ING U.S. 2013 Q2


 
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
——————————————————————
FORM 10-Q
(Mark One)
 
ý
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2013
OR
o
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from        _                   to  _                        

Commission File Number: _001-35897______________________________________

ING U.S., Inc.
(Exact name of registrant as specified in its charter)
Delaware
52-1222820
(State or other jurisdiction of incorporation or organization)
(IRS Employer Identification No.)
230 Park Avenue
 
New York, New York
10169
(Address of principal executive offices)
(Zip Code)
(212) 309-8200
(Registrant’s telephone number, including area code)
(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.        Yes   x     No   o

Indicate by check mark whether the registrant (1) has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).   Yes   x     No   o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of "large accelerated filer", "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer    o
Accelerated filer    o
Non-accelerated filer    x
Smaller reporting company     o
(Do not check if a smaller reporting company)
 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes o  No ý

APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: At August 7, 2013 260,776,492 shares of Common Stock, $.01 par value, were outstanding.
 

 
 
 


ING U.S., Inc.
Form 10-Q for the period ended June 30, 2013


INDEX
 
 
PAGE
PART I.
FINANCIAL INFORMATION (UNAUDITED)
 
 
 
 
Item 1.
Financial Statements:
 
 
 
 
 
 
 
 
 
 
Item 2.
 
 
 
Item 3.
 
 
 
Item 4.
 
 
 
PART II.
OTHER INFORMATION
 
 
 
 
Item 1.
 
 
 
Item 1A.
 
 
 
Item 2.
 
 
 
Item 3.
 
 
 
Item 5.
 
 
 
Item 6.
 
 
 
 
 
 
 
 


 
2
 


NOTE CONCERNING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q, including "Management's Discussion and Analysis of Results of Operations and Financial Condition," contains statements which constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements relating to trends in operations and financial results and the business and products of ING U.S., Inc. (the "Company"), as well as other statements including words such as "anticipate," "believe," "plan," "estimate," "expect," "intend" and other similar expressions. Forward-looking statements are made based upon management's current expectations and beliefs concerning future developments and their potential effects on us. Forward-looking statements are necessarily based on estimates and assumptions that are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond the Company's control and many of which are subject to change. These uncertainties and contingencies could cause actual results to differ materially from those expressed in any forward-looking statements made by, or on behalf of, the Company. Factors that could cause such differences include, but are not limited to, those discussed in Part I, Item 2. "Management's Discussion and Analysis of Results of Operations and Financial Condition" and Part II, Item 1A. "Risk Factors" of this Form 10-Q as well as those discussed in "Risk Factors," "Management's Discussion and Analysis of Results of Operations and Financial Condition - Trends and Uncertainties" and "Business - Closed Blocks - Closed Blocks Variable Annuity" in the Company's prospectus dated May 1, 2013, filed with the SEC pursuant to Rule 424(b)(1) under the Securities Act of 1933, as amended (the "Securities Act"), on May 3, 2013 (the "IPO Prospectus") and the Company's prospectus dated July 11, 2013, filed with the SEC pursuant to Rule 424(b)(1) under the Securities Act on July 12, 2013 (the "Offering Prospectus").

The risks included here are not exhaustive. The IPO Prospectus, the Offering Prospectus, current reports on Form 8-K and other documents filed with the SEC include additional factors that could affect our businesses and financial performance. Moreover, we operate in a rapidly changing and competitive environment. New risk factors emerge from time to time, and it is not possible for management to predict all such risk factors.

 
3
 


PART I.        FINANCIAL INFORMATION

Item 1.        Financial Statements

ING U.S., Inc.
Condensed Consolidated Balance Sheets
June 30, 2013 (Unaudited) and December 31, 2012
(In millions, except share and per share data)

 
June 30,
2013
 
December 31,
2012
Assets:
 
 
 
Investments:
 
 
 
Fixed maturities, available-for-sale, at fair value (amortized cost of $65,829.2 at 2013 and $62,955.4 at 2012)
$
69,843.4

 
$
70,910.3

Fixed maturities, at fair value using the fair value option
2,771.6

 
2,771.3

Equity securities, available-for-sale, at fair value (cost of $240.8 at 2013 and $297.9 at 2012)
281.0

 
340.1

Short-term investments
2,404.8

 
5,991.2

Mortgage loans on real estate, net of valuation allowance of $4.1 at 2013 and $3.9 at 2012
8,929.1

 
8,662.3

Policy loans
2,144.9

 
2,200.3

Limited partnerships/corporations
430.2

 
465.1

Derivatives
1,174.4

 
2,374.5

Other investments
168.4

 
167.0

Securities pledged (amortized cost of $1,300.8 at 2013 and $1,470.0 at 2012)
1,357.0

 
1,605.5

Total investments
89,504.8

 
95,487.6

Cash and cash equivalents
1,549.8

 
1,786.8

Short-term investments under securities loan agreements, including collateral delivered
411.8

 
664.0

Accrued investment income
910.4

 
863.5

Reinsurance recoverable
7,053.0

 
7,379.3

Deferred policy acquisition costs and Value of business acquired
5,060.5

 
3,656.3

Sales inducements to contract holders
277.0

 
212.7

Goodwill and other intangible assets
333.0

 
348.5

Other assets
1,271.3

 
1,362.5

Assets related to consolidated investment entities:
 
 
 
Limited partnerships/corporations, at fair value
2,987.7

 
2,931.2

Cash and cash equivalents
936.6

 
440.8

Corporate loans, at fair value using the fair value option
4,573.5

 
3,559.3

Other assets
25.2

 
34.3

Assets held in separate accounts
102,228.9

 
97,667.4

Total assets
$
217,123.5

 
$
216,394.2




The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
 
 
 


4
 

ING U.S., Inc.
Condensed Consolidated Balance Sheets
June 30, 2013 (Unaudited) and December 31, 2012
(In millions, except share and per share data)

 
June 30,
2013
 
December 31,
2012
Liabilities and Shareholders' Equity:
 
 
 
Future policy benefits
$
14,963.9

 
$
15,493.6

Contract owner account balances
70,598.0

 
70,562.1

Payables under securities loan agreement, including collateral held
470.6

 
1,509.8

Short-term debt
138.6

 
1,064.6

Long-term debt
3,265.7

 
3,171.1

Funds held under reinsurance agreements
1,281.6

 
1,236.6

Derivatives
1,320.9

 
1,944.2

Pension and other post-employment provisions
896.5

 
903.2

Current income taxes
12.8

 
11.7

Deferred income taxes
202.5

 
1,042.7

Other liabilities
1,363.8

 
1,604.2

Liabilities related to consolidated investment entities:
 
