EX-99.1 2 pnx81483ex99-1.txt FINANCIAL SUPPLEMENT EXHIBIT 99.1 [LOGO] PHOENIX Financial Supplement The Phoenix Companies, Inc. March 31, 2007
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, JP Morgan Jimmy Bhullar P.O. Box 11258, New York, NY 10286-1258 Keefe Bruyette & Woods, Inc. Jukka Lipponen Toll-free: 1-800-490-4258 TTY 1-888-269-5221 Langen McAlenney Robert Glasspiegel Fax: 1-212-815-2777, e-mail: pnxshareholders@bankofny.com Lehman Brothers Eric Berg Web: www.stockbny.com Merrill Lynch Edward A. Spehar Morgan Stanley Ken Zerbe UBS Andrew Kligerman FOR MORE INFORMATION To receive additional information, including financial supplements and Securities and Exchange Commission filings along with access to other shareholder services, visit the Investor Relations Section on our Web site at PhoenixWealthManagement.com or contact our Investor SHAREHOLDER INFORMATION Relations Department at: SECURITY LISTINGS The common stock of The Phoenix Companies, Inc. is The Phoenix Companies, Inc. traded on the New York Stock Exchange (NYSE) Investor Relations under the symbol "PNX." Our 7.45 percent bond is One American Row traded on the NYSE under the symbol "PFX." 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 managing our business, we analyze our performance on the basis of "operating income" which does not equate to net income as determined in accordance with GAAP. Rather, it is the measure of profit or loss used by our management to evaluate performance, allocate resources and manage our operations. We believe that operating income, and measures that are derived from or incorporate operating income, are appropriate measures that are useful to investors as well, because they identify the earnings of, and underlying profitability factors affecting, the ongoing operations of our business. Operating income is calculated by excluding realized investment gains (losses) and certain other items because we do not consider them to be related to our operating performance. The size and timing of realized investment gains (losses) are often subject to our discretion. Certain other items are also excluded from operating income if, in our opinion, they are not indicative of overall operating trends. The criteria used to identify an item that will be excluded from operating income include: whether the item is infrequent and is material to our income; or whether it results from a change in regulatory requirements, or relates to other unusual circumstances. Items excluded from operating income may vary from period to period. Because these items are excluded based on our discretion, inconsistencies in the application of our selection criteria may exist. Some of these items may be significant components of net income in accordance with GAAP. Accordingly, operating income, and other measures that are derived from or incorporate operating income, are not substitutes for net income, or measures that are derived from or incorporate net income, determined in accordance with GAAP and may be different from similarly titled measures of other companies. Within our Asset Management segment, we also consider earnings before interest, taxes, depreciation and amortization ("EBITDA"). Our management believes EBITDA provides additional perspective on the operating efficiency and profitability of the Asset Management segment. EBITDA represents pre-tax operating income before depreciation and amortization of goodwill and intangibles. Total operating return on equity ("ROE") is an internal performance measure used in the management of our operations, including our compensation plans and planning processes. Our management believes that this measure provides investors with a useful metric to assess our performance and the effectiveness of our use of historic capital. ROE is calculated by dividing (i) total operating income, by (ii) average equity, excluding accumulated OCI, FIN 46-R and discontinued operations. Total operating return on tangible equity ("return on tangible equity") is also an internal performance measure used in the evaluation of our operations. Our management believes that this measure provides investors with a useful metric to assess our performance and the effectiveness of our use of current capital. Return on tangible equity is calculated by dividing (i) total operating income, by (ii) average equity, excluding accumulated OCI, FIN 46-R, discontinued operations and the carrying value of goodwill and intangible assets. THE PHOENIX COMPANIES, INC. FINANCIAL SUPPLEMENT MARCH 2007 (UNAUDITED) TABLE OF CONTENTS ----------------- FINANCIAL HIGHLIGHTS..................................................... 1 FINANCIAL HIGHLIGHTS..................................................... 2 LIFE AND ANNUITY EARNINGS SUMMARY........................................ 4 VARIABLE UNIVERSAL LIFE................................................ 6 UNIVERSAL LIFE / INTEREST SENSITIVE.................................... 8 LIFE AND PRIVATE PLACEMENT SALES....................................... 10 ANNUITIES.............................................................. 12 SUPPLEMENTARY LIFE AND ANNUITY INFORMATION............................... 14 ASSET MANAGEMENT......................................................... 16 ASSET MANAGEMENT NET FLOWS AND ASSETS UNDER MANAGEMENT................... 18 VENTURE CAPITAL SEGMENT.................................................. 20 CORPORATE AND OTHER...................................................... 21 CONSOLIDATED STATEMENT OF INCOME - GAAP FORMAT........................... 23 CONSOLIDATING FIRST QUARTER 2007 INCOME STATEMENT........................ 25 CONDENSED CONSOLIDATED BALANCE SHEET -- PRELIMINARY...................... 26 GENERAL ACCOUNT INVESTMENT PORTFOLIO SUMMARY............................. 27 GENERAL ACCOUNT GAAP NET INVESTMENT INCOME YIELDS........................ 28 GENERAL ACCOUNT REALIZED INVESTMENT GAINS AND LOSSES..................... 30
THE PHOENIX COMPANIES, INC. FINANCIAL HIGHLIGHTS First Quarter 2007 (unaudited) (amount in millions, except per share data) For the Period Ended: December 31, YTD March ---------------------------------------------------------------- 2007 2006 2005 2004 2003 ------------- ------------- ------------- ------------- ------------- BALANCE SHEET INFORMATION General Account Invested Assets $ 16,048.2 $ 16,107.8 $ 16,717.2 $ 17,334.6 $ 17,242.8 Separate Account Assets 9,679.6 9,458.6 7,722.2 6,950.3 6,083.2 Total Assets 29,191.5 29,024.4 27,716.2 28,362.6 27,559.2 Indebtedness 627.7 685.4 751.9 690.8 639.0 Total Stockholders' Equity 2,288.8 2,236.1 2,007.1 2,022.4 1,947.8 Total Stockholders' Equity, excluding SFAS 115, other accumulated OCI and FIN 46-R 2,417.1 2,364.6 $ 2,118.9 $ 2,018.5 $ 1,925.3 Average Equity, excluding other accumulated OCI, FIN 46-R and Discontinued Operations (1) $ 2,358.8 $ 2,251.8 $ 2,028.6 Average Tangible Common Equity (2) $ 1,655.5 $ 1,529.2 $ 1,291.9 Debt to Total Capitalization 21.5% 23.5% 27.3% 25.5% 24.7% Book Value Per Share $ 20.07 $ 19.67 $ 21.10 $ 21.32 $ 20.62 Book Value Per Share, excluding SFAS 115 and other accumulated OCI $ 20.72 $ 20.33 $ 21.72 $ 20.70 $ 19.96 Book Value Per Share, excluding SFAS 115, other accumulated OCI and FIN 46-R $ 21.19 $ 20.80 $ 22.28 $ 21.27 $ 20.39 Period-end Common Shares Outstanding 114.1 113.7 95.1 94.9 94.4 ============= ============= ============= ============= ============= ------------------------------------------------------------------------------------------------------------------------------------ INDEBTEDNESS: Surplus Notes $ 174.0 $ 174.0 $ 204.2 $ 204.1 $ 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 0.5 2.0 8.0 10.3 Bank Credit Facility 25.0 25.0 Other 57.2 67.0 ------------- ------------- ------------- ------------- ------------- Total Indebtedness $ 627.7 $ 685.4 $ 751.9 $ 690.8 $ 639.0 ============= ============= ============= ============= ============= ------------------------------------------------------------------------------------------------------------------------------------ STATUTORY FINANCIAL DATA FOR PHOENIX LIFE INSURANCE COMPANY (3) Capital, Surplus and Surplus Notes $ 971.7 $ 932.4 $ 885.5 $ 814.6 $ 762.9 Asset Valuation Reserve (AVR) 194.8 187.9 210.8 213.6 198.6 ------------- ------------- ------------- ------------- ------------- Capital, Surplus, Surplus Notes and AVR $ 1,166.5 $ 1,120.3 $ 1,096.3 $ 1,028.2 $ 961.5 ============= ============= ============= ============= ============= Policyholder Dividend Liability $ 354.3 $ 348.9 $ 356.1 $ 403.3 $ 408.5 Interest Maintenance Reserve $ (46.8) $ (44.3) $ (23.1) $ (31.3) $ (30.2) Statutory Gain From Operations $ 42.2 $ 131.6 $ 106.2 $ 35.1 $ 69.7 Statutory Net Income $ 49.7 $ 162.0 $ 61.0 $ 47.1 $ 21.5 =============
(1) This average equity is used for the calculation of total operating return on equity and represents the average of the monthly average of equity, excluding other accumulated OCI, the effects of FIN 46-R and the equity of discontinued operations. (2) This average equity is used for the calculation of total operating return on tangible equity and represents the average of the monthly average of equity, excluding other accumulated OCI, the effects of FIN 46-R, the equity of discontinued operations and the carrying value of goodwill and intangible assets. (3) Phoenix Life Insurance Company is required to file financial statements with state regulatory authorities prepared on an accounting basis prescribed or permitted by the Insurance Department of the State of New York. March 2007 amounts are preliminary. 1 THE PHOENIX COMPANIES, INC. FINANCIAL HIGHLIGHTS First Quarter 2007 (unaudited) (amount in millions, except per share data)
