Invested) $ 9.5 $ 4.2 $ 6.3 $ 7.6 Equity In Earnings (Losses) of Partnerships (2.2) 2.7 12.7 1.6 Distributions (13.0) (14.6) (24.2) (16.4) Sale of Partnership Interests (91.5) Realized Loss on Sale of Partnership Interests (13.9) ------------- ------------- ------------- ------------- Change in Venture Capital Investments (5.7) (7.7) (5.2) (112.6) Beginning Balance 202.9 197.2 189.5 184.3 ------------- ------------- ------------- ------------- Ending Balance $ 197.2 $ 189.5 $ 184.3 $ 71.7 ============= ============= ============= =============
(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. 21 THE PHOENIX COMPANIES, INC. CORPORATE AND OTHER Second Quarter 2006 (unaudited) ($ in millions)
SEGMENT INCOME YTD June December 31, ---------------------------- ---------------------------------------------------------- 2006 2005 2005 2004 2003 2002 ------------- ------------- ------------- ------------- ------------- ------------- Corporate Investment Income $ 1.7 $ 0.2 $ 0.6 $ 0.4 $ 4.3 $ 1.5 Interest Expense on Indebtedness (24.7) (22.5) (46.6) (40.8) (39.6) (31.4) Corporate Expenses (8.7) (11.0) (24.3) (18.9) (11.0) (10.4) Other 0.4 0.6 0.7 0.2 (1.5) 0.3 ------------- ------------- ------------- ------------- ------------- ------------- Segment Loss, before income taxes (31.3) (32.7) (69.6) (59.1) (47.8) (40.0) Applicable Income Tax Benefit (10.1) (11.7) (26.3) (22.9) (18.8) (29.8) ------------- ------------- ------------- ------------- ------------- ------------- Segment Loss $ (21.2) $ (21.0) $ (43.3) $ (36.2) $ (29.0) $ (10.2) ============= ============== ============= ============= ============= =============
22 THE PHOENIX COMPANIES, INC. CORPORATE AND OTHER Second Quarter 2006 (unaudited) ($ in millions)
2005 2006 Quarters ended ---------------------------------------------------------- ---------------------------- March June September December March June ------------- ------------- ------------- ------------- ------------- ------------- Corporate Investment Income $ 0.1 $ 0.1 $ 0.4 $ 0.6 $ 1.1 Interest Expense on Indebtedness (11.1) (11.4) $ (11.7) (12.4) (12.4) (12.3) Corporate Expenses (5.8) (5.2) (6.8) (6.5) (5.5) (3.2) Other 0.5 0.1 (0.2) 0.3 (0.1) 0.5 ------------- ------------- ------------- ------------- ------------- ------------- Segment Loss, before income taxes (16.3) (16.4) (18.7) (18.2) (17.4) (13.9) Applicable Income Tax Benefit (5.7) (5.9) (6.1) (8.6) (6.1) (4.0) ------------- ------------- ------------- ------------- ------------- ------------- Segment Loss $ (10.6) $ (10.5) $ (12.6) $ (9.6) $ (11.3) $ (9.9) ============= ============== ============= ============= ============= =============
23 THE PHOENIX COMPANIES, INC. CONSOLIDATED STATEMENT OF INCOME - GAAP FORMAT (1) Second Quarter 2006 (unaudited) ($ in millions)
YTD June December 31, ---------------------------- ---------------------------------------------------------- 2006 2005 2005 2004 2003 2002 ------------- ------------- ------------- ------------- ------------- ------------- REVENUES Premiums $ 415.2 $ 455.9 $ 928.7 $ 990.6 $ 1,042.2 $ 1,082.0 Insurance and Investment Product Fees 278.5 256.4 514.7 534.9 500.9 493.8 Broker-dealer Commission and Distribution Fee Revenues 15.2 13.9 28.7 56.9 81.5 85.0 Net Investment Income 507.5 536.8 1,102.6 1,075.7 1,107.4 940.5 Unrealized Gain on Trading Equity Securities 85.9 Net