Prudential 2003 Annual Report Download - page 125

PRUDENTIAL FINANCIAL, INC.
Notes to Consolidated Financial Statements
4. INVESTMENTS (continued)
The table below presents unrealized gains (losses) on investments by asset class at December 31,
2003 2002 2001
(in millions)
Fixed maturities ..................................................................... $7,750 $7,594 $2,478
Equity securities .................................................................... 602 (42) 20
Other investments ................................................................... (110) (106) (126)
Unrealized gains on investments ........................................................ $8,242 $7,446 $2,372
Duration of Gross Unrealized Loss Positions for Fixed Maturities
The following table shows the fair value and gross unrealized losses aggregated by investment category and
length of time that individual fixed maturity securities have been in a continuous unrealized loss position, as of
December 31, 2003:
Less than twelve months Twelve months or more Total
Fair Value
Unrealized
Losses Fair Value
Unrealized
Losses Fair Value
Unrealized
Losses
(in millions)
Fixed maturities(1)
U.S. Treasury securities and obligations
of U.S. government corporations and
agencies ....................... $ 1,642 $ 34 $ — $— $ 1,642 $ 34
Obligations of U.S. states and their
political subdivisions ............. 235 8 3 — 238 8
Foreign government bonds .......... 2,703 91 54 2 2,757 93
Corporate securities ................ 8,802 250 1,498 79 10,300 329
Mortgage-backed securities ......... 2,309 29 — — 2,309 29
Total ......................... $15,691 $412 $1,555 $81 $17,246 $493
(1) Includes $1,617 million of fair value and $26 million of gross unrealized losses at December 31, 2003 on securities classified as held to maturity,
which are not reflected in accumulated other comprehensive income.
As of December 31, 2003, gross unrealized losses on fixed maturities totaled $493 million comprising 1,023
issuers. Of this amount, there was $412 million in less than twelve months category comprising 922 issuers and $81
million in the greater than twelve months category comprising 101 issuers. The $493 million of gross unrealized losses
is comprised of $396 million related to investment grade securities and $97 million related to below investment grade
securities. Approximately $39 million of the total gross unrealized losses represented declines in value of greater than
20%, none of which had been in that position for a period of twelve months or more, and substantially all of which
were less than six months old. The $81 million of gross unrealized losses of twelve months or more were concentrated
in the retail, finance and manufacturing sectors and there were no individual issuers with gross unrealized losses
greater than $10 million. Based on a review of the above information in conjunction with other factors as outlined in
the policy surrounding other than temporary impairments (see Note 2), the Company has concluded that an adjustment
for other than temporary impairments is not warranted at December 31, 2003.
Prudential Financial 2003 Annual Report 123