| Statement Of Financial Position Unclassified - Investment Based Operations (USD $) | ||
| In Millions | Jun. 30, 2009
| Dec. 31, 2008
|
| ASSETS | ||
| Fixed maturities, available for sale, at fair value (amortized cost: 2009-$166,075; 2008-$168,691) | $158,913 | $158,056 |
| Fixed maturities, held to maturity, at amortized cost (fair value: 2009-$4,938; 2008-$3,832) | 4,935 | 3,808 |
| Trading account assets supporting insurance liabilities, at fair value | 14,766 | 13,875 |
| Other trading account assets, at fair value | 3,715 | 4,336 |
| Equity securities, available for sale, at fair value (cost: 2009-$6,019; 2008-$7,288) | 5,917 | 6,065 |
| Commercial mortgage and other loans (includes $508 measured at fair value at June 30, 2009) | 32,694 | 33,114 |
| Policy loans | 9,856 | 9,703 |
| Securities purchased under agreements to resell | 0 | 480 |
| Other long-term investments | 5,716 | 7,012 |
| Short-term investments | 7,137 | 5,576 |
| Total investments | 243,649 | 242,025 |
| Cash and cash equivalents | 13,491 | 15,028 |
| Accrued investment income | 2,231 | 2,266 |
| Deferred policy acquisition costs | 14,474 | 15,126 |
| Deferred income taxes, net | 0 | 1,106 |
| Other assets | 19,605 | 22,365 |
| Separate account assets | 151,266 | 147,095 |
| TOTAL ASSETS | 444,716 | 445,011 |
| LIABILITIES | ||
| Future policy benefits | 121,394 | 121,951 |
| Policyholders' account balances | 101,277 | 99,613 |
| Policyholders' dividends | 1,667 | 1,670 |
| Securities sold under agreements to repurchase | 7,168 | 7,900 |
| Cash collateral for loaned securities | 3,662 | 4,168 |
| Income taxes | 777 | 459 |
| Short-term debt | 3,643 | 10,535 |
| Long-term debt (includes $1,167 measured at fair value at June 30, 2009) | 20,981 | 20,290 |
| Other liabilities | 14,206 | 17,544 |
| Separate account liabilities | 151,266 | 147,095 |
| Total liabilities | 426,041 | 431,225 |
| COMMITMENTS AND CONTINGENT LIABILITIES (See Note 15) | 0 | 0 |
| EQUITY | ||
| Preferred Stock ($.01 par value; 10,000,000 shares authorized; none issued) | 0 | 0 |
| Common Stock ($.01 par value; 1,500,000,000 shares authorized; 641,761,510 and 604,902,444 shares issued as of June 30, 2009 and December 31, 2008, respectively) | 6 | 6 |
| Class B Stock ($.01 par value; 10,000,000 shares authorized; 2,000,000 shares issued and outstanding as of June 30, 2009 and December 31, 2008, respectively) | 0 | 0 |
| Additional paid-in capital | 23,325 | 22,001 |
| Common Stock held in treasury, at cost (181,278,929 and 183,582,565 shares as of June 30, 2009 and December 31, 2008, respectively) | (11,494) | (11,655) |
| Accumulated other comprehensive loss | (5,002) | (7,343) |
| Retained earnings | 11,238 | 10,426 |
| Total Prudential Financial, Inc. equity | 18,073 | 13,435 |
| Noncontrolling interests | 602 | 351 |
| Total equity | 18,675 | 13,786 |
| TOTAL LIABILITIES AND EQUITY | $444,716 | $445,011 |
| Statement Of Financial Position Unclassified - Investment Based Operations (Parenthetical) (USD $) | ||
| In Millions, except Share data | Jun. 30, 2009
| Dec. 31, 2008
|
| Fixed maturities, available for sale, amortized cost | $166,075 | $168,691 |
| Fixed maturities, held to maturity, fair value | 4,938 | 3,832 |
| Equity securities, available for sale, cost | 6,019 | 7,288 |
| Commercial mortgage and other loans, measured at fair value | 508 | 0 |
| Long-term debt, measured at fair value | $1,167 | $0 |
| Preferred Stock, par value | 0.01 | 0.01 |
| Preferred Stock, shares authorized | 10,000,000 | 10,000,000 |
| Preferred Stock, shares issued | 0 | 0 |
| Common Stock, par value | 0.01 | 0.01 |
| Common Stock, shares authorized | 1,500,000,000 | 1,500,000,000 |
| Common Stock, shares issued | 641,761,510 | 604,902,444 |
| Class B Stock, par value | 0.01 | 0.01 |
| Class B Stock, shares authorized | 10,000,000 | 10,000,000 |
| Class B Stock, shares issued | 2,000,000 | 2,000,000 |
| Class B Stock, shares outstanding | 2,000,000 | 2,000,000 |
| Common Stock held in treasury, shares | 181,278,929 | 183,582,565 |
| Statement Of Income Insurance Based Revenue (USD $) | ||||
| In Millions, except Per Share data | 3 Months Ended
Jun. 30, 2009 | 3 Months Ended
Jun. 30, 2008 | 6 Months Ended
Jun. 30, 2009 | 6 Months Ended
Jun. 30, 2008 |
| REVENUES | ||||
| Premiums | $4,187 | $3,927 | $8,221 | $7,885 |
| Policy charges and fee income | 713 | 824 | 1,439 | 1,649 |
| Net investment income | 2,835 | 3,026 | 5,690 | 6,052 |
| Asset management fees and other income | 1,446 | 824 | 2,245 | 1,485 |
| Realized investment gains (losses), net: | ||||
| Other-than-temporary impairments on fixed maturity securities | (1,312) | (661) | (3,167) | (1,200) |
| Other-than-temporary impairments on fixed maturity securities transferred to Other Comprehensive Income | 813 | 0 | 2,063 | 0 |
| Other realized investment gains (losses), net | (1,776) | (237) | (1,026) | (610) |
| Total realized investment gains (losses), net | (2,275) | (898) | (2,130) | (1,810) |
| Total revenues | 6,906 | 7,703 | 15,465 | 15,261 |
| BENEFITS AND EXPENSES | ||||
| Policyholders' benefits | 3,886 | 4,011 | 8,227 | 8,046 |
| Interest credited to policyholders' account balances | 1,099 | 745 | 2,268 | 1,382 |
| Dividends to policyholders | 277 | 158 | 276 | 717 |
| General and administrative expenses | 1,652 | 2,161 | 4,690 | 4,426 |
| Total benefits and expenses | 6,914 | 7,075 | 15,461 | 14,571 |
| INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES AND EQUITY IN EARNINGS OF OPERATING JOINT VENTURES | (8) | 628 | 4 | 690 |
| Income tax expense (benefit) | (162) | 60 | (158) | 83 |
| INCOME FROM CONTINUING OPERATIONS BEFORE EQUITY IN EARNINGS OF OPERATING JOINT VENTURES | 154 | 568 | 162 | 607 |
| Equity in earnings of operating joint ventures, net of taxes | 5 | 24 | (1) | 67 |
| INCOME FROM CONTINUING OPERATIONS | 159 | 592 | 161 | 674 |
| Income (loss) from discontinued operations, net of taxes | 21 | (3) | 22 | (1) |
| NET INCOME | 180 | 589 | 183 | 673 |
| Less: Income attributable to noncontrolling interests | 17 | 8 | 6 | 32 |
| NET INCOME ATTRIBUTABLE TO PRUDENTIAL FINANCIAL, INC. | $163 | $581 | $177 | $641 |
| Basic: | ||||
| Income from continuing operations attributable to Prudential Financial, Inc. per share of Common Stock | 1.21 | 1.34 | 1.23 | 1.5 |
| Income (loss) from discontinued operations, net of taxes | 0.04 | -0.01 | 0.05 | $0 |
| Net income attributable to Prudential Financial, Inc. per share of Common Stock | 1.25 | 1.33 | 1.28 | 1.5 |
| Diluted: | ||||
| Income from continuing operations attributable to Prudential Financial, Inc. per share of Common Stock | 1.2 | 1.33 | 1.23 | 1.49 |
| Income (loss) from discontinued operations, net of taxes | 0.05 | -0.01 | 0.05 | $0 |
| Net income attributable to Prudential Financial, Inc. per share of Common Stock | 1.25 | 1.32 | 1.28 | 1.49 |
| Basic and Diluted: | ||||
| Income (loss) from continuing operations attributable to Prudential Financial, Inc. per share of Class B Stock | -1.9 | 0.5 | -1.9 | -9.5 |
| Income from discontinued operations, net of taxes | $0 | $0 | $0 | $0 |
| Net income (loss) attributable to Prudential Financial, Inc. per share of Class B Stock | -1.9 | 0.5 | -1.9 | -9.5 |
| Statement Of Shareholders Equity And Other Comprehensive Income (USD $) | |||||||||
