Market Overview

Voya Financial Announces Second-Quarter 2018 Results

Share:
  • Second-quarter 2018 net income available to common shareholders of
    $0.96 per diluted share
  • Second-quarter 2018 adjusted operating earnings1
    of $1.13 per diluted share, after-tax, reflecting:
    • $(0.13) per diluted share, after-tax, of unfavorable deferred
      acquisition costs and value of business acquired ("DAC/VOBA") and
      other intangibles unlocking, and
    • $0.06 per diluted share, after-tax and DAC/VOBA, of prepayment
      fees and alternative investment income above the company's
      long-term expectations.
  • Second-quarter 2018 adjusted operating earnings (excluding DAC/VOBA
    and other intangibles unlocking)
    1 up 20%
    compared with the second quarter of 2017
  • Company completes annuities transaction, reducing market and
    insurance risk and positioning Voya to expand its higher-growth,
    higher-return, capital-light businesses
  • Continued progress on $1.5 billion share repurchase plan:
    • $500 million of shares repurchased in the second quarter to
      achieve the previously announced plan to repurchase $1 billion of
      shares by June 30
    • $500 million of share repurchases planned for the second half of
      2018
  • Strong excess capital of $699 million as of June 30, 20182

Voya Financial, Inc. (NYSE:VOYA) today announced financial results for
the second quarter of 2018.

"Our second-quarter results demonstrate our commitment to growth,
operational excellence and continued good stewardship of shareholder
capital," said Rodney O. Martin, Jr., chairman and CEO, Voya Financial,
Inc. "A top priority for us this year was closing the transaction to
sell the majority of our annuities businesses. Through this transaction,
which we completed on June 1, we have significantly reduced market and
insurance risk — transforming Voya into a simpler, more focused company
with higher-growth, higher-return, capital-light businesses. At the same
time, we continue to execute on our other 2018 priorities, which include
several cost-saving, capital and growth initiatives. Our commitment to
achieving these priorities is demonstrated in our financial results this
quarter.

"Excluding DAC/VOBA and other intangibles unlocking, our adjusted
operating earnings grew 20% compared with the second quarter of 2017. We
are executing on our plans to achieve $1.30 to $1.40 per share of
adjusted operating earnings and our targeted cost savings of $110 to
$130 million by the end of the second quarter of 2019.

"During the second quarter, we delivered on our plan to repurchase $1
billion of Voya shares by June 30, 2018. We intend to buy back an
additional $500 million of our common stock by the end of 2018 as we
continue to generate greater value for Voya's shareholders. As a more
focused, simpler company, we are now better positioned to drive greater
customer and shareholder value and achieve our vision to be America's
Retirement Company," added Martin.

SECOND-QUARTER 2018 SUMMARY

 
For the three months ended
June 30, 2018   June 30, 2017
($ in millions)   (per share) ($ in millions)   (per share)
Net income available to common shareholders $166 $0.96 $167 $0.89
Adjusted operating earnings, after-tax $195 $1.13 $73 $0.39
 
Book value $52.22 $74.30

Book value, excluding AOCI3

$46.40 $59.80
 
Weighted avg common shares outstanding (in millions):
Basic 167 186
Diluted   173       188    
 

1 This press release includes certain non-GAAP financial
measures. More information on these measures and reconciliations to the
most comparable U.S. GAAP measures can be found in the "Use of Non-GAAP
Financial Measures" section of this release and in the company's
Quarterly Investor Supplement.

2 Excess capital as of June 30, 2018 of $699 million is that
which is above the company's holding company liquidity target of $200
million and estimated statutory surplus in excess of a 425% combined
risk-based capital (RBC) ratio.

3 This press release includes certain non-GAAP financial
measures. More information on these measures and reconciliations to the
most comparable U.S. GAAP measures can be found in the "Use of Non-GAAP
Financial Measures" section of this release and in the company's
Quarterly Investor Supplement.

Second-quarter 2018 net income available to common shareholders was $166
million, or $0.96 per diluted share, compared with $167 million, or
$0.89 per diluted share in the second quarter of 2017. The increase is
largely due to higher income from continuing operations.

Second-quarter 2018 adjusted operating earnings were $195 million, or
$1.13 per diluted share, after-tax, up from $73 million, or $0.39 per
diluted share, after-tax, in the second quarter of 2017. The increase
was largely due to second-quarter 2017 results having higher negative
DAC/VOBA and other intangibles unlocking, driven by changes in
guaranteed minimum interest rate ("GMIR") provisions for certain
retirement plan contracts. In addition, fee income increased, and
expenses declined year over year.

