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Segment Information
 12 Months Ended
Dec. 31, 2019
Segment Reporting [Abstract]  
Segment Information SEGMENT INFORMATION
 
Segments
 
The Company operates through eight segments: PGIM (our global investment management business); Retirement, Group Insurance, Individual Annuities, Individual Life, and Assurance IQ (collectively referred to as the U.S. Businesses); International Businesses; and Closed Block. In addition, the Company reports certain of its results of operations in its Corporate and Other operations.
 
The PGIM segment provides asset management services related to public and private fixed income, public equity and real estate, commercial mortgage origination and servicing, and mutual funds and other retail services to institutional, private and sub-advisory clients (including mutual funds), insurance company separate accounts, government sponsored entities and the Company’s general account.

The U.S. Businesses offer a broad range of products and solutions that cover protection, retirement, savings, income and investment needs. The U.S. Businesses are organized into three divisions:

U.S. Workplace Solutions division. The U.S. Workplace Solutions division consists of the Retirement and Group Insurance segments. The Retirement segment provides a broad range of retirement investment and income products and services to retirement plan sponsors in the public, private and not-for-profit sectors. The Group Insurance segment provides a full range of group life, long-term and short-term group disability, and group corporate-, bank- and trust-owned life insurance in the U.S., primarily to institutional clients for use in connection with employee plans and affinity groups.

U.S. Individual Solutions division. The U.S. Individual Solutions division consists of the Individual Annuities and Individual Life segments. The Individual Annuities segment develops and distributes individual variable and fixed annuity products, primarily to the U.S. mass affluent and affluent markets. The Individual Life segment develops and distributes individual variable life, term life and universal life insurance products primarily to the U.S. mass middle, mass affluent and affluent markets.

Assurance IQ division. The Assurance IQ division consists of the Assurance IQ segment, a leading consumer solutions platform that offers a range of solutions that help meet consumers’ financial needs. Assurance IQ leverages data science and technology to distribute third-party life, health, Medicare and property and casualty products directly to retail shoppers primarily through its digital and independent agent channels.

The International Businesses develops and distributes individual life insurance, retirement and related products to the mass affluent and affluent markets in Japan, Korea and other foreign countries through its Life Planner operations. In addition, similar products are offered to the broad middle income and mass affluent markets across Japan and the Company’s joint ventures in various foreign countries through Life Consultants, the proprietary distribution channel of the Company’s Gibraltar Life operation, as well as other channels, including banks and independent agencies.
 
The Closed Block division includes certain in-force participating insurance and annuity products and corresponding assets that are used for the payment of benefits, expenses and policyholders’ dividends related to these products, as well as certain related assets and liabilities. In connection with demutualization, the Company ceased offering these participating products. The Closed Block division is accounted for as a divested business that is reported separately from the Divested and Run-off Businesses that are included in the Company’s Corporate and Other operations. See Note 15 for additional information on the Closed Block.

Corporate Operations - consist primarily of: (1) capital that is not deployed in any business segment; (2) investments not allocated to business segments, including debt-financed investment portfolios, and tax credit and other tax-enhanced investments financed by business segments; (3) capital debt that is used or will be used to meet the capital requirements of the Company and the related interest expense; (4) our qualified and non-qualified pension and other employee benefit plans, after allocations to business segments; (5) corporate-level activities, after allocations to business segments, including strategic expenditures, acquisition costs, corporate governance, corporate advertising, philanthropic activities, deferred compensation, and costs related to certain contingencies and enhanced regulatory supervision; (6) expenses associated with the multi-year plan of programs that span across our businesses and the functional areas that support those businesses; (7) our ownership interest in a life insurance joint venture in China; (8) certain retained obligations relating to pre-demutualization policyholders; (9) our Risk Appetite Framework; (10) the foreign currency income hedging program used to hedge certain non-U.S. dollar denominated earnings in our International Businesses segment; (11) intercompany arrangements with our PGIM segment to translate certain non-U.S. dollar-denominated earnings at fixed currency exchange rates; and (12) transactions with and between other segments, including the elimination of intercompany transactions for consolidation purposes.

