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ý
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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New Jersey
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22-3703799
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(State or Other Jurisdiction of
Incorporation or Organization)
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(I.R.S. Employer
Identification Number)
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Title of Each Class
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Name of Each Exchange on Which Registered
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Common Stock, Par Value $.01
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New York Stock Exchange
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Large accelerated filer
x
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Accelerated filer
¨
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Non-accelerated filer
¨
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Smaller reporting company
¨
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Page
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PART I
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Item 1.
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Item 1A.
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Item 1B.
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Item 1C.
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Item 2.
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Item 3.
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Item 4.
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PART II
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Item 5.
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Item 6.
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Item 7.
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Item 7A.
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Item 8.
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Item 9.
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Item 9A.
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Item 9B.
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PART III
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Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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PART IV
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Item 15.
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Item 16.
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ITEM 1.
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BUSINESS
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•
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On July 1, 2013, we sold our wealth management solutions business to Envestnet, Inc. The contractual terms of the sale have been fulfilled.
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•
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In 2008, we announced our intention to exit our financial advisory business, which consisted of our investment in a retail securities brokerage and clearing operations joint venture which was sold on December 31, 2009. Certain expenses relating to the businesses we originally contributed to the joint venture were retained, primarily for litigation and regulatory matters.
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•
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In 2003, we sold our property and casualty insurance companies to Liberty Mutual Group (“Liberty Mutual”). We have reinsured Liberty Mutual for adverse loss development for specific property and casualty risks that they did not want to retain. We believe that we have adequately reserved for our remaining property and casualty obligations under these reinsurance contracts based on the current information available.
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•
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We ceased writing individual disability income policies in 1992, and a year later ceased writing hospital expense and major medical policies. Most of our individual disability income policies are non-cancelable; however, we reinsured all of these policies as of July 1999. For our hospital expense and major medical policies, the 1996 Health Insurance Portability and Accountability Act guarantees renewal beyond age 65. Under certain circumstances, with appropriate approvals from state regulatory authorities, we are permitted to change the premiums charged for these policies if we can demonstrate the premiums have not been sufficient to pay claims. We establish reserves in accordance with U.S. GAAP for future policyholder benefits and expenses.
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•
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We have not actively engaged in the assumed life reinsurance market in the United States since the early 1990s; however, we remain subject to mortality risk for certain assumed individual life insurance policies under the terms of the reinsurance treaties. We establish reserves in accordance with U.S. GAAP for future policyholder benefits and expenses.
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•
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the FRB and the FDIC jointly decide that the Company or a subsidiary of the Company shall be subject to the requirements or restrictions described above due to deficiencies identified in its resolution plan;
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the Company has failed to submit a resolution plan that adequately addresses the deficiencies identified by the FRB and FDIC for the two year period following the imposition of such requirements or restrictions; and
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•
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the FRB and FDIC jointly determine that the divestiture of such assets or operations is necessary to facilitate an orderly resolution of the Company in the event that the Company was to fail.
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•
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Dodd-Frank requires the FRB to promulgate regulations that would prohibit Designated Financial Companies from having a credit exposure to any unaffiliated company in excess of 25% of the Designated Financial Company’s capital stock and surplus.
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As a Designated Financial Company, we must seek pre-approval from the FRB for the acquisition of specified interests in certain companies engaged in financial activities.
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The Council may recommend that state insurance regulators or other regulators apply new or heightened standards and safeguards for activities or practices we and other insurers or other financial services companies engage in.
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•
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As a Designated Financial Company, we could be subject to additional capital requirements for, and other restrictions on, proprietary trading and sponsorship of, and investment in, hedge, private equity and other covered funds.
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•
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Prudential Advisors: We are taking the steps we believe are required to comply with the new “best interest contract exemption” for investment advice concerning retirement plans and IRAs, including recommendations to purchase products sold to IRAs, which constitutes a significant part of Prudential Advisors’ non-life insurance new business revenues. The Rules state that proprietary products may be sold to IRA owners if certain conditions are met, subject to significant new requirements for this type of sale, and we are implementing processes that we believe will comply with these requirements. The Rules will impose compliance and contract requirements and will give customers a new private right of action for breach of contract that in some circumstances may result in damages and liability under ERISA and the Internal Revenue Code for excise taxes, disgorgement of profit, and other possible remedies. The Rules will lead to changes to compensation and benefit structures, and possibly to our product offerings.
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•
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Annuities: Sales of variable annuities by our retail distributors, including Prudential Advisors, will be subject to the best interest contract exemption described above, but certain fixed annuities can be subject to a separate exemption or to the best interest contract exemption. As a result of the Rules, certain distributors are announcing that they will restrict the sale of certain types of annuities. In addition, we may need to alter our product design, offerings or pricing to meet the needs of certain distributors who may request changes to support their compliance with the Rules. We will need to monitor and limit certain wholesaling and other sales support and customer service activities to continue not to be classified as a fiduciary under the Rules.
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•
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Retirement: We are making certain changes to the asset allocation tools included in our product offerings, which may include illustrations based on specific investments, so that the tools are not expected to fall within the definition of acting as a fiduciary for plan clients. We are developing processes for IRA offerings to comply with the new best interest contract exemption referred to above in connection with recommendations to plan participants to roll assets over to an IRA or retain them in their employer’s retirement plan. In addition, we are making changes to relationships with sponsors and intermediaries for plans with less than $50 million in assets to continue not to be classified as a fiduciary under the Rules. Historically, the substantial majority of our earnings in the Retirement business have not come from IRA offerings, asset retention and consolidation activities, and plans with less than $50 million in assets.
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Asset Management: We may need to alter our product design, offerings or pricing in order to meet the needs of certain distributors of mutual funds who may request changes to support their compliance with the Rules. We will also need to monitor and limit certain wholesaling and other sales support and customer service activities to continue not be classified as a fiduciary under the Rules.
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•
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require notice to affected individuals, regulators and others if there is a breach of the security of certain personal information;
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require financial institutions and creditors to implement effective programs to detect, prevent, and mitigate identity theft;
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regulate the process by which financial institutions make telemarketing calls and send e-mail or fax messages to consumers and customers; and
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prescribe the permissible uses of certain personal information, including customer information and consumer report information.
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ITEM 1A.
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RISK FACTORS
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The profitability of many of our insurance and annuity products depends in part on the value of the separate accounts supporting these products, which can fluctuate substantially depending on the foregoing conditions.
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Market conditions resulting in reductions in the value of assets we manage or lower transaction volume have an adverse effect on the revenues and profitability of our asset management business, which depends on fees related primarily to the value of assets under management or transaction volume, and could decrease the value of our strategic investments.
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A change in market conditions, such as high inflation and high interest rates, could cause a change in consumer sentiment and behavior adversely affecting sales and persistency of our savings and protection products. Conversely, low inflation and low interest rates could cause persistency of these products to vary from that anticipated and adversely affect profitability (as further described below). Similarly, changing economic conditions and unfavorable public perception of financial institutions can influence customer behavior, including increasing claims or surrenders in certain product lines.
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Sales of our investment-based and asset management products and services may decline, and lapses and surrenders of certain insurance products and withdrawals of assets from investment products may increase if a market downturn, increased market volatility or other market conditions result in customers becoming dissatisfied with their investments or products.
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•
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A market decline could further result in guaranteed minimum benefits contained in many of our variable annuity products being higher than current account values or our pricing assumptions would support, requiring us to materially increase reserves for such products, and may cause customers to retain contracts in force in order to benefit from the guarantees, thereby increasing their cost to us. Any increased cost may or may not be offset by the favorable impact of greater persistency from prolonged fee streams. Our valuation of the liabilities for the minimum benefits contained in many of our variable annuity products requires us to consider the market perception of our risk of non-performance, and a decrease in our own credit spreads resulting from ratings upgrades or other events or market conditions could cause the recorded value of these liabilities to increase, which in turn could adversely affect our results of operations and financial position.
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Market conditions determine the availability and cost of the reinsurance protection we purchase. Accordingly, we may be forced to incur additional expenses for reinsurance or may not be able to obtain sufficient reinsurance on acceptable terms which could adversely affect the profitability of future business or our willingness to write future business.
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Derivative instruments we hold to hedge and manage foreign exchange risk, interest rate and equity risks associated with our products and businesses, and other risks might not perform as intended or expected resulting in higher realized losses and unforeseen stresses on liquidity. Market conditions can limit availability of hedging instruments, require us to post additional collateral, and also further increase the cost of executing product related hedges and such costs may not be recovered in the pricing of the underlying products being hedged. Our derivative-based hedging strategies also rely on the performance of counterparties to such derivatives. These counterparties may fail to perform for various reasons resulting in losses on uncollateralized positions.
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We have significant investment and derivative portfolios, including but not limited to corporate and asset-backed securities, foreign government securities (primarily those of the Japanese government), equities and commercial real estate. Economic conditions as well as adverse capital market conditions, including a lack of buyers in the marketplace, volatility, credit spread changes, benchmark interest rate changes, changes in foreign currency exchange rates and declines in value of underlying collateral may impact the credit quality, liquidity and value of our investments and derivatives, potentially resulting in higher capital charges and unrealized or realized losses. Valuations may include assumptions or estimates that may have significant period to period changes which could have a material adverse effect on our results of operations or financial condition.
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Opportunities for investment of available funds at appropriate returns may be limited, including due to the current low interest rate environment, a diminished securitization market or other factors, with possible negative impacts on our overall results. Limited opportunities for attractive investments may lead to holding cash for long periods of time and increased use of derivatives for duration management and other portfolio management purposes. The increased use of derivatives may increase the volatility of our U.S. GAAP results and our statutory capital.
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Regardless of market conditions, certain investments we hold, including private bonds, commercial mortgages and alternative asset classes (such as private equity, hedge funds and real estate) are relatively illiquid. If we needed to sell these investments, we may have difficulty doing so in a timely manner at a price that we could otherwise realize.
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Certain features of our products and components of investment strategies depend on active and liquid markets, and, if market liquidity is strained or the capacity of the financial markets to absorb our transactions is inadequate, these products may not perform as intended.
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•
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Fluctuations in our operating results as well as realized gains and losses on our investment and derivative portfolios may impact the Company’s tax profile and its ability to optimally utilize tax attributes.
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•
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Disruptions in individual market sectors within our investment portfolio could result in significant realized and unrealized losses. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—General Account Investments—General Account Investments of PFI excluding Closed Block Division” for a discussion of our exposure to certain market sectors.
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•
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Some of our products expose us to the risk that changes in interest rates will reduce the spread between the amounts that we are required to pay under the contracts and the rate of return we are able to earn on our general account investments supporting the contracts. When interest rates decline or remain low, as they have in recent years, we have to invest in lower-yielding instruments, potentially reducing net investment income and constraining our ability to offer certain products. Since many of our policies and contracts have guaranteed minimum interest crediting rates or limit the resetting of interest rates, the spreads could decrease or go negative. When interest rates rise, we may not be able to replace the assets in our general account as quickly with the higher-yielding assets needed to fund the higher crediting rates necessary to keep these products and contracts competitive. In addition, rising interest rates could cause a decline in the market value of fixed income assets the Company manages which in turn could result in lower asset management fees earned.
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•
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Changes in interest rates can also result in potential losses in our investment activities in which we borrow funds and purchase investments to earn additional spread income on the borrowed funds.
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When interest rates rise, policy loans and surrenders and withdrawals of life insurance policies and annuity contracts may increase as policyholders seek to buy products with perceived higher returns, requiring us to sell investment assets potentially resulting in realized investment losses, or requiring us to accelerate the amortization of deferred acquisition costs (“DAC”), deferred sales inducements (“DSI”) or value of business acquired (“VOBA”). In addition, increasing interest rates could cause capital strain due to lower solvency margin levels of our Japanese insurance subsidiaries because the carrying value of bonds classified as available-for-sale would decline while the carrying value of liabilities would generally remain unchanged. Also, an increase in interest rates accompanied by unexpected extensions of certain lower-yielding investments could reduce our profitability.
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•
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Changes in interest rates could subject us to increased collateral posting requirements related to hedging activities associated with some of our products.
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Changes in interest rates coupled with greater than expected client withdrawals for certain products can result in increased costs associated with our guarantees.
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•
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Changes in interest rates could increase our costs of financing.
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•
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Our mitigation efforts with respect to interest rate risk are primarily focused on maintaining an investment portfolio with diversified maturities that has a key rate duration profile that is approximately equal to the key rate duration profile of our estimated liability cash flow profile; however, this estimate of the liability cash flow profile is complex and could turn out to be inaccurate, especially when markets are volatile. In addition, there are practical and capital market limitations on our ability to accomplish this matching. Due to these and other factors we may need to liquidate investments prior to maturity at a loss in order to satisfy liabilities or be forced to reinvest funds in a lower rate environment. Although we take measures to manage the economic risks of investing in a changing interest rate environment, we may not be able to effectively mitigate, and we may sometimes choose based on economic considerations and other factors not to fully mitigate, the interest rate risk of our assets relative to our liabilities.
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•
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For certain of our products, a delay between the time we make changes in interest rate and other assumptions used for product pricing and the time we are able to reflect these assumptions in products available-for-sale could negatively impact the long-term profitability of products sold during the intervening period.
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•
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As a Designated Financial Company, Prudential Financial is subject to supervision and examination by the FRB and to stricter prudential standards, which include or may include requirements and limitations (many of which are the subject of ongoing rule-making) relating to capital, leverage, liquidity, stress-testing, overall risk management, credit exposure reporting, early remediation, managing interlocks, credit concentration, and resolution and recovery planning. If the FRB and the FDIC jointly determine that our resolution plan is deficient, they may impose more stringent capital, leverage, or liquidity requirements, or restrictions on our growth, activities, or operations. Any continuing failure to adequately remedy the deficiencies could result in the FRB and the FDIC jointly, in consultation with the Council, ordering divestiture of certain operations or assets. In addition, failure to meet defined measures of financial condition could result in substantial restrictions on our business and capital distributions. Dodd-Frank also requires us to be subject to stress tests to be promulgated by the FRB which could cause us to alter our business practices or affect the perceptions of regulators, rating agencies, customers, counterparties or investors of our financial strength. We cannot predict the requirements of the regulations not yet adopted or how the FRB will apply these prudential standards to us. As a Designated Financial Company, Prudential Financial must also seek pre-approval from the FRB for acquisition of certain companies engaged in financial activities.
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•
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As a Designated Financial Company, we could also be subject to additional capital requirements for, and other restrictions on, proprietary trading and sponsorship of, and investment in, hedge, private equity and other covered funds.
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•
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The Council could recommend new or heightened standards and safeguards for activities or practices in which we and other financial services companies engage. We cannot predict whether any such recommendations will be made or their effect on our business, results of operations, cash flows or financial condition.
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Dodd-Frank created a new framework for regulation of the OTC derivatives markets which could impact various activities of PGF, Prudential Financial and our subsidiaries, which use derivatives for various purposes (including hedging interest rate, foreign currency and equity market exposures). While many of the regulations required to be promulgated under Dodd-Frank or internationally with respect to derivatives markets have been adopted by the applicable regulatory agencies, the regulations that remain to be adopted or that have not been fully implemented could substantially increase the cost of hedging and related operations, affect the profitability of our products or their attractiveness to our clients or cause us to alter our hedging strategy or implementation thereof or increase and/or change the composition of the risks we do not hedge. In particular, we continue to monitor the potential hedging cost impacts of new initial margin requirements that we will be required to comply with in 2020, and increased capital requirements for derivatives transactions that may be imposed on banks that are our counterparties.
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•
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Title II of Dodd-Frank provides that a financial company such as Prudential Financial may be subject to a special orderly liquidation process outside the federal bankruptcy code, administered by the FDIC as receiver, upon a determination that the Company is in default or in danger of default and presents a systemic risk to U.S. financial stability, and our U.S. insurance subsidiaries would be subject to rehabilitation and liquidation proceedings under state insurance law. We cannot predict how creditors of Prudential Financial or its insurance and non-insurance subsidiaries, including the holders of Prudential Financial debt, will evaluate this potential or whether it will impact our financing or hedging costs.
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Catastrophic loss of life due to natural or man-made disasters could cause us to pay benefits at higher levels and/or materially earlier than anticipated and could lead to unexpected changes in persistency rates.
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•
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A man-made or natural disaster, such as an earthquake in Japan, could result in disruptions in our operations, losses in our investment portfolio or the failure of our counterparties to perform, or cause significant volatility in global financial markets.
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•
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A terrorist attack affecting financial institutions in the U. S. or elsewhere could negatively impact the financial services industry in general and our business operations, investment portfolio and profitability in particular.
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•
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Pandemic disease could have a severe adverse effect on Prudential Financial’s business. The potential impact of such a pandemic on Prudential Financial’s results of operations and financial position is variable, and would depend on numerous factors, including the effectiveness of vaccines and the rate of contagion, the regions of the world most affected and the effectiveness of treatment for the infected population.
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ITEM 1B.
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UNRESOLVED STAFF COMMENTS
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ITEM 1C.
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EXECUTIVE OFFICERS OF THE REGISTRANT
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Name
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Age
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Title
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Other Public Directorships
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John R. Strangfeld
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63
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Chairman, Chief Executive Officer and President
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None
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Mark B. Grier
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64
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Vice Chairman
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None
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Robert M. Falzon
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57
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Executive Vice President and Chief Financial Officer
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None
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Timothy P. Harris
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56
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Executive Vice President and General Counsel
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None
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Charles F. Lowrey
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59
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Executive Vice President and Chief Operating Officer, International Businesses
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None
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Stephen Pelletier
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63
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Executive Vice President and Chief Operating Officer, U.S. Businesses
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None
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Barbara G. Koster
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62
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Senior Vice President and Chief Information Officer
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None
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Richard F. Lambert
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60
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Senior Vice President and Chief Actuary
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None
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Nicholas C. Silitch
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55
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Senior Vice President and Chief Risk Officer
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None
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Scott G. Sleyster
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57
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Senior Vice President and Chief Investment Officer
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None
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Sharon C. Taylor
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62
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Senior Vice President, Human Resources
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New Jersey Resources
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ITEM 2.
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PROPERTIES
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ITEM 3.
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LEGAL PROCEEDINGS
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ITEM 4.
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MINE SAFETY DISCLOSURES
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ITEM 5.
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MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
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High
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Low
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Dividends
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2016:
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Fourth Quarter
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$
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107.10
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$
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81.43
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$
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0.70
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Third Quarter
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$
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81.65
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$
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68.74
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$
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0.70
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Second Quarter
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$
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79.71
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$
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66.93
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$
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0.70
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First Quarter
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$
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79.84
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$
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58.00
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$
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0.70
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2015:
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Fourth Quarter
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$
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87.69
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$
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75.40
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$
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0.70
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Third Quarter
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$
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91.68
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$
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74.22
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$
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0.58
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Second Quarter
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$
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91.47
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$
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79.13
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|
|
$
|
0.58
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First Quarter
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|
$
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90.11
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|
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$
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75.32
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|
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$
|
0.58
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Period
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Total Number of
Shares
Purchased(1)
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Average
Price Paid
per Share
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Total Number of Shares
Purchased as Part of
Publicly Announced
Programs(2)
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Approximate Dollar
Value of Shares That
May Yet Be Purchased
Under These
Programs(2)
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||||||
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October 1, 2016 through October 31, 2016
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2,480,429
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|
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$
|
84.09
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|
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2,477,474
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|
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||
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November 1, 2016 through November 30, 2016
|
|
2,198,777
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|
|
$
|
94.79
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|
|
2,197,943
|
|
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||
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December 1, 2016 through December 31, 2016
|
|
1,989,078
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|
|
$
|
104.98
|
|
|
1,984,520
|
|
|
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||
|
Total
|
|
6,668,284
|
|
|
$
|
93.85
|
|
|
6,659,937
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|
|
$
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0
|
|
|
(1)
|
Includes shares of Common Stock withheld from participants for income tax withholding purposes whose shares of restricted stock units vested during the period. Such restricted stock units were originally issued to participants pursuant to the Company’s Omnibus Incentive Plan.
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(2)
|
In December 2015, Prudential Financial’s Board of Directors authorized the Company to repurchase at management’s discretion up to $1.5 billion of its outstanding Common Stock during the period from January 1, 2016 through December 31, 2016. Effective January 1, 2016, this authorization superseded the Company’s previous $1.0 billion share repurchase authorization that was announced in June 2015, covering the period from July 1, 2015 through June 30, 2016. In August 2016, the Board of Directors authorized a $500 million increase to this authorization for calendar year 2016. As a result, the Company’s aggregate share repurchase authorization for the full year 2016 was $2.0 billion.
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ITEM 6.
|
SELECTED FINANCIAL DATA
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|
|
Year Ended December 31,
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||||||||||||||||||
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||
|
|
(in millions, except per share and ratio information)
|
||||||||||||||||||
|
Income Statement Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Revenues:
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Premiums
|
$
|
30,964
|
|
|
$
|
28,521
|
|
|
$
|
29,293
|
|
|
$
|
26,237
|
|
|
$
|
65,354
|
|
|
Policy charges and fee income
|
5,906
|
|
|
5,972
|
|
|
6,179
|
|
|
5,415
|
|
|
4,489
|
|
|||||
|
Net investment income
|
15,520
|
|
|
14,829
|
|
|
15,256
|
|
|
14,729
|
|
|
13,661
|
|
|||||
|
Asset management and service fees
|
3,752
|
|
|
3,772
|
|
|
3,719
|
|
|
3,485
|
|
|
3,053
|
|
|||||
|
Other income (loss)
|
443
|
|
|
0
|
|
|
(1,978
|
)
|
|
(3,199
|
)
|
|
(269
|
)
|
|||||
|
Realized investment gains (losses), net
|
2,194
|
|
|
4,025
|
|
|
1,636
|
|
|
(5,206
|
)
|
|
(1,441
|
)
|
|||||
|
Total revenues
|
58,779
|
|
|
57,119
|
|
|
54,105
|
|
|
41,461
|
|
|
84,847
|
|
|||||
|
Benefits and expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Policyholders’ benefits
|
33,632
|
|
|
30,627
|
|
|
31,587
|
|
|
26,733
|
|
|
65,131
|
|
|||||
|
Interest credited to policyholders’ account balances
|
3,761
|
|
|
3,479
|
|
|
4,263
|
|
|
3,111
|
|
|
4,234
|
|
|||||
|
Dividends to policyholders
|
2,025
|
|
|
2,212
|
|
|
2,716
|
|
|
2,050
|
|
|
2,176
|
|
|||||
|
Amortization of deferred policy acquisition costs
|
1,877
|
|
|
2,120
|
|
|
1,973
|
|
|
240
|
|
|
1,504
|
|
|||||
|
General and administrative expenses
|
11,779
|
|
|
10,912
|
|
|
11,807
|
|
|
11,011
|
|
|
11,094
|
|
|||||
|
Total benefits and expenses
|
53,074
|
|
|
49,350
|
|
|
52,346
|
|
|
43,145
|
|
|
84,139
|
|
|||||
|
Income (loss) from continuing operations before income taxes and equity in earnings of operating joint ventures
|
5,705
|
|
|
7,769
|
|
|
1,759
|
|
|
(1,684
|
)
|
|
708
|
|
|||||
|
Total income tax expense (benefit)
|
1,335
|
|
|
2,072
|
|
|
349
|
|
|
(1,058
|
)
|
|
213
|
|
|||||
|
Income (loss) from continuing operations before equity in earnings of operating joint ventures
|
4,370
|
|
|
5,697
|
|
|
1,410
|
|
|
(626
|
)
|
|
495
|
|
|||||
|
Equity in earnings of operating joint ventures, net of taxes
|
49
|
|
|
15
|
|
|
16
|
|
|
59
|
|
|
60
|
|
|||||
|
Income (loss) from continuing operations
|
4,419
|
|
|
5,712
|
|
|
1,426
|
|
|
(567
|
)
|
|
555
|
|
|||||
|
Income (loss) from discontinued operations, net of taxes
|
0
|
|
|
0
|
|
|
12
|
|
|
7
|
|
|
15
|
|
|||||
|
Net income (loss)
|
4,419
|
|
|
5,712
|
|
|
1,438
|
|
|
(560
|
)
|
|
570
|
|
|||||
|
Less: Income (loss) attributable to noncontrolling interests
|
51
|
|
|
70
|
|
|
57
|
|
|
107
|
|
|
50
|
|
|||||
|
Net income (loss) attributable to Prudential Financial, Inc.
|
$
|
4,368
|
|
|
$
|
5,642
|
|
|
$
|
1,381
|
|
|
$
|
(667
|
)
|
|
$
|
520
|
|
|
EARNINGS PER SHARE(1)
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Basic earnings per share—Common Stock:
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Income (loss) from continuing operations attributable to Prudential Financial, Inc.
|
$
|
9.85
|
|
|
$
|
12.37
|
|
|
$
|
3.23
|
|
|
$
|
(1.57
|
)
|
|
$
|
1.02
|
|
|
Income (loss) from discontinued operations, net of taxes
|
0.00
|
|
|
0.00
|
|
|
0.02
|
|
|
0.02
|
|
|
0.04
|
|
|||||
|
Net income (loss) attributable to Prudential Financial, Inc.
|
$
|
9.85
|
|
|
$
|
12.37
|
|
|
$
|
3.25
|
|
|
$
|
(1.55
|
)
|
|
$
|
1.06
|
|
|
Diluted earnings per share—Common Stock:
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Income (loss) from continuing operations attributable to Prudential Financial, Inc.
|
$
|
9.71
|
|
|
$
|
12.17
|
|
|
$
|
3.20
|
|
|
$
|
(1.57
|
)
|
|
$
|
1.01
|
|
|
Income (loss) from discontinued operations, net of taxes
|
0.00
|
|
|
0.00
|
|
|
0.03
|
|
|
0.02
|
|
|
0.04
|
|
|||||
|
Net income (loss) attributable to Prudential Financial, Inc.
|
$
|
9.71
|
|
|
$
|
12.17
|
|
|
$
|
3.23
|
|
|
$
|
(1.55
|
)
|
|
$
|
1.05
|
|
|
Dividends declared per share—Common Stock
|
$
|
2.80
|
|
|
$
|
2.44
|
|
|
$
|
2.17
|
|
|
$
|
1.73
|
|
|
$
|
1.60
|
|
|
Ratio of earnings to fixed charges(2)
|
2.10
|
|
|
2.64
|
|
|
1.25
|
|
|
0.00
|
|
1.11
|
|
||||||
|
|
As of December 31,
|
||||||||||||||||||
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||
|
|
(in millions)
|
||||||||||||||||||
|
Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Total investments excluding policy loans
|
$
|
432,485
|
|
|
$
|
405,535
|
|
|
$
|
408,274
|
|
|
$
|
386,407
|
|
|
$
|
394,007
|
|
|
Separate account assets
|
287,636
|
|
|
285,570
|
|
|
296,435
|
|
|
285,060
|
|
|
253,254
|
|
|||||
|
Total assets(3)
|
783,962
|
|
|
757,255
|
|
|
766,526
|
|
|
731,638
|
|
|
709,084
|
|
|||||
|
Future policy benefits and policyholders’ account balances
|
386,113
|
|
|
361,168
|
|
|
353,916
|
|
|
343,516
|
|
|
350,463
|
|
|||||
|
Separate account liabilities
|
287,636
|
|
|
285,570
|
|
|
296,435
|
|
|
285,060
|
|
|
253,254
|
|
|||||
|
Short-term debt(3)
|
1,133
|
|
|
1,216
|
|
|
3,839
|
|
|
2,668
|
|
|
2,484
|
|
|||||
|
Long-term debt(3)
|
18,041
|
|
|
19,594
|
|
|
19,702
|
|
|
23,411
|
|
|
24,578
|
|
|||||
|
Total liabilities(3)
|
737,874
|
|
|
715,332
|
|
|
724,177
|
|
|
695,757
|
|
|
669,972
|
|
|||||
|
Prudential Financial, Inc. equity
|
45,863
|
|
|
41,890
|
|
|
41,770
|
|
|
35,278
|
|
|
38,503
|
|
|||||
|
Noncontrolling interests
|
225
|
|
|
33
|
|
|
579
|
|
|
603
|
|
|
609
|
|
|||||
|
Total equity
|
$
|
46,088
|
|
|
$
|
41,923
|
|
|
$
|
42,349
|
|
|
$
|
35,881
|
|
|
$
|
39,112
|
|
|
(1)
|
For 2016 and 2015, represents consolidated earnings per share of Common Stock. For 2014, 2013, and 2012, represents earnings of the Company’s former Financial Services Businesses per share of Common Stock.
|
|
(2)
|
For purposes of this computation, earnings are defined as income from continuing operations before income taxes excluding undistributed income (loss) from equity method investments, fixed charges and interest capitalized. Also excludes earnings attributable to noncontrolling interests. Fixed charges are the sum of gross interest expense, interest credited to policyholders’ account balances and an estimated interest component of rent expense. Due to the Company’s loss for the year ended December 31, 2013, the ratio coverage was less than 1:1 and is therefore not presented. Additional earnings of $1,935 million would have been required for the year ended December 31, 2013 to achieve a ratio of 1:1.
|
|
(3)
|
Prior periods are presented on a basis consistent with the current period presentation, reflecting the adoption of ASU 2015-03 which was effective January 1, 2016.
|
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
|
|
Page
Number
|
|
|
|
Account Values with Adjustable Crediting Rates Subject to Guaranteed Minimums:
|
||||||||||||||||||||||
|
|
|
At
guaranteed
minimum
|
|
1 - 49
bps above
guaranteed
minimum
|
|
50 - 99
bps above
guaranteed
minimum
|
|
100 - 150
bps above
guaranteed
minimum
|
|
Greater than
150
bps above
guaranteed
minimum
|
|
Total
|
||||||||||||
|
|
|
($ in billions)
|
||||||||||||||||||||||
|
Range of Guaranteed Minimum Crediting Rates:
|
|
|
||||||||||||||||||||||
|
Less than 1.00%
|
|
$
|
0.6
|
|
|
$
|
0.9
|
|
|
$
|
0.3
|
|
|
$
|
0.0
|
|
|
$
|
0.0
|
|
|
$
|
1.8
|
|
|
1.00% - 1.99%
|
|
1.8
|
|
|
12.5
|
|
|
3.0
|
|
|
1.2
|
|
|
0.1
|
|
|
18.6
|
|
||||||
|
2.00% - 2.99%
|
|
2.0
|
|
|
0.5
|
|
|
1.8
|
|
|
1.1
|
|
|
0.1
|
|
|
5.5
|
|
||||||
|
3.00% - 4.00%
|
|
27.4
|
|
|
0.5
|
|
|
0.2
|
|
|
0.1
|
|
|
0.0
|
|
|
28.2
|
|
||||||
|
Greater than 4.00%
|
|
0.8
|
|
|
0.0
|
|
|
0.0
|
|
|
0.0
|
|
|
0.0
|
|
|
0.8
|
|
||||||
|
Total(1)
|
|
$
|
32.6
|
|
|
$
|
14.4
|
|
|
$
|
5.3
|
|
|
$
|
2.4
|
|
|
$
|
0.2
|
|
|
$
|
54.9
|
|
|
Percentage of total
|
|
60
|
%
|
|
26
|
%
|
|
10
|
%
|
|
4
|
%
|
|
0
|
%
|
|
100
|
%
|
||||||
|
(1)
|
Includes approximately $1.2 billion related to contracts that impose a market value adjustment if the invested amount is not held to maturity.
|
|
•
|
U.S. Retirement and Investment Management Market.
We will seek to continue our established leadership position in providing retirement and investment solutions for a U.S. market that is increasingly demanding cost-effective solutions that can be easily understood and accessed through technology-enabled distribution methods. There continues to be uncertainty around the impact the DOL fiduciary rule will have on sales and flows. However, we expect to benefit from our product diversification strategy and to improve our risk profile while meeting a broad range of client needs through ongoing product innovation. Our Individual Annuities business remains focused on helping its customers meet their investment and retirement needs. The recapture of living benefit risks from our reinsurance captive to our statutory insurance entities along with our enhanced risk management strategies are expected to contribute to higher free cash flows and improved capital stability, while also providing an ongoing benefit to our operating results. In our Retirement business we continue to provide products that respond to the needs of plan sponsors to manage risk and control their benefit costs, while ensuring we maintain appropriate pricing and return expectations under changing market conditions. We believe there are growth opportunities in pension risk transfer as companies are becoming more aware of the potential impact of longevity risk and higher Pension Benefit Guaranty Corporation premiums, although we expect growth will not be linear given the episodic nature of larger cases. While we continue to see fee and spread compression, we believe these are manageable headwinds. Our Asset Management business, or PGIM, is focused on meeting clients’ evolving needs and capturing opportunities in the marketplace. We are making substantial investments in our multi-manager model as well as in our talent, infrastructure and other distribution capabilities in order to capitalize on a business that we believe has strong growth opportunities.
|
|
•
|
U.S. Insurance Market.
We will continue to focus on writing high-quality business and expect to continue to benefit from expansion of our distribution channels and deepening our relationships with third-party distributors. Our Individual Life business is continuing to execute on its product diversification strategy in order to maintain a diversified product mix and an attractive risk profile. We are expanding the reach of our multichannel distribution network, including the Prudential Advisors channel, and are building predictive underwriting and other capabilities. In our Group Insurance business, we are seeing benefits from our multi-year underwriting efforts, especially in disability, and we are expanding our market segment focus to include mid-market clients. We are also continuing to focus on rigorous expense management, with an objective of further improving our return prospects over time.
|
|
•
|
International Markets.
We will continue to concentrate on deepening our presence in Japan and other markets in which we currently operate and expanding our distribution capabilities in emerging markets. Our death protection products with returns largely driven by mortality or expense margins help mitigate exposure of results to interest rates. We will continue to take steps to re-price or in some cases suspend sales of products most effected by low and negative rates in Japan. With regard to distribution, we are seeking modest growth in our Life Planner and Life Consultant count in Japan, as well as expansion of our third-party distribution networks. Furthermore, we have newer markets that we seek to develop in order to contribute more meaningfully to our growth over time, such as our insurance operation in Brazil, which we have built organically, and our investment in a leading provider of retirement services in Chile.
|
|
|
|
Year ended December 31,
|
||||||||||
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
|
|
|
|
|
|
|
||||||
|
|
|
(in millions)
|
||||||||||
|
Revenues
|
|
$
|
58,779
|
|
|
$
|
57,119
|
|
|
$
|
54,105
|
|
|
Benefits and expenses
|
|
53,074
|
|
|
49,350
|
|
|
52,346
|
|
|||
|
Income (loss) from continuing operations before income taxes and equity in earnings of operating joint ventures
|
|
5,705
|
|
|
7,769
|
|
|
1,759
|
|
|||
|
Income tax expense (benefit)
|
|
1,335
|
|
|
2,072
|
|
|
349
|
|
|||
|
Income (loss) from continuing operations before equity in earnings of operating joint ventures
|
|
4,370
|
|
|
5,697
|
|
|
1,410
|
|
|||
|
Equity in earnings of operating joint ventures, net of taxes
|
|
49
|
|
|
15
|
|
|
16
|
|
|||
|
Income (loss) from continuing operations
|
|
4,419
|
|
|
5,712
|
|
|
1,426
|
|
|||
|
Income (loss) from discontinued operations, net of taxes
|
|
0
|
|
|
0
|
|
|
12
|
|
|||
|
Net income (loss)
|
|
4,419
|
|
|
5,712
|
|
|
1,438
|
|
|||
|
Less: Income attributable to noncontrolling interests
|
|
51
|
|
|
70
|
|
|
57
|
|
|||
|
Net income (loss) attributable to Prudential Financial, Inc.
|
|
$
|
4,368
|
|
|
$
|
5,642
|
|
|
$
|
1,381
|
|
|
•
|
$980 million unfavorable variance, on a pre-tax basis, from adjustments to DAC and other costs as well as reserves, reflecting updates to the estimated profitability of our businesses, including the impact of our annual reviews and update of assumptions and other refinements. This excludes the impact associated with the variable annuity hedging program discussed below (see “—Results of Operations by Segment—U.S. Retirement Solutions and Investment Management Division—Individual Annuities” for additional information);
|
|
•
|
$972 million unfavorable variance, on a pre-tax basis, reflecting our decision to manage a portion of our interest rate risk through our Capital Protection Framework (see “—Results of Operations by Segment—Corporate and Other—Capital Protection Framework” for additional information); and
|
|
•
|
$479 million lower net pre-tax realized gains for PFI excluding the Closed Block division, and excluding the impact of the hedging program associated with certain variable annuities, which is discussed below (see “—Realized Investment Gains (Losses)” for additional information).
|
|
•
|
$737 million favorable impact of lower tax expense reflecting lower pre-tax income in 2016 compared to 2015; and
|
|
•
|
$660 million favorable variance, on a pre-tax basis, reflecting the net impact from changes in the value of our embedded derivatives and related hedge positions associated with certain variable annuities and other products (see “—Results of Operations by Segment—U.S. Retirement Solutions and Investment Management Division—Individual Annuities—Variable Annuity Risks and Risk Mitigants” for additional information).
|
|
•
|
$3,136 million higher net pre-tax earnings primarily resulting from the 2014 impact of foreign currency exchange rate movements on certain assets and liabilities within our Japanese insurance operations (see “—Impact of Foreign Currency Exchange Rates—Impact of products denominated in non-local currencies on U.S. GAAP earnings” for additional information);
|
|
•
|
$3,041 million favorable variance, on a pre-tax basis, reflecting our decision to manage a portion of our interest rate risk through our Capital Protection Framework (see “—Results of Operations by Segment—Corporate and Other—Capital Protection Framework” for additional information);
|
|
•
|
$615 million favorable variance, on a pre-tax basis, reflecting the net impact from changes in the value of our embedded derivatives and related hedge positions associated with certain variable annuities (see “—Results of Operations by Segment—U.S. Retirement Solutions and Investment Management Division—Individual Annuities—Variable Annuity Risks and Risk Mitigants” for additional information); and
|
|
•
|
$558 million favorable variance, on a pre-tax basis, from adjustments to DAC and other costs as well as reserves, reflecting updates to the estimated profitability of our businesses, including the impact of our annual reviews and update of assumptions and other refinements performed in the second quarter of 2015 and the third quarter of 2014. This excludes the impact associated with the variable annuity hedging program discussed above (see “—Results of Operations by Segment—U.S. Retirement Solutions and Investment Management Division—Individual Annuities” for additional information).
|
|
•
|
$1,723 million unfavorable impact of higher tax expense reflecting higher pre-tax income in 2015 compared to 2014; and
|
|
•
|
$1,436 million lower net pre-tax realized gains for PFI excluding the Closed Block division, and excluding the impact of the hedging program associated with certain variable annuities discussed above (see “—Realized Investment Gains (Losses)” for additional information).
|
|
|
|
Year ended December 31,
|
||||||||||
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
|
|
|
|
|
|
|
||||||
|
|
|
(in millions)
|
||||||||||
|
Adjusted operating income before income taxes by segment:
|
|
|
|
|
|
|
||||||
|
Individual Annuities
|
|
$
|
1,765
|
|
|
$
|
1,797
|
|
|
$
|
1,467
|
|
|
Retirement
|
|
1,012
|
|
|
931
|
|
|
1,215
|
|
|||
|
Asset Management
|
|
787
|
|
|
779
|
|
|
785
|
|
|||
|
Total U.S. Retirement Solutions and Investment Management division
|
|
3,564
|
|
|
3,507
|
|
|
3,467
|
|
|||
|
Individual Life
|
|
79
|
|
|
635
|
|
|
498
|
|
|||
|
Group Insurance
|
|
220
|
|
|
176
|
|
|
23
|
|
|||
|
Total U.S. Individual Life and Group Insurance division
|
|
299
|
|
|
811
|
|
|
521
|
|
|||
|
International Insurance
|
|
3,117
|
|
|
3,226
|
|
|
3,252
|
|
|||
|
Total International Insurance division
|
|
3,117
|
|
|
3,226
|
|
|
3,252
|
|
|||
|
Corporate and Other operations
|
|
(1,581
|
)
|
|
(1,313
|
)
|
|
(1,348
|
)
|
|||
|
Total Corporate and Other
|
|
(1,581
|
)
|
|
(1,313
|
)
|
|
(1,348
|
)
|
|||
|
Total segment adjusted operating income before income taxes
|
|
5,399
|
|
|
6,231
|
|
|
5,892
|
|
|||
|
Reconciling Items:
|
|
|
|
|
|
|
||||||
|
Realized investment gains (losses), net, and related adjustments(1)
|
|
989
|
|
|
2,258
|
|
|
(3,588
|
)
|
|||
|
Charges related to realized investment gains (losses), net(2)
|
|
(466
|
)
|
|
(679
|
)
|
|
(542
|
)
|
|||
|
Investment gains (losses) on trading account assets supporting insurance liabilities, net(3)
|
|
(17
|
)
|
|
(524
|
)
|
|
339
|
|
|||
|
Change in experience-rated contractholder liabilities due to asset value changes(4)
|
|
21
|
|
|
433
|
|
|
(294
|
)
|
|||
|
Divested businesses:
|
|
|
|
|
|
|
||||||
|
Closed Block division(5)
|
|
(132
|
)
|
|
58
|
|
|
0
|
|
|||
|
Other divested businesses(6)
|
|
(84
|
)
|
|
(66
|
)
|
|
167
|
|
|||
|
Equity in earnings of operating joint ventures and earnings attributable to noncontrolling interests(7)
|
|
(5
|
)
|
|
58
|
|
|
44
|
|
|||
|
Subtotal(8)
|
|
5,705
|
|
|
7,769
|
|
|
2,018
|
|
|||
|
Income (loss) from continuing operations before income taxes and equity in earnings of operating joint ventures for Closed Block Business(9)
|
|
0
|
|
|
0
|
|
|
(259
|
)
|
|||
|
Consolidated income (loss) from continuing operations before income taxes and equity in earnings of operating joint ventures
|
|
$
|
5,705
|
|
|
$
|
7,769
|
|
|
$
|
1,759
|
|
|
(1)
|
Represents “Realized investment gains (losses), net,” and related adjustments. See “—Realized Investment Gains and Losses” and Note 22 to our Consolidated Financial Statements for additional information.
|
|
(2)
|
Includes charges that represent the impact of realized investment gains (losses), net, on the amortization of DAC and other costs, and on changes in reserves. Also includes charges resulting from payments related to market value adjustment features of certain of our annuity products and the impact of realized investment gains (losses), net, on the amortization of unearned revenue reserves.
|
|
(3)
|
Represents net investment gains (losses) on trading account assets supporting insurance liabilities. See “—Experience-Rated Contractholder Liabilities, Trading Account Assets Supporting Insurance Liabilities and Other Related Investments.”
|
|
(4)
|
Represents changes in contractholder liabilities due to asset value changes in the pool of investments supporting these experience-rated contracts. See “—Experience-Rated Contractholder Liabilities, Trading Account Assets Supporting Insurance Liabilities and Other Related Investments.”
|
|
(5)
|
As a result of the Class B Repurchase, for the years ended December 31, 2016 and 2015, the Closed Block, along with certain related assets and liabilities, comprises the Closed Block division, which is accounted for as a divested business that is reported separately from the divested businesses that are included in Corporate and Other operations.
|
|
(6)
|
See “—Divested Businesses.”
|
|
(7)
|
Equity in earnings of operating joint ventures are included in adjusted operating income but excluded from income from continuing operations before income taxes and equity in earnings of operating joint ventures as they are reflected on an after-tax U.S. GAAP basis as a separate line in our Consolidated Statements of Operations. Earnings attributable to noncontrolling interests are excluded from adjusted operating income but included in income from continuing operations before taxes and equity earnings of operating joint ventures as they are reflected on a U.S. GAAP basis as a separate line in our Consolidated Statements of Operations. Earnings attributable to noncontrolling interests represent the portion of earnings from consolidated entities that relates to the equity interests of minority investors.
|
|
(8)
|
Amounts for the year ended December 31, 2014 represent “Income (loss) from continuing operations before income taxes and equity in earnings of operating joint ventures” of the Company’s former Financial Services Businesses, reflecting the existence of two classes of common stock and the separate reporting of the Financial Services Businesses and the Closed Block Business for each period.
|
|
(9)
|
Reflects the existence of two classes of common stock and the separate reporting of the Company’s former Financial Services Businesses and the Closed Block Business for the year ended December 31, 2014.
|
|
|
|
December 31,
|
||||||
|
|
|
2016
|
|
2015
|
||||
|
|
|
|
|
|
||||
|
|
|
(in billions)
|
||||||
|
Instruments hedging foreign currency exchange rate exposure on U.S. dollar-equivalent earnings:
|
|
|
|
|
||||
|
Forward currency hedging program(1)
|
|
$
|
1.6
|
|
|
$
|
1.9
|
|
|
Instruments hedging foreign currency exchange rate exposure on U.S. dollar-equivalent equity:
|
|
|
|
|
||||
|
U.S. dollar-denominated assets held in yen-based entities(2):
|
|
|
|
|
||||
|
Available-for-sale U.S. dollar-denominated investments, at amortized cost
|
|
12.6
|
|
|
13.0
|
|
||
|
Other
|
|
0.1
|
|
|
0.1
|
|
||
|
Subtotal
|
|
12.7
|
|
|
13.1
|
|
||
|
Dual currency and synthetic dual currency investments(3)
|
|
0.7
|
|
|
0.8
|
|
||
|
Total instruments hedging foreign currency exchange rate exposure on U.S. dollar-equivalent equity
|
|
13.4
|
|
|
13.9
|
|
||
|
Total hedges
|
|
$
|
15.0
|
|
|
$
|
15.8
|
|
|
(1)
|
Represents the notional amount of forward currency contracts outstanding.
|
|
(2)
|
Excludes $36.2 billion and $30.5 billion as of December 31, 2016 and 2015, respectively, of U.S. dollar-denominated assets supporting U.S. dollar-denominated liabilities related to U.S. dollar-denominated products issued by our Japanese insurance operations.
|
|
(3)
|
Dual currency and synthetic dual currency investments are held by our yen-based entities in the form of fixed maturities and loans with a yen-denominated principal component and U.S. dollar-denominated interest income. The amounts shown represent the present value of future U.S. dollar-denominated cash flows.
|
|
|
|
Year ended December 31,
|
||||||||||
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
|
|
|
|
|
|
|
||||||
|
|
|
(in millions)
|
||||||||||
|
Segment impacts of intercompany arrangements:
|
|
|
|
|
|
|
||||||
|
International Insurance
|
|
$
|
23
|
|
|
$
|
331
|
|
|
$
|
275
|
|
|
Retirement
|
|
9
|
|
|
0
|
|
|
0
|
|
|||
|
Asset Management
|
|
6
|
|
|
0
|
|
|
0
|
|
|||
|
Impact of intercompany arrangements(1)
|
|
38
|
|
|
331
|
|
|
275
|
|
|||
|
Corporate and Other operations:
|
|
|
|
|
|
|
||||||
|
Impact of intercompany arrangements(1)
|
|
(38
|
)
|
|
(331
|
)
|
|
(275
|
)
|
|||
|
Settlement gains (losses) on forward currency contracts(2)
|
|
38
|
|
|
286
|
|
|
293
|
|
|||
|
Net benefit (detriment) to Corporate and Other operations
|
|
0
|
|
|
(45
|
)
|
|
18
|
|
|||
|
Net impact on consolidated revenues and adjusted operating income
|
|
$
|
38
|
|
|
$
|
286
|
|
|
$
|
293
|
|
|
(1)
|
Represents the difference between non-U.S. dollar-denominated earnings translated on the basis of weighted average monthly currency exchange rates versus fixed currency exchange rates determined in connection with the foreign currency income hedging program.
|
|
(2)
|
As of December 31, 2016 and 2015, the notional amounts of these forward currency contracts within our Corporate & Other operations were $2.7 billion and $2.4 billion, respectively, of which $1.6 billion and $1.9 billion, respectively, were related to our Japanese insurance operations.
|
|
|
December 31, 2016
|
||
|
|
Increase/(Decrease) in DAC
|
||
|
|
(in millions)
|
||
|
Decrease in future mortality by 1%
|
$
|
50
|
|
|
Increase in future mortality by 1%
|
$
|
(50
|
)
|
|
|
|
December 31, 2016
|
||||||
|
|
|
Increase/
(Decrease) in DAC
|
|
Increase/
(Decrease) in DSI
|
||||
|
|
|
|
|
|
||||
|
|
|
(in millions)
|
||||||
|
Decrease in future rate of return by 100 bps
|
|
$
|
(378
|
)
|
|
$
|
(126
|
)
|
|
Increase in future rate of return by 100 bps
|
|
$
|
350
|
|
|
$
|
127
|
|
|
|
December 31, 2016
|
||
|
|
Increase/(Decrease) in VOBA
|
||
|
|
(in millions)
|
||
|
Decrease in future mortality by 1%
|
$
|
8
|
|
|
Increase in future mortality by 1%
|
$
|
(17
|
)
|
|
•
|
Valuation of investments, including derivatives;
|
|
•
|
Recognition of other-than-temporary impairments (“OTTI”); and
|
|
•
|
Determination of the valuation allowance for losses on commercial mortgage and other loans.
|
|
•
|
For most long-duration contracts, we utilize best estimate assumptions as of the date the policy is issued or acquired with provisions for the risk of adverse deviation, as appropriate. After the liabilities are initially established, we perform premium deficiency tests using best estimate assumptions as of the testing date without provisions for adverse deviation. If the liabilities determined based on these best estimate assumptions are greater than the net reserves (i.e., GAAP reserves net of any DAC, DSI or VOBA asset), the existing net reserves are adjusted by first reducing these assets by the amount of the deficiency or to zero through a charge to current period earnings. If the deficiency is more than these asset balances for insurance contracts, we then increase the net reserves by the excess, again through a charge to current period earnings. If a premium deficiency is recognized, the assumptions as of the premium deficiency test date are locked in and used in subsequent valuations and the net reserves continue to be subject to premium deficiency testing.
|
|
•
|
For certain reserves, such as those related to guaranteed minimum death benefits (“GMDB”), guaranteed minimum income benefits (“GMIB”) and no-lapse guarantees, we utilize current best estimate assumptions in establishing reserves. The reserves are subject to adjustments based on annual reviews of assumptions and quarterly adjustments for experience, including market performance, and the reserves may be adjusted through a benefit or charge to current period earnings.
|
|
•
|
For certain product guarantees, primarily certain optional living benefit features of the variable annuity products in our Individual Annuities segment, the benefits are accounted for as embedded derivatives, with fair values calculated as the present value of expected future benefit payments to contractholders less the present value of assessed rider fees attributable to the embedded derivative feature. Under U.S. GAAP, the fair values of these benefit features are based on assumptions a market participant would use in valuing these embedded derivatives. Changes in the fair value of the embedded derivatives are recorded quarterly through a benefit or charge to current period earnings.
|
|
|
December 31, 2016
|
||
|
|
Increase/(Decrease) in
GMDB/GMIB Reserves
|
||
|
|
(in millions)
|
||
|
Decrease in future rate of return by 100 bps
|
$
|
186
|
|
|
Increase in future rate of return by 100 bps
|
$
|
(143
|
)
|
|
|
December 31, 2016
|
||
|
|
Increase/(Decrease) in URR
|
||
|
|
(in millions)
|
||
|
Decrease in future mortality by 1%
|
$
|
47
|
|
|
Increase in future mortality by 1%
|
$
|
(47
|
)
|
|
|
|
For the year ended December 31, 2016
|
||||||
|
|
|
Increase/(Decrease) in Net
Periodic Pension Cost
|
|
Increase/(Decrease) in Net
Periodic Other Postretirement
Cost
|
||||
|
|
|
|
|
|
||||
|
|
|
(in millions)
|
||||||
|
Increase in expected rate of return by 100 bps
|
|
$
|
(118
|
)
|
|
$
|
(15
|
)
|
|
Decrease in expected rate of return by 100 bps
|
|
$
|
118
|
|
|
$
|
15
|
|
|
|
|
For the year ended December 31, 2016
|
||||||
|
|
|
Increase/(Decrease) in Net
Periodic Pension Cost
|
|
Increase/(Decrease) in Net
Periodic Other Postretirement
Cost
|
||||
|
|
|
|
|
|
||||
|
|
|
(in millions)
|
||||||
|
Increase in discount rate by 100 bps
|
|
$
|
(114
|
)
|
|
$
|
(6
|
)
|
|
Decrease in discount rate by 100 bps
|
|
$
|
135
|
|
|
$
|
5
|
|
|
|
|
December 31, 2016
|
||||||
|
|
|
Increase/(Decrease) in
Pension Benefits Obligation
|
|
Increase/(Decrease) in
Accumulated Postretirement
Benefits Obligation
|
||||
|
|
|
|
|
|
||||
|
|
|
(in millions)
|
||||||
|
Increase in discount rate by 100 bps
|
|
$
|
(1,380
|
)
|
|
$
|
(178
|
)
|
|
Decrease in discount rate by 100 bps
|
|
$
|
1,599
|
|
|
$
|
195
|
|
|
|
|
Year ended December 31,
|
||||||||||
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
|
|
|
|
|
|
|
||||||
|
|
|
(in millions)
|
||||||||||
|
Total Individual Annuities(1):
|
|
|
|
|
|
|
||||||
|
Beginning total account value
|
|
$
|
152,945
|
|
|
$
|
158,664
|
|
|
$
|
154,140
|
|
|
Sales
|
|
8,054
|
|
|
8,780
|
|
|
10,008
|
|
|||
|
Surrenders and withdrawals
|
|
(7,881
|
)
|
|
(8,415
|
)
|
|
(8,852
|
)
|
|||
|
Net sales
|
|
173
|
|
|
365
|
|
|
1,156
|
|
|||
|
Benefit payments
|
|
(1,794
|
)
|
|
(1,910
|
)
|
|
(1,799
|
)
|
|||
|
Net flows
|
|
(1,621
|
)
|
|
(1,545
|
)
|
|
(643
|
)
|
|||
|
Change in market value, interest credited and other activity
|
|
9,012
|
|
|
(585
|
)
|
|
8,666
|
|
|||
|
Policy charges
|
|
(3,553
|
)
|
|
(3,589
|
)
|
|
(3,499
|
)
|
|||
|
Ending total account value
|
|
$
|
156,783
|
|
|
$
|
152,945
|
|
|
$
|
158,664
|
|
|
(1)
|
Includes variable and fixed annuities sold as retail investment products. Investments sold through defined contribution plan products are included with such products within the Retirement segment. Variable annuity account values were $153.3 billion, $149.4 billion and $155.1 billion as of December 31,
2016
,
2015
and
2014
, respectively. Fixed annuity account values were $3.5 billion, $3.5 billion and $3.6 billion as of December 31,
2016
,
2015
and
2014
, respectively.
|
|
|
|
Year ended December 31,
|
||||||||||
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
|
|
|
|
|
|
|
||||||
|
|
|
(in millions)
|
||||||||||
|
Operating results:
|
|
|
|
|
|
|
||||||
|
Revenues
|
|
$
|
4,666
|
|
|
$
|
4,695
|
|
|
$
|
4,710
|
|
|
Benefits and expenses
|
|
2,901
|
|
|
2,898
|
|
|
3,243
|
|
|||
|
Adjusted operating income
|
|
1,765
|
|
|
1,797
|
|
|
1,467
|
|
|||
|
Realized investment gains (losses), net, and related adjustments
|
|
2,031
|
|
|
1,588
|
|
|
521
|
|
|||
|
Related charges
|
|
68
|
|
|
(624
|
)
|
|
(137
|
)
|
|||
|
Income (loss) from continuing operations before income taxes and equity in earnings of operating joint ventures
|
|
$
|
3,864
|
|
|
$
|
2,761
|
|
|
$
|
1,851
|
|
|
|
|
As of December 31,
|
||
|
|
|
2016
|
||
|
|
|
|
||
|
|
|
(in millions)
|
||
|
U.S. GAAP liability (including non-performance risk)
|
|
$
|
8,179
|
|
|
Non-performance risk adjustment
|
|
7,136
|
|
|
|
Subtotal
|
|
15,315
|
|
|
|
Adjustments including risk margins and valuation methodology differences
|
|
(5,663
|
)
|
|
|
Economic liability managed by ALM strategy
|
|
$
|
9,652
|
|
|
•
|
Different valuation methodologies in measuring the liability we intend to cover with fixed income instruments and derivatives versus the liability reported under U.S. GAAP
—The valuation methodology utilized in estimating the economic liability we intend to defray with fixed income instruments and derivatives is different from that required to be utilized to measure the liability under U.S. GAAP. The valuation of the economic liability excludes certain items that are included within the U.S. GAAP liability, such as non-performance risk (“NPR”) (in order to maximize protection irrespective of the possibility of our own default), as well as risk margins (required by U.S. GAAP but different from our best estimate).
|
|
•
|
Different accounting treatment between liabilities and assets supporting those liabilities
—Under U.S. GAAP, changes in value of the embedded derivative liability and derivative instruments used to hedge a portion of the economic liability are immediately reflected in net income. In contrast, changes in fair value of fixed income instruments that support a portion of the economic liability are designated as available for sale and are not recorded in net income but rather are recorded as unrealized gains (losses) in other comprehensive income.
|
|
•
|
General hedge results
—For the derivative portion of the ALM strategy, the net hedging impact (the extent to which the changes in value of the hedging instruments offset the change in value of the portion of the economic liability we are hedging) may be impacted by a number of factors including: cash flow timing differences between our hedging instruments and the corresponding portion of the economic liability we are hedging, basis differences attributable to actual underlying contractholder funds to be hedged versus hedgeable indices, rebalancing costs related to dynamic rebalancing of hedging instruments as markets move, certain elements of the economic liability that may not be hedged (including certain actuarial assumptions), and implied and realized market volatility on the hedge positions relative to the portion of the economic liability we seek to hedge.
|
|
(1)
|
Positive amount represents income; negative amount represents a loss.
|
|
(2)
|
Net hedging impact represents the difference between the change in fair value of the risk we seek to hedge using derivatives and the change in fair value of the derivatives utilized with respect to that risk.
|
|
(3)
|
Excludes $(1,523) million, $(585) million and $(3,036) million for
2016
,
2015
and
2014
, respectively, representing the impact of managing interest rate risk through capital management strategies other than hedging of particular exposures. Because this decision was based on the capital considerations of the Company as a whole, the impact was reported in Corporate and Other operations. See “—Corporate and Other.”
|
|
(4)
|
Represents risk margins and valuation methodology differences between the economic liability managed by the ALM strategy and the U.S. GAAP liability, as well as the portion of the economic liability managed with fixed income instruments.
|
|
|
|
December 31,
|
|||||||||||||||||||
|
|
|
2016
|
|
2015
|
|
2014
|
|||||||||||||||
|
|
|
Account Value
|
|
% of Total
|
|
Account Value
|
|
% of Total
|
|
Account Value
|
|
% of Total
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
|
(in millions)
|
|||||||||||||||||||
|
Living benefit/GMDB features(1):
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Both ALM strategy and automatic rebalancing(2)
|
|
$
|
106,585
|
|
|
69
|
%
|
|
$
|
106,018
|
|
|
71
|
%
|
|
$
|
110,953
|
|
|
72
|
%
|
|
ALM strategy only
|
|
9,409
|
|
|
6
|
%
|
|
9,994
|
|
|
7
|
%
|
|
11,395
|
|
|
7
|
%
|
|||
|
Automatic rebalancing only
|
|
1,168
|
|
|
1
|
%
|
|
1,393
|
|
|
1
|
%
|
|
1,771
|
|
|
1
|
%
|
|||
|
External reinsurance(3)
|
|
2,932
|
|
|
2
|
%
|
|
1,513
|
|
|
1
|
%
|
|
0
|
|
|
0
|
%
|
|||
|
PDI
|
|
7,926
|
|
|
5
|
%
|
|
4,664
|
|
|
3
|
%
|
|
2,777
|
|
|
2
|
%
|
|||
|
Other Products
|
|
2,730
|
|
|
2
|
%
|
|
2,870
|
|
|
2
|
%
|
|
3,324
|
|
|
2
|
%
|
|||
|
Total living benefit/GMDB features
|
|
$
|
130,750
|
|
|
|
|
$
|
126,452
|
|
|
|
|
$
|
130,220
|
|
|
|
|||
|
GMDB features and other(4)
|
|
22,545
|
|
|
15
|
%
|
|
22,989
|
|
|
15
|
%
|
|
24,863
|
|
|
16
|
%
|
|||
|
Total variable annuity account value
|
|
$
|
153,295
|
|
|
|
|
$
|
149,441
|
|
|
|
|
$
|
155,083
|
|
|
|
|||
|
(1)
|
All contracts with living benefit guarantees also contain GMDB features, covering the same insured contract.
|
|
(2)
|
Contracts with living benefits that are included in our ALM strategy, and have an automatic rebalancing feature.
|
|
(3)
|
Represents contracts subject to reinsurance transaction with external counterparty covering new business for the period April 1, 2015 through December 31, 2016. These contracts with living benefits also have an automatic rebalancing feature.
|
|
(4)
|
Includes contracts that have a GMDB feature and do not have an automatic rebalancing feature.
|
|
|
|
Year ended December 31,
|
||||||||||
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
|
|
|
|
|
|
|
||||||
|
|
|
(in millions)
|
||||||||||
|
Operating results(1):
|
|
|
|
|
|
|
||||||
|
Revenues
|
|
$
|
12,876
|
|
|
$
|
11,821
|
|
|
$
|
12,077
|
|
|
Benefits and expenses
|
|
11,864
|
|
|
10,890
|
|
|
10,862
|
|
|||
|
Adjusted operating income
|
|
1,012
|
|
|
931
|
|
|
1,215
|
|
|||
|
Realized investment gains (losses), net, and related adjustments
|
|
(281
|
)
|
|
255
|
|
|
591
|
|
|||
|
Related charges
|
|
(272
|
)
|
|
(1
|
)
|
|
(4
|
)
|
|||
|
Investment gains (losses) on trading account assets supporting insurance liabilities, net
|
|
(21
|
)
|
|
(581
|
)
|
|
151
|
|
|||
|
Change in experience-rated contractholder liabilities due to asset value changes
|
|
25
|
|
|
490
|
|
|
(106
|
)
|
|||
|
Income (loss) from continuing operations before income taxes and equity in earnings of operating joint ventures
|
|
$
|
463
|
|
|
$
|
1,094
|
|
|
$
|
1,847
|
|
|
(1)
|
Certain of our Retirement segment’s non-U.S. dollar-denominated earnings are from longevity reinsurance contracts, which are denominated in British pounds sterling, and are therefore subject to foreign currency exchange rate risk. Effective January 1, 2016, the financial results of our Retirement segment include the impact of an intercompany arrangement with our Corporate and Other operations designed to mitigate the impact of exchange rate changes on the segment’s U.S. dollar-equivalent earnings. For more information related to this intercompany arrangement, see “—Results of Operations—Impact of Foreign Currency Exchange Rates,” above.
|
|
|
|
Year ended December 31,
|
||||||||||
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
|
|
|
|
|
|
|
||||||
|
|
|
(in millions)
|
||||||||||
|
Full Service:
|
|
|
|
|
|
|
||||||
|
Beginning total account value
|
|
$
|
188,961
|
|
|
$
|
184,196
|
|
|
$
|
173,502
|
|
|
Deposits and sales
|
|
21,928
|
|
|
25,684
|
|
|
23,934
|
|
|||
|
Withdrawals and benefits
|
|
(20,127
|
)
|
|
(21,559
|
)
|
|
(22,601
|
)
|
|||
|
Change in market value, interest credited and interest income and other activity
|
|
12,040
|
|
|
640
|
|
|
9,361
|
|
|||
|
Ending total account value
|
|
$
|
202,802
|
|
|
$
|
188,961
|
|
|
$
|
184,196
|
|
|
Net additions (withdrawals)
|
|
$
|
1,801
|
|
|
$
|
4,125
|
|
|
$
|
1,333
|
|
|
Institutional Investment Products:
|
|
|
|
|
|
|
||||||
|
Beginning total account value
|
|
$
|
179,964
|
|
|
$
|
179,641
|
|
|
$
|
149,402
|
|
|
Additions(1)
|
|
16,140
|
|
|
15,572
|
|
|
43,293
|
|
|||
|
Withdrawals and benefits
|
|
(12,161
|
)
|
|
(15,388
|
)
|
|
(16,036
|
)
|
|||
|
Change in market value, interest credited and interest income
|
|
5,299
|
|
|
3,476
|
|
|
5,833
|
|
|||
|
Other(2)
|
|
(5,866
|
)
|
|
(3,337
|
)
|
|
(2,851
|
)
|
|||
|
Ending total account value
|
|
$
|
183,376
|
|
|
$
|
179,964
|
|
|
$
|
179,641
|
|
|
Net additions (withdrawals)
|
|
$
|
3,979
|
|
|
$
|
184
|
|
|
$
|
27,257
|
|
|
(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)
|
“Other” activity includes the effect of foreign exchange rate changes associated with our United Kingdom longevity reinsurance business, net presentation of $2,914 million in receipts offset by $2,364 million in payments related to funding agreements backed by commercial paper which typically have maturities of less than 90 days, and changes in asset balances for externally-managed accounts.
|
|
|
|
Year ended December 31,
|
||||||||||
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
|
|
|
|
|
|
|
||||||
|
|
|
(in millions)
|
||||||||||
|
Operating results(1):
|
|
|
|
|
|
|
||||||
|
Revenues
|
|
$
|
2,961
|
|
|
$
|
2,944
|
|
|
$
|
2,840
|
|
|
Expenses
|
|
2,174
|
|
|
2,165
|
|
|
2,055
|
|
|||
|
Adjusted operating income
|
|
787
|
|
|
779
|
|
|
785
|
|
|||
|
Realized investment gains (losses), net, and related adjustments
|
|
(6
|
)
|
|
(4
|
)
|
|
(10
|
)
|
|||
|
Equity in earnings of operating joint ventures and earnings attributable to noncontrolling interests
|
|
45
|
|
|
50
|
|
|
41
|
|
|||
|
Income (loss) from continuing operations before income taxes and equity in earnings of operating joint ventures
|
|
$
|
826
|
|
|
$
|
825
|
|
|
$
|
816
|
|
|
(1)
|
Certain of our Asset Management segment’s investment activities are based in currencies other than the U.S. dollar and are therefore subject to foreign currency exchange rate risk. Effective January 1, 2016, the financial results of our Asset Management segment include the impact of an intercompany arrangement with our Corporate and Other operations designed to mitigate the impact of exchange rate changes on the segment’s U.S. dollar-equivalent earnings. For more information related to this intercompany arrangement, see “—Results of Operations—Impact of Foreign Currency Exchange Rates,” above.
|
|
|
|
Year ended December 31,
|
||||||||||
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
|
|
|
|
|
|
|
||||||
|
|
|
(in millions)
|
||||||||||
|
Revenues by type:
|
|
|
|
|
|
|
||||||
|
Asset management fees by source:
|
|
|
|
|
|
|
||||||
|
Institutional customers
|
|
$
|
1,046
|
|
|
$
|
923
|
|
|
$
|
877
|
|
|
Retail customers(1)
|
|
707
|
|
|
764
|
|
|
720
|
|
|||
|
General account
|
|
474
|
|
|
448
|
|
|
424
|
|
|||
|
Total asset management fees
|
|
2,227
|
|
|
2,135
|
|
|
2,021
|
|
|||
|
Incentive fees
|
|
108
|
|
|
88
|
|
|
91
|
|
|||
|
Transaction fees
|
|
19
|
|
|
20
|
|
|
26
|
|
|||
|
Strategic investing
|
|
25
|
|
|
30
|
|
|
45
|
|
|||
|
Commercial mortgage(2)
|
|
103
|
|
|
103
|
|
|
100
|
|
|||
|
Other related revenues(3)
|
|
255
|
|
|
241
|
|
|
262
|
|
|||
|
Service, distribution and other revenues(4)
|
|
479
|
|
|
568
|
|
|
557
|
|
|||
|
Total revenues
|
|
$
|
2,961
|
|
|
$
|
2,944
|
|
|
$
|
2,840
|
|
|
(1)
|
Consists of fees from: individual mutual funds and variable annuities and variable life insurance separate account assets; funds invested in proprietary mutual funds through our defined contribution plan products; and third-party sub-advisory relationships. Revenues from fixed annuities and the fixed-rate accounts of variable annuities and variable life insurance are included in the general account.
|
|
(2)
|
Includes mortgage origination and spread lending revenues from our commercial mortgage origination and servicing business.
|
|
(3)
|
Future revenues will be impacted by the level and diversification of our strategic investments, the commercial real estate market, and other domestic and international markets.
|
|
(4)
|
Includes payments from Wells Fargo under an agreement dated as of July 30, 2004, implementing arrangements with respect to money market mutual funds in connection with the combination of our retail securities brokerage and clearing operations with those of Wells Fargo. The agreement extends for ten years after termination of the Wachovia Securities joint venture, which occurred on December 31, 2009. The revenue from Wells Fargo under this agreement was $84 million in
2016
, $78 million in
2015
and $77 million in
2014
.
|
|
|
|
December 31,
|
||||||||||
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
|
|
|
|
|
|
|
||||||
|
|
|
(in billions)
|
||||||||||
|
Assets Under Management (at fair market value):
|
|
|
|
|
|
|
||||||
|
Institutional customers:
|
|
|
|
|
|
|
||||||
|
Equity
|
|
$
|
59.3
|
|
|
$
|
59.9
|
|
|
$
|
63.8
|
|
|
Fixed income
|
|
332.2
|
|
|
289.9
|
|
|
270.0
|
|
|||
|
Real estate
|
|
40.0
|
|
|
39.3
|
|
|
36.2
|
|
|||
|
Institutional customers(1)
|
|
431.5
|
|
|
389.1
|
|
|
370.0
|
|
|||
|
Retail customers:
|
|
|
|
|
|
|
||||||
|
Equity
|
|
112.4
|
|
|
121.4
|
|
|
122.8
|
|
|||
|
Fixed income
|
|
94.5
|
|
|
73.7
|
|
|
61.0
|
|
|||
|
Real estate
|
|
2.3
|
|
|
2.2
|
|
|
2.3
|
|
|||
|
Retail customers(2)
|
|
209.2
|
|
|
197.3
|
|
|
186.1
|
|
|||
|
General account:
|
|
|
|
|
|
|
||||||
|
Equity
|
|
6.4
|
|
|
7.4
|
|
|
7.7
|
|
|||
|
Fixed income
|
|
391.3
|
|
|
367.5
|
|
|
368.1
|
|
|||
|
Real estate
|
|
1.7
|
|
|
1.8
|
|
|
1.6
|
|
|||
|
General account
|
|
399.4
|
|
|
376.7
|
|
|
377.4
|
|
|||
|
Total assets under management
|
|
$
|
1,040.1
|
|
|
$
|
963.1
|
|
|
$
|
933.5
|
|
|
(1)
|
Consists of third-party institutional assets and group insurance contracts.
|
|
(2)
|
Consists of: individual mutual funds and variable annuities and variable life insurance separate account assets; funds invested in proprietary mutual funds through our defined contribution plan products; and third-party sub-advisory relationships. Fixed annuities and the fixed-rate accounts of variable annuities and variable life insurance are included in the general account.
|
|
|
|
December 31,
|
||||||||||
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
|
|
|
|
|
|
|
||||||
|
|
|
(in billions)
|
||||||||||
|
Institutional Customers:
|
|
|
|
|
|
|
||||||
|
Beginning Assets Under Management
|
|
$
|
389.1
|
|
|
$
|
370.0
|
|
|
$
|
341.7
|
|
|
Net additions (withdrawals), excluding money market activity:
|
|
|
|
|
|
|
||||||
|
Third-party
|
|
5.3
|
|
|
21.2
|
|
|
0.7
|
|
|||
|
Affiliated
|
|
0.8
|
|
|
(4.8
|
)
|
|
1.8
|
|
|||
|
Total
|
|
6.1
|
|
|
16.4
|
|
|
2.5
|
|
|||
|
Market appreciation (depreciation)
|
|
24.2
|
|
|
2.6
|
|
|
26.9
|
|
|||
|
Other increases (decreases)(1)
|
|
12.1
|
|
|
0.1
|
|
|
(1.1
|
)
|
|||
|
Ending Assets Under Management
|
|
$
|
431.5
|
|
|
$
|
389.1
|
|
|
$
|
370.0
|
|
|
Retail Customers:
|
|
|
|
|
|
|
||||||
|
Beginning Assets Under Management
|
|
$
|
197.3
|
|
|
$
|
186.1
|
|
|
$
|
170.7
|
|
|
Net additions (withdrawals), excluding money market activity:
|
|
|
|
|
|
|
||||||
|
Third-party
|
|
0.4
|
|
|
0.8
|
|
|
4.7
|
|
|||
|
Affiliated
|
|
(0.5
|
)
|
|
9.2
|
|
|
(0.5
|
)
|
|||
|
Total
|
|
(0.1
|
)
|
|
10.0
|
|
|
4.2
|
|
|||
|
Market appreciation (depreciation)
|
|
9.1
|
|
|
1.4
|
|
|
11.6
|
|
|||
|
Other increases (decreases)(1)
|
|
2.9
|
|
|
(0.2
|
)
|
|
(0.4
|
)
|
|||
|
Ending Assets Under Management
|
|
$
|
209.2
|
|
|
$
|
197.3
|
|
|
$
|
186.1
|
|
|
General Account:
|
|
|
|
|
|
|
||||||
|
Beginning Assets Under Management
|
|
$
|
376.7
|
|
|
$
|
377.4
|
|
|
$
|
357.5
|
|
|
Net additions (withdrawals), excluding money market activity:
|
|
|
|
|
|
|
||||||
|
Third-party
|
|
0.0
|
|
|
0.0
|
|
|
0.0
|
|
|||
|
Affiliated(2)
|
|
8.9
|
|
|
(1.1
|
)
|
|
3.9
|
|
|||
|
Total
|
|
8.9
|
|
|
(1.1
|
)
|
|
3.9
|
|
|||
|
Market appreciation (depreciation)
|
|
13.3
|
|
|
(1.5
|
)
|
|
25.8
|
|
|||
|
Other increases (decreases)(1)
|
|
0.5
|
|
|
1.9
|
|
|
(9.8
|
)
|
|||
|
Ending Assets Under Management
|
|
$
|
399.4
|
|
|
$
|
376.7
|
|
|
$
|
377.4
|
|
|
(1)
|
Includes the effect of foreign exchange rate changes, net money market activity, impact of acquired business and transfers from/(to) the Retirement segment as a result of changes in the client contract form. The impact from foreign currency fluctuations, which primarily impact the general account, resulted in gains of $2.7 billion, losses of $1.7 billion and losses of $13.9 billion for the years ended
December 31, 2016
,
2015
and
2014
, respectively.
|
|
(2)
|
General account affiliated net additions (withdrawals) includes net additions of $4.6 billion from two significant pension risk transfer transactions in the Retirement segment for the year ended December 31, 2014.
|
|
|
|
December 31,
|
||||||
|
|
|
2016
|
|
2015
|
||||
|
|
|
|
|
|
||||
|
|
|
(in millions)
|
||||||
|
Co-Investments:
|
|
|
|
|
||||
|
Real estate
|
|
$
|
165
|
|
|
$
|
197
|
|
|
Fixed income
|
|
218
|
|
|
166
|
|
||
|
Seed Investments:
|
|
|
|
|
||||
|
Real estate
|
|
46
|
|
|
56
|
|
||
|
Public equity
|
|
441
|
|
|
300
|
|
||
|
Fixed income
|
|
279
|
|
|
214
|
|
||
|
Investments Secured by Investor Equity Commitments
|
|
0
|
|
|
42
|
|
||
|
Total
|
|
$
|
1,149
|
|
|
$
|
975
|
|
|
|
|
Year ended December 31,
|
||||||||||
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
|
|
|
|
|
|
|
||||||
|
|
|
(in millions)
|
||||||||||
|
Operating results:
|
|
|
|
|
|
|
||||||
|
Revenues
|
|
$
|
5,355
|
|
|
$
|
5,233
|
|
|
$
|
5,226
|
|
|
Benefits and expenses
|
|
5,276
|
|
|
4,598
|
|
|
4,728
|
|
|||
|
Adjusted operating income
|
|
79
|
|
|
635
|
|
|
498
|
|
|||
|
Realized investment gains (losses), net, and related adjustments
|
|
58
|
|
|
166
|
|
|
1,092
|
|
|||
|
Related charges
|
|
(223
|
)
|
|
(9
|
)
|
|
(341
|
)
|
|||
|
Income (loss) from continuing operations before income taxes and equity in earnings of operating joint ventures
|
|
$
|
(86
|
)
|
|
$
|
792
|
|
|
$
|
1,249
|
|
|
|
|
2016
|
|
2015
|
|
2014
|
||||||||||||||||||||||||||||||
|
|
|
Prudential
Advisors
|
|
Third
Party
|
|
Total
|
|
Prudential
Advisors
|
|
Third
Party
|
|
Total
|
|
Prudential
Advisors
|
|
Third
Party
|
|
Total
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
|
|
(in millions)
|
||||||||||||||||||||||||||||||||||
|
Term Life
|
|
$
|
32
|
|
|
$
|
168
|
|
|
$
|
200
|
|
|
$
|
33
|
|
|
$
|
171
|
|
|
$
|
204
|
|
|
$
|
36
|
|
|
$
|
145
|
|
|
$
|
181
|
|
|
Guaranteed Universal Life(1)
|
|
24
|
|
|
219
|
|
|
243
|
|
|
31
|
|
|
189
|
|
|
220
|
|
|
28
|
|
|
121
|
|
|
149
|
|
|||||||||
|
Other Universal Life(1)
|
|
34
|
|
|
61
|
|
|
95
|
|
|
28
|
|
|
61
|
|
|
89
|
|
|
13
|
|
|
57
|
|
|
70
|
|
|||||||||
|
Variable Life
|
|
26
|
|
|
66
|
|
|
92
|
|
|
22
|
|
|
56
|
|
|
78
|
|
|
21
|
|
|
31
|
|
|
52
|
|
|||||||||
|
Total
|
|
$
|
116
|
|
|
$
|
514
|
|
|
$
|
630
|
|
|
$
|
114
|
|
|
$
|
477
|
|
|
$
|
591
|
|
|
$
|
98
|
|
|
$
|
354
|
|
|
$
|
452
|
|
|
(1)
|
Single pay life premiums and excess (unscheduled) premiums are included in annualized new business premiums based on a 10% credit and represented approximately 13%, 17% and 10% of Guaranteed Universal Life and 3%, 7% and 8% of Other Universal Life annualized new business premiums for the years ended
December 31, 2016
,
2015
and
2014
, respectively.
|
|
|
|
Year ended December 31,
|
||||||||||
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
|
|
|
|
|
|
|
||||||
|
|
|
(in millions)
|
||||||||||
|
Operating results:
|
|
|
|
|
|
|
||||||
|
Revenues
|
|
$
|
5,343
|
|
|
$
|
5,143
|
|
|
$
|
5,357
|
|
|
Benefits and expenses
|
|
5,123
|
|
|
4,967
|
|
|
5,334
|
|
|||
|
Adjusted operating income
|
|
220
|
|
|
176
|
|
|
23
|
|
|||
|
Realized investment gains (losses), net, and related adjustments
|
|
(8
|
)
|
|
(1
|
)
|
|
66
|
|
|||
|
Related charges
|
|
(6
|
)
|
|
(4
|
)
|
|
(5
|
)
|
|||
|
Income from continuing operations before income taxes and equity in earnings of operating joint ventures
|
|
$
|
206
|
|
|
$
|
171
|
|
|
$
|
84
|
|
|
Benefits ratio(1):
|
|
|
|
|
|
|
||||||
|
Group life(2)
|
|
89.1
|
%
|
|
88.7
|
%
|
|
89.3
|
%
|
|||
|
Group disability(2)
|
|
75.7
|
%
|
|
75.7
|
%
|
|
99.8
|
%
|
|||
|
Total group insurance(2)
|
|
86.7
|
%
|
|
86.6
|
%
|
|
91.1
|
%
|
|||
|
Administrative operating expense ratio(3):
|
|
|
|
|
|
|
||||||
|
Group life
|
|
10.6
|
%
|
|
11.0
|
%
|
|
11.1
|
%
|
|||
|
Group disability
|
|
31.4
|
%
|
|
34.1
|
%
|
|
30.2
|
%
|
|||
|
(1)
|
Ratio of policyholder benefits to earned premiums, policy charges and fee income.
