v3.8.0.1

Segment Information | 12 Months Ended
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Dec. 31, 2017
Segment Reporting [Abstract] |
Segment Information | SEGMENT INFORMATION Segments Effective in the fourth quarter of 2017, the Company implemented a new organizational structure for the U.S. businesses, which retains our existing reportable segments but realigns them under new divisions. The Company now operates through five divisions, which together encompass seven reportable segments, and its Corporate and Other operations. U.S. Individual Solutions division. The U.S. Individual Solutions division consists of the Individual Annuities and Individual Life segments. The Individual Annuities segment manufactures and distributes individual variable and fixed annuity products, primarily to the U.S. mass affluent and affluent markets. The Individual Life segment manufactures and distributes individual variable life, term life and universal life insurance products primarily to the U.S. mass middle, mass affluent and affluent markets. U.S. Workplace Solutions division. The U.S. Workplace Solutions division consists of the Retirement and Group Insurance segments. The Retirement segment manufactures and distributes products and provides administrative services for qualified and non-qualified retirement plans and offers innovative pension risk transfer solutions, investment-only stable value products, guaranteed investment contracts, funding agreements, institutional and retail notes, structured settlement annuities and other group annuities. The Group Insurance segment manufactures and distributes 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. Investment Management division. The Investment Management division consists of the Investment Management segment, which provides a broad array of investment management and advisory services by means of institutional portfolio management, mutual funds, asset securitization activity and other structured products, and strategic investments. These products and services are provided to the public and private marketplace and to other segments of the Company. International Insurance division. The International Insurance division consists of the International Insurance segment, which manufactures 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 market across Japan through Life Consultants, the proprietary distribution channel of the Company’s Gibraltar Life operation, as well as other channels, including banks and independent agencies. Closed Block division. 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 businesses that are included in the Company’s Corporate and Other operations. See Note 12 for additional information on the Closed Block. Corporate and Other. Corporate and Other includes corporate items and initiatives that are not allocated to business segments, and divested businesses. 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, as well as tax credit investments 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) the Company’s qualified pension and other employee benefit plans, after allocations to business segments; (5) corporate-level activities, after allocations to business segments, including strategic expenditures, corporate governance, corporate advertising, philanthropic activities, deferred compensation, and costs related to certain contingencies and enhanced regulatory supervision; (6) certain retained obligations relating to pre-demutualization policyholders; (7) a life insurance joint venture and an asset management joint venture in China; (8) the Company’s Capital Protection Framework; (9) the foreign currency income hedging program used to hedge certain non-U.S. dollar-denominated earnings in our International Insurance segment; (10) the impact of intercompany arrangements with our Retirement and Investment Management segments to translate certain non-U.S. dollar-denominated earnings at fixed currency exchange rates; and (11) 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 3. 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 and charges;
• | net investment gains (losses) on trading account assets supporting insurance liabilities and changes in experience-rated contractholder liabilities due to asset value changes;
• | divested businesses; 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. As discussed in Note 1, during 2016, the Company recorded certain out of period adjustments. These adjustments resulted in a decrease in pre-tax adjusted operating income of $114 million for the year ended December 31, 2016, principally consisting of a net decrease of $153 million for the Individual Life Insurance segment. Management evaluated the adjustments, both individually and in the aggregate, and concluded that they were not material to any previously reported quarterly or annual financial statements. Realized investment gains (losses), net, and related charges and 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,
|  | 2017 |  | 2016 |  | 2015
|  | (in millions)
Net gains (losses) from(1): |  |  |  |  |  |
Terminated hedges of foreign currency earnings |  | $ | (15 | ) |  | $ | 39 |  |  | $ | 284 |
Current period yield adjustments |  | $ | 434 |  |  | $ | 466 |  |  | $ | 475 |
Principal source of earnings |  | $ | (8 | ) |  | $ | 74 |  |  | $ | 123 |
