Voya Financial Announces First-Quarter 2017 Results

NEW YORK, May 3, 2017

• 1Q 2017 net loss available to common shareholders of $0.75 per diluted share¹, which reflects:
• A loss of $1.31 per diluted share, after-tax², in the Closed Block Variable Annuity (CBVA) segment - the CBVA segment, which is in run-off and not included in operating earnings, is supported by a hedge program that is primarily designed to mitigate the impacts of market movements on regulatory and rating agency capital resources, creating an accounting asymmetry with U.S. GAAP financial results.
• The 1Q 2017 CBVA loss was due to changes in the fair value of guaranteed benefit derivatives related to nonperformance risk, which the company considers a non-economic factor, and a loss associated with an enhanced surrender value offer to repurchase certain variable annuity contracts.
  
  
• 1Q 2017 operating earnings^2,3 of $0.81 per diluted share, after-tax, which includes:
• $0.04 per diluted share, after-tax, of positive deferred acquisition costs and value of business acquired ("DAC/VOBA") and other intangibles unlocking; and
• $0.03 per diluted share, after-tax and DAC/VOBA, of prepayment fees and alternative investment income, in aggregate, above the company's long-term expectations.
  
  
• 1Q 2017 segment results include:
• Retirement net flows of $610 million driven by Corporate markets;
• Investment Management net inflows of $262 million (excluding variable annuity outflows);
• Positive net flows in Annuities for fixed indexed annuities and investment-only products;
• Unfavorable mortality in Individual Life;
• Employee Benefits' Stop Loss and Group Life loss ratios slightly above the annual expected range; and
• CBVA hedge program continued to protect regulatory and rating agency capital.
  
  
• Total assets under management (AUM) of $294 billion; total AUM and administration of $505 billion as of March 31, 2017.
  
  
• 1Q 2017 share repurchases of $397 million (including $150 million share repurchase agreement that settled in 2Q 2017).
  
  
• Estimated combined risk-based capital (RBC) ratio of 526%⁴, which is above the company's target of 425%.
  
  
• Excess capital of $949 million⁵
  
  
• Debt-to-capital ratio, excluding accumulated other comprehensive income (AOCI), of 24.5%⁶
  
  
• Book value per share (excluding AOCI) of $56.23⁷

"Our first-quarter 2017 results demonstrate a very good start to the year as we continue to execute on our plans and make progress toward achieving our 2018 financial targets," said Rodney O. Martin, Jr., chairman and chief executive officer, Voya Financial.  "During the quarter, we once again generated positive net flows in Retirement, Investment Management and Annuities' fixed indexed and investment-only products.  Sales in Employee Benefits and Individual Life also increased compared with the first quarter of 2016.  Equally important, our hedge program once again effectively protected our CBVA capital.  We also further successfully reduced the size of and risk associated with the CBVA block this quarter, while ensuring we provide options and value to our customers.

"In addition, we repurchased $247 million of our common stock in the first quarter and we entered into an agreement to buyback an additional $150 million of shares," added Martin.  "We continue to take actions to achieve more profitable growth, better optimize capital, improve margins and create greater value for our customers and our shareholders."

Net Income Available to Common Shareholders
Voya Financial's net income available to common shareholders includes the effect of the company's CBVA hedge program - which focuses on protecting regulatory and rating agency capital from market movements, rather than minimizing GAAP earnings volatility - as well as net investment gains and losses, among other items.

1Q 2017 net loss available to common shareholders was $144 million or $0.75 per diluted share, compared with net income available to common shareholders of $192 million or $0.92 per diluted share in 1Q 2016.  The decline was primarily due to a $433 million decrease in CBVA income before income taxes.

Operating Earnings
Voya Financial's operating earnings include results from the company's Retirement, Investment Management, Annuities, Individual Life and Employee Benefits segments, as well as Corporate.