VOYA 10-Q Quarter ended June 30, 2020

---

---

---

---

---

---

---

---

---

---

---

---

Business

Voya Financial, Inc. and its subsidiaries (collectively the "Company") is a financial services organization in the United States that offers a broad range of retirement services, investment management services, mutual funds, group insurance and supplemental health products.

On December 18, 2019, the Company entered into a Master Transaction Agreement (the “Resolution MTA”) with Resolution Life U.S. Holdings Inc., a Delaware corporation (“Resolution Life US”), pursuant to which Resolution Life US will acquire all of the shares of the capital stock of Security Life of Denver Insurance Company ("SLD") and Security Life of Denver International Limited ("SLDI"), including the capital stock of several subsidiaries of SLD and SLDI. The transaction is expected to close by September 30, 2020 and is subject to conditions specified in the Resolution MTA, including the receipt of required regulatory approvals. The assets and liabilities related to the businesses to be sold have been classified as held for sale in the accompanying Condensed Consolidated Balance Sheets and as discontinued operations in the accompanying Condensed Consolidated Statements of Operations and Condensed Consolidated Statements of Cash Flows and are reported separately for all periods presented. See the Business Held for Sale and Discontinued Operations Note to these Condensed Consolidated Financial Statements.

Concurrently with the sale, SLD will enter into reinsurance agreements with insurance subsidiaries of the Company. Pursuant to these agreements, the Company's subsidiaries will reinsure to SLD certain individual life insurance and annuities businesses. The sale of SLD, SLDI and several of their subsidiaries along with the aforementioned reinsurance transactions are referred to herein as the "Individual Life Transaction". The Individual Life Transaction will result in the disposition of substantially all of our life insurance and legacy non-retirement annuity businesses and related assets. As such, the Company will no longer report its Individual Life business as an operating segment.

On June 1, 2018, the Company consummated a series of transactions (collectively, the "2018 Transaction") pursuant to a Master Transaction Agreement with VA Capital Company LLC ("VA Capital") and Athene Holding Ltd. ("Athene"). As part of the Transaction, Venerable Holdings, Inc. ("Venerable"), a wholly owned subsidiary of VA Capital, acquired two of the Company's subsidiaries, Voya Insurance and Annuity Company ("VIAC") and Directed Services, LLC ("DSL"), and VIAC and other Voya subsidiaries reinsured to Athene substantially all of their fixed and fixed indexed annuities business. In connection with the 2018 Transaction, VIAC and another Voya subsidiary engaged in a series of reinsurance arrangements pursuant to which Voya and its subsidiaries other than VIAC retained VIAC’s businesses other than variable annuities and fixed and fixed indexed annuities. The Transaction resulted in the disposition of substantially all of the Company's Closed Block Variable Annuity ("CBVA") and Annuities businesses.

The Company provides its principal products and services through three segments: Retirement, Investment Management and Employee Benefits. In addition, the Company includes in Corporate activities that are not directly related to its segments and certain run-off activities that are not meaningful to the Company's business strategy. See the Segments Note to these Condensed Consolidated Financial Statements.

Prior to May 2013, the Company was an indirect, wholly-owned subsidiary of ING Groep N.V. ("ING Group" or "ING"), a global financial services holding company based in The Netherlands. In May 2013, Voya Financial Inc. completed its initial public offering of common stock, including the issuance and sale of common stock by Voya Financial, Inc. and the sale of shares of common stock owned indirectly by ING Group. Between October 2013 and March 2015, ING Group completed the sale of its remaining shares of common stock of Voya Financial, Inc. in a series of registered public offerings.

Basis of Presentation

The accompanying Condensed Consolidated Financial Statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States ("U.S. GAAP") and are unaudited. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the Condensed Consolidated

---

Financial Statements and the reported amounts of revenues and expenses during the reporting period. The inputs into the Company's estimates and assumptions consider the economic implications of COVID-19 on the Company's critical and significant accounting estimates. Those estimates are inherently subject to change and actual results could differ from those estimates, and the differences may be material to the Condensed Consolidated Financial Statements.

The Condensed Consolidated Financial Statements include the accounts of Voya Financial, Inc. and its subsidiaries, as well as other voting interest entities ("VOEs") and variable interest entities ("VIEs") in which the Company has a controlling financial interest. See the Consolidated Investment Entities Note to these Condensed Consolidated Financial Statements. Intercompany transactions and balances have been eliminated.

The accompanying Condensed Consolidated Financial Statements reflect adjustments (including normal, recurring adjustments) necessary to present fairly the financial position of the Company as of June 30, 2020, its results of operations, comprehensive income and changes in shareholders' equity for the three and six months ended June 30, 2020 and 2019, and its statements of cash flows for the six months ended June 30, 2020 and 2019, in conformity with U.S. GAAP. Interim results are not necessarily indicative of full year performance.

The December 31, 2019 Consolidated Balance Sheet is from the audited Consolidated Financial Statements included in the Company's Annual Report on Form 10-K , filed with the SEC. Therefore, these unaudited Condensed Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and related notes included in the Company's Annual Report on Form 10-K .

Subsequent Events

The Company has evaluated subsequent events through the issuance date of the Condensed Consolidated financial statements including the implications of the COVID-19 pandemic. The Company is not aware of any material matters that could impact the Company's financial position, results of operations or cash flows or for which a disclosure is required.

Significant Accounting Policies

Effective January 1, 2020, the Company adopted Accounting Standards Update ("ASU") 2016-13 "Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”, as amended ("ASU 2016-13"). The Company adopted ASU 2016-13 using the modified retrospective method for financial assets measured at amortized cost and the prospective method for available-for-sale debt securities as required by ASU 2016-13. As a result, the Company had changes to the following significant accounting policies:

• Investments: Mortgage Loans on Real Estate;

• Impairments; and

• Reinsurance.

Comparative information has not been adjusted and continues to be reported under previously applicable U.S. GAAP. The Company’s accounting policies amended by the adoption of ASU 2016-13 are as follows:

Investments

Mortgage Loans on Real Estate : The Company's mortgage loans on real estate are all commercial mortgage loans, which are reported at amortized cost, net of the allowance for credit losses. Amortized cost is the principal balance outstanding, net of deferred loan fees and costs. Accrued interest receivable is reported in Accrued investment income on the Condensed Consolidated Balance Sheets.

Mortgage loans are evaluated by the Company's investment professionals, including an appraisal of loan-specific performance, property characteristics and market trends. Loan performance is continuously monitored on a loan-specific basis throughout the year. The Company's review includes submitted appraisals, operating statements, rent revenues and annual inspection reports, among other items. This review evaluates whether the properties are performing at a consistent and acceptable level to secure the debt.

---

Management estimates the credit loss allowance balance using a factor-based method of probability of default and loss given default which incorporates relevant available information, from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. Included in the factor-based method are the consideration of debt type, capital market factors, and market vacancy rates, and loan-specific risk characteristics such as debt service coverage ratios (“DSCR”), loan-to-value (“LTV”), collateral size, seniority of the loan, segmentation, and property types.

The allowance for credit losses is a valuation account that is deducted from the loans’ amortized cost basis to present the net amount expected to be collected on the loans. The change in the allowance for credit losses is recorded in Other net realized capital gains (losses) in the Condensed Consolidated Statements of Operations. Loans are written off against the allowance when management believes the uncollectability of a loan balance is confirmed. Expected recoveries do not exceed the aggregate of amounts previously written-off and expected to be written-off.

Mortgages are rated for the purpose of quantifying the level of risk. Those loans with higher risk are placed on a watch list and are closely monitored for collateral deficiency or other credit events that may lead to a potential loss of principal or interest. The Company defines delinquent mortgage loans consistent with industry practice as 60 days past due.

Commercial mortgage loans are placed on non-accrual status when 90 days in arrears if the Company has concerns regarding the collectability of future payments, or if a loan has matured without being paid off or extended. Factors considered may include conversations with the borrower, loss of major tenant, bankruptcy of borrower or major tenant, decreased property cash flow, number of days past due, or various other circumstances. Based on an assessment as to the collectability of the principal, a determination is made either to apply against the book value or apply according to the contractual terms of the loan. Funds recovered in excess of book value would then be applied to recover expenses, credit loss allowance, and then interest. Accrual of interest resumes after factors resulting in doubts about collectability have improved.

For those mortgages that are determined to require foreclosure, expected credit losses are based on the fair value of the underlying collateral, net of estimated costs to obtain and sell at the point of foreclosure. Property obtained from foreclosed mortgage loans is recorded in Other investments on the Condensed Consolidated Balance Sheets.

Impairments

The Company evaluates its available-for-sale investments quarterly to determine whether a decline in fair value below the amortized cost basis has resulted from credit loss or other factors. This evaluation process entails considerable judgment and estimation. Factors considered in this analysis include, but are not limited to, the extent to which the fair value has been less than amortized cost, the issuer's financial condition and near-term prospects, future economic conditions and market forecasts, interest rate changes and changes in ratings of the security. A severe unrealized loss position on a fixed maturity may not have any impact on: (a) the ability of the issuer to service all scheduled interest and principal payments and (b) the evaluation of recoverability of all contractual cash flows or the ability to recover an amount at least equal to its amortized cost based on the present value of the expected future cash flows to be collected.

When assessing the Company's intent to sell a security, or if it is more likely than not it will be required to sell a security before recovery of its amortized cost basis, management evaluates facts and circumstances such as, but not limited to, decisions to rebalance the investment portfolio and sales of investments to meet cash flow or capital needs. When the Company has determined it has the intent to sell, or if it is more likely than not that the Company will be required to sell a security before recovery of its amortized cost basis, and the fair value has declined below amortized cost ("intent impairment"), the individual security is written down from amortized cost to fair value, and a corresponding charge is recorded in Net realized capital gains (losses) in the Condensed Consolidated Statements of Operations as Impairments.

For available-for-sale securities that do not meet the intent impairment criteria but the Company has determined that a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss allowance is recorded for the credit loss, limited by the amount that the fair value is less than the amortized cost basis. Any impairment that has not been recorded through an allowance for credit losses is recognized in Other comprehensive income (loss).

---

The Company uses the following methodology and significant inputs in determining whether a credit loss exists:

• When determining collectability and the period over which the value is expected to recover for U.S. and foreign corporate securities, foreign government securities and state and political subdivision securities, the Company applies the same considerations utilized in its overall impairment evaluation process, which incorporates information regarding the specific security, the industry and geographic area in which the issuer operates and overall macroeconomic conditions. Projected future cash flows are estimated using assumptions derived from the Company's best estimates of likely scenario-based outcomes, after giving consideration to a variety of variables that includes, but is not limited to: general payment terms of the security; the likelihood that the issuer can service the scheduled interest and principal payments; the quality and amount of any credit enhancements; the security's position within the capital structure of the issuer; possible corporate restructurings or asset sales by the issuer; and changes to the rating of the security or the issuer by rating agencies.

• Additional considerations are made when assessing the unique features that apply to certain structured securities, such as subprime, Alt-A, non-agency RMBS, CMBS and ABS. These additional factors for structured securities include, but are not limited to: the quality of underlying collateral; expected prepayment speeds; loan-to-value ratios; debt service coverage ratios; current and forecasted loss severity; consideration of the payment terms of the underlying assets backing a particular security; and the payment priority within the tranche structure of the security.

• When determining the amount of the credit loss for U.S. and foreign corporate securities, foreign government securities and state and political subdivision securities, the Company considers the estimated fair value as the recovery value when available information does not indicate that another value is more appropriate. When information is identified that indicates a recovery value other than estimated fair value, the Company considers in the determination of recovery value the same considerations utilized in its overall impairment evaluation process, which incorporates available information and the Company's best estimate of scenario-based outcomes regarding the specific security and issuer; possible corporate restructurings or asset sales by the issuer; the quality and amount of any credit enhancements; the security's position within the capital structure of the issuer; fundamentals of the industry and geographic area in which the security issuer operates; and the overall macroeconomic conditions.

• The Company performs a discounted cash flow analysis comparing the current amortized cost of a security to the present value of future cash flows expected to be received, including estimated defaults and prepayments. The discount rate is generally the effective interest rate of the fixed maturity prior to impairment.

Changes in the allowance for credit losses are recorded in Net realized capital gains (losses) as Impairments in the Condensed Consolidated Statements of Operations. Losses are charged against the allowance when the Company believes the uncollectability of an available-for-sale security is confirmed or when either of the criteria regarding intent or requirement to sell is met.

Accrued interest receivable on available-for-sale securities is excluded from the estimate of credit losses.

Reinsurance

The Company utilizes reinsurance agreements in most aspects of its insurance business to reduce its exposure to large losses. Such reinsurance permits recovery of a portion of losses from reinsurers, although it does not discharge the primary liability of the Company as direct insurer of the risks reinsured.

Accounting for reinsurance requires use of assumptions and estimates, particularly related to the future performance of the underlying business and the potential impact of counterparty credit risks. The Company periodically reviews actual and anticipated experience compared to the assumptions used to establish assets and liabilities relating to ceded and assumed reinsurance. The Company also evaluates the financial strength of potential reinsurers and continually monitors the financial condition of reinsurers.

Reinsurance recoverable balances are reported net of the allowance for credit losses in the Company’s Condensed Consolidated Balance Sheets. Management estimates the credit loss allowance balance using a factor-based method of probability of default

---

and loss given default which incorporates relevant available information, from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. Included in the factor-based method are the consideration of capital market factors, counterparty financial information and ratings, and reinsurance agreement-specific risk characteristics such as collateral type, collateral size, and covenant strength.

The allowance for credit losses is a valuation account that is deducted from the reinsurance recoverable balance to present the net amount expected to be collected on the reinsurance recoverable. The change in the allowance for credit losses is recorded in Policyholder benefits in the Condensed Consolidated Statements of Operations.

Adoption of New Pronouncements

The following table provides a description of the Company's adoption of new Accounting Standard Updates ("ASUs") issued by the Financial Accounting Standards Board ("FASB") and the impact of the adoption on the Company's financial statements.

Standard			Description of Requirements			Effective Date and Method of Adoption			Effect on the Financial Statements or Other Significant Matters
ASU 2018-15, Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract			This standard, issued in August 2018, requires a customer in a hosting arrangement that is a service contract to follow the guidance for internal-use software projects to determine which implementation costs to capitalize as an asset. Capitalized implementation costs are required to be expensed over the term of the hosting arrangement. In addition, a customer is required to apply the impairment and abandonment guidance for long-lived assets to the capitalized implementation costs. Balances related to capitalized implementation costs must be presented in the same financial statement line items as other hosting arrangement balances, and additional disclosures are required.			January 1, 2020 using the prospective method.			Adoption of the ASU did not have a material impact on the Company's financial condition, results of operations, or cash flows.
ASU 2018-13, Changes to the Disclosure Requirements for Fair Value Measurement			This standard, issued in August 2018, simplifies certain disclosure requirements for fair value measurement.			January 1, 2020 using the transition method prescribed for each applicable provision.			Adoption of this ASU had no effect on the Company's financial condition, results of operations, or cash flows. The adoption resulted in various disclosure changes that have been included in Note 5, Fair Value Measurements .

---

Standard			Description of Requirements			Effective Date and Method of Adoption			Effect on the Financial Statements or Other Significant Matters
ASU 2016-13 , Measurement of Credit Losses on Financial Instruments			This standard, issued in June 2016: • Introduces a new current expected credit loss ("CECL") model to measure impairment on certain types of financial instruments, • Requires an entity to estimate lifetime expected credit losses, under the new CECL model, based on relevant information about historical events, current conditions, and reasonable and supportable forecasts, • Modifies the impairment model for available-for-sale debt securities, and • Provides a simplified accounting model for purchased financial assets with credit deterioration since their origination. In addition, the FASB issued various amendments during 2018, 2019, and 2020 to clarify the provisions of ASU 2016-13.			January 1, 2020, using the modified retrospective method for financial assets measured at amortized cost and the prospective method for available-for-sale debt securities.			The Company recorded a $ 33 decrease, net of tax, to Unappropriated retained earnings as of a January 1, 2020 for the cumulative effect of adopting ASU 2016-13. The combined transition adjustment for continuing and discontinued operations includes recognition of an allowance for credit losses of $ 19 related to mortgage loans and $ 28 related to reinsurance recoverables, net of the effect of Deferred policy acquisition costs and Value of business acquired of $ 5 and deferred income taxes of $ 9 .. The provisions that required prospective adoption had no effect on the Company's financial condition, results of operations, or cash flows. In addition, disclosures have been updated to reflect accounting policy changes made as a result of the implementation of ASU 2016-13. (See the Significant Accounting Policies section.) Comparative information has not been adjusted and continues to be reported under previously applicable U.S. GAAP.

Future Adoption of Accounting Pronouncements

Long-Duration Contracts

In August 2018, the FASB issued ASU 2018-12, "Financial Services - Insurance (Topic 944) Targeted Improvements to the Accounting for Long-Duration Contracts" ("ASU 2018-12"), which changes the measurement and disclosures of insurance liabilities and deferred acquisition costs ("DAC") for long-duration contracts issued by insurers. In October 2019, the FASB voted to amend the effective date of ASU 2018-12 for public business entities that are required to file with the SEC to fiscal years beginning after December 15, 2021, including interim periods, with early adoption permitted. On July 9, 2020, the FASB issued an exposure draft proposing to defer the effective date of ASU 2018-12 by one year for all insurance entities and to provide transition relief to facilitate early application of ASU 2018-12. This exposure draft has a 45 day comment period ending on August 24, 2020. The Company is currently in the process of evaluating the provisions of ASU 2018-12. While it is not possible to estimate the expected impact of adoption at this time, the Company believes there is a reasonable possibility that implementation of ASU 2018-12 may result in a significant impact on Shareholders’ equity and future earnings patterns.

---

In addition to requiring significantly expanded interim and annual disclosures regarding long-duration insurance contract assets and liabilities, ASU 2018-12's provisions include modifications to the accounting for such contracts in the following areas:

ASU 2018-12 Subject Area			Description of Requirements			Transition Provisions			Effect on the Financial Statements or Other Significant Matters
Assumptions used to measure the liability for future policy benefits for nonparticipating traditional and limited payment insurance contracts			Requires insurers to review and, if necessary, update cash flow assumptions at least annually. The effect of updating cash flow assumptions will be measured on a retrospective catch-up basis and presented in the Statement of Operations in the period in which the update is made. The rate used to discount the liability for future policy benefits will be required to be updated quarterly, with related changes in the liability recorded in AOCI. The discount rate will be based on an upper-medium grade fixed-income corporate instrument yield reflecting the duration characteristics of the relevant liabilities.			Initial adoption is required to be reported using either a full retrospective or modified retrospective approach. Under either method, upon adoption the liability for future policy benefits will be remeasured using current discount rates as of the beginning of the earliest period presented with the impact recorded as a cumulative effect adjustment to AOCI.			The application of periodic assumption updates for nonparticipating traditional and limited payment insurance contracts is significantly different from the current accounting approach for such liabilities, which is based on assumptions that are locked in at contract inception unless a premium deficiency occurs. Under the current accounting guidance, the liability discount rate is based on expected yields on the underlying investment portfolio held by the insurer. The implications of these requirements, including transition options, and related potential financial statement impacts are currently being evaluated.
Measurement of market risk benefits			Creates a new category of benefit features called market risk benefits, defined as features that protect contract holders from capital market risk and expose the insurers to that risk. Market risk benefits will be required to be measured at fair value, with changes in fair value recognized in the Statement of Operations, except for changes in fair value attributable to changes in the instrument-specific credit risk, which will be recorded in AOCI.			Full retrospective application is required. Upon adoption, any difference between the fair value and pre-adoption carrying value of market risk benefits not currently measured at fair value will be recorded to retained earnings. In addition, the cumulative effect of changes in instrument-specific credit risk will be reclassified from retained earnings to AOCI.			Under the current accounting guidance, certain features that are expected to meet the definition of market risk benefits are accounted for as either insurance liabilities or embedded derivatives. The implications of these requirements and related potential financial statement impacts are currently being evaluated.

---

---

The following table provides a description of future adoptions of other new accounting standards that may have an impact on the Company's financial statements when adopted:

Standard			Description of Requirements			Effective date and transition provisions			Effect on the financial statements or other significant matters
ASU 2020-04, Reference Rate Reform			This standard, issued in March 2020, provides temporary optional expedients and exceptions for applying U.S. GAAP principles to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met.			The amendments are effective as of March 12, 2020, the issuance date of the ASU. An entity may elect to apply the amendments prospectively through December 31, 2022.			The Company expects that it will elect to apply some of the expedients and exceptions provided in ASU 2020-04; however, the Company is still evaluating the guidance, and therefore, the impact of the adoption of ASU 2020-04 on the Company’s financial condition and results of operations has not yet been determined.
ASU 2019-12, Simplifying the Accounting for Income Taxes			This standard, issued in December 2019, simplifies the accounting for income taxes by eliminating certain exceptions to the general principles and simplifying several aspects of ASC 740, Income taxes, including requirements related to the following: • The intraperiod tax allocation exception to the incremental approach, • The tax basis step-up in goodwill obtained in a transaction that is not a business combination, • Hybrid tax regimes, • Ownership changes in investments - changes from a subsidiary to an equity method investment, • Separate financial statements of entities not subject to tax, • Interim-period accounting for enacted changes in tax law, and • The year-to-date loss limitation in interim-period tax accounting.			January 1, 2021 with early adoption permitted. Early adoption in an interim period must reflect any adjustments as of the beginning of the annual period. Initial adoption of ASU 2019-12 is required to be reported on a prospective basis, except for certain provisions that are required to be applied retrospectively or modified retrospectively.			The Company is currently in the process of determining the impact of adoption of the provisions of ASU 2019-12.
ASU 2018-14, Changes to the Disclosure Requirements for Defined Benefit Plans			This standard, issued in August 2018, eliminates certain disclosure requirements that are no longer considered cost beneficial and requires new disclosures that are considered relevant.			December 31, 2020 with early adoption permitted. Initial adoption of ASU 2018-14 is required to be reported on a retrospective basis for all periods presented.			The Company is currently in the process of determining the impact of adoption of the provisions of ASU 2018-14.

---

As noted in the Business, Basis of Presentation and Significant Accounting Policies Note, on December 18, 2019, the Company entered into the Resolution MTA with Resolution Life US to sell several of its subsidiaries and the related Individual Life and fixed and variable annuities businesses within these subsidiaries. Additionally, on June 1, 2018, the Company consummated a series of transactions pursuant to a Master Transaction Agreement (the "2018 MTA") to sell substantially all of its fixed and fixed indexed annuities businesses.

The following table presents summary information related to income (loss) from discontinued operations for the periods presented:

			Six Months Ended June 30,
			2020						2019
Income (loss) from discontinued operations, net of tax
Individual Life Transaction			$	( 221 )					$	104
2018 Transaction			—						( 82 )
Total			$	( 221 )					$	22

The Individual Life Transaction

Sale of legal entities

Pursuant to the Company executing the Resolution MTA and upon closing of the Individual Life Transaction, the Company will sell five of its legal subsidiaries, SLD, SLDI, Roaring River II ("RRII"), Midwestern United Life Insurance Company ("MUL") and Voya American Equities, Inc. ("VAE") to Resolution Life US. Resolution Life US is an insurance holding company newly formed by Resolution Life Group Holdings, L.P., a Bermuda-based limited partnership (“RLGH”). The Individual Life Transaction is expected to close by September 30, 2020 and is subject to conditions specified in the Resolution MTA, including the receipt of required regulatory approvals.

The purchase price in the transaction is approximately $ 1.25 billion, with an adjustment based on the adjusted capital and surplus of SLD, SLDI and RRII at closing. The purchase price includes cash consideration of approximately $ 902 , a $ 225 equity interest in RLGH, and $ 123 principal amount in surplus notes issued by SLD that will be retained by the Company under modified terms. The receivable for the surplus notes and SLD's corresponding liability outstanding as of June 30, 2020 and December 31, 2019 are included in Other investments and Liabilities held for sale, respectively, on the Company's Condensed Consolidated Balance Sheets. In the summary of major categories of assets and liabilities held for sale below, SLD's corresponding liability for the surplus notes is included in Notes payable.

The Individual Life Transaction is subject to a $ 100 reverse termination fee that would be payable by Resolution Life US to the Company if the Resolution MTA is terminated in prescribed circumstances related to the failure by Resolution Life US’s reserve financing provider to provide a committed financing facility. A separate $ 20 termination fee would be payable by Resolution Life US to the Company in prescribed circumstances where the Resolution MTA is terminated due to a failure to obtain certain approvals or consents.

Concurrent with the execution of the Resolution MTA, RLGH provided the Company with a limited guarantee to guarantee its financial obligations for an amount not to exceed $ 1.3 billion, including the termination fees and subject to the terms and conditions in the Resolution MTA.

---

The Company has determined that these entities to be disposed of meet the criteria to be classified as held for sale and that the sale represents a strategic shift that will have a major effect on the Company’s operations. Accordingly, the results of operations of the entities to be sold have been presented as discontinued operations in the accompanying Condensed Consolidated Statements of Operations and Condensed Consolidated Statements of Cash Flows, and the assets and liabilities of the businesses have been classified as held for sale and segregated for all periods presented in the Condensed Consolidated Balance Sheets. A business classified as held for sale is recorded at the lower of its carrying value or estimated fair value less cost to sell. If the carrying value exceeds its estimated fair value less cost to sell, a loss is recognized. Transactions between the businesses held for sale and businesses in continuing operations that are expected to continue to exist after the disposal are not eliminated to appropriately reflect the continuing operations and the assets, liabilities and results of the businesses held for sale.

The results of discontinued operations are reported in "Income (loss) from discontinued operations, net of tax" in the accompanying Condensed Consolidated Statements of Operations for all periods presented. As of December 31, 2019, the Company recorded an estimated loss on sale, net of tax of $ 1,108 to write down the carrying value of the businesses held for sale to estimated fair value, which is based on the estimated sales price of the Individual Life Transaction as of December 31, 2019, less cost to sell and other adjustments in accordance with the Resolution MTA. In addition, the Company is required to remeasure the estimated fair value and loss on sale at the end of each quarter until closing of the Individual Life Transaction. As such, Income (loss) from discontinued operations, net of tax, for the six months ended June 30, 2020 includes an additional estimated loss on sale of $ 240 , net of tax. The estimated loss on sale, net of tax as of June 30, 2020 of $ 1,348 represents the excess of the estimated carrying value of the businesses held for sale over the estimated purchase price, which approximates fair value, less cost to sell. Additionally, the estimated loss on sale is based on assumptions that are subject to change due to fluctuations in market conditions and other variables that may occur prior to the closing date.

