Prudential 2002 Annual Report Download - page 58
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Please find page 58 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.Assets under management and client assets decreased $21 billion to $257 billion at December 31, 2001 from
$278 billion at December 31, 2000, primarily as a result of overall market value declines.
Non-Interest Expenses
2002 to 2001 Annual Comparison. Total non-interest expenses, as shown in the table above under
“—Operating Results,” decreased $391 million, or 14%, from 2001 to 2002. Non-interest expenses included costs
incurred to reduce staffing levels, occupancy and other overhead costs of $65 million at our securities brokerage
operations and $15 million attributable to our equity sales and trading operations in 2001, compared to 2002
amounts of $38 million for securities brokerage operations and $5 million for equity sales and trading operations.
The remainder of the decrease came primarily from the reduced cost structure resulting from the actions taken and
declines in revenue-based compensation costs.
2001 to 2000 Annual Comparison. Total non-interest expenses decreased $114 million from 2000 to 2001.
Non-interest expenses for our securities brokerage operation decreased due to the lower level of revenues and
earnings in 2001, but the decrease was not proportional to the revenue decline largely due to the recruiting and
retention incentives as described above as well as $65 million in costs to reduce staffing levels, occupancy and
other overhead costs incurred in 2001. Non-interest expenses for our equity sales and trading operations decreased
from $398 million in 2000 to $369 million in 2001, reflecting decreased compensation expenses driven by the
declines in revenue and earnings as well as $15 million in costs to reduce staffing levels, occupancy and other
overhead costs incurred in 2001.
Retirement
Operating Results
The following table sets forth the Retirement segment’s operating results for the periods indicated.
Year Ended December 31,
2002 2001 2000
(in millions)
Operating results:
Revenues(1) .............................................................................. $2,359 $2,394 $2,624
Benefits and expenses(2) .................................................................... 2,218 2,284 2,437
Adjusted operating income ................................................................... 141 110 187
Realized investment losses, net, and related charges ........................................... (376) (86) (116)
Income (loss) from continuing operations before income taxes ....................................... $ (235) $ 24 $ 71
(1) Revenues exclude realized investment losses, net, of $383 million, $100 million, and $85 million for the years ended December 31, 2002,
2001, and 2000, respectively.
(2) Benefits and expenses exclude the impact of net realized investment gains and losses on change in reserves and deferred policy
acquisition cost amortization of $(7) million, $(14) million, and $31 million for the years ended December 31, 2002, 2001 and 2000,
respectively.
Income from Continuing Operations Before Income Taxes
2002 to 2001 Annual Comparison. The segment’s loss from continuing operations before income taxes was
$235 million in 2002 compared to income of $24 million in 2001. The decrease from 2001 reflects an increase in
realized investment losses, net, and related charges of $290 million, partially offset by a $31 million increase in
adjusted operating income as discussed below. For a discussion of realized investment losses, net, and related
charges see “—Consolidated Results of Operations—Realized Investment Gains.”
2001 to 2000 Annual Comparison. Income from continuing operations before income taxes decreased $47
million, from $71 million in 2000 to $24 million in 2001. This decrease reflects a $77 million decline in adjusted
Prudential Financial 2002 Annual Report 57