Prudential 2002 Annual Report Download - page 76
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Please find page 76 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.The following table sets forth our outstanding financing as of the dates indicated:
As of December 31,
2002 2001
(in millions)
Borrowings:
General obligation short-term debt .................................................................. $ 3,468 $ 5,334
General obligation long-term debt:
Seniordebt................................................................................. 1,744 2,042
Surplusnotes ............................................................................... 690 989
Total general obligation long-term debt .......................................................... 2,434 3,031
Total general obligations ................................................................. 5,902 8,365
Total limited and non-recourse borrowing(1) ...................................................... 2,324 2,344
Total borrowings(2) ..................................................................... 8,226 10,709
Total asset-based financing .................................................................... 29,127 24,683
Total borrowings and asset-based financings(3) ............................................. $37,353 $35,392
(1) As of December 31, 2002 and 2001, $1.75 billion of limited and non-recourse debt is within the Closed Block Business.
(2) Includes $1.3 billion and $1.7 billion related to Prudential Securities Group Inc. as of December 31, 2002 and 2001, respectively.
(3) Includes $8.9 billion and $9.6 billion related to Prudential Securities Group Inc. as of December 31, 2002 and 2001, respectively.
Total general debt obligations as of December 31, 2002 decreased by $2.5 billion, or 29%, from December
31, 2001, reflecting a $597 million decrease in long-term debt obligations and a $1.9 billion decrease in short-
term debt obligations. The decrease in short-term debt was driven in part by the recapitalization of Prudential
Securities Group net of its increased borrowing needs, which contributed approximately $710 million to the
decrease in short-term debt. In addition, various other businesses utilized over $540 million in cash from
operations to reduce commercial paper outstanding. Also contributing to the decline in short-term debt were
decreased borrowing needs of approximately $750 million in various operating businesses. Long-term debt
decreased primarily due to the reclassification of $585 million in long-term debt to current, including $300
million in surplus notes. Asset-based financing increased by $4.4 billion in our short-term spread portfolios.
Our total borrowings consist of amounts used for general corporate purposes, investment related debt,
securities business related debt and debt related to specified other businesses. Borrowings used for general
corporate purposes include those used for cash flow timing mismatches at Prudential Financial and investments in
equity and debt securities of subsidiaries including amounts utilized for regulatory capital purposes. Investment
related borrowings consist of debt issued to finance specific investment assets or portfolios of investment assets,
including institutional spread lending investment portfolios, real estate, and real estate related investments held in
consolidated joint ventures, as well as institutional and insurance company portfolio cash flow timing differences.
Securities business related debt consists of debt issued to finance primarily the liquidity of our broker-dealers and
our capital markets and other securities business related operations. Debt related to specified other businesses
consists of borrowings associated with consumer banking activities, real estate franchises and relocation services.
Borrowings under which either the holder is entitled to collect only against the assets pledged to the debt as
collateral, or has only very limited rights to collect against other assets, have been classified as limited and non-
recourse debt. This amount includes $1.75 billion of limited and non-recourse debt within the Closed Block
Business.
Prudential Financial 2002 Annual Report 75