Segment Accounting Policies. The accounting policies of the segments are the same as those described in Note 2. Results for each segment include earnings on attributed equity established at a level which management considers necessary to support each segment’s risks. Operating expenses specifically identifiable to a particular segment are allocated to that segment as incurred. Operating expenses not identifiable to a specific segment that are incurred in connection with the generation of segment revenues are generally allocated based upon the segment’s historical percentage of general and administrative expenses.
 
For information related to significant acquisitions, see Note 1. For information related to the adoption of new accounting pronouncements, see Note 2. The segments’ results in prior years have been revised for these items, as applicable, to conform to the current year presentation.
 
Adjusted Operating Income
 
The Company analyzes the operating performance of each segment using “adjusted operating income.” Adjusted operating income does not equate to “Income (loss) before income taxes and equity in earnings of operating joint ventures” or “Net income (loss)” as determined in accordance with U.S. GAAP but is the measure of segment profit or loss used by the Company’s chief operating decision maker to evaluate segment performance and allocate resources and, consistent with authoritative guidance, is the measure of segment performance presented below. Adjusted operating income is calculated by adjusting each segment’s “Income (loss) before income taxes and equity in earnings of operating joint ventures” for the following items, which are described in greater detail below:
 
•
Realized investment gains (losses), net, and related adjustments;
•
Charges related to realized investment gains (losses), net;
•
Market experience updates;
•
Divested and Run-off Businesses;
•
Other adjustments; and
•
Equity in earnings of operating joint ventures and earnings attributable to noncontrolling interests.
 
These items are important to an understanding of overall results of operations. Adjusted operating income is not a substitute for income determined in accordance with U.S. GAAP, and the Company’s definition of adjusted operating income may differ from that used by other companies. However, the Company believes that the presentation of adjusted operating income as measured for management purposes enhances the understanding of results of operations by highlighting the results from ongoing operations and the underlying profitability factors of its businesses.

Realized investment gains (losses), net, and related adjustments
 
Realized investment gains (losses), net
 
Adjusted operating income excludes “Realized investment gains (losses), net,” except for certain items described below. Significant activity excluded from adjusted operating income includes impairments and credit-related gains (losses) from sales of securities, the timing of which depends largely on market credit cycles and can vary considerably across periods, and interest rate-related gains (losses) from sales of securities, which are largely subject to the Company’s discretion and influenced by market opportunities, as well as the Company’s tax and capital profile. Additionally, adjusted operating income generally excludes realized investment gains (losses) from products that contain embedded derivatives, and from associated derivative portfolios that are part of an asset/liability management program related to the risk of those products. However, the effectiveness of the hedging program will ultimately be reflected in adjusted operating income over time. Trends in the underlying profitability of the Company’s businesses can be more clearly identified without the fluctuating effects of these transactions.
 
The following table sets forth the significant components of “Realized investment gains (losses), net” that are included in adjusted operating income and, as a result, are reflected as adjustments to “Realized investment gains (losses), net” for purposes of calculating adjusted operating income:
 
 
 
Year Ended December 31,
 
 
2019
 
2018
 
2017
 
 
(in millions)
Net gains (losses) from(1):
 
 
 
 
 
 
Terminated hedges of foreign currency earnings
 
$
65

 
$
(15
)
 
$
(15
)
Current period yield adjustments
 
$
331

 
$
367

 
$
434

Principal source of earnings
 
$
(37
)
 
$
219

 
$
(8
)
 __________
(1)
In addition to the items in the table above, “Realized investment gains (losses), net, and related charges and adjustments” also includes an adjustment to reflect “Realized investment gains (losses), net” related to Divested and Run-off Businesses. See “Divested and Run-off Businesses” discussed below.


Terminated Hedges of Foreign Currency Earnings. The amounts shown in the table above primarily reflect the impact of an intercompany arrangement between Corporate and Other operations and the International Businesses segment, pursuant to which the non-U.S. dollar-denominated earnings in all countries for a particular year, including its interim reporting periods, are translated at fixed currency exchange rates. The fixed rates are determined in connection with a currency hedging program designed to mitigate the risk that unfavorable rate changes will reduce the segment’s U.S. dollar-equivalent earnings. Pursuant to this program, the Company’s Corporate and Other operations may execute forward currency contracts with third-parties to sell the net exposure of projected earnings from the hedged currency in exchange for U.S. dollars at a specified exchange rate. The maturities of these contracts correspond with the future periods in which the identified non-U.S. dollar-denominated earnings are expected to be generated. These contracts do not qualify for hedge accounting under U.S. GAAP, so the resulting profits or losses are recorded in “Realized investment gains (losses), net.” When the contracts are terminated in the same period that the expected earnings emerge, the resulting positive or negative cash flow effect is included in adjusted operating income.
 