|
|
(2)
|
Benefits ratios reflect the impacts of our annual reviews and updates of assumptions and other refinements. Excluding these impacts, the group life, group disability and total group insurance benefits ratios were
88.5%
,
82.9%
and
87.5%
for 2016, respectively,
89.2%
,
79.2%
and
87.5%
for 2015, respectively, and
89.2%
,
87.0%
and
88.8%
for 2014, respectively.
|
|
(3)
|
Ratio of general and administrative expenses (excluding commissions) to gross premiums plus policy charges and fee income.
|
|
|
|
Year ended December 31,
|
||||||||||
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
|
|
|
|
|
|
|
||||||
|
|
|
(in millions)
|
||||||||||
|
Annualized new business premiums(1):
|
|
|
|
|
|
|
||||||
|
Group life
|
|
$
|
316
|
|
|
$
|
204
|
|
|
$
|
189
|
|
|
Group disability
|
|
119
|
|
|
69
|
|
|
67
|
|
|||
|
Total
|
|
$
|
435
|
|
|
$
|
273
|
|
|
$
|
256
|
|
|
(1)
|
Amounts exclude new premiums resulting from rate changes on existing policies, from additional coverage under our Servicemembers’ Group Life Insurance contract and from excess premiums on group universal life insurance that build cash value but do not purchase face amounts.
|
|
|
|
Year ended December 31,
|
||||||||||
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
|
|
|
|
|
|
|
||||||
|
|
|
(in millions)
|
||||||||||
|
Operating results:
|
|
|
|
|
|
|
||||||
|
Revenues:
|
|
|
|
|
|
|
||||||
|
Life Planner operations
|
|
$
|
9,986
|
|
|
$
|
9,172
|
|
|
$
|
9,267
|
|
|
Gibraltar Life and Other operations
|
|
11,023
|
|
|
10,192
|
|
|
10,799
|
|
|||
|
Total revenues
|
|
21,009
|
|
|
19,364
|
|
|
20,066
|
|
|||
|
Benefits and expenses:
|
|
|
|
|
|
|
||||||
|
Life Planner operations
|
|
8,447
|
|
|
7,587
|
|
|
7,678
|
|
|||
|
Gibraltar Life and Other operations
|
|
9,445
|
|
|
8,551
|
|
|
9,136
|
|
|||
|
Total benefits and expenses
|
|
17,892
|
|
|
16,138
|
|
|
16,814
|
|
|||
|
Adjusted operating income:
|
|
|
|
|
|
|
||||||
|
Life Planner operations
|
|
1,539
|
|
|
1,585
|
|
|
1,589
|
|
|||
|
Gibraltar Life and Other operations
|
|
1,578
|
|
|
1,641
|
|
|
1,663
|
|
|||
|
Total adjusted operating income
|
|
3,117
|
|
|
3,226
|
|
|
3,252
|
|
|||
|
Realized investment gains (losses), net, and related adjustments(1)
|
|
992
|
|
|
1,215
|
|
|
(2,192
|
)
|
|||
|
Related charges
|
|
(32
|
)
|
|
(60
|
)
|
|
(59
|
)
|
|||
|
Investment gains (losses) on trading account assets supporting insurance liabilities, net
|
|
4
|
|
|
57
|
|
|
188
|
|
|||
|
Change in experience-rated contractholder liabilities due to asset value changes
|
|
(4
|
)
|
|
(57
|
)
|
|
(188
|
)
|
|||
|
Equity in earnings of operating joint ventures and earnings attributable to noncontrolling interests
|
|
(47
|
)
|
|
8
|
|
|
5
|
|
|||
|
Income (loss) from continuing operations before income taxes and equity in earnings of operating joint ventures
|
|
$
|
4,030
|
|
|
$
|
4,389
|
|
|
$
|
1,006
|
|
|
(1)
|
Includes gains (losses) from changes in value of certain assets and liabilities relating to foreign currency exchange movements that are economically matched.
|
|
|
|
Year ended December 31,
|
||||||||||
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
|
|
|
|
|
|
|
||||||
|
|
|
(in millions)
|
||||||||||
|
Annualized new business premiums:
|
|
|
|
|
|
|
||||||
|
On an actual exchange rate basis:
|
|
|
|
|
|
|
||||||
|
Life Planner operations
|
|
$
|
1,059
|
|
|
$
|
1,117
|
|
|
$
|
1,161
|
|
|
Gibraltar Life
|
|
1,726
|
|
|
1,548
|
|
|
1,584
|
|
|||
|
Total
|
|
$
|
2,785
|
|
|
$
|
2,665
|
|
|
$
|
2,745
|
|
|
On a constant exchange rate basis:
|
|
|
|
|
|
|
||||||
|
Life Planner operations
|
|
$
|
1,298
|
|
|
$
|
1,181
|
|
|
$
|
1,096
|
|
|
Gibraltar Life
|
|
1,728
|
|
|
1,619
|
|
|
1,506
|
|
|||
|
Total
|
|
$
|
3,026
|
|
|
$
|
2,800
|
|
|
$
|
2,602
|
|
|
|
|
Year Ended December 31, 2016
|
|
Year Ended December 31, 2015
|
||||||||||||||||||||||||||||||||||||
|
|
|
Life
|
|
Accident
&
Health
|
|
Retirement
(1)
|
|
Annuity
|
|
Total
|
|
Life
|
|
Accident
&
Health
|
|
Retirement
(1)
|
|
Annuity
|
|
Total
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
|
|
(in millions)
|
||||||||||||||||||||||||||||||||||||||
|
Life Planner
|
|
$
|
765
|
|
|
$
|
118
|
|
|
$
|
337
|
|
|
$
|
78
|
|
|
$
|
1,298
|
|
|
$
|
729
|
|
|
$
|
116
|
|
|
$
|
271
|
|
|
$
|
65
|
|
|
$
|
1,181
|
|
|
Gibraltar Life:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
Life Consultants
|
|
366
|
|
|
56
|
|
|
117
|
|
|
208
|
|
|
747
|
|
|
347
|
|
|
61
|
|
|
126
|
|
|
134
|
|
|
668
|
|
||||||||||
|
Banks(2)
|
|
521
|
|
|
0
|
|
|
68
|
|
|
130
|
|
|
719
|
|
|
480
|
|
|
1
|
|
|
40
|
|
|
180
|
|
|
701
|
|
||||||||||
|
Independent Agency
|
|
134
|
|
|
23
|
|
|
71
|
|
|
34
|
|
|
262
|
|
|
104
|
|
|
24
|
|
|
69
|
|
|
53
|
|
|
250
|
|
||||||||||
|
Subtotal
|
|
1,021
|
|
|
79
|
|
|
256
|
|
|
372
|
|
|
1,728
|
|
|
931
|
|
|
86
|
|
|
235
|
|
|
367
|
|
|
1,619
|
|
||||||||||
|
Total
|
|
$
|
1,786
|
|
|
$
|
197
|
|
|
$
|
593
|
|
|
$
|
450
|
|
|
$
|
3,026
|
|
|
$
|
1,660
|
|
|
$
|
202
|
|
|
$
|
506
|
|
|
$
|
432
|
|
|
$
|
2,800
|
|
|
(1)
|
Includes retirement income, endowment and savings variable universal life.
|
|
(2)
|
Single pay life annualized new business premiums, which include 10% of first year premiums, and 3-year limited pay annualized new business premiums, which include 100% of new business premiums, represented 9% and 53%, respectively, of total Japanese bank distribution channel annualized new business premiums, excluding annuity products, for the year ended December 31, 2016, and 5% and 51%, respectively, of total Japanese bank distribution channel annualized new business premiums, excluding annuity products, for the year ended December 31, 2015.
|
|
|
|
Year Ended December 31, 2015
|
|
Year Ended December 31, 2014
|
||||||||||||||||||||||||||||||||||||
|
|
|
Life
|
|
Accident
&
Health
|
|
Retirement
(1)
|
|
Annuity
|
|
Total
|
|
Life
|
|
Accident
&
Health
|
|
Retirement
(1)
|
|
Annuity
|
|
Total
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
|
|
(in millions)
|
||||||||||||||||||||||||||||||||||||||
|
Life Planner
|
|
$
|
729
|
|
|
$
|
116
|
|
|
$
|
271
|
|
|
$
|
65
|
|
|
$
|
1,181
|
|
|
$
|
613
|
|
|
$
|
100
|
|
|
$
|
319
|
|
|
$
|
64
|
|
|
$
|
1,096
|
|
|
Gibraltar Life:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
Life Consultants
|
|
347
|
|
|
61
|
|
|
126
|
|
|
134
|
|
|
668
|
|
|
330
|
|
|
64
|
|
|
123
|
|
|
142
|
|
|
659
|
|
||||||||||
|
Banks(2)
|
|
480
|
|
|
1
|
|
|
40
|
|
|
180
|
|
|
701
|
|
|
418
|
|
|
1
|
|
|
10
|
|
|
176
|
|
|
605
|
|
||||||||||
|
Independent Agency
|
|
104
|
|
|
24
|
|
|
69
|
|
|
53
|
|
|
250
|
|
|
95
|
|
|
24
|
|
|
62
|
|
|
61
|
|
|
242
|
|
||||||||||
|
Subtotal
|
|
931
|
|
|
86
|
|
|
235
|
|
|
367
|
|
|
1,619
|
|
|
843
|
|
|
89
|
|
|
195
|
|
|
379
|
|
|
1,506
|
|
||||||||||
|
Total
|
|
$
|
1,660
|
|
|
$
|
202
|
|
|
$
|
506
|
|
|
$
|
432
|
|
|
$
|
2,800
|
|
|
$
|
1,456
|
|
|
$
|
189
|
|
|
$
|
514
|
|
|
$
|
443
|
|
|
$
|
2,602
|
|
|
(1)
|
Includes retirement income, endowment and savings variable universal life.
|
|
(2)
|
Single pay life annualized new business premiums, which include 10% of first year premiums, and 3-year limited pay annualized new business premiums, which include 100% of new business premiums, represented 5% and 51%, respectively, of total Japanese bank distribution channel annualized new business premiums, excluding annuity products, for the year ended December 31, 2015, and 7% and 57%, respectively, of total Japanese bank distribution channel annualized new business premiums, excluding annuity products, for the year ended December 31, 2014.
|
|
|
|
As of December 31,
|
|||||||
|
|
|
2016
|
|
2015
|
|
2014
|
|||
|
Life Planners:
|
|
|
|
|
|
|
|||
|
Japan
|
|
3,824
|
|
|
3,528
|
|
|
3,328
|
|
|
All other countries
|
|
3,856
|
|
|
4,064
|
|
|
4,024
|
|
|
Gibraltar Life Consultants
|
|
8,884
|
|
|
8,805
|
|
|
8,707
|
|
|
Total
|
|
16,564
|
|
|
16,397
|
|
|
16,059
|
|
|
|
|
Year ended December 31,
|
||||||||||
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
|
|
|
|
|
|
|
||||||
|
|
|
(in millions)
|
||||||||||
|
Operating results:
|
|
|
|
|
|
|
||||||
|
Capital debt interest expense
|
|
$
|
(686
|
)
|
|
$
|
(731
|
)
|
|
$
|
(626
|
)
|
|
Operating debt interest expense, net of investment income
|
|
1
|
|
|
69
|
|
|
(126
|
)
|
|||
|
Pension and employee benefits
|
|
103
|
|
|
173
|
|
|
185
|
|
|||
|
Other corporate activities(1)
|
|
(999
|
)
|
|
(824
|
)
|
|
(781
|
)
|
|||
|
Adjusted operating income
|
|
(1,581
|
)
|
|
(1,313
|
)
|
|
(1,348
|
)
|
|||
|
Realized investment gains (losses), net, and related adjustments
|
|
(1,797
|
)
|
|
(961
|
)
|
|
(3,656
|
)
|
|||
|
Related charges
|
|
(1
|
)
|
|
19
|
|
|
4
|
|
|||
|
Divested businesses
|
|
(84
|
)
|
|
(66
|
)
|
|
167
|
|
|||
|
Equity in earnings of operating joint ventures and earnings attributable to noncontrolling interests
|
|
(3
|
)
|
|
0
|
|
|
(2
|
)
|
|||
|
Income (loss) from continuing operations before income taxes and equity in earnings of operating joint ventures
|
|
$
|
(3,466
|
)
|
|
$
|
(2,321
|
)
|
|
$
|
(4,835
|
)
|
|
(1)
|
Includes consolidating adjustments.
|
|
|
|
Year ended December 31,
|
||||||||||
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
|
|
|
|
|
|
|
||||||
|
|
|
(in millions)
|
||||||||||
|
Long-Term Care
|
|
$
|
(74
|
)
|
|
$
|
(67
|
)
|
|
$
|
171
|
|
|
Other
|
|
(10
|
)
|
|
1
|
|
|
(4
|
)
|
|||
|
Total divested businesses income (loss) excluded from adjusted operating income
|
|
$
|
(84
|
)
|
|
$
|
(66
|
)
|
|
$
|
167
|
|
|
|
|
Year ended December 31,
|
||||||||||
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
|
|
|
|
|
|
|
||||||
|
|
|
(in millions)
|
||||||||||
|
U.S. GAAP results:
|
|
|
|
|
|
|
||||||
|
Revenues
|
|
$
|
5,669
|
|
|
$
|
6,160
|
|
|
$
|
6,906
|
|
|
Benefits and expenses
|
|
5,801
|
|
|
6,102
|
|
|
7,165
|
|
|||
|
Income (loss) from continuing operations before income taxes and equity in earnings of operating joint ventures
|
|
$
|
(132
|
)
|
|
$
|
58
|
|
|
$
|
(259
|
)
|
|
|
|
Year ended December 31,
|
||||||||||
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
|
|
|
|
|
|
|
||||||
|
|
|
(in millions)
|
||||||||||
|
Tax provision (benefit)
|
|
$
|
1,335
|
|
|
$
|
2,072
|
|
|
$
|
349
|
|
|
Impact of:
|
|
|
|
|
|
|
||||||
|
Non-taxable investment income
|
|
352
|
|
|
341
|
|
|
381
|
|
|||
|
Foreign taxes at other than U.S. rate
|
|
172
|
|
|
51
|
|
|
(146
|
)
|
|||
|
Low income housing and other tax credits
|
|
118
|
|
|
116
|
|
|
127
|
|
|||
|
Reversal of acquisition opening balance sheet deferred tax items
|
|
0
|
|
|
0
|
|
|
(53
|
)
|
|||
|
Change in repatriation assertion
|
|
0
|
|
|
3
|
|
|
(32
|
)
|
|||
|
Change in law: active financing exception
|
|
0
|
|
|
108
|
|
|
0
|
|
|||
|
Other
|
|
20
|
|
|
28
|
|
|
(10
|
)
|
|||
|
Tax provision (benefit) excluding these items
|
|
$
|
1,997
|
|
|
$
|
2,719
|
|
|
$
|
616
|
|
|
|
|
Year ended December 31,
|
||||||||||
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
|
|
|
|
|
|
|
||||||
|
|
|
(in millions)
|
||||||||||
|
Retirement Segment:
|
|
|
|
|
|
|
||||||
|
Investment gains (losses) on:
|
|
|
|
|
|
|
||||||
|
Trading account assets supporting insurance liabilities, net
|
|
$
|
(21
|
)
|
|
$
|
(581
|
)
|
|
$
|
151
|
|
|
Derivatives
|
|
(10
|
)
|
|
138
|
|
|
(32
|
)
|
|||
|
Commercial mortgages and other loans
|
|
5
|
|
|
4
|
|
|
12
|
|
|||
|
Change in experience-rated contractholder liabilities due to asset value changes(1)(2)
|
|
25
|
|
|
490
|
|
|
(106
|
)
|
|||
|
Net gains (losses)
|
|
$
|
(1
|
)
|
|
$
|
51
|
|
|
$
|
25
|
|
|
International Insurance Segment:
|
|
|
|
|
|
|
||||||
|
Investment gains (losses) on trading account assets supporting insurance liabilities, net
|
|
$
|
4
|
|
|
$
|
57
|
|
|
$
|
188
|
|
|
Change in experience-rated contractholder liabilities due to asset value changes
|
|
(4
|
)
|
|
(57
|
)
|
|
(188
|
)
|
|||
|
Net gains (losses)
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
Total:
|
|
|
|
|
|
|
||||||
|
Investment gains (losses) on:
|
|
|
|
|
|
|
||||||
|
Trading account assets supporting insurance liabilities, net
|
|
$
|
(17
|
)
|
|
$
|
(524
|
)
|
|
$
|
339
|
|
|
Derivatives
|
|
(10
|
)
|
|
138
|
|
|
(32
|
)
|
|||
|
Commercial mortgages and other loans
|
|
5
|
|
|
4
|
|
|
12
|
|
|||
|
Change in experience-rated contractholder liabilities due to asset value changes(1)(2)
|
|
21
|
|
|
433
|
|
|
(294
|
)
|
|||
|
Net gains (losses)
|
|
$
|
(1
|
)
|
|
$
|
51
|
|
|
$
|
25
|
|
|
(1)
|
Decreases to contractholder liabilities due to asset value changes are limited by certain floors and therefore do not reflect cumulative declines in recorded asset values of $10 million, $15 million and $2 million as of December 31,
2016
,
2015
and
2014
, respectively. We have recovered and expect to recover in future periods these declines in recorded asset values through subsequent increases in recorded asset values or reductions in crediting rates on contractholder liabilities.
|
|
(2)
|
Included in the amounts above related to the change in the liability to contractholders as a result of commercial mortgage and other loans are an increase of $4 million, a decrease of $64 million and a decrease of $1 million for the years ended December 31,
2016
,
2015
and
2014
, respectively. As prescribed by U.S. GAAP, changes in the fair value of commercial mortgage and other loans held for investment in our general account, other than when associated with impairments, are not recognized in income in the current period, while the impact of these changes in fair value are reflected as a change in the liability to fully participating contractholders in the current period.
|
|
(1)
|
The amount of Level 3 assets taken as a percentage of total assets measured at fair value on a recurring basis for PFI excluding the Closed Block division and for the Closed Block division totaled
1.5%
and
3.3%
, respectively, as of
December 31, 2016
and
1.4%
and
2.5%
as of
December 31, 2015
.
|
|
(2)
|
“All other” and “Other liabilities” primarily include derivatives. The amounts classified as Level 3 exclude the impact of netting.
|
|
(3)
|
Prior period amounts are presented on a basis consistent with the current period presentation, reflecting the adoption of ASU 2015-07.
|
|
•
|
sale of investments;
|
|
•
|
maturities of foreign-denominated investments;
|
|
•
|
adjustments to the cost basis of investments for OTTI;
|
|
•
|
recognition of OTTI in earnings for foreign-denominated securities that are approaching maturity and are in an unrealized loss position due to foreign currency exchange rate movements;
|
|
•
|
net changes in the allowance for losses, certain restructurings and foreclosures on commercial mortgage and other loans; and
|
|
•
|
fair value changes on embedded derivatives and free-standing derivatives that do not qualify for hedge accounting treatment.
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
|
|
|
|
|
|
|
||||||
|
|
|
(in millions)
|
||||||||||
|
Realized investment gains (losses), net:
|
|
|
|
|
|
|
||||||
|
PFI excluding Closed Block division
|
|
$
|
1,760
|
|
|
$
|
3,192
|
|
|
$
|
475
|
|
|
Closed Block division
|
|
434
|
|
|
833
|
|
|
1,161
|
|
|||
|
Consolidated realized investment gains (losses), net
|
|
$
|
2,194
|
|
|
$
|
4,025
|
|
|
$
|
1,636
|
|
|
PFI excluding Closed Block Division:
|
|
|
|
|
|
|
||||||
|
Realized investment gains (losses), net:
|
|
|
|
|
|
|
||||||
|
Fixed maturity securities
|
|
$
|
617
|
|
|
$
|
1,431
|
|
|
$
|
753
|
|
|
Equity securities
|
|
127
|
|
|
4
|
|
|
81
|
|
|||
|
Commercial mortgage and other loans
|
|
54
|
|
|
36
|
|
|
79
|
|
|||
|
Derivative instruments
|
|
1,013
|
|
|
1,775
|
|
|
(445
|
)
|
|||
|
Other
|
|
(51
|
)
|
|
(54
|
)
|
|
7
|
|
|||
|
Total
|
|
$
|
1,760
|
|
|
$
|
3,192
|
|
|
$
|
475
|
|
|
Related adjustments
|
|
(771
|
)
|
|
(934
|
)
|
|
(4,063
|
)
|
|||
|
Realized investment gains (losses), net, and related adjustments
|
|
989
|
|
|
2,258
|
|
|
(3,588
|
)
|
|||
|
Related charges
|
|
(466
|
)
|
|
(679
|
)
|
|
(542
|
)
|
|||
|
Realized investment gains (losses), net, and related charges and adjustments
|
|
$
|
523
|
|
|
$
|
1,579
|
|
|
$
|
(4,130
|
)
|
|
Closed Block Division:
|
|
|
|
|
|
|
||||||
|
Realized investment gains (losses), net:
|
|
|
|
|
|
|
||||||
|
Fixed maturity securities
|
|
$
|
49
|
|
|
$
|
203
|
|
|
$
|
441
|
|
|
Equity securities
|
|
249
|
|
|
447
|
|
|
431
|
|
|||
|
Commercial mortgage and other loans
|
|
1
|
|
|
1
|
|
|
31
|
|
|||
|
Derivative instruments
|
|
162
|
|
|
195
|
|
|
263
|
|
|||
|
Other
|
|
(27
|
)
|
|
(13
|
)
|
|
(5
|
)
|
|||
|
Total
|
|
$
|
434
|
|
|
$
|
833
|
|
|
$
|
1,161
|
|
|
|
|
Year Ended December 31,
|
||||||
|
|
|
2016
|
|
2015
|
||||
|
|
|
|
|
|
||||
|
|
|
(in millions)
|
||||||
|
Gross realized investment gains:
|
|
|
|
|
||||
|
Gross gains on sales and maturities(1)
|
|
$
|
1,229
|
|
|
$
|
1,809
|
|
|
Gross realized investment losses:
|
|
|
|
|
||||
|
Net OTTI recognized in earnings(2)
|
|
(144
|
)
|
|
(97
|
)
|
||
|
Gross losses on sales and maturities(3)
|
|
(456
|
)
|
|
(273
|
)
|
||
|
Credit-related losses on sales
|
|
(12
|
)
|
|
(8
|
)
|
||
|
Total gross realized investment losses
|
|
(612
|
)
|
|
(378
|
)
|
||
|
Realized investment gains (losses), net—Fixed Maturity Securities
|
|
$
|
617
|
|
|
$
|
1,431
|
|
|
Net gains (losses) on sales and maturities—Fixed Maturity Securities(1)
|
|
$
|
773
|
|
|
$
|
1,536
|
|
|
(1)
|
During 2016, fixed maturity prepayment fees and call premiums were reclassified to “Net investment income.” Prior periods were not restated. The impact of this change was immaterial.
|
|
(2)
|
Excludes the portion of OTTI recorded in “Other comprehensive income (loss),” representing any difference between the fair value of the impaired debt security and the net present value of its projected future cash flows at the time of impairment.
|
|
(3)
|
Excludes OTTI and credit-related losses through sales of investments due to expected near-term credit conditions of an underlying issuer.
|
|
|
Year Ended December 31,
|
||||||
|
|
2016
|
|
2015
|
||||
|
|
|
|
|
||||
|
|
(in millions)
|
||||||
|
Public fixed maturity securities
|
$
|
56
|
|
|
$
|
31
|
|
|
Private fixed maturity securities
|
88
|
|
|
66
|
|
||
|
Total fixed maturity securities
|
144
|
|
|
97
|
|
||
|
Equity securities
|
61
|
|
|
111
|
|
||
|
Other invested assets(1)
|
57
|
|
|
121
|
|
||
|
Total(2)
|
$
|
262
|
|
|
$
|
329
|
|
|
(1)
|
Includes OTTI related to investments in joint ventures and limited partnerships.
|
|
(2)
|
Excludes the portion of OTTI recorded in “Other comprehensive income (loss),” representing any difference between the fair value of the impaired debt security and the net present value of its projected future cash flows at the time of impairment.
|
|
|
Year Ended December 31,
|
||||||
|
|
2016
|
|
2015
|
||||
|
|
|
|
|
||||
|
|
(in millions)
|
||||||
|
Due to credit events or adverse conditions of the respective issuers(1)
|
$
|
111
|
|
|
$
|
82
|
|
|
Due to other accounting guidelines(2)
|
33
|
|
|
15
|
|
||
|
Total fixed maturity securities(3)
|
$
|
144
|
|
|
$
|
97
|
|
|
(1)
|
Represents circumstances where we believe credit events or other adverse conditions of the respective issuers have caused or will lead to a deficiency in the contractual cash flows related to the investment. The amount of the impairment recorded in earnings is the difference between the amortized cost of the debt security and the net present value of its projected future cash flows discounted at the effective interest rate implicit in the debt security prior to impairment.
|
|
(2)
|
Primarily represents circumstances where securities are being actively marketed for sale by the company and where securities with losses from foreign currency exchange rate movements approach maturity.
|
|
(3)
|
Excludes the portion of OTTI recorded in “Other comprehensive income (loss),” representing any difference between the fair value of the impaired debt security and the net present value of its projected future cash flows at the time of impairment.
|
|
|
|
Year Ended December 31,
|
||||||
|
|
|
2016
|
|
2015
|
||||
|
|
|
|
|
|
||||
|
|
|
(in millions)
|
||||||
|
Gross realized investment gains:
|
|
|
|
|
||||
|
Gross gains on sales and maturities(1)
|
|
$
|
204
|
|
|
$
|
306
|
|
|
Gross realized investment losses:
|
|
|
|
|
||||
|
Net OTTI recognized in earnings(2)
|
|
(78
|
)
|
|
(44
|
)
|
||
|
Gross losses on sales and maturities(3)
|
|
(73
|
)
|
|
(57
|
)
|
||
|
Credit-related losses on sales
|
|
(4
|
)
|
|
(2
|
)
|
||
|
Total gross realized investment losses
|
|
(155
|
)
|
|
(103
|
)
|
||
|
Realized investment gains (losses), net—Fixed Maturity Securities
|
|
$
|
49
|
|
|
$
|
203
|
|
|
Net gains (losses) on sales and maturities—Fixed Maturity Securities(1)
|
|
$
|
131
|
|
|
$
|
249
|
|
|
(1)
|
During 2016, fixed maturity prepayment fees and call premiums were reclassified to “Net investment income.” Prior periods were not restated. The impact of this change was immaterial.
|
|
(2)
|
Excludes the portion of OTTI recorded in “Other comprehensive income (loss),” representing any difference between the fair value of the impaired debt security and the net present value of its projected future cash flows at the time of impairment.
|
|
(3)
|
Excludes OTTI and credit-related losses through sales of investments due to expected near-term credit conditions of an underlying issuer.
|
|
|
|
Year Ended December 31,
|
||||||
|
|
|
2016
|
|
2015
|
||||
|
|
|
|
|
|
||||
|
|
|
(in millions)
|
||||||
|
Public fixed maturity securities
|
|
$
|
22
|
|
|
$
|
9
|
|
|
Private fixed maturity securities
|
|
56
|
|
|
35
|
|
||
|
Total fixed maturity securities
|
|
78
|
|
|
44
|
|
||
|
Equity securities
|
|
13
|
|
|
15
|
|
||
|
Other invested assets(1)
|
|
30
|
|
|
21
|
|
||
|
Total(2)
|
|
$
|
121
|
|
|
$
|
80
|
|
|
(1)
|
Includes OTTI related to investments in joint ventures and limited partnerships.
|
|
(2)
|
Excludes the portion of OTTI recorded in “Other comprehensive income (loss),” representing any difference between the fair value of the impaired debt security and the net present value of its projected future cash flows at the time of impairment.
|
|
|
|
Year Ended December 31,
|
||||||
|
|
|
2016
|
|
2015
|
||||
|
|
|
|
|
|
||||
|
|
|
(in millions)
|
||||||
|
Due to credit events or adverse conditions of the respective issuers(1)
|
|
$
|
65
|
|
|
$
|
41
|
|
|
Due to other accounting guidelines(2)
|
|
13
|
|
|
3
|
|
||
|
Total fixed maturity securities(3)
|
|
$
|
78
|
|
|
$
|
44
|
|
|
(1)
|
Represents circumstances where we believe credit events or other adverse conditions of the respective issuers have caused or will lead to a deficiency in the contractual cash flows related to the investment. The amount of the impairment recorded in earnings is the difference between the amortized cost of the debt security and the net present value of its projected future cash flows discounted at the effective interest rate implicit in the debt security prior to impairment.
|
|
(2)
|
Primarily represents circumstances where securities are being actively marketed for sale by the company and where securities with losses from foreign currency exchange rate movements approach maturity.
|
|
(3)
|
Excludes the portion of OTTI recorded in “Other comprehensive income (loss),” representing any difference between the fair value of the impaired debt security and the net present value of its projected future cash flows at the time of impairment.
|
|
|
|
Year Ended December 31,
|
||||||
|
|
|
2015
|
|
2014
|
||||
|
|
|
|
|
|
||||
|
|
|
(in millions)
|
||||||
|
Gross realized investment gains:
|
|
|
|
|
||||
|
Gross gains on sales and maturities(1)
|
|
$
|
1,809
|
|
|
$
|
1,154
|
|
|
Gross realized investment losses:
|
|
|
|
|
||||
|
Net OTTI recognized in earnings(2)
|
|
(97
|
)
|
|
(36
|
)
|
||
|
Gross losses on sales and maturities(3)
|
|
(273
|
)
|
|
(327
|
)
|
||
|
Credit-related losses on sales
|
|
(8
|
)
|
|
(38
|
)
|
||
|
Total gross realized investment losses
|
|
(378
|
)
|
|
(401
|
)
|
||
|
Realized investment gains (losses), net—Fixed Maturity Securities
|
|
$
|
1,431
|
|
|
$
|
753
|
|
|
Net gains (losses) on sales and maturities—Fixed Maturity Securities(1)
|
|
$
|
1,536
|
|
|
$
|
827
|
|
|
(1)
|
Amounts include fixed maturity prepayment fees and call premiums.
|
|
(2)
|
Excludes the portion of OTTI recorded in “Other comprehensive income (loss),” representing any difference between the fair value of the impaired debt security and the net present value of its projected future cash flows at the time of impairment.
|
|
(3)
|
Excludes OTTI and credit-related losses through sales of investments due to expected near-term credit conditions of an underlying issuer.
|
|
|
|
Year Ended December 31,
|
||||||
|
|
|
2015
|
|
2014
|
||||
|
|
|
|
|
|
||||
|
|
|
(in millions)
|
||||||
|
Public fixed maturity securities
|
|
$
|
31
|
|
|
$
|
22
|
|
|
Private fixed maturity securities
|
|
66
|
|
|
14
|
|
||
|
Total fixed maturity securities
|
|
97
|
|
|
36
|
|
||
|
Equity securities
|
|
111
|
|
|
26
|
|
||
|
Other invested assets(1)
|
|
121
|
|
|
21
|
|
||
|
Total(2)
|
|
$
|
329
|
|
|
$
|
83
|
|
|
(1)
|
Includes OTTI related to investments in joint ventures and limited partnerships and real estate investments.
|
|
(2)
|
Excludes the portion of OTTI recorded in “Other comprehensive income (loss),” representing any difference between the fair value of the impaired debt security and the net present value of its projected future cash flows at the time of impairment.
|
|
|
Year Ended December 31,
|
||||||
|
|
2015
|
|
2014
|
||||
|
|
|
|
|
||||
|
|
(in millions)
|
||||||
|
Due to credit events or adverse conditions of the respective issuers(1)
|
$
|
82
|
|
|
$
|
24
|
|
|
Due to other accounting guidelines(2)
|
15
|
|
|
12
|
|
||
|
Total fixed maturities(3)
|
$
|
97
|
|
|
$
|
36
|
|
|
(1)
|
Represents circumstances where we believe credit events or other adverse conditions of the respective issuers have caused or will lead to a deficiency in the contractual cash flows related to the investment. The amount of the impairment recorded in earnings is the difference between the amortized cost of the debt security and the net present value of its projected future cash flows discounted at the effective interest rate implicit in the debt security prior to impairment.
|
|
(2)
|
Primarily represents circumstances where securities with losses from foreign currency exchange rate movements approach maturity.
|
|
(3)
|
Excludes the portion of OTTI recorded in “Other comprehensive income (loss),” representing any difference between the fair value of the impaired debt security and the net present value of its projected future cash flows at the time of impairment.
|
|
|
|
Year Ended December 31,
|
||||||
|
|
|
2015
|
|
2014
|
||||
|
|
|
|
|
|
||||
|
|
|
(in millions)
|
||||||
|
Gross realized investment gains:
|
|
|
|
|
||||
|
Gross gains on sales and maturities(1)
|
|
$
|
306
|
|
|
$
|
510
|
|
|
Gross realized investment losses:
|
|
|
|
|
||||
|
Net OTTI recognized in earnings(2)
|
|
(44
|
)
|
|
(20
|
)
|
||
|
Gross losses on sales and maturities(3)
|
|
(57
|
)
|
|
(37
|
)
|
||
|
Credit-related losses on sales
|
|
(2
|
)
|
|
(12
|
)
|
||
|
Total gross realized investment losses
|
|
(103
|
)
|
|
(69
|
)
|
||
|
Realized investment gains (losses), net—Fixed Maturity Securities
|
|
$
|
203
|
|
|
$
|
441
|
|
|
Net gains (losses) on sales and maturities—Fixed Maturity Securities(1)
|
|
$
|
249
|
|
|
$
|
473
|
|
|
(1)
|
Amounts include fixed maturity prepayment fees and call premiums.
|
|
(2)
|
Excludes the portion of OTTI recorded in “Other comprehensive income (loss),” representing any difference between the fair value of the impaired debt security and the net present value of its projected future cash flows at the time of impairment.
|
|
(3)
|
Excludes OTTI and credit related losses through sales of investments due to expected near-term credit conditions of an underlying issuer.
|
|
|
|
Year Ended December 31,
|
||||||
|
|
|
2015
|
|
2014
|
||||
|
|
|
|
|
|
||||
|
|
|
(in millions)
|
||||||
|
Public fixed maturity securities
|
|
$
|
9
|
|
|
$
|
13
|
|
|
Private fixed maturity securities
|
|
35
|
|
|
7
|
|
||
|
Total fixed maturity securities
|
|
44
|
|
|
20
|
|
||
|
Equity securities
|
|
15
|
|
|
6
|
|
||
|
Other invested assets(1)
|
|
21
|
|
|
5
|
|
||
|
Total(2)
|
|
$
|
80
|
|
|
$
|
31
|
|
|
(1)
|
Includes OTTI related to investments in joint ventures and limited partnerships.
|
|
(2)
|
Excludes the portion of OTTI recorded in “Other comprehensive income (loss),” representing any difference between the fair value of the impaired debt security and the net present value of its projected future cash flows at the time of impairment.
|
|
|
|
Year Ended December 31,
|
||||||
|
|
|
2015
|
|
2014
|
||||
|
|
|
|
|
|
||||
|
|
|
(in millions)
|
||||||
|
Due to credit events or adverse conditions of the respective issuers(1)
|
|
$
|
41
|
|
|
$
|
19
|
|
|
Due to other accounting guidelines(2)
|
|
3
|
|
|
1
|
|
||
|
Total fixed maturity securities(3)
|
|
$
|
44
|
|
|
$
|
20
|
|
|
(1)
|
Represents circumstances where we believe credit events or other adverse conditions of the respective issuers have caused or will lead to a deficiency in the contractual cash flows related to the investment. The amount of the impairment recorded in earnings is the difference between the amortized cost of the debt security and the net present value of its projected future cash flows discounted at the effective interest rate implicit in the debt security prior to impairment.
|
|
(2)
|
Primarily represents circumstances where securities with losses from foreign currency exchange rate movements approach maturity.
|
|
(3)
|
Excludes the portion of OTTI recorded in “Other comprehensive income (loss),” representing any difference between the fair value of the impaired debt security and the net present value of its projected future cash flows at the time of impairment.
|
|
•
|
hedging and otherwise managing the market risk characteristics of the major product liabilities and other obligations of the Company;
|
|
•
|
optimizing investment income yield within risk constraints over time; and
|
|
•
|
for certain portfolios, optimizing total return, including both investment income yield and capital appreciation, within risk constraints over time, while managing the market risk exposures associated with the corresponding product liabilities.
|
|
•
|
the investment of net operating cash flows, including new product premium inflows, and proceeds from investment sales, repayments and prepayments into investments with attractive risk-adjusted yields; and
|
|
•
|
the sale of lower-yielding investments, where appropriate, either to meet various cash flow needs or to manage the portfolio's risk exposure profile with respect to duration, credit, currency and other risk factors, while considering the impact on taxes and capital.
|
|
•
|
providing for the reasonable dividend expectations of the participating policyholders within the Closed Block division; and
|
|
•
|
optimizing total return, including both investment income yield and capital appreciation, within risk constraints, while managing the market risk exposures associated with the major products in the Closed Block division.
|
|
•
|
interest-crediting products for which the rates credited to customers are periodically adjusted to reflect market and competitive forces and actual investment experience, such as fixed annuities and universal life insurance;
|
|
•
|
participating individual and experience-rated group products in which customers participate in actual investment and business results through annual dividends, interest or return of premium; and
|
|
•
|
products with fixed or guaranteed terms, such as traditional whole life and endowment products, guaranteed investment contracts, funding agreements and payout annuities.
|
|
|
|
December 31, 2016
|
|||||||||||||
|
|
|
PFI Excluding
Closed Block Division
|
|
Closed Block
Division
|
|
Total
|
|||||||||
|
|
|
($ in millions)
|
|||||||||||||
|
Fixed maturities:
|
|
|
|
|
|
|
|
|
|||||||
|
Public, available-for-sale, at fair value
|
|
$
|
243,201
|
|
|
64.2
|
%
|
|
$
|
24,917
|
|
|
$
|
268,118
|
|
|
Public, held-to-maturity, at amortized cost
|
|
1,772
|
|
|
0.5
|
|
|
0
|
|
|
1,772
|
|
|||
|
Private, available-for-sale, at fair value
|
|
39,074
|
|
|
10.3
|
|
|
13,987
|
|
|
53,061
|
|
|||
|
Private, held-to-maturity, at amortized cost
|
|
372
|
|
|
0.1
|
|
|
0
|
|
|
372
|
|
|||
|
Trading account assets supporting insurance liabilities, at fair value
|
|
21,840
|
|
|
5.8
|
|
|
0
|
|
|
21,840
|
|
|||
|
Other trading account assets, at fair value
|
|
1,521
|
|
|
0.4
|
|
|
284
|
|
|
1,805
|
|
|||
|
Equity securities, available-for-sale, at fair value
|
|
7,163
|
|
|
1.9
|
|
|
2,572
|
|
|
9,735
|
|
|||
|
Commercial mortgage and other loans, at book value
|
|
42,771
|
|
|
11.2
|
|
|
9,437
|
|
|
52,208
|
|
|||
|
Policy loans, at outstanding balance
|
|
7,095
|
|
|
1.9
|
|
|
4,660
|
|
|
11,755
|
|
|||
|
Other long-term investments(1)
|
|
7,231
|
|
|
1.9
|
|
|
3,020
|
|
|
10,251
|
|
|||
|
Short-term investments
|
|
6,657
|
|
|
1.8
|
|
|
837
|
|
|
7,494
|
|
|||
|
Total general account investments
|
|
378,697
|
|
|
100.0
|
%
|
|
59,714
|
|
|
438,411
|
|
|||
|
Invested assets of other entities and operations(2)
|
|
5,829
|
|
|
|
|
0
|
|
|
5,829
|
|
||||
|
Total investments
|
|
$
|
384,526
|
|
|
|
|
|
$
|
59,714
|
|
|
$
|
444,240
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
|
|
December 31, 2015
|
|||||||||||||
|
|
|
PFI Excluding
Closed Block Division
|
|
Closed Block
Division
|
|
Total
|
|||||||||
|
|
|
($ in millions)
|
|||||||||||||
|
Fixed maturities:
|
|
|
|
|
|
|
|
|
|||||||
|
Public, available-for-sale, at fair value
|
|
$
|
216,628
|
|
|
63.1
|
%
|
|
$
|
23,505
|
|
|
$
|
240,133
|
|
|
Public, held-to-maturity, at amortized cost
|
|
1,834
|
|
|
0.5
|
|
|
0
|
|
|
1,834
|
|
|||
|
Private, available-for-sale, at fair value
|
|
35,767
|
|
|
10.4
|
|
|
14,290
|
|
|
50,057
|
|
|||
|
Private, held-to-maturity, at amortized cost
|
|
474
|
|
|
0.1
|
|
|
0
|
|
|
474
|
|
|||
|
Trading account assets supporting insurance liabilities, at fair value
|
|
20,522
|
|
|
6.0
|
|
|
0
|
|
|
20,522
|
|
|||
|
Other trading account assets, at fair value
|
|
1,561
|
|
|
0.5
|
|
|
288
|
|
|
1,849
|
|
|||
|
Equity securities, available-for-sale, at fair value
|
|
6,537
|
|
|
1.9
|
|
|
2,726
|
|
|
9,263
|
|
|||
|
Commercial mortgage and other loans, at book value
|
|
40,486
|
|
|
11.8
|
|
|
9,771
|
|
|
50,257
|
|
|||
|
Policy loans, at outstanding balance
|
|
6,867
|
|
|
2.0
|
|
|
4,790
|
|
|
11,657
|
|
|||
|
Other long-term investments(1)
|
|
6,549
|
|
|
1.9
|
|
|
2,921
|
|
|
9,470
|
|
|||
|
Short-term investments
|
|
6,250
|
|
|
1.8
|
|
|
1,467
|
|
|
7,717
|
|
|||
|
Total general account investments
|
|
343,475
|
|
|
100.0
|
%
|
|
59,758
|
|
|
403,233
|
|
|||
|
Invested assets of other entities and operations(2)
|
|
13,959
|
|
|
|
|
0
|
|
|
13,959
|
|
||||
|
Total investments
|
|
$
|
357,434
|
|
|
|
|
|
$
|
59,758
|
|
|
$
|
417,192
|
|
|
(1)
|
Other long-term investments consist of real estate and non-real estate-related investments in joint ventures and limited partnerships, investment real estate held through direct ownership and other miscellaneous investments. For additional information regarding these investments, see “—Other Long-Term Investments” below.
|
|
(2)
|
Includes invested assets of our asset management and derivative operations. Excludes assets of our asset management operations that are managed for third- parties and those assets classified as “Separate account assets” on our balance sheet. For additional information regarding these investments, see “—Invested Assets of Other Entities and Operations” below.
|
|
|
|
December 31,
|
||||||
|
|
|
2016
|
|
2015
|
||||
|
|
|
(in millions)
|
||||||
|
Fixed maturities:
|
|
|
|
|
||||
|
Public, available-for-sale, at fair value
|
|
$
|
123,285
|
|
|
$
|
109,257
|
|
|
Public, held-to-maturity, at amortized cost
|
|
1,772
|
|
|
1,834
|
|
||
|
Private, available-for-sale, at fair value
|
|
11,646
|
|
|
9,747
|
|
||
|
Private, held-to-maturity, at amortized cost
|
|
372
|
|
|
474
|
|
||
|
Trading account assets supporting insurance liabilities, at fair value
|
|
2,166
|
|
|
2,020
|
|
||
|
Other trading account assets, at fair value
|
|
434
|
|
|
647
|
|
||
|
Equity securities, available-for-sale, at fair value
|
|
2,654
|
|
|
2,660
|
|
||
|
Commercial mortgage and other loans, at book value
|
|
11,700
|
|
|
9,756
|
|
||
|
Policy loans, at outstanding balance
|
|
2,369
|
|
|
2,208
|
|
||
|
Other long-term investments(1)
|
|
1,186
|
|
|
1,742
|
|
||
|
Short-term investments
|
|
398
|
|
|
417
|
|
||
|
Total Japanese general account investments
|
|
$
|
157,982
|
|
|
$
|
140,762
|
|
|
(1)
|
Other long-term investments consist of real estate and non-real estate-related investments in joint ventures and limited partnerships, investment real estate held through direct ownership, derivatives and other miscellaneous investments.
|
|
|
|
Year Ended December 31, 2016
|
|||||||||||||||||||
|
|
|
PFI Excluding
Closed Block Division
|
|
Closed Block
Division
|
|
Combined
|
|||||||||||||||
|
|
|
Yield(1)
|
|
Amount
|
|
Yield(1)
|
|
Amount
|
|
Yield(1)
|
|
Amount
|
|||||||||
|
|
|
($ in millions)
|
|||||||||||||||||||
|
Fixed maturities
|
|
3.95
|
%
|
|
$
|
9,515
|
|
|
4.98
|
%
|
|
$
|
1,696
|
|
|
4.07
|
%
|
|
$
|
11,211
|
|
|
Trading account assets supporting insurance liabilities
|
|
3.59
|
|
|
758
|
|
|
0.00
|
|
|
0
|
|
|
3.59
|
|
|
758
|
|
|||
|
Equity securities
|
|
5.97
|
|
|
307
|
|
|
3.43
|
|
|
59
|
|
|
5.33
|
|
|
366
|
|
|||
|
Commercial mortgage and other loans
|
|
4.32
|
|
|
1,751
|
|
|
5.06
|
|
|
476
|
|
|
4.46
|
|
|
2,227
|
|
|||
|
Policy loans
|
|
5.00
|
|
|
347
|
|
|
6.10
|
|
|
280
|
|
|
5.44
|
|
|
627
|
|
|||
|
Short-term investments and cash equivalents
|
|
0.68
|
|
|
122
|
|
|
2.23
|
|
|
20
|
|
|
0.73
|
|
|
142
|
|
|||
|
Other investments
|
|
5.67
|
|
|
473
|
|
|
6.40
|
|
|
203
|
|
|
5.87
|
|
|
676
|
|
|||
|
Gross investment income before investment expenses
|
|
3.90
|
|
|
13,273
|
|
|
5.10
|
|
|
2,734
|
|
|
4.07
|
|
|
16,007
|
|
|||
|
Investment expenses
|
|
(0.13
|
)
|
|
(413
|
)
|
|
(0.26
|
)
|
|
(156
|
)
|
|
(0.15
|
)
|
|
(569
|
)
|
|||
|
Investment income after investment expenses
|
|
3.77
|
%
|
|
12,860
|
|
|
4.84
|
%
|
|
2,578
|
|
|
3.92
|
%
|
|
15,438
|
|
|||
|
Investment results of other entities and operations(2)
|
|
|
|
82
|
|
|
|
|
0
|
|
|
|
|
82
|
|
||||||
|
Total investment income
|
|
|
|
$
|
12,942
|
|
|
|
|
$
|
2,578
|
|
|
|
|
$
|
15,520
|
|
|||
|
|
|
Year Ended December 31, 2015
|
|||||||||||||||||||
|
|
|
PFI Excluding
Closed Block Division
|
|
Closed Block
Division
|
|
Combined
|
|||||||||||||||
|
|
|
Yield(1)
|
|
Amount
|
|
Yield(1)
|
|
Amount
|
|
Yield(1)
|
|
Amount
|
|||||||||
|
|
|
($ in millions)
|
|||||||||||||||||||
|
Fixed maturities
|
|
4.03
|
%
|
|
$
|
8,876
|
|
|
4.94
|
%
|
|
$
|
1,692
|
|
|
4.15
|
%
|
|
$
|
10,568
|
|
|
Trading account assets supporting insurance liabilities
|
|
3.59
|
|
|
720
|
|
|
0.00
|
|
|
0
|
|
|
3.59
|
|
|
720
|
|
|||
|
Equity securities
|
|
5.67
|
|
|
266
|
|
|
3.49
|
|
|
70
|
|
|
5.01
|
|
|
336
|
|
|||
|
Commercial mortgage and other loans
|
|
4.58
|
|
|
1,728
|
|
|
5.42
|
|
|
512
|
|
|
4.75
|
|
|
2,240
|
|
|||
|
Policy loans
|
|
5.01
|
|
|
334
|
|
|
6.06
|
|
|
285
|
|
|
5.45
|
|
|
619
|
|
|||
|
Short-term investments and cash equivalents
|
|
0.25
|
|
|
43
|
|
|
1.14
|
|
|
12
|
|
|
0.28
|
|
|
55
|
|
|||
|
Other investments
|
|
5.91
|
|
|
489
|
|
|
7.24
|
|
|
222
|
|
|
6.27
|
|
|
711
|
|
|||
|
Gross investment income before investment expenses
|
|
3.97
|
|
|
12,456
|
|
|
5.14
|
|
|
2,793
|
|
|
4.14
|
|
|
15,249
|
|
|||
|
Investment expenses
|
|
(0.14
|
)
|
|
(394
|
)
|
|
(0.25
|
)
|
|
(140
|
)
|
|
(0.16
|
)
|
|
(534
|
)
|
|||
|
Investment income after investment expenses
|
|
3.83
|
%
|
|
12,062
|
|
|
4.89
|
%
|
|
2,653
|
|
|
3.98
|
%
|
|
14,715
|
|
|||
|
Investment results of other entities and operations(2)
|
|
|
|
114
|
|
|
|
|
0
|
|
|
|
|
114
|
|
||||||
|
Total investment income
|
|
|
|
$
|
12,176
|
|
|
|
|
$
|
2,653
|
|
|
|
|
$
|
14,829
|
|
|||
|
|
|
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
|
|
|||
|
(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.
|
|
(2)
|
Includes investment income of our asset management operations and derivative operations.
|
|
|
|
Year Ended December 31,
|
|||||||||||||||||||
|
|
|
2016
|
|
2015
|
|
2014
|
|||||||||||||||
|
|
|
Yield(1)
|
|
Amount
|
|
Yield(1)
|
|
Amount
|
|
Yield(1)
|
|
Amount
|
|||||||||
|
|
|
($ in millions)
|
|||||||||||||||||||
|
Fixed maturities
|
|
4.63
|
%
|
|
$
|
6,043
|
|
|
4.67
|
%
|
|
$
|
5,686
|
|
|
4.69
|
%
|
|
$
|
5,461
|
|
|
Trading account assets supporting insurance liabilities
|
|
3.80
|
|
|
721
|
|
|
3.79
|
|
|
688
|
|
|
3.96
|
|
|
730
|
|
|||
|
Equity securities
|
|
6.49
|
|
|
232
|
|
|
6.07
|
|
|
197
|
|
|
6.49
|
|
|
191
|
|
|||
|
Commercial mortgage and other loans
|
|
4.35
|
|
|
1,306
|
|
|
4.62
|
|
|
1,338
|
|
|
4.96
|
|
|
1,271
|
|
|||
|
Policy loans
|
|
5.49
|
|
|
252
|
|
|
5.52
|
|
|
250
|
|
|
5.66
|
|
|
253
|
|
|||
|
Short-term investments and cash equivalents
|
|
0.67
|
|
|
113
|
|
|
0.25
|
|
|
38
|
|
|
0.21
|
|
|
22
|
|
|||
|
Other investments
|
|
5.96
|
|
|
344
|
|
|
6.17
|
|
|
356
|
|
|
10.03
|
|
|
598
|
|
|||
|
Gross investment income before investment expenses
|
|
4.31
|
|
|
9,011
|
|
|
4.33
|
|
|
8,553
|
|
|
4.63
|
|
|
8,526
|
|
|||
|
Investment expenses
|
|
(0.14
|
)
|
|
(248
|
)
|
|
(0.15
|
)
|
|
(239
|
)
|
|
(0.15
|
)
|
|
(209
|
)
|
|||
|
Investment income after investment expenses
|
|
4.17
|
%
|
|
8,763
|
|
|
4.18
|
%
|
|
8,314
|
|
|
4.48
|
%
|
|
8,317
|
|
|||
|
Investment results of other entities and operations(2)
|
|
|
|
82
|
|
|
|
|
114
|
|
|
|
|
124
|
|
||||||
|
Total investment income
|
|
|
|
$
|
8,845
|
|
|
|
|
$
|
8,428
|
|
|
|
|
$
|
8,441
|
|
|||
|
(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.
|
|
(2)
|
Includes investment income of our asset management operations and derivative operations,.
|
|
|
|
Year Ended December 31,
|
|||||||||||||||||||
|
|
|
2016
|
|
2015
|
|
2014
|
|||||||||||||||
|
|
|
Yield(1)
|
|
Amount
|
|
Yield(1)
|
|
Amount
|
|
Yield(1)
|
|
Amount
|
|||||||||
|
|
|
($ in millions)
|
|||||||||||||||||||
|
Fixed maturities
|
|
3.14
|
%
|
|
$
|
3,472
|
|
|
3.23
|
%
|
|
$
|
3,190
|
|
|
3.06
|
%
|
|
$
|
3,301
|
|
|
Trading account assets supporting insurance liabilities
|
|
1.75
|
|
|
37
|
|
|
1.66
|
|
|
32
|
|
|
1.80
|
|
|
35
|
|
|||
|
Equity securities
|
|
4.80
|
|
|
75
|
|
|
4.77
|
|
|
69
|
|
|
5.06
|
|
|
84
|
|
|||
|
Commercial mortgage and other loans
|
|
4.23
|
|
|
445
|
|
|
4.45
|
|
|
390
|
|
|
4.20
|
|
|
294
|
|
|||
|
Policy loans
|
|
4.05
|
|
|
95
|
|
|
3.93
|
|
|
84
|
|
|
3.93
|
|
|
88
|
|
|||
|
Short-term investments and cash equivalents
|
|
0.78
|
|
|
9
|
|
|
0.32
|
|
|
5
|
|
|
0.24
|
|
|
4
|
|
|||
|
Other investments
|
|
5.01
|
|
|
129
|
|
|
5.32
|
|
|
133
|
|
|
6.67
|
|
|
155
|
|
|||
|
Gross investment income before investment expenses
|
|
3.26
|
|
|
4,262
|
|
|
3.35
|
|
|
3,903
|
|
|
3.18
|
|
|
3,961
|
|
|||
|
Investment expenses
|
|
(0.12
|
)
|
|
(165
|
)
|
|
(0.13
|
)
|
|
(155
|
)
|
|
(0.12
|
)
|
|
(153
|
)
|
|||
|
Total investment income
|
|
3.14
|
%
|
|
$
|
4,097
|
|
|
3.22
|
%
|
|
$
|
3,748
|
|
|
3.06
|
%
|
|
$
|
3,808
|
|
|
(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.
|
|
|
|
December 31, 2016
|
|||||
|
|
|
Amortized
Cost
|
|
% of Total
|
|||
|
|
|
($ in millions)
|
|||||
|
Corporate & government securities:
|
|
|
|
|
|||
|
Maturing in 2017
|
|
$
|
8,506
|
|
|
3.3
|
%
|
|
Maturing in 2018
|
|
8,005
|
|
|
3.1
|
|
|
|
Maturing in 2019
|
|
8,976
|
|
|
3.5
|
|
|
|
Maturing in 2020
|
|
10,093
|
|
|
3.9
|
|
|
|
Maturing in 2021
|
|
11,449
|
|
|
4.5
|
|
|
|
Maturing in 2022
|
|
10,030
|
|
|
3.9
|
|
|
|
Maturing in 2023
|
|
10,776
|
|
|
4.2
|
|
|
|
Maturing in 2024
|
|
10,572
|
|
|
4.1
|
|
|
|
Maturing in 2025
|
|
10,624
|
|
|
4.1
|
|
|
|
Maturing in 2026
|
|
10,524
|
|
|
4.1
|
|
|
|
Maturing in 2027
|
|
6,564
|
|
|
2.6
|
|
|
|
Maturing in 2028 and beyond
|
|
129,678
|
|
|
50.4
|
|
|
|
Total corporate & government securities
|
|
235,797
|
|
|
91.7
|
|
|
|
Asset-backed securities
|
|
8,182
|
|
|
3.2
|
|
|
|
Commercial mortgage-backed securities
|
|
8,883
|
|
|
3.4
|
|
|
|
Residential mortgage-backed securities
|
|
4,352
|
|
|
1.7
|
|
|
|
Total fixed maturities
|
|
$
|
257,214
|
|
|
100.0
|
%
|
|
|
|
December 31, 2016
|
|
December 31, 2015
|
||||||||||||||||||||||||||||
|
Industry(1)
|
|
Amortized
Cost
|
|
Gross
Unrealized
Gains(2)
|
|
Gross
Unrealized
Losses(2)
|
|
Fair
Value
|
|
Amortized
Cost
|
|
Gross
Unrealized
Gains(2)
|
|
Gross
Unrealized
Losses(2)
|
|
Fair
Value
|
||||||||||||||||
|
|
|
(in millions)
|
||||||||||||||||||||||||||||||
|
Corporate securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Finance
|
|
$
|
24,324
|
|
|
$
|
1,260
|
|
|
$
|
322
|
|
|
$
|
25,262
|
|
|
$
|
21,505
|
|
|
$
|
1,385
|
|
|
$
|
224
|
|
|
$
|
22,666
|
|
|
Consumer non-cyclical
|
|
22,941
|
|
|
1,918
|
|
|
423
|
|
|
24,436
|
|
|
20,732
|
|
|
2,073
|
|
|
408
|
|
|
22,397
|
|
||||||||
|
Utility
|
|
19,618
|
|
|
1,556
|
|
|
385
|
|
|
20,789
|
|
|
17,369
|
|
|
1,423
|
|
|
393
|
|
|
18,399
|
|
||||||||
|
Capital goods
|
|
10,936
|
|
|
911
|
|
|
236
|
|
|
11,611
|
|
|
10,503
|
|
|
978
|
|
|
241
|
|
|
11,240
|
|
||||||||
|
Consumer cyclical
|
|
10,348
|
|
|
792
|
|
|
143
|
|
|
10,997
|
|
|
9,223
|
|
|
846
|
|
|
146
|
|
|
9,923
|
|
||||||||
|
Foreign agencies
|
|
5,423
|
|
|
1,035
|
|
|
41
|
|
|
6,417
|
|
|
5,222
|
|
|
1,086
|
|
|
67
|
|
|
6,241
|
|
||||||||
|
Energy
|
|
9,220
|
|
|
774
|
|
|
275
|
|
|
9,719
|
|
|
10,793
|
|
|
674
|
|
|
855
|
|
|
10,612
|
|
||||||||
|
Communications
|
|
6,227
|
|
|
667
|
|
|
121
|
|
|
6,773
|
|
|
6,294
|
|
|
690
|
|
|
200
|
|
|
6,784
|
|
||||||||
|
Basic industry
|
|
5,843
|
|
|
401
|
|
|
114
|
|
|
6,130
|
|
|
5,658
|
|
|
404
|
|
|
321
|
|
|
5,741
|
|
||||||||
|
Transportation
|
|
7,442
|
|
|
625
|
|
|
116
|
|
|
7,951
|
|
|
6,536
|
|
|
605
|
|
|
105
|
|
|
7,036
|
|
||||||||
|
Technology
|
|
3,775
|
|
|
251
|
|
|
66
|
|
|
3,960
|
|
|
3,459
|
|
|
278
|
|
|
72
|
|
|
3,665
|
|
||||||||
|
Industrial other
|
|
3,653
|
|
|
226
|
|
|
92
|
|
|
3,787
|
|
|
3,547
|
|
|
245
|
|
|
73
|
|
|
3,719
|
|
||||||||
|
Total corporate securities
|
|
129,750
|
|
|
10,416
|
|
|
2,334
|
|
|
137,832
|
|
|
120,841
|
|
|
10,687
|
|
|
3,105
|
|
|
128,423
|
|
||||||||
|
Foreign government(3)
|
|
80,309
|
|
|
16,967
|
|
|
344
|
|
|
96,932
|
|
|
72,265
|
|
|
12,167
|
|
|
131
|
|
|
84,301
|
|
||||||||
|
Residential mortgage-backed
|
|
4,352
|
|
|
256
|
|
|
13
|
|
|
4,595
|
|
|
4,861
|
|
|
353
|
|
|
6
|
|
|
5,208
|
|
||||||||
|
Asset-backed securities
|
|
8,182
|
|
|
193
|
|
|
26
|
|
|
8,349
|
|
|
6,873
|
|
|
195
|
|
|
69
|
|
|
6,999
|
|
||||||||
|
Commercial mortgage-backed
|
|
8,883
|
|
|
195
|
|
|
86
|
|
|
8,992
|
|
|
7,300
|
|
|
160
|
|
|
37
|
|
|
7,423
|
|
||||||||
|
U.S. Government
|
|
17,090
|
|
|
2,725
|
|
|
924
|
|
|
18,891
|
|
|
11,479
|
|
|
2,900
|
|
|
11
|
|
|
14,368
|
|
||||||||
|
State & Municipal(4)
|
|
8,648
|
|
|
642
|
|
|
82
|
|
|
9,208
|
|
|
7,661
|
|
|
675
|
|
|
39
|
|
|
8,297
|
|
||||||||
|
Total(5)
|
|
$
|
257,214
|
|
|
$
|
31,394
|
|
|
$
|
3,809
|
|
|
$
|
284,799
|
|
|
$
|
231,280
|
|
|
$
|
27,137
|
|
|
$
|
3,398
|
|
|
$
|
255,019
|
|
|
(1)
|
Investment data has been classified based on standard industry categorizations for domestic public holdings and similar classifications by industry for all other holdings.
|
|
(2)
|
Includes
$380 million
of gross unrealized gains and
$0 million
of gross unrealized losses as of
December 31, 2016
, compared to
$316 million
of gross unrealized gains and
$0 million
of gross unrealized losses as of
December 31, 2015
, on securities classified as held-to-maturity.
|
|
(3)
|
As of both
December 31, 2016
and
2015
, based on amortized cost,
76%
represent Japanese government bonds held by our Japanese insurance operations, with no other individual country representing more than
9%
of the balance.
|
|
(4)
|
Includes securities related to the Build America Bonds program.
|
|
(5)
|
Excluded from the table above are securities held outside the general account in other entities and operations. For additional information regarding investments held outside the general account, see “—Invested Assets of Other Entities and Operations” below. Also excluded from the table above are fixed maturity securities classified as trading. See “—Trading Account Assets Supporting Insurance Liabilities” and “—Other Trading Account Assets” for additional information.
|
|
|
|
December 31, 2016
|
|
|
||||||||||||||||||||||||
|
|
|
Lowest Rating Agency Rating
|
|
|
|
|
||||||||||||||||||||||
|
|
|
AAA
|
|
AA
|
|
A
|
|
BBB
|
|
BB and
below
|
|
Total
Amortized
Cost
|
|
Total
December 31, 2015 |
||||||||||||||
|
|
|
(in millions)
|
||||||||||||||||||||||||||
|
Collateralized by sub-prime mortgages(1)
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
18
|
|
|
$
|
36
|
|
|
$
|
352
|
|
|
$
|
406
|
|
|
$
|
1,141
|
|
|
Collateralized loan obligations
|
|
6,178
|
|
|
18
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
6,196
|
|
|
4,280
|
|
|||||||
|
Collateralized by education loans(2)
|
|
28
|
|
|
370
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
398
|
|
|
392
|
|
|||||||
|
Collateralized by credit cards
|
|
116
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
116
|
|
|
201
|
|
|||||||
|
Collateralized by auto loans
|
|
818
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
818
|
|
|
518
|
|
|||||||
|
Other asset-backed securities(3)
|
|
7
|
|
|
75
|
|
|
38
|
|
|
22
|
|
|
106
|
|
|
248
|
|
|
341
|
|
|||||||
|
Total asset-backed securities(4)
|
|
$
|
7,147
|
|
|
$
|
463
|
|
|
$
|
56
|
|
|
$
|
58
|
|
|
$
|
458
|
|
|
$
|
8,182
|
|
|
$
|
6,873
|
|
|
(1)
|
While there is no market standard definition for securities collateralized by sub-prime mortgages, we define sub-prime mortgages as residential mortgages that are originated to weaker-quality obligors as indicated by weaker credit scores, as well as mortgages with higher loan-to-value ratios or limited documentation.
|
|
(2)
|
All
of the
$398 million
of education loans included above carry a Department of Education guaranty as of
December 31, 2016
.
|
|
(3)
|
Includes asset-backed securities collateralized by bond obligations, aircraft, equipment leases, franchises and timeshares.
|
|
(4)
|
Excluded from the table above are asset-backed securities held outside the general account in other entities and operations. Also excluded from the table above are asset-backed securities classified as trading.
|
|
|
|
December 31, 2016
|
|
|
||||||||||||||||||||||||
|
|
|
Lowest Rating Agency Rating
|
|
|
|
|
||||||||||||||||||||||
|
|
|
AAA
|
|
AA
|
|
A
|
|
BBB
|
|
BB and
below
|
|
Total
Fair Value
|
|
Total
December 31, 2015 |
||||||||||||||
|
|
|
(in millions)
|
||||||||||||||||||||||||||
|
Collateralized by sub-prime mortgages(1)
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
19
|
|
|
$
|
36
|
|
|
$
|
432
|
|
|
$
|
487
|
|
|
$
|
1,189
|
|
|
Collateralized loan obligations
|
|
6,231
|
|
|
18
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
6,249
|
|
|
4,317
|
|
|||||||
|
Collateralized by education loans(2)
|
|
28
|
|
|
379
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
407
|
|
|
395
|
|
|||||||
|
Collateralized by credit cards
|
|
119
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
119
|
|
|
206
|
|
|||||||
|
Collateralized by auto loans
|
|
816
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
816
|
|
|
516
|
|
|||||||
|
Other asset-backed securities(3)
|
|
6
|
|
|
76
|
|
|
43
|
|
|
22
|
|
|
124
|
|
|
271
|
|
|
376
|
|
|||||||
|
Total asset-backed securities(4)
|
|
$
|
7,200
|
|
|
$
|
473
|
|
|
$
|
62
|
|
|
$
|
58
|
|
|
$
|
556
|
|
|
$
|
8,349
|
|
|
$
|
6,999
|
|
|
(1)
|
While there is no market standard definition for securities collateralized by sub-prime mortgages, we define sub-prime mortgages as residential mortgages that are originated to weaker-quality obligors as indicated by weaker credit scores, as well as mortgages with higher loan-to-value ratios or limited documentation.
|
|
(2)
|
All
of the
$407 million
of education loans included above carry a Department of Education guaranty as of
December 31, 2016
.
|
|
(3)
|
Includes asset-backed securities collateralized by bond obligations, aircraft, equipment leases, franchises and timeshares.
|
|
(4)
|
Excluded from the table above are asset-backed securities held outside the general account in other entities and operations. Also excluded from the table above are asset-backed securities classified as trading.
|
|
|
|
December 31, 2016
|
|
December 31, 2015
|
||||||||||
|
|
|
Amortized
Cost
|
|
% of Total
|
|
Amortized
Cost
|
|
% of Total
|
||||||
|
|
|
($ in millions)
|
||||||||||||
|
By security type:
|
|
|
|
|
|
|
|
|
||||||
|
Agency pass-through securities(1)
|
|
$
|
3,803
|
|
|
87.4
|
%
|
|
$
|
4,382
|
|
|
90.1
|
%
|
|
Collateralized mortgage obligations
|
|
549
|
|
|
12.6
|
|
|
479
|
|
|
9.9
|
|
||
|
Total residential mortgage-backed securities
|
|
$
|
4,352
|
|
|
100.0
|
%
|
|
$
|
4,861
|
|
|
100.0
|
%
|
|
Portion rated AA or higher(2)
|
|
$
|
4,114
|
|
|
94.5
|
%
|
|
$
|
4,791
|
|
|
98.6
|
%
|
|
(1)
|
As of
December 31, 2016
, of these securities,
$2.834 billion
are supported by the U.S. government, and
$0.969 billion
are supported by foreign governments. As of
December 31, 2015
, of these securities,
$3.267 billion
were supported by the U.S. government, and
$1.115 billion
were supported by foreign governments.
|
|
(2)
|
Based on lowest external rating agency rating.
|
|
|
|
December 31, 2016
|
|
|
||||||||||||||||||||||||
|
|
|
Lowest Rating Agency Rating(1)
|
|
|
|
|
||||||||||||||||||||||
|
Vintage
|
|
AAA
|
|
AA
|
|
A
|
|
BBB
|
|
BB and
below
|
|
Total
Amortized
Cost
|
|
Total
December 31, 2015 |
||||||||||||||
|
|
|
(in millions)
|
||||||||||||||||||||||||||
|
2016
|
|
$
|
2,071
|
|
|
$
|
348
|
|
|
$
|
32
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
2,451
|
|
|
$
|
0
|
|
|
2015
|
|
617
|
|
|
146
|
|
|
2
|
|
|
0
|
|
|
0
|
|
|
765
|
|
|
607
|
|
|||||||
|
2014
|
|
2,474
|
|
|
2
|
|
|
2
|
|
|
0
|
|
|
0
|
|
|
2,478
|
|
|
2,420
|
|
|||||||
|
2013
|
|
2,472
|
|
|
99
|
|
|
0
|
|
|
9
|
|
|
0
|
|
|
2,580
|
|
|
2,568
|
|
|||||||
|
2012-2009
|
|
168
|
|
|
239
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
407
|
|
|
469
|
|
|||||||
|
2008-2007
|
|
101
|
|
|
43
|
|
|
3
|
|
|
0
|
|
|
0
|
|
|
147
|
|
|
113
|
|
|||||||
|
2006 & Prior
|
|
52
|
|
|
0
|
|
|
3
|
|
|
0
|
|
|
0
|
|
|
55
|
|
|
1,123
|
|
|||||||
|
Total commercial mortgage-backed securities(2)(3)(4)
|
|
$
|
7,955
|
|
|
$
|
877
|
|
|
$
|
42
|
|
|
$
|
9
|
|
|
$
|
0
|
|
|
$
|
8,883
|
|
|
$
|
7,300
|
|
|
(1)
|
The table above provides ratings as assigned by nationally recognized rating agencies as of
December 31, 2016
.
|
|
(2)
|
Excluded from the table above are commercial mortgage-backed securities held outside the general account in other entities and operations. Also excluded from the table above are commercial mortgage-backed securities classified as trading.
|
|
(3)
|
Included in the table above, as of
December 31, 2016
, are downgraded super senior securities with amortized cost of
$16 million
in AA and
$3 million
in A.
|
|
(4)
|
Included in the table above, as of
December 31, 2016
, are agency commercial mortgage-backed securities with amortized cost of
$890 million
, all rated A or higher.
|
|
|
|
December 31, 2016
|
|
|
||||||||||||||||||||||||
|
|
|
Lowest Rating Agency Rating(1)
|
|
|
|
|
||||||||||||||||||||||
|
Vintage
|
|
AAA
|
|
AA
|
|
A
|
|
BBB
|
|
BB and
below
|
|
Total
Fair Value
|
|
Total
December 31, 2015 |
||||||||||||||
|
|
|
(in millions)
|
||||||||||||||||||||||||||
|
2016
|
|
$
|
2,010
|
|
|
$
|
338
|
|
|
$
|
31
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
2,379
|
|
|
$
|
0
|
|
|
2015
|
|
620
|
|
|
143
|
|
|
2
|
|
|
0
|
|
|
0
|
|
|
765
|
|
|
601
|
|
|||||||
|
2014
|
|
2,548
|
|
|
3
|
|
|
2
|
|
|
0
|
|
|
0
|
|
|
2,553
|
|
|
2,471
|
|
|||||||
|
2013
|
|
2,561
|
|
|
102
|
|
|
0
|
|
|
8
|
|
|
0
|
|
|
2,671
|
|
|
2,621
|
|
|||||||
|
2012-2009
|
|
167
|
|
|
250
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
417
|
|
|
480
|
|
|||||||
|
2008-2007
|
|
101
|
|
|
44
|
|
|
3
|
|
|
0
|
|
|
0
|
|
|
148
|
|
|
115
|
|
|||||||
|
2006 & Prior
|
|
56
|
|
|
0
|
|
|
3
|
|
|
0
|
|
|
0
|
|
|
59
|
|
|
1,135
|
|
|||||||
|
Total commercial mortgage-backed securities(2)(3)
|
|
$
|
8,063
|
|
|
$
|
880
|
|
|
$
|
41
|
|
|
$
|
8
|
|
|
$
|
0
|
|
|
$
|
8,992
|
|
|
$
|
7,423
|
|
|
(1)
|
The table above provides ratings as assigned by nationally recognized rating agencies as of
December 31, 2016
.
|
|
(2)
|
Excluded from the table above are commercial mortgage-backed securities held outside the general account in other entities and operations. Also excluded from the table above are commercial mortgage-backed securities classified as trading.
|
|
(3)
|
Included in the table above, as of
December 31, 2016
, are agency commercial mortgage-backed securities with fair value of
$892 million
, all rated A or higher.
|
|
|
|
December 31, 2016
|
|
December 31, 2015
|
||||||||||||||||||||||||||||
|
NAIC Designation(1)(2)
|
|
Amortized
Cost
|
|
Gross
Unrealized
Gains(3)
|
|
Gross
Unrealized
Losses(3)(4)
|
|
Fair
Value
|
|
Amortized
Cost
|
|
Gross
Unrealized
Gains(3)
|
|
Gross
Unrealized
Losses(3)(4)
|
|
Fair
Value
|
||||||||||||||||
|
|
|
(in millions)
|
||||||||||||||||||||||||||||||
|
1
|
|
$
|
195,279
|
|
|
$
|
26,886
|
|
|
$
|
2,425
|
|
|
$
|
219,740
|
|
|
$
|
177,350
|
|
|
$
|
22,783
|
|
|
$
|
1,445
|
|
|
$
|
198,688
|
|
|
2
|
|
49,286
|
|
|
3,728
|
|
|
1,081
|
|
|
51,933
|
|
|
43,731
|
|
|
3,698
|
|
|
1,545
|
|
|
45,884
|
|
||||||||
|
Subtotal High or Highest Quality Securities(5)
|
|
244,565
|
|
|
30,614
|
|
|
3,506
|
|
|
271,673
|
|
|
221,081
|
|
|
26,481
|
|
|
2,990
|
|
|
244,572
|
|
||||||||
|
3
|
|
8,546
|
|
|
454
|
|
|
182
|
|
|
8,818
|
|
|
7,085
|
|
|
408
|
|
|
292
|
|
|
7,201
|
|
||||||||
|
4
|
|
2,878
|
|
|
200
|
|
|
82
|
|
|
2,996
|
|
|
2,332
|
|
|
150
|
|
|
100
|
|
|
2,382
|
|
||||||||
|
5
|
|
879
|
|
|
73
|
|
|
28
|
|
|
924
|
|
|
415
|
|
|
78
|
|
|
12
|
|
|
481
|
|
||||||||
|
6
|
|
346
|
|
|
53
|
|
|
11
|
|
|
388
|
|
|
367
|
|
|
20
|
|
|
4
|
|
|
383
|
|
||||||||
|
Subtotal Other Securities(6)(7)
|
|
12,649
|
|
|
780
|
|
|
303
|
|
|
13,126
|
|
|
10,199
|
|
|
656
|
|
|
408
|
|
|
10,447
|
|
||||||||
|
Total fixed maturities
|
|
$
|
257,214
|
|
|
$
|
31,394
|
|
|
$
|
3,809
|
|
|
$
|
284,799
|
|
|
$
|
231,280
|
|
|
$
|
27,137
|
|
|
$
|
3,398
|
|
|
$
|
255,019
|
|
|
(1)
|
Reflects equivalent ratings for investments of the international insurance operations.
|
|
(2)
|
Includes, as of
December 31, 2016
and
2015
,
918
securities with amortized cost of
$4,634 million
(fair value,
$4,759 million
) and
938
securities with amortized cost of
$4,253 million
(fair value,
$4,325 million
), respectively, that have been categorized based on expected NAIC Designations pending receipt of SVO ratings.
|
|
(3)
|
Includes
$380 million
of gross unrealized gains and
$0 million
of gross unrealized losses as of
December 31, 2016
, compared to
$316 million
of gross unrealized gains and
$0 million
of gross unrealized losses as of
December 31, 2015
, on securities classified as held-to-maturity.
|
|
(4)
|
As of
December 31, 2016
, includes gross unrealized losses of
$149 million
on public fixed maturities and
$154 million
on private fixed maturities considered to be other than high or highest quality and, as of
December 31, 2015
, includes gross unrealized losses of
$212 million
on public fixed maturities and
$196 million
on private fixed maturities considered to be other than high or highest quality.
|
|
(5)
|
On an amortized cost basis, as of
December 31, 2016
, includes
$211,753 million
of public fixed maturities and
$32,812 million
of private fixed maturities and, as of
December 31, 2015
, includes
$190,638 million
of public fixed maturities and
$30,443 million
of private fixed maturities.
|
|
(6)
|
On an amortized cost basis, as of
December 31, 2016
, includes
$7,170 million
of public fixed maturities and
$5,479 million
of private fixed maturities and, as of
December 31, 2015
, includes
$5,836 million
of public fixed maturities and
$4,363 million
of private fixed maturities.
|
|
(7)
|
On an amortized cost basis, as of
December 31, 2016
, securities considered below investment grade based on lowest of external rating agency ratings, total
$13,820 million
, or
5%
of the total fixed maturities, and include securities considered high or highest quality by the NAIC based on the rules described above.
|
|
|
|
December 31, 2016
|
|
December 31, 2015
|
||||||||||||
|
|
|
Amortized
Cost
|
|
Fair
Value
|
|
Amortized
Cost
|
|
Fair
Value
|
||||||||
|
|
|
(in millions)
|
||||||||||||||
|
Short-term investments and cash equivalents
|
|
$
|
655
|
|
|
$
|
655
|
|
|
$
|
765
|
|
|
$
|
765
|
|
|
Fixed maturities:
|
|
|
|
|
|
|
|
|
||||||||
|
Corporate securities
|
|
13,903
|
|
|
13,997
|
|
|
12,797
|
|
|
12,851
|
|
||||
|
Commercial mortgage-backed securities
|
|
2,032
|
|
|
2,052
|
|
|
1,860
|
|
|
1,862
|
|
||||
|
Residential mortgage-backed securities
|
|
1,142
|
|
|
1,150
|
|
|
1,411
|
|
|
1,428
|
|
||||
|
Asset-backed securities
|
|
1,333
|
|
|
1,349
|
|
|
1,295
|
|
|
1,299
|
|
||||
|
Foreign government bonds
|
|
915
|
|
|
926
|
|
|
680
|
|
|
694
|
|
||||
|
U.S. government authorities and agencies and obligations of U.S. states
|
|
330
|
|
|
376
|
|
|
326
|
|
|
369
|
|
||||
|
Total fixed maturities
|
|
19,655
|
|
|
19,850
|
|
|
18,369
|
|
|
18,503
|
|
||||
|
Equity securities
|
|
1,097
|
|
|
1,335
|
|
|
1,030
|
|
|
1,254
|
|
||||
|
Total trading account assets supporting insurance liabilities(1)
|
|
$
|
21,407
|
|
|
$
|
21,840
|
|
|
$
|
20,164
|
|
|
$
|
20,522
|
|
|
(1)
|
As a percentage of amortized cost,
80%
and
77%
of the portfolio was publicly-traded as of
December 31, 2016
and
2015
, respectively.
|
|
|
|
December 31, 2016
|
|
December 31, 2015
|
||||||||||||
|
|
|
Amortized
Cost
|
|
Fair
Value
|
|
Amortized
Cost
|
|
Fair
Value
|
||||||||
|
|
|
(in millions)
|
||||||||||||||
|
Short-term investments and cash equivalents
|
|
$
|
1
|
|
|
$
|
1
|
|
|
$
|
1
|
|
|
$
|
1
|
|
|
Fixed maturities
|
|
1,201
|
|
|
1,058
|
|
|
1,016
|
|
|
964
|
|
||||
|
Equity securities(1)
|
|
412
|
|
|
462
|
|
|
537
|
|
|
596
|
|
||||
|
Total other trading account assets
|
|
$
|
1,614
|
|
|
$
|
1,521
|
|
|
$
|
1,554
|
|
|
$
|
1,561
|
|
|
(1)
|
Included in equity securities are perpetual preferred stock securities that have characteristics of both debt and equity securities.
