The following graph compares an investment in the Company’s common stock from May 2, 2013 (the date of the Company’s initial public offering) through December 31, 2014. against (i) an investment in the S&P 500 Index and (ii) an Investment in the S&P 500 Financials Index. The graph assumes $100 was Invested on May 2, 2013 in the Company’s common stock, the S&P 500 index, and the S&P 500 financials Index, as applicable, and that dividends were reinvested on the date of payment without deduction of any commissions. The performance shown in the graph represents past performance and should not be considered an indication of future performance.
Voya Financial, Inc. will provide, without charge, a copy of its 2014 Annual Report on Form 10-K upon the written request of any shareholder. Such requests shall be directed to the Office of the Corporate Secretary, Voya Financial, Inc., 230 Park Avenue, New York. New York, 10169.
This Annual Report contains references to Ongoing Business Adjusted Operating Return on Equity and Ongoing Business Adjusted Operating Earnings, each of which is a "non-
GAAP
financial measure", which means it is a financial measure calculated other than in accordance with U.S. generally accepted accounting principles (US GAAP).
The following tables provide a reconciliation of (i) Ongoing Business Adjusted Operating Return on Equity to Return on equity, and
(ii) Ongoing Business Adjusted Operating Earnings to Net income, each of which is the most comparable financial measure calculated
in accordance with US GAAP.
Additional information on these non-GAAP financial measures may be found in the Voya Financial, Inc. Investor supplement for the three months ended December 31, 2014 and in the Voya Financial, Inc. earnings release for the three and twelve months ended December 31. 2014. each of which is available on the companys Investor website at investors.voya.com.
| Year ended December 31, 2014 |
Year ended December 31, 2013 |
Year ended December 31, 2012 |
||||
|---|---|---|---|---|---|---|
| Net Income (loss) available to Voya Financial, Inc.’s common shareholders | $ | 2,299.7 | $ | 600.5 | $ | 473.0 |
| Voya Financial, Inc. shareholders’ equity: beginning of period | $ | 13,272.2 | $ | 13,874.9 | $ | 12,353.9 |
| Voya Financial, Inc. shareholders’ equity: end of period | $ | 16,107.9 | $ | 13,272.2 | $ | 13,874.9 |
| Voya Financial, Inc. shareholders’ equity: average for period | $ | 14,524.0 | $ | 13,573.6 | $ | 13,114.4 |
| GAAP Return on Equity | 15.8% | 4.4% | 3.6% |
| Ongoing Business adjusted operating earnings before Income taxes1 | $ | 1,377.9 | $ | 1,211.8 | $ | 1,093.2 |
| Income taxes on adjusted operating earnings (based on an assumed tax rate of 35%) |
(482.2) | (424.2) | (382.7) | |||
| Ongoing Business adjusted operating earnings after income taxes | 895.7 | 787.6 | 710.5 | |||
| Interest expense after-tax2 | (77.3) | (79.9) | (88.7) | |||
| Ongoing Business adjusted operating earnings after Income taxes and Interest expense |
$ | 818.4 | $ | 707.7 | $ | 621.7 |
| Beginning of period capital for Ongoing Business | $ | 9,216.0 | $ | 9,057.0 | $ | 10,037.0 |
| End of period capital for Ongoing Business3,4 | $ | 8,777.0 | $ | 9,216.0 | $ | 9,823.0 |
| Average capital for Ongoing Business5 | $ | 9,027.5 | 9,137.0 | 9,930.0 | ||
| Average debt (based on 25% debt-to-capital ratio) | $ | (2,256.9) | (2,284.3) | (2,482.5) | ||
| Average equity for Ongoing Business | $ | 6,770.6 | $ | 6,852.7 | $ | 7,447.5 |
| Adjusted Operating Return on Equity for Ongoing Business | 12.1% | 10.3% | 8.3% |
Reconciliation of Ongoing Business Adjusted Operating Earnings Before Income Taxes to Net Income (Loss)
| Year ended December 31, 2014 |
Year ended December 31, 2013 |
Year ended December 31, 2012 |
|---|
($ in millons)
| Ongoing Business adjusted operating earnings before income taxes | $ | 1,377.9 | $ | 1,211.8 | $ | 1,093.2 |
| DAC/VOBA and other Intangibles unlocking | (21.6) | 133.2 | (77.0) | |||
| Gain on reinsurance recapture | 20.0 | -- | -- | |||
| Lehman bankruptcy/LIHTC loss, net of DAC | -- | 83.6 | -- | |||
| Impact of Investment Portfolio Restructuring | -- | -- | (25.3) | |||
| Operating earnings before Income taxes for Ongoing Business | 1,376.3 | 1,428.6 | 990.9 | |||
| Corporate | (170.4) | (210.6) | (182.3) | |||
| Closed Blocks Institutional Spread Products and Other | 24.7 | 50.6 | 109.7 | |||
| Total operating earnings before Income taxes | 1,230.6 | 1,268.6 | 918.3 | |||
| Income taxes (based on an assumed tax rate of 35%) | (430.7) | (444.0) | (321.4) | |||
| Operating earnings, after-tax | 799.9 | 824.6 | 596.9 | |||
| Closed Block Variable Annuity, after-tax | (165.9) | (786.0) | (450.0) | |||
| Net investment gains (losses) and related charges and adjustments, after-tax | 139.8 | 137.9 | 296.0 | |||
| Other, after-tax | 1,525.9ª | 424.0 | 30.1 | |||
| Net Income (loss) available to Voya Financial, Inc.’s common shareholders | 2,299.7 | 600.5 | 473.0 | |||
| Net income (loss) attributable to noncontrolling interest | 237.7 | 190.1 | 138.2 | |||
| Net Income (loss) | $ | 2,537.4 | $ | 790.6 | $ | 611.2 |
a Amount for the year ended December 31, 2014 includes $1,850.0 of decrease in tax valuation allowance.
