Delaware
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001-16517
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06-1599088
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(State or other jurisdiction of incorporation)
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(Commission File Number)
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(IRS Employer Identification No.)
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One American Row, Hartford, CT
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06102 -5056
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(Address of Principal Executive Offices)
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(Zip Code)
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NOT APPLICABLE
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(Former name or former address, if changed since last report)
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o
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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o
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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o
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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o
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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THE PHOENIX COMPANIES, INC.
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Date: October 17, 2014
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By:
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/s/ Bonnie J. Malley
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Name: |
Bonnie J. Malley
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Title: |
Executive Vice President and Chief Financial Officer
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N E W S R E L E A SE
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![]() |
For Immediate Release
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One American Row
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PO Box 5056
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Hartford CT 06102-5056
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www.phoenixwm.com
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Contacts:
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Media Relations
Alice S. Ericson, 860-403-5946
alice.ericson@phoenixwm.com
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Investor Relations
Naomi Baline Kleinman, 860-403-7100
pnx.ir@phoenixwm.com
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●
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Restatement expenses of $32.9 million incurred and 2014 audit fees of $6.3 million accrued during the first quarter of 2014.
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●
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Net realized investment losses, primarily in derivatives that hedge the fixed indexed annuity block, that were largely the result of interest rate declines and partially offset by decreases in certain reserves and deferred acquisition cost (DAC) amortization.
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●
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Strong net investment income from alternative investments and minimal impairments partially offset the negative performance.
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($ in millions, except per share data)
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First Quarter 2014
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First Quarter 2013
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||||||
Net loss
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$ | (32.3 | ) | $ | (68.8 | ) | ||
Less: Net income (loss) attributable to noncontrolling interests
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1.0 | (0.1 | ) | |||||
Net loss attributable to The Phoenix Companies, Inc.
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$ | (33.3 | ) | $ | (68.7 | ) | ||
EARNINGS PER SHARE SUMMARY:
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Net loss attributable to The Phoenix Companies, Inc.
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||||||||
Basic
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$ | (5.80 | ) | $ | (12.02 | ) | ||
Diluted
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$ | (5.80 | ) | $ | (12.02 | ) | ||
Net loss
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||||||||
Basic
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$ | (5.47 | ) | $ | (11.72 | ) | ||
Diluted
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$ | (5.47 | ) | $ | (11.72 | ) | ||
Weighted average shares outstanding (in thousands)
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||||||||
Basic
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5,742 | 5,715 | ||||||
Diluted
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5,742 | 5,715 |
($ in millions, unless noted otherwise)
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As of or for the Qtr Ended Mar. 31, 2014
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As of or for the Qtr Ended Dec. 31, 2013
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As of or for the Qtr Ended
Mar. 31, 2013
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Annuity deposits
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$ | 170.4 | $ | 168.7 | $ | 173.7 | ||||||
Net annuity flows (deposits less surrenders)
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$ | (2.3 | ) | $ | 9.3 | $ | 40.0 | |||||
Annuity funds under management ($ in billions)
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$ | 5.5 | $ | 5.5 | $ | 5.2 | ||||||
Life insurance annualized premium
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$ | 0.5 | $ | 0.5 | $ | 0.4 | ||||||
Gross life insurance in force ($ in billions)
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$ | 102.4 | $ | 104.2 | $ | 110.9 | ||||||
Total individual life surrenders (annualized)
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4.8 | % | 4.8 | % | 5.1 | % | ||||||
Total closed block life surrenders (annualized)
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4.7 | % | 4.3 | % | 4.6 | % | ||||||
Total annuity surrenders (annualized)
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12.5 | % | 11.7 | % | 10.4 | % | ||||||
Holding company cash and non-affiliated securities
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$ | 175.6 | $ | 181.5 | $ | 190.0 | ||||||
Saybrus Partners EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization)
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$ | 0.4 | $ | 1.9 | $ | - | ||||||
Saybrus Partners revenue
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$ | 7.3 | $ | 8.4 | $ | 5.8 |
●
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First quarter 2014 mortality was favorable compared with expectations, driven by universal life results in the open block. Closed block mortality experience also was favorable.
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Fourth quarter 2013 mortality was favorable compared with expectations, driven by universal life results in the open block. Closed block experience was modestly unfavorable.
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First quarter 2013 mortality was in line with expectations, with favorable experience in the open block, driven by universal life results, and slightly unfavorable experience in the closed block.
