Prudential 2003 Annual Report Download - page 134
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PRUDENTIAL FINANCIAL, INC.
Notes to Consolidated Financial Statements
9. REINSURANCE (continued)
Reinsurance recoverables, included in “Other assets” at December 31, are as follows:
2003 2002
(in millions)
Life insurance ................................................................................. $521 $ 604
Property and casualty ........................................................................... — 457
Other reinsurance .............................................................................. 66 71
Total reinsurance recoverable ..................................................................... $587 $1,132
Three major reinsurance companies account for approximately 65% of the reinsurance recoverable at December
31, 2003. The Company periodically reviews the financial condition of its reinsurers and amounts recoverable
therefrom in order to minimize its exposure to loss from reinsurer insolvencies, recording an allowance when necessary
for uncollectible reinsurance.
10. SHORT-TERM AND LONG-TERM DEBT
Short-term Debt
Short-term debt at December 31, is as follows:
2003 2002
(in millions)
Commercial paper ............................................................................ $3,258 $1,265
Notes payable ................................................................................ 1,027 1,566
Current portion of long-term debt ................................................................ 454 638
Total short-term debt .......................................................................... $4,739 $3,469
The weighted average interest rate on outstanding short-term debt, excluding the current portion of long-term
debt, was approximately 1.1% and 1.6% at December 31, 2003 and 2002, respectively.
At December 31, 2003, the Company had $2,566 million in committed lines of credit from numerous financial
institutions, all of which were unused. These lines of credit generally have terms ranging from one to five years.
The Company issues commercial paper primarily to manage operating cash flows and existing commitments, to
meet working capital needs and to take advantage of current investment opportunities. At December 31, 2003 and
2002, a portion of commercial paper borrowings were supported by $2,500 million of the Company’s existing lines of
credit. At December 31, 2003 and 2002, the weighted average maturity of commercial paper outstanding was 18 and 19
days, respectively.
Growing and Protecting Your Wealth132