LENDING ACTIVITIES (Tables)

9 Months Ended

Sep. 30, 2012

LENDING ACTIVITIES

Composition of Mortgages and other loans receivable

(in millions)	September 30, 2012			December 31, 2011
Commercial mortgages*	$	13,679		$	13,554
Life insurance policy loans		2,962			3,049
Commercial loans, other loans and notes receivable		3,177			3,626
Total mortgage and other loans receivable		19,818			20,229
Allowance for losses		(488	)		(740	)
Mortgage and other loans receivable, net	$	19,330		$	19,489

*         Commercial mortgages primarily represent loans for office, retail and industrial properties, with exposures in California and New York representing the largest geographic concentrations (aggregating approximately 23 percent and 15 percent at September 30, 2012 and December 31, 2011, respectively). Over 99 percent of the commercial mortgages were current as to payments of principal and interest at September 30, 2012 and December 31, 2011.

Schedule of credit quality indicators for the commercial mortgage loans

September 30, 2012 (dollars in millions)	Number of Loans		Class														Percent of Total $
			Apartments		Offices		Retail		Industrial		Hotel		Others		Total
Credit Quality Indicator:
In good standing		1,000	$	1,582	$	4,808	$	2,577	$	1,795	$	1,064	$	1,383	$	13,209		97	%
Restructured(a)		8		49		206		7		8		–		22		292		2
90 days or less delinquent		2		–		–		26		–		–		–		26		–
90 days delinquent or in process of foreclosure		15		–		64		1		–		–		87		152		1
Total(b)		1,025	$	1,631	$	5,078	$	2,611	$	1,803	$	1,064	$	1,492	$	13,679		100	%
Valuation allowance			$	5	$	99	$	17	$	28	$	1	$	43	$	193		1	%

(a)     Loans that have been modified in troubled debt restructurings and are performing according to their restructured terms. For additional discussion of troubled debt restructurings see Note 8 to the Consolidated Financial Statements in the 2011 Annual Report.

(b)     Does not reflect valuation allowances.

Schedule of changes in the allowance for losses on Mortgage and other loans receivable

	2012									2011
Nine Months Ended September 30,(in millions)
	Commercial Mortgages			Other Loans			Total			Commercial Mortgages			Other Loans			Total
Allowance, beginning of year	$	305		$	435		$	740		$	470		$	408		$	878
Loans charged off		(12	)		(164	)		(176	)		(40	)		(46	)		(86	)
Recoveries of loans previously charged off		6			–			6			36			–			36
Net charge-offs		(6	)		(164	)		(170	)		(4	)		(46	)		(50	)
Provision for loan losses		(106	)		31			(75	)		(62	)		50			(12	)
Other		–			(7	)		(7	)		(55	)		–			(55	)
Allowance, end of period	$	193	*	$	295		$	488		$	349	*	$	412		$	761

*         Of the total, $38 million and $105 million relates to individually assessed credit losses on $332 million and $570 million of commercial mortgage loans as of September 30, 2012 and 2011, respectively.