-----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, SO5Qi5CYQx9EZsGG/iZCeb0nEJdax2ciXKqRx0cHitfqqrM+8gP/bH0pNdhmukAr JYdNECe+oB+wbGKG9tJ45g== 0000949377-08-000008.txt : 20080212 0000949377-08-000008.hdr.sgml : 20080212 20080212172301 ACCESSION NUMBER: 0000949377-08-000008 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20071231 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20080212 DATE AS OF CHANGE: 20080212 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: 08599575 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 pnx_84977-8k.txt 8K 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): February 7, 2008 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 February 7, 2008, The Phoenix Companies, Inc. made available on its website its Financial Supplement for the quarter and year ended December 31, 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 and year ended December 31, 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: February 12, 2008 By: /s/ David R. Pellerin ---------------------------- Name: David R. Pellerin Title: Senior Vice President and Chief Accounting Officer EX-99.1 2 pnx_84977ex99-1.txt FINANCIAL SUPPLEMENT EXHIBIT 99.1 [LOGO] PHOENIX FINANCIAL SUPPLEMENT The Phoenix Companies, Inc. December 31, 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, please contact our Citigroup Keith Walsh transfer agent and registrar: Credit Suisse Securities (USA) Tom Gallagher The Phoenix Companies, Inc. C/O BNY Mellon Shareowner Services JP Morgan Jimmy Bhullar P.O. Box 358015, Pittsburgh, PA 15258 Keefe Bruyette & Woods, Inc. Jukka Lipponen Toll-free: 1-800-490-4258 TTY 1-888-269-5221 Langen McAlenney Robert Glasspiegel Fax: 1-212-815-2777, e-mail: shrrelations@bnymellon.com Lehman Brothers Eric Berg Web: www.bnymellon.com/shareowner/isd Merrill Lynch Edward Spehar Raymond James & Associates Steven Schwartz UBS Andrew Kligerman FOR MORE INFORMATION To receive additional information, including financial supplements and Securities and Exchange Commission filings along with access to other shareholder services, visit the Investor Relations Section on our Web site at Phoenixwm.com or contact our Investor Relations Department at: SHAREHOLDER INFORMATION SECURITY LISTINGS The Phoenix Companies, Inc. The common stock of The Phoenix Companies, Inc. Investor Relations is traded on the New York Stock Exchange (NYSE) under One American Row the symbol "PNX." Our 7.45 percent bond is traded on P.O. Box 5056, Hartford, CT 06102-5056 the NYSE under the symbol "PFX." Phone: 1-860-403-7100 Fax: 1-860-403-7880 e-mail: pnx.ir@phoenixwm.com
For more information on our products and services, call your Phoenix representative or visit our Web site at Phoenixwm.com. In managing our business, we analyze our performance on the basis of "operating income" which does not equate to net income as determined in accordance with GAAP. Rather, it is the measure of profit or loss used by our management to evaluate performance, allocate resources and manage our operations. We believe that operating income, and measures that are derived from or incorporate operating income, are appropriate measures that are useful to investors as well, because they identify the earnings of, and underlying profitability factors affecting, the ongoing operations of our business. Operating income is calculated by excluding realized investment gains (losses) and certain other items because we do not consider them to be related to our operating performance. The size and timing of realized investment gains (losses) are often subject to our discretion. Certain other items are also excluded from operating income if, in our opinion, they are not indicative of overall operating trends. The criteria used to identify an item that will be excluded from operating income include: whether the item is infrequent and is material to our income; or whether it results from a change in regulatory requirements, or relates to other unusual circumstances. Items excluded from operating income may vary from period to period. Because these items are excluded based on our discretion, inconsistencies in the application of our selection criteria may exist. Some of these items may be significant components of net income in accordance with GAAP. Accordingly, operating income, and other measures that are derived from or incorporate operating income, are not substitutes for net income, or measures that are derived from or incorporate net income, determined in accordance with GAAP and may be different from similarly titled measures of other companies. Within our Asset Management segment, we also consider earnings before interest, taxes, depreciation and amortization ("EBITDA"). Our management believes EBITDA provides additional perspective on the operating efficiency and profitability of the Asset Management segment. EBITDA represents pre-tax operating income before depreciation and amortization of goodwill and intangibles. Total operating return on equity ("ROE") is an internal performance measure used in the management of our operations, including our compensation plans and planning processes. Our management believes that this measure provides investors with a useful metric to assess our performance and the effectiveness of our use of historic capital. ROE is calculated by dividing (i) total operating income, by (ii) average equity, excluding accumulated OCI, FIN 46-R and discontinued operations. Total operating return on tangible equity ("return on tangible equity") is also an internal performance measure used in the evaluation of our operations. Our management believes that this measure provides investors with a useful metric to assess our performance and the effectiveness of our use of current capital. Return on tangible equity is calculated by dividing (i) total operating income, by (ii) average equity, excluding accumulated OCI, FIN 46-R, discontinued operations and the carrying value of goodwill and intangible assets. THE PHOENIX COMPANIES, INC. FINANCIAL SUPPLEMENT DECEMBER 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 Fourth 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 Fourth Quarter 2007 (unaudited) (amount in millions, except per share data)
For the Period Ended: December 31, ------------------------------------------------------------------------- 2007 2006 2005 2004 2003 ------------- ------------- ------------- ------------- ------------- BALANCE SHEET INFORMATION General Account Invested Assets $ 15,739.9 $ 16,107.8 $ 16,717.2 $ 17,334.6 $ 17,237.1 Separate Account Assets 10,820.3 9,458.6 7,722.2 6,950.3 6,083.2 Total Assets 30,206.9 29,007.2 27,712.3 28,359.3 27,559.2 Indebtedness 627.7 685.4 751.9 690.8 639.0 Total Stockholders' Equity 2,289.9 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 $ 2,481.0 $ 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) $ 2,399.9 $ 2,239.4 $ 2,017.1 Total Operating Return on Equity (1) 5.64% 3.89% 4.99% Average Tangible Common Equity (2) $ 1,703.1 $ 1,516.8 $ 1,280.4 Total Operating Return on Average Tangible Equity (2) 7.94% 5.74% 7.86% Debt to Total Capitalization 21.5% 23.5% 27.3% 25.5% 24.7% Book Value Per Share $ 20.04 $ 19.67 $ 21.10 $ 21.32 $ 20.62 Book Value Per Share, excluding SFAS 115 and other accumulated OCI $ 21.25 $ 20.33 $ 21.72 $ 20.70 $ 19.96 Book Value Per Share, excluding SFAS 115, other accumulated OCI and FIN 46-R $ 21.71 $ 20.80 $ 22.28 $ 21.27 $ 20.39 Period-end Common Shares Outstanding 114.3 113.7 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 $ 848.1 $ 932.4 $ 885.5 $ 814.6 $ 762.9 Asset Valuation Reserve (AVR) 192.6 187.9 210.8 213.6 198.6 ------------- ------------- ------------- ------------ ------------- Capital, Surplus, Surplus Notes and AVR $ 1,040.7 $ 1,120.3 $ 1,096.3 $ 1,028.2 $ 961.5 ============= ============= ============= ============ ============= Policyholder Dividend Liability $ 355.6 $ 348.9 $ 356.1 $ 403.3 $ 408.5 Interest Maintenance Reserve $ (44.4) $ (44.3) $ (23.1) $ (31.3) $ (30.2) Statutory Gain From Operations $ 115.2 $ 131.6 $ 106.2 $ 35.1 $ 69.7 Statutory Net Income $ 80.0 $ 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. December 2007 amounts are preliminary. 1 THE PHOENIX COMPANIES, INC. FINANCIAL HIGHLIGHTS Fourth Quarter 2007 (unaudited) (amount in millions, except per share data)
December 31, ------------------------------------------------------------------------- 2007 2006 2005 2004 2003 ------------- ------------- ------------- ------------- ------------- INCOME STATEMENT SUMMARY OPERATING INCOME Life Insurance $ 195.9 $ 209.7 $ 180.5 $ 130.1 $ 100.4 Annuities 19.8 4.0 12.0 12.7 (1.0) ------------- ------------- ------------- ------------- ------------- Life and Annuity Segment 215.7 213.7 192.5 142.8 99.4 Asset Management Segment 7.4 (28.6) (10.5) 0.1 (8.7) Venture Capital Segment (1) 14.8 19.3 36.2 Corporate and Other (47.5) (62.0) (71.3) (60.8) (45.3) ------------- ------------- ------------- ------------- ------------- TOTAL OPERATING INCOME, BEFORE INCOME TAXES 175.6 123.1 125.5 101.4 81.6 Applicable Income Taxes 40.3 36.0 24.9 22.5 21.8 ------------- ------------- ------------- ------------- ------------- TOTAL OPERATING INCOME 135.3 87.1 100.6 78.9 59.8 Net Realized Investment Gains (Losses) (8.9) 21.8 25.5 11.8 3.2 Realized Gains (Losses) - Investments Pledged as Collateral Consolidated Under FIN 46-R 1.0 (1.0) 1.3 (12.9) (2.4) Realized and Unrealized Gains (Losses) on Equity Investment in Aberdeen (7.0) 55.9 (55.0) Share of Aberdeen's Extraordinary Charge for FSA Settlement (14.7) Surplus Notes Tender Costs (6.4) Management Restructuring and Early Retirement Costs (9.1) (12.5) (21.9) (8.4) Other income 1.3 ------------- ------------- ------------- ------------- ------------- INCOME (LOSS) FROM CONTINUING OPERATIONS 127.4 98.8 107.9 90.7 (1.5) Income (Loss) from Discontinued Operations (3.5) 1.1 0.5 (4.3) (4.7) ------------- ------------- ------------- ------------- ------------- NET INCOME (LOSS) $ 123.9 $ 99.9 $ 108.4 $ 86.4 $ (6.2) ============= ============= ============= ============= ============= - ----------------------------------------------------------------------------------------------------------------------------------- EARNINGS PER SHARE BASIC Weighted-Average Shares Outstanding 114.1 110.9 95.0 94.7 94.2 ------------- ------------- ------------- ------------- ------------- Total Operating Income Per Share $ 1.19 $ 0.78 $ 1.06 $ 0.83 $ 0.64 Net Income (Loss) Per Share $ 1.09 $ 0.90 $ 1.14 $ 0.91 $ (0.07) DILUTED Weighted-Average Shares Outstanding and Dilutive Potential Common Shares (2) 116.0 113.2 102.4 100.8 96.6 ------------- ------------- ------------- ------------- ------------- Total Operating Income Per Share $ 1.17 $ 0.77 $ 0.98 $ 0.78 $ 0.62 Net Income (Loss) Per Share $ 1.07 $ 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 Fourth Quarter 2007 (unaudited) (amount in millions, except per share data) Quarters ended
