Prudential Financial, Inc.Announces Third Quarter 2009 Results;Updates 2009 Earnings Guidance

http://www.businesswire.com/news/home/20091104006398/en

* Net income of Financial Services Businesses attributable to Prudential
Financial, Inc. of $1.1 billion, or $2.35 per Common share
* After-tax adjusted operating income of $733 million, or $1.59 per Common share
* Significant items included in these results:

* Pretax benefit of $211 million in Individual Annuities to release reserves for
guaranteed minimum death and income benefits and to reduce amortization of
deferred policy acquisition and other costs, including impact of annual review
of actuarial assumptions
* Pretax charge of $140 million in Individual Annuities for mark-to-market of
hedging positions initiated in 2009 to mitigate exposure to declines in capital
from adverse financial market conditions
* Pretax benefits in Individual Life of $55 million from annual review of
actuarial assumptions and $30 million from compensation received based on
multi-year profitability of third party products we distribute
* Net income reflects pretax realized investment losses from impairments and
sales of credit-impaired fixed maturity investments of $292 million, and $68
million of impairments on equity securities and other investments

* Operational highlights for the third quarter:

* Individual Annuity gross sales reach record high $5.9 billion, up from $2.5
billion a year ago; net sales $4.4 billion, up from $481 million a year ago
* Full Service Retirement gross deposits and sales of $4.8 billion and net
additions of $1.5 billion, compared to gross deposits and sales of $3.3 billion
and net additions of $393 million a year ago
* Individual Life annualized new business premiums, $86 million, compared to $82
million a year ago
* Group Insurance annualized new business premiums of $110 million, compared to
$117 million a year ago
* International Insurance constant dollar basis annualized new business premiums
of $345 million, compared to $290 million a year ago
* Assets under management, $641 billion at September 30, 2009, compared to $558
billion at December 31, 2008
* Gross unrealized losses on general account fixed maturity investments of the
Financial Services Businesses of $4.8 billion at September 30, 2009, compared to
$11.3 billion at December 31, 2008; net unrealized gains of $979 million at
September 30, 2009 compared to net unrealized losses of $6.6 billion at December
31, 2008

NEWARK, N.J.--(Business Wire)--
Prudential Financial, Inc. (NYSE:PRU) today reported net income of its Financial
Services Businesses attributable to Prudential Financial, Inc. of $1.090 billion
($2.35 per Common share) for the third quarter of 2009, compared to a net loss
of $118 million (25 cents per Common share) for the year-ago quarter. After-tax
adjusted operating income for the Financial Services Businesses was $733 million
($1.59 per Common share) for the third quarter of 2009, compared to $430 million
($1.02 per Common share) for the third quarter of 2008. Adjusted operating
income is a non-GAAP measure as discussed below.

For the first nine months of 2009, net income for the Financial Services
Businesses attributable to Prudential Financial, Inc. amounted to $1.623 billion
($3.72 per Common share) compared to $516 million ($1.26 per Common share) for
the first nine months of 2008. After-tax adjusted operating income for the first
nine months of 2009 for the Financial Services Businesses amounted to $1.986
billion ($4.53 per Common share), compared to $1.966 billion ($4.55 per Common
share) for the first nine months of 2008.

"Our current quarter results reflect underlying strength in our diversified
portfolio of businesses, as well as continuing improvements in financial
markets. We believe the current environment provides growth opportunities for
the strongest companies. We are continuing to build our franchise as clients
look to Prudential as a trusted partner offering innovative solutions for
financial security. Sales and net flows were solid across our domestic
businesses, with variable annuity sales achieving record levels for the second
consecutive quarter. International insurance sales were strong as well,
benefiting from expanded distribution of our life insurance protection products.
With uncertainties still facing the economy and markets, we`ve bolstered our
financial strength and flexibility through long-term debt and equity issues of
more than $4 billion this year, and feel that we are well positioned to pursue
opportunities to grow our businesses," said Chairman and Chief Executive Officer
John Strangfeld.

"Considering our results for the first nine months of the year and current
financial market conditions, including equity market levels, interest rates and
credit spreads, we believe that Prudential Financial will achieve Common Stock
earnings per share for 2009 in the range of $5.40 to $5.60 based on after-tax
adjusted operating income of the Financial Services Businesses. This expectation
assumes stable equity markets over the remainder of the year," Strangfeld said.
The 2009 expectation is subject to change if this assumption is not realized and
as discussed under "Forward-Looking Statements and Non-GAAP Measures" below.

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.

Financial Services Businesses

Prudential Financial`s Common Stock (NYSE:PRU) reflects the performance of its
Financial Services Businesses, which consist of its U.S. Retirement Solutions
and Investment Management, U.S. Individual Life and Group Insurance, and
International Insurance and Investments divisions and its Corporate and Other
operations.

In the following business-level discussion, adjusted operating income refers to
pre-tax results.

The U.S. Retirement Solutions and Investment Management division reported
adjusted operating income of $314 million for the third quarter of 2009,
compared to a loss of $182 million in the year-ago quarter.