---

The following table summarizes the major categories of assets and liabilities classified as held for sale related to the Individual Life Transaction in the accompanying Condensed Consolidated Balance Sheets as of June 30, 2020 and December 31, 2019:

			June 30, 2020						December 31, 2019
Assets:
Investments:
Fixed maturities, available-for-sale, at fair value			$	12,300					$	11,483
Fixed maturities, at fair value using the fair value option			800						752
Mortgage loans on real estate, net of allowance for credit losses of $ 14 as of 2020			1,272						1,319
Policy loans			996						1,005
Derivatives			258						304
Other investments (1)			336						430
Securities pledged			2						235
Total investments			15,964						15,528
Cash and cash equivalents			413						291
Short-term investments under securities loan agreements, including collateral delivered			2						216
Premium receivable and reinsurance recoverable, net allowance for credit losses of $ 16 as of 2020			3,017						3,101
Deferred policy acquisition costs and Value of business acquired			392						607
Current income taxes			137						136
Deferred income taxes			( 801 )						( 757 )
Other assets (2)			752						570
Assets held in separate accounts			1,395						1,485
Write-down of businesses held for sale to fair value less cost to sell			( 1,348 )						( 1,108 )
Total assets held for sale			$	19,923					$	20,069
Liabilities:
Future policy benefits and contract owner account balances			$	15,455					$	15,472
Payables under securities loan and repurchase agreements, including collateral held			162						428
Derivatives			69						77
Notes payable			219						252
Other liabilities			734						784
Liabilities related to separate accounts			1,395						1,485
Total liabilities held for sale			$	18,034					$	18,498

⁽¹⁾ Includes Other investments, Equity securities, Limited partnerships/corporations and Short-term investments.

⁽²⁾ Includes Other assets and Accrued investment income.

---

The following table summarizes the components of Income (loss) from discontinued operations, net of tax related to the Individual Life Transaction for the six months ended June 30, 2020 and 2019:

			Six Months Ended June 30,
			2020						2019
Revenues:
Net investment income			$	304					$	327
Fee income			352						371
Premiums			15						15
Total net realized capital gains (losses)			17						54
Other revenue			( 9 )						( 4 )
Total revenues			679						763
Benefits and expenses:
Interest credited and other benefits to contract owners/policyholders			553						533
Operating expenses			68						43
Net amortization of Deferred policy acquisition costs and Value of business acquired			30						51
Interest expense			4						5
Total benefits and expenses			655						632
Income (loss) from discontinued operations before income taxes			24						131
Income tax expense (benefit)			5						27
Loss on sale, net of tax			( 240 )						—
Income (loss) from discontinued operations, net of tax			$	( 221 )					$	104

The estimated purchase price and estimated carrying value of the legal entities to be sold as of the future date of closing, and therefore the estimated loss on sale related to the Individual Life Transaction, are subject to adjustment in future quarters until closing, and may be influenced by, but not limited to, the following factors:

• The performance of the businesses held for sale, including the impact of mortality, reinsurance rates and financing costs;

• Changes in the terms of the Transaction, including as the result of subsequent negotiations or as necessary to obtain regulatory approval; and

• Other changes in the terms of the Transaction due to unanticipated developments.

The Company is required to remeasure the estimated fair value and loss on sale at the end of each quarter until closing of the Individual Life Transaction. Changes in the estimated loss on sale that occur prior to closing of the Individual Life Transaction will be reported as an adjustment to Income (loss) from discontinued operations, net of tax, in future quarters prior to closing.

Reinsurance

Concurrently with the sale, SLD will enter into reinsurance agreements with Reliastar Life Insurance Company ("RLI"), ReliaStar Life Insurance Company of New York ("RLNY"), and Voya Retirement Insurance and Annuity Company ("VRIAC"), each of which is a direct or indirect wholly owned subsidiary of the Company. Pursuant to these agreements, RLI and VRIAC will reinsure to SLD a 100 % quota share, and RLNY will reinsure to SLD a 75 % quota share, of their respective individual life insurance and annuities businesses. RLI, RLNY, and VRIAC will remain subsidiaries of the Company. The Company currently expects that these reinsurance transactions will be carried out on a coinsurance basis, with SLD’s reinsurance obligations collateralized in one of three ways: 1) invested assets placed in a comfort trust; 2) funds withheld basis with invested assets remaining on the respective subsidiaries of the Company; or 3) some combination of these two collateralization structures. Based on values as of June 30, 2020, U.S GAAP reserves to be ceded under the Individual Life

---

Transaction (defined below) are expected to be approximately $ 10.3 billion and are subject to change until closing. The reinsurance agreements along with the sale of the legal entities noted above will result in the disposition of substantially all of the Company's life insurance and legacy non-retirement annuity businesses. The revenues and net results of the Individual Life and Annuities businesses that will be disposed of via reinsurance are reported in businesses exited or to be exited through reinsurance or divestment which is an adjustment to the Company's U.S. GAAP revenues and earnings measures to calculate Adjusted operating revenues and Adjusted operating earnings before income taxes, respectively. The Company's loss on sale estimate includes the effect of charges associated with the termination or recapture of certain existing reinsurance arrangements.

The 2018 Transaction

The Company has determined that the CBVA and Annuities businesses disposed of in the 2018 Transaction disclosed in the Business, Basis of Presentation and Significant Accounting Policies Note to these Condensed Consolidated Financial Statements meet the criteria to be classified as discontinued operations and that the sale represents a strategic shift that has a major effect on the Company’s operations.  Accordingly, the results of operations of the businesses sold have been presented as discontinued operations in the accompanying Condensed Consolidated Statements of Operations and Condensed Consolidated Statements of Cash Flows for all periods presented.

Income (loss) from discontinued operations for the six months ended June 30, 2019 included an additional loss on sale of $ 82 related to purchase price true-up amounts with VA Capital which was settled during the second quarter of 2019.

Upon execution of the Individual Life Transaction including the reinsurance arrangements disclosed in the Individual Life Transaction section above, the Company will continue to hold an insignificant number of Individual Life, Annuities and CBVA policies. These policies are referred to in this Quarterly Report on Form 10-Q as "Residual Runoff Business".

---

3. Investments (excluding Consolidated Investment Entities)

Fixed Maturities

Available-for-sale and fair value option ("FVO") fixed maturities were as follows as of June 30, 2020:

			Amortized Cost						Gross Unrealized Capital Gains						Gross Unrealized Capital Losses						Embedded Derivatives (2)						Fair Value						Allowance for credit losses
Fixed maturities:
U.S. Treasuries			$	1,049					$	495					$	—					$	—					$	1,544					$	—
U.S. Government agencies and authorities			74						29						—						—						103						—
State, municipalities and political subdivisions			1,206						163						1						—						1,368						—
U.S. corporate public securities			12,592						2,497						47						—						15,042						—
U.S. corporate private securities			5,545						716						42						—						6,219						—
Foreign corporate public securities and foreign governments (1)			3,844						532						16						—						4,360						—
Foreign corporate private securities (1)			4,381						315						40						—						4,653						3
Residential mortgage-backed securities			5,681						284						44						27						5,946						2
Commercial mortgage-backed securities			3,763						251						167						—						3,847						—
Other asset-backed securities			2,122						26						60						—						2,076						12
Total fixed maturities, including securities pledged			40,257						5,308						417						27						45,158						17
Less: Securities pledged			950						183						11						—						1,122						—
Total fixed maturities			$	39,307					$	5,125					$	406					$	27					$	44,036					$	17

⁽¹⁾ Primarily U.S. dollar denominated.

⁽²⁾ Embedded derivatives within fixed maturity securities are reported with the host investment. The changes in fair value of embedded derivatives are reported in Other net realized capital gains (losses) in the Condensed Consolidated Statements of Operations.

---

Available-for-sale and FVO fixed maturities were as follows as of December 31, 2019:

			Amortized Cost						Gross Unrealized Capital Gains						Gross Unrealized Capital Losses						Embedded Derivatives (2)						Fair Value						OTTI (3)(4)
Fixed maturities:
U.S. Treasuries			$	1,074					$	308					$	—					$	—					$	1,382					$	—
U.S. Government agencies and authorities			74						21						—						—						95						—
State, municipalities and political subdivisions			1,220						103						—						—						1,323						—
U.S. corporate public securities			12,980						1,977						19						—						14,938						—
U.S. corporate private securities			5,568						488						21						—						6,035						—
Foreign corporate public securities and foreign governments (1)			3,887						460						6						—						4,341						—
Foreign corporate private securities (1)			4,545						288						2						—						4,831						—
Residential mortgage-backed securities			4,999						200						14						19						5,204						5
Commercial mortgage-backed securities			3,402						176						4						—						3,574						—
Other asset-backed securities			2,058						22						25						—						2,055						1
Total fixed maturities, including securities pledged			39,807						4,043						91						19						43,778						6
Less: Securities pledged			1,264						154						10						—						1,408						—
Total fixed maturities			$	38,543					$	3,889					$	81					$	19					$	42,370					$	6

⁽¹⁾ Primarily U.S. dollar denominated.

⁽²⁾ Embedded derivatives within fixed maturity securities are reported with the host investment. The changes in fair value of embedded derivatives are reported in Other net realized capital gains (losses) in the Condensed Consolidated Statements of Operations.

⁽³⁾ Represents OTTI reported as a component of Other comprehensive income (loss).

⁽⁴⁾ Amount excludes $ 336 of net unrealized gains on impaired available-for-sale securities.

The amortized cost and fair value of fixed maturities, including securities pledged, as of June 30, 2020, are shown below by contractual maturity. Actual maturities may differ from contractual maturities as securities may be restructured, called or prepaid. Mortgage-backed securities ("MBS") and Other asset-backed securities ("ABS") are shown separately because they are not due at a single maturity date.

			Amortized Cost						Fair Value
Due to mature:
One year or less			$	1,273					$	1,281
After one year through five years			4,991						5,259
After five years through ten years			7,814						8,652
After ten years			14,613						18,097
Mortgage-backed securities			9,444						9,793
Other asset-backed securities			2,122						2,076
Fixed maturities, including securities pledged			$	40,257					$	45,158

The investment portfolio is monitored to maintain a diversified portfolio on an ongoing basis. Credit risk is mitigated by monitoring concentrations by issuer, sector and geographic stratification and limiting exposure to any one issuer.

---

As of June 30, 2020 and December 31, 2019, the Company did not have any investments in a single issuer, other than obligations of the U.S. Government and government agencies, with a carrying value in excess of 10% of the Company’s Total shareholders' equity.

The following tables present the composition of the U.S. and foreign corporate securities within the fixed maturity portfolio by industry category as of the dates indicated:

			Amortized Cost						Gross Unrealized Capital Gains						Gross Unrealized Capital Losses						Fair Value
June 30, 2020
Communications			$	1,665					$	374					$	1					$	2,038
Financial			3,949						668						9						4,608
Industrial and other companies			11,389						1,692						48						13,033
Energy			2,567						333						56						2,844
Utilities			4,948						790						4						5,734
Transportation			1,224						126						22						1,328
Total			$	25,742					$	3,983					$	140					$	29,585
December 31, 2019
Communications			$	1,694					$	295					$	—					$	1,989
Financial			4,067						535						1						4,601
Industrial and other companies			11,669						1,274						16						12,927
Energy			2,819						368						27						3,160
Utilities			4,895						561						1						5,455
Transportation			1,206						116						2						1,320
Total			$	26,350					$	3,149					$	47					$	29,452

The Company has elected the FVO for certain of its fixed maturities to better match the measurement of assets and liabilities in the Condensed Consolidated Statements of Operations. Certain collateralized mortgage obligations ("CMOs"), primarily interest-only and principal-only strips, are accounted for as hybrid instruments and reported at fair value with changes in the fair value recorded in Other net realized capital gains (losses) in the Condensed Consolidated Statements of Operations.

The Company invests in various categories of CMOs, including CMOs that are not agency-backed, that are subject to different degrees of risk from changes in interest rates and defaults. The principal risks inherent in holding CMOs are prepayment and extension risks related to significant decreases and increases in interest rates resulting in the prepayment of principal from the underlying mortgages, either earlier or later than originally anticipated. As of June 30, 2020 and December 31, 2019, approximately 44.4 % and 43.4 %, respectively, of the Company's CMO holdings, were invested in the above mentioned types of CMOs such as interest-only or principal-only strips, that are subject to more prepayment and extension risk than traditional CMOs.

Public corporate fixed maturity securities are distinguished from private corporate fixed maturity securities based upon the manner in which they are transacted. Public corporate fixed maturity securities are issued initially through market intermediaries on a registered basis or pursuant to Rule 144A under the Securities Act of 1933 (the "Securities Act") and are traded on the secondary market through brokers acting as principal. Private corporate fixed maturity securities are originally issued by borrowers directly to investors pursuant to Section 4(a)(2) of the Securities Act, and are traded in the secondary market directly with counterparties, either without the participation of a broker or in agency transactions.

---

Repurchase Agreements

As of June 30, 2020 and December 31, 2019, the Company did not have any securities pledged in dollar rolls or reverse repurchase agreements. As of June 30, 2020, the carrying value of securities pledged and obligation to repay loans related to repurchase agreement transaction was $ 83 and included in Securities pledged and Payables under securities loan and repurchase agreements, including collateral held on the Condensed Consolidated Balance Sheets. As of December 31, 2019, the carrying value of securities pledged and obligation to repay loans related to repurchase agreement transaction was $ 66 . Securities pledged related to repurchase agreements are comprised of other asset-backed securities.

Securities Lending

The Company engages in securities lending whereby the initial collateral is required at a rate of 102 % of the market value of the loaned securities. The lending agent retains the collateral and invests it in high quality liquid assets on behalf of the Company. The market value of the loaned securities is monitored on a daily basis with additional collateral obtained or refunded as the market value of the loaned securities fluctuates. The lending agent indemnifies the Company against losses resulting from the failure of a counterparty to return securities pledged where collateral is insufficient to cover the loss. As of June 30, 2020 and December 31, 2019, the fair value of loaned securities was $ 838 and $ 1,159 , respectively, and is included in Securities pledged on the Condensed Consolidated Balance Sheets.

If cash is received as collateral, the lending agent retains the cash collateral and invests it in short-term liquid assets on behalf of the Company. As of June 30, 2020 and December 31, 2019, cash collateral retained by the lending agent and invested in short-term liquid assets on the Company's behalf was $ 749 and $ 1,055 , respectively, and is recorded in Short-term investments under securities loan agreements, including collateral delivered on the Condensed Consolidated Balance Sheets. As of June 30, 2020 and December 31, 2019, liabilities to return collateral of $ 749 and $ 1,055 , respectively, are included in Payables under securities loan and repurchase agreements, including collateral held on the Condensed Consolidated Balance Sheets.

The Company accepts non-cash collateral in the form of securities. The securities retained as collateral by the lending agent may not be sold or re-pledged, except in the event of default, and are not reflected on the Company’s Condensed Consolidated Balance Sheets. This collateral generally consists of U.S. Treasury, U.S. Government agency securities and MBS pools. As of June 30, 2020 and December 31, 2019, the fair value of securities retained as collateral by the lending agent on the Company’s behalf was $ 117 and $ 146 , respectively.

The following table presents borrowings under securities lending transactions by asset class pledged as of the dates indicated:

			June 30, 2020 (1)(2)						December 31, 2019 (1)(2)
U.S. Treasuries			$	173					$	213
U.S. Government agencies and authorities			12						15
U.S. corporate public securities			415						684
Equity Securities			3						—
Foreign corporate public securities and foreign governments			263						289
Payables under securities loan agreements			$	866					$	1,201

⁽¹⁾ As of June 30, 2020 and December 31, 2019, borrowings under securities lending transactions include cash collateral of $ 749 and $ 1,055 , respectively.

⁽²⁾ As of June 30, 2020 and December 31, 2019, borrowings under securities lending transactions include non-cash collateral of $ 117 and $ 146 , respectively.

The Company's securities lending activities are conducted on an overnight basis, and all securities loaned can be recalled at any time. The Company does not offset assets and liabilities associated with its securities lending program.

---

Allowance for credit losses

The following table presents a rollforward of the allowance for credit losses on available-for-sale fixed maturity securities for the period presented:

			Six Months Ended June 30, 2020
			Residential mortgage-backed securities						Commercial mortgage-backed securities						Foreign corporate private securities						Other asset-backed securities						Total
Balance as of January 1			$	—					$	—					$	—					$	—					$	—
Credit losses on securities for which credit losses were not previously recorded			2						—						3						12						17
Initial allowance for credit losses recognized on financial assets accounted for as PCD			—						—						—						—						—
Reductions for securities sold during the period			—						—						—						—						—
Reductions for intent to sell or more likely than not will be required to sell securities prior to recovery of amortized cost			—						—						—						—						—
Increase (decrease) on securities with allowance recorded in previous period			—						—						—						—						—
Write-offs			—						—						—						—						—
Recoveries of amounts previously written off			—						—						—						—						—
Balance as of June 30			$	2					$	—					$	3					$	12					$	17

---

Unrealized Capital Losses

The following table presents available-for-sale fixed maturities, including securities pledged, for which an allowance for credit losses has not been recorded by market sector and duration as of the date indicated:

			Twelve Months or Less Below Amortized Cost																																										More Than Twelve Months Below Amortized Cost																														Total
			Fair Value						Unrealized Capital Losses						Number of securities																		Fair Value						Unrealized Capital Losses						Number of securities						Fair Value						Unrealized Capital Losses						Number of securities
June 30, 2020
U.S. Treasuries			$	—					$	—					—																		$	—					$	—					—						$	—					$	—					—
State, municipalities and political subdivisions			33						1						10																		1						—						1						34						1						11
U.S. corporate public securities			686						39						111																		45						8						11						731						47						122
U.S. corporate private securities			373						12						31																		129						30						10						502						42						41
Foreign corporate public securities and foreign governments			183						13						38																		31						3						6						214						16						44
Foreign corporate private securities			442						37						32																		65						3						6						507						40						38
Residential mortgage-backed			884						34						161																		166						10						79						1,050						44						240
Commercial mortgage-backed			1,629						166						247																		9						1						1						1,638						167						248
Other asset-backed			996						31						205																		381						29						122						1,377						60						327
Total			$	5,226					$	333					835																		$	827					$	84					236						$	6,053					$	417					1,071

The Company concluded that an allowance for credit losses was unnecessary for these securities because the unrealized losses are interest rate related.

---

Unrealized capital losses (including noncredit impairments), along with the fair value of fixed maturity securities, including securities pledged, by market sector and duration were as follows as of December 31, 2019:

			Twelve Months or Less Below Amortized Cost																														More Than Twelve Months Below Amortized Cost																		Total
			Fair Value						Unrealized Capital Losses																		Fair Value						Unrealized Capital Losses						Fair Value						Unrealized Capital Losses
U.S. Treasuries			$	2					$	—		*															$	21					$	—		*			$	23					$	—		*
State, municipalities and political subdivisions			25						—			*															1						—			*			26						—			*
U.S. corporate public securities			122						3																		199						16						321						19
U.S. corporate private securities			113						1																		195						20						308						21
Foreign corporate public securities and foreign governments			15						—			*															103						6						118						6
Foreign corporate private securities			36						—			*															78						2						114						2
Residential mortgage-backed			730						8																		194						6						924						14
Commercial mortgage-backed			472						4																		18						—			*			490						4
Other asset-backed			308						5																		641						20						949						25
Total			$	1,823					$	21																	$	1,450					$	70					$	3,273					$	91
Total number of securities in an unrealized loss position			334																								338												672

*Less than $1.

Based on the Company's quarterly evaluation of its securities in a unrealized loss position, described below, the Company concluded that these securities were not impaired as of June 30, 2020. The Company does not intend to sell the investments and it is not more likely than not that the Company will be required to sell the investments before recovery of their amortized cost bases.

See the Business, Basis of Presentation and Significant Accounting Policies Note these Condensed Consolidated Financial Statements for the policy used to evaluate whether the investments are impaired.

Gross unrealized capital losses on fixed maturities, including securities pledged, increased $ 326 from $ 91 to $ 417 for the six months ended June 30, 2020. The increase in gross unrealized capital losses was primarily due to non-credit related market factors.

At June 30, 2020, $ 8 of the total $ 417 of gross unrealized losses were from 5 available-for-sale fixed maturity securities with an unrealized loss position of 20% or more of amortized cost for 12 months or greater.

Evaluating Securities for Impairments

The Company performs a regular evaluation, on a security-by-security basis, of its available-for-sale securities holdings, including fixed maturity securities, in accordance with its impairment policy in order to evaluate whether such investments are impaired.

---

The following table identifies the Company's impairments included in the Condensed Consolidated Statements of Operations, excluding impairments included in Other comprehensive income (loss) by type for the periods indicated:

			Three Months Ended June 30,
			2020																		2019
			Impairment						No. of Securities						Impairment						No. of Securities
State, municipalities and political subdivisions			$	—					11						$	—					—
U.S. corporate public securities			11						67						—						—
U.S. corporate private securities			—						6						—						—
Foreign corporate public securities and foreign governments (1)			4						35						3						1
Foreign corporate private securities (1)			6						12						—						—
Residential mortgage-backed			4						41						—			*			7
Commercial mortgage-backed			24						116						—						—
Other asset-backed			1						74						—			*			1
Total			$	50					362						$	3					9
Credit Impairments			$	—											$	—
Intent Impairments			$	50											$	3
(1) Primarily U.S. dollar denominated.
*Less than $1
			Six Months Ended June 30,
			2020																		2019
			Impairment						No. of Securities						Impairment						No. of Securities
State, municipalities and political subdivisions			$	—					11						$	—					—
U.S. corporate public securities			30						69						—						—
U.S. corporate private securities			—						6						—						—
Foreign corporate public securities and foreign governments (1)			4						35						3						1
Foreign corporate private securities (1)			6						12						25						3
Residential mortgage-backed			5						47						—			*			18
Commercial mortgage-backed			24						117						—						—
Other asset-backed			1						74						1						3
Total			$	70					371						$	29					25
Credit Impairments			$	—											$	26
Intent Impairments			$	70											$	3
(1) Primarily U.S. dollar denominated.
*Less than $1

The Company may sell securities during the period in which fair value has declined below amortized cost for fixed maturities. In certain situations, new factors, including changes in the business environment, can change the Company’s previous intent to continue holding a security. Accordingly, these factors may lead the Company to record additional intent related capital losses.

For the three months ended June 30, 2020 intent impairments in the amount of $ 50 were recorded on assets designated to be included in the reinsurance agreement associated with the Individual Life Transaction.

---

Troubled Debt Restructuring

The Company invests in high quality, well performing portfolios of commercial mortgage loans and private placements. Under certain circumstances, modifications are granted to these contracts. Each modification is evaluated as to whether a troubled debt restructuring has occurred. A modification is a troubled debt restructuring when the borrower is in financial difficulty and the creditor makes concessions. Generally, the types of concessions may include reducing the face amount or maturity amount of the debt as originally stated, reducing the contractual interest rate, extending the maturity date at an interest rate lower than current market interest rates and/or reducing accrued interest. The Company considers the amount, timing and extent of the concession granted in determining any impairment or changes in the specific credit allowance recorded in connection with the troubled debt restructuring. A credit allowance may have been recorded prior to the quarter when the loan is modified in a troubled debt restructuring. Accordingly, the carrying value (net of the allowance) before and after modification through a troubled debt restructuring may not change significantly, or may increase if the expected recovery is higher than the pre-modification recovery assessment. For the three and six months ended June 30, 2020, the Company did no t have any new commercial mortgage loan or new private placement troubled debt restructuring. For the three and six months ended June 30, 2019, the Company did no t have any new commercial mortgage loan troubled debt restructuring. For the three months ended June 30, 2019, the Company did no t have any new private placement troubled debt restructuring. For the six months ended June 30, 2019, the Company had one new private placement troubled debt restructuring with a pre-modification cost basis of $ 107 and a post-modification carrying value of $ 80 .

For the three and six months ended June 30, 2020 and June 30, 2019, the Company did not have any commercial mortgage loans or private placements modified in a troubled debt restructuring with a subsequent payment default.

Mortgage Loans on Real Estate

The Company diversifies its commercial mortgage loan portfolio by geographic region and property type to reduce concentration risk. The Company manages risk when originating commercial mortgage loans by generally lending only up to 75 % of the estimated fair value of the underlying real estate. Subsequently, the Company continuously evaluates mortgage loans based on relevant current information including a review of loan-specific performance, property characteristics and market trends. Loan performance is monitored on a loan specific basis through the review of submitted appraisals, operating statements, rent revenues and annual inspection reports, among other items. This review ensures properties are performing at a consistent and acceptable level to secure the debt. The components to evaluate debt service coverage are received and reviewed at least annually to determine the level of risk.

Loan-to-value ("LTV") and debt service coverage ("DSC") ratios are measures commonly used to assess the risk and quality of mortgage loans. The LTV ratio, calculated at time of origination, is expressed as a percentage of the amount of the loan relative to the value of the underlying property. A LTV ratio in excess of 100 % indicates the unpaid loan amount exceeds the underlying collateral. The DSC ratio, based upon the most recently received financial statements, is expressed as a percentage of the amount of a property’s net income to its debt service payments. A DSC ratio of less than 1.0 indicates that a property’s operations do not generate sufficient income to cover debt payments. These ratios are utilized as part of the review process described above.

The following tables present commercial mortgage loans by year of origination and LTV ratio as of the dates indicated. The information is updated as of June 30, 2020 and December 31, 2019, respectively.

---

			As of June 30, 2020
			Loan-to-Value Ratios
Year of Origination			0 % - 50 %						> 50 % - 60 %						> 60 % - 70 %						> 70 % - 80 %						> 80 % and above						Total
2020			$	117					$	153					$	28					$	—					$	—					$	298
2019			375						218						106						15						—						714
2018			205						158						97						—						—						460
2017			668						432						18						—						—						1,118
2016			626						328						7						—						—						961
2015			625						121						—						—						—						746
2014 and prior			1,960						616						31						—						—						2,607
Total			$	4,576					$	2,026					$	287					$	15					$	—					$	6,904

			As of December 31, 2019
			Loan-to-Value Ratios
Year of Origination			0 % - 50 %						> 50 % - 60 %						> 60 % - 70 %						> 70 % - 80 %						> 80 % and above						Total
2020			$	—					$	—					$	—					$	—					$	—					$	—
2019			121						138						227						211						26						723
2018			11						141						188						159						14						513
2017			153						283						697						12						15						1,160
2016			122						221						579						50						—						972
2015			39						502						248						15						—						804
2014 and prior			241						438						1,771						256						1						2,707
Total			$	687					$	1,723					$	3,710					$	703					$	56					$	6,879

The following tables present commercial mortgage loans by year of origination and DSC ratio as of the dates indicated. The information is updated as of June 30, 2020 and December 31, 2019, respectively.

			As of June 30, 2020
			Debt Service Coverage Ratios
Year of Origination			> 1.5 x						> 1.25 x - 1.5 x						> 1.0 x - 1.25 x						< 1.0 x						Commercial mortgage loans secured by land or construction loans						Total
2020			$	249					$	38					$	11					$	—					$	—					$	298
2019			541						108						65						—						—						714
2018			295						28						97						40						—						460
2017			596						269						173						80						—						1,118
2016			860						67						30						4						—						961
2015			692						47						7						—						—						746
2014 and prior			2,197						221						119						70						—						2,607
Total			$	5,430					$	778					$	502					$	194					$	—					$	6,904

---

			As of December 31, 2019
			Debt Service Coverage Ratios
Year of Origination			> 1.5 x						> 1.25 x - 1.5 x						> 1.0 x - 1.25 x						< 1.0 x						Commercial mortgage loans secured by land or construction loans						Total
2020			$	—					$	—					$	—					$	—					$	—					$	—
2019			493						165						66						—						—						724
2018			351						13						88						61						—						513
2017			608						292						167						93						—						1,160
2016			873						63						31						4						—						971
2015			743						50						6						6						—						805
2014 and prior			2,265						210						139						92						—						2,706
Total			$	5,333					$	793					$	497					$	256					$	—					$	6,879

The following tables present the commercial mortgage loans by year of origination and U.S. region as of the dates indicated. The information is updated as of June 30, 2020 and December 31, 2019, respectively.

