VOYA FINANCIAL, INC. FORM 8-K (Current report filing) Filed 08/07/13 for the Period Ending 08/07/13 Address 230 PARK AVENUE NEW YORK, NY 10169 Telephone 2123098200 CIK 0001535929 Symbol VOYA SIC Code 6311 - Life Insurance Fiscal Year 12/31 http://www.edgar-online.com Copyright 2015, EDGAR Online, Inc. All Rights Reserved. Distribution and use of this document restricted under EDGAR Online, Inc. Terms of Use.
UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): August 7, 2013 ING U.S., INC. (Exact name of registrant as specified in its charter) Delaware 001-35897 No. 52-1222820 (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification Number) 230 Park Avenue New York, New York 10169 (Address of principal executive offices) (Zip Code) Registrant s telephone number, including area code: (212) 309-8200 N/A (Former name or former address, if changed since last report) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.02 Results of Operations and Financial Condition ING U.S., Inc. ( ING U.S. ) furnishes herewith a press release announcing its second quarter 2013 results. A copy of the press release is furnished herewith as Exhibit 99.1 and is incorporated by reference in this Item 2.02. As previously announced, ING U.S. will host a conference call on Wednesday, August 7, 2013 at 10:00 am ET to discuss its second quarter 2013 results. The call can be accessed via ING U.S. s investor relations website at http://investors.ing.us. The call will be accompanied by a slide presentation, which will be accessible via ING U.S. s investor relations website at http://investors.ing.us beginning at 9:30 am ET on Wednesday, August 7, 2013. In addition, more detailed financial information can be found in ING U.S. s Quarterly Investor Supplement for June 30, 2013, available on ING U.S. s investor relations website, http://investors.ing.us. The Quarterly Investor Supplement for June 30, 2013 is furnished herewith as Exhibit 99.2 and is incorporated by reference in this Item 2.02. As provided in General Instruction B.2 of Form 8-K, the information and exhibits provided pursuant to this Item 2.02 shall not be deemed to be filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall they be deemed to be incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such a filing. Item 9.01 (d) Exhibits Financial Statements and Exhibits 99.1 Press release of ING U.S., Inc., dated August 7, 2013, announcing second quarter 2013 results (furnished and not filed) 99.2 Quarterly Investor Supplement for June 30, 2013 (furnished and not filed)
SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. ING U.S., INC. (Registrant) Dated: August 7, 2013 By: /s/ Harris Oliner Name: Harris Oliner Title: SVP and Corporate Secretary
Exhibit 99.1 CORPORATE COMMUNICATIONS PRESS RELEASE ING U.S. ANNOUNCES SECOND QUARTER 2013 RESULTS New York, August 7, 2013 ING U.S., Inc. (NYSE: VOYA) today reported financial results for the second quarter of 2013: After-tax operating earnings 1,2 of $177 million, or $0.71 per share, compared with $129 million, or $0.56 per share in 2Q 12 Net loss available to common shareholders of $82 million, or $0.33 per share, compared with 2Q 12 net income available to common shareholders of $634 million, or $2.76 per share A $220 million after-tax loss, including an after-tax loss of $79 million related to nonperformance risk, in the Closed Block Variable Annuity (CBVA) segment drove the net loss available to common shareholders and reflects the CBVA hedging program s focus on protecting regulatory and rating agency capital from market movements, rather than minimizing GAAP earnings volatility. As a result, under the current CBVA hedging program, CBVA typically will be expected to experience a loss when the equity market appreciates and a gain when the equity market depreciates. ONGOING BUSINESS RESULTS ING U.S. s Ongoing Business includes the Retirement, Annuities, Investment Management, Individual Life, and Employee Benefits segments. The Corporate, CBVA, Closed Block Institutional Spread Products and Closed Block Other segments are not reflected in Ongoing Business results. Ongoing Business operating earnings before income taxes of $307 million, compared with $192 million in 2Q 12 1 2 We assume a 35% tax rate on items described as after-tax. Net income (loss) available to common shareholders reflects the actual effective tax rate. Operating earnings is a non-gaap financial measure; information regarding the non-gaap financial measures included in this press release, and a reconciliation of them to GAAP measures, is provided in the tables that accompany this release and the Quarterly Investor Supplement. 1
Ongoing Business adjusted operating earnings 3 before income taxes of $303 million, compared with $279 million in 2Q 12. The following items primarily account for this increase: Increased fee based margin ($43 million positive variance) on higher assets due to market appreciation and positive net flows; Lower investment spread and other investment income ($36 million negative variance), driven primarily by lower investment income (despite higher prepayment fee income), partly offset by reductions in crediting rates; Higher underwriting income ($25 million positive variance) in Individual Life and Employee Benefits; Higher trail commissions ($7 million negative variance); and Lower amortization of DAC/VOBA and other intangibles ($5 million positive variance). Annualized Ongoing Business adjusted operating return on equity (ROE) 4 of 9.9% for the first half of 2013, compared with 8.3% for FY 12 ING U.S. had a strong second quarter as we continued to deliver on our ROE improvement objective with our Ongoing Business adjusted operating ROE growing on an annualized basis to 9.9% for the first half of 2013, up from 8.3% for the full year 2012, said Rodney O. Martin, Jr., Chairman and Chief Executive Officer, ING U.S. During the quarter, we saw positive results among several key measures. Total assets under management and administration grew to $482 billion supported by net flows in our Retirement and Investment Management segments of $442 million and $3.1 billion, respectively. At the same time, we continued to re-position our Individual Life segment with a focus on less capital-intensive products, while also investing in our Employee Benefits product set. With a diverse business and distribution mix, ING U.S. is well positioned to help address America s need for retirement readiness. We remain focused on leveraging our strengths to achieve further success and create value for both our shareholders and our customers, added Martin. 3 4 Ongoing Business adjusted operating earnings before income taxes exclude deferred acquisition costs (DAC), value of business acquired (VOBA), and other intangible unlocking, and the impact of portfolio restructuring in 2012. Prior to excluding these items, total company DAC/VOBA and other intangible unlocking decreased expenses by $4 million in 2Q 13 and increased expenses by $14 million in 2Q 12, and portfolio restructuring reduced investment income (net of DAC) by $73 million in 2Q 12. The calculation of the adjusted operating ROE of Ongoing Business is provided in the tables that accompany this release. 2
SECOND QUARTER 2013 SUMMARY NM = Not Meaningful Three months ended June 30, ($ in millions, except per share amounts) 2013 2012 Change Operating earnings before income taxes by segment Retirement $ 132.1 $ 71.1 85.8 % Annuities 59.5 26.9 121.2 Investment Management 41.1 31.2 31.7 Individual Life 40.0 33.4 19.8 Employee Benefits 34.1 29.1 17.2 Ongoing Business $ 306.8 $ 191.7 60.0 Corporate (52.8) (32.7) NM Closed Block Institutional Spread Products and Other 18.0 39.8 (54.8) Total operating earnings before income taxes $ 272.0 $ 198.8 36.8 Total operating earnings, after-tax 1 $ 176.8 $ 129.2 36.8 Closed Block Variable Annuity, after-tax 1 (220.0) 248.2 NM Net investment gains (losses), after-tax 1 0.5 86.2 NM Other, after-tax 2 (42.6) 388.5 NM Net income (loss) $ (85.3) $ 852.1 NM Net income (loss) attributable to noncontrolling interest (3.1) 217.7 NM Net income (loss) available to common shareholders $ (82.2) $ 634.4 NM Operating earnings per share $ 0.71 $ 0.56 26.8 Net income (loss) per share $ (0.33) $ 2.76 NM Weighted average shares outstanding (in millions) 250.3 230.0 1. Assumes 35% tax rate 2. Other, after-tax consists of net guaranteed benefit hedging gains (losses) and related charges and adjustments; income (loss) from business exited; certain expenses related to the anticipated divestment of ING U.S. by ING Group, net income (loss) attributable to noncontrolling interest, and the difference between the actual tax rate for the quarter and the federal tax rate of 35%, which is primarily driven by changes in tax valuation allowances KEY SECOND QUARTER 2013 HIGHLIGHTS Ongoing Business six months 2013 annualized adjusted operating return on capital (ROC) 5 of 8.3%, compared with 7.2% for full year 2012 5 The calculation of Ongoing Business adjusted operating return on capital is provided in the tables that accompany this release. 3
Retirement Solutions and Investment Management accounted for 74% of Ongoing Business adjusted operating earnings before income taxes Retirement net flows of $442 million, driven by strong flows in Full Service Corporate Markets and Stable Value Investment Management operating margin of 27.6%; net flows of $3.1 billion driven by an increase in Investment Management sourced net flows Individual Life sales of $27 million, reflecting a shift to less capital-intensive products Employee Benefits loss ratio for Stop Loss of 72.1% and loss ratio for Group Life of 75.4%, better than target of 77-80% Total assets under management (AUM) of $261 billion and total assets under management and administration of $482 billion Combined estimated risk based capital (RBC) ratio of 454%, above the company s target of 425% Pro forma debt to capital ratio excluding accumulated other comprehensive income (AOCI) of 25.4% (pro forma for the repayment of $150 million owed to ING Verzekeringen N.V., a subsidiary of ING Group, in July 2013) Book value per share (excluding AOCI) of $39.82 BUSINESS SEGMENT DISCUSSIONS The following discussions compare the second quarters of 2013 and 2012 unless otherwise noted. RETIREMENT POSITIVE NET FLOWS AND HIGHER ASSETS UNDER MANAGEMENT DRIVING HIGHER FEES Operating earnings before income taxes were $132 million compared with $71 million. Adjusted operating earnings 6 before income taxes were $134 million compared with $126 million a year ago. The following items primarily account for this increase: Higher fee based margin ($15 million positive variance) on robust variable asset deposit growth and market performance as well as recordkeeping change orders; fees from change orders temporarily increased the recordkeeping margin in the first half of 2013; 6 Retirement adjusted operating earnings before income taxes exclude deferred acquisition costs (DAC), value of business acquired (VOBA), and other intangible unlocking, and the impact of portfolio restructuring in 2012. Prior to excluding these items, DAC/VOBA and other intangible unlocking increased expenses by $1 million in 2Q 13 and increased expenses by $5 million in 2Q 12, and portfolio restructuring reduced investment income (net of DAC) by $50 million in 2Q 12. 4