The Individual Annuities segment reported adjusted operating income of $166
million in the current quarter, compared to a loss of $307 million in the
year-ago quarter. Current quarter results benefited $185 million from net
reductions in reserves for guaranteed minimum death and income benefits and $26
million from a net reduction in amortization of deferred policy acquisition and
other costs, reflecting an updated estimate of profitability for this business
including updates of actuarial assumptions based on an annual review. These
benefits to results were largely driven by increases in customer account values
during the current quarter. Results for the year-ago quarter included a net
charge of $418 million from similar adjustment of these items to reflect an
update of estimated profitability including changes in actuarial assumptions
based on an annual review. Mark-to-market of embedded derivatives and related
hedge positions associated with living benefits, after amortization of deferred
policy acquisition and other costs, resulted in a net charge of $9 million to
current quarter adjusted operating income. In addition, current quarter results
included a $140 million charge for mark-to-market of hedging positions initiated
in 2009 to mitigate exposure to declines in capital from adverse financial
market conditions. Results for the year-ago quarter included net charges of $37
million from mark-to-market of embedded derivatives and related hedge positions
associated with living benefits. Excluding the effect of the foregoing items,
adjusted operating income for the Individual Annuities segment declined $44
million from the year-ago quarter, primarily reflecting higher costs associated
with guaranteed benefits and greater current period expenses due to increased
sales.

The Retirement segment reported adjusted operating income of $119 million for
the current quarter, compared to $133 million in the year-ago quarter. Current
quarter results include an $8 million charge from a net increase in amortization
of deferred policy acquisition and other costs based on an annual review of
actuarial assumptions, while results for the year-ago quarter benefited $12
million from net refinements reflecting a similar annual review. Excluding these
items, adjusted operating income of the Retirement segment increased $6 million
from the year-ago quarter, as a greater contribution from investment results was
partially offset by less favorable case experience on traditional retirement
business and lower fees associated with customer account values.

The Asset Management segment reported adjusted operating income of $29 million
for the current quarter, compared to a loss of $8 million in the year-ago
quarter. Losses from investment results associated with proprietary investing
activities amounted to approximately $20 million in the current quarter compared
to approximately $100 million in the year-ago quarter, with the latter driven
largely by fixed income and equity fund investments that were subsequently
redeemed. The reduction in losses from proprietary investing activities was
partially offset by unfavorable current quarter results from commercial mortgage
activities, and by lower performance-based fees primarily related to
institutional real estate funds.

The U.S. Individual Life and GroupInsurance division reported adjusted operating
income of $307 million for the third quarter of 2009, compared to $339 million
in the year-ago quarter.

The Individual Life segment reported adjusted operating income of $243 million
for the current quarter, compared to $238 million in the year-ago quarter.
Current quarter results benefited from a $55 million net reduction in
amortization of deferred policy acquisition and other costs reflecting updates
of our actuarial assumptions based on an annual review, while results for the
year-ago quarter included a net benefit from similar items totaling $79 million.
Current quarter adjusted operating income also included $30 million from
compensation received based on multi-year profitability of third party products
we distribute, while results for the year-ago quarter included a similar benefit
amounting to $53 million. Excluding these items, adjusted operating income
increased $52 million from a year ago, as results benefited from lower net
amortization of deferred policy acquisition costs and other items driven by
favorable current quarter separate account performance.

The Group Insurance segment reported adjusted operating income of $64 million in
the current quarter, compared to $101 million in the year-ago quarter. Results
for the year-ago quarter benefited $13 million from refinements of group
disability reserves based on an annual review, while a similar current year
review had no net impact on results. Excluding this item, adjusted operating
income was $24 million below the level of the year-ago quarter, reflecting less
favorable group life and disability claims experience.

The International Insurance and Investments division reported adjusted operating
income of $513 million for the third quarter of 2009, compared to $497 million
in the year-ago quarter.

The International Insurance segment reported adjusted operating income of $500
million for the current quarter, an increase of $40 million from the year-ago
quarter. Adjusted operating income of the segment`s Life Planner insurance
operations increased $17 million, to $310 million for the current quarter from
$293 million in the year-ago quarter, reflecting continued business growth. The
segment`s Gibraltar Life operations reported adjusted operating income of $190
million for the current quarter, compared to $167 million in the year-ago
quarter. Current quarter results for Gibraltar Life included $25 million from
the former Yamato Life business acquired on May 1, 2009. This contribution
included approximately $15 million largely related to initial surrenders of
policies following the restructuring of the business, essentially consistent
with our overall expectations. Foreign currency exchange rates, including the
impact of the Company`s currency hedging programs, did not have a significant
effect on the comparison of results for the segment`s international insurance
businesses.

The International Investments segment reported adjusted operating income of $13
million for the current quarter, compared to $37 million in the year-ago
quarter. The decrease resulted primarily from less favorable results from the
segment`s global commodities operations, which benefited in the year-ago quarter
from income of $14 million from market value changes in securities held relating
to trading exchange memberships.