2006 2007 ------------------------------------------ ------------------------------------------ March June September December March June September December --------- --------- --------- --------- --------- --------- --------- --------- OPERATING INCOME Life Insurance $ 32.6 $ 42.1 $ 51.2 $ 83.8 $ 56.0 $ 45.5 $ 44.6 $ 49.8 Annuities 5.7 0.5 6.0 (8.2) 6.9 5.2 5.1 2.6 --------- --------- --------- --------- --------- --------- --------- --------- Life and Annuity Segment 38.3 42.6 57.2 75.6 62.9 50.7 49.7 52.4 Asset Management Segment (34.6) 1.3 6.6 (1.9) 0.6 2.3 2.6 1.9 Corporate and Other (17.4) (14.5) (14.8) (15.3) (9.2) (16.2) (11.3) (10.8) --------- --------- --------- --------- --------- --------- --------- --------- TOTAL OPERATING INCOME (LOSS), BEFORE INCOME TAXES (13.7) 29.4 49.0 58.4 54.3 36.8 41.0 43.5 Applicable Income Taxes (Benefit) (7.5) 9.4 11.7 22.4 16.9 2.9 6.7 13.8 --------- --------- --------- --------- --------- --------- --------- --------- TOTAL OPERATING INCOME (LOSS) (6.2) 20.0 37.3 36.0 37.4 33.9 34.3 29.7 Net Realized Investment Gains (Losses) 11.4 2.9 (2.0) 9.5 12.2 (1.0) 0.8 (20.9) 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 0.4 Management Restructuring and Early Retirement Costs (2.5) (3.8) (1.4) (1.4) --------- --------- --------- --------- --------- --------- --------- --------- INCOME FROM CONTINUING OPERATIONS 1.7 19.2 34.0 43.9 49.8 32.8 35.6 9.2 Gain (Loss) from Discontinued Operations 0.4 0.3 0.4 0.8 0.4 (4.7) --------- --------- --------- --------- --------- --------- --------- --------- NET INCOME $ 1.7 $ 19.6 $ 34.3 $ 44.3 $ 50.6 $ 33.2 $ 35.6 $ 4.5 ========= ========= ========= ========= ========= ========= ========= ========= - ----------------------------------------------------------------------------------------------------------------------------------- EARNINGS PER SHARE BASIC Weighted-Average Shares Outstanding 103.6 112.7 113.6 113.7 113.8 114.1 114.2 114.2 --------- --------- --------- --------- --------- --------- --------- --------- Total Operating Income (Loss) Per Share $ (0.06) $ 0.18 $ 0.33 $ 0.32 $ 0.33 $ 0.30 $ 0.30 $ 0.26 Net Income Per Share $ 0.02 $ 0.17 $ 0.30 $ 0.39 $ 0.44 $ 0.29 $ 0.31 $ 0.04 DILUTED Weighted-Average Shares Outstanding and Dilutive Potential Common Shares 106.2 115.9 116.0 115.4 115.1 115.6 115.8 115.8 --------- --------- --------- --------- --------- --------- --------- --------- Total Operating Income (Loss) Per Share $ (0.06) $ 0.17 $ 0.32 $ 0.31 $ 0.32 $ 0.29 $ 0.30 $ 0.26 Net Income Per Share $ 0.02 $ 0.17 $ 0.30 $ 0.38 $ 0.44 $ 0.29 $ 0.31 $ 0.04 =========
3 THE PHOENIX COMPANIES, INC. LIFE AND ANNUITY EARNINGS SUMMARY Fourth Quarter 2007 (unaudited) ($ in millions)
December 31, ------------------------------------------------------------------------- 2007 2006 2005 2004 2003 ------------- ------------- ------------- ------------- ------------- OPERATING INCOME Variable Universal Life $ 41.1 $ 52.7 $ 69.6 $ 35.7 $ 35.0 Universal Life (1) 59.6 53.3 47.9 34.4 21.7 Other Life and Annuity (2) 0.4 2.7 1.5 1.6 0.1 ------------- ------------- ------------- ------------- ------------- TOTAL CORE LIFE INSURANCE 101.1 108.7 119.0 71.7 56.8 ------------- ------------- ------------- ------------- ------------- Traditional Life, excluding Closed Block 27.8 31.2 (11.7) (18.3) (36.5) Traditional Life, Closed Block 67.0 69.8 73.2 76.7 80.1 ------------- ------------- ------------- ------------- ------------- TOTAL TRADITIONAL LIFE 94.8 101.0 61.5 58.4 43.6 ------------- ------------- ------------- ------------- ------------- TOTAL, LIFE INSURANCE 195.9 209.7 180.5 130.1 100.4 Annuities 19.8 4.0 12.0 12.7 (1.0) ------------- ------------- ------------- ------------- ------------- OPERATING INCOME, BEFORE INCOME TAXES 215.7 213.7 192.5 142.8 99.4 Allocated Income Taxes (3) 66.5 67.9 51.3 36.4 31.1 ------------- ------------- ------------- ------------- ------------- OPERATING INCOME 149.2 145.8 141.2 106.4 68.3 Net Realized Investment Gains (Losses) (1.6) (1.0) 22.7 (2.5) (4.7) Management Restructuring and Early Retirement Costs (0.1) (7.3) (1.3) ------------- ------------- ------------- ------------- ------------- NET INCOME $ 147.6 $ 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 Fourth Quarter 2007 (unaudited) ($ in millions) Quarters ended
2006 2007 ------------------------------------------ ------------------------------------------ March June September December March June September December --------- --------- --------- --------- --------- --------- --------- --------- OPERATING INCOME Variable Universal Life $ 8.5 $ 9.2 $ 11.0 $ 24.0 $ 8.8 $ 11.0 $ 11.9 $ 9.4 Universal Life (1) 7.9 11.4 17.1 16.9 17.5 17.7 10.3 14.1 Other Life and Annuity 0.4 0.9 0.6 0.8 0.4 0.5 0.1 (0.6) --------- --------- --------- --------- --------- --------- --------- --------- TOTAL CORE LIFE INSURANCE 16.8 21.5 28.7 41.7 26.7 29.2 22.3 22.9 --------- --------- --------- --------- --------- --------- --------- --------- Traditional Life, excluding Closed Block (1.7) 3.2 5.1 24.6 12.6 (0.5) 5.6 10.1 Traditional Life, Closed Block 17.5 17.4 17.4 17.5 16.7 16.8 16.7 16.8 --------- --------- --------- --------- --------- --------- --------- --------- TOTAL TRADITIONAL LIFE 15.8 20.6 22.5 42.1 29.3 16.3 22.3 26.9 --------- --------- --------- --------- --------- --------- --------- --------- TOTAL, LIFE INSURANCE 32.6 42.1 51.2 83.8 56.0 45.5 44.6 49.8 Annuities 5.7 0.5 6.0 (8.2) 6.9 5.2 5.1 2.6 --------- --------- --------- --------- --------- --------- --------- --------- OPERATING INCOME, BEFORE INCOME TAXES 38.3 42.6 57.2 75.6 62.9 50.7 49.7 52.4 Allocated Income Taxes 12.0 13.0 15.1 27.8 19.6 16.7 11.6 18.6 --------- --------- --------- --------- --------- --------- --------- --------- OPERATING INCOME 26.3 29.6 42.1 47.8 43.3 34.0 38.1 33.8 Net Realized Investment Gains (Losses) (4.2) 0.5 2.4 0.3 0.5 0.5 2.5 (5.1) --------- --------- --------- --------- --------- --------- --------- --------- NET INCOME $ 22.1 $ 30.1 $ 44.5 $ 48.1 $ 43.8 $ 34.5 $ 40.6 $ 28.7 ========= ========= ========= ========= ========= ========= ========= =========
(1) Universal Life includes interest sensitive whole life contracts. 5 THE PHOENIX COMPANIES, INC. VARIABLE UNIVERSAL LIFE Fourth Quarter 2007 (unaudited) ($ in millions)
December 31, ------------------------------------------------------------------------- 2007 2006 2005 2004 2003 ------------- ------------- ------------- ------------- ------------- PRE-TAX INCOME Fees $ 32.5 $ 27.6 $ 32.5 $ 29.6 $ 30.1 Cost of Insurance (COI) 81.9 77.8 76.7 74.6 72.1 Interest Earned 9.9 9.2 6.3 5.9 5.6 Surrender Charges 6.6 6.7 7.1 6.9 6.9 ------------- ------------- ------------- ------------- ------------- TOTAL REVENUES 130.9 121.3 122.6 117.0 114.7 ------------- ------------- ------------- ------------- ------------- Net Death and Disability Benefits 28.7 31.9 28.5 30.5 23.2 Interest Credited 5.8 4.8 4.6 3.7 3.6 DAC Amortized 30.1 8.4 (4.4) 22.2 20.8 Operating Expenses 25.2 23.5 24.3 24.9 32.1 ------------- ------------- ------------- ------------- ------------- TOTAL EXPENSES 89.8 68.6 53.0 81.3 79.7 ------------- ------------- ------------- ------------- ------------- OPERATING INCOME BEFORE TAX $ 41.1 $ 52.7 $ 69.6 $ 35.7 $ 35.0 ============= ============= ============= ============= ============= - --------------------------------------------------------------------------------------------------------------------- OPERATING EXPENSES Commissions and Concessions $ 15.8 $ 13.5 $ 13.6 $ 16.3 $ 21.4 Controllable Expenses and Other 34.1 29.6 26.8 34.0 44.6 ------------- ------------- ------------- ------------- ------------- TOTAL CURRENT EXPENSES 49.9 43.1 40.4 50.3 66.0 Deferred Acquisition Costs (24.7) (19.6) (16.1) (25.4) (33.9) ------------- ------------- ------------- ------------- ------------- OPERATING EXPENSES $ 25.2 $ 23.5 $ 24.3 $ 24.9 $ 32.1 ============= ============= ============= ============= ============= - --------------------------------------------------------------------------------------------------------------------- FUNDS UNDER MANAGEMENT (FUM) Deposits, excluding Private Placement $ 153.8 $ 149.0 $ 171.4 $ 185.4 $ 204.0 Surrenders, excluding Private Placement (102.1) (85.9) (84.4) (60.6) (59.8) ------------- ------------- ------------- ------------- ------------- Net Sales, excluding Private Placement 51.7 63.1 87.0 124.8 144.2 Private Placement, Net Sales 50.4 1.0 36.7 45.3 139.8 ------------- ------------- ------------- ------------- ------------- TOTAL NET SALES 102.1 64.1 123.7 170.1 284.0 Deaths (19.6) (4.7) (3.6) (2.2) (1.4) Interest Credited 195.3 259.9 141.5 170.0 262.7 Acquisitions (Dispositions) 218.8 Fees (33.5) (30.4) (30.3) (31.0) (36.4) Cost of Insurance (79.9) (75.8) (74.6) (72.4) (69.8) ------------- ------------- ------------- ------------- ------------- Change in FUM 383.2 213.1 156.7 234.5 439.1 Beginning Balance 2,312.9 2,099.8 1,943.1 1,708.6 1,269.5 ------------- ------------- ------------- ------------- ------------- ENDING FUND BALANCE $ 2,696.1 $ 2,312.9 $ 2,099.8 $ 1,943.1 $ 1,708.6 ============= ============= ============= ============= ============= Gross Life Insurance In Force (1) $ 24,714.2 $ 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 Fourth Quarter 2007 (unaudited) ($ in millions) Quarters ended
