RECONCILIATION BETWEEN ADJUSTED OPERATING INCOME AND THE COMPARABLE GAAP MEASURE
Published on
Exhibit 99.3
Prudential Financial, Inc.
Reconciliation between adjusted operating income and the comparable GAAP measure
First Quarter 2008
| 2008 | 2007 | 2006 | 2005 | |||||||||||||||||||||
| ($ in millions, except per share data) | 1Q | Full Year | 4Q | 3Q | 2Q | 1Q | Full Year | Full Year | ||||||||||||||||
| Pre-tax adjusted operating income |
992 | 4,905 | 1,080 | 1,392 | 1,212 | 1,221 | 4,065 | 3,513 | ||||||||||||||||
| Income taxes, applicable to adjusted operating income |
263 | 1,400 | 268 | 416 | 355 | 361 | 1,160 | 1,105 | ||||||||||||||||
| Financial Services Businesses after-tax adjusted operating income |
729 | 3,505 | 812 | 976 | 857 | 860 | 2,905 | 2,408 | ||||||||||||||||
| Reconciling items: |
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| Realized investment gains, net, and related charges and adjustments |
(678 | ) | (96 | ) | (91 | ) | (180 | ) | 34 | 141 | 83 | 549 | ||||||||||||
| Investment gains on trading account assets supporting insurance liabilities, net |
(262 | ) | — | (10 | ) | 36 | (108 | ) | 82 | 35 | (33 | ) | ||||||||||||
| Change in experience-rated contractholder liabilities due to asset value changes |
200 | 13 | 9 | (6 | ) | 72 | (62 | ) | 11 | (44 | ) | |||||||||||||
| Divested businesses |
(112 | ) | (26 | ) | (45 | ) | (27 | ) | 18 | 28 | 119 | 21 | ||||||||||||
| Equity in earnings of operating joint ventures |
(60 | ) | (400 | ) | (77 | ) | (103 | ) | (100 | ) | (120 | ) | (322 | ) | (214 | ) | ||||||||
| Total reconciling items, before income taxes |
(912 | ) | (509 | ) | (214 | ) | (280 | ) | (84 | ) | 69 | (74 | ) | 279 | ||||||||||
| Income taxes, not applicable to adjusted operating income |
(216 | ) | (255 | ) | (137 | ) | (101 | ) | (35 | ) | 18 | (34 | ) | (463 | ) | |||||||||
| Total reconciling items, after income taxes |
(696 | ) | (254 | ) | (77 | ) | (179 | ) | (49 | ) | 51 | (40 | ) | 742 | ||||||||||
| Income from continuing operations (after-tax) of Financial Services Businesses before equity in earnings of operating joint ventures |
33 | 3,251 | 735 | 797 | 808 | 911 | 2,865 | 3,150 | ||||||||||||||||
| Equity in earnings of operating joint ventures, net of taxes |
43 | 246 | 46 | 67 | 56 | 77 | 208 | 142 | ||||||||||||||||
| Income from continuing operations (after-tax) of Financial Services Businesses |
76 | 3,497 | 781 | 864 | 864 | 988 | 3,073 | 3,292 | ||||||||||||||||
| Income (loss) from discontinued operations, net of taxes |
1 | 15 | 11 | (4 | ) | (29 | ) | 37 | 71 | (73 | ) | |||||||||||||
| Net income of Financial Services Businesses |
77 | 3,512 | 792 | 860 | 835 | 1,025 | 3,144 | 3,219 | ||||||||||||||||
| Earnings per share of Common Stock (diluted): |
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| Financial Services Businesses after-tax adjusted operating income |
1.65 | 7.60 | 1.79 | 2.13 | 1.84 | 1.83 | 6.02 | 4.78 | ||||||||||||||||
| Reconciling items: |
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| Realized investment gains, net, and related charges and adjustments |
(1.51 | ) | (0.20 | ) | (0.20 | ) | (0.39 | ) | 0.07 | 0.30 | 0.17 | 1.05 | ||||||||||||
| Investment gains on trading account assets supporting insurance liabilities, net |
(0.58 | ) | — | (0.02 | ) | 0.08 | (0.23 | ) | 0.17 | 0.07 | (0.06 | ) | ||||||||||||
| Change in experience-rated contractholder liabilities due to asset value changes |
0.44 | 0.03 | 0.02 | (0.01 | ) | 0.15 | (0.13 | ) | 0.02 | (0.08 | ) | |||||||||||||
| Divested businesses |
(0.25 | ) | (0.06 | ) | (0.10 | ) | (0.06 | ) | 0.04 | 0.06 | 0.24 | 0.04 | ||||||||||||
| Equity in earnings of operating joint ventures |
(0.13 | ) | (0.85 | ) | (0.17 | ) | (0.22 | ) | (0.21 | ) | (0.25 | ) | (0.65 | ) | (0.41 | ) | ||||||||
| Total reconciling items, before income taxes |
(2.03 | ) | (1.08 | ) | (0.47 | ) | (0.60 | ) | (0.18 | ) | 0.15 | (0.15 | ) | 0.54 | ||||||||||
| Income taxes, not applicable to adjusted operating income |
(0.48 | ) | (0.53 | ) | (0.31 | ) | (0.21 | ) | (0.08 | ) | 0.04 | (0.07 | ) | (0.89 | ) | |||||||||
| Total reconciling items, after income taxes |
(1.55 | ) | (0.55 | ) | (0.16 | ) | (0.39 | ) | (0.10 | ) | 0.11 | (0.08 | ) | 1.43 | ||||||||||
| Income from continuing operations (after-tax) of Financial Services Businesses before equity in earnings of operating joint ventures |
0.10 | 7.05 | 1.63 | 1.74 | 1.74 | 1.94 | 5.94 | 6.21 | ||||||||||||||||
| Equity in earnings of operating joint ventures, net of taxes |
0.10 | 0.53 | 0.10 | 0.15 | 0.12 | 0.16 | 0.42 | 0.27 | ||||||||||||||||
| Income from continuing operations (after-tax) of Financial Services Businesses |
0.20 | 7.58 | 1.73 | 1.89 | 1.86 | 2.10 | 6.36 | 6.48 | ||||||||||||||||
| Income (loss) from discontinued operations, net of taxes |
— | 0.03 | 0.02 | (0.01 | ) | (0.06 | ) | 0.08 | 0.14 | (0.14 | ) | |||||||||||||
| Net income of Financial Services Businesses |
0.20 | 7.61 | 1.75 | 1.88 | 1.80 | 2.18 | 6.50 | 6.34 | ||||||||||||||||