| In Millions | Common Stock
| Class B Stock
| Additional Paid-in Capital
| Retained Earnings
| Common Stock Held in Treasury
| Accumulated Other Comprehensive Loss
| Total Prudential Financial, Inc. Equity
| Noncontrolling Interests
| Total
|
| Beginning Balance at Dec. 31, 2007 | $6 | $0 | $20,945 | $11,809 | ($9,693) | $447 | $23,514 | $409 | $23,923 |
| Common Stock acquired | (1,750) | (1,750) | (1,750) | ||||||
| Contributions from noncontrolling interests | 5 | 5 | |||||||
| Distributions to noncontrolling interests | (152) | (152) | |||||||
| Stock-based compensation programs | (13) | 128 | 115 | 115 | |||||
| Impact of Company's investment in Wachovia Securities due to addition of AG Edwards business, net of tax | 977 | 977 | 977 | ||||||
| Cumulative effect of changes in accounting principles, net of taxes | 3 | 3 | 3 | ||||||
| Comprehensive income: | |||||||||
| Net income | 641 | 641 | 32 | 673 | |||||
| Other comprehensive income (loss), net of tax | (1,892) | (1,892) | (1) | (1,893) | |||||
| Total comprehensive income (loss) | (1,251) | 31 | (1,220) | ||||||
| Ending Balance at Jun. 30, 2008 | 6 | 0 | 21,922 | 12,440 | (11,315) | (1,445) | 21,608 | 293 | 21,901 |
| Beginning Balance at Mar. 31, 2008 | 6 | 0 | |||||||
| Comprehensive income: | |||||||||
| Ending Balance at Jun. 30, 2008 | 6 | 0 | |||||||
| Beginning Balance at Dec. 31, 2008 | 6 | 0 | 22,001 | 10,426 | (11,655) | (7,343) | 13,435 | 351 | 13,786 |
| Common Stock issued | 1,391 | 1,391 | 1,391 | ||||||
| Contributions from noncontrolling interests | 278 | 278 | |||||||
| Distributions to noncontrolling interests | (8) | (8) | |||||||
| Stock-based compensation programs | (67) | (29) | 161 | 65 | 65 | ||||
| Cumulative effect of changes in accounting principles, net of taxes | 664 | (664) | |||||||
| Comprehensive income: | |||||||||
| Net income | 177 | 177 | 6 | 183 | |||||
| Other comprehensive income (loss), net of tax | 3,005 | 3,005 | (25) | 2,980 | |||||
| Total comprehensive income (loss) | 3,182 | (19) | 3,163 | ||||||
| Ending Balance at Jun. 30, 2009 | 6 | 0 | 23,325 | 11,238 | (11,494) | (5,002) | 18,073 | 602 | 18,675 |
| Beginning Balance at Mar. 31, 2009 | 6 | 0 | |||||||
| Comprehensive income: | |||||||||
| Ending Balance at Jun. 30, 2009 | $6 | $0 |
| Statement Of Cash Flows Indirect Investment Based Operations (USD $) | ||
| In Millions | 6 Months Ended
Jun. 30, 2009 | 6 Months Ended
Jun. 30, 2008 |
| CASH FLOWS FROM OPERATING ACTIVITIES | ||
| Net income | $183 | $673 |
| Adjustments to reconcile net income to net cash provided by operating activities: | ||
| Realized investment (gains) losses, net | 2,130 | 1,810 |
| Policy charges and fee income | (786) | (537) |
| Interest credited to policyholders' account balances | 2,268 | 1,382 |
| Depreciation and amortization | 192 | 208 |
| (Gains) losses on trading account assets supporting insurance liabilities, net | (840) | 375 |
| Change in: | ||
| Deferred policy acquisition costs | (133) | (513) |
| Future policy benefits and other insurance liabilities | (1,033) | 1,751 |
| Other trading account assets | 1,977 | 302 |
| Income taxes | (152) | (465) |
| Other, net | (47) | (1,364) |
| Cash flows from operating activities | 3,759 | 3,622 |
| Proceeds from the sale/maturity/prepayment of: | ||
| Fixed maturities, available for sale | 25,410 | 46,923 |
| Fixed maturities, held to maturity | 168 | 111 |
| Trading account assets supporting insurance liabilities and other trading account assets | 14,969 | 11,952 |
| Equity securities, available for sale | 840 | 1,899 |
| Commercial mortgage and other loans | 1,628 | 1,162 |
| Policy loans | 844 | 716 |
| Other long-term investments | 672 | 525 |
| Short-term investments | 12,887 | 16,159 |
| Payments for the purchase/origination of: | ||
| Fixed maturities, available for sale | (22,270) | (45,610) |
| Fixed maturities, held to maturity | (952) | (24) |
| Trading account assets supporting insurance liabilities and other trading account assets | (16,243) | (13,148) |
| Equity securities, available for sale | (326) | (2,151) |
| Commercial mortgage and other loans | (1,609) | (3,404) |
| Policy loans | (785) | (737) |
| Other long-term investments | (905) | (1,477) |
| Short-term investments | (14,295) | (17,807) |
| Other, net | 158 | (84) |
| Cash flows from (used in) investing activities | 191 | (4,995) |
| CASH FLOWS FROM FINANCING ACTIVITIES | ||
| Policyholders' account deposits | 15,513 | 16,995 |
| Policyholders' account withdrawals | (15,273) | (11,013) |
| Net change in securities sold under agreements to repurchase and cash collateral for loaned securities | (974) | (4,838) |
| Proceeds from the issuance of Common Stock | 1,391 | 0 |
| Cash dividends paid on Common Stock | (37) | (83) |
| Net change in financing arrangements (maturities 90 days or less) | (3,386) | (1,244) |
| Common Stock acquired | 0 | (1,717) |
| Common Stock reissued for exercise of stock options | 22 | 56 |
| Proceeds from the issuance of debt (maturities longer than 90 days) | 2,868 | 5,788 |
| Repayments of debt (maturities longer than 90 days) | (5,494) | (3,444) |
| Excess tax benefits from share-based payment arrangements | 0 | 15 |
| Other, net | (64) | (276) |
| Cash flows from (used in) financing activities | (5,434) | 239 |
| Effect of foreign exchange rate changes on cash balances | (53) | 17 |
| NET DECREASE IN CASH AND CASH EQUIVALENTS | (1,537) | (1,117) |
| CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR | 15,028 | 11,060 |
| CASH AND CASH EQUIVALENTS, END OF PERIOD | 13,491 | 9,943 |
| NON-CASH TRANSACTIONS DURING THE PERIOD | ||
| Impact on Company's investment in Wachovia Securities due to addition of A.G. Edwards business, net of tax | 0 | 977 |
| Treasury Stock shares issued for stock-based compensation programs | $97 | $87 |
| Notes to Financial Statements | |
| 6 Months Ended
Jun. 30, 2009 USD / shares | |
| Notes to Financial Statements [Abstract] | |
| 1. BUSINESS AND BASIS OF PRESENTATION | 1.BUSINESS AND BASIS OF PRESENTATION Prudential Financial, Inc. (Prudential Financial) and its subsidiaries (collectively, Prudential or the Company) provide a wide range of insurance, investment management, and other financial products and services to both individual and institutional customers throughout the United States and in many other countries. Principal products and services provided include life insurance, annuities, retirement-related services, mutual funds, investment management, and real estate services. The Company has organized its principal operations into the Financial Services Businesses and the Closed Block Business. The Financial Services Businesses operate through three operating divisions: U.S. Retirement Solutions and Investment Management, U.S. Individual Life and Group Insurance, and International Insurance and Investments. The Companys real estate and relocation services business as well as businesses that are not sufficiently material to warrant separate disclosure and businesses to be divested, including the Companys investment in the retail securities brokerage joint venture Wachovia Securities Financial Holdings, LLC (Wachovia Securities), are included in Corporate and Other operations