			As of June 30, 2020
			U.S. Region
Year of Origination			Pacific						South Atlantic						Middle Atlantic						West South Central						Mountain						East North Central						New England						West North Central						East South Central						Total
2020			$	75					$	138					$	17					$	23					$	16					$	8					$	—					$	—					$	21					$	298
2019			99						202						21						188						69						65						18						14						38						714
2018			106						156						71						38						59						16						—						14						—						460
2017			175						126						429						170						104						63						6						45						—						1,118
2016			275						178						189						46						106						119						14						28						6						961
2015			210						188						168						39						54						64						11						12						—						746
2014 and prior			708						534						383						209						268						234						61						166						44						2,607
Total			$	1,648					$	1,522					$	1,278					$	713					$	676					$	569					$	110					$	279					$	109					$	6,904

			As of December 31, 2019
			U.S. Region
Year of Origination			Pacific						South Atlantic						Middle Atlantic						West South Central						Mountain						East North Central						New England						West North Central						East South Central						Total
2020			$	—					$	—					$	—					$	—					$	—					$	—					$	—					$	—					$	—					$	—
2019			100						200						35						187						67						63						18						15						37						722
2018			106						182						73						47						60						16						—						14						15						513
2017			177						128						464						171						107						63						6						45						—						1,161
2016			277						181						193						47						107						119						14						28						6						972
2015			226						218						171						43						54						68						12						12						—						804
2014 and prior			741						553						390						224						275						242						67						169						46						2,707
Total			$	1,627					$	1,462					$	1,326					$	719					$	670					$	571					$	117					$	283					$	104					$	6,879

---

The following tables present the commercial mortgage loans by year of origination and property type as of the dates indicated. The information is updated as of June 30, 2020 and December 31, 2019, respectively.

			As of June 30, 2020
			Property Type
Year of Origination			Retail						Industrial						Apartments						Office						Hotel/Motel						Other						Mixed Use						Total
2020			$	49					$	8					$	117					$	124					$	—					$	—					$	—					$	298
2019			55						129						391						105						34						—						—						714
2018			78						111						206						25						4						36						—						460
2017			140						520						266						188						4						—						—						1,118
2016			177						307						262						191						10						9						5						961
2015			165						282						129						78						24						68						—						746
2014 and prior			1,179						221						480						366						101						205						55						2,607
Total			$	1,843					$	1,578					$	1,851					$	1,077					$	177					$	318					$	60					$	6,904

			As of December 31, 2019
			Property Type
Year of Origination			Retail						Industrial						Apartments						Office						Hotel/Motel						Other						Mixed Use						Total
2020			$	—					$	—					$	—					$	—					$	—					$	—					$	—					$	—
2019			55						130						400						105						32						—						—						722
2018			83						122						221						46						4						36						—						512
2017			142						557						268						190						4						—						—						1,161
2016			179						312						263						192						10						10						6						972
2015			198						285						133						90						30						69						—						805
2014 and prior			1,216						230						512						376						108						209						56						2,707
Total			$	1,873					$	1,636					$	1,797					$	999					$	188					$	324					$	62					$	6,879

The following table summarizes the activity in the allowance for losses for commercial mortgage loans for the periods indicated:

			June 30, 2020
Allowance for credit losses, balance at January 1			$	16
Credit losses on mortgage loans for which credit losses were not previously recorded			4
Initial allowance for credit losses recognized on financial assets accounted for as PCD			—
Increase (decrease) on mortgage loans with allowance recorded in previous period			54
Provision for expected credit losses			74
Writeoffs			—
Recoveries of amounts previously written off			—
Allowance for credit losses, end of period			$	74

COVID-19 is driving the allowance increase for the Commercial Mortgage Loan portfolio. The pandemic first manifested in the economy in March resulting in travel reduction, restaurant closures and work from home situations for most companies. Updated information on the macroeconomic impact of COVID-19 includes higher probability of default and loss given default

---

in the portfolio. As a result of updated model scenarios, the Company observed consistent increases across property types such as apartments, office and retail, but a much larger spike in the hotel sector.

To provide temporary financial assistance to our commercial mortgage loans borrowers adversely affected by COVID-19 related stress, the Company has provided payment forbearance to approximately 8 % of the outstanding principal amount of our commercial mortgage loans. Deferred payment amounts are expected to be repaid across the 12 months following the end of the agreed upon forbearance period. No modifications to any commercial mortgage loans have been made as of the issuance date of this filing.

As of June 30, 2020, the Company identified 578 commercial mortgage loans with an amortized cost balance of $ 1,249 in connection with the reinsurance transactions occurring immediately after the closing of the Individual Life Transaction. These commercial mortgage loans are reported with the Company's Mortgage loans on real estate on the Condensed Consolidated Balance Sheets as of June 30, 2020. These commercial mortgage loans are held at lower of cost or market at June 30, 2020 resulting in an immaterial addition to the allowance for credit losses. Additionally, included in the allowance for credit losses table above are allowances of $ 11 associated with the identified commercial mortgages that will be transferred to the comfort trust as part of the reinsurance portion of the Individual Life Transaction.

The following table presents past due commercial mortgage loans as of the dates indicated:

			June 30, 2020						December 31, 2019
Delinquency:
Current			$	6,895					$	6,879
30-59 days past due			—						—
60-89 days past due			—						—
Greater than 90 days past due			9						—
Total			$	6,904					$	6,879

Commercial mortgage loans are placed on non-accrual status when 90 days in arrears if the Company has concerns regarding the collectability of future payments, or if a loan has matured without being paid off or extended. As of June 30, 2020, the company had one commercial mortgage loan in non-accrual status. As of December 31, 2019, the Company had no commercial mortgage loans in non-accrual status. There was no interest income recognized on loans in non-accrual status for the six months ended June 30, 2020 and at December 31, 2019.

As of June 30, 2020 and December 31, 2019, the Company had no commercial mortgage loans that were over 90 days or more past due but are not on non-accrual status. The Company had no commercial mortgage loans on non-accrual status for which there is no related allowance for credit losses as of June 30, 2020.

Net Investment Income

The following table summarizes Net investment income for the periods indicated:

			Three Months Ended June 30,																		Six Months Ended June 30,
			2020						2019						2020						2019
Fixed maturities			$	596					$	556					$	1,167					$	1,111
Equity securities			3						2						6						5
Mortgage loans on real estate			73						82						147						161
Policy loans			12						12						23						23
Short-term investments and cash equivalents			1						2						3						6
Other			( 83 )						75						( 28 )						98
Gross investment income			602						729						1,318						1,404
Less: investment expenses			16						17						34						34
Net investment income			$	586					$	712					$	1,284					$	1,370

---

As of June 30, 2020 and December 31, 2019, the Company had $ 22 and $ 1 , respectively, of investments in fixed maturities that did not produce net investment income. Fixed maturities are moved to a non-accrual status when the investment defaults.

Interest income on fixed maturities is recorded when earned using an effective yield method, giving effect to amortization of premiums and accretion of discounts. Such interest income is recorded in Net investment income in the Condensed Consolidated Statements of Operations.

Net Realized Capital Gains (Losses)

Net realized capital gains (losses) comprise the difference between the amortized cost of investments and proceeds from sale and redemption, as well as losses incurred due to the credit-related and intent-related impairment of investments. Realized investment gains and losses are also primarily generated from changes in fair value of embedded derivatives within products and fixed maturities, changes in fair value of fixed maturities recorded at FVO and changes in fair value including accruals on derivative instruments, except for effective cash flow hedges. Net realized capital gains (losses) also include changes in fair value of equity securities. The cost of the investments on disposal is generally determined based on first-in-first-out ("FIFO") methodology.

Net realized capital gains (losses) were as follows for the periods indicated:

			Three Months Ended June 30,
			2020						2019
Fixed maturities, available-for-sale, including securities pledged			$	( 16 )					$	10
Fixed maturities, at fair value option			14						100
Equity securities			14						6
Derivatives			( 3 )						( 82 )
Embedded derivatives - fixed maturities			( 1 )						1
Guaranteed benefit derivatives			45						( 13 )
Mortgage Loans			( 53 )						—
Other investments			( 1 )						3
Net realized capital gains (losses)			$	( 1 )					$	25
			Six Months Ended June 30,
			2020						2019
Fixed maturities, available-for-sale, including securities pledged			$	( 52 )					$	( 13 )
Fixed maturities, at fair value option			47						167
Equity securities			4						11
Derivatives			( 33 )						( 146 )
Embedded derivatives - fixed maturities			7						2
Guaranteed benefit derivatives			( 148 )						( 8 )
Mortgage Loans			( 58 )						—
Other investments			( 1 )						—
Net realized capital gains (losses)			$	( 234 )					$	13

For the three and six months ended June 30, 2020 and 2019, the change in the fair value of equity securities still held as of June 30, 2020 and 2019 was $ 4 and $ 11 , respectively.

---

Proceeds from the sale of fixed maturities, available-for-sale, and equity securities and the related gross realized gains and losses, before tax, were as follows for the periods indicated:

			Three Months Ended June 30,																		Six Months Ended June 30,
			2020						2019						2020						2019
Proceeds on sales			$	898					$	1,135					$	1,365					$	2,724
Gross gains			79						21						90						43
Gross losses			49						7						69						31

The Company enters into the following types of derivatives:

Interest rate caps and floors: The Company uses interest rate cap contracts to hedge the interest rate exposure arising from duration mismatches between assets and liabilities. Interest rate caps are also used to hedge interest rate exposure if rates rise above a specified level. The Company uses interest rate floor contracts to hedge interest rate exposure if rates decrease below a specified level. The Company pays an upfront premium to purchase these caps and floors. The Company utilizes these contracts in non-qualifying hedging relationships.

Interest rate swaps: Interest rate swaps are used by the Company primarily to reduce market risks from changes in interest rates and to alter interest rate exposure arising from mismatches between assets and/or liabilities. Interest rate swaps are also used to hedge the interest rate risk associated with the value of assets it owns or in an anticipation of acquiring them. Using interest rate swaps, the Company agrees with another party to exchange, at specified intervals, the difference between fixed rate and floating rate interest payments, calculated by reference to an agreed upon notional principal amount. These transactions are entered into pursuant to master agreements that provide for a single net payment to be made to/from the counterparty at each due date. The Company utilizes these contracts in qualifying hedging relationships as well as non-qualifying hedging relationships.

Foreign exchange swaps: The Company uses foreign exchange or currency swaps to reduce the risk of change in the value, yield or cash flows associated with certain foreign denominated invested assets. Foreign exchange swaps represent contracts that require the exchange of foreign currency cash flows against U.S. dollar cash flows at regular periods, typically quarterly or semi-annually. The Company utilizes these contracts in qualifying hedging relationships as well as non-qualifying hedging relationships.

Credit default swaps: Credit default swaps are used to reduce credit loss exposure with respect to certain assets that the Company owns or to assume credit exposure on certain assets that the Company does not own. Payments are made to, or received from, the counterparty at specified intervals. In the event of a default on the underlying credit exposure, the Company will either receive a payment (purchased credit protection) or will be required to make a payment (sold credit protection) equal to the par minus recovery value of the swap contract. The Company utilizes these contracts in non-qualifying hedging relationships.

Total return swaps: The Company uses total return swaps as a hedge against a decrease in variable annuity account values, which are invested in certain indices. Total return swaps are also used as a hedge of other corporate liabilities. Using total return swaps, the Company agrees with another party to exchange, at specified intervals, the difference between the economic risk and reward of assets or a market index and the London Interbank Offered Rates ("LIBOR") rate, calculated by reference to an agreed upon notional principal amount. No cash is exchanged at the onset of the contracts. Cash is paid and received over the life of the contract based upon the terms of the swaps. The Company utilizes these contracts in non-qualifying hedging relationships.

Currency forwards: The Company utilizes currency forward contracts to hedge currency exposure related to its invested assets. The Company utilizes these contracts in non-qualifying hedging relationships.

---

Forwards: The Company uses forward contracts to hedge certain invested assets against movement in interest rates, particularly mortgage rates. The Company uses To Be Announced mortgage-backed securities as an economic hedge against rate movements. The Company utilizes forward contracts in non-qualifying hedging relationships.

Futures: Futures contracts are used to hedge against a decrease in certain equity indices. Such decreases may correlate to a decrease in variable annuity account values which would increase the possibility of the Company incurring an expense for guaranteed benefits in excess of account values. The Company also uses interest rate futures contracts to hedge its exposure to market risks due to changes in interest rates. The Company enters into exchange traded futures with regulated futures commissions that are members of the exchange. The Company also posts initial and variation margins, with the exchange, on a daily basis. The Company utilizes exchange-traded futures in non-qualifying hedging relationships. The Company may also use futures contracts as a hedge against an increase in certain equity indices.

Swaptions: A swaption is an option to enter into a swap with a forward starting effective date. The Company uses swaptions to hedge the interest rate exposure associated with the minimum crediting rate and book value guarantees embedded in the retirement products that the Company offers. Increases in interest rates will generate losses on assets that are backing such liabilities. In certain instances, the Company locks in the economic impact of existing purchased swaptions by entering into offsetting written swaptions. The Company pays a premium when it purchases the swaption. The Company utilizes these contracts in non-qualifying hedging relationships.

Options: The Company uses equity options to hedge against an increase in various equity indices. Such increases may result in increased payments to the holders of the fixed-index annuity ("FIA") and indexed universal life ("IUL") contracts. The Company pays an upfront premium to purchase these options. The Company utilizes these options in non-qualifying hedging relationships.

Currency Options: The Company uses currency option contracts to hedge currency exposure related to its invested assets. The Company utilizes these contracts in non-qualifying hedging relationships.

Managed custody guarantees ("MCGs"): The Company issues certain credited rate guarantees on variable fixed income portfolios that represent stand-alone derivatives. The market value is partially determined by, among other things, levels of or changes in interest rates, prepayment rates and credit ratings/spreads.

Embedded derivatives: The Company also invests in certain fixed maturity instruments and has issued certain products that contain embedded derivatives for which market value is at least partially determined by, among other things, levels of or changes in domestic and/or foreign interest rates (short-term or long-term), exchange rates, prepayment rates, equity rates or credit ratings/spreads. In addition, the Company has entered into coinsurance with funds withheld arrangements, which contain embedded derivatives.

---

The Company's use of derivatives is limited mainly to economic hedging to reduce the Company's exposure to cash flow variability of assets and liabilities, interest rate risk, credit risk, exchange rate risk and equity market risk. It is the Company's policy not to offset amounts recognized for derivative instruments and amounts recognized for the right to reclaim cash collateral or the obligation to return cash collateral arising from derivative instruments executed with the same counterparty under a master netting arrangement, which provides the Company with the legal right of offset. However, in accordance with the Chicago Mercantile Exchange ("CME") rules related to the variation margin payments, the Company is required to adjust the derivative balances with the variation margin payments related to its cleared derivatives executed through CME.

The notional amounts and fair values of derivatives from continuing operations, including amounts related to businesses to be

exited via reinsurance associated with the Individual Life Transaction, were as follows as of the dates indicated:

			June 30, 2020																														December 31, 2019
			Notional Amount						Asset Fair Value						Liability Fair Value						Notional Amount						Asset Fair Value						Liability Fair Value
Derivatives: Qualifying for hedge accounting (1)
Cash flow hedges:
Interest rate contracts			$	30					$	—					$	—					$	30					$	—					$	—
Foreign exchange contracts			794						67						1						771						12						21
Derivatives: Non-qualifying for hedge accounting (1)
Interest rate contracts			25,194						734						940						25,027						294						371
Foreign exchange contracts			132						—						1						92						—						1
Equity contracts			422						8						6						400						10						8
Credit contracts			239						—						2						237						—						2
Embedded derivatives and Managed custody guarantees:
Within fixed maturity investments			N/A						27						—						N/A						19						—
Within products			N/A						—						193						N/A						—						60
Within reinsurance agreements			N/A						—						132						N/A						—						100
Managed custody guarantees			N/A						—						17						N/A						—						—
Total									$	836					$	1,292											$	335					$	563

⁽¹⁾ Open derivative contracts are reported as Derivatives assets or liabilities on the Condensed Consolidated Balance Sheets at fair value.

N/A - Not Applicable

---

The notional amounts and fair values of derivatives for businesses held for sale were as follows as of the dates indicated:

			June 30, 2020																														December 31, 2019
			Notional Amount						Asset Fair Value						Liability Fair Value						Notional Amount						Asset Fair Value						Liability Fair Value
Derivatives: Qualifying for hedge accounting (1)
Cash flow hedges:
Interest rate contracts			$	1					$	—					$	—					$	1					$	—					$	—
Foreign exchange contracts			32						4						—						19						1						1
Derivatives: Non-qualifying for hedge accounting (1)
Interest rate contracts			2,216						47						51						2,227						49						56
Foreign exchange contracts			34						—						—						18						—						—
Equity contracts			1,850						207						18						1,753						254						20
Embedded derivatives and Managed custody guarantees:
Within fixed maturity investments			N/A						11						—						N/A						8						—
Within products			N/A						—						177						N/A						—						217
Within reinsurance agreements			N/A						—						102						N/A						—						75
Total									$	269					$	348											$	312					$	369

⁽¹⁾ Open derivative contracts are reported as Derivatives assets or liabilities on the Condensed Consolidated Balance Sheets at fair value.

N/A - Not Applicable

Based on the notional amounts, a substantial portion of the Company’s derivative positions was not designated or did not qualify for hedge accounting as part of a hedging relationship as of June 30, 2020 and December 31, 2019. The Company utilizes derivative contracts mainly to hedge exposure to variability in cash flows, interest rate risk, credit risk, foreign exchange risk and equity market risk. The majority of derivatives used by the Company are designated as product hedges, which hedge the exposure arising from insurance liabilities or guarantees embedded in the contracts the Company offers through various product lines. These derivatives do not qualify for hedge accounting as they do not meet the criteria of being "highly effective" as outlined in ASC Topic 815, but do provide an economic hedge, which is in line with the Company’s risk management objectives. The Company also uses derivatives contracts to hedge its exposure to various risks associated with the investment portfolio. The Company does not seek hedge accounting treatment for certain of these derivatives as they generally do not qualify for hedge accounting due to the criteria required under the portfolio hedging rules outlined in ASC Topic 815. The Company also uses credit default swaps coupled with other investments in order to produce the investment characteristics of otherwise permissible investments that do not qualify as effective accounting hedges under ASC Topic 815.

---

Although the Company has not elected to net its derivative exposures, the notional amounts and fair values of Over-The-Counter ("OTC") and cleared derivatives excluding exchange traded contracts for continuing operations and businesses held for sale are presented in the tables below as of the dates indicated:

			June 30, 2020
Continuing operations: (1)
			Notional Amount						Asset Fair Value						Liability Fair Value
Credit contracts			$	239					$	—					$	2
Equity contracts			282						7						4
Foreign exchange contracts			926						67						2
Interest rate contracts			22,107						734						940
									808						948
Counterparty netting (2)									( 698 )						( 698 )
Cash collateral netting (2)									( 102 )						( 249 )
Securities collateral netting (2)									( 4 )						—
Net receivables/payables									$	4					$	1

(1) Includes amounts related to businesses to be exited via reinsurance associated with the Individual Life Transaction,

⁽²⁾ Represents the netting of receivable balances with payable balances, net of collateral, for the same counterparty under eligible netting agreements.

			June 30, 2020
Businesses held for sale:
			Notional Amount						Asset Fair Value						Liability Fair Value
Credit contracts			$	—					$	—					$	—
Equity contracts			1,850						207						18
Foreign exchange contracts			66						4						—
Interest rate contracts			2,218						47						51
									258						69
Counterparty netting (1)									( 67 )						( 67 )
Cash collateral netting (1)									( 161 )						( 2 )
Securities collateral netting (1)									( 14 )						—
Net receivables/payables									$	16					$	—

⁽¹⁾ Represents the netting of receivable balances with payable balances, net of collateral, for the same counterparty under eligible netting agreements.

			December 31, 2019
Continuing operations: (1)
			Notional Amount						Asset Fair Value						Liability Fair Value
Credit contracts			$	237					$	—					$	2
Equity contracts			293						9						7
Foreign exchange contracts			863						12						22
Interest rate contracts			23,634						295						371
									316						402
Counterparty netting (2)									( 290 )						( 290 )
Cash collateral netting (2)									( 25 )						( 100 )
Securities collateral netting (2)									—						( 5 )
Net receivables/payables									$	1					$	7

(1) Includes amounts related to businesses to be exited via reinsurance associated with the Individual Life Transaction,

(2) Represents the netting of receivable balances with payable balances, net of collateral, for the same counterparty under eligible netting agreements.

---

			December 31, 2019
Businesses held for sale:
			Notional Amount						Asset Fair Value						Liability Fair Value
Credit contracts			$	—					$	—					$	—
Equity contracts			1,753						254						20
Foreign exchange contracts			37						1						1
Interest rate contracts			2,228						49						56
									304						77
Counterparty netting (1)									( 76 )						( 76 )
Cash collateral netting (1)									( 206 )						—
Securities collateral netting (1)									( 17 )						—
Net receivables/payables									$	5					$	1

(1) Represents the netting of receivable balances with payable balances, net of collateral, for the same counterparty under eligible netting agreements.

Collateral

Under the terms of the OTC Derivative International Swaps and Derivatives Association, Inc. ("ISDA") agreements, the Company may receive from, or deliver to, counterparties collateral to assure that terms of the ISDA agreements will be met with regard to the Credit Support Annex ("CSA"). The terms of the CSA call for the Company to pay interest on any cash received equal to the Federal Funds rate. To the extent cash collateral is received and delivered, it is included in Payables under securities loan and repurchase agreements, including collateral held and Short-term investments under securities loan agreements, including collateral delivered, respectively, on the Condensed Consolidated Balance Sheets and is reinvested in short-term investments. Collateral held is used in accordance with the CSA to satisfy any obligations. Investment grade bonds owned by the Company are the source of noncash collateral posted, which is reported in Securities pledged on the Condensed Consolidated Balance Sheets.

Continuing operations: As of June 30, 2020, the Company held $ 95 and pledged $ 216 of net cash collateral related to OTC derivative contracts and cleared derivative contracts, respectively. As of December 31, 2019, the Company held $ 9 and $ 82 of net cash collateral related to OTC derivative contracts and cleared derivative contracts, respectively. In addition, as of June 30, 2020, the Company delivered $ 201 of securities and held $ 9 of securities as collateral. As of December 31, 2019, the Company delivered $ 183 of securities and held no securities as collateral.

Businesses held for sale: As of June 30, 2020, the Company held $ 162 and pledged $ 2 of net cash collateral related to OTC derivative contracts and cleared derivative contracts, respectively. As of December 31, 2019, the Company held $ 213 and no net cash collateral related to OTC derivative contracts and cleared derivative contracts, respectively. In addition, as of June 30, 2020, the Company delivered $ 2 of securities and held $ 14 of securities as collateral. As of December 31, 2019, the Company delivered $ 2 of securities and held $ 18 of securities as collateral.

---

The location and effect of derivatives qualifying for hedge accounting from continuing operations, including amounts related to

businesses to be exited via reinsurance associated with the Individual Life Transaction, on the Condensed Consolidated Statements of Operations and Condensed Consolidated Statements of Comprehensive Income are as follows for the period indicated:

			Three Months Ended June 30,
			2020																		2019
			Interest Rate Contracts						Foreign Exchange Contracts						Interest Rate Contracts						Foreign Exchange Contracts
Derivatives: Qualifying for hedge accounting
Location of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income			Net investment income						Net investment income						Net investment income						Net investment income
Amount of Gain or (Loss) Recognized in Other Comprehensive Income			$	—					$	( 19 )					$	1					$	20
Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income			—						3						—						3
			Six Months Ended June 30,
			2020																		2019
			Interest Rate Contracts						Foreign Exchange Contracts						Interest Rate Contracts						Foreign Exchange Contracts
Derivatives: Qualifying for hedge accounting
Location of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income			Net investment income						Net investment income						Net investment income						Net investment income
Amount of Gain or (Loss) Recognized in Other Comprehensive Income			$	2					$	73					$	2					$	10
Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income			—						6						—						6

---

The location and amount of gain (loss) recognized from continuing operations, including amounts related to businesses to be exited via reinsurance associated with the Individual Life Transaction, in the Condensed Consolidated Statements of Operations for derivatives qualifying for hedge accounting are as follows for the period indicated:

			Three Months Ended June 30,
			2020																		2019
			Net Investment Income						Other net realized capital gains/(losses)						Net Investment Income						Other net realized capital gains/(losses)
Total amounts of line items presented in the statement of operations in which the effects of cash flow hedges are recorded			$	586					$	49					$	712					$	28
Derivatives: Qualifying for hedge accounting
Cash flow hedges:
Foreign exchange contracts:
Gain (loss) reclassified from accumulated other comprehensive income into income			3						—						3						—
			Six Months Ended June 30,
			2020																		2019
			Net Investment Income						Other net realized capital gains/(losses)						Net Investment Income						Other net realized capital gains/(losses)
Total amounts of line items presented in the statement of operations in which the effects of cash flow hedges are recorded			$	1,284					$	( 164 )					$	1,370					$	42
Derivatives: Qualifying for hedge accounting
Cash flow hedges:
Foreign exchange contracts:
Gain (loss) reclassified from accumulated other comprehensive income into income			6						—						6						—

---

The location and effect of derivatives not designated as hedging instruments from continuing operations, including amounts related to businesses to be exited via reinsurance associated with the Individual Life Transaction, on the Condensed Consolidated Statements of Operations are as follows for the periods indicated:

			Location of Gain or (Loss) Recognized in Income on Derivative						Three Months Ended June 30,
												2020						2019
Derivatives: Non-qualifying for hedge accounting
Interest rate contracts			Other net realized capital gains (losses)						$	4					$	( 79 )
Foreign exchange contracts			Other net realized capital gains (losses)						( 1 )						2
Equity contracts			Other net realized capital gains (losses)						( 9 )						( 4 )
Credit contracts			Other net realized capital gains (losses)						2						—
Embedded derivatives and Managed custody guarantees:
Within fixed maturity investments			Other net realized capital gains (losses)						( 1 )						2
Within products			Other net realized capital gains (losses)						36						( 26 )
Within reinsurance agreements			Policyholder benefits						( 125 )						( 63 )
Managed custody guarantees			Other net realized capital gains (losses)						9						—
Total									$	( 85 )					$	( 168 )
			Location of Gain or (Loss) Recognized in Income on Derivative						Six Months Ended June 30,
												2020						2019
Derivatives: Non-qualifying for hedge accounting
Interest rate contracts			Other net realized capital gains (losses)						$	( 33 )					$	( 131 )
Foreign exchange contracts			Other net realized capital gains (losses)						6						4
Equity contracts			Other net realized capital gains (losses)						( 9 )						( 21 )
Credit contracts			Other net realized capital gains (losses)						4						3
Embedded derivatives and Managed custody guarantees:
Within fixed maturity investments			Other net realized capital gains (losses)						7						3
Within products			Other net realized capital gains (losses)						( 131 )						( 84 )
Within reinsurance agreements			Policyholder benefits						( 60 )						( 122 )
Managed custody guarantees			Other net realized capital gains (losses)						( 17 )						—
Total									$	( 233 )					$	( 348 )

---

The location and effect of derivatives not designated as hedging instruments from discontinued operations on the Condensed Consolidated Statements of Operations are as follows for the periods indicated:

			Location of Gain or (Loss) Recognized in Income on Derivative															Three Months Ended June 30,
																					2020						2019
Derivatives: Non-qualifying for hedge accounting
Foreign exchange contracts			Income (loss) from discontinued operations, net of tax															$	—					$	—
Equity contracts			Income (loss) from discontinued operations, net of tax															92						15
Credit contracts			Income (loss) from discontinued operations, net of tax															—						—
Embedded derivatives and Managed custody guarantees:
Within fixed maturity investments			Income (loss) from discontinued operations, net of tax															—						1
Within products			Income (loss) from discontinued operations, net of tax															( 89 )						62
Total																		$	3					$	78
			Location of Gain or (Loss) Recognized in Income on Derivative															Six Months Ended June 30,
																					2020						2019
Derivatives: Non-qualifying for hedge accounting
Foreign exchange contracts			Income (loss) from discontinued operations, net of tax															$	1					$	—
Equity contracts			Income (loss) from discontinued operations, net of tax															( 61 )						78
Credit contracts			Income (loss) from discontinued operations, net of tax															—						1
Embedded derivatives and Managed custody guarantees:
Within fixed maturity investments			Income (loss) from discontinued operations, net of tax															2						1
Within products			Income (loss) from discontinued operations, net of tax															56						—
Total																		$	( 2 )					$	80

---

Fair Value Measurement

The following table presents the Company's hierarchy for its assets and liabilities from continuing operations, including amounts related to businesses to be exited via reinsurance associated with the Individual Life Transaction, measured at fair value on a recurring basis as of June 30, 2020:

			Level 1						Level 2						Level 3						Total
Assets:
Fixed maturities, including securities pledged:
U.S. Treasuries			$	1,195					$	349					$	—					$	1,544
U.S. Government agencies and authorities			—						103						—						103
State, municipalities and political subdivisions			—						1,368						—						1,368
U.S. corporate public securities			—						14,935						107						15,042
U.S. corporate private securities			—						4,829						1,390						6,219
Foreign corporate public securities and foreign governments (1)			—						4,360						—						4,360
Foreign corporate private securities (1)			—						4,348						305						4,653
Residential mortgage-backed securities			—						5,908						38						5,946
Commercial mortgage-backed securities			—						3,847						—						3,847
Other asset-backed securities			—						1,977						99						2,076
Total fixed maturities, including securities pledged			1,195						42,024						1,939						45,158
Equity securities			64						—						161						225
Derivatives:
Interest rate contracts			8						679						47						734
Foreign exchange contracts			—						67						—						67
Equity contracts			—						8						—						8
Cash and cash equivalents, short-term investments and short-term investments under securities loan agreements			2,805						37						—						2,842
Assets held in separate accounts			71,561						6,786						174						78,521
Total assets			$	75,633					$	49,601					$	2,321					$	127,555
Percentage of Level to total			59		%				39		%				2		%				100		%
Liabilities:
Derivatives:
Guaranteed benefit derivatives (2)			—						—						210						210
Other derivatives:
Interest rate contracts			—						893						47						940
Foreign exchange contracts			—						2						—						2
Equity contracts			1						5						—						6
Credit contracts			—						2						—						2
Embedded derivative on reinsurance			—						132						—						132
Total liabilities			$	1					$	1,034					$	257					$	1,292

⁽¹⁾ Primarily U.S. dollar denominated.

