Segment Information

12 Months Ended

Dec. 31, 2012

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 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), indexed UL 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 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 InstitutionalPension 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 of securities;
• Impairments of securities;
• Changes in the fair value of derivatives, embedded derivatives within certain reinsurance arrangements and our 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 the 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,
			2012		2011		2010
Revenues
Operating revenues:
	Annuities		$	2,975	$	2,871	$	2,659
	Retirement Plan Services			1,024		1,017		988
	Life Insurance			5,053		4,740		4,590
	Group Protection			2,091		1,938		1,831
	Other Operations			423		461		487
Excluded realized gain (loss), pre-tax				(39)		(388)		(143)
Amortization of deferred gain arising from reserve changes on business
	sold through reinsurance, pre-tax			4		2		3
Amortization of DFEL associated with benefit ratio unlocking, pre-tax				1		-		-
		Total revenues	$	11,532	$	10,641	$	10,415

				For the Years Ended December 31,
				2012		2011		2010
Net Income (Loss)
Income (loss) from operations:
	Annuities			$	595	$	573	$	471
	Retirement Plan Services				130		163		151
	Life Insurance				574		559		453
	Group Protection				72		97		68
	Other Operations				(87)		(146)		(188)
Excluded realized gain (loss), after-tax					(25)		(252)		(93)
Gain (loss) on early extinguishment of debt, after-tax					(3)		(5)		(3)
Income (expense) from reserve changes (net of related
	amortization) on business sold through reinsurance, after-tax				3		2		3
Impairment of intangibles, after-tax					2		(747)		-
Benefit ratio unlocking, after-tax					25		(15)		11
		Income (loss) from continuing operations, after-tax			1,286		229		873
		Income (loss) from discontinued operations, after-tax			27		(8)		29
			Net income (loss)	$	1,313	$	221	$	902

		For the Years Ended December 31,
		2012		2011		2010
Net Investment Income
Annuities		$	1,082	$	1,106	$	1,119
Retirement Plan Services			799		792		769
Life Insurance			2,396		2,294		2,186
Group Protection			162		152		141
Other Operations			259		308		326
	Total net investment income	$	4,698	$	4,652	$	4,541

		For the Years Ended December 31,
		2012		2011		2010
Amortization of DAC and VOBA, Net of Interest
Annuities		$	321	$	351	$	360
Retirement Plan Services			42		33		54
Life Insurance			614		423		451
Group Protection			49		39		40
	Total amortization of DAC and VOBA, net of interest	$	1,026	$	846	$	905

			For the Years Ended December 31,
			2012		2011		2010
Federal Income Tax Expense (Benefit)
Annuities			$	121	$	104	$	97
Retirement Plan Services				38		63		58
Life Insurance				264		276		222
Group Protection				39		52		36
Other Operations				(177)		(77)		(105)
Excluded realized gain (loss)				(14)		(136)		(50)
Gain (loss) on early extinguishment of debt				(2)		(3)		(2)
Reserve changes (net of related amortization)
	on business sold through reinsurance			1		1		1
Impairment of intangibles				(2)		-		-
Benefit ratio unlocking				14		(6)		5
		Total federal income tax expense (benefit)	$	282	$	274	$	262

		As of December 31,
		2012		2011
Assets
Annuities		$	106,906	$	96,866
Retirement Plan Services			30,651		28,626
Life Insurance			64,115		59,711
Group Protection			3,733		3,429
Other Operations			13,464		12,859
	Total assets	$	218,869	$	201,491