Current Period Yield Adjustments. The Company uses interest rate and currency swaps and other derivatives to manage interest and currency exchange rate exposures arising from mismatches between assets and liabilities, including duration mismatches. For derivative contracts that do not qualify for hedge accounting treatment, the periodic swap settlements, as well as certain other derivative related yield adjustments are recorded in “Realized investment gains (losses), net,” and are included in adjusted operating income to reflect the after-hedge yield of the underlying instruments. In certain instances, when these derivative contracts are terminated or offset before their final maturity, the resulting realized gains or losses are recognized in adjusted operating income over periods that generally approximate the expected terms of the derivatives or underlying instruments in order for adjusted operating income to reflect the after-hedge yield of the underlying instruments. Included in the amounts shown in the table above are gains (losses) on certain derivative contracts that were terminated or offset before their final maturity of $41 million, $19 million and $53 million for the years ended 2019, 2018 and 2017, respectively. As of December 31, 2019, there was a $222 million deferred net gain related to certain derivative contracts that were terminated or offset before their final maturity, primarily in the International Businesses. Also included in the amounts shown in the table above are fees related to synthetic GICs of $147 million, $146 million and $159 million for the years ended 2019, 2018 and 2017, respectively. Synthetic GICs are accounted for as derivatives under U.S. GAAP and, therefore, these fees are recorded in “Realized investment gains (losses), net.” See Note 5 for additional information on synthetic GICs.
 
Principal Source of Earnings. The Company conducts certain activities for which realized investment gains (losses) are a principal source of earnings for its businesses and are therefore included in adjusted operating income, particularly within the Company’s PGIM segment. For example, PGIM’s strategic investing business makes investments for sale or syndication to other investors or for placement or co-investment in the Company’s managed funds and structured products. The realized investment gains (losses) associated with the sale of these strategic investments, as well as the majority of derivative results, are a principal activity for this business and included in adjusted operating income. In addition, the realized investment gains (losses) associated with loans originated by the Company’s commercial mortgage operations, as well as related derivative results and retained mortgage servicing rights, are a principal activity for this business and are therefore included in adjusted operating income.
 
Adjustments related to Realized investment gains (losses), net
 
The following table sets forth certain other items excluded from adjusted operating income and reflected as an adjustment to “Realized investment gains (losses), net” for purposes of calculating adjusted operating income:
 
 
 
Year Ended December 31,
 
 
2019
 
2018
 
2017
 
 
 
 
 
 
 
 
 
(in millions)
Net gains (losses) from:
 
 
Investments carried at fair value through net income
 
$
558

 
$
(417
)
 
$
184

Foreign currency exchange movements
 
$
61

 
$
(289
)
 
$
(135
)
Gains (losses), net, on experience-rated contracts (excluding derivatives and commercial mortgage and other loans)(1)
 
$
22

 
$
(153
)
 
$
185

Other activities
 
$
(31
)
 
$
(41
)
 
$
(20
)

  __________
(1)
Adjusted operating income excludes net investment gains (losses) on assets supporting experience-rated contractholder liabilities, related derivatives, and commercial mortgage and other loans. The activity for derivatives and commercial mortgage and other loans that support these experience-rated products are reported in “Realized investment gains (losses), net” and excluded from adjusted operating income.

Investments carried at fair value through net income. The Company has certain investments in its general account portfolios that are carried at fair value with changes in fair value reported in “Other income (loss).” Examples include the Company’s investments in equity securities and fixed maturities designated as trading. Consistent with the exclusion of realized investment gains (losses) with respect to other investments managed on a consistent basis, the net gains or losses on these investments are excluded from adjusted operating income.
 