|
|
|
|
December 31, 2016
|
|
December 31, 2015
|
||||
|
|
|
(in millions)
|
||||||
|
Commercial mortgage and agricultural property loans
|
|
$
|
41,964
|
|
|
$
|
39,002
|
|
|
Uncollateralized loans
|
|
636
|
|
|
966
|
|
||
|
Residential property loans
|
|
252
|
|
|
301
|
|
||
|
Other collateralized loans
|
|
9
|
|
|
312
|
|
||
|
Total commercial mortgage and other loans(1)(2)
|
|
$
|
42,861
|
|
|
$
|
40,581
|
|
|
(1)
|
As a percentage of recorded investment gross of allowance, more than
99%
of these assets were current as of both
December 31, 2016
and
2015
.
|
|
(2)
|
Excluded from the table above are commercial mortgage and other loans held outside the general account in other entities and operations. For additional information regarding commercial mortgage and other loans held outside the general account, see “—Invested Assets of Other Entities and Operations” below.
|
|
|
|
December 31, 2016
|
|
December 31, 2015
|
||||||||||
|
|
|
Gross
Carrying
Value
|
|
% of
Total
|
|
Gross
Carrying
Value
|
|
% of
Total
|
||||||
|
|
|
($ in millions)
|
||||||||||||
|
Commercial mortgage and agricultural property loans by region:
|
|
|
|
|
|
|
|
|
||||||
|
U.S. Regions:
|
|
|
|
|
|
|
|
|
||||||
|
Pacific
|
|
$
|
13,817
|
|
|
32.9
|
%
|
|
$
|
12,285
|
|
|
31.5
|
%
|
|
South Atlantic
|
|
8,066
|
|
|
19.2
|
|
|
7,764
|
|
|
19.9
|
|
||
|
Middle Atlantic
|
|
5,476
|
|
|
13.1
|
|
|
5,271
|
|
|
13.5
|
|
||
|
East North Central
|
|
2,341
|
|
|
5.6
|
|
|
2,704
|
|
|
6.9
|
|
||
|
West South Central
|
|
4,506
|
|
|
10.7
|
|
|
3,945
|
|
|
10.1
|
|
||
|
Mountain
|
|
1,796
|
|
|
4.3
|
|
|
1,697
|
|
|
4.4
|
|
||
|
New England
|
|
1,774
|
|
|
4.2
|
|
|
1,752
|
|
|
4.5
|
|
||
|
West North Central
|
|
621
|
|
|
1.5
|
|
|
608
|
|
|
1.6
|
|
||
|
East South Central
|
|
595
|
|
|
1.4
|
|
|
533
|
|
|
1.4
|
|
||
|
Subtotal-U.S.
|
|
38,992
|
|
|
92.9
|
|
|
36,559
|
|
|
93.8
|
|
||
|
Europe
|
|
1,725
|
|
|
4.1
|
|
|
1,608
|
|
|
4.1
|
|
||
|
Asia
|
|
504
|
|
|
1.2
|
|
|
406
|
|
|
1.0
|
|
||
|
Other
|
|
743
|
|
|
1.8
|
|
|
429
|
|
|
1.1
|
|
||
|
Total commercial mortgage and agricultural property loans
|
|
$
|
41,964
|
|
|
100.0
|
%
|
|
$
|
39,002
|
|
|
100.0
|
%
|
|
|
|
December 31, 2016
|
|
December 31, 2015
|
||||||||||
|
|
|
Gross
Carrying
Value
|
|
% of
Total
|
|
Gross
Carrying
Value
|
|
% of
Total
|
||||||
|
|
|
($ in millions)
|
||||||||||||
|
Commercial mortgage and agricultural property loans by property type:
|
|
|
|
|
|
|
|
|
||||||
|
Industrial
|
|
$
|
6,899
|
|
|
16.5
|
%
|
|
$
|
6,510
|
|
|
16.7
|
%
|
|
Retail
|
|
6,562
|
|
|
15.6
|
|
|
6,813
|
|
|
17.5
|
|
||
|
Office
|
|
9,619
|
|
|
22.9
|
|
|
8,498
|
|
|
21.8
|
|
||
|
Apartments/Multi-Family
|
|
11,488
|
|
|
27.4
|
|
|
10,079
|
|
|
25.8
|
|
||
|
Other
|
|
3,368
|
|
|
8.0
|
|
|
3,133
|
|
|
8.0
|
|
||
|
Agricultural properties
|
|
2,279
|
|
|
5.4
|
|
|
2,130
|
|
|
5.5
|
|
||
|
Hospitality
|
|
1,749
|
|
|
4.2
|
|
|
1,839
|
|
|
4.7
|
|
||
|
Total commercial mortgage and agricultural property loans
|
|
$
|
41,964
|
|
|
100.0
|
%
|
|
$
|
39,002
|
|
|
100.0
|
%
|
|
|
|
December 31, 2016
|
||||||||||||||
|
|
|
Debt Service Coverage Ratio
|
||||||||||||||
|
|
|
>
1.2x
|
|
1.0x
to
< 1.2x
|
|
Less
than
1.0x
|
|
Total
Commercial Mortgage and Agricultural Property
Loans
|
||||||||
|
Loan-to-Value Ratio
|
|
(in millions)
|
||||||||||||||
|
0%-59.99%
|
|
$
|
23,986
|
|
|
$
|
420
|
|
|
$
|
553
|
|
|
$
|
24,959
|
|
|
60%-69.99%
|
|
10,730
|
|
|
363
|
|
|
115
|
|
|
11,208
|
|
||||
|
70%-79.99%
|
|
4,862
|
|
|
597
|
|
|
57
|
|
|
5,516
|
|
||||
|
80% or greater
|
|
130
|
|
|
50
|
|
|
101
|
|
|
281
|
|
||||
|
Total commercial mortgage and agricultural property loans
|
|
$
|
39,708
|
|
|
$
|
1,430
|
|
|
$
|
826
|
|
|
$
|
41,964
|
|
|
|
|
December 31, 2016
|
|||||
|
|
|
Gross
Carrying
Value
|
|
% of
Total
|
|||
|
Year of Origination
|
|
($ in millions)
|
|||||
|
2016
|
|
$
|
7,482
|
|
|
17.8
|
%
|
|
2015
|
|
7,743
|
|
|
18.5
|
|
|
|
2014
|
|
7,136
|
|
|
17.0
|
|
|
|
2013
|
|
7,488
|
|
|
17.8
|
|
|
|
2012
|
|
3,807
|
|
|
9.1
|
|
|
|
2011
|
|
3,436
|
|
|
8.2
|
|
|
|
2010
|
|
1,975
|
|
|
4.7
|
|
|
|
2009 & Prior
|
|
2,897
|
|
|
6.9
|
|
|
|
Total commercial mortgage and agricultural property loans
|
|
$
|
41,964
|
|
|
100.0
|
%
|
|
|
|
December 31, 2016
|
|||||
|
|
|
Gross
Carrying Value
|
|
% of Total
|
|||
|
|
|
($ in millions)
|
|||||
|
Vintage
|
|
|
|
|
|||
|
Maturing in 2017
|
|
$
|
1,786
|
|
|
4.1
|
%
|
|
Maturing in 2018
|
|
3,075
|
|
|
7.2
|
|
|
|
Maturing in 2019
|
|
3,243
|
|
|
7.6
|
|
|
|
Maturing in 2020
|
|
4,179
|
|
|
9.8
|
|
|
|
Maturing in 2021
|
|
3,546
|
|
|
8.3
|
|
|
|
Maturing in 2022
|
|
3,084
|
|
|
7.2
|
|
|
|
Maturing in 2023
|
|
3,024
|
|
|
7.1
|
|
|
|
Maturing in 2024
|
|
2,743
|
|
|
6.4
|
|
|
|
Maturing in 2025
|
|
4,415
|
|
|
10.3
|
|
|
|
Maturing in 2026
|
|
4,334
|
|
|
10.1
|
|
|
|
Maturing in 2027
|
|
1,508
|
|
|
3.5
|
|
|
|
Maturing in 2028 and beyond
|
|
7,924
|
|
|
18.4
|
|
|
|
Total commercial mortgage and other loans
|
|
$
|
42,861
|
|
|
100.0
|
%
|
|
|
|
December 31, 2016
|
|
December 31, 2015
|
||||
|
|
|
(in millions)
|
||||||
|
Allowance, beginning of year
|
|
$
|
95
|
|
|
$
|
99
|
|
|
Addition to (release of) allowance for losses
|
|
(6
|
)
|
|
(4
|
)
|
||
|
Charge-offs, net of recoveries
|
|
0
|
|
|
0
|
|
||
|
Change in foreign exchange
|
|
1
|
|
|
0
|
|
||
|
Allowance, end of period
|
|
$
|
90
|
|
|
$
|
95
|
|
|
Loan-specific reserve
|
|
$
|
6
|
|
|
$
|
0
|
|
|
Portfolio reserve
|
|
$
|
84
|
|
|
$
|
95
|
|
|
|
|
December 31, 2016
|
|
December 31, 2015
|
||||||||||||||||||||||||||||
|
|
|
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Fair
Value
|
|
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Fair
Value
|
||||||||||||||||
|
|
|
(in millions)
|
||||||||||||||||||||||||||||||
|
Non-redeemable preferred stocks
|
|
$
|
9
|
|
|
$
|
0
|
|
|
$
|
2
|
|
|
$
|
7
|
|
|
$
|
21
|
|
|
$
|
1
|
|
|
$
|
1
|
|
|
$
|
21
|
|
|
Mutual funds(1)
|
|
3,193
|
|
|
545
|
|
|
2
|
|
|
3,736
|
|
|
2,918
|
|
|
333
|
|
|
76
|
|
|
3,175
|
|
||||||||
|
Other common stocks
|
|
2,207
|
|
|
1,229
|
|
|
16
|
|
|
3,420
|
|
|
2,033
|
|
|
1,339
|
|
|
31
|
|
|
3,341
|
|
||||||||
|
Total equity securities(2)
|
|
$
|
5,409
|
|
|
$
|
1,774
|
|
|
$
|
20
|
|
|
$
|
7,163
|
|
|
$
|
4,972
|
|
|
$
|
1,673
|
|
|
$
|
108
|
|
|
$
|
6,537
|
|
|
(1)
|
Includes mutual fund shares representing our interest in the underlying assets of certain investments supporting corporate-owned life insurance. These mutual funds invest primarily in high yield bonds.
|
|
(2)
|
Amounts presented exclude investments in private equity and hedge funds and other investments which are reported in “Other long-term investments.”
|
|
|
|
December 31, 2016
|
|
December 31, 2015
|
||||
|
|
|
(in millions)
|
||||||
|
Joint ventures and limited partnerships:
|
|
|
|
|
||||
|
Private equity
|
|
$
|
2,619
|
|
|
$
|
2,927
|
|
|
Hedge funds
|
|
1,708
|
|
|
1,160
|
|
||
|
Real estate-related
|
|
451
|
|
|
285
|
|
||
|
Real estate held through direct ownership
|
|
1,677
|
|
|
1,456
|
|
||
|
Other(1)
|
|
776
|
|
|
721
|
|
||
|
Total other long-term investments
|
|
$
|
7,231
|
|
|
$
|
6,549
|
|
|
(1)
|
Primarily includes derivatives and member and activity stock held in the Federal Home Loan Banks of New York and Boston. For additional information regarding our holdings in the Federal Home Loan Banks of New York and Boston, see Note 14 to the Consolidated Financial Statements.
|
|
|
|
December 31, 2016
|
|
December 31, 2015
|
||||
|
|
|
(in millions)
|
||||||
|
Fixed maturities:
|
|
|
|
|
||||
|
Public, available-for-sale, at fair value
|
|
$
|
237
|
|
|
$
|
94
|
|
|
Private, available-for-sale, at fair value
|
|
3
|
|
|
39
|
|
||
|
Other trading account assets, at fair value
|
|
3,959
|
|
|
12,609
|
|
||
|
Equity securities, available-for-sale, at fair value
|
|
13
|
|
|
11
|
|
||
|
Commercial mortgage and other loans, at book value(1)
|
|
571
|
|
|
302
|
|
||
|
Other long-term investments
|
|
1,032
|
|
|
516
|
|
||
|
Short-term investments
|
|
14
|
|
|
388
|
|
||
|
Total investments
|
|
$
|
5,829
|
|
|
$
|
13,959
|
|
|
(1)
|
Book value is generally based on unpaid principal balance net of any allowance for losses, the lower of cost or fair value, or fair value, depending on the loan.
|
|
•
|
We executed the Variable Annuities Recapture, which enabled the Individual Annuities segment to distribute $1.0 billion of highly liquid assets to Prudential Financial and is expected to result in more efficient management of capital and liquidity associated with our variable annuities business. See “—Results of Operations—Variable Annuities Recapture and Risk Management Strategy” for further details;
|
|
•
|
We repurchased $2.0 billion of shares of our Common Stock and declared aggregate Common Stock dividends of $1.2 billion;
|
|
•
|
We retired $750 million of our outstanding senior debt through maturities;
|
|
•
|
We repurchased $500 million of our outstanding senior debt through a tender offer;
|
|
•
|
We restructured the terms of a $3.0 billion captive financing facility for Regulation XXX reserves by redeeming $300 million of outstanding debt under the facility and converting an additional $300 million of outstanding debt to a credit-linked note structure;
|
|
•
|
We obtained additional financing for Guideline AXXX and Regulation XXX reserves by increasing the amounts outstanding under captive financing facilities by $553 million and $406 million, respectively; and
|
|
•
|
A subsidiary, Prudential Holdings of Japan, entered into a new ¥100 billion three-year syndicated, unsecured committed credit facility, providing us with an additional source of liquidity.
|
|
|
|
December 31,
|
||||||
|
|
|
2016
|
|
2015(1)
|
||||
|
|
|
|
|
|
||||
|
|
|
(in millions)
|
||||||
|
Equity(2)
|
|
$
|
31,242
|
|
|
$
|
29,605
|
|
|
Junior subordinated debt (i.e., hybrid securities)
|
|
5,817
|
|
|
5,811
|
|
||
|
Other capital debt
|
|
5,822
|
|
|
6,069
|
|
||
|
Total capital
|
|
$
|
42,881
|
|
|
$
|
41,485
|
|
|
(1)
|
Prior period had been revised to conform to current period presentation due to the adoption of ASU 2015-03 regarding the classification of debt issuance costs. For more information, see Note 2 to the Consolidated Financial Statements.
|
|
(2)
|
Amounts attributable to Prudential Financial, excluding AOCI.
|
|
|
Ratio
|
|
|
Prudential Insurance(1)
|
484
|
%
|
|
PALAC
|
550
|
%
|
|
Composite Major U.S. Insurance Subsidiaries(2)
|
486
|
%
|
|
(1)
|
Includes PRIAC, Pruco Life, PLNJ (which is a subsidiary of Pruco Life) and PLIC.
|
|
(2)
|
Includes Prudential Insurance and its subsidiaries, as noted above, and PALAC. Composite RBC is not reported to regulators and is based on the summation of total adjusted capital and risk charges for the included companies as determined under statutory accounting and RBC guidance to calculate a composite numerator and denominator, respectively, for purposes of calculating the composite ratio.
|
|
|
Ratio
|
|
|
Prudential of Japan consolidated(1)
|
858
|
%
|
|
Gibraltar Life consolidated(2)
|
975
|
%
|
|
(1)
|
Includes Prudential Trust Co., Ltd., a subsidiary of Prudential of Japan.
|
|
(2)
|
Includes PGFL, a subsidiary of Gibraltar Life.
|
|
•
|
Equity market exposure affecting the statutory capital of the Company as a whole, which we manage through our equity hedge program and on-balance sheet and contingent sources of capital;
|
|
•
|
Our decision to manage a portion of our interest rate risk internally, on a net basis, at an enterprise level. In implementing this strategy, we execute intercompany derivative transactions between our Corporate and Other operations and certain business segments. We limit our exposure to the resulting net interest rate risk at the enterprise level through options embedded in our hedging strategy that may be exercised if interest rates decline below certain thresholds. During 2016, primarily as a result of the change in our Individual Annuities’ risk management strategy, we replaced a significant portion of these intercompany derivatives with external derivatives and expect to manage most of this interest rate risk within the business segments in the future. For more information, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Corporate and Other” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Individual Annuities.”
|
|
|
|
Dividend Amount
|
|
Shares Repurchased
|
|||||||||||
|
Quarterly period ended:
|
|
Per Share
|
|
Aggregate
|
|
Shares
|
|
Total Cost
|
|||||||
|
|
|
|
|
|
|
|
|
|
|||||||
|
|
|
(in millions, except per share data)
|
|||||||||||||
|
December 31, 2016
|
|
$
|
0.70
|
|
|
$
|
307
|
|
|
6.6
|
|
|
$
|
625
|
|
|
September 30, 2016
|
|
$
|
0.70
|
|
|
$
|
309
|
|
|
8.1
|
|
|
$
|
625
|
|
|
June 30, 2016
|
|
$
|
0.70
|
|
|
$
|
313
|
|
|
5.0
|
|
|
$
|
375
|
|
|
March 31, 2016
|
|
$
|
0.70
|
|
|
$
|
316
|
|
|
5.4
|
|
|
$
|
375
|
|
|
|
|
Dividend Amount
|
|
Shares Repurchased
|
|||||||||||
|
Year ended:
|
|
Per Share
|
|
Aggregate
|
|
Shares
|
|
Total Cost
|
|||||||
|
|
|
|
|
|
|
|
|
|
|||||||
|
|
|
(in millions, except per share data)
|
|||||||||||||
|
December 31, 2015
|
|
$
|
2.44
|
|
|
$
|
1,115
|
|
|
12.1
|
|
|
$
|
1,000
|
|
|
December 31, 2014
|
|
$
|
2.17
|
|
|
$
|
1,005
|
|
|
11.6
|
|
|
$
|
1,000
|
|
|
December 31, 2013
|
|
$
|
1.73
|
|
|
$
|
810
|
|
|
10.0
|
|
|
$
|
750
|
|
|
December 31, 2012
|
|
$
|
1.60
|
|
|
$
|
749
|
|
|
11.5
|
|
|
$
|
650
|
|
|
|
|
Year Ended December 31,
|
||||||
|
|
|
2016
|
|
2015
|
||||
|
|
|
|
|
|
||||
|
|
|
(in millions)
|
||||||
|
Sources:
|
|
|
|
|
||||
|
Dividends and/or returns of capital from subsidiaries(1)
|
|
$
|
3,843
|
|
|
$
|
4,632
|
|
|
Net distributions from subsidiaries associated with Variable Annuities Recapture
|
|
1,042
|
|
|
0
|
|
||
|
Proceeds from stock-based compensation and exercise of stock options
|
|
625
|
|
|
379
|
|
||
|
Net income tax receipts
|
|
544
|
|
|
0
|
|
||
|
Interest income from subsidiaries on intercompany agreements, net of interest paid
|
|
214
|
|
|
257
|
|
||
|
Net receipts under intercompany loan agreements(2)
|
|
43
|
|
|
3,271
|
|
||
|
Proceeds from the issuance of junior subordinated debt (hybrid securities)
|
|
0
|
|
|
1,000
|
|
||
|
Proceeds from the issuance of retail medium-term notes
|
|
0
|
|
|
180
|
|
||
|
Other, net
|
|
0
|
|
|
190
|
|
||
|
Total sources
|
|
6,311
|
|
|
9,909
|
|
||
|
Uses:
|
|
|
|
|
||||
|
Share repurchases
|
|
$
|
2,000
|
|
|
$
|
1,013
|
|
|
Common Stock dividends(3)
|
|
1,300
|
|
|
1,117
|
|
||
|
Capital contributions to subsidiaries(4)
|
|
939
|
|
|
2,545
|
|
||
|
Interest paid on external debt
|
|
902
|
|
|
970
|
|
||
|
Maturities of long-term senior debt, excluding retail medium-term notes
|
|
750
|
|
|
0
|
|
||
|
Repurchase of medium-term notes
|
|
500
|
|
|
77
|
|
||
|
Class B Stock repurchase settlement
|
|
119
|
|
|
651
|
|
||
|
Cash settlements - terminated swaps
|
|
95
|
|
|
0
|
|
||
|
Repayments from short-term debt, net of proceeds
|
|
16
|
|
|
17
|
|
||
|
Maturities of medium-term notes, excluding retail medium-term notes
|
|
0
|
|
|
2,148
|
|
||
|
Expenditures for new home office construction
|
|
0
|
|
|
579
|
|
||
|
Net income tax payments
|
|
0
|
|
|
46
|
|
||
|
Other, net
|
|
199
|
|
|
0
|
|
||
|
Total uses
|
|
6,820
|
|
|
9,163
|
|
||
|
Net increase (decrease) in highly liquid assets
|
|
$
|
(509
|
)
|
|
$
|
746
|
|
|
(1)
|
2016
includes dividends and/or returns of capital of $1,238 million from Prudential Annuities Holding Company, of which $1,140 million was from PALAC, $939 million from international insurance subsidiaries, $900 million from Prudential Insurance, $746 million from Asset Management subsidiaries, and $20 million from other subsidiaries. Excludes dividends and/or returns of capital associated with the Variable Annuities Recapture.
2015
includes dividends and/or returns of capital of $1,950 million from Prudential Insurance, $1,818 million from international insurance subsidiaries, $552 million from Prudential Annuities Holding Company, of which $450 million was from PALAC, $266 million from Asset Management subsidiaries, and $46 million from other subsidiaries.
|
|
(2)
|
2016
includes net receipts from subsidiaries of $378 million from PLAZ, $116 million from PLNJ, net proceeds of $644 million from the issuance of notes to international insurance subsidiaries
,
offset by net borrowing of $600 million by Prudential Universal Reinsurance Company, $490 million by Asset Management subsidiaries and $5 million by other subsidiaries
.
Excludes receipts associated with the Variable Annuities Recapture.
2015
includes net receipts from subsidiaries of $2,113 million from Pruco Re, $300 million from Prudential Arizona Reinsurance Term Company, $187 million from Asset Management subsidiaries and $6 million from other subsidiaries, net proceeds of $820 million from the issuance of notes to international insurance subsidiaries, and net proceeds of $496 million from the issuance of notes to various affiliates to finance new home office construction, offset by net borrowing of $317 million by Pruco Life and $34 million by PLNJ, and net repayments of $200 million to Pruco Re, and $100 million to PGIM Real Estate Finance.
|
|
(3)
|
Includes cash payments made on dividends declared in prior periods.
|
|
(4)
|
2016
includes capital contributions of $824 million to international insurance subsidiaries ($159 million which was related to our indirect investment in AFP Habitat), $36 million to Pruco Re, $74 million to Asset Management subsidiaries, and $5 million to other subsidiaries. Excludes capital contributions associated with the Variable Annuities Recapture.
2015
includes capital contributions of $1,960 million to Pruco Re, $268 million to Asset Management subsidiaries, $222 million to international insurance subsidiaries and $95 million to other subsidiaries.
|
|
|
|
December 31,
|
||||||
|
|
|
2016
|
|
2015
|
||||
|
|
|
|
|
|
||||
|
|
|
(in billions)
|
||||||
|
Prudential Insurance
|
|
$
|
190.5
|
|
|
$
|
172.0
|
|
|
PLIC
|
|
53.7
|
|
|
54.0
|
|
||
|
Pruco Life
|
|
35.4
|
|
|
32.4
|
|
||
|
PRIAC
|
|
26.4
|
|
|
25.3
|
|
||
|
PALAC
|
|
13.4
|
|
|
6.0
|
|
||
|
Other(1)
|
|
(83.2
|
)
|
|
(62.6
|
)
|
||
|
Total future policy benefits and policyholders’ account balances(2)
|
|
$
|
236.2
|
|
|
$
|
227.1
|
|
|
(1)
|
Includes the impact of intercompany eliminations.
|
|
(2)
|
Amounts are reflected gross of affiliated reinsurance recoverables.
|
|
|
|
December 31,
|
||||||
|
|
|
2016
|
|
2015
|
||||
|
|
|
|
|
|
||||
|
|
|
(in billions)
|
||||||
|
Prudential of Japan(1)
|
|
$
|
42.0
|
|
|
$
|
37.4
|
|
|
Gibraltar Life(2)
|
|
95.2
|
|
|
84.3
|
|
||
|
All other international insurance subsidiaries(3)
|
|
12.7
|
|
|
12.4
|
|
||
|
Total future policy benefits and policyholders’ account balances(4)
|
|
$
|
149.9
|
|
|
$
|
134.1
|
|
|
(1)
|
As of
December 31, 2016
and
2015
, $10.3 billion and $9.1 billion, respectively, of the insurance-related liabilities for Prudential of Japan are associated with U.S. dollar-denominated products that are coinsured to our domestic insurance operations and supported by U.S. dollar-denominated assets.
|
|
(2)
|
Includes PGFL, a subsidiary of Gibraltar Life.
|
|
(3)
|
Represents our international insurance operations, excluding Japan.
|
|
(4)
|
Amounts are reflected gross of affiliated reinsurance recoverables.
|
|
|
|
December 31, 2016
|
|
|
|
|
||||||||||||||||||||||
|
|
|
Prudential
Insurance
|
|
PLIC
|
|
PRIAC
|
|
PALAC
|
|
Pruco Life
|
|
Total
|
|
December 31, 2015
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
|
|
(in billions)
|
||||||||||||||||||||||||||
|
Cash and short-term investments
|
|
$
|
6.5
|
|
|
$
|
2.1
|
|
|
$
|
0.7
|
|
|
$
|
3.0
|
|
|
$
|
0.1
|
|
|
$
|
12.4
|
|
|
$
|
10.3
|
|
|
Fixed maturity investments(1):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
High or highest quality
|
|
97.6
|
|
|
33.4
|
|
|
19.4
|
|
|
9.1
|
|
|
5.2
|
|
|
164.7
|
|
|
147.5
|
|
|||||||
|
Other than high or highest quality
|
|
7.0
|
|
|
3.6
|
|
|
1.7
|
|
|
0.5
|
|
|
0.4
|
|
|
13.2
|
|
|
12.3
|
|
|||||||
|
Subtotal
|
|
104.6
|
|
|
37.0
|
|
|
21.1
|
|
|
9.6
|
|
|
5.6
|
|
|
177.9
|
|
|
159.8
|
|
|||||||
|
Public equity securities
|
|
0.3
|
|
|
2.7
|
|
|
0.0
|
|
|
0.0
|
|
|
0.0
|
|
|
3.0
|
|
|
3.2
|
|
|||||||
|
Total
|
|
$
|
111.4
|
|
|
$
|
41.8
|
|
|
$
|
21.8
|
|
|
$
|
12.6
|
|
|
$
|
5.7
|
|
|
$
|
193.3
|
|
|
$
|
173.3
|
|
|
(1)
|
Excludes fixed maturities designated as held-to-maturity. Classified by NAIC or equivalent rating.
|
|
|
|
December 31, 2016
|
|
|
||||||||||||||||
|
|
|
Prudential
of Japan
|
|
Gibraltar
Life(1)
|
|
All
Other(2)
|
|
Total
|
|
December 31, 2015
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
(in billions)
|
||||||||||||||||||
|
Cash and short-term investments
|
|
$
|
0.9
|
|
|
$
|
2.1
|
|
|
$
|
2.4
|
|
|
$
|
5.4
|
|
|
$
|
3.5
|
|
|
Fixed maturity investments(3):
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
High or highest quality(4)
|
|
33.7
|
|
|
88.2
|
|
|
15.9
|
|
|
137.8
|
|
|
123.8
|
|
|||||
|
Other than high or highest quality
|
|
0.8
|
|
|
2.4
|
|
|
1.1
|
|
|
4.3
|
|
|
3.3
|
|
|||||
|
Subtotal
|
|
34.5
|
|
|
90.6
|
|
|
17.0
|
|
|
142.1
|
|
|
127.1
|
|
|||||
|
Public equity securities
|
|
1.8
|
|
|
2.3
|
|
|
0.7
|
|
|
4.8
|
|
|
4.6
|
|
|||||
|
Total
|
|
$
|
37.2
|
|
|
$
|
95.0
|
|
|
$
|
20.1
|
|
|
$
|
152.3
|
|
|
$
|
135.2
|
|
|
(1)
|
Includes PGFL, a subsidiary of Gibraltar Life.
|
|
(2)
|
Represents our international insurance operations, excluding Japan.
|
|
(3)
|
Excludes fixed maturities designated as held-to-maturity. Classified by NAIC or equivalent rating.
|
|
(4)
|
As of
December 31, 2016
, $98.0 billion, or 71%, were invested in government or government agency bonds.
|
|
•
|
Income Hedges—We hedge a portion of our prospective yen-based earnings streams by entering into external forward currency derivative contracts that effectively fix the currency exchange rates for that portion of earnings, thereby reducing volatility from foreign currency exchange rate movements. As of
December 31, 2016
, we have hedged 100%, 73% and 28% of expected yen-based earnings for 2017, 2018 and 2019, respectively.
|
|
•
|
Equity Hedges—We hold both internal and external hedges primarily to hedge our U.S. dollar-equivalent equity. These hedges also mitigate volatility in the solvency margins of yen-based subsidiaries resulting from changes in the market value of their U.S. dollar-denominated investments hedging our U.S. dollar-equivalent equity attributable to changes in the yen-U.S. dollar exchange rate.
|
|
|
|
Year ended December 31,
|
||||||
|
|
|
2016
|
|
2015
|
||||
|
|
|
(in millions)
|
||||||
|
Cash Settlements:
|
|
|
|
|
||||
|
Income Hedges (External)(1)
|
|
$
|
38
|
|
|
$
|
286
|
|
|
Equity Hedges:
|
|
|
|
|
||||
|
Internal(2)
|
|
(57
|
)
|
|
1,061
|
|
||
|
External
|
|
652
|
|
|
(84
|
)
|
||
|
Total Equity Hedges
|
|
$
|
595
|
|
|
$
|
977
|
|
|
Total Cash Settlements
|
|
$
|
633
|
|
|
$
|
1,263
|
|
|
|
|
As of December 31,
|
||||||
|
|
|
2016
|
|
2015
|
||||
|
|
|
(in millions)
|
||||||
|
Assets (Liabilities):
|
|
|
|
|
||||
|
Income Hedges (External)(3)
|
|
$
|
85
|
|
|
$
|
162
|
|
|
Equity Hedges:
|
|
|
|
|
||||
|
Internal(2)
|
|
802
|
|
|
964
|
|
||
|
External
|
|
32
|
|
|
699
|
|
||
|
Total Equity Hedges(4)
|
|
$
|
834
|
|
|
$
|
1,663
|
|
|
Total Assets (Liabilities)
|
|
$
|
919
|
|
|
$
|
1,825
|
|
|
(1)
|
Includes non-yen related cash settlements of $17 million and $5 million for the year ended
December 31, 2016
and
2015
, respectively, both of which are primarily denominated in Korean won.
|
|
(2)
|
Represents internal transactions between international-based and U.S.-based entities. Amounts noted are from the U.S.-based entities’ perspectives.
|
|
(3)
|
Includes non-yen related assets of $41 million and $29 million as of
December 31, 2016
and
2015
, respectively, both of which are primarily denominated in Korean won.
|
|
(4)
|
As of
December 31, 2016
, approximately $(186) million, $364 million and $657 million of the net market value is scheduled to settle in 2017, 2018, and thereafter, respectively. The net market value of the assets (liabilities) will vary with changing market conditions to the extent there are no corresponding offsetting positions.
|
|
|
December 31, 2016
|
|
December 31, 2015
|
||||||||||||||||||||
|
|
PFI
Excluding Closed Block Division |
|
Closed
Block Division |
|
Consolidated
|
|
PFI
Excluding Closed Block Division |
|
Closed
Block Division |
|
Consolidated
|
||||||||||||
|
|
($ in millions)
|
||||||||||||||||||||||
|
Securities sold under agreements to repurchase
|
$
|
4,906
|
|
|
$
|
2,700
|
|
|
$
|
7,606
|
|
|
$
|
5,421
|
|
|
$
|
2,461
|
|
|
$
|
7,882
|
|
|
Cash collateral for loaned securities
|
3,057
|
|
|
1,276
|
|
|
4,333
|
|
|
2,095
|
|
|
1,401
|
|
|
3,496
|
|
||||||
|
Securities sold but not yet purchased
|
2
|
|
|
0
|
|
|
2
|
|
|
2
|
|
|
0
|
|
|
2
|
|
||||||
|
Total(1)
|
$
|
7,965
|
|
|
$
|
3,976
|
|
|
$
|
11,941
|
|
|
$
|
7,518
|
|
|
$
|
3,862
|
|
|
$
|
11,380
|
|
|
Portion of above securities that may be returned to the Company overnight requiring immediate return of the cash collateral(2)
|
$
|
3,583
|
|
|
$
|
1,631
|
|
|
$
|
5,214
|
|
|
$
|
5,574
|
|
|
$
|
2,117
|
|
|
$
|
7,691
|
|
|
Weighted average maturity, in days(3)
|
9
|
|
|
6
|
|
|
|
|
8
|
|
|
17
|
|
|
|
||||||||
|
(1)
|
The daily weighted average outstanding balance for the year ended
December 31, 2016
and
2015
was $8,436 million and $8,221 million, respectively, for PFI excluding the Closed Block division, and $4,249 million and $4,755 million, respectively, for the Closed Block division.
|
|
(2)
|
Amount for PFI excluding the Closed Block division as of December 31, 2015 includes $2,256 million of securities that had a term greater than one day due to the timing of the January 1, 2016 holiday.
|
|
(3)
|
Excludes securities that may be returned to the Company overnight.
|
|
|
December 31, 2016
|
|
December 31, 2015(1)
|
||||||||||||||||||||
|
|
Prudential
Financial
|
|
Subsidiaries |
|
Consolidated
|
|
Prudential
Financial
|
|
Subsidiaries |
|
Consolidated
|
||||||||||||
|
|
(in millions)
|
||||||||||||||||||||||
|
General obligation short-term debt:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Commercial paper
|
$
|
65
|
|
|
$
|
525
|
|
|
$
|
590
|
|
|
$
|
80
|
|
|
$
|
384
|
|
|
$
|
464
|
|
|
Current portion of long-term debt
|
470
|
|
|
0
|
|
|
470
|
|
|
751
|
|
|
1
|
|
|
752
|
|
||||||
|
Subtotal
|
535
|
|
|
525
|
|
|
1,060
|
|
|
831
|
|
|
385
|
|
|
1,216
|
|
||||||
|
General obligation long-term debt:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Senior debt
|
9,572
|
|
|
727
|
|
|
10,299
|
|
|
10,543
|
|
|
1,323
|
|
|
11,866
|
|
||||||
|
Junior subordinated debt
|
5,817
|
|
|
0
|
|
|
5,817
|
|
|
5,811
|
|
|
0
|
|
|
5,811
|
|
||||||
|
Surplus notes (2)
|
0
|
|
|
1,339
|
|
|
1,339
|
|
|
0
|
|
|
1,352
|
|
|
1,352
|
|
||||||
|
Subtotal
|
15,389
|
|
|
2,066
|
|
|
17,455
|
|
|
16,354
|
|
|
2,675
|
|
|
19,029
|
|
||||||
|
Total general obligations
|
15,924
|
|
|
2,591
|
|
|
18,515
|
|
|
17,185
|
|
|
3,060
|
|
|
20,245
|
|
||||||
|
Limited and non-recourse borrowings (3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Current portion of long-term debt
|
0
|
|
|
73
|
|
|
73
|
|
|
0
|
|
|
0
|
|
|
0
|
|
||||||
|
Long-term debt
|
0
|
|
|
586
|
|
|
586
|
|
|
0
|
|
|
565
|
|
|
565
|
|
||||||
|
Subtotal
|
0
|
|
|
659
|
|
|
659
|
|
|
0
|
|
|
565
|
|
|
565
|
|
||||||
|
Total borrowings
|
$
|
15,924
|
|
|
$
|
3,250
|
|
|
$
|
19,174
|
|
|
$
|
17,185
|
|
|
$
|
3,625
|
|
|
$
|
20,810
|
|
|
(1)
|
Prior period has been revised to conform to current period presentation due to the adoption of ASU 2015-03 regarding the classification of debt issuance costs. For more information, see Note 2 to the Consolidated Financial Statements.
|
|
(2)
|
Amounts are net of assets under set-off arrangements of
$5,859 million
and
$4,889 million
, as of December 31, 2016 and 2015, respectively.
|
|
(3)
|
Limited and non-recourse borrowing represents mortgage debt of our subsidiaries that has recourse only to real estate investment property.
|
|
|
|
Surplus Notes
|
|
Outstanding as of
December 31, 2016
|
|
|
|||||||
|
Credit-Linked Note Structures:
|
|
Original
Issue Dates
|
|
Maturity
Dates
|
|
|
Facility
Size
|
||||||
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
($ in millions)
|
|||||||||||
|
XXX
|
|
2011-2014
|
|
2021-2024
|
|
$
|
1,750
|
|
(1)
|
|
$
|
2,000
|
|
|
AXXX
|
|
2013-2014
|
|
2033
|
|
2,653
|
|
|
|
3,500
|
|
||
|
XXX
|
|
2014-2016
|
|
2027-2034
|
|
1,900
|
|
(2)
|
|
1,900
|
|
||
|
XXX
|
|
2014
|
|
2024
|
|
1,456
|
|
|
|
1,750
|
|
||
|
Total Credit-Linked Note Structures
|
|
|
|
|
|
$
|
7,759
|
|
|
|
$
|
9,150
|
|
|
(1)
|
Prudential Financial has agreed to reimburse any amounts paid under the credit-linked notes issued in this structure.
|
|
(2)
|
The $1.9 billion of surplus notes represents an intercompany transaction that eliminates upon consolidation. Prudential Financial has agreed to reimburse amounts paid under credit-linked notes issued in this structure up to $1.0 billion.
|
|
(1)
|
A.M. Best Company, which we refer to as A.M. Best, financial strength ratings for insurance companies range from “A++ (superior)” to “s (suspended).” A rating of A+ is the second highest of sixteen rating categories. A.M. Best long-term credit ratings range from “aaa (exceptional)” to “s (suspended).” A.M. Best short-term credit ratings range from “AMB-1+,” which represents an strongest ability to repay short-term debt obligations, to “s(suspended).”
|
|
(2)
|
Standard & Poor’s Rating Services, which we refer to as S&P, financial strength ratings for insurance companies range from “AAA (extremely strong)” to “D (default).” A rating of AA- is the fourth highest of twenty-three rating categories. S&P’s long-term issue credit ratings range from “AAA (extremely strong)” to “D (default).” S&P short-term ratings range from “A-1 (highest category)” to “D (default).”
|
|
(3)
|
Moody’s Investors Service, Inc., which we refer to as Moody’s, insurance financial strength ratings range from “Aaa (exceptional)” to “C (lowest).” A rating of A1 is the fifth highest of twenty-one rating categories. Numeric modifiers are used to refer to the ranking within the group—with 1 being the highest and 3 being the lowest. These modifiers are used to indicate relative strength within a category. Moody’s credit ratings range from “Aaa (highest)” to “C (default)”. Moody’s short-term ratings range from “Prime-1 (P-1),” which represents a superior ability for repayment of senior short-term debt obligations, to “Prime-3 (P-3),” which represents an acceptable ability for repayment of such obligations. Issuers rated “Not Prime” do not fall within any of the Prime rating categories.
|
|
(4)
|
Fitch Ratings Inc., which we refer to as Fitch, financial strength ratings range from “AAA (exceptionally strong)” to “C (distressed).” A rating of AA- is the fourth highest of nineteen rating categories. Fitch long-term credit ratings range from “AAA (highest credit quality),” which denotes exceptionally strong capacity for timely payment of financial commitments, to “D (default).” Investment grade ratings range between “AAA” and “BBB.” Short-term ratings range from “F1+ (highest credit quality)” to “D (default).”
|
|
(5)
|
This rating for Prudential Life Insurance Company of Taiwan, Inc. was affirmed on November 17, 2016 by Taiwan Ratings Corporation, a partner of S&P.
|
|
|
|
Estimated Payments Due by Period
|
||||||||||||||||||
|
|
|
Total
|
|
2017
|
|
2018-2019
|
|
2020-2021
|
|
2022 and
thereafter
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
(in millions)
|
||||||||||||||||||
|
Short-term and long-term debt obligations(1)
|
|
$
|
38,931
|
|
|
$
|
2,097
|
|
|
$
|
4,811
|
|
|
$
|
3,361
|
|
|
$
|
28,662
|
|
|
Operating and capital lease obligations(2)
|
|
718
|
|
|
150
|
|
|
235
|
|
|
148
|
|
|
185
|
|
|||||
|
Purchase obligations:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Commitments to purchase or fund investments(3)
|
|
6,376
|
|
|
5,486
|
|
|
533
|
|
|
212
|
|
|
145
|
|
|||||
|
Commercial mortgage loan commitments(4)
|
|
1,984
|
|
|
1,643
|
|
|
327
|
|
|
0
|
|
|
14
|
|
|||||
|
Other liabilities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Insurance liabilities(5)
|
|
1,124,645
|
|
|
44,024
|
|
|
69,170
|
|
|
72,569
|
|
|
938,882
|
|
|||||
|
Other(6)
|
|
12,157
|
|
|
11,966
|
|
|
85
|
|
|
53
|
|
|
53
|
|
|||||
|
Total
|
|
$
|
1,184,811
|
|
|
$
|
65,366
|
|
|
$
|
75,161
|
|
|
$
|
76,343
|
|
|
$
|
967,941
|
|
|
(1)
|
The estimated payments due by period for long-term debt reflects the contractual maturities of principal, as disclosed in Note 14 to the Consolidated Financial Statements, as well as estimated future interest payments. The payment of principal and estimated future interest for short-term debt are reflected in estimated payments due in 2017. The estimate for future interest payments includes the effect of derivatives that qualify for hedge accounting treatment. See Note 14 to the Consolidated Financial Statements for additional information concerning our short-term and long-term debt.
|
|
(2)
|
The estimated payments due by period for operating and capital leases reflect the future minimum lease payments under non-cancelable operating and capital leases, as disclosed in Note 23 to the Consolidated Financial Statements.
|
|
(3)
|
As discussed in Note 23 to the Consolidated Financial Statements, we have commitments to purchase or fund investments, some of which are contingent upon events or circumstances not under our control, including those at the discretion of our counterparties. The timing of the fulfillment of certain of these commitments cannot be estimated, therefore the settlement of these obligations are reflected in estimated payments due in less than one year. Commitments to purchase or fund investments include $374 million that we anticipate will ultimately be funded from our separate accounts.
|
|
(4)
|
As discussed in Note 23 to the Consolidated Financial Statements, loan commitments of our commercial mortgage operations, which are legally binding commitments to extend credit to a counterparty, have been reflected in the contractual obligations table above principally based on the expiration date of the commitment; however, it is possible these loan commitments could be funded prior to their expiration date. In certain circumstances the counterparty may also extend the date of the expiration in exchange for a fee.
|
|
(5)
|
The estimated cash flows due by period for insurance liabilities reflect future estimated cash payments to be made to policyholders and others for future policy benefits, policyholders’ account balances, policyholder’s dividends, reinsurance payables and separate account liabilities, net of premium receipts and reinsurance recoverables. These future estimated cash flows for current policies in force generally reflect our best estimate economic and actuarial assumptions. These cash flows are undiscounted with respect to interest. The sum of the cash flows shown for all years in the table of $1,125 billion exceeds the corresponding liability amounts of approximately $682 billion included in the Consolidated Financial Statements as of December 31, 2016. Separate account liabilities are legally insulated from general account obligations, and it is generally expected these liabilities will be fully funded by separate account assets and their related cash flows. We have made significant assumptions to determine the future estimated cash flows related to the underlying policies and contracts. Due to the significance of the assumptions used, actual cash flows will differ, possibly materially, from these estimates.
|
|
(6)
|
The estimated payments due by period for other liabilities includes securities sold under agreements to repurchase, cash collateral for loaned securities, liabilities for unrecognized tax benefits, bank customer liabilities, and other miscellaneous liabilities. Amounts presented in the table also exclude $2,150 billion of notes issued by consolidated VIE’s which recourse for these obligations is limited to the assets of the respective VIE and do not have recourse to the general credit of the company.
|
|
•
|
Audit Committee: oversees risks related to operational risks, financial controls, legal, regulatory and compliance risks, and the overall risk management governance structure and risk management function.
|
|
•
|
Finance Committee: oversees risks involving our capital and liquidity management, the incurrence and repayment of borrowings, the capital structure, the funding of benefit plans and statutory insurance reserves. It also oversees the strength of the finance function. The Finance Committee reviews and recommends for approval to the Board our capital plan. The Finance Committee also receives regular updates on the sources and uses of capital relative to plan, as well as on our Capital Protection Framework.
|
|
•
|
Investment Committee: oversees investment and market risk and the strength of the investment function. The Investment Committee approves investment and market risk limits for Prudential Financial and for Prudential Insurance’s general account based on asset class, issuer, credit quality and geography.
|
|
•
|
Compensation Committee: oversees our compensation programs so that incentives are aligned with appropriate risk taking.
|
|
•
|
Corporate Governance and Business Ethics Committee: oversees our political contributions, lobbying expenses and overall political strategy, as well as our environmental, sustainability and corporate social responsibility.
|
|
•
|
Risk Committee: oversees the governance of significant risks throughout the Company and the establishment and ongoing monitoring of our risk profile, risk capacity and risk appetite. The Risk Committee also serves to coordinate the risk oversight functions of the other committees of the Board.
|
|
•
|
the risk that we will not receive contractual payments on a timely basis on fixed maturity investments (for example, credit default risk);
|
|
•
|
the risk that our fixed maturity investments lose value due to a deterioration of credit quality (for example, the probability of default rises or the likelihood of recovery on a default deteriorates);
|
|
•
|
the risk that a counterparty on derivatives, securities lending, reinsurance or other transactions does not meet its contractual obligations to us; and
|
|
•
|
the risk that values of our non-coupon, equity and/or real estate equity investments decline.
|
|
•
|
Interest rate risk arising from asset/liability duration mismatches within our general account investments as well as invested assets of other entities and operations. For further information, see “—General Account Investments—Management of Investments” and “—General Account Investments—Invested Assets of Other Entities and Operations” above.
|
|
•
|
Equity risk primarily arising from unhedged equity exposure in our insurance liabilities, principally within our Annuities segment. For further information, see “—Individual Annuities—Variable Annuity Risks and Risk Mitigants” above.
|
|
•
|
Foreign currency exchange rate risk arising from assets that are invested in a different currency than the related liability, as well as the unhedged portion of the Company’s earnings from, and capital supporting, operations in a foreign currency. For further information, see “—International Insurance Division—Foreign Currency Exchange Rate Movements and Related Hedging Strategies” above.
|
|
•
|
Mortality risk, or the risk that death claims are greater than expected, primarily within our Individual Life, Group Insurance and International Insurance segments, or the risk that policyholders survive longer than expected, primarily within our Retirement, Individual Annuities and International Insurance segments;
|
|
•
|
Morbidity risk, or the risk that health claims from sickness or disability are greater than expected, primarily within our Group Insurance and International Insurance segments as well as from long-term care policies within Divested Businesses; and
|
|
•
|
Policyholder behavior risk, or the risk that our customers’ persistency experience or utilization experience differs from our expectations.
|
|
•
|
Legal and regulatory compliance risk
|
|
•
|
Sales practices risk
|
|
•
|
Fraud (internal and external) risk
|
|
•
|
Reputational risk
|
|
•
|
Employee risk
|
|
•
|
Technology risk, including data security, system failures and processing errors
|
|
•
|
Financial reporting risk
|
|
•
|
Extreme events risk, such as loss of people and/or infrastructure caused by natural disasters, terrorism, disease, etc.
|
|
•
|
Information risk
|
|
•
|
Vendor risk
|
|
•
|
Measures of price sensitivity to market changes (e.g., interest rates, equity index prices, foreign exchange);
|
|
•
|
Asset/liability mismatch analytics;
|
|
•
|
Stress scenario testing;
|
|
•
|
Hedging programs; and
|
|
•
|
Risk management governance, including policies, limits, and a committee that oversees investment and market risk. For additional information regarding our overall risk management framework and governance structure, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Risk Management” above.
|
|
•
|
Asset/Liability Management: Managing assets to liability-based measures. For example, investment policies identify target durations for assets based on liability characteristics and asset portfolios are managed to within ranges around them. This mitigates potential unanticipated economic losses from interest rate movements.
|
|
•
|
Hedging non-strategic exposures. For example, our investment policies for our general account portfolios generally require hedging currency risk for cash flows not offset by similarly denominated liabilities.
|
|
•
|
Management of portfolio concentration risk. For example, ongoing monitoring and management at the enterprise level of key rate, currency and other concentration risks support diversification efforts to mitigate exposure to individual markets and sources of risk.
|
|
•
|
Net investment spread between the amounts that we are required to pay and the rate of return we are able to earn on investments for certain products supported by general account investments;
|
|
•
|
Asset-based fees earned on assets under management or contractholder account values;
|
|
•
|
Estimated total gross profits and the amortization of deferred policy acquisition and other costs;
|
|
•
|
Net exposure to the guarantees provided under certain products; and
|
|
•
|
Capital levels of our regulated entities.
|
|
|
|
As of December 31, 2016
|
|
As of December 31, 2015
|
||||||||||||||||||||
|
|
|
Notional
|
|
Fair
Value
|
|
Hypothetical
Change in
Fair Value
|
|
Notional
|
|
Fair
Value
|
|
Hypothetical
Change in
Fair Value
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
|
(in millions)
|
||||||||||||||||||||||
|
Financial assets with interest rate risk:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Fixed maturities(1)
|
|
|
|
$
|
347,246
|
|
|
$
|
(33,171
|
)
|
|
|
|
$
|
322,207
|
|
|
$
|
(27,832
|
)
|
||||
|
Commercial mortgage and other loans
|
|
|
|
54,283
|
|
|
(2,626
|
)
|
|
|
|
51,853
|
|
|
(2,369
|
)
|
||||||||
|
Derivatives with interest rate risk:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Swaps
|
|
$
|
209,406
|
|
|
7,097
|
|
|
(5,415
|
)
|
|
$
|
219,511
|
|
|
8,423
|
|
|
(5,960
|
)
|
||||
|
Futures
|
|
32,555
|
|
|
49
|
|
|
(995
|
)
|
|
28,538
|
|
|
10
|
|
|
(131
|
)
|
||||||
|
Options
|
|
25,403
|
|
|
166
|
|
|
284
|
|
|
89,107
|
|
|
232
|
|
|
(868
|
)
|
||||||
|
Forwards
|
|
21,530
|
|
|
(519
|
)
|
|
(20
|
)
|
|
17,809
|
|
|
204
|
|
|
(5
|
)
|
||||||
|
Synthetic GICs
|
|
77,197
|
|
|
5
|
|
|
(1
|
)
|
|
72,585
|
|
|
7
|
|
|
0
|
|
||||||
|
Variable annuity and other living benefit feature embedded derivatives(2)
|
|
|
|
(8,238
|
)
|
|
5,386
|
|
|
|
|
(8,434
|
)
|
|
5,072
|
|
||||||||
|
Financial liabilities with interest rate risk(3):
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Short-term and long-term debt
|
|
|
|
(21,079
|
)
|
|
3,049
|
|
|
|
|
(22,522
|
)
|
|
3,214
|
|
||||||||
|
Policyholders’ account balances—investment contracts
|
|
|
|
(100,045
|
)
|
|
3,570
|
|
|
|
|
(94,271
|
)
|
|
3,302
|
|
||||||||
|
Net estimated potential loss
|
|
|
|
|
|
$
|
(29,939
|
)
|
|
|
|
|
|
$
|
(25,577
|
)
|
||||||||
|
(1)
|
Includes fixed maturities classified as “trading account assets supporting insurance liabilities” and other fixed maturities classified as trading securities under U.S. GAAP, but are held for “other than trading” activities in our segments that offer insurance, retirement and annuities products. Includes approximately
$345 billion
and
$320 billion
as of
December 31, 2016
and
2015
, respectively, of fixed maturities classified as “available-for-sale”, where unrealized gains and losses are recorded in AOCI.
|
|
(2)
|
Excludes any offsetting impact of derivative instruments purchased to hedge changes in the embedded derivatives. Amounts reported net of third-party reinsurance.
|
|
(3)
|
Excludes approximately
$286 billion
and
$267 billion
as of
December 31, 2016
and
2015
, respectively, of insurance reserve and deposit liabilities which are not considered financial liabilities. We believe that the interest rate sensitivities of these insurance liabilities would serve as an offset to the net interest rate risk of the financial assets and liabilities, including investment contracts.
|
|
|
|
December 31, 2016
|
|
December 31, 2015
|
||||
|
|
|
(Increase) / Decrease in
Embedded Derivative Liability
|
|
(Increase) / Decrease in
Embedded Derivative Liability
|
||||
|
|
|
|
|
|
||||
|
|
|
(in millions)
|
||||||
|
Increase in credit spread by 50 basis points
|
|
$
|
1,964
|
|
|
$
|
1,714
|
|
|
Decrease in credit spread by 50 basis points
|
|
$
|
(1,726
|
)
|
|
$
|
(2,047
|
)
|
|
•
|
Asset-based fees earned on assets under management or contractholder account value;
|
|
•
|
Estimated total gross profits and the amortization of deferred policy acquisition and other costs; and
|
|
•
|
Net exposure to the guarantees provided under certain products.
|
|
|
|
As of December 31, 2016
|
|
As of December 31, 2015
|
||||||||||||||||||||
|
|
|
Notional
|
|
Fair
Value
|
|
Hypothetical
Change in
Fair Value
|
|
Notional
|
|
Fair
Value
|
|
Hypothetical
Change in
Fair Value
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
|
(in millions)
|
||||||||||||||||||||||
|
Equity securities(1)
|
|
|
|
$
|
12,139
|
|
|
$
|
(1,214
|
)
|
|
|
|
$
|
11,626
|
|
|
$
|
(1,163
|
)
|
||||
|
Equity-based derivatives(2)
|
|
$
|
31,558
|
|
|
(285
|
)
|
|
1,137
|
|
|
$
|
68,011
|
|
|
(38
|
)
|
|
1,917
|
|
||||
|
Variable annuity and other living benefit feature embedded derivatives(2)(3)
|
|
|
|
(8,238
|
)
|
|
(1,116
|
)
|
|
|
|
(8,434
|
)
|
|
(1,355
|
)
|
||||||||
|
Net estimated potential loss
|
|
|
|
|
|
$
|
(1,193
|
)
|
|
|
|
|
|
$
|
(601
|
)
|
||||||||
|
(1)
|
Includes equity securities classified as “trading account assets supporting insurance liabilities” and other equity securities classified as trading securities under U.S. GAAP, but are held for “other than trading” activities in our segments that offer insurance, retirement and annuities products.
|
|
(2)
|
The notional and fair value of equity-based derivatives and the fair value of variable annuity and other living benefit feature embedded derivatives are also reflected in amounts under “Market Risk Related to Interest Rates” above, and are not cumulative.
|
|
(3)
|
Excludes any offsetting impact of derivative instruments purchased to hedge changes in the embedded derivatives. Amounts reported net of third-party reinsurance.
|
|
|
|
As of December 31, 2016
|
|
|
As of December 31, 2015
|
|||||||||||||
|
|
|
Fair
Value
|
|
Hypothetical
Change in
Fair Value
|
|
|
Fair
Value
|
|
Hypothetical
Change in
Fair Value
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
(in millions)
|
||||||||||||||||
|
Unhedged portion of equity investment in international subsidiaries and foreign currency denominated investments in domestic general account portfolio
|
|
$
|
5,003
|
|
|
$
|
(500
|
)
|
|
|
$
|
3,934
|
|
|
$
|
(393
|
)
|
|
|
|
Page
Number
|
|
|
|
|
|
2016
|
|
2015
|
||||
|
ASSETS
|
|
|
|
||||
|
Fixed maturities, available-for-sale, at fair value (amortized cost: 2016 – $292,581; 2015 – $265,416)(1)
|
$
|
321,419
|
|
|
$
|
290,323
|
|
|
Fixed maturities, held-to-maturity, at amortized cost (fair value: 2016 – $2,524; 2015 – $2,624)(1)
|
2,144
|
|
|
2,308
|
|
||
|
Trading account assets supporting insurance liabilities, at fair value(1)
|
21,840
|
|
|
20,522
|
|
||
|
Other trading account assets, at fair value(1)
|
5,764
|
|
|
14,458
|
|
||
|
Equity securities, available-for-sale, at fair value (cost: 2016 – $7,149; 2015 – $6,847)
|
9,748
|
|
|
9,274
|
|
||
|
Commercial mortgage and other loans (includes $519 and $274 measured at fair value under the fair value option as of December 31, 2016 and 2015, respectively)(1)
|
52,779
|
|
|
50,559
|
|
||
|
Policy loans
|
11,755
|
|
|
11,657
|
|
||
|
Other long-term investments (includes $1,556 and $1,322 measured at fair value under the fair value option as of December 31, 2016 and 2015, respectively)(1)
|
11,283
|
|
|
9,986
|
|
||
|
Short-term investments
|
7,508
|
|
|
8,105
|
|
||
|
Total investments
|
444,240
|
|
|
417,192
|
|
||
|
Cash and cash equivalents(1)
|
14,127
|
|
|
17,612
|
|
||
|
Accrued investment income(1)
|
3,204
|
|
|
3,110
|
|
||
|
Deferred policy acquisition costs
|
17,661
|
|
|
16,718
|
|
||
|
Value of business acquired
|
2,314
|
|
|
2,828
|
|
||
|
Other assets(1)(2)
|
14,780
|
|
|
14,225
|
|
||
|
Separate account assets
|
287,636
|
|
|
285,570
|
|
||
|
TOTAL ASSETS
|
$
|
783,962
|
|
|
$
|
757,255
|
|
|
LIABILITIES AND EQUITY
|
|
|
|
||||
|
LIABILITIES
|
|
|
|
||||
|
Future policy benefits
|
$
|
240,908
|
|
|
$
|
224,384
|
|
|
Policyholders’ account balances
|
145,205
|
|
|
136,784
|
|
||
|
Policyholders’ dividends
|
5,711
|
|
|
5,578
|
|
||
|
Securities sold under agreements to repurchase
|
7,606
|
|
|
7,882
|
|
||
|
Cash collateral for loaned securities
|
4,333
|
|
|
3,496
|
|
||
|
Income taxes
|
10,412
|
|
|
8,714
|
|
||
|
Short-term debt
|
1,133
|
|
|
1,216
|
|
||
|
Long-term debt(2)
|
18,041
|
|
|
19,594
|
|
||
|
Other liabilities(1)
|
14,739
|
|
|
13,517
|
|
||
|
Notes issued by consolidated variable interest entities (includes $1,839 and $8,597 measured at fair value under the fair value option as of December 31, 2016 and 2015, respectively)(1)
|
2,150
|
|
|
8,597
|
|
||
|
Separate account liabilities
|
287,636
|
|
|
285,570
|
|
||
|
Total liabilities
|
737,874
|
|
|
715,332
|
|
||
|
COMMITMENTS AND CONTINGENT LIABILITIES (See Note 23)
|
|
|
|
||||
|
EQUITY
|
|
|
|
||||
|
Preferred Stock ($.01 par value; 10,000,000 shares authorized; none issued)
|
0
|
|
|
0
|
|
||
|
Common Stock ($.01 par value; 1,500,000,000 shares authorized; 660,111,339 shares issued as of both December 31, 2016 and 2015)
|
6
|
|
|
6
|
|
||
|
Additional paid-in capital
|
24,606
|
|
|
24,482
|
|
||
|
Common Stock held in treasury, at cost (230,537,166 and 213,009,970 shares as of December 31, 2016 and 2015, respectively)
|
(15,316
|
)
|
|
(13,814
|
)
|
||
|
Accumulated other comprehensive income (loss)
|
14,621
|
|
|
12,285
|
|
||
|
Retained earnings
|
21,946
|
|
|
18,931
|
|
||
|
Total Prudential Financial, Inc. equity
|
45,863
|
|
|
41,890
|
|
||
|
Noncontrolling interests
|
225
|
|
|
33
|
|
||
|
Total equity
|
46,088
|
|
|
41,923
|
|
||
|
TOTAL LIABILITIES AND EQUITY
|
$
|
783,962
|
|
|
$
|
757,255
|
|
|
(1)
|
See Note 5 for details of balances associated with variable interest entities.
|
|
(2)
|
Prior period amounts are presented on a basis consistent with the current period presentation, reflecting the adoption of ASU 2015-03. See Note 2 for additional information.
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
REVENUES
|
|
|
|
|
|
||||||
|
Premiums
|
$
|
30,964
|
|
|
$
|
28,521
|
|
|
$
|
29,293
|
|
|
Policy charges and fee income
|
5,906
|
|
|
5,972
|
|
|
6,179
|
|
|||
|
Net investment income
|
15,520
|
|
|
14,829
|
|
|
15,256
|
|
|||
|
Asset management and service fees
|
3,752
|
|
|
3,772
|
|
|
3,719
|
|
|||
|
Other income (loss)
|
443
|
|
|
0
|
|
|
(1,978
|
)
|
|||
|
Realized investment gains (losses), net:
|
|
|
|
|
|
||||||
|
Other-than-temporary impairments on fixed maturity securities
|
(269
|
)
|
|
(180
|
)
|
|
(127
|
)
|
|||
|
Other-than-temporary impairments on fixed maturity securities transferred to Other comprehensive income
|
47
|
|
|
39
|
|
|
71
|
|
|||
|
Other realized investment gains (losses), net
|
2,416
|
|
|
4,166
|
|
|
1,692
|
|
|||
|
Total realized investment gains (losses), net
|
2,194
|
|
|
4,025
|
|
|
1,636
|
|
|||
|
Total revenues
|
58,779
|
|
|
57,119
|
|
|
54,105
|
|
|||
|
BENEFITS AND EXPENSES
|
|
|
|
|
|
||||||
|
Policyholders’ benefits
|
33,632
|
|
|
30,627
|
|
|
31,587
|
|
|||
|
Interest credited to policyholders’ account balances
|
3,761
|
|
|
3,479
|
|
|
4,263
|
|
|||
|
Dividends to policyholders
|
2,025
|
|
|
2,212
|
|
|
2,716
|
|
|||
|
Amortization of deferred policy acquisition costs
|
1,877
|
|
|
2,120
|
|
|
1,973
|
|
|||
|
General and administrative expenses
|
11,779
|
|
|
10,912
|
|
|
11,807
|
|
|||
|
Total benefits and expenses
|
53,074
|
|
|
49,350
|
|
|
52,346
|
|
|||
|
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES AND EQUITY IN EARNINGS OF OPERATING JOINT VENTURES
|
5,705
|
|
|
7,769
|
|
|
1,759
|
|
|||
|
Total income tax expense (benefit)
|
1,335
|
|
|
2,072
|
|
|
349
|
|
|||
|
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE EQUITY IN EARNINGS OF OPERATING JOINT VENTURES
|
4,370
|
|
|
5,697
|
|
|
1,410
|
|
|||
|
Equity in earnings of operating joint ventures, net of taxes
|
49
|
|
|
15
|
|
|
16
|
|
|||
|
INCOME (LOSS) FROM CONTINUING OPERATIONS
|
4,419
|
|
|
5,712
|
|
|
1,426
|
|
|||
|
Income (loss) from discontinued operations, net of taxes
|
0
|
|
|
0
|
|
|
12
|
|
|||
|
NET INCOME (LOSS)
|
4,419
|
|
|
5,712
|
|
|
1,438
|
|
|||
|
Less: Income (loss) attributable to noncontrolling interests
|
51
|
|
|
70
|
|
|
57
|
|
|||
|
NET INCOME (LOSS) ATTRIBUTABLE TO PRUDENTIAL FINANCIAL, INC
|
$
|
4,368
|
|
|
$
|
5,642
|
|
|
$
|
1,381
|
|
|
EARNINGS PER SHARE(1)
|
|
|
|
|
|
||||||
|
Basic earnings per share-Common Stock:
|
|
|
|
|
|
||||||
|
Income (loss) from continuing operations attributable to Prudential Financial, Inc.
|
$
|
9.85
|
|
|
$
|
12.37
|
|
|
$
|
3.23
|
|
|
Income (loss) from discontinued operations, net of taxes
|
0.00
|
|
|
0.00
|
|
|
0.02
|
|
|||
|
Net income (loss) attributable to Prudential Financial, Inc.
|
$
|
9.85
|
|
|
$
|
12.37
|
|
|
$
|
3.25
|
|
|
Diluted earnings per share-Common Stock:
|
|
|
|
|
|
||||||
|
Income (loss) from continuing operations attributable to Prudential Financial, Inc.
|
$
|
9.71
|
|
|
$
|
12.17
|
|
|
$
|
3.20
|
|
|
Income (loss) from discontinued operations, net of taxes
|
0.00
|
|
|
0.00
|
|
|
0.03
|
|
|||
|
Net income (loss) attributable to Prudential Financial, Inc.
|
$
|
9.71
|
|
|
$
|
12.17
|
|
|
$
|
3.23
|
|
|
Dividends declared per share of Common Stock
|
$
|
2.80
|
|
|
$
|
2.44
|
|
|
$
|
2.17
|
|
|
(1)
|
For 2016 and 2015, represents consolidated earnings per share of Common Stock. For 2014, represents earnings of the Company’s former Financial Services Businesses per share of Common Stock. See Note 16 for additional information.
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
NET INCOME (LOSS)
|
$
|
4,419
|
|
|
$
|
5,712
|
|
|
$
|
1,438
|
|
|
Other comprehensive income (loss), before tax:
|
|
|
|
|
|
||||||
|
Foreign currency translation adjustments for the period
|
256
|
|
|
(287
|
)
|
|
(1,081
|
)
|
|||
|
Net unrealized investment gains (losses)
|
3,683
|
|
|
(5,486
|
)
|
|
13,730
|
|
|||
|
Defined benefit pension and postretirement unrecognized periodic benefit (cost)
|
(254
|
)
|
|
(264
|
)
|
|
(1,043
|
)
|
|||
|
Total
|
3,685
|
|
|
(6,037
|
)
|
|
11,606
|
|
|||
|
Less: Income tax expense (benefit) related to other comprehensive income (loss)
|
1,305
|
|
|
(2,213
|
)
|
|
4,249
|
|
|||
|
Other comprehensive income (loss), net of taxes
|
2,380
|
|
|
(3,824
|
)
|
|
7,357
|
|
|||
|
Comprehensive income (loss)
|
6,799
|
|
|
1,888
|
|
|
8,795
|
|
|||
|
Less: Comprehensive income (loss) attributable to noncontrolling interests
|
95
|
|
|
11
|
|
|
45
|
|
|||
|
Comprehensive income (loss) attributable to Prudential Financial, Inc.
|
$
|
6,704
|
|
|
$
|
1,877
|
|
|
$
|
8,750
|
|
|
|
Common
Stock
|
|
Additional
Paid-in
Capital
|
|
Retained
Earnings
|
|
Common
Stock
Held In
Treasury
|
|
Class B
Stock
Held in
Treasury
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
|
Total
Prudential
Financial, Inc.
Equity
|
|
Noncontrolling
Interests
|
|
Total
Equity
|
||||||||||||||||||
|
Balance, December 31, 2013
|
$
|
6
|
|
|
$
|
24,475
|
|
|
$
|
14,531
|
|
|
$
|
(12,415
|
)
|
|
$
|
0
|
|
|
$
|
8,681
|
|
|
$
|
35,278
|
|
|
$
|
603
|
|
|
$
|
35,881
|
|
|
Common and Class B Stock acquired
|
|
|
|
|
|
|
(1,000
|
)
|
|
(651
|
)
|
|
|
|
(1,651
|
)
|
|
|
|
(1,651
|
)
|
||||||||||||||
|
Contributions from noncontrolling interests
|
|
|
(4
|
)
|
|
|
|
|
|
|
|
|
|
(4
|
)
|
|
107
|
|
|
103
|
|
||||||||||||||
|
Distributions to noncontrolling interests
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(175
|
)
|
|
(175
|
)
|
||||||||||||||||
|
Consolidations/(deconsolidations) of noncontrolling interests
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1
|
)
|
|
(1
|
)
|
||||||||||||||||
|
Stock-based compensation programs
|
|
|
94
|
|
|
|
|
|
327
|
|
|
|
|
|
|
421
|
|
|
|
|
421
|
|
|||||||||||||
|
Dividends declared on Common Stock
|
|
|
|
|
(1,005
|
)
|
|
|
|
|
|
|
|
(1,005
|
)
|
|
|
|
(1,005
|
)
|
|||||||||||||||
|
Dividends declared on Class B Stock
|
|
|
|
|
(19
|
)
|
|
|
|
|
|
|
|
(19
|
)
|
|
|
|
(19
|
)
|
|||||||||||||||
|
Comprehensive income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
Net income (loss)
|
|
|
|
|
1,381
|
|
|
|
|
|
|
|
|
1,381
|
|
|
57
|
|
|
1,438
|
|
||||||||||||||
|
Other comprehensive income (loss), net of tax
|
|
|
|
|
|
|
|
|
|
|
7,369
|
|
|
7,369
|
|
|
(12
|
)
|
|
7,357
|
|
||||||||||||||
|
Total comprehensive income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
8,750
|
|
|
45
|
|
|
8,795
|
|
|||||||||||||||
|
Balance, December 31, 2014
|
6
|
|
|
24,565
|
|
|
14,888
|
|
|
(13,088
|
)
|
|
(651
|
)
|
|
16,050
|
|
|
41,770
|
|
|
579
|
|
|
42,349
|
|
|||||||||
|
Common Stock acquired
|
|
|
|
|
|
|
(1,000
|
)
|
|
|
|
|
|
(1,000
|
)
|
|
|
|
(1,000
|
)
|
|||||||||||||||
|
Class B Stock canceled
|
|
|
(167
|
)
|
|
(484
|
)
|
|
|
|
651
|
|
|
|
|
0
|
|
|
|
|
0
|
|
|||||||||||||
|
Contributions from noncontrolling interests
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
28
|
|
|
28
|
|
||||||||||||||||
|
Distributions to noncontrolling interests
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(437
|
)
|
|
(437
|
)
|
||||||||||||||||
|
Consolidations/(deconsolidations) of noncontrolling interests
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(148
|
)
|
|
(148
|
)
|
||||||||||||||||
|
Stock-based compensation programs
|
|
|
84
|
|
|
|
|
274
|
|
|
|
|
|
|
358
|
|
|
|
|
358
|
|
||||||||||||||
|
Dividends declared on Common Stock
|
|
|
|
|
(1,115
|
)
|
|
|
|
|
|
|
|
(1,115
|
)
|
|
|
|
(1,115
|
)
|
|||||||||||||||
|
Comprehensive income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
Net income (loss)
|
|
|
|
|
5,642
|
|
|
|
|
|
|
|
|
5,642
|
|
|
70
|
|
|
5,712
|
|
||||||||||||||
|
Other comprehensive income (loss), net of tax
|
|
|
|
|
|
|
|
|
|
|
(3,765
|
)
|
|
(3,765
|
)
|
|
(59
|
)
|
|
(3,824
|
)
|
||||||||||||||
|
Total comprehensive income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
1,877
|
|
|
11
|
|
|
1,888
|
|
|||||||||||||||
|
Balance, December 31, 2015
|
6
|
|
|
24,482
|
|
|
18,931
|
|
|
(13,814
|
)
|
|
0
|
|
|
12,285
|
|
|
41,890
|
|
|
33
|
|
|
41,923
|
|
|||||||||
|
Cumulative effect of adoption of accounting changes
|
|
|
|
|
11
|
|
|
|
|
|
|
|
|
11
|
|
|
(30
|
)
|
|
(19
|
)
|
||||||||||||||
|
Common Stock acquired
|
|
|
|
|
|
|
(2,000
|
)
|
|
|
|
|
|
(2,000
|
)
|
|
|
|
(2,000
|
)
|
|||||||||||||||
|
Class B Stock repurchase adjustment
|
|
|
|
|
(119
|
)
|
|
|
|
|
|
|
|
(119
|
)
|
|
|
|
(119
|
)
|
|||||||||||||||
|
Contributions from noncontrolling interests
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7
|
|
|
7
|
|
||||||||||||||||
|
Distributions to noncontrolling interests
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(351
|
)
|
|
(351
|
)
|
||||||||||||||||
|
Consolidations/(deconsolidations) of noncontrolling interests
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
471
|
|
|
471
|
|
||||||||||||||||
|
Stock-based compensation programs
|
|
|
124
|
|
|
|
|
498
|
|
|
|
|
|
|
622
|
|
|
|
|
622
|
|
||||||||||||||
|
Dividends declared on Common Stock
|
|
|
|
|
(1,245
|
)
|
|
|
|
|
|
|
|
(1,245
|
)
|
|
|
|
(1,245
|
)
|
|||||||||||||||
|
Comprehensive income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
Net income (loss)
|
|
|
|
|
4,368
|
|
|
|
|
|
|
|
|
4,368
|
|
|
51
|
|
|
4,419
|
|
||||||||||||||
|
Other comprehensive income (loss), net of tax
|
|
|
|
|
|
|
|
|
|
|
2,336
|
|
|
2,336
|
|
|
44
|
|
|
2,380
|
|
||||||||||||||
|
Total comprehensive income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
6,704
|
|
|
95
|
|
|
6,799
|
|
|||||||||||||||
|
Balance, December 31, 2016
|
$
|
6
|
|
|
$
|
24,606
|
|
|
$
|
21,946
|
|
|
$
|
(15,316
|
)
|
|
$
|
0
|
|
|
$
|
14,621
|
|
|
$
|
45,863
|
|
|
$
|
225
|
|
|
$
|
46,088
|
|
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
CASH FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
|
|
|
||||||
|
Net income (loss)
|
|
$
|
4,419
|
|
|
$
|
5,712
|
|
|
$
|
1,438
|
|
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
|
|
|
|
|
|
||||||
|
Realized investment (gains) losses, net
|
|
(2,194
|
)
|
|
(4,025
|
)
|
|
(1,636
|
)
|
|||
|
Policy charges and fee income
|
|
(1,907
|
)
|
|
(1,883
|
)
|
|
(2,156
|
)
|
|||
|
Interest credited to policyholders’ account balances
|
|
3,761
|
|
|
3,479
|
|
|
4,263
|
|
|||
|
Depreciation and amortization
|
|
318
|
|
|
113
|
|
|
631
|
|
|||
|
(Gains) losses on trading account assets supporting insurance liabilities, net
|
|
17
|
|
|
524
|
|
|
(339
|
)
|
|||
|
Change in:
|
|
|
|
|
|
|
||||||
|
Deferred policy acquisition costs
|
|
(968
|
)
|
|
(533
|
)
|
|
(721
|
)
|
|||
|
Future policy benefits and other insurance liabilities
|
|
10,584
|
|
|
8,311
|
|
|
11,276
|
|
|||
|
Other trading account assets
|
|
(60
|
)
|
|
256
|
|
|
44
|
|
|||
|
Income taxes(1)
|
|
618
|
|
|
1,217
|
|
|
298
|
|
|||
|
Derivatives, net
|
|
1,067
|
|
|
1,305
|
|
|
4,989
|
|
|||
|
Other, net(1)
|
|
(877
|
)
|
|
(581
|
)
|
|
1,309
|
|
|||
|
Cash flows from (used in) operating activities
|
|
14,778
|
|
|
13,895
|
|
|
19,396
|
|
|||
|
CASH FLOWS FROM INVESTING ACTIVITIES
|
|
|
|
|
|
|
||||||
|
Proceeds from the sale/maturity/prepayment of:
|
|
|
|
|
|
|
||||||
|
Fixed maturities, available-for-sale
|
|
49,713
|
|
|
47,080
|
|
|
49,529
|
|
|||
|
Fixed maturities, held-to-maturity
|
|
271
|
|
|
235
|
|
|
415
|
|
|||
|
Trading account assets supporting insurance liabilities and other trading account assets
|
|
34,139
|
|
|
14,313
|
|
|
13,548
|
|
|||
|
Equity securities, available-for-sale
|
|
3,502
|
|
|
4,577
|
|
|
5,001
|
|
|||
|
Commercial mortgage and other loans
|
|
6,342
|
|
|
5,464
|
|
|
4,076
|
|
|||
|
Policy loans
|
|
2,277
|
|
|
2,199
|
|
|
2,084
|
|
|||
|
Other long-term investments
|
|
1,145
|
|
|
1,276
|
|
|
574
|
|
|||
|
Short-term investments
|
|
43,700
|
|
|
77,021
|
|
|
73,823
|
|
|||
|
Payments for the purchase/origination of:
|
|
|
|
|
|
|
||||||
|
Fixed maturities, available-for-sale
|
|
(66,857
|
)
|
|
(47,606
|
)
|
|
(57,467
|
)
|
|||
|
Fixed maturities, held-to-maturity
|
|
0
|
|
|
0
|
|
|
(21
|
)
|
|||
|
Trading account assets supporting insurance liabilities and other trading account assets
|
|
(36,532
|
)
|
|
(18,608
|
)
|
|
(16,522
|
)
|
|||
|
Equity securities, available-for-sale
|
|
(3,083
|
)
|
|
(4,055
|
)
|
|
(4,476
|
)
|
|||
|
Commercial mortgage and other loans
|
|
(8,548
|
)
|
|
(9,392
|
)
|
|
(9,346
|
)
|
|||
|
Policy loans
|
|
(1,882
|
)
|
|
(1,782
|
)
|
|
(1,855
|
)
|
|||
|
Other long-term investments
|
|
(1,923
|
)
|
|
(2,005
|
)
|
|
(1,805
|
)
|
|||
|
Short-term investments
|
|
(43,370
|
)
|
|
(76,622
|
)
|
|
(74,295
|
)
|
|||
|
Acquisitions, net of cash acquired
|
|
(532
|
)
|
|
0
|
|
|
(23
|
)
|
|||
|
Derivatives, net
|
|
314
|
|
|
53
|
|
|
(555
|
)
|
|||
|
Other, net
|
|
(227
|
)
|
|
106
|
|
|
227
|
|
|||
|
Cash flows from (used in) investing activities
|
|
(21,551
|
)
|
|
(7,746
|
)
|
|
(17,088
|
)
|
|||
|
CASH FLOWS FROM FINANCING ACTIVITIES
|
|
|
|
|
|
|
||||||
|
Policyholders’ account deposits
|
|
29,642
|
|
|
23,206
|
|
|
23,977
|
|
|||
|
Policyholders’ account withdrawals
|
|
(24,143
|
)
|
|
(21,963
|
)
|
|
(22,003
|
)
|
|||
|
Net change in securities sold under agreements to repurchase and cash collateral for loaned securities
|
|
561
|
|
|
(2,270
|
)
|
|
710
|
|
|||
|
Cash dividends paid on Common Stock
|
|
(1,300
|
)
|
|
(1,117
|
)
|
|
(1,008
|
)
|
|||
|
Cash dividends paid on Class B Stock
|
|
0
|
|
|
0
|
|
|
(19
|
)
|
|||
|
Net change in financing arrangements (maturities 90 days or less)
|
|
292
|
|
|
68
|
|
|
(27
|
)
|
|||
|
Common Stock acquired
|
|
(2,000
|
)
|
|
(1,013
|
)
|
|
(1,000
|
)
|
|||
|
Class B stock acquired
|
|
(119
|
)
|
|
(651
|
)
|
|
0
|
|
|||
|
Common Stock reissued for exercise of stock options
|
|
426
|
|
|
209
|
|
|
269
|
|
|||
|
Proceeds from the issuance of debt (maturities longer than 90 days)
|
|
2,742
|
|
|
5,166
|
|
|
7,955
|
|
|||
|
Repayments of debt (maturities longer than 90 days)
|
|
(2,753
|
)
|
|
(4,957
|
)
|
|
(7,384
|
)
|
|||
|
Excess tax benefits from share-based payment arrangements
|
|
21
|
|
|
19
|
|
|
26
|
|
|||
|
Other, net
|
|
(131
|
)
|
|
(221
|
)
|
|
133
|
|
|||
|
Cash flows from (used in) financing activities
|
|
3,238
|
|
|
(3,524
|
)
|
|
1,629
|
|
|||
|
Effect of foreign exchange rate changes on cash balances
|
|
50
|
|
|
69
|
|
|
(458
|
)
|
|||
|
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
|
|
(3,485
|
)
|
|
2,694
|
|
|
3,479
|
|
|||
|
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR
|
|
17,612
|
|
|
14,918
|
|
|
11,439
|
|
|||
|
CASH AND CASH EQUIVALENTS, END OF YEAR
|
|
$
|
14,127
|
|
|
$
|
17,612
|
|
|
$
|
14,918
|
|
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
SUPPLEMENTAL CASH FLOW INFORMATION
|
|
|
|
|
|
|
||||||
|
Income taxes paid, net of refunds
|
|
$
|
770
|
|
|
$
|
1,083
|
|
|
$
|
109
|
|
|
Interest paid
|
|
$
|
1,257
|
|
|
$
|
1,324
|
|
|
$
|
1,883
|
|
|
NON-CASH TRANSACTIONS DURING THE YEAR
|
|
|
|
|
|
|
||||||
|
Treasury Stock shares issued for stock-based compensation programs
|
|
$
|
115
|
|
|
$
|
115
|
|
|
$
|
100
|
|
|
Significant Pension Risk Transfer transactions:
|
|
|
|
|
|
|
||||||
|
Assets received, excluding cash and cash equivalents
|
|
$
|
3,228
|
|
|
$
|
2,091
|
|
|
$
|
1,435
|
|
|
Liabilities assumed
|
|
5,003
|
|
|
3,739
|
|
|
4,653
|
|
|||
|
Net cash received
|
|
$
|
1,775
|
|
|
$
|
1,648
|
|
|
$
|
3,218
|
|
|
Acquisition of Gibraltar BSN Life Berhad (See Note 3):
|
|
|
|
|
|
|
||||||
|
Assets acquired, excluding cash and cash equivalents acquired
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
656
|
|
|
Liabilities assumed
|
|
0
|
|
|
0
|
|
|
586
|
|
|||
|
Noncontrolling interest assumed
|
|
0
|
|
|
0
|
|
|
47
|
|
|||
|
Net cash paid on acquisition
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
23
|
|
|
(1)
|
Prior period amounts have been reclassified to conform to current period presentation.
|
|
1.
|
BUSINESS AND BASIS OF PRESENTATION
|
|
2.
|
SIGNIFICANT ACCOUNTING POLICIES AND PRONOUNCEMENTS
|
|
Standard
|
|
Description
|
|
Effective date and method of adoption
|
|
Effect on the financial statements or other significant matters
|
|
|
|
|
|
|
|
|
|
ASU 2015-03,
Interest -
Imputation of
Interest (Subtopic
835-30): Simplifying
the Presentation of
Debt Issuance Costs
|
|
The ASU simplifies the presentation of debt issuance costs. The standard requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability.
|
|
January 1,
2016 using a
retrospective
method.
|
|
Prior period financial information presented has been adjusted to reflect the retrospective adoption. As a result, “Other assets” and “Long-term debt” as previously reported on the Company’s Consolidated Statements of Financial Position as of December 31, 2015 were both reduced by $133 million.
|
|
ASU 2015-02
,
Consolidation
(Topic 810):
Amendments to
Consolidation
Analysis
|
|
The ASU modifies the rules regarding consolidation. Specialized standard for limited partnerships and similar legal entities is eliminated and the indefinite deferral for certain investment funds is removed.
|
|
January 1, 2016 using a modified retrospective method.
|
|
Adoption of the ASU primarily resulted in the deconsolidation of certain of the Company’s previously consolidated collateralized loan obligations (“CLOs”), as the Company’s asset manager fee arrangements are no longer deemed variable interest in these entities. The Company continues to consolidate CLOs where it retains other economic interests which absorb more than an insignificant amount of the CLOs expected variability. The Company also deconsolidated certain investment structures where it is no longer deemed to be the primary beneficiary as the Company, through its equity ownership, no longer has the obligation to absorb losses of the Variable Interest Entity (“VIE”) that could be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE. The impact to the Company’s Consolidated Statements of Financial Position upon adoption of the updated guidance was a reduction of $5.5 billion of “Total assets” (including $5.1 billion of “Total investments”) and $5.5 billion of “Total liabilities” (including $5.1 billion of “Notes issued by consolidated variable interest entities”), with a $30 million decrease in “Noncontrolling interests” and a $7 million increase to “Total Prudential Financial, Inc. equity.”
|
|
ASU 2014-13
,
Consolidation
(Topic 810):
Measuring the
Financial Assets
and the Financial
Liabilities of a
Consolidated
Collateralized
Financing Entity)
|
|
This ASU provides that an entity within scope is permitted to measure both the financial assets and financial liabilities of a consolidated collateralized financing entity based on either the fair value of the financial assets or the financial liabilities, whichever is more observable. If adopted, the standard eliminates the measurement difference that exists when both are measured at fair value.
|
|
January 1, 2016 using a modified retrospective method.
|
|
The impact to the Company’s Consolidated Statements of Financial Position upon adoption of the updated guidance was a $4 million reduction in “Total liabilities” and a $4 million increase to “Total Prudential Financial, Inc. equity.”
|
|
Standard
|
|
Description
|
|
Effective date and method of adoption
|
|
Effect on the financial statements or other significant matters
|
|
|
|
|
|
|
|
|
|
ASU 2015-09
,
Financial Services - Insurance (Topic 944): Disclosures about Short-
Duration Contracts
|
|
The ASU requires enhanced disclosures about insurance contracts classified as short-duration. New disclosure requirements focus on providing additional information about an insurance entity’s initial claim estimates and subsequent adjustments to those estimates, methodologies and judgments in estimating claims, and timing, frequency and severity of claims as they relate to short-duration insurance contracts.
|
|
December 31, 2016 using the retrospective method.
|
|
Adoption of the ASU had no impact on the Company’s Consolidated Financial Statements and did not have a material impact on the Notes to the Consolidated Financial Statements.
|
|
Standard
|
|
Description
|
|
Effective date and method of adoption
|
|
Effect on the financial statements or other significant matters
|
|
|
|
|
|
|
|
|
|
ASU 2014-09
,
Revenue from Contracts with Customers (Topic 606)
|
|
The ASU is based on the core principle that revenue is recognized to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. The standard also requires additional disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, and assets recognized from the costs to obtain or fulfill a contract with a customer. Revenue recognition for insurance contracts and financial instruments are explicitly scoped out of the standard.
|
|
January 1, 2018 using one of two retrospective application methods (early adoption permitted beginning January 1, 2017).
