Delaware | 001-33808 | 20-0978027 | ||
(State or other jurisdiction | (Commission File Number) | (IRS Employer | ||
of incorporation) | Identification Number) |
777 108th Avenue NE, Suite 1200 Bellevue, Washington |
98004 | |
(Address of principal executive offices) | (zip code) |
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
99.1 | Press Release of Symetra Financial Corporation, dated July 28, 2010, announcing second quarter 2010 results. | ||
99.2 | Quarterly Financial Supplement for the quarter ended June 30, 2010. |
SYMETRA FINANCIAL CORPORATION |
||||
By: | /s/ GEORGE C. PAGOS | |||
Name: | George C. Pagos | |||
Title: | Senior Vice President, General Counsel and Secretary |
Exhibit | ||
Number | Description of Exhibit | |
99.1
|
Press Release of Symetra Financial Corporation, dated July 28, 2010, announcing second quarter 2010 results. | |
99.2
|
Quarterly Financial Supplement for the quarter ended June 30, 2010. |
Summary Financial Results | Three Months Ended | Six Months Ended | ||||||||||||||||
(In millions, except per share data) | June 30 | June 30 | ||||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||||
Net Income |
$ | 35.8 | $ | 47.0 | $ | 82.1 | $ | 52.1 | ||||||||||
Per Diluted Share of Common Stock |
$ 0.26 | $ 0.42 | $ 0.61 | $ 0.47 | ||||||||||||||
Adjusted Operating Income |
$ | 41.5 | $ | 45.3 | $ | 83.4 | $ | 77.5 | ||||||||||
Per Diluted Share of Common Stock |
$ 0.30 | $ 0.40 | $ 0.62 | $ 0.69 | ||||||||||||||
| Significantly improved Group loss ratio of 63.8%. | ||
| Higher fixed annuity sales in Retirement Services segment, contributing to record account values. | ||
| Continued interest spread pressure in Income Annuities segment. | ||
| Constrained earnings due to low interest rates and challenging investment environment. | ||
| Impairment losses of $1.5 million compared with losses of $28.5 million in second quarter 2009. | ||
| Equity portfolio losses of $8.8 million versus net gains of $19.6 million a year ago. |
1
Segment Pretax Adjusted Operating Income (Loss) | Three Months Ended | Six Months Ended | ||||||||||||||||
(In millions) | June 30 | June 30 | ||||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||||
Group |
$ | 18.2 | $ | 17.2 | $ | 33.9 | $ | 28.7 | ||||||||||
Retirement Services |
20.6 | 16.1 | 37.9 | 25.1 | ||||||||||||||
Income Annuities |
6.4 | 10.3 | 12.8 | 24.7 | ||||||||||||||
Individual |
19.0 | 18.5 | 42.3 | 35.7 | ||||||||||||||
Other |
(5.0 | ) | 1.6 | (8.9 | ) | (1.7 | ) | |||||||||||
Subtotal |
$ | 59.2 | $ | 63.7 | $ | 118.0 | $ | 112.5 | ||||||||||
Less: Income Taxes* |
17.7 | 18.4 | 34.6 | 35.0 | ||||||||||||||
Adjusted Operating Income |
$ | 41.5 | $ | 45.3 | $ | 83.4 | $ | 77.5 | ||||||||||
* Represents the total provision for income taxes adjusted for the tax effect on net realized investment gains (losses) and on net realized and unrealized investment gains (losses) on fixed index annuity (FIA) options at the U.S. federal income tax rate of 35%. | ||||||||||||||||||
2
3
4
| estimates or projections of revenues, net income (loss), net income (loss) per share, adjusted operating income (loss), adjusted operating income (loss) per share, market share or other financial forecasts; |
5
| trends in operations, financial performance and financial condition; | ||
| financial and operating targets or plans; and | ||
| business and growth strategy. |
| general economic, market or business conditions, including further economic downturns or other adverse conditions in the global and domestic capital and credit markets; | ||
| the availability of capital and financing; | ||
| potential investment losses; | ||
| the effects of fluctuations in interest rates and a prolonged low interest rate environment; | ||
| recorded reserves for future policy benefits and claims subsequently proving to be inadequate or inaccurate; | ||
| deviations from assumptions used in setting prices for insurance and annuity products; | ||
| market pricing and competitive trends related to insurance products and services; | ||
| changes in amortization of deferred policy acquisition costs; | ||
| financial strength or credit ratings downgrades; | ||
| the continued availability and cost of reinsurance coverage; | ||
| changes in laws or regulations, or their interpretation, including those that could increase Symetras business costs and required capital levels; | ||
| the ability of subsidiaries to pay dividends to Symetra; | ||
| the effects of implementation of the Patient Protection and Affordable Care Act; | ||
| the effects of implementation of the Dodd-Frank Wall Street Reform and Consumer Protection Act; and | ||
| the risks that are described from time to time in Symetras filings with the U.S. Securities and Exchange Commission, including those in Symetras 2009 Annual Report on Form 10-K and quarterly reports on Form 10-Q. |
6
Three Months Ended | Six Months Ended | |||||||||||||||
June 30 | June 30 | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
Revenues |
||||||||||||||||
Premiums |
$ | 115.5 | $ | 116.8 | $ | 234.5 | $ | 236.3 | ||||||||
Net investment income |
297.1 | 283.1 | 584.0 | 545.8 | ||||||||||||
Policy fees, contract charges and other |
41.8 | 40.7 | 82.3 | 80.3 | ||||||||||||
Net realized investment gains (losses): |
||||||||||||||||
Total other-than-temporary impairment losses on securities |
(2.7 | ) | (72.2 | ) | (20.6 | ) | (123.8 | ) | ||||||||
Less: portion of losses recognized in other comprehensive income |
1.2 | 43.7 | 9.4 | 67.5 | ||||||||||||
Net impairment losses recognized in earnings |
(1.5 | ) | (28.5 | ) | (11.2 | ) | (56.3 | ) | ||||||||
Other net realized investment gains (losses) |
(8.5 | ) | 31.2 | 8.0 | 16.0 | |||||||||||
Total net realized investment gains (losses) |
(10.0 | ) | 2.7 | (3.2 | ) | (40.3 | ) | |||||||||
Total revenues |
444.4 | 443.3 | 897.6 | 822.1 | ||||||||||||
Benefits and expenses |
||||||||||||||||
Policyholder benefits and claims |
83.3 | 82.1 | 169.5 | 176.5 | ||||||||||||
Interest credited |
221.5 | 213.1 | 440.0 | 408.7 | ||||||||||||
Other underwriting and operating expenses |
64.2 | 62.0 | 123.8 | 125.0 | ||||||||||||
Interest expense |
7.9 | 8.0 | 15.9 | 15.9 | ||||||||||||
Amortization of deferred policy acquisition costs |
17.0 | 11.9 | 32.4 | 22.6 | ||||||||||||
Total benefits and expenses |
393.9 | 377.1 | 781.6 | 748.7 | ||||||||||||
Income from operations before income taxes |
50.5 | 66.2 | 116.0 | 73.4 | ||||||||||||
Provision (benefit) for income taxes |
||||||||||||||||
Current |
17.4 | 9.6 | 27.3 | 11.5 | ||||||||||||
Deferred |
(2.7 | ) | 9.6 | 6.6 | 9.8 | |||||||||||
Total provision for income taxes |
14.7 | 19.2 | 33.9 | 21.3 | ||||||||||||
Net income |
$ | 35.8 | $ | 47.0 | $ | 82.1 | $ | 52.1 | ||||||||
Net income per common share |
||||||||||||||||
Basic |
$ | 0.26 | $ | 0.42 | $ | 0.61 | $ | 0.47 | ||||||||
Diluted |
$ | 0.26 | $ | 0.42 | $ | 0.61 | $ | 0.47 | ||||||||
Weighted-average number of common shares outstanding |
||||||||||||||||
Basic |
137.019 | 111.622 | 134.035 | 111.622 | ||||||||||||
Diluted |
137.038 | 111.622 | 134.056 | 111.622 | ||||||||||||
Cash dividends declared per common share |
$ | 0.05 | $ | | $ | 0.05 | $ | | ||||||||
Non-GAAP financial measures |
||||||||||||||||
Adjusted operating income |
$ | 41.5 | $ | 45.3 | $ | 83.4 | $ | 77.5 | ||||||||
Reconciliation to net income |
||||||||||||||||
Net income |
$ | 35.8 | $ | 47.0 | $ | 82.1 | $ | 52.1 | ||||||||
Less: Net realized investment gains (losses) (net of taxes)* |
(6.6 | ) | 1.8 | (2.1 | ) | (26.2 | ) | |||||||||
Add: Net investment gains (losses)
on FIA options (net of taxes)** |
(0.9 | ) | 0.1 | (0.8 | ) | (0.8 | ) | |||||||||
Adjusted operating income |
$ | 41.5 | $ | 45.3 | $ | 83.4 | $ | 77.5 | ||||||||
*Net realized investment gains (losses) are reported net of taxes of $(3.4), $0.9, $(1.1) and $(14.1) for the three and six months ended June 30, 2010 and 2009, respectively. |
