Prudential 2015 Annual Report Download - page 37

Retirement segment products for the periods indicated. Net additions (withdrawals) are plan sales and participant deposits or additions, as
applicable, minus plan and participant withdrawals and benefits. Account values include both internally- and externally-managed client
balances as the total balances drive revenue for the Retirement segment. For more information on internally-managed balances, see “—
Asset Management.”
Year ended December 31,
2015 2014 2013
(in millions)
Full Service:
Beginning total account value .................................................................... $184,196 $173,502 $148,405
Deposits and sales ............................................................................. 25,684 23,934 20,677
Withdrawals and benefits ....................................................................... (21,559) (22,601) (18,711)
Change in market value, interest credited and interest income and other activity ............................ 640 9,361 23,131
Ending total account value .................................................................. $188,961 $184,196 $173,502
Net additions ................................................................................. $ 4,125 $ 1,333 $ 1,966
Institutional Investment Products:
Beginning total account value .................................................................... $179,641 $149,402 $141,435
Additions(1) ................................................................................. 15,572 43,293 17,294
Withdrawals and benefits ....................................................................... (15,388) (16,036) (9,951)
Change in market value, interest credited and interest income(2) ........................................ 3,476 5,833 1,081
Other(2)(3) .................................................................................. (3,337) (2,851) (457)
Ending total account value .................................................................. $179,964 $179,641 $149,402
Net additions ................................................................................. $ 184 $ 27,257 $ 7,343
(1) Additions primarily include: group annuities calculated based on premiums received; longevity reinsurance contracts calculated as the present value of
future projected benefits; and investment-only stable value contracts calculated as the fair value of customers’ funds held in a client-owned trust.
(2) Prior period amounts have been reclassified to conform to current period presentation.
(3) “Other” activity includes the effect of foreign exchange rate changes associated with our United Kingdom longevity reinsurance business and changes
in asset balances for externally-managed accounts.
2015 to 2014 Annual Comparison. The increase in full service account values primarily reflected the impact of net additions in
2015. The increase in net additions was driven by higher large plan sales and lower large plan lapses, partially offset by higher net
participant withdrawals.
The increase in institutional investment products account values reflected net additions resulting from significant pension risk transfer
transactions in 2015 and a bank-owned life insurance stable value transaction in the second quarter of 2015, partially offset by net
withdrawals of investment-only stable value accounts. The decrease in net additions was primarily driven by two significant longevity
reinsurance transactions in 2014.
2014 to 2013 Annual Comparison. The increase in full service account values primarily reflects the impact of equity market
appreciation in 2014 on the market value of customer funds. The decrease in net additions was primarily due to net participant withdrawals
in 2014 compared to net participant additions in the prior year, partially offset by an increase from net plan sales.
The increase in institutional investment products account values was primarily driven by $36.4 billion of additions resulting from
significant pension risk transfer transactions in 2014, including $31.7 billion of longevity reinsurance transactions. Partially offsetting this
increase was net withdrawals of investment-only stable value accounts, primarily driven by existing intermediary relationships reaching
saturation levels and an increase in the number of competitors in the marketplace.
Asset Management
Operating Results
The following table sets forth the Asset Management segment’s operating results for the periods indicated.
Year ended December 31,
2015 2014 2013
(in millions)
Operating results:
Revenues .......................................................................................... $2,944 $2,840 $2,678
Expenses .......................................................................................... 2,165 2,055 1,955
Adjusted operating income ............................................................................ 779 785 723
Realized investment gains (losses), net, and related adjustments ........................................... (4) (10) (6)
Equity in earnings of operating joint ventures and earnings attributable to noncontrolling interests ................ 50 41 90
Income (loss) from continuing operations before income taxes and equity in earnings of operating joint ventures ........ $ 825 $ 816 $ 807
Prudential Financial, Inc. 2015 Annual Report 35