Prudential 2005 Annual Report Download - page 35

Sales Results and Account Values
The following table shows the changes in the account values and net sales of Retirement segment products for the periods indicated.
Net sales are total sales minus withdrawals or withdrawals and benefits, as applicable. Sales and net sales do not correspond to revenues
under GAAP, but are used as a relevant measure of business activity.
Year ended December 31,
2005 2004 2003
(in millions)
Full Service(2):
Beginning total account value ......................................................................... $83,891 $ 32,911 $26,107
Sales ............................................................................................. 13,006 11,665 6,311
Withdrawals and benefits ............................................................................. (13,918) (13,087) (3,648)
Change in market value, interest credited and interest income ................................................ 5,406 5,592 4,141
Acquisition of CIGNA’s retirement business(1) ........................................................... — 46,810 —
Ending total account value ........................................................................ $88,385 $ 83,891 $32,911
Net sales (withdrawals) .............................................................................. $ (912) $ (1,422) $ 2,663
Institutional Investment Products(3):
Beginning total account value ......................................................................... $47,680 $ 39,296 $37,554
Sales ............................................................................................. 4,065 2,951 1,765
Withdrawals and benefits ............................................................................. (5,533) (3,860) (3,387)
Change in market value, interest credited and interest income ................................................ 2,319 2,691 2,991
Other(4) .......................................................................................... (451) (640) 373
Acquisition of CIGNA’s retirement business(1) ........................................................... — 7,242 —
Ending total account value ........................................................................ $48,080 $ 47,680 $39,296
Net withdrawals .................................................................................... $ (1,468) $ (909) $ (1,622)
(1) Account values and activity related to the CIGNA retirement business include amounts acquired under reinsurance agreements.
(2) Ending total account value for the full service business includes assets of Prudential’s retirement plan of $5.3 billion, $4.9 billion and $4.6 billion as of
December 31, 2005, 2004 and 2003, respectively.
(3) Ending total account value for the institutional investment products business includes assets of Prudential’s retirement plan of $6.4 billion, $6.9 billion
and $6.9 billion as of December 31, 2005, 2004 and 2003, respectively.
(4) Represents changes in asset balances for externally managed accounts. Includes a $152 million reduction in account value as of January 1, 2004
reflecting the adoption of SOP 03-1.
2005 to 2004 Annual Comparison. Account values in our full service business amounted to $88.4 billion as of December 31, 2005,
an increase of $4.5 billion from December 31, 2004. The increase in account values was driven by an increase in the market value of
mutual funds and separate accounts and interest on general account business, partially offset by net withdrawals. Net withdrawals
decreased $510 million primarily reflecting the withdrawal of approximately $600 million in 2004 relating to retirement plans of our retail
securities brokerage operations as a result of the combination of those operations with Wachovia Securities. In addition, the prior year
reflects only the initial nine months of sales and withdrawal activity from the retirement business acquired from CIGNA.
Account values in our institutional investment products business amounted to $48.1 billion as of December 31, 2005, an increase of
$400 million from December 31, 2004. The increase in account values was driven by interest on general account business, market value
increases and client reinvestment of interest income and dividends on separate accounts, mainly offset by net withdrawals. Net withdrawals
increased $559 million largely due to a transfer in 2005 of account values to our Asset Management segment. An increase in structured
settlement sales during 2005 partially offset these withdrawals. In addition, the prior year reflects only the initial nine months of sales and
withdrawal activity from the retirement business acquired from CIGNA.
2004 to 2003 Annual Comparison. Account values in our full service business amounted to $83.9 billion as of December 31, 2004,
an increase of $51.0 billion from December 31, 2003, primarily reflecting $46.8 billion of account value acquired from CIGNA. Also
contributing to this increase was a $5.6 billion increase in the market value of mutual funds and separate accounts and client reinvestment
of interest income and dividends during 2004. These increases were partially offset by net withdrawals of $1.4 billion, which include the
withdrawal of approximately $600 million in the first quarter of 2004 relating to retirement plans of our retail securities brokerage
operations as a result of the combination of these operations with Wachovia Securities. The decline in net sales from 2003 was primarily
due to the increase in lapses related to the acquisition of the CIGNA retirement business, as expected, a transfer from the full service
business to our Asset Management segment, and a single large case sale in the third quarter of 2003.
Account values in our institutional investment products business amounted to $47.7 billion as of December 31, 2004, an increase of
$8.4 billion from December 31, 2003, primarily reflecting $7.2 billion of account value acquired from CIGNA. Also contributing to this
increase was $2.7 billion of market value increases and client reinvestment of interest income and dividends, which were partially offset by
net withdrawals of $0.9 billion. The decrease in net withdrawals from 2003 reflects sales of funding agreements through our Funding
Agreements Notes Issuance Program.
Prudential Financial 2005 Annual Report 33