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Prudential Financial 2001 Annual Report - page 59 / 172

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Prudential Financial, Inc.

Fixed Annuities: Beginning total account value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 2,926

$ 3,020

$ 3,249

Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Surrenders, withdrawals and exchange redemptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interest credited and other activity(4)(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

120 (216) 145

221 (361) 46

160 (425) 36

  • (1)

    Mutual funds and variable annuities include only those sold as retail investment products. Investments through defined contribution plan products are included with such products.

  • (2)

    Wrap-fee product assets include proprietary assets of $3.1 billion at December 31, 2001, $3.4 billion at December 31, 2000, and $3.5 billion at December 31, 1999.

  • (3)

    Excludes wrap-fee products.

  • (4)

    Includes maintenance and insurance charges assessed, net bonus payments credited to contract holder accounts, annuity benefits and other adjustments.

  • (5)

    Includes increases to policyholder account values as a result of policyholder credits issued in 2001 in connection with Prudential’s demutalization, amounting to $429 million for variable annuities and $157 million for fixed annuities.

2001 to 2000 Annual Comparison. Mutual fund and wrap-fee product assets under management amounted to $75.8 billion at December 31, 2001, a decrease of $1.6 billion, or 2%, from December 31, 2000. Mutual fund assets under management at December 31, 2001 amounted to $57.8 billion, essentially unchanged from December 31, 2000. Wrap-fee assets declined $1.7 billion, to $18.0 billion at December 31, 2001.

Mutual fund assets under management were essentially unchanged at December 31, 2001 from a year earlier, as declines in market values of existing customer accounts were essentially offset by our $1.4 billion net money market sales and net mutual fund sales, other than money market funds, of $576 million. We believe our net money market sales, both in 2001 and 2000, reflect customer response to the unfavorable performance of the equity securities markets subsequent to the early part of 2000. The $759 million increase in net mutual fund sales other than money market funds reflected increased gross sales that came primarily from third-party distribution of our mutual funds resulting from our participation in competitors’ products and distribution and a lower level of redemptions than that of 2000. Net sales of mutual funds from sub-advised relationships, which commenced in 2000, amounted to $1.2 billion in 2001 and $472 million in 2000.

Mutual Funds(1) and Wrap-fee Products(2): Mutual fund assets, excluding wrap-fee products: Beginning total mutual fund assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Sales (other than money market) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Redemptions (other than money market) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Reinvestment of distributions and change in market value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net money market sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$57,764 5,273 (4,697) (1,894) 1,363

$55,245 5,378 (5,561) 726 1,976

$53,412 3,773 (4,872) 3,744 (812)

Ending total mutual fund assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Wrap-fee product assets at end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

57,809 17,955

57,764 19,621

55,245 16,723

Total mutual fund and wrap-fee product assets at end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net mutual fund sales (redemptions) other than money market(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$75,764 $ 576

$77,385 $ (183)

$71,968 $ (1,099)

Variable Annuities(1): Beginning total account value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Sales, excluding exchanges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Exchanges sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Surrenders, withdrawals and exchange redemptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Change in market value, interest credited and other activity(4)(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$21,059 1,271 (2,356) (1,285)

$22,614 1,809 481 (2,989) (856)

$19,919 2,025 1,402 (3,432) 2,700

Ending total account value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net sales (redemptions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$18,689 $ (1,085)

$21,059 $ (699)

$22,614 $ (5)

Ending total account value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net sales (redemptions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Year Ended December 31, 2001 2000 1999 (in millions)

$

2,975

$ 2,926

$ 3,020

$

(96)

$ (140)

$ (265)

The decrease in wrap-fee assets during 2001 came primarily from declines in the market values of customers’ accounts. Net sales of wrap-fee products, which are distributed primarily by our Financial Advisors, decreased to

Prudential Financial 2001 Annual Report

57

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