Hide Notes 

Slide 1: Prudential Financial, Inc. (PRU) Quarterly Financial Supplement FINANCIAL SERVICES BUSINESSES FOURTH QUARTER 2006 Reference is made to Prudential Financial, Inc.'s filings with the Securities and Exchange Commission for general information, and consolidated financial information, regarding Prudential Financial, Inc., including its Closed Block Business. All financial information in this document is unaudited. i February 7, 2007
Slide 2: Prudential Financial, Inc. Quarterly Financial Supplement Fourth Quarter 2006 CONTENTS Page HIGHLIGHTS Financial Highlights Operations Highlights FINANCIAL SERVICES BUSINESSES Combined Statements of Operations Combined Balance Sheets Combining Statements of Operations by Division (Quarter) Combining Statements of Operations by Division Combining Balance Sheets by Division Short-Term and Long-Term Debt 1-2 3 4 5 6 7 8 9 INSURANCE DIVISION Combined Statements of Operations Combining Statements of Operations Individual Life Sales, Account Value Activity, and Face Amount in Force Supplementary Information for Individual Life Insurance Individual Annuities Sales Results, Account Values and Minimum Guarantees Individual Annuities Account Value Activity Supplementary Information for Group Insurance Deferred Policy Acquisition Costs 10 11 12 13 14 15 16 17 INVESTMENT DIVISION Combined Statements of Operations Combining Statements of Operations Supplementary Revenue And Assets Under Management Information for Asset Management Segment Supplementary Assets Under Management and Assets Under Administration Information for Asset Management Segment Supplementary Information for Financial Advisory Segment Retirement Sales Results and Account Values 18 19 20 21 22 23 INTERNATIONAL INSURANCE AND INVESTMENTS DIVISION Combined Statements of Operations Combining Statements of Operations International Insurance Segment - Supplementary Income Statement Information Sales Results and Supplementary Information 24 25 26 27-28 INVESTMENT PORTFOLIO Investment Portfolio Composition Financial Services Businesses Investment Portfolio Composition - Japanese Insurance Operations and Excluding Japanese Insurance Operations Financial Services Businesses Investment Results Financial Services Businesses Investment Results - Japanese Insurance Operations Financial Services Businesses Investment Results - Excluding Japanese Insurance Operations RECLASSIFIED STATEMENTS OF OPERATIONS AND SUPPLEMENTAL INFORMATION KEY DEFINITIONS AND FORMULAS RATINGS AND INVESTOR INFORMATION 29 30 31 32 33 34-42 43-45 46 ii
Slide 3: Prudential Financial, Inc. Quarterly Financial Supplement Fourth Quarter 2006 This Quarterly Financial Supplement reflects the company's Individual Life and Annuities businesses, formerly reported as components of the Individual Life and Annuities segment, as discrete segments for GAAP segment reporting purposes for all periods presented herein. In addition, revenues, expenses, assets and liabilities as reported herein reflect certain reclassifications to conform to current reporting practices. iii
Slide 4: Prudential Financial, Inc. Quarterly Financial Supplement Fourth Quarter 2006 FINANCIAL HIGHLIGHTS (in millions, except per share data) Year-to-date 2006 2005 % Change Financial Services Businesses: 1,359 1,163 1,566 86 4,174 1,202 2,972 1,227 707 1,416 202 3,552 1,120 2,432 11% 64% 11% -57% 18% 7% 22% Pre-tax adjusted operating income (loss) by division: Insurance Division Investment Division International Insurance and Investments Division Corporate and other operations Total pre-tax adjusted operating income Income taxes, applicable to adjusted operating income Financial Services Businesses after-tax adjusted operating income 365 (4) 377 76 814 290 524 298 240 382 26 946 277 669 247 316 358 37 958 276 682 465 252 428 15 1,160 330 830 349 355 398 8 1,110 319 791 2005 4Q 1Q 2Q 2006 3Q 4Q 90 35 11 12 (322) (174) (73) (101) 2,871 208 3,079 65 3,144 561 (33) (44) (16) (214) 254 (473) 727 3,159 142 3,301 (82) 3,219 -84% 206% 125% 175% -50% -169% 85% -114% -9% 46% -7% 179% -2% Realized investment gains (losses), net, and related charges and adjustments Investment gains (losses) on trading account assets supporting insurance liabilities, net Change in experience-rated contractholder liabilities due to asset value changes Divested businesses Equity in earnings of operating joint ventures Total pre-tax adjustments Income taxes, not applicable to adjusted operating income Total adjustments, after income taxes Income from continuing operations (after-tax) of Financial Services Businesses before equity in earnings of operating joint ventures Equity in earnings of operating joint ventures, net of taxes Income from continuing operations (after-tax) of Financial Services Businesses Income (loss) from discontinued operations, net of taxes Net income of Financial Services Businesses Earnings per share of Common Stock (diluted): (2) 8 (34) (11) (66) (105) 60 (165) 359 47 406 (29) 377 50 (114) 66 13 (78) (63) (24) (39) 630 51 681 (6) 675 (311) (151) 130 (4) (67) (403) (116) (287) 395 45 440 (16) 424 221 257 (168) 4 (78) 236 32 204 1,034 50 1,084 68 1,152 130 43 (17) (1) (99) 56 35 21 812 62 874 19 893 6.15 0.18 0.07 0.02 0.02 (0.64) (0.35) (0.15) (0.20) 5.95 0.42 6.37 0.13 6.50 4.83 1.08 (0.06) (0.08) (0.03) (0.42) 0.49 (0.90) 1.39 6.22 0.27 6.49 (0.15) 6.34 Financial Services Businesses after-tax adjusted operating income Realized investment gains (losses), net, and related charges and adjustments Investment gains (losses) on trading account assets supporting insurance liabilities, net Change in experience-rated contractholder liabilities due to asset value changes Divested businesses Equity in earnings of operating joint ventures Total pre-tax adjustments Income taxes, not applicable to adjusted operating income Total adjustments, after income taxes Income from continuing operations (after-tax) of Financial Services Businesses before equity in earnings of operating joint ventures Equity in earnings of operating joint ventures, net of taxes Income from continuing operations (after-tax) of Financial Services Businesses Income (loss) from discontinued operations, net of taxes Net income of Financial Services Businesses 1.06 0.02 (0.07) (0.02) (0.13) (0.20) 0.12 (0.32) 0.74 0.09 0.83 (0.05) 0.78 1.36 0.10 (0.23) 0.13 0.03 (0.15) (0.12) (0.05) (0.07) 1.29 0.10 1.39 (0.01) 1.38 1.40 (0.63) (0.30) 0.26 (0.01) (0.13) (0.81) (0.24) (0.57) 0.83 0.09 0.92 (0.03) 0.89 1.72 0.45 0.52 (0.34) 0.01 (0.16) 0.48 0.06 0.42 2.14 0.10 2.24 0.14 2.38 1.67 0.27 0.09 (0.04) (0.20) 0.12 0.07 0.05 1.72 0.13 1.85 0.03 1.88 494.0 14.55% 520.9 12.32% Weighted average number of outstanding Common shares (diluted basis) Operating Return on Average Equity (based on adjusted operating income) Reconciliation to Consolidated Net Income of Prudential Financial, Inc: 510.2 10.43% 504.1 13.37% 497.1 13.48% 490.5 16.11% 482.8 15.18% 3,144 284 3,428 68 3,219 321 3,540 82 Net income of Financial Services Businesses (above) Net income (loss) of Closed Block Business Consolidated net income Direct equity adjustments for earnings per share calculations 377 (13) 364 19 675 58 733 19 424 29 453 16 1,152 53 1,205 16 893 144 1,037 17 Page 1
Slide 5: Prudential Financial, Inc. Quarterly Financial Supplement Fourth Quarter 2006 FINANCIAL HIGHLIGHTS (in millions, except per share data) Year-to-date 2006 2005 Financial Services Businesses Capitalization Data (1): Short-term debt Long-term debt Attributed Equity: Including accumulated other comprehensive income Excluding accumulated other comprehensive income related to unrealized gains and losses on investments and pension / postretirement benefits Excluding total accumulated other comprehensive income Total Capitalization: Including accumulated other comprehensive income Excluding accumulated other comprehensive income related to unrealized gains and losses on investments and pension / postretirement benefits Excluding total accumulated other comprehensive income Book value per share of Common Stock: Including accumulated other comprehensive income Excluding accumulated other comprehensive income related to unrealized gains and losses on investments and pension / postretirement benefits Excluding total accumulated other comprehensive income Number of diluted shares at end of period Common Stock Price Range (based on closing price): 86.84 71.47 85.86 77.96 52.62 73.19 High Low Close Common Stock market capitalization (1) 2005 4Q 1Q 2Q 2006 3Q 4Q 9,447 6,520 9,685 7,284 9,723 7,520 9,418 7,464 10,798 9,673 21,654 20,473 20,546 21,229 20,695 20,717 20,424 20,716 20,604 22,053 21,290 21,232 21,690 21,306 21,194 28,174 26,993 27,066 28,513 27,979 28,001 27,944 28,236 28,124 29,517 28,754 28,696 31,363 30,979 30,867 42.70 40.37 40.52 507.1 42.43 41.37 41.41 500.3 41.41 42.00 41.78 493.2 45.31 43.74 43.62 486.7 45.18 44.38 44.15 480.1 77.96 63.27 73.19 36,412 77.48 73.19 75.81 37,288 78.89 74.43 77.70 37,651 79.06 71.47 76.25 36,394 86.84 76.03 85.86 40,449 (1) As of end of period. Page 2
Slide 6: Prudential Financial, Inc. Quarterly Financial Supplement Fourth Quarter 2006 OPERATIONS HIGHLIGHTS Year-to-date 2006 2005 2005 4Q 1Q 2Q 2006 3Q 4Q Assets Under Management and Administration ($ billions) (1) (2): Assets Under Management : Managed by Investment Division: Asset Management Segment - Investment Management & Advisory Services Institutional customers Retail customers General account Total Investment Management and Advisory Services Non-proprietary assets under management Total managed by Investment Division Managed by International Insurance and Investments Division Managed by Insurance Division Total assets under management Client assets under administration Total assets under management and administration Assets managed or administered for customers outside of the United States at end of period Distribution Representatives (1): Prudential Agents International Life Planners Gibraltar Life Advisors 53 46 Prudential Agent productivity ($ thousands) 2,946 5,627 5,436 61 2,850 5,712 5,716 45 2,844 5,726 5,684 52 2,814 5,802 6,036 46 2,562 5,828 5,944 74 134.7 73.5 159.2 367.4 48.1 415.5 71.4 44.6 531.5 92.5 624.0 100.4 138.7 75.6 157.8 372.1 51.3 423.4 74.5 49.5 547.4 100.0 647.4 105.3 138.5 75.1 159.7 373.3 49.6 422.9 82.6 62.9 568.4 101.6 670.0 114.0 147.9 75.9 163.8 387.6 51.0 438.6 82.2 65.4 586.2 105.8 692.0 115.5 156.8 79.0 167.6 403.4 54.2 457.6 86.2 72.2 616.0 112.9 728.9 123.8 (1) As of end of period. (2) At fair market value. Page 3
Slide 7: Prudential Financial, Inc. Quarterly Financial Supplement Fourth Quarter 2006 COMBINED STATEMENTS OF OPERATIONS - FINANCIAL SERVICES BUSINESSES (in millions) Year-to-date 2006 2005 % Change Revenues (1): 2005 4Q 1Q 2Q 2006 3Q 4Q 10,287 2,649 7,660 4,250 24,846 10,128 2,529 6,863 3,608 23,128 2% 5% 12% 18% 7% Premiums Policy charges and fee income Net investment income Asset management fees, commissions and other income Total revenues Benefits and Expenses (1): 2,450 629 1,822 948 5,849 2,604 662 1,812 1,054 6,132 2,542 667 1,875 966 6,050 2,548 583 1,962 1,024 6,117 2,593 737 2,011 1,206 6,547 10,423 2,790 949 (2,037) 670 7,877 20,672 4,174 73 17 90 35 11 12 (322) (174) 4,000 1,129 2,871 9,990 2,516 615 (1,801) 910 7,346 19,576 3,552 669 (108) 561 (33) (44) (16) (214) 254 3,806 647 3,159 4% 11% 54% -13% -26% 7% 6% 18% -89% 116% -84% 206% 125% 175% -50% -169% 5% 74% -9% Insurance and annuity benefits Interest credited to policyholders' account balances Interest expense Deferral of acquisition costs Amortization of acquisition costs General and administrative expenses Total benefits and expenses Adjusted operating income before income taxes Realized investment gains (losses), net, and related adjustments Related charges Total realized investment gains (losses), net, and related charges and adjustments Investment gains (losses) on trading account assets supporting insurance liabilities, net Change in experience-rated contractholder liabilities due to asset value changes Divested businesses Equity in earnings of operating joint ventures Total pre-tax adjustments Income from continuing operations before income taxes and equity in earnings of operating joint ventures Income tax expense Income from continuing operations before equity in earnings of operating joint ventures 2,439 632 192 (439) 172 2,039 5,035 814 2 (4) (2) 8 (34) (11) (66) (105) 709 350 359 2,577 652 212 (501) 240 2,006 5,186 946 50 50 (114) 66 13 (78) (63) 883 253 630 2,591 677 233 (495) 264 1,822 5,092 958 (334) 23 (311) (151) 130 (4) (67) (403) 555 160 395 2,650 716 249 (496) (73) 1,911 4,957 1,160 214 7 221 257 (168) 4 (78) 236 1,396 362 1,034 2,605 745 255 (545) 239 2,138 5,437 1,110 143 (13) 130 43 (17) (1) (99) 56 1,166 354 812 (1) Revenues exclude realized investment gains, net of losses and related charges and adjustments; investment gains, net of losses, on trading account assets supporting insurance liabilities, and revenues of divested businesses, and include revenues representing equity in earnings of operating joint ventures. Benefits and expenses exclude charges related to realized investment gains, net of losses; change in experience-rated contractholder liabilities due to asset value changes and benefits and expenses of divested businesses. Page 4
