Prudential 2002 Annual Report Download - page 67
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Please find page 67 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.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 ............................................................................ $327 $303 $355
Expenses ............................................................................ 337 344 379
Adjusted operating income .............................................................. $(10) $(41) $(24)
Adjusted Operating Income
2002 to 2001 Annual Comparison. Our International Investments segment reported a loss, on an adjusted
operating income basis, of $10 million for 2002 compared to a loss of $41 million in 2001. The $31 million
reduction in the loss reflected earnings from recently acquired units and lower expenses resulting from our earlier
actions to reduce the cost structure.
2001 to 2000 Annual Comparison. The International Investments segment reported a loss, on an adjusted
operating income basis, of $41 million in 2001 compared to $24 million for 2000 as 2000 results included a $17
million gain from our interest in the conversion of London Stock Exchange and Hong Kong Stock and Futures
Exchange seats into listed shares and trading rights in 2000. Additionally, revenue growth was partially offset by
expenses associated with the expansion of this developing business.
Revenues
2002 to 2001 Annual Comparison. Revenues, as shown in the table above under “—Operating Results,”
increased $24 million, from $303 million in 2001 to $327 million in 2002 due primarily to asset management fees
and commissions earned by recently acquired units partially offset by lower commission revenues from our
futures operations.
2001 to 2000 Annual Comparison. Revenues decreased $52 million, or 15%, from 2000 to 2001. The
decrease reflects lower commission revenues associated with reduced transaction volume resulting from less
active equity markets in comparison to 2000 which benefited from exceptionally active equity markets in the
early part of the year partially offset by increased asset management fees and commissions associated with
recently acquired units. In addition, revenues for 2000 included the $17 million gain from our interest in the
conversion of stock exchange seats as noted above.
Expenses
2002 to 2001 Annual Comparison. Expenses, as shown in the table above under “—Operating Results,”
decreased $7 million from $344 million in 2001 to $337 million in 2002 primarily due to decreases in revenue-
based compensation costs and cost saving measures implemented in 2001 partially offset by expenses associated
with recently acquired units.
2001 to 2000 Annual Comparison. Expenses decreased $35 million, or 9%, from 2000 to 2001, due
primarily to decreases in revenue-based compensation costs. In addition, results for 2001 include expenses
associated with staff reductions and facilities consolidations. Expenses associated with recently acquired units
partially offset the aforementioned expense declines.
Corporate and Other Operations
Corporate and Other operations include corporate-level activities that we do not allocate to our business
segments. It also consists of real estate and relocation services, international ventures, divested businesses and
businesses that we have placed in wind-down status but have not divested.
Corporate-level activities consist primarily of corporate-level income and expenses not allocated to any of
our business segments, including costs for company-wide initiatives such as enhancement of our Internet
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