Lower investment spread and other investment income ($16 million negative variance) due to lower investment income, partly offset by reductions in crediting rates; and Lower amortization of intangibles ($6 million positive variance) as a result of a reduced amortization rate versus the prior year due to higher expected future profitability. Retirement net flows were $442 million compared with $557 million in 2Q 12. Net flows vary in size and timing, sometimes substantially, from one quarter to the next. Retirement AUM totaled $96 billion as of June 30, 2013, up from $84 billion as of June 30, 2012 and flat from $96 billion as of March 31, 2013. ANNUITIES NEGATIVE FLOWS CONSISTENT WITH PLANNED RUN-OFF OF MULTI YEAR GUARANTEE ANNUITY (MYGA) AND ANNUAL RESET (AR) Operating earnings before income taxes were $60 million compared with $27 million. Adjusted operating earnings 7 before income taxes were $50 million compared with $54 million a year ago. The following items primarily account for this decrease: Lower investment spread and other investment income ($6 million negative variance) primarily driven by lower investment income, partly offset by reductions in crediting interest; and Higher fee based margin ($3 million positive variance) on higher mutual fund custodial assets. Net outflows were ($244) million, as lapses on existing fixed rate annuity in-force policies, especially older products with high fixed rate crediting levels, exceeded new sales. AUM for the Annuities segment totaled $26 billion as of June 30, 2013, essentially flat from $26 billion as of March 31, 2013 and from $26 billion as of June 30, 2012. Included in those totals were AUM for the company s mutual fund custodial product (Select Advantage), which increased to $2.8 billion as of June 30, 2013, up from $2.7 billion as of March 31, 2013 and $2.1 billion as of June 30, 2012. 7 Annuities adjusted operating earnings before income taxes exclude deferred acquisition costs (DAC), value of business acquired (VOBA), and other intangible unlocking, and the impact of portfolio restructuring in 2012. Prior to excluding these items, DAC/VOBA and other intangible unlocking decreased expenses by $10 million in 2Q 13 and increased expenses by $9 million in 2Q 12, and portfolio restructuring reduced investment income (net of DAC) by $19 million in 2Q 12. 5
INVESTMENT MANAGEMENT HIGHER FEE BASED MARGIN DRIVEN BY HIGHER AUM Operating earnings before income taxes were $41 million compared with $31 million. Adjusted operating earnings 8 before income taxes were $41 million compared with $29 million a year ago. The following items primarily account for the increase: Higher fee based margin ($25 million positive variance) driven primarily by growth in AUM from strong net flows, equity market appreciation, and performance fees; Higher administrative expenses ($9 million negative variance) driven by an increase in variable expenses and performance-related compensation expenses consistent with the increase in revenues; and Lower investment capital and other investment income ($4 million negative variance) primarily as a result of a $6 million gain in investment capital results compared with an $11 million gain in the year ago quarter. Operating margin was 27.6% compared with 24.0% a year ago and 22.8% in the first quarter of 2013. The increase in operating margin compared with the prior year reflects the impact of the items described above. Operating margin excluding investment capital results was 24.6% compared with 15.3% a year ago and 21.1% in the first quarter of 2013. Third-party 9 inflows were $7.3 billion compared with $3.4 billion a year ago. Third-party net flows were $3.1 billion compared with ($0.8) billion a year ago. Sub-advisor replacement inflows (performance-driven replacement of non-ing U.S. mutual fund sub-advisors) in the current quarter were $537 million compared with none in the year ago period. Third-party AUM totaled $110 billion, up from $91 billion a year ago and $108 billion as of March 31, 2013. Positive net flows and U.S. equity market appreciation, partially offset by the effect of rising interest rates on bond funds, drove the increase in AUM from March 31, 2013. 8 9 Investment Management adjusted operating earnings before income taxes exclude the impact of portfolio restructuring in 2012. Prior to excluding this item, portfolio restructuring led to a gain of $2 million in 2Q 12. Excludes general account assets of ING U.S. s insurance company subsidiaries. 6
INDIVIDUAL LIFE PLANNED DECLINE IN SALES AND RIGHT-SIZING OF EXPENSE BASE DROVE RESULTS Operating earnings before income taxes were $40 million compared with $33 million. Adjusted operating earnings 10 before income taxes were $45 million compared with $37 million a year ago. The following items primarily account for this increase: Higher net underwriting gain and other revenue ($16 million positive variance); Lower investment spread and other investment income ($13 million negative variance) primarily related to reduced investment income, partly offset by reductions in crediting rates; and Lower administrative expenses ($6 million positive variance), corresponding to a lower level of sales. Sales decreased to $27 million from $76 million in 2Q 12 as a result of deliberate pricing actions and product suspensions. ING U.S. ceased sales of select capital intensive products beginning in the second half of 2012. EMPLOYEE BENEFITS INCREASED UNDERWRITING INCOME Operating earnings before income taxes were $34 million compared with $29 million. Adjusted operating earnings 11 before income taxes were $34 million compared with $33 million a year ago. The following items primarily account for this increase: Higher net underwriting gain (loss) ($6 million positive variance) reflecting an increase in underwriting income from Stop Loss and Voluntary Benefits, Disability, and Other, partially offset by lower income from Group Life, as the 2Q 13 results benefited from favorable mortality; and Lower investment spread and other investment income, higher administrative expenses, and higher trail commissions ($5 million negative variance) primarily due to lower investment yield and higher commission expenses due to the mix of new sales. The loss ratio for Group Life was 75.4% compared with a year ago at 69.5%. The loss ratio for Stop Loss improved to 72.1% compared with 75.5% a year ago reflecting continued discipline in underwriting and risk selection. The loss ratio results for both Group Life and Stop Loss were better than the expected range of 77-80%. 10 11 Individual Life adjusted operating earnings before income taxes exclude deferred acquisition costs (DAC), value of business acquired (VOBA), and other intangible unlocking, and the impact of portfolio restructuring in 2012. Prior to excluding these items, DAC/VOBA and other intangible unlocking increased expenses by $5 million in 2Q 13, and portfolio restructuring reduced investment income (net of DAC) by $3 million in 2Q 12. Employee Benefits adjusted operating earnings before income taxes exclude the impact of portfolio restructuring in 2012. Prior to excluding this item, portfolio restructuring reduced investment income by $4 million in 2Q 12. 7
Employee Benefits sales were $18 million compared with $34 million, mainly driven by lower Group Life and Stop Loss sales. The decline in Group Life sales reflects less activity from employer groups, benefit consultants, and brokers putting life and disability plans out to market as they prepare to deal with the regulatory changes and requirements created by recently enacted federal health care reform. In Stop Loss, we continued to focus on profitable growth and careful risk selection over gaining market share. CORPORATE Operating earnings before income taxes was a loss of $53 million compared with a loss of $33 million. Contributing to the $20 million negative variance was higher interest expense due to replacing short-term debt with longer-term debt, as well as lower investment income. These items were partially offset by lower letter of credit expenses in 2Q 13 due to the termination of the contingent capital letter of credit facility supporting the CBVA segment. CLOSED BLOCK INSTITUTIONAL SPREAD PRODUCTS AND CLOSED BLOCK OTHER Operating earnings before income taxes were $18 million compared with $40 million a year ago driven by a one-time reimbursement of expenses of $22 million by ING Group in 2Q 12. Closed Block Institutional Spread Products average AUM decreased to $3.8 billion from $3.9 billion as of March 31, 2013 and $5.2 billion as of June 30, 2012 and reflect the continued run-off of the block. CLOSED BLOCK VARIABLE ANNUITY Net loss before income taxes was $338 million, including a loss before income taxes of $121 million due to changes in the fair value of guaranteed benefit derivatives related to nonperformance risk, which the company considers a noneconomic development. This compares with a gain of $382 million a year ago, which included a nonperformance risk gain before income taxes of $170 million. The equity market appreciation in 2Q 13 resulted in accounting asymmetry for the CBVA segment, where our hedging program is designed primarily to protect regulatory and rating agency capital from equity market movements rather than minimize GAAP earnings volatility. During the quarter, guarantee and overlay equity hedge losses were approximately $0.2 billion, compared with a $0.2 billion equity-related decline in statutory AG43 reserves in excess of reserves for cash surrender value. This resulted in a net neutral impact to regulatory surplus related to equity market movement. 8
The retained net amount at risk for CBVA living benefit guarantees improved to $3.8 billion from $4.4 billion at the end of 1Q 13 primarily due to favorable interest rate movements. INVESTMENTS Other-than-temporary impairments on the investment portfolio were $7.2 million in the quarter. The net unrealized gain on available-for-sale fixed securities before income taxes decreased to $3.9 billion as of June 30, 2013 from $7.1 billion as of March 31, 2013. The $3.2 billion decrease in the net unrealized gain on available-for-sale fixed securities before income taxes is primarily attributable to the increase in U.S. Treasury rates during the second quarter of 2013 impacting the valuation of corporate bonds and U.S. Treasury securities. 9
Supplementary Financial Information More detailed financial information can be found in ING U.S. s Quarterly Investor Supplement, which is available on ING U.S. s investor relations website, investors.ing.us. Earnings Conference Call and Slide Presentation ING U.S. will host a conference call on Wednesday, August 7, 2013 at 10:00 am ET to discuss the company s second quarter 2013 results. The call and slide presentation can be accessed via the company s investor relations website at investors.ing.us. A replay of the call will be available on the company s investor relations website at investors.ing.us starting at 1:00 pm ET on August 7. About ING U.S. ING U.S. (NYSE: VOYA), which plans to rebrand in the future as Voya Financial, is a premier retirement, investment and insurance company serving the financial needs of approximately 13 million individual and institutional customers in the United States. The company s vision is to be America s Retirement company and its guiding principle is centered on solving the most daunting financial challenge facing Americans today retirement readiness. Working directly with clients and through a broad group of financial intermediaries, independent producers, affiliated advisors and dedicated sales specialists, ING U.S. provides a comprehensive portfolio of asset accumulation, asset protection and asset distribution products and services. With a dedicated workforce of approximately 7,000 employees, ING U.S. is grounded in a clear mission to make a secure financial future possible one person, one family and one institution at a time. For more information, visit http://ing.us. Media Contact: Christopher Breslin 212-309-8941 Christopher.Breslin@us.ing.com 10 Investor Contact: Darin Arita 212-309-8999 IR@us.ing.com
