24. QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)
The unaudited quarterly results of operations for the years ended December 31, 2013 and 2012 are summarized in the table below:
| Three Months Ended | ||||||||||||||
| March 31 | June 30 | September 30 | December 31 | |||||||||||
| (in millions, except per share amounts) | ||||||||||||||
| 2013 | ||||||||||||||
| Total revenues | $ | 10,171 | $ | 10,041 | $ | 11,310 | $ | 9,939 | ||||||
| Total benefits and expenses | 11,730 | 10,810 | 9,784 | 10,821 | ||||||||||
| Income (loss) from continuing operations | (686) | (489) | 1,032 | (424) | ||||||||||
| Income (loss) from discontinued operations | 1 | 2 | 8 | (4) | ||||||||||
| Net income (loss) | (685) | (487) | 1,040 | (428) | ||||||||||
| Less: Income attributable to noncontrolling interests | 35 | 27 | 13 | 32 | ||||||||||
| Net income (loss) attributable to Prudential Financial, Inc. | (720) | (514) | 1,027 | (460) | ||||||||||
| Basic earnings per share - Common Stock(1): | ||||||||||||||
| Income (loss) from continuing operations attributable to Prudential Financial, Inc. | $ | (1.58) | $ | (1.12) | $ | 2.06 | $ | (0.93) | ||||||
| Income (loss) from discontinued operations, net of taxes | 0.00 | 0.00 | 0.01 | (0.01) | ||||||||||
| Net income (loss) attributable to Prudential Financial, Inc. | $ | (1.58) | $ | (1.12) | $ | 2.07 | $ | (0.94) | ||||||
| Diluted earnings per share - Common Stock(1): | ||||||||||||||
| Income (loss) from continuing operations attributable to Prudential Financial, Inc. | $ | (1.58) | $ | (1.12) | $ | 2.02 | $ | (0.93) | ||||||
| Income (loss) from discontinued operations, net of taxes | 0.00 | 0.00 | 0.02 | (0.01) | ||||||||||
| Net income (loss) attributable to Prudential Financial, Inc. | $ | (1.58) | $ | (1.12) | $ | 2.04 | $ | (0.94) | ||||||
| Basic and diluted earnings per share - Class B Stock(1): | ||||||||||||||
| Income (loss) from continuing operations attributable to Prudential Financial, Inc. | $ | 5.50 | $ | 1.00 | $ | 29.50 | $ | (14.00) | ||||||
| Net income (loss) attributable to Prudential Financial, Inc. | $ | 5.50 | $ | 1.00 | $ | 29.50 | $ | (14.00) | ||||||
| 2012 | ||||||||||||||
| Total revenues | $ | 9,635 | $ | 16,140 | $ | 13,136 | $ | 45,936 | ||||||
| Total benefits and expenses | 10,386 | 13,167 | 14,074 | 46,512 | ||||||||||
| Income (loss) from continuing operations | (926) | 2,231 | (565) | (185) | ||||||||||
| Income (loss) from discontinued operations | 7 | 7 | (2) | 3 | ||||||||||
| Net income (loss) | (919) | 2,238 | (567) | (182) | ||||||||||
| Less: Income attributable to noncontrolling interests | 6 | 16 | 7 | 21 | ||||||||||
| Net income (loss) attributable to Prudential Financial, Inc. | (925) | 2,222 | (574) | (203) | ||||||||||
| Basic earnings per share - Common Stock(1): | ||||||||||||||
| Income (loss) from continuing operations attributable to Prudential Financial, Inc. | $ | (2.01) | $ | 4.73 | $ | (1.32) | $ | (0.42) | ||||||
| Income (loss) from discontinued operations, net of taxes | 0.01 | 0.02 | 0.00 | 0.00 | ||||||||||
| Net income (loss) attributable to Prudential Financial, Inc. | $ | (2.00) | $ | 4.75 | $ | (1.32) | $ | (0.42) | ||||||
| Diluted earnings per share - Common Stock(1): | ||||||||||||||
| Income (loss) from continuing operations attributable to Prudential Financial, Inc. | $ | (2.01) | $ | 4.67 | $ | (1.32) | $ | (0.42) | ||||||
| Income (loss) from discontinued operations, net of taxes | 0.01 | 0.02 | 0.00 | 0.00 | ||||||||||
| Net income (loss) attributable to Prudential Financial, Inc. | $ | (2.00) | $ | 4.69 | $ | (1.32) | $ | (0.42) | ||||||
| Basic and diluted earnings per share - Class B Stock(1): | ||||||||||||||
| Income (loss) from continuing operations attributable to Prudential Financial, Inc. | $ | 6.50 | $ | (6.00) | $ | 20.00 | $ | (9.00) | ||||||
| Income (loss) from discontinued operations, net of taxes | 0.00 | (0.50) | (0.50) | 0.00 | ||||||||||
| Net income (loss) attributable to Prudential Financial, Inc. | $ | 6.50 | $ | (6.50) | $ | 19.50 | $ | (9.00) | ||||||
The quarterly historical information presented in the table above has been revised to reflect the impact of a discretionary change in accounting principle for recognition of performance based incentive fee revenue. The Company adopted this revised accounting principle in the fourth quarter of 2013 with retrospective application for prior periods. For further information, see Note 2. See table below for impact to net income (loss) attributable to Prudential Financial, Inc. and diluted earnings per share of Common stock for previously reported periods.
