Prudential 2007 Annual Report Download - page 187

PRUDENTIAL FINANCIAL, INC.
Notes to Consolidated Financial Statements
21. COMMITMENTS AND GUARANTEES, CONTINGENT LIABILITIES AND LITIGATION AND
REGULATORY MATTERS (continued)
Summary
The Company’s litigation and regulatory matters are subject to many uncertainties, and given its complexity and scope, their outcome
cannot be predicted. It is possible that results of operations or cash flow of the Company in a particular quarterly or annual period could be
materially affected by an ultimate unfavorable resolution of pending litigation and regulatory matters depending, in part, upon the results of
operations or cash flow for such period. In light of the unpredictability of the Company’s litigation and regulatory matters, it is also
possible that in certain cases an ultimate unfavorable resolution of one or more pending litigation or regulatory matters could have a
material adverse effect on the Company’s financial position. Management believes, however, that, based on information currently known to
it, the ultimate outcome of all pending litigation and regulatory matters, after consideration of applicable reserves and rights to
indemnification, is not likely to have a material adverse effect on the Company’s financial position.
22. QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)
The unaudited quarterly results of operations for the years ended December 31, 2007 and 2006 are summarized in the table below:
Three months ended
March 31 June 30 September 30 December 31
(in millions, except per share amounts)
2007
Total revenues ............................................................ $8,775 $8,425 $8,393 $8,808
Total benefits and expenses .................................................. 7,348 7,282 7,273 7,812
Income from continuing operations before income taxes and equity in earnings of
operating joint ventures ................................................... 1,427 1,143 1,120 996
Income from continuing operations ............................................ 1,081 875 871 860
Net income .............................................................. 1,120 846 867 871
Basic income from continuing operations per share—Common Stock(1) .............. 2.14 1.89 1.92 1.76
Diluted income from continuing operations per share—Common Stock(1) ............. 2.10 1.86 1.89 1.73
Basic net income per share—Common Stock(1) ................................. 2.22 1.83 1.91 1.78
Diluted net income per share—Common Stock(1) ................................ 2.18 1.80 1.88 1.75
Basic and diluted income (loss) from continuing operations per share—Class B Stock . . . 39.00 (1.50) (3.00) 34.00
Basic and diluted net income (loss) per share—Class B Stock ....................... 40.00 (1.50) (3.00) 34.00
2006
Total revenues ............................................................ $7,787 $7,313 $8,361 $8,807
Total benefits and expenses .................................................. 6,826 6,730 6,888 7,430
Income from continuing operations before income taxes and equity in earnings of
operating joint ventures ................................................... 961 583 1,473 1,377
Income from continuing operations ............................................ 735 463 1,139 1,020
Net income .............................................................. 733 453 1,205 1,037
Basic income from continuing operations per share—Common Stock(1) .............. 1.41 0.92 2.29 1.89
Diluted income from continuing operations per share—Common Stock(1) ............. 1.38 0.91 2.25 1.85
Basic net income per share—Common Stock(1) ................................. 1.40 0.90 2.43 1.92
Diluted net income per share—Common Stock(1) ................................ 1.38 0.89 2.38 1.88
Basic and diluted income from continuing operations per share—Class B Stock ........ 19.50 6.50 18.50 63.50
Basic and diluted net income per share—Class B Stock ............................ 19.50 6.50 18.50 63.50
(1) Quarterly earnings per share amounts may not add to the full year amounts due to the averaging of shares.
Results for the first quarter of 2006 include pre-tax expenses of $176 million related to obligations and costs retained in connection
with businesses contributed to the retail securities brokerage joint venture with Wachovia, including an increase in the reserve for estimated
settlement costs related to market timing issues involving Prudential Equity Group, LLC’s former Prudential Securities operations, with
respect to which the Company announced that Prudential Equity Group, LLC had reached a settlement in August 2006.
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