**Net investment gains (losses) on FIA options are reported net of taxes of $(0.4), $0.1, $(0.4) and $(0.4) for the three and six months ended June 30, 2010 and 2009, respectively. |
7
June 30 | December 31 | |||||||
2010 | 2009 | |||||||
Assets |
||||||||
Total investments |
$ | 22,358.6 | $ | 20,183.1 | ||||
Other assets |
1,233.8 | 1,414.3 | ||||||
Separate account assets |
759.0 | 840.1 | ||||||
Total assets |
$ | 24,351.4 | $ | 22,437.5 | ||||
Liabilities and stockholders equity |
||||||||
Policyholder liabilities |
$ | 20,456.9 | $ | 19,463.1 | ||||
Notes payable |
449.0 | 448.9 | ||||||
Other liabilities |
343.7 | 252.1 | ||||||
Separate account liabilities |
759.0 | 840.1 | ||||||
Total liabilities |
22,008.6 | 21,004.2 | ||||||
Common stock and additional paid-in capital |
1,450.7 | 1,166.6 | ||||||
Retained earnings |
391.6 | 316.4 | ||||||
Accumulated other comprehensive income (loss), net of taxes |
501.1 | (49.7 | ) | |||||
Treasury stock |
(0.6 | ) | | |||||
Total stockholders equity |
2,342.8 | 1,433.3 | ||||||
Total liabilities and stockholders equity |
$ | 24,351.4 | $ | 22,437.5 | ||||
Book value per share* |
$ | 17.08 | $ | 12.83 | ||||
Non-GAAP financial measures |
||||||||
Adjusted book value |
$ | 1,841.7 | $ | 1,483.0 | ||||
Reconciliation to stockholders equity |
||||||||
Total stockholders equity |
$ | 2,342.8 | $ | 1,433.3 | ||||
Less: AOCI |
501.1 | (49.7 | ) | |||||
Adjusted book value |
1,841.7 | 1,483.0 | ||||||
Add: Assumed proceeds from exercise of warrants |
218.1 | 218.1 | ||||||
Adjusted book value, as converted |
$ | 2,059.8 | $ | 1,701.1 | ||||
Adjusted book value per share, as converted** |
$ | 15.02 | $ | 15.23 | ||||
*Book value per share is calculated based on stockholders equity divided by outstanding common shares plus shares subject to outstanding warrants, totaling 137,150,784 and 111,705,199 as of June 30, 2010 and December 31, 2009, respectively. |
**Adjusted book value per share, as converted, is calculated based on adjusted book value, as converted, divided by outstanding common shares plus shares subject to outstanding warrants, totaling 137,150,784 and 111,705,199 as of June 30, 2010 and December 31, 2009, respectively. |
8
Three Months Ended | Six Months Ended | |||||||||||||||
June 30 | June 30 | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
Segment pretax adjusted operating income (loss) |
||||||||||||||||
Group |
$ | 18.2 | $ | 17.2 | $ | 33.9 | $ | 28.7 | ||||||||
Retirement Services |
20.6 | 16.1 | 37.9 | 25.1 | ||||||||||||
Income Annuities |
6.4 | 10.3 | 12.8 | 24.7 | ||||||||||||
Individual |
19.0 | 18.5 | 42.3 | 35.7 | ||||||||||||
Other |
(5.0 | ) | 1.6 | (8.9 | ) | (1.7 | ) | |||||||||
Subtotal |
59.2 | 63.7 | 118.0 | 112.5 | ||||||||||||
Add: Net realized investment gains (losses) |
(10.0 | ) | 2.7 | (3.2 | ) | (40.3 | ) | |||||||||
Less: Net investment gains (losses)
on FIA options |
(1.3 | ) | 0.2 | (1.2 | ) | (1.2 | ) | |||||||||
Income from operations before income taxes |
$ | 50.5 | $ | 66.2 | $ | 116.0 | $ | 73.4 | ||||||||
Reconciliation of revenues to operating revenues |
||||||||||||||||
Revenues |
$ | 444.4 | $ | 443.3 | $ | 897.6 | $ | 822.1 | ||||||||
Less: Net realized investment gains (losses) |
(10.0 | ) | 2.7 | (3.2 | ) | (40.3 | ) | |||||||||
Add: Net investment gains (losses)
on FIA options |
(1.3 | ) | 0.2 | (1.2 | ) | (1.2 | ) | |||||||||
Operating revenues |
$ | 453.1 | $ | 440.8 | $ | 899.6 | $ | 861.2 | ||||||||
Twelve Months Ended | ||||||||
June 30 | ||||||||
2010 | 2009 | |||||||
ROE |
9.9% | 7.5% | ||||||
Average stockholders equity* |
$ | 1,598.4 | $ | 561.6 | ||||
Non-GAAP financial measures |
||||||||
Operating ROAE |
9.6% | 10.7% | ||||||
Average adjusted book value** |
$ | 1,598.8 | $ | 1,359.4 |
*Average stockholders equity is derived by averaging ending stockholders equity for the most recent five quarters. |
**Average adjusted book value is derived by averaging ending adjusted book value for the most recent five quarters. |
9
Page | ||||
Financial Highlights |
1 | |||
Consolidated Results |
||||
Consolidated Income Statement Data |
2 | |||
Consolidated Balance Sheet Data |
3 | |||
Segment Income Statement Data |
4 | |||
Segment Results |
||||
Group |
5 | |||
Retirement Services |
6 | |||
Income Annuities |
7 | |||
Individual |
8 | |||
Other |
9 | |||
Additional Financial Data |
||||
Deferred Policy Acquisition Cost (DAC) Roll Forwards |
10 | |||
Account Value and Reserve Roll Forwards |
11 | |||
Overview of Liabilities and Associated Unrealized Gains |
12 | |||
Investments Summary |
13 | |||
Sales by Segment and Product |
14 | |||
Book Value and Adjusted Book Value per Share |
15 | |||
ROE and Operating ROAE |
16 |
For the Three Months Ended | For the Six Months Ended | ||||||||||||||||||||||||||||||||||||||
Jun. 30, | Mar. 31, | Dec. 31, | Sep. 30, | Jun. 30, | Jun. 30, | Jun. 30, | |||||||||||||||||||||||||||||||||
2010 | 2010 | 2009 | 2009 | 2009 | 2010 | 2009 | |||||||||||||||||||||||||||||||||
Net income |
$ | 35.8 | $ | 46.3 | $ | 32.1 | $ | 44.1 | $ | 47.0 | $ | 82.1 | $ | 52.1 | |||||||||||||||||||||||||
Net income per common share 1 |
|||||||||||||||||||||||||||||||||||||||
Basic |
$ | 0.26 | $ | 0.35 | $ | 0.29 | $ | 0.40 | $ | 0.42 | $ | 0.61 | $ | 0.47 | |||||||||||||||||||||||||
Diluted |
$ | 0.26 | $ | 0.35 | $ | 0.29 | $ | 0.40 | $ | 0.42 | $ | 0.61 | $ | 0.47 | |||||||||||||||||||||||||
Weighted-average common shares
outstanding: |
|||||||||||||||||||||||||||||||||||||||
Basic |
137.019 | 131.018 | 111.622 | 111.622 | 111.622 | 134.035 | 111.622 | ||||||||||||||||||||||||||||||||
Diluted |
137.038 | 131.038 | 111.634 | 111.624 | 111.622 | 134.056 | 111.622 | ||||||||||||||||||||||||||||||||
Non-GAAP Financial Measures 2 |
|||||||||||||||||||||||||||||||||||||||
Adjusted operating income |
$ | 41.5 | $ | 41.9 | $ | 32.7 | $ | 37.7 | $ | 45.3 | $ | 83.4 | $ | 77.5 | |||||||||||||||||||||||||
Adjusted operating income per common
share 1: |
|||||||||||||||||||||||||||||||||||||||
Basic |
$ | 0.30 | $ | 0.32 | $ | 0.29 | $ | 0.34 | $ | 0.40 | $ | 0.62 | $ | 0.69 | |||||||||||||||||||||||||
Diluted |
$ | 0.30 | $ | 0.32 | $ | 0.29 | $ | 0.34 | $ | 0.40 | $ | 0.62 | $ | 0.69 | |||||||||||||||||||||||||
As of: | |||||||||||||||||||||||||||||||||||||||
Jun. 30, | Mar. 31, | Dec. 31, | Sep. 30, | Jun. 30, | |||||||||||||||||||||||||||||||||||
Consolidated Balance Sheet Data | 2010 | 2010 | 2009 | 2009 | 2009 | ||||||||||||||||||||||||||||||||||
Total investments |
$ | 22,358.6 | $ | 21,074.3 | $ | 20,183.1 | $ | 20,035.2 | $ | 18,357.0 | |||||||||||||||||||||||||||||
Total assets |
24,351.4 | 23,363.7 | 22,437.5 | 22,226.0 | 21,113.4 | ||||||||||||||||||||||||||||||||||
Notes payable |
449.0 | 448.9 | 448.9 | 448.9 | 448.8 | ||||||||||||||||||||||||||||||||||
Accumulated other comprehensive income (loss) (net of taxes) (AOCI) |
501.1 | 159.5 | (49.7 | ) | 29.8 | (642.9 | ) | ||||||||||||||||||||||||||||||||
Total stockholders equity |
2,342.8 | 1,971.7 | 1,433.3 | 1,480.5 | 763.7 | ||||||||||||||||||||||||||||||||||
U.S. Statutory Financial Information: |
|||||||||||||||||||||||||||||||||||||||
Statutory capital and surplus |
$ | 1,707.1 | $ | 1,666.8 | $ | 1,415.4 | $ | 1,331.7 | $ | 1,289.5 | |||||||||||||||||||||||||||||
Asset valuation reserve (AVR) |
133.8 | 135.6 | 120.5 | 117.3 | 117.1 | ||||||||||||||||||||||||||||||||||
Statutory capital and surplus and AVR |
$ | 1,840.9 | $ | 1,802.4 | $ | 1,535.9 | $ | 1,449.0 | $ | 1,406.6 | |||||||||||||||||||||||||||||
Book value per common share |
$ | 17.08 | $ | 14.39 | $ | 12.83 | $ | 13.25 | $ | 6.84 | |||||||||||||||||||||||||||||
Debt to capital ratio |
16.1% | 18.5% | 23.8% | 23.3% | 37.0% | ||||||||||||||||||||||||||||||||||
Non-GAAP Financial Measures 2 |
|||||||||||||||||||||||||||||||||||||||
Adjusted book value (stockholders equity excluding AOCI) |
