Prudential 2012 Annual Report Download - page 68

The following table sets forth the composition of our gross direct exposure to the Eurozone region, by country of incorporation,
attributable to the Financial Services Businesses, as of December 31, 2012.
Eurozone Gross Direct Exposure—Financial Services Businesses
December 31, 2012
Amortized Cost Fair Value
Country Sovereigns(6)
Financial
Institutions(7)
All
Other
Exposure
Total
Amortized
Cost Sovereigns(6)
Financial
Institutions(7)
All
Other
Exposure
Total
Fair
Value
(in millions)
Non-peripheral countries:
France ............................. $ 345 $ 656 $2,363 $ 3,364 $ 385 $ 634 $ 2,594 $ 3,613
Netherlands ......................... 25 744 2,668 3,437 26 802 2,822 3,650
Germany ........................... 639 281 903 1,823 727 303 951 1,981
Luxembourg ........................ 0 398 949 1,347 0 422 1,008 1,430
Other non-peripheral(1) ............... 132 123 545 800 139 123 579 841
Total non-peripheral exposure .............. 1,141 2,202 7,428 10,771 1,277 2,284 7,954 11,515
Peripheral countries:
Italy(2) ............................ 534 28 234 796 564 31 233 828
Ireland ............................. 0 120 467 587 0 127 495 622
Spain .............................. 31 15 115 161 32 15 110 157
Other peripheral(3) ................... 0 0 0 0 0 0 0 0
Total peripheral exposure .................. 565 163 816 1,544 596 173 838 1,607
International agencies(4) ................... 436 117 1,538 2,091 450 119 1,735 2,304
Total exposure(5) ........................ $2,142 $2,482 $9,782 $14,406 $2,323 $2,576 $10,527 $15,426
(1) Other non-peripheral countries include Austria, Belgium, Cyprus, Estonia, Finland, Malta, Slovakia, and Slovenia.
(2) Principally represents Italian government securities owned by our Italian insurance operations.
(3) Other peripheral countries include Greece and Portugal.
(4) International agencies include agencies such as Eurofima, European Investment Bank, Council of Europe Development, and Nordic Investment Bank,
where a single country of incorporation could not be determined.
(5) Of the $14,406 million of amortized cost represented above, 87% is related to fixed maturities, 8% is related to trading account assets supporting
insurance liabilities, and the remaining 5% is related to all other asset types.
(6) Sovereigns include local governments.
(7) Financial institutions include banking, brokerage, non-captive consumer and diversified finance, health insurance, life insurance, property and casualty
insurance, other finance and real estate investment trusts.
Our gross direct exposure to the Eurozone region attributable to the Closed Block Business was $4,241 million of amortized cost (fair
value, $4,688 million), as of December 31, 2012, of which $3,659 million (fair value, $4,068 million) represented non-peripheral exposure
and $582 million (fair value, $620 million) represented peripheral exposure. Approximately 12% and 13% of the non-peripheral and
peripheral exposure, respectively, was related to financial institutions, and less than 1% of each of the non-peripheral and peripheral
exposures was related to sovereigns. Of the $4,241 million of amortized cost represented above, 94% was related to fixed maturities, and
the remaining 6% was related to all other asset types.
Investment Results
The following tables set forth the income yield and investment income for each major investment category of our general account for
the periods indicated. The yields are based on net investment income as reported under U.S. GAAP and do not include adjustments, such as
settlements of duration management swaps that are included in adjusted operating income.
Year Ended December 31, 2012
Financial Services
Businesses
Closed Block
Business Combined
Yield(1) Amount Yield(1) Amount Yield(1) Amount
($ in millions)
Fixed maturities ........................................................ 3.72% $ 7,645 5.52% $2,143 3.64% $ 9,788
Trading account assets supporting insurance liabilities .......................... 3.98 778 0.00 0 3.98 778
Equity securities ........................................................ 6.14 249 3.34 84 5.07 333
Commercial mortgage and other loans ...................................... 5.48 1,375 6.38 589 5.72 1,964
Policy loans ........................................................... 4.73 293 6.03 304 5.31 597
Short-term investments and cash equivalents ................................. 0.23 33 1.24 7 0.24 40
Other investments ...................................................... 4.04 268 8.31 183 5.12 451
Gross investment income before investment expenses ...................... 3.79 10,641 5.68 3,310 4.12 13,951
Investment expenses ................................................ (0.12) (273) (0.27) (157) (0.15) (430)
Investment income after investment expenses ......................... 3.67% 10,368 5.41% 3,153 3.97% 13,521
Investment results of other entities and operations(2) ........................... 140 0 140
Total investment income ................................................. $10,508 $3,153 $13,661
66 Prudential Financial, Inc. 2012 Annual Report