2006 2007 -------------------------------------------------- --------------------------------------------------- March June September December March June September December ------------ ----------- ------------ ------------ ------------ ------------ ------------ ------------ PRE-TAX INCOME Fees $ 7.2 $ 7.5 $ 7.2 $ 5.7 $ 8.0 $ 8.2 $ 7.7 $ 8.6 Cost of Insurance (COI) 19.6 19.4 19.3 19.5 20.3 20.1 20.2 21.3 Interest Earned 1.6 1.9 3.1 2.6 2.4 2.4 2.6 2.5 Surrender Charges 2.1 1.8 1.6 1.2 2.1 1.4 1.9 1.2 ------------ ----------- ------------ ------------ ------------ ------------ ------------ ------------ TOTAL REVENUES 30.5 30.6 31.2 29.0 32.8 32.1 32.4 33.6 ------------ ----------- ------------ ------------ ------------ ------------ ------------ ------------ Net Death and Disability Benefits 8.3 7.3 7.5 8.8 9.0 5.6 6.4 7.7 Interest Credited 1.0 1.0 1.4 1.4 1.4 1.4 1.4 1.6 DAC Amortized 6.8 6.8 6.0 (11.2) 7.2 7.0 7.5 8.4 Operating Expenses 5.9 6.3 5.3 6.0 6.4 7.1 5.2 6.5 ------------ ----------- ------------ ------------ ------------ ------------ ------------ ------------ TOTAL EXPENSES 22.0 21.4 20.2 5.0 24.0 21.1 20.5 24.2 ------------ ----------- ------------ ------------ ------------ ------------ ------------ ------------ OPERATING INCOME BEFORE TAX $ 8.5 $ 9.2 $ 11.0 $ 24.0 $ 8.8 $ 11.0 $ 11.9 $ 9.4 ============ =========== ============ ============ ============ ============ ============ ============ - ----------------------------------------------------------------------------------------------------------------------------------- OPERATING EXPENSES Commissions and Concessions $ 2.9 $ 3.4 $ 3.5 $ 3.7 $ 4.3 $ 3.5 $ 3.3 $ 4.7 Controllable Expenses and Other 6.8 8.7 6.5 7.6 9.4 8.5 6.6 9.6 ------------ ----------- ------------ ------------ ------------ ------------ ------------ ------------ TOTAL CURRENT EXPENSES 9.7 12.1 10.0 11.3 13.7 12.0 9.9 14.3 Deferred Acquisition Costs (3.8) (5.8) (4.7) (5.3) (7.3) (4.9) (4.7) (7.8) ------------ ----------- ------------ ------------ ------------ ------------ ------------ ------------ OPERATING EXPENSES $ 5.9 $ 6.3 $ 5.3 $ 6.0 $ 6.4 $ 7.1 $ 5.2 $ 6.5 ============ =========== ============ ============ ============ ============ ============ ============ - ----------------------------------------------------------------------------------------------------------------------------------- FUNDS UNDER MANAGEMENT (FUM) Deposits, excluding Private Placement $ 37.5 $ 35.5 $ 34.8 $ 41.2 $ 40.2 $ 34.7 $ 32.7 $ 46.2 Surrenders, excluding Private Placement (19.9) (20.9) (21.3) (23.8) (24.1) (26.1) (28.5) (23.4) ------------ ----------- ------------ ------------ ------------ ------------ ------------ ------------ Net Sales, excluding Private Placement 17.6 14.6 13.5 17.4 16.1 8.6 4.2 22.8 Private Placement, Net Sales 9.2 (11.9) 0.7 3.0 8.8 10.8 6.4 24.4 ------------ ----------- ------------ ------------ ------------ ------------ ------------ ------------ TOTAL NET SALES 26.8 2.7 14.2 20.4 24.9 19.4 10.6 47.2 Deaths (2.7) (0.8) (0.8) (0.4) (3.3) (6.6) (8.3) (1.4) Interest Credited 101.0 (16.0) 61.0 113.9 58.1 112.7 25.9 (1.4) Acquisitions (Dispositions) 218.8 Fees (7.1) (8.1) (7.2) (8.0) (8.1) (8.4) (7.1) (9.9) Cost of Insurance (18.9) (18.9) (18.8) (19.2) (19.8) (19.6) (19.3) (21.2) ------------ ----------- ------------ ------------ ------------ ------------ ------------ ------------ Change in FUM 99.1 (41.1) 48.4 106.7 51.8 97.5 1.8 232.1 Beginning Balance 2,099.8 2,198.9 2,157.8 2,206.2 2,312.9 2,364.7 2,462.2 2,464.0 ------------ ----------- ------------ ------------ ------------ ------------ ------------ ------------ ENDING FUND BALANCE $ 2,198.9 $ 2,157.8 $ 2,206.2 $ 2,312.9 $ 2,364.7 $ 2,462.2 $ 2,464.0 $ 2,696.1 ============ =========== ============ ============ ============ ============ ============ ============ Gross Life Insurance In Force (1) $ 24,652.2 $24,274.0 $ 24,164.2 $ 24,164.6 $ 24,320.5 $ 24,170.9 $ 24,138.8 $ 24,714.2 ============ =========== ============ ============ ============ ============ ============ ============
(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 Fourth Quarter 2007 (unaudited) ($ in millions)
December 31, ------------------------------------------------------------------------- 2007 2006 2005 2004 2003 ------------- ------------- ------------- ------------- ------------- PRE-TAX INCOME Fees $ 36.6 $ 27.2 $ 17.9 $ 19.1 $ 17.3 Cost of Insurance (COI) 258.9 184.9 109.9 90.7 78.9 Interest Earned 123.9 116.5 108.7 100.4 98.2 Surrender Charges 3.5 3.7 3.2 3.2 2.5 ------------- ------------- ------------- ------------- ------------- TOTAL REVENUES 422.9 332.3 239.7 213.4 196.9 ------------- ------------- ------------- ------------- ------------- Net Death and Disability Benefits 124.1 98.0 61.8 58.4 51.4 Interest Credited 86.4 79.6 74.5 74.6 78.0 DAC Amortized 91.4 55.5 17.9 20.3 17.7 Operating Expenses 61.4 45.9 37.6 25.7 28.1 ------------- ------------- ------------- ------------- ------------- TOTAL EXPENSES 363.3 279.0 191.8 179.0 175.2 ------------- ------------- ------------- ------------- ------------- OPERATING INCOME BEFORE TAX $ 59.6 $ 53.3 $ 47.9 $ 34.4 $ 21.7 ============= ============= ============= ============= ============= - -------------------------------------------------------------------------------------------------------------- OPERATING EXPENSES Commissions and Concessions $ 157.9 $ 104.9 $ 51.1 $ 24.9 $ 28.2 Controllable Expenses and Other 257.4 176.2 96.5 64.3 74.8 ------------- ------------- ------------- ------------- ------------- TOTAL CURRENT EXPENSES 415.3 281.1 147.6 89.2 103.0 Deferred Acquisition Costs (353.9) (235.2) (110.0) (63.5) (74.9) ------------- ------------- ------------- ------------- ------------- OPERATING EXPENSES $ 61.4 $ 45.9 $ 37.6 $ 25.7 $ 28.1 ============= ============= ============= ============= ============= - -------------------------------------------------------------------------------------------------------------- FUNDS UNDER MANAGEMENT (FUM) Deposits $ 540.9 $ 417.1 $ 297.8 $ 229.4 $ 217.8 Surrenders (77.0) (84.7) (94.1) (126.2) (118.6) ------------- ------------- ------------- ------------- ------------- NET SALES 463.9 332.4 203.7 103.2 99.2 Deaths (22.9) (20.5) (22.3) (16.9) (19.4) Interest Credited 86.3 79.6 78.7 74.6 78.0 Fees (48.6) (36.6) (26.8) (23.5) (24.9) Cost of Insurance (258.9) (184.9) (109.9) (90.7) (78.9) ------------- ------------- ------------- ------------- ------------- Change in FUM 219.8 170.0 123.4 46.7 54.0 Beginning Balance 1,904.1 1,734.1 1,610.7 1,564.0 1,510.0 ------------- ------------- ------------- ------------- ------------- ENDING FUND BALANCE $ 2,123.9 $ 1,904.1 $ 1,734.1 $ 1,610.7 $ 1,564.0 ============= ============= ============= ============= ============= Gross Life Insurance In Force $ 27,358.2 $ 20,402.1 $ 16,303.0 $ 14,103.7 $ 12,830.3 ============= ============= ============= ============= =============
8 THE PHOENIX COMPANIES, INC. UNIVERSAL LIFE / INTEREST SENSITIVE Fourth Quarter 2007 (unaudited) ($ in millions) Quarters ended
2006 2007 ------------------------------------------------------ ---------------------------------------------------- March June September December March June September December ------------ ------------ ------------ ------------ ------------ ----------- ----------- ------------ PRE-TAX INCOME Fees $ 8.0 $ 5.4 $ 7.0 $ 6.8 $ 6.7 $ 7.5 $ 9.7 $ 12.7 Cost of Insurance (COI) 42.0 44.5 46.5 51.9 56.1 59.5 65.7 77.6 Interest Earned 27.0 29.1 29.7 30.7 30.7 30.0 31.8 31.4 Surrender Charges 1.0 0.3 1.7 0.7 0.7 0.8 0.7 1.3 ------------ ------------ ------------ ------------ ------------ ----------- ----------- ------------ TOTAL REVENUES 78.0 79.3 84.9 90.1 94.2 97.8 107.9 123.0 ------------ ------------ ------------ ------------ ------------ ----------- ----------- ------------ Net Death and Disability Benefits 27.6 23.9 15.8 30.7 24.7 20.3 38.9 40.2 Interest Credited 19.4 19.8 19.9 20.5 21.0 21.0 21.4 23.0 DAC Amortized 9.6 13.7 21.9 10.3 18.6 24.1 22.0 26.7 Operating Expenses 13.5 10.5 10.2 11.7 12.4 14.7 15.3 19.0 ------------ ------------ ------------ ------------ ------------ ----------- ----------- ------------ TOTAL EXPENSES 70.1 67.9 67.8 73.2 76.7 80.1 97.6 108.9 ------------ ------------ ------------ ------------ ------------ ----------- ----------- ------------ OPERATING INCOME BEFORE TAX $ 7.9 $ 11.4 $ 17.1 $ 16.9 $ 17.5 $ 17.7 $ 10.3 $ 14.1 ============ ============ ============ ============ ============ =========== =========== ============ - ----------------------------------------------------------------------------------------------------------------------------------- OPERATING EXPENSES Commissions and Concessions $ 34.7 $ 14.1 $ 21.6 $ 34.5 $ 23.5 $ 26.6 $ 42.4 $ 65.4 Controllable Expenses and Other 51.6 32.2 35.9 56.5 39.1 47.9 67.3 103.1 ------------ ------------ ------------ ------------ ------------ ----------- ----------- ------------ TOTAL CURRENT EXPENSES 86.3 46.3 57.5 91.0 62.6 74.5 109.7 168.5 Deferred Acquisition Costs (72.8) (35.8) (47.3) (79.3) (50.2) (59.8) (94.4) (149.5) ------------ ------------ ------------ ------------ ------------ ----------- ----------- ------------ OPERATING EXPENSES $ 13.5 $ 10.5 $ 10.2 $ 11.7 $ 12.4 $ 14.7 $ 15.3 $ 19.0 ============ ============ ============ ============ ============ =========== =========== ============ - ----------------------------------------------------------------------------------------------------------------------------------- FUNDS UNDER MANAGEMENT (FUM) Deposits $ 135.5 $ 73.7 $ 88.7 $ 119.2 $ 92.3 $ 100.2 $ 146.4 $ 202.0 Surrenders (22.5) (21.3) (22.4) (18.5) (21.9) (19.3) (16.2) (19.6) ------------ ------------ ------------ ------------ ------------ ----------- ----------- ------------ NET SALES 113.0 52.4 66.3 100.7 70.4 80.9 130.2 182.4 Deaths (6.8) (5.4) (5.1) (3.2) (8.3) (4.2) (4.7) (5.7) Interest Credited 19.4 19.8 19.9 20.5 21.0 21.0 21.3 23.0 Fees (11.4) (6.5) (8.2) (10.5) (8.2) (8.9) (12.8) (18.7) Cost of Insurance (42.0) (44.5) (46.4) (52.0) (56.1) (59.5) (65.7) (77.6) ------------ ------------ ------------ ------------ ------------ ----------- ----------- ------------ Change in FUM 72.2 15.8 26.5 55.5 18.8 29.3 68.3 103.4 Beginning Balance 1,734.1 1,806.3 1,822.1 1,848.6 1,904.1 1,922.9 1,952.2 2,020.5 ------------ ------------ ------------ ------------ ------------ ----------- ----------- ------------ ENDING FUND BALANCE $ 1,806.3 $ 1,822.1 $ 1,848.6 $ 1,904.1 $ 1,922.9 $ 1,952.2 $ 2,020.5 $ 2,123.9 ============ ============ ============ ============ ============ =========== =========== ============ Gross 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 $ 27,358.2 ============ ============ ============ ============ ============ =========== =========== ============
9 THE PHOENIX COMPANIES, INC. LIFE AND PRIVATE PLACEMENT SALES Fourth Quarter 2007 (unaudited) ($ in millions)
December 31, ------------------------------------------------------------------- 2007 2006 2005 2004 2003 ----------- ------------ ------------ ------------ ------------ LIFE INSURANCE SALES WHOLESALER CHANNEL Variable Universal Life $ 21.9 $ 16.7 $ 16.1 $ 18.2 $ 30.1 Universal Life/Interest Sensitive 308.2 221.9 104.4 47.5 67.5 Term Life 22.2 20.3 16.4 15.3 19.2 Participating Whole Life 0.6 ----------- ------------ ------------ ------------ ------------ Life Insurance Annualized Premium (1) 352.3 258.9 136.9 81.0 117.4 =========== ============ ============ ============ ============ Variable Universal Life 8.0 8.6 6.4 10.8 20.1 Universal Life/Interest Sensitive 65.0 61.8 49.2 53.2 61.6 ----------- ------------ ------------ ------------ ------------ Life Insurance Single Premium 73.0 70.4 55.6 64.0 81.7 =========== ============ ============ ============ ============ Variable Universal Life 29.9 25.3 22.5 29.0 50.2 Universal Life/Interest Sensitive 373.2 283.7 153.6 100.7 129.1 Term Life 22.2 20.3 16.4 15.3 19.2 Participating Whole Life 0.6 ----------- ------------ ------------ ------------ ------------ Total Wholesaler Life Insurance Premium (2) $ 425.3 $ 329.3 $ 192.5 $ 145.0 $ 199.1 =========== ============ ============ ============ ============ Gross Life Insurance in Force $ 156,909 $ 144,139 $ 134,780 $ 127,466 $ 123,354 =========== ============ ============ ============ ============ Average face amount for life insurance sales $ 1.2 $ 1.2 $ 1.1 $ 1.0 $ 1.0 =========== ============ ============ ============ ============ PRIVATE PLACEMENT LIFE AND ANNUITY DEPOSITS Variable Universal Life (annualized and single) $ 59.2 $ 33.5 $ 46.5 $ 60.1 $ 149.5 Annuity 399.7 1,020.2 773.8 152.6 394.9 ----------- ------------ ------------ ------------ ------------ Total Private Placement Life and Annuity Deposits $ 458.9 $ 1,053.7 $ 820.3 $ 212.7 $ 544.4 =========== ============ ============ ============ ============ PRIVATE PLACEMENT FUNDS UNDER MANAGEMENT (FUM) $ 5,039.2 $ 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 Fourth Quarter 2007 (unaudited) ($ in millions) Quarters ended