⁽²⁾ Includes GMWBL, GMWB,FIA, Stabilizer and MCGs.

---

The following table presents the Company's hierarchy for its assets and liabilities related to businesses held for sale measured at

fair value on a recurring basis as of June 30, 2020:

			Level 1						Level 2						Level 3						Total
Assets:
Fixed maturities, including securities pledged:
U.S. Treasuries			$	531					$	383					$	—					$	914
U.S. Government agencies and authorities			—						176						—						176
State, municipalities and political subdivisions			—						447						—						447
U.S. corporate public securities			—						6,213						31						6,244
U.S. corporate private securities			—						694						304						998
Foreign corporate public securities and foreign governments (1)			—						1,499						3						1,502
Foreign corporate private securities (1)			—						510						81						591
Residential mortgage-backed securities			—						577						—						577
Commercial mortgage-backed securities			—						1,066						—						1,066
Other asset-backed securities			—						579						8						587
Total fixed maturities, including securities pledged			531						12,144						427						13,102
Equity securities			2						—						2						4
Derivatives:
Interest rate contracts			—						1						46						47
Foreign exchange contracts			—						4						—						4
Equity contracts			—						40						167						207
Cash and cash equivalents, short-term investments and short-term investments under securities loan agreements			424						—						—						424
Assets held in separate accounts			1,395						—						—						1,395
Total assets			$	2,352					$	12,189					$	642					$	15,183
Percentage of Level to total			16		%				80		%				4		%				100		%
Liabilities:
Derivatives:
Guaranteed benefit derivatives - IUL			—						—						177						177
Other derivatives:
Interest rate contracts			—						5						46						51
Equity contracts			—						18						—						18
Credit contracts			—						—						—						—
Embedded derivative on reinsurance			—						102						—						102
Total liabilities			$	—					$	125					$	223					$	348

(1) Primarily U.S. dollar denominated.

---

The following table presents the Company's hierarchy for its assets and liabilities from continuing operations, including amounts related to businesses to be exited via reinsurance associated with the Individual Life Transaction, measured at fair value on a recurring basis as of December 31, 2019:

			Level 1						Level 2						Level 3						Total
Assets:
Fixed maturities, including securities pledged:
U.S. Treasuries			$	1,083					$	299					$	—					$	1,382
U.S. Government agencies and authorities			—						95						—						95
State, municipalities and political subdivisions			—						1,323						—						1,323
U.S. corporate public securities			—						14,864						74						14,938
U.S. corporate private securities			—						4,578						1,457						6,035
Foreign corporate public securities and foreign governments (1)			—						4,341						—						4,341
Foreign corporate private securities (1)			—						4,503						328						4,831
Residential mortgage-backed securities			—						5,181						23						5,204
Commercial mortgage-backed securities			—						3,574						—						3,574
Other asset-backed securities			—						1,977						78						2,055
Total fixed maturities, including securities pledged			1,083						40,735						1,960						43,778
Equity securities			68						—						128						196
Derivatives:
Interest rate contracts			2						243						49						294
Foreign exchange contracts			—						12						—						12
Equity contracts			—						10						—						10
Cash and cash equivalents, short-term investments and short-term investments under securities loan agreements			2,613						31						—						2,644
Assets held in separate accounts			75,405						6,149						116						81,670
Total assets			$	79,171					$	47,180					$	2,253					$	128,604
Percentage of Level to total			61		%				37		%				2		%				100		%
Liabilities:
Derivatives:
Guaranteed benefit derivatives (2)			—						—						60						60
Other derivatives:
Interest rate contracts			—						322						49						371
Foreign exchange contracts			—						22						—						22
Equity contracts			—						8						—						8
Credit contracts			—						2						—						2
Embedded derivative on reinsurance			—						100						—						100
Total liabilities			$	—					$	454					$	109					$	563

⁽¹⁾ Primarily U.S. dollar denominated.

⁽²⁾ Includes GMWBL, GMWB, FIA, Stabilizer and MCGs.

---

The following table presents the Company's hierarchy for its assets and liabilities related to businesses held for sale measured at

fair value on a recurring basis as of December 31, 2019:

			Level 1						Level 2						Level 3						Total
Assets:
Fixed maturities, including securities pledged:
U.S. Treasuries			$	472					$	314					$	—					$	786
U.S. Government agencies and authorities			—						161						—						161
State, municipalities and political subdivisions			—						439						—						439
U.S. corporate public securities			—						5,949						32						5,981
U.S. corporate private securities			—						596						316						912
Foreign corporate public securities and foreign governments (1)			—						1,490						7						1,497
Foreign corporate private securities (1)			—						438						80						518
Residential mortgage-backed securities			—						588						—						588
Commercial mortgage-backed securities			—						995						—						995
Other asset-backed securities			—						587						6						593
Total fixed maturities, including securities pledged			472						11,557						441						12,470
Equity securities			2						—						33						35
Derivatives:
Interest rate contracts			—						—						49						49
Foreign exchange contracts			—						1						—						1
Equity contracts			—						52						202						254
Cash and cash equivalents, short-term investments and short-term investments under securities loan agreements			533						—						—						533
Assets held in separate accounts			1,485						—						—						1,485
Total assets			$	2,492					$	11,610					$	725					$	14,827
Percentage of Level to total			17		%				78		%				5		%				100		%
Liabilities:
Derivatives:
Guaranteed benefit derivatives - IUL			$	—					$	—					$	217					$	217
Other derivatives:
Interest rate contracts			—						7						49						56
Foreign exchange contracts			—						1						—						1
Equity contracts			—						20						—						20
Embedded derivative on reinsurance			—						75						—						75
Total liabilities			$	—					$	103					$	266					$	369

1) Primarily U.S. dollar denominated.

---

Valuation of Financial Assets and Liabilities at Fair Value

Certain assets and liabilities are measured at estimated fair value on the Company’s Consolidated Balance Sheets. The Company defines fair value as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The exit price and the transaction (or entry) price will be the same at initial recognition in many circumstances. However, in certain cases, the transaction price may not represent fair value. The fair value of a liability is based on the amount that would be paid to transfer a liability to a third-party with an equal credit standing. Fair value is required to be a market-based measurement that is determined based on a hypothetical transaction at the measurement date, from a market participant’s perspective. The Company considers three broad valuation approaches when a quoted price is unavailable: (i) the market approach, (ii) the income approach and (iii) the cost approach. The Company determines the most appropriate valuation technique to use, given the instrument being measured and the availability of sufficient inputs. The Company prioritizes the inputs to fair valuation approaches and allows for the use of unobservable inputs to the extent that observable inputs are not available.

The Company utilizes a number of valuation methodologies to determine the fair values of its financial assets and liabilities in conformity with the concepts of exit price and the fair value hierarchy as prescribed in ASC Topic 820. Valuations are obtained from third-party commercial pricing services, brokers and industry-standard, vendor-provided software that models the value based on market observable inputs. The valuations obtained from third-party commercial pricing services are non-binding. The Company reviews the assumptions and inputs used by third-party commercial pricing services for each reporting period in order to determine an appropriate fair value hierarchy level. The documentation and analysis obtained from third-party commercial pricing services are reviewed by the Company, including in-depth validation procedures confirming the observability of inputs. The valuations are reviewed and validated monthly through the internal valuation committee price variance review, comparisons to internal pricing models, back testing to recent trades or monitoring of trading volumes.

The valuation approaches and key inputs for each category of assets or liabilities that are classified within Level 2 and Level 3 of the fair value hierarchy are presented below.

For fixed maturities classified as Level 2 assets, fair values are determined using a matrix-based market approach, based on prices obtained from third-party commercial pricing services and the Company’s matrix and analytics-based pricing models, which in each case incorporate a variety of market observable information as valuation inputs. The market observable inputs used for these fair value measurements, by fixed maturity asset class, are as follows:

U.S. Treasuries: Fair value is determined using third-party commercial pricing services, with the primary inputs being stripped interest and principal U.S. Treasury yield curves that represent a U.S. Treasury zero-coupon curve.

U.S. government agencies and authorities, State, municipalities and political subdivisions: Fair value is determined using third-party commercial pricing services, with the primary inputs being U.S. Treasury yield curves, trades of comparable securities, credit spreads off benchmark yields and issuer ratings.

U.S. corporate public securities, Foreign corporate public securities and foreign governments: Fair value is determined using third-party commercial pricing services, with the primary inputs being benchmark yields, trades of comparable securities, issuer ratings, bids and credit spreads off benchmark yields.

U.S. corporate private securities and Foreign corporate private securities: Fair values are determined using a matrix and analytics-based pricing model. The model incorporates the current level of risk-free interest rates, current corporate credit spreads, credit quality of the issuer and cash flow characteristics of the security. The model also considers a liquidity spread, the value of any collateral, the capital structure of the issuer, the presence of guarantees, and prices and quotes for comparably rated publicly traded securities.

---

RMBS, CMBS and ABS: Fair value is determined using third-party commercial pricing services, with the primary inputs being credit spreads off benchmark yields, prepayment speed assumptions, current and forecasted loss severity, debt service coverage ratios, collateral type, payment priority within tranche and the vintage of the loans underlying the security.

Generally, the Company does not obtain more than one vendor price from pricing services per instrument. The Company uses a hierarchy process in which prices are obtained from a primary vendor and, if that vendor is unable to provide the price, the next vendor in the hierarchy is contacted until a price is obtained or it is determined that a price cannot be obtained from a commercial pricing service. When a price cannot be obtained from a commercial pricing service, independent broker quotes are solicited. Securities priced using independent broker quotes are classified as Level 3.

Fair values of privately placed bonds are determined primarily using a matrix-based pricing model and are generally classified as Level 2 assets. The model considers the current level of risk-free interest rates, current corporate spreads, the credit quality of the issuer and cash flow characteristics of the security. Also considered are factors such as the net worth of the borrower, the value of collateral, the capital structure of the borrower, the presence of guarantees and the Company’s evaluation of the borrower’s ability to compete in its relevant market. Using this data, the model generates estimated market values, which the Company considers reflective of the fair value of each privately placed bond.

Equity securities: Level 2 and Level 3 equity securities, typically private equities or equity securities not traded on an exchange, are valued by other sources such as analytics or brokers.

Derivatives: Derivatives are carried at fair value, which is determined using the Company’s derivative accounting system in conjunction with observable key financial data from third-party sources, such as yield curves, exchange rates, S&P 500 Index prices, LIBOR and Overnight Index Swap ("OIS") rates. The Company uses OIS for valuations of collateralized interest rate derivatives, which are obtained from third-party sources. For those derivatives that are unable to be valued by the accounting system, the Company typically utilizes values established by third-party brokers. Counterparty credit risk is considered and incorporated in the Company’s valuation process through counterparty credit rating requirements and monitoring of overall exposure. It is the Company’s policy to transact only with investment grade counterparties with a credit rating of A- or better. The Company’s nonperformance risk is also considered and incorporated in the Company’s valuation process. The Company also has certain credit default swaps and options that are priced by third party vendors or by using models that primarily use market observable inputs, but contain inputs that are not observable to market participants, which have been classified as Level 3. The remaining derivative instruments are valued based on market observable inputs and are classified as Level 2.

Guaranteed benefit derivatives: The Company records reserves for annuity contracts containing GMWBL and GMWB riders. The guarantee is an embedded derivative and is required to be accounted for separately from the host variable annuity contract. The fair value of the obligation is calculated based on actuarial and capital market assumptions related to the projected cash flows, including benefits and related contract charges, over the anticipated life of the related contracts. The cash flow estimates are produced by using stochastic techniques under a variety of market return scenarios and other market implied assumptions. These derivatives are classified as Level 3 liabilities in the fair value hierarchy.

The index-crediting feature in the Company's FIA and IUL contracts is an embedded derivative that is required to be accounted for separately from the host contract. The fair value of the obligation is calculated based on actuarial and capital market assumptions related to the projected cash flows, including benefits and related contract charges, over the anticipated life of the related contracts for FIAs and over the current indexed term for IULs. The cash flow estimates are produced by market implied assumptions. These derivatives are classified as Level 3 liabilities in the fair value hierarchy.

The Company records reserves for Stabilizer and MCG contracts containing guaranteed credited rates. The guarantee is treated as an embedded derivative or a stand-alone derivative (depending on the underlying product) and is required to be reported at fair value. The estimated fair value is determined based on the present value of projected future claims, minus the present value of future guaranteed premiums. At inception of the contract, the Company projects a guaranteed premium to be equal to the present value of the projected future claims. The income associated with the contracts is projected using relevant actuarial and capital market assumptions, including benefits and related contract charges, over the anticipated life of the related contracts. The cash flow estimates are produced by using stochastic techniques under a variety of risk neutral scenarios and other market implied assumptions. These derivatives are classified as Level 3 liabilities.

---

The discount rate used to determine the fair value of the Company's GMWBL, GMWB, FIA, IUL and Stabilizer embedded derivative liabilities and the stand-alone derivative for MCG includes an adjustment to reflect the risk that these obligations will not be fulfilled ("nonperformance risk"). The nonperformance risk adjustment incorporates a blend of observable, similarly rated peer holding company credit spreads, adjusted to reflect the credit quality of the individual insurance subsidiary that issued the guarantee, as well as an adjustment to reflect the non-default spreads and the priority and recovery rates of policyholder claims.

Embedded derivatives on reinsurance: The carrying value of embedded derivatives is estimated based upon the change in the fair value of the assets supporting the funds withheld payable under reinsurance agreements. The fair value of the embedded derivative is based on market observable inputs and is classified as Level 2.

Level 3 Financial Instruments

The fair values of certain assets and liabilities are determined using prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement (i.e., Level 3 as defined by ASC Topic 820), including but not limited to liquidity spreads for investments within markets deemed not currently active. These valuations, whether derived internally or obtained from a third-party, use critical assumptions that are not widely available to estimate market participant expectations in valuing the asset or liability. In addition, the Company has determined, for certain financial instruments, an active market is such a significant input to determine fair value that the presence of an inactive market may lead to classification in Level 3. In light of the methodologies employed to obtain the fair values of financial assets and liabilities classified as Level 3, additional information is presented below.

---

The following table summarizes the change in fair value of the Company's Level 3 assets and liabilities from continuing operations, including amounts related to businesses

to be exited via reinsurance associated with the Individual Life Transaction, and transfers in and out of Level 3 for the period indicated:

			Three Months Ended June 30, 2020
			Fair Value as of April 1						Total Realized/Unrealized Gains (Losses) Included in:																		Purchases						Issuances						Sales						Settlements						Transfers into Level 3						Transfers out of Level 3						Fair Value as of June 30						Change In Unrealized Gains (Losses) Included in Earnings (3)			Change In Unrealized Gains (Losses) Included in OCI (3)
												Net Income						OCI
Fixed maturities, including securities pledged:
U.S. corporate public securities			$	66					$	—					$	( 2 )					$	—					$	—					$	—					$	—					$	43					$	—					$	107					$	—		$	( 2 )
U.S. corporate private securities			1,291						1						83						25						—						( 13 )						( 49 )						92						( 40 )						1,390						1			83
Foreign corporate public securities and foreign governments (1)			4						—						—						—						—						—						—						—						( 4 )						—						—			—
Foreign corporate private securities (1)			277						( 4 )						32						—						—						( 2 )						( 4 )						6						—						305						( 4 )			32
Residential mortgage-backed securities			30						—						—						24						—						—						—						—						( 16 )						38						—			—
Other asset-backed securities			87						( 8 )						1						20						—						—						( 1 )						—						—						99						( 8 )			1
Total fixed maturities, including securities pledged			1,755						( 11 )						114						69						—						( 15 )						( 54 )						141						( 60 )						1,939						( 11 )			114
Equity securities			119						14						—						30						—						—						( 2 )						—						—						161						14			—
Derivatives:
Guaranteed benefit derivatives (2)(5)			( 253 )						45						—						—						( 2 )						—						—						—						—						( 210 )						—			—
Assets held in separate accounts (4)			141						2						—						33						—						—						—						3						( 5 )						174						—			—

⁽¹⁾ Primarily U.S. dollar denominated.

⁽²⁾ All gains and losses on Level 3 liabilities are classified as realized gains (losses) for the purpose of this disclosure because it is impracticable to track realized and unrealized gains (losses) separately on a contract-by contract basis. These amounts are included in Other net realized gains (losses) in the Condensed Consolidated Statements of Operations.

⁽³⁾ For financial instruments still held as of June 30 amounts are included in Net investment income and Total net realized capital gains (losses) in the Condensed Consolidated Statements of Operations or Unrealized gains (losses) on securities in the Condensed Consolidated Statements of Comprehensive Income.

⁽⁴⁾ The investment income and realized gains (losses) and change in unrealized gains (losses) included in net income for separate account assets are offset by an equal amount for separate account liabilities, which results in a net zero impact on Net income (loss) for the Company.

⁽⁵⁾ Includes GMWBL, GMWB, FIA, Stabilizer and MCGs.

---

			Six Months Ended June 30, 2020
			Fair Value as of January 1						Total Realized/Unrealized Gains (Losses) Included in:																		Purchases						Issuances						Sales						Settlements						Transfers into Level 3						Transfers out of Level 3						Fair Value as of June 30						Change In Unrealized Gains (Losses) Included in Earnings (3)			Change In Unrealized Gains (Losses) Included in OCI (3)
												Net Income						OCI
Fixed maturities, including securities pledged:
U.S. corporate public securities			$	74					$	—					$	( 2 )					$	—					$	—					$	—					$	( 3 )					$	38					$	—					$	107					$	—		$	( 2 )
U.S. corporate private securities			1,457						1						10						71						—						( 16 )						( 130 )						88						( 91 )						1,390						1			10
Foreign corporate public securities and foreign governments (1)			—						—						—						—						—						—						—						—						—						—						—			—
Foreign corporate private securities (1)			328						( 7 )						( 18 )						3						—						( 6 )						( 5 )						10						—						305						( 4 )			( 18 )
Residential mortgage-backed securities			23						( 2 )						—						24						—						—						—						—						( 7 )						38						( 2 )			—
Other asset-backed securities			78						( 8 )						1						30						—						—						( 2 )						—						—						99						( 8 )			1
Total fixed maturities, including securities pledged			1,960						( 16 )						( 9 )						128						—						( 22 )						( 140 )						136						( 98 )						1,939						( 13 )			( 9 )
Equity securities			128						5						—						30						—						—						( 2 )						—						—						161						5			—
Derivatives:
Guaranteed benefit derivatives (2)(5)			( 60 )						( 148 )						—						—						( 2 )						—						—						—						—						( 210 )						—			—
Assets held in separate accounts (4)			116						( 1 )						—						80						—						( 1 )						—						3						( 23 )						174						—			—

⁽¹⁾ Primarily U.S. dollar denominated.

⁽²⁾ All gains and losses on Level 3 liabilities are classified as realized gains (losses) for the purpose of this disclosure because it is impracticable to track realized and unrealized gains (losses) separately on a contract-by contract basis. These amounts are included in Other net realized gains (losses) in the Condensed Consolidated Statements of Operations.

⁽³⁾ For financial instruments still held as of June 30 amounts are included in Net investment income and Total net realized capital gains (losses) in the Condensed Consolidated Statements of Operations or Unrealized gains (losses) on securities in the Condensed Consolidated Statements of Comprehensive Income.

⁽⁴⁾ The investment income and realized gains (losses) and change in unrealized gains (losses) included in net income for separate account assets are offset by an equal amount for separate account liabilities, which results in a net zero impact on Net income (loss) for the Company.

⁽⁵⁾ Includes GMWBL, GMWB, FIA, Stabilizer and MCGs.

---

The following table summarizes the change in fair value of the Company's Level 3 assets and liabilities related to businesses held for sale and transfers in and out of Level 3

for the period indicated:

			Three Months Ended June 30, 2020
			Fair Value as of April 1						Total Realized/Unrealized Gains (Losses) Included in:																		Purchases						Issuances						Sales						Settlements						Transfers into Level 3						Transfers out of Level 3						Fair Value as of June 30						Change In Unrealized Gains (Losses) Included in Earnings (3)			Change In Unrealized Gains (Losses) Included in OCI (3)
												Net Income						OCI
Fixed maturities, including securities pledged:
U.S. corporate public securities			$	34					$	—					$	( 2 )					$	( 1 )					$	—					$	—					$	—					$	—					$	—					$	31					$	—		$	( 2 )
U.S. corporate private securities			288						—						21						10						—						( 13 )						( 7 )						16						( 11 )						304						—			21
Foreign corporate public securities and foreign governments (1)			3						—						—						—						—						—						—						—						—						3						—			—
Foreign corporate private securities (1)			68						—						13						—						—						—						—						—						—						81						—			13
Residential mortgage-backed securities			—						—						—						—						—						—						—						—						—						—						—			—
Other asset-backed securities			7						—						—						1						—						—						—						—						—						8						—			—
Total fixed maturities, including securities pledged			400						—						32						10						—						( 13 )						( 7 )						16						( 11 )						427						—			32
Equity securities			30						3						—						—						—						( 30 )						( 1 )						—						—						2						—			—
Derivatives:
Guaranteed benefit derivatives - IUL (2)			( 81 )						( 89 )						—						—						( 18 )						—						11						—						—						( 177 )						—			—
Other derivatives, net			83						77						—						14						—						—						( 7 )						—						—						167						84			—

⁽¹⁾ Primarily U.S. dollar denominated.

⁽²⁾ All gains and losses on Level 3 liabilities are classified as realized gains (losses) for the purpose of this disclosure because it is impracticable to track realized and unrealized gains (losses) separately on a contract-by contract basis.

⁽³⁾ For financial instruments still held as of June 30 amounts are included in Income (loss) from discontinued operations, net of tax in the Condensed Consolidated Statements of Operations or Unrealized gains (losses) on securities in the Condensed Consolidated Statements of Comprehensive Income.

---

			Six Months Ended June 30, 2020
			Fair Value as of January 1						Total Realized/Unrealized Gains (Losses) Included in:																		Purchases						Issuances						Sales						Settlements						Transfers into Level 3						Transfers out of Level 3						Fair Value as of June 30						Change In Unrealized Gains (Losses) Included in Earnings (3)			Change In Unrealized Gains (Losses) Included in OCI (3)
												Net Income						OCI
Fixed maturities, including securities pledged:
U.S. corporate public securities			$	32					$	—					$	—					$	—					$	—					$	—					$	( 1 )					$	—					$	—					$	31					$	—		$	—
U.S. corporate private securities			316						—						4						19						—						( 13 )						( 17 )						17						( 22 )						304						—			4
Foreign corporate public securities and foreign governments (1)			7						—						( 4 )						—						—						—						—						—						—						3						—			( 4 )
Foreign corporate private securities (1)			80						—						—						1						—						—						—						—						—						81						—			( 1 )
Residential mortgage-backed securities			—						—						—						—						—						—						—						—						—						—						—			—
Other asset-backed securities			6						—						—						3						—						—						( 1 )						—						—						8						—			—
Total fixed maturities, including securities pledged			441						—						—						23						—						( 13 )						( 19 )						17						( 22 )						427						—			( 1 )
Equity securities			33						—						—						—						—						( 30 )						( 1 )						—						—						2						( 1 )			—
Derivatives:
Guaranteed benefit derivatives - IUL (2)			( 217 )						56						—						—						( 34 )						—						18						—						—						( 177 )						—			—
Other derivatives, net			202						( 50 )						—						28						—						—						( 13 )						—						—						167						( 35 )			—

⁽¹⁾ Primarily U.S. dollar denominated.

