-----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, Ru0e5y6w0qlG132PDK05BPRvHTIiaYETgM2YvLUVuXu4kV6T4V2l+VgsFN6YJGCd 6dthwB4pnbnwLNs2d42GKA== 0000949377-07-000544.txt : 20071105 0000949377-07-000544.hdr.sgml : 20071105 20071105171025 ACCESSION NUMBER: 0000949377-07-000544 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20071031 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20071105 DATE AS OF CHANGE: 20071105 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: 071214841 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 pnx83721-8k.txt PHOENIX FINANCIAL SUPPLEMENT UNITED STATES 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): October 31, 2007 The Phoenix Companies, Inc. - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter)
Delaware 001-16517 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 October 31, 2007, The Phoenix Companies, Inc. made available on its website its Financial Supplement for the quarter ended September 30, 2007. This is furnished as Exhibit 99.1 hereto, and is incorporated herein by reference. ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS. (a) Not applicable (b) Not applicable (c) Not applicable (d) Exhibits The following exhibit is furnished herewith: 99.1 The Phoenix Companies, Inc. Financial Supplement for the quarter ended September 30, 2007. 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: November 5, 2007 By: /s/ Michael Haylon ------------------------------------------ Name: Michael E. Haylon Title: Senior Executive Vice President, Chief Financial Officer and Chief Accounting Officer EX-99.1 2 pnx83721ex99-1.txt FINANCIAL SUPPLEMENT EXHIBIT 99.1 [LOGO] PHOENIX FINANCIAL SUPPLEMENT The Phoenix Companies, Inc. September 30, 2007 [graphic omitted]
THE PHOENIX COMPANIES, INC. FINANCIAL SUPPLEMENT WALL STREET COVERAGE TRANSFER AGENT AND REGISTRAR FIRM ANALYST For information or assistance regarding your account, Citigroup Keith Walsh please contact our transfer agent and registrar: Credit Suisse First Boston (CSFB) Tom Gallagher The Phoenix Companies, Inc. C/O The Bank of New York, JP Morgan Jimmy Bhullar Shareholder Relations, Keefe Bruyette & Woods, Inc. Jukka Lipponen P.O. Box 11258, New York, NY 10286-1258 Langen McAlenney Robert Glasspiegel Toll-free: 1-800-490-4258 TTY 1-888-269-5221 Lehman Brothers Eric Berg Fax: 1-212-815-2777, e-mail: pnxshareholders@bankofny.com Merrill Lynch Edward A. Spehar Web: www.stockbny.com UBS Andrew Kligerman Raymond James & Associates Steven Schwartz 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 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 managing our business, we analyze our performance on the basis of "operating income" which does not equate to net income as determined in accordance with GAAP. Rather, it is the measure of profit or loss used by our management to evaluate performance, allocate resources and manage our operations. We believe that operating income, and measures that are derived from or incorporate operating income, are appropriate measures that are useful to investors as well, because they identify the earnings of, and underlying profitability factors affecting, the ongoing operations of our business. Operating income is calculated by excluding realized investment gains (losses) and certain other items because we do not consider them to be related to our operating performance. The size and timing of realized investment gains (losses) are often subject to our discretion. Certain other items are also excluded from operating income if, in our opinion, they are not indicative of overall operating trends. The criteria used to identify an item that will be excluded from operating income include: whether the item is infrequent and is material to our income; or whether it results from a change in regulatory requirements, or relates to other unusual circumstances. Items excluded from operating income may vary from period to period. Because these items are excluded based on our discretion, inconsistencies in the application of our selection criteria may exist. Some of these items may be significant components of net income in accordance with GAAP. Accordingly, operating income, and other measures that are derived from or incorporate operating income, are not substitutes for net income, or measures that are derived from or incorporate net income, determined in accordance with GAAP and may be different from similarly titled measures of other companies. Within our Asset Management segment, we also consider earnings before interest, taxes, depreciation and amortization ("EBITDA"). Our management believes EBITDA provides additional perspective on the operating efficiency and profitability of the Asset Management segment. EBITDA represents pre-tax operating income before depreciation and amortization of goodwill and intangibles. Total operating return on equity ("ROE") is an internal performance measure used in the management of our operations, including our compensation plans and planning processes. Our management believes that this measure provides investors with a useful metric to assess our performance and the effectiveness of our use of historic capital. ROE is calculated by dividing (i) total operating income, by (ii) average equity, excluding accumulated OCI, FIN 46-R and discontinued operations. Total operating return on tangible equity ("return on tangible equity") is also an internal performance measure used in the evaluation of our operations. Our management believes that this measure provides investors with a useful metric to assess our performance and the effectiveness of our use of current capital. Return on tangible equity is calculated by dividing (i) total operating income, by (ii) average equity, excluding accumulated OCI, FIN 46-R, discontinued operations and the carrying value of goodwill and intangible assets. THE PHOENIX COMPANIES, INC. FINANCIAL SUPPLEMENT SEPTEMBER 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 Third 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 Third Quarter 2007 (unaudited) (amount in millions, except per share data)
For the Period Ended: December 31, YTD September ---------------------------------------------------------- 2007 2006 2005 2004 2003 ------------- ------------- ------------- ------------- ------------- BALANCE SHEET INFORMATION General Account Invested Assets $ 15,663.7 $ 16,107.8 $ 16,717.2 $ 17,334.6 $ 17,242.8 Separate Account Assets 10,388.3 9,458.6 7,722.2 6,950.3 6,083.2 Total Assets 29,645.4 29,029.4 27,716.2 28,362.6 27,559.2 Indebtedness 627.7 685.4 751.9 690.8 639.0 Total Stockholders' Equity 2,306.4 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 $ 2,473.0 $ 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) $ 2,399.8 $ 2,251.8 $ 2,028.6 Total Operating Return on Equity (1) 5.93% 3.92% 5.01% Average Tangible Common Equity (2) $ 1,701.4 $ 1,529.2 $ 1,291.9 Total Operating Return on Average Tangible Equity (2) 8.36% 5.77% 7.13% Debt to Total Capitalization 21.4% 23.5% 27.3% 25.5% 24.7% Book Value Per Share $ 20.19 $ 19.67 $ 21.10 $ 21.32 $ 20.62 Book Value Per Share, excluding SFAS 115 and other accumulated OCI $ 21.19 $ 20.33 $ 21.72 $ 20.70 $ 19.96 Book Value Per Share, excluding SFAS 115, other accumulated OCI and FIN 46-R $ 21.65 $ 20.80 $ 22.28 $ 21.27 $ 20.39 Period-end Common Shares Outstanding 114.2 113.7 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 $ 912.9 $ 932.4 $ 885.5 $ 814.6 $ 762.9 Asset Valuation Reserve (AVR) 210.1 187.9 210.8 213.6 198.6 ------------- ------------- ------------- ------------- ------------- Capital, Surplus, Surplus Notes and AVR $ 1,123.0 $ 1,120.3 $ 1,096.3 $ 1,028.2 $ 961.5 ============= ============= ============= ============= ============= Policyholder Dividend Liability $ 358.4 $ 348.9 $ 356.1 $ 403.3 $ 408.5 Interest Maintenance Reserve $ (48.4) $ (44.3) $ (23.1) $ (31.3) $ (30.2) Statutory Gain From Operations $ 86.8 $ 131.6 $ 106.2 $ 35.1 $ 69.7 Statutory Net Income $ 80.9 $ 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. September 2007 amounts are preliminary. 1 THE PHOENIX COMPANIES, INC. FINANCIAL HIGHLIGHTS Third Quarter 2007 (unaudited) (amount in millions, except per share data)
YTD September December 31, ---------------------------- ---------------------------------------------------------- 2007 2006 2006 2005 2004 2003 ------------- ------------- ------------- ------------- ------------- ------------- INCOME STATEMENT SUMMARY OPERATING INCOME Life Insurance $ 146.1 $ 125.9 $ 209.7 $ 180.5 $ 130.1 $ 100.4 Annuities 17.2 12.2 4.0 12.0 12.7 (1.0) ------------- ------------- ------------- ------------- ------------- ------------- Life and Annuity Segment 163.3 138.1 213.7 192.5 142.8 99.4 Asset Management Segment 5.5 (26.7) (28.6) (10.5) 0.1 (8.7) Venture Capital Segment (1) 14.8 19.3 36.2 Corporate and Other (35.0) (45.6) (60.3) (69.6) (59.1) (47.8) ------------- ------------- ------------- ------------- ------------- ------------- TOTAL OPERATING INCOME (LOSS), BEFORE INCOME TAXES 133.8 65.8 124.8 127.2 103.1 79.1 Applicable Income Taxes (Benefit) 27.1 13.9 36.6 25.5 22.5 21.8 ------------- ------------- ------------- ------------- ------------- ------------- TOTAL OPERATING INCOME (LOSS) 106.7 51.9 88.2 101.7 80.6 57.3 Net Realized Investment Gains 12.1 12.3 21.8 25.5 5.7 3.2 Realized Gains (Losses) - Investments Pledged as Collateral Consolidated Under FIN 46-R 0.6 (0.8) (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 (7.8) (9.1) (12.4) (21.9) (8.5) Other income 1.3 ------------- ------------- ------------- ------------- ------------- ------------- INCOME (LOSS) FROM CONTINUING OPERATIONS 119.4 55.6 99.9 109.1 86.3 (4.1) Income (Loss) from Discontinued Operations (0.7) 0.1 (2.1) ------------- ------------- ------------- ------------- ------------- ------------- NET INCOME (LOSS) $ 119.4 $ 55.6 $ 99.9 $ 108.4 $ 86.4 $ (6.2) ============= ============= ============= ============= ============= ============= - ------------------------------------------------------------------------------------------------------------------------------------ EARNINGS PER SHARE BASIC Weighted-Average Shares Outstanding 114.0 110.0 110.9 95.0 94.7 94.2 ------------- ------------- ------------- ------------- ------------- ------------- Total Operating Income (Loss) Per Share $ 0.94 $ 0.47 $ 0.79 $ 1.07 $ 0.85 $ 0.61 Net Income (Loss) Per Share $ 1.05 $ 0.51 $ 0.90 $ 1.14 $ 0.91 $ (0.07) DILUTED Weighted-Average Shares Outstanding and Dilutive Potential Common Shares (2) 115.7 113.0 113.1 102.4 100.8 96.6 ------------- ------------- ------------- ------------- ------------- ------------- Total Operating Income (Loss) Per Share $ 0.92 $ 0.46 $ 0.78 $ 0.99 $ 0.80 $ 0.59 Net Income (Loss) Per Share $ 1.03 $ 0.49 $ 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 Third Quarter 2007 (unaudited) (amount in millions, except per share data) Quarters ended