Use of Non-GAAP Financial Measures We use operating earnings (both before and after income taxes), which consists of operating revenues minus operating benefits and expenses, to evaluate segment performance. Operating earnings does not replace net income (loss) as the measure of our consolidated results of operations. Each segment s operating earnings before income taxes is calculated by adjusting income (loss) before income taxes for the following items: Net investment gains (losses), net of related amortization of DAC, VOBA, sales inducements and unearned revenue. Net investment gains (losses) include gains (losses) on the sale of securities, impairments, changes in the fair value of investments using the fair value option ( FVO ) unrelated to the implied loan-backed security income recognition for certain mortgage-backed obligations and changes in the fair value of derivative instruments, excluding realized gains (losses) associated with swap settlements and accrued interest; Net guaranteed benefit hedging gains (losses), which include changes in the fair value of derivatives related to guaranteed benefits, net of related reserve increases (decreases) and net of related amortization of DAC, VOBA and sales inducements, less the estimated cost of these benefits. The estimated cost, which is reflected in operating results, reflects the expected cost of these benefits if markets perform in line with our long-term expectations and includes the cost of hedging. All other derivative and reserve changes related to guaranteed benefits are excluded from operating results, including the impacts related to changes in our nonperformance spread; Income (loss) related to business exited through reinsurance or divestment; Income (loss) attributable to noncontrolling interests; Income (loss) related to early extinguishment of debt; Impairment of goodwill, value of management contract rights and value of customer relationships acquired; Immediate recognition of net actuarial gains (losses) related to our pension and other post-employment benefit obligations and gains (losses) from plan amendments and curtailments; and Other items, including restructuring expenses (severance, lease write-offs, etc.), integration expenses related to our acquisition of CitiStreet and certain third-party expenses and deal incentives related to the anticipated divestment of ING U.S. by ING Group. 11
We also use adjusted operating earnings before income taxes to evaluate segment performance. This measure excludes from operating earnings the following items: (1) DAC/VOBA and other intangibles unlocking and (2) investment portfolio restructurings implemented in 2012. DAC/VOBA and other intangibles unlocking can be volatile, so excluding the effect of this can improve period to period comparability. The investment portfolio restructurings in 2012 reduced the run-rate level of investment income, and we believe that this reduction is not reflective of the performance of our Ongoing Business. We focus on Ongoing Business operating earnings before income taxes (both adjusted and unadjusted as described above) because this shows business performance for our Ongoing Business segments and excludes the volatility seen in our Closed Block segments. We focus on Ongoing Business adjusted operating ROE and adjusted operating ROC as key financial metrics for our stakeholders because these metrics indicate how effectively we use capital resources allocated to our Ongoing Business. In our Investment Management business we also focus on the operating margin excluding Investment Capital results. The results from Investment Capital can be volatile, so excluding the effect of this can improve period to period comparability. In addition to book value per share including AOCI, we focus on book value per share excluding AOCI. Included in AOCI are investment portfolio unrealized gains or losses. In the ordinary course of business we do not plan to sell most investments for the sole purpose of realizing gains or losses, so book value per share excluding AOCI provides a metric consistent with that view. Our CBVA segment is managed to focus on protecting regulatory and rating agency capital rather than GAAP earnings and, therefore, its results of operations are not reflected within operating earnings before income taxes. When we present the adjustments to Income (loss) before income taxes on a consolidated basis, each adjustment excludes the relative portions attributable to our CBVA segment. The most directly comparable GAAP measure to operating earnings (both before and after income taxes), adjusted operating earnings before income taxes, Ongoing Business operating earnings before income taxes and Ongoing Business adjusted operating earnings before income taxes, is income (loss) before income taxes. For a reconciliation of each of these non-gaap measures, see the tables that accompany this release, as well as our Quarterly Investor Supplement. We also analyze our Ongoing Business performance based on the sources of earnings. We believe this supplemental information is useful in order to gain a better understanding of our financial performance because it provides insight into the main drivers of operating earnings (loss) before income taxes of our Ongoing Business. The sources of earnings are defined as follows: Investment spread and other investment income consists of net investment income and net realized investment gains (losses) associated with swap settlements and accrued interest, less interest credited to policyholder reserves. 12
Fee based margin consists primarily of fees earned on AUM, AUA, and transaction based recordkeeping fees. Net underwriting gain (loss) and other revenue contains the difference between fees charged for insurance risks and incurred benefits, including mortality, morbidity, and surrender results, contractual charges for universal life and annuity contracts, the change in the unearned revenue reserve for universal life contracts, and that portion of traditional life insurance premiums intended to cover expenses and profits. Certain contract charges for universal life insurance are not recognized in income immediately, but are deferred as unearned revenues and are amortized into income in a manner similar to the amortization of DAC. Administrative expenses are general expenses, net of amounts capitalized as acquisition expenses and exclude commission expenses and fees on letters of credit. Trail commissions are commissions paid that are not deferred and thus recorded directly to expense. For a detail explanation of DAC/VOBA and other intangibles amortization/unlocking see Unlocking of DAC/VOBA and other Contract Owner/Policyholder Intangibles in our SEC filings. More details on these sources of earnings can be found in ING U.S. s Quarterly Investor Supplement, which is available on ING U.S. s investor relations website, investors.ing.us. 13
ING U.S. Calculation and Reconciliation of Return on Equity and Return on Capital Six Months Ended Three Months Ended ($ in millions, unless otherwise indicated) June 30, 2013 March 31, 2013 Year ended December 31, 2012 GAAP Return on Equity Net income (loss) available to ING U.S., Inc. s common shareholders $ (294.2) $ (212.0) $ 473.0 ING U.S., Inc. shareholders equity: beginning of period $ 13,874.9 $ 13,874.9 $ 12,353.9 ING U.S., Inc. shareholders equity: end of period $ 12,471.6 $ 13,391.1 $ 13,874.9 ING U.S., Inc. shareholders equity: average for period $ 13,173.3 $ 13,633.0 $ 13,114.4 GAAP Return on Equity -4.5 % -6.2% 3.6% Ongoing Business Adjusted Operating Return on Capital and Adjusted Operating Return on Equity Ongoing Business adjusted operating earnings (AOE) before income taxes $ 581.3 $ 278.1 $ 1,093.2 Income taxes on AOE (based on an assumed tax rate of 35%) (203.4) (97.3) (382.7) Ongoing Business adjusted operating earnings after income taxes 377.9 180.8 710.5 Interest expense after-tax 1 (40.8) (20.2) (88.7) Ongoing Business adjusted operating earnings after income taxes and interest expense $ 337.1 $ 160.6 $ 621.7 Beginning of period capital for Ongoing Business 2 $ 9,057.0 $ 9,057.0 $ 10,037.0 End of period capital for Ongoing Business 9,190.0 9,012.0 9,823.0 Average capital for Ongoing Business 9,123.5 9,034.5 9,930.0 Average debt (based on 25% debt-to-capital ratio) (2,280.9) (2,258.6) (2,482.5) Average equity for Ongoing Business $ 6,842.6 $ 6,775.9 $ 7,447.5 Adjusted Operating Return on Capital for Ongoing Business 8.3 % 8.0% 7.2% Adjusted Operating Return on Equity for Ongoing Business 1 9.9 % 9.5% 8.3% ING U.S. Reconciliation of Ongoing Business Adjusted Operating Earnings to Net Income (Loss) Six Months Ended Three Months Ended ($ in millions) June 30, 2013 March 31, 2013 Year ended December 31, 2012 Ongoing Business adjusted operating earnings before income taxes $ 581.3 $ 278.1 $ 1,093.2 DAC/VOBA and other intangibles unlocking 10.9 7.3 (77.0) Impact of investment portfolio restructuring (25.3) Operating earnings before income taxes for Ongoing Business 592.2 285.4 990.9 Corporate (102.9) (50.1) (182.3) Closed Blocks Institutional Spread Products and Other 39.4 21.4 109.7 Total operating earnings before income taxes 528.7 256.7 918.3 Income taxes (based on an assumed tax rate of 35%) (185.0) (89.9) (321.4) Operating earnings, after-tax 343.7 166.8 596.9 Closed Block Variable Annuity, after-tax (530.1) (310.1) (450.0) Net investment gains (losses) and related charges and adjustments, after-tax 27.7 27.2 296.1 Other, after-tax (135.5) (95.9) 30.0 Net income (loss) available to ING U.S., Inc. s common shareholders (294.2) (212.0) 473.0 Net income (loss) attributable to noncontrolling interest (16.6) (13.5) 138.2 Net income (loss) $ (310.8) $ (225.5) $ 611.2 14
ING U.S. Reconciliation of End of Period Capital for Ongoing Business to Shareholders Equity As of June 30, 2013 As of March 31, 2013 As of December 31, 2012 ($ in millions) End of Period Capital for Ongoing Business $ 9,190.0 $ 9,012.0 $ 9,823.0 Closed Block Variable Annuity, Corporate, and Other Closed Blocks 4,877.1 4,633.6 4,149.5 End of Period Capital 14,067.1 13,645.6 13,972.5 Financial Leverage 3 (3,683.3) (3,707.3) (3,808.3) ING U.S., Inc. shareholders equity excluding AOCI end of period 10,383.8 9,938.3 10,164.2 AOCI 2,087.8 3,452.8 3,710.7 ING U.S., Inc. shareholders equity: end of period $ 12,471.6 $ 13,391.1 $ 13,874.9 1 2 Assumes debt-to-capital ratio of approximately 25% in each year and a weighted average pre-tax interest rate of approximately 5.5% on financial leverage The 1/1/13 beginning capital is different from the 12/31/12 ending capital at the segment level due to certain reallocations of capital, primarily due to recapitalization activity (completed and anticipated) As of June 30, 2013 As of March 31, 2013 As of December 31, 2012 ($ in millions) 3 Reconciliation of Financial Leverage to Short-term and Long-term Debt Short-term debt $ 138.6 $ 321.2 $ 1,064.6 Long-term debt 3,265.7 3,440.8 3,171.1 Total Debt 3,404.3 3,762.0 4,235.7 Less operating leverage (329.1) (688.4) Plus loans from subsidiaries 279.0 274.4 261.0 Financial Leverage $ 3,683.3 $ 3,707.3 $ 3,808.3 ING U.S. Reconciliation of Book Value Per Share As of June 30, 2013 Book value per share, including AOCI $ 47.82 Per share impact of AOCI 8.00 Book value per share, excluding AOCI $ 39.82 15
ING U.S. Reconciliation of Investment Management Operating Margin Three Months Ended Three Months Ended ($ in millions, unless otherwise indicated) June 30, 2013 June 30, 2012 Operating revenues $ 148.6 $ 130.2 Operating expenses 107.5 99.0 Operating earnings before income taxes $ 41.1 $ 31.2 Operating margin 27.6 % 24.0 % Operating revenues $ 148.6 $ 130.2 Less: Investment Capital Results 6.1 13.3 Revenues excluding Investment Capital 142.5 116.9 Operating expenses 107.5 99.0 Operating earnings excluding Investment Capital $ 35.0 $ 17.9 Operating Margin excluding Investment Capital 24.6 % 15.3 % Forward-Looking and Other Cautionary Statements This press release 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 forwardlooking 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 Form 10-Q, and under Risk Factors, Management s Discussion and Analysis of Results of Operations and Financial Condition Trends and Uncertainties and Business Closed Blocks Closed Block Variable Annuity in our Form S-1 Registration Statement (file no. 333-184847), both filed or to be filed with the Securities and Exchange Commission. 16
ING June This report U.S.Quarterly 3 0, 2 should 0 1 3 be Investor read in Supplement conjunction with ING U.S. Inc. s Quarterly Report on Form 10-Q for the period ended June 30, 2013 as filed with the Securities and Exchange Commission. All financial information is unaudited.
