For the purposes of the discussion in this Quarterly Report on Form 10-Q, the term Voya Financial, Inc. refers to Voya Financial, Inc. and the terms "Company," "we," "our," and "us" refer to Voya Financial, Inc. and its subsidiaries.



The following discussion and analysis presents a review of our consolidated
results of operations for the three and six months ended June 30, 2020 and 2019
and financial condition as of June 30, 2020 and December 31, 2019. This item
should be read in its entirety and in conjunction with the Condensed
Consolidated Financial Statements and related notes contained in Part I, Item 1.
of this Quarterly Report on Form 10-Q, as well as "Management's Discussion and
Analysis of Financial Condition and Results of Operations" section contained in
our   Annual Report on Form 10-K   for the year ended December 31, 2019 ("Annual
Report on Form 10-K").

In addition to historical data, this discussion contains forward-looking
statements about our business, operations and financial performance based on
current expectations that involve risks, uncertainties and assumptions. Actual
results may differ materially from those discussed in the forward-looking
statements as a result of various factors. See the Note Concerning
Forward-Looking Statements.

Overview

We provide our principal products and services through three segments: Retirement, Investment Management and Employee Benefits. Corporate includes activities not directly related to our segments and certain insignificant run-off activities that are not meaningful to our business strategy. See the Segments Note to our Consolidated Financial Statements in Part II, Item 8. of our Annual Report on Form 10-K for further information on our segments.

The following represents segment percentage contributions to total Adjusted operating revenues and Adjusted operating earnings before income taxes for the six months ended June 30, 2020:


                                                                                         June 30, 2020
                                                                                                      Adjusted Operating
                                                                       Adjusted Operating           Earnings before Income
percent of total                                                            Revenues                        Taxes

Retirement                                                                           47.1  %                       106.0  %
Investment Management                                                                11.2  %                        39.1  %

Employee Benefits                                                                    41.0  %                        64.9  %

Corporate                                                                             0.7  %                      (109.9) %


Discontinued Operations

The Individual Life Transaction



On December 18, 2019, we 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 certain of our subsidiaries, including Security Life of Denver Insurance
Company ("SLD"), Security Life of Denver International Limited ("SLDI") and
Roaring River II, Inc. ("RRII"). 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.

We have determined that the legal entities to be sold and the Individual Life
and Annuities businesses within these entities 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 our operations. Accordingly, the results of
operations of the businesses to be sold have been presented as discontinued
operations, and the assets and liabilities of the related businesses have been
classified as held for sale and segregated for all periods presented in this
Quarterly Report on Form 10-Q.

As of December 31, 2019, we 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 defined below) as of December 31, 2019, less
cost to sell and other adjustments in accordance with the Resolution MTA. In
addition, we are required to remeasure the estimated fair value and loss on sale
at the end of each quarter until closing of the
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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. For additional information on the Individual Life
Transaction and the related estimated loss on sale, see Trends and Uncertainties
in Part I, Item 2 of this Quarterly Report on Form 10-Q.

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
in-scope individual life insurance and annuities businesses. RLI, RLNY, and
VRIAC will remain subsidiaries of the Company. We currently expect that these
reinsurance transactions will be carried out on a coinsurance or modified
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.
During the second quarter of 2020, we recorded $50 million in intent impairments
based on assets we expect to transfer to the comfort trust upon closing. Based
on values as of June 30, 2020, U.S. GAAP reserves to be ceded under the
Individual Life Transaction 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 (referred to as the "Individual Life
Transaction") 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 our U.S. GAAP
revenues and earnings measures to calculate Adjusted operating revenues and
Adjusted operating earnings before income taxes, respectively.