2006 2007 ------------------------------------------------------- ----------------------------------------- March June September December March June September ------------- ------------- ------------- ------------- ------------- ------------- ------------- OPERATING INCOME Life Insurance $ 32.6 $ 42.1 $ 51.2 $ 83.8 $ 56.0 $ 45.5 $ 44.6 Annuities 5.7 0.5 6.0 (8.2) 6.9 5.2 5.1 ------------- ------------- ------------- ------------- ------------- ------------- ------------- Life and Annuity Segment 38.3 42.6 57.2 75.6 62.9 50.7 49.7 Asset Management Segment (34.6) 1.3 6.6 (1.9) 0.6 2.3 2.6 Corporate and Other (17.4) (13.9) (14.3) (14.7) (8.0) (15.6) (11.4) ------------- ------------- ------------- ------------- ------------- ------------- ------------- TOTAL OPERATING INCOME (LOSS), BEFORE INCOME TAXES (13.7) 30.0 49.5 59.0 55.5 37.4 40.9 Applicable Income Taxes (Benefit) (7.5) 9.6 11.8 22.7 17.3 3.1 6.7 ------------- ------------- ------------- ------------- ------------- ------------- ------------- TOTAL OPERATING INCOME (LOSS) (6.2) 20.4 37.7 36.3 38.2 34.3 34.2 Net Realized Investment Gains (Losses) 11.4 2.9 (2.0) 9.5 12.2 (1.0) 0.9 Realized Gains (Losses) - Investments Pledged as Collateral Consolidated Under FIN 46-R (1.0) 0.1 0.1 (0.2) 0.2 (0.1) 0.5 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 $ 33.2 $ 35.6 ============= ============= ============= ============= ============= ============= ============= - ------------------------------------------------------------------------------------------------------------------------------------ EARNINGS PER SHARE BASIC Weighted-Average Shares Outstanding 103.6 112.7 113.6 113.7 113.8 114.1 114.2 ------------- ------------- ------------- ------------- ------------- ------------- ------------- Total Operating Income (Loss) Per Share $ (0.06) $ 0.18 $ 0.33 $ 0.32 $ 0.34 $ 0.30 $ 0.30 Net Income Per Share $ 0.02 $ 0.17 $ 0.30 $ 0.39 $ 0.44 $ 0.29 $ 0.31 DILUTED Weighted-Average Shares Outstanding and Dilutive Potential Common Shares 106.2 115.9 116.0 115.4 115.1 115.6 115.8 ------------- ------------- ------------- ------------- ------------- ------------- ------------- Total Operating Income (Loss) Per Share $ (0.06) $ 0.18 $ 0.32 $ 0.31 $ 0.33 $ 0.30 $ 0.30 Net Income Per Share $ 0.02 $ 0.17 $ 0.30 $ 0.38 $ 0.44 $ 0.29 $ 0.31 =============
3 THE PHOENIX COMPANIES, INC. LIFE AND ANNUITY EARNINGS SUMMARY Third Quarter 2007 (unaudited) ($ in millions)
YTD September December 31, ---------------------------- ---------------------------------------------------------- 2007 2006 2006 2005 2004 2003 ------------- ------------- ------------- ------------- ------------- ------------- OPERATING INCOME Variable Universal Life $ 31.7 $ 28.7 $ 52.7 $ 69.6 $ 35.7 $ 35.0 Universal Life (1) 45.5 36.4 53.3 47.9 34.4 21.7 Other Life and Annuity (2) 1.0 1.9 2.7 1.5 1.6 0.1 ------------- ------------- ------------- ------------- ------------- ------------- TOTAL CORE LIFE INSURANCE 78.2 67.0 108.7 119.0 71.7 56.8 ------------- ------------- ------------- ------------- ------------- ------------- Traditional Life, excluding Closed Block 17.7 6.7 31.2 (11.7) (18.3) (36.5) Traditional Life, Closed Block 50.2 52.2 69.8 73.2 76.7 80.1 ------------- ------------- ------------- ------------- ------------- ------------- TOTAL TRADITIONAL LIFE 67.9 58.9 101.0 61.5 58.4 43.6 ------------- ------------- ------------- ------------- ------------- ------------- TOTAL, LIFE INSURANCE 146.1 125.9 209.7 180.5 130.1 100.4 Annuities 17.2 12.2 4.0 12.0 12.7 (1.0) ------------- ------------- ------------- ------------- ------------- ------------- OPERATING INCOME, BEFORE INCOME TAXES 163.3 138.1 213.7 192.5 142.8 99.4 Allocated Income Taxes (3) 47.9 40.2 67.9 51.3 36.4 31.1 ------------- ------------- ------------- ------------- ------------- ------------- OPERATING INCOME 115.4 97.9 145.8 141.2 106.4 68.3 Net Realized Investment Gains (Losses) 3.5 (1.2) (1.0) 22.7 (2.5) (4.7) Management Restructuring and Early Retirement Costs (0.1) (7.3) (1.3) ------------- ------------- ------------- ------------- ------------- ------------- NET INCOME $ 118.9 $ 96.7 $ 144.8 $ 163.8 $ 96.6 $ 62.3 ============= ============= ============= ============= ============= =============
(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 Third Quarter 2007 (unaudited) ($ in millions) Quarters ended
2006 2007 ------------------------------------------------------- ----------------------------------------- March June September December March June September ------------- ------------- ------------- ------------- ------------- ------------- ------------- OPERATING INCOME Variable Universal Life $ 8.5 $ 9.2 $ 11.0 $ 24.0 $ 8.8 $ 11.0 $ 11.9 Universal Life (1) 7.9 11.4 17.1 16.9 17.5 17.7 10.3 Other Life and Annuity 0.4 0.9 0.6 0.8 0.4 0.5 0.1 ------------- ------------- ------------- ------------- ------------- ------------- ------------- TOTAL CORE LIFE INSURANCE 16.8 21.5 28.7 41.7 26.7 29.2 22.3 ------------- ------------- ------------- ------------- ------------- ------------- ------------- Traditional Life, excluding Closed Block (1.7) 3.2 5.1 24.6 12.6 (0.5) 5.6 Traditional Life, Closed Block 17.5 17.4 17.4 17.5 16.7 16.7 16.7 ------------- ------------- ------------- ------------- ------------- ------------- ------------- TOTAL TRADITIONAL LIFE 15.8 20.6 22.5 42.1 29.3 16.3 22.3 ------------- ------------- ------------- ------------- ------------- ------------- ------------- TOTAL, LIFE INSURANCE 32.6 42.1 51.2 83.8 56.0 45.5 44.6 Annuities 5.7 0.5 6.0 (8.2) 6.9 5.2 5.1 ------------- ------------- ------------- ------------- ------------- ------------- ------------- OPERATING INCOME, BEFORE INCOME TAXES 38.3 42.6 57.2 75.6 62.9 50.7 49.7 Allocated Income Taxes 12.0 13.0 15.1 27.8 19.6 16.7 11.6 ------------- ------------- ------------- ------------- ------------- ------------- ------------- OPERATING INCOME 26.3 29.6 42.1 47.8 43.3 34.0 38.1 Net Realized Investment Gains (Losses) (4.2) 0.5 2.4 0.3 0.5 0.5 2.5 ------------- ------------- ------------- ------------- ------------- ------------- ------------- NET INCOME $ 22.1 $ 30.1 $ 44.5 $ 48.1 $ 43.8 $ 34.5 $ 40.6 ------------- ------------- ------------- ------------- ------------- ------------- -------------
(1) Universal Life includes interest sensitive whole life contracts. 5 THE PHOENIX COMPANIES, INC. VARIABLE UNIVERSAL LIFE Third Quarter 2007 (unaudited) ($ in millions)
YTD September December 31, ---------------------------- ---------------------------------------------------------- 2007 2006 2006 2005 2004 2003 ------------- ------------- ------------- ------------- ------------- ------------- PRE-TAX INCOME Fees $ 23.9 $ 21.9 $ 27.6 $ 32.5 $ 29.6 $ 30.1 Cost of Insurance (COI) 60.6 58.3 77.8 76.7 74.6 72.1 Interest Earned 7.4 6.6 9.2 6.3 5.9 5.6 Surrender Charges 5.4 5.5 6.7 7.1 6.9 6.9 ------------- ------------- ------------- ------------- ------------- ------------- TOTAL REVENUES 97.3 92.3 121.3 122.6 117.0 114.7 ------------- ------------- ------------- ------------- ------------- ------------- Net Death and Disability Benefits 21.0 23.1 31.9 28.5 30.5 23.2 Interest Credited 4.2 3.4 4.8 4.6 3.7 3.6 DAC Amortized 21.7 19.6 8.4 (4.4) 22.2 20.8 Operating Expenses 18.7 17.5 23.5 24.3 24.9 32.1 ------------- ------------- ------------- ------------- ------------- ------------- TOTAL EXPENSES 65.6 63.6 68.6 53.0 81.3 79.7 ------------- ------------- ------------- ------------- ------------- ------------- OPERATING INCOME BEFORE TAX $ 31.7 $ 28.7 $ 52.7 $ 69.6 $ 35.7 $ 35.0 ============= ============= ============= ============= ============= ============= - ------------------------------------------------------------------------------------------------------------------------------------ OPERATING EXPENSES Commissions and Concessions $ 11.1 $ 9.8 $ 13.5 $ 13.6 $ 16.3 $ 21.4 Controllable Expenses and Other 24.5 22.0 29.6 26.8 34.0 44.6 ------------- ------------- ------------- ------------- ------------- ------------- TOTAL CURRENT EXPENSES 35.6 31.8 43.1 40.4 50.3 66.0 Deferred Acquisition Costs (16.9) (14.3) (19.6) (16.1) (25.4) (33.9) ------------- ------------- ------------- ------------- ------------- ------------- OPERATING EXPENSES $ 18.7 $ 17.5 $ 23.5 $ 24.3 $ 24.9 $ 32.1 ============= ============= ============= ============= ============= ============= - ------------------------------------------------------------------------------------------------------------------------------------ FUNDS UNDER MANAGEMENT (FUM) Deposits, excluding Private Placement $ 107.6 $ 107.8 $ 149.0 $ 171.4 $ 185.4 $ 204.0 Surrenders, excluding Private Placement (78.7) (62.1) (85.9) (84.4) (60.6) (59.8) ------------- ------------- ------------- ------------- ------------- ------------- Net Sales, excluding Private Placement 28.9 45.7 63.1 87.0 124.8 144.2 Private Placement, Net Sales 26.0 (2.0) 1.0 36.7 45.3 139.8 ------------- ------------- ------------- ------------- ------------- ------------- TOTAL NET SALES 54.9 43.7 64.1 123.7 170.1 284.0 Deaths (18.2) (4.3) (4.7) (3.6) (2.2) (1.4) Interest Credited 196.7 146.0 259.9 141.5 170.0 262.7 Fees (23.6) (22.4) (30.4) (30.3) (31.0) (36.4) Cost of Insurance (58.7) (56.6) (75.8) (74.6) (72.4) (69.8) ------------- ------------- ------------- ------------- ------------- ------------- Change in FUM 151.1 106.4 213.1 156.7 234.5 439.1 Beginning Balance 2,312.9 2,099.8 2,099.8 1,943.1 1,708.6 1,269.5 ------------- ------------- ------------- ------------- ------------- ------------- ENDING FUND BALANCE $ 2,464.0 $ 2,206.2 $ 2,312.9 $ 2,099.8 $ 1,943.1 $ 1,708.6 ============= ============= ============= ============= ============= ============= Life Insurance In Force (1) $ 24,138.8 $ 24,164.2 $ 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 Third Quarter 2007 (unaudited) ($ in millions) Quarters ended
2006 2007 ------------------------------------------------------- ----------------------------------------- March June September December March June September ------------- ------------- ------------- ------------- ------------- ------------- ------------- PRE-TAX INCOME Fees $ 7.2 $ 7.5 $ 7.2 $ 5.7 $ 8.0 $ 8.2 $ 7.7 Cost of Insurance (COI) 19.6 19.4 19.3 19.5 20.3 20.1 20.2 Interest Earned 1.6 1.9 3.1 2.6 2.4 2.4 2.6 Surrender Charges 2.1 1.8 1.6 1.2 2.1 1.4 1.9 ------------- ------------- ------------- ------------- ------------- ------------- ------------- TOTAL REVENUES 30.5 30.6 31.2 29.0 32.8 32.1 32.4 ------------- ------------- ------------- ------------- ------------- ------------- ------------- Net Death and Disability Benefits 8.3 7.3 7.5 8.8 9.0 5.6 6.4 Interest Credited 1.0 1.0 1.4 1.4 1.4 1.4 1.4 DAC Amortized 6.8 6.8 6.0 (11.2) 7.2 7.0 7.5 Operating Expenses 5.9 6.3 5.3 6.0 6.4 7.1 5.2 ------------- ------------- ------------- ------------- ------------- ------------- ------------- TOTAL EXPENSES 22.0 21.4 20.2 5.0 24.0 21.1 20.5 ------------- ------------- ------------- ------------- ------------- ------------- ------------- OPERATING INCOME BEFORE TAX $ 8.5 $ 9.2 $ 11.0 $ 24.0 $ 8.8 $ 11.0 $ 11.9 ============= ============= ============= ============= ============= ============= ============= - ------------------------------------------------------------------------------------------------------------------------------------ OPERATING EXPENSES Commissions and Concessions $ 2.9 $ 3.4 $ 3.5 $ 3.7 $ 4.3 $ 3.5 $ 3.3 Controllable Expenses and Other 6.8 8.7 6.5 7.6 9.4 8.5 6.6 ------------- ------------- ------------- ------------- ------------- ------------- ------------- TOTAL CURRENT EXPENSES 9.7 12.1 10.0 11.3 13.7 12.0 9.9 Deferred Acquisition Costs (3.8) (5.8) (4.7) (5.3) (7.3) (4.9) (4.7) ------------- ------------- ------------- ------------- ------------- ------------- ------------- OPERATING EXPENSES $ 5.9 $ 6.3 $ 5.3 $ 6.0 $ 6.4 $ 7.1 $ 5.2 ============= ============= ============= ============= ============= ============= ============= - ------------------------------------------------------------------------------------------------------------------------------------ FUNDS UNDER MANAGEMENT (FUM) Deposits, excluding Private Placement $ 37.5 $ 35.5 $ 34.8 $ 41.2 $ 40.2 $ 34.7 $ 32.7 Surrenders, excluding Private Placement (19.9) (20.9) (21.3) (23.8) (24.1) (26.1) (28.5) ------------- ------------- ------------- ------------- ------------- ------------- ------------- Net Sales, excluding Private Placement 17.6 14.6 13.5 17.4 16.1 8.6 4.2 Private Placement, Net Sales 9.2 (11.9) 0.7 3.0 8.8 10.8 6.4 ------------- ------------- ------------- ------------- ------------- ------------- ------------- TOTAL NET SALES 26.8 2.7 14.2 20.4 24.9 19.4 10.6 Deaths (2.7) (0.8) (0.8) (0.4) (3.3) (6.6) (8.3) Interest Credited 101.0 (16.0) 61.0 113.9 58.1 112.7 25.9 Fees (7.1) (8.1) (7.2) (8.0) (8.1) (8.4) (7.1) Cost of Insurance (18.9) (18.9) (18.8) (19.2) (19.8) (19.6) (19.3) ------------- ------------- ------------- ------------- ------------- ------------- ------------- Change in FUM 99.1 (41.1) 48.4 106.7 51.8 97.5 1.8 Beginning Balance 2,099.8 2,198.9 2,157.8 2,206.2 2,312.9 2,364.7 2,462.2 ------------- ------------- ------------- ------------- ------------- ------------- ------------- ENDING FUND BALANCE $ 2,198.9 $ 2,157.8 $ 2,206.2 $ 2,312.9 $ 2,364.7 $ 2,462.2 $ 2,464.0 ============= ============= ============= ============= ============= ============= ============= Life Insurance In Force (1) $ 24,652.2 $ 24,257.5 $ 24,164.2 $ 24,164.6 $ 24,320.5 $ 24,170.9 $ 24,138.8 ============= ============= ============= ============= ============= ============= =============
