Equity

6 Months Ended

Jun. 30, 2014

Equity

Equity

7.   EQUITY
The Company has outstanding two classes of common stock: the Common Stock and the Class B Stock. The changes in the
number of shares issued, held in treasury and outstanding are as follows for the periods indicated:
	Common Stock			Class B Stock
		Held In		Issued and
	Issued	Treasury	Outstanding	Outstanding
	(in millions)
Balance, December 31, 2013	660.1	199.0	461.1		2.0
Common Stock issued	0.0	0.0	0.0		0.0
Common Stock acquired	0.0	5.9	(5.9)		0.0
Stock-based compensation programs(1)	0.0	(3.2)	3.2		0.0
Balance, June 30, 2014	660.1	201.7	458.4		2.0

• Represents net shares issued from treasury pursuant to the Company's stock-based compensation program.

In June 2013, Prudential Financial's Board of Directors authorized the Company to repurchase at management's discretion up to $1.0 billion of its outstanding Common Stock from July 1, 2013 through June 30 2014. As of June 30, 2014, 12.0 million shares of the Company's common stock were repurchased under this authorization at a total cost of $1.0 billion, of which 5.9 million shares were repurchased in the first six months of 2014 at a total cost of $500 million.

In June 2014, Prudential Financial's Board of Directors authorized the Company to repurchase at management's discretion up to $1.0 billion of its outstanding Common Stock from July 1, 2014through June 30, 2015. The timing and amount of share repurchases are determined by management based upon market conditions and other considerations, and repurchases may be effected in the open market, through derivative, accelerated repurchase and other negotiated transactions and through prearranged trading plans complying with Rule 10b5-1(c) under the Securities Exchange Act of 1934 (the “Exchange Act”). Numerous factors could affect the timing and amount of any future repurchases under the share repurchase authorization, including increased capital needs of the Company due to changes in regulatory capital requirements, opportunities for growth and acquisitions, and the effect of adverse market conditions on the segments.

Accumulated Other Comprehensive Income (Loss)

The balance of and changes in each component of “Accumulated other comprehensive income (loss) attributable to Prudential Financial, Inc.” for the six months ended June 30, 2014and 2013 are as follows:

		Accumulated Other Comprehensive Income (Loss) Attributable to Prudential Financial, Inc.
		Foreign Currency Translation Adjustment		Net Unrealized Investment Gains (Losses) (1)		Pension and Postretirement Unrecognized Net Periodic Benefit (Cost)		Total Accumulated Other Comprehensive Income (Loss)
		(in millions)
Balance, December 31, 2013		$	(113)	$	10,344	$	(1,550)	$	8,681
Change in other comprehensive income
	before reclassifications		241		7,175		(3)		7,413
Amounts reclassified from AOCI			(2)		(856)		46		(812)
Income tax benefit (expense)			(47)		(2,142)		(16)		(2,205)
Balance, June 30, 2014		$	79	$	14,521	$	(1,523)	$	13,077
		Accumulated Other Comprehensive Income (Loss) Attributable to Prudential Financial, Inc.
		Foreign Currency Translation Adjustment		Net Unrealized Investment Gains (Losses) (1)		Pension and Postretirement Unrecognized Net Periodic Benefit (Cost)		Total Accumulated Other Comprehensive Income (Loss)
		(in millions)
Balance, December 31, 2012		$	928	$	11,402	$	(2,116)	$	10,214
Change in other comprehensive income
	before reclassifications		(1,416)		(628)		30		(2,014)
Amounts reclassified from AOCI			0		(524)		63		(461)
Income tax benefit (expense)			401		342		(33)		710
Balance, June 30, 2013		$	(87)	$	10,592	$	(2,056)	$	8,449

• Includes cash flow hedges of $(533) million and $(446) million as of June 30, 2014 and December 31, 2013, respectively, and $(98) million and $(257) million as of June 30, 2013 and December 31, 2012, respectively.

Reclassifications out of Accumulated Other Comprehensive Income (Loss)

					Three Months Ended				Six Months Ended				Affected line item in
					June 30,				June 30,				Consolidated Statement
						2014		2013		2014		2013	of Operations
					(in millions)
Amounts reclassified from AOCI (1)(2):
Foreign currency translation adjustment:
	Foreign currency translation												Realized investment
		adjustments			$	1	$	1	$	2	$	0	gains (losses), net
		Total foreign currency translation adjustment				1		1		2		0
Net unrealized investment gains (losses):
	Cash flow hedges - Interest Rate					(6)		(8)		(12)		(12)	(3)
	Cash flow hedges - Currency/Interest rate					(6)		(26)		(10)		(44)	(3)
	Net unrealized investment gains (losses)
	on available-for-sale securities					536		384		878		514
	Net unrealized investment gains (losses) - all other					0		0		0		66
		Total net unrealized investment gains (losses)				524		350		856		524	(4)
Amortization of defined benefit pension items:
	Prior service cost					5		5		11		11	(5)
	Actuarial gain (loss)					(29)		(37)		(57)		(74)	(5)
		Total amortization of defined benefit
			pension items			(24)		(32)		(46)		(63)
				Total reclassifications for the period	$	501	$	319	$	812	$	461