At the closing of the transaction, in addition to the loss on sale described
above, we will recognize a further adjustment to Total shareholders' equity,
excluding Accumulated other comprehensive income, associated with the portion of
the transaction that involves a sale through reinsurance, to the extent the
structure is carried out on a coinsurance basis with a comfort trust. We
currently estimate that we could realize capital gains, net of DAC and tax, on
the investment securities we sell into the comfort trust of our reinsurance
counterparty. We also estimate that an allowance for credit losses for the
reinsurance recoverable will be established, based on the credit worthiness of
our counterparty, form of collateral and other factors. We currently estimate
these newly established credit losses, as well as the expected reversal of
credit losses on our commercial mortgages are expected to be immaterial on a net
basis. Overall, the net aggregate reduction in Total shareholders' equity,
excluding Accumulated other comprehensive income, due to the Individual Life
Transaction would be in the range of $250 million to $750 million. We currently
expect to be towards the lower end of the range, which includes an estimate of
realized gains on investments of approximately $1.1 billion, net of DAC and
taxes, based on asset values as of June 30, 2020. These estimated impacts are
subject to changes through the date of the transaction closing due to many
factors including interest rate movements, other investment valuation items,
asset selections and changes to the structure of the reinsurance transactions,
including an ultimate reinsurance structure that is not entirely on a
coinsurance basis with a comfort trust.

Furthermore, upon closing of the Individual Life Transaction, we expect to have
deferred intangibles in the range of $1.5 billion to $2.0 billion net of tax,
subject to changes due to the same factors mentioned above regarding the
reduction in Total shareholders' equity, excluding Accumulated other
comprehensive income. The deferred intangibles will consist of (1) existing DAC,
VOBA and URR balances on businesses already exited via reinsurance and for the
portion of the transaction that involves a sale through reinsurance, (2)
existing deferred Cost of reinsurance ("COR") on businesses already exited via
reinsurance and (3) deferred COR (and to the extent policies do not meet risk
transfer, a Deposit asset) to be established upon closing of the reinsurance
transactions mentioned above. The aggregate deferred intangibles will be
amortized as a charge to earnings over the life of the underlying policies. We
expect the annual impact of the amortization of these deferred intangibles to be
approximately $100 million to $150 million, net of tax which will be classified
as a component of Income (loss) related to businesses exited or to be exited via
reinsurance which is an adjustment to Income (loss) from continuing operations
before income taxes to calculate Adjusted operating earnings before taxes and
consequently are not included in the adjusted operating results of our segments.
Additionally, we would expect the annual impact of the amortization of the
deferred intangibles to decline over time.

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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 2018 Transaction

On June 1, 2018, we 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
2018 Transaction, Venerable Holdings, Inc. ("Venerable"), a wholly owned
subsidiary of VA Capital, acquired two of our 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. The 2018 Transaction resulted in the disposition of
substantially all of our Closed Block Variable Annuity ("CBVA") and Annuities
businesses.

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 above, we 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".

Trends and Uncertainties
We describe known material trends and uncertainties that might affect our
business in our   Annual Report on Form 10-K   for the year ended December 31,
2019, under the caption "Management's Discussion and Analysis of Financial
Condition and Results of Operations - Trends and Uncertainties", and in other
sections of that document, including "Risk Factors". In addition, we describe
below in this Management's Discussion and Analysis of Financial Condition and
Results of Operations ("MD&A") more recently developing known trends and
uncertainties that we believe may materially affect our future liquidity,
financial condition or results of operations. All statements in this section,
other than statements of historical fact, are "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act of 1995. For
a discussion of factors that could cause actual results, performance, or events
to differ from those discussed in any forward-looking statement, including in a
material manner, see "Note Concerning Forward-Looking Statements" in this
Quarterly Report on Form 10-Q.

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COVID-19 and its Effect on the Global Economy
COVID-19, the disease caused by the novel coronavirus, has had a significant
adverse effect on the global economy since March of 2020. Although the number of
reported cases and deaths from COVID-19 has slowed in most parts of the world,
the disease continues to spread widely in many U.S. states, among other regions.
The persistence of new infections has slowed the re-opening of the U.S. economy
and, even in countries where restrictions have largely been lifted, economic
activity has been slow to recover.