 
 
Collateralized loan obligations notes, at fair value using the fair value option
4,881.3

 
3,829.4

Other liabilities
851.3

 
292.4

Liabilities related to separate accounts
102,228.9

 
97,667.4

Total liabilities
202,476.4

 
200,333.0

 
 
 
 
Shareholders' equity:
 
 
 
Common stock (900,000,000 shares authorized, 260,855,612 and 230,079,120 issued as of June 30, 2013 and December 31, 2012, respectively, and 260,776,492 and 230,000,000 outstanding as of June 30, 2013 and December 31, 2012, respectively, net of 79,120 of Treasury shares as of June 30, 2013 and December 31, 2012; $0.01 par value per share )
2.6

 
2.3

Additional paid-in capital
23,498.7

 
22,917.6

Accumulated other comprehensive income (loss)
2,087.8

 
3,710.7

Retained earnings (deficit):
 
 
 
Appropriated-consolidated investment entities
(61.2
)
 
6.4

Unappropriated
(13,056.3
)
 
(12,762.1
)
Total ING U.S., Inc. shareholders' equity
12,471.6

 
13,874.9

Noncontrolling interest
2,175.5

 
2,186.3

Total shareholders' equity
14,647.1

 
16,061.2

Total liabilities and shareholders' equity
$
217,123.5

 
$
216,394.2



The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
 
 
 


5
 

ING U.S., Inc.
Condensed Consolidated Statements of Operations
For the Three and Six Months Ended June 30, 2013, and 2012 (Unaudited)
(In millions, except per share data)

 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2013
 
2012
 
2013
 
2012
Revenues:
 
 
 
 
 
 
 
Net investment income
$
1,112.2

 
$
1,138.9

 
$
2,310.9

 
$
2,416.3

Fee income
909.7

 
862.9

 
1,801.6

 
1,751.9

Premiums
474.8

 
474.8

 
946.7

 
936.4

Net realized gains (losses):
 
 
 
 
 
 
 
Total other-than-temporary impairments
(9.7
)
 
(10.1
)
 
(21.3
)
 
(17.4
)
Less: Portion of other-than-temporary impairments recognized in Other comprehensive income (loss)
(2.5
)
 
(4.0
)
 
(3.1
)
 
(4.4
)
Net other-than-temporary impairments recognized in earnings
(7.2
)
 
(6.1
)
 
(18.2
)
 
(13.0
)
Other net realized capital gains (losses)
(558.7
)
 
491.8

 
(1,422.5
)
 
(751.2
)
Total net realized capital gains (losses)
(565.9
)
 
485.7

 
(1,440.7
)
 
(764.2
)
Other revenue
106.1

 
100.5

 
201.7

 
189.5

Income (loss) related to consolidated investment entities:
 
 
 
 
 
 
 
Net investment income (loss)
166.8

 
368.1

 
211.0

 
403.0

Changes in fair value related to collateralized loan obligations
(63.1
)
 
(69.0
)
 
(72.0
)
 
(85.7
)
Total revenues
2,140.6

 
3,361.9

 
3,959.2

 
4,847.2

Benefits and expenses:
 
 
 
 
 
 
 
Policyholder benefits
711.0

 
924.8

 
1,251.5

 
1,372.9

Interest credited to contract owner account balance
518.9

 
586.8

 
1,039.8

 
1,156.9

Operating expenses
770.2

 
712.6

 
1,529.3

 
1,472.0

Net amortization of deferred policy acquisition costs and value of business acquired
124.5

 
216.2

 
255.0

 
389.9

Interest expense
43.8

 
38.1

 
88.2

 
62.4

Operating expenses related to consolidated investment entities:
 
 
 
 
 
 
 
Interest expense
43.4

 
25.6

 
80.2

 
47.8

Other expense
4.0

 
4.7

 
4.7

 
5.1

Total benefits and expenses
2,215.8

 
2,508.8

 
4,248.7

 
4,507.0

Income (loss) before income taxes
(75.2
)
 
853.1

 
(289.5
)
 
340.2

Income tax expense
10.1

 
1.0

 
21.3

 
8.9

Net income (loss)
(85.3
)
 
852.1

 
(310.8
)
 
331.3

Less: Net income (loss) attributable to noncontrolling interest
(3.1
)
 
217.7

 
(16.6
)
 
202.1

Net income (loss) available to ING U.S., Inc.'s common shareholders
$
(82.2
)
 
$
634.4

 
$
(294.2
)
 
$
129.2

Net income (loss) available to ING U.S., Inc.'s common shareholders per common share:
 
 
 
 
 
 
 
Basic
$
(0.33
)
 
$
2.76

 
$
(1.22
)
 
$
0.56

Diluted
$
(0.33
)
 
$
2.76

 
$
(1.22
)
 
$
0.56



The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
 
 
 


6
 

ING U.S., Inc.
Condensed Consolidated Statements of Comprehensive Income
For the Three and Six Months Ended June 30, 2013, and 2012 (Unaudited)
(In millions)

 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2013
 
2012
 
2013
 
2012
Net income (loss)
$
(85.3
)
 
$
852.1

 
$
(310.8
)
 
$
331.3

Other comprehensive income (loss), before tax:
 
 
 
 
 
 
 
Unrealized gains/losses on securities
(2,110.3
)
 
649.8

 
(2,510.2
)
 
574.1

Other-than-temporary impairments
20.4

 
11.1

 
31.3

 
23.9

Pension and other postretirement benefits liability
(3.4
)
 
(3.7
)
 
(6.9
)
 
(7.5
)
Other comprehensive income (loss), before tax
(2,093.3
)
 
657.2

 
(2,485.8
)
 
590.5

Income tax expense (benefit) related to items of other comprehensive income (loss)
(728.3
)
 
222.7

 
(862.9
)
 
164.0

Other comprehensive income (loss), after tax
(1,365.0
)
 
434.5

 
(1,622.9
)
 
426.5

Comprehensive income (loss)
(1,450.3
)
 
1,286.6

 
(1,933.7
)
 
757.8

Less: Comprehensive income (loss) attributable to the noncontrolling interest
(3.1
)
 
217.7

 
(16.6
)
 
202.1

Comprehensive income (loss) attributable to ING U.S., Inc.'s common shareholders
$
(1,447.2
)
 
$
1,068.9

 
$
(1,917.1
)
 