BUSINESS HIGHLIGHTS

  • Retirement Full Service net flows of $127 million; record Retirement
    adjusted operating earnings (excluding DAC/VOBA and other intangibles
    unlocking) of $167 million
  • Investment Management sourced net flows of $1.2 billion
  • Employee Benefits in-force premium year-over-year growth driven by a
    strong increase in the Voluntary business
  • Individual Life mortality results slightly favorable to expectations

SEGMENT DISCUSSIONS

The following segment discussions compare the second quarter of 2018
with the second quarter of 2017, unless otherwise noted. All figures are
presented before income taxes.

Retirement

Retirement adjusted operating earnings were $169 million, up from $33
million. Second-quarter 2018 results reflect $3 million of positive
DAC/VOBA and other intangibles unlocking. Conversely, the second quarter
of 2017 had $114 million of negative DAC/VOBA and other intangibles
unlocking primarily due to changes in GMIR provisions for certain
retirement plan contracts.

Key earnings drivers included:

  • Investment spread revenues
    • Prepayment fee and alternative investment income was, in
      aggregate, $6 million above long-term expectations (before the
      effect of income taxes and DAC).
    • Excluding alternative investment income and prepayment fees,
      investment spread revenues increased $1 million.
  • Fee-based revenues net of asset-based commissions increased $18
    million due to higher average AUM attributable to equity market and
    business growth as well as the benefit of fees from the movement of
    certain investment-only products from Corporate to Retirement.
  • Expenses increased primarily as a result of the movement of certain
    investment-only products and strategic investment spending from
    Corporate to Retirement, offset in part by continued expense
    management in the business.
 
Retirement Net Flows
($ in millions)       2Q 2018       1Q 2018       2Q 2017
Full Service $ 127 $ 47 $ 914
Stable Value and Pension Risk Transfer (260 ) (341 ) (559 )
Retail Wealth Management       (1 )       (68 )       (75 )
Total       $ (134 )       $ (362 )       $ 280  
 

During the second quarter of 2018, full service net inflows were more
than offset by stable value net outflows.

Retirement AUM was $146 billion, up from $144 billion as of March 31,
2018. Retirement AUM increased from $130 billion as of June 30, 2017,
primarily due to equity market and business growth as well as the
transfer of certain investment-only products from Corporate to
Retirement in the first quarter of 2018.

Investment Management

Investment Management adjusted operating earnings were $52 million
compared with $85 million. Key earnings drivers included:

  • Investment capital revenues declined $31 million as the second quarter
    of 2017 benefited from a recovery of carried interest; alternative
    investment income was positive in the second quarter of 2018 and
    modestly below long-term expectations (before the effect of income
    taxes).
  • Fee-based revenues declined $2 million – strong third-party management
    fees driven by positive net flows were more than offset by lower fees
    due to smaller average AUM as a result of the company's sale of the
    majority of its annuities businesses and the second quarter of 2017
    benefiting from higher performance fees.
 
Investment Management Net Flows
($ in billions)       2Q 2018       1Q 2018       2Q 2017
Investment Management Sourced $ 1.2 $ 0.1 $ 2.4
Affiliate Sourced (0.4 ) (0.5 ) (0.5 )
Variable Annuities       (0.6 )       (0.7 )       (0.7 )
Total       $ 0.1         $ (1.2 )       $ 1.2  

During the second quarter of 2018, Investment Management sourced net
inflows were driven by institutional net flows primarily reflecting the
issuance of three collateralized loan obligations during the quarter.

Third-party sales (which exclude general account assets of Voya
Financial's insurance company subsidiaries) were $5.7 billion, compared
with $4.7 billion in the first quarter of 2018 and $6.4 billion in the
second quarter of 2017. Third-party AUM totaled $152 billion as of June
30, 2018, up from $141 billion as of March 31, 2018, and up from $135
billion as of June 30, 2017. The increase was largely due to positive
net flows and the addition of $9.7 billion of AUM retained from Voya's
general account assets in connection with Voya's sale of the majority of
its annuities businesses.