YTD March December 31, --------------------------- ------------------------------------------------------- 2007 2006 2006 2005 2004 2003 ------------- ------------- ------------- ------------- ------------- ------------- INCOME STATEMENT SUMMARY OPERATING INCOME Life Insurance $ 56.0 $ 32.6 $ 209.7 $ 180.5 $ 130.1 $ 100.4 Annuities 6.9 5.7 4.0 12.0 12.7 (1.0) ------------- ------------- ------------- ------------- ------------- ------------- Life and Annuity Segment 62.9 38.3 213.7 192.5 142.8 99.4 Asset Management Segment 0.6 (34.6) (28.6) (10.5) 0.1 (8.7) Venture Capital Segment (1) 14.8 19.3 36.2 Corporate and Other (8.0) (17.4) (60.3) (69.6) (59.1) (47.8) ------------- ------------- ------------- ------------- ------------- ------------- TOTAL OPERATING INCOME (LOSS), BEFORE INCOME TAXES 55.5 (13.7) 124.8 127.2 103.1 79.1 Applicable Income Taxes (Benefit) 17.3 (7.5) 36.6 25.5 22.5 21.8 ------------- ------------- ------------- ------------- ------------- ------------- TOTAL OPERATING INCOME (LOSS) 38.2 (6.2) 88.2 101.7 80.6 57.3 Net Realized Investment Gains 12.2 11.4 21.8 25.5 5.7 3.2 Realized Gains (Losses) - Investments Pledged as Collateral Consolidated Under FIN 46-R 0.2 (1.0) (1.0) 1.3 (12.9) (2.4) Realized and Unrealized Gains (Losses) on Equity Investment in Aberdeen (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 (2.5) (9.1) (12.4) (21.9) (8.5) Other income 1.3 ------------- ------------- ------------- ------------- ------------- ------------- INCOME (LOSS) FROM CONTINUING OPERATIONS 50.6 1.7 99.9 109.1 86.3 (4.1) Income (Loss) from Discontinued Operations (0.7) 0.1 (2.1) ------------- ------------- ------------- ------------- ------------- ------------- NET INCOME (LOSS) $ 50.6 $ 1.7 $ 99.9 $ 108.4 $ 86.4 $ (6.2) ============= ============= ============= ============= ============= ============= ------------------------------------------------------------------------------------------------------------------------------------ EARNINGS PER SHARE BASIC Weighted-Average Shares Outstanding 113.8 103.6 110.9 95.0 94.7 94.2 ------------- ------------- ------------- ------------- ------------- ------------- Total Operating Income (Loss) Per Share $ 0.34 $ (0.06) $ 0.79 $ 1.07 $ 0.85 $ 0.61 Net Income (Loss) Per Share $ 0.44 $ 0.02 $ 0.90 $ 1.14 $ 0.91 $ (0.07) DILUTED Weighted-Average Shares Outstanding and Dilutive Potential Common Shares (2) 115.1 106.2 113.1 102.4 100.8 96.6 ------------- ------------- ------------- ------------- ------------- ------------- Total Operating Income (Loss) Per Share $ 0.33 $ (0.06) $ 0.78 $ 0.99 $ 0.80 $ 0.59 Net Income (Loss) Per Share $ 0.44 $ 0.02 $ 0.88 $ 1.06 $ 0.86 $ (0.07) =============
(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. (2) For the twelve months ended December 31, 2003, the weighted average common shares outstanding and dilutive potential common shares were 102.4 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 First Quarter 2007 (unaudited) (amount in millions, except per share data) Quarters ended
2006 2007 --------------------------------------------------------------- ------------- March June September December March ------------- ------------- ------------- ------------- ------------- OPERATING INCOME Life Insurance $ 32.6 $ 42.1 $ 51.2 $ 83.8 $ 56.0 Annuities 5.7 0.5 6.0 (8.2) 6.9 ------------- ------------- ------------- ------------- ------------- Life and Annuity Segment 38.3 42.6 57.2 75.6 62.9 Asset Management Segment (34.6) 1.3 6.6 (1.9) 0.6 Corporate and Other (17.4) (13.9) (14.3) (14.7) (8.0) ------------- ------------- ------------- ------------- ------------- TOTAL OPERATING INCOME (LOSS), BEFORE INCOME TAXES (13.7) 30.0 49.5 59.0 55.5 Applicable Income Taxes (Benefit) (7.5) 9.6 11.8 22.7 17.3 ------------- ------------- ------------- ------------- ------------- TOTAL OPERATING INCOME (LOSS) (6.2) 20.4 37.7 36.3 38.2 Net Realized Investment Gains (Losses) 11.4 2.9 (2.0) 9.5 12.2 Realized Gains (Losses) - Investments Pledged as Collateral Consolidated Under FIN 46-R (1.0) 0.1 0.1 (0.2) 0.2 Management Restructuring and Early Retirement Costs (2.5) (3.8) (1.5) (1.3) ------------- ------------- ------------- ------------- ------------- NET INCOME $ 1.7 $ 19.6 $ 34.3 $ 44.3 $ 50.6 ============= ============= ============= ============= ============= ----------------------------------------------------------------------------------------------------------------------------------- EARNINGS PER SHARE BASIC Weighted-Average Shares Outstanding 103.6 112.7 113.6 113.7 113.8 ------------- ------------- ------------- ------------- ------------- Total Operating Income (Loss) Per Share $ (0.06) $ 0.18 $ 0.33 $ 0.32 $ 0.34 Net Income Per Share $ 0.02 $ 0.17 $ 0.30 $ 0.39 $ 0.44 DILUTED Weighted-Average Shares Outstanding and Dilutive Potential Common Shares 106.2 115.9 116.0 115.4 115.1 ------------- ------------- ------------- ------------- ------------- Total Operating Income (Loss) Per Share $ (0.06) $ 0.18 $ 0.32 $ 0.31 $ 0.33 Net Income Per Share $ 0.02 $ 0.17 $ 0.30 $ 0.38 $ 0.44 =============
3 THE PHOENIX COMPANIES, INC. LIFE AND ANNUITY EARNINGS SUMMARY First Quarter 2007 (unaudited) ($ in millions)
YTD March December 31, --------------------------- ------------------------------------------------------- 2007 2006 2006 2005 2004 2003 ------------- ------------- ------------- ------------- ------------- ------------- OPERATING INCOME Variable Universal Life $ 8.8 $ 8.5 $ 52.7 $ 69.6 $ 35.7 $ 35.0 Universal Life (1) 17.5 7.9 53.3 47.9 34.4 21.7 Other Life and Annuity (2) 0.4 0.4 2.7 1.5 1.6 0.1 ------------- ------------- ------------- ------------- ------------- ------------- TOTAL CORE LIFE INSURANCE 26.7 16.8 108.7 119.0 71.7 56.8 ------------- ------------- ------------- ------------- ------------- ------------- Traditional Life, excluding Closed Block 12.6 (1.7) 31.2 (11.7) (18.3) (36.5) Traditional Life, Closed Block 16.7 17.5 69.8 73.2 76.7 80.1 ------------- ------------- ------------- ------------- ------------- ------------- TOTAL TRADITIONAL LIFE 29.3 15.8 101.0 61.5 58.4 43.6 ------------- ------------- ------------- ------------- ------------- ------------- TOTAL, LIFE INSURANCE 56.0 32.6 209.7 180.5 130.1 100.4 Annuities 6.9 5.7 4.0 12.0 12.7 (1.0) ------------- ------------- ------------- ------------- ------------- ------------- OPERATING INCOME, BEFORE INCOME TAXES 62.9 38.3 213.7 192.5 142.8 99.4 Allocated Income Taxes (3) 19.6 12.0 67.9 51.3 36.4 31.1 ------------- ------------- ------------- ------------- ------------- ------------- OPERATING INCOME $ 43.3 $ 26.3 $ 145.8 $ 141.2 $ 106.4 $ 68.3 ============= ============= ============= ============= ============= =============
(1) Universal Life includes interest sensitive whole life contracts. (2) Other Life and Annuity includes WS Griffith prior to 2005. (3) Tax benefits related to tax advantaged investments have been allocated to the Life and Annuity Segment beginning in the quarter ended March 2003. 4 THE PHOENIX COMPANIES, INC. LIFE AND ANNUITY EARNINGS SUMMARY First Quarter 2007 (unaudited) ($ in millions) Quarters ended
2006 2007 --------------------------------------------------------------- ------------- March June September December March ------------- ------------- ------------- ------------- ------------- OPERATING INCOME Variable Universal Life $ 8.5 $ 9.2 $ 11.0 $ 24.0 $ 8.8 Universal Life (1) 7.9 11.4 17.1 16.9 17.5 Other Life and Annuity 0.4 0.9 0.6 0.8 0.4 ------------- ------------- ------------- ------------- ------------- TOTAL CORE LIFE INSURANCE 16.8 21.5 28.7 41.7 26.7 ------------- ------------- ------------- ------------- ------------- Traditional Life, excluding Closed Block (1.7) 3.2 5.1 24.6 12.6 Traditional Life, Closed Block 17.5 17.4 17.4 17.5 16.7 ------------- ------------- ------------- ------------- ------------- TOTAL TRADITIONAL LIFE 15.8 20.6 22.5 42.1 29.3 ------------- ------------- ------------- ------------- ------------- TOTAL, LIFE INSURANCE 32.6 42.1 51.2 83.8 56.0 Annuities 5.7 0.5 6.0 (8.2) 6.9 ------------- ------------- ------------- ------------- ------------- OPERATING INCOME, BEFORE INCOME TAXES 38.3 42.6 57.2 75.6 62.9 Allocated Income Taxes 12.0 13.0 15.1 27.8 19.6 ------------- ------------- ------------- ------------- ------------- OPERATING INCOME $ 26.3 $ 29.6 $ 42.1 $ 47.8 $ 43.3 ============= ============= ============= ============= =============
(1) Universal Life includes interest sensitive whole life contracts. 5
THE PHOENIX COMPANIES, INC. VARIABLE UNIVERSAL LIFE First Quarter 2007 (unaudited) ($ in millions) YTD March December 31, --------------------------- ------------------------------------------------------- 2007 2006 2006 2005 2004 2003 ------------- ------------- ------------- ------------- ------------- ------------- PRE-TAX INCOME Fees $ 8.0 $ 7.2 $ 27.6 $ 32.5 $ 29.6 $ 30.1 Cost of Insurance (COI) 20.3 19.6 77.8 76.7 74.6 72.1 Interest Earned 2.4 1.6 9.2 6.3 5.9 5.6 Surrender Charges 2.1 2.1 6.7 7.1 6.9 6.9 ------------- ------------- ------------- ------------- ------------- ------------- TOTAL REVENUES 32.8 30.5 121.3 122.6 117.0 114.7 ------------- ------------- ------------- ------------- ------------- ------------- Net Death and Disability Benefits 9.0 8.3 31.9 28.5 30.5 23.2 Interest Credited 1.4 1.0 4.8 4.6 3.7 3.6 DAC Amortized 7.2 6.8 8.4 (4.4) 22.2 20.8 Operating Expenses 6.4 5.9 23.5 24.3 24.9 32.1 ------------- ------------- ------------- ------------- ------------- ------------- TOTAL EXPENSES 24.0 22.0 68.6 53.0 81.3 79.7 ------------- ------------- ------------- ------------- ------------- ------------- OPERATING INCOME BEFORE TAX $ 8.8 $ 8.5 $ 52.7 $ 69.6 $ 35.7 $ 35.0 ============= ============= ============= ============= ============= ============= ------------------------------------------------------------------------------------------------------------------------------------ OPERATING EXPENSES Commissions and Concessions $ 4.3 $ 2.9 $ 13.5 $ 13.6 $ 16.3 $ 21.4 Controllable Expenses and Other 9.4 6.8 29.6 26.8 34.0 44.6 ------------- ------------- ------------- ------------- ------------- ------------- TOTAL CURRENT EXPENSES 13.7 9.7 43.1 40.4 50.3 66.0 Deferred Acquisition Costs (7.3) (3.8) (19.6) (16.1) (25.4) (33.9) ------------- ------------- ------------- ------------- ------------- ------------- OPERATING EXPENSES $ 6.4 $ 5.9 $ 23.5 $ 24.3 $ 24.9 $ 32.1 ============= ============= ============= ============= ============= ============= ------------------------------------------------------------------------------------------------------------------------------------ FUNDS UNDER MANAGEMENT Deposits $ 51.6 $ 46.0 $ 182.5 $ 217.9 $ 245.5 $ 353.4 Surrenders (26.7) (19.2) (118.4) (94.2) (75.4) (69.4) ------------- ------------- ------------- ------------- ------------- ------------- NET SALES 24.9 26.8 64.1 123.7 170.1 284.0 Deaths (3.3) (2.7) (4.7) (3.6) (2.2) (1.4) Interest Credited 58.1 101.0 259.9 141.5 170.0 262.7 Fees (8.1) (7.1) (30.4) (30.3) (31.0) (36.4) Cost of Insurance (19.8) (18.9) (75.8) (74.6) (72.4) (69.8) ------------- ------------- ------------- ------------- ------------- ------------- CHANGE IN FUM 51.8 99.1 213.1 156.7 234.5 439.1 Beginning Balance 2,312.9 2,099.8 2,099.8 1,943.1 1,708.6 1,269.5 ------------- ------------- ------------- ------------- ------------- ------------- ENDING FUND BALANCE $ 2,364.7 $ 2,198.9 $ 2,312.9 $ 2,099.8 $ 1,943.1 $ 1,708.6 ============= ============= ============= ============= ============= ============= Life Insurance In Force (1) $ 24,320.5 $ 24,652.2 $ 24,164.6 $ 24,767.7 $ 25,382.0 $ 24,603.0 ============= ============= ============= ============= ============= =============