Corporate and Other operations resulted in a loss, on an adjusted operating
income basis, of $201 million in the third quarter of 2009, compared to a loss
of $38 million in the year-ago quarter. The increased loss reflected increased
interest expense, net of investment income, reflecting the negative spread
associated with the investment of debt issuance proceeds in cash and short-term
investments, as well as a greater level of capital debt. Higher expenses,
including certain liabilities that are impacted by changes in equity and other
markets, also contributed to the increased loss. The Company`s real estate and
relocation business reported adjusted operating income of $6 million for the
current quarter, compared to a loss of $4 million in the year-ago quarter.

Assets under management amounted to $641 billion at September 30, 2009, compared
to $602 billion a year earlier and $558 billion at December 31, 2008.

Net income of the Financial Services Businesses attributable to Prudential
Financial, Inc. amounted to $1.090 billion for the third quarter of 2009,
compared to a net loss of $118 million in the year-ago quarter.

Current quarter net income includes $234 million of pre-tax net realized
investment losses and related charges and adjustments. Net realized investment
losses in the current quarter reflect $360 million of losses from impairments
and sales of credit-impaired investments. The losses from impairments and sales
of credit-impaired securities include $292 million on fixed maturity
investments, including $149 million relating to asset-backed securities
collateralized by sub-prime mortgages, $62 million of impairments on equity
securities, and $6 million of impairments on other investments. The foregoing
realized investment losses were partially offset by increases in market value of
certain externally managed investments in the European market.

At September 30, 2009, gross unrealized losses on general account fixed maturity
investments of the Financial Services Businesses amounted to $4.756 billion,
including $3.064 billion on investment-grade securities. Gross unrealized losses
include $1.507 billion related to asset-backed securities collateralized by
sub-prime mortgages. Gross unrealized losses on general account fixed maturity
investments of the Financial Services Businesses at September 30, 2009 include
$2.583 billion of declines in value of 20% or more of amortized cost, of which
$2.469 billion represents such declines in value for three months or more. Gross
unrealized losses on general account fixed maturity investments of the Financial
Services Businesses amounted to $11.251 billion at year-end 2008. Net unrealized
gains on general account fixed maturity investments of the Financial Services
Businesses amounted to $979 million at September 30, 2009, compared to net
unrealized losses of $6.567 billion at December 31, 2008.

Net income for the current quarter also reflects pre-tax increases of $694
million in recorded asset values and $458 million in recorded liabilities
representing changes in value which are expected to ultimately accrue to
contractholders. These changes primarily represent interest rate related
mark-to-market adjustments. Net income for the current quarter also includes $25
million of pre-tax income from divested businesses, primarily reflecting $22
million pre-tax income from the Company`s retail securities brokerage joint
venture with Wachovia and related costs. On January 1, 2008, Wachovia combined
the acquired retail securities brokerage business of A.G. Edwards, Inc. with the
joint venture. The Company`s estimated share of the results of the joint venture
and transition costs, subsequent to this combination, is based on a diluted
ownership level which is currently being finalized. As previously announced, the
Company exercised its right under the "lookback" option to put its joint venture
interests to Wells Fargo, which acquired Wachovia on December 31, 2008. Under
the terms of the joint venture agreements, closing of the put transaction would
occur on or about January 1, 2010.

Net income of the Financial Services Businesses for the year-ago quarter
included $547 million of pre-tax net realized investment losses and related
charges and adjustments, decreases of $534 million in recorded assets and $388
million in recorded liabilities for which changes in value are expected to
ultimately accrue to contractholders, and a loss of $219 million from divested
businesses, in each case before income taxes.

Closed Block Business

Prudential`s Class B Stock, which is not traded on any exchange, reflects the
performance of its Closed Block Business.

The Closed Block Business includes our in-force participating life insurance and
annuity policies, and assets that are being used for the payment of benefits and
policyholder dividends on these policies, as well as other assets and equity
that support these policies. We have ceased offering these participating
policies.

The Closed Block Business reported a loss from continuing operations before
income taxes of $16 million for the third quarter of 2009, compared to a loss
from continuing operations before income taxes of $113 million for the year-ago
quarter. The reduced loss reflects a decrease in dividends paid and accrued to
policyholders, including the impact of a reduction in the 2009 dividend scale.

The Closed Block Business reported net losses attributable to Prudential
Financial, Inc. of $8 million for the third quarter of 2009 and $58 million for
the year-ago quarter.

For the first nine months of 2009, the Closed Block Business reported a loss
from continuing operations before income taxes of $572 million, compared to a
loss from continuing operations before income taxes of $101 million for the
first nine months of 2008. The Closed Block Business reported net losses
attributable to Prudential Financial, Inc. of $364 million for the first nine
months of 2009 and $51 million for the first nine months of 2008.

Consolidated Results

There is no legal separation of the Financial Services Businesses and the Closed
Block Business, and holders of the Common Stock and the Class B Stock are both
common stockholders of Prudential Financial, Inc.

On a consolidated basis, which includes the results of both the Financial
Services Businesses and the Closed Block Business, Prudential Financial, Inc.
reported net income attributable to Prudential Financial, Inc. of $1.082 billion
for the third quarter of 2009 compared to a net loss of $176 million for the
year-ago quarter, and reported net income attributable to Prudential Financial,
Inc. of $1.259 billion for the first nine months of 2009 and $465 million for
the first nine months of 2008.

