Prudential 2012 Annual Report Download - page 130

PRUDENTIAL FINANCIAL, INC.
Notes to Consolidated Financial Statements
3. ACQUISITIONS AND DISPOSITIONS (continued)
Results of the Star and Edison Businesses since the Acquisition Date
The following table presents selected financial information reflecting results for the Star and Edison Businesses, prior to merging into
the Gibraltar Life Insurance Company, Ltd. on January 1, 2012, that are included in the Company’s Consolidated Statements of Operations
for the year ended December 31, 2011:
$ in millions
Total revenues(1) ....................................................................................... $4,872
Income from continuing operations(1) ....................................................................... 545
(1) Includes 10 months of results for the Star and Edison Businesses (February 1, 2011 through November 30, 2011) as discussed in Note 1.
The results of the Star and Edison Businesses in the table above include a pre-tax charge of $27 million for estimated claims and
expenses arising from the 2011 earthquake in Japan. The results of the Star and Edison Businesses in the table above do not reflect the
impact of transaction and integration costs on the Company’s results. Transaction costs represent costs directly related to effecting the
acquisition. Integration costs are costs associated with the integration of the core operations of the Star and Edison Businesses with the
Gibraltar Life operations. Both transaction and integration costs are expensed as incurred and are included in “General and administrative
expenses.” For the years ended December 31, 2012 and 2011, the Company incurred $138 million and $213 million, respectively, of
transaction and integration costs reflected in the International Insurance segment.
Supplemental Unaudited Pro Forma Information
The following supplemental information presents selected unaudited pro forma information for the Company assuming the acquisition
had occurred as of January 1, 2010. This pro forma information does not purport to represent what the Company’s actual results of
operations would have been if the acquisition had occurred as of the date indicated or what such results would be for any future periods.
The pro forma information does not reflect the impact of future events that may occur, including but not limited to, expense efficiencies
arising from the acquisition and also does not give effect to certain one-time charges that the Company expects to incur, such as
restructuring and integration costs.
Year Ended December 31,
2011 2010
(in millions, except per share amount)
Total revenues ............................................................................ $50,350 $42,613
Income from continuing operations ............................................................ $ 3,768 $ 3,033
Net income attributable to Prudential Financial, Inc. .............................................. $ 3,731 $ 3,054
Earnings per share
Financial Services Businesses
Basic earnings per share—Common Stock:
Income from continuing operations attributable to Prudential Financial, Inc. ............... $ 7.35 $ 5.25
Net income attributable to Prudential Financial, Inc. .................................. $ 7.42 $ 5.31
Diluted earnings per share—Common Stock:
Income from continuing operations attributable to Prudential Financial, Inc. ............... $ 7.26 $ 5.19
Net income attributable to Prudential Financial, Inc. .................................. $ 7.33 $ 5.25
Closed Block Business
Basic and Diluted earnings per share—Class B Stock:
Income from continuing operations attributable to Prudential Financial, Inc. ............... $ 61.00 $229.00
Net income attributable to Prudential Financial, Inc. .................................. $ 61.00 $229.50
Sale of Real Estate Brokerage Franchise and Relocation Services Business
On December 6, 2011, the Company sold its real estate brokerage franchise and relocation services business (“PRERS”) to Brookfield
Asset Management, Inc. The Prudential Real Estate Financial Services Company of America Inc. (“PREFSA”), a finance subsidiary of the
Company with investments in a limited number of real estate brokerage franchises, was excluded from the transaction. The proceeds from the
sale, before transaction related expenses, were $108 million and resulted in a pre-tax gain of $49 million and an after tax gain of $62 million.
Under the sale agreement, the real estate brokerage franchisees may continue to use the Company’s trademark, based on the terms of
their respective franchise agreements. In addition, the Company had agreed to provide certain Brookfield affiliates with transitional
financing for the transferred relocation services business. This transitional financing was terminated on October 26, 2012.
PRERS did not qualify as a Discontinued Operation due to the continuing involvement through the financing provided to Brookfield
and the retained equity in PREFSA.Results related to PRERS and PREFSA are included in Corporate and Other operations as a divested
business.
128 Prudential Financial, Inc. 2012 Annual Report