Slide 8: Prudential Financial, Inc. Quarterly Financial Supplement Fourth Quarter 2006 COMBINED BALANCE SHEETS - FINANCIAL SERVICES BUSINESSES (in millions) 12/31/2005 Assets: Investments: Fixed maturities, available for sale, at fair value (amortized cost $101,672; $102,220; $107,756; $105,750; $109,362) Fixed maturities, held to maturity, at amortized cost (fair value $3,228; $3,397; $3,416; $3,400; $3,441) Trading account assets supporting insurance liabilities, at fair value Other trading account assets, at fair value Equity securities, available for sale, at fair value (cost $3,431; $3,489; $3,672; $3,761; $3,825) Commercial loans Policy loans Securities purchased under agreements to resell Other long-term investments Short-term investments Total investments Cash and cash equivalents Accrued investment income Reinsurance recoverables Deferred policy acquisition costs Other assets Separate account assets Total assets Liabilities: Future policy benefits Policyholders' account balances Reinsurance payables Securities sold under agreements to repurchase Cash collateral for loaned securities Income taxes Securities sold but not yet purchased Short-term debt Long-term debt Other liabilities Separate account liabilities Total liabilities Attributed Equity: Accumulated other comprehensive income (loss) Other attributed equity Total attributed equity Total liabilities and attributed equity 1,108 20,546 21,654 340,889 512 20,717 21,229 351,263 (180) 20,604 20,424 362,956 821 21,232 22,053 364,780 496 21,194 21,690 380,267 51,759 70,091 3,069 6,801 3,425 2,136 223 9,447 6,520 12,605 153,159 319,235 52,661 70,659 2,994 7,141 3,139 2,500 132 9,685 7,284 13,333 160,506 330,034 55,333 74,309 1,351 9,564 3,834 1,969 2,152 9,723 7,520 16,707 160,070 342,532 55,238 75,614 1,405 6,256 3,797 2,827 313 9,418 7,464 13,638 166,757 342,727 56,245 75,090 1,458 5,747 4,082 2,920 277 10,798 9,673 14,824 177,463 358,577 3,856 17,177 2,967 413 3,266 2,565 153,905 5,493 1,358 3,548 8,357 15,069 153,159 340,889 3,975 17,721 3,094 103 3,669 2,404 154,907 5,915 1,400 3,480 8,776 16,279 160,506 351,263 4,050 18,018 3,253 2,242 3,800 2,768 164,636 6,521 1,433 1,869 9,239 19,188 160,070 362,956 4,182 18,139 3,350 187 3,538 2,705 160,306 7,361 1,466 1,908 9,540 17,442 166,757 364,780 4,331 18,421 3,472 153 3,780 3,183 165,323 7,243 1,429 1,958 9,854 16,997 177,463 380,267 3,249 13,781 1,443 3,430 13,877 2,358 3,555 14,239 4,561 3,473 14,453 1,933 3,469 14,262 2,209 105,188 104,276 108,150 108,346 112,043 3/31/2006 6/30/2006 9/30/2006 12/31/2006 Page 5
Slide 9: Prudential Financial, Inc. Quarterly Financial Supplement Fourth Quarter 2006 FINANCIAL SERVICES BUSINESSES COMBINING STATEMENTS OF OPERATIONS - BY DIVISION (in millions) Quarter Ended December 31, 2006 Total Financial Services Businesses Revenues (1) : Premiums Policy charges and fee income Net investment income Asset management fees, commissions and other income Total revenues Benefits and Expenses (1): Insurance and annuity benefits Interest credited to policyholders' account balances Interest expense Deferral of acquisition costs Amortization of acquisition costs General and administrative expenses Total benefits and expenses Adjusted operating income before income taxes 2,605 745 255 (545) 239 2,138 5,437 1,110 1,154 206 44 (282) 125 779 2,026 349 303 497 67 (24) 10 733 1,586 355 1,143 67 (252) 112 617 1,687 398 5 (25) 144 13 (8) 9 138 8 2,593 737 2,011 1,206 6,547 1,052 637 468 218 2,375 88 43 970 840 1,941 1,458 70 376 181 2,085 (5) (13) 197 (33) 146 Insurance Division Investment Division International Insurance & Investments Division Corporate and Other Operations Quarter Ended December 31, 2005 Total Financial Services Businesses Revenues (1): Premiums Policy charges and fee income Net investment income Asset management fees, commissions and other income Total revenues Benefits and Expenses (1): Insurance and annuity benefits Interest credited to policyholders' account balances Interest expense Deferral of acquisition costs Amortization of acquisition costs General and administrative expenses Total benefits and expenses Adjusted operating income (loss) before income taxes 2,439 632 192 (439) 172 2,039 5,035 814 994 175 30 (196) 112 582 1,697 365 266 421 45 (15) 13 857 1,587 (4) 1,162 50 3 (242) 89 581 1,643 377 17 (14) 114 14 (42) 19 108 76 2,450 629 1,822 948 5,849 943 530 425 164 2,062 70 48 817 648 1,583 1,438 60 371 151 2,020 (1) (9) 209 (15) 184 Insurance Division Investment Division International Insurance & Investments Division Corporate and Other Operations (1) Revenues exclude realized investment gains, net of losses and related charges and adjustments; investment gains, net of losses, on trading account assets supporting insurance liabilities, and revenues of divested businesses, and include revenues representing equity in earnings of operating joint ventures. Benefits and expenses exclude charges related to realized investment gains, net of losses; change in experience-rated contractholder liabilities due to asset value changes and benefits and expenses of divested businesses. Page 6
Slide 10: Prudential Financial, Inc. Quarterly Financial Supplement Fourth Quarter 2006 FINANCIAL SERVICES BUSINESSES COMBINING STATEMENTS OF OPERATIONS - BY DIVISION (in millions) Twelve Months Ended December 31, 2006 Total Financial Services Businesses Revenues (1) : Premiums Policy charges and fee income Net investment income Asset management fees, commissions and other income Total revenues Benefits and Expenses (1): Insurance and annuity benefits Interest credited to policyholders' account balances Interest expense Deferral of acquisition costs Amortization of acquisition costs General and administrative expenses Total benefits and expenses Adjusted operating income before income taxes 10,423 2,790 949 (2,037) 670 7,877 20,672 4,174 4,593 763 139 (1,001) 207 2,812 7,513 1,359 1,104 1,853 238 (93) 52 2,685 5,839 1,163 4,682 251 10 (1,007) 454 2,364 6,754 1,566 44 (77) 562 64 (43) 16 566 86 10,287 2,649 7,660 4,250 24,846 4,066 2,213 1,787 806 8,872 294 179 3,663 2,866 7,002 5,946 286 1,425 663 8,320 (19) (29) 785 (85) 652 Insurance Division Investment Division International Insurance & Investments Division Corporate and Other Operations Twelve Months Ended December 31, 2005 Total Financial Services Businesses Revenues (1): Premiums Policy charges and fee income Net investment income Asset management fees, commissions and other income Total revenues Benefits and Expenses (1): Insurance and annuity benefits Interest credited to policyholders' account balances Interest expense Deferral of acquisition costs Amortization of acquisition costs General and administrative expenses Total benefits and expenses Adjusted operating income before income taxes 9,990 2,516 615 (1,801) 910 7,346 19,576 3,552 4,013 715 111 (797) 545 2,365 6,952 1,227 1,049 1,633 115 (61) 54 2,677 5,467 707 4,865 207 22 (1,003) 390 2,261 6,742 1,416 63 (39) 367 60 (79) 43 415 202 10,128 2,529 6,863 3,608 23,128 3,728 2,098 1,702 651 8,179 320 188 3,155 2,511 6,174 6,098 264 1,324 472 8,158 (18) (21) 682 (26) 617 Insurance Division Investment Division International Insurance & Investments Division Corporate and Other Operations (1) Revenues exclude realized investment gains, net of losses and related charges and adjustments; investment gains, net of losses, on trading account assets supporting insurance liabilities, and revenues of divested businesses, and include revenues representing equity in earnings of operating joint ventures. Benefits and expenses exclude charges related to realized investment gains, net of losses change in experience-rated contractholder liabilities due to asset value changes, and benefits and expenses of divested businesses. Page 7
Slide 11: Prudential Financial, Inc. Quarterly Financial Supplement Fourth Quarter 2006 FINANCIAL SERVICES BUSINESSES COMBINING BALANCE SHEETS - BY DIVISION (in millions) As of December 31, 2006 Total Financial Services Businesses Assets: Total investments Deferred policy acquisition costs Other assets Separate account assets Total assets Liabilities: Future policy benefits Policyholders' account balances Debt Other liabilities Separate account liabilities Total liabilities Attributed Equity: Accumulated other comprehensive income (loss) Other attributed equity Total attributed equity Total liabilities and attributed equity 165,323 9,854 27,627 177,463 380,267 Insurance Division 33,154 5,447 5,555 87,380 131,536 Investment Division 65,862 176 8,353 91,257 165,648 International Insurance & Investments Division 52,884 4,397 7,968 153 65,402 Corporate and Other Operations 13,423 (166) 5,751 (1,327) 17,681 56,245 75,090 20,471 29,308 177,463 358,577 7,905 20,511 3,491 5,968 87,380 125,255 14,517 40,616 2,164 10,846 91,257 159,400 33,333 15,842 1,346 8,154 153 58,828 490 (1,879) 13,470 4,340 (1,327) 15,094 496 21,194 21,690 380,267 235 6,046 6,281 131,536 118 6,130 6,248 165,648 694 5,880 6,574 65,402 (551) 3,138 2,587 17,681 As of December 31, 2005 Total Financial Services Businesses Assets: Total investments Deferred policy acquisition costs Other assets Separate account assets Total assets Liabilities: Future policy benefits Policyholders' account balances Debt Other liabilities Separate account liabilities Total liabilities Attributed Equity: Accumulated other comprehensive income Other attributed equity Total attributed equity Total liabilities and attributed equity 153,905 8,357 25,468 153,159 340,889 Insurance Division 31,117 4,613 3,531 74,001 113,262 Investment Division 60,941 119 8,524 80,319 149,903 International Insurance & Investments Division 47,930 3,761 7,343 67 59,101 Corporate and Other Operations 13,917 (136) 6,070 (1,228) 18,623 51,759 70,091 15,967 28,259 153,159 319,235 7,129 19,204 1,950 4,949 74,001 107,233 13,339 37,901 1,623 10,707 80,319 143,889 30,633 14,060 1,032 7,672 67 53,464 658 (1,074) 11,362 4,931 (1,228) 14,649 1,108 20,546 21,654 340,889 293 5,736 6,029 113,262 65 5,949 6,014 149,903 737 4,900 5,637 59,101 13 3,961 3,974 18,623 Page 8
Slide 12: Prudential Financial, Inc. Quarterly Financial Supplement Fourth Quarter 2006 SHORT-TERM AND LONG-TERM DEBT (in millions) As of December 31, 2006 Short-term Debt Financial Services Businesses Borrowings by use of proceeds: Capital Debt Investment related Securities business related Specified other businesses Limited recourse and non-recourse borrowing Total debt - Financial Services Businesses Ratio of long-term and short-term capital debt to capitalization Closed Block Business Investment related Limited recourse and non-recourse borrowing Total debt 1,738 1,738 1,750 1,750 1,738 1,750 3,488 1,667 1,667 1,750 1,750 1,667 1,750 3,417 255 7,053 2,334 1,154 2 10,798 4,122 5,116 381 54 9,673 4,377 12,169 2,334 1,535 56 20,471 17.0% 353 5,442 2,758 893 1 9,447 3,846 2,449 107 63 55 6,520 4,199 7,891 2,865 956 56 15,967 17.0% Long-term Debt Total Debt Short-term Debt As of December 31, 2005 Long-term Debt Total Debt As of December 31, 2006 The Prudential Prudential Financial, Inc. Financial Services Businesses Borrowings by sources: Capital Debt Investment related Securities business related Specified other businesses Limited recourse and non-recourse borrowing Total debt - Financial Services Businesses 3,079 7,372 712 424 11,587 1,298 3,763 1,191 998 7,250 1,034 431 113 56 1,634 4,377 12,169 2,334 1,535 56 20,471 2,902 4,173 1,117 116 8,308 Insurance Co. of America (1)(2) Other Affiliates Total Prudential Financial, Inc. As of December 31, 2005 The Prudential Insurance Co. of America (1)(2) Other Affiliates Total 1,297 3,718 1,173 692 6,880 575 148 56 779 4,199 7,891 2,865 956 56 15,967 (1) Includes Prudential Funding, LLC. (2) Capital debt at Prudential Insurance Co. of America includes $693 million of Surplus Notes for December 31, 2006 and December 31, 2005. Page 9
Slide 13: Prudential Financial, Inc. Quarterly Financial Supplement Fourth Quarter 2006 COMBINED STATEMENTS OF OPERATIONS - INSURANCE DIVISION (in millions) Year-to-date 2006 4,066 2,213 1,787 806 8,872 2005 3,728 2,098 1,702 651 8,179 % Change Revenues (1): 9% 5% 5% 24% 8% Premiums Policy charges and fee income Net investment income Asset management fees, commissions and other income Total revenues Benefits and Expenses (1): 2005 4Q 943 530 425 164 2,062 1Q 982 543 418 178 2,121 2Q 1,005 559 438 169 2,171 2006 3Q 1,027 474 463 241 2,205 4Q 1,052 637 468 218 2,375 4,593 763 139 (1,001) 207 2,812 7,513 1,359 4,013 715 111 (797) 545 2,365 6,952 1,227 14% 7% 25% -26% -62% 19% 8% 11% Insurance and annuity benefits Interest credited to policyholders' account balances Interest expense Deferral of acquisition costs Amortization of acquisition costs General and administrative expenses Total benefits and expenses Adjusted operating income before income taxes 994 175 30 (196) 112 582 1,697 365 1,070 180 30 (256) 131 668 1,823 298 1,144 181 28 (228) 142 657 1,924 247 1,225 196 37 (235) (191) 708 1,740 465 1,154 206 44 (282) 125 779 2,026 349 (1) Revenues exclude realized investment gains, net of losses and related charges and adjustments. Benefits and expenses exclude charges related to realized investment gains, net of losses. Page 10