(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 Third Quarter 2007 (unaudited) ($ in millions)
YTD September December 31, ---------------------------- ---------------------------------------------------------- 2007 2006 2006 2005 2004 2003 ------------- ------------- ------------- ------------- ------------- ------------- PRE-TAX INCOME Fees $ 23.9 $ 20.4 $ 27.2 $ 17.9 $ 19.1 $ 17.3 Cost of Insurance (COI) 181.3 133.0 184.9 109.9 90.7 78.9 Interest Earned 92.5 85.8 116.5 108.7 100.4 98.2 Surrender Charges 2.2 3.0 3.7 3.2 3.2 2.5 ------------- ------------- ------------- ------------- ------------- ------------- TOTAL REVENUES 299.9 242.2 332.3 239.7 213.4 196.9 ------------- ------------- ------------- ------------- ------------- ------------- Net Death and Disability Benefits 83.9 67.3 98.0 61.8 58.4 51.4 Interest Credited 63.4 59.1 79.6 74.5 74.6 78.0 DAC Amortized 64.7 45.2 55.5 17.9 20.3 17.7 Operating Expenses 42.4 34.2 45.9 37.6 25.7 28.1 ------------- ------------- ------------- ------------- ------------- ------------- TOTAL EXPENSES 254.4 205.8 279.0 191.8 179.0 175.2 ------------- ------------- ------------- ------------- ------------- ------------- OPERATING INCOME BEFORE TAX $ 45.5 $ 36.4 $ 53.3 $ 47.9 $ 34.4 $ 21.7 ============= ============= ============= ============= ============= ============= - ------------------------------------------------------------------------------------------------------------------------------------ OPERATING EXPENSES Commissions and Concessions $ 92.5 $ 70.4 $ 104.9 $ 51.1 $ 24.9 $ 28.2 Controllable Expenses and Other 154.3 119.7 176.2 96.5 64.3 74.8 ------------- ------------- ------------- ------------- ------------- ------------- TOTAL CURRENT EXPENSES 246.8 190.1 281.1 147.6 89.2 103.0 Deferred Acquisition Costs (204.4) (155.9) (235.2) (110.0) (63.5) (74.9) ------------- ------------- ------------- ------------- ------------- ------------- OPERATING EXPENSES $ 42.4 $ 34.2 $ 45.9 $ 37.6 $ 25.7 $ 28.1 ============= ============= ============= ============= ============= ============= - ------------------------------------------------------------------------------------------------------------------------------------ FUNDS UNDER MANAGEMENT (FUM) Deposits $ 338.9 $ 297.9 $ 417.1 $ 297.8 $ 229.4 $ 217.8 Surrenders (57.4) (66.2) (84.7) (94.1) (126.2) (118.6) ------------- ------------- ------------- ------------- ------------- ------------- NET SALES 281.5 231.7 332.4 203.7 103.2 99.2 Deaths (17.2) (17.3) (20.5) (22.3) (16.9) (19.4) Interest Credited 63.3 59.1 79.6 78.7 74.6 78.0 Fees (29.9) (26.1) (36.6) (26.8) (23.5) (24.9) Cost of Insurance (181.3) (132.9) (184.9) (109.9) (90.7) (78.9) ------------- ------------- ------------- ------------- ------------- ------------- Change in FUM 116.4 114.5 170.0 123.4 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 $ 2,020.5 $ 1,848.6 $ 1,904.1 $ 1,734.1 $ 1,610.7 $ 1,564.0 ============= ============= ============= ============= ============= ============= Life Insurance In Force $ 24,422.2 $ 19,025.8 $ 20,402.1 $ 16,303.0 $ 14,103.7 $ 12,830.3 ============= ============= ============= ============= ============= =============
8 THE PHOENIX COMPANIES, INC. UNIVERSAL LIFE / INTEREST SENSITIVE Third Quarter 2007 (unaudited) ($ in millions) Quarters ended
2006 2007 ------------------------------------------------------- ----------------------------------------- March June September December March June September ------------- ------------- ------------- ------------- ------------- ------------- ------------- PRE-TAX INCOME Fees $ 8.0 $ 5.4 $ 7.0 $ 6.8 $ 6.7 $ 7.5 $ 9.7 Cost of Insurance (COI) 42.0 44.5 46.5 51.9 56.1 59.5 65.7 Interest Earned 27.0 29.1 29.7 30.7 30.7 30.0 31.8 Surrender Charges 1.0 0.3 1.7 0.7 0.7 0.8 0.7 ------------- ------------- ------------- ------------- ------------- ------------- ------------- TOTAL REVENUES 78.0 79.3 84.9 90.1 94.2 97.8 107.9 ------------- ------------- ------------- ------------- ------------- ------------- ------------- Net Death and Disability Benefits 27.6 23.9 15.8 30.7 24.7 20.3 38.9 Interest Credited 19.4 19.8 19.9 20.5 21.0 21.0 21.4 DAC Amortized 9.6 13.7 21.9 10.3 18.6 24.1 22.0 Operating Expenses 13.5 10.5 10.2 11.7 12.4 14.7 15.3 ------------- ------------- ------------- ------------- ------------- ------------- ------------- TOTAL EXPENSES 70.1 67.9 67.8 73.2 76.7 80.1 97.6 ------------- ------------- ------------- ------------- ------------- ------------- ------------- OPERATING INCOME BEFORE TAX $ 7.9 $ 11.4 $ 17.1 $ 16.9 $ 17.5 $ 17.7 $ 10.3 ============= ============= ============= ============= ============= ============= ============= - ------------------------------------------------------------------------------------------------------------------------------------ OPERATING EXPENSES Commissions and Concessions $ 34.7 $ 14.1 $ 21.6 $ 34.5 $ 23.5 $ 26.6 $ 42.4 Controllable Expenses and Other 51.6 32.2 35.9 56.5 39.1 47.9 67.3 ------------- ------------- ------------- ------------- ------------- ------------- ------------- TOTAL CURRENT EXPENSES 86.3 46.3 57.5 91.0 62.6 74.5 109.7 Deferred Acquisition Costs (72.8) (35.8) (47.3) (79.3) (50.2) (59.8) (94.4) ------------- ------------- ------------- ------------- ------------- ------------- ------------- OPERATING EXPENSES $ 13.5 $ 10.5 $ 10.2 $ 11.7 $ 12.4 $ 14.7 $ 15.3 ============= ============= ============= ============= ============= ============= ============= - ------------------------------------------------------------------------------------------------------------------------------------ FUNDS UNDER MANAGEMENT (FUM) Deposits $ 135.5 $ 73.7 $ 88.7 $ 119.2 $ 92.3 $ 100.2 $ 146.4 Surrenders (22.5) (21.3) (22.4) (18.5) (21.9) (19.3) (16.2) ------------- ------------- ------------- ------------- ------------- ------------- ------------- NET SALES 113.0 52.4 66.3 100.7 70.4 80.9 130.2 Deaths (6.8) (5.4) (5.1) (3.2) (8.3) (4.2) (4.7) Interest Credited 19.4 19.8 19.9 20.5 21.0 21.0 21.3 Fees (11.4) (6.5) (8.2) (10.5) (8.2) (8.9) (12.8) Cost of Insurance (42.0) (44.5) (46.4) (52.0) (56.1) (59.5) (65.7) ------------- ------------- ------------- ------------- ------------- ------------- ------------- Change in FUM 72.2 15.8 26.5 55.5 18.8 29.3 68.3 Beginning Balance 1,734.1 1,806.3 1,822.1 1,848.6 1,904.1 1,922.9 1,952.2 ------------- ------------- ------------- ------------- ------------- ------------- ------------- ENDING FUND BALANCE $ 1,806.3 $ 1,822.1 $ 1,848.6 $ 1,904.1 $ 1,922.9 $ 1,952.2 $ 2,020.5 ============= ============= ============= ============= ============= ============= ============= Life Insurance In Force $ 17,667.4 $ 18,217.0 $ 19,025.8 $ 20,402.1 $ 21,311.6 $ 22,575.0 $ 24,422.2 ============= ============= ============= ============= ============= ============= =============
9 THE PHOENIX COMPANIES, INC. LIFE AND PRIVATE PLACEMENT SALES Third Quarter 2007 (unaudited) ($ in millions)
YTD September December 31, ---------------------------- ---------------------------------------------------------- 2007 2006 2006 2005 2004 2003 ------------- ------------- ------------- ------------- ------------- ------------- LIFE INSURANCE SALES WHOLESALER CHANNEL Variable Universal Life $ 16.2 $ 10.9 $ 16.7 $ 16.1 $ 18.2 $ 30.1 Universal Life/Interest Sensitive 180.3 156.1 221.9 104.4 47.5 67.5 Term Life 15.1 14.7 20.3 16.4 15.3 19.2 Participating Whole Life 0.6 ------------- ------------- ------------- ------------- ------------- ------------- Life Insurance Annualized Premium (1) 211.6 181.7 258.9 136.9 81.0 117.4 ============= ============= ============= ============= ============= ============= Variable Universal Life 5.2 6.0 8.6 6.4 10.8 20.1 Universal Life/Interest Sensitive 39.0 42.6 61.8 49.2 53.2 61.6 ------------- ------------- ------------- ------------- ------------- ------------- Life Insurance Single Premium 44.2 48.6 70.4 55.6 64.0 81.7 ============= ============= ============= ============= ============= ============= Variable Universal Life 21.4 16.9 25.3 22.5 29.0 50.2 Universal Life/Interest Sensitive 219.3 198.7 283.7 153.6 100.7 129.1 Term Life 15.1 14.7 20.3 16.4 15.3 19.2 Participating Whole Life 0.6 ------------- ------------- ------------- ------------- ------------- ------------- Total Wholesaler Life Insurance Premium (2) $ 255.8 $ 230.3 $ 329.3 $ 192.5 $ 145.0 $ 199.1 ============= ============= ============= ============= ============= ============= Gross Life Insurance in Force $ 151,282.0 $ 140,937.0 $ 144,139.0 $ 134,780.0 $ 127,466.0 $ 123,354.0 ============= ============= ============= ============= ============= ============= Average face amount for life insurance sales $ 1.2 $ 1.2 $ 1.2 $ 1.1 $ 1.0 $ 1.0 ============= ============= ============= ============= ============= ============= PRIVATE PLACEMENT LIFE AND ANNUITY DEPOSITS Variable Universal Life (annualized and single) $ 32.2 $ 27.5 $ 33.5 $ 46.5 $ 60.1 $ 149.5 Annuity 248.4 79.1 1,020.2 773.8 152.6 394.9 ------------- ------------- ------------- ------------- ------------- ------------- Total Private Placement Life and Annuity Deposits $ 280.6 $ 106.6 $ 1,053.7 $ 820.3 $ 212.7 $ 544.4 ============= ============= ============= ============= ============= ============= PRIVATE PLACEMENT FUNDS UNDER MANAGEMENT (FUM) $ 4,561.6 $ 2,989.4 $ 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 Third Quarter 2007 (unaudited) ($ in millions) Quarters ended