Forward-Looking Statements and Non-GAAP Measures

Certain of the statements included in this release including (but not limited
to) those in the fourth paragraph hereof, constitute forward-looking statements
within the meaning of the U. S. Private Securities Litigation Reform Act of
1995. Words such as "expects," "believes," "anticipates," "includes," "plans,"
"assumes," "estimates," "projects," "intends," "should," "will," "shall," or
variations of such words are generally part of forward-looking statements.
Forward-looking statements are made based on management`s current expectations
and beliefs concerning future developments and their potential effects upon
Prudential Financial, Inc. and its subsidiaries. There can be no assurance that
future developments affecting Prudential Financial, Inc. and its subsidiaries
will be those anticipated by management. These forward-looking statements are
not a guarantee of future performance and involve risks and uncertainties, and
there are certain important factors that could cause actual results to differ,
possibly materially, from expectations or estimates reflected in such
forward-looking statements, including, among others: (1) general economic,
market and political conditions, including the performance and fluctuations of
fixed income, equity, real estate and other financial markets, particularly in
light of severe economic conditions and the severe stress experienced by the
global financial markets since the second half of 2007; (2) the availability and
cost of external financing for our operations, which has been affected by the
stress experienced by the global financial markets; (3) interest rate
fluctuations; (4) reestimates of our reserves for future policy benefits and
claims; (5) differences between actual experience regarding mortality,
morbidity, persistency, surrender experience, interest rates or market returns
and the assumptions we use in pricing our products, establishing liabilities and
reserves or for other purposes; (6) changes in our assumptions related to
deferred policy acquisition costs, valuation of business acquired or goodwill;
(7) changes in our claims-paying or credit ratings; (8) investment losses,
defaults and counterparty non-performance; (9) competition in our product lines
and for personnel; (10) changes in tax law; (11) economic, political, currency
and other risks relating to our international operations; (12) fluctuations in
foreign currency exchange rates and foreign securities markets; (13) regulatory
or legislative changes, including government actions in response to the stress
experienced by the global financial markets; (14) adverse determinations in
litigation or regulatory matters and our exposure to contingent liabilities,
including in connection with our divestiture or winding down of businesses; (15)
domestic or international military actions, natural or man-made disasters
including terrorist activities or pandemic disease, or other events resulting in
catastrophic loss of life; (16) ineffectiveness of risk management policies and
procedures in identifying, monitoring and managing risks; (17) effects of
acquisitions, divestitures and restructurings, including possible difficulties
in integrating and realizing the projected results of acquisitions; (18) changes
in statutory or U.S. GAAP accounting principles, practices or policies; (19)
changes in assumptions for retirement expense; (20) Prudential Financial, Inc.`s
primary reliance, as a holding company, on dividends or distributions from its
subsidiaries to meet debt payment obligations and the ability of the
subsidiaries to pay such dividends or distributions in light of our ratings
objectives and/or applicable regulatory restrictions; and (21) risks due to the
lack of legal separation between our Financial Services Businesses and our
Closed Block Business. As noted above, the period since the second half of 2007
has been characterized by extreme adverse market and economic conditions. The
foregoing risks are even more pronounced in these unprecedented market and
economic conditions. Prudential Financial, Inc. does not intend, and is under no
obligation, to update any particular forward-looking statement included in this
document.

Adjusted operating income is a non-GAAP measure of performance of our Financial
Services Businesses. Adjusted operating income excludes "Realized investment
gains (losses), net," as adjusted, and related charges and adjustments. A
significant element of realized investment gains and losses are impairments and
credit-related and interest rate-related gains and losses. Impairments and
losses from sales of credit-impaired securities, the timing of which depends
largely on market credit cycles, can vary considerably across periods. The
timing of other sales that would result in gains or losses, such as interest
rate-related gains or losses, is largely subject to our discretion and
influenced by market opportunities as well as our tax and capital profile.

Realized investment gains (losses) representing profit or loss of certain of our
businesses which primarily originate investments for sale or syndication to
unrelated investors, and those associated with terminating hedges of foreign
currency earnings and current period yield adjustments are included in adjusted
operating income. Realized investment gains and losses from products that are
free standing derivatives or contain embedded derivatives, and from associated
derivative portfolios that are part of an economic hedging program related to
the risk of those products, are included in adjusted operating income. Adjusted
operating income excludes gains and losses from changes in value of certain
assets and liabilities related to foreign currency exchange movements that have
been economically hedged, as well as gains and losses on certain investments
that are classified as other trading account assets and debt that is carried at
fair value.

Adjusted operating income also excludes investment gains and losses on trading
account assets supporting insurance liabilities and changes in experience-rated
contractholder liabilities due to asset value changes, because these recorded
changes in asset and liability values are expected to ultimately accrue to
contractholders. Trends in the underlying profitability of our businesses can be
more clearly identified without the fluctuating effects of these transactions.
In addition, adjusted operating income excludes the results of divested
businesses, which are not relevant to our ongoing operations. Discontinued
operations, which is presented as a separate component of net income under GAAP,
is also excluded from adjusted operating income.

