Prudential 2006 Annual Report Download - page 13

SELECTED FINANCIAL DATA
We derived the selected consolidated income statement data for the years ended December 31, 2006, 2005 and 2004 and the selected
consolidated balance sheet data as of December 31, 2006 and 2005 from our Consolidated Financial Statements included elsewhere herein.
We derived the selected consolidated income statement data for the years ended December 31, 2003 and 2002 and the selected consolidated
balance sheet data as of December 31, 2004, 2003 and 2002 from consolidated financial statements not included herein.
On June 1, 2006, we acquired the variable annuity business of The Allstate Corporation through a reinsurance transaction. Results
presented below include the results of this business from the date of acquisition.
The 2005 income tax provision includes a benefit of $720 million from reduction of tax liabilities in connection with the Internal
Revenue Service examination of our tax returns for the years 1997 through 2001.
On April 1, 2004, we acquired the retirement business of CIGNA Corporation. Results presented below include the results of this
business from the date of acquisition.
On July 1, 2003, we completed an agreement with Wachovia Corporation, or Wachovia, to combine each company’s respective retail
securities brokerage and clearing operations forming a joint venture, Wachovia Securities. We have a 38% ownership interest in the joint
venture, while Wachovia owns the remaining 62%. The transaction included our securities brokerage operations but did not include our
equity sales, trading and research operations. As part of the transaction we retained certain assets and liabilities related to the contributed
businesses, including liabilities for certain litigation and regulatory matters. We account for our 38% ownership of the joint venture under
the equity method of accounting; periods prior to July 1, 2003, continue to reflect the results of our previously wholly owned securities
brokerage operations on a fully consolidated basis.
On May 1, 2003, we acquired Skandia U.S. Inc., which included American Skandia, Inc. Results presented below include the results
of American Skandia from the date of acquisition.
Our Gibraltar Life operations use a November 30 fiscal year end. Consolidated balance sheet data as of December 31, 2006, 2005,
2004, 2003 and 2002 includes Gibraltar Life assets and liabilities as of November 30. Consolidated income statement data for 2006, 2005,
2004, 2003 and 2002 includes Gibraltar Life results for the twelve months ended November 30, 2006, 2005, 2004, 2003 and 2002,
respectively.
We have made several dispositions that materially affect the comparability of the data presented below. In the fourth quarter of 2003,
we completed the sale of our property and casualty insurance companies that operated nationally in 48 states outside of New Jersey, and the
District of Columbia, to Liberty Mutual Group, as well as our New Jersey property and casualty insurance companies to Palisades Group.
Results for 2003 include a pre-tax loss of $491 million related to the disposition of these businesses. In the fourth quarter of 2000, we
terminated the capital markets activities of Prudential Securities. This business had pre-tax income of $287 million in 2003, including the
gain from a $332 million settlement of an arbitration award and a pre-tax loss of $36 million in 2002. In 2000, we sold Gibraltar Casualty
Company, a commercial property and casualty insurer. We incurred losses of $81 million in 2003 and $79 million in 2002 under a stop-loss
agreement we entered into at the time of sale.
PRUDENTIAL FINANCIAL, INC. 2006 ANNUAL REPORT
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