Slide 14: Prudential Financial, Inc. Quarterly Financial Supplement Fourth Quarter 2006 COMBINING STATEMENTS OF OPERATIONS - INSURANCE DIVISION (in millions) Twelve Months Ended December 31, 2006 Total Insurance Division Revenues (1): Premiums Policy charges and fee income Net investment income Asset management fees, commissions and other income Total revenues Benefits and Expenses (1): Insurance and annuity benefits Interest credited to policyholders' account balances Interest expense Deferral of acquisition costs Amortization of acquisition costs General and administrative expenses (2) Total benefits and expenses Adjusted operating income before income taxes 4,593 763 139 (1,001) 207 2,812 7,513 1,359 863 203 82 (351) 2 873 1,672 544 233 356 50 (534) 203 1,207 1,515 586 3,497 204 7 (116) 2 732 4,326 229 1,154 206 44 (282) 125 779 2,026 349 203 54 27 (97) 57 229 473 132 67 97 15 (151) 67 347 442 154 884 55 2 (34) 1 203 1,111 63 4,066 2,213 1,787 806 8,872 429 920 548 319 2,216 81 986 618 416 2,101 3,556 307 621 71 4,555 1,052 637 468 218 2,375 117 267 149 72 605 24 291 156 125 596 911 79 163 21 1,174 Individual Life Individual Annuities Group Insurance Total Insurance Division Individual Life Individual Annuities Group Insurance Quarter Ended December 31, 2006 Twelve Months Ended December 31, 2005 Total Insurance Division Revenues (1): Premiums Policy charges and fee income Net investment income Asset management fees, commissions and other income Total revenues Benefits and Expenses (1): Insurance and annuity benefits Interest credited to policyholders' account balances Interest expense Deferral of acquisition costs Amortization of acquisition costs General and administrative expenses (2) Total benefits and expenses Adjusted operating income before income taxes 4,013 715 111 (797) 545 2,365 6,952 1,227 631 177 66 (314) 369 835 1,764 498 168 337 30 (421) 173 925 1,212 505 3,214 201 15 (62) 3 605 3,976 224 994 175 30 (196) 112 582 1,697 365 3,728 2,098 1,702 651 8,179 391 1,095 496 280 2,262 67 712 615 323 1,717 3,270 291 591 48 4,200 943 530 425 164 2,062 Individual Life Individual Annuities Group Insurance Total Insurance Division Quarter Ended December 31, 2005 Individual Life 109 277 128 66 580 Individual Annuities 17 181 150 84 432 Group Insurance 817 72 147 14 1,050 175 48 18 (82) 75 204 438 142 39 79 10 (113) 37 237 289 143 780 48 2 (1) 141 970 80 (1) Revenues exclude realized investment gains, net of losses and related charges and adjustments. Benefits and expenses exclude charges related to realized investment gains, net of losses. (2) General and administrative expenses for Individual Annuities include $89 million for the twelve months ended December 31, 2006, $42 million for the twelve months ended December 31, 2005, $30 million for the quarter ended December 31, 2006 and $5 million for the quarter ended December 31, 2005 for the amortization, net of interest, of value of business acquired (VOBA) associated with the American Skandia and Allstate acquisitions. Page 11
Slide 15: Prudential Financial, Inc. Quarterly Financial Supplement Fourth Quarter 2006 INSURANCE DIVISION - INDIVIDUAL LIFE SALES, ACCOUNT VALUE ACTIVITY, AND FACE AMOUNT IN FORCE (in millions) Year-to-date 2006 2005 SALES: Excluding corporate-owned life insurance: 90 192 148 430 12 442 83 214 122 419 7 426 Variable life Universal life Term life Total excluding corporate-owned life insurance Corporate-owned life insurance Total SALES BY DISTRIBUTION CHANNEL: Excluding corporate-owned life insurance: 181 249 12 442 212 207 7 426 Prudential Agents Third party distribution Corporate-owned life insurance Total ACCOUNT VALUE ACTIVITY: Policyholders' Account Balances (1): Beginning balance Premiums and deposits Surrenders and withdrawals Net sales Benefit payments Net flows Interest credited and other Net transfers from separate account Policy charges Ending balance Separate Account Liabilities: Beginning balance Premiums and deposits Surrenders and withdrawals Net sales Benefit payments Net flows Change in market value, interest credited and other Net transfers to general account Policy charges Ending balance FACE AMOUNT IN FORCE (2): Variable life Universal life Term life Total 2005 4Q 1Q 2Q 2006 3Q 4Q 27 56 33 116 2 118 21 40 31 92 1 93 24 43 34 101 4 105 25 34 35 94 5 99 20 75 48 143 2 145 50 66 2 118 45 47 1 93 45 56 4 105 37 57 5 99 54 89 2 145 5,694 1,278 (1,018) 260 (138) 122 352 242 (245) 6,165 5,284 1,208 (815) 393 (126) 267 154 188 (199) 5,694 5,619 289 (216) 73 (39) 34 45 49 (53) 5,694 5,694 307 (242) 65 (37) 28 83 55 (58) 5,802 5,802 332 (278) 54 (32) 22 60 66 (59) 5,891 5,891 299 (284) 15 (36) (21) 149 59 (60) 6,018 6,018 340 (214) 126 (33) 93 60 62 (68) 6,165 16,170 1,221 (693) 528 (34) 494 1,962 (242) (798) 17,586 15,180 1,356 (653) 703 (18) 685 1,298 (188) (805) 16,170 15,808 407 (149) 258 (5) 253 359 (49) (201) 16,170 16,170 301 (177) 124 (9) 115 653 (55) (201) 16,682 16,682 332 (198) 134 (9) 125 (228) (66) (200) 16,313 16,313 298 (173) 125 (7) 118 574 (59) (199) 16,747 16,747 290 (145) 145 (9) 136 963 (62) (198) 17,586 142,408 18,835 201,139 362,382 141,962 19,639 210,589 372,190 140,629 20,318 221,072 382,019 140,139 21,017 231,971 393,127 139,847 21,971 247,933 409,751 (1) Includes fixed rate funds, alliance deposits, supplementary contracts and deferred revenues on variable products. (2) At end of period; before reinsurance ceded. Page 12
Slide 16: Prudential Financial, Inc. Quarterly Financial Supplement Fourth Quarter 2006 INSURANCE DIVISION - SUPPLEMENTARY INFORMATION FOR INDIVIDUAL LIFE INSURANCE (dollar amounts in millions) Year-to-date 2006 2005 Individual Life Insurance: Policy Surrender Experience: 744 698 Cash value of surrenders Cash value of surrenders as a percentage of mean future policy benefits, policyholders' account balances, 3.5% 3.5% and separate account balances 2005 4Q 1Q 2Q 2006 3Q 4Q 163 191 212 181 160 3.2% 3.7% 4.1% 3.4% 2.9% Death benefits per $1,000 of in force (1): 3.31 1.38 2.84 2.97 1.12 2.61 Variable and universal life Term life Total, Individual Life Insurance 3.04 0.89 2.63 2.87 1.09 2.50 3.59 1.64 3.20 3.22 1.92 2.93 3.51 1.17 2.84 (1) Annualized, for interim reporting periods. Amounts are stated net of reinsurance. Page 13
Slide 17: Prudential Financial, Inc. Quarterly Financial Supplement Fourth Quarter 2006 INSURANCE DIVISION - INDIVIDUAL ANNUITIES SALES RESULTS, ACCOUNT VALUES AND MINIMUM GUARANTEES (in millions) Year-to-date 2006 2005 SALES AND ACCOUNT VALUES: Variable Annuities: 50,778 9,593 (7,722) 1,871 (918) 953 7,448 (936) 16,312 74,555 47,418 7,106 (5,691) 1,415 (678) 737 3,299 (676) 50,778 Beginning total account value Sales Surrenders and withdrawals Net sales Benefit payments Net flows Change in market value, interest credited, and other Policy charges Acquisition Ending total account value Fixed Annuities: 3,991 119 (313) (194) (176) (370) 131 (4) 3,748 3,879 361 (231) 130 (160) (30) 147 (5) 3,991 Beginning total account value Sales Surrenders and withdrawals Net sales (redemptions) Benefit payments Net flows Interest credited and other Policy charges Ending total account value SALES BY DISTRIBUTION CHANNEL: Variable and Fixed Annuities (1): 1,990 1,069 6,653 9,712 1,494 542 5,431 7,467 Insurance Agents Wirehouses Independent Financial Planners (2) Total VARIABLE ANNUITY MINIMUM DEATH BENEFIT GUARANTEES (3): Return of net deposits: Account value Net amount at risk Minimum return, anniversary contract value, or maximum contract value: Account value Net amount at risk Variable Annuity Account Values with Living Benefit Features (3): Guaranteed minimum accumulation benefits Guaranteed minimum withdrawal benefits Guaranteed minimum income benefits Guaranteed minimum withdrawal & income benefits Total 2005 4Q 1Q 2Q 2006 3Q 4Q 49,484 1,964 (1,436) 528 (158) 370 1,106 (182) 50,778 50,778 2,129 (1,585) 544 (185) 359 2,228 (184) 53,181 53,181 2,500 (1,757) 743 (225) 518 (1,000) (204) 16,312 68,807 68,807 2,323 (2,084) 239 (244) (5) 2,012 (259) 70,555 70,555 2,641 (2,296) 345 (264) 81 4,208 (289) 74,555 4,033 27 (66) (39) (41) (80) 39 (1) 3,991 3,991 28 (69) (41) (43) (84) 35 (1) 3,941 3,941 32 (92) (60) (42) (102) 33 (1) 3,871 3,871 33 (75) (42) (41) (83) 27 (1) 3,814 3,814 26 (77) (51) (50) (101) 36 (1) 3,748 391 176 1,424 1,991 405 194 1,558 2,157 481 266 1,785 2,532 466 257 1,633 2,356 638 352 1,677 2,667 28,290 1,974 17,022 1,809 29,988 1,751 17,755 1,600 32,897 1,870 30,594 3,378 34,288 1,724 30,942 3,009 37,071 1,491 32,118 2,528 7,162 815 3,052 2,951 13,980 7,738 885 3,203 4,155 15,981 9,231 1,678 7,047 5,304 23,260 9,667 1,853 7,113 6,678 25,311 10,452 2,028 7,329 8,570 28,379 (1) Amounts represent gross sales. (2) Including bank distribution. (3) At end of period. Page 14
Slide 18: Prudential Financial, Inc. Quarterly Financial Supplement Fourth Quarter 2006 INSURANCE DIVISION - INDIVIDUAL ANNUITIES ACCOUNT VALUE ACTIVITY (in millions) Year-to-date 2006 2005 INDIVIDUAL ANNUITIES: Account Values in General Account (1): Beginning balance Premiums and deposits Surrenders and withdrawals Net redemptions Benefit payments Net flows Interest credited and other Net transfers (to) from separate account Policy charges Acquisition Ending balance Account Values in Separate Account: Beginning balance Premiums and deposits Surrenders and withdrawals Net sales Benefit payments Net flows Change in market value, interest credited and other Net transfers (to) from general account Policy charges Acquisition Ending balance 2005 4Q 1Q 2Q 2006 3Q 4Q 9,231 462 (1,268) (806) (401) (1,207) 368 (416) (3) 1,554 9,527 45,538 9,250 (6,767) 2,483 (692) 1,791 7,210 416 (937) 14,758 68,776 9,613 649 (935) (286) (303) (589) 361 (146) (8) 9,231 41,684 6,818 (4,988) 1,830 (534) 1,296 3,085 146 (673) 45,538 9,437 69 (250) (181) (72) (253) 88 (39) (2) 9,231 44,080 1,922 (1,252) 670 (127) 543 1,057 39 (181) 45,538 9,231 74 (273) (199) (94) (293) 86 (173) (1) 8,850 45,538 2,083 (1,380) 703 (134) 569 2,177 173 (185) 48,272 8,850 96 (313) (217) (92) (309) 89 539 (1) 1,554 10,722 48,272 2,436 (1,537) 899 (175) 724 (1,056) (539) (203) 14,758 61,956 10,722 182 (350) (168) (101) (269) 98 (329) 10,222 61,956 2,173 (1,809) 364 (184) 180 1,942 329 (260) 64,147 10,222 110 (332) (222) (114) (336) 95 (453) (1) 9,527 64,147 2,558 (2,041) 517 (199) 318 4,147 453 (289) 68,776 (1) Premiums and deposits, and surrenders and withdrawals, are classified within the general account and separate account for purposes of this presentation based on the allocation of customer funds. For example, premiums allocated by customers to separate account investments at the time of sale, while remitted through the company's general account, are shown as separate account premium in this display, rather than as general account premium and transfers to the separate account. Page 15
Slide 19: Prudential Financial, Inc. Quarterly Financial Supplement Fourth Quarter 2006 INSURANCE DIVISION - SUPPLEMENTARY INFORMATION FOR GROUP INSURANCE (dollar amounts in millions) Year-to-date 2006 2005 2005 4Q 1Q 2Q 2006 3Q 4Q GROUP INSURANCE NEW ANNUALIZED PREMIUMS: 366 138 504 370 154 524 Group life Group disability (1) Total 34 17 51 206 74 280 25 18 43 98 29 127 37 17 54 Future Policy Benefits (2): Group life Group disability (1) Total Policyholders' Account Balances (2): Group life Group disability (1) Total Separate Account Liabilities (2): Group life Group disability (1) Total Group Life Insurance: 3,296 3,085 91.8% 9.6% 3,009 2,822 88.9% 8.9% Gross premiums, policy charges and fee income (3) Earned premiums, policy charges and fee income Benefits ratio Administrative operating expense ratio Persistency ratio Group Disability Insurance (1): 823 778 85.5% 21.5% 781 739 95.4% 20.9% Gross premiums, policy charges and fee income (3) Earned premiums, policy charges and fee income Benefits ratio Administrative operating expense ratio Persistency ratio 190 182 92.9% 21.6% 85.4% 199 189 87.3% 21.6% 94.2% 203 198 89.4% 21.7% 92.2% 210 195 79.5% 20.5% 90.8% 211 196 85.7% 22.3% 89.9% 964 707 86.4% 7.3% 95.2% 791 755 92.1% 9.4% 96.5% 954 752 95.4% 7.9% 95.9% 763 784 89.8% 10.0% 95.1% 788 794 90.1% 11.4% 94.8% 12,294 12,294 12,588 12,588 14,334 14,334 15,023 15,023 16,412 16,412 4,916 98 5,014 4,935 95 5,030 5,178 101 5,279 5,325 108 5,433 5,466 112 5,578 2,004 413 2,417 1,967 474 2,441 1,980 496 2,476 1,953 498 2,451 2,181 519 2,700 (1) Group disability amounts include long-term care products. (2) As of end of period. (3) Before returns of premiums to participating policyholders for favorable claims experience. Page 16
Slide 20: Prudential Financial, Inc. Quarterly Financial Supplement Fourth Quarter 2006 INSURANCE DIVISION - DEFERRED POLICY ACQUISITION COSTS (in millions) Year-to-date 2006 2005 2005 4Q 1Q 2Q 2006 3Q 4Q INDIVIDUAL LIFE INSURANCE: 3,187 351 (2) 14 3,550 3,151 314 (369) 91 3,187 Beginning balance Capitalization Amortization - operating results Amortization - realized investment gains and losses Impact of unrealized (gains) or losses on AFS securities Ending balance INDIVIDUAL ANNUITIES: 1,256 534 (203) 20 6 1,613 907 421 (173) (1) 102 1,256 Beginning balance Capitalization Amortization - operating results Amortization - realized investment gains and losses Impact of unrealized (gains) or losses on AFS securities Ending balance GROUP INSURANCE: 170 116 (2) 284 170 111 62 (3) Beginning balance Capitalization Amortization - operating results Amortization - realized investment gains and losses Impact of unrealized losses on AFS securities Ending balance TOTAL INSURANCE DIVISION: Beginning balance Capitalization Amortization - operating results Amortization - realized investment gains and losses Impact of unrealized (gains) or losses on AFS securities Ending balance 170 169 1 227 170 57 239 251 227 12 239 13 (1) 284 251 34 (1) 1,155 113 (37) 2 23 1,256 1,256 119 (57) 19 1,337 1,337 133 (51) 8 43 1,470 1,470 131 (28) 12 (53) 1,532 1,532 151 (67) (3) 1,613 22 3,187 3,158 82 (75) 60 3,253 3,187 80 (74) 32 3,277 3,253 83 (91) (80) 3,508 3,277 91 220 2 3,550 3,508 97 (57) 4,613 1,001 (207) 20 20 5,447 4,169 797 (545) (1) 193 4,613 4,482 196 (112) 2 45 4,613 4,613 256 (131) 79 4,817 4,817 228 (142) 8 75 4,986 4,986 235 191 12 (133) 5,291 5,291 282 (125) (1) 5,447 Page 17
