Prudential 2011 Annual Report Download - page 257

PRUDENTIAL FINANCIAL, INC.
Notes to Consolidated Financial Statements
22. SEGMENT INFORMATION (continued)
U.S. Retirement Solutions and Investment Management Division. The U.S. Retirement Solutions and Investment Management
division consists of the Individual Annuities, Retirement, and Asset Management segments. The Individual Annuities segment
manufactures and distributes individual variable and fixed annuity products, primarily to the U.S. mass affluent market. The Retirement
segment manufactures and distributes products and provides administrative services for qualified and non-qualified retirement plans and
offers guaranteed investment contracts, funding agreements, institutional and retail notes, structured settlement annuities and group
annuities. The Asset Management segment 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, as well as to other segments of the Company.
U.S. Individual Life and Group Insurance Division. The U.S. Individual Life and Group Insurance division consists of the Individual
Life and Group Insurance segments. 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. The Group Insurance segment
manufactures and distributes a full range of group life, long-term and short-term group disability, long-term care and group corporate-,
bank- and trust-owned life insurance in the U.S. primarily to institutional clients for use in connection with employee and membership
benefit plans.
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 Advisors, the proprietary distribution channel of the Company’s Gibraltar Life operation.
In February 2010, the Company signed a definitive agreement to sell Prudential Investment & Securities Co., Ltd. and Prudential
Asset Management Co., Ltd, which together comprise the Company’s Korean asset management operations. As a result, the Company has
reflected the results of its Korean asset management operations as discontinued operations for all periods presented. This transaction closed
on June 1, 2010.
On February 1, 2011, the Company completed the acquisition from AIG of the Star and Edison Businesses pursuant to the stock
purchase agreement dated September 30, 2010 between Prudential Financial and AIG. All acquired businesses are in Japan and their results
are included with the Company’s Gibraltar Life operations. The Star and Edison Businesses primarily distribute individual life insurance,
fixed annuities and certain accident and health products with fixed benefits through captive agents, independent agents, and banks. The
addition of these operations to the Company’s existing businesses increases its scale in the Japanese insurance market and provides
complementary distribution opportunities.
On April 6, 2011, the Company entered into a stock and asset purchase agreement to sell all of the issued and outstanding shares of
capital stock of the Company’s subsidiaries that conduct its Global Commodities Business and certain assets that are primarily used in
connection with the Global Commodities Business. This sale was completed on July 1, 2011. As a result, the Company has reflected the
results of the Global Commodities Business previously reported in the International Investments segment as discontinued operations for all
periods presented. In addition, the remaining business activities previously reported as the International Investments segment have been
reclassified and included in the International Insurance segment.
Corporate and Other. Corporate and Other includes corporate operations, after allocations to business segments, and divested
businesses. Corporate operations consist primarily of: (1) investment returns on capital that is not deployed in any business segments;
(2) returns from investments not allocated to business segments, including debt-financed investment portfolios, and certain strategic joint
venture investments, 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) income and expense from
qualified pension and other employee benefit plans, after allocations to business segments; (5) corporate-level income and expense, after
allocations to business segments, including corporate governance, corporate advertising, philanthropic activities, deferred compensation,
and costs related to certain contingencies; (6) certain retained obligations relating to pre-demutualization policyholders whom the Company
had previously agreed to provide insurance for reduced or no premium in accordance with contractual settlements related to prior
individual life insurance sales practices remediation; (7) results related to the Company’s capital protection framework; and (8) the impact
of transactions with other segments.
On December 6, 2011, the Company sold its real estate brokerage franchise and relocation services businesses, which was comprised
of Prudential Real Estate and Relocation Services, Inc., (“PRERS”) and its subsidiaries. The Company retained ownership of a financing
subsidiary of PRERS that continues to hold debt and equity investments in a limited number of real estate brokerage franchises. As a result,
the PRERS operations previously reported as the Real Estate and Relocation Services segment, have been classified within divested
businesses and are reflected in the Company’s Corporate and Other operations. Accordingly, these results are excluded from adjusted
operating income, with prior period results being adjusted to reflect such reclassification. In addition to PRERS, divested businesses consist
primarily of the property and casualty insurance businesses, individual health and disability insurance businesses, financial advisory
business, and commercial mortgage securitization operations.
Prudential Financial, Inc. 2011 Annual Report 255