Realized Investment Gains (Losses) 50.6 (25.7) 34.2 (0.8) (98.5) (133.9) ------------- ------------- ------------- ------------- ------------- ------------- Total Revenues 1,267.0 1,237.3 2,608.9 2,743.2 2,633.5 2,467.4 ------------- ------------- ------------- ------------- ------------- ------------- BENEFITS AND EXPENSES Policy Benefits and Increase in Policy Liabilities 667.2 683.3 1,376.7 1,422.2 1,454.0 1,436.1 Policyholder Dividends 201.9 167.2 364.4 404.7 418.8 401.8 Policy Acquisition Cost Amortization 73.5 38.1 132.1 110.2 94.1 59.2 Intangible Asset Impairments 32.5 10.6 66.3 Intangible Asset Amortization 16.5 17.2 33.8 33.8 33.2 32.5 Interest Expense on Indebtedness 24.7 22.5 46.6 40.8 39.6 31.4 Interest Expense on Non-recourse Collateralized Obligations 9.5 19.2 29.4 33.6 48.9 30.5 Other Operating Expenses 214.5 244.5 477.9 560.7 565.1 613.2 ------------- ------------- ------------- ------------- ------------- ------------- Total Expenses 1,240.3 1,192.0 2,471.5 2,606.0 2,653.7 2,671.0 ------------- ------------- ------------- ------------- ------------- ------------- Income (Loss) from Continuing Operations before Income Taxes, Minority Interest and equity in undistributed earnings (losses) of affiliates 26.7 45.3 137.4 137.2 (20.2) (203.6) Applicable Income Taxes (Benefit) 5.2 13.0 27.7 40.5 (18.3) (58.8) ------------- ------------- ------------- ------------- ------------- ------------- Income (Loss) from Continuing Operations before Minority Interest and equity in undistributed earnings (losses) of affiliates 21.5 32.3 109.7 96.7 (1.9) (144.8) Minority Interest in Net Income of Subsidiaries (0.2) (0.5) (0.6) (0.4) (0.5) Equity in undistributed earnings (losses) of affiliates (10.4) (1.8) 4.6 ------------- ------------- ------------- ------------- ------------- ------------- Income (Loss) from Continuing Operations 21.3 31.8 109.1 86.3 (4.1) (140.7) Discontinued Operations Income (Loss) from Discontinued Operations (0.7) 0.1 (2.1) (1.3) ------------- ------------- ------------- ------------- ------------- ------------- Income (Loss) Before Cumulative Effect of Accounting Changes 21.3 31.8 108.4 86.4 (6.2) (142.0) Cumulative Effect of Accounting Changes: Goodwill and Other Intangible Assets (130.3) ------------- ------------- ------------- ------------- ------------- ------------- Net Income (Loss) $ 21.3 $ 31.8 $ 108.4 $ 86.4 $ (6.2) $ (272.3) ============= ============= ============= ============= ============= =============
(1) Certain reclassifications have been made to prior periods to conform with the current presentation. 24 THE PHOENIX COMPANIES, INC. CONSOLIDATED STATEMENT OF INCOME - GAAP FORMAT (1) Second Quarter 2006 (unaudited) ($ in millions)
2005 2006 Quarters ended ---------------------------------------------------------- ---------------------------- March June September December March June ------------- ------------- ------------- ------------- ------------- ------------- REVENUES Premiums $ 226.8 $ 229.1 $ 236.6 $ 236.2 $ 207.5 $ 207.7 Insurance and Investment Product Fees 129.0 127.4 127.0 131.3 139.1 139.4 Broker-dealer Commission and Distribution Fee Revenues 6.8 7.1 7.5 7.3 7.3 7.9 Net Investment Income 268.7 268.1 284.1 281.7 251.2 256.3 Net Realized Investment Gains (Losses) (17.9) (7.8) 2.2 57.7 33.2 17.4 ------------- ------------- ------------- ------------- ------------- ------------- Total