⁽²⁾ All gains and losses on Level 3 liabilities are classified as realized gains (losses) for the purpose of this disclosure because it is impracticable to track realized and unrealized gains (losses) separately on a contract-by contract basis.

⁽³⁾ For financial instruments still held as of June 30 amounts are included in Income (loss) from discontinued operations, net of tax in the Condensed Consolidated Statements of Operations or Unrealized gains (losses) on securities in the Condensed Consolidated Statements of Comprehensive Income.

---

The following table summarizes the change in fair value of the Company's Level 3 assets and liabilities from continuing operations, including amounts related to businesses

to be exited via reinsurance associated with the Individual Life Transaction, and transfers in and out of Level 3 for the period indicated:

			Three Months Ended June 30, 2019
			Fair Value as of April 1						Total Realized/Unrealized Gains (Losses) Included in:																		Purchases						Issuances						Sales						Settlements						Transfers into Level 3						Transfers out of Level 3						Fair Value as of June 30						Change In Unrealized Gains (Losses) Included in Earnings (3)
												Net Income						OCI
Fixed maturities, including securities pledged:
U.S. corporate public securities			$	73					$	—					$	—					$	—					$	—					$	—					$	( 5 )					$	—					$	—					$	68					$	—
U.S. corporate private securities			1,280						—						24						6						—						—						( 6 )						—						( 10 )						1,294						—
Foreign corporate public securities and foreign governments (1)			—						—						—						—						—						—						—						—						—						—						—
Foreign corporate private securities (1)			218						—						4						70						—						—						—						—						—						292						—
Residential mortgage-backed securities			49						( 2 )						—						—						—						—						—						—						( 17 )						30						( 2 )
Commercial mortgage-backed securities			13						—						—						3						—						—						—						—						( 13 )						3						—
Other asset-backed securities			131						—						—						8						—						—						( 1 )						—						( 56 )						82						—
Total fixed maturities, including securities pledged			1,764						( 2 )						28						87						—						—						( 12 )						—						( 96 )						1,769						( 2 )
Equity securities, available-for-sale			150						6						—						—						—						—						—						—						—						156						6
Derivatives:
Guaranteed benefit derivatives (2)(5)			( 41 )						( 13 )						—						—						( 7 )						—						4						—						—						( 57 )						—
Assets held in separate accounts (4)			67						2						—						33						—						—						—						—						—						102						—

⁽¹⁾ Primarily U.S. dollar denominated.

⁽²⁾ All gains and losses on Level 3 liabilities are classified as realized gains (losses) for the purpose of this disclosure because it is impracticable to track realized and unrealized gains (losses) separately on a contract-by contract basis.

These amounts are included in Other net realized gains (losses) in the Condensed Consolidated Statements of Operations.

⁽³⁾ For financial instruments still held as of June 30, amounts are included in Net investment income and Total net realized capital gains (losses) in the Condensed Consolidated Statements of Operations.

⁽⁴⁾ The investment income and realized gains (losses) and change in unrealized gains (losses) included in net income for separate account assets are offset by an equal amount for separate account liabilities, which results in a net zero impact on Net income (loss) for the Company.

⁽⁵⁾ Includes GMWBL, GMWB, FIA, Stabilizer and MCGs.

---

			Six Months Ended June 30, 2019
			Fair Value as of January 1						Total Realized/Unrealized Gains (Losses) Included in:																		Purchases						Issuances						Sales						Settlements						Transfers into Level 3						Transfers out of Level 3						Fair Value as of June 30						Change In Unrealized Gains (Losses) Included in Earnings (3)
												Net Income						OCI
Fixed maturities, including securities pledged:
U.S. corporate public securities			$	34					$	—					$	1					$	—					$	—					$	—					$	( 5 )					$	38					$	—					$	68					$	—
U.S. corporate private securities			1,134						1						67						135						—						( 14 )						( 18 )						—						( 11 )						1,294						1
Foreign corporate public securities and foreign governments (1)			—						—						—						—						—						—						—						—						—						—						—
Foreign corporate private securities (1)			217						( 25 )						38						142						—						( 80 )						—						—						—						292						1
Residential mortgage-backed securities			28						( 4 )						—						8						—						—						—						—						( 2 )						30						( 4 )
Commercial mortgage-backed securities			14						—						—						3						—						—						—						—						( 14 )						3						—
Other asset-backed securities			127						—						—						12						—						—						( 2 )						—						( 55 )						82						—
Total fixed maturities, including securities pledged			1,554						( 28 )						106						300						—						( 94 )						( 25 )						38						( 82 )						1,769						( 2 )
Equity securities, available-for-sale			104						10						—						42						—						—						—						—						—						156						10
Derivatives:
Guaranteed benefit derivatives (2)(5)			( 44 )						( 8 )						—						—						( 7 )						—						2						—						—						( 57 )						—
Assets held in separate accounts (4)			62						3						—						39						—						—						—						3						( 5 )						102						—

⁽¹⁾ Primarily U.S. dollar denominated.

⁽²⁾ All gains and losses on Level 3 liabilities are classified as realized gains (losses) for the purpose of this disclosure because it is impracticable to track realized and unrealized gains (losses) separately on a contract-by contract basis.

These amounts are included in Other net realized gains (losses) in the Condensed Consolidated Statements of Operations.

⁽³⁾ For financial instruments still held as of June 30, amounts are included in Net investment income and Total net realized capital gains (losses) in the Condensed Consolidated Statements of Operations.

⁽⁴⁾ The investment income and realized gains (losses) and change in unrealized gains (losses) included in net income for separate account assets are offset by an equal amount for separate account liabilities, which results in a net zero impact on Net income (loss) for the Company.

⁽⁵⁾ Includes GMWBL, GMWB, FIA, Stabilizer and MCGs.

---

The following table summarizes the change in fair value of the Company's Level 3 assets and liabilities related to businesses held for sale and transfers in and out of Level 3

for the period indicated:

			Three Months Ended June 30, 2019
			Fair Value as of April 1						Total Realized/Unrealized Gains (Losses) Included in:																		Purchases						Issuances						Sales						Settlements						Transfers into Level 3						Transfers out of Level 3						Fair Value as of June 30						Change In Unrealized Gains (Losses) Included in Earnings (3)
												Net Income						OCI
Fixed maturities, including securities pledged:
U.S. corporate public securities			$	35					$	—					$	—					$	—					$	—					$	—					$	—					$	—					$	( 4 )					$	31					$	—
U.S. corporate private securities			285						—						6						—						—						—						( 3 )						—						—						288						—
Foreign corporate public securities and foreign governments (1)			9						—						( 1 )						—						—						—						—						—						—						8						—
Foreign corporate private securities (1)			48						—						3						27						—						—						—						—						—						78						—
Residential mortgage-backed securities			—						—						—						—						—						—						—						—						—						—						—
Commercial mortgage-backed securities			3						—						—						—						—						—						—						—						( 3 )						—						—
Other asset-backed securities			13						—						—						8						—						—						—						—						( 7 )						14						—
Total fixed maturities including securities pledged			393						—						8						35						—						—						( 3 )						—						( 14 )						419						—
Equity securities			34						2						—						—						—						—						—						—						—						36						2
Derivatives:
Guaranteed benefit derivatives - IUL (2)			( 146 )						( 13 )						—						—						( 15 )						—						14						—						—						( 160 )						—
Other derivatives, net			137						10						—						12						—						—						( 10 )						—						—						148						11

⁽¹⁾ Primarily U.S. dollar denominated.

⁽²⁾ All gains and losses on Level 3 liabilities are classified as realized gains (losses) for the purpose of this disclosure because it is impracticable to track realized and unrealized gains (losses) separately on a contract-by contract basis.

⁽³⁾ For financial instruments still held as of June 30 amounts are included in Income (loss) from discontinued operations, net of tax in the Condensed Consolidated Statements of Operations.

---

			Six Months Ended June 30, 2019
			Fair Value as of January 1						Total Realized/Unrealized Gains (Losses) Included in:																		Purchases						Issuances						Sales						Settlements						Transfers into Level 3						Transfers out of Level 3						Fair Value as of June 30						Change In Unrealized Gains (Losses) Included in Earnings (3)
												Net Income						OCI
Fixed maturities, including securities pledged:
U.S. corporate public securities			$	10					$	—					$	1					$	—					$	—					$	—					$	—					$	22					$	( 2 )					$	31					$	1
U.S. corporate private securities			259						—						17						19						—						—						( 7 )						—						—						288						—
Foreign corporate public securities and foreign governments (1)			11						—						( 3 )						—						—						—						—						—						—						8						—
Foreign corporate private securities (1)			34						( 4 )						9						52						—						( 13 )						—						—						—						78						—
Residential mortgage-backed securities			—						—						—						—						—						—						—						—						—						—						—
Commercial mortgage-backed securities			—						—						—						—						—						—						—						—						—						—						—
Other asset-backed securities			11						—						—						8						—						—						—						—						( 5 )						14						—
Total fixed maturities including securities pledged			325						( 4 )						24						79						—						( 13 )						( 7 )						22						( 7 )						419						1
Equity securities			25						4						—						7						—						—						—						—						—						36						4
Derivatives:
Guaranteed benefit derivatives - IUL (2)			( 82 )						( 76 )						—						—						( 28 )						—						26						—						—						( 160 )						—
Other derivatives, net			83						61						—						22						—						—						( 19 )						—						—						148						65

⁽¹⁾ Primarily U.S. dollar denominated.

⁽²⁾ All gains and losses on Level 3 liabilities are classified as realized gains (losses) for the purpose of this disclosure because it is impracticable to track realized and unrealized gains (losses) separately on a contract-by contract basis.

⁽³⁾ For financial instruments still held as of June 30 amounts are included in Income (loss) from discontinued operations, net of tax in the Condensed Consolidated Statements of Operations.

---

For the three and six months ended June 30, 2020 and 2019, the transfers in and out of Level 3 for fixed maturities were due to the variation in inputs relied upon for valuation each quarter. Securities that are primarily valued using independent broker quotes when prices are not available from one of the commercial pricing services are reflected as transfers into Level 3. When securities are valued using more widely available information, the securities are transferred out of Level 3 and into Level 1 or 2, as appropriate.

Significant Unobservable Inputs

The Company's Level 3 fair value measurements of its fixed maturities, equity securities and equity and credit derivative contracts are primarily based on broker quotes..

Quantitative information about the significant unobservable inputs used in the Company's Level 3 fair value measurements of its guaranteed benefit derivatives is presented in the following sections and table.

Significant unobservable inputs used in the fair value measurements of IULs include nonperformance risk and policyholder behavior assumptions, such as lapses.

Following is a description of selected inputs:

Nonperformance Risk: For the estimate of the fair value of embedded derivatives associated with the Company's product guarantees, the Company uses a blend of observable, similarly rated peer holding company credit spreads, adjusted to reflect the credit quality of the individual insurance company subsidiary that issued the guarantee as well as an adjustment to reflect the non-default spreads and the priority and recovery rates of policyholder claims.

Actuarial Assumptions: Management regularly reviews actuarial assumptions, which are based on the Company's experience and periodically reviewed against industry standards. Industry standards and Company experience may be limited on certain products.

The following table presents the unobservable inputs for IUL for businesses held for sale as of the dates indicated:

																		June 30, 2020																		December 31, 2019
Unobservable Input																		Range (1)						Weighted Average (3)						Range (1)
Interest rate implied volatility																		—						—						—
Nonperformance risk																		0.22 % to 0.66 %						0.36		%				0.22 % to 0.42 %
Actuarial Assumptions:
Lapses																		2 % to 10 %						6		%				2 % to 10 %
Mortality																		—			(2)			—						—			(2)

⁽¹⁾ Represents the range of reasonable assumptions that management has used in its fair value calculations.

⁽²⁾ The mortality rate is derived based on similarly underwritten business

⁽³⁾ Unobservable inputs were weighted by the relative fair value of the instruments. For credit contracts, the average represents the arithmetic average of the inputs and is not weighted by the relative fair value or notional amount.

Generally, the following will cause an increase (decrease) in the IUL embedded derivative fair value liabilities:

• A decrease (increase) in nonperformance risk

• A decrease (increase) in lapses

Other Financial Instruments

The following disclosures are made in accordance with the requirements of ASC Topic 825 which requires disclosure of fair value information about financial instruments, whether or not recognized at fair value on the Consolidated Balance Sheets.

---

ASC Topic 825 excludes certain financial instruments, including insurance contracts and all nonfinancial instruments from its disclosure requirements. Accordingly, the aggregate fair value amounts presented do not represent the underlying value of the Company.

The carrying values and estimated fair values of the Company's financial instruments from continuing operations, including amounts related to businesses to be exited via reinsurance associated with the Individual Life Transaction, as of the dates indicated:

			June 30, 2020																		December 31, 2019
			Carrying Value						Fair Value						Carrying Value						Fair Value
Assets:
Fixed maturities, including securities pledged			$	45,158					$	45,158					$	43,778					$	43,778
Equity securities			225						225						196						196
Mortgage loans on real estate			6,904						7,178						6,878						7,262
Policy loans			746						746						776						776
Cash, cash equivalents, short-term investments and short-term investments under securities loan agreements			2,842						2,842						2,644						2,644
Derivatives			809						809						316						316
Other investments			286						350						320						456
Assets held in separate accounts			78,521						78,521						81,670						81,670
Liabilities:
Investment contract liabilities:
Funding agreements without fixed maturities and deferred annuities (2)			$	34,696					$	44,575					$	33,916					$	41,035
Funding agreements with fixed maturities			835						833						877						877
Supplementary contracts, immediate annuities and other			811						874						821						872
Derivatives:
Guaranteed benefit derivatives (2)			210						210						60						60
Other derivatives			950						950						403						403
Short-term debt			1						1						1						1
Long-term debt			3,043						3,400						3,042						3,418
Embedded derivative on reinsurance			132						132						100						100

⁽¹⁾ Certain amounts included in Funding agreements without fixed maturities and deferred annuities are also reflected within the Guaranteed benefit derivatives section of the table above.

⁽²⁾ Includes GMWBL, GMWB, FIA, Stabilizer and MCG.

---

The carrying values and estimated fair values of the Company's financial instruments related to businesses held for sale as of the dates indicated:

			June 30, 2020																		December 31, 2019
			Carrying Value						Fair Value						Carrying Value						Fair Value
Assets:
Fixed maturities, including securities pledged			$	13,102					$	13,102					$	12,470					$	12,470
Equity securities			4						4						35						35
Mortgage loans on real estate			1,286						1,348						1,319						1,405
Policy loans			996						996						1,005						1,005
Cash, cash equivalents, short-term investments and short-term investments under securities loan agreements			424						424						533						533
Derivatives			258						258						305						305
Other investments			46						46						42						42
Assets held in separate accounts			1,395						1,395						1,485						1,485
Liabilities:
Investment contract liabilities:
Funding agreements with fixed maturities			$	1,010					$	1,005					$	927					$	923
Supplementary contracts, immediate annuities and other			106						116						97						104
Notes Payable			219						247						252						320
Derivatives:
Guaranteed benefit derivatives - IUL			177						177						217						217
Embedded derivative on reinsurance			102						102						75						75

The following table presents the classifications of financial instruments which are not carried at fair value on the Condensed Consolidated Balance Sheets:

Financial Instrument			Classification
Mortgage loans on real estate			Level 3
Policy loans			Level 2
Other investments			Level 2
Funding agreements without fixed maturities and deferred annuities			Level 3
Funding agreements with fixed maturities			Level 2
Supplementary contracts and immediate annuities			Level 3
Short-term debt and Long-term debt			Level 2
Notes Payable			Level 2

---

The following tables present a rollforward of DAC and VOBA for the periods indicated:

			2020
			DAC						VOBA						Total
Balance as of January 1, 2020			$	1,762					$	464					$	2,226
Impact of ASU 2016-13			3						—						3
Deferrals of commissions and expenses			51						2						53
Amortization:
Amortization, excluding unlocking			( 136 )						( 49 )						( 185 )
Unlocking (1)			7						( 6 )						1
Interest accrued			62						27			(2)			89
Net amortization included in Condensed Consolidated Statements of Operations			( 67 )						( 28 )						( 95 )
Change due to unrealized capital gains/losses on available-for-sale securities			( 115 )						( 105 )						( 220 )
Balance as of June 30, 2020			$	1,634					$	333					$	1,967
			2019
			DAC						VOBA						Total
Balance as of January 1, 2019			$	2,155					$	818					$	2,973
Deferrals of commissions and expenses			62						4						66
Amortization:
Amortization, excluding unlocking			( 162 )						( 68 )						( 230 )
Unlocking (1)			15						23						38
Interest accrued			64						28			(2)			92
Net amortization included in Condensed Consolidated Statements of Operations			( 83 )						( 17 )						( 100 )
Change due to unrealized capital gains/losses on available-for-sale securities			( 255 )						( 266 )						( 521 )
Balance as of June 30, 2019			$	1,879					$	539					$	2,418

⁽¹⁾ Includes the impacts of annual review of assumptions which typically occurs in the third quarter; and retrospective and prospective unlocking.

⁽²⁾ Interest accrued at the following rates for VOBA: 3.5 % to 7.4 % during 2020 and 2.7 % and 7.4 % during 2019.

The Company has provided equity-based compensation awards to its employees under the ING U.S., Inc. 2013 Omnibus Employee Incentive Plan (the "2013 Omnibus Plan"), the Voya Financial, Inc. 2014 Omnibus Employee Incentive Plan (the "2014 Omnibus Plan") and the Voya Financial, Inc. 2019 Omnibus Employee Incentive Plan (the "2019 Omnibus Plan") (together, the "Omnibus Plans"). As of June 30, 2020, common stock reserved and available for issuance under the 2013 Omnibus Plan, the 2014 Omnibus Plan and the 2019 Omnibus Plan was 347,663 , 3,178,653 and 10,560,334 shares, respectively.

The Company offers equity-based awards to Voya Financial, Inc. non-employee directors under the Voya Financial, Inc. 2013 Omnibus Non-Employee Director Incentive Plan ("Director Plan").

---

Compensation Cost

The following table summarizes share-based compensation expense, which includes expenses related to awards granted under the Omnibus Plans and Director Plan for the periods indicated:

			Three Months Ended June 30,															Six Months Ended June 30,
			2020						2019						2020						2019
Restricted Stock Unit (RSU) awards			$	9					$	10					$	27					$	27
Performance Stock Unit (PSU) awards			7						8						25						25
Stock options			1						2						3						4
Total share-based compensation expense			17						20						55						56
Income tax benefit			4						19						23						20
After-tax share-based compensation expense			$	13					$	1					$	32					$	36

Awards Outstanding

The following table summarizes RSU and PSU awards activity under the Omnibus Plans and the Director Plan for the period indicated:

			RSU Awards																														PSU Awards
(awards in millions)			Number of Awards						Weighted Average Grant Date Fair Value																		Number of Awards						Weighted Average Grant Date Fair Value
Outstanding as of January 1, 2020			1.9						$	48.55																	2.2						$	48.85
Adjustment for PSU performance factor			—						—																		0.4						42.27
Granted			0.7						62.82																		0.7						61.86
Vested			( 1.0 )						47.52																		( 1.2 )						42.38
Forfeited			—			*			52.37																		—			*			53.18
Outstanding as of June 30, 2020			1.6						$	55.49																	2.1						$	55.47

* Less than 0.1

The following table summarizes the number of options under the Omnibus Plans for the periods indicated:

			Stock Options
(awards in millions)			Number of Awards						Weighted Average Exercise Price
Outstanding as of January 1, 2020			2.9						$	41.93
Granted			—						—
Exercised			( 0.1 )						37.60
Forfeited			—			*			50.03
Outstanding as of June 30, 2020			2.8						$	42.08
Vested, exercisable, as of June 30, 2020			2.1						$	40.41

* Less than 0.1

---

Common Shares

The following table presents the rollforward of common shares used in calculating the weighted average shares utilized in the basic earnings per common share calculation for the periods indicated:

			Common Shares
(shares in millions)			Issued						Held in Treasury						Outstanding
Balance, January 1, 2019			272.4						121.4						151.0
Common shares issued			0.1						—						0.1
Common shares acquired - share repurchase			—						21.1						( 21.1 )
Share-based compensation			3.2						0.9						2.3
Treasury Stock retirement			( 135.0 )						( 135.0 )						—
Balance, December 31, 2019			140.7						8.4						132.3
Common shares issued			—						—						—
Common shares acquired - share repurchase			—						8.1						( 8.1 )
Share-based compensation			2.3						0.4						1.9
Balance, June 30, 2020			143.0						16.9						126.1

Dividends declared per share of Common Stock were as follows for the periods indicated:

			Three Months Ended June 30,																		Six Months Ended June 30,
			2020						2019						2020						2019
Dividends declared per share of Common Stock			$	0.15					$	0.01					$	0.30					$	0.02

Share Repurchase Program

From time to time, the Company's Board of Directors authorizes the Company to repurchase shares of its common stock. These authorizations permit stock repurchases up to a prescribed dollar amount and generally may be accomplished through various means, including, without limitation, open market transactions, privately negotiated transactions, forward, derivative, or accelerated repurchase, or automatic repurchase transactions, including 10b5-1 plans, or tender offers. Share repurchase authorizations typically expire if unused by a prescribed date.

On October 31, 2019, the Board of Directors provided share repurchase authorization, increasing the aggregate of the Company's common stock authorized for repurchase by $ 800 . The current share repurchase authorization expires on December 31, 2020 (unless extended), and does not obligate the Company to purchase any shares. The authorization for the share repurchase program may be terminated, increased or decreased by the Board of Directors at any time.

The following table presents repurchases of the Company's common stock through share repurchase agreements with third-party financial institutions during the six months ended June 30, 2020:

Execution Date

Payment

Initial Shares Delivered

Closing Date

Additional Shares Delivered

Total Shares Repurchased

December 19, 2019

$

200

2,591,093

February 26, 2020

727,368

3,318,461

During the six months ended June 30, 2020, the Company repurchased 7,390,099 shares of the Company's common stock in open market repurchases for an aggregate purchase price of $ 366 .

---

Warrants

On May 7, 2013, the Company issued to ING Group warrants to purchase up to 26,050,846 shares of the Company's common stock equal in the aggregate to 9.99 % of the issued and outstanding shares of common stock at that date. The exercise price of the warrants at the time of issuance was $ 48.75 per share of common stock, subject to adjustments, including for stock dividends, cash dividends in excess of $ 0.01 per share a quarter, subdivisions, combinations, reclassifications and non-cash distributions. The warrants also provide for, upon the occurrence of certain change of control events affecting the Company, an increase in the number of shares to which a warrant holder will be entitled upon payment of the aggregate exercise price of the warrant. The warrants became exercisable to ING Group and its affiliates on January 1, 2017 and to all other holders starting on the first anniversary of the completion of the IPO (May 7, 2014). The warrants expire on the tenth anniversary of the completion of the IPO (May 7, 2023). The warrants are net share settled, which means that no cash will be payable by a warrant holder in respect of the exercise price of a warrant upon exercise, and are classified as permanent equity. They have been recorded at their fair value determined on the issuance date of May 7, 2013 in the amount of $ 94 as an addition and reduction to Additional-paid-in-capital. Warrant holders are not entitled to receive dividends. On March 12, 2018, ING Group sold its remaining interests in the warrants and no longer owns any warrants.

On June 26, 2020, the Company paid a quarterly dividend of $ 0.15 per share on its common stock. As a consequence, the exercise price of the warrants to purchase shares of common stock was adjusted to $ 48.22 per share of common stock and the number of shares of common stock for which each warrant is exercisable has been adjusted to 1.003309771 . As of June 30, 2020, no warrants have been exercised.

Preferred Stock

On June 11, 2019, the Company issued 300,000 shares of 5.35 % Fixed-Rate Reset Non-Cumulative Preferred Stock, Series B ("the Series B preferred stock"), with a $ 0.01 par value per share and a liquidation preference of $ 1,000 per share, for aggregate net proceeds of $ 293 . The Company deposited the Series B preferred stock under a deposit agreement with a depositary, which issued interests in fractional shares of the Series B preferred stock in the form of depositary shares ("Depositary Shares") evidenced by depositary receipts; each Depositary Share representing 1/40th interest in a share of the Series B preferred stock.

On September 12, 2018, the Company issued 325,000 shares of 6.125 % Fixed-Rate Reset Non-Cumulative Preferred Stock, Series A ("the Series A preferred stock"), with a $ 0.01 par value per share and a liquidation preference of $ 1,000 per share, for aggregate net proceeds of $ 319 .

The ability of the Company to declare or pay dividends on, or purchase, redeem or otherwise acquire, shares of its common stock will be substantially restricted in the event that the Company does not declare and pay (or set aside) dividends on the Series A and B preferred stock for the last preceding dividend period.

The Series A and Series B preferred stock are not subject to any mandatory redemption, sinking fund, retirement fund, purchase fund or similar provisions. The Company may, at its option, redeem the Series A preferred stock, (a) in whole but not in part, at any time, within 90 days after the occurrence of a "rating agency event," at a redemption price equal to $ 1,020 per share, plus an amount equal to any dividends per share of preferred stock that have accrued but not been declared and paid for the then-current dividend period to, but excluding, the redemption date and (b) (i) in whole but not in part, at any time within 90 days after the occurrence of a "regulatory capital event" or (ii) in whole or in part, from time to time, on September 15, 2023 or any subsequent "reset date," in each case, at a redemption price equal to $ 1,000 per share of preferred stock, plus an amount equal to any dividends per share of preferred stock that have accrued but not been declared and paid for the then-current dividend period to, but excluding, such redemption date. The Company may, at its option, redeem the Series B preferred stock, (a) in whole but not in part, at any time, within 90 days after the occurrence of a "rating agency event," at a redemption price equal to $ 1,020 per share (equivalent to $ 25.50 per Depositary Share), plus an amount equal to any accrued and unpaid dividends per share that have accrued but not been declared and paid for the then-current dividend period, but excluding, such redemption date and (b) (i) in whole but not in part , at any time, within 90 days after the occurrence of a "regulatory capital event," or (ii) in whole or in part, from time to time, on September 15, 2029 or any reset date, in each case, at a redemption price equal to $ 1,000 per share of the Series B preferred stock (equivalent to $ 25.00 per Depositary Share), plus an amount equal to any accrued and unpaid dividends per share that have accrued but not been declared and paid for the then-current dividend period to, but excluding, such redemption date.

---

A "rating agency event" means that any nationally recognized statistical rating organization that then publishes a rating for the Company amends, clarifies or changes the criteria it uses to assign equity credit to securities like the preferred stock, which results in the lowering of the equity credit assigned to the preferred stock, as applicable, or shortens the length of time that the preferred stock is assigned a particular level of equity credit.

A "regulatory capital event" means that the Company becomes subject to capital adequacy supervision by a capital regulator and the capital adequacy guidelines that apply to the Company as a result of being so subject set forth criteria pursuant to which the preferred stock would not qualify as capital under such capital adequacy guidelines, as the Company may determine at any time, in its sole discretion.

As of June 30, 2020 and December 31, 2019, there were 100,000,000 shares of preferred stock authorized. Preferred stock issued and outstanding are as follows:

									June 30, 2020																					December 31, 2019
Series									Issued						Outstanding									Issued						Outstanding
6.125 % Non-cumulative Preferred Stock, Series A									325,000						325,000									325,000						325,000
5.35 % Non-cumulative Preferred Stock, Series B									300,000						300,000									300,000						300,000
Total									625,000						625,000									625,000						625,000

As of June 30, 2020, there were no preferred stock dividends in arrears.