Foreign Currency Exchange Movements. The Company has certain assets and liabilities for which, under U.S. GAAP, the changes in value, including those associated with changes in foreign currency exchange rates during the period, are recorded in “Other income (loss).” To the extent the foreign currency exposure on these assets and liabilities is economically hedged or considered part of the Company’s capital funding strategies for its international subsidiaries, the change in value included in “Other income (loss)” is excluded from adjusted operating income. The insurance liabilities are supported by investments denominated in corresponding currencies, including a significant portion designated as available-for-sale. While these non-yen denominated assets and liabilities are economically hedged, unrealized gains (losses) on available-for-sale investments, including those arising from foreign currency exchange rate movements, are recorded in AOCI under U.S. GAAP, while the non-yen denominated liabilities are remeasured for foreign currency exchange rate movements, with the related change in value recorded in earnings within “Other income (loss).” Due to this non-economic volatility that has been reflected in U.S. GAAP earnings, the change in value recorded within “Other income (loss)” is excluded from adjusted operating income.

Investment gains (losses) on assets supporting experience-rated contractholder liabilities and changes in experience-rated contractholder liabilities due to asset value changes. Certain products included in the Retirement and International Businesses segments are experience-rated in that investment results associated with these products are expected to ultimately accrue to contractholders. The majority of investments supporting these experience-rated products are carried at fair value, with realized and unrealized gains (losses) reported in “Other income (loss)” and the related interest and dividend income reported in “Net investment income.” To a lesser extent, these experience-rated products are also supported by derivatives and commercial mortgage and other loans. The derivatives are carried at fair value, with realized and unrealized gains (losses) reported in “Realized investment gains (losses), net.” The commercial mortgage and other loans are carried at unpaid principal, net of unamortized discounts and an allowance for losses, with gains (losses) on sales and changes in the valuation allowance for commercial mortgage and other loans reported in “Realized investment gains (losses), net.”
 
Adjusted operating income excludes net investment gains (losses) on assets supporting experience-rated contractholder liabilities, related derivatives and commercial mortgage and other loans. This is consistent with the exclusion of realized investment gains (losses) with respect to other investments supporting insurance liabilities managed on a consistent basis. In addition, to be consistent with the historical treatment of charges related to realized investment gains (losses) on investments, adjusted operating income also excludes the change in contractholder liabilities due to asset value changes in the pool of investments (including changes in the fair value of commercial mortgage and other loans) supporting these experience-rated contracts, which are reflected in “Interest credited to policyholders’ account balances.” The result of this approach is that adjusted operating income for these products includes net fee revenue and interest spread we earn on these experience-rated contracts, and excludes changes in fair value of the pool of investments, both realized and unrealized, that we expect will ultimately accrue to the contractholders.

Other Activities. The Company excludes certain other items from adjusted operating income that are consistent with similar adjustments described above.

Charges related to realized investment gains (losses), net
 
Charges that relate to realized investment gains (losses) are also excluded from adjusted operating income, and include the following:
 
•
The portion of the amortization of DAC, VOBA, unearned revenue reserves and DSI for certain products that is related to net realized investment gains (losses).
•
Policyholder dividends and interest credited to policyholders’ account balances that relate to certain life policies that pass back certain realized investment gains (losses) to the policyholder, and reserves for future policy benefits for certain policies that are affected by net realized investment gains (losses).
•
Market value adjustments paid or received upon a contractholder’s surrender of certain of the Company’s annuity products as these amounts mitigate the net realized investment gains or losses incurred upon the disposition of the underlying invested assets.
Market experience updates

The Company had historically recognized the immediate impacts from changes in current market conditions on estimates of profitability in current period adjusted operating income. Beginning with the second quarter of 2019, these impacts are excluded from adjusted operating income which the Company believes enhances the understanding of underlying performance trends. These amounts represent the impact of those changes on DAC and other costs and reserves, primarily related to variable annuity and variable and universal life products.
 
Divested and Run-off Businesses
 
The contribution to income (loss) of Divested and Run-off Businesses that have been or will be sold or exited, including businesses that have been placed in wind down, but that did not qualify for “discontinued operations” accounting treatment under U.S. GAAP, are excluded from adjusted operating income as the results of Divested and Run-off Businesses are not considered relevant to understanding the Company’s ongoing operating results.
 
The Closed Block division is accounted for as a divested business because it consists primarily of certain participating insurance and annuity products that the Company ceased selling at demutualization in 2001. See Note 15 for further information on the Closed Block.

