Prudential 2015 Annual Report Download - page 137

PRUDENTIAL FINANCIAL, INC.
Notes to Consolidated Financial Statements
restructuring. As of both December 31, 2015 and 2014, there were no new troubled debt restructurings related to commercial mortgage and
other loans, and no payment defaults on commercial mortgage and other loans that were modified as a troubled debt restructuring within
the 12 months preceding. See Note 2 for additional information relating to the accounting for troubled debt restructurings.
For the years ended December 31, 2015 and 2014, there were $22 million and $0 million, respectively, of private debt commitments to
borrowers that have been involved in a troubled debt restructuring.
As of both December 31, 2015 and 2014, the Company did not have any foreclosed residential real estate property.
Other Long-Term Investments
The following table sets forth the composition of “Other long-term investments” at December 31 for the years indicated.
2015 2014
(in millions)
Joint ventures and limited partnerships:
Non-real estate-related .................................................................................. $6,447 $ 6,527
Real estate-related ...................................................................................... 1,085 1,018
Total joint ventures and limited partnerships ..................................................................... 7,532 7,545
Real estate held through direct ownership ........................................................................... 1,464 2,235
Other ........................................................................................................ 990 1,141
Total other long-term investments ......................................................................... $9,986 $10,921
In certain investment structures, the Company’s asset management business invests with other co-investors in an investment fund
referred to as a feeder fund. In these structures, the invested capital of several feeder funds is pooled together and used to purchase
ownership interests in another fund, referred to as a master fund. The master fund utilizes this invested capital and, in certain cases, other
debt financing, to purchase various classes of assets on behalf of its investors. Specialized industry accounting for investment companies
calls for the feeder fund to reflect its investment in the master fund as a single net asset equal to its proportionate share of the net assets of
the master fund, regardless of its level of interest in the master fund. In cases where the Company consolidates the feeder fund, it retains the
feeder fund’s net asset presentation and reports the consolidated feeder fund’s proportionate share of the net assets of the master fund in
“Other long-term investments,” with any unaffiliated investors’ noncontrolling interest in the feeder fund reported in “Other liabilities” or
“Noncontrolling interests.” The consolidated feeder funds’ investments in these master funds, reflected on this net asset basis, totaled $81
million and $82 million as of December 31, 2015 and 2014, respectively. There was no unaffiliated interest in the consolidated feeder funds
as of both December 31, 2015 and 2014, respectively, and the master funds had gross assets of $17,508 million and $12,666 million,
respectively, and gross liabilities of $16,920 million and $11,979 million, respectively, which are not included on the Company’s balance
sheet.
Equity Method Investments
The following tables set forth summarized combined financial information for significant joint ventures and limited partnership
interests accounted for under the equity method, including the Company’s investments in operating joint ventures that are described in
more detail in Note 7. Changes between periods in the tables below reflect changes in the activities within the joint ventures and limited
partnerships, as well as changes in the Company’s level of investment in such entities.
At December 31,
2015 2014
(in millions)
STATEMENT OF FINANCIAL POSITION
Total assets(1) ................................................................................................ $53,799 $50,602
Total liabilities(2) ............................................................................................. $13,610 $13,152
Partners’ capital .............................................................................................. 40,189 37,450
Total liabilities and partners’ capital ........................................................................... $53,799 $50,602
Total liabilities and partners’ capital included above .................................................................. $ 4,398 $ 4,599
Equity in limited partnership interests not included above .............................................................. 142 42
Carrying value ............................................................................................ $ 4,540 $ 4,641
(1) Assets consist primarily of investments in real estate, investments in securities and other miscellaneous assets.
(2) Liabilities consist primarily of third-party-borrowed funds, securities repurchase agreements and other miscellaneous liabilities.
Prudential Financial, Inc. 2015 Annual Report 135