- Fourth quarter 2020 net income attributable to Prudential
Financial, Inc. of $819 million or $2.03 per Common share versus
$1.128 billion or $2.76 per share for the year-ago quarter.
- Fourth quarter 2020 after-tax adjusted operating income of
$1.183 billion or $2.93 per Common share versus $915 million or
$2.24 per share for the year-ago quarter.
- Net loss attributable to Prudential Financial, Inc. of $374
million or $1.00 per Common share for 2020 versus net income of
$4.186 billion or $10.11 per share for 2019.
- After-tax adjusted operating income of $4.111 billion or $10.21
per Common share for 2020 versus $4.656 billion or $11.24 per share
for 2019.
- Book value per Common share of $167.81 versus $155.88 per share
for the year-ago; adjusted book value per Common share of $94.79
versus $101.04 per share for the year-ago.
- Parent company highly liquid assets of $5.6 billion versus $4.1
billion for the year-ago.
- Assets under management amounted to $1.721 trillion versus
$1.551 trillion for the year-ago.
- The Company’s Board of Directors has authorized the repurchase
of up to $1.5 billion of its outstanding Common Stock during the
period from January 1, 2021 through December 31, 2021. In addition,
the Company declared a quarterly dividend of $1.15 per share of
Common stock, payable on March 11, 2021, to shareholders of record
as of February 16, 2021, representing an increase of 4.5% over the
prior year dividend level and a 4.9% annualized yield on adjusted
book value.
Charles Lowrey, Chairman and CEO, commented on results:
“As we reflect on the extraordinary events of 2020 and the
ongoing global pandemic, we thank our employees for their continued
dedication to fulfilling our company’s purpose of making lives
better by solving the financial challenges of our changing
world.
During the fourth quarter, we continued to successfully execute
against our 2020 priorities, paving the path for the acceleration
of our strategy in 2021 and beyond.
Looking ahead, we will continue our transformation by executing
on our $750 million cost savings plan and by taking additional
steps to increase our growth potential and reduce our market
sensitivity. Over the next three years we plan to reallocate
between $5 billion and $10 billion of capital with the intention of
doubling the earnings contribution of our higher growth businesses
and halving Individual Annuities.
Backed by the strength of our rock solid balance sheet, we also
plan to return approximately $10 billion of capital to shareholders
via dividends and share repurchases during this time period. This
includes the resumption of share repurchases in the first quarter
of 2021, as part of our $1.5 billion authorization for the
year.
These changes will position Prudential to make a more meaningful
difference in the financial lives of more people around the world,
and to deliver attractive returns to our shareholders.”
Prudential Financial, Inc. (NYSE: PRU) today reported fourth
quarter and year-end 2020 results. Net income attributable to
Prudential Financial, Inc. was $819 million ($2.03 per Common
share) for the fourth quarter of 2020, compared to net income of
$1.128 billion ($2.76 per Common share) for the fourth quarter of
2019. After-tax adjusted operating income was $1.183 billion ($2.93
per Common share) for the fourth quarter of 2020, compared to $915
million ($2.24 per Common share) for the fourth quarter of
2019.
Net loss attributable to Prudential Financial, Inc. was $374
million ($1.00 per Common share) for 2020, compared to net income
of $4.186 billion ($10.11 per Common Share) for 2019. After-tax
adjusted operating income was $4.111 billion ($10.21 per Common
share) for 2020, compared to $4.656 billion ($11.24 per Common
share) for 2019.
Consolidated adjusted operating income and adjusted book value
are non-GAAP measures. These measures are discussed later in this
press release under “Forward-Looking Statements and Non-GAAP
Measures” and reconciliations to the most comparable GAAP measures
are provided in the tables that accompany this release.
RESULTS OF ONGOING OPERATIONS
The Company’s ongoing operations include PGIM, U.S. Businesses
(consisting of U.S. Workplace Solutions, U.S. Individual Solutions,
and Assurance IQ), International Businesses, and Corporate &
Other. In the following business-level discussion, adjusted
operating income refers to pre-tax results.
