Segment Information

12 Months Ended

Dec. 31, 2014

Segment Information [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 fixed (including indexed) and variable annuities.

The Retirement Plan Services segment provides employer-sponsored defined benefit and individual retirement accounts, as well as individual and group variable annuities, group fixed annuities and mutual-fund based programs in the retirement plan marketplace.

The Life Insurance segment focuses in the creation and protection of wealth through life insurance products, including term insurance, a linked-benefit product (which is a UL policy linked with riders that provide for long-term care costs), IUL 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 principally group non-medical insurance products, including term life, universal life, disability, dental, vision, accident and critical illness insurance to the employer market place through various forms of contributory and non-contributory plans.  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 (see Note 3 for more information) 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; our run-off Institutional Pension business, the majority of which was sold on a group annuity basis; 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)”):

§ Sales or disposals and impairments of securities;  

§ Changes in the fair value of derivatives, embedded derivatives within certain reinsurance arrangements and trading securities;

§ Changes in the fair value of the derivatives we own to hedge our GDB riders within our variable annuities;

§ Changes in the fair value of the embedded derivatives of our GLB riders accounted for at fair value, net of the change in the fair value of the derivatives we own to hedge them; 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 at fair value;

· Changes in reserves resulting from benefit ratio unlocking on our GDB and GLB riders;

· Income (loss) from reserve changes, net of related amortization, on business sold through reinsurance;

· Gains (losses) on early extinguishment of debt;

· Losses from the impairment of intangible assets;

· Income (loss) from discontinued operations; and

· Income (loss) from the initial adoption of new accounting standards.

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

· Excluded realized gain (loss);

· Revenue adjustments from the initial adoption of new accounting standards;

· Amortization of DFEL arising from changes in GDB and GLB benefit ratio unlocking; and

· Amortization of deferred gains arising from reserve changes on business sold through reinsurance.

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,
	2014			2013			2012
Revenues
Operating revenues:
Annuities	$	3,746		$	3,321		$	2,975
Retirement Plan Services		1,090			1,071			1,024
Life Insurance		6,003			5,170			5,056
Group Protection		2,445			2,260			2,091
Other Operations		432			417			423
Excluded realized gain (loss), pre-tax		(165	)		(274	)		(39	)
Amortization of deferred gain arising from reserve changes on business
sold through reinsurance, pre-tax		3			3			4
Amortization of DFEL associated with benefit ratio unlocking, pre-tax		-			1			1
Total revenues	$	13,554		$	11,969		$	11,535

	For the Years Ended December 31,
	2014			2013			2012
Net Income (Loss)
Income (loss) from operations:
Annuities	$	925		$	750		$	595
Retirement Plan Services		160			141			130
Life Insurance		612			544			574
Group Protection		23			71			72
Other Operations		(109	)		(122	)		(87	)
Excluded realized gain (loss), after-tax		(106	)		(178	)		(25	)
Gain (loss) on early extinguishment of debt, after-tax		-			-			(3	)
Income (loss) from reserve changes (net of related
amortization) on business sold through reinsurance, after-tax		2			2			3
Impairment of intangibles, after-tax		-			-			2
Benefit ratio unlocking, after-tax		7			36			25
Income (loss) from continuing operations, after-tax		1,514			1,244			1,286
Income (loss) from discontinued operations, after-tax		1			-			27
Net income (loss)	$	1,515		$	1,244		$	1,313

	For the Years Ended December 31,
	2014		2013		2012
Net Investment Income
Annuities	$	1,033	$	1,044	$	1,082
Retirement Plan Services		831		827		799
Life Insurance		2,529		2,452		2,396
Group Protection		180		165		162
Other Operations		286		266		259
Total net investment income	$	4,859	$	4,754	$	4,698

	For the Years Ended December 31,
	2014		2013		2012
Amortization of DAC and VOBA, Net of Interest
Annuities	$	362	$	383	$	321
Retirement Plan Services		37		48		42
Life Insurance		655		447		614
Group Protection		57		53		49
Total amortization of DAC and VOBA, net of interest	$	1,111	$	931	$	1,026

	For the Years Ended December 31,
	2014			2013			2012
Federal Income Tax Expense (Benefit)
Annuities	$	238		$	177		$	121
Retirement Plan Services		51			49			38
Life Insurance		295			268			264
Group Protection		12			38			39
Other Operations		(57	)		(71	)		(177	)
Excluded realized gain (loss)		(60	)		(95	)		(14	)
Gain (loss) on early extinguishment of debt		-			-			(2	)
Reserve changes (net of related amortization)
on business sold through reinsurance		1			1			1
Impairment of intangibles		-			-			(2	)
Benefit ratio unlocking		3			20			14
Total federal income tax expense (benefit)	$	483		$	387		$	282

	As of December 31,
	2014		2013
Assets
Annuities	$	130,316	$	120,267
Retirement Plan Services		33,678		32,369
Life Insurance		70,493		65,639
Group Protection		4,238		3,865
Other Operations		14,652		14,805
Total assets	$	253,377	$	236,945