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Segment Information
 6 Months Ended
Jun. 30, 2019
Segment Reporting [Abstract]  
Segment Information[Text Block] Segment Information
The Company’s reporting segments are Advice & Wealth Management, Asset Management, Annuities, Protection and Corporate & Other.
Beginning in the first quarter of 2019, the results of AAH, which had been reported as part of the Protection segment, are reflected in the Corporate & Other segment due to the sale of AAH, which is expected to close in the fourth quarter of 2019. Prior periods presented have been restated to reflect the change. See Note 15 for additional information on the sale of AAH.
The accounting policies of the segments are the same as those of the Company, except for operating adjustments defined below, the method of capital allocation, the accounting for gains (losses) from intercompany revenues and expenses and not providing for income taxes on a segment basis.
Management uses segment adjusted operating measures in goal setting, as a basis for determining employee compensation and in evaluating performance on a basis comparable to that used by some securities analysts and investors. Consistent with GAAP accounting guidance for segment reporting, adjusted operating earnings is the Company’s measure of segment performance. Adjusted operating earnings should not be viewed as a substitute for GAAP pretax income. The Company believes the presentation of segment adjusted operating earnings, as the Company measures it for management purposes, enhances the understanding of its business by reflecting the underlying performance of its core operations and facilitating a more meaningful trend analysis.
Effective first quarter of 2019, management has excluded mean reversion related impacts from the Company’s adjusted operating measures. Prior periods have been updated to reflect this change to be consistent with the current period presentation. The mean reversion related impact is defined as the impact on variable annuity and VUL products for the difference between assumed and updated separate account investment performance on DAC, DSIC, unearned revenue amortization, reinsurance accrual and additional insurance benefit reserves.
Adjusted operating earnings is defined as adjusted operating net revenues less adjusted operating expenses. Adjusted operating net revenues and adjusted operating expenses exclude the market impact on IUL benefits (net of hedges and the related DAC amortization, unearned revenue amortization, and the reinsurance accrual), mean reversion related impacts, integration and restructuring charges and the impact of consolidating investment entities. Adjusted operating net revenues also exclude net realized investment gains or losses (net of unearned revenue amortization and the reinsurance accrual) and the market impact of hedges to
offset interest rate changes on unrealized gains or losses for certain investments. Adjusted operating expenses also exclude the market impact on variable annuity guaranteed benefits (net of hedges and the related DSIC and DAC amortization), the market impact on fixed index annuity benefits (net of hedges and the related DAC amortization), and the DSIC and DAC amortization offset to net realized investment gains or losses. The market impact on variable annuity guaranteed benefits, fixed index annuity benefits and IUL benefits includes changes in embedded derivative values caused by changes in financial market conditions, net of changes in economic hedge values and unhedged items including the difference between assumed and actual underlying separate account investment performance, fixed income credit exposures, transaction costs and certain policyholder contract elections, net of related impacts on DAC and DSIC amortization. The market impact also includes certain valuation adjustments made in accordance with FASB Accounting Standards Codification 820, Fair Value Measurements and Disclosures, including the impact on embedded derivative values of discounting projected benefits to reflect a current estimate of the Company’s life insurance subsidiary’s nonperformance spread.
The following tables summarize selected financial information by segment and reconcile segment totals to those reported on the consolidated financial statements:
 
June 30,
2019
 
December 31,
2018
(in millions)
Advice & Wealth Management
$
16,281

 
$
14,480

Asset Management
7,949

 
7,558

Annuities
95,868

 
88,771

Protection
16,787

 
17,126

Corporate & Other
9,766

 
9,281

Assets held for sale
2,027

 
—

Total assets
$
148,678

 
$
137,216

 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
2019
 
2018
2019
 
2018
(in millions)
Adjusted operating net revenues:
 
 
 
 
 
 
 
Advice & Wealth Management
$
1,653

 
$
1,543

 
$
3,207

 
$
3,044

Asset Management
712

 
755

 
1,401

 
1,533

Annuities
620

 
622

 
1,224

 
1,235

Protection
259

 
255

 
521

 
508

Corporate & Other
352

 
334

 
694

 
657

Less: Eliminations (1)(2)
349

 
362

 
682

 
719

Total segment adjusted operating net revenues
3,247

 
3,147

 
6,365

 
6,258

Net realized gains (losses)
—

 
5

 
9

 
11

Revenue attributable to consolidated investment entities
24

 
49

 
45

 
71

Market impact on IUL benefits, net
(8
)
 
(10
)
 
(25
)
 
3

Market impact of hedges on investments
(18
)
 
5

 
(28
)
 
21

Integration and restructuring charges
—

 
—

 
(3
)
 
—

Total net revenues per Consolidated Statements of Operations
$
3,245

 
$
3,196

 
$
6,363

 
$
6,364

(1) 
Represents the elimination of intersegment revenues recognized for the three months ended June 30, 2019 and 2018 in each segment as follows: Advice & Wealth Management ($230 million and $247 million, respectively); Asset Management ($14 million and $12 million, respectively); Annuities ($91 million and $90 million, respectively); Protection ($15 million and $13 million, respectively); and Corporate & Other ($(1) million and nil, respectively).
(2) 
Represents the elimination of intersegment revenues recognized for the six months ended June 30, 2019 and 2018 in each segment as follows: Advice & Wealth Management ($449 million and $487 million, respectively); Asset Management ($27 million and $24 million, respectively); Annuities ($179 million and $180 million, respectively); Protection ($30 million and $29 million, respectively); and Corporate & Other ($(3) million and $(1) million, respectively).

 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
2019
 
2018
2019
 
2018
(in millions)
Adjusted operating earnings:
 
 
 
 
 
 
 
Advice & Wealth Management
$
376

 
$
350

 
$
726

 
$
666

Asset Management
164

 
183

 
310

 
378

Annuities
129

 
122

 
257

 
248

Protection
65

 
63

 
139

 
128

Corporate & Other
(61
)
 
(84
)
 
(124
)
 
(135
)
Total segment adjusted operating earnings
673

 
634

 
1,308

 
1,285

Net realized gains (losses)
—

 
5

 
9

 
11

Net income (loss) attributable to consolidated investment entities
1

 
—

 
1

 
—

Market impact on variable annuity guaranteed benefits, net
(60
)
 
(80
)
 
(202
)
 
(85
)
Market impact on IUL benefits, net
(26
)
 
(20
)
 
(77
)
 
5

Market impact on fixed annuity benefits, net
1

 
—

 
1

 
—

Mean reversion related impacts
18

 
8

 
54

 
14

Market impact of hedges on investments
(18
)
 
5

 
(28
)
 
21

Integration and restructuring charges
(2
)
 
(4
)
 
(9
)
 
(7
)
Pretax income per Consolidated Statements of Operations
$
587

 
$
548

 
$
1,057

 
$
1,244