Prudential 2012 Annual Report Download - page 215

PRUDENTIAL FINANCIAL, INC.
Notes to Consolidated Financial Statements
22. SEGMENT INFORMATION (continued)
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:
2012 2011 2010
(in millions)
Domestic operations .................................................................... $56,652 $28,900 $26,484
Foreign operations, total ................................................................. 28,163 20,130 11,733
Foreign operations, Japan ................................................................ 26,393 17,607 9,483
Foreign operations, Korea ................................................................ 1,294 1,331 1,273
The Asset Management segment revenues include intersegment revenues, primarily consisting of asset-based management and
administration fees, for the years ended December 31, as follows:
2012 2011 2010
(in millions)
Asset Management segment intersegment revenues .................................................. $548 $500 $411
Management has determined the intersegment revenues with reference to market rates. Intersegment revenues are eliminated in
consolidation in Corporate and Other.
23. COMMITMENTS AND GUARANTEES, CONTINGENT LIABILITIES AND LITIGATION AND
REGULATORY MATTERS
Commitments and Guarantees
The Company occupies leased office space in many locations under various long-term leases and has entered into numerous leases
covering the long-term use of computers and other equipment. Rental expense, net of sub-lease income, incurred for the years ended
December 31, 2012, 2011 and 2010 was $287 million, $280 million and $199 million, respectively.
The following table presents, at December 31, 2012, the Company’s future minimum lease payments under non-cancelable operating
leases along with associated sub-lease income:
Operating
Leases
Sub-lease
Income
(in millions)
2013 ....................................................................................... 135 (15)
2014 ....................................................................................... 117 (14)
2015 ....................................................................................... 72 0
2016 ....................................................................................... 52 0
2017 ....................................................................................... 47 0
2018 and thereafter ............................................................................ 96 0
Total ................................................................................... $519 $(29)
Occasionally, for business reasons, the Company may exit certain non-cancelable operating leases prior to their expiration. In these
instances, the Company’s policy is to accrue, at the time it ceases to use the property being leased, the future rental expense net of any
expected sub-lease income, and to release this reserve over the remaining commitment period. Of the total non-cancelable operating leases
and sub-lease income amounts listed above, $10 million and $10 million, respectively, has been accrued at December 31, 2012.
Commercial Mortgage Loan Commitments
As of December 31,
2012 2011
(in millions)
Total outstanding mortgage loan commitments ...................................................... $2,552 $2,139
Portion of commitment where prearrangement to sell to investor exists ................................... 897 1,199
In connection with the Company’s commercial mortgage operations, it originates commercial mortgage loans. Commitments for loans
that will be held for sale are recognized as derivatives and recorded at fair value. In certain of these transactions, the Company pre-arranges
that it will sell the loan to an investor, including to governmental sponsored entities as discussed below, after the Company funds the loan.
Prudential Financial, Inc. 2012 Annual Report 213