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Prudential Financial, Inc.Prudential Financial, Inc.

Art RyanArt Ryan

Chairman and CEOChairman and CEO

Sanford C. Bernstein’s 22Sanford C. Bernstein’s 22ndnd Annual Strategic Decisions ConferenceAnnual Strategic Decisions Conference

May 2006 May 2006

Prudential Financial, Inc. May 2006 1

The presentations today may include some forward-looking statements. It is possible that actual results may differ materially from any expectations or predictions expressed in these presentations. Additional information regarding factors that could cause such a difference appears in the section titled “Forward-Looking Statements”of our Form 10-K and Form 10-Q SEC filings and in our earnings press releases, which can be found on our Web site at www.investor.prudential.com.

The presentations today include references to “adjusted operating income” and to earnings per share, or EPS, or return on equity, or ROE, which are determined based on “adjusted operating income”. Adjusted operating income is a financial measure we use in managing our businesses to measure the performance of our Financial Services Businesses. Adjusted operating income excludes net realized investment gains and losses (other than those 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) and related charges and adjustments, as well as results from divested businesses. Adjusted operating income also excludes recorded changes in asset values that will ultimately accrue to contract holders, and recorded changes in contract holder liabilities resulting from changes in related asset values. Adjusted operating income is not the same as income from continuing operations or net income determined in accordance with generally accepted accounting principles, or GAAP. The comparable GAAP presentation and the reconciliation between the two are set out in our Form 10-K and Form 10-Q SEC filings and in our earnings press releases and Quarterly Financial Supplements, which can be found on our Web site.

Prudential Financial, Inc. of the United States is not affiliated with Prudential PLC which is headquartered in the United Kingdom.

ForwardForward--Looking Statements and Looking Statements and NonNon--GAAP MeasureGAAP Measure


Demutualization through 2005Demutualization through 2005

Achieved significant expense reductionsAchieved significant expense reductions

Divested P&C business Divested P&C business

Acquired and integrated: American Skandia and CIGNA Acquired and integrated: American Skandia and CIGNA RetirementRetirement

Combined retail brokerage into WachoviaCombined retail brokerage into Wachovia

Repurchased $6 billion of Common Stock Repurchased $6 billion of Common Stock (1)(1)

Increased cash dividend 25% per year for ‘03, ‘04, and ‘05Increased cash dividend 25% per year for ‘03, ‘04, and ‘05

Achieved “AA” financial strength ratings from four agenciesAchieved “AA” financial strength ratings from four agencies

Surpassed ROE goal of 12%Surpassed ROE goal of 12%

(1) Through March 31, 2006


$2.06$2.53

$3.61

$4.83

2002 2003 2004 2005

Earnings per share growthEarnings per share growth (1)(1)

33% CAGR33% CAGR

(1) Based on after-tax adjusted operating income of the Financial Services Businesses (“FSB”)


ROE progressROE progress (1)(1)

(1) Based on after-tax adjusted operating income of the FSB; 1Q06 on annualized basis

6.3%7.5%

10.2%12.4%

13.6%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

2002 2003 2004 2005 1Q2006


Where we are todayWhere we are today

Balanced mix of businesses and risksBalanced mix of businesses and risks

Strong capital position and cash flow generationStrong capital position and cash flow generation

Leading position in domestic retirement and savings marketLeading position in domestic retirement and savings market

Sustained high returns and growth of international Sustained high returns and growth of international insurance businessinsurance business

Asset management skills complement product manufacturingAsset management skills complement product manufacturing

Complementary distribution channelsComplementary distribution channels

Acquisition and integration track recordAcquisition and integration track record


82% of equity is attributed to operating businesses82% of equity is attributed to operating businesses

Operating BusinessesOperating Businesses

Corporate & OtherCorporate & Other

(1) As of March 31, 2006 for the FSB; excludes unrealized gains and losses on investments.

