Voya 2013 Annual Report Download - page 141

Operating expenses increased $15.0 million from $824.9 million to $839.9 million due to an increase in
general expenses and higher commission expense due to an increase in AUM, partially offset by lower expenses
for the recordkeeping business.
Net amortization of DAC/VOBA decreased $39.7 million from $155.0 million to $115.3 million primarily
due to changes in unlocking of DAC/VOBA. The favorable DAC unlocking in the current period was
$44.5 million higher than the prior period favorable unlocking largely due to the impact of the prospective
assumption changes.
Operating earnings before income taxes
Operating earnings before income taxes increased $147.2 million from $448.6 million to $595.8 million
primarily due to higher Fee income related to full service retirement plans, an increase in Net investment income
as a result of the loss related to the sale of certain alternative investments in the prior period along with a Net
gain from Lehman Recovery/LIHTC in the current period, and favorable changes in DAC/VOBA unlocking.
These were partially offset by a decline in Net investment income as a result of portfolio restructuring in the prior
period.
Retirement—Year Ended December 31, 2012 Compared to Year Ended December 31, 2011
Operating revenues
Net investment income and net realized gains (losses) increased $64.0 million from $1,435.9 million to
$1,499.9 million primarily due to an increase growth of general account assets. General account assets increased
from $25.5 billion to $27.2 billion in 2012 compared to 2011. The volatility in the equity market during the
second half of 2011 resulted in participants transferring funds from variable investment options into the fixed
investment option, which contributed to an increase in average general account assets. The increase was partially
offset by a $48.1 million loss on the sale of certain alternative investments. We also reduced the fair value of our
investments in LIHTC, which had an unfavorable impact of $4.6 million.
Other revenue decreased $15.8 million from $67.9 million to $52.1 million primarily due to changes in
market value adjustments related to plan sponsors upon surrender.
Operating benefits and expenses
Interest credited and other benefits to contract owners/policyholders increased $16.0 million from
$826.2 million to $842.2 million primarily due to an increase in general account liabilities, which corresponded
to the increase in general account assets as described above. The increase was partially offset by a decrease in
average credited rates on general account liabilities due to actions taken in January, April and July 2012 to reflect
the low interest rate environment.
Operating expenses decreased $19.6 million from $844.5 million to $824.9 million primarily driven by
expenses of the recordkeeping business.
Net amortization of DAC/VOBA increased $43.9 million from $111.1 million to $155.0 million primarily as
a result of lower favorable DAC unlocking in 2012. The 2012 results include a favorable impact of DAC/VOBA
and other intangibles of $5.8 million compared to a favorable impact of $44.2 million in 2011. Favorable
unlocking in 2011 was driven by future assumption changes and greater than expected net flows into fixed
investment option funds.
Operating earnings before income taxes
Operating earnings before income taxes was slightly higher for 2012. Higher net investment income and
lower operating expenses partially offset by higher Interest credited and other benefits to contract owners/
policyholders and net amortization of DAC/VOBA contributed to the results.
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