PGIM
PGIM, the Company’s global investment management
business, reported record high adjusted operating income of $404
million for the fourth quarter of 2020, compared to $288 million in
the year-ago quarter. The increase reflects higher asset management
fees, driven by an increase in average account values, and higher
Other Related Revenue, driven by record high agency revenue and the
impact of investment performance on incentive fees and co- and seed
investment earnings, partially offset by higher expenses, primarily
driven by business growth.
PGIM assets under management of $1.499 trillion, a record high,
were up 13% from the year-ago quarter, reflecting market
appreciation and public fixed income inflows. Third-party net
inflows of $6.3 billion in the current quarter reflect retail
inflows of $3.8 billion and institutional inflows of $2.5
billion.
U.S. Businesses
U.S. Businesses reported adjusted operating income of
$807 million for the fourth quarter of 2020, compared to $841
million in the year-ago quarter. The decrease reflects less
favorable underwriting results, driven by COVID-19 related net
mortality experience, and a change in business practice in our
Individual Life business, and lower fee income, net of distribution
expenses and other associated costs, in our Individual Annuities
business, partially offset by higher net investment spread results,
driven by higher variable investment income, and lower
expenses.
U.S. Workplace Solutions, consisting of Retirement and
Group Insurance, reported adjusted operating income of $451 million
for the fourth quarter of 2020, compared to $342 million in the
year-ago quarter.
Retirement:
- Reported record high adjusted operating income of $538 million
in the current quarter, compared to $281 million in the year-ago
quarter. The increase reflects higher net investment spread
results, driven by higher variable investment income, higher
reserve gains, including favorable impacts due to COVID-19, and
lower expenses.
- Account values of $559 billion, a record high, were up 12% from
the year-ago quarter, driven by market appreciation and net
inflows. Net inflows in the current quarter totaled $5.5 billion
with $3.2 billion from Institutional Investment Products, primarily
from pension risk transfer transactions, and $2.3 billion from Full
Service.
Group Insurance:
- Reported a loss, on an adjusted operating income basis, of $87
million in the current quarter, compared to adjusted operating
income of $61 million in the year-ago quarter. The decrease
primarily reflects less favorable underwriting results in our group
life and group disability businesses due to COVID-19 and related
impacts.
- Reported earned premiums, policy charges, and fees of $1.3
billion in the current quarter were consistent with the year-ago
quarter.
U.S. Individual Solutions, consisting of Individual
Annuities and Individual Life, reported adjusted operating income
of $375 million for the fourth quarter of 2020, compared to $508
million in the year-ago quarter.
Individual Annuities:
- Reported adjusted operating income of $440 million in the
current quarter, compared to $450 million in the year-ago quarter.
The decrease reflects lower fee income, net of distribution
expenses and other associated costs, partially offset by higher net
investment spread results.
- Account values of $176 billion, a record high, were up 4% from
the year-ago quarter, reflecting equity market appreciation,
partially offset by net outflows. Gross sales of $2.0 billion in
the current quarter reflect our continued product repricing and
pivot strategy.
Individual Life:
- Reported a loss, on an adjusted operating income basis, of $65
million in the current quarter, compared to adjusted operating
income of $58 million in the year-ago quarter. The decrease
reflects less favorable underwriting results, driven by COVID-19
mortality experience, and a change in business practice, which
resulted in a refinement to reserves and related balances,
partially offset by higher net investment spread results and lower
expenses.
- Sales of $239 million in the current quarter were up 14% from
the year-ago quarter, as higher Variable sales were partially
offset by lower Universal Life and Term sales, reflecting our
product repricing and pivot strategy.
Assurance IQ reported a loss, on an adjusted operating
income basis, of $19 million in the current quarter, compared to a
loss of $9 million in the year-ago quarter. This reflects a 94%
increase in sales, driven by higher Medicare sales during the
annual enrollment period, that were more than offset by increased
expenses to support business growth, including higher marketing,
distribution, and infrastructure costs.