The Company plans to adopt the standard on January 1, 2018 using the modified retrospective application.
|
|
Given that insurance contracts and financial instruments are explicitly scoped out of the standard, the Company’s assessment has focused on the Asset Management segment. Based on the assessment completed to date, the Company does not expect the adoption of the ASU to have a significant impact on the Asset Management segment’s results of operations.
|
|
ASU 2016-01
,
Financial
Instruments -
Overall (Subtopic 825-10):
Recognition and Measurement of Financial Assets and Liabilities
|
|
The ASU revises an entity’s accounting related to the classification and measurement of certain equity investments and the presentation of certain fair value changes for financial liabilities measured at fair value. The standard also amends certain disclosure requirements associated with the fair value of financial instruments.
|
|
January 1, 2018 using the modified retrospective method. The amendments are to be applied prospectively as they relate to equity investments without readily determinable fair value.
|
|
The Company’s equity investments, except for those accounted for using the equity method, will generally be carried on the Consolidated Statements of Financial Position at fair value with changes in fair value reported in current earnings. The Company is continuing to assess additional impacts of the ASU on the Company’s Consolidated Financial Statements and Notes to the Consolidated Financial Statements.
|
|
Standard
|
|
Description
|
|
Effective date and method of adoption
|
|
Effect on the financial statements or other significant matters
|
|
|
|
|
|
|
|
|
|
ASU 2016-02
,
Leases (Topic 842)
|
|
This ASU ensures that assets and liabilities from all outstanding lease contracts are recognized on the balance sheet (with limited exception). The ASU substantially changes a Lessee’s accounting for leases and requires the recording on balance sheet of a “right-of-use” asset and liability to make lease payments for most leases. A Lessee will continue to recognize expense in its income statement in a manner similar to the requirements under the current lease accounting standard. For Lessors, the standard modifies classification criteria and accounting for sales-type and direct financing leases and requires a Lessor to derecognize the carrying value of the leased asset that is considered to have been transferred to a Lessee and record a lease receivable and residual asset (“receivable and residual” approach). The standard also eliminates the real estate specific provisions of the current standard (i.e., sale-leaseback).
|
|
January 1, 2019 using the modified retrospective method (with early adoption permitted).
|
|
The Company is currently assessing the impact of the ASU on the Company’s Consolidated Financial Statements and Notes to the Consolidated Financial Statements.
|
|
ASU 2016-09
,
Compensation-
Stock Compensation (Topic 718):
Improvements to
Employee Share-
Based Payments
Accounting
|
|
This ASU simplifies and improves employee share-based payment accounting. The areas updated include income tax consequences, a policy election related to forfeitures, classification of awards as either equity or liability, and classification of operating and financing activity on the statement of cash flows.
|
|
January 1, 2017 using various transition methods as prescribed by the update (with early adoption permitted).
|
|
The Company does not expect the adoption of the ASU to have a significant impact on the Company’s Consolidated Financial Statements and Notes to the Consolidated Financial Statements.
|
|
ASU 2016-13
,
Financial Instruments-Credit Losses (Topic326):
Measurement of
Credit Losses on
Financial
Instruments
|
|
This ASU provides a new current expected credit loss model to account for credit losses on certain financial assets and off-balance sheet exposures (e.g., loans held for investment, debt securities held to maturity, reinsurance receivables, net investments in leases and loan commitments). The model requires an entity to estimate lifetime credit losses related to such financial assets and exposures based on relevant information about past events, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. The standard also modifies the current other-than-temporary impairment standard for available-for-sale debt securities to require the use of an allowance rather than a direct write down of the investment, and replaces existing standard for purchased credit deteriorated loans and debt securities.
|
|
January 1, 2020 using the modified retrospective method, however prospective application is required for purchased credit deteriorated assets previously accounted for under ASU 310-30 and for debt securities for which an other-than-temporary-impairment was recognized prior to the date of adoption. Early adoption is permitted beginning January 1, 2019.
|
|
The Company is currently assessing the impact of the ASU on the Company’s Consolidated Financial Statements and Notes to the Consolidated Financial Statements.
|
|
Standard
|
|
Description
|
|
Effective date and method of adoption
|
|
Effect on the financial statements or other significant matters
|
|
|
|
|
|
|
|
|
|
ASU 2016-15
,
Statement of Cash
Flows (Topic 230):
Classification of Certain Cash Receipts and Cash
Payments (a
Consensus of the
Emerging Issues
Task Force)
|
|
This ASU addresses diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The standard provides clarity on the treatment of eight specifically defined types of cash inflows and outflows.
|
|
January 1, 2018 using the retrospective method (with early adoption permitted provided that all amendments are adopted in the same period).
|
|
The Company is currently assessing the impact of the ASU on the Company’s Consolidated Financial Statements and Notes to the Consolidated Financial Statements.
|
|
Update 2016-18
,
Statement of Cash Flows (Topic 230): Restricted Cash
|
|
In November 2016, the FASB issued this ASU to address diversity in practice from entities classifying and presenting transfers between cash and restricted cash as operating, investing, or financing activities, or as a combination of those activities in the Statement of Cash Flows. The ASU requires entities to show the changes in the total of cash, cash equivalents, restricted cash, and restricted cash equivalents in the Statement of Cash Flows. As a result, transfers between such categories will no longer be presented in the Statement of Cash Flows.
|
|
January 1, 2018 using the retrospective method (with early adoption permitted).
|
|
The Company is currently assessing the impact of the ASU on the Company’s Consolidated Financial Statements and Notes to the Consolidated Financial Statements.
|
|
ASU 2017-01
,
Business Combinations (Topic 805): Clarifying the Definition of a Business
|
|
In January 2017, the FASB issued this ASU to provide a more robust framework to use in determining when a set of assets and activities (“set”) is a business and to address stakeholder feedback that the definition of a business in current GAAP is applied too broadly. The primary amendments in the ASU provide a screen to exclude transactions where substantially all of the fair value of the transferred set is concentrated in a single asset, or group of similar assets, from being evaluated as a business.
|
|
January 1, 2018 using the prospective method (with early adoption permitted).
|
|
The Company is currently assessing the impact of the ASU on the Company’s Consolidated Financial Statements and Notes to the Consolidated Financial Statements. It is expected that our general account real estate acquisitions will no longer be accounted for as business combinations.
|
|
3.
|
ACQUISITIONS
|
|
4.
|
INVESTMENTS
|
|
|
December 31, 2016
|
||||||||||||||||||
|
|
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Fair
Value
|
|
OTTI
in AOCI(4)
|
||||||||||
|
|
(in millions)
|
||||||||||||||||||
|
Fixed maturities, available-for-sale
|
|
|
|
|
|
|
|
|
|
||||||||||
|
U.S. Treasury securities and obligations of U.S. government authorities and agencies
|
$
|
21,505
|
|
|
$
|
3,280
|
|
|
$
|
1,001
|
|
|
$
|
23,784
|
|
|
$
|
0
|
|
|
Obligations of U.S. states and their political subdivisions
|
9,060
|
|
|
716
|
|
|
84
|
|
|
9,692
|
|
|
0
|
|
|||||
|
Foreign government bonds
|
79,862
|
|
|
16,748
|
|
|
354
|
|
|
96,256
|
|
|
0
|
|
|||||
|
U.S. corporate public securities
|
76,383
|
|
|
6,460
|
|
|
1,232
|
|
|
81,611
|
|
|
(17
|
)
|
|||||
|
U.S. corporate private securities(1)
|
29,974
|
|
|
2,122
|
|
|
308
|
|
|
31,788
|
|
|
(22
|
)
|
|||||
|
Foreign corporate public securities
|
25,758
|
|
|
2,784
|
|
|
305
|
|
|
28,237
|
|
|
(6
|
)
|
|||||
|
Foreign corporate private securities
|
21,383
|
|
|
646
|
|
|
1,149
|
|
|
20,880
|
|
|
0
|
|
|||||
|
Asset-backed securities(2)
|
11,759
|
|
|
229
|
|
|
53
|
|
|
11,935
|
|
|
(288
|
)
|
|||||
|
Commercial mortgage-backed securities
|
12,589
|
|
|
240
|
|
|
125
|
|
|
12,704
|
|
|
(1
|
)
|
|||||
|
Residential mortgage-backed securities(3)
|
4,308
|
|
|
238
|
|
|
14
|
|
|
4,532
|
|
|
(3
|
)
|
|||||
|
Total fixed maturities, available-for-sale(1)
|
$
|
292,581
|
|
|
$
|
33,463
|
|
|
$
|
4,625
|
|
|
$
|
321,419
|
|
|
$
|
(337
|
)
|
|
Equity securities, available-for-sale
|
$
|
7,149
|
|
|
$
|
2,641
|
|
|
$
|
42
|
|
|
$
|
9,748
|
|
|
|
||
|
|
|
December 31, 2016
|
||||||||||||||
|
|
|
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Fair
Value
|
||||||||
|
|
|
(in millions)
|
||||||||||||||
|
Fixed maturities, held-to-maturity
|
|
|
|
|
|
|
|
|
||||||||
|
Foreign government bonds
|
|
$
|
839
|
|
|
$
|
262
|
|
|
$
|
0
|
|
|
$
|
1,101
|
|
|
Foreign corporate public securities
|
|
651
|
|
|
71
|
|
|
0
|
|
|
722
|
|
||||
|
Foreign corporate private securities(5)
|
|
81
|
|
|
4
|
|
|
0
|
|
|
85
|
|
||||
|
Commercial mortgage-backed securities
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
||||
|
Residential mortgage-backed securities(3)
|
|
573
|
|
|
43
|
|
|
0
|
|
|
616
|
|
||||
|
Total fixed maturities, held-to-maturity(5)
|
|
$
|
2,144
|
|
|
$
|
380
|
|
|
$
|
0
|
|
|
$
|
2,524
|
|
|
(1)
|
Excludes notes with amortized cost of
$1,456 million
(fair value,
$1,456 million
), which have been offset with the associated payables under a netting agreement.
|
|
(2)
|
Includes credit-tranched securities collateralized by sub-prime mortgages, auto loans, credit cards, education loans and other asset types.
|
|
(3)
|
Includes publicly-traded agency pass-through securities and collateralized mortgage obligations.
|
|
(4)
|
Represents the amount of OTTI losses in AOCI, which were not included in earnings. Amount excludes
$649 million
of net unrealized gains on impaired available-for-sale securities and
$1 million
of net unrealized gains on impaired held-to-maturity securities relating to changes in the value of such securities subsequent to the impairment measurement date.
|
|
(5)
|
Excludes notes with amortized cost of
$4,403 million
(fair value,
$4,403 million
), which have been offset with the associated payables under a netting agreement.
|
|
|
December 31, 2015
|
||||||||||||||||||
|
|
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Fair
Value
|
|
OTTI
in AOCI(4)
|
||||||||||
|
|
(in millions)
|
||||||||||||||||||
|
Fixed maturities, available-for-sale
|
|
|
|
|
|
|
|
|
|
||||||||||
|
U.S. Treasury securities and obligations of U.S. government authorities and agencies
|
$
|
14,992
|
|
|
$
|
3,544
|
|
|
$
|
19
|
|
|
$
|
18,517
|
|
|
$
|
0
|
|
|
Obligations of U.S. states and their political subdivisions
|
8,089
|
|
|
747
|
|
|
41
|
|
|
8,795
|
|
|
0
|
|
|||||
|
Foreign government bonds
|
71,849
|
|
|
12,011
|
|
|
147
|
|
|
83,713
|
|
|
1
|
|
|||||
|
U.S. corporate public securities
|
70,979
|
|
|
6,344
|
|
|
1,955
|
|
|
75,368
|
|
|
(3
|
)
|
|||||
|
U.S. corporate private securities(1)
|
28,525
|
|
|
2,278
|
|
|
359
|
|
|
30,444
|
|
|
0
|
|
|||||
|
Foreign corporate public securities
|
26,354
|
|
|
2,821
|
|
|
621
|
|
|
28,554
|
|
|
0
|
|
|||||
|
Foreign corporate private securities
|
19,393
|
|
|
739
|
|
|
994
|
|
|
19,138
|
|
|
0
|
|
|||||
|
Asset-backed securities(2)
|
10,121
|
|
|
226
|
|
|
121
|
|
|
10,226
|
|
|
(452
|
)
|
|||||
|
Commercial mortgage-backed securities
|
10,337
|
|
|
195
|
|
|
70
|
|
|
10,462
|
|
|
(1
|
)
|
|||||
|
Residential mortgage-backed securities(3)
|
4,777
|
|
|
335
|
|
|
6
|
|
|
5,106
|
|
|
(4
|
)
|
|||||
|
Total fixed maturities, available-for-sale(1)
|
$
|
265,416
|
|
|
$
|
29,240
|
|
|
$
|
4,333
|
|
|
$
|
290,323
|
|
|
$
|
(459
|
)
|
|
Equity securities, available-for-sale
|
$
|
6,847
|
|
|
$
|
2,570
|
|
|
$
|
143
|
|
|
$
|
9,274
|
|
|
|
||
|
|
|
December 31, 2015
|
||||||||||||||
|
|
|
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Fair
Value
|
||||||||
|
|
|
(in millions)
|
||||||||||||||
|
Fixed maturities, held-to-maturity
|
|
|
|
|
|
|
|
|
||||||||
|
Foreign government bonds
|
|
$
|
816
|
|
|
$
|
196
|
|
|
$
|
0
|
|
|
$
|
1,012
|
|
|
Foreign corporate public securities
|
|
625
|
|
|
62
|
|
|
0
|
|
|
687
|
|
||||
|
Foreign corporate private securities(5)
|
|
78
|
|
|
4
|
|
|
0
|
|
|
82
|
|
||||
|
Commercial mortgage-backed securities
|
|
33
|
|
|
1
|
|
|
0
|
|
|
34
|
|
||||
|
Residential mortgage-backed securities(3)
|
|
756
|
|
|
53
|
|
|
0
|
|
|
809
|
|
||||
|
Total fixed maturities, held-to-maturity(5)
|
|
$
|
2,308
|
|
|
$
|
316
|
|
|
$
|
0
|
|
|
$
|
2,624
|
|
|
(1)
|
Excludes notes with amortized cost of
$1,050 million
(fair value,
$1,039 million
), which have been offset with the associated payables under a netting agreement.
|
|
(2)
|
Includes credit-tranched securities collateralized by sub-prime mortgages, auto loans, credit cards, education loans and other asset types.
|
|
(3)
|
Includes publicly-traded agency pass-through securities and collateralized mortgage obligations.
|
|
(4)
|
Represents the amount of OTTI losses in AOCI, which were not included in earnings. Amount excludes
$693 million
of net unrealized gains on impaired available-for-sale securities and less than
$1 million
of net unrealized gains on impaired held-to-maturity securities relating to changes in the value of such securities subsequent to the impairment measurement date.
|
|
(5)
|
Excludes notes with amortized cost of
$3,850 million
(fair value,
$4,081 million
), which have been offset with the associated payables under a netting agreement.
|
|
|
|
2016
|
||||||||||||||||||||||
|
|
|
Less than twelve months
|
|
Twelve months or more
|
|
Total
|
||||||||||||||||||
|
|
|
Fair Value
|
|
Gross
Unrealized
Losses
|
|
Fair Value
|
|
Gross
Unrealized
Losses
|
|
Fair Value
|
|
Gross
Unrealized
Losses
|
||||||||||||
|
|
|
(in millions)
|
||||||||||||||||||||||
|
Fixed maturities(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
U.S. Treasury securities and obligations of U.S. government authorities and agencies
|
|
$
|
9,345
|
|
|
$
|
1,001
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
9,345
|
|
|
$
|
1,001
|
|
|
Obligations of U.S. states and their political subdivisions
|
|
2,677
|
|
|
79
|
|
|
19
|
|
|
5
|
|
|
2,696
|
|
|
84
|
|
||||||
|
Foreign government bonds
|
|
6,076
|
|
|
325
|
|
|
310
|
|
|
29
|
|
|
6,386
|
|
|
354
|
|
||||||
|
U.S. corporate public securities
|
|
22,803
|
|
|
905
|
|
|
2,943
|
|
|
327
|
|
|
25,746
|
|
|
1,232
|
|
||||||
|
U.S. corporate private securities
|
|
7,797
|
|
|
228
|
|
|
1,296
|
|
|
80
|
|
|
9,093
|
|
|
308
|
|
||||||
|
Foreign corporate public securities
|
|
5,196
|
|
|
162
|
|
|
1,047
|
|
|
143
|
|
|
6,243
|
|
|
305
|
|
||||||
|
Foreign corporate private securities
|
|
6,557
|
|
|
350
|
|
|
4,916
|
|
|
799
|
|
|
11,473
|
|
|
1,149
|
|
||||||
|
Asset-backed securities
|
|
2,357
|
|
|
20
|
|
|
1,581
|
|
|
33
|
|
|
3,938
|
|
|
53
|
|
||||||
|
Commercial mortgage-backed securities
|
|
4,879
|
|
|
123
|
|
|
60
|
|
|
2
|
|
|
4,939
|
|
|
125
|
|
||||||
|
Residential mortgage-backed securities
|
|
926
|
|
|
12
|
|
|
78
|
|
|
2
|
|
|
1,004
|
|
|
14
|
|
||||||
|
Total
|
|
$
|
68,613
|
|
|
$
|
3,205
|
|
|
$
|
12,250
|
|
|
$
|
1,420
|
|
|
$
|
80,863
|
|
|
$
|
4,625
|
|
|
Equity securities, available-for-sale
|
|
$
|
637
|
|
|
$
|
41
|
|
|
$
|
12
|
|
|
$
|
1
|
|
|
$
|
649
|
|
|
$
|
42
|
|
|
(1)
|
Includes
$12 million
of fair value and less than
$1 million
of gross unrealized losses at December 31,
2016
, on securities classified as held-to-maturity, which is not reflected in AOCI.
|
|
|
|
2015
|
||||||||||||||||||||||
|
|
|
Less than twelve months
|
|
Twelve months or more
|
|
Total
|
||||||||||||||||||
|
|
|
Fair Value
|
|
Gross
Unrealized
Losses
|
|
Fair Value
|
|
Gross
Unrealized
Losses
|
|
Fair Value
|
|
Gross
Unrealized
Losses
|
||||||||||||
|
|
|
(in millions)
|
||||||||||||||||||||||
|
Fixed maturities
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
U.S. Treasury securities and obligations of U.S. government authorities and agencies
|
|
$
|
3,068
|
|
|
$
|
19
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
3,068
|
|
|
$
|
19
|
|
|
Obligations of U.S. states and their political subdivisions
|
|
1,391
|
|
|
40
|
|
|
7
|
|
|
1
|
|
|
1,398
|
|
|
41
|
|
||||||
|
Foreign government bonds
|
|
1,925
|
|
|
82
|
|
|
411
|
|
|
65
|
|
|
2,336
|
|
|
147
|
|
||||||
|
U.S. corporate public securities
|
|
24,642
|
|
|
1,396
|
|
|
3,455
|
|
|
559
|
|
|
28,097
|
|
|
1,955
|
|
||||||
|
U.S. corporate private securities
|
|
6,996
|
|
|
266
|
|
|
802
|
|
|
93
|
|
|
7,798
|
|
|
359
|
|
||||||
|
Foreign corporate public securities
|
|
5,985
|
|
|
288
|
|
|
1,584
|
|
|
333
|
|
|
7,569
|
|
|
621
|
|
||||||
|
Foreign corporate private securities
|
|
6,199
|
|
|
340
|
|
|
3,917
|
|
|
654
|
|
|
10,116
|
|
|
994
|
|
||||||
|
Asset-backed securities
|
|
4,342
|
|
|
33
|
|
|
3,138
|
|
|
88
|
|
|
7,480
|
|
|
121
|
|
||||||
|
Commercial mortgage-backed securities
|
|
3,888
|
|
|
63
|
|
|
473
|
|
|
7
|
|
|
4,361
|
|
|
70
|
|
||||||
|
Residential mortgage-backed securities
|
|
558
|
|
|
4
|
|
|
119
|
|
|
2
|
|
|
677
|
|
|
6
|
|
||||||
|
Total
|
|
$
|
58,994
|
|
|
$
|
2,531
|
|
|
$
|
13,906
|
|
|
$
|
1,802
|
|
|
$
|
72,900
|
|
|
$
|
4,333
|
|
|
Equity securities, available-for-sale
|
|
$
|
1,862
|
|
|
$
|
142
|
|
|
$
|
11
|
|
|
$
|
1
|
|
|
$
|
1,873
|
|
|
$
|
143
|
|
|
|
|
Available-for-Sale
|
|
Held-to-Maturity
|
||||||||||||
|
|
|
Amortized
Cost
|
|
Fair
Value
|
|
Amortized
Cost
|
|
Fair
Value
|
||||||||
|
|
|
(in millions)
|
||||||||||||||
|
Due in one year or less
|
|
$
|
9,264
|
|
|
$
|
9,827
|
|
|
$
|
11
|
|
|
$
|
11
|
|
|
Due after one year through five years
|
|
44,669
|
|
|
48,592
|
|
|
172
|
|
|
181
|
|
||||
|
Due after five years through ten years
|
|
61,561
|
|
|
65,832
|
|
|
552
|
|
|
618
|
|
||||
|
Due after ten years(1)
|
|
148,431
|
|
|
167,997
|
|
|
836
|
|
|
1,098
|
|
||||
|
Asset-backed securities
|
|
11,759
|
|
|
11,935
|
|
|
0
|
|
|
0
|
|
||||
|
Commercial mortgage-backed securities
|
|
12,589
|
|
|
12,704
|
|
|
0
|
|
|
0
|
|
||||
|
Residential mortgage-backed securities
|
|
4,308
|
|
|
4,532
|
|
|
573
|
|
|
616
|
|
||||
|
Total
|
|
$
|
292,581
|
|
|
$
|
321,419
|
|
|
$
|
2,144
|
|
|
$
|
2,524
|
|
|
(1)
|
Excludes available-for-sale notes with amortized cost of
$1,456 million
(fair value,
$1,456 million
) and held-to-maturity notes with amortized cost of
$4,403 million
(fair value,
$4,403 million
), which have been offset with the associated payables under a netting agreement.
|
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
|
|
(in millions)
|
||||||||||
|
Fixed maturities, available-for-sale
|
|
|
||||||||||
|
Proceeds from sales(1)
|
|
$
|
29,878
|
|
|
$
|
27,679
|
|
|
$
|
28,359
|
|
|
Proceeds from maturities/repayments
|
|
19,710
|
|
|
19,559
|
|
|
21,040
|
|
|||
|
Gross investment gains from sales, prepayments and maturities
|
|
1,433
|
|
|
2,115
|
|
|
1,664
|
|
|||
|
Gross investment losses from sales and maturities
|
|
(545
|
)
|
|
(340
|
)
|
|
(414
|
)
|
|||
|
Fixed maturities, held-to-maturity
|
|
|
|
|
|
|
||||||
|
Gross investment gains from prepayments
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
Proceeds from maturities/repayments(2)
|
|
272
|
|
|
235
|
|
|
415
|
|
|||
|
Equity securities, available-for-sale
|
|
|
|
|
|
|
||||||
|
Proceeds from sales(3)
|
|
$
|
3,504
|
|
|
$
|
4,589
|
|
|
$
|
4,993
|
|
|
Gross investment gains from sales
|
|
608
|
|
|
746
|
|
|
676
|
|
|||
|
Gross investment losses from sales
|
|
(158
|
)
|
|
(169
|
)
|
|
(132
|
)
|
|||
|
Fixed maturity and equity security impairments
|
|
|
|
|
|
|
||||||
|
Net writedowns for other-than-temporary impairment losses on fixed maturities recognized in earnings(4)
|
|
$
|
(222
|
)
|
|
$
|
(141
|
)
|
|
$
|
(56
|
)
|
|
Writedowns for impairments on equity securities
|
|
(74
|
)
|
|
(126
|
)
|
|
(32
|
)
|
|||
|
(1)
|
Includes
$(125) million
,
$158 million
and
$(130) million
of non-cash related proceeds for the years ended December 31,
2016
,
2015
and
2014
, respectively.
|
|
(2)
|
Includes
$1 million
, less than
$1 million
and less than
$1 million
of non-cash related proceeds for the years ended December 31,
2016
,
2015
and
2014
, respectively.
|
|
(3)
|
Includes
$2 million
,
$12 million
and
$(8) million
of non-cash related proceeds for the years ended December 31,
2016
,
2015
and
2014
, respectively.
|
|
(4)
|
Excludes the portion of OTTI recorded in “Other comprehensive income (loss)” (“OCI”), representing any difference between the fair value of the impaired debt security and the net present value of its projected future cash flows at the time of impairment.
|
|
|
|
Year Ended December 31,
|
||||||
|
|
|
2016
|
|
2015
|
||||
|
|
|
(in millions)
|
||||||
|
Balance, beginning of period
|
|
$
|
532
|
|
|
$
|
781
|
|
|
Credit loss impairments previously recognized on securities which matured, paid down, prepaid or were sold during the period
|
|
(229
|
)
|
|
(243
|
)
|
||
|
Credit loss impairments previously recognized on securities impaired to fair value during the period(1)
|
|
(2
|
)
|
|
(20
|
)
|
||
|
Credit loss impairments recognized in the current period on securities not previously impaired
|
|
41
|
|
|
3
|
|
||
|
Additional credit loss impairments recognized in the current period on securities previously impaired
|
|
1
|
|
|
3
|
|
||
|
Increases due to the passage of time on previously recorded credit losses
|
|
24
|
|
|
20
|
|
||
|
Accretion of credit loss impairments previously recognized due to an increase in cash flows expected to be collected
|
|
(8
|
)
|
|
(12
|
)
|
||
|
Balance, end of period
|
|
$
|
359
|
|
|
$
|
532
|
|
|
(1)
|
Represents circumstances where the Company determined in the current period that it intends to sell the security or it is more likely than not that it will be required to sell the security before recovery of the security’s amortized cost.
|
|
|
|
December 31, 2016
|
|
December 31, 2015
|
||||||||||||
|
|
|
Amortized
Cost
|
|
Fair
Value
|
|
Amortized
Cost
|
|
Fair
Value
|
||||||||
|
|
|
(in millions)
|
||||||||||||||
|
Short-term investments and cash equivalents
|
|
$
|
655
|
|
|
$
|
655
|
|
|
$
|
765
|
|
|
$
|
765
|
|
|
Fixed maturities:
|
|
|
|
|
|
|
|
|
||||||||
|
Corporate securities
|
|
13,903
|
|
|
13,997
|
|
|
12,797
|
|
|
12,851
|
|
||||
|
Commercial mortgage-backed securities
|
|
2,032
|
|
|
2,052
|
|
|
1,860
|
|
|
1,862
|
|
||||
|
Residential mortgage-backed securities(1)
|
|
1,142
|
|
|
1,150
|
|
|
1,411
|
|
|
1,428
|
|
||||
|
Asset-backed securities(2)
|
|
1,333
|
|
|
1,349
|
|
|
1,295
|
|
|
1,299
|
|
||||
|
Foreign government bonds
|
|
915
|
|
|
926
|
|
|
680
|
|
|
694
|
|
||||
|
U.S. government authorities and agencies and obligations of U.S. states
|
|
330
|
|
|
376
|
|
|
326
|
|
|
369
|
|
||||
|
Total fixed maturities
|
|
19,655
|
|
|
19,850
|
|
|
18,369
|
|
|
18,503
|
|
||||
|
Equity securities
|
|
1,097
|
|
|
1,335
|
|
|
1,030
|
|
|
1,254
|
|
||||
|
Total trading account assets supporting insurance liabilities
|
|
$
|
21,407
|
|
|
$
|
21,840
|
|
|
$
|
20,164
|
|
|
$
|
20,522
|
|
|
(1)
|
Includes publicly-traded agency pass-through securities and collateralized mortgage obligations.
|
|
(2)
|
Includes credit-tranched securities collateralized by sub-prime mortgages, auto loans, credit cards, education loans and other asset types.
|
|
|
|
December 31, 2016
|
|
December 31, 2015
|
||||||||||||
|
|
|
Amortized
Cost
|
|
Fair
Value
|
|
Amortized
Cost
|
|
Fair
Value
|
||||||||
|
|
|
(in millions)
|
||||||||||||||
|
Short-term investments and cash equivalents
|
|
$
|
26
|
|
|
$
|
26
|
|
|
$
|
26
|
|
|
$
|
26
|
|
|
Fixed maturities
|
|
3,634
|
|
|
3,453
|
|
|
11,132
|
|
|
10,764
|
|
||||
|
Equity securities
|
|
985
|
|
|
1,056
|
|
|
1,006
|
|
|
1,098
|
|
||||
|
Other
|
|
4
|
|
|
5
|
|
|
12
|
|
|
15
|
|
||||
|
Subtotal
|
|
$
|
4,649
|
|
|
4,540
|
|
|
$
|
12,176
|
|
|
11,903
|
|
||
|
Derivative instruments
|
|
|
|
1,224
|
|
|
|
|
2,555
|
|
||||||
|
Total other trading account assets
|
|
|
|
$
|
5,764
|
|
|
|
|
$
|
14,458
|
|
||||
|
|
|
December 31, 2016
|
|
December 31, 2015
|
||||||||||||
|
|
|
Amortized
Cost
|
|
Fair
Value
|
|
Amortized
Cost
|
|
Fair
Value
|
||||||||
|
|
|
(in millions)
|
||||||||||||||
|
Investments in Japanese government and government agency securities:
|
|
|
|
|
|
|
|
|
||||||||
|
Fixed maturities, available-for-sale
|
|
$
|
60,240
|
|
|
$
|
73,051
|
|
|
$
|
53,851
|
|
|
$
|
61,911
|
|
|
Fixed maturities, held-to-maturity
|
|
818
|
|
|
1,075
|
|
|
796
|
|
|
988
|
|
||||
|
Trading account assets supporting insurance liabilities
|
|
537
|
|
|
550
|
|
|
492
|
|
|
502
|
|
||||
|
Other trading account assets
|
|
16
|
|
|
16
|
|
|
33
|
|
|
33
|
|
||||
|
Total
|
|
$
|
61,611
|
|
|
$
|
74,692
|
|
|
$
|
55,172
|
|
|
$
|
63,434
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
December 31, 2016
|
|
December 31, 2015
|
||||||||||||
|
|
|
Amortized
Cost
|
|
Fair
Value
|
|
Amortized
Cost
|
|
Fair
Value
|
||||||||
|
|
|
(in millions)
|
||||||||||||||
|
Investments in South Korean government and government agency securities:
|
|
|
|
|
|
|
|
|
||||||||
|
Fixed maturities, available-for-sale
|
|
$
|
7,581
|
|
|
$
|
9,435
|
|
|
$
|
7,191
|
|
|
$
|
9,233
|
|
|
Fixed maturities, held-to-maturity
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
||||
|
Trading account assets supporting insurance liabilities
|
|
44
|
|
|
44
|
|
|
44
|
|
|
44
|
|
||||
|
Other trading account assets
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
||||
|
Total
|
|
$
|
7,625
|
|
|
$
|
9,479
|
|
|
$
|
7,235
|
|
|
$
|
9,277
|
|
|
|
|
December 31, 2016
|
|
December 31, 2015
|
||||||||||
|
|
|
Amount
(in millions)
|
|
% of
Total
|
|
Amount
(in millions)
|
|
% of
Total
|
||||||
|
Commercial mortgage and agricultural property loans by property type:
|
|
|
|
|
|
|
|
|
||||||
|
Office
|
|
$
|
12,424
|
|
|
23.9
|
%
|
|
$
|
11,226
|
|
|
22.9
|
%
|
|
Retail
|
|
8,555
|
|
|
16.5
|
|
|
8,917
|
|
|
18.2
|
|
||
|
Apartments/Multi-Family
|
|
13,733
|
|
|
26.4
|
|
|
12,034
|
|
|
24.5
|
|
||
|
Industrial
|
|
8,075
|
|
|
15.5
|
|
|
7,775
|
|
|
15.9
|
|
||
|
Hospitality
|
|
2,274
|
|
|
4.4
|
|
|
2,513
|
|
|
5.1
|
|
||
|
Other
|
|
3,966
|
|
|
7.6
|
|
|
3,722
|
|
|
7.6
|
|
||
|
Total commercial mortgage loans
|
|
49,027
|
|
|
94.3
|
|
|
46,187
|
|
|
94.2
|
|
||
|
Agricultural property loans
|
|
2,958
|
|
|
5.7
|
|
|
2,859
|
|
|
5.8
|
|
||
|
Total commercial mortgage and agricultural property loans by property type
|
|
51,985
|
|
|
100.0
|
%
|
|
49,046
|
|
|
100.0
|
%
|
||
|
Valuation allowance
|
|
(98
|
)
|
|
|
|
(99
|
)
|
|
|
||||
|
Total net commercial mortgage and agricultural property loans by property type
|
|
51,887
|
|
|
|
|
48,947
|
|
|
|
||||
|
Other loans:
|
|
|
|
|
|
|
|
|
||||||
|
Uncollateralized loans
|
|
638
|
|
|
|
|
1,012
|
|
|
|
||||
|
Residential property loans
|
|
252
|
|
|
|
|
301
|
|
|
|
||||
|
Other collateralized loans
|
|
10
|
|
|
|
|
312
|
|
|
|
||||
|
Total other loans
|
|
900
|
|
|
|
|
1,625
|
|
|
|
||||
|
Valuation allowance
|
|
(8
|
)
|
|
|
|
(13
|
)
|
|
|
||||
|
Total net other loans
|
|
892
|
|
|
|
|
1,612
|
|
|
|
||||
|
Total commercial mortgage and other loans(1)
|
|
$
|
52,779
|
|
|
|
|
$
|
50,559
|
|
|
|
||
|
(1)
|
Includes loans held at fair value.
|
|
|
|
December 31, 2016
|
||||||||||||||||||||||
|
|
|
Commercial
Mortgage
Loans
|
|
Agricultural
Property
Loans
|
|
Residential
Property
Loans
|
|
Other
Collateralized
Loans
|
|
Uncollateralized
Loans
|
|
Total
|
||||||||||||
|
|
|
(in millions)
|
||||||||||||||||||||||
|
Allowance for credit losses, beginning of year
|
|
$
|
97
|
|
|
$
|
2
|
|
|
$
|
3
|
|
|
$
|
0
|
|
|
$
|
10
|
|
|
$
|
112
|
|
|
Addition to (release of) allowance for losses
|
|
0
|
|
|
0
|
|
|
(1
|
)
|
|
0
|
|
|
(5
|
)
|
|
(6
|
)
|
||||||
|
Charge-offs, net of recoveries
|
|
(1
|
)
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
(1
|
)
|
||||||
|
Change in foreign exchange
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
1
|
|
|
1
|
|
||||||
|
Total ending balance
|
|
$
|
96
|
|
|
$
|
2
|
|
|
$
|
2
|
|
|
$
|
0
|
|
|
$
|
6
|
|
|
$
|
106
|
|
|
|
|
December 31, 2015
|
||||||||||||||||||||||
|
|
|
Commercial
Mortgage
Loans
|
|
Agricultural
Property
Loans
|
|
Residential
Property
Loans
|
|
Other
Collateralized
Loans
|
|
Uncollateralized
Loans
|
|
Total
|
||||||||||||
|
|
|
(in millions)
|
||||||||||||||||||||||
|
Allowance for credit losses, beginning of year
|
|
$
|
104
|
|
|
$
|
1
|
|
|
$
|
5
|
|
|
$
|
0
|
|
|
$
|
9
|
|
|
$
|
119
|
|
|
Addition to (release of) allowance for losses
|
|
(7
|
)
|
|
1
|
|
|
(2
|
)
|
|
0
|
|
|
1
|
|
|
(7
|
)
|
||||||
|
Charge-offs, net of recoveries
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
||||||
|
Change in foreign exchange
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
||||||
|
Total ending balance
|
|
$
|
97
|
|
|
$
|
2
|
|
|
$
|
3
|
|
|
$
|
0
|
|
|
$
|
10
|
|
|
$
|
112
|
|
|
|
|
December 31, 2016
|
||||||||||||||||||||||
|
|
|
Commercial
Mortgage
Loans
|
|
Agricultural
Property
Loans
|
|
Residential
Property
Loans
|
|
Other
Collateralized
Loans
|
|
Uncollateralized
Loans
|
|
Total
|
||||||||||||
|
|
|
(in millions)
|
||||||||||||||||||||||
|
Allowance for Credit Losses:
|
|
|
||||||||||||||||||||||
|
Individually evaluated for impairment
|
|
$
|
6
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
6
|
|
|
Collectively evaluated for impairment
|
|
90
|
|
|
2
|
|
|
2
|
|
|
0
|
|
|
6
|
|
|
100
|
|
||||||
|
Loans acquired with deteriorated credit quality
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
||||||
|
Total ending balance
|
|
$
|
96
|
|
|
$
|
2
|
|
|
$
|
2
|
|
|
$
|
0
|
|
|
$
|
6
|
|
|
$
|
106
|
|
|
Recorded Investment(1):
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Individually evaluated for impairment
|
|
$
|
116
|
|
|
$
|
30
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
2
|
|
|
$
|
148
|
|
|
Collectively evaluated for impairment
|
|
48,911
|
|
|
2,928
|
|
|
252
|
|
|
10
|
|
|
636
|
|
|
52,737
|
|
||||||
|
Loans acquired with deteriorated credit quality
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
||||||
|
Total ending balance
|
|
$
|
49,027
|
|
|
$
|
2,958
|
|
|
$
|
252
|
|
|
$
|
10
|
|
|
$
|
638
|
|
|
$
|
52,885
|
|
|
(1)
|
Recorded investment reflects the carrying value gross of related allowance.
|
|
|
|
December 31, 2015
|
||||||||||||||||||||||
|
|
|
Commercial
Mortgage
Loans
|
|
Agricultural
Property
Loans
|
|
Residential
Property
Loans
|
|
Other
Collateralized
Loans
|
|
Uncollateralized
Loans
|
|
Total
|
||||||||||||
|
|
|
(in millions)
|
||||||||||||||||||||||
|
Allowance for Credit Losses:
|
|
|
||||||||||||||||||||||
|
Individually evaluated for impairment
|
|
$
|
1
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
1
|
|
|
Collectively evaluated for impairment
|
|
96
|
|
|
2
|
|
|
3
|
|
|
0
|
|
|
10
|
|
|
111
|
|
||||||
|
Loans acquired with deteriorated credit quality
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
||||||
|
Total ending balance
|
|
$
|
97
|
|
|
$
|
2
|
|
|
$
|
3
|
|
|
$
|
0
|
|
|
$
|
10
|
|
|
$
|
112
|
|
|
Recorded Investment(1):
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Individually evaluated for impairment
|
|
$
|
111
|
|
|
$
|
8
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
2
|
|
|
$
|
121
|
|
|
Collectively evaluated for impairment
|
|
46,076
|
|
|
2,851
|
|
|
301
|
|
|
312
|
|
|
1,010
|
|
|
50,550
|
|
||||||
|
Loans acquired with deteriorated credit quality
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
||||||
|
Total ending balance
|
|
$
|
46,187
|
|
|
$
|
2,859
|
|
|
$
|
301
|
|
|
$
|
312
|
|
|
$
|
1,012
|
|
|
$
|
50,671
|
|
|
(1)
|
Recorded investment reflects the carrying value gross of related allowance.
|
|
Commercial mortgage loans
|
|
|
||||||||||||||
|
|
|
Debt Service Coverage Ratio—December 31, 2016
|
||||||||||||||
|
|
|
>
1.2X
|
|
1.0X to <1.2X
|
|
Less than
1.0X
|
|
Total
|
||||||||
|
|
|
(in millions)
|
||||||||||||||
|
Loan-to-Value Ratio
|
|
|
||||||||||||||
|
0%-59.99%
|
|
$
|
28,131
|
|
|
$
|
446
|
|
|
$
|
626
|
|
|
$
|
29,203
|
|
|
60%-69.99%
|
|
12,608
|
|
|
401
|
|
|
115
|
|
|
13,124
|
|
||||
|
70%-79.99%
|
|
5,383
|
|
|
694
|
|
|
56
|
|
|
6,133
|
|
||||
|
80% or greater
|
|
373
|
|
|
62
|
|
|
132
|
|
|
567
|
|
||||
|
Total commercial mortgage loans
|
|
$
|
46,495
|
|
|
$
|
1,603
|
|
|
$
|
929
|
|
|
$
|
49,027
|
|
|
Agricultural property loans
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
Debt Service Coverage Ratio—December 31, 2016
|
||||||||||||||
|
|
|
>
1.2X
|
|
1.0X to <1.2X
|
|
Less than
1.0X
|
|
Total
|
||||||||
|
|
|
(in millions)
|
||||||||||||||
|
Loan-to-Value Ratio
|
|
|
||||||||||||||
|
0%-59.99%
|
|
$
|
2,803
|
|
|
$
|
114
|
|
|
$
|
17
|
|
|
$
|
2,934
|
|
|
60%-69.99%
|
|
24
|
|
|
0
|
|
|
0
|
|
|
24
|
|
||||
|
70%-79.99%
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
||||
|
80% or greater
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
||||
|
Total agricultural property loans
|
|
$
|
2,827
|
|
|
$
|
114
|
|
|
$
|
17
|
|
|
$
|
2,958
|
|
|
Total commercial mortgage and agricultural property loans
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
Debt Service Coverage Ratio—December 31, 2016
|
||||||||||||||
|
|
|
>
1.2X
|
|
1.0X to <1.2X
|
|
Less than
1.0X
|
|
Total
|
||||||||
|
|
|
(in millions)
|
||||||||||||||
|
Loan-to-Value Ratio
|
|
|
||||||||||||||
|
0%-59.99%
|
|
$
|
30,934
|
|
|
$
|
560
|
|
|
$
|
643
|
|
|
$
|
32,137
|
|
|
60%-69.99%
|
|
12,632
|
|
|
401
|
|
|
115
|
|
|
13,148
|
|
||||
|
70%-79.99%
|
|
5,383
|
|
|
694
|
|
|
56
|
|
|
6,133
|
|
||||
|
80% or greater
|
|
373
|
|
|
62
|
|
|
132
|
|
|
567
|
|
||||
|
Total commercial mortgage and agricultural property loans
|
|
$
|
49,322
|
|
|
$
|
1,717
|
|
|
$
|
946
|
|
|
$
|
51,985
|
|
|
Commercial mortgage loans
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
Debt Service Coverage Ratio—December 31, 2015
|
||||||||||||||
|
|
|
>
1.2X
|
|
1.0X to <1.2X
|
|
Less than
1.0X
|
|
Total
|
||||||||
|
|
|
(in millions)
|
||||||||||||||
|
Loan-to-Value Ratio
|
|
|
||||||||||||||
|
0%-59.99%
|
|
$
|
25,978
|
|
|
$
|
515
|
|
|
$
|
207
|
|
|
$
|
26,700
|
|
|
60%-69.99%
|
|
12,191
|
|
|
395
|
|
|
234
|
|
|
12,820
|
|
||||
|
70%-79.99%
|
|
5,668
|
|
|
500
|
|
|
97
|
|
|
6,265
|
|
||||
|
80% or greater
|
|
119
|
|
|
151
|
|
|
132
|
|
|
402
|
|
||||
|
Total commercial mortgage loans
|
|
$
|
43,956
|
|
|
$
|
1,561
|
|
|
$
|
670
|
|
|
$
|
46,187
|
|
|
Agricultural property loans
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
Debt Service Coverage Ratio—December 31, 2015
|
||||||||||||||
|
|
|
>
1.2X
|
|
1.0X to <1.2X
|
|
Less than
1.0X
|
|
Total
|
||||||||
|
|
|
(in millions)
|
||||||||||||||
|
Loan-to-Value Ratio
|
|
|
||||||||||||||
|
0%-59.99%
|
|
$
|
2,587
|
|
|
$
|
84
|
|
|
$
|
3
|
|
|
$
|
2,674
|
|
|
60%-69.99%
|
|
185
|
|
|
0
|
|
|
0
|
|
|
185
|
|
||||
|
70%-79.99%
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
||||
|
80% or greater
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
||||
|
Total agricultural property loans
|
|
$
|
2,772
|
|
|
$
|
84
|
|
|
$
|
3
|
|
|
$
|
2,859
|
|
|
Total commercial mortgage and agricultural property loans
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
Debt Service Coverage Ratio—December 31, 2015
|
||||||||||||||
|
|
|
>
1.2X
|
|
1.0X to <1.2X
|
|
Less than
1.0X
|
|
Total
|
||||||||
|
|
|
(in millions)
|
||||||||||||||
|
Loan-to-Value Ratio
|
|
|
||||||||||||||
|
0%-59.99%
|
|
$
|
28,565
|
|
|
$
|
599
|
|
|
$
|
210
|
|
|
$
|
29,374
|
|
|
60%-69.99%
|
|
12,376
|
|
|
395
|
|
|
234
|
|
|
13,005
|
|
||||
|
70%-79.99%
|
|
5,668
|
|
|
500
|
|
|
97
|
|
|
6,265
|
|
||||
|
80% or greater
|
|
119
|
|
|
151
|
|
|
132
|
|
|
402
|
|
||||
|
Total commercial mortgage and agricultural property loans
|
|
$
|
46,728
|
|
|
$
|
1,645
|
|
|
$
|
673
|
|
|
$
|
49,046
|
|
|
|
|
December 31, 2016
|
||||||||||||||||||||||||||
|
|
|
Current
|
|
30-59 Days
Past Due
|
|
60-89 Days
Past Due
|
|
90 Days or More Past Due(1)
|
|
Total Past
Due
|
|
Total Loans
|
|
Non-
Accrual
Status
|
||||||||||||||
|
|
|
(in millions)
|
||||||||||||||||||||||||||
|
Commercial mortgage loans
|
|
$
|
49,006
|
|
|
$
|
21
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
21
|
|
|
$
|
49,027
|
|
|
$
|
49
|
|
|
Agricultural property loans
|
|
2,956
|
|
|
0
|
|
|
0
|
|
|
2
|
|
|
2
|
|
|
2,958
|
|
|
2
|
|
|||||||
|
Residential property loans
|
|
241
|
|
|
7
|
|
|
1
|
|
|
3
|
|
|
11
|
|
|
252
|
|
|
3
|
|
|||||||
|
Other collateralized loans
|
|
10
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
10
|
|
|
0
|
|
|||||||
|
Uncollateralized loans
|
|
638
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
638
|
|
|
0
|
|
|||||||
|
Total
|
|
$
|
52,851
|
|
|
$
|
28
|
|
|
$
|
1
|
|
|
$
|
5
|
|
|
$
|
34
|
|
|
$
|
52,885
|
|
|
$
|
54
|
|
|
(1)
|
There were no loans accruing interest.
|
|
|
|
December 31, 2015
|
||||||||||||||||||||||||||
|
|
|
Current
|
|
30-59 Days
Past Due
|
|
60-89 Days
Past Due
|
|
90 Days or More Past Due(1)
|
|
Total Past
Due
|
|
Total Loans
|
|
Non-
Accrual
Status
|
||||||||||||||
|
|
|
(in millions)
|
||||||||||||||||||||||||||
|
Commercial mortgage loans
|
|
$
|
46,187
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
46,187
|
|
|
$
|
53
|
|
|
Agricultural property loans
|
|
2,856
|
|
|
2
|
|
|
0
|
|
|
1
|
|
|
3
|
|
|
2,859
|
|
|
1
|
|
|||||||
|
Residential property loans
|
|
288
|
|
|
7
|
|
|
0
|
|
|
6
|
|
|
13
|
|
|
301
|
|
|
6
|
|
|||||||
|
Other collateralized loans
|
|
312
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
312
|
|
|
0
|
|
|||||||
|
Uncollateralized loans
|
|
1,012
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
1,012
|
|
|
0
|
|
|||||||
|
Total
|
|
$
|
50,655
|
|
|
$
|
9
|
|
|
$
|
0
|
|
|
$
|
7
|
|
|
$
|
16
|
|
|
$
|
50,671
|
|
|
$
|
60
|
|
|
(1)
|
There were no loans accruing interest.
|
|
|
|
2016
|
|
2015
|
||||
|
|
|
(in millions)
|
||||||
|
Joint ventures and limited partnerships:
|
|
|
|
|
||||
|
Private equity
|
|
$
|
4,059
|
|
|
$
|
4,393
|
|
|
Hedge funds
|
|
2,660
|
|
|
2,054
|
|
||
|
Real estate-related
|
|
1,291
|
|
|
1,085
|
|
||
|
Total joint ventures and limited partnerships
|
|
8,010
|
|
|
7,532
|
|
||
|
Real estate held through direct ownership
|
|
2,195
|
|
|
1,464
|
|
||
|
Other
|
|
1,078
|
|
|
990
|
|
||
|
Total other long-term investments
|
|
$
|
11,283
|
|
|
$
|
9,986
|
|
|
|
|
At December 31,
|
||||||
|
|
|
2016
|
|
2015
|
||||
|
|
|
(in millions)
|
||||||
|
STATEMENTS OF FINANCIAL POSITION
|
|
|
|
|
||||
|
Total assets(1)
|
|
$
|
59,897
|
|
|
$
|
53,799
|
|
|
Total liabilities(2)
|
|
$
|
14,787
|
|
|
$
|
13,610
|
|
|
Partners’ capital
|
|
45,110
|
|
|
40,189
|
|
||
|
Total liabilities and partners’ capital
|
|
$
|
59,897
|
|
|
$
|
53,799
|
|
|
Total liabilities and partners’ capital included above
|
|
$
|
5,135
|
|
|
$
|
4,398
|
|
|
Equity in limited partnership interests not included above
|
|
592
|
|
|
142
|
|
||
|
Carrying value
|
|
$
|
5,727
|
|
|
$
|
4,540
|
|
|
(1)
|
Assets consist primarily of investments in real estate, investments in securities and other miscellaneous assets.
|
|
(2)
|
Liabilities consist primarily of third-party-borrowed funds, securities repurchase agreements and other miscellaneous liabilities.
|
|
|
|
Years ended December 31,
|
||||||||||
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
|
|
(in millions)
|
||||||||||
|
STATEMENTS OF OPERATIONS
|
|
|
|
|
|
|
||||||
|
Total revenue(1)
|
|
$
|
5,360
|
|
|
$
|
4,356
|
|
|
$
|
5,632
|
|
|
Total expenses(2)
|
|
(1,995
|
)
|
|
(1,803
|
)
|
|
(1,654
|
)
|
|||
|
Net earnings (losses)
|
|
$
|
3,365
|
|
|
$
|
2,553
|
|
|
$
|
3,978
|
|
|
Equity in net earnings (losses) included above
|
|
$
|
247
|
|
|
$
|
216
|
|
|
$
|
522
|
|
|
Equity in net earnings (losses) of limited partnership interests not included above
|
|
103
|
|
|
32
|
|
|
72
|
|
|||
|
Total equity in net earnings (losses)
|
|
$
|
350
|
|
|
$
|
248
|
|
|
$
|
594
|
|
|
(1)
|
Revenue consists of income from investments in real estate, investments in securities and other income.
|
|
(2)
|
Expenses consist primarily of interest expense, management fees, salary expenses and other expenses.
|
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
|
|
(in millions)
|
||||||||||
|
Fixed maturities, available-for-sale(1)(2)
|
|
$
|
10,920
|
|
|
$
|
10,347
|
|
|
$
|
10,558
|
|
|
Fixed maturities, held-to-maturity(1)(2)
|
|
208
|
|
|
202
|
|
|
185
|
|
|||
|
Equity securities, available-for-sale
|
|
366
|
|
|
337
|
|
|
354
|
|
|||
|
Trading account assets
|
|
986
|
|
|
1,205
|
|
|
1,074
|
|
|||
|
Commercial mortgage and other loans
|
|
2,243
|
|
|
2,255
|
|
|
2,103
|
|
|||
|
Policy loans
|
|
627
|
|
|
619
|
|
|
632
|
|
|||
|
Short-term investments and cash equivalents
|
|
145
|
|
|
56
|
|
|
38
|
|
|||
|
Other long-term investments
|
|
731
|
|
|
717
|
|
|
1,050
|
|
|||
|
Gross investment income
|
|
16,226
|
|
|
15,738
|
|
|
15,994
|
|
|||
|
Less: investment expenses
|
|
(706
|
)
|
|
(909
|
)
|
|
(738
|
)
|
|||
|
Net investment income
|
|
$
|
15,520
|
|
|
$
|
14,829
|
|
|
$
|
15,256
|
|
|
(1)
|
Includes income on credit-linked notes which are reported on the same financial statement line item as related surplus notes, as conditions are met for right to offset.
|
|
(2)
|
During 2016, fixed maturity prepayment fees and call premiums were reclassified to “Net investment income.” Prior periods were not restated. The impact of this change was immaterial.
|
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
|
|
(in millions)
|
||||||||||
|
Fixed maturities
|
|
$
|
666
|
|
|
$
|
1,634
|
|
|
$
|
1,194
|
|
|
Equity securities
|
|
376
|
|
|
451
|
|
|
512
|
|
|||
|
Commercial mortgage and other loans
|
|
55
|
|
|
37
|
|
|
110
|
|
|||
|
Investment real estate
|
|
15
|
|
|
40
|
|
|
(5
|
)
|
|||
|
Joint ventures and limited partnerships
|
|
(94
|
)
|
|
(122
|
)
|
|
(15
|
)
|
|||
|
Derivatives(1)
|
|
1,175
|
|
|
1,970
|
|
|
(182
|
)
|
|||
|
Other
|
|
1
|
|
|
15
|
|
|
22
|
|
|||
|
Realized investment gains (losses), net
|
|
$
|
2,194
|
|
|
$
|
4,025
|
|
|
$
|
1,636
|
|
|
(1)
|
Includes the offset of hedged items in qualifying effective hedge relationships prior to maturity or termination.
|
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
|
|
(in millions)
|
||||||||||
|
Fixed maturity securities on which an OTTI loss has been recognized
|
|
$
|
312
|
|
|
$
|
234
|
|
|
$
|
349
|
|
|
Fixed maturity securities, available-for-sale—all other
|
|
28,526
|
|
|
24,673
|
|
|
33,625
|
|
|||
|
Equity securities, available-for-sale
|
|
2,599
|
|
|
2,427
|
|
|
2,940
|
|
|||
|
Derivatives designated as cash flow hedges(1)
|
|
1,316
|
|
|
1,165
|
|
|
206
|
|
|||
|
Other investments(2)
|
|
(21
|
)
|
|
(25
|
)
|
|
(7
|
)
|
|||
|
Net unrealized gains (losses) on investments
|
|
$
|
32,732
|
|
|
$
|
28,474
|
|
|
$
|
37,113
|
|
|
(1)
|
See Note 21 for more information on cash flow hedges.
|
|
(2)
|
As of December 31,
2016
, there were
no
unrealized losses on held-to-maturity securities that were previously transferred from available-for-sale. Includes net unrealized losses on certain joint ventures that are strategic in nature and are included in “Other assets,” and losses on notes associated with payables under a netting agreement.
|
|
|
December 31, 2016
|
||||||||||||||||||
|
|
Remaining Contractual Maturities of the Agreements
|
||||||||||||||||||
|
|
Overnight & Continuous
|
|
Up to 30 Days
|
|
30 to 90 Days
|
|
Greater than 90 Days
|
|
Total
|
||||||||||
|
|
(in millions)
|
||||||||||||||||||
|
U.S. Treasury securities and obligations of U.S. government authorities and agencies
|
$
|
950
|
|
|
$
|
6,417
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
7,367
|
|
|
Obligations of U.S. states and their political subdivisions
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|||||
|
Foreign government bonds
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|||||
|
U.S. corporate public securities
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|||||
|
U.S. corporate private securities
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|||||
|
Foreign corporate public securities
|
6
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
6
|
|
|||||
|
Foreign corporate private securities
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|||||
|
Asset-backed securities
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|||||
|
Commercial mortgage-backed securities
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|||||
|
Residential mortgage-backed securities
|
0
|
|
|
233
|
|
|
0
|
|
|
0
|
|
|
233
|
|
|||||
|
Equity securities
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|||||
|
Total repurchase agreements
|
$
|
956
|
|
|
$
|
6,650
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
7,606
|
|
|
|
December 31, 2015
|
||||||||||||||||||
|
|
Remaining Contractual Maturities of the Agreements
|
||||||||||||||||||
|
|
Overnight & Continuous
|
|
Up to 30 Days
|
|
30 to 90 Days
|
|
Greater than 90 Days
|
|
Total
|
||||||||||
|
|
(in millions)
|
||||||||||||||||||
|
U.S. Treasury securities and obligations of U.S. government authorities and agencies
|
$
|
1,991
|
|
|
$
|
4,513
|
|
|
$
|
253
|
|
|
$
|
0
|
|
|
$
|
6,757
|
|
|
Obligations of U.S. states and their political subdivisions
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|||||
|
Foreign government bonds
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|||||
|
U.S. corporate public securities
|
11
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
11
|
|
|||||
|
U.S. corporate private securities
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|||||
|
Foreign corporate public securities
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|||||
|
Foreign corporate private securities
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|||||
|
Asset-backed securities
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|||||
|
Commercial mortgage-backed securities
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|||||
|
Residential mortgage-backed securities
|
169
|
|
|
945
|
|
|
0
|
|
|
0
|
|
|
1,114
|
|
|||||
|
Equity securities
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|||||
|
Total repurchase agreements
|
$
|
2,171
|
|
|
$
|
5,458
|
|
|
$
|
253
|
|
|
$
|
0
|
|
|
$
|
7,882
|
|
|
|
December 31, 2016
|
||||||||||||||||||
|
|
Remaining Contractual Maturities of the Agreements
|
||||||||||||||||||
|
|
Overnight & Continuous
|
|
Up to 30 Days
|
|
30 to 90 Days
|
|
Greater than 90 Days
|
|
Total
|
||||||||||
|
|
(in millions)
|
||||||||||||||||||
|
U.S. Treasury securities and obligations of U.S. government authorities and agencies
|
$
|
9
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
9
|
|
|
Obligations of U.S. states and their political subdivisions
|
18
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
18
|
|
|||||
|
Foreign government bonds
|
279
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
279
|
|
|||||
|
U.S. corporate public securities
|
2,731
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
2,731
|
|
|||||
|
U.S. corporate private securities
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|||||
|
Foreign corporate public securities
|
786
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
786
|
|
|||||
|
Foreign corporate private securities
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|||||
|
Asset-backed securities
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|||||
|
Commercial mortgage-backed securities
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|||||
|
Residential mortgage-backed securities
|
55
|
|
|
74
|
|
|
0
|
|
|
0
|
|
|
129
|
|
|||||
|
Equity securities
|
381
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
381
|
|
|||||
|
Total securities lending transactions
|
$
|
4,259
|
|
|
$
|
74
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
4,333
|
|
|
|
December 31, 2015
|
||||||||||||||||||
|
|
Remaining Contractual Maturities of the Agreements
|
||||||||||||||||||
|
|
Overnight & Continuous
|
|
Up to 30 Days
|
|
30 to 90 Days
|
|
Greater than 90 Days
|
|
Total
|
||||||||||
|
|
(in millions)
|
||||||||||||||||||
|
U.S. Treasury securities and obligations of U.S. government authorities and agencies
|
$
|
94
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
94
|
|
|
Obligations of U.S. states and their political subdivisions
|
4
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
4
|
|
|||||
|
Foreign government bonds
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|||||
|
U.S. corporate public securities
|
1,401
|
|
|
86
|
|
|
0
|
|
|
0
|
|
|
1,487
|
|
|||||
|
U.S. corporate private securities
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|||||
|
Foreign corporate public securities
|
579
|
|
|
50
|
|
|
0
|
|
|
0
|
|
|
629
|
|
|||||
|
Foreign corporate private securities
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|||||
|
Asset-backed securities
|
241
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
241
|
|
|||||
|
Commercial mortgage-backed securities
|
8
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
8
|
|
|||||
|
Residential mortgage-backed securities
|
0
|
|
|
97
|
|
|
0
|
|
|
0
|
|
|
97
|
|
|||||
|
Equity securities
|
936
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
936
|
|
|||||
|
Total securities lending transactions
|
$
|
3,263
|
|
|
$
|
233
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
3,496
|
|
|
|
|
2016
|
|
2015
|
||||
|
|
|
(in millions)
|
||||||
|
Fixed maturities
|
|
$
|
11,393
|
|
|
$
|
11,732
|
|
|
Trading account assets supporting insurance liabilities
|
|
477
|
|
|
327
|
|
||
|
Other trading account assets
|
|
2
|
|
|
8
|
|
||
|
Separate account assets
|
|
3,386
|
|
|
2,128
|
|
||
|
Equity securities
|
|
368
|
|
|
903
|
|
||
|
Total securities pledged
|
|
$
|
15,626
|
|
|
$
|
15,098
|
|
|
|
|
2016
|
|
2015
|
||||
|
|
|
(in millions)
|
||||||
|
Securities sold under agreements to repurchase
|
|
$
|
7,606
|
|
|
$
|
7,882
|
|
|
Cash collateral for loaned securities
|
|
4,333
|
|
|
3,496
|
|
||
|
Separate account liabilities
|
|
3,462
|
|
|
2,178
|
|
||
|
Policyholders’ account balances(1)
|
|
1,001
|
|
|
1,001
|
|
||
|
Total liabilities supported by the pledged collateral
|
|
$
|
16,402
|
|
|
$
|
14,557
|
|
|
(1)
|
Represents amounts supporting outstanding funding agreements.
|
|
5.
|
VARIABLE INTEREST ENTITIES
|
|
|
|
Consolidated VIEs for
Which the Company is the
Investment Manager
|
|
Other Consolidated VIEs
|
||||||||||||
|
|
|
December 31,
|
|
December 31,
|
||||||||||||
|
|
|
2016(1)
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
(in millions)
|
||||||||||||||
|
Fixed maturities, available-for-sale
|
|
$
|
65
|
|
|
$
|
0
|
|
|
$
|
269
|
|
|
$
|
179
|
|
|
Fixed maturities, held-to-maturity
|
|
81
|
|
|
0
|
|
|
783
|
|
|
760
|
|
||||
|
Trading account assets supporting insurance liabilities
|
|
0
|
|
|
0
|
|
|
9
|
|
|
10
|
|
||||
|
Other trading account assets
|
|
2,140
|
|
|
9,536
|
|
|
0
|
|
|
0
|
|
||||
|
Commercial mortgage and other loans
|
|
503
|
|
|
0
|
|
|
0
|
|
|
300
|
|
||||
|
Other long-term investments
|
|
1,083
|
|
|
0
|
|
|
114
|
|
|
155
|
|
||||
|
Cash and cash equivalents
|
|
618
|
|
|
337
|
|
|
1
|
|
|
1
|
|
||||
|
Accrued investment income
|
|
10
|
|
|
56
|
|
|
4
|
|
|
3
|
|
||||
|
Other assets
|
|
424
|
|
|
324
|
|
|
1
|
|
|
3
|
|
||||
|
Total assets of consolidated VIEs
|
|
$
|
4,924
|
|
|
$
|
10,253
|
|
|
$
|
1,181
|
|
|
$
|
1,411
|
|
|
Notes issued by consolidated VIEs
|
|
$
|
2,150
|
|
|
$
|
8,597
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
Other liabilities
|
|
611
|
|
|
674
|
|
|
7
|
|
|
3
|
|
||||
|
Total liabilities of consolidated VIEs
|
|
$
|
2,761
|
|
|
$
|
9,271
|
|
|
$
|
7
|
|
|
$
|
3
|
|
|
(1)
|
As a result of the adoption of the new accounting guidance ASU 2015-02 effective January 1, 2016, total assets of consolidated VIEs reflects
$1,386 million
related to VIEs whose beneficial interests are wholly-owned by consolidated subsidiaries.
|
|
6.
|
DEFERRED POLICY ACQUISITION COSTS
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
|
(in millions)
|
||||||||||
|
Balance, beginning of year
|
$
|
16,718
|
|
|
$
|
15,971
|
|
|
$
|
16,512
|
|
|
Capitalization of commissions, sales and issue expenses
|
2,845
|
|
|
2,653
|
|
|
2,694
|
|
|||
|
Amortization—Impact of assumption and experience unlocking and true-ups
|
445
|
|
|
280
|
|
|
629
|
|
|||
|
Amortization—All other
|
(2,322
|
)
|
|
(2,400
|
)
|
|
(2,602
|
)
|
|||
|
Change in unrealized investment gains and losses
|
(199
|
)
|
|
477
|
|
|
(697
|
)
|
|||
|
Foreign currency translation and other
|
174
|
|
|
(263
|
)
|
|
(565
|
)
|
|||
|
Balance, end of year
|
$
|
17,661
|
|
|
$
|
16,718
|
|
|
$
|
15,971
|
|
|
7.
|
INVESTMENTS IN OPERATING JOINT VENTURES
|
|
|
|
2016(1)
|
|
2015
|
|
2014
|
||||||
|
|
|
|
|
|
|
|
||||||
|
|
|
(in millions)
|
||||||||||
|
Investment in operating joint ventures
|
|
$
|
994
|
|
|
$
|
341
|
|
|
$
|
325
|
|
|
Dividends received from operating joint ventures
|
|
$
|
60
|
|
|
$
|
27
|
|
|
$
|
27
|
|
|
After-tax equity earnings of operating joint ventures
|
|
$
|
49
|
|
|
$
|
15
|
|
|
$
|
16
|
|
|
(1)
|
Results include the impact of the Company’s investment in AFP Habitat in March of 2016.
|
|
8.
|
VALUE OF BUSINESS ACQUIRED
|
|
|
2016(1)
|
|
2015
|
|
2014
|
||||||
|
|
(in millions)
|
||||||||||
|
Balance, beginning of year
|
$
|
2,828
|
|
|
$
|
2,836
|
|
|
$
|
3,675
|
|
|
Acquisitions
|
0
|
|
|
0
|
|
|
7
|
|
|||
|
Amortization—Impact of assumption and experience unlocking and true-ups
|
(246
|
)
|
|
128
|
|
|
(175
|
)
|
|||
|
Amortization—All other
|
(351
|
)
|
|
(385
|
)
|
|
(420
|
)
|
|||
|
Change in unrealized investment gains and losses
|
(112
|
)
|
|
214
|
|
|
(89
|
)
|
|||
|
Interest(2)
|
81
|
|
|
86
|
|
|
95
|
|
|||
|
Foreign currency translation
|
114
|
|
|
(57
|
)
|
|
(257
|
)
|
|||
|
Other
|
0
|
|
|
6
|
|
|
0
|
|
|||
|
Balance, end of year
|
$
|
2,314
|
|
|
$
|
2,828
|
|
|
$
|
2,836
|
|
|
(1)
|
The VOBA balances at December 31,
2016
were
$198 million
,
$33 million
,
$1,290 million
,
$0 million
,
$786 million
, and
$7 million
related to the insurance transactions associated with the CIGNA, Prudential Annuities Holding Co., Gibraltar Life, Aoba Life, The Hartford Life Business, and Gibraltar BSN Life Berhad, respectively. The weighted average remaining expected life of VOBA varies by product. The weighted average remaining expected lives were approximately
12
,
5
,
8
,
7
,
8
, and
16
years for the VOBA related to CIGNA, Prudential Annuities Holding Co., Gibraltar Life., Aoba Life, The Hartford Life Business, and Gibraltar BSN Life Berhad, respectively.
|
|
(2)
|
The interest accrual rates vary by product. The interest rates for
2016
were
6.40%
,
6.00%
,
1.28%
to
2.87%
,
2.60%
,
3.00%
to
6.17%
and
4.07%
to
5.51%
for the VOBA related to CIGNA, Prudential Annuities Holding Co., Gibraltar Life, Aoba Life, The Hartford Life Business, and Gibraltar BSN Life Berhad, respectively. The interest rates for
2015
were
6.40%
,
6.05%
,
1.28%
to
2.87%
,
2.60%
,
3.00%
to
6.17%
and
4.07%
to
5.51%
for the VOBA related to CIGNA, Prudential Annuities Holding Co., Gibraltar Life, Aoba Life, The Hartford Life Business, and Gibraltar BSN Life Berhad, respectively. The interest rates for
2014
were
6.40%
,
6.10%
,
1.28%
to
2.87%
,
2.60%
,
3.00%
to
6.17%
and
4.07%
to
5.51%
for the VOBA related to CIGNA, Prudential Annuities Holding Co., Gibraltar Life, Aoba Life, the Hartford Life Business, and Gibraltar BSN Life Berhad, respectively.
|
|
|
2017
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
||||||||||
|
|
(in millions)
|
||||||||||||||||||
|
Estimated future VOBA amortization
|
$
|
236
|
|
|
$
|
210
|
|
|
$
|
187
|
|
|
$
|
168
|
|
|
$
|
156
|
|
|
9.
|
GOODWILL AND OTHER INTANGIBLES
|
|
|
Retirement
|
|
Asset
Management
|
|
International
Insurance
|
|
Total
|
||||||||
|
|
(in millions)
|
||||||||||||||
|
Balance at December 31, 2013:
|
|
|
|
|
|
|
|
||||||||
|
Gross Goodwill
|
$
|
444
|
|
|
$
|
240
|
|
|
$
|
155
|
|
|
$
|
839
|
|
|
Accumulated Impairment Losses
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
||||
|
Net Goodwill
|
444
|
|
|
240
|
|
|
155
|
|
|
839
|
|
||||
|
2014 Activity:
|
|
|
|
|
|
|
|
||||||||
|
Acquisitions
|
0
|
|
|
0
|
|
|
18
|
|
|
18
|
|
||||
|
Other(1)
|
0
|
|
|
(5
|
)
|
|
(21
|
)
|
|
(26
|
)
|
||||
|
Balance at December 31, 2014:
|
|
|
|
|
|
|
|
||||||||
|
Gross Goodwill
|
444
|
|
|
235
|
|
|
152
|
|
|
831
|
|
||||
|
Accumulated Impairment Losses
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
||||
|
Net Goodwill
|
444
|
|
|
235
|
|
|
152
|
|
|
831
|
|
||||
|
2015 Activity:
|
|
|
|
|
|
|
|
||||||||
|
Acquisitions
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
||||
|
Other(1)
|
0
|
|
|
(4
|
)
|
|
(3
|
)
|
|
(7
|
)
|
||||
|
Balance at December 31, 2015:
|
|
|
|
|
|
|
|
||||||||
|
Gross Goodwill
|
444
|
|
|
231
|
|
|
149
|
|
|
824
|
|
||||
|
Accumulated Impairment Losses
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
||||
|
Net Goodwill
|
444
|
|
|
231
|
|
|
149
|
|
|
824
|
|
||||
|
2016 Activity:
|
|
|
|
|
|
|
|
||||||||
|
Acquisitions
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
||||
|
Other(1)
|
0
|
|
|
(1
|
)
|
|
10
|
|
|
9
|
|
||||
|
Balance at December 31, 2016:
|
|
|
|
|
|
|
|
||||||||
|
Gross Goodwill
|
444
|
|
|
230
|
|
|
159
|
|
|
833
|
|
||||
|
Accumulated Impairment Losses
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
||||
|
Net Goodwill
|
$
|
444
|
|
|
$
|
230
|
|
|
$
|
159
|
|
|
$
|
833
|
|
|
(1)
|
Other represents foreign currency translation and purchase price adjustments.
|
|
|
2016
|
|
2015
|
||||||||||||||||||||
|
|
Gross Carrying Amount
|
|
Accumulated
Amortization
|
|
Net Carrying Amount
|
|
Gross Carrying Amount
|
|
Accumulated
Amortization
|
|
Net Carrying Amount
|
||||||||||||
|
|
(in millions)
|
||||||||||||||||||||||
|
Subject to amortization:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Mortgage servicing rights
|
$
|
548
|
|
|
$
|
(341
|
)
|
|
$
|
207
|
|
|
$
|
500
|
|
|
$
|
(302
|
)
|
|
$
|
198
|
|
|
Customer relationships
|
243
|
|
|
(179
|
)
|
|
64
|
|
|
268
|
|
|
(196
|
)
|
|
72
|
|
||||||
|
Other
|
138
|
|
|
(102
|
)
|
|
36
|
|
|
72
|
|
|
(42
|
)
|
|
30
|
|
||||||
|
Not subject to amortization
|
3
|
|
|
N/A
|
|
|
3
|
|
|
3
|
|
|
N/A
|
|
|
3
|
|
||||||
|
Total
|
|
|
|
|
$
|
310
|
|
|
|
|
|
|
$
|
303
|
|
||||||||
|
10.
|
POLICYHOLDERS’ LIABILITIES
|
|
|
2016
|
|
2015
|
||||
|
|
(in millions)
|
||||||
|
Life insurance
|
$
|
161,406
|
|
|
$
|
148,100
|
|
|
Individual and group annuities and supplementary contracts
|
63,486
|
|
|
60,493
|
|
||
|
Other contract liabilities
|
13,173
|
|
|
12,872
|
|
||
|
Subtotal future policy benefits excluding unpaid claims and claim adjustment expenses
|
238,065
|
|
|
221,465
|
|
||
|
Unpaid claims and claim adjustment expenses
|
2,843
|
|
|
2,919
|
|
||
|
Total future policy benefits
|
$
|
240,908
|
|
|
$
|
224,384
|
|
|
|
2016
|
|
2015
|
||||
|
|
(in millions)
|
||||||
|
Individual annuities
|
$
|
40,338
|
|
|
$
|
37,384
|
|
|
Group annuities
|
28,350
|
|
|
27,141
|
|
||
|
Guaranteed investment contracts and guaranteed interest accounts
|
14,528
|
|
|
14,122
|
|
||
|
Funding agreements
|
4,794
|
|
|
3,997
|
|
||
|
Interest-sensitive life contracts
|
34,452
|
|
|
32,502
|
|
||
|
Dividend accumulation and other
|
22,743
|
|
|
21,638
|
|
||
|
Total policyholders’ account balances
|
$
|
145,205
|
|
|
$
|
136,784
|
|
|
11.