---

The following table presents a reconciliation of Net income (loss) and shares used in calculating basic and diluted net income (loss) per common share for the periods indicated:

			Three Months Ended June 30,									Six Months Ended June 30,
(in millions, except for per share data)			2020			2019			2020			2019
Earnings
Net income (loss) available to common shareholders:
Income (loss) from continuing operations			$	( 53 )		$	210		$	( 3 )		$	303
Less: Preferred stock dividends			4			—			18			10
Less: Net income (loss) attributable to noncontrolling interest			( 79 )			26			( 73 )			25
Income (loss) from continuing operations available to common shareholders			22			184			52			268
Income (loss) from discontinued operations, net of tax			( 93 )			42			( 221 )			22
Net income (loss) available to common shareholders			$	( 71 )		$	226		$	( 169 )		$	290
Weighted average common shares outstanding
Basic			126.2			144.1			128.6			145.5
Dilutive Effects:
Warrants (1)			—			2.3			1.5			1.2
RSU awards			0.8			1.2			1.0			1.3
PSU awards			1.0			1.6			1.4			2.0
Stock Options			0.3			0.7			0.4			0.6
Diluted			128.3			149.9			132.9			150.6
Basic (2)
Income (loss) from continuing operations available to Voya Financial, Inc.'s common shareholders			$	0.17		$	1.27		$	0.40		$	1.84
Income (loss) from discontinued operations, net of taxes available to Voya Financial, Inc.'s common shareholders			$	( 0.73 )		$	0.29		$	( 1.72 )		$	0.15
Income (loss) available to Voya Financial, Inc.'s common shareholders			$	( 0.56 )		$	1.57		$	( 1.32 )		$	1.99
Diluted (2)
Income (loss) from continuing operations available to Voya Financial, Inc.'s common shareholders			$	0.17		$	1.22		$	0.39		$	1.78
Income (loss) from discontinued operations, net of taxes available to Voya Financial, Inc.'s common shareholders			$	( 0.72 )		$	0.28		$	( 1.66 )		$	0.15
Income (loss) available to Voya Financial, Inc.'s common shareholders			$	( 0.55 )		$	1.51		$	( 1.27 )		$	1.93

⁽¹⁾ For the three months ended June 30, 2020, weighted average shares used for calculating basic and diluted earnings per share excludes the dilutive impact of warrants, as the inclusion of this equity instrument would be antidilutive to the earnings per share calculation due to "out of the moneyness" in the periods presented. For more information on warrants, see the Shareholders' Equity Note to these Condensed Consolidated Financial Statements.

⁽²⁾ Basic and diluted earnings per share are calculated using unrounded, actual amounts. Therefore, the components of earnings per share may not sum to its corresponding total.

---

Shareholders' equity included the following components of Accumulated Other Comprehensive Income ("AOCI") as of the dates indicated:

			June 30,
			2020						2019
Fixed maturities, net of impairment			$	6,914					$	4,521
Derivatives (1)			195						168
DAC/VOBA adjustment on available-for-sale securities			( 1,915 )						( 1,228 )
Premium deficiency reserve			( 324 )						( 134 )
Sales inducements and other intangibles adjustment on available-for-sale securities			( 213 )						( 157 )
Unrealized capital gains (losses), before tax			4,657						3,170
Deferred income tax asset (liability)			( 623 )						( 312 )
Net unrealized capital gains (losses)			4,034						2,858
Pension and other postretirement benefits liability, net of tax			5						9
AOCI			$	4,039					$	2,867

⁽¹⁾ Gains and losses reported in Accumulated Other Comprehensive Income (AOCI) from hedge transactions that resulted in the acquisition of an identified asset are reclassified into earnings in the same period or periods during which the asset acquired affects earnings. As of June 30, 2020, the portion of the AOCI that is expected to be reclassified into earnings within the next 12 months is $ 24 .

---

Changes in AOCI, including the reclassification adjustments recognized in the Condensed Consolidated Statements of Operations were as follows for the periods indicated:

			Three Months Ended June 30, 2020
			Before-Tax Amount						Income Tax						After-Tax Amount
Available-for-sale securities:
Fixed maturities			$	4,087					$	( 858 )					$	3,229
Adjustments for amounts recognized in Net realized capital gains (losses) in the Condensed Consolidated Statements of Operations			8						( 2 )						6
DAC/VOBA			( 1,009 )						212						( 797 )
Premium deficiency reserve			( 178 )						38						( 140 )
Sales inducements and other intangibles			( 86 )						18						( 68 )
Change in unrealized gains/losses on available-for-sale securities			2,822						( 592 )						2,230
Derivatives:
Derivatives			( 34 )			(1)			7						( 27 )
Adjustments related to effective cash flow hedges for amounts recognized in Net investment income in the Condensed Consolidated Statements of Operations			( 6 )						2						( 4 )
Change in unrealized gains/losses on derivatives			( 40 )						9						( 31 )
Pension and other postretirement benefits liability:
Amortization of prior service cost recognized in Operating expenses in the Condensed Consolidated Statements of Operations			( 1 )						—						( 1 )
Change in pension and other postretirement benefits liability			( 1 )						—						( 1 )
Change in Accumulated other comprehensive income (loss)			$	2,781					$	( 583 )					$	2,198

⁽¹⁾ See the Derivative Financial Instruments Note to these Condensed Consolidated Financial Statements for additional information.

---

			Six Months Ended June 30, 2020
			Before-Tax Amount						Income Tax						After-Tax Amount
Available-for-sale securities:
Fixed maturities			$	1,331					$	( 280 )					$	1,051
Adjustments for amounts recognized in Net realized capital gains (losses) in the Condensed Consolidated Statements of Operations			37						( 8 )						29
DAC/VOBA			( 417 )			(1)			88						( 329 )
Premium deficiency reserve			( 75 )						16						( 59 )
Sales inducements and other intangibles			( 28 )						6						( 22 )
Change in unrealized gains/losses on available-for-sale securities			848						( 178 )						670
Derivatives:
Derivatives			62			(2)			( 13 )						49
Adjustments related to effective cash flow hedges for amounts recognized in Net investment income in the Condensed Consolidated Statements of Operations			( 12 )						3						( 9 )
Change in unrealized gains/losses on derivatives			50						( 10 )						40
Pension and other postretirement benefits liability:
Amortization of prior service cost recognized in Operating expenses in the Condensed Consolidated Statements of Operations			( 2 )						—						( 2 )
Change in pension and other postretirement benefits liability			( 2 )						—						( 2 )
Change in Accumulated other comprehensive income (loss)			$	896					$	( 188 )					$	708

⁽¹⁾ See the Deferred Policy Acquisition Costs and Value of Business Acquired Note to these Condensed Consolidated Financial Statements for additional information.

⁽²⁾ See the Derivative Financial Instruments Note to these Condensed Consolidated Financial Statements for additional information.

---

			Three Months Ended June 30, 2019
			Before-Tax Amount						Income Tax						After-Tax Amount
Available-for-sale securities:
Fixed maturities			$	1,574					$	( 332 )					$	1,242
Impairments			$	1					$	—					$	1
Adjustments for amounts recognized in Net realized capital gains (losses) in the Condensed Consolidated Statements of Operations			$	( 11 )					$	3					$	( 8 )
DAC/VOBA			$	( 350 )					$	73					$	( 277 )
Premium deficiency reserve			$	( 41 )					$	8					$	( 33 )
Sales inducements and other intangibles			$	( 45 )					$	10					$	( 35 )
Change in unrealized gains/losses on available-for-sale securities			1,128						( 238 )						890
Derivatives:
Derivatives			$	21		(1)			$	( 4 )					$	17
Adjustments related to effective cash flow hedges for amounts recognized in Net investment income in the Condensed Consolidated Statements of Operations			$	( 7 )					$	2					$	( 5 )
Change in unrealized gains/losses on derivatives			$	14					$	( 2 )					$	12
Pension and other postretirement benefits liability:
Amortization of prior service cost recognized in Operating expenses in the Condensed Consolidated Statements of Operations			$	( 1 )					$	—					$	( 1 )
Change in pension and other postretirement benefits liability			$	( 1 )					$	—					$	( 1 )
Change in Accumulated other comprehensive income (loss)			$	1,141					$	( 240 )					$	901

⁽¹⁾ See the Derivative Financial Instruments Note to these Condensed Consolidated Financial Statements for additional information.

---

			Six Months Ended June 30, 2019
			Before-Tax Amount						Income Tax						After-Tax Amount
Available-for-sale securities:
Fixed maturities			$	3,439					$	( 722 )					$	2,717
Impairment			2						—						2
Adjustments for amounts recognized in Net realized capital gains (losses) in the Condensed Consolidated Statements of Operations			6						( 1 )						5
DAC/VOBA			( 848 )			(1)			178						( 670 )
Premium deficiency reserve			( 77 )						16						( 61 )
Sales inducements and other intangibles			( 93 )						20						( 73 )
Change in unrealized gains/losses on available-for-sale securities			2,429						( 509 )						1,920
Derivatives:
Derivatives			11			(2)			( 2 )						9
Adjustments related to effective cash flow hedges for amounts recognized in Net investment income in the Condensed Consolidated Statements of Operations			( 13 )						3						( 10 )
Change in unrealized gains/losses on derivatives			( 2 )						1						( 1 )
Pension and other postretirement benefits liability:
Amortization of prior service cost recognized in Operating expenses in the Condensed Consolidated Statements of Operations			( 2 )						—						( 2 )
Change in pension and other postretirement benefits liability			( 2 )						—						( 2 )
Change in Accumulated other comprehensive income (loss)			$	2,425					$	( 508 )					$	1,917

⁽¹⁾ See the Deferred Policy Acquisition Costs and Value of Business Acquired Note to these Condensed Consolidated Financial Statements for additional information.

⁽²⁾ See the Derivative Financial Instruments Note to these Condensed Consolidated Financial Statements for additional information.

The Company uses the estimated annual effective tax rate method in computing its interim tax provision. Certain items, including changes in the realizability of deferred tax assets and changes in liabilities for uncertain tax positions, are excluded from the estimated annual effective tax rate and the actual tax expense or benefit is reported in the period the related item is incurred.

The Company's effective tax rate for the three months ended June 30, 2020 was ( 10.4 )%. The effective tax rate differed from the statutory rate of 21 % primarily due to the effect of the dividends received deduction ("DRD") partially offset by noncontrolling interest and nondeductible expenses. The Company's effective tax rate for the six months ended June 30, 2020 was 25.0 %. The effective tax rate differed from the statutory rate of 21 % primarily due to the effect of the DRD and nondeductible expenses partially offset by noncontrolling interest.

The Company's effective tax rate for the three and six months ended June 30, 2019 was 13.6 % and 12.2 %. The effective tax rate differed from the statutory rate of 21 % primarily due to the effect of the DRD.

The Coronavirus Aid, Relief and Economic Security (“CARES”) Act, which became effective on March 27, 2020, has not had any material impact on corporate income taxes.

---

Tax Regulatory Matters

For the tax years 2018 through 2020, Voya Financial, Inc. participates in the Internal Revenue Service ("IRS") Compliance Assurance Process ("CAP"), which is a continuous audit program provided by the IRS. The IRS finalized the audit of Voya Financial, Inc. for the period ended December 31, 2018. For the periods ended December 31, 2019 and December 31, 2020, the IRS has determined that Voya Financial, Inc. would be in the Compliance Maintenance Bridge ("Bridge") phase of CAP. In the Bridge phase, the IRS does not intend to conduct any review or provide any letters of assurance for the tax year.

Short-term and Long-term Debt

The following table summarizes the carrying value of the Company’s debt securities issued and outstanding as of June 30, 2020 and December 31, 2019:

			Maturity						June 30, 2020						December 31, 2019
3.125 % Senior Notes, due 2024			07/15/2024						398						397
3.65 % Senior Notes, due 2026			06/15/2026						497						496
5.7 % Senior Notes, due 2043			07/15/2043						395						395
4.8 % Senior Notes, due 2046			06/15/2046						297						297
4.7 % Fixed-to-Floating Rate Junior Subordinated Notes, due 2048			01/23/2048						345						345
5.65 % Fixed-to-Floating Rate Junior Subordinated Notes, due 2053			05/15/2053						739						739
7.25 % Voya Holdings Inc. debentures, due 2023 (1)			08/15/2023						139						139
7.63 % Voya Holdings Inc. debentures, due 2026 (1)			08/15/2026						138						138
6.97 % Voya Holdings Inc. debentures, due 2036 (1)			08/15/2036						79						79
8.42 % Equitable of Iowa Companies Capital Trust II Notes, due 2027			04/01/2027						13						14
1.00 % Windsor Property Loan			06/14/2027						4						4
Subtotal									3,044						3,043
Less: Current portion of long-term debt									1						1
Total									$	3,043					$	3,042

⁽¹⁾ Guaranteed by ING Group.

Aetna Notes

As of June 30, 2020, the outstanding principal amount of the Aetna Notes was $ 358 , which is guaranteed by ING Group. As of June 30, 2020, the Company provided $ 373 of collateral benefiting ING Group, comprised of a deposit of $ 210 to a control account with a third-party collateral agent and $ 163 of letter of credit. The collateral may be exchanged at any time upon the posting of any other form of acceptable collateral to the account.

Senior Unsecured Credit Facility Agreement

As of June 30, 2020, the Company had a $ 500 senior unsecured credit facility with a syndicate of banks which expires November 1, 2024. The facility provides $ 500 of committed capacity for issuing letters of credit and the full $ 500 may be utilized for direct borrowings. As of June 30, 2020, there were no amounts outstanding as revolving credit borrowings and no amounts of LOCs outstanding under the senior unsecured credit facility. Under the terms of the facility, the Company is required to maintain a minimum net worth of $ 6.15 billion, which may increase upon any future equity issuances by the Company.

---

Commitments

Through the normal course of investment operations, the Company commits to either purchase or sell securities, mortgage loans, or money market instruments, at a specified future date and at a specified price or yield. The inability of counterparties to honor these commitments may result in either a higher or lower replacement cost. Also, there is likely to be a change in the value of the securities underlying the commitments.

As of June 30, 2020, the Company had off-balance sheet commitments to acquire mortgage loans of $ 66 and purchase limited partnerships and private placement investments of $ 873 , of which $ 242 related to consolidated investment entities.

Restricted Assets

The Company is required to maintain assets on deposit with various regulatory authorities to support its insurance operations. The Company may also post collateral in connection with certain securities lending, repurchase agreements, funding agreements, credit facilities and derivative transactions. The components of the fair value of the restricted assets were as follows as of the dates indicated:

			June 30, 2020						December 31, 2019
Fixed maturity collateral pledged to FHLB (1)			$	1,214					$	1,211
FHLB restricted stock (2)			54						55
Other fixed maturities-state deposits			44						48
Cash and cash equivalents			14						12
Securities pledged (3)			1,122						1,408
Total restricted assets			$	2,448					$	2,734

⁽¹⁾ Included in Fixed maturities, available for sale, at fair value on the Condensed Consolidated Balance Sheets.

⁽²⁾ Included in Other investments on the Condensed Consolidated Balance Sheets.

⁽³⁾ Includes the fair value of loaned securities of $ 838 and $ 1,159 as of June 30, 2020 and December 31, 2019, respectively. In addition, as of June 30, 2020 and December 31, 2019, the Company delivered securities as collateral of $ 201 and $ 183 and repurchase agreements of $ 83 and $ 66 , respectively. Loaned securities and securities delivered as collateral are included in Securities pledged on the Condensed Consolidated Balance Sheets.

Federal Home Loan Bank Funding Agreements

The Company is a member of the FHLB of Des Moines and the FHLB of Boston and is required to pledge collateral to back funding agreements issued to the FHLB. As of June 30, 2020 and December 31, 2019, the Company had $ 835 and $ 877 , respectively, in non-putable funding agreements, which are included in Contract owner account balances on the Condensed Consolidated Balance Sheets. As of June 30, 2020 and December 31, 2019, assets with a market value of approximately $ 1,214 and $ 1,211 , respectively, collateralized the FHLB funding agreements. Assets pledged to the FHLB are included in Fixed maturities, available-for-sale, at fair value on the Condensed Consolidated Balance Sheets. Additionally, SLD is currently a member of FHLB of Topeka. The related non-puttable funding agreements and the assets pledged are reflected in Liabilities and Assets held for sale on Condensed Consolidated Balance Sheets.

Litigation, Regulatory Matters and Contingencies

Litigation, regulatory and other loss contingencies arise in connection with the Company's activities as a diversified financial services firm. The Company is a defendant in a number of litigation matters arising from the conduct of its business, both in the ordinary course and otherwise. In some of these matters, claimants seek to recover very large or indeterminate amounts, including compensatory, punitive, treble and exemplary damages. Modern pleading practice in the U.S. permits considerable variation in the assertion of monetary damages and other relief. Claimants are not always required to specify the monetary damages they seek or they may be required only to state an amount sufficient to meet a court's jurisdictional requirements. Moreover, some jurisdictions allow claimants to allege monetary damages that far exceed any reasonably possible verdict. The

---

variability in pleading requirements and past experience demonstrates that the monetary and other relief that may be requested in a lawsuit or claim often bears little relevance to the merits or potential value of a claim. Litigation against the Company includes a variety of claims including negligence, breach of contract, fraud, violation of regulation or statute, breach of fiduciary duty, negligent misrepresentation, failure to supervise, elder abuse and other torts.

As with other financial services companies, the Company periodically receives informal and formal requests for information from various state and federal governmental agencies and self-regulatory organizations in connection with inquiries and investigations of the products and practices of the Company or the financial services industry. Such matters include an SEC inquiry into mutual fund share classes offered by Voya’s investment advisor subsidiary, involving issues similar to those under the SEC’s Share Class Selection Disclosure Initiative where the SEC has been examining the subsidiary’s receipt of 12b1 fees and other revenue in relation to the accuracy and adequacy of its disclosures. It is the practice of the Company to cooperate fully in these matters.

While it is possible that an adverse outcome in certain cases could have a material adverse effect upon the Company's financial position, based on information currently known, management believes that neither the outcome of pending litigation and regulatory matters, excluding the SEC inquiry referenced immediately above, nor potential liabilities associated with other loss contingencies, are likely to have such an effect. However, given the large and indeterminate amounts sought in certain litigation and the inherent unpredictability of all such matters, it is possible that an adverse outcome in certain of the Company's litigation or regulatory matters, or liabilities arising from other loss contingencies, could, from time to time, have a material adverse effect upon the Company's results of operations or cash flows in a particular quarterly or annual period.

For some matters, the Company is able to estimate a possible range of loss. For such matters in which a loss is probable, an accrual has been made. For matters where the Company, however, believes a loss is reasonably possible, but not probable, no accrual is required. For matters for which an accrual has been made, but there remains a reasonably possible range of loss in excess of the amounts accrued or for matters where no accrual is required, the Company develops an estimate of the unaccrued amounts of the reasonably possible range of losses. As of June 30, 2020, the Company estimates the aggregate range of reasonably possible losses, in excess of any amounts accrued for these matters as of such date, to be up to approximately $ 50 .

For other matters, the Company is currently not able to estimate the reasonably possible loss or range of loss. The Company is often unable to estimate the possible loss or range of loss until developments in such matters have provided sufficient information to support an assessment of the range of possible loss, such as quantification of a damage demand from plaintiffs, discovery from plaintiffs and other parties, investigation of factual allegations, rulings by a court on motions or appeals, analysis by experts and the progress of settlement discussions. On a quarterly and annual basis, the Company reviews relevant information with respect to litigation and regulatory contingencies and updates the Company's accruals, disclosures and reasonably possible losses or ranges of loss based on such reviews.

Litigation also includes Henkel of America v. ReliaStar Life Insurance Company (USDC District of Connecticut, No. 1:18-cv-00965) (filed June 8, 2018). Plaintiff alleges that ReliaStar breached the terms of a stop loss policy it issued to Plaintiff by refusing to reimburse Plaintiff for more than $ 47 in claims incurred by participants in prior years and submitted for coverage under the stop loss policy. Plaintiff alleges a breach of contract claim or, in the alternative, that the stop loss policy be declared to cover the submitted claims, and also asserts that ReliaStar engaged in unfair trade practices and unfair insurance practices in violation of state statutes, and did so willfully and intentionally to warrant an award of punitive damages under state law. The Company denies the allegations, which it believes are without merit, and intends to defend the case vigorously.

Finally, industry wide, life insurers continue to be exposed to class action litigation related to the cost of insurance rates and periodic deductions from cash value. Common allegations include that insurance companies have breached the terms of their universal life insurance policies by establishing or increasing the cost of insurance rates using cost factors not permitted by the contract, thereby unjustly enriching themselves. This litigation is generally known as cost of insurance litigation.

Cost of insurance litigation for the Company includes Barnes v. Security Life of Denver (USDC District of Colorado, No. 1:18-cv-00718) (filed March 27, 2018), a putative class action in which the plaintiff alleges that his insurance policy only permitted the Company to rely upon his expected future mortality experience to establish and increase his cost of insurance, but the Company instead relied upon other, non-disclosed factors to do so. Plaintiff alleges breach of contract and conversion claims

---

against the Company and also seeks declaratory relief. The Company denies the allegations in the complaint, believes the complaint to be without merit, and intends to defend the matter vigorously.

Cost of insurance litigation for the Company also includes Advance Trust & Life Escrow Services, LTA v. Security Life of Denver (USDC District of Colorado, No. 1:18-cv-01897) (filed July 26, 2018), a putative class action in which Plaintiff alleges that two specific types of universal life insurance policies only permitted the Company to rely upon the policyholder’s expected future mortality experience to establish and increase the cost of insurance, but the Company instead relied upon other, non-disclosed factors not only in the administration of the policies over time, but also in the decision to increase insurance costs beginning in approximately October 2015. Plaintiff alleges a breach of contract and seeks class certification. The Company denies the allegations in the complaint, believes the complaint to be without merit, and intends to defend the lawsuit vigorously.

Finally, cost of insurance litigation includes Advance Trust & Life Escrow Services, LTA v. ReliaStar Life Insurance Company (USDC District of Minnesota, No. 1:18-cv-02863) (filed October 5, 2018), a putative class action in which Plaintiff alleges that the Company’s universal life insurance policies only permitted the Company to rely upon the policyholders’ expected future mortality experience to establish the cost of insurance, and that as projected mortality experience improved, the policy language required the Company to decrease the cost of insurance. Plaintiff alleges that the Company did not decrease the cost of insurance as required, thereby breaching its contract with the policyholders, and seeks class certification. The Company denies the allegations in the complaint, believes the complaint to be without merit, and will defend the lawsuit vigorously.

Contingencies related to Performance-based Capital Allocations on Private Equity Funds

Certain performance-based capital allocations related to sponsored private equity funds ("carried interest") are not final until the conclusion of an investment term specified in the relevant asset management contract. As a result, such carried interest, if accrued or paid to the Company during such term, is subject to later adjustment based on subsequent fund performance. If the fund’s cumulative investment return falls below specified investment return hurdles, some or all of the previously accrued carried interest is reversed to the extent that the Company is no longer entitled to the performance-based capital allocation. Should the fund’s cumulative investment return subsequently increase above specified investment return hurdles in fut/ure periods, previous reversals could be fully or partially recovered.

In the normal course of business, the Company provides investment management services to, invests in and has transactions with, various types of investment entities which may be considered VIEs or VOEs. The Company evaluates its involvement with each entity to determine whether consolidation is required.

The Company holds variable interests in certain investment entities in the form of debt or equity investments, as well as the right to receive management fees, performance fees, and carried interest. The Company consolidates certain entities under the VIE guidance when it is determined that the Company is the primary beneficiary. Alternatively, certain entities are consolidated under the VOE guidance when control is obtained through voting rights.

The Company has no right to the benefits from, nor does it bear the risks associated with consolidated investment entities beyond the Company’s direct equity and debt investments in and management fees generated from these entities. Such direct investments amounted to approximately $ 167 and $ 279 on a continuing basis as of June 30, 2020 and December 31, 2019, respectively. If the Company were to liquidate, the assets held by consolidated investment entities would not be available to the general creditors of the Company as a result of the liquidation.

---

Consolidated VIEs and VOEs

Collateral Loan Obligations Entities ("CLOs")

The Company is involved in the design, creation, and the ongoing management of CLOs. These entities are created for the purpose of acquiring diversified portfolios of senior secured floating rate leveraged loans, and securitizing these assets by issuing multiple tranches of collateralized debt; thereby providing investors with a broad array of risk and return profiles. Also known as collateralized financing entities under Topic 810, CLOs are variable interest entities by definition.

In return for providing collateral management services, the Company earns investment management fees and contingent performance fees. In addition to earning fee income, the Company often holds an investment in certain of the CLOs it manages, generally within the unrated and most subordinated tranche of each CLO. The fee income earned and investments held are included in the Company's ongoing consolidation assessment for each CLO. The Company was the primary beneficiary of 2 and 3 CLOs as of June 30, 2020 and December 31, 2019, respectively.

Limited Partnerships

The Company invests in and manages various limited partnerships, including private equity funds and hedge funds. These entities have been evaluated by the Company and are determined to be VIEs due to the equity holders, as a group, lacking the characteristics of a controlling financial interest.

In return for serving as the general partner of and providing investment management services to these entities, the Company earns management fees and carried interest in the normal course of business. Additionally, the Company often holds an investment in each limited partnership it manages, generally in the form of general partner and limited partner interests. The fee income, carried interest, and investments held are included in the Company’s ongoing consolidation analysis for each limited partnership. The Company consolidated 12 funds, which were structured as partnerships, as of June 30, 2020 and December 31, 2019.

Registered Investment Companies

The Company deconsolidated one sponsored investment fund accounted for as a VOE as of June 30, 2020, because it is no longer the majority investor in the fund, and as such, does not have a controlling financial interest in the fund. The Company consolidated one sponsored investment fund accounted for as a VOE as of December 31, 2019, because it is the majority investor in the fund, and as such, has a controlling financial interest in the fund.

---

The following table summarizes the components of the consolidated investment entities as of the dates indicated:

			June 30, 2020						December 31, 2019
Assets of Consolidated Investment Entities
VIEs
Cash and cash equivalents			$	39					$	68
Corporate loans, at fair value using the fair value option			274						513
Limited partnerships/corporations, at fair value			1,459						1,470
Other assets			10						12
Total VIE assets			1,782						2,063
VOEs
Limited partnerships/corporations, at fair value			—						162
Other assets			—						1
Total VOE assets			—						163
Total assets of consolidated investment entities			$	1,782					$	2,226
Liabilities of Consolidated Investment Entities
VIEs
CLO notes, at fair value using the fair value option			$	268					$	474
Other liabilities			606						650
Total VIE liabilities			874						1,124
VOEs
Other liabilities			—						2
Total VOE liabilities			—						2
Total liabilities of consolidated investment entities			$	874					$	1,126

Fair Value Measurement

Upon consolidation, the Company elected to apply the FVO for financial assets and financial liabilities held by CLOs and continued to measure these assets (primarily corporate loans) and liabilities (debt obligations issued by CLOs) at fair value in subsequent periods. The Company has elected the FVO to more closely align its accounting with the economics of its transactions and allows the Company to more effectively align changes in the fair value of CLO assets with a commensurate change in the fair value of CLO liabilities.

