Prudential 2002 Annual Report Download - page 111
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Notes to Consolidated Financial Statements
6. INVESTMENTS (continued)
The table below presents unrealized gains (losses) on investments by asset class at December 31,
2002 2001 2000
(in millions)
Fixed maturities ................................................................ $7,594 $2,478 $712
Equity securities ............................................................... (42) 20 51
Other long-term investments ...................................................... (106) (126) (32)
Unrealized gains on investments ................................................... $7,446 $2,372 $731
Securities Pledged, Restricted Assets and Special Deposits
The Company pledges investment securities it owns to unaffiliated parties through certain transactions,
including securities lending, securities sold under agreement to repurchase and futures contracts. At December 31,
the carrying value of investments pledged to third parties as reported in the Consolidated Statements of Financial
Position included the following:
2002 2001
(in millions)
Fixed maturities available for sale ......................................................... $15,600 $10,865
Trading account assets .................................................................. 1,799 2,985
Separate account assets ................................................................. 2,496 2,659
Total securities pledged ................................................................. $19,895 $16,509
In the normal course of its business activities, the Company accepts collateral that can be sold or repledged.
The primary sources of this collateral are securities in customer accounts, securities purchased under agreements
to resell and securities borrowed transactions. The fair value of this collateral was approximately $13,488 million
and $14,801 million at December 31, 2002 and 2001, respectively, of which $9,288 million in 2002 and $10,571
million in 2001 had either been sold or repledged.
Assets of $399 million and $400 million at December 31, 2002 and 2001, respectively, were on deposit with
governmental authorities or trustees as required by certain insurance laws. Additionally, assets valued at $789
million and $960 million at December 31, 2002 and 2001, respectively, were held in voluntary trusts. Of these
amounts, $192 million and $244 million at December 31, 2002 and 2001, respectively, related to sales practices
matters described in Note 22. The remainder relates to trusts established to fund guaranteed dividends to certain
policyholders and to fund certain employee benefits. Assets valued at $424 million and $158 million at December
31, 2002 and 2001, respectively, were pledged as collateral for bank loans and other financing agreements. Letter
stock or other securities restricted as to sale amounted to $25 million and $183 million at December 31, 2002 and
2001, respectively. Restricted cash and securities of $1,869 million and $1,930 million at December 31, 2002 and
2001, respectively, were included in “Other assets.” The restricted cash represents funds deposited by clients and
funds accruing to clients as a result of trades or contracts.
Growing and Protecting Your Wealth110