(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 First Quarter 2007 (unaudited) ($ in millions) Quarters ended 2006 2007 ---------------------------------------------------------------- ------------- March June September December March ------------- ------------- ------------- ------------- ------------- PRE-TAX INCOME Fees $ 7.2 $ 7.5 $ 7.2 $ 5.7 $ 8.0 Cost of Insurance (COI) 19.6 19.4 19.3 19.5 20.3 Interest Earned 1.6 1.9 3.1 2.6 2.4 Surrender Charges 2.1 1.8 1.6 1.2 2.1 ------------- ------------- ------------- ------------- ------------- TOTAL REVENUES 30.5 30.6 31.2 29.0 32.8 ------------- ------------- ------------- ------------- ------------- Net Death and Disability Benefits 8.3 7.3 7.5 8.8 9.0 Interest Credited 1.0 1.0 1.4 1.4 1.4 DAC Amortized 6.8 6.8 6.0 (11.2) 7.2 Operating Expenses 5.9 6.3 5.3 6.0 6.4 ------------- ------------- ------------- ------------- ------------- TOTAL EXPENSES 22.0 21.4 20.2 5.0 24.0 ------------- ------------- ------------- ------------- ------------- OPERATING INCOME BEFORE TAX $ 8.5 $ 9.2 $ 11.0 $ 24.0 $ 8.8 ============= ============= ============= ============= ============= ------------------------------------------------------------------------------------------------------------------------------------ OPERATING EXPENSES Commissions and Concessions $ 2.9 $ 3.4 $ 3.5 $ 3.7 $ 4.3 Controllable Expenses and Other 6.8 8.7 6.5 7.6 9.4 ------------- ------------- ------------- ------------- ------------- TOTAL CURRENT EXPENSES 9.7 12.1 10.0 11.3 13.7 Deferred Acquisition Costs (3.8) (5.8) (4.7) (5.3) (7.3) ------------- ------------- ------------- ------------- ------------- OPERATING EXPENSES $ 5.9 $ 6.3 $ 5.3 $ 6.0 $ 6.4 ============= ============= ============= ============= ============= ------------------------------------------------------------------------------------------------------------------------------------ FUNDS UNDER MANAGEMENT Deposits $ 46.0 $ 52.8 $ 36.5 $ 47.2 $ 51.6 Surrenders (19.2) (50.1) (22.3) (26.8) (26.7) ------------- ------------- ------------- ------------- ------------- NET SALES 26.8 2.7 14.2 20.4 24.9 Deaths (2.7) (0.8) (0.8) (0.4) (3.3) Interest Credited 101.0 (16.0) 61.0 113.9 58.1 Fees (7.1) (8.1) (7.2) (8.0) (8.1) Cost of Insurance (18.9) (18.9) (18.8) (19.2) (19.8) ------------- ------------- ------------- ------------- ------------- CHANGE IN FUM 99.1 (41.1) 48.4 106.7 51.8 Beginning Balance 2,099.8 2,198.9 2,157.8 2,206.2 2,312.9 ------------- ------------- ------------- ------------- ------------- ENDING FUND BALANCE $ 2,198.9 $ 2,157.8 $ 2,206.2 $ 2,312.9 $ 2,364.7 ============= ============= ============= ============= ============= Life Insurance In Force (1) $ 24,652.2 $ 24,257.5 $ 24,164.2 $ 24,164.6 $ 24,320.5 ============= ============= ============= ============= =============
(1) 2006 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 First Quarter 2007 (unaudited) ($ in millions) YTD March December 31, --------------------------- ------------------------------------------------------- 2007 2006 2006 2005 2004 2003 ------------- ------------- ------------- ------------- ------------- ------------- PRE-TAX INCOME Fees $ 6.7 $ 8.0 $ 27.2 $ 17.9 $ 19.1 $ 17.3 Cost of Insurance (COI) 56.1 42.0 184.9 109.9 90.7 78.9 Interest Earned 30.7 27.0 116.5 108.7 100.4 98.2 Surrender Charges 0.7 1.0 3.7 3.2 3.2 2.5 ------------- ------------- ------------- ------------- ------------- ------------- TOTAL REVENUES 94.2 78.0 332.3 239.7 213.4 196.9 ------------- ------------- ------------- ------------- ------------- ------------- Net Death and Disability Benefits 24.7 27.6 98.0 61.8 58.4 51.4 Interest Credited 21.0 19.4 79.6 74.5 74.6 78.0 DAC Amortized 18.6 9.6 55.5 17.9 20.3 17.7 Operating Expenses 12.4 13.5 45.9 37.6 25.7 28.1 ------------- ------------- ------------- ------------- ------------- ------------- TOTAL EXPENSES 76.7 70.1 279.0 191.8 179.0 175.2 ------------- ------------- ------------- ------------- ------------- ------------- OPERATING INCOME BEFORE TAX $ 17.5 $ 7.9 $ 53.3 $ 47.9 $ 34.4 $ 21.7 ============= ============= ============= ============= ============= ============= ------------------------------------------------------------------------------------------------------------------------------------ OPERATING EXPENSES Commissions and Concessions $ 23.5 $ 34.7 $ 104.9 $ 51.1 $ 24.9 $ 28.2 Controllable Expenses and Other 39.1 51.6 176.2 96.5 64.3 74.8 ------------- ------------- ------------- ------------- ------------- ------------- TOTAL CURRENT EXPENSES 62.6 86.3 281.1 147.6 89.2 103.0 Deferred Acquisition Costs (50.2) (72.8) (235.2) (110.0) (63.5) (74.9) ------------- ------------- ------------- ------------- ------------- ------------- OPERATING EXPENSES $ 12.4 $ 13.5 $ 45.9 $ 37.6 $ 25.7 $ 28.1 ============= ============= ============= ============= ============= ============= ------------------------------------------------------------------------------------------------------------------------------------ FUNDS UNDER MANAGEMENT Deposits $ 92.3 $ 135.5 $ 417.1 $ 297.8 $ 229.4 $ 217.8 Surrenders (21.9) (22.5) (84.7) (94.1) (126.2) (118.6) ------------- ------------- ------------- ------------- ------------- ------------- NET SALES 70.4 113.0 332.4 203.7 103.2 99.2 Deaths (8.3) (6.8) (20.5) (22.3) (16.9) (19.4) Interest Credited 21.0 19.4 79.6 78.7 74.6 78.0 Fees (8.2) (11.4) (36.6) (26.8) (23.5) (24.9) Cost of Insurance (56.1) (42.0) (184.9) (109.9) (90.7) (78.9) ------------- ------------- ------------- ------------- ------------- ------------- CHANGE IN FUM 18.8 72.2 170.0 123.4 46.7 54.0 Beginning Balance 1,904.1 1,734.1 1,734.1 1,610.7 1,564.0 1,510.0 ------------- ------------- ------------- ------------- ------------- ------------- ENDING FUND BALANCE $ 1,922.9 $ 1,806.3 $ 1,904.1 $ 1,734.1 $ 1,610.7 $ 1,564.0 ============= ============= ============= ============= ============= ============= Life Insurance In Force $ 21,311.6 $ 17,667.4 $ 20,402.1 $ 16,303.0 $ 14,103.7 $ 12,830.3 ============= ============= ============= ============= ============= =============
8
THE PHOENIX COMPANIES, INC. UNIVERSAL LIFE / INTEREST SENSITIVE First Quarter 2007 (unaudited) ($ in millions) Quarters ended 2006 2007 ---------------------------------------------------------------- ------------- March June September December March ------------- ------------- ------------- ------------- ------------- PRE-TAX INCOME Fees $ 8.0 $ 5.4 $ 7.0 $ 6.8 $ 6.7 Cost of Insurance (COI) 42.0 44.5 46.5 51.9 56.1 Interest Earned 27.0 29.1 29.7 30.7 30.7 Surrender Charges 1.0 0.3 1.7 0.7 0.7 ------------- ------------- ------------- ------------- ------------- TOTAL REVENUES 78.0 79.3 84.9 90.1 94.2 ------------- ------------- ------------- ------------- ------------- Net Death and Disability Benefits 27.6 23.9 15.8 30.7 24.7 Interest Credited 19.4 19.8 19.9 20.5 21.0 DAC Amortized 9.6 13.7 21.9 10.3 18.6 Operating Expenses 13.5 10.5 10.2 11.7 12.4 ------------- ------------- ------------- ------------- ------------- TOTAL EXPENSES 70.1 67.9 67.8 73.2 76.7 ------------- ------------- ------------- ------------- ------------- OPERATING INCOME BEFORE TAX $ 7.9 $ 11.4 $ 17.1 $ 16.9 $ 17.5 ============= ============= ============= ============= ============= ------------------------------------------------------------------------------------------------------------------------------------ OPERATING EXPENSES Commissions and Concessions $ 34.7 $ 14.1 $ 21.6 $ 34.5 $ 23.5 Controllable Expenses and Other 51.6 32.2 35.9 56.5 39.1 ------------- ------------- ------------- ------------- ------------- TOTAL CURRENT EXPENSES 86.3 46.3 57.5 91.0 62.6 Deferred Acquisition Costs (72.8) (35.8) (47.3) (79.3) (50.2) ------------- ------------- ------------- ------------- ------------- OPERATING EXPENSES $ 13.5 $ 10.5 $ 10.2 $ 11.7 $ 12.4 ============= ============= ============= ============= ============= ------------------------------------------------------------------------------------------------------------------------------------ FUNDS UNDER MANAGEMENT Deposits $ 135.5 $ 73.7 $ 88.7 $ 119.2 $ 92.3 Surrenders (22.5) (21.3) (22.4) (18.5) (21.9) ------------- ------------- ------------- ------------- ------------- NET SALES 113.0 52.4 66.3 100.7 70.4 Deaths (6.8) (5.4) (5.1) (3.2) (8.3) Interest Credited 19.4 19.8 19.9 20.5 21.0 Fees (11.4) (6.5) (8.2) (10.5) (8.2) Cost of Insurance (42.0) (44.5) (46.4) (52.0) (56.1) ------------- ------------- ------------- ------------- ------------- CHANGE IN FUM 72.2 15.8 26.5 55.5 18.8 Beginning Balance 1,734.1 1,806.3 1,822.1 1,848.6 1,904.1 ------------- ------------- ------------- ------------- ------------- ENDING FUND BALANCE $ 1,806.3 $ 1,822.1 $ 1,848.6 $ 1,904.1 $ 1,922.9 ============= ============= ============= ============= ============= Life Insurance In Force $ 17,667.4 $ 18,217.0 $ 19,025.8 $ 20,402.1 $ 21,311.6 ============= ============= ============= ============= =============
9
THE PHOENIX COMPANIES, INC. LIFE AND PRIVATE PLACEMENT SALES First Quarter 2007 (unaudited) ($ in millions) YTD March December 31, --------------------------- ------------------------------------------------------- 2007 2006 2006 2005 2004 2003 ------------- ------------- ------------- ------------- ------------- ------------- LIFE INSURANCE SALES WHOLESALER CHANNEL Variable Universal Life $ 6.4 $ 2.8 $ 16.7 $ 16.1 $ 18.2 $ 30.1 Universal Life/Interest Sensitive 40.2 83.5 221.9 104.4 47.5 67.5 Term Life 5.5 5.5 20.3 16.4 15.3 19.2 Participating Whole Life 0.6 ------------- ------------- ------------- ------------- ------------- ------------- Life Insurance Annualized Premium (1) 52.1 91.8 258.9 136.9 81.0 117.4 ============= ============= ============= ============= ============= ============= Variable Universal Life 2.4 1.1 8.6 6.4 10.8 20.1 Universal Life/Interest Sensitive 7.8 18.0 61.8 49.2 53.2 61.6 ------------- ------------- ------------- ------------- ------------- ------------- Life Insurance Single Premium 10.2 19.1 70.4 55.6 64.0 81.7 ============= ============= ============= ============= ============= ============= Variable Universal Life 8.8 3.9 25.3 22.5 29.0 50.2 Universal Life/Interest Sensitive 48.0 101.5 283.7 153.6 100.7 129.1 Term Life 5.5 5.5 20.3 16.4 15.3 19.2 Participating Whole Life 0.6 ------------- ------------- ------------- ------------- ------------- ------------- Total Wholesaler Life Insurance Premium (2) $ 62.3 $ 110.9 $ 329.3 $ 192.5 $ 145.0 $ 199.1 ============= ============= ============= ============= ============= ============= PRIVATE PLACEMENT LIFE AND ANNUITY DEPOSITS Variable Universal Life (annualized and single) $ 11.4 $ 8.5 $ 33.5 $ 46.5 $ 60.1 $ 149.5 Annuity 54.2 3.4 1,020.2 773.8 152.6 394.9 ------------- ------------- ------------- ------------- ------------- ------------- Total Private Placement Life and Annuity Deposits $ 65.6 $ 11.9 $ 1,053.7 $ 820.3 $ 212.7 $ 544.4 ============= ============= ============= ============= ============= ============= PRIVATE PLACEMENT FUNDS UNDER MANAGEMENT $ 4,185.0 $ 2,783.9 $ 4,055.5 $ 2,776.4 $ 1,898.5 $ 1,535.5 ============= ============= ============= ============= ============= =============
