15. Segment Information

We provide products and services and report results through our Annuities, Retirement Plan Services, Life Insurance and Group Protection segments. As discussed in Note 3, we completed the acquisition of Liberty Life. Related results are included within the Group Protection segment. 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 21 of our 2017 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)”):

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 reflected within variable annuity net derivative results accounted for at fair value;

Changes in the fair value of the derivatives we own to hedge our GLB riders reflected within variable annuity net derivative results;

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; and

Changes in the fair value of equity securities;

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;

Acquisition and integration costs related to mergers and acquisitions; and

Income (loss) from the initial adoption of new accounting standards, regulations, and policy changes including the net impact from the Tax Cuts and Jobs Act.

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 rates of 21% and 35%, where applicable, 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						For the Six
	Months Ended						Months Ended
	June 30,						June 30,
	2018			2017			2018			2017
Revenues
Operating revenues:
Annuities	$	1,106		$	1,076		$	2,180		$	2,138
Retirement Plan Services		292			290			584			571
Life Insurance		1,680			1,655			3,340			3,260
Group Protection		937			541			1,490			1,082
Other Operations		58			67			125			155
Excluded realized gain (loss), pre-tax		(53	)		(52	)		(89	)		(132	)
Amortization of deferred gain arising from reserve changes
on business sold through reinsurance, pre-tax		-			-			-			1
Amortization of DFEL associated with benefit ratio unlocking, pre-tax		-			-			(1	)		2
Total revenues	$	4,020		$	3,577		$	7,629		$	7,077



	For the Three						For the Six
	Months Ended						Months Ended
	June 30,						June 30,
	2018			2017			2018			2017
Net Income (Loss)
Income (loss) from operations:
Annuities	$	275		$	251		$	542		$	532
Retirement Plan Services		43			37			86			74
Life Insurance		150			133			294			263
Group Protection		45			35			74			42
Other Operations		(59	)		(37	)		(101	)		(51	)
Excluded realized gain (loss), after-tax		(41	)		(34	)		(69	)		(85	)
Gain (loss) on early extinguishment of debt, after-tax		-			-			(19	)		-
Benefit ratio unlocking, after-tax		7			26			(3	)		71
Net impact from the Tax Cuts and Jobs Act		-			-			(13	)		-
Acquisition and integration costs related to mergers
and acquisitions, after-tax		(35	)		-			(39	)		-
Net income (loss)	$	385		$	411		$	752		$	846

Revenue from Contracts with Customers

As discussed in Note 2, we adopted ASU 2014-09, Revenue from Contracts with Customers, as of January 1, 2018, that applies primarily to commissions and advisory fees earned by our broker dealer operation. The following table illustrates the revenue recognized from contracts with customers reported within fee income and other revenues on our Consolidated Statements of Comprehensive Income (Loss) and timing of revenue recognition by segment (in millions):



	For the Three Months Ended June 30, 2018
			Retirement
			Plan		Life		Group		Other
	Annuities		Services		Insurance		Protection		Operations		Total
Revenue from Contracts with Customers
Fee income	$	133	$	42	$	6	$	-	$	-	$	181
Other revenues		119		5		2		27		-		153
Total revenue from contracts
with customers	$	252	$	47	$	8	$	27	$	-	$	334

Timing of Revenue Recognition
Satisfaction of performance obligation:
Transferred at a point in time	$	18	$	2	$	2	$	-	$	-	$	22
Transferred over time		234		45		6		27		-		312
Total revenue from contracts
with customers	$	252	$	47	$	8	$	27	$	-	$	334


	For the Six Months Ended June 30, 2018
			Retirement
			Plan		Life		Group		Other
	Annuities		Services		Insurance		Protection		Operations		Total
Revenue from Contracts with Customers
Fee income	$	266	$	84	$	11	$	-	$	-	$	361
Other revenues		239		9		5		32		-		285
Total revenue from contracts
with customers	$	505	$	93	$	16	$	32	$	-	$	646

Timing of Revenue Recognition
Satisfaction of performance obligation:
Transferred at a point in time	$	36	$	3	$	4	$	-	$	-	$	43
Transferred over time		469		90		12		32		-		603
Total revenue from contracts
with customers	$	505	$	93	$	16	$	32	$	-	$	646

Revenue recognized from contracts with customers included in fee income consists primarily of wholesaling-related 12b-1 fees and net investment advisory fees. The 12b-1 fees are received from separate account fund sponsors as compensation for servicing the underlying mutual funds. The net investment advisory fees are related to asset management of certain separate account funds. Such revenues are recorded based on a contractual percentage of the market value of mutual fund assets over the period shares are owned by customers, and on a contractual percentage of the customer’s managed assets over the period advisory services are provided, respectively.

Revenue recognized from contracts with customers included in other revenues primarily relates to our retail sales network and consists of commission revenue for the sale of non-affiliated securities recorded on a trade-date basis and advisory fee income. Advisory fee income is asset-based revenues recorded as earned based on a contractual percentage of customer account values.