Goodwill and Other Intangibles

12 Months Ended

Dec. 31, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL AND OTHER INTANGIBLES

The changes in the carrying value of goodwill by reportable segment are as follows:


	PGIM		International Businesses		Corporate and Other(1)		Other(2)		Total
	(in millions)
Goodwill balance, December 31, 2020:	$	258	$	144	$	2,623	$	10	$	3,035
Acquisitions(3)	304		0		0		0		304
Impairments	0		0		(1,060)		0		(1,060)
Foreign currency translation	(4)		(14)		(2)		0		(20)
Reclassified to “Assets held-for-sale”(4)	0		0		(455)		0		(455)
Goodwill balance, December 31, 2021:	558		130		1,106		10		1,804

Impairments	0		0		(903)		0		(903)
Foreign currency translation	(9)		(15)		(1)		0		(25)
Goodwill balance, December 31, 2022:	549		115		202		10		876
Acquisitions(5)	373		0		0		0		373
Impairments	0		0		(177)		0		(177)
Divestitures(6)	0		0		(23)		0		(23)
Foreign currency translation	30		(7)		(1)		0		22
Goodwill balance, December 31, 2023:	$	952	$	108	$	1	$	10	$	1,071

__________

(1)Effective January 1, 2023, Assurance IQ no longer represents a separately reportable segment and is now included within Corporate and Other operations. Prior period amounts have been reclassified to conform to current period presentation.

(2)Other includes goodwill balances assigned to Individual Retirement Strategies, Individual Life, and Group Insurance.

(3)During 2021, PGIM completed the acquisitions of Montana Capital Partners, a European-based private equity secondaries asset manager, and Green Harvest Asset Management LLC, a separately managed account platform providing customized solutions for the high net worth market.

(4)The Full Service Retirement business was classified as a divested business and transferred to Corporate and Other, and its assets, including goodwill, were reclassified to “Assets held-for-sale” as of December 31, 2021. The sale was completed in the second quarter of 2022. See Note 1 for additional information regarding this disposition.

(5)During 2023, PGIM acquired a majority stake in Deerpath Capital Management, LP, a leading U.S.-based private credit and direct lending manager.

(6)A foreign operation that was classified as a divested business and transferred to Corporate and Other during 2020 was sold in 2023.

The Company tests goodwill for impairment annually, as of December 31, and more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount, as discussed in further detail in Note 2.

The Company performed the annual goodwill impairment test using the quantitative approach for all reporting units at December 31, 2023. The estimated fair value of PGIM and Gibraltar and Other, within the International Businesses segment, incorporated a market approach based on an earnings multiple and significantly exceeded their carrying value as of December 31, 2023. The goodwill impairment test for Assurance IQ, within Corporate and Other operations, resulted in a full impairment of its assigned goodwill of $177 million pre-tax ($140 million after-tax) as of December 31, 2023. In 2022 and 2021, the company recorded non-cash impairment charges of $903 million pre-tax ($713 million after-tax) and $1,060 million pre-tax ($837 million after-tax), related to the goodwill assigned to Assurance IQ, respectively.

The annual quantitative goodwill impairment test for Assurance IQ estimated the fair value of the business by weighting the results from an income approach, based on discounted cash flow valuation techniques and a market valuation approach based on a forward sales multiple. The decline in the estimated fair value of Assurance IQ below its carrying value as of December 31, 2023 was primarily due to a reduction in the forecasted cash flows due to weaker than expected sales performance in the fourth quarter of 2023. The resulting $177 million pre-tax ($140 million after-tax) non-cash impairment charge was for all of the goodwill assigned to Assurance IQ as of December 31, 2023.

Other Intangibles

Other intangible balances at December 31, are as follows:


	2023						2022
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
	(in millions)
Subject to amortization:
Mortgage servicing rights	$	884	$	(600)	$	284	$	882	$	(569)	$	313
Customer relationships	268		(158)		110		202		(146)		56
Software and other	189		(135)		54		199		(111)		88
Not subject to amortization	58		N/A		58		61		N/A		61
Total					$	506					$	518

The fair values of net mortgage servicing rights were $286 million and $316 million at December 31, 2023 and 2022, respectively. Amortization expense for other intangibles was $89 million, $104 million and $110 million for the years ending December 31, 2023, 2022 and 2021, respectively. The amortization expense amounts for 2023, 2022 and 2021 do not include impairments recorded for mortgage servicing rights or other intangibles. See the nonrecurring fair value measurements section of Note 6 for additional information regarding these impairments.

The following table provides estimated future amortization for the periods indicated:


	2024		2025		2026		2027		2028
	(in millions)
Estimated future amortization expense of other intangibles	$	88	$	78	$	56	$	51	$	45