$
555.7



The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
 
 
 


7
 

ING U.S., Inc.
 Condensed Consolidated Statements of Changes in Shareholders' Equity
For the Six Months Ended June 30, 2013 and 2012 (Unaudited)
(In millions)
 
Common
Stock
 
Additional
Paid-In
Capital
 
Accumulated
Other
Comprehensive
Income (Loss)
 
Retained Earnings (Deficit)
 
Total
ING U.S., Inc.
Shareholders'
Equity
 
Noncontrolling
Interest
 
Total
Shareholders'
Equity
 
 
 
 
Appropriated
 
Unappropriated
 
 
 
Balance at January 1, 2013
$
2.3

 
$
22,917.6

 
$
3,710.7

 
$
6.4

 
$
(12,762.1
)
 
$
13,874.9

 
$
2,186.3

 
$
16,061.2

Comprehensive income (loss):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income (loss)
—

 
—

 
—

 
—

 
(294.2
)
 
(294.2
)
 
(16.6
)
 
(310.8
)
Other comprehensive income (loss), after tax
—

 
—

 
(1,622.9
)
 
—

 
—

 
(1,622.9
)
 
—

 
(1,622.9
)
Total comprehensive income (loss)
 
 


 


 


 


 
(1,917.1
)
 
(16.6
)
 
(1,933.7
)
Reclassification of noncontrolling interest
—

 
—

 
—

 
(67.6
)
 
—

 
(67.6
)
 
67.6

 
—

Common Stock Issuance
0.3

 
571.7

 
—

 
—

 
—

 
572.0

 
—

 
572.0

Employee related benefits
—

 
9.4

 
—

 
—

 
—

 
9.4

 
—

 
9.4

Contribution from (Distribution to) noncontrolling interest, net
—

 
—

 
—

 
—

 
—

 
—

 
(61.8
)
 
(61.8
)
Balance at June 30, 2013
$
2.6

 
$
23,498.7

 
$
2,087.8

 
$
(61.2
)
 
$
(13,056.3
)
 
$
12,471.6

 
$
2,175.5

 
$
14,647.1



 
Common
Stock
 
Additional
Paid-In
Capital
 
Accumulated
Other
Comprehensive
Income (Loss)
 
Retained Earnings (Deficit)
 
Total
ING U.S., Inc.
Shareholders'
Equity
 
Noncontrolling
Interest
 
Total
Shareholder's
Equity
 
 
 
 
Appropriated
 
Unappropriated
 
 
 
Balance at January 1, 2012
$
2.3

 
$
22,865.2

 
$
2,595.0

 
$
126.5

 
$
(13,235.1
)
 
$
12,353.9

 
$
1,572.2

 
$
13,926.1

Comprehensive income (loss):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income (loss)
—

 
—

 
—

 
—

 
129.2

 
129.2

 
202.1

 
331.3

Other comprehensive income (loss), after tax
—

 
—

 
426.5

 
—

 
—

 
426.5

 
—

 
426.5

Total comprehensive income (loss)
 
 
 
 
 
 
 
 
 
 
555.7

 
202.1

 
757.8

Reclassification of noncontrolling interest
—

 
—

 
—

 
(88.9
)
 
—

 
(88.9
)
 
88.9

 
—

Common Stock Issuance
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Employee related benefits
—

 
21.1

 
—

 
—

 
—

 
21.1

 
—

 
21.1

Contribution from (Distribution to) noncontrolling interest, net
—

 
—

 
—

 
—

 
—

 
—

 
377.9

 
377.9

Balance at June 30, 2012
$
2.3

 
$
22,886.3

 
$
3,021.5

 
$
37.6

 
$
(13,105.9
)
 
$
12,841.8

 
$
2,241.1

 
$
15,082.9



The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
 
 
 


8
 

ING U.S., Inc.
Condensed Consolidated Statements of Cash Flows
For the Six Months Ended June 30, 2013, and 2012 (Unaudited)
(In millions)

 
Six Months Ended June 30,
 
2013
 
2012
Net cash provided by operating activities
$
1,289.9

 
$
1,347.0

Cash Flows from Investing Activities:
 
 
 
Proceeds from the sale, maturity, disposal or redemption of:
 
 
 
Fixed maturities
7,714.4

 
9,420.2

Equity securities, available-for-sale
32.0

 
32.9

Mortgage loans on real estate
790.4

 
806.2

Loan - Dutch State obligation
—

 
192.3

Limited partnerships/corporations
54.0

 
300.3

Acquisition of:
 
 
 
Fixed maturities
(10,478.1
)
 
(8,501.7
)
Equity securities, available-for-sale
(10.9
)
 
(12.5
)
Mortgage loans on real estate
(1,033.8
)
 
(1,068.9
)
Limited partnerships/corporations
(8.7
)
 
(38.4
)
Short-term investments, net
3,586.4

 
(2,192.2
)
Policy loans, net
55.4

 
54.9

Derivatives, net
(1,293.4
)
 
(528.4
)
Other investments, net
11.5

 
3.2

Sales from consolidated investment entities
1,508.9

 
749.2

Purchase of consolidated investment entities
(2,027.2
)
 
(1,180.6
)
Collateral (delivered) received, net
(787.0
)
 
502.3

Purchases of fixed assets, net
(15.1
)
 
(24.9
)
Other, net
—

 
(4.7
)
Net cash used in investing activities
(1,901.2
)
 
(1,490.8
)

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
 
 
 


9
 

ING U.S., Inc.
Condensed Consolidated Statements of Cash Flows
For the Six Months Ended June 30, 2013 and 2012 (Unaudited)
(In millions)

 
Six Months Ended June 30,
 
2013
 
2012
Cash Flows from Financing Activities:
 
 
 
Deposits received for investment contracts
5,917.2

 
8,828.7

Maturities and withdrawals from investment contracts
(6,226.0
)
 
(9,958.5
)
Proceeds from issuance of debt with maturities of more than three months
1,748.9

 
2,082.8

Repayment of debt with maturities of more than three months
(2,408.7
)
 
(73.3
)
Short-term debt, net
(171.6
)
 
26.0

Debt issuance costs
(19.6
)
 
(29.4
)
Borrowings of consolidated investment entities
27.7

 
45.7

Repayments of debt of consolidated investment entities
(7.8
)
 
(43.3
)
Contributions from participants in consolidated investment entities
942.2

 
442.4

Proceeds from issuance of common stock, net
572.0

 
—

Net cash provided by financing activities
374.3

 
1,321.1

Net (decrease) increase in cash and cash equivalents
(237.0
)
 