ING Table Explanatory Organizational Return Adjusted DAC/VOBA Consolidated Retirement Annuities Investment Account Individual Employee Sources Key Corporate ISP Closed Assets General Portfolio Alternative Unrealized RMBS CMBS Mortgage US Exposure Additional Adjustments Average Operating Ongoing Fixed Financial Page and Metrics U.S. 2 Backed of Maturity Under of Securities and Blocks Foreign Other Account of Contents Capital Value Business Composition Results Ratings 70 Loans Earnings Revenues Benefits Life Information Gains Other Investment European Note 633 39 43 to Segment Balance Statements Capital Management/Assets Variable Chart Securities Hannover Rollforward by Operating Corporate and on 53 Summary (Losses) Asset-Backed 70 on 7 Sources 22 27 32 38 42 45 Real and by Under Financial Non-GAAP Structure 5 Sheets Debt- 52 Trends Before Annuity Income Segment 56 Type Operating Estate of Earnings 55 of 28 Rollforward Management/Assets Operations 57 by Fixed 9 Before by Operating Earnings 17 35 Leverage 21 26 31 37 41 18 Source 54 59 Income Death Securities 13-14 Segment 65 Financial Under 47 Maturities Earnings by Interest, 60 Life and Taxes Segment 34 Reconciliation 10 (Loss) 24 29 50 Earnings 64 Administration 16 Living Summary Information by 12 After and Modco Before Segment 63 Under 11 Benefits Equity 58 Reinsurance Income 66-68 Administration 3-4 23 15 Securities 49 Taxes Taxes 869 61 4819
Operating Each backed Net reflected our Income Impairment Immediate Other Page nonperformance investment guaranteed 3 segment s items, of security (loss) 70 earnings recognition operating of including attributable related goodwill, gains benefit income operating before spread; (losses), to results, restructuring of hedging recognition business early value net to earnings income noncontrolling actuarial reflects extinguishment net of gains exited management of taxes before expenses related the (losses), gains certain through is expected income interests; amortization (losses) internal of (severance, which mortgage-backed contract reinsurance debt; taxes cost related include measure of rights is of lease these calculated DAC, to changes and we our divestment; write-offs, benefits obligations use value VOBA, pension by in to adjusting if the evaluate etc.), markets customer sales and fair and other integration value inducements changes segment income perform relationships post-employment of derivatives (loss) performance. expenses the and line fair before unearned acquired; with value related income benefit our Operating of long-term revenue. derivative to guaranteed obligations taxes our earnings acquisition for Net expectations instruments, the investment benefits, and following before of gains CitiStreet and income net excluding (losses) gains items: of includes related (losses) taxes and from realized certain the does reserve plan include cost not gains third-party amendments of increases replace gains hedging. (losses) (losses) net expenses (decreases) and All associated income other curtailments; on the and (loss) derivative and sale with deal net as of swap incentives the and of securities, and related GAAP settlements reserve related amortization measure impairments, changes and to the of accrued the related anticipated of changes DAC, consolidated interest; to VOBA guaranteed divestment the results fair and value sales benefits of the operations of inducements, Company investments are excluded and by less consists using ING from the Group. the estimated operating of fair operating value results, cost option revenues of these including ( FVO ) benefits. less operating the unrelated impacts The estimated benefits to related the implied and cost, to changes expenses. which loan-in is
ING Explanatory Adjusted unlocking realizing Our income FVO revenue; Gain perform Revenues Other Operating adjustment The We presentation Investment Fee Net amortization Administrative Trail For Page universal addition analyze realized based underwriting most Closed U.S commissions 4 (loss) unrelated detail adjustments of taxes gains operating life directly 70 attributable margin revenues can line to excludes spread explanation Block our investment Note can of contracts, book be change or to with expenses DAC. Ongoing a be volatile, gain to losses, the comparable consists consolidated Variable and to are value earnings helpful also businesses our the Non-GAAP operating implied to a (loss) commissions other and measure of gains long-term relative excludes noncontrolling fair are Business primarily DAC/VOBA for Annuity book that investment and general value excluding share loan-backed (losses) GAAP also investors exited revenues basis, portions other of value Financial expectations performance of including our paid of expenses, revenues derivatives measure each through and internal fees the segment interests; income of and to primarily that attributable related security traditional adjustment understand effect share Information earned other accumulate is reinsurance to measure net of contains managed consists based revenues. excluding not operating related of our charges intangibles of reflect income includes this deferred to amounts Closed life AUM, excludes the we our can to of other fee insurance and main or We recognition guaranteed use earnings revenues net AOCI following: Closed focus improve the divestment; sources Block AUA, income and amortization/unlocking adjustments, capitalized calculate comprehensive investment to drivers the cost evaluate on thus provides Block relative Variable and premiums before is protecting earned of period benefits, the recorded total of earnings. hedging. transaction as Variable operating difference certain income segment a which portions revenues. to acquisition by Annuity metric intended income period our regulatory which directly All We mortgage-backed revenues include and Annuity taxes performance. broker based earnings consistent attributable between other believe segment, see comparability. For include (AOCI), net expenses Unlocking recordkeeping gains a cover realized and dealers derivative expense. net by segment. reconciliation (loss) this fees changes adjusting rating with income since we (losses) expenses to This and supplemental charged investment our look before that obligations The this agency and of exclude sales measure (loss) Closed view. on each DAC/VOBA fees. segment investment reserve the and of income book for the of capital operating before fair segment s non-proprietary commission profits. gains Block insurance sale excludes and information value changes taxes income rather (losses) managed Variable portfolio Certain and per securities, revenue of from risks share related derivatives other than our expenses taxes. in associated contract operating to and products, Annuity useful restructurings ongoing the to achieving excluding Contract focus for impairments, total For incurred fair guaranteed the and related a charges value segment. revenues, with businesses. order following reconciliation which earnings fees Owner/Policyholder operating protecting AOCI. benefits, swap of to changes for are 2012 derivative benefits guaranteed gain letters please the Included settlements universal items: reflected The metrics including regulatory following reduced a better of sources refer are operating the credit. instruments, benefits, and, net excluded life understanding the fair AOCI Intangibles mortality, items: of insurance therefore, run-rate value commission accrued earnings Operating are less from (1) excluding of the morbidity, DAC/VOBA level agency are investments interest, its operating are of before estimated our results not expense of Revenues defined realized SEC recognized investment capital operating income less portfolio and of revenues, cost filings. using and as interest operations surrender rather by gains our such: taxes of other earnings Segment unrealized income, these segments including than credited (losses) to intangibles results, are income benefits. achieving (loss) and not page immediately, gains associated to operating the contractual we reflected policyholder (loss) before unlocking The impacts believe operating this losses. estimated before income revenues, document. within related that but charges and In swap reserves. income metrics. are such the operating taxes (2) cost, to as deferred settlements for ordinary investment effects changes well for taxes, which When universal the earnings as as are refer course other is following we unearned and reflected not portfolio life present to items before reflective accrued of nonperformance the and business reasons: revenues Consolidated where the annuity restructurings income operating interest. adjustments of the we (1) contracts, and taxes. income do performance we These spread; results, are not Earnings analyze implemented When to amortized plan items is the Total reflects passed to change we our Before are of revenues sell present business our into on net the most to Ongoing Income 2012. of income expected the third the on related investments using unearned adjustments DAC/VOBA parties. consolidated Taxes Business. cost amortization this a manner revenue of information page these to and similar basis, Income sole reserve benefits this of other unearned each and purpose document. to (loss) intangibles the for (2) if markets this before of