__________
(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 businesses as results of “Divested 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 Insurance 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 on certain derivative contracts that were terminated or offset before their final maturity of $53 million, $49 million and $55 million for the years ended 2017, 2016 and 2015, respectively. As of December 31, 2017, there was a $80 million deferred net gain related to certain derivative contracts that were terminated or offset before their final maturity, primarily in the International Insurance segment. Also included in the amounts shown in the table above are fees related to synthetic GICs of $159 million, $158 million and $158 million for the years ended 2017, 2016 and 2015, 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 21 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 Investment Management segment. For example, Investment Management’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,
|  | 2017 |  | 2016 |  | 2015
|  | (in millions)
Net gains (losses) from: |  |
Other trading account assets |  | $ | 184 |  |  | $ | (95 | ) |  | $ | (94 | )
Foreign currency exchange movements |  | $ | (135 | ) |  | $ | (154 | ) |  | $ | 69 |
Other activities |  | $ | (20 | ) |  | $ | (18 | ) |  | $ | 9 |
Other Trading Account Assets. The Company has certain investments in its general account portfolios that are classified as trading. These trading investments are carried at fair value and included in “Other trading account assets, at fair value” on the Company’s Consolidated Statements of Financial Position. Realized and unrealized gains (losses) for these investments are recorded in “Other income.” 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.” 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” 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.” Due to this non-economic volatility that has been reflected in U.S. GAAP earnings, the change in value recorded within “Other income” is excluded from adjusted operating income. 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.
Investment gains (losses) on trading account assets supporting insurance liabilities and changes in experience-rated contractholder liabilities due to asset value changes Certain products included in the Retirement and International Insurance 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 classified as trading and are carried at fair value, with realized and unrealized gains (losses) reported in “Other 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 trading account assets supporting insurance liabilities, which 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.” These adjustments are in addition to the exclusion from adjusted operating income of net investment gains (losses) on the related derivatives and commercial mortgage and other loans through “Realized investment gains (losses), net, and related charges and adjustments,” as discussed above. The result of this approach is that adjusted operating income for these products includes net fee revenue and interest spread the Company earns on these experience-rated contracts, and excludes changes in fair value of the pool of investments, both realized and unrealized, that are expected to ultimately accrue to the contractholders. Divested businesses The contribution to income (loss) of divested 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 businesses are not considered relevant to understanding the Company’s ongoing operating results. The Closed Block division, which is comprised of the Closed Block segment 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 12 for further information on the Closed Block. 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,
|  | 2017 |  | 2016 |  | 2015
|  | (in millions)
Adjusted operating income before income taxes by segment: |  |  |  |  |  |
Individual Annuities |  | $ | 2,198 |  |  | $ | 1,765 |  |  | $ | 1,797 |
Individual Life |  | (191 | ) |  | 79 |  |  | 635 |
Total U.S. Individual Solutions division(1) |  | 2,007 |  |  | 1,844 |  |  | 2,432 |
Retirement |  | 1,244 |  |  | 1,012 |  |  | 931 |
Group Insurance |  | 253 |  |  | 220 |  |  | 176 |
Total U.S. Workplace Solutions division(1) |  | 1,497 |  |  | 1,232 |  |  | 1,107 |
Investment Management |  | 979 |  |  | 787 |  |  | 779 |
Total Investment Management division(1) |  | 979 |  |  | 787 |  |  | 779 |
International Insurance |  | 3,198 |  |  | 3,117 |  |  | 3,226 |
Total International Insurance division |  | 3,198 |  |  | 3,117 |  |  | 3,226 |
Corporate and Other operations |  | (1,437 | ) |  | (1,581 | ) |  | (1,313 | )
Total Corporate and Other |  | (1,437 | ) |  | (1,581 | ) |  | (1,313 | )
Total segment adjusted operating income before income taxes |  | 6,244 |  |  | 5,399 |  |  | 6,231 |
Reconciling Items: |  |  |  |  |  |
Realized investment gains (losses), net, and related adjustments |  | (602 | ) |  | 989 |  |  | 2,258 |
Charges related to realized investment gains (losses), net |  | 544 |  |  | (466 | ) |  | (679 | )
Investment gains (losses) on trading account assets supporting insurance liabilities, net |  | 336 |  |  | (17 | ) |  | (524 | )
Change in experience-rated contractholder liabilities due to asset value changes |  | (151 | ) |  | 21 |  |  | 433 |
Divested businesses: |  |  |  |  |  |
Closed Block division |  | 45 |  |  | (132 | ) |  | 58 |
Other divested businesses |  | 38 |  |  | (84 | ) |  | (66 | )
Equity in earnings of operating joint ventures and earnings attributable to noncontrolling interests |  | 33 |  |  | (5 | ) |  | 58 |
Consolidated income (loss) before income taxes and equity in earnings of operating joint ventures |  | $ | 6,487 |  |  | $ | 5,705 |  |  | $ | 7,769 |
__________
(1) | Prior period divisional subtotals are presented on a basis consistent with the Company’s new organizational structure. Individual segment results and consolidated totals remain unchanged. See Note 1 for additional information.