International Businesses
International Businesses, consisting of Life Planner and
Gibraltar Life & Other, reported adjusted operating income of
$790 million for the fourth quarter of 2020, compared to $748
million in the year-ago quarter. The increase reflects lower
expenses, business growth, and more favorable underwriting results,
partially offset by lower net investment spread results.
Life Planner:
- Reported adjusted operating income of $426 million in the
current quarter, compared to $345 million in the year-ago quarter.
The increase reflects lower expenses, business growth, higher net
investment spread results, and more favorable underwriting
results.
- Constant dollar basis sales of $216 million in the current
quarter decreased 19% from the year-ago quarter, primarily
reflecting lower sales in Japan following product repricing in
August of 2020.
Gibraltar Life & Other:
- Reported adjusted operating income of $364 million in the
current quarter, compared to $403 million in the year-ago quarter.
The decrease primarily reflects lower net investment spread
results.
- Constant dollar basis sales of $238 million in the current
quarter decreased 16% from the year-ago quarter, reflecting lower
sales in Japan following product repricing in August of 2020.
Corporate & Other
Corporate & Other reported a loss, on an adjusted
operating income basis, of $486 million for the fourth quarter of
2020, compared to a loss of $738 million in the year-ago quarter.
The lower loss reflects lower expenses, driven by the absence of
costs related to the Company’s Voluntary Separation Program in the
year-ago quarter, partially offset by lower net investment
income.
NET INCOME
Net income in the current quarter included $1.2 billion
of pre-tax net realized investment losses and related charges and
adjustments, driven by losses on derivatives, and also includes $12
million from impairment and credit-related losses. These losses
were partially offset by $376 million of pre-tax gains related to
market experience updates and $87 million of pre-tax net gains from
divested and run-off businesses.
Net income for the year-ago quarter included $145 million of
pre-tax net gains from divested and run-off businesses, $73 million
of pre-tax net realized investment gains and related charges and
adjustments, net of $58 million from impairment and credit-related
losses, and $66 million of pre-tax gains related to market
experience updates.
FORWARD-LOOKING STATEMENTS AND NON-GAAP MEASURES(1)
Certain of the statements included in this release, including
those regarding our plans to reallocate capital, dividends, share
repurchases, priorities, cost savings goals, and other business
strategies constitute forward-looking statements within the meaning
of the U.S. Private Securities Litigation Reform Act of 1995.
Forward-looking statements are made based on management’s current
expectations and beliefs concerning future developments and their
potential effects upon Prudential Financial, Inc. and its
subsidiaries. Prudential Financial, Inc.’s actual results may
differ, possibly materially, from expectations or estimates
reflected in such forward-looking statements. Certain important
factors that could cause actual results to differ, possibly
materially, from expectations or estimates reflected in such
forward-looking statements can be found in the “Risk Factors” and
“Forward-Looking Statements” sections included in Prudential
Financial, Inc.’s Annual Reports on Form 10-K and Quarterly Reports
on Form 10-Q. Statements regarding our plans to reallocate capital,
dividends, share repurchases, priorities, cost savings goals, and
other business strategies are subject to the risk that we will be
unable to execute our strategy because of market or competitive
conditions or other factors, including the impact of the COVID-19
pandemic. Prudential Financial, Inc. does not undertake to update
any particular forward-looking statement included in this
document.
Consolidated adjusted operating income and adjusted book value
are non-GAAP measures. Reconciliations to the most directly
comparable GAAP measures are included in this release.
