Prudential 2015 Annual Report Download - page 138

PRUDENTIAL FINANCIAL, INC.
Notes to Consolidated Financial Statements
Years ended
December 31,
2015 2014 2013
(in millions)
STATEMENTS OF OPERATIONS
Total revenue(1) ....................................................................................... $4,356 $ 5,632 $4,013
Total expenses(2) ...................................................................................... (1,803) (1,654) (943)
Net earnings (losses) ............................................................................... $2,553 $ 3,978 $3,070
Equity in net earnings (losses) included above ............................................................... $ 216 $ 522 $ 255
Equity in net earnings (losses) of limited partnership interests not included above ................................... 32 72 77
Total equity in net earnings (losses) .................................................................... $ 248 $ 594 $ 332
(1) Revenue consists of income from investments in real estate, investments in securities and other income.
(2) Expenses consist primarily of interest expense, management fees, salary expenses and other expenses.
Net Investment Income
Net investment income for the years ended December 31, was from the following sources:
2015 2014 2013
(in millions)
Fixed maturities, available-for-sale(1) .................................................................... $10,347 $10,558 $10,541
Fixed maturities, held-to-maturity(1) ..................................................................... 202 185 125
Equity securities, available-for-sale ...................................................................... 337 354 337
Trading account assets ................................................................................ 1,205 1,074 963
Commercial mortgage and other loans .................................................................... 2,255 2,103 1,985
Policy loans ......................................................................................... 619 632 611
Short-term investments and cash equivalents ............................................................... 56 38 40
Other long-term investments ............................................................................ 717 1,050 710
Gross investment income .......................................................................... 15,738 15,994 15,312
Less: investment expenses ............................................................................. (909) (738) (583)
Net investment income ............................................................................ $14,829 $15,256 $14,729
(1) Includes income on credit-linked notes which are reported on the same financial line item as related surplus notes, as conditions are met for right to
offset.
Carrying value for non-income producing assets included $343 million in fixed maturities, $11 million in trading account assets
supporting insurance liabilities, $1 million in other trading, $5 million in other long-term investments and $10 million in commercial
mortgage and other loans as of December 31, 2015. Non-income producing assets represent investments that have not produced income for
the twelve months preceding December 31, 2015.
As of both December 31, 2015 and 2014, the Company had no significant low-income housing tax credits investments.
Realized Investment Gains (Losses), Net
Realized investment gains (losses), net, for the years ended December 31, were from the following sources:
2015 2014 2013
(in millions)
Fixed maturities ........................................................................................ $1,634 $1,194 $ (93)
Equity securities ....................................................................................... 451 512 444
Commercial mortgage and other loans ...................................................................... 37 110 79
Investment real estate ................................................................................... 40 (5) 2
Joint ventures and limited partnerships ...................................................................... (122) (15) 34
Derivatives(1) ......................................................................................... 1,970 (182) (5,688)
Other ................................................................................................ 15 22 16
Realized investment gains (losses), net .................................................................. $4,025 $1,636 $(5,206)
(1) Includes the offset of hedged items in qualifying effective hedge relationships prior to maturity or termination.
136 Prudential Financial, Inc. 2015 Annual Report