Prudential 2015 Annual Report Download - page 69

Year Ended December 31, 2014
PFI excluding
Closed Block
Division
Closed Block
Division Combined
Yield(1) Amount Yield(1) Amount Yield(1) Amount
($ in millions)
Fixed maturities ........................................................ 3.90% $ 8,762 5.18% $1,917 4.08% $10,679
Trading account assets supporting insurance liabilities .......................... 3.75 765 0.00 0 3.75 765
Equity securities ........................................................ 5.97 275 3.40 79 5.11 354
Commercial mortgage and other loans ...................................... 4.80 1,565 5.45 524 4.95 2,089
Policy loans ........................................................... 5.08 341 6.07 292 5.49 633
Short-term investments and cash equivalents ................................. 0.21 26 1.03 8 0.25 34
Other investments ...................................................... 9.10 753 13.35 342 10.11 1,095
Gross investment income before investment expenses ...................... 4.04 12,487 5.54 3,162 4.28 15,649
Investment expenses ................................................ (0.14) (362) (0.27) (155) (0.16) (517)
Investment income after investment expenses ......................... 3.90% 12,125 5.27% 3,007 4.12% 15,132
Investment results of other entities and operations(2) ........................... 124 0 124
Total investment income ................................................. $12,249 $3,007 $15,256
Year Ended December 31, 2013
PFI excluding
Closed Block
Division
Closed Block
Division Combined
Yield(1) Amount Yield(1) Amount Yield(1) Amount
($ in millions)
Fixed maturities ........................................................ 3.79% $ 8,575 5.30% $2,002 4.01% $10,577
Trading account assets supporting insurance liabilities .......................... 3.79 775 0.00 0 3.79 775
Equity securities ........................................................ 6.19 256 3.40 82 5.16 338
Commercial mortgage and other loans ...................................... 5.04 1,403 5.85 552 5.24 1,955
Policy loans ........................................................... 4.82 316 6.01 295 5.33 611
Short-term investments and cash equivalents ................................. 0.22 30 0.95 7 0.25 37
Other investments ...................................................... 7.04 553 10.22 228 7.75 781
Gross investment income before investment expenses ...................... 3.89 11,908 5.52 3,166 4.15 15,074
Investment expenses ................................................ (0.12) (308) (0.26) (150) (0.14) (458)
Investment income after investment expenses ......................... 3.77% 11,600 5.26% 3,016 4.01% 14,616
Investment results of other entities and operations(2) ........................... 113 0 113
Total investment income ................................................. $11,713 $3,016 $14,729
(1) Yields are based on quarterly average carrying values except for fixed maturities, equity securities and securities lending activity. Yields for fixed
maturities are based on amortized cost. Yields for equity securities are based on cost. Yields for fixed maturities and short-term investments and cash
equivalents are calculated net of liabilities and rebate expenses corresponding to securities lending activity. Yields exclude investment income on assets
other than those included in invested assets. Prior period yields are presented on a basis consistent with the current period presentation.
(2) Includes investment income of our asset management operations and derivative operations, as described below under “—Invested Assets of Other
Entities and Operations.”
See below for a discussion of the change in the yields for PFI excluding the Closed Block division. The net investment income yield
attributable to the Closed Block division for 2015 decreased compared to 2014, due to lower income on non-coupon investments and lower
fixed income reinvestment rates.
The net investment income yield attributable to the Closed Block division for 2014 remained relatively flat compared to 2013, as
higher income from non-coupon investments was mostly offset by lower fixed income reinvestment rates.
Prudential Financial, Inc. 2015 Annual Report 67