Prudential 2003 Annual Report Download - page 84

as “available for sale” with fair values of $30.2 billion and $26.7 billion, respectively. We believe that ongoing
operations and the liquidity profile of our international insurance assets provide sufficient liquidity in reasonably
foreseeable stress scenarios.
Prudential Securities Group Liquidity
Prudential Securities Group’s assets totaled $7.5 billion and $20.3 billion as of December 31, 2003 and 2002,
respectively. On July 1, 2003, we completed the combination of our retail brokerage business with Wachovia. As a
result, we contributed $16.3 billion of assets and corresponding liabilities and equity in return for our investment in
Wachovia Securities. Prudential Securities Group continues to own our investment in Wachovia Securities as well as
the retained wholly owned businesses. The wholly owned businesses remaining in Prudential Securities Group
continue to maintain sufficiently liquid balance sheets consisting mostly of cash and cash equivalents, segregated client
assets, short-term collateralized receivables from clients and broker-dealers, and collateralized loans to clients.
Prudential Securities Group’s total capitalization, including equity, subordinated debt and long-term debt, was $2.4
billion and $3.6 billion as December 31, 2003 and December 31, 2002, respectively.
In October 2000, we announced that we would terminate our institutional fixed income activities that constituted
the major portion of the debt capital markets operations of Prudential Securities Group. As of December 31, 2003,
Prudential Securities Group had remaining assets amounting to approximately $700 million related to its institutional
fixed income activities, compared to $900 million as of December 31, 2002.
Financing Activities
As of December 31, 2003 and December 31, 2002, total short- and long-term debt of the Company were $10.349
billion and $8.226 billion, respectively, including debt associated with the Financial Services Businesses and the
Closed Block Business. Outstanding short- and long-term debt of the parent company amounted to $2.615 billion as of
December 31, 2003, which amount is included in the total consolidated outstanding short- and long-term debt of the
Company above. Prudential Financial had no short- and long-term debt as of December 31, 2002.
Prudential Financial is authorized to borrow funds from various sources to meet its capital needs, as well as the
capital needs of its subsidiaries. The following table sets forth the outstanding short- and long-term debt of Prudential
Financial, including that related to the Equity Security Units, as of the dates indicated:
December 31, 2003 December 31, 2002
(in millions)
Borrowings:
General obligation short-term debt ....................................................... $ 412 $—
General obligation long-term debt:
Senior debt ..................................................................... 1,492 —
Debt related to Equity Security Units(1) .............................................. 711 —
Total general obligations ...................................................... $2,615 $—
(1) Long-term debt as of December 31, 2003, includes debt related to the Prudential Financial’s equity security units, previously included in
“Guaranteed beneficial interest in Trust holding solely debentures of parent” as of December 31, 2002. The $711 million includes $690 million
corresponding to contractual obligations of Equity Security Units to purchase Prudential Financial Common Stock in November 2004.
Prudential Financial’s short-term debt includes commercial paper borrowings of $412 million. The weighted
average interest rate on the commercial paper borrowings under this program was 1.21% for the full year ended
December 31, 2003.
To enhance financial flexibility, Prudential Financial filed a $5 billion shelf registration statement, effective April
25, 2003, with the Securities and Exchange Commission, which permits the issuance of public debt, equity and hybrid
securities. The total principal amount of debt outstanding under this shelf program as of December 31, 2003 was $1.5
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