Prudential 2011 Annual Report Download - page 209

PRUDENTIAL FINANCIAL, INC.
Notes to Consolidated Financial Statements
15. EQUITY (continued)
The declaration and payment of dividends on the Class B Stock depends upon the financial performance of the Closed Block Business
and, as the Closed Block matures, the holders of the Class B Stock will receive the surplus of the Closed Block Business no longer required
to support the Closed Block for regulatory purposes. Dividends on the Class B Stock are payable in an aggregate amount per year at least
equal to the lesser of (1) a Target Dividend Amount of $19.25 million or (2) the CB Distributable Cash Flow for such year, which is a
measure of the net cash flows of the Closed Block Business. Notwithstanding this formula, as with any common stock, Prudential Financial
retains the flexibility to suspend dividends on the Class B Stock; however, if CB Distributable Cash Flow exists and Prudential Financial
chooses not to pay dividends on the Class B Stock in an aggregate amount at least equal to the lesser of the CB Distributable Cash Flow or
the Target Dividend Amount for any period, then cash dividends cannot be paid on the Common Stock with respect to such period.
Preferred Stock
Prudential Financial adopted a shareholder rights plan (the “rights plan”) under which each outstanding share of Common Stock was
coupled with a shareholder right. The rights plan was not applicable to any Class B Stock. Each right initially entitled the holder to
purchase one one-thousandth of a share of a series of Prudential Financial preferred stock upon payment of the exercise price. At the time
of the demutualization, the Board of Directors of Prudential Financial determined that the initial exercise price per right was $110, subject
to adjustment from time to time as provided in the rights plan. There was no preferred stock outstanding at December 31, 2011 and 2010.
The rights plan expired on December 18, 2011.
Comprehensive Income
The components of comprehensive income (loss) for the years ended December 31, are as follows:
2011 2010 2009
(in millions)
Net income (loss) ......................................................................... $3,738 $3,206 $ 3,090
Other comprehensive income (loss), net of taxes:
Change in foreign currency translation adjustments .............................................. 233 486 292
Change in net unrealized investments gains (losses)(1) ........................................... 2,490 2,634 7,905
Change in pension and postretirement unrecognized net periodic benefit (cost) ........................ (182) 316 (645)
Other comprehensive income (loss), net of tax expense (benefit) of $1,312, $1,597, $3,707 .............. 2,541 3,436 7,552
Comprehensive income (loss) ............................................................... 6,279 6,642 10,642
Comprehensive (income) loss attributable to noncontrolling interests ............................ (28) (26) 41
Comprehensive income (loss) attributable to Prudential Financial, Inc. ............................... $6,251 $6,616 $10,683
(1) Includes cash flow hedges. See Note 21 for information on cash flow hedges. See Note 4 for additional information regarding unrealized investment
gains (losses), including the split between amounts related to fixed maturity securities on which an other-than-temporary impairment loss has been
recognized, and all other unrealized investment gains (losses).
The balance of and changes in each component of “Accumulated other comprehensive income (loss) attributable to Prudential
Financial, Inc.” for the years ended December 31, are as follows (net of taxes):
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, 2008 ............... $ 375 $(6,735) $ (983) $(7,343)
Change in component during year ........... 299 7,905 (645) 7,559
Impact of adoption of guidance for other-than-
temporary impairments of debt
securities(2) ........................... 0 (659) 0 (659)
Balance, December 31, 2009 ............... 674 511 (1,628) (443)
Change in component during year ........... 471 2,634 316 3,421
Balance, December 31, 2010 ............... 1,145 3,145 (1,312) 2,978
Change in component during year ........... 277 2,490 (182) 2,585
Balance, December 31, 2011 ............... $1,422 $ 5,635 $(1,494) $ 5,563
(1) Includes cash flow hedges. See Note 21 for information on cash flow hedges. See Note 4 for additional information regarding unrealized investment
gains (losses), including the split between amounts related to fixed maturity securities on which an other-than-temporary impairment loss has been
recognized, and all other unrealized investment gains (losses).
(2) See Note 2 for additional information on the adoption of guidance for other-than-temporary impairments of debt securities.
Prudential Financial, Inc. 2011 Annual Report 207