Prudential 2012 Annual Report Download - page 3

Prudential Financial, Inc. 2012 Annual Report 1
Dear fellow shareholders:
In 2012, companies in many industries continued to face challenges from a variety of
external forces, including low interest rates, currency fluctuations, market volatility and
regulatory uncertainty. Despite these challenges, I am pleased to report that Prudential
continued to perform well. Our market position and the foundation of our businesses remain
strong. We have demonstrated, once again, that we have the financial strength and the
flexibility to pursue opportunities that further strengthen our competitive standing and provide
a platform for future growth.
For the year, our businesses delivered solid earnings. We also completed several significant
transactions, which grew the scale of our operations and positioned us well for the future. In
November, we announced our highest-ever dividend to shareholders. These and other actions
throughout the year demonstrated our continued focus on deploying our capital prudently,
maintaining a strategic mix of high-quality businesses, managing risk effectively, and pursuing
profitable growth for the long term.
Our strong performance validates our focus on four overarching characteristics that continue
to drive Prudential’s success:
1. Our portfolio of businesses has been developed by choice and design, as we have made
deliberate decisions to enter markets in which we have strength and see opportunity. The
complementary nature of our operations provides a mix of growth and stability, helping
balance risk across the company.
2. Our businesses are high-quality, well-led and well-positioned in the markets in which
we operate.
3. Our financial strength remains a hallmark of the company. It enables us to seize
opportunities and grow, while continuing to deliver on our promises.
4. Our emphasis on integrity, talent and promoting a diverse and inclusive culture helps us
continue to attract, develop and retain high-quality people, who remain our most important
competitive advantage.
For the year, core earnings improved for most of our businesses and our underlying operating
performance was solid. Our business fundamentals remain sound, as shown by our strong
sales, net flows and market momentum.
On an after-tax adjusted operating income basis,* our Financial Services Businesses earned
$2.958 billion, or $6.27 per share of Common Stock, compared to $2.845 billion, or $5.83
per share of Common Stock in 2011. Our Financial Services Businesses reported net income
of $428 million, or 94 cents per share of Common Stock, in 2012, compared to $3.42 billion,
or $6.99 per share of Common Stock in 2011.
We achieved a significant milestone with our worldwide assets under management topping
$1 trillion. This is more than just an impressive number. It is a clear reflection of the
confidence our clients continue to place in Prudential. And it is especially gratifying given
the unsettled market environment of the past several years.
While the year proved challenging, our businesses produced strong results virtually across
the board and took significant steps that have positioned our company for future growth and
enhanced our earnings potential. Based on our strong performance, combined with our core
strengths as a company, we are confident and excited about the future.
MESSAGE FROM THE CHAIRMAN
* Adjusted operating income is not calculated under U.S. generally accepted accounting principles (GAAP) and is a
financial 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 have demonstrated,
once again, that we have
the financial strength
and the flexibility to
pursue opportunities
that further strengthen
our competitive standing
and provide a platform
for future growth.”
JOHN STRANGFELD