Voya 2014 Annual Report Download - page 159

Operating expenses increased $15.0 million from $824.9 million to $839.9 million due to an increase in
general expenses and higher commission expense due to an increase in AUM, partially offset by lower expenses
for the recordkeeping business.
Net amortization of DAC/VOBA decreased $39.7 million from $155.0 million to $115.3 million primarily
due to changes in unlocking of DAC/VOBA. The favorable DAC unlocking in the current period was $44.5
million higher than the prior period favorable unlocking largely due to the impact of the prospective assumption
changes.
Operating earnings before income taxes
Operating earnings before income taxes increased $147.2 million from $448.6 million to $595.8 million
primarily due to higher Fee income related to full service retirement plans, an increase in Net investment income
as a result of the loss related to the sale of certain alternative investments in the prior period along with a Net
gain from Lehman Recovery/LIHTC in the current period, and favorable changes in DAC/VOBA unlocking.
These were partially offset by a decline in Net investment income as a result of portfolio restructuring in the prior
period.
Retirement Solutions—Annuities
The following table presents Operating earnings before income taxes of the Annuities segment for the
periods indicated:
Year Ended December 31,
($ in millions) 2014 2013 2012
Operating revenues:
Net investment income and net realized gains (losses) ...... $1,109.6 $1,149.9 $1,223.3
Fee income ....................................... 57.0 45.1 35.5
Premiums ......................................... 169.0 36.4 35.9
Other revenue ..................................... 17.8 13.2 12.3
Total operating revenues ................................. 1,353.4 1,244.6 1,307.0
Operating benefits and expenses:
Interest credited and other benefits to contract owners/
policyholders .................................... 813.1 730.9 854.1
Operating expenses ................................. 139.8 127.0 124.7
Net amortization of DAC/VOBA ...................... 138.5 92.9 225.5
Interest expense .................................... — — 0.5
Total operating benefits and expenses ...................... 1,091.4 950.8 1,204.8
Operating earnings before income taxes ................... $ 262.0 $ 293.8 $ 102.2
The following table presents certain notable items that resulted in volatility in Operating earnings before
income taxes:
Year Ended December 31,
($ in millions) 2014 2013 2012
DAC/VOBA and other intangibles unlocking(1)(2) ............ $26.4 $83.3 $(86.2)
Net gain from Lehman Recovery/LIHTC ................... — 13.5 —
Loss on sale of alternative investments .................... — — (18.0)
(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).
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