Prudential 2002 Annual Report Download - page 61
Download and view the complete annual report
Please find page 61 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.accounts from inclusion of amounts not previously reflected in this segment and Common Stock received as
demutualization consideration.
Account values for guaranteed products amounted to $39.1 billion at December 31, 2002, a decrease of $767
million, or 2%, from December 31, 2001.
2001 to 2000 Annual Comparison. Account values in our full service defined contribution business
amounted to $24.6 billion at December 31, 2001, a decrease of $1.4 billion, or 5%, from December 31, 2000. This
decrease is primarily due to a decline in market value of mutual funds reflecting the general downturn in the
equity markets. In addition, net sales decreased $1.2 billion in 2001 from 2000, reflecting a decrease in new
institutional clients.
Account values for guaranteed products amounted to $39.8 billion at December 31, 2001, a decrease of $1.8
billion, or 4%, from December 31, 2000. The decrease from December 31, 2000 is primarily due to a decrease in
separate account annuity assets that reflected approximately $1.4 billion of annuity benefits.
Other Asset Management
Operating Results
The following table sets forth the Other Asset Management segment’s operating results for the periods
indicated. For the years ended December 31, 2002, 2001 and 2000, there was no activity that resulted in items
excluded from adjusted operating income. Therefore, results of this segment were the same on both an adjusted
operating income basis and a GAAP basis.
Year Ended December 31,
2002 2001 2000
(in millions)
Operating results:
Revenues.............................................................................. $90 $105 $66
Expenses .............................................................................. 45 50 24
Adjusted operating income ................................................................ $45 $ 55 $42
Adjusted Operating Income
2002 to 2001 Annual Comparison. Adjusted operating income decreased $10 million from $55 million in
2001 to $45 million in 2002. Increases in adjusted operating income from our commercial mortgage securitization
operation and proprietary investment and syndication activities were more than offset by a decline in the adjusted
operating income of our hedge portfolios, which were significantly reduced in size during 2002 and held assets of
$2.7 billion as of December 31, 2002.
2001 to 2000 Annual Comparison. Adjusted operating income increased $13 million, from $42 million in
2000 to $55 million in 2001. The increase came primarily from our commercial mortgage securitization
operations, which benefited from changes in market value of financial instruments held pending securitizations.
As of December 31, 2001, the hedge portfolios held assets, including both principal positions and securities
financing positions, of approximately $3.9 billion, compared to $7.9 billion at December 31, 2000.
Revenues
2002 to 2001 Annual Comparison. Revenues, as shown in the table above under “—Operating Results,”
decreased $15 million, from $105 million in 2001 to $90 million in 2002. The decrease was primarily due to the
reduction in our hedge portfolios partially offset by an increase in revenue associated with our proprietary
investment and syndication activities.
2001 to 2000 Annual Comparison. Revenues increased $39 million, from $66 million in 2000 to $105
million in 2001. The increase in revenue was due primarily to a $21 million increase in revenue associated with
our commercial mortgage securitization operations, which benefited from a change in market value of financial
instruments held pending securitizations. Additionally, our results for 2001 included $15 million in revenues
associated with our proprietary investment and syndication activities.
Growing and Protecting Your Wealth60