Revenues 613.4 623.9 657.4 714.2 638.3 628.7 ------------- ------------- ------------- ------------- ------------- ------------- BENEFITS AND EXPENSES Policy Benefits and Increase in Policy Liabilities 343.3 340.0 344.4 349.0 333.9 333.3 Policyholder Dividends 83.8 83.4 98.6 98.6 106.8 95.1 Policy Acquisition Cost Amortization 28.2 9.9 29.0 65.0 30.0 43.5 Intangible Asset Impairments 10.6 32.5 Intangible Asset Amortization 8.4 8.8 8.4 8.2 8.0 8.5 Interest Expense on Indebtedness 11.1 11.4 11.7 12.4 12.4 12.3 Interest Expense on Non-recourse Collateralized Obligations 8.9 10.3 5.5 4.7 4.4 5.1 Other Operating Expenses 117.2 127.3 119.8 113.6 111.4 103.1 ------------- ------------- ------------- ------------- ------------- ------------- Total Expenses 600.9 591.1 628.0 651.5 639.4 600.9 ------------- ------------- ------------- ------------- ------------- ------------- Income (Loss) from Continuing Operations before Income Taxes, Minority Interest and equity in undistributed earnings (losses) of affiliates 12.5 32.8 29.4 62.7 (1.1) 27.8 Applicable Income Taxes (Benefit) 2.8 10.2 2.2 12.5 (2.8) 8.0 ------------- ------------- ------------- ------------- ------------- ------------- Income from Continuing Operations before Minority Interest and equity in undistributed earnings of affiliates 9.7 22.6 27.2 50.2 1.7 19.8 Minority Interest in Net Income of Subsidiaries (0.3) (0.2) (0.1) (0.2) ------------- ------------- ------------- ------------- ------------- ------------- Income from Continuing Operations 9.4 22.4 27.1 50.2 1.7 19.6 Discontinued Operations Loss from Discontinued Operations (0.7) ------------- ------------- ------------- ------------- ------------- ------------- Net Income $ 9.4 $ 22.4 $ 26.4 $ 50.2 $ 1.7 $ 19.6 ============= ============= ============= ============= ============= =============
(1) Certain reclassifications have been made to prior periods to conform with the current presentation. 25 THE PHOENIX COMPANIES, INC. CONSOLIDATING SECOND QUARTER 2006 INCOME STATEMENT Second Quarter 2006 (unaudited) ($ in millions)
Year-to-Date June 30, 2006 Other Exclusions from Operating Segments Segments Segment Income ------------------------ ----------- ------------------------------------- Life Corporate Realized & Asset & Investment Intra-Segment Consolidated Annuity Management Other Loss Other Eliminations ------------- ----------- ----------- ---------- --------- ---------- ------------- REVENUES Premiums $ 415.2 $ 415.2 Insurance and Investment Product Fees 278.5 195.6 $ 83.3 $ (0.4) Broker-dealer commission and distribution fee revenues 15.2 15.2 Net Investment Income 507.5 484.5 0.6 $ 15.9 $ 1.4 5.1 Net Realized Investment Gains 50.6 $ 50.6 ------------- ----------- ----------- ---------- --------- ---------- ------------- Total Revenues 1,267.0 1,095.3 99.1 15.9 50.6 1.4 4.7 ------------- ----------- ----------- ---------- --------- ---------- ------------- BENEFITS AND EXPENSES Policy Benefits and Increase in Policy Liabilities 667.2 663.3 3.9 Policyholder Dividends 201.9 169.2 32.5 0.2 Policy Acquisition Cost Amortization 73.5 76.3 (2.8) Intangible Asset Impairments 16.5 16.5 Intangible Asset Amortization 32.5 32.5 Interest Expense on Indebtedness 24.7 24.7 Interest Expense on Non-recourse Collateralized Obligations 9.5 9.5 Other Operating Expenses 214.5 105.6 83.4 