Voya 2013 Annual Report Download - page 184

(1) Purchase obligations consist primarily of outstanding commitments under alternative investments that may
occur any time within the terms of the partnership and private loans. The exact timing, however, of funding
these commitments related to partnerships and private loans cannot be estimated. Therefore, the amount of
the commitments related to partnerships and private loans is included in the category “Less than 1 Year.”
(2) Reserves for insurance obligations consist of amounts required to meet our future obligations for future
policy benefits and contract owner account balances. Amounts presented in the table represent estimated
cash payments under such contracts, including significant assumptions related to the receipt of future
premiums, mortality, morbidity, lapse, renewal, retirement, disability and annuitization comparable with
actual experience. These assumptions also include market growth and interest crediting consistent with
assumptions used in amortizing DAC. All estimated cash payments are undiscounted for the time value of
money. Accordingly, the sum of cash flows presented for all years of $105.8 billion significantly exceeds
the sum of Future policy benefits and Contract owner account balances of $84.0 billion recorded on our
Consolidated Balance Sheets as of December 31, 2013. Estimated cash payments are also presented gross of
reinsurance. Due to the significance of the assumptions used, the amounts presented could materially differ
from actual results.
(3) Contractual obligations related to certain closed blocks, with reserves in the amount of $5.4 billion, have been
excluded from the table because the blocks were divested through reinsurance contracts and collateral is
provided by third parties that is accessible by us. Although we are not relieved of legal liability to the contract
holder for these closed blocks, third-party collateral of $6.5 billion has been provided for the payment of the
related insurance obligations. The sufficiency of collateral held for any individual block may vary.
(4) Includes estimated benefit payments under our qualified and non-qualified pension plans, estimated benefit
payments under our postretirement benefit plan, and estimated payments of deferred compensation based on
participant elections and an average retirement age.
(5) The estimated payments due by period for long-term debt reflects the contractual maturities of principal, as
disclosed in Financing Agreements in our Consolidated Financial Statements, as well as estimated future
interest payments. The payment of principal and estimated future interest for short-term debt are reflected in
estimated payments due in less than one year. See “Item 8. Note 16. Financing Agreements” for additional
information concerning the short-term and long-term debt.
(6) Operating leases consist primarily of outstanding commitments for office space, equipment and
automobiles.
(7) Payables under securities loan agreements including collateral held represents the liability to return
collateral received from counterparties under securities lending agreements. Securities lending agreements
include provisions which permit us to call back securities with minimal notice and accordingly, the payable
is classified as having a term of less than 1 year.
Critical Accounting Judgments and Estimates
General
The preparation of financial statements in conformity with U.S. GAAP requires us to make estimates and
assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the Consolidated Financial Statements and the reported amounts of revenues and
expenses during the reporting period. Critical estimates and assumptions are evaluated on an on-going basis
based on historical developments, market conditions, industry trends and other information that is reasonable
under the circumstances. There can be no assurance that actual results will conform to estimates and assumptions
and that reported results of operations will not be materially affected by the need to make future accounting
adjustments to reflect changes in these estimates and assumptions from time to time.
We have identified the following accounting, judgments and estimates as critical in that they involve a
higher degree of judgment and are subject to a significant degree of variability:
Reserves for future policy benefits, DAC/VOBA and other intangibles, valuation of investments and
derivatives, impairments, income taxes, contingencies and employee benefit plans.
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