Employee Benefits

Employee Benefits adjusted operating earnings were $35 million, up from
$27 million. Key earnings drivers included:

  • Underwriting results improved primarily due to higher volumes in
    Voluntary and better claim experience in Stop Loss and partially
    offset by lower results in Group Life.
  • Administrative expenses increased slightly due to growth in the in
    force.
  • Investment spread revenues
    • Prepayment fee and alternative investment income were, in
      aggregate, $1 million above long-term expectations (before the
      effect of income taxes and DAC).
    • Excluding alternative investment income and prepayment fees,
      investment spread revenues were flat.

The loss ratio for Group Life was 81.5%, compared with 70.5% in the
second quarter of 2017. The loss ratio for Stop Loss was 81.7%, compared
with 85.6% during the same period last year. The annual loss ratios for
Stop Loss and Group Life are expected to be between the company's
targeted annual range of 77-80%.

 
Employee Benefits Annualized In-Force Premiums
($ in millions)       2Q 2018       1Q 2018       2Q 2017
Group Life, Disability and Other $ 664 $ 663 $ 620
Stop Loss 938 925 992
Voluntary       312         303         262
Total       $ 1,914         $ 1,891         $ 1,874
 

Compared with the second quarter of 2017, total Employee Benefits sales
increased 3%, and in-force premiums increased 2%, reflecting strong
growth in Voluntary premiums and continued pricing discipline in Stop
Loss.

Individual Life

Individual Life adjusted operating earnings were $41 million compared
with $62 million. Second-quarter 2018 results were lower due to $30
million of higher negative DAC/VOBA and other intangibles unlocking
driven by changes in reinsurance and unfavorable mortality experience on
interest-sensitive products.

Key earnings drivers included:

  • Investment spread revenues
    • Prepayment fee and alternative investment income were, in
      aggregate, $7 million above long-term expectations (before the
      effect of income taxes and DAC); total investment spread was $13
      million favorable compared with the second quarter of 2017.
    • Excluding alternative investment income and prepayment fees,
      investment spread revenues increased slightly.
  • Underwriting results (including DAC/VOBA and other intangibles
    amortization) were lower as net mortality — while slightly favorable
    to expectations — was unfavorable compared with the second quarter of
    2017 due to higher frequency and severity on the combined interest and
    non-interest sensitive blocks and partially offset by favorable
    intangibles amortization.

Total Individual Life sales, which primarily consist of indexed life
insurance, were $18 million compared with $19 million.

Corporate

Corporate adjusted operating losses were $59 million, compared with
losses of $100 million. The improvement was largely due to the
reallocation of strategic investment spending into the business segments
and a $10 million one-time favorable reserve refinement associated with
the legacy annuities.

Loss on Sale

For the three months ended June 30, 2018, the company recorded a
favorable adjustment of $56 million, after-tax, to the previously
estimated loss on the sale of the majority of its variable and fixed
annuities business.

Share Repurchases

In the second quarter of 2018, Voya repurchased 9,617,162 shares of its
common stock at an average price per share of $51.99 for an aggregate
purchase price of approximately $500 million. Voya had approximately
$511 million remaining under its share repurchase authorization as of
June 30, 2018.

Supplementary Financial Information

More detailed financial information can be found in the company's
Quarterly Investor Supplement, which is available on Voya's investor
relations website, investors.voya.com.

Earnings Call and Slide Presentation

Voya will host a conference call on Thursday, Aug. 2, 2018, at 8 a.m.
ET, to discuss the company's second-quarter 2018 results. The call and
slide presentation can be accessed via the company's investor relations
website at investors.voya.com.
A replay of the call will be available on the company's investor
relations website at investors.voya.com
starting at 1 p.m. ET on Aug. 2, 2018.

About Voya Financial

Voya Financial, Inc. (NYSE:VOYA), helps Americans plan, invest and
protect their savings — to get ready to retire better. Serving the
financial needs of approximately 14.3 million individual and
institutional customers in the United States, Voya is a Fortune 500
company that had $8.6 billion in revenue in 2017. The company had $528
billion in total assets under management and administration as of June
30, 2018. With a clear mission to make a secure financial future
possible — one person, one family, one institution at a time — Voya's
vision is to be America's Retirement Company®. Certified as a
"Great Place to Work" by the Great Place to Work® Institute,
Voya is equally committed to conducting business in a way that is
socially, environmentally, economically and ethically responsible. Voya
has been recognized as one of the 2018 World's Most Ethical Companies®
by the Ethisphere Institute, one of the 2018 World's Most Admired
Companies by Fortune magazine and one of the Top Green Companies
in the U.S. by Newsweek magazine. For more information, visit voya.com.
Follow Voya Financial on Facebook,
LinkedIn
and Twitter @Voya.