$ | 1,841.7 | $ | 1,812.2 | $ | 1,483.0 | $ | 1,450.7 | $ | 1,406.6 | |||||||||||||||||||||||||||||
Adjusted book value per common share : |
|||||||||||||||||||||||||||||||||||||||
Adjusted book value per common share 3 |
$ | 15.58 | $ | 15.35 | $ | 15.99 | $ | 15.65 | $ | 15.18 | |||||||||||||||||||||||||||||
Adjusted book value per common share, as converted 4 |
$ | 15.02 | $ | 14.81 | $ | 15.23 | $ | 14.94 | $ | 14.56 | |||||||||||||||||||||||||||||
Debt to capital ratio, excluding AOCI 5 |
19.6% | 19.9% | 23.2% | 23.6% | 24.2% | ||||||||||||||||||||||||||||||||||
For the Twelve Months Ended | |||||||||||||||||||||||||||||||||||||||
Jun. 30, | Mar. 31, | Dec. 31, | Sep. 30, | Jun. 30, | |||||||||||||||||||||||||||||||||||
2010 | 2010 | 2009 | 2009 | 2009 | |||||||||||||||||||||||||||||||||||
ROE |
9.9% | 14.5% | 15.4% | 13.9% | 7.5% | ||||||||||||||||||||||||||||||||||
Non-GAAP Financial Measure 2 |
|||||||||||||||||||||||||||||||||||||||
Operating ROAE 6 |
9.6% | 10.5% | 10.5% | 10.6% | 10.7% | ||||||||||||||||||||||||||||||||||
1
For the Three Months Ended | For the Six Months Ended | |||||||||||||||||||||||||||||||
Jun. 30, | Mar. 31, | Dec. 31, | Sep. 30, | Jun. 30, | Jun. 30, | Jun. 30, | ||||||||||||||||||||||||||
2010 | 2010 | 2009 | 2009 | 2009 | 2010 | 2009 | ||||||||||||||||||||||||||
Revenues: |
||||||||||||||||||||||||||||||||
Premiums 1 |
$ | 115.5 | $ | 119.0 | $ | 117.2 | $ | 116.6 | $ | 116.8 | $ | 234.5 | $ | 236.3 | ||||||||||||||||||
Net investment income |
297.1 | 286.9 | 284.2 | 283.6 | 283.1 | 584.0 | 545.8 | |||||||||||||||||||||||||
Policy fees, contract charges and other 1 |
41.8 | 40.5 | 39.4 | 40.2 | 40.7 | 82.3 | 80.3 | |||||||||||||||||||||||||
Net realized investment gains (losses): |
||||||||||||||||||||||||||||||||
Total other-than-temporary impairment losses on securities |
(2.7 | ) | (17.9 | ) | (23.3 | ) | (44.1 | ) | (72.2 | ) | (20.6 | ) | (123.8 | ) | ||||||||||||||||||
Less: portion of losses recognized in other comprehensive income |
1.2 | 8.2 | 10.5 | 26.7 | 43.7 | 9.4 | 67.5 | |||||||||||||||||||||||||
Net impairment losses recognized in earnings |
(1.5 | ) | (9.7 | ) | (12.8 | ) | (17.4 | ) | (28.5 | ) | (11.2 | ) | (56.3 | ) | ||||||||||||||||||
Other net realized investment gains (losses) |
(8.5 | ) | 16.5 | 12.5 | 28.7 | 31.2 | 8.0 | 16.0 | ||||||||||||||||||||||||
Total net realized investment gains (losses) |
(10.0 | ) | 6.8 | (0.3 | ) | 11.3 | 2.7 | (3.2 | ) | (40.3 | ) | |||||||||||||||||||||
Total revenues |
444.4 | 453.2 | 440.5 | 451.7 | 443.3 | 897.6 | 822.1 | |||||||||||||||||||||||||
Benefits and expenses: |
||||||||||||||||||||||||||||||||
Policyholder benefits and claims |
83.3 | 86.2 | 88.4 | 85.6 | 82.1 | 169.5 | 176.5 | |||||||||||||||||||||||||
Interest credited |
221.5 | 218.5 | 217.6 | 220.5 | 213.1 | 440.0 | 408.7 | |||||||||||||||||||||||||
Other underwriting and operating expenses |
64.2 | 59.6 | 66.0 | 61.7 | 62.0 | 123.8 | 125.0 | |||||||||||||||||||||||||
Interest expense |
7.9 | 8.0 | 8.0 | 7.9 | 8.0 | 15.9 | 15.9 | |||||||||||||||||||||||||
Amortization of deferred policy acquisition costs |
17.0 | 15.4 | 15.0 | 13.8 | 11.9 | 32.4 | 22.6 | |||||||||||||||||||||||||
Total benefits and expenses |
393.9 | 387.7 | 395.0 | 389.5 | 377.1 | 781.6 | 748.7 | |||||||||||||||||||||||||
Income from operations before income taxes |
50.5 | 65.5 | 45.5 | 62.2 | 66.2 | 116.0 | 73.4 | |||||||||||||||||||||||||
Provision (benefit) for income taxes: |
||||||||||||||||||||||||||||||||
Current |
17.4 | 9.9 | 10.9 | (15.7 | ) | 9.6 | 27.3 | 11.5 | ||||||||||||||||||||||||
Deferred |
(2.7 | ) | 9.3 | 2.5 | 33.8 | 9.6 | 6.6 | 9.8 | ||||||||||||||||||||||||
Total provision for income taxes |
14.7 | 19.2 | 13.4 | 18.1 | 19.2 | 33.9 | 21.3 | |||||||||||||||||||||||||
Net income |
$ | 35.8 | $ | 46.3 | $ | 32.1 | $ | 44.1 | $ | 47.0 | $ | 82.1 | $ | 52.1 | ||||||||||||||||||
Net income per common share2: |
||||||||||||||||||||||||||||||||
Basic |
$ | 0.26 | $ | 0.35 | $ | 0.29 | $ | 0.40 | $ | 0.42 | $ | 0.61 | $ | 0.47 | ||||||||||||||||||
Diluted |
$ | 0.26 | $ | 0.35 | $ | 0.29 | $ | 0.40 | $ | 0.42 | $ | 0.61 | $ | 0.47 | ||||||||||||||||||
Weighted-average number of common shares outstanding: |
||||||||||||||||||||||||||||||||
Basic |
137.019 | 131.018 | 111.622 | 111.622 | 111.622 | 134.035 | 111.622 | |||||||||||||||||||||||||
Diluted |
137.038 | 131.038 | 111.634 | 111.624 | 111.622 | 134.056 | 111.622 | |||||||||||||||||||||||||
Cash dividends declared per common share |
$ | 0.05 | $ | - | $ | - | $ | - | $ | - | $ | 0.05 | $ | - | ||||||||||||||||||
Non-GAAP Financial Measures: |
||||||||||||||||||||||||||||||||
Adjusted operating income |
$ | 41.5 | $ | 41.9 | $ | 32.7 | $ | 37.7 | $ | 45.3 | $ | 83.4 | $ | 77.5 | ||||||||||||||||||
Adjusted operating income per common share2: |
||||||||||||||||||||||||||||||||
Basic |
$ | 0.30 | $ | 0.32 | $ | 0.29 | $ | 0.34 | $ | 0.40 | $ | 0.62 | $ | 0.69 | ||||||||||||||||||
Diluted |
$ | 0.30 | $ | 0.32 | $ | 0.29 | $ | 0.34 | $ | 0.40 | $ | 0.62 | $ | 0.69 | ||||||||||||||||||
Weighted-average number of common shares outstanding: |
||||||||||||||||||||||||||||||||
Basic |
137.019 | 131.018 | 111.622 | 111.622 | 111.622 | 134.035 | 111.622 | |||||||||||||||||||||||||
Diluted |
137.038 | 131.038 | 111.634 | 111.624 | 111.622 | 134.056 | 111.622 | |||||||||||||||||||||||||
Reconciliation to net income: |
||||||||||||||||||||||||||||||||
Net income |
$ | 35.8 | $ | 46.3 | $ | 32.1 | $ | 44.1 | $ | 47.0 | $ | 82.1 | $ | 52.1 | ||||||||||||||||||
Less: Net realized investment gains (losses) (net of taxes) |
(6.6 | ) | 4.5 | (0.2 | ) | 7.3 | 1.8 | (2.1 | ) | (26.2 | ) | |||||||||||||||||||||
Add: Net investment gains (losses) |
||||||||||||||||||||||||||||||||
on FIA options (net of taxes) |
(0.9 | ) | 0.1 | 0.4 | 0.9 | 0.1 | (0.8 | ) | (0.8 | ) | ||||||||||||||||||||||
Adjusted operating income |
$ | 41.5 | $ | 41.9 | $ | 32.7 | $ | 37.7 | $ | 45.3 | $ | 83.4 | $ | 77.5 | ||||||||||||||||||
2
Jun. 30, | Mar. 31, | Dec. 31, | Sep. 30, | Jun. 30, | ||||||||||||||||||
2010 | 2010 | 2009 | 2009 | 2009 | ||||||||||||||||||
Assets |
||||||||||||||||||||||
Investments: |
||||||||||||||||||||||
Available-for-sale securities: |
||||||||||||||||||||||
Fixed maturities, at fair value |
$ | 20,612.2 | $ | 19,390.6 | $ | 18,594.3 | $ | 18,542.3 | $ | 16,933.9 | ||||||||||||
Marketable equity securities, at fair value |
43.9 | 37.6 | 36.7 | 35.4 | 33.6 | |||||||||||||||||
Trading securities: |
||||||||||||||||||||||
Marketable equity securities, at fair value |
141.0 | 151.0 | 154.1 | 140.6 | 116.1 | |||||||||||||||||
Mortgage loans, net |
1,340.3 | 1,228.0 | 1,201.7 | 1,095.2 | 1,038.2 | |||||||||||||||||
Policy loans |
72.3 | 73.4 | 73.9 | 73.9 | 74.1 | |||||||||||||||||
Short-term investments |
2.7 | 54.0 | 2.1 | 2.5 | 2.6 | |||||||||||||||||
Investments in limited partnerships |
136.9 | 130.6 | 110.2 | 133.4 | 151.4 | |||||||||||||||||
Other invested assets |
9.3 | 9.1 | 10.1 | 11.9 | 7.1 | |||||||||||||||||
Total investments |
22,358.6 | 21,074.3 | 20,183.1 | 20,035.2 | 18,357.0 | |||||||||||||||||
Cash and cash equivalents |
322.7 | 389.3 | 257.8 | 241.7 | 435.0 | |||||||||||||||||
Accrued investment income |
251.6 | 247.5 | 237.2 | 243.0 | 230.4 | |||||||||||||||||
Accounts receivable and other receivables |
81.9 | 97.1 | 70.1 | 66.1 | 72.9 | |||||||||||||||||
Reinsurance recoverables |
277.3 | 277.9 | 276.6 | 269.9 | 266.4 | |||||||||||||||||
Deferred policy acquisition costs |
199.0 | 227.5 | 250.4 | 240.8 | 307.4 | |||||||||||||||||
Goodwill |
27.3 | 26.8 | 26.3 | 25.8 | 25.3 | |||||||||||||||||
Current income tax recoverable |
| 19.6 | 20.2 | 25.1 | 2.4 | |||||||||||||||||
Deferred income tax assets, net |
| 69.1 | 191.2 | 150.9 | 546.8 | |||||||||||||||||
Other assets |
74.0 | 80.5 | 84.5 | 77.5 | 89.7 | |||||||||||||||||
Securities lending collateral |
| | | 31.4 | 44.4 | |||||||||||||||||
Separate account assets |
