OREANDA-NEWS. After-tax adjusted operating income for the Financial Services Businesses of USD 1.090 billion, or USD 2.30 per Common share, compared to USD 1.38 per Common share for year-ago quarter.

Financial Services Businesses Second Quarter Highlights
 
Pre-tax adjusted operating income up USD 660 million or 77% from year-ago quarter, with increases in each operating division. 
International Insurance earnings up 25%.           
Record high earnings in Prudential Retirement, reflecting contribution to results from two significant pension risk transfer transactions in late 2012.
Retirement account values surpass USD 300 billion milestone, reaching USD 301.8 billion at June 30 for a 23% increase from a year earlier; gross deposits and sales for the quarter of USD 8.1 billion, net additions USD 2.0 billion.
        
Asset Management institutional and retail net flows, excluding money market, total USD 5.6 billion; segment assets under management USD 826.0 billion at June 30, up 10% from a year earlier.

Individual Annuity account values USD 141.5 billion at June 30, up 14% from a year earlier; gross sales for the quarter of USD 2.5 billion, net sales USD 517 million.
        
U.S. Individual Life and Group Insurance earnings up USD 69 million, reflecting improved individual life mortality and contribution from in force business acquired from The Hartford in January 2013.
        
U.S. Individual Life annualized new business premiums USD 184 million, compared to USD 91 million a year ago; expanded distribution from Hartford Life acquisition contributes USD 58 million to current quarter sales.

Significant items included in current quarter adjusted operating income:
        
Pre-tax net benefit of USD 75 million in Individual Annuities, including reduced amortization of deferred policy acquisition and other costs and release of reserves for guaranteed death and income benefits reflecting market performance.
        
Pre-tax charge of USD 11 million in Individual Life for integration costs relating to the acquisition of The Hartford’s individual life insurance business.
        
Pre-tax charge of USD 6 million in International Insurance’s Gibraltar Life operation for integration costs relating to the acquisition of AIG Star Life Insurance Co., Ltd. and AIG Edison Life Insurance Company.
        
Pre-tax charge of USD 16 million in Corporate and Other operations for writeoff of issuance costs on debt securities redeemed prior to maturity.
        
Net loss of Financial Services Businesses attributable to Prudential Financial, Inc. for second quarter 2013 of USD 524 million, or USD 1.13 per Common share.
            
The current quarter net loss reflects pre-tax charges of approximately USD 1.6 billion from net changes in value relating to foreign currency exchange rates primarily resulting from changes in value of the Japanese yen in relation to other currencies. These currency-driven value changes were largely offset by corresponding adjustments to accumulated other comprehensive income which are not reflected in net income or loss. The current quarter net loss also reflects pre-tax charges of USD 953 million from changes in market value of derivatives primarily related to the Company’s investment duration management programs.
 
Other financial highlights:

GAAP book value for Financial Services Businesses, USD 33.7 billion or USD 71.93 per Common share at June 30, 2013, compared to USD 37.1 billion or USD 79.19 per Common share at December 31, 2012. Book value per Common share excluding total accumulated other comprehensive income, USD 54.18 at June 30, 2013 compared to USD 57.86 at December 31, 2012.
          
Excluding net changes in value relating to foreign currency exchange rate remeasurement reflected in net loss, book value per Common share excluding total accumulated other comprehensive income reached USD 60.14 at June 30, 2013, an increase of USD 1.90 since December 31 after payment of two quarterly Common Stock dividends totaling 80 cents per share.
 
Net unrealized gains on general account fixed maturity investments of the Financial Services Businesses of USD 16.0 billion at June 30, 2013 compared to USD 18.6 billion at December 31, 2012; gross unrealized losses of USD 4.4 billion at June 30, 2013, compared to USD 2.1 billion at December 31, 2012.
   
During the second quarter, the Company acquired 3.9 million shares of its Common Stock at a total cost of USD 250 million, for an average price of USD 64.45 per share under the June 2012 authorization by Prudential’s Board of Directors to repurchase at management’s discretion up to USD 1.0 billion of the Company’s outstanding Common Stock through June 2013, bringing total repurchases under that authorization to USD 400 million. From the commencement of share repurchases in July 2011 through June 30, 2013, the Company has acquired 35.2 million shares of its Common Stock under its share repurchase authorizations at a total cost of USD 1.9 billion, for an average price of USD 54.00 per share.

Prudential Financial, Inc. (NYSE:PRU): Prudential Financial, Inc. (NYSE:PRU) today reported after-tax adjusted operating income for its Financial Services Businesses of USD 1.090 billion (USD 2.30 per Common share) for the second quarter of 2013, compared to USD 648 million (USD 1.38 per Common share) for the year-ago quarter. The net loss for the Financial Services Businesses attributable to Prudential Financial, Inc. was USD 524 million (USD 1.13 per Common share) for the second quarter of 2013, compared to net income of USD 2.229 billion (USD 4.69 per Common share) for the year-ago quarter. Information regarding adjusted operating income, a non-GAAP measure, is provided below.

For the first half of 2013, after-tax adjusted operating income for the Financial Services Businesses amounted to USD 2.172 billion (USD 4.59 per Common share) compared to USD 1.415 billion (USD 3.00 per Common share) for the first half of 2012. The first half 2013 net loss for the Financial Services Businesses attributable to Prudential Financial, Inc. amounted to USD 1.245 billion (USD 2.68 per Common share) compared to net income of USD 1.269 billion (USD 2.69 per Common share) for the first half of 2012.

The Company acquired The Hartford’s individual life insurance business through a reinsurance transaction on January 2, 2013. Results of the Financial Services Businesses include the results of this business from the date of acquisition.

As a result of the sale, on July 1, 2013, of the Company’s wealth management solutions operation, for which results were previously reported within the Asset Management segment, results for this operation have been classified as “divested businesses” and excluded from adjusted operating income for all periods presented.

“We are pleased to report strong results for the second quarter and first half of the year, driven by solid earnings growth in each of our Divisions. In the U.S., our market-leading pension risk transfer transactions late last year contributed to record-high earnings for the quarter in the Retirement business. We are continuing to benefit from the quality book of business, talented staff, and expanded distribution that came to us with our acquisition of The Hartford’s individual life insurance business in January, with integration well on track. Our International Insurance business continues to perform well, building on a sustained track record of success based on delivering protection and retirement solutions tailored to clients’ financial security needs over a lifetime,” said Chairman and Chief Executive Officer John Strangfeld.

Adjusted operating income is not calculated under generally accepted accounting principles (GAAP). Information regarding adjusted operating income, a non-GAAP measure, is discussed later in this press release under “Forward-Looking Statements and Non-GAAP Measures,” and a reconciliation of adjusted operating income to the most comparable GAAP measure is provided in the tables that accompany this release.