We believe that the presentation of adjusted operating income as we measure it
for management purposes enhances understanding of the results of operations of
the Financial Services Businesses by highlighting the results from ongoing
operations and the underlying profitability of our businesses. However, adjusted
operating income is not a substitute for income determined in accordance with
GAAP, and the adjustments made to derive adjusted operating income are important
to an understanding of our overall results of operations. The schedules
accompanying this release provide a reconciliation of adjusted operating income
for the Financial Services Businesses to income from continuing operations in
accordance with GAAP.

Our expectation of Common Stock earnings per share is based on after-tax
adjusted operating income. Because we do not predict future realized investment
gains / losses or recorded changes in asset and liability values that are
expected to ultimately accrue to contractholders, we cannot provide a measure of
our Common Stock earnings per share expectation based on income from continuing
operations of the Financial Services Businesses, which is the GAAP measure most
comparable to adjusted operating income.

The information referred to above, as well as the risks of our businesses
described in our Quarterly Report on Form 10-Q for the quarter ended June 30,
2009 and our Annual Report on Form 10-K for the year ended December 31, 2008,
should be considered by readers when reviewing forward-looking statements
contained in this release. Additional historical information relating to our
financial performance is located on our Web site at www.investor.prudential.com.

Earnings Conference Call

Members of Prudential`s senior management will host a conference call on
Thursday, November 5, 2009 at 11 a.m. ET, to discuss with the investment
community the Company`s third quarter results. The conference call will be
broadcast live over the Company`s Investor Relations Web site at:
www.investor.prudential.com. Please log on fifteen minutes early in the event
necessary software needs to be downloaded. The call will remain on the Investor
Relations Web site for replay through November 20. Institutional investors,
analysts, and other members of the professional financial community are invited
to listen to the call and participate in Q&A by dialing (877) 777-1971 (domestic
callers) or (612) 332-0226 (international callers). All others are encouraged to
dial into the conference call in listen-only mode, using the same numbers. To
listen to a replay of the conference call starting at 2:30 p.m. on November 5,
through November 12, dial (800) 475-6701 (domestic callers) or (320) 365-3844
(international callers). The access code for the replay is 986906.

Prudential Financial, Inc. (NYSE: PRU), a financial services leader with
approximately $641 billion of assets under management as of September 30, 2009,
has operations in the United States, Asia, Europe, and Latin America. Leveraging
its heritage of life insurance and asset management expertise, Prudential is
focused on helping approximately 50 million individual and institutional
customers grow and protect their wealth. The Company`s well-known Rock symbol is
an icon of strength, stability, expertise and innovation that has stood the test
of time. Prudential's businesses offer a variety of products and services,
including life insurance, annuities, retirement-related services, mutual funds,
investment management, and real estate services. For more information, please
visit www.news.prudential.com.

Financial Highlights
(in millions, except per share data, unaudited)

Three Months Ended Nine Months Ended
September 30 September 30
2009 2008 2009 2008

Financial Services Businesses Income Statement Data:
Adjusted Operating Income (1):
Revenues:
Premiums $ 3,361 $ 2,798 $ 9,942 $ 8,861
Policy charges and fee income 693 709 2,193 2,342
Net investment income 2,055 2,076 6,172 6,331
Asset management fees, commissions and other income 487 770 2,631 2,591
Total revenues 6,596 6,353 20,938 20,125
Benefits and expenses:
Insurance and annuity benefits 3,115 3,040 9,507 9,066
Interest credited to policyholders' account balances 831 853 2,642 2,462
Interest expense 228 287 714 833
Other expenses 1,489 1,557 5,439 5,090
Total benefits and expenses 5,663 5,737 18,302 17,451
Adjusted operating income before income taxes 933 616 2,636 2,674
Income taxes, applicable to adjusted operating income 200 186 650 708
Financial Services Businesses after-tax adjusted operating income (1) 733 430 1,986 1,966
Reconciling Items:
Realized investment losses, net, and related charges and adjustments (234 ) (547 ) (1,777 ) (1,711 )
Investment gains (losses) on trading account assets supporting insurance liabilities, net 694 (534 ) 1,525 (919 )
Change in experience-rated contractholder liabilities due to asset value changes (458 ) 388 (850 ) 682
Divested businesses 25 (219 ) (31 ) (276 )
Equity in earnings of operating joint ventures and earnings attributable to noncontrolling interests (92 ) 213 (75 ) 145
Total reconciling items, before income taxes (65 ) (699 ) (1,208 ) (2,079 )
Income taxes, not applicable to adjusted operating income (345 ) (280 ) (753 ) (724 )
Total reconciling items, after income taxes 280 (419 ) (455 ) (1,355 )
Income from continuing operations (after-tax) of Financial Services Businesses
before equity in earnings of operating joint ventures 1,013 11 1,531 611
Equity in earnings of operating joint ventures, net of taxes and earnings attributable to noncontrolling interests 81 (134 ) 74 (99 )
Income (loss) from continuing operations attributable to Prudential Financial, Inc. 1,094 (123 ) 1,605 512
Earnings attributable to noncontrolling interests (50 ) 5 (44 ) 37
Income (loss) from continuing operations (after-tax) of Financial Services Businesses 1,044 (118 ) 1,561 549
Income (loss) from discontinued operations, net of taxes (4 ) 5 18 4
Net income (loss) of Financial Services Businesses 1,040 (113 ) 1,579 553
Less: Income (loss) attributable to noncontrolling interests (50 ) 5 (44 ) 37
Net income (loss) of Financial Services Businesses attributable to Prudential Financial, Inc. $ 1,090 $ (118 ) $ 1,623 $ 516

See footnotes on last page.

