- Fourth quarter 2019 net income attributable to Prudential
Financial, Inc. of $1.128 billion or $2.76 per Common share versus
$842 million or $1.99 per share for the year-ago quarter.
- Fourth quarter 2019 after-tax adjusted operating income of $950
million or $2.33 per Common share versus $1.035 billion or $2.44
per share for the year-ago quarter.
- Net income attributable to Prudential Financial, Inc. for 2019
of $4.186 billion or $10.11 per Common share versus $4.074 billion
or $9.50 per share for 2018.
- After-tax adjusted operating income of $4.845 billion or $11.69
per Common share for 2019 versus $5.019 billion or $11.69 per share
for 2018.
- Book value per Common share of $155.88 versus $116.34 per share
for the year-ago; adjusted book value per Common share of $101.04
versus $96.06 per share for the year-ago.
- Capital returned to shareholders of $906 million in the quarter
versus $752 million for the year-ago quarter, including dividends
of $1.00 per Common share.
- Parent company highly liquid assets of $4.1 billion versus $5.5
billion for the year-ago.
- Assets under management amounted to $1.551 trillion versus
$1.377 trillion for the year-ago.
- Today, the Company declared a quarterly dividend of $1.10 per
share of Common stock, payable on March 12, 2020, to shareholders
of record as of February 18, 2020, representing an increase of 10%
over the prior year dividend level and a 4.4% annualized yield on
adjusted book value.
Charles Lowrey, Chairman and CEO, commented on results:
“During the fourth quarter, we made significant progress against
our strategy to provide financial opportunity to more people and
drive greater efficiency across our operations. For the year, we
returned approximately $4 billion to our shareholders and generated
an adjusted operating return on equity within our 12-14% target.
Looking ahead, we remain focused on enhancing our customer
experience while delivering on our cost savings initiative,
increasing the percentage of earnings in international growth
markets, and taking actions to mitigate the effect of low interest
rates, which we expect will result in future earnings growth.”
Prudential Financial, Inc. (NYSE:PRU) today reported fourth
quarter and year-end 2019 results. For the fourth quarter of 2019,
net income attributable to Prudential Financial, Inc. was $1.128
billion ($2.76 per Common share), compared to $842 million ($1.99
per Common share) for the fourth quarter of 2018. After-tax
adjusted operating income was $950 million ($2.33 per Common share)
for the fourth quarter of 2019, compared to $1.035 billion ($2.44
per Common share) for the fourth quarter of 2018.
Net income attributable to Prudential Financial, Inc. was $4.186
billion ($10.11 per Common share) for 2019, compared to $4.074
billion ($9.50 per Common share) for 2018. After-tax adjusted
operating income was $4.845 billion ($11.69 per Common share) for
2019, compared to $5.019 billion ($11.69 per Common share) for
2018.
Consolidated adjusted operating income, adjusted book value, and
adjusted operating return on equity 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 adjusted operating income of $288 million in the
fourth quarter of 2019, compared to $243 million in the year-ago
quarter. The increase reflects higher asset management fees, from
an increase in average assets under management driven by market
appreciation and fixed income net flows, and higher Other Related
Revenue, driven by higher incentive fees and strategic investment
earnings, partially offset by higher expenses.
PGIM assets under management of $1.308 trillion, a record high,
were up 13% from the year-ago quarter, reflecting market
appreciation and fixed income inflows, partially offset by equity
outflows.
U.S. Businesses
U.S. Businesses reported adjusted operating income of
$841 million for the fourth quarter of 2019, compared to $668
million in the year-ago quarter. The increase reflects higher net
investment spread results and an unfavorable impact from changes in
market conditions on estimates of profitability in the year-ago
quarter, partially offset by lower net fee income.
U.S. Workplace Solutions, consisting of Retirement and
Group Insurance, reported adjusted operating income of $342 million
for the fourth quarter of 2019, compared to $249 million in the
year-ago quarter.