The effects of COVID-19 on the U.S. and global economies have been severe. Based
on advance estimates, U.S. GDP declined by 33% in the second quarter of 2020,
after a decline of 5% in the first quarter, while the U.S. unemployment rate is
near historic highs. Longer-term, the economic outlook is uncertain, but will
likely depend in significant part on progress with respect to effective
therapies to treat COVID-19 or a vaccine, or on a marked change to public health
policy.

In late March and early April 2020, in reaction to the rapidly developing
economic turmoil, global financial markets experienced a period of extreme
volatility. Equity markets dropped significantly from new highs set in February,
although they largely recovered in the second quarter, although volatility
remains high. Credit markets have also experienced a significant shock, with
10-year U.S. treasury yields declining approximately 100 bps between late
February and early March. The 10-year yield currently sits near an all-time low
at approximately 0.6%. Also since late February, shorter-dated treasury rates
have approached zero, while the 30-year rate has traded at historic lows below
1.40%. Certain credit market sectors, such as energy, real estate,
transportation, and retail, continue to be under considerable stress.
Additionally, certain commodity markets, in particular for oil, experienced
dramatic declines in prices in the first half of 2020, and have only partially
recovered.

Effect on Voya Financial - Financial Condition, Capital and Liquidity
Because both public health and economic circumstances are changing so rapidly at
present, it is impossible to predict how COVID-19 will affect Voya Financial's
future financial condition. Absent a further significant and prolonged market
shock, however, we do not anticipate a material effect on our balance sheet,
statutory capital, or liquidity. Our capital levels remain strong and
significantly above our targets. As of June 30, 2020, our estimated combined RBC
ratio was 468%, above our 400% target.

We believe that we have ample liquidity for the foreseeable future, and, with no
debt maturities until 2023, we have no immediate need for significant amounts of
capital. If a need for additional liquidity were to arise, we continue to have
access to our existing credit facilities and our P-CAPS contingent capital
facility, and we believe that we also maintain ready access to debt capital
markets. Although several ratings agencies have changed their industry outlooks
for U.S. life insurance companies, we have not had any change to our corporate
credit ratings or outlooks, or on the financial strength ratings of our
insurance subsidiaries.

We completed repurchases of approximately $400 million of our common shares in
the first half of 2020, although we paused repurchases later in the first
quarter as a prudent measure in light of current market uncertainties. We do not
anticipate any reduction in our dividend.

The dividends-paying capacity of our insurance subsidiaries could decline if
asset impairments significantly increase, or our asset portfolio experiences a
material number of ratings downgrades and we are required to hold additional
amounts of risk-based capital. If this effect is pronounced, as might be the
case in an extended or particularly deep recession, the impact on our holding
company liquidity could be significant. In such a case, we would need to
consider additional steps to preserve liquidity at the holding company, which
could include reducing or eliminating planned share buybacks or our dividend. In
extreme scenarios, we might need to seek waivers from our bank lenders for net
worth covenants contained in our credit facilities. See "-Investments-Potential
Credit Related COVID-19 Exposures" in this Management's Discussion and Analysis
for a discussion of our asset portfolio exposures to certain sectors that have
been particularly affected by the economic conditions created by COVID-19 and
"-Liquidity and Capital-Credit Facilities" for a discussion of our credit
facilities. To the extent that our credit ratings or outlooks are downgraded due
to adverse developments in our general account or for other reasons, we may face
more difficulty accessing credit markets should we seek to do so as a means of
generating liquidity.

To the extent that an economic downturn affects our estimates of future
profitability, we may also be required to establish an additional valuation
allowance against our deferred tax assets, which would reduce the carrying value
of such assets. With respect to our GAAP balance sheet, such reductions would
decrease our GAAP equity and increase our leverage ratios. The
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statutory surplus of our insurance subsidiaries could also be affected if there
is a reduction in the statutory carrying value of our deferred tax asset
admitted for statutory purposes.

Effect on Voya Financial - Consolidated Results of Operations

Predicting with accuracy the consequences of COVID-19 on our results of operations is impossible. Based on current information, however, we believe that the most significant effects of adverse economic conditions will be on our fee-based income, with net investment income experiencing milder effects. Underwriting income, which will principally be affected by increases to mortality and morbidity due to the disease, could also face significant declines, particularly under severe epidemiological scenarios.