Organizational ING Ongoing Investment Insurance Closed Corporate Annuities Full Recordkeeping Services Stable Plans IRAs Brokerage accounts Annuity Retirement, Fixed Equity Multi-assets Senior Alternatives Individual Term Universal Indexed universal Employee Stop Voluntary Group Variable Other Page Service U.S. loss 5 Indexed Income value life disability bank of Blocks and Annuity Business life 70 Solutions Benefits benefits Life Management Retail loans strategies custodial annuities Chart Institutional products and solutions Spread Funds products
ING Three 6/30/13 (in Ongoing Debt Per Operating Net Total Book Weighted Ending (1) Page millions Assumes Share income U.S. 6 to ING value Months of shares Capital 3/31/13 Business 70 Key Data: average earnings U.S. per USD, (loss)(85.3)(225.5)(106.9) debt-to-capital Ended outstanding Metrics share (Excluding Inc. 12/31/12 attributable available except shares operating before Shareholders Year-to-Date (Excluding share(0.33)(0.92)(0.10) outstanding for 9/30/12 income (in AOCI) ratio return per 0.71 millions) ING noncontrolling AOCI) of 6/30/12 0.73 taxes Ongoing taxes ING Equity Excluding 26.2% U.S. approximately (in equity data) 386.8 0.59 260.8 Inc. s 39.82 millions) 27.2% 6/30/13 0.76 852.1(310.8) (1) 1.59 230.0 common 43.21 U.S. interest(3.1)(13.5)(84.2) 10.4% 27.3% 0.56 6/30/12 250.3 2.76(1.22) 25% Business 272.0 230.0 44.19 1.43 AOCI 9.5% shareholders(82.2)(212.0)(22.7) 27.6% 256.7 331.3 230.0 each 1.24 44.39 306.8 10,383.8 N/A 0.56 28.6% year 209.1 230.0 42.70 N/A 285.4 and 230.0 26.2% 9,938.3 270.6 260.8 N/A 39.82 20.3 a 228.9 weighted 9.9% 198.8 230.0 28.6% 217.7(16.6) 42.70 10,164.2 306.4 240.2 N/A 528.7 average 191.7 230.0 10,209.0 366.5 438.6 202.1 592.2 pre-tax 634.4(294.2) 9,820.3 455.6 interest 10,383.8 129.2 rate of 9,820.3 approximately 5.5% on financial leverage
ING Return Six Year Retirement Benefits (in Beginning Ending Average Adjusted after Operating Ongoing (1) reallocations (2) statutory equity and (3) approximately Page excess millions The Total Assumes Months liabilities U.S. income Ended 7 of 1/1/13 Blocks Capital capital, Business Company operating of a 70 Return Solutions Annuities GAAP Ended USD, target December taxes debt-to-capital of for 5.5% beginning 3,876 4,284 capital, (2) plus unfunded on unless statutory (1) 4,333 Operating 174.4 308.1 basis June earnings average 3,849 4,308 on Capital Investment 1,788 1,949 Management 3,822 31, financial primarily 30, (excluding allocation 2,471 63.0 129.7 otherwise 1,799 2,210 2012 pension capital 296 303 2013 ratio 1,810 before 9.1% 7.2% Return 46.3 275 86.0 2,874 2,858 300 289 leverage. Insurance of due 7.0% 5.9% 303 64.0 different and is of indicated) Individual 2,545 interest AOCI), plans, approximately 115.7 on 2,817 2,702 allocated to the 356 429 2,760 certain Equity 30.2 30.9% 29.8% recapitalization differences 413 are 71.0 9,190 9,823 359 421 and Solutions based than 377.9 14.0 362 allocated 10,037 Life corporate (3) to 710.5 39.6 4.5% 4.3% 9,124 9,930 the 3,983 3,262 9,057 each 9.9% 8.3% 25% Employee 12/31/12 16.8% 16.9% between each 3,452 Ongoing 4,525 3,357 of 894 888 to 5,066(150) activity assets our 391.9 the segment s each 14,067 13,973 311 372 599 8.3% N/M 7.2% 6.6% 750.1 segments Business Corporate statutory ending Closed and year 13,800 14,021 13,886 (completed liabilities, 13,973 and portion Block Variable in capital segment. 5.6% 5.4% proportion weighted and Corporate of such and these Annuity anticipated). segment total as average differences. certain each and ING Other Consolidated level segment s pre-tax U.S., deferred Closed due Statutory Inc. interest to tax shareholders target certain assets surplus rate of
ING Six Year Retirement (in Operating Less: Interest DAC/VOBA Impact Income Adjusted after (1) and during (2) Page millions Includes Based Months investment U.S. income Ended 8 2012. of expense tax Operating operating 70 investment on earnings Solutions Annuities expense Ended USD, December the taxes and income net assumed (127.8)(127.8) other unless 174.4 308.1 June earnings before loss Earnings (2) Investment portfolio Management 31, intangibles associated 93.9 165.9 30, included 63.0 129.7 otherwise effective -(85.1)(85.1) income 2012 2013 before 33.9 Before 46.3 69.9 restructuring 86.0 Insurance 24.9 with taxes 64.0 unlocking 46.3 indicated) Individual interest operating 115.7 Interest, rate 34.4 assets 30.2 62.3 269.9 448.6 71.0 of 268.3 474.0 and Solutions 16.3 (1)(31.2)(11.2) 377.9 14.0 38.3 35%. 1.6 5.8(86.2) 3.4 After disposed earnings Life 113.8 102.2 710.5 39.6 203.4 7.6 16.9 96.9 199.6 382.7 21.4 Employee Income 71.2 134.5 Ongoing -(7.6) 10.9 71.2 from of 132.3 90.8 during 391.9 196.2 Taxes 98.4 2.2 750.1 211.0 the -(77.0) Benefits 178.0 46.5 Business 404.1 14.8 sale 46.5 the 109.4 592.2 (77.0) 109.3 0.1(25.3) portfolio of 581.3 21.6 10.9 Variable 990.9 certain Closed -(63.5) 1,093.2 61.0 -(72.6) restructuring -(5.8)(31.1) alternative Block Annuity 528.7 602.9 918.3 Corporate Closed 1,154.2 investments effected Blocks and Other Consolidated
ING Consolidated Balances (in Cash Reinsurance accrued Deferred Goodwill Assets Future Funds Payables Short-term Long-term Other Liabilities Shareholders Common Additional Retained Accumulated Noncontrolling Total (1) (2) employment Page millions Includes U.S. 9 and investments Assets ING Shareholders Liabilities assets liabilities held related policy of earnings under cash stock 70 and related U.S. investments debt paid-in USD) of Other (1) recoverable 217,123.5 provisions, Balance other benefits Equity to separate equivalents 2.6 securities interest Inc. 3,265.7 (2) 1,548.3 138.6 acquisition 202,476.4 and reinsurance to 89,504.8 (deficit)(13,211.5)(12,973.9)(12,755.7)(12,691.0)(13,068.3) 6/30/13 assets liabilities, capital 2.3 comprehensive 3,796.5 income intangible Equity separate consolidated Shareholders Sheets and 321.2 2.3 accounts 220,850.0 under 2,175.5 3,440.8 1,363.7 Current 7,053.0 and loan 23,592.7 contract 1,549.8 3/31/13 2.3 205,251.1 14,647.1 92,213.8 costs, 4,743.3 1,322.2 1,064.6 Derivatives, accounts Sales securities assets 2.3 agreements, 2,207.8 3,171.1 1,575.2 102,228.9 income 7,151.0 investment Value 216,394.2 Equity Excluding 2,787.7 12/31/12 owner inducements 22,909.9 5,506.0 1,764.3 774.9 15,598.9 95,487.6 200,333.0 102,228.9 2,186.3 loan 3,642.7 1,582.6 of taxes, 7,379.3 entities 1,281.6 Pension 12,471.6 account 217,123.5 1,786.8 889.6 341.8 2,087.8 103,098.3 including business 5,572.0 1,527.5 9/30/12 214,210.6 22,917.6 agreement entities 16,061.2 95,194.7 and 2,041.0 198,259.1 3,543.6 to 1,704.0 103,098.3 348.5 7,565.9 8,523.0 1,170.8 balances and 2,078.7 contract 3,452.8 Deferred 13,391.1 5,413.3 1,312.8 acquired 6/30/12 220,850.0 5,732.6 collateral 97,667.4 22,897.7 AOCI other 211,164.7 15,951.5 358.9 95,316.1 and 2,241.1 7,602.7 8,109.8 1,236.6 196,081.8 1,815.3 3,710.7 85,561.9 holders 97,667.4 1,426.0 post- 13,874.9 income 5,252.8 10,383.8 5,060.5 360.4 held 96,312.2 22,886.3 216,394.2 15,082.9 6,965.6 1,265.3 3,701.5 470.6 taxes 85,875.1 96,312.2 4,121.8 4,019.6 13,910.5 9,938.3 92,965.6 6,181.0 214,210.6 1,348.8 1,256.8 3,021.5 3,097.4 3,656.3 86,055.7 92,965.6 10,164.2 12,841.8 6,036.4 1,509.8 211,164.7 2,753.7 3,623.8 86,294.8 10,209.0 1,299.8 3,938.2 87,522.5 9,820.3 1,736.7
ING Consolidated Three (in Revenues Fee Premiums Other Benefits Net Interest Operating Total Income Page millions investment income realized amortization U.S. 10 revenues benefits Months credited expense(43.8)(44.4)(44.7)(46.6)(38.1)(88.2)(62.4) (loss) of and expenses(770.2)(759.1)(824.1)(858.9)(712.6)(1,529.3)(1,472.0) 474.8 70 USD) 909.7 gains Statements related before and Ended 2,140.6 106.1 income and 471.9 of 891.9 expenses(2,215.8)(2,032.9)(2,311.9)(2,190.4)(2,508.8)(4,248.7)(4,507.0) (losses)(565.9)(874.8)(384.2)(132.4) 6/30/13 DAC/VOBA(124.5)(130.5)(182.4)(150.0)(216.2)(255.0)(389.9) related other income Year-to-Date 95.6 471.2 1,818.6 1,112.2 consolidated 890.6 of benefits 3/31/13 91.8 Operations taxes(75.2)(214.3)(108.1) 453.5 consolidated 872.9 2,203.8 1,198.7 97.212/31/12 to 474.8 100.5 862.9 investment contract 2,564.3 1,055.4 946.7 201.7 1,801.6 investment 9/30/12 owners/policyholders(1,229.9)(1,061.4)(1,225.3)(1,106.5)(1,511.6)(2,291.3)(2,529.8) 3,361.9 1,226.2 936.4 entities 189.5 1,751.9 6/30/12 entities(47.4)(37.5)(35.4)(28.4)(30.3)(84.9)(52.9) 373.9 3,959.2 485.7(1,440.7)(764.2) 1,138.9 103.7 6/30/13 853.1(289.5) 35.3 4,847.2 2,310.9 79.0 6/30/12 2,416.3 46.9 340.2 299.1 139.0 317.3