Slide 21: Prudential Financial, Inc. Quarterly Financial Supplement Fourth Quarter 2006 COMBINED STATEMENTS OF OPERATIONS - INVESTMENT DIVISION (in millions) Year-to-date 2006 294 179 3,663 2,866 7,002 2005 320 188 3,155 2,511 6,174 % Change Revenues (1): -8% -5% 16% 14% 13% Premiums Policy charges and fee income Net investment income Asset management fees, commissions and other income Total revenues Benefits and Expenses (1): 2005 4Q 70 48 817 648 1,583 1Q 92 48 849 745 1,734 2Q 30 43 917 656 1,646 2006 3Q 84 45 927 625 1,681 4Q 88 43 970 840 1,941 1,104 1,853 238 (93) 52 2,685 5,839 1,163 1,049 1,633 115 (61) 54 2,677 5,467 707 5% 13% 107% -52% -4% 0% 7% 64% Insurance and annuity benefits Interest credited to policyholders' account balances Interest expense Deferral of acquisition costs Amortization of acquisition costs General and administrative expenses Total benefits and expenses Adjusted operating income (loss) before income taxes 266 421 45 (15) 13 857 1,587 (4) 269 429 46 (22) 13 759 1,494 240 235 452 62 (22) 17 586 1,330 316 297 475 63 (25) 12 607 1,429 252 303 497 67 (24) 10 733 1,586 355 (1) Revenues exclude realized investment gains, net of losses and related charges and adjustments, investment gains, net of losses, on trading account assets supporting insurance liabilities and include revenues representing equity in earnings of operating joint ventures. Benefits and expenses exclude charges related to realized investment gains, net of losses and change in experience-rated contractholder liabilities due to asset value changes. Page 18
Slide 22: Prudential Financial, Inc. Quarterly Financial Supplement Fourth Quarter 2006 COMBINING STATEMENTS OF OPERATIONS - INVESTMENT DIVISION (in millions) Twelve Months Ended December 31, 2006 Total Investment Division Revenues (1): Premiums Policy charges and fee income Net investment income Asset management fees, commissions and other income Total revenues Benefits and Expenses (1): Insurance and annuity benefits Interest credited to policyholders' account balances Interest expense Deferral of acquisition costs Amortization of acquisition costs General and administrative expenses Total benefits and expenses Adjusted operating income before income taxes 1,104 1,853 238 (93) 52 2,685 5,839 1,163 41 (17) 27 1,406 1,457 593 513 513 61 1,104 1,853 197 (76) 25 766 3,869 509 303 497 67 (24) 10 733 1,586 355 16 (3) 6 430 449 187 95 95 47 303 497 51 (21) 4 208 1,042 121 294 179 3,663 2,866 7,002 213 1,837 2,050 25 549 574 294 179 3,425 480 4,378 88 43 970 840 1,941 65 571 636 1 141 142 88 43 904 128 1,163 Asset Management Financial Advisory Retirement Total Investment Division Asset Management Financial Advisory Retirement Quarter Ended December 31, 2006 Twelve Months Ended December 31, 2005 Total Investment Division Revenues (1): Premiums Policy charges and fee income Net investment income Asset management fees, commissions and other income Total revenues Benefits and Expenses (1): Insurance and annuity benefits Interest credited to policyholders' account balances Interest expense Deferral of acquisition costs Amortization of acquisition costs General and administrative expenses Total benefits and expenses Adjusted operating income (loss) before income taxes 1,049 1,633 115 (61) 54 2,677 5,467 707 16 (17) 33 1,200 1,232 464 708 708 (255) 1,049 1,633 99 (44) 21 769 3,527 498 266 421 45 (15) 13 857 1,587 (4) 320 188 3,155 2,511 6,174 105 1,591 1,696 10 443 453 320 188 3,040 477 4,025 70 48 817 648 1,583 Asset Management Financial Advisory Retirement Total Investment Division Quarter Ended December 31, 2005 Asset Management Financial Advisory Retirement 30 406 436 3 121 124 70 48 784 121 1,023 6 (3) 7 317 327 109 328 328 (204) 266 421 39 (12) 6 212 932 91 (1) Revenues exclude realized investment gains, net of losses and related charges and adjustments, investment gains, net of losses, on trading account assets supporting insurance liabilities and include revenues representing equity in earnings of operating joint ventures. Benefits and expenses exclude charges related to realized investment gains, net of losses and change in experience-rated contractholder liabilities due to asset value changes. Page 19
Slide 23: Prudential Financial, Inc. Quarterly Financial Supplement Fourth Quarter 2006 INVESTMENT DIVISION - SUPPLEMENTARY REVENUE AND ASSETS UNDER MANAGEMENT INFORMATION FOR ASSET MANAGEMENT SEGMENT Supplementary Revenue Information (in millions): Year-to-date 2006 2005 % Change 2005 4Q 1Q 2Q 2006 3Q 4Q Analysis of revenues by type: 974 581 495 2,050 886 345 465 1,696 10% 68% 6% 21% Asset management fees Incentive, transaction, principal investing and capital markets revenues Service, distribution and other revenues Total Asset Management segment revenues 233 88 115 436 234 144 124 502 237 111 121 469 244 79 120 443 259 247 130 636 Analysis of asset management fees by source: 426 310 238 974 359 289 238 886 19% 7% 0% 10% Institutional customers Retail customers General account Total asset management fees 97 76 60 233 98 76 60 234 102 76 59 237 111 75 58 244 115 83 61 259 Supplementary Assets Under Management Information (in billions): December 31, 2006 Fixed Equity Institutional customers Retail customers General account Total 54.7 58.1 4.0 116.8 Income 78.7 19.4 162.8 260.9 Real Estate 23.4 1.5 0.8 25.7 Total 156.8 79.0 167.6 403.4 December 31, 2005 Fixed Equity Institutional customers Retail customers General account Total 48.9 52.7 3.5 105.1 Income 68.2 19.2 154.6 242.0 Real Estate 17.6 1.6 1.1 20.3 Total 134.7 73.5 159.2 367.4 Page 20
Slide 24: Prudential Financial, Inc. Quarterly Financial Supplement Fourth Quarter 2006 INVESTMENT DIVISION - SUPPLEMENTARY ASSETS UNDER MANAGEMENT AND ADMINISTRATION INFORMATION FOR ASSET MANAGEMENT SEGMENT (in billions) Year-to-date 2006 2005 Institutional Assets Under Management: Assets gathered by Investment Management & Advisory Services sales force: 101.3 27.7 (16.9) 10.3 0.5 122.9 33.9 156.8 10.8 84.8 22.9 (12.5) 6.3 (0.2) 101.3 33.4 134.7 10.4 Beginning assets under management Additions (1) Withdrawals Change in market value Net money market flows Ending assets under management Affiliated institutional assets under management Total assets managed for institutional customers at end of period Net institutional additions other than money market Retail Assets Under Management: Assets gathered by Investment Management & Advisory Services sales force: 38.7 10.0 (9.8) 3.6 0.9 43.4 35.6 79.0 0.2 33.2 8.8 (8.2) 4.1 0.1 0.7 38.7 34.8 73.5 0.6 Beginning assets under management Additions Withdrawals Change in market value Net money market flows Other (2) Ending assets under management Affiliated retail assets under management Total assets managed for retail customers at end of period Net retail additions (withdrawals) other than money market Wrap-fee Product Assets Under Administration: 53.6 22.3 (14.6) 7.8 69.1 7.7 39.7 21.7 (10.8) 3.0 53.6 10.9 Beginning total wrap-fee product assets Additions (3) Withdrawals Change in market value Ending total wrap-fee product assets Net wrap-fee product additions 50.2 5.3 (3.0) 1.1 53.6 2.3 53.6 6.9 (4.1) 2.7 59.1 2.8 59.1 6.1 (3.6) (1.1) 60.5 2.5 60.5 4.7 (3.2) 1.9 63.9 1.5 63.9 4.6 (3.7) 4.3 69.1 0.9 36.8 3.3 (2.3) 1.0 0.1 (0.2) 38.7 34.8 73.5 1.0 38.7 2.7 (2.3) 1.3 0.1 40.5 35.1 75.6 0.4 40.5 3.3 (3.0) (1.0) 0.9 40.7 34.4 75.1 0.3 40.7 1.9 (2.6) 1.3 41.3 34.6 75.9 (0.7) 41.3 2.1 (1.9) 2.0 (0.1) 43.4 35.6 79.0 0.2 95.0 7.3 (3.1) 2.0 0.1 101.3 33.4 134.7 4.2 101.3 7.3 (4.0) 1.9 0.2 106.7 32.0 138.7 3.3 106.7 5.3 (4.4) (0.4) (0.1) 107.1 31.4 138.5 0.9 107.1 6.8 (3.6) 4.3 0.4 115.0 32.9 147.9 3.2 115.0 8.3 (4.9) 4.5 122.9 33.9 156.8 3.4 2005 4Q 1Q 2Q 2006 3Q 4Q (1) Additions include $1.8 billion for the year ended December 31, 2006, $0.4 billion for the quarter ended June 30, 2006, $1.4 billion for the quarter ended March 31, 2006, $.8 billion for the quarter ended December 31, 2005 and $1.2 billion for the year ended December 31, 2005 for assets transferred from the Retirement segment. (2) Represents transfers of retail assets from or to non-Prudential managers. (3) Substantially all relates to a contractual arrangement with Wachovia which provides for an essentially fixed annual fee commencing July 1, 2005. Page 21
Slide 25: Prudential Financial, Inc. Quarterly Financial Supplement Fourth Quarter 2006 INVESTMENT DIVISION - SUPPLEMENTARY INFORMATION FOR FINANCIAL ADVISORY SEGMENT (dollar amounts in millions unless otherwise noted) Year-to-date 2006 2005 2005 4Q 1Q 2Q 2006 3Q 4Q Information pertaining to Wachovia Securities Financial Holdings, LLC: Revenues: Net investment income Commissions Fees Other non-interest revenues Total revenues Expenses: Expenses before transition costs Transition costs Total expenses Income before income taxes Prudential Financial, Inc., 38% share of Wachovia Securities Financial Holdings, LLC Purchase accounting and related adjustments Prudential Financial, Inc., equity income from Wachovia Securities Financial Holdings, LLC Recurring revenue as a percentage of total non-interest revenue (1) Total client assets ($ in billions) (2) (3) Distribution representatives (2): Series 7 Financial Advisors Series 6 Financial Representatives Customer debit balances ($ in billions) (2) 308 1,846 2,126 206 4,486 3,700 3,700 786 299 (5) 294 252 1,852 1,842 170 4,116 3,529 65 3,594 522 198 (6) 192 70 449 485 47 1,051 892 892 159 60 1 61 48.2% 683.6 72 483 503 53 1,111 933 933 178 68 1 69 48.4% 688.7 76 451 534 33 1,094 926 926 168 63 (3) 60 49.0% 704.3 78 422 534 53 1,087 894 894 193 74 (1) 73 49.1% 729.9 82 490 555 67 1,194 947 947 247 94 (2) 92 49.4% 754.8 8,028 2,458 5.8 7,926 2,454 5.4 7,973 2,541 5.1 7,972 2,477 4.9 7,993 2,497 4.8 Prudential Financial, Inc. income (loss) from investment in Wachovia 27 (255) Securities Financial Holdings, LLC, including 38% interest in results, costs incurred at Prudential level, and purchase accounting adjustments (206) (107) 30 51 53 (1) Calculated on a YTD annualized basis. (2) As of end of period. (3) Beginning in 2Q06, certain mutual fund assets were added to the overall client asset total. Prior periods have not been restated. Page 22
Slide 26: Prudential Financial, Inc. Quarterly Financial Supplement Fourth Quarter 2006 INVESTMENT DIVISION - RETIREMENT SALES RESULTS AND ACCOUNT VALUES (in millions) Year-to-date 2006 2005 RETIREMENT SALES AND ACCOUNT VALUES Full Service: 88,385 16,156 (15,989) 8,878 97,430 167 83,891 13,006 (13,918) 5,406 88,385 (912) Beginning total account value Deposits and sales Withdrawals and benefits Change in market value, interest credited and interest income Ending total account value Net additions (withdrawals) Stable value account values included above Institutional Investment Products: 48,080 5,993 (6,356) 2,247 305 50,269 (363) 47,680 4,065 (5,533) 2,319 (451) 48,080 (1,468) Beginning total account value Additions Withdrawals and benefits (1) Change in market value, interest credited and interest income Other (2) Ending total account value Net additions (withdrawals) 2005 4Q 1Q 2Q 2006 3Q 4Q 88,337 3,046 (4,530) 1,532 88,385 (1,484) 31,266 88,385 5,381 (5,471) 3,559 91,854 (90) 30,696 91,854 4,138 (3,412) (1,043) 91,537 726 30,784 91,537 2,914 (3,272) 2,185 93,364 (358) 30,971 93,364 3,723 (3,834) 4,177 97,430 (111) 30,796 48,917 785 (2,234) 562 50 48,080 (1,449) 48,080 1,536 (2,452) 182 (131) 47,215 (916) 47,215 1,088 (1,429) 423 (384) 46,913 (341) 46,913 2,004 (711) 995 267 49,468 1,293 49,468 1,365 (1,764) 647 553 50,269 (399) (1) Withdrawals and benefits include $1.8 billion for the year ended December 31, 2006, $0.4 billion for the quarter ended June 30, 2006, $1.4 billion for the quarter ended March 31, 2006, $.8 billion for the quarter ended December 31, 2005 and $1.2 billion for the year ended December 31, 2005 for assets transferred to the Asset Management segment. (2) Primarily represents changes in asset balances for externally managed accounts. Page 23
Slide 27: Prudential Financial, Inc. Quarterly Financial Supplement Fourth Quarter 2006 COMBINED STATEMENTS OF OPERATIONS - INTERNATIONAL INSURANCE AND INVESTMENTS DIVISION (in millions) Year-to-date 2006 5,946 286 1,425 663 8,320 2005 6,098 264 1,324 472 8,158 % Change Revenues (1): -2% 8% 8% 40% 2% Premiums Policy charges and fee income Net investment income Asset management fees, commissions and other income Total revenues Benefits and Expenses (1): 2005 4Q 1,438 60 371 151 2,020 1Q 1,533 76 330 160 2,099 2Q 1,517 70 343 150 2,080 2006 3Q 1,438 70 376 172 2,056 4Q 1,458 70 376 181 2,085 4,682 251 10 (1,007) 454 2,364 6,754 1,566 4,865 207 22 (1,003) 390 2,261 6,742 1,416 -4% 21% -55% 0% 16% 5% 0% 11% Insurance and annuity benefits Interest credited to policyholders' account balances Interest expense Deferral of acquisition costs Amortization of acquisition costs General and administrative expenses Total benefits and expenses Adjusted operating income before income taxes 1,162 50 3 (242) 89 581 1,643 377 1,224 57 3 (256) 116 573 1,717 382 1,203 61 4 (257) 115 596 1,722 358 1,112 66 3 (242) 111 578 1,628 428 1,143 67 (252) 112 617 1,687 398 (1) Revenues exclude realized investment gains, net of losses and related charges and adjustments, investment gains, net of losses, on trading account assets supporting insurance liabilities and include revenues representing equity in earnings of operating joint ventures. Benefits and expenses exclude charges related to realized investment gains, net of losses and change in experience-rated contractholder liabilities due to asset value changes. Page 24