Financial Highlights
(in millions, except per share data, unaudited)

Three Months Ended Nine Months Ended
September 30 September 30
2009 2008 2009 2008
Earnings per share of Common Stock (diluted) (2) (3):

Financial Services Businesses after-tax adjusted operating income $ 1.59 $ 1.02 $ 4.53 $ 4.55
Reconciling Items:
Realized investment losses, net, and related charges and adjustments (0.50 ) (1.28 ) (4.03 ) (3.91 )
Investment gains (losses) on trading account assets supporting insurance liabilities, net 1.49 (1.25 ) 3.46 (2.10 )
Change in experience-rated contractholder liabilities due to asset value changes (0.99 ) 0.91 (1.93 ) 1.56
Divested businesses 0.05 (0.51 ) (0.07 ) (0.63 )
Difference in earnings allocated to participating unvested share-based payment awards - - - 0.02
Total reconciling items, before income taxes 0.05 (2.13 ) (2.57 ) (5.06 )
Income taxes, not applicable to adjusted operating income (0.72 ) (0.84 ) (1.72 ) (1.76 )
Total reconciling items, after income taxes 0.77 (1.29 ) (0.85 ) (3.30 )
Income (loss) from continuing operations (after-tax) of Financial Services Businesses
attributable to Prudential Financial, Inc. 2.36 (0.27 ) 3.68 1.25
Income (loss) from discontinued operations, net of taxes (0.01 ) 0.02 0.04 0.01
Net income (loss) of Financial Services Businesses attributable to Prudential Financial, Inc. $ 2.35 $ (0.25 ) $ 3.72 $ 1.26

Weighted average number of outstanding Common shares (basic) 461.2 423.8 438.8 432.6
Weighted average number of outstanding Common shares (diluted) 464.6 428.0 440.6 437.1

Direct equity adjustment for earnings per share calculation (2) $ 12 $ 10 $ 34 $ 36

Earnings allocated to participating unvested share-based payment awards
for earnings per share calculation (3)
Financial Services Businesses after-tax adjusted operating income $ 7 $ 3 $ 22 $ 12
Income from continuing operations (after-tax) of Financial Services Businesses $ 11 $ - $ 18 $ 3

Financial Services Businesses Attributed Equity (as of end of period):

Total attributed equity $ 23,239 $ 18,780
Per share of Common Stock - diluted 49.71 43.92

Attributed equity excluding accumulated other comprehensive income related
to unrealized gains and losses on investments and pension/postretirement benefits $ 23,919 $ 21,553
Per share of Common Stock - diluted 51.16 50.40

Number of diluted shares at end of period 467.5 427.6

Adjusted operating income before income taxes, by Segment (1):
Individual Annuities $ 166 $ (307 ) $ 615 $ (38 )
Retirement 119 133 377 398
Asset Management 29 (8 ) 61 301
Total U.S. Retirement Solutions and Investment Management Division 314 (182 ) 1,053 661
Individual Life 243 238 421 437
Group Insurance 64 101 262 271
Total U.S. Individual Life and Group Insurance Division 307 339 683 708
International Insurance 500 460 1,390 1,326
International Investments 13 37 39 88
Total International Insurance and Investments Division 513 497 1,429 1,414
Corporate and Other operations (201 ) (38 ) (529 ) (109 )
Financial Services Businesses adjusted operating income before income taxes 933 616 2,636 2,674
Reconciling Items:
Realized investment losses, net, and related charges and adjustments (234 ) (547 ) (1,777 ) (1,711 )
Investment gains (losses) on trading account assets supporting insurance liabilities, net 694 (534 ) 1,525 (919 )
Change in experience-rated contractholder liabilities due to asset value changes (458 ) 388 (850 ) 682
Divested businesses 25 (219 ) (31 ) (276 )
Equity in earnings of operating joint ventures and earnings attributable to noncontrolling interests (92 ) 213 (75 ) 145
Total reconciling items, before income taxes (65 ) (699 ) (1,208 ) (2,079 )
Income (loss) from continuing operations before income taxes and equity in earnings of operating
joint ventures - Financial Services Businesses $ 868 $ (83 ) $ 1,428 $ 595

See footnotes on last page.