ING Ongoing Three (in Sources taxes: Investment Fee Net Administrative Trail excluding DAC/VOBA Operating Page millions based underwriting U.S. commissions(66.0)(66.1)(63.3)(61.2)(59.5)(132.1)(124.5) 11 Months of Business unlocking(144.0)(142.7)(151.6)(150.0)(148.7)(286.7)(273.6) margin earnings operating 70 spread USD) and Ended expenses(416.1)(400.3)(422.0)(410.7)(414.7)(816.4)(836.5) gain other 364.2 6/30/13 and Sources before earnings Year-to-Date (loss) other intangibles 343.6 income 3/31/13 of investment and Operating before 350.0 other taxes 12/31/12 amortization, 336.0 income revenue income 306.8 Earnings 320.8 9/30/12 285.4 204.1 361.0 707.8 7.3(48.7) 6/30/12 228.9 179.9 363.7 651.5 306.4 6.4(13.8) 222.1 342.4 6/30/13 191.7 214.1 371.8 10.9(34.7) 6/30/12 592.2 178.6 329.0455.6 384.0 724.7358.6 714.8
ING Consolidated Three (in Fee Premiums Interest Operating Adjustments: Closed Net Total Income * Immediate obligations (severance, CitiStreet Group Page Other millions income amortization investment guaranteed U.S. 12 operating non-operating(347.2)(471.0)(317.2) revenue Months Block credited expense(43.5)(43.7)(43.0)(45.3)(37.1)(87.2)(61.4) (loss) adjustments of and revenues benefits expenses(532.5)(517.4)(533.0)(521.2)(492.1)(1,049.9)(1,040.8) earnings 473.3 70 recognition and lease USD) 628.3 Earnings Variable related attributable before certain Ended 33.9 income gains revenues benefits any and 470.5 write-offs, 608.0 6/30/13 to and before 26.4 DAC/VOBA(122.7)(120.9)(184.2)(94.1)(156.4)(243.6)(285.1) impact to other income Year-to-Date (losses) third-party 472.0 Before operating hedging Annuity(338.4)(477.1)(167.3) businesses and 613.7 31.3 2,097.5 actuarial income benefits 3/31/13 of net etc.), expenses(1,825.5)(1,833.8)(1,886.5)(1,806.1)(1,880.2)(3,659.3)(3,795.5) noncontrolling taxes(75.2)(214.3)(108.1) 454.1 27.7 and plan Income 589.3 earnings*(21.9)(8.4)(92.0)(136.4)(22.2)(30.3)(36.7) realized gains 2,090.5 related integration 33.5 12/31/12 gains amendments, to exited 475.6 599.4 contract (losses) Taxes 60.3 gains 272.0 (losses) charges 2,095.6 943.8 through 103.3 above related 1,236.3 interests(3.1)(13.5)(84.2) 9/30/12 58.8 (losses) and owners/policyholders(1,126.8)(1,151.8)(1,126.3)(1,145.5)(1,194.6)(2,278.6)(2,408.2) 256.7 938.0 654.3(818.2)(98.4) includes: and related 2,076.7 to reinsurance 1,200.6 6/30/12 209.1 other 0.8 adjustments 962.0 related 373.9 anticipated to 381.9(815.5)(525.8) charges 2,079.0 items, 270.6 pension 985.6 6/30/13 853.1(289.5) or to the 198.8 divestment(17.0)(16.9)(11.7)(9.9)(11.6)(33.9)(24.2) including 4,188.0 and 0.8 978.6 and Company s 6/30/12 20.3 adjustments 41.8 528.7 other 1,005.6 4,234.1 217.7(16.6) 54.7 340.2 restructuring post-employment 438.6 of 207.9 acquisition 970.5 the 32.4 Company 132.6 202.1 1,947.6 3.1(16.7) of 42.6 2,036.7 benefit by 20.6(44.1) 192.9 ING 35.5 93.3
ING (in Three Retirement Fee Premiums Other Net Interest Total Operating Page millions investment income amortization U.S. 13 operating revenue Months credited expense(0.4)(0.2) of Earnings expenses(210.0)(32.2)(107.5)(94.6)(60.5)(504.8)(17.6)(10.1)(532.5) revenues benefits expenses(207.6)(31.1)(99.0)(95.4)(57.6)(490.7)(19.2) earnings 3.8 3.0 70 Solutions Annuities USD) 189.0 173.6 6.7 192.1 11.7 186.7 Ended 15.3 15.1 income revenues benefits and of 11.2 8.2 Three and before 2.6 -(0.2) by DAC/VOBA(42.7)(28.4) DAC/VOBA(49.4)(50.9) other June Investment Management 114.1 Segment 132.3 10.2 2.8 and Months 596.9 538.9 -(0.2)(43.3) -(2.0) 269.0 income benefits 30, 10.5 272.3 net 288.0 7.3(1.0) expenses(464.8)(244.5)(107.5)(654.8)(277.6)(1,749.2)(60.7)(15.6)(1,825.5) expenses(467.8)(301.8)(99.0)(675.8)(284.7)(1,829.1)(52.0) 280.0 2012 realized 304.0 328.7 0.4 471.6 1.7 -(2.6)(33.9)(0.6)(37.1) Ended Insurance 473.7 1.9 15.5 taxes to Individual 15.8 33.4 34.4(0.4)(0.1) contract 148.6 130.2 -(43.5) 599.4 gains June 132.1 71.1 628.3 0.8(0.7) Solutions 694.8 709.2 473.3 26.9 30, 475.6 -(47.6)(3.9)(122.6) -(47.4)(3.9)(151.6)(4.6)(0.2)(156.4) (losses) owners/policyholders(212.1)(183.9) owners/policyholders(210.4)(219.6) Life 59.5 599.4 2013 33.5 628.3 31.2 311.7 313.8 Employee 41.1 Ongoing 388.8 347.2 33.4 2,056.0 40.0 2,020.8 29.1 283.5 304.2 34.1 Benefits Business 7.9 19.3 17.8(492.1) 191.7(32.7) -(0.1)(122.7) 306.8(52.8) 6.1 13.3 33.6 38.9 215.4 224.0 Corporate 2,097.5 2,079.0 27.9 39.8 25.6 18.0 921.7 198.8 914.3 -(512.4)(213.2)(1,121.6) -(531.0)(223.2)(1,184.2) Closed 272.0 8.3 0.9(1,880.2) 18.5 Blocks 32.0 37.7 962.0 Consolidated 970.5 0.2(5.4)(1,126.8) 5.7(16.1)(1,194.6)
ING (in Six Retirement Fee Premiums Other Net Interest Total Operating Page millions Months investment income amortization U.S. 14 operating revenue credited expense(0.8)(0.3) of Earnings expenses(414.0)(63.2)(209.3)(185.5)(120.5)(992.5)(43.6)(13.8)(1,049.9) revenues benefits expenses(421.5)(62.3)(196.6)(192.4)(118.8)(991.6)(63.0) earnings 4.3 3.5 70 Solutions Annuities Ended USD) 372.8 350.7 14.5 377.9 23.5 366.1 25.3 29.8 income revenues benefits and of 21.1 15.6 Six and June before 5.4 7.6 -(1.1) by DAC/VOBA(79.5)(66.3) DAC/VOBA(83.2)(92.5) other Investment Management Months Segment 254.0 232.0 17.6 10.1 30, and 1,180.1 1,119.3 -(1.1)(86.1) -(6.6) income benefits 543.9 540.7 net 2012 14.9(2.0) 12.8(1.8) expenses(910.2)(497.8)(209.3)(1,291.1)(583.3)(3,491.7)(127.9)(39.7)(3,659.3) expenses(924.3)(616.6)(196.6)(1,332.8)(582.4)(3,652.7)(114.6)(28.2)(3,795.5) 556.8 571.3 Ended realized -(7.7)(52.5)(1.2)(61.4) Insurance 611.6 679.9 940.6 3.2 933.8 4.2 taxes to Individual 31.6 30.9 contract June 61.2(0.8)(0.1) 58.5 -(87.2) 280.5 260.8 gains 269.9 195.0 1,236.3 1,200.5 0.1 30, 1.1(0.8) Solutions 943.8 938.0 -(90.5)(7.0)(243.3)(0.1)(0.2)(243.6) -(98.0)(6.4)(280.1)(4.7)(0.3)(285.1) 1,381.9 1,421.2 (losses) owners/policyholders(416.7)(368.3) owners/policyholders(418.8)(461.5) Life 113.8 63.3 2013 Employee 64.2 58.8 1,236.3 71.2 60.3 Ongoing 629.8 627.1 777.7 735.3 1,200.6 88.4 90.8 4,083.9 4,108.2 570.6 633.2 44.7 Benefits 46.5 Business 455.6(81.1) 8.9 18.7 592.2(102.9) 25.0 33.5 13.8(1,040.8) 432.3 471.0 Corporate 79.1 92.356.3 57.3 4,188.0 4,234.1 64.1 39.4 1,845.8 1,915.5 -(1,014.0)(455.8)(2,254.8) -(1,035.8)(457.2)(2,373.3) Closed 438.6 528.7 25.8 Blocks 32.476.0 88.8 Consolidated 1,947.6 2,036.7 5.6(40.5)(2,408.2) 1.9(25.7)(2,278.6)
ING (in 6/30/13 Operating Retirement Annuities Investment Individual Employee Ongoing Corporate(52.8)(50.1)(43.6)(57.6)(32.7)(102.9)(81.1) Closed Total Less: Net * Income controlling employment expenses and Page Other millions investment guaranteed income certain U.S. 15 Income Retirement Insurance Closed operating adjustments(347.2)(471.0)(317.2) non-operating*(42.0)(38.8)(187.9)(126.0) Block (loss) 3/31/13 of Business (severance, 304.0 59.5 Revenues Earnings Benefits Life 70 interests; third-party Management 596.9 132.1 USD) (loss)(85.3)(225.5)(106.9) benefit Blocks tax Variable before related 17.1 54.3 694.8 40.0 gains revenues earnings Solutions 12/31/12 307.6 expense 583.2 137.8 attributable available Three 2,056.0 306.8 19.2 311.7 34.1 6.3 50.8 obligations and 33.6 18.0 immediate income lease (losses) to 687.1 317.4 above expenses hedging Annuity(338.4)(477.1)(167.3) 32.6 570.5 108.2 businesses 13.2 12.4 before Months 285.4 Operating 148.6 41.1 2,097.5 54.6 318.1 9/30/12 45.5 21.4 1,006.5 74.1 (benefit) 2,027.9 write-offs, 900.9 191.6 to 694.2 309.7 26.9 taxes(75.2)(214.3)(108.1) 19.3 includes: 28.6 and to 30.1 582.1 145.4 ING 53.2 38.2 23.8 63.2 228.9 131.9 gains income 313.6 and recognition related noncontrolling Ended 2,090.5 890.8 192.1 113.8 6/30/12 25.0 678.5 1,005.2 36.1 2,038.2 328.7 31.2 exited 10.1 33.4 U.S. Earnings 40.5 21.8 83.2 any 538.9 71.1 306.4 (losses) 142.5 etc.), 310.5 386.8 33.5 29.1 887.9 114.5 63.3 103.3 39.1 Year-to-Date 11.2(1.2)(12.9) 709.2 90.8 Inc. s impact 38.9 39.8 89.3 611.6 charges 269.9 2,095.6 through 6/30/13 1,007.8 the 1,180.1 2,023.0 191.7 integration 142.2 of 313.8 46.5 852.1(310.8) by 31.2 88.4 272.0 79.1 39.4 and anticipated 62.5 891.8 178.0 654.3(818.2)(98.4) 1,381.9 common actuarial 679.9 195.0 of interest(3.1)(13.5)(84.2) Segment 183.9(80.8) 44.7 2,076.7 and 592.2 130.2 71.2 related reinsurance 989.0 6/30/12 629.8 plan 92.3 64.1 1,119.3 137.3 2,020.8 256.7 867.6 98.0 adjustments 1,421.2 expenses 64.2 373.9 amendments; shareholders(82.2)(212.0)(22.7) gains 1.0 455.6 280.5 1,023.0 627.1 133.1 383.7 381.9(815.5)(525.8) divestment charges 2,079.0 209.1 331.3 1,791.7 4,083.9 21.3 141.2 853.1(289.5) (losses) or 260.8 258.3 270.6 related 2,011.7 8.9 divestment; 4,188.0 and 0.8 1,799.2 4,108.3 of and adjustments 41.8 related 198.8 the to 20.3 2,048.3 other 4,234.1 54.7 340.2 528.7 income to 217.7(16.6) Company s items, 207.9 pension 32.4 438.6 (loss) by including 132.6 3.1(16.7) and 366.5 ING 202.1 acquisition attributable 42.6 other Group 634.4(294.2) restructuring 20.6(44.1) 192.9 post- of to CitiStreet non- 129.2 35.5 93.3