(1) Annualized Premium represents first year premiums on an annual basis. (2) Total Premium represents Annualized and Single premiums. 10 THE PHOENIX COMPANIES, INC. LIFE AND PRIVATE PLACEMENT SALES First Quarter 2007 (unaudited) ($ in millions) Quarters ended
2006 2007 --------------------------------------------------------------- ------------- March June September December March ------------- ------------- ------------- ------------- ------------- LIFE INSURANCE SALES WHOLESALER CHANNEL Variable Universal Life $ 2.8 $ 4.9 $ 3.2 $ 5.8 $ 6.4 Universal Life/Interest Sensitive 83.5 30.2 42.4 65.8 40.2 Term Life 5.5 4.5 4.7 5.6 5.5 ------------- ------------- ------------- ------------- ------------- Life Insurance Annualized Premium (1) 91.8 39.6 50.3 77.2 52.1 ============= ============= ============= ============= ============= Variable Universal Life 1.1 2.1 2.8 2.6 2.4 Universal Life/Interest Sensitive 18.0 9.1 15.5 19.2 7.8 ------------- ------------- ------------- ------------- ------------- Life Insurance Single Premium 19.1 11.2 18.3 21.8 10.2 ============= ============= ============= ============= ============= Variable Universal Life 3.9 7.0 6.0 8.4 8.8 Universal Life/Interest Sensitive 101.5 39.3 57.9 85.0 48.0 Term Life 5.5 4.5 4.7 5.6 5.5 ------------- ------------- ------------- ------------- ------------- Total Wholesaler Life Insurance Premium (2) $ 110.9 $ 50.8 $ 68.6 $ 99.0 $ 62.3 ============= ============= ============= ============= ============= PRIVATE PLACEMENT LIFE AND ANNUITY DEPOSITS Variable Universal Life (annualized and single) $ 8.5 $ 17.3 $ 1.7 $ 6.0 $ 11.4 Annuity 3.4 42.6 33.1 941.1 54.2 ------------- ------------- ------------- ------------- ------------- Total Private Placement Life and Annuity Deposits $ 11.9 $ 59.9 $ 34.8 $ 947.1 $ 65.6 ============= ============= ============= ============= ============= PRIVATE PLACEMENT FUNDS UNDER MANAGEMENT $ 2,783.9 $ 2,912.2 $ 2,989.5 $ 4,055.5 $ 4,185.0 ============= ============= ============= ============= =============
(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 First Quarter 2007 (unaudited) ($ in millions)
YTD March December 31, --------------------------- ------------------------------------------------------- 2007 2006 2006 2005 2004 2003 ------------- ------------- ------------- ------------- ------------- ------------- PRE-TAX INCOME Fees $ 17.3 $ 16.6 $ 66.9 $ 65.4 $ 63.8 $ 57.2 Surrender Charges 1.6 1.5 6.3 7.0 5.8 7.4 Interest earned on GIA and Required Interest 27.1 35.5 131.7 165.1 158.0 150.1 ------------- ------------- ------------- ------------- ------------- ------------- TOTAL REVENUES 46.0 53.6 204.9 237.5 227.6 214.7 ------------- ------------- ------------- ------------- ------------- ------------- Mortality Cost (1.0) 0.3 5.8 6.6 8.9 4.4 DAC Amortized 12.3 11.2 66.6 62.6 35.7 26.5 Interest Credited 17.3 25.1 87.4 112.1 123.2 133.0 Operating Expenses 10.5 11.3 41.1 44.2 47.1 51.8 ------------- ------------- ------------- ------------- ------------- ------------- TOTAL EXPENSES 39.1 47.9 200.9 225.5 214.9 215.7 ------------- ------------- ------------- ------------- ------------- ------------- OPERATING INCOME (LOSS) BEFORE TAX $ 6.9 $ 5.7 $ 4.0 $ 12.0 $ 12.7 $ (1.0) ============= ============= ============= ============= ============= ============= ------------------------------------------------------------------------------------------------------------------------------------ OPERATING EXPENSES Commissions and Concessions $ 10.9 $ 9.9 $ 39.7 $ 38.2 $ 42.6 $ 51.1 Controllable Expenses and Other 11.9 10.1 40.8 37.9 48.2 66.2 ------------- ------------- ------------- ------------- ------------- ------------- TOTAL CURRENT EXPENSES 22.8 20.0 80.5 76.1 90.8 117.3 Deferred Acquisition Costs (12.3) (8.7) (39.4) (31.9) (43.7) (65.5) ------------- ------------- ------------- ------------- ------------- ------------- OPERATING EXPENSES $ 10.5 $ 11.3 $ 41.1 $ 44.2 $ 47.1 $ 51.8 ============= ============= ============= ============= ============= ============= ------------------------------------------------------------------------------------------------------------------------------------ FUNDS UNDER MANAGEMENT Deposits $ 187.1 $ 96.3 $ 1,443.9 $ 1,113.5 $ 671.2 $ 1,428.3 Surrenders (259.7) (490.7) (1,596.1) (1,180.9) (803.1) (865.6) ------------- ------------- ------------- ------------- ------------- ------------- NET SALES (72.6) (394.4) (152.2) (67.4) (131.9) 562.7 Deaths (21.2) (22.6) (87.0) (80.2) (81.6) (71.4) Interest Credited 169.6 319.2 949.6 545.8 628.2 895.2 Fees (17.8) (15.8) (70.9) (63.0) (59.8) (57.7) ------------- ------------- ------------- ------------- ------------- ------------- CHANGE IN FUM 58.0 (113.6) 639.5 335.2 354.9 1,328.8 Beginning Balance 8,677.6 8,038.1 8,038.1 7,702.9 7,348.0 6,019.2 ------------- ------------- ------------- ------------- ------------- ------------- ENDING FUND BALANCE $ 8,735.6 $ 7,924.5 $ 8,677.6 $ 8,038.1 $ 7,702.9 $ 7,348.0 ============= ============= ============= ============= ============= ============= VA Funds in Guaranteed Interest Accounts (1) $ 955.9 $ 1,355.0 $ 1,030.8 $ 1,553.8 $ 1,939.1 $ 2,067.4 ============= ============= ============= ============= ============= ============= Fixed Annuities (1) $ 689.8 $ 1,005.2 $ 720.5 $ 1,011.4 $ 1,175.5 $ 1,216.3 ============= ============= ============= ============= ============= =============
(1) Amounts are included in the annuities funds under management table above. 12 THE PHOENIX COMPANIES, INC. ANNUITIES First Quarter 2007 (unaudited) ($ in millions) Quarters ended
2006 2007 --------------------------------------------------------------- ------------- March June September December March ------------- ------------- ------------- ------------- ------------- PRE-TAX INCOME Fees $ 16.6 $ 16.8 $ 16.3 $ 17.2 $ 17.3 Surrender Charges 1.5 1.7 1.6 1.5 1.6 Interest earned on GIA and Required Interest 35.5 34.3 30.8 31.1 27.1 ------------- ------------- ------------- ------------- ------------- TOTAL REVENUES 53.6 52.8 48.7 49.8 46.0 ------------- ------------- ------------- ------------- ------------- Mortality Cost 0.3 1.4 1.9 2.2 (1.0) DAC Amortized 11.2 16.3 12.0 27.1 12.3 Interest Credited 25.1 24.2 19.2 18.9 17.3 Operating Expenses 11.3 10.4 9.6 9.8 10.5 ------------- ------------- ------------- ------------- ------------- TOTAL EXPENSES 47.9 52.3 42.7 58.0 39.1 ------------- ------------- ------------- ------------- ------------- OPERATING INCOME (LOSS) BEFORE TAX $ 5.7 $ 0.5 $ 6.0 $ (8.2) $ 6.9 ============= ============= ============= ============= ============= ------------------------------------------------------------------------------------------------------------------------------------ OPERATING EXPENSES Commissions and Concessions $ 9.9 $ 10.2 $ 9.1 $ 10.5 $ 10.9 Controllable Expenses and Other 10.1 9.7 9.6 11.4 11.9 ------------- ------------- ------------- ------------- ------------- TOTAL CURRENT EXPENSES 20.0 19.9 18.7 21.9 22.8 Deferred Acquisition Costs (8.7) (9.5) (9.1) (12.1) (12.3) ------------- ------------- ------------- ------------- ------------- OPERATING EXPENSES $ 11.3 $ 10.4 $ 9.6 $ 9.8 $ 10.5 ============= ============= ============= ============= ============= ------------------------------------------------------------------------------------------------------------------------------------ FUNDS UNDER MANAGEMENT Deposits $ 96.3 $ 147.1 $ 136.7 $ 1,063.8 $ 187.1 Surrenders (490.7) (556.7) (306.1) (242.6) (259.7) ------------- ------------- ------------- ------------- ------------- NET SALES (394.4) (409.6) (169.4) 821.2 (72.6) Deaths (22.6) (23.6) (21.4) (19.4) (21.2) Interest Credited 319.2 80.9 206.7 342.8 169.6 Fees (15.8) (16.2) (16.0) (22.9) (17.8) ------------- ------------- ------------- ------------- ------------- CHANGE IN FUM (113.6) (368.5) (0.1) 1,121.7 58.0 Beginning Balance 8,038.1 7,924.5 7,556.0 7,555.9 8,677.6 ------------- ------------- ------------- ------------- ------------- ENDING FUND BALANCE $ 7,924.5 $ 7,556.0 $ 7,555.9 $ 8,677.6 $ 8,735.6 ============= ============= ============= ============= ============= VA Funds in Guaranteed Interest Accounts (1) $ 1,355.0 $ 1,195.6 $ 1,087.8 $ 1,030.8 $ 955.9 ============= ============= ============= ============= ============= Fixed Annuities (1) $ 1,005.2 $ 781.4 $ 740.9 $ 720.5 $ 689.8 ============= ============= ============= ============= =============
(1) Amounts are included in the annuities funds under management table above. 13 THE PHOENIX COMPANIES, INC. SUPPLEMENTARY LIFE AND ANNUITY INFORMATION First Quarter 2007 (unaudited) ($ in millions)
YTD March December 31, --------------------------- ------------------------------------------------------- 2007 2006 2006 2005 2004 2003 ------------- ------------- ------------- ------------- ------------- ------------- DEFERRED ACQUISITION COSTS Variable Universal Life $ 364.3 $ 349.9 $ 364.2 $ 353.0 $ 332.5 $ 329.3 Universal Life 565.4 417.7 533.9 354.7 262.0 219.2 Variable Annuities 275.9 281.7 275.0 281.3 299.0 291.8 Fixed Annuities 19.4 38.2 20.3 38.8 46.0 45.2 Participating 561.8 548.1 559.0 544.2 577.0 576.3 Offset for Unrealized Investment (Gains) Losses (5.0) 22.5 0.3 (16.0) (86.6) (94.1) ------------- ------------- ------------- ------------- ------------- ------------- Total $ 1,781.8 $ 1,658.1 $ 1,752.7 $ 1,556.0 $ 1,429.9 $ 1,367.7 ============= ============= ============= ============= ============= ============= ------------------------------------------------------------------------------------------------------------------------------------ VARIABLE ANNUITY GUARANTEED MINIMUM DEATH BENEFITS Death Benefit in Excess of Fund Value $ 225.2 $ 291.6 $ 238.8 $ 335.5 $ 441.1 $ 616.9 Death Benefit in Excess of Fund Value, Net of Reinsurance 48.3 66.5 51.3 82.1 123.5 183.0 Statutory Reserve, Net of Reinsurance 13.3 13.2 13.2 13.8 15.0 17.3 GAAP Reserve, Net of Reinsurance $ 10.9 $ 9.3 $ 10.7 $ 10.7 $ 9.1 $ 7.8 =============