759.0 | 854.1 | 840.1 | 818.6 | 735.7 | |||||||||||||||||
Total assets |
$ | 24,351.4 | $ | 23,363.7 | $ | 22,437.5 | $ | 22,226.0 | $ | 21,113.4 | ||||||||||||
Liabilities and stockholders equity |
||||||||||||||||||||||
Funds held under deposit contracts |
$ | 19,825.7 | $ | 19,222.9 | $ | 18,816.7 | $ | 18,586.1 | $ | 18,139.8 | ||||||||||||
Future policy benefits |
397.0 | 395.8 | 394.9 | 394.7 | 394.3 | |||||||||||||||||
Policy and contract claims |
120.7 | 120.6 | 125.6 | 134.6 | 132.3 | |||||||||||||||||
Unearned premiums |
14.0 | 14.5 | 12.1 | 13.0 | 12.8 | |||||||||||||||||
Other policyholders funds |
99.5 | 108.6 | 113.8 | 90.8 | 138.6 | |||||||||||||||||
Notes payable |
449.0 | 448.9 | 448.9 | 448.9 | 448.8 | |||||||||||||||||
Current income tax payable |
2.1 | | | | | |||||||||||||||||
Deferred income tax liabilities, net |
112.0 | | | | | |||||||||||||||||
Other liabilities |
229.6 | 226.6 | 252.1 | 227.4 | 303.0 | |||||||||||||||||
Securities lending payable |
| | | 31.4 | 44.4 | |||||||||||||||||
Separate account liabilities |
759.0 | 854.1 | 840.1 | 818.6 | 735.7 | |||||||||||||||||
Total liabilities |
22,008.6 | 21,392.0 | 21,004.2 | 20,745.5 | 20,349.7 | |||||||||||||||||
Preferred stock |
| | | | | |||||||||||||||||
Common stock |
1.2 | 1.2 | 0.9 | 0.9 | 0.9 | |||||||||||||||||
Additional paid-in-capital |
1,449.5 | 1,448.3 | 1,165.7 | 1,165.5 | 1,165.5 | |||||||||||||||||
Retained earnings |
391.6 | 362.7 | 316.4 | 284.3 | 240.2 | |||||||||||||||||
Treasury stock |
(0.6 | ) | | | | | ||||||||||||||||
Accumulated other comprehensive income (loss), net of taxes |
501.1 | 159.5 | (49.7 | ) | 29.8 | (642.9 | ) | |||||||||||||||
Total stockholders equity |
2,342.8 | 1,971.7 | 1,433.3 | 1,480.5 | 763.7 | |||||||||||||||||
Total liabilities and stockholders equity |
$ | 24,351.4 | $ | 23,363.7 | $ | 22,437.5 | $ | 22,226.0 | $ | 21,113.4 | ||||||||||||
3
For the Three Months Ended | For the Six Months Ended | |||||||||||||||||||||||||||||||
Jun. 30, | Mar. 31, | Dec. 31, | Sep. 30, | Jun. 30, | Jun. 30, | Jun. 30, | ||||||||||||||||||||||||||
2010 | 2010 | 2010 | 2009 | 2009 | 2010 | 2009 | ||||||||||||||||||||||||||
Operating revenues: |
||||||||||||||||||||||||||||||||
Group |
$ | 113.6 | $ | 116.3 | $ | 114.8 | $ | 115.2 | $ | 116.6 | $ | 229.9 | $ | 234.9 | ||||||||||||||||||
Retirement Services |
118.8 | 112.7 | 111.2 | 109.5 | 99.5 | 231.5 | 184.9 | |||||||||||||||||||||||||
Income Annuities |
104.9 | 104.2 | 104.4 | 104.8 | 107.2 | 209.1 | 213.7 | |||||||||||||||||||||||||
Individual |
107.8 | 105.4 | 105.9 | 105.5 | 105.3 | 213.2 | 208.4 | |||||||||||||||||||||||||
Other |
8.0 | 7.9 | 5.1 | 6.8 | 12.2 | 15.9 | 19.3 | |||||||||||||||||||||||||
Total |
$ | 453.1 | $ | 446.5 | $ | 441.4 | $ | 441.8 | $ | 440.8 | $ | 899.6 | $ | 861.2 | ||||||||||||||||||
Segment pre-tax adjusted operating income (loss): |
||||||||||||||||||||||||||||||||
Group |
$ | 18.2 | $ | 15.7 | $ | 10.7 | $ | 16.0 | $ | 17.2 | $ | 33.9 | $ | 28.7 | ||||||||||||||||||
Retirement Services |
20.6 | 17.3 | 17.3 | 16.2 | 16.1 | 37.9 | 25.1 | |||||||||||||||||||||||||
Income Annuities |
6.4 | 6.4 | 9.4 | 8.3 | 10.3 | 12.8 | 24.7 | |||||||||||||||||||||||||
Individual |
19.0 | 23.3 | 14.7 | 15.9 | 18.5 | 42.3 | 35.7 | |||||||||||||||||||||||||
Other |
(5.0 | ) | (3.9 | ) | (5.7 | ) | (4.1 | ) | 1.6 | (8.9 | ) | (1.7 | ) | |||||||||||||||||||
Total |
$ | 59.2 | $ | 58.8 | $ | 46.4 | $ | 52.3 | $ | 63.7 | $ | 118.0 | $ | 112.5 |
4
For the Three Months Ended | For the Six Months Ended | ||||||||||||||||||||||||||||||||
Jun. 30, | Mar. 31, | Dec. 31, | Sep. 30, | Jun. 30, | Jun. 30, | Jun. 30, | |||||||||||||||||||||||||||
2010 | 2010 | 2009 | 2009 | 2009 | 2010 | 2009 | |||||||||||||||||||||||||||
Operating revenues: |
|||||||||||||||||||||||||||||||||
Premiums |
$ | 105.8 | $ | 108.8 | $ | 108.1 | $ | 106.5 | $ | 107.9 | $ | 214.6 | $ | 217.6 | |||||||||||||||||||
Net investment income |
4.8 | 4.6 | 4.5 | 4.5 | 4.3 | 9.4 | 8.8 | ||||||||||||||||||||||||||
Policy fees, contract charges and other |
3.0 | 2.9 | 2.2 | 4.2 | 4.4 | 5.9 | 8.5 | ||||||||||||||||||||||||||
Total operating revenues |
113.6 | 116.3 | 114.8 | 115.2 | 116.6 | 229.9 | 234.9 | ||||||||||||||||||||||||||
Benefits and expenses: |
|||||||||||||||||||||||||||||||||
Policyholder benefits and claims |
67.4 | 75.0 | 75.5 | 71.7 | 71.3 | 142.4 | 148.2 | ||||||||||||||||||||||||||
Other underwriting and operating expenses |
26.0 | 23.7 | 26.5 | 25.6 | 26.2 | 49.7 | 54.1 | ||||||||||||||||||||||||||
Amortization of deferred policy acquisition costs |
2.0 | 1.9 | 2.1 | 1.9 | 1.9 | 3.9 | 3.9 | ||||||||||||||||||||||||||
Total benefits and expenses |
95.4 | 100.6 | 104.1 | 99.2 | 99.4 | 196.0 | 206.2 | ||||||||||||||||||||||||||
Segment pre-tax adjusted operating income |
$ | 18.2 | $ | 15.7 | $ | 10.7 | $ | 16.0 | $ | 17.2 | $ | 33.9 | $ | 28.7 | |||||||||||||||||||
Operating Metrics: |
|||||||||||||||||||||||||||||||||
Group loss ratio 1 |
63.8% | 68.9% | 69.9% | 67.3% | 66.1% | 66.4% | 68.1% | ||||||||||||||||||||||||||
Expense ratio 2 |
25.4% | 23.1% | 25.6% | 23.9% | 23.9% | 24.3% | 24.3% | ||||||||||||||||||||||||||
Combined ratio 3 |
89.2% | 92.0% | 95.5% | 91.2% | 90.0% | 90.7% | 92.4% | ||||||||||||||||||||||||||
Medical stop-loss loss ratio 4 |
65.4% | 70.1% | 71.3% | 68.7% | 67.7% | 67.8% | 69.7% | ||||||||||||||||||||||||||
Total sales 5 |
$ | 20.6 | $ | 41.4 | $ | 13.4 | $ | 27.1 | $ | 14.0 | $ | 62.0 | $ | 50.8 | |||||||||||||||||||
Premiums: |
|||||||||||||||||||||||||||||||||
Medical stop-loss |
$ | 94.6 | $ | 97.6 | $ | 97.9 | $ | 96.3 | $ | 97.7 | $ | 192.2 | $ | 197.2 | |||||||||||||||||||
Limited benefit medical |
8.5 | 8.0 | 7.7 | 7.7 | 7.6 | 16.5 | 15.1 | ||||||||||||||||||||||||||
Other |
2.7 | 3.2 | 2.5 | 2.5 | 2.6 | 5.9 | 5.3 | ||||||||||||||||||||||||||
Total premiums earned |
$ | 105.8 | $ | 108.8 | $ | 108.1 | $ | 106.5 | $ | 107.9 | $ | 214.6 | $ | 217.6 | |||||||||||||||||||
5 Year Historical Group Loss Ratio1: | For the Year | |||||||||||||||||||
For the Three Months Ended | Ended | |||||||||||||||||||
1Q | 2Q | 3Q | 4Q | |||||||||||||||||
2009 |
70.1 | % | 66.1 | % | 67.3 | % | 69.9 | % | 68.3 | % | ||||||||||
2008 |
71.0 | % | 66.3 | % | 59.4 | % | 66.6 | % | 65.8 | % | ||||||||||
2007 |
55.7 | % | 54.8 | % | 51.0 | % | 55.9 | % | 54.3 | % | ||||||||||
2006 |
71.3 | % | 61.1 | % | 57.8 | % | 47.1 | % | 59.6 | % | ||||||||||
2005 |
71.1 | % | 70.5 | % | 66.7 | % | 61.3 | % | 67.5 | % |
5
For the Three Months Ended | For the Six Months Ended | |||||||||||||||||||||||||||||||
Jun. 30, | Mar. 31, | Dec. 31, | Sep. 30, | Jun. 30, | Jun. 30, | Jun. 30, | ||||||||||||||||||||||||||
2010 | 2010 | 2009 | 2009 | 2009 | 2010 | 2009 | ||||||||||||||||||||||||||
Operating revenues: |
||||||||||||||||||||||||||||||||
Net investment income |
115.3 | 107.8 | 106.2 | 103.5 | 95.3 | 223.1 | 178.3 | |||||||||||||||||||||||||
Policy fees, contract charges and other |
4.8 | 4.8 | 4.4 | 4.6 | 4.0 | 9.6 | 7.8 | |||||||||||||||||||||||||
Net investment gains (losses) on FIA options |
(1.3 | ) | 0.1 | 0.6 | 1.4 | 0.2 | (1.2 | ) | (1.2 | ) | ||||||||||||||||||||||
Total operating revenues |
118.8 | 112.7 | 111.2 | 109.5 | 99.5 | 231.5 | 184.9 | |||||||||||||||||||||||||
Benefits and expenses: |
||||||||||||||||||||||||||||||||
Policyholder benefits and claims |
0.6 | 0.1 | | (1.3 | ) | (0.4 | ) | 0.7 | (0.9 | ) | ||||||||||||||||||||||
Interest credited |
70.4 | 68.5 | 69.7 | 70.5 | 61.1 | 138.9 | 116.7 | |||||||||||||||||||||||||
Other underwriting and operating expenses |
13.6 | 13.6 | 14.6 | 13.6 | 14.2 | 27.2 | 27.7 | |||||||||||||||||||||||||
Amortization of deferred policy acquisition costs |
13.6 | 13.2 | 9.6 | 10.5 | 8.5 | 26.8 | 16.3 | |||||||||||||||||||||||||
Total benefits and expenses |
98.2 | 95.4 | 93.9 | 93.3 | 83.4 | 193.6 | 159.8 | |||||||||||||||||||||||||
Segment pre-tax adjusted operating income |
