Segment Information

3 Months Ended

Mar. 31, 2012

Notes to Financial Statements [Abstract]

Segment Information

13. 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. See Note 22 of our 2011 Form 10-K for a brief description of these segments and Other Operations.

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 Three
			Months Ended
			March 31,
			2012		2011
Revenues
Operating revenues:
	Annuities		$	731	$	733
	Retirement Plan Services			252		263
	Life Insurance			1,232		1,146
	Group Protection			504		478
	Other Operations			107		118
Excluded realized gain (loss), pre-tax				(114)		(21)
Amortization of deferred gain arising from reserve
	changes on business sold through reinsurance, pre-tax			1		1
Amortization of DFEL associated with
	benefit ratio unlocking, pre-tax			1		-
		Total revenues	$	2,714	$	2,718

				For the Three
				Months Ended
				March 31,
				2012		2011
Net Income (Loss)
Income (loss) from operations:
	Annuities			$	137	$	144
	Retirement Plan Services				35		48
	Life Insurance				142		142
	Group Protection				16		24
	Other Operations				(34)		(35)
Excluded realized gain (loss), after-tax					(73)		(14)
Benefit ratio unlocking, after-tax					23		5
		Income (loss) from continuing operations, after-tax			246		314
		Income (loss) from discontinued operations, after-tax			(1)		-
			Net income (loss)	$	245	$	314