Segment Information

12 Months Ended

Dec. 31, 2011

Notes to Financial Statements [Abstract]

Segment Information

22. Segment Information

We provide products and services and report results through our Annuities, Retirement Plan Services, Life Insurance and Group Protection segments. We also have Other Operations, which includes the financial data for operations that are not directly related to the business segments. Our reporting segments reflect the manner by which our chief operating decision makers view and manage the business. The following is a brief description of these segments and Other Operations.

The Annuities segment provides tax-deferred investment growth and lifetime income opportunities for its clients by offering individual fixed annuities, including indexed annuities and variable annuities. The Retirement Plan Services segment provides employer-sponsored variable and fixed annuities, defined benefit, individual retirement accounts and mutual-fund based programs in the retirement plan marketplaces.

The Life Insurance segment offers wealth protection and transfer opportunities through term insurance, a linked-benefit product (which is a UL policy linked with riders that provide for long-term care costs) and both single and survivorship versions of UL and VUL, including corporate-owned UL and VUL insurance and bank-owned UL and VUL insurance products. The Group Protection segment offers group life, disability and dental insurance to employers, and its products are marketed primarily through a national distribution system of regional group offices. These offices develop business through employee benefit brokers, third-party administrators and other employee benefit firms.

Other Operations includes investments related to the excess capital in our insurance subsidiaries; investments in media properties and other corporate investments; benefit plan net liability; the unamortized deferred gain on indemnity reinsurance related to the sale of reinsurance; the results of certain disability income business;a closed-block of pension business, the majority of which was sold on a group annuity basis, and is currently in run-off; and debt costs.

Segment operating revenues and income (loss) from operations are internal measures used by our management and Board of Directors to evaluate and assess the results of our segments. Income (loss) from operations is GAAP net income excluding the after-tax effects of the following items, as applicable:

• Realized gains and losses associated with the following (“excluded realized gain (loss)”):

• Sale or disposal of securities;
• Impairments of securities;
• Change in the fair value of derivative instruments, embedded derivatives within certain reinsurance arrangements and our trading securities;
• Change in the fair value of the derivatives we own to hedge our GDB riders within our variable annuities;
• Change in the GLB embedded derivative reserves, net of the change in the fair value of the derivatives we own to hedge the changes in the embedded derivative reserves; and
• Changes in the fair value of the embedded derivative liabilities related to index call options we may purchase in the future to hedge contract holder index allocations applicable to future reset periods for our indexed annuity products accounted for under the Derivatives and Hedging and the Fair Value Measurements and Disclosures Topics of the FASB ASC.

• Change in reserves accounted for under the Financial Services – Insurance – Claim Costs and Liabilities for Future Policy Benefits Subtopic of the FASB ASC resulting from benefit ratio unlocking on our GDB and GLB riders (“benefit ratio unlocking”);
• Income (loss) from the initial adoption of new accounting standards;
• Income (loss) from reserve changes (net of related amortization) on business sold through reinsurance;
• Gain (loss) on early extinguishment of debt;
• Losses from the impairment of intangible assets; and
• Income (loss) from discontinued operations.

Operating revenues represent GAAP revenues excluding the pre-tax effects of the following items, as applicable:

• Excluded realized gain (loss);
• Amortization of DFEL arising from changes in GDB and GLB benefit ratio unlocking;
• Amortization of deferred gains arising from the reserve changes on business sold through reinsurance; and
• Revenue adjustments from the initial adoption of new accounting standards.

We use our prevailing corporate federal income tax rate of 35% while taking into account any permanent differences for events recognized differently in our financial statements and federal income tax returns when reconciling our non-GAAP measures to the most comparable GAAP measure. Operating revenues and income (loss) from operations do not replace revenues and net income as the GAAP measures of our consolidated results of operations.

Segment information (in millions) was as follows:

			For the Years Ended December 31,
			2011		2010		2009
Revenues
Operating revenues:
	Annuities		$	2,865	$	2,654	$	2,301
	Retirement Plan Services			1,017		988		926
	Life Insurance			4,739		4,590		4,295
	Group Protection			1,939		1,831		1,713
	Other Operations			461		487		465
Excluded realized gain (loss), pre-tax				(388)		(146)		(1,200)
Amortization of deferred gain arising from reserve
	changes on business sold through reinsurance, pre-tax			3		3		3
Amortization of DFEL associated with
	benefit ratio unlocking, pre-tax			-		-		(4)
		Total revenues	$	10,636	$	10,407	$	8,499

				For the Years Ended December 31,
				2011		2010		2009
Net Income (Loss)
Income (loss) from operations:
	Annuities			$	592	$	484	$	353
	Retirement Plan Services				167		154		133
	Life Insurance				604		513		569
	Group Protection				101		72		124
	Other Operations				(146)		(186)		(237)
Excluded realized gain (loss), after-tax					(252)		(95)		(780)
Gain (loss) on early extinguishment of debt, after-tax					(5)		(3)		42
Income (expense) from reserve changes (net of related
	amortization) on business sold through reinsurance, after-tax				2		2		2
Impairment of intangibles, after-tax					(747)		-		(710)
Benefit ratio unlocking, after-tax					(14)		10		89
		Income (loss) from continuing operations, after-tax			302		951		(415)
		Income (loss) from discontinued operations, after-tax			(8)		29		(70)
			Net income (loss)	$	294	$	980	$	(485)

		For the Years Ended December 31,
		2011		2010		2009
Net Investment Income
Annuities		$	1,106	$	1,119	$	1,037
Retirement Plan Services			793		769		732
Life Insurance			2,294		2,186		1,975
Group Protection			152		141		127
Other Operations			307		326		307
	Total net investment income	$	4,652	$	4,541	$	4,178

		For the Years Ended December 31,
		2011		2010		2009
Amortization of DAC and VOBA, Net of Interest
Annuities		$	405	$	421	$	360
Retirement Plan Services			60		79		75
Life Insurance			539		538		571
Group Protection			46		46		47
	Total amortization of DAC and VOBA, net of interest	$	1,050	$	1,084	$	1,053

			For the Years Ended December 31,
			2011		2010		2009
Federal Income Tax Expense (Benefit)
Annuities			$	114	$	102	$	41
Retirement Plan Services				67		60		50
Life Insurance				283		236		245
Group Protection				54		38		67
Other Operations				(76)		(107)		(143)
Excluded realized gain (loss)				(136)		(51)		(420)
Gain (loss) on early extinguishment of debt				(3)		(2)		23
Reserve changes (net of related amortization)
	on business sold through reinsurance			1		1		1
Impairment of intangibles				-		-		(16)
Benefit ratio unlocking				(7)		6		46
		Total federal income tax expense (benefit)	$	297	$	283	$	(106)

		As of December 31,
		2011		2010
Assets
Annuities		$	97,272	$	91,435
Retirement Plan Services			28,774		28,562
Life Insurance			60,544		56,713
Group Protection			3,458		3,254
Other Operations			12,858		13,860
	Total assets	$	202,906	$	193,824