Use of Non-GAAP Financial Measures

Adjusted operating earnings before income taxes is a measure used to
evaluate segment performance. We believe that adjusted operating
earnings before income taxes provides a meaningful measure of Voya's
business and segment performances and enhances the understanding of our
financial results by focusing on the operating performance and trends of
the underlying business segments and excluding items that tend to be
highly variable from period to period based on capital market conditions
and/or other factors. We use the same accounting policies and procedures
to measure segment adjusted operating earnings before income taxes as we
do for the directly comparable U.S. GAAP measure Income (loss) from
continuing operations before income taxes.

Adjusted operating earnings before income taxes does not replace Income
(loss) from continuing operations before income taxes as the comparable
U.S. GAAP measure of our consolidated results of operations. Therefore,
we believe that it is useful to evaluate both Income (loss) from
continuing operations before income taxes and Adjusted operating
earnings before income taxes when reviewing our financial and operating
performance. Each segment's adjusted operating earnings before income
taxes is calculated by adjusting Income (loss) from continuing
operations before income taxes for the following items:

  • Net investment gains (losses), net of related amortization of DAC,
    VOBA, sales inducements and unearned revenue, which are significantly
    influenced by economic and market conditions, including interest rates
    and credit spreads, and are not indicative of normal operations. Net
    investment gains (losses) include gains (losses) on the sale of
    securities, impairments, changes in the fair value of investments
    using the fair value option ("FVO") unrelated to the implied
    loan-backed security income recognition for certain mortgage-backed
    obligations and changes in the fair value of derivative instruments,
    excluding realized gains (losses) associated with swap settlements and
    accrued interest;
  • Net guaranteed benefit hedging gains (losses), which are significantly
    influenced by economic and market conditions and are not indicative of
    normal operations, include changes in the fair value of derivatives
    related to guaranteed benefits, net of related reserve increases
    (decreases) and net of related amortization of DAC, VOBA and sales
    inducements, less the estimated cost of these benefits. The estimated
    cost, which is reflected in operating results, reflects the expected
    cost of these benefits if markets perform in line with our long-term
    expectations and includes the cost of hedging. Other derivative and
    reserve changes related to guaranteed benefits are excluded from
    operating results, including the impacts related to changes in
    nonperformance spread;
  • Income (loss) related to businesses exited through reinsurance or
    divestment that do not qualify as discontinued operations, which
    includes gains and (losses) associated with transactions to exit
    blocks of business (including net investment gains (losses) on
    securities sold and expenses directly related to these transactions)
    and residual run-off activity; these gains and (losses) are often
    related to infrequent events and do not reflect performance of
    operating segments. Excluding this activity better reveals trends in
    our core business, which would be obscured by including the effects of
    business exited, and more closely aligns Adjusted operating earnings
    before income taxes with how we manage our segments;
  • Income (loss) attributable to noncontrolling interest, which
    represents the interest of shareholders, other than those of Voya
    Financial, Inc., in consolidated entities. Income (loss) attributable
    to noncontrolling interest represents such shareholders' interests in
    the gains and (losses) of those entities, or the attribution of
    results from consolidated VIEs or VOEs to which we are not
    economically entitled;
  • Income (loss) related to early extinguishment of debt, which includes
    losses incurred as a result of transactions where we repurchase
    outstanding principal amounts of debt; these losses are excluded from
    Adjusted operating earnings before income taxes since the outcome of
    decisions to restructure debt are not indicative of normal operations;
  • Impairment of goodwill, value of management contract rights and value
    of customer relationships acquired, which includes losses as a result
    of impairment analysis; these represent losses related to infrequent
    events and do not reflect normal, cash-settled expenses;
  • Immediate recognition of net actuarial gains (losses) related to our
    pension and other postretirement benefit obligations and gains
    (losses) from plan amendments and curtailments, which includes
    actuarial gains and losses as a result of differences between actual
    and expected experience on pension plan assets or projected benefit
    obligation during a given period. We immediately recognize actuarial
    gains and (losses) related to pension and other postretirement benefit
    obligations and gains and losses from plan adjustments and
    curtailments. These amounts do not reflect normal, cash-settled
    expenses and are not indicative of current Operating expense
    fundamentals; and
  • Other items not indicative of normal operations or performance of our
    segments or may be related to infrequent events including capital or
    organizational restructurings including certain costs related to debt
    and equity offerings as well as stock and/or cash based deal
    contingent awards; expenses associated with the rebranding of Voya
    Financial, Inc.; severance and other third-party expenses associated
    with the 2016 Restructuring. These items vary widely in timing, scope
    and frequency between periods as well as between companies to which we
    are compared. Accordingly, we adjust for these items as we believe
    that these items distort the ability to make a meaningful evaluation
    of the current and future performance of our segments. Additionally,
    with respect to restructuring, these costs represent changes in
    operations rather than investments in the future capabilities of our
    operating businesses.