Other adjustments
 
Other adjustments represent all other adjustments that are excluded from adjusted operating income. These include certain components of the consideration for the Assurance IQ acquisition, which are recognized as compensation expense over the requisite service periods, as well as changes in the fair value of contingent consideration.

Equity in earnings of operating joint ventures and earnings attributable to noncontrolling interests
 
Equity in earnings of operating joint ventures, on a pre-tax basis, are included in adjusted operating income as these results are a principal source of earnings. These earnings are reflected on a U.S. GAAP basis on an after-tax basis as a separate line on the Company’s Consolidated Statements of Operations.
 
Earnings attributable to noncontrolling interests are excluded from adjusted operating income. Earnings attributable to noncontrolling interests represents the portion of earnings from consolidated entities that relates to the equity interests of minority investors, and are reflected on a U.S. GAAP basis as a separate line on the Company’s Consolidated Statements of Operations.

Reconciliation of adjusted operating income and net income (loss)

The table below reconciles adjusted operating income before income taxes to income before income taxes and equity in earnings of operating joint ventures:
 

 
 
Year ended December 31,
 
 
2019
 
2018
 
2017

 
(in millions)
Adjusted operating income before income taxes by segment:
 
 
 
 
 
 
PGIM
 
$
998

 
$
959

 
$
979

U.S. Businesses:
 
 
 
 
 
 
U.S. Workplace Solutions division:
 
 
 
 
 
 
Retirement
 
1,301

 
1,049

 
1,244

Group Insurance
 
285

 
229

 
253

Total U.S. Workplace Solutions division
 
1,586

 
1,278

 
1,497

U.S. Individual Solutions division:
 
 
 
 
 
 
Individual Annuities(1)
 
1,843

 
1,925

 
2,198

Individual Life
 
87

 
223

 
(191
)
Total U.S. Individual Solutions division
 
1,930

 
2,148

 
2,007

Assurance IQ division(2):
 
 
 
 
 
 
Assurance IQ
 
(9
)
 
0

 
0

Total Assurance IQ division
 
(9
)
 
0

 
0

Total U.S. Businesses
 
3,507

 
3,426

 
3,504

International Businesses
 
3,359

 
3,266

 
3,198

Corporate and Other
 
(1,766
)
 
(1,283
)
 
(1,437
)
Total segment adjusted operating income before income taxes
 
6,098

 
6,368

 
6,244

Reconciling Items:
 
 
 
 
 
 
Realized investment gains (losses), net, and related adjustments(3)
 
(764
)
 
466

 
(417
)
Charges related to realized investment gains (losses), net
 
(125
)
 
(316
)
 
544

Market experience updates(4)
 
(462
)
 
0

 
0

Divested and Run-off Businesses:
 
 
 
 
 
 
Closed Block division
 
36

 
(62
)
 
45

Other Divested and Run-off Businesses
 
452

 
(1,535
)
 
38

Other adjustments(5)
 
(47
)
 
0

 
0

Equity in earnings of operating joint ventures and earnings attributable to noncontrolling interests
 
(103
)
 
(87
)
 
33

Consolidated income (loss) before income taxes and equity in earnings of operating joint ventures
 
$
5,085

 
$
4,834

 
$
6,487


  __________
(1)
Individual Annuities segment results reflect DAC as if the individual annuity business is a stand-alone operation. The elimination of intersegment costs capitalized in accordance with this policy is included in consolidating adjustments within Corporate and Other operations.
(2)
Assurance IQ was acquired by the Company in October 2019. See Note 1 for additional information.
(3)
Prior period amounts have been updated to conform to current period presentation.
(4)
Represents the immediate impacts in current period results from changes in current market conditions on estimates of profitability, which are excluded from adjusted operating income beginning with the second quarter of 2019. The Company had historically recognized these impacts in adjusted operating income.
(5)
Represents adjustments not included in the above reconciling items. “Other adjustments” include certain components of the consideration for the Assurance IQ acquisition, which are recognized as compensation expense over the requisite service periods, as well as changes in the fair value of contingent consideration.




Reconciliation of select financial information
 
The tables below present certain financial information for the Company’s segments and its Corporate and Other operations, including assets by segment and revenues, and benefits and expenses by segment on an adjusted operating income basis, and the reconciliation of the segment totals to amounts reported in the Consolidated Financial Statements.
 