2006 2007 ---------------------------------------------------- ---------------------------------------------------- March June September December March June September December ------------ ----------- ----------- ------------ ------------ ----------- ----------- ------------ LIFE INSURANCE SALES WHOLESALER CHANNEL Variable Universal Life $ 2.8 $ 4.9 $ 3.2 $ 5.8 $ 6.4 $ 4.7 $ 5.1 $ 5.7 Universal Life/Interest Sensitive 83.5 30.2 42.4 65.8 40.2 53.4 86.7 127.9 Term Life 5.5 4.5 4.7 5.6 5.5 5.2 4.4 7.1 ------------ ----------- ----------- ------------ ------------ ----------- ----------- ------------ Life Insurance Annualized Premium (1) 91.8 39.6 50.3 77.2 52.1 63.3 96.2 140.7 ============ =========== =========== ============ ============ =========== =========== ============ Variable Universal Life 1.1 2.1 2.8 2.6 2.4 1.6 1.2 2.8 Universal Life/Interest Sensitive 18.0 9.1 15.5 19.2 7.8 12.3 18.9 26.0 ------------ ----------- ----------- ------------ ------------ ----------- ----------- ------------ Life Insurance Single Premium 19.1 11.2 18.3 21.8 10.2 13.9 20.1 28.8 ============ =========== =========== ============ ============ =========== =========== ============ Variable Universal Life 3.9 7.0 6.0 8.4 8.8 6.3 6.3 8.5 Universal Life/Interest Sensitive 101.5 39.3 57.9 85.0 48.0 65.7 105.6 153.9 Term Life 5.5 4.5 4.7 5.6 5.5 5.2 4.4 7.1 ------------ ----------- ----------- ------------ ------------ ----------- ----------- ------------ Total Wholesaler Life Insurance Premium (2) $ 110.9 $ 50.8 $ 68.6 $ 99.0 $ 62.3 $ 77.2 $ 116.3 $ 169.5 ============ =========== =========== ============ ============ =========== =========== ============ Gross Life Insurance in Force $ 137,628 $ 139,242 $ 140,937 $ 144,139 $ 146,355 $ 148,572 $ 151,282 $ 156,909 ============ =========== =========== ============ ============ =========== =========== ============ Average face amount for life insurance sales $ 1.3 $ 1.1 $ 1.2 $ 1.2 $ 1.2 $ 1.1 $ 1.2 $ 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 $ 27.0 Annuity 3.4 42.6 33.1 941.1 54.2 146.7 47.5 151.3 ------------ ----------- ----------- ------------ ------------ ----------- ----------- ------------ Total Private Placement Life and Annuity Deposits $ 11.9 $ 59.9 $ 34.8 $ 947.1 $ 65.6 $ 159.9 $ 55.1 $ 178.3 ============ =========== =========== ============ ============ =========== =========== ============ 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 $ 5,039.2 ============ =========== =========== ============ ============ =========== =========== ============
(1) Annualized Premium represents first year premiums on an annual basis. (2) Total Premium represents Annualized and Single premiums. 11 THE PHOENIX COMPANIES, INC. ANNUITIES Fourth Quarter 2007 (unaudited) ($ in millions)
December 31, ------------------------------------------------------------------- 2007 2006 2005 2004 2003 ----------- ------------ ------------ ------------ ------------ PRE-TAX INCOME Fees $ 74.7 $ 66.9 $ 65.4 $ 63.8 $ 57.2 Surrender Charges 5.6 6.3 7.0 5.8 7.4 Interest earned on GIA and Required Interest 100.7 131.7 165.1 158.0 150.1 ----------- ------------ ------------ ------------ ------------ TOTAL REVENUES 181.0 204.9 237.5 227.6 214.7 ----------- ------------ ------------ ------------ ------------ Mortality Cost (2.0) 5.8 6.6 8.9 4.4 DAC Amortized 55.7 66.6 62.6 35.7 26.5 Interest Credited 64.8 87.4 112.1 123.2 133.0 Operating Expenses 42.7 41.1 44.2 47.1 51.8 ----------- ------------ ------------ ------------ ------------ TOTAL EXPENSES 161.2 200.9 225.5 214.9 215.7 ----------- ------------ ------------ ------------ ------------ OPERATING INCOME (LOSS) BEFORE TAX $ 19.8 $ 4.0 $ 12.0 $ 12.7 $ (1.0) =========== ============ ============ ============ ============ - ----------------------------------------------------------------------------------------------------------------------------- OPERATING EXPENSES Commissions and Concessions $ 48.9 $ 39.7 $ 38.2 $ 42.6 $ 51.1 Controllable Expenses and Other 49.6 40.8 37.9 48.2 66.2 ----------- ------------ ------------ ------------ ------------ TOTAL CURRENT EXPENSES 98.5 80.5 76.1 90.8 117.3 Deferred Acquisition Costs (55.8) (39.4) (31.9) (43.7) (65.5) ----------- ------------ ------------ ------------ ------------ OPERATING EXPENSES $ 42.7 $ 41.1 $ 44.2 $ 47.1 $ 51.8 =========== ============ ============ ============ ============ - ----------------------------------------------------------------------------------------------------------------------------- FUNDS UNDER MANAGEMENT (FUM) Deposits, excluding Discontinued Products and Private Placement $ 627.0 $ 414.7 $ 312.9 $ 423.3 $ 620.1 Surrenders, excluding Discontinued Products and Private Placement (609.2) (690.2) (584.4) (490.8) (471.7) ----------- ------------ ------------ ------------ ------------ Net Sales, excluding Discontinued Products and Private Placement 17.8 (275.5) (271.5) (67.5) 148.4 Net Sales, Private Placement 228.4 807.4 587.9 121.9 362.7 Net Sales, Discontinued Products (327.7) (684.1) (363.8) (186.3) 51.6 ----------- ------------ ------------ ------------ ------------ TOTAL NET SALES (81.5) (152.2) (47.4) (131.9) 562.7 Deaths (77.3) (87.0) (80.2) (81.6) (71.4) Interest Credited 783.3 949.6 545.8 628.2 895.2 Fees (72.6) (70.9) (63.0) (59.8) (57.7) ----------- ------------ ------------ ------------ ------------ Change in FUM 551.9 639.5 355.2 354.9 1,328.8 Beginning Balance 8,677.6 8,038.1 7,702.9 7,348.0 6,019.2 ----------- ------------ ------------ ------------ ------------ ENDING FUND BALANCE $ 9,229.5 $ 8,677.6 $ 8,058.1 $ 7,702.9 $ 7,348.0 =========== ============ ============ ============ ============ VA Funds in Guaranteed Interest Accounts (1) $ 750.8 $ 1,030.8 $ 1,553.8 $ 1,939.1 $ 2,067.4 =========== ============ ============ ============ ============ Private Placements Funds (1) $ 3,963.2 $ 3,302.8 $ 2,099.3 $ 1,297.9 $ 1,021.9 =========== ============ ============ ============ ============ Discontinued Funds (1) $ 946.6 $ 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 Fourth Quarter 2007 (unaudited) ($ in millions) Quarters Ended
2006 2007 ---------------------------------------------- ------------------------------------------------ March June September December March June September December ---------- ---------- ---------- ---------- ---------- ---------- ------------ ---------- PRE-TAX INCOME Fees $ 16.6 $ 16.8 $ 16.3 $ 17.2 $ 17.3 $ 18.6 $ 18.8 $ 20.0 Surrender Charges 1.5 1.7 1.6 1.5 1.6 1.4 1.4 1.2 Interest earned on GIA and Required Interest 35.5 34.3 30.8 31.1 27.1 26.4 24.6 22.6 ---------- ---------- ---------- ---------- ---------- ---------- ------------ ---------- TOTAL REVENUES 53.6 52.8 48.7 49.8 46.0 46.4 44.8 43.8 ---------- ---------- ---------- ---------- ---------- ---------- ------------ ---------- Mortality Cost 0.3 1.4 1.9 2.2 (1.0) 2.8 2.5 (6.3) DAC Amortized 11.2 16.3 12.0 27.1 12.3 9.6 12.3 21.5 Interest Credited 25.1 24.2 19.2 18.9 17.3 17.2 15.1 15.2 Operating Expenses 11.3 10.4 9.6 9.8 10.5 11.6 9.8 10.8 ---------- ---------- ---------- ---------- ---------- ---------- ------------ ---------- TOTAL EXPENSES 47.9 52.3 42.7 58.0 39.1 41.2 39.7 41.2 ---------- ---------- ---------- ---------- ---------- ---------- ------------ ---------- OPERATING INCOME (LOSS) BEFORE TAX $ 5.7 $ 0.5 $ 6.0 $ (8.2) $ 6.9 $ 5.2 $ 5.1 $ 2.6 ========== ========== ========== ========== ========== ========== ============ ========== - ----------------------------------------------------------------------------------------------------------------------------------- OPERATING EXPENSES Commissions and Concessions $ 9.9 $ 10.2 $ 9.1 $ 10.5 $ 10.9 $ 12.3 $ 11.3 $ 14.4 Controllable Expenses and Other 10.1 9.7 9.6 11.4 11.9 13.8 11.4 12.5 ---------- ---------- ---------- ---------- ---------- ---------- ------------ ---------- TOTAL CURRENT EXPENSES 20.0 19.9 18.7 21.9 22.8 26.1 22.7 26.9 Deferred Acquisition Costs (8.7) (9.5) (9.1) (12.1) (12.3) (14.5) (12.9) (16.1) ---------- ---------- ---------- ---------- ---------- ---------- ------------ ---------- OPERATING EXPENSES $ 11.3 $ 10.4 $ 9.6 $ 9.8 $ 10.5 $ 11.6 $ 9.8 $ 10.8 ========== ========== ========== ========== ========== ========== ============ ========== - ----------------------------------------------------------------------------------------------------------------------------------- FUNDS UNDER MANAGEMENT (FUM) Deposits, excluding Discontinued Products and Private Placement $ 90.3 $ 102.4 $ 101.7 $ 120.3 $ 131.3 $ 158.6 $ 140.7 $ 196.4 Surrenders, excluding Discontinued Products and Private Placement (167.8) (186.7) (176.7) (159.0) (159.0) (149.5) (151.5) (149.2) ---------- ---------- ---------- ---------- ---------- ---------- ------------ ---------- Net Sales, excluding Discontinued Products and Private Placement (77.5) (84.3) (75.0) (38.7) (27.7) 9.1 (10.8) 47.2 Net Sales, Private Placement (140.8) 18.5 6.6 923.1 29.0 124.2 (41.4) 116.6 Net Sales, Discontinued Products (176.1) (343.8) (101.0) (63.2) (73.9) (120.8) (81.6) (51.4) ---------- ---------- ---------- ---------- ---------- ---------- ------------ ---------- TOTAL NET SALES (394.4) (409.6) (169.4) 821.2 (72.6) 12.5 (133.8) 112.4 Deaths (22.6) (23.6) (21.4) (19.4) (21.2) (22.8) (17.6) (15.7) Interest Credited 319.2 80.9 206.7 342.8 169.6 372.5 151.6 89.6 Fees (15.8) (16.2) (16.0) (22.9) (17.8) (17.6) (17.0) (20.2) ---------- ---------- ---------- ---------- ---------- ---------- ------------ ---------- Change in FUM (113.6) (368.5) (0.1) 1,121.7 58.0 344.6 (16.8) 166.1 Beginning Balance 8,038.1 7,924.5 7,556.0 7,555.9 8,677.6 8,735.6 9,080.2 9,063.4 ---------- ---------- ---------- ---------- ---------- ---------- ------------ ---------- ENDING FUND BALANCE $7,924.5 $7,556.0 $7,555.9 $8,677.6 $8,735.6 $9,080.2 $ 9,063.4 $9,229.5 ========== ========== ========== ========== ========== ========== ============ ========== 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 $ 750.8 ========== ========== ========== ========== ========== ========== ============ ========== 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 $3,963.2 ========== ========== ========== ========== ========== ========== ============ ========== Discontinued Funds (1) $1,556.1 $1,418.5 $1,322.9 $1,263.3 $1,190.0 $1,072.0 $ 993.8 $ 946.6 ========== ========== ========== ========== ========== ========== ============ ==========