Retirement:
- Reported adjusted operating income of $281 million in the
current quarter, compared to $216 million in the year-ago quarter.
The increase reflects higher net investment spread results.
- Account values of $500 billion, a record high, were up 16% from
the year-ago quarter, reflecting market appreciation and net flows
over the year. Net inflows in the current quarter totaled $4.0
billion with $4.3 billion from Institutional Investment Products,
primarily from pension risk transfer transactions, partially offset
by $0.3 billion of Full Service net outflows.
Group Insurance:
- Reported adjusted operating income of $61 million in the
current quarter, compared to $33 million in the year-ago quarter.
The increase reflects higher net investment spread results and more
favorable underwriting results.
- Reported earned premiums, policy charges, and fees of $1.2
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 $508 million for the fourth quarter of 2019, compared to $419
million in the year-ago quarter.
Individual Annuities:
- Reported adjusted operating income of $450 million in the
current quarter, compared to $445 million in the year-ago quarter.
The increase reflects higher net investment spread results and an
unfavorable impact from changes in market conditions on estimates
of profitability in the year-ago quarter, partially offset by lower
fee income, net of distribution expenses and other associated
costs.
- Account values of $170 billion, a record high, were up 12% from
the year-ago quarter, reflecting market appreciation over the year,
partially offset by net outflows. Gross sales of $2.1 billion in
the current quarter reflect our continued diversification strategy
with 65% of sales coming from less equity market sensitive
products.
Individual Life:
- Reported adjusted operating income of $58 million in the
current quarter, compared to a loss of $26 million in the year-ago
quarter. The increase reflects an unfavorable impact from changes
in market conditions on estimates of profitability in the year-ago
quarter and higher net investment spread results, partially offset
by less favorable underwriting results.
- Sales of $209 million in the current quarter were up 8% from
the year-ago quarter, primarily reflecting higher variable life
sales.
Assurance IQ was acquired in October of 2019 and reported
a loss, on an adjusted operating income basis, of $9 million in the
current quarter.
International Businesses
International Businesses, consisting of Life Planner and
Gibraltar Life & Other, reported adjusted operating income of
$797 million for the fourth quarter of 2019, compared to $736
million in the year-ago quarter. The increase reflects higher net
investment spread results, business growth, and an unfavorable
impact from changes in market conditions on estimates of
profitability in the year-ago quarter. These items were partially
offset by higher expenses.
Life Planner:
- Reported adjusted operating income of $394 million in the
current quarter, compared to $349 million in the year-ago quarter.
The increase reflects business growth, higher net investment spread
results, an unfavorable impact from changes in market conditions on
estimates of profitability in the year-ago quarter, and more
favorable underwriting results. These items were partially offset
by higher expenses.
- Constant dollar basis sales of $379 million in the current
quarter were up 17% from the year-ago quarter, driven by our Korea,
Taiwan, and Brazil operations.
Gibraltar Life & Other:
- Reported adjusted operating income of $403 million in the
current quarter, compared to $387 million in the year-ago quarter.
The increase primarily reflects higher net investment spread
results, partially offset by higher expenses.
- Constant dollar basis sales of $283 million in the current
quarter were down 14% from the year-ago quarter, primarily
reflecting lower U.S. dollar-denominated fixed annuity sales in the
Life Consultant channel.
Corporate & Other
Corporate & Other reported a loss, on an adjusted
operating income basis, of $738 million in the fourth quarter of
2019, compared to a loss of $329 million in the year-ago quarter.
The higher loss from the year-ago quarter reflects higher expenses,
primarily related to the Company's Voluntary Separation
Program.
NET INCOME
Net income in the current quarter included $133 million
of pre-tax net realized investment gains and related charges and
adjustments, including $58 million of credit loss impairments, and
$60 million of pre-tax gains related to market experience
updates.
Net income for the year-ago quarter included $264 million of
pre-tax net realized investment losses and related charges and
adjustments, including $119 million from impairments and sales of
credit-impaired investments.
