Prudential 2001 Annual Report Download - page 32

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Prudential Financial, Inc.
Selected Financial Data
We derived the selected consolidated income statement data and division and segment operating results for the years
ended December 31, 2001, 2000 and 1999 and the selected consolidated balance sheet data as of December 31, 2001
and 2000 from our Consolidated Financial Statements included elsewhere herein. We derived the selected
consolidated income statement data for the years ended December 31, 1998 and 1997 and the selected consolidated
balance sheet data as of December 31, 1999, 1998 and 1997 from consolidated financial statements not included
herein.
In April 2001, we completed the acquisition of Gibraltar Life Insurance Company, Ltd. (“Gibraltar Life”), which
has adopted a November 30 fiscal year end. Consolidated balance sheet data as of December 31, 2001 includes
Gibraltar Life assets and liabilities as of November 30, 2001, and consolidated income statement data includes
Gibraltar Life results for the period April 2, 2001 through November 30, 2001. Statistics reported for Gibraltar Life
are based on these dates as well.
We have made several dispositions that materially affect the comparability of the data presented below. In the fourth
quarter of 2000, we restructured the capital markets activities of Prudential Securities Incorporated (“Prudential
Securities”), exiting its lead-managed equity underwriting for corporate issuers and institutional fixed income
businesses. These businesses incurred a pre-tax loss of $159 million in 2001, a pre-tax loss of $620 million in 2000,
pre-tax income of $23 million in 1999, a pre-tax loss of $73 million in 1998 and pre-tax income of $55 million in
1997. The loss from these operations in 2000 included charges of $476 million associated with our termination and
wind-down of these businesses. In 2000, we sold Gibraltar Casualty Company, a commercial property and casualty
insurer that we placed in wind-down status in 1985. Gibraltar Casualty had no impact on results in 2001 and
incurred pre-tax losses of $7 million in 2000, $72 million in 1999, $76 million in 1998 and $24 million in 1997.
Residual activity from the residential first mortgage banking business that we sold in a prior period resulted in a pre-
tax loss of $41 million in 1998 and a pre-tax profit of $9 million in 1997, primarily related to our remaining
obligations with respect to this business.
On December 18, 2001, Prudential Insurance converted from a mutual life insurance company owned by its
policyholders to a stock life insurance company and became an indirect, wholly owned subsidiary of Prudential
Financial. For a discussion of these transactions, see “Management’s Discussion and Analysis of Financial
Condition and Results of Operations—Demutualization and Related Transactions” included herein.
“Demutualization costs and expenses” amounted to $588 million in 2001, $143 million in 2000, $75 million in 1999
and $24 million in 1998. “Demutualization costs and expenses” in 2001 include $340 million of demutualization
consideration payable to former Canadian branch policyholders as more fully described in Note 2 to the
Consolidated Financial Statements included herein.
You should read this selected consolidated financial and other information in conjunction with “Management’s
Discussion and Analysis of Financial Condition and Results of Operations” and our Consolidated Financial
Statements included elsewhere herein.
Growing and Protecting Your Wealth30