Prudential 2012 Annual Report Download - page 39

The following table sets forth the component changes in assets under management by asset source for the periods indicated.
Institutional
Customers
Retail
Customers
General
Account
(in billions)
As of December 31, 2010 ....................................................................... $237.8 $110.6 $257.4
Net additions (withdrawals), excluding money market activity:
Third party(1) ........................................................................ 16.9 5.7 0
Affiliated(2)(3) ....................................................................... (2.8) 14.1 42.9
Total ........................................................................... 14.1 19.8 42.9
Market appreciation ....................................................................... 19.7 1.1 22.0
Other increases (decreases)(4) ............................................................... 0.2 (12.2) 4.4
As of December 31, 2011 ....................................................................... 271.8 119.3 326.7
Net additions (withdrawals), excluding money market activity:
Third party(1) ........................................................................ 17.2 12.8 0
Affiliated(2)(3) ....................................................................... (1.5) (6.2) 37.6
Total ........................................................................... 15.7 6.6 37.6
Market appreciation ....................................................................... 26.2 13.4 15.3
Other increases (decreases)(4) ............................................................... 0 (0.6) (5.0)
As of December 31, 2012 ....................................................................... $313.7 $138.7 $374.6
(1) Institutional third-party net additions include net additions into fixed income accounts of $6.4 billion and $10.0 billion related to investment-only stable
value products for the years ended December 31, 2012 and 2011, respectively.
(2) Retail affiliated net additions (withdrawals) primarily represent asset transfers in or (out) of fixed income funds due to the automatic rebalancing feature
within certain variable annuities products.
(3) General account affiliated net additions (withdrawals) includes net additions of $31.0 billion for the year ended December 31, 2012 from two significant
pension risk transfer transactions in the Retirement segment and net additions of $40.4 billion for the year ended December 31, 2011 from the
acquisition of the Star and Edison Businesses.
(4) Other includes the effect of foreign exchange rate changes and net money market activity. Other in 2011 also includes the sale of our investment in the
Afore XXI operating joint venture and transfers from the Retirement segment as a result of changes in the client contract form.
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,
2012 2011
(in millions)
Co-Investments:
Real estate ................................................................................................. $ 437 $ 464
Fixed income ............................................................................................... 54 30
Seed Investments:
Real estate ................................................................................................. 32 19
Public equity ............................................................................................... 230 208
Fixed income ............................................................................................... 223 209
Loans Secured by Investor Equity Commitments or Fund Assets:
Real estate secured by investor equity ........................................................................... 25 50
Private equity secured by investor equity ......................................................................... 0 61
Real estate secured by fund assets .............................................................................. 0 99
Total ................................................................................................. $1,001 $1,140
In addition to the strategic investments above, the Asset Management segment’s commercial mortgage operations maintains an
interim loan portfolio. See “—General Account Investments—Invested Assets of Other Entities and Operations—Commercial Mortgage
and Other Loans” below for additional details.
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,
2012 2011 2010
(in millions)
Operating results:
Revenues ....................................................................................... $3,367 $2,900 $2,817
Benefits and expenses ............................................................................. 2,983 2,418 2,335
Adjusted operating income ......................................................................... 384 482 482
Realized investment gains (losses), net, and related adjustments ........................................ (38) (21) (39)
Income from continuing operations before income taxes and equity in earnings of operating joint ventures .......... $ 346 $ 461 $ 443
Adjusted Operating Income
2012 to 2011 Annual Comparison. Adjusted operating income decreased $98 million including a $54 million unfavorable
comparative change from the impact of certain changes in the estimated profitability of the business on the amortization of DAC and
unearned revenue reserves (“URR”) as well as the impact on the reserve for the GMDB feature in certain contracts. These changes were
based on the annual review and update of economic and actuarial assumptions, which resulted in a net charge of $27 million in 2012 driven
by a reduction to long-term interest rate and equity return assumptions and a net benefit of $27 million in 2011, driven by more favorable
lapse and mortality experience.
Prudential Financial, Inc. 2012 Annual Report 37