 
 
As of December 31,
 
 
2019
 
2018
 
 
(in millions)
Assets by segment:
 
 
 
 
PGIM
 
47,655

 
47,690

U.S. Businesses:
 
 
 
 
U.S. Workplace Solutions division:
 
 
 
 
Retirement
 
198,153

 
175,525

Group Insurance
 
43,712

 
41,727

Total U.S. Workplace Solutions division
 
241,865

 
217,252

U.S. Individual Solutions division:
 
 
 
 
Individual Annuities
 
189,040

 
167,899

Individual Life
 
96,072

 
83,739

Total U.S. Individual Solutions division
 
285,112

 
251,638

Assurance IQ division(1):
 
 
 
 
Assurance IQ
 
2,639

 
0

Total Assurance IQ division
 
2,639

 
0

Total U.S. Businesses
 
529,616

 
468,890

International Businesses
 
241,071

 
222,633

Corporate and Other
 
16,883

 
16,826

Closed Block division
 
61,327

 
59,039

Total assets per Consolidated Statements of Financial Position
 
$
896,552

 
$
815,078

  __________
(1)
Assurance IQ was acquired by the Company in October 2019. See Note 1 for additional information.
 
 
Year Ended December 31, 2019
Revenues, and benefits and expenses on an adjusted operating income basis by segment
 
Total Revenues
 
Net
Investment
Income
 
Total Benefits and Expenses
 
Policyholders’
Benefits
 
Interest
Credited to
Policyholders’
Account
Balances
 
Dividends to
Policyholders
 
Interest
Expense
 
Amortization
of DAC
 
(in millions)
PGIM
 
$
3,589

 
$
200

 
$
2,591

 
$
0

 
$
0

 
$
0

 
$
49

 
$
6

U.S. Businesses:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S. Workplace Solutions division:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Retirement
 
15,064

 
4,738

 
13,763

 
11,061

 
1,503

 
0

 
46

 
38

Group Insurance
 
5,750

 
624

 
5,465

 
4,257

 
286

 
0

 
2

 
7

Total U.S. Workplace Solutions division
 
20,814

 
5,362

 
19,228

 
15,318

 
1,789

 
0

 
48

 
45

U.S. Individual Solutions division:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Individual Annuities
 
4,995

 
856

 
3,152

 
435

 
334

 
0

 
122

 
513

Individual Life
 
6,115

 
2,247

 
6,028

 
2,778

 
830

 
38

 
774

 
577

Total U.S. Individual Solutions division
 
11,110

 
3,103

 
9,180

 
3,213

 
1,164

 
38

 
896

 
1,090

Assurance IQ division(1):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Assurance IQ
 
101

 
0

 
110

 
0

 
0

 
0

 
0

 
0

Total Assurance IQ division
 
101

 
0

 
110

 
0

 
0

 
0

 
0

 
0

Total U.S. Businesses
 
32,025

 
8,465

 
28,518

 
18,531

 
2,953

 
38

 
944

 
1,135

International Businesses
 
23,195

 
5,558

 
19,836

 
14,535

 
918

 
48

 
25

 
1,239

Corporate and Other
 
(677
)
 
579

 
1,089

 
36

 
0

 
0

 
521

 
(46
)
Total revenues, and benefits and expenses on an adjusted operating income basis
 
58,132

 
14,802

 
52,034

 
33,102

 
3,871

 
86

 
1,539

 
2,334

Reconciling items:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Realized investment gains (losses), net, and related adjustments
 
185

 
(36
)
 
949

 
0

 
949

 
0

 
0

 
0

Charges related to realized investment gains (losses), net
 
(254
)
 
0

 
(129
)
 
(136
)
 
(94
)
 
0

 
0

 
(181
)
Market experience updates(2)
 
(77
)
 
0

 
385

 
200

 
4

 
0

 
0

 
144

Divested and Run-off Businesses:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Closed Block division
 
5,642

 
2,323

 
5,606

 
2,907

 
130

 
2,187

 
7

 
29

Other Divested and Run-off Businesses
 
1,330

 
496

 
878

 
747

 
20

 
1

 
4

 
6

Other adjustments(3)
 
(5
)
 
0

 
42

 
0

 
0

 
0

 
0

 
0

Equity in earnings of operating joint ventures and earnings attributable to noncontrolling interests
 
(146
)
 
0

 
(43
)
 