1,177.3

Cash and cash equivalents, beginning of period
1,786.8

 
638.0

Cash and cash equivalents, end of period
$
1,549.8

 
$
1,815.3

Supplemental cash flow information:
 
 
 
Income taxes paid, net
$
(2.4
)
 
$
(27.9
)
Interest paid
64.1

 
31.8


The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
 
 
 


10
 


ING U.S., Inc.
Notes to the Condensed Consolidated Financial Statements (Unaudited)
(Dollar amounts in millions, unless otherwise stated)
 
 
 




1.    Business, Basis of Presentation and Significant Accounting Policies

Business

ING U.S., Inc. and its subsidiaries (collectively "the Company") is a financial services organization in the United States that offers a broad range of retirement services, annuities, investment management services, mutual funds, life insurance, group insurance and supplemental health products, guaranteed investment contracts and funding agreements. The Company provides its principal products and services in three businesses (Retirement Solutions, Investment Management and Insurance Solutions) and reports results through five ongoing operating segments, including Retirement, Annuities, Investment Management, Individual Life and Employee Benefits. The Company also has a Corporate segment, which includes the financial data not directly related to the businesses, and Closed Block segments. See the Segments Note to these Condensed Consolidated Financial Statements.

In 2009, ING Groep N.V. ("ING Group" or "ING") announced the anticipated separation of its global banking and insurance businesses, including the divestiture of the Company. On April 11, 2013, the Company announced plans to rebrand in the future as Voya Financial. On May 2, 2013, the common stock of ING U.S., Inc. began trading on the New York Stock Exchange under the symbol "VOYA." On May 7, 2013, ING U.S., Inc. completed the offering of 65,192,307 shares of its common stock, including the issuance and sale by ING U.S., Inc. of 30,769,230 shares of common stock and the sale by ING Insurance International B.V. ("ING International"), an indirect wholly owned subsidiary of ING Group and previously the sole stockholder of ING U.S., Inc., of 34,423,077 shares of outstanding common stock of ING U.S., Inc. (collectively, the "IPO"). The IPO price of the shares sold in the IPO was $19.50 per share. The Company received net proceeds of $572.0 after deducting underwriting fees of $21.8 and $6.2 of incremental offering costs directly attributable to the IPO, and used the net proceeds received from the IPO to fund certain capital management activities. The Company did not receive any proceeds from the sale of shares by ING International. Immediately following the closing of the IPO on May 7, 2013, ING International owned 75% of the outstanding common stock of ING U.S., Inc.

On May 31, 2013, in connection with the option granted to the underwriters in the IPO to acquire up to an additional 9,778,846 shares of ING U.S., Inc. common stock from ING International, the underwriters exercised such option (ultimately acquiring an additional 9,778,696 shares) and ING International's ownership of ING U.S., Inc.'s common stock was reduced to 71%. The Company did not receive any proceeds from the sale of such additional shares by ING International.

ING International is a subsidiary of ING Verzekeringen N.V. ("ING V"), which is a wholly owned subsidiary of ING Insurance Topholding N.V. (“ING Topholding”), which is a wholly owned subsidiary of ING Group, the ultimate parent company. ING is a global financial services holding company based in The Netherlands, with American Depository Shares listed on the New York Stock Exchange under the symbol "ING."

In August 2013, ING Group announced that ING International, ING V and ING Topholding will distribute shares of common stock of ING U.S., Inc. that are held directly by ING International as a dividend in kind to ING Group (effectively removing ING International, ING V and ING Topholding from the chain of intermediate ownership, and resulting in such shares being held directly by ING Group). Subject to receipt of regulatory approvals and/or notices of non-objection, as the case may be, this transaction is expected to be completed on September 30, 2013.

Basis of Presentation

On April 10, 2013, the Company's Board of Directors authorized 1,000,000,000 shares, of which 900,000,000 shares, par value $0.01 per share, are designated as common stock and 100,000,000 shares, par value $0.01 per share, are designated as preferred stock. In addition, the Company's Board of Directors authorized a 2,295.248835-for-1 split of the Company's common stock. These actions were subsequently approved by the Company's sole stockholder on April 10, 2013 and effected on April 11, 2013, resulting in 230,079,120 shares of common stock issued, including 79,120 shares of Treasury stock, and 230,000,000 shares of common stock outstanding and held by ING International, prior to the IPO. The accompanying Condensed Consolidated Financial Statements and Notes to Condensed Consolidated Financial Statements give retroactive effect to the stock split for all periods presented. There are no preferred shares issued or outstanding.


 
11
 


ING U.S., Inc.
Notes to the Condensed Consolidated Financial Statements (Unaudited)
(Dollar amounts in millions, unless otherwise stated)
 
 
 



The accompanying Condensed Consolidated Financial Statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States ("U.S. GAAP") and are unaudited. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the Condensed Consolidated Financial Statements and the reported amounts of revenues and expenses during the reporting period. Those estimates are inherently subject to change and actual results could differ from those estimates.

The Condensed Consolidated Financial Statements include the accounts of ING U.S., Inc. and its subsidiaries, as well as partnerships (voting interest entities ("VOEs")) in which the Company has control and variable interest entities ("VIEs") for which the Company is the primary beneficiary. See the Consolidated Investment Entities Note to these Condensed Consolidated Financial Statements.

Certain immaterial reclassifications have been made to prior year financial information to conform to the current year classifications. Intercompany transactions and balances have been eliminated.

The accompanying Condensed Consolidated Financial Statements reflect all adjustments (including normal, recurring adjustments) necessary to present fairly the financial position of the Company as of June 30, 2013, its results of operations, comprehensive income, changes in shareholders' equity and cash flows for the three and six months ended June 30, 2013 and 2012, in conformity with U.S. GAAP. Interim results are not necessarily indicative of full year performance. These unaudited Condensed Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements included in the Company's prospectus dated May 1, 2013, filed with the SEC pursuant to Rule 424(b)(1) under the Securities Act of 1933, as amended (the "Securities Act"), on May 3, 2013 (the "IPO Prospectus"), the Company's prospectus dated July 11, 2013, filed with the SEC pursuant to Rule 424(b)(1) under the Securities Act on July 12, 2013 (the "Offering Prospectus"), current reports on Form 8-K and other documents filed with the SEC that affect the Company's financial performance.

