Segment Information

3 Months Ended

Mar. 31, 2022

Segment Reporting [Abstract]

Segment Information

Segment Information

The Company’s four reporting segments are Advice & Wealth Management, Asset Management, Retirement & Protection Solutions and Corporate & Other.

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.

Management excludes mean reversion related impacts from the Company’s adjusted operating measures. 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.

Effective in the third quarter of 2021, management has excluded the impacts of block transfer reinsurance transactions from the adjusted operating measures. Prior periods have been updated to reflect this change to be consistent with the current period presentation.

Adjusted operating earnings is defined as adjusted operating net revenues less adjusted operating expenses. Adjusted operating net revenues and adjusted operating expenses exclude net realized investment gains or losses (net of unearned revenue amortization and the reinsurance accrual); the market impact on non-traditional long-duration products (including variable and fixed deferred annuity contracts and UL insurance contracts), net of hedges and the related DSIC and DAC amortization, unearned revenue amortization, and the reinsurance accrual; mean reversion related impacts (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); block transfer reinsurance transaction impacts; the market impact of hedges to offset interest rate and currency changes on unrealized gains or losses for certain investments; integration and restructuring charges; and the impact of consolidating CIEs. The market impact on non-traditional long-duration products 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:

	March 31, 2022		December 31, 2021
	(in millions)
Advice & Wealth Management	$	26,752	$	24,986
Asset Management	10,457		10,990
Retirement & Protection Solutions	112,881		119,469
Corporate & Other	17,435		20,534
Total assets	$	167,525	$	175,979

	Three Months Ended March 31,
	2022		2021
	(in millions)
Adjusted operating net revenues:
Advice & Wealth Management	$	2,042	$	1,879
Asset Management	1,017		828
Retirement & Protection Solutions	772		787
Corporate & Other	116		139
Elimination of segment revenues (1)	(352)		(379)
Total segment adjusted operating net revenues	3,595		3,254
Net realized gains (losses)	17		57
Revenue attributable to consolidated investment entities	17		34
Market impact on non-traditional long-duration products, net	26		5
Total net revenues per consolidated statements of operations	$	3,655	$	3,350

(1) Represents the elimination of intersegment revenues recognized for the three months ended March 31, 2022 and 2021 in each segment as follows: Advice & Wealth Management ($228 million and $250 million, respectively); Asset Management ($12 million and $13 million, respectively); Retirement & Protection Solutions ($112 million and $116 million, respectively); and Corporate & Other (nil and nil, respectively).

	Three Months Ended March 31,
	2022		2021
	(in millions)
Adjusted operating earnings:
Advice & Wealth Management	$	440	$	389
Asset Management	285		228
Retirement & Protection Solutions	191		183
Corporate & Other	(76)		(21)
Total segment adjusted operating earnings	840		779
Net realized gains (losses)	16		55
Net income (loss) attributable to consolidated investment entities	2		(1)
Market impact on non-traditional long-duration products, net	134		(396)
Mean reversion related impacts	(59)		56
Integration and restructuring charges	(10)		—
Pretax income per consolidated statements of operations	$	923	$	493