$ | 20.6 | $ | 17.3 | $ | 17.3 | $ | 16.2 | $ | 16.1 | $ | 37.9 | $ | 25.1 | ||||||||||||||||||
Operating Metrics: |
||||||||||||||||||||||||||||||||
Account values fixed annuities |
$ | 8,574.0 | $ | 8,005.4 | $ | 7,655.7 | $ | 7,464.1 | $ | 7,025.6 | $ | 8,574.0 | $ | 7,025.6 | ||||||||||||||||||
Account values variable annuities |
682.3 | 768.0 | 755.7 | 736.9 | 664.1 | 682.3 | 664.1 | |||||||||||||||||||||||||
Interest spread on average account values1 |
1.97% | 1.86% | 1.83% | 1.90% | 1.82% | 1.91% | 1.73% | |||||||||||||||||||||||||
Total sales2 |
$ | 623.9 | $ | 377.5 | $ | 261.9 | $ | 486.9 | $ | 568.5 | $ | 1,001.4 | $ | 1,479.6 | ||||||||||||||||||
6
For the Three Months Ended | For the Six Months Ended | |||||||||||||||||||||||||||||||
Jun. 30, | Mar. 31, | Dec. 31, | Sep. 30, | Jun. 30, | Jun. 30, | Jun. 30, | ||||||||||||||||||||||||||
2010 | 2010 | 2009 | 2009 | 2009 | 2010 | 2009 | ||||||||||||||||||||||||||
Operating revenues: |
||||||||||||||||||||||||||||||||
Net investment income |
$ | 104.7 | $ | 104.0 | $ | 104.3 | $ | 104.7 | $ | 107.1 | $ | 208.7 | $ | 213.4 | ||||||||||||||||||
Policy fees, contract charges and other |
0.2 | 0.2 | 0.1 | 0.1 | 0.1 | 0.4 | 0.3 | |||||||||||||||||||||||||
Total operating revenues |
104.9 | 104.2 | 104.4 | 104.8 | 107.2 | 209.1 | 213.7 | |||||||||||||||||||||||||
Benefits and expenses: |
||||||||||||||||||||||||||||||||
Interest credited |
92.9 | 92.0 | 89.2 | 90.7 | 91.3 | 184.9 | 178.0 | |||||||||||||||||||||||||
Other underwriting and operating expenses |
5.2 | 5.3 | 5.4 | 5.4 | 5.2 | 10.5 | 10.2 | |||||||||||||||||||||||||
Amortization of deferred policy acquisition costs |
0.4 | 0.5 | 0.4 | 0.4 | 0.4 | 0.9 | 0.8 | |||||||||||||||||||||||||
Total benefits and expenses |
98.5 | 97.8 | 95.0 | 96.5 | 96.9 | 196.3 | 189.0 | |||||||||||||||||||||||||
Segment pre-tax adjusted operating income |
$ | 6.4 | $ | 6.4 | $ | 9.4 | $ | 8.3 | $ | 10.3 | $ | 12.8 | $ | 24.7 | ||||||||||||||||||
Operating Metrics: |
||||||||||||||||||||||||||||||||
Reserves 1 |
$ | 6,716.8 | $ | 6,726.7 | $ | 6,726.3 | $ | 6,722.7 | $ | 6,722.6 | $ | 6,716.8 | $ | 6,722.6 | ||||||||||||||||||
Interest spread on reserves 2 |
0.49% | 0.41% | 0.43% | 0.48% | 0.62% | 0.45% | 0.61% | |||||||||||||||||||||||||
Mortality gains (losses) 3 |
$ | (1.8 | ) | $ | (0.1 | ) | $ | 1.3 | $ | - | $ | (0.5 | ) | $ | (1.9 | ) | $ | 3.8 | ||||||||||||||
Total sales 4 |
67.8 | 66.3 | 83.8 | 70.7 | 56.9 | 134.1 | 97.3 | |||||||||||||||||||||||||
5 Year Historical Mortality Gains (Losses)3: | For the Year | |||||||||||||||||||
For the Three Months Ended | Ended | |||||||||||||||||||
1Q | 2Q | 3Q | 4Q | |||||||||||||||||
2009 |
$ | 4.3 | $ | (0.5 | ) | $ | - | $ | 1.3 | $ | 5.1 | |||||||||
2008 |
2.0 | 0.8 | 0.7 | (1.4 | ) | 2.1 | ||||||||||||||
2007 |
1.9 | - | (0.9 | ) | (1.1 | ) | (0.1 | ) | ||||||||||||
2006 |
0.2 | 2.4 | 1.3 | 2.4 | 6.3 | |||||||||||||||
2005 |
0.7 | (0.3 | ) | (2.0 | ) | 2.4 | 0.8 |
7
For the Three Months Ended | For the Six Months Ended | |||||||||||||||||||||||||||||||
Jun. 30, | Mar. 31, | Dec. 31, | Sep. 30, | Jun. 30, | Jun. 30, | Jun. 30, | ||||||||||||||||||||||||||
2010 | 2010 | 2009 | 2009 | 2009 | 2010 | 2009 | ||||||||||||||||||||||||||
Operating revenues: |
||||||||||||||||||||||||||||||||
Premiums 1 |
$ | 9.7 | $ | 10.2 | $ | 9.1 | $ | 10.1 | $ | 8.9 | $ | 19.9 | $ | 18.7 | ||||||||||||||||||
Net investment income |
68.3 | 66.1 | 67.2 | 66.9 | 67.0 | 134.4 | 131.1 | |||||||||||||||||||||||||
Policy fees, contract charges and other 1 |
29.8 | 29.1 | 29.6 | 28.5 | 29.4 | 58.9 | 58.6 | |||||||||||||||||||||||||
Total operating revenues |
107.8 | 105.4 | 105.9 | 105.5 | 105.3 | 213.2 | 208.4 | |||||||||||||||||||||||||
Benefits and expenses: |
||||||||||||||||||||||||||||||||
Policyholder benefits and claims |
15.3 | 11.1 | 12.9 | 15.2 | 11.2 | 26.4 | 29.2 | |||||||||||||||||||||||||
Interest credited |
59.1 | 58.5 | 59.6 | 60.0 | 61.8 | 117.6 | 115.7 | |||||||||||||||||||||||||
Other underwriting and operating expenses |
13.4 | 12.7 | 15.8 | 13.4 | 12.7 | 26.1 | 26.2 | |||||||||||||||||||||||||
Amortization of deferred policy acquisition costs |
1.0 | (0.2 | ) | 2.9 | 1.0 | 1.1 | 0.8 | 1.6 | ||||||||||||||||||||||||
Total benefits and expenses |
88.8 | 82.1 | 91.2 | 89.6 | 86.8 | 170.9 | 172.7 | |||||||||||||||||||||||||
Segment pre-tax adjusted operating income |
$ | 19.0 | $ | 23.3 | $ | 14.7 | $ | 15.9 | $ | 18.5 | $ | 42.3 | $ | 35.7 | ||||||||||||||||||
Operating Metrics: |
||||||||||||||||||||||||||||||||
Insurance in force (direct)2 |
$ | 49,912.3 | $ | 50,056.5 | $ | 50,030.3 | $ | 50,215.6 | $ | 50,475.8 | $ | 49,912.3 | $ | 50,475.8 | ||||||||||||||||||
Mortality ratio3 |
79.5% | 83.2% | 67.5% | 72.7% | 79.0% | 81.3% | 80.6% | |||||||||||||||||||||||||
BOLI account value4 |
$ | 3,886.0 | $ | 3,853.2 | $ | 3,789.1 | $ | 3,754.9 | $ | 3,741.2 | $ | 3,886.0 | $ | 3,741.2 | ||||||||||||||||||
UL account value4 |
588.9 | 585.3 | 583.8 | 584.8 | 580.0 | 588.9 | 580.0 | |||||||||||||||||||||||||
PGAAP reserve balance5 |
32.4 | 34.5 | 36.7 | 38.9 | 42.2 | 32.4 | 42.2 | |||||||||||||||||||||||||
BOLI ROA6 |
1.28% | 1.08% | 0.65% | 1.09% | 1.24% | 1.17% | 1.29% | |||||||||||||||||||||||||
UL interest spread7 |
1.59% | 1.37% | 1.11% | 1.27% | 1.26% | 1.47% | 1.23% | |||||||||||||||||||||||||
Total sales, excluding BOLI8 |
$ | 2.4 | $ | 2.8 | $ | 2.7 | $ | 2.9 | $ | 2.4 | $ | 5.2 | $ | 4.9 | ||||||||||||||||||
BOLI sales9 |
- | 2.7 | - | - | - | 2.7 | 2.5 | |||||||||||||||||||||||||
8
For the Three Months Ended | For the Six Months Ended | |||||||||||||||||||||||||||||||
Jun. 30, | Mar. 31, | Dec. 31, | Sep. 30, | Jun. 30, | Jun. 30, | Jun. 30, | ||||||||||||||||||||||||||
2010 | 2010 | 2009 | 2009 | 2009 | 2010 | 2009 | ||||||||||||||||||||||||||
Operating revenues: |
||||||||||||||||||||||||||||||||
Net investment income |
$ | 4.0 | $ | 4.4 | $ | 2.0 | $ | 4.0 | $ | 9.4 | $ | 8.4 | $ | 14.2 | ||||||||||||||||||
Policy fees, contract charges and other |
4.0 | 3.5 | 3.1 | 2.8 | 2.8 | 7.5 | 5.1 | |||||||||||||||||||||||||
Total operating revenues |
8.0 | 7.9 | 5.1 | 6.8 | 12.2 | 15.9 | 19.3 | |||||||||||||||||||||||||
Benefits and expenses: |
||||||||||||||||||||||||||||||||
Interest credited |
(0.9 | ) | (0.5 | ) | (0.9 | ) | (0.7 | ) | (1.1 | ) | (1.4 | ) | (1.7 | ) | ||||||||||||||||||
Other underwriting and operating expenses |
6.0 | 4.3 | 3.7 | 3.7 | 3.7 | 10.3 | 6.8 | |||||||||||||||||||||||||
Interest expense |
7.9 | 8.0 | 8.0 | 7.9 | 8.0 | 15.9 | 15.9 | |||||||||||||||||||||||||
Total benefits and expenses |
13.0 | 11.8 | 10.8 | 10.9 | 10.6 | 24.8 | 21.0 | |||||||||||||||||||||||||
Segment pre-tax adjusted operating income (loss) |
$ | (5.0 | ) | $ | (3.9 | ) | $ | (5.7 | ) | $ | (4.1 | ) | $ | 1.6 | $ | (8.9 | ) | $ | (1.7 | ) | ||||||||||||
9
For the Three Months Ended | For the Six Months Ended | |||||||||||||||||||||||||||||||
Jun. 30, | Mar. 31, | Dec. 31, | Sep. 30, | Jun. 30, | Jun. 30, | Jun. 30, | ||||||||||||||||||||||||||
2010 | 2010 | 2009 | 2009 | 2009 | 2010 | 2009 | ||||||||||||||||||||||||||
Summary
Total Company |
||||||||||||||||||||||||||||||||
Unamortized balance, beginning of period |
$ | 339.8 | $ | 325.7 | $ | 315.4 | $ | 295.7 | $ | 267.7 | $ | 325.7 | $ | 219.5 | ||||||||||||||||||
Deferral of acquistion costs: |
||||||||||||||||||||||||||||||||
Commissions |
30.6 | 21.5 | 16.1 | 25.6 | 29.7 | 52.1 | 75.2 | |||||||||||||||||||||||||
Other acquistion expenses |
8.6 | 9.0 | 9.0 | 7.1 | 7.2 | 17.6 | 15.3 | |||||||||||||||||||||||||
Total deferral of acquisition costs |
39.2 | 30.5 | 25.1 | 32.7 | 36.9 | 69.7 | 90.5 | |||||||||||||||||||||||||
Adjustments related to inv (gains) losses |
(1.2 | ) | (1.0 | ) | 0.2 | 0.8 | 3.0 | (2.2 | ) | 8.3 | ||||||||||||||||||||||
Amortization |
(17.0 | ) | (17.1 | ) | (13.0 | ) | (12.7 | ) | (11.9 | ) | (34.1 | ) | (22.6 | ) | ||||||||||||||||||
Unlocking |
- | 1.7 | (2.0 | ) | (1.1 | ) | - | 1.7 | - | |||||||||||||||||||||||