2006 2007 LIFE INSURANCE SALES ------------------------------------------------------- ----------------------------------------- March June September December March June September ------------- ------------- ------------- ------------- ------------- ------------- ------------- WHOLESALER CHANNEL Variable Universal Life $ 2.8 $ 4.9 $ 3.2 $ 5.8 $ 6.4 $ 4.7 $ 5.1 Universal Life/Interest Sensitive 83.5 30.2 42.4 65.8 40.2 53.4 86.7 Term Life 5.5 4.5 4.7 5.6 5.5 5.2 4.4 ------------- ------------- ------------- ------------- ------------- ------------- ------------- Life Insurance Annualized Premium (1) 91.8 39.6 50.3 77.2 52.1 63.3 96.2 ============= ============= ============= ============= ============= ============= ============= Variable Universal Life 1.1 2.1 2.8 2.6 2.4 1.6 1.2 Universal Life/Interest Sensitive 18.0 9.1 15.5 19.2 7.8 12.3 18.9 ------------- ------------- ------------- ------------- ------------- ------------- ------------- Life Insurance Single Premium 19.1 11.2 18.3 21.8 10.2 13.9 20.1 ============= ============= ============= ============= ============= ============= ============= Variable Universal Life 3.9 7.0 6.0 8.4 8.8 6.3 6.3 Universal Life/Interest Sensitive 101.5 39.3 57.9 85.0 48.0 65.7 105.6 Term Life 5.5 4.5 4.7 5.6 5.5 5.2 4.4 ------------- ------------- ------------- ------------- ------------- ------------- ------------- Total Wholesaler Life Insurance Premium (2) $ 110.9 $ 50.8 $ 68.6 $ 99.0 $ 62.3 $ 77.2 $ 116.3 ============= ============= ============= ============= ============= ============= ============= Gross Life Insurance in Force $ 137,628.0 $ 139,242.0 $ 140,937.0 $ 144,139.0 $ 146,355.0 148,572.0 $ 151,282.0 ============= ============= ============= ============= ============= ============= ============= Average face amount for life insurance sales $ 1.3 $ 1.1 $ 1.2 $ 1.2 $ 1.2 $ 1.1 $ 1.2 ============= ============= ============= ============= ============= ============= ============= PRIVATE PLACEMENT LIFE AND ANNUITY DEPOSITS Variable Universal Life (annualized and single) $ 8.5 $ 17.3 $ 1.7 $ 6.0 $ 11.4 $ 13.2 $ 7.6 Annuity 3.4 42.6 33.1 941.1 54.2 146.7 47.5 ------------- ------------- ------------- ------------- ------------- ------------- ------------- Total Private Placement Life and Annuity Deposits $ 11.9 $ 59.9 $ 34.8 $ 947.1 $ 65.6 $ 159.9 $ 55.1 ============= ============= ============= ============= ============= ============= ============= PRIVATE PLACEMENT FUNDS UNDER MANAGEMENT (FUM) $ 2,783.9 $ 2,912.2 $ 2,989.4 $ 4,055.5 $ 4,185.0 $ 4,539.2 $ 4,561.6 ============= ============= ============= ============= ============= ============= =============
(1) Annualized Premium represents first year premiums on an annual basis. (2) Total Premium represents Annualized and Single premiums. 11 THE PHOENIX COMPANIES, INC. ANNUITIES Third Quarter 2007 (unaudited) ($ in millions)
YTD September December 31, ---------------------------- ---------------------------------------------------------- 2007 2006 2006 2005 2004 2003 ------------- ------------- ------------- ------------- ------------- ------------- PRE-TAX INCOME Fees $ 54.7 $ 49.7 $ 66.9 $ 65.4 $ 63.8 $ 57.2 Surrender Charges 4.4 4.8 6.3 7.0 5.8 7.4 Interest earned on GIA and Required Interest 78.1 100.6 131.7 165.1 158.0 150.1 ------------- ------------- ------------- ------------- ------------- ------------- TOTAL REVENUES 137.2 155.1 204.9 237.5 227.6 214.7 ------------- ------------- ------------- ------------- ------------- ------------- Mortality Cost 4.3 3.6 5.8 6.6 8.9 4.4 DAC Amortized 34.2 39.5 66.6 62.6 35.7 26.5 Interest Credited 49.6 68.5 87.4 112.1 123.2 133.0 Operating Expenses 31.9 31.3 41.1 44.2 47.1 51.8 ------------- ------------- ------------- ------------- ------------- ------------- TOTAL EXPENSES 120.0 142.9 200.9 225.5 214.9 215.7 ------------- ------------- ------------- ------------- ------------- ------------- OPERATING INCOME (LOSS) BEFORE TAX $ 17.2 $ 12.2 $ 4.0 $ 12.0 $ 12.7 $ (1.0) ============= ============= ============= ============= ============= ============= - ------------------------------------------------------------------------------------------------------------------------------------ OPERATING EXPENSES Commissions and Concessions $ 34.5 $ 29.2 $ 39.7 $ 38.2 $ 42.6 $ 51.1 Controllable Expenses and Other 37.1 29.4 40.8 37.9 48.2 66.2 ------------- ------------- ------------- ------------- ------------- ------------- TOTAL CURRENT EXPENSES 71.6 58.6 80.5 76.1 90.8 117.3 Deferred Acquisition Costs (39.7) (27.3) (39.4) (31.9) (43.7) (65.5) ------------- ------------- ------------- ------------- ------------- ------------- OPERATING EXPENSES $ 31.9 $ 31.3 $ 41.1 $ 44.2 $ 47.1 $ 51.8 ============= ============= ============= ============= ============= ============= - ------------------------------------------------------------------------------------------------------------------------------------ FUNDS UNDER MANAGEMENT (FUM) Deposits, excluding Discontinued Products and Private Placement $ 429.9 $ 294.4 $ 414.7 $ 312.9 $ 423.3 $ 620.1 Surrenders, excluding Discontinued Products and Private Placement (460.0) (531.2) (690.2) (584.4) (490.8) (471.7) ------------- ------------- ------------- ------------- ------------- ------------- Net Sales, excluding Discontinued Products and Private Placement (30.1) (236.8) (275.5) (271.5) (67.5) 148.4 Net Sales, Private Placement 111.8 (115.7) 807.4 587.9 121.9 362.7 Net Sales, Discontinued Products (275.6) (620.9) (684.1) (383.8) (186.3) 51.6 ------------- ------------- ------------- ------------- ------------- ------------- TOTAL NET SALES (193.9) (973.4) (152.2) (67.4) (131.9) 562.7 Deaths (61.6) (67.6) (87.0) (80.2) (81.6) (71.4) Interest Credited 693.7 606.8 949.6 545.8 628.2 895.2 Fees (52.4) (48.0) (70.9) (63.0) (59.8) (57.7) ------------- ------------- ------------- ------------- ------------- ------------- Change in FUM 385.8 (482.2) 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 $ 9,063.4 $ 7,555.9 $ 8,677.6 $ 8,038.1 $ 7,702.9 $ 7,348.0 ============= ============= ============= ============= ============= ============= VA Funds in Guaranteed Interest Accounts (1) $ 777.9 $ 1,087.8 $ 1,030.8 $ 1,553.8 $ 1,939.1 $ 2,067.4 ============= ============= ============= ============= ============= ============= Private Placements Funds (1) $ 3,744.1 $ 2,268.0 $ 3,302.8 $ 2,099.3 $ 1,297.9 $ 1,021.9 ============= ============= ============= ============= ============= ============= Discontinued Funds (1) $ 993.8 $ 1,322.9 $ 1,263.3 $ 1,727.1 $ 2,080.3 $ 2,221.7 ============= ============= ============= ============= ============= =============
(1) Amounts are included in the annuities Funds Under Management (FUM) table above. 12 THE PHOENIX COMPANIES, INC. ANNUITIES Third Quarter 2007 (unaudited) ($ in millions) Quarters ended
2006 2007 ------------------------------------------------------- ----------------------------------------- March June September December March June September ------------- ------------- ------------- ------------- ------------- ------------- ------------- PRE-TAX INCOME Fees $ 16.6 $ 16.8 $ 16.3 $ 17.2 $ 17.3 $ 18.6 $ 18.8 Surrender Charges 1.5 1.7 1.6 1.5 1.6 1.4 1.4 Interest earned on GIA and Required Interest 35.5 34.3 30.8 31.1 27.1 26.4 24.6 ------------- ------------- ------------- ------------- ------------- ------------- ------------- TOTAL REVENUES 53.6 52.8 48.7 49.8 46.0 46.4 44.8 ------------- ------------- ------------- ------------- ------------- ------------- ------------- Mortality Cost 0.3 1.4 1.9 2.2 (1.0) 2.8 2.5 DAC Amortized 11.2 16.3 12.0 27.1 12.3 9.6 12.3 Interest Credited 25.1 24.2 19.2 18.9 17.3 17.2 15.1 Operating Expenses 11.3 10.4 9.6 9.8 10.5 11.6 9.8 ------------- ------------- ------------- ------------- ------------- ------------- ------------- TOTAL EXPENSES 47.9 52.3 42.7 58.0 39.1 41.2 39.7 ------------- ------------- ------------- ------------- ------------- ------------- ------------- OPERATING INCOME (LOSS) BEFORE TAX $ 5.7 $ 0.5 $ 6.0 $ (8.2) $ 6.9 $ 5.2 $ 5.1 ============= ============= ============= ============= ============= ============= ============= - ------------------------------------------------------------------------------------------------------------------------------------ OPERATING EXPENSES Commissions and Concessions $ 9.9 $ 10.2 $ 9.1 $ 10.5 $ 10.9 $ 12.3 $ 11.3 Controllable Expenses and Other 10.1 9.7 9.6 11.4 11.9 13.8 11.4 ------------- ------------- ------------- ------------- ------------- ------------- ------------- TOTAL CURRENT EXPENSES 20.0 19.9 18.7 21.9 22.8 26.1 22.7 Deferred Acquisition Costs (8.7) (9.5) (9.1) (12.1) (12.3) (14.5) (12.9) ------------- ------------- ------------- ------------- ------------- ------------- ------------- OPERATING EXPENSES $ 11.3 $ 10.4 $ 9.6 $ 9.8 $ 10.5 $ 11.6 $ 9.8 ============= ============= ============= ============= ============= ============= ============= - ------------------------------------------------------------------------------------------------------------------------------------ FUNDS UNDER MANAGEMENT (FUM) Deposits, excluding Discontinued Products and Private Placement $ 90.3 $ 102.4 $ 101.7 $ 120.3 $ 131.3 $ 158.6 $ 139.9 Surrenders, excluding Discontinued Products and Private Placement (167.8) (186.7) (176.7) (159.0) (159.0) (149.5) (151.4) ------------- ------------- ------------- ------------- ------------- ------------- ------------- Net Sales, excluding Discontinued Products and Private Placement (77.5) (84.3) (75.0) (38.7) (27.7) 9.1 (11.5) Net Sales, Private Placement (140.8) 18.5 6.6 923.1 29.0 124.2 (41.4) Net Sales, Discontinued Products (176.1) (343.8) (101.0) (63.2) (73.9) (120.8) (80.9) ------------- ------------- ------------- ------------- ------------- ------------- ------------- TOTAL NET SALES (394.4) (409.6) (169.4) 821.2 (72.6) 12.5 (133.8) Deaths (22.6) (23.6) (21.4) (19.4) (21.2) (22.8) (17.6) Interest Credited 319.2 80.9 206.7 342.8 169.6 372.5 151.6 Fees (15.8) (16.2) (16.0) (22.9) (17.8) (17.6) (17.0) ------------- ------------- ------------- ------------- ------------- ------------- ------------- Change in FUM (113.6) (368.5) (0.1) 1,121.7 58.0 344.6 (16.8) Beginning Balance 8,038.1 7,924.5 7,556.0 7,555.9 8,677.6 8,735.6 9,080.2 ------------- ------------- ------------- ------------- ------------- ------------- ------------- ENDING FUND BALANCE $ 7,924.5 $ 7,556.0 $ 7,555.9 $ 8,677.6 $ 8,735.6 $ 9,080.2 $ 9,063.4 ============= ============= ============= ============= ============= ============= ============= VA Funds in Guaranteed Interest Accounts (1) $ 1,355.0 $ 1,195.6 $ 1,087.8 $ 1,030.8 $ 955.9 $ 891.7 $ 777.9 ============= ============= ============= ============= ============= ============= ============= Private Placements Funds (1) $ 2,068.3 $ 2,198.3 $ 2,268.0 $ 3,302.8 $ 3,403.2 $ 3,714.6 $ 3,744.1 ============= ============= ============= ============= ============= ============= ============= Discontinued Funds (1) $ 1,556.1 $ 1,418.5 $ 1,322.9 $ 1,263.3 $ 1,190.0 $ 1,072.0 $ 993.8 ============= ============= ============= ============= ============= ============= =============
(1) Amounts are included in the annuities Funds Under Management (FUM) table above. 13 THE PHOENIX COMPANIES, INC. SUPPLEMENTARY LIFE AND ANNUITY INFORMATION Third Quarter 2007 (unaudited) ($ in millions)
YTD September December 31, ---------------------------- ---------------------------------------------------------- 2007 2006 2006 2005 2004 2003 ------------- ------------- ------------- ------------- ------------- ------------- DEFERRED ACQUISITION COSTS Variable Universal Life $ 359.4 $ 347.6 $ 364.2 $ 353.0 $ 332.5 $ 329.3 Universal Life 673.4 465.2 533.9 354.7 262.0 219.2 Variable Annuities 286.1 275.2 275.0 281.3 299.0 291.8 Fixed Annuities 15.4 35.1 20.3 38.8 46.0 45.2 Participating 565.3 554.8 559.0 544.2 577.0 576.3 Offset for Unrealized Investment (Gains) Losses 48.7 6.6 0.3 (16.0) (86.6) (94.1) ------------- ------------- ------------- ------------- ------------- ------------- Total $ 1,948.3 $ 1,684.5 $ 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 $ 189.3 $ 274.7 $ 238.8 $ 335.5 $ 441.1 $ 616.9 Death Benefit in Excess of Fund Value, Net of Reinsurance 37.2 63.4 51.3 82.1 123.5 183.0 Statutory Reserve, Net of Reinsurance 12.6 13.7 13.2 13.8 15.0 17.3 GAAP Reserve, Net of Reinsurance $ 10.2 $ 10.6 $ 10.7 $ 10.7 $ 9.1 $ 7.8 VARIABLE ANNUITY GUARANTEED INCOME BENEFITS Account Balance $ 695.3 $ 566.1 $ 620.1 $ 465.8 $ 344.8 $ 166.8 Statutory Reserve 6.2 3.9 4.4 2.2 0.8 0.1 GAAP Reserve 4.2 2.5 3.7 2.2 0.8 VARIABLE ANNUITY GUARANTEED ACCUMULATION BENEFITS Account Balance $ 324.2 $ 163.5 $ 210.6 $ 72.6 Statutory Reserve 1.8 0.6 0.8 0.3 GAAP Reserve (1.8) (0.3) (1.7) 0.3 VARIABLE ANNUITY GUARANTEED WITHDRAWAL BENEFITS Account Balance $ 103.7 $ 17.4 $ 30.1 $ 1.1 Statutory Reserve 0.4 0.1 GAAP Reserve VARIABLE ANNUITY GUARANTEED PAYOUT ANNUITY FLOOR Account Balance $ 46.6 $ 49.6 $ 49.8 $ 49.9 Statutory Reserve 2.0 2.3 2.1 1.9 GAAP Reserve 1.7 1.6 1.6 1.3 =============
