Voya 2013 Annual Report Download - page 69

Windsor decision. Although we recognize that certain changes will be required, we cannot predict with certainty
how new regulations will impact our business, results of operations, cash flows or financial condition. The
Windsor decision also creates potential inconsistencies in the application of federal and state tax laws, including
how tax withholding is computed. Future guidance from the Internal Revenue Service and state tax authorities
may resolve these inconsistencies, and it is possible that significant changes will be required to our tax reporting
and withholding systems as a result.
Item 1A. Risk Factors
We face a variety of risks that are substantial and inherent in our businesses, including market,
liquidity, credit, operational, legal, regulatory and reputational risks. The following are some of the more
important factors that could affect our business.
Risks Related to Our Business—General
Continued difficult conditions in the global capital markets and the economy generally have affected and may
continue to affect our business and results of operations.
Our business and results of operations are materially affected by conditions in the global capital markets and
the economy generally. Concerns over the slow economic recovery, the shutdown of the U.S. government, the
level of U.S. national debt (including periodic debates in the U.S. Congress regarding the national debt ceiling),
the European sovereign debt crisis, the ability of certain countries to remain in the euro zone, unemployment, the
availability and cost of credit, the U.S. housing market, inflation levels, energy costs and geopolitical issues have
contributed to increased volatility and diminished expectations for the economy and the markets. In 2011,
Standard & Poor’s Ratings Services (“S&P”) lowered its long term sovereign credit rating on the United States
from AAA to AA+. In addition, significant concerns regarding the sovereign debt of Greece, Ireland, Italy,
Portugal and Spain, as well as certain other countries, in some cases have required countries to obtain emergency
financing. The financial turmoil in Europe continues to be a long-term threat to global capital markets and
remains a challenge to global financial stability. If these or other countries require additional financial support or
if sovereign credit ratings decline further, yields on the sovereign debt of certain countries may increase, the cost
of borrowing may increase and credit may become more limited. Additionally, the possibility of capital market
volatility spreading through a highly integrated and interdependent banking system remains elevated. In the event
of any default or similar event with respect to a sovereign issuer, some financial institutions may suffer
significant losses for which they would require additional capital, which may not be available. These factors,
combined with volatile oil prices, reduced business and consumer confidence and continued high unemployment,
have negatively impacted the U.S. economy. Furthermore, the Board of Governors of the Federal Reserve
System (the “Federal Reserve”) has begun to scale back programs that have in recent years fostered a historically
low interest rate environment, which could generate volatility in debt and equity markets including, but not
limited to, rapid increases in interest rates and associated declining values on fixed income investments. Our
results of operations, investment portfolio and AUM are exposed to these risks and may be adversely affected as
a result. In addition, in the event of extreme prolonged market events, such as the recent global credit crisis, we
could incur significant losses.
Even in the absence of a market downturn, our insurance, annuity, retirement and investment products, as
well as our investment returns and our access to and cost of financing, are sensitive to equity, fixed income, real
estate and other market fluctuations and general economic and political conditions. These fluctuations and
conditions could materially and adversely affect our results of operations, financial condition and liquidity,
including in the following respects:
• We provide a number of insurance, annuity, retirement and investment products that expose us to risks
associated with fluctuations in interest rates, market indices, securities prices, default rates, the value of
real estate assets, currency exchange rates and credit spreads. The profitability of many of our
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