Prudential 2006 Annual Report Download - page 12

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TABLE OF CONTENTS
Page
Number
Selected Financial Data .................................................................................... 11
Management’s Discussion and Analysis of Financial Condition and Results of Operations ............................... 13
Quantitative and Qualitative Disclosures About Market Risk ....................................................... 84
Consolidated Financial Statements:
Management’s Annual Report on Internal Control Over Financial Reporting ...................................... 89
Report of Independent Registered Public Accounting Firm .................................................... 90
Consolidated Statements of Financial Position as of December 31, 2006 and 2005 .................................. 92
Consolidated Statements of Operations for the years ended December 31, 2006, 2005 and 2004 ....................... 93
Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2006, 2005 and 2004 ............... 94
Consolidated Statements of Cash Flows for the years ended December 31, 2006, 2005 and 2004 ...................... 95
Notes to Consolidated Financial Statements ................................................................ 96
Supplemental Combining Financial Information ............................................................ 182
Market Price of and Dividends on Common Equity and Related Stockholder Matters ................................... 185
Performance Graph ....................................................................................... 186
Forward-Looking Statements ............................................................................... 187
SEC and NYSE Certifications ............................................................................... 188
Throughout this Annual Report, “Prudential Financial” refers to Prudential Financial, Inc., the ultimate holding company for all
of our companies. “Prudential Insurance” refers to The Prudential Insurance Company of America, before and after its
demutualization on December 18, 2001. “Prudential,” the “Company,” “we” and “our” refer to our consolidated operations before and
after demutualization.
Financial Services Businesses and Closed Block Business
Effective with the date of demutualization, we established the Financial Services Businesses and the Closed Block Business. The
Financial Services Businesses refer to the businesses in our three operating divisions and our Corporate and Other operations. The
Insurance division consists of our Individual Life, Individual Annuities and Group Insurance segments. The Investment division consists of
our Asset Management, Financial Advisory and Retirement segments. The International Insurance and Investments division consists of our
International Insurance and International Investments segments. The Common Stock reflects the performance of the Financial Services
Businesses, but there can be no assurance that the market value of the Common Stock will reflect solely the financial performance of these
businesses. The Class B Stock, which was issued in a private placement on the date of the demutualization, reflects the financial
performance of the Closed Block Business, as defined in Note 20 to the Consolidated Financial Statements.
We allocate all of our assets, liabilities and earnings between the Financial Services Businesses and Closed Block Business as if they
were separate legal entities, but there is no legal separation between these two businesses. Holders of both the Common Stock and the Class
B Stock are common stockholders of Prudential Financial and, as such, are subject to all the risks associated with an investment in
Prudential Financial and all of its businesses. The Common Stock and the Class B Stock will be entitled to dividends, if and when declared
by Prudential Financial’s Board of Directors from funds legally available to pay them, as if the businesses were separate legal entities. See
Note 13 to the Consolidated Financial Statements for a discussion of liquidation rights of the Common Stock and the Class B Stock,
dividend restrictions on the Common Stock if we do not pay dividends on the Class B Stock when there are funds legally available to pay
them and conversion rights of the Class B Stock.
PRUDENTIAL FINANCIAL, INC. 2006 ANNUAL REPORT
10