01—Abstract
Summary
Summary of the 10-K/A filed June 4, 2014. Cited figures are marked; the original filing is the authoritative source.
Prudential Financial, Inc. filed this Amendment No. 1 on Form 10-K/A (dated June 4, 2014) to correct the selected consolidated balance sheet data for 2011, 2010 and 2009 in Item 6 of its Annual Report on Form 10-K for the year ended December 31, 2013.
The original columns had inadvertently presented 2010, 2009 and 2008 data for those years without revision for the retrospective adoption of a discretionary change in accounting principle for recognition of performance based incentive fee revenue. The amendment restates Items 6 and 9A only; the company states the errors did not affect the Consolidated Financial Statements or other disclosures, and that its conclusions on disclosure controls remain effective. The corrected selected financial data show 2013 total revenues of $41.46 billiona and a net loss attributable to Prudential Financial, Inc. of $667 million, compared with net income of $520 million in 2012 and $3.63 billion in 2011.
Income from continuing operations attributable to Prudential was negative $1.57b per basic share in 2013, versus $1.02 in 2012. Total assets were $731.78 billion at December 31, 2013, and Prudential Financial, Inc. equity was $35.28 billion. Key 2013 events cited include the acquisition of The Hartford's individual life insurance business through reinsurance for $615 million in cash consideration, covering approximately 700,000 policies with about $141 billion of net retained face amount in force.
For investors, the principal takeaway is the 2013 loss, which the filing attributes in part to realized investment losses of $5.21 billionc, alongside lower premiums versus the 2012 pension risk transfer year, which included approximately $32 billion of premiums. The filing's text does not separately explain the drivers of the 2013 loss beyond the figures presented.
02—Key points
Key Highlights
- 2013 net loss attributable to Prudential Financial, Inc. of $667 million, versus net income of $520 million in 2012 and $3.63 billion in 2011
- 2013 total revenues of $41.46 billion, down from $84.85 billion in 2012, with premiums of $26.24 billion versus $65.35 billion
- Realized investment losses, net of $5.21 billion in 2013, compared with losses of $1.44 billion in 2012 and gains of $2.83 billion in 2011
- Total assets of $731.78 billion and total equity of $35.88 billion as of December 31, 2013
- Acquisition of The Hartford's individual life insurance business on January 2, 2013 for cash consideration of $615 million, covering about 700,000 policies with approximately $141 billion of net retained face amount in force
- Basic loss per share from continuing operations of $1.57 in 2013, versus earnings of $1.02 in 2012 and $7.14 in 2011
- Amendment corrects 2011, 2010 and 2009 balance sheet data; the company states this did not affect the Consolidated Financial Statements and that disclosure controls remain effective
03—One dollar
04—Financials
Financial Highlights
Figures from 10-K/AFY2013filed June 4, 2014Financial Statements
FY2013 against FY2012
| Line item | FY2013FY2012 | Change |
|---|---|---|
| Revenue | $41.46B$84.85B | −51.1% |
| Interest Expense | $1.41B— | — |
| Net Income | -$667.00M$520.00M | −228.3% |
| EPS (Basic) | $-1.55— | — |
| EPS (Diluted) | $-1.55— | — |
05—Questions
Frequently Asked Questions
Why did Prudential file this amended 10-K?
The company filed Amendment No. 1 on Form 10-K/A to correct selected consolidated balance sheet data for 2011, 2010 and 2009. Those columns had presented 2010, 2009 and 2008 data without revision for the retrospective adoption of a change in accounting principle for performance based incentive fee revenue.
Did the correction change Prudential's audited financial statements?
The filing states that the errors were limited in scope and did not result in any error in the Consolidated Financial Statements or other disclosures in the original Form 10-K. Only Items 6 and 9A are amended.
What drove Prudential's 2013 net loss?
The filing's selected data show realized investment losses, net of $5.21 billion and total benefits and expenses of $43.15 billion exceeding total revenues of $41.46 billion, with a pre-tax loss of $1.68 billion. The filing presents these figures without a separate narrative attribution in this amendment.
What was the significance of the Hartford life insurance acquisition?
On January 2, 2013, Prudential acquired The Hartford's individual life insurance business through a reinsurance transaction for $615 million in cash consideration. The company says it increases its scale in the U.S. individual life market, particularly universal life products, and expands wirehouse and bank distribution channels.
How did 2012 results compare, and why were premiums so high that year?
In 2012 Prudential reported net income attributable to Prudential Financial, Inc. of $520 million and premiums of $65.35 billion. The filing states that 2012 included approximately $32 billion of premiums from two pension risk transfer transactions with the General Motors Salaried Employees Pension Trust and the Verizon Management Pension Plan, largely offset by a corresponding increase in policyholders' benefits.
06—Continue