Assumes debt-to-capital ratio of approximately 25%, a weighted average pre-tax interest rate of 5.5%, for all periods prior to the third quarter of 2013 (the quarter during which the company completed its recapitalization initiatives), and the actual weighted average pre-tax interest rate for all periods beginning with the third quarter of 2013
Reconcilation of End of Period Capital for Ongoing Business to Shareholders Equity
| As of December 31, 2014 |
As of December 31, 2013 |
As of December 31, 2012 |
|---|
($ in millons)
| End of Period Capital for Ongoing Business | $ | 8,777.0 | $ | 9,216.0 | $ | 9,823.0 |
| Close Block Variable Annuity, Corporate, and Other Closed Blocks | $ | 7,742.9 | 5,721.8 | 4,149.5 | ||
| End of Period Capital | $ | 16,519.9 | 14,937.8 | 13,972.5 | ||
| Financial Leverageb | $ | (3,515.7) | (3,514.7) | (3,808.3 | ||
| Voya Financial, Inc. shareholdersb equity excluding AOCI end of period | $ | 13,004.2 | 11,423.1 | 10,164.2 | ||
| AOCI | $ | 3,103.7 | 1,849.1 | 3,710.7 | ||
| Voya Financial, Inc. shareholdersb equity: end of period | $ | 16,107.9 | $ | 13,272.2 | $ | 13,874.9 |
b Reconcilation of Financial Leverage to Short-term and Long-term Debt
| As of December 31, 2014 |
As of December 31, 2013 |
As of December 31, 2012 |
|---|
($ in millons)
| Short-term debt | $ | -- | $ | -- | $ | 1,064.6 |
| Long-term debt | 3,515.7 | 3,514.7 | 3,171.1 | |||
| Total Debt | 3,515.7 | 3,514.7 | 4,235.7 | |||
| Less operating leverage | -- | -- | (688.5) | |||
| Plus loans from subsidiaries | -- | -- | 261.1 | |||
| Financial Leverage | $ | 3,515.7 | $ | 3,514.7 | $ | 3,808.3 |
The January 1, 2013 beginning capital is different from the December 31, 2012 ending capital at the segment level due to certain reallocations of capital, primarily due to recapitalization activity (completed and anticipated).
Averege capital and equity for 2014 are calculated by taking the average of the quarterly capital and equity averages for the tralling four quarters, while average capital and equity for 2012 and 2013 are calculated as the average of beginning of period and end of period capital and equity, as applicable.
This annual report contains forward-looking statements. Forward-looking statements include statements relating to future developments in our business or expectations for our future financial performance and any statement not involving a historical fact. Forward-looking statements use words such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “plan,” and other words and terms of similar meaning in connection with a discussion of future operating or financial performance. Actual results, performance or events may differ materially from those projected in any forward-looking statement due to, among other things, (i) general economic conditions, particularly economic conditions in our core markets, (ii) performance of financial markets, including emerging markets, (iii) the frequency and severity of insured loss events, (iv) mortality and morbidity levels, (v) persistency and lapse levels, (vi) interest rates, (vii) currency exchange rates, (viii) general competitive factors, (ix) changes in laws and regulations and (x) changes in the policies of governments and/or regulatory authorities. Factors that may cause actual results to differ from those in any forward-looking statement also include those described under “Risk Factors” and “Management’s Discussion and Analysis of Results of Operations and Financial Condition — Trends and Uncertainties” in our Annual Report on Form 10-K for the year ended December 31, 2014, filed with the Securities and Exchange Commission on February 27, 2015.
