Voya Financial, Inc. · NYSE:VOYA

Voya Financial — Q4 2017 Earnings Presentation

29 slides from Voya Financial's earnings presentation, Feb 14, 2018

  1. Slide 1: Voya Financial Fourth Quarter 2017 Investor Presentation

    Voya Financial Fourth Quarter 2017 Investor Presentation February 14, 2018

  2. Slide 2: Forward-Looking and Other Cautionary Statements

    Forward-Looking and Other Cautionary Statements This presentation and the remarks made orally contain 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 i

  3. Slide 3: Agenda

    Agenda 1. Key Themes and Highlights  Rod Martin, Chairman and Chief Executive Officer 2. Strategic Initiatives and Business Segment Performance  Alain Karaoglan, Chief Operating Officer 3. Business Operating and Balance Sheet Metrics  Mike Smith, Chief Financial Officer 3

  4. Slide 4: Key Themes

    Key Themes  Growth in each segment:  Retirement AUM up 14% Achieved Strong  Investment Management external clients AUM up 11% Growth and  Employee Benefits in-force premium up 8% Returns in 2017  Achieved enterprise ROE target ahead of schedule, including each business segment at or above targe

  5. Slide 5: Multiple Impacts from Tax Reform

    Multiple Impacts from Tax Reform Higher Adjusted Operating  Adjusted operating earnings tax rate range of 18%–20% for 2018 Earnings  Net present value of deferred tax asset estimated at $1.4 billion Tax Assets Still  Total GAAP shareholders' equity (excluding AOCI) lowered by Valuable $679 millio

  6. Slide 6: Fourth Quarter and Full Year 2017 Financial Highlights

    Fourth Quarter and Full Year 2017 Financial Highlights Fourth Quarter 2017 Full Year 2017 $159 million or $0.87 per diluted share $359 million or $1.92 per diluted share • Includes: • Includes: After-tax Adjusted • $0.06 of prepayment fees and • $(1.09) of deferred acquisition Operating Earnings1 al

  7. Slide 7: Recent Enterprise Accomplishments

    Recent Enterprise Accomplishments Named one of Fortune’s World’s Most Admired Companies in the Securities and Asset Management Industry Fifth consecutive year as one of the Joined first industry-neutral World’s Most Ethical Companies Bloomberg Gender-Equality Index 7

  8. Slide 8: Agenda

    Agenda 1. Key Themes and Highlights  Rod Martin, Chairman and Chief Executive Officer 2. Strategic Initiatives and Business Segment Growth  Alain Karaoglan, Chief Operating Officer 3. Business Operating and Balance Sheet Metrics  Mike Smith, Chief Financial Officer 8

  9. Slide 9: Focus on Completing 2018 Priorities

    Focus on Completing 2018 Priorities CBVA & Annuities Cost Savings Capital Initiatives Growth Transaction  Carve out businesses to  Generate $110 - $130  Complete $1 billion of  Increase number of firms be divested from Voya million of annual cost share repurchases1 by and advisors selling saving

  10. Slide 10: Retirement – Leading Franchise Driving Long-Term Growth and Returns

    Retirement – Leading Franchise Driving Long-Term Growth and Returns Adjusted ROC1 Initiatives 10.3%  Focus on tools and solutions that improve customer retirement outcomes 8.8%  Streamline and simplify process to enhance client experience and realize operational efficiency  Accelerate growth thro

  11. Slide 11: Investment Management – Continued Strong Performance Across Broad Capabilities

    Investment Management – Continued Strong Performance Across Broad Capabilities Adjusted Operating Margin1,2 Initiatives 33.9%  Broaden client choices by increasing number of consultant recommended strategies 28.3%  Support high growth market segments with additional 28.2% sales resources 26.9%  I

  12. Slide 12: Employee Benefits – High Return and Capital Generation Business

    Employee Benefits – High Return and Capital Generation Business Adjusted ROC1 Initiatives  Improve block performance in Stop Loss to ensure 24.4% profitable growth 23.3%  Improve ease of doing business through digital and analytical tools  Solve diverse and expanding client needs with Voluntary p

  13. Slide 13: Individual Life – Repositioning Through In-Force Actions

    Individual Life – Repositioning Through In-Force Actions Adjusted ROC1 Initiatives 11.2%  Separate Individual Life from Annuities business  Early stage of Individual Life strategic review  Continue to lower costs by simplifying operations 6.6% Examples of Execution  Increased ROC meaningfully: 

  14. Slide 14: Agenda

    Agenda 1. Key Themes and Highlights  Rod Martin, Chairman and Chief Executive Officer 2. Strategic Initiatives and Business Segment Performance  Alain Karaoglan, Chief Operating Officer 3. Business Operating and Balance Sheet Metrics  Mike Smith, Chief Financial Officer 14

  15. Slide 15: Adjusted Operating EPS Considerations

    Adjusted Operating EPS Considerations 4Q’17 Financial Results Reported 4Q’17 Adjusted Operating EPS1 $0.87 Includes:  Prepayment fees and alternative income above long-term expectations $0.06 1Q’18 Considerations2 Potential Beneficial Items:  Lower tax rate3 $0.15  Lower losses in Corporate $0.04

  16. Slide 16: 4Q'17 Business Segment Financial Considerations

    4Q’17 Business Segment Financial Considerations Retirement Investment Management Employee Benefits Individual Life Corporate Prepayment fees and alternative  $12 million  $2 million  $1 million  $3 million income above/(below) long-term expectations (pre-tax, pre-DAC) Strategic Investment Spend