9.1 11.7 4.7 ------------- ----------- ----------- ---------- --------- ---------- ------------- Total Expenses 1,240.3 1,014.4 132.4 47.2 29.7 11.9 4.7 ------------- ----------- ----------- ---------- --------- ---------- ------------- Income (Loss) from Continuing Operations before Income Taxes Minority Interest and equity in undistributed earnings (losses) of affiliates 26.7 80.9 (33.3) (31.3) 20.9 (10.5) 0.0 Applicable Income Taxes (Benefit) 5.2 25.0 (12.8) (10.1) 6.6 (3.5) ------------- ----------- ----------- ---------- --------- ---------- ------------- Income (Loss) from Continuing Operations before Minority Interest and equity undistributed earnings (losses) of affiliates 21.5 55.9 (20.5) (21.2) 14.3 (7.0) 0.0 ------------- ----------- ----------- ---------- --------- ---------- ------------- Minority Interest in Net Income of Subsidiaries (0.2) (0.2) ------------- ----------- ----------- ---------- --------- ---------- ------------- Income (Loss) from Continuing Operations $ 21.3 $ 55.9 $ (20.5) $ (21.2) $ 14.3 $ (7.2) $ 0.0 ============= =========== =========== ========== ========= ========== =============
26 THE PHOENIX COMPANIES, INC. CONDENSED CONSOLIDATED BALANCE SHEET -- PRELIMINARY Second Quarter 2006 (unaudited) ($ in millions, except par value)
June December 31, -------------- ---------------------------------------------------------- 2006 2005 2004 2003 2002 -------------- ------------- ------------- ------------- ------------- ASSETS: Available-for-Sale Debt Securities, at fair value $ 12,560.7 $ 13,404.6 $ 13,476.3 $ 13,273.0 $ 11,889.5 Available-for-Sale Equity Securities, at fair value 182.5 181.8 304.3 312.0 385.9 Trading Equity Securities, at fair value 87.3 Mortgage Loans, at unpaid principal balances 94.5 128.6 207.9 284.1 468.8 Policy Loans, at unpaid principal balances 2,294.4 2,245.0 2,196.7 2,241.4 2,195.9 Venture Capital Partnerships, at equity in net assets 120.6 145.1 255.3 234.9 228.6 Affiliate Equity and Debt Securities, at cost plus equity in undistributed earnings 47.5 134.7 Other Investments 321.6 310.6 371.8 402.0 398.9 -------------- ------------- ------------- ------------- ------------- 15,574.3 16,415.7 16,899.6 16,794.9 15,702.3 Available-for-Sale Investments Pledged as Collateral, at fair value 286.8 304.4 1,278.8 1,350.0 1,358.7 -------------- ------------- ------------- ------------- ------------- Total Investments 15,861.1 16,720.1 18,178.4 18,144.9 17,061.0 Cash and Cash Equivalents 390.4 301.5 435.0 447.9 1,110.5 Deferred Policy Acquisition Costs 1,710.1 1,556.0 1,429.9 1,367.7 1,234.1 Goodwill and Other Intangible Assets 719.4 763.5 735.6 755.0 747.7 Other Assets 725.9 652.9 633.4 760.5 711.4 Separate Account Assets 7,899.0 7,722.2 6,950.3 6,083.2 4,371.2 -------------- ------------- ------------- ------------- ------------- Total Assets $ 27,305.9 $ 27,716.2 $ 28,362.6 $ 27,559.2 $ 25,235.9 ============== ============= ============= ============== ============= LIABILITIES: Policy Liabilities and Accruals $ 13,159.7 $ 13,246.2 $ 13,132.4 $ 13,088.6 $ 12,680.0 Policyholder Deposit Funds 2,464.7 3,060.7 3,492.4 3,642.7 3,395.7 Indebtedness 713.4 751.9 690.8 639.0 644.3 Stock Purchase Contracts 131.9 128.8 137.6 Other Liabilities 576.4 538.2 587.2 557.1 570.8 Non-recourse Collateralized Debt Obligation Liabilities 360.6 389.9 1,355.2 1,472.0 1,609.5 Separate