|
CERTAIN LONG-DURATION CONTRACTS WITH GUARANTEES
|
|
|
December 31, 2016
|
|
December 31, 2015
|
||||||||||||
|
|
In the Event
of Death
|
|
At Annuitization /
Accumulation(1)
|
|
In the Event
of Death
|
|
At Annuitization /
Accumulation(1)
|
||||||||
|
|
($ in millions)
|
||||||||||||||
|
Annuity Contracts
|
|
|
|
|
|
|
|
||||||||
|
Return of net deposits
|
|
|
|
|
|
|
|
||||||||
|
Account value
|
$
|
119,433
|
|
|
$
|
152
|
|
|
$
|
115,317
|
|
|
$
|
142
|
|
|
Net amount at risk
|
$
|
493
|
|
|
$
|
0
|
|
|
$
|
739
|
|
|
$
|
0
|
|
|
Average attained age of contractholders
|
65 years
|
|
|
66 years
|
|
|
65 years
|
|
|
64 years
|
|
||||
|
Minimum return or contract value
|
|
|
|
|
|
|
|
||||||||
|
Account value
|
$
|
33,843
|
|
|
$
|
135,462
|
|
|
$
|
34,494
|
|
|
$
|
131,005
|
|
|
Net amount at risk
|
$
|
3,714
|
|
|
$
|
5,788
|
|
|
$
|
4,212
|
|
|
$
|
5,459
|
|
|
Average attained age of contractholders
|
67 years
|
|
|
65 years
|
|
|
67 years
|
|
|
64 years
|
|
||||
|
Average period remaining until earliest expected annuitization
|
N/A
|
|
|
0.27 years
|
|
|
N/A
|
|
|
0.28 years
|
|
||||
|
(1)
|
Includes income and withdrawal benefits.
|
|
|
GMDB
|
|
GMIB
|
|
GMAB/GMWB/GMIWB
|
||||||||||
|
|
Variable Life,
Variable Universal Life
and Universal Life
|
|
Annuity
|
|
Annuity
|
|
Annuity
|
||||||||
|
|
(in millions)
|
||||||||||||||
|
Balance at December 31, 2013
|
$
|
1,795
|
|
|
$
|
461
|
|
|
$
|
397
|
|
|
$
|
441
|
|
|
Incurred guarantee benefits(1)(3)
|
794
|
|
|
245
|
|
|
40
|
|
|
7,741
|
|
||||
|
Paid guarantee benefits and other
|
(18
|
)
|
|
(68
|
)
|
|
(15
|
)
|
|
0
|
|
||||
|
Change in unrealized investment gains and losses(3)
|
283
|
|
|
4
|
|
|
44
|
|
|
0
|
|
||||
|
Other(2)(3)
|
(4
|
)
|
|
0
|
|
|
1
|
|
|
0
|
|
||||
|
Balance at December 31, 2014
|
2,850
|
|
|
642
|
|
|
467
|
|
|
8,182
|
|
||||
|
Incurred guarantee benefits(1)(3)
|
517
|
|
|
167
|
|
|
(40
|
)
|
|
252
|
|
||||
|
Paid guarantee benefits
|
(22
|
)
|
|
(85
|
)
|
|
(16
|
)
|
|
0
|
|
||||
|
Change in unrealized investment gains and losses(3)
|
(193
|
)
|
|
(10
|
)
|
|
41
|
|
|
0
|
|
||||
|
Other(2)(3)
|
(2
|
)
|
|
0
|
|
|
(12
|
)
|
|
(1
|
)
|
||||
|
Balance at December 31, 2015
|
3,150
|
|
|
714
|
|
|
440
|
|
|
8,433
|
|
||||
|
Incurred guarantee benefits(1)
|
927
|
|
|
98
|
|
|
(18
|
)
|
|
(194
|
)
|
||||
|
Paid guarantee benefits
|
(36
|
)
|
|
(91
|
)
|
|
(15
|
)
|
|
0
|
|
||||
|
Change in unrealized investment gains and losses
|
102
|
|
|
0
|
|
|
49
|
|
|
0
|
|
||||
|
Other(2)
|
0
|
|
|
0
|
|
|
18
|
|
|
(1
|
)
|
||||
|
Balance at December 31, 2016
|
$
|
4,143
|
|
|
$
|
721
|
|
|
$
|
474
|
|
|
$
|
8,238
|
|
|
(1)
|
Incurred guarantee benefits include the portion of assessments established as additions to reserves as well as changes in estimates affecting the reserves. Also includes changes in the fair value of features considered to be derivatives.
|
|
(2)
|
Other primarily represents foreign currency translation.
|
|
(3)
|
Prior period amounts are presented on a basis consistent with the current period presentation.
|
|
|
Sales Inducements
|
||
|
|
(in millions)
|
||
|
Balance at December 31, 2013
|
$
|
1,813
|
|
|
Capitalization
|
22
|
|
|
|
Amortization—Impact of assumption and experience unlocking and true-ups
|
81
|
|
|
|
Amortization—All other
|
(403
|
)
|
|
|
Change in unrealized investment gains and losses
|
1
|
|
|
|
Balance at December 31, 2014
|
1,514
|
|
|
|
Capitalization
|
8
|
|
|
|
Amortization—Impact of assumption and experience unlocking and true-ups
|
43
|
|
|
|
Amortization—All other
|
(392
|
)
|
|
|
Change in unrealized investment gains and losses
|
16
|
|
|
|
Balance at December 31, 2015
|
1,189
|
|
|
|
Capitalization
|
47
|
|
|
|
Amortization—Impact of assumption and experience unlocking and true-ups
|
118
|
|
|
|
Amortization—All other
|
(231
|
)
|
|
|
Change in unrealized investment gains and losses
|
4
|
|
|
|
Balance at December 31, 2016
|
$
|
1,127
|
|
|
12.
|
CLOSED BLOCK
|
|
|
|
2016
|
|
2015
|
||||
|
|
|
|
|
|
||||
|
|
|
(in millions)
|
||||||
|
Closed Block liabilities
|
|
|
|
|
||||
|
Future policy benefits
|
|
$
|
49,281
|
|
|
$
|
49,538
|
|
|
Policyholders’ dividends payable
|
|
932
|
|
|
945
|
|
||
|
Policyholders’ dividend obligation
|
|
4,658
|
|
|
4,509
|
|
||
|
Policyholders’ account balances
|
|
5,204
|
|
|
5,250
|
|
||
|
Other Closed Block liabilities
|
|
4,262
|
|
|
4,171
|
|
||
|
Total Closed Block liabilities
|
|
64,337
|
|
|
64,413
|
|
||
|
Closed Block assets
|
|
|
|
|
||||
|
Fixed maturities, available-for-sale, at fair value
|
|
38,696
|
|
|
37,584
|
|
||
|
Other trading account assets, at fair value
|
|
283
|
|
|
288
|
|
||
|
Equity securities, available-for-sale, at fair value
|
|
2,572
|
|
|
2,726
|
|
||
|
Commercial mortgage and other loans
|
|
9,437
|
|
|
9,770
|
|
||
|
Policy loans
|
|
4,660
|
|
|
4,790
|
|
||
|
Other long-term investments
|
|
3,020
|
|
|
2,921
|
|
||
|
Short-term investments
|
|
837
|
|
|
1,467
|
|
||
|
Total investments
|
|
59,505
|
|
|
59,546
|
|
||
|
Cash and cash equivalents
|
|
1,310
|
|
|
1,036
|
|
||
|
Accrued investment income
|
|
491
|
|
|
506
|
|
||
|
Other Closed Block assets
|
|
206
|
|
|
458
|
|
||
|
Total Closed Block assets
|
|
61,512
|
|
|
61,546
|
|
||
|
Excess of reported Closed Block liabilities over Closed Block assets
|
|
2,825
|
|
|
2,867
|
|
||
|
Portion of above representing accumulated other comprehensive income:
|
|
|
|
|
||||
|
Net unrealized investment gains (losses)
|
|
2,990
|
|
|
2,800
|
|
||
|
Allocated to policyholder dividend obligation
|
|
(3,011
|
)
|
|
(2,815
|
)
|
||
|
Future earnings to be recognized from Closed Block assets and Closed Block liabilities
|
|
$
|
2,804
|
|
|
$
|
2,852
|
|
|
|
|
2016
|
|
2015
|
||||
|
|
|
|
|
|
||||
|
|
|
(in millions)
|
||||||
|
Balance, January 1
|
|
$
|
4,509
|
|
|
$
|
6,612
|
|
|
Impact from earnings allocable to policyholder dividend obligation
|
|
(48
|
)
|
|
137
|
|
||
|
Change in net unrealized investment gains (losses) allocated to policyholder dividend obligation
|
|
197
|
|
|
(2,240
|
)
|
||
|
Balance, December 31
|
|
$
|
4,658
|
|
|
$
|
4,509
|
|
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
|
|
|
|
|
|
|
||||||
|
|
|
(in millions)
|
||||||||||
|
Revenues
|
|
|
|
|
|
|
||||||
|
Premiums
|
|
$
|
2,619
|
|
|
$
|
2,668
|
|
|
$
|
2,704
|
|
|
Net investment income
|
|
2,597
|
|
|
2,709
|
|
|
2,809
|
|
|||
|
Realized investment gains (losses), net
|
|
433
|
|
|
834
|
|
|
1,164
|
|
|||
|
Other income (loss)
|
|
36
|
|
|
23
|
|
|
34
|
|
|||
|
Total Closed Block revenues
|
|
5,685
|
|
|
6,234
|
|
|
6,711
|
|
|||
|
Benefits and Expenses
|
|
|
|
|
|
|
||||||
|
Policyholders’ benefits
|
|
3,283
|
|
|
3,366
|
|
|
3,326
|
|
|||
|
Interest credited to policyholders’ account balances
|
|
132
|
|
|
135
|
|
|
136
|
|
|||
|
Dividends to policyholders
|
|
1,941
|
|
|
2,130
|
|
|
2,635
|
|
|||
|
General and administrative expenses
|
|
402
|
|
|
423
|
|
|
444
|
|
|||
|
Total Closed Block benefits and expenses
|
|
5,758
|
|
|
6,054
|
|
|
6,541
|
|
|||
|
Closed Block revenues, net of Closed Block benefits and expenses, before income taxes and discontinued operations
|
|
(73
|
)
|
|
180
|
|
|
170
|
|
|||
|
Income tax expense (benefit)
|
|
(120
|
)
|
|
136
|
|
|
139
|
|
|||
|
Closed Block revenues, net of Closed Block benefits and expenses and income taxes, before discontinued operations
|
|
47
|
|
|
44
|
|
|
31
|
|
|||
|
Income (loss) from discontinued operations, net of taxes
|
|
0
|
|
|
0
|
|
|
1
|
|
|||
|
Closed Block revenues, net of Closed Block benefits and expenses, income taxes and discontinued operations
|
|
$
|
47
|
|
|
$
|
44
|
|
|
$
|
32
|
|
|
13.
|
REINSURANCE
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
|
(in millions)
|
||||||||||
|
Direct premiums
|
$
|
30,654
|
|
|
$
|
27,996
|
|
|
$
|
29,666
|
|
|
Reinsurance assumed
|
2,073
|
|
|
2,147
|
|
|
1,134
|
|
|||
|
Reinsurance ceded
|
(1,763
|
)
|
|
(1,622
|
)
|
|
(1,507
|
)
|
|||
|
Premiums
|
$
|
30,964
|
|
|
$
|
28,521
|
|
|
$
|
29,293
|
|
|
|
|
|
|
|
|
||||||
|
Direct policy charges and fee income
|
$
|
5,031
|
|
|
$
|
5,127
|
|
|
$
|
5,026
|
|
|
Reinsurance assumed
|
1,243
|
|
|
1,179
|
|
|
1,425
|
|
|||
|
Reinsurance ceded
|
(368
|
)
|
|
(334
|
)
|
|
(272
|
)
|
|||
|
Policy charges and fee income
|
$
|
5,906
|
|
|
$
|
5,972
|
|
|
$
|
6,179
|
|
|
|
|
|
|
|
|
||||||
|
Direct policyholders’ benefits
|
$
|
32,957
|
|
|
$
|
29,242
|
|
|
$
|
31,012
|
|
|
Reinsurance assumed
|
3,110
|
|
|
3,107
|
|
|
2,732
|
|
|||
|
Reinsurance ceded
|
(2,435
|
)
|
|
(1,722
|
)
|
|
(2,157
|
)
|
|||
|
Policyholders’ benefits
|
$
|
33,632
|
|
|
$
|
30,627
|
|
|
$
|
31,587
|
|
|
|
2016
|
|
2015
|
||||
|
|
(in millions)
|
||||||
|
Individual and group annuities(1)
|
$
|
658
|
|
|
$
|
659
|
|
|
Life insurance(2)
|
3,388
|
|
|
2,885
|
|
||
|
Other reinsurance
|
165
|
|
|
160
|
|
||
|
Total reinsurance recoverables
|
$
|
4,211
|
|
|
$
|
3,704
|
|
|
(1)
|
Primarily represents reinsurance recoverables established under the reinsurance arrangements associated with the acquisition of the retirement business of CIGNA. The Company has recorded reinsurance recoverables related to the acquisition of the retirement business of CIGNA of
$656 million
and
$650 million
at December 31,
2016
and
2015
, respectively. Also included is
$0 million
and
$7 million
of reinsurance recoverables at December 31,
2016
and
2015
, respectively, established under the reinsurance agreement with Union Hamilton Reinsurance, Ltd. related to the ceding of certain embedded derivative liabilities associated with the Company’s guaranteed benefits.
|
|
(2)
|
Includes
$2,049 million
and
$2,118 million
of reinsurance recoverables established at December 31,
2016
and
2015
, respectively, under the reinsurance arrangements associated with the acquisition of the Hartford Life Business. The Company has also recorded reinsurance payables related to the Hartford Life Business acquisition of
$1,205 million
and
$1,305 million
at December 31,
2016
and
2015
, respectively.
|
|
14.
|
SHORT-TERM AND LONG-TERM DEBT
|
|
|
2016
|
|
2015
|
||||
|
|
($ in millions)
|
||||||
|
Commercial paper:
|
|
|
|
||||
|
Prudential Financial
|
$
|
65
|
|
|
$
|
80
|
|
|
Prudential Funding, LLC
|
525
|
|
|
384
|
|
||
|
Subtotal commercial paper
|
590
|
|
|
464
|
|
||
|
Current portion of long-term debt
|
543
|
|
|
752
|
|
||
|
Total short-term debt(1)
|
$
|
1,133
|
|
|
$
|
1,216
|
|
|
Supplemental short-term debt information:
|
|
|
|
||||
|
Portion of commercial paper borrowings due overnight
|
$
|
292
|
|
|
$
|
331
|
|
|
Daily average commercial paper outstanding
|
$
|
1,020
|
|
|
$
|
1,127
|
|
|
Weighted average maturity of outstanding commercial paper, in days
|
21
|
|
|
10
|
|
||
|
Weighted average interest rate on outstanding short-term debt(2)
|
0.43
|
%
|
|
0.16
|
%
|
||
|
(1)
|
Includes Prudential Financial debt of
$535 million
and
$831 million
at December 31,
2016
and
2015
, respectively.
|
|
(2)
|
Excludes the current portion of long-term debt.
|
|
Borrower
|
Original
Term
|
|
Expiration
Date
|
|
Capacity
|
|
Amount Outstanding
|
||||
|
|
|
|
|
|
(in millions)
|
||||||
|
Prudential Financial and Prudential Funding
|
5 years
|
|
Apr 2020
|
|
$
|
4,000
|
|
|
$
|
0
|
|
|
Prudential Holdings of Japan, Inc.
|
3 years
|
|
Sep 2019
|
|
¥
|
100,000
|
|
|
¥
|
0
|
|
|
|
Maturity
Dates
|
|
Rate(2)
|
|
December 31,
|
||||||
|
2016
|
|
2015(1)
|
|||||||||
|
|
|
|
|
|
($ in millions)
|
||||||
|
Fixed-rate notes:
|
|
|
|
|
|
|
|
||||
|
Surplus notes
|
2019-2025
|
|
5.36%-8.30%
|
|
$
|
840
|
|
|
$
|
841
|
|
|
Surplus notes subject to set-off arrangements
|
2021-2033
|
|
3.52%-5.26%
|
|
4,403
|
|
|
3,850
|
|
||
|
Senior notes
|
2017-2045
|
|
2.30%-11.31%
|
|
9,236
|
|
|
10,208
|
|
||
|
Mortgage debt(3)
|
2019-2024
|
|
1.72%-3.74%
|
|
177
|
|
|
134
|
|
||
|
Floating-rate notes:
|
|
|
|
|
|
|
|
||||
|
Surplus notes
|
2052
|
|
1.58%-2.04%
|
|
499
|
|
|
500
|
|
||
|
Surplus notes subject to set-off arrangements
|
2024
|
|
1.73%-2.25%
|
|
1,456
|
|
|
1,050
|
|
||
|
U.S. dollar-denominated senior notes
|
2017-2020
|
|
1.14%-4.39%
|
|
1,008
|
|
|
1,608
|
|
||
|
Foreign currency denominated senior notes
|
(4)
|
|
1.07%-1.24%
|
|
55
|
|
|
51
|
|
||
|
Mortgage debt(5)
|
2017-2025
|
|
0.65%-2.40%
|
|
409
|
|
|
430
|
|
||
|
Junior subordinated notes
|
2042-2068
|
|
5.20%-8.88%
|
|
5,817
|
|
|
5,811
|
|
||
|
Subtotal
|
|
|
|
|
23,900
|
|
|
24,483
|
|
||
|
Less: assets under set-off arrangements(6)
|
|
|
|
|
5,859
|
|
|
4,889
|
|
||
|
Total long-term debt(7)
|
|
|
|
|
$
|
18,041
|
|
|
$
|
19,594
|
|
|
(1)
|
Prior period has been revised to conform to current period presentation due to the adoption of ASU 2015-03 regarding debt issuance costs. For more information, see Note 2 to the Consolidated Financial Statements.
|
|
(2)
|
Ranges of interest rates are for the year ended December 31,
2016
.
|
|
(3)
|
Includes
$82 million
and $
38 million
of debt denominated in foreign currency at December 31,
2016
and 2015, respectively.
|
|
(4)
|
Perpetual debt that has no stated maturity.
|
|
(5)
|
Includes
$221 million
and $
212 million
of debt denominated in foreign currency at December 31,
2016
and 2015, respectively.
|
|
(6)
|
Assets under set-off arrangements represent a reduction in the amount of surplus notes included in long-term debt, resulting from an arrangement where valid rights of set-off exist and it is the intent of both parties to settle on a net basis under legally enforceable arrangements. These assets include available-for-sale securities that are valued at market.
|
|
(7)
|
Includes Prudential Financial debt of
$15,389 million
and
$16,354 million
at December 31,
2016
and
2015
, respectively.
|
|
|
Calendar Year
|
|
|
||||||||||||||||||||
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
2022 and
thereafter
|
|
Total
|
||||||||||||
|
|
(in millions)
|
||||||||||||||||||||||
|
Long-term debt
|
$
|
1,330
|
|
|
$
|
1,684
|
|
|
$
|
1,253
|
|
|
$
|
554
|
|
|
$
|
13,220
|
|
|
$
|
18,041
|
|
|
Issue Date
|
Principal
Amount
|
|
Initial
Interest
Rate
|
|
Investor
Type
|
|
Optional
Redemption
Date(1)
|
|
Interest Rate
Subsequent to Optional
Redemption Date
|
|
Scheduled
Maturity Date
|
|
Final
Maturity Date
|
|||
|
|
($ in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
June 2008
|
$
|
600
|
|
|
8.88
|
%
|
|
Institutional
|
|
6/15/2018
|
|
LIBOR + 5.00%
|
|
6/15/2038
|
|
6/15/2068
|
|
August 2012
|
$
|
1,000
|
|
|
5.88
|
%
|
|
Institutional
|
|
9/15/2022
|
|
LIBOR + 4.18%
|
|
n/a
|
|
9/15/2042
|
|
November 2012
|
$
|
1,500
|
|
|
5.63
|
%
|
|
Institutional
|
|
6/15/2023
|
|
LIBOR + 3.92%
|
|
n/a
|
|
6/15/2043
|
|
December 2012
|
$
|
575
|
|
|
5.75
|
%
|
|
Retail
|
|
12/4/2017
|
|
5.75%
|
|
n/a
|
|
12/15/2052
|
|
March 2013
|
$
|
710
|
|
|
5.70
|
%
|
|
Retail
|
|
3/15/2018
|
|
5.70%
|
|
n/a
|
|
3/15/2053
|
|
March 2013
|
$
|
500
|
|
|
5.20
|
%
|
|
Institutional
|
|
3/15/2024
|
|
LIBOR + 3.04%
|
|
n/a
|
|
3/15/2044
|
|
May 2015
|
$
|
1,000
|
|
|
5.38
|
%
|
|
Institutional
|
|
5/15/2025
|
|
LIBOR + 3.03%
|
|
n/a
|
|
3/15/2045
|
|
(1)
|
Represents the initial date on which the notes can be redeemed at par solely at the option of the Company, subject in the case of the
8.88%
notes to compliance with a replacement capital covenant.
|
|
15.
|
EQUITY
|
|
|
|
Common Stock
|
|||||||
|
|
|
Issued
|
|
Held In
Treasury
|
|
Outstanding
|
|||
|
|
|
||||||||
|
|
|
|
|
|
|
|
|||
|
|
|
(in millions)
|
|||||||
|
Balance, December 31, 2013
|
|
660.1
|
|
|
199.0
|
|
|
461.1
|
|
|
Common Stock issued
|
|
0.0
|
|
|
0.0
|
|
|
0.0
|
|
|
Common Stock acquired
|
|
0.0
|
|
|
11.6
|
|
|
(11.6
|
)
|
|
Stock-based compensation programs(1)
|
|
0.0
|
|
|
(5.3
|
)
|
|
5.3
|
|
|
Balance, December 31, 2014
|
|
660.1
|
|
|
205.3
|
|
|
454.8
|
|
|
Common Stock issued
|
|
0.0
|
|
|
0.0
|
|
|
0.0
|
|
|
Common Stock acquired
|
|
0.0
|
|
|
12.1
|
|
|
(12.1
|
)
|
|
Stock-based compensation programs(1)
|
|
0.0
|
|
|
(4.4
|
)
|
|
4.4
|
|
|
Balance, December 31, 2015
|
|
660.1
|
|
|
213.0
|
|
|
447.1
|
|
|
Common Stock issued
|
|
0.0
|
|
|
0.0
|
|
|
0.0
|
|
|
Common Stock acquired
|
|
0.0
|
|
|
25.1
|
|
|
(25.1
|
)
|
|
Stock-based compensation programs(1)
|
|
0.0
|
|
|
(7.6
|
)
|
|
7.6
|
|
|
Balance, December 31, 2016
|
|
660.1
|
|
|
230.5
|
|
|
429.6
|
|
|
(1)
|
Represents net shares issued from treasury pursuant to the Company’s stock-based compensation programs.
|
|
|
Accumulated Other Comprehensive Income (Loss)
Attributable to Prudential Financial, Inc.
|
||||||||||||||
|
|
Foreign
Currency
Translation
Adjustment
|
|
Net Unrealized
Investment
Gains
(Losses)(1)
|
|
Pension and
Postretirement
Unrecognized Net
Periodic Benefit (Cost)
|
|
Total Accumulated Other Comprehensive Income (Loss)
|
||||||||
|
|
(in millions)
|
||||||||||||||
|
Balance, December 31, 2013
|
$
|
(113
|
)
|
|
$
|
10,344
|
|
|
$
|
(1,550
|
)
|
|
$
|
8,681
|
|
|
Change in OCI before reclassifications
|
(1,066
|
)
|
|
15,490
|
|
|
(1,134
|
)
|
|
13,290
|
|
||||
|
Amounts reclassified from AOCI
|
(3
|
)
|
|
(1,760
|
)
|
|
91
|
|
|
(1,672
|
)
|
||||
|
Income tax benefit (expense)
|
207
|
|
|
(4,823
|
)
|
|
367
|
|
|
(4,249
|
)
|
||||
|
Balance, December 31, 2014
|
(975
|
)
|
|
19,251
|
|
|
(2,226
|
)
|
|
16,050
|
|
||||
|
Change in OCI before reclassifications
|
(245
|
)
|
|
(3,161
|
)
|
|
(457
|
)
|
|
(3,863
|
)
|
||||
|
Amounts reclassified from AOCI
|
17
|
|
|
(2,325
|
)
|
|
193
|
|
|
(2,115
|
)
|
||||
|
Income tax benefit (expense)
|
116
|
|
|
2,008
|
|
|
89
|
|
|
2,213
|
|
||||
|
Balance, December 31, 2015
|
(1,087
|
)
|
|
15,773
|
|
|
(2,401
|
)
|
|
12,285
|
|
||||
|
Change in OCI before reclassifications
|
199
|
|
|
5,176
|
|
|
(468
|
)
|
|
4,907
|
|
||||
|
Amounts reclassified from AOCI
|
13
|
|
|
(1,493
|
)
|
|
214
|
|
|
(1,266
|
)
|
||||
|
Income tax benefit (expense)
|
(98
|
)
|
|
(1,285
|
)
|
|
78
|
|
|
(1,305
|
)
|
||||
|
Balance, December 31, 2016
|
$
|
(973
|
)
|
|
$
|
18,171
|
|
|
$
|
(2,577
|
)
|
|
$
|
14,621
|
|
|
(1)
|
Includes cash flow hedges of
$1,316 million
,
$1,165 million
and
$206 million
as of December 31,
2016
,
2015
, and
2014
, respectively.
|
|
|
Years Ended December 31,
|
|
Affected line item in Consolidated
Statements of Operations
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
|
|||||||
|
|
(in millions)
|
|
|
||||||||||
|
Amounts reclassified from AOCI(1)(2):
|
|
|
|
|
|
|
|
||||||
|
Foreign currency translation adjustment:
|
|
|
|
|
|
|
|
||||||
|
Foreign currency translation adjustment
|
$
|
(13
|
)
|
|
$
|
(8
|
)
|
|
$
|
3
|
|
|
Realized investment gains (losses), net
|
|
Foreign currency translation adjustment
|
0
|
|
|
(9
|
)
|
|
0
|
|
|
Other income
|
|||
|
Total foreign currency translation adjustment
|
(13
|
)
|
|
(17
|
)
|
|
3
|
|
|
|
|||
|
Net unrealized investment gains (losses):
|
|
|
|
|
|
|
|
||||||
|
Cash flow hedges—Interest Rate
|
(5
|
)
|
|
(7
|
)
|
|
(60
|
)
|
|
(3)
|
|||
|
Cash flow hedges—Currency/Interest rate
|
456
|
|
|
247
|
|
|
114
|
|
|
(3)
|
|||
|
Net unrealized investment gains (losses) on available-for-sale securities
|
1,042
|
|
|
2,085
|
|
|
1,706
|
|
|
|
|||
|
Total net unrealized investment gains (losses)
|
1,493
|
|
|
2,325
|
|
|
1,760
|
|
|
(4)
|
|||
|
Amortization of defined benefit items:
|
|
|
|
|
|
|
|
||||||
|
Prior service cost
|
8
|
|
|
13
|
|
|
20
|
|
|
(5)
|
|||
|
Actuarial gain (loss)
|
(222
|
)
|
|
(206
|
)
|
|
(111
|
)
|
|
(5)
|
|||
|
Total amortization of defined benefit items
|
(214
|
)
|
|
(193
|
)
|
|
(91
|
)
|
|
|
|||
|
Total reclassifications for the period
|
$
|
1,266
|
|
|
$
|
2,115
|
|
|
$
|
1,672
|
|
|
|
|
(1)
|
All amounts are shown before tax.
|
|
(2)
|
Positive amounts indicate gains/benefits reclassified out of AOCI. Negative amounts indicate losses/costs reclassified out of AOCI.
|
|
(3)
|
See Note 21 for additional information on cash flow hedges.
|
|
(4)
|
See table below for additional information on unrealized investment gains (losses), including the impact on deferred policy acquisition and other costs, future policy benefits and policyholders’ dividends.
|
|
(5)
|
See Note 18 for information on employee benefit plans.
|
|
|
Net Unrealized
Gains (Losses)
on Investments
|
|
DAC, DSI,
and VOBA
|
|
Future Policy
Benefits and
Policyholders’
Account
Balances
|
|
Policyholders’
Dividends
|
|
Deferred
Income
Tax
(Liability)
Benefit
|
|
Accumulated Other Comprehensive Income (Loss)
Related To Net
Unrealized
Investment
Gains (Losses)
|
||||||||||||
|
|
(in millions)
|
||||||||||||||||||||||
|
Balance, December 31, 2013
|
$
|
110
|
|
|
$
|
(5
|
)
|
|
$
|
4
|
|
|
$
|
64
|
|
|
$
|
(60
|
)
|
|
$
|
113
|
|
|
Net investment gains (losses) on investments arising during the period
|
196
|
|
|
|
|
|
|
|
|
(69
|
)
|
|
127
|
|
|||||||||
|
Reclassification adjustment for (gains) losses included in net income
|
47
|
|
|
|
|
|
|
|
|
(16
|
)
|
|
31
|
|
|||||||||
|
Reclassification adjustment for OTTI losses excluded from net income(1)
|
(4
|
)
|
|
|
|
|
|
|
|
1
|
|
|
(3
|
)
|
|||||||||
|
Impact of net unrealized investment (gains) losses on DAC, DSI, and VOBA
|
|
|
(1
|
)
|
|
|
|
|
|
0
|
|
|
(1
|
)
|
|||||||||
|
Impact of net unrealized investment (gains) losses on future policy benefits and policyholders’ account balances
|
|
|
|
|
(1
|
)
|
|
|
|
0
|
|
|
(1
|
)
|
|||||||||
|
Impact of net unrealized investment (gains) losses on policyholders’ dividends
|
|
|
|
|
|
|
(96
|
)
|
|
34
|
|
|
(62
|
)
|
|||||||||
|
Balance, December 31, 2014
|
349
|
|
|
(6
|
)
|
|
3
|
|
|
(32
|
)
|
|
(110
|
)
|
|
204
|
|
||||||
|
Net investment gains (losses) on investments arising during the period
|
(3
|
)
|
|
|
|
|
|
|
|
1
|
|
|
(2
|
)
|
|||||||||
|
Reclassification adjustment for (gains) losses included in net income
|
(97
|
)
|
|
|
|
|
|
|
|
35
|
|
|
(62
|
)
|
|||||||||
|
Reclassification adjustment for OTTI losses excluded from net income(1)
|
(15
|
)
|
|
|
|
|
|
|
|
5
|
|
|
(10
|
)
|
|||||||||
|
Impact of net unrealized investment (gains) losses on DAC, DSI, and VOBA
|
|
|
12
|
|
|
|
|
|
|
(4
|
)
|
|
8
|
|
|||||||||
|
Impact of net unrealized investment (gains) losses on future policy benefits and policyholders’ account balances
|
|
|
|
|
11
|
|
|
|
|
(4
|
)
|
|
7
|
|
|||||||||
|
Impact of net unrealized investment (gains) losses on policyholders’ dividends
|
|
|
|
|
|
|
1
|
|
|
0
|
|
|
1
|
|
|||||||||
|
Balance, December 31, 2015
|
234
|
|
|
6
|
|
|
14
|
|
|
(31
|
)
|
|
(77
|
)
|
|
146
|
|
||||||
|
Net investment gains (losses) on investments arising during the period
|
93
|
|
|
|
|
|
|
|
|
(31
|
)
|
|
62
|
|
|||||||||
|
Reclassification adjustment for (gains) losses included in net income
|
1
|
|
|
|
|
|
|
|
|
0
|
|
|
1
|
|
|||||||||
|
Reclassification adjustment for OTTI losses excluded from net income(1)
|
(16
|
)
|
|
|
|
|
|
|
|
5
|
|
|
(11
|
)
|
|||||||||
|
Impact of net unrealized investment (gains) losses on DAC, DSI, and VOBA
|
|
|
(11
|
)
|
|
|
|
|
|
3
|
|
|
(8
|
)
|
|||||||||
|
Impact of net unrealized investment (gains) losses on future policy benefits and policyholders’ account balances
|
|
|
|
|
(20
|
)
|
|
|
|
(3
|
)
|
|
(23
|
)
|
|||||||||
|
Impact of net unrealized investment (gains) losses on policyholders’ dividends
|
|
|
|
|
|
|
(16
|
)
|
|
6
|
|
|
(10
|
)
|
|||||||||
|
Balance, December 31, 2016
|
$
|
312
|
|
|
$
|
(5
|
)
|
|
$
|
(6
|
)
|
|
$
|
(47
|
)
|
|
$
|
(97
|
)
|
|
$
|
157
|
|
|
(1)
|
Represents “transfers in” related to the portion of OTTI losses recognized during the period that were not recognized in earnings for securities with no prior OTTI loss.
|
|
|
Net Unrealized
Gains (Losses) on Investments(1) |
|
DAC, DSI,
and VOBA |
|
Future Policy
Benefits and Policyholders’ Account Balances |
|
Policyholders’
Dividends |
|
Deferred
Income Tax (Liability) Benefit |
|
Accumulated Other Comprehensive Income (Loss)
Related To Net Unrealized Investment Gains (Losses) |
||||||||||||
|
|
(in millions)
|
||||||||||||||||||||||
|
Balance, December 31, 2013
|
$
|
20,494
|
|
|
$
|
(719
|
)
|
|
$
|
(679
|
)
|
|
$
|
(3,694
|
)
|
|
$
|
(5,171
|
)
|
|
$
|
10,231
|
|
|
Net investment gains (losses) on investments arising during the period
|
18,073
|
|
|
|
|
|
|
|
|
(6,337
|
)
|
|
11,736
|
|
|||||||||
|
Reclassification adjustment for (gains) losses included in net income
|
(1,807
|
)
|
|
|
|
|
|
|
|
632
|
|
|
(1,175
|
)
|
|||||||||
|
Reclassification adjustment for OTTI losses excluded from net income(2)
|
4
|
|
|
|
|
|
|
|
|
(1
|
)
|
|
3
|
|
|||||||||
|
Impact of net unrealized investment (gains) losses on DAC, DSI, and VOBA
|
|
|
(736
|
)
|
|
|
|
|
|
254
|
|
|
(482
|
)
|
|||||||||
|
Impact of net unrealized investment (gains) losses on future policy benefits and policyholders’ account balances
|
|
|
|
|
(603
|
)
|
|
|
|
211
|
|
|
(392
|
)
|
|||||||||
|
Impact of net unrealized investment (gains) losses on policyholders’ dividends
|
|
|
|
|
|
|
(1,342
|
)
|
|
468
|
|
|
(874
|
)
|
|||||||||
|
Balance, December 31, 2014
|
36,764
|
|
|
(1,455
|
)
|
|
(1,282
|
)
|
|
(5,036
|
)
|
|
(9,944
|
)
|
|
19,047
|
|
||||||
|
Net investment gains (losses) on investments arising during the period
|
(6,311
|
)
|
|
|
|
|
|
|
|
2,268
|
|
|
(4,043
|
)
|
|||||||||
|
Reclassification adjustment for (gains) losses included in net income
|
(2,228
|
)
|
|
|
|
|
|
|
|
801
|
|
|
(1,427
|
)
|
|||||||||
|
Reclassification adjustment for OTTI losses excluded from net income(2)
|
15
|
|
|
|
|
|
|
|
|
(5
|
)
|
|
10
|
|
|||||||||
|
Impact of net unrealized investment (gains) losses on DAC, DSI, and VOBA
|
|
|
695
|
|
|
|
|
|
|
(240
|
)
|
|
455
|
|
|||||||||
|
Impact of net unrealized investment (gains) losses on future policy benefits and policyholders’ account balances
|
|
|
|
|
200
|
|
|
|
|
(67
|
)
|
|
133
|
|
|||||||||
|
Impact of net unrealized investment (gains) losses on policyholders’ dividends
|
|
|
|
|
|
|
2,234
|
|
|
(782
|
)
|
|
1,452
|
|
|||||||||
|
Balance, December 31, 2015
|
28,240
|
|
|
(760
|
)
|
|
(1,082
|
)
|
|
(2,802
|
)
|
|
(7,969
|
)
|
|
15,627
|
|
||||||
|
Net investment gains (losses) on investments arising during the period
|
5,658
|
|
|
|
|
|
|
|
|
(1,910
|
)
|
|
3,748
|
|
|||||||||
|
Reclassification adjustment for (gains) losses included in net income
|
(1,494
|
)
|
|
|
|
|
|
|
|
504
|
|
|
(990
|
)
|
|||||||||
|
Reclassification adjustment for OTTI losses excluded from net income(2)
|
16
|
|
|
|
|
|
|
|
|
(5
|
)
|
|
11
|
|
|||||||||
|
Impact of net unrealized investment (gains) losses on DAC, DSI, and VOBA
|
|
|
(296
|
)
|
|
|
|
|
|
93
|
|
|
(203
|
)
|
|||||||||
|
Impact of net unrealized investment (gains) losses on future policy benefits and policyholders’ account balances
|
|
|
|
|
(54
|
)
|
|
|
|
(9
|
)
|
|
(63
|
)
|
|||||||||
|
Impact of net unrealized investment (gains) losses on policyholders’ dividends
|
|
|
|
|
|
|
(178
|
)
|
|
62
|
|
|
(116
|
)
|
|||||||||
|
Balance, December 31, 2016
|
$
|
32,420
|
|
|
$
|
(1,056
|
)
|
|
$
|
(1,136
|
)
|
|
$
|
(2,980
|
)
|
|
$
|
(9,234
|
)
|
|
$
|
18,014
|
|
|
(1)
|
Includes cash flow hedges. See Note 21 for information on cash flow hedges.
|
|
(2)
|
Represents “transfers out” related to the portion of OTTI losses recognized during the period that were not recognized in earnings for securities with no prior OTTI loss.
|
|
16.
|
EARNINGS PER SHARE
|
|
|
|
2016
|
|
2015
|
||||||||||||||||||
|
|
|
Income
|
|
Weighted
Average
Shares
|
|
Per Share
Amount
|
|
Income
|
|
Weighted
Average
Shares
|
|
Per Share
Amount
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
(in millions, except per share amounts)
|
||||||||||||||||||||
|
Basic earnings per share
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Income (loss) from continuing operations
|
|
$
|
4,419
|
|
|
|
|
|
|
$
|
5,712
|
|
|
|
|
|
||||||
|
Less: Income (loss) attributable to noncontrolling interests
|
|
51
|
|
|
|
|
|
|
70
|
|
|
|
|
|
||||||||
|
Less: Dividends and undistributed earnings allocated to participating unvested share-based payment awards
|
|
50
|
|
|
|
|
|
|
55
|
|
|
|
|
|
||||||||
|
Income (loss) from continuing operations attributable to Prudential Financial available to holders of Common Stock
|
|
$
|
4,318
|
|
|
438.2
|
|
|
$
|
9.85
|
|
|
$
|
5,587
|
|
|
451.7
|
|
|
$
|
12.37
|
|
|
Effect of dilutive securities and compensation programs
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Add: Dividends and undistributed earnings allocated to participating unvested share-based payment awards—Basic
|
|
$
|
50
|
|
|
|
|
|
|
$
|
55
|
|
|
|
|
|
||||||
|
Less: Dividends and undistributed earnings allocated to participating unvested share-based payment awards—Diluted
|
|
49
|
|
|
|
|
|
|
54
|
|
|
|
|
|
||||||||
|
Stock options
|
|
|
|
1.8
|
|
|
|
|
|
|
2.3
|
|
|
|
||||||||
|
Deferred and long-term compensation programs
|
|
|
|
0.9
|
|
|
|
|
|
|
0.9
|
|
|
|
||||||||
|
Exchangeable Surplus Notes
|
|
17
|
|
|
5.7
|
|
|
|
|
17
|
|
|
5.5
|
|
|
|
||||||
|
Diluted earnings per share
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Income (loss) from continuing operations attributable to Prudential Financial available to holders of Common Stock
|
|
$
|
4,336
|
|
|
446.6
|
|
|
$
|
9.71
|
|
|
$
|
5,605
|
|
|
460.4
|
|
|
$
|
12.17
|
|
|
|
|
2014
|
|||||||||
|
|
|
Income
|
|
Weighted
Average
Shares
|
|
Per Share
Amount
|
|||||
|
|
|
|
|
|
|
|
|||||
|
|
|
(in millions, except per share amounts)
|
|||||||||
|
Basic earnings per share
|
|
|
|
|
|
|
|||||
|
Income (loss) from continuing operations attributable to the Financial Services Businesses
|
|
$
|
1,579
|
|
|
|
|
|
|||
|
Direct equity adjustment
|
|
(27
|
)
|
|
|
|
|
||||
|
Less: Income (loss) attributable to noncontrolling interests
|
|
57
|
|
|
|
|
|
||||
|
Less: Dividends and undistributed earnings allocated to participating unvested share-based payment awards
|
|
14
|
|
|
|
|
|
||||
|
Income (loss) from continuing operations attributable to the Financial Services Businesses available to holders of Common Stock after direct equity adjustment
|
|
$
|
1,481
|
|
|
458.5
|
|
|
$
|
3.23
|
|
|
Effect of dilutive securities and compensation programs
|
|
|
|
|
|
|
|||||
|
Add: Dividends and undistributed earnings allocated to participating unvested share-based payment awards—Basic
|
|
$
|
14
|
|
|
|
|
|
|||
|
Less: Dividends and undistributed earnings allocated to participating unvested share-based payment awards—Diluted
|
|
14
|
|
|
|
|
|
||||
|
Stock options
|
|
|
|
3.0
|
|
|
|
||||
|
Deferred and long-term compensation programs
|
|
|
|
0.8
|
|
|
|
||||
|
Exchangeable Surplus Notes
|
|
17
|
|
|
5.4
|
|
|
|
|||
|
Diluted earnings per share
|
|
|
|
|
|
|
|||||
|
Income (loss) from continuing operations attributable to the Financial Services Businesses available to holders of Common Stock after direct equity adjustment
|
|
$
|
1,498
|
|
|
467.7
|
|
|
$
|
3.20
|
|
|
|
|
2016
|
|
2015
|
|
2014
|
|||||||||||||||
|
|
|
Shares
|
|
Exercise
Price Per
Share
|
|
Shares
|
|
Exercise
Price Per
Share
|
|
Shares
|
|
Exercise
Price Per
Share
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
|
(in millions, except per share amounts, based on
weighted average)
|
|||||||||||||||||||
|
Antidilutive stock options based on application of the treasury stock method
|
|
2.7
|
|
|
$
|
83.97
|
|
|
2.4
|
|
|
$
|
87.97
|
|
|
1.9
|
|
|
$
|
90.30
|
|
|
Antidilutive stock options due to loss from continuing operations available to holders of Common Stock after direct equity adjustment
|
|
0.0
|
|
|
|
|
0.0
|
|
|
|
|
0.0
|
|
|
|
||||||
|
Antidilutive shares due to loss from continuing operations available to holders of Common Stock after direct equity adjustment
|
|
0.0
|
|
|
|
|
0.0
|
|
|
|
|
0.0
|
|
|
|
||||||
|
Total antidilutive stock options and shares
|
|
2.7
|
|
|
|
|
2.4
|
|
|
|
|
1.9
|
|
|
|
||||||
|
17.
|
SHARE-BASED PAYMENTS
|
|
|
|
2016
|
|
2015
|
|
2014
|
|||
|
Expected volatility
|
|
38.36
|
%
|
|
34.67
|
%
|
|
35.52
|
%
|
|
Expected dividend yield
|
|
3.92
|
%
|
|
3.00
|
%
|
|
2.70
|
%
|
|
Expected term
|
|
5.61 years
|
|
|
5.57 years
|
|
|
5.63 years
|
|
|
Risk-free interest rate
|
|
1.25
|
%
|
|
1.61
|
%
|
|
1.74
|
%
|
|
|
|
2016
|
|
2015
|
|
2014
|
||||||||||||||||||
|
|
|
Total
Compensation Cost
Recognized
|
|
Income Tax
Benefit
|
|
Total
Compensation Cost
Recognized
|
|
Income Tax
Benefit
|
|
Total
Compensation Cost
Recognized
|
|
Income Tax
Benefit
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
|
(in millions)
|
||||||||||||||||||||||
|
Employee stock options
|
|
$
|
19
|
|
|
$
|
7
|
|
|
$
|
21
|
|
|
$
|
8
|
|
|
$
|
25
|
|
|
$
|
9
|
|
|
Employee restricted stock units
|
|
126
|
|
|
47
|
|
|
111
|
|
|
42
|
|
|
95
|
|
|
34
|
|
||||||
|
Employee performance shares and performance units
|
|
57
|
|
|
21
|
|
|
32
|
|
|
12
|
|
|
46
|
|
|
17
|
|
||||||
|
Total
|
|
$
|
202
|
|
|
$
|
75
|
|
|
$
|
164
|
|
|
$
|
62
|
|
|
$
|
166
|
|
|
$
|
60
|
|
|
|
|
Employee Stock Options
|
|||||
|
|
|
Shares
|
|
Weighted Average
Exercise Price
|
|||
|
Outstanding at December 31, 2015
|
|
10,926,146
|
|
|
$
|
66.18
|
|
|
Granted
|
|
1,219,714
|
|
|
63.73
|
|
|
|
Exercised
|
|
(4,986,622
|
)
|
|
68.03
|
|
|
|
Forfeited
|
|
(49,299
|
)
|
|
73.24
|
|
|
|
Expired
|
|
(371,137
|
)
|
|
80.48
|
|
|
|
Outstanding at December 31, 2016
|
|
6,738,802
|
|
|
$
|
63.53
|
|
|
Vested and expected to vest at December 31, 2016
|
|
6,693,811
|
|
|
$
|
63.51
|
|
|
Exercisable at December 31, 2016
|
|
4,720,572
|
|
|
$
|
60.66
|
|
|
|
|
December 31, 2016
|
||||
|
|
|
Employee Stock Options
|
||||
|
|
|
Weighted Average
Remaining
Contractual Term
|
|
Aggregate
Intrinsic Value
|
||
|
|
|
(in years)
|
|
(in millions)
|
||
|
Outstanding
|
|
5.64
|
|
$
|
273
|
|
|
Vested and expected to vest
|
|
5.62
|
|
$
|
271
|
|
|
Exercisable
|
|
4.50
|
|
$
|
205
|
|
|
|
|
Restricted
Stock
Units
|
|
Weighted
Average Grant
Date Fair Value
|
|
Performance
Share and
Performance
Unit Awards(1)
|
|
Weighted
Average Grant
Date Fair Value
|
||||||
|
Restricted at December 31, 2015(2)
|
|
4,354,286
|
|
|
$
|
73.50
|
|
|
1,390,497
|
|
|
$
|
81.41
|
|
|
Granted(2)
|
|
2,187,653
|
|
|
64.12
|
|
|
694,501
|
|
|
104.06
|
|
||
|
Forfeited
|
|
(110,815
|
)
|
|
72.13
|
|
|
(41,676
|
)
|
|
76.73
|
|
||
|
Performance adjustment(3)
|
|
|
|
|
|
188,838
|
|
|
63.59
|
|
||||
|
Released
|
|
(1,451,417
|
)
|
|
58.54
|
|
|
(568,487
|
)
|
|
63.71
|
|
||
|
Restricted at December 31, 2016(2)
|
|
4,979,707
|
|
|
$
|
73.77
|
|
|
1,663,673
|
|
|
$
|
104.06
|
|
|
(1)
|
Performance share and performance unit awards reflect the target units awarded, reduced for forfeitures and releases to date. The actual number of units to be awarded at the end of each performance period will range between
0%
and
125%
of the target number of units granted, based upon a measure of the reported performance for the Company relative to stated goals.
|
|
(2)
|
For performance share and performance unit awards, the grant date is the same as the date the grant vests. The features of the grant are such that a mutual understanding of the key terms and conditions of the award between the employee and employer have not been reached until the grant is vested. Consequently, the weighted average grant date fair value as of December 31,
2016
and December 31,
2015
is the closing stock price of Prudential Financial’s common stock on those dates.
|
|
(3)
|
Represents the difference between the target units granted and the actual units awarded based upon the attainment of performance goals for the Company.
|
|
18.
|
EMPLOYEE BENEFIT PLANS
|
|
|
|
Pension Benefits
|
|
Other Postretirement Benefits
|
||||||||||||
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
(in millions)
|
||||||||||||||
|
Change in benefit obligation
|
|
|
|
|
|
|
|
|
||||||||
|
Benefit obligation at the beginning of period
|
|
$
|
(12,221
|
)
|
|
$
|
(12,545
|
)
|
|
$
|
(2,159
|
)
|
|
$
|
(2,233
|
)
|
|
Service cost
|
|
(253
|
)
|
|
(244
|
)
|
|
(19
|
)
|
|
(20
|
)
|
||||
|
Interest cost
|
|
(498
|
)
|
|
(469
|
)
|
|
(91
|
)
|
|
(86
|
)
|
||||
|
Plan participants’ contributions
|
|
0
|
|
|
0
|
|
|
(31
|
)
|
|
(29
|
)
|
||||
|
Medicare Part D subsidy receipts
|
|
0
|
|
|
0
|
|
|
(10
|
)
|
|
(12
|
)
|
||||
|
Amendments
|
|
(3
|
)
|
|
0
|
|
|
0
|
|
|
(2
|
)
|
||||
|
Actuarial gains (losses), net
|
|
(602
|
)
|
|
335
|
|
|
46
|
|
|
43
|
|
||||
|
Settlements
|
|
24
|
|
|
22
|
|
|
0
|
|
|
0
|
|
||||
|
Special termination benefits
|
|
(2
|
)
|
|
(4
|
)
|
|
0
|
|
|
0
|
|
||||
|
Benefits paid
|
|
681
|
|
|
632
|
|
|
181
|
|
|
176
|
|
||||
|
Foreign currency changes and other
|
|
(43
|
)
|
|
52
|
|
|
(1
|
)
|
|
4
|
|
||||
|
Benefit obligation at end of period
|
|
$
|
(12,917
|
)
|
|
$
|
(12,221
|
)
|
|
$
|
(2,084
|
)
|
|
$
|
(2,159
|
)
|
|
Change in plan assets
|
|
|
|
|
|
|
|
|
||||||||
|
Fair value of plan assets at beginning of period
|
|
$
|
12,541
|
|
|
$
|
13,028
|
|
|
$
|
1,584
|
|
|
$
|
1,717
|
|
|
Actual return on plan assets
|
|
883
|
|
|
35
|
|
|
82
|
|
|
9
|
|
||||
|
Employer contributions
|
|
187
|
|
|
162
|
|
|
15
|
|
|
5
|
|
||||
|
Plan participants’ contributions
|
|
0
|
|
|
0
|
|
|
31
|
|
|
29
|
|
||||
|
Disbursement for settlements
|
|
(24
|
)
|
|
(22
|
)
|
|
0
|
|
|
0
|
|
||||
|
Benefits paid
|
|
(681
|
)
|
|
(632
|
)
|
|
(181
|
)
|
|
(176
|
)
|
||||
|
Foreign currency changes and other
|
|
(45
|
)
|
|
(30
|
)
|
|
0
|
|
|
0
|
|
||||
|
Fair value of plan assets at end of period
|
|
$
|
12,861
|
|
|
$
|
12,541
|
|
|
$
|
1,531
|
|
|
$
|
1,584
|
|
|
Funded status at end of period
|
|
$
|
(56
|
)
|
|
$
|
320
|
|
|
$
|
(553
|
)
|
|
$
|
(575
|
)
|
|
Amounts recognized in the Statements of Financial Position
|
|
|
|
|
|
|
|
|
||||||||
|
Prepaid benefit cost
|
|
$
|
2,538
|
|
|
$
|
2,687
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
Accrued benefit liability
|
|
(2,594
|
)
|
|
(2,367
|
)
|
|
(553
|
)
|
|
(575
|
)
|
||||
|
Net amount recognized
|
|
$
|
(56
|
)
|
|
$
|
320
|
|
|
$
|
(553
|
)
|
|
$
|
(575
|
)
|
|
Items recorded in “Accumulated other comprehensive income (loss)” not yet recognized as a component of net periodic (benefit) cost:
|
|
|
|
|
|
|
|
|
||||||||
|
Transition obligation
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
Prior service cost
|
|
(25
|
)
|
|
(33
|
)
|
|
1
|
|
|
(1
|
)
|
||||
|
Net actuarial loss
|
|
3,481
|
|
|
3,173
|
|
|
557
|
|
|
621
|
|
||||
|
Net amount not recognized
|
|
$
|
3,456
|
|
|
$
|
3,140
|
|
|
$
|
558
|
|
|
$
|
620
|
|
|
Accumulated benefit obligation
|
|
$
|
(12,300
|
)
|
|
$
|
(11,607
|
)
|
|
$
|
(2,084
|
)
|
|
$
|
(2,159
|
)
|
|
|
|
2016
|
|
2015
|
||||
|
|
|
|
|
|
||||
|
|
|
(in millions)
|
||||||
|
Projected benefit obligation
|
|
$
|
2,638
|
|
|
$
|
2,403
|
|
|
Fair value of plan assets
|
|
$
|
44
|
|
|
$
|
36
|
|
|
|
|
2016
|
|
2015
|
||||
|
|
|
|
|
|
||||
|
|
|
(in millions)
|
||||||
|
Accumulated benefit obligation
|
|
$
|
2,426
|
|
|
$
|
2,154
|
|
|
Fair value of plan assets
|
|
$
|
4
|
|
|
$
|
5
|
|
|
|
|
Pension Benefits
|
|
Other Postretirement
Benefits
|
||||||||||||||||||||
|
|
|
2016
|
|
2015
|
|
2014
|
|
2016
|
|
2015
|
|
2014
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
|
(in millions)
|
||||||||||||||||||||||
|
Service cost
|
|
$
|
253
|
|
|
$
|
244
|
|
|
$
|
234
|
|
|
$
|
19
|
|
|
$
|
20
|
|
|
$
|
17
|
|
|
Interest cost
|
|
498
|
|
|
469
|
|
|
481
|
|
|
91
|
|
|
86
|
|
|
96
|
|
||||||
|
Expected return on plan assets
|
|
(754
|
)
|
|
(775
|
)
|
|
(712
|
)
|
|
(105
|
)
|
|
(115
|
)
|
|
(116
|
)
|
||||||
|
Amortization of transition obligation
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
||||||
|
Amortization of prior service cost
|
|
(6
|
)
|
|
(8
|
)
|
|
(10
|
)
|
|
(2
|
)
|
|
(5
|
)
|
|
(10
|
)
|
||||||
|
Amortization of actuarial (gain) loss, net
|
|
181
|
|
|
168
|
|
|
86
|
|
|
41
|
|
|
38
|
|
|
25
|
|
||||||
|
Settlements
|
|
7
|
|
|
5
|
|
|
10
|
|
|
0
|
|
|
0
|
|
|
0
|
|
||||||
|
Special termination benefits(1)
|
|
2
|
|
|
4
|
|
|
4
|
|
|
0
|
|
|
0
|
|
|
0
|
|
||||||
|
Net periodic (benefit) cost
|
|
$
|
181
|
|
|
$
|
107
|
|
|
$
|
93
|
|
|
$
|
44
|
|
|
$
|
24
|
|
|
$
|
12
|
|
|
(1)
|
Certain employees were provided special termination benefits under non-qualified plans in the form of unreduced early retirement benefits as a result of their involuntary termination.
|
|
|
|
Pension Benefits
|
|
Other Postretirement
Benefits
|
||||||||||||||||||||
|
|
|
Transition
Obligation
|
|
Prior
Service
Cost
|
|
Net
Actuarial
(Gain) Loss
|
|
Transition
Obligation
|
|
Prior
Service
Cost
|
|
Net
Actuarial
(Gain) Loss
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
|
(in millions)
|
||||||||||||||||||||||
|
Balance, December 31, 2013
|
|
$
|
0
|
|
|
$
|
(56
|
)
|
|
$
|
2,065
|
|
|
$
|
0
|
|
|
$
|
(19
|
)
|
|
$
|
463
|
|
|
Amortization for the period
|
|
0
|
|
|
10
|
|
|
(86
|
)
|
|
0
|
|
|
10
|
|
|
(25
|
)
|
||||||
|
Deferrals for the period
|
|
0
|
|
|
(1
|
)
|
|
1,001
|
|
|
0
|
|
|
0
|
|
|
165
|
|
||||||
|
Impact of foreign currency changes and other
|
|
0
|
|
|
5
|
|
|
(34
|
)
|
|
0
|
|
|
1
|
|
|
(3
|
)
|
||||||
|
Balance, December 31, 2014
|
|
0
|
|
|
(42
|
)
|
|
2,946
|
|
|
0
|
|
|
(8
|
)
|
|
600
|
|
||||||
|
Amortization for the period
|
|
0
|
|
|
8
|
|
|
(168
|
)
|
|
0
|
|
|
5
|
|
|
(38
|
)
|
||||||
|
Deferrals for the period
|
|
0
|
|
|
0
|
|
|
405
|
|
|
0
|
|
|
2
|
|
|
63
|
|
||||||
|
Impact of foreign currency changes and other
|
|
0
|
|
|
1
|
|
|
(10
|
)
|
|
0
|
|
|
0
|
|
|
(4
|
)
|
||||||
|
Balance, December 31, 2015
|
|
0
|
|
|
(33
|
)
|
|
3,173
|
|
|
0
|
|
|
(1
|
)
|
|
621
|
|
||||||
|
Amortization for the period
|
|
0
|
|
|
6
|
|
|
(181
|
)
|
|
0
|
|
|
2
|
|
|
(41
|
)
|
||||||
|
Deferrals for the period
|
|
0
|
|
|
3
|
|
|
473
|
|
|
0
|
|
|
0
|
|
|
(23
|
)
|
||||||
|
Impact of foreign currency changes and other
|
|
0
|
|
|
(1
|
)
|
|
16
|
|
|
0
|
|
|
0
|
|
|
0
|
|
||||||
|
Balance, December 31, 2016
|
|
$
|
0
|
|
|
$
|
(25
|
)
|
|
$
|
3,481
|
|
|
$
|
0
|
|
|
$
|
1
|
|
|
$
|
557
|
|
|
|
|
Pension
Benefits
|
|
Other
Postretirement
Benefits
|
||||
|
|
|
|
|
|
||||
|
|
|
(in millions)
|
||||||
|
Amortization of prior service cost
|
|
$
|
(4
|
)
|
|
$
|
0
|
|
|
Amortization of actuarial (gain) loss, net
|
|
191
|
|
|
36
|
|
||
|
Total
|
|
$
|
187
|
|
|
$
|
36
|
|
|
|
|
Pension Benefits
|
|
Other Postretirement Benefits
|
||||||||||||||
|
|
|
2016
|
|
2015
|
|
2014
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
Weighted average assumptions
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Discount rate (beginning of period)
|
|
4.50
|
%
|
|
4.10
|
%
|
|
4.95
|
%
|
|
4.35
|
%
|
|
3.95
|
%
|
|
4.75
|
%
|
|
Discount rate (end of period)
|
|
4.15
|
%
|
|
4.50
|
%
|
|
4.10
|
%
|
|
4.05
|
%
|
|
4.35
|
%
|
|
3.95
|
%
|
|
Rate of increase in compensation levels (beginning of period)
|
|
4.50
|
%
|
|
4.50
|
%
|
|
4.50
|
%
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
Rate of increase in compensation levels (end of period)
|
|
4.50
|
%
|
|
4.50
|
%
|
|
4.50
|
%
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
Expected return on plan assets (beginning of period)
|
|
6.25
|
%
|
|
6.25
|
%
|
|
6.25
|
%
|
|
7.00
|
%
|
|
7.00
|
%
|
|
7.00
|
%
|
|
Health care cost trend rates (beginning of period)
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
7.00
|
%
|
|
6.66
|
%
|
|
7.08
|
%
|
|
Health care cost trend rates (end of period)
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
6.60
|
%
|
|
7.00
|
%
|
|
6.66
|
%
|
|
For 2016, 2015 and 2014, the ultimate health care cost trend rate after gradual decrease until: 2019, 2019, 2019, (beginning of period)
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
5.00
|
%
|
|
5.00
|
%
|
|
5.00
|
%
|
|
For 2016, 2015 and 2014, the ultimate health care cost trend rate after gradual decrease until: 2021, 2021, 2019 (end of period)
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
5.00
|
%
|
|
5.00
|
%
|
|
5.00
|
%
|
|
|
|
Other Postretirement
Benefits
|
||
|
|
|
(in millions)
|
||
|
One percentage point increase
|
|
|
||
|
Increase in total service and interest costs
|
|
$
|
7
|
|
|
Increase in postretirement benefit obligation
|
|
158
|
|
|
|
|
|
|
||
|
One percentage point decrease
|
|
|
||
|
Decrease in total service and interest costs
|
|
$
|
6
|
|
|
Decrease in postretirement benefit obligation
|
|
106
|
|
|
|
|
|
Pension
|
|
Postretirement
|
||||||||
|
|
|
Minimum
|
|
Maximum
|
|
Minimum
|
|
Maximum
|
||||
|
Asset Category
|
|
|
|
|
|
|
|
|
||||
|
U.S. Equities
|
|
2
|
%
|
|
16
|
%
|
|
27
|
%
|
|
60
|
%
|
|
International Equities
|
|
2
|
%
|
|
16
|
%
|
|
2
|
%
|
|
23
|
%
|
|
Fixed Maturities
|
|
50
|
%
|
|
68
|
%
|
|
4
|
%
|
|
50
|
%
|
|
Short-term Investments
|
|
0
|
%
|
|
15
|
%
|
|
0
|
%
|
|
42
|
%
|
|
Real Estate
|
|
2
|
%
|
|
16
|
%
|
|
0
|
%
|
|
0
|
%
|
|
Other
|
|
0
|
%
|
|
16
|
%
|
|
0
|
%
|
|
0
|
%
|
|
|
|
As of December 31, 2016
|
||||||||||||||||||
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
NAV Practical Expedient
|
|
Total
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
(in millions)
|
||||||||||||||||||
|
U.S. Equities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Pooled separate accounts(1)
|
|
$
|
0
|
|
|
$
|
472
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
472
|
|
|
Common/collective trusts(1)
|
|
0
|
|
|
66
|
|
|
0
|
|
|
0
|
|
|
66
|
|
|||||
|
Subtotal
|
|
|
|
|
|
|
|
|
|
538
|
|
|||||||||
|
International Equities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Pooled separate accounts(2)
|
|
0
|
|
|
269
|
|
|
0
|
|
|
0
|
|
|
269
|
|
|||||
|
Common/collective trusts(3)
|
|
0
|
|
|
219
|
|
|
0
|
|
|
0
|
|
|
219
|
|
|||||
|
United Kingdom insurance pooled funds(4)
|
|
0
|
|
|
49
|
|
|
0
|
|
|
0
|
|
|
49
|
|
|||||
|
Subtotal
|
|
|
|
|
|
|
|
|
|
537
|
|
|||||||||
|
Fixed Maturities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Pooled separate accounts(5)
|
|
0
|
|
|
1,247
|
|
|
36
|
|
|
0
|
|
|
1,283
|
|
|||||
|
Common/collective trusts(6)
|
|
0
|
|
|
441
|
|
|
0
|
|
|
0
|
|
|
441
|
|
|||||
|
U.S. government securities (federal):
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Mortgage-backed
|
|
0
|
|
|
1
|
|
|
0
|
|
|
0
|
|
|
1
|
|
|||||
|
Other U.S. government securities
|
|
0
|
|
|
993
|
|
|
0
|
|
|
0
|
|
|
993
|
|
|||||
|
U.S. government securities (state & other)
|
|
0
|
|
|
521
|
|
|
0
|
|
|
0
|
|
|
521
|
|
|||||
|
Non-U.S. government securities
|
|
0
|
|
|
14
|
|
|
0
|
|
|
0
|
|
|
14
|
|
|||||
|
United Kingdom insurance pooled funds(7)
|
|
0
|
|
|
305
|
|
|
0
|
|
|
0
|
|
|
305
|
|
|||||
|
Corporate Debt:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Corporate bonds(8)
|
|
0
|
|
|
4,039
|
|
|
0
|
|
|
0
|
|
|
4,039
|
|
|||||
|
Asset-backed
|
|
0
|
|
|
7
|
|
|
0
|
|
|
0
|
|
|
7
|
|
|||||
|
Collateralized Mortgage Obligations(9)
|
|
0
|
|
|
506
|
|
|
0
|
|
|
0
|
|
|
506
|
|
|||||
|
Interest rate swaps (Notional amount: $2,595)
|
|
0
|
|
|
9
|
|
|
0
|
|
|
0
|
|
|
9
|
|
|||||
|
Guaranteed investment contract
|
|
0
|
|
|
39
|
|
|
0
|
|
|
0
|
|
|
39
|
|
|||||
|
Other(10)
|
|
533
|
|
|
7
|
|
|
49
|
|
|
0
|
|
|
589
|
|
|||||
|
Unrealized gain (loss) on investment of securities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
lending collateral(11)
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|||||
|
Subtotal
|
|
|
|
|
|
|
|
|
|
8,747
|
|
|||||||||
|
Short-term Investments:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Pooled separate accounts
|
|
0
|
|
|
55
|
|
|
0
|
|
|
0
|
|
|
55
|
|
|||||
|
United Kingdom insurance pooled funds
|
|
0
|
|
|
1
|
|
|
0
|
|
|
0
|
|
|
1
|
|
|||||
|
Subtotal
|
|
|
|
|
|
|
|
|
|
56
|
|
|||||||||
|
Real Estate:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Pooled separate accounts(12)
|
|
0
|
|
|
0
|
|
|
666
|
|
|
0
|
|
|
666
|
|
|||||
|
Partnerships
|
|
0
|
|
|
0
|
|
|
0
|
|
|
371
|
|
|
371
|
|
|||||
|
Subtotal
|
|
|
|
|
|
|
|
|
|
1,037
|
|
|||||||||
|
Other:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Partnerships
|
|
0
|
|
|
0
|
|
|
0
|
|
|
551
|
|
|
551
|
|
|||||
|
Hedge funds
|
|
0
|
|
|
0
|
|
|
0
|
|
|
1,395
|
|
|
1,395
|
|
|||||
|
Subtotal
|
|
|
|
|
|
|
|
|
|
1,946
|
|
|||||||||
|
Total
|
|
$
|
533
|
|
|
$
|
9,260
|
|
|
$
|
751
|
|
|
$
|
2,317
|
|
|
$
|
12,861
|
|
|
|
|
As of December 31, 2015
|
||||||||||||||||||
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
NAV Practical Expedient
|
|
Total
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
(in millions)
|
||||||||||||||||||
|
U.S. Equities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Pooled separate accounts(1)
|
|
$
|
0
|
|
|
$
|
636
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
636
|
|
|
Common/collective trusts(1)
|
|
0
|
|
|
85
|
|
|
0
|
|
|
0
|
|
|
85
|
|
|||||
|
Subtotal
|
|
|
|
|
|
|
|
|
|
721
|
|
|||||||||
|
International Equities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Pooled separate accounts(2)
|
|
0
|
|
|
321
|
|
|
0
|
|
|
0
|
|
|
321
|
|
|||||
|
Common/collective trusts(3)
|
|
0
|
|
|
229
|
|
|
0
|
|
|
0
|
|
|
229
|
|
|||||
|
United Kingdom insurance pooled funds(4)
|
|
0
|
|
|
50
|
|
|
0
|
|
|
0
|
|
|
50
|
|
|||||
|
Subtotal
|
|
|
|
|
|
|
|
|
|
600
|
|
|||||||||
|
Fixed Maturities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Pooled separate accounts(5)
|
|
0
|
|
|
1,183
|
|
|
35
|
|
|
0
|
|
|
1,218
|
|
|||||
|
Common/collective trusts(6)
|
|
0
|
|
|
347
|
|
|
0
|
|
|
0
|
|
|
347
|
|
|||||
|
U.S. government securities (federal):
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Mortgage-backed
|
|
0
|
|
|
1
|
|
|
0
|
|
|
0
|
|
|
1
|
|
|||||
|
Other U.S. government securities
|
|
0
|
|
|
661
|
|
|
0
|
|
|
0
|
|
|
661
|
|
|||||
|
U.S. government securities (state & other)
|
|
0
|
|
|
582
|
|
|
0
|
|
|
0
|
|
|
582
|
|
|||||
|
Non-U.S. government securities
|
|
0
|
|
|
14
|
|
|
0
|
|
|
0
|
|
|
14
|
|
|||||
|
United Kingdom insurance pooled funds(7)
|
|
0
|
|
|
293
|
|
|
0
|
|
|
0
|
|
|
293
|
|
|||||
|
Corporate Debt:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Corporate bonds(8)
|
|
0
|
|
|
4,417
|
|
|
0
|
|
|
0
|
|
|
4,417
|
|
|||||
|
Asset-backed
|
|
0
|
|
|
8
|
|
|
0
|
|
|
0
|
|
|
8
|
|
|||||
|
Collateralized Mortgage Obligations(9)
|
|
0
|
|
|
109
|
|
|
0
|
|
|
0
|
|
|
109
|
|
|||||
|
Interest rate swaps (Notional amount: $2,073)
|
|
0
|
|
|
(5
|
)
|
|
0
|
|
|
0
|
|
|
(5
|
)
|
|||||
|
Guaranteed investment contract
|
|
0
|
|
|
31
|
|
|
0
|
|
|
0
|
|
|
31
|
|
|||||
|
Other(10)
|
|
685
|
|
|
2
|
|
|
93
|
|
|
0
|
|
|
780
|
|
|||||
|
Unrealized gain (loss) on investment of securities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
lending collateral(13)
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|||||
|
Subtotal
|
|
|
|
|
|
|
|
|
|
8,456
|
|
|||||||||
|
Short-term Investments:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Pooled separate accounts
|
|
0
|
|
|
39
|
|
|
0
|
|
|
0
|
|
|
39
|
|
|||||
|
United Kingdom insurance pooled funds
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|||||
|
Subtotal
|
|
|
|
|
|
|
|
|
|
39
|
|
|||||||||
|
Real Estate:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Pooled separate accounts(12)
|
|
0
|
|
|
0
|
|
|
607
|
|
|
0
|
|
|
607
|
|
|||||
|
Partnerships
|
|
0
|
|
|
0
|
|
|
0
|
|
|
347
|
|
|
347
|
|
|||||
|
Subtotal
|
|
|
|
|
|
|
|
|
|
954
|
|
|||||||||
|
Other:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Partnerships
|
|
0
|
|
|
0
|
|
|
0
|
|
|
481
|
|
|
481
|
|
|||||
|
Hedge funds
|
|
0
|
|
|
0
|
|
|
0
|
|
|
1,290
|
|
|
1,290
|
|
|||||
|
Subtotal
|
|
|
|
|
|
|
|
|
|
1,771
|
|
|||||||||
|
Total
|
|
$
|
685
|
|
|
$
|
9,003
|
|
|
$
|
735
|
|
|
$
|
2,118
|
|
|
$
|
12,541
|
|
|
(1)
|
These categories invest in U.S. equity funds whose objective is to track or outperform various indexes.
|
|
(2)
|
This category invests in a large cap international equity funds whose objective is to track an index.
|
|
(3)
|
This category invests in international equity funds, primarily large cap, whose objective is to outperform various indexes. This category also includes a global equity fund, primarily focused on new market leaders with sustainable competitive advantage.
|
|
(4)
|
This category invests in an international equity fund whose objective is to track an index.
|
|
(5)
|
This category invests in bond funds, primarily highly rated private placement securities.
|
|
(6)
|
This category invests in bond funds, primarily highly rated public securities whose objective is to outperform an index.
|
|
(7)
|
This category invests in bond funds, primarily highly rated corporate securities.
|
|
(8)
|
This category invests in highly rated corporate securities.
|
|
(9)
|
This category invests in highly rated Collateralized Mortgage Obligations.
|
|
(10)
|
Primarily cash and cash equivalents, short-term investments, payables and receivables, and open future contract positions (including fixed income collateral).
|
|
(11)
|
The contractual net value of the investment of securities lending collateral invested in primarily short-term bond funds is
$627 million
and the liability for securities lending collateral is
$627 million
.
|
|
(12)
|
This category invests in commercial real estate and real estate securities funds, whose objective is to outperform an index.
|
|
(13)
|
The contractual net value of the investment of securities lending collateral invested in primarily short-term bond funds is
$163 million
and the liability for securities lending collateral is
$163 million
.
|
|
|
|
Year Ended December 31, 2016
|
||||||||||
|
|
|
Fixed
Maturities–
Pooled
Separate
Accounts
|
|
Fixed
Maturities–
Other
|
|
Real Estate–
Pooled
Separate
Accounts
|
||||||
|
|
|
|
|
|
|
|
||||||
|
|
|
(in millions)
|
||||||||||
|
Fair Value, beginning of period
|
|
$
|
35
|
|
|
$
|
93
|
|
|
$
|
607
|
|
|
Actual Return on Assets:
|
|
|
|
|
|
|
||||||
|
Relating to assets still held at the reporting date
|
|
1
|
|
|
0
|
|
|
61
|
|
|||
|
Relating to assets sold during the period
|
|
0
|
|
|
0
|
|
|
6
|
|
|||
|
Purchases, sales and settlements
|
|
0
|
|
|
(44
|
)
|
|
(8
|
)
|
|||
|
Transfers in and/or out of Level 3
|
|
0
|
|
|
0
|
|
|
0
|
|
|||
|
Fair Value, end of period
|
|
$
|
36
|
|
|
$
|
49
|
|
|
$
|
666
|
|
|
|
|
Year Ended December 31, 2015
|
||||||||||||||
|
|
|
Fixed
Maturities–
Pooled
Separate
Accounts
|
|
Fixed
Maturities–
Corporate Debt–
Corporate
Bonds
|
|
Fixed
Maturities–
Other
|
|
Real Estate–
Pooled
Separate
Accounts
|
||||||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
(in millions)
|
||||||||||||||
|
Fair Value, beginning of period
|
|
$
|
35
|
|
|
$
|
14
|
|
|
$
|
73
|
|
|
$
|
465
|
|
|
Actual Return on Assets:
|
|
|
|
|
|
|
|
|
||||||||
|
Relating to assets still held at the reporting date
|
|
0
|
|
|
0
|
|
|
0
|
|
|
81
|
|
||||
|
Relating to assets sold during the period
|
|
0
|
|
|
0
|
|
|
0
|
|
|
2
|
|
||||
|
Purchases, sales and settlements
|
|
0
|
|
|
0
|
|
|
20
|
|
|
59
|
|
||||
|
Transfers in and/or out of Level 3(1)
|
|
0
|
|
|
(14
|
)
|
|
0
|
|
|
0
|
|
||||
|
Fair Value, end of period
|
|
$
|
35
|
|
|
$
|
0
|
|
|
$
|
93
|
|
|
$
|
607
|
|
|
(1)
|
The transfers from level 3 to level 2 are due to the availability of external pricing sources.
|
|
|
|
As of December 31, 2016
|
||||||||||||||||||
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
NAV Practical Expedient
|
|
Total
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
(in millions)
|
||||||||||||||||||
|
U.S. Equities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Variable Life Insurance Policies(1)
|
|
$
|
0
|
|
|
$
|
506
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
506
|
|
|
Common trusts(2)
|
|
0
|
|
|
170
|
|
|
0
|
|
|
0
|
|
|
170
|
|
|||||
|
Subtotal
|
|
|
|
|
|
|
|
|
|
676
|
|
|||||||||
|
International Equities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Variable Life Insurance Policies(3)
|
|
0
|
|
|
90
|
|
|
0
|
|
|
0
|
|
|
90
|
|
|||||
|
Common trusts(4)
|
|
0
|
|
|
96
|
|
|
0
|
|
|
0
|
|
|
96
|
|
|||||
|
Subtotal
|
|
|
|
|
|
|
|
|
|
186
|
|
|||||||||
|
Fixed Maturities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Variable Life Insurance Policies(5)
|
|
0
|
|
|
157
|
|
|
0
|
|
|
0
|
|
|
157
|
|
|||||
|
Common trusts(5)
|
|
0
|
|
|
59
|
|
|
0
|
|
|
0
|
|
|
59
|
|
|||||
|
U.S. government securities (federal):
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Mortgage-Backed
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|||||
|
Other U.S. government securities
|
|
0
|
|
|
78
|
|
|
0
|
|
|
0
|
|
|
78
|
|
|||||
|
Non-U.S. government securities
|
|
0
|
|
|
2
|
|
|
0
|
|
|
0
|
|
|
2
|
|
|||||
|
Corporate Debt:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Corporate bonds(6)
|
|
0
|
|
|
176
|
|
|
0
|
|
|
0
|
|
|
176
|
|
|||||
|
Asset-Backed
|
|
0
|
|
|
48
|
|
|
1
|
|
|
0
|
|
|
49
|
|
|||||
|
Collateralized Mortgage Obligations(7)
|
|
0
|
|
|
22
|
|
|
5
|
|
|
0
|
|
|
27
|
|
|||||
|
Interest rate swaps (Notional amount: $271)
|
|
0
|
|
|
1
|
|
|
0
|
|
|
0
|
|
|
1
|
|
|||||
|
Other(8)
|
|
1
|
|
|
0
|
|
|
5
|
|
|
0
|
|
|
6
|
|
|||||
|
Unrealized gain (loss) on investment of securities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
lending collateral(9)
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|||||
|
Subtotal
|
|
|
|
|
|
|
|
|
|
555
|
|
|||||||||
|
Short-term Investments:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Registered investment companies
|
|
114
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
114
|
|
|||||
|
Subtotal
|
|
|
|
|
|
|
|
|
|
114
|
|
|||||||||
|
Total
|
|
$
|
115
|
|
|
$
|
1,405
|
|
|
$
|
11
|
|
|
$
|
0
|
|
|
$
|
1,531
|
|
|
|
|
As of December 31, 2015
|
||||||||||||||||||
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
NAV Practical Expedient
|
|
Total
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
(in millions)
|
||||||||||||||||||
|
U.S. Equities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Variable Life Insurance Policies(1)
|
|
$
|
0
|
|
|
$
|
592
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
592
|
|
|
Common trusts(2)
|
|
0
|
|
|
169
|
|
|
0
|
|
|
0
|
|
|
169
|
|
|||||
|
Subtotal
|
|
|
|
|
|
|
|
|
|
761
|
|
|||||||||
|
International Equities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Variable Life Insurance Policies(3)
|
|
0
|
|
|
89
|
|
|
0
|
|
|
0
|
|
|
89
|
|
|||||
|
Common trusts(4)
|
|
0
|
|
|
97
|
|
|
0
|
|
|
0
|
|
|
97
|
|
|||||
|
Subtotal
|
|
|
|
|
|
|
|
|
|
186
|
|
|||||||||
|
Fixed Maturities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Variable Life Insurance Policies(5)
|
|
0
|
|
|
59
|
|
|
0
|
|
|
0
|
|
|
59
|
|
|||||
|
Common trusts(5)
|
|
0
|
|
|
67
|
|
|
0
|
|
|
0
|
|
|
67
|
|
|||||
|
U.S. government securities (federal):
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Mortgage-Backed
|
|
0
|
|
|
4
|
|
|
0
|
|
|
0
|
|
|
4
|
|
|||||
|
Other U.S. government securities
|
|
0
|
|
|
80
|
|
|
0
|
|
|
0
|
|
|
80
|
|
|||||
|
Non-U.S. government securities
|
|
0
|
|
|
5
|
|
|
0
|
|
|
0
|
|
|
5
|
|
|||||
|
Corporate Debt:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Corporate bonds(6)
|
|
0
|
|
|
204
|
|
|
0
|
|
|
0
|
|
|
204
|
|
|||||
|
Asset-Backed
|
|
0
|
|
|
53
|
|
|
0
|
|
|
0
|
|
|
53
|
|
|||||
|
Collateralized Mortgage Obligations(7)
|
|
0
|
|
|
30
|
|
|
0
|
|
|
0
|
|
|
30
|
|
|||||
|
Interest rate swaps (Notional amount: $380)
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|||||
|
Other(8)
|
|
6
|
|
|
0
|
|
|
3
|
|
|
0
|
|
|
9
|
|
|||||
|
Unrealized gain (loss) on investment of securities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
lending collateral(10)
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|||||
|
Subtotal
|
|
|
|
|
|
|
|
|
|
511
|
|
|||||||||
|
Short-term Investments:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Registered investment companies
|
|
126
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
126
|
|
|||||
|
Subtotal
|
|
|
|
|
|
|
|
|
|
126
|
|
|||||||||
|
Total
|
|
$
|
132
|
|
|
$
|
1,449
|
|
|
$
|
3
|
|
|
$
|
0
|
|
|
$
|
1,584
|
|
|
(1)
|
This category invests in U.S. equity funds, primarily large cap equities whose objective is to track an index via pooled separate accounts and registered investment companies.