  17. Slide 17: Tax Benefits Remain a Key Source of Value

    Tax Benefits Remain a Key Source of Value Income Statement and Balance Sheet Metrics  TVA of $447 million related to Federal NOLs as of 12/31/17  Pro forma tax rate of 18%-20% NPV Analysis ($ million) Value of Tax Assets1,2,3 Nominal DTA Value NPV5 as of 12/31/17 Federal Operating Loss Carry Forwa

  18. Slide 18: Estimated Combined RBC Ratio and Leverage Ratio Better Than Target

    Estimated Combined RBC Ratio1 and Leverage Ratio Better Than Target Statutory Total Adjusted Capital ($ billion) and Estimated Adjusted Debt to Total Capital Ratio ex. Minority Interest Combined RBC Ratio1 and AOCI2 $7.1 $6.8 $6.5 $6.6 $6.5 30.5% 29.9% Target 30% 29.5% Debt-to- Capital Ratio 526% 49

  19. Slide 19: Significant Excess Capital Available

    Significant Excess Capital Available Holding Company Liquidity1 Excess Capital Share Repurchases ($ million) ($ million) ($ million) $1,023 $1,011 $738 Share $500 Repurchases $454 New Repurchase Estimated $484 Statutory Authorization Surplus in Remaining Excess of Capacity on 425% RBC Existing Level

  20. Slide 20: Achieved Strong Growth and Returns; Capital Position Strong; Risk Reduction

    Helping Americans Get Ready to Retire Better 1 Achieved Strong Growth and Returns in 2017 2 Capital Position is Strong 3 Significant Risk Reduction via Sale of CBVA & Annuities 20

  21. Slide 21: Appendix

    Appendix ee VOYA. PLAN | INVEST | PROTECT 21 FINANCIAL

  22. Slide 22: Retirement, Investment Management, and Employee Benefits Met All 2017 Growth Targets

    Retirement, Investment Management, and Employee Benefits Met All 2017 Growth Targets 2017 Growth Metrics 2017 Results 2018 Growth Metrics Record Deposits • FY’17: +24% y-o-y  Small/Mid Corporate: Deposits +5% to+10%  Small/Mid Corporate: Deposits +5% to +10% • 4Q’17: +8% y-o-y Retirement Record De

  23. Slide 23: Corporate Markets Inflows Offset by Tax-Exempt Markets and Stable Value Outflows

    Corporate Markets Inflows Offset by Tax-Exempt Markets and Stable Value Outflows Retirement Net Flows1 ($ million) $1,500 $1,000 $166 $68 $358 $291 $500 $71 $940 $845 $567 $441 $161 $0 $(247) $(187) $(83) $(633) $(2,132) $(449) ($500) $(2,132) ($1,000) 4Q'16 1Q'17 2Q'17 3Q'17 4Q'17 Corporate Markets

  24. Slide 24: Investment Management Net Inflows in 4Q'17 Driven by Institutional Sales

    Investment Management Net Inflows in 4Q’17 Driven by Institutional Sales Investment Management Third-Party Net Flows1 ($ billion) 4Q’16 1Q’17 2Q’17 3Q’17 4Q’17 $1.2 $2.4 $1.6 $1.2 $0.8 $0.6 $(0.1) ($0.3) ($0.5) ($0.5) Investment Management $(0.9) $(1.4) $(0.7) $(0.9) $(1.4)2 VA Net Flows Total $0.6

  25. Slide 25: Employee Benefits Group Life Loss Ratio Favorable While Stop Loss Above Target

    Employee Benefits Group Life Loss Ratio was Favorable While Loss Ratio for Stop Loss Was Above Annual Target Loss Ratios (%) 90% 90% 85% 83.2% 85% 80% 80% 75% 75% 77.2% 76.1% 76.1% 75.6% 76.0% 73.4% 74.4% 70% 70% 70.5% 65% 65% 60% 60% 4Q'16 1Q'17 2Q'17 3Q'17 4Q'17 FY'14 FY'15 FY'16 FY'17 90% 90% 85.

  26. Slide 26: Reconciliation of 4Q'17 Adjusted Operating Earnings to Net Income

    Reconciliation of 4Q’17 Adjusted Operating Earnings to Net Income ($ million; all figures are after-tax) $(27) $(35) $159 $(646) $(3,165) $(2,616) Net Income (Loss) Income from Other Tax-Related 1 Other 2 Net Realized Gains Adjusted Operating Available to Common Discontinued Operations Earnings Shar

  27. Slide 27: Seasonality of Financial Items

    Seasonality of Financial Items 9. 1Q 2Q 3Q 4Q  Corporate Markets tends to  Education Tax-Exempt Markets  Corporate Markets typically see have the highest recurring typically see lowest recurring highest transfer / single Retirement deposits deposits deposits  Withdrawals also tend to  Withdrawa

  28. Slide 28: Analyst Modeling Considerations

    Analyst Modeling Considerations  Long-term prepayment income expectation in 2018 (pre-tax, pre-DAC): $8 million for Retirement; $3 million for Prepayment Income and Individual Life Alternative Income  Approximately 9% annual long-term expected returns (pre-tax, pre-DAC) for alternative income  Hi

  29. Slide 29: FINANCIAL

    ® FINANCIAL FINANCIAL PLAN | INVEST | PROTECT 29

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