(1) Amounts are included in the annuities Funds Under Management (FUM) table above. 13 THE PHOENIX COMPANIES, INC. SUPPLEMENTARY LIFE AND ANNUITY INFORMATION Fourth Quarter 2007 (unaudited) ($ in millions)
December 31, -------------------------------------------------------------------- 2007 2006 2005 2004 2003 ------------ ------------ ------------ ------------ ------------ DEFERRED ACQUISITION COSTS Variable Universal Life $ 358.9 $ 364.2 $ 353.0 $ 332.5 $ 329.3 Universal Life 796.4 533.9 354.7 262.0 219.2 Variable Annuities 282.6 275.0 281.3 299.0 291.8 Fixed Annuities 12.8 20.3 38.8 46.0 45.2 Participating 566.9 559.0 544.2 577.0 576.3 Offset for Unrealized Investment (Gains) Losses 63.6 0.3 (16.0) (86.6) (94.1) ------------ ------------ ------------ ------------ ------------ Total $ 2,081.2 $ 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 $ 202.4 $ 238.8 $ 335.5 $ 441.1 $ 616.9 Death Benefit in Excess of Fund Value, Net of Reinsurance 46.6 51.3 82.1 123.5 183.0 Statutory Reserve, Net of Reinsurance 12.9 13.2 13.8 15.0 17.3 GAAP Reserve, Net of Reinsurance $ 1.8 $ 10.7 $ 10.7 $ 9.1 $ 7.8 VARIABLE ANNUITY GUARANTEED INCOME BENEFITS Account Balance $ 716.8 $ 620.1 $ 465.8 $ 344.8 $ 166.8 Statutory Reserve 6.9 4.4 2.2 0.8 0.1 GAAP Reserve 5.9 3.7 2.2 0.8 VARIABLE ANNUITY GUARANTEED ACCUMULATION BENEFITS Account Balance $ 389.8 $ 210.6 $ 72.6 Statutory Reserve 2.3 0.8 0.3 GAAP Reserve (1.7) 0.3 VARIABLE ANNUITY GUARANTEED WITHDRAWAL BENEFITS Account Balance $ 214.6 $ 30.1 $ 1.1 Statutory Reserve 0.7 0.1 GAAP Reserve VARIABLE ANNUITY GUARANTEED PAYOUT ANNUITY FLOOR Account Balance $ 43.4 $ 49.8 $ 49.9 Statutory Reserve 2.2 2.1 1.9 GAAP Reserve 1.7 1.6 1.3
14 THE PHOENIX COMPANIES, INC. SUPPLEMENTARY LIFE AND ANNUITY INFORMATION Fourth Quarter 2007 (unaudited) ($ in millions) QUARTERS ENDED
2006 2007 ---------------------------------------------- ---------------------------------------------- March June September December March June September December ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- DEFERRED ACQUISITION COSTS Variable Universal Life $ 349.9 $ 348.9 $ 347.6 $ 364.2 $ 364.3 $ 362.2 $ 359.4 $ 358.9 Universal Life 417.7 439.6 465.2 533.9 565.4 601.1 673.4 796.4 Variable Annuities 281.7 276.4 275.2 275.0 275.9 283.3 286.1 282.6 Fixed Annuities 38.2 36.6 35.1 20.3 19.4 17.3 15.4 12.8 Participating 548.1 551.1 554.8 559.0 561.8 564.3 565.3 566.9 Offset for Unrealized Investment Gains and Losses 22.5 57.5 6.6 0.3 (5.0) 31.8 48.7 63.6 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- Total $1,658.1 $1,710.1 $1,684.5 $1,752.7 $1,781.8 $1,860.0 $1,948.3 $2,081.2 ========== ========== ========== ========== ========== ========== ========== ========== - ----------------------------------------------------------------------------------------------------------------------------------- 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 $ 202.4 Death Benefit in Excess of Fund Value, Net of Reinsurance 66.5 75.5 63.4 51.3 48.3 40.7 37.2 46.6 Statutory Reserve, Net of Reinsurance 13.2 14.0 13.7 13.2 13.3 12.9 12.6 12.9 GAAP Reserve, Net of Reinsurance $ 9.3 $ 10.5 $ 10.6 $ 10.7 $ 10.9 $ 10.2 $ 10.2 $ 1.8 VARIABLE ANNUITY GUARANTEED INCOME BENEFITS Account Balance $ 514.7 $ 525.8 $ 566.1 $ 620.1 $ 654.5 $ 702.4 $ 695.3 $ 716.8 Statutory Reserve 2.8 3.4 3.9 4.4 5.0 5.6 6.2 6.9 GAAP Reserve 2.8 2.0 2.5 3.7 2.2 2.6 4.2 5.9 VARIABLE ANNUITY GUARANTEED ACCUMULATION BENEFITS Account Balance $ 100.5 $ 127.4 $ 163.5 $ 210.6 $ 246.9 $ 302.5 $ 324.2 $ 389.8 Statutory Reserve 0.4 0.4 0.6 0.8 1.1 1.5 1.8 2.3 GAAP Reserve 0.4 (0.3) (1.7) (2.5) (0.2) VARIABLE ANNUITY GUARANTEED WITHDRAWAL BENEFITS Account Balance $ 3.0 $ 7.2 $ 17.4 $ 30.1 $ 49.1 $ 81.6 $ 103.7 $ 214.6 Statutory Reserve 0.1 0.1 0.2 0.4 0.7 GAAP Reserve VARIABLE ANNUITY GUARANTEED PAYOUT ANNUITY FLOOR Account Balance $ 50.2 $ 49.2 $ 49.6 $ 49.8 $ 47.5 $ 47.6 $ 46.6 $ 43.4 Statutory Reserve 2.2 2.6 2.3 2.1 2.2 1.9 2.0 2.2 GAAP Reserve 1.4 1.5 1.6 1.6 1.5 1.6 1.7 1.7
15 THE PHOENIX COMPANIES, INC. ASSET MANAGEMENT Fourth Quarter 2007 (unaudited) ($ in millions)
December 31, ----------------------------------------------------------- 2007 2006 2005 2004 2003 ---------- ---------- ---------- ----------- ---------- OPERATING INCOME Investment Management Fees $ 147.4 $ 154.1 $ 182.1 $ 219.0 $ 205.5 Mutual Funds - Ancillary Fees (1) 59.8 49.4 41.1 38.8 35.5 Other Revenue 7.4 5.3 4.9 7.2 9.3 ---------- ---------- ---------- ----------- ---------- Total Revenues 214.6 208.8 228.1 265.0 250.3 ---------- ---------- ---------- ----------- ---------- Employment Expenses 85.0 89.4 103.9 132.6 129.6 Distribution & Admin Expenses (2) 50.1 41.3 35.8 32.9 28.6 Other Operating Expenses (1) (2) 43.8 43.8 50.6 53.0 58.1 Amortization of Intangibles 30.4 32.0 33.2 33.8 33.2 Intangible Asset Impairments 32.5 10.6 ---------- ---------- ---------- ----------- ---------- Total Operating Expenses 209.3 239.0 234.1 252.3 249.5 ---------- ---------- ---------- ----------- ---------- Management Income (Loss) 5.3 (30.2) (6.0) 12.7 0.8 Other Income - Net 2.1 1.6 2.2 1.7 2.5 Minority Interest (6.7) (14.3) (12.0) ---------- ---------- ---------- ----------- ---------- Operating Income (Loss), before income taxes 7.4 (28.6) (10.5) 0.1 (8.7) Applicable Income Taxes (Benefit) 3.3 (10.7) (4.7) 2.3 (3.3) ---------- ---------- ---------- ----------- ---------- OPERATING INCOME (LOSS) 4.1 (17.9) (5.8) (2.2) (5.4) Net Realized Investment Gains (Losses) (0.5) 0.8 (0.3) 1.8 (0.3) Management Restructuring and Early Retirement Costs (8.7) (8.3) (1.2) (4.0) ---------- ---------- ---------- ----------- ---------- NET INCOME (LOSS) $ 3.6 $ (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 $ 7.4 $ (28.6) $ (10.5) $ 0.1 $ (8.7) Adjustments for: Intangible asset amortization and impairments 30.4 64.5 43.8 33.8 33.2 Depreciation 1.1 1.0 1.7 2.2 2.7 ---------- ---------- ---------- ----------- ---------- EBITDA $ 38.9 $ 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 Fourth Quarter 2007 (unaudited) ($ in millions) Quarters ended
2006 2007 ----------------------------------------------- ----------------------------------------------- March June September December March June September December ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- OPERATING INCOME Investment Management Fees $ 36.5 $ 37.5 $ 42.0 $ 38.1 $ 36.9 $ 37.1 $ 36.9 $ 36.5 Mutual Funds - Ancillary Fees 10.7 11.6 14.3 12.8 14.3 15.3 15.1 15.1 Other Revenue 1.3 0.8 1.9 1.3 2.2 1.8 1.9 1.5 ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- Total Revenues 48.5 49.9 58.2 52.2 53.4 54.2 53.9 53.1 ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- Employment Expenses 22.5 19.9 23.1 23.9 24.0 20.4 20.8 19.8 Distribution & Admin Expenses (1) 8.9 9.1 10.7 12.6 11.6 12.7 12.9 12.9 Other Operating Expenses (1) 11.5 11.5 10.4 10.4 10.1 11.9 10.6 11.2 Amortization of Intangibles 8.0 8.5 7.7 7.8 7.6 7.5 7.5 7.8 Intangible Asset Impairments 32.5 ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- Total Operating Expenses 83.4 49.1 51.8 54.7 53.3 52.5 51.8 51.7 ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- Management Income (Loss) (34.9) 0.8 6.4 (2.5) 0.1 1.7 2.1 1.4 Other Income - Net 0.3 0.4 0.3 0.6 0.5 0.6 0.5 0.5 ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- Operating Income (Loss), before income taxes (34.6) 1.3 6.6 (1.9) 0.6 2.3 2.6 1.9 Applicable Income Taxes (Benefit) (13.4) 0.6 2.3 (0.2) 0.9 1.0 1.2 0.2 ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- OPERATING INCOME (LOSS) (21.2) 0.7 4.3 (1.7) (0.3) 1.3 1.4 1.7 Net Realized Investment Gains (Losses) 0.2 0.2 0.4 0.1 0.2 (0.2) (0.6) 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 $ 1.1 =========== =========== =========== =========== =========== =========== =========== =========== 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 $ 1.9 Adjustments for: Intangible asset amortization and impairments 40.5 8.5 7.7 7.8 7.6 7.5 7.5 7.8 Depreciation 0.5 0.2 0.1 0.2 0.2 0.5 0.2 0.2 ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- EBITDA $ 6.4 $ 10.0 $ 14.4 $ 6.1 $ 8.4 $ 10.3 $ 10.3 $ 9.9 =========== =========== =========== =========== =========== =========== =========== ===========
(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 Fourth Quarter 2007 (unaudited) ($ in millions)
December 31, ---------------------------------------------------------------------------------- 2007 2006 2005 2004 2003 -------------- -------------- -------------- -------------- -------------- RETAIL PRODUCTS: Managed Accounts - ---------------- Deposits and reinvestments $ 1,212.3 $ 1,141.2 $ 1,760.3 $ 2,109.9 $ 2,268.3 Redemptions and withdrawals (2,668.6) (4,297.5) (5,722.8) (5,203.0) (2,656.6) -------------- -------------- -------------- -------------- -------------- Net Flows (1,456.3) (3,156.3) (3,962.5) (3,093.1) (388.3) Performance 144.4 593.9 (62.6) 950.3 1,537.5 Acquisitions (dispositions) / Other (81.5) 71.0 (158.0) -------------- -------------- -------------- -------------- -------------- Net Change in AUM (1,393.4) (2,491.4) (4,183.1) (2,142.8) 1,149.2 Assets under management, beginning of period 6,841.1 9,332.5 13,515.6 15,658.4 14,509.2 -------------- -------------- -------------- -------------- -------------- Assets under management, end of period $ 5,447.7 $ 6,841.1 $ 9,332.5 $ 13,515.6 $ 15,658.4 ============== ============== ============== ============== ============== Mutual Funds - ------------ Deposits and reinvestments $ 3,596.2 $ 2,567.5 $ 2,030.4 $ 1,673.2 $ 1,489.2 Redemptions and withdrawals (3,826.2) (2,828.6) (2,444.0) (2,004.5) (1,683.6) -------------- -------------- -------------- -------------- -------------- Net Flows (230.0) (261.1) (413.6) (331.3) (194.4) Performance 338.6 1,522.2 184.1 805.9 1,588.8 Money market funds net change in AUM 502.5 (1,382.8) (28.4) (28.9) (45.2) Acquisitions (dispositions) / Other (143.9) 9,838.3 120.1 105.7 (80.6) -------------- -------------- -------------- -------------- -------------- Net Change in AUM 467.2 9,716.6 (137.8) 551.4 1,268.6 Assets under management, beginning of period 21,863.8 12,147.2 12,285.0 11,733.6 10,465.0 -------------- -------------- -------------- -------------- -------------- Assets under management, end of period $ 22,331.0 $ 21,863.8 $ 12,147.2 $ 12,285.0 $ 11,733.6 ============== ============== ============== ============== ============== INSTITUTIONAL PRODUCTS: Deposits and reinvestments $ 1,237.6 $ 1,609.2 $ 5,545.1 $ 2,885.2 $ 3,230.7 Redemptions and withdrawals (2,002.1) (3,504.4) (6,599.1) (5,389.2) (3,505.3) -------------- -------------- -------------- -------------- -------------- Net