Voya 2013 Annual Report Download - page 375

ING U.S., Inc.
Notes to the Consolidated Financial Statements
(Dollar amounts in millions, unless otherwise stated)
Corporate
Corporate includes corporate operations and corporate level assets and financial obligations. The Corporate
segment includes investment income on assets backing surplus in excess of amounts held at the segment level,
financing and interest expenses, other items not allocated to segments, such as certain expenses and liabilities of
employee benefit plans and intercompany eliminations.
Closed Blocks
Closed Blocks include the Closed Block Variable Annuity, Closed Block Institutional Spread Products and Closed
Block Other, which are in run-off. Closed Block Variable Annuity and Closed Block Institutional Spread Products
(which issues guaranteed investment contracts and funding agreements) are no longer being actively marketed and
sold, but are managed to protect regulatory and rating agency capital from equity market movements. The Closed
Block Other segment mainly consists of the contingent consideration and loss related to the 2010 sale of three of the
Company’s broker dealers and the amortization of the deferred gain related to the divestment of Group Reinsurance
in 2010 via reinsurance and the Individual Reinsurance segment that was divested in 2004 via reinsurance.
Measurement
Operating earnings before income taxes is an internal measure used by management to evaluate segment
performance. The Company uses the same accounting policies and procedures to measure segment operating
earnings before income taxes as it does for consolidated net income (loss). Operating earnings before income taxes
does not replace net income (loss) as the U.S. GAAP measure of the Company’s consolidated results of operations.
However, the Company believes that the definitions of operating earnings before income taxes provide users with a
more valuable measure of its business and segment performances and enhance the understanding of the Company’s
performance by highlighting performance drivers. Each segment’s operating earnings before income taxes is
calculated by adjusting income (loss) before income taxes for the following items:
• Net investment gains (losses), net of related amortization of DAC, VOBA, sales inducements and
unearned revenue. Net investment gains (losses) include gains (losses) on the sale of securities,
impairments, changes in the fair value of investments using the FVO unrelated to the implied loan-
backed security income recognition for certain mortgage-backed obligations and changes in the fair
value of derivative instruments, excluding realized gains (losses) associated with swap settlements and
accrued interest;
• Net guaranteed benefit hedging gains (losses), which include changes in the fair value of derivatives
related to guaranteed benefits, net of related reserve increases (decreases) and net of related
amortization of DAC, VOBA and sales inducements, less the estimated cost of these benefits. The
estimated cost, which is reflected in operating results, reflects the expected cost of these benefits if
markets perform in line with the Company’s long-term expectations and includes the cost of hedging.
All other derivative and reserve changes related to guaranteed benefits are excluded from operating
results, including the impacts related to changes in the Company’s nonperformance spread;
• Income (loss) related to business exited through reinsurance or divestment;
• Income (loss) attributable to noncontrolling interests;
• Income (loss) related to early extinguishment of debt;
• Impairment of goodwill, value of management contract rights and value of customer relationships
acquired;
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