|
|
(2)
|
This category invests in U.S. equity funds, primarily large cap equities.
|
|
(3)
|
This category invests in international equity funds, primarily large cap international equities whose objective is to track an index.
|
|
(4)
|
This category fund invests in large cap international equity fund whose objective is to outperform an index.
|
|
(5)
|
This category invests in U.S. government and corporate bond funds.
|
|
(6)
|
This category invests in highly rated corporate bonds.
|
|
(7)
|
This category invests in highly rated Collateralized Mortgage Obligations.
|
|
(8)
|
Cash and cash equivalents, short-term investments, payables and receivables and open future contract positions (including fixed income collateral).
|
|
(9)
|
In
2016
, the contractual net value of the investment of securities lending collateral and the liability for securities lending collateral is zero.
|
|
(10)
|
In
2015
, the contractual net value of the investment of securities lending collateral invested in primarily short-term bond funds is
$2 million
and the liability for securities lending collateral is
$2 million
.
|
|
|
|
Year Ended December 31, 2016
|
||||||||||
|
|
|
Fixed
Maturities–
Corporate Debt–
Corporate
Bonds
|
|
Fixed
Maturities–
Corporate Debt–
Asset-
Backed
|
|
Fixed
Maturities–
Other
|
||||||
|
|
|
|
|
|
|
|
||||||
|
|
|
(in millions)
|
||||||||||
|
Fair Value, beginning of period
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
3
|
|
|
Actual Return on Assets:
|
|
|
|
|
|
|
||||||
|
Relating to assets still held at the reporting date
|
|
0
|
|
|
0
|
|
|
0
|
|
|||
|
Relating to assets sold during the period
|
|
0
|
|
|
0
|
|
|
0
|
|
|||
|
Purchases, sales and settlements
|
|
1
|
|
|
5
|
|
|
2
|
|
|||
|
Transfers in and/or out of Level 3
|
|
0
|
|
|
0
|
|
|
0
|
|
|||
|
Fair Value, end of period
|
|
$
|
1
|
|
|
$
|
5
|
|
|
$
|
5
|
|
|
|
|
Year Ended December 31, 2015
|
||||||||||
|
|
|
Fixed
Maturities–
Corporate Debt–
Corporate
Bonds
|
|
Fixed
Maturities–
Corporate Debt–
Asset-
Backed
|
|
Fixed
Maturities–
Other
|
||||||
|
|
|
|
|
|
|
|
||||||
|
|
|
(in millions)
|
||||||||||
|
Fair Value, beginning of period
|
|
$
|
1
|
|
|
$
|
1
|
|
|
$
|
(5
|
)
|
|
Actual Return on Assets:
|
|
|
|
|
|
|
||||||
|
Relating to assets still held at the reporting date
|
|
0
|
|
|
0
|
|
|
0
|
|
|||
|
Relating to assets sold during the period
|
|
0
|
|
|
0
|
|
|
0
|
|
|||
|
Purchases, sales and settlements
|
|
0
|
|
|
0
|
|
|
8
|
|
|||
|
Transfers in and/or out of Level 3(1)
|
|
(1
|
)
|
|
(1
|
)
|
|
0
|
|
|||
|
Fair Value, end of period
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
3
|
|
|
(1)
|
The transfers from level 3 to level 2 are due to the availability of external pricing sources.
|
|
|
|
Pension Percentage of Plan Assets
|
|
Postretirement Percentage of Plan Assets
|
||||||||
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||
|
Asset Category
|
|
|
|
|
|
|
|
|
||||
|
U.S. Equities
|
|
4
|
%
|
|
6
|
%
|
|
44
|
%
|
|
48
|
%
|
|
International Equities
|
|
4
|
|
|
5
|
|
|
12
|
|
|
12
|
|
|
Fixed Maturities
|
|
68
|
|
|
67
|
|
|
36
|
|
|
32
|
|
|
Short-term Investments
|
|
0
|
|
|
0
|
|
|
8
|
|
|
8
|
|
|
Real Estate
|
|
8
|
|
|
8
|
|
|
0
|
|
|
0
|
|
|
Other
|
|
16
|
|
|
14
|
|
|
0
|
|
|
0
|
|
|
Total
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
|
|
Pension Benefit
Payments
|
|
Other
Postretirement
Benefit Payments
|
|
Other
Postretirement
Benefits–
Medicare Part
D Subsidy
Receipts
|
||||||
|
|
|
|
|
|
|
|
||||||
|
|
|
(in millions)
|
||||||||||
|
2017
|
|
$
|
707
|
|
|
$
|
167
|
|
|
$
|
10
|
|
|
2018
|
|
740
|
|
|
171
|
|
|
11
|
|
|||
|
2019
|
|
762
|
|
|
173
|
|
|
11
|
|
|||
|
2020
|
|
787
|
|
|
173
|
|
|
11
|
|
|||
|
2021
|
|
812
|
|
|
173
|
|
|
12
|
|
|||
|
2022-2026
|
|
4,384
|
|
|
835
|
|
|
63
|
|
|||
|
Total
|
|
$
|
8,192
|
|
|
$
|
1,692
|
|
|
$
|
118
|
|
|
19.
|
INCOME TAXES
|
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
|
|
|
|
|
|
|
||||||
|
|
|
(in millions)
|
||||||||||
|
Current tax expense (benefit)
|
|
|
|
|
|
|
||||||
|
U.S.
|
|
$
|
31
|
|
|
$
|
738
|
|
|
$
|
(80
|
)
|
|
State and local
|
|
9
|
|
|
3
|
|
|
(7
|
)
|
|||
|
Foreign
|
|
595
|
|
|
622
|
|
|
463
|
|
|||
|
Total
|
|
635
|
|
|
1,363
|
|
|
376
|
|
|||
|
Deferred tax expense (benefit)
|
|
|
|
|
|
|
||||||
|
U.S.
|
|
132
|
|
|
585
|
|
|
880
|
|
|||
|
State and local
|
|
5
|
|
|
4
|
|
|
12
|
|
|||
|
Foreign
|
|
563
|
|
|
120
|
|
|
(919
|
)
|
|||
|
Total
|
|
700
|
|
|
709
|
|
|
(27
|
)
|
|||
|
Total income tax expense (benefit) on continuing operations before equity in earnings of operating joint ventures
|
|
1,335
|
|
|
2,072
|
|
|
349
|
|
|||
|
Income tax expense on equity in earnings of operating joint ventures
|
|
11
|
|
|
(1
|
)
|
|
(2
|
)
|
|||
|
Income tax expense on discontinued operations
|
|
0
|
|
|
0
|
|
|
6
|
|
|||
|
Income tax expense (benefit) reported in equity related to:
|
|
|
|
|
|
|
||||||
|
Other comprehensive income
|
|
1,305
|
|
|
(2,213
|
)
|
|
4,249
|
|
|||
|
Stock-based compensation programs
|
|
(30
|
)
|
|
(22
|
)
|
|
(29
|
)
|
|||
|
Total income taxes
|
|
$
|
2,621
|
|
|
$
|
(164
|
)
|
|
$
|
4,573
|
|
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
|
|
|
|
|
|
|
||||||
|
|
|
(in millions)
|
||||||||||
|
Expected federal income tax expense (benefit)
|
|
$
|
1,997
|
|
|
$
|
2,719
|
|
|
$
|
616
|
|
|
Non-taxable investment income
|
|
(352
|
)
|
|
(341
|
)
|
|
(381
|
)
|
|||
|
Foreign taxes at other than U.S. rate
|
|
(172
|
)
|
|
(51
|
)
|
|
146
|
|
|||
|
Low-income housing and other tax credits
|
|
(118
|
)
|
|
(116
|
)
|
|
(127
|
)
|
|||
|
Reversal of acquisition opening balance sheet deferred tax items
|
|
0
|
|
|
0
|
|
|
53
|
|
|||
|
Change in repatriation assertion
|
|
0
|
|
|
(3
|
)
|
|
32
|
|
|||
|
Change in tax law: active financing exception
|
|
0
|
|
|
(108
|
)
|
|
0
|
|
|||
|
Other
|
|
(20
|
)
|
|
(28
|
)
|
|
10
|
|
|||
|
Total income tax expense (benefit) on continuing operations before equity in earnings of operating joint ventures
|
|
$
|
1,335
|
|
|
$
|
2,072
|
|
|
$
|
349
|
|
|
|
|
2016
|
|
2015
|
||||
|
|
|
|
|
|
||||
|
|
|
(in millions)
|
||||||
|
Deferred tax assets
|
|
|
|
|
||||
|
Insurance reserves
|
|
$
|
1,856
|
|
|
$
|
2,878
|
|
|
Policyholders’ dividends
|
|
1,849
|
|
|
1,815
|
|
||
|
Net operating and capital loss carryforwards
|
|
190
|
|
|
181
|
|
||
|
Employee benefits
|
|
789
|
|
|
628
|
|
||
|
Investments
|
|
1,166
|
|
|
530
|
|
||
|
Other
|
|
0
|
|
|
0
|
|
||
|
Deferred tax assets before valuation allowance
|
|
5,850
|
|
|
6,032
|
|
||
|
Valuation allowance
|
|
(163
|
)
|
|
(133
|
)
|
||
|
Deferred tax assets after valuation allowance
|
|
5,687
|
|
|
5,899
|
|
||
|
Deferred tax liabilities
|
|
|
|
|
||||
|
Net unrealized investment gains
|
|
10,551
|
|
|
9,167
|
|
||
|
Deferred policy acquisition costs
|
|
4,443
|
|
|
4,179
|
|
||
|
Investments
|
|
0
|
|
|
0
|
|
||
|
Unremitted foreign earnings
|
|
380
|
|
|
290
|
|
||
|
Value of business acquired
|
|
715
|
|
|
903
|
|
||
|
Other
|
|
393
|
|
|
291
|
|
||
|
Deferred tax liabilities
|
|
16,482
|
|
|
14,830
|
|
||
|
Net deferred tax liability
|
|
$
|
(10,795
|
)
|
|
$
|
(8,931
|
)
|
|
|
|
2016
|
|
2015
|
||||
|
|
|
|
|
|
||||
|
|
|
(in millions)
|
||||||
|
Valuation allowance related to state and local deferred tax assets
|
|
$
|
138
|
|
|
$
|
98
|
|
|
Valuation allowance related to foreign operations deferred tax assets
|
|
$
|
25
|
|
|
$
|
35
|
|
|
|
|
2016
|
|
2015
|
||||
|
|
|
|
|
|
||||
|
|
|
(in millions)
|
||||||
|
Federal net operating and capital loss carryforwards
|
|
$
|
0
|
|
|
$
|
0
|
|
|
State net operating and capital loss carryforwards(1)
|
|
$
|
4,201
|
|
|
$
|
3,687
|
|
|
Foreign operating loss carryforwards(2)
|
|
$
|
45
|
|
|
$
|
65
|
|
|
General business credits
|
|
$
|
0
|
|
|
$
|
0
|
|
|
Alternative minimum tax credits(3)
|
|
$
|
66
|
|
|
$
|
85
|
|
|
(1)
|
Expires between 2017 and 2036.
|
|
(2)
|
$21 million
expires between 2017 and 2025 and
$24 million
has an unlimited carryforward.
|
|
(3)
|
Alternative minimum tax credits do not expire.
|
|
Foreign Operation
|
|
Unremitted earnings for which the Company provides U.S. income taxes
|
|
Japanese insurance operations
|
|
- Pre-2014 U.S. GAAP earnings
|
|
|
|
- Post-2013 realized and unrealized capital gains
|
|
|
|
- An additional amount from Gibraltar Life and Prudential Gibraltar, not to exceed the deferred tax asset recorded in the Statements of Financial Position as of the acquisition date for Prudential Gibraltar and the Star and Edison Businesses
|
|
Korean insurance operations
|
|
Portion of post-2011 U.S. GAAP earnings
|
|
Certain operations in Germany, Taiwan, Brazil, and non-insurance operations in Japan
|
|
U.S. GAAP earnings
|
|
|
|
At December 31,
|
||||||||||
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
|
|
|
|
|
|
|
||||||
|
|
|
(in millions)
|
||||||||||
|
Undistributed earnings of foreign subsidiaries (assuming indefinite reinvestment)
|
|
$
|
4,231
|
|
|
$
|
3,215
|
|
|
$
|
2,396
|
|
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
|
|
|
|
|
|
|
||||||
|
|
|
(in millions)
|
||||||||||
|
Balance at January 1,
|
|
$
|
6
|
|
|
$
|
6
|
|
|
$
|
11
|
|
|
Increases in unrecognized tax benefits—prior years
|
|
10
|
|
|
0
|
|
|
0
|
|
|||
|
(Decreases) in unrecognized tax benefits—prior years
|
|
0
|
|
|
0
|
|
|
0
|
|
|||
|
Increases in unrecognized tax benefits—current year
|
|
10
|
|
|
0
|
|
|
0
|
|
|||
|
(Decreases) in unrecognized tax benefits—current year
|
|
0
|
|
|
0
|
|
|
0
|
|
|||
|
Settlements with taxing authorities
|
|
0
|
|
|
0
|
|
|
(5
|
)
|
|||
|
Balance at December 31,
|
|
$
|
26
|
|
|
$
|
6
|
|
|
$
|
6
|
|
|
Unrecognized tax benefits that, if recognized, would favorably impact the effective rate
|
|
$
|
26
|
|
|
$
|
6
|
|
|
$
|
6
|
|
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
|
|
|
|
|
|
|
||||||
|
|
|
(in millions)
|
||||||||||
|
Interest and penalties recognized in the consolidated statements of operations
|
|
$
|
1
|
|
|
$
|
0
|
|
|
$
|
2
|
|
|
|
|
2016
|
|
2015
|
||||
|
|
|
|
|
|
||||
|
|
|
(in millions)
|
||||||
|
Interest and penalties recognized in liabilities in the consolidated statements of financial position
|
|
$
|
5
|
|
|
$
|
4
|
|
|
Major Tax Jurisdiction
|
|
Open Tax Years
|
|
United States
|
|
2009-2015
|
|
Japan
|
|
Fiscal years ended March 31, 2012-2016
|
|
Korea
|
|
Fiscal years ended March 31, 2012 and 2013, the periods ended December 31, 2013-2016
|
|
20.
|
FAIR VALUE OF ASSETS AND LIABILITIES
|
|
|
As of December 31, 2016
|
||||||||||||||||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Netting(1)
|
|
Total
|
||||||||||
|
|
(in millions)
|
||||||||||||||||||
|
Fixed maturities, available-for-sale:
|
|
|
|
|
|
|
|
|
|
||||||||||
|
U.S. Treasury securities and obligations of U.S. government authorities and agencies
|
$
|
0
|
|
|
$
|
23,784
|
|
|
$
|
0
|
|
|
$
|
|
$
|
23,784
|
|
||
|
Obligations of U.S. states and their political subdivisions
|
0
|
|
|
9,687
|
|
|
5
|
|
|
|
|
9,692
|
|
||||||
|
Foreign government bonds
|
0
|
|
|
96,132
|
|
|
124
|
|
|
|
|
96,256
|
|
||||||
|
U.S. corporate public securities
|
0
|
|
|
81,350
|
|
|
261
|
|
|
|
|
81,611
|
|
||||||
|
U.S. corporate private securities(7)
|
0
|
|
|
30,434
|
|
|
1,354
|
|
|
|
|
31,788
|
|
||||||
|
Foreign corporate public securities
|
0
|
|
|
28,166
|
|
|
71
|
|
|
|
|
28,237
|
|
||||||
|
Foreign corporate private securities
|
0
|
|
|
20,393
|
|
|
487
|
|
|
|
|
20,880
|
|
||||||
|
Asset-backed securities(8)
|
0
|
|
|
7,591
|
|
|
4,344
|
|
|
|
|
11,935
|
|
||||||
|
Commercial mortgage-backed securities
|
0
|
|
|
12,690
|
|
|
14
|
|
|
|
|
12,704
|
|
||||||
|
Residential mortgage-backed securities
|
0
|
|
|
4,335
|
|
|
197
|
|
|
|
|
4,532
|
|
||||||
|
Subtotal
|
0
|
|
|
314,562
|
|
|
6,857
|
|
|
|
|
321,419
|
|
||||||
|
Trading account assets:(2)
|
|
|
|
|
|
|
|
|
|
||||||||||
|
U.S. Treasury securities and obligations of U.S. government authorities and agencies
|
0
|
|
|
301
|
|
|
0
|
|
|
|
|
301
|
|
||||||
|
Obligations of U.S. states and their political subdivisions
|
0
|
|
|
194
|
|
|
0
|
|
|
|
|
194
|
|
||||||
|
Foreign government bonds
|
0
|
|
|
714
|
|
|
227
|
|
|
|
|
941
|
|
||||||
|
Corporate securities
|
0
|
|
|
16,992
|
|
|
188
|
|
|
|
|
17,180
|
|
||||||
|
Asset-backed securities(8)
|
0
|
|
|
1,086
|
|
|
329
|
|
|
|
|
1,415
|
|
||||||
|
Commercial mortgage-backed securities
|
0
|
|
|
2,061
|
|
|
1
|
|
|
|
|
2,062
|
|
||||||
|
Residential mortgage-backed securities
|
0
|
|
|
1,208
|
|
|
2
|
|
|
|
|
1,210
|
|
||||||
|
Equity securities
|
1,690
|
|
|
214
|
|
|
487
|
|
|
|
|
2,391
|
|
||||||
|
All other(3)
|
208
|
|
|
13,259
|
|
|
1
|
|
|
(11,708
|
)
|
|
1,760
|
|
|||||
|
Subtotal
|
1,898
|
|
|
36,029
|
|
|
1,235
|
|
|
(11,708
|
)
|
|
27,454
|
|
|||||
|
Equity securities, available-for-sale
|
6,033
|
|
|
3,450
|
|
|
265
|
|
|
|
|
9,748
|
|
||||||
|
Commercial mortgage and other loans
|
0
|
|
|
519
|
|
|
0
|
|
|
|
|
519
|
|
||||||
|
Other long-term investments
|
44
|
|
|
106
|
|
|
7
|
|
|
(8
|
)
|
|
149
|
|
|||||
|
Short-term investments
|
5,623
|
|
|
1,558
|
|
|
1
|
|
|
|
|
7,182
|
|
||||||
|
Cash equivalents
|
3,885
|
|
|
4,421
|
|
|
0
|
|
|
|
|
8,306
|
|
||||||
|
Other assets
|
0
|
|
|
0
|
|
|
0
|
|
|
|
|
0
|
|
||||||
|
Subtotal excluding separate account assets
|
17,483
|
|
|
360,645
|
|
|
8,365
|
|
|
(11,716
|
)
|
|
374,777
|
|
|||||
|
Separate account assets(4)
|
38,915
|
|
|
221,253
|
|
|
1,849
|
|
|
|
|
262,017
|
|
||||||
|
Total assets
|
$
|
56,398
|
|
|
$
|
581,898
|
|
|
$
|
10,214
|
|
|
$
|
(11,716
|
)
|
|
$
|
636,794
|
|
|
Future policy benefits(5)
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
8,238
|
|
|
$
|
|
$
|
8,238
|
|
||
|
Other liabilities
|
8
|
|
|
6,284
|
|
|
22
|
|
|
(5,945
|
)
|
|
369
|
|
|||||
|
Notes issued by consolidated VIEs
|
0
|
|
|
0
|
|
|
1,839
|
|
|
|
|
1,839
|
|
||||||
|
Total liabilities
|
$
|
8
|
|
|
$
|
6,284
|
|
|
$
|
10,099
|
|
|
$
|
(5,945
|
)
|
|
$
|
10,446
|
|
|
|
As of December 31, 2015
|
||||||||||||||||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Netting(1)
|
|
Total
|
||||||||||
|
|
(in millions)
|
||||||||||||||||||
|
Fixed maturities, available-for-sale:
|
|
|
|
|
|
|
|
|
|
||||||||||
|
U.S. Treasury securities and obligations of U.S. government authorities and agencies
|
$
|
0
|
|
|
$
|
18,517
|
|
|
$
|
0
|
|
|
$
|
|
$
|
18,517
|
|
||
|
Obligations of U.S. states and their political subdivisions
|
0
|
|
|
8,789
|
|
|
6
|
|
|
|
|
8,795
|
|
||||||
|
Foreign government bonds
|
0
|
|
|
83,590
|
|
|
123
|
|
|
|
|
83,713
|
|
||||||
|
U.S. corporate public securities
|
0
|
|
|
75,163
|
|
|
205
|
|
|
|
|
75,368
|
|
||||||
|
U.S. corporate private securities(7)
|
0
|
|
|
29,750
|
|
|
694
|
|
|
|
|
30,444
|
|
||||||
|
Foreign corporate public securities
|
0
|
|
|
28,510
|
|
|
44
|
|
|
|
|
28,554
|
|
||||||
|
Foreign corporate private securities
|
0
|
|
|
18,859
|
|
|
279
|
|
|
|
|
19,138
|
|
||||||
|
Asset-backed securities(8)
|
0
|
|
|
6,178
|
|
|
4,048
|
|
|
|
|
10,226
|
|
||||||
|
Commercial mortgage-backed securities
|
0
|
|
|
10,424
|
|
|
38
|
|
|
|
|
10,462
|
|
||||||
|
Residential mortgage-backed securities
|
0
|
|
|
4,923
|
|
|
183
|
|
|
|
|
5,106
|
|
||||||
|
Subtotal
|
0
|
|
|
284,703
|
|
|
5,620
|
|
|
|
|
290,323
|
|
||||||
|
Trading account assets:(2)
|
|
|
|
|
|
|
|
|
|
||||||||||
|
U.S. Treasury securities and obligations of U.S. government authorities and agencies
|
0
|
|
|
288
|
|
|
0
|
|
|
|
|
288
|
|
||||||
|
Obligations of U.S. states and their political subdivisions
|
0
|
|
|
189
|
|
|
0
|
|
|
|
|
189
|
|
||||||
|
Foreign government bonds
|
0
|
|
|
697
|
|
|
34
|
|
|
|
|
731
|
|
||||||
|
Corporate securities
|
0
|
|
|
23,125
|
|
|
203
|
|
|
|
|
23,328
|
|
||||||
|
Asset-backed securities(8)
|
0
|
|
|
749
|
|
|
596
|
|
|
|
|
1,345
|
|
||||||
|
Commercial mortgage-backed securities
|
0
|
|
|
1,870
|
|
|
3
|
|
|
|
|
1,873
|
|
||||||
|
Residential mortgage-backed securities
|
0
|
|
|
1,509
|
|
|
4
|
|
|
|
|
1,513
|
|
||||||
|
Equity securities
|
1,542
|
|
|
221
|
|
|
589
|
|
|
|
|
2,352
|
|
||||||
|
All other(3)
|
630
|
|
|
14,173
|
|
|
5
|
|
|
(11,447
|
)
|
|
3,361
|
|
|||||
|
Subtotal
|
2,172
|
|
|
42,821
|
|
|
1,434
|
|
|
(11,447
|
)
|
|
34,980
|
|
|||||
|
Equity securities, available-for-sale
|
6,011
|
|
|
2,997
|
|
|
266
|
|
|
|
|
9,274
|
|
||||||
|
Commercial mortgage and other loans
|
0
|
|
|
274
|
|
|
0
|
|
|
|
|
274
|
|
||||||
|
Other long-term investments(6)
|
13
|
|
|
130
|
|
|
49
|
|
|
(10
|
)
|
|
182
|
|
|||||
|
Short-term investments
|
6,776
|
|
|
711
|
|
|
0
|
|
|
|
|
7,487
|
|
||||||
|
Cash equivalents
|
4,834
|
|
|
9,374
|
|
|
0
|
|
|
|
|
14,208
|
|
||||||
|
Other assets
|
0
|
|
|
9
|
|
|
7
|
|
|
|
|
16
|
|
||||||
|
Subtotal excluding separate account assets
|
19,806
|
|
|
341,019
|
|
|
7,376
|
|
|
(11,457
|
)
|
|
356,744
|
|
|||||
|
Separate account assets(4)(6)
|
43,076
|
|
|
214,838
|
|
|
1,995
|
|
|
|
|
259,909
|
|
||||||
|
Total assets
|
$
|
62,882
|
|
|
$
|
555,857
|
|
|
$
|
9,371
|
|
|
$
|
(11,457
|
)
|
|
$
|
616,653
|
|
|
Future policy benefits(5)
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
8,434
|
|
|
$
|
|
$
|
8,434
|
|
||
|
Other liabilities
|
1
|
|
|
5,306
|
|
|
2
|
|
|
(5,276
|
)
|
|
33
|
|
|||||
|
Notes issued by consolidated VIEs
|
0
|
|
|
0
|
|
|
8,597
|
|
|
|
|
8,597
|
|
||||||
|
Total liabilities
|
$
|
1
|
|
|
$
|
5,306
|
|
|
$
|
17,033
|
|
|
$
|
(5,276
|
)
|
|
$
|
17,064
|
|
|
(1)
|
“Netting” amounts represent cash collateral of
$5,771 million
and
$6,181 million
as of
December 31, 2016
and
2015
, respectively, and the impact of offsetting asset and liability positions held with the same counterparty, subject to master netting arrangements.
|
|
(2)
|
Includes “Trading account assets supporting insurance liabilities” and “Other trading account assets.”
|
|
(3)
|
Level 1 represents cash equivalents and short term investments. All other amounts primarily represent derivative assets.
|
|
(4)
|
Separate account assets represent segregated funds that are invested for certain customers. Investment risks associated with market value changes are borne by the customers, except to the extent of minimum guarantees made by the Company with respect to certain accounts. Separate account liabilities are not included in the above table as they are reported at contract value and not fair value in the Company’s Consolidated Statements of Financial Position.
|
|
(5)
|
As of
December 31, 2016
, the net embedded derivative liability position of
$8.2 billion
includes
$1.2 billion
of embedded derivatives in an asset position and
$9.4 billion
of embedded derivatives in a liability position. As of
December 31, 2015
, the net embedded derivative liability position of
$8.4 billion
includes
$0.7 billion
of embedded derivatives in an asset position and
$9.1 billion
of embedded derivatives in a liability position.
|
|
(6)
|
Prior period amounts are presented on a basis consistent with the current period presentation, reflecting the adoption of ASU 2015-07.
|
|
(7)
|
Excludes notes with fair value of
$1,456 million
and
$1,039 million
as of
December 31, 2016
and
2015
, respectively, which have been offset with the associated payables under a netting agreement.
|
|
(8)
|
Includes credit-tranched securities collateralized by sub-prime mortgages, auto loans, credit cards, education loans and other asset types.
|
|
|
As of December 31, 2016
|
||||||||||
|
|
Internal(1)
|
|
External(2)
|
|
Total
|
||||||
|
|
(in millions)
|
||||||||||
|
Obligations of U.S. states and their political subdivisions
|
$
|
5
|
|
|
$
|
0
|
|
|
$
|
5
|
|
|
Foreign government bonds
|
0
|
|
|
351
|
|
|
351
|
|
|||
|
Corporate securities(3)
|
1,848
|
|
|
513
|
|
|
2,361
|
|
|||
|
Asset-backed securities(4)
|
148
|
|
|
4,525
|
|
|
4,673
|
|
|||
|
Commercial mortgage-backed securities
|
14
|
|
|
1
|
|
|
15
|
|
|||
|
Residential mortgage-backed securities
|
18
|
|
|
181
|
|
|
199
|
|
|||
|
Equity securities
|
143
|
|
|
609
|
|
|
752
|
|
|||
|
Other long-term investments
|
6
|
|
|
1
|
|
|
7
|
|
|||
|
Short-term investments
|
1
|
|
|
0
|
|
|
1
|
|
|||
|
Other assets
|
1
|
|
|
0
|
|
|
1
|
|
|||
|
Subtotal excluding separate account assets
|
2,184
|
|
|
6,181
|
|
|
8,365
|
|
|||
|
Separate account assets
|
1,179
|
|
|
670
|
|
|
1,849
|
|
|||
|
Total assets
|
$
|
3,363
|
|
|
$
|
6,851
|
|
|
$
|
10,214
|
|
|
Future policy benefits
|
$
|
8,238
|
|
|
$
|
0
|
|
|
$
|
8,238
|
|
|
Other liabilities
|
22
|
|
|
0
|
|
|
22
|
|
|||
|
Notes issued by consolidated VIEs
|
0
|
|
|
1,839
|
|
|
1,839
|
|
|||
|
Total liabilities
|
$
|
8,260
|
|
|
$
|
1,839
|
|
|
$
|
10,099
|
|
|
|
As of December 31, 2015
|
||||||||||
|
|
Internal(1)
|
|
External(2)
|
|
Total
|
||||||
|
|
(in millions)
|
||||||||||
|
Obligations of U.S. states and their political subdivisions
|
$
|
6
|
|
|
$
|
0
|
|
|
$
|
6
|
|
|
Foreign government bonds
|
0
|
|
|
157
|
|
|
157
|
|
|||
|
Corporate securities(3)
|
1,085
|
|
|
340
|
|
|
1,425
|
|
|||
|
Asset-backed securities(4)
|
149
|
|
|
4,495
|
|
|
4,644
|
|
|||
|
Commercial mortgage-backed securities
|
5
|
|
|
36
|
|
|
41
|
|
|||
|
Residential mortgage-backed securities
|
37
|
|
|
150
|
|
|
187
|
|
|||
|
Equity securities
|
63
|
|
|
792
|
|
|
855
|
|
|||
|
Other long-term investments(5)
|
39
|
|
|
10
|
|
|
49
|
|
|||
|
Other assets
|
12
|
|
|
0
|
|
|
12
|
|
|||
|
Subtotal excluding separate account assets
|
1,396
|
|
|
5,980
|
|
|
7,376
|
|
|||
|
Separate account assets(5)
|
1,024
|
|
|
971
|
|
|
1,995
|
|
|||
|
Total assets
|
$
|
2,420
|
|
|
$
|
6,951
|
|
|
$
|
9,371
|
|
|
Future policy benefits
|
$
|
8,434
|
|
|
$
|
0
|
|
|
$
|
8,434
|
|
|
Other liabilities
|
2
|
|
|
0
|
|
|
2
|
|
|||
|
Notes issued by consolidated VIEs
|
0
|
|
|
8,597
|
|
|
8,597
|
|
|||
|
Total liabilities
|
$
|
8,436
|
|
|
$
|
8,597
|
|
|
$
|
17,033
|
|
|
(1)
|
Represents valuations reflecting both internally-derived and market inputs, as well as third-party pricing information or quotes. See below for additional information related to internally-developed valuation for significant items in the above table.
|
|
(2)
|
Represents unadjusted prices from independent pricing services and independent indicative broker quotes where pricing inputs are not readily available.
|
|
(3)
|
Includes assets classified as fixed maturities available-for-sale, trading account assets supporting insurance liabilities and other trading account assets.
|
|
(4)
|
Includes credit-tranched securities collateralized by sub-prime mortgages, auto loans, credit cards, education loans and other asset types.
|
|
(5)
|
Prior period amounts are presented on a basis consistent with the current period presentation, reflecting the adoption of ASU 2015-07.
|
|
|
|
As of December 31, 2016
|
||||||||||||||||
|
|
|
Fair Value
|
|
Valuation
Techniques
|
|
Unobservable Inputs
|
|
Minimum
|
|
Maximum
|
|
Weighted
Average
|
|
Impact of
Increase in
Input on
Fair
Value(1)
|
||||
|
|
|
(in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Corporate securities(2)
|
|
$
|
1,848
|
|
|
Discounted cash flow
|
|
Discount rate
|
|
0.70%
|
—
|
|
20%
|
|
7.12
|
%
|
|
Decrease
|
|
|
|
|
|
Market comparables
|
|
EBITDA multiples(3)
|
|
4.0X
|
—
|
|
4.0X
|
|
4.0X
|
|
Increase
|
|||
|
|
|
|
|
Liquidation
|
|
Liquidation value
|
|
15.19%
|
—
|
|
98.68%
|
|
91.72
|
%
|
|
Increase
|
||
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Future policy benefits(4)
|
|
$
|
8,238
|
|
|
Discounted cash flow
|
|
Lapse rate(5)
|
|
0%
|
—
|
|
13%
|
|
|
|
Decrease
|
|
|
|
|
|
|
|
|
NPR spread(6)
|
|
0.25%
|
—
|
|
1.50%
|
|
|
|
Decrease
|
|||
|
|
|
|
|
|
|
Utilization rate(7)
|
|
52%
|
—
|
|
96%
|
|
|
|
Increase
|
|||
|
|
|
|
|
|
|
Withdrawal rate
|
|
See table footnote (8) below.
|
||||||||||
|
|
|
|
|
|
|
Mortality rate(9)
|
|
0%
|
—
|
|
14%
|
|
|
|
Decrease
|
|||
|
|
|
|
|
|
|
Equity volatility curve
|
|
16%
|
—
|
|
25%
|
|
|
|
Increase
|
|||
|
|
|
As of December 31, 2015
|
|||||||||||||||
|
|
|
Fair Value
|
|
Valuation
Techniques
|
|
Unobservable Inputs
|
|
Minimum
|
|
Maximum
|
|
Weighted
Average
|
|
Impact of
Increase in
Input on
Fair
Value(1)
|
|||
|
|
|
(in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Corporate securities(2)
|
|
$
|
1,085
|
|
|
Discounted cash flow
|
|
Discount rate
|
|
0.93%
|
—
|
|
25%
|
|
7.66%
|
|
Decrease
|
|
|
|
|
|
Market comparables
|
|
EBITDA multiples(3)
|
|
1.4X
|
—
|
|
5.0X
|
|
3.7X
|
|
Increase
|
||
|
|
|
|
|
Liquidation
|
|
Liquidation value
|
|
15.79%
|
—
|
|
29.33%
|
|
17.77%
|
|
Increase
|
||
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Future policy benefits(4)
|
|
$
|
8,434
|
|
|
Discounted cash flow
|
|
Lapse rate(5)
|
|
0%
|
—
|
|
14%
|
|
|
|
Decrease
|
|
|
|
|
|
|
|
NPR spread(6)
|
|
0.06%
|
—
|
|
1.76%
|
|
|
|
Decrease
|
||
|
|
|
|
|
|
|
Utilization rate(7)
|
|
56%
|
—
|
|
96%
|
|
|
|
Increase
|
||
|
|
|
|
|
|
|
Withdrawal rate(8)
|
|
74%
|
—
|
|
100%
|
|
|
|
Increase
|
||
|
|
|
|
|
|
|
Mortality rate(9)
|
|
0%
|
—
|
|
14%
|
|
|
|
Decrease
|
||
|
|
|
|
|
|
|
Equity volatility curve
|
|
17%
|
—
|
|
28%
|
|
|
|
Increase
|
||
|
(1)
|
Conversely, the impact of a decrease in input would have the opposite impact for the fair value as that presented in the table.
|
|
(2)
|
Includes assets classified as fixed maturities available-for-sale, trading account assets supporting insurance liabilities and other trading account assets.
|
|
(3)
|
Represents multiples of earnings before interest, taxes, depreciation and amortization (“EBITDA”), and are amounts used when the reporting entity has determined that market participants would use such multiples when pricing the investments.
|
|
(4)
|
Future policy benefits primarily represent general account liabilities for the living benefit features of the Company’s variable annuity contracts which are accounted for as embedded derivatives. Since the valuation methodology for these liabilities uses a range of inputs that vary at the contract level over the cash flow projection period, presenting a range, rather than weighted average, is a more meaningful representation of the unobservable inputs used in the valuation.
|
|
(5)
|
Lapse rates are adjusted at the contract level based on the in-the-moneyness of the living benefit and reflect other factors, such as the applicability of any surrender charges. Lapse rates are reduced when contracts are more in-the-money. Lapse rates are also generally assumed to be lower for the period where surrender charges apply.
|
|
(6)
|
To reflect NPR, the Company incorporates an additional spread over LIBOR into the discount rate used in the valuation of individual living benefit contracts in a liability position and generally not to those in a contra-liability position. The NPR spread reflects the financial strength ratings of the Company, as these are insurance liabilities and senior to debt. The additional spread over LIBOR is determined by utilizing the credit spreads associated with issuing funding agreements, adjusted for any illiquidity risk premium.
|
|
(7)
|
The utilization rate assumption estimates the percentage of contracts that will utilize the benefit during the contract duration, and begin lifetime withdrawals at various time intervals from contract inception. The remaining contractholders are assumed to either begin lifetime withdrawals immediately or never utilize the benefit. Utilization assumptions may vary by product type, tax status, and age. The impact of changes in these assumptions is highly dependent on the product type, the age of the contractholder at the time of the sale, and the timing of the first lifetime income withdrawal. Range reflects the utilization rate for the vast majority of business with living benefits.
|
|
(8)
|
The withdrawal rate assumption estimates the magnitude of annual contractholder withdrawals relative to the maximum allowable amount under the contract. These assumptions vary based on the age of the contractholder, the tax status of the contract and the duration since the contractholder began lifetime withdrawals. As of
December 31, 2016
, the minimum withdrawal rate assumption is
78%
and the maximum withdrawal rate assumption may be greater than
100%
. The fair value of the liability will generally increase the closer the withdrawal rate is to 100% and decrease as the withdrawal rate moves further away from 100%.
|
|
(9)
|
Range reflects the mortality rate for the vast majority of business with living benefits, with policyholders ranging from
35
to
90
years old. While the majority of living benefits have a minimum age requirement, certain benefits do not have an age restriction. This results in contractholders for certain benefits with mortality rates approaching
0%
. Based on historical experience, the Company applies a set of age and duration specific mortality rate adjustments compared to standard industry tables. A mortality improvement assumption is also incorporated into the overall mortality table.
|
|
|
Year Ended December 31, 2016
|
||||||||||||||||||||||
|
|
Fixed Maturities Available-For-Sale
|
||||||||||||||||||||||
|
|
U.S.
States
|
|
Foreign
Government
|
|
U.S. Corporate Public Securities
|
|
U.S. Corporate Private Securities
|
|
Foreign Corporate Public Securities
|
|
Foreign Corporate Private Securities
|
||||||||||||
|
|
(in millions)
|
||||||||||||||||||||||
|
Fair Value, beginning of period
|
$
|
6
|
|
|
$
|
123
|
|
|
$
|
205
|
|
|
$
|
694
|
|
|
$
|
44
|
|
|
$
|
279
|
|
|
Total gains (losses) (realized/unrealized):
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Included in earnings:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Realized investment gains (losses), net
|
0
|
|
|
0
|
|
|
0
|
|
|
(129
|
)
|
|
0
|
|
|
(2
|
)
|
||||||
|
Included in other comprehensive income (loss)
|
0
|
|
|
(3
|
)
|
|
17
|
|
|
64
|
|
|
4
|
|
|
(9
|
)
|
||||||
|
Net investment income
|
0
|
|
|
0
|
|
|
1
|
|
|
9
|
|
|
0
|
|
|
1
|
|
||||||
|
Purchases
|
0
|
|
|
0
|
|
|
24
|
|
|
144
|
|
|
44
|
|
|
106
|
|
||||||
|
Sales
|
0
|
|
|
0
|
|
|
(1
|
)
|
|
(5
|
)
|
|
(1
|
)
|
|
(11
|
)
|
||||||
|
Issuances
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
||||||
|
Settlements
|
(1
|
)
|
|
0
|
|
|
(3
|
)
|
|
(88
|
)
|
|
(4
|
)
|
|
(228
|
)
|
||||||
|
Foreign currency translation
|
0
|
|
|
3
|
|
|
2
|
|
|
1
|
|
|
3
|
|
|
(1
|
)
|
||||||
|
Other(1)
|
0
|
|
|
0
|
|
|
(13
|
)
|
|
0
|
|
|
13
|
|
|
0
|
|
||||||
|
Transfers into Level 3(2)
|
0
|
|
|
1
|
|
|
73
|
|
|
775
|
|
|
88
|
|
|
550
|
|
||||||
|
Transfers out of Level 3(2)
|
0
|
|
|
0
|
|
|
(44
|
)
|
|
(111
|
)
|
|
(120
|
)
|
|
(198
|
)
|
||||||
|
Fair Value, end of period
|
$
|
5
|
|
|
$
|
124
|
|
|
$
|
261
|
|
|
$
|
1,354
|
|
|
$
|
71
|
|
|
$
|
487
|
|
|
Unrealized gains (losses) for assets still held(3):
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Included in earnings:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Realized investment gains (losses), net
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
(109
|
)
|
|
$
|
0
|
|
|
$
|
(1
|
)
|
|
|
Year Ended December 31, 2016
|
||||||||||
|
|
Fixed Maturities Available-For-Sale
|
||||||||||
|
|
Asset-
Backed(7)
|
|
Commercial
Mortgage-
Backed
|
|
Residential
Mortgage-
Backed
|
||||||
|
|
(in millions)
|
||||||||||
|
Fair Value, beginning of period
|
$
|
4,048
|
|
|
$
|
38
|
|
|
$
|
183
|
|
|
Total gains (losses) (realized/unrealized):
|
|
|
|
|
|
||||||
|
Included in earnings:
|
|
|
|
|
|
||||||
|
Realized investment gains (losses), net
|
9
|
|
|
1
|
|
|
0
|
|
|||
|
Included in other comprehensive income (loss)
|
(15
|
)
|
|
(7
|
)
|
|
(1
|
)
|
|||
|
Net investment income
|
13
|
|
|
1
|
|
|
(1
|
)
|
|||
|
Purchases
|
3,342
|
|
|
155
|
|
|
85
|
|
|||
|
Sales
|
(377
|
)
|
|
(34
|
)
|
|
(33
|
)
|
|||
|
Issuances
|
0
|
|
|
0
|
|
|
0
|
|
|||
|
Settlements
|
(643
|
)
|
|
(3
|
)
|
|
(54
|
)
|
|||
|
Foreign currency translation
|
17
|
|
|
0
|
|
|
18
|
|
|||
|
Other(1)
|
159
|
|
|
0
|
|
|
0
|
|
|||
|
Transfers into Level 3(2)
|
1,768
|
|
|
19
|
|
|
0
|
|
|||
|
Transfers out of Level 3(2)
|
(3,977
|
)
|
|
(156
|
)
|
|
0
|
|
|||
|
Fair Value, end of period
|
$
|
4,344
|
|
|
$
|
14
|
|
|
$
|
197
|
|
|
Unrealized gains (losses) for assets still held(3):
|
|
|
|
|
|
||||||
|
Included in earnings:
|
|
|
|
|
|
||||||
|
Realized investment gains (losses), net
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
|
Year Ended December 31, 2016
|
||||||||||||||||||||||||||
|
|
Trading Account Assets
|
||||||||||||||||||||||||||
|
|
Foreign
Government
|
|
Corporate
|
|
Asset-
Backed(7)
|
|
Commercial
Mortgage-
Backed
|
|
Residential
Mortgage-
Backed
|
|
Equity
|
|
All
Other
Activity
|
||||||||||||||
|
|
(in millions)
|
||||||||||||||||||||||||||
|
Fair Value, beginning of period
|
$
|
34
|
|
|
$
|
203
|
|
|
$
|
596
|
|
|
$
|
3
|
|
|
$
|
4
|
|
|
$
|
589
|
|
|
$
|
5
|
|
|
Total gains (losses) (realized/unrealized):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Included in earnings:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Realized investment gains (losses), net
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|||||||
|
Other income
|
(5
|
)
|
|
(9
|
)
|
|
(10
|
)
|
|
(1
|
)
|
|
(1
|
)
|
|
8
|
|
|
1
|
|
|||||||
|
Net investment income
|
1
|
|
|
2
|
|
|
2
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|||||||
|
Purchases
|
201
|
|
|
11
|
|
|
185
|
|
|
0
|
|
|
0
|
|
|
20
|
|
|
0
|
|
|||||||
|
Sales
|
0
|
|
|
(3
|
)
|
|
(49
|
)
|
|
0
|
|
|
0
|
|
|
(65
|
)
|
|
0
|
|
|||||||
|
Issuances
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|||||||
|
Settlements
|
(4
|
)
|
|
(41
|
)
|
|
(120
|
)
|
|
0
|
|
|
(2
|
)
|
|
(108
|
)
|
|
0
|
|
|||||||
|
Foreign currency translation
|
0
|
|
|
0
|
|
|
(2
|
)
|
|
0
|
|
|
0
|
|
|
31
|
|
|
0
|
|
|||||||
|
Other(1)
|
0
|
|
|
(15
|
)
|
|
141
|
|
|
(1
|
)
|
|
1
|
|
|
14
|
|
|
(5
|
)
|
|||||||
|
Transfers into Level 3(2)
|
0
|
|
|
151
|
|
|
252
|
|
|
0
|
|
|
0
|
|
|
28
|
|
|
0
|
|
|||||||
|
Transfers out of Level 3(2)
|
0
|
|
|
(111
|
)
|
|
(666
|
)
|
|
0
|
|
|
0
|
|
|
(30
|
)
|
|
0
|
|
|||||||
|
Fair Value, end of period
|
$
|
227
|
|
|
$
|
188
|
|
|
$
|
329
|
|
|
$
|
1
|
|
|
$
|
2
|
|
|
$
|
487
|
|
|
$
|
1
|
|
|
Unrealized gains (losses) for assets still held(3):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Included in earnings:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Realized investment gains (losses), net
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
Other income
|
$
|
(5
|
)
|
|
$
|
(10
|
)
|
|
$
|
(2
|
)
|
|
$
|
(1
|
)
|
|
$
|
(1
|
)
|
|
$
|
3
|
|
|
$
|
1
|
|
|
|
Year Ended December 31, 2016
|
||||||||||||||
|
|
Equity
Securities
Available-
For-Sale
|
|
Other
Long-term
Investments
|
|
Short-term
Investments
|
|
Other
Assets
|
||||||||
|
|
(in millions)
|
||||||||||||||
|
Fair Value, beginning of period
|
$
|
266
|
|
|
$
|
49
|
|
|
$
|
0
|
|
|
$
|
7
|
|
|
Total gains (losses) (realized/unrealized):
|
|
|
|
|
|
|
|
||||||||
|
Included in earnings:
|
|
|
|
|
|
|
|
||||||||
|
Realized investment gains (losses), net
|
52
|
|
|
(1
|
)
|
|
0
|
|
|
(30
|
)
|
||||
|
Other income
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
||||
|
Included in other comprehensive income (loss)
|
(75
|
)
|
|
0
|
|
|
0
|
|
|
0
|
|
||||
|
Net investment income
|
0
|
|
|
(1
|
)
|
|
0
|
|
|
0
|
|
||||
|
Purchases
|
99
|
|
|
1
|
|
|
1
|
|
|
23
|
|
||||
|
Sales
|
(79
|
)
|
|
0
|
|
|
0
|
|
|
0
|
|
||||
|
Issuances
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
||||
|
Settlements
|
(13
|
)
|
|
0
|
|
|
0
|
|
|
0
|
|
||||
|
Foreign currency translation
|
13
|
|
|
0
|
|
|
0
|
|
|
0
|
|
||||
|
Other(1)
|
0
|
|
|
(33
|
)
|
|
0
|
|
|
0
|
|
||||
|
Transfers into Level 3(2)
|
9
|
|
|
0
|
|
|
0
|
|
|
0
|
|
||||
|
Transfers out of Level 3(2)
|
(7
|
)
|
|
(8
|
)
|
|
0
|
|
|
0
|
|
||||
|
Fair Value, end of period
|
$
|
265
|
|
|
$
|
7
|
|
|
$
|
1
|
|
|
$
|
0
|
|
|
Unrealized gains (losses) for assets still held(3):
|
|
|
|
|
|
|
|
||||||||
|
Included in earnings:
|
|
|
|
|
|
|
|
||||||||
|
Realized investment gains (losses), net
|
$
|
0
|
|
|
$
|
(1
|
)
|
|
$
|
0
|
|
|
$
|
(30
|
)
|
|
Other income
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
|
Year Ended December 31, 2016
|
||||||||||||||
|
|
Separate
Account
Assets(4)
|
|
Future
Policy
Benefits
|
|
Other
Liabilities
|
|
Notes Issued
by Consolidated
VIEs
|
||||||||
|
|
(in millions)
|
||||||||||||||
|
Fair Value, beginning of period
|
$
|
1,995
|
|
|
$
|
(8,434
|
)
|
|
$
|
(2
|
)
|
|
$
|
(8,597
|
)
|
|
Total gains (losses) (realized/unrealized):
|
|
|
|
|
|
|
|
||||||||
|
Included in earnings:
|
|
|
|
|
|
|
|
||||||||
|
Realized investment gains (losses), net
|
1
|
|
|
1,252
|
|
|
(8
|
)
|
|
(23
|
)
|
||||
|
Other income
|
0
|
|
|
0
|
|
|
0
|
|
|
(14
|
)
|
||||
|
Interest credited to policyholders’ account balances
|
22
|
|
|
0
|
|
|
0
|
|
|
0
|
|
||||
|
Net investment income
|
17
|
|
|
0
|
|
|
0
|
|
|
0
|
|
||||
|
Purchases
|
555
|
|
|
0
|
|
|
0
|
|
|
0
|
|
||||
|
Sales
|
(141
|
)
|
|
0
|
|
|
0
|
|
|
0
|
|
||||
|
Issuances
|
0
|
|
|
(1,056
|
)
|
|
0
|
|
|
(2,187
|
)
|
||||
|
Settlements
|
(485
|
)
|
|
0
|
|
|
(6
|
)
|
|
697
|
|
||||
|
Foreign currency translation
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
||||
|
Other(1)
|
0
|
|
|
0
|
|
|
(6
|
)
|
|
8,285
|
|
||||
|
Transfers into Level 3(2)
|
344
|
|
|
0
|
|
|
0
|
|
|
0
|
|
||||
|
Transfers out of Level 3(2)
|
(459
|
)
|
|
0
|
|
|
0
|
|
|
0
|
|
||||
|
Fair Value, end of period
|
$
|
1,849
|
|
|
$
|
(8,238
|
)
|
|
$
|
(22
|
)
|
|
$
|
(1,839
|
)
|
|
Unrealized gains (losses) for assets/liabilities still held(3):
|
|
|
|
|
|
|
|
||||||||
|
Included in earnings:
|
|
|
|
|
|
|
|
||||||||
|
Realized investment gains (losses), net
|
$
|
0
|
|
|
$
|
1,046
|
|
|
$
|
(9
|
)
|
|
$
|
(23
|
)
|
|
Other income
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
(14
|
)
|
|
Interest credited to policyholders’ account balances
|
$
|
3
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
|
Year Ended December 31, 2015
|
||||||||||||||||||||||
|
|
Fixed Maturities Available-For-Sale
|
||||||||||||||||||||||
|
|
U.S.
States
|
|
Foreign
Government
|
|
U.S. Corporate Public Securities
|
|
U.S. Corporate Private Securities
|
|
Foreign Corporate Public Securities
|
|
Foreign Corporate Private Securities
|
||||||||||||
|
|
(in millions)
|
||||||||||||||||||||||
|
Fair Value, beginning of period
|
$
|
6
|
|
|
$
|
2
|
|
|
$
|
357
|
|
|
$
|
523
|
|
|
$
|
252
|
|
|
$
|
171
|
|
|
Total gains (losses) (realized/unrealized):
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Included in earnings:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Realized investment gains (losses), net
|
0
|
|
|
0
|
|
|
0
|
|
|
(14
|
)
|
|
0
|
|
|
(81
|
)
|
||||||
|
Included in other comprehensive income (loss)
|
0
|
|
|
(3
|
)
|
|
1
|
|
|
(27
|
)
|
|
6
|
|
|
27
|
|
||||||
|
Net investment income(6)
|
0
|
|
|
0
|
|
|
1
|
|
|
12
|
|
|
0
|
|
|
4
|
|
||||||
|
Purchases
|
15
|
|
|
20
|
|
|
33
|
|
|
182
|
|
|
33
|
|
|
108
|
|
||||||
|
Sales
|
(1
|
)
|
|
0
|
|
|
(1
|
)
|
|
(43
|
)
|
|
(51
|
)
|
|
0
|
|
||||||
|
Issuances
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
||||||
|
Settlements(6)
|
0
|
|
|
0
|
|
|
(26
|
)
|
|
(110
|
)
|
|
(32
|
)
|
|
(90
|
)
|
||||||
|
Foreign currency translation
|
0
|
|
|
(4
|
)
|
|
(3
|
)
|
|
0
|
|
|
(5
|
)
|
|
0
|
|
||||||
|
Other(1)
|
0
|
|
|
0
|
|
|
0
|
|
|
(3
|
)
|
|
0
|
|
|
0
|
|
||||||
|
Transfers into Level 3(2)
|
0
|
|
|
129
|
|
|
23
|
|
|
209
|
|
|
0
|
|
|
140
|
|
||||||
|
Transfers out of Level 3(2)
|
(14
|
)
|
|
(21
|
)
|
|
(180
|
)
|
|
(35
|
)
|
|
(159
|
)
|
|
0
|
|
||||||
|
Fair Value, end of period
|
$
|
6
|
|
|
$
|
123
|
|
|
$
|
205
|
|
|
$
|
694
|
|
|
$
|
44
|
|
|
$
|
279
|
|
|
Unrealized gains (losses) for assets still held(3):
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Included in earnings:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Realized investment gains (losses), net
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
(19
|
)
|
|
$
|
0
|
|
|
$
|
(68
|
)
|
|
|
Year Ended December 31, 2015
|
||||||||||
|
|
Fixed Maturities Available-For-Sale
|
||||||||||
|
|
Asset-
Backed(7)
|
|
Commercial
Mortgage-
Backed
|
|
Residential
Mortgage-
Backed
|
||||||
|
|
(in millions)
|
||||||||||
|
Fair Value, beginning of period
|
$
|
4,059
|
|
|
$
|
43
|
|
|
$
|
253
|
|
|
Total gains (losses) (realized/unrealized):
|
|
|
|
|
|
||||||
|
Included in earnings:
|
|
|
|
|
|
||||||
|
Realized investment gains (losses), net
|
40
|
|
|
1
|
|
|
0
|
|
|||
|
Included in other comprehensive income (loss)
|
(37
|
)
|
|
(1
|
)
|
|
(2
|
)
|
|||
|
Net investment income
|
21
|
|
|
0
|
|
|
(1
|
)
|
|||
|
Purchases
|
1,234
|
|
|
44
|
|
|
0
|
|
|||
|
Sales
|
(563
|
)
|
|
0
|
|
|
(7
|
)
|
|||
|
Issuances
|
(4
|
)
|
|
0
|
|
|
0
|
|
|||
|
Settlements
|
(308
|
)
|
|
(6
|
)
|
|
(52
|
)
|
|||
|
Foreign currency translation
|
(13
|
)
|
|
0
|
|
|
(8
|
)
|
|||
|
Other(1)
|
3
|
|
|
0
|
|
|
0
|
|
|||
|
Transfers into Level 3(2)
|
2,555
|
|
|
2
|
|
|
0
|
|
|||
|
Transfers out of Level 3(2)
|
(2,939
|
)
|
|
(45
|
)
|
|
0
|
|
|||
|
Fair Value, end of period
|
$
|
4,048
|
|
|
$
|
38
|
|
|
$
|
183
|
|
|
Unrealized gains (losses) for assets still held(3):
|
|
|
|
|
|
||||||
|
Included in earnings:
|
|
|
|
|
|
||||||
|
Realized investment gains (losses), net
|
$
|
4
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
|
Year Ended December 31, 2015
|
||||||||||||||||||||||||||
|
|
Trading Account Assets
|
||||||||||||||||||||||||||
|
|
Foreign
Government |
|
Corporate
|
|
Asset-
Backed(7)
|
|
Commercial
Mortgage-
Backed
|
|
Residential
Mortgage-
Backed
|
|
Equity
|
|
All
Other
Activity
|
||||||||||||||
|
|
(in millions)
|
||||||||||||||||||||||||||
|
Fair Value, beginning of period
|
$
|
21
|
|
|
$
|
124
|
|
|
$
|
393
|
|
|
$
|
5
|
|
|
$
|
7
|
|
|
$
|
663
|
|
|
$
|
7
|
|
|
Total gains (losses) (realized/unrealized):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Included in earnings:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Realized investment gains (losses), net
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|||||||
|
Other income
|
0
|
|
|
(28
|
)
|
|
(7
|
)
|
|
0
|
|
|
0
|
|
|
(15
|
)
|
|
(1
|
)
|
|||||||
|
Net investment income
|
0
|
|
|
1
|
|
|
1
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|||||||
|
Purchases
|
16
|
|
|
124
|
|
|
325
|
|
|
27
|
|
|
0
|
|
|
28
|
|
|
0
|
|
|||||||
|
Sales
|
0
|
|
|
(15
|
)
|
|
(16
|
)
|
|
(3
|
)
|
|
0
|
|
|
(26
|
)
|
|
(1
|
)
|
|||||||
|
Issuances
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|||||||
|
Settlements
|
(3
|
)
|
|
(39
|
)
|
|
(11
|
)
|
|
(2
|
)
|
|
(2
|
)
|
|
(40
|
)
|
|
0
|
|
|||||||
|
Foreign currency translation
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
(13
|
)
|
|
0
|
|
|||||||
|
Other(1)
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
(8
|
)
|
|
0
|
|
|||||||
|
Transfers into Level 3(2)
|
0
|
|
|
77
|
|
|
272
|
|
|
1
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|||||||
|
Transfers out of Level 3(2)
|
0
|
|
|
(41
|
)
|
|
(361
|
)
|
|
(25
|
)
|
|
(1
|
)
|
|
0
|
|
|
0
|
|
|||||||
|
Fair Value, end of period
|
$
|
34
|
|
|
$
|
203
|
|
|
$
|
596
|
|
|
$
|
3
|
|
|
$
|
4
|
|
|
$
|
589
|
|
|
$
|
5
|
|
|
Unrealized gains (losses) for assets still held(3):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Included in earnings:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Realized investment gains (losses), net
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
Other income
|
$
|
0
|
|
|
$
|
9
|
|
|
$
|
(7
|
)
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
6
|
|
|
$
|
(1
|
)
|
|
|
Year Ended December 31, 2015
|
||||||||||
|
|
Equity
Securities
Available-
For-Sale
|
|
Other
Long-term
Investments(5)
|
|
Other
Assets
|
||||||
|
|
(in millions)
|
||||||||||
|
Fair Value, beginning of period
|
$
|
275
|
|
|
$
|
13
|
|
|
$
|
2
|
|
|
Total gains (losses) (realized/unrealized):
|
|
|
|
|
|
||||||
|
Included in earnings:
|
|
|
|
|
|
||||||
|
Realized investment gains (losses), net
|
15
|
|
|
21
|
|
|
0
|
|
|||
|
Other income
|
0
|
|
|
0
|
|
|
0
|
|
|||
|
Included in other comprehensive income (loss)
|
1
|
|
|
0
|
|
|
0
|
|
|||
|
Net investment income
|
0
|
|
|
(1
|
)
|
|
0
|
|
|||
|
Purchases
|
31
|
|
|
19
|
|
|
0
|
|
|||
|
Sales
|
(48
|
)
|
|
(2
|
)
|
|
0
|
|
|||
|
Issuances
|
0
|
|
|
0
|
|
|
5
|
|
|||
|
Settlements
|
(3
|
)
|
|
0
|
|
|
0
|
|
|||
|
Foreign currency translation
|
(7
|
)
|
|
0
|
|
|
0
|
|
|||
|
Other(1)
|
0
|
|
|
0
|
|
|
0
|
|
|||
|
Transfers into Level 3(2)
|
2
|
|
|
0
|
|
|
0
|
|
|||
|
Transfers out of Level 3(2)
|
0
|
|
|
(1
|
)
|
|
0
|
|
|||
|
Fair Value, end of period
|
$
|
266
|
|
|
$
|
49
|
|
|
$
|
7
|
|
|
Unrealized gains (losses) for assets still held(3):
|
|
|
|
|
|
||||||
|
Included in earnings:
|
|
|
|
|
|
||||||
|
Realized investment gains (losses), net
|
$
|
(3
|
)
|
|
$
|
19
|
|
|
$
|
2
|
|
|
Other income
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
|
Year Ended December 31, 2015
|
||||||||||||||
|
|
Separate
Account
Assets(4)(5)
|
|
Future
Policy
Benefits
|
|
Other
Liabilities
|
|
Notes
Issued by
Consolidated
VIEs
|
||||||||
|
|
(in millions)
|
||||||||||||||
|
Fair Value, beginning of period
|
$
|
1,738
|
|
|
$
|
(8,182
|
)
|
|
$
|
(5
|
)
|
|
$
|
(6,033
|
)
|
|
Total gains (losses) (realized/unrealized):
|
|
|
|
|
|
|
|
||||||||
|
Included in earnings:
|
|
|
|
|
|
|
|
||||||||
|
Realized investment gains (losses), net
|
0
|
|
|
717
|
|
|
1
|
|
|
287
|
|
||||
|
Other income
|
0
|
|
|
0
|
|
|
0
|
|
|
146
|
|
||||
|
Interest credited to policyholders’ account balances
|
(38
|
)
|
|
0
|
|
|
0
|
|
|
0
|
|
||||
|
Net investment income
|
24
|
|
|
0
|
|
|
0
|
|
|
0
|
|
||||
|
Purchases
|
1,060
|
|
|
0
|
|
|
0
|
|
|
0
|
|
||||
|
Sales
|
(175
|
)
|
|
0
|
|
|
0
|
|
|
0
|
|
||||
|
Issuances
|
0
|
|
|
(969
|
)
|
|
0
|
|
|
(2,997
|
)
|
||||
|
Settlements
|
(140
|
)
|
|
0
|
|
|
2
|
|
|
0
|
|
||||
|
Foreign currency translation
|
(5
|
)
|
|
0
|
|
|
0
|
|
|
0
|
|
||||
|
Other(1)
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
||||
|
Transfers into Level 3(2)
|
51
|
|
|
0
|
|
|
0
|
|
|
0
|
|
||||
|
Transfers out of Level 3(2)
|
(520
|
)
|
|
0
|
|
|
0
|
|
|
0
|
|
||||
|
Fair Value, end of period
|
$
|
1,995
|
|
|
$
|
(8,434
|
)
|
|
$
|
(2
|
)
|
|
$
|
(8,597
|
)
|
|
Unrealized gains (losses) for assets/liabilities still held(3):
|
|
|
|
|
|
|
|
||||||||
|
Included in earnings:
|
|
|
|
|
|
|
|
||||||||
|
Realized investment gains (losses), net
|
$
|
0
|
|
|
$
|
485
|
|
|
$
|
1
|
|
|
$
|
287
|
|
|
Other income
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
146
|
|
|
Interest credited to policyholders’ account balances
|
$
|
318
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
|
Year Ended December 31, 2014
|
||||||||||||||||||||||
|
|
Fixed Maturities Available-For-Sale
|
||||||||||||||||||||||
|
|
U.S. Corporate Public Securities
|
|
U.S. Corporate Private Securities
|
|
Foreign Corporate Public Securities
|
|
Foreign Corporate Private Securities
|
|
Asset-
Backed(7)
|
|
Commercial
Mortgage-
Backed
|
||||||||||||
|
|
(in millions)
|
||||||||||||||||||||||
|
Total gains (losses) (realized/unrealized):
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Included in earnings:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Realized investment gains (losses), net
|
$
|
0
|
|
|
$
|
9
|
|
|
$
|
(8
|
)
|
|
$
|
19
|
|
|
$
|
17
|
|
|
$
|
4
|
|
|
Included in other comprehensive income (loss)
|
$
|
11
|
|
|
$
|
2
|
|
|
$
|
52
|
|
|
$
|
(20
|
)
|
|
$
|
24
|
|
|
$
|
(1
|
)
|
|
Net investment income
|
$
|
(1
|
)
|
|
$
|
8
|
|
|
$
|
1
|
|
|
$
|
(18
|
)
|
|
$
|
17
|
|
|
$
|
0
|
|
|
Unrealized gains (losses) for assets still held(3):
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Included in earnings:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Realized investment gains (losses), net
|
$
|
0
|
|
|
$
|
(20
|
)
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
2
|
|
|
$
|
0
|
|
|
|
Year Ended December 31, 2014
|
||||||||||||||||||
|
|
Trading Account Assets
|
||||||||||||||||||
|
|
Corporate
|
|
Asset-
Backed(7)
|
|
Residential
Mortgage-
Backed
|
|
Equity
|
|
All
Other
Activity
|
||||||||||
|
|
(in millions)
|
||||||||||||||||||
|
Total gains (losses) (realized/unrealized):
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Included in earnings:
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Realized investment gains (losses), net
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
1
|
|
|
$
|
0
|
|
|
Other income
|
$
|
(7
|
)
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
13
|
|
|
$
|
1
|
|
|
Net investment income
|
$
|
0
|
|
|
$
|
1
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
Unrealized gains (losses) for assets still held(3):
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Included in earnings:
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Realized investment gains (losses), net
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
1
|
|
|
$
|
0
|
|
|
Other income
|
$
|
6
|
|
|
$
|
0
|
|
|
$
|
1
|
|
|
$
|
16
|
|
|
$
|
1
|
|
|
|
Year Ended December 31, 2014
|
||||||
|
|
Equity
Securities
Available-
For-Sale
|
|
Other
Long-term
Investments(5)
|
||||
|
|
(in millions)
|
||||||
|
Total gains (losses) (realized/unrealized):
|
|
|
|
||||
|
Included in earnings:
|
|
|
|
||||
|
Realized investment gains (losses), net
|
$
|
8
|
|
|
$
|
(1
|
)
|
|
Included in other comprehensive income (loss)
|
$
|
9
|
|
|
$
|
0
|
|
|
Unrealized gains (losses) for assets/liabilities still held(3):
|
|
|
|
||||
|
Included in earnings:
|
|
|
|
||||
|
Realized investment gains (losses), net
|
$
|
(2
|
)
|
|
$
|
(1
|
)
|
|
|
Year Ended December 31, 2014
|
||||||||||||||
|
|
Separate
Account
Assets(4)(5)
|
|
Future
Policy
Benefits
|
|
Other
Liabilities
|
|
Notes
Issued by
Consolidated
VIEs
|
||||||||
|
|
(in millions)
|
||||||||||||||
|
Total gains (losses) (realized/unrealized):
|
|
|
|
|
|
|
|
||||||||
|
Included in earnings:
|
|
|
|
|
|
|
|
||||||||
|
Realized investment gains (losses), net
|
$
|
0
|
|
|
$
|
(6,831
|
)
|
|
$
|
2
|
|
|
$
|
201
|
|
|
Interest credited to policyholders’ account balances
|
$
|
(11
|
)
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
Net investment income
|
$
|
24
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
Unrealized gains (losses) for assets/liabilities still held(3):
|
|
|
|
|
|
|
|
||||||||
|
Included in earnings:
|
|
|
|
|
|
|
|
||||||||
|
Realized investment gains (losses), net
|
$
|
0
|
|
|
$
|
(6,853
|
)
|
|
$
|
2
|
|
|
$
|
201
|
|
|
Interest credited to policyholders’ account balances
|
$
|
(8
|
)
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
(1)
|
Other as of
December 31, 2016
primarily represents deconsolidations of certain previously consolidated collateralized loan obligations. Other as of
December 31, 2015
primarily represents reclassifications of certain assets between reporting categories.
|
|
(2)
|
Transfers into or out of Level 3 are generally reported as the value as of the beginning of the quarter in which the transfers occur for any such assets still held at the end of the quarter.
|
|
(3)
|
Unrealized gains or losses related to assets still held at the end of the period do not include amortization or accretion of premiums and discounts.
|
|
(4)
|
Separate account assets represent segregated funds that are invested for certain customers. Investment risks associated with market value changes are borne by the customers, except to the extent of minimum guarantees made by the Company with respect to certain accounts. Separate account liabilities are not included in the above table as they are reported at contract value and not fair value in the Company’s Consolidated Statements of Financial Position.
|
|
(5)
|
Prior period amounts have been reclassified to conform to current period presentation, including the adoption of ASU 2015-07.
|
|
(6)
|
Amounts for the year ended
December 31, 2015
, have been revised to correct the previously reported amounts.
|
|
(7)
|
Includes credit-tranched securities collateralized by sub-prime mortgages, auto loans, credit cards, education loans and other asset types.
|
|
|
|
As of December 31, 2016
|
||||||||||||||||||
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Netting(1)
|
|
Total
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
(in millions)
|
||||||||||||||||||
|
Derivative assets:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Interest Rate
|
|
$
|
55
|
|
|
$
|
9,269
|
|
|
$
|
6
|
|
|
|
|
$
|
9,330
|
|
||
|
Currency
|
|
0
|
|
|
375
|
|
|
0
|
|
|
|
|
375
|
|
||||||
|
Credit
|
|
0
|
|
|
1
|
|
|
0
|
|
|
|
|
1
|
|
||||||
|
Currency/Interest Rate
|
|
0
|
|
|
3,174
|
|
|
0
|
|
|
|
|
3,174
|
|
||||||
|
Equity
|
|
0
|
|
|
203
|
|
|
0
|
|
|
|
|
203
|
|
||||||
|
Commodity
|
|
0
|
|
|
0
|
|
|
0
|
|
|
|
|
0
|
|
||||||
|
Netting(1)
|
|
|
|
|
|
|
|
(11,716
|
)
|
|
(11,716
|
)
|
||||||||
|
Total derivative assets
|
|
$
|
55
|
|
|
$
|
13,022
|
|
|
$
|
6
|
|
|
$
|
(11,716
|
)
|
|
$
|
1,367
|
|
|
Derivative liabilities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Interest Rate
|
|
$
|
1
|
|
|
$
|
4,515
|
|
|
$
|
2
|
|
|
|
|
$
|
4,518
|
|
||
|
Currency
|
|
0
|
|
|
893
|
|
|
0
|
|
|
|
|
893
|
|
||||||
|
Credit
|
|
0
|
|
|
25
|
|
|
0
|
|
|
|
|
25
|
|
||||||
|
Currency/Interest Rate
|
|
0
|
|
|
365
|
|
|
0
|
|
|
|
|
365
|
|
||||||
|
Equity
|
|
6
|
|
|
483
|
|
|
0
|
|
|
|
|
489
|
|
||||||
|
Commodity
|
|
0
|
|
|
0
|
|
|
0
|
|
|
|
|
0
|
|
||||||
|
Netting(1)
|
|
|
|
|
|
|
|
(5,945
|
)
|
|
(5,945
|
)
|
||||||||
|
Total derivative liabilities
|
|
$
|
7
|
|
|
$
|
6,281
|
|
|
$
|
2
|
|
|
$
|
(5,945
|
)
|
|
$
|
345
|
|
|
|
|
As of December 31, 2015
|
||||||||||||||||||
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Netting(1)
|
|
Total
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
(in millions)
|
||||||||||||||||||
|
Derivative assets:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Interest Rate
|
|
$
|
11
|
|
|
$
|
10,561
|
|
|
$
|
7
|
|
|
|
|
$
|
10,579
|
|
||
|
Currency
|
|
0
|
|
|
318
|
|
|
0
|
|
|
|
|
318
|
|
||||||
|
Credit
|
|
0
|
|
|
3
|
|
|
0
|
|
|
|
|
3
|
|
||||||
|
Currency/Interest Rate
|
|
0
|
|
|
2,995
|
|
|
0
|
|
|
|
|
2,995
|
|
||||||
|
Equity
|
|
4
|
|
|
254
|
|
|
32
|
|
|
|
|
290
|
|
||||||
|
Commodity
|
|
0
|
|
|
0
|
|
|
0
|
|
|
|
|
0
|
|
||||||
|
Netting(1)
|
|
|
|
|
|
|
|
(11,457
|
)
|
|
(11,457
|
)
|
||||||||
|
Total derivative assets
|
|
$
|
15
|
|
|
$
|
14,131
|
|
|
$
|
39
|
|
|
$
|
(11,457
|
)
|
|
$
|
2,728
|
|
|
Derivative liabilities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Interest Rate
|
|
$
|
3
|
|
|
$
|
4,573
|
|
|
$
|
2
|
|
|
|
|
$
|
4,578
|
|
||
|
Currency
|
|
0
|
|
|
114
|
|
|
0
|
|
|
|
|
114
|
|
||||||
|
Credit
|
|
0
|
|
|
53
|
|
|
0
|
|
|
|
|
53
|
|
||||||
|
Currency/Interest Rate
|
|
0
|
|
|
244
|
|
|
0
|
|
|
|
|
244
|
|
||||||
|
Equity
|
|
0
|
|
|
327
|
|
|
0
|
|
|
|
|
327
|
|
||||||
|
Commodity
|
|
0
|
|
|
0
|
|
|
0
|
|
|
|
|
0
|
|
||||||
|
Netting(1)
|
|
|
|
|
|
|
|
(5,276
|
)
|
|
(5,276
|
)
|
||||||||
|
Total derivative liabilities
|
|
$
|
3
|
|
|
$
|
5,311
|
|
|
$
|
2
|
|
|
$
|
(5,276
|
)
|
|
$
|
40
|
|
|
(1)
|
“Netting” amounts represent cash collateral and the impact of offsetting asset and liability positions held with the same counterparty.
|
|
|
|
Year Ended December 31, 2016
|
||||||
|
|
|
Derivative
Assets–
Equity
|
|
Derivative
Assets–
Interest Rate
|
||||
|
|
|
|
|
|
||||
|
|
|
(in millions)
|
||||||
|
Fair Value, beginning of period
|
|
$
|
32
|
|
|
$
|
5
|
|
|
Total gains (losses) (realized/unrealized):
|
|
|
|
|
||||
|
Included in earnings:
|
|
|
|
|
||||
|
Realized investment gains (losses), net
|
|
0
|
|
|
(1
|
)
|
||
|
Other income
|
|
0
|
|
|
0
|
|
||
|
Purchases
|
|
0
|
|
|
0
|
|
||
|
Sales
|
|
0
|
|
|
0
|
|
||
|
Issuances
|
|
0
|
|
|
0
|
|
||
|
Settlements
|
|
0
|
|
|
0
|
|
||
|
Other(1)
|
|
(32
|
)
|
|
0
|
|
||
|
Transfers into Level 3(2)
|
|
0
|
|
|
0
|
|
||
|
Transfers out of Level 3(2)
|
|
0
|
|
|
0
|
|
||
|
Fair Value, end of period
|
|
$
|
0
|
|
|
$
|
4
|
|
|
Unrealized gains (losses) for the period relating to those Level 3 assets that were still held at the end of the period:
|
|
|
|
|
||||
|
Included in earnings:
|
|
|
|
|
||||
|
Realized investment gains (losses), net
|
|
$
|
0
|
|
|
$
|
0
|
|
|
Other income
|
|
$
|
0
|
|
|
$
|
0
|
|
|
|
|
Year Ended December 31, 2015
|
||||||
|
|
|
Derivative
Assets–
Equity
|
|
Derivative
Assets–
Interest Rate
|
||||
|
|
|
|
|
|
||||
|
|
|
(in millions)
|
||||||
|
Fair Value, beginning of period
|
|
$
|
6
|
|
|
$
|
3
|
|
|
Total gains (losses) (realized/unrealized):
|
|
|
|
|
||||
|
Included in earnings:
|
|
|
|
|
||||
|
Realized investment gains (losses), net
|
|
20
|
|
|
2
|
|
||
|
Other income
|
|
0
|
|
|
0
|
|
||
|
Purchases
|
|
9
|
|
|
0
|
|
||
|
Sales
|
|
(2
|
)
|
|
0
|
|
||
|
Issuances
|
|
0
|
|
|
0
|
|
||
|
Settlements
|
|
0
|
|
|
0
|
|
||
|
Other
|
|
0
|
|
|
0
|
|
||
|
Transfers into Level 3(2)
|
|
0
|
|
|
0
|
|
||
|
Transfers out of Level 3(2)
|
|
(1
|
)
|
|
0
|
|
||
|
Fair Value, end of period
|
|
$
|
32
|
|
|
$
|
5
|
|
|
Unrealized gains (losses) for the period relating to those Level 3 assets that were still held at the end of the period:
|
|
|
|
|
||||
|
Included in earnings:
|
|
|
|
|
||||
|
Realized investment gains (losses), net
|
|
$
|
20
|
|
|
$
|
2
|
|
|
Other income
|
|
$
|
0
|
|
|
$
|
0
|
|
|
|
|
Year Ended December 31, 2014
|
||||||
|
|
|
Derivative
Assets–
Equity
|
|
Derivative
Assets–
Interest Rate
|
||||
|
|
|
|
|
|
||||
|
|
|
(in millions)
|
||||||
|
Total gains (losses) (realized/unrealized):
|
|
|
|
|
||||
|
Included in earnings:
|
|
|
|
|
||||
|
Realized investment gains (losses), net
|
|
$
|
1
|
|
|
$
|
0
|
|
|
Other income
|
|
$
|
0
|
|
|
$
|
0
|
|
|
Unrealized gains (losses) for the period relating to those Level 3 assets that were still held at the end of the period:
|
|
|
|
|
||||
|
Included in earnings:
|
|
|
|
|
||||
|
Realized investment gains (losses), net
|
|
$
|
1
|
|
|
$
|
0
|
|
|
Other income
|
|
$
|
0
|
|
|
$
|
0
|
|
|
(1)
|
Primarily related to private warrants reclassified from derivatives to trading securities.
|
|
(2)
|
Transfers into or out of Level 3 are generally reported as the value as of the beginning of the quarter in which the transfer occurs.