The 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. Reconciliation of select financial information The tables below present certain financial information for the Company’s reportable segments:
|  | As of December 31,
|  | 2017 |  | 2016
|  | (in millions)
Total Assets: |  |  |  |
Individual Annuities |  | $ | 183,666 |  |  | $ | 170,861 |
Individual Life |  | 83,985 |  |  | 77,524 |
Total U.S. Individual Solutions division(1) |  | 267,651 |  |  | 248,385 |
Retirement |  | 183,629 |  |  | 173,509 |
Group Insurance |  | 41,575 |  |  | 40,642 |
Total U.S. Workplace Solutions division(1) |  | 225,204 |  |  | 214,151 |
Investment Management |  | 49,944 |  |  | 49,255 |
Total Investment Management division(1) |  | 49,944 |  |  | 49,255 |
International Insurance |  | 211,432 |  |  | 197,119 |
Total International Insurance division |  | 211,432 |  |  | 197,119 |
Corporate and Other operations |  | 14,556 |  |  | 13,001 |
Total Corporate and Other |  | 14,556 |  |  | 13,001 |
Closed Block |  | 63,134 |  |  | 62,051 |
Total Closed Block division |  | 63,134 |  |  | 62,051 |
Total per Consolidated Statements of Financial Position |  | $ | 831,921 |  |  | $ | 783,962 |
__________
(1) | Prior period divisional subtotals are presented on a basis consistent with the Company’s new organizational structure. Individual segment results and consolidated totals remain unchanged. See Note 1 for additional information.
|  | Year Ended December 31, 2017
|  | Revenues |  | Net Investment Income |  | Policyholders’ Benefits |  | Interest Credited to Policyholders’ Account Balances |  | Dividends to Policyholders |  | Interest Expense |  | Amortization of DAC
|  | (in millions)
Individual Annuities |  | $ | 5,110 |  |  | $ | 742 |  |  | $ | 318 |  |  | $ | 330 |  |  | 0 |  |  | $ | 70 |  |  | $ | 464 |
Individual Life |  | 4,974 |  |  | 1,948 |  |  | 2,100 |  |  | 719 |  |  | 36 |  |  | 648 |  |  | 483 |
Total U.S. Individual Solutions division |  | 10,084 |  |  | 2,690 |  |  | 2,418 |  |  | 1,049 |  |  | 36 |  |  | 718 |  |  | 947 |
Retirement |  | 13,843 |  |  | 4,482 |  |  | 10,035 |  |  | 1,507 |  |  | 0 |  |  | 26 |  |  | 26 |
Group Insurance |  | 5,471 |  |  | 637 |  |  | 4,073 |  |  | 274 |  |  | 0 |  |  | 5 |  |  | 14 |
Total U.S. Workplace Solutions division |  | 19,314 |  |  | 5,119 |  |  | 14,108 |  |  | 1,781 |  |  | 0 |  |  | 31 |  |  | 40 |
Investment Management |  | 3,355 |  |  | 170 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 27 |  |  | 11 |
Total Investment Management division |  | 3,355 |  |  | 170 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 27 |  |  | 11 |
International Insurance |  | 21,560 |  |  | 5,027 |  |  | 13,440 |  |  | 899 |  |  | 48 |  |  | 13 |  |  | 1,138 |
Total International Insurance division |  | 21,560 |  |  | 5,027 |  |  | 13,440 |  |  | 899 |  |  | 48 |  |  | 13 |  |  | 1,138 |
Corporate and Other operations |  | (667 | ) |  | 493 |  |  | 21 |  |  | 0 |  |  | 0 |  |  | 533 |  |  | (43 | )
Total Corporate and Other |  | (667 | ) |  | 493 |  |  | 21 |  |  | 0 |  |  | 0 |  |  | 533 |  |  | (43 | )
Total |  | 53,646 |  |  | 13,499 |  |  | 29,987 |  |  | 3,729 |  |  | 84 |  |  | 1,322 |  |  | 2,093 |
