Voya 2014 Annual Report Download - page 279

Voya Financial, Inc.
Notes to the Consolidated Financial Statements
(Dollar amounts in millions, unless otherwise stated)
expected costs of these benefits are accrued in Other liabilities over the period of employment using an
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 share-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 Voya Financial, 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.
The liability related to the cash-settled awards made under the Voya Financial, Inc. 2014 Employee Phantom
Stock Plan is recorded within Other liabilities on the Consolidated Balance Sheets. Unlike equity-settled awards,
which have a fixed grant-date fair value, the fair value of unvested cash-settled awards is remeasured at the end
of each reporting period until the awards vest.
Excess tax benefits in Additional paid-in capital are accounted for in a single pool available to all share-based
compensation awards. Excess tax benefits in Additional paid-in capital are not recognized until the benefits result
in a reduction in taxes payable. The Company uses tax law ordering when determining when excess tax benefits
have been realized.
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, performance share units and warrants using the
treasury stock method. Basic and diluted earnings per share are calculated using unrounded, actual amounts.
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, as 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.
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