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
|
(in millions)
|
||||||||||
|
Commercial mortgage loans(1):
|
|
|
|
|
|
||||||
|
Carrying value as of period end
|
$
|
47
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
Realized investment gains (losses) net
|
$
|
(5
|
)
|
|
$
|
0
|
|
|
$
|
0
|
|
|
Mortgage servicing rights(2):
|
|
|
|
|
|
||||||
|
Carrying value as of period end
|
$
|
84
|
|
|
$
|
90
|
|
|
$
|
89
|
|
|
Realized investment gains (losses) net
|
$
|
(1
|
)
|
|
$
|
(7
|
)
|
|
$
|
7
|
|
|
Cost method investments(3):
|
|
|
|
|
|
||||||
|
Carrying value as of period end
|
$
|
284
|
|
|
$
|
239
|
|
|
$
|
102
|
|
|
Realized investment gains (losses) net
|
$
|
(85
|
)
|
|
$
|
(123
|
)
|
|
$
|
(21
|
)
|
|
(1)
|
Commercial mortgage loans are valued based on discounted cash flows utilizing market rates or the fair value of the underlying real estate collateral.
|
|
(2)
|
Mortgage servicing rights are revalued based on internal models which utilize inputs. The fair value for mortgage servicing rights is determined using a discounted cash flow model incorporating assumptions for servicing revenues, adjusted for expected prepayments, delinquency rates, escrow deposit income and estimated loan servicing expenses.
|
|
(3)
|
For cost method impairments, the methodologies utilized are primarily discounted cash flow and, where appropriate, valuations provided by the general partners taking into consideration investment-related expenses.
|
|
|
December 31, 2016(1)
|
||||||||||||||||||
|
|
Fair Value
|
|
Carrying
Amount(2)
|
||||||||||||||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
Total
|
||||||||||
|
|
(in millions)
|
||||||||||||||||||
|
Assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Fixed maturities, held-to-maturity(3)
|
$
|
0
|
|
|
$
|
1,526
|
|
|
$
|
998
|
|
|
$
|
2,524
|
|
|
$
|
2,144
|
|
|
Trading account assets
|
0
|
|
|
150
|
|
|
0
|
|
|
150
|
|
|
150
|
|
|||||
|
Commercial mortgage and other loans
|
0
|
|
|
139
|
|
|
53,625
|
|
|
53,764
|
|
|
52,260
|
|
|||||
|
Policy loans
|
1
|
|
|
0
|
|
|
11,754
|
|
|
11,755
|
|
|
11,755
|
|
|||||
|
Short-term investments
|
0
|
|
|
326
|
|
|
0
|
|
|
326
|
|
|
326
|
|
|||||
|
Cash and cash equivalents
|
4,945
|
|
|
876
|
|
|
0
|
|
|
5,821
|
|
|
5,821
|
|
|||||
|
Accrued investment income
|
0
|
|
|
3,204
|
|
|
0
|
|
|
3,204
|
|
|
3,204
|
|
|||||
|
Other assets
|
54
|
|
|
1,976
|
|
|
658
|
|
|
2,688
|
|
|
2,688
|
|
|||||
|
Total assets
|
$
|
5,000
|
|
|
$
|
8,197
|
|
|
$
|
67,035
|
|
|
$
|
80,232
|
|
|
$
|
78,348
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Policyholders’ account balances—investment contracts
|
$
|
0
|
|
|
$
|
41,653
|
|
|
$
|
58,392
|
|
|
$
|
100,045
|
|
|
$
|
99,719
|
|
|
Securities sold under agreements to repurchase
|
0
|
|
|
7,606
|
|
|
0
|
|
|
7,606
|
|
|
7,606
|
|
|||||
|
Cash collateral for loaned securities
|
0
|
|
|
4,333
|
|
|
0
|
|
|
4,333
|
|
|
4,333
|
|
|||||
|
Short-term debt
|
0
|
|
|
1,077
|
|
|
73
|
|
|
1,150
|
|
|
1,133
|
|
|||||
|
Long-term debt(4)
|
1,267
|
|
|
15,705
|
|
|
2,957
|
|
|
19,929
|
|
|
18,041
|
|
|||||
|
Other liabilities
|
0
|
|
|
6,540
|
|
|
696
|
|
|
7,236
|
|
|
7,236
|
|
|||||
|
Separate account liabilities—investment contracts
|
0
|
|
|
71,010
|
|
|
27,578
|
|
|
98,588
|
|
|
98,588
|
|
|||||
|
Total liabilities
|
$
|
1,267
|
|
|
$
|
147,924
|
|
|
$
|
89,696
|
|
|
$
|
238,887
|
|
|
$
|
236,656
|
|
|
|
December 31, 2015(1)
|
||||||||||||||||||
|
|
Fair Value
|
|
Carrying
Amount(2)
|
||||||||||||||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
Total
|
||||||||||
|
|
(in millions)
|
||||||||||||||||||
|
Assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Fixed maturities, held-to-maturity(3)
|
$
|
0
|
|
|
$
|
1,543
|
|
|
$
|
1,081
|
|
|
$
|
2,624
|
|
|
$
|
2,308
|
|
|
Commercial mortgage and other loans
|
0
|
|
|
533
|
|
|
51,046
|
|
|
51,579
|
|
|
50,285
|
|
|||||
|
Policy loans
|
0
|
|
|
0
|
|
|
11,657
|
|
|
11,657
|
|
|
11,657
|
|
|||||
|
Short-term investments
|
0
|
|
|
617
|
|
|
1
|
|
|
618
|
|
|
618
|
|
|||||
|
Cash and cash equivalents
|
2,832
|
|
|
572
|
|
|
0
|
|
|
3,404
|
|
|
3,404
|
|
|||||
|
Accrued investment income
|
0
|
|
|
3,110
|
|
|
0
|
|
|
3,110
|
|
|
3,110
|
|
|||||
|
Other assets
|
136
|
|
|
2,334
|
|
|
652
|
|
|
3,122
|
|
|
3,122
|
|
|||||
|
Total assets
|
$
|
2,968
|
|
|
$
|
8,709
|
|
|
$
|
64,437
|
|
|
$
|
76,114
|
|
|
$
|
74,504
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Policyholders’ account balances—investment contracts
|
$
|
0
|
|
|
$
|
39,314
|
|
|
$
|
54,957
|
|
|
$
|
94,271
|
|
|
$
|
93,937
|
|
|
Securities sold under agreements to repurchase
|
0
|
|
|
7,882
|
|
|
0
|
|
|
7,882
|
|
|
7,882
|
|
|||||
|
Cash collateral for loaned securities
|
0
|
|
|
3,496
|
|
|
0
|
|
|
3,496
|
|
|
3,496
|
|
|||||
|
Short-term debt
|
0
|
|
|
1,221
|
|
|
0
|
|
|
1,221
|
|
|
1,216
|
|
|||||
|
Long-term debt(4)(5)
|
1,328
|
|
|
16,540
|
|
|
3,433
|
|
|
21,301
|
|
|
19,594
|
|
|||||
|
Other liabilities
|
0
|
|
|
5,344
|
|
|
695
|
|
|
6,039
|
|
|
6,039
|
|
|||||
|
Separate account liabilities—investment contracts
|
0
|
|
|
69,978
|
|
|
32,267
|
|
|
102,245
|
|
|
102,245
|
|
|||||
|
Total liabilities
|
$
|
1,328
|
|
|
$
|
143,775
|
|
|
$
|
91,352
|
|
|
$
|
236,455
|
|
|
$
|
234,409
|
|
|
(1)
|
Effective January 1, 2016, the Company adopted new accounting guidance (ASU 2015-07, Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share or Its Equivalent (Topic 820)), which removes the requirement to categorize within the fair value hierarchy all investments measured at net asset value per share (or its equivalent) as a practical expedient. As a result of the adoption of this new guidance, certain other long-term investments are no longer classified in the fair value hierarchy. The guidance was required to be applied retrospectively, and therefore, prior period amounts have been conformed to the current period presentation. At
December 31, 2016
and
2015
, the fair values of these cost method investments were
$1,514 million
and
$1,653 million
, respectively, which had been previously classified in level 3 at December 31, 2015. The carrying value of these investments were
$1,478 million
and
$1,563 million
as of
December 31, 2016
and
2015
, respectively.
|
|
(2)
|
Carrying values presented herein differ from those in the Company’s Consolidated Statements of Financial Position because certain items within the respective financial statement captions are not considered financial instruments or out of scope under authoritative guidance relating to disclosures of the fair value of financial instruments. Financial statement captions excluded from the above table are not considered financial instruments.
|
|
(3)
|
As of
December 31, 2016
, excludes notes with both fair value and carrying amount of
$4,403 million
. As of
December 31, 2015
, excludes notes with fair value and carrying amount of
$4,081 million
and
$3,850 million
, respectively. These amounts have been offset with the associated payables under a netting agreement.
|
|
(4)
|
As of
December 31, 2016
, includes notes with both fair value and carrying amount of
$5,859 million
. As of
December 31, 2015
,
includes notes with fair value and carrying amount of
$5,120 million
and
$4,889 million
, respectively. These amounts have been offset with the associated receivables under a netting agreement.
|
|
(5)
|
Prior period amounts are presented on a basis consistent with the current period presentation, reflecting the adoption of ASU 2015-03.
|
|
21.
|
DERIVATIVE INSTRUMENTS
|
|
|
December 31, 2016
|
|
December 31, 2015
|
||||||||||||||||||||
|
Primary Underlying/
Instrument Type
|
|
|
Gross Fair Value
|
|
|
|
Gross Fair Value
|
||||||||||||||||
|
Notional(1)
|
|
Assets
|
|
Liabilities
|
|
Notional(1)
|
|
Assets
|
|
Liabilities
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
(in millions)
|
||||||||||||||||||||||
|
Derivatives Designated as Hedge Accounting Instruments:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Interest Rate
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Interest Rate Swaps
|
$
|
1,117
|
|
|
$
|
17
|
|
|
$
|
(111
|
)
|
|
$
|
1,431
|
|
|
$
|
20
|
|
|
$
|
(148
|
)
|
|
Foreign Currency
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Foreign Currency Forwards
|
167
|
|
|
3
|
|
|
(1
|
)
|
|
323
|
|
|
7
|
|
|
(1
|
)
|
||||||
|
Currency/Interest Rate
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Foreign Currency Swaps
|
14,737
|
|
|
1,956
|
|
|
(54
|
)
|
|
12,739
|
|
|
1,592
|
|
|
(5
|
)
|
||||||
|
Total Qualifying Hedges
|
$
|
16,021
|
|
|
$
|
1,976
|
|
|
$
|
(166
|
)
|
|
$
|
14,493
|
|
|
$
|
1,619
|
|
|
$
|
(154
|
)
|
|
Derivatives Not Qualifying as Hedge Accounting Instruments:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Interest Rate
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Interest Rate Swaps
|
$
|
162,131
|
|
|
$
|
8,969
|
|
|
$
|
(4,274
|
)
|
|
$
|
173,091
|
|
|
$
|
10,161
|
|
|
$
|
(4,232
|
)
|
|
Interest Rate Futures
|
31,183
|
|
|
55
|
|
|
(1
|
)
|
|
28,209
|
|
|
11
|
|
|
(3
|
)
|
||||||
|
Interest Rate Options
|
13,290
|
|
|
289
|
|
|
(132
|
)
|
|
40,056
|
|
|
387
|
|
|
(196
|
)
|
||||||
|
Interest Rate Forwards
|
321
|
|
|
0
|
|
|
(1
|
)
|
|
86
|
|
|
0
|
|
|
0
|
|
||||||
|
Foreign Currency
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Foreign Currency Forwards
|
21,042
|
|
|
372
|
|
|
(892
|
)
|
|
17,400
|
|
|
311
|
|
|
(113
|
)
|
||||||
|
Foreign Currency Options
|
93
|
|
|
0
|
|
|
0
|
|
|
93
|
|
|
0
|
|
|
0
|
|
||||||
|
Currency/Interest Rate
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Foreign Currency Swaps
|
12,336
|
|
|
1,218
|
|
|
(311
|
)
|
|
11,607
|
|
|
1,404
|
|
|
(238
|
)
|
||||||
|
Credit
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Credit Default Swaps
|
918
|
|
|
1
|
|
|
(25
|
)
|
|
1,839
|
|
|
3
|
|
|
(53
|
)
|
||||||
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Equity Futures
|
1,371
|
|
|
0
|
|
|
(5
|
)
|
|
249
|
|
|
2
|
|
|
0
|
|
||||||
|
Equity Options
|
12,020
|
|
|
102
|
|
|
(93
|
)
|
|
48,958
|
|
|
159
|
|
|
(118
|
)
|
||||||
|
Total Return Swaps
|
18,167
|
|
|
101
|
|
|
(390
|
)
|
|
18,804
|
|
|
128
|
|
|
(209
|
)
|
||||||
|
Commodity
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Commodity Futures
|
1
|
|
|
0
|
|
|
0
|
|
|
80
|
|
|
0
|
|
|
0
|
|
||||||
|
Synthetic GICs
|
77,197
|
|
|
5
|
|
|
0
|
|
|
72,585
|
|
|
7
|
|
|
0
|
|
||||||
|
Total Non-Qualifying Derivatives(2)
|
$
|
350,070
|
|
|
$
|
11,112
|
|
|
$
|
(6,124
|
)
|
|
$
|
413,057
|
|
|
$
|
12,573
|
|
|
$
|
(5,162
|
)
|
|
Total Derivatives(3)
|
$
|
366,091
|
|
|
$
|
13,088
|
|
|
$
|
(6,290
|
)
|
|
$
|
427,550
|
|
|
$
|
14,192
|
|
|
$
|
(5,316
|
)
|
|
(1)
|
Notional amounts are presented on a gross basis and include derivatives used to offset existing positions.
|
|
(2)
|
Based on notional amounts, most of the Company’s derivatives do not qualify for hedge accounting as follows: i) derivatives that economically hedge embedded derivatives do not qualify for hedge accounting because changes in the fair value of the embedded derivatives are already recorded in net income, ii) derivatives that are utilized as macro hedges of the Company’s exposure to various risks typically do not qualify for hedge accounting because they do not meet the criteria required under portfolio hedge accounting rules, and iii) synthetic GICs, which are product standalone derivatives, do not qualify as hedging instruments under hedge accounting rules.
|
|
(3)
|
Excludes embedded derivatives and associated reinsurance recoverables which contain multiple underlyings. The fair value of these embedded derivatives was a net liability of
$8,252 million
and
$8,408 million
as of December 31,
2016
, and
2015
, respectively, primarily included in “Future policy benefits.”
|
|
|
|
December 31, 2016
|
||||||||||||||||||
|
|
|
Gross
Amounts of
Recognized
Financial
Instruments
|
|
Gross
Amounts
Offset in the
Statements of
Financial
Position
|
|
Net Amounts
Presented in
the Statements
of Financial
Position
|
|
Financial
Instruments/
Collateral(1)
|
|
Net
Amount
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
(in millions)
|
||||||||||||||||||
|
Offsetting of Financial Assets:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Derivatives(1)
|
|
$
|
12,987
|
|
|
$
|
(11,716
|
)
|
|
$
|
1,271
|
|
|
$
|
(399
|
)
|
|
$
|
872
|
|
|
Securities purchased under agreement to resell
|
|
1,016
|
|
|
0
|
|
|
1,016
|
|
|
(1,016
|
)
|
|
0
|
|
|||||
|
Total Assets
|
|
$
|
14,003
|
|
|
$
|
(11,716
|
)
|
|
$
|
2,287
|
|
|
$
|
(1,415
|
)
|
|
$
|
872
|
|
|
Offsetting of Financial Liabilities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Derivatives(1)
|
|
$
|
6,281
|
|
|
$
|
(5,945
|
)
|
|
$
|
336
|
|
|
$
|
(299
|
)
|
|
$
|
37
|
|
|
Securities sold under agreement to repurchase
|
|
7,606
|
|
|
0
|
|
|
7,606
|
|
|
(7,606
|
)
|
|
0
|
|
|||||
|
Total Liabilities
|
|
$
|
13,887
|
|
|
$
|
(5,945
|
)
|
|
$
|
7,942
|
|
|
$
|
(7,905
|
)
|
|
$
|
37
|
|
|
|
|
December 31, 2015
|
||||||||||||||||||
|
|
|
Gross
Amounts of
Recognized
Financial
Instruments
|
|
Gross
Amounts
Offset in the
Statements of
Financial
Position
|
|
Net Amounts
Presented in
the Statements
of Financial
Position
|
|
Financial
Instruments/
Collateral(1)
|
|
Net
Amount
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
(in millions)
|
||||||||||||||||||
|
Offsetting of Financial Assets:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Derivatives(1)
|
|
$
|
14,028
|
|
|
$
|
(11,457
|
)
|
|
$
|
2,571
|
|
|
$
|
(1,296
|
)
|
|
$
|
1,275
|
|
|
Securities purchased under agreement to resell
|
|
776
|
|
|
0
|
|
|
776
|
|
|
(776
|
)
|
|
0
|
|
|||||
|
Total Assets
|
|
$
|
14,804
|
|
|
$
|
(11,457
|
)
|
|
$
|
3,347
|
|
|
$
|
(2,072
|
)
|
|
$
|
1,275
|
|
|
Offsetting of Financial Liabilities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Derivatives(1)
|
|
$
|
5,310
|
|
|
$
|
(5,276
|
)
|
|
$
|
34
|
|
|
$
|
(14
|
)
|
|
$
|
20
|
|
|
Securities sold under agreement to repurchase
|
|
7,882
|
|
|
0
|
|
|
7,882
|
|
|
(7,882
|
)
|
|
0
|
|
|||||
|
Total Liabilities
|
|
$
|
13,192
|
|
|
$
|
(5,276
|
)
|
|
$
|
7,916
|
|
|
$
|
(7,896
|
)
|
|
$
|
20
|
|
|
(1)
|
Amounts exclude the excess of collateral received/pledged from/to the counterparty.
|
|
|
Year Ended December 31, 2016
|
|||||||||||||||||||||||
|
|
Realized
Investment
Gains
(Losses)
|
|
Net
Investment
Income
|
|
Other
Income
|
|
Interest
Expense
|
|
Interest
Credited
To Policyholders’
Account
Balances
|
|
AOCI(1)
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
|
(in millions)
|
|||||||||||||||||||||||
|
Derivatives Designated as Hedge Accounting Instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Fair value hedges
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Interest Rate
|
$
|
26
|
|
|
$
|
(31
|
)
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
|
Currency
|
21
|
|
|
(1
|
)
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|||||||
|
Total fair value hedges
|
47
|
|
|
(32
|
)
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|||||||
|
Cash flow hedges
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Interest Rate
|
0
|
|
|
0
|
|
|
0
|
|
|
(5
|
)
|
|
0
|
|
|
(1
|
)
|
|||||||
|
Currency/Interest Rate
|
0
|
|
|
123
|
|
|
269
|
|
|
0
|
|
|
0
|
|
|
152
|
|
|||||||
|
Total cash flow hedges
|
0
|
|
|
123
|
|
|
269
|
|
|
(5
|
)
|
|
0
|
|
|
151
|
|
|||||||
|
Net investment hedges
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Currency(2)
|
5
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
(5
|
)
|
|||||||
|
Currency/Interest Rate
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|||||||
|
Total net investment hedges
|
5
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
(5
|
)
|
|||||||
|
Derivatives Not Qualifying as Hedge Accounting Instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Interest Rate
|
1,564
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|||||||
|
Currency
|
463
|
|
|
0
|
|
|
1
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|||||||
|
Currency/Interest Rate
|
10
|
|
|
0
|
|
|
3
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|||||||
|
Credit
|
32
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|||||||
|
Equity
|
(2,171
|
)
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|||||||
|
Commodity
|
(1
|
)
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|||||||
|
Embedded Derivatives
|
1,260
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|||||||
|
Total non-qualifying hedges
|
1,157
|
|
|
0
|
|
|
4
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|||||||
|
Total
|
$
|
1,209
|
|
|
$
|
91
|
|
|
$
|
273
|
|
|
$
|
(5
|
)
|
|
$
|
0
|
|
|
$
|
146
|
|
|
|
|
Year Ended December 31, 2015
|
||||||||||||||||||||||
|
|
Realized
Investment
Gains
(Losses)
|
|
Net
Investment
Income
|
|
Other
Income
|
|
Interest
Expense
|
|
Interest
Credited
To
Policyholders’
Account
Balances
|
|
AOCI(1)
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
(in millions)
|
||||||||||||||||||||||
|
Derivatives Designated as Hedge Accounting Instruments:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Fair value hedges
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Interest Rate
|
$
|
29
|
|
|
$
|
(44
|
)
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
Currency
|
18
|
|
|
(1
|
)
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
||||||
|
Total fair value hedges
|
47
|
|
|
(45
|
)
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
||||||
|
Cash flow hedges
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Interest Rate
|
0
|
|
|
0
|
|
|
0
|
|
|
(7
|
)
|
|
0
|
|
|
2
|
|
||||||
|
Currency/Interest Rate
|
0
|
|
|
75
|
|
|
146
|
|
|
0
|
|
|
0
|
|
|
957
|
|
||||||
|
Total cash flow hedges
|
0
|
|
|
75
|
|
|
146
|
|
|
(7
|
)
|
|
0
|
|
|
959
|
|
||||||
|
Net investment hedges
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Currency
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
9
|
|
||||||
|
Currency/Interest Rate
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
31
|
|
||||||
|
Total net investment hedges
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
40
|
|
||||||
|
Derivatives Not Qualifying as Hedge Accounting Instruments:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Interest Rate
|
1,394
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
||||||
|
Currency
|
(124
|
)
|
|
0
|
|
|
(2
|
)
|
|
0
|
|
|
0
|
|
|
0
|
|
||||||
|
Currency/Interest Rate
|
563
|
|
|
0
|
|
|
7
|
|
|
0
|
|
|
0
|
|
|
0
|
|
||||||
|
Credit
|
(5
|
)
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
||||||
|
Equity
|
(591
|
)
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
||||||
|
Commodity
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
||||||
|
Embedded Derivatives
|
724
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
||||||
|
Total non-qualifying hedges
|
1,961
|
|
|
0
|
|
|
5
|
|
|
0
|
|
|
0
|
|
|
0
|
|
||||||
|
Total
|
$
|
2,008
|
|
|
$
|
30
|
|
|
$
|
151
|
|
|
$
|
(7
|
)
|
|
$
|
0
|
|
|
$
|
999
|
|
|
|
Year Ended December 31, 2014
|
|||||||||||||||||||||||
|
|
Realized
Investment
Gains (Losses)
|
|
Net
Investment
Income
|
|
Other
Income
|
|
Interest
Expense
|
|
Interest
Credited
To Policyholders’
Account
Balances
|
|
AOCI(1)
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
|
(in millions)
|
|||||||||||||||||||||||
|
Derivatives Designated as Hedge Accounting Instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Fair value hedges
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Interest Rate
|
$
|
(4
|
)
|
|
$
|
(57
|
)
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
2
|
|
|
$
|
0
|
|
|
|
Currency
|
(9
|
)
|
|
(1
|
)
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|||||||
|
Total fair value hedges
|
(13
|
)
|
|
(58
|
)
|
|
0
|
|
|
0
|
|
|
2
|
|
|
0
|
|
|||||||
|
Cash flow hedges
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Interest Rate
|
0
|
|
|
0
|
|
|
0
|
|
|
(22
|
)
|
|
0
|
|
|
38
|
|
|||||||
|
Currency/Interest Rate
|
0
|
|
|
7
|
|
|
67
|
|
|
0
|
|
|
0
|
|
|
614
|
|
|||||||
|
Total cash flow hedges
|
0
|
|
|
7
|
|
|
67
|
|
|
(22
|
)
|
|
0
|
|
|
652
|
|
|||||||
|
Net investment hedges
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Currency
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
17
|
|
|||||||
|
Currency/Interest Rate
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
128
|
|
|||||||
|
Total net investment hedges
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
145
|
|
|||||||
|
Derivatives Not Qualifying as Hedge Accounting Instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Interest Rate
|
7,623
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|||||||
|
Currency
|
(562
|
)
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|||||||
|
Currency/Interest Rate
|
1,124
|
|
|
0
|
|
|
5
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|||||||
|
Credit
|
(22
|
)
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|||||||
|
Equity
|
(1,605
|
)
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|||||||
|
Commodity
|
1
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|||||||
|
Embedded Derivatives
|
(6,734
|
)
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|||||||
|
Total non-qualifying hedges
|
(175
|
)
|
|
0
|
|
|
5
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|||||||
|
Total
|
$
|
(188
|
)
|
|
$
|
(51
|
)
|
|
$
|
72
|
|
|
$
|
(22
|
)
|
|
$
|
2
|
|
|
$
|
797
|
|
|
|
(1)
|
Amounts deferred in AOCI.
|
|
(2)
|
Relates to the sale of equity method investments.
|
|
|
(in millions)
|
||
|
Balance, December 31, 2013
|
$
|
(446
|
)
|
|
Net deferred gains (losses) on cash flow hedges from January 1 to December 31, 2014
|
706
|
|
|
|
Amount reclassified into current period earnings
|
(54
|
)
|
|
|
Balance, December 31, 2014
|
206
|
|
|
|
Net deferred gains (losses) on cash flow hedges from January 1 to December 31, 2015
|
1,199
|
|
|
|
Amount reclassified into current period earnings
|
(240
|
)
|
|
|
Balance, December 31, 2015
|
1,165
|
|
|
|
Net deferred gains (losses) on cash flow hedges from January 1 to December 31, 2016
|
602
|
|
|
|
Amount reclassified into current period earnings
|
(451
|
)
|
|
|
Balance, December 31, 2016
|
$
|
1,316
|
|
|
22.
|
SEGMENT INFORMATION
|
|
•
|
realized investment gains (losses), net, and related charges and adjustments;
|
|
•
|
net investment gains (losses) on trading account assets supporting insurance liabilities and changes in experience-rated contractholder liabilities due to asset value changes;
|
|
•
|
the contribution to income (loss) of divested businesses that have been or will be sold or exited, including businesses that have been placed in wind down status, but that did not qualify for “discontinued operations” accounting treatment under U.S. GAAP; and
|
|
•
|
equity in earnings of operating joint ventures and earnings attributable to noncontrolling interests.
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
|
|
|
|
|
|
|
||||||
|
|
|
(in millions)
|
||||||||||
|
Net gains (losses) from(1):
|
|
|
|
|
|
|
||||||
|
Terminated hedges of foreign currency earnings
|
|
$
|
39
|
|
|
$
|
284
|
|
|
$
|
293
|
|
|
Current period yield adjustments
|
|
$
|
466
|
|
|
$
|
475
|
|
|
$
|
476
|
|
|
Principal source of earnings
|
|
$
|
74
|
|
|
$
|
123
|
|
|
$
|
100
|
|
|
(1)
|
In addition to the items in the table above, “Realized investment gains (losses), net, and related charges and adjustments” also includes an adjustment to reflect “Realized investment gains (losses), net” related to divested businesses as results of “Divested businesses,” discussed below.
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
|
|
|
|
|
|
|
||||||
|
|
|
(in millions)
|
||||||||||
|
Net gains (losses) from:
|
|
|
||||||||||
|
Other trading account assets
|
|
$
|
(95
|
)
|
|
$
|
(94
|
)
|
|
$
|
(21
|
)
|
|
Foreign currency exchange movements
|
|
$
|
(154
|
)
|
|
$
|
69
|
|
|
$
|
(3,023
|
)
|
|
Other activities
|
|
$
|
(18
|
)
|
|
$
|
9
|
|
|
$
|
13
|
|
|
•
|
The portion of the amortization of DAC, VOBA, unearned revenue reserves and DSI for certain products that is related to net realized investment gains (losses).
|
|
•
|
Policyholder dividends and interest credited to policyholders’ account balances that relate to certain life policies that pass back certain realized investment gains (losses) to the policyholder, and reserves for future policy benefits for certain policies that are affected by net realized investment gains (losses).
|
|
•
|
Market value adjustments paid or received upon a contractholder’s surrender of certain of the Company’s annuity products as these amounts mitigate the net realized investment gains or losses incurred upon the disposition of the underlying invested assets.
|
|
|
|
Year ended December 31,
|
||||||||||
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
|
|
|
|
|
|
|
||||||
|
|
|
(in millions)
|
||||||||||
|
Adjusted operating income before income taxes by segment:
|
|
|
|
|
|
|
||||||
|
Individual Annuities
|
|
$
|
1,765
|
|
|
$
|
1,797
|
|
|
$
|
1,467
|
|
|
Retirement
|
|
1,012
|
|
|
931
|
|
|
1,215
|
|
|||
|
Asset Management
|
|
787
|
|
|
779
|
|
|
785
|
|
|||
|
Total U.S. Retirement Solutions and Investment Management division
|
|
3,564
|
|
|
3,507
|
|
|
3,467
|
|
|||
|
Individual Life
|
|
79
|
|
|
635
|
|
|
498
|
|
|||
|
Group Insurance
|
|
220
|
|
|
176
|
|
|
23
|
|
|||
|
Total U.S. Individual Life and Group Insurance division
|
|
299
|
|
|
811
|
|
|
521
|
|
|||
|
International Insurance
|
|
3,117
|
|
|
3,226
|
|
|
3,252
|
|
|||
|
Total International Insurance division
|
|
3,117
|
|
|
3,226
|
|
|
3,252
|
|
|||
|
Corporate and Other operations
|
|
(1,581
|
)
|
|
(1,313
|
)
|
|
(1,348
|
)
|
|||
|
Total Corporate and Other
|
|
(1,581
|
)
|
|
(1,313
|
)
|
|
(1,348
|
)
|
|||
|
Total segment adjusted operating income before income taxes
|
|
5,399
|
|
|
6,231
|
|
|
5,892
|
|
|||
|
Reconciling Items:
|
|
|
|
|
|
|
||||||
|
Realized investment gains (losses), net, and related adjustments
|
|
989
|
|
|
2,258
|
|
|
(3,588
|
)
|
|||
|
Charges related to realized investment gains (losses), net
|
|
(466
|
)
|
|
(679
|
)
|
|
(542
|
)
|
|||
|
Investment gains (losses) on trading account assets supporting insurance liabilities, net
|
|
(17
|
)
|
|
(524
|
)
|
|
339
|
|
|||
|
Change in experience-rated contractholder liabilities due to asset value changes
|
|
21
|
|
|
433
|
|
|
(294
|
)
|
|||
|
Divested businesses:
|
|
|
|
|
|
|
||||||
|
Closed Block division(1)
|
|
(132
|
)
|
|
58
|
|
|
0
|
|
|||
|
Other divested businesses
|
|
(84
|
)
|
|
(66
|
)
|
|
167
|
|
|||
|
Equity in earnings of operating joint ventures and earnings attributable to noncontrolling interests
|
|
(5
|
)
|
|
58
|
|
|
44
|
|
|||
|
Subtotal(2)
|
|
5,705
|
|
|
7,769
|
|
|
2,018
|
|
|||
|
Income (loss) from continuing operations before income taxes and equity in earnings of operating joint ventures for Closed Block Business(3)
|
|
0
|
|
|
0
|
|
|
(259
|
)
|
|||
|
Consolidated income (loss) from continuing operations before income taxes and equity in earnings of operating joint ventures
|
|
$
|
5,705
|
|
|
$
|
7,769
|
|
|
$
|
1,759
|
|
|
(1)
|
As a result of the Class B Repurchase, for the years ended December 31, 2016 and 2015, the Closed Block, along with certain related assets and liabilities, comprises the Closed Block division, which is accounted for as a divested business that is reported separately from the divested businesses that are included in Corporate and Other operations.
|
|
(2)
|
Amounts for the year ended December 31, 2014 represent “Income (loss) from continuing operations before income taxes and equity in earnings of operating joint ventures” of the Company’s former Financial Services Businesses, reflecting the existence of two classes of common stock and the separate reporting of the Financial Services Businesses and the Closed Block Business for each period.
|
|
(3)
|
Reflects the existence of two classes of common stock and the separate reporting of the Company’s former Financial Services Businesses and the Closed Block Business for the year ended December 31, 2014.
|
|
|
|
|
||||||
|
|
|
As of December 31,
|
||||||
|
|
|
2016
|
|
2015(1)
|
||||
|
|
|
|
|
|
||||
|
|
|
(in millions)
|
||||||
|
Total Assets:
|
|
|
|
|
||||
|
Individual Annuities
|
|
$
|
170,861
|
|
|
$
|
169,447
|
|
|
Retirement
|
|
173,509
|
|
|
171,183
|
|
||
|
Asset Management
|
|
49,255
|
|
|
54,491
|
|
||
|
Total U.S. Retirement Solutions and Investment Management division
|
|
393,625
|
|
|
395,121
|
|
||
|
Individual Life
|
|
77,524
|
|
|
71,856
|
|
||
|
Group Insurance
|
|
40,642
|
|
|
39,344
|
|
||
|
Total U.S. Individual Life and Group Insurance division
|
|
118,166
|
|
|
111,200
|
|
||
|
International Insurance
|
|
197,119
|
|
|
175,153
|
|
||
|
Total International Insurance division
|
|
197,119
|
|
|
175,153
|
|
||
|
Corporate and Other operations
|
|
13,001
|
|
|
13,654
|
|
||
|
Total Corporate and Other
|
|
13,001
|
|
|
13,654
|
|
||
|
Closed Block
|
|
62,051
|
|
|
62,127
|
|
||
|
Total Closed Block division
|
|
62,051
|
|
|
62,127
|
|
||
|
Total per Consolidated Statements of Financial Position
|
|
$
|
783,962
|
|
|
$
|
757,255
|
|
|
(1)
|
Prior period amounts are presented on a basis consistent with the current period presentation, reflecting the adoption of ASU 2015-03.
|
|
|
|
Year Ended December 31, 2016
|
||||||||||||||||||||||||||
|
|
|
Revenues
|
|
Net
Investment
Income
|
|
Policyholders’
Benefits
|
|
Interest
Credited to
Policyholders’
Account
Balances
|
|
Dividends to
Policyholders
|
|
Interest
Expense
|
|
Amortization
of DAC
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
|
|
(in millions)
|
||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Individual Annuities
|
|
$
|
4,666
|
|
|
$
|
698
|
|
|
$
|
306
|
|
|
$
|
362
|
|
|
$
|
0
|
|
|
$
|
71
|
|
|
$
|
484
|
|
|
Retirement
|
|
12,876
|
|
|
4,263
|
|
|
9,328
|
|
|
1,473
|
|
|
0
|
|
|
19
|
|
|
33
|
|
|||||||
|
Asset Management
|
|
2,961
|
|
|
80
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
15
|
|
|
15
|
|
|||||||
|
Total U.S. Retirement Solutions and Investment Management division
|
|
20,503
|
|
|
5,041
|
|
|
9,634
|
|
|
1,835
|
|
|
0
|
|
|
105
|
|
|
532
|
|
|||||||
|
Individual Life
|
|
5,355
|
|
|
1,822
|
|
|
2,750
|
|
|
680
|
|
|
35
|
|
|
583
|
|
|
115
|
|
|||||||
|
Group Insurance
|
|
5,343
|
|
|
608
|
|
|
4,032
|
|
|
263
|
|
|
0
|
|
|
5
|
|
|
6
|
|
|||||||
|
Total U.S. Individual Life and Group Insurance division
|
|
10,698
|
|
|
2,430
|
|
|
6,782
|
|
|
943
|
|
|
35
|
|
|
588
|
|
|
121
|
|
|||||||
|
International Insurance
|
|
21,009
|
|
|
4,759
|
|
|
13,183
|
|
|
920
|
|
|
49
|
|
|
8
|
|
|
1,068
|
|
|||||||
|
Total International Insurance division
|
|
21,009
|
|
|
4,759
|
|
|
13,183
|
|
|
920
|
|
|
49
|
|
|
8
|
|
|
1,068
|
|
|||||||
|
Corporate and Other operations
|
|
(636
|
)
|
|
465
|
|
|
26
|
|
|
0
|
|
|
0
|
|
|
614
|
|
|
(49
|
)
|
|||||||
|
Total Corporate and Other
|
|
(636
|
)
|
|
465
|
|
|
26
|
|
|
0
|
|
|
0
|
|
|
614
|
|
|
(49
|
)
|
|||||||
|
Total
|
|
51,574
|
|
|
12,695
|
|
|
29,625
|
|
|
3,698
|
|
|
84
|
|
|
1,315
|
|
|
1,672
|
|
|||||||
|
Reconciling items:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Realized investment gains (losses), net, and related adjustments
|
|
989
|
|
|
(31
|
)
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|||||||
|
Charges related to realized investment gains (losses), net
|
|
19
|
|
|
0
|
|
|
131
|
|
|
(50
|
)
|
|
0
|
|
|
0
|
|
|
168
|
|
|||||||
|
Investment gains (losses) on trading account assets supporting insurance liabilities, net
|
|
(17
|
)
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|||||||
|
Change in experience-rated contractholder liabilities due to assets value changes
|
|
0
|
|
|
0
|
|
|
0
|
|
|
(21
|
)
|
|
0
|
|
|
0
|
|
|
0
|
|
|||||||
|
Divested businesses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Closed Block division(1)
|
|
5,669
|
|
|
2,578
|
|
|
3,282
|
|
|
134
|
|
|
1,941
|
|
|
2
|
|
|
37
|
|
|||||||
|
Other divested businesses
|
|
602
|
|
|
278
|
|
|
594
|
|
|
0
|
|
|
0
|
|
|
3
|
|
|
0
|
|
|||||||
|
Equity in earnings of operating joint ventures and earnings attributable to noncontrolling interests
|
|
(57
|
)
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|||||||
|
Total per Consolidated Statements of Operations
|
|
$
|
58,779
|
|
|
$
|
15,520
|
|
|
$
|
33,632
|
|
|
$
|
3,761
|
|
|
$
|
2,025
|
|
|
$
|
1,320
|
|
|
$
|
1,877
|
|
|
(1)
|
As a result of the Class B Repurchase, for the year ended December 31, 2016, the Closed Block, along with certain related assets and liabilities, comprises the Closed Block division, which is accounted for as a divested business that is reported separately from the divested businesses that are included in Corporate and Other operations.
|
|
|
|
Year Ended December 31, 2015
|
||||||||||||||||||||||||||
|
|
|
Revenues
|
|
Net
Investment
Income
|
|
Policyholders’
Benefits
|
|
Interest
Credited to
Policyholders’
Account
Balances
|
|
Dividends to
Policyholders
|
|
Interest
Expense
|
|
Amortization
of DAC
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
|
|
(in millions)
|
||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Individual Annuities
|
|
$
|
4,695
|
|
|
$
|
603
|
|
|
$
|
314
|
|
|
$
|
363
|
|
|
$
|
0
|
|
|
$
|
69
|
|
|
$
|
465
|
|
|
Retirement
|
|
11,821
|
|
|
4,082
|
|
|
8,352
|
|
|
1,441
|
|
|
(2
|
)
|
|
25
|
|
|
66
|
|
|||||||
|
Asset Management
|
|
2,944
|
|
|
111
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
10
|
|
|
19
|
|
|||||||
|
Total U.S. Retirement Solutions and Investment Management division
|
|
19,460
|
|
|
4,796
|
|
|
8,666
|
|
|
1,804
|
|
|
(2
|
)
|
|
104
|
|
|
550
|
|
|||||||
|
Individual Life
|
|
5,233
|
|
|
1,669
|
|
|
2,245
|
|
|
644
|
|
|
33
|
|
|
550
|
|
|
133
|
|
|||||||
|
Group Insurance
|
|
5,143
|
|
|
586
|
|
|
3,868
|
|
|
257
|
|
|
0
|
|
|
8
|
|
|
6
|
|
|||||||
|
Total U.S. Individual Life and Group Insurance division
|
|
10,376
|
|
|
2,255
|
|
|
6,113
|
|
|
901
|
|
|
33
|
|
|
558
|
|
|
139
|
|
|||||||
|
International Insurance
|
|
19,364
|
|
|
4,357
|
|
|
11,821
|
|
|
880
|
|
|
51
|
|
|
5
|
|
|
989
|
|
|||||||
|
Total International Insurance division
|
|
19,364
|
|
|
4,357
|
|
|
11,821
|
|
|
880
|
|
|
51
|
|
|
5
|
|
|
989
|
|
|||||||
|
Corporate and Other operations
|
|
(570
|
)
|
|
550
|
|
|
16
|
|
|
0
|
|
|
0
|
|
|
635
|
|
|
(47
|
)
|
|||||||
|
Total Corporate and Other
|
|
(570
|
)
|
|
550
|
|
|
16
|
|
|
0
|
|
|
0
|
|
|
635
|
|
|
(47
|
)
|
|||||||
|
Total
|
|
48,630
|
|
|
11,958
|
|
|
26,616
|
|
|
3,585
|
|
|
82
|
|
|
1,302
|
|
|
1,631
|
|
|||||||
|
Reconciling items:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Realized investment gains (losses), net, and related adjustments
|
|
2,258
|
|
|
1
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|||||||
|
Charges related to realized investment gains (losses), net
|
|
(31
|
)
|
|
0
|
|
|
39
|
|
|
191
|
|
|
0
|
|
|
0
|
|
|
452
|
|
|||||||
|
Investment gains (losses) on trading account assets supporting insurance liabilities, net
|
|
(524
|
)
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|||||||
|
Change in experience-rated contractholder liabilities due to assets value changes
|
|
0
|
|
|
0
|
|
|
0
|
|
|
(433
|
)
|
|
0
|
|
|
0
|
|
|
0
|
|
|||||||
|
Divested businesses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Closed Block division(1)
|
|
6,160
|
|
|
2,653
|
|
|
3,365
|
|
|
135
|
|
|
2,130
|
|
|
1
|
|
|
37
|
|
|||||||
|
Other divested businesses
|
|
638
|
|
|
217
|
|
|
607
|
|
|
1
|
|
|
0
|
|
|
3
|
|
|
0
|
|
|||||||
|
Equity in earnings of operating joint ventures and earnings attributable to noncontrolling interests
|
|
(12
|
)
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|||||||
|
Total per Consolidated Statements of Operations
|
|
$
|
57,119
|
|
|
$
|
14,829
|
|
|
$
|
30,627
|
|
|
$
|
3,479
|
|
|
$
|
2,212
|
|
|
$
|
1,306
|
|
|
$
|
2,120
|
|
|
(1)
|
As a result of the Class B Repurchase, for the year ended December 31, 2015, the Closed Block, along with certain related assets and liabilities, comprises the Closed Block division, which is accounted for as a divested business that is reported separately from the divested businesses that are included in Corporate and Other operations.
|
|
|
|
Year Ended December 31, 2014
|
||||||||||||||||||||||||||
|
|
|
Revenues
|
|
Net
Investment
Income
|
|
Policyholders’
Benefits
|
|
Interest
Credited to
Policyholders’
Account
Balances
|
|
Dividends to
Policyholders
|
|
Interest
Expense
|
|
Amortization
of DAC
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
|
|
(in millions)
|
||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Individual Annuities
|
|
$
|
4,710
|
|
|
$
|
630
|
|
|
$
|
481
|
|
|
$
|
429
|
|
|
$
|
0
|
|
|
$
|
107
|
|
|
$
|
543
|
|
|
Retirement
|
|
12,077
|
|
|
4,209
|
|
|
8,336
|
|
|
1,476
|
|
|
0
|
|
|
25
|
|
|
31
|
|
|||||||
|
Asset Management
|
|
2,840
|
|
|
120
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
10
|
|
|
20
|
|
|||||||
|
Total U.S. Retirement Solutions and Investment Management division
|
|
19,627
|
|
|
4,959
|
|
|
8,817
|
|
|
1,905
|
|
|
0
|
|
|
142
|
|
|
594
|
|
|||||||
|
Individual Life
|
|
5,226
|
|
|
1,620
|
|
|
2,108
|
|
|
606
|
|
|
32
|
|
|
533
|
|
|
345
|
|
|||||||
|
Group Insurance
|
|
5,357
|
|
|
613
|
|
|
4,215
|
|
|
248
|
|
|
0
|
|
|
9
|
|
|
8
|
|
|||||||
|
Total U.S. Individual Life and Group Insurance division
|
|
10,583
|
|
|
2,233
|
|
|
6,323
|
|
|
854
|
|
|
32
|
|
|
542
|
|
|
353
|
|
|||||||
|
International Insurance
|
|
20,066
|
|
|
4,434
|
|
|
12,234
|
|
|
961
|
|
|
50
|
|
|
4
|
|
|
961
|
|
|||||||
|
Total International Insurance division
|
|
20,066
|
|
|
4,434
|
|
|
12,234
|
|
|
961
|
|
|
50
|
|
|
4
|
|
|
961
|
|
|||||||
|
Corporate and Other operations
|
|
(632
|
)
|
|
420
|
|
|
83
|
|
|
0
|
|
|
0
|
|
|
620
|
|
|
(55
|
)
|
|||||||
|
Total Corporate and Other
|
|
(632
|
)
|
|
420
|
|
|
83
|
|
|
0
|
|
|
0
|
|
|
620
|
|
|
(55
|
)
|
|||||||
|
Total
|
|
49,644
|
|
|
12,046
|
|
|
27,457
|
|
|
3,720
|
|
|
82
|
|
|
1,308
|
|
|
1,853
|
|
|||||||
|
Reconciling items:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Realized investment gains (losses), net, and related adjustments
|
|
(3,588
|
)
|
|
(5
|
)
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|||||||
|
Charges related to realized investment gains (losses), net
|
|
55
|
|
|
0
|
|
|
295
|
|
|
111
|
|
|
(1
|
)
|
|
0
|
|
|
83
|
|
|||||||
|
Investment gains (losses) on trading account assets supporting insurance liabilities, net
|
|
339
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|||||||
|
Change in experience-rated contractholder liabilities due to assets value changes
|
|
0
|
|
|
0
|
|
|
0
|
|
|
294
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|||||||
|
Divested businesses
|
|
762
|
|
|
208
|
|
|
509
|
|
|
2
|
|
|
0
|
|
|
3
|
|
|
0
|
|
|||||||
|
Equity in earnings of operating joint ventures and earnings attributable to noncontrolling interests
|
|
(13
|
)
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|||||||
|
Subtotal
|
|
47,199
|
|
|
12,249
|
|
|
28,261
|
|
|
4,127
|
|
|
81
|
|
|
1,311
|
|
|
1,936
|
|
|||||||
|
Closed Block Business(1)
|
|
6,906
|
|
|
3,007
|
|
|
3,326
|
|
|
136
|
|
|
2,635
|
|
|
597
|
|
|
37
|
|
|||||||
|
Total per Consolidated Statements of Operations
|
|
$
|
54,105
|
|
|
$
|
15,256
|
|
|
$
|
31,587
|
|
|
$
|
4,263
|
|
|
$
|
2,716
|
|
|
$
|
1,908
|
|
|
$
|
1,973
|
|
|
(1)
|
Reflects the existence of two classes of common stock and the separate reporting of the Company’s former Financial Services Businesses and the Closed Block Business for the year ended December 31, 2014.
|
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
|
|
|
|
|
|
|
||||||
|
|
|
(in millions)
|
||||||||||
|
Domestic operations
|
|
$
|
36,079
|
|
|
$
|
36,151
|
|
|
$
|
35,793
|
|
|
Foreign operations, total
|
|
$
|
22,700
|
|
|
$
|
20,968
|
|
|
$
|
18,312
|
|
|
Foreign operations, Japan
|
|
$
|
19,768
|
|
|
$
|
18,177
|
|
|
$
|
15,461
|
|
|
Foreign operations, Korea
|
|
$
|
1,439
|
|
|
$
|
1,462
|
|
|
$
|
1,484
|
|
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
|
|
|
|
|
|
|
||||||
|
|
|
(in millions)
|
||||||||||
|
Asset Management segment intersegment revenues
|
|
$
|
682
|
|
|
$
|
682
|
|
|
$
|
645
|
|
|
23.
|
COMMITMENTS AND GUARANTEES, CONTINGENT LIABILITIES AND LITIGATION AND REGULATORY MATTERS
|
|
|
|
Operating and
Capital Leases(1)
|
|
Sub-lease
Income
|
||||
|
|
|
|
|
|
||||
|
|
|
(in millions)
|
||||||
|
2017
|
|
$
|
150
|
|
|
$
|
(1
|
)
|
|
2018
|
|
129
|
|
|
0
|
|
||
|
2019
|
|
106
|
|
|
0
|
|
||
|
2020
|
|
80
|
|
|
0
|
|
||
|
2021
|
|
68
|
|
|
0
|
|
||
|
2022 and thereafter
|
|
185
|
|
|
0
|
|
||
|
Total
|
|
$
|
718
|
|
|
$
|
(1
|
)
|
|
(1)
|
Future minimum lease payments under capital leases were $
24
million as of December 31,
2016
.
|
|
|
|
As of December 31,
|
||||||
|
|
|
2016
|
|
2015
|
||||
|
|
|
|
|
|
||||
|
|
|
(in millions)
|
||||||
|
Total outstanding mortgage loan commitments
|
|
$
|
1,984
|
|
|
$
|
2,272
|
|
|
Portion of commitment where prearrangement to sell to investor exists
|
|
$
|
454
|
|
|
$
|
721
|
|
|
|
|
As of December 31,
|
||||||
|
|
|
2016
|
|
2015
|
||||
|
|
|
|
|
|
||||
|
|
|
(in millions)
|
||||||
|
Expected to be funded from the general account and other operations outside the separate accounts(1)
|
|
$
|
6,002
|
|
|
$
|
3,787
|
|
|
Expected to be funded from separate accounts
|
|
$
|
374
|
|
|
$
|
92
|
|
|
(1)
|
Includes a remaining commitment of
$121 million
and
$152 million
at December 31,
2016
and
2015
, respectively, related to the Company’s agreement to co-invest with the Fosun Group in a private equity fund, managed by the Fosun Group, for the Chinese marketplace.
|
|
|
|
As of December 31,
|
||||||
|
|
|
2016
|
|
2015
|
||||
|
|
|
|
|
|
||||
|
|
|
(in millions)
|
||||||
|
Indemnification provided to mutual fund, trust fund, and insurance company separate account clients for securities lending
|
|
$
|
5,352
|
|
|
$
|
15,084
|
|
|
Fair value of related collateral associated with above indemnifications
|
|
$
|
5,465
|
|
|
$
|
15,508
|
|
|
Accrued liability associated with guarantee
|
|
$
|
0
|
|
|
$
|
0
|
|
|
|
|
As of December 31,
|
||||||
|
|
|
2016
|
|
2015
|
||||
|
|
|
|
|
|
||||
|
|
|
(in millions)
|
||||||
|
Guaranteed value of third parties’ assets
|
|
$
|
77,197
|
|
|
$
|
72,585
|
|
|
Fair value of collateral supporting these assets
|
|
$
|
77,760
|
|
|
$
|
73,634
|
|
|
Asset associated with guarantee, carried at fair value
|
|
$
|
5
|
|
|
$
|
7
|
|
|
|
|
As of December 31,
|
||||||
|
|
|
2016
|
|
2015
|
||||
|
|
|
|
|
|
||||
|
|
|
(in millions)
|
||||||
|
Maximum exposure under indemnification agreements for mortgage loans serviced by the Company
|
|
$
|
1,371
|
|
|
$
|
1,200
|
|
|
First-loss exposure portion of above
|
|
$
|
416
|
|
|
$
|
371
|
|
|
Accrued liability associated with guarantees
|
|
$
|
13
|
|
|
$
|
14
|
|
|
|
|
As of December 31,
|
||||||
|
|
|
2016
|
|
2015
|
||||
|
|
|
|
|
|
||||
|
|
|
(in millions)
|
||||||
|
Other guarantees where amount can be determined
|
|
$
|
58
|
|
|
$
|
324
|
|
|
Accrued liability for other guarantees and indemnifications
|
|
$
|
3
|
|
|
$
|
4
|
|
|
|
|
As of December 31,
|
||||||
|
|
|
2016
|
|
2015
|
||||
|
|
|
|
|
|
||||
|
|
|
(in millions)
|
||||||
|
Other assets:
|
|
|
|
|
||||
|
Premium tax offset for future undiscounted assessments
|
|
$
|
78
|
|
|
$
|
79
|
|
|
Premium tax offsets currently available for paid assessments
|
|
6
|
|
|
6
|
|
||
|
Total
|
|
$
|
84
|
|
|
$
|
85
|
|
|
Other liabilities:
|
|
|
|
|
||||
|
Insolvency assessments
|
|
$
|
52
|
|
|
$
|
39
|
|
|
24.
|
QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)
|
|
|
|
Three Months Ended
|
||||||||||||||
|
|
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
||||||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
(in millions, except per share amounts)
|
||||||||||||||
|
2016
|
|
|
|
|
|
|
|
|
||||||||
|
Total revenues
|
|
$
|
14,329
|
|
|
$
|
14,439
|
|
|
$
|
16,961
|
|
|
$
|
13,050
|
|
|
Total benefits and expenses
|
|
12,597
|
|
|
13,098
|
|
|
14,646
|
|
|
12,733
|
|
||||
|
Income (loss) from continuing operations
|
|
1,369
|
|
|
925
|
|
|
1,832
|
|
|
293
|
|
||||
|
Income (loss) from discontinued operations
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
||||
|
Net income (loss)
|
|
1,369
|
|
|
925
|
|
|
1,832
|
|
|
293
|
|
||||
|
Less: Income attributable to noncontrolling interests
|
|
33
|
|
|
4
|
|
|
5
|
|
|
9
|
|
||||
|
Net income (loss) attributable to Prudential Financial, Inc.
|
|
$
|
1,336
|
|
|
$
|
921
|
|
|
$
|
1,827
|
|
|
$
|
284
|
|
|
Basic earnings per share—Common Stock(1):
|
|
|
|
|
|
|
|
|
||||||||
|
Income (loss) from continuing operations attributable to Prudential Financial, Inc.
|
|
$
|
2.97
|
|
|
$
|
2.06
|
|
|
$
|
4.14
|
|
|
$
|
0.65
|
|
|
Income (loss) from discontinued operations, net of taxes
|
|
0.00
|
|
|
0.00
|
|
|
0.00
|
|
|
0.00
|
|
||||
|
Net income (loss) attributable to Prudential Financial, Inc.
|
|
$
|
2.97
|
|
|
$
|
2.06
|
|
|
$
|
4.14
|
|
|
$
|
0.65
|
|
|
Diluted earnings per share—Common Stock(1):
|
|
|
|
|
|
|
|
|
||||||||
|
Income (loss) from continuing operations attributable to Prudential Financial, Inc.
|
|
$
|
2.93
|
|
|
$
|
2.04
|
|
|
$
|
4.07
|
|
|
$
|
0.65
|
|
|
Income (loss) from discontinued operations, net of taxes
|
|
0.00
|
|
|
0.00
|
|
|
0.00
|
|
|
0.00
|
|
||||
|
Net income (loss) attributable to Prudential Financial, Inc.
|
|
$
|
2.93
|
|
|
$
|
2.04
|
|
|
$
|
4.07
|
|
|
$
|
0.65
|
|
|
2015
|
|
|
|
|
|
|
|
|
||||||||
|
Total revenues
|
|
$
|
15,552
|
|
|
$
|
13,712
|
|
|
$
|
13,599
|
|
|
$
|
14,256
|
|
|
Total benefits and expenses
|
|
12,804
|
|
|
11,583
|
|
|
11,550
|
|
|
13,413
|
|
||||
|
Income (loss) from continuing operations
|
|
2,046
|
|
|
1,459
|
|
|
1,467
|
|
|
740
|
|
||||
|
Income (loss) from discontinued operations
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
||||
|
Net income (loss)
|
|
2,046
|
|
|
1,459
|
|
|
1,467
|
|
|
740
|
|
||||
|
Less: Income attributable to noncontrolling interests
|
|
10
|
|
|
53
|
|
|
2
|
|
|
5
|
|
||||
|
Net income (loss) attributable to Prudential Financial, Inc.
|
|
$
|
2,036
|
|
|
$
|
1,406
|
|
|
$
|
1,465
|
|
|
$
|
735
|
|
|
Basic earnings per share—Common Stock(1):
|
|
|
|
|
|
|
|
|
||||||||
|
Income (loss) from continuing operations attributable to Prudential Financial, Inc.
|
|
$
|
4.44
|
|
|
$
|
3.07
|
|
|
$
|
3.22
|
|
|
$
|
1.62
|
|
|
Income (loss) from discontinued operations, net of taxes
|
|
0.00
|
|
|
0.00
|
|
|
0.00
|
|
|
0.00
|
|
||||
|
Net income (loss) attributable to Prudential Financial, Inc.
|
|
$
|
4.44
|
|
|
$
|
3.07
|
|
|
$
|
3.22
|
|
|
$
|
1.62
|
|
|
Diluted earnings per share—Common Stock(1):
|
|
|
|
|
|
|
|
|
||||||||
|
Income (loss) from continuing operations attributable to Prudential Financial, Inc.
|
|
$
|
4.37
|
|
|
$
|
3.03
|
|
|
$
|
3.16
|
|
|
$
|
1.60
|
|
|
Income (loss) from discontinued operations, net of taxes
|
|
0.00
|
|
|
0.00
|
|
|
0.00
|
|
|
0.00
|
|
||||
|
Net income (loss) attributable to Prudential Financial, Inc.
|
|
$
|
4.37
|
|
|
$
|
3.03
|
|
|
$
|
3.16
|
|
|
$
|
1.60
|
|
|
(1)
|
Quarterly earnings per share amounts may not add to the full year amounts due to the averaging of shares.
|
|
25.
|
SUBSEQUENT EVENTS
|
|
ITEM 10.
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|
|
ITEM 11.
|
EXECUTIVE COMPENSATION
|
|
|
(a)
|
|
|
(b)
|
|
|
(c)
|
||||
|
|
Number of securities to be issued upon exercise of outstanding options, warrants and rights
|
|
|
Weighted-average exercise price of outstanding options, warrants and rights
|
|
|
Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in (a))
|
||||
|
Equity compensation plans approved by security holders—Omnibus Plan
|
12,921,541
|
|
(1)
|
|
$
|
63.60
|
|
(2)
|
|
26,157,173
|
|
|
Equity compensation plans approved by security holders—Director Plan
|
147,691
|
|
|
|
|
|
|
50,212
|
|
||
|
Equity compensation plans approved by security holders—PSPP(3)
|
|
|
|
|
|
|
14,694,735
|
|
|||
|
Total equity compensation plans approved by security holders
|
13,069,232
|
|
|
|
|
|
|
40,902,120
|
|
||
|
Equity compensation plans not approved by security holders
|
0
|
|
|
|
|
|
|
0
|
|
||
|
Grand Total
|
13,069,232
|
|
|
|
|
|
|
40,902,120
|
|
||
|
(1)
|
Represents 6,768,728 outstanding Options, 5,018,962 outstanding Restricted Units and 1,133,851 outstanding Performance Shares as of
December 31, 2016
under our Omnibus Plan. The number of Performance Shares represents the number of shares that would be received based on maximum performance, reduced for cancellations and releases through
December 31, 2016
. The actual number of shares the Compensation Committee will award at the end of each performance period will range between 0% and 125% of the target number of units granted, based upon a measure of the reported performance of the Company relative to stated goals. The outstanding Performance Units will be settled only in cash and do not reduce the number of shares authorized under the Omnibus Plan, and so they are not reflected in this table.
|
|
(2)
|
Represents the weighted average exercise price of the Options disclosed in column (a). The weighted average remaining contractual term of these Options is 5.62 years.
|
|
(3)
|
The Prudential Financial, Inc. Employee Stock Purchase Plan is a qualified Employee Stock Purchase Plan under Section 423 of the Code, pursuant to which up to 26,367,235 shares of Common Stock were authorized for issuance, all of which have been registered on Form S-8. Under the plan, employees may purchase shares based upon quarterly offering periods at an amount equal to the lesser of (1) 85% of the closing market price of the Common Stock on the first day of the quarterly offering period, or (2) 85% of the closing market price of the Common Stock on the last day of the quarterly offering period.
|
|
ITEM 13.
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
|
|
ITEM 14.
|
PRINCIPAL ACCOUNTANT FEES AND SERVICES
|
|
ITEM 15.
|
EXHIBITS, FINANCIAL STATEMENT SCHEDULES
|
|
|
|
Page
Number
|
|
1.
|
||
|
2.
|
Financial Statement Schedules:
|
|
|
|
||
|
|
||
|
|
||
|
|
||
|
|
||
|
|
Any remaining schedules are omitted because they are inapplicable.
|
|
|
Type of Investment
|
|
Cost(1)
|
|
Fair
Value
|
|
Amount
shown in the
Balance Sheet
|
||||||
|
Fixed maturities, available-for-sale:
|
|
|
|
|
|
|
||||||
|
Bonds:
|
|
|
|
|
|
|
||||||
|
United States government and government agencies and authorities
|
|
$
|
21,505
|
|
|
$
|
23,784
|
|
|
$
|
23,784
|
|
|
States, municipalities and political subdivisions
|
|
9,060
|
|
|
9,692
|
|
|
9,692
|
|
|||
|
Foreign governments
|
|
79,862
|
|
|
96,256
|
|
|
96,256
|
|
|||
|
Asset-backed securities
|
|
11,759
|
|
|
11,935
|
|
|
11,935
|
|
|||
|
Residential mortgage-backed securities
|
|
4,308
|
|
|
4,532
|
|
|
4,532
|
|
|||
|
Commercial mortgage-backed securities
|
|
12,589
|
|
|
12,704
|
|
|
12,704
|
|
|||
|
Public utilities
|
|
23,101
|
|
|
24,606
|
|
|
24,606
|
|
|||
|
Certificates of deposit
|
|
31
|
|
|
30
|
|
|
30
|
|
|||
|
All other corporate bonds
|
|
129,866
|
|
|
137,341
|
|
|
137,341
|
|
|||
|
Redeemable preferred stock
|
|
500
|
|
|
539
|
|
|
539
|
|
|||
|
Total fixed maturities, available-for-sale
|
|
$
|
292,581
|
|
|
$
|
321,419
|
|
|
$
|
321,419
|
|
|
Fixed maturities, held-to-maturity:
|
|
|
|
|
|
|
||||||
|
Bonds:
|
|
|
|
|
|
|
||||||
|
Foreign governments
|
|
$
|
839
|
|
|
$
|
1,101
|
|
|
$
|
839
|
|
|
Residential mortgage-backed securities
|
|
573
|
|
|
616
|
|
|
573
|
|
|||
|
Commercial mortgage-backed securities
|
|
0
|
|
|
0
|
|
|
0
|
|
|||
|
All other corporate bonds
|
|
732
|
|
|
807
|
|
|
732
|
|
|||
|
Total fixed maturities, held-to-maturity
|
|
$
|
2,144
|
|
|
$
|
2,524
|
|
|
$
|
2,144
|
|
|
Equity securities:
|
|
|
|
|
|
|
||||||
|
Common Stocks:
|
|
|
|
|
|
|
||||||
|
Public utilities
|
|
$
|
108
|
|
|
$
|
138
|
|
|
$
|
138
|
|
|
Banks, trust and insurance companies
|
|
1,182
|
|
|
1,852
|
|
|
1,852
|
|
|||
|
Industrial, miscellaneous and other
|
|
5,845
|
|
|
7,745
|
|
|
7,745
|
|
|||
|
Nonredeemable preferred stocks
|
|
14
|
|
|
13
|
|
|
13
|
|
|||
|
Total equity securities, available-for-sale
|
|
$
|
7,149
|
|
|
$
|
9,748
|
|
|
$
|
9,748
|
|
|
Trading account assets supporting insurance liabilities(2)(3)
|
|
$
|
21,840
|
|
|
|
|
$
|
21,840
|
|
||
|
Other trading account assets(2)
|
|
5,764
|
|
|
|
|
5,764
|
|
||||
|
Commercial mortgage and other loans(4)
|
|
52,779
|
|
|
|
|
52,779
|
|
||||
|
Policy loans
|
|
11,755
|
|
|
|
|
11,755
|
|
||||
|
Short-term investments(5)
|
|
7,508
|
|
|
|
|
7,508
|
|
||||
|
Other long-term investments
|
|
11,283
|
|
|
|
|
11,283
|
|
||||
|
Total investments
|
|
$
|
412,803
|
|
|
|
|
$
|
444,240
|
|
||
|
(1)
|
Original cost of equities reduced by impairment and, as to fixed maturities, original cost reduced by repayments and impairments and adjusted for amortization of premiums and accretion of discounts.
|
|
(2)
|
At fair value.
|
|
(3)
|
See Note 4 to the Consolidated Financial Statements for the composition of the Company’s “Trading account assets supporting insurance liabilities, at fair value.”
|
|
(4)
|
At carrying value, net of allowance for losses. Includes commercial mortgage and other collateralized loans of
$52,147 million
and uncollateralized loans of
$632 million
.
|
|
(5)
|
“Short-term investments” include securities purchased under agreements to resell.
|
|
|
|
2016
|
|
2015
|
||||
|
ASSETS
|
|
|
|
|
||||
|
Investment contracts from subsidiaries
|
|
$
|
1
|
|
|
$
|
1
|
|
|
Fixed maturities, available for sale, at fair value (amortized cost: 2016- $1,105; 2015- $0)
|
|
1,071
|
|
|
0
|
|
||
|
Other investments
|
|
3,215
|
|
|
1,691
|
|
||
|
Total investments
|
|
4,287
|
|
|
1,692
|
|
||
|
Cash and cash equivalents
|
|
1,116
|
|
|
9,437
|
|
||
|
Due from subsidiaries
|
|
1,836
|
|
|
1,723
|
|
||
|
Loans receivable from subsidiaries
|
|
6,719
|
|
|
6,122
|
|
||
|
Investment in subsidiaries
|
|
54,422
|
|
|
50,625
|
|
||
|
Property, plant and equipment
|
|
559
|
|
|
579
|
|
||
|
Other assets(1)
|
|
384
|
|
|
595
|
|
||
|
TOTAL ASSETS
|
|
$
|
69,323
|
|
|
$
|
70,773
|
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
||||
|
LIABILITIES
|
|
|
|
|
||||
|
Due to subsidiaries
|
|
$
|
2,585
|
|
|
$
|
7,664
|
|
|
Loans payable to subsidiaries
|
|
4,295
|
|
|
3,248
|
|
||
|
Short-term debt
|
|
535
|
|
|
831
|
|
||
|
Long-term debt(1)
|
|
15,389
|
|
|
16,354
|
|
||
|
Income taxes payable
|
|
0
|
|
|
0
|
|
||
|
Other liabilities
|
|
656
|
|
|
786
|
|
||
|
Total liabilities
|
|
23,460
|
|
|
28,883
|
|
||
|
EQUITY
|
|
|
|
|
||||
|
Preferred Stock ($.01 par value; 10,000,000 shares authorized; none issued)
|
|
0
|
|
|
0
|
|
||
|
Common Stock ($.01 par value; 1,500,000,000 shares authorized; 660,111,339 shares issued as of both December 31, 2016 and 2015)
|
|
6
|
|
|
6
|
|
||
|
Additional paid-in capital
|
|
24,606
|
|
|
24,482
|
|
||
|
Common Stock held in treasury, at cost (230,537,166 and 213,009,970 shares as of December 31, 2016 and 2015, respectively)
|
|
(15,316
|
)
|
|
(13,814
|
)
|
||
|
Accumulated other comprehensive income (loss)
|
|
14,621
|
|
|
12,285
|
|
||
|
Retained earnings
|
|
21,946
|
|
|
18,931
|
|
||
|
Total equity
|
|
45,863
|
|
|
41,890
|
|
||
|
TOTAL LIABILITIES AND EQUITY
|
|
$
|
69,323
|
|
|
$
|
70,773
|
|
|
(1)
|
Prior period amounts are presented on a basis consistent with the current period presentation, reflecting the adoption of ASU 2015-03. See Note 2 to the Consolidated Financial Statements for additional information.
|
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
REVENUES
|
|
|
|
|
|
|
||||||
|
Net investment income
|
|
$
|
61
|
|
|
$
|
19
|
|
|
$
|
7
|
|
|
Realized investment gains (losses), net
|
|
(126
|
)
|
|
(98
|
)
|
|
(793
|
)
|
|||
|
Affiliated interest revenue
|
|
353
|
|
|
353
|
|
|
417
|
|
|||
|
Other income (loss)
|
|
(2
|
)
|
|
28
|
|
|
146
|
|
|||
|
Total revenues
|
|
286
|
|
|
302
|
|
|
(223
|
)
|
|||
|
EXPENSES
|
|
|
|
|
|
|
||||||
|
General and administrative expenses
|
|
101
|
|
|
170
|
|
|
59
|
|
|||
|
Interest expense
|
|
1,106
|
|
|
1,080
|
|
|
1,075
|
|
|||
|
Total expenses
|
|
1,207
|
|
|
1,250
|
|
|
1,134
|
|
|||
|
LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES AND EQUITY IN EARNINGS OF SUBSIDIARIES
|
|
(921
|
)
|
|
(948
|
)
|
|
(1,357
|
)
|
|||
|
Total income tax expense (benefit)
|
|
(320
|
)
|
|
(396
|
)
|
|
(492
|
)
|
|||
|
LOSS FROM CONTINUING OPERATIONS BEFORE EQUITY IN EARNINGS OF SUBSIDIARIES
|
|
(601
|
)
|
|
(552
|
)
|
|
(865
|
)
|
|||
|
Equity in earnings of subsidiaries
|
|
4,969
|
|
|
6,194
|
|
|
2,246
|
|
|||
|
INCOME (LOSS) FROM CONTINUING OPERATIONS
|
|
4,368
|
|
|
5,642
|
|
|
1,381
|
|
|||
|
Income (loss) from discontinued operations, net of taxes
|
|
0
|
|
|
0
|
|
|
0
|
|
|||
|
NET INCOME (LOSS)
|
|
$
|
4,368
|
|
|
$
|
5,642
|
|
|
$
|
1,381
|
|
|
Other Comprehensive Income (loss)
|
|
2,336
|
|
|
(3,765
|
)
|
|
7,369
|
|
|||
|
TOTAL COMPREHENSIVE INCOME (LOSS)
|
|
$
|
6,704
|
|
|
$
|
1,877
|
|
|
$
|
8,750
|
|
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
CASH FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
|
|
|
||||||
|
Net income (loss)
|
|
$
|
4,368
|
|
|
$
|
5,642
|
|
|
$
|
1,381
|
|
|
Adjustments to reconcile net income to cash provided by operating activities:
|
|
|
|
|
|
|
||||||
|
Equity in earnings of subsidiaries
|
|
(4,969
|
)
|
|
(6,194
|
)
|
|
(2,246
|
)
|
|||
|
Realized investment (gains) losses, net
|
|
126
|
|
|
98
|
|
|
793
|
|
|||
|
Dividends received from subsidiaries
|
|
2,828
|
|
|
4,557
|
|
|
2,218
|
|
|||
|
Property, plant and equipment
|
|
(13
|
)
|
|
(579
|
)
|
|
0
|
|
|||
|
Change in:
|
|
|
|
|
|
|
||||||
|
Due to/from subsidiaries, net
|
|
(5,109
|
)
|
|
(493
|
)
|
|
5,718
|
|
|||
|
Other, operating
|
|
167
|
|
|
(380
|
)
|
|
647
|
|
|||
|
Cash flows from (used in) operating activities
|
|
(2,602
|
)
|
|
2,651
|
|
|
8,511
|
|
|||
|
CASH FLOWS FROM INVESTING ACTIVITIES
|
|
|
|
|
|
|
||||||
|
Proceeds from the sale/maturity of:
|
|
|
|
|
|
|
||||||
|
Short-term investments
|
|
17,575
|
|
|
13,700
|
|
|
10,207
|
|
|||
|
Payments for the purchase of:
|
|
|
|
|
|
|
||||||
|
Fixed maturities, available for sale
|
|
(1,106
|
)
|
|
0
|
|
|
0
|
|
|||
|
Short-term investments
|
|
(19,111
|
)
|
|
(13,002
|
)
|
|
(11,394
|
)
|
|||
|
Capital contributions to subsidiaries
|
|
(2,018
|
)
|
|
(2,545
|
)
|
|
(3,065
|
)
|
|||
|
Returns of capital contributions from subsidiaries
|
|
2,755
|
|
|
75
|
|
|
258
|
|
|||
|
Loans to subsidiaries, net of maturities
|
|
(596
|
)
|
|
2,056
|
|
|
925
|
|
|||
|
Other, investing
|
|
1
|
|
|
244
|
|
|
21
|
|
|||
|
Cash flows from (used in) investing activities
|
|
(2,500
|
)
|
|
528
|
|
|
(3,048
|
)
|
|||
|
CASH FLOWS FROM FINANCING ACTIVITIES
|
|
|
|
|
|
|
||||||
|
Cash dividends paid on Common Stock
|
|
(1,300
|
)
|
|
(1,117
|
)
|
|
(1,008
|
)
|
|||
|
Cash dividends paid on Class B Stock
|
|
0
|
|
|
0
|
|
|
(19
|
)
|
|||
|
Common Stock acquired
|
|
(2,000
|
)
|
|
(1,664
|
)
|
|
(999
|
)
|
|||
|
Common Stock reissued for exercise of stock options
|
|
426
|
|
|
209
|
|
|
269
|
|
|||
|
Proceeds from the issuance of debt (maturities longer than 90 days)
|
|
30
|
|
|
1,332
|
|
|
2,063
|
|
|||
|
Repayments of debt (maturities longer than 90 days)
|
|
(1,319
|
)
|
|
(2,404
|
)
|
|
(1,659
|
)
|
|||
|
Repayments of loans from subsidiaries
|
|
(390
|
)
|
|
(102
|
)
|
|
(241
|
)
|
|||
|
Proceeds from loans payable to subsidiaries
|
|
1,405
|
|
|
1,316
|
|
|
558
|
|
|||
|
Net change in financing arrangements (maturities of 90 days or less)
|
|
14
|
|
|
8
|
|
|
(94
|
)
|
|||
|
Excess tax benefits from share-based payment arrangements
|
|
10
|
|
|
3
|
|
|
7
|
|
|||
|
Other, financing
|
|
(95
|
)
|
|
(15
|
)
|
|
(18
|
)
|
|||
|
Cash flows from (used in) financing activities
|
|
(3,219
|
)
|
|
(2,434
|
)
|
|
(1,141
|
)
|
|||
|
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
|
|
(8,321
|
)
|
|
745
|
|
|
4,322
|
|
|||
|
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR
|
|
9,437
|
|
|
8,692
|
|
|
4,370
|
|
|||
|
CASH AND CASH EQUIVALENTS, END OF YEAR
|
|
$
|
1,116
|
|
|
$
|
9,437
|
|
|
$
|
8,692
|
|
|
|
|
|
|
|
|
|
||||||
|
SUPPLEMENTAL CASH FLOW INFORMATION
|
|
|
|
|
|
|
||||||
|
Cash paid during the period for interest
|
|
$
|
1,002
|
|
|
$
|
1,048
|
|
|
$
|
1,036
|
|
|
Cash paid (refunds received) during the period for taxes
|
|
$
|
(544
|
)
|
|
$
|
46
|
|
|
$
|
(1,231
|
)
|
|
|
|
|
|
|
|
|
||||||
|
NON-CASH TRANSACTIONS DURING THE YEAR
|
|
|
|
|
|
|
||||||
|
Non-cash capital contributions to subsidiaries
|
|
$
|
(4,158
|
)
|
|
$
|
1,453
|
|
|
$
|
100
|
|
|
Non-cash dividends from subsidiaries
|
|
$
|
4,142
|
|
|
$
|
1,335
|
|
|
$
|
650
|
|
|
Treasury Stock shares issued for stock-based compensation programs
|
|
$
|
115
|
|
|
$
|
115
|
|
|
$
|
100
|
|
|
|
|
|
|
|
December 31,
|
||||||
|
|
Maturity
Dates
|
|
Rate(2)
|
|
2016
|
|
2015(1)
|
||||
|
|
|
|
|
|
($ in millions)
|
||||||
|
Short-term debt:
|
|
|
|
|
|
|
|
||||
|
Commercial paper(3)
|
|
|
|
|
$
|
65
|
|
|
$
|
80
|
|
|
Current portion of long-term debt
|
|
|
|
|
470
|
|
|
751
|
|
||
|
Total short-term debt
|
|
|
|
|
$
|
535
|
|
|
$
|
831
|
|
|
Long-term debt:
|
|
|
|
|
|
|
|
||||
|
Fixed rate senior notes
|
2017-2045
|
|
2.30%-7.38%
|
|
$
|
9,064
|
|
|
$
|
10,035
|
|
|
Floating rate senior notes
|
2018-2020
|
|
1.14%-4.39%
|
|
508
|
|
|
508
|
|
||
|
Junior subordinated notes
|
2042-2068
|
|
5.20%-8.88%
|
|
5,817
|
|
|
5,811
|
|
||
|
Total long-term debt
|
|
|
|
|
$
|
15,389
|
|
|
$
|
16,354
|
|
|
(1)
|
Prior period has been revised to conform to current period presentation due to the adoption of ASU 2015-03 regarding debt issuance costs. For more information, see Note 2 to the Consolidated Financial Statements.
|
|
(2)
|
Ranges of interest rates are for the year ended December 31,
2016
.
|
|
(3)
|
The weighted average interest rate on outstanding commercial paper was
0.63%
and
0.4%
at December 31,
2016
and
2015
, respectively.
|
|
|
Calendar Year
|
|
|
||||||||||||||||||||
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
2022 and
thereafter
|
|
Total
|
||||||||||||
|
|
($ in millions)
|
||||||||||||||||||||||
|
Long-term debt
|
$
|
831
|
|
|
$
|
1,100
|
|
|
$
|
1,179
|
|
|
$
|
400
|
|
|
$
|
11,879
|
|
|
$
|
15,389
|
|
|
|
|
2016
|
|
2015
|
|
2014(1)
|
||||||
|
|
|
|
|
|
|
|
||||||
|
|
|
(in millions)
|
||||||||||
|
Pruco Reinsurance
|
|
$
|
1,298
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
Prudential Annuities Holding Company
|
|
98
|
|
|
102
|
|
|
102
|
|
|||
|
International Insurance and Investments Holding Companies
|
|
1,171
|
|
|
1,818
|
|
|
966
|
|
|||
|
Prudential Insurance Company of America(2)
|
|
900
|
|
|
1,950
|
|
|
400
|
|
|||
|
Prudential Asset Management Holding Company
|
|
746
|
|
|
266
|
|
|
578
|
|
|||
|
Prudential Annuities Life Assurance Corporation
|
|
1,140
|
|
|
450
|
|
|
342
|
|
|||
|
Other Holding Companies
|
|
231
|
|
|
46
|
|
|
88
|
|
|||
|
Total
|
|
$
|
5,584
|
|
|
$
|
4,632
|
|
|
$
|
2,476
|
|
|
(1)
|
Amounts for International Insurance and Investments Holding Companies, Prudential Asset Management Holding Company and Other Holding Companies have been revised to correct previously reported amounts of
$526 million
,
$588 million
and
$620 million
, respectively.
|
|
(2)
|
For periods ending December 31, 2015 and 2014, the amounts presented were passed through from Prudential Insurance to Prudential Holdings, LLC., which is now dissolved.