within the Financial Services Businesses. The Closed Block Business, which includes the Closed Block (see Note 6), is managed separately from the Financial Services Businesses. The Closed Block Business was established on the date of demutualization and includes the Companys in force participating insurance and annuity products and assets that are used for the payment of benefits and policyholders dividends on these products, as well as other assets and equity that support these products and related liabilities. In connection with the demutualization, the Company ceased offering these participating products. Basis of Presentation The Unaudited Interim Consolidated Financial Statements include the accounts of Prudential Financial, entities over which the Company exercises control, including majority-owned subsidiaries and minority-owned entities such as limited partnerships in which the Company is the general partner, and variable interest entities in which the Company is considered the primary beneficiary. The Unaudited Interim Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) on a basis consistent with reporting interim financial information in accordance with instructions to Form 10-Q and Article 10 of Regulation S-X of the Securities and Exchange Commission (SEC). Intercompany balances and transactions have been eliminated. The Company has evaluated subsequent events through August7, 2009, the date these financial statements were issued as part of this Quarterly Report on Form 10-Q. In the opinion of management, all adjustments necessary for a fair statement of the financial position and results of operations have been made. All such adjustments are of a normal, recurring nature. Interim results are not necessarily indicative of the results that may be expected for the full year. These financial statements |
| 2. ACCOUNTING POLICIES AND PRONOUNCEMENTS | 2.ACCOUNTING POLICIES AND PRONOUNCEMENTS Share-Based Payments The Company issues employee share-based compensation awards, under a plan authorized by the Board of Directors, that are subject to specific vesting conditions. Generally the awards vest ratably over a three-year period, the nominal vesting period, or at the date the employee retires (as defined by the plan), if earlier. The Company accounts for those awards granted between (a)the adoption of the fair value recognition provisions of Statement of Financial Accounting Standards (SFAS) No.123 Accounting for Stock Based Compensation on January1, 2003, and (b)the adoption on January1, 2006 of SFAS No.123(R) which specify that an employee vests in the award upon retirement, using the nominal vesting period approach. Under this approach, the Company records compensation expense over the nominal vesting period. If the employee retires before the end of the nominal vesting period, any remaining unrecognized compensation cost is recognized at the date of retirement. Upon the adoption of SFAS No.123(R), the Company revised its approach to the recognition of compensation costs for awards granted to retirement-eligible employees and awards that vest when an employee becomes retirement-eligible to apply the non-substantive vesting period approach to all new share-based compensation awards granted after January1, 2006. Under this approach, all compensation cost is recognized on the date of grant for awards issued to retirement-eligible employees, or over the period from the grant date to the date retirement eligibility is achieved, if that is expected to occur during the nominal vesting period. If the Company had accounted for all share-based compensation awards granted after January1, 2003 under the non-substantive vesting period approach, net income of the Financial Services Businesses for the three and six months ended June30, 2008 would have been increased by $0.2 million and $1 million, respectively, with no reportable impact to the earnings per share of Common Stock, on both a basic and diluted basis. There is no impact to net income for 2009, as all compensation expense relating to share-based compensation awards accounted for under the nominal vesting period approach had been recognized in net income by December31, 2008. Investments in Debt and Equity Securities Fixed maturities are comprised of bonds, notes and redeemable preferred stock. Fixed maturities classified as available for sale are carried at fair value. See Note 12 for additional information regarding the determination of fair value. Fixed maturities that the Company has both the positive intent and ability to hold to maturity are carried at amortized cost and classified as held to maturity. The amortized cost of fixed maturities is adjusted for amortization of premiums and accretion of discounts to maturity. Interest income, as well as the related amortization of premium and accretion of discount is included in Net investment income under the effective yield method. For mortgage-backed and asset-backed securities, the effective yield is based on estimated cash flows, including prepayment assumptions b |
| 3. ACQUISITIONS AND DISPOSITIONS | 3. ACQUISITIONS AND DISPOSITIONS Acquisition of Yamato Life On May1, 2009, the Companys Gibraltar Life operations acquired Yamato Life, a Japanese life insurance company that declared bankruptcy in October 2008. Gibraltar Life served as the reorganization sponsor for Yamato and under the reorganization agreement acquired Yamato by contributing $72 million of capital to Yamato. As of June30, 2009, the Statement of Financial Position of Prudential Financial reflects $2.3 billion of assets and $2.3 billion of liabilities related to Yamato. Subsequent to the acquisition, the Company renamed the acquired company Prudential Financial of Japan Life Insurance Company Ltd. Acquisition of Hyundai Investment and Securities Co., Ltd. In 2004, the Company acquired an 80 percent interest in Hyundai Investment and Securities Co., Ltd., a Korean asset management firm, from an agency of the Korean government, for $301 million in cash, including $210 million used to repay debt assumed. Subsequent to the acquisition, the company was renamed Prudential Investment Securities Co., Ltd. On January25, 2008, the Company acquired the remaining 20 percent for $90 million. Additional Investment in UBI Pramerica On January18, 2008, the Company made an additional investment of $154 million in its UBI Pramerica operating joint venture in Italy, which is accounted for under the equity method. This additional investment was necessary to maintain the Companys ownership interest at 35 percent and was a result of the merger of the Companys joint venture partner with another Italian bank, and the subsequent consolidation of their asset management companies into the UBI Pramerica joint venture. Discontinued Operations Income (loss) from discontinued businesses, including charges upon disposition, are as follows: ThreeMonthsEnded June30, SixMonthsEnded June30, 2009 2008 2009 2008 (in millions) Real estate investments sold or held for sale $ 26 $ $ 28 $ 1 Equity sales, trading and research operations 1 (1 ) 1 (2 ) International securities operations 1 (3 ) 1 (2 ) Mexican asset management operations (1 ) (1 ) 1 Income (loss) from discontinued operations before income taxes 27 (4 ) 29 (2 ) Income tax expense (benefit) 6 (1 ) 7 (1 ) Income (loss) from discontinued operations, net of taxes $ 21 $ (3 ) $ 22 $ (1 ) Real estate investments sold or held for sale reflects the income from discontinued real estate investments. The Companys Unaudited Interim Consolidated Statements of Financial Position include total assets and total liabilities related to discontinued businesses of $157 million and $93 million, respectively, as of June30, 2009 and $218 million and $149 million, respectively, as of December31, 2008. Charges recorded in connection with the disposals of businesses include estimates that are subject to subsequent adjustment. |