14 THE PHOENIX COMPANIES, INC. SUPPLEMENTARY LIFE AND ANNUITY INFORMATION Third Quarter 2007 (unaudited) ($ in millions) Quarters ended
2006 2007 ------------------------------------------------------- ----------------------------------------- March June September December March June September ------------- ------------- ------------- ------------- ------------- ------------- ------------- DEFERRED ACQUISITION COSTS Variable Universal Life $ 349.9 $ 348.9 $ 347.6 $ 364.2 $ 364.3 $ 362.2 $ 359.4 Universal Life 417.7 439.6 465.2 533.9 565.4 601.1 673.4 Variable Annuities 281.7 276.4 275.2 275.0 275.9 283.3 286.1 Fixed Annuities 38.2 36.6 35.1 20.3 19.4 17.3 15.4 Participating 548.1 551.1 554.8 559.0 561.8 564.3 565.3 Offset for Unrealized Investment Gains and Losses 22.5 57.5 6.6 0.3 (5.0) 31.8 48.7 ------------- ------------- ------------- ------------- ------------- ------------- ------------- Total $ 1,658.1 $ 1,710.1 $ 1,684.5 $ 1,752.7 $ 1,781.8 $ 1,860.0 $ 1,948.3 ============= ============= ============= ============= ============= ============= ============= - ------------------------------------------------------------------------------------------------------------------------------------ VARIABLE ANNUITY GUARANTEED MINIMUM DEATH BENEFITS Death Benefit in Excess of Fund Value $ 291.6 $ 311.4 $ 274.7 $ 238.8 $ 225.2 $ 199.9 $ 189.3 Death Benefit in Excess of Fund Value, Net of Reinsurance 66.5 75.5 63.4 51.3 48.3 40.7 37.2 Statutory Reserve, Net of Reinsurance 13.2 14.0 13.7 13.2 13.3 12.9 12.6 GAAP Reserve, Net of Reinsurance $ 9.3 $ 10.5 $ 10.6 $ 10.7 $ 10.9 $ 10.2 $ 10.2 VARIABLE ANNUITY GUARANTEED INCOME BENEFITS Account Balance $ 514.7 $ 525.8 $ 566.1 $ 620.1 $ 654.5 $ 702.4 $ 695.3 Statutory Reserve 2.8 3.4 3.9 4.4 5.0 5.6 6.2 GAAP Reserve 2.8 2.0 2.5 3.7 2.2 2.6 4.2 VARIABLE ANNUITY GUARANTEED ACCUMULATION BENEFITS Account Balance $ 100.5 $ 127.4 $ 163.5 $ 210.6 $ 246.9 $ 302.5 $ 324.2 Statutory Reserve 0.4 0.4 0.6 0.8 1.1 1.5 1.8 GAAP Reserve 0.4 (0.3) (1.7) (2.5) (1.7) (1.8) VARIABLE ANNUITY GUARANTEED WITHDRAWAL BENEFITS Account Balance $ 3.0 $ 7.2 $ 17.4 $ 30.1 $ 49.1 $ 81.6 $ 103.7 Statutory Reserve 0.1 0.1 0.2 0.4 GAAP Reserve VARIABLE ANNUITY GUARANTEED PAYOUT ANNUITY FLOOR Account Balance $ 50.2 $ 49.2 $ 49.6 $ 49.8 $ 47.5 $ 47.6 $ 46.6 Statutory Reserve 2.2 2.6 2.3 2.1 2.2 1.9 2.0 GAAP Reserve 1.4 1.5 1.6 1.6 1.5 1.6 1.7 =============
15 THE PHOENIX COMPANIES, INC. ASSET MANAGEMENT Third Quarter 2007 (unaudited) ($ in millions)
YTD September December 31, ---------------------------- ---------------------------------------------------------- 2007 2006 2006 2005 2004 2003 ------------- ------------- ------------- ------------- ------------- ------------- OPERATING INCOME Investment Management Fees $ 110.9 $ 116.0 $ 154.1 $ 182.1 $ 219.0 $ 205.5 Mutual Funds - Ancillary Fees(1) 44.7 36.6 49.4 41.1 38.8 35.5 Other Revenue 5.9 4.0 5.3 4.9 7.2 9.3 ------------- ------------- ------------- ------------- ------------- ------------- Total Revenues 161.5 156.6 208.8 228.1 265.0 250.3 ------------- ------------- ------------- ------------- ------------- ------------- Employment Expenses 65.2 65.5 89.4 103.9 132.6 129.6 Distribution & Admin Expenses(2) 37.2 28.7 41.3 35.8 32.9 28.6 Other Operating Expenses(1)(2) 32.6 33.4 43.8 50.6 53.0 58.1 Amortization of Intangibles 22.6 24.2 32.0 33.2 33.8 33.2 Intangible Asset Impairments 32.5 32.5 10.6 ------------- ------------- ------------- ------------- ------------- ------------- Total Operating Expenses 157.6 184.3 239.0 234.1 252.3 249.5 ------------- ------------- ------------- ------------- ------------- ------------- Management Income (Loss) 3.9 (27.7) (30.2) (6.0) 12.7 0.8 Other Income - Net 1.6 1.0 1.6 2.2 1.7 2.5 Minority Interest (6.7) (14.3) (12.0) ------------- ------------- ------------- ------------- ------------- ------------- Operating Income (Loss), before income taxes 5.5 (26.7) (28.6) (10.5) 0.1 (8.7) Applicable Income Taxes (Benefit) 3.1 (10.5) (10.7) (4.7) 2.3 (3.3) ------------- ------------- ------------- ------------- ------------- ------------- OPERATING INCOME (LOSS) 2.4 (16.2) (17.9) (5.8) (2.2) (5.4) Net Realized Investment Gains (Losses) 0.1 0.4 0.8 (0.3) 1.8 (0.3) Management Restructuring and Early Retirement Costs (7.2) (8.7) (8.3) (1.2) (4.0) ------------- ------------- ------------- ------------- ------------- ------------- NET INCOME (LOSS) $ 2.5 $ (23.0) $ (25.8) $ (14.4) $ (1.6) $ (9.7) ============= ============= ============= ============= ============= ============= Reconciliation of Operating Income to Earnings Before Income Taxes, Depreciation and Amortization (EBITDA) Operating Income (Loss), before income taxes $ 5.5 $ (26.7) $ (28.6) $ (10.5) $ 0.1 $ (8.7) Adjustments for: Intangible asset amortization and impairments 22.6 56.6 64.5 43.8 33.8 33.2 Depreciation 0.9 0.8 1.0 1.7 2.2 2.7 ------------- ------------- ------------- ------------- ------------- ------------- EBITDA $ 29.0 $ 30.7 $ 36.9 $ 35.0 $ 36.1 $ 27.2 ============= ============= ============= ============= ============= =============
(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 Third Quarter 2007 (unaudited) ($ in millions) Quarters ended
2006 2007 ------------------------------------------------------- ----------------------------------------- March June September December March June September ------------- ------------- ------------- ------------- ------------- ------------- ------------- OPERATING INCOME Investment Management Fees $ 36.5 $ 37.5 $ 42.0 $ 38.1 $ 36.9 $ 37.1 $ 36.9 Mutual Funds - Ancillary Fees 10.7 11.6 14.3 12.8 14.3 15.3 15.1 Other Revenue 1.3 0.8 1.9 1.3 2.2 1.8 1.9 ------------- ------------- ------------- ------------- ------------- ------------- ------------- Total Revenues 48.5 49.9 58.2 52.2 53.4 54.2 53.9 ------------- ------------- ------------- ------------- ------------- ------------- ------------- Employment Expenses 22.5 19.9 23.1 23.9 24.0 20.4 20.8 Distribution & Admin Expenses(1) 8.9 9.1 10.7 12.6 11.6 12.7 12.9 Other Operating Expenses(1) 11.5 11.5 10.4 10.4 10.1 11.9 10.6 Amortization of Intangibles 8.0 8.5 7.7 7.8 7.6 7.5 7.5 Intangible Asset Impairments 32.5 ------------- ------------- ------------- ------------- ------------- ------------- ------------- Total Operating Expenses 83.4 49.1 51.8 54.7 53.3 52.5 51.8 ------------- ------------- ------------- ------------- ------------- ------------- ------------- Management Income (Loss) (34.9) 0.8 6.4 (2.5) 0.1 1.7 2.1 Other Income - Net 0.3 0.4 0.3 0.6 0.5 0.6 0.5 ------------- ------------- ------------- ------------- ------------- ------------- ------------- Operating Income (Loss), before income taxes (34.6) 1.3 6.6 (1.9) 0.6 2.3 2.6 Applicable Income Taxes (Benefit) (13.4) 0.6 2.3 (0.2) 0.9 1.0 1.2 ------------- ------------- ------------- ------------- ------------- ------------- ------------- OPERATING INCOME (LOSS) (21.2) 0.7 4.3 (1.7) (0.3) 1.3 1.4 Net Realized Investment Gains (Losses) 0.2 - 0.2 0.4 0.1 0.2 (0.2) Management Restructuring and Early Retirement Costs (2.5) (3.3) (1.4) (1.5) ------------- ------------- ------------- ------------- ------------- ------------- ------------- NET INCOME (LOSS) $ (23.5) $ (2.6) $ 3.1 $ (2.8) $ (0.2) $ 1.5 $ 1.2 ============= ============= ============= ============= ============= ============= ============= Reconciliation of Operating Income to Earnings Before Income Taxes, Depreciation and Amortization (EBITDA) Operating Income (Loss), before income taxes $ (34.6) $ 1.3 $ 6.6 $ (1.9) $ 0.6 $ 2.3 $ 2.6 Adjustments for: Intangible asset amortization and impairments 40.5 8.5 7.7 7.8 7.6 7.5 7.5 Depreciation 0.4 0.2 0.1 0.2 0.2 0.5 0.2 ------------- ------------- ------------- ------------- ------------- ------------- ------------- EBITDA $ 6.3 $ 10.0 $ 14.4 $ 6.2 $ 8.4 $ 10.3 $ 10.3 ============= ============= ============= ============= ============= ============= =============
(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 Third Quarter 2007 (unaudited) ($ in millions)
YTD September December 31, ---------------------------- ---------------------------------------------------------- 2007 2006 2006 2005 2004 2003 ------------- ------------- ------------- ------------- ------------- ------------- RETAIL PRODUCTS: Managed Accounts - ---------------- Deposits and reinvestments $ 954.9 $ 861.8 $ 1,141.2 $ 1,760.3 $ 2,109.9 $ 2,268.3 Redemptions and withdrawals (2,041.5) (3,774.6) (4,297.6) (5,722.8) (5,203.0) (2,656.6) ------------- ------------- ------------- ------------- ------------- ------------- Net Flows (1,086.6) (2,912.8) (3,156.4) (3,962.5) (3,093.1) (388.3) Performance 264.8 283.7 593.9 (62.6) 950.3 1,537.5 Acquisitions (dispositions) / Other 71.0 71.1 (158.0) ------------- ------------- ------------- ------------- ------------- ------------- Net Change in AUM (821.8) (2,558.1) (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 $ 6,019.3 $ 6,774.4 $ 6,841.1 $ 9,332.5 $ 13,515.6 $ 15,658.4 ============= ============= ============= ============= ============= ============= Mutual Funds - ------------ Deposits and reinvestments $ 3,031.2 $ 1,787.1 $ 2,567.6 $ 2,030.4 $ 1,673.2 $ 1,489.2 Redemptions and withdrawals (2,883.7) (2,114.2) (2,828.7) (2,444.0) (2,004.5) (1,683.6) ------------- ------------- ------------- ------------- ------------- ------------- Net Flows 147.5 (327.1) (261.1) (413.6) (331.3) (194.4) Performance 538.0 750.9 1,522.2 184.1 805.9 1,588.8 Money market funds net change in AUM 1,789.7 (1,445.5) (1,382.8) (28.4) (28.9) (45.2) Acquisitions (dispositions) / Other (52.4) 9,988.5 9,838.3 120.1 105.7 (80.6) ------------- ------------- ------------- ------------- ------------- ------------- Net Change in AUM 2,422.8 8,966.8 9,716.6 (137.8) 551.4 1,268.6 Assets under management, beginning of period 21,863.8 12,147.2 12,147.2 12,285.0 11,733.6 10,465.0 ------------- ------------- ------------- ------------- ------------- ------------- Assets under management, end of period $ 24,286.6 $ 21,114.0 $ 21,863.8 $ 12,147.2 $ 12,285.0 $ 11,733.6 ============= ============= ============= ============= ============= ============= INSTITUTIONAL PRODUCTS: Deposits and reinvestments $ 905.9 $ 1,091.1 $ 1,609.1 $ 5,545.1 $ 2,885.2 $ 3,230.7 Redemptions and withdrawals (1,554.8) (2,848.2) (3,504.3) (6,599.1) (5,389.2) (3,505.3) ------------- ------------- ------------- ------------- ------------- ------------- Net Flows (648.9) (1,757.1) (1,895.2) (1,054.0) (2,504.0) (274.6) Performance 502.8 744.4 1,089.2 367.2 1,140.5 2,333.0 Acquisitions (dispositions) / Other(2) (901.0) (170.2) (332.6) (63.3) 234.3 (76.0) ------------- ------------- ------------- ------------- ------------- ------------- Net Change in AUM (1,047.1) (1,182.9) (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 $ 11,247.7 $ 12,250.5 $ 12,294.8 $ 13,433.4 $ 14,183.5 $ 15,312.7 ============= ============= ============= ============= ============= ============= STRUCTURED FINANCE PRODUCTS: Deposits and reinvestments $ 2,290.0 $ 1,923.5 $ 2,423.5 $ 1,002.3 $ 1.7 $ 1.1 Redemptions and withdrawals (337.2) (822.9) (1,141.6) (1,157.9) (659.2) (303.1) ------------- ------------- ------------- ------------- ------------- ------------- Net Flows 1,952.8 1,100.6 1,281.9 (155.6) (657.5) (302.0) Performance (1,000.9) 116.4 171.4 (258.9) 26.0 327.0 ------------- ------------- ------------- ------------- ------------- ------------- Net Change in AUM 951.9 1,217.0 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 $ 4,915.0 $ 3,726.8 $ 3,963.1 $ 2,509.8 $ 2,924.3 $ 3,555.8 ============= ============= ============= ============= ============= ============= TOTAL: Deposits and reinvestments $ 7,182.0 $ 5,663.5 $ 7,741.4 $ 10,338.1 $ 6,670.0 $ 6,989.3 Redemptions and withdrawals (6,817.2) (9,559.9) (11,772.2) (15,923.8) (13,255.9) (8,148.6) ------------- ------------- ------------- ------------- ------------- ------------- Net Flows 364.8 (3,896.4) (4,030.8) (5,585.7) (6,585.9) (1,159.3) Performance 304.7 1,895.4 3,376.7 229.8 2,922.7 5,786.3 Money market funds net change in AUM 1,789.7 (1,445.5) (1,382.8) (28.4) (28.9) (45.2) Acquisitions (dispositions) / Other (953.4) 9,889.3 9,576.8 (101.2) 340.0 (156.6) ------------- ------------- ------------- ------------- ------------- ------------- Net Change in AUM 1,505.8 6,442.8 7,539.9 (5,485.5) (3,352.1) 4,425.2 Assets under management, beginning of period 44,962.8 37,422.9 37,422.9 42,908.4 46,260.5 41,835.3 ------------- ------------- ------------- ------------- ------------- ------------- Assets under management, end of period $ 46,468.6 $ 43,865.7 $ 44,962.8 $ 37,422.9 $ 42,908.4 $ 46,260.5 ============= ============= ============= ============= ============= ============= * Variable Products Change in AUM (included in Institutional Products) $ (902.1) $ (117.3) $ 106.5 $ (342.3) $ 211.6 $ 200.4 ============= ============= ============= ============= ============= ============= Money Market balances(1) $ 7,490.8 $ 5,638.4 $ 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 Third Quarter 2007 (unaudited) ($ in millions)
2006 2007 ------------------------------------------------------- ----------------------------------------- March June September December March June September ------------- ------------- ------------- ------------- ------------- ------------- ------------- RETAIL PRODUCTS: Managed Accounts - ---------------- Deposits and reinvestments $ 329.1 $ 316.1 $ 216.5 $ 279.5 $ 290.4 $ 365.5 $ 299.0 Redemptions and withdrawals (1,465.9) (1,339.1) (969.6) (523.0) (728.1) (830.6) (482.8) ------------- ------------- ------------- ------------- ------------- ------------- ------------- Net Flows (1,136.8) (1,023.0) (753.1) (243.5) (437.7) (465.1) (183.8) Performance 461.4 (347.6) 169.9 310.2 125.6 74.8 64.4 Acquisitions (dispositions) / Other 71.1 ------------- ------------- ------------- ------------- ------------- ------------- ------------- Net Change in AUM (604.3) (1,370.6) (583.2) 66.7 (312.1) (390.3) (119.4) Assets under management, beginning of period 9,332.5 8,728.2 7,357.6 6,774.4 6,841.1 6,529.0 6,138.7 ------------- ------------- ------------- ------------- ------------- ------------- ------------- Assets under management, end of period $ 8,728.2 $ 7,357.6 $ 6,774.4 $ 6,841.1 $ 6,529.0 $ 6,138.7 $ 6,019.3 ============= ============= ============= ============= ============= ============= ============= Mutual Funds - ------------ Deposits and reinvestments $ 640.5 $ 417.4 $ 729.3 $ 780.4 $ 1,160.7 $ 1,169.3 $ 701.2 Redemptions and withdrawals (620.9) (612.0) (881.3) (714.5) (881.8) (978.9) (1,023.0) ------------- ------------- ------------- ------------- ------------- ------------- ------------- Net Flows 19.6 (194.6) (152.0) 65.9 278.9 190.4 (321.8) Performance 349.4 (174.4) 575.8 771.4 298.5 51.0 188.5 Money market funds net change in AUM (0.1) (276.0) (1,169.4) 62.7 (364.2) 214.8 1,939.1 Acquisitions (dispositions) / Other 185.0 9,824.4 (20.9) (150.2) (14.0) (52.0) 13.6 ------------- ------------- ------------- ------------- ------------- ------------- ------------- Net Change in AUM 553.9 9,179.4 (766.5) 749.8 199.2 404.2 1,819.4 Assets under management, beginning of period 12,147.2 12,701.1 21,880.5 21,114.0 21,863.8 22,063.0 22,467.2 ------------- ------------- ------------- ------------- ------------- ------------- ------------- Assets under management, end of period $ 12,701.1 $ 21,880.5 $ 21,114.0 $ 21,863.8 $ 22,063.0 $ 22,467.2 $ 24,286.6 ============= ============= ============= ============= ============= ============= ============= INSTITUTIONAL PRODUCTS: Deposits and reinvestments $ 574.6 $ 238.8 $ 277.7 $ 518.0 $ 281.3 $ 364.4 $ 260.2 Redemptions and withdrawals (940.6) (1,467.4) (440.1) (656.2) (513.3) (474.9) (566.6) ------------- ------------- ------------- ------------- ------------- ------------- ------------- Net Flows (366.0) (1,228.6) (162.4) (138.2) (232.0) (110.5) (306.4) Performance 283.7 (65.7) 526.4 344.8 233.8 17.4 251.6 Acquisitions (dispositions) / Other(2) (14.2) (114.8) (41.3) (162.3) (261.9) 69.1 (708.2) ------------- ------------- ------------- ------------- ------------- ------------- ------------- Net Change in AUM (96.5) (1,409.1) 322.7 44.3 (260.1) (24.0) (763.0) Assets under management, beginning of period 13,433.4 13,336.9 11,927.8 12,250.5 12,294.8 12,034.7 12,010.7 ------------- ------------- ------------- ------------- ------------- ------------- ------------- Assets under management, end of period $ 13,336.9 $ 11,927.8 $ 12,250.5 $ 12,294.8 $ 12,034.7 $ 12,010.7 $ 11,247.7 ============= ============= ============= ============= ============= ============= ============= STRUCTURED FINANCE PRODUCTS: Deposits and reinvestments $ 13.8 $ 233.5 $ 1,676.2 $ 500.0 $ 1,500.0 $ 790.0 $ 0.0 Redemptions and withdrawals (196.9) (468.1) (157.9) (318.7) (299.0) (20.6) (17.6) ------------- ------------- ------------- ------------- ------------- ------------- ------------- Net Flows (183.1) (234.6) 1,518.3 181.3 1,201.0 769.4 (17.6) Performance 37.4 14.4 64.6 55.0 (73.7) (117.9) (809.3) ------------- ------------- ------------- ------------- ------------- ------------- ------------- Net Change in AUM (145.7) (220.2) 1,582.9 236.3 1,127.3 651.5 (826.9) Assets under management, beginning of period 2,509.8 2,364.1 2,143.9 3,726.8 3,963.1 5,090.4 5,741.9 ------------- ------------- ------------- ------------- ------------- ------------- ------------- Assets under management, end of period $ 2,364.1 $ 2,143.9 $ 3,726.8 $ 3,963.1 $ 5,090.4 $ 5,741.9 $ 4,915.0 ============= ============= ============= ============= ============= ============= ============= TOTAL: Deposits and reinvestments $ 1,558.0 $ 1,205.8 $ 2,899.7 $ 2,077.9 $ 3,232.4 $ 2,689.2 $ 1,260.4 Redemptions and withdrawals (3,224.3) (3,886.6) (2,448.9) (2,212.4) (2,422.2) (2,305.0) (2,090.0) ------------- ------------- ------------- ------------- ------------- ------------- ------------- Net Flows (1,666.3) (2,680.8) 450.8 (134.5) 810.2 384.2 (829.6) Performance 1,131.9 (573.3) 1,336.7 1,481.4 584.2 25.3 (304.8) Money market funds net change in AUM (0.1) (276.0) (1,169.4) 62.7 (364.2) 214.8 1,939.1 Acquisitions (dispositions) / Other 241.9 9,709.6 (62.2) (312.5) (275.9) 17.1 (694.6) ------------- ------------- ------------- ------------- ------------- ------------- ------------- Net Change in AUM (292.6) 6,179.5 555.9 1,097.1 754.3 641.4 110.1 Assets under management, beginning of period 37,422.9 37,130.3 43,309.8 43,865.7 44,962.8 45,717.1 46,358.5 ------------- ------------- ------------- ------------- ------------- ------------- ------------- Assets under management, end of period $ 37,130.3 $ 43,309.8 $ 43,865.7 $ 44,962.8 $ 45,717.1 $ 46,358.5 $ 46,468.6 ============= ============= ============= ============= ============= ============= ============= *Variable Products Change in AUM (included in Institutional Products) $ 27.7 $ (188.5) $ 43.5 $ 223.8 $ (10.2) $ 5.4 $ (897.3) ============= ============= ============= ============= ============= ============= ============= Money Market balances(1) $ 101.4 $ 6,807.8 $ 5,638.4 $ 5,701.1 $ 5,336.9 $ 5,551.7 $ 7,490.8 ============= ============= ============= ============= ============= ============= =============
(1) Money Market balances included in Mutual Funds above. (2) Effective for the 4th quarter of 2006, "Other" includes the net change in AUM during the quarter of institutional cash management accounts. This treatment is consistent with the treatment of money market mutual funds. 19 THE PHOENIX COMPANIES, INC. VENTURE CAPITAL SEGMENT(1) Third 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 Third Quarter 2007 (unaudited) ($ in millions)
YTD September December 31, ---------------------------- ---------------------------------------------------------- 2007 2006 2006 2005 2004 2003 ------------- ------------- ------------- ------------- ------------- ------------- OPERATING INCOME Corporate Investment Income $ 4.8 $ 3.2 $ 4.6 $ (0.8) $ 0.4 $ 4.3 Interest Expense on Indebtedness (32.6) (36.8) (49.2) (46.6) (40.8) (39.6) Corporate Expenses (10.3) (13.1) (17.3) (24.6) (18.9) (11.0) Other 3.1 1.1 1.6 2.4 0.2 (1.5) ------------- ------------- ------------- ------------- ------------- ------------- Operating Loss, before income taxes (35.0) (45.6) (60.3) (69.6) (59.1) (47.8) Applicable Income Tax Benefit (24.0) (15.7) (20.6) (26.3) (22.9) (18.8) ------------- ------------- ------------- ------------- ------------- ------------- OPERATING LOSS (11.0) (29.9) (39.7) (43.3) (36.2) (29.0) Net Realized Investment Gains (Losses) 9.0 12.2 21.0 4.4 (6.5) 5.8 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 (0.5) (0.4) (4.0) (13.4) (1.9) ------------- ------------- ------------- ------------- ------------- ------------- NET INCOME (LOSS) $ (2.0) $ (18.2) $ (19.1) $ (49.9) $ (21.3) $ (80.1) ============= ============= ============= ============= ============= =============
21 THE PHOENIX COMPANIES, INC. CORPORATE AND OTHER Third Quarter 2007 (unaudited) ($ in millions) Quarters Ended
2006 2007 ------------------------------------------------------- ----------------------------------------- March June September December March June September ------------- ------------- ------------- ------------- ------------- ------------- ------------- OPERATING INCOME Corporate Investment Income $ 0.2 $ 0.8 $ 2.2 $ 1.4 $ 1.5 $ 1.5 $ 1.8 Interest Expense on Indebtedness (12.4) (12.3) (12.1) (12.4) (9.5) (11.6) (11.5) Corporate Expenses (5.5) (3.2) (4.4) (4.2) (2.9) (5.5) (1.9) Other 0.3 0.8 0.5 2.9 0.2 ------------- ------------- ------------- ------------- ------------- ------------- ------------- Operating Loss, before income taxes (17.4) (13.9) (14.3) (14.7) (8.0) (15.6) (11.4) Applicable Income Tax Benefit (6.1) (4.0) (5.6) (4.9) (3.2) (14.6) (6.2) ------------- ------------- ------------- ------------- ------------- ------------- ------------- OPERATING LOSS (11.3) (9.9) (8.7) (9.8) (4.8) (1.0) (5.2) Net Realized Investment Gains (Losses) 14.4 2.5 (4.7) 8.8 11.8 (1.8) (1.0) Management Restructuring and Early Retirement Costs (0.5) 0.1 ------------- ------------- ------------- ------------- ------------- ------------- ------------- NET INCOME (LOSS) $ 3.1 $ (7.9) $ (13.4) $ (0.9) $ 7.0 $ (2.8) $ (6.2) ============= ============= ============= ============= ============= ============= =============