We believe that our use of these non-GAAP measures helps
investors understand and evaluate the Company’s performance and
financial position. The presentation of adjusted operating income
as we measure it for management purposes enhances the understanding
of the results of operations by highlighting the results from
ongoing operations and the underlying profitability of our
businesses. Trends in the underlying profitability of our
businesses can be more clearly identified without the fluctuating
effects of the items described below. Adjusted book value augments
the understanding of our financial position by providing a measure
of net worth that is primarily attributable to our business
operations separate from the portion that is affected by capital
and currency market conditions, and by isolating the accounting
impact associated with insurance liabilities that are generally not
marked to market and the supporting investments that are marked to
market through accumulated other comprehensive income under GAAP.
However, these non-GAAP measures are not substitutes for income and
equity determined in accordance with GAAP, and the adjustments made
to derive these measures are important to an understanding of our
overall results of operations and financial position. The schedules
accompanying this release provide reconciliations of non-GAAP
measures with the corresponding measures calculated using GAAP.
Additional historic information relating to our financial
performance is located on our website at
www.investor.prudential.com.
EARNINGS CONFERENCE CALL
Members of Prudential’s senior management will host a conference
call on Friday, February 5, 2021, at 11:00 a.m. ET to discuss with
the investment community the Company’s fourth quarter results. The
conference call will be broadcast live over the Company’s Investor
Relations website at investor.prudential.com. Please log on 15
minutes early in the event necessary software needs to be
downloaded. Institutional investors, analysts, and other members of
the professional financial community are invited to listen to the
call and participate in the Q&A by dialing one of the following
numbers: (877) 336-4437 (domestic) or (234) 720-6985
(international) and using access code 2805600. All others may join
the conference call in listen-only mode by dialing one of the above
numbers. A replay will remain on the Investor Relations website
through February 19. To access a replay via phone starting at 4:00
p.m. ET on February 5 through February 19 dial (866) 207-1041
(domestic) or (402) 970-0847 (international) and use replay code
4902339.
(1) Description of Non-GAAP Measures:
Adjusted operating income is the measure used by the Company to
evaluate segment performance and to allocate resources. Adjusted
operating income excludes “Realized investment gains (losses),
net,” as adjusted, and related charges and adjustments. A
significant element of realized investment gains and losses are
impairments and credit-related and interest rate-related gains and
losses. Impairments and losses from sales of credit-impaired
securities, the timing of which depends largely on market credit
cycles, can vary considerably across periods. The timing of other
sales that would result in gains or losses, such as interest
rate-related gains or losses, is largely subject to our discretion
and influenced by market opportunities as well as our tax and
capital profile.
Realized investment gains (losses) within certain of our
businesses for which such gains (losses) are a principal source of
earnings, and those associated with terminating hedges of foreign
currency earnings and current period yield adjustments are included
in adjusted operating income. Adjusted operating income generally
excludes realized investment gains and losses from products that
contain embedded derivatives, and from associated derivative
portfolios that are part of an asset-liability management program
related to the risk of those products. Adjusted operating income
also excludes gains and losses from changes in value of certain
assets and liabilities relating to foreign currency exchange
movements that have been economically hedged or considered part of
our capital funding strategies for our international subsidiaries,
as well as gains and losses on certain investments that are
designated as trading. Additionally, adjusted operating income
excludes the changes in fair value of equity securities that are
recorded in net income. Additionally, market experience updates,
reflecting the immediate impacts in current period results from
changes in current market conditions on estimates of profitability,
are excluded from adjusted operating income beginning with the
second quarter of 2019, which we believe enhances the understanding
of underlying performance trends.
Adjusted operating income excludes the results of Divested and
Run-off Businesses, which are not relevant to our ongoing
operations. Discontinued operations and earnings attributable to
noncontrolling interests, each of which is presented as a separate
component of net income under GAAP, are also excluded from adjusted
operating income. Adjusted operating income also excludes other
items, such as 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. The tax effect
associated with pre-tax adjusted operating income is based on
applicable IRS and foreign tax regulations inclusive of pertinent
adjustments.
