Prudential 2012 Annual Report Download - page 49

Edison, the increase in annualized new business premiums was driven by higher bank channel sales of $233 million primarily due to
increased sales of protection products including $137 million from single premium reduced death benefit whole life sales due in part to
increased sales in advance of a premium increase on our yen-denominated product effective early February 2011 and $55 million in whole
life products. Excluding Star and Edison, independent agency distribution sales increased $86 million with the vast majority from sales of
cancer insurance products and Life Consultant sales increased $21 million primarily reflecting higher sales of retirement income and
annuity products.
Salesforce
The following table sets forth the number of Life Planners and Life Consultants for the periods indicated.
As of December 31,
2012 2011 2010
Life Planners:
Japan ........................................................................................... 3,216 3,137 3,122
All other countries ................................................................................. 3,842 3,655 3,443
Gibraltar Life Consultants ............................................................................... 11,333 12,791 6,281
Total ............................................................................................ 18,391 19,583 12,846
2012 to 2011 Comparison. The number of Life Planners increased by 266 from December 31, 2011 driven by increases of 96 and 79
in Korea and Japan, respectively, reflecting recruitment and retention initiatives and 69 in Brazil due to agency growth. Also contributing
to the increase in Life Planners over the past year were increases of 61 in Poland and 22 in Italy, partly offset by declines of 37 in Taiwan
and 26 in Mexico.
The number of Gibraltar Life Consultants decreased by 1,458 from December 31, 2011, including anticipated resignations and
terminations of Life Consultants, due in part to their failure to meet minimum sales production standards.
2011 to 2010 Comparison. The number of Life Planners increased by 227 from December 31, 2010 driven by an increase of 84 in
Brazil due to stronger recruitment, as well as increases of 62 in Korea, 32 in Poland, 31 in Italy and 15 in Japan. Over this twelve month
period, there were 35 Japanese Life Planners transferred to Gibraltar Life, primarily in support of our efforts to expand our bank channel
distribution and to service orphaned policyholders.
The number of Gibraltar Life Consultants increased by 6,510 from December 31, 2010 driven by the Star and Edison acquisition. As
of December 31, 2011, 6,550 Life Consultants were associated with the former acquired businesses of Star and Edison, reflecting a
decrease of 719 from the 7,269 Life Consultants as of the February 1, 2011 date of acquisition, as recruitments were more than offset by
terminations and resignations.
Corporate and Other
Corporate and Other includes corporate operations, after allocations to our business segments, and divested businesses except those
that qualify for “discontinued operations” accounting treatment under U.S. GAAP.
Year ended December 31,
2012 2011 2010
(in millions)
Operating results:
Capital debt interest expense .......................................................................... $ (699) $ (621) $(554)
Net investment income, net of interest expense, excluding capital debt interest expense ............................ (53) (26) (63)
Pension income and employee benefits .................................................................. 162 210 215
Other corporate activities(1) .......................................................................... (745) (673) (534)
Adjusted operating income ............................................................................... (1,335) (1,110) (936)
Realized investment gains (losses), net, and related adjustments .............................................. 469 (1,487) 119
Related charges .................................................................................... (24) 59 (3)
Divested businesses ................................................................................. (597) 101 18
Equity in earnings of operating joint ventures and earnings attributable to noncontrolling interests ................... (11) (10) (28)
Income (loss) from continuing operations before income taxes and equity in earnings of operating joint ventures ............ $(1,498) $(2,447) $(830)
(1) Includes consolidating adjustments.
In December 2012, the Company adopted retrospectively a change in method of applying an accounting principle for the Company’s
pension plans. The change in accounting method relates to the calculation of market related value of pension plan assets, used to determine
net periodic pension cost. As a result of this change, Corporate and Other results have been revised for all historical periods presented. For
additional information on the change in accounting method for the Company’s pension plans, see Notes 2 and 18 to our Consolidated
Financial Statements.
2012 to 2011 Annual Comparison. The loss from Corporate and Other operations, on an adjusted operating income basis, increased
$225 million. Capital debt interest expense increased $78 million primarily due to higher levels of capital debt. Net investment income, net
of interest expense, excluding capital debt interest expense, decreased $27 million reflecting less favorable results from equity method
investments and higher levels of operating debt. Net charges from other corporate activities for 2012 include a $78 million charge from the
impact of an annual review and update of assumptions on the reserves for certain retained obligations relating to pre-demutualization
policyholders to whom we had previously agreed to provide insurance for reduced or no premium in accordance with contractual
settlements related to prior individual life insurance sales practices remediation. In addition, retained corporate expenses increased in 2012
primarily from an increase in corporate advertising, the results of our corporate foreign exchange hedging activities and the costs related to
the prepayment of outstanding debt. These increases are partially offset by a favorable comparative impact for our estimate of payments
Prudential Financial, Inc. 2012 Annual Report 47