Flows (764.5) (1,895.2) (1,054.0) (2,504.0) (274.6) Performance 559.3 1,089.2 367.2 1,140.5 2,333.0 Acquisitions (dispositions) / Other (2) (895.2) (332.6) (63.3) 234.3 (76.0) -------------- -------------- -------------- -------------- -------------- Net Change in AUM (1,100.4) (1,138.6) (750.1) (1,129.2) 1,982.4 Assets under management, beginning of period 12,294.8 13,433.4 14,183.5 15,312.7 13,330.3 -------------- -------------- -------------- -------------- -------------- Assets under management, end of period $ 11,194.4 $ 12,294.8 $ 13,433.4 $ 14,183.5 $ 15,312.7 ============== ============== ============== ============== ============== STRUCTURED FINANCE PRODUCTS: Deposits and reinvestments $ 2,290.0 $ 2,423.5 $ 1,002.3 $ 1.7 $ 1.1 Redemptions and withdrawals (352.3) (1,141.7) (1,157.9) (659.2) (303.1) -------------- -------------- -------------- -------------- -------------- Net Flows 1,937.7 1,281.8 (155.6) (657.5) (302.0) Performance (2,325.5) 171.5 (258.9) 26.0 327.0 -------------- -------------- -------------- -------------- -------------- Net Change in AUM (387.8) 1,453.3 (414.5) (631.5) 25.0 Assets under management, beginning of period 3,963.1 2,509.8 2,924.3 3,555.8 3,530.8 -------------- -------------- -------------- -------------- -------------- Assets under management, end of period $ 3,575.3 $ 3,963.1 $ 2,509.8 $ 2,924.3 $ 3,555.8 ============== ============== ============== ============== ============== TOTAL: Deposits and reinvestments $ 8,336.1 $ 7,741.4 $ 10,338.1 $ 6,670.0 $ 6,989.3 Redemptions and withdrawals (8,849.2) (11,772.2) (15,923.8) (13,255.9) (8,148.6) -------------- -------------- -------------- -------------- -------------- Net Flows (513.1) (4,030.8) (5,585.7) (6,585.9) (1,159.3) Performance (1,283.2) 3,376.8 229.8 2,922.7 5,786.3 Money market funds net change in AUM 502.5 (1,382.8) (28.4) (28.9) (45.2) Acquisitions (dispositions) / Other (1,120.6) 9,576.7 (101.2) 340.0 (156.6) -------------- -------------- -------------- -------------- -------------- Net Change in AUM (2,414.4) 7,539.9 (5,485.5) (3,352.1) 4,425.2 Assets under management, beginning of period 44,962.8 37,422.9 42,908.4 46,260.5 41,835.3 -------------- -------------- -------------- -------------- -------------- Assets under management, end of period $ 42,548.4 $ 44,962.8 $ 37,422.9 $ 42,908.4 $ 46,260.5 ============== ============== ============== ============== ============== Variable Products Change in AUM (included in Institutional Products) $ (950.3) $ 106.5 $ (342.3) $ 211.6 $ 200.4 ============== ============== ============== ============== ============== Money Market balances (1) $ 6,203.6 $ 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 Fourth Quarter 2007 (unaudited) ($ in millions)
2006 2007 --------------------------------------------------- -------------------------------------------------- March June September December March June September December ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- RETAIL PRODUCTS: Managed Accounts - ---------------- Deposits and reinvestments $ 329.1 $ 316.1 $ 216.5 $ 279.5 $ 290.4 $ 365.5 $ 299.0 $ 257.4 Redemptions and withdrawals (1,465.9) (1,339.1) (969.6) (523.0) (728.1) (830.6) (482.8) (627.1) ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- Net Flows (1,136.8) (1,023.0) (753.1) (243.5) (437.7) (465.1) (183.8) (369.7) Performance 461.4 (347.6) 169.9 310.2 125.6 74.8 64.4 (120.4) Acquisitions (dispositions) / Other 71.1 (81.5) ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- Net Change in AUM (604.3) (1,370.6) (583.2) 66.7 (312.1) (390.3) (119.4) (571.6) 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 6,019.3 ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- 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 $ 5,447.7 =========== =========== =========== =========== =========== =========== =========== =========== Mutual Funds - ------------ Deposits and reinvestments $ 640.5 $ 417.4 $ 729.3 $ 780.4 $ 1,160.7 $ 1,169.3 $ 701.2 $ 565.0 Redemptions and withdrawals (620.9) (612.0) (881.3) (714.5) (881.8) (978.9) (1,023.0) (942.5) ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- Net Flows 19.6 (194.6) (152.0) 65.9 278.9 190.4 (321.8) (377.5) Performance 349.4 (174.4) 575.8 771.4 298.5 51.0 188.5 (199.4) Money market funds net change in AUM (0.1) (276.0) (1,169.4) 62.7 (364.2) 214.8 1,939.1 (1,287.2) Acquisitions (dispositions) / Other 185.0 9,824.4 (20.9) (150.2) (14.0) (52.0) 13.6 (91.5) ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- Net Change in AUM 553.9 9,179.4 (766.5) 749.8 199.2 404.2 1,819.4 (1,955.6) 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 24,286.6 ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- 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 $22,331.0 =========== =========== =========== =========== =========== =========== =========== =========== INSTITUTIONAL PRODUCTS: Deposits and reinvestments $ 574.6 $ 238.8 $ 277.7 $ 518.0 $ 281.3 $ 364.4 $ 260.2 $ 331.7 Redemptions and withdrawals (940.6) (1,467.4) (440.1) (656.2) (513.3) (474.9) (566.6) (447.3) ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- Net Flows (366.0) (1,228.6) (162.4) (138.2) (232.0) (110.5) (306.4) (115.6) Performance 283.7 (65.7) 526.4 344.8 233.8 17.4 251.6 56.5 Acquisitions (dispositions)/Other (2) (14.2) (114.8) (41.3) (162.3) (261.9) 69.1 (708.2) 5.8 ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- Net Change in AUM (96.5) (1,409.1) 322.7 44.3 (260.1) (24.0) (763.0) (53.3) 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 11,247.7 ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- 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 $11,194.4 =========== =========== =========== =========== =========== =========== =========== =========== STRUCTURED FINANCE PRODUCTS: Deposits and reinvestments $ 13.8 $ 233.5 $ 1,676.2 $ 500.0 $ 1,500.0 $ 790.0 $ 0.0 $ 0.0 Redemptions and withdrawals (196.9) (468.1) (157.9) (318.7) (299.0) (20.6) (17.6) (15.1) ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- Net Flows (183.1) (234.6) 1,518.3 181.3 1,201.0 769.4 (17.6) (15.1) Performance 37.4 14.4 64.6 55.0 (73.7) (117.9) (809.3) (1,324.6) ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- Net Change in AUM (145.7) (220.2) 1,582.9 236.3 1,127.3 651.5 (826.9) (1,339.7) 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 4,915.0 ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- 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 $ 3,575.3 =========== =========== =========== =========== =========== =========== =========== =========== 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 $ 1,154.1 Redemptions and withdrawals (3,224.3) (3,886.6) (2,448.9) (2,212.4) (2,422.2) (2,305.0) (2,090.0) (2,032.0) ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- Net Flows (1,666.3) (2,680.8) 450.8 (134.5) 810.2 384.2 (829.6) (877.9) Performance 1,131.9 (573.3) 1,336.7 1,481.4 584.2 25.3 (304.8) (1,587.9) Money market funds net change in AUM (0.1) (276.0) (1,169.4) 62.7 (364.2) 214.8 1,939.1 (1,287.2) Acquisitions (dispositions)/Other 241.9 9,709.6 (62.2) (312.5) (275.9) 17.1 (694.6) (167.2) ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- Net Change in AUM (292.6) 6,179.5 555.9 1,097.1 754.3 641.4 110.1 (3,920.2) 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 46,468.6 ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- 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 $42,548.4 =========== =========== =========== =========== =========== =========== =========== =========== Variable Products Change in AUM (included in Institutional Products) $ 27.7 $ (188.5) $ 43.5 $ 223.8 $ (10.2) $ 5.4 $ (897.3) $ (48.2) =========== =========== =========== =========== =========== =========== =========== =========== Money Market balances (1) $ 101.4 $ 6,807.8 $ 5,638.4 $ 5,701.1 $ 5,336.9 $ 5,551.7 $ 7,490.8 $ 6,203.6 =========== =========== =========== =========== =========== =========== =========== ===========
(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. 19 THE PHOENIX COMPANIES, INC. VENTURE CAPITAL SEGMENT (1) Fourth Quarter 2007 (unaudited) ($ in millions)
December 31, --------------------------------------- 2005 2004 2003 ----------- ---------- ---------- OPERATING INCOME Operating Gain (Loss) $ 3.5 $ (1.7) $ (5.8) Realized Gains 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, before income taxes 14.8 19.3 36.2 Applicable Income Taxes 5.2 6.8 12.7 ----------- ---------- ---------- Operating Income $ 9.6 $ 12.5 $ 23.5 =========== ========== ========== - --------------------------------------------------------------------------------------------------------------------------- VENTURE CAPITAL INVESTMENTS Contributions (Dollars Invested) $ 27.6 $ 37.7 $ 31.0 Equity In Earnings 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 Fourth Quarter 2007 (unaudited) ($ in millions)
December 31, ------------------------------------------------------------- 2007 2006 2005 2004 2003 ---------- ---------- ----------- ----------- ----------- OPERATING INCOME Corporate Investment Income $ 6.7 $ 4.6 $ (0.8) $ 0.4 $ 4.3 Interest Expense on Indebtedness (44.2) (49.2) (46.6) (40.8) (39.6) Corporate Expenses (10.8) (17.3) (24.6) (18.9) (11.0) Other 0.8 (0.1) 0.7 (1.5) 1.0 ---------- ---------- ----------- ----------- ----------- Operating Loss, before income taxes (47.5) (62.0) (71.3) (60.8) (45.3) Applicable Income Tax (Benefit) (29.5) (21.2) (26.9) (23.0) (18.8) ---------- ---------- ----------- ----------- ----------- OPERATING LOSS (18.0) (40.8) (44.4) (37.8) (26.5) Net Realized Investment Gains (Losses) (5.7) 21.0 4.4 (0.4) 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 (0.4) (4.1) (13.4) (1.9) ---------- ---------- ----------- ----------- ----------- NET INCOME (LOSS) $ (23.7) $ (20.2) $ (51.1) $ (16.8) $ (77.6) ========== ========== =========== =========== ===========
21 THE PHOENIX COMPANIES, INC. CORPORATE AND OTHER Fourth Quarter 2007 (unaudited) ($ in millions) Quarters Ended
2006 2007 ---------------------------------------------- --------------------------------------------- March June September December March June September December ---------- ---------- ---------- ---------- --------- ---------- ---------- ---------- OPERATING INCOME Corporate Investment Income $ 0.2 $ 0.8 $ 2.2 $ 1.4 $ 1.5 $ 1.5 $ 1.8 $ 1.9 Interest Expense on Indebtedness (12.4) (12.3) (12.1) (12.4) (9.5) (11.6) (11.5) (11.6) Corporate Expenses (5.5) (3.2) (4.4) (4.2) (2.9) (5.5) (1.7) (0.7) Other 0.3 0.2 (0.5) (0.1) 1.7 (0.6) 0.1 (0.4) ---------- ---------- ---------- ---------- --------- ---------- ---------- ---------- Operating Loss, before income taxes (17.4) (14.5) (14.8) (15.3) (9.2) (16.2) (11.3) (10.8) Applicable Income Tax (Benefit) (6.1) (4.2) (5.8) (5.1) (3.6) (14.8) (6.2) (4.9) ---------- ---------- ---------- ---------- --------- ---------- ---------- ---------- OPERATING LOSS (11.3) (10.3) (9.0) (10.2) (5.6) (1.4) (5.1) (5.9) Net Realized Investment Gains (Losses) 14.4 2.5 (4.7) 8.8 11.8 (1.8) (1.0) (14.7) Management Restructuring and Early Retirement Costs (0.5) 0.1 ---------- ---------- ---------- ---------- --------- ---------- ---------- ---------- NET INCOME (LOSS) $ 3.1 $ (8.3) $ (13.7) $ (1.3) $ 6.2 $ (3.2) $ (6.1) $ (20.6) ========== ========== ========== ========== ========= ========== ========== ==========
