http://www.morningstar.com/earnings/21921720-prudential-financial-inc-pru-q4-2010.aspx

Prudential Financial Inc PRU
Q4 2010 Earnings Call Transcript

Transcript Call Date 02/10/2011

Operator: Ladies and gentlemen, thank you for standing by and welcome to the Prudential Fourth Quarter 2010 Earnings Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. Instructions will be given to you at that time. As a reminder, today's conference call is being recorded.

I would now like to turn the conference over to Mr. Eric Durant. Please go ahead.

Eric Durant - IR: Thank you Cynthia. Good morning and thank you for joining our call. Representing Prudential on today’s call are John Strangfeld, CEO, Mark Grier, Vice Chairman, Bernard Winograd, Chief Operating Office of Domestic Businesses, Ed Baird, Chief Operating Officer of International Businesses, Rich Carbone, Chief Financial Officer and Peter Sayre, our Controller and Principal Accounting Officer.

In order to help you to understand Prudential Financial, we will make some forward-looking statements in the following presentation. It is possible that actual results may differ materially from the predictions we make today. Additional information regarding factors that could cause such a difference appears in the section titled Forward-Looking Statements and Non-GAAP Measures of our earnings press release for the fourth quarter of 2010, which can be found on our website at www.investor.prudential.com.

In addition, in managing our businesses, we use a non-GAAP measure we call adjusted operating income to measure the performance of our Financial Services Businesses. Adjusted operating income excludes net investment gains and losses as adjusted and related charges and adjustments, as well as results from divested businesses. Adjusted operating income also excludes recorded changes in asset values that are expected to ultimately accrue to contractholders and recorded changes in contractholder liabilities resulting from changes in related asset values.

Our earnings press release contains information about our definition on adjusted operating income. The comparable GAAP presentation and the reconciliation between the two for the quarter end and year end December 31st, are set out in our earnings press release on our website. Additional historical information relating to the Company's financial performance is also located on our website. John?

John R. Strangfeld - Chairman and CEO: Thank you, Eric. Good morning. Thank you for joining us. Now that we've closed the books on 2010, I'll kick things off with some high level comments regarding the year as a whole.

First earnings, earnings per share for 2010 increased 14% from 2009 based on after tax adjusted operating income of Financial Services Businesses. Return on equity was 11%.

Excluding from earnings the items we considered discrete or markets driven the full year result would equate to just under a 10% return on equity. These returns reflect a drag from significant capital capacity roughly half of which was redeployed on February 1 when our acquisition of Star/Edison closed. Net income for the year amounted to $2.7 billion down from $3.4 billion in 2009 which included a $1.4 billion gain on our sale of investment in Wachovia Securities.

Read our Earnings Call Transcript disclaimer.
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