22 THE PHOENIX COMPANIES, INC. CONSOLIDATED STATEMENT OF INCOME - GAAP FORMAT(1) Third Quarter 2007 (unaudited) ($ in millions)
YTD September December 31, ---------------------------- ---------------------------------------------------------- 2007 2006 2006 2005 2004 2003 ------------- ------------- ------------- ------------- ------------- ------------- REVENUES Premiums $ 585.3 $ 627.3 $ 839.7 $ 928.7 $ 990.6 $ 1,042.2 Insurance, Investment Management and Product Fees 471.0 416.7 560.6 501.8 544.9 537.6 Mutual Fund Ancillary Fees and Other Revenue 50.9 40.6 54.8 46.5 46.9 44.8 Net Investment Income 802.8 769.3 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) 26.5 53.7 76.5 34.2 (0.8) (98.5) ------------- ------------- ------------- ------------- ------------- ------------- Total Revenues 1,936.5 1,907.6 2,583.8 2,613.8 2,743.2 2,633.5 ------------- ------------- ------------- ------------- ------------- ------------- BENEFITS AND EXPENSES Policy Benefits and Increase in Policy Liabilities 964.6 1,000.5 1,331.5 1,376.7 1,422.2 1,454.0 Policyholder Dividends 292.2 289.9 399.1 364.4 404.7 418.8 Policy Acquisition Cost Amortization 136.5 118.2 148.7 132.1 110.2 94.1 Intangible Asset Impairments 32.5 32.5 10.6 Intangible Asset Amortization 22.6 24.2 32.0 33.8 33.8 33.2 Interest Expense on Indebtedness 32.6 36.8 49.2 46.6 40.8 39.6 Interest Expense on Non-recourse Collateralized Obligations 12.0 14.3 18.7 29.4 33.6 48.9 Other Operating Expenses 325.1 319.0 428.3 482.8 560.7 565.1 ------------- ------------- ------------- ------------- ------------- ------------- Total Expenses 1,785.6 1,835.4 2,440.0 2,476.4 2,606.0 2,653.7 ------------- ------------- ------------- ------------- ------------- ------------- Income (Loss) from Continuing Operations before Income Taxes, Minority Interest and equity in undistributed earnings (losses) of affiliates 150.9 72.2 143.8 137.4 137.2 (20.2) Applicable Income Taxes (Benefit) 30.9 16.2 43.3 27.7 40.5 (18.3) ------------- ------------- ------------- ------------- ------------- ------------- Income (Loss) from Continuing Operations before Minority Interest and equity in undistributed earnings (losses) of affiliates 120.0 56.0 100.5 109.7 96.7 (1.9) Minority Interest in Net Income of Subsidiaries (0.6) (0.4) (0.6) (0.6) (0.4) Equity in undistributed earnings (losses) of affiliates (10.4) (1.8) ------------- ------------- ------------- ------------- ------------- ------------- Income (Loss) from Continuing Operations 119.4 55.6 99.9 109.1 86.3 (4.1) Discontinued Operations Income (Loss) from Discontinued Operations (0.7) 0.1 (2.1) ------------- ------------- ------------- ------------- ------------- ------------- Net Income (Loss) $ 119.4 $ 55.6 $ 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) Third Quarter 2007 (unaudited) ($ in millions) Quarters Ended
2006 2007 ------------------------------------------------------- ----------------------------------------- March June September December March June September ------------- ------------- ------------- ------------- ------------- ------------- ------------- REVENUES Premiums $ 207.5 $ 207.7 $ 212.1 $ 212.4 $ 194.7 $ 193.1 $ 197.5 Insurance, Investment Management and Product Fees 135.7 136.5 144.5 143.9 150.7 155.8 164.5 Mutual Fund Ancillary Fees and Other Revenue 12.0 12.4 16.2 14.2 16.7 17.2 17.0 Net Investment Income 251.2 256.3 261.8 282.9 278.0 263.7 261.1 Net Realized Investment Gains (Losses) 33.2 17.4 3.1 22.8 24.5 (1.9) 3.9 ------------- ------------- ------------- ------------- ------------- ------------- ------------- Total Revenues 639.6 630.3 637.7 676.2 664.6 627.9 644.0 ------------- ------------- ------------- ------------- ------------- ------------- ------------- BENEFITS AND EXPENSES Policy Benefits and Increase in Policy Liabilities 333.9 333.3 333.3 331.0 317.3 316.5 330.8 Policyholder Dividends 106.8 95.1 88.0 109.2 103.8 90.3 98.1 Policy Acquisition Cost Amortization 30.0 43.5 44.7 30.5 43.5 45.9 47.1 Intangible Asset Impairments 32.5 Intangible Asset Amortization 8.0 8.5 7.7 7.8 7.6 7.5 7.5 Interest Expense on Indebtedness 12.4 12.3 12.1 12.4 9.5 11.6 11.5 Interest Expense on Non-recourse Collateralized Obligations 4.4 5.1 4.8 4.4 4.0 4.1 3.9 Other Operating Expenses 112.7 104.7 101.6 109.3 106.7 116.0 102.4 ------------- ------------- ------------- ------------- ------------- ------------- ------------- Total Expenses 640.7 602.5 592.2 604.6 592.4 591.9 601.3 ------------- ------------- ------------- ------------- ------------- ------------- ------------- 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 36.0 42.7 Applicable Income Taxes (Benefit) (2.8) 8.0 11.0 27.1 21.2 2.6 7.1 ------------- ------------- ------------- ------------- ------------- ------------- ------------- Income from Continuing Operations before Minority Interest and equity in undistributed earnings of affiliates 1.7 19.8 34.5 44.5 51.0 33.4 35.6 Minority Interest in Net Income of Subsidiaries (0.2) (0.2) (0.2) (0.4) (0.2) ------------- ------------- ------------- ------------- ------------- ------------- ------------- Net Income $ 1.7 $ 19.6 $ 34.3 $ 44.3 $ 50.6 $ 33.2 $ 35.6 ============= ============= ============= ============= ============= ============= =============
(1) Certain reclassifications have been made to prior periods to conform with the current presentation. 24 THE PHOENIX COMPANIES, INC. CONSOLIDATING THIRD QUARTER 2007 INCOME STATEMENT Third Quarter 2007 (unaudited) ($ in millions) Year-to-Date September 30, 2007
Operating Income Exclusions from Operating Income ----------------------------------------- ----------------------------------------- Realized Life & Asset Corporate & Investment Intra-Segment Consolidated Annuity Management Other Gains/Losses Other Eliminations ------------- ------------- ------------- ------------- ------------- ------------- ------------- REVENUES Premiums $ 585.3 $ 585.4 $ (0.1) Insurance, Investment Management and Product Fees 471.0 360.9 $ 110.8 $ (0.3) $ (0.4) Mutual Fund Ancillary Fees and Other Revenue 50.9 50.9 Net Investment Income 802.8 765.1 1.2 25.6 1.9 9.0 Net Realized Investment Gains 26.5 $ 26.5 ------------- ------------- ------------- ------------- ------------- ------------- ------------- Total Revenues 1,936.5 1,711.4 162.9 25.3 26.5 1.8 8.6 ------------- ------------- ------------- ------------- ------------- ------------- ------------- BENEFITS AND EXPENSES Policy Benefits and Increase in Policy Liabilities 964.6 959.4 5.2 Policyholder Dividends 292.2 285.9 6.4 (0.1) Policy Acquisition Cost Amortization 136.5 136.1 0.3 0.1 Intangible Asset Impairments 22.6 22.6 Intangible Asset Amortization Interest Expense on Indebtedness 32.6 32.6 Interest Expense on Non-recourse Collateralized Obligations 12.0 12.0 Other Operating Expenses 325.1 166.7 134.8 10.5 3.4 1.1 8.6 ------------- ------------- ------------- ------------- ------------- ------------- ------------- Total Expenses 1,785.6 1,548.1 157.4 60.3 10.1 1.1 8.6 ------------- ------------- ------------- ------------- ------------- ------------- ------------- Income (Loss) from Continuing Operations before Income Taxes Minority Interest and equity in undistributed earnings (losses) of affiliates 150.9 163.3 5.5 (35.0) 16.4 0.7 0.0 Applicable Income Taxes (Benefit) 30.9 47.9 3.1 (24.0) 3.8 0.1 ------------- ------------- ------------- ------------- ------------- ------------- ------------- Income (Loss) from Continuing Operations before Minority Interest and equity undistributed earnings (losses) of affiliates 120.0 115.4 2.4 (11.0) 12.6 0.6 0.0 ------------- ------------- ------------- ------------- ------------- ------------- ------------- Minority Interest in Net Income of Subsidiaries (0.6) (0.6) ------------- ------------- ------------- ------------- ------------- ------------- ------------- Income (Loss) from Continuing Operations $ 119.4 $ 115.4 $ 2.4 $ (11.0) $ 12.6 $ 0.0 $ 0.0 ============= ============= ============= ============= ============= ============= =============
25 THE PHOENIX COMPANIES, INC. CONDENSED CONSOLIDATED BALANCE SHEET -- PRELIMINARY Third Quarter 2007 (unaudited) ($ in millions, except par value)
September December 31, -------------- ---------------------------------------------------------- 2007 2006 2005 2004 2003 -------------- ------------- ------------- ------------- ------------- ASSETS: Available-for-Sale Debt Securities, at fair value $ 12,161.3 $ 12,696.8 $ 13,404.6 $ 13,476.3 $ 13,273.0 Available-for-Sale Equity Securities, at fair value 204.4 187.1 181.8 304.3 312.0 Trading Equity Securities, at fair value 87.3 Mortgage Loans, at unpaid principal balances 17.0 71.9 128.6 207.9 284.1 Policy Loans, at unpaid principal balances 2,366.6 2,322.0 2,245.0 2,196.7 2,241.4 Venture Capital Partnerships, at equity in net assets 164.7 116.8 145.1 255.3 234.9 Affiliate Equity and Debt Securities, at cost plus equity in undistributed earnings 47.5 Other Investments 386.9 308.3 310.6 371.8 402.0 -------------- ------------- ------------- ------------- ------------- 15,300.9 15,702.9 16,415.7 16,899.6 16,794.9 Available-for-Sale Investments Pledged as Collateral, at fair value 225.4 267.8 304.4 1,278.8 1,350.0 -------------- ------------- ------------- ------------- ------------- Total Investments 15,526.3 15,970.7 16,720.1 18,178.4 18,144.9 Cash and Cash Equivalents 362.8 404.9 301.5 435.0 447.9 Deferred Policy Acquisition Costs 1,948.3 1,752.7 1,556.0 1,429.9 1,367.7 Goodwill and Other Intangible Assets 690.7 708.6 763.5 735.6 755.0 Other Assets 729.0 733.9 652.9 633.4 760.5 Separate Account Assets 10,388.3 9,458.6 7,722.2 6,950.3 6,083.2 -------------- ------------- ------------- ------------- ------------- Total Assets $ 29,645.4 $ 29,029.4 $ 27,716.2 $ 28,362.6 $ 27,559.2 ============== ============= ============= ============= ============= LIABILITIES: Policy Liabilities and Accruals $ 13,615.0 $ 13,533.4 $ 13,246.2 $ 13,132.4 $ 13,088.6 Policyholder Deposit Funds 1,862.2 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 530.3 543.5 538.2 587.2 557.1 Non-recourse Collateralized Debt Obligation Liabilities 315.5 344.0 389.9 1,355.2 1,472.0 Separate Account Liabilities 10,388.3 9,458.6 7,722.2 6,950.3 6,083.2 -------------- ------------- ------------- ------------- ------------- Total Liabilities and minority interest 27,339.0 26,793.3 25,709.1 26,340.2 25,611.4 -------------- ------------- ------------- ------------- ------------- STOCKHOLDERS' EQUITY: Common stock, $.01 par value, 1.0 billion shares authorized; 114,206,791 shares outstanding (September 30, 2007) 1.3 1.3 1.1 1.0 1.0 Additional paid in capital 2,612.3 2,600.2 2,437.6 2,431.6 2,427.8 Accumulated Earnings (Deficit) (14.3) (111.3) (193.1) (285.7) (355.3) Treasury stock, at cost: 11,313,564 shares (September 30, 2007) (179.5) (179.5) (179.5) (182.6) (189.4) Accumulated Other Comprehensive Income (Loss) (113.4) (74.6) (59.0) 58.1 63.7 -------------- ------------- ------------- ------------- ------------- Total Stockholders' Equity 2,306.4 2,236.1 2,007.1 2,022.4 1,947.8 -------------- ------------- ------------- ------------- ------------- Total Liabilities, Minority Interest and Stockholders' Equity $ 29,645.4 $ 29,029.4 $ 27,716.2 $ 28,362.6 $ 27,559.2 ============== ============= ============= ============= =============
26 THE PHOENIX COMPANIES, INC. GENERAL ACCOUNT INVESTMENT PORTFOLIO SUMMARY(1) Third Quarter 2007 (unaudited) ($ millions)