Account Liabilities 7,899.0 7,722.2 6,950.3 6,083.2 4,371.2 -------------- ------------- ------------- ------------- ------------- Total Liabilities and minority interest 25,173.8 25,709.1 26,340.2 25,611.4 23,409.1 -------------- ------------- ------------- ------------- ------------- STOCKHOLDERS' EQUITY: Common stock, $.01 par value, 1.0 billion shares authorized; 113,599,820 shares outstanding (June 30, 2006) 1.3 1.1 1.0 1.0 1.0 Additional paid in capital 2,600.0 2,440.3 2,435.2 2,431.4 2,424.4 Deferred Compensation on Restricted Stock Units (3.7) (2.7) (3.6) (3.6) Accumulated Earnings (Deficit) (189.9) (193.1) (285.7) (355.3) (331.4) Treasury stock, at cost: 11,313,563 shares (June 30, 2006) (179.5) (179.5) (182.6) (189.4) (195.7) Accumulated Other Comprehensive Income (Loss) (96.1) (59.0) 58.1 63.7 (71.5) -------------- ------------- ------------- ------------- ------------- Total Stockholders' Equity 2,132.1 2,007.1 2,022.4 1,947.8 1,826.8 -------------- ------------- ------------- ------------- ------------- Total Liabilities, Minority Interest and Stockholders' Equity $ 27,305.9 $ 27,716.2 $ 28,362.6 $ 27,559.2 $ 25,235.9 ============== ============= ============= ============== =============
27 THE PHOENIX COMPANIES, INC. GENERAL ACCOUNT INVESTMENT PORTFOLIO SUMMARY (1) Second Quarter 2006 (unaudited) ($ millions)
Total Debt Securities Public Debt Securities Private Debt Securities ---------------------------- ---------------------------- ---------------------------- 06/30/06 12/31/05 06/30/06 12/31/05 06/30/06 12/31/05 ------------- ------------- ------------- ------------- ------------- ------------- DEBT SECURITIES BY CREDIT QUALITY (CARRYING VALUE) AAA/AA/A $ 8,028.4 $ 8,625.0 $ 6,533.9 $ 7,089.4 $ 1,494.5 $ 1,535.6 BBB 3,542.0 3,795.3 2,272.3 2,487.4 1,269.7 1,307.9 ------------- ------------- ------------- ------------- ------------- ------------- Total Investment Grade 11,570.4 12,420.3 8,806.2 9,576.8 2,764.2 2,843.5 BB 753.4 753.0 637.0 647.5 116.4 105.5 B 180.6 168.3 147.1 120.8 33.5 47.5 CCC and Lower 36.6 43.6 28.1 28.0 8.5 15.6 In or Near Default 17.4 19.4 11.4 14.6 6.0 4.8 ------------- ------------- ------------- ------------- ------------- ------------- Total Debt Securities $ 12,558.4 $ 13,404.6 $ 9,629.8 $ 10,387.7 $ 2,928.6 $ 3,016.9 ============= ============= ============= ============= ============= ============= % Below Investment Grade 7.9% 7.3% 8.6% 7.8% 5.6% 5.7% - ----------------------------------------------------------------------------------------------------------------------------------- UNREALIZED GAINS AND LOSSES ON DEBT AND EQUITY SECURITIES As of 06/30/06 Total Outside Closed Block Closed Block ---------------------------- ---------------------------- --------------------------- Gains Losses Gains Losses Gains Losses ------------- ------------- ------------- ------------- ------------ ------------- Total Debt Securities $ 205.3 $ (362.0) $ 66.1 $ (171.4) $ 139.2 $ (190.6) Equity Securities 22.9 (4.6) 4.9 (1.5) 18.0 (3.1) ------------- ------------- ------------- ------------- ------------- ------------- Total Unrealized Gains (Losses) 228.2 (366.6) 71.0 (172.9) 157.2 (193.7) ------------- ------------- ------------- ------------- ------------- ------------- Applicable PDO 157.2 (193.7) 157.2 (193.7) Applicable DAC (Credit) 28.9 (86.4) 28.9 (86.4) Applicable