Adjusted book value is calculated as total equity (GAAP book
value) excluding accumulated other comprehensive income (loss) and
the cumulative effect of foreign currency exchange rate
remeasurements and currency translation adjustments corresponding
to realized investment gains and losses. These items are excluded
in order to highlight the book value attributable to our core
business operations separate from the portion attributable to
external and potentially volatile capital and currency market
conditions.
Prudential Financial, Inc. (NYSE: PRU), a financial wellness
leader and premier active global investment manager with more than
$1.5 trillion in assets under management as of December 31, 2020,
has operations in the United States, Asia, Europe, and Latin
America. Prudential’s diverse and talented employees help to make
lives better by creating financial opportunity for more people.
Prudential’s iconic Rock symbol has stood for strength, stability,
expertise and innovation for more than a century. For more
information, please visit news.prudential.com.
Financial Highlights
(in millions, unaudited)
Three Months Ended
Year Ended
December 31
December 31
2020
2019
2020
2019
Adjusted operating income (loss) before
income taxes (1):
PGIM
$
404
$
288
$
1,262
$
998
U.S. Businesses:
U.S. Workplace Solutions division
451
342
1,420
1,586
U.S. Individual Solutions division
375
508
1,422
1,930
Assurance IQ division (2)
(19
)
(9
)
(88
)
(9
)
Total U.S. Businesses
807
841
2,754
3,507
International Businesses
790
748
2,952
3,112
Corporate and Other
(486
)
(738
)
(1,824
)
(1,766
)
Total adjusted operating income before
income taxes
$
1,515
$
1,139
$
5,144
$
5,851
Reconciling Items:
Realized investment gains (losses), net,
and related charges and adjustments
$
(1,216
)
$
73
$
(4,315
)
$
(958
)
Market experience updates
376
66
(640
)
(449
)
Divested and Run-off Businesses:
Closed Block division
(9
)
31
(24
)
36
Other Divested and Run-off Businesses
96
114
(629
)
755
Equity in earnings of operating joint
ventures and earnings attributable to noncontrolling interests
152
(32
)
90
(103
)
Other adjustments (3)
(14
)
(47
)
51
(47
)
Total reconciling items, before income
taxes
(615
)
205
(5,467
)
(766
)
Income (loss) before income taxes and
equity in earnings of operating joint ventures
$
900
$
1,344
$
(323
)
$
5,085
Income Statement Data:
Net income (loss) attributable to
Prudential Financial, Inc.
$
819
$
1,128
$
(374
)
$
4,186
Income attributable to noncontrolling
interests
203
10
228
52
Net income (loss)
1,022
1,138
(146
)
4,238
Less: Earnings attributable to
noncontrolling interests
203
10
228
52
Income (loss) attributable to
Prudential Financial, Inc.
819
1,128
(374
)
4,186
Less: Equity in earnings of operating
joint ventures, net of taxes and earnings attributable to
noncontrolling interests
(169
)
5
(132
)
48
Income (loss) (after-tax) before equity
in earnings of operating joint ventures
988
1,123
(242
)
4,138
Less: Total reconciling items, before
income taxes
(615
)
205
(5,467
)
(766
)
Less: Income taxes, not applicable to
adjusted operating income
(420
)
(3
)
(1,114
)
(248
)
Total reconciling items, after income
taxes
(195
)
208
(4,353
)
(518
)
After-tax adjusted operating income
(1)
1,183
915
4,111
4,656
Income taxes, applicable to adjusted
operating income
332
224
1,033
1,195
Adjusted operating income before income
taxes (1)
$
1,515
$
1,139
$
5,144
$
5,851
See footnotes on last page.
Financial Highlights
(in millions, except per share data,
unaudited)
Three Months Ended
Year Ended
December 31
December 31
2020
2019
2020
2019
Earnings per share of Common Stock
(diluted):
Net income (loss) attributable to
Prudential Financial, Inc.