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Balance Sheet ($ in millions)
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Mar. 31, 2014
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Dec. 31, 2013
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Change
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Total Assets
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$ | 21,732.8 | $ | 21,624.6 | $ | 108.2 | ||||||
Total Liabilities
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$ | 21,191.5 | $ | 21,040.9 | $ | 150.6 | ||||||
Indebtedness
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$ | 378.8 | $ | 378.8 | -- | |||||||
Total Stockholders’ Equity
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$ | 541.3 | $ | 583.7 | $ | (42.4 | ) |
●
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Phoenix expects to file its second quarter 2014 Form 10-Q with the SEC no later than Oct. 24, 2014 and return to current SEC filer status with the filing of its third quarter 2014 Form 10-Q with the SEC no later than Dec. 5, 2014.
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PHL Variable expects to file its first and second quarter 2014 Forms 10-Q with the SEC no later than Oct. 21 and 28, 2014, respectively, and return to current SEC filer status with its third quarter 2014 Form 10-Q with the SEC no later than Dec. 12, 2014.
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March 31, 2014
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December 31, 2013
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ASSETS:
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Available-for-sale debt securities, at fair value (amortized cost of $11,443.3 and $11,418.0)
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$ | 12,002.1 | $ | 11,808.6 | ||||
Available-for-sale equity securities, at fair value (cost of $40.8 and $40.4)
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64.1 | 61.8 | ||||||
Short-term investments
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571.0 | 361.6 | ||||||
Limited partnerships and other investments
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569.5 | 561.9 | ||||||
Policy loans, at unpaid principal balances
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2,353.7 | 2,350.3 | ||||||
Derivative instruments
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172.7 | 243.1 | ||||||
Fair value investments
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215.2 | 210.8 | ||||||
Total investments
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15,948.3 | 15,598.1 | ||||||
Cash and cash equivalents
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424.5 | 496.4 | ||||||
Accrued investment income
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176.0 | 170.4 | ||||||
Reinsurance recoverable
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616.0 | 603.3 | ||||||
Deferred policy acquisition costs
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892.4 | 940.6 | ||||||
Deferred income taxes, net
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47.4 | 70.0 | ||||||
Other assets
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278.8 | 299.9 | ||||||
Discontinued operations assets
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41.4 | 43.6 | ||||||
Separate account assets
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3,308.0 | 3,402.3 | ||||||
Total assets
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$ | 21,732.8 | $ | 21,624.6 | ||||
LIABILITIES:
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Policy liabilities and accruals
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$ | 12,425.8 | $ | 12,437.6 | ||||
Policyholder deposit funds
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3,540.0 | 3,429.7 | ||||||
Dividend obligations
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819.8 | 705.9 | ||||||
Indebtedness
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378.8 | 378.8 | ||||||
Pension and postretirement liabilities
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309.4 | 315.9 | ||||||
Other liabilities
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373.0 | 333.0 | ||||||
Discontinued operations liabilities
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36.7 | 37.7 | ||||||
Separate account liabilities
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3,308.0 | 3,402.3 | ||||||
Total liabilities
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$ | 21,191.5 | $ | $21,040.9 | ||||
CONTINGENCIES AND COMMITMENTS (Notes 20 & 21)
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STOCKHOLDERS’ EQUITY:
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Common stock, $.01 par value: 5.7 million and 5.7 million shares outstanding
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0.1 | 0.1 | ||||||
Additional paid-in capital
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2,633.1 | 2,633.1 | ||||||
Accumulated other comprehensive income (loss)
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(195.4 | ) | (185.2 | ) | ||||
Accumulated deficit
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(1,725.4 | ) | (1,692.1 | ) | ||||
Treasury stock, at cost: 0.7 million and 0.7 million shares
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(182.9 | ) | (182.9 | ) | ||||
Total The Phoenix Companies, Inc. stockholders’ equity
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529.5 | 573.0 | ||||||
Noncontrolling interests
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11.8 | 10.7 | ||||||
Total stockholders’ equity
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541.3 | 583.7 | ||||||
Total liabilities and stockholders’ equity
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$ | 21,732.8 | $ | 21,624.6 |
Three Months Ended
March 31,
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2014
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2013
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REVENUES:
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Premiums
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$ | 79.6 | $ | 82.7 | ||||