Investments held by consolidated private equity funds are measured and reported at fair value in the Company's Condensed Consolidated Financial Statements. Changes in the fair value of consolidated investment entities are recorded as a separate line item within Income (loss) related to consolidated investment entities in the Company's Condensed Consolidated Statements of Operations.

The methodology for measuring the fair value of financial assets and liabilities of consolidated investment entities, and the classification of these measurements in the fair value hierarchy is consistent with the methodology and classification applied by the Company to its investment portfolio.

As discussed in more detail below, the Company utilizes valuations obtained from third-party commercial pricing services, brokers and investment sponsors or third-party administrators that supply NAV (or its equivalent) per share used as a practical expedient. The valuations obtained from brokers and third-party commercial pricing services are non-binding. These valuations are reviewed on a monthly or quarterly basis depending on the entity and its underlying investments. Procedures include, but are not limited to, a review of underlying fund investor reports, review of top and worst performing funds requiring further scrutiny, review of variance from prior periods and review of variance from benchmarks, where applicable. In addition, the

---

Company considers both macro and fund specific events that may impact the latest NAV supplied and determines if further adjustments of value should be made. Such changes, if any, are subject to senior management review.

When a price cannot be obtained from a commercial pricing service, independent broker quotes are solicited. Securities priced using independent broker quotes are classified as Level 3. Broker quotes and prices obtained from pricing services are reviewed and validated through an internal valuation committee price variance review, comparisons to internal pricing models, back testing to recent trades or monitoring of trading volumes.

Cash and Cash Equivalents

The carrying amounts for cash reflect the assets’ fair values. The fair value for cash equivalents is determined based on quoted market prices. These assets are classified as Level 1.

CLOs

Corporate loans : Corporate loan investments, which comprise the majority of consolidated CLO portfolio collateral, are senior secured corporate loans maturing at various dates between 2020 and 2028, paying interest at LIBOR , EURIBOR or PRIME plus a spread of up to 10.8 %. As of June 30, 2020 and December 31, 2019, the unpaid principal balance exceeded the fair value of the corporate loans by approximately $ 33 and $ 18 , respectively. Less than 2.0 % and 1.0 % of the collateral assets were in default as of June 30, 2020 and December 31, 2019, respectively.

The fair values for corporate loans are determined using independent commercial pricing services. Fair value measurement based on pricing services may be classified in Level 2 or Level 3 depending on the type, complexity, observability and liquidity of the asset being measured. The inputs used by independent commercial pricing services, such as benchmark yields and credit risk adjustments, are those that are derived principally from or corroborated by observable market data. Hence, the fair value measurement of corporate loans priced by independent pricing service providers is classified within Level 2 of the fair value hierarchy. In addition, there are assets held with CLO portfolios that represent senior level debt of other third party CLOs. These CLO investments are classified within Level 3 of the fair value hierarchy. See description of fair value process for CLO notes below.

CLO notes : The CLO notes are backed by a diversified loan portfolio consisting primarily of senior secured floating rate leveraged loans. Repayment risk is segmented into tranches with credit ratings of these tranches reflecting both the credit quality of underlying collateral as well as how much protection a given tranche is afforded by tranches that are subordinate to it. The most subordinated tranche bears the first loss and receives the residual payments, if any. The interest rates are generally variable rates based on LIBOR plus a pre-defined spread, which varies from 0.7 % for the more senior tranches to 5.4 % for the more subordinated tranches. CLO notes mature in 2026 and have a weighted average maturity of 6.1 years as of June 30, 2020. The investors in this debt are not affiliated with the Company and have no recourse to the general credit of the Company for this debt.

The fair values of the CLO notes are measured based on the fair value of the CLO's corporate loans, as the Company uses the measurement alternative available under ASU 2014-13 and determined that the inputs for measuring financial assets are more observable. The CLO notes are classified within Level 2 of the fair value hierarchy, consistent with the classification of the majority of the CLO financial assets.

The Company reviews the detailed prices including comparisons to prior periods for reasonableness. The Company utilizes a formal pricing challenge process to request a review of any price during which time the vendor examines its assumptions and relevant market inputs to determine if a price change is warranted.

The following narrative indicates the sensitivity of inputs:

• Default Rate: An increase (decrease) in the expected default rate would likely increase (decrease) the discount margin (increase risk premium) used to value the CLO investments and CLO notes and, as a result, would potentially decrease the value of the CLO investments and CLO notes.

---

• Recovery Rate: A decrease (increase) in the expected recovery of defaulted assets would potentially decrease (increase) the valuation of CLO investments and CLO notes.

• Prepayment Rate: A decrease (increase) in the expected rate of collateral prepayments would potentially decrease (increase) the valuation of CLO investments and CLO notes as the expected weighted average life ("WAL") would increase (decrease).

• Discount Margin (spread over LIBOR): An increase (decrease) in the discount margin used to value the CLO investments and CLO notes would decrease (increase) the value of the CLO investments and CLO notes.

Private Equity Funds

As prescribed in ASC Topic 820, the unit of account for these investments is the interest in the investee fund. The Company owns an undivided interest in the fund portfolio and does not have the ability to dispose of individual assets and liabilities in the fund portfolio. Rather, the Company would be required to redeem or dispose of its entire interest in the investee fund. There is no current active market for interests in underlying private equity funds.

Valuation is generally based on the valuations provided by the fund's general partner or investment manager. The valuations typically reflect the fair value of the Company's capital account balance of each fund investment, including unrealized capital gains (losses), as reported in the financial statements of the respective investee fund as of the respective year end or the latest available date. In circumstances where fair values are not provided, the Company seeks to determine the fair value of fund investments based upon other information provided by the fund's general partner or investment manager or from other sources.

The fair value of securities received in-kind from fund investments is determined based on the restrictions around the securities.

• Unrestricted, publicly traded securities are valued at the closing public market price on the reporting date;

• Restricted, publicly traded securities may be valued at a discount from the closing public market price on the reporting date, depending on the circumstances; and

• Privately held securities are valued by the directors/general partner of the investee fund, based on a variety of factors, including the price of recent transactions in the company's securities and the company's earnings, revenue and book value.

In the case of direct investments or co-investments in private equity companies, the Company initially recognizes investments at cost and subsequently adjusts investments to fair value. On a quarterly basis, the Company reviews the general partner or lead investor's valuation of the investee company, taking into account other available information, such as indications of a market value through subsequent issues of capital or transactions between third parties, performance of the investee company during the period and public, comparable companies' analysis, where appropriate.

Investments in these funds typically may not be fully redeemed at net asset value ("NAV") within 90 days because of inherent restriction on near term redemptions.

As of June 30, 2020 and December 31, 2019, certain private equity funds maintained term loans and revolving lines of credit of $ 666 and $ 669 , respectively. The term loans renew every three years and the revolving lines of credit renew annually; all loans bear interest at LIBOR / EURIBOR plus 150 - 200 bps. The lines of credit are used for funding transactions before capital is called from investors, as well as for the financing of certain purchases. As of June 30, 2020 and December 31, 2019, outstanding borrowings amount to $ 580 and $ 602 , respectively.

On March 30, 2020, Pomona Investment Fund terminated its three-year revolving credit agreement with Credit Suisse and entered into a five-year revolving credit agreement with Barclays Bank Plc. The loan bears interest at LIBOR plus 285 bps and has a commitment fee of 85 bps. Pomona Investment Fund deconsolidated during the second quarter of 2020.

The borrowings are reflected in Liabilities related to consolidated investment entities - other liabilities on the Company's Condensed Consolidated Balance Sheets. The borrowings are carried at an amount equal to the unpaid principal balance.

---

The following table summarizes the fair value hierarchy levels of consolidated investment entities as of June 30, 2020:

			Level 1						Level 2						Level 3						NAV						Total
Assets
VIEs
Cash and cash equivalents			$	39					$	—					$	—					$	—					$	39
Corporate loans, at fair value using the fair value option			—						274						—						—						274
Limited partnerships/corporations, at fair value			—						—						—						1,459						1,459
VOEs
Limited partnerships/corporations, at fair value			—						—						—						—						—
Total assets, at fair value			$	39					$	274					$	—					$	1,459					$	1,772
Liabilities
VIEs
CLO notes, at fair value using the fair value option			$	—					$	268					$	—					$	—					$	268
Total liabilities, at fair value			$	—					$	268					$	—					$	—					$	268

The following table summarizes the fair value hierarchy levels of consolidated investment entities as of December 31, 2019:

			Level 1						Level 2						Level 3						NAV						Total
Assets
VIEs
Cash and cash equivalents			$	68					$	—					$	—					$	—					$	68
Corporate loans, at fair value using the fair value option			—						513						—						—						513
Limited partnerships/corporations, at fair value			—						—						—						1,470						1,470
VOEs
Limited partnerships/corporations, at fair value			—						—						—						162						162
Total assets, at fair value			$	68					$	513					$	—					$	1,632					$	2,213
Liabilities
VIEs
CLO notes, at fair value using the fair value option			$	—					$	474					$	—					$	—					$	474
Total liabilities, at fair value			$	—					$	474					$	—					$	—					$	474

Transfers of investments out of Level 3 and into Level 2 or Level 1, if any, are recorded as of the beginning of the period in which the transfer occurred. For the three and six months ended June 30, 2020 and 2019, there were no transfers in or out of Level 3 or transfers between Level 1 and Level 2.

---

Deconsolidation of Certain Investment Entities

The Company determined its interest in the Pomona Investment Fund was less than a majority of the fund's NAV and therefore did not represent a controlling financial interest. As a result of this determination, the Company deconsolidated one investment entity during the three and six months ended June 30, 2020. There were no deconsolidations during the three and six months ended June 30, 2019.

Nonconsolidated VIEs

CLOs

In addition to the consolidated CLOs, the Company also holds variable interest in certain CLOs that are not consolidated as it has been determined that the Company is not the primary beneficiary. With these CLOs, the Company serves as the investment manager and receives investment management fees and contingent performance fees. Generally, the Company does not hold any interest in the nonconsolidated CLOs but if it does, such ownership has been deemed to be insignificant. The Company has not provided, and is not obligated to provide, any financial or other support to these entities.

The Company reviews its assumptions on a periodic basis to determine if conditions have changed such that the projection of these contingent fees becomes significant enough to reconsider the Company's consolidation status as variable interest holder. As of June 30, 2020 and December 31, 2019, the Company held $ 396 and $ 377 ownership interests, respectively, in unconsolidated CLOs on a continuing basis.

Limited Partnerships

The Company manages or holds investments in certain private equity funds and hedge funds. With these entities, the Company serves as the investment manager and is entitled to receive at-market investment management fees and at-market contingent performance fees. The Company does not consolidate any of these investment funds for which it is not considered to be the primary beneficiary.

In addition, the Company does not consolidate the funds in which its involvement takes a form of a limited partner interest and is restricted to a role of a passive investor, as a limited partner's interest does not provide the Company with any substantive kick-out or participating rights, nor does it provide the Company with power to direct the activities of the fund.

The following table presents the carrying amounts of the variable interests in VIEs in which the Company concluded that it holds a variable interest, but is not the primary beneficiary as of the dates indicated. The Company determines its maximum exposure to loss to be: (i) the amount invested in the debt or equity of the VIE and (ii) other commitments and guarantees to the VIE.

Variable Interests on the Condensed Consolidated Balance Sheet
			June 30, 2020																		December 31, 2019
			Carrying Amount						Maximum exposure to loss						Carrying Amount						Maximum exposure to loss
Fixed maturities, available-for-sale and fair value option			$	396					$	396					$	377					$	377
Limited partnership/corporations			1,376						1,376						1,290						1,290

Securitizations

The Company invests in various tranches of securitization entities, including RMBS, CMBS and ABS. Through its investments, the Company is not obligated to provide any financial or other support to these entities. Each of the RMBS, CMBS and ABS entities are thinly capitalized by design and considered VIEs. The Company's involvement with these entities is limited to that of a passive investor. The Company has no unilateral right to appoint or remove the servicer, special servicer or investment

---

Organizational Restructuring

As a result of the closing of the 2018 Transaction, the decision to cease new sales following the strategic review of the Company’s Individual Life business, additional cost savings targets announced in November 2018, and the Individual Life Transaction, the Company has undertaken restructuring efforts to execute the 2018 and Individual Life Transaction, reduce stranded expenses, as well as improve operational efficiency, strengthen technology capabilities and centralize certain sales, operations and investment management activities ("Organizational Restructuring"). The initiatives associated with the closing of the 2018 Transaction and the decision to cease new sales following the strategic review of the Company's Individual Life Business concluded during 2019. See below for further description of restructuring activities related to the Individual Life Transaction.

These activities have resulted in recognition of severance and organizational transition costs that are reflected in both continuing operations and discontinued operations. Amounts reflected in continuing operations are reported in Operating expenses in the Condensed Consolidated Statements of Operations, but excluded from Adjusted operating earnings before income taxes. These expenses are classified as a component of Other adjustments to Income (loss) from continuing operations before income taxes and consequently are not included in the adjusted operating results of the Company's segments.

The summary below presents Organizational Restructuring expenses, pre-tax, by type of costs incurred, for the periods indicated:

			Three Months Ended June 30,																		Six Months Ended June 30,																		Cumulative Amounts Incurred to Date
			2020						2019						2020						2019
Severance benefits			$	( 5 )					$	4					$	( 8 )					$	51					$	50
Organizational transition costs			42						51						64						87						266
Total restructuring expenses			$	37					$	55					$	56					$	138					$	316
Continuing operations			$	21					$	55					$	36					$	138					$	286
Discontinued operations			$	16					$	—					$	20					$	—					$	30

Total restructuring expenses reflected in the table above include expenses related to the Individual Life transaction of $ 22 and $ 26 for the three and six months ended June 30, 2020, respectively, a substantial portion of which is included in Income(loss) from discontinued operations, net of tax, in the Condensed Consolidated Statements of Operations. The aggregate amount of Organizational Restructuring expenses incurred in 2019 and expected to be incurred through the end of 2020, excluding restructuring efforts resulting from the Individual Life transaction, is in the range of $ 250 to $ 300 . The Company anticipates that these costs will include severance, organizational transition costs incurred to reorganize operations and other costs such as contract terminations and asset write-offs.

---

The following table presents the accrued liability associated with Organizational Restructuring expenses as of June 30, 2020:

			Severance Benefits																		Organizational Transition Costs						Total
Accrued liability as of January 1, 2020			$	30																	$	25					$	55
Provision			( 8 )																		64						56
Payments			( 9 )																		( 49 )						( 58 )
Accrued liability as of June 30, 2020			$	13																	$	40					$	53

Pursuant to the Individual Life Transaction, the Company will divest or dissolve four regulated insurance entities, including its life companies domiciled in Colorado and Indiana, and captive entities domiciled in Arizona. The Company will also divest Voya America Equities LLC, a regulated broker-dealer, and transfer or cease usage of a substantial number of administrative systems. The Company will undertake further restructuring efforts to reduce stranded expenses associated with its Individual Life business as well as its corporate and shared services functions. The Company anticipates incurring additional restructuring expenses directly related to the disposition beyond 2020, in addition to the $ 22 and $ 26 incurred for the three and six months ended June 30, 2020, respectively. These collective costs, which include severance, transition and other costs, cannot currently be estimated but could be material.

Pursuant to the Individual Life Transaction disclosed in the Business Held for Sale and Discontinued Operations Note, the Company will no longer report its Life Insurance business as a segment. The Company revised prior period information to conform to current period presentation.

The Company provides its principal products and services through three segments: Retirement, Investment Management and Employee Benefits.

Measurement

Adjusted operating earnings before income taxes is a measure used by management to evaluate segment performance. The Company believes that Adjusted operating earnings before income taxes provides a meaningful measure of its business and segment performances and enhances the understanding of the Company’s financial results by focusing on the operating performance and trends of the underlying business segments and excluding items that tend to be highly variable from period to period based on capital market conditions and/or other factors. The Company uses the same accounting policies and procedures to measure segment Adjusted operating earnings before income taxes as it does for the directly comparable U.S. GAAP measure Income (loss) from continuing operations before income taxes. Adjusted operating earnings before income taxes does not replace Income (loss) from continuing operations before income taxes as the U.S. GAAP measure of the Company’s consolidated results of operations. Therefore, the Company believes that it is useful to evaluate both Income (loss) from continuing operations before income taxes and Adjusted operating earnings before income taxes when reviewing the Company’s financial and operating performance. Each segment’s Adjusted operating earnings before income taxes is calculated by adjusting Income (loss) from continuing operations before income taxes for the following items:

• Net investment gains (losses), net of related amortization of DAC, VOBA, sales inducements and unearned revenue, which are significantly influenced by economic and market conditions, including interest rates and credit spreads, and are not indicative of normal operations. 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 are significantly influenced by economic and market conditions and are not indicative of normal operations, 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 Adjusted 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. Other derivative and reserve changes related to guaranteed benefits are excluded from adjusted operating earnings, including the impacts related to changes in the Company's nonperformance spread;

• Income (loss) related to businesses exited or to be exited through reinsurance or divestment, which includes gains and (losses) associated with transactions to exit blocks of business within continuing operations (including net investment gains (losses) on securities sold and expenses directly related to these transactions) and residual run-off activity (including an insignificant number of Individual Life, Annuities and CBVA policies that were not part of the Individual Life and 2018 Transactions). Excluding this activity, which also includes amortization of intangible assets related to businesses exited or to be exited, better reveals trends in the Company's core business and more closely aligns Adjusted operating earnings before income taxes with how the Company manages its segments;

• Income (loss) attributable to noncontrolling interest, which represents the interest of shareholders, other than those of the Company, in consolidated entities. Income (loss) attributable to noncontrolling interest represents such shareholders' interests in the gains and (losses) of those entities, or the attribution of results from consolidated VIEs or VOEs to which the Company is not economically entitled;

◦ Dividend payments made to preferred shareholders are included as reductions to reflect the Adjusted operating earnings that is available to common shareholders;

• Income (loss) related to early extinguishment of debt, which includes losses incurred as a result of transactions where the Company repurchases outstanding principal amounts of debt; these losses are excluded from Adjusted operating earnings before income taxes since the outcome of decisions to restructure debt are not indicative of normal operations;

• Impairment of goodwill, value of management contract rights and value of customer relationships acquired, which includes losses as a result of impairment analysis; these represent losses related to infrequent events and do not reflect normal, cash-settled expenses;

• Immediate recognition of net actuarial gains (losses) related to the Company's pension and other postretirement benefit obligations and gains (losses) from plan amendments and curtailments, which includes actuarial gains and losses as a result of differences between actual and expected experience on pension plan assets or projected benefit obligation during a given period. The Company immediately recognizes actuarial gains and (losses) related to pension and other postretirement benefit obligations and gains and losses from plan adjustments and curtailments. These amounts do not reflect normal, cash-settled expenses and are not indicative of current Operating expense fundamentals; and

• Other items not indicative of normal operations or performance of the Company's segments or related to events such as

capital or organizational restructurings undertaken to achieve long-term economic benefits, including certain costs related to debt and equity offerings, acquisition / merger integration expenses, severance and other expenses associated with such activities. These items vary widely in timing, scope and frequency between periods as well as between companies to which the Company is compared. Accordingly, the Company adjusts for these items as management believes that these items distort the ability to make a meaningful evaluation of the current and future performance of the Company's segments.

---

The summary below reconciles Adjusted operating earnings before income taxes for the segments to Income (loss) from continuing operations before income taxes for the periods indicated:

			Three Months Ended June 30,																		Six Months Ended June 30,
			2020						2019						2020						2019
Income (loss) from continuing operations before income taxes			$	( 48 )					$	243					$	( 4 )					$	345
Less Adjustments:
Net investment gains (losses) and related charges and adjustments			42						45						34						58
Net guaranteed benefit hedging gains (losses) and related charges and adjustments			38						( 6 )						( 52 )						( 10 )
Income (loss) related to businesses exited or to be exited through reinsurance or divestment			( 55 )						40						( 45 )						49
Income (loss) attributable to noncontrolling interest			( 79 )						26						( 73 )						25
Immediate recognition of net actuarial gains (losses) related to pension and other post-employment benefit obligations and gains (losses) from plan amendments and curtailments			—						—						—						66
Dividend payments made to preferred shareholders			4						—						18						10
Other adjustments			( 15 )						( 52 )						( 37 )						( 144 )
Total adjustments to income (loss) from continuing operations			$	( 65 )					$	53					$	( 155 )					$	54
Adjusted operating earnings before income taxes by segment:
Retirement			$	37					$	180					$	160					$	309
Investment Management			20						41						59						75
Employee Benefits			36						49						98						87
Corporate			( 75 )						( 80 )						( 166 )						( 180 )
Total			$	17					$	190					$	151					$	291

Adjusted operating revenues is a measure of the Company's segment revenues. Each segment's Operating revenues are calculated by adjusting Total revenues to exclude the following items:

• Net investment gains (losses) and related charges and adjustments, which are significantly influenced by economic and market conditions, including interest rates and credit spreads and are not indicative of normal operations. 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. These are net of related amortization of unearned revenue;

• Gains (losses) on changes in fair value of derivatives related to guaranteed benefits, which is significantly influenced by economic and market conditions and not indicative of normal operations, includes changes in the fair value of derivatives related to guaranteed benefits, less the estimated cost of these benefits. The estimated cost, which is reflected in Adjusted operating revenues, 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. Other derivative and reserve changes related to guaranteed benefits are excluded from Adjusted operating revenues, including the impacts related to changes in the Company's nonperformance spread;

---

• Revenues related to businesses exited or to be exited through reinsurance or divestment, which includes revenues associated with transactions to exit blocks of business within continuing operations (including net investment gains (losses) on securities sold related to these transactions) and residual run-off activity (including an insignificant number of Individual Life, Annuities and CBVA policies that were not part of the Individual Life and 2018 Transactions). Excluding this activity better reveals trends in the Company's core business and more closely aligns Adjusted operating revenues with how the Company manages its segments;

• Revenues attributable to noncontrolling interest, which represents the interests of shareholders, other than the Company, in consolidated entities. Revenues attributable to noncontrolling interest represents such shareholders' interests in the gains and losses of those entities, or the attribution of results from consolidated VIEs or VOEs to which the Company is not economically entitled; and

• Other adjustments to Total revenues primarily reflect fee income earned by the Company's broker-dealers for sales of non-proprietary products, which are reflected net of commission expense in the Company's segments’ operating revenues, other items where the income is passed on to third parties and the elimination of intercompany investment expenses included in Adjusted operating revenues.

The summary below reconciles Adjusted operating revenues for the segments to Total revenues for the periods indicated:

			Three Months Ended June 30,																		Six Months Ended June 30,
			2020						2019						2020						2019
Total revenues			$	1,663					$	1,969					$	3,348					$	3,791
Adjustments:
Net realized investment gains (losses) and related charges and adjustments			41						42						33						55
Gains (losses) on change in fair value of derivatives related to guaranteed benefits			38						( 5 )						( 52 )						( 9 )
Revenues related to businesses exited or to be exited through reinsurance or divestment			332						417						676						815
Revenues attributable to noncontrolling interest			( 66 )						50						( 57 )						54
Other adjustments			93						70						125						152
Total adjustments to revenues			438						574						$	726					$	1,067
Adjusted operating revenues by segment:
Retirement			559						688						$	1,236					$	1,336
Investment Management			129						163						294						311
Employee Benefits			530						515						1,074						1,023
Corporate			7						29						18						54
Total			$	1,225					$	1,395					$	2,622					$	2,724

Other Segment Information

The Investment Management segment revenues include the following intersegment revenues, primarily consisting of asset-based management and administration fees for the periods indicated:

			Three Months Ended June 30,																		Six Months Ended June 30,
			2020						2019						2020						2019
Investment Management intersegment revenues			$	27					$	25					$	53					$	51

---

The summary below presents Total assets for the Company’s segments as of the dates indicated:

			June 30, 2020						December 31, 2019
Retirement			$	116,471					$	118,024
Investment Management			690						745
Employee Benefits			2,893						3,117
Corporate			25,342						25,206
Total assets, before consolidation (1)			145,396						147,092
Consolidation of investment entities			1,615						1,890
Total assets, excluding assets held for sale			147,011						148,982
Assets held for sale			19,923						20,069
Total assets			$	166,934					$	169,051

⁽¹⁾ Total assets, before consolidation includes the Company's direct investments in CIEs prior to consolidation, which are accounted for using the equity method or fair value option.

---

The accompanying condensed consolidating financial information has been prepared and presented pursuant to SEC Regulation S-X, Rule 3-10, "Financial Statements of Guarantors and Issuers of Guaranteed Securities Registered or Being Registered" ("Rule 3-10"). The condensed consolidating financial information presents the financial position of Voya Financial, Inc. ("Parent Issuer"), Voya Holdings ("Subsidiary Guarantor") and all other subsidiaries ("Non-Guarantor Subsidiaries") of the Company as of June 30, 2020 and December 31, 2019, their results of operation and comprehensive income for the three and six months ended June 30, 2020 and 2019, and statements of cash flows for the six months ended June 30, 2020 and 2019.

The 5.7 % senior notes due 2043, the 3.65 % senior notes due 2026, the 4.8 % senior notes due 2046, the 3.125 % senior notes due 2024 (collectively, the "Senior Notes"), the 5.65 % fixed-to-floating rate junior subordinated notes due 2053 and the 4.7 % fixed-to-floating junior subordinated notes due 2048 (collectively, the "Junior Subordinated Notes"), each issued by Parent Issuer, are fully and unconditionally guaranteed by Subsidiary Guarantor, a 100 % owned subsidiary of Parent Issuer. No other subsidiary of Parent Issuer guarantees the Senior Notes or the Junior Subordinated Notes. Rule 3-10(h) provides that a guarantee is full and unconditional if, when the issuer of a guaranteed security has failed to make a scheduled payment, the guarantor is obligated to make the scheduled payment immediately and, if it does not, any holder of the guaranteed security may immediately bring suit directly against the guarantor for payment of amounts due and payable. In the event that Parent Issuer does not fulfill the guaranteed obligations, any holder of the Senior Notes or the Junior Subordinated Notes may immediately bring a claim against Subsidiary Guarantor for amounts due and payable.

The following condensed consolidating financial information is presented in conformance with the components of the Condensed Consolidated Financial Statements. Investments in subsidiaries are accounted for using the equity method for purposes of illustrating the consolidating presentation. Equity in the subsidiaries is therefore reflected in the Parent Issuer's and Subsidiary Guarantor's Investment in subsidiaries and Equity in earnings of subsidiaries. Non-Guarantor Subsidiaries represent all other subsidiaries on a combined basis. The consolidating adjustments presented herein eliminate investments in subsidiaries and intercompany balances and transactions.