FORWARD-LOOKING STATEMENTS AND NON-GAAP MEASURES(1)
Certain of the statements included in this release, including
those regarding enhancing our customer experience, our cost savings
initiative, earnings in international growth markets and actions to
mitigate low interest rates, 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 enhancing our customer
experience, our cost savings initiative, earnings in international
growth markets and actions to mitigate low interest rates are
subject to the risk that we will be unable to execute our strategy
because of market or competitive conditions or other factors.
Prudential Financial, Inc. does not undertake to update any
particular forward-looking statement included in this document.
Consolidated adjusted operating income, adjusted book value, and
adjusted operating return on equity 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.
Adjusted return on equity is a useful measure of the operating
return the Company achieves in relation to the capital available to
our businesses. However, these non-GAAP measures are not
substitutes for income, equity, and return on 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 Wednesday, February 5, 2020, 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. The call will remain on the Investor Relations website
for replay through February 19. 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. To listen to a replay of the conference
call starting at 4:00 p.m. ET on February 5 through February 12,
dial (866) 207-1041 (domestic) or (402) 970-0847 (international)
and use replay code 8370457.
(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. However, the effectiveness
of our hedging program will ultimately be reflected in adjusted
operating income over time. 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 operating return on equity is equal to the
annualized year-to-date after-tax adjusted operating income divided
by the average adjusted book value. Return on equity based on GAAP
balances is calculated using after-tax net income and equity.
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, 2019,
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
2019
2018
2019
2018
Adjusted operating income (loss) before
income taxes (1):
PGIM
$
288
$
243
$
998
$
959
U.S. Businesses:
U.S. Workplace Solutions division
342
249
1,586
1,278
U.S. Individual Solutions division
508
419
1,930
2,148
Assurance IQ division
(9
)
—
(9
)
—
Total U.S. Businesses
841
668
3,507
3,426
International Businesses
797
736
3,359
3,266
Corporate and Other
(738
)
(329
)
(1,766
)
(1,283
)
Total adjusted operating income before
income taxes
$
1,188
$
1,318
$
6,098
$
6,368
Reconciling Items:
Realized investment gains (losses), net,
and related charges and adjustments (2)
$
133
$
(264
)
$
(889
)
$
150
Market experience updates
60
—
(462
)
—
Divested and Run-off Businesses:
Closed Block division
31
(40
)
36
(62
)
Other Divested and Run-off Businesses
11
51
452
(1,535
)
Equity in earnings of operating joint
ventures and earnings attributable to noncontrolling interests
(32
)
(12
)
(103
)
(87
)
Other adjustments (3)
(47
)
—
(47
)
—
Total reconciling items, before income
taxes
156
(265
)
(1,013
)
(1,534
)
Income before income taxes and equity
in earnings of operating joint ventures
$
1,344
$
1,053
$
5,085
$
4,834
Income Statement Data:
Net income attributable to Prudential
Financial, Inc.
$
1,128
$
842
$
4,186
$
4,074
Income attributable to noncontrolling
interests
10
7
52
14
Net income
1,138
849
4,238
4,088
Less: Earnings attributable to
noncontrolling interests
10
7
52
14
Income attributable to Prudential
Financial, Inc.
1,128
842
4,186
4,074
Less: Equity in earnings of operating
joint ventures, net of taxes and earnings attributable to
noncontrolling interests
5
7
48
62
Income (after-tax) before equity in
earnings of operating joint ventures
1,123
835
4,138
4,012
Less: Total reconciling items, before
income taxes
156
(265
)
(1,013
)
(1,534
)
Less: Income taxes, not applicable to
adjusted operating income
(17
)
(65
)
(306
)
(527
)
Total reconciling items, after income
taxes
173
(200
)
(707
)
(1,007
)
After-tax adjusted operating income
(1)
950
1,035
4,845
5,019
Income taxes, applicable to adjusted
operating income
238
283
1,253
1,349
Adjusted operating income before income
taxes (1)
$
1,188
$
1,318
$
6,098
$
6,368
See footnotes on last page.
