Prudential 2007 Annual Report Download - page 126

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PRUDENTIAL FINANCIAL, INC.
Notes to Consolidated Financial Statements
4. INVESTMENTS (continued)
Net Unrealized Investment Gains (Losses)
Net unrealized investment gains and losses on securities classified as “available for sale” and certain other long-term investments and
other assets are included in the Consolidated Statements of Financial Position as a component of “Accumulated other comprehensive
income (loss).” Changes in these amounts include reclassification adjustments to exclude from “Other comprehensive income (loss)” those
items that are included as part of “Net income” for a period that had been part of “Other comprehensive income (loss)” in earlier periods.
The amounts for the years ended December 31, are as follows:
Net
Unrealized
Gains (Losses)
On
Investments(1)
Deferred
Policy
Acquisition
Costs and
Valuation
of Business
Acquired
Future
Policy
Benefits
Policyholders’
Dividends
Deferred
Income Tax
(Liability)
Benefit
Accumulated
Other
Comprehensive
Income (Loss)
Related To Net
Unrealized
Investment
Gains (Losses)
(in millions)
Balance, December 31, 2004 ............................ $8,365 $(372) $(1,794) $(3,141) $(1,037) $2,021
Net investment gains (losses) on investments arising during the
period ............................................ (1,075) — — — 385 (690)
Reclassification adjustment for (gains) losses included in net
income ............................................ (791) — — — 283 (508)
Impact of net unrealized investment (gains) losses on deferred
policy acquisition costs and valuation of business acquired . . . — 152 — — (54) 98
Impact of net unrealized investment (gains) losses on future
policy benefits ...................................... — — 167 — (57) 110
Impact of net unrealized investment (gains) losses on
policyholders’ dividends .............................. — — — 839 (294) 545
Balance, December 31, 2005 ............................ 6,499 (220) (1,627) (2,302) (774) 1,576
Net investment gains (losses) on investments arising during the
period ............................................ (1,007) — — — 349 (658)
Reclassification adjustment for (gains) losses included in net
income ............................................ (389) — — — 135 (254)
Impact of net unrealized investment (gains) losses on deferred
policy acquisition costs and valuation of business acquired . . . — 47 — — (17) 30
Impact of net unrealized investment (gains) losses on future
policy benefits ...................................... — — 299 — (105) 194
Impact of net unrealized investment (gains) losses on
policyholders’ dividends .............................. — — — 436 (153) 283
Balance, December 31, 2006 ............................ 5,103 (173) (1,328) (1,866) (565) 1,171
Net investment gains (losses) on investments arising during the
period ............................................ (1,322) — — — 433 (889)
Reclassification adjustment for (gains) losses included in net
income ............................................ (756) — — — 248 (508)
Impact of net unrealized investment (gains) losses on deferred
policy acquisition costs and valuation of business acquired . . . — 55 — — (19) 36
Impact of net unrealized investment (gains) losses on future
policy benefits ...................................... — — 86 — (30) 56
Impact of net unrealized investment (gains) losses on
policyholders’ dividends .............................. — — — 820 (286) 534
Balance, December 31, 2007 ............................ $3,025 $(118) $(1,242) $(1,046) $ (219) $ 400
(1) Includes cash flow hedges. See Note 19 for information on cash flow hedges.
124 Prudential Financial 2007 Annual Report