| 4. INVESTMENTS | 4.INVESTMENTS Fixed Maturities and Equity Securities The following tables provide information relating to fixed maturities and equity securities (excluding investments classified as trading) as of the dates indicated: June30, 2009 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Other-than- temporary impairments in AOCI(3) (in millions) Fixed maturities, available for sale U.S. Treasury securities and obligations of U.S. government authorities and agencies $ 6,260 $ 483 $ 180 $ 6,563 $ Obligations of U.S. states and their political subdivisions 714 36 2 748 Foreign government bonds 34,772 1,135 160 35,747 Corporate securities 86,436 2,120 5,707 82,849 (99 ) Asset-backed securities(1) 14,516 117 4,125 10,508 (1,748 ) Commercial mortgage-backed securities 11,355 44 1,148 10,251 19 Residential mortgage-backed securities(2) 12,022 410 185 12,247 (11 ) Total fixed maturities, available for sale $ 166,075 $ 4,345 $ 11,507 $ 158,913 $ (1,839 ) Equity securities, available for sale $ 6,019 $ 557 $ 659 $ 5,917 (1) Includes credit tranched securities collateralized by sub-prime mortgages, auto loans, credit cards, education loans, and other asset types. (2) Includes publicly traded agency pass-through securities and collateralized mortgage obligations. (3) Represents the amount of other-than-temporary impairment losses in Accumulated other comprehensive income (loss), or AOCI, which, from January1, 2009, were not included in earnings under FSP FAS 115-2 and FAS 124-2. Amount excludes $113 million of net unrealized gains on impaired securities relating to changes in the value of such securities subsequent to the impairment measurement date. June30, 2009 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Other-than- temporary impairments in AOCI(3) (in millions) Fixed maturities, held to maturity Foreign government bonds $ 1,022 $ 35 $ 1 $ 1,056 $ Corporate securities 835 123 712 Asset-backed securities(1) 902 9 6 905 Commercial mortgage-backed securities 446 64 510 Residential mortgage-backed securities(2) 1,730 31 6 1,755 Total fixed maturities, held to maturity $ 4,935 $ 139 $ 136 $ 4,938 $ (1) Includes credit tranched securities collateralized by sub-prime mortgages, auto loans, credit cards, education loans, and other asset types. (2) Includes publicly traded agency pass-through securities and collateralized mortgage obligations. (3) Represents the amount of other-than-temporary impairment losses in Accum |
| 5. VARIABLE INTEREST ENTITIES | 5.VARIABLE INTEREST ENTITIES In the normal course of its activities, the Company enters into relationships with various special purpose entities and other entities that are deemed to be variable interest entities (VIEs), in accordance with FIN No.46(R), Consolidation of Variable Interest Entities. A VIE is an entity that either (1)has equity investors that lack certain essential characteristics of a controlling financial interest (including the ability to control the entity, the obligation to absorb the entitys expected losses and the right to receive the entitys expected residual returns) or (2)lacks sufficient equity to finance its own activities without financial support provided by other entities, which in turn would be expected to absorb at least some of the expected losses of the VIE. If the Company determines that it stands to absorb a majority of the VIEs expected losses or to receive a majority of the VIEs expected residual returns, the Company would be deemed to be the VIEs primary beneficiary and would be required to consolidate the VIE. Consolidated Variable Interest Entities for which the Company is the Sponsor The Company is the sponsor of certain asset-backed investment vehicles (commonly referred to as collateralized debt obligations, or CDOs) and certain other vehicles for which the Company earns fee income for investment management services, including certain investment structures which the Companys asset management business invests with other co-investors in investment funds referred to as feeder funds. The Company sells or syndicates investments through these vehicles, principally as part of the proprietary investing activity of the Companys asset management businesses. Additionally, the Company may invest in debt or equity securities issued by these vehicles. CDOs raise capital by issuing debt securities, and use the proceeds to purchase investments, typically interest-bearing financial instruments. The Company analyzes these relationships to determine whether or not it absorbs the majority of expected losses or receives the majority of the expected residual returns, and thus is the primary beneficiary. This analysis includes a review of the Companys size and relative position in the capital structure and/or a review of cash flow projections driven by assumptions regarding the underlying collateral including default rate, recovery rate, deal call probability, reinvestment rates and fees and expenses. The Company has not provided material financial or other support that was not contractually required to any VIE for which it is the sponsor. The Company has determined that it is the primary beneficiary of certain VIEs that it sponsors, including one CDO and certain other investment structures, as it absorbs a majority of the expected losses or receives the majority of the expected residual returns. These VIEs are consolidated and reflected in the table below. The table below reflects the carrying amount and balance sheet caption in which the assets and liabilities of consolidated VIEs for which the Company is the sponsor are reported. The creditors of these VIEs do not have recourse to the Company in excess |