Financial Highlights
(in millions, except per share data or as otherwise noted, unaudited)

Three Months Ended Nine Months Ended
September 30 September 30
2009 2008 2009 2008

U.S. Retirement Solutions and Investment Management Division:

Fixed and Variable Annuity Sales and Account Values:
Gross sales $ 5,875 $ 2,540 $ 11,457 $ 8,150

Net sales $ 4,382 $ 481 $ 7,054 $ 1,619

Total account value at end of period $ 78,824 $ 71,317

Retirement Segment:

Full Service:

Deposits and sales $ 4,789 $ 3,276 $ 19,168 $ 12,392

Net additions $ 1,502 $ 393 $ 7,847 $ 1,210

Total account value at end of period $ 121,756 $ 100,463

Institutional Investment Products:

Gross additions $ 1,329 $ 1,052 $ 4,299 $ 4,468

Net withdrawals $ (1,194 ) $ (1,062 ) $ (1,533 ) $ (1,292 )

Total account value at end of period $ 50,137 $ 50,041

Asset Management Segment:
Assets managed by Investment Management and Advisory Services (in billions,
as of end of period):
Institutional customers $ 179.9 $ 170.9
Retail customers 79.1 75.4
General account 184.9 175.2
Total Investment Management and Advisory Services $ 443.9 $ 421.5

Institutional Assets Under Management (in billions):
Gross additions, other than money market $ 10.4 $ 6.3 $ 23.0 $ 23.5

Net additions, other than money market $ 4.8 $ 1.5 $ 6.3 $ 9.9

Retail Assets Under Management (in billions):
Gross additions, other than money market $ 6.1 $ 4.4 $ 14.2 $ 11.7

Net additions, other than money market $ 2.8 $ 0.1 $ 4.9 $ 2.0

U.S. Individual Life and Group Insurance Division:

Individual Life Insurance Annualized New Business Premiums (4):
Excluding corporate-owned life insurance
Variable life $ 3 $ 8 $ 12 $ 29
Universal life 26 21 86 60
Term life 57 53 170 156
Total excluding corporate-owned life insurance 86 82 268 245
Corporate-owned life insurance - - - -
Total $ 86 $ 82 $ 268 $ 245

Group Insurance Annualized New Business Premiums (4):
Group life $ 53 $ 70 $ 298 $ 212
Group disability 57 47 217 178
Total $ 110 $ 117 $ 515 $ 390

International Insurance and Investments Division:

International Insurance Annualized New Business Premiums (4) (5):

Actual exchange rate basis $ 361 $ 286 $ 1,022 $ 951

Constant exchange rate basis: $ 345 $ 290 $ 997 $ 954

See footnotes on last page.

Financial Highlights
(in millions, except per share data or as otherwise noted, unaudited)

Three Months Ended Nine Months Ended
September 30 September 30
2009 2008 2009 2008

Closed Block Business Data:

Income Statement Data:
Revenues $ 1,548 $ 1,778 $ 3,513 $ 4,945
Benefits and expenses 1,564 1,891 4,085 5,046
Loss from continuing operations before income taxes (16 ) (113 ) (572 ) (101 )
Income taxes (8 ) (55 ) (208 ) (50 )
Closed Block Business net loss (8 ) (58 ) (364 ) (51 )
Income from discontinued operations, net of taxes - - - -
Closed Block Business net loss (8 ) (58 ) (364 ) (51 )
Less: Income attributable to noncontrolling interests - - - -
Closed Block Business net loss attributable to Prudential Financial, Inc. $ (8 ) $ (58 ) $ (364 ) $ (51 )

Direct equity adjustment for earnings per share calculation (2) (12 ) (10 ) (34 ) (36 )

Earnings available to holders of Class B Stock after direct equity adjustment - based on net loss $ (20 ) $ (68 ) $ (398 ) $ (87 )

Loss from continuing operations per share of Class B Stock $ (10.00 ) $ (34.00 ) $ (199.00 ) $ (43.50 )
Income from discontinued operations, net of taxes per share of Class B Stock - - - -
Net loss per share of Class B Stock $ (10.00 ) $ (34.00 ) $ (199.00 ) $ (43.50 )

Weighted average diluted shares outstanding during period 2.0 2.0 2.0 2.0

Closed Block Business Attributed Equity (as of end of period):

Total attributed equity $ 1,058 $ (52 )
Per Share of Class B Stock 529.00 (26.00 )

Attributed equity excluding accumulated other comprehensive income related
to unrealized gains and losses on investments and pension/postretirement benefits $ 865 $ 1,222
Per Share of Class B Stock 432.50 611.00

Number of Class B Shares at end of period 2.0 2.0

Consolidated Data:

Consolidated Income Statement Data:
Revenues $ 8,564 $ 7,030 $ 24,029 $ 22,291
Benefits and expenses 7,712 7,226 23,173 21,797
Income (loss) from continuing operations before income taxes and equity in earnings of operating joint ventures 852 (196 ) 856 494
Income tax benefit (153 ) (149 ) (311 ) (66 )
Income (loss) from continuing operations before equity in earnings of operating joint ventures 1,005 (47 ) 1,167 560
Equity in earnings of operating joint ventures, net of taxes 31 (129 ) 30 (62 )
Income (loss) from continuing operations 1,036 (176 ) 1,197 498
Income (loss) from discontinued operations, net of taxes (4 ) 5 18 4
Consolidated net income (loss) 1,032 (171 ) 1,215 502
Less: Income (loss) attributable to noncontrolling interests (50 ) 5 (44 ) 37
Net income (loss) attributable to Prudential Financial, Inc. $ 1,082 $ (176 ) $ 1,259 $ 465