Financial Highlights
(in millions, except per share data,
unaudited)
Three Months Ended
Year Ended
December 31
December 31
2019
2018
2019
2018
Earnings per share of Common Stock
(diluted):
Net income attributable to Prudential
Financial, Inc.
$
2.76
$
1.99
$
10.11
$
9.50
Less: Reconciling Items:
Realized investment gains (losses), net,
and related charges and adjustments (2)
0.33
(0.63
)
(2.16
)
0.36
Market experience updates
0.15
—
(1.12
)
—
Divested and Run-off Businesses:
Closed Block division
0.08
(0.09
)
0.09
(0.15
)
Other Divested and Run-off Businesses
0.03
0.12
1.10
(3.60
)
Difference in earnings allocated to
participating unvested share-based payment awards
—
0.01
0.02
0.03
Other adjustments (3)
(0.12
)
—
(0.11
)
—
Total reconciling items, before income
taxes
0.47
(0.59
)
(2.18
)
(3.36
)
Less: Income taxes, not applicable to
adjusted operating income
0.04
(0.14
)
(0.60
)
(1.17
)
Total reconciling items, after income
taxes
0.43
(0.45
)
(1.58
)
(2.19
)
After-tax adjusted operating
income
$
2.33
$
2.44
$
11.69
$
11.69
Weighted average number of outstanding
common shares (basic)
400.7
412.7
404.8
417.6
Weighted average number of outstanding
common shares (diluted)
403.7
421.2
410.9
426.2
For earnings per share of Common Stock
calculation:
Net income attributable to Prudential
Financial, Inc.
$
1,128
$
842
$
4,186
$
4,074
Earnings related to interest, net of tax,
on exchangeable surplus notes
—
5
12
21
Less: Earnings allocated to participating
unvested share-based payment awards
12
10
45
47
Net income attributable to Prudential
Financial, Inc. for earnings per share of Common Stock
calculation
$
1,116
$
837
$
4,153
$
4,048
After-tax adjusted operating income
(1)
$
950
$
1,035
$
4,845
$
5,019
Earnings related to interest, net of tax,
on exchangeable surplus notes
—
5
12
21
Less: Earnings allocated to participating
unvested share-based payment awards
11
13
53
58
After-tax adjusted operating income for
earnings per share of Common Stock calculation (1)
$
939
$
1,027
$
4,804
$
4,982
Prudential Financial, Inc. Equity (as
of end of period):
GAAP book value (total PFI equity) at end
of period
$
63,115
$
48,617
Less: Accumulated other comprehensive
income (AOCI)
24,039
10,906
GAAP book value excluding AOCI
39,076
37,711
Less: Cumulative effect of foreign
exchange rate remeasurement and currency
translation adjustments corresponding to
realized gains/losses
(1,835
)
(2,344
)
Adjusted book value
40,911
40,055
End of period number of common shares
(diluted) (4)
404.9
422.2
GAAP book value per common share - diluted
(5)
155.88
116.34
GAAP book value excluding AOCI per share -
diluted (5)
96.51
90.50
Adjusted book value per common share -
diluted (5)
101.04
96.06
See footnotes on last page.