Deferred Income Tax (Benefit) 14.7 (30.3) 14.7 (30.3) ------------- ------------- ------------- ------------- ------------- ------------- Total Offsets to Net Unrealized Gains (Losses) 200.8 (310.4) 43.6 (116.7) 157.2 (193.7) ------------- ------------- ------------- ------------- ------------- ------------- Net Unrealized Gains and Losses $ 27.4 $ (56.2) $ 27.4 $ (56.2) $ 0.0 $ 0.0 ============= ============= ============= ============= ============= ============= Net Unrealized Losses $ (28.8) $ (28.8) $ 0.0 ============= ============= =============
(1) Excludes debt and equity securities pledged as collateral. 28 THE PHOENIX COMPANIES, INC. GENERAL ACCOUNT GAAP NET INVESTMENT INCOME YIELDS (1) Second Quarter 2006 (unaudited) ($ in millions)
Quarters ended YTD June December 31, ---------------------------- ---------------------------------------------------------- 2006 2005 2005 2004 2003 2002 ------------- ------------- ------------- ------------- ------------- ------------- GAAP NET INVESTMENT INCOME Debt Securities $ 394.1 $ 396.7 $ 804.6 $ 772.1 $ 765.5 $ 730.8 Equity Securities 1.8 5.1 7.5 4.5 4.6 4.2 Mortgages 3.2 10.6 20.2 22.5 32.6 40.4 Policy Loans 82.6 81.3 165.8 167.1 171.7 171.8 Venture Capital (1.0) 0.5 23.8 25.5 49.1 (59.3) Cash & Cash Equivalents 7.8 3.5 7.6 4.9 7.0 11.9 Other (2) 13.3 20.8 47.8 47.8 35.0 18.9 ------------- ------------- ------------- ------------- ------------- ------------- Total Cash and Invested Assets 501.8 518.5 $ 1 ,077.3 1,044.4 1,065.5 918.7 ------------- ------------- ------------- ------------- ------------- ------------- Investment Expenses 4.0 5.1 8.6 9.8 10.0 9.2 ------------- ------------- ------------- ------------- ------------- ------------- Total Net Investment Income $ 497.8 $ 513.4 $ 1,068.7 $ 1,034.6 $ 1,055.5 $ 909.5 ============= ============= ============= ============= ============= ============= ANNUALIZED YIELDS Debt Securities 6.1% 6.0% 6.2% 5.9% 6.0% 6.3% Equity Securities 1.1% 3.4% 3.0% 1.3% 1.4% 1.3% Mortgages 3.0% 13.1% 15.3% 11.0% 11.2% 8.8% Policy Loans 7.6% 7.7% 7.7% 7.9% 8.0% 8.2% Venture Capital -7.1% 0.4% 12.8% 10.9% 23.0% -22.8% Cash & Cash Equivalents 4.1% 1.6% 5.2% 1.1% 1.3% 1.4% Other (2) 13.6% 13.0% 16.4% 7.5% 10.5% 3.6% ------------- ------------- ------------- ------------- ------------- ------------- Total Cash and Invested Assets 6.4% 6.2% 6.6% 6.1% 6.4% 5.7% ------------- ------------- ------------- ------------- ------------- ------------- Investment Expenses 0.0% 0.1% 0.1% 0.1% 0.1% 0.1% ------------- ------------- ------------- ------------- ------------- ------------- Total Net Investment Income 6.4% 6.1% 6.6% 6.1% 6.6% 5.6% ============= ============= ============= ============= ============= =============
(1) Excludes debt and equity securities pledged as collateral. (2) Includes real estate, affiliates and other invested assets. 29 THE PHOENIX COMPANIES, INC. GENERAL ACCOUNT GAAP NET INVESTMENT INCOME YIELDS (1) Second Quarter 2006 (unaudited) ($ in millions)