Effects on fee income or net investment income could be material to our results,
particularly if a recession were to be deeper or more prolonged than we
currently anticipate, although we do not currently believe that such effects
will materialize in the near term. And although longer-term effects are more
difficult to judge should adverse economic conditions persist, we currently
believe that sufficient management actions should be available, particularly
with respect to expenses and capital management, to meaningfully offset, on a
per-share basis, the effect of such conditions on our earnings in 2021.

Fee income is affected significantly by levels of AUM, which in turn depends on
average daily equity market prices throughout the quarter. Although equity
prices declined materially by the end of the first quarter and into early second
quarter, equity prices have continued to largely recover from the lows
experienced earlier this year. As expected, the effect on our fee income from
the decline in equity prices was more pronounced in the second quarter. However,
the equity price recoveries that have continued ultimately resulted in average
S&P index levels only being down approximately 4% from the first quarter of the
year. Additionally, if the S&P 500 index levels as of July 31 were to remain
constant through the end of third quarter, the average daily S&P 500 index level
would actually be approximately 11% higher in the third quarter, as compared to
the second quarter. Despite the recent recovery in equity prices, volatility
continues to play a large role in the markets and the ultimate impact on our fee
income cannot be predicted. However, we estimate that, for every 1% decline in
the average daily level of the S&P 500 index, our annual adjusted operating
earnings decline by approximately $4-5 million.

Underwriting income in our Employee Benefits and Individual Life businesses
(with respect to the latter, until we close our divestment of that business)
would be adversely affected to the extent that mortality claims for individual
or group life policies, or medical expense claims under voluntary benefit or
stop loss policies, exceed the related reserves and deductibles. Accordingly, to
the extent that COVID-19 leads to a material increase in overall mortality or
medical expense among our insured population, our financial results could be
materially affected.

Effect on Segment Results of Operations

Retirement



In Retirement, we believe the primary consequences of COVID-19 will result from
changes in equity prices, interest rates and spreads, and increased market
volatility. Our business will also be affected by reduced participant counts and
AUM / AUA, due to:
•lower forecasted sales volumes, particularly in corporate markets, as companies
delay new plan RFPs, offset in part by anticipated lower plan surrenders;
•a decline in deposits, as plan sponsors suspend or reduce matching
contributions;
•furloughs and terminations of plan participants; and
•an increase in participant loans, hardship withdrawals, and qualifying CARES
Act distributions and withdrawals, offset to some extent by a reduction in
required minimum distributions.

The recently enacted federal CARES Act eliminates many disincentives for plan
withdrawals and loans, although it has not yet resulted in any significant
increase in withdrawals or loans among our plan participants. Although some
CARES Act provisions automatically apply to participants and plans without
further action, those provisions that significantly relax restrictions on loans
and distributions must be affirmatively elected by plan sponsors. Based on our
experience to date, we believe that a significant number of employers,
particularly those who sponsor smaller plans, will decline to adopt these
provisions.

In aggregate, we anticipate near-term pressure on Retirement net flows and
earnings, with effects weighted more heavily towards our full-service corporate
markets business and less on recordkeeping business. Although the impact will
primarily be on fee-based income, we estimate that lower interest rates will
contribute to a run-rate reduction of approximately $15 million
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in spread-based income over 2020. Longer-term effects will depend significantly
on equity market performance and prevailing interest rate levels, as well as the
magnitude and duration of elevated unemployment levels. We believe that expense
reductions and other management actions would be available to offset a portion
of any impact.

