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Prudential Financial, Inc. Announces Second Quarter 2013 Results

Stocks in this article: PRU

The Asset Management segment reported adjusted operating income of $168 million for the current quarter, compared to $52 million in the year-ago quarter. The current quarter contribution to results from the segment’s incentive, transaction, strategic investing and commercial mortgage activities was $79 million greater than in the year-ago quarter, primarily reflecting the inclusion in year-ago quarter results of a $75 million charge for an impairment related to our investment in a real estate fund. Excluding the contribution from these segment activities, Asset Management segment adjusted operating income increased $37 million from the year-ago quarter. This increase came primarily from higher asset management fees reflecting growth in assets under management, net of expenses.

The U.S. Individual Life and Group Insurance division reported adjusted operating income of $163 million for the second quarter of 2013, compared to $94 million in the year-ago quarter.

The Individual Life segment reported adjusted operating income of $141 million for the current quarter, compared to $61 million in the year-ago quarter. Current quarter results reflect absorption of $11 million of integration costs related to the Company’s acquisition of The Hartford’s individual life insurance business. Excluding these integration costs, adjusted operating income increased $91 million from the year-ago quarter. This increase included an estimated contribution of $42 million from the acquired in force business. The remainder of the increase in Individual Life results was largely driven by improved mortality experience on legacy Prudential business, partly offset by higher distribution costs reflecting expanded third party distribution and greater current quarter sales.

The Group Insurance segment reported adjusted operating income of $22 million in the current quarter, compared to $33 million in the year-ago quarter. The decrease was largely driven by less favorable group life claims experience, partly offset by more favorable disability claims experience.

The International Insurance segment reported adjusted operating income of $850 million for the second quarter of 2013, compared to $678 million in the year-ago quarter.

Adjusted operating income of the segment’s Life Planner insurance operations was $368 million for the current quarter, compared to $374 million in the year-ago quarter. Higher expenses and less favorable mortality experience in the current quarter more than offset the benefit of continued business growth and a favorable impact of $13 million in comparison to the year-ago quarter from foreign currency exchange rates including the impact of the Company’s currency hedging programs.

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