Adoption of New Pronouncements

Disclosures about Offsetting Assets and Liabilities
In December 2011, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2011-11, "Balance Sheet (Accounting Standards Codification ("ASC") Topic 210): Disclosures about Offsetting Assets and Liabilities" ("ASU 2011-11"), which requires an entity to disclose both gross and net information about instruments and transactions eligible for offset in the statement of financial position, as well as instruments and transactions subject to an agreement similar to a master netting arrangement. In addition, the standard requires disclosure of collateral received and posted in connection with master netting agreements or similar arrangements.

In January 2013, the FASB issued ASU 2013-01, "Balance Sheet (ASC Topic 210): Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities" ("ASU 2013-01"), which clarifies that the scope of ASU 2011-11 applies to derivatives accounted for in accordance with ASU Topic 815, Derivatives and Hedging, including bifurcated embedded derivatives, repurchase agreements and reverse repurchase agreements, and securities borrowing and securities lending transactions that are either offset in accordance with Section 210-20-45 or Section 815-10-45 or subject to an enforceable master netting arrangement or similar agreement.

The provisions of ASU 2013-01 and ASU 2011-11 were adopted retrospectively by the Company on January 1, 2013. The adoption had no effect on the Company's financial condition, results of operations or cash flows, as the pronouncement only pertains to additional disclosure. The disclosures required by ASU 2011-11 and ASU 2013-01 are included in the Derivative Financial Instruments Note to these Condensed Consolidated Financial Statements.

Disclosures about Amounts Reclassified out of Accumulated Other Comprehensive Income ("AOCI")
In January 2013, the FASB issued ASU 2013-02, "Comprehensive Income (ASC Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income" ("ASU 2013-02"), which requires an entity to provide information about the amounts reclassified out of accumulated other comprehensive income by component. In addition, an entity is required to present, either on the face of the statement where net income is presented or in the notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income, but only if the amount reclassified is required under U.S. GAAP to be reclassified to net income in its entirety in the same reporting period. For other amounts that are not required under U.S. GAAP to be reclassified in their entirety to net income, an entity is required to cross-reference to other disclosures required under U.S. GAAP that provide additional detail about those amounts.

 
12
 


ING U.S., Inc.
Notes to the Condensed Consolidated Financial Statements (Unaudited)
(Dollar amounts in millions, unless otherwise stated)
 
 
 




The provisions of ASU 2013-02 were adopted by the Company on January 1, 2013. The adoption had no effect on the Company's financial condition, results of operations or cash flows, as the pronouncement only pertains to additional disclosure. The disclosures required by ASU 2013-02, including comparative period disclosures, are included in the Accumulated Other Comprehensive Income Note to these Condensed Consolidated Financial Statements.

Future Adoption of Accounting Pronouncements

Joint and Several Liability Arrangements
In February 2013, the FASB issued ASU 2013-04, "Liabilities (ASC Topic 405): Obligations Resulting from Joint and Several Liability Arrangements for Which the Total Amount of the Obligation Is Fixed at the Reporting Date" ("ASU 2013-04"), which requires an entity to measure obligations resulting from joint and several liable arrangements for which the total amount of the obligation within the scope of this guidance is fixed at the reporting date, as the sum of (1) the amount the reporting entity agreed to pay on the basis of its arrangement among its co-obligors and (2) any additional amount it expects to pay on behalf of its co-obligors. ASU 2013-04 also requires an entity to disclose the nature and amount of the obligation, as well as other information about those obligations.

The provisions of ASU 2013-04 are effective for years, and interim periods within those years, beginning after December 15, 2013. The amendments should be applied retrospectively for those obligations resulting from joint and several liability arrangements that exist at the beginning of an entity's year of adoption. The Company is currently in the process of determining the impact of adoption of the provisions of ASU 2013-04.

Investment Companies
In June 2013, the FASB issued ASU 2013-08, "Financial Services-Investment Companies (ASC Topic 946): Amendments to the Scope, Measurement, and Disclosure Requirements" ("ASU 2013-08"), which provides comprehensive guidance for assessing whether an entity is an investment company and requires an investment company to measure noncontrolling ownership interests in other investment companies at fair value. ASU 2013-08 also requires an entity to disclose that it is an investment company and any changes to that status, as well as information about financial support provided or required to be provided to investees.

The provisions of ASU 2013-08 are effective for interim and annual reporting periods in years beginning after December 15, 2013, and should be applied prospectively for entities that are investment companies upon the effective date of the amendments. The Company is currently in the process of determining the impact of adoption of the provisions of ASU 2013-08.

Derivatives and Hedging
In July 2013, the FASB issued ASU 2013-10, "Derivatives and Hedging (ASC Topic 815): Inclusion of the Fed Funds Effective Swap Rate (or Overnight Index Swap Rate) as a Benchmark Interest Rate for Hedge Accounting Purposes" ("ASU 2013-10"), which permits an entity to use the Fed Funds Effective Swap Rate ("OIS") to be used as a U.S. benchmark interest rate for hedge accounting purposes. In addition, the guidance removes the restriction on using different benchmark rates for similar hedges.

The provisions of ASU 2013-10 are effective for qualifying new or redesigned hedges entered into on or after July 17, 2013. The Company does not expect ASU 2013-10 to have an impact on its financial condition, results of operations or cash flows.

Income Taxes
In July 2013, the FASB issued ASU 2013-11, "Income Taxes (ASC Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists" ("ASU 2013-11"), which clarifies that:
•
An unrecognized tax benefit should be presented as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss or a tax credit carryforward, except,
•
An unrecognized tax benefit should be presented as a liability and not be combined with a deferred tax asset (i) to the extent a net operating loss carryforward, a similar tax loss or a tax credit carryforward is not available at the reporting date to settle any additional income taxes that would result from the disallowance of a tax position or (ii) the tax law does not require the entity to use, or the entity does not intend to use, the deferred tax asset for such a purpose.
•
The assessment of whether a deferred tax asset is available is based on the unrecognized tax benefit and deferred tax asset that exist at the reporting date and should be made presuming disallowance of the tax position at the reporting date.

 
13
 


ING U.S., Inc.
Notes to the Condensed Consolidated Financial Statements (Unaudited)
(Dollar amounts in millions, unless otherwise stated)
 
 
 




The provisions of ASU 2013-11 are effective for years, and interim periods within those years, beginning after December 15, 2013, and should be applied prospectively to all unrecognized tax benefits that exist at the effective date. The Company does not expect ASU 2013-11 to have an impact on its financial condition, results of operations or cash flows, as the guidance is consistent with that currently applied.