Investment Management

In Investment Management, we have seen COVID 19 impacts on business driven
primarily by lower fund revaluation results reported in investment capital
including carried interests and performance fees related to investments that
Voya manages. Due to normal lag in reporting from the underlying fund
investments, these investment capital results are recognized generally one
quarter in arrears. We believe, in aggregate, that investment capital valuations
will begin to improve in the second half of 2020, however if the economy
worsens, investment capital results could decline further. In addition, we have
had an elevated level of outflows associated with our retail business at the
outset of the pandemic. The outflows had an adverse effect on fee revenues
earned since fees are typically based upon the fair value of assets. The
elevated level of outflows subsided in the second quarter of 2020, however
elevated outflows could persist if the economy weakens, investors desire
liquidity or relative investment performance declines. Other business impacts
resulting from COVID 19 include a reduction in sales meetings and request for
proposal activities. As another impact of COVID 19, we could see short term
delays in certain anticipated issuances of investment vehicles, which could
negatively impact future sales activity. A prolonged economic contraction would
likely result in lower anticipated AUM throughout the remainder of 2020 and
potentially into 2021 due to asset price levels and potential reduction in
anticipated net flows.

Employee Benefits



In Employee Benefits, effects from COVID-19 are likely to be seen primarily in
increased mortality claims on group life policies, and in a reduction in
anticipated premium revenues, with premium revenues particularly affected in a
more severe recession scenario with significant and prolonged unemployment. We
currently do not expect a significant increase in medical stop loss claims,
since we believe most COVID-19 related claims are likely to fall below
applicable deductibles.

Because the sales cycle for our Employee Benefits products is weighted heavily
towards the start of the calendar year, we do not anticipate a material effect
on full-year 2020 sales due to COVID-19. To the extent that market and workplace
disruptions persist further into 2020, we will likely see an effect on the 2021
sales cycle, especially in group life & disability and voluntary sales. Although
new case sales are likely to decline, we anticipate an offset from higher
in-force case retention.

Premium revenues will face headwinds from increased levels of unemployment as
participant counts decrease, although the impact could be muted to some extent
by increased participation rates in voluntary products. The magnitude and
duration of this effect is likely to be proportional to the depth and length of
adverse economic conditions, particularly employment rates.

We expect mortality claims in group life to be elevated through the second half
of 2020 and into early 2021 due to COVID-19 related deaths, with the magnitude
of such claims dependent on mortality rates from the disease. Voluntary claims
are likely to be similarly affected to the extent that COVID-19 increases
hospitalizations and related medical expenses. Because COVID-19
disproportionately affects older individuals, and our group life policies
generally insure the lives of working-age individuals, the impact of
population-wide mortality rates should be mitigated to some extent by the
younger average age of our covered lives. While the prevalence of COVID-19 among
the U.S. population, and its mortality rate, has been difficult or impossible to
determine, unless mortality experience materially exceeds that predicted by most
epidemiological models, we believe that increased claims will have a
significant, but not material, effect on the financial results of our Employee
Benefits business in 2020. We currently estimate that, for every 10,000
incremental deaths in the United States due to COVID-19, operating earnings of
our Employment Benefits segment would decline by approximately $1 to $2 million
due to increased claims.

Individual Life

Although we have entered into an agreement to sell our Individual Life business,
the financial performance of that business continues to be reflected in our
financial results until that transaction closes, which we currently expect to
occur in the third quarter of 2020. Individual Life financial performance is
reported partially within discontinued operations and partially as a
non-operating adjustment to our consolidated net income.

As with the group life policies that we have underwritten in our Employee
Benefits business, we would expect Individual Life mortality claims to be
elevated for the next several quarters due to COVID-19 related deaths, with the
magnitude of such claims dependent on mortality rates from the disease. As is
the case with group life claims, unless mortality experience related to COVID-19
materially exceeds that predicted by most epidemiological models, we believe
that increased death claims will have
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a significant, but not material, effect on the financial results of our
Individual Life business over that time. We currently estimate that, for every
10,000 incremental deaths in the United States due to COVID-19, the earnings of
our Individual Life segment would decline by approximately $1 to $3 million due
to increased claims.

Effect on Voya Financial Business Operations



The mandatory business shutdowns and stay-at-home orders implemented in most
states have required us to make significant changes to the way in which we
conduct day-to-day business. Although our business has been deemed an essential
service in most or all jurisdictions in which we operate, the vast majority of
Voya Financial employees have been working from home since March 2020. Based on
our experience to date, this transition has been very successful. In particular,
our customer service and IT functions have exhibited a high degree of
performance under these conditions. Although we have begun preparations for an
eventual return to a traditional office-based workforce, it is currently unclear
when or in what manner that may happen.

