Phoenix Says It Will Not Meet Deadline for Restatements, Annual Report

by Categorized: Corporate finance, Insurance Date:

An already choppy recovery at The Phoenix Cos. has suffered a setback as the Hartford company said it will not file an annual report on time and will not meet the timetable it set last fall to restate financial statements from 2009 through the middle of 2012.

Phoenix said on Nov. 8 that it would finish the restatements prior to the deadline for its 2012 annual report, which normally would mean this month.  Late Friday, the company said it will have an update by April 30, but it did not promise a new date for the restatements or the annual report.

“We are making substantial progress in completing the restatement and closing the third and fourth quarters of 2012, but even with a significant level of dedicated resources, the scope and breadth of the work involved is much more time consuming than we originally anticipated,” said James D. Wehr, chief executive officer, in a written release.

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Phoenix CEO James D. Wehr. Courant file photo

Shares of Phoenix were down 23 cents to $$28.72 in late morning trading on the New York Stock Exchange. Shares had drifted downward for most of 2012 from a high above $50 to $21.58 in late November, before stabilizing.

In its announcement Monday, Phoenix offered some financial updates.  Annuity deposits were $193.2 million for the fourth quarter of 2012 and $830 million for the full year. Annuity funds under management were $5 billion at the end of 2012, after net annuity flows (deposits less surrenders) of $62 million for the fourth quarter and $294.6 million for full year.

Phoenix Life Insurance Co., the main subsidiary, had $113 billion of coverage in place and a surplus and reserve of $922.5 million on Dec. 31, up from $846 million a year earlier.

The restatements at Phoenix are intended “to correct certain errors relating to the classification of items on the consolidated statement of cash flows in the prior periods,” the company said Monday.  The company said it “also has identified additional errors affecting prior periods,” but said it estimated the impact of corrections to shareholders’ equity as of June 30, 2012 would be less than 1 percent of the previously reported amount.

The 162-year-old life insurer suffered a massive stock collapse in late 2008 and early 2009, after multiple ratings downgrades and the loss of its main distribution partner, State Farm. Wehr took over as CEO from Dona Young in April of that year.

Last August, Phoenix executed a 1-for-20 reverse stock split.

The company has not yet scheduled an annual shareholders meeting for 2013. “Phoenix continues to assess its disclosure controls and procedures and internal control over financial reporting, and believes it has identified multiple material weaknesses,” the company said Monday.

 

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4 thoughts on “Phoenix Says It Will Not Meet Deadline for Restatements, Annual Report

  1. Richard Piccinini

    I spent 30 years employed by Phoenix. ( 1974 – 2004)
    The way I see it this news is the last dance, I mean tap dance as they fall off the stage. Its a shame for the policyholders who in the 70’s and 80’s bought some very good products from Phoenix only to have the contracts blow up due to mismanagement and the complete loss off their agent sales force in 2004.When Phoenix hits rock bottom and are taken over by the insurance commissioner their policyholders need to stay the course until another insurer buys the block of business.
    What a shame there was no oversight of the last 3 company Presidents to prevent this downfall.

  2. pete

    The downfall of this once great company began as soon as it was demutualized. Once that happened the greedy CEOs – and there have been a number of them – only worried about lining their pockets. This company will be gone within a year. Bankrupt or sold.

  3. Gene

    Its easy to place blame.
    As the comment above suggests, stay the course and all will be resolved.

Comments are closed.