14 THE PHOENIX COMPANIES, INC. SUPPLEMENTARY LIFE AND ANNUITY INFORMATION First Quarter 2007 (unaudited) ($ in millions) Quarters ended
2006 2007 --------------------------------------------------------------- ------------- March June September December March ------------- ------------- ------------- ------------- ------------- DEFERRED ACQUISITION COSTS Variable Universal Life $ 349.9 $ 348.9 $ 347.6 $ 364.2 $ 364.3 Universal Life 417.7 439.6 465.2 533.9 565.4 Variable Annuities 281.7 276.4 275.2 275.0 275.9 Fixed Annuities 38.2 36.6 35.1 20.3 19.4 Participating 548.1 551.1 554.8 559.0 561.8 Offset for Unrealized Investment Gains and Losses 22.5 57.5 6.6 0.3 (5.0) ------------- ------------- ------------- ------------- ------------- Total $ 1,658.1 $ 1,710.1 $ 1,684.5 $ 1,752.7 $ 1,781.8 ============= ============= ============= ============= ============= ------------------------------------------------------------------------------------------------------------------------------------ VARIABLE ANNUITY GUARANTEED MINIMUM DEATH BENEFITS Death Benefit in Excess of Fund Value $ 291.6 $ 311.4 $ 274.7 $ 238.8 $ 225.2 Death Benefit in Excess of Fund Value, Net of Reinsurance 66.5 75.5 63.4 51.3 48.3 Statutory Reserve, Net of Reinsurance 13.2 14.0 13.7 13.2 13.3 GAAP Reserve, Net of Reinsurance $ 9.3 $ 10.5 $ 10.6 $ 10.7 $ 10.9 =============
15
THE PHOENIX COMPANIES, INC. ASSET MANAGEMENT First Quarter 2007 (unaudited) ($ in millions) YTD March December 31, --------------------------- ------------------------------------------------------- 2007 2006 2006 2005 2004 2003 ------------- ------------- ------------- ------------- ------------- ------------- OPERATING INCOME Investment Management Fees $ 36.9 $ 36.5 $ 154.1 $ 182.1 $ 219.0 $ 205.5 Mutual Funds - Ancillary Fees (1) 14.3 10.7 49.4 41.1 38.8 35.5 Other Revenue 2.2 1.3 5.3 4.9 7.2 9.3 ------------- ------------- ------------- ------------- ------------- ------------- Total Revenues 53.4 48.5 208.8 228.1 265.0 250.3 ------------- ------------- ------------- ------------- ------------- ------------- Employment Expenses 24.0 22.5 89.4 103.9 132.6 129.6 Distribution & Admin Expenses (2) 11.6 8.9 41.3 35.8 32.9 28.6 Other Operating Expenses (1)(2) 10.1 11.5 43.8 50.6 53.0 58.1 Amortization of Intangibles 7.6 8.0 32.0 33.2 33.8 33.2 Intangible Asset Impairments 32.5 32.5 10.6 ------------- ------------- ------------- ------------- ------------- ------------- Total Operating Expenses 53.3 83.4 239.0 234.1 252.3 249.5 ------------- ------------- ------------- ------------- ------------- ------------- Management Income (Loss) 0.1 (34.9) (30.2) (6.0) 12.7 0.8 Other Income - Net 0.5 0.3 1.6 2.2 1.7 2.5 Minority Interest (6.7) (14.3) (12.0) ------------- ------------- ------------- ------------- ------------- ------------- Operating Income (Loss), before income taxes 0.6 (34.6) (28.6) (10.5) 0.1 (8.7) Applicable Income Taxes (Benefit) 0.9 (13.4) (10.7) (4.7) 2.3 (3.3) ------------- ------------- ------------- ------------- ------------- ------------- Operating Income (Loss) $ (0.3) $ (21.2) $ (17.9) $ (5.8) $ (2.2) $ (5.4) ============= ============= ============= ============= ============= =============
(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 First Quarter 2007 (unaudited) ($ in millions) Quarters ended 2006 2007 ---------------------------------------------------------------- ------------- March June September December March ------------- ------------- ------------- ------------- ------------- OPERATING INCOME Investment Management Fees $ 36.5 $ 37.5 $ 42.0 $ 38.1 $ 36.9 Mutual Funds - Ancillary Fees 10.7 11.6 14.3 12.8 14.3 Other Revenue 1.3 0.8 1.9 1.3 2.2 ------------- ------------- ------------- ------------- ------------- Total Revenues 48.5 49.9 58.2 52.2 53.4 ------------- ------------- ------------- ------------- ------------- Employment Expenses 22.5 19.9 23.1 23.9 24.0 Distribution & Admin Expenses (1) 8.9 9.1 10.7 12.6 11.6 Other Operating Expenses (1) 11.5 11.5 10.4 10.4 10.1 Amortization of Intangibles 8.0 8.5 7.7 7.8 7.6 Intangible Asset Impairments 32.5 ------------- ------------- ------------- ------------- ------------- Total Operating Expenses 83.4 49.0 51.9 54.7 53.3 ------------- ------------- ------------- ------------- ------------- Management Income (Loss) (34.9) 0.9 6.3 (2.5) 0.1 Other Income - Net 0.3 0.4 0.3 0.6 0.5 ------------- ------------- ------------- ------------- ------------- Operating Income (Loss), before income taxes (34.6) 1.3 6.6 (1.9) 0.6 Applicable Income Taxes (Benefit) (13.4) 0.6 2.3 (0.2) 0.9 ------------- ------------- ------------- ------------- ------------- Operating Income (Loss) $ (21.2) $ 0.7 $ 4.3 $ (1.7) $ (0.3) ============= ============= ============= ============= =============
(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 First Quarter 2007 (unaudited) ($ in millions) YTD March December 31, --------------------------- ------------------------------------------------------- 2007 2006 2006 2005 2004 2003 ------------- ------------- ------------- ------------- ------------- ------------- RETAIL PRODUCTS: Managed Accounts ---------------- Deposits and reinvestments $ 290.4 $ 329.1 $ 1,141.2 $ 1,760.3 $ 2,109.9 $ 2,268.3 Redemptions and withdrawals (728.1) (1,465.9) (4,297.6) (5,722.8) (5,203.0) (2,656.6) ------------- ------------- ------------- ------------- ------------- ------------- Net Flows (437.7) (1,136.8) (3,156.4) (3,962.5) (3,093.1) (388.3) Performance 125.6 461.4 593.9 (62.5) 950.3 1,537.5 Acquisitions (dispositions) / Other 71.1 71.1 (158.1) - ------------- ------------- ------------- ------------- ------------- ------------- Net Change in AUM (312.1) (604.3) (2,491.4) (4,183.1) (2,142.8) 1,149.2 Assets under management, beginning of period 6,841.1 9,332.5 9,332.5 13,515.6 15,658.4 14,509.2 ------------- ------------- ------------- ------------- ------------- ------------- Assets under management, end of period $ 6,529.0 $ 8,728.2 $ 6,841.1 $ 9,332.5 $ 13,515.6 $ 15,658.4 ============= ============= ============= ============= ============= ============= Mutual Funds ------------ Deposits and reinvestments $ 1,160.7 $ 640.5 $ 2,567.6 $ 2,030.3 $ 1,673.2 $ 1,489.2 Redemptions and withdrawals (881.8) (620.9) (2,828.7) (2,443.9) (2,004.5) (1,683.6) ------------- ------------- ------------- ------------- ------------- ------------- Net Flows 278.9 19.6 (261.1) (413.6) (331.3) (194.4) Performance 298.5 349.4 1,522.2 184.0 805.9 1,588.8 Money market funds net change in AUM (364.2) (0.1) (1,382.8) (28.4) (28.9) (45.2) Acquisitions (dispositions) / Other (14.0) 185.0 9,838.3 120.0 105.7 (80.6) ------------- ------------- ------------- ------------- ------------- ------------- Net Change in AUM 199.2 553.9 9,716.6 (137.9) 551.4 1,268.6 Assets under management, beginning of period 21,863.8 12,147.2 12,147.2 12,285.1 11,733.6 10,465.0 ------------- ------------- ------------- ------------- ------------- ------------- Assets under management, end of period $ 22,063.0 $ 12,701.1 $ 21,863.8 $ 12,147.2 $ 12,285.0 $ 11,733.6 ============= ============= ============= ============= ============= ============= INSTITUTIONAL PRODUCTS: Deposits and reinvestments $ 281.3 $ 574.6 $ 1,609.1 $ 5,545.1 $ 2,885.2 $ 3,230.7 Redemptions and withdrawals (513.3) (940.6) (3,504.3) (6,599.1) (5,389.2) (3,505.3) ------------- ------------- ------------- ------------- ------------- ------------- Net Flows (232.0) (366.0) (1,895.2) (1,054.0) (2,504.0) (274.6) Performance 233.8 283.7 1,089.2 367.3 1,140.5 2,333.0 Acquisitions (dispositions) / Other (2) (261.9) (14.2) (332.6) (63.4) 234.3 (76.0) ------------- ------------- ------------- ------------- ------------- ------------- Net Change in AUM (260.1) (96.5) (1,138.6) (750.1) (1,129.2) 1,982.4 Assets under management, beginning of period 12,294.8 13,433.4 13,433.4 14,183.5 15,312.7 13,330.3 ------------- ------------- ------------- ------------- ------------- ------------- Assets under management, end of period $ 12,034.7 $ 13,336.9 $ 12,294.8 $ 13,433.4 $ 14,183.5 $ 15,312.7 ============= ============= ============= ============= ============= ============= STRUCTURED FINANCE PRODUCTS: Deposits and reinvestments $ 1,500.0 $ 13.8 $ 2,423.5 $ 1,002.3 $ 1.7 $ 1.1 Redemptions and withdrawals (299.0) (196.9) (1,141.6) (1,157.9) (659.2) (303.1) ------------- ------------- ------------- ------------- ------------- ------------- Net Flows 1,201.0 (183.1) 1,281.9 (155.6) (657.5) (302.0) Performance (73.7) 37.4 171.4 (258.9) 26.0 327.0 ------------- ------------- ------------- ------------- ------------- ------------- Net Change in AUM 1,127.3 (145.7) 1,453.3 (414.5) (631.5) 25.0 Assets under management, beginning of period 3,963.1 2,509.8 2,509.8 2,924.3 3,555.8 3,530.8 ------------- ------------- ------------- ------------- ------------- ------------- Assets under management, end of period $ 5,090.4 $ 2,364.1 $ 3,963.1 $ 2,509.8 $ 2,924.3 $ 3,555.8 ============= ============= ============= ============= ============= ============= TOTAL: Deposits and reinvestments $ 3,232.4 $ 1,558.0 $ 7,741.4 $ 10,338.0 $ 6,670.0 $ 6,989.3 Redemptions and withdrawals (2,422.2) (3,224.3) (11,772.2) (15,923.7) (13,255.9) (8,148.6) ------------- ------------- ------------- ------------- ------------- ------------- Net Flows 810.2 (1,666.3) (4,030.8) (5,585.7) (6,585.9) (1,159.3) Performance 584.2 1,131.9 3,376.7 229.9 2,922.7 5,786.3 Money market funds net change in AUM (364.2) (0.1) (1,382.8) (28.4) (28.9) (45.2) Acquisitions (dispositions) / Other (275.9) 241.9 9,576.8 (101.4) 340.0 (156.6) ------------- ------------- ------------- ------------- ------------- ------------- Net Change in AUM 754.3 (292.6) 7,539.9 (5,485.6) (3,352.1) 4,425.2 Assets under management, beginning of period 44,962.8 37,422.9 37,422.9 42,908.5 46,260.5 41,835.3 ------------- ------------- ------------- ------------- ------------- ------------- Assets under management, end of period $ 45,717.1 $ 37,130.3 $ 44,962.8 $ 37,422.9 $ 42,908.4 $ 46,260.5 ============= ============= ============= ============= ============= ============= * Variable Products Change in AUM (included in Institutional Products) $ (10.2) $ 27.7 $ 106.5 $ (342.3) $ 211.6 $ 200.4 ============= ============= ============= ============= ============= ============= Money Market balances (1) $ 5,336.9 $ 101.4 $ 5,701.1 $ 101.4 $ 129.8 $ 158.6 ============= ============= ============= ============= ============= =============
(1) Money Market balances included in Mutual Funds above. (2) Effective for the 4th quarter of 2006, "Other" includes the net change in AUM during the quarter of institutional cash management accounts. This treatment is consistent with the treatment of money market mutual funds. 18
