Voya 2013 Annual Report Download - page 150

Net Amortization of DAC/VOBA decreased $136.6 million from $298.9 million to $162.3 million primarily
due to unfavorable unlocking in 2011 as a result of annual assumption changes that did not repeat in 2012. This
impact was partially offset by items explained in Interest credited and other benefits to contract owners/
policyholders described above. In addition, 2012 amortization on UL products was lower due to lower gross
profits and the emergence of gross profits for a particular block that caused accelerated amortization in 2011,
offset by higher unearned revenue liability amortization as discussed in Fee Income above. These impacts are
partially offset by higher amortization on term products resulting from the continued growth of this block of
business.
Operating earnings before income taxes
Operating earnings before income taxes decreased due to unfavorable mortality results net of reinsurance,
lower investment income on alternative investments and CMO-Bs, increased credit facility costs and favorable
reserve changes in 2011 that did not repeat in 2012. Partially offsetting these items were lower DAC/VOBA
amortization resulting from lower gross profits on universal life products, higher term life renewal premiums and
higher net contractual charges and cost of insurance fees due to higher UL sales.
Insurance Solutions—Employee Benefits
The following table summarizes Operating earnings before income taxes of the Employee Benefits segment
for the periods indicated:
Years Ended December 31,
($ in millions) 2013 2012 2011
Operating revenues:
Net investment income and net realized gains (losses) . . . $ 117.6 $ 114.3 $ 124.3
Fee income ..................................... 63.0 62.5 61.8
Premiums ...................................... 1,085.9 1,078.1 1,063.4
Other revenue ................................... (4.0) (3.7) (3.3)
Total operating revenues .............................. 1,262.5 1,251.2 1,246.2
Operating benefits and expenses:
Interest credited and other benefits to contract owners/
policyholders ................................. 903.4 892.1 917.7
Operating expenses .............................. 236.1 236.2 229.3
Net amortization of DAC/VOBA ................... 16.9 13.5 15.9
Total operating benefits and expenses .................... 1,156.4 1,141.8 1,162.9
Operating earnings before income taxes ................ $ 106.1 $ 109.4 $ 83.3
The following table summarizes certain notable items that resulted in volatility Operating earnings before
income taxes for the periods indicated:
Years Ended December 31,
($ in millions) 2013 2012 2011
DAC/VOBA and other intangibles unlocking ................. $(0.5) $— $—
Net gain from Lehman Recovery/LIHTC .................... 4.3 — —
Loss on sale of alternative investments ...................... — (5.1) —
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