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Segment Information | 3 Months Ended
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Mar. 31, 2021
Segment Reporting [Abstract] |
Segment Information | SEGMENT INFORMATION Segments The Company’s principal operations consist of PGIM (the Company’s global investment management business), the U.S. Businesses (consisting of the Retirement, Group Insurance, Individual Annuities, Individual Life and Assurance IQ businesses), the International Businesses, the Closed Block division, and the Company’s Corporate and Other operations. 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 Corporate and Other. Divested and Run-off Businesses consist of businesses that have been, or will be, sold or exited, including businesses that have been placed in wind-down status that do not qualify for “discontinued operations” accounting treatment under U.S. GAAP. The Company’s Corporate and Other operations include corporate items and initiatives that are not allocated to business segments as well as the Divested and Run-off Businesses described above. 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: •Realized investment gains (losses), net, and related adjustments; •Charges related to realized investment gains (losses), net; •Market experience updates; •Divested and Run-off Businesses; •Equity in earnings of operating joint ventures and earnings attributable to noncontrolling interests; and •Other adjustments. 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. For additional information on these reconciling items, see Note 22 to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020. The Company has historically reflected the results of its variable annuities hedging programs in adjusted operating income over time. Beginning with the second quarter of 2020, these impacts are excluded from adju s ted operating income which the Company believes enhances the understanding of underlying performance trends. Reconciliation of adjusted operating income to net income (loss) The table below reconciles “Adjusted operating income before income taxes” to “Income (loss) before income taxes and equity in earnings of operating joint ventures”:
|  |  | Three Months Ended March 31,
|  |  |  |  | 2021 |  | 2020(1)
Adjusted operating income before income taxes by segment: |  |  |  |  | (in millions)
PGIM |  |  |  |  | $ | 651 |  |  | $ | 164 |
U.S. Businesses: |  |  |  |  |  |  |
Retirement |  |  |  |  | 623 |  |  | 245 |
Group Insurance |  |  |  |  | (132) |  |  | 44 |
Individual Annuities(2) |  |  |  |  | 444 |  |  | 373 |
Individual Life |  |  |  |  | (44) |  |  | (20) |
Assurance IQ |  |  |  |  | (39) |  |  | (23) |
Total U.S. Businesses |  |  |  |  | 852 |  |  | 619 |
International Businesses |  |  |  |  | 871 |  |  | 696 |
Corporate and Other |  |  |  |  | (286) |  |  | (342) |
Total segment adjusted operating income before income taxes |  |  |  |  | 2,088 |  |  | 1,137 |
Reconciling items: |  |  |  |  |  |  |
Realized investment gains (losses), net, and related adjustments |  |  |  |  | 1,264 |  |  | 299 |
Charges related to realized investment gains (losses), net |  |  |  |  | (239) |  |  | (802) |
Market experience updates |  |  |  |  | 304 |  |  | (938) |
Divested and Run-off Businesses: |  |  |  |  |  |  |
Closed Block division |  |  |  |  | 34 |  |  | (1) |
Other Divested and Run-off Businesses |  |  |  |  | 30 |  |  | (69) |
Equity in earnings of operating joint ventures and earnings attributable to noncontrolling interests |  |  |  |  | (54) |  |  | (9) |
Other adjustments(3) |  |  |  |  | (13) |  |  | 45 |
Income (loss) before income taxes and equity in earnings of operating joint ventures per Unaudited Interim Consolidated Financial Statements |  |  |  |  | $ | 3,414 |  |  | $ | (338) |
________ (1)Effective second quarter of 2020, the results of POK and the impact of its sale are excluded from the International Businesses and are included in the Divested and Run-off Businesses in Corporate and Other. Effective third quarter of 2020, the results of POT and the impact of its anticipated sale are excluded from the International Businesses and are included in the Divested and Run-off Businesses in Corporate and Other. Prior period amounts have been updated to conform to current period presentation. See Note 1 for additional information. (2)Individual Annuities segment results reflect DAC as if the Individual Annuities 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. (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. 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 by segment on an adjusted operating income basis, and the reconciliation of the segment totals to amounts reported in the Consolidated Financial Statements.
