Prudential 2011 Annual Report Download - page 85

December 31, 2010
Financial
Services
Businesses
Closed Block
Business Total % of Total
($ in millions)
Fixed Maturities:
Public, available-for-sale, at fair value ............................................ $124,577 $30,499 $155,076 56.3%
Public, held-to-maturity, at amortized cost ........................................ 3,940 0 3,940 1.4
Private, available-for-sale, at fair value ........................................... 23,108 14,678 37,786 13.7
Private, held-to-maturity, at amortized cost ........................................ 1,286 0 1,286 0.5
Trading account assets supporting insurance liabilities, at fair value ........................ 17,771 0 17,771 6.5
Other trading account assets, at fair value ............................................. 1,220 156 1,376 0.5
Equity securities, available-for-sale, at fair value ....................................... 4,135 3,593 7,728 2.8
Commercial mortgage and other loans, at book value .................................... 21,901 8,507 30,408 11.0
Policy loans, at outstanding balance ................................................. 5,290 5,377 10,667 3.9
Other long-term investments(1) ..................................................... 2,988 1,582 4,570 1.6
Short-term investments(2) ......................................................... 3,698 1,164 4,862 1.8
Total general account investments ............................................... 209,914 65,556 275,470 100.0%
Invested assets of other entities and operations(3) ....................................... 8,442 0 8,442
Total investments ............................................................ $218,356 $65,556 $283,912
(1) Other long-term investments consist of real estate and non-real estate-related investments in joint ventures and partnerships, investment real estate held
through direct ownership and other miscellaneous investments. For additional information regarding these investments, see “—Other Long-Term
Investments” below.
(2) Short-term investments have virtually no sub-prime exposure.
(3) Includes invested assets of trading and banking operations, real estate and relocation services and asset management operations. Excludes assets of our
asset management operations managed for third parties and those assets classified as “Separate account assets” on our balance sheet. For additional
information regarding these investments, see “—Invested Assets of Other Entities and Operations” below.
As of December 31, 2011, the average duration of our general account investment portfolio attributable to the domestic Financial
Services Businesses, including the impact of derivatives, is between 4 and 5 years. The general account investments attributable to the
Financial Services Businesses increased in 2011 primarily due to the acquisition of the Star and Edison Businesses, portfolio growth as a
result of reinvestment of net investment income, and a net increase in fair value driven by a decrease in interest rates. The general account
investments attributable to the Closed Block Business increased in 2011 primarily due to portfolio growth as a result of reinvestment of net
investment income and an increase in fair value driven by a decrease in interest rates, partially offset by net operating outflows. For
information regarding the methodology used in determining the fair value of our fixed maturities, see Note 20 to the Consolidated Financial
Statements.
We have substantial insurance operations in Japan, with 50% and 38% of our Financial Services Businesses’ general account
investments relating to our Japanese insurance operations as of December 31, 2011 and December 31, 2010, respectively. The following
table sets forth the composition of the investments of our Japanese insurance operations’ general account as of the dates indicated.
December 31,
2011 2010
(in millions)
Fixed Maturities:
Public, available-for-sale, at fair value ........................................................................ $111,857 $60,115
Public, held-to-maturity, at amortized cost ..................................................................... 3,743 3,940
Private, available-for-sale, at fair value ....................................................................... 5,020 3,304
Private, held-to-maturity, at amortized cost .................................................................... 1,364 1,286
Trading account assets supporting insurance liabilities, at fair value ..................................................... 1,732 1,518
Other trading account assets, at fair value ......................................................................... 1,496 702
Equity securities, available-for-sale, at fair value .................................................................... 1,932 1,612
Commercial mortgage and other loans, at book value ................................................................ 5,672 4,202
Policy loans, at outstanding balance .............................................................................. 2,873 2,083
Other long-term investments(1) ................................................................................. 2,892 1,320
Short-term investments ........................................................................................ 702 211
Total Japanese general account investments(2) ................................................................. $139,283 $80,293
(1) Other long-term investments consist of real estate and non-real estate-related investments in joint ventures and partnerships, investment real estate held
through direct ownership, derivatives, and other miscellaneous investments.
(2) Excludes assets classified as “Separate accounts assets” on our balance sheet.
As of December 31, 2011, the average duration of our general account investment portfolio related to our Japanese insurance
operations, including the impact of derivatives, was approximately 10 years. The increase in general account investments related to our
Japanese insurance operations in 2011 was primarily attributable to the impact of the acquisition of the Star and Edison Businesses, gains
Prudential Financial, Inc. 2011 Annual Report 83