Adjusted operating earnings before income taxes for Corporate in the
prior period includes Net investment gains (losses) and Net guaranteed
benefit hedging gains (losses) associated with the retained CBVA and
annuities businesses that are not components of discontinued operations.
These retained amounts are insignificant and do not distort the ability
to make a meaningful evaluation of the trends of Corporate activities.

Income (loss) related to businesses exited through reinsurance or
divestment (including net investment gains (losses) on securities sold
and expenses directly related to these transactions) is excluded from
the results of operations from adjusted operating earnings before income
taxes. When we present the adjustments to income (loss) from continuing
operations before income taxes on a consolidated basis, each adjustment
excludes the relative portions attributable to businesses exited through
reinsurance or divestment.

The most directly comparable U.S. GAAP measure to adjusted operating
earnings before income taxes is income (loss) from continuing operations
before income taxes. For a reconciliation of income (loss) from
continuing operations before income taxes to adjusted operating earnings
before income taxes, see the tables that accompany this release, as well
as our Quarterly Investor Supplement.

Adjusted operating earnings - excluding unlocking is also a non-GAAP
financial measure. This measure excludes from adjusted operating
earnings before income taxes the following items:

  • DAC/VOBA and other intangibles unlocking; and
  • The net gains included in adjusted operating earnings from a
    distribution of cash and securities in conjunction with a Lehman
    Brothers bankruptcy settlement ("Lehman Recovery"), and losses as a
    result of the decision to dispose of certain Low Income Housing Tax
    Credit partnerships ("LIHTC") as a mean of exiting this asset class.
    Because DAC/VOBA and other intangibles unlocking can be volatile,
    excluding the effect of this item can improve period to period
    comparability. The net gain from the Lehman Recovery and loss from the
    disposition of LIHTC partnerships affected run-rate results and we
    believe that this effect is not reflective of our ongoing performance.

In addition to net income (loss) per share, we report adjusted operating
earnings per share (diluted) because we believe that adjusted operating
earnings before income taxes provides a meaningful measure of its
business and segment performances and enhances the understanding of our
financial results by focusing on the operating performance and trends of
the underlying business segments and excluding items that tend to be
highly variable from period to period based on capital market conditions
and/or other factors.

In addition to book value per share including accumulated other
comprehensive income (AOCI), we also report book value per share
excluding AOCI and shareholders' equity excluding AOCI. Included in AOCI
are investment portfolio unrealized gains or losses. In the ordinary
course of business we do not plan to sell most investments for the sole
purpose of realizing gains or losses, and book value per share excluding
AOCI and shareholders' equity excluding AOCI provide a measure
consistent with that view. The adjusted debt to capital calculation
excludes AOCI and includes a 25% equity treatment afforded to
subordinated debt.

In our Investment Management business, adjusted operating margin
excluding Investment Capital results is reported because results from
Investment Capital can be volatile and excluding the effect of this item
can improve period-to-period comparability.

For a reconciliation of these non-GAAP measures to the most directly
comparable U.S. GAAP measures, refer to the tables that accompany this
release, as well as our Quarterly Investor Supplement.

