Prudential 2011 Annual Report Download - page 29

Consolidated Results of Operations
The following table summarizes net income (loss) for the Financial Services Businesses and the Closed Block Business for the periods
presented.
Year ended December 31,
2011 2010 2009
(in millions)
Financial Services Businesses by segment:
Individual Annuities .............................................................................. $2,018 $ 1,019 $ 621
Retirement ..................................................................................... 956 687 376
Asset Management ............................................................................... 756 529 9
Total U.S. Retirement Solutions and Investment Management Division ................................. 3,730 2,235 1,006
Individual Life .................................................................................. 496 461 696
Group Insurance ................................................................................. 265 193 97
Total U.S. Individual Life and Group Insurance Division ............................................. 761 654 793
International Insurance ............................................................................ 2,986 1,644 1,095
Total International Insurance Division ............................................................ 2,986 1,644 1,095
Corporate and Other .............................................................................. (2,557) (866) (890)
Income from continuing operations before income taxes and equity in earnings of operating joint ventures for Financial
Services Businesses ................................................................................ 4,920 3,667 2,004
Income tax expense .............................................................................. 1,537 1,058 131
Income from continuing operations before equity in earnings of operating joint ventures for Financial Services
Businesses ....................................................................................... 3,383 2,609 1,873
Equity in earnings of operating joint ventures, net of taxes ................................................ 185 84 1,523
Income from continuing operations for Financial Services Businesses ........................................... 3,568 2,693 3,396
Income (loss) from discontinued operations, net of taxes ................................................. 35 32 (19)
Net income—Financial Services Businesses ............................................................... 3,603 2,725 3,377
Less: Income (loss) attributable to noncontrolling interests .................................................... 72 11 (34)
Net income of Financial Services Businesses attributable to Prudential Financial, Inc. .............................. $3,531 $ 2,714 $ 3,411
Basic income from continuing operations attributable to Prudential Financial, Inc. per share—Common Stock ........... $ 7.23 $ 5.75 $ 7.72
Diluted income from continuing operations attributable to Prudential Financial, Inc. per share—Common Stock ......... $ 7.14 $ 5.68 $ 7.67
Basic net income attributable to Prudential Financial, Inc. per share—Common Stock .............................. $ 7.31 $ 5.82 $ 7.68
Diluted net income attributable to Prudential Financial, Inc. per share—Common Stock ............................ $ 7.22 $ 5.75 $ 7.63
Closed Block Business:
Income (loss) from continuing operations before income taxes for Closed Block Business ........................... $ 197 $ 725 $ (480)
Income tax expense (benefit) ........................................................................... 62 245 (193)
Income (loss) from continuing operations for Closed Block Business ........................................... 135 480 (287)
Income from discontinued operations, net of taxes .......................................................... 0 1 0
Net income (loss)—Closed Block Business ................................................................ 135 481 (287)
Less: Income attributable to noncontrolling interests ........................................................ 0 0 0
Net income (loss) of Closed Block Business attributable to Prudential Financial, Inc. ............................... $ 135 $ 481 $ (287)
Basic and diluted income (loss) from continuing operations attributable to Prudential Financial, Inc. per share—Class B
Stock ............................................................................................ $55.50 $222.00 $(165.00)
Basic and diluted net income (loss) attributable to Prudential Financial, Inc. per share—Class B Stock ................. $55.50 $222.50 $(165.00)
Consolidated:
Net income attributable to Prudential Financial, Inc. ......................................................... $3,666 $ 3,195 $ 3,124
Results of Operations—Financial Services Businesses
2011 to 2010 Annual Comparison. Income from continuing operations for the Financial Services Businesses increased $875 million,
from $2,693 million in 2010 to $3,568 million in 2011. Results for 2011 compared to 2010 reflect the following:
• Higher net pre-tax earnings resulting from the impact of foreign currency exchange rate movements on certain non-yen
denominated assets and liabilities within our Japanese insurance operations, for which we economically hedge the foreign currency
exposure, driven by the strengthening of the yen during 2011;
• Higher net pre-tax gains associated with our general account portfolio, excluding the impact of the hedging program associated with
certain variable annuities as described below, primarily reflecting higher gains from changes in the market value of derivatives used
to manage the investment portfolio duration resulting from declining interest rates in 2011, and higher gains from changes in the
market value of currency derivatives due to foreign currency exchange rate movements;
• A $237 million pre-tax benefit in 2011 compared to a $66 million pre-tax benefit in 2010 on sales of portions of our indirect interest
in China Pacific Insurance (Group) Co., Ltd;
• A $96 million pre-tax gain on the sale of our investment in Afore XXI, an operating joint venture in our International Insurance
segment; and
• A net increase in premiums and policy charges and fee income, net of an increase in policyholders’ benefits, including changes in
reserves, reflecting business growth, as well as the impact of favorable currency fluctuations, in our International Insurance
operations.
Prudential Financial, Inc. 2011 Annual Report 27