Slide 28: Prudential Financial, Inc. Quarterly Financial Supplement Fourth Quarter 2006 COMBINING STATEMENTS OF OPERATIONS - INTERNATIONAL INSURANCE AND INVESTMENTS DIVISION (in millions) Twelve Months Ended December 31, 2006 Total International Insurance & Investments Division Revenues (1): Premiums Policy charges and fee income Net investment income Asset management fees, commissions and other income Total revenues Benefits and Expenses (1): Insurance and annuity benefits Interest credited to policyholders' account balances Interest expense Deferral of acquisition costs Amortization of acquisition costs General and administrative expenses Total benefits and expenses Adjusted operating income before income taxes 4,682 251 10 (1,007) 454 2,364 6,754 1,566 3,018 106 11 (724) 357 1,178 3,946 930 1,664 145 (2) (283) 97 740 2,361 493 446 447 143 1 (252) 112 617 1,687 398 1,143 67 773 25 2 (187) 88 313 1,014 232 370 42 (2) (65) 24 176 545 132 128 128 34 5,946 286 1,425 663 8,320 3,917 221 670 68 4,876 2,029 65 724 36 2,854 31 559 590 1,458 70 376 181 2,085 988 57 179 22 1,246 470 13 186 8 677 11 151 162 International Insurance - Life Planner Operations International Insurance Gibraltar Life International Investments Total International Insurance & Investments Division International Insurance - Life Planner Operations International Insurance Gibraltar Life International Investments Quarter Ended December 31, 2006 Twelve Months Ended December 31, 2005 Total International Insurance & Investments Division Revenues (1): Premiums Policy charges and fee income Net investment income Asset management fees, commissions and other income Total revenues Benefits and Expenses (1): Insurance and annuity benefits Interest credited to policyholders' account balances Interest expense Deferral of acquisition costs Amortization of acquisition costs General and administrative expenses Total benefits and expenses Adjusted operating income before income taxes 4,865 207 22 (1,003) 390 2,261 6,742 1,416 2,836 102 21 (738) 296 1,157 3,674 808 2,029 105 (1) (265) 94 725 2,687 502 379 381 106 2 1,162 50 3 (242) 89 581 1,643 377 6,098 264 1,324 472 8,158 3,659 197 623 3 4,482 2,439 67 676 7 3,189 25 462 487 1,438 60 371 151 2,020 International Insurance - Life Planner Operations International Insurance Gibraltar Life International Investments Total International Insurance & Investments Division Quarter Ended December 31, 2005 International Insurance - Life Planner Operations International Insurance Gibraltar Life International Investments 890 44 193 21 1,148 548 16 171 6 741 7 124 131 707 23 4 (175) 68 292 919 229 455 27 (67) 21 194 630 111 (1) 95 94 37 (1) Revenues exclude realized investment gains, net of losses and related charges and adjustments, investment gains, net of losses, on trading account assets supporting insurance liabilities and include revenues representing equity in earnings of operating joint ventures. Benefits and expenses exclude charges related to realized investment gains, net of losses and change in experience-rated contractholder liabilities due to asset value changes. Page 25
Slide 29: Prudential Financial, Inc. Quarterly Financial Supplement Fourth Quarter 2006 INTERNATIONAL INSURANCE SEGMENT - SUPPLEMENTARY INCOME STATEMENT INFORMATION (Yen and Dollars in millions) Year-to-date 2006 2005 Japanese Yen Basis Results: Revenues (1): Japanese insurance operations excluding Gibraltar Life Gibraltar Life Total revenues, Japan, yen basis Benefits and Expenses (1): Japanese insurance operations excluding Gibraltar Life Gibraltar Life Total benefits and expenses, Japan, yen basis Adjusted operating income (2): Japanese insurance operations excluding Gibraltar Life Gibraltar Life Total adjusted operating income, Japan, yen basis U.S. Dollar adjusted operating income (3): $ 775 493 1,268 155 $ 1,423 $ $ 700 502 1,202 108 1,310 Japanese insurance operations excluding Gibraltar Life Gibraltar Life Total adjusted operating income, Japan, U.S. dollar basis All other countries Total adjusted operating income, International Insurance segment, U.S. dollar basis $ 340 $ 338 $ 324 $ 397 $ 364 $ 197 111 308 32 $ 196 110 306 32 $ 172 102 274 50 $ 213 149 362 35 $ 194 132 326 38 2005 4Q 2006 1Q 2Q 3Q 4Q ¥ 381,925 326,980 708,905 ¥ 351,573 347,469 699,042 ¥ 92,934 84,366 177,300 ¥ 98,534 84,650 183,184 ¥ 92,370 84,387 176,757 ¥ 95,125 80,804 175,929 ¥ 95,896 77,139 173,035 299,290 273,675 572,965 274,658 292,252 566,910 71,278 71,963 143,241 77,842 72,640 150,482 74,339 73,067 147,406 72,202 65,292 137,494 74,907 62,677 137,584 ¥ 82,635 53,305 135,940 ¥ 76,915 55,217 132,132 ¥ 21,656 12,403 34,059 ¥ 20,692 12,010 32,702 ¥ 18,031 11,320 29,351 ¥ 22,923 15,513 38,436 ¥ 20,989 14,462 35,451 (1) Revenues exclude realized investment gains, net of losses and related charges and adjustments, investment gains, net of losses, on trading account assets supporting insurance liabilities and include revenues representing equity in earnings of operating joint ventures. Benefits and expenses exclude charges related to realized investment gains, net of losses and change in experience-rated contractholder liabilities due to asset value changes. (2) Adjusted operating income on yen basis excludes impact of currency hedging. (3) U.S. dollar adjusted operating income includes impact of currency hedging. Page 26
Slide 30: Prudential Financial, Inc. Quarterly Financial Supplement Fourth Quarter 2006 INTERNATIONAL INSURANCE AND INVESTMENTS DIVISION - SALES RESULTS AND SUPPLEMENTARY INFORMATION (in millions) Year-to-date 2006 2005 2005 4Q 1Q 2Q 2006 3Q 4Q INTERNATIONAL INSURANCE OPERATING DATA: Actual exchange rate basis (1): Net premiums, policy charges and fee income: 2,789 2,094 1,349 6,232 2,699 2,506 1,157 6,362 Japan, excluding Gibraltar Life Gibraltar Life All other countries Total Annualized new business premiums: 480 357 287 1,124 576 323 280 1,179 Japan, excluding Gibraltar Life Gibraltar Life All other countries Total Annualized new business premiums by distribution channel: 767 308 49 1,124 856 323 1,179 Life Planners Gibraltar Life Advisors Banks (2) Total Constant exchange rate basis (3): Net premiums, policy charges and fee income: 3,180 2,386 1,278 6,844 2,906 2,669 1,160 6,735 Japan, excluding Gibraltar Life Gibraltar Life All other countries Total Annualized new business premiums: 529 385 273 1,187 599 340 281 1,220 Japan, excluding Gibraltar Life Gibraltar Life All other countries Total Annualized new business premiums by distribution channel: 802 336 49 1,187 880 340 1,220 Life Planners Gibraltar Life Advisors Banks (2) Total 283 202 81 308 228 80 192 102 19 313 182 78 20 280 200 76 10 286 119 81 83 283 153 80 75 308 123 121 69 313 125 98 57 280 128 86 72 286 722 631 308 1,661 839 649 304 1,792 777 626 317 1,720 779 554 316 1,649 785 557 341 1,683 265 191 74 289 216 73 185 96 19 300 174 71 20 265 192 68 10 270 109 74 82 265 138 73 78 289 113 115 72 300 114 91 60 265 115 78 77 270 630 564 304 1,498 731 562 316 1,609 693 559 335 1,587 685 490 333 1,508 680 483 365 1,528 (1) Translated based on applicable average exchange rates for the period shown. (2) Substantially all bank channel distribution represents U.S. dollar denominated Gibraltar Life fixed annuities. (3) Foreign currencies translated to U.S. dollars at uniform exchange rates for all periods presented, including Japanese yen, 102 per U.S. dollar; Korean won 1030 per U.S. dollar. Page 27
Slide 31: Prudential Financial, Inc. Quarterly Financial Supplement Fourth Quarter 2006 INTERNATIONAL INSURANCE AND INVESTMENTS DIVISION - SALES RESULTS AND SUPPLEMENTARY INFORMATION 2005 4Q 1Q 2Q 2006 3Q 4Q Face amount of individual policies in force at end of period (in billions) (1)(2): (Constant exchange rate basis) Japan, excluding Gibraltar Life Gibraltar Life All other countries Total Number of individual policies in force at end of period (in thousands) (2): Japan, excluding Gibraltar Life Gibraltar Life All other countries Total International life insurance policy persistency: Excluding Gibraltar Life: 13 months 25 months Gibraltar Life: 13 months 25 months Number of Life Planners at end of period: Japan All other countries Total life planners Gibraltar Life Advisors 2,753 2,874 5,627 5,436 2,855 2,857 5,712 5,716 2,847 2,879 5,726 5,684 2,941 2,861 5,802 6,036 2,956 2,872 5,828 5,944 94.2% 87.3% 94.3% 87.7% 94.2% 88.0% 94.4% 87.9% 94.4% 87.8% 93.0% 87.1% 92.8% 87.1% 93.0% 87.4% 92.9% 87.0% 93.0% 87.1% 1,956 3,915 1,088 6,959 1,996 3,890 1,127 7,013 2,023 3,871 1,150 7,044 2,049 3,872 1,169 7,090 2,074 3,871 1,201 7,146 222 199 87 508 226 198 90 514 229 197 91 517 232 197 92 521 236 196 93 525 (1) Foreign currencies translated to U.S. dollars at uniform exchange rates for all periods presented, including Japanese yen, 102 per U.S. dollar; Korean won 1030 per U.S. dollar. (2) Direct business only; policy count includes annuities. Page 28
Slide 32: Prudential Financial, Inc. Quarterly Financial Supplement Fourth Quarter 2006 INVESTMENT PORTFOLIO COMPOSITION (in millions) December 31, 2006 Closed Consolidated Portfolio Fixed maturities: Public, available for sale, at fair value Public, held to maturity, at amortized cost Private, available for sale, at fair value Private, held to maturity, at amortized cost Trading account assets supporting insurance liabilities, at fair value Other trading account assets, at fair value Equity securities, available for sale, at fair value Commercial loans Policy loans Other long-term investments (1) Short-term investments Subtotal (2) Invested assets of other entities and operations (3) Total investments 131,554 3,025 30,357 443 14,262 109 8,086 24,593 8,887 3,756 4,603 229,675 5,742 235,417 38,752 12,021 3,772 7,318 5,415 965 1,851 70,094 70,094 92,802 3,025 18,336 443 14,262 109 4,314 17,275 3,472 2,791 2,752 159,581 5,742 165,323 58.2% 1.9% 11.5% 0.3% 8.9% 0.1% 2.7% 10.8% 2.2% 1.7% 1.7% 100.0% 122,897 3,022 30,980 227 13,781 124 7,067 23,045 8,370 3,491 3,837 216,841 4,560 221,401 35,885 13,361 3,216 7,264 5,403 973 1,394 67,496 67,496 87,012 3,022 17,619 227 13,781 124 3,851 15,781 2,967 2,518 2,443 149,345 4,560 153,905 58.3% 2.0% 11.8% 0.1% 9.2% 0.1% 2.6% 10.6% 2.0% 1.7% 1.6% 100.0% Block Business Financial Services Businesses Amount % of Total Consolidated Portfolio December 31, 2005 Closed Block Business Financial Services Businesses Amount % of Total Fixed Maturities by Credit Quality (2): Gross Amortized Cost Public Fixed Maturities: NAIC Rating (4) 1 2 3 4 5 6 Total Private Fixed Maturities: NAIC Rating (4) 1 2 3 4 5 6 Total Rating Agency Equivalent Aaa, Aa, A Baa Subtotal Investment Grade Ba B C and lower In or near default Subtotal Below Investment Grade 6,214 9,463 15,677 1,422 645 321 139 2,527 18,204 248 377 625 50 12 18 11 91 716 Rating Agency Equivalent Aaa, Aa, A Baa Subtotal Investment Grade Ba B C and lower In or near default Subtotal Below Investment Grade 75,796 13,328 89,124 2,692 1,746 115 48 4,601 93,725 1,787 580 2,367 109 93 8 7 217 2,584 Unrealized Gains December 31, 2006 Financial Services Businesses Gross Unrealized Losses Fair Value % of Total Amortized Cost December 31, 2005 Financial Services Businesses Gross Unrealized Gains Gross Unrealized Losses Fair Value % of Total 322 137 459 22 23 2 1 48 507 77,261 13,771 91,032 2,779 1,816 121 54 4,770 95,802 80.6% 14.4% 95.0% 2.9% 1.9% 0.1% 0.1% 5.0% 100.0% 67,981 15,376 83,357 2,710 1,109 102 28 3,949 87,306 2,254 746 3,000 124 71 6 10 211 3,211 298 138 436 43 20 5 1 69 505 69,937 15,984 85,921 2,791 1,160 103 37 4,091 90,012 77.7% 17.8% 95.5% 3.1% 1.3% 0.1% 0.0% 4.5% 100.0% 49 73 122 11 7 4 1 23 145 6,413 9,767 16,180 1,461 650 335 149 2,595 18,775 34.2% 52.0% 86.2% 7.7% 3.5% 1.8% 0.8% 13.8% 100.0% 5,596 9,437 15,033 1,105 507 339 70 2,021 17,054 269 522 791 44 33 23 8 108 899 27 63 90 7 5 2 2 16 106 5,838 9,896 15,734 1,142 535 360 76 2,113 17,847 32.7% 55.5% 88.2% 6.4% 3.0% 2.0% 0.4% 11.8% 100.0% (1) Other long-term investments consist of real estate and non-real estate related investments in joint ventures (other than our investments in operating joint ventures, including our equity investment in Wachovia Securities Financial Holdings, LLC) and partnerships, investment real estate held through direct ownership, our interest in separate account investments and other miscellaneous investments. (2) Excludes (i) assets of our securities brokerage, securities trading, banking operations and real estate and relocation services, (ii) assets of our asset management operations, including assets managed for third parties, and (iii) those assets classified as "separate account assets" on our balance sheet. (3) Includes assets of our securities brokerage, securities trading, banking and asset management operations and real estate and relocation services. Excludes assets of our asset management operations managed for third parties and those assets classified as "separate account assets" on our balance sheet. Our investment in operating joint ventures, including our investment in Wachovia Securities Financial Holdings, LLC is included in "Other assets". (4) Reflects equivalent ratings for investments of international insurance operations that are not rated by United States insurance regulatory authorities. Includes, as of December 31, 2006 and December 31, 2005, respectively, 231 securities with amortized cost of $3,515 million (fair value $3,588 million) and 205 securities with amortized cost of $3,640 million (fair value, $3,689 million) that have been categorized based on expected NAIC designations pending receipt of SVO ratings. Page 29
