Voya 2013 Annual Report Download - page 484

Non-GAAP Measures
In the introductory letter to this Annual Report, we present Ongoing Business Adjusted Operating Earnings
Before Income Taxes and Ongoing Business Adjusted Return on Equity, each of which is a non-GAAP financial
measure.
Ongoing Business Adjusted Operating Earnings Before Income Taxes
Ongoing Business Adjusted Operating Earnings Before Income Taxes consists of aggregate operating earnings
before income taxes for each segment of our business constituting our Ongoing Business (Retirement, Annuities,
Investment Management, Individual Life and Employee Benefits), in each case adjusted as described below.
Ongoing Business Adjusted Operating Earnings Before Income Taxes does not replace net income (loss) as a
measure of our results of operations.
We use operating earnings before income taxes, which consists of operating revenues minus operating benefits
and expenses, to evaluate segment performance. 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 fair value option 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 our 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 our 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;
• Immediate recognition of net actuarial gains (losses) related to our pension and other postretirement
benefit obligations and gains (losses) from plan amendments and curtailments; and
• Other items, including restructuring expenses (severance, lease write-offs, etc.), integration expenses
related to our acquisition of CitiStreet and certain third-party expenses and deal incentives related to
the divestment of Voya Financial by ING Group.
To calculate adjusted operating earnings before income taxes, we exclude from operating earnings the following
items: (1) DAC/VOBA and other intangibles unlocking, (2) a gain, in conjunction with a Lehman Brothers
bankruptcy settlement for assets held in a partnership owned by the Company, and (3) losses recognized as a
result of a decision to dispose of low income housing tax credit partnerships. Because DAC/VOBA and other
intangibles unlocking can be volatile, excluding the effect of this item can improve period-to-period
comparability. The gain from the Lehman Brothers bankruptcy settlement and loss from the disposition of low-
income housing tax credit partnerships affected the run-rate level of investment income and we believe that this
effect is not reflective of our ongoing performance.
We report Ongoing Business Adjusted Operating Earnings Before Income Taxes because we believe this
measure is a useful indicator of the business performance for our Ongoing Business segments, excluding the
effect of our Closed Block segments.