ING (in 6/30/13 Operating Corporate(52.8)(50.1)(43.6)(57.6)(32.7)(102.9)(81.1) Adjustments Retirement(1.4) Corporate(43.2)(41.9)(39.2)(39.8)(32.1)(85.1)(48.8) Adjusted Annuities Investment Individual Employee Ongoing Corporate(9.6)(8.2)(4.4)(17.8)(0.6)(17.8)(32.3) Total Page millions U.S. 16 operating adjustments Insurance Closed adjusted 3/31/13 of Business Operating 59.5 9.9 49.6 Earnings Benefits Life(4.9)(2.7) 70 Management 132.1 133.5 USD) to Blocks 7.0(44.4)(13.2)(27.1) operating 54.3 47.3 40.0 44.9 earnings Solutions(4.9)(2.7) 3.0(8.9) 12/31/12 137.8 134.8 to Three 306.8 303.2 0.6(3.8) 34.1 Earnings 6.3 50.7 50.8 53.5 operating 18.0 7.3(48.7) 32.6 (10.1) 108.2 117.1 12.4 earnings 14.9(55.1) before Months 285.4 278.1 45.8 41.1 54.6 50.0 9/30/12 21.4 74.1 79.0 191.6 8.5 183.1 8.6(3.3)(7.6) 26.9 28.6 by 54.0 30.1 145.4 130.5 53.2 44.6 23.8 earnings(39.6)(34.6)(87.9)(28.9)(129.3)(74.2)(119.2) 63.2 65.9 228.9 277.6 10.0(53.3) 2.2 2.2 income 10.9(87.1) Segment -(0.5) -(5.8) Ended 192.1 182.1 before 113.8 6/30/12 36.1 35.5 96.9 31.2 33.4 36.7 16.9(39.8) 21.8 1.6(31.5) 83.2 78.6 71.1 126.2 306.4 295.5 9.2(7.1)(7.6) 29.1 32.9 taxes 114.5 167.8 63.3 103.1 39.1 Year-to-Date 90.8 98.4 interest 49.9 89.3 80.1 269.9 5.0 1.7(82.2) 6/30/13 268.3 10.9(64.6) 191.7 278.8 46.5 31.2 29.0 88.4 83.4 272.0 39.4 62.5 69.6 178.0 176.3 195.0 and 226.5 44.7 45.2 592.2 581.3 71.2 6/30/12 64.1 69.9 137.3 144.9 256.7 18.5(71.3) 98.0 180.2 4.5 income 64.2 62.0 455.6 520.2 133.1 128.6 383.7 209.1 365.2 taxes 258.3 270.6 329.6 311.6 198.8 291.3 528.7 297.0 438.6 299.5 328.1 602.9 557.8
ING DAC/VOBA Three (in Retirement Operating(41.3)(39.8)(35.7)(43.1)(44.3)(81.1)(81.9) Operating(1.4) Annuities Operating(38.5)(44.8)(43.9)(31.7)(42.2)(83.3)(63.6) Non-Operating(21.8)(9.7) Individual Operating(48.4)(44.9)(57.2)(60.2)(47.4)(93.3)(95.0) Non-Operating(2.2)(3.5)(0.6)(65.0)(11.4)(5.7)(13.6) Non-Operating(0.8)(0.6)(0.3) Other Operating(6.8)(3.3)(3.4)(5.8)(8.7)(10.1)(12.7) Closed Non-Operating(15.5)(14.8)(14.8)(15.4)(14.7)(30.3)(29.9) Non-Operating(1.8)(0.2) Total Deferrals Amortization: Operating(135.0)(132.8)(140.2)(140.8)(142.6)(267.8)(253.2) Non-Operating(21.7)(30.5)(18.5)(119.1)(79.8)(52.2)(141.8) Unlocking: Change Balance Page (1) millions U.S. 17 US (1) Months Block of as of 0.9 9.4 unrealized Life 70 of USD) commissions Employee Segment beginning-of-period End-of-Period Variable 7.0(44.4)(12.9)(8.6) 13.0(43.5) Ended 3.0(8.9) 17.8(2.5)(7.6)(7.3)(33.3) 15.4 8.0 20.8 6/30/13 6.5 16.1 Year-to-Date 43.5(0.3) capital Trends Annuity Benefits, 15.9(5.1) 46.5(14.0) 19.0 20.7 and 4.5(31.4)(20.4)(31.5)(28.1) 3/31/13 6.71,278.3 518.6 2,638.2 105.7 519.7 5,060.5 2.9(1.6)(2.0)(1.4) gains/losses(0.1) expenses 24.2 64.1 4.3 3.9(3.3) Asset 1.6(1.2) 14.5 843.1 16.9(28.9) 1.9(1.4) 12/31/12 292.4 104.1 532.8 16.1 20.7 22.4(33.4) 843.1 2,247.2 4,019.6 Management, 25.8 20.8 50.1 6.1 4.3 107.1 31.5 42.6 712.4 15.3(70.2) 260.7 102.6 453.0 418.9 247.8 391.4 2.3(0.7) 1,060.3 712.4 3.9 9/30/12 28.3 17.4 52.8 2,127.6 3,656.3 36.7 90.9(28.7) 107.9 667.6 4.0 295.8 100.6 492.3 125.6 55.3 112.8 667.6 383.9 34.6 22.2 69.6 -(1.2)(1.3) 5.2 3.3 135.8 24.7(77.5)(38.6) 6/30/12 2,067.4 3,623.8 Other 849.5 418.5 102.4 479.8 43.4(204.4)(63.7) 38.8(50.6)(193.9) 32.8 24.1 81.4 6.0 4.2 849.5 78.2(311.9)(381.3) 21.7(83.8) 146.8 11.6 Closed 949.6 496.9 106.4 575.8 30.1 27.0 98.5 518.6 105.7 519.7 6/30/13 1.6(0.4) 2,088.1 3,938.2 1,278.3 8.5 11.1 165.8 54.1 38.2 102.9 712.4 260.7 102.6 453.0 418.5 102.3 479.8 2,240.7 4,369.5 Blocks 90.8(83.8) 6/30/12 2,638.2 5,060.5 303.1(121.1) 60.6 50.7 849.5 215.0 194.0 987.2 606.6 104.3 586.4 544.5(81.7) 504.2(62.1) 2,127.6 3,656.3 1,444.2(349.1) 324.9 2,088.1 3,938.2,067.8 4,352.3
ING Consolidated Balances (in Financial Commercial Senior Loans Bank Other Equity Accumulated Capital Total Debt Page millions U.S. 18 to Debt common ING Equity Capitalization revolver term debt from bonds of as Debt U.S. loan 425.0 4.9 70 3,683.3 ING consolidated USD) of paper 4.0 3,249.4 other 4.9 equity 22.8% (Excluding Inc. Verzekeringen 6/30/13 4.9 3,707.3 comprehensive Shareholders 16,154.9 (Excluding 500.0 Structure 2,499.0 10,383.8 21.7% 1,350.0 192.0 subs 3/31/13 3,808.3 AOCI) 17,098.4 1,500.3 21.5% 279.0 299.2 9,938.3 AOCI) 1,425.0 10,383.8 N.V. Equity 12/31/12 26.2% income 3,893.2 274.4 21.9% 589.6 1,500.1 150.0 17,683.2 10,164.2 14,067.1 1,500.0 9,938.3 12,471.6 27.2% 261.1 (AOCI) 3,933.8 23.4% 9/30/12 650.3 17,803.7 10,209.0 13,645.6 164.0 27.3% 10,164.2 500.0 13,391.1 2,087.8 6/30/12 189.0 27.6% 500.0 16,775.6 9,820.3 13,972.5 10,209.0 3,452.8 13,874.9 500.0 28.6% 14,102.2 3,710.7 9,820.3 13,910.5 3,701.5 13,754.1 12,841.8 3,021.5
ING Consolidated (in Institutional/ Balances Investment Employee Insurance Eliminations(70,852.1)(37,674.8)(8,624.0)(117,150.9)(55,294.2)(172,445.1) Closed Total (1) (2) (3) Page millions Retirement Annuities Individual U.S. 19 Ongoing AUM Block of as Solutions (2) Benefits Life Management (1) USD) and of AUM Assets Assets 22,647.3 Variable Institutional Other Life June Business 27,700.9 (3) AUA 13,190.7 1,747.3 30, includes 14,938.0 543.8 Under 50,348.2 80,275.3 770.0 Annuity 2013 52,609.7 74,709.4 includes Spread 14.8 1,762.1 1,762.1 Management/Assets 2,487.0 15,677.7 15,677.7 Under Payout 2,816.2 General wrapped 2,501.8 17,439.8 17,439.8 543.8 543.8 53,379.7 102,228.9 1,336.7 16,166.5 60,206.3 Products assets 41,999.6 AUA Assets annuities 26,233.5 26,233.5 Account funds 42,022.6 43,359.3 43,359.3 18,982.7 backing 78,407.6 96,477.1 3,685.4 68,048.9 as Separate well interest 122,710.6 Under 260,911.8 as 220,739.5 213,323.3 190,323.8 3,685.4 3,685.4 unwrapped Administration Account and non-interest 220,739.5 317,216.6 55,294.2 Mutual IIM-managed 343,450.1 481,651.3 Funds 245,618.0 434,062.8 sensitive Management funds products Administration Total AUM + AUA
ING Page U.S. 20 of Retirement 70
ING Retirement Three (in Sources Administrative Trail unlocking(42.0)(41.6)(37.6)(45.2)(48.1)(83.6)(88.3) DAC/VOBA Gross Fixed Limited Prepayment Total Credited Net Other Investment Fee Recordkeeping Revenue Expenses(53.7)(53.1)(56.0)(56.7)(57.5)(106.8)(115.2) Operating * Page Includes millions underwriting margin based U.S. commissions(31.9)(29.9)(31.1)(27.9)(28.0)(61.8)(57.1) 21 gross investment income Months partnership of interest(203.6)(199.9)(204.7)(201.1)(197.4)(403.5)(394.4) 60.3 margin excluding margin Recordkeeping earnings Recordkeeping investment operating 70 expenses(14.7)(14.2)(14.7)(13.2)(13.2)(28.9)(27.0) spread Sources 156.2 USD) fee and 364.7 59.8 Ended expenses(174.6)(170.0)(170.8)(167.3)(177.8)(344.6)(357.4) gain income* other 154.7 205.5 6/30/13 and 62.2 before of 356.3 Year-to-Date income (loss) Operating other intangibles 63.1 150.5 199.0 income 370.7 3/31/13 23.3 10.2 investment and 59.9 before on Recordkeeping 151.7 198.0 374.5 28.6 2.3(2.0)(0.3) 1.1 360.3 other Earnings assets 120.1 taxes 12/31/12 amortization, unlocking(1.4) 167.3 196.3 18.5 6.6 income 368.8 revenue(3.0)(6.0)(10.5)(1.5)(5.7)(9.0)(12.0) 365.1 backing income 132.1 5.7 119.8 59.8 6.7 23.3(21.6) 310.9 190.0 369.8 18.1 9/30/12 6.2 taxes: 7.1 721.0 62.2 145.3 137.8 179.5 6.4 surplus excluding 10.6 4.2 308.0 404.5 366.0 3.0(8.9) 63.1 713.1 2.4 139.2 5.7 6/30/12 108.2 51.9 183.3 381.7 59.9 13.3 377.9 that 21.3 135.6 145.4 15.9(5.0) 120.1 has 169.1 6/30/13 743.3 been 133.2 71.1 119.8 175.1 729.4 1.6(1.2) 6/30/12 allocated 269.9 130.1 145.7 195.0 284.5 362.8 from 261.9 the 329.3 corporate segment and income from policy loans
ING Retirement Three (in Fee Premiums Other Net Interest Total Operating Page millions investment income amortization U.S. 22 operating revenue Months credited of revenues benefits expenses(210.0)(204.0)(204.6)(198.8)(207.6)(414.0)(421.5) earnings 3.8 70 Operating USD) 189.0 0.5 Ended 15.3 income revenues benefits (0.1)(0.3)(0.4) and of 0.9 183.8 6/30/13 and before DAC/VOBA(42.7)(36.8)(44.7)(27.1)(49.4)(79.5)(83.2) other Year-to-Date 0.5 Earnings and 182.7 596.9 3.0 income benefits 3/31/13 net 15.5 expenses(464.8)(445.4)(462.3)(436.7)(467.8)(910.2)(924.3) 4.3 181.6 realized 583.2 3.5 15.1 -(0.8) taxes 12/31/12 to 173.6 contract 570.5 25.3 gains 132.1 372.8 29.8 582.1 9/30/12 (losses) owners/policyholders(212.1)(204.6)(212.9)(210.5)(210.4)(416.7)(418.8) 137.8 350.7 538.9 6/30/12 108.2 388.8 1,180.1 145.4 388.9 6/30/13 1,119.3 71.1 380.1 6/30/12 269.9 384.5 195.0 347.2 777.7 735.3
