Prudential 2015 Annual Report Download - page 184

PRUDENTIAL FINANCIAL, INC.
Notes to Consolidated Financial Statements
are not active for identical or similar assets or liabilities, and other market observable inputs. The Company’s Level 2 assets and liabilities
include: fixed maturities (corporate public and private bonds, most government securities, certain asset-backed and mortgage-backed
securities, etc.), certain equity securities (mutual funds, which do not actively trade and are priced based on a NAV), certain commercial
mortgage loans, short-term investments and certain cash equivalents (primarily commercial paper), and certain OTC derivatives.
Level 3—Fair value is based on at least one significant unobservable input for the asset or liability. The assets and liabilities in this category
may require significant judgment or estimation in determining the fair value. The Company’s Level 3 assets and liabilities primarily include:
certain private fixed maturities and equity securities, certain manually priced public equity securities and fixed maturities, certain highly
structured OTC derivative contracts, certain commercial mortgage loans, certain consolidated real estate funds for which the Company is the
general partner and embedded derivatives resulting from certain products with guaranteed benefits.
Assets and Liabilities by Hierarchy Level––The tables below present the balances of assets and liabilities reported at fair value on a
recurring basis, as of the dates indicated.
As of December 31, 2015
Level 1 Level 2 Level 3 Netting(1) Total
(in millions)
Fixed maturities, available-for-sale:
U.S. Treasury securities and obligations of U.S. government authorities and agencies ........ $ 0 $ 18,517 $ 0 $ $ 18,517
Obligations of U.S. states and their political subdivisions ............................... 0 8,789 6 8,795
Foreign government bonds ....................................................... 0 83,590 123 83,713
U.S. corporate public securities ................................................... 0 75,163 205 75,368
U.S. corporate private securities ................................................... 0 29,750 694 30,444
Foreign corporate public securities ................................................. 0 28,510 44 28,554
Foreign corporate private securities ................................................ 0 18,859 279 19,138
Asset-backed securities(7) ....................................................... 0 6,178 4,048 10,226
Commercial mortgage-backed securities ............................................ 0 10,424 38 10,462
Residential mortgage-backed securities ............................................. 0 4,923 183 5,106
Subtotal .................................................................. 0 284,703 5,620 290,323
Trading account assets:(2)
U.S. Treasury securities and obligations of U.S. government authorities and agencies ........ 0 288 0 288
Obligations of U.S. states and their political subdivisions ............................... 0 189 0 189
Foreign government bonds ....................................................... 0 697 34 731
Corporate securities ............................................................ 0 23,125 203 23,328
Asset-backed securities(7) ....................................................... 0 749 596 1,345
Commercial mortgage-backed securities ............................................ 0 1,870 3 1,873
Residential mortgage-backed securities ............................................. 0 1,509 4 1,513
Equity securities ............................................................... 1,542 221 589 2,352
All other(3) ................................................................... 630 14,173 5 (11,447) 3,361
Subtotal .................................................................. 2,172 42,821 1,434 (11,447) 34,980
Equity securities, available-for-sale ................................................ 6,011 2,997 266 9,274
Commercial mortgage and other loans .............................................. 0 274 0 274
Other long-term investments ..................................................... 13 212 1,380 (10) 1,595
Short-term investments .......................................................... 6,776 711 0 7,487
Cash equivalents ............................................................... 4,834 9,374 0 14,208
Other assets ................................................................... 0 9 7 16
Subtotal excluding separate account assets ...................................... 19,806 341,101 8,707 (11,457) 358,157
Separate account assets(4) ....................................................... 43,076 214,838 27,656 285,570
Total assets ............................................................... $62,882 $555,939 $36,363 $(11,457) $643,727
Future policy benefits(5) ......................................................... $ 0 $ 0 $ 8,434 $ $ 8,434
Other liabilities ................................................................ 1 5,306 2 (5,276) 33
Notes issued by consolidated VIEs ................................................. 0 0 8,597 8,597
Total liabilities ............................................................ $ 1 $ 5,306 $17,033 $ (5,276) $ 17,064
182 Prudential Financial, Inc. 2015 Annual Report