Reconciling items: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Realized investment gains (losses), net, and related adjustments |  | (602 | ) |  | (38 | ) |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |
Charges related to realized investment gains (losses), net |  | (215 | ) |  | 0 |  |  | (69 | ) |  | (191 | ) |  | 0 |  |  | 0 |  |  | (550 | )
Investment gains (losses) on trading account assets supporting insurance liabilities, net |  | 336 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |
Change in experience-rated contractholder liabilities due to assets value changes |  | 0 |  |  | 0 |  |  | 0 |  |  | 151 |  |  | 0 |  |  | 0 |  |  | 0 |
Divested businesses: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Closed Block division |  | 5,826 |  |  | 2,653 |  |  | 3,219 |  |  | 133 |  |  | 2,007 |  |  | 1 |  |  | 37 |
Other divested businesses |  | 775 |  |  | 321 |  |  | 657 |  |  | 0 |  |  | 0 |  |  | 4 |  |  | 0 |
Equity in earnings of operating joint ventures and earnings attributable to noncontrolling interests |  | (77 | ) |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |
Total per Consolidated Statements of Operations |  | $ | 59,689 |  |  | $ | 16,435 |  |  | $ | 33,794 |  |  | $ | 3,822 |  |  | $ | 2,091 |  |  | $ | 1,327 |  |  | $ | 1,580 |
|  | Year Ended December 31, 2016
|  | Revenues |  | Net Investment Income |  | Policyholders’ Benefits |  | Interest Credited to Policyholders’ Account Balances |  | Dividends to Policyholders |  | Interest Expense |  | Amortization of DAC
|  | (in millions)
Individual Annuities |  | $ | 4,666 |  |  | $ | 698 |  |  | $ | 306 |  |  | $ | 362 |  |  | 0 |  |  | $ | 71 |  |  | $ | 484 |
Individual Life |  | 5,355 |  |  | 1,822 |  |  | 2,750 |  |  | 680 |  |  | 35 |  |  | 583 |  |  | 115 |
Total U.S. Individual Solutions division(1) |  | 10,021 |  |  | 2,520 |  |  | 3,056 |  |  | 1,042 |  |  | 35 |  |  | 654 |  |  | 599 |
Retirement |  | 12,876 |  |  | 4,263 |  |  | 9,328 |  |  | 1,473 |  |  | 0 |  |  | 19 |  |  | 33 |
Group Insurance |  | 5,343 |  |  | 608 |  |  | 4,032 |  |  | 263 |  |  | 0 |  |  | 5 |  |  | 6 |
Total U.S. Workplace Solutions division(1) |  | 18,219 |  |  | 4,871 |  |  | 13,360 |  |  | 1,736 |  |  | 0 |  |  | 24 |  |  | 39 |
Investment Management |  | 2,961 |  |  | 80 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 15 |  |  | 15 |
Total Investment Management division(1) |  | 2,961 |  |  | 80 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 15 |  |  | 15 |
International Insurance |  | 21,009 |  |  | 4,759 |  |  | 13,183 |  |  | 920 |  |  | 49 |  |  | 8 |  |  | 1,068 |
Total International Insurance division |  | 21,009 |  |  | 4,759 |  |  | 13,183 |  |  | 920 |  |  | 49 |  |  | 8 |  |  | 1,068 |
Corporate and Other operations |  | (636 | ) |  | 465 |  |  | 26 |  |  | 0 |  |  | 0 |  |  | 614 |  |  | (49 | )
Total Corporate and Other |  | (636 | ) |  | 465 |  |  | 26 |  |  | 0 |  |  | 0 |  |  | 614 |  |  | (49 | )
Total |  | 51,574 |  |  | 12,695 |  |  | 29,625 |  |  | 3,698 |  |  | 84 |  |  | 1,315 |  |  | 1,672 |
Reconciling items: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Realized investment gains (losses), net, and related adjustments |  | 989 |  |  | (31 | ) |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |
Charges related to realized investment gains (losses), net |  | 19 |  |  | 0 |  |  | 131 |  |  | (50 | ) |  | 0 |  |  | 0 |  |  | 168 |
Investment gains (losses) on trading account assets supporting insurance liabilities, net |  | (17 | ) |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |
Change in experience-rated contractholder liabilities due to assets value changes |  | 0 |  |  | 0 |  |  | 0 |  |  | (21 | ) |  | 0 |  |  | 0 |  |  | 0 |
Divested businesses: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Closed Block division |  | 5,669 |  |  | 2,578 |  |  | 3,282 |  |  | 134 |  |  | 1,941 |  |  | 2 |  |  | 37 |
Other divested businesses |  | 602 |  |  | 278 |  |  | 594 |  |  | 0 |  |  | 0 |  |  | 3 |  |  | 0 |
Equity in earnings of operating joint ventures and earnings attributable to noncontrolling interests |  | (57 | ) |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |
Total per Consolidated Statements of Operations |  | $ | 58,779 |  |  | $ | 15,520 |  |  | $ | 33,632 |  |  | $ | 3,761 |  |  | $ | 2,025 |  |  | $ | 1,320 |  |  | $ | 1,877 |
__________
(1) | Prior period divisional subtotals are presented on a basis consistent with the Company’s new organizational structure. Individual segment results and consolidated totals remain unchanged. See Note 1 for additional information.
|  | Year Ended December 31, 2015
|  | Revenues |  | Net Investment Income |  | Policyholders’ Benefits |  | Interest Credited to Policyholders’ Account Balances |  | Dividends to Policyholders |  | Interest Expense |  | Amortization of DAC
|  | (in millions)
Individual Annuities |  | $ | 4,695 |  |  | $ | 603 |  |  | $ | 314 |  |  | $ | 363 |  |  | $ | 0 |  |  | $ | 69 |  |  | $ | 465 |
Individual Life |  | 5,233 |  |  | 1,669 |  |  | 2,245 |  |  | 644 |  |  | 33 |  |  | 550 |  |  | 133 |
Total U.S. Individual Solutions division(1) |  | 9,928 |  |  | 2,272 |  |  | 2,559 |  |  | 1,007 |  |  | 33 |  |  | 619 |  |  | 598 |
Retirement |  | 11,821 |  |  | 4,082 |  |  | 8,352 |  |  | 1,441 |  |  | (2 | ) |  | 25 |  |  | 66 |
Group Insurance |  | 5,143 |  |  | 586 |  |  | 3,868 |  |  | 257 |  |  | 0 |  |  | 8 |  |  | 6 |
Total U.S. Workplace Solutions division(1) |  | 16,964 |  |  | 4,668 |  |  | 12,220 |  |  | 1,698 |  |  | (2 | ) |  | 33 |  |  | 72 |
Investment Management |  | 2,944 |  |  | 111 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 10 |  |  | 19 |
Total Investment Management division(1) |  | 2,944 |  |  | 111 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 10 |  |  | 19 |
International Insurance |  | 19,364 |  |  | 4,357 |  |  | 11,821 |  |  | 880 |  |  | 51 |  |  | 5 |  |  | 989 |
Total International Insurance division |  | 19,364 |  |  | 4,357 |  |  | 11,821 |  |  | 880 |  |  | 51 |  |  | 5 |  |  | 989 |
Corporate and Other operations |  | (570 | ) |  | 550 |  |  | 16 |  |  | 0 |  |  | 0 |  |  | 635 |  |  | (47 | )
Total Corporate and Other |  | (570 | ) |  | 550 |  |  | 16 |  |  | 0 |  |  | 0 |  |  | 635 |  |  | (47 | )
Total |  | 48,630 |  |  | 11,958 |  |  | 26,616 |  |  | 3,585 |  |  | 82 |  |  | 1,302 |  |  | 1,631 |
Reconciling items: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Realized investment gains (losses), net, and related adjustments |  | 2,258 |  |  | 1 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |
Charges related to realized investment gains (losses), net |  | (31 | ) |  | 0 |  |  | 39 |  |  | 191 |  |  | 0 |  |  | 0 |  |  | 452 |
Investment gains (losses) on trading account assets supporting insurance liabilities, net |  | (524 | ) |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |
Change in experience-rated contractholder liabilities due to assets value changes |  | 0 |  |  | 0 |  |  | 0 |  |  | (433 | ) |  | 0 |  |  | 0 |  |  | 0 |
Divested businesses: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Closed Block division |  | 6,160 |  |  | 2,653 |  |  | 3,365 |  |  | 135 |  |  | 2,130 |  |  | 1 |  |  | 37 |
Other divested businesses |  | 638 |  |  | 217 |  |  | 607 |  |  | 1 |  |  | 0 |  |  | 3 |  |  | 0 |
Equity in earnings of operating joint ventures and earnings attributable to noncontrolling interests |  | (12 | ) |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |
Total per Consolidated Statements of Operations |  | $ | 57,119 |  |  | $ | 14,829 |  |  | $ | 30,627 |  |  | $ | 3,479 |  |  | $ | 2,212 |  |  | $ | 1,306 |  |  | $ | 2,120 |
__________
(1) | Prior period divisional subtotals are presented on a basis consistent with the Company’s new organizational structure. Individual segment results and consolidated totals remain unchanged. See Note 1 for additional information.
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:
|  | 2017 |  | 2016 |  | 2015
|  | (in millions)
Domestic operations |  | $ | 36,573 |  |  | $ | 36,079 |  |  | $ | 36,151 |
Foreign operations, total |  | $ | 23,116 |  |  | $ | 22,700 |  |  | $ | 20,968 |
Foreign operations, Japan |  | $ | 19,589 |  |  | $ | 19,768 |  |  | $ | 18,177 |
Foreign operations, Korea |  | $ | 1,567 |  |  | $ | 1,439 |  |  | $ | 1,462 |
Management has determined the intersegment revenues with reference to market rates. Intersegment revenues are eliminated in consolidation in Corporate and Other. The Investment Management segment revenues include intersegment revenues, primarily consisting of asset-based management and administration fees, for the years ended December 31, as follows:
|  | 2017 |  | 2016 |  | 2015
|  | (in millions)
Investment Management segment intersegment revenues |  | $ | 717 |  |  | $ | 682 |  |  | $ | 682 |
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. Certain services are provided under agreements between affiliates of Prudential Financial. Under one such agreement, certain domestic subsidiaries engaged certain foreign subsidiaries to perform services associated with managing assets, while certain other agreements among domestic and foreign affiliates related to corporate support services. For the period ending December 31, 2017, the domestic subsidiaries paid $56 million to the foreign subsidiaries, while $19 million was paid among certain foreign subsidiaries as a payment made in advance for services expected to be rendered and thus earned in the first quarter of 2018. These intercompany transactions are eliminated in the consolidated financial statements.

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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