| 6. CLOSED BLOCK | 6.CLOSED BLOCK On the date of demutualization, Prudential Insurance established a Closed Block for certain individual life insurance policies and annuities issued by Prudential Insurance in the U.S. The recorded assets and liabilities were allocated to the Closed Block at their historical carrying amounts. The Closed Block forms the principal component of the Closed Block Business. The policies included in the Closed Block are specified individual life insurance policies and individual annuity contracts that were in force on the effective date of the Plan of Reorganization and for which Prudential Insurance is currently paying or expects to pay experience-based policy dividends. Assets have been allocated to the Closed Block in an amount that has been determined to produce cash flows which, together with revenues from policies included in the Closed Block, are expected to be sufficient to support obligations and liabilities relating to these policies, including provision for payment of benefits, certain expenses, and taxes and to provide for continuation of the policyholder dividend scales in effect in 2000, assuming experience underlying such scales continues. To the extent that, over time, cash flows from the assets allocated to the Closed Block and claims and other experience related to the Closed Block are, in the aggregate, more or less favorable than what was assumed when the Closed Block was established, total dividends paid to Closed Block policyholders in the future may be greater than or less than the total dividends that would have been paid to these policyholders if the policyholder dividend scales in effect in 2000 had been continued. Any cash flows in excess of amounts assumed will be available for distribution over time to Closed Block policyholders and will not be available to stockholders. If the Closed Block has insufficient funds to make guaranteed policy benefit payments, such payments will be made from assets outside of the Closed Block. The Closed Block will continue in effect as long as any policy in the Closed Block remains in force unless, with the consent of the New Jersey insurance regulator, it is terminated earlier. The excess of Closed Block Liabilities over Closed Block Assets at the date of the demutualization (adjusted to eliminate the impact of related amounts in Accumulated other comprehensive income (loss)) represented the estimated maximum future earnings at that date from the Closed Block expected to result from operations attributed to the Closed Block after income taxes. In establishing the Closed Block, the Company developed an actuarial calculation of the timing of such maximum future earnings. If actual cumulative earnings of the Closed Block from inception through the end of any given period are greater than the expected cumulative earnings, only the expected earnings will be recognized in income. Any excess of actual cumulative earnings over expected cumulative earnings will represent undistributed accumulated earnings attributable to policyholders, which are recorded as a policyholder dividend obligation. The policyholder dividend obligation represents amounts to be paid to Closed |
| 7. EQUITY | 7.EQUITY The Company has outstanding two classes of common stock: the Common Stock and the Class B Stock. The changes in the number of shares issued, held in treasury and outstanding are as follows for the periods indicated: Common Stock ClassBStock Issued Held In Treasury Outstanding Issued and Outstanding (in millions) Balance, December31, 2008 604.9 183.6 421.3 2.0 Common Stock issued(1) 36.9 36.9 Common Stock acquired Stock-based compensation programs(2) (2.3 ) 2.3 Balance, June30, 2009 641.8 181.3 460.5 2.0 (1) In June 2009, the Company issued 36,858,975 shares of Common Stock in a public offering at a price of $39.00 per share for net proceeds of $1.391 billion. (2) Represents net shares issued from treasury pursuant to the Companys stock-based compensation programs. Comprehensive Income The components of comprehensive income are as follows: ThreeMonthsEnded June30, Six Months Ended June30, 2009 2008 2009 2008 (in millions) Net income $ 180 $ 589 $ 183 $ 673 Other comprehensive income (loss), net of taxes: Change in foreign currency translation adjustments 188 9 (140 ) 260 Change in net unrealized investment gains (losses)(1) 3,369 (926 ) 3,102 (2,164 ) Change in pension and postretirement unrecognized net periodic benefit 9 12 18 11 Other comprehensive income (loss)(2) 3,566 (905 ) 2,980 (1,893 ) Comprehensive income (loss) 3,746 (316 ) 3,163 (1,220 ) Comprehensive (income) loss attributable to noncontrolling interests (32 ) (9 ) 19 (31 ) Comprehensive income (loss) attributable to Prudential Financial, Inc. $ 3,714 $ (325 ) $ 3,182 $ (1,251 ) (1) Includes cash flow hedges of $(55) million and $23 million for the three months ended June30, 2009 and 2008, respectively and $(30) million and $(53) million for the six months ended June30, 2009 and 2008, respectively. (2) Amounts are net of tax expense (benefit) of $1,719 million and $(625) million for the three months ended June30, 2009 and 2008, respectively and $1,492 million and $(1,156) million for the six months ended June30, 2009 and 2008, respectively. The balance of and changes in each component of Accumulated other comprehensive income (loss) attributable to Prudential Financial, Inc. for the six months ended June30, 2009 are as follows (net of taxes): AccumulatedOtherComprehensiveIncome(Loss)Attributableto Prudential Financial, Inc. Foreign Currency Translation Adjustments Net Unrealized Investment Gains (Losses)(1) Pension and Postretirement Unrecognized Net Periodic Benefit (Cost) Total Accumulated Other Comprehensive Income(Loss) (i |
| 8. EARNINGS PER SHARE | 8.EARNINGS PER SHARE The Company has outstanding two separate classes of common stock. The Common Stock reflects the performance of the Financial Services Businesses and the Class B Stock reflects the performance of the Closed Block Business. Accordingly, earnings per share is calculated separately for each of these two classes of common stock. Net income for the Financial Services Businesses and the Closed Block Business is determined in accordance with U.S. GAAP and includes general and administrative expenses charged to each of the respective businesses based on the Companys methodology for the 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 the businesses. The direct equity adjustments modify the earnings available to each of the classes of common stock for earnings per share purposes. Common Stock A reconciliation of the numerators and denominators of the basic and diluted per share computations is as follows: Three Months Ended June30, 2009 2008 Income Weighted Average Shares Per Share Amount Income Weighted Average Shares Per Share Amount (in millions, except per share amounts) Basic earnings per share Income from continuing operations attributable to the Financial Services Businesses $ 534 $ 577 Direct equity adjustment 11 14 Less: Income attributable to noncontrolling interests 17 8 Less: Earnings allocated to participating unvested share-based payment awards 6 4 Income from continuing operations attributable to the Financial Services Businesses available to holders of Common Stock after direct equity adjustment $ 522 432.9 $ 1.21 $ 579 431.9 $ 1.34 Add: Earnings allocated to participating unvested share-based payment awardsBasic $ 6 $ 4 Less: Earnings allocated to participating unvested share-based payment awardsDiluted 6 4 Effect of dilutive securities and compensation programs Stock options 1.1 3.6 Deferred and long-term compensation programs 0.3 1.0 Diluted earnings per share Income from continuing operations attributable to the Financial Services Businesses available to holders of Common Stock after direct equity adjustment $ 522 434.3 $ 1.20 $ 579 436.5 $ 1.33 Six Months Ended June30, 2009 2008 Income Weighted Average Shares |