THE PHOENIX COMPANIES, INC. ASSET MANAGEMENT NET FLOWS AND ASSETS UNDER MANAGEMENT First Quarter 2007 (unaudited) ($ in millions) 2006 2007 ---------------------------------------------------------------- ------------- March June September December March ------------- ------------- ------------- ------------- ------------- RETAIL PRODUCTS: Managed Accounts ---------------- Deposits and reinvestments $ 329.1 $ 316.1 $ 216.5 $ 279.5 $ 290.4 Redemptions and withdrawals (1,465.9) (1,339.1) (969.6) (523.0) (728.1) ------------- ------------- ------------- ------------- ------------- Net Flows (1,136.8) (1,023.0) (753.1) (243.5) (437.7) Performance 461.4 (347.6) 169.9 310.2 125.6 Acquisitions (dispositions) / Other 71.1 ------------- ------------- ------------- ------------- ------------- Net Change in AUM (604.3) (1,370.6) (583.2) 66.7 (312.1) Assets under management, beginning of period 9,332.5 8,728.2 7,357.6 6,774.4 6,841.1 ------------- ------------- ------------- ------------- ------------- Assets under management, end of period $ 8,728.2 $ 7,357.6 $ 6,774.4 $ 6,841.1 $ 6,529.0 ============= ============= ============= ============= ============= Mutual Funds ------------ Deposits and reinvestments $ 640.5 $ 417.4 $ 729.3 $ 780.4 $ 1,160.7 Redemptions and withdrawals (620.9) (612.0) (881.3) (714.5) (881.8) ------------- ------------- ------------- ------------- ------------- Net Flows 19.6 (194.6) (152.0) 65.9 278.9 Performance 349.4 (174.4) 575.8 771.4 298.5 Money market funds net change in AUM (0.1) (276.0) (1,169.4) 62.7 (364.2) Acquisitions (dispositions) / Other 185.0 9,824.4 (20.9) (150.2) (14.0) ------------- ------------- ------------- ------------- ------------- Net Change in AUM 553.9 9,179.4 (766.5) 749.8 199.2 Assets under management, beginning of period 12,147.2 12,701.1 21,880.5 21,114.0 21,863.8 ------------- ------------- ------------- ------------- ------------- Assets under management, end of period $ 12,701.1 $ 21,880.5 $ 21,114.0 $ 21,863.8 $ 22,063.0 ============= ============= ============= ============= ============= INSTITUTIONAL PRODUCTS: Deposits and reinvestments $ 574.6 $ 238.8 $ 277.7 $ 518.0 $ 281.3 Redemptions and withdrawals (940.6) (1,467.4) (440.1) (656.2) (513.3) ------------- ------------- ------------- ------------- ------------- Net Flows (366.0) (1,228.6) (162.4) (138.2) (232.0) Performance 283.7 (65.7) 526.4 344.8 233.8 Acquisitions (dispositions) / Other (2) (14.2) (114.8) (41.3) (162.3) (261.9) ------------- ------------- ------------- ------------- ------------- Net Change in AUM (96.5) (1,409.1) 322.7 44.3 (260.1) Assets under management, beginning of period 13,433.4 13,336.9 11,927.8 12,250.5 12,294.8 ------------- ------------- ------------- ------------- ------------- Assets under management, end of period $ 13,336.9 $ 11,927.8 $ 12,250.5 $ 12,294.8 $ 12,034.7 ============= ============= ============= ============= ============= STRUCTURED FINANCE PRODUCTS: Deposits and reinvestments $ 13.8 $ 233.5 $ 1,676.2 $ 500.0 $ 1,500.0 Redemptions and withdrawals (196.9) (468.1) (157.9) (318.7) (299.0) ------------- ------------- ------------- ------------- ------------- Net Flows (183.1) (234.6) 1,518.3 181.3 1,201.0 Performance 37.4 14.4 64.6 55.0 (73.7) ------------- ------------- ------------- ------------- ------------- Net Change in AUM (145.7) (220.2) 1,582.9 236.3 1,127.3 Assets under management, beginning of period 2,509.8 2,364.1 2,143.9 3,726.8 3,963.1 ------------- ------------- ------------- ------------- ------------- Assets under management, end of period $ 2,364.1 $ 2,143.9 $ 3,726.8 $ 3,963.1 $ 5,090.4 ============= ============= ============= ============= ============= TOTAL: Deposits and reinvestments $ 1,558.0 $ 1,205.8 $ 2,899.7 $ 2,077.9 $ 3,232.4 Redemptions and withdrawals (3,224.3) (3,886.6) (2,448.9) (2,212.4) (2,422.2) ------------- ------------- ------------- ------------- ------------- Net Flows (1,666.3) (2,680.8) 450.8 (134.5) 810.2 Performance 1,131.9 (573.3) 1,336.7 1,481.4 584.2 Money market funds net change in AUM (0.1) (276.0) (1,169.4) 62.7 (364.2) Acquisitions (dispositions) / Other 241.9 9,709.6 (62.2) (312.5) (275.9) ------------- ------------- ------------- ------------- ------------- Net Change in AUM (292.6) 6,179.5 555.9 1,097.1 754.3 Assets under management, beginning of period 37,422.9 37,130.3 43,309.8 43,865.7 44,962.8 ------------- ------------- ------------- ------------- ------------- Assets under management, end of period $ 37,130.3 $ 43,309.8 $ 43,865.7 $ 44,962.8 $ 45,717.1 ============= ============= ============= ============= ============= * Variable Products Change in AUM (included in Institutional Products) $ 27.7 $ (188.5) $ 43.5 $ 223.8 $ (10.2) ============= ============= ============= ============= ============= Money Market balances (1) $ 101.4 $ 6,807.8 $ 5,638.4 $ 5,701.1 $ 5,336.9 ============= ============= ============= ============= =============
(1) Money Market balances included in Mutual Funds above. (2) Effective for the 4th quarter of 2006, "Other" includes the net change in AUM during the quarter of institutional cash management accounts. This treatment is consistent with the treatment of money market mutual funds. 19
THE PHOENIX COMPANIES, INC. VENTURE CAPITAL SEGMENT (1) First Quarter 2007 (unaudited) ($ in millions) December 31, ---------------------------------------------- 2005 2004 2003 ------------- ------------- ------------- OPERATING INCOME Operating Gain (Loss) $ 3.5 $ (1.7) $ (5.8) Realized Gains (Losses) on Cash and Stock Distributions 21.9 7.4 4.9 Change in Unrealized Gains (Losses) on Investments Held in Partnerships (10.6) 13.6 37.1 ------------- ------------- ------------- Equity in Partnership Earnings (Losses), before income taxes 14.8 19.3 36.2 Applicable Income Taxes (Benefit) 5.2 6.8 12.7 ------------- ------------- ------------- Operating Income (Loss) $ 9.6 $ 12.5 $ 23.5 ============= ============= ============= ------------------------------------------------------------------------------------------------------------------------------------ VENTURE CAPITAL INVESTMENTS Contributions (Dollars Invested) $ 27.6 $ 37.7 $ 31.0 Equity In Earnings (Losses) of Partnerships 14.8 19.3 36.2 Distributions (68.2) (50.4) (32.2) 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) ------------- ------------- ------------- Change in Venture Capital Investments (131.2) 6.6 (31.5) Beginning Balance 202.9 196.3 227.8 ------------- ------------- ------------- Ending Balance $ 71.7 $ 202.9 $ 196.3 ============= ============= ============= (1) In the fourth quarter of 2005, the company secured an agreement to sell approximately three-quarters of the assets in the Venture Capital segment, and as a result eliminated the segment effective January 1, 2006.
20 THE PHOENIX COMPANIES, INC. CORPORATE AND OTHER First Quarter 2007 (unaudited) ($ in millions)
YTD March December 31, --------------------------- ------------------------------------------------------- 2007 2006 2006 2005 2004 2003 ------------- ------------- ------------- ------------- ------------- ------------- OPERATING INCOME Corporate Investment Income $ 1.5 $ 0.2 $ 4.6 $ (0.8) $ 0.4 $ 4.3 Interest Expense on Indebtedness (9.5) (12.4) (49.2) (46.6) (40.8) (39.6) Corporate Expenses (2.9) (5.5) (17.3) (24.6) (18.9) (11.0) Other 2.9 0.3 1.6 2.4 0.2 (1.5) ------------- ------------- ------------- ------------- ------------- ------------- Operating Loss, before income taxes (8.0) (17.4) (60.3) (69.6) (59.1) (47.8) Applicable Income Tax Benefit (3.2) (6.1) (20.6) (26.3) (22.9) (18.8) ------------- ------------- ------------- ------------- ------------- ------------- Operating Loss $ (4.8) $ (11.3) $ (39.7) $ (43.3) $ (36.2) $ (29.0) ============= ============= ============= ============= ============= =============
21 THE PHOENIX COMPANIES, INC. CORPORATE AND OTHER First Quarter 2007 (unaudited) ($ in millions) Quarters Ended
2006 2007 --------------------------------------------------------------- ------------- March June September December March ------------- ------------- ------------- ------------- ------------- OPERATING INCOME Corporate Investment Income $ 0.2 $ 0.8 $ 2.2 $ 1.4 $ 1.5 Interest Expense on Indebtedness (12.4) (12.3) (12.1) (12.4) (9.5) Corporate Expenses (5.5) (3.2) (4.4) (4.2) (2.9) Other 0.3 0.8 0.5 2.9 ------------- ------------- ------------- ------------- ------------- Operating Loss, before income taxes (17.4) (13.9) (14.3) (14.7) (8.0) Applicable Income Tax Benefit (6.1) (4.0) (5.6) (4.9) (3.2) ------------- ------------- ------------- ------------- ------------- Operating Loss $ (11.3) $ (9.9) $ (8.7) $ (9.8) $ (4.8) ============= ============= ============= ============= =============
22 THE PHOENIX COMPANIES, INC. CONSOLIDATED STATEMENT OF INCOME - GAAP FORMAT (1) First Quarter 2007 (unaudited) ($ in millions)
YTD March December 31, --------------------------- ------------------------------------------------------- 2007 2006 2006 2005 2004 2003 ------------- ------------- ------------- ------------- ------------- ------------- REVENUES Premiums $ 194.7 $ 207.5 $ 839.7 $ 928.7 $ 990.6 $ 1,042.2 Insurance and Investment Product Fees 156.9 139.1 577.1 514.7 534.9 500.9 Broker-dealer Commission and Distribution Fee Revenues 9.3 7.3 32.5 28.7 56.9 81.5 Net Investment Income 278.0 251.2 1,052.2 1,102.6 1,075.7 1,107.4 Unrealized Gain on Trading Equity Securities 85.9 Net Realized Investment Gains (Losses) 24.5 33.2 76.5 34.2 (0.8) (98.5) ------------- ------------- ------------- ------------- ------------- ------------- Total Revenues 663.4 638.3 2,578.0 2,608.9 2,743.2 2,633.5 ------------- ------------- ------------- ------------- ------------- ------------- BENEFITS AND EXPENSES Policy Benefits and Increase in Policy Liabilities 317.3 333.9 1,331.5 1,376.7 1,422.2 1,454.0 Policyholder Dividends 103.8 106.8 399.1 364.4 404.7 418.8 Policy Acquisition Cost Amortization 43.5 30.0 148.7 132.1 110.2 94.1 Intangible Asset Impairments 32.5 32.5 10.6 Intangible Asset Amortization 7.6 8.0 32.0 33.8 33.8 33.2 Interest Expense on Indebtedness 9.5 12.4 49.2 46.6 40.8 39.6 Interest Expense on Non-recourse Collateralized Obligations 4.0 4.4 18.7 29.4 33.6 48.9 Other Operating Expenses 105.5 111.4 422.5 477.9 560.7 565.1 ------------- ------------- ------------- ------------- ------------- ------------- Total Expenses 591.2 639.4 2,434.2 2,471.5 2,606.0 2,653.7 ------------- ------------- ------------- ------------- ------------- ------------- Income (Loss) from Continuing Operations before Income Taxes, Minority Interest and equity in undistributed earnings (losses) of affiliates 72.2 (1.1) 143.8 137.4 137.2 (20.2) Applicable Income Taxes (Benefit) 21.2 (2.8) 43.3 27.7 40.5 (18.3) ------------- ------------- ------------- ------------- ------------- ------------- Income (Loss) from Continuing Operations before Minority Interest and equity in undistributed earnings (losses) of affiliates 51.0 1.7 100.5 109.7 96.7 (1.9) Minority Interest in Net Income of Subsidiaries (0.4) (0.6) (0.6) (0.4) Equity in undistributed earnings (losses) of affiliates (10.4) (1.8) ------------- ------------- ------------- ------------- ------------- ------------- Income (Loss) from Continuing Operations 50.6 1.7 99.9 109.1 86.3 (4.1) Discontinued Operations Income (Loss) from Discontinued Operations (0.7) 0.1 (2.1) ------------- ------------- ------------- ------------- ------------- ------------- Net Income (Loss) $ 50.6 $ 1.7 $ 99.9 $ 108.4 $ 86.4 $ (6.2) ============= ============= ============= ============= ============= =============
