Prudential 2005 Annual Report Download - page 169

MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Prudential Financial’s Common Stock was issued to eligible policyholders in Prudential Insurance’s demutualization and sold
to investors in Prudential Financial’s initial public offering. The Common Stock began trading on the New York Stock Exchange
under the symbol “PRU” on December 13, 2001. The following table presents the high and low closing prices for the Common
Stock on the New York Stock Exchange during the periods indicated and the dividends declared per share during such periods:
High Low Dividends
2005:
Fourth Quarter ....................................................................................... $77.96 $63.27 $0.780
Third Quarter ....................................................................................... 68.30 63.09 —
Second Quarter ...................................................................................... 66.30 55.23 —
First Quarter ........................................................................................ 59.32 52.62 —
2004:
Fourth Quarter ....................................................................................... $55.09 $42.87 $0.625
Third Quarter ....................................................................................... 48.10 44.30 —
Second Quarter ...................................................................................... 46.47 41.05 —
First Quarter ........................................................................................ 48.11 41.62 —
On January 31, 2006, there were 2,716,119 registered holders of record for the Common Stock and 495 million shares
outstanding.
The Class B Stock was issued to institutional investors (two subsidiaries of American International Group, Inc. and Pacific
Life Corp.) in a private placement pursuant to Section 4(2) of the Securities Act of 1933 on the date of demutualization. There is no
established public trading market for the Class B Stock. During the fourth quarter of 2005 and 2004, Prudential Financial paid an
annual dividend of $9.625 per share of Class B Stock. On January 31, 2006, there were three holders of record for the Class B Stock
and 2.0 million shares outstanding.
Prudential Financial’s Board of Directors currently intends to continue to declare and pay annual dividends on the Common
Stock and Class B Stock. Future dividend decisions will be based on, and affected by, a number of factors including the financial
performance of the Financial Services Businesses and Closed Block Business; our overall financial condition, results of operations,
cash requirements and future prospects; regulatory restrictions on the payment of dividends by Prudential Financial’s subsidiaries;
and such other factors as the Board of Directors may deem relevant. Dividends payable by Prudential Financial are limited to the
amount that would be legally available for payment under New Jersey corporate law. For additional information on dividends and
related regulatory restrictions, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—
Liquidity and Capital Resources” and Note 13 to the Consolidated Financial Statements.
On the date of demutualization, Prudential Financial and Prudential Financial Capital Trust I, or the Trust, a statutory business
trust, co-issued 13.8 million 6.75% equity security units, or the Units. Each Unit had a stated amount of $50 and initially consisted
of a purchase contract (requiring the holder to purchase shares of Prudential Financial’s Common Stock in November 2004, at a
price determined by a formula described in the contract) and a redeemable capital security of the Trust with a stated liquidation
amount of $50. Prudential Financial settled the purchase contracts associated with the Units in November 2004. Each purchase
contract was settled for 1.47 shares of Prudential Financial’s Common Stock resulting in the issuance of 20.3 million shares of
Common Stock. Prudential Financial received $690 million in proceeds from the issuance, to be used for general corporate
purposes.
In November 2005, Prudential Financial issued in a private placement $2.0 billion of floating rate convertible senior notes,
convertible by the holders at any time after issuance into cash and shares of the Company’s Common Stock. The Company used
substantially all of the offering proceeds to purchase an investment grade fixed income investment portfolio as well as to
repurchase, under the Company’s existing share repurchase authorization, shares of its Common Stock. For additional information
about these notes see Note 11 to the Consolidated Financial Statements.
Prudential Financial 2005 Annual Report 167