| 9. SHORT-TERM AND LONG-TERM DEBT | 9. SHORT-TERM AND LONG-TERM DEBT Commercial Paper Prudential Financial has a commercial paper program rated A-1 by Standard Poors Rating Services (SP), P-2 by Moodys Investor Service, Inc. (Moodys) and F2 by Fitch Ratings Ltd. (Fitch) as of June30, 2009. Prudential Financials outstanding commercial paper borrowings were $505 million and $1,243 million as of June30, 2009 and December31, 2008, respectively. Prudential Funding, LLC, a wholly owned subsidiary of Prudential Insurance, has a commercial paper program, rated A-1+ by SP, P-1 by Moodys and F1 by Fitch as of June30, 2009. Prudential Fundings outstanding commercial paper and master note borrowings were $1,718 million and $4,354 million as of June30, 2009 and December31, 2008, respectively. Prudential Financial has issued a subordinated guarantee covering Prudential Fundings domestic commercial paper program. As of June30, 2009 and December31, 2008, the weighted average maturity of the total commercial paper outstanding was 32 and 29 days, respectively. Both Prudential Financials and Prudential Fundings commercial paper programs were granted approval during the fourth quarter of 2008 to participate in the Commercial Paper Funding Facility (CPFF) sponsored by the Federal Reserve Bank of New York. Commercial paper programs must maintain ratings of at least A-1/P-1/F1 by at least two rating agencies in order to be eligible for the CPFF. As of June30, 2009, neither Prudential Financial nor Prudential Funding had any commercial paper outstanding under the CPFF. On February19, 2009, the commercial paper credit rating of Prudential Financial was downgraded by Fitch from F1 to F2. Consequently, as of that date, Prudential Financial became ineligible to issue commercial paper under the CPFF. Prudential Funding continues to be eligible based on its current credit ratings to sell to the CPFF three-month unsecured U.S. dollar denominated commercial paper up to a maximum of $9.815 billion, less the outstanding amount of any non-CPFF commercial paper at any applicable time. Access to the CPFF for the issuance of new commercial paper is scheduled to terminate on February1, 2010, unless such date is extended by the Federal Reserve Bank of New York. Convertible Senior Notes On December12, 2007, Prudential Financial issued in a private placement $3.0 billion of floating rate convertible senior notes that are convertible by the holders at any time after issuance into cash and shares of Prudential Financials Common Stock. The conversion price, $132.39 per share, is subject to adjustment upon certain corporate events. The conversion feature requires net settlement in shares; therefore, upon conversion, a holder would receive cash up to the par amount of the convertible notes surrendered for conversion and shares of Prudential Financial Common Stock only for the portion of the settlement amount in excess of the par amount, if any. These notes are redeemable by Prudential Financial, at par plus accrued interest, on or after June16, 2009. Holders of the notes may also require Prudential Financial to repurchase the notes, at par plus accrued interest, on contractually specified dates, |
| 10. EMPLOYEE BENEFIT PLANS | 10.EMPLOYEE BENEFIT PLANS The Company has funded and non-funded contributory and non-contributory defined benefit pension plans, which cover substantially all of its employees. For some employees, benefits are based on final average earnings and length of service, while benefits for other employees are based on an account balance that takes into consideration age, service and earnings during their career. The Company provides certain health care and life insurance benefits for its retired employees, their beneficiaries and covered dependents (other postretirement benefits). The health care plan is contributory; the life insurance plan is non-contributory. Substantially all of the Companys U.S. employees may become eligible to receive other postretirement benefits if they retire after age 55 with at least 10 years of service or under certain circumstances after age 50 with at least 20 years of continuous service. The Company has elected to amortize its transition obligation for other postretirement benefits over 20years. Net periodic (benefit) cost included in General and administrative expenses includes the following components: Three Months Ended June30, Pension Benefits OtherPostretirement Benefits 2009 2008 2009 2008 (in millions) Components of net periodic (benefit) cost Service cost $ 41 $ 38 $ 3 $ 3 Interest cost 115 117 29 31 Expected return on plan assets (182 ) (180 ) (27 ) (40 ) Amortization of prior service cost 7 11 (3 ) (3 ) Amortization of actuarial (gain) loss, net 8 4 11 Special termination benefits Net periodic (benefit) cost $ (11 ) $ (10 ) $ 13 $ (9 ) Six Months Ended June30, Pension Benefits OtherPostretirement Benefits 2009 2008 2009 2008 (in millions) Components of net periodic (benefit) cost Service cost $ 82 $ 77 $ 6 $ 6 Interest cost 230 234 58 62 Expected return on plan assets (364 ) (360 ) (54 ) (80 ) Amortization of prior service cost 14 22 (6 ) (6 ) Amortization of actuarial (gain) loss, net 16 8 22 Special termination benefits 2 Net periodic (benefit) cost $ (22 ) $ (17 ) $ 26 $ (18 ) |
| 11. SEGMENT INFORMATION | 11.SEGMENT INFORMATION Segments The Company has organized its principal operations into the Financial Services Businesses and the Closed Block Business. Within the Financial Services Businesses, the Company operates through three divisions, which together encompass seven reportable segments. The Companys real estate and relocation services business as well as businesses that are not sufficiently material to warrant separate disclosure and businesses to be divested, including the Companys investment in Wachovia Securities, are included in Corporate and Other operations within the Financial Services Businesses. Collectively, the businesses that comprise the three operating divisions and Corporate and Other are referred to as the Financial Services Businesses. Adjusted Operating Income In managing the Financial Services Businesses, the Company analyzes the operating performance of each segment using adjusted operating income. Adjusted operating income does not equate to income (loss) from continuing operations before income taxes and equity in earnings of operating joint ventures or net income as determined in accordance with U.S. GAAP but is the measure of segment profit or loss used by the Company to evaluate segment performance and allocate resources, and consistent with SFAS No.131, Disclosures about Segments of an Enterprise and Related Information, is the measure of segment performance presented below. Adjusted operating income is calculated by adjusting each segments income (loss) from continuing operations before income taxes and equity in earnings of operating joint ventures for the following items, which are described in greater detail below: realized investment gains (losses), net, and related charges and adjustments; net investment gains and losses on trading account assets supporting insurance liabilities and changes in experience-rated contractholder liabilities due to asset value changes; the contribution to income/loss of divested businesses that have been or will be sold or exited but that did not qualify for discontinued operations accounting treatment under U.S. GAAP; and equity in earnings of operating joint ventures and earnings attributable to noncontrolling interests. These items are important to an understanding of overall results of operations. Adjusted operating income is not a substitute for income determined in accordance with U.S. GAAP, and the Companys definition of adjusted operating income may differ from that used by other companies. However, the Company believes that the presentation of adjusted operating income as measured for management purposes enhances the understanding of results of operations by highlighting the results from ongoing operations and the underlying profitability factors of the Financial Services Businesses. Realized investment gains (losses), net, and related charges and adjustments. Adjusted operating income excludes realized investment gains (losses), net, except as indicated below. A significant element of realized investment gains and losses are impairments and credit-related and interest rate-related gains an |
