BUSINESS SEGMENT INFORMATION

12 Months Ended

Dec. 31, 2017

Segment Reporting [Abstract]

Business Segment Information

BUSINESS SEGMENT INFORMATION

The Company has four reportable segments: Individual Retirement, Group Retirement, Investment Management and Research and Protection Solutions.

The Company changed its segment presentation in the fourth quarter 2017. The segment disclosures are based on the intention to provide the users of the financial statements with a view of the business from the Company’s perspective. As a result, the Company determined that it is more useful for a user of the financial statements to assess the historical performance on the basis which management currently evaluates the business. The reportable segments are based on the nature of the business activities, as they exist as of the initial filing date.

These segments reflect the manner by which the Company’s chief operating decision maker views and manages the business. A brief description of these segments follows:

• The Individual Retirement segment offers a diverse suite of variable annuity products which are primarily sold to affluent and high net worth individuals saving for retirement or seeking retirement income.

• The Group Retirement segment offers tax-deferred investment and retirement plans to be sponsored by educational entities, municipalities and not-for-profit entities as well as small and medium-sized businesses.

• The Investment Management and Research segment provides diversified investment management, research and related solutions globally to a broad range of clients through three main client channels- Institutional, Retail and Private Wealth Management-and distributes its institutional research products and solutions through Bernstein Research Services.

• The Protection Solutions segment includes our life insurance and group employee benefits businesses. Our life insurance business offers a variety of variable universal life, universal life and term life products to help affluent and high net worth individuals, as well as small and medium-sized business owners, with their wealth protection, wealth transfer and corporate needs. Our group employee benefits business offers a suite of dental, vision, life, and short- and long-term disability and other insurance products to small and medium-size businesses across the United States.

Measurement

Operating earnings (loss) is the financial measure which primarily focuses on the Company’s segments’ results of operations as well as the underlying profitability of the Company’s core business. By excluding items that can be distortive and unpredictable such as investment gains (losses) and investment income (loss) from derivative instruments, the Company believes operating earnings (loss) by segment enhances the understanding of the Company’s underlying drivers of profitability and trends in the Company’s segments. Operating earnings is calculated by adjusting each segment’s Net income (loss) attributable to AXA Equitable for the following items:

• Adjustments related to GMxB features include changes in the fair value of the derivatives we use to hedge our GMxB features within our variable annuity products, the effect of benefit ratio unlock adjustments and changes in the fair value of the embedded derivatives of our GMxB riders reflected within variable annuity products net derivative result;

• Investment (gains) losses, which includes other-than-temporary impairments of securities, sales or disposals of securities/investments, realized capital gains/losses, and valuation allowances;

• Derivative (gains) losses from certain derivative instruments, which includes net derivative (gains) losses, excluding derivative instruments used to hedge risks associated with interest margins on interest sensitive life and annuity contracts, replicate credit exposure of fixed maturity securities, replicate a dollar-denominated fixed-coupon cash bonds, Separate Account fee hedges, and freestanding and embedded derivatives associated with products with GMxB features;

• Net actuarial (gains) losses, which includes actuarial gains and losses as a result of differences between actual and expected experience on pension plan assets or projected benefit obligation during a given period related to pension and other postretirement benefit obligations;

• Other adjustments including restructuring costs related to severance, lease write-offs related to non-recurring restructuring activities and write-downs of goodwill; and

• Income tax expense (benefit) related to above adjustments and non-recurring tax items.

All of the Company’s premiums, UL and investment-type product policy fees and other revenues originated in the United States. Income (loss) from operations, before income taxes included $139 million, $109 million and $111 million generated outside of the United States in 2017, 2016 and 2015, respectively, primarily attributable to our Investment Management and Research Segment.

Revenues derived from any customer did not exceed 10% of revenues for the years ended December 31, 2017, 2016 and 2015.

The table below presents operating earnings (loss) by segment and Corporate and Other and a reconciliation to Net income (loss) attributable to AXA Equitable for the years ended December 31, 2017, 2016 and 2015, respectively:

	Year Ended December 31,
	2017			2016			2015
	(in millions)
Net income (loss) attributable to AXA Equitable	$	2,860		$	210		$	662
Adjustments related to:
GMxB features	282			1,511			818
Investment (gains) losses	125			(16		)	20
Investment income (loss) from certain derivative instruments	18			6			(104		)
Net actuarial (gains) losses related to pension and other postretirement benefit obligations	132			135			137
Other adjustments	49			15			(11		)
Income tax expense (benefit) related to above adjustments	(183		)	(566		)	(279		)
Non-recurring tax items	(1,538		)	22			(78		)
Non-GAAP Operating Earnings	$	1,745		$	1,317		$	1,165
Operating earnings (loss) by segment:
Individual Retirement	$	1,230		$	1,026		$	911
Group Retirement	287			173			166
Investment Management and Research	139			108			136
Protection Solutions	210			105			108
Corporate and Other(1)	(121		)	(95		)	(156		)

(1) Includes interest expense of $23 million, $13 million and $19 million, in 2017, 2016 and 2015, respectively.

Segment revenues is a measure of the Company's revenue by segment as adjusted to exclude certain items. The following table reconciles segment revenues to Total revenues by excluding the following items:

• Adjustment related to our GMxB business which includes: changes in the fair value of the derivatives we use to hedge our GMxB riders within our variable annuities, and changes in the fair value of the embedded derivatives of our GMxB riders reflected within variable annuity net derivative result;

• Investment gains (losses), which include other-than-temporary impairments of securities, sales or disposals of securities/investments, realized capital gains/losses, and valuation allowances; and

• Investment income (loss) from certain derivative instruments, which includes net derivative gains (losses), excluding derivative instruments used to hedge risks associated with interest margins on interest sensitive life and annuity contracts, separate account fee hedges, and freestanding and embedded derivatives associated with products with GMxB features.

The table below presents Segment revenues for the years ended December 31, 2017, 2016 and 2015.

	Year Ended December 31,
	2017			2016			2015
	(in millions)
Segment revenues:
Individual Retirement(1)	$	3,788		$	3,239		$	2,548
Group Retirement(1)	972			822			806
Investment Management and Research(2)	3,214			2,931			3,015
Protection Solutions(1)	2,417			2,544			2,451
Corporate and Other(1)	907			935			913
Adjustments related to:
GMxB features	381			(1,500		)	(818		)
Investment gains (losses)	(125		)	16			(20		)
Investment income (loss) from certain derivative instruments	(18		)	(6		)	104
Other adjustments to segment revenues	197			157			(38		)
Total revenues	$	11,733		$	9,138		$	8,961

(1) Includes investment expenses charged by AB of approximately $52 million, $50 million, and $45 million for 2017, 2016 and 2015, respectively, for services provided to the Company.    

(2) Inter-segment investment management and other fees of approximately $81 million, $77 million, and $73 million for 2017, 2016 and 2015, respectively, are included in segment revenues of the Investment Management and Research segment.

The table below presents Total assets by segment as of December 31, 2017 and 2016:

	December 31,
	2017		2016
	(in millions)
Total assets by segment:
Individual Retirement	$	120,612	$	106,249
Group Retirement	40,472		33,300
Investment Management and Research	10,079		9,533
Protection Solutions	34,328		32,310
Corporate and Other	20,494		23,164
Total assets	$	225,985	$	204,556