Slide 33: Prudential Financial, Inc. Quarterly Financial Supplement Fourth Quarter 2006 FINANCIAL SERVICES BUSINESSES INVESTMENT PORTFOLIO COMPOSITION (in millions) December 31, 2006 Amount Japanese Insurance Operations: Fixed maturities: Public, available for sale, at fair value Public, held to maturity, at amortized cost Private, available for sale, at fair value Private, held to maturity, at amortized cost Trading account assets supporting insurance liabilities, at fair value Other trading account assets, at fair value Equity securities, available for sale, at fair value Commercial loans Policy loans Other long-term investments (1) Short-term investments Total 32,242 3,025 3,139 443 1,106 28 2,372 2,782 1,016 970 374 47,497 67.9% 6.4% 6.6% 0.9% 2.3% 0.1% 5.0% 5.9% 2.1% 2.0% 0.8% 100.0% 30,757 3,022 2,659 227 1,022 26 2,021 2,278 943 941 326 44,222 69.6% 6.8% 6.0% 0.5% 2.3% 0.1% 4.6% 5.2% 2.1% 2.1% 0.7% 100.0% % of Total December 31, 2005 Amount % of Total December 31, 2006 Amount Financial Services Businesses excluding Japanese Insurance Operations (2): Fixed maturities: Public, available for sale, at fair value Public, held to maturity, at amortized cost Private, available for sale, at fair value Private, held to maturity, at amortized cost Trading account assets supporting insurance liabilities, at fair value Other trading account assets, at fair value Equity securities, available for sale, at fair value Commercial loans Policy loans Other long-term investments (1) Short-term investments Total 60,560 15,197 13,156 81 1,942 14,493 2,456 1,821 2,378 112,084 54.0% 0.0% 13.6% 0.0% 11.7% 0.1% 1.7% 12.9% 2.2% 1.7% 2.1% 100.0% % of Total December 31, 2005 Amount % of Total 56,255 14,960 12,759 98 1,830 13,503 2,024 1,577 2,117 105,123 53.6% 0.0% 14.3% 0.0% 12.1% 0.1% 1.7% 12.8% 1.9% 1.5% 2.0% 100.0% (1) Other long-term investments consist of real estate and non-real estate related investments in joint ventures (other than our investments in operating joint ventures, including our equity investment in Wachovia Securities Financial Holdings, LLC) and partnerships, investment real estate held through direct ownership, our interest in separate account investments and other miscellaneous investments. Our investment in operating joint ventures, including our investment in Wachovia Securities Financial Holdings, LLC is included in "Other assets". (2) Excludes (i) assets of our securities brokerage, securities trading, banking operations and real estate and relocation services, (ii) assets of our asset management operations, including assets managed for third parties, and (iii) those assets classified as "separate account assets" on our balance sheet. Page 30
Slide 34: Prudential Financial, Inc. Quarterly Financial Supplement Fourth Quarter 2006 FINANCIAL SERVICES BUSINESSES INVESTMENT RESULTS (in millions) Quarter Ended December 31 2006 Realized Investment Income Yield (3) Financial Services Businesses (1): Fixed maturities Equity securities Commercial loans Policy loans Short-term investments and cash equivalents Other investments Gross investment income before investment expenses Investment expenses Subtotal Investment results of other entities and operations (2) Less, investment income relating to divested businesses Total 4.96% 5.30% 6.02% 5.13% 5.33% 8.21% 5.16% -0.16% 5.00% 1,386 49 197 44 102 57 1,835 (138) 1,697 317 (3) 2,011 229 95 133 133 96 34 1 3 4.72% 4.63% 6.29% 4.90% 4.28% 17.74% 5.13% -0.19% 4.94% 1,219 39 183 36 68 115 1,660 (112) 1,548 276 (2) 1,822 29 9 20 13 9 (91) 95 (8) Amount Gains / (Losses) Investment Income Yield (3) Amount 2005 (4) Realized Gains / (Losses) Twelve Months Ended December 31 2006 Realized Investment Income Yield (3) Financial Services Businesses (1): Fixed maturities Equity securities Commercial loans Policy loans Short-term investments and cash equivalents Other investments Gross investment income before investment expenses Investment expenses Subtotal Investment results of other entities and operations (2) Less, investment income relating to divested businesses Total 4.95% 5.15% 6.25% 5.04% 5.05% 8.12% 5.15% -0.17% 4.98% 5,315 182 760 158 342 217 6,974 (515) 6,459 1,215 (14) 7,660 293 287 126 126 167 (284) 122 1 4.71% 5.53% 6.89% 4.90% 2.91% 8.54% 4.96% -0.19% 4.77% 4,699 165 773 141 205 248 6,231 (391) 5,840 1,036 (13) 6,863 742 (2) 152 102 2 357 611 611 131 Amount Gains / (Losses) Investment Income Yield (3) Amount 2005 (4) Realized Gains / (Losses) (1) Excludes assets of our securities brokerage, securities trading, and banking operations, real estate and relocation services, commercial loans and trading account assets supporting insurance liabilities where the investment results generally accrue to contractholders, assets of our asset management operations, including assets managed for third parties, and those assets classified as "separate account assets" on our balance sheet. (2) Investment income of securities brokerage, securities trading, banking operations, real estate and relocation services, commercial loans, discontinued real estate operations, and trading account assets supporting insurance liabilities where the investment results generally accrue to contractholders. (3) Yields are annualized, for interim periods, and based on quarterly average carrying values except for fixed maturities, equity securities and securities lending activity. Yields for fixed maturities are based on amortized cost. Yields for equity securities are based on cost. Yields for securities lending activity are calculated net of corresponding liabilities and rebate expenses. Yields exclude investment income and assets related to commercial loans and trading account assets supporting insurance liabilities where the investment results generally accrue to contractholders and investment income on assets other than those included in invested assets of the Financial Services Businesses. (4) Classification for the earlier period presented has been conformed to the current presentation. Page 31
Slide 35: Prudential Financial, Inc. Quarterly Financial Supplement Fourth Quarter 2006 FINANCIAL SERVICES BUSINESSES INVESTMENT RESULTS - JAPANESE INSURANCE OPERATIONS (in millions) Quarter Ended December 31 2006 Realized Investment Income Yield (1) Japanese Insurance Operations: Fixed maturities Equity securities Commercial loans Policy loans Short-term investments and cash equivalents Other investments Gross investment income before investment expenses Investment expenses Total 2.57% 2.73% 4.13% 3.81% 4.93% 10.43% 2.90% -0.20% 2.70% 249 13 28 10 7 25 332 (28) 304 1 40 43 43 1 (2) 3 2.42% 2.53% 4.14% 3.44% 1.81% 32.50% 3.18% -0.21% 2.97% 222 11 25 8 2 74 342 (25) 317 2 (63) 85 1 (21) 2 Amount Gains / (Losses) Investment Income Yield (1) Amount 2005 (2) Realized Gains / (Losses) Twelve Months Ended December 31 2006 Realized Investment Income Yield (1) Japanese Insurance Operations: Fixed maturities Equity securities Commercial loans Policy loans Short-term investments and cash equivalents Other investments Gross investment income before investment expenses Investment expenses Total 2.54% 2.92% 3.81% 3.66% 3.91% 12.43% 2.87% -0.19% 2.68% 955 54 93 36 20 111 1,269 (96) 1,173 7 93 18 (1) 89 206 206 2.33% 3.02% 4.15% 3.43% 0.74% 13.96% 2.71% -0.19% 2.52% 858 52 115 34 5 156 1,220 (90) 1,130 (131) 123 120 4 55 171 171 Amount Gains / (Losses) Investment Income Yield (1) Amount 2005 (2) Realized Gains / (Losses) (1) Yields are annualized, for interim periods, and based on quarterly average carrying values except for fixed maturities, equity securities and securities lending activity. Yields for fixed maturities are based on amortized cost. Yields for equity securities are based on cost. Yields for securities lending activity are calculated net of corresponding liabilities and rebate expenses. Yields exclude investment income and assets related to trading account assets supporting insurance liabilities where the investment results generally accrue to contractholders and investment income on assets other than those included in invested assets of the Financial Services Businesses. (2) Classification for the earlier period presented has been conformed to the current presentation. Page 32
Slide 36: Prudential Financial, Inc. Quarterly Financial Supplement Fourth Quarter 2006 FINANCIAL SERVICES BUSINESSES INVESTMENT RESULTS - EXCLUDING JAPANESE INSURANCE OPERATIONS (in millions) Quarter Ended December 31 2006 Realized Investment Income Yield (2) Financial Services Businesses excluding Japanese Insurance Operations (1): Fixed maturities Equity securities Commercial loans Policy loans Short-term investments and cash equivalents Other investments Gross investment income before investment expenses Investment expenses Total 6.31% 8.12% 6.51% 5.68% 5.37% 7.04% 6.32% -0.15% 6.17% 1,137 36 169 34 95 32 1,503 (110) 1,393 90 (1) 55 90 33 3 6.05% 6.88% 6.86% 5.60% 4.65% 9.60% 6.16% -0.18% 5.98% 997 28 158 28 66 41 1,318 (87) 1,231 7 (1) 34 7 (28) 10 (8) Amount Gains / (Losses) Investment Income Yield (2) Amount 2005 (3) Realized Gains / (Losses) Twelve Months Ended December 31 2006 Realized Investment Income Yield (2) Financial Services Businesses excluding Japanese Insurance Operations (1): Fixed maturities Equity securities Commercial loans Policy loans Short-term investments and cash equivalents Other investments Gross investment income before investment expenses Investment expenses Total 6.33% 7.56% 6.86% 5.66% 5.19% 5.90% 6.34% -0.17% 6.17% 4,360 128 667 122 322 106 5,705 (419) 5,286 1 198 (80) (80) (291) 29 (17) 6.16% 8.91% 7.79% 5.65% 3.35% 5.06% 6.21% -0.19% 6.02% 3,841 113 658 107 200 92 5,011 (301) 4,710 (2) 302 440 440 129 29 (18) Amount Gains / (Losses) Investment Income Yield (2) Amount 2005 (3) Realized Gains / (Losses) (1) Excludes assets of our securities brokerage, securities trading, and banking operations, real estate and relocation services, commercial loans and trading account assets supporting insurance liabilities where the investment results generally accrue to contractholders, assets of our asset management operations, including assets managed for third parties, and those assets classified as "separate account assets" on our balance sheet. (2) Yields are annualized, for interim periods, and based on quarterly average carrying values except for fixed maturities, equity securities and securities lending activity. Yields for fixed maturities are based on amortized cost. Yields for equity securities are based on cost. Yields for securities lending activity are calculated net of corresponding liabilities and rebate expenses. Yields exclude investment income and assets related to commercial loans and trading account assets supporting insurance liabilities where the investment results generally accrue to contractholders and investment income on assets other than those included in invested assets of the Financial Services Businesses. (3) Classification for the earlier period presented has been conformed to the current presentation. Page 33
Slide 37: Prudential Financial, Inc. Quarterly Financial Supplement Fourth Quarter 2006 RECLASSIFIED COMBINED STATEMENTS OF OPERATIONS - FINANCIAL SERVICES BUSINESSES (in millions) Year ended December 31 2004 Revenues (1): 8,736 2,385 5,772 3,065 19,958 Premiums Policy charges and fee income Net investment income Asset management fees, commissions and other income Total revenues Benefits and Expenses (1): 8,897 2,220 334 (1,528) 766 6,753 17,442 2,516 62 (58) 4 (55) 1 (24) (72) (146) Insurance and annuity benefits Interest credited to policyholders' account balances Interest expense Deferral of acquisition costs Amortization of acquisition costs General and administrative expenses Total benefits and expenses Adjusted operating income before income taxes Realized investment gains (losses), net, and related adjustments Related charges Total realized investment gains (losses), net, and related charges and adjustments Investment gains (losses) on trading account assets supporting insurance liabilities, net Change in experience-rated contractholder liabilities due to asset value changes Divested businesses Equity in earnings of operating joint ventures Total pre-tax adjustments Income from continuing operations before income taxes and equity in earnings of 2,370 605 1,765 operating joint ventures Income tax expense (benefit) Income from continuing operations before equity in earnings of operating joint ventures 1,028 293 735 1,078 307 771 991 (303) 1,294 709 350 359 883 253 630 555 160 395 1,396 362 1,034 2,536 605 124 (422) 235 1,659 4,737 886 257 (21) 236 (132) 88 (5) (45) 142 2,519 626 145 (496) 232 1,863 4,889 821 321 (73) 248 190 (145) 1 (37) 257 2,496 653 154 (444) 271 1,785 4,915 1,031 89 (10) 79 (99) 47 (1) (66) (40) 2,439 632 192 (439) 172 2,039 5,035 814 2 (4) (2) 8 (34) (11) (66) (105) 50 (114) 66 13 (78) (63) 2,577 652 212 (501) 240 2,006 5,186 946 50 2,591 677 233 (495) 264 1,822 5,092 958 (334) 23 (311) (151) 130 (4) (67) (403) 2,650 716 249 (496) (73) 1,911 4,957 1,160 214 7 221 257 (168) 4 (78) 236 2,519 617 1,639 848 5,623 2,585 615 1,658 852 5,710 2,574 668 1,744 960 5,946 2,450 629 1,822 948 5,849 2,604 662 1,812 1,054 6,132 2,542 667 1,875 966 6,050 2,548 583 1,962 1,024 6,117 1Q 2Q 2005 3Q 4Q 1Q 2006 2Q 3Q (1) Revenues exclude realized investment gains, net of losses and related charges and adjustments; investment gains, net of losses, on trading account assets supporting insurance liabilities, and revenues of divested businesses, and include revenues representing equity in earnings of operating joint ventures. Benefits and expenses exclude charges related to realized investment gains, net of losses; change in experience-rated contractholder liabilities due to asset value changes and benefits and expenses of divested businesses. Page 34