| 12. FAIR VALUE OF ASSETS AND LIABILITIES | 12. FAIR VALUE OF ASSETS AND LIABILITIES Fair Value MeasurementFair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. SFAS No.157 establishes a framework for measuring fair value that includes a hierarchy used to classify the inputs used in measuring fair value. The hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three levels. The level in the fair value hierarchy within which the fair value measurement falls is determined based on the lowest level input that is significant to the fair value measurement. The levels of the fair value hierarchy are as follows: Level 1Fair value is based on unadjusted quoted prices in active markets that are accessible to the Company for identical assets or liabilities. These generally provide the most reliable evidence and are used to measure fair value whenever available. Active markets are defined as having the following for the measured asset/liability: i) many transactions, ii) current prices, iii) price quotes not varying substantially among market makers, iv) narrow bid/ask spreads and v) most information publicly available. The Companys Level 1 assets and liabilities primarily include certain cash equivalents and short term investments, equity securities and derivative contracts that are traded in an active exchange market. Prices are obtained from readily available sources for market transactions involving identical assets or liabilities. Level 2Fair value is based on significant inputs, other than Level 1 inputs, that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability through corroboration with observable market data. Level 2 inputs include quoted market prices in active markets for similar assets and liabilities, quoted market prices in markets that are not active for identical or similar assets or liabilities and other market observable inputs. The Companys Level 2 assets and liabilities include: fixed maturities (corporate public and private bonds, most government securities, certain asset-backed and mortgage-backed securities, etc.), certain equity securities and commercial mortgage loans, short-term investments and certain cash equivalents (primarily commercial paper), and certain over-the-counter derivatives. Valuations are generally obtained from third party pricing services for identical or comparable assets or liabilities or through the use of valuation methodologies using observable market inputs. Prices from pricing services are sourced from multiple vendors, and a vendor hierarchy is maintained by asset type based on historical pricing experience and vendor expertise. The Company generally receives prices from multiple pricing services for each security, but ultimately uses the price from the pricing service highest in the vendor hierarchy based on the respective asset type. In order to validate reasonability, prices are reviewed by internal asset managers through comparison with directly observed recent market trades and in |
| 13. INVESTMENT IN WACHOVIA SECURITIES | 13. INVESTMENT IN WACHOVIA SECURITIES On July1, 2003, the Company combined its retail securities brokerage and clearing operations with those of Wachovia Corporation (Wachovia) and formed Wachovia Securities, a joint venture currently headquartered in St. Louis, Missouri. The transaction included the contribution of certain assets and liabilities of the Companys securities brokerage operations; however, the Company retained certain assets and liabilities related to the contributed operations, including liabilities for certain litigation and regulatory matters. The Company and Wachovia have each agreed to indemnify the other for certain losses, including losses resulting from litigation and regulatory matters relating to certain events arising from the operations of their respective contributed businesses prior to June30, 2004. Reflecting the Companys intention to put its interest in the Wachovia Securities joint venture, as discussed below, the results of the joint venture are included in Corporate and Other operations as a divested business. On October1, 2007, Wachovia completed the acquisition of A.G. Edwards, Inc. (A.G. Edwards) and on January1, 2008 contributed the retail securities brokerage business of A.G. Edwards to the joint venture. Wachovias contribution of this business entitled the Company to elect a lookback option (which the Company elected) permitting the Company to delay for a period of two years ending on January1, 2010, the decision on whether or not to make payments to avoid or limit dilution of its 38% ownership interest in the joint venture or, alternatively, to put its joint venture interests to Wachovia based on the appraised value of the joint venture, excluding the A.G. Edwards business, as of January1, 2008, the date of the combination of the A.G. Edwards business with Wachovia Securities. During this lookback period, the Companys share in the earnings of the joint venture and one-time costs associated with the combination of the A.G. Edwards business with Wachovia Securities is based on the Companys diluted ownership level, which has not yet been determined. Based upon the existing agreements and the Companys estimates of the values of the A.G. Edwards business and the joint venture excluding the A.G. Edwards business, the Company adjusted the carrying value of its ownership interest in the joint venture effective as of January1, 2008 to reflect the addition of the A.G. Edwards business and the dilution of the Companys 38% ownership interest and to record the value of the above described rights under the lookback option. The Company accordingly recognized a corresponding increase to Additional paid-in capital of $1.041 billion, net of tax, which represented the excess of the estimated value of the Companys share of the A.G. Edwards business received (of approximately $1.444 billion) and the estimated value of the lookback option acquired (of approximately $580 million) over the carrying value of the portion of the Companys ownership interest in Wachovia Securities that was diluted (of approximately $422 million), net of taxes (of approximately $561 million). The Companys recorded share of pre-tax losses f |