ING Retirement Balances (in Corporate Tax Individual Assets General Guaranteed Non-guaranteed Mutual Recordkeeping/Stable Total Page millions exempt U.S. 23 full AUM/AUA value under Funds/Institutional account of as service market 70 AUM/AUA separate USD) 96,477.1 and of 8,406.9 management AUA separate 27,700.9 plans 35,916.3 2,702.4 317,216.6 6/30/13 49,451.5 account 8,279.7 95,602.3 317,216.6 Value 85,367.8 account 27,387.8 2,612.0 by 3/31/13 Funds 35,441.2 318,636.9 7,792.1 AUA 8,027.0 49,269.4 product fund 90,471.2 84,710.6 318,636.9 44,582.7 16,166.5 2,427.1 group 12/31/12 220,739.5 27,222.6 33,265.9 6,473.1 8,287.8 group 46,986.1 304,146.7 87,668.5 80,252.0 2,359.4 44,229.0 15,697.7 304,146.7 9/30/12 26,634.6 6,137.5 8,273.9 223,034.6 32,609.4 46,226.6 84,214.4 303,182.1 2,227.1 78,836.0 41,151.5 13,823.2 6/30/12 7,315.8 26,109.1 303,182.1 31,143.9 213,675.5 44,705.9 294,095.8 75,849.8 7,030.7 40,589.4 13,128.7 294,095.8 215,513.6 38,683.8 12,390.8 209,881.4
ING Retirement Three (in Full Stable Individual Total Transfer/Single Recurring Deposits Surrenders, Net Interest Assets (1) (2) Page millions Where Excludes Flows(100.3) service Corporate service Tax U.S. 24 AUM Months value under credited of 1,448.0 1,161.6 403.2 15.1 3,028.0 deposits ING market 257.6 190.8 93.4 441.6 70 AUM benefits, USD) (2) (1) Recordkeeping management, 14.6 Ended 590.0 U.S. 107.2 deposits and 378.9 481.1 1,419.4 1,711.4 1,414.9 3,730.9 Rollforward 452.2 6/30/13 exempt 72.5 918.4 805.6 195.3 0.5 1,919.9 is investment and Year-to-Date 1,381.9 47.5 0.4 the 201.6 1,284.8 126.6 247.7 529.6 356.0 207.9 14.6 1,108.1 1,781.4 product 1,520.7 1,151.0 4,126.0 1,021.7 772.9 71.3 market 0.1 3/31/13 Investment 75.3(4.2) beginning end 1,866.3 and 108.0 309.6 14.2 95.8 61.8 0.1 84.1 689.7 642.0 518.7 240.5 of 740.5 performance(63.6) performance(3.0) 1,864.6 Stable 507.9 1,370.2 1,074.8 2,881.2 charges(1,190.4)(1,332.5)(1,319.1)(1,262.2)(1,079.1)(2,522.9)(2,418.5) charges(1,261.9)(962.7)(903.3)(990.7)(1,006.7)(2,224.6)(1,876.4) charges(212.4)(108.9)(97.1)(69.1)(210.1)(321.3)(460.1) charges(2,586.4)(2,311.5)(2,344.6)(2,373.3)(2,395.8)(4,897.9)(4,918.3) 781.0 period 0.3 72.4 12/31/12 29.7 1,583.4 41.0 42.0 280.4 448.6 200.6 739.7 410.5 1,320.1 238.5 of 0.9 686.5 Manager 556.8 126.5 840.9 Value 230.8 94.4 351.9 period 2,542.6 35,916.3 49,451.5 8,406.9 2,702.4 96,477.1 1,359.5 1,048.7 2,952.6 0.5 78.3 636.5 993.2 67.4 529.3 388.3 1,568.5 671.9 770.0 9/30/12 268.6 266.6 217.5 282.4 433.2 1,861.0 95.5 839.7 where 231.4 92.6(25.0)(51.3)(100.0) 431.0 906.5 1,312.7 8,279.7 2,612.0 3,159.4 2,576.5 6,758.9 519.8 278.7 446.4 77.6 1,578.5 35,441.2 49,269.4 95,602.3 28.8 354.2 255.1 6.6 1,704.4 1,796.4 1,831.1 3,711.7 1,940.1 6/30/12 ING 1,176.4 34.3 20.3 230.3 1,219.3 998.0 1,248.2 7,792.1 2,427.1 726.6 2,849.5 2,107.8 6,094.7 U.S. 1,548.4 3,786.2 33,265.9 46,986.1 90,471.2 455.0 511.9 1,021.5 95.2 57.0(25.5) 1,842.4 6/30/13 559.4 is 651.4 1,007.1 2,972.7 60.6(57.0) 6,473.1 2,359.4 not 1,357.4(817.2) 1,436.6(640.1) 3,646.4 2,946.1(1,422.2) 6/30/12 32,609.4 46,226.6 87,668.5 the 170.9(163.4) 74.6 Investment 2,448.3 6,137.5 2,227.1 130.2 68.6 31,143.9 44,705.9 84,214.4 5,838.4 2,256.7 2,013.9 2,113.5 8,406.9 2,702.4 Manager 31,680.7 45,304.0 85,079.8 4,144.9 35,916.3 49,451.5 96,477.1 7,792.1 2,427.1 1,578.5 1,783.2 6,137.5 2,227.1 3,560.3 33,265.9 46,986.1 90,471.2 5,560.9 2,091.1 31,143.9 44,705.9 84,214.4 29,134.4 42,691.3 79,477.7
ING Page U.S. 25 of Annuities 70
ING Annuities Three (in Sources Fee Administrative Trail unlocking(49.7)(53.1)(53.7)(40.9)(49.4)(102.8)(84.0) DAC/VOBA Operating Gross Fixed Limited Prepayment Total Credited Net Other Investment * Page Includes millions based underwriting margin U.S. commissions(8.6)(8.8)(8.4)(8.2)(8.0)(17.4)(16.3) 26 gross investment income Months partnership of interest(167.8)(173.7)(179.7)(184.7)(201.8)(341.5)(418.7) Sources margin earnings investment operating 70 expenses(11.2)(10.9)(11.4)(11.2)(9.6)(22.0)(21.6) spread 95.5 USD) fee and 258.3 Ended expenses(23.2)(21.9)(21.7)(23.5)(22.3)(45.1)(44.9) 90.4 gain income* other 11.3 6/30/13 and of before 267.6 earnings Operating Year-to-Date 98.2 income (loss) other 10.5 intangibles 11.1 income 278.5 83.5 3/31/13 19.9 10.1 5.1 investment and 5.8 before on 274.5 98.6 22.9 1.6 Earnings 10.1 273.4 other 9.3 assets taxes 12/31/12 amortization, 0.7 186.1 8.4 20.6 income 275.0 5.3 revenue 295.1 0.7 backing income 59.5 21.8 173.4 7.1 289.3 9/30/12 taxes: 54.3 16.9 526.0 17.0 9.9 4.2 6.7 4.4 115.4 surplus excluding 7.0(44.4)(12.9)(8.6) 279.4 6.3 13.7 42.7 7.2 592.2 6/30/12 32.6 113.4 5.6 40.0 310.0 that 2.2 26.9 has 118.8 6/30/13 3.9 549.6 113.8 been 11.6 106.6 613.7 6/30/12 allocated 16.9(28.9) 63.3 7.0 102.9 228.8 from the 213.4 corporate segment, as well as income from policy loans.
ING Annuities Three (in Fee Premiums Other Net Interest Total Operating Page millions investment income amortization U.S. 27 operating revenue Months credited of Operating revenues benefits expenses(32.2)(31.0)(30.3)(32.1)(31.1)(63.2)(62.3) earnings 6.7 70 USD) 11.2 7.8 Ended 2.6 income revenues benefits (0.1)(0.1)(0.2) and 9.9 of 6.3 2.8 6/30/13 and before DAC/VOBA(28.4)(37.9)(88.4)(44.6)(50.9)(66.3)(92.5) 10.4 Earnings other Year-to-Date 6.1 2.3 and 304.0 11.7 9.5 2.4 income benefits 3/31/13 net expenses(244.5)(253.3)(311.1)(277.1)(301.8)(497.8)(616.6) 8.2 4.6 14.5 realized 307.6 21.1 5.4 -(0.3) taxes 12/31/12 to 23.5 7.6 contract 317.4 15.6 gains 59.5309.7 9/30/12 54.3 (losses) owners/policyholders(183.9)(184.4)(192.3)(200.3)(219.6)(368.3)(461.5) 6.3 328.7 6/30/12 32.6 283.5 611.6 26.9 287.1 6/30/13 679.9 113.8 298.4 6/30/12 63.3 291.7 304.2 570.6 633.2
ING Balances (in Fixed Indexed SPIA Other Assets General Separate Mutual Total Page millions U.S. 28 AUM & annuities single multi-year Under funds Payout of 12,362.8 account as Annuities 70 USD) 26,233.5 of Management 2,816.2 438.9 2,762.9 22,647.3 3,748.6 770.0 4,104.1 12,255.3 6/30/13 AUM 26,228.0 2,675.5 444.7 780.1 2,794.8 3,853.0 4,204.7 22,772.4 3/31/13 12,209.2 428.7 751.7 2,433.6 26,101.1 2,806.6 3,949.3 4,273.7 440.8 12/31/12 22,915.8 774.5 12,167.0 2,291.7 26,251.9 2,851.1 425.1 4,133.7 4,367.6 748.4 9/30/12 23,185.7 12,122.8 2,092.2 2,847.5 4,574.0 26,496.7 4,435.1 6/30/12 23,656.1
ING Three (in Annual Fixed SPIA Mutual Other Annuities Total Deposits Surrenders, Net Interest Assets Page millions cash U.S. 29 & Indexed Months Under Fund Reset credited Payout of flow(284.1)(241.8)(359.6)(592.8)(1,239.9)(525.9)(1,798.5) flow(46.2)(43.1)(56.1)(58.5)(58.5)(89.2)(86.9) flow(70.5)(61.3)(74.0)(52.1)(24.3)(131.8)(71.8) flow(11.8)(14.3)(13.5)(9.7)(9.2)(26.1)(20.2) flow(243.7)(220.3)(396.1)(607.1)(1,217.2)(464.0)(1,728.8) 16.5 286.7 37.2 283.1 1.1 624.6 AUM benefits, USD) 1.6 Custodial Management, Annuities/Multi-Year 12.2 39.8 168.9 Ended 245.9 255.4 554.8 and Rollforward 1.2 6/30/13 17.3 38.7 1.0 140.1 investment and Year-to-Date 285.0 213.6 555.7 10.1 57.4 product 3/31/13 106.7 2.7 296.7 202.8 567.9 beginning end 16.2 85.1 of performance(28.1) 105.7 charges(300.6)(254.0)(376.9)(602.9)(1,256.1)(554.6)(1,832.7) charges(332.8)(288.9)(341.2)(355.2)(371.6)(621.8)(695.6) charges(107.7)(101.0)(112.7)(109.5)(109.4)(208.7)(218.7) charges(114.2)(115.3)(106.9)(97.1)(102.7)(229.5)(187.6) charges(13.0)(15.8)(14.7)(10.7)(11.3)(28.8)(24.2) charges(868.3)(775.1)(951.8)(1,175.0)(1,851.1)(1,643.4)(2,958.8) 28.7 77.0 313.1 217.3 633.9 12/31/12 period Guaranteed of 34.2 146.9 114.7 532.5 538.5 1,179.4 period 7,852.7 12,362.8 2,762.9 2,816.2 438.9 26,233.5 9/30/12 309.0 79.1 153.7 38.5 249.2 608.7 436.1 444.7 Annuities 1,230.0 30.3 8,057.7 2,794.8 2,675.5 76.6 49.5 12,255.3 26,228.0 101.8 248.6 89.1 347.3 6/30/12 1.4 428.7 81.2 29.6 98.4 35.1 245.2 25.4(18.1) 8,222.9 2,806.6 2,433.5 85.0 55.6 12,209.2 440.8 26,101.1 6/30/13 102.7 93.7(49.4) 362.2 97.8 21.5 8,501.3 2,851.0 2,291.7 425.1 69.5 36.3 6/30/12 12,167.0 26,251.9 121.3 155.7 88.0 242.8 438.9 452.4 73.7 27.5 9,009.1 2,847.5 2,092.2 88.3 596.4 208.5 82.3 128.8 425.1 12,122.8 26,496.7 428.7 10,151.2 2,850.3 2,026.9 7,852.7 2,762.9 2,816.2 535.3 12,111.8 27,592.6 417.8 12,362.8 26,233.5 2,806.6 2,433.5 8,222.9 9,009.1 2,847.5 2,092.2 12,209.2 26,101.1 2,831.0 1,761.3 12,122.8 26,496.7 10,599.1 12,080.9 27,690.2