$
2.03
$
2.76
$
(1.00
)
$
10.11
Less: Reconciling Items:
Realized investment gains (losses), net,
and related charges and adjustments
(3.05
)
0.18
(10.85
)
(2.33
)
Market experience updates
0.94
0.16
(1.61
)
(1.09
)
Divested and Run-off Businesses:
Closed Block division
(0.02
)
0.08
(0.06
)
0.09
Other Divested and Run-off Businesses
0.24
0.28
(1.58
)
1.84
Difference in earnings allocated to
participating unvested share-based payment awards
0.01
—
0.07
0.01
Other adjustments (3)
(0.04
)
(0.12
)
0.13
(0.11
)
Total reconciling items, before income
taxes
(1.92
)
0.58
(13.90
)
(1.59
)
Less: Income taxes, not applicable to
adjusted operating income
(1.02
)
0.06
(2.69
)
(0.46
)
Total reconciling items, after income
taxes
(0.90
)
0.52
(11.21
)
(1.13
)
After-tax adjusted operating
income
$
2.93
$
2.24
$
10.21
$
11.24
Weighted average number of outstanding
common shares (basic)
396.2
400.7
395.8
404.8
Weighted average number of outstanding
common shares (diluted)
398.3
403.7
397.8
410.9
For earnings per share of Common Stock
calculation:
Net income (loss) attributable to
Prudential Financial, Inc.
$
819
$
1,128
$
(374
)
$
4,186
Earnings related to interest, net of tax,
on exchangeable surplus notes
—
—
—
12
Less: Earnings allocated to participating
unvested share-based payment awards
10
12
21
45
Net income (loss) attributable to
Prudential Financial, Inc. for earnings per share of Common Stock
calculation
$
809
$
1,116
$
(395
)
$
4,153
After-tax adjusted operating income
(1)
$
1,183
$
915
$
4,111
$
4,656
Earnings related to interest, net of tax,
on exchangeable surplus notes
—
—
—
12
Less: Earnings allocated to participating
unvested share-based payment awards
14
11
50
53
After-tax adjusted operating income for
earnings per share of Common Stock calculation (1)
$
1,169
$
904
$
4,061
$
4,615
Prudential Financial, Inc. Equity (as
of end of period):
GAAP book value (total PFI equity) at end
of period
$
67,425
$
63,115
Less: Accumulated other comprehensive
income (AOCI)
30,738
24,039
GAAP book value excluding AOCI
36,687
39,076
Less: Cumulative effect of foreign
exchange rate remeasurement and currency
translation adjustments corresponding to
realized gains/losses
(1,399
)
(1,835
)
Adjusted book value
38,086
40,911
End of period number of common shares
(diluted)
401.8
404.9
GAAP book value per common share -
diluted
167.81
155.88
GAAP book value excluding AOCI per share -
diluted
91.31
96.51
Adjusted book value per common share -
diluted
94.79
101.04
See footnotes on last page.
Financial Highlights
(in millions, or as otherwise noted,
unaudited)
Three Months Ended
Year Ended
December 31
December 31
2020
2019
2020
2019
PGIM:
PGIM:
Assets Managed by PGIM (in billions, as of
end of period):
Institutional customers
$
614.9
$
552.8
Retail customers (4)
372.0
305.6
General account
511.7
472.6
Total PGIM
$
1,498.6
$
1,331.0
Institutional Customers - Assets Under
Management (in billions):
Gross additions, other than money
market
$
16.9
$
16.4
$
68.4
$
60.8
Net additions (withdrawals), other than
money market
$
2.5
$
0.7
$
3.0
$
(6.5
)
Retail Customers - Assets Under Management
(in billions):
Gross additions, other than money
market
$
24.6
$
19.6
$
95.0
$
61.2
Net additions, other than money market
$
3.8
$
1.2
$
17.2
$
5.7
U.S. Workplace Solutions
Division:
Retirement:
Full Service:
Deposits and sales
$
11,802
$
8,322
$
40,914
$
36,394
Net additions (withdrawals)
$
2,323
$
(262
)
$
6,262
$
688
Total account value at end of period
$
315,227
$
272,448
Institutional Investment Products:
Gross additions
$
8,251
$
8,575
$
22,469
$
31,101
Net additions
$
3,189
$
4,268
$
4,181
$
14,358
Total account value at end of period
$
243,387
$
227,596
Group Insurance:
Group Insurance Annualized New Business
Premiums (5):
Group life