|
|
Segment
|
Deferred
Policy
Acquisition
Costs
|
|
Future
Policy
Benefits,
Losses,
Claims,
Expenses
|
|
Unearned
Premiums
|
|
Other
Policy Claims
and Benefits
Payable
|
|
Premiums,
Policy
Charges
and Fee
Income
|
|
Net
Investment
Income
|
|
Benefits,
Claims,
Losses
and
Settlement
Expenses
|
|
Amortization
of DAC
|
|
Other
Operating
Expenses
|
||||||||||||||||||
|
Individual Annuities
|
$
|
4,871
|
|
|
$
|
10,311
|
|
|
$
|
0
|
|
|
$
|
8,601
|
|
|
$
|
2,721
|
|
|
$
|
700
|
|
|
$
|
614
|
|
|
$
|
462
|
|
|
$
|
1,749
|
|
|
Retirement
|
132
|
|
|
55,661
|
|
|
0
|
|
|
49,770
|
|
|
7,808
|
|
|
4,275
|
|
|
10,958
|
|
|
124
|
|
|
1,031
|
|
|||||||||
|
Asset Management
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
80
|
|
|
0
|
|
|
15
|
|
|
2,095
|
|
|||||||||
|
U.S. Retirement Solutions and Investment Management division
|
5,003
|
|
|
65,972
|
|
|
0
|
|
|
58,371
|
|
|
10,529
|
|
|
5,055
|
|
|
11,572
|
|
|
601
|
|
|
4,875
|
|
|||||||||
|
Individual Life
|
5,279
|
|
|
12,057
|
|
|
0
|
|
|
25,021
|
|
|
2,941
|
|
|
1,815
|
|
|
3,414
|
|
|
216
|
|
|
1,929
|
|
|||||||||
|
Group Insurance
|
175
|
|
|
4,710
|
|
|
220
|
|
|
8,858
|
|
|
4,649
|
|
|
610
|
|
|
4,302
|
|
|
6
|
|
|
822
|
|
|||||||||
|
U.S. Individual Life and Group Insurance division
|
5,454
|
|
|
16,767
|
|
|
220
|
|
|
33,879
|
|
|
7,590
|
|
|
2,425
|
|
|
7,716
|
|
|
222
|
|
|
2,751
|
|
|||||||||
|
International Insurance
|
7,208
|
|
|
103,853
|
|
|
77
|
|
|
47,862
|
|
|
15,813
|
|
|
4,759
|
|
|
14,155
|
|
|
1,065
|
|
|
2,677
|
|
|||||||||
|
International Insurance division
|
7,208
|
|
|
103,853
|
|
|
77
|
|
|
47,862
|
|
|
15,813
|
|
|
4,759
|
|
|
14,155
|
|
|
1,065
|
|
|
2,677
|
|
|||||||||
|
Corporate and Other operations
|
(340
|
)
|
|
4,738
|
|
|
0
|
|
|
11
|
|
|
318
|
|
|
703
|
|
|
618
|
|
|
(48
|
)
|
|
1,069
|
|
|||||||||
|
Total PFI excluding Closed Block division
|
17,325
|
|
|
191,330
|
|
|
297
|
|
|
140,123
|
|
|
34,250
|
|
|
12,942
|
|
|
34,061
|
|
|
1,840
|
|
|
11,372
|
|
|||||||||
|
Closed Block division
|
336
|
|
|
49,281
|
|
|
0
|
|
|
10,793
|
|
|
2,620
|
|
|
2,578
|
|
|
5,357
|
|
|
37
|
|
|
407
|
|
|||||||||
|
Total
|
$
|
17,661
|
|
|
$
|
240,611
|
|
|
$
|
297
|
|
|
$
|
150,916
|
|
|
$
|
36,870
|
|
|
$
|
15,520
|
|
|
$
|
39,418
|
|
|
$
|
1,877
|
|
|
$
|
11,779
|
|
|
Segment
|
Deferred
Policy
Acquisition
Costs
|
|
Future
Policy
Benefits,
Losses,
Claims
Expenses
|
|
Unearned
Premiums
|
|
Other Policy
Claims and
Benefits
Payable
|
|
Premiums,
Policy
Charges
and
Fee Income
|
|
Net
Investment
Income
|
|
Benefits,
Claims,
Losses
and
Settlement
Expenses
|
|
Amortization of
DAC
|
|
Other
Operating
Expenses
|
||||||||||||||||||
|
Individual Annuities
|
$
|
4,915
|
|
|
$
|
10,486
|
|
|
$
|
0
|
|
|
$
|
8,720
|
|
|
$
|
2,823
|
|
|
$
|
594
|
|
|
$
|
864
|
|
|
$
|
940
|
|
|
$
|
1,757
|
|
|
Retirement
|
133
|
|
|
51,264
|
|
|
1,835
|
|
|
47,113
|
|
|
6,946
|
|
|
4,110
|
|
|
9,301
|
|
|
66
|
|
|
1,034
|
|
|||||||||
|
Asset Management
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
111
|
|
|
0
|
|
|
19
|
|
|
2,076
|
|
|||||||||
|
U.S. Retirement Solutions and Investment Management division
|
5,048
|
|
|
61,750
|
|
|
1,835
|
|
|
55,833
|
|
|
9,769
|
|
|
4,815
|
|
|
10,165
|
|
|
1,025
|
|
|
4,867
|
|
|||||||||
|
Individual Life
|
4,883
|
|
|
10,102
|
|
|
0
|
|
|
23,425
|
|
|
2,944
|
|
|
1,679
|
|
|
2,961
|
|
|
133
|
|
|
1,508
|
|
|||||||||
|
Group Insurance
|
181
|
|
|
4,745
|
|
|
206
|
|
|
8,569
|
|
|
4,468
|
|
|
573
|
|
|
4,129
|
|
|
6
|
|
|
837
|
|
|||||||||
|
U.S. Individual Life and Group Insurance division
|
5,064
|
|
|
14,847
|
|
|
206
|
|
|
31,994
|
|
|
7,412
|
|
|
2,252
|
|
|
7,090
|
|
|
139
|
|
|
2,345
|
|
|||||||||
|
International Insurance
|
6,554
|
|
|
91,357
|
|
|
574
|
|
|
43,828
|
|
|
14,311
|
|
|
4,383
|
|
|
12,809
|
|
|
987
|
|
|
2,396
|
|
|||||||||
|
International Insurance division
|
6,554
|
|
|
91,357
|
|
|
574
|
|
|
43,828
|
|
|
14,311
|
|
|
4,383
|
|
|
12,809
|
|
|
987
|
|
|
2,396
|
|
|||||||||
|
Corporate and Other operations
|
(321
|
)
|
|
4,276
|
|
|
0
|
|
|
3
|
|
|
332
|
|
|
726
|
|
|
624
|
|
|
(68
|
)
|
|
869
|
|
|||||||||
|
Total PFI excluding Closed Block division
|
16,345
|
|
|
172,230
|
|
|
2,615
|
|
|
131,658
|
|
|
31,824
|
|
|
12,176
|
|
|
30,688
|
|
|
2,083
|
|
|
10,477
|
|
|||||||||
|
Closed Block division
|
373
|
|
|
49,539
|
|
|
0
|
|
|
10,704
|
|
|
2,669
|
|
|
2,653
|
|
|
5,630
|
|
|
37
|
|
|
435
|
|
|||||||||
|
Total
|
$
|
16,718
|
|
|
$
|
221,769
|
|
|
$
|
2,615
|
|
|
$
|
142,362
|
|
|
$
|
34,493
|
|
|
$
|
14,829
|
|
|
$
|
36,318
|
|
|
$
|
2,120
|
|
|
$
|
10,912
|
|
|
Segment
|
Deferred
Policy
Acquisition
Costs
|
|
Future
Policy
Benefits,
Losses,
Claims,
Expenses
|
|
Unearned
Premiums
|
|
Other
Policy Claims
and Benefits
Payable
|
|
Premiums,
Policy
Charges
and Fee
Income
|
|
Net
Investment
Income
|
|
Benefits,
Claims,
Losses
and
Settlement
Expenses
|
|
Amortization of
DAC
|
|
Other
Operating
Expenses
|
||||||||||||||||||
|
Individual Annuities
|
$
|
5,376
|
|
|
$
|
10,220
|
|
|
$
|
0
|
|
|
$
|
8,693
|
|
|
$
|
2,785
|
|
|
$
|
615
|
|
|
$
|
1,017
|
|
|
$
|
603
|
|
|
$
|
1,791
|
|
|
Retirement
|
117
|
|
|
49,237
|
|
|
1,848
|
|
|
47,465
|
|
|
7,013
|
|
|
4,238
|
|
|
9,918
|
|
|
33
|
|
|
1,020
|
|
|||||||||
|
Asset Management
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
120
|
|
|
0
|
|
|
20
|
|
|
1,976
|
|
|||||||||
|
U.S. Retirement Solutions and Investment Management division
|
5,493
|
|
|
59,457
|
|
|
1,848
|
|
|
56,158
|
|
|
9,798
|
|
|
4,973
|
|
|
10,935
|
|
|
656
|
|
|
4,787
|
|
|||||||||
|
Individual Life
|
4,056
|
|
|
9,224
|
|
|
0
|
|
|
21,463
|
|
|
3,073
|
|
|
1,610
|
|
|
3,040
|
|
|
368
|
|
|
1,745
|
|
|||||||||
|
Group Insurance
|
177
|
|
|
4,925
|
|
|
201
|
|
|
8,342
|
|
|
4,626
|
|
|
610
|
|
|
4,468
|
|
|
8
|
|
|
863
|
|
|||||||||
|
U.S. Individual Life and Group Insurance division
|
4,233
|
|
|
14,149
|
|
|
201
|
|
|
29,805
|
|
|
7,699
|
|
|
2,220
|
|
|
7,508
|
|
|
376
|
|
|
2,608
|
|
|||||||||
|
International Insurance
|
6,156
|
|
|
87,744
|
|
|
543
|
|
|
44,977
|
|
|
14,961
|
|
|
4,434
|
|
|
13,432
|
|
|
962
|
|
|
2,608
|
|
|||||||||
|
International Insurance division
|
6,156
|
|
|
87,744
|
|
|
543
|
|
|
44,977
|
|
|
14,961
|
|
|
4,434
|
|
|
13,432
|
|
|
962
|
|
|
2,608
|
|
|||||||||
|
Corporate and Other operations
|
(321
|
)
|
|
3,961
|
|
|
0
|
|
|
18
|
|
|
310
|
|
|
622
|
|
|
594
|
|
|
(58
|
)
|
|
773
|
|
|||||||||
|
Total Financial Services Businesses
|
15,561
|
|
|
165,311
|
|
|
2,592
|
|
|
130,958
|
|
|
32,768
|
|
|
12,249
|
|
|
32,469
|
|
|
1,936
|
|
|
10,776
|
|
|||||||||
|
Closed Block Business
|
410
|
|
|
49,863
|
|
|
0
|
|
|
12,853
|
|
|
2,704
|
|
|
3,007
|
|
|
6,097
|
|
|
37
|
|
|
1,031
|
|
|||||||||
|
Total
|
$
|
15,971
|
|
|
$
|
215,174
|
|
|
$
|
2,592
|
|
|
$
|
143,811
|
|
|
$
|
35,472
|
|
|
$
|
15,256
|
|
|
$
|
38,566
|
|
|
$
|
1,973
|
|
|
$
|
11,807
|
|
|
|
|
Gross
Amount
|
|
Ceded to
Other
Companies
|
|
Assumed
from
Other
Companies
|
|
Net
Amount
|
|
Percentage
of Amount
Assumed
to Net
|
|||||||||
|
2016
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Life Insurance Face Amount In Force
|
|
$
|
3,652,206
|
|
|
$
|
706,918
|
|
|
$
|
218,262
|
|
|
$
|
3,163,550
|
|
|
6.9
|
%
|
|
Premiums:
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Life Insurance
|
|
$
|
27,857
|
|
|
$
|
1,719
|
|
|
$
|
2,073
|
|
|
$
|
28,211
|
|
|
7.3
|
%
|
|
Accident and Health Insurance
|
|
2,797
|
|
|
44
|
|
|
0
|
|
|
2,753
|
|
|
0.0
|
|
||||
|
Total Premiums
|
|
$
|
30,654
|
|
|
$
|
1,763
|
|
|
$
|
2,073
|
|
|
$
|
30,964
|
|
|
6.7
|
%
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Life Insurance Face Amount In Force
|
|
$
|
3,457,711
|
|
|
$
|
642,525
|
|
|
$
|
235,418
|
|
|
$
|
3,050,604
|
|
|
7.7
|
%
|
|
Premiums:
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Life Insurance
|
|
$
|
25,346
|
|
|
$
|
1,573
|
|
|
$
|
2,147
|
|
|
$
|
25,920
|
|
|
8.3
|
%
|
|
Accident and Health Insurance
|
|
2,650
|
|
|
49
|
|
|
0
|
|
|
2,601
|
|
|
0.0
|
|
||||
|
Total Premiums
|
|
$
|
27,996
|
|
|
$
|
1,622
|
|
|
$
|
2,147
|
|
|
$
|
28,521
|
|
|
7.5
|
%
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Life Insurance Face Amount In Force
|
|
$
|
3,492,396
|
|
|
$
|
633,501
|
|
|
$
|
245,674
|
|
|
$
|
3,104,569
|
|
|
7.9
|
%
|
|
Premiums:
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Life Insurance
|
|
$
|
26,638
|
|
|
$
|
1,451
|
|
|
$
|
1,134
|
|
|
$
|
26,321
|
|
|
4.3
|
%
|
|
Accident and Health Insurance
|
|
3,028
|
|
|
56
|
|
|
0
|
|
|
2,972
|
|
|
0.0
|
|
||||
|
Total Premiums
|
|
$
|
29,666
|
|
|
$
|
1,507
|
|
|
$
|
1,134
|
|
|
$
|
29,293
|
|
|
3.9
|
%
|
|
|
|
|
Additions
|
|
|
|
|
|
|
||||||||||||||
|
Description
|
Balance at
Beginning
of Period
|
|
Charged to
Costs and
Expenses
|
|
Other
|
|
Deductions
|
|
Effect of
Foreign
Exchange Rates
|
|
Balance
at End
of Period
|
||||||||||||
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Allowance for losses on commercial mortgage and other loans
|
$
|
112
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
7
|
|
(1)
|
$
|
1
|
|
|
$
|
106
|
|
|
Valuation allowance on deferred tax asset
|
133
|
|
|
68
|
|
|
(1
|
)
|
|
36
|
|
|
(1
|
)
|
|
163
|
|
||||||
|
|
$
|
245
|
|
|
$
|
68
|
|
|
$
|
(1
|
)
|
|
$
|
43
|
|
|
$
|
0
|
|
|
$
|
269
|
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Allowance for losses on commercial mortgage and other loans
|
$
|
119
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
7
|
|
(1)
|
$
|
0
|
|
|
$
|
112
|
|
|
Valuation allowance on deferred tax asset
|
277
|
|
|
38
|
|
|
(3
|
)
|
|
178
|
|
|
(1
|
)
|
|
133
|
|
||||||
|
|
$
|
396
|
|
|
$
|
38
|
|
|
$
|
(3
|
)
|
|
$
|
185
|
|
|
$
|
(1
|
)
|
|
$
|
245
|
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Allowance for losses on commercial mortgage and other loans
|
$
|
216
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
96
|
|
(1)
|
$
|
(1
|
)
|
|
$
|
119
|
|
|
Valuation allowance on deferred tax asset
|
235
|
|
|
44
|
|
|
0
|
|
|
0
|
|
|
(2
|
)
|
|
277
|
|
||||||
|
|
$
|
451
|
|
|
$
|
44
|
|
|
$
|
0
|
|
|
$
|
96
|
|
|
$
|
(3
|
)
|
|
$
|
396
|
|
|
(1)
|
Represents net release of allowance for losses and charge-offs, net of recoveries.
|
|
ITEM 16.
|
FORM 10-K SUMMARY
|
|
Prudential Entities
|
||||
|
|
|
|
|
|
|
Company
|
Prudential Financial, Inc.
|
|
PLIC
|
Prudential Legacy Insurance Company of New Jersey
|
|
Gibraltar Life
|
Gibraltar Life Insurance Company, Ltd.
|
|
PLNJ
|
Pruco Life Insurance Company of New Jersey
|
|
PALAC
|
Prudential Annuities Life Assurance Corporation
|
|
PRIAC
|
Prudential Retirement Insurance and Annuity Company
|
|
PB&T
|
Prudential Bank & Trust, FSB
|
|
Pruco Life
|
Pruco Life Insurance Company
|
|
PFI
|
Prudential Financial, Inc.
|
|
Pruco Re
|
Pruco Reinsurance, Ltd.
|
|
PGF
|
Prudential Global Funding, LLC
|
|
Prudential Financial
|
Prudential Financial, Inc.
|
|
PGFL
|
Prudential Gibraltar Financial Life Insurance Co., Ltd.
|
|
Prudential Funding
|
Prudential Funding, LLC
|
|
PGIM
|
The Global Investment Management Businesses of Prudential Financial, Inc.
|
|
Prudential Insurance
|
The Prudential Insurance Company of America
|
|
PHJ
|
Prudential Holdings of Japan, Inc.
|
|
Prudential of Japan
|
The Prudential Life Insurance Company Ltd.
|
|
Defined Terms
|
||||
|
|
|
|
|
|
|
AIG
|
American International Group
|
|
FRB
|
Board of Governors of the Federal Reserve System
|
|
Allstate
|
Allstate Corporation
|
|
Guideline AXXX
|
The Application of the Valuation of Life Insurance Policies Model Regulation
|
|
A.M. Best
|
A.M. Best Company
|
|
Hartford Life Business
|
The Hartford Financial Services Group's individual life insurance business acquired by Prudential Financial
|
|
AFP Habitat
|
Administradora de Fondos de Pensiones Habitat S.A.
|
|
Hedging IDD
|
IRS tax guidance relating to the hedging of variable annuity guaranteed minimum benefits
|
|
Board
|
Prudential Financial's Board of Directors
|
|
ICS
|
The IAIS’s Risk-based Global Insurance Capital Standard
|
|
CIO Organization
|
Chief Investment Officer Organization
|
|
IHC Debt
|
$1.75 billion of senior secured notes issued by Prudential Holdings, LLC on the date of demutualization
|
|
Class B Repurchase
|
Prudential Financial repurchased and canceled all of the shares of the Class B Stock on January 2, 2015
|
|
Liberty Mutual
|
Liberty Mutual Group
|
|
Closed Block
|
Certain in force traditional domestic participating insurance and annuity products and corresponding assets that are used for the payment of benefits and policyholders' dividends on these products
|
|
Moody's
|
Moody's Investor Service, Inc.
|
|
ComFrame
|
The common framework for the supervision of Internationally Active Insurance Groups
|
|
Regulation XXX
|
Valuation of Life Insurance Policies Model Regulation
|
|
Council
|
Financial Stability Oversight Council
|
|
S&P
|
Standard & Poor's Rating Services
|
|
Designated Financial Companies
|
Non-bank financial companies that are subject to stricter standards and supervision
|
|
Star and Edison Businesses
|
AIG Star Life Insurance Co., Ltd, AIG Edison Life Insurance Company, AIG Financial Assurance Japan K.K. and AIG Edison Service Co., Ltd., collectively
|
|
Dodd-Frank
|
Dodd-Frank Wall Street Reform and Consumer Protection Act
|
|
Union Hamilton
|
Union Hamilton Reinsurance, Ltd.
|
|
Exchange Act
|
The Securities Exchange Act of 1934
|
|
U.S. GAAP
|
Accounting principles generally accepted in the United States of America
|
|
Fitch
|
Fitch Ratings Inc.
|
|
Variable Annuities Recapture
|
A series of transactions that recaptured the risks related to variable annuities living benefits riders and certain retirement products that were previously reinsured to our captive reinsurance company
|
|
Framework
|
Prudential's capital protection framework
|
|
|
|
|
Acronyms
|
||||
|
|
|
|
|
|
|
AFE
|
Active Financing Exception
|
|
HLA
|
Higher Loss Absorbency
|
|
AG 43
|
Actuarial Guideline No. 43
|
|
IAIS
|
International Association of Insurance Supervisors
|
|
AG 48
|
Actuarial Guideline No. 48
|
|
IFRS
|
International Financial Reporting Standards
|
|
ALM
|
Asset Liability Management
|
|
ILC
|
Inversiones La Construccion S.A.
|
|
AOCI
|
Accumulated Other Comprehensive Income
|
|
IRAs
|
Individual Retirement Accounts
|
|
ASU
|
Accounting Standards Updates
|
|
IRS
|
Internal Revenue Service
|
|
BCR
|
Basic Capital Requirement
|
|
LIBOR
|
London Inter-Bank Offered Rate
|
|
bps
|
Basis Points
|
|
MD&A
|
Management's Discussion and Analysis of Financial Condition and Results of Operations
|
|
BSN
|
Bank Simpanan Nasional
|
|
MVA
|
Market Value Adjusted Investment Options
|
|
CAPM
|
Capital Asset Pricing Model
|
|
NAIC
|
National Association of Insurance Commissioners
|
|
CFC
|
Capital and Finance Committee
|
|
NAV
|
Net Asset Value
|
|
CFTC
|
Commodity Futures Trading Commission
|
|
NFA
|
National Futures Association
|
|
CLOs
|
Collateralized Loan Obligations
|
|
NJDOBI
|
New Jersey Department of Banking and Insurance
|
|
COLI
|
Corporate-Owned Life Insurance
|
|
NPR
|
Non-Performance Risk
|
|
COSO
|
Committee of Sponsoring Organizations of the Treadway Commission
|
|
NY DFS
|
New York State Department of Financial Services
|
|
DAC
|
Deferred Policy Acquisition Costs
|
|
NYSE
|
New York Stock Exchange
|
|
DOL
|
U.S. Department of Labor
|
|
OCI
|
Other Comprehensive Income (Loss)
|
|
DRD
|
Dividend Received Deduction
|
|
ORSA
|
Own Risk and Solvency Assessment
|
|
DSI
|
Deferred Sales Inducements
|
|
OTC
|
Over-The-Counter
|
|
EBITDA
|
Earnings Before Interest, Taxes, Depreciation and Amortization
|
|
OTTI
|
Other-Than-Temporary Impairments
|
|
EEA
|
European Economic Area
|
|
PDI
|
Prudential Defined Income Variable Annuity
|
|
ERC
|
Enterprise Risk Committee
|
|
PFL
|
Profits Followed by Losses
|
|
ERISA
|
Employee Retirement Income Security Act
|
|
PPC
|
Japan Policyholders Protection Corporation
|
|
ERM
|
Enterprise Risk Management
|
|
PPI
|
Prudential Premier® Investment Variable Annuity
|
|
FANIP
|
Funding Agreement Notes Issuance Program
|
|
PSA
|
Pooling and Servicing Agreement
|
|
FASB
|
Financial Accounting Standards Board
|
|
QIS
|
Quantitative Impact Study
|
|
FDIC
|
Federal Deposit Insurance Corporation
|
|
RBC
|
Risk-Based Capital
|
|
FHLBB
|
Federal Home Loan Bank of Boston
|
|
RICO
|
Racketeer Influenced and Corrupt Organizations Act
|
|
FHLBNY
|
Federal Home Loan Bank of New York
|
|
SEC
|
Securities and Exchange Commission
|
|
FINRA
|
Financial Industry Regulatory Authority
|
|
SMR
|
Solvency Margin Ratio
|
|
FIO
|
Federal Insurance Office
|
|
SSDI
|
Social Security Disability Insurance
|
|
FSA
|
Financial Services Agency
|
|
SSMDF
|
Social Security Master Death File
|
|
FSB
|
Financial Stability Board
|
|
SVO
|
Securities Valuation Office
|
|
GICs
|
Guaranteed Investment Contracts
|
|
TAASIL
|
Trading Account Assets Supporting Insurance Liabilities
|
|
GMAB
|
Guaranteed Minimum Accumulation Benefits
|
|
TAC
|
Total Adjusted Capital
|
|
GMDB
|
Guaranteed Minimum Death Benefits
|
|
TBA
|
To Be Announced
|
|
GMIB
|
Guaranteed Minimum Income Benefits
|
|
U.K.
|
The United Kingdom
|
|
GMIWB
|
Guaranteed Minimum Income and Withdrawal Benefits
|
|
URR
|
Unearned Revenue Reserve
|
|
GMWB
|
Guaranteed Minimum Withdrawal Benefits
|
|
U.S.
|
The United States of America
|
|
G-SII
|
Global Systemically Important Insurer
|
|
VIEs
|
Variable Interest Entities
|
|
HDI
|
Highest Daily Lifetime Income
|
|
VOBA
|
Value of Business Acquired
|
|
Prudential Financial, Inc.
|
||
|
|
|
|
|
By:
|
|
/
S
/ R
OBERT
M. F
ALZON
|
|
Name:
|
|
Robert M. Falzon
|
|
Title:
|
|
Executive Vice President
|
|
Name
|
|
Title
|
|
/
S
/ J
OHN
R. S
TRANGFELD
|
|
Chief Executive Officer,
|
|
John R. Strangfeld
|
|
President and Director
|
|
|
|
|
|
/
S
/ R
OBERT
M. F
ALZON
|
|
Executive Vice President and Chief Financial Officer
|
|
Robert M. Falzon
|
|
(Principal Financial Officer)
|
|
|
|
|
|
/
S
/ R
OBERT
D. A
XEL
|
|
Senior Vice President and
|
|
Robert D. Axel
|
|
Principal Accounting Officer
|
|
|
|
|
|
T
HOMAS
J. B
ALTIMORE
, J
R
.*
|
|
Director
|
|
Thomas J. Baltimore, Jr.
|
|
|
|
|
|
|
|
G
ILBERT
F. C
ASELLAS
*
|
|
Director
|
|
Gilbert F. Casellas
|
|
|
|
|
|
|
|
J
AMES
G. C
ULLEN
*
|
|
Director
|
|
James G. Cullen
|
|
|
|
|
|
|
|
M
ARK
B. G
RIER
*
|
|
Director
|
|
Mark B. Grier
|
|
|
|
|
|
|
|
M
ARTINA
H
UND
-M
EJEAN
*
|
|
Director
|
|
Martina Hund-Mejean
|
|
|
|
|
|
|
|
K
ARL
J. K
RAPEK
*
|
|
Director
|
|
Karl J. Krapek
|
|
|
|
|
|
|
|
P
ETER
R. L
IGHTE
*
|
|
Director
|
|
Peter R. Lighte
|
|
|
|
|
|
|
|
G
EORGE
P
AZ
*
|
|
Director
|
|
George Paz
|
|
|
|
|
|
|
|
S
ANDRA
P
IANALTO
*
|
|
Director
|
|
Sandra Pianalto
|
|
|
|
|
|
|
|
C
HRISTINE
A. P
OON
*
|
|
Director
|
|
Christine A. Poon
|
|
|
|
|
|
|
|
D
OUGLAS
A. S
COVANNER
*
|
|
Director
|
|
Douglas A. Scovanner
|
|
|
|
|
|
|
|
M
ICHAEL
A. T
ODMAN
*
|
|
Director
|
|
Michael A. Todman
|
|
|
|
|
|
|
|
By:*
|
/
S
/ R
OBERT
M. F
ALZON
|
|
|
|
Attorney-in-fact
|
|
|
2.1
|
|
Plan of Reorganization. Incorporated by reference to Exhibit 2.1 to the Registrant’s Registration Statement on Form S-1 (No. 333-58524) (the “Registration Statement”).
|
|
|
|
|
|
3.1
|
|
Amended and Restated Certificate of Incorporation of Prudential Financial, Inc. Incorporated by reference to Exhibit 3.1 to the Registrant’s January 22, 2015 Current Report on Form 8-K.
|
|
|
|
|
|
3.2
|
|
Amended and Restated By-laws of Prudential Financial, Inc. Incorporated by reference to Exhibit 3.1 to the Registrant’s March 10, 2015 Current Report on Form 8-K.
|
|
|
|
|
|
4.1
|
|
Form of certificate for the Common Stock of Prudential Financial, Inc., par value $.01 per share. Incorporated by reference to Exhibit 4.1 to the Registration Statement.
|
|
|
|
|
|
4.2
|
|
Upon the request of the Securities and Exchange Commission, the Registrant will furnish copies of all instruments defining the rights of holders of long-term debt of the Registrant.
|
|
|
|
|
|
10.1
|
|
Amended and Restated Credit Agreement dated as of April 14, 2015 among Prudential Financial, Inc., Prudential Funding, LLC, as Borrowers, The Prudential Insurance Company of America, JP Morgan, as Administrative Agent and Several L/C Agent, and the lenders party thereto. Incorporated by reference to Exhibit 10.1 to the Registrant’s April 17, 2015 Current Report on Form 8-K.
|
|
|
|
|
|
10.2
|
|
Support Agreement between The Prudential Insurance Company of America and Prudential Funding Corporation, dated as of March 18, 1982. Incorporated by reference to Exhibit 10.1 to the Registration Statement.
|
|
|
|
|
|
10.3
|
|
The Prudential Insurance Company of America Deferred Compensation Plan (as amended and restated effective as of December 1, 2015). Incorporated by reference to Exhibit 10.3 to the Registrant’s December 31, 2015 Annual Report on Form 10-K.*
|
|
|
|
|
|
10.4
|
|
The Pension Plan for Non-Employee Directors of The Prudential Insurance Company of America. Incorporated by reference to Exhibit 10.6 to the Registration Statement.*
|
|
|
|
|
|
10.5
|
|
Prudential Financial, Inc. Executive Change of Control Severance Program (amended and restated effective as of October 11, 2016).*
|
|
|
|
|
|
10.6
|
|
Prudential Financial Executive Officer Severance Policy (adopted October 10, 2006). Incorporated by reference to Exhibit 10.2 to the Registrant’s October 11, 2006 Current Report on Form 8-K.*
|
|
|
|
|
|
10.7
|
|
Prudential Financial, Inc. Omnibus Incentive Plan (amended and restated effective November 11, 2008). Incorporated by reference to Exhibit 10.15 to the Registrant’s December 31, 2008 Annual Report on Form 10-K.*
|
|
|
|
|
|
10.8
|
|
First Amendment to the Prudential Financial, Inc. Omnibus Incentive Plan, effective February 9, 2010. Incorporated by reference to Exhibit 10.2 to the Registrant’s February 11, 2010 Current Report on Form 8-K.*
|
|
|
|
|
|
10.9
|
|
Form of 2007 Grant Acceptance Agreement relating to stock option grants to the chairman, principal executive officer, principal financial officer and other executive officers under the Prudential Financial, Inc. Omnibus Incentive Plan. Incorporated by reference to Exhibit 10.1 to the Registrant’s February 13, 2007 Current Report on Form 8-K.*
|
|
10.10
|
|
Form of Grant Acceptance Agreement relating to January 18, 2008 stock option grants to John R. Strangfeld, Mark B. Grier, Bernard B. Winograd and Edward P. Baird under the Prudential Financial, Inc. Omnibus Incentive Plan. Incorporated by reference to Exhibit 10.1 to the Registrant’s January 23, 2008 Current Report on Form 8-K.*
|
|
|
|
|
|
10.11
|
|
Form of 2008 Grant Acceptance Agreement relating to stock option grants to the chairman, principal executive officer, principal financial officer and other executive officers under the Prudential Financial, Inc. Omnibus Incentive Plan. Incorporated by reference to Exhibit 10.1 to the Registrant’s February 12, 2008 Current Report on Form 8-K.*
|
|
|
|
|
|
10.12
|
|
Form of Terms and Conditions of the 2009 Long-Term Incentive Program relating to stock option grants and restricted stock unit awards to the chairman and principal executive officer, principal financial officer and other executive officers under the Prudential Financial, Inc. Omnibus Incentive Plan. Incorporated by reference to Exhibit 10.1 to the Registrant’s February 10, 2009 Current Report on Form 8-K.*
|
|
|
|
|
|
10.13
|
|
Form of Terms and Conditions relating to awards in 2010 under the Prudential Financial, Inc. Omnibus Incentive Plan to the chairman, principal executive officer, principal financial officer and other executive officers of book value units under the 2010 Mid-Term Incentive Program and of stock options, performance shares and performance units under the 2010 Long-Term Incentive Program. Incorporated by reference to Exhibit 10.3 to the Registrant’s February 11, 2010 Current Report on Form 8-K.*
|
|
|
|
|
|
10.14
|
|
Form of Terms and Conditions relating to awards in 2011 under the Prudential Financial, Inc. Omnibus Incentive Plan to the chairman, principal executive officer, principal financial officer and other executive officers of book value units under the 2011 Mid-Term Incentive Program and of stock options, performance shares and performance units under the 2011 Long-Term Incentive Program. Incorporated by reference to Exhibit 10.1 to the Registrant’s February 8, 2011 Current Report on Form 8-K.*
|
|
|
|
|
|
10.15
|
|
Revised Form of Terms and Conditions relating to awards in 2012 under the Prudential Financial, Inc. Omnibus Incentive Plan to the chairman, principal executive officer, principal financial officer and other executive officers of book value units, stock options, performance shares and performance units under the 2012 Long-Term Incentive Program. Incorporated by reference to Exhibit 10.1 to the Registrant’s June 11, 2013 Current Report on Form 8-K.*
|
|
|
|
|
|
10.16
|
|
Revised Form of Terms and Conditions relating to awards in 2013 under the Prudential Financial, Inc. Omnibus Incentive Plan to the chairman, principal executive officer, principal financial officer and other executive officers of book value units, stock options, performance shares and performance units under the 2013 Long-Term Incentive Program. Incorporated by reference to Exhibit 10.2 to the Registrant’s June 11, 2013 Current Report on Form 8-K.*
|
|
|
|
|
|
10.17
|
|
Revised Form of Terms and Conditions relating to awards in 2014 under the Prudential Financial, Inc. Omnibus Incentive Plan to the chairman, principal executive officer, principal financial officer and other executive officers of book value units, stock options, performance shares and performance units under the 2014 Long-Term Incentive Program. Incorporated by reference to Exhibit 10.1 to the Registrant’s February 18, 2014 Current Report on Form 8-K.*
|
|
|
|
|
|
10.18
|
|
Form of Terms and Conditions relating to awards in 2015 under the Prudential Financial, Inc. Omnibus Incentive Plan to the chairman, principal executive officer, principal financial officer and other executive officers of book value units, stock options, performance shares and performance units under the 2015 Long-Term Incentive Program. Incorporated by reference to Exhibit 10.3 to the Registrant’s February 10, 2015 Current Report on Form 8-K.*
|
|
|
|
|
|
10.19
|
|
Form of Terms and Conditions relating to awards in 2016 under the Prudential Financial, Inc. Omnibus Incentive Plan to the chairman, principal executive officer, principal financial officer and other executive officers of book value units, stock options, performance shares and performance units under the 2016 Long-Term Incentive Program. Incorporated by reference to Exhibit 10.2 to the Registrant’s February 9, 2016 Current Report on Form 8-K.*
|
|
|
|
|
|
10.20
|
|
Prudential Financial, Inc. 2016 Omnibus Incentive Plan. Incorporated by reference to Appendix A to the Registrant’s proxy statement for the 2016 Annual Meeting of Shareholders filed with the Securities and Exchange Commission on March 22, 2016.*
|
|
|
|
|
|
10.21
|
|
Form of Terms and Conditions relating to awards to executive officers in 2017 under the Prudential Financial, Inc. 2016 Omnibus Incentive Plan of restricted stock units, stock options, performance shares, performance units and book value units under the 2017 Long-Term Incentive Program. Incorporated by reference to Exhibit 10.2 to the Registrant’s February 14, 2017 Current Report on Form 8-K.*
|
|
|
|
|
|
10.22
|
|
Prudential Financial, Inc. Clawback Policy effective February 10, 2015. Incorporated by reference to Exhibit 10.1 to the Registrant’s February 10, 2015 Current Report on Form 8-K.*
|
|
|
|
|
|
10.23
|
|
Annual Incentive Payment Criteria for Executive Officers (Effective for awards in 2017 in respect of 2016 and for subsequent years). Incorporated by reference to Exhibit 10.1 to the Registrant’s February 14, 2017 Current Report on Form 8-K.*
|
|
|
|
|
|
10.24
|
|
Prudential Financial, Inc. Non-Employee Director Compensation Summary effective February 10, 2015. Incorporated by reference to Exhibit 10.21 to the Registrant’s December 31, 2014 Annual Report on Form 10-K.*
|
|
10.25
|
|
The Prudential Supplemental Retirement Plan (amended and restated effective as of January 1, 2009). Incorporated by reference to Exhibit 10.35 to the Registrant’s December 31, 2008 Annual Report on Form 10-K.*
|
|
|
|
|
|
10.26
|
|
First Amendment to The Prudential Supplemental Retirement Plan, effective June 30, 2012. Incorporated by reference to Exhibit 10.1 to the Registrant’s June 30, 2012 Quarterly Report on Form 10-Q.*
|
|
|
|
|
|
10.27
|
|
Second Amendment to The Prudential Supplemental Retirement Plan, effective December 6, 2013. Incorporated by reference to Exhibit 10.26 to the Registrant’s December 31, 2013 Annual Report on Form 10-K.*
|
|
|
|
|
|
10.28
|
|
Third Amendment to The Prudential Supplemental Retirement Plan, effective January 1, 2017.*
|
|
|
|
|
|
10.29
|
|
Prudential Supplemental Employee Savings Plan, as amended and restated effective as of January 1, 2006. Incorporated by reference to Exhibit 10.32 to the Registrant’s December 31, 2006 Annual Report on Form 10-K.*
|
|
|
|
|
|
10.30
|
|
First Amendment to the Prudential Supplemental Employee Savings Plan, effective as of January 1, 2008. Incorporated by reference to Exhibit 10.2 to the Registrant’s March 31, 2008 Quarterly Report on Form 10-Q.*
|
|
|
|
|
|
10.31
|
|
Second Amendment to the Prudential Supplemental Employee Savings Plan, dated December 23, 2008. Incorporated by reference to Exhibit 10.38 to the Registrant’s December 31, 2008 Annual Report on Form 10-K.*
|
|
|
|
|
|
10.32
|
|
Third Amendment to the Prudential Supplemental Employee Savings Plan, effective January 1, 2017.*
|
|
|
|
|
|
10.33
|
|
The Prudential Insurance Supplemental Executive Retirement Plan (amended and restated effective as of January 1, 2009). Incorporated by reference to Exhibit 10.39 to the Registrant’s December 31, 2008 Annual Report on Form 10-K.*
|
|
|
|
|
|
10.34
|
|
First Amendment to the Prudential Insurance Supplemental Executive Retirement Plan, effective as of January 1, 2010. Incorporated by reference to Exhibit 10.35 to the Registrant’s December 31, 2010 Annual Report on Form 10-K.*
|
|
|
|
|
|
10.35
|
|
Prudential Financial, Inc. Compensation Plan (amended and restated effective as of November 11, 2008). Incorporated by reference to Exhibit 10.41 to the Registrant’s December 31, 2008 Annual Report on Form 10-K.*
|
|
|
|
|
|
10.36
|
|
The Prudential Deferred Compensation Plan for Non-Employee Directors (as amended through October 9, 2007). Incorporated by reference to Exhibit 10.3 to the Registrant’s September 30, 2007 Quarterly Report on Form 10-Q.*
|
|
|
|
|
|
10.37
|
|
First Amendment to The Prudential Deferred Compensation Plan for Non-Employee Directors, dated November 20, 2008. Incorporated by reference to Exhibit 10.43 to the Registrant’s December 31, 2008 Annual Report on Form 10-K.*
|
|
|
|
|
|
10.38
|
|
Prudential Financial, Inc. 2011 Deferred Compensation Plan for Non-Employee Directors (effective as of January 1, 2011). Incorporated by reference to Exhibit 10.39 to the Registrant’s December 31, 2010 Annual Report on Form 10-K.*
|
|
|
|
|
|
10.39
|
|
Amendment No. 1 to the Prudential Financial, Inc. 2011 Deferred Compensation Plan for Non-Employee Directors. Incorporated by reference to Exhibit 10.1 to the Registrant’s September 30, 2015 Quarterly Report on Form 10-Q.*
|
|
|
|
|
|
10.40
|
|
Prudential Financial, Inc. 2016 Deferred Compensation Plan for Non-Employee Directors.*
|
|
|
|
|
|
10.41
|
|
Prudential Securities Incorporated Supplemental Retirement Plan for Executives (amended and restated effective January 1, 2009). Incorporated by reference to Exhibit 10.44 to the Registrant’s December 31, 2008 Annual Report on Form 10-K.*
|
|
|
|
|
|
10.42
|
|
PFI Supplemental Executive Retirement Plan (amended and restated effective as of January 1, 2009). Incorporated by reference to Exhibit 10.45 to the Registrant’s December 31, 2008 Annual Report on Form 10-K.*
|
|
|
|
|
|
10.43
|
|
First Amendment to the PFI Supplemental Executive Retirement Plan, effective as of January 1, 2010. Incorporated by reference to Exhibit 10.42 to the Registrant’s December 31, 2010 Annual Report on Form 10-K.*
|
|
|
|
|
|
10.44
|
|
Prudential Financial, Inc. Nonqualified Retirement Plan Trust Agreement between Prudential Financial, Inc. and Wachovia Bank, N.A. Incorporated by reference to Exhibit 10.1 to the Registrant’s June 30, 2007 Quarterly Report on Form 10-Q.*
|
|
|
|
|
|
10.45
|
|
The Prudential Severance Plan for Senior Executives (amended and restated effective as of November 1, 2011). Incorporated by reference to Exhibit 10.41 to the Registrant’s December 31, 2011 Annual Report on Form 10-K.*
|
|
|
|
|
|
10.46
|
|
The Prudential Severance Plan for Executives (amended and restated effective as of November 1, 2011). Incorporated by reference to Exhibit 10.42 to the Registrant’s December 31, 2011 Annual Report on Form 10-K.*
|
|
|
|
|
|
10.47
|
|
The Prudential Severance Plan (amended and restated effective as of November 1, 2011). Incorporated by reference to Exhibit 10.43 to the Registrant’s December 31, 2011 Annual Report on Form 10-K.*
|
|
|
|
|
|
10.48
|
|
First Amendment to the Prudential Severance Plan, the Prudential Severance Plan for Executives, and the Prudential Severance Plan for Senior Executives, dated December 11, 2012. Incorporated by reference to Exhibit 10.47 to the Registrant’s December 31, 2012 Annual Report on Form 10-K.*
|
|
|
|
|
|
10.49
|
|
2014 Prudential Financial, Inc. Leveraging Opportunities Program Long-Term Incentive Award Plan. Incorporated by reference to Exhibit 10.44 to the Registrant’s December 31, 2013 Annual Report on Form 10-K.*
|
|
|
|
|
|
12.1
|
|
Statement of Ratio of Earnings to Fixed Charges.
|
|
|
|
|
|
21.1
|
|
Subsidiaries of Prudential Financial, Inc.
|
|
|
|
|
|
23.1
|
|
Consent of PricewaterhouseCoopers LLP.
|
|
|
|
|
|
24.1
|
|
Powers of Attorney.
|
|
|
|
|
|
31.1
|
|
Section 302 Certification of the Chief Executive Officer.
|
|
|
|
|
|
31.2
|
|
Section 302 Certification of the Chief Financial Officer.
|
|
|
|
|
|
32.1
|
|
Section 906 Certification of the Chief Executive Officer.
|
|
|
|
|
|
32.2
|
|
Section 906 Certification of the Chief Financial Officer.
|
|
101.INS—XBRL
|
|
Instance Document.
|
|
|
|
|
|
101.SCH—XBRL
|
|
Taxonomy Extension Schema Document.
|
|
|
|
|
|
101.CAL—XBRL
|
|
Taxonomy Extension Calculation Linkbase Document.
|
|
|
|
|
|
101.LAB—XBRL
|
|
Taxonomy Extension Label Linkbase Document.
|
|
|
|
|
|
101.PRE—XBRL
|
|
Taxonomy Extension Presentation Linkbase Document.
|
|
|
|
|
|
101.DEF—XBRL
|
|
Taxonomy Extension Definition Linkbase Document.
|
|
*
|
This exhibit is a management contract or compensatory plan or arrangement.
|
|
3.1
|
DEATH; DISABILITY OR RETIREMENT 9
|
|
3.2
|
CAUSE AND VOLUNTARY TERMINATION 9
|
|
3.3
|
TERMINATION BY THE COMPANY OTHER THAN FOR CAUSE 9
|
|
(a)
|
Severance and Other Termination Payments 9
|
|
(b)
|
Continuation of Benefits 11
|
|
(c)
|
Awards under the Company Omnibus Incentive Plan. 12
|
|
(d)
|
Enhanced Retirement Benefits 12
|
|
(e)
|
Prudential Deferred Compensation Plans 14
|
|
(f)
|
Indemnification 14
|
|
3.4
|
TERMINATION BY THE PARTICIPANT FOR GOOD REASON 15
|
|
3.5
|
TERMINATION OF EMPLOYMENT BY THE COMPANY FOLLOWING A POTENTIAL CHANGE OF CONTROL 15
|
|
3.6
|
DISCHARGE OF THE COMPANY’S OBLIGATIONS 15
|
|
4.1
|
APPLICATION OF THIS ARTICLE IV 16
|
|
4.2
|
CALCULATION OF BENEFITS 16
|
|
4.3
|
IMPOSITION OF PAYMENT CAP 17
|
|
4.4
|
APPLICATION OF SECTION 280G 17
|
|
4.5
|
ADJUSTMENTS IN RESPECT OF THE PAYMENT CAP. 18
|
|
6.1
|
ADMINISTRATION 19
|
|
6.2
|
PROGRAM AMENDMENT OR TERMINATION 20
|
|
6.3
|
NO CONTRACT OF EMPLOYMENT 20
|
|
6.4
|
LIMITATION ON LIABILITY 21
|
|
6.5
|
EXCLUSIVITY OF BENEFITS 21
|
|
6.6
|
IMPACT ON OTHER BENEFITS 21
|
|
6.7
|
TAXES 21
|
|
6.8
|
THIRD PARTIES 21
|
|
6.9
|
CAPTIONS 21
|
|
6.10
|
CHOICE OF LAW 21
|
|
6.11
|
NO LIMITATIONS ON CORPORATE ACTIONS 21
|
|
6.12
|
NON-ALIENATION PROVISION 22
|
|
6.13
|
SUCCESSORS 22
|
|
(
x
)
|
in the case of a merger or consolidation, the surviving or resulting corporation;
|
|
(
y
)
|
in the case of a share exchange, the acquiring corporation, or
|
|
(
z
)
|
in the case of a division or a sale or other disposition of assets, each surviving, resulting or acquiring corporation which, immediately following the relevant Corporate Event, holds more than twenty-five percent (25%) of the consolidated assets of the Company immediately prior to such Corporate Event, provided that no Change of Control shall be deemed to have occurred with respect to any Participant who is employed, immediately following such Corporate Event, by any entity in which the shareholders of the Company, as the case may be, immediately prior to such Corporate Event hold, directly or indirectly, a majority of the Voting Power.
|
|
(1)
|
in the case of a Tier I Participant, payment of the entire Severance Amount is expressly contingent upon such Participant executing a Noncompetition Agreement in the form attached hereto as Exhibit A and
|
|
(2)
|
in the case of a Tier II or Tier III Participant,
|
|
(A)
|
Service
: The hypothetical benefit to be calculated will include the following additional amount of deemed service for the Participant:
|
|
(B)
|
Age
: The Participant had attained the age he or she would have attained had he remained employed through the period of additional service credited to the Participant under subclause (A).
|
|
(C)
|
Compensation
: Where compensation is a relevant factor, the Participant’s Severance Amount (or Enhanced Severance Amount, as the case may be) shall be deemed to have been paid ratably over the period of additional service credited above and treated as “compensation” taken into account for purposes of determining the accrued retirement benefits.
|
|
(D)
|
Cash Balance Credits
: To the degree applicable and consistent with the provisions set forth in subclause (A) and (C) above, additional credits under any cash balance component of the Prudential Retirement Plan shall be added to such Participant’s hypothetical accrued benefit, calculated as if the credit(s) applicable to a Participant’s account as of the last day of the plan year prior to the Date of Termination would continue to be credited to a Participant’s cash balance account through the period of additional service set forth in subclause (A) and calculated by reference to such compensation as described in subclause (C) under the provisions of such plan; over
|
|
A.
|
The Prudential Supplemental Retirement Plan (“Supplemental Plan” or the “Plan”) was amended and restated effective as of January 1, 2009, to comply with the requirements of Section 409A of the Internal Revenue Code of 1986, as amended (“Code”).
|
|
B.
|
Pursuant to Section 8.01(b) of the Supplemental Plan, the Senior Vice President of Corporate Human Resources (or successor thereto) (“SVP”) of The Prudential Insurance Company of America ("Prudential") may adopt minor amendments to the Supplemental Plan without the approval of the Compensation Committee of the Board of Directors of Prudential that are necessary or advisable for purposes of compliance with applicable laws and regulations, relate to administrative practices or have an insubstantial financial effect on Plan benefits and expenses.
|
|
C.
|
The SVP deems it advisable to amend the Supplemental Plan to address the participation of employees who are transferred to perform service with a joint venture.
|
|
D.
|
The SVP has determined that the foregoing amendment is within the scope of authority granted to the SVP under the terms of the Plan.
|
|
1.
|
Article II of the Supplemental Plan is amended by adding the following new Section 2.04 at the end thereof:
|
|
2.
|
All capitalized terms not defined herein shall have the meanings ascribed to them in the Supplemental Plan.
|
|
3.
|
Except where otherwise expressly amended herein, the Supplemental Plan is ratified and confirmed and shall continue in full force and effect.
|
|
A.
|
Pursuant to Section 7.1(b) of the Prudential Supplemental Employee Savings Plan (the “Plan”), the Senior Vice President for Corporate Human Resources ("SVP"), or the successor to his or her duties relating to corporate human resources has the authority to amend the Plan on behalf of The Prudential Insurance Company of America (“Prudential”) with respect to minor changes that are necessary or advisable for purposes of compliance with ERISA or other applicable laws or regulations.
|
|
B.
|
The SVP deems it advisable to amend the Plan to address the participation of employees who are transferred to perform service with a joint venture.
|
|
C.
|
The SVP has determined that the foregoing amendment is within the scope of authority granted to the SVP under the terms of the Plan.
|
|
1.
|
Article II of the Plan is hereby amended by adding the following new Section 2.5 to the end thereof:
|
|
2.
|
All capitalized terms not defined herein shall have the meanings ascribed to them in the Plan.
|
|
3.
|
Except where otherwise expressly amended herein, the Plan is ratified and confirmed and shall continue in full force and effect.
|
|
|
|
Year Ended December 31,
|
||||||||||||||||||
|
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||
|
Earnings:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Income (loss) from continuing operations before income taxes(1)
|
|
$
|
5,710
|
|
|
$
|
7,711
|
|
|
$
|
1,715
|
|
|
$
|
(1,712
|
)
|
|
$
|
737
|
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Undistributed income (loss) of investees accounted for under the equity method
|
|
12
|
|
|
(280
|
)
|
|
134
|
|
|
223
|
|
|
107
|
|
|||||
|
Interest capitalized
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|||||
|
Adjusted earnings
|
|
5,698
|
|
|
7,991
|
|
|
1,581
|
|
|
(1,935
|
)
|
|
630
|
|
|||||
|
Add fixed charges:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Interest credited to policyholders’ account balances
|
|
3,761
|
|
|
3,479
|
|
|
4,263
|
|
|
3,111
|
|
|
4,234
|
|
|||||
|
Gross interest expense(2)
|
|
1,324
|
|
|
1,328
|
|
|
1,934
|
|
|
1,419
|
|
|
1,389
|
|
|||||
|
Interest component of rental expense
|
|
84
|
|
|
77
|
|
|
75
|
|
|
85
|
|
|
96
|
|
|||||
|
Total fixed charges
|
|
5,169
|
|
|
4,884
|
|
|
6,272
|
|
|
4,615
|
|
|
5,719
|
|
|||||
|
Total earnings plus fixed charges
|
|
$
|
10,867
|
|
|
$
|
12,875
|
|
|
$
|
7,853
|
|
|
$
|
2,680
|
|
|
$
|
6,349
|
|
|
Ratio of earnings to fixed charges(3)
|
|
2.10
|
|
|
2.64
|
|
|
1.25
|
|
|
0.00
|
|
|
1.11
|
|
|||||
|
(1)
|
Excludes earnings attributable to noncontrolling interests.
|
|
(2)
|
Interest expense on short-term and long-term debt, including interest expense of securities businesses reported in “Net investment income” in the Consolidated Statements of Operations, capitalized interest and amortization of debt discounts and premiums. Interest expense does not include interest on liabilities recorded under the authoritative guidance on accounting for uncertainty in income taxes. The Company’s policy is to classify such interest in income tax provision in the consolidated statements of operations.
|
|
(3)
|
Due to the Company’s loss for the twelve months ended December 31, 2013, the ratio coverage was less than 1:1 and is therefore not presented. Additional earnings of $1,935 million would have been required for the twelve months ended December 31, 2013, to achieve a ratio of 1:1.
|
|
Subsidiary
|
Jurisdiction
|
|
210-220 E. 22nd Street SSGA Owner, LLC
|
Delaware
|
|
49-51 avenue George V Holdings SAS
|
France
|
|
49-51 avenue George V SCI
|
France
|
|
Adlerwerke CB Investment LLC
|
Delaware
|
|
Administradora de Fondos de Pensiones Habitat, S.A.
|
Chile
|
|
Administradora de Inversiones Previsionales SpA
|
Chile
|
|
AREF Cayman Co Ltd.
|
Cayman Islands
|
|
AREF GP Ltd.
|
Cayman Islands
|
|
ARL Holdings, Inc.
|
Delaware
|
|
Asia Property Fund III GP S.a.r.l.
|
Luxembourg
|
|
ASPF II - Feeder Fund GmbH
|
Germany
|
|
ASPF II - Verwaltungs - GmbH & Co. KG
|
Germany
|
|
ASPF II Beteiligungs GmbH & Co. KG
|
Germany
|
|
ASPF II Management GmbH
|
Germany
|
|
ASPF III (Scots) L.P.
|
Scotland
|
|
Asset Disposition Trust, 1995-2
|
New Jersey
|
|
AST Investment Services, Inc.
|
Connecticut
|
|
Braeloch Holdings Inc.
|
Delaware
|
|
Braeloch Successor Corporation
|
Delaware
|
|
Broome Street Holdings, LLC
|
Delaware
|
|
BSC CP LP
|
Scotland
|
|
Campus Drive, LLC
|
Delaware
|
|
Capital Agricultural Property Services, Inc.
|
Delaware
|
|
CB German Retail LLC
|
Delaware
|
|
Chadwick Boulevard Investment Holdings Co., LLC
|
Delaware
|
|
CLIS Co., Ltd.
|
Japan
|
|
Coconino, LLC
|
Delaware
|
|
Colico II, Inc.
|
Delaware
|
|
COLICO, INC.
|
Delaware
|
|
Columbus Drive Partners, L.P.
|
Delaware
|
|
Commerce Street Holdings, LLC
|
Delaware
|
|
Commerce Street Investments LLC
|
Delaware
|
|
Coolidge, LLC
|
Delaware
|
|
Coral Reef GP
|
Cayman Islands
|
|
Coral Reef Unit Trust
|
Cayman Islands
|
|
Coral Reef, L.P.
|
Cayman Islands
|
|
Cottage Street Investments LLC
|
Delaware
|
|
Cottage Street Orbit Acquisition, LLC
|
Delaware
|
|
DHFL Pramerica Asset Managers Private Limited
|
India
|
|
DHFL PRAMERICA LIFE INSURANCE COMPANY LIMITED
|
India
|
|
DHFL Pramerica Trustees Private Limited
|
India
|
|
Don Cesar Investor LLC
|
Delaware
|
|
Dryden Finance II, LLC
|
Delaware
|
|
E. 22nd Street SSGA Venture, LLC
|
Delaware
|
|
Edison Place Senior Note LLC
|
Delaware
|
|
Essex, LLC
|
Delaware
|
|
European Value Partners GP S.a.r.l.
|
Luxembourg
|
|
EuroPRISA Management Company S.A.
|
Luxembourg
|
|
EuroPRISA Sub-fund A Feeder GP Limited
|
England & Wales
|
|
Everbright Pramerica Fund Management Co., Ltd.
|
China
|
|
Financial Assurance Japan, Inc.
|
Japan
|
|
Finsbury Circus Limited
|
Cayman Islands
|
|
Flor-Ag Corporation
|
Florida
|
|
GA 1600 Commons LLC
|
Delaware
|
|
GA Belden LLC
|
Delaware
|
|
GA Collins LLC
|
Delaware
|
|
GA East 86 Street LLC
|
Delaware
|
|
GA JHCII LLC
|
Delaware
|
|
GA Manor at Harbour Island, LLC
|
Delaware
|
|
GA Metro LLC
|
Delaware
|
|
GA Mission LLC
|
Delaware
|
|
GA W Paces LLC
|
Delaware
|
|
GAP Advisors (Cayman), Ltd.
|
Cayman Islands
|
|
GAP-P Holdings (Cayman), Ltd.
|
Cayman Islands
|
|
GAP-P LT Holdings (Cayman), Ltd.
|
Cayman Islands
|
|
Gateway CDE LLC
|
Delaware
|
|
Gateway Holdings II, LLC
|
Delaware
|
|
Gateway Holdings, LLC
|
Delaware
|
|
German Retail Income CP LP
|
Scotland
|
|
GIBRALTAR BSN HOLDINGS SDN BHD
|
Malaysia
|
|
Gibraltar BSN Life Berhad
|
Malaysia
|
|
Gibraltar International Service LLC
|
Delaware
|
|
Glenealy International Limited
|
British Virgin Islands
|
|
Global Portfolio Strategies, Inc.
|
Connecticut
|
|
GRA (Bermuda) Limited
|
Bermuda
|
|
Graham Resources, Inc.
|
Delaware
|
|
Graham Royalty, Ltd.
|
Louisiana
|
|
Greenlee, LLC
|
Delaware
|
|
Halsey Street Investments LLC
|
Delaware
|
|
Hirakata, LLC
|
Delaware
|
|
Impact Investments Bridges UK S.a.r.l
|
Luxembourg
|
|
Inversiones Previsionales Chile SpA
|
Chile
|
|
Inversiones Previsionales Dos SpA
|
Chile
|
|
Ironbound Fund LLC
|
Delaware
|
|
Jennison Associates LLC
|
Delaware
|
|
Kyarra S.a r.l.
|
Luxembourg
|
|
Kyoei Annuity Home Co. Ltd. (Kabushiki Kaisha Kyouei Nenkin Home)
|
Japan
|
|
Kyoei do Brasil Companhia de Seguros
|
Brazil
|
|
Lake Street Partners IV, L.P.
|
Delaware
|
|
Manor at Harbour Island, LLC
|
Delaware
|
|
Maricopa, LLC
|
Delaware
|
|
Market Street Holdings IV, LLC
|
Delaware
|
|
MC GA COLLINS HOLDINGS LLC
|
Delaware
|
|
MC GA COLLINS REALTY LLC
|
Delaware
|
|
MC Insurance Agency Services, LLC
|
California
|
|
Meguro Residence Godo Kaisha
|
Japan
|
|
Mulberry Street Holdings, LLC
|
Delaware
|
|
Mulberry Street Investment, L.P.
|
Delaware
|
|
Mulberry Street Partners, LLC
|
Delaware
|
|
Mullin TBG Insurance Agency Services, LLC
|
Delaware
|
|
New Savanna
|
Cayman Islands
|
|
Oki-ni, LLC
|
Delaware
|
|
Orchard Street Acres Inc.
|
Delaware
|
|
PAI Lorida Groves, LLC
|
Delaware
|
|
PBI (UK) Limited
|
England
|
|
PCP V Cayman MF Holdco, L.P.
|
Cayman Islands
|
|
PG Business Service Co., Ltd
|
Japan
|
|
PG Collection Service Co., Ltd.
|
Japan
|
|
PG Insurance Service Co., Ltd. (PG Insurance Service Kabushiki Kaisha)
|
Japan
|
|
PGA Asian Retail Limited
|
Bermuda
|
|
PGA European Limited
|
Bermuda
|
|
PGIM (Australia) Pty Ltd
|
Australia
|
|
PGIM (Hong Kong) Ltd.
|
Hong Kong
|
|
PGIM (Scots) Limited
|
Scotland
|
|
PGIM (Singapore) Pte. Ltd.
|
Singapore
|
|
PGIM Financial Limited
|
England
|
|
PGIM Foreign Investments, Inc.
|
Delaware
|
|
PGIM Fund Management Limited
|
England
|
|
PGIM Holding Company LLC
|
Delaware
|
|
PGIM Investments, Inc.
|
Delaware
|
|
PGIM Korea Inc.
|
Korea, Republic of
|
|
PGIM Limited
|
England
|
|
PGIM Management Partner Limited
|
United Kingdom
|
|
PGIM Real Estate (Japan) Ltd.
|
Japan
|
|
PGIM Real Estate Brazil Investimentos Inmobiliarios Ltda.
|
Brazil
|
|
PGIM Real Estate CD S.a.r.l.
|
Luxembourg
|
|
PGIM Real Estate Co-Invest Holdings, LLC
|
Delaware
|
|
PGIM Real Estate France SAS
|
France
|
|
PGIM Real Estate Germany AG
|
Germany
|
|
PGIM Real Estate Luxembourg S.A.
|
Luxembourg
|
|
PGIM Real Estate Mexico S.C.
|
Mexico
|
|
PGIM Real Estate MVP Administradora IV, S. de R.L. de C.V.
|
Mexico
|
|
PGIM Real Estate MVP Inmuebles IV, S. de R.L. de C.V.
|
Mexico
|
|
PGIM Real Estate S. de R.L. de C.V.
|
Mexico
|
|
PGIM Warehouse, Inc.
|
Delaware
|
|
PGIM, Inc.
|
New Jersey
|
|
PGLH of Delaware, Inc.
|
Delaware
|
|
PGR Advisors I, Inc.
|
Delaware
|
|
PIC Realty Corporation
|
Delaware
|
|
PIFM Holdco, LLC
|
Delaware
|
|
PIM KF Blocker Holdings LLC
|
Delaware
|
|
PIM KF Blocker V Holdings LLC
|
Delaware
|
|
PIM USPF V Manager LLC
|
Delaware
|
|
PLA Administradora Industrial SRL
|
Mexico
|
|
PLA Administradora, LLC
|
Delaware
|
|
PLA Administradora, S. de R.L. de C.V.
|
Mexico
|
|
PLA Asesoria Profesional II, S. de R.L. de C.V.
|
Mexico
|
|
PLA Asesoria Profesional, S.de R.L. de C.V.
|
Mexico
|
|
PLA Co-Investor LLC
|
Delaware
|
|
PLA Mexico Industrial Manager I LLC
|
Delaware
|
|
PLA Mexico Industrial Manager II LLC
|
Delaware
|
|
PLA Residential Fund III Aggregating Manager, LLC
|
Delaware
|
|
PLA Residential Fund III Limited Manager, LLC
|
Delaware
|
|
PLA Residential Fund III Manager, LLC
|
Delaware
|
|
PLA Residential Fund IV Aggregating Manager, LLC
|
Delaware
|
|
PLA Residential Fund IV Manager, LLC
|
Delaware
|
|
PLA Retail Fund I Blue, LP
|
Delaware
|
|
PLA Retail Fund I Manager, LLC
|
Delaware
|
|
PLA Retail Fund I Red, LP
|
Delaware
|
|
PLA Retail Fund I, LP
|
Delaware
|
|
PLA Retail Fund II Aggregating Manager, LLC
|
Delaware
|
|
PLA Retail Fund II Manager, LLC
|
Delaware
|
|
PLA Retail Fund II U.S. Carry/Co-Invest, LP
|
Delaware
|
|
PLA Retail Fund II, LLC
|
Delaware
|
|
PLA Retail Fund II, LP
|
Delaware
|
|
PLA Retail Fund Manager I Sub, LLC
|
Delaware
|
|
PLA Services Manager Mexico, LLC
|
Delaware
|
|
PLNJ Realty Investments, LLC
|
Delaware
|
|
PMCC Holding Company
|
New Jersey
|
|
PMCF Holdings, LLC
|
Delaware
|
|
PMCF Properties, LLC
|
Delaware
|
|
PP Prudential Properties, Inc.
|
Delaware
|
|
PPPF General Partner LLP
|
England & Wales
|
|
PR GA SCP Apartments, LLC
|
Delaware
|
|
Pramerica (GP2) Limited
|
United Kingdom
|
|
Pramerica (Hong Kong) Holdings Limited
|
Hong Kong
|
|
Pramerica (Luxembourg) CP GP S.a.r.l.
|
Luxembourg
|
|
Pramerica (Scots) CP GP LLP
|
Scotland
|
|
Pramerica Business Consulting (Shanghai) Company Limited
|
China
|
|
Pramerica Europrisa Feeder GP LLP
|
England & Wales
|
|
Pramerica EVP CP LP
|
Scotland
|
|
Pramerica Financial Asia Headquarters Pte. Ltd.
|
Singapore
|
|
Pramerica Financial Asia Limited
|
British Virgin Islands
|
|
Pramerica Fosun Life Insurance Co., Ltd.
|
China
|
|
Pramerica General Partner LLP
|
England & Wales
|
|
Pramerica Holdings Ltd
|
England & Wales
|
|
Pramerica Life S.p.A.
|
Italy
|
|
Pramerica Marketing S.r.l.
|
Italy
|
|
Pramerica of Bermuda Life Assurance Company, Ltd.
|
Bermuda
|
|
Pramerica Pan European Real Estate (Scots) LP
|
Scotland
|
|
Pramerica PRECAP I GP LLP
|
England & Wales
|
|
Pramerica PRECAP II GP LLP
|
England & Wales
|
|
Pramerica PRECAP III GP LLP
|
England & Wales
|
|
Pramerica PRECAP IV GP LLP
|
England & Wales
|
|
Pramerica Property Partners Fund (Scotland) Limited Partnership
|
Scotland
|
|
Pramerica Property Partners Fund LLC
|
Delaware
|
|
Pramerica Real Estate Capital I (Scotland) Limited Partnership
|
Scotland
|
|
Pramerica Real Estate Capital I GP (Scotland) Limited
|
Scotland
|
|
Pramerica Real Estate Capital I GP (Scots Feeder) LLP
|
Scotland
|
|
Pramerica Real Estate Capital I GP Limited
|
England & Wales
|
|
Pramerica Real Estate Capital II (Scots) Limited Partnership
|
Scotland
|
|
Pramerica Real Estate Capital II GP Limited
|
England & Wales
|
|
Pramerica Real Estate Capital III (Scots), Limited Partnership
|
Scotland
|
|
Pramerica Real Estate Capital III GP Limited
|
England & Wales
|
|
Pramerica Real Estate Capital IV (Scots) Limited Partnership
|
Scotland
|
|
Pramerica Real Estate Capital IV GP (Scots Feeder) LLP
|
Scotland
|
|
Pramerica Real Estate Capital IV GP Limited
|
England & Wales
|
|
Pramerica Real Estate Capital V (Netherlands) GP LLP
|
England & Wales
|
|
Pramerica Real Estate Capital V (Scots), Limited Partnership
|
Scotland
|
|
Pramerica Real Estate Capital VI (Scots) Limited Partnership
|
Scotland
|
|
Pramerica Real Estate Investment Clubs (Scotland) Limited Partnership
|
Scotland
|
|
Pramerica Real Estate Investment Clubs Limited Partnership
|
England & Wales
|
|
Pramerica Real Estate Investors (Portugal) LDA
|
Portugal
|
|
Pramerica Real Estate Investors Limited
|
England
|
|
Pramerica Systems Ireland Limited
|
Ireland
|
|
Pramerica Zycie Towarzystwo Ubezpieczen i Reasekuracji Spólka Akcyjna
|
Poland
|
|
PRECO ACCOUNT III LLC
|
Delaware
|
|
PRECO Account IV LLC
|
Delaware
|
|
PRECO ACCOUNT PARTNERSHIP III, LP
|
Delaware
|
|
PRECO Account Partnership IV LP
|
Delaware
|
|
Preco III (Scotland) Limited Partnership
|
Scotland
|
|
PRECO III GP Limited LLC
|
Delaware
|
|
PRECO III GP LLP
|
England & Wales
|
|
Preco IV (Scotland) Limited Partnership
|
Scotland
|
|
PREFG Hanwha Manager, LLC
|
Delaware
|
|
PREI Acquisition I, Inc.
|
Delaware
|
|
PREI Acquisition II, Inc.
|
Delaware
|
|
PREI Acquisition LLC
|
Delaware
|
|
PREI Gayrimenkul Yatirim Ltd.
|
Germany
|
|
PREI HYDG, LLC
|
Delaware
|
|
PREI International, Inc.
|
Delaware
|
|
PREI Mezzanine Fund I LLC
|
Delaware
|
|
PREI Mezzanine Fund I LP
|
Delaware
|
|
PRIAC Property Acquisitions, LLC
|
Delaware
|
|
PRIAC Realty Investments, LLC
|
Delaware
|
|
PRICOA Capital Group Limited
|
England
|
|
PRICOA Management Partner Limited
|
England
|
|
Prince Albert Road Limited
|
Cayman Islands
|
|
PRISA Fund Manager LLC
|
Delaware
|
|
PRISA III Fund GP, LLC
|
Delaware
|
|
PRISA III Fund PIM, LLC
|
Delaware
|
|
Pru 101 Wood LLC
|
Delaware
|
|
PRU 3XSquare, LLC
|
Delaware
|
|
Pru Alpha Partners I, LLC
|
Delaware
|
|
Pru Fixed Income Emerging Markets Partners I LLC
|
Delaware
|
|
Pruco Assignment Corporation
|
Barbados
|
|
Pruco Life Insurance Company
|
Arizona
|
|
Pruco Life Insurance Company of New Jersey
|
New Jersey
|
|
Pruco Securities, LLC
|
New Jersey
|
|
PRUCO, LLC
|
New Jersey
|
|
Prudential 900 Aviation Boulevard, LLC
|
Delaware
|
|
Prudential Affordable Mortgage Company, LLC
|
Delaware
|
|
Prudential Agricultural Property Holding Company, LLC
|
Delaware
|
|
Prudential Annuities Distributors, Inc.
|
Delaware
|
|
Prudential Annuities Holding Company, Inc.
|
Delaware
|
|
Prudential Annuities Information Services & Technology Corporation
|
Delaware
|
|
Prudential Annuities Life Assurance Corporation
|
Arizona
|
|
Prudential Annuities, Inc.
|
Delaware
|
|
Prudential Arizona Reinsurance Captive Company
|
Arizona
|
|
Prudential Arizona Reinsurance Term Company
|
Arizona
|
|
Prudential Arizona Reinsurance Universal Company
|
Arizona
|
|
Prudential Asset Resources, Inc.
|
Delaware
|
|
Prudential Bank & Trust, FSB
|
United States
|
|
Prudential Capital and Investment Services, LLC
|
Delaware
|
|
Prudential Capital Energy Opportunity Fund, L.P.
|
Delaware
|
|
Prudential Capital Energy Partners Management Fund, L.P.
|
Delaware
|
|
Prudential Capital Group, L.P.
|
Delaware
|
|
Prudential Capital Partners Management Fund IV, L.P.
|
Delaware
|
|
Prudential Capital Partners Management Fund V, L.P.
|
Delaware
|
|
Prudential Chile II SpA
|
Chile
|
|
Prudential Chile SpA
|
Chile
|
|
Prudential Commercial Property Holding Company, LLC
|
Delaware
|
|
Prudential Customer Solutions LLC
|
Delaware
|
|
Prudential do Brasil Seguros de Vida S.A.
|
Brazil
|
|
Prudential Equity Group, LLC
|
Delaware
|
|
Prudential Financial Securities Investment Trust Enterprise
|
Taiwan Province of China
|
|
Prudential Financial, Inc.
|
New Jersey
|
|
Prudential Fixed Income Global Liquidity Relative Value Partners, LLC
|
Delaware
|
|
Prudential Fixed Income U.S. Relative Value Partners, LLC
|
Delaware
|
|
Prudential Funding, LLC
|
New Jersey
|
|
Prudential General Services of Japan Y.K.
|
Japan
|
|
Prudential Gibraltar Agency Co., Ltd. (Prudential Gibraltar Agency Kabushiki Kaisha)
|
Japan
|
|
Prudential Global Funding LLC
|
Delaware
|
|
Prudential Holdings of Japan, Inc.
|
Japan
|
|
Prudential Home Building Investment Advisers, L.P.
|
New Jersey
|
|
Prudential Home Building Investors, Inc.
|
New Jersey
|
|
Prudential Huntoon Paige Associates, LLC
|
Delaware
|
|
Prudential HYDF Carry/Co-Invest, L.P.
|
Delaware
|
|
Prudential IBH Holdco, Inc.
|
Delaware
|
|
Prudential Impact Investments Mortgage Loans LLC
|
Delaware
|
|
Prudential Impact Investments Private Debt LLC
|
Delaware
|
|
Prudential Impact Investments Private Equity LLC
|
Delaware
|
|
Prudential Industrial Properties, LLC
|
Delaware
|
|
Prudential Insurance Agency, LLC
|
New Jersey
|
|
Prudential International Insurance Holdings, Ltd.
|
Delaware
|
|
Prudential International Insurance Service Company, L.L.C.
|
Delaware
|
|
Prudential International Investments Advisers, LLC
|
Delaware
|
|
Prudential International Investments Cayman
|
Cayman Islands
|
|
Prudential International Investments Corporation
|
Delaware
|
|
Prudential International Investments, LLC
|
Delaware
|
|
Prudential Investment Management Japan Co., Ltd.
|
Japan
|
|
Prudential Investment Management Services LLC
|
Delaware
|
|
Prudential Investments LLC
|
New York
|
|
Prudential Japan Holdings, LLC
|
Delaware
|
|
Prudential Latin American Investments, Ltd.
|
Cayman Islands
|
|
Prudential Legacy Insurance Company of New Jersey
|
New Jersey
|
|
Prudential Life Insurance Company of Taiwan Inc.
|
Taiwan Province of China
|
|
Prudential Mortgage Asset Holdings 1 Japan Investment Business Limited Partnership
|
Japan
|
|
Prudential Mortgage Asset Holdings 2 Japan Investment Business Limited Partnership
|
Japan
|
|
Prudential Mortgage Capital Asset Holding Company, LLC
|
Delaware
|
|
Prudential Mortgage Capital Company, LLC
|
Delaware
|
|
Prudential Mortgage Capital Funding, LLC
|
Delaware
|
|
Prudential Mortgage Capital Holdings, LLC
|
Delaware
|
|
Prudential Multifamily Mortgage, LLC
|
Delaware
|
|
Prudential Mutual Fund Services LLC
|
New York
|
|
Prudential Newark Realty, LLC
|
New Jersey
|
|
Prudential Private Placement Investors L.P.
|
Delaware
|
|
Prudential Private Placement Investors, Inc.
|
New Jersey
|
|
PRUDENTIAL REAL ESTATE COMPANIES ACCOUNT II LLC
|
Delaware
|
|
Prudential Real Estate Companies Account Partnership II, LP
|
Delaware
|
|
Prudential Real Estate Companies Fund II (LP) LLC
|
Delaware
|
|
Prudential Real Estate Companies Fund II LLC
|
Delaware
|
|
Prudential Real Estate Management Co., Ltd. (Prudential Real Estate Management Yugen Kaisha)
|
Japan
|
|
Prudential Realty Securities, Inc.
|
Delaware
|
|
Prudential Retirement Financial Services Holding LLC
|
Delaware
|
|
Prudential Retirement Holdings, LLC
|
Delaware
|
|
Prudential Retirement Insurance and Annuity Company
|
Connecticut
|
|
Prudential Retirement Strategic Investments, LLC
|
Delaware
|
|
Prudential Securities Secured Financing Corporation
|
Delaware
|
|
Prudential Securities Structured Assets, Inc.
|
Delaware
|
|
Prudential Seguros Mexico, S.A.
|
Mexico
|
|
Prudential Seguros, S.A.
|
Argentina
|
|
Prudential Servicios, S. de R.L. de C.V.
|
Mexico
|
|
Prudential Structured Settlement Company
|
Delaware
|
|
Prudential Systems Japan, Limited
|
Japan
|
|
Prudential Term Reinsurance Company
|
Arizona
|
|
Prudential Trust Co., Ltd.
|
Japan
|
|
Prudential Trust Company
|
Pennsylvania
|
|
Prudential U.S. Real Estate Debt Fund GP LLC
|
Delaware
|
|
Prudential Universal Reinsurance Company
|
Arizona
|
|
Prudential/TMW Real Estate Group LLC
|
Delaware
|
|
Pruservicos Participacoes Ltda.
|
Brazil
|
|
PSF I Beteiligung GmbH & Co. KG
|
Germany
|
|
Quantitative Management Associates LLC
|
New Jersey
|
|
Quartzsite, LLC
|
Delaware
|
|
Residential Services Corporation of America LLC
|
Delaware
|
|
Rio CP LP
|
Scotland
|
|
Rock City MC, LLC
|
Delaware
|
|
Rock European Real Estate Holdings S.àr.l.
|
Luxembourg
|
|
Rock George V S.à. r.l.
|
Luxembourg
|
|
Rock Global Real Estate LLC
|
Delaware
|
|
Rock Hamburg North S.à r.l.
|
Luxembourg
|
|
Rock Harman House S.a.r.l.
|
Luxembourg
|
|
Rock Kensington Limited
|
Guernsey
|
|
Rock Meguro LLC
|
Delaware
|
|
Rock Oxford S.a r.l.
|
Luxembourg
|
|
Rock Rossmarkt S.ar.l.
|
Luxembourg
|
|
Rock UK Real Estate Holdings S.àr.l.
|
Luxembourg
|
|
Rock UK Real Estate II S.a.r.l.
|
Luxembourg
|
|
Rockstone Co., Ltd.
|
Japan
|
|
Rosado Grande LLC
|
Delaware
|
|
Ross Avenue Energy Fund Holdings, LLC
|
Delaware
|
|
Ross Avenue Minerals 2012, LLC
|
Delaware
|
|
Sanei Collection Service Co., Ltd. (Kabushiki Kaisha Sanei Shuuno Service)
|
Japan
|
|
Satsuki Co., Ltd. (Kabushiki Kaisha Satsuki)
|
Japan
|
|
SCP Apartments, LLC
|
Delaware
|
|
Securitized Asset Sales, Inc.
|
Delaware
|
|
Senior Housing Partners III, L.L.C.
|
Delaware
|
|
Senior Housing Partners III, L.P.
|
Delaware
|
|
Senior Housing Partners IV L.L.C.
|
Delaware
|
|
Senior Housing Partners V, LLC
|
Delaware
|
|
Senior Housing Partnership Fund IV L.L.C.
|
Delaware
|
|
Senior Housing Partnership Fund V, LLC
|
Delaware
|
|
Senior Housing UK II General Partner Limited
|
Jersey
|
|
SHP IV Carried Interest, LP
|
Delaware
|
|
SHP V Carried Interest, L.P.
|
Delaware
|
|
SMP Holdings, Inc.
|
Delaware
|
|
Sterling Private Placement Management LLP
|
England & Wales
|
|
Stetson Street Partners, L.P.
|
Delaware
|
|
Strand Investments Limited
|
Cayman Islands
|
|
SVIIT Holdings, Inc.
|
Delaware
|
|
TBG Insurance Services Corporation
|
Delaware
|
|
The Gibraltar Life Insurance Co., Ltd.
|
Japan
|
|
The Prudential Assigned Settlement Services Corp.
|
New Jersey
|
|
The Prudential Brazilian Capital Fund LP
|
Cayman Islands
|
|
The Prudential Gibraltar Financial Life Insurance Co., Ltd.
|
Japan
|
|
The Prudential Home Mortgage Company, Inc.
|
New Jersey
|
|
The Prudential Home Mortgage Securities Company, Inc.
|
Delaware
|
|
The Prudential Insurance Company of America
|
New Jersey
|
|
The Prudential Life Insurance Company of Korea, Ltd.
|
Korea, Republic of
|
|
The Prudential Life Insurance Company, Ltd.
|
Japan
|
|
The Prudential Real Estate Financial Services of America, Inc.
|
California
|
|
The Prudential Variable Contract Real Property Partnership
|
New Jersey
|
|
Thurloe Commercial Guernsey Limited
|
Guernsey
|
|
TMW ASPF I Verwaltungs GmbH & Co. KG
|
Germany
|
|
TMW ASPF Management GmbH
|
Germany
|
|
TMW Fonds Verwaltungsgesellschaft mbH
|
Germany
|
|
TMW Management, LLC
|
Georgia
|
|
TMW Real Estate Group, LLC
|
Delaware
|
|
TMW Realty Advisors, LLC
|
Georgia
|
|
TMW USPF III - Verwaltungs - GmbH & Co. KG
|
Germany
|
|
TMW USPF Verwaltungs GmbH
|
Germany
|
|
TRGOAG Company, Inc.
|
Delaware
|
|
U.S. Property Management III, L.P.
|
Georgia
|
|
UBI Pramerica SGR, S.p.A.
|
Italy
|
|
Universal Prudential Arizona Reinsurance Company
|
Arizona
|
|
USPF IV - Verwaltungs - GmbH & Co. KG
|
Germany
|
|
USPF V - Verwaltungs - GmbH & Co. KG
|
Germany
|
|
USPF V Carry LLC
|
Delaware
|
|
USPF V Co-Invest LLC
|
Delaware
|
|
USPF V Investment LP
|
Delaware
|
|
Vailsburg Fund LLC
|
Delaware
|
|
Vantage Casualty Insurance Company
|
Indiana
|
|
Wabash Avenue Holdings V, LLC
|
Delaware
|
|
Wabash Avenue Partners V, L.P.
|
Delaware
|
|
Yavapai LLC
|
Delaware
|
|
/s/ Thomas J. Baltimore, Jr.
|
|
Thomas J. Baltimore, Jr.
|
|
Director
|
|
/s/ Gilbert F. Casellas
|
|
Gilbert F. Casellas
|
|
Director
|
|
/s/ James G. Cullen
|
|
James G. Cullen
|
|
Director
|
|
/s/ Mark B. Grier
|
|
Mark B. Grier
|
|
Director
|
|
/s/ Martina Hund-Mejean
|
|
Martina Hund-Mejean
|
|
Director
|
|
/s/ Karl J. Krapek
|
|
Karl J. Krapek
|
|
Director
|
|
/s/ Peter R. Lighte
|
|
Peter R. Lighte
|
|
Director
|
|
/s/ George Paz
|
|
George Paz
|
|
Director
|
|
/s/ Sandra Pianalto
|
|
Sandra Pianalto
|
|
Director
|
|
/s/ Christine A. Poon
|
|
Christine A. Poon
|
|
Director
|
|
/s/ Douglas A. Scovanner
|
|
Douglas A. Scovanner
|
|
Director
|
|
/s/ Michael A. Todman
|
|
Michael A. Todman
|
|
Director
|
|
1.
|
I have reviewed this Annual Report on Form 10-K of Prudential Financial, Inc.;
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
Date: February 17, 2017
|
/s/ John R. Strangfeld
|
|
|
John R. Strangfeld
Chief Executive Officer
|
|
1.
|
I have reviewed this Annual Report on Form 10-K of Prudential Financial, Inc.;
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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(a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date: February 17, 2017
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/s/ Robert M. Falzon
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Robert M. Falzon
Chief Financial Officer
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Date: February 17, 2017
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/s/ John R. Strangfeld
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Name: John R. Strangfeld
Title: Chief Executive Officer
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Date: February 17, 2017
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/s/ Robert M. Falzon
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Name: Robert M. Falzon
Title: Chief Financial Officer
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