Slide 38: Prudential Financial, Inc. Quarterly Financial Supplement Fourth Quarter 2006 RECLASSIFIED COMBINED STATEMENTS OF OPERATIONS - INSURANCE DIVISION (in millions) Year ended December 31 2004 Revenues (1): 3,347 2,005 1,565 626 7,543 Premiums Policy charges and fee income Net investment income Asset management fees, commissions and other income Total revenues Benefits and Expenses (1): 3,740 733 32 (691) 403 2,335 6,552 991 Insurance and annuity benefits Interest credited to policyholders' account balances Interest expense Deferral of acquisition costs Amortization of acquisition costs General and administrative expenses Total benefits and expenses Adjusted operating income before income taxes 1,052 177 25 (165) 127 537 1,753 255 1,029 183 25 (234) 126 633 1,762 266 938 180 31 (202) 180 613 1,740 341 994 175 30 (196) 112 582 1,697 365 1,070 180 30 (256) 131 668 1,823 298 1,144 181 28 (228) 142 657 1,924 247 1,225 196 37 (235) (191) 708 1,740 465 935 504 431 138 2,008 938 505 419 166 2,028 912 559 427 183 2,081 943 530 425 164 2,062 982 543 418 178 2,121 1,005 559 438 169 2,171 1,027 474 463 241 2,205 1Q 2Q 2005 3Q 4Q 1Q 2006 2Q 3Q (1) Revenues exclude realized investment gains, net of losses and related charges and adjustments. Benefits and expenses exclude charges related to realized investment gains, net of losses. Page 35
Slide 39: Prudential Financial, Inc. Quarterly Financial Supplement Fourth Quarter 2006 RECLASSIFIED COMBINED STATEMENTS OF OPERATIONS - INDIVIDUAL LIFE SEGMENT (in millions) Year ended December 31 2004 Revenues (1): 334 1,027 420 292 2,073 Premiums Policy charges and fee income Net investment income Asset management fees, commissions and other income Total revenues Benefits and Expenses (1): 609 165 15 (311) 274 931 1,683 390 Insurance and annuity benefits Interest credited to policyholders' account balances Interest expense Deferral of acquisition costs Amortization of acquisition costs General and administrative expenses Total benefits and expenses Adjusted operating income before income taxes 163 42 15 (74) 72 197 415 117 160 44 15 (79) 70 219 429 119 133 43 18 (79) 152 215 482 120 175 48 18 (82) 75 204 438 142 161 48 17 (80) 74 206 426 133 199 50 18 (83) 91 214 489 96 300 51 20 (91) (220) 224 284 183 92 261 124 55 532 93 259 118 78 548 97 298 126 81 602 109 277 128 66 580 100 266 126 67 559 103 270 136 76 585 109 117 137 104 467 1Q 2Q 2005 3Q 4Q 1Q 2006 2Q 3Q (1) Revenues exclude realized investment gains, net of losses and related charges and adjustments. Benefits and expenses exclude charges related to realized investment gains, net of losses. Page 36
Slide 40: Prudential Financial, Inc. Quarterly Financial Supplement Fourth Quarter 2006 RECLASSIFIED COMBINED STATEMENTS OF OPERATIONS - INDIVIDUAL ANNUITIES SEGMENT (in millions) Year ended December 31 2004 Revenues (1): 63 636 586 293 1,578 Premiums Policy charges and fee income Net investment income Asset management fees, commissions and other income Total revenues Benefits and Expenses (1): 201 358 9 (353) 125 811 1,151 427 Insurance and annuity benefits Interest credited to policyholders' account balances Interest expense Deferral of acquisition costs Amortization of acquisition costs General and administrative expenses Total benefits and expenses Adjusted operating income before income taxes 62 84 5 (83) 54 202 324 100 51 87 6 (117) 55 237 319 101 16 87 9 (108) 27 249 280 161 39 79 10 (113) 37 237 289 143 49 83 10 (119) 57 255 335 118 51 83 10 (133) 51 285 347 122 66 93 15 (131) 28 320 391 192 25 169 156 74 424 12 177 154 77 420 13 185 155 88 441 17 181 150 84 432 15 200 144 94 453 16 225 149 79 469 26 270 169 118 583 1Q 2Q 2005 3Q 4Q 1Q 2006 2Q 3Q (1) Revenues exclude realized investment gains, net of losses and related charges and adjustments. Benefits and expenses exclude charges related to realized investment gains, net of losses. Page 37
Slide 41: Prudential Financial, Inc. Quarterly Financial Supplement Fourth Quarter 2006 RECLASSIFIED COMBINED STATEMENTS OF OPERATIONS - GROUP INSURANCE SEGMENT (in millions) Year ended December 31 2004 Revenues (1): 2,950 342 559 41 3,892 Premiums Policy charges and fee income Net investment income Asset management fees, commissions and other income Total revenues Benefits and Expenses (1): 2,930 210 8 (27) 4 593 3,718 174 Insurance and annuity benefits Interest credited to policyholders' account balances Interest expense Deferral of acquisition costs Amortization of acquisition costs General and administrative expenses Total benefits and expenses Adjusted operating income before income taxes 827 51 5 (8) 1 138 1,014 38 818 52 4 (38) 1 177 1,014 46 789 50 4 (15) 1 149 978 60 141 970 80 780 48 2 (1) 207 1,062 47 860 49 3 (57) (12) 158 1,088 29 894 48 859 52 2 (13) 1 164 1,065 90 818 74 151 9 1,052 833 69 147 11 1,060 802 76 146 14 1,038 817 72 147 14 1,050 867 77 148 17 1,109 886 64 153 14 1,117 892 87 157 19 1,155 1Q 2Q 2005 3Q 4Q 1Q 2006 2Q 3Q (1) Revenues exclude realized investment gains, net of losses and related charges and adjustments. Benefits and expenses exclude charges related to realized investment gains, net of losses. Page 38
Slide 42: Prudential Financial, Inc. Quarterly Financial Supplement Fourth Quarter 2006 RECLASSIFIED COMBINED STATEMENTS OF OPERATIONS - INVESTMENT DIVISION (in millions) Year ended December 31 2004 Revenues (1): 93 155 2,689 2,070 5,007 Premiums Policy charges and fee income Net investment income Asset management fees, commissions and other income Total revenues Benefits and Expenses (1): 862 1,362 48 (51) 53 2,378 4,652 355 Insurance and annuity benefits Interest credited to policyholders' account balances Interest expense Deferral of acquisition costs Amortization of acquisition costs General and administrative expenses Total benefits and expenses Adjusted operating income (loss) before income taxes 215 384 22 (17) 14 551 1,169 304 272 397 25 (16) 14 666 1,358 150 296 431 23 (13) 13 603 1,353 257 266 421 45 (15) 13 857 1,587 (4) 269 429 46 (22) 13 759 1,494 240 235 452 62 (22) 17 586 1,330 316 297 475 63 (25) 12 607 1,429 252 41 46 768 618 1,473 103 48 762 595 1,508 106 46 808 650 1,610 70 48 817 648 1,583 92 48 849 745 1,734 30 43 917 656 1,646 84 45 927 625 1,681 1Q 2Q 2005 3Q 4Q 1Q 2006 2Q 3Q (1) Revenues exclude realized investment gains, net of losses and related charges and adjustments, investment gains, net of losses, on trading account assets supporting insurance liabilities and include revenues representing equity in earnings of operating joint ventures. Benefits and expenses exclude charges related to realized investment gains, net of losses and change in experience-rated contractholder liabilities due to asset value changes. Page 39
Slide 43: Prudential Financial, Inc. Quarterly Financial Supplement Fourth Quarter 2006 RECLASSIFIED COMBINED STATEMENTS OF OPERATIONS - RETIREMENT SEGMENT (in millions) Year ended December 31 2004 Revenues (1): 93 155 2,600 377 3,225 Premiums Policy charges and fee income Net investment income Asset management fees, commissions and other income Total revenues Benefits and Expenses (1): 862 1,362 37 (32) 10 652 2,891 334 Insurance and annuity benefits Interest credited to policyholders' account balances Interest expense Deferral of acquisition costs Amortization of acquisition costs General and administrative expenses Total benefits and expenses Adjusted operating income before income taxes 215 384 19 (13) 5 178 788 155 272 397 21 (11) 5 186 870 142 296 431 20 (8) 5 193 937 110 266 421 39 (12) 6 212 932 91 269 429 40 (17) 6 190 917 137 235 452 53 (16) 9 174 907 142 297 475 53 (22) 6 194 1,003 109 41 46 740 116 943 103 48 744 117 1,012 106 46 772 123 1,047 70 48 784 121 1,023 92 48 798 116 1,054 30 43 857 119 1,049 84 45 866 117 1,112 1Q 2Q 2005 3Q 4Q 1Q 2006 2Q 3Q (1) Revenues exclude realized investment gains, net of losses and related charges and adjustments, investment gains, net of losses, on trading account assets supporting insurance liabilities and include revenues representing equity in earnings of operating joint ventures. Benefits and expenses exclude charges related to realized investment gains, net of losses and change in experience-rated contractholder liabilities due to asset value changes. Page 40
Slide 44: Prudential Financial, Inc. Quarterly Financial Supplement Fourth Quarter 2006 RECLASSIFIED COMBINED STATEMENTS OF OPERATIONS - CORPORATE AND OTHER OPERATIONS (in millions) Year ended December 31 2004 Revenues (1): (7) (15) 585 (9) 554 Premiums Policy charges and fee income Net investment income Asset management fees, commissions and other income Total revenues Benefits and Expenses (1): 85 (4) 247 63 (55) 42 378 176 Insurance and annuity benefits Interest credited to policyholders' account balances Interest expense Deferral of acquisition costs Amortization of acquisition costs General and administrative expenses Total benefits and expenses Adjusted operating income before income taxes 16 (4) 71 17 (13) (6) 81 17 18 (9) 89 15 (12) (4) 97 59 12 (12) 93 14 (12) 34 129 50 17 (14) 114 14 (42) 19 108 76 14 (14) 133 33 (20) 6 152 26 9 (17) 139 12 (10) (17) 116 37 16 (21) 146 6 (5) 18 160 15 (5) (4) 135 (28) 98 (6) (4) 162 4 156 (6) (4) 176 13 179 (1) (9) 209 (15) 184 (3) (5) 215 (29) 178 (10) (5) 177 (9) 153 (1) (6) 196 (14) 175 1Q 2Q 2005 3Q 4Q 1Q 2006 2Q 3Q (1) Revenues exclude realized investment gains, net of losses and related charges and adjustments; investment gains, net of losses, on trading account assets supporting insurance liabilities, and revenues of divested businesses. Benefits and expenses exclude charges related to realized investment gains, net of losses; change in experience-rated contractholder liabilities due to asset value changes and benefits and expenses of divested businesses. Page 41
Slide 45: Prudential Financial, Inc. Quarterly Financial Supplement Fourth Quarter 2006 RECLASSIFIED SUPPLEMENTAL INFORMATION - INTERNATIONAL INSURANCE SEGMENT (dollar amounts in millions, unless otherwise noted) Year ended December 31 2004 Constant exchange rate basis (1): Net premiums, policy charges and fee income: 2,301 2,584 1,042 5,927 Japan, excluding Gibraltar Life Gibraltar Life All other countries Total Annualized new business premiums: 470 295 239 1,004 Japan, excluding Gibraltar Life Gibraltar Life All other countries Total Annualized new business premiums by distribution channel: 709 295 1,004 Life Planners Gibraltar Life Advisors Banks (2) Total Face amount of individual policies in force at end of period (in billions) (3): Japan, excluding Gibraltar Life Gibraltar Life All other countries Total 212 205 82 499 217 202 83 502 220 201 84 505 222 199 87 508 226 198 90 514 229 197 91 517 232 197 92 521 314 241 73 350 251 99 273 186 87 283 202 81 308 228 80 192 102 19 313 182 78 20 280 174 73 67 314 182 99 69 350 124 87 62 273 119 81 83 283 153 80 75 308 123 121 69 313 125 98 57 280 762 613 275 1,650 706 687 284 1,677 716 738 293 1,747 722 631 308 1,661 839 649 304 1,792 777 626 317 1,720 779 554 316 1,649 1Q 2Q 2005 3Q 4Q 1Q 2006 2Q 3Q (1) Foreign currencies translated to U.S. dollars at uniform exchange rates for all periods presented, including Japanese yen, 102 per U.S. dollar; Korean won 1030 per U.S. dollar. (2) Substantially all bank channel distribution represents U.S. dollar denominated Gibraltar Life fixed annuities. (3) Direct business only; policy count includes annuities. Page 42
