Prudential 2006 Annual Report Download - page 116

Download and view the complete annual report

Please find page 116 of the 2006 Prudential annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 192

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156
  • 157
  • 158
  • 159
  • 160
  • 161
  • 162
  • 163
  • 164
  • 165
  • 166
  • 167
  • 168
  • 169
  • 170
  • 171
  • 172
  • 173
  • 174
  • 175
  • 176
  • 177
  • 178
  • 179
  • 180
  • 181
  • 182
  • 183
  • 184
  • 185
  • 186
  • 187
  • 188
  • 189
  • 190
  • 191
  • 192

PRUDENTIAL FINANCIAL, INC.
Notes to Consolidated Financial Statements
3. ACQUISITIONS AND DISPOSITIONS (continued)
Discontinued Operations
Income (loss) from discontinued businesses, including charges upon disposition, for the years ended December 31, are as
follows:
2006 2005 2004
(in millions)
Real estate investments sold or held for sale(1) ...................................................... $ 98 $— $—
Canadian IWP and IH operations(2) ............................................................... (10) (31) 11
Philippine insurance operations(3) ................................................................ (12) — —
Dryden Wealth Management(4) .................................................................. (4) (56) (81)
International securities operations(5) .............................................................. (8) (26) (42)
Healthcare operations(6) ........................................................................ 29 22 6
Other ....................................................................................... — (7) (9)
Income (loss) from discontinued operations before income taxes ........................................ 93 (98) (115)
Income tax expense (benefit) .................................................................... 28 (16) (27)
Income (loss) from discontinued operations, net of taxes ............................................... $ 65 $(82) $ (88)
The Company’s Consolidated Statements of Financial Position include total assets and total liabilities related to discontinued
businesses of $296 million and $125 million, respectively, at December 31, 2006 and $704 million and $436 million, respectively,
at December 31, 2005.
(1) Reflects the income or loss from discontinued real estate investments. In the third quarter of 2006, the Company recorded a $96 million gain on the sale
of wholly-owned real estate property.
(2) In the third quarter of 2006, the Company entered into a reinsurance transaction related to its Canadian Intermediate Weekly Premium (“IWP”) and
Individual Health (“IH”) operations, which resulted in these operations being accounted for as discontinued operations.
(3) In the third quarter of 2006, the Company completed the sale of its Philippine insurance operations.
(4) On October 4, 2005, the Company completed the sale of its Dryden Wealth Management business (“Dryden”), which offered financial advisory, private
banking and portfolio management services primarily to retail investors in Europe and Asia, to a subsidiary of Fortis N.V. Results for the year ended
December 31, 2005 include $49 million of transaction and transaction related costs related to the sale. Results for the year ended December 31, 2004
include a charge of $53 million for the impairment of goodwill associated with this business.
(5) International securities operations include the European retail transaction-oriented stockbrokerage and related activities of Prudential Securities Group,
Inc.
(6) The sale of the Company’s healthcare business to Aetna was completed in 1999. The loss the Company previously recorded upon the disposal of its
healthcare business was reduced in each of the years ended December 31, 2006, 2005 and 2004. The reductions were primarily the result of favorable
resolution of certain legal, regulatory and contractual matters.
Charges recorded in connection with the disposals of businesses include estimates that are subject to subsequent adjustment. It
is possible that such adjustments might be material to future results of operations of a particular quarterly or annual period.
PRUDENTIAL FINANCIAL, INC. 2006 ANNUAL REPORT
114