We also analyze our segment performance based on the sources of
earnings. We believe this supplemental information is useful in order to
gain a better understanding of our adjusted operating earnings before
income taxes for the following reasons: (1) we analyze our business
using this information and (2) this presentation can be helpful for
investors to understand the main drivers of adjusted operating earnings
(loss) before income taxes. The sources of earnings are defined as such:

  • Investment spread and other investment income consists of net
    investment income and net realized investment gains (losses)
    associated with swap settlements and accrued interest, less interest
    credited to policyholder reserves.
  • Fee based margin consists primarily of fees earned on assets under
    management ("AUM"), assets under administration ("AUA"), and
    transaction based recordkeeping fees.
  • Net underwriting gain (loss) and other revenue contains the following:
    the difference between fees charged for insurance risks and incurred
    benefits, including mortality, morbidity, and surrender results,
    contractual charges for universal life and annuity contracts, the
    change in the unearned revenue reserve for universal life contracts,
    and that portion of traditional life insurance premiums intended to
    cover expenses and profits. Certain contract charges for universal
    life insurance are not recognized in income immediately, but are
    deferred as unearned revenues and are amortized into income in a
    manner similar to the amortization of DAC.
  • Administrative expenses are general expenses, net of amounts
    capitalized as acquisition expenses and exclude commission expenses
    and fees on letters of credit.
  • Trail commissions are commissions paid that are not deferred and thus
    recorded directly to expense.
  • For a detail explanation of DAC/VOBA and other intangibles
    amortization/unlocking see Management's Discussion and Analysis of
    Financial Condition and Results of Operations - Unlocking of DAC/VOBA
    and other Contract Owner/Policyholder Intangibles in our Annual Report
    on Form 10-K for the twelve-month period ended Dec. 31, 2017, which
    the company filed with the Securities and Exchange Commission on Feb.
    23, 2018 and in our Quarterly Report on Form 10-Q for the three-month
    period ended June 30, 2018, which the company expects to file with the
    Securities and Exchange Commission on or before Aug. 8, 2018.

More details on these sources of earnings can be found in Voya
Financial's Quarterly Investor Supplement, which is available on Voya
Financial's investor relations website, investors.voya.com.

Forward-Looking and Other Cautionary Statements

This press release contains forward-looking statements. Forward-looking
statements include statements relating to future developments in our
business or expectations for our future financial performance and any
statement not involving a historical fact. Forward-looking statements
use words such as "anticipate," "believe," "estimate," "expect,"
"intend," "plan," and other words and terms of similar meaning in
connection with a discussion of future operating or financial
performance. Actual results, performance or events may differ materially
from those projected in any forward-looking statement due to, among
other things, (i) general economic conditions, particularly economic
conditions in our core markets, (ii) performance of financial markets,
including emerging markets, (iii) the frequency and severity of insured
loss events, (iv) mortality and morbidity levels, (v) persistency and
lapse levels, (vi) interest rates, (vii) currency exchange rates, (viii)
general competitive factors, (ix) changes in laws and regulations, such
as those relating to Federal taxation, state insurance regulations and
NAIC regulations and guidelines, including those affecting reserve
requirements for variable annuity policies and the use of and possible
application of NAIC accreditation standards to captive reinsurance
entities, those made pursuant to the Dodd-Frank Wall Street Reform and
Consumer Protection Act, and the U.S. Department of Labor's final rules
and exemptions pertaining to the fiduciary status of providers of
investment advice, or any amendments thereto, (x) changes in the
policies of governments and/or regulatory authorities, and (xi) our
ability to successfully manage the separation of Venerable, including
the transition services, on the expected timeline and economic terms.
Factors that may cause actual results to differ from those in any
forward-looking statement also include those described under "Risk
Factors" and "Management's Discussion and Analysis of Results of
Operations and Financial Condition - Trends and Uncertainties" in our
Annual Report on Form 10-K for the year ended Dec. 31, 2017, which the
company filed with the Securities and Exchange Commission on Feb. 23,
2018 and in our Quarterly Report on Form 10-Q for the three-month period
ended June 30, 2018, which the company expects to file with the
Securities and Exchange Commission on or before Aug. 8, 2018.

