Prudential 2012 Annual Report Download - page 176

PRUDENTIAL FINANCIAL, INC.
Notes to Consolidated Financial Statements
18. EMPLOYEE BENEFIT PLANS (continued)
Partnerships—The value of interests owned in partnerships is based on valuations of the underlying investments that include private
placements, structured debt, real estate, equities, fixed maturities, commodities and other investments.
Structured Debt (Gateway Recovery Trust)—The value is based primarily on unobservable inputs including probability weighted cash
flows and reinvestment yield assumptions.
Hedge Funds—The value of interests in hedge funds is based on the underlying investments that include equities, debt and other
investments.
Variable Life Insurance Policies—These assets are held in group and individual variable life insurance policies issued by Prudential
Insurance. Group policies are invested in Insurance Company Pooled Separate Accounts. Individual policies are invested in Registered
Investment Companies (Mutual Funds). The value of interest in these policies is the cash surrender value of the policies based on the
underlying investments.
Pension plan asset allocations in accordance with the investment guidelines are as follows:
As of December 31, 2012
Level 1 Level 2 Level 3 Total
(in millions)
U.S. Equities:
Pooled separate accounts(1) ................................................................ $ 0 $ 1,143 $ 0 $ 1,143
Common/collective trusts(1) ............................................................... 0 82 0 82
Subtotal ........................................................................ 1,225
International Equities:
Pooled separate accounts(2) ................................................................ 0 278 0 278
Common/collective trusts(3) ............................................................... 0 103 0 103
United Kingdom insurance pooled funds(4) ................................................... 0 69 0 69
Subtotal ........................................................................ 450
Fixed Maturities:
Pooled separate accounts(5) ................................................................ 0 1,076 32 1,108
Common/collective trusts(6) ............................................................... 0 567 0 567
U.S. government securities (federal):
Mortgage-backed .................................................................... 0 3 0 3
Other U.S. government securities ........................................................ 0 1,154 0 1,154
U.S. government securities (state & other) .................................................... 0 747 0 747
Non-U.S. government securities ............................................................ 0 14 0 14
United Kingdom insurance pooled funds(7) ................................................... 0 221 0 221
Corporate Debt:
Corporate bonds(8) ................................................................... 0 3,882 12 3,894
Asset-backed ....................................................................... 0 17 0 17
Collateralized Mortgage Obligations (CMO)(9) ............................................ 0 293 0 293
Interest rate swaps (Notional amount: $978) ................................................... 0 (4) 0 (4)
Guaranteed investment contract ............................................................. 0 22 0 22
Other(10) .............................................................................. 735 (4) 58 789
Unrealized gain (loss) on investment of securities lending collateral(11) ............................. 0 (44) 0 (44)
Subtotal ........................................................................ 8,781
Short-term Investments:
Pooled separate accounts .................................................................. 0 418 0 418
United Kingdom insurance pooled funds ...................................................... 0 0 0 0
Subtotal ........................................................................ 418
Real Estate:
Pooled separate accounts(12) ............................................................... 0 0 322 322
Partnerships ............................................................................ 0 0 185 185
Subtotal ........................................................................ 507
Other:
Partnerships ............................................................................ 0 0 598 598
Hedge funds ............................................................................ 0 0 707 707
Subtotal ........................................................................ 1,305
Total ...................................................................... $735 $10,037 $1,914 $12,686
174 Prudential Financial, Inc. 2012 Annual Report