Total amortization |
(17.0 | ) | (15.4 | ) | (15.0 | ) | (13.8 | ) | (11.9 | ) | (32.4 | ) | (22.6 | ) | ||||||||||||||||||
Unamortized balance, end of period |
360.8 | 339.8 | 325.7 | 315.4 | 295.7 | 360.8 | 295.7 | |||||||||||||||||||||||||
Accum effect of net unrealized (gains) losses |
(161.8 | ) | (112.3 | ) | (75.3 | ) | (74.6 | ) | 11.7 | (161.8 | ) | 11.7 | ||||||||||||||||||||
DAC balance, end of period |
$ | 199.0 | $ | 227.5 | $ | 250.4 | $ | 240.8 | $ | 307.4 | $ | 199.0 | $ | 307.4 | ||||||||||||||||||
Group |
||||||||||||||||||||||||||||||||
Unamortized balance, beginning of period |
$ | 3.4 | $ | 3.2 | $ | 3.5 | $ | 3.4 | $ | 3.3 | $ | 3.2 | $ | 3.3 | ||||||||||||||||||
Deferral of acquistion costs: |
||||||||||||||||||||||||||||||||
Other acquistion expenses |
2.1 | 2.1 | 1.8 | 2.0 | 2.0 | 4.2 | 4.0 | |||||||||||||||||||||||||
Total deferral of acquisition costs |
2.1 | 2.1 | 1.8 | 2.0 | 2.0 | 4.2 | 4.0 | |||||||||||||||||||||||||
Amortization |
(2.0 | ) | (1.9 | ) | (2.1 | ) | (1.9 | ) | (1.9 | ) | (3.9 | ) | (3.9 | ) | ||||||||||||||||||
Unamortized balance, end of period |
3.5 | 3.4 | 3.2 | 3.5 | 3.4 | 3.5 | 3.4 | |||||||||||||||||||||||||
DAC balance, end of period |
$ | 3.5 | $ | 3.4 | $ | 3.2 | $ | 3.5 | $ | 3.4 | $ | 3.5 | $ | 3.4 | ||||||||||||||||||
Retirement Services |
||||||||||||||||||||||||||||||||
Unamortized balance, beginning of period |
$ | 255.7 | $ | 249.1 | $ | 240.5 | $ | 225.8 | $ | 202.0 | $ | 249.1 | $ | 158.7 | ||||||||||||||||||
Deferral of acquistion costs: |
||||||||||||||||||||||||||||||||
Commissions |
25.9 | 16.0 | 11.7 | 20.8 | 25.4 | 41.9 | 66.7 | |||||||||||||||||||||||||
Other acquistion expenses |
4.8 | 4.7 | 6.3 | 3.7 | 3.9 | 9.5 | 8.6 | |||||||||||||||||||||||||
Total deferral of acquisition costs |
30.7 | 20.7 | 18.0 | 24.5 | 29.3 | 51.4 | 75.3 | |||||||||||||||||||||||||
Adjustments related to inv (gains) losses |
(1.2 | ) | (0.9 | ) | 0.2 | 0.7 | 3.0 | (2.1 | ) | 8.1 | ||||||||||||||||||||||
Amortization |
(13.6 | ) | (13.2 | ) | (9.6 | ) | (9.4 | ) | (8.5 | ) | (26.8 | ) | (16.3 | ) | ||||||||||||||||||
Unlocking |
- | - | - | (1.1 | ) | - | - | - | ||||||||||||||||||||||||
Total amortization |
(13.6 | ) | (13.2 | ) | (9.6 | ) | (10.5 | ) | (8.5 | ) | (26.8 | ) | (16.3 | ) | ||||||||||||||||||
Unamortized balance, end of period |
271.6 | 255.7 | 249.1 | 240.5 | 225.8 | 271.6 | 225.8 | |||||||||||||||||||||||||
Accum effect of net unrealized (gains) losses |
(157.9 | ) | (110.0 | ) | (74.3 | ) | (74.2 | ) | 8.8 | (157.9 | ) | 8.8 | ||||||||||||||||||||
DAC balance, end of period |
$ | 113.7 | $ | 145.7 | $ | 174.8 | $ | 166.3 | $ | 234.6 | $ | 113.7 | $ | 234.6 | ||||||||||||||||||
Income Annuities |
||||||||||||||||||||||||||||||||
Unamortized balance, beginning of period |
$ | 24.7 | $ | 22.4 | $ | 19.7 | $ | 17.4 | $ | 15.6 | $ | 22.4 | $ | 14.5 | ||||||||||||||||||
Deferral of acquistion costs: |
||||||||||||||||||||||||||||||||
Commissions |
2.3 | 2.4 | 2.9 | 2.5 | 2.0 | 4.7 | 3.4 | |||||||||||||||||||||||||
Other acquistion expenses |
0.4 | 0.4 | 0.2 | 0.2 | 0.2 | 0.8 | 0.3 | |||||||||||||||||||||||||
Total deferral of acquisition costs |
2.7 | 2.8 | 3.1 | 2.7 | 2.2 | 5.5 | 3.7 | |||||||||||||||||||||||||
Amortization |
(0.4 | ) | (0.5 | ) | (0.4 | ) | (0.4 | ) | (0.4 | ) | (0.9 | ) | (0.8 | ) | ||||||||||||||||||
Unamortized balance, end of period |
27.0 | 24.7 | 22.4 | 19.7 | 17.4 | 27.0 | 17.4 | |||||||||||||||||||||||||
DAC balance, end of period |
$ | 27.0 | $ | 24.7 | $ | 22.4 | $ | 19.7 | $ | 17.4 | $ | 27.0 | $ | 17.4 | ||||||||||||||||||
Individual |
||||||||||||||||||||||||||||||||
Unamortized balance, beginning of period |
$ | 56.0 | $ | 51.0 | $ | 51.7 | $ | 49.1 | $ | 46.8 | $ | 51.0 | $ | 43.0 | ||||||||||||||||||
Deferral of acquistion costs: |
||||||||||||||||||||||||||||||||
Commissions |
2.4 | 3.1 | 1.5 | 2.3 | 2.3 | 5.5 | 5.1 | |||||||||||||||||||||||||
Other acquistion expenses |
1.3 | 1.8 | 0.7 | 1.2 | 1.1 | 3.1 | 2.4 | |||||||||||||||||||||||||
Total deferral of acquisition costs |
3.7 | 4.9 | 2.2 | 3.5 | 3.4 | 8.6 | 7.5 | |||||||||||||||||||||||||
Adjustments related to inv (gains) losses |
- | (0.1 | ) | - | 0.1 | - | (0.1 | ) | 0.2 | |||||||||||||||||||||||
Amortization |
(1.0 | ) | (1.5 | ) | (0.9 | ) | (1.0 | ) | (1.1 | ) | (2.5 | ) | (1.6 | ) | ||||||||||||||||||
Unlocking |
- | 1.7 | (2.0 | ) | - | - | 1.7 | - | ||||||||||||||||||||||||
Total amortization |
(1.0 | ) | 0.2 | (2.9 | ) | (1.0 | ) | (1.1 | ) | (0.8 | ) | (1.6 | ) | |||||||||||||||||||
Unamortized balance, end of period |
58.7 | 56.0 | 51.0 | 51.7 | 49.1 | 58.7 | 49.1 | |||||||||||||||||||||||||
Accum effect of net unrealized (gains) losses |
(3.9 | ) | (2.3 | ) | (1.0 | ) | (0.4 | ) | 2.9 | (3.9 | ) | 2.9 | ||||||||||||||||||||
DAC balance, end of period |
$ | 54.8 | $ | 53.7 | $ | 50.0 | $ | 51.3 | $ | 52.0 | $ | 54.8 | $ | 52.0 | ||||||||||||||||||
10
For the Three Months Ended | For the Six Months Ended | |||||||||||||||||||||||||||||||
Jun. 30, | Mar. 31, | Dec. 31, | Sep. 30, | Jun. 30, | Jun. 30, | Jun. 30, | ||||||||||||||||||||||||||
2010 | 2010 | 2009 | 2009 | 2009 | 2010 | 2009 | ||||||||||||||||||||||||||
Retirement Services: |
||||||||||||||||||||||||||||||||
Fixed Account Values |
||||||||||||||||||||||||||||||||
Account value, beginning of period |
$ | 8,005.4 | $ | 7,655.7 | $ | 7,464.1 | $ | 7,025.6 | $ | 6,588.5 | $ | 7,655.7 | $ | 5,724.9 | ||||||||||||||||||
Deposits |
667.6 | 422.8 | 307.8 | 514.1 | 597.6 | 1,090.4 | 1,533.6 | |||||||||||||||||||||||||
Interest credited |
80.4 | 77.2 | 78.3 | 78.7 | 69.5 | 157.6 | 131.3 | |||||||||||||||||||||||||
Withdrawals and transfers |
(174.6 | ) | (168.9 | ) | (191.3 | ) | (148.8 | ) | (158.0 | ) | (343.5 | ) | (324.9 | ) | ||||||||||||||||||
Other |
(4.8 | ) | 18.6 | (3.2 | ) | (5.5 | ) | (72.0 | ) | 13.8 | (39.3 | ) | ||||||||||||||||||||
Account value, end of period |
$ | 8,574.0 | $ | 8,005.4 | $ | 7,655.7 | $ | 7,464.1 | $ | 7,025.6 | $ | 8,574.0 | $ | 7,025.6 | ||||||||||||||||||
Income Annuities: |
||||||||||||||||||||||||||||||||
Reserves |
||||||||||||||||||||||||||||||||
Reserves, beginning of period |
$ | 6,726.7 | $ | 6,726.3 | $ | 6,722.7 | $ | 6,722.6 | $ | 6,742.7 | $ | 6,726.3 | $ | 6,761.2 | ||||||||||||||||||
Deposits |
67.6 | 62.8 | 80.5 | 66.9 | 56.0 | 130.4 | 94.8 | |||||||||||||||||||||||||
Interest credited |
96.8 | 97.0 | 96.8 | 96.9 | 96.9 | 193.8 | 194.0 | |||||||||||||||||||||||||
Benefit payments |
(167.9 | ) | (147.2 | ) | (170.3 | ) | (174.0 | ) | (167.1 | ) | (315.1 | ) | (315.6 | ) | ||||||||||||||||||
Other |
(6.4 | ) | (12.2 | ) | (3.4 | ) | 10.3 | (5.9 | ) | (18.6 | ) | (11.8 | ) | |||||||||||||||||||
Reserves, end of period |
$ | 6,716.8 | $ | 6,726.7 | $ | 6,726.3 | $ | 6,722.7 | $ | 6,722.6 | $ | 6,716.8 | $ | 6,722.6 | ||||||||||||||||||
Individual: |
||||||||||||||||||||||||||||||||
BOLI Account Values |
||||||||||||||||||||||||||||||||
Account value, beginning of period |
$ | 3,853.2 | $ | 3,789.1 | $ | 3,754.9 | $ | 3,741.2 | $ | 3,759.8 | $ | 3,789.1 | $ | 3,700.4 | ||||||||||||||||||
Deposits |
- | 27.6 | - | - | - | 27.6 | 25.0 | |||||||||||||||||||||||||
Interest credited |
52.0 | 52.0 | 50.7 | 52.5 | 55.2 | 104.0 | 104.9 | |||||||||||||||||||||||||
Surrenders |
(0.3 | ) | - | - | (24.9 | ) | (59.0 | ) | (0.3 | ) | (59.0 | ) | ||||||||||||||||||||
Administrative charges and other |
(18.9 | ) | (15.5 | ) | (16.5 | ) | (13.9 | ) | (14.8 | ) | (34.4 | ) | (30.1 | ) | ||||||||||||||||||
Account value, end of period |
$ | 3,886.0 | $ | 3,853.2 | $ | 3,789.1 | $ | 3,754.9 | $ | 3,741.2 | $ | 3,886.0 | $ | 3,741.2 | ||||||||||||||||||
UL Account Values |
||||||||||||||||||||||||||||||||
Account value, beginning of period |
$ | 585.3 | $ | 583.8 | $ | 584.8 | $ | 580.0 | $ | 579.3 | $ | 583.8 | $ | 580.3 | ||||||||||||||||||
Deposits |
19.1 | 22.5 | 18.9 | 19.4 | 15.2 | 41.6 | 30.7 | |||||||||||||||||||||||||