0

 
0

 
0

 
0

 
0

Total revenue, and benefits and expenses per Consolidated Statements of Operations
 
$
64,807

 
$
17,585

 
$
59,722

 
$
36,820

 
$
4,880

 
$
2,274

 
$
1,550

 
$
2,332


 
 
Year Ended December 31, 2018
Revenues, and benefits and expenses on an adjusted operating income basis by segment
 
Total Revenues
 
Net
Investment
Income
 
Total Benefits and Expenses
 
Policyholders’
Benefits
 
Interest
Credited to
Policyholders’
Account
Balances
 
Dividends to
Policyholders
 
Interest
Expense
 
Amortization
of DAC
 
(in millions)
PGIM
 
$
3,294

 
$
73

 
$
2,335

 
$
0

 
$
0

 
$
0

 
$
40

 
$
8

U.S. Businesses:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S. Workplace Solutions division:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Retirement
 
16,825

 
4,377

 
15,776

 
13,215

 
1,430

 
0

 
35

 
33

Group Insurance
 
5,685

 
616

 
5,456

 
4,241

 
282

 
0

 
2

 
5

Total U.S. Workplace Solutions division
 
22,510

 
4,993

 
21,232

 
17,456

 
1,712

 
0

 
37

 
38

U.S. Individual Solutions division:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Individual Annuities
 
4,966

 
694

 
3,041

 
370

 
335

 
0

 
67

 
511

Individual Life
 
5,831

 
2,033

 
5,608

 
2,489

 
766

 
37

 
714

 
368

Total U.S. Individual Solutions division
 
10,797

 
2,727

 
8,649

 
2,859

 
1,101

 
37

 
781

 
879

Total U.S. Businesses
 
33,307

 
7,720

 
29,881

 
20,315

 
2,813

 
37

 
818

 
917

International Businesses
 
22,234

 
5,245

 
18,968

 
14,009

 
907

 
62

 
21

 
1,233

Corporate and Other
 
(705
)
 
452

 
578

 
(12
)
 
0

 
0

 
535

 
(44
)
Total revenues, and benefits and expenses on an adjusted operating income basis
 
58,130

 
13,490

 
51,762

 
34,312

 
3,720

 
99

 
1,414

 
2,114

Reconciling items:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Realized investment gains (losses), net, and related adjustments(4)
 
(244
)
 
(41
)
 
(710
)
 
0

 
(710
)
 
0

 
0

 
0

Charges related to realized investment gains (losses), net
 
(274
)
 
0

 
42

 
(75
)
 
40

 
0

 
0

 
118

Divested and Run-off Businesses:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Closed Block division
 
4,678

 
2,288

 
4,740

 
2,972

 
132

 
1,236

 
2

 
35

Other Divested and Run-off Businesses
 
805

 
439

 
2,340

 
2,195

 
14

 
1

 
4

 
6

Equity in earnings of operating joint ventures and earnings attributable to noncontrolling interests
 
(103
)
 
0

 
(16
)
 
0

 
0

 
0

 
0

 
0

Total revenue, and benefits and expenses per Consolidated Statements of Operations
 
$
62,992

 
$
16,176

 
$
58,158

 
$
39,404

 
$
3,196

 
$
1,336

 
$
1,420

 
$
2,273



 
 
Year Ended December 31, 2017
Revenues, and benefits and expenses on an adjusted operating income basis by segment
 
Total Revenues
 
Net
Investment
Income
 
Total Benefits and Expenses
 
Policyholders’
Benefits
 
Interest
Credited to
Policyholders’
Account
Balances
 
Dividends to
Policyholders
 
Interest
Expense
 
Amortization
of DAC
 
(in millions)
PGIM
 
$
3,355

 
$
170

 
$
2,376

 
$
0

 
$
0

 
$
0

 
$
27

 
$
11

U.S. Businesses:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S. Workplace Solutions division:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Retirement
 
13,843

 
4,482

 
12,599

 
10,035

 
1,507

 
0

 
26

 
26

Group Insurance
 
5,471

 
637

 
5,218

 
4,073

 
274

 
0

 
5

 
14

Total U.S. Workplace Solutions division
 
19,314

 
5,119

 
17,817

 
14,108

 
1,781

 
0

 
31

 
40

U.S. Individual Solutions division:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Individual Annuities
 