 
14
 


ING U.S., Inc.
Notes to the Condensed Consolidated Financial Statements (Unaudited)
(Dollar amounts in millions, unless otherwise stated)
 
 
 



2.    Investments (excluding Consolidated Investment Entities)

Fixed Maturities and Equity Securities

Available-for-sale and fair value option ("FVO") fixed maturities and equity securities were as follows as of June 30, 2013:
 
Amortized Cost
 
Gross Unrealized Capital Gains
 
Gross Unrealized Capital Losses
 
Embedded Derivatives(2)
 
Fair Value
 
OTTI(3)
Fixed maturities:
 
 
 
 
 
 
 
 
 
 
 
U.S. Treasuries
$
5,610.1

 
$
377.2

 
$
64.6

 
$
—

 
$
5,922.7

 
$
—

U.S. Government agencies and authorities
702.0

 
36.6

 
0.5

 
—

 
738.1

 
—

State, municipalities and political subdivisions
278.3

 
15.0

 
0.8

 
—

 
292.5

 
—

U.S. corporate securities
35,244.5

 
2,387.9

 
565.5

 
—

 
37,066.9

 
13.0

 
 
 
 
 
 
 
 
 
 
 
 
Foreign securities:(1)
 
 
 
 
 
 
 
 
 
 
 
Government
1,080.8

 
53.7

 
42.7

 
—

 
1,091.8

 
—

Other
13,945.1

 
888.4

 
177.4

 
—

 
14,656.1

 
—

Total foreign securities
15,025.9

 
942.1

 
220.1

 
—

 
15,747.9

 
—

 
 
 
 
 
 
 
 
 
 
 
 
Residential mortgage-backed securities:
 
 
 
 
 
 
 
 
 
 
 
Agency
5,510.0

 
483.0

 
52.8

 
101.9

 
6,042.1

 
1.1

Non-Agency
1,353.2

 
165.4

 
42.9

 
59.2

 
1,534.9

 
118.9

Total Residential mortgage-backed securities
6,863.2

 
648.4

 
95.7

 
161.1

 
7,577.0

 
120.0

Commercial mortgage-backed securities
4,014.6

 
414.9

 
3.6

 
—

 
4,425.9

 
4.4

Other asset-backed securities
2,163.0

 
97.8

 
52.5

 
(7.3
)
 
2,201.0

 
5.2

 
 
 
 
 
 
 
 
 
 
 
 
Total fixed maturities, including securities pledged
69,901.6

 
4,919.9

 
1,003.3

 
153.8

 
73,972.0

 
142.6

Less: Securities pledged
1,300.8

 
71.6

 
15.4

 
—

 
1,357.0

 
—

Total fixed maturities
68,600.8

 
4,848.3

 
987.9

 
153.8

 
72,615.0

 
142.6

 
 
 
 
 
 
 
 
 
 
 
 
Equity securities:
 
 
 
 
 
 
 
 
 
 
 
Common stock
188.9

 
1.1

 
0.2

 
—

 
189.8

 
—

Preferred stock
51.9

 
39.3

 
—

 
—

 
91.2

 
—

Total equity securities
240.8

 
40.4

 
0.2

 
—

 
281.0

 
—

 
 
 
 
 
 
 
 
 
 
 
 
Total fixed maturities and equity securities investments
$
68,841.6

 
$
4,888.7

 
$
988.1

 
$
153.8

 
$
72,896.0

 
$
142.6

(1) Primarily U.S. dollar denominated.
(2) Embedded derivatives within fixed maturity securities are reported with the host investment. The changes in fair value of embedded derivatives are reported in Other net realized capital gains (losses) in the Condensed Consolidated Statements of Operations.
(3) Represents Other-than Temporary-Impairments ("OTTI") reported as a component of Other comprehensive income.


 
15
 


ING U.S., Inc.
Notes to the Condensed Consolidated Financial Statements (Unaudited)
(Dollar amounts in millions, unless otherwise stated)
 
 
 



Available-for-sale and FVO fixed maturities and equity securities were as follows as of December 31, 2012:
 
Amortized
Cost
 
Gross
Unrealized
Capital
Gains
 
Gross
Unrealized
Capital
Losses
 
Embedded
Derivatives (2)
 
Fair
 Value
 
OTTI(3)
Fixed maturities:
 
 
 
 
 
 
 
 
 
 
 
U.S. Treasuries
$
5,194.3

 
$
691.2

 
$
1.8

 
$
—

 
$
5,883.7

 
$
—

U.S. Government agencies and authorities
645.4

 
78.8

 
—

 
—

 
724.2

 
—

State, municipalities and political subdivisions
320.2

 
32.6

 
—

 
—

 
352.8

 
—

U.S. corporate securities
32,986.1

 
4,226.6

 
48.8

 
—

 
37,163.9

 
13.4

 
 
 
 
 
 
 
 
 
 
 
 
Foreign securities(1):
 
 
 
 
 
 
 
 
 
 
 
Government
1,069.4

 
125.2

 
4.6

 
—

 
1,190.0

 
—

Other
13,321.8

 
1,527.4

 
54.7

 
—

 
14,794.5

 
—

Total foreign securities
14,391.2

 
1,652.6

 
59.3

 
—

 
15,984.5

 
—

 
 
 
 
 
 
 
 
 
 
 
 
Residential mortgage-backed securities:
 
 
 
 
 
 
 
 
 
 
 
Agency
5,071.6

 
633.3

 
14.8

 
156.0

 
5,846.1

 
1.2

Non-Agency
1,612.6

 
198.6

 
71.9

 
81.6

 
1,820.9

 
139.6

Total Residential mortgage-backed securities
6,684.2

 
831.9

 
86.7

 
237.6

 
7,667.0

 
140.8

Commercial mortgage-backed securities
4,438.9

 
513.6

 
6.1

 
—

 
4,946.4

 
4.4

Other asset-backed securities
2,536.4

 
128.4

 
90.0

 
(10.2
)
 
2,564.6

 
15.4

 
 
 
 
 
 
 
 
 
 
 
 
Total fixed maturities, including securities pledged
67,196.7

 
8,155.7

 
292.7

 
227.4

 
75,287.1

 
174.0

Less: Securities pledged
1,470.0

 
139.6

 
4.1

 
—

 
1,605.5

 
—

Total fixed maturities
65,726.7

 
8,016.1

 
288.6

 
227.4

 
73,681.6

 
174.0

 
 
 
 
 
 
 
 
 
 
 
 
Equity securities:
 
 
 
 
 
 
 
 
 
 
 
Common stock
194.4

 
13.2

 
1.0

 
—

 
206.6

 
—

Preferred stock
103.5

 
30.0

 
—

 
—

 
133.5

 
—

Total equity securities
297.9

 
43.2

 
1.0

 
—

 
340.1

 
—

 
 
 
 
 
 
 
 
 
 
 
 
Total fixed maturities and equity securities investments
$
66,024.6

 
$
8,059.3

 
$
289.6

 
$
227.4

 
$
74,021.7

 
$
174.0

(1) Primarily U.S. dollar denominated.
(2) Embedded derivatives within fixed maturity securities are reported with the host investment. The changes in fair value of embedded derivatives are reported in Other net realized capital gains (losses) in the Condensed Consolidated Statements of Operations.
(3) Represents OTTI reported as a component of Other comprehensive income.