| March 31, 2021 |  | December 31, 2020
Assets by segment: | (in millions)
PGIM | $ | 47,460 |  |  | $ | 48,680 |
U.S. Businesses: |  |  |
Retirement | 208,679 |  |  | 213,726 |
Group Insurance | 43,685 |  |  | 45,601 |
Individual Annuities | 192,342 |  |  | 200,718 |
Individual Life | 109,541 |  |  | 110,953 |
Assurance IQ | 2,697 |  |  | 2,703 |
Total U.S. Businesses | 556,944 |  |  | 573,701 |
International Businesses | 219,600 |  |  | 231,128 |
Corporate and Other | 23,786 |  |  | 25,124 |
Closed Block division | 59,490 |  |  | 62,089 |
Total assets per Unaudited Interim Consolidated Financial Statements | $ | 907,280 |  |  | $ | 940,722 |
|  |  | Three Months Ended March 31,
|  |  |  |  | 2021 |  | 2020(1)
Revenues on an adjusted operating income basis: |  |  |  |  | (in millions)
PGIM |  |  |  |  | $ | 1,314 |  |  | $ | 778 |
U.S. Businesses: |  |  |  |  |  |  |
Retirement |  |  |  |  | 2,591 |  |  | 2,437 |
Group Insurance |  |  |  |  | 1,556 |  |  | 1,424 |
Individual Annuities |  |  |  |  | 1,199 |  |  | 1,148 |
Individual Life |  |  |  |  | 1,635 |  |  | 1,530 |
Assurance IQ |  |  |  |  | 108 |  |  | 60 |
Total U.S. Businesses |  |  |  |  | 7,089 |  |  | 6,599 |
International Businesses |  |  |  |  | 5,931 |  |  | 5,636 |
Corporate and Other |  |  |  |  | (119) |  |  | (205) |
Total revenues on an adjusted operating income basis |  |  |  |  | 14,215 |  |  | 12,808 |
Reconciling items: |  |  |  |  |  |  |
Realized investment gains (losses), net, and related adjustments |  |  |  |  | 1,004 |  |  | (364) |
Charges related to realized investment gains (losses), net |  |  |  |  | (76) |  |  | (61) |
Market experience updates |  |  |  |  | 101 |  |  | (334) |
Divested and Run-off Businesses: |  |  |  |  |  |  |
Closed Block division |  |  |  |  | 1,365 |  |  | 677 |
Other Divested and Run-off Businesses |  |  |  |  | 371 |  |  | 692 |
Equity in earnings of operating joint ventures and earnings attributable to noncontrolling interests |  |  |  |  | (28) |  |  | (12) |
Other adjustments(2) |  |  |  |  | 0 |  |  | 58 |
Total revenues per Unaudited Interim Consolidated Financial Statements |  |  |  |  | $ | 16,952 |  |  | $ | 13,464 |
__________ (1)Effective second quarter of 2020, the results of POK and the impact of its sale are excluded from the International Businesses and are included in the Divested and Run-off Businesses in Corporate and Other. Effective third quarter of 2020, the results of POT and the impact of its anticipated sale are excluded from the International Businesses and are included in the Divested and Run-off Businesses in Corporate and Other. Prior period amounts have been updated to conform to current period presentation. See Note 1 for additional information. (2)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. 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, as follows:
|  |  | Three Months Ended March 31,
|  |  |  |  | 2021 |  | 2020
|  |  |  |  | (in millions)
PGIM segment intersegment revenues |  |  |  |  | $ | 223 |  |  | $ | 217 |
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 investment management activities, for the periods indicated:
|  |  | Three Months Ended March 31,
|  |  |  |  | 2021 |  | 2020
|  |  |  |  | (in millions)
Asset-based management fees |  |  |  |  | $ | 994 |  |  | $ | 875 |
Performance-based incentive fees |  |  |  |  | 27 |  |  | 14 |
Other fees |  |  |  |  | 155 |  |  | 144 |
Total asset management and service fees |  |  |  |  | $ | 1,176 |  |  | $ | 1,033 |

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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/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 31 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8924-108599 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 34 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8981-108599 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 21 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8721-108599 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 40 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9031-108599 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (f) -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (e) -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 26 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8844-108599 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 41 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9038-108599 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (d) -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 22 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8736-108599 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 42 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9054-108599 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8657-108599 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 21 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8721-108599 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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