22 THE PHOENIX COMPANIES, INC. CONSOLIDATED STATEMENT OF INCOME - GAAP FORMAT (1) Fourth Quarter 2007 (unaudited) ($ in millions)
December 31, -------------------------------------------------------------------- 2007 2006 2005 2004 2003 ------------ ------------ ------------ ------------ ------------ REVENUES Premiums $ 798.3 $ 839.7 $ 928.7 $ 990.6 $ 1,042.2 Insurance, Investment Management and Product Fees 653.2 560.6 501.8 550.0 541.4 Mutual Fund Ancillary Fees and Other Revenue 67.7 54.8 46.5 46.9 44.8 Net Investment Income 1,060.4 1,049.9 1,100.3 1,074.0 1,109.9 Unrealized Gain on Trading Equity Securities 85.9 Net Realized Investment Gains (Losses) (6.8) 76.5 34.2 10.8 (98.5) ------------ ------------ ------------ ------------ ------------ Total Revenues 2,572.8 2,581.5 2,611.5 2,758.2 2,639.8 ------------ ------------ ------------ ------------ ------------ BENEFITS AND EXPENSES Policy Benefits and Increase in Policy Liabilities 1,303.7 1,331.5 1,376.7 1,422.2 1,454.0 Policyholder Dividends 380.0 399.1 364.4 404.7 418.8 Policy Acquisition Cost Amortization 198.7 148.7 132.1 110.2 94.1 Intangible Asset Impairments 32.5 10.6 Intangible Asset Amortization 30.4 32.0 33.8 33.8 33.2 Interest Expense on Indebtedness 44.2 49.2 46.6 40.8 39.6 Interest Expense on Non-recourse Collateralized Obligations 15.4 18.7 29.4 33.6 48.9 Other Operating Expenses 439.9 428.4 482.9 565.8 568.8 ------------ ------------ ------------ ------------ ------------ Total Expenses 2,412.3 2,440.1 2,476.5 2,611.1 2,657.4 ------------ ------------ ------------ ------------ ------------ Income (Loss) from Continuing Operations before Income Taxes, Minority Interest and equity in undistributed losses of affiliates 160.5 141.4 135.0 147.1 (17.6) Applicable Income Taxes (Benefit) 33.1 42.6 27.1 46.0 (18.3) ------------ ------------ ------------ ------------ ------------ Income from Continuing Operations before Minority Interest and equity in undistributed losses of affiliates 127.4 98.8 107.9 101.1 0.7 Minority Interest in Net Income of Subsidiaries (0.4) Equity in undistributed losses of affiliates (10.4) (1.8) ------------ ------------ ------------ ------------ ------------ Income (Loss) from Continuing Operations 127.4 98.8 107.9 90.7 (1.5) Discontinued Operations: Income (Loss) from Discontinued Operations (3.5) 1.1 0.5 (4.3) (4.7) ------------ ------------ ------------ ------------ ------------ Net Income (Loss) $ 123.9 $ 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) Fourth Quarter 2007 (unaudited) ($ in millions) Quarters Ended
2006 2007 ----------------------------------------------- ----------------------------------------------- March June September December March June September December ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- REVENUES Premiums $ 207.5 $ 207.7 $ 212.1 $ 212.4 $ 194.7 $ 193.1 $ 197.5 $ 213.0 Insurance, Investment Management and Product Fees 135.7 136.5 144.5 143.9 150.7 155.8 164.5 182.2 Mutual Fund Ancillary Fees and Other Revenue 12.0 12.4 16.2 14.2 16.7 17.2 17.0 16.8 Net Investment Income 251.2 255.5 261.1 282.1 276.5 262.8 261.1 260.0 Net Realized Investment Gains (Losses) 33.2 17.4 3.1 22.8 24.5 (1.9) 3.9 (33.2) ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- Total Revenues 639.6 629.5 637.0 675.4 663.1 627.0 644.0 638.8 ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- BENEFITS AND EXPENSES Policy Benefits and Increase in Policy Liabilities 333.9 333.3 333.3 331.0 317.3 316.5 330.8 339.1 Policyholder Dividends 106.8 95.1 88.0 109.2 103.8 90.3 98.1 87.8 Policy Acquisition Cost Amortization 30.0 43.5 44.7 30.5 43.5 45.9 47.1 62.2 Intangible Asset Impairments 32.5 Intangible Asset Amortization 8.0 8.5 7.7 7.8 7.6 7.5 7.5 7.8 Interest Expense on Indebtedness 12.4 12.3 12.1 12.4 9.5 11.6 11.5 11.6 Interest Expense on Non-recourse Collateralized Obligations 4.4 5.1 4.8 4.4 4.0 4.1 3.9 3.4 Other Operating Expenses 112.7 104.8 101.5 109.4 106.8 116.0 102.3 114.9 ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- Total Expenses 640.7 602.6 592.1 604.7 592.5 591.9 601.2 626.8 ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- Income (Loss) from Continuing Operations before Income Taxes (1.1) 26.9 44.9 70.7 70.6 35.1 42.8 12.0 Applicable Income Taxes (Benefit) (2.8) 7.7 10.9 26.8 20.8 2.3 7.2 2.8 ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- Income from Continuing Operations 1.7 19.2 34.0 43.9 49.8 32.8 35.6 9.2 Discontinued Operations: Income (Loss) from Discontinued Operations 0.4 0.3 0.4 0.8 0.4 (4.7) ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- Net Income $ 1.7 $ 19.6 $ 34.3 $ 44.3 $ 50.6 $ 33.2 $ 35.6 $ 4.5 =========== =========== =========== =========== =========== =========== =========== ===========
(1) Certain reclassifications have been made to prior periods to conform with the current presentation. 24 THE PHOENIX COMPANIES, INC. CONSOLIDATING FOURTH QUARTER 2007 INCOME STATEMENT Fourth Quarter 2007 (unaudited) ($ in millions)
Year-to-Date December 31, 2007 Operating Income Exclusions from Operating Income --------------------------------------- -------------------------------------- Corporate Realized Asset & Investment Intra-Segment Consolidated Life & Annuity Management Other Gains/Losses Other Eliminations ------------ -------------- ---------- ---------- ------------- -------- ------------- REVENUES Premiums $ 798.3 $ 798.3 Insurance, Investment Management and Product Fees 653.2 506.7 $ 147.4 $ (0.4) $ (0.5) Mutual Fund Ancillary Fees and Other Revenue 67.7 67.7 Net Investment Income 1,060.4 1,011.4 1.6 30.2 $ 5.1 12.1 Net Realized Investment Losses (6.8) $ (6.8) ------------ ------------ ---------- ---------- ---------- -------- --------- Total Revenues 2,572.8 2,316.4 216.7 29.8 (6.8) 5.1 11.6 ------------ ------------ ---------- ---------- ---------- -------- --------- BENEFITS AND EXPENSES Policy Benefits and Increase in Policy Liabilities 1,303.7 1,296.5 7.2 Policyholder Dividends 380.0 375.6 4.4 Policy Acquisition Cost Amortization 198.7 198.5 0.2 Intangible Asset Amortization 30.4 30.4 Interest Expense on Indebtedness 44.2 44.2 Interest Expense on Non-recourse Collateralized Obligations 15.4 15.4 Other Operating Expenses 439.9 230.1 178.9 10.5 3.7 5.1 11.6 ------------ ------------ ---------- ---------- ---------- -------- --------- Total Expenses 2,412.3 2,100.7 209.3 77.3 8.3 5.1 11.6 ------------ ------------ ---------- ---------- ---------- -------- --------- Income (Loss) from Continuing Operations before Income Taxes 160.5 215.7 7.4 (47.5) (15.1) 0.0 0.0 Applicable Income Taxes (Benefit) 33.1 66.5 3.3 (29.5) (7.2) ------------ ------------ ---------- ---------- ---------- -------- --------- Income (Loss) from Continuing Operations $ 127.4 $ 149.2 $ 4.1 $ (18.0) $ (7.9) $ 0.0 $ 0.0 ============ ============ ========== ========== ========== ======== =========
25 THE PHOENIX COMPANIES, INC. CONDENSED CONSOLIDATED BALANCE SHEET -- PRELIMINARY Fourth Quarter 2007 (unaudited) ($ in millions, except par value)
December 31, ------------------------------------------------------------------------- 2007 2006 2005 2004 2003 ------------- ------------- ------------- ------------- ------------- ASSETS: Available-for-Sale Debt Securities, at fair value $ 11,970.0 $ 12,696.8 $ 13,404.6 $ 13,476.3 $ 13,273.0 Available-for-Sale Equity Securities, at fair value 205.3 187.1 181.8 304.3 312.0 Trading Equity Securities, at fair value 87.3 Mortgage Loans, at unpaid principal balances 15.6 71.9 128.6 207.9 284.1 Policy Loans, at unpaid principal balances 2,380.5 2,322.0 2,245.0 2,196.7 2,241.4 Venture Capital Partnerships, at equity in net assets 173.7 116.8 145.1 255.3 234.9 Affiliate Equity and Debt Securities, at cost plus equity in undistributed earnings 41.8 Other Investments 417.1 308.3 310.6 371.8 402.0 ------------- ------------- ------------- ------------- ------------- 15,162.2 15,702.9 16,415.7 16,899.6 16,789.2 Available-for-Sale Investments Pledged as Collateral, at fair value 219.1 267.8 304.4 1,278.8 1,350.0 ------------- ------------- ------------- ------------- ------------- Total Investments 15,381.3 15,970.7 16,720.1 18,178.4 18,139.2 Cash and Cash Equivalents 577.7 404.9 301.5 435.0 447.9 Deferred Policy Acquisition Costs 2,081.2 1,752.7 1,556.0 1,429.9 1,367.7 Goodwill and Other Intangible Assets 692.7 708.6 763.5 735.6 755.0 Other Assets 653.7 711.7 649.0 630.1 766.2 Separate Account Assets 10,820.3 9,458.6 7,722.2 6,950.3 6,083.2 ------------- ------------- ------------- ------------- ------------- Total Assets $ 30,206.9 $ 29,007.2 $ 27,712.3 $ 28,359.3 $ 27,559.2 ============= ============= ============= ============= ============= LIABILITIES: Policy Liabilities and Accruals $ 13,791.2 $ 13,515.6 $ 13,246.2 $ 13,132.4 $ 13,088.6 Policyholder Deposit Funds 1,808.9 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 551.0 539.1 534.3 583.9 557.1 Non-recourse Collateralized Debt Obligation Liabilities 317.9 344.0 389.9 1,355.2 1,472.0 Separate Account Liabilities 10,820.3 9,458.6 7,722.2 6,950.3 6,083.2 ------------- ------------- ------------- ------------- ------------- Total Liabilities and minority interest 27,917.0 26,771.1 25,705.2 26,336.9 25,611.4 ------------- ------------- ------------- ------------- ------------- STOCKHOLDERS' EQUITY: Common stock, $.01 par value, 1.0 billion shares authorized; 114,290,922 shares outstanding (December 31, 2007) 1.3 1.3 1.1 1.0 1.0 Additional paid in capital 2,616.1 2,600.2 2,437.6 2,431.6 2,427.8 Accumulated Earnings (Deficit) (9.8) (111.3) (193.1) (285.7) (355.3) Treasury stock, at cost: 11,313,564 shares (December 31, 2007) (179.5) (179.5) (179.5) (182.6) (189.4) Accumulated Other Comprehensive Income (Loss) (138.2) (74.6) (59.0) 58.1 63.7 ------------- ------------- ------------- ------------- ------------- Total Stockholders' Equity 2,289.9 2,236.1 2,007.1 2,022.4 1,947.8 ------------- ------------- ------------- ------------- ------------- Total Liabilities, Minority Interest and Stockholders' Equity $ 30,206.9 $ 29,007.2 $ 27,712.3 $ 28,359.3 $ 27,559.2 ============= ============= ============= ============= =============
26 THE PHOENIX COMPANIES, INC. GENERAL ACCOUNT INVESTMENT PORTFOLIO SUMMARY (1) Fourth Quarter 2007 (unaudited) ($ millions)
