Segment Information

6 Months Ended

Jun. 30, 2022

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 the related DSIC and DAC amortization, 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); the market impact of hedges to offset interest rate and currency changes on unrealized gains or losses for certain investments; block transfer reinsurance transaction impacts; 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:


	June 30, 2022		December 31, 2021
	(in millions)
Advice & Wealth Management	$	29,881	$	24,986
Asset Management	10,740		10,990
Retirement & Protection Solutions	100,471		119,469
Corporate & Other	17,405		20,534
Total assets	$	158,497	$	175,979


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	(in millions)
Adjusted operating net revenues:
Advice & Wealth Management	$	2,056	$	1,980	$	4,098	$	3,859
Asset Management	881		879		1,898		1,707
Retirement & Protection Solutions	760		808		1,532		1,595
Corporate & Other	119		119		235		258
Elimination of segment revenues (1)(2)	(337)		(399)		(689)		(778)
Total segment adjusted operating net revenues	3,479		3,387		7,074		6,641
Net realized gains (losses)	(15)		10		2		67
Revenue attributable to consolidated investment entities	20		16		37		50
Market impact on non-traditional long-duration products, net	25		21		51		26
Mean reversion related impacts	(1)		1		(1)		1
Market impact of hedges on investments	—		(17)		—		(17)

Total net revenues per consolidated statements of operations	$	3,508	$	3,418	$	7,163	$	6,768

1) Represents the elimination of intersegment revenues recognized for the three months ended June 30, 2022 and 2021 in each segment as follows: Advice & Wealth Management ($221 million and $266 million, respectively); Asset Management ($11 million and $14 million, respectively); Retirement & Protection Solutions ($105 million and $118 million, respectively); and Corporate & Other (nil and $1 million, respectively).

(2) Represents the elimination of intersegment revenues recognized for the six months ended June 30, 2022 and 2021 in each segment as follows: Advice & Wealth Management ($449 million and $516 million, respectively); Asset Management ($23 million and $27 million, respectively); Retirement & Protection Solutions ($217 million and $234 million, respectively); and Corporate & Other (nil and $1 million, respectively).


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	(in millions)
Adjusted operating earnings:
Advice & Wealth Management	$	492	$	423	$	932	$	812
Asset Management	222		253		507		481
Retirement & Protection Solutions	179		182		370		365
Corporate & Other	(53)		(77)		(129)		(98)
Total segment adjusted operating earnings	840		781		1,680		1,560
Net realized gains (losses)	(14)		11		2		66
Net income (loss) attributable to consolidated investment entities	(1)		(2)		1		(3)
Market impact on non-traditional long-duration products, net	305		(87)		439		(483)
Mean reversion related impacts	(161)		42		(220)		98
Market impact of hedges on investments	—		(17)		—		(17)

Integration and restructuring charges	(14)		(7)		(24)		(7)
Pretax income per consolidated statements of operations	$	955	$	721	$	1,878	$	1,214

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

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+ Details