Slide 1: Prudential Financial, Inc. Acquisition of Star/Edison
Exhibit 99.2 PRUDENTIAL FINANCIAL, INC. ACQUISITION OF STAR/EDISON SEPTEMBER 30, 2010 1
Slide 2: Building on Success in a Market We Know Well
Acquisition of Star/Edison Building on Success in a Market We Know Well Attractive Financial Transaction – In-force business + cost synergies = attractive expected returns – Expected near-term accretion to earnings per share, growing as synergies are realized – Meaningful contribution to Prudential’
Slide 3: Low Execution Risk
Low Execution Risk • Products compatible with Prudential’s established Japanese insurance operations • Recent update of Prudential’s administrative platform facilitates absorption of acquired business • Seasoned Prudential management team with strong business combination track record in Japan: Kyoei
Slide 4: Transaction Highlights
Transaction Highlights • Purchase price $4.8 billion; “net” purchase price, approximately $4.2 billion(1) • Expected financing: approximately $1.7 billion available capital, $1.3 billion equity issuance, $1.2 billion debt • Acquired businesses to be adequately capitalized at closing, consistent with
Slide 5: Expected Transaction Financing
Expected Transaction Financing Available On-Balance-Sheet Capital – Parent company funds $1.7 billion – Capital resident in international units Common Equity $1.3 billion – Public equity offering prior to closing Debt Financing – Long term senior notes of Prudential Financial, Inc. $1.2 billion to b
Slide 6: Attractive Financial Returns Driven by In-Force Business and Cost Synergies
Attractive Financial Returns Driven by In-Force Business and Cost Synergies (1) 2009 2012 Star/Edison pre-tax operating income, $900 historical basis (2) Approximately Purchase accounting and other adjustments (500) 30% of (primarily reset of investment portfolio yield) Star/Edison Pro-forma earning
Slide 7: Transaction Effectively Deploys Capital and Strengthens Balanced Mix of Businesses
Transaction Effectively Deploys Capital and Strengthens Balanced Mix of Businesses 6/30/10 Actual Pro-Forma Including Star/Edison, Attributed Equity $26.8 Billion(1) Attributed Equity $28.1 Billion(1)(2) Corporate and Other 4% Corporate and Other 12% Individual International Annuities Insurance 18%
Slide 8: Building a Leading Foreign Life Insurer in Japan
Building a Leading Foreign Life Insurer in Japan Assets(1)(2)(3) Face Amount Insurance Captive in-Force(2)(3)(4)(5) Revenues(1)(3)(6) Agents(2) ($ Billions) ($ Billions) ($ Millions) Star $ 18.6 $ 76.3 $ 1,462 4,333 Edison 29.0 70.5 2,065 3,400 Combined 47.6 146.8 3,527 7,733 Gibraltar Life 45.4 219
Slide 9: Business Integration Drives Cost Synergies
Business Integration Drives Cost Synergies • Expect to integrate Star and Edison businesses with Prudential’s Japanese insurance operations by early 2012 • Integration includes branch and back office consolidations, migration to Prudential’s IT platform, rationalization of administrative expenses •
Slide 10: Diversified Distribution Channels
Diversified Distribution Channels Star/Edison 2007 Sales(1) Star/Edison 2009 Sales(1) $708 million $599 million 7,733 Captive 4,400 27% Agents(2) Independent Agents(2) 63% 78% 15% 10% 7% Captive Agents Independent Agents Banks and Other Distribution(3) 1) Annualized new business premiums; foreign de
Slide 11: Product Mix Compatible with Prudential's Emphasis on Protection and Retirement Markets
Product Mix Compatible with Prudential’s Emphasis on Protection and Retirement Markets Star/Edison Star/Edison In-Force Annualized Annualized New Business Premiums Premiums(1) (1) Year ended December 31, 2009 (1) As of December 31, 2009 25% 32% 33% 45% 43% U.S. dollar business 39% 22% 3% 3% Life Ins
Slide 12: Star/Edison General Account Portfolio
Star/Edison General Account Portfolio $41 billion General Account (1) Real Estate 4% • 90% of fixed maturity investments Loans 4% Japanese are investment grade(2)(3) Equities 4% Corporate Bonds Structured 19% • 72% of non-Japanese bonds Products are U.S. Dollar denominated 6% Japanese Government Bon
Slide 13: Building on Success in a Market We Know Well
Building on Success in a Market We Know Well • Attractive financial and strategic transaction; expected returns primarily driven by in-force business and cost synergies • Low strategic and execution risk: compatible products; updated Prudential systems facilitate integration; seasoned management tea
Slide 14: Forward-Looking Statements
Forward-Looking Statements Certain of the statements included in this presentation constitute forward-looking statements within the meaning of the U. S. Private Securities Litigation Reform Act of 1995. It is possible that actual results may differ materially from any expectations or predictions exp
Slide 15: Non-GAAP Measure
Non–GAAP Measure This presentation includes references to “adjusted operating income.” Adjusted operating income is a non-GAAP measure of performance of our Financial Services Businesses. Adjusted operating income excludes “Realized investment gains (losses), net,” as adjusted, and related charges a
Slide 16: Prudential Financial, Inc. Acquisition of Star/Edison
PRUDENTIAL FINANCIAL, INC. ACQUISITION OF STAR/EDISON SEPTEMBER 30, 2010 16