Total Debt Securities Public Debt Securities Private Debt Securities ---------------------------- -------------------------- -------------------------- 12/31/07 12/31/06 12/31/07 12/31/06 12/31/07 12/31/06 ------------- ------------- ------------ ------------ ------------ ------------ DEBT SECURITIES BY CREDIT QUALITY (CARRYING VALUE) AAA/AA/A $ 7,483.0 $ 7,897.2 $ 5,960.0 $ 6,214.1 $ 1,523.0 $ 1,683.1 BBB 3,569.5 3,743.7 1,999.7 2,345.4 1,569.8 1,398.3 ------------- ------------- ------------ ------------ ------------ ------------ Total Investment Grade 11,052.5 11,640.9 7,959.7 8,559.5 3,092.8 3,081.4 ------------- ------------- ------------ ------------ ------------ ------------ BB 604.3 765.7 507.7 665.7 96.6 100.0 B 227.3 221.4 179.3 175.2 48.0 46.2 CCC and Lower 81.2 53.2 33.8 38.7 47.4 14.5 In or Near Default 13.1 15.6 6.1 10.1 7.0 5.5 ------------- ------------- ------------ ------------ ------------ ------------ Total Debt Securities $ 11,978.4 $ 12,696.8 $ 8,686.6 $ 9,449.2 $ 3,291.8 $ 3,247.6 ============= ============= ============ ============ ============ ============ % Below Investment Grade 7.7% 8.3% 8.4% 9.4% 6.0% 5.1% - --------------------------------------------------------------------------------------------------------------------------------- UNREALIZED GAINS AND LOSSES ON DEBT AND EQUITY SECURITIES As of 12/31/07 Total Outside Closed Block Closed Block ---------------------------- -------------------------- -------------------------- Gains Losses Gains Losses Gains Losses ------------- ------------- ------------ ------------ ------------ ------------ Total Debt Securities $ 269.2 $ (362.0) $ 73.6 $ (190.9) $ 195.6 $ (171.1) Equity Securities 37.0 (4.7) 8.1 (0.6) 28.9 (4.1) ------------- ------------- ------------ ------------ ------------ ------------ Total Unrealized Gains (Losses) 306.2 (366.7) 81.7 (191.5) 224.5 (175.2) ------------- ------------- ------------ ------------ ------------ ------------ Applicable PDO 224.5 (175.2) 224.5 (175.2) Applicable DAC (Credit) 32.3 (93.1) 32.3 (93.1) Applicable Deferred Income Tax (Benefit) 17.3 (34.4) 17.3 (34.4) ------------- ------------- ------------ ------------ ------------ ------------ Total Offsets to Net Unrealized Gains (Losses) 274.1 (302.7) 49.6 (127.5) 224.5 (175.2) ------------- ------------- ------------ ------------ ------------ ------------ Net Unrealized Gains (Losses) $ 32.1 $ (64.0) $ 32.1 $ (64.0) $ 0.0 $ 0.0 ============= ============= ============ ============ ============ ============ Net Unrealized Losses $ (31.9) $ (31.9) $ 0.0 ============= ============ ============
(1) Excludes debt and equity securities pledged as collateral. 27 THE PHOENIX COMPANIES, INC. GENERAL ACCOUNT GAAP NET INVESTMENT INCOME YIELDS (1) Fourth Quarter 2007 (unaudited) ($ in millions) Quarters ended
December 31, ------------------------------------------------------------------------- 2007 2006 2005 2004 2003 ------------- ------------- ------------- ------------- ------------- GAAP NET INVESTMENT INCOME Debt Securities $ 774.4 $ 800.7 $ 804.6 $ 772.1 $ 765.5 Equity Securities 8.2 7.0 7.5 4.5 4.6 Mortgages 1.7 6.2 20.2 22.5 32.6 Policy Loans 179.5 169.3 165.8 167.1 171.7 Venture Capital 27.0 3.3 23.8 25.5 49.1 Cash & Cash Equivalents 18.8 16.3 7.6 4.9 7.0 Other Income 8.3 Other Investments (2) 43.9 40.0 47.8 48.8 35.0 ------------- ------------- ------------- ------------- ------------- Total Cash and Invested Assets 1,061.8 1,042.8 1,077.3 1,045.4 1,065.5 ============= ============= ============= ============ ============= Discontinued Operations 7.5 6.6 4.8 3.6 2.1 Investment Expenses 9.6 5.3 6.1 7.9 5.4 ------------- ------------- ------------- ------------- ------------- Total Net Investment Income $ 1,044.7 $ 1,030.9 $ 1,066.4 $ 1,033.9 $ 1,058.0 ============= ============= ============= ============= ============= ANNUALIZED YIELDS Debt Securities 6.6% 6.5% 6.2% 5.9% 6.0% Equity Securities 4.1% 3.7% 3.0% 1.3% 1.4% Mortgages 11.0% 8.1% 15.3% 11.0% 11.2% Policy Loans 7.9% 7.6% 7.7% 7.9% 8.0% Venture Capital 17.3% 2.7% 12.8% 10.9% 23.0% Cash & Cash Equivalents 4.1% 4.7% 5.2% 1.1% 1.3% Other Investments (2) 11.6% 13.6% 16.4% 7.5% 10.5% ------------- ------------- ------------- ------------- ------------- Total Cash and Invested Assets 7.0% 6.7% 6.6% 6.1% 6.4% ============= ============= ============= ============= ============= Investment Expenses and Discontinued Operations 0.1% 0.1% 0.1% 0.1% 0.1% ------------- ------------- ------------- ------------- ------------- Total Net Investment Income yields 6.9% 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) Fourth Quarter 2007 (unaudited) ($ in millions) Quarters ended
2006 2007 ----------------------------------------------- ------------------------------------------------ March June September December March June September December --------- --------- --------- --------- --------- --------- --------- --------- GAAP NET INVESTMENT INCOME Debt Securities $ 195.1 $ 199.0 $ 199.2 $ 207.4 $ 194.0 $ 194.9 $ 195.7 $ 189.8 Equity Securities 0.5 1.3 1.4 3.8 2.4 2.1 0.9 2.8 Mortgages 0.9 2.3 1.6 1.4 0.7 0.4 0.3 0.3 Policy Loans 41.1 41.5 43.7 43.0 44.1 43.8 45.5 46.1 Venture Capital (2.4) 1.4 1.3 3.0 7.8 6.3 7.9 5.0 Cash & Cash Equivalents 3.3 4.5 4.3 4.2 4.9 4.7 4.3 4.9 Other Income 4.6 1.2 (0.5) 3.0 Other Investments (2) 10.3 3.0 8.1 18.6 19.0 9.7 6.3 8.9 --------- --------- --------- --------- --------- --------- --------- --------- Total Cash and Invested Assets 248.8 253.0 259.6 281.4 277.5 263.1 260.4 260.8 ========= ========= ========= ========= ========= ========= ========= ========= Discontinued Operations 0.7 2.0 1.9 2.0 2.7 1.8 0.7 2.3 Investment Expenses 1.4 0.7 1.5 1.7 2.3 2.7 2.5 2.1 --------- --------- --------- --------- --------- --------- --------- --------- Total Net Investment Income $ 246.7 $ 250.3 $ 256.2 $ 277.7 $ 272.5 $ 258.6 $ 257.2 $ 256.4 ========= ========= ========= ========= ========= ========= ========= ========= ANNUALIZED YIELDS Debt Securities 6.1% 6.4% 6.5% 6.7% 6.3% 6.4% 6.6% 6.5% Equity Securities 1.1% 2.9% 2.9% 8.1% 5.2% 4.3% 1.8% 5.6% Mortgages 3.0% 9.2% 7.3% 7.3% 6.4% 9.2% 7.1% 7.6% Policy Loans 7.6% 7.5% 7.9% 7.7% 7.9% 7.8% 8.0% 8.1% Venture Capital -7.1% 4.8% 4.3% 10.3% 27.5% 18.8% 22.2% 12.6% Cash & Cash Equivalents 4.1% 5.0% 5.1% 4.9% 5.4% 5.5% 4.9% 4.3% Other Investments (2) 13.6% 3.7% 10.6% 26.9% 26.6% 12.1% 7.2% 9.3% --------- --------- --------- --------- --------- --------- --------- --------- Total Cash and Invested Assets 6.2% 6.4% 6.7% 7.2% 7.2% 6.9% 6.9% 6.9% ========= ========= ========= ========= ========= ========= ========= ========= Investment Expenses and Discontinued Operations 0.1% 0.0% 0.1% 0.0% 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% 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 Fourth Quarter 2007 (unaudited) ($ Millions)
December 31, ---------------------------------------------------------- 2007 2006 2005 2004 2003 --------- --------- --------- --------- ---------- REALIZED INVESTMENT GAINS AND LOSSES Debt Security Impairments $ (46.7) $ (7.9) $ (31.2) $ (15.5) $ (76.1) Equity Security Impairments (0.5) (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 (3.9) (3.3) (9.9) --------- --------- --------- --------- ---------- Total Impairment Losses (51.9) (8.9) (35.3) (49.5) (210.8) --------- --------- --------- --------- ---------- Debt Security Net Transaction Gains (Losses) 11.6 42.0 (18.0) 28.4 64.7 Equity Security Net Transaction Gains 9.5 21.9 2.9 14.6 49.2 Venture Capital Net Investment Gains (Losses) 2.4 (13.9) (9.7) Mortgage Loan Net Transaction Gains (Losses) 1.4 3.2 0.2 (1.3) Affiliate Equity Security Transactions Gains 13.7 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 5.7 5.5 6.6 6.3 9.6 Debt and Equity Securities Pledged as Collateral 1.8 2.5 --------- --------- --------- --------- ---------- Total Net Transactions Gains 45.1 85.4 69.5 48.7 112.3 --------- --------- --------- --------- ---------- Net Realized Investment Gains (Losses) (6.8) 76.5 34.2 (0.8) (98.5) ========= ========= ========= ========= ========== Closed Block Applicable PDO (Reduction) 4.4 46.0 (12.4) 3.7 (5.9) Applicable Deferred Acquisition Costs (Credit) 0.2 (3.5) 17.6 (0.4) (4.1) Applicable Deferred Income Tax (Credit) (4.3) 11.7 9.2 3.1 (35.6) --------- --------- --------- --------- ---------- Net Realized Investment Gains (Losses) Included in Net Income $ (7.1) $ 22.3 $ 19.8 $ (7.2) $ (52.9) ========= ========= ========= ========= ==========
30 THE PHOENIX COMPANIES, INC. GENERAL ACCOUNT REALIZED INVESTMENT GAINS AND LOSSES Fourth Quarter 2007 (unaudited) ($ Millions) Quarters ended
2006 2007 ----------------------------------------- --------------------------------------------- March June September December March June September December -------- -------- --------- -------- -------- --------- --------- ---------- REALIZED INVESTMENT GAINS AND LOSSES Debt Security Impairments $ (0.9) $ (2.4) $ (1.6) $ (3.0) $ (1.0) $ (13.6) $ (3.8) $ (28.3) Equity Security Impairments (0.1) (0.3) (0.1) Debt and Equity Securities Pledged as Collateral Impairments (0.8) Other Invested Asset Impairments (1.3) (2.6) -------- -------- --------- -------- -------- --------- --------- ---------- Total Impairment Losses (0.9) (2.4) (1.6) (3.0) (1.0) (14.5) (5.4) (31.0) -------- -------- --------- -------- -------- --------- --------- ---------- Debt Security Net Transaction Gains (Losses) 16.1 15.0 2.8 8.1 3.4 5.4 5.5 (2.7) Equity Security Net Transaction Gains 3.5 1.4 17.0 1.3 2.6 2.8 2.8 Venture Capital Net Investment Gains (Losses) 3.8 0.4 (1.8) Mortgage Loan Net Transaction Gains 3.2 1.4 Affiliate Equity Security Transactions Gains 10.0 0.4 13.7 Real Estate Net Transaction Gains (Losses) 0.1 0.1 (0.2) 1.5 (0.1) Other Invested Asset Net Transactions Gains (Losses) 2.2 0.4 0.2 2.7 4.0 4.0 0.5 (2.8) Debt and Equity Securities Pledged as Collateral (1.0) 0.1 0.1 (0.2) 0.2 0.7 0.5 0.4 -------- -------- --------- -------- -------- --------- --------- ---------- Total Net Transactions Gains (Losses) 34.1 19.8 4.7 25.8 25.5 12.6 9.3 (2.3) -------- -------- --------- -------- -------- --------- --------- ---------- Net Realized Investment Gains (Losses) 33.2 17.4 3.1 22.8 24.5 (1.9) 3.9 (33.3) ======== ======== ========= ======== ======== ========= ========= ========== Closed Block Applicable PDO (Reduction) 19.2 13.4 6.0 7.4 6.6 (1.3) 1.1 (2.0) Applicable Deferred Acquisition Costs (Credit) (2.6) (0.2) (1.1) 0.4 (0.4) 0.3 0.4 (0.1) Applicable Deferred Income Tax (Credit) 6.2 1.2 (0.7) 5.0 3.9 0.4 0.7 (9.3) -------- -------- --------- -------- -------- --------- --------- ---------- Net Realized Investment Gains (Losses) Included in Net Income $ 10.4 $ 3.0 $ (1.1) $ 10.0 $ 14.4 $ (1.3) $ 1.7 $ (21.9) ======== ======== ========= ======== ======== ========= ========= ==========
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