Prudential 2011 Annual Report Download - page 3

Prudential Financial, Inc. 2011 Annual Report 1
Dear fellow shareholders:
Over the past few years, dramatic events have challenged the global fi nancial system
with wide-ranging repercussions, affecting businesses and individuals alike. 2011
was no exception, but I am pleased to report that in this year of continued market
volatility, Prudential has distinguished itself in the markets we serve for the benefi t of
our customers and our shareholders.
Consistent with our commitment to provide long-term shareholder value, our company
delivered solid earnings and our highest-ever dividend. Our businesses continued to
demonstrate their strength through powerful sales and growth momentum. Our capital
position remains strong, providing us fl exibility to act opportunistically in pursuit of
profi table, sustainable growth.
Each year, we underscore four main contributors to our success as a company.
1. Our strategic portfolio of businesses, which has been achieved by active design,
represents a powerful blend of growth and stability.
2. Our businesses’ high quality is due to strong leadership, fundamentals, risk
management and positioning in their respective geographic and demographic markets.
3. Our fi nancial strength provides not only protection to meet our promises, but
freedom to grow our businesses and to innovate as we anticipate our clients’
evolving needs.
4. Our focus on talent and culture serves as a competitive differentiator and
supports our enterprise-wide emphasis on ethics and integrity.
This year, our progress and achievement in each of these pillars has rewarded
us with solid results.
Our Financial Services Businesses reported net income for 2011 of $3.531 billion, or
$7.22 per share of Common Stock, compared to $2.714 billion or $5.75 per share of
Common Stock in 2010. On an after-tax adjusted operating income basis,* our Financial
Services Businesses earned $3.134 billion in 2011, or $6.41 per share of Common
Stock, compared to $2.916 billion or $6.17 per share of Common Stock in 2010.
We continue to gain ground and enhance our competitive position relative to our
peers. This success refl ects the strength of our portfolio, the strength of our business,
the strength of our fi nancial position, and the strength of our people. I am proud of
the work we do as a company, and the way in which we do it.
Achieving an Optimal Business Portfolio
Under our strong, widely recognized brand, Prudential maintains a strategic mix
of attractive, well-led businesses whose products, services, and risks complement
one another.
By diversifying our portfolio of businesses across geographic and demographic
markets, we diversify our risks, mitigating the vulnerability of the company’s
overall results and capital position to any particular element of risk, including
interest rate levels and equity market risks.
For example, as of year-end 2011, we had approximately $3.6 trillion of gross life
insurance in force worldwide. The mortality risk of life insurance helps balance the
risks of our other products, such as the longevity risk of variable annuities and group
annuities. Our balanced mix of businesses enables Prudential to provide fi nancial
growth and protection to clients at all stages of their lives.
MESSAGE FROM THE CHAIRMAN
* Adjusted operating income is not calculated under U.S. generally accepted accounting principles (GAAP) and is a
fi nancial measure we use to analyze the operating performance of our Financial Services Businesses. See footnote (1)
on page 5 and footnote (A) on page 7 for a further description of adjusted operating income.
“We underscore four
contributors to our
success as a company.
Our strategic portfolio
of businesses.
The quality of
our businesses.
Our fi nancial strength.
Our focus on talent
and culture.”
JOHN STRANGFELD