2005 2006 Quarters ended ---------------------------------------------------------- ---------------------------- March June September December March June ------------- ------------- ------------- ------------- ------------- ------------- GAAP NET INVESTMENT INCOME Debt Securities $ 197.3 $ 199.4 $ 201.0 $ 206.9 $ 195.1 $ 199.0 Equity Securities 2.1 3.0 1.6 0.8 0.5 1.3 Mortgages 6.4 4.2 3.9 5.7 0.9 2.3 Policy Loans 40.7 40.6 42.2 42.3 41.1 41.5 Venture Capital (2.8) 3.3 16.5 6.8 (2.4) 1.4 Cash & Cash Equivalents 1.7 1.8 1.6 2.5 3.3 4.5 Other (2) 15.5 5.3 13.0 14.0 10.3 3.0 ------------- ------------- ------------- ------------- ------------- ------------- Total Cash and Invested Assets 260.9 257.6 279.8 279.0 248.8 253.0 ------------- ------------- ------------- ------------- ------------- ------------- Investment Expenses 3.1 2.0 1.3 2.2 2.1 1.9 ------------- ------------- ------------- ------------- ------------- ------------- Total Net Investment Income $ 257.8 $ 255.6 $ 278.5 $ 276.8 $ 246.7 $ 251.1 ============= ============= ============= ============= ============= ============= ANNUALIZED YIELDS Debt Securities 6.0% 6.0% 6.1% 6.3% 6.1% 6.4% Equity Securities 2.3% 4.0% 2.2% 1.3% 1.1% 2.9% Mortgages 14.1% 10.2% 10.3% 17.5% 3.0% 9.2% Policy Loans 7.8% 7.7% 7.9% 7.9% 7.6% 7.5% Venture Capital -4.3% 5.4% 30.0% 14.7% -8.2% 4.8% Cash & Cash Equivalents 1.7% 1.7% 2.8% 6.9% 4.1% 5.0% Other (2) 19.7% 6.4% 16.6% 19.5% 12.8% 3.7% ------------- ------------- ------------- ------------- ------------- ------------- Total Cash and Invested Assets 6.3% 6.1% 6.8% 6.9% 6.2% 6.4% ------------- ------------- ------------- ------------- ------------- ------------- Investment Expenses 0.1% 0.0% 0.0% 0.1% 0.1% 0.0% ------------- ------------- ------------- ------------- ------------- ------------- Total Net Investment Income 6.2% 6.1% 6.7% 6.8% 6.1% 6.4% ============= ============= ============= ============= ============= =============
(1) Excludes debt and equity securities pledged as collateral. (2) Includes real estate, affiliates and other invested assets. 30 THE PHOENIX COMPANIES, INC. GENERAL ACCOUNT REALIZED INVESTMENT GAINS AND LOSSES Second Quarter 2006 (unaudited) ($ Millions)
YTD June December 31, ---------------------------- ---------------------------------------------------------- 2006 2005 2005 2004 2003 2002 ------------- ------------- ------------- ------------- ------------- ------------- REALIZED INVESTMENT GAINS AND LOSSES Debt Security Impairments $ (3.3) $ (20.7) $ (31.2) $ (15.5) $ (76.1) $ (114.3) Equity Security Impairments (2.1) (1.5) (4.3) (9.8) Mortgage Loan Impairments (0.8) (12.6) (4.1) (0.6) Affiliated Equity Securities (96.9) Venture Capital Partnerships Impairments (4.6) (5.1) Real Estate Impairments (6.6) Debt and Equity Securities Pledged as Collateral Impairments (1.0) (1.2) (16.6) (8.3) (34.9) Other Invested Asset Impairments (0.8) (3.3) (9.9) (22.0) ------------- ------------- ------------- ------------- ------------- ------------- Total Impairment Losses (3.3) (22.5) (35.3) (49.5) (210.8) (186.7) ------------- ------------- ------------- ------------- ------------- ------------- Debt Security Net Transaction Gains (Losses) 31.0 (7.1) (18.0) 28.4 64.7 48.4 Equity Security Net Transaction Gains (Losses) 3.6 (0.6) 2.9 14.6 49.2 2.1 Venture Capital Net Investment Gains (Losses) 3.8 (13.9) (9.7) Mortgage Loan Net Transaction Gains (Losses) 3.2 3.7 0.2 (1.3) 0.2 Affiliate Equity Security Transaction GL 10.4 (0.6) 3.7 Real Estate Net Transaction Gains (Losses) 0.2 1.2 (0.6) (0.8) (0.2) 4.0 Settlement of HRH Stock Purchase Contracts 0.2 86.3 Other Invested Asset Net Transactions Gains (Losses) 1.8 6.6 6.3 9.6 (1.9) Debt and Equity Securities Pledged