Voya 2014 Annual Report Download - page 154

Net guaranteed benefit hedging gains (losses) and related charges and adjustments decreased $77.8 million
from $97.2 million to $19.4 million. Lower gains on guaranteed benefit derivative hedging, net amortization of
DAC/VOBA, and other intangibles, were primarily driven by changes in the fair value of derivatives associated
with the Stable Value hedge program put in place during the prior period, in addition to reductions in expected
future guaranteed interest rates on certain Stabilizer contracts in the prior period. These were partially offset by
higher gains resulting from rising interest rates and equity market movements and changes in the fair value of
guaranteed benefit derivatives related to nonperformance risk.
Losses related to businesses exited through reinsurance or divestment increased $14.0 million from $45.8
million to $59.8 million primarily due to higher costs associated with the business transferred from us to
Hannover Re.
Immediate recognition of net actuarial gains (losses) related to pension and other postretirement benefit
obligations and (losses) from plan adjustments and curtailments increased $570.2 million. We immediately
recognize actuarial gains and losses. A net actuarial gain of $405.2 million was recorded in 2013, driven
primarily due to strong investment returns in the assets of the pension plan and an increase in the discount rate
used to value benefit obligations. A net actuarial loss of $165.0 million was recorded in 2012, driven primarily
by the net impact of a decrease in the discount rate and a curtailment.
Other adjustments to operating earnings changed $31.9 million from $(100.1) million to $(68.2) million
primarily due to lower costs in the current period related to the divestment of the Company by ING Group and
integration expenses in the prior period related to our acquisition of Citistreet.
Results of Operations—Ongoing Business
We consider the Retirement, Annuities, Investment Management, Individual Life, and Employee Benefits
segments to be our Ongoing Business. The following table summarizes Operating earnings before income taxes
of our Ongoing Business for the periods indicated:
Year Ended December 31,
($ in millions) 2014 2013 2012
Operating earnings before income taxes .............. $1,376.3 $1,428.6 $990.9
The following table presents certain notable items that resulted in volatility in Operating earnings before
income taxes for the periods indicated:
Year Ended December 31,
($ in millions) 2014 2013 2012
DAC/VOBA and other intangibles unlocking(1)(2) ....... $(21.6) $133.2 $(77.0)
Loss on sale of alternative investments ............... — — (82.1)
Net gain from Lehman Recovery/LIHTC ............. — 83.6 —
Gain on reinsurance recapture ...................... 20.0 — —
(1) Unlocking related to the Net gain from Lehman Recovery/LIHTC is excluded from DAC/VOBA and other
intangibles unlocking for the year ended December 31, 2013 (and included in Net gain from Lehman
Recovery/LIHTC).
(2) Includes the impact of the annual review of assumptions. See Unlocking of DAC/VOBA and other Contract
Owners/Policyholders Intangibles in Part II, Item 7. of this Annual Report on Form 10-K for further
description.
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