Slide 46: Prudential Financial, Inc. Quarterly Financial Supplement Fourth Quarter 2006 KEY DEFINITIONS AND FORMULAS 1. Adjusted operating income before income taxes: Adjusted operating income is a non-GAAP measure of performance of our Financial Services Businesses that excludes "Realized investment gains (losses), net", as adjusted, and related charges and adjustments; net investment gains and losses on trading account assets supporting insurance liabilities; change in experience-rated contractholder liabilities due to asset value changes; results of divested businesses and discontinued operations; and the related tax effects thereof. Adjusted operating income includes equity in earnings of operating joint ventures and the related tax effects thereof. Realized investment gains (losses) representing profit or loss of certain of our businesses which primarily originate investments for sale or syndication to unrelated investors, and those associated with terminating hedges of foreign currency earnings and current period yield adjustments are included in adjusted operating income. Realized investment gains and losses from products that are free standing derivatives or contain embedded derivatives, and from associated derivative portfolios that are part of an economic hedging program related to the risk of those products, are included in adjusted operating income. Revenues and benefits and expenses shown as components of adjusted operating income, are presented on the same basis as pre-tax adjusted operating income and are adjusted for the items above as well. Adjusted operating income does not equate to "Income from continuing operations" as determined in accordance with GAAP but is the measure of profit or loss we use to evaluate segment performance. Adjusted operating income is not a substitute for income determined in accordance with GAAP, and our definition of adjusted operating income may differ from that used by other companies. The items above are important to an understanding of our overall results of operations. However, we believe that the presentation of adjusted operating income as we measure it for management purposes enhances the understanding of our results of operations by highlighting the results from ongoing operations and the underlying profitability factors of our businesses. 2. After-tax adjusted operating income: Adjusted operating income before taxes, as defined above, less the income tax effect applicable to adjusted operating income before taxes. 3. Assets Under Management: Fair market value or account value of assets which Prudential manages directly in proprietary products, such as mutual funds and variable annuities, in separate accounts, wrap-fee products and the general account, and assets invested in investment options included in the Company's products that are managed by third party sub-managers (i.e., the non-proprietary investment options in the Company's products). 4. Attributed Equity: Amount of capital assigned to each of the Company's segments for purposes of measuring segment adjusted operating income before income taxes, established at a level which management considers necessary to support the segment's risks. Attributed equity for the Financial Services Businesses represents all of the Company's equity that is not included in the Closed Block Business. 5. Book value per share of Common Stock: Equity attributed to Financial Services Businesses divided by the number of Common shares outstanding at end of period, on a diluted basis. 6. Borrowings - Capital Debt: Borrowings that are or will be used for capital requirements at Prudential Financial, Inc as well as borrowings invested in equity or debt securities of direct or indirect subsidiaries of Prudential Financial, Inc., and subsidiary borrowings, utilized for capital requirements. 7. Borrowings - Investment Related: Debt issued to finance specific investment assets or portfolios of investment assets, including institutional spread lending investment portfolios, real estate, and real estate related investments held in consolidated joint ventures, as well as institutional and insurance company portfolio cash flow timing differences. 8. Borrowings - Securities Business Related: Debt issued to finance primarily the liquidity of our broker-dealers, and our capital markets and other securities business related operations. 9. Borrowings - Specified Other Businesses: Borrowings associated with consumer banking activities, the individual annuity business, real estate franchises, and relocation services. 10. Client Assets: Fair market value of assets in client accounts of International brokerage operations, Prudential Bank and mortgage loan servicing business, that are not included in Assets Under Management. Prudential does not receive a management or administrative fee on these assets, but may receive a fee for executing trades, custody or recordkeeping services. Page 43
Slide 47: Prudential Financial, Inc. Quarterly Financial Supplement Fourth Quarter 2006 KEY DEFINITIONS AND FORMULAS 11. Earned Premiums: The portion of a premium, net of any amount ceded, that represents coverage already provided or that belongs to the insurer based on the part of the policy period that has passed. 12. Earnings Per Share of Common Stock: Net income for the Financial Services Businesses and the Closed Block Business is determined in accordance with GAAP and includes general and administrative expenses charged to each of the businesses based on the Company's 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 each business. The direct equity adjustments modify earnings available to holders of Common Stock and Class B Stock for earnings per share purposes. Earnings per share of Common Stock based on adjusted operating income of the Financial Services Businesses reflects these adjustments as well. 13. Full Service: The Full Service line of business provides retirement plan products and services to public, private and not-for-profit organizations. This business provides recordkeeping, plan administration, actuarial advisory services, participant education and communication services, trustee services and institutional and retail investment funds. This business mainly services defined contribution and defined benefit plans; non-qualified plans are also serviced. For clients with both defined contribution and defined benefit plans, integrated recordkeeping services are available. For participants leaving these plans, a range of rollover products are provided through a broker-dealer bank. 14. Full Service Stable Value: Our Full Service Stable Value products represent fixed rate options on investment funds offered to customers. These products contain an obligation to pay interest at a specified rate for a specific period of time. Upon termination these products repay account balances at market value immediately or may be liquidated at book value over time. Substantially all of these products are either fully or partially participating, with annual or semi-annual resets giving effect to previous investment experience. These products are issued through the general account, separate accounts or client-owned trusts. Profits from partially participating general account products result from the spread between the rate of return on investment assets and the interest rates credited to the customer, less expenses. For fully participating products, generally subject to a minimum interest rate guarantee, we earn fee income. 15. General Account: Invested assets and policyholder liabilities and reserves for which the Company bears the investment risk. Excludes assets recognized for statutory purposes that are specifically allocated to a separate account. General account assets also include assets of the parent company, Prudential Financial, Inc. 16. Gibraltar Life Advisors: Insurance representatives for Gibraltar Life. 17. Group Life Insurance and Group Disability Insurance Administrative Operating Expense Ratios: Ratio of administrative operating expenses (excluding commissions) to gross premiums, policy charges and fee income. 18. Group Life Insurance and Group Disability Insurance Benefits Ratios: Ratio of policyholder benefits to earned premiums, policy charges and fee income. 19. Individual Annuity Account Values in General Account and Separate Account: Amounts represent the breakdown of invested customer funds in annuities either written or reinsured by the Company. 20. Individual Life Insurance Sales: Scheduled premiums from new sales on an annualized basis and first year excess premiums and deposits on a cash-received basis. 21. Insurance and Annuity Benefits: Total death benefits, annuity benefits, disability benefits, other policy benefits, and losses paid or incurred, under insurance and annuity contracts, plus the change in reserves for future policy benefits, losses and loss adjustment expenses. Page 44
Slide 48: Prudential Financial, Inc. Quarterly Financial Supplement Fourth Quarter 2006 KEY DEFINITIONS AND FORMULAS 22. International Life Planners: Insurance agents in our insurance operations outside the United States, excluding Gibraltar Life Advisors. Excludes Life Planners associated with discontinued Philippine operations. 23. New annualized premiums: Premiums from new sales that are expected to be collected over a one year period. Group insurance new annualized premiums exclude new premiums resulting from rate changes on existing policies, from additional coverage issued under our Servicemembers' Group Life Insurance contract, and from excess premiums on group universal life insurance that build cash value but do not purchase face amounts. Group insurance new annualized premiums include premiums from the takeover of claim liabilities. Group disability amounts include long-term care products. Single premium business for the Company's international insurance operations is included in annualized new business premiums based on 10% credit. 24. Non-recourse and Limited-recourse Debt: Limited and non-recourse borrowing is where the holder is entitled to collect only against the assets pledged to the debt as collateral or has only very limited rights to collect against other assets. 25. Operating return on average equity (based on adjusted operating income): Adjusted operating income after-tax (giving effect to the direct equity adjustment for earnings per share calculation), annualized for interim periods, divided by average attributed equity for the Financial Services Businesses excluding unrealized gains and losses on investments and accumulated other comprehensive income related to pension and postretirement benefits. An alternative measure to operating return on average equity (based on adjusted operating income) is return on average equity (based on income from continuing operations). Return on average equity (based on income from continuing operations) represents income from continuing operations after-tax as determined in accordance with GAAP (giving effect to the direct equity adjustment for earnings per share calculation), annualized for interim periods, divided by average total attributed equity for the Financial Services Businesses. Return on average equity (based on income from continuing operations) is 14.70% for the twelve months ended December 31, 2006, 15.52% for the twelve months ended December 31, 2005, 16.29% for the three months ended December 31, 2006, 7.70% for the three months ended December 31, 2005, 20.72% for the three months ended September 30, 2006, 8.76% for the three months ended June 30, 2006 and 13.06% for the three months ended March 31, 2006. 26. Policy Persistency - Group Insurance: Percentage of the premiums in force at the end of the prior year that are still in force at the end of the period (excluding Servicemembers' Group Life Insurance and Prudential Employee Benefit Plan). 27. Policy Persistency - International Insurance: 13 month persistency represents the percentage of policies issued that are still in force at the beginning of their second policy year. 25 month persistency represents the percentage of policies issued that are still in force at the beginning of their third policy year. 28. Prudential Agents: Insurance agents in our insurance operations in the United States. 29. Prudential Agent productivity: Commissions on new sales of all products by Prudential Agents under contract for the entire period, divided by the number of those Prudential Agents. Excludes commissions on new sales by Prudential Agents hired or departed during the period. For interim reporting periods, the productivity measures are annualized. 30. Ratio of capital debt to total capitalization: For purposes of this ratio, we measure "debt" as borrowings for capital debt, and we measure "total capitalization" as the sum of equity, excluding unrealized gains and losses on investments and accumulated other comprehensive income related to pension and postretirement benefits, and capital debt. 31. Separate Accounts: Assets of our insurance companies allocated under certain policies and contracts that are segregated from the general account and other separate accounts. The policyholder or contractholder predominantly bears the risk of investments held in a separate account. 32. Wrap-Fee Products: Investment products generating asset-based fees in which the funds of the customer are generally invested in other investment products such as mutual funds. Page 45
Slide 49: Prudential Financial, Inc. Quarterly Financial Supplement Fourth Quarter 2006 RATINGS AND INVESTOR INFORMATION INSURANCE CLAIMS PAYING RATINGS as of February 7, 2007 Standard & A.M. Best The Prudential Insurance Company of America PRUCO Life Insurance Company PRUCO Life Insurance Company of New Jersey American Skandia Life Assurance Corporation Prudential Retirement Insurance and Annuity Company The Prudential Life Insurance Co., Ltd. (Prudential of Japan) Gibraltar Life Insurance Company, Ltd. CREDIT RATINGS: as of February 7, 2007 Prudential Financial, Inc.: Short-Term Borrowings Long-Term Senior Debt (2) The Prudential Insurance Company of America : Capital and surplus notes Prudential Funding, LLC: Short-Term Debt Long-Term Senior Debt PRICOA Global Funding I Long-Term Senior Debt * NR indicates not rated. (1) Company participation in interactive rating program was discontinued in January 2007. (2) Includes the retail medium-term notes program. aaAAAa3 AA AMB-1 a+ A-1+ AAP-1 A1 F1+ AAa A A2 A+ AMB-1 aA-1 A P-2 A3 F1 A A+ A+ A+ A+ A+ NR NR (1) Poor's AAAAAAAAAAAAAAMoody's Aa3 Aa3 NR NR Aa3 NR Aa3 * Fitch Ratings AA AA AA AA AA NR NR INVESTOR INFORMATION: Corporate Offices: Prudential Financial, Inc. 751 Broad Street Newark, New Jersey 07102 Common Stock: Common Stock of Prudential Financial, Inc. is traded on the New York Stock Exchange under the symbol PRU. Web Site: www.prudential.com Investor Information Hotline: Dial 877-998-ROCK for additional printed information or inquiries. Page 46