| Three Months Ended | ||||||||||||||
| March 31 | June 30 | September 30 | December 31 | |||||||||||
| Impact of change in accounting for performance based incentive fees: | (in millions, except per share amounts) | |||||||||||||
| 2013 | ||||||||||||||
| INCOME (LOSS) FROM CONTINUING OPERATIONS | $ | (21) | $ | (1) | $ | (21) | n/a | |||||||
| Less: Income (loss) attributable to noncontrolling interests | (7) | (8) | (6) | n/a | ||||||||||
| NET INCOME (LOSS) ATTRIBUTABLE TO PRUDENTIAL FINANCIAL, INC. | $ | (14) | $ | 7 | $ | (15) | n/a | |||||||
| EARNINGS PER SHARE | ||||||||||||||
| Financial Services Businesses | ||||||||||||||
| Basic earnings per share - Common Stock: | ||||||||||||||
| Income (loss) from continuing operations attributable to Prudential Financial, Inc. | $ | (0.03) | $ | 0.02 | $ | (0.03) | n/a | |||||||
| Net income (loss) attributable to Prudential Financial, Inc. | (0.03) | 0.01 | (0.04) | n/a | ||||||||||
| Diluted earnings per share - Common Stock: | ||||||||||||||
| Income (loss) from continuing operations attributable to Prudential Financial, Inc. | $ | (0.03) | $ | 0.02 | $ | (0.04) | n/a | |||||||
| Net income (loss) attributable to Prudential Financial, Inc. | (0.03) | 0.01 | (0.03) | n/a | ||||||||||
| 2012 | ||||||||||||||
| INCOME (LOSS) FROM CONTINUING OPERATIONS | $ | 9 | $ | (1) | $ | (8) | $ | 23 | ||||||
| Less: Income (loss) attributable to noncontrolling interests | (5) | 1 | (18) | (6) | ||||||||||
| NET INCOME (LOSS) ATTRIBUTABLE TO PRUDENTIAL FINANCIAL, INC. | $ | 14 | $ | (2) | $ | 10 | $ | 29 | ||||||
| EARNINGS PER SHARE | ||||||||||||||
| Financial Services Businesses | ||||||||||||||
| Basic earnings per share - Common Stock: | ||||||||||||||
| Income (loss) from continuing operations attributable to Prudential Financial, Inc. | $ | 0.03 | $ | (0.01) | $ | 0.02 | $ | 0.06 | ||||||
| Net income (loss) attributable to Prudential Financial, Inc. | 0.03 | 0.00 | 0.02 | 0.06 | ||||||||||
| Diluted earnings per share - Common Stock: | ||||||||||||||
| Income (loss) from continuing operations attributable to Prudential Financial, Inc. | $ | 0.03 | $ | 0.00 | $ | 0.02 | $ | 0.06 | ||||||
| Net income (loss) attributable to Prudential Financial, Inc. | 0.03 | 0.00 | 0.02 | 0.06 | ||||||||||
Results for the fourth quarter of 2013 include a pre-tax benefit of $116 million related to an out of period adjustment recorded by the Company due to an overstatement of reserves in the third quarter of 2013. The overstatement resulted from the use of incorrect data inputs to calculate the impact of the market's perception of our own non-performance risk on the reserves for certain annuities with guaranteed benefits. This item impacted only the third and fourth quarters of 2013 and had no impact to full year 2013 reported results.
Results for the second quarter of 2012 include a total pre-tax charge of $122 million related to two out of period adjustments recorded by the Company. The first adjustment related to a decline in the value of a real estate-related investment. Based on a review of the underlying collateral and a related guarantee, the Company determined that impairments of $75 million should have been recognized, $61 million of which related to prior periods. The second adjustment consisted of an increase of $61 million in reserves for estimated payments arising from use of new Social Security Master Death File matching criteria to identify deceased policy and contract holders. The initial calculation of the reserve excluded certain life policies in extended term status from the analysis used to identify potential claims.
Results for the fourth quarter of 2012 include a total pre-tax charge of $54 million related to an out of period adjustment recorded by the Company due to an understatement of recorded liabilities for certain employee benefits based on a review of the consistency of recognition of such liabilities.