Despite this considerable success, like others in our industry we are
experiencing some adverse effects from such a significant change to our business
model. Sales visits, client presentations, and other direct customer contact
opportunities have moved to virtual interactions, and many clients or potential
clients have reduced their sales-related activity, which has affected sales
pipelines and other revenue sources. Activities such as transaction processing
and document handling, which generally require physical presence within our
offices, have continued without incident, but are made more difficult with only
skeleton staff available on-site.

The transition to work-from-home also increases vulnerabilities to cybersecurity
threats and other fraudulent activities. Although we are remaining vigilant on
this issue and have not experienced any significant incidents, we are expending
a substantial amount of resources to defend against potential attacks, which may
occur while in this state of heightened risk.

In addition, our business process and IT operations depend to a significant
extent on outsourcing providers and a joint venture based in India, which is
currently subject to a strict countrywide lockdown that requires the employees
of these companies to work from home. Although our joint venture operations did
not experience any notable disruptions from this transition, several outsourcing
providers have experienced difficulty in moving their employee bases to a
work-from-home arrangement. While these difficulties have not yet materially
interfered with our business operations, there is a risk of future disruptions,
particularly if the Indian lockdown persists for an extended period of time.

Interest Rates

We believe the interest rate environment will continue to influence our business and financial performance in the future for several reasons, including the following:



•Our continuing business general account investment portfolio, which was
approximately $54.8 billion as of June 30, 2020, consists predominantly of fixed
income investments and had an annualized earned yield of approximately 4.2% in
the second quarter of 2020. In the near term and absent further material change
in yields available on fixed income investments, we expect the yield we earn on
new investments will be lower than the yields we earn on maturing investments,
which were generally purchased in environments where interest rates were higher
than current levels. We currently anticipate that proceeds that are reinvested
in fixed income investments during 2020 will earn an average yield below the
prevailing portfolio yield. If interest rates were to rise, we expect the yield
on our new money investments would also rise and gradually converge toward the
yield of those maturing assets. In addition, while less material to financial
results than new money investment rates, movements in prevailing interest rates
also influence the prices of fixed income investments that we sell on the
secondary market rather than holding until maturity or repayment, with rising
interest rates generally leading to lower prices in the secondary market, and
falling interest rates generally leading to higher prices.

•Certain of our products pay guaranteed minimum rates such as fixed accounts and
a portion of the stable value accounts included within defined contribution
retirement plans. We are required to pay these guaranteed minimum rates even if
earnings on our investment portfolio decline, with the resulting investment
margin compression negatively impacting earnings. In addition, we expect more
policyholders to hold policies (lower lapses) with comparatively high guaranteed
rates longer in a low interest rate environment. Conversely, a rise in average
yield on our investment portfolio would positively impact earnings if the
average interest rate we pay on our products does not rise correspondingly.
Similarly, we expect policyholders would be less likely to hold policies (higher
lapses) with existing guarantees as interest rates rise.

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Further changes in interest rates, whether positive or negative, would likely
have modest effects on our future Adjusted operating earnings. For example, we
estimate that a 100 basis point increase or decrease in corporate bond yields
over the next three years would generally increase or decrease our Adjusted
operating earnings by approximately $10 to $60 million over that period, with
the impacts increasing from the lower to the higher end of the range the longer
the rate change persists.

Discontinued Operations

As described above, as of December 31, 2019, we recorded an estimated loss on
sale, net of tax of $1,108 related to the Individual Life Transaction. 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. 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 including the assumption of surplus
notes.

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 the 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.