5,110

 
742

 
2,912

 
318

 
330

 
0

 
70

 
464

Individual Life
 
4,974

 
1,948

 
5,165

 
2,100

 
719

 
36

 
648

 
483

Total U.S. Individual Solutions division
 
10,084

 
2,690

 
8,077

 
2,418

 
1,049

 
36

 
718

 
947

Total U.S. Businesses
 
29,398

 
7,809

 
25,894

 
16,526

 
2,830

 
36

 
749

 
987

International Businesses
 
21,560

 
5,027

 
18,362

 
13,440

 
899

 
48

 
13

 
1,138

Corporate and Other
 
(667
)
 
493

 
770

 
21

 
0

 
0

 
533

 
(43
)
Total revenues, and benefits and expenses on an adjusted operating income basis
 
53,646

 
13,499

 
47,402

 
29,987

 
3,729

 
84

 
1,322

 
2,093

Reconciling items:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Realized investment gains (losses), net, and related adjustments(4)
 
(266
)
 
(38
)
 
151

 
0

 
151

 
0

 
0

 
0

Charges related to realized investment gains (losses), net
 
(215
)
 
0

 
(759
)
 
(69
)
 
(191
)
 
0

 
0

 
(550
)
Divested and Run-off Businesses:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Closed Block division
 
5,826

 
2,653

 
5,781

 
3,219

 
133

 
2,007

 
1

 
37

Other Divested and Run-off Businesses
 
775

 
321

 
737

 
657

 
0

 
0

 
4

 
0

Equity in earnings of operating joint ventures and earnings attributable to noncontrolling interests
 
(77
)
 
0

 
(110
)
 
0

 
0

 
0

 
0

 
0

Total revenue, and benefits and expenses per Consolidated Statements of Operations
 
$
59,689

 
$
16,435

 
$
53,202

 
$
33,794

 
$
3,822

 
$
2,091

 
$
1,327

 
$
1,580

  __________
(1)
Assurance IQ was acquired by the Company in October 2019. See Note 1 for additional information.
(2)
Represents the immediate impacts in current period results from changes in current market conditions on estimates of profitability, which are excluded from adjusted operating income beginning with the second quarter of 2019. The Company had historically recognized these impacts in adjusted operating income.
(3)
Represents adjustments not included in the above reconciling items. “Other adjustments” include certain components of the consideration for the Assurance IQ acquisition, which are recognized as compensation expense over the requisite service periods, as well as changes in the fair value of contingent consideration.
(4)
Prior period amounts have been updated to conform to current period presentation.
Revenues, calculated in accordance with U.S. GAAP, for the years ended December 31, include the following associated with the Company’s foreign and domestic operations:
 
 
 
2019
 
2018
 
2017
 
 
 
 
 
 
 
 
 
(in millions)
Domestic operations
 
$
40,868

 
$
40,603

 
$
36,573

Foreign operations, total
 
$
23,939

 
$
22,389

 
$
23,116

Foreign operations, Japan
 
$
19,626

 
$
19,125

 
$
19,589

Foreign operations, Korea
 
$
1,638

 
$
1,495

 
$
1,567


Intersegment Revenues

Management has determined the intersegment revenues with reference to market rates. Intersegment revenues are eliminated in consolidation in Corporate and Other operations. The PGIM segment revenues include intersegment revenues, primarily consisting of asset-based management and administration fees, for the years ended December 31, as follows:
 
 
2019
 
2018
 
2017
 
 
 
 
 
 
 
 
 
(in millions)
PGIM segment intersegment revenues
 
$
777

 
$
731

 
$
717


 
Segments may also enter into internal derivative contracts with other segments. For adjusted operating income, each segment accounts for the internal derivative results consistent with the manner in which that segment accounts for other similar external derivatives.

Asset management and service fees

The table below presents asset management and service fees, predominantly related to an investment management activities, for the periods indicated:

 
 
2019
 
2018
 
2017
 
 
 
 
 
 
 
 
 
(in millions)
Asset-based management fees
 
$
3,489

 
$
3,438

 
$
3,328

Performance-based incentive fees
 
169

 
56

 
194

Other fees
 
581

 
606

 
605

Total asset management and service fees
 
$
4,239

 
$
4,100

 
$
4,127