Interest credited |
6.1 | 0.4 | 1.1 | 6.5 | 6.5 | 6.5 | 13.0 | |||||||||||||||||||||||||
Surrenders |
(7.3 | ) | (7.3 | ) | (7.0 | ) | (7.2 | ) | (6.7 | ) | (14.6 | ) | (16.0 | ) | ||||||||||||||||||
Administrative charges and other |
(14.3 | ) | (14.1 | ) | (14.0 | ) | (13.9 | ) | (14.3 | ) | (28.4 | ) | (28.0 | ) | ||||||||||||||||||
Account value, end of period |
$ | 588.9 | $ | 585.3 | $ | 583.8 | $ | 584.8 | $ | 580.0 | $ | 588.9 | $ | 580.0 | ||||||||||||||||||
11
As of Jun. 30, 2010 | ||||||||||||
Policyholder | Unrealized | |||||||||||
Liability | % of Total | gains7 | ||||||||||
Illiquid Liabilities |
||||||||||||
Structured settlements & other SPIAs 1 |
$ | 6,708.8 | $ | 201.6 | ||||||||
Deferred annuities with 5 year payout provision or MVA2 |
376.6 | 21.9 | ||||||||||
Traditional insurance (net of reinsurance)3 |
186.2 | 9.8 | ||||||||||
Group health & life (net of reinsurance)3 |
101.7 | 3.3 | ||||||||||
Total illiquid liabilities |
7,373.3 | 36.7 | % | 236.6 | ||||||||
Somewhat Liquid Liabilities |
||||||||||||
Bank-owned life insurance (BOLI)4 |
3,963.2 | 182.8 | ||||||||||
Deferred annuities with surrender charges > 5% |
5,632.1 | 326.9 | ||||||||||
Universal life with surrender charges > 5% |
164.4 | 5.8 | ||||||||||
Total somewhat liquid liabilities |
9,759.7 | 48.5 | % | 515.5 | ||||||||
Fully Liquid Liabilities |
||||||||||||
Deferred annuities with surrender charges of: |
||||||||||||
3-5% |
388.5 | 22.5 | ||||||||||
0-3% |
201.3 | 11.7 | ||||||||||
No surrender charges5 |
1,926.5 | 111.8 | ||||||||||
Universal life and whole life with surrender charges < 5% |
438.9 | 15.4 | ||||||||||
BOLI6 |
1.3 | 0.1 | ||||||||||
Traditional insurance (net of reinsurance)6 |
2.0 | 0.1 | ||||||||||
Group health & life (net of reinsurance)6 |
16.5 | 0.5 | ||||||||||
Total fully liquid liabilities |
2,975.0 | 14.8 | % | 162.1 | ||||||||
Assets supporting surplus portfolio |
67.3 | |||||||||||
Total book value of liabilities from above |
$ | 20,108.0 | 100.0 | % | $ | 981.5 | ||||||
Reconciliation of unrealized gains to AOCI: |
||||||||||||
Unrealized gains from above |
$ | 981.5 | ||||||||||
Tax on unrealized gains and losses on available
for sale securities |
(343.5 | ) | ||||||||||
Adjustment for deferred policy acquisition costs
and deferred sales inducements valuation allowance, net of tax |
(135.1 | ) | ||||||||||
Other |
(1.8 | ) | ||||||||||
AOCI |
$ | 501.1 | ||||||||||
12
As of: | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Jun. 30, | Mar. 31, | Dec. 31, | Sep. 30, | Jun. 30, | ||||||||||||||||||||||||||||||||||||||||||||||||
2010 | % | 2010 | % | 2009 | % | 2009 | % | 2009 | % | |||||||||||||||||||||||||||||||||||||||||||
Portfolio Composition: |
||||||||||||||||||||||||||||||||||||||||||||||||||||
Available-for-sale securities: |
||||||||||||||||||||||||||||||||||||||||||||||||||||
Fixed maturities, at fair value |
$ | 20,612.2 | 92.2 | % | $ | 19,390.6 | 92.0 | % | $ | 18,594.3 | 92.1 | % | $ | 18,542.3 | 92.5 | % | $ | 16,933.9 | 92.3 | % | ||||||||||||||||||||||||||||||||
Marketable equity securities, at fair value |
43.9 | 0.2 | % | 37.6 | 0.2 | % | 36.7 | 0.2 | % | 35.4 | 0.2 | % | 33.6 | 0.2 | % | |||||||||||||||||||||||||||||||||||||
Trading securities: |
||||||||||||||||||||||||||||||||||||||||||||||||||||
Marketable equity securities, at fair value |
141.0 | 0.6 | % | 151.0 | 0.7 | % | 154.1 | 0.8 | % | 140.6 | 0.7 | % | 116.1 | 0.6 | % | |||||||||||||||||||||||||||||||||||||
Mortgage loans, net |
1,340.3 | 6.0 | % | 1,228.0 | 5.8 | % | 1,201.7 | 6.0 | % | 1,095.2 | 5.5 | % | 1,038.2 | 5.7 | % | |||||||||||||||||||||||||||||||||||||
Policy loans |
72.3 | 0.3 | % | 73.4 | 0.4 | % | 73.9 | 0.4 | % | 73.9 | 0.4 | % | 74.1 | 0.4 | % | |||||||||||||||||||||||||||||||||||||
Short-term investments |
2.7 | 0.0 | % | 54.0 | 0.3 | % | 2.1 | 0.0 | % | 2.5 | 0.0 | % | 2.6 | 0.0 | % | |||||||||||||||||||||||||||||||||||||
Investment in limited partnerships |
136.9 | 0.6 | % | 130.6 | 0.6 | % | 110.2 | 0.5 | % | 133.4 | 0.6 | % | 151.4 | 0.8 | % | |||||||||||||||||||||||||||||||||||||
Other invested assets |
9.3 | 0.1 | % | 9.1 | 0.0 | % | 10.1 | 0.0 | % | 11.9 | 0.1 | % | 7.1 | 0.0 | % | |||||||||||||||||||||||||||||||||||||
Total investments |
22,358.6 | 100.0 | % | 21,074.3 | 100.0 | % | 20,183.1 | 100.0 | % | 20,035.2 | 100.0 | % | 18,357.0 | 100.0 | % | |||||||||||||||||||||||||||||||||||||
Cash and cash equivalents |
322.7 | 389.3 | 257.8 | 241.7 | 435.0 | |||||||||||||||||||||||||||||||||||||||||||||||
Total investments, cash and
cash equivalents |
$ | 22,681.3 | $ | 21,463.6 | $ | 20,440.9 | $ | 20,276.9 | $ | 18,792.0 | ||||||||||||||||||||||||||||||||||||||||||
Fixed Maturities Securities by Credit Quality1: |
||||||||||||||||||||||||||||||||||||||||||||||||||||
1: AAA, AA, A |
$ | 12,116.4 | 58.8 | % | $ | 11,350.3 | 58.5 | % | $ | 11,031.3 | 59.3 | % | $ | 10,817.9 | 58.4 | % | $ | 9,998.9 | 59.0 | % | ||||||||||||||||||||||||||||||||
2: BBB |
7,465.0 | 36.2 | % | 6,960.2 | 35.9 | % | 6,530.9 | 35.1 | % | 6,454.5 | 34.8 | % | 5,788.8 | 34.2 | % | |||||||||||||||||||||||||||||||||||||
Total investment grade |
19,581.4 | 95.0 | % | 18,310.5 | 94.4 | % | 17,562.2 | 94.4 | % | 17,272.4 | 93.2 | % | 15,787.7 | 93.2 | % | |||||||||||||||||||||||||||||||||||||
3: BB |
642.0 | 3.1 | % | 688.4 | 3.6 | % | 641.3 | 3.5 | % | 709.6 | 3.8 | % | 673.6 | 4.0 | % | |||||||||||||||||||||||||||||||||||||
4: B |
264.6 | 1.3 | % | 250.2 | 1.3 | % | 219.2 | 1.2 | % | 292.8 | 1.6 | % | 314.9 | 1.9 | % | |||||||||||||||||||||||||||||||||||||
5: CCC & lower |
105.4 | 0.5 | % | 122.7 | 0.6 | % | 113.5 | 0.6 | % | 206.8 | 1.1 | % | 123.3 | 0.7 | % | |||||||||||||||||||||||||||||||||||||
6: In or near default |
18.8 | 0.1 | % | 18.8 | 0.1 | % | 58.1 | 0.3 | % | 60.7 | 0.3 | % | 34.4 | 0.2 | % | |||||||||||||||||||||||||||||||||||||
Total below investment grade |
1,030.8 | 5.0 | % | 1,080.1 | 5.6 | % | 1,032.1 | 5.6 | % | 1,269.9 | 6.8 | % | 1,146.2 | 6.8 | % | |||||||||||||||||||||||||||||||||||||
Total fixed maturities |
$ | 20,612.2 | 100.0 | % | $ | 19,390.6 | 100.0 | % | $ | 18,594.3 | 100.0 | % | $ | 18,542.3 | 100.0 | % | $ | 16,933.9 | 100.0 | % | ||||||||||||||||||||||||||||||||
Fixed Maturities by Issuer Type: |
||||||||||||||||||||||||||||||||||||||||||||||||||||
U.S. government and agencies |
$ | 123.0 | 0.6 | % | $ | 44.1 | 0.2 | % | $ | 43.9 | 0.2 | % | $ | 45.7 | 0.2 | % | $ | 153.9 | 0.9 | % | ||||||||||||||||||||||||||||||||
State and political subdivisions |
471.8 | 2.3 | % | 489.9 | 2.5 | % | 483.0 | 2.6 | % | 484.9 | 2.6 | % | 449.2 | 2.6 | % | |||||||||||||||||||||||||||||||||||||
Foreign governments |
25.0 | 0.1 | % | 26.2 | 0.1 | % | 27.4 | 0.2 | % | 28.2 | 0.2 | % | 28.7 | 0.2 | % | |||||||||||||||||||||||||||||||||||||
Corporate securities |
14,176.4 | 68.8 | % | 13,198.8 | 68.1 | % | 12,548.6 | 67.5 | % | 12,414.0 | 66.9 | % | 11,216.4 | 66.2 | % | |||||||||||||||||||||||||||||||||||||
Residential mortgage-backed securities |
3,806.2 | 18.4 | % | 3,649.3 | 18.8 | % | 3,536.4 | 19.0 | % | 3,536.6 | 19.1 | % | 3,162.4 | 18.7 | % | |||||||||||||||||||||||||||||||||||||
Commercial mortgage-baced securities |
1,829.5 | 8.9 | % | 1,774.8 | 9.2 | % | 1,789.4 | 9.6 | % | 1,873.4 | 10.1 | % | 1,790.2 | 10.6 | % | |||||||||||||||||||||||||||||||||||||
Other debt obligations |
180.3 | 0.9 | % | 207.5 | 1.1 | % | 165.6 | 0.9 | % | 159.5 | 0.9 | % | 133.1 | 0.8 | % | |||||||||||||||||||||||||||||||||||||
Total fixed maturities |
$ | 20,612.2 | 100.0 | % | $ | 19,390.6 | 100.0 | % | $ | 18,594.3 | 100.0 | % | $ | 18,542.3 | 100.0 | % | $ | 16,933.9 | 100.0 | % | ||||||||||||||||||||||||||||||||
Effective Duration |
5.4 | 5.3 | 5.4 | 5.6 | 5.5 | |||||||||||||||||||||||||||||||||||||||||||||||
Average Investment Yield |
5.50% | 5.48% | 5.62% | 5.64% | 5.65% | |||||||||||||||||||||||||||||||||||||||||||||||
Average
Daily Cash and Cash Equivalent Balances by Segment: |
