01—Abstract
Summary
Summary of the 10-K filed February 21, 2024. Cited figures are marked; the original filing is the authoritative source.
Prudential Financial, Inc. (PRU) reports in its 2023 Form 10-K that it manages approximately $1.450 trilliona of assets under management as of December 31, 2023, with operations across the United States, Asia, Europe and Latin America.
The segments are PGIM (global investment management), the U.S. Businesses (Retirement Strategies, Group Insurance, Individual Life), International Businesses, the Closed Block division, and Corporate and Other. Net income attributable to Prudential Financial was $2.488 billionb in 2023, compared with a loss of $1.647 billion in 2022, while total revenues were $53.979 billion. Segment adjusted operating income before income taxes totaled $5.516 billion in 2023, versus $5.082 billion in 2022.
The filing describes a company in transition toward being less market-sensitive, pursuing reinsurance transactions, and reallocating capital toward higher-growth businesses. Notable 2023 actions included the Prismic Re reinsurance of approximately $9 billionc of structured settlement reserves, a reinsurance agreement with AuguStar covering about $10 billion of PDI variable annuity account values, a $200 million restructuring charge, and a $177 million goodwill impairment for Assurance IQ. The company disclosed a cybersecurity incident on February 13, 2024, as amended on February 21, 2024, and stated it had not had a material impact on operations or financial condition as of the filing date.
Capital and liquidity measures were presented as consistent with ratings targets. Total capital was $47.287 billiond at year-end, and the company repurchased $1.0 billion of common stock in 2023, with a further $1.0 billion authorized for 2024. Quarterly common stock dividends were $1.25 per share through 2023, and a $1.30 per share dividend was declared on February 6, 2024.
02—Key points
Key Highlights
- Assets under management of approximately $1.450 trillion as of December 31, 2023, with PGIM AUM of $1.298 trillion.
- Net income attributable to Prudential Financial, Inc. of $2.488 billion in 2023, compared with a net loss of $1.647 billion in 2022.
- Total segment adjusted operating income before income taxes of $5.516 billion in 2023, up from $5.082 billion in 2022.
- Acquired a 20% interest in Prismic Life Holding Company LP for approximately $200 million and reinsured about $9 billion of structured settlement annuity reserves to Prismic Re.
- Recorded a $177 million pre-tax goodwill impairment for Assurance IQ and a $200 million restructuring charge in the fourth quarter of 2023.
- Repurchased $1.0 billion of common stock in 2023 and authorized up to $1.0 billion of repurchases for 2024; dividends declared were $5.00 per share for 2023.
- Disclosed a cybersecurity incident on February 13, 2024, as amended February 21, 2024, which the company stated had not had a material impact as of the filing date.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2023filed February 21, 2024Financial Statements
FY2023 against FY2022
| Line item | FY2023FY2022 | Change |
|---|---|---|
| Revenue | $53.98B$56.88B | −5.1% |
| Operating Expenses | $14.55B$3.61B | +303.3% |
| Operating Income | $2.46B-$1.61B | +252.4% |
| Interest Expense | $1.76B$1.60B | +10.4% |
| Net Income | $2.51B-$1.65B | +252.3% |
| EPS (Basic) | $6.76$-4.49 | +250.6% |
| EPS (Diluted) | $6.74$-4.49 | +250.1% |
| Shares Outstanding (Basic) | 363.50M372.30M | −2.4% |
| Shares Outstanding (Diluted) | 364.60M372.30M | −2.1% |
05—Questions
Frequently Asked Questions
How did Prudential's net income change in 2023?
Net income attributable to Prudential Financial, Inc. was $2.488 billion in 2023, compared with a net loss of $1.647 billion in 2022. The filing attributes the $4.135 billion increase primarily to a $3.753 billion favorable variance from realized investment gains (losses), net, and related items, along with a $726 million favorable variance from a lower Assurance IQ goodwill impairment.
What drove the segment results in 2023?
Total segment adjusted operating income before income taxes rose to $5.516 billion from $5.082 billion. U.S. Businesses increased to $3.792 billion from $2.711 billion, mainly due to a favorable comparison with the prior-year assumption update in Individual Life. PGIM declined to $713 million from $843 million, reflecting lower asset management fees and higher compensation and operating expenses.
What is the company's capital return policy?
In 2023 Prudential repurchased $1.0 billion of common stock and declared dividends of $5.00 per share, or $1.850 billion in aggregate. The Board authorized up to $1.0 billion of repurchases for January 1 to December 31, 2024, and on February 6, 2024 declared a $1.30 per share quarterly dividend payable March 14, 2024.
What strategic transactions did the company complete in 2023?
The company launched Prismic Re with Warburg Pincus and invested about $200 million for a 20% interest in Prismic, reinsuring roughly $9 billion of structured settlement annuity reserves. It also agreed in May 2023 to reinsure about $10 billion of PDI traditional variable annuity account values with AuguStar, and in July 2023 agreed to reinsure certain guaranteed universal life policies with Somerset Re.
What cybersecurity matter did the company disclose?
On February 13, 2024, as amended on February 21, 2024, the company disclosed a cybersecurity incident. It stated that it continues to investigate the extent of the incident and that, as of the date of the report, the incident had not had a material impact on operations and was not determined to be reasonably likely to materially impact financial condition or results of operations.
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