 
16
 


ING U.S., Inc.
Notes to the Condensed Consolidated Financial Statements (Unaudited)
(Dollar amounts in millions, unless otherwise stated)
 
 
 



The amortized cost and fair value of fixed maturities, including securities pledged, as of June 30, 2013, are shown below by contractual maturity. Actual maturities may differ from contractual maturities as securities may be restructured, called, or prepaid. Mortgage-backed securities ("MBS") and Other asset-backed securities ("ABS") are shown separately because they are not due at a single maturity date.
 
Amortized
Cost
 
Fair
Value
Due to mature:
 
 
 
One year or less
$
2,390.5

 
$
2,471.6

After one year through five years
15,121.5

 
15,862.9

After five years through ten years
19,373.8

 
19,928.2

After ten years
19,975.0

 
21,505.4

Mortgage-backed securities
10,877.8

 
12,002.9

Other asset-backed securities
2,163.0

 
2,201.0

Fixed maturities, including securities pledged
$
69,901.6

 
$
73,972.0


The investment portfolio is monitored to maintain a diversified portfolio on an ongoing basis. Credit risk is mitigated by monitoring concentrations by issuer, sector and geographic stratification and limiting exposure to any one issuer.

As of June 30, 2013 and December 31, 2012, the Company did not have any investments in a single issuer, other than obligations of the U.S. Government and government agencies, with a carrying value in excess of 10% of the Company’s consolidated Shareholders' equity.

The following tables set forth the composition of the U.S. and foreign corporate securities within the fixed maturity portfolio by industry category as of the dates indicated:
 
Amortized
Cost
 
Gross
Unrealized
Capital
Gains
 
Gross
Unrealized
Capital
Losses
 
Fair
Value
June 30, 2013
 
 
 
 
 
 
 
Communications
$
4,043.7

 
$
332.7

 
$
56.7

 
$
4,319.7

Financial
6,086.4

 
537.6

 
76.2

 
6,547.8

Industrial and other companies
28,528.9

 
1,637.2

 
490.6

 
29,675.5

Utilities
9,069.8

 
672.7

 
94.7

 
9,647.8

Transportation
1,460.8

 
96.1

 
24.7

 
1,532.2

Total
$
49,189.6

 
$
3,276.3

 
$
742.9

 
$
51,723.0

 
 
 
 
 
 
 
 
December 31, 2012
 
 
 
 
 
 
 
Communications
$
3,609.5

 
$
563.4

 
$
2.4

 
$
4,170.5

Financial
5,912.9

 
749.4

 
46.7

 
6,615.6

Industrial and other companies
26,613.3

 
3,063.3

 
24.2

 
29,652.4

Utilities
8,893.1

 
1,210.5

 
28.9

 
10,074.7

Transportation
1,279.1

 
167.4

 
1.3

 
1,445.2

Total
$
46,307.9

 
$
5,754.0

 
$
103.5

 
$
51,958.4


The Company invests in various categories of Collateralized mortgage obligations ("CMOs"), including CMOs that are not agency-backed, that are subject to different degrees of risk from changes in interest rates and defaults. The principal risks inherent in holding CMOs are prepayment and extension risks related to significant decreases and increases in interest rates resulting in the

 
17
 


ING U.S., Inc.
Notes to the Condensed Consolidated Financial Statements (Unaudited)
(Dollar amounts in millions, unless otherwise stated)
 
 
 



prepayment of principal from the underlying mortgages, either earlier or later than originally anticipated. As of June 30, 2013 and December 31, 2012, approximately 31.5% and 33.1%, respectively, of the Company’s CMO holdings, such as interest-only or principal-only strips were invested in those types of CMOs which are subject to more prepayment and extension risk than traditional CMOs.

Repurchase Agreements

The Company engages in dollar repurchase agreements with mortgage-backed securities ("dollar rolls") and repurchase agreements with other collateral types to increase its return on investments and improve liquidity. Such arrangements meet the requirements to be accounted for as financing arrangements. As of June 30, 2013 and December 31, 2012, the Company did not have any securities pledged in dollar rolls and repurchase agreement transactions. The Company also enters into reverse repurchase agreements. These transactions involve a purchase of securities and an agreement to sell substantially the same securities as those purchased. As of June 30, 2013 and December 31, 2012, the Company did not have any securities pledged under reverse repurchase agreements.

Securities Lending

The Company engages in securities lending whereby certain domestic securities from its portfolio are loaned to other institutions for short periods of time. As of June 30, 2013 and December 31, 2012, the fair value of loaned securities was $363.3 and $601.8, respectively, and is included in Securities pledged on the Condensed Consolidated Balance Sheets. As of June 30, 2013 and December 31, 2012, collateral retained by the lending agent and invested in liquid assets on the Company's behalf was $376.5 and $619.5, respectively, and recorded in Short-term investments under securities loan agreement, including collateral delivered on the Condensed Consolidated Balance Sheets. As of June 30, 2013 and December 31, 2012, liabilities to return collateral of $376.5 and $619.5, respectively, were included in Payables under securities loan agreement, including collateral held on the Condensed Consolidated Balance Sheets.



