Stranded Costs



As a result of the 2018 Transaction and the Individual Life Transaction, the
historical revenues and certain expenses of the sold businesses have been
classified as discontinued operations. Historical revenues and certain expenses
of the businesses that will be divested via reinsurance at closing of the
Individual Life Transaction (including an insignificant amount of Individual
Life and closed block non retirement annuities that are not part of the
transaction) are reported within continuing operations, but are excluded from
adjusted operating earnings as businesses exited or to be exited through
reinsurance or divestment. Expenses classified within discontinued operations
and businesses exited or to be exited through reinsurance include only direct
operating expenses incurred by these businesses and then only to the extent that
the nature of such expenses was such that we would cease to incur such expenses
upon the close of the 2018 Transaction and the Individual Life
Transaction. Certain other direct costs of these businesses, including those
which relate to activities for which we have or will provide transitional
services and for which we have or will be reimbursed under transition services
agreements ("TSAs") are reported within continuing operations along with the
associated revenues from the TSAs. Additionally, indirect costs, such as those
related to corporate and shared service functions that were previously allocated
to the businesses sold or divested via reinsurance, are reported within
continuing operations. These costs ("Stranded Costs") and the associated
revenues from the TSAs are reported within continuing operations in Corporate,
since we do not believe they are representative of the future run-rate of
revenues and expenses of our continuing operations. The Stranded Costs related
to the 2018 Transaction were removed in the fourth quarter of 2019 and we plan
to address the Stranded Costs related to the Individual Life Transaction through
a cost reduction strategy. Refer to Restructuring in the section below for more
information on this program.

Restructuring

Organizational Restructuring



As a result of the closing of the 2018 Transaction, we have undertaken
restructuring efforts to execute the transition and reduce stranded expenses
associated with our CBVA and fixed and fixed indexed annuities businesses, as
well as our corporate and shared services functions ("Organizational
Restructuring").
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In August 2018, we announced that we were targeting a cost savings of $110
million to $130 million by the middle of 2019 to address the stranded costs of
the 2018 Transaction. Additionally, in October 2018, we announced our decision
to cease new sales following the strategic review of our Individual Life
business, which was expected to result in cost savings of $20 million. The
initiatives associated with these restructuring efforts concluded during 2019.

In November 2018, we announced that we are targeting an additional $100 million
of cost savings by the end of 2020 in addition to the cost savings referenced
above. These savings initiatives will improve operational efficiency, strengthen
technology capabilities and centralize certain sales, operations and investment
management activities. The restructuring charges in connection with these
initiatives are not reflected in our run-rate cost savings estimates.

The Organizational Restructuring initiatives described above 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. For the three and six months ended June 30, 2020,
we incurred Organizational Restructuring expenses of $21 million and $36
million, respectively, associated with continuing operations. For the three and
six months ended June 30, 2019, the Company incurred Organizational
Restructuring expenses of $55 million and $138 million, respectively, associated
with continuing operations.

In addition to the restructuring costs incurred above, the anticipated reduction
in employees from the execution of the initiatives described above triggered an
immaterial curtailment loss and related re-measurement gain of our qualified
defined benefit pension plan as of January 31, 2019, which was recorded during
the first quarter of 2019.

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
million to $300 million. We anticipate that these costs will include severance,
organizational transition costs incurred to reorganize operations and other
costs such as contract terminations and asset write-offs.

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

Operating Measures

This MD&A includes a discussion of Adjusted operating earnings before income
taxes and Adjusted operating revenues, each of which is a measure used by
management to evaluate segment performance. We believe that Adjusted operating
earnings before income taxes provides a meaningful measure of our business
performance and enhances the understanding of our 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 or other factors. Adjusted operating earnings before
income taxes does not replace Income (loss) from continuing operations before
income taxes as the comparable U.S. GAAP measure of our consolidated results of
operations. Therefore, we believe that it is useful to evaluate both Income
(loss) from continuing operations before income taxes and Adjusted operating
earnings before income taxes when reviewing our financial and operating
performance. See the Segments Note in our Condensed Consolidated Financial
Statements in Part I, Item 1. of this Quarterly Report on Form 10-Q for a
description of the adjustments made to reconcile Income (loss) before income
taxes to Total adjusted operating earnings before income taxes and the
adjustments made to reconcile Total revenues to Total adjusted operating
revenues.

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