Net income (loss) attributable to Prudential Financial, Inc.:
Financial Services Businesses $ 1,090 $ (118 ) $ 1,623 $ 516
Closed Block Business (8 ) (58 ) (364 ) (51 )
Consolidated net income (loss) attributable to Prudential Financial, Inc. $ 1,082 $ (176 ) $ 1,259 $ 465

Assets and Asset Management Information (in billions, as of end of period)

Total assets $ 475.5 $ 460.4

Assets under management (at fair market value):
Managed by U.S. Retirement Solutions and Investment Management Division:
Asset Management Segment - Investment Management and
Advisory Services $ 443.9 $ 421.5
Non-proprietary assets under management 109.4 97.6
Total managed by U.S. Retirement Solutions and Investment Management Division 553.3 519.1
Managed by U.S. Individual Life and Group Insurance Division 12.1 13.3
Managed by International Insurance and Investments Division 75.5 69.9
Total assets under management 640.9 602.3
Client assets under administration 116.3 112.1
Total assets under management and administration $ 757.2 $ 714.4

See footnotes on last page.

(1) Adjusted operating income is a non-GAAP measure of performance of our Financial Services Businesses that excludes "Realized investment gains (losses), net", as adjusted,
and related charges and adjustments; net investment gains and losses on trading account assets supporting insurance liabilities; change in experience-rated contractholder
liabilities due to asset value changes; results of divested businesses and discontinued operations; earnings attributable to noncontrolling interests; and the related tax
effects thereof. Adjusted operating income includes equity in earnings of operating joint ventures and the related tax effects thereof. Revenues and benefits and expenses
shown as components of adjusted operating income, are presented on the same basis as pre-tax adjusted operating income and are adjusted for the items above as well.

Realized investment gains (losses) representing profit or loss of certain of our businesses which primarily originate investments for sale or syndication to unrelated
investors, and those associated with terminating hedges of foreign currency earnings and current period yield adjustments are included in adjusted operating income.
Realized investment gains and losses from products that are free standing derivatives or contain embedded derivatives, and from associated derivative portfolios that are
part of an economic hedging program related to the risk of those products, are included in adjusted operating income. Adjusted operating income excludes gains and losses
from changes in value of certain assets and liabilities relating to foreign currency exchange movements that have been economically hedged, as well as gains and losses on
certain investments that are classified as other trading account assets and debt that is carried at fair value.

Adjusted operating income does not equate to "Income from continuing operations" as determined in accordance with GAAP but is the measure of profit or loss we use to
evaluate segment performance. Adjusted operating income is not a substitute for income determined in accordance with GAAP, and our definition of adjusted operating income
may differ from that used by other companies. The items above are important to an understanding of our overall results of operations. However, we believe that the
presentation of adjusted operating income as we measure it for management purposes enhances the understanding of our results of operations by highlighting the results
from ongoing operations and the underlying profitability factors of our businesses.

(2) Net income for the Financial Services Businesses and the Closed Block Business is determined in accordance with GAAP and includes general and administrative expenses
charged to each of the businesses based on the Company's methodology for allocation of such expenses. Cash flows between the Financial Services Businesses and the Closed
Block Business related to administrative expenses are determined by a policy servicing fee arrangement that is based upon insurance and policies in force and statutory
cash premiums. To the extent reported administrative expenses vary from these cash flow amounts, the differences are recorded, on an after-tax basis, as direct equity
adjustments to the equity balances of each business. The direct equity adjustments modify earnings available to holders of Common Stock and Class B Stock for earnings per
share purposes. Earnings per share of Common Stock based on adjusted operating income of the Financial Services Businesses reflects these adjustments as well.

(3) Under new guidance effective January 1, 2009, U.S. GAAP requires unvested share-based payment awards that contain nonforfeitable rights to dividends to be included as
participating securities in the computation of earnings per share pursuant to the two-class method. Under this method, earnings of the Financial Services Businesses are
allocated between Common Stock and the participating awards, as if the awards were a second class of stock. For the three months ended September 30, 2009, includes
earnings related to interest, net of tax, on exchangeable surplus notes associated with the computation of diluted earnings per share.

(4) Premiums from new sales that are expected to be collected over a one year period. Group insurance annualized new business premiums exclude new premiums resulting from
rate changes on existing policies, from additional coverage issued under our Servicemembers' Group Life Insurance contract, and from excess premiums on group universal
life insurance that build cash value but do not purchase face amounts. Group insurance annualized new business premiums include premiums from the takeover of claim
liabilities. Group disability amounts include long-term care products. Excess (unscheduled) and single premium business for the company's domestic individual life and
international insurance operations are included in annualized new business premiums based on a 10% credit.

(5) Actual amounts reflect the impact of currency fluctuations. Foreign denominated activity translated to U.S. dollars at uniform exchange rates for all periods presented,
including Japanese yen 106 per U.S. dollar; Korean won 950 per U.S. dollar. U.S. denominated activity is included based on the amounts as transacted in U.S. dollars.

Prudential Financial, Inc.
Gabrielle Shanin, 973-802-7779

Copyright Business Wire 2009