 
18
 


ING U.S., Inc.
Notes to the Condensed Consolidated Financial Statements (Unaudited)
(Dollar amounts in millions, unless otherwise stated)
 
 
 



Unrealized Capital Losses

Unrealized capital losses (including noncredit impairments), along with the fair value of fixed maturity securities, including securities pledged, by market sector and duration were as follows as of June 30, 2013:
 
Six Months or Less
Below Amortized Cost
 
More Than Six
Months and Twelve Months or Less
Below Amortized Cost
 
More Than Twelve
Months Below
Amortized Cost
 
Total
 
Fair Value
 
Unrealized Capital Losses
 
Fair Value
 
Unrealized Capital Losses
 
Fair Value
 
Unrealized Capital Losses
 
Fair Value
 
Unrealized Capital Losses
U.S. Treasuries
$
2,626.9

 
$
58.2

 
$
45.5

 
$
6.4

 
$
—

 
$
—

 
$
2,672.4

 
$
64.6

U.S. Government agencies and authorities
56.9

 
0.5

 
—

 
—

 
—

 
—

 
56.9

 
0.5

U.S. corporate, state and municipalities
8,739.5

 
457.8

 
723.2

 
82.7

 
195.4

 
25.8

 
9,658.1

 
566.3

Foreign
3,316.3

 
185.9

 
103.4

 
9.2

 
201.6

 
25.0

 
3,621.3

 
220.1

Residential mortgage-backed
1,807.4

 
39.2

 
195.9

 
7.7

 
384.8

 
48.8

 
2,388.1

 
95.7

Commercial mortgage-backed
—

 
—

 
3.6

 
—

 
40.9

 
3.6

 
44.5

 
3.6

Other asset-backed
257.0

 
1.7

 
14.9

 
0.1

 
423.2

 
50.7

 
695.1

 
52.5

Total
$
16,804.0

 
$
743.3

 
$
1,086.5

 
$
106.1

 
$
1,245.9

 
$
153.9

 
$
19,136.4

 
$
1,003.3



 
19
 


ING U.S., Inc.
Notes to the Condensed Consolidated Financial Statements (Unaudited)
(Dollar amounts in millions, unless otherwise stated)
 
 
 



Unrealized capital losses (including noncredit impairments), along with the fair value of fixed maturity securities, including securities pledged, by market sector and duration were as follows as of December 31, 2012:
 
Six Months or Less
Below Amortized Cost
 
More Than Six
Months and Twelve Months or Less
Below Amortized Cost
 
More Than Twelve
Months Below
Amortized Cost
 
Total
 
Fair Value
 
Unrealized Capital Losses
 
Fair Value
 
Unrealized Capital Losses
 
Fair Value
 
Unrealized Capital Losses
 
Fair Value
 
Unrealized Capital Losses
U.S. Treasuries
$
451.2

 
$
1.8

 
$
—

 
$
—

 
$
—

 
$
—

 
$
451.2

 
$
1.8

U.S. Government agencies and authorities
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

U.S. corporate, state and municipalities
1,333.4

 
19.2

 
116.5

 
3.0

 
231.2

 
26.6

 
1,681.1

 
48.8

Foreign
360.2

 
12.7

 
59.8

 
7.4

 
314.9

 
39.2

 
734.9

 
59.3

Residential mortgage-backed
369.3

 
6.4

 
42.0

 
2.1

 
585.1

 
78.2

 
996.4

 
86.7

Commercial mortgage-backed
22.0

 
0.2

 
15.3

 
1.7

 
44.4

 
4.2

 
81.7

 
6.1

Other asset-backed
70.2

 
—

 
7.0

 
1.2

 
609.2

 
88.8

 
686.4

 
90.0

Total
$
2,606.3

 
$
40.3

 
$
240.6

 
$
15.4

 
$
1,784.8

 
$
237.0

 
$
4,631.7

 
$
292.7


Of the unrealized capital losses aged more than twelve months, the average market value of the related fixed maturities was 89.3% and 88.3% of the average book value as of June 30, 2013 and December 31, 2012, respectively.

Unrealized capital losses (including noncredit impairments) in fixed maturities, including securities pledged, for instances in which fair value declined below amortized cost by greater than or less than 20% for consecutive months as indicated in the tables below, were as follows as of the dates indicated:
 
Amortized Cost
 
Unrealized Capital Losses
 
Number of Securities
 
< 20%
 
> 20%
 
< 20%
 
> 20%
 
< 20%
 
> 20%
June 30, 2013
 
 
 
 
 
 
 
 
 
 
 
Six months or less below amortized cost
$
17,670.9

 
$
142.0

 
$
756.1

 
$
35.3

 
1,180

 
27

More than six months and twelve months or less below amortized cost
1,523.5

 
16.1

 
135.8

 
3.7

 
178

 
8

More than twelve months below amortized cost
659.9

 
127.3

 
37.9

 
34.5

 
226

 
35

Total
$
19,854.3

 
$
285.4

 
$
929.8

 
$
73.5

 
1,584

 
70

 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2012
 
 
 
 
 
 
 
 
 
 
 
Six months or less below amortized cost
$
3,154.6

 
$
42.1

 
$
95.2

 
$
11.4

 
308

 
21

More than six months and twelve months or less below amortized cost
363.3

 
30.2

 
19.5

 
10.3

 
83

 
9

More than twelve months below amortized cost
940.1

 
394.1

 
35.9

 
120.4

 
221

 
95

Total
$
4,458.0

 
$
466.4

 
$
150.6

 
$
142.1

 
612

 
125



 
20
 


ING U.S., Inc.
Notes to the Condensed Consolidated Financial Statements (Unaudited)
(Dollar amounts in millions, unless otherwise stated)
 
 
 



Unrealized capital losses (including noncredit impairments) in fixed maturities, including securities pledged, by market sector for instances in which fair value declined below amortized cost by greater than or less than 20% were as follows as of the dates indicated:
 
Amortized Cost
 
Unrealized Capital Losses
 
Number of Securities
 
< 20%
 
> 20%
 
< 20%
 
> 20%
 
< 20%
 
> 20%
June 30, 2013
 
 
 
 
 
 
 
 
 
 
 
U.S. Treasuries
$
2,737.0

 
$
—

 
$
64.6

 
$
—

 
20

 
—

U.S. Government agencies and authorities
57.4

 
—

 
0.5

 
—

 
2

 
—

U.S. corporate, state and municipalities
10,150.0

 
74.4

 
547.6

 
18.7

 
655

 
3

Foreign
3,763.3

 
78.1

 
201.4

 
18.7

 
287

 
8

Residential mortgage-backed
2,409.2

 
74.6

 
75.2

 
20.5

 
492

 
46

Commercial mortgage-backed
48.1

 
—

 
3.6

 
—

 
8

 
—

Other asset-backed
689.3

 
58.3

 
36.9

 
15.6

 
120

 
13

Total
$
19,854.3

 
$
285.4

 
$
929.8

 
$
73.5

 
1,584

 
70

 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2012
 
 
 
 
 
 
 
 
 
 
 
U.S. Treasuries
$
453.0