Voya 2013 Annual Report Download - page 260

ING U.S., Inc.
Notes to the Consolidated Financial Statements
(Dollar amounts in millions, unless otherwise stated)
accounting methodology similar to that for defined benefit pension plans. Actuarial gains (losses) are
immediately recognized in Operating expenses in the Consolidated Statements of Operations.
Share-based Compensation
The Company grants certain employees and directors stock-based compensation awards under various plans.
Certain employees of the Company have in the past participated in various ING Group share-based compensation
plans for which awards remain outstanding. Both the ING U.S., Inc. and the ING Group share-based
compensation plans are subject to certain vesting conditions. The Company measures the cost of the share-based
awards at their grant date fair value, based upon the market value of the stock, and recognizes that cost over the
vesting period. Differences in actual versus expected experience or changes in expected forfeitures are
recognized in the period of change. Compensation expense is principally related to the granting of performance
share units, restricted stock units and stock options and is recognized in Operating expenses in the Consolidated
Statements of Operations. The majority of awards granted are provided in the first quarter of each year.
Earnings per Common Share
Basic earnings per common share (“EPS”) is computed by dividing earnings available to common shareholders
by the weighted average number of common shares outstanding during the period. Diluted EPS is computed
assuming the issuance of nonvested shares, restricted stock units, and performance share units using the treasury
stock method. Under the treasury stock method, the Company utilizes the average market price to determine the
amount of cash that would be available to repurchase shares if the common shares vested. The net incremental
share count issued represents the potential dilutive or anti-dilutive securities.
For any period where a loss from earnings available to common shareholders is experienced, shares used in the
diluted EPS calculation represent basic shares because using diluted shares would be anti-dilutive to the
calculation.
Consolidation and Noncontrolling Interests
The Company consolidates entities in which it, directly or indirectly, is determined to have a controlling financial
interest.
VIEs: The Company consolidates VIEs for which it is the primary beneficiary. An entity is a VIE if it has
equity investors who lack the characteristics of a controlling financial interest or it does not have sufficient
equity at risk to finance its expected activities without additional subordinated financial support from other
parties. The primary beneficiary (a) has the power to direct the activities of the entity that most significantly
impact the entity’s economic performance and (b) has the obligation to absorb losses or the right to receive
benefits from the entity that could potentially be significant to the entity.
VOEs: For entities determined not to be VIEs, the Company consolidates entities in which it has an equity
investment of greater than 50% and has control over significant operating, financial and investing decisions
of the entity. Additionally, the Company consolidates entities in which the Company is a substantive,
controlling general partner, and the limited partners have no substantive rights to impact ongoing
governance and operating activities of the partnership.
The Company provides investment management services to, and has transactions with, various CLO entities,
private equity funds, real estate funds, fund-of-hedge funds, single strategy hedge funds, insurance entities,
securitizations and other investment entities in the normal course of business. In certain instances, the Company
serves as the investment manager, making day-to-day investment decisions concerning the assets of these
entities. These entities are considered to be either VIEs or VOEs, and the Company evaluates its involvement
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