Total attributed equity of $20.4 billionTotal attributed equity of $20.4 billion (1)

18%

82%


Attributed equity of operating businessesAttributed equity of operating businesses

INTERNATIONAL INSURANCEINTERNATIONAL INSURANCE

RETIREMENT & SAVINGSRETIREMENT & SAVINGS

DOMESTIC INSURANCEDOMESTIC INSURANCE

Attributed equity $16.8 billionAttributed equity $16.8 billion (1)

•• Life Planner model Life Planner model •• Gibraltar LifeGibraltar Life

•• RetirementRetirement•• Individual AnnuitiesIndividual Annuities

•• Individual LifeIndividual Life•• Group InsuranceGroup Insurance

(1) As of March 31, 2006 for the FSB operating businesses; excludes unrealized gains and losses on investments.

INVESTMENT BUSINESSESINVESTMENT BUSINESSES

•• Financial AdvisoryFinancial Advisory•• Asset ManagementAsset Management•• International InvestmentsInternational Investments

$3.7

$4.1$5.4

$3.6


Complementary and diversified businessesComplementary and diversified businesses

DOMESTIC INSURANCEDOMESTIC INSURANCE••Individual LifeIndividual Life••Group InsuranceGroup Insurance

INTERNATIONAL INSURANCEINTERNATIONAL INSURANCE••Life Planner model Life Planner model ••Gibraltar LifeGibraltar Life

Adjusted operating incomeAdjusted operating income (1) $ 946 million$ 946 million

(1) Before-tax; for the FSB; quarter ended March 31, 2006

RETIREMENT & SAVINGSRETIREMENT & SAVINGS••RetirementRetirement••Individual AnnuitiesIndividual Annuities

INVESTMENT BUSINESSES & CORPORATEINVESTMENT BUSINESSES & CORPORATE••Financial AdvisoryFinancial Advisory••Asset ManagementAsset Management••International InvestmentsInternational Investments••Corporate & OtherCorporate & Other

INTERNATIONAL INSURANCEINTERNATIONAL INSURANCE••Life Planner model Life Planner model ••Gibraltar LifeGibraltar Life

27%

19%18%

36%


International Insurance financial performanceInternational Insurance financial performance

(1) In millions(2) Average attributed equity for period; in billions(3) Based on after-tax adjusted operating income; 1Q05 and 1Q06 on annualized basis

3382851,310917110106502402Gibraltar Life

$ 228$ 179$ 808$ 515Life Planner model

25%

$3.9

1Q06

28%

$ 2.8

1Q0520052004

25%

$ 2.5

28%Return on Equity (3)

$ 3.2Equity (2)

Pre-tax adjusted operating income (1)


Life Planner model strategy and plansLife Planner model strategy and plans

Organic expansion in existing marketsOrganic expansion in existing markets

Maintenance of policy persistency levelsMaintenance of policy persistency levels

Very selective entry into new marketsVery selective entry into new markets

Disciplined implementationDisciplined implementation

Continued growth in Life PlannersContinued growth in Life Planners

Countries: Mainly Japan, Korea,Taiwan; total 8Countries: Mainly Japan, Korea,Taiwan; total 8

Maintenance of Life Planner productivityMaintenance of Life Planner productivity


Growth in the Life Planner businessGrowth in the Life Planner business

(1) Before-tax, GAAP exchange rate basis

Million $Units

0

1,000

2,000

3,000

4,000

5,000

6,000

1998 1999 2000 2001 2002 2003 2004 2005$-$100

$200$300$400

$500$600$700

$800$900

Life Planners Policies in force (000) Adjusted operating income (1)


Gibraltar LifeGibraltar Life

Acquired by Prudential Financial in 2001Acquired by Prudential Financial in 2001

Strong affinity group relationshipsStrong affinity group relationships

High return on equityHigh return on equity

Strong free cash flow and capital generationStrong free cash flow and capital generation

“Traditional model” Japanese life insurance company“Traditional model” Japanese life insurance company


Large retirement / savings marketLarge retirement / savings market

Personal SavingsPersonal Savings$7.0$7.0

IRAsIRAs$3.5$3.5

Defined ContributionDefined Contribution$2.7$2.7

Defined BenefitDefined Benefit$4.9$4.9

AnnuitiesAnnuities$1.7$1.7

$20 trillion market in 2004$20 trillion market in 2004

Sources: Federal Reserve Flow of Funds; LIMRA; company estimates


A Leading Retirement providerA Leading Retirement provider

Account ValuesAccount Values (1)

$ 139$ 139$ 132$ 132TotalTotal

$ 47$ 47$ 48$ 48InstitutionalInstitutionalInvestment ProductsInvestment Products

$ 92$ 92$ 84$ 84Full ServiceFull Service

1Q20061Q20061Q20051Q2005

(1) At end of period; in billions.