Financial Highlights
(in millions, or as otherwise noted,
unaudited)
Three Months Ended
Year Ended
December 31
December 31
2019
2018
2019
2018
PGIM:
PGIM:
Assets Managed by PGIM (in billions, as of
end of period):
Institutional customers
$
552.8
$
493.5
Retail customers
282.8
240.1
General account
472.6
427.8
Total PGIM
$
1,308.2
$
1,161.4
Institutional Customers - Assets Under
Management (in billions):
Gross additions, other than money
market
$
16.4
$
18.9
$
60.8
$
75.1
Net additions (withdrawals), other than
money market
$
0.7
$
(0.5
)
$
(6.5
)
$
14.1
Retail Customers - Assets Under Management
(in billions):
Gross additions, other than money
market
$
19.6
$
14.1
$
61.2
$
53.0
Net additions (withdrawals), other than
money market
$
1.2
$
(2.6
)
$
5.7
$
(0.4
)
U.S. Workplace Solutions
Division:
Retirement:
Full Service:
Deposits and sales
$
8,322
$
6,639
$
36,394
$
33,116
Net additions (withdrawals)
$
(262
)
$
697
$
688
$
6,686
Total account value at end of period
$
272,448
$
231,669
Institutional Investment Products:
Gross additions
$
8,575
$
8,843
$
31,101
$
21,310
Net additions
$
4,268
$
5,519
$
14,358
$
5,901
Total account value at end of period
$
227,596
$
200,759
Group Insurance:
Group Insurance Annualized New Business
Premiums (6):
Group life
$
21
$
24
$
254
$
376
Group disability
6
13
159
183
Total
$
27
$
37
$
413
$
559
U.S. Individual Solutions
Division:
Individual Annuities:
Fixed and Variable Annuity Sales and
Account Values:
Gross sales
$
2,081
$
2,238
$
9,720
$
8,270
Sales, net of full surrenders and death
benefits
$
(388
)
$
181
$
346
$
(688
)
Total account value at end of period
$
169,681
$
151,080
Individual Life:
Individual Life Insurance Annualized New
Business Premiums (6):
Term life
$
47
$
55
$
200
$
213
Guaranteed universal life
26
29
95
97
Other universal life
42
51
155
150
Variable life
94
58
278
163
Total
$
209
$
193
$
728
$
623
International Businesses:
International Businesses:
International Businesses Annualized New
Business Premiums (6)(7):
Actual exchange rate basis
$
651
$
642
$
2,605
$
2,740
Constant exchange rate basis
$
662
$
651
$
2,639
$
2,752
See footnotes on last page.
Financial Highlights
(in billions, as of end of period,
unaudited)
Three Months Ended
December 31
2019
2018
Assets and Assets Under Management
Information:
Total assets
$
896.6
$
815.1
Assets under management (at fair market
value):
PGIM
1,308.2
1,161.4
U.S. Businesses:
U.S. Workplace Solutions division
91.6
86.1
U.S. Individual Solutions division
118.4
100.4
Total U.S. Businesses
210.0
186.5
International Businesses
32.7
29.4
Total assets under management
1,550.9
1,377.3
Client assets under administration
291.6
233.3
Total assets under management and
administration
$
1,842.5
$
1,610.6
(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)
Realized investment gains
(losses), net, and related charges and adjustments now includes
results previously disclosed as investment gains (losses) on assets
supporting experience rated contractholder liabilities, net and
change in experience rated contractholder liabilities due to asset
value changes. Prior periods have been reclassified to conform to
current period presentation.
(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)
Diluted shares as of December 31,
2018 include 6.1 million shares due to the dilutive impact of
conversion of exchangeable surplus notes (“ESNs”) when book value
per common share (i.e., book value per common share, book value
excluding AOCI per common share, and adjusted book value per common
share) is greater than $82.16. The $500 million of ESNs were
converted into 6.2 million shares of Common Stock in the third
quarter of 2019.
(5)
The exchangeable surplus notes
are subject to customary antidilution adjustments and the exchange
rate is accordingly revalued. In order to calculate book value per
common share as of December 31, 2018, equity is increased by $500
million and diluted shares include 6.1 million shares reflecting
the dilutive impact of ESNs when book value per common share is
greater than $82.16. The $500 million of ESNs were converted into
6.2 million shares of Common Stock in the third quarter of
2019.
(6)
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.
(7)
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 105 per
U.S. dollar and Korean won 1,110 per U.S. dollar. U.S.
dollar-denominated activity is included based on the amounts as
transacted in U.S. dollars.
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version on businesswire.com: https://www.businesswire.com/news/home/20200204005980/en/
MEDIA: Bill Launder, (973) 802-8760,
bill.launder@prudential.com
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