Prudential 2002 Annual Report Download - page 145
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Please find page 145 of the 2002 Prudential annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.PRUDENTIAL FINANCIAL, INC.
Notes to Consolidated Financial Statements
21. SEGMENT INFORMATION (continued)
The Other Asset Management segment uses hedging instruments to mitigate the risk that operating results
will fluctuate due to changes in the estimated fair value of mortgages held for sale, commitments to lend and loan
applications received. Changes in the estimated fair value of such instruments are included on a current basis in
“Commissions and other income.” Prior to the fourth quarter of 2002, the related mortgage loans were recorded at
the lower of aggregate cost or fair value. However, for segment reporting, changes in the estimated fair value of
the mortgage loans (gains (losses) of $(2) million, $(21) million and $28 million for the years ended December
31, 2002, 2001 and 2000, respectively) were included in adjusted operating income of the Other Asset
Management segment with offsetting adjustments to adjusted operating income of Corporate and Other
operations. Commencing in the fourth quarter of 2002, the Company applied hedge accounting treatment with
respect to loan inventory. Consequently, changes in the fair value of such inventory are included on a current
basis in “Commissions and other income” of the Other Asset Management segment, consistent with the related
hedges.
The summary below reconciles adjusted operating income, a non-GAAP measure, to income from
continuing operations before income taxes:
Year ended December 31, 2002
Adjusted
Operating
Income
Reconciling Items
Income
from
Continuing
Operations
Before
Income
Taxes
Realized
Investment
Gains
(Losses),
Net, and
Related
Adjustments
Charges
Related to
Realized
Gains
(Losses),
Net
Sales
Practices
Remedies
and Costs
Divested
Businesses
Demutualization
Costs and
Expenses
(in millions)
Individual Life and Annuities ........ $ 390 $(162) $ 15 $ — $ — $ — $ 243
GroupInsurance .................. 155 (129) — — — — 26
Property and Casualty Insurance ...... 10 (6) — — — — 4
Total Insurance Division ........ 555 (297) 15 — — — 273
Investment Management ............ 139 64 — — — — 203
Financial Advisory ................ (41) — — — — — (41)
Retirement ....................... 141 (383) 7 — — — (235)
Other Asset Management ........... 45 — — — — — 45
Total Investment Division ....... 284 (319) 7 — — — (28)
International Insurance ............. 757 (157) (16) — — — 584
International Investments ........... (10) — — — — — (10)
Total International Insurance
and Investments Division ..... 747 (157) (16) — — — 574
Corporate and Other ............... 194 (92) — (20) (80) — 2
Total Financial Services
Businesses ................. $1,780 $(865) $ 6 $ (20) $ (80) $ — 821
ClosedBlockBusiness ............. (757)
Total ....................... $64
Growing and Protecting Your Wealth144