• All amounts are shown before tax.
• Positive amounts indicate gains/benefits reclassified out of AOCI. Negative amounts indicate losses/costs reclassified out of AOCI.
• See Note 14 for additional information on cash flow hedges.
• See table below for additional information on unrealized investment gains (losses), including the impact on deferred policy acquisition and other costs, future policy benefits and policyholders' dividends.
• See Note 10 for information on employee benefit plans.

Net Unrealized Investment Gains (Losses)

Net unrealized investment gains and losses on securities classified as available-for-sale and certain other long-term investments and other assets are included in the Company's Unaudited Interim Consolidated Statements of Financial Position as a component of AOCI. Changes in these amounts include reclassification adjustments to exclude from “Other comprehensive income (loss)” those items that are included as part of “Net income” for a period that had been part of “Other comprehensive income (loss)” in earlier periods. The amounts for the periods indicated below, split between amounts related to fixed maturity securities on which an OTTI loss has been recognized, and all other net unrealized investment gains and losses, are as follows:

Net Unrealized Investment Gains and Losses on Fixed Maturity Securities on which an OTTI loss has been recognized

				Deferred Policy								Accumulated
				Acquisition								Other
				Costs, Deferred								Comprehensive
				Sales		Future Policy						Income (Loss)
				Inducements,		Benefits and				Deferred		Related To Net
		Net Unrealized		and Value of		Policyholders'				Income Tax		Unrealized
		Gains (Losses) On		Business		Account		Policyholders'		(Liability)		Investment
		Investments		Acquired		Balances		Dividends		Benefit		Gains (Losses)
		(in millions)
Balance, December 31, 2013		$	110	$	(5)	$	4	$	64	$	(60)	$	113
Net investment gains (losses) on
	investments arising during the period		134								(47)		87
Reclassification adjustment for (gains)
	losses included in net income		41								(14)		27
Reclassification adjustment for OTTI
	losses excluded from net income(1)		(1)								0		(1)
Impact of net unrealized investment (gains)
	losses on deferred policy acquisition
	costs, deferred sales inducements and
	value of business acquired				(1)						0		(1)
Impact of net unrealized investment (gains)
	losses on future policy benefits and
	policyholders' account balances						(3)				1		(2)
Impact of net unrealized investment (gains)
	losses on policyholders' dividends								(97)		34		(63)
Balance, June 30, 2014		$	284	$	(6)	$	1	$	(33)	$	(86)	$	160

• Represents “transfers in” related to the portion of OTTI losses recognized during the period that were not recognized in earnings for securities with no prior OTTI loss.

All Other Net Unrealized Investment Gains and Losses in AOCI

				Deferred Policy								Accumulated
				Acquisition								Other
				Cost, Deferred								Comprehensive
				Sales		Future Policy						Income (Loss)
				Inducements,		Benefits and				Deferred		Related To Net
		Net Unrealized		and Value of		Policyholders'				Income Tax		Unrealized
		Gains (Losses) on		Business		Account		Policyholders'		(Liability)		Investment
		Investments(1)		Acquired		Balances		Dividends		Benefit		Gains (Losses)
		(in millions)
Balance, December 31, 2013		$	20,494	$	(719)	$	(679)	$	(3,694)	$	(5,171)	$	10,231
Net investment gains (losses) on
	investments arising during the period		9,320								(3,194)		6,126
Reclassification adjustment for (gains)
	losses included in net income		(897)								314		(583)
Reclassification adjustment for OTTI
	losses excluded from net income(2)		1								0		1
Impact of net unrealized investment (gains)
	losses on deferred policy acquisition
	costs, deferred sales inducements and
	value of business acquired				(398)						139		(259)
Impact of net unrealized investment (gains)
	losses on future policy benefits and
	policyholders' account balances						(554)				195		(359)
Impact of net unrealized investment (gains)
	losses on policyholders' dividends								(1,222)		426		(796)
Balance, June 30, 2014		$	28,918	$	(1,117)	$	(1,233)	$	(4,916)	$	(7,291)	$	14,361

• Includes cash flow hedges. See Note 14 for information on cash flow hedges.
• Represents “transfers out” related to the portion of OTTI losses recognized during the period that were not recognized in earnings for securities with no prior OTTI loss.