Total Debt Securities Public Debt Securities Private Debt Securities ---------------------------- ---------------------------- ---------------------------- 09/30/07 12/31/06 09/30/07 12/31/06 09/30/07 12/31/06 ------------- ------------- ------------- ------------- ------------- ------------- DEBT SECURITIES BY CREDIT QUALITY (CARRYING VALUE) AAA/AA/A $ 7,552.2 $ 7,897.2 $ 6,010.0 $ 6,214.1 $ 1,542.2 $ 1,683.1 BBB 3,668.5 3,743.7 2,210.6 2,345.4 1,457.9 1,398.3 ------------- ------------- ------------- ------------- ------------- ------------- Total Investment Grade 11,220.7 11,640.9 8,220.6 8,559.5 3,000.1 3,081.4 ------------- ------------- ------------- ------------- ------------- ------------- BB 656.0 765.7 549.2 665.7 106.8 100.0 B 222.5 221.4 177.0 175.2 45.5 46.2 CCC and Lower 52.8 53.2 30.9 38.7 21.9 14.5 In or Near Default 9.3 15.6 7.7 10.1 1.6 5.5 ------------- ------------- ------------- ------------- ------------- ------------- Total Debt Securities $ 12,161.3 $ 12,696.8 $ 8,985.4 $ 9,449.2 $ 3,175.9 $ 3,247.6 ============= ============= ============= ============= ============= ============= % Below Investment Grade 7.7% 8.3% 8.5% 9.4% 5.5% 5.1% - ------------------------------------------------------------------------------------------------------------------------------------ UNREALIZED GAINS AND LOSSES ON DEBT AND EQUITY SECURITIES As of 9/30/07 Total Outside Closed Block Closed Block ---------------------------- ---------------------------- ---------------------------- Gains Losses Gains Losses Gains Losses ------------- ------------- ------------- ------------- ------------- ------------- Total Debt Securities $ 209.1 $ (328.5) $ 56.9 $ (168.3) $ 152.2 $ (160.2) Equity Securities 39.4 (1.7) 8.8 (0.3) 30.6 (1.4) ------------- ------------- ------------- ------------- ------------- ------------- Total Unrealized Gains (Losses) 248.5 (330.2) 65.7 (168.6) 182.8 (161.6) ------------- ------------- ------------- ------------- ------------- ------------- Applicable PDO 182.8 (161.6) 182.8 (161.6) Applicable DAC (Credit) 52.8 (74.0) 52.8 (74.0) Applicable Deferred Income Tax (Benefit) 4.5 (33.1) 4.5 (33.1) ------------- ------------- ------------- ------------- ------------- ------------- Total Offsets to Net Unrealized Gains (Losses) 240.1 (268.7) 57.3 (107.1) 182.8 (161.6) ------------- ------------- ------------- ------------- ------------- ------------- Net Unrealized Gains and Losses $ 8.4 $ (61.5) $ 8.4 $ (61.5) $ 0.0 $ 0.0 ============= ============= ============= ============= ============= ============= Net Unrealized Gains $ (53.1) $ (53.1) $ 0.0 ============= ============= =============
(1) Excludes debt and equity securities pledged as collateral. 27 THE PHOENIX COMPANIES, INC. GENERAL ACCOUNT GAAP NET INVESTMENT INCOME YIELDS(1) Third Quarter 2007 (unaudited) ($ in millions) Quarters ended
YTD September December 31, ---------------------------- ---------------------------------------------------------- 2007 2006 2006 2005 2004 2003 ------------- ------------- ------------- ------------- ------------- ------------- GAAP NET INVESTMENT INCOME Debt Securities $ 584.6 $ 593.3 $ 800.7 $ 804.6 $ 772.1 $ 765.5 Equity Securities 5.4 3.2 7.0 7.5 4.5 4.6 Mortgages 1.4 4.8 6.2 20.2 22.5 32.6 Policy Loans 133.4 126.3 169.3 165.8 167.1 171.7 Venture Capital 22.0 0.3 3.3 23.8 25.5 49.1 Cash & Cash Equivalents 13.9 12.1 16.3 7.6 4.9 7.0 Other Income 5.3 Other Investments (2) 35.0 21.4 40.0 47.8 48.8 35.0 ------------- ------------- ------------- ------------- ------------- ------------- Total Cash and Invested Assets 801.0 761.4 1,042.8 1,077.3 1,045.4 1,065.5 ------------- ------------- ------------- ------------- ------------- ------------- Investment Expenses 10.3 6.7 9.6 8.6 9.8 10.0 ------------- ------------- ------------- ------------- ------------- ------------- Total Net Investment Income $ 790.7 $ 754.7 $ 1,033.2 $ 1,068.7 $ 1,035.6 $ 1,055.5 ============= ============= ============= ============= ============= ============= ANNUALIZED YIELDS Debt Securities 6.6% 6.4% 6.5% 6.2% 5.9% 6.0% Equity Securities 3.6% 2.2% 3.7% 3.0% 1.3% 1.4% Mortgages 11.3% 7.3% 8.1% 15.3% 11.0% 11.2% Policy Loans 7.8% 7.6% 7.6% 7.7% 7.9% 8.0% Venture Capital 20.4% 0.3% 2.7% 12.8% 10.9% 23.0% Cash & Cash Equivalents 5.3% 4.8% 4.7% 5.2% 1.1% 1.3% Other Investments (2) 13.7% 9.3% 13.6% 16.4% 7.5% 10.5% ------------- ------------- ------------- ------------- ------------- ------------- Total Cash and Invested Assets 7.0% 6.5% 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 6.9% 6.5% 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) Third Quarter 2007 (unaudited) ($ in millions) Quarters ended
2006 2007 ------------------------------------------------------- ----------------------------------------- March June September December March June September ------------- ------------- ------------- ------------- ------------- ------------- ------------- GAAP NET INVESTMENT INCOME Debt Securities $ 195.1 $ 199.0 $ 199.2 $ 207.4 $ 194.0 $ 194.9 $ 195.7 Equity Securities 0.5 1.3 1.4 3.8 2.4 2.1 0.9 Mortgages 0.9 2.3 1.6 1.4 0.7 0.4 0.3 Policy Loans 41.1 41.5 43.7 43.0 44.1 43.8 45.5 Venture Capital (2.4) 1.4 1.3 3.0 7.8 6.3 7.9 Cash & Cash Equivalents 3.3 4.5 4.3 4.2 4.9 4.7 4.3 Other Income 4.6 1.2 (0.5) Other Investments(2) 10.3 3.0 8.1 18.6 19.0 9.7 6.3 ------------- ------------- ------------- ------------- ------------- ------------- ------------- Total Cash and Invested Assets 248.8 253.0 259.6 281.4 277.5 263.1 260.4 ------------- ------------- ------------- ------------- ------------- ------------- ------------- Investment Expenses 2.1 1.9 2.7 2.9 3.5 3.6 3.2 ------------- ------------- ------------- ------------- ------------- ------------- ------------- Total Net Investment Income $ 246.7 $ 251.1 $ 256.9 $ 278.5 $ 274.0 $ 259.5 $ 257.2 ============= ============= ============= ============= ============= ============= ============= ANNUALIZED YIELDS Debt Securities 6.1% 6.4% 6.5% 6.7% 6.3% 6.4% 6.6% Equity Securities 1.1% 2.9% 2.9% 8.1% 5.2% 4.3% 1.8% Mortgages 3.0% 9.2% 7.3% 7.3% 6.4% 9.2% 7.1% Policy Loans 7.6% 7.5% 7.9% 7.7% 7.9% 7.8% 8.0% Venture Capital -7.1% 4.8% 4.3% 10.3% 27.5% 18.8% 22.2% Cash & Cash Equivalents 4.1% 5.0% 5.1% 4.9% 5.4% 5.5% 4.9% Other Investments(2) 13.6% 3.7% 10.6% 26.9% 26.6% 12.1% 7.2% ------------- ------------- ------------- ------------- ------------- ------------- ------------- Total Cash and Invested Assets 6.2% 6.4% 6.7% 7.2% 7.2% 6.9% 6.9% ------------- ------------- ------------- ------------- ------------- ------------- ------------- Investment Expenses 0.1% 0.0% 0.1% 0.1% 0.1% 0.1% 0.1% ------------- ------------- ------------- ------------- ------------- ------------- ------------- Total Net Investment Income yields 6.1% 6.4% 6.6% 7.2% 7.1% 6.8% 6.8% ============= ============= ============= ============= ============= ============= =============
(1) Excludes debt and equity securities pledged as collateral. (2) Includes real estate, affiliates and other invested assets. 29 THE PHOENIX COMPANIES, INC. GENERAL ACCOUNT REALIZED INVESTMENT GAINS AND LOSSES Third Quarter 2007 (unaudited) ($ Millions)
YTD September December 31, ---------------------------- ---------------------------------------------------------- 2007 2006 2006 2005 2004 2003 ------------- ------------- ------------- ------------- ------------- ------------- REALIZED INVESTMENT GAINS AND LOSSES Debt Security Impairments $ (18.4) $ (4.9) $ (7.9) $ (31.2) $ (15.5) $ (76.1) Equity Security Impairments (0.4) (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 (0.8) (1.0) (1.2) (16.6) (8.3) Other Invested Asset Impairments (1.3) (3.3) (9.9) ------------- ------------- ------------- ------------- ------------- ------------- Total Impairment Losses (20.9) (4.9) (8.9) (35.3) (49.5) (210.8) ------------- ------------- ------------- ------------- ------------- ------------- Debt Security Net Transaction Gains (Losses) 14.3 33.9 42.0 (18.0) 28.4 64.7 Equity Security Net Transaction Gains (Losses) 6.7 4.9 21.9 2.9 14.6 49.2 Venture Capital Net Investment Gains (Losses) 4.2 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 10.4 10.4 3.7 Real Estate Net Transaction Gains (Losses) 1.4 (0.6) (0.8) (0.2) Settlement of HRH Stock Purchase Contracts 86.3 Other Invested Asset Net Transactions Gains (Losses) 8.5 2.8 5.5 6.6 6.3 9.6 Debt and Equity Securities Pledged as Collateral 1.4 (0.8) 2.5 ------------- ------------- ------------- ------------- ------------- ------------- Total Net Transactions Gains 47.4 58.6 85.4 69.5 48.7 112.3 ------------- ------------- ------------- ------------- ------------- ------------- Net Realized Investment Gains (Losses) 26.5 53.7 76.5 34.2 (0.8) (98.5) ============= ============= ============= ============= ============= ============= Closed Block Applicable PDO (Reduction) 6.4 38.6 46.0 (12.4) 3.7 (5.9) Applicable Deferred Acquisition Costs (Credit) 0.3 (3.9) (3.5) 17.6 (0.4) (4.1) Applicable Deferred Income Tax (Credit) 5.0 6.7 11.7 9.2 3.1 (35.6) ------------- ------------- ------------- ------------- ------------- ------------- Net Realized Investment Gains (Losses) Included in Net Income $ 14.8 $ 12.3 $ 22.3 $ 19.8 $ (7.2) $ (52.9) ============= ============= ============= ============= ============= =============
30 THE PHOENIX COMPANIES, INC. GENERAL ACCOUNT REALIZED INVESTMENT GAINS AND LOSSES Third Quarter 2007 (unaudited) ($ Millions) Quarters ended
2006 2007 ------------------------------------------------------- ----------------------------------------- March June September December March June September ------------- ------------- ------------- ------------- ------------- ------------- ------------- REALIZED INVESTMENT GAINS AND LOSSES Debt Security Impairments $ (0.9) $ (2.4) $ (1.6) $ (3.0) $ (1.0) $ (13.6) $ (3.8) Equity Security Impairments (0.1) (0.3) Mortgage Loan Impairments Affiliated Equity Securities Debt and Equity Securities Pledged as Collateral Impairments (0.8) Other Invested Asset Impairments (1.3) ------------- ------------- ------------- ------------- ------------- ------------- ------------- Total Impairment Losses (0.9) (2.4) (1.6) (3.0) (1.0) (14.5) (5.4) ------------- ------------- ------------- ------------- ------------- ------------- ------------- Debt Security Net Transaction Gains (Losses) 16.1 15.0 2.8 8.1 3.4 5.4 5.5 Equity Security Net Transaction Gains (Losses) 3.5 1.4 17.0 1.3 2.6 2.8 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 (0.1) Settlement of HRH Stock Purchase Contracts Other Invested Asset Net Transactions Gains (Losses) 2.2 0.4 0.2 2.7 4.0 4.0 0.5 Debt and Equity Securities Pledged as Collateral (1.0) 0.1 0.1 (0.2) 0.2 0.7 0.5 ------------- ------------- ------------- ------------- ------------- ------------- ------------- Total Net Transactions Gains 34.1 19.8 4.7 25.8 25.5 12.6 9.3 ------------- ------------- ------------- ------------- ------------- ------------- ------------- Net Realized Investment Gains (Losses) 33.2 17.4 3.1 22.8 24.5 (1.9) 3.9 ============= ============= ============= ============= ============= ============= ============= Closed Block Applicable PDO (Reduction) 19.2 13.4 6.0 7.4 6.6 (1.3) 1.1 Applicable Deferred Acquisition Costs (Credit) (2.6) (0.2) (1.1) 0.4 (0.4) 0.3 0.4 Applicable Deferred Income Tax (Credit) 6.2 1.2 (0.7) 5.0 3.9 (0.5) 0.7 ------------- ------------- ------------- ------------- ------------- ------------- ------------- Net Realized Investment Gains (Losses) Included in Net Income $ 10.4 $ 3.0 $ (1.1) $ 10.0 $ 14.4 $ (0.4) $ 1.7 ============= ============= ============= ============= ============= ============= =============
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