Voya 2014 Annual Report Download - page 139

Operating revenues also do not reflect the revenues of our CBVA segment, since this segment is managed to
focus on protecting regulatory and rating agency capital rather than achieving operating metrics. When we
present the adjustments to Total revenues on a consolidated basis, each adjustment excludes the relative portions
attributable to our CBVA segment.
The most directly comparable U.S. GAAP measure to Operating revenues is Total revenues. For a
reconciliation of Operating revenue to Total revenues, see “-Results of Operations—Company Consolidated”
below.
AUM and AUA
A substantial portion of our fees, other charges and margins are based on AUM. AUM represents on-
balance sheet assets supporting customer account values/liabilities and surplus as well as off-balance sheet
institutional/mutual funds. Customer account values reflect the amount of policyholder equity that has
accumulated within retirement, annuity and UL products. AUM includes general account assets managed by our
Investment Management segment in which we bear the investment risk, separate account assets in which the
contract owner bears the investment risk and institutional/mutual funds, which are excluded from our balance
sheet. AUM-based revenues increase or decrease with a rise or fall in the amount of AUM, whether caused by
changes in capital markets or by net flows.
AUM is principally affected by net deposits (i.e., new deposits, less surrenders and other outflows) and
investment performance (i.e., interest credited to contract owner accounts for assets that earn a fixed return or
market performance for assets that earn a variable return). Separate account AUM and institutional/mutual fund
AUM include assets managed by our Investment Management segment, as well as assets managed by third-party
investment managers. Our Investment Management segment reflects the revenues earned for managing affiliated
assets for our other segments as well as assets managed for third parties.
AUA represents accumulated assets on contracts pursuant to which we either provide administrative
services or product guarantees for assets managed by third parties. These contracts are not insurance contracts
and the assets are excluded from the Consolidated Financial Statements. Fees earned on AUA are generally based
on the number of participants, asset levels and/or the level of services or product guarantees that are provided.
Our consolidated AUM/AUA includes eliminations of AUM/AUA managed by our Investment
Management segment that is also reflected in other segments’ AUM/AUA and adjustments for AUM not
reflected in any segments.
Sales Statistics
In our discussion of our segment results under “Results of Operations—Segment by Segment,” we
sometimes refer to sales activity for various products. The term “sales” is used differently for different products,
as described more fully below. These sales statistics do not correspond to revenues under U.S. GAAP and are
used by us as operating measures underlying our financial performance.
Net flows are deposits less redemptions (including benefits and other product charges).
Sales for Individual Life products are based on a calculation of weighted average annual premiums
(“WAP”). Sales for Employee Benefits products are based on a calculation of annual premiums, which represent
regular premiums on new policies, plus a portion of new single premiums.
WAP is defined as the amount of premium for a policy’s first year that is eligible for the highest first year
commission rate, plus a varying portion of any premium in excess of this base amount, depending on the product.
WAP is a key measure of recent sales performance of our products and is an indicator of the general growth or
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