$
16
$
21
$
243
$
254
Group disability
20
6
163
159
Total
$
36
$
27
$
406
$
413
U.S. Individual Solutions
Division:
Individual Annuities:
Fixed and Variable Annuity Sales and
Account Values:
Gross sales
$
1,980
$
2,081
$
6,815
$
9,720
Sales, net of full surrenders and death
benefits
$
(125
)
$
(388
)
$
(1,030
)
$
346
Total account value at end of period
$
176,280
$
169,681
Individual Life:
Individual Life Insurance Annualized New
Business Premiums (5):
Term life
$
34
$
47
$
148
$
200
Guaranteed universal life
11
26
94
95
Other universal life
18
42
91
155
Variable life
176
94
449
278
Total
$
239
$
209
$
782
$
728
International Businesses:
International Businesses:
International Businesses Annualized New
Business Premiums (5)(6):
Actual exchange rate basis
$
440
$
546
$
2,190
$
2,310
Constant exchange rate basis
$
454
$
550
$
2,240
$
2,325
See footnotes on last page.
Financial Highlights
(in billions, as of end of period,
unaudited)
December 31
2020
2019
Assets and Assets Under Management and
Administration:
Total assets
$
940.7
$
896.6
Assets under management (at fair market
value):
PGIM (4)
1,498.6
1,331.0
U.S. Businesses:
U.S. Workplace Solutions division
102.9
91.6
U.S. Individual Solutions division (4)
105.1
115.5
Total U.S. Businesses
208.0
207.1
International Businesses
14.3
12.8
Total assets under management
1,720.9
1,550.9
Client assets under administration
341.7
291.6
Total assets under management and
administration
$
2,062.6
$
1,842.5
See footnotes on last page.
(1)
Adjusted operating income is a non-GAAP
measure of performance. See FORWARD-LOOKING STATEMENTS AND NON-GAAP
MEASURES within the earnings release for additional information.
Adjusted operating income, when presented at the segment level, is
also a segment performance measure. This segment performance
measure, while not a traditional U.S. GAAP measure, is required to
be disclosed by U.S. GAAP in accordance with FASB Accounting
Standard Codification (ASC) 280 – Segment Reporting. When presented
by segment, we have prepared the reconciliation of adjusted
operating income to the corresponding consolidated U.S. GAAP total
in accordance with the disclosure requirements as articulated in
ASC 280.
(2)
Assurance IQ was acquired in October of
2019.
(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.
(4)
Effective first quarter of 2020, certain
assets have been reclassified from U.S. Individual Solutions
division to PGIM. Prior period amounts have been reclassified to
conform to current period presentation.
(5)
Premiums from new sales are expected to be
collected over a one-year period. Group insurance annualized new
business premiums exclude new premiums resulting from rate changes
on existing policies, from additional coverage issued under our
Servicemembers' Group Life Insurance contract, and from excess
premiums on group universal life insurance that build cash value
but do not purchase face amounts. Group insurance annualized new
business premiums include premiums from the takeover of claim
liabilities. Excess (unscheduled) and single premium business for
the Company's domestic individual life and international operations
are included in annualized new business premiums based on a 10%
credit.
(6)
Actual amounts reflect the impact of
currency fluctuations. Constant amounts reflect foreign denominated
activity translated to U.S. dollars at uniform exchange rates for
all periods presented, including Japanese yen 104 per U.S. dollar.
U.S. dollar-denominated activity is included based on the amounts
as transacted in U.S. dollars.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210204006016/en/
MEDIA CONTACT: Bill Launder, (973) 802-8760,
bill.launder@prudential.com
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