Prudential 2015 Annual Report Download - page 19

Retirement. Segment results for 2015 decreased in comparison to 2014, reflecting lower net investment spread results, higher
general and administrative expenses, net of capitalization, and lower fee income, partially offset by more favorable reserve impacts.
Asset Management. Segment results for 2015 decreased in comparison to 2014, primarily reflecting higher asset management fees
from growth in assets under management, which were more than offset by higher expenses, and a lower contribution from other related
revenues, net of expenses.
Individual Life. Segment results for 2015 increased in comparison to 2014, primarily reflecting favorable comparative impacts from
our annual reviews and updates of assumptions and lower integration costs. Excluding these impacts, results for 2015 decreased from the
prior year, reflecting less favorable mortality experience inclusive of associated reserve updates and amortization, net of reinsurance, and a
lower contribution from investment results, partially offset by growth of our universal and term life businesses.
Group Insurance. Segment results for 2015 increased in comparison to 2014, primarily reflecting favorable comparative impacts
from our annual reviews and updates of assumptions. Excluding these items, results increased from 2014 reflecting more favorable
comparative underwriting results and lower expenses, partially offset by a lower contribution from net investment spread results.
International Insurance. Segment results for 2015 decreased in comparison to 2014, primarily from net unfavorable impacts from
foreign currency exchange rates and from our annual reviews and updates of assumptions. Excluding these items, segment results increased
from the prior year, reflecting net business growth driven by higher sales, a greater contribution from net investment spread results and the
absence of certain reserve refinements that occurred in 2014. Partially offsetting these impacts were higher expenses and lower income
from non-coupon investments.
Corporate and Other operations. The results for 2015 in comparison to 2014 reflected decreased losses driven by lower operating
debt interest expense, net of higher investment income from the transfer of assets related to the restructuring of the former Closed Block
Business, partially offset by higher capital debt interest expense, lower pension and employee benefits income and higher levels of
corporate expenses.
Closed Block division. Closed Block division results for 2015 increased in comparison to Closed Block Business results for 2014
primarily driven by the absence of costs associated with the early redemption in 2014 of senior secured notes, which we referred to as the
IHC Debt. Excluding this impact, results decreased, reflecting a decrease in net realized investment gains, net investment income and net
insurance results, partially offset by lower interest expense and a decrease in the policyholder dividend obligation.
Consolidated Results of Operations
The following table summarizes net income (loss) for the periods presented.
Year ended December 31,
2015 2014 2013
(in millions)
Revenues ........................................................................................... $57,119 $54,105 $41,461
Benefits and expenses ................................................................................. 49,350 52,346 43,145
Income (loss) from continuing operations before income taxes and equity in earnings of operating joint ventures ......... 7,769 1,759 (1,684)
Income tax expense (benefit) ........................................................................... 2,072 349 (1,058)
Income (loss) from continuing operations before equity in earnings of operating joint ventures ....................... 5,697 1,410 (626)
Equity in earnings of operating joint ventures, net of taxes .................................................... 15 16 59
Income (loss) from continuing operations ................................................................. 5,712 1,426 (567)
Income (loss) from discontinued operations, net of taxes ...................................................... 0 12 7
Net income (loss) .................................................................................... 5,712 1,438 (560)
Less: Income attributable to noncontrolling interests ......................................................... 70 57 107
Net income (loss) attributable to Prudential Financial, Inc. .................................................... $ 5,642 $ 1,381 $ (667)
Results of Operations
2015 to 2014 Annual Comparison. The increase in “Income (loss) from continuing operations” reflected the following:
• $3,136 million higher net pre-tax earnings primarily resulting from the 2014 impact of foreign currency exchange rate movements
on certain assets and liabilities within our Japanese insurance operations (see “—Results of Operations by Segment—International
Insurance Division—Impact of foreign currency exchange rate movements on earnings—U.S. GAAP earnings impact of products
denominated in non-local currencies” for additional information);
• $3,041 million favorable variance, on a pre-tax basis, reflecting our decision to manage a portion of our interest rate risk through
our Capital Protection Framework (see “—Results of Operations by Segment—Corporate and Other—Capital Protection
Framework” for additional information);
• $615 million favorable variance, on a pre-tax basis, reflecting the net impact from changes in the value of our embedded derivatives
and related hedge positions associated with certain variable annuities (see “—Results of Operations by Segments—U.S. Retirement
Solutions and Investment Management Division—Individual Annuities—Variable Annuity Hedging Program Results” for
additional information); and
Prudential Financial, Inc. 2015 Annual Report 17