Prudential RetirementPrudential Retirement

Full service retirement: defined contribution; defined benefit; Full service retirement: defined contribution; defined benefit; nonnon--qualified plans; retail/rolloverqualified plans; retail/rollover

Stable value products offer attractive returns with limited riskStable value products offer attractive returns with limited risk

Complementary distribution channels address selected Complementary distribution channels address selected marketsmarkets

Institutional Investment products complement product lineupInstitutional Investment products complement product lineup

Business integration completed on schedule, 1Q06Business integration completed on schedule, 1Q06

Total retirement services capability provides market advantageTotal retirement services capability provides market advantage


AnnuitiesAnnuities

(1) As of March 31, 2006(2) Based on after-tax adjusted operating income for the year ended December 31, 2005

Leading Distributor of variable annuities through Leading Distributor of variable annuities through independent financial plannersindependent financial planners

Expanding distributionExpanding distribution

Account values exceed $57 billion Account values exceed $57 billion (1)(1)

Successful full suite of living benefitsSuccessful full suite of living benefits

Return on equity of 18% Return on equity of 18% (2)(2)

Acquisition of Allstate’s VA business expected 2Q06Acquisition of Allstate’s VA business expected 2Q06


Individual Life ROEIndividual Life ROE

(1) In millions(2) Average attributed equity for the period; in billions(3) Based on after-tax adjusted operating income giving effect to direct equity credit

16 %16 %Return on equityReturn on equity (3)(3)

$ 2.6$ 2.6EquityEquity (2) (2)

$$ 498498PrePre--tax adjusted operating incometax adjusted operating income (1)(1)

Year ended Year ended December 31, 2005December 31, 2005


Group InsuranceGroup Insurance

Controlled growth Controlled growth –– emphasis on marginsemphasis on margins

(1) Based on after-tax adjusted operating income for the year ended December 31, 2005

Return on equity of 16%Return on equity of 16%(1)(1)

Addressing disability claims resolutionsAddressing disability claims resolutions

High persistency of quality businessHigh persistency of quality business


Asset Management: significant scale and breadthAsset Management: significant scale and breadth

AUM by asset typeAUM by asset type AUM by client typeAUM by client type

Equity20%

Fixed Income

44%

Real Estate

4%

Non-proprietaryinsurance,

annuity & other18%

International14%

Institutionalcustomers25%

General account

29%Retailcustomers14%

International14%

CB

Total AUM $547 billion Total AUM $547 billion (1)(1)

Non-proprietaryinsurance,

annuity & other18%

(1) As of March 31, 2006


2006 and beyond …2006 and beyond …

Two substantial growth opportunities:Two substantial growth opportunities:International businessesInternational businessesDomestic retirement and savings businessesDomestic retirement and savings businesses

Evolving multiEvolving multi--channel distribution strategychannel distribution strategy

Manage margins and returnsManage margins and returns

Opportunistic acquisitionsOpportunistic acquisitions

Substantial operating cash flows enable share Substantial operating cash flows enable share repurchases, growing cash dividendsrepurchases, growing cash dividends


2006 2006 –– 20072007Execution and business mix drive superior Execution and business mix drive superior

shareholder value growthshareholder value growth

ROE: 12% 14%Double digit average annual growth: AOI, EPSReasonably consistent operating resultsVisible, sustainable cash flow“AA”capital management

ROE: 12% 14%ROE: 12% 14%Double digit average annual growth: AOI, EPSDouble digit average annual growth: AOI, EPSReasonably consistent operating resultsReasonably consistent operating resultsVisible, sustainable cash flowVisible, sustainable cash flow“AA”capital management“AA”capital management

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