(1) Certain reclassifications have been made to prior periods to conform with the current presentation. 23 THE PHOENIX COMPANIES, INC. CONSOLIDATED STATEMENT OF INCOME - GAAP FORMAT (1) First Quarter 2007 (unaudited) ($ in millions) Quarters Ended
2006 2007 --------------------------------------------------------------- ------------- March June September December March ------------- ------------- ------------- ------------- ------------- REVENUES Premiums $ 207.5 $ 207.7 $ 212.1 $ 212.4 $ 194.7 Insurance and Investment Product Fees 139.1 139.4 150.7 147.9 156.9 Broker-dealer Commission and Distribution Fee Revenues 7.3 7.9 8.5 8.8 9.3 Net Investment Income 251.2 256.3 261.8 282.9 278.0 Net Realized Investment Gains (Losses) 33.2 17.4 3.1 22.8 24.5 ------------- ------------- ------------- ------------- ------------- Total Revenues 638.3 628.7 636.2 674.8 663.4 ------------- ------------- ------------- ------------- ------------- BENEFITS AND EXPENSES Policy Benefits and Increase in Policy Liabilities 333.9 333.3 333.3 331.0 317.3 Policyholder Dividends 106.8 95.1 88.0 109.2 103.8 Policy Acquisition Cost Amortization 30.0 43.5 44.7 30.5 43.5 Intangible Asset Impairments 32.5 Intangible Asset Amortization 8.0 8.5 7.7 7.8 7.6 Interest Expense on Indebtedness 12.4 12.3 12.1 12.4 9.5 Interest Expense on Non-recourse Collateralized Obligations 4.4 5.1 4.8 4.4 4.0 Other Operating Expenses 111.4 103.1 100.1 107.9 105.5 ------------- ------------- ------------- ------------- ------------- Total Expenses 639.4 600.9 590.7 603.2 591.2 ------------- ------------- ------------- ------------- ------------- Income (Loss) from Continuing Operations before Income Taxes, Minority Interest and equity in undistributed earnings (losses) of affiliates (1.1) 27.8 45.5 71.6 72.2 Applicable Income Taxes (Benefit) (2.8) 8.0 11.0 27.1 21.2 ------------- ------------- ------------- ------------- ------------- Income from Continuing Operations before Minority Interest and equity in undistributed earnings of affiliates 1.7 19.8 34.5 44.5 51.0 Minority Interest in Net Income of Subsidiaries (0.2) (0.2) (0.2) (0.4) ------------- ------------- ------------- ------------- ------------- Net Income $ 1.7 $ 19.6 $ 34.3 $ 44.3 $ 50.6 ============= ============= ============= ============= =============
(1) Certain reclassifications have been made to prior periods to conform with the current presentation. 24 THE PHOENIX COMPANIES, INC. CONSOLIDATING FIRST QUARTER 2007 INCOME STATEMENT First Quarter 2007 (unaudited) ($ in millions) Year-to-Date March 31, 2007
Operating Income Exclusions from Operating Income --------------------------------------- -------------------------------------- Life Corporate Realized Intra- & Asset & Investment Segment Consolidated Annuity Management Other Gains/Losses Other Eliminations ------------ ------------ ------------ ------------- ------------ ------------ ------------ REVENUES Premiums $ 194.7 $ 194.7 Insurance and Investment Product Fees 156.9 112.8 $ 44.3 $ (0.2) Broker-dealer commission and distribution fee revenues 9.3 9.3 Net Investment Income 278.0 265.0 0.4 $ 9.1 $ 0.5 3.0 Net Realized Investment Gains 24.5 $ 24.5 ------------ ------------ ------------ ------------- ------------ ------------ ------------ Total Revenues 663.4 572.5 54.0 9.1 24.5 0.5 2.8 ------------ ------------ ------------ ------------- ------------ ------------ ------------ BENEFITS AND EXPENSES Policy Benefits and Increase in Policy Liabilities 317.3 316.3 1.0 Policyholder Dividends 103.8 97.2 6.6 Policy Acquisition Cost Amortization 43.5 43.8 (0.4) 0.1 Intangible Asset Impairments 7.6 7.6 Intangible Asset Amortization Interest Expense on Indebtedness 9.5 9.5 Interest Expense on Non-recourse Collateralized Obligations 4.0 4.0 Other Operating Expenses 105.5 52.3 45.8 2.6 2.0 2.8 ------------ ------------ ------------ ------------- ------------ ------------ ------------ Total Expenses 591.2 509.6 53.4 17.1 8.2 0.1 2.8 ------------ ------------ ------------ ------------- ------------ ------------ ------------ Income (Loss) from Continuing Operations before Income Taxes Minority Interest and equity in undistributed earnings (losses) of affiliates 72.2 62.9 0.6 (8.0) 16.3 0.4 0.0 Applicable Income Taxes (Benefit) 21.2 19.6 0.9 (3.2) 3.9 ------------ ------------ ------------ ------------- ------------ ------------ ------------ Income (Loss) from Continuing Operations before Minority Interest and equity undistributed earnings (losses) of affiliates 51.0 43.3 (0.3) (4.8) 12.4 0.4 0.0 ------------ ------------ ------------ ------------- ------------ ------------ ------------ Minority Interest in Net Income of Subsidiaries (0.4) (0.4) ------------ ------------ ------------ ------------- ------------ ------------ ------------ Income (Loss) from Continuing Operations $ 50.6 $ 43.3 $ (0.3) $ (4.8) $ 12.4 $ 0.0 $ 0.0 ============ ============ ============ ============= ============ ============ ============
25 THE PHOENIX COMPANIES, INC. CONDENSED CONSOLIDATED BALANCE SHEET -- PRELIMINARY First Quarter 2007 (unaudited) ($ in millions, except par value)
March December 31, ------------- ---------------------------------------------------------------- 2007 2006 2005 2004 2003 ------------- ------------- ------------- ------------- ------------- ASSETS: Available-for-Sale Debt Securities, at fair value $ 12,667.1 $ 12,696.8 $ 13,404.6 $ 13,476.3 $ 13,273.0 Available-for-Sale Equity Securities, at fair value 191.7 187.1 181.8 304.3 312.0 Trading Equity Securities, at fair value 87.3 Mortgage Loans, at unpaid principal balances 18.5 71.9 128.6 207.9 284.1 Policy Loans, at unpaid principal balances 2,344.6 2,322.0 2,245.0 2,196.7 2,241.4 Venture Capital Partnerships, at equity in net assets 141.2 116.8 145.1 255.3 234.9 Affiliate Equity and Debt Securities, at cost plus equity in undistributed earnings 47.5 Other Investments 339.4 308.3 310.6 371.8 402.0 ------------- ------------- ------------- ------------- ------------- 15,702.5 15,702.9 16,415.7 16,899.6 16,794.9 Available-for-Sale Investments Pledged as Collateral, at fair value 252.2 267.8 304.4 1,278.8 1,350.0 ------------- ------------- ------------- ------------- ------------- Total Investments 15,954.7 15,970.7 16,720.1 18,178.4 18,144.9 Cash and Cash Equivalents 345.7 404.9 301.5 435.0 447.9 Deferred Policy Acquisition Costs 1,781.8 1,752.7 1,556.0 1,429.9 1,367.7 Goodwill and Other Intangible Assets 701.2 708.6 763.5 735.6 755.0 Other Assets 728.5 733.9 652.9 633.4 760.5 Separate Account Assets 9,679.6 9,458.6 7,722.2 6,950.3 6,083.2 ------------- ------------- ------------- ------------- ------------- Total Assets $ 29,191.5 $ 29,029.4 $ 27,716.2 $ 28,362.6 $ 27,559.2 ============= ============= ============= ============= ============= LIABILITIES: Policy Liabilities and Accruals $ 13,598.2 $ 13,533.4 $ 13,246.2 $ 13,132.4 $ 13,088.6 Policyholder Deposit Funds 2,127.2 2,228.4 3,060.7 3,492.4 3,642.7 Indebtedness 627.7 685.4 751.9 690.8 639.0 Stock Purchase Contracts 131.9 128.8 Other Liabilities 535.2 543.5 538.2 587.2 557.1 Non-recourse Collateralized Debt Obligation Liabilities 334.8 344.0 389.9 1,355.2 1,472.0 Separate Account Liabilities 9,679.6 9,458.6 7,722.2 6,950.3 6,083.2 ------------- ------------- ------------- ------------- ------------- Total Liabilities and minority interest 26,902.7 26,793.3 25,709.1 26,340.2 25,611.4 ------------- ------------- ------------- ------------- ------------- STOCKHOLDERS' EQUITY: Common stock, $.01 par value, 1.0 billion shares authorized; 114,059,131 shares outstanding (March 31, 2007) 1.3 1.3 1.1 1.0 1.0 Additional paid in capital 2,601.8 2,602.8 2,440.3 2,435.2 2,431.4 Deferred Compensation on Restricted Stock Units 4.5 (2.6) (2.7) (3.6) (3.6) Accumulated Earnings (Deficit) (64.6) (111.3) (193.1) (285.7) (355.3) Treasury stock, at cost: 11,313,564 shares (March 31, 2007) (179.5) (179.5) (179.5) (182.6) (189.4) Accumulated Other Comprehensive Income (Loss) (74.7) (74.6) (59.0) 58.1 63.7 ------------- ------------- ------------- ------------- ------------- Total Stockholders' Equity 2,288.8 2,236.1 2,007.1 2,022.4 1,947.8 ------------- ------------- ------------- ------------- ------------- Total Liabilities, Minority Interest and Stockholders' Equity $ 29,191.5 $ 29,029.4 $ 27,716.2 $ 28,362.6 $ 27,559.2 ============= ============= ============= ============= =============
26 THE PHOENIX COMPANIES, INC. GENERAL ACCOUNT INVESTMENT PORTFOLIO SUMMARY (1) First Quarter 2007 (unaudited) ($ millions)
