Prudential 2011 Annual Report Download - page 46

Strategic Investments
The following table sets forth the strategic investments of the Asset Management segment at carrying value (including the value of
derivative instruments used to mitigate equity market and currency risk) by asset class and source as of the dates indicated.
December 31,
2011 2010
(in millions)
Co-Investments:
Real Estate ................................................................................................ $ 464 $ 361
Fixed Income .............................................................................................. 30 29
Seed Investments:
Real Estate ................................................................................................ 19 251
Public Equity ............................................................................................... 189 119
Fixed Income .............................................................................................. 200 102
Loans Secured by Investor Equity Commitments or Fund Assets:
Real Estate secured by Investor Equity ........................................................................... 50 2
Private Equity secured by Investor Equity ........................................................................ 61 14
Real Estate secured by Fund Assets ............................................................................. 99 198
Total ................................................................................................. $1,112 $1,076
Commercial Mortgage Interim Loan Portfolio
The following table sets forth information regarding the interim loan portfolio of the Asset Management segment’s commercial
mortgage operations as of the dates indicated.
December 31,
2011 2010
($ in millions)
Interim Loan Portfolio:
Principal balance of loans outstanding(1) ......................................................................... $648 $1,336
Allowance for credit or valuation-related losses .................................................................... $ 44 $ 168
Weighted average loan-to-value ratio(2)(3) ....................................................................... 93% 108%
Weighted average debt service coverage ratio(2) ................................................................... 1.52 1.24
(1) As of December 31, 2011 and 2010, excludes $10 million and $29 million, respectively, of commitments for future fundings that would need to be
disbursed if borrowers meet the conditions for these fundings and $44 million and $69 million, respectively, of commercial real estate held for sale
related to foreclosed interim loans.
(2) A stabilized value and projected net operating income are used in the calculation of the loan-to-value and debt service coverage ratios.
(3) For those loans where the loan amount is greater than the collateral value, the excess of the loan amount over the collateral value was $42 million and
$171 million as of December 31, 2011 and 2010, respectively.
U.S. Individual Life and Group Insurance Division
Individual Life
Operating Results
The following table sets forth the Individual Life segment’s operating results for the periods indicated.
Year ended December 31,
2011 2010 2009
(in millions)
Operating results:
Revenues .......................................................................................... $2,900 $2,815 $2,768
Benefits and expenses ................................................................................ 2,383 2,315 2,206
Adjusted operating income ............................................................................ 517 500 562
Realized investment gains (losses), net, and related adjustments(1) ........................................ (21) (39) 134
Income from continuing operations before income taxes and equity in earnings of operating joint ventures ............. $ 496 $ 461 $ 696
(1) Revenues exclude Realized investment gains (losses), net, and related adjustments. See “—Realized Investment Gains and Losses and General Account
Investments—Realized Investment Gains and Losses.”
Adjusted Operating Income
2011 to 2010 Annual Comparison. Adjusted operating income increased $17 million, from $500 million in 2010 to $517 million in
2011. Results for both periods include a benefit from lower amortization of deferred policy acquisition costs, net of related unearned
revenue reserves and net decreases in insurance reserves, reflecting updates of our actuarial assumptions based on annual reviews. The
annual reviews cover assumptions used in our estimates of total gross profits which form the basis for amortizing deferred policy
44 Prudential Financial, Inc. 2011 Annual Report