Fee income
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134.8 | 136.3 | ||||||
Net investment income
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213.5 | 191.1 | ||||||
Net realized investment gains (losses):
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Total other-than-temporary impairment (“OTTI”) losses
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— | (0.9 | ) | |||||
Portion of OTTI gains (losses) recognized in other comprehensive income (“OCI”)
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(0.2 | ) | (1.7 | ) | ||||
Net OTTI losses recognized in earnings
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(0.2 | ) | (2.6 | ) | ||||
Net realized investment gains (losses), excluding OTTI losses
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(25.5 | ) | (13.3 | ) | ||||
Net realized investment gains (losses)
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(25.7 | ) | (15.9 | ) | ||||
Total revenues
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402.2 | 394.2 | ||||||
BENEFITS AND EXPENSES:
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Policy benefits
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236.0 | 318.8 | ||||||
Policyholder dividends
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73.8 | 4.4 | ||||||
Policy acquisition cost amortization
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22.4 | 45.3 | ||||||
Interest expense on indebtedness
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7.1 | 7.7 | ||||||
Other operating expenses
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97.9 | 80.8 | ||||||
Total benefits and expenses
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437.2 | 457.0 | ||||||
Income (loss) from continuing operations before income taxes
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(35.0 | ) | (62.8 | ) | ||||
Income tax expense (benefit)
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(3.6 | ) | 4.2 | |||||
Income (loss) from continuing operations
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(31.4 | ) | (67.0 | ) | ||||
Income (loss) from discontinued operations, net of income taxes
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(0.9 | ) | (1.8 | ) | ||||
Net income (loss)
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(32.3 | ) | (68.8 | ) | ||||
Less: Net income (loss) attributable to noncontrolling interests
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1.0 | (0.1 | ) | |||||
Net income (loss) attributable to The Phoenix Companies, Inc.
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$ | (33.3 | ) | $ | (68.7 | ) |
(Continued from previous page)
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Three Months Ended
March 31,
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2014
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2013
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COMPREHENSIVE INCOME (LOSS):
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Net income (loss) attributable to The Phoenix Companies, Inc.
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$ | (33.3 | ) | $ | (68.7 | ) | ||
Net income (loss) attributable to noncontrolling interests
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1.0 | (0.1 | ) | |||||
Net income (loss)
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(32.3 | ) | (68.8 | ) | ||||
Other comprehensive income (loss) before income taxes:
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Unrealized investment gains (losses), net of related offsets
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16.9 | (7.5 | ) | |||||
Net pension liability adjustment
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1.6 | 3.8 | ||||||
Other comprehensive income (loss) before income taxes
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18.5 | (3.7 | ) | |||||
Less: Income tax expense (benefit) related to:
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Unrealized investment gains (losses), net of related offsets
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28.7 | 7.8 | ||||||
Net pension liability adjustment
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— | — | ||||||
Total income tax expense (benefit)
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28.7 | 7.8 | ||||||
Other comprehensive income (loss), net of income taxes
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(10.2 | ) | (11.5 | ) | ||||
Comprehensive income (loss)
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(42.5 | ) | (80.3 | ) | ||||
Less: Comprehensive income (loss) attributable to noncontrolling interests
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1.0 | (0.1 | ) | |||||
Comprehensive income (loss) attributable to The Phoenix Companies, Inc.
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$ | (43.5 | ) | $ | (80.2 | ) | ||
EARNINGS (LOSS) PER SHARE:
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Income (loss) from continuing operations – basic
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$ | (5.47 | ) | $ | (11.72 | ) | ||
Income (loss) from continuing operations – diluted
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$ | (5.47 | ) | $ | (11.72 | ) | ||
Income (loss) from discontinued operations – basic
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$ | (0.16 | ) | $ | (0.31 | ) | ||
Income (loss) from discontinued operations – diluted
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$ | (0.16 | ) | $ | (0.31 | ) | ||
Net income (loss) attributable to The Phoenix Companies, Inc.– basic
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$ | (5.80 | ) | $ | (12.02 | ) | ||
Net income (loss) attributable to The Phoenix Companies, Inc. – diluted
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$ | (5.80 | ) | $ | (12.02 | ) | ||
Basic weighted-average common shares outstanding (in thousands)
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5,742 | 5,715 | ||||||
Diluted weighted-average common shares outstanding (in thousands)
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5,742 | 5,715 |