Prudential 2007 Annual Report Download - page 128

PRUDENTIAL FINANCIAL, INC.
Notes to Consolidated Financial Statements
4. INVESTMENTS (continued)
The gross unrealized losses at December 31, 2007 and 2006 are composed of $2,476 million and $891 million related to investment
grade securities and $391 million and $127 million related to below investment grade securities, respectively. At December 31, 2007, $426
million of the gross unrealized losses represented declines in value of greater than 20%, all of which had been in that position for less than
six months, as compared to $7 million at December 31, 2006 that represented declines in value of greater than 20%, substantially all of
which had been in that position for less than six months. At December 31, 2007, the $710 million of gross unrealized losses of twelve
months or more were concentrated in asset backed securities, and in the manufacturing and utilities sectors. At December 31, 2006, the
$656 million of gross unrealized losses of twelve months or more were concentrated in the manufacturing, utilities and services sectors. In
accordance with its policy described in Note 2, the Company concluded that an adjustment for other-than-temporary impairments for these
securities was not warranted at December 31, 2007 or 2006.
Duration of Gross Unrealized Loss Positions for Equity Securities
The following table shows the fair value and gross unrealized losses aggregated by length of time that individual equity securities have
been in a continuous unrealized loss position, at December 31:
2007
Less than twelve months Twelve months or more Total
Fair Value
Unrealized
Losses Fair Value
Unrealized
Losses Fair Value
Unrealized
Losses
(in millions)
Equity securities, available for sale ................. $5,725 $403 $5 $— $5,730 $403
2006
Less than twelve months Twelve months or more Total
Fair Value
Unrealized
Losses Fair Value
Unrealized
Losses Fair Value
Unrealized
Losses
(in millions)
Equity securities, available for sale ................. $1,721 $115 $134 $8 $1,855 $123
At December 31, 2007, $154 million of the gross unrealized losses represented declines of greater than 20%, substantially all of which
had been in that position for less than six months. At December 31, 2006, $25 million of the gross unrealized losses represented declines of
greater than 20%, substantially all of which had been in that position for less than six months. In accordance with its policy described in
Note 2, the Company concluded that an adjustment for other-than-temporary impairments for these securities was not warranted at
December 31, 2007 or 2006.
Duration of Gross Unrealized Loss Positions for Cost Method Investments
The following table shows the fair value and gross unrealized losses aggregated by length of time that individual cost method
investments have been in a continuous unrealized loss position, at December 31:
2007
Less than twelve months Twelve months or more Total
Fair Value
Unrealized
Losses Fair Value
Unrealized
Losses Fair Value
Unrealized
Losses
(in millions)
Cost Method Investments ......................... $47 $2 $35 $4 $82 $6
2006
Less than twelve months Twelve months or more Total
Fair Value
Unrealized
Losses Fair Value
Unrealized
Losses Fair Value
Unrealized
Losses
(in millions)
Cost Method Investments ......................... $43 $3 $6 $— $49 $3
The aggregate cost of the Company’s cost method investments included in “Other long-term investments” totaled $370 million and
$214 million at December 31, 2007 and 2006, respectively. In accordance with its policy described in Note 2, the Company concluded that
an adjustment for other-than-temporary impairments for these securities was not warranted at December 31, 2007 or 2006.
126 Prudential Financial 2007 Annual Report