Voya 2013 Annual Report Download - page 285

ING U.S., Inc.
Notes to the Consolidated Financial Statements
(Dollar amounts in millions, unless otherwise stated)
delivered, respectively, on the Consolidated Balance Sheets and is reinvested in short-term investments.
Collateral held is used in accordance with the CSA to satisfy any obligations. Investment grade bonds owned by
the Company are the source of noncash collateral posted, which is reported in Securities pledged on the
Consolidated Balance Sheets. As of December 31, 2013, the Company held $214.7 and $18.8 of net cash
collateral related to OTC derivative contracts and cleared derivative contracts, respectively. As of December 31,
2012, the Company held $890.3 of net cash collateral related to OTC derivative contracts. In addition, as of
December 31, 2013 and 2012, the Company delivered securities as collateral of $1.0 billion.
Net realized gains (losses) on derivatives were as follows for the periods indicated:
Years Ended December 31,
2013 2012 2011
Derivatives: Qualifying for hedge accounting(1)
Cash flow hedges:
Interest rate contracts .................................... $ 0.4 $ — $ —
Foreign exchange contracts ................................ 0.4 — —
Fair value hedges:
Interest rate contracts .................................... 21.1 (10.0) (57.2)
Derivatives: Non-qualifying for hedge accounting(2)
Interest rate contracts ........................................ (1,058.5) 51.5 1,041.8
Foreign exchange contracts .................................... 75.7 10.9 (2.4)
Equity contracts ............................................. (2,217.2) (1,801.9) (559.0)
Credit contracts ............................................. 25.2 37.1 (4.6)
Managed custody guarantees .................................. 0.2 1.1 1.1
Embedded derivatives:
Within fixed maturity investments(2) ............................. (107.5) (15.7) 16.1
Within annuity products(2) ..................................... 1,094.5 336.2 (1,946.2)
Within reinsurance agreements(3) ............................... 90.4 (32.2) (68.1)
Total ......................................................... $(2,075.3) $(1,423.0) $(1,578.5)
(1) Changes in value for effective fair value hedges are recorded in Other net realized capital gains (losses).
Changes in fair value upon disposal for effective cash flow hedges are amortized through Net investment
income and the ineffective portion is recorded in Other net realized capital gains (losses) in the Consolidated
Statements of Operations. For the years ended December 31, 2013, 2012 and 2011, ineffective amounts
were immaterial.
(2) Changes in value are included in Other net realized capital gains (losses) in the Consolidated Statements of
Operations.
(3) Changes in value are included in Policyholder benefits in the Consolidated Statements of Operations.
Credit Default Swaps
The Company has entered into various credit default swaps. When credit default swaps are sold, the Company
assumes credit exposure to certain assets that it does not own. Credit default swaps may also be purchased to
reduce credit exposure in the Company’s portfolio. Credit default swaps involve a transfer of credit risk from one
party to another in exchange for periodic payments. The Company has ISDA agreements with each counterparty
with which it conducts business and tracks the collateral positions for each counterparty. To the extent cash
collateral is received, it is included in Payables under securities loan agreements, including collateral held, on the
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