SEC Comment Letter for PRUDENTIAL FINANCIAL INC (PFH, PRH, PRS, PRU) (CIK 0001137774) (PFH) — Oct 5, 2012
PRUDENTIAL FINANCIAL INC (PFH, PRH, PRS, PRU) (CIK 0001137774)
Date: Oct. 5, 2012 · CIK: 0001137774 · Accession: 0000000000-12-055284
AI Filing Summary & Sentiment
Reasoning
File numbers found in text: 001-16707
Letter
October 5, 2012 Via E-mail Mr. Richard J. Carbone Executive Vice President and Chief Financial Officer Prudential Financial , Inc. 751 Broad Street Newark, New Jersey 07102
Re: Prudential Financial, Inc. Form 10-K for Fiscal Year Ended December 31, 201 1 Filed February 24, 2012 Form 10 -Q for the Quarterly Period Ended March 31, 2012 Filed May 4, 2012 File No. 001-16707
Dear Mr. Carbone :
We have reviewed your September 7 , 201 2 response to our August 2, 2012 comment letter and have the following comments .
Please respond to this letter within 10 business days by providing the requested information or by advising us when you will provide the requested response. If you do not believe a comment applies to your facts and circumstances, please tell us why in your response. Please furnish us a letter on EDGAR under the form type label CORRESP that keys your responses to our comments.
After reviewing the information provided, we may raise additional comments and/or request that you amend your filing.
Form 10 -K for Fiscal Year Ended December 31, 2011
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operatio ns
Executive Summary Industry Trends, page 83
1. Please refer to prior comment one. We acknowledge your proposed new disclosure. Please provide us proposed disclosure to be included in future periodic reports that provides the impact on your operating results of reinvesting future cash flows at rates lower than those guaranteed under your insurance contracts. In addition, include in
Mr. Richard J. Carbone Prudential Financial, Inc. October 5, 2012 Page 2
your proposed disclosure the impact that your asset -liability management process, including related hedging activities, is expected to mitigate this risk.
Results of Operations for Financial Services Businesses by Segment Individual Annuities, page 107
2. Please refer to prior comment two. You state that the valuation of the embedded derivative liability utilized an additional NPR credit spread of 2.58%. Yet the disclosure you re ference on page 381 states that the additional credit spread over libor generally range from 150 to 250 basis points. Please provide us proposed disclosure to be included in future periodic filings that states the actual NPR credit spread used or provide a more precise weighted average range.
Form 10 -Q for the Period Ended March 31, 2012
Item 2 . Management’s Discussion and Analysis of Financial Condition and Results of Operations Application of Critical Accounting Estimates, page 124
3. Please refer to prior comment seven. Your response appears to address the impact on your operating results, resulting from your normal re -estimate of total gross profits and determination of amortization rates, and not the impact of your new method, which includes all of the results for your living benefits hedging program without regard to permanence, as compared to your prior method, which included only those results deemed to be permanent. Please provide us revised disclosure to be included in future periodic reports of the impact of this new method . Also, tell us the reason for the change to the new method, the factors that you considered in concluding that this change was preferable and why you did not report it as a change in accounting principle in your financial statements pursuant to ASC 25 0-10-50.
Please contact Frank Wyman, Staff Accountant, at (202) 551 -3660 or Joel Parker, Accounting Branch Chief , at (202) 551 -3651, if you have an y questions regarding th ese comments. In this regard, do not hesitate to contact me at (202) 551 -3679.
Sincerely,
/s/ Jim B. Rosenberg
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October 5, 2012 Via E-mail Mr. Richard J. Carbone Executive Vice President and Chief Financial Officer Prudential Financial , Inc. 751 Broad Street Newark, New Jersey 07102 Re: Prudential Financial, Inc. Form 10-K for Fiscal Year Ended December 31, 201 1 Filed February 24, 2012 Form 10 -Q for the Quarterly Period Ended March 31, 2012 Filed May 4, 2012 File No. 001-16707 Dear Mr. Carbone : We have reviewed your September 7 , 201 2 response to our August 2, 2012 comment letter and have the following comments . Please respond to this letter within 10 business days by providing the requested information or by advising us when you will provide the requested response. If you do not believe a comment applies to your facts and circumstances, please tell us why in your response. Please furnish us a letter on EDGAR under the form type label CORRESP that keys your responses to our comments. After reviewing the information provided, we may raise additional comments and/or request that you amend your filing. Form 10 -K for Fiscal Year Ended December 31, 2011 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operatio ns Executive Summary Industry Trends, page 83 1. Please refer to prior comment one. We acknowledge your proposed new disclosure. Please provide us proposed disclosure to be included in future periodic reports that provides the impact on your operating results of reinvesting future cash flows at rates lower than those guaranteed under your insurance contracts. In addition, include in Mr. Richard J. Carbone Prudential Financial, Inc. October 5, 2012 Page 2 your proposed disclosure the impact that your asset -liability management process, including related hedging activities, is expected to mitigate this risk. Results of Operations for Financial Services Businesses by Segment Individual Annuities, page 107 2. Please refer to prior comment two. You state that the valuation of the embedded derivative liability utilized an additional NPR credit spread of 2.58%. Yet the disclosure you re ference on page 381 states that the additional credit spread over libor generally range from 150 to 250 basis points. Please provide us proposed disclosure to be included in future periodic filings that states the actual NPR credit spread used or provide a more precise weighted average range. Form 10 -Q for the Period Ended March 31, 2012 Item 2 . Management’s Discussion and Analysis of Financial Condition and Results of Operations Application of Critical Accounting Estimates, page 124 3. Please refer to prior comment seven. Your response appears to address the impact on your operating results, resulting from your normal re -estimate of total gross profits and determination of amortization rates, and not the impact of your new method, which includes all of the results for your living benefits hedging program without regard to permanence, as compared to your prior method, which included only those results deemed to be permanent. Please provide us revised disclosure to be included in future periodic reports of the impact of this new method . Also, tell us the reason for the change to the new method, the factors that you considered in concluding that this change was preferable and why you did not report it as a change in accounting principle in your financial statements pursuant to ASC 25 0-10-50. Please contact Frank Wyman, Staff Accountant, at (202) 551 -3660 or Joel Parker, Accounting Branch Chief , at (202) 551 -3651, if you have an y questions regarding th ese comments. In this regard, do not hesitate to contact me at (202) 551 -3679. Sincerely, /s/ Jim B. Rosenberg Jim B. Rosenberg Senior Assistant Chief Accountant