VOYA-IR

 
Reconciliation of Net Income (Loss) to Adjusted Operating
Earnings - Quarter-to-Date
 
Three Months Ended
(in millions USD) 6/30/2018   6/30/2017
 
Net Income (loss) available to Voya Financial, Inc.'s common
shareholders
$       166 $       167
Plus: Net income (loss) attributable to noncontrolling interest 58     52  
Net Income (loss) 224 219
Less: Income from Discontinued Operations, net of tax 28 64
Net Income (loss) from continuing operations 196 155
Less: Net Income (loss) attributable to noncontrolling interest 58 52
Less: Adjustments to adjusted operating earnings
Net Investment gains (losses) and related charges and adjustments (40 ) 2
Other adjustments (2) (15 )   (6 )
Total Adjustments to adjusted operating earnings before tax effect (55 ) (4 )
Income taxes on adjustments to adjusted operating earnings (1) 12     1  
Total Adjustments to adjusted operating earnings, after tax(1) (43 ) (3 )
Less: Difference between actual tax (expense) benefit and assumed
tax rate
(14 )   33  
Adjusted Operating earnings, after-tax (1) 195 73
Less: Income taxes (1) (43 )   (34 )
Adjusted operating earnings before income taxes $       238     $       107  
 
Reconciliation of Net Income per Share to Adjusted Operating
Earnings per Share
   
Three Months Ended
(in USD per diluted share) 6/30/2018   6/30/2017
 
Net Income (loss) available to Voya Financial, Inc.'s common
shareholders
$       0.96 $       0.89
Less: Income from Discontinued Operations, net of tax 0.16     0.34  
Net Income (loss) from continuing operations 0.80 0.55
Less: Net Investment gains (losses) and related charges and
adjustments, after-tax
(0.18 ) 0.01
Less: Other adjustments, after-tax (2) (0.07 ) (0.02 )
Less: Effect of assumed tax rate vs. actual tax rate (0.08 ) 0.17
Less: Adjustment due to antidilutive effect of net loss in the
current period
     
Adjusted Operating earnings, after-tax (1) $       1.13     $       0.39  
 
Reconciliation of Fully Diluted Weighted Average Shares to
Adjusted Operating Diluted Weighted Average Shares
   
Three Months Ended
6/30/2018   6/30/2017
 
Fully Diluted weighted average shares outstanding 173 188
Dilutive effect of the exercise or issuance of stock based awards  
Weighted average common shares outstanding - diluted (adjusted
operating)
173   188
 

(1) Voya Financial assumes a 32% tax rate on
adjusted operating earnings and all components of adjusted operating
earnings described as "after tax" for 2017. For 2018, the adjusted
operating effective tax rate is based on the actual income tax expense
for the current period related to Income (loss) from continuing
operations, less estimated taxes on non-operating items assuming a 21%
corporate tax rate and other non-operating impacts such as those related
to restructuring and the Tax Cuts and Jobs Act. A 35% tax rate is
applied to all non-operating items in 2017 and 21% in 2018. The 32% tax
rate for 2017 adjusted operating earnings and components reflects the
estimated benefit of the dividend received deduction related to the
company's Retirement, Investment Management, Employee Benefits and
Individual Life segments.

(2) "Other adjustments" consists of net guaranteed benefit
hedging gains (losses) and related charges and adjustments; income
(loss) from business exited; immediate recognition of net actuarial
gains (losses) related to pension and other post-retirement benefit
obligations and gains (losses) from plan amendments and curtailments;
expenses associated with the rebranding of Voya Financial from ING U.S.;
and restructuring expenses (severance, lease write-offs, etc.).

 
Reconciliation of Book Value per Share to Book Value per Share
excluding AOCI
As of June 30, 2018   As of June 30, 2017
Book value per share, including AOCI $ 52.22 $ 74.30
Per share impact of AOCI (5.82 )   (14.50 )
Book value per share, excluding AOCI $ 46.40     $ 59.80  
 
 
Reconciliation of Investment Management Adjusted Operating Margin
to Adjusted Operating Margin Excluding Investment Capital
 
Three Months Ended
(in millions USD, unless otherwise indicated) 6/30/2018   3/31/2018   6/30/2017
   
Adjusted Operating revenues $ 171 $ 185 $ 204

Adjusted operating expenses

(119 )   (124 )   (119 )
Adjusted operating earnings before income taxes $ 52     $ 61     $ 85  
Adjusted operating margin 30.7 % 32.9 % 41.8 %
 
Adjusted Operating revenues $ 171 $ 185 $ 204
Less:
Investment Capital Results 5     11     35  
Adjusted operating revenues excluding Investment Capital 166 174 168
Adjusted operating expenses (119 )   (124 )   (119 )
Adjusted operating earnings excluding Investment Capital $ 47     $ 50     $ 50  
Adjusted operating margin excluding Investment Capital 28.7 % 28.6 % 29.6 %
 

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