Total Debt Securities Public Debt Securities Private Debt Securities --------------------------- --------------------------- --------------------------- 3/31/07 12/31/06 3/31/07 12/31/06 3/31/07 12/31/06 ------------- ------------- ------------- ------------- ------------- ------------- DEBT SECURITIES BY CREDIT QUALITY (CARRYING VALUE) AAA/AA/A $ 7,960.0 $ 7,897.2 $ 6,320.9 $ 6,214.1 $ 1,639.1 $ 1,683.1 BBB 3,750.1 3,743.7 2,367.9 2,345.4 1,382.2 1,398.3 ------------- ------------- ------------- ------------- ------------- ------------- Total Investment Grade 11,710.1 11,640.9 8,688.8 8,559.5 3,021.3 3,081.4 ------------- ------------- ------------- ------------- ------------- ------------- BB 667.1 765.7 576.2 665.7 90.9 100.0 B 226.9 221.4 178.7 175.2 48.2 46.2 CCC and Lower 52.9 53.2 34.6 38.7 18.3 14.5 In or Near Default 10.1 15.6 9.1 10.1 1.0 5.5 ------------- ------------- ------------- ------------- ------------- ------------- Total Debt Securities $ 12,667.1 $ 12,696.8 $ 9,487.4 $ 9,449.2 $ 3,179.7 $ 3,247.6 ============= ============= ============= ============= ============= ============= % Below Investment Grade 7.6% 8.3% 8.4% 9.4% 5.0% 5.1% ------------------------------------------------------------------------------------------------------------------------------------ UNREALIZED GAINS AND LOSSES ON DEBT AND EQUITY SECURITIES As of 3/31/07 Total Outside Closed Block Closed Block --------------------------- --------------------------- --------------------------- Gains Losses Gains Losses Gains Losses ------------- ------------- ------------- ------------- ------------- ------------- Total Debt Securities $ 286.2 $ (138.3) $ 83.1 $ (69.4) $ 203.1 $ (68.9) Equity Securities 34.1 (1.0) 7.7 (0.3) 26.4 (0.7) ------------- ------------- ------------- ------------- ------------- ------------- Total Unrealized Gains (Losses) 320.3 (139.3) 90.8 (69.7) 229.5 (69.6) ------------- ------------- ------------- ------------- ------------- ------------- Applicable PDO 229.5 (69.6) 229.5 (69.6) Applicable DAC (Credit) 28.9 (34.0) 28.9 (34.0) Applicable Deferred Income Tax (Benefit) 21.7 (12.5) 21.7 (12.5) ------------- ------------- ------------- ------------- ------------- ------------- Total Offsets to Net Unrealized Gains (Losses) 280.1 (116.1) 50.6 (46.5) 229.5 (69.6) ------------- ------------- ------------- ------------- ------------- ------------- Net Unrealized Gains and Losses $ 40.2 $ (23.2) $ 40.2 $ (23.2) $ 0.0 $ 0.0 ============= ============= ============= ============= ============= ============= Net Unrealized Gains $ 17.0 $ 17.0 $ 0.0 ============= ============= =============
(1) Excludes debt and equity securities pledged as collateral. 27 THE PHOENIX COMPANIES, INC. GENERAL ACCOUNT GAAP NET INVESTMENT INCOME YIELDS (1) First Quarter 2007 (unaudited) ($ in millions) Quarters ended
YTD March December 31, --------------------------- ------------------------------------------------------- 2007 2006 2006 2005 2004 2003 ------------- ------------- ------------- ------------- ------------- ------------- GAAP NET INVESTMENT INCOME Debt Securities $ 194.0 $ 195.1 $ 800.7 $ 804.6 $ 772.1 $ 765.5 Equity Securities 2.4 0.5 7.0 7.5 4.5 4.6 Mortgages 0.7 0.9 6.2 20.2 22.5 32.6 Policy Loans 44.1 41.1 169.3 165.8 167.1 171.7 Venture Capital 7.8 (2.4) 3.3 23.8 25.5 49.1 Cash & Cash Equivalents 4.9 3.3 16.3 7.6 4.9 7.0 Other Income 4.6 40.0 47.8 48.8 35.0 Other Investments (2) 19.0 10.3 ------------- ------------- ------------- ------------- ------------- ------------- Total Cash and Invested Assets 277.5 248.8 1,042.8 1,077.3 1,045.4 1,065.5 ------------- ------------- ------------- ------------- ------------- ------------- Investment Expenses 3.5 2.1 9.6 8.6 9.8 10.0 ------------- ------------- ------------- ------------- ------------- ------------- Total Net Investment Income $ 274.0 $ 246.7 $ 1,033.2 $ 1,068.7 $ 1,035.6 $ 1,055.5 ============= ============= ============= ============= ============= ============= ANNUALIZED YIELDS Debt Securities 6.3% 6.1% 6.5% 6.2% 5.9% 6.0% Equity Securities 5.2% 1.1% 3.7% 3.0% 1.3% 1.4% Mortgages 6.4% 3.0% 8.1% 15.3% 11.0% 11.2% Policy Loans 7.9% 7.6% 7.6% 7.7% 7.9% 8.0% Venture Capital 27.5% -7.1% 2.7% 12.8% 10.9% 23.0% Cash & Cash Equivalents 5.4% 4.1% 4.7% 5.2% 1.1% 1.3% Other Investments (2) 26.6% 13.6% 13.6% 16.4% 7.5% 10.5% ------------- ------------- ------------- ------------- ------------- ------------- Total Cash and Invested Assets 7.2% 6.2% 6.7% 6.6% 6.1% 6.4% ------------- ------------- ------------- ------------- ------------- ------------- Investment Expenses 0.1% 0.1% 0.1% 0.1% 0.1% 0.1% ------------- ------------- ------------- ------------- ------------- ------------- Total Net Investment Income yields 7.1% 6.1% 6.6% 6.6% 6.1% 6.6% ============= ============= ============= ============= ============= =============
(1) Excludes debt and equity securities pledged as collateral. (2) Includes real estate, affiliates and other invested assets. 28 THE PHOENIX COMPANIES, INC. GENERAL ACCOUNT GAAP NET INVESTMENT INCOME YIELDS (1) First Quarter 2007 (unaudited) ($ in millions) Quarters ended
2006 2007 --------------------------------------------------------------- ------------- March June September December March ------------- ------------- ------------- ------------- ------------- GAAP NET INVESTMENT INCOME Debt Securities $ 195.1 $ 199.0 $ 199.2 $ 207.4 $ 194.0 Equity Securities 0.5 1.3 1.4 3.8 2.4 Mortgages 0.9 2.3 1.6 1.4 0.7 Policy Loans 41.1 41.5 43.7 43.0 44.1 Venture Capital (2.4) 1.4 1.3 3.0 7.8 Cash & Cash Equivalents 3.3 4.5 4.3 4.2 4.9 Other Income 4.6 Other Investments (2) 10.3 3.0 8.1 18.6 19.0 ------------- ------------- ------------- ------------- ------------- Total Cash and Invested Assets 248.8 253.0 259.6 281.4 277.5 ------------- ------------- ------------- ------------- ------------- Investment Expenses 2.1 1.9 2.7 2.9 3.5 ------------- ------------- ------------- ------------- ------------- Total Net Investment Income $ 246.7 $ 251.1 $ 256.9 $ 278.5 $ 274.0 ============= ============= ============= ============= ============= ANNUALIZED YIELDS Debt Securities 6.1% 6.4% 6.5% 6.7% 6.3% Equity Securities 1.1% 2.9% 2.9% 8.1% 5.2% Mortgages 3.0% 9.2% 7.3% 7.3% 6.4% Policy Loans 7.6% 7.5% 7.9% 7.7% 7.9% Venture Capital -7.1% 4.8% 4.3% 10.3% 27.5% Cash & Cash Equivalents 4.1% 5.0% 5.1% 4.9% 5.4% Other Investments (2) 13.6% 3.7% 10.6% 26.9% 26.6% ------------- ------------- ------------- ------------- ------------- Total Cash and Invested Assets 6.2% 6.4% 6.7% 7.2% 7.2% ------------- ------------- ------------- ------------- ------------- Investment Expenses 0.1% 0.0% 0.1% 0.1% 0.1% ------------- ------------- ------------- ------------- ------------- Total Net Investment Income yields 6.1% 6.4% 6.6% 7.2% 7.1% ============= ============= ============= ============= =============
(1) Excludes debt and equity securities pledged as collateral. (2) Includes real estate, affiliates and other invested assets. 29 THE PHOENIX COMPANIES, INC. GENERAL ACCOUNT REALIZED INVESTMENT GAINS AND LOSSES First Quarter 2007 (unaudited) ($ Millions)
YTD March December 31, --------------------------- ------------------------------------------------------- 2007 2006 2006 2005 2004 2003 ------------- ------------- ------------- ------------- ------------- ------------- REALIZED INVESTMENT GAINS AND LOSSES Debt Security Impairments $ (1.0) $ (0.9) $ (7.9) $ (31.2) $ (15.5) $ (76.1) Equity Security Impairments (2.1) (1.5) (4.3) Mortgage Loan Impairments (0.8) (12.6) (4.1) Affiliated Equity Securities (96.9) Venture Capital Partnerships Impairments (4.6) Real Estate Impairments (6.6) Debt and Equity Securities Pledged as Collateral Impairments (1.0) (1.2) (16.6) (8.3) Other Invested Asset Impairments (3.3) (9.9) ------------- ------------- ------------- ------------- ------------- ------------- Total Impairment Losses (1.0) (0.9) (8.9) (35.3) (49.5) (210.8) ------------- ------------- ------------- ------------- ------------- ------------- Debt Security Net Transaction Gains (Losses) 3.4 16.1 42.0 (18.0) 28.4 64.7 Equity Security Net Transaction Gains (Losses) 1.3 3.5 21.9 2.9 14.6 49.2 Venture Capital Net Investment Gains (Losses) 2.4 (13.9) (9.7) Mortgage Loan Net Transaction Gains (Losses) 1.4 3.2 3.2 0.2 (1.3) Affiliate Equity Security Transaction GL 13.7 10.0 10.4 3.7 Real Estate Net Transaction Gains (Losses) 1.5 0.1 (0.6) (0.8) (0.2) Settlement of HRH Stock Purchase Contracts 86.3 Other Invested Asset Net Transactions Gains (Losses) 4.0 2.2 5.5 6.6 6.3 9.6 Debt and Equity Securities Pledged as Collateral 0.2 (1.0) 2.5 ------------- ------------- ------------- ------------- ------------- ------------- Total Net Transactions Gains 25.5 34.1 85.4 69.5 48.7 112.3 ------------- ------------- ------------- ------------- ------------- ------------- Net Realized Investment Gains (Losses) 24.5 33.1 76.5 34.2 (0.8) (98.5) ------------- ------------- ============= ============= ============= ============= Closed Block Applicable PDO (Reduction) 6.6 19.2 46.0 (12.4) 3.7 (5.9) Applicable Deferred Acquisition Costs (Credit) (0.4) (2.6) (3.5) 17.6 (0.4) (4.1) Applicable Deferred Income Tax (Credit) 3.9 6.2 11.7 9.2 3.1 (35.6) ------------- ------------- ------------- ------------- ------------- ------------- Net Realized Investment Gains (Losses) Included in Net Income $ 14.4 $ 10.4 $ 22.3 $ 19.8 $ (7.2) $ (52.9) ============= ============= ============= ============= ============= =============
30 THE PHOENIX COMPANIES, INC. GENERAL ACCOUNT REALIZED INVESTMENT GAINS AND LOSSES First Quarter 2007 (unaudited) ($ Millions) Quarters ended
2006 2007 --------------------------------------------------------------- ------------- March June September December March ------------- ------------- ------------- ------------- ------------- REALIZED INVESTMENT GAINS AND LOSSES Debt Security Impairments $ (0.9) $ (2.4) $ (1.6) $ (3.0) $ (1.0) Equity Security Impairments Mortgage Loan Impairments Affiliated Equity Securities Debt and Equity Securities Pledged as Collateral Impairments Other Invested Asset Impairments ------------- ------------- ------------- ------------- ------------- Total Impairment Losses (0.9) (2.4) (1.6) (3.0) (1.0) ------------- ------------- ------------- ------------- ------------- Debt Security Net Transaction Gains (Losses) 16.1 15.0 2.8 8.1 3.4 Equity Security Net Transaction Gains (Losses) 3.5 1.4 17.0 1.3 Venture Capital Net Investment Gains (Losses) 3.8 0.4 (1.8) Mortgage Loan Net Transaction Gains (Losses) 3.2 1.4 Affiliate Equity Security Transactions Gains (Losses) 10.0 0.4 13.7 Real Estate Net Transaction Gains (Losses) 0.1 0.1 (0.2) 1.5 Settlement of HRH Stock Purchase Contracts Other Invested Asset Net Transactions Gains (Losses) 2.2 0.4 0.2 2.7 4.0 Debt and Equity Securities Pledged as Collateral (1.0) 0.1 0.1 (0.2) 0.2 ------------- ------------- ------------- ------------- ------------- Total Net Transactions Gains 34.1 19.8 4.7 25.8 25.5 ------------- ------------- ------------- ------------- ------------- Net Realized Investment Gains (Losses) 33.2 17.4 3.1 22.8 24.5 ============= ============= ============= ============= ============= Closed Block Applicable PDO (Reduction) 19.2 13.4 6.0 7.4 6.6 Applicable Deferred Acquisition Costs (Credit) (2.6) (0.2) (1.1) 0.4 (0.4) Applicable Deferred Income Tax (Credit) 6.2 1.2 (0.7) 5.0 3.9 ------------- ------------- ------------- ------------- ------------- Net Realized Investment Gains (Losses) Included in Net Income $ 10.4 $ 3.0 $ (1.1) $ 10.0 $ 14.4 ============= ============= ============= ============= =============
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