||||||||||||||||||||||||||||||||||||||||||||||||||||
Group |
$ | 9.5 | 3.2 | % | $ | 5.6 | 1.5 | % | $ | 4.7 | 2.1 | % | $ | 18.7 | 3.5 | % | $ | 19.2 | 4.3 | % | ||||||||||||||||||||||||||||||||
Retirement Services |
174.4 | 57.9 | % | 177.6 | 48.2 | % | 163.2 | 75.2 | % | 274.4 | 51.7 | % | 248.6 | 55.5 | % | |||||||||||||||||||||||||||||||||||||
Income Annuities |
8.2 | 2.7 | % | 19.0 | 5.2 | % | 29.0 | 13.4 | % | 62.7 | 11.8 | % | 36.7 | 8.2 | % | |||||||||||||||||||||||||||||||||||||
Individual |
42.6 | 14.1 | % | 31.2 | 8.5 | % | (51.5 | ) | -23.7 | % | 114.8 | 21.7 | % | 116.6 | 26.0 | % | ||||||||||||||||||||||||||||||||||||
Other |
66.5 | 22.1 | % | 134.9 | 36.6 | % | 71.7 | 33.0 | % | 60.0 | 11.3 | % | 26.9 | 6.0 | % | |||||||||||||||||||||||||||||||||||||
Total |
$ | 301.2 | 100.0 | % | $ | 368.3 | 100.0 | % | $ | 217.1 | 100.0 | % | $ | 530.6 | 100.0 | % | $ | 448.0 | 100.0 | % | ||||||||||||||||||||||||||||||||
For the Three Months Ended | For the Six Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||
Jun. 30, | Mar. 31, | Dec. 31, | Sep. 30, | Jun. 30, | Jun. 30, | Jun. 30, | ||||||||||||||||||||||||||||||||||||||||||||||
2010 | 2010 | 2009 | 2009 | 2009 | 2010 | 2009 | ||||||||||||||||||||||||||||||||||||||||||||||
MBS Prepayment Speed Adjustment:2 |
||||||||||||||||||||||||||||||||||||||||||||||||||||
Group |
$ | 0.1 | $ | - | $ | - | $ | - | $ | - | $ | 0.1 | $ | - | ||||||||||||||||||||||||||||||||||||||
Retirement Services |
(0.2 | ) | 0.3 | (0.2 | ) | 0.3 | 0.2 | 0.1 | - | |||||||||||||||||||||||||||||||||||||||||||
Income Annuities |
(0.1 | ) | (0.2 | ) | (0.1 | ) | - | 1.8 | (0.3 | ) | 2.5 | |||||||||||||||||||||||||||||||||||||||||
Individual |
0.2 | (0.1 | ) | 0.1 | 0.3 | 0.8 | 0.1 | 1.1 | ||||||||||||||||||||||||||||||||||||||||||||
Other |
(0.1 | ) | - | - | 0.2 | 0.1 | (0.1 | ) | (0.1 | ) | ||||||||||||||||||||||||||||||||||||||||||
Total |
$ | (0.1 | ) | $ | - | $ | (0.2 | ) | $ | 0.8 | $ | 2.9 | $ | (0.1 | ) | $ | 3.5 | |||||||||||||||||||||||||||||||||||
13
For the Three Months Ended | For the Six Months Ended | |||||||||||||||||||||||||||||||
Jun. 30, | Mar. 31, | Dec. 31, | Sep. 30, | Jun. 30, | Jun. 30, | Jun. 30, | ||||||||||||||||||||||||||
2010 | 2010 | 2009 | 2009 | 2009 | 2010 | 2009 | ||||||||||||||||||||||||||
Group |
||||||||||||||||||||||||||||||||
Medical stop-loss |
$ | 13.9 | $ | 38.4 | $ | 10.2 | $ | 24.3 | $ | 10.0 | $ | 52.3 | $ | 43.2 | ||||||||||||||||||
Limited benefit medical |
5.4 | 2.2 | 2.0 | 2.4 | 3.3 | 7.6 | 6.1 | |||||||||||||||||||||||||
Group life & disability |
1.3 | 0.8 | 1.2 | 0.4 | 0.7 | 2.1 | 1.5 | |||||||||||||||||||||||||
Total |
$ | 20.6 | $ | 41.4 | $ | 13.4 | $ | 27.1 | $ | 14.0 | $ | 62.0 | $ | 50.8 | ||||||||||||||||||
Retirement Services |
||||||||||||||||||||||||||||||||
Fixed annuities |
$ | 616.8 | $ | 369.5 | $ | 249.9 | $ | 470.2 | $ | 547.8 | $ | 986.3 | $ | 1,431.9 | ||||||||||||||||||
Variable annuities |
4.0 | 4.7 | 6.7 | 5.0 | 5.5 | 8.7 | 8.5 | |||||||||||||||||||||||||
Retirement plans1 |
3.1 | 3.3 | 5.3 | 11.7 | 15.2 | 6.4 | 39.2 | |||||||||||||||||||||||||
Total |
$ | 623.9 | $ | 377.5 | $ | 261.9 | $ | 486.9 | $ | 568.5 | $ | 1,001.4 | $ | 1,479.6 | ||||||||||||||||||
Income Annuities |
||||||||||||||||||||||||||||||||
SPIA |
$ | 47.2 | $ | 43.1 | $ | 62.1 | $ | 50.1 | $ | 46.1 | $ | 90.3 | $ | 77.3 | ||||||||||||||||||
Structured settlements |
20.6 | 23.2 | 21.7 | 20.6 | 10.8 | 43.8 | 20.0 | |||||||||||||||||||||||||
Total |
$ | 67.8 | $ | 66.3 | $ | 83.8 | $ | 70.7 | $ | 56.9 | $ | 134.1 | $ | 97.3 | ||||||||||||||||||
Individual |
||||||||||||||||||||||||||||||||
Term life insurance |
$ | 1.1 | $ | 1.5 | $ | 1.5 | $ | 1.6 | $ | 1.3 | $ | 2.6 | $ | 2.0 | ||||||||||||||||||
Permanent life insurance |
1.3 | 1.3 | 1.2 | 1.3 | 1.1 | 2.6 | 2.9 | |||||||||||||||||||||||||
BOLI |
- | 2.7 | - | - | - | 2.7 | 2.5 | |||||||||||||||||||||||||
Total |
$ | 2.4 | $ | 5.5 | $ | 2.7 | $ | 2.9 | $ | 2.4 | $ | 7.9 | $ | 7.4 | ||||||||||||||||||
14
Jun. 30, | Mar. 31, | Dec. 31, | Sep. 30, | Jun. 30, | ||||||||||||||||||
2010 | 2010 | 2009 | 2009 | 2009 | ||||||||||||||||||
Book value per common share 1 |
$ | 17.08 | $ | 14.39 | $ | 12.83 | $ | 13.25 | $ | 6.84 | ||||||||||||
Non-GAAP Financial Measures: |
||||||||||||||||||||||
Adjusted book value per common share 2 |
$ | 15.58 | $ | 15.35 | $ | 15.99 | $ | 15.65 | $ | 15.18 | ||||||||||||
Adjusted book value per common share, as converted 3 |
$ | 15.02 | $ | 14.81 | $ | 15.23 | $ | 14.94 | $ | 14.56 | ||||||||||||
Numerator: |
||||||||||||||||||||||
Total stockholders equity |
$ | 2,342.8 | $ | 1,971.7 | $ | 1,433.3 | $ | 1,480.5 | $ | 763.7 | ||||||||||||
AOCI 4 |
501.1 | 159.5 | (49.7 | ) | 29.8 | (642.9 | ) | |||||||||||||||
Adjusted book value |
$ | 1,841.7 | $ | 1,812.2 | $ | 1,483.0 | $ | 1,450.7 | $ | 1,406.6 | ||||||||||||
Assumed proceeds from exercise of warrants |
218.1 | 218.1 | 218.1 | 218.1 | 218.1 | |||||||||||||||||
Adjusted book value, as converted |
$ | 2,059.8 | $ | 2,030.3 | $ | 1,701.1 | $ | 1,668.8 | $ | 1,624.7 | ||||||||||||
Denominator: 5 |
||||||||||||||||||||||
Basic common shares outstanding |
118.175 | 118.086 | 92.729 | 92.729 | 92.646 | |||||||||||||||||
Diluted common shares outstanding |
137.151 | 137.062 | 111.705 | 111.705 | 111.622 | |||||||||||||||||
Jun. 30, | Mar. 31, | Dec. 31, | Sep. 30, | Jun. 30, | ||||||||||||||||||
2010 | 2010 | 2009 | 2009 | 2009 | ||||||||||||||||||
Basic common shares outstanding, beginning of period |
118.086 | 92.729 | 92.729 | 92.646 | 92.646 | |||||||||||||||||
Primary shares issued in IPO |
- | 25.260 | - | - | - | |||||||||||||||||
Restricted shares issued |
0.137 | 0.097 | - | 0.083 | - | |||||||||||||||||
Shares repurchased |
(0.048 | ) | - | - | - | - | ||||||||||||||||
Basic common shares outstanding, end of period |
118.175 | 118.086 | 92.729 | 92.729 | 92.646 | |||||||||||||||||
Outstanding warrants |
18.976 | 18.976 | 18.976 | 18.976 | 18.976 | |||||||||||||||||
Diluted common shares outstanding, end of period |
137.151 | 137.062 | 111.705 | 111.705 | 111.622 | |||||||||||||||||
15
Twelve Months Ended | ||||||||||||||||||||||
Jun. 30, | Mar. 31, | Dec. 31, | Sep. 30, | Jun. 30, | ||||||||||||||||||
2010 | 2010 | 2009 | 2009 | 2009 | ||||||||||||||||||
ROE: |
||||||||||||||||||||||
Net income for the twelve months ended1 |
$ | 158.3 | $ | 169.5 | $ | 128.3 | $ | 91.3 | $ | 42.4 | ||||||||||||
Average stockholders equity 2 |
$ | 1,598.4 | $ | 1,169.5 | $ | 832.4 | $ | 658.0 | $ | 561.6 | ||||||||||||
ROE |
9.9% | 14.5% | 15.4% | 13.9% | 7.5% | |||||||||||||||||
Operating ROAE: |
||||||||||||||||||||||
Adjusted operating income for the twelve months ended1 |
$ | 153.8 | $ | 157.6 | $ | 147.9 | $ | 146.3 | $ | 145.6 | ||||||||||||
Average adjusted book value3 |
$ | 1,598.8 | $ | 1,502.4 | $ | 1,407.7 | $ | 1,379.9 | $ | 1,359.4 | ||||||||||||
Operating ROAE |
9.6% | 10.5% | 10.5% | 10.6% | 10.7% | |||||||||||||||||
As of | ||||||||||||||||
2010 | 2009 | 2008 | ||||||||||||||
Stockholders Equity |
||||||||||||||||
Dec. 31 | $ | - | $ | 1,433.3 | $ | 286.2 | ||||||||||
Sep. 30 | - | 1,480.5 | 560.9 | |||||||||||||
Jun. 30 | 2,342.8 | 763.7 | 998.8 | |||||||||||||
Mar. 31 | 1,971.7 | 198.5 | 1,178.1 | |||||||||||||
AOCI |
||||||||||||||||
Dec. 31 | $ | - | $ | (49.7 | ) | $ | (1,052.6 | ) | ||||||||
Sep. 30 | - | 29.8 | (782.8 | ) | ||||||||||||
Jun. 30 | 501.1 | (642.9 | ) | (349.7 | ) | |||||||||||
Mar. 31 | 159.5 | (1,161.1 | ) | (141.9 | ) |
Three Months Ended | ||||||||||||
Mar. 31, | Dec. 31, | Sep. 30, | ||||||||||
2009 | 2008 | 2008 | ||||||||||
Net income (loss) |
$ | 5.1 | $ | (4.9 | ) | $ | (4.8 | ) | ||||
Less: Net realized investment losses (net of taxes) |
(28.0 | ) | (35.5 | ) | (41.8 | ) | ||||||
Add: Net investment gains (losses) on FIA options (net of taxes) |
(0.9 | ) | 0.5 | - | ||||||||
Adjusted operating income |
$ | 32.2 | $ | 31.1 | $ | 37.0 | ||||||
16