Prudential 2015 Annual Report Download - page 145

PRUDENTIAL FINANCIAL, INC.
Notes to Consolidated Financial Statements
(1) The VOBA balances at December 31, 2015 were $201 million, $36 million, $1,332 million, $0 million, $1,250 million, and $9 million related to the
insurance transactions associated with the CIGNA, Prudential Annuities Holding Co., Gibraltar Life, Aoba Life, The Hartford Life Business, and
Gibraltar BSN Life Berhad, respectively. The weighted average remaining expected life of VOBA varies by product. The weighted average remaining
expected lives were approximately 12, 5, 8, 6, 10, and 13 years for the VOBA related to CIGNA, Prudential Annuities Holding Co., Gibraltar Life.,
Aoba Life, The Hartford Life Business, and Gibraltar BSN Life Berhad, respectively.
(2) The interest accrual rates vary by product. The interest rates for 2015 were 6.40%, 6.05%, 1.28% to 2.87%, 2.60%, 3.00% to 6.17% and 4.07% to
5.51% for the VOBA related to CIGNA, Prudential Annuities Holding Co., Gibraltar Life, Aoba Life, The Hartford Life Business, and Gibraltar BSN
Life Berhad, respectively. The interest rates for 2014 were 6.40%, 6.10%, 1.28% to 2.87%, 2.60%, 3.00% to 6.17% and 4.07% to 5.51% for the VOBA
related to CIGNA, Prudential Annuities Holding Co., Gibraltar Life, Aoba Life, The Hartford Life Business, and Gibraltar BSN Life Berhad,
respectively. The interest rates for 2013 were 6.40%, 6.14%, 1.28% to 2.87%, 2.60% and 3.00% to 6.17% for the VOBA related to CIGNA, Prudential
Annuities Holding Co., Gibraltar Life, Aoba Life and the Hartford Life Business, respectively.
The following table provides estimated future amortization, net of interest, for the periods indicated.
2016 2017 2018 2019 2020
(in millions)
Estimated future VOBA amortization ............................................................... $269 $249 $227 $209 $193
9. GOODWILL AND OTHER INTANGIBLES
The changes in the book value of goodwill by area are as follows:
Retirement
Asset
Management
International
Insurance Total
(in millions)
Balance at December 31, 2012:
Gross Goodwill .............................................................. $444 $238 $191 $873
Accumulated Impairment Losses ................................................ 0 0 0 0
Net Goodwill ................................................................ 444 238 191 873
2013 Activity:
Other(1) ................................................................ 0 2 (36) (34)
Balance at December 31, 2013:
Gross Goodwill .............................................................. 444 240 155 839
Accumulated Impairment Losses ................................................ 0 0 0 0
Net Goodwill ................................................................ 444 240 155 839
2014 Activity:
Acquisitions ............................................................. 0 0 18 18
Other(1) ................................................................ 0 (5) (21) (26)
Balance at December 31, 2014:
Gross Goodwill .............................................................. 444 235 152 831
Accumulated Impairment Losses ................................................ 0 0 0 0
Net Goodwill ................................................................ 444 235 152 831
2015 Activity:
Acquisitions ............................................................. 0 0 0 0
Other(1) ................................................................ 0 (4) (3) (7)
Balance at December 31, 2015:
Gross Goodwill .............................................................. 444 231 149 824
Accumulated Impairment Losses ................................................ 0 0 0 0
Net Goodwill ................................................................ $444 $231 $149 $824
(1) Other represents foreign currency translation and purchase price adjustments.
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 goodwill impairment testing using the quantitative approach for all reporting units that had goodwill at
December 31, 2015 and 2014, and no impairments were recorded.
Prudential Financial, Inc. 2015 Annual Report 143