| 14. DERIVATIVE INSTRUMENTS | 14. DERIVATIVE INSTRUMENTS Types of Derivative Instruments and Derivative Strategies used in a non-dealer or broker capacity Interest rate swaps are used by the Company to manage interest rate exposures arising from mismatches between assets and liabilities (including duration mismatches) and to hedge against changes in the value of assets it anticipates acquiring and other anticipated transactions and commitments. Swaps may be attributed to specific assets or liabilities or may be used on a portfolio basis. Under interest rate swaps, the Company agrees with other parties to exchange, at specified intervals, the difference between fixed rate and floating rate interest amounts calculated by reference to an agreed upon notional principal amount. Generally, no cash is exchanged at the outset of the contract and no principal payments are made by either party. These transactions are entered into pursuant to master agreements that provide for a single net payment to be made by one counterparty at each due date. Exchange-traded futures and options are used by the Company to reduce risks from changes in interest rates, to alter mismatches between the duration of assets in a portfolio and the duration of liabilities supported by those assets, and to hedge against changes in the value of securities it owns or anticipates acquiring or selling. In exchange-traded futures transactions, the Company agrees to purchase or sell a specified number of contracts, the values of which are determined by the values of underlying referenced investments, and to post variation margin on a daily basis in an amount equal to the difference in the daily market values of those contracts. The Company enters into exchange-traded futures and options with regulated futures commissions merchants who are members of a trading exchange. Currency derivatives, including exchange-traded currency futures and options, currency forwards and currency swaps, are used by the Company to reduce risks from changes in currency exchange rates with respect to investments denominated in foreign currencies that the Company either holds or intends to acquire or sell. The Company also uses currency forwards to hedge the currency risk associated with net investments in foreign operations and anticipated earnings of its foreign operations. Under currency forwards, the Company agrees with other parties to deliver a specified amount of an identified currency at a specified future date. Typically, the price is agreed upon at the time of the contract and payment for such a contract is made at the specified future date. As noted above, the Company uses currency forwards to mitigate the risk that unfavorable changes in currency exchange rates will reduce U.S. dollar equivalent earnings generated by certain of its non-U.S. businesses, primarily its international insurance and investments operations. The Company executes forward sales of the hedged currency in exchange for U.S. dollars at a specified exchange rate. The maturities of these forwards correspond with the future periods in which the non-U.S. earnings are expected to be generated. These earnings hedges do not qualify for hedge |
| 15. COMMITMENTS AND GUARANTEES, CONTINGENT LIABILITIES AND LITIGATION AND REGULATORY MATTERS | 15. COMMITMENTS AND GUARANTEES, CONTINGENT LIABILITIES AND LITIGATION AND REGULATORY MATTERS Commitments and Guarantees In connection with the Companys commercial mortgage operations, it originates commercial mortgage loans. At June30, 2009, the Company had outstanding commercial mortgage loan commitments with borrowers of $2,022 million. In certain of these transactions, the Company prearranges that it will sell the loan to an investor, including to governmental sponsored entities as discussed below, after the Company funds the loan. At June30, 2009, $1,045 million of the Companys commitments to originate commercial mortgage loans are subject to such arrangements. The Company also has other commitments, some of which are contingent upon events or circumstances not under the Companys control, including those at the discretion of the Companys counterparties. These other commitments amounted to $9,879 million at June30, 2009. Reflected in these other commitments are $9,838 million of commitments to purchase or fund investments, including $6,234 million that the Company anticipates will ultimately be funded from its separate accounts. Of these separate account commitments, $2,668 million have recourse to Prudential Insurance if the separate accounts are unable to fund the amounts when due. In the course of the Companys business, it provides certain guarantees and indemnities to third parties pursuant to which it may be contingently required to make payments now or in the future. A number of guarantees provided by the Company relate to real estate investments held in its separate accounts, in which the separate account has borrowed funds, and the Company has guaranteed their obligation to their lender. The Company provides these guarantees to assist the separate account in obtaining financing for the transaction. The Companys maximum potential exposure under these guarantees was $1,554 million at June30, 2009, of which all but $278 million is limited to the assets of the separate account for which exposure primarily relates to guarantees limited to fraud, criminal activity or other bad acts. These guarantees generally expire at various times over the next sixteen years. At June30, 2009, no amounts were accrued as a result of the Companys assessment that it is unlikely payments will be required. Any payments that may become required of the Company under these guarantees would either first be reduced by proceeds received by the creditor on a sale of the underlying collateral, or would provide the Company with rights to obtain the underlying collateral. The Company has also provided a guarantee to a syndication of lenders in connection with a retail development project in Singapore that is 50% co-owned by the Company and an unconsolidated real estate fund managed by the Company. The principal provisions in the guarantee require that the loan-to-value ratio of the retail development project be maintained at 60% or lower, based on an external appraisal. A loan-to-value ratio in excess of 60% would require the Company and its co-owner to jointly and severally paydown the loan balance to the 60% level. The current loan-to-valu |
| Document Information | |
| 6 Months Ended
Jun. 30, 2009 USD / shares | |
| Document Information [Text Block] | |
| Document Type | 10-Q |
| Amendment Flag | false |
| Amendment Description | N.A. |
| Document Period End Date | 2009-06-30 |
| Entity Information (USD $) | |||
| 6 Months Ended
Jun. 30, 2009 | Jul. 31, 2009
| Jun. 30, 2008
| |
| Entity [Text Block] | |||
| Trading Symbol | PRU | ||
| Entity Registrant Name | PRUDENTIAL FINANCIAL INC | ||
| Entity Central Index Key | 0001137774 | ||
| Current Fiscal Year End Date | --12-31 | ||
| Entity Well-known Seasoned Issuer | Yes | ||
| Entity Current Reporting Status | Yes | ||
| Entity Voluntary Filers | No | ||
| Entity Filer Category | Large Accelerated Filer | ||
| Entity Common Stock, Shares Outstanding | 461,000,000 | ||
| Entity Public Float | $25,460,000,000 |