as Collateral (0.9) 2.5 ------------- ------------- ------------- ------------- ------------- ------------- Total Net Transactions Gains 53.1 (3.2) 69.5 48.7 112.3 52.8 ------------- ------------- ------------- ------------- ------------- ------------- Net Realized Investment Gains (Losses) 49.8 (25.7) 34.2 (0.8) (98.5) (133.9) ============= ============= ------------- ------------- ------------- ------------- Closed Block Applicable PDO (Reduction) 32.6 (11.1) (12.4) 3.7 (5.9) (40.3) Applicable Deferred Acquisition Costs (Credit) (2.8) (3.8) 17.6 (0.4) (4.1) (7.2) Applicable Deferred Income Tax (Credit) 6.6 (3.5) 9.2 3.1 (35.6) (20.8) ------------- ------------- ------------- ------------- ------------- ------------- Net Realized Investment Gains (Losses) Included in Net Income $ 13.4 $ (7.3) $ 19.8 $ (7.2) $ (52.9) $ (65.6) ============= ============= ============= ============= ============= =============
31 THE PHOENIX COMPANIES, INC. GENERAL ACCOUNT REALIZED INVESTMENT GAINS AND LOSSES Second Quarter 2006 (unaudited) ($ Millions)
2005 2006 Quarters ended ---------------------------------------------------------- ---------------------------- March June September December March June ------------- ------------- ------------- ------------- ------------- ------------- REALIZED INVESTMENT GAINS AND LOSSES Debt Security Impairments $ (12.2) $ (8.5) $ (4.3) $ (6.2) $ (0.9) $ (2.4) Equity Security Impairments (2.1) Mortgage Loan Impairments (0.8) Affiliated Equity Securities Debt and Equity Securities Pledged as Collateral Impairments (0.3) (0.7) (0.2) Other Invested Asset Impairments ------------- ------------- ------------- ------------- ------------- ------------- Total Impairment Losses (12.5) (10.0) (4.5) (8.3) (0.9) (2.4) ------------- ------------- ------------- ------------- ------------- ------------- Debt Security Net Transaction Gains (Losses) (7.2) 0.1 (2.6) (8.3) 16.1 14.9 Equity Security Net Transaction Gains (Losses) (1.0) 0.4 2.4 1.1 3.5 0.1 Venture Capital Net Investment Gains (Losses) (13.9) 3.8 Mortgage Loan Net Transaction Gains (Losses) 3.2 Affiliate Equity Security Transactions Gains (Losses) 3.7 10.0 0.4 Real Estate Net Transaction Gains (Losses) (0.3) (0.3) (0.2) 0.2 0.1 0.1 Settlement of HRH Stock Purchase Contracts 86.3 Other Invested Asset Net Transactions Gains (Losses) (1.3) 2.5 6.0 (0.6) 2.2 (0.4) Debt and Equity Securities Pledged as Collateral 0.7 (0.5) 1.1 1.2 (1.0) 0.1 ------------- ------------- ------------- ------------- ------------- ------------- Total Net Transactions Gains (5.4) 2.1 6.7 66.0 34.1 19.0 ------------- ------------- ------------- ------------- ------------- ------------- Net Realized Investment Gains (Losses) (17.9) (7.9) 2.3 57.7 33.1 16.6 ============= ============= ============= ============= ============= ============= Closed Block Applicable PDO (Reduction) (4.4) (6.7) 4.2 (5.5) 19.2 13.4 Applicable Deferred Acquisition Costs (Credit) (4.8) 1.0 (4.5) 25.9 (2.6) (0.2) Applicable Deferred Income Tax (Credit) (3.2) (0.3) 0.5 12.2 6.2 0.4 ------------- ------------- ------------- ------------- ------------- ------------- Net Realized Investment Gains (Losses) Included in Net Income $ (5.5) $ (1.9) $ 2.1 $ 25.1 $ 10.4 $ 3.0 ============= ============= ============= ============= ============= =============
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