---

Condensed Consolidating Balance Sheet

June 30, 2020

			Parent Issuer						Subsidiary Guarantor						Non-Guarantor Subsidiaries						Consolidating Adjustments						Consolidated
Assets:
Investments:
Fixed maturities, available-for-sale, at fair value			$	5					$	—					$	40,948					$	( 15 )					$	40,938
Fixed maturities, at fair value using the fair value option			—						—						3,098						—						3,098
Equity securities, at fair value			—						—						225						—						225
Short-term investments			—						—						73						—						73
Mortgage loans on real estate, net of valuation allowance			—						—						6,904						—						6,904
Less: Allowance for credit losses			—						—						74						—						74
Mortgage loans on real estate, net			—						—						6,830						—						6,830
Policy loans			—						—						746						—						746
Limited partnerships/corporations			4						—						1,372						—						1,376
Derivatives			48						—						761						—						809
Investments in subsidiaries			11,334						8,695						—						( 20,029 )						—
Other investments			—						—						319						—						319
Securities pledged			—						—						1,122						—						1,122
Total investments			11,391						8,695						55,494						( 20,044 )						55,536
Cash and cash equivalents			243						—						867						—						1,110
Short-term investments under securities loan agreements, including collateral delivered			11						—						1,648						—						1,659
Accrued investment income			—						—						507						—						507
Premium receivable and reinsurance recoverable			—						—						3,791						—						3,791
Less: Allowance for credit losses on reinsurance recoverable			—						—						24						—						24
Premium receivable and reinsurance recoverable, net			—						—						3,767						—						3,767
Deferred policy acquisition costs and Value of business acquired			—						—						1,967						—						1,967
Deferred income taxes			830						44						452						—						1,326
Loans to subsidiaries and affiliates			246						—						254						( 500 )						—
Due from subsidiaries and affiliates			4						—						3						( 7 )						—
Other assets			5						—						831						—						836
Assets related to consolidated investment entities:
Limited partnerships/corporations, at fair value			—						—						1,459						—						1,459
Cash and cash equivalents			—						—						39						—						39
Corporate loans, at fair value using the fair value option			—						—						274						—						274
Other assets			—						—						10						—						10
Assets held in separate accounts			—						—						78,521						—						78,521
Assets held for sale			—						—						19,923						—						19,923
Total assets			$	12,730					$	8,739					$	166,016					$	( 20,551 )					$	166,934

---

Condensed Consolidating Balance Sheet (Continued)

June 30, 2020

			Parent Issuer						Subsidiary Guarantor						Non-Guarantor Subsidiaries						Consolidating Adjustments						Consolidated
Liabilities and Shareholders' Equity:
Future policy benefits			$	—					$	—					$	9,984					$	—					$	9,984
Contract owner account balances			—						—						41,674						—						41,674
Payables under securities loan and repurchase agreements, including collateral held			23						—						1,585						—						1,608
Short-term debt			254						51						196						( 500 )						1
Long-term debt			2,670						371						17						( 15 )						3,043
Derivatives			48						—						902						—						950
Pension and other postretirement provisions			—						—						431						—						431
Current income taxes			144						( 18 )						19						—						145
Due to subsidiaries and affiliates			1						—						4						( 5 )						—
Other liabilities			42						11						1,329						( 2 )						1,380
Liabilities related to consolidated investment entities:
Collateralized loan obligations notes, at fair value using the fair value option			—						—						268						—						268
Other liabilities			—						—						606						—						606
Liabilities related to separate accounts			—						—						78,521						—						78,521
Liabilities held for sale			—						—						18,034						—						18,034
Total liabilities			3,182						415						153,570						( 522 )						156,645
Shareholders' equity:
Total Voya Financial, Inc. shareholders' equity			9,548						8,324						11,705						( 20,029 )						9,548
Noncontrolling interest			—						—						741						—						741
Total shareholders' equity			9,548						8,324						12,446						( 20,029 )						10,289
Total liabilities and shareholders' equity			$	12,730					$	8,739					$	166,016					$	( 20,551 )					$	166,934

---

Condensed Consolidating Balance Sheet

December 31, 2019

			Parent Issuer						Subsidiary Guarantor						Non-Guarantor Subsidiaries						Consolidating Adjustments						Consolidated
Assets:
Investments:
Fixed maturities, available-for-sale, at fair value			$	5					$	—					$	39,673					$	( 15 )					$	39,663
Fixed maturities, at fair value using the fair value option			—						—						2,707						—						2,707
Equity securities, at fair value			—						—						196						—						196
Short-term investments			—						—						68						—						68
Mortgage loans on real estate, net of valuation allowance			—						—						6,878						—						6,878
Less: Allowance for credit losses			—						—						—						—						—
Mortgage loans on real estate, net			—						—						6,878						—						6,878
Policy loans			—						—						776						—						776
Limited partnerships/corporations			4						—						1,286						—						1,290
Derivatives			49						—						267						—						316
Investments in subsidiaries			11,003						8,493						—						( 19,496 )						—
Other investments			—						—						385						—						385
Securities pledged			—						—						1,408						—						1,408
Total investments			11,061						8,493						53,644						( 19,511 )						53,687
Cash and cash equivalents			212						—						969						—						1,181
Short-term investments under securities loan agreements, including collateral delivered			11						—						1,384						—						1,395
Accrued investment income			—						—						505						—						505
Premium receivable and reinsurance recoverable			—						—						3,732						—						3,732
Less: Allowance for credit losses on reinsurance recoverable			—						—						—						—						—
Premium receivable and reinsurance recoverable, net			—						—						3,732						—						3,732
Deferred policy acquisition costs and Value of business acquired			—						—						2,226						—						2,226
Deferred income taxes			816						39						603						—						1,458
Loans to subsidiaries and affiliates			164						—						69						( 233 )						—
Due from subsidiaries and affiliates			2						—						6						( 8 )						—
Other assets			7						—						895						—						902
Assets related to consolidated investment entities:
Limited partnerships/corporations, at fair value			—						—						1,632						—						1,632
Cash and cash equivalents			—						—						68						—						68
Corporate loans, at fair value using the fair value option			—						—						513						—						513
Other assets			—						—						13						—						13
Assets held in separate accounts			—						—						81,670						—						81,670
Assets held for sale			—						—						20,069						—						20,069
Total assets			$	12,273					$	8,532					$	167,998					$	( 19,752 )					$	169,051

---

Condensed Consolidating Balance Sheet (Continued)

December 31, 2019

			Parent Issuer						Subsidiary Guarantor						Non-Guarantor Subsidiaries						Consolidating Adjustments						Consolidated
Liabilities and Shareholders' Equity:
Future policy benefits			$	—					$	—					$	9,945					$	—					$	9,945
Contract owner account balances			—						—						40,923						—						40,923
Payables under securities loan and repurchase agreements, including collateral held			—						—						1,373						—						1,373
Short-term debt			69						87						78						( 233 )						1
Long-term debt			2,669						371						17						( 15 )						3,042
Derivatives			50						—						353						—						403
Pension and other postretirement provisions			—						—						468						—						468
Current income taxes			28						( 17 )						16						—						27
Due to subsidiaries and affiliates			4						—						2						( 6 )						—
Other liabilities			45						10						1,292						( 2 )						1,345
Liabilities related to consolidated investment entities:
Collateralized loan obligations notes, at fair value using the fair value option			—						—						474						—						474
Other liabilities			—						—						652						—						652
Liabilities related to separate accounts			—						—						81,670						—						81,670
Liabilities held for sale			—						—						18,498						—						18,498
Total liabilities			2,865						451						155,761						( 256 )						158,821
Shareholders' equity:
Total Voya Financial, Inc. shareholders' equity			9,408						8,081						11,415						( 19,496 )						9,408
Noncontrolling interest			—						—						822						—						822
Total shareholders' equity			9,408						8,081						12,237						( 19,496 )						10,230
Total liabilities and shareholders' equity			$	12,273					$	8,532					$	167,998					$	( 19,752 )					$	169,051

---

Condensed Consolidating Statement of Operations

For the Three Months Ended June 30, 2020

			Parent Issuer						Subsidiary Guarantor						Non-Guarantor Subsidiaries						Consolidating Adjustments						Consolidated
Revenues:
Net investment income			$	2					$	—					$	587					$	( 3 )					$	586
Fee income			—						—						458						—						458
Premiums			—						—						607						—						607
Net realized capital gains (losses):
Total impairments			—						—						( 50 )						—						( 50 )
Other net realized capital gains (losses)			21						—						28						—						49
Total net realized capital gains (losses)			21						—						( 22 )						—						( 1 )
Other revenue			—						—						81						—						81
Income (loss) related to consolidated investment entities:
Net investment income			—						—						( 68 )						—						( 68 )
Total revenues			23						—						1,643						( 3 )						1,663
Benefits and expenses:
Policyholder benefits			—						—						711						—						711
Interest credited to contract owner account balances			—						—						286						—						286
Operating expenses			( 2 )						—						645						—						643
Net amortization of Deferred policy acquisition costs and Value of business acquired			—						—						19						—						19
Interest expense			34						8						1						( 3 )						40
Operating expenses related to consolidated investment entities:
Interest expense			—						—						10						—						10
Other expense			—						—						2						—						2
Total benefits and expenses			32						8						1,674						( 3 )						1,711
Income (loss) from continuing operations before income taxes			( 9 )						( 8 )						( 31 )						—						( 48 )
Income tax expense (benefit)			( 2 )						( 2 )						9						—						5
Income (loss) from continuing operations			( 7 )						( 6 )						( 40 )						—						( 53 )
Income (loss) from discontinued operations, net of tax			—						—						( 93 )						—						( 93 )
Net income (loss) before equity in earnings (losses) of unconsolidated affiliates			( 7 )						( 6 )						( 133 )						—						( 146 )
Equity in earnings (losses) of subsidiaries, net of tax			( 60 )						( 27 )						—						87						—
Net income (loss)			( 67 )						( 33 )						( 133 )						87						( 146 )
Less: Net income (loss) attributable to noncontrolling interest			—						—						( 79 )						—						( 79 )
Net income (loss) available to Voya Financial, Inc.			( 67 )						( 33 )						( 54 )						87						( 67 )
Less: Preferred stock dividends			4						—						—						—						4
Net income (loss) available to Voya Financial, Inc.'s common shareholders			$	( 71 )					$	( 33 )					$	( 54 )					$	87					$	( 71 )

---

Condensed Consolidating Statement of Operations

For the Six Months Ended June 30, 2020

			Parent Issuer						Subsidiary Guarantor						Non-Guarantor Subsidiaries						Consolidating Adjustments						Consolidated
Revenues:
Net investment income			$	5					$	—					$	1,285					$	( 6 )					$	1,284
Fee income			—						—						963						—						963
Premiums			—						—						1,215						—						1,215
Net realized capital gains (losses):
Total impairments			—						—						( 70 )						—						( 70 )
Other net realized capital gains (losses)			( 5 )						—						( 159 )						—						( 164 )
Total net realized capital gains (losses)			( 5 )						—						( 229 )						—						( 234 )
Other revenue			—						—						173						—						173
Income (loss) related to consolidated investment entities:
Net investment income			—						—						( 53 )						—						( 53 )
Total revenues			—						—						3,354						( 6 )						3,348
Benefits and expenses:
Policyholder benefits			—						—						1,307						—						1,307
Interest credited to contract owner account balances			—						—						572						—						572
Operating expenses			2						—						1,281						—						1,283
Net amortization of Deferred policy acquisition costs and Value of business acquired			—						—						95						—						95
Interest expense			68						15						3						( 6 )						80
Operating expenses related to consolidated investment entities:
Interest expense			—						—						13						—						13
Other expense			—						—						2						—						2
Total benefits and expenses			70						15						3,273						( 6 )						3,352
Income (loss) from continuing operations before income taxes			( 70 )						( 15 )						81						—						( 4 )
Income tax expense (benefit)			( 15 )						( 5 )						19						—						( 1 )
Income (loss) from continuing operations			( 55 )						( 10 )						62						—						( 3 )
Income (loss) from discontinued operations, net of tax			—						—						( 221 )						—						( 221 )
Net income (loss) before equity in earnings (losses) of unconsolidated affiliates			( 55 )						( 10 )						( 159 )						—						( 224 )
Equity in earnings (losses) of subsidiaries, net of tax			( 96 )						109						—						( 13 )						—
Net income (loss)			( 151 )						99						( 159 )						( 13 )						( 224 )
Less: Net income (loss) attributable to noncontrolling interest			—						—						( 73 )						—						( 73 )
Net income (loss) available to Voya Financial, Inc.			( 151 )						99						( 86 )						( 13 )						( 151 )
Less: Preferred stock dividends			18						—						—						—						18
Net income (loss) available to Voya Financial, Inc.'s common shareholders			$	( 169 )					$	99					$	( 86 )					$	( 13 )					$	( 169 )

---

Condensed Consolidating Statement of Operations

For the Three Months Ended June 30, 2019

			Parent Issuer						Subsidiary Guarantor						Non-Guarantor Subsidiaries						Consolidating Adjustments						Consolidated
Revenues:
Net investment income			$	8					$	—					$	708					$	( 4 )					$	712
Fee income			—						—						483						—						483
Premiums			—						—						577						—						577
Net realized capital gains (losses):
Total impairments			—						—						( 3 )						—						( 3 )
Other net realized capital gains (losses)			—						—						28						—						28
Total net realized capital gains (losses)			—						—						25						—						25
Other revenue			—						—						105						—						105
Income (loss) related to consolidated investment entities:
Net investment income			—						—						67						—						67
Total revenues			8						—						1,965						( 4 )						1,969
Benefits and expenses:
Policyholder benefits			—						—						659						—						659
Interest credited to contract owner account balances			—						—						292						—						292
Operating expenses			3						—						667						—						670
Net amortization of Deferred policy acquisition costs and Value of business acquired			—						—						43						—						43
Interest expense			35						8						3						( 4 )						42
Operating expenses related to consolidated investment entities:
Interest expense			—						—						16						—						16
Other expense			—						—						4						—						4
Total benefits and expenses			38						8						1,684						( 4 )						1,726
Income (loss) from continuing operations before income taxes			( 30 )						( 8 )						281						—						243
Income tax expense (benefit)			( 6 )						( 1 )						40						—						33
Income (loss) from continuing operations			( 24 )						( 7 )						241						—						210
Income (loss) from discontinued operations, net of tax			—						( 3 )						45						—						42
Net income (loss) before equity in earnings (losses) of unconsolidated affiliates			( 24 )						( 10 )						286						—						252
Equity in earnings (losses) of subsidiaries, net of tax			250						153						—						( 403 )						—
Net income (loss)			226						143						286						( 403 )						252
Less: Net income (loss) attributable to noncontrolling interest			—						—						26						—						26
Net income (loss) available to Voya Financial, Inc.			226						143						260						( 403 )						226
Less: Preferred stock dividends			—						—						—						—						—
Net income (loss) available to Voya Financial, Inc.'s common shareholders			$	226					$	143					$	260					$	( 403 )					$	226

---

Condensed Consolidating Statement of Operations

For the Six Months Ended June 30, 2019

			Parent Issuer						Subsidiary Guarantor						Non-Guarantor Subsidiaries						Consolidating Adjustments						Consolidated
Revenues:
Net investment income			$	23					$	—					$	1,354					$	( 7 )					$	1,370
Fee income			—						—						965						—						965
Premiums			—						—						1,152						—						1,152
Net realized capital gains (losses):
Total impairments			—						—						( 29 )						—						( 29 )
Other net realized capital gains (losses)			—						—						42						—						42
Total net realized capital gains (losses)			—						—						13						—						13
Other revenue			—						—						219						—						219
Income (loss) related to consolidated investment entities:
Net investment income			—						—						72						—						72
Total revenues			23						—						3,775						( 7 )						3,791
Benefits and expenses:
Policyholder benefits			—						—						1,304						—						1,304
Interest credited to contract owner account balances			—						—						581						—						581
Operating expenses			6						—						1,346						—						1,352
Net amortization of Deferred policy acquisition costs and Value of business acquired			—						—						100						—						100
Interest expense			72						14						5						( 7 )						84
Operating expenses related to consolidated investment entities:
Interest expense			—						—						21						—						21
Other expense			—						—						4						—						4
Total benefits and expenses			78						14						3,361						( 7 )						3,446
Income (loss) from continuing operations before income taxes			( 55 )						( 14 )						414						—						345
Income tax expense (benefit)			( 11 )						( 2 )						55						—						42
Income (loss) from continuing operations			( 44 )						( 12 )						359						—						303
Income (loss) from discontinued operations, net of tax			—						( 82 )						104						—						22
Net income (loss) before equity in earnings (losses) of unconsolidated affiliates			( 44 )						( 94 )						463						—						325
Equity in earnings (losses) of subsidiaries, net of tax			344						221						—						( 565 )						—
Net income (loss)			300						127						463						( 565 )						325
Less: Net income (loss) attributable to noncontrolling interest			—						—						25						—						25
Net income (loss) available to Voya Financial, Inc.			300						127						438						( 565 )						300
Less: Preferred stock dividends			10						—						—						—						10
Net income (loss) available to Voya Financial, Inc.'s common shareholders			$	290					$	127					$	438					$	( 565 )					$	290

---

Condensed Consolidating Statement of Comprehensive Income

For the Three Months Ended June 30, 2020

			Parent Issuer						Subsidiary Guarantor						Non-Guarantor Subsidiaries						Consolidating Adjustments						Consolidated
Net income (loss)			$	( 67 )					$	( 33 )					$	( 133 )					$	87					$	( 146 )
Other comprehensive income (loss), before tax:
Unrealized gains (losses) on securities			2,782						2,171						2,782						( 4,953 )						2,782
Impairments			—						—						—						—						—
Pension and other postretirement benefits liability			( 1 )						( 1 )						( 1 )						2						( 1 )
Other comprehensive income (loss), before tax			2,781						2,170						2,781						( 4,951 )						2,781
Income tax expense (benefit) related to items of other comprehensive income (loss)			583						456						584						( 1,040 )						583
Other comprehensive income (loss), after tax			2,198						1,714						2,197						( 3,911 )						2,198
Comprehensive income (loss)			2,131						1,681						2,064						( 3,824 )						2,052
Less: Comprehensive income (loss) attributable to noncontrolling interest			—						—						( 79 )						—						( 79 )
Comprehensive income (loss) attributable to Voya Financial, Inc.			$	2,131					$	1,681					$	2,143					$	( 3,824 )					$	2,131

Condensed Consolidating Statement of Comprehensive Income

For the Six Months Ended June 30, 2020

			Parent Issuer						Subsidiary Guarantor						Non-Guarantor Subsidiaries						Consolidating Adjustments						Consolidated
Net income (loss)			$	( 151 )					$	99					$	( 159 )					$	( 13 )					$	( 224 )
Other comprehensive income (loss), before tax:
Unrealized gains (losses) on securities			898						634						897						( 1,531 )						898
Impairments			—						—						—						—						—
Pension and other postretirement benefits liability			( 2 )						( 1 )						( 2 )						3						( 2 )
Other comprehensive income (loss), before tax			896						633						895						( 1,528 )						896
Income tax expense (benefit) related to items of other comprehensive income (loss)			188						133						188						( 321 )						188
Other comprehensive income (loss), after tax			708						500						707						( 1,207 )						708
Comprehensive income (loss)			557						599						548						( 1,220 )						484
Less: Comprehensive income (loss) attributable to noncontrolling interest			—						—						( 73 )						—						( 73 )
Comprehensive income (loss) attributable to Voya Financial, Inc.			$	557					$	599					$	621					$	( 1,220 )					$	557

---

Condensed Consolidating Statement of Comprehensive Income

For the Three Months Ended June 30, 2019

			Parent Issuer						Subsidiary Guarantor						Non-Guarantor Subsidiaries						Consolidating Adjustments						Consolidated
Net income (loss)			$	226					$	143					$	286					$	( 403 )					$	252
Other comprehensive income (loss), before tax:
Unrealized gains (losses) on securities			1,141						874						1,142						( 2,016 )						1,141
Impairments			1						1						1						( 2 )						1
Pension and other postretirement benefits liability			( 1 )						( 1 )						( 1 )						2						( 1 )
Other comprehensive income (loss), before tax			1,141						874						1,142						( 2,016 )						1,141
Income tax expense (benefit) related to items of other comprehensive income (loss)			240						183						240						( 423 )						240
Other comprehensive income (loss), after tax			901						691						902						( 1,593 )						901
Comprehensive income (loss)			1,127						834						1,188						( 1,996 )						1,153
Less: Comprehensive income (loss) attributable to noncontrolling interest			—						—						26						—						26
Comprehensive income (loss) attributable to Voya Financial, Inc.			$	1,127					$	834					$	1,162					$	( 1,996 )					$	1,127

Condensed Consolidating Statement of Comprehensive Income

For the Six Months Ended June 30, 2019

			Parent Issuer						Subsidiary Guarantor						Non-Guarantor Subsidiaries						Consolidating Adjustments						Consolidated
Net income (loss)			$	300					$	127					$	463					$	( 565 )					$	325
Other comprehensive income (loss), before tax:
Unrealized gains (losses) on securities			2,425						1,910						2,426						( 4,336 )						2,425
Impairments			2						2						2						( 4 )						2
Pension and other postretirement benefits liability			( 2 )						( 1 )						( 2 )						3						( 2 )
Other comprehensive income (loss), before tax			2,425						1,911						2,426						( 4,337 )						2,425
Income tax expense (benefit) related to items of other comprehensive income (loss)			508						399						508						( 907 )						508
Other comprehensive income (loss), after tax			1,917						1,512						1,918						( 3,430 )						1,917
Comprehensive income (loss)			2,217						1,639						2,381						( 3,995 )						2,242
Less: Comprehensive income (loss) attributable to noncontrolling interest			—						—						25						—						25
Comprehensive income (loss) attributable to Voya Financial, Inc.			$	2,217					$	1,639					$	2,356					$	( 3,995 )					$	2,217

---

Condensed Consolidating Statement of Cash Flows

For the Six Months Ended June 30, 2020

			Parent Issuer						Subsidiary Guarantor						Non-Guarantor Subsidiaries						Consolidating Adjustments						Consolidated
Net cash (used in) provided by operating activities			$	53					$	306					$	394					$	( 321 )					$	432
Cash Flows from Investing Activities:
Proceeds from the sale, maturity, disposal or redemption of:
Fixed maturities			—						—						2,663						—						2,663
Equity securities			—						—						5						—						5
Mortgage loans on real estate			—						—						288						—						288
Limited partnerships/corporations			—						—						123						—						123
Acquisition of:
Fixed maturities			—						—						( 3,055 )						—						( 3,055 )
Equity securities			—						—						( 2 )						—						( 2 )
Mortgage loans on real estate			—						—						( 313 )						—						( 313 )
Limited partnerships/corporations			—						—						( 187 )						—						( 187 )
Short-term investments, net			—						—						( 5 )						—						( 5 )
Derivatives, net			( 6 )						—						110						—						104
Sales from consolidated investments entities			—						—						221						—						221
Purchases within consolidated investment entities			—						—						( 567 )						—						( 567 )
Maturity (issuance) of short-term intercompany loans, net			( 83 )						—						( 185 )						268						—
Return of capital contributions and dividends from subsidiaries			294						29						—						( 323 )						—
Capital contributions to subsidiaries			—						( 5 )						—						5						—
Collateral received (delivered), net			23						—						( 53 )						—						( 30 )
Other, net			—						—						27						—						27
Net cash used in investing activities - discontinued operations			—						—						( 222 )						—						( 222 )
Net cash (used in) provided by investing activities			228						24						( 1,152 )						( 50 )						( 950 )

---

Condensed Consolidating Statement of Cash Flow

(Continued)

For the Six Months Ended June 30, 2020

			Parent Issuer						Subsidiary Guarantor						Non-Guarantor Subsidiaries						Consolidating Adjustments						Consolidated
Cash Flows from Financing Activities:
Deposits received for investment contracts			—						—						3,089						—						3,089
Maturities and withdrawals from investment contracts			—						—						( 2,928 )						—						( 2,928 )
Settlements on deposit contracts			—						—						( 4 )						—						( 4 )
Net proceeds from (repayments of) short-term intercompany loans			185						( 36 )						119						( 268 )						—
Return of capital contributions and dividends to parent			—						( 294 )						( 350 )						644						—
Contributions of capital from parent			—						—						5						( 5 )						—
Borrowings of consolidated investment entities			—						—						331						—						331
Repayments of borrowings of consolidated investment entities			—						—						( 460 )						—						( 460 )
Contributions from (distributions to) participants in consolidated investment entities			—						—						682						—						682
Proceeds from issuance of common stock, net			2						—						—						—						2
Share-based compensation			( 14 )						—						( 1 )						—						( 15 )
Common stock acquired - Share repurchase			( 366 )						—						—						—						( 366 )
Dividends paid on common stock			( 39 )						—						—						—						( 39 )
Dividends paid on preferred stock			( 18 )						—						—						—						( 18 )
Principal payments for financing leases			—						—						( 10 )						—						( 10 )
Net cash provided by financing activities - discontinued operations			—						—						305						—						305
Net cash provided by (used in) financing activities			( 250 )						( 330 )						778						371						569
Net increase (decrease) in cash and cash equivalents			31						—						20						—						51
Cash and cash equivalents, beginning of period			212						—						1,260						—						1,472
Cash and cash equivalents, end of period			243						—						1,280						—						1,523
Less: Cash and cash equivalents of discontinued operations, end of period			—						—						413						—						413
Cash and cash equivalents of continuing operations, end of period			$	243					$	—					$	867					$	—					$	1,110

---

Condensed Consolidating Statement of Cash Flows

For the Six Months Ended June 30, 2019

			Parent Issuer						Subsidiary Guarantor						Non-Guarantor Subsidiaries						Consolidating Adjustments						Consolidated
Net cash (used in) provided by operating activities			$	( 83 )					$	435					$	632					$	( 435 )					$	549
Cash Flows from Investing Activities:
Proceeds from the sale, maturity, disposal or redemption of:
Fixed maturities			—						—						3,789						—						3,789
Equity securities			13						—						2						—						15
Mortgage loans on real estate			—						—						544						—						544
Limited partnerships/corporations			—						—						105						—						105
Acquisition of:
Fixed maturities			—						—						( 3,291 )						—						( 3,291 )
Equity securities			( 21 )						—						( 2 )						—						( 23 )
Mortgage loans on real estate			—						—						( 303 )						—						( 303 )
Limited partnerships/corporations			—						—						( 184 )						—						( 184 )
Short-term investments, net			—						—						( 20 )						—						( 20 )
Derivatives, net			—						—						69						—						69
Sales from consolidated investments entities			—						—						329						—						329
Purchases within consolidated investment entities			—						—						( 572 )						—						( 572 )
Maturity (issuance) of short-term intercompany loans, net			( 197 )						—						4						193						—
Return of capital contributions and dividends from subsidiaries			956						383						—						( 1,339 )						—
Capital contributions to subsidiaries			—						—						—						—						—
Collateral received (delivered), net			—						—						( 177 )						—						( 177 )
Other, net			—						—						( 55 )						—						( 55 )
Net cash used in investing activities - discontinued operations			—						( 128 )						( 25 )						—						( 153 )
Net cash provided by (used in) investing activities			751						255						213						( 1,146 )						73

---

---

---

---

---

---

---

---

---

---

---

---

---

---

---

---

---

---

---

---

---

---

---

---

---

---

---

---

---

---